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COMMITMENTS AND CONTINGENCIES | 9 Months Ended
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Sep. 30, 2024
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES In consideration for certain technology, manufacturing, distribution, and selling rights and licenses granted to the Company, the Company has agreed to pay royalties on sales of certain products that it sells. The royalty payments that the Company made under these agreements were not significant for any of the periods presented. In the ordinary course of its business, the Company is involved in, from time to time, various legal actions, including any matters described below, involving product liability, employment, intellectual property and commercial disputes, shareholder related matters, environmental proceedings, tax disputes, and governmental proceedings and investigations, some of which have been settled by the Company. In the opinion of management, such matters are either adequately covered by insurance or otherwise indemnified, or are not expected, individually or in the aggregate, to result in a material, adverse effect on the Company’s financial condition. However, it is possible that the Company’s results of operations, financial position and cash flows in a particular period could be materially affected by these contingencies. The Company accrues for loss contingencies when it is deemed probable that a loss has been incurred and that loss is estimable. If the reasonable estimate of a probable loss is a range, and no amount within the range is a better estimate than any other, the minimum amount of the range is recorded. In most cases, significant judgment is required to estimate the amount and timing of a loss to be recorded and actual results may differ from these estimates. The amounts accrued are based on the full amount of the estimated loss before considering insurance proceeds and do not include an estimate for legal fees expected to be incurred in connection with the loss contingency. The Company consistently accrues legal fees expected to be incurred in connection with loss contingencies as those fees are incurred by outside counsel as a period cost. On December 21, 2023, Fortis Advisors, LLC (representative of the security holders of ACell, Inc. (“ACell”)) filed for arbitration against Integra Life Sciences claiming breach of contract related to the earnout consideration from the 2021 acquisition of ACell. Refer to the contingent consideration section of this footnote for additional information on the ACell contingent considerations. The Company believes that it has strong defenses to the allegations in the arbitration and intends to defend the matter vigorously. On September 12, 2023, a securities class action complaint, captioned Pembroke Pines Firefighters & Police Officers Pension Fund v. Integra LifeSciences Holdings Corporation, No. 23-cv-20321 (D.N.J.), was filed by a purported stockholder of the Company in the United States District Court for the District of New Jersey (the “Pembroke Litigation”) against the Company and certain of the Company’s current and former executive officers. The Pembroke Litigation, filed on behalf of a putative class of stockholders who purchased or acquired the Company’s common stock between March 11, 2019 and May 22, 2023, inclusive, alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, on the basis of purportedly materially false and misleading statements and omissions relating to certain quality systems issues identified by the U.S. Food and Drug Administration at the Company’s Boston, Massachusetts manufacturing facility, the Company’s efforts to remediate those issues, and the Company’s forecasts for certain products in its Tissue Technologies segment. The complaint seeks, among other things, compensatory damages, attorneys’ fees, expert fees, and other costs. The Company believes that it has strong defenses to the allegations in the Pembroke Litigation, and intends to defend the matter vigorously. On March 17, 2021, a complaint was filed against the Company in the Court of Common Pleas of Philadelphia County in Pennsylvania asserting product liability claims relating to a surgical procedure in which the Company’s CUSA® Clarity allegedly was used. The plaintiff seeks damages against the Company based upon plaintiff’s claim that the CUSA® Clarity did not function as intended. The plaintiff also asserts separate claims against the surgeon and the hospital. In the third quarter of 2024, a settlement was reached, which has since been paid by the Company’s insurance carriers. Contingent Consideration The Company determined the fair value of contingent consideration during the nine month period ended September 30, 2024 and September 30, 2023 to reflect the change in estimate, additions, payments, transfers and the time value of money during each period. A reconciliation of the opening balances to the closing balances of these Level 3 measurements for the nine months ended September 30, 2024 and September 30, 2023 is as follows (in thousands):
Nine Months Ended September 30, 2024 |  | Contingent Consideration Liability Related to Acquisition of: |  |
| Arkis |  | Location in Financial Statements |  | Derma Sciences |  | ACell |  | Surgical Innovations Associates (SIA), Inc. |  | Location in Financial Statements
Balance as of January 1, 2024 |  | $ | 15,755 |  |  |  |  | $ | 2,557 |  |  | $ | 300 |  |  |  |  | 68,700 |  |  |
Payment |  |  |  |  |  |  |  |  |  |  |  | (12,400) |  |  |
Change in fair value of contingent consideration liabilities |  | (3,019) |  |  | Research and development |  | 137 |  |  | — |  |  |  |  | 3,100 |  |  | Selling, general and administrative
Balance as of September 30, 2024 |  | 12,736 |  |  |  |  | 2,694 |  |  | 300 |  |  |  |  | 59,400 |  |  |
Short-Term |  | $ | 8,320 |  |  |  |  | $ | — |  |  | $ | — |  |  |  |  | $ | 19,600 |  |  | Accrued expenses and other current liabilities
Long-Term |  | 4,416 |  |  |  |  | 2,694 |  |  | 300 |  |  |  |  | 39,800 |  |  | Other liabilities
Total |  | 12,736 |  |  |  |  | 2,694 |  |  | 300 |  |  |  |  | 59,400 |  |  |
Nine Months Ended September 30, 2023 |  | Contingent Consideration Liability Related to Acquisition of: |
| Arkis |  | Location in Financial Statements |  | Derma Sciences |  |  |  | ACell |  | Surgical Innovations Associates (SIA), Inc. | Location in Financial Statements
Balance as of January 1, 2023 |  | $ | 12,895 |  |  |  |  | $ | 230 |  |  |  |  | $ | 3,700 |  |  | $ | 57,600 |  |
Change in fair value of contingent consideration liabilities |  | 1,991 |  |  | Research and development |  | 1,887 |  |  |  |  | (2,200) |  |  | 6,600 |  | Selling, general and administrative
Balance as of September 30, 2023 |  | $ | 14,886 |  |  |  |  | $ | 2,117 |  |  |  |  | $ | 1,500 |  |  | $ | 64,200 |  |
Short-Term |  | $ | 4,373 |  |  |  |  | $ | — |  |  |  |  | $ | 503 |  |  | $ | 13,000 |  | Accrued expenses and other current liabilities
Long-Term |  | 10,513 |  |  |  |  | 2,117 |  |  |  |  | 997 |  |  | 51,200 |  | Other liabilities
Total |  | 14,886 |  |  |  |  | 2,117 |  |  |  |  | 1,500 |  |  | 64,200 |  |
Arkis BioSciences Inc. As part of the acquisition of Arkis BioSciences Inc. (“Arkis”), the Company is required to pay the former shareholders of Arkis up to $25.5 million based on the timing of certain development milestones of $10.0 million and commercial sales milestones of $15.5 million, respectively. The Company used a probability weighted income approach to calculate the fair value of the contingent consideration that considered the possible outcomes of scenarios related to each specified milestone. The Company estimated the fair value of the contingent consideration to be $13.1 million at the acquisition date. Derma Sciences, Inc. The Company assumed contingent consideration incurred by Derma Sciences, Inc. (“Derma Sciences”) related to its acquisitions of BioD, LLC and the intellectual property related to Medihoney® products. The Company accounted for the contingent liabilities by recording the fair value on the date of the acquisition based on a probability weighted income approach. The Company has already paid $33.3 million related to the aforementioned contingent liabilities. One contingent milestone remains, which relates to net sales of Medihoney products exceeding certain amounts defined in the agreement between the Company and Derma Sciences. The potential maximum undiscounted payment amounts to $3.0 million. ACell, Inc. As part of the acquisition of ACell, the Company is required to make payments to the former shareholders of ACell up to $100 million in total for years 2022, 2023, and 2025 based on the achievement by the Company of certain revenue-based performance milestones. The 2022 and 2023 milestones were not achieved, leaving only one contingent milestone remaining. The Company used iterations of the Monte Carlo simulation to calculate the fair value of the contingent consideration that considered the possible outcomes of scenarios related to each specific milestone. The Company estimated the fair value of the contingent consideration to be $23.9 million at the acquisition date. Surgical Innovations Associates, Inc. As part of the acquisition of Surgical Innovations Associates, Inc. (“SIA”), the Company is required to pay to the former shareholders of SIA up to $90.0 million for two separate payments, which are dependent on (1) achieving certain revenue-based performance milestones in 2023, 2024, and 2025 (up to $50.0 million in additional payments), as well as (2) the approval by the FDA of the pre-market approval ("PMA") application for DuraSorb for certain uses by certain timing targets (up to $40.0 million in additional payments). In the second quarter of 2024, the Company paid out $12.4 million related to the 2023 performance year. The Company used iterations of the Monte Carlo simulation to calculate the fair value of the contingent consideration for the revenue-based milestone that considered the possible outcomes of scenarios related to each specific milestone for the revenue based performance milestone. The Company used probabilities of achieving the conditions to calculate the fair value of the contingent consideration for the PMA approval milestone. The Company estimated the fair value of the contingent consideration for the revenue based milestone to be $32.6 million at the acquisition date and $25.0 million for the PMA approval milestone at the acquisition date. Other Commitments In October 2024, the Company entered into a definitive agreement to acquire a manufacturing facility in Plainsboro, New Jersey for $10 million in cash at closing. The manufacturing facility is currently leased by the Company. The transaction is expected to close in the first quarter of 2025.

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