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Note 7 - Discontinued Operations - Sale of OMIDRIA | 12 Months Ended
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Dec. 31, 2023
Notes to Financial Statements |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Note 7—Discontinued Operations - Sale of OMIDRIA On December 23, 2021, we closed the sale of OMIDRIA and related assets, which is reported as discontinued operations in our consolidated statements of operations and comprehensive income. Upon closing, we received an up-front cash payment from Rayner of $126.0 million, and we retained the outstanding receivables and liabilities related to OMIDRIA as of the closing date. The year ended December 31, 2021, included a gain on the sale of OMIDRIA comprised as follows (in thousands):
Cash proceeds |  | $ | 125,993 |
OMIDRIA contract royalty asset |  |  | 184,570 |
Gain on sale of OMIDRIA, gross |  |  | 310,563 |
Transaction and closing costs |  |  | (1,972 | )
RSUs granted to transferred employees |  |  | (1,419 | )
Prepaid assets and inventory at cost |  |  | (1,524 | )
Gain on sale of OMIDRIA |  | $ | 305,648 |
In December 2022, the achievement of the Milestone Event triggered a $200.0 million Milestone Payment from Rayner which we received in February 2023. The Milestone Event also resulted in a reduction in the U.S. royalty rate from 50% to 30% on OMIDRIA net sales. The results of operations for OMIDRIA are recorded as income from discontinued operations for all periods presented in the consolidated statements of operations and comprehensive income (loss).
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | (In thousands) |
Product sales, net |  | $ | — |  |  | $ | — |  |  | $ | 110,735 |
Costs and expenses |  |  | — |  |  |  | — |  |  |  | 30,631 |
Gross margin |  |  | — |  |  |  | — |  |  |  | 80,104 |
Gain on sale of OMIDRIA |  |  | — |  |  |  | — |  |  |  | 305,648 |
Milestone income |  |  | — |  |  |  | 200,000 |  |  |  | — |
Interest on OMIDRIA contract royalty asset |  |  | 15,315 |  |  |  | 18,634 |  |  |  | — |
Remeasurement adjustments |  |  | 41,167 |  |  |  | 14,457 |  |  |  | — |
Other income |  |  | 1,087 |  |  |  | 307 |  |  |  | 1,035 |
Income before income tax |  |  | 57,569 |  |  |  | 233,398 |  |  |  | 386,787 |
Income tax expense (1) |  |  | (462 | ) |  |  | (3,952 | ) |  |  | (1,006 | )
Net income from discontinued operations, net of tax |  | $ | 57,107 |  |  | $ | 229,446 |  |  | $ | 385,781 |
(1) For further discussion of income tax expense refer to “Note 13 – Income Taxes”. The following schedule is a rollforward of the OMIDRIA contract royalty asset (in thousands):
Balance at December 31, 2021 |  | $ | 184,570 |
Royalties earned |  |  | (65,439 | )
Interest on OMIDRIA contract royalty asset |  |  | 18,634 |
Remeasurement adjustments |  |  | 14,457 |
Balance at December 31, 2022 |  |  | 152,222 |
Royalties earned |  |  | (40,595 | )
Interest on OMIDRIA contract royalty asset |  |  | 15,315 |
Remeasurement adjustments |  |  | 41,167 |
Balance at December 31, 2023 |  | $ | 168,109 |
Cash flow from discontinued operations is as follows:
|  | Year Ended December 31, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
|  | (In thousands) |
Net cash provided by discontinued operations from operating activities |  | $ | 241,317 |  |  | $ | 78,082 |  |  | $ | 55,380 |
Net cash provided by discontinued operations from investing activities |  | $ | — |  |  | $ | — |  |  | $ | 125,993 |

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