XML 27 R17.htm IDEA: XBRL DOCUMENT v3.7.0.1
Discontinued Operations, Assets Held for Sale
 6 Months Ended
Jun. 30, 2017
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations,Assets Held for Sale
Discontinued Operations

During the fourth quarter of 2015, the Company sold its rights to its commercial products Abstral® (fentanyl) Sublingual Tablets and Zuplenz® (ondansetron) Oral Soluble Film.

The following table presents amounts related to the discontinued operations in the balance sheets (in thousands):
 
June 30, 2017
 
December 31, 2016
Carrying amounts of current assets of discontinued operations:
Accounts receivable
$
189

 
$
813

Total current assets of discontinued operations
189

 
813

 
 
 
 
Carrying amounts of current liabilities of discontinued operations:
Accounts payable
$
122

 
$
3,115

Accrued expenses and other current liabilities
8,248

 
2,944

Total current liabilities of discontinued operations
$
8,370

 
$
6,059


The following table represents the components attributable to the commercial operations that are presented in the condensed consolidated statements of operations as discontinued operations (in thousands):
 
Three Months Ended June 30,
 
Six months ended June 30,
 
2017
 
2016
 
2017
 
2016
Additional channel obligations
(105
)
 
(656
)
 
$
(428
)
 
$
(1,666
)
Selling, general, and administrative
(897
)
 
(2,233
)
 
(2,510
)
 
(4,614
)
Settlements associated with USAO NJ and DOJ and the qui tam action (Note 5)
(300
)
 
—

 
(7,800
)
 
—

Loss from discontinued operations
$
(1,302
)
 
$
(2,889
)
 
$
(10,738
)
 
$
(6,280
)


Additional channel obligations included in discontinued operations is comprised of larger than anticipated returns of product expiring throughout 2016 and rebates of Abstral sales for which we are responsible through the end of the first quarter of 2016. The increase in returns and rebates was driven by larger than expected volumes through these returns and rebate channels and additional price protection provisions over which the Company has no control.
Selling, general and administrative expense included in discontinued operations consists of all other expenses of our commercial operations that were required in order to market and sell our marketed products prior to our sales of the rights to these commercial products. These expenses include all personnel related costs, marketing, data, consulting, legal, and other outside services necessary to support the commercial operations. During the three and six months ended June 30, 2017 and 2016, the majority of the costs incurred in selling, general, and administrative expense in discontinued operations related to legal fees from external counsel associated with the Company's cooperation with the USAO NJ and DOJ's investigation of the sales and marketing practices of Abstral. The settlement recorded in the second quarter of 2017 relates to the oral agreement with the attorneys for the relator in the qui tam action to settle the statutorily mandated attorney fees award. These legal proceedings are disclosed in Note 5 and Part II, Item 1. On August 7, 2017, the Company entered into an oral settlement, which will be used to enter into a written settlement agreement, with the primary D&O liability insurance carrier regarding reimbursement of these attorneys’ fees. Under the settlement, the Company would receive a payment of $685,000 to reimburse the prior payments of the attorneys’ fees as well as such insurance carrier will advance the attorneys’ fees of four former employees who are incurring attorneys fees as a result of the USAO NJ and DOJ investigation from May 1, 2017 forward.