SEC Filing | Eagle Pharmaceuticals, Inc.

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egrx-20210930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to ____________

Commission File Number 001-36306

Eagle Pharmaceuticals, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware

2834

20-8179278

(State or Other Jurisdiction of
Incorporation or Organization)

(Primary Standard Industrial
Classification Code Number)

(I.R.S. Employer
Identification Number)

50 Tice Boulevard, Suite 315

Woodcliff Lake, NJ 07677

(201) 326-5300

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant's Principal Executive Offices)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of each exchange on which registered

Common stock, $0.001 par value per share

EGRX

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this Chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☒

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares outstanding of the registrant’s common stock as of November 2, 2021: 12,913,879 shares.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, or this Quarterly Report, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical fact contained in this Quarterly Report are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “could,” “will,” “would,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “intend,” “predict,” “seek,” “contemplate,” “project,” “continue,” “potential,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these identifying words. These forward-looking statements include, but are not limited to, statements about:

•the impact of the ongoing coronavirus 2019, or COVID-19, pandemic on our business and operations, results of operations and financial performance including: disruption in the sales of our marketed products; delays, interruptions or other adverse effects to clinical trials and patient enrollment; delays in regulatory review; manufacturing and supply chain interruptions; and the adverse effects on healthcare systems and disruption of the global economy overall;

•the potential benefits and commercial potential of rapidly infused bendamustine RTD, or Bendeka, Ryanodex® (dantrolene sodium), and bendamustine ready-to-dilute, or RTD, 500ml solution, or Belrapzo for approved indications and any expanded uses;

•sales of our products in various markets worldwide, pricing for our products, level of insurance coverage and reimbursement for our products, timing regarding development and regulatory approvals for our products or for additional indications or in additional territories;

•future expansion of our commercial organization and transition to third-parties in certain jurisdictions to perform sales, marketing and distribution functions;

•the number and timing of potential product launches, development initiatives or new indications for the Company’s product candidates, and the commercial potential of additional indications for our products;

•the initiation, timing, progress and results of our preclinical studies and clinical trials, and our research and development program;

•our ability to obtain and maintain regulatory approval of our products and product candidates, and any related restrictions, limitations, and/or warnings in the label of an approved product;

•our plans to research, develop and commercialize our products and product candidates and our ability to successfully commercialize our products and product candidates;

•our ability to attract collaborators with development, regulatory and commercialization expertise;

•the size and growth potential of the markets for our products and product candidates, and our ability to serve those markets;

•the diversion of healthcare resources away from the conduct of clinical trials as a result of the ongoing COVID-19 pandemic, including the diversion of hospitals and doctor offices serving as locations for administration of our products, including Bendeka and hospital staff supporting the conduct of such administration;

•the interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel, quarantines or social distancing protocols imposed or recommended by federal or state governments, employers and others in connection with the ongoing COVID-19 pandemic;

•the rate and degree of market acceptance of our products;

•our ability to significantly grow our commercial sales and marketing organization, whether alone or with potential future collaborators;

•the performance of our strategic partners and success of our current strategic partnerships and the timing and results of these partners’ preclinical studies and clinical trials, including the Company’s collaborations with its licensing partners SymBio, Combioxin SA and AOP Orphan Pharmaceuticals GmbH;

•regulatory developments in the United States and foreign countries;

•the performance of our third-party suppliers and manufacturers;

•the success of competing drugs that are or become available;

•the retention of key scientific or management personnel;

•our ability to obtain additional funding for our operations;

•our ability to obtain, maintain, protect and enhance intellectual property rights and proprietary technologies and operate our business without infringing the intellectual property rights and proprietary technology of third parties;

•our ability to prevent or minimize the effects of Paragraph IV patent litigation;

•our expectations regarding anticipated future costs, operating expenses and capital requirements;

•our expectations regarding our clinical trial, development plan and litigation matters for vasopressin; and

• our expectations regarding our submission of formal protocols for clinical study on fulvestrant (EA-114).

Any forward-looking statements in this Quarterly Report reflect our current views with respect to future events or to our future financial performance and involve known and unknown risks, uncertainties, assumptions and other factors described under the “Risk Factors” section and elsewhere in this Quarterly Report, that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Given these uncertainties, you should not place undue reliance on these forward-looking statements.

In addition, statements such as “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements as predictions of future events. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future.

This Quarterly Report also contains estimates, projections and other information concerning our industry, our business, and the markets for certain diseases, including data regarding the estimated size of those markets, and the incidence and prevalence of certain medical conditions. Information that is based on estimates, forecasts, projections, market research or similar methodologies is inherently subject to uncertainties and actual events or circumstances may differ materially from events and circumstances reflected in this information. Unless otherwise expressly stated, we obtained this industry, business, market and other data from reports, research surveys, studies and similar data prepared by market research firms and other third parties, industry, medical and general publications, government data and similar sources.

NOTE REGARDING COMPANY REFERENCES

References to the “Company,” “Eagle Pharmaceuticals,” “Eagle,” “we,” “us” or “our” mean Eagle Pharmaceuticals, Inc., a Delaware corporation, together with its subsidiaries, references to “Eagle Biologics” mean Eagle Biologics, Inc. and references to “Eagle Research Lab” means Eagle Research Lab Limited.

NOTE REGARDING TRADEMARKS

All trademarks, trade names and service marks appearing in this Quarterly Report are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this Quarterly Report may appear without the ® or TM symbols.

TABLE OF CONTENTS



		Page
Part I - Financial Information (unaudited)

Item 1.	Condensed Consolidated Financial Statements
	Condensed Consolidated Balance Sheets (unaudited) as of September 30, 2021 and December 31, 2020	1
	Condensed Consolidated Statements of Operations (unaudited) for the three months and nine months ended September 30, 2021 and 2020	2
	Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) for the three months and nine months ended September 30, 2021 and 2020	3
	Condensed Consolidated Statements of Changes in Stockholders' Equity (unaudited) for the three months and nine months ended September 30, 2021 and 2020	4
	Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2021 and 2020	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	29
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42

Part II - Other Information

Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	45
Item 4.	Mine Safety Disclosures	45
Item 5.	Other Information	45
Item 6.	Exhibits	46
	Signatures	47

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

EAGLE PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands, except share amounts)



	September 30, 2021		December 31, 2020

ASSETS
Current assets:
Cash and cash equivalents	$	99,741	$	103,155
Accounts receivable, net	45,335		50,678
Inventories	9,315		8,075
Prepaid expenses and other current assets	17,303		4,157
Total current assets	171,694		166,065
Property and equipment, net	1,775		2,077
Intangible assets, net	10,799		12,917
Goodwill	39,743		39,743
Deferred tax asset, net	17,713		15,180
Other assets	14,537		17,208
Total assets	$	256,261	$	253,190
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable	$	12,717	$	6,268
Accrued expenses and other liabilities	27,714		23,817

Current portion of long-term debt	8,000		8,000
Total current liabilities	48,431		38,085
Other long-term liabilities	3,048		3,959

Long-term debt, less current portion	19,489		25,135
Total liabilities	70,968		67,179
Commitments and Contingencies
Stockholders' equity:
Preferred stock, 1,500,000 shares authorized and no shares issued or outstanding as of September 30, 2021 and December 31, 2020	—		—
Common stock, $0.001 par value; 50,000,000 shares authorized; 16,886,123 and 16,739,203 shares issued as of September 30, 2021 and December 31, 2020, respectively	17		17
Additional paid in capital	320,566		305,403
Accumulated other comprehensive loss	(882)		—
Retained earnings	82,058		84,489
Treasury stock, at cost, 3,941,541 and 3,682,176 shares as of September 30, 2021 and December 31, 2020, respectively	(216,466)		(203,898)
Total stockholders' equity	185,293		186,011
Total liabilities and stockholders' equity	$	256,261	$	253,190

See accompanying notes to condensed consolidated financial statements (unaudited).

EAGLE PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(In thousands, except share and per share amounts)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

Revenue:
Product sales, net	$	12,124	$	17,317	$	48,865	$	49,387
Royalty revenue	27,729		27,611		80,361		83,499
License and other revenue	—		5,000		—		5,000
Total revenue	39,853		49,928		129,226		137,886
Operating expenses:
Cost of product sales	5,486		8,726		21,835		23,804
Cost of royalty revenue	2,773		3,260		8,036		9,120
Research and development	23,289		4,828		47,488		21,390
Selling, general and administrative	18,482		17,697		54,997		60,411



Total operating expenses	50,030		34,511		132,356		114,725
(Loss) income from operations	(10,177)		15,417		(3,130)		23,161
Interest income	197		46		395		542
Interest expense	(396)		(489)		(1,240)		(2,164)
Other expense	(2,284)		(6,049)		(1,797)		(10,249)
Total other expense, net	(2,483)		(6,492)		(2,642)		(11,871)
(Loss) income before income tax benefit (provision)	(12,660)		8,925		(5,772)		11,290
Income tax benefit (provision)	7,038		(1,866)		3,341		(7,358)
Net (loss) income	$	(5,622)	$	7,059	$	(2,431)	$	3,932


(Loss) earnings per share attributable to common stockholders:
Basic	$	(0.43)	$	0.52	$	(0.19)	$	0.29
Diluted	$	(0.43)	$	0.51	$	(0.19)	$	0.28
Weighted average number of common shares outstanding:
Basic	13,077,298		13,531,372		13,103,203		13,620,981
Diluted	13,077,298		13,786,803		13,103,203		13,917,800

See accompanying notes to condensed consolidated financial statements (unaudited).

EAGLE PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

(In thousands)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020

Net (loss) income	$	(5,622)	$	7,059	$	(2,431)	$	3,932

Other comprehensive income (loss), net of tax:

Unrealized gain (loss) for convertible promissory note	22		—		(882)		—

Total other comprehensive income (loss)	22		—		(882)		—

Comprehensive (loss) income	$	(5,600)	$	7,059	$	(3,313)	$	3,932

EAGLE PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)

(In thousands)


	Common Stock			Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive (Loss) Income		Retained Earnings		Total Stockholders' Equity
	Number of Shares	Amount
Balance at June 30, 2021	16,880	$	17	$	316,249	$	(208,195)	$	(904)	$	87,680	$	194,847
Stock-based compensation expense	—	—		4,084		—		—		—		4,084
Issuance of common stock upon exercise of stock option grants	6	—		233		—		—		—		233


Common stock repurchases	—	—		—		(8,271)		—		—		(8,271)
Other comprehensive income	—	—		—		—		22		—		22
Net (loss)	—	—		—		—		—		(5,622)		(5,622)
Balance at September 30, 2021	16,886	$	17	$	320,566	$	(216,466)	$	(882)	$	82,058	$	185,293


	Common Stock			Additional Paid-In Capital		Treasury Stock		Accumulated Other Comprehensive Loss		Retained Earnings		Total Stockholders' Equity
	Number of Shares	Amount
Balance as of December 31, 2020	16,739	$	17	$	305,403	$	(203,898)	$	—	$	84,489	$	186,011
Stock-based compensation expense	—	—		14,873		—		—		—		14,873
Issuance of common stock upon exercise of stock option grants	84	—		1,841		—		—		—		1,841

Issuance of common stock related to vesting of restricted stock units	63	—		(1,551)		—		—		—		(1,551)
Common stock repurchases	—	—		—		(12,568)		—		—		(12,568)
Other comprehensive loss	—	—		—		—		(882)		—		(882)
Net (loss)	—	—		—		—		—		(2,431)		(2,431)
Balance as of September 30, 2021	16,886	$	17	$	320,566	$	(216,466)	$	(882)	$	82,058	$	185,293


	Common Stock			Additional Paid-In Capital		Treasury Stock		Retained Earnings		Total Stockholders' Equity
	Number of Shares	Amount
Balance at June 30, 2020	16,622	$	17	$	291,434	$	(176,860)	$	69,373	$	183,964
Stock-based compensation expense	—	—		4,722		—		—		4,722
Issuance of common stock upon exercise of stock option grants	3	—		42		—		—		42
Payment of employee withholding tax upon vesting of stock-based awards	—	—		—		—		—		—
Issuance of common stock related to vesting of restricted stock units	—	—		—		—		—		—
Common stock repurchases	—	—		—		(23,000)		—		(23,000)
Net income	—	—		—		—		7,059		7,059
Balance at September 30, 2020	16,625	$	17	$	296,198	$	(199,860)	$	76,432	$	172,787


	Common Stock			Additional Paid-In Capital		Treasury Stock		Retained Earnings		Total Stockholders' Equity
	Number of Shares	Amount
Balance at December 31, 2019	16,538	$	17	$	278,518	$	(171,861)	$	72,500	$	179,174
Stock-based compensation expense	—	—		18,435		—		—		18,435
Issuance of common stock upon exercise of stock option grants	42	—		555		—		—		555
Payment of employee withholding tax upon vesting of stock-based awards	—	—		(1,310)		—		—		(1,310)
Issuance of common stock related to vesting of restricted stock units	45	—		—		—		—		—
Common stock repurchases	—	—		—		(27,999)		—		(27,999)
Net income	—	—		—		—		3,932		3,932
Balance at September 30, 2020	16,625	$	17	$	296,198	$	(199,860)	$	76,432	$	172,787

See accompanying notes to unaudited condensed consolidated financial statements.

EAGLE PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)


	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net (loss) income	$	(2,431)	$	3,932
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Deferred income taxes	(2,533)		(1,671)
Depreciation expense	575		656
Noncash operating lease expense related to right-of-use assets	768		980
Amortization expense of intangible assets	2,118		1,999
Fair value adjustments on equity investment	1,900		7,700
Stock-based compensation expense	14,873		18,435
Convertible promissory note related credit losses	150		—
Amortization of debt issuance costs	354		301
Fair value adjustments related to derivative instrument	(254)		2,549
Accretion of discount on convertible promissory note	(102)		—
Changes in operating assets and liabilities which provided (used) cash:
Accounts receivable	5,343		(4,195)
Inventories	(1,240)		(20)
Prepaid expenses and other current assets	(8,821)		(2,774)
Accounts payable	6,449		7,606
Accrued expenses and other liabilities	3,897		(3,916)
Other assets and other long-term liabilities, net	(908)		(1,845)
Net cash provided by operating activities	20,138		29,737
Cash flows from investing activities:
Purchase of equity investment security	—		(17,500)
Purchase of property and equipment	(274)		(577)
Purchase of convertible promissory note	(5,000)		—




Net cash used in investing activities	(5,274)		(18,077)
Cash flows from financing activities:
Proceeds from common stock option exercises	1,841		555

Employee withholding taxes related to stock-based awards	(1,551)		(1,310)

Proceeds from existing revolving credit facility	—		110,000
Repayment of existing revolving credit facility	—		(110,000)
Payment of debt	(6,000)		(3,000)
Repurchases of common stock	(12,568)		(27,999)
Net cash used in financing activities	(18,278)		(31,754)
Net decrease in cash and cash equivalents	(3,414)		(20,094)
Cash and cash equivalents at beginning of period	103,155		109,775
Cash and cash equivalents at end of period	$	99,741	$	89,681
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Income taxes, net	$	6,303	$	3,036
Interest	917		1,878
Right-of-use asset obtained in exchange for lease obligation - lease amendment	—		842

See accompanying notes to condensed consolidated financial statements (unaudited).

EAGLE PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(In thousands, except share and per share amounts)

1. Basis of Presentation and Other Company Information

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for reporting quarterly information. Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. The condensed consolidated balance sheet at December 31, 2020 was derived from audited financial statements, but certain information and footnote disclosures normally included in our annual consolidated financial statements have been condensed or omitted. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for the fair presentation of the financial information for the interim periods reported have been made. Results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results for the year ending December 31, 2021 or any period thereafter. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on March 5, 2021.

We are an integrated pharmaceutical company focused on finding ways to help medicines do more for patients. We and our collaborators have the capabilities to take a molecule from preclinical research through regulatory approval and into the marketplace, including development, manufacturing and commercialization. Our business model applies our scientific expertise, proprietary research-based insights and marketplace proficiency to identify challenging-to-treat diseases of the central nervous system or metabolic critical care therapeutic areas as well as in oncology. By focusing on patients' unmet needs, we strive to provide healthcare professionals with urgently needed treatment solutions that are designed to improve patient care and outcomes and create near- and long-term value for our stakeholders, including patients and healthcare providers and our employees, marketing partners, collaborators and investors. Our science-based business model has a proven track record with U.S. Food and Drug Administration ("FDA") approval and commercial launches of three products: Ryanodex® (dantrolene sodium) ("Ryanodex"), bendamustine ready-to-dilute ("RTD") 500ml solution ("Belrapzo"), and rapidly infused bendamustine RTD ("Bendeka"). We market our products through marketing partners and/or our internal direct sales force. We market Ryanodex and Belrapzo, and Teva Pharmaceutical Industries Ltd. ("Teva") markets Bendeka through its subsidiary Cephalon, Inc. SymBio Pharmaceuticals Limited, or SymBio, markets Treakisym, a RTD product, in Japan. Reflecting further expansion of our oncology portfolio, in February 2020, we received final FDA approval for Pemfexy, a branded alternative to Alimta for metastatic non-squamous non-small cell lung cancer and malignant pleural mesothelioma.

With several pipeline projects underway and the potential for up to five product launches over the next several years, we believe we have many growth opportunities ahead. We believe that each of our pipeline projects currently has the potential to enter the market as a first-in-class, first-to-file, first-to-market or best-in-class product. In particular, we are applying our expertise to conduct novel research regarding the potential for Ryanodex to address conditions including Alzheimer’s disease, traumatic brain injury/concussion, nerve agent exposure and acute radiation syndrome. In addition, our clinical development program includes a strategic partnership with Tyme Technologies, Inc., or Tyme, for Tyme’s product candidate for the treatment of patients with pancreatic or other advanced cancers, SM-88, as well as investigations of compounds such as EA-114 (our fulvestrant product candidate) for patients with HR-positive advanced breast cancer. Other products in development include Vasopressin, our first-to-file Abbreviated New Drug Application, or ANDA, that references Endo International plc’s Vasostrict indicated to increase blood pressure in adults with vasodilatory shock who remain hypotensive despite fluids and catecholamines; and EA-111, a new chemical entity and next-generation ryanodine receptor antagonist, in an intramuscular formulation that that would allow for easier and more rapid administration in emergency situations (military and civilian).

2. Summary of Significant Accounting Policies

Significant Accounting Policies

Our significant accounting policies are described in the audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2020 and the notes thereto filed with the SEC on March 5, 2021. Since the date

of those consolidated financial statements, there have been no material changes to our significant accounting policies other than as listed below.

Significant Risks and Uncertainties

In response to the ongoing COVID-19 pandemic, we have taken and continue to take active measures designed to address and mitigate the impact of the COVID-19 pandemic on our business, such as remote working policies, facilitating management’s periodic communication to address employee and business concerns and providing frequent updates to our Board of Directors (“Board”). During the second quarter of 2021, we implemented a plan to reopen our office to allow employees to return to the office, with a focus on employee safety and optimal work environment. Our management continues to monitor and evaluate such plans as the pandemic continues to evolve. We anticipate that the COVID-19 pandemic may also have an impact on the clinical development timelines for certain of our clinical programs. We also anticipate that the COVID-19 pandemic may have an impact on our supply chain. The COVID-19 pandemic and associated lockdowns have resulted in a decrease in healthcare utilization broadly and specifically lead to a continuing reduction in the utilization of physician-administered oncology products including Belrapzo and Bendeka. In addition, the COVID-19 pandemic has delayed the timing of certain litigation, including the litigation with Par (as defined below) with respect to Vasopressin, and we anticipate that such delays will continue for the duration of the pandemic. The extent to which the COVID-19 pandemic will continue to impact our business, clinical development and regulatory efforts, supply chain and sales efforts, corporate development objectives and the value of, and market for, our common stock will depend on future developments that are highly uncertain and cannot be predicted with confidence at this time, such as the ultimate duration of the pandemic, travel restrictions, quarantines, social distancing and business closure requirements in the United States, and other countries, and the effectiveness of actions taken globally to contain and treat the disease. The global economic slowdown, the overall disruption of global healthcare systems and other risks and uncertainties associated with the pandemic have impacted our operations and could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

In addition, we are subject to other challenges and risks specific to our business and our ability to execute on our business plan and strategy, as well as risks and uncertainties common to companies in the pharmaceutical industry with research and development operations, including, without limitation, risks and uncertainties associated with: delays or problems in obtaining clinical supply; obtaining regulatory approval of product candidates; loss of single source suppliers or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing additional products or product candidates; product development and the inherent uncertainty of clinical success; the challenges of protecting and enhancing intellectual property rights; and the challenges of complying with applicable regulatory requirements. In addition, as the ongoing COVID-19 pandemic affects our business and results of operations, it may also have the effect of heightening many of the other risks and uncertainties discussed above.

Use of Estimates

These financial statements are presented in U.S. dollars and are prepared in accordance with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed financial statements including disclosure of contingent assets and contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period and accompanying notes. Our critical accounting policies are those that are both most important to our financial condition and results of operations and require the most difficult, subjective or complex judgments on the part of management in their application, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. We anticipate that the COVID-19 pandemic will continue to disrupt our supply chain and marketing and sales efforts for certain of our products, including Bendeka, although it is not currently expected that any disruption would be significant. As of the date of issuance of these financial statements, we are not aware of any specific event or circumstance that would require us to update our estimates, assumptions and judgments or revise the carrying value of our assets or liabilities. Because of the uncertainty of factors surrounding the estimates or judgments used in the preparation of the financial statements, actual results may materially vary from these estimates, and any such differences may be material to our financial statements.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform with the current year presentation, including for amounts related to accounts receivable, net and prepaid expenses and other current assets. None of the amounts pertaining to the reclassifications were significant.

Cash and Cash Equivalents

We consider all highly liquid investments with an original maturity of three months or less to be cash equivalents. All cash and cash equivalents are held in United States financial institutions. The carrying amount of cash and cash equivalents approximates its fair value due to its short-term nature.

We, at times, maintain balances with financial institutions in excess of the Federal Deposit Insurance Corporation (“FDIC”) limit.

Fair Value Measurements

U.S. GAAP establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes the following fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value:

•Level 1: Quoted prices in active markets for identical assets or liabilities.

•Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

•Level 3: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The fair value of interest-bearing cash, cash equivalents, accounts receivable and accounts payable approximate fair value due to their life being short term in nature, and are classified as Level 1 for all periods presented.

Financial assets and liabilities measured and recognized at fair value are as follows:


	September 30, 2021
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	95,255	$	95,255	$	—	$	—
Convertible promissory note	3,795		—		—		3,795
Embedded derivative asset in convertible promissory note	530		—		—		530
Investment in Tyme	10,300		10,300		—		—
Total financial assets	$	109,880	$	105,555	$	—	$	4,325


	December 31, 2020
	Total		Level 1		Level 2		Level 3
Assets:
Money market funds	$	79,682	$	79,682	$	—	$	—
Investment in Tyme	12,200		12,200		—		—
Total financial assets	$	91,882	$	91,882	$	—	$	—

We recognize transfers between levels within the fair value hierarchy, if any, at the end of each quarter. There were no transfers in or out of Level 1, Level 2 or Level 3 during the three months or nine months ended September 30, 2021 and 2020, respectively.

Our investment in the convertible promissory note and the embedded derivative are classified as Level 3. We analyzed and accessed the embedded derivative feature contained in the convertible promissory note agreement. We used a probability factor to value the embedded derivative asset based on management's best estimate, including the principal and estimated accrued interest among other contractual terms. The convertible promissory note is accounted for as available for sale. The convertible promissory note is reported at fair value with unrealized gains and losses included in Accumulated other comprehensive income (loss). Refer to Note 13, Convertible Promissory Note for further details.

Our investment in restricted shares of common stock of Tyme Technologies, Inc.are classified as Level 1. Refer to Note 12, License and Collaboration Agreements for further details.

The fair value of debt is classified as Level 2 for the periods presented and approximates its book value due to the variable interest rate.

Intangible Assets

We review the recoverability of our finite-lived intangible assets and long-lived assets for indicators of impairments. Events or circumstances that may require an impairment assessment include negative clinical trial results, a significant decrease in the market price of the asset, or a significant adverse change in legal factors or the manner in which the asset is used. If such indicators are present, we assess the recoverability of affected assets by determining if the carrying value of such assets is less than the sum of the undiscounted future cash flows of the assets. If such assets are found to not be recoverable, we measure the amount of the impairment by comparing to the carrying value of the assets to the fair value of the assets. The Company determined that no indicators of impairment of finite-lived intangible assets or long-lived assets existed as of September 30, 2021.

Goodwill

Goodwill represents the excess of purchase price over the fair value of net assets acquired in the Eagle Biologics acquisition. Goodwill is not amortized, but is evaluated for impairment on an annual basis, in the fourth quarter, or more frequently if events or changes in circumstances indicate that the reporting unit’s goodwill is less than its carrying amount. We did not identify any impairment to goodwill during the periods presented.

Concentration of Major Customers and Vendors

We are dependent on our commercial partner, Teva, who markets and sells Bendeka. Our customer for Bendeka is our commercial and licensing partner; therefore, our future revenues are highly dependent on the related exclusive license and distribution arrangement.

The total revenues and accounts receivables broken down by major customers as a percentage of the total are as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Total revenues
Teva - See Revenue Recognition	69	%	74	%	66	%	72	%


Other	31	%	26	%	34	%	28	%
	100	%	100	%	100	%	100	%


	September 30,		December 31,
	2021		2020
Accounts receivable
Teva - See Revenue Recognition	63	%	58	%

Other	37	%	42	%
	100	%	100	%

Inventories

Inventories are recorded at the lower of cost and net realizable value, with cost determined on a first-in first-out basis. We periodically review the composition of inventory in order to identify obsolete, slow-moving or otherwise non-saleable items. If non-saleable items are observed and there are no alternate uses for the inventory, we will record a write-down to lower of cost and net realizable value in the period that the decline in value is first recognized.

Research and Development Expense

Costs for research and development are charged to expense as incurred and include; employee-related expenses including salaries, benefits, travel and stock-based compensation expense for research and development personnel; expenses incurred under agreements with contract research organizations, contract manufacturing organizations and service providers that assist in conducting clinical and preclinical studies; costs associated with preclinical activities and development activities, costs associated with regulatory operations; and depreciation expense for assets used in research and development activities.

Costs for certain development activities, such as in licensing intellectual property related to new projects, clinical studies, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to us by our vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the patterns of costs incurred, and are reflected in the condensed consolidated financial statements as prepaid expenses or accrued expenses as deemed appropriate. Recoveries of previously recognized research and development expenses from third parties are recorded as a reduction to research and development expense in the period it becomes realizable.

Advertising and Marketing

Advertising and marketing costs are expensed as incurred. Advertising and marketing costs were $0.5 million and $0.3 million for the three months ended September 30, 2021 and 2020, respectively, and $1.3 million and $2.2 million for the nine months ended September 30, 2021 and 2020, respectively.

Income Taxes

We account for income taxes using the liability method in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), 740 - Income Taxes (“ASC 740”). Deferred tax assets and liabilities are determined based on temporary differences between financial reporting and tax bases of assets and liabilities and are measured by applying enacted rates and laws to taxable years in which differences are expected to be recovered or settled. Further, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income (loss) in the period that the rate changes. A valuation allowance is required when it is “more likely than not” that all or a portion of deferred tax assets will not be realized. ASC 740 also prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that a company has taken or expects to take on a tax return, including a decision whether to file or not file a return in a particular jurisdiction. We recognize any interest and penalties accrued related to unrecognized tax benefits as income tax expense.

Revenue Recognition

Revenue is recognized when a customer obtains control of promised goods or services, in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. To determine revenue recognition for

arrangements that an entity determines are within the scope of ASC 606 - Revenue from Contracts with Customers (“ASC 606”), we perform the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. We only apply the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of ASC 606, we assess the goods or services promised within each contract and determines those that are performance obligations, and assess whether each promised good or service is distinct. We then recognize as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Receivables from our product sales have payment terms ranging from 30 to 75 days with select extended terms to wholesalers on initial purchases of product launch quantities. Our receivables from royalty revenue are due 45 days from the end of the quarter.

Product revenue - We recognize net revenue on sales to our commercial partners and to end users. In each instance, revenue is generally recognized when the customer obtains control of our product, which occurs at a point in time, and may be upon shipment or upon delivery based on the contractual shipping terms of a contract.

Revenue on sales to commercial partners relates to Bendeka and Treakisym. Sales to our commercial partners are presented gross because we are primarily responsible for fulfilling the promise to provide the product, and are responsible to ensure that the product is produced in accordance with the related supply agreement and we bear risk of loss while the inventory is in-transit to the commercial partner.

Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or services to a customer. To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that should be included in the transaction price utilizing the expected value method to which we expect to be entitled. As such, revenue on sales to customers for Belrapzo and Ryanodex are recorded net of chargebacks, rebates, returns, prompt pay discounts, wholesaler fees and other deductions. Our products are contracted with a limited number of oncology distributors and hospital buying groups with narrow differences in ultimate realized contract prices used to estimate our chargeback and rebate reserves. We have a product return policy on some of our products that allows the customer to return pharmaceutical products within a specified period of time both prior to and subsequent to the product’s expiration date. Our estimate of the provision for returns is analyzed quarterly and is based upon many factors, including historical experience of actual returns and analysis of the level of inventory in the distribution channel, if any. We have terms on sales of Ryanodex by which we do not accept returns. Variable consideration is included in the transaction price if, in our judgment, it is probable that a significant future reversal of cumulative revenue under the contract will not occur. Estimates of variable consideration are made using the expected value method and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available. We believe that the estimates we have established are reasonable based upon current facts and circumstances. Applying different judgments to the same facts and circumstances could result in the estimated amounts to vary.

Components of Gross-to-Net (GTN) Estimates

Chargebacks: Chargebacks are discounts that occur when certain contracted customers, including group purchasing organizations (“GPOs”), public health service institutions and federal government entities purchasing via the Federal Supply Schedule, purchase from our distributors. Our distributors purchase product from us at invoice price, then resell the product to certain contracted customers on the basis of prices negotiated between us and the providers. The difference between the distributors’ purchase price and the typically lower certain contracted customers’ purchase price is refunded to the distributors through a chargeback credit. We record estimates for these chargebacks at the time of sale as deductions from gross revenues, with corresponding adjustments to our accounts receivable reserves and allowances.

The provision for chargebacks is the most significant provision in the context of our gross-to-net adjustments in the determination of net revenue. Chargebacks are estimated based on payer mix and contracted price, adjusted for current period assumptions.

Commercial and Medicaid Rebates: We contract with government agencies or collectively, third-party payors, so that Belrapzo and Ryanodex will be eligible for purchase by, or partial or full reimbursement from, such third-party payors. We estimate the rebates we will provide to third-party payors and deducts these estimated amounts from total gross product revenues at the time the revenues are recognized. These reserves are recorded in the same period in which the revenue is recognized, resulting in a

reduction of product revenue and the establishment of a current liability. The current liability is included in accrued expenses and other current liabilities on the consolidated balance sheets. We estimate the rebates that we will provide to third-party payors based upon (i) our contracts with these third-party payors, (ii) the government mandated discounts applicable to government-funded programs, (iii) a range of possible outcomes that are probability-weighted for the estimated payer mix, and (iv) information obtained from our distributors.

The information that we also consider when establishing our rebate reserves are purchases by customers, projected annual sales for customers, actual rebates payments made, processing time lags, and for indirect rebates, the level of inventory in the distribution channel that will be subject to indirect rebates. We do not provide incentives designed to increase shipments to our customers that we believe would result in out-of-the-ordinary course of business inventory for them. We regularly review and monitor estimated or actual customer inventory information at our largest distributors for our key products to ascertain whether customer inventories are in excess of ordinary course of business levels.

Product Returns: Our distributors have the right to return unopened unprescribed Belrapzo during certain time periods around the period beginning prior to the labeled expiration date and ending after the labeled expiration date. We estimate future product returns on sales of Belrapzo based on: (i) data provided to us by our distributors (including weekly reporting of distributors’ sales and inventory held by distributors that provided us with visibility into the distribution channel in order to determine what quantities were sold to retail pharmacies and other providers), (ii) information provided to us from retail pharmacies, (iii) data provided to us by a third-party data provider which collects and publishes prescription data, and other third parties, (iv) historical industry information regarding return rates for similar pharmaceutical products, (v) the estimated remaining shelf life of Belrapzo previously shipped and currently being shipped to distributors and (vi) contractual agreements intended to limit the amount of inventory maintained by our distributors. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a current liability which is included in accrued expenses and other current liabilities on the condensed consolidated balance sheets.

Our provision for product returns based on the factors noted above generally encompass a time range from 12 to 48 months after revenue is recognized. Additionally, we consider other factors when estimating our current period return provision, including levels of inventory in the distribution channel, significant market changes that may impact future expected returns, and actual product returns, and may record additional provisions for specific returns that it believes are not covered by the historical rates. Our commercial returns policy and terms with certain customers also states that certain products are sold as non-returnable.

Wholesaler fees and other incentives: We generally provide invoice discounts on Belrapzo and Ryanodex sales to our distributors for prompt payment and fees for distribution services, such as fees for certain data that distributors provide to us. The payment terms for sales to distributors generally include a 2% discount for prompt payment which is generally defined in invoice terms as a range from 30 to 70 days, while the fees for distribution services are based on contractual rates agreed with the respective distributors. Based on historical data, we expect our distributors to earn these discounts and fees, and deducts the full amount of these discounts and fees from our gross product revenues and accounts receivable at the time such revenues are recognized.

Other GTN considerations

We may at our discretion provide price adjustments due to various competitive factors. There are circumstances under which we may not provide price adjustments to certain customers as a matter of business strategy, and consequently may lose future sales volume to competitors and risk a greater level of product returns.

As detailed above, we have the experience and access to relevant information that we believe are necessary to reasonably estimate the amounts of such deductions from gross revenues. Some of the assumptions we use for certain of these estimates are based on information received from third parties, such as wholesale customer inventories and market data, or other market factors beyond our control. The estimates that are most critical to the establishment of these reserves, and therefore, would have the largest impact if these estimates were not accurate, are estimates related to contract sales volumes, average contract pricing, customer inventories and return volumes. We regularly review the information related to these estimates and adjust our reserves accordingly, if and when actual experience differs from previous estimates. With the exception of the product returns allowance, the ending balances of accounts receivable reserves and allowances generally are processed during a two-month to four-month period.

Royalty Revenue — We recognize revenue from license arrangements with our commercial partners' net sales of products. In accordance with ASC 606-10-55-65, royalties are recognized when the subsequent sale of the commercial partner’s products occurs. Our commercial partners are obligated to report their net product sales and the resulting royalty due to us within 25 days for Bendeka. Based on historical product sales, royalty receipts and other relevant information, we accrue royalty revenue each quarter and subsequently determine a true-up when we receive royalty reports from our commercial partners. Historically, these true-up adjustments have been immaterial.

License and other revenue — We analyze each element of our licensing agreements to determine the appropriate revenue recognition. The terms of the license agreement may include payment to us of non-refundable up-front license fees, milestone payments if specified objectives are achieved, and/or royalties on product sales. We recognize revenue from upfront payments at a point in time, typically upon fulfilling the delivery of the associated intellectual property to the customer.

If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. Contracts that contain multiple performance obligations require an allocation of the transaction price based on the estimated relative standalone selling prices of the promised products or services underlying each performance obligation. We determine standalone selling prices based on the price at which the performance obligation is sold separately. If the standalone selling price is not observable through past transactions, we estimate the standalone selling price taking into account available information such as market conditions and internally approved pricing guidelines related to the performance obligations.

We recognize sales-based milestone payments as revenue upon the achievement of the cumulative sales amount specified in the contract in accordance with ASC 606-10-55-65. For those milestone payments which are contingent on the occurrence of particular future events, we determined that these need to be considered for inclusion in the calculation of total consideration from the contract as a component of variable consideration using the most-likely amount method. As such, we assess each milestone to determine the probability and substance behind achieving each milestone. Given the inherent uncertainty of the occurrence of these future events, we will not recognize revenue from the milestone until there is not a high probability of a reversal of revenue, which typically occurs near or upon achievement of the event.

When determining the transaction price of a contract, an adjustment is made if payment from a customer occurs either significantly before or significantly after performance, resulting in a significant financing component. Applying the practical expedient in paragraph 606-10-32-18, we do not assess whether a significant financing component exists if the period between when we perform our obligations under the contract and when the customer pays is one year or less. None of our contracts contained a significant financing component as of September 30, 2021.

Stock-Based Compensation

We account for stock-based compensation using the fair value provisions of ASC 718, Compensation - Stock Compensation that requires the recognition of compensation expense, using a fair-value based method, for costs related to all stock-based payments including stock options and restricted stock. This topic requires companies to estimate the fair value of the stock-based awards on the date of grant for options issued to employees and directors and record expense over the employees' service periods, which are generally the vesting period of the equity awards.

We account for stock-based compensation by measuring and recognizing compensation expense for all stock-based payments made to employees and directors based on estimated grant date fair values. The straight-line method is used to allocate compensation cost to reporting periods over each optionee's requisite service period, which is generally the vesting period. The fair value of our stock option awards to employees and directors is estimated using the Black-Scholes valuation model and a Monte Carlo simulation model is used to estimate the fair value for market condition share units. These models require the input of subjective assumptions, including the expected stock price volatility, the calculation of expected term, historical forfeitures and the fair value of the underlying common stock on the date of grant, among other inputs. The risk-free interest rate is determined with the implied yield currently available for zero-coupon U.S. government issues with a remaining term approximating the expected life of the options. The fair value of restricted stock units ("RSUs") granted are estimated based on the trading price of our common stock on the date of grant. The fair value of performance condition performance-based stock units ("PSUs") granted are also estimated based on the trading price of our common stock on the date of grant and adjusted for the probability of achievement of the performance conditions. Forfeitures are estimated for all stock-based awards.

Earnings Per Share

Basic earnings per common share is computed using the weighted average number of shares outstanding during the period. Diluted earnings per share is computed in a manner similar to the basic earnings per share, except that the weighted-average number of shares outstanding is increased to include all common shares, including those with the potential to be issued by virtue of warrants, options, convertible debt and other such convertible instruments. Diluted earnings per share contemplate a complete conversion to common shares of all convertible instruments only if they are dilutive in nature with regards to earnings per share.

The anti-dilutive common share equivalents outstanding for the three and nine months ended September 30, 2021 and 2020 were as follows:


	Three Months Ended September 30,		Nine Months Ended September 30,
	2021	2020	2021	2020
Stock options	2,446,657	3,156,166	2,777,995	2,905,021
Restricted stock units	—	205,891	123,600	225,177
Total	2,446,657	3,362,057	2,901,595	3,130,198

The following table sets forth the computation for basic and diluted net (loss) earnings per share for the three and nine months ended September 30, 2021 and 2020:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator
Numerator for basic and diluted (loss) earnings per share-net (loss) earnings	$	(5,622)	$	7,059	$	(2,431)	$	3,932
Denominator
Basic weighted average common shares outstanding	13,077,298		13,531,372		13,103,203		13,620,981
Dilutive effect of stock awards	—		255,431		—		296,819
Diluted weighted average common shares outstanding	13,077,298		13,786,803		13,103,203		13,917,800
Basic net (loss) earnings per share
Basic net (loss) earnings per share	$	(0.43)	$	0.52	$	(0.19)	$	0.29
Diluted net (loss) earnings per share
Diluted net (loss) earnings per share	$	(0.43)	$	0.51	$	(0.19)	$	0.28

All potentially dilutive items were excluded from the diluted share calculation for the three months and nine months ended September 30, 2021 because their effect would have been anti-dilutive, as the Company was in a loss position.

Recent Accounting Pronouncements

Recent Accounting Pronouncements - Not Yet Adopted

In March 2020, the FASB issued Update 2020-04 Reference Rate Reform (Topic 848), Facilitation of the Effects of Reference Rate Reform on Financial Reporting to provide temporary optional guidance to ease the potential burden in accounting for

reference rate reform. The amendments in Update 2020-04 are elective and apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR, formerly known as the London Interbank Offered Rate,

or another reference rate expected to be discontinued due to reference rate reform. The new guidance provides optional expedients, including; (1) Simplify accounting analyses under current GAAP for contract modifications, such as modifications of contracts within the scope of Topic 470, Debt, that will be accounted for by prospectively adjusting the effective interest rate, as if any modification was not substantial. That is, the original contract and the new contract shall be accounted for as if they were not substantially different from one another; (2) Simplify the assessment of hedge effectiveness and allow hedging relationships affected by reference rate reform to continue; (3) Allow a one-time election to sell or transfer debt securities classified as held to maturity before January 1, 2020 that reference a rate affected by reference rate reform. The amendments are effective for all entities from the beginning of an interim period that includes the issuance date of the ASU. An entity may elect to apply the amendments prospectively through December 31, 2022. The adoption of ASU 2020-4 is not expected to have a material impact on our financial position or results of operations.

3. Property and Equipment, net

Property and equipment consisted of the following:


	September 30, 2021		December 31, 2020		Estimated Useful Life (years)
Furniture and fixtures	$	1,476	$	1,476	7
Office equipment	1,077		1,152		3
Equipment	3,834		3,485		7
Leasehold improvements	1,155		1,155		2
	7,542		7,268
Less accumulated depreciation	(5,767)		(5,191)
Property and equipment, net	$	1,775	$	2,077

Depreciation expense related to property and equipment amounted to $197 and $196 for the three months ended September 30, 2021 and 2020, respectively, and $575 and $656 for the nine months ended September 30, 2021 and 2020, respectively.

4. Inventories

Inventories consist of the following:


	September 30,		December 31,
	2021		2020
Raw materials	$	6,006	$	3,515
Work in process	1,309		2,589
Finished products	2,000		1,971
Total inventories	$	9,315	$	8,075

5. Balance Sheet Accounts

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consist of the following:


	September 30,		December 31,
	2021		2020
Prepaid income taxes	$	5,898	$	—
Prepaid FDA user fee and advances to clinical research organization	1,478		1,262
Prepaid insurance	468		191
Advances to commercial manufacturers	734		660
Receivable from commercial partner	1,746		439
Convertible promissory note, net	4,551		—
All other	2,428		1,605
Total prepaid expenses and other current assets	$	17,303	$	4,157

Accrued Expenses

Accrued expenses consist of the following:


	September 30,		December 31,
	2021		2020
Accrued sales reserves	$	3,046	$	4,966
Royalties payable to commercial partners	4,879		5,996
Accrued salary and other compensation	5,255		4,686
Accrued professional fees	2,552		2,370
Accrued research & development	8,528		2,724
Current portion of lease liability	1,199		1,123
Accrued other	2,255		1,952
Total accrued expenses	$	27,714	$	23,817

Leases

We lease office space in Woodcliff Lake, New Jersey for our principal office under an amended lease agreement through June 2025. We also lease a lab space in Cambridge, Massachusetts under a lease agreement through April 2024. Both of our leases are classified as operating leases and have remaining lease terms of approximately 3.3 years. The principal office and the lab space leases include renewal options to extend the lease for up to 5 years. Furthermore, we have not elected the practical expedient to separate lease and non-lease components for all classes of underlying assets.

The table below summarizes our total lease costs included in the condensed consolidated financial statements, as well as other required quantitative disclosures (in thousands):


	September 30, 2021			December 31, 2020




Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows for operating leases	$	1,040		$	1,323
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—		$	855
Weighted-average remaining lease term - operating leases	3.3 years			4.1 years
Weighted-average discount rate - operating leases	6.0		%	6.0		%













Balance Sheet Classification as of September 30:
Current lease liabilities (included with Accrued Expenses and other liabilities)	$	1,199
Long-term lease liabilities (included with Other long-term liabilities)	3,048
Total lease liabilities	$	4,247

6. Intangible Assets, Net

The gross carrying amounts and net book value of our intangible assets are as follows:


		September 30, 2021
	Useful Life (In Years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Ryanodex intangible (i)	20	$	15,000	$	(4,404)	$	10,596
Developed technology	5	8,100		(7,897)		203
Total		$	23,100	$	(12,301)	$	10,799


		December 31, 2020
	Useful Life (In Years)	Gross Carrying Amount		Accumulated Amortization		Net Book Value
Ryanodex intangible (i)	20	15,000		(3,500)		11,500
Developed technology	5	8,100		(6,683)		1,417
Total		$	23,100	$	(10,183)	$	12,917

(i) Represents a one-time payment made to reduce the royalties payable to a third party on Ryanodex net sales.

Amortization expense was $706 and $667 for the three months ended September 30, 2021 and 2020, respectively and $2,118 and $1,999 for the nine months ended September 30, 2021 and 2020, respectively.

Estimated Amortization Expense for Intangible Assets

Based on definite-lived intangible assets recorded as of September 30, 2021, and assuming that the underlying assets will not be impaired and that we will not change the expected lives of the assets, future amortization expenses are estimated as follows:


	Estimated Amortization Expense

Year Ending December 31,
2021 (remainder)	504
2022	1,369
2023	1,570
2024	1,898
2025	1,520
Thereafter	3,938
Total estimated amortization expense	$	10,799

7. Common Stock and Stock-Based Compensation

Common Stock

Share Repurchase Program

On March 17, 2020, we announced that our Board approved a new share repurchase program, or the Share Repurchase Program, providing for the repurchase of up to an aggregate of $160 million of our outstanding common stock. The Share Repurchase Program replaced our then existing share repurchase program, or the Previous Share Repurchase Program, which was announced on October 30, 2018 and was terminated in connection with the Board’s approval of the Share Repurchase Program. At termination, we had repurchased approximately $68 million of our outstanding common stock under the Previous Share Repurchase Program.

Under the Share Repurchase Program, we are authorized to repurchase shares through open market purchases, privately-negotiated transactions, accelerated share repurchases or otherwise in accordance with applicable federal securities laws, including through Rule 10b5-1 trading plans and under Rule 10b-18 of the Exchange Act. The repurchases have no time limit and may be suspended or discontinued completely at any time. The specific timing and amount of repurchases will vary based on available capital resources and other financial and operational performance, market conditions, securities law limitations, and other factors. The repurchases will be made using our cash resources.

On September 23, 2020, our Board of Directors approved a $25 million accelerated share repurchase (“ASR”) transaction with JPMorgan Chase Bank, National Association (“JP Morgan”) as part of our existing $160 million share repurchase program. The specific number of shares to be repurchased pursuant to the ASR is based on the average of the daily volume weighted average share prices of our common stock, less a discount, during the term of the ASR program. Under the terms of our agreement with JP Morgan, we paid $25 million to JP Morgan on September 24, 2020, and received 550,623 shares, representing the notional amount of the ASR, based on the average of the daily volume weighted average share prices of our common stock, less a discount, during the term of the ASR, which was $45.40. The ASR was completed in the fourth quarter of 2020. We determined the ASR contained a forward contract and therefore we recorded fair value adjustments on the accelerated share repurchase agreement in the amount of $3 million which was a loss recorded in Other expense on our consolidated statements of operations in the year ended December 31, 2020.

As of September 30, 2021, we had repurchased an aggregate of 3,941,541 shares of common stock for an aggregate of $219.5 million pursuant to our share repurchase programs in effect since August 2016.

Stock-Based Compensation

In November 2013, our Board of Directors approved the 2014 Equity Incentive Plan (the "2014 Plan") which became effective on February 11, 2014. The 2014 Plan provides for the awards of incentive stock options, non-qualified stock options, restricted stock, restricted stock units and other stock-based awards. Awards generally vest equally over a period of four years from grant

date. Vesting may be accelerated under a change in control of the Company or in the event of death or disability to the recipient. In the event of termination, any unvested shares or options are forfeited.

During the first quarter of 2018, we introduced a new long-term incentive program with the objective to better align the stock-based awards granted to management with our focus on improving total shareholder return over the long-term. The stock-based awards granted under this long-term incentive program consist of time-based stock options, time-based RSUs and PSUs. PSUs are comprised of awards: i) that would have vested upon achievement of certain share price appreciation conditions or ii) that would have vested upon achievement of certain milestone events. These PSUs expired in the first quarter of 2021.

During the first quarter of 2021, 97,750 market condition PSUs expired. We also granted 99,500 market condition PSUs based on our total shareholder return ("TSR") relative to the TSR of each member of the S&P Biotechnology Select Industry Index (the defined peer group) with a weighted-average grant date fair value of $71.09 per respective PSU. The fair value of PSUs granted to employees was estimated using a Monte Carlo simulation model. Inputs used in the calculation include a risk-free interest rate of 0.18%, an expected volatility of