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What changed in Assertio Holdings, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Assertio Holdings, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+506 added−532 removedSource: 10-K (2025-03-12) vs 10-K (2024-03-11)

Top changes in Assertio Holdings, Inc.'s 2024 10-K

506 paragraphs added · 532 removed · 333 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

74 edited+50 added−82 removed74 unchanged
Biggest changeConsolidated Revenue Accounts Receivable related to product shipments For the years ended December 31, For the years ended December 31, 2023 2022 2023 2022 AmerisourceBergen Corporation 35 % 28 % 57 % 21 % McKesson Corporation 21 % 28 % 12 % 25 % Cardinal Health 18 % 23 % 14 % 42 % Other significant customer 10 % 4 % 10 % 4 % All others 16 % 17 % 7 % 8 % Total 100 % 100 % 100 % 100 % The change in the percentage of consolidated revenue by customer and the percentage of accounts receivable by customer related to product shipments for the year ended December 31, 2022 to December 31, 2023 was primarily driven by the impact of change in product mix, including the addition of ROLVEDON from the Spectrum Merger and the decrease in INDOCIN net product sales.
Biggest changeConsolidated Revenue Accounts Receivable related to product shipments For the years ended December 31, As of December 31, 2024 2023 2024 2023 Cencora (formerly AmerisourceBergen Corporation) 40 % 35 % 33 % 57 % McKesson Corporation 30 % 21 % 42 % 12 % Cardinal Health 8 % 18 % 6 % 14 % Other significant customer 7 % 10 % 13 % 10 % All others 15 % 16 % 6 % 7 % Total 100 % 100 % 100 % 100 % The changes in the percentage of consolidated revenue by customer and the percentage of accounts receivable related to product shipments by customer for the years ended December 31, 2024 and December 31, 2023 were primarily driven by the impact of change in product mix, including the addition of ROLVEDON as a result of the acquisition of Spectrum on July 31, 2023, which resulted in a full year of ROLVEDON net product sales being included in the year ended December 31, 2024, compared to five months of net product sales included in the year ended December 31, 2023, and the decrease in INDOCIN net product sales due to generic launches.
Liability arises, primarily, when an entity knowingly submits, or causes another to submit, a false claim for reimbursement to the federal government.
Liability primarily arises when an entity knowingly submits, or causes another to submit, a false claim for reimbursement to the federal government.
Interchangeability requires that a product is biosimilar 15 to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.
Interchangeability requires that a product is biosimilar to the reference product and the product must demonstrate that it can be expected to produce the same clinical results as the reference product in any given patient and, for products that are administered multiple times to an individual, the biologic and the reference biologic may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biologic.
Department of Veterans Affairs’ Federal Supply Schedule Program, and (iv) the Health Resources and Services Administration’s 340B Drug Pricing Program. These rebates are subject to our active participation in the respective programs. We must also report specific prices to government agencies under healthcare programs, such as the Medicaid Drug Rebate Program and Medicare Part B Program.
Department of Veterans Affairs’ Federal 15 Supply Schedule Program, and (iv) the Health Resources and Services Administration’s 340B Drug Pricing Program. These rebates are subject to our active participation in the respective programs. We must also report specific prices to government agencies under healthcare programs, such as the Medicaid Drug Rebate Program and Medicare Part B Program.
Although there are several statutory exceptions and regulatory safe harbors protecting certain business arrangements from prosecution, the exceptions and safe harbors are drawn narrowly and practices that involve remuneration intended to induce referrals, prescribing, purchasing, or recommending covered products may be subject to scrutiny if they do not qualify for an exception or safe harbor.
Although there are several statutory exceptions and regulatory safe harbors protecting 16 certain business arrangements from prosecution, the exceptions and safe harbors are drawn narrowly and practices that involve remuneration intended to induce referrals, prescribing, purchasing, or recommending covered products may be subject to scrutiny if they do not qualify for an exception or safe harbor.
With respect to any of our products sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable privacy laws and post‑marketing 20 requirements, including safety surveillance, anti‑fraud and abuse laws, and implementation of corporate compliance programs, and reporting of payments or transfers of value to healthcare professionals.
With respect to any of our products sold in a foreign country, we may be subject to similar foreign laws and regulations, which may include, for instance, applicable privacy laws and post‑marketing requirements, including safety surveillance, anti‑fraud and abuse laws, and implementation of corporate compliance programs, and reporting of payments or transfers of value to healthcare professionals.
The Federal Food, Drug and Cosmetic Act and, for biological products, the Public Health Service Act, as well as other federal and state statutes and regulations govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products.
The Federal Food, Drug and Cosmetic Act (the “FDCA”) and, for biological products, the Public Health Service Act, as well as other federal and state statutes and regulations govern, among other things, the research, development, testing, manufacture, storage, recordkeeping, approval, labeling, promotion and marketing, distribution, post-approval monitoring and reporting, sampling, and import and export of pharmaceutical products.
Also, third‑party payors continue to control costs by limiting coverage through the use of formularies and other cost‑containment mechanisms, and the amount of reimbursement for particular procedures or drug treatments. 16 The cost of pharmaceutical products continues to generate substantial governmental and third‑party payor interest.
Also, third‑party payors continue to control costs by limiting coverage through the use of formularies and other cost‑containment mechanisms, and the amount of reimbursement for particular procedures or drug treatments. The cost of pharmaceutical products continues to generate substantial governmental and third‑party payor interest.
Complexities associated with the larger, and often more complex, structures of biological products, as well as the processes by which such products are manufactured, pose significant hurdles to implementation of the abbreviated approval pathway that are still being addressed by the FDA.
Complexities associated with the larger, and 14 often more complex, structures of biological products, as well as the processes by which such products are manufactured, pose significant hurdles to implementation of the abbreviated approval pathway that are still being addressed by the FDA.
In addition, other regulatory action, including, among other things, warning letters, the seizure of products, injunctions, consent decrees placing significant restrictions on or suspending manufacturing operations, civil penalties, and criminal prosecution may be pursued.
In addition, other regulatory or enforcement action, including, among other things, warning letters, the seizure of products, injunctions, consent decrees placing significant restrictions on or suspending manufacturing operations, civil penalties, and criminal prosecution may be pursued.
The federal False Claims Act imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment by a federal healthcare program.
The federal False Claims Act (“FCA”) imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment by a federal healthcare program.
Drugs approved under an ANDA are commonly referred to as “generic equivalents” to the listed drug and often can or are required to be substituted by pharmacists fulfilling prescriptions written for the original listed drug.
Drugs approved under 13 an ANDA are commonly referred to as “generic equivalents” to the listed drug and often can or are required to be substituted by pharmacists fulfilling prescriptions written for the original listed drug.
Preclinical and Clinical Studies Governmental approval is required of all potential pharmaceutical and biological products prior to the commercial use of those products. The regulatory process takes several years and requires substantial funds.
Preclinical and Clinical Studies Governmental approval is required of all potential prescription pharmaceutical and biological products prior to the commercial use of those products. The regulatory process takes several years and requires substantial funds.
The Biologics Price Competition and Innovation Act The Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act of 2010, (collectively, the“ACA”) includes a subtitle called the Biologics Price Competition and Innovation Act (“BPCIA”), which authorizes the FDA to license a biological product candidate that is biosimilar to or interchangeable with an FDA-licensed biologic through an abbreviated pathway.
The Biologics Price Competition and Innovation Act The Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act of 2010, (collectively, the “ACA”) includes a subtitle called the Biologics Price Competition and Innovation Act (“BPCIA”), which authorizes the FDA to license a biological product candidate that is biosimilar to or interchangeable with an FDA-licensed biologic through an abbreviated pathway.
The first biologic product submitted under the abbreviated approval pathway that is determined to be interchangeable with the reference product has exclusivity against other biologics submitted under the abbreviated approval pathway for the lesser of (i) one year after the first commercial marketing, (ii) 18 months after approval if there is no legal challenge, (iii) 18 months after the resolution in the applicant's favor of a lawsuit challenging the biologics’patents if an application has been submitted, or (iv) 42 months after the application has been approved if a lawsuit is ongoing within the 42-month period.
The first biologic product submitted under the abbreviated approval pathway that is determined to be interchangeable with the reference product has exclusivity against other biologics submitted under the abbreviated approval pathway for the lesser of (i) one year after the first commercial marketing, (ii) 18 months after approval if there is no legal challenge, (iii) 18 months after the resolution in the applicant's favor of a lawsuit challenging the biologics’ patents if an application has been submitted, or (iv) 42 months after the application has been approved if a lawsuit is ongoing within the 42-month period.
In addition, various states have enacted false claims laws analogous to the False Claims Act. Many of these state laws apply where a claim is submitted to any third‑party payor, not merely a federal healthcare program. There are many potential bases for liability under the False Claims Act.
In addition, various states have enacted false claims laws analogous to the FCA. Many of these state laws apply where a claim is submitted to any third‑party payor, not merely a federal healthcare program. There are many potential bases for liability under the FCA.
SPRIX is a non-narcotic nasal spray that provides patients with moderate to moderately severe short-term pain a form of ketorolac that is absorbed rapidly but does not require an injection administered by a healthcare provider.
SPRIX is a non-narcotic nasal spray that provides patients with moderate to moderately severe short-term pain relief through a form of ketorolac that is absorbed rapidly but does not require an injection administered by a healthcare provider.
This statute has been interpreted broadly to apply to a wide range of arrangements between pharmaceutical manufacturers and others, including, but not limited to, any exchange of remuneration between a manufacturer and prescribers (such as physicians), purchasers, pharmacies, PBMs, formulary managers, group purchasing organizations, hospitals, clinics and other health care providers, and patients.
This statute has been interpreted broadly to apply to a wide range of arrangements between pharmaceutical manufacturers and others, including, but not limited to, any exchange of remuneration between a manufacturer and prescribers (such as physicians), purchasers, pharmacies, pharmacy benefit managers, formulary managers, group purchasing organizations, hospitals, clinics and other health care providers, and patients.
The False Claims Act has been used to assert liability based on alleged kickbacks and other improper referrals, improperly reported government pricing metrics, such as Best Price or Average Manufacturer Price, improper use of Medicare numbers when detailing the provider of services, improper promotion of off‑label uses not expressly approved by FDA in a drug’s label, and allegations as to misrepresentations with respect to the services rendered.
The FCA has been used to assert liability based on alleged kickbacks and other improper referrals, improperly reported government pricing metrics, such as Best Price or Average Manufacturer Price, improper use of Medicare numbers when detailing the provider of services, improper promotion of off‑label uses not expressly approved by FDA in a drug’s label, and allegations as to misrepresentations with respect to the services rendered.
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA delay or refusal to approve pending NDAs or, for biological products, biologics license applications (“BLAs”), or other marketing applications, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution.
Failure to comply with applicable U.S. requirements may subject a company to a variety of administrative or judicial sanctions, such as FDA delay or refusal to approve pending New Drug Applications (“NDAs”) or, for biological products, biologics license applications (“BLAs”), or other marketing applications, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, fines, civil penalties, and criminal prosecution.
Additionally, effective in 2024, the IRA will eliminate the 5% coinsurance for catastrophic coverage under Medicare Part D; in 2025, the IRA will cap the beneficiary annual out-of-pocket expenditure. These efforts to reduce aggregate beneficiary spending are expected to shift some costs to drug manufacturers.
Additionally, effective since 2024, the IRA eliminated the 5% coinsurance for catastrophic coverage under Medicare Part D; in 2025, the IRA will cap the beneficiary annual out-of-pocket expenditure. These efforts to reduce aggregate beneficiary spending are expected to shift some costs to drug manufacturers.
Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with Current Good Clinical Practice (“cGCP”), which includes the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.
Clinical trials involve the administration of the investigational new drug to human subjects under the supervision of qualified investigators in accordance with current good clinical practices, which includes the requirement that all research subjects provide their informed consent in writing for their participation in any clinical trial.
Otrexup is a folate analog metabolic inhibitor indicated for the: • Management of patients with severe, active rheumatoid arthritis (RA) and polyarticular juvenile idiopathic arthritis (pJIA), who are intolerant of or had an inadequate response to first-line therapy. • Symptomatic control of severe, recalcitrant, disabling psoriasis in adults who are not adequately responsive to other forms of therapy.
Otrexup is a folate analog metabolic inhibitor indicated for the: • Management of patients with severe, active rheumatoid arthritis (“RA”) and polyarticular juvenile idiopathic arthritis (“pJIA”), who are intolerant of or had an inadequate response to first-line therapy. • Symptomatic control of severe, recalcitrant, disabling psoriasis in adults who are not adequately responsive to other forms of therapy.
Finally, we are subject and are likely to be subject in the future to state privacy and security laws, regulations and other authorities— specifically including the California Consumer Privacy Act— which may limit our ability to use and disclose identifiable information, and may impose requirements related to safeguarding such information, as well as reporting on breaches.
Finally, we are subject and are likely to be subject in the future to additional state privacy and security laws, regulations and other authorities, specifically including the California Consumer Privacy Act, which may limit our ability to use and disclose identifiable information for various purposes, and may impose requirements related to safeguarding such information, as well as reporting on breaches.
The “ qui tam ” provisions of the False Claims Act allow a private individual to bring civil actions on behalf of the federal government alleging that the defendant has violated the False Claims Act, and to share in any monetary recovery. In recent years, the number of suits brought by private individuals has increased dramatically.
The “ qui tam ” provisions of the FCA allow a private individual to bring civil actions on behalf of the federal government alleging that the defendant has violated the FCA, and to share in any monetary recovery. In recent years, the number of suits brought by private individuals has increased dramatically.
Unlike an ANDA, this does not excuse the sponsor from demonstrating the proposed product candidate’s safety and effectiveness.
Unlike an ANDA, this approval pathway does not excuse the sponsor from demonstrating the proposed product candidate’s safety and effectiveness.
The ANDA application also will not be approved until any applicable non‑patent exclusivity listed in the Orange Book for the referenced product has expired. 505(b)(2) NDAs Section 505(b)(2) of the Federal Food, Drug & Cosmetic Act provides an alternate regulatory pathway to obtain FDA approval for product candidates that represent modifications to formulations or uses of previously approved drug products.
The ANDA application also will not be approved until any applicable non‑patent exclusivity listed in the Orange Book for the referenced product has expired. Section 505(b)(2) of the FDCA provides an alternate regulatory pathway to obtain FDA approval for product candidates that represent modifications to formulations or uses of previously approved drug products.
Upon approval of a drug, each of the listed patents covering the approved drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the “Orange Book”. Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in support of approval of an abbreviated new drug application (“ANDA”).
Upon approval of a drug, each of the listed patents covering the approved drug is then published in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the “Orange Book”. Drugs listed in the Orange Book can, in turn, be cited by potential generic competitors in support of approval of an ANDA.
Registration with the FDA subjects entities to periodic unannounced inspections by the FDA, during which the agency inspects manufacturing facilities to assess compliance with cGMPs or other applicable laws, such as adverse event recordkeeping and reporting.
Registration with the FDA subjects manufacturing facilities to periodic unannounced inspections by the FDA, during which the agency assesses compliance with cGMPs or other applicable laws, such as adverse event recordkeeping and reporting.
We believe that our relations with our employees are good. We recognize that our industry is specialized and dynamic, and a significant aspect of our success is our continued ability to execute our human capital strategy of attracting, engaging, developing, and retaining highly-skilled talent that our efficient operating model needs.
We recognize that our industry is specialized and dynamic, and a significant aspect of our success is our continued ability to execute our human capital strategy of attracting, engaging, developing, and retaining highly-skilled talent that our efficient operating model needs.
Orange Book Listing and Generic Drugs In seeking approval for a drug through an NDA, applicants are required to list with the FDA certain patents whose claims cover the applicant’s product, active ingredient, or method of use.
In seeking approval for a drug through an NDA, applicants are required to list with the FDA certain patents whose claims cover the applicant’s product, active ingredient, or method of use.
OTREXUP uses Methotrexate as the API, which is sourced by our supplier from a manufacturer based in Germany. The API used in SPRIX is ketorolac tromethamine, which we acquire from European-based manufacturers. Both CAMBIA and Zipsor use diclofenac potassium as the API, which we source from suppliers in Italy and Taiwan.
OTREXUP uses methotrexate as the API, which is sourced by our supplier from a manufacturer based in Germany. The API used in SPRIX is ketorolac tromethamine, which we acquire from European-based manufacturers. CAMBIA us es diclofenac potassium as the API, which we source from suppliers in Italy.
INDOCIN and SPRIX products compete with currently marketed oral opioids, transdermal opioids, local anesthetic patches, stimulants and implantable and external infusion pumps that can be used for infusion of opioids and local anesthetics, non-narcotic analgesics, local and topical analgesics and anti-arthritics. There are no patents covering the INDOCIN products.
INDOCIN products compete with currently marketed oral opioids, transdermal opioids, local anesthetic patches, stimulants and implantable and external infusion pumps that can be used for infusion of opioids and local anesthetics, non-narcotic analgesics, local and topical analgesics and anti-arthritics.
If approved, the FDA may still limit the approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-marketing Phase 4 clinical studies be conducted, require surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product.
Even for products that have been approved, the FDA may still limit the 12 approved indications for use of the product, require that contraindications, warnings or precautions be included in the product labeling, require that post-marketing safety Phase 4 clinical studies be conducted, require surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a Risk Evaluation and Mitigation Strategy (“REMS”), which can materially affect the potential market and profitability of the product.
An NDA approved under Section 505(b)(2) may in turn serve as an RLD for subsequent applications from other sponsors. Regulatory Exclusivities The Hatch-Waxman Act provides periods of regulatory exclusivity for products that would serve as RLDs for an ANDA or 505(b)(2) application.
An NDA approved under Section 505(b)(2) may in turn serve as an RLD for subsequent applications from other sponsors. The Hatch-Waxman Act provides periods of regulatory exclusivity for products that would serve as reference-listed drugs (“RLDs”) for products that are subject of an ANDA or 505(b)(2) application.
In addition, we are either a licensee or owner of U.S. and foreign patents and applications covering ROLVEDON, including patents and applications drawn to its composition of matter, method of manufacture, method of treatment, dosing, and formulation. If not otherwise invalidated, those patents expire between 2031 and 2042.
Our Patents and Proprietary Rights We are either a licensee or owner of U.S. and foreign patents and applications covering ROLVEDON, including patents and applications drawn to its composition of matter, method of manufacture, method of treatment, dosing, and formulation. If not otherwise invalidated, our U.S. patents for ROLVEDON, including any pending patents, expire between 2031 and 2042.
Among other things, HITECH makes HIPAA’s security and breach standards (and certain privacy standards) directly applicable to “business associates,” which are entities that perform certain services on behalf of covered entities involving the exchange of protected health information.
The Health Information Technology for Economic and Clinical Health Act (“HITECH”) expanded the applicability of HIPAA’s privacy, security, and breach notification standards. Among other things, HITECH makes HIPAA’s security and breach standards (and certain privacy standards) directly applicable to “business associates,” which are entities that perform certain services on behalf of covered entities involving the exchange of protected health information.
Manufacturing Requirements We, our suppliers, contract manufacturers, and other entities involved in the manufacturing and distribution of approved drugs and biological products are required to comply with certain post-approval requirements and are subject to periodic unannounced inspections by the FDA and state agencies to assess compliance with cGMP requirements.
Manufacturing Requirements We, our suppliers, contract manufacturers, and other entities involved in the manufacturing and distribution of approved drugs and biological products are required to comply with certain post-approval requirements and are subject to periodic unannounced inspections by the United States Food and Drug Administration (the “FDA”) and state agencies to assess compliance with current Good Manufacturing Practice (“cGMP”) requirements.
In addition, we also face competition for INDOCIN Suppositories from hospitals and other institutions, including a 503B outsourcing facility (commonly referred to as a 503B compounder), which began compounding 100 mg indomethacin suppositories in 2022 in what we believe to be violation of state and federal requirements for new drugs and labeling requirements related to adequate directions for use.
In addition, we also face competition for compounded INDOCIN suppositories from hospitals and other institutions, including a 503B outsourcing facility (commonly referred to as a 503B compounder), which began compounding 100 mg indomethacin suppositories in 2022 in what we believe to be violation of state and federal requirements for new drugs and labeling requirements related to adequate directions for use. 11 Sympazan competes with other generic and branded products in the treatment of LGS, including clobazam tablets and oral solution options.
Hatch-Waxman Act The Drug Price Competition and Patent Term Restoration Act of 1984 (the“Hatch-Waxman Act”) establishes two abbreviated approval pathways for pharmaceutical products that are in some way follow-on or bioequivalent versions of drugs approved through the NDA process.
Hatch-Waxman Act The Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”) establishes two abbreviated approval pathways for pharmaceutical products that are in some way follow-on or bioequivalent versions of drugs approved through the NDA process, including (i) the filing of an ANDA, and (ii) obtaining FDA approval under Section 505(b)(2).
Our policy is to seek to protect our proprietary rights, by among other methods, filing patent applications in the U.S. and foreign jurisdictions to cover certain aspects of our technology.
Our success depends in part on our ability to obtain and maintain patent protection for our products and technologies. Our policy is to seek to protect our proprietary rights, by among other methods, filing patent applications in the U.S. and foreign jurisdictions to cover certain aspects of our technology.
Our primary marketed products are: ROLVEDON TM (eflapegrastim-xnst) injection for subcutaneous use A long-acting granulocyte colony-stimulating factor (G-CSF) with a novel formulation that is indicated to decrease the incidence of infection, as manifested by febrile neutropenia, in adult patients with nonmyeloid malignancies receiving myelosuppressive anti-cancer drugs associated with clinically significant incidence of febrile neutropenia.
Additionally, our executive leadership team has extensive commercial execution and business development experience that supports our commercial capabilities and our sales force. 6 Our primary marketed products are: ROLVEDON TM (eflapegrastim-xnst) injection for subcutaneous use A long-acting granulocyte colony-stimulating factor (“G-CSF”) with a novel formulation that is indicated to decrease the incidence of infection, as manifested by febrile neutropenia, in adult patients with nonmyeloid malignancies receiving myelosuppressive anti-cancer drugs associated with clinically significant incidence of febrile neutropenia.
We continue to prosecute and pursue patent protection to obtain additional patent coverage on ROLVEDON and its uses. Additionally, we have a biologic exclusivity in the U.S. covering ROLVEDON that will expire in 2034. Our success depends in part on our ability to obtain and maintain patent protection for our products and technologies.
We continue to prosecute and pursue patent protection to obtain additional patent coverage on ROLVEDON and its uses. Additionally, we have a biologic exclusivity, referred to as reference product exclusivity, in the U.S. covering ROLVEDON that will expire in 2034.
Our activities relating to the reporting of discount and rebate information and other information affecting federal, state, and third-party reimbursement of our products, and the sale and marketing of our products and our service arrangements or data purchases, among other activities, may be subject to scrutiny under these laws. 19 We are unable to predict whether we would be subject to actions under the False Claims Act or a similar state law, or the impact of such actions.
Our activities relating to the reporting of discount and rebate information and other information affecting federal, state, and third-party reimbursement of our products, and the sale and marketing of our products and our service arrangements or data purchases, among other activities, may be subject to scrutiny under these laws.
The DEA is the federal agency responsible for domestic enforcement of the Controlled Substances Act of 1970 (“CSA”). The DEA regulates controlled substances as Schedule I, II, III, IV and V substances.
Controlled Substances Sympazan, a clobazam lingual film product, is regulated as a Schedule IV controlled substance by the Drug Enforcement Administration (“DEA”). The DEA is the federal agency responsible for domestic enforcement of the Controlled Substances Act of 1970 (“CSA”). The DEA regulates controlled substances as Schedule I, II, III, IV and V substances.
ROLVEDON is a novel long-acting G-CSF that employs a proprietary technology that is designed to prolong the duration of biologics, reducing the frequency of administration. There are currently one other novel long-acting G-CSF and six biosimilar G-CSFs marketed in the U.S. including, Neulasta® (pegfilgrastim), UDENYCA™ (pegfilgrastim-cbqv), FULPHILA® (pegfilgrastim-jmdb), ZIEXTENZO® (pegfilgrastim-jmdb), NYVEPRIA® (pegfilgrastim-apgf), STIMUFEND® (pegfilgrastim-fpgk), and FYLNETRA® (pegfilgrastim-pbbk).
ROLVEDON is a novel long-acting G-CSF that employs a proprietary technology that is designed to prolong the duration of biologics, reducing the frequency of administration. Currently, one other novel long-acting G-CSF and six biosimilar G-CSFs marketed in the U.S. compete with ROLVEDON.
These laws are broad in scope and there may not be regulations, guidance or court decisions that definitively interpret these laws and apply them to particular industry practices. In addition, these laws and their interpretations are subject to change. 17 Controlled Substances Sympazan, a Clobazam lingual film product, is regulated as a Schedule IV controlled substance by the DEA.
These laws are broad in scope and there may not be regulations, guidance or court decisions that definitively interpret these laws and apply them to particular industry practices. In addition, these laws and their interpretations are subject to change.
There is fierce competition for highly-skilled talent, and we believe we offer a desirable set of benefits, a flexible working environment, and career-enhancing development experiences and initiatives that are aligned with our mission, vision, and values.
We believe that our vision and values, in combination with our offering a desirable set of benefits, flexible working environment, and career-enhancing development experiences and initiatives help us to compete for highly-skilled talent.
The following table reflects the percentage of consolidated revenue by customer and the percentage of accounts receivable by customer related to product shipments for the years ended December 31, 2023 and 2022.
Three large, national wholesale distributors represent the majority of our revenues from net product sales. The following table reflects the percentage of consolidated revenue by customer and the percentage of accounts receivable by customer related to product shipments for the years ended December 31, 2024 and 2023.
Additionally, new government requirements may be established that could delay or prevent regulatory approval of our products under development. Third‑Party Payor Coverage and Reimbursement The commercial success of our products is partially dependent on the availability of coverage and adequate reimbursement from public (i.e., federal and state government) and private (i.e . , commercial) payors.
Third‑Party Payor Coverage and Reimbursement The commercial success of our products is dependent on the availability of coverage and adequate reimbursement from public (i.e., federal and state government) and private (i.e . , commercial) payors.
We seek to protect such information, in part, through entering into confidentiality agreements with employees, consultants, collaborative partners and others before such persons or entities have access to our proprietary trade secrets and know how. These confidentiality agreements may not be effective in certain cases. In addition, our trade secrets may otherwise become known or be independently developed by competitors.
We also rely on trade secrets and proprietary know how, which are difficult to protect. We seek to protect such information, in part, through entering into confidentiality agreements with employees, consultants, collaborative partners and others before such persons or entities have access to our proprietary trade secrets and know how.
Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity, and novelty of the product or disease. Preclinical tests include laboratory evaluation of product chemistry, formulation, and toxicity, as well as animal studies to assess the characteristics, and potential safety and efficacy of the product.
Satisfaction of FDA pre-market approval requirements typically takes many years and the actual time required may vary substantially based upon the type, complexity, and novelty of the product or disease.
Both INDOCIN oral suspension and suppositories use indomethacin as the API. We currently procure these APIs on a purchase order basis, some of which are pursuant to an agreement with one of our suppliers. Sympazan uses Clobazam as the API, which is procured on a purchase order basis by our supplier from a manufacturer based in Italy.
We currently procure the API used in the INDOCIN oral suspension formulation from one of our suppliers in Italy, while the API used in the INDOCIN suppository formulation is procured from Cosette Pharmaceuticals, Inc. Sympazan uses clobazam as the API, which is procured on a purchase order basis by our supplier from a manufacturer based in Italy.
Impact of Public Pressure on Drug Pricing, Healthcare Reform and Legislation Impacting Payor Coverage The pricing and reimbursement of our pharmaceutical products is partially dependent on government regulation.
The pricing and reimbursement of our pharmaceutical products is partially dependent on government regulation.
Each wholesale distributor purchases a different amount of each product, therefore the change in product mix impacts the percentage of consolidated revenue by customer and the percentage of accounts receivable by customer related to product shipments. Manufacturing Our facilities are used for office purposes only and no commercial manufacturing takes place at our facilities.
Each wholesale distributor purchases a different amount of each product, therefore the change in product mix impacts the percentage of consolidated revenue and the percentage of accounts receivable related to product shipments by customer. We sell our products to our customers noted in the table above, who are primarily wholesalers.
The clinical testing requirements and the time required to obtain foreign regulatory approvals may differ from that required for FDA approval and the time required for approval may delay or prevent marketing in certain countries. 13 Post-Approval Requirements Ongoing adverse event reporting and submission of periodic reports is required following FDA approval of an NDA or BLA.
Foreign regulatory approval of a product must also be obtained prior to marketing a product in an international market. The clinical testing requirements and the time required to obtain foreign regulatory approvals may differ from that required for FDA approval and the time required for approval may delay or prevent marketing in certain countries.
The ANDA applicant may also elect to submit a section viii statement certifying that its proposed ANDA labeling does not contain (or carves out) any language regarding a patented method‑of‑use.
The ANDA applicant may also submit a statement certifying that its proposed ANDA labeling does not contain (or carves out) any language regarding a patented method‑of‑use. If the ANDA applicant does not challenge the applicability of the listed patents, the ANDA application will not be approved until all the listed patents claiming the referenced NDA product have expired.
(2) Expiration date excludes any potential patent term adjustment. (3) Certain parties who have entered into settlement agreements with us are able to and have begun marketing generic versions of CAMBIA starting January 2023. (4) Certain parties who have entered into settlement agreements with us are able to and have begun marketing generic versions of Zipsor starting in March 2022.
Certain parties who have entered into settlement agreements with us are able to market and have begun marketing generic versions of CAMBIA starting January 2023. We also have U.S. patents directed to the processes of manufacture related to SPRIX through 2029, which excludes any potential patent term adjustments.
While we are not a covered entity under HIPAA, many of our customers are, and this limits the information they can share with us. The Health Information Technology for Economic and Clinical Health Act (“HITECH”) expanded the applicability of HIPAA’s privacy, security, and breach notification standards.
For example, HIPAA and its implementing regulations established standards for “covered entities,” which are certain healthcare providers, health plans and healthcare clearinghouses, regarding the security and privacy of protected health information. While we are not a covered entity under HIPAA, many of our customers are, and this limits the information they can share with us.
We are responsible for the supply and distribution of our marketed products. Our approved products are manufactured at contract manufacturing facilities in the U.S., Canada, Italy, and South Korea. We have manufacturing, packaging, and supply agreements with sole commercial suppliers for each of our marketed products, as follows: • ROLVEDON - Hanmi Pharmaceutical Co.
As such, we are dependent on our contract manufacturing partners for timely supply of our products, and our success depends on our ability to maintain good working relationships with our manufacturers. We are responsible for the supply and distribution of our marketed products. Our approved products are manufactured at contract manufacturing facilities in the U.S., Canada, Italy, and South Korea.
We may receive additional one-time contingent milestone payments upon the achievement of scaling twelve-month cumulative sales targets and certain development milestones in the future. Business Strategy Our success depends on our people, our commercial capabilities and the financial position we have created, and the opportunities that exist in the marketplace.
We receive royalties on net sales on a quarterly basis as well as certain one-time 10 contingent milestone payments upon the occurrence of certain events. We may receive additional one-time contingent milestone payments upon the achievement of scaling twelve-month cumulative sales targets and certain development milestones in the future.
Additionally, an independent IRB at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences.
Additionally, an independent institutional review board at each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences. Marketing Approval and Post-Approval Requirements FDA approval of an NDA or BLA is required before a product may be marketed in the U.S.
Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions, from time to time some of our business activities are subject to challenge under one or more of such laws.
The false statements statute prohibits knowingly and willfully falsifying, concealing, or covering up a material fact or making any materially false, fictitious, or fraudulent statement about the delivery of or payment for healthcare benefits, items or services. 17 Because of the breadth of these laws and the narrowness of available statutory and regulatory exemptions, from time to time some of our business activities are subject to challenge under one or more of such laws.
We also believe we offer competitive compensation for our employees and strongly embrace a pay for performance culture underpinned by our commitment to ethics and compliance.
We also believe we offer competitive compensation for our employees and strongly embrace a pay for performance culture underpinned by our commitment to ethics and compliance. 18 Our Employee Handbook and Code of Business Conduct and Ethics outline our commitment to inclusion, where all employees are welcomed in an environment designed to make them feel comfortable, respected, and accepted.
Beginning in 2023, the IRA enables Medicare to negotiate prescription drug prices with manufacturers of certain high-cost drugs for the first time. A separate provision requires drug manufacturers to pay rebates to Medicare if their drug prices increase at a higher rate than the rate of inflation (the so-called inflation rebate provision).
To date, none of our products have been selected to be subject to price negotiations. A separate provision requires drug manufacturers to pay rebates to Medicare if their drug prices increase at a higher rate than the rate of inflation (the so-called inflation rebate provision).
In addition, our marketing activities may be limited by data privacy and security regulation by both the federal government and the states in which we conduct our business. For example, HIPAA and its implementing regulations established standards for “covered entities,” which are certain healthcare providers, health plans and healthcare clearinghouses, regarding the security and privacy of protected health information.
Healthcare Data Privacy and Security Requirements Our marketing and other data processing activities may be limited by data privacy and security regulation by both the federal government and the states in which we conduct our business.
Both products are nonsteroidal anti-inflammatory drug (NSAID), indicated for: • Moderate to severe rheumatoid arthritis including acute flares of chronic disease • Moderate to severe ankylosing spondylitis INDOCIN ® (indomethacin) Oral Suspension • Moderate to severe osteoarthritis • Acute painful shoulder (bursitis and/or tendinitis) • Acute gouty arthritis Sympazan® (clobazam) oral film A benzodiazepine indicated for the adjunctive treatment of seizures associated with Lennox-Gastaut Syndrome (LGS) in patients aged two years of age or older.
Both products are nonsteroidal anti-inflammatory drugs (“NSAIDs”), indicated for: • Moderate to severe rheumatoid arthritis including acute flares of chronic disease • Moderate to severe ankylosing spondylitis INDOCIN ® (indomethacin) Oral Suspension • Moderate to severe osteoarthritis • Acute painful shoulder (bursitis and/or tendinitis) • Acute gouty arthritis Otrexup ® (methotrexate) injection for subcutaneous use A once weekly single-dose auto-injector containing methotrexate.
Sympazan is the only product to offer clobazam in a convenient film with PharmFilm® technology. Sympazan is taken without water or liquid, adheres to the tongue, and dissolves to deliver clobazam. Otrexup ® (methotrexate) injection for subcutaneous use A once weekly single-dose auto-injector containing a prescription medicine, methotrexate.
Sympazan® (clobazam) oral film A benzodiazepine indicated for the adjunctive treatment of seizures associated with LGS in patients aged two years of age or older. Sympazan is the only product to offer clobazam in a convenient film with PharmFilm technology. Sympazan is taken without water or liquid, adheres to the tongue, and dissolves to deliver clobazam.
We are seeking products that are a fit with our commercial platforms. Promotion of Products Our commercial organization is comprised of multiple capabilities, including marketing through both a sales force and a non-personal promotion model, market access program through payor contracting, and trade and distribution. Our sales force directly markets ROLVEDON.
Our commercial organization is comprised of multiple capabilities including marketing through both a sales force and an omni-channel promotion model, market access program through payor contracting, and trade and distribution. • Our financial position — We believe our financial position supports our ability to fuel long-term growth initiatives, invest in research and pursue strategic acquisitions that complement our strengths.
However, the cost of defending such claims, as well as any sanctions imposed, could adversely affect our financial performance. Also, the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) created several federal crimes, including healthcare fraud and false statements relating to healthcare matters.
The federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) created several federal crimes, including healthcare fraud and false statements relating to healthcare matters. The healthcare fraud statute prohibits knowingly and willfully executing a scheme to defraud any healthcare benefit program, including private third‑party payors.
Certain parties who have entered into settlement agreements with us began to market generic versions of CAMBIA in January 2023. Zipsor competes against other drugs that are widely used to treat mild to moderate pain in the acute setting, including both branded and generic versions of diclofenac.
Certain parties who have entered into settlement agreements with us began to market generic versions of CAMBIA in January 2023. Government Regulation FDA Approval Process In the U.S., pharmaceutical and biological products are subject to extensive regulation by the FDA.
Insufficient availability of our products or the active pharmaceutical ingredients and other raw materials necessary to manufacture our products, or the inability of our suppliers to manufacture and supply our products, will adversely impact our sales upon depletion of the active ingredient and product inventories.” Intellectual Property We regard the protection of patents, designs, trademarks, and other proprietary rights that we own as critical to our success and competitive position.
Additionally, new government requirements regarding manufacturing may be established that could delay or prevent regulatory approval of our products under development. Intellectual Property We regard the protection of patents, designs, trademarks, and other proprietary rights that we own as critical to our success and competitive position.
Refer to Note 11 , Debt, of the accompanying Consolidated Financial Statements for additional information on the 2027 Convertible Notes. Collaboration and License Agreements Miravo Pharmaceuticals: The Company has a license agreement with Tribute Pharmaceuticals Canada Ltd. (known as Miravo Pharmaceuticals, or “Miravo”) granting them the rights to commercially market CAMBIA in Canada.
Collaboration and License Agreements Searchlight: We have a license agreement with Tribute Pharmaceuticals Canada Ltd. (later known as Aralez Pharmaceuticals, Miravo Healthcare, and now Searchlight Pharma, or “Searchlight,” now owned by Apotex Inc.) granting them the rights to commercially market CAMBIA in Canada. Searchlight independently contracts with manufacturers to produce a specific CAMBIA formulation in Canada.
For additional information and risks regarding the above-described government regulations, please also refer to “Item 1A. Risk Factors.” Employees As of March 6, 2024 we had 53 full‑time employees, all employed in the U.S. None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage.
While some of the data we process may be exempt from certain of these laws, other data may be covered, requiring compliance. Human Capital As of March 7, 2025 we h ad 58 fu ll‑time employees, all employed in the U.S. None of our employees are represented by a collective bargaining agreement, nor have we experienced any work stoppage.
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ITEM 1. BUSINESS Our Company We are a commercial pharmaceutical company offering differentiated products to patients. We have built our commercial portfolio through acquisition or licensing of approved products. Our comprehensive commercial capabilities include marketing through both a sales force and a non-personal promotion model, market access through payor contracting, and trade and distribution.
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ITEM 1. BUSINESS Overview We are a pharmaceutical company with comprehensive commercial capabilities offering differentiated products designed to address patients’ needs. Our focus is on supporting patients by marketing products in oncology, neurology, and pain management.
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CAMBIA is not a pill; it is a powder, and combining CAMBIA with water activates the medicine in a unique way. Zipsor ® (diclofenac potassium) Liquid filled capsules A prescription NSAID used for relief of mild-to-moderate pain in adults (18 years of age and older).
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We have built our product portfolio through the acquisition or licensing of approved products, including our lead product, ROLVEDON, which we acquired on July 31, 2023, through a merger with Spectrum Pharmaceuticals, Inc. (“Spectrum”, and the merger with Spectrum the “Spectrum Merger”).
Removed
Zipsor uses proprietary ProSorb® delivery technology to deliver a finely dispersed, rapid and consistently absorbed formulation of diclofenac. On July 31, 2023 (the “Effective Date”) , pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated as of April 24, 2023, we completed the acquisition of Spectrum Pharmaceutical, Inc.
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ROLVEDON is the first, long-acting myeloid growth factor that has a unique molecular structure that combines a granulocyte colony-stimulating factor (“G-CSF") analog with a Fc fragment of human immunoglobulin G4 (IgG4). ROLVEDON is indicated to decrease the incidence of infection, as manifested by febrile neutropenia, in adult patients receiving anti-cancer drugs.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur ability to successfully integrate any business, product or technology we acquire depends on a number of factors, including, but not limited to, our ability to: • combine our and the acquired business’ operations and corporate functions, if any; • meet the capital requirements of the acquired business in a manner that permits us to achieve any cost savings or other synergies anticipated to result from the acquisition; • minimize the disruption and distraction of our management and other employees in connection with the integration of any acquired business, product or technology; 26 • maintain and increase sales of our existing products; • establish or manage the transition of the manufacture and supply of any acquired product, including the necessary active pharmaceutical ingredients, excipients and components; • integrate personnel from the acquired business; • integrate the technologies and technologies licensed from third parties; • integrate and unify the offerings and services available to customers; • identify and eliminate redundant and underperforming functions and assets; • harmonize our and the acquired business’ operating practices, compensation programs, internal controls and other policies, procedures and processes; • maintain existing agreements with customers, suppliers, distributors and vendors, avoid delays in entering into new agreements with prospective customers, suppliers, distributors and vendors, and leverage relationships with such third parties; • address possible differences in business backgrounds, corporate cultures and management philosophies, if any; • identify and add the necessary sales, marketing, manufacturing, regulatory and other related personnel, capabilities and infrastructure that are required to successfully integrate any acquired business, product or technology; • manage the transition and migration of all commercial, financial, legal, clinical, regulatory and other pertinent information relating to any acquired business, product or technology; • comply with legal, regulatory and contractual requirements applicable to any acquired business, product or technology; • obtain and maintain adequate coverage, reimbursement and pricing from managed care, government and other third-party payors with respect to any acquired product; and • maintain and extend intellectual property protection for any acquired product or technology.
Biggest changeOur ability to successfully integrate any business, product or technology we acquire depends on a number of factors, including, but not limited to, our ability to: • maintain existing agreements with customers, suppliers, distributors and vendors, avoid delays in entering into new agreements with prospective customers, suppliers, distributors and vendors, and leverage relationships with such third parties; • obtain and maintain adequate coverage, reimbursement and pricing from managed care, government and other third-party payors with respect to any acquired product; • maintain and increase sales of our existing products; • establish or manage the transition of the manufacture and supply of any acquired product, including the necessary active pharmaceutical ingredients, excipients and components; • integrate and unify the offerings and services available to customers; • integrate the owned and licensed technologies from third parties; • integrate personnel from the acquired business; • combine our and the acquired business’ operations and corporate functions, if any; • address possible differences in business backgrounds, corporate cultures and management philosophies, if any; • meet the capital requirements of the acquired business in a manner that permits us to achieve any cost savings or other synergies anticipated to result from the acquisition; • identify and add the necessary sales, marketing, manufacturing, regulatory and other related personnel, capabilities and infrastructure that are required to successfully integrate any acquired business, product or technology; • minimize the disruption and distraction of our management and other employees in connection with the integration of any acquired business, product or technology; • harmonize our and the acquired business’ operating practices, compensation programs, internal controls and other policies, processes and procedures; • manage the transition and migration of all commercial, financial, legal, clinical, regulatory and other pertinent information relating to any acquired business, product or technology; • identify and eliminate redundant and underperforming functions and assets; • comply with legal, regulatory and contractual requirements applicable to any acquired business, product or technology; and • maintain and extend intellectual property protection for any acquired product or technology. 32 If we are unable to perform the above functions or otherwise effectively integrate any acquired businesses, products or technologies, our business, financial condition and operating results will suffer.
Other factors relating to collaborations that may adversely affect the commercial success of our products include: • any parallel development by a commercialization or collaborative partner of competitive technologies or products; • arrangements with commercialization or collaborative partners that limit or preclude us from developing products or technologies; • premature termination of a commercialization or collaboration agreement or the inability to renegotiate existing agreements on favorable terms; or • failure by a commercialization or collaborative partner to devote sufficient resources to the development and commercial sales of products using our current and potential future products and technologies.
Other factors relating to collaborations that may adversely affect the commercial success of our products include: • any parallel development by a commercialization or collaborative partner of competitive technologies or products; • arrangements with commercialization or collaborative partners that limit or preclude us from developing products or technologies; • failure by a commercialization or collaborative partner to devote sufficient resources to the development and commercial sales of products using our current and potential future products and technologies; or • premature termination of a commercialization or collaboration agreement or the inability to renegotiate existing agreements on favorable terms.
Patents issued to third parties could in the future be asserted against us, although we believe that we do not infringe any valid claim of any patents.
Patents issued to third parties in the future could be asserted against us, although we believe that we do not infringe any valid claim of any patents.
Our ability to produce accurate financial statements and comply with applicable laws, rules and regulations is largely dependent on our maintenance of internal control and reporting systems, as well as on our ability to attract and retain qualified management and accounting personnel to further develop our internal accounting function and control policies.
Our ability to produce accurate financial statements and comply with applicable laws, rules and regulations is largely dependent on our maintenance of internal control and reporting systems, as well as on our ability to attract and retain qualified management and accounting personnel to further develop our accounting function and internal control policies.
We are or may be involved in various legal proceedings, lawsuits and certain government inquiries and investigations, including with respect to, but not limited to, patent infringement, product liability, personal injury, antitrust matters, securities 33 class action lawsuits, breach of contract, Medicare and Medicaid reimbursement claims, opioid-related matters, promotional practices and compliance with laws relating to the manufacture and sale of controlled substances.
We are, or may be, involved in various legal proceedings, lawsuits and certain government inquiries and investigations, including with respect to, but not limited to, securities class action lawsuits, Medicare and Medicaid reimbursement claims, patent infringement, product liability, personal injury, antitrust matters, breach of contract, opioid-related matters, promotional practices and compliance with laws relating to the manufacture and sale of controlled substances.
In addition, if our executive management team is not able, in a timely manner, to develop, implement and execute successful business strategies and plans to maintain and increase our product revenues, our business, financial condition and results of operations will be materially and adversely affected, and the existing business may be required to take further steps to reduce its costs at some point in time.
In addition, if our executive management team is not able, in a timely manner, to develop, implement and execute successful business development strategies and plans to maintain and increase our product revenues, our business, financial condition and results of operations will be materially and adversely affected, and the existing business may be required to take further steps to reduce its costs at some point in time.
Any failure by our commercialization or collaborative partners to abide by the terms of their respective agreements with us (including their failure to accurately calculate, report or pay any royalties payable to either us or a third party or their failure to repay, in full or in part, either any outstanding receivables or any other amounts for which we are entitled to reimbursement) may adversely affect our results of operations.
Any failure by our commercialization, collaborative, or licensing partners to abide by the terms of their respective agreements with us (including their failure to accurately calculate, report or pay any royalties payable to either us or a third party or their failure to repay, in full or in part, either any outstanding receivables or any other amounts for which we are entitled to reimbursement) may adversely affect our results of operations.
In addition, we also face competition for INDOCIN Suppositories from hospitals and other institutions, including a 503B outsourcing facility (commonly referred to as a 503B compounder), which began compounding 100 mg indomethacin suppositories in 2022 in what we believe to be violation of state and federal requirements for new drugs and labeling requirements related to adequate directions for use.
In addition, we also face competition for INDOCIN products from hospitals and other institutions, including a 503B outsourcing facility (commonly referred to as a 503B compounder), which began compounding 100 mg indomethacin suppositories in 2022 in what we believe to be violation of state and federal requirements for new drugs and labeling requirements related to adequate directions for use.
To the extent that our existing capital resources and revenues from ongoing operations are insufficient to fund our future operations, product acquisitions and strategic transactions that we may pursue, or our litigation-related costs, we will have to raise additional funds through the sale of our equity securities, through additional debt financing, from development and licensing arrangements or from the sale of assets.
To the extent that our existing capital resources and revenues from ongoing operations are insufficient to fund our future operations, including our litigation-related costs, product acquisitions and strategic transactions that we may pursue, we will have to raise additional funds through the sale of our equity securities, through additional debt financing, from development and licensing arrangements and/or from the sale of assets.
If we are unable to find attractive opportunities, finance them and successfully execute and integrate such acquisitions, our business growth and prospects will be adversely impacted. 25 An important element of our business strategy is to actively seek to acquire products, technologies or companies and to in-license or seek co-promotion rights to additional products.
If we are unable to find attractive opportunities, finance them and successfully execute and integrate such acquisitions, our business growth and prospects will be adversely impacted. An important element of our business strategy is to actively seek to acquire products, technologies or companies and to in-license or seek co-promotion rights to additional products.
Our ability to develop our technologies and to make commercial sales of products using our technologies also depends on not infringing other patents or intellectual property rights. We are not aware of any such intellectual property claims directly against us. The pharmaceutical industry has experienced extensive litigation regarding patents and other intellectual property rights.
Our ability to develop our technologies and to make commercial sales of products using our technologies also depends on not infringing other patents or intellectual property rights. We are not aware of any such intellectual property claims directly against us. However, the pharmaceutical industry has experienced extensive litigation regarding patents and other intellectual property rights.
Significant assumptions utilized in our projections include, but are not limited to, our evaluation of the market opportunity for our products, the current and future competitive landscape and resulting impacts to product pricing, future regulatory actions, planned strategic initiatives and the realization of benefits associated with our existing patents.
Significant assumptions utilized in our projections include, but are not limited to, our evaluation of the market 34 opportunity for our products, the current and future competitive landscape and resulting impacts to product pricing, future regulatory actions, planned strategic initiatives and the realization of benefits associated with our existing patents.
We also rely on trade secrets and proprietary know-how, which are difficult to protect. We seek to protect such information, in part, by entering into confidentiality agreements with employees, consultants, collaborative partners and others before such persons or entities have access to our proprietary trade secrets and know-how.
We also rely on trade secrets and proprietary know-how, which are difficult to protect. We seek to protect such information, in part, by entering into confidentiality 30 agreements with employees, consultants, collaborative partners and others before such persons or entities have access to our proprietary trade secrets and know-how.
Strategic transactions that fail to achieve the anticipated levels of revenue, synergies and profit growth will cause our business to suffer. We seek to engage in strategic transactions with third parties, such as product or company acquisitions, strategic partnerships, joint ventures, divestitures or business combinations.
Strategic transactions that fail to achieve the anticipated levels of revenue, synergies and profit growth will cause our business to suffer. We seek to engage in strategic transactions with third parties, such as product acquisitions, strategic partnerships, joint ventures, business combinations or divestitures.
In addition, the State of California Department of Insurance (“CDI”) has issued a subpoena to Assertio Therapeutics seeking information relating to its historical sales and marketing of Lazanda. The CDI subpoena also sought information on Gralise, a non-opioid product which Assertio Therapeutics divested to Alvogen in 2020.
In addition, the California Department of Insurance (“CDI”) has issued a subpoena to Assertio Therapeutics seeking information relating to its historical sales and marketing of Lazanda. The CDI subpoena also sought information on Gralise, a non-opioid product which Assertio Therapeutics divested to Alvogen in 2020.
Additionally, the commercialization or collaborative partners under these arrangements might breach the terms of their respective agreements or fail to maintain, protect or prevent infringement of the licensed patents or our other intellectual property rights by third parties.
Additionally, the commercialization, collaborative or licensing partners under these arrangements might breach the terms of their respective agreements or fail to maintain, protect or prevent infringement of the licensed patents or our other intellectual property rights by third parties.
We and certain of the third parties for which we depend on to operate our business may, and certain of such third parties have, experienced cybersecurity incidents, including third-party unauthorized access to and misappropriation of personal information, and may experience similar incidents in the future.
We and certain of the third parties for which we depend on to operate our business may, and certain of such third parties have, experienced cybersecurity incidents, including third-party unauthorized access to and misappropriation of personal information, and may experience similar 41 incidents in the future.
Agreements with clinical investigators and clinical sites for clinical testing and for trial management services place substantial responsibilities on these parties, which could result in delays in, or termination of, clinical trials if these parties fail to perform as expected.
Agreements with clinical investigators and clinical sites for clinical testing and for trial management services place substantial responsibilities on these parties, which could result in delays in, or termination of, clinical trials if these parties fail 37 to perform as expected.
We are not always able to enter into commercialization or collaborative arrangements on acceptable terms, which can harm our ability to develop and commercialize our current and potential future products and technologies.
We are not always able to enter into commercialization, collaborative or licensing arrangements on acceptable terms, which can harm our ability to develop and commercialize our current and potential future products and technologies.
Department of Health and Human Services (“OIG”), the FDA, and the DOJ all actively enforce laws and regulations prohibiting promotion of off-label use and the promotion of products for which marketing clearance has not been obtained.
Department of Health and Human Services, the FDA, and the DOJ all actively enforce laws and regulations prohibiting promotion of off-label use and the promotion of products for which marketing clearance has not been obtained.
For additional information regarding potential liability, see also “ – Governmental investigations and inquiries, regulatory actions and lawsuits brought against us by government agencies and private parties with respect to Assertio Therapeutics’ historical commercialization of opioids can adversely affect our business, financial condition and results of operations. ” Healthcare reform can increase our expenses and adversely affect the commercial success of our products.
For additional information regarding potential liability, see also “ – Governmental investigations and inquiries, regulatory actions and lawsuits brought against us by government agencies and private parties with respect to Assertio Therapeutics’ historical commercialization of opioids can adversely affect our business, financial condition and results of operations. ” Healthcare reform can reduce our revenues, increase our expenses and adversely affect the commercial success of our products.
Any significant drops in our stock price, including those we experienced in 2023, could give rise to shareholder lawsuits, which are costly and time-consuming to defend against and which may adversely affect our ability to raise capital while the suits are pending, even if the suits are ultimately resolved in our favor.
Any significant drops in our stock price, including those we experienced in 2023 and 2024, have and could give rise to shareholder lawsuits, which are costly and time-consuming to defend against and which may adversely affect our ability to raise capital while the suits are pending, even if the suits are ultimately resolved in our favor.
Our commercialization or collaborative partners, or customers or other third parties, may also terminate their relationships with us or otherwise decide not to proceed with the development, commercialization or purchase of our products. 29 We and our commercial partners may be unable to compete successfully in the pharmaceutical and biological product industry.
Our commercialization, collaborative, or licensing partners, or customers or other third parties, may also terminate their relationships with us or otherwise decide not to proceed with the development, commercialization or purchase of our products. We and our commercial partners may be unable to compete successfully in the pharmaceutical and biological product industry.
There are a number of continued listing requirements that we must satisfy in order to maintain our listing on The Nasdaq Capital Market, including the requirement to maintain a minimum bid price of at least $1.00 (the “Bid Price Rule”).
There are a number of continued listing requirements that we must satisfy in order to maintain our listing on Nasdaq, including the requirement to maintain a minimum bid price of at least $1.00 (the “Bid Price Rule”).
In addition to the risks discussed elsewhere in this section, our ability to successfully commercialize and generate revenues from our products depends on a number of factors, including, but not limited to, our ability to: • develop and execute our sales, marketing and promotion strategies for our products using our capability to market products through both a sales force and a non-personal promotion model; • achieve, maintain and grow market acceptance of, and demand for, our products; 23 • obtain and maintain adequate coverage, reimbursement and pricing from managed care, government and other third-party payors; • adapt our commercial strategies while minimizing disruption of relationships with prescribers and other decision-makers; • maintain, manage or scale the necessary sales, marketing, manufacturing, managed markets and other capabilities and infrastructure that are required to successfully integrate and commercialize our products; • obtain adequate supply of our products; • maintain and extend intellectual property protection for our products; and • comply with applicable legal and regulatory requirements.
In addition to the risks discussed elsewhere in this section, our ability to successfully commercialize and generate revenues from our products depends on a number of factors, including, but not limited to, our ability to: • develop and execute our sales, marketing and promotion strategies for our products using our capability to market products through both a sales force and an omni-channel promotion model; • achieve, maintain and grow market acceptance of, and demand for, our products; • obtain and maintain adequate coverage, reimbursement and pricing from managed care, government and other third-party payors; • adapt our commercial strategies while minimizing disruption of relationships with prescribers and other decision-makers; • maintain, manage or scale the necessary sales, marketing, manufacturing, managed markets and other capabilities and infrastructure that are required to successfully integrate and commercialize our products; • obtain adequate supply of our products; • maintain and extend intellectual property protection for our products; and • comply with applicable legal and regulatory requirements.
On February 22, 2024, our partner Miravo, which commercializes a specific formulation of Cambia in Canada, commenced a patent infringement action in Canadian federal court against a generic company seeking approval of a generic version of Cambia in Canada.
On February 22, 2024, our partner Searchlight, which commercializes a specific formulation of CAMBIA in Canada, commenced a patent infringement action in Canadian federal court against a generic company seeking approval of a generic version of CAMBIA in Canada.
If we were delisted from The Nasdaq Capital Market, it would constitute a “fundamental change” under the 2027 42 Convertible Notes, which would require us to offer to repurchase the 2027 Convertible Notes and would allow the holders of the 2027 Convertible Notes to convert their 2027 Convertible Notes into our common stock at an increased conversion rate, which would make conversion of the 2027 Convertible Notes more dilutive.
If we were delisted from Nasdaq, it would constitute a “fundamental change” under the 2027 Convertible Notes, which would require us to offer to repurchase the 2027 Convertible Notes and would allow the holders of the 2027 Convertible Notes to convert their 2027 Convertible Notes into our common stock at an increased conversion rate, which would make conversion of the 2027 Convertible Notes more dilutive.
Our commercialization, collaborative and other arrangements may give rise to disputes over commercial terms, contract interpretation and ownership or protection of our intellectual property and may adversely affect the commercial success of our products.
Our commercialization, collaborative and/or licensing arrangements may give rise to disputes over commercial terms, contract interpretation and ownership or protection of our intellectual property and may adversely affect the commercial success of our products.
A number of companies in the pharmaceutical and biological product industry have suffered significant setbacks in clinical trials, even in advanced clinical trials after showing positive results in preclinical studies or earlier clinical trials.
A number of companies in the pharmaceutical and biological product industry have suffered significant setbacks in clinical trials, even in later clinical trials after showing positive results in preclinical studies or earlier clinical trials.
Estimates are used when accounting for amounts recorded in connection with acquisitions, including initial fair value determinations of assets and liabilities as well as subsequent fair value measurements. Additionally, estimates are used in determining items such as product returns, rebates, evaluation of impairment of intangible assets, fair value of contingent consideration obligation and taxes on income.
Estimates are used when accounting for amounts recorded in connection with acquisitions, including initial fair value determinations of assets and liabilities as well as subsequent fair value measurements. Additionally, estimates are used in determining items such as product returns, rebates, evaluation of impairment of intangible assets, and taxes on income.
We and our collaborative partners customarily rely on third-party contract research organizations and other third parties to assist us in designing, managing, monitoring and otherwise conducting clinical trials.
We and our collaborative partners customarily depend on third-party contract research organizations and other third parties to assist us in designing, managing, monitoring and otherwise conducting clinical trials.
We have also been unable to comply with the Bid Price Rule in the past and for periods in 2021 our continued listing on The Nasdaq Capital Market required the grant of a grace period from Nasdaq and the implementation of a one-for-four reverse stock split.
We have also been unable to comply with the Bid Price Rule in the past and for periods in 2021 our continued listing on Nasdaq required the grant of a grace period from Nasdaq and the implementation of a one-for-four reverse 38 stock split.
Engaging in strategic transactions, such as acquisitions of companies and product rights, divestitures and commercialization arrangements, have in the past and may in the future require us to incur non-recurring and other charges, increase our near- and long-term expenditures, pose integration challenges and fail to achieve the anticipated results or synergies or distract our management and business, which may harm our business.
Engaging in strategic transactions, such as acquisitions of product rights, businesses combinations and 31 divestitures, and commercialization arrangements, have in the past and may in the future require us to incur non-recurring and other charges, increase our near- and long-term expenditures, pose integration challenges and fail to achieve the anticipated results or synergies or distract our management and business, which may harm our business.
Our success is dependent on our ability to successfully execute business development strategies, strategic partnerships, acquisitions of businesses, products or technologies, and investment opportunities to build and grow for the future . Failure to do so will limit our business growth and prospects.
Risks Related to Our Business Development Activities Our success is dependent on our ability to successfully execute business development strategies, strategic partnerships, acquisitions of businesses, products or technologies, and investment opportunities to build and grow for the future . Failure to do so will limit our business growth and prospects.
It is not possible at this time to predict either the outcome or the potential financial impact of the opioid-related lawsuits mentioned above or any governmental investigations or inquiries of us or any lawsuits or regulatory responses that may result from such investigations or inquiries or otherwise.
It is not possible at this time to predict either the outcome or the potential financial impact of the opioid-related lawsuits mentioned above, any governmental investigations or inquiries of us or any lawsuits or regulatory responses that may result from such investigations or inquiries, settlements of any of the matters discussed above, or otherwise.
The results at any stage of the development process may lack the desired safety, efficacy or pharmacokinetic characteristics. Positive or encouraging results of prior clinical trials are not necessarily indicative of the results obtained in later clinical trials. Further, product candidates in later clinical trials may fail to show the desired safety and efficacy despite having progressed in development.
The results at any stage of the development process may lack the desired safety, efficacy or pharmacokinetic characteristics. Positive or encouraging results of prior clinical trials are not necessarily indicative of the results obtained in later clinical trials, and later clinical trials may fail to show the desired safety and efficacy despite having progressed in development.
As a result of the generic competition, we have lost significant market share and have had to provide pricing concessions to certain customers of INDOCIN Suppositories.
As a result of the generic competition, we have lost significant market share and have had to provide pricing concessions to certain customers of INDOCIN products.
Governmental investigations and inquiries, regulatory actions and lawsuits brought against us by government agencies and private parties with respect to Assertio Therapeutics’ historical commercialization of opioids can adversely affect our business, financial condition and results of operations.
Risks Related to Our Regulatory Environment Governmental investigations and inquiries, regulatory actions and lawsuits brought against us by government agencies and private parties with respect to Assertio Therapeutics’ historical commercialization of opioids can adversely affect our business, financial condition and results of operations.
As part of an effort to acquire a product or company or to enter into other strategic transactions, we conduct business, legal and financial due diligence with the goal of identifying, evaluating and assessing material risks involved in the transaction.
As part of an effort to acquire a product or company or to enter into other strategic transactions, we conduct due diligence with the goal of identifying, evaluating and assessing material risks involved in the transaction.
We intend to actively monitor the closing bid price of our common stock and may, if appropriate, consider available options to regain compliance with the Bid Price Rule, which could include, if necessary, seeking to effect a reverse stock split. However, there can be no assurance that we will be able to regain compliance with the Bid Price Rule.
We are actively monitoring the closing bid price of our common stock and may, if appropriate, consider available options to regain compliance with the Bid Price Rule, which could include, if necessary, seeking to effect a reverse stock split. However, there can be no assurance that we will be able to regain compliance with the Bid Price Rule.
There can be no assurance that our efforts to preclude corporate veil-piercing, alter ego, control person, or other similar claims by creditors of 32 any one particular entity within our corporate structure from reaching the assets of the other entities within our corporate structure to satisfy claims will be successful.
There can be no assurance that our efforts to preclude corporate veil-piercing, alter ego, control person, or other similar claims by creditors of any one particular entity within our corporate structure from reaching the assets of the other entities, including Assertio Holdings, within our corporate structure to satisfy claims will be successful.
Commitments and Contingencies.” These and other governmental investigations or inquiries, as well as lawsuits, in which we are and may become involved may result in additional claims and lawsuits being brought against us by governmental agencies or private parties.
These and other governmental investigations or inquiries, as well as lawsuits, in which we are and may become involved may result in additional claims and lawsuits being brought against us by governmental agencies or private parties.
We have renegotiated supply to meet our demands through 2024 and into 2025 and had to accept higher prices than were previously contracted for, but have no assurance our supplier will not make further demands that may impact future supply or have a material adverse impact on our business.
We have renegotiated supply to meet our demands into 2027 and had to accept higher prices than were previously contracted for, but have no assurance our supplier will not make further demands that may impact future supply or have a material adverse impact on our business.
Such liabilities would harm our business, financial condition and results of operations as well as divert management’s attention from our business operations and damage our reputation.
Such liabilities would damage our reputation, divert management’s attention from our business operations, and harm our business, financial condition and results of operations.
Although management believes these estimates are based upon reasonable assumptions within the bounds of its knowledge of our business and operations, actual results could differ materially from these estimates. Refer to the Critical Accounting Policies and Significant Estimates section within “Item 7.
Although management believes these estimates are based upon reasonable assumptions within the bounds of its knowledge of our business and operations, actual results could differ materially from these estimates. For additional information, please refer to the Critical Accounting Policies and Significant Estimates section within “Item 7.
Even assuming our or our collaborative partners’ products obtain regulatory approval, successful commercialization requires: • market acceptance; • a cost-effective commercial-scale production; and 40 • reimbursement under private or governmental health plans.
Even assuming our products obtain regulatory approval, successful commercialization requires: • market acceptance; • a cost-effective commercial-scale production; and • reimbursement under private or governmental health plans.
We cannot provide assurances that any current or future changes of management personnel, including the appointment of a permanent CEO, will not cause disruption to operations or customer relationships, a decline in our operating results or a delay in the execution of our business strategies and plans.
We cannot provide assurances that any current or future changes of management personnel will not cause disruption to operations or customer relationships, a decline in our operating results or a delay in the execution of our business strategies and plans.
These cost-containment measures may include, among other measures: requirements for pharmaceutical companies to negotiate prescription drug prices with government healthcare programs; controls on government-funded reimbursement for drugs; new or increased requirements to pay prescription drug rebates to government healthcare programs, including if drug prices increase at a higher rate than inflation; controls on healthcare providers; challenges to or limits on the pricing of drugs, including pricing controls or limits or prohibitions on reimbursement for specific products through other means; requirements to try less expensive products or generics before a more expensive branded product; and public funding for cost effectiveness research, which may be used by government and private third-party payors to make coverage and payment decisions. 35 For example, the ACA includes numerous provisions that affect pharmaceutical companies.
These cost-containment measures may include, among other measures: requirements for pharmaceutical companies to negotiate prescription drug prices with government healthcare programs; controls on government-funded reimbursement for drugs; new or increased requirements to pay prescription drug rebates to government healthcare programs, including if drug prices increase at a higher rate than inflation; controls on healthcare providers; challenges to or limits on the pricing of drugs, including pricing controls or limits or prohibitions on 29 reimbursement for specific products through other means; requirements to try less expensive products or generics before a more expensive branded product; and public funding for cost effectiveness research, which may be used by government and private third-party payors to make coverage and payment decisions.
If any of the investigations of the DOJ, the attorneys general identified above, and the CDI, as well as the actions filed by states and municipalities against us, result in a finding that we engaged in wrongdoing, including sales and marketing practices for our former, current and/or future products that violate applicable laws and regulations, we would be subject to significant liabilities.
If any of the investigations of the DOJ, the attorneys general identified above, and the State of California Department of Insurance (“CDI”), as well as the actions filed by states and municipalities against us, result in a finding that we engaged in wrongdoing, including sales and marketing practices for our former, current and/or future products that violate applicable laws and regulations, we would be subject to significant liabilities.
If we are unable to successfully achieve or perform these functions, including our capabilities to market products through both a sales force and a non-personal promotion model, we will not be able to maintain or increase our revenues and our business, financial condition and results of operations will be materially and adversely affected.
If we are unable to successfully achieve or perform these functions, including our capabilities to market products through both a sales force and an omni-channel promotion model, we will not be able to maintain or increase our revenues and our business, financial condition and results of operations will be materially and adversely affected.
Sales of ROLVEDON depend on coverage and reimbursement from third-party payors and a failure to obtain or a reduction in the coverage and/or reimbursement for our products could have a material adverse effect on our product sales, business and results of operations.
Risks Related to Commercial Matters Sales of ROLVEDON depend on coverage and reimbursement from third-party payors and a failure to obtain or a reduction in the coverage and/or reimbursement for our products could have a material adverse effect on our product sales, business and results of operations.
Commitments and Contingencies.” In March 2017, Assertio Therapeutics received a letter from Sen. Claire McCaskill (D-MO), the then-Ranking Member on the U.S. Senate Committee on Homeland Security and Governmental Affairs, requesting certain information regarding Assertio Therapeutics’ historical commercialization of opioid products. Assertio Therapeutics voluntarily furnished information responsive to Sen. McCaskill’s request.
Financial Statements and Supplementary Data - Note 8 . Commitments and Contingencies.” In March 2017, Assertio Therapeutics received a letter from Sen. Claire McCaskill (D-MO), the then-Ranking Member on the U.S. Senate Committee on Homeland Security and Governmental Affairs, requesting certain information regarding Assertio Therapeutics’ historical commercialization of opioid products. Assertio Therapeutics voluntarily furnished information responsive to Sen. McCaskill’s request.
A substantial portion of our ROLVEDON business relies on reimbursement from the U.S. federal government under Medicare Part B coverage. Most of our products furnished to Medicare beneficiaries in both a physician office setting and hospital outpatient setting will be reimbursed under the Medicare Part B Average Sales Price (“ASP”) payment methodology.
A substantial portion of our ROLVEDON business relies on reimbursement from the U.S. federal government under Medicare Part B coverage. Most of our products furnished to Medicare beneficiaries in both a physician office setting and hospital outpatient setting will be reimbursed under ASP payment methodology.
For example, it could: • make it more difficult for us to meet our payment and other obligations under our indebtedness; • result in other events of default under our indebtedness, which events of default could result in all of our debt becoming immediately due and payable; • make us more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; • limit our ability to borrow additional amounts for working capital and other general corporate purposes, including funding possible acquisitions of, or investments in, new and complementary businesses, products and technologies, which is a key element of our corporate strategy; • subject us to the risk of increased sensitivity to interest rate increases on any future indebtedness with variable interest rates; 37 • require the dedication of a substantial portion of our cash flow from operations to service our indebtedness, thereby reducing the amount of our cash flow available for other purposes, including working capital, business development activities, any future clinical trials and/or research and development, capital expenditures and other general corporate purposes; • limit our flexibility in planning for, or reacting to, changes in our business and our industry; and • put us at a disadvantage compared to our competitors who have less debt.
For example, it could: • limit our ability to borrow additional amounts for working capital and other general corporate purposes, including funding possible acquisitions of, or investments in, new and complementary businesses, products and technologies, which is a key element of our corporate strategy; • make it more difficult for us to meet our payment and other obligations under our indebtedness; • require the dedication of a substantial portion of our cash flow from operations to service our indebtedness, thereby reducing the amount of our cash flow available for other purposes, including working capital, business development activities, any future clinical trials and/or research and development, capital expenditures and other general corporate purposes; • result in other events of default under our indebtedness, which events of default could result in all of our debt becoming immediately due and payable; • make us more vulnerable to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation; • limit our flexibility in planning for, or reacting to, changes in our business and our industry; and 33 • put us at a disadvantage compared to our competitors who have less debt.
ASP data are calculated by the manufacturer based on a formula defined by statute and regulation and are then submitted to the CMS, the agency responsible for administering the Medicare program, on a quarterly basis. CMS uses those ASP data to determine the applicable reimbursement rates for ROLVEDON under Medicare Part B.
ASP data are calculated by the manufacturer based on a formula defined 21 by statute and regulation and are then submitted to the Centers for Medicare and Medicaid Services (“CMS”), the agency responsible for administering the Medicare program, on a quarterly basis. CMS uses those ASP data to determine the applicable reimbursement rates for ROLVEDON under Medicare Part B.
For example, Assertio Therapeutics is currently named as a defendant, along with numerous other manufacturers and distributors of opioid drugs, in multiple lawsuits alleging common-law and statutory causes of action for alleged misleading or otherwise improper marketing and promotion of opioid drugs. Such litigation and related matters are described in “Item 8. Financial Statements and Supplementary Data - Note 15.
For example, Assertio Therapeutics is currently named as a defendant, along with numerous other manufacturers and distributors of opioid drugs, in multiple lawsuits alleging common-law and statutory causes of action for alleged misleading or otherwise improper marketing and promotion of opioid drugs. Such litigation and related matters are described in “Item 8.
We have until August 19, 2024 to regain compliance and, if we do not, we may be eligible for an additional 180-day calendar period in which to regain compliance. If we do not regain compliance with the Bid Price Rule by the applicable deadline, Nasdaq will provide written notification to us that our common stock will be subject to delisting.
We have until July 21, 2025 to regain compliance and, if we do not, we may be eligible for an additional 180-day calendar period in which to regain compliance. If we do not regain compliance with the Bid Price Rule by the applicable deadline, Nasdaq will provide written notification to us that our common stock will be subject to delisting.
As with any significant leadership change, these transitions involve inherent risks and any failure to timely identify and appoint a suitable permanent CEO and execute a smooth transition could hinder employee retention and recruitment and our strategic planning, business execution, and future performance, which could have an adverse effect on our business, financial condition and results of operations.
As with any significant leadership change, these transitions involve inherent risks and any failure to execute a smooth transition could hinder employee retention and recruitment and our strategic planning, business execution, and future performance, which could have an adverse effect on our business, financial condition and results of operations.
Furthermore, we have outsourced elements of our operations to third-party vendors, who each have access to our confidential information, which increases our disclosure risk. We believe that companies have been increasingly subject to a wide variety of security incidents, cyber-attacks and other attempts to gain unauthorized access, including ransomware attacks.
Furthermore, we have outsourced elements of our operations to third-party vendors, who each have access to our confidential information, which increases our risk of data breaches or cyber-attacks. Companies have been increasingly subject to a wide variety of security incidents, cyber-attacks and other attempts to gain unauthorized access, including ransomware attacks.
Insufficient availability of our products or the active pharmaceutical ingredients and other raw materials necessary to manufacture our products, or the inability of our suppliers to manufacture and supply our products on commercially reasonable terms, will adversely impact our sales and/or margins upon depletion of the active ingredient and product inventories.
Insufficient availability of our products, the API or other raw materials necessary to manufacture our products, or the inability of our suppliers to manufacture and supply our products on commercially reasonable terms, will adversely impact our sales and/or margins upon depletion of our API and product inventories.
The FDCA, the PHSA, the Controlled Substance Act of 1970 and other federal and foreign statutes and regulations govern and influence the testing, manufacturing, packing, labeling, storing, record keeping, safety, approval, advertising, promotion, sale and distribution of our products.
The FDCA, the Public Health Services Authority, the Controlled Substance Act of 1970 and other federal and foreign statutes and regulations govern and influence the testing, manufacturing, packing, labeling, storing, record keeping, safety, approval, advertising, promotion, sale and distribution of our products.
Third-party payors may limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication, including one or more of our products.
Third-party payors have in the past and may in the future limit coverage to specific products on an approved list, or formulary, which might not include all of the approved products for a particular indication, including one or more of our products.
We may incur significant liability if it is determined that we are promoting or have in the past promoted the “off-label” use of drugs. Companies may not promote drugs for “off-label” use—that is, uses that are not described in the product’s labeling and that differ from those approved by the FDA.
We may incur significant liability if it is determined that we are promoting or have in the past promoted the “off-label” use of our products. Companies may not promote drugs for “off-label” use—that is, uses that are not described in the product’s labeling and that are not consistent with those approved by the FDA.
Third-party payors frequently require pharmaceutical companies to negotiate agreements that provide discounts or rebates from list prices and that protect the payors from price increases above a specified annual limit. We have agreed to provide such discounts and rebates to certain third-party payors.
Third-party payors frequently require pharmaceutical companies to negotiate agreements that provide discounts or rebates from list prices and that protect the payors from price increases above a specified annual limit.
For example, various federal and state governmental entities, including the DOJ and a number of state attorneys general, have launched investigations into the marketing and sales practices of pharmaceutical companies that market or have marketed opioid and non-opioid pain medications, including us.
For example, various federal and state governmental entities, including the U.S. Department of Justice (“DOJ”) and a number of state attorneys general, have launched investigations into the marketing and sales practices of pharmaceutical companies that market or have marketed opioid and non-opioid pain medications, including us.
For instance, the NDA for Cambia relies on the FDA’s prior approval of Cataflam, the diclofenac initially approved by the FDA. For NDAs submitted under Section 505(b)(2) of the FDCA, the patent certification and related provisions of the Hatch-Waxman Act apply.
For instance, the NDA for CAMBIA relies on the FDA’s previous findings of safety and efficacy of Cataflam, the diclofenac initially approved by the FDA. For NDAs submitted under Section 505(b)(2) of the FDCA, the patent certification and related provisions of the Hatch-Waxman Act apply.
Risks Related to Share Ownership and Other Stockholder Matters Our common stock may be delisted from the Nasdaq Capital Market if we are unable to regain and maintain compliance with Nasdaq's continued listing standards. Our common stock is listed on the Nasdaq Capital Market.
Risks Related to Share Ownership Our common stock may be delisted from The Nasdaq Capital Market if we are unable to regain and maintain compliance with its continued listing standards. Our common stock is listed on The Nasdaq Capital Market (“Nasdaq”).
Competition in the pharmaceutical and biological product industry is intense and we expect competition to increase. Competing products currently under development or developed in the future may prove superior to our products and may achieve greater commercial acceptance.
Competition in the pharmaceutical and biological product industry is intense and we expect competition to increase. Competing products currently under development or developed in the future may prove superior to our products. These products under development, along with currently approved and marketed products, may achieve greater commercial acceptance than our products.
Cyber-attacks could cause us to incur significant remediation costs, result in product development delays, disrupt key business operations, harm our reputation and divert attention of management and key information technology resources.
Cyber-attacks could cause us to incur significant remediation costs, disrupt key business operations, harm our reputation and divert attention of management and key information technology resources.
In addition, we are aware of other drug companies that have had interactions with regulatory agencies including the FDA relating to indomethacin, which could indicate the development of one or more additional INDOCIN product generics or other formulations of indomethacin.
In addition, we are aware of other drug companies that have had interactions with regulatory agencies including the FDA relating to indomethacin, which could indicate the development of one or more additional INDOCIN product generics or other formulations of indomethacin and, as a result, we could face competition from additional generics.
In the past, we have acquired ROLVEDON, Otrexup, Sympazan, NUCYNTA, NUCYNTA ER (both of which were subsequently divested to Collegium in February 2020), CAMBIA, Zipsor, as well as the INDOCIN products and SPRIX.
In the past, we have acquired ROLVEDON, Otrexup, Sympazan, CAMBIA, the INDOCIN products, SPRIX, NUCYNTA and NUCYNTA ER (both NUCYNTA products were subsequently divested to Collegium in February 2020).
Additionally, beginning in 2024, the IRA eliminates the 5% coinsurance for catastrophic coverage under Medicare Part D; in 2025, the IRA will cap the beneficiary annual out-of-pocket expenditure. These efforts to reduce aggregate beneficiary spending are expected to shift some costs to drug manufacturers.
Additionally, beginning in 2024, the IRA eliminates the 5% coinsurance for catastrophic coverage under Medicare Part D; in 2025, the IRA will cap the beneficiary annual out-of-pocket expenditure. These efforts to reduce aggregate beneficiary spending are expected to shift some costs to drug manufacturers. However, actions by the new administration in the U.S. may spark uncertainty for the IRA.
Our dependence on third parties for the manufacture of our products and any future product candidates may adversely affect our ability to obtain such products on a timely or competitive basis, if at all.
Rather, we intend to use the facilities of third parties to manufacture products for commercialization and clinical trials. Our dependence on third parties for the manufacture of our products and any future product candidates may adversely affect our ability to obtain such products on a timely or competitive basis, if at all.
The failure to comply with these regulations could result in, among other things, warning letters, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, non-renewal of marketing applications or authorizations or criminal prosecution, which could adversely affect our business, results of operations and financial condition. 28 We are also required to report adverse events associated with our products to the FDA and other regulatory authorities.
The failure to comply with these regulations could result in, among other things, warning letters, fines, injunctions, civil penalties, recall or seizure of products, total or partial suspension of production, non-renewal of marketing applications or authorizations or criminal prosecution, which could adversely affect our business, results of operations and financial condition.
Our royalties from Miravo's net sales of Cambia in Canada will be further adversely impacted if Miravo's patent infringement litigation fails to keep the generic from launching before the relevant patents expire.
Our royalties from Searchlight’s net sales of CAMBIA in Canada will be further adversely impacted if Searchlight’s patent infringement litigations fail to keep the generic companies from launching before the relevant patents expire.
Our failure to generate sufficient cash flow from our business to make payments on our debt would adversely affect our business, financial condition and results of operations. Our indebtedness could limit our ability to incur additional debt to fund our operations. We have significant indebtedness under the 2027 Convertible Notes.
Our failure to generate sufficient cash flow from our business to make payments on our debt would adversely affect our business, financial condition and results of operations. Our indebtedness could limit our ability to incur additional debt to fund our operations.
Any material delay or failure in the governmental approval process, the successful production of commercial product or the successful commercialization of any future approved product candidates, or those of our collaborative partners, could adversely impact our business, financial condition and results of operations.
Any material delay or failure in the governmental approval process, the successful production of commercial product or the successful commercialization of any future approved product candidates could adversely impact our business, financial condition and results of operations. The regulatory process is expensive and time consuming.
Other factors could delay or result in the termination of our or our collaborative partner’s future clinical trials and related development programs, including: • negative or inconclusive results; • patient enrollment requirements and rates; • patient noncompliance with the protocol; • adverse medical events or side effects among patients during the clinical trials; • any findings resulting from FDA inspections of clinical operations; • failure to meet FDA preferred or recommended clinical trial design, end points or statistical power; • failure to comply with good clinical practices; • failure of third-party clinical trial vendors to comply with applicable regulatory laws and regulations; • compliance with applicable laws and regulations; • inability of third-party clinical trial vendors to satisfactorily perform their contractual obligations, comply with applicable laws and regulations or meet deadlines; • delays or failures in obtaining clinical materials or manufacturing sufficient quantities of the product candidate for use in clinical trials; • delays or failures in recruiting qualified patients to participate in clinical trials; • unexpected external medical threats such as epidemics, pandemics, or other disease outbreaks; and • actual or perceived lack of efficacy or safety of the product candidate.
Other factors could delay or result in the termination of our future clinical trials and related development programs, including: • negative or inconclusive results; • patient enrollment requirements and rates; • patient noncompliance with the protocol; • adverse medical events or side effects among patients during the clinical trials; • any findings resulting from FDA inspections of clinical operations; • failure to meet FDA preferred or recommended clinical trial design, end points or statistical power; • failure to comply with current good clinical practices; • our failure, and the failure of third-party clinical trial vendors to comply with applicable regulatory laws and regulations; • inability of third-party clinical trial vendors to satisfactorily perform their contractual obligations, comply with applicable laws and regulations or meet deadlines; • delays or failures in obtaining clinical materials or manufacturing sufficient quantities of the product candidate for use in clinical trials; and • unexpected external medical threats such as epidemics, pandemics, or other disease outbreaks. 36 We are unable to predict whether any future product candidates will receive regulatory clearances or be successfully manufactured or marketed.
If a court were to allow a creditor to pierce the corporate veil and reach the assets of such other entities within our corporate structure, despite such entities not being directly liable for the underlying claims, it could have a material adverse effect on us and our operating results, results from continued operations, and financial condition.
If a court were to allow a creditor to pierce the corporate veil and reach the assets of such other entities within our corporate structure, despite such entities not being directly liable for the underlying claims, it could have a material adverse effect on us and our operating results, results from continued operations, and financial condition. 40 If we are unable to satisfy regulatory requirements relating to internal controls, our stock price could suffer.
During such transition periods, there may be uncertainty among investors, employees and others concerning our future direction and performance. For example, Dan A. Peisert separated from his service as our CEO effective as of January 2, 2024. Heather L.
During such transition periods, there may be uncertainty among investors, employees and others concerning our future direction and performance. For example, Dan A. Peisert separated from his service as our CEO effective as of January 2, 2024 and Heather L. Mason, an existing member of our Board of Directors, was appointed to serve as our interim CEO.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Board also receives updates from management and the Audit Committee on cybersecurity risks on at least an annual basis.
Biggest changeThe Board also receives updates from management and the Audit Committee on cybersecurity risks on at least an annual basis. Our Senior Vice President of Human Resources and Administration, who reports directly to our Chief Executive Officer and has been responsible for overseeing the assessment and management of cybersecurity risks at Assertio for approximately a year and a half.
ITEM 1C. CYBERSECURITY In the ordinary course of our business, we collect, use, store, and transmit digitally large amounts of confidential, sensitive, proprietary, personal, and health-related information. The secure maintenance of this information and our information technology systems is important to our operations and business strategy.
ITEM 1C. CYBERSECURITY Risk Management and Strategy In the ordinary course of our business, we collect, use, store, and transmit digitally large amounts of confidential, sensitive, proprietary, personal, and health-related information. The secure maintenance of this information and our information technology systems is important to our operations and business strategy.
In the last fiscal year, we have no identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, bu t we face certain ongoing cybersecurity risks threats that, if realized, are reasonably likely to materially affect us.
Since the beginning of the last fiscal year, there were no identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us, bu t we face certain ongoing cybersecurity risks threats that, if realized, are reasonably likely to materially affect us.
To this end, we have implemented processes designed to assess, identify, and manage risks from potential unauthorized occurrences on or through our information technology systems that may result in adverse effects on the confidentiality, integrity, and availability of these systems and the data residing therein.
To this end, we have implemented processes designed to assess, identify, and manage risks arising from internal and external cybersecurity threats and vulnerabilities from potential unauthorized occurrences on or through our information technology systems that may result in adverse effects on the confidentiality, integrity, and availability of these systems and the data residing therein.
We have an incident response plan designed to mitigate and remediate identified cybersecurity incidents and escalate certain incidents as appropriate to management and the Audit Committee. We also conduct periodic employee trainings on cyber and information security, among other topics.
We have an incident response plan designed to mitigate and remediate identified cybersecurity incidents at both Assertio and our customers and vendors and escalate certain incidents to management and, as appropriate, the Audit Committee. We also conduct periodic employee trainings on cyber and information security, among other topics.
For example, we conduct penetration and vulnerability testing, data recovery testing, security audits, and ongoing risk assessments, including due diligence on and audits of our key technology vendors, contract research organizations, and other contractors and suppliers.
For example, we conduct penetration and vulnerability testing, data recovery testing, security audits, and ongoing risk assessments, including due diligence on and audits of our key technology vendors.
Additional information on cybersecurity risks we face is discussed in Part I, Item 1A , “Risk Factors,” under the heading “Data breaches an d cyber-attacks can compromise our intellectual property or other sensitive information and cause significant damage to our business.” The Board of Directors, as a whole and at the committee level, has oversight for the most significant risks facing us and for our processes to identify, prioritize, assess, manage, and mitigate those risks.
Additional information on cybersecurity risks we face is 43 discussed in Part I, Item 1A , “Risk Factors,” under the heading “Business interruptions, including data breaches an d cyber-attacks can compromise our intellectual property or other sensitive information and cause significant damage to our business, can limit our ability to operate our business, and adversely impact the success of our commercialization partners.”
Removed
Our Senior Vice President of Human Resources and Administration, who reports directly to our interim Chief Executive Officer, is responsible for overseeing the assessment and management of cybersecurity risks. We consider cybersecurity, along with other significant risks that we face, within our overall enterprise risk management framework.
Added
Cybersecurity risks and threats are integrated into our enterprise risk management (“ERM”) program, which establishes a risk management framework that seeks to identify and assess risks that could materially impact our business and operations.
Added
Governance The Board of Directors, as a whole and at the committee level, has oversight for the most significant risks facing us and for our processes to identify, prioritize, assess, manage, and mitigate those risks. The Board oversees the ERM program and oversees an enterprise-wide approach to risk management, including risks related to cybersecurity.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur facility is used for office purposes only and no commercial manufacturing takes place at our facility. 45 In connection with the Spectrum Merger, we assumed leases for two facilities which Spectrum had previously been the lessee.
Biggest changeFinancial Statements and Supplementary Data - Note 7 , Leases.” Additionally, in connection with the Spectrum Merger, we assumed leases for two facilities which Spectrum had previously been the lessee. For additional information regarding these leases, see “Item 8. Financial Statements and Supplementary Data - Note 16 . Restructuring Charges.
ITEM 2. PROPERTIES Our corporate headquarters is located in Lake Forest, Illinois, where we lease approximately 20,000 square feet of office space (the “Lake Forest Lease”). On May 1, 2023, the Company am ended the Lake Forest Lease to reduce the size of leased premises and extend the term of the lease through December 31, 2030.
ITEM 2. PROPERTIES Our corporate headquarters is located in Lake Forest, Illinois, where we lease approximately 20,000 square feet of office space (the “Lake Forest Lease”) through December 31, 2030. Our facility is used for office purposes only and no commercial manufacturing takes place at our facility. For additional information regarding the Lake Forest Lease , see “Item 8.
Removed
These leased facilities were not used nor are expected to be used for any business purpose by the Company, nor do we expect to sublease the facilities due to the short remaining lease terms. For additional information regarding the Lake Forest Lease , see “Item 8. Financial Statements and Supplementary Data - Note 14. Leases.”

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeRecent Sales of Unregistered Securities None. Stock Performance Graph Prior to December 31, 2023, we were a smaller reporting company, as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Biggest changeRecent Sales of Unregistered Securities None. Stock Performance Graph We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, and therefore are not required to provide the stock performance graph.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders of Common Stock Our common stock trades on the Nasdaq Capital Market under the symbol “ASRT.” As of December 31, 2023, there w ere 264 shar eholders of record for our common stock, one of which is Cede & Co., a nominee for Depository Trust Company, or DTC.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information and Holders of Common Stock Our common stock trades on The Nasdaq Capital Market under the symbol “ASRT.” As of December 31, 2024, there were 268 shar eholders of record for our common stock, one of which is Cede & Co., a nominee for The Depository Trust Company, or DTC.
(a) Total Number of Shares (or Units) Purchased (1) (b) Average Price Paid per Share (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs October 1, 2023 - October 31, 2023 54,566 $2.45 N/A N/A November 1, 2023 - November 30, 2023 — — N/A N/A December 1, 2023 - December 31, 2023 — — N/A N/A Total 54,566 $2.45 (1) Consists of shares withheld to pay employees’ tax liability in connection with the vesting of restricted stock units granted under our stock-based compensation plans.
(a) Total Number of Shares (or Units) Purchased (1) (b) Average Price Paid per Share (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 52,833 $1.15 N/A N/A November 1, 2024 - November 30, 2024 — — N/A N/A December 1, 2024 - December 31, 2024 — — N/A N/A Total 52,833 $1.15 (1) Consists of shares withheld to pay employees’ tax liability in connection with the vesting of restricted stock units granted under our stock-based compensation plans.
These shares may be deemed to be “issuer purchases” of shares. 47 ITEM 6. [RESERVED]
These shares may be deemed to be “issuer purchases” of shares. 45 ITEM 6. [RESERVED]
Removed
As of December 31, 2023, we are no longer a smaller reporting company, but in accordance with the SEC’s transition rules, we are not required to provide the stock performance graph this year.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

87 edited+42 added−67 removed29 unchanged
Biggest changeOur cash needs may vary materially from our current expectations because of differences between the actual cash impacts and our expected impacts related to numerous factors, including: • acquisitions or licenses of complementary businesses, products, technologies or companies; • declines in sales of our marketed products, including those resulting from the entry and sales of generics and/or other products competitive with any of our products; • expenditures related to our commercialization of our products, including our efforts to manage supply costs and enhance the long-term prospects of ROLVEDON product sales; • milestone and royalty revenue we receive under our collaborative development arrangements; • interest and principal payments on our current and future indebtedness; • financial terms of definitive license agreements or other commercial agreements we may enter into; • changes in the focus and direction of our business strategy and/or research and development programs; • potential expenses relating to any litigation matters, including relating to Assertio Therapeutics’ prior opioid product franchise for which we have not accrued any reserves due to an inability to estimate the magnitude and/or probability of such expenses, and former drug Glumetza; • potential expenses relating to the Spectrum Reorganization Plan and/or termination expenses if a decision is made to cease development of Spectrum’s de-prioritized development asset poziotinib; and • expenditures related to future clinical trial costs.
Biggest changeCommitments and Contingencies”; • milestone and royalty revenue we receive under our collaborative development arrangements; • interest and principal payments on our current and future indebtedness; • acquisitions or licenses of complementary businesses, products, technologies or companies; • financial terms of definitive license agreements or other commercial agreements we may enter into; • changes in the focus and direction of our business strategy and/or research and development programs; • potential expenses, including termination expenses if a decision is made to cease development of Spectrum’s de-prioritized development asset poziotinib; and • expenditures related to future clinical trial costs.
These estimates take into consideration the terms of our agreements with customers, historical product returns, rebates or discounts taken, estimated levels of inventory in the distribution channel, the shelf life of the product, and specific known market events, such as competitive pricing and new product introductions. We use the most likely method in estimating product sales allowances.
These estimates take into consideration the terms of our agreements with customers, historical returns, rebates or discounts taken by product, estimated levels of inventory in the distribution channel, the shelf life of the product, and specific known market events, such as competitive pricing and new product introductions. We use the most likely method in estimating product sales allowances.
Accordingly, we may have to adjust these estimates, which could have an effect on product sales and earnings in the period of adjustments. 50 Managed Care Rebates - We offer discounts under contracts with certain managed care providers. We generally pay managed care rebates one to three months after prescriptions subject to the rebate are filled.
Accordingly, we may have to adjust these estimates, which could have an effect on product sales and earnings in the period of adjustments. Managed Care Rebates - We offer discounts under contracts with certain managed care providers. We generally pay managed care rebates one to three months after prescriptions subject to the rebate are filled.
Because of the shelf life of our products and our return policy of issuing credits with respect to product that is returned within six months before and up to 12 months after its product expiration date, there may be a significant period of time between when the product is shipped and when we issue credit on a returned product.
Because of the shelf life of our products and our return policy of issuing credits with respect to product that is returned within six months before and up to 12 months after our product expiration date, there may be a significant period of time between when the product is shipped and when we issue credit on a returned product.
As such, we primarily relied on its reversing taxable temporary differences to assess our valuation allowance, which resulted in recording of the full valuation allowance for the year ended December 31, 2023.
As such, we primarily relied on our reversing taxable temporary differences to assess our valuation allowance, which resulted in recording of the full valuation allowance for the year ended December 31, 2023.
Commercial rebates are based on (i) our estimates of end-user purchases through a GPO, (ii) the corresponding contractual rebate percentage tier we expect each GPO to achieve, and (iii) our estimates of the impact of any prospective rebate program changes made by us. We generally pay commercial rebates two to twelve months after qualifying purchases are made.
Commercial rebates are based on (i) our estimates of end-user purchases through a GPO, (ii) the corresponding contractual rebate percentage tier we expect each GPO to achieve, and (iii) our estimates of the impact of any prospective rebate program changes made by us. We generally pay commercial rebates two to 12 months after qualifying purchases are made.
Cost of Sales Cost of sales consists of costs of the active pharmaceutical ingredient, contract manufacturing and packaging costs, royalties payable to third parties, inventory write downs or scrap costs, product quality testing, internal employee costs related to the manufacturing process, distribution costs, and shipping costs related to our product sales. Cost of sales excludes the amortization of intangible assets.
Cost of Sales Cost of sales consists of costs of the active pharmaceutical ingredient, contract manufacturing and packaging costs, royalties payable to third parties, inventory write downs, product quality testing, internal employee costs related to the manufacturing process, distribution costs, and shipping costs related to our product sales. Cost of sales excludes the amortization of intangible assets.
SPRIX is a non-narcotic nasal spray that provides patients with moderate to moderately severe short-term pain a form of ketorolac that is absorbed rapidly but does not require an injection administered by a healthcare provider.
SPRIX is a non-narcotic nasal spray that provides patients with moderate to moderately severe short-term pain relief through a form of ketorolac that is absorbed rapidly but does not require an injection administered by a healthcare provider.
We estimate product returns and associated credit based on historical return trends by product or by return trends of similar products, taking into consideration the shelf life of the product at the time of shipment, shipment and prescription trends, estimated distribution channel inventory levels and consideration of the introduction of competitive products.
We estimate product returns based on historical return trends by product or by return trends of similar products, taking into consideration the shelf life of the product at the time of shipment, shipment and prescription trends, estimated distribution channel inventory levels and consideration of the introduction of competitive products.
Research and Development Expenses Research and development expenses include salaries, costs for planned clinical trials, consultant fees, supplies, and allocations of corporate costs.
Research and Development Expenses Research and development expenses include salaries, costs for clinical trials, consultant fees, supplies, and allocations of corporate costs.
Our primary marketed products are: ROLVEDON TM (eflapegrastim-xnst) injection for subcutaneous use A long-acting granulocyte colony-stimulating factor (G-CSF) with a novel formulation that is indicated to decrease the incidence of infection, as manifested by febrile neutropenia, in adult patients with nonmyeloid malignancies receiving myelosuppressive anti-cancer drugs associated with clinically significant incidence of febrile neutropenia.
Our primary marketed products are: ROLVEDON TM (eflapegrastim-xnst) injection for subcutaneous use A long-acting granulocyte colony-stimulating factor (“G-CSF”) with a novel formulation that is indicated to decrease the incidence of infection, as manifested by febrile neutropenia, in adult patients with nonmyeloid malignancies receiving myelosuppressive anti-cancer drugs associated with clinically significant incidence of febrile neutropenia.
Cash Flows from Financing Activities Cash used in financing activities for the year ended December 31, 2023 was $44.2 million, which primarily consisted of (i) a $24.2 million payment for contingent consideration, (ii) $10.5 million in cash payments related to the partial settlement of the 2027 Convertible Notes in the Convertible Note Exchange, (iii) $1.1 million of direct transaction cost payments made in connection with the Convertible Note Exchange, and (iv) cash payments related to the vesting and settlement of equity awards, of which $2.6 million related to the cash settlement of the vested performance RSUs, $3.4 million related to the total cash payment of taxes for the net share settlement of the vested performance RSUs, and $1.9 million related to cash used for employees’ withholding tax liability on stock award releases, net of cash received from stock option exercises.
Cash used in financing activities for the year ended December 31, 2023, was $44.2 million, which primarily consisted of (i) a $24.2 million payment for contingent consideration related to INDOCIN, (ii) $10.5 million in cash payments related to the partial settlement of the 2027 Convertible Notes in the Convertible Note Exchange, (iii) $1.1 million of direct transaction cost payments made in connection with the Convertible Note Exchange, and (iv) cash payments related to the vesting and settlement of equity awards, of which $2.6 million related to the cash settlement of the vested performance RSUs, $3.4 million related to the total cash payment of taxes for the net share settlement of the vested performance RSUs, and $1.9 million related to cash used for employees’ withholding tax liability upon the vesting of stock awards, net of cash received from stock option exercises.
Otrexup is a folate analog metabolic inhibitor indicated for the: • Management of patients with severe, active rheumatoid arthritis (RA) and polyarticular juvenile idiopathic arthritis (pJIA), who are intolerant of or had an inadequate response to first-line therapy. • Symptomatic control of severe, recalcitrant, disabling psoriasis in adults who are not adequately responsive to other forms of therapy.
Otrexup is a folate analog metabolic inhibitor indicated for the: • Management of patients with severe, active rheumatoid arthritis (“RA”) and polyarticular juvenile idiopathic arthritis (“pJIA”), who are intolerant of or had an inadequate response to first-line therapy. • Symptomatic control of severe, recalcitrant, disabling psoriasis in adults who are not adequately responsive to other forms of therapy.
We generally pay government rebates three to twelve months after prescriptions subject to the rebate are filled. These rebates are subject to our active participation in the respective programs.
We generally pay government rebates three to 12 months after prescriptions subject to the rebate are filled. These rebates are subject to our active participation in the respective programs.
Other revenue Other revenue consists of sales adjustments for previously divested products, which includes adjustments to reserves for product s ales allowances (gross-to-net sales allowances) and can result in a reduction to or an increase to total revenue during the period.
Other revenue Other revenue consists of sales adjustments for previously divested products, which includes adjustments to reserves for product s ales allowances (gross-to-net sales allowances) and can res ult in a reduction to or an increase to total revenue during the period.
We believe our estimates related to gross‑to‑net sales adjustments for product return allowances and rebates are judgmental and are subject to change based on our experience and certain quantitative and qualitative factors.
Our estimates related to gross‑to‑net sales adjustments for product return allowances and rebates are judgmental and are subject to change based on our historical experience and certain quantitative and qualitative factors.
Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. These differences are reflected as increases or decreases to income tax expense in the period in which they are determined. Refer to “Note 21.
Due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities. These differences are reflected as increases or decreases to income tax expense in the period in which they are determined. Refer to “ Note 14 .
Cash Flows from Investing Activities Cash provided by investing activities was $3.1 million for the year ended December 31, 2023, which primarily consisted of $2.2 million of proceeds from the sale of investments, and $2.0 million of net cash acquired in the Spectrum Merger, partially offset by cash paid for the transaction costs incurred with the acquisition of Sympazan and cash paid for purchases of property and equipment.
Cash provided by investing activities was $3.1 million for the year ended December 31, 2023, which primarily consisted of $2.2 million of proceeds from the sale of marketable securities that we acquired in the Spectrum Merger and $2.0 million of net cash acquired in the Spectrum Merger, partially offset by cash paid for the transaction costs incurred with the acquisition of Sympazan and cash paid for purchases of property and equipment.
(“Spectrum”), a commercial stage biopharmaceutical company focused on novel and targeted oncology products (the “Spectrum Merger”), through a merger of a wholly-owned subsidiary of the Company with and into Spectrum, with Spectrum surviving the merger as a wholly-owned subsidiary of the Company.
(“Spectrum”), a commercial stage biopharmaceutical company focused on novel and targeted oncology products (the “Spectrum Merger”), through a merger of a wholly-owned subsidiary of ours with and into Spectrum, with Spectrum surviving the merger as a wholly-owned subsidiary of ours. We acquired ROLVEDON, through the Spectrum Merger.
On August 22, 2022, we issued $70.0 million aggregate principal amount of 2027 Convertible Notes which mature on September 1, 2027 and bear interest at a rate of 6.5% per annum, payable semi-annually in arrears on March 1 and September 1 of each year beginning March 1, 2023.
On August 22, 2022, we issued $70.0 million aggregate principal amount of 2027 Convertible Notes which mature on September 1, 2027 and bear interest at a rate of 6.5% per annum, payable semi-annually in arrears on March 1 and September 1 of each year. On February 27, 2023, we completed the Convertible Note Exchange.
Contractual Obligations Our principal material cash requirements consist of obligations related to our debt, our contingent consideration obligation, payments for rebates, returns and discounts, non-cancelable contractual obligations for our purchase commitments, and non-cancelable leases for our office space.
Contractual Obligations Our principal material cash requirements consist of obligations related to our debt, our contingent consideration obligations, payments for rebates, returns and discounts, non-cancelable contractual obligations for our purchase commitments, 55 and non-cancelable leases for our office space. Refer to “Item 8.
In evaluating our ability to realize our deferred tax assets, management considers all available positive and negative evidence, including past operating results and forecasts of future taxable income, and the potential Section 382 limitation on the net operating loss carryforwards due to a change in control.
In evaluating our ability to realize our deferred tax assets, we consider available positive and negative evidence, including past operating results and forecasts of future taxable income, and the potential Internal Revenue Code section 382 limitation on the net operating loss carryforwards due to a change in control.
The remaining balance of $58.1 million and $49.4 million as of December 31, 2023 and 2022, respectively, is recognized in Accrued rebates, returns and discounts in the Company’s Consolidated Balance Sheets.
The remaining balance of $76.3 million and $58.1 million as of December 31, 2024 and 2023, respectively, is recognized in Accrued rebates, returns and discounts in the Company’s Consolidated Balance Sheets.
On an ongoing basis, we evaluate our estimates. We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
We base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates under different assumptions or conditions.
As a result of many factors, including those factors set forth in the “Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward‑looking statements contained in the following discussion and analysis. Overview We are a commercial pharmaceutical company offering differentiated products to patients.
As a result of many factors, including those factors set forth in the “Risk Factors” section of this Annual Report on Form 10-K, our actual results could differ materially from the results described in or implied by the forward‑looking statements contained in the following discussion and analysis.
The transaction price consists of a fixed invoice price and variable product sales allowances, which include rebates, discounts and returns. Product sales revenues are recorded net of applicable sales tax and reserves for these product sales allowances (gross-to-net sales allowances).
Our performance obligation is to deliver product to the customer, and the performance obligation is completed upon delivery. The transaction price consists of a fixed invoice price and variable product sales allowances, which include rebates, discounts and returns. Product sales revenues are recorded net of applicable sales tax and reserves for these product sales allowances (gross-to-net sales allowances).
These judgments can materially impact the estimates used to allocate acquisition date fair values to assets acquired and liabilities assumed, and the resulting timing and amounts charged to or recognized in current and future operating results.
These judgments can materially impact the estimates used to allocate 58 acquisition date fair values to assets acquired and liabilities assumed, and the resulting timing and amounts charged to or recognized in current and future operating results. For these and other reasons, actual results may vary significantly from estimated results.
The difference between the income tax expense of $77.9 million and the tax at the statutory rate of 21.0% is principally due to the recording of a full valuation allowance in the current year.
The difference between the income tax expense of $77.9 million and the tax at the statutory rate of 21.0% was principally due to the recording of a full valuation allowance during the year ended December 31, 2023.
Cost of sales are impacted by both product volume and mix, changes in which will have an impact on Cost of sales recognized by us in future periods. In 2024, we expect Cost of sales to be adversely impacted by change in product volume and mix.
Cost of sales are impacted by both product volume and mix, changes in which will have an impact on Cost of sales recognized by us in future periods . In 2025, we expect Cost of sales, as a percentage of sales, to continue to be negatively affected by changes in product volume and mix.
Accordingly, d uring the year ended December 31, 2023, we recognized a benefit of $3.9 million for the change in fair value of the CVR contingent consideration obligation.
We recognized no expense or benefit for the change in fair value of the CVR contingent consideration obligation during the year ended December 31, 2024, and a benefit of $3.9 million during the year ended December 31, 2023.
Contingent Consideration Obligation In connection with the Company’s merger with Zyla Life Sciences (“Zyla”) in May 2020 (the “Zyla Merger”), we assumed a contingent consideration obligation for future royalties on annual INDOCIN product net sales which is measured at fair value. We have an obligation to make contingent consideration payments for future royalties to an affiliate of CR Group L.P.
In connection with the merger with Zyla Life Sciences (“Zyla”) in May 2020 (the “Zyla Merger”), we assumed a contingent consideration obligation for future royalties on annual INDOCIN product net sales that is measured at fair value.
INDOCIN net products sales decreased $13.1 million from $100.3 million for the year ended December 31, 2022 to $87.2 million for the year en ded December 31, 2023, primarily due to lower volume and pricing as a result of the August 2023 approval and launch of generic indomethacin suppositories and the sales by a 503B compounder of its competitive products.
INDOCIN net products sales decreased $60.5 million from $87.2 million for the year ended December 31, 2023 to $26.8 million for the year en ded December 31, 2024, primarily due to lower volume and pricing as a result of the August 2023 approval and launch of generic indomethacin suppositories.
Revenue Recognition Product sales revenue is recognized when title has transferred to the customer and the customer has assumed the risks and rewards of ownership, which typically occurs upon delivery to the customer. Our performance obligation is to deliver product to the customer, and the performance obligation is completed upon delivery.
Revenue Recognition Product sales revenue is recognized when the customer has control of the product, which is when title has transferred to the customer and the customer has assumed the risks and rewards of ownership. These conditions typically occur upon delivery to the customer.
Actual results may differ from those estimates under different assumptions or conditions. We believe the following critical accounting policies reflect the more significant judgements and estimates used in the preparation of our consolidated financial statements. A more detailed discussion of our significant accounting policies may be found in “Note 1.
We believe the following critical accounting policies reflect the more significant judgements and estimates used in the preparation of our consolidated financial statements. A more detailed discussion of our significant accounting policies may be found in “ Note 1 .
For the year ended December 31, 2023, net loss was $331.9 million compared to net income of $109.6 million for the same period in 2022 .
For the year ended December 31, 2024 , net loss was $21.6 million compared to net loss of $331.9 million for the year ended December 31, 2023.
Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements. The preparation of our consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities.
The preparation of our consolidated financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates.
Acquisitions We account for acquired businesses using the acquisition method of accounting under ASC 805, which requires that assets acquired and liabilities assumed be recorded at date of acquisition at their respective fair values.
Income Taxes” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report. Acquisitions We account for acquired businesses using the acquisition method of accounting under ASC 805, which requires that assets acquired and liabilities assumed be recorded at date of acquisition at their respective fair values.
Sales adjustments for previously divested products resulted in an increase to total revenue of $0.2 million for the year ended December 31, 2023 and a reduction to total revenue of $1.3 million for the year ended December 31, 2022.
Sales adjustments for reserves recorded in prior periods for previously divested products resulted in an increase to total revenue of $2.1 million and $0.2 million for the years ended December 31, 2024 and December 31, 2023, respectively.
CAMBIA net product sales decreased $16.7 million from $24.7 million for the year ended December 31, 2022 to $8.1 million for the year ended December 31, 2023, primarily due to lower volume caused by generic entrants in 2023.
CAMBIA net product sales decreased $2.5 million from $8.1 million for the year ended December 31, 2023 to $5.6 million for the year ended December 31, 2024, primarily due to a decrease in volume caused by generic entrants that began in January 2023.
We do not assume financial responsibility for returns of any of our currently marketed products if those returns relate to sales of that product prior to the period of our ownership of the respective product. For products we have divested, we are only financially responsible for product returns of products sold by us, which are identified by specific lot numbers.
We do not assume financial responsibility for returns of any of our currently marketed products if those returns relate to sales of that product prior to or after the period of our ownership of the respective product, which are identified by specific lot numbers. 56 Shelf lives for our products, from the respective manufacture dates, range from 24 months to 48 months.
For these and other reasons, actual results may vary significantly from estimated results. 51 On July 31, 2023, we completed the Spectrum Merger, which was accounted for under ASC 805. See “Note 2. Acquisitions” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this annual report.
On July 31, 2023, we completed the Spectrum Merger, which was accounted for under ASC 805. See “ Note 2 . Acquisitions” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this annual report. RECENT ACCOUNTING PRONOUNCEMENTS See “Item 8. Financial Statements and Supplemental Data - Note 1 .
(4) Balance includes allowances for cash discounts for prompt payment of $0.9 million as of both December 31, 2023 and 2022, which are recognized in Account receivable, net in the Company’s Consolidated Balance Sheets.
(4) Consists of sales adjustments for previously divested products recognized in Other revenue in the Consolidated Statements of Comprehensive Loss. (5) Balance includes allowances for cash discounts for prompt payment of $1.2 million and $0.9 million as of December 31, 2024 and 2023, respectively, which are recognized in Account receivable, net in the Company’s Consolidated Balance Sheets.
It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions be recognized in earnings in the period of such change.
It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions be recognized in earnings in the period of such change. As of December 31, 2024, we have recorded a full valuation allowance against our net deferred tax assets.
We follow the guidelines set forth in the applicable accounting guidance regarding the recoverability of any tax assets recorded on the consolidated balance sheet and provide any necessary allowances as required.
We follow the guidelines set forth in the applicable accounting guidance regarding the recoverability of any tax assets recorded on the consolidated balance sheet and provide any necessary allowances as required. Determining necessary allowances requires us to make assessments about the timing of future events, including the probability of expected future taxable income and available tax planning opportunities.
Income Taxes” in the Notes to the Consolidated Financial Statements included in Part II, Item 8 of this report. 53 RESULTS OF OPERATIONS The following table reflects our results of operations for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, 2023 2022 Revenues: Product sales, net $ 149,451 $ 155,121 Royalties and milestones 2,433 2,403 Other revenue 185 (1,290) Total revenues 152,069 156,234 Costs and expenses: Cost of sales 27,020 18,748 Research and development expenses 2,843 — Selling, general and administrative expenses 78,638 46,786 Change in fair value of contingent consideration (25,538) 18,687 Amortization of intangible assets 27,527 32,608 Loss on impairment of intangible assets 279,639 — Restructuring charges 5,476 — Total costs and expenses 395,605 116,829 (Loss) income from operations (243,536) 39,405 Other (expense) income: Debt related expenses (9,918) — Interest expense (3,380) (7,961) Other gain (loss) 2,780 (278) Total other expense (10,518) (8,239) Net (loss) income before income taxes (254,054) 31,166 Income tax (expense) benefit (77,888) 78,459 Net (loss) income and comprehensive (loss) income $ (331,942) $ 109,625 54 Revenues The following table reflects total revenues, net for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, 2023 2022 Product sales, net: ROLVEDON $ 18,175 $ — INDOCIN products 87,217 100,338 Sympazan 9,938 1,768 Otrexup 12,026 11,148 SPRIX 9,150 9,110 CAMBIA 8,070 24,720 Zipsor 3,460 3,364 Other products 1,415 4,673 Total product sales, net 149,451 155,121 Royalties and milestone revenue 2,433 2,403 Other revenue 185 (1,290) Total revenues $ 152,069 $ 156,234 Product sales, net We acquired ROLVEDON on July 31, 2023.
The results of operations of Spectrum are included in our consolidated financial statements as of the Effective Date. 47 RESULTS OF OPERATIONS The following table reflects our results of operations for the years ended December 31, 2024 and 2023 (in thousands): Year ended December 31, 2024 2023 Revenues: Product sales, net $ 120,849 $ 149,451 Royalties and milestones 2,012 2,433 Other revenue 2,100 185 Total revenues 124,961 152,069 Costs and expenses: Cost of sales 39,227 27,020 Research and development expenses 3,822 2,843 Selling, general and administrative expenses 75,051 78,638 Change in fair value of contingent consideration (244) (25,538) Amortization of intangible assets 25,644 27,527 Loss on impairment of intangible assets 5,217 279,639 Restructuring charges 720 5,476 Total costs and expenses 149,437 395,605 Loss from operations (24,476) (243,536) Other income (expense): Debt related expenses — (9,918) Interest expense (3,039) (3,380) Interest income 3,221 2,403 Other gain, net 2,765 377 Total other income (expense) 2,947 (10,518) Net loss before income taxes (21,529) (254,054) Income tax expense (52) (77,888) Net loss and comprehensive loss $ (21,581) $ (331,942) 48 Revenues The following table reflects total revenues, net for the years ended December 31, 2024 and 2023 (in thousands): Year ended December 31, 2024 2023 Product sales, net: ROLVEDON $ 60,090 $ 18,175 INDOCIN products 26,761 87,217 Sympazan 10,457 9,938 Otrexup 8,842 12,026 SPRIX 7,624 9,150 CAMBIA 5,556 8,070 Other products 1,519 4,875 Total product sales, net 120,849 149,451 Royalties and milestone revenue 2,012 2,433 Other revenue 2,100 185 Total revenues $ 124,961 $ 152,069 Product sales, net ROLVEDON net product sales were $60.1 million and $18.2 million for the years en ded December 31, 2024 and 2023, respectively .
SPRIX net product sales increased slightly from $9.1 million for the year ended December 31, 2022 to $9.2 million for the year ended December 31, 2023, primarily due to favorable payor mix, almost entirely offset by lower volume.
SPRIX net product sales decreased $1.5 million from $9.2 million for the year ended December 31, 2023 to $7.6 million for the year ended December 31, 2024, primarily due to lower volume.
The following table reflects activity relating to the Company’s provision for product sales allowances as of December 31, 2023 and 2022 (in thousands): Product Returns Rebates (1) Other Sales Allowances (2) Total (4) Balance as of December 31, 2021 $ 33,163 $ 6,080 $ 14,357 $ 53,600 Provisions made in current period to Product Sales, net 7,247 23,299 71,535 102,081 Provisions made in current period to Other revenue (3) 1,290 — — 1,290 Payments and credits made in current period (10,413) (21,694) (74,552) (106,659) Balance as of December 31, 2022 $ 31,287 $ 7,685 $ 11,340 $ 50,312 Provisions made in current period to Product Sales, net 7,842 24,901 51,412 84,155 Provisions made in current period to Other revenue (3) — — 185 185 Payments and credits made in current period (9,340) (18,083) (48,183) (75,606) Balance as of December 31, 2023 $ 29,789 $ 14,503 $ 14,754 $ 59,046 (1) Rebates consist of managed care rebates, commercial rebates and government rebates.
The following table reflects activity relating to the Company’s provision for product sales allowances as of December 31, 2024 and 2023 (in thousands): Product Returns Rebates (1) Other Sales Allowances (2) Total (4) Balance as of December 31, 2022 $ 31,287 $ 7,685 $ 11,340 $ 50,312 Provisions made in current period to Product Sales, net (3) 7,842 24,901 51,782 84,525 Provisions made in current period to Other revenue (4) — — (185) (185) Payments and credits made in current period (9,340) (18,083) (48,183) (75,606) Balance as of December 31, 2023 $ 29,789 $ 14,503 $ 14,754 $ 59,046 Provisions made in current period to Product Sales, net (3) 5,796 59,107 105,998 170,901 Provisions made in current period to Other revenue (4) (2,100) — — (2,100) Payments and credits made in current period (11,130) (52,696) (86,553) (150,379) Balance as of December 31, 2024 $ 22,355 $ 20,914 $ 34,199 $ 77,468 (1) Rebates consist of managed care rebates, commercial rebates and government rebates.
Refer to Note 11 , Note 20 , Note 1, Note 15 and Note 14 , respectively, to the accompanying Consolidated Financial Statements. We generally expect to satisfy these requirements and commitments with cash on hand and cash provided by operating activities. RECENTLY ADOPTED ACCOUNTING PRONOUNCEMENTS See “Item 8. Financial Statements and Supplemental Data - Note 1.
Financial Statements and Supplemental Data - Note 6 , Note 13 , Note 1, Note 8 and Note 7 ,” respectively. We generally expect to satisfy these requirements and commitments with cash on hand and cash provided by operating activities.
Debt-related expenses for the year ended December 31, 2023 consist of an induced conversion expense of approximately $8.8 million and direct transaction costs of approximately $1.1 million incurred as a result of the $30.0 million Convertible Note Exchange in the first qua rter of 2023, as descri bed in Note 11 , Debt, of the accompanying Consolidated Financial Statements.
Debt-related expenses for the year ended December 31, 2023 consisted of an induced conversion expense of approximately $8.8 million and direct transaction costs of approximately $1.1 million incurred as a result of the privately negotiated exchange of $30.0 million principal amount of the 2027 Convertible Notes (the “Convertible Note Exchange”) in the first qua rter of 2023, as further described below under the headings “Liquidity and Capital Resources” and in “Item 8.
Otrexup net product sales increased $0.9 million from $11.1 million for the year ended December 31, 2022 to $12.0 million for the year ended December 31, 2023, primarily due to higher volume, partially offset by unfavorable payor mix.
Otrexup net product sales decreased $3.2 million from $12.0 million for the year ended December 31, 2023 to $8.8 million for the year ended December 31, 2024, primarily due to unfavorable payor mix and lower volume.
Management then assessed and concluded that the fair value of the asset group was less than its carrying value and so recognized an impairment loss of approximately $238.8 million , which was allocated to the intangible assets of the group and is classified within Loss on impairment of intangible assets in the Consolidated Statement of Comprehensive (Loss) Income.
For the three months ended September 30, 2023, management concluded that the fair value of the entity level asset group was less than its carrying value and recognized an impairment loss of approximately $238.8 million, which was allocated to the intangible assets of the group.
In determining future taxable income, management makes assumptions to forecast U.S. federal, state, and foreign operating income, the reversal of temporary differences, and the implementation of any feasible and prudent tax planning strategies.
In determining future taxable income, we make assumptions to forecast U.S. federal and state operating income, the reversal of temporary differences, and the implementation of any feasible and prudent tax planning strategies. These assumptions require significant judgment regarding the forecasts of the future taxable income in each tax jurisdiction and are consistent with the forecasts used to manage our business.
Change in Fair Value of Contingent Consideration In connection with the Spectrum Merger, we issued CVRs that represent a contingent consideration obligation which is measured at fair value. Pursuant to the Zyla Merger, we assumed a contingent consideration obligation for future royalties on annual INDOCIN product net sales which is measured at fair value.
Change in Fair Value of Contingent Consideration In connection with the Spectrum Merger, we issued contingent value rights (“CVRs”) that represent a contingent consideration obligation that is measured at fair value.
Amortization of Intangible Assets The following table reflects amortization of intangible assets for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, 2023 2022 Amortization of intangible assets—ROLVEDON $ 5,270 $ — Amortization of intangible assets—INDOCIN 11,321 12,841 Amortization of intangible assets—Sympazan 1,213 202 Amortization of intangible assets—Otrexup 4,592 5,511 Amortization of intangible assets—SPRIX 5,131 5,572 Amortization of intangible assets—CAMBIA — 7,950 Amortization of intangible assets—Zipsor — 532 Total amortization of intangible assets $ 27,527 $ 32,608 Amortization expense decreased $5.1 million from $32.6 million for the year ended December 31, 2022 to $27.5 million for the year ended December 31, 2023, primarily due to the full amortization of CAMBIA intangible assets in the fourth 57 quarter of 2022 and a lower carrying value of intangible assets due to impairment charges recognized in the third and fourth quarters of 2023, partially offset by the additional amortization of the ROLVEDON and Sympazan product rights acquired in July 2023 and October 2022, respectively.
Amortization of Intangible Assets The following table reflects amortization of intangible assets for the years ended December 31, 2024 and 2023 (in thousands): Year ended December 31, 2024 2023 Amortization of intangible assets—ROLVEDON $ 6,066 $ 5,270 Amortization of intangible assets—INDOCIN 13,514 11,321 Amortization of intangible assets—Sympazan 1,212 1,213 Amortization of intangible assets—Otrexup 1,044 4,592 Amortization of intangible assets—SPRIX 3,808 5,131 Total amortization of intangible assets $ 25,644 $ 27,527 Amortization expense decreased $1.9 million from $27.5 million for the year ended December 31, 2023 to $25.6 million for the year ended December 31, 2024, primarily as a result of a decrease in amortization expense o f $9.4 mi llion attributable to the lower carrying value of intangible assets due to impairment charges recognized in the third and fourth quarters of 2023, partially offset by (i) an increase of $0.8 million due to additional amortization of ROLVEDON product rights, acquired in July 2023, and (ii) an increase in amortization expense of $6.7 m illion , which was due to revisions to decrease the remaining estimated useful life of the INDOCIN product rights intangible assets.
Research and development expenses w ere $2.8 million for the year ended December 31, 2023, representing primarily costs directly associated with ongoing clinical trial activity for ROLVEDON. We did not have research and development expenses during the year ended December 31, 2022.
Research and development expenses w ere $3.8 million and $2.8 million for the years ended December 31, 2024 and 2023, respectively, primarily representing costs directly associated with the same-day dosing clinical trial of ROLVEDON, which we concluded in the fourth quarter of 2024.
We recognized revenue related to the CAMBIA license agreement of $2.0 million and $1.9 million during the years ended December 31, 2023 and 2022, respectively. We recognized Milestone revenue associated with the completion of certain service milestones of $0.4 million and $0.5 million during the years ended December 31, 2023 and 2022, respectively.
We recognized no milestone revenue associated with the completion of certain service milestones for the year ended December 31, 2024 and $0.4 million for the year ended December 31, 2023.
In 2024, we expect INDOCIN net product sales to continue to be impacted unfavorably by increasing competition as a result of existing and future generic entrants and other competitive products. We acquired Sympazan in October 2022. Sympazan net product sales totaled $9.9 million and $1.8 million for the years ended December 31, 2023 and 2022, respectively.
In 2025, we expect INDOCIN net product sales to continue to be impacted unfavorably by increasing competition as a result of existing generic entrants, new and expected future generic entrants, including the new generic entrant that launched in January 2025, and other competitive products.
Refer to Note 11 , Debt, of the accompanying Consolidated Financial Statements for additional information on the 2027 Convertible Notes. 49 CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and U.S. Securities and Exchange Commission (“SEC”) regulations for annual reporting.
CRITICAL ACCOUNTING POLICIES AND SIGNIFICANT ESTIMATES Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and SEC regulations for annual reporting. Our management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements.
During the years ended December 31, 2023 and 2022, we recognized a benefit of $21.6 million and an expense $18.7 million, respectively, for the change in fair value of contingent consideration obligation incurred in the Zyla Merger. 52 Income Taxes We record the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in our accompanying consolidated balance sheets, as well as operating loss and tax credit carryforwards.
Income Taxes We record the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in our accompanying consolidated balance sheets, as well as operating loss and tax credit carryforwards.
Zipsor net product sales increased $0.1 million from $3.4 million for the year ended December 31, 2022 to $3.5 million for the year ended December 31, 2023, primarily due to favorable payor mix, partially offset by lower volume. Other net product sales include sales for OXAYDO and SOLUMATRIX products.
Other net product sales for the year ended December 31, 2023 of $4.9 million include net product sales for Zipsor of $3.5 million and net product sales for OXAYDO of $1.4 million.
The following table reflects summarized cash flow activities for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, 2023 2022 Net cash provided by operating activities $ 49,604 $ 78,598 Net cash provided by (used in) investing activities 3,097 (42,673) Net cash used in financing activities (44,201) (7,794) Net increase in cash and cash equivalents 8,500 28,131 Cash and cash equivalents at beginning of year 64,941 36,810 Cash and cash equivalents at end of year $ 73,441 $ 64,941 Cash Flows from Operating Activities C ash provided by operating activities was $49.6 million for the year ended December 31, 2023 compared to $78.6 million in the same period in 2022, primarily due to lower net income including non-cash items, partially offset by favorable working capital cash flows compared to last year.
We were in compliance with our covenants with respect to the 2027 Convertible Notes as of December 31, 2024. 54 The following table reflects summarized cash flow activities for the years ended December 31, 2024 and 2023 (in thousands): Year ended December 31, 2024 2023 Net cash provided by operating activities $ 26,408 $ 49,604 Net cash (used in) provided by investing activities (48,911) 3,097 Net cash used in financing activities (350) (44,201) Net (decrease) increase in cash and cash equivalents (22,853) 8,500 Cash and cash equivalents at beginning of year 73,441 64,941 Cash and cash equivalents at end of year $ 50,588 $ 73,441 Cash Flows from Operating Activities C a sh provided by operating activities was $26.4 million for the year ended December 31, 2024 compared to $49.6 million for the year ended December 31, 2023, primarily due to lower net product sales and a change in product mix for the year ended December 31, 2024 compared to the year ended December 31, 2023.
LIQUIDITY AND CAPITAL RESOURCES Historically and through December 31, 2023, we have financed our operations and business development efforts primarily from product sales, private and public sales of equity securities, including convertible debt securities, the proceeds of secured borrowings, the sale of rights to future royalties and milestones, upfront license, milestone and fees from collaborative and license partners.
The December 31, 2023 income tax expense also included the valuation allowance for utilization of our deferred tax assets to offset the deferred tax liabilities of Spectrum recorded through acquisition accounting. 53 LIQUIDITY AND CAPITAL RESOURCES We have financed and continue to finance our operations and business development efforts primarily from product sales, public sales of equity securities, including convertible debt securities, and the proceeds of secured borrowings.
We suspended use of the ATM offering program as a result of the issuance of the 2027 Convertible Notes and the ATM offering program has since expired. 60 We believe that our existing cash will be sufficient to fund our operations and make the required payments under our debt agreements due for the next twelve months from the date of this filing.
We believe that our existing cash, cash equivalents and short-term investments, which totaled $100.1 million at December 31, 2024, will be sufficient to fund our operations and make the required payments under our debt agreements due for the next 12 months from the date of this filing.
Both products are nonsteroidal anti-inflammatory drug (NSAID), indicated for: • Moderate to severe rheumatoid arthritis including acute flares of chronic disease • Moderate to severe ankylosing spondylitis INDOCIN ® (indomethacin) Oral Suspension • Moderate to severe osteoarthritis • Acute painful shoulder (bursitis and/or tendinitis) • Acute gouty arthritis Sympazan® (clobazam) oral film A benzodiazepine indicated for the adjunctive treatment of seizures associated with Lennox-Gastaut Syndrome (LGS) in patients aged two years of age or older.
Both products are nonsteroidal anti-inflammatory drugs (“NSAIDs”), indicated for: • Moderate to severe rheumatoid arthritis including acute flares of chronic disease • Moderate to severe ankylosing spondylitis INDOCIN ® (indomethacin) Oral Suspension • Moderate to severe osteoarthritis • Acute painful shoulder (bursitis and/or tendinitis) • Acute gouty arthritis Otrexup ® (methotrexate) injection for subcutaneous use A once weekly single-dose auto-injector containing methotrexate.
The following table reflects interest expense for the years ended December 31, 2023 and 2022 (in thousands): Year ended December 31, 2023 2022 Interest on 2027 Convertible Notes $ 2,925 $ 1,592 Interest on 2024 Secured Notes — 6,065 Amortization of Royalty Rights (1) — 68 Amortization of debt issuance costs 455 236 Total interest expense $ 3,380 $ 7,961 (1) As a result of the extinguishment of the Royalty Rights obligation, there will be no additional amortization expense recognized in future periods.
The following table reflects interest expense for the years ended December 31, 2024 and 2023 (in thousands): Year ended December 31, 2024 2023 Interest on 2027 Convertible Notes $ 2,600 $ 2,925 Amortization of debt issuance costs 439 455 Total interest expense $ 3,039 $ 3,380 Total interest expense decreased $0.3 million from $3.4 million for the year ended December 31, 2023 to $3.0 million for the year ended December 31, 2024, primarily due to a lower principal balance of our outstanding 6.5% Convertible Senior Notes due 2027 as a result of the Convertible Note Exchange.
Zipsor uses proprietary ProSorb® delivery technology to deliver a finely dispersed, rapid and consistently absorbed formulation of diclofenac. 48 On July 31, 2023 (the “Effective Date”) , pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated as of April 24, 2023, we completed the acquisition of Spectrum Pharmaceutical, Inc.
CAMBIA is not a pill; it is a powder, and combining CAMBIA with water activates the medicine in a unique way. On July 31, 2023 (the “Effective Date”) , pursuant to an Agreement and Plan of Merger (the “Merger Agreement”), dated as of April 24, 2023, we completed the acquisition of Spectrum Pharmaceuticals, Inc.
On February 27, 2023, we completed a privately negotiated exchange of $30.0 million principal amount of the 2027 Convertible Notes (the “Convertible Note Exchange”). Pursuant to the Convertible Note Exchange, 6,990,000 shares of the Company’s common stock, plus an additional $10.5 million in cash, were issued to settle a portion of the 2027 Convertible Notes (the “Exchanged Notes”).
Pursuant to the Convertible Note Exchange, 6,990,000 shares of the Company’s common stock, plus an additional $10.5 million in cash, were issued in a partial settlement of the 2027 Convertible Notes. The terms of the 2027 Convertible Notes are governed by an indenture dated August 25, 2022 (the “2027 Convertible Note Indenture”).
The inability to raise any additional capital that may be required to fund our future operations, payments due under our debt agreements, or product acquisitions and strategic transactions which we may pursue could have a material adverse effect on the Company.
The inability to raise any additional capital that may be required for any of the above items could have a material adverse effect on the Company.
Loss on Impairment of Long-Lived Assets During the third quarter of 2023, our market capitalization declined to below the book value of our equity, which management determined represented an indicator of impairment with respect to our long-lived assets. Applying the relevant accounting literature, we first assessed the recoverability of our long-lived assets.
Loss on Impairment of Long-Lived Assets Dur ing each of the three months ended December 31, 2024, September 30, 2024, June 30, 2024 and March 31, 2024, we determined that the book value of our equity exceeded our market capitalization, which management determined represented an indicator of impairment with respect to our long-lived assets.
Sympazan is the only product to offer clobazam in a convenient film with PharmFilm® technology. Sympazan is taken without water or liquid, adheres to the tongue, and dissolves to deliver clobazam. Otrexup ® (methotrexate) injection for subcutaneous use A once weekly single-dose auto-injector containing a prescription medicine, methotrexate.
Sympazan® (clobazam) oral film A benzodiazepine indicated for the adjunctive treatment of seizures associated with Lennox-Gastaut Syndrome (“LGS”) in patients aged two years of age or older. Sympazan is the only product to offer clobazam in a convenient film with PharmFilm® technology. Sympazan is taken without water or liquid, adheres to the tongue, and dissolves to deliver clobazam.
(2) Other Sales Allowances consist of wholesaler and pharmacy discounts, prompt pay discounts, patient discount programs, and chargebacks. (3) Consists of sales adjustments for previously divested products recognized in Other revenue in the Consolidated Statements of Comprehensive (Loss) Income.
(2) Other Sales Allowances consist of wholesaler and pharmacy discounts, prompt pay discounts, patient discount programs, and chargebacks. (3) Includes adjustments to revenue recognized as a result of changes in estimates for the Company’s gross-to-net sales allowances for products sold in previous periods, which were approximately 3% and 3% for the years ended December 31, 2024 and 2023.
In August 2023, we implemented a reorganization plan of our workforce and other resources primarily designed to realize the synergies of the Spectrum Merger (the “Spectrum Reorganization Plan”). The Spectrum Reorganization Plan was primarily focused on the reduction of staff at our headquarters office and the exit of certain leased facilities.
Restructuring Charges Restructuring charges were $0.7 million for the year ended December 31, 2024, compared to $5.5 million for the year ended December 31, 2023. In August 2023, we im plemented a reorganization plan of our workforce and other resources primarily designed to realize the synergies of the Spectrum Merger (the “Spectrum Reorganization Plan”).
During the third quarter of 2023, our market capitalization declined to below the book value of our equity, which management determined represented an indicator of impairment with respect to our long-lived assets. Applying the relevant accounting literature, we first assessed the recoverability of our long-lived assets.
During each of the three months ended December 31, 2023 and September 30, 2023, we performed an assessment of the recoverability and impairment of our long-lived assets as a result of the book value of our equity exceeding our market capitalization, which management determined represented an indicator of impairment.
We ceased OXAYDO product sales beginning in September 2023, and ceased SOLUMATRIX product sales beginning in July 2022. For the year ended December 31, 2023, the provision recognized for gross-to-net sales allowances decreased by $17.9 million compared to the year ended December 31, 2022, due shift in product mix with the addition of Rolvedon and decrease in Indocin and Cambia.
For the year ended December 31, 2024, the amount recognized for gross-to-net sales allowances on product sales increased by $86.4 million compared to the year ended December 31, 2023, primarily due to a shift in product mix from INDOCIN to ROLVEDON, which resulted in a higher rate of commercial and governmental rebates recognized for 49 ROLVEDON.
Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Schedule II to the accompanying Consolidated Financial Statements for additional information about amounts charged as a reduction to revenue for product sales allowances, product return allowances, discounts, chargebacks, and rebates. 55 Royalties & milestone revenue In November 2010, we entered into a license agreement granting Miravo the rights to commercially market CAMBIA in Canada.
Refer to the Critical Accounting Policies and Significant Estimates section within this Item 7 and Schedule II to the accompanying Consolidated Financial Statements for additional information about amounts charged as a reduction to revenue for product sales allowances, product return allowances, discounts, chargebacks, and rebates.
Selling, General and Administrative Expenses Selling, general and administrative expenses primarily consist of personnel, contract personnel, marketing and promotion expenses associated with our commercial products, personnel expenses to support our administrative and operating activities, facility costs, and professional expenses, such as legal and accounting fees. 56 Selling, general, and administrative expenses increased $31.9 million from $46.8 million for the year ended December 31, 2022 to $78.6 million for the year ended December 31, 2023, primarily due to: (i) $8.9 million of transaction-related expenses, primarily legal and professional fees, associated with the Spectrum Merger, (ii) $9.9 million of higher operating expenses incurred as a result of the Spectrum Merger, (iii) $1.6 million of higher selling and marketing expenses, (iv) $5.2 million of higher personnel costs, (iv) a gain of $2.0 million in the second quarter of 2022 for insurance reimbursement for previous opioid-related spend not repeating in 2023, (v) $2.5 million increase in FDA user fees for Otrexup and Sympazan based on first full year of payment, and (vi) an increase of $1.7 million in stock-based compensation expense.
Selling, general, and administrative expenses decreased $3.6 million from $78.6 million for the year ended December 31, 2023 to $75.1 million for the year ended December 31, 2024, primarily due to: (i) $8.9 million of transaction-related expenses, primarily legal and professional fees, associated with the Spectrum Merger that were recognized in the prior year, of which there were none in the current year, (ii) a $4.1 million decrease in stock-based compensation expense, (iii) a $3.0 million decrease in operating expenses from cost savings initiatives implemented following the Spectrum Merger, and (iv) a $1.0 million decrease in sales and marketing expenses.
During the year ended December 31, 2023, we recognized a benefit of $21.6 million attributable to a decrease in the fair value of the contingent consideration obligation incurred in the Zyla Merger, compared t o an expense of $18.7 million recognized for the year ended December 31, 2022.
Change in fair value of contingent consideration represents the change in fair value, if any, of our contingent consideration obligations which are remeasured each reporting period. During the years ended December 31, 2024 and 2023, we recognized benefits of $0.2 million and $21.6 million, respectively, for the change in fair value of contingent consideration obligation incurred in the Zyla Merger.
Cash used in investing activities was $42.7 million during the year ended December 31, 2022, which primarily consisted of $27.0 million in cash paid for the acquisition of Otrexup and $15.4 million in cash paid for the acquisition of Sympazan.
Cash Flows from Financing Activities Cash used in financing activities for the year ended December 31, 2024, was $0.4 million, which consisted entirely of cash used for employees’ withholding tax liability upon the vesting of stock awards.
The current year income tax provision also includes the valuation allowance for utilization of our deferred tax assets to offset the deferred tax liabilities of Spectrum recorded through acquisition accounting. During the year ended December 31, 2022, we recorded an income tax benefit of $78.5 million, which represents an effective tax rate of (251.7)%.
Income Tax Provision During the year ended December 31, 2024, we recorded an income tax expense of $0.1 million, which represents an effective tax rate of (0.2)%.
Cost of sales increased $8.3 million from $18.7 million for the year ended December 31, 2022 to $27.0 million for the year ended December 31, 2023, primarily due to: (i) $8.3 million of ROLVEDON cost of sales after acquisition in July 2023, including inventory step-up, (ii) $3.1 million increase in cost of sales attributable to Sympazan and Otrexup higher net product sales, (iii) $2.5 million in higher scrap costs, partially offset by $5.1 million decrease in cost of sales related to INDOCIN and CAMBIA due to lower net product sales and the impact of product mix.
Cost of sales increased $12.2 million from $27.0 million for the year ended December 31, 2023 to $39.2 million for the year ended December 31, 2024, primarily due a $6.2 million increase in cost of sales related to changes in product mix, primarily fr om INDOCIN to ROLVEDON, and $6.0 million of higher inventory write-downs, primarily for INDOCIN and ROLVEDON, due to lower demand for INDOCIN and the manufacture of batches of ROLVEDON that did not meet our quality standards.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Prior to December 31, 2023, we were a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are a smaller reporting company, as defined by Rule 12b-2 of the Exchange Act, and therefore are not required to provide the information called for by this Item 7A in this report. 59
Removed
As of December 31, 2023, we are no longer a smaller reporting company, but in accordance with the SEC’s transition rules, we are not required to provide the information called for by this Item 7A in this report. 62

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