hznp-10q_20200331.htm
false Q1 0001492426 00-0000000 --12-31 Large Accelerated Filer 2026-05-22 2027-08-01 2022-03-15 us-gaap:OtherAssetsNoncurrent us-gaap:OtherAssetsNoncurrent us-gaap:AccruedLiabilitiesCurrent us-gaap:AccruedLiabilitiesCurrent us-gaap:OtherLiabilitiesNoncurrent us-gaap:OtherLiabilitiesNoncurrent 0.33 0.50 P3Y P2Y P3Y P3Y 0.33 0.50 P1Y P5Y5M4D P5Y1M24D P5Y18D 0001492426 2020-01-01 2020-03-31 xbrli:shares 0001492426 2020-05-01 iso4217:USD 0001492426 2020-03-31 0001492426 2019-12-31 0001492426 us-gaap:DevelopedTechnologyRightsMember 2020-03-31 0001492426 us-gaap:DevelopedTechnologyRightsMember 2019-12-31 0001492426 us-gaap:CustomerRelationshipsMember 2020-03-31 0001492426 us-gaap:CustomerRelationshipsMember 2019-12-31 iso4217:USD xbrli:shares 0001492426 2019-01-01 2019-03-31 0001492426 us-gaap:CommonStockMember 2019-12-31 0001492426 us-gaap:TreasuryStockMember 2019-12-31 0001492426 us-gaap:AdditionalPaidInCapitalMember 2019-12-31 0001492426 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-12-31 0001492426 us-gaap:RetainedEarningsMember 2019-12-31 0001492426 us-gaap:CommonStockMember 2020-01-01 2020-03-31 0001492426 us-gaap:AdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0001492426 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-01-01 2020-03-31 0001492426 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0001492426 us-gaap:CommonStockMember 2020-03-31 0001492426 us-gaap:TreasuryStockMember 2020-03-31 0001492426 us-gaap:AdditionalPaidInCapitalMember 2020-03-31 0001492426 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2020-03-31 0001492426 us-gaap:RetainedEarningsMember 2020-03-31 0001492426 us-gaap:CommonStockMember 2018-12-31 0001492426 us-gaap:TreasuryStockMember 2018-12-31 0001492426 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0001492426 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0001492426 us-gaap:RetainedEarningsMember 2018-12-31 0001492426 2018-12-31 0001492426 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0001492426 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0001492426 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0001492426 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0001492426 us-gaap:CommonStockMember 2019-03-31 0001492426 us-gaap:TreasuryStockMember 2019-03-31 0001492426 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0001492426 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0001492426 us-gaap:RetainedEarningsMember 2019-03-31 0001492426 2019-03-31 0001492426 hznp:AccruedTradeDiscountsAndRebatesMember 2020-01-01 2020-03-31 0001492426 us-gaap:AllowanceForUncollectibleCustomersLiabilityForAcceptancesMember 2020-01-01 2020-03-31 0001492426 hznp:OutOfPeriodAdjustmentsMember 2020-01-01 2020-03-31 hznp:Segment 0001492426 us-gaap:BuildingMember 2020-01-01 2020-03-31 0001492426 us-gaap:MachineryAndEquipmentMember srt:MinimumMember 2020-01-01 2020-03-31 0001492426 us-gaap:MachineryAndEquipmentMember srt:MaximumMember 2020-01-01 2020-03-31 0001492426 us-gaap:FurnitureAndFixturesMember srt:MinimumMember 2020-01-01 2020-03-31 0001492426 us-gaap:FurnitureAndFixturesMember srt:MaximumMember 2020-01-01 2020-03-31 0001492426 us-gaap:ComputerEquipmentMember 2020-01-01 2020-03-31 0001492426 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2020-01-01 2020-03-31 0001492426 hznp:TradeshowEquipmentMember 2020-01-01 2020-03-31 0001492426 us-gaap:StockCompensationPlanMember 2020-01-01 2020-03-31 0001492426 us-gaap:StockCompensationPlanMember 2019-01-01 2019-03-31 0001492426 hznp:ExchangeableSeniorNotesMember 2020-01-01 2020-03-31 xbrli:pure 0001492426 hznp:ExchangeableSeniorNotesMember 2020-03-31 0001492426 hznp:CosettePharmaceuticalsIncMember us-gaap:DisposalGroupNotDiscontinuedOperationsMember 2019-06-28 2019-06-28 0001492426 hznp:CosettePharmaceuticalsIncMember us-gaap:DisposalGroupNotDiscontinuedOperationsMember hznp:MIGERGOTTransactionMember 2019-06-28 2019-06-28 0001492426 us-gaap:DisposalGroupNotDiscontinuedOperationsMember hznp:MIGERGOTTransactionMember 2019-01-01 2019-12-31 0001492426 hznp:RiverVisionDevelopmentCorpMember 2017-05-08 0001492426 hznp:RiverVisionDevelopmentCorpMember 2017-05-07 2017-05-08 0001492426 hznp:RiverVisionDevelopmentCorpMember 2020-03-31 0001492426 hznp:RiverVisionDevelopmentCorpMember hznp:USFoodAndDrugAdministrationFDAApprovalMember 2020-03-31 0001492426 hznp:RiverVisionDevelopmentCorpMember hznp:NetSalesThresholdsMember hznp:TeprotumumabMember 2020-03-31 0001492426 hznp:RiverVisionDevelopmentCorpMember 2020-01-01 2020-03-31 iso4217:CHF 0001492426 hznp:RocheMember 2020-01-01 2020-03-31 iso4217:USD iso4217:CHF 0001492426 hznp:RocheMember 2020-03-31 0001492426 hznp:HemoShearTherapeuticsLimitedLiabilityCompanyMember 2019-01-03 0001492426 hznp:HemoShearTherapeuticsLimitedLiabilityCompanyMember 2019-07-01 2019-07-31 0001492426 us-gaap:BuildingMember 2020-03-31 0001492426 us-gaap:LandMember 2020-03-31 0001492426 us-gaap:LeaseholdImprovementsMember 2020-03-31 0001492426 us-gaap:LeaseholdImprovementsMember 2019-12-31 0001492426 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2020-03-31 0001492426 us-gaap:SoftwareAndSoftwareDevelopmentCostsMember 2019-12-31 0001492426 us-gaap:MachineryAndEquipmentMember 2020-03-31 0001492426 us-gaap:MachineryAndEquipmentMember 2019-12-31 0001492426 us-gaap:ComputerEquipmentMember 2020-03-31 0001492426 us-gaap:ComputerEquipmentMember 2019-12-31 0001492426 us-gaap:ConstructionInProgressMember 2020-03-31 0001492426 us-gaap:ConstructionInProgressMember 2019-12-31 0001492426 us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember 2020-03-31 0001492426 us-gaap:OtherCapitalizedPropertyPlantAndEquipmentMember 2019-12-31 0001492426 hznp:DeerfieldIllinoisMember 2020-02-01 2020-02-26 hznp:Building 0001492426 hznp:DeerfieldIllinoisMember 2020-02-26 utr:acre utr:sqft 0001492426 hznp:InflammationMember 2020-01-01 2020-03-31 0001492426 hznp:OrphanMember 2020-01-01 2020-03-31 0001492426 hznp:OrphanMember 2020-03-31 0001492426 hznp:InflammationMember 2020-03-31 0001492426 us-gaap:DevelopedTechnologyRightsMember hznp:TEPEZZAMember 2020-01-01 2020-03-31 0001492426 us-gaap:DevelopedTechnologyRightsMember us-gaap:DisposalGroupNotDiscontinuedOperationsMember hznp:MIGERGOTTransactionMember 2019-01-01 2019-12-31 0001492426 hznp:AccruedGovernmentRebatesAndChargeBacksMember 2020-03-31 0001492426 hznp:AccruedGovernmentRebatesAndChargeBacksMember 2019-12-31 0001492426 hznp:AccruedCoPayAndOtherPatientAssistanceMember 2020-03-31 0001492426 hznp:AccruedCoPayAndOtherPatientAssistanceMember 2019-12-31 0001492426 hznp:AccruedCommercialRebatesAndWholesalerFeesMember 2020-03-31 0001492426 hznp:AccruedCommercialRebatesAndWholesalerFeesMember 2019-12-31 0001492426 hznp:AccruedTradeDiscountsAndRebatesMember 2020-03-31 0001492426 hznp:AccruedTradeDiscountsAndRebatesMember 2019-12-31 0001492426 hznp:InvoicedWholesalerFeesAndCommercialRebatesCoPayAndOtherPatientAssistanceCostsAndGovernmentRebatesAndChargebacksInAccountsPayableMember 2020-03-31 0001492426 hznp:InvoicedWholesalerFeesAndCommercialRebatesCoPayAndOtherPatientAssistanceCostsAndGovernmentRebatesAndChargebacksInAccountsPayableMember 2019-12-31 0001492426 us-gaap:AllowanceForUncollectibleCustomersLiabilityForAcceptancesMember 2020-03-31 0001492426 us-gaap:AllowanceForUncollectibleCustomersLiabilityForAcceptancesMember 2019-12-31 0001492426 hznp:WholesalerFeesAndCommercialRebatesMember 2019-12-31 0001492426 hznp:CoPayAndOtherPatientAssistanceMember 2019-12-31 0001492426 hznp:GovernmentRebatesAndChargeBacksMember 2019-12-31 0001492426 hznp:WholesalerFeesAndCommercialRebatesMember 2020-01-01 2020-03-31 0001492426 hznp:CoPayAndOtherPatientAssistanceMember 2020-01-01 2020-03-31 0001492426 hznp:GovernmentRebatesAndChargeBacksMember 2020-01-01 2020-03-31 0001492426 hznp:WholesalerFeesAndCommercialRebatesMember 2020-03-31 0001492426 hznp:CoPayAndOtherPatientAssistanceMember 2020-03-31 0001492426 hznp:GovernmentRebatesAndChargeBacksMember 2020-03-31 0001492426 hznp:KRYSTEXXAMember 2020-01-01 2020-03-31 0001492426 hznp:KRYSTEXXAMember 2019-01-01 2019-03-31 0001492426 hznp:RAVICTIMember 2020-01-01 2020-03-31 0001492426 hznp:RAVICTIMember 2019-01-01 2019-03-31 0001492426 hznp:PROCYSBIMember 2020-01-01 2020-03-31 0001492426 hznp:PROCYSBIMember 2019-01-01 2019-03-31 0001492426 hznp:ActimmuneMember 2020-01-01 2020-03-31 0001492426 hznp:ActimmuneMember 2019-01-01 2019-03-31 0001492426 hznp:TEPEZZAMember 2020-01-01 2020-03-31 0001492426 hznp:BUPHENYLMember 2020-01-01 2020-03-31 0001492426 hznp:BUPHENYLMember 2019-01-01 2019-03-31 0001492426 hznp:QUINSAIRMember 2020-01-01 2020-03-31 0001492426 hznp:QUINSAIRMember 2019-01-01 2019-03-31 0001492426 hznp:OrphanSegmentNetSalesMember 2020-01-01 2020-03-31 0001492426 hznp:OrphanSegmentNetSalesMember 2019-01-01 2019-03-31 0001492426 hznp:PENNSAIDTwoPercentMember 2020-01-01 2020-03-31 0001492426 hznp:PENNSAIDTwoPercentMember 2019-01-01 2019-03-31 0001492426 hznp:DUEXISProductMember 2020-01-01 2020-03-31 0001492426 hznp:DUEXISProductMember 2019-01-01 2019-03-31 0001492426 hznp:VimovoMember 2020-01-01 2020-03-31 0001492426 hznp:VimovoMember 2019-01-01 2019-03-31 0001492426 hznp:RAYOSMember 2020-01-01 2020-03-31 0001492426 hznp:RAYOSMember 2019-01-01 2019-03-31 0001492426 hznp:MIGERGOTMember 2019-01-01 2019-03-31 0001492426 hznp:InflammationMember 2020-01-01 2020-03-31 0001492426 hznp:InflammationMember 2019-01-01 2019-03-31 0001492426 hznp:OrphanMember 2019-01-01 2019-03-31 0001492426 hznp:InflammationMember 2019-01-01 2019-03-31 0001492426 us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember srt:MinimumMember 2020-01-01 2020-03-31 0001492426 hznp:CustomerAMember 2020-01-01 2020-03-31 0001492426 hznp:CustomerBMember 2020-01-01 2020-03-31 0001492426 hznp:CustomerCMember 2020-01-01 2020-03-31 0001492426 hznp:CustomerDMember 2020-01-01 2020-03-31 0001492426 hznp:OtherCustomersMember 2020-01-01 2020-03-31 0001492426 hznp:CustomerAMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-03-31 0001492426 hznp:CustomerBMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-03-31 0001492426 hznp:CustomerCMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-03-31 0001492426 hznp:CustomerDMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-03-31 0001492426 hznp:OtherCustomersMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-03-31 0001492426 us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-03-31 0001492426 hznp:CustomerAMember 2019-01-01 2019-03-31 0001492426 hznp:CustomerBMember 2019-01-01 2019-03-31 0001492426 hznp:CustomerCMember 2019-01-01 2019-03-31 0001492426 hznp:CustomerDMember 2019-01-01 2019-03-31 0001492426 hznp:OtherCustomersMember 2019-01-01 2019-03-31 0001492426 hznp:CustomerAMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-03-31 0001492426 hznp:CustomerBMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-03-31 0001492426 hznp:CustomerCMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-03-31 0001492426 hznp:CustomerDMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-03-31 0001492426 hznp:OtherCustomersMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-03-31 0001492426 us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-03-31 0001492426 country:US 2020-01-01 2020-03-31 0001492426 us-gaap:NonUsMember 2020-01-01 2020-03-31 0001492426 country:US us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2020-01-01 2020-03-31 0001492426 country:US 2019-01-01 2019-03-31 0001492426 us-gaap:NonUsMember 2019-01-01 2019-03-31 0001492426 country:US us-gaap:GeographicConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2019-01-01 2019-03-31 0001492426 us-gaap:MoneyMarketFundsMember us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001492426 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001492426 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherCurrentAssetsMember 2020-03-31 0001492426 us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherCurrentAssetsMember 2020-03-31 0001492426 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001492426 us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0001492426 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherNoncurrentLiabilitiesMember 2020-03-31 0001492426 us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherNoncurrentLiabilitiesMember 2020-03-31 0001492426 us-gaap:MoneyMarketFundsMember us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001492426 us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherCurrentAssetsMember 2019-12-31 0001492426 us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0001492426 us-gaap:FairValueMeasurementsRecurringMember us-gaap:OtherNoncurrentLiabilitiesMember 2019-12-31 0001492426 hznp:TermLoanFacilityDueTwentyTwentySixMember 2020-03-31 0001492426 hznp:TermLoanFacilityDueTwentyTwentySixMember 2019-12-31 0001492426 hznp:SeniorNotesDueTwentyTwentySevenMember 2020-03-31 0001492426 hznp:SeniorNotesDueTwentyTwentySevenMember 2019-12-31 0001492426 hznp:ExchangeableSeniorNotesDueTwentyTwentyTwoMember 2020-03-31 0001492426 hznp:ExchangeableSeniorNotesDueTwentyTwentyTwoMember 2019-12-31 0001492426 hznp:TermLoanFacilityDueTwentyTwentySixMember 2020-01-01 2020-03-31 0001492426 hznp:SeniorNotesDueTwentyTwentySevenMember 2020-01-01 2020-03-31 0001492426 hznp:ExchangeableSeniorNotesDueTwentyTwentyTwoMember 2020-01-01 2020-03-31 0001492426 hznp:HorizonPharmaUSAIncMember hznp:MayTwoThousandNineteenRefinancingLoansMember 2019-12-18 0001492426 hznp:HorizonPharmaUSAIncMember hznp:NewIncrementalRevolvingCommitmentsMember 2019-03-11 0001492426 hznp:HorizonPharmaUSAIncMember hznp:LetterOfCreditSubFacilityMember 2019-03-11 0001492426 hznp:HorizonPharmaUSAIncMember hznp:NewIncrementalRevolvingCommitmentsMember 2019-03-11 2019-03-11 0001492426 hznp:TwoThousandNineteenTermLoanFacilityMember 2019-12-18 0001492426 hznp:TwoThousandNineteenTermLoanFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-12-18 2019-12-18 0001492426 hznp:TwoThousandNineteenTermLoanFacilityMember us-gaap:BaseRateMember 2019-12-18 2019-12-18 0001492426 hznp:TwoThousandNineteenTermLoanFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember us-gaap:ScenarioPlanMember 2019-12-18 2019-12-18 0001492426 hznp:TwoThousandNineteenTermLoanFacilityMember us-gaap:BaseRateMember us-gaap:ScenarioPlanMember 2019-12-18 2019-12-18 0001492426 hznp:TwoThousandNineteenTermLoanFacilityMember srt:MinimumMember 2019-12-18 2019-12-18 0001492426 hznp:TwoThousandNineteenTermLoanFacilityMember srt:MaximumMember 2019-12-18 2019-12-18 0001492426 hznp:TwoThousandNineteenTermLoanFacilityMember 2020-01-01 2020-03-31 0001492426 hznp:RefinancingLoansMember 2019-12-18 2019-12-18 0001492426 us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember 2019-12-18 2019-12-18 0001492426 us-gaap:RevolvingCreditFacilityMember 2019-12-18 0001492426 us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember 2019-12-18 2019-12-18 0001492426 us-gaap:RevolvingCreditFacilityMember us-gaap:LondonInterbankOfferedRateLIBORMember us-gaap:ScenarioPlanMember 2019-12-18 2019-12-18 0001492426 us-gaap:RevolvingCreditFacilityMember us-gaap:BaseRateMember us-gaap:ScenarioPlanMember 2019-12-18 2019-12-18 0001492426 us-gaap:RevolvingCreditFacilityMember 2020-01-01 2020-03-31 0001492426 hznp:TwoThousandNineteenTermLoanFacilityMember hznp:HorizonPharmaSubsidiariesMember 2019-12-18 2019-12-18 0001492426 hznp:CreditAgreementMember 2018-06-01 2018-06-30 0001492426 hznp:TermLoanFacilityMember hznp:CreditAgreementMember 2019-03-18 2019-03-18 0001492426 hznp:TermLoanFacilityMember hznp:CreditAgreementMember 2020-03-31 0001492426 hznp:TermLoanFacilityMember hznp:CreditAgreementMember 2019-07-01 2019-07-31 0001492426 hznp:CreditAgreementMember hznp:MandatoryPrepaymentProvisionsMember 2019-03-01 2019-03-31 0001492426 hznp:TwoThousandNineteenTermLoanFacilityMember 2019-12-18 2019-12-18 0001492426 us-gaap:RevolvingCreditFacilityMember 2020-03-31 0001492426 hznp:TermLoanFacilityMember 2020-03-31 0001492426 hznp:HyperionTherapeuticsIncMember hznp:TermLoanFacilityMember hznp:UnderwrittenPublicOfferingMember 2020-03-31 0001492426 hznp:HorizonPharmaUSAIncMember hznp:TwentyTwentySevenSeniorNotesMember 2019-07-16 0001492426 hznp:TwentyTwentySevenSeniorNotesMember 2019-07-16 0001492426 2019-07-16 0001492426 hznp:TwentyTwentyThreeSeniorNotesMember 2019-07-16 0001492426 hznp:TwentyTwentyFourSeniorNotesMember 2019-07-16 0001492426 hznp:SeniorSecuredTermLoansMember 2019-07-16 0001492426 hznp:TwentyTwentySevenSeniorNotesMember 2020-01-01 2020-03-31 0001492426 hznp:TwentyTwentySevenSeniorNotesMember hznp:HorizonPharmaUSAIncMember 2019-07-16 2019-07-16 0001492426 hznp:TwentyTwentySevenSeniorNotesMember hznp:DebtInstrumentRedemptionUpToFortyPercentMember 2019-07-16 2019-07-16 0001492426 hznp:TwentyTwentySevenSeniorNotesMember hznp:DebtInstrumentRedemptionSomeOrAllMember 2019-07-16 2019-07-16 0001492426 hznp:TwentyTwentySevenSeniorNotesMember hznp:DebtInstrumentRedemptionInWholeButNotInPartMember 2019-07-16 2019-07-16 0001492426 hznp:TwentyTwentySevenSeniorNotesMember srt:MaximumMember hznp:DebtInstrumentRedemptionUpToFortyPercentMember 2019-07-16 2019-07-16 0001492426 hznp:TwentyTwentySevenSeniorNotesMember hznp:HorizonPharmaUSAIncMember 2020-01-01 2020-03-31 0001492426 hznp:TwentyTwentySevenSeniorNotesMember 2020-03-31 0001492426 srt:SubsidiariesMember hznp:ExchangeableSeniorNotesMember 2015-03-13 0001492426 srt:SubsidiariesMember hznp:ExchangeableSeniorNotesMember 2020-01-01 2020-03-31 utr:D 0001492426 hznp:ExchangeableSeniorNotesMember hznp:ConversionConditionOneMember 2020-01-01 2020-03-31 0001492426 hznp:ExchangeableSeniorNotesMember hznp:ConversionConditionTwoMember 2020-01-01 2020-03-31 0001492426 hznp:ExchangeableSeniorNotesMember hznp:ConversionConditionTwoMember 2020-03-31 0001492426 hznp:ExchangeableSeniorNotesMember us-gaap:FairValueInputsLevel2Member 2020-03-31 0001492426 hznp:DublinOfficeMember 2020-03-31 0001492426 hznp:LakeForestOfficeMember 2020-03-31 0001492426 hznp:NovatoOfficeMember 2020-03-31 0001492426 hznp:SouthSanFranciscoOfficeMember 2020-03-31 0001492426 hznp:ChicagoOfficeMember 2020-03-31 0001492426 hznp:MannheimOfficeMember 2020-03-31 0001492426 hznp:OtherOfficeMember 2020-03-31 0001492426 hznp:DublinOfficeMember 2020-01-01 2020-03-31 0001492426 hznp:LakeForestOfficeMember 2020-01-01 2020-03-31 0001492426 hznp:NovatoOfficeMember 2020-01-01 2020-03-31 0001492426 hznp:SouthSanFranciscoOfficeMember 2020-01-01 2020-03-31 0001492426 hznp:ChicagoOfficeMember 2020-01-01 2020-03-31 0001492426 hznp:MannheimOfficeMember 2020-01-01 2020-03-31 0001492426 hznp:OtherOfficeMember srt:MinimumMember 2020-01-01 2020-03-31 0001492426 hznp:OtherOfficeMember srt:MaximumMember 2020-01-01 2020-03-31 0001492426 hznp:DublinOfficeMember 2019-10-14 iso4217:EUR 0001492426 hznp:AGCBiologicsASMember hznp:TEPEZZADrugSubstanceMember 2020-01-01 2020-03-31 iso4217:USD iso4217:EUR 0001492426 hznp:AGCBiologicsASMember hznp:TEPEZZADrugSubstanceMember 2020-03-31 0001492426 hznp:CatalentIndianaLLCMember hznp:TEPEZZADrugProductMember 2020-01-01 2020-03-31 0001492426 hznp:PROCYSBIMember hznp:PatheonUSAMember 2020-01-01 2020-03-31 0001492426 hznp:PROCYSBIAPIMember hznp:CambrexProfarmacoMilanoMember 2020-01-01 2020-03-31 0001492426 hznp:BoehringerIngelheimMember hznp:ActimmuneMember 2020-01-01 2020-03-31 0001492426 hznp:BoehringerIngelheimMember hznp:ActimmuneMember 2020-03-31 0001492426 hznp:BioTechnologyGeneralIsraelLtdMember srt:MinimumMember hznp:KRYSTEXXAMember 2020-01-01 2020-03-31 0001492426 hznp:BioTechnologyGeneralIsraelLtdMember hznp:KRYSTEXXAMember 2020-01-01 2020-03-31 0001492426 hznp:BioTechnologyGeneralIsraelLtdMember hznp:KRYSTEXXAMember 2020-03-31 0001492426 hznp:PENNSAIDTwoPercentMember hznp:NuvoPharmaceuticalsIncMember 2020-01-01 2020-03-31 0001492426 hznp:DUEXISProductMember hznp:SanofiAventisMember 2020-01-01 2020-03-31 0001492426 hznp:RavictiAndBuphenylAndRayosAndQuinsairMember 2020-03-31 0001492426 hznp:RiverVisionDevelopmentCorpMember hznp:FDAApprovalMember 2020-03-31 0001492426 hznp:RiverVisionDevelopmentCorpMember hznp:FDAApprovalMember 2020-01-01 2020-03-31 0001492426 hznp:RiverVisionDevelopmentCorpMember hznp:NetSalesThresholdsMember hznp:TeprotumumabMember hznp:ScenarioOneMember 2020-03-31 0001492426 hznp:RiverVisionDevelopmentCorpMember hznp:NetSalesThresholdsMember hznp:TeprotumumabMember hznp:ScenarioTwoMember 2020-03-31 0001492426 hznp:RiverVisionDevelopmentCorpMember hznp:NetSalesThresholdsMember hznp:TeprotumumabMember hznp:ScenarioThreeMember 2020-03-31 0001492426 us-gaap:SubsequentEventMember hznp:SROneMember 2020-04-01 2020-04-30 0001492426 us-gaap:SubsequentEventMember hznp:LundbeckfondMember 2020-04-01 2020-04-30 0001492426 srt:ScenarioForecastMember hznp:TEPEZZADevelopedTechnologyMember hznp:SROneAndLundbeckfondMember 2020-04-01 2020-06-30 0001492426 hznp:RiverVisionDevelopmentCorpMember hznp:SROneAndLundbeckfondMember us-gaap:SubsequentEventMember 2020-04-01 2020-04-30 0001492426 hznp:TEPEZZAMember hznp:RocheMember 2020-03-31 0001492426 hznp:TEPEZZAMember hznp:RocheMember 2017-01-01 2017-12-31 0001492426 hznp:TEPEZZAMember hznp:RocheMember 2017-12-31 0001492426 srt:MinimumMember hznp:RocheMember 2020-01-01 2020-03-31 0001492426 srt:MaximumMember hznp:RocheMember 2020-01-01 2020-03-31 0001492426 hznp:TEPEZZAMember hznp:RocheMember 2019-01-01 2019-12-31 0001492426 hznp:TEPEZZAMember hznp:RocheMember 2019-12-31 0001492426 srt:MaximumMember hznp:LundquistInstituteMember 2020-01-01 2020-03-31 hznp:Patent 0001492426 2015-09-17 2015-09-17 0001492426 2016-02-05 2016-02-05 0001492426 hznp:TwoThousandFourteenEmployeeSharePurchasePlanMember 2020-03-31 0001492426 hznp:TwoThousandFourteenEquityIncentivePlanMember 2020-03-31 0001492426 hznp:TwoThousandFourteenNonEmployeeStockPurchasePlanMember 2020-03-31 0001492426 hznp:TwoThousandFourteenEquityIncentivePlanMember 2020-02-19 2020-02-19 0001492426 hznp:TwoThousandFourteenEmployeeSharePurchasePlanMember 2020-02-19 2020-02-19 0001492426 2019-01-01 2019-12-31 0001492426 us-gaap:RestrictedStockUnitsRSUMember 2019-12-31 0001492426 us-gaap:RestrictedStockUnitsRSUMember 2020-01-01 2020-03-31 0001492426 us-gaap:RestrictedStockUnitsRSUMember 2020-03-31 0001492426 us-gaap:PerformanceSharesMember 2019-12-31 0001492426 us-gaap:PerformanceSharesMember 2020-01-01 2020-03-31 0001492426 us-gaap:PerformanceSharesMember 2020-03-31 0001492426 us-gaap:PerformanceSharesMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2019-01-01 2019-12-31 0001492426 us-gaap:PerformanceSharesMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2019-01-01 2019-12-31 0001492426 us-gaap:PerformanceSharesMember us-gaap:ShareBasedCompensationAwardTrancheOneMember 2020-01-01 2020-03-31 0001492426 us-gaap:PerformanceSharesMember us-gaap:ShareBasedCompensationAwardTrancheTwoMember 2020-01-01 2020-03-31 0001492426 us-gaap:PerformanceSharesMember srt:MinimumMember 2020-01-01 2020-03-31 0001492426 us-gaap:PerformanceSharesMember srt:MaximumMember 2020-01-01 2020-03-31 0001492426 hznp:TEPEZZAMember us-gaap:PerformanceSharesMember 2020-03-31 0001492426 hznp:TEPEZZAMember us-gaap:PerformanceSharesMember hznp:MembersOfExecutiveCommitteeMember 2020-03-30 2020-03-31 0001492426 hznp:TEPEZZAMember us-gaap:PerformanceSharesMember 2020-03-30 2020-03-31 0001492426 us-gaap:CostOfSalesMember 2020-01-01 2020-03-31 0001492426 us-gaap:CostOfSalesMember 2019-01-01 2019-03-31 0001492426 us-gaap:ResearchAndDevelopmentExpenseMember 2020-01-01 2020-03-31 0001492426 us-gaap:ResearchAndDevelopmentExpenseMember 2019-01-01 2019-03-31 0001492426 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2020-01-01 2020-03-31 0001492426 us-gaap:SellingGeneralAndAdministrativeExpensesMember 2019-01-01 2019-03-31 0001492426 us-gaap:DeferredBonusMember 2018-01-05 0001492426 us-gaap:DeferredBonusMember 2020-01-01 2020-03-31 0001492426 us-gaap:DeferredBonusMember 2019-01-01 2019-03-31 0001492426 hznp:CurzionPharmaceuticalsIncMember us-gaap:SubsequentEventMember 2020-04-01 2020-04-01 0001492426 hznp:CurzionPharmaceuticalsIncMember srt:ScenarioForecastMember 2020-04-01 2020-06-30 0001492426 srt:ScenarioForecastMember 2020-04-01 2020-06-30

nte

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(MARK ONE)

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

For the quarterly period ended March 31, 2020

OR

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

For the transition period from              to             

Commission File Number 001-35238

 

HORIZON THERAPEUTICS PUBLIC LIMITED COMPANY

(Exact name of registrant as specified in its charter)

 

 

Ireland

 

Not Applicable

(State or other jurisdiction

of incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

 

 

Connaught House, 1st Floor

1 Burlington Road, Dublin 4, D04 C5Y6, Ireland

 

Not Applicable

(Address of principal executive offices)

 

(Zip Code)

011 353 1 772 2100

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

 

 

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

 

Title of each class

Trading Symbol

Name of each exchange on which registered

Ordinary shares, nominal value $0.0001 per share

HZNP

The Nasdaq Global Select Market

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

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

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

 

Large accelerated filer

Accelerated filer

 

 

 

 

Non-accelerated filer

  

Smaller reporting company

 

 

 

 

Emerging growth company

 

 

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

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

Number of registrant’s ordinary shares, nominal value $0.0001, outstanding as of May 1, 2020: 190,778,387

 

 

 


                                                                        HORIZON THERAPEUTICS PLC

INDEX

 

 

 

 

 

Page

 

 

 

No.

PART I. FINANCIAL INFORMATION

 

 

Item 1.

Financial Statements

 

1

 

Condensed Consolidated Balance Sheets as of March 31, 2020 and as of December 31, 2019 (Unaudited)

 

1

 

Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2020 and 2019 (Unaudited)

 

2

 

Condensed Consolidated Statements of Shareholders’ Equity for the Three Months Ended March 31, 2020 and 2019 (Unaudited)

 

3

 

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019 (Unaudited)

 

4

 

Notes to Unaudited Condensed Consolidated Financial Statements

 

5

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

29

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

43

Item 4.

Controls and Procedures

 

43

PART II. OTHER INFORMATION

 

 

Item 1.

Legal Proceedings

 

44

Item 1A.

Risk Factors

 

44

Item 6.

Exhibits

 

88

 

Signatures

 

90

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HORIZON THERAPEUTICS PLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(In thousands, except share data)

 

 

As of

 

As of

 

 

March 31,

 

December 31,

 

 

2020

 

2019

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

$

754,638

 

$

1,076,287

 

Restricted cash

 

3,624

 

 

3,752

 

Accounts receivable, net

 

425,405

 

 

408,685

 

Inventories, net

 

68,170

 

 

53,802

 

Prepaid expenses and other current assets

 

161,903

 

 

143,577

 

Total current assets

 

1,413,740

 

 

1,686,103

 

Property and equipment, net

 

142,420

 

 

30,159

 

Developed technology, net

 

1,745,625

 

 

1,698,808

 

Other intangible assets, net

 

3,619

 

 

3,820

 

Goodwill

 

413,669

 

 

413,669

 

Deferred tax assets, net

 

552,722

 

 

555,165

 

Other assets

 

42,925

 

 

48,310

 

Total assets

$

4,314,720

 

$

4,436,034

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable

$

50,124

 

$

21,514

 

Accrued expenses

 

205,988

 

 

235,234

 

Accrued trade discounts and rebates

 

336,320

 

 

466,421

 

Total current liabilities

 

592,432

 

 

723,169

 

LONG-TERM LIABILITIES:

 

 

 

 

 

 

Exchangeable notes, net

 

356,551

 

 

351,533

 

Long-term debt, net

 

1,001,809

 

 

1,001,308

 

Deferred tax liabilities, net

 

89,721

 

 

94,247

 

Other long-term liabilities

 

85,868

 

 

80,328

 

Total long-term liabilities

 

1,533,949

 

 

1,527,416

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY:

 

 

 

 

 

 

Ordinary shares, $0.0001 nominal value; 600,000,000 shares authorized at March 31, 2020 and December 31, 2019; 190,962,613 and 188,402,040 shares issued at March 31, 2020 and December 31, 2019, respectively, and 190,578,247 and 188,017,674 shares outstanding at March 31, 2020 and December 31, 2019, respectively

 

19

 

 

19

 

Treasury stock, 384,366 ordinary shares at March 31, 2020 and December 31, 2019

 

(4,585

)

 

(4,585

)

Additional paid-in capital

 

2,814,408

 

 

2,797,602

 

Accumulated other comprehensive loss

 

(2,230

)

 

(1,905

)

Accumulated deficit

 

(619,273

)

 

(605,682

)

Total shareholders’ equity

 

2,188,339

 

 

2,185,449

 

Total liabilities and shareholders' equity

$

4,314,720

 

$

4,436,034

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

1


HORIZON THERAPEUTICS PLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(UNAUDITED)

(In thousands, except share and per share data)

 

 

 

For the Three Months Ended March 31,

 

 

 

2020

 

 

2019

 

 

Net sales

$

355,909

 

 

$

280,371

 

 

Cost of goods sold

 

97,416

 

 

 

88,142

 

 

Gross profit

 

258,493

 

 

 

192,229

 

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

Research and development

 

27,209

 

 

 

21,725

 

 

Selling, general and administrative

 

247,775

 

 

 

172,299

 

 

Total operating expenses

 

274,984

 

 

 

194,024

 

 

Operating loss

 

(16,491

)

 

 

(1,795

)

 

OTHER EXPENSE, NET:

 

 

 

 

 

 

 

 

Interest expense, net

 

(17,344

)

 

 

(27,530

)

 

Loss on debt extinguishment

 

 

 

 

(5,586

)

 

Foreign exchange gain (loss)

 

776

 

 

 

(61

)

 

Other income, net

 

442

 

 

 

189

 

 

Total other expense, net

 

(16,126

)

 

 

(32,988

)

 

Loss before benefit for income taxes

 

(32,617

)

 

 

(34,783

)

 

Benefit for income taxes

 

(19,026

)

 

 

(1,920

)

 

Net loss

$

(13,591

)

 

$

(32,863

)

 

Net loss per ordinary share—basic and diluted

$

(0.07

)

 

$

(0.19

)

 

Weighted average ordinary shares outstanding—basic and diluted

 

190,072,112

 

 

 

172,789,209

 

 

OTHER COMPREHENSIVE LOSS, NET OF TAX

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

$

(325

)

 

$

(487

)

 

Other comprehensive loss

 

(325

)

 

 

(487

)

 

Comprehensive loss

$

(13,916

)

 

$

(33,350

)

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

2


 

HORIZON THERAPEUTICS PLC

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(UNAUDITED)

(In thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated Other

 

 

 

 

 

 

Total

 

 

 

Ordinary Shares

 

 

Treasury Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2019

 

 

188,402,040

 

 

$

19

 

 

 

384,366

 

 

$

(4,585

)

 

$

2,797,602

 

 

$

(1,905

)

 

$

(605,682

)

 

$

2,185,449

 

Issuance of ordinary shares in conjunction with vesting of restricted stock

   units, performance stock units and stock option exercises

 

 

2,560,573

 

 

 

 

 

 

 

 

 

 

 

 

7,049

 

 

 

 

 

 

 

 

 

7,049

 

Ordinary shares withheld for payment of employees’ withholding tax liability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(46,664

)

 

 

 

 

 

 

 

 

(46,664

)

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

56,421

 

 

 

 

 

 

 

 

 

56,421

 

Currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(325

)

 

 

 

 

 

(325

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,591

)

 

 

(13,591

)

Balances at March 31, 2020

 

 

190,962,613

 

 

$

19

 

 

 

384,366

 

 

$

(4,585

)

 

$

2,814,408

 

 

$

(2,230

)

 

$

(619,273

)

 

$

2,188,339

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Accumulated Other

 

 

 

 

 

 

Total

 

 

 

Ordinary Shares

 

 

Treasury Stock

 

 

Paid-in

 

 

Comprehensive

 

 

Accumulated

 

 

Shareholders’

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Loss

 

 

Deficit

 

 

Equity

 

Balances at December 31, 2018

 

 

169,244,520

 

 

$

17

 

 

 

384,366

 

 

$

(4,585

)

 

$

2,374,966

 

 

$

(1,523

)

 

$

(1,178,769

)

 

$

1,190,106

 

Cumulative effect adjustments from adoption of ASU 2016-02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

64

 

 

 

64

 

Issuance of ordinary shares - public offering

 

 

14,081,632

 

 

 

1

 

 

 

 

 

 

 

 

 

326,848

 

 

 

 

 

 

 

 

 

326,849

 

Issuance of ordinary shares in conjunction with vesting of restricted stock

   units and stock option exercises

 

 

1,804,196

 

 

 

 

 

 

 

 

 

 

 

 

10,042

 

 

 

 

 

 

 

 

 

10,042

 

Ordinary shares withheld for payment of employees’ withholding tax liability

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(17,171

)

 

 

 

 

 

 

 

 

(17,171

)

Share-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,548

 

 

 

 

 

 

 

 

 

27,548

 

Currency translation adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(487

)

 

 

 

 

 

(487

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(32,863

)

 

 

(32,863

)

Balances at March 31, 2019

 

 

185,130,348

 

 

$

18

 

 

 

384,366

 

 

$

(4,585

)

 

$

2,722,233

 

 

$

(2,010

)

 

$

(1,211,568

)

 

$

1,504,088

 

 

The accompanying notes are an integral part of these condensed consolidated financial statements.

 

                

 

3


 

HORIZON THERAPEUTICS PLC

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(In thousands)  

 

For the Three Months Ended March 31,

 

 

2020

 

 

2019

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net loss

$

(13,591

)

 

$

(32,863

)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization expense

 

65,741

 

 

 

58,891

 

Equity-settled share-based compensation

 

56,421

 

 

 

27,548

 

Amortization of debt discount and deferred financing costs

 

5,569

 

 

 

5,851

 

Loss on debt extinguishment

 

 

 

 

5,586

 

Deferred income taxes

 

(2,082

)

 

 

1,502

 

Foreign exchange and other adjustments

 

(190

)

 

 

404

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

Accounts receivable

 

(16,869

)

 

 

60,769

 

Inventories

 

(14,444

)

 

 

(847

)

Prepaid expenses and other current assets

 

(24,953

)

 

 

111

 

Accounts payable

 

28,551

 

 

 

6,416

 

Accrued trade discounts and rebates

 

(129,940

)

 

 

(50,904

)

Accrued expenses

 

(28,087

)

 

 

(21,336

)

Deferred revenues

 

 

 

 

(67

)

Other non-current assets and liabilities

 

11,281

 

 

 

(4,893

)

Net cash (used in) provided by operating activities

 

(62,593

)

 

 

56,168

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Payments for acquisition

 

(105,200

)

 

 

 

Purchases of property and equipment

 

(119,004

)

 

 

(1,849

)

Change in escrow deposit for property purchase

 

6,000

 

 

 

 

Net cash used in investing activities

 

(218,204

)

 

 

(1,849

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Proceeds from the issuance of ordinary shares in connection with stock option exercises

 

7,050

 

 

 

10,042

 

Payment of employee withholding taxes relating to share-based awards

 

(46,664

)

 

 

(17,171

)

Net proceeds from the issuance of ordinary shares

 

 

 

 

327,750

 

Repayment of term loans

 

 

 

 

(300,000

)

Net cash (used in) provided by financing activities

 

(39,614

)

 

 

20,621

 

Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash

 

(1,366

)

 

 

(518

)

Net (decrease) increase in cash, cash equivalents and restricted cash

 

(321,777

)

 

 

74,422

 

Cash, cash equivalents and restricted cash, beginning of the period

 

1,080,039

 

 

 

962,117

 

Cash, cash equivalents and restricted cash, end of the period

$

758,262

 

 

$

1,036,539

 

 

SUPPLEMENTAL CASH FLOW INFORMATION:

 

 

 

 

 

 

 

Cash paid for interest

$

26,636

 

 

$

15,842

 

Cash paid for income taxes, net of refunds received

 

266

 

 

 

856

 

Cash paid for amounts included in the measurement of lease liabilities

 

1,812

 

 

 

1,611

 

SUPPLEMENTAL NON-CASH FLOW INFORMATION:

 

 

 

 

 

 

 

Purchases of property and equipment included in accounts payable and accrued expenses

 

539

 

 

 

2,759

 

Transaction costs related to issuance of ordinary shares included in accrued expenses

 

 

 

 

902

 

      

The accompanying notes are an integral part of these condensed consolidated financial statements.

4


HORIZON THERAPEUTICS PLC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

 

NOTE 1 – BASIS OF PRESENTATION AND BUSINESS OVERVIEW

Basis of Presentation

The unaudited condensed consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, the financial statements do not include all of the information and notes required by GAAP for complete financial statements.  In the opinion of management, all adjustments, including normal recurring adjustments, considered necessary for a fair statement of the financial statements have been included.  Operating results for the three months ended March 31, 2020 are not necessarily indicative of the results that may be expected for the year ending December 31, 2020.  The December 31, 2019 condensed consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by GAAP.

Unless otherwise indicated or the context otherwise requires, references to “Horizon”, the “Company”, “we”, “us” and “our” refer to Horizon Therapeutics plc and its consolidated subsidiaries.

During the three months ended March 31, 2020, the Company recorded out of period adjustments that decreased income tax benefit by $3.2 million and increased share-based compensation expense by $1.9 million to correct for expenses that should have been recorded in the year ended December 31, 2019.  The Company evaluated the materiality of the adjustments on prior period financial statements and making the adjustments in the current period, and concluded the effect of the adjustments were immaterial to both the current and prior period financial statements.

Business Overview

Horizon is focused on researching, developing and commercializing medicines that address critical needs for people impacted by rare and rheumatic diseases.  The Company’s pipeline is purposeful: it applies scientific expertise and courage to bring clinically meaningful therapies to patients.  Horizon believes science and compassion must work together to transform lives. The Company has two reportable segments, the orphan segment and the inflammation segment, and currently markets eleven medicines in the areas of rare diseases, gout, ophthalmopathy and inflammation.   

Effective in the first quarter of 2020, the Company (i) reorganized its commercial operations and moved responsibility for and reporting of RAYOS® to the inflammation segment and (ii) renamed the orphan and rheumatology segment the orphan segment.  Net sales generated by TEPEZZA™, which was approved on January 21, 2020, are reported as part of the renamed orphan segment.

As of March 31, 2020, the Company’s marketed medicines consisted of the following:

 

Orphan

KRYSTEXXA® (pegloticase injection), for intravenous infusion

RAVICTI® (glycerol phenylbutyrate) oral liquid

PROCYSBI® (cysteamine bitartrate) delayed-release capsules, for oral use

ACTIMMUNE® (interferon gamma-1b) injection, for subcutaneous use

TEPEZZA (teprotumumab-trbw), for intravenous infusion

BUPHENYL® (sodium phenylbutyrate) Tablets and Powder

QUINSAIR™ (levofloxacin) solution for inhalation

Inflammation

PENNSAID® (diclofenac sodium topical solution) 2% w/w (“PENNSAID 2%”), for topical use

DUEXIS® (ibuprofen/famotidine) tablets, for oral use

RAYOS (prednisone) delayed-release tablets

VIMOVO® (naproxen/esomeprazole magnesium) delayed-release tablets, for oral use

 

 

 


5


NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Recent Accounting Pronouncements

From time to time, the Company adopts new accounting pronouncements issued by the Financial Accounting Standards Board (“FASB”) or other standard-setting bodies.

In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), which modifies the measurement of expected credit losses on certain financial instruments and became effective for the Company as of January 1, 2020.  The adoption of ASU 2016-13 did not have a material impact to the Company’s condensed consolidated financial statements and related disclosures.

In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplification and reduce the cost of accounting for income taxes (“ASU 2019-12”), which is effective for the Company as of January 1, 2021.  The Company is currently evaluating the impact of ASU 2019-12.

Other recent authoritative guidance issued by the FASB (including technical corrections to the Accounting Standards Codification (“ASC”)), the American Institute of Certified Public Accountants and the Securities and Exchange Commission (“SEC”) did not, or are not expected to, have a material impact on the Company’s condensed consolidated financial statements and related disclosures.

 

Significant Accounting Policies

The Company's significant accounting policies have not changed from those previously described in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, with the exception of the change to the accounting policy related to property and equipment due to the purchase of land and buildings as described below.

 

Property and Equipment

Land is stated at cost.  Property and equipment, other than land, are stated at cost less accumulated depreciation.  Depreciation is recognized using the straight-line method over the estimated useful lives of the related assets for financial reporting purposes and an accelerated method for income tax reporting purposes.  Upon retirement or sale of an asset, the cost and related accumulated depreciation and amortization are removed from the balance sheet and the resulting gain or loss is reflected in operations.  Repair and maintenance costs are charged to expenses as incurred and improvements are capitalized.

Leasehold improvements are amortized on a straight-line basis over the term of the applicable lease, or the useful life of the assets, whichever is shorter.

Depreciation and amortization periods for the Company’s property and equipment are as follows:

 

Buildings

 

40 years

Machinery and equipment

 

5 to 7 years

Furniture and fixtures

 

3 to 5 years

Computer equipment

 

3 years

Software

 

3 years

Trade show equipment

 

3 years

 

The Company capitalizes software development costs associated with internal use software, including external direct costs of materials and services and payroll costs for employees devoting time to a software project.  Costs incurred during the preliminary project stage, as well as costs for maintenance and training, are expensed as incurred.

Software includes internal-use software acquired and modified to meet the Company’s internal requirements.  Amortization commences when the software is ready for its intended use.

 

 

6


 

NOTE 3 – NET LOSS PER SHARE

The following table presents basic and diluted net loss per share for the three months ended March 31, 2020 and 2019 (in thousands, except share and per share data):

 

 

 

For the Three Months Ended March 31,

 

 

 

 

2020

 

 

2019

 

 

Basic and diluted net loss per share calculation:

 

 

 

 

 

 

 

 

 

Numerator - net loss

 

$

(13,591

)

 

$

(32,863

)

 

Denominator - weighted average ordinary shares outstanding

 

 

190,072,112

 

 

 

172,789,209

 

 

Basic and diluted net loss per share

 

$

(0.07

)

 

$

(0.19

)

 

 

Basic net loss per share is computed by dividing net loss by the weighted-average number of ordinary shares outstanding during the period.  Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue ordinary shares were exercised, converted into ordinary shares or resulted in the issuance of ordinary shares that would have shared in the Company’s earnings.

The computation of diluted net loss per share for the three months ended March 31, 2020 excluded 9.3 million shares subject to equity awards and 14.0 million shares (based on the if-converted method) related to its 2.50% Exchangeable Senior Notes due 2022 (the “Exchangeable Senior Notes”) because their inclusion would have had an anti-dilutive effect on diluted net loss per share.

The computation of diluted net loss per share for the three months ended March 31, 2019, excluded 8.2 million shares subject to equity awards because their inclusion would have had an anti-dilutive effect on diluted net loss per share.

During the three months ended March 31, 2019, the potentially dilutive impact of the Exchangeable Senior Notes was determined using a method similar to the treasury stock method.  Under this method, no numerator or denominator adjustments arose from the principal and interest components of the Exchangeable Senior Notes because the Company had the intent, at that time, and ability to settle the Exchangeable Senior Notes’ principal and interest in cash.  Instead, the Company was required to increase the diluted net loss per share denominator by the variable number of shares that would be issued upon conversion if it settled the conversion spread obligation with shares.  For diluted net loss per share purposes, the conversion spread obligation was calculated based on whether the average market price of the Company’s ordinary shares over the reporting period was in excess of the exchange price of the Exchangeable Senior Notes.  There was no calculated spread added to the denominator for the three months ended March 31, 2019.   Beginning in the fourth quarter of 2019, with the ordinary share price significantly above the $28.66 exchange price, the Company decided that it no longer had the intent to settle the notes for cash and, as a result, began to prospectively apply the if-converted method to the Exchangeable Senior Notes when determining the diluted net income (loss) per share.

 

 

NOTE 4 – ACQUISITIONS, DIVESTITURES AND OTHER ARRANGEMENTS

Sale of MIGERGOT rights

On June 28, 2019, the Company sold its rights to MIGERGOT to Cosette Pharmaceuticals, Inc., for $6.0 million and total potential contingent consideration payments of $4.0 million (the “MIGERGOT transaction”). 

Pursuant to ASC 805 (as amended by ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU No. 2017-01”)), the Company accounted for the MIGERGOT transaction as a sale of assets, specifically a sale of intellectual property rights, and a sale of inventory. 

The loss on sale of assets recorded to the consolidated statement of comprehensive income (loss) during the year ended December 31, 2019, was determined as follows (in thousands):

 

Cash proceeds

 

$

6,000

 

Less net assets sold:

 

 

 

 

   Developed technology

 

 

(16,999

)

   Inventory

 

 

(236

)

Release of contingent consideration liability

 

272

 

Loss on sale of assets

 

$

(10,963

)

 


7


Acquisition of River Vision

On May 8, 2017, the Company acquired 100% of the equity interests in River Vision Development Corp. (“River Vision”) for upfront cash payments totaling approximately $150.3 million, including cash acquired of $6.3 million, with additional potential future milestone and royalty payments contingent on the satisfaction of certain regulatory milestones and sales thresholds.  Pursuant to ASU No. 2017-01, the Company accounted for the River Vision acquisition as the purchase of an in-process research and development asset (teprotumumab, now known as TEPEZZA) and, pursuant to ASC Topic 730, Research and Development, recorded the purchase price as research and development expense during the year ended December 31, 2017.  Further, the Company recognized approximately $32.4 million of federal net operating losses, $2.2 million of state net operating losses and $9.5 million of federal tax credits.  The acquired tax attributes were set up as deferred tax assets which were further netted within the net deferred tax liabilities of the U.S. group, offset by a deferred credit recorded in long-term liabilities.

Under the agreement for the acquisition of River Vision, the Company agreed to pay up to $325.0 million upon the attainment of various milestones, composed of $100.0 million related to U.S. Food and Drug Administration (“FDA”) approval and $225.0 million related to net sales thresholds for TEPEZZA.  The agreement also includes a royalty payment of 3 percent of the portion of annual worldwide net sales exceeding $300.0 million (if any).  The Company made the milestone payment of $100.0 million related to FDA approval during the first quarter of 2020 which is now capitalized as a finite-lived intangible asset representing the developed technology for TEPEZZA.

Additionally, under the Company’s license agreement with F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. (together referred to as “Roche”), the Company made a milestone payment of CHF5.0 million ($5.2 million when converted using a CHF-to-Dollar exchange rate at the date of payment of 1.0382), during the first quarter of 2020 which the Company also capitalized as a finite-lived intangible asset representing the developed technology for TEPEZZA.

Refer to Note 15 for further detail on TEPEZZA milestone payments.

 

Other Arrangements

On January 3, 2019, the Company entered into a collaboration agreement with HemoShear Therapeutics, LLC (“HemoShear”), a biotechnology company, to discover novel therapeutic targets for gout.  The collaboration provides the Company with an opportunity to address unmet treatment needs for people with gout by evaluating new targets for the control of serum uric acid levels.  Under the terms of the agreement, the Company paid HemoShear an upfront cash payment of $2.0 million with additional potential future milestone payments upon commencement of new stages of development, contingent on the Company’s approval at each stage.  In June 2019, the Company incurred a $4.0 million progress payment, which was subsequently paid in July 2019.

 

NOTE 5 – INVENTORIES

Inventories are stated at the lower of cost or net realizable value.  Inventories consist of raw materials, work-in-process and finished goods.  The Company has entered into manufacturing and supply agreements for the manufacture of drug substance and finished goods inventories, and the purchase of raw materials and production supplies.  The Company’s inventories include the direct purchase cost of materials and supplies and manufacturing overhead costs.

The components of inventories as of March 31, 2020 and December 31, 2019 consisted of the following (in thousands):

 

 

 

March 31, 2020

 

 

December 31, 2019

 

Raw materials

 

$

16,557