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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2017	Feb. 02, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	Alkermes plc.
Entity Central Index Key	0001520262
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 8,819,125,952
Entity Common Stock, Shares Outstanding		156,144,366
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
CURRENT ASSETS:
Cash and cash equivalents	$ 191,296	$ 186,378
Investments - short-term	242,208	310,856
Receivables, net	233,590	191,102
Inventory	93,275	62,998
Prepaid expenses and other current assets	48,475	39,344
Total current assets	808,844	790,678
PROPERTY, PLANT AND EQUIPMENT, NET	284,736	264,785
INTANGIBLE ASSETS - NET	256,168	318,227
INVESTMENTS - LONG-TERM	157,212	121,931
GOODWILL	92,873	92,873
CONTINGENT CONSIDERATION	84,800	63,200
DEFERRED TAX ASSETS	98,560	47,768
OTHER ASSETS	14,034	26,961
TOTAL ASSETS	1,797,227	1,726,423
CURRENT LIABILITIES:
Accounts payable and accrued expenses	286,166	207,055
Long-term debt - short-term	3,000	3,000
Deferred revenue - short-term	1,956	1,938
Total current liabilities	291,122	211,993
LONG-TERM DEBT	278,436	280,666
OTHER LONG-TERM LIABILITIES	19,204	17,161
DEFERRED REVENUE - LONG-TERM	5,657	7,122
Total liabilities	594,419	516,942
COMMITMENTS AND CONTINGENCIES (Note 16)
SHAREHOLDERS' EQUITY:
Preferred shares, par value, $0.01 per share; 50,000,000 shares authorized; zero issued and outstanding at December 31, 2017 and 2016, respectively
Ordinary shares, par value, $0.01 per share; 450,000,000 shares authorized; 156,057,632 and 154,191,281 shares issued; 154,009,456 and 152,430,514 shares outstanding at December 31, 2017 and 2016, respectively	1,557	1,539
Treasury shares, at cost (2,048,176 and 1,760,767 shares at December 31, 2017 and 2016, respectively)	(89,347)	(72,639)
Additional paid-in capital	2,338,755	2,231,797
Accumulated other comprehensive loss	(3,792)	(3,274)
Accumulated deficit	(1,044,365)	(947,942)
Total shareholders' equity	1,202,808	1,209,481
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 1,797,227	$ 1,726,423

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED BALANCE SHEETS
Preferred stock shares, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock shares, authorized	50,000,000	50,000,000
Preferred stock shares, issued	0	0
Preferred stock shares, outstanding	0	0
Ordinary shares, par value (in dollars per share)	$ 0.01	$ 0.01
Ordinary shares, shares authorized	450,000,000	450,000,000
Ordinary shares, shares issued	156,057,632	154,191,281
Ordinary shares, shares outstanding	154,009,456	152,430,514
Treasury shares	2,048,176	1,760,767

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
REVENUES:
Manufacturing and royalty revenues	$ 505,308	$ 487,247	$ 475,288
Product sales, net	362,834	256,146	149,028
License revenue	28,000
Research and development revenue	7,232	2,301	4,019
Total revenues	903,374	745,694	628,335
EXPENSES:
Cost of goods manufactured and sold (exclusive of amortization of acquired intangible assets shown below)	154,748	132,122	138,989
Research and development	412,889	387,148	344,404
Selling, general and administrative	421,578	374,130	311,558
Amortization of acquired intangible assets	62,059	60,959	57,685
Total expenses	1,051,274	954,359	852,636
OPERATING LOSS	(147,900)	(208,665)	(224,301)
OTHER INCOME (EXPENSE), NET:
Interest income	4,649	3,752	3,330
Interest expense	(12,008)	(14,889)	(13,247)
Change in the fair value of contingent consideration	21,600	7,900	(2,300)
Gain on the Gainesville Transaction			9,636
Gain on sale of property, plant and equipment			2,862
Other (expense) income, net	(9,615)	(2,485)	15
Total other income (expense), net	4,626	(5,722)	296
LOSS BEFORE INCOME TAXES	(143,274)	(214,387)	(224,005)
INCOME TAX PROVISION (BENEFIT)	14,671	(5,943)	3,158
NET LOSS	$ (157,945)	$ (208,444)	$ (227,163)
LOSS PER ORDINARY SHARE:
Basic and diluted (in dollars per share)	$ (1.03)	$ (1.38)	$ (1.52)
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING:
Basic and diluted (in shares)	153,415	151,484	149,206
COMPREHENSIVE LOSS:
Net loss	$ (157,945)	$ (208,444)	$ (227,163)
Holding (loss) gain, net of a tax (benefit) provision of $(295), $237 and $(292), respectively	(518)	522	(661)
COMPREHENSIVE LOSS	$ (158,463)	$ (207,922)	$ (227,824)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Tax (benefit) provision	$ (295)	$ 237	$ (292)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Ordinary Shares	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Accumulated Deficit	Treasury Stock	Total
BALANCE at Dec. 31, 2014	$ 1,482	$ 1,942,878	$ (3,136)	$ (512,335)	$ (32,052)	$ 1,396,837
BALANCE (in shares) at Dec. 31, 2014	148,545,150				(1,006,631)
Increase (Decrease) in Shareholders' Equity
Issuance of ordinary shares under employee stock plans	$ 35	44,934				44,969
Issuance of ordinary shares under employee stock plans (in shares)	3,538,308
Receipt of Alkermes' shares for the purchase of stock options or to satisfy minimum tax withholding obligations related to share based awards	$ 1	704			$ (26,609)	(25,904)
Receipt of Alkermes' shares for the purchase of stock options or to satisfy minimum tax withholding obligations related to share based awards (in shares)	45,483				(421,321)
Share-based compensation expense		97,619				97,619
Excess tax benefit from share-based compensation		28,576				28,576
Unrealized gain (loss) on marketable securities, net of tax provision (benefit) of $(295), $237, and ($292)			(659)			(659)
Net loss				(227,163)		(227,163)
BALANCE at Dec. 31, 2015	$ 1,518	2,114,711	(3,795)	(739,498)	$ (58,661)	1,314,275
BALANCE (in shares) at Dec. 31, 2015	152,128,941				(1,427,952)
Increase (Decrease) in Shareholders' Equity
Issuance of ordinary shares under employee stock plans	$ 20	20,288				20,308
Issuance of ordinary shares under employee stock plans (in shares)	2,027,571
Receipt of Alkermes' shares for the purchase of stock options or to satisfy minimum tax withholding obligations related to share based awards	$ 1	510			$ (13,978)	(13,467)
Receipt of Alkermes' shares for the purchase of stock options or to satisfy minimum tax withholding obligations related to share based awards (in shares)	34,769				(332,815)
Share-based compensation expense		94,458				94,458
Excess tax benefit from share-based compensation		1,830				1,830
Unrealized gain (loss) on marketable securities, net of tax provision (benefit) of $(295), $237, and ($292)			521			521
Net loss				(208,444)		(208,444)
BALANCE at Dec. 31, 2016	$ 1,539	2,231,797	(3,274)	(947,942)	$ (72,639)	1,209,481
BALANCE (in shares) at Dec. 31, 2016	154,191,281				(1,760,767)
Increase (Decrease) in Shareholders' Equity
Issuance of ordinary shares under employee stock plans	$ 16	23,501				23,517
Issuance of ordinary shares under employee stock plans (in shares)	1,850,084
Receipt of Alkermes' shares for the purchase of stock options or to satisfy minimum tax withholding obligations related to share based awards	$ 2	273			$ (16,708)	(16,433)
Receipt of Alkermes' shares for the purchase of stock options or to satisfy minimum tax withholding obligations related to share based awards (in shares)	16,267				(287,409)
Share-based compensation expense		83,184				83,184
Unrealized gain (loss) on marketable securities, net of tax provision (benefit) of $(295), $237, and ($292)			(518)			(518)
Cumulative effect adjustment related to change in accounting for excess tax benefits				61,522		61,522
Net loss				(157,945)		(157,945)
BALANCE at Dec. 31, 2017	$ 1,557	$ 2,338,755	$ (3,792)	$ (1,044,365)	$ (89,347)	$ 1,202,808
BALANCE (in shares) at Dec. 31, 2017	156,057,632				(2,048,176)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Tax (benefit) provision	$ (295)	$ 237	$ (292)

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (157,945)	$ (208,444)	$ (227,163)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization	98,523	94,256	85,596
Share-based compensation expense	83,917	94,396	97,341
Impairment of investment in Reset Therapeutics, Inc.	10,471
Deferred income taxes	7,234	(9,689)	(37,580)
Change in the fair value of contingent consideration	(21,600)	(7,900)	2,300
Excess tax benefit from share-based compensation		(4,229)	(28,576)
Gain on the Gainesville Transaction			(9,636)
Loss on debt refinancing		2,075
Gain on sale of property, plant and equipment			(3,272)
Other non-cash charges	3,471	2,936
Other non-cash charges			(1,351)
Changes in assets and liabilities:
Receivables	(42,489)	(35,616)	(16,455)
Inventory	(30,191)	(26,381)	3,687
Prepaid expenses and other assets	(9,506)	(15,014)	15,931
Accounts payable and accrued expenses	72,658	45,870	76,155
Deferred revenue	(1,447)	(649)	(629)
Other long-term liabilities	6,094	4,587	3,292
Cash flows provided by (used in) operating activities	19,190	(63,802)	(40,360)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of property, plant and equipment	(51,300)	(43,657)	(52,877)
Proceeds from the sale of equipment	162	194	535
Purchases of investments	(431,712)	(375,099)	(508,683)
Sales and maturities of investments	464,494	560,805	467,573
Investment in Reset Therapeutics, Inc.		(15,000)
Net proceeds from the Gainesville Transaction			49,966
Cash flows (used in) provided by investing activities	(18,356)	127,243	(43,486)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of ordinary shares under share-based compensation arrangements	23,517	20,308	44,969
Employee taxes paid related to net share settlement of equity awards	(16,433)	(13,467)	(25,904)
Principal payments of long-term debt	(3,000)	(3,429)	(6,750)
Excess tax benefit from share-based compensation		4,229	28,576
Payment made for debt refinancing		65,813
Cash flows provided by (used in) financing activities	4,084	(58,172)	40,891
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	4,918	5,269	(42,955)
CASH AND CASH EQUIVALENTS - Beginning of period	186,378	181,109	224,064
CASH AND CASH EQUIVALENTS - End of period	191,296	186,378	181,109
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Cash paid for interest	11,143	12,458	12,323
Cash paid for taxes	2,992	5,531	705
Non-cash investing and financing activities:
Purchased capital expenditures included in accounts payable and accrued expenses	$ 11,151	$ 5,766	6,054
Fair value of warrants received as part of the Gainesville Transaction			2,123
Fair value of contingent consideration received as part of the Gainesville Transaction			$ 57,600

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	12 Months Ended
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	Dec. 31, 2017
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION	1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Alkermes plc (the “Company”) is a fully integrated, global biopharmaceutical company that applies its scientific expertise and proprietary technologies to research, develop and commercialize, both with partners and on its own, pharmaceutical products that are designed to address unmet medical needs of patients in major therapeutic areas. The Company has a diversified portfolio of commercial drug products and a clinical pipeline of product candidates that address central nervous system (“CNS”) disorders such as schizophrenia, depression, addiction, and multiple sclerosis. Headquartered in Dublin, Ireland, the Company has a research and development (“R&D”) center in Waltham, Massachusetts; R&D and manufacturing facilities in Athlone, Ireland; and a manufacturing facility in Wilmington, Ohio.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The consolidated financial statements include the accounts of Alkermes plc and its wholly-owned subsidiaries: Alkermes Ireland Holdings Limited; Daravita Pharma Ireland Limited; Daravita Limited; Alkermes Science Four Limited; Alkermes Science Five Limited; Alkermes Science Six Limited; Alkermes Pharma Ireland Limited; Alkermes U.S. Holdings, Inc.; Alkermes, Inc.; Alkermes Controlled Therapeutics, Inc.; Alkermes Europe, Ltd.; Alkermes Finance Ireland Limited; Alkermes Finance Ireland (No. 2) Limited; Alkermes Finance Ireland (No. 3) Limited; and Alkermes Finance S.à r.l. Intercompany accounts and transactions have been eliminated.

On March 7, 2015, the Company entered into a definitive agreement to sell its Gainesville, GA manufacturing facility, the related manufacturing and royalty revenue associated with certain products manufactured at the facility, and the rights to IV/IM and parenteral forms of Meloxicam (the “Disposition” or the “Gainesville Transaction”) to Recro Pharma, Inc. (“Recro”) and Recro Pharma LLC (together with Recro, the “Purchasers”). The consolidated financial statements include the accounts of Alkermes Gainesville LLC, which represent the entities sold, for the period from January 1, 2015 through April 10, 2015.

Use of Estimates

The preparation of the Company’s consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S.”) (“GAAP”) requires management to make estimates, judgments and assumptions that may affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an on‑going basis, the Company evaluates its estimates and judgments and methodologies, including those related to revenue recognition and related allowances, its collaborative relationships, clinical trial expenses, the valuation of inventory, impairment and amortization of intangibles and long‑lived assets, share‑based compensation, income taxes including the valuation allowance for deferred tax assets, valuation of investments, contingent consideration and litigation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions.

Cash and Cash Equivalents

The Company values its cash and cash equivalents at cost plus accrued interest, which the Company believes approximates their market value. The Company considers only those investments which are highly liquid, readily convertible into cash and so near their maturity, generally three months from the date of purchase, that they present insignificant risk of change in value because of interest rate changes to be cash equivalents.

Receivables, net

The Company’s allowance for doubtful accounts was $0.2 million and $0.1 million at December 31, 2017 and 2016, respectively.

Investments

The Company has investments in various types of securities, consisting primarily of U.S. government and agency obligations, corporate debt securities and debt securities issued by foreign agencies and backed by foreign governments. The Company generally holds its interest bearing investments with major financial institutions and in accordance with documented investment policies. The Company limits the amount of credit exposure to any one financial institution or corporate issuer. At December 31, 2017, substantially all these investments were classified as available for sale and were recorded at fair value.

Holding gains and losses on available-for-sale investments are considered “unrealized” and are reported within “Accumulated other comprehensive loss,” a component of shareholders’ equity. The Company uses the specific identification method for reclassifying unrealized gains and losses into earnings when investments are sold. The Company conducts periodic reviews to identify and evaluate each investment that has an unrealized loss, in accordance with the meaning of other-than-temporary impairment and its application to certain investments, as required by GAAP. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Unrealized losses on available-for-sale securities that are determined to be temporary, and not related to credit loss, are recorded in “Accumulated other comprehensive loss.”

For securities with unrealized losses, the Company performs an analysis to assess whether it intends to sell or whether it would more likely than not be required to sell the security before the expected recovery of its amortized cost basis. If the Company intends to sell a security, or may be required to do so, the security’s decline in fair value is deemed to be other-than-temporary and the full amount of the unrealized loss is recorded within earnings as an impairment loss. Regardless of the Company’s intent to sell a security, the Company performs additional analysis on all securities with unrealized losses to evaluate losses associated with the creditworthiness of the security. Credit losses are identified where the Company does not expect to receive cash flows sufficient to recover the amortized cost basis of a security.

The Company's held-to-maturity investments are restricted investments held as collateral under letters of credit related to certain of the Company's agreements and are included in “Investments—long-term,” in the accompanying consolidated balance sheets.

Fair Value of Financial Instruments

The Company’s financial assets and liabilities are recorded at fair value and are classified as Level 1, 2 or 3 within the fair value hierarchy, as described in the accounting standards for fair value measurement. The Company’s financial assets and liabilities consist of cash equivalents, investments, contingent consideration and warrants to purchase the common stock of a publicly traded company are classified within the fair value hierarchy as follows:

●Level 1–these valuations are based on a market approach using quoted prices in active markets for identical assets. Valuations of these products do not require a significant degree of judgment. Assets utilizing Level 1 inputs at December 31, 2017 included U.S. treasury securities and a fixed term deposit account;

●Level 2–these valuations are based on a market approach using quoted prices obtained from brokers or dealers for similar securities or for securities for which the Company has limited visibility into their trading volumes. Valuations of these financial instruments do not require a significant degree of judgment. Assets and liabilities utilizing Level 2 inputs at December 31, 2017 included U.S. government agency debt securities, debt securities issued by foreign agencies and backed by foreign governments and investments in corporate debt securities that are trading in the credit markets; and

●Level 3–these valuations are based on an income approach using certain inputs that are unobservable and are significant to the overall fair value measurement. Valuations of these products require a significant degree of judgment. At December 31, 2017, assets utilizing Level 3 inputs included contingent consideration and warrants to purchase the common stock of Recro.

The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, accounts receivable, other current assets, accounts payable and accrued expenses approximate fair value due to their short‑term nature.

Inventory

Inventory is stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method. Included in inventory are raw materials used in production of pre-clinical and clinical products, which have alternative future use and are charged to R&D expense when consumed. The cost elements included within inventory include three primary categories for commercial products: cost of raw materials; direct labor; and overhead. Overhead is based on the normal capacity of the Company’s production facilities and does not include costs from abnormally low production or idle capacity, which are expensed directly to the consolidated statement of operations.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost, subject to review for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Expenditures for repairs and maintenance are charged to expense as incurred and major renewals and improvements are capitalized. Depreciation is calculated using the straight‑line method over the following estimated useful lives of the assets:


Asset group		Term
Buildings and improvements		15 - 40 years
Furniture, fixtures and equipment		3 - 10 years
Leasehold improvements		Shorter of useful life or lease term

Business Acquisitions and Divestitures

The Company's consolidated financial statements include the operations of an acquired business after the completion of the acquisition. The Company accounts for acquired businesses using the acquisition method of accounting. The acquisition method of accounting for acquired businesses requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date, and that the fair value of acquired in-process research and development be recorded on the balance sheet. Also, transaction costs are expensed as incurred. Any excess of the purchase price over the assigned values of the net assets acquired is recorded as goodwill. Contingent consideration, if any, is included within the acquisition cost and is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is re-measured to fair value at each reporting date until the contingency is resolved. Changes in the fair value of the contingent consideration are recognized in earnings.

The Company’s consolidated financial statements include gains and losses from divested businesses. The Company accounts for the deconsolidation of a subsidiary, or derecognition of a group of assets, by recognizing a gain or loss in net income attributable to the Company, measured as the difference between the fair value of any consideration received and the carrying amount of the former subsidiary’s assets and liabilities, or the carrying amount of the group of assets. If consideration received for the divested business includes contingent consideration, the Company elects, for the components of the contingent consideration that are not derivative instruments, such as future regulatory milestones, sales milestones and royalties, to include them in the contingent consideration portion of the arrangement at fair value. The Company has elected the fair value option for the subsequent accounting of the contingent consideration. The Company will continue to revalue the contingent consideration at each reporting date until each milestone and/or royalty has been achieved or ceased, with any changes in the fair value of the contingent consideration recognized in earnings.

Contingent Consideration

The Company records contingent consideration it receives at fair value on the acquisition date. The Company estimates the fair value of contingent consideration through valuation models that incorporate probability-adjusted assumptions related to the achievement of milestones and thus likelihood of receiving related payments. The Company revalues its contingent consideration each reporting period, with changes in the fair value of contingent consideration recognized within the consolidated statements of operations and comprehensive loss. Changes in the fair value of contingent consideration can result from changes to one or multiple inputs, including adjustments to discount rates, changes in the amount or timing of cash flows, changes in the assumed achievement or timing of any development or sales-based milestones and changes in the assumed probability associated with regulatory approval.

The period over which the Company discounts its contingent consideration is based on the current development stage of the product candidate, the specific development plan for that product candidate, adjusted for the probability of completing the development steps, and when contingent payments would be triggered. In estimating the probability of success, the Company utilizes data regarding similar milestone events from several sources, including industry studies and the Company’s own experience. These fair value measurements are based on significant inputs not observable in the market. Significant judgment was employed in determining the appropriateness of these assumptions at the acquisition date and for each subsequent period. Accordingly, changes in assumptions described above could have a material impact on the increase or decrease in the fair value of contingent consideration recorded in any given period.

Goodwill and Intangible Assets

Goodwill represents the excess cost of the Company's investment in the net assets of acquired companies over the fair value of the underlying identifiable net assets at the date of acquisition. The Company’s goodwill consists solely of goodwill created as a result of the Company’s acquisition of Elan Drug Technologies (“EDT”) from Elan Corporation, plc (the “Business Combination”) in September 2011 and has been assigned to one reporting unit. A reporting unit is an operating segment or one level below an operating segment or a component to which goodwill is assigned when initially recorded.

Goodwill is not amortized but is reviewed for impairment on an annual basis, as of October 31, and whenever events or changes in circumstances indicate that the carrying value of the goodwill might not be recoverable. The Company has the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. If the Company elects this option and believes, as a result of the qualitative assessment, that it is more-likely-than-not that the fair value of its reporting unit is less than its carrying amount, the quantitative impairment test is required; otherwise, no further testing is required. Alternatively, the Company may elect to not first assess qualitative factors and immediately perform the quantitative impairment test. In the quantitative impairment test, the Company compares the fair value of its reporting unit to its carrying value. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of its reporting unit, then the Company would record an impairment loss equal to the difference.

The Company's finite-lived intangible assets, consisting of core developed technology and collaboration agreements acquired as part of the acquisition of EDT, were recorded at fair value at the time of their acquisition and are stated within the Company’s consolidated balance sheets net of accumulated amortization and impairments. The finite-lived intangible assets are amortized over their estimated useful lives using the economic use method, which reflects the pattern that the economic benefits of the intangible assets are consumed as revenue is generated from the underlying patent or contract. The useful lives of the Company's intangible assets are primarily based on the legal or contractual life of the underlying patent or contract, which does not include additional years for the potential extension or renewal of the contract or patent.

Impairment of Long‑Lived Assets

The Company reviews long‑lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Conditions that would necessitate an impairment assessment include a significant decline in the observable market value of an asset, a significant change in the extent or manner in which an asset is used, or a significant adverse change that would indicate that the carrying amount of an asset or group of assets is not recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. In the event that such cash flows are not expected to be sufficient to recover the carrying amount of the assets, the assets are written‑down to their estimated fair values. Long‑lived assets to be disposed of are carried at fair value less costs to sell them.

Revenue Recognition

Collaborative Arrangements

The Company has entered into collaboration agreements with pharmaceutical companies including Janssen Pharmaceutica Inc. (“Janssen, Inc.”), Janssen Pharmaceutica International, a division of Cilag International AG (“Janssen International”), and Janssen Pharmaceutica N.V. (together with Janssen, Inc., Janssen International and their affiliates “Janssen”) for INVEGA SUSTENNA®/XEPLION® and INVEGA TRINZA®/TREVICTA® as well as RISPERDAL CONSTA®, Acorda Therapeutics, Inc. (“Acorda”) for AMPYRA®/FAMPYRA® and AstraZeneca plc (“AstraZeneca”) for BYDUREON®. Substantially all of the products developed under the Company’s collaborative arrangements are currently being marketed as approved products. The Company receives payments for manufacturing services and/or royalties on net product sales.

Multiple Element Arrangements

When entering into multiple element arrangements, the Company identifies its deliverables under the arrangement to determine if the deliverables are to be separate units of accounting or a single unit of accounting. Deliverables under the arrangement will be separate units of accounting provided that (i) a delivered item has value to the customer on a stand-alone basis; and (ii) if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item is considered probable and substantially in the control of the vendor. Arrangement consideration is allocated to the separate units of accounting based on the fair value of each deliverable. The fair value of deliverables under the arrangement may be derived using a “best estimate of selling price” if vendor specific objective evidence and third-party evidence is not available.

Whenever the Company determines that an arrangement should be accounted for as a single unit of accounting, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. Revenue will be recognized using either a proportional performance or straight-line method. The Company recognizes revenue using the proportional performance method when the level of effort required to complete its performance obligations under an arrangement can be reasonably estimated and such performance obligations are provided on a “best-efforts” basis.

Significant management judgment is required in determining the consideration to be earned under an arrangement and the period over which the Company is expected to complete its performance obligations under an arrangement. Steering committee services that are not inconsequential or perfunctory and that are determined to be performance obligations are combined with other research services or performance obligations required under an arrangement, if any, in determining the level of effort required in an arrangement and the period over which the Company expects to complete its aggregate performance obligations.

Many of the Company's collaboration agreements entitle it to additional payments upon the achievement of performance-based milestones. If the achievement of a milestone is considered probable at the inception of the collaboration, the related milestone payment is included with other collaboration consideration, such as upfront payments and research funding, in the Company's revenue model. Milestones that involve substantial effort on the Company's part and the achievement of which are not considered probable at the inception of the collaboration are considered “substantive milestones.”

The Company accounts for substantive milestones using the milestone method of revenue recognition for R&D arrangements. Under the milestone method, contingent consideration received from the achievement of a substantive milestone is recognized in its entirety in the period in which the milestone is achieved, which the Company believes is more consistent with the substance of its performance under its various collaboration agreements. A milestone is defined as an event (i) that can only be achieved based in whole or in part on either the entity's performance or on the occurrence of a specific outcome resulting from the entity's performance; (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved; and (iii) that would result in additional payments being due to the entity. A milestone is substantive if the consideration earned from the achievement of the milestone is consistent with the Company's performance required to achieve the milestone, or the increase in value to the collaboration resulting from the Company's performance, relates solely to the Company's past performance, and is reasonable relative to all of the other deliverables and payments within the arrangement.

In November 2017, the Company granted Biogen, under a license and collaboration agreement, a worldwide, exclusive, sublicensable license to develop, manufacture and commercialize BIIB098 and other products covered by patents licensed to Biogen under the agreement. Upon entering into this agreement in November 2017, the Company received an up-front cash payment of $28.0 million. The Company is also eligible to receive additional payments upon achievement of milestones, as follows: (i) a $50.0 million option payment upon Biogen’s decision to continue the collaboration after having reviewed certain data from the Company’s long-term safety clinical trial and part A of the head-to-head phase 3 gastrointestinal tolerability clinical trial comparing BIIB098 and TECFIDERA and (ii) a $150.0 million payment upon an approval by the FDA on or before December 31, 2021 of a 505(b)(2) NDA (or, in certain circumstances, a 505(b)(1) NDA) for BIIB098. The Company is also eligible to receive additional payments upon achievement of developmental milestones with respect to the first two products, other than BIIB098, covered by patents licensed to Biogen under the agreement. In addition, the Company will receive a royalty on worldwide net sales of BIIB098, subject to, under certain circumstances, minimum annual payments for the first five years following FDA approval of BIIB098, and worldwide net sales of products, other than BIIB098, covered by patents licensed to Biogen under the agreement. Biogen paid a portion of the BIIB098 development costs the Company incurred in 2017 and, beginning on January 1, 2018, Biogen will be responsible for all BIIB098 development costs the Company incurs, subject to annual budget limitations. The Company has retained the right to manufacture clinical supplies and commercial supplies of BIIB098 and all other products covered by patents licensed to Biogen under the agreement, subject to Biogen’s right to manufacture or have manufactured commercial supplies as a back-up manufacturer and subject to good faith agreement by the parties on the terms of such manufacturing arrangements.

The Company evaluated the agreement under ASC Subtopic 605-25, Multiple Element Arrangements (“ASC 605-25”). The Company determined that it had four initial performance obligations: (i) the grant of the license to Biogen, (ii) future development services, (iii) assuming the Company enters into a supply agreement with Biogen, clinical supply and (iv) participation on a joint steering committee with Biogen. The participation on the joint service committee was considered to be perfunctory and thus not recognized as a separate unit of accounting. The deliverables, aside from the participation in the joint steering committee which was considered to be perfunctory, were determined to be separate units of accounting as they each have value to Biogen on a stand-alone basis.

The consideration allocable to the delivered unit or units of accounting is limited to the amount that is not contingent upon the delivery of additional items or meeting other specified performance conditions. Therefore, the Company will exclude from the allocable consideration the milestone payments and royalties, regardless of the probability that such milestone and royalty payments will be made, until the events that give rise to such payments actually occur.

The Company allocated consideration to each unit of accounting using the relative selling price method based on its best estimate of selling price for the license and other deliverables. The Company used a discounted cash flow model to estimate the fair value of the license in order to determine the best estimate of selling price. To estimate the fair value of the license, the Company assessed the likelihood of the FDA’s approval of BIIB098 and estimated the expected future cash flows assuming FDA approval and the intellectual property (“IP”) protecting BIIB098. The Company then discounted these cash flows using a discount rate of 8.0%, which it believes captures a market participant’s view of the risk associated with the expected cash flows. The best estimate of selling price of the development services and clinical supply were determined through third-party evidence. The Company believes that a change in the assumptions used to determine its best estimate of selling price for the license most likely would not have a significant effect on the allocation of consideration transferred.

At the date the license was delivered to Biogen, the revenue recognized for the license unit of accounting was limited to the lesser of the amount otherwise allocable using the relative selling price method or the non-contingent amount. During the three months ended December 31, 2017, the Company recognized license revenue of $28.0 million based on the non-contingent amount, which was the upfront payment. Any consideration received subsequent to the delivery of the license will be allocated to the remaining units of accounting and recognized when the general revenue recognition criteria are met.

The Company determined that the future milestones it is entitled to receive are substantive milestones. The Company is entitled to receive an option payment of $50.0 million upon Biogen’s decision to continue the collaboration after having reviewed certain data from our long-term safety clinical trial and part A of the head-to-head phase 3 gastrointestinal tolerability clinical trial comparing BIIB098 and TECFIDERA and a $150.0 million payment upon approval by the FDA on or before December 31, 2021 of a 505(b)(2) NDA (or, in certain circumstances, a 505(b)(1) NDA) for BIIB098. Given the challenges inherent in developing and obtaining approval for pharmaceutical and biologic products, there was substantial uncertainty as to whether these milestones would be achieved at the time the license and collaboration agreement was entered into.

Manufacturing revenues—The Company recognizes manufacturing revenues from the sale of products it manufactures for resale by its licensees. Manufacturing revenues are recognized when persuasive evidence of an arrangement exists, delivery has occurred and title to the product and associated risk of loss has passed to the customer, the sales price is fixed or determinable and collectability is reasonably assured. The sales price for certain of the Company’s manufacturing revenues is based on the end-market sales price earned by its partners. As the end-market sale occurs after the Company has shipped its product and the risk of loss has passed to its partner, the Company estimates the sales price for such products based on information supplied to it by the Company’s partners, its historical transaction experience and other third-party data. Differences between actual manufacturing revenues and estimated manufacturing revenues are reconciled and adjusted for in the period in which they become known, which is generally within the quarter. The difference between the Company’s actual and estimated manufacturing revenues has not been material.

Royalty revenues—The Company recognizes royalty revenues related to the sale of products by its partners that incorporates the Company's technologies. Royalties, with the exception of those from AMPYRA, are earned under the terms of a license agreement in the period the products are sold by the Company's partner and collectability is reasonably assured. Royalties on AMPYRA are earned in the period that the product is shipped to Acorda. Certain of the Company's royalty revenues are recognized by the Company based on information supplied to the Company by its partners and require estimates to be made. Differences between actual royalty revenues and estimated royalty revenues are reconciled and adjusted for in the period in which they become known, which is generally within the quarter. The difference between the Company’s actual and estimated royalty revenues has not been material.

License revenue—The Company recognizes revenues from the license and the sale of intellectual property, deemed to have standalone value, when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable and collectability is reasonably assured. The Company considers delivery to have occurred when the buyer has use of, and is able to benefit from, the intellectual property and the Company has no remaining obligations under the arrangement.

Research and development revenue—R&D revenue consists of funding that compensates the Company for formulation, pre‑clinical and clinical testing under R&D arrangements with its partners. The Company generally bills its partners under R&D arrangements using a full‑time equivalent (“FTE”) or hourly rate, plus direct external costs, if any.

Product Sales, Net

The Company’s product sales, net consist of sales of VIVITROL®, and since its approval by the U.S. Food and Drug Administration (“FDA”) in October 2015, ARISTADA®, in the U.S. primarily to wholesalers, specialty distributors and pharmacies. Product sales are recognized when persuasive evidence of an arrangement exists, title to the product and associated risk of loss has passed to the customer, which is considered to occur when the product has been received by the customer, the sales price is fixed or determinable and collectability is reasonably assured.

The Company records its product sales net of the following significant categories of sales discounts and allowances at the time of shipment:

●Medicaid Rebates—the Company records accruals for rebates to states under the Medicaid Drug Rebate Program as a reduction of sales when the product is shipped into the distribution channel. The Company rebates individual states for all eligible units purchased under the Medicaid program based on a rebate per unit calculation, which is based on the Company’s average manufacturer prices. The Company estimates expected unit sales and rebates per unit under the Medicaid program and adjust its rebate based on actual unit sales and rebates per unit. To date, actual Medicaid rebates have not differed materially from the Company’s estimates;

●Chargebacks—chargebacks are discounts that occur when contracted indirect customers purchase directly from wholesalers and specialty distributors. Contracted customers generally purchase the product at its contracted price. The wholesaler or specialty distributor, in turn, then generally charges back to the Company the difference between the wholesale acquisition cost and the contracted price paid to the wholesaler or specialty distributor by the customer. The allowance for chargebacks is based on actual and expected utilization of these programs. Chargebacks could exceed historical experience and the Company’s estimates of future participation in these programs. To date, actual chargebacks have not differed materially from the Company’s estimates;

●Product Discounts—cash consideration, including sales incentives, given by the Company under agreements with a number of wholesaler, distributor, pharmacy, and treatment provider customers that provide them with a discount on the purchase price of products. To date, actual product discounts have not differed materially from the Company’s estimates;

●Co‑pay Assistance—the Company has a program whereby a patient can receive monetary assistance each month toward their product co‑payment, co‑insurance or deductible, provided the patient meets certain eligibility criteria. Reserves for such co-pay assistance are recorded upon the product sale. To date, actual co‑pay assistance has not differed materially from the Company’s estimates; and

●Product Returns—the Company records an estimate for product returns at the time its customer takes title to the Company’s product. The Company estimates this liability based on its historical return levels and specifically identified anticipated returns due to known business conditions and product expiry dates. Return amounts are recorded as a deduction to arrive at product sales, net. Once product is returned, it is destroyed. At December 31, 2017, the product return reserve was estimated to be approximately 1.5% of each of the Company’s VIVITROL and ARISTADA gross product sales.

Foreign Currency

The Company's functional and reporting currency is the U.S. dollar. Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. The resulting monetary assets and liabilities are translated into U.S. dollars at exchange rates prevailing on the subsequent balance sheet date. Gains and losses as a result of translation adjustments are recorded within “Other income (expense), net” in the accompanying consolidated statements of operations and comprehensive loss. During the years ended December 31, 2017, 2016 and 2015, the Company recorded a gain on foreign currency translation of $3.7 million, $0.1 million and $1.4 million, respectively.

Concentrations

Financial instruments that potentially subject the Company to concentrations of credit risk are receivables and marketable securities. Billings to large pharmaceutical companies account for the majority of the Company's receivables, and collateral is generally not required from these customers. To mitigate credit risk, the Company monitors the financial performance and credit worthiness of its customers. The following represents revenue and receivables from the Company's customers exceeding 10% of the total in each category as of, and for the years ended, December 31, 2017, 2016 and 2015:


	Year Ended December 31,
	2017				2016				2015
Customer	Receivables		Revenue		Receivables		Revenue		Receivables		Revenue
Janssen	31	%	33	%	33	%	36	%	44	%	40	%
Acorda	14	%	13	%	17	%	15	%	*		17	%


*	In 2015, receivables related to Acorda did not exceed 10% of the Company’s total receivables as of December 31, 2015.

The Company holds its interest‑bearing investments with major financial institutions and, in accordance with documented investment policies, the Company limits the amount of credit exposure to any one financial institution or corporate issuer. The Company’s investment objectives are, first, to assure liquidity and conservation of capital and, second, to obtain investment income.

Geographic Information

Company revenues by geographic location, as determined by the location of the customer, and the location of its assets, are as follows:


	Year Ended December 31,
(In thousands)	2017		2016		2015
Revenue by region:
U.S.	$	700,090	$	557,312	$	448,639
Ireland		9,706		4,407		3,902
Rest of world		193,578		183,975		175,794
Assets by region:
Current assets:
U.S.	$	402,481	$	382,168	$	360,154
Ireland		403,167		407,761		394,281
Rest of world		3,196		749		527
Long-term assets:
U.S.:
Other	$	360,641	$	236,175	$	294,158
Ireland:
Intangible assets	$	256,168	$	318,227	$	379,186
Goodwill		92,873		92,873		92,873
Other		278,701		288,470		334,565

Research and Development Expenses

For each of its R&D programs, the Company incurs both external and internal expenses. External R&D expenses include costs related to clinical and non‑clinical activities performed by contract research organizations, consulting fees, laboratory services, purchases of drug product materials and third‑party manufacturing development costs. Internal R&D expenses include employee‑related expenses, occupancy costs, depreciation and general overhead. The Company tracks external R&D expenses for each of its development programs, however, internal R&D expenses, with the exception of those expenses related to BIIB098, are not tracked by individual program as they benefit multiple programs or its technologies in general.

Selling, General and Administrative Expenses

Selling, general and administrative (“SG&A”) expenses are primarily comprised of employee-related expenses associated with sales and marketing, finance, human resources, legal, information technology and other administrative personnel, outside marketing, advertising and legal expenses and other general and administrative costs.

Advertising costs are expensed as incurred. During the years ended December 31, 2017, 2016 and 2015, advertising costs totaled $34.4 million, $24.0 million and $10.6 million, respectively.

Share‑Based Compensation

The Company’s share‑based compensation programs grant awards which include stock options and restricted stock units (“RSUs”), which vest with the passage of time and, to a limited extent, vest based on the achievement of certain performance criteria. The Company issues new shares upon stock option exercise or the vesting of RSUs. Certain of the Company’s employees are retirement eligible under the terms of the Company’s stock option plans (the “Plans”), and stock option awards to these employees generally vest in full upon retirement. Since there are no effective future service requirements for these employees, the fair value of these awards is expensed in full on the grant date or upon meeting the retirement eligibility criteria, whichever is later.

Stock Options

Stock option grants to employees expire ten years from the grant date and generally vest one‑fourth per year over four years from the anniversary of the date of grant, provided the employee remains continuously employed with the Company, except as otherwise provided in the plan. Stock option grants to directors are for ten‑year terms and generally vest over a one‑year period provided the director continues to serve on the Company’s board of directors through the vesting date, except as otherwise provided in the plan. The estimated fair value of options is recognized over the requisite service period, which is generally the vesting period. Share‑based compensation expense is based on awards ultimately expected to vest. Forfeitures are estimated based on historical experience at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates.

The fair value of stock option grants is based on estimates as of the date of grant using a Black‑Scholes option valuation model. The Company uses historical data as the basis for estimating option terms and forfeitures. Separate groups of employees that have similar historical stock option exercise and forfeiture behavior are considered separately for valuation purposes. The ranges of expected terms disclosed below reflect different expected behavior among certain groups of employees. Expected stock volatility factors are based on a weighted average of implied volatilities from traded options on the Company’s ordinary shares and historical share price volatility of the Company’s ordinary shares, which is determined based on a review of the weighted average of historical daily price changes of the Company’s ordinary shares. The risk‑free interest rate for periods commensurate with the expected term of the share option is based on the U.S. treasury yield curve in effect at the time of grant. The dividend yield on the Company’s ordinary shares is estimated to be zero as the Company has not paid and does not expect to pay dividends. The exercise price of options granted is equal to the closing price of the Company’s ordinary shares traded on the Nasdaq Global Select Stock Market on the date of grant.

The fair value of each stock option grant was estimated on the grant date with the following weighted‑average assumptions:


	Year Ended December 31,
	2017	2016	2015
Expected option term	5 - 8 years	5 - 7 years	5 - 7 years
Expected stock volatility	43 % - 47 %	39 % - 53 %	38 % - 46 %
Risk-free interest rate	1.69 % - 2.38 %	0.95 % - 2.14 %	1.29 % - 2.02 %
Expected annual dividend yield	—	—	—

Time‑Vested Restricted Stock Units

Time‑vested RSUs awarded to employees generally vest one‑fourth per year over four years from the anniversary of the date of grant, provided the employee remains continuously employed with the Company. Shares of the Company’s ordinary shares are delivered to the employee upon vesting, subject to payment of applicable withholding taxes. The fair value of time‑vested RSUs is equal to the closing price of the Company’s ordinary shares traded on the Nasdaq Global Select Market on the date of grant. Compensation expense, including the effect of forfeitures, is recognized over the applicable service period.

Performance-Based Restricted Stock Units

Performance-based RSUs awarded to employees vest upon the achievement of certain performance criteria. The estimated fair value of these RSUs is based on the market value of the Company’s ordinary shares on the date of grant. Compensation expense for performance-based RSUs is recognized from the moment the Company determines the performance criteria probable to the date the Company deems the event is likely to occur. Cumulative adjustments are recorded quarterly to reflect subsequent changes in the estimated outcome of performance-related conditions until the date results are determined.

Income Taxes

The Company recognizes income taxes under the asset and liability method. Deferred income taxes are recognized for differences between the financial reporting and tax bases of assets and liabilities at enacted statutory tax rates in effect for the years in which the differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. In evaluating the Company’s ability to recover its deferred tax assets, the Company considers all available positive and negative evidence including its past operating results, the existence of cumulative income in the most recent fiscal years, changes in the business in which the Company operates and its forecast of future taxable income. In determining future taxable income, the Company is responsible for assumptions utilized including the amount of Irish, U.S. and other foreign pre‑tax operating income, the reversal of temporary differences and the implementation of feasible and prudent tax planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates that the Company is using to manage the underlying businesses.

The Company accounts for uncertain tax positions using a more‑likely‑than‑not threshold for recognizing and resolving uncertain tax positions. The evaluation of uncertain tax positions is based on factors including, but not limited to, changes in tax law, the measurement of tax positions taken or expected to be taken in tax returns, the effective settlement of matters subject to audit, new audit activity and changes in facts or circumstances related to a tax position. The Company evaluates its tax position on a quarterly basis. The Company also accrues for potential interest and penalties related to unrecognized tax benefits in income tax expense.

Comprehensive Loss

Comprehensive loss consists of net loss and other comprehensive loss. Other comprehensive loss includes changes in equity that are excluded from net loss, such as unrealized holding gains and losses on available‑for‑sale marketable securities.

Loss Per Share

Basic loss per share is calculated based upon net loss available to holders of ordinary shares divided by the weighted average number of ordinary shares outstanding. For the calculation of diluted earnings per share, the Company uses the weighted average number of ordinary shares outstanding, as adjusted for the effect of potential dilutive securities, including stock options and RSUs.

Segment Information

The Company operates as one business segment, which is the business of developing, manufacturing and commercializing medicines designed to yield better therapeutic outcomes and improve the lives of patients with serious diseases. The Company’s chief decision maker, the Chairman and Chief Executive Officer, reviews the Company’s operating results on an aggregate basis and manages the Company’s operations as a single operating unit.

Employee Benefit Plans

401(k) Plan

The Company maintains a 401(k) retirement savings plan (the “401(k) Plan”), which covers substantially all of its U.S.‑based employees. Eligible employees may contribute up to 100% of their eligible compensation, subject to certain Internal Revenue Service (“IRS”) limitations. The Company matches 100% of employee contributions up to the first 5% of employee pay, up to IRS limits. Employee and Company contributions are fully vested when made. During the years ended December 31, 2017, 2016 and 2015, the Company contributed $9.8 million, $8.1 million and $6.6 million, respectively, to match employee deferrals under the 401(k) Plan.

Defined Contribution Plan

The Company maintains a defined contribution plan for its Ireland‑based employees (the “Defined Contribution Plan”). The Defined Contribution Plan provides for eligible employees to contribute up to the maximum of 40%, depending upon their age, of their total taxable earnings subject to an earnings cap of €115,000. The Company provides a match of up to 18% of taxable earnings depending upon an individual’s contribution level. During the years ended December 31, 2017, 2016 and 2015, the Company contributed $3.7 million, $3.2 million and $3.0 million, respectively, in contributions to the Defined Contribution Plan.

New Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard‑setting bodies that are adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In May 2014, the FASB issued guidance that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The guidance is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. Numerous updates have been issued subsequent to the initial guidance that provide clarification on a number of specific issues and require additional disclosures.

This guidance becomes effective for the Company in its year ending December 31, 2018 and the Company will adopt it using the modified retrospective method. The Company has determined that the new guidance will necessitate a change in how it records manufacturing revenue for certain of its arrangements with its licensees. Under current GAAP, the Company records manufacturing revenue from the sale of products it manufactures for resale by its partners after the Company has shipped such products and risk of loss has passed to the Company’s partner, assuming persuasive evidence of an arrangement exists, the sales price is fixed or determinable and collectability is reasonably assured. Under the new guidance, the terms within certain of the Company’s manufacturing contracts will require that manufacturing revenue be recorded as products are manufactured rather than upon shipment. Revenue earned under the Company’s other manufacturing contracts will continue to be recorded at a point in time, when control passes from the Company to the customer. The Company has determined that the adoption of this guidance will result in an immaterial change to its January 1, 2018 opening balance sheet and is evaluating the disclosure requirements under this new guidance.

In January 2016, the FASB issued guidance that enhances the reporting model for financial instruments by addressing certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The amendments in this guidance include: requiring equity securities to be measured at fair value with changes in fair value recognized through the income statement; simplifying the impairment assessment of equity instruments without readily determinable fair values by requiring a qualitative assessment to identify impairment; eliminating the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; eliminating the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; requiring public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; requiring an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; requiring separate presentation of financial assets and financial liabilities by measurement category and form of financial asset; and clarifying that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. This guidance becomes effective for the Company in its year ending December 31, 2018, and the Company has determined that the adoption of this standard will not have a material impact on its consolidated financial statements.

In February 2016, the FASB issued guidance to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between previous GAAP and this guidance is the recognition of lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. This guidance becomes effective for the Company in its year ending December 31, 2019, and the Company is currently assessing the impact that this guidance will have on its consolidated financial statements.

In March 2016, the FASB issued guidance as part of its simplification initiative to eliminate the requirement to retroactively adopt the equity method of accounting when an investment qualifies for the use of the equity method as a result of an increase in the level of ownership interest or degree of influence. This guidance became effective for the Company on January 1, 2017, and the adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued guidance as part of its simplification initiative that involves several aspects of the accounting for share-based payment transactions. The amendments in this update established that: (i) all excess tax benefits and tax deficiencies be recognized as income tax expense or benefit in the income statement; (ii) excess tax benefits be classified as an operating activity in the statement of cash flows; (iii) the entity make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest, which is current GAAP, or account for forfeitures as they occur; (iv) the threshold to qualify for equity classification permits withholding up to the maximum statutory tax rates in the applicable jurisdictions; and (v) cash paid by an employer when directly withholding shares for tax withholding purposes be classified as a financing activity in the statement of cash flows. This guidance became effective for the Company on January 1, 2017. The amendments related to (i), (iii) and (iv) were adopted by the Company on a modified retrospective basis, which resulted in a cumulative-effect adjustment to reduce accumulated deficit by $61.5 million related to the timing of when excess tax benefits are recognized. The Company elected to continue to record expense only for those awards that are expected to vest. The amendments related to (ii) and (v) were adopted using the prospective transition method.

In June 2016, the FASB issued guidance to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this guidance replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. This guidance becomes effective for the Company in its year ending December 31, 2020, with early adoption permitted for the Company in its year ending December 31, 2019. The Company is currently assessing the impact that this guidance will have on its consolidated financial statements.

In August 2016, the FASB issued guidance to address diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This guidance becomes effective for the Company in its year ending December 31, 2018, with early adoption permitted. The Company elected to early adopt this guidance as of January 1, 2017. The adoption of this guidance had no impact on the Company’s statement of cash flows.

In October 2016, the FASB issued guidance to simplify and improve accounting on transfers of assets between affiliated entities. The updated guidance eliminates the prohibition for all intra-entity asset transfers, except for inventory. This guidance becomes effective for the Company in its year ending December 31, 2018, and upon adoption of the new standard, a cumulative-effect adjustment of approximately $0.9 million will be recorded within retained earnings, related to the reversal of an unamortized deferred tax charge on a prior sale of intellectual property between Alkermes, Inc. and Alkermes Pharma Ireland Limited.

In January 2017, the FASB issued guidance to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. This guidance becomes effective for the Company in its year ending December 31, 2018, with early adoption permitted for transactions that occurred before the issuance date or effective date of the guidance if the transactions were not reported in financial statements that have been issued or made available for issuance. The Company elected to early adopt this guidance, as of January 1, 2017. The adoption of this guidance had no impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued guidance that simplifies the test for goodwill impairment. This guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. Under the amended guidance, a goodwill impairment charge will now be recognized for the amount by which the carrying value of a reporting unit exceeds its fair value, not to exceed the carrying amount of goodwill. This guidance is effective for the Company in its year ending December 31, 2020, with early adoption permitted for any impairment tests performed after January 1, 2017. The Company elected to early adopt this guidance as of January 1, 2017. The adoption of this guidance had no impact on the Company’s consolidated financial statements.

In May 2017, the FASB issued guidance that amends the scope of modification accounting for share-based payment arrangements to address both diversity in practice and the cost and complexity of accounting for the change to the terms or conditions of a share-based payment award. The amendment provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The guidance becomes effective for the Company in its year ending December 31, 2018 and early adoption is permitted. The standard may impact the Company in future periods if modifications are made to certain of its share-based awards.

In July 2017, the FASB issued guidance that addresses narrow issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The guidance becomes effective for the Company in its year ending December 31, 2019 and early adoption is permitted. The Company is currently assessing the impact that this guidance will have on its consolidated financial statements.

INVESTMENTS

12 Months Ended

Dec. 31, 2017

INVESTMENTS

INVESTMENTS

3. INVESTMENTS

Investments consist of the following:


			Gross Unrealized
					Losses
	Amortized				Less than		Greater than		Estimated
December 31, 2017	Cost		Gains		One Year		One Year		Fair Value
Short-term investments:
Available-for-sale securities:
U.S. government and agency debt securities	$	150,673	$	1	$	(130)	$	(233)	$	150,311
Corporate debt securities		56,552		3		(48)		(10)		56,497
International government agency debt securities		35,478		1		(54)		(25)		35,400
Total short-term investments		242,703		5		(232)		(268)		242,208
Long-term investments:
Available-for-sale securities:
Corporate debt securities		83,924		—		(300)		(34)		83,590
U.S. government and agency debt securities		48,948		—		(270)		(71)		48,607
International government agency debt securities		21,453		—		(118)		—		21,335
		154,325		—		(688)		(105)		153,532
Held-to-maturity securities:
Fixed term deposit account		1,667		222		—		—		1,889
Certificates of deposit		1,791		—		—		—		1,791
		3,458		222		—		—		3,680
Total long-term investments		157,783		222		(688)		(105)		157,212
Total investments	$	400,486	$	227	$	(920)	$	(373)	$	399,420

December 31, 2016
Short-term investments:
Available-for-sale securities:
U.S. government and agency debt securities	$	177,203	$	96	$	(51)	$	—	$	177,248
Corporate debt securities		128,119		47		(53)		—		128,113
International government agency debt securities		5,511		—		(16)		—		5,495
Total short-term investments		310,833		143		(120)		—		310,856
Long-term investments:
Available-for-sale securities:
U.S. government and agency debt securities		81,839		—		(391)		—		81,448
Corporate debt securities		31,223		—		(89)		—		31,134
International government agency debt securities		5,992		—		(18)		—		5,974
		119,054		—		(498)		—		118,556
Held-to-maturity securities:
Fixed term deposit account		1,667		—		(7)		—		1,660
Certificates of deposit		1,715		—		—		—		1,715
		3,382		—		(7)		—		3,375
Total long-term investments		122,436		—		(505)		—		121,931
Total investments	$	433,269	$	143	$	(625)	$	—	$	432,787

Realized gains and losses on the sales and maturities of marketable securities, which were identified using the specific identification method, were as follows:


	Year Ended December 31,
(In thousands)	2017		2016		2015
Proceeds from the sales and maturities of marketable securities	$	464,494	$	560,805	$	467,573
Realized gains	$	9	$	206	$	111
Realized losses	$	3	$	28	$	3

The Company’s available‑for‑sale and held‑to‑maturity securities at December 31, 2017 had contractual maturities in the following periods:


	Available-for-sale				Held-to-maturity
	Amortized		Estimated		Amortized		Estimated
(In thousands)	Cost		Fair Value		Cost		Fair Value
Within 1 year	$	234,771	$	234,273	$	1,791	$	1,791
After 1 year through 5 years		162,257		161,467		1,667		1,889
Total	$	397,028	$	395,740	$	3,458	$	3,680

At December 31, 2017, the Company believed that the unrealized losses on its available-for-sale investments were temporary. The investments with unrealized losses consisted of U.S. government and agency debt securities, corporate debt securities and international government agency debt securities. The unrealized losses are a result of market conditions related to increasing interest rates. In making the determination that the decline in fair value of these securities was temporary, the Company considered various factors, including, but not limited to: the length of time each security was in an unrealized loss position; the extent to which fair value was less than cost; financial condition and near-term prospects of the issuers; and the Company’s intent not to sell these securities and the assessment that it is more likely than not that the Company would not be required to sell these securities before the recovery of their amortized cost basis.

In February 2016, the Company entered into a collaboration and license option agreement with Reset Therapeutics, Inc. (“Reset”), a related party. The Company made an upfront, non-refundable payment of $10.0 million in partial consideration of the grant to the Company of the rights and licenses included in such agreement, which was included in R&D expense in the three months ended March 31, 2016, and simultaneously made a $15.0 million investment in exchange for shares of Reset’s Series B Preferred Stock. The Company was accounting for its investment in Reset under the equity method based on its percentage of ownership, its seat on the board of directors and its belief that it can exert significant influence over the operating and financial policies of Reset.

In September 2017, the Company recorded an other-than-temporary impairment charge of $10.5 million within “Other income (expense), net” in the accompanying consolidated statements of operations and comprehensive loss, which represented the Company’s remaining investment in Reset, as the Company believes that Reset is unable to generate future earnings that justify the carrying amount of the investment. During the years ended December 31, 2017 and 2016, the Company recorded a reduction in its investment in Reset of $2.8 million and $1.7 million, respectively, which represented the Company’s proportional share of Reset’s net loss for the periods. The Company’s $13.3 million investment at December 31, 2016 was included within “Other assets” in the accompanying consolidated balance sheets.

In May 2014, the Company entered into an agreement whereby it is committed to provide up to €7.4 million to a partnership, Fountain Healthcare Partners II, L.P. of Ireland (“Fountain”), which was created to carry on the business of investing exclusively in companies and businesses engaged in the healthcare, pharmaceutical and life sciences sectors. As of December 31, 2017, the Company’s total contribution in Fountain was equal to €3.7 million, and its commitment represents approximately 7% of the partnership’s total funding. The Company is accounting for its investment in Fountain under the equity method. During the years ended December 31, 2017, 2016 and 2015, the Company recorded a reduction in its investment in Fountain of $0.1 million, $0.4 million and $0.2 million, respectively, which represented the Company’s proportional share of Fountain’s net loss for the period.

FAIR VALUE

12 Months Ended

Dec. 31, 2017

FAIR VALUE

FAIR VALUE

4. FAIR VALUE

The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy and the valuation techniques the Company utilized to determine such fair value:


	December 31,
(In thousands)	2017		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	1,889	$	1,889	$	—	$	—
U.S. government and agency debt securities		198,918		124,958		73,960		—
Corporate debt securities		140,087		—		140,087		—
International government agency debt securities		56,735		—		56,735		—
Contingent consideration		84,800		—		—		84,800
Common stock warrants		1,395		—		—		1,395
Total	$	483,824	$	126,847	$	270,782	$	86,195


	December 31,
	2016		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	1,660	$	1,660	$	—	$	—
U.S. government and agency debt securities		258,696		156,370		102,326		—
Corporate debt securities		159,247		—		159,247		—
International government agency debt securities		11,469		—		11,469		—
Contingent consideration		63,200		—		—		63,200
Common stock warrants		1,392		—		—		1,392
Total	$	495,664	$	158,030	$	273,042	$	64,592

The Company transfers its financial assets and liabilities, measured at fair value on a recurring basis, between the fair value hierarchies at the end of each reporting period.

There were no transfers of any securities from Level 1 to Level 2 or from Level 2 to Level 1 during the year ended December 31, 2017. The following table is a rollforward of the fair value of the Company’s investments whose fair value was determined using Level 3 inputs at December 31, 2017:


(In thousands)	Fair Value
Balance, January 1, 2017	$	64,592
Increase in the fair value of contingent consideration		21,600
Increase in the fair value of warrants		3
Balance, December 31, 2017	$	86,195

The Company’s investments in U.S. government and agency debt securities, international government agency debt securities and corporate debt securities classified as Level 2 within the fair value hierarchy were initially valued at the transaction price and subsequently valued, at the end of each reporting period, utilizing market-observable data. The market-observable data included reportable trades, benchmark yields, credit spreads, broker/dealer quotes, bids, offers, current spot rates and other industry and economic events. The Company validated the prices developed using the market-observable data by obtaining market values from other pricing sources, analyzing pricing data in certain instances and confirming that the relevant markets are active.

The carrying amounts reflected in the consolidated balance sheets for cash and cash equivalents, receivables, other current assets, accounts payable and accrued expenses approximate fair value due to their short‑term nature. The fair value of the remaining financial instruments not currently recognized at fair value on the Company’s consolidated balance sheets at December 31, 2017 consisted of a $300.0 million term loan, bearing interest at LIBOR plus 2.75% with a LIBOR floor of 0.75% and maturity of September 25, 2021 (“Term Loan B‑1”). The estimated fair value of Term Loan B-1, which was based on quoted market price indications (Level 2 in the fair value hierarchy) and which may not be representative of actual values that could have been, or will be, realized in the future, was as follows at December 31, 2017:


	Carrying		Estimated
(In thousands)	Value		Fair Value
Term Loan B-1	$	281,436	$	285,671

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

INVENTORY

12 Months Ended

Dec. 31, 2017

INVENTORY

INVENTORY

5. INVENTORY

Inventory consists of the following:


	December 31,		December 31,
(In thousands)	2017		2016
Raw materials	$	29,883	$	19,413
Work in process		38,964		21,811
Finished goods(1)		24,428		21,774
Total inventory	$	93,275	$	62,998

(1)At December 31, 2017 and 2016, the Company had $8.7 million and $7.1 million, respectively, of finished goods inventory located at its third‑party warehouse and shipping service provider.

PROPERTY, PLANT AND EQUIPMENT

12 Months Ended

Dec. 31, 2017

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

6. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:


	December 31,		December 31,
(In thousands)	2017		2016
Land	$	6,293	$	5,913
Building and improvements		155,198		152,871
Furniture, fixtures and equipment		289,455		251,437
Leasehold improvements		19,578		19,241
Construction in progress		54,270		41,254
Subtotal		524,794		470,716
Less: accumulated depreciation		(240,058)		(205,931)
Total property, plant and equipment, net	$	284,736	$	264,785

Depreciation expense was $36.5 million, $33.3 million and $27.9 million for the years ended December 31, 2017, 2016 and 2015, respectively. Also, during the years ended December 31, 2017, 2016 and 2015, the Company wrote off furniture, fixtures and equipment that had a carrying value of $0.1 million, $0.9 million and $0.1 million, respectively, at the time of disposition.

Amounts included as construction in progress in the consolidated balance sheets primarily include capital expenditures at the Company’s manufacturing facility in Wilmington, Ohio. The Company continues to evaluate its manufacturing capacity based on expectations of demand for its products and will continue to record such amounts within construction in progress until such time as the underlying assets are placed into service. The Company continues to periodically evaluate whether facts and circumstances indicate that the carrying value of its long‑lived assets to be held and used may not be recoverable.

GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2017

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

7. GOODWILL AND INTANGIBLE ASSETS

Goodwill and intangible assets consist of the following:


		Year Ended						Year Ended
		December 31, 2017						December 31, 2016
(In thousands)	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Goodwill		$	92,873	$	—	$	92,873	$	92,873	$	—	$	92,873
Finite-lived intangible assets:
Collaboration agreements	12	$	465,590	$	(269,392)	$	196,198	$	465,590	$	(218,318)	$	247,272
NanoCrystal technology	13		74,600		(31,283)		43,317		74,600		(24,384)		50,216
OCR technologies	12		42,560		(25,907)		16,653		42,560		(21,821)		20,739
Total		$	582,750	$	(326,582)	$	256,168	$	582,750	$	(264,523)	$	318,227

The Company’s finite‑lived intangible assets consist of collaborative agreements and the NanoCrystal and OCR technologies acquired as part of the EDT acquisition. The Company recorded $62.1 million, $61.0 million and $57.7 million of amortization expense related to its finite‑lived intangible assets during the years ended December 31, 2017, 2016 and 2015, respectively. Based on the Company’s most recent analysis, amortization of intangible assets included within its consolidated balance sheets at December 31, 2017 is expected to be approximately $65.0 million, $55.0 million, $50.0 million, $40.0 million and $35.0 million in the years ending December 31, 2018 through 2022, respectively. Although the Company believes such available information and assumptions are reasonable, given the inherent risks and uncertainties underlying its expectations regarding such future revenues, there is the potential for the Company’s actual results to vary significantly from such expectations. If revenues are projected to change, the related amortization of the intangible assets will change in proportion to the change in revenues.

The Company performed its annual goodwill impairment test as of October 31, 2017. The Company elected to assess qualitative factors to determine whether it was necessary to perform the qualitative impairment test. Based on the weight of all available evidence, the Company determined that the fair value of each reporting unit more-likely-than-not exceeded its carrying value.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

12 Months Ended

Dec. 31, 2017

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:


	December 31,		December 31,
(In thousands)	2017		2016
Accounts payable	$	55,526	$	46,275
Accrued compensation		54,568		45,622
Accrued sales discounts, allowances and reserves		111,137		60,973
Accrued other		64,935		54,185
Total accounts payable and accrued expenses	$	286,166	$	207,055

LONG-TERM DEBT

12 Months Ended

Dec. 31, 2017

LONG-TERM DEBT

LONG-TERM DEBT

9. LONG‑TERM DEBT

Long‑term debt consists of the following:


	December 31,		December 31,
(In thousands)	2017		2016
Term Loan B-1, due September 25, 2021	$	281,436	$	283,666
Less: current portion		(3,000)		(3,000)
Long-term debt	$	278,436	$	280,666

Term Loans

Term Loan B‑1 was issued with a principal balance of $300.0 million, interest payable of LIBOR plus 2.75% with a LIBOR floor of 0.75%, and an original issue discount of $3.0 million. Term Loan B‑1 amortizes in equal quarterly amounts of 0.25% of the original principal amount of the loan, with the balance payable at maturity. In October 2016, the Company amended Term Loan B-1, which, among other things, extended the due date from September 25, 2019 to September 25, 2021 (the “Refinancing”).

The Refinancing involved multiple lenders who were considered members of a loan syndicate. In determining whether the Refinancing was to be accounted for as a debt extinguishment or a debt modification, the Company considered whether creditors remained the same or changed and whether the changes in debt terms were substantial. A change in the debt terms was considered to be substantial if the present value of the remaining cash flows under the new terms of Term Loan B-1 are at least 10% different from the present value of the remaining cash flows under the original terms of Term Loan B-1 (commonly referred to as the “10% Test”). The Company performed a separate 10% Test for each individual creditor participating in the loan syndication. The loans of any creditors no longer participating in the loan syndication were accounted for as a debt extinguishment. The Refinancing resulted in a $2.1 million charge in the three months ended December 31, 2016, which was included in “Interest expense” in the accompanying consolidated statement of operations and comprehensive loss.

A second term loan was issued with a principal balance of $75.0 million, interest payable of LIBOR plus 2.75% with no LIBOR floor, and an original issue discount of $0.4 million (“Term Loan B-2”). Term Loan B-2 amortized in equal quarterly amounts of 1.25% of the original principal amount of the loan, with the balance payable at maturity. In September 2016, Term Loan B-2 matured and the Company repaid the outstanding principal balance of $60.9 million in its entirety.

Term Loan B-1 is guaranteed by certain subsidiaries of the Company (the “Guarantors”) and is secured by a first priority lien on substantially all of the assets and properties of the Company and the Guarantors (subject to certain exceptions and limitations).

Scheduled maturities with respect to Term Loan B-1 are as follows (in thousands):


Year Ending December 31:
2018	$	3,000
2019		3,000
2020		3,000
2021		275,250
Total	$	284,250

Beginning on January 1, 2014, the Company became subject to mandatory prepayments of principal if certain excess cash flow thresholds, as defined in Term Loan B-1, were met.

Term Loan B-1 has an incremental facility capacity in an amount of $140.0 million, plus additional amounts as long as the Company meets certain conditions, including a specified leverage ratio. Term Loan B-1 includes a number of restrictive covenants that, among other things and subject to certain exceptions and baskets, impose operating and financial restrictions on the Company and certain of its subsidiaries. Term Loan B-1 also contains customary affirmative covenants and events of default. The Company was in compliance with its debt covenants at December 31, 2017.

At December 31, 2017, the Company’s balance of unamortized deferred financing costs and unamortized original issue discount costs were $1.0 million and $1.8 million, respectively. These costs are being amortized to interest expense over the estimated repayment period of Term Loan B-1 using the effective interest method. During the years ended December 31, 2017, 2016 and 2015, the Company had amortization expense of $0.8 million, $0.9 million and $0.9 million, respectively, related to deferred financing costs and original issue discount.

LOSS PER SHARE

12 Months Ended

Dec. 31, 2017

LOSS PER SHARE

LOSS PER SHARE

10. LOSS PER SHARE

Basic loss per ordinary share is calculated based upon net loss available to holders of ordinary shares divided by the weighted average number of shares outstanding. For the years ended December 31, 2017, 2016 and 2015, as the Company was in a net loss position, the diluted loss per share did not assume conversion or exercise of stock options and awards as they would have an anti-dilutive effect on loss per share.

The following potential ordinary equivalent shares were not included in the net loss per ordinary share calculation because the effect would have been anti-dilutive:


	Year Ended December 31,
(In thousands)	2017	2016	2015
Stock options	9,540	10,166	9,179
Restricted stock units	2,119	1,320	1,351
Total	11,659	11,486	10,530

SHAREHOLDERS' EQUITY	12 Months Ended
SHAREHOLDERS' EQUITY	Dec. 31, 2017
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY	11. SHAREHOLDERS’ EQUITY Share Repurchase Program On September 16, 2011, the board of directors authorized the continuation of the Alkermes, Inc. share repurchase program to repurchase up to $215.0 million of the Company’s ordinary shares at the discretion of management from time to time in the open market or through privately negotiated transactions. At December 31, 2017, approximately $101.0 million was available to repurchase ordinary shares pursuant to the repurchase program. All shares repurchased are recorded as treasury stock. The repurchase program has no set expiration date and may be suspended or discontinued at any time. During the years ended December 31, 2017 and 2016, the Company did not acquire any ordinary shares under the repurchase program.

SHARE-BASED COMPENSATION

12 Months Ended

Dec. 31, 2017

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

12. SHARE‑BASED COMPENSATION

Share‑based Compensation Expense

The following table presents share‑based compensation expense included in the Company’s consolidated statements of operations and comprehensive loss:


	Year Ended December 31,
(In thousands)	2017		2016		2015
Cost of goods manufactured and sold	$	7,596	$	8,633	$	8,880
Research and development		22,635		24,023		24,201
Selling, general and administrative		53,686		61,740		64,260
Total share-based compensation expense	$	83,917	$	94,396	$	97,341

During the years ended December 31, 2017, 2016 and 2015, $0.4 million, $1.1 million and $1.1 million, respectively, of share‑based compensation expense was capitalized and recorded as “Inventory” in the accompanying consolidated balance sheets.

Share‑Based Compensation Plans

The Company has two compensation plans pursuant to which awards are currently being made: (i) the 2011 Stock Option and Incentive Plan (the “2011 Plan”); and (ii) the 2008 Stock Option and Incentive Plan (the “2008 Plan”). The Company has two share‑based compensation plans pursuant to which outstanding awards have been made, but from which no further awards can or will be made: (i) the 1999 Stock Option Plan (the "1999 Plan"); and (ii) the 2006 Stock Option Plan for Non-Employee Directors (the "2006 Plan"). The 2011 Plan and the 2008 Plan provide for the issuance of non-qualified and incentive stock options, restricted stock, restricted stock units, cash-based awards and performance shares to employees, officers and directors of, and consultants to, the Company in such amounts and with such terms and conditions as may be determined by the compensation committee of the Company's board of directors, subject to provisions of the 2011 Plan and the 2008 Plan.

At December 31, 2017, there were 9.5 million ordinary shares authorized for issuance under the Company’s stock plans. The 2011 Plan provides that awards other than stock options will be counted against the total number of shares available under the plan in a 1.8-to‑1 ratio and the 2008 Plan provides that awards other than stock options will be counted against the total number of shares available under the plan in a 2‑to‑1 ratio.

Stock Options

A summary of stock option activity is presented in the following table:


	Number of	Weighted Average
	Shares	Exercise Price
Outstanding, January 1, 2017	14,202,167	$	33.17
Granted	2,030,075	$	55.04
Exercised	(1,135,670)	$	20.95
Forfeited	(266,433)	$	51.81
Expired	(56,727)	$	68.97
Outstanding, December 31, 2017	14,773,412	$	36.64
Exercisable, December 31, 2017	9,692,044	$	29.57

The weighted average grant date fair value of stock options granted during the years ended December 31, 2017, 2016 and 2015 was $25.81, $17.11 and $28.88, respectively. The aggregate intrinsic value of stock options exercised during the years ended December 31, 2017, 2016 and 2015 was $40.4 million, $35.0 million and $127.7 million, respectively.

At December 31, 2017, there were 5.0 million stock options expected to vest with a weighted average exercise price of $50.09 per share, a weighted average contractual remaining life of 8.3 years and an aggregate intrinsic value of $39.0 million. At December 31, 2017, the aggregate intrinsic value of stock options exercisable was $259.1 million with a weighted average remaining contractual term of 4.7 years. The number of stock options expected to vest was determined by applying the pre‑vesting forfeiture rate to the total outstanding options. The intrinsic value of a stock option is the amount by which the market value of the underlying stock exceeds the exercise price of the stock option.

At December 31, 2017, there was $50.6 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 1.9 years. Cash received from option exercises under the Company’s award plans during the years ended December 31, 2017, 2016 and 2015 was $23.5 million, $20.3 million and $45.0 million, respectively.

Time‑Vested Restricted Stock Units

A summary of time‑vested RSU activity is presented in the following table:


	Number of	Weighted Average
	Shares	Grant Date Fair Value
Unvested, January 1, 2017	2,074,416	$	42.60
Granted	703,630	$	54.85
Vested	(730,085)	$	43.14
Forfeited	(111,153)	$	44.73
Unvested, December 31, 2017	1,936,808	$	46.72

The weighted average grant date fair value of time‑vested RSUs granted during the years ended December 31, 2017, 2016 and 2015 were $54.85, $32.27 and $71.16, respectively. The total fair value of time‑vested RSUs that vested during the years ended December 31, 2017, 2016 and 2015, was $31.5 million, $26.0 million and $21.3 million, respectively.

At December 31, 2017, there was $34.4 million of total unrecognized compensation cost related to unvested time‑vested RSUs, which will be recognized over a weighted average remaining contractual term of 1.9 years.

Performance-Based Restricted Stock Units

In February 2017, the board of directors approved awards of performance-based restricted stock units (“PRSUs”) to all employees employed by the Company during 2017, in each case subject to vesting on the achievement of two future key milestones in the Company’s clinical-stage pipeline and the achievement of a revenue-related goal; provided that, if any such vesting event occurs during the first year after grant, the vesting of the PRSU award will not occur until the one-year anniversary of the grant date. The award will expire if the performance conditions have not been met on or before the three-year anniversary of the grant date.

A summary of PRSU activity is presented in the following table:


	Number of	Weighted Average
	Shares	Grant Date Fair Value
Unvested, January 1, 2017	—	$	—
Granted	1,169,949	$	54.73
Forfeited	(60,700)	$	54.78
Vested	(596)	$	54.57
Unvested, December 31, 2017	1,108,653	$	54.72

The grant date fair value of the PRSUs was equal to the market value of the Company’s stock on the date of grant. At December 31, 2017, the Company does not consider it probable that the performance criteria will be met and has not recognized any share-based compensation expense related to these PRSUs. At December 31, 2017, there was $60.7 million of unrecognized compensation cost related to these PRSUs, which would be recognized in accordance with the terms of the award when the Company deems it probable that the performance criteria will be met.

COLLABORATIVE ARRANGEMENTS

12 Months Ended

Dec. 31, 2017

COLLABORATIVE ARRANGEMENTS

COLLABORATIVE ARRANGEMENTS

13. COLLABORATIVE ARRANGEMENTS

The Company has entered into several collaborative arrangements to develop and commercialize products and, in connection with such arrangements, to access technologies, financial, marketing, manufacturing and other resources. Refer to the “Patents and Proprietary Rights” section in “Part I, Item 1— Business” of this Annual Report for information with respect to intellectual property protection for these products. The collaboration revenue the Company has earned in the years ended December 31, 2017, 2016 and 2015 is as follows:


	Year Ended December 31,
(In thousands)	2017		2016		2015
MANUFACTURING AND ROYALTY REVENUE:
Significant collaborative arrangements	$	462,568	$	431,302	$	401,236
All other collaborative arrangements		42,740		55,945		74,052
Total manufacturing and royalty revenue	$	505,308	$	487,247	$	475,288

LICENSE REVENUE:
Significant collaborative arrangements	$	28,000	$	—	$	—
Total research and development revenue	$	28,000	$	—	$	—

RESEARCH AND DEVELOPMENT REVENUE:
Significant collaborative arrangements	$	2,314	$	403	$	582
All other collaborative arrangements		4,918		1,898		3,437
Total research and development revenue	$	7,232	$	2,301	$	4,019

The Company’s significant collaborative arrangements are described below:

Janssen

INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA

Under its license agreement with Janssen Pharmaceutica N.V., the Company granted Janssen a worldwide exclusive license under its NanoCrystal technology to develop, commercialize and manufacture INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA and related products.

Under this license agreement, the Company received milestone payments upon the achievement of certain development goals from Janssen; there are no further milestones to be earned under this agreement. The Company receives tiered royalty payments between 5% and 9% of INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA end-market net sales in each country where the license is in effect, with the exact royalty percentage determined based on aggregate worldwide net sales. The tiered royalty payments consist of a patent royalty and a know‑how royalty, both of which are determined on a country‑by‑country basis. The patent royalty, which equals 1.5% of net sales, is payable in each country until the expiration of the last of the patents claiming the product in such country. The know‑how royalty is a tiered royalty of 3.5%, 5.5% and 7.5% on aggregate worldwide net sales of below $250 million, between $250 million and $500 million, and greater than $500 million, respectively. The know‑how royalty is payable for the later of 15 years from first commercial sale of a product in each individual country or March 31, 2019, subject in each case to the expiry of the license agreement. These royalty payments may be reduced in any country based on patent litigation or on competing products achieving certain minimum sales thresholds. The license agreement expires upon the later of (i) March 31, 2019 or (ii) the expiration of the last of the patents subject to the agreement. After expiration, Janssen retains a non‑exclusive, royalty‑free license to develop, manufacture and commercialize the products.

Janssen may terminate the license agreement in whole or in part upon three months’ notice to the Company. The Company and Janssen have the right to terminate the agreement upon a material breach of the other party, which is not cured within a certain time period, or upon the other party’s bankruptcy or insolvency.

Under its agreements with Janssen, the Company recognized royalty revenues from the end-market net sales of INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA of $214.9 million, $184.2 million and $149.7 million during the years ended December 31, 2017, 2016 and 2015, respectively.

RISPERDAL CONSTA

Under a product development agreement, the Company collaborated with Janssen on the development of RISPERDAL CONSTA. Under the development agreement, Janssen provided funding to the Company for the development of RISPERDAL CONSTA and Janssen is responsible for securing all necessary regulatory approvals for the product.

Under two license agreements, the Company granted Janssen and an affiliate of Janssen exclusive worldwide licenses to use and sell RISPERDAL CONSTA. Under its license agreements with Janssen, the Company receives royalty payments equal to 2.5% of Janssen’s end-market net sales of RISPERDAL CONSTA in each country where the license is in effect based on the quarter when the product is sold by Janssen. This royalty may be reduced in any country based on lack of patent coverage and significant competition from generic versions of the product. Janssen can terminate the license agreements upon 30 days’ prior written notice to the Company. Either party may terminate the license agreements by written notice following a breach which continues for 90 days after the delivery of written notice thereof or upon the other party’s insolvency. The licenses granted to Janssen expire on a country‑by‑country basis upon the later of: (i) the expiration of the last patent claiming the product in such country; or (ii) 15 years after the date of the first commercial sale of the product in such country, provided that in no event will the license granted to Janssen expire later than the twentieth anniversary of the first commercial sale of the product in each such country, with the exception of Canada, France, Germany, Italy, Japan, Spain and the United Kingdom, in each case where the fifteen‑year minimum shall pertain regardless. After expiration, Janssen retains a non‑exclusive, royalty‑free license to manufacture, use and sell RISPERDAL CONSTA.

The Company exclusively manufactures RISPERDAL CONSTA for commercial sale. Under its manufacturing and supply agreement with Janssen, the Company records manufacturing revenues when product is shipped to Janssen, based on a percentage of Janssen’s net unit sales price for RISPERDAL CONSTA for the applicable calendar year. This percentage is determined based on Janssen’s unit demand for such calendar year and varies based on the volume of units shipped, with a minimum manufacturing fee of 7.5%. The manufacturing and supply agreement terminates on expiration of the license agreements. In addition, either party may terminate the manufacturing and supply agreement upon a material breach by the other party, which is not resolved within 60 days after receipt of a written notice specifying the material breach or upon written notice in the event of the other party’s insolvency or bankruptcy. Janssen may terminate the agreement upon six months’ written notice to the Company. In the event that Janssen terminates the manufacturing and supply agreement without terminating the license agreements, the royalty rate payable to the Company on Janssen’s net sales of RISPERDAL CONSTA would increase from 2.5% to 5.0%.

Under its agreements with Janssen, the Company recognized manufacturing revenues related to RISPERDAL CONSTA of $64.8 million, $64.9 million and $76.5 million during the years ended December 31, 2017, 2016 and 2015, respectively. Under its agreements with Janssen, the Company recognized royalty revenues related to RISPERDAL CONSTA of $20.1 million, $22.3 million and $24.2 million during the years ended December 31, 2017, 2016 and 2015, respectively.

Acorda

Under an amended and restated license agreement, the Company granted Acorda an exclusive worldwide license to use and sell and, solely in accordance with its supply agreement, to make or have made AMPYRA/FAMPYRA. The Company receives certain commercial and development milestone payments, license revenues and a royalty of approximately 10% based on net sales of AMPYRA/FAMPYRA by Acorda and its sub‑licensee, Biogen. This royalty payment may be reduced in any country based on lack of patent coverage, competing products achieving certain minimum sales thresholds and whether Alkermes manufactures the product.

In June 2009, the Company entered into an amendment of the amended and restated license agreement and the supply agreement with Acorda and, pursuant to such amendment, consented to the sublicense by Acorda to Biogen of Acorda’s rights to use and sell FAMPYRA in certain territories outside of the U.S. (to the extent that such rights were to be sublicensed to Biogen pursuant to its separate collaboration and license agreement with Acorda). Under this amendment, the Company agreed to modify certain terms and conditions of the amended and restated license agreement and the supply agreement with Acorda to reflect the sublicense by Acorda to Biogen.

Acorda has the right to terminate the amended and restated license agreement upon 90 days’ written notice. The Company has the right to terminate the amended and restated license agreement for countries in which Acorda fails to launch a product within a specified time after obtaining the necessary regulatory approval or fails to file regulatory approvals within a commercially reasonable time after completion of and receipt of positive data from all pre-clinical and clinical studies required for filing a marketing authorization application. Either party has the right to terminate the amended and restated license agreement by written notice following a material breach of the other party, which is not cured within a certain time period, or upon the other party’s entry into bankruptcy or dissolution proceedings. If the Company terminates Acorda's license in any country, the Company is entitled to a license from Acorda of its patent rights and know-how relating to the product as well as the related data, information and regulatory files, and to market the product in the applicable country, subject to an initial payment equal to Acorda's cost of developing such data, information and regulatory files and to ongoing royalty payments to Acorda. Subject to the termination of the amended and restated license agreement, licenses granted under the license agreement terminate on a country-by-country basis on the later of (i) September 26, 2018 or (ii) the expiration of the last to expire of our patents or the existence of a threshold level of competition in the marketplace.

Under its commercial manufacturing supply agreement with Acorda, the Company manufactures and supplies AMPYRA/FAMPYRA for Acorda (and its sub‑licensee, Biogen). Under the terms of the agreement, Acorda may obtain up to 25% of its total annual requirements of product from a second‑source manufacturer. The Company receives manufacturing royalties equal to 8% of net selling price for all product manufactured by it and a compensating payment for product manufactured and supplied by a third party. The Company may terminate the commercial manufacturing supply agreement upon 12 months’ prior written notice to Acorda and either party may terminate the commercial manufacturing supply agreement following a material and uncured breach of the commercial manufacturing supply agreement or amended and restated license agreement or the entry into bankruptcy or dissolution proceedings by the other party. In addition, subject to early termination of the commercial manufacturing supply agreement noted above, the commercial manufacturing supply agreement terminates upon the expiry or termination of the amended and restated license agreement.

The Company is entitled to receive the following milestone payments under its amended and restated license agreement with Acorda for each of the third and fourth new indications of the product developed thereunder:

●initiation of a phase 3 clinical trial: $1.0 million;

●acceptance of a New Drug Application (“NDA”) by the FDA: $1.0 million;

●approval of the NDA by the FDA: $1.5 million; and

●the first commercial sale: $1.5 million.

In January 2011, the Company entered into a development and supplemental agreement to its amended and restated license agreement and commercial manufacturing supply agreement with Acorda. Under the terms of this agreement, the Company granted Acorda the right, either with the Company or with a third party, in each case in accordance with certain terms and conditions, to develop new formulations of dalfampridine or other aminopyridines. Under the terms of the agreement, Acorda has the right to select either a formulation developed by the Company or by a third party for commercialization. The Company is entitled to development fees it incurs in developing formulations under the development and supplemental agreement and, if Acorda selects and commercializes any such formulation, to milestone payments (for new indications if not previously paid), license revenues and royalties in accordance with its amended and restated license agreement for the product, and either manufacturing fees as a percentage of net selling price for product manufactured by the Company or compensating fees for product manufactured by third parties. If, under the development and supplemental agreement, Acorda selects a formulation not developed by the Company, then the Company will be entitled to various compensation payments and has the first option to manufacture such third‑party formulation. The development and supplemental agreement expires upon the expiry or termination of the amended and restated license agreement and may be earlier terminated by either party following an uncured breach of the agreement by the other party.

Acorda’s financial obligations under this development and supplemental agreement continue for a minimum of ten years from the first commercial sale of such new formulation, and may extend for a longer period of time, depending on the intellectual property rights protecting the formulation, regulatory exclusivity and/or the absence of significant market competition. These financial obligations survive termination of the agreement.

During the years ended December 31, 2017, 2016 and 2015, the Company recognized $117.0 million, $114.2 million and $104.7 million, respectively, of revenues from its arrangements with Acorda.

AstraZeneca

In May 2000, the Company entered into a development and license agreement with Amylin for the development of exendin products falling within the scope of its patents, including the once-weekly formulation of exenatide marketed as BYDUREON. In August 2012, Bristol-Myers Squibb Company (“Bristol-Myers”) acquired Amylin. From August 2012 through January 2014, Bristol-Myers and AstraZeneca jointly developed and commercialized Amylin’s exendin products, including BYDUREON, through their diabetes collaboration. In April 2013, Bristol-Myers completed its assumption of all global commercialization responsibility related to the marketing of BYDUREON from Amylin’s former partner, Eli Lilly & Company. In February 2014, AstraZeneca acquired sole ownership from Bristol-Myers of the intellectual property and global rights related to BYDUREON and Amylin’s other exendin products, including Amylin’s rights and obligations under the Company’s development and license agreement.

Pursuant to the development and license agreement, AstraZeneca has an exclusive, worldwide license to the Company’s polymer-based microsphere technology for the development and commercialization of injectable extended-release formulations of exendins and other related compounds. The Company receives funding for research and development and will also receive royalty payments based on future net product sales. Upon the achievement of certain development and commercialization goals, the Company received milestone payments consisting of cash and warrants for Amylin common stock; there are no further milestones to be earned under the agreement. In October 2005 and in July 2006, the Company amended the development and license agreement. Under the amended development and license agreement (i) the Company is responsible for formulation and is principally responsible for non-clinical development of any products that may be developed pursuant to the agreement and for manufacturing these products, except to the extent manufacturing rights have been transferred to Amylin; and (ii) the Company transferred certain of its technology related to the manufacture of BYDUREON to Amylin and agreed to the manufacture of BYDUREON by Amylin.

Under the Company’s amended development and license agreement, AstraZeneca is responsible for conducting clinical trials, securing regulatory approvals, and commercializing exenatide products including BYDUREON, on a worldwide basis.

Until December 31, 2021, the Company will receive royalties equal to 8% of net sales from the first 40 million units of BYDUREON products sold in any particular calendar year and 5.5% of net sales from units sold beyond the first 40 million units for that calendar year. Thereafter, during the term of the development and license agreement, the Company will receive royalties equal to 5.5% of net sales of products sold. The Company was entitled to, and received a $7.0 million milestone payment related to the first commercial sale of BYDUREON in the EU and a $7.0 million milestone payment related to the first commercial sale of BYDUREON in the U.S.

The development and license agreement expires on the later of: (i) ten years from the first commercial sale of the last of the products covered by the development and license agreement; or (ii) the expiration or invalidation of all of the Company’s patents licensed under the agreement. Upon expiration, all licenses become non‑exclusive and royalty‑free. AstraZeneca may terminate the development and license agreement for any reason upon 180 days’ written notice to the Company. In addition, either party may terminate the development and license agreement upon a material default or breach by the other party that is not cured within 60 days after receipt of written notice specifying the default or breach. Alkermes may terminate the development and license agreement upon AstraZeneca’s insolvency or bankruptcy.

During the years ended December 31, 2017, 2016 and 2015, the Company recognized $45.7 million, $45.6 million and $46.1 million, respectively, of revenues from its arrangements with respect to BYDUREON.

Biogen

Under a license and collaboration agreement, the Company granted Biogen a worldwide, exclusive, sublicensable license to develop, manufacture and commercialize BIIB098 and other products covered by patents licensed to Biogen under the agreement.

Upon entering into this agreement in November 2017, the Company received an up-front cash payment of $28.0 million. The Company is also eligible to receive additional payments upon achievement of milestones, as follows: (i) a $50.0 million option payment upon Biogen’s decision to continue the collaboration after having reviewed certain data from our long-term safety clinical trial and part A of the head-to-head phase 3 gastrointestinal tolerability clinical trial comparing BIIB098 to TECFIDERA and (ii) a $150.0 million payment upon an approval by the FDA on or before December 31, 2021 of a 505(b)(2) NDA (or, in certain circumstances, a 505(b)(1) NDA) for BIIB098. The Company is also eligible to receive additional payments upon achievement of milestones with respect to the first two products, other than BIIB098, covered by patents licensed to Biogen under the agreement.

In addition, the Company will receive a mid-teens percentage royalty on worldwide net sales of BIIB098, subject to, under certain circumstances, minimum annual payments for the first five years following FDA approval of BIIB098. The Company will also receive royalties on net sales of products, other than BIIB098, covered by patents licensed to Biogen under the agreement, at tiered royalty rates calculated as percentages of net sales ranging from high-single digits to sub-teen double digits. All royalties are payable on a product-by-product and country-by-country basis until the later of (i) the last-to-expire patent right covering the applicable product in the applicable country and (ii) a specified period of time from the first commercial sale of the applicable product in the applicable country. Royalties for all products and the minimum annual payments for BIIB098 are subject to customary reductions.

Except in certain limited circumstances, until FDA approval of an NDA for BIIB098, the Company is responsible for the development of BIIB098 for the treatment of MS. Biogen paid a portion of the BIIB098 development costs the Company incurred in 2017 and, beginning on January 1, 2018, Biogen will be responsible for all BIIB098 development costs the Company incurs, subject to annual budget limitations. After the date of FDA approval of an NDA for BIIB098 for the treatment of MS, Biogen will be responsible for all development and commercialization activities, as well as the costs of all such activities, for BIIB098 and all other products covered by patents licensed to Biogen under the agreement. The Company has retained the right to manufacture clinical supplies and commercial supplies of BIIB098 and all other products covered by patents licensed to Biogen under the agreement, subject to Biogen’s right to manufacture or have manufactured commercial supplies as a back-up manufacturer and subject to good faith agreement by the parties on the terms of such manufacturing arrangements.

If BIIB098 discontinuations due to gastrointestinal adverse events in BIIB098’s long-term safety clinical trial exceed a certain pre-defined threshold or BIIB098 demonstrates a greater rate of discontinuations as compared to TECFIDERA in part A of the head-to-head phase 3 gastrointestinal tolerability clinical trial, then “GI Inferiority” shall exist, and (i) Biogen shall have the right to recapture from the Company its $50.0 million option payment through certain temporary reductions in royalty rates, (ii) the minimum annual payments Biogen owes to the Company shall terminate, and (iii) there shall be no reversion of BIIB098 to the Company in the event that Biogen terminates the agreement and does not commercialize BIIB098.

Unless earlier terminated, the agreement will remain in effect until the expiry of all royalty obligations. Biogen has the right to terminate the agreement at will, on a product-by-product basis or in its entirety. Either party has the right to terminate the agreement following any governmental prohibition of the transactions effected by the agreement, or in connection with an insolvency event involving the other party. Upon termination of the agreement by either party, if, prior to such termination (i) BIIB098 did not meet GI Inferiority or (ii) BIIB098 met GI Inferiority but Biogen commercialized BIIB098, then, at the Company’s request, the BIIB098 program will revert to the Company.

INCOME TAXES

12 Months Ended

Dec. 31, 2017

INCOME TAXES

INCOME TAXES

14. INCOME TAXES

The Company’s provision (benefit) for income taxes is comprised of the following:


	Year Ended December 31,
(In thousands)	2017		2016		2015
Current income tax provision:
U.S. federal	$	6,964	$	3,163	$	29,959
U.S. state		350		480		1,615
Ireland		—		—		77
Rest of world		123		103		94
Deferred income tax provision (benefit):
U.S. federal		8,188		(9,278)		(18,336)
U.S. state		(933)		(269)		(604)
Ireland		(21)		(142)		(9,647)
Total tax provision (benefit)	$	14,671	$	(5,943)	$	3,158

The income tax provision in 2017 and 2015 and the income tax benefit in 2016 was primarily due to U.S. federal and state taxes. The unfavorable change in income taxes in 2017, as compared to 2016, was primarily due to the enactment of the Tax Cuts and Jobs Act (the “Act” or “Tax Reform”) and an increase in income earned in the U.S., partially offset by the recognition of excess tax benefits related to share-based compensation. The favorable change in income taxes in 2016, as compared to 2015, was primarily due to a reduction in income earned in the U.S. A $4.2 million and $28.6 million benefit was recorded to additional paid‑in capital in the years ended December 31, 2016 and 2015, respectively, with a corresponding reduction to current taxes payable. This was primarily due to the utilization of current year tax benefits and NOL carryforwards derived from the exercise of employee stock options and vesting of restricted stock units.

Tax Reform was enacted in December 2017. The Company is primarily subject to the business related provisions outlined in Subtitle C to the Act, as well as the international tax provisions for inbound transactions outlined in Subtitle D, Part II, to the Act. The Company recorded a $21.5 million discrete tax expense in the quarter ended December 31, 2017 to account for the reduction in the U.S. federal tax rate from 35% to 21%. The Act also removes the exception for performance based compensation in §162(m) of the Internal Revenue Code (the “Code”) on a prospective basis. Performance based compensation provided pursuant to a written binding agreement entered into prior to November 2, 2017 will continue to be deductible provided no significant modification is made. The Company believes that performance based compensation, provided prior to November 2, 2017, was provided pursuant to written binding agreements and will be deductible. As of December 31, 2017, the Company has a deferred tax asset of $13.3 million for this item, which is recorded as a provisional amount. If the Company’s position is not sustained, then it would record a deferred tax expense for part or all of this amount. The accounting for this item is incomplete and may change as the Company’s interpretation of the provisions of the Act evolve, additional information becomes available or interpretive guidance is issued by the U.S. Treasury. The final determination will be completed no later than one year from the enactment of the Act.

No provision for income tax has been provided on undistributed earnings of the Company's foreign subsidiaries because such earnings may be repatriated to Ireland without incurring any tax liability. Cumulative unremitted earnings of overseas subsidiaries totaled approximately $160.3 million at December 31, 2017.

The distribution of the Company’s loss before the provision (benefit) for income taxes by geographical area consisted of the following:


	Year Ended December 31,
(In thousands)	2017		2016		2015
Ireland	$	(172,363)	$	(212,198)	$	(289,105)
U.S.		2,414		(18,935)		38,398
Rest of world		26,675		16,746		26,702
Loss before provision (benefit) for income taxes	$	(143,274)	$	(214,387)	$	(224,005)

The components of the Company’s net deferred tax assets (liabilities) were as follows:


	December 31,		December 31,
(In thousands)	2017		2016
Deferred tax assets:
Irish NOL carryforwards	$	177,435	$	156,147
Tax credits		71,366		7,608
Share-based compensation		40,048		52,479
Other		13,239		12,233
Less: valuation allowance		(172,797)		(141,859)
Total deferred tax assets		129,291		86,608
Deferred tax liabilities:
Intangible assets		(18,184)		(20,805)
Property, plant and equipment		(12,040)		(17,541)
Other		(818)		(826)
Total deferred tax liabilities		(31,042)		(39,172)
Net deferred tax assets	$	98,249	$	47,436

In March 2016, the FASB issued guidance as part of its simplification initiative that involves several aspects of the accounting for share-based payment transactions including the requirement that all future excess tax benefits and tax deficiencies be recognized as income tax expense or benefit in the income statement. On January 1, 2017, the Company adopted this standard on a modified retrospective basis, which resulted in a $57.8 million increase to its deferred tax assets, a $3.7 million decrease in liabilities and a $61.5 million favorable cumulative-effect adjustment to accumulated deficit due to the change in the accounting treatment of excess tax benefits.

The activity in the valuation allowance associated with deferred taxes consisted of the following:


	Balance at				Balance at
	Beginning of				End of
(In thousands)	Period		Additions (1)		Period
Deferred tax asset valuation for the year ended December 31, 2015	$	(71,796)	$	(34,950)	$	(106,746)
Deferred tax asset valuation for the year ended December 31, 2016	$	(106,746)	$	(35,113)	$	(141,859)
Deferred tax asset valuation for the year ended December 31, 2017	$	(141,859)	$	(30,938)	$	(172,797)

(1)The additions in each of the periods presented relate primarily to Irish NOL’s.

At December 31, 2017, the Company maintained a valuation allowance of $9.4 million against certain U.S. state deferred tax assets and $163.4 million against certain Irish deferred tax assets as the Company has determined that it is more-likely-than-not that these net deferred tax assets will not be realized. If the Company demonstrates consistent profitability in the future, the evaluation of the recoverability of these deferred tax assets could change and the remaining valuation allowances could be released in part or in whole. If the Company incurs losses in the U.S. in the future, or experiences significant excess tax benefits arising from the future exercise of stock options and/or the vesting of RSUs, the evaluation of the recoverability of the U.S. deferred tax assets could change and a valuation allowance against the U.S. deferred tax assets may be required in part or in whole.

As of December 31, 2017, the Company had $1.2 billion of Irish NOL carryforwards, $5.9 million of state NOL carryforwards, $57.5 million of federal R&D credits, $10.0 million of alternative minimum tax (“AMT”) credits and $11.9 million of state tax credits which will either expire on various dates through 2037 or can be carried forward indefinitely. These loss and credit carryforwards are available to reduce certain future Irish and foreign taxable income and tax and, in the case of the alternative minimum tax credits, may be refundable. These loss and credit carryforwards are subject to review and possible adjustment by the appropriate taxing authorities. These loss and credit carryforwards, which may be utilized in a future period, may be subject to limitations based upon changes in the ownership of the Company's ordinary shares.

In addition to deferred tax assets and liabilities, the Company recorded deferred charges related to certain intercompany asset transfers. Deferred charges are included in the following accounts:


	December 31,		December 31,
(In thousands)	2017		2016
Prepaid expenses and other current assets	$	188	$	188
Other assets — long-term		686		862
Total deferred charges	$	874	$	1,050

The Company will adopt ASU 2016-16 effective January 1, 2018 requiring an unfavorable cumulative-effect adjustment of $0.9 million recorded to accumulated deficit to write-off the unamortized deferred tax charge at December 31, 2017. In addition, the Company will record a $17.8 million deferred tax asset to take account of certain basis differences on intangible assets, with a corresponding adjustment to valuation allowance.

A reconciliation of the Company’s statutory tax rate to its effective tax rate is as follows:


	Year Ended December 31,
(In thousands, except percentage amounts)	2017			2016			2015
Statutory tax rate		12.5	%		12.5	%		12.5	%

Income tax provision at statutory rate	$	(17,909)		$	(26,798)		$	(28,001)

Change in valuation allowance		26,771			35,290			37,312
Federal tax law change(1)		21,453			—			—
Impairment on equity method investment		1,662			—			—
Uncertain tax positions		830			910			1,213
Foreign rate differential(2)		(682)			2,723			13,951
Share-based compensation		(1,205)			2,072			738
U.S. state income taxes, net of U.S. federal benefit		(558)			(2)			557
Intercompany amounts(3)		(5,041)			(5,209)			(3,649)
Irish rate differential(4)		(2,675)			(5,231)			(7,318)
R&D credit		(9,326)			(10,572)			(12,193)
Other permanent items(5)		1,351			874			548
Income tax provision (benefit)	$	14,671		$	(5,943)		$	3,158

Effective tax rate		(10.2)	%		2.8	%		(1.4)	%

(1)Represents a $21.5 million deferred tax expense recorded as a discrete item during the three months ended December 31, 2017, as a result of the reduction in the U.S. federal tax rate from 35% to 21% .

(2)Represents income or losses of non-Irish subsidiaries, including U.S. subsidiaries, subject to tax at a rate other than the Irish statutory rate.

(3)Intercompany amounts include cross-territory eliminations, the pre-tax effect of which has been eliminated in arriving at the Company's consolidated loss before taxes.

(4)Represents income or losses of Irish companies subject to tax at a rate other than the Irish statutory rate.

(5)Other permanent items include, but are not limited to, non-deductible meals and entertainment expenses, non-deductible lobbying expenses and non-deductible compensation of senior officers of the Company.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	Unrecognized
(In thousands)	Tax Benefits
Balance, December 31, 2014	$	2,565
Additions based on tax positions related to prior periods		—
Additions based on tax positions related to the current period		1,213
Balance, December 31, 2015	$	3,778
Reductions based on tax positions related to prior periods		(7)
Additions based on tax positions related to the current period		917
Balance, December 31, 2016	$	4,688
Reductions based on tax positions related to prior periods		(47)
Additions based on tax positions related to the current period		877
Balance, December 31, 2017	$	5,518

The unrecognized tax benefits at December 31, 2017, if recognized, would affect the Company's effective tax rate. The Company does not anticipate that the amount of existing unrecognized tax benefits will significantly increase or decrease within the next 12 months. The Company has elected to include interest and penalties related to uncertain tax positions as a component of its provision for taxes. For the years ended December 31, 2017, 2016 and 2015, the Company's accrued interest and penalties related to uncertain tax positions were not material.

The Company’s major taxing jurisdictions include Ireland and the U.S. (federal and state). These jurisdictions have varying statutes of limitations. In the U.S., the 2014 through 2017 fiscal years remain subject to examination by the respective tax authorities. In Ireland, the years 2013 to 2017 remain subject to examination by the Irish tax authorities. Additionally, because of the Company’s Irish and U.S. loss carryforwards and credit carryforwards, certain tax returns from fiscal years 1999 onward may also be examined. These years generally remain open for three to four years after the loss carryforwards and credit carryforwards have been utilized.

During 2017, the IRS completed its examination of the year ended December 31, 2014 for Alkermes U.S. Holdings, Inc. without any material adjustments. The State of New York concluded their examination of Alkermes U.S. Holdings, Inc. for the years ended December 31, 2015 and 2014 and the nine months ended December 31, 2013, without any material adjustment. The years ended December 31, 2015 and 2014 for Alkermes U.S. Holdings, Inc. are currently under examination by the State of Illinois.

DIVESTITURE

12 Months Ended

Dec. 31, 2017

DIVESTITURE

DIVESTITURE

15. DIVESTITURE

On April 10, 2015, the Company completed the Gainesville Transaction with Recro pursuant to a Purchase and Sale Agreement (the “Purchase Agreement”) entered into on March 7, 2015 among the Company and the Purchasers.

In accordance with the terms of the Purchase Agreement, at the closing of the Disposition, the Purchasers made an initial cash payment to the Company of $50.0 million, a $4.0 million payment related to the net working capital, and issued the Company a seven-year warrant to purchase an aggregate of 350,000 shares of Recro common stock at a per share exercise price equal to $19.46, two times the closing price of Recro’s common stock on the day prior to closing. The Company is also eligible to receive low double-digit royalties on net sales of IV/IM and parenteral forms of Meloxicam and any other product with the same active ingredient as Meloxicam IV/IM that is discovered or identified using certain of the Company’s intellectual property to which Recro was provided a right of use, through license or transfer, pursuant to the Gainesville Transaction (together, the “Meloxicam Products”) and up to $125.0 million in milestone payments upon the achievement of certain regulatory and sales milestones related to the Meloxicam Products.

The gain on the Gainesville Transaction was determined as follows:


	April 10, 2015
	(In thousands)
Sales Proceeds:
Cash	$	54,010
Fair value of warrants		2,123
Fair value of contingent consideration		57,600
Total consideration received	$	113,733
Less net assets sold		(101,373)
Less transaction costs		(2,724)
Gain on the Gainesville Transaction	$	9,636

The Company recorded the gain on the Gainesville Transaction within the accompanying consolidated statement of operations and comprehensive loss. The Company determined that the sale of assets in connection with the Gainesville Transaction did not constitute a strategic shift and that it did not and would not have a major effect on its operations and financial results. Accordingly, the operations from the Gainesville Transaction were not reported in discontinued operations.

Geraldine Henwood, President and Chief Executive Officer of Recro, was a former member of the Company’s board of directors. On March 7, 2015, Ms. Henwood notified the Company’s board of directors that she was resigning as a member of the board of directors effective immediately. Ms. Henwood’s decision was not the result of any disagreement between the Company and herself on any matter, including with respect to the Company’s operations, policies or practices.

During the year ended December 31, 2015, the Gainesville, GA facility and associated intellectual property (“IP”) generated income before income taxes of $4.5 million.

At December 31, 2017, the Company determined the value of the Gainesville Transaction’s contingent consideration using the following valuation approaches:

●The Company is entitled to receive $45.0 million upon regulatory approval of an NDA for the first Meloxicam Product. The fair value of the regulatory milestone was estimated based on applying the likelihood of achieving the regulatory milestone and applying a discount rate from the expected time the milestone occurs to the balance sheet date. The Company expects the regulatory milestone event to occur in the second quarter of 2018 and used a discount rate of 3.0%;

●The Company is entitled to receive future royalties on net sales of Meloxicam Products. To estimate the fair value of the future royalties, the Company assessed the likelihood of a Meloxicam Product being approved for sale and estimated the expected future sales given approval and IP protection. The Company then discounted these expected payments using a discount rate of 15.0%, which it believes captures a market participant’s view of the risk associated with the expected payments; and

●The Company is entitled to receive payments of up to $80.0 million upon achieving certain sales milestones on future sales of the Meloxicam Product. The sales milestones were determined through the use of a real options approach, where net sales are simulated in a risk-neutral world. To employ this methodology, the Company used a risk-adjusted expected growth rate based on its assessments of expected growth in net sales of the approved Meloxicam Product, adjusted by an appropriate factor capturing their respective correlation with the market. A resulting expected (probability-weighted) milestone payment was then discounted at a cost of debt, which ranged from 3.5% to 5.4%.

At December 31, 2017 and 2016, the Company determined that the value of the Gainesville Transaction’s contingent consideration was $84.8 million and $63.2 million, respectively. The Company recorded the increase of $21.6 million and $7.9 million and a decrease of $2.3 million in the value of the contingent consideration during the years ended December 31, 2017, 2016 and 2015, respectively, within “Change in the fair value of contingent consideration” in the accompanying consolidated statements of operations and comprehensive loss.

The warrants that the Company received in connection with the Disposition for the purchase of 350,000 shares of Recro’s common stock were determined to have a fair value of $2.1 million on the closing date of the transaction. At December 31, 2017, the Company determined that the value of these warrants had decreased to $1.4 million and recorded the warrants within “Other long-term assets” in the accompanying consolidated balance sheets. The company used a Black-Scholes model with the following assumptions to determine the fair value of these warrants at December 31, 2017:


Closing stock price at December 31, 2017	$	9.25
Warrant strike price	$	19.46
Expected term (years)		4.27
Risk-free rate		2.09	%
Volatility		77.0	%

The increase in the fair value of the warrants of less than $0.1 million and the decrease in the fair value of the warrants of $0.4 million and $0.3 million during the years ended December 31, 2017, 2016 and 2015, respectively, was recorded within “Other income (expense), net” in the accompanying consolidated statements of operations and comprehensive loss.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2017

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

16. COMMITMENTS AND CONTINGENCIES

Lease Commitments

The Company leases certain of its offices, research laboratories and manufacturing facilities under operating leases that expire through the year 2029. Certain of the leases contain provisions for extensions of up to ten years. These lease commitments are primarily related to the Company’s corporate headquarters in Ireland and its corporate office and R&D facility in Massachusetts. As of December 31, 2017, the total future annual minimum lease payments under the Company’s non‑cancelable operating leases are as follows:


	Payment
(In thousands)	Amount
Years Ending December 31,
2018	$	9,174
2019		9,092
2020		6,404
2021		2,448
2022		1,195
Thereafter		3,615
	$	31,928

Rent expense related to operating leases charged to operations was $9.4 million, $8.1 million and $7.2 million for the years ended December 31, 2017, 2016 and 2015, respectively. The amount in 2015 was net of sublease income of $0.7 million. In addition to its lease commitments, the Company had open purchase orders totaling $473.9 million at December 31, 2017.

Litigation

From time to time, the Company may be subject to legal proceedings and claims in the ordinary course of business. On a quarterly basis, the Company reviews the status of each significant matter and assesses its potential financial exposure. If the potential loss from any claim, asserted or unasserted, or legal proceeding is considered probable and the amount can be reasonably estimated, the Company would accrue a liability for the estimated loss. Because of uncertainties related to claims and litigation, accruals are based on the Company’s best estimates based on available information. On a periodic basis, as additional information becomes available, or based on specific events such as the outcome of litigation or settlement of claims, the Company may reassess the potential liability related to these matters and may revise these estimates, which could result in material adverse adjustments to the Company’s operating results. At December 31, 2017, there are no potential losses from claims, asserted or unasserted, or legal proceedings the Company feels are probable of occurring.

INVEGA SUSTENNA ANDA Litigation

In January 2018, Janssen Pharmaceuticals NV and Janssen Pharmaceuticals, Inc. initiated a patent infringement lawsuit in the United States District Court for the District of New Jersey against Teva, who filed an ANDA seeking approval to market a generic version of INVEGA SUSTENNA before the expiration of United States Patent No. 9,439,906. Requested judicial remedies included recovery of litigation costs and injunctive relief. The Company is not a party to these proceedings.

For information about risks relating to the INVEGA SUSTENNA Paragraph IV litigation, see “Part I, Item 1A—Risk Factors” in this Annual Report and specifically the section entitled “—We or our licensees may face claims against intellectual property rights covering our products and competition from generic drug manufacturers.”

AMPYRA ANDA Litigation

Ten separate Paragraph IV Certification Notices have been received by the Company and/or its partner Acorda from: Accord Healthcare, Inc. (“Accord”); Actavis Laboratories FL, Inc. (“Actavis”); Alkem Laboratories Ltd. (“Alkem”); Apotex Corporation and Apotex, Inc. (collectively, “Apotex”); Aurobindo Pharma Ltd. (“Aurobindo”); Mylan Pharmaceuticals, Inc. (“Mylan”); Par Pharmaceutical, Inc. (“Par”); Roxane Laboratories, Inc. (“Roxane”); Sun Pharmaceutical Industries Limited and Sun Pharmaceuticals Industries Inc. (collectively, “Sun”); and Teva Pharmaceuticals USA, Inc. (“Teva,” and collectively with Accord, Actavis, Alkem, Apotex, Aurobindo, Mylan, Par, Roxane and Sun, the “ANDA Filers”) advising that each of the ANDA Filers had submitted an abbreviated NDA (“ANDA”) to the FDA seeking marketing approval for generic versions of AMPYRA (dalfampridine) Extended-Release Tablets, 10 mg. The ANDA Filers challenged the validity of the Orange Book-listed patents for AMPYRA, and they also asserted that their generic versions do not infringe certain claims of these patents. In response, the Company and/or Acorda filed lawsuits against the ANDA Filers in the U.S. District Court for the District of Delaware (the “Delaware Court”) asserting infringement of U.S. Patent No. 5,540,938 (the “‘938 Patent”), which the Company owns, and U.S. Patent Nos. 8,007,826; 8,354,437; 8,440,703; and 8,663,685, which are owned by Acorda. Requested judicial remedies included recovery of litigation costs and injunctive relief. Mylan challenged the jurisdiction of the Delaware Court with respect to the Delaware action. In January 2015, the Delaware Court denied Mylan’s motion to dismiss. Subsequently, in January 2015, the Delaware Court granted Mylan’s request for an interlocutory appeal of its jurisdictional decision to the Federal Circuit. In March 2016, the Federal Circuit denied Mylan’s appeal. Mylan requested the Federal Circuit to reconsider its decision. However, on June 20, 2016, the Federal Circuit denied Mylan’s request. Mylan filed an appeal with the U.S. Supreme Court, which was denied.

All lawsuits were filed within 45 days from the date of receipt of each of the Paragraph IV Certification Notices from the ANDA Filers. As a result, a 30-month statutory stay of approval period applied to each of the ANDA Filers’ ANDAs under the U.S. Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”). The 30-month stay started on January 22, 2015, and restricted the FDA from approving the ANDA Filers’ ANDAs until July 2017 at the earliest, unless a Federal district court issued a decision adverse to all of the asserted Orange Book-listed patents prior to that date. Lawsuits with eight of the ANDA Filers have been consolidated into a single case.

The Company and/or Acorda entered into a settlement agreement with each of Accord, Actavis, Alkem, Apotex, Aurobindo, Par and Sun (collectively, the “Settling ANDA Filers”) to resolve the patent litigation that the Company and/or Acorda brought against the Settling ANDA Filers in the Delaware Court. As a result of the settlement agreements, the Settling ANDA Filers will be permitted to market generic versions of AMPYRA in the U.S. at a specified date in the future. The parties submitted their respective settlement agreements to the U.S. Federal Trade Commission and the U.S. Department of Justice, as required by federal law. The settlements with the Settling ANDA Filers did not impact the patent litigation that the Company and Acorda brought against the remaining ANDA Filers (the “Non-Settling ANDA Filers”), as described in this Annual Report.

On March 31, 2017, after a bench trial, the Delaware Court issued an opinion (the “Delaware Court Decision”), upholding the validity of the ‘938 Patent, which pertains to the formulation of AMPYRA and is set to expire in July 2018, and finding that Apotex, Mylan, Roxane and Teva stipulated that their proposed generic forms of AMPYRA infringed the ‘938 Patent. The Delaware Court also invalidated U.S. Patent Nos. 8,007,826; 8,354,437; 8,440,703; and 8,663,685. In May 2017, Acorda filed its appeal of the Delaware Court Decision with the U.S. Court of Appeals for the Federal Circuit (the “Federal Circuit”) with respect to the findings on U.S. Patent Nos. 8,007,826; 8,354,437; 8,440,703; and 8,663,685. In June 2017, the Non-Settling ANDA Filers filed their cross-appeal of the Delaware Court Decision with the Federal Circuit with respect to the validity of the ‘938 Patent. The Company and Acorda filed their opening brief on August 7, 2017. The Non-Settling ANDA Filers responded on October 2, 2017. The Company and Acorda filed a response and reply brief on November 13, 2017, and the Non-Settling ANDA Filers filed their reply brief on November 27, 2017. A date for oral argument before the Federal Circuit has not yet been set.

The Company intends to vigorously enforce its intellectual property rights. For information about risks relating to the AMPYRA Paragraph IV litigations and other proceedings see “Part I, Item 1A—Risk Factors” in this Annual Report and specifically see the section entitled “—We or our licensees may face claims against intellectual property rights covering our products and competition from generic drug manufacturers.”

Government Matters

On June 22, 2017, the Company received a subpoena from an Office of the U.S. Attorney for documents related to VIVITROL. The Company is cooperating with the government.

Securities Litigation

On November 22, 2017, a purported stockholder of the Company filed a putative class action against the Company and certain of its officers in the United States District Court for the Southern District of New York captioned Gagnon v. Alkermes plc, et al., No. 1:17-cv-09178. The complaint was filed on behalf of a putative class of purchasers of Alkermes securities during the period of February 24, 2015 to November 3, 2017, and alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, based on allegedly false or misleading statements and omissions regarding the Company’s marketing practices related to VIVITROL. The lawsuit seeks, among other things, unspecified damages for alleged inflation in the price of securities, and reasonable costs and expenses, including attorneys’ fees. For information about risks relating to this action, see “Part I, Item 1A—Risk Factors” of this Annual Report and specifically the section entitled “—Litigation or arbitration against Alkermes, including securities litigation, or citizen petitions filed with the FDA, may result in financial losses, harm our reputation, divert management resources, negatively impact the approval of our products, or otherwise negatively impact our business.”

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Use of Estimates

Cash and Cash Equivalents

Receivables, net

The Company’s allowance for doubtful accounts was $0.2 million and $0.1 million at December 31, 2017 and 2016, respectively.

Investments

Fair Value of Financial Instruments

Inventory

Property, Plant and Equipment


Asset group		Term
Buildings and improvements		15 - 40 years
Furniture, fixtures and equipment		3 - 10 years
Leasehold improvements		Shorter of useful life or lease term

Business Acquisitions and Divestitures

Contingent Consideration

Goodwill and Intangible Assets

Impairment of Long-Lived Assets

Impairment of Long‑Lived Assets

Revenue Recognition

Collaborative Arrangements

Multiple Element Arrangements

Product Sales, Net

The Company records its product sales net of the following significant categories of sales discounts and allowances at the time of shipment:

Foreign Currency

Concentrations


	Year Ended December 31,
	2017				2016				2015
Customer	Receivables		Revenue		Receivables		Revenue		Receivables		Revenue
Janssen	31	%	33	%	33	%	36	%	44	%	40	%
Acorda	14	%	13	%	17	%	15	%	*		17	%


*	In 2015, receivables related to Acorda did not exceed 10% of the Company’s total receivables as of December 31, 2015.

Geographic Information

Company revenues by geographic location, as determined by the location of the customer, and the location of its assets, are as follows:


	Year Ended December 31,
(In thousands)	2017		2016		2015
Revenue by region:
U.S.	$	700,090	$	557,312	$	448,639
Ireland		9,706		4,407		3,902
Rest of world		193,578		183,975		175,794
Assets by region:
Current assets:
U.S.	$	402,481	$	382,168	$	360,154
Ireland		403,167		407,761		394,281
Rest of world		3,196		749		527
Long-term assets:
U.S.:
Other	$	360,641	$	236,175	$	294,158
Ireland:
Intangible assets	$	256,168	$	318,227	$	379,186
Goodwill		92,873		92,873		92,873
Other		278,701		288,470		334,565

Research and Development Expenses

Selling, General and Administrative Expenses

Advertising costs are expensed as incurred. During the years ended December 31, 2017, 2016 and 2015, advertising costs totaled $34.4 million, $24.0 million and $10.6 million, respectively.

Share-Based Compensation

Share‑Based Compensation

Stock Options

The fair value of each stock option grant was estimated on the grant date with the following weighted‑average assumptions:


	Year Ended December 31,
	2017	2016	2015
Expected option term	5 - 8 years	5 - 7 years	5 - 7 years
Expected stock volatility	43 % - 47 %	39 % - 53 %	38 % - 46 %
Risk-free interest rate	1.69 % - 2.38 %	0.95 % - 2.14 %	1.29 % - 2.02 %
Expected annual dividend yield	—	—	—

Time‑Vested Restricted Stock Units

Performance-Based Restricted Stock Units

Employee Benefit Plans

401(k) Plan

Defined Contribution Plan

New Accounting Pronouncements

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2017

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of estimated useful life of property, plant and equipment


Asset group		Term
Buildings and improvements		15 - 40 years
Furniture, fixtures and equipment		3 - 10 years
Leasehold improvements		Shorter of useful life or lease term

Schedule of revenue and receivables from customers exceeding 10% of total in each category


	Year Ended December 31,
	2017				2016				2015
Customer	Receivables		Revenue		Receivables		Revenue		Receivables		Revenue
Janssen	31	%	33	%	33	%	36	%	44	%	40	%
Acorda	14	%	13	%	17	%	15	%	*		17	%


*	In 2015, receivables related to Acorda did not exceed 10% of the Company’s total receivables as of December 31, 2015.

Schedule of revenues by geographic location, as determined by the location of the customer, and the location of its long-term assets


	Year Ended December 31,
(In thousands)	2017		2016		2015
Revenue by region:
U.S.	$	700,090	$	557,312	$	448,639
Ireland		9,706		4,407		3,902
Rest of world		193,578		183,975		175,794
Assets by region:
Current assets:
U.S.	$	402,481	$	382,168	$	360,154
Ireland		403,167		407,761		394,281
Rest of world		3,196		749		527
Long-term assets:
U.S.:
Other	$	360,641	$	236,175	$	294,158
Ireland:
Intangible assets	$	256,168	$	318,227	$	379,186
Goodwill		92,873		92,873		92,873
Other		278,701		288,470		334,565

Schedule of fair value of each stock option grant estimated on the grant date using weighted-average assumptions


	Year Ended December 31,
	2017	2016	2015
Expected option term	5 - 8 years	5 - 7 years	5 - 7 years
Expected stock volatility	43 % - 47 %	39 % - 53 %	38 % - 46 %
Risk-free interest rate	1.69 % - 2.38 %	0.95 % - 2.14 %	1.29 % - 2.02 %
Expected annual dividend yield	—	—	—

INVESTMENTS (Tables)

12 Months Ended

Dec. 31, 2017

INVESTMENTS

Schedule of investments


			Gross Unrealized
					Losses
	Amortized				Less than		Greater than		Estimated
December 31, 2017	Cost		Gains		One Year		One Year		Fair Value
Short-term investments:
Available-for-sale securities:
U.S. government and agency debt securities	$	150,673	$	1	$	(130)	$	(233)	$	150,311
Corporate debt securities		56,552		3		(48)		(10)		56,497
International government agency debt securities		35,478		1		(54)		(25)		35,400
Total short-term investments		242,703		5		(232)		(268)		242,208
Long-term investments:
Available-for-sale securities:
Corporate debt securities		83,924		—		(300)		(34)		83,590
U.S. government and agency debt securities		48,948		—		(270)		(71)		48,607
International government agency debt securities		21,453		—		(118)		—		21,335
		154,325		—		(688)		(105)		153,532
Held-to-maturity securities:
Fixed term deposit account		1,667		222		—		—		1,889
Certificates of deposit		1,791		—		—		—		1,791
		3,458		222		—		—		3,680
Total long-term investments		157,783		222		(688)		(105)		157,212
Total investments	$	400,486	$	227	$	(920)	$	(373)	$	399,420

December 31, 2016
Short-term investments:
Available-for-sale securities:
U.S. government and agency debt securities	$	177,203	$	96	$	(51)	$	—	$	177,248
Corporate debt securities		128,119		47		(53)		—		128,113
International government agency debt securities		5,511		—		(16)		—		5,495
Total short-term investments		310,833		143		(120)		—		310,856
Long-term investments:
Available-for-sale securities:
U.S. government and agency debt securities		81,839		—		(391)		—		81,448
Corporate debt securities		31,223		—		(89)		—		31,134
International government agency debt securities		5,992		—		(18)		—		5,974
		119,054		—		(498)		—		118,556
Held-to-maturity securities:
Fixed term deposit account		1,667		—		(7)		—		1,660
Certificates of deposit		1,715		—		—		—		1,715
		3,382		—		(7)		—		3,375
Total long-term investments		122,436		—		(505)		—		121,931
Total investments	$	433,269	$	143	$	(625)	$	—	$	432,787

Proceeds from the sales and maturities of marketable securities, plus the resulting realized gains and losses


	Year Ended December 31,
(In thousands)	2017		2016		2015
Proceeds from the sales and maturities of marketable securities	$	464,494	$	560,805	$	467,573
Realized gains	$	9	$	206	$	111
Realized losses	$	3	$	28	$	3

The cost and fair value of available-for-sale and held-to-maturity securities by contractual maturity


	Available-for-sale				Held-to-maturity
	Amortized		Estimated		Amortized		Estimated
(In thousands)	Cost		Fair Value		Cost		Fair Value
Within 1 year	$	234,771	$	234,273	$	1,791	$	1,791
After 1 year through 5 years		162,257		161,467		1,667		1,889
Total	$	397,028	$	395,740	$	3,458	$	3,680

FAIR VALUE (Tables)

12 Months Ended

Dec. 31, 2017

FAIR VALUE

Summary of the Company's assets and liabilities measured at fair value on a recurring basis


	December 31,
(In thousands)	2017		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	1,889	$	1,889	$	—	$	—
U.S. government and agency debt securities		198,918		124,958		73,960		—
Corporate debt securities		140,087		—		140,087		—
International government agency debt securities		56,735		—		56,735		—
Contingent consideration		84,800		—		—		84,800
Common stock warrants		1,395		—		—		1,395
Total	$	483,824	$	126,847	$	270,782	$	86,195


	December 31,
	2016		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	1,660	$	1,660	$	—	$	—
U.S. government and agency debt securities		258,696		156,370		102,326		—
Corporate debt securities		159,247		—		159,247		—
International government agency debt securities		11,469		—		11,469		—
Contingent consideration		63,200		—		—		63,200
Common stock warrants		1,392		—		—		1,392
Total	$	495,664	$	158,030	$	273,042	$	64,592

Schedule of rollforward of the fair value of the Company's investments whose fair value was determined using Level 3 inputs


(In thousands)	Fair Value
Balance, January 1, 2017	$	64,592
Increase in the fair value of contingent consideration		21,600
Increase in the fair value of warrants		3
Balance, December 31, 2017	$	86,195

Estimated fair value of term loans


	Carrying		Estimated
(In thousands)	Value		Fair Value
Term Loan B-1	$	281,436	$	285,671

INVENTORY (Tables)

12 Months Ended

Dec. 31, 2017

INVENTORY

Schedule of inventories


	December 31,		December 31,
(In thousands)	2017		2016
Raw materials	$	29,883	$	19,413
Work in process		38,964		21,811
Finished goods(1)		24,428		21,774
Total inventory	$	93,275	$	62,998

(1)At December 31, 2017 and 2016, the Company had $8.7 million and $7.1 million, respectively, of finished goods inventory located at its third‑party warehouse and shipping service provider.

PROPERTY, PLANT AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2017

PROPERTY, PLANT AND EQUIPMENT

Schedule of property, plant and equipment


	December 31,		December 31,
(In thousands)	2017		2016
Land	$	6,293	$	5,913
Building and improvements		155,198		152,871
Furniture, fixtures and equipment		289,455		251,437
Leasehold improvements		19,578		19,241
Construction in progress		54,270		41,254
Subtotal		524,794		470,716
Less: accumulated depreciation		(240,058)		(205,931)
Total property, plant and equipment, net	$	284,736	$	264,785

GOODWILL AND INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2017

GOODWILL AND INTANGIBLE ASSETS

Schedule of goodwill and intangible assets


		Year Ended						Year Ended
		December 31, 2017						December 31, 2016
(In thousands)	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Goodwill		$	92,873	$	—	$	92,873	$	92,873	$	—	$	92,873
Finite-lived intangible assets:
Collaboration agreements	12	$	465,590	$	(269,392)	$	196,198	$	465,590	$	(218,318)	$	247,272
NanoCrystal technology	13		74,600		(31,283)		43,317		74,600		(24,384)		50,216
OCR technologies	12		42,560		(25,907)		16,653		42,560		(21,821)		20,739
Total		$	582,750	$	(326,582)	$	256,168	$	582,750	$	(264,523)	$	318,227

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)

12 Months Ended

Dec. 31, 2017

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Schedule of accounts payable and accrued expenses


	December 31,		December 31,
(In thousands)	2017		2016
Accounts payable	$	55,526	$	46,275
Accrued compensation		54,568		45,622
Accrued sales discounts, allowances and reserves		111,137		60,973
Accrued other		64,935		54,185
Total accounts payable and accrued expenses	$	286,166	$	207,055

LONG-TERM DEBT (Tables)

12 Months Ended

Dec. 31, 2017

LONG-TERM DEBT

Schedule of long-term debt


	December 31,		December 31,
(In thousands)	2017		2016
Term Loan B-1, due September 25, 2021	$	281,436	$	283,666
Less: current portion		(3,000)		(3,000)
Long-term debt	$	278,436	$	280,666

Scheduled maturities with respect to the Term Loan Facility

Scheduled maturities with respect to Term Loan B-1 are as follows (in thousands):


Year Ending December 31:
2018	$	3,000
2019		3,000
2020		3,000
2021		275,250
Total	$	284,250

LOSS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2017

LOSS PER SHARE

Schedule of anti-dilutive potential common equivalent shares excluded from calculation of net (loss) income per share


	Year Ended December 31,
(In thousands)	2017	2016	2015
Stock options	9,540	10,166	9,179
Restricted stock units	2,119	1,320	1,351
Total	11,659	11,486	10,530

SHARE-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of share-based compensation expense


	Year Ended December 31,
(In thousands)	2017		2016		2015
Cost of goods manufactured and sold	$	7,596	$	8,633	$	8,880
Research and development		22,635		24,023		24,201
Selling, general and administrative		53,686		61,740		64,260
Total share-based compensation expense	$	83,917	$	94,396	$	97,341

Summary of stock option activity


	Number of	Weighted Average
	Shares	Exercise Price
Outstanding, January 1, 2017	14,202,167	$	33.17
Granted	2,030,075	$	55.04
Exercised	(1,135,670)	$	20.95
Forfeited	(266,433)	$	51.81
Expired	(56,727)	$	68.97
Outstanding, December 31, 2017	14,773,412	$	36.64
Exercisable, December 31, 2017	9,692,044	$	29.57

Time-vested RSUs

Summary of RSU activity


	Number of	Weighted Average
	Shares	Grant Date Fair Value
Unvested, January 1, 2017	2,074,416	$	42.60
Granted	703,630	$	54.85
Vested	(730,085)	$	43.14
Forfeited	(111,153)	$	44.73
Unvested, December 31, 2017	1,936,808	$	46.72

Performance-based RSUs

Summary of RSU activity


	Number of	Weighted Average
	Shares	Grant Date Fair Value
Unvested, January 1, 2017	—	$	—
Granted	1,169,949	$	54.73
Forfeited	(60,700)	$	54.78
Vested	(596)	$	54.57
Unvested, December 31, 2017	1,108,653	$	54.72

COLLABORATIVE ARRANGEMENTS (Tables)

12 Months Ended

Dec. 31, 2017

COLLABORATIVE ARRANGEMENTS

Collaborative aggregate arrangements


	Year Ended December 31,
(In thousands)	2017		2016		2015
MANUFACTURING AND ROYALTY REVENUE:
Significant collaborative arrangements	$	462,568	$	431,302	$	401,236
All other collaborative arrangements		42,740		55,945		74,052
Total manufacturing and royalty revenue	$	505,308	$	487,247	$	475,288

LICENSE REVENUE:
Significant collaborative arrangements	$	28,000	$	—	$	—
Total research and development revenue	$	28,000	$	—	$	—

RESEARCH AND DEVELOPMENT REVENUE:
Significant collaborative arrangements	$	2,314	$	403	$	582
All other collaborative arrangements		4,918		1,898		3,437
Total research and development revenue	$	7,232	$	2,301	$	4,019

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

INCOME TAXES

Schedule of components of company's provision (benefit) for income taxes


	Year Ended December 31,
(In thousands)	2017		2016		2015
Current income tax provision:
U.S. federal	$	6,964	$	3,163	$	29,959
U.S. state		350		480		1,615
Ireland		—		—		77
Rest of world		123		103		94
Deferred income tax provision (benefit):
U.S. federal		8,188		(9,278)		(18,336)
U.S. state		(933)		(269)		(604)
Ireland		(21)		(142)		(9,647)
Total tax provision (benefit)	$	14,671	$	(5,943)	$	3,158

Schedule of (loss) income before provision for income taxes by geographical area


	Year Ended December 31,
(In thousands)	2017		2016		2015
Ireland	$	(172,363)	$	(212,198)	$	(289,105)
U.S.		2,414		(18,935)		38,398
Rest of world		26,675		16,746		26,702
Loss before provision (benefit) for income taxes	$	(143,274)	$	(214,387)	$	(224,005)

Schedule of components of the company's net deferred tax assets (liabilities)


	December 31,		December 31,
(In thousands)	2017		2016
Deferred tax assets:
Irish NOL carryforwards	$	177,435	$	156,147
Tax credits		71,366		7,608
Share-based compensation		40,048		52,479
Other		13,239		12,233
Less: valuation allowance		(172,797)		(141,859)
Total deferred tax assets		129,291		86,608
Deferred tax liabilities:
Intangible assets		(18,184)		(20,805)
Property, plant and equipment		(12,040)		(17,541)
Other		(818)		(826)
Total deferred tax liabilities		(31,042)		(39,172)
Net deferred tax assets	$	98,249	$	47,436

Schedule of activity in the valuation allowance associated with deferred taxes


	Balance at				Balance at
	Beginning of				End of
(In thousands)	Period		Additions (1)		Period
Deferred tax asset valuation for the year ended December 31, 2015	$	(71,796)	$	(34,950)	$	(106,746)
Deferred tax asset valuation for the year ended December 31, 2016	$	(106,746)	$	(35,113)	$	(141,859)
Deferred tax asset valuation for the year ended December 31, 2017	$	(141,859)	$	(30,938)	$	(172,797)

(1)The additions in each of the periods presented relate primarily to Irish NOL’s.

Schedule of deferred tax assets and liabilities related to intercompany transfers of intellectual property


	December 31,		December 31,
(In thousands)	2017		2016
Prepaid expenses and other current assets	$	188	$	188
Other assets — long-term		686		862
Total deferred charges	$	874	$	1,050

Schedule of reconciliation of the company's federal statutory tax rate to its effective tax rate


	Year Ended December 31,
(In thousands, except percentage amounts)	2017			2016			2015
Statutory tax rate		12.5	%		12.5	%		12.5	%

Income tax provision at statutory rate	$	(17,909)		$	(26,798)		$	(28,001)

Change in valuation allowance		26,771			35,290			37,312
Federal tax law change(1)		21,453			—			—
Impairment on equity method investment		1,662			—			—
Uncertain tax positions		830			910			1,213
Foreign rate differential(2)		(682)			2,723			13,951
Share-based compensation		(1,205)			2,072			738
U.S. state income taxes, net of U.S. federal benefit		(558)			(2)			557
Intercompany amounts(3)		(5,041)			(5,209)			(3,649)
Irish rate differential(4)		(2,675)			(5,231)			(7,318)
R&D credit		(9,326)			(10,572)			(12,193)
Other permanent items(5)		1,351			874			548
Income tax provision (benefit)	$	14,671		$	(5,943)		$	3,158

Effective tax rate		(10.2)	%		2.8	%		(1.4)	%

(2)Represents income or losses of non-Irish subsidiaries, including U.S. subsidiaries, subject to tax at a rate other than the Irish statutory rate.

(3)Intercompany amounts include cross-territory eliminations, the pre-tax effect of which has been eliminated in arriving at the Company's consolidated loss before taxes.

(4)Represents income or losses of Irish companies subject to tax at a rate other than the Irish statutory rate.

Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits


	Unrecognized
(In thousands)	Tax Benefits
Balance, December 31, 2014	$	2,565
Additions based on tax positions related to prior periods		—
Additions based on tax positions related to the current period		1,213
Balance, December 31, 2015	$	3,778
Reductions based on tax positions related to prior periods		(7)
Additions based on tax positions related to the current period		917
Balance, December 31, 2016	$	4,688
Reductions based on tax positions related to prior periods		(47)
Additions based on tax positions related to the current period		877
Balance, December 31, 2017	$	5,518

DIVESTITURE (Tables)

12 Months Ended

Dec. 31, 2017

DIVESTITURE

Summary of assets and liabilities disposed of in Gainesville Transaction


	April 10, 2015
	(In thousands)
Sales Proceeds:
Cash	$	54,010
Fair value of warrants		2,123
Fair value of contingent consideration		57,600
Total consideration received	$	113,733
Less net assets sold		(101,373)
Less transaction costs		(2,724)
Gain on the Gainesville Transaction	$	9,636

Schedule of assumptions used to determine the fair value of the warrants


Closing stock price at December 31, 2017	$	9.25
Warrant strike price	$	19.46
Expected term (years)		4.27
Risk-free rate		2.09	%
Volatility		77.0	%

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2017

COMMITMENTS AND CONTINGENCIES

Schedule of future minimum rental commitments under non-cancelable operating leases


	Payment
(In thousands)	Amount
Years Ending December 31,
2018	$	9,174
2019		9,092
2020		6,404
2021		2,448
2022		1,195
Thereafter		3,615
	$	31,928

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property, Plant and Equipment (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Nov. 30, 2017	Dec. 31, 2016
Accounts Receivable
Allowance for doubtful accounts	$ 0.2		$ 0.1
Milestone payment entitled to be received upon the initiation of phase 3 clinical trial		$ 50.0
Milestone payment entitled to be received upon the approval of NDA by the FDA		$ 150.0
Minimum annual payments period of royalty	5 years
Cash flows discount rate	8.00%
Buildings and improvements \| Minimum
Property, plant and equipment
Estimated useful life	15 years
Buildings and improvements \| Maximum
Property, plant and equipment
Estimated useful life	40 years
Furniture, fixtures and equipment \| Minimum
Property, plant and equipment
Estimated useful life	3 years
Furniture, fixtures and equipment \| Maximum
Property, plant and equipment
Estimated useful life	10 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Revenue Recognition (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Nov. 30, 2017	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenue Recognition
Discount rate (as a percent)			8.00%
License revenue	$ 28,000	$ 28,000	$ 28,000
Foreign Currency
Gain on foreign currency translation			$ 3,700	$ 100	$ 1,400
VIVITROL
Revenue Recognition
Product return reserve as percentage of product sales		1.50%	1.50%
ARISTADA
Revenue Recognition
Product return reserve as percentage of product sales		1.50%	1.50%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Concentrations (Details)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Concentrations
Threshold percentage for disclosure of revenue and receivables	10.00%	10.00%	10.00%
Receivables \| Acorda \| Maximum
Concentrations
Concentration risk percentage			10.00%
Accounts receivable \| Receivables \| Janssen
Concentrations
Concentration risk percentage	31.00%	33.00%	44.00%
Accounts receivable \| Receivables \| Acorda
Concentrations
Concentration risk percentage	14.00%	17.00%
Revenues, net \| Revenue \| Janssen
Concentrations
Concentration risk percentage	33.00%	36.00%	40.00%
Revenues, net \| Revenue \| Acorda
Concentrations
Concentration risk percentage	13.00%	15.00%	17.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Geographic Information
Current assets:	$ 808,844	$ 790,678
Long-term assets:
Intangible assets	256,168	318,227
Goodwill	92,873	92,873
Other	14,034	26,961
U.S.
Geographic Information
Revenue by region:	700,090	557,312	$ 448,639
Current assets:	402,481	382,168	360,154
Long-term assets:
Other	360,641	236,175	294,158
Ireland
Geographic Information
Revenue by region:	9,706	4,407	3,902
Current assets:	403,167	407,761	394,281
Long-term assets:
Intangible assets	256,168	318,227	379,186
Goodwill	92,873	92,873	92,873
Other	278,701	288,470	334,565
Rest of world
Geographic Information
Revenue by region:	193,578	183,975	175,794
Current assets:	$ 3,196	$ 749	$ 527

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Share Based Compensation (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Selling, General and Administrative Expenses
Advertising Expense	$ 34,400,000	$ 24,000,000	$ 10,600,000
Stock options
Share-based compensation
Expiration period	10 years
Vesting rights per year (as a percent)	25.00%
Vesting period	4 years
Weighted-average assumptions
Expected stock volatility, minimum (as a percent)	43.00%	39.00%	38.00%
Expected stock volatility, maximum (as a percent)	47.00%	53.00%	46.00%
Risk-free interest rate, minimum (as a percent)	1.69%	0.95%	1.29%
Risk-free interest rate, maximum (as a percent)	2.38%	2.14%	2.02%
Stock options \| Minimum
Weighted-average assumptions
Expected option term	5 years	5 years	5 years
Stock options \| Maximum
Weighted-average assumptions
Expected option term	8 years	7 years	7 years
Stock options \| Directors
Share-based compensation
Expiration period	10 years
Vesting period	1 year
Time-vested RSUs
Share-based compensation
Vesting rights per year (as a percent)	25.00%
Vesting period	4 years

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Employee Benefit Plan (Details) $ in Millions	12 Months Ended
	Dec. 31, 2017 EUR (€) item	Dec. 31, 2017 USD ($) item	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Employee benefit plans
Number of business segments \| item	1	1
401 (K) Plan
Employee benefit plans
Employee contribution limit as a percentage of their eligible compensation	100.00%	100.00%
Percentage of employer contribution matched of the first employee pay	100.00%	100.00%
Maximum employee contribution limit as a percentage of their total taxable earnings	5.00%	5.00%
Employer contribution		$ 9.8	$ 8.1	$ 6.6
Defined Contribution Plan
Employee benefit plans
Maximum employee contribution limit as a percentage of their total taxable earnings	40.00%	40.00%
Per employee contribution limit \| €	€ 115,000
Maximum percentage of employer contribution matched of employee's	18.00%	18.00%
Employer contribution		$ 3.7	$ 3.2	$ 3.0

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Jan. 01, 2017
Cumulative-effect adjustment on retained earnings	$ 0.9
Cumulative Effect Adjustment To Retained Earnings
Adjustment to retained earnings to record net deferred tax asset		$ 61.5

INVESTMENTS - Summary of investments (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Total investments
Amortized Cost	$ 400,486	$ 433,269
Gross Unrealized Gains	227	143
Gross Unrealized Losses, Less than One Year	(920)	(625)
Gross Unrealized Losses, Greater than One Year	(373)
Estimated Fair Value	399,420	432,787
Short-term investments
Total investments
Amortized Cost	242,703	310,833
Gross Unrealized Gains	5	143
Gross Unrealized Losses, Less than One Year	(232)	(120)
Gross Unrealized Losses, Greater than One Year	(268)
Estimated Fair Value	242,208	310,856
Short-term investments \| U.S. government and agency debt securities
Available-for-sale securities:
Amortized Cost	150,673	177,203
Gross Unrealized Gains	1	96
Gross Unrealized Losses, Less than One Year	(130)	(51)
Gross Unrealized Losses, Greater than One Year	(233)
Estimated Fair Value	150,311	177,248
Short-term investments \| Corporate debt securities
Available-for-sale securities:
Amortized Cost	56,552	128,119
Gross Unrealized Gains	3	47
Gross Unrealized Losses, Less than One Year	(48)	(53)
Gross Unrealized Losses, Greater than One Year	(10)
Estimated Fair Value	56,497	128,113
Short-term investments \| International government agency debt securities
Available-for-sale securities:
Amortized Cost	35,478	5,511
Gross Unrealized Gains	1
Gross Unrealized Losses, Less than One Year	(54)	(16)
Gross Unrealized Losses, Greater than One Year	(25)
Estimated Fair Value	35,400	5,495
Long-term investments
Available-for-sale securities:
Amortized Cost	154,325	119,054
Gross Unrealized Losses, Less than One Year	(688)	(498)
Gross Unrealized Losses, Greater than One Year	(105)
Estimated Fair Value	153,532	118,556
Held-to-maturity securities:
Amortized Cost	3,458	3,382
Gross Unrealized Gains	222
Gross Unrealized Losses, Less than One Year		(7)
Estimated Fair Value	3,680	3,375
Total investments
Amortized Cost	157,783	122,436
Gross Unrealized Gains	222
Gross Unrealized Losses, Less than One Year	(688)	(505)
Gross Unrealized Losses, Greater than One Year	(105)
Estimated Fair Value	157,212	121,931
Long-term investments \| Fixed Term Deposit Account
Held-to-maturity securities:
Amortized Cost	1,667	1,667
Gross Unrealized Gains	222
Gross Unrealized Losses, Less than One Year		(7)
Estimated Fair Value	1,889	1,660
Long-term investments \| Certificates of deposit
Held-to-maturity securities:
Amortized Cost	1,791	1,715
Estimated Fair Value	1,791	1,715
Long-term investments \| U.S. government and agency debt securities
Available-for-sale securities:
Amortized Cost	48,948	81,839
Gross Unrealized Losses, Less than One Year	(270)	(391)
Gross Unrealized Losses, Greater than One Year	(71)
Estimated Fair Value	48,607	81,448
Long-term investments \| Corporate debt securities
Available-for-sale securities:
Amortized Cost	83,924	31,223
Gross Unrealized Losses, Less than One Year	(300)	(89)
Gross Unrealized Losses, Greater than One Year	(34)
Estimated Fair Value	83,590	31,134
Long-term investments \| International government agency debt securities
Available-for-sale securities:
Amortized Cost	21,453	5,992
Gross Unrealized Losses, Less than One Year	(118)	(18)
Estimated Fair Value	$ 21,335	$ 5,974

INVESTMENTS - Proceeds from the sales and maturities of marketable securities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
INVESTMENTS
Proceeds from the sales and maturities of marketable securities	$ 464,494	$ 560,805	$ 467,573
Realized gains	9	206	111
Realized losses	$ 3	$ 28	$ 3

INVESTMENTS - Contractual maturities (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Available-for-sale, Amortized Cost
Within 1 year	$ 234,771
After 1 year through 5 years	162,257
Total	397,028
Available-for-sale, Estimated Fair Value
Within 1 year	234,273
After 1 year through 5 years	161,467
Total	395,740
Held-to-maturity, Amortized Cost
Within 1 year	1,791
After 1 year through 5 years	1,667
Total	3,458
Held-to-maturity, Estimated Fair Value
Within 1 year	1,791
After 1 year through 5 years	1,889
Estimated Fair Value	$ 3,680

INVESTMENTS - Narratives (Details) $ in Thousands, € in Millions	1 Months Ended		12 Months Ended
	Sep. 30, 2017 USD ($)	Feb. 29, 2016 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2017 EUR (€)	May 31, 2014 EUR (€)
Equity method investment
Other-than-temporary impairment charge			$ 10,471
Reset Therapeutics Inc
Equity method investment
Cost Of License		$ 10,000
Carrying value of equity investment		$ 15,000		$ 13,300
Increase (decrease) in carrying value of investment of the entity, which represents the Company's share of investee's net gains (losses)			2,800	1,700
Reset Therapeutics Inc \| Investee [Member]
Equity method investment
Other-than-temporary impairment charge	$ 10,500
Fountain Healthcare Partners II, LP of Ireland
Equity method investment
Carrying value of equity investment \| €							€ 7.4
Funding commitment as percentage of partnership's total funding						7.00%
Increase (decrease) in carrying value of investment of the entity, which represents the Company's share of investee's net gains (losses)			$ 100	$ 400	$ 200
Other Assets \| Fountain Healthcare Partners II, LP of Ireland
Equity method investment
Total equity method commitment \| €						€ 3.7

FAIR VALUE - Fair value of assets annd Liabilities (Details) - Recurring basis - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Fair value
Assets, Total	$ 483,824	$ 495,664
Level 1
Fair value
Assets, Total	126,847	158,030
Level 2
Fair value
Assets, Total	270,782	273,042
Level 3
Fair value
Assets, Total	86,195	64,592
Cash equivalents
Fair value
Estimated Fair Value	1,889	1,660
Cash equivalents \| Level 1
Fair value
Estimated Fair Value	1,889	1,660
U.S. government and agency debt securities
Fair value
Estimated Fair Value	198,918	258,696
U.S. government and agency debt securities \| Level 1
Fair value
Estimated Fair Value	124,958	156,370
U.S. government and agency debt securities \| Level 2
Fair value
Estimated Fair Value	73,960	102,326
Corporate debt securities
Fair value
Estimated Fair Value	140,087	159,247
Corporate debt securities \| Level 2
Fair value
Estimated Fair Value	140,087	159,247
International government agency debt securities
Fair value
Estimated Fair Value	56,735	11,469
International government agency debt securities \| Level 2
Fair value
Estimated Fair Value	56,735	11,469
Contingent Consideration
Fair value
Estimated Fair Value	84,800	63,200
Contingent Consideration \| Level 3
Fair value
Estimated Fair Value	84,800	63,200
Equity securities
Fair value
Estimated Fair Value	1,395	1,392
Equity securities \| Level 3
Fair value
Estimated Fair Value	$ 1,395	$ 1,392

FAIR VALUE - ROLLFORWARD OF FAIR VALUE OF ASSETS (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) item
Roll forward of the fair value of the Company's investments whose fair value was determined using Level 3 inputs
Number of investments transferred from level 1 to level 2 \| item	0
Number of investments transferred from level 2 to level 1 \| item	0
Balance at the beginning of the period	$ 64,592
Balance at the end of the period	86,195
Increase in the fair value of contingent consideration
Roll forward of the fair value of the Company's investments whose fair value was determined using Level 3 inputs
Increase in the fair value	21,600
Increase in the fair value of warrants
Roll forward of the fair value of the Company's investments whose fair value was determined using Level 3 inputs
Increase in the fair value	$ 3

FAIR VALUE - Term Loan (Details) - Term Loan B-1 - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Estimated fair value of the Term Loans
Fair value of remaining financial instruments not recognized at fair value	$ 300,000
Variable interest rate base	LIBOR
Carrying Value	$ 281,436	$ 283,666
Estimated Fair Value	$ 285,671
LIBOR
Estimated fair value of the Term Loans
Interest rate added to base rate (as a percent)	2.75%
Interest rate, variable interest rate floor (as a percent)	0.75%

INVENTORY (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
INVENTORY
Raw materials	$ 29,883	$ 19,413
Work in process	38,964	21,811
Finished goods	24,428	21,774
Total inventory	93,275	62,998
Finished goods inventory located at third-party warehouse and shipping service provider	$ 8,700	$ 7,100

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property, plant and equipment
Subtotal	$ 524,794	$ 470,716
Less: accumulated depreciation	(240,058)	(205,931)
Total property, plant and equipment, net	284,736	264,785
Depreciation expense	36,500	33,300	$ 27,900
Land
Property, plant and equipment
Subtotal	6,293	5,913
Buildings and improvements
Property, plant and equipment
Subtotal	155,198	152,871
Furniture, fixtures and equipment
Property, plant and equipment
Subtotal	289,455	251,437
Carrying value at the time of disposition	100	900	$ 100
Leasehold improvements
Property, plant and equipment
Subtotal	19,578	19,241
Construction in progress
Property, plant and equipment
Subtotal	$ 54,270	$ 41,254

GOODWILL AND INTANGIBLE ASSETS - INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Goodwill
Gross Carrying Amount	$ 92,873	$ 92,873
Goodwill	92,873	92,873
Finite-lived intangible assets:
Gross Carrying Amount	582,750	582,750
Accumulated Amortization	(326,582)	(264,523)
Net Carrying Amount	$ 256,168	318,227
Collaboration agreements
Finite-lived intangible assets:
Weighted Amortizable Life	12 years
Gross Carrying Amount	$ 465,590	465,590
Accumulated Amortization	(269,392)	(218,318)
Net Carrying Amount	$ 196,198	247,272
NanoCrystal technology
Finite-lived intangible assets:
Weighted Amortizable Life	13 years
Gross Carrying Amount	$ 74,600	74,600
Accumulated Amortization	(31,283)	(24,384)
Net Carrying Amount	$ 43,317	50,216
OCR technologies
Finite-lived intangible assets:
Weighted Amortizable Life	12 years
Gross Carrying Amount	$ 42,560	42,560
Accumulated Amortization	(25,907)	(21,821)
Net Carrying Amount	$ 16,653	$ 20,739

GOODWILL AND INTANGIBLE ASSETS - AMORTIZATION (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
GOODWILL AND INTANGIBLE ASSETS
Amortization of acquired intangible assets	$ 62,059	$ 60,959	$ 57,685
Expected amortization of intangible assets
2018	65,000
2019	55,000
2020	50,000
2021	40,000
2022	$ 35,000

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable	$ 55,526	$ 46,275
Accrued compensation	54,568	45,622
Accrued sales discounts, allowances and reserves	111,137	60,973
Accrued other	64,935	54,185
Total accounts payable and accrued expenses	$ 286,166	$ 207,055

LONG-TERM DEBT (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Long-term debt
Less: current portion	$ (3,000)	$ (3,000)
Long-term debt	278,436	280,666
Term Loan B-1
Long-term debt
Term Loan B-1	$ 281,436	$ 283,666

LONG-TERM DEBT - Scheduled maturities of Term Loan Facility (Details) - Term Loan B-1 $ in Thousands	Dec. 31, 2017 USD ($)
Scheduled maturities of Credit Agreement
2018	$ 3,000
2019	3,000
2020	3,000
2021	275,250
Total	$ 284,250

LONG-TERM DEBT - Narratives (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2016	Sep. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Long-term debt
Original issue discount				$ 1.8
Unamortized deferred financing costs at period end				1.0
Amortization of offering costs and discount				0.8	$ 0.9	$ 0.9
Interest Expense
Long-term debt
Refinancing charges		$ 2.1
Credit Agreement
Long-term debt
Incremental capacity				140.0
Term Loan B-1
Long-term debt
Debt Instrument, Face Amount				$ 300.0
Variable interest rate base				LIBOR
Original issue discount				$ 3.0
Term Loan quarterly amortization price as percentage of original principal amount				0.25%
Term Loan B-1 \| LIBOR
Long-term debt
Debt Instrument, Basis Spread on Variable Rate				2.75%
Debt Instrument, Variable Rate Basis Floor				0.75%
Term Loan B-2
Long-term debt
Debt Instrument, Face Amount	$ 75.0		$ 75.0
Variable interest rate base			LIBOR
Original issue discount	0.4		$ 0.4
Term Loan quarterly amortization price as percentage of original principal amount			1.25%
Repayment of term loan	$ 60.9
Term Loan B-2 \| LIBOR
Long-term debt
Debt Instrument, Basis Spread on Variable Rate			2.75%
Debt Instrument, Variable Rate Basis Floor			0.00%

LOSS PER SHARE (Details) - shares shares in Thousands	12 Months Ended
LOSS PER SHARE (Details) - shares shares in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Denominator:
Anti-dilutive potential common equivalent shares excluded from calculation of net loss per ordinary share	11,659	11,486	10,530
Stock options
Denominator:
Anti-dilutive potential common equivalent shares excluded from calculation of net loss per ordinary share	9,540	10,166	9,179
Restricted stock units
Denominator:
Anti-dilutive potential common equivalent shares excluded from calculation of net loss per ordinary share	2,119	1,320	1,351

SHAREHOLDERS' EQUITY - Share Repurchase Program (Details) - USD ($) $ in Millions	Dec. 31, 2017	Sep. 16, 2011
SHAREHOLDERS' EQUITY
Value of shares authorized under repurchase program		$ 215.0
Value of shares available for repurchase pursuant to repurchase program	$ 101.0

SHARE-BASED COMPENSATION - Share based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based compensation Expense
Total share-based compensation expense	$ 83,917	$ 94,396	$ 97,341
Share based compensation cost capitalized	400	1,100	1,100
Cost of goods manufactured and sold
Share-based compensation Expense
Total share-based compensation expense	7,596	8,633	8,880
Research and development
Share-based compensation Expense
Total share-based compensation expense	22,635	24,023	24,201
Selling, general and administrative
Share-based compensation Expense
Total share-based compensation expense	$ 53,686	$ 61,740	$ 64,260

SHARE-BASED COMPENSATION - Share Based Compensation Plans (Details) shares in Millions	12 Months Ended
	Dec. 31, 2017 item shares
Share-Based Compensation
Number of share-based compensation plans under which awards are currently made	2
Number of share-based compensation plans under which no further awards will be made	2
Shares of common stock authorized for issuance \| shares	9.5
2011 Plan
Share-Based Compensation
Ratio of awards other than stock options counted against the total number of shares available for issuance	1.8
2008 Plan
Share-Based Compensation
Ratio of awards other than stock options counted against the total number of shares available for issuance	2

SHARE-BASED COMPENSATION - Summary of stock option activity (Details) - Stock options - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Number of Shares
Outstanding at the beginning of the period (in shares)	14,202,167
Granted (in shares)	2,030,075
Exercised (in shares)	(1,135,670)
Forfeited (in shares)	(266,433)
Expired (in shares)	(56,727)
Outstanding at the end of the period (in shares)	14,773,412	14,202,167
Exercisable at the end of the period (in shares)	9,692,044
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 33.17
Granted (in dollars per share)	55.04
Exercised (in dollars per share)	20.95
Forfeited (in dollars per share)	51.81
Expired (in dollars per share)	68.97
Outstanding at the end of the period (in dollars per share)	36.64	$ 33.17
Exercisable at the end of the period (in dollars per share)	29.57
Additional disclosures
Weighted average grant-date fair value of stock options granted (in dollars per share)	$ 25.81	$ 17.11	$ 28.88
Aggregate intrinsic value of stock options exercised	$ 40.4	$ 35.0	$ 127.7
Stock options expected to vest
Stock options expected to vest (in shares)	5,000,000
Weighted average exercise price (in dollars per share)	$ 50.09
Weighted average contractual remaining life	8 years 3 months 18 days
Aggregate intrinsic value	$ 39.0
Additional disclosures
Aggregate intrinsic value of stock options exercisable	$ 259.1
Weighted average remaining contractual term of stock options exercisable	4 years 8 months 12 days
Unrecognized compensation cost	$ 50.6
Weighted average period for unrecognized compensation cost expected to be recognized	1 year 10 months 24 days
Cash received from option exercises	$ 23.5	$ 20.3	$ 45.0

SHARE-BASED COMPENSATION - Time Vested Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Time-vested RSUs
Number of Shares
Unvested at the beginning of the period (in shares)	2,074,416
Granted (in shares)	703,630
Vested (in shares)	(730,085)
Forfeited (in shares)	(111,153)
Unvested at the end of the period (in shares)	1,936,808	2,074,416
Weighted Average Grant Date Fair Value
Unvested at the beginning of the period (in dollars per share)	$ 42.60
Granted (in dollars per share)	54.85	$ 32.27	$ 71.16
Vested (in dollars per share)	43.14
Forfeited (in dollars per share)	44.73
Unvested at the end of the period (in dollars per share)	$ 46.72	$ 42.60
Additional disclosures
Fair value of RSU's vested	$ 31.5	$ 26.0	$ 21.3
Unrecognized compensation cost	$ 34.4
Weighted average period for unrecognized compensation cost expected to be recognized	1 year 10 months 24 days
Vesting period	4 years
Performance-based RSUs
Number of Shares
Granted (in shares)	1,169,949
Vested (in shares)	(596)
Forfeited (in shares)	(60,700)
Unvested at the end of the period (in shares)	1,108,653
Weighted Average Grant Date Fair Value
Granted (in dollars per share)	$ 54.73
Vested (in dollars per share)	54.57
Forfeited (in dollars per share)	54.78
Unvested at the end of the period (in dollars per share)	$ 54.72
Additional disclosures
Vesting period	1 year
Expiration period	3 years
Unrecognized compensation cost	$ 60.7

COLLABORATIVE ARRANGEMENTS - Aggregate collaborative arrangements (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Nov. 30, 2017	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Manufacturing and royalty revenues			$ 505,308	$ 487,247	$ 475,288
License revenue	$ 28,000	$ 28,000	28,000
Research and development revenue			7,232	2,301	4,019
Cost of goods manufactured and sold (exclusive of amortization of acquired intangible assets shown below)			154,748	132,122	138,989
Significant collaborative arrangements
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Manufacturing and royalty revenues			462,568	431,302	401,236
License revenue			28,000
Research and development revenue			2,314	403	582
All other collaborative arrangements
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Manufacturing and royalty revenues			42,740	55,945	74,052
Research and development revenue			4,918	1,898	3,437
Total manufacturing and royalty revenue collaborative arrangement
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Manufacturing and royalty revenues			505,308	487,247	475,288
Total research and development revenue
Collaborative Arrangements and Non-collaborative Arrangement Transactions
License revenue			28,000
Research and development revenue			$ 7,232	$ 2,301	$ 4,019

COLLABORATIVE ARRANGEMENTS - Significant collaborative arrangements (Details) $ in Thousands, item in Millions	1 Months Ended	3 Months Ended	12 Months Ended
	Nov. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2017 USD ($) agreement item	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Number of license agreements \| agreement			2
License revenue	$ 28,000	$ 28,000	$ 28,000
Milestone payment entitled to be received upon the initiation of phase 3 clinical trial	50,000
Milestone payment entitled to be received upon the approval of NDA by the FDA	$ 150,000
U.S.
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Revenue recognized			700,090	$ 557,312	$ 448,639
BYDUREON \| EU
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payment to be received upon the first commercial sale		7,000	7,000
BYDUREON \| U.S.
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Milestone payment to be received upon the first commercial sale		7,000	7,000
Janssen \| RISPERDAL CONSTA \| Royalty Agreements [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Revenue recognized			20,100	22,300	24,200
Acorda
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Revenue recognized			117,000	114,200	104,700
AstraZeneca \| BYDUREON
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Revenue recognized			$ 45,700	45,600	46,100
License agreement \| Janssen \| RISPERDAL CONSTA
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Royalty rate (as a percent)			2.50%
Notice period required to be given before termination of agreement			30 days
Period after the date of the first commercial sale of the product for license expiration			15 years
Period for resolving default or breach after the receipt of notice for termination of agreement			90 days
License agreement \| Janssen \| INVEGA SUSTENNA/XEPLION
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Patent royalty rate (as a percent)			1.50%
Notice period required to be given before termination of agreement			3 months
Period after the date of the first commercial sale of the product for license expiration			15 years
License agreement \| Janssen \| INVEGA SUSTENNA/XEPLION \| Net sales of below $250.0 million
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Know-how royalty rate (as a percent)			3.50%
Aggregate worldwide net sales			$ 250,000
License agreement \| Janssen \| INVEGA SUSTENNA/XEPLION \| Net sales between $250.0 million and 500.0 million
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Know-how royalty rate (as a percent)			5.50%
License agreement \| Janssen \| INVEGA SUSTENNA/XEPLION \| Net sales greater than $500.0 million
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Know-how royalty rate (as a percent)			7.50%
Aggregate worldwide net sales			$ 500,000
License agreement \| Janssen \| INVEGA SUSTENNA/XEPLION \| Minimum
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Royalty rate (as a percent)			5.00%
License agreement \| Janssen \| INVEGA SUSTENNA/XEPLION \| Minimum \| Net sales between $250.0 million and 500.0 million
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Aggregate worldwide net sales			$ 250,000
License agreement \| Janssen \| INVEGA SUSTENNA/XEPLION \| Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Royalty rate (as a percent)			9.00%
License agreement \| Janssen \| INVEGA SUSTENNA/XEPLION \| Maximum \| Net sales between $250.0 million and 500.0 million
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Aggregate worldwide net sales			$ 500,000
License agreement \| Janssen \| INVEGA SUSTENNA/XEPLION and INVEGA TRINZA
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Revenue recognized			$ 214,900	184,200	149,700
License agreement \| Acorda
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Period after the date of the first commercial sale of the product for license expiration			10 years
Milestone payment entitled to be received upon the initiation of phase 3 clinical trial		1,000	$ 1,000
Milestone payment entitled to be received upon the acceptance of NDA by the FDA		1,000	1,000
Milestone payment entitled to be received upon the approval of NDA by the FDA		1,500	1,500
Milestone payment entitled to be received upon the first commercial sale		$ 1,500	$ 1,500
License agreement \| Acorda \| AMPYRA/ FAMPYRA
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Royalty rate (as a percent)			10.00%
Notice period required to be given before termination of agreement			90 days
Manufacturing and supply agreement \| Janssen \| RISPERDAL CONSTA
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Notice period required to be given before termination of agreement			6 months
Period after the date of the first commercial sale of the product for license expiration			60 days
Revenue recognized			$ 64,800	$ 64,900	$ 76,500
Manufacturing and supply agreement \| Janssen \| RISPERDAL CONSTA \| Minimum
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Royalty rate (as a percent)			7.50%
Royalty rate upon termination of manufacturing and supply agreement (as a percent)			2.50%
Manufacturing and supply agreement \| Janssen \| RISPERDAL CONSTA \| Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Royalty rate upon termination of manufacturing and supply agreement (as a percent)			5.00%
Manufacturing and supply agreement \| Acorda \| AMPYRA/ FAMPYRA
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Royalty rate (as a percent)			8.00%
Notice period required to be given before termination of agreement			12 months
Manufacturing and supply agreement \| Acorda \| AMPYRA/ FAMPYRA \| Maximum
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Percentage of total annual requirement of product that can be obtained from second source manufacturer			25.00%
Development and license agreement \| AstraZeneca \| BYDUREON
Collaborative Arrangements and Non-collaborative Arrangement Transactions
Notice period required to be given before termination of agreement			180 days
Period after the date of the first commercial sale of the product for license expiration			10 years
Period for resolving default or breach after the receipt of notice for termination of agreement			60 days
Royalty as a percentage of net sales from the first 40 million units			8.00%
Royalty as a percentage of net sales beyond the first 40 million units			5.50%
Threshold for number of units sold used to determine royalty rate \| item			40

INCOME TAXES - Provision (benefit) for income taxes (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Deferred income tax (benefit) provision:
Deferred income tax (benefit) provision			$ 7,234	$ (9,689)	$ (37,580)
Total tax (benefit) provision			14,671	(5,943)	3,158
Income tax benefit due to utilization of NOL carryforwards				$ 4,200	$ 28,600
Discrete tax expense			$ 21,453
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent			12.50%	12.50%	12.50%
Performance-based compensation deferred tax asset	$ 13,300		$ 13,300
Provision for income tax provided on undistributed earnings of foreign subsidiaries			0
Cumulative unremitted earnings of overseas subsidiaries	160,300		160,300
U.S. federal
Current income tax provision (benefit):
Current income tax provision (benefit)			6,964	$ 3,163	$ 29,959
Deferred income tax (benefit) provision:
Deferred income tax (benefit) provision			$ 8,188	(9,278)	(18,336)
Discrete tax expense	$ 21,500
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent			35.00%
U.S. federal \| Forecast
Deferred income tax (benefit) provision:
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent		21.00%
U.S. state
Current income tax provision (benefit):
Current income tax provision (benefit)			$ 350	480	1,615
Deferred income tax (benefit) provision:
Deferred income tax (benefit) provision			(933)	(269)	(604)
Ireland.
Current income tax provision (benefit):
Current income tax provision (benefit)					77
Deferred income tax (benefit) provision:
Deferred income tax (benefit) provision			(21)	(142)	(9,647)
Rest of world
Current income tax provision (benefit):
Current income tax provision (benefit)			$ 123	$ 103	$ 94

INCOME TAXES - (Loss) income before the provision for income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Distribution of income (loss) before provision for income taxes
(Loss) Gain before provision (benefit) for income taxes	$ (143,274)	$ (214,387)	$ (224,005)
Ireland
Distribution of income (loss) before provision for income taxes
(Loss) Gain before provision (benefit) for income taxes	(172,363)	(212,198)	(289,105)
U.S.
Distribution of income (loss) before provision for income taxes
(Loss) Gain before provision (benefit) for income taxes	2,414	(18,935)	38,398
Rest of world
Distribution of income (loss) before provision for income taxes
(Loss) Gain before provision (benefit) for income taxes	$ 26,675	$ 16,746	$ 26,702

INCOME TAXES - Deferred tax assets (liabilities) (Details) - USD ($) $ in Thousands	Jan. 01, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Deferred tax assets :
Irish NOL carryforwards		$ 177,435	$ 156,147
Tax credits		71,366	7,608
Share-based compensation		40,048	52,479
Other		13,239	12,233
Less: valuation allowance		(172,797)	(141,859)	$ (106,746)	$ (71,796)
Total deferred tax assets		129,291	86,608
Deferred tax liabilities :
Intangible assets		(18,184)	(20,805)
Property, plant and equipment		(12,040)	(17,541)
Other		(818)	(826)
Total deferred tax liabilities		(31,042)	(39,172)
Net deferred tax assets		98,249	47,436
Schedule of current and non-current deferred tax assets (liabilities)
Increase in deferred tax assets	$ 57,800
Decrease in deferred tax liabilities	3,700
Decrease in accumulated deficit	$ 61,500
Deferred charges related to intercompany transfers of intellectual property
Prepaid expenses and other current assets		188	188
Other assets-long term		686	862
Total deferred charges		874	1,050
Accumulated deficit to write-off unamortized deferred tax charge		1,044,365	$ 947,942
Federal research and development credits		57,500
Alternative minimum tax		10,000
State tax credits		11,900
Accounting Standards Update 2016-16
Deferred charges related to intercompany transfers of intellectual property
Accumulated deficit to write-off unamortized deferred tax charge		900
Deferred Tax Assets, Goodwill and Intangible Assets		17,800
Ireland.
Income taxes
Operating loss carryforwards		1,200,000
Deferred tax assets :
Less: valuation allowance		(163,400)
U.S. state
Income taxes
Operating loss carryforwards		5,900
Federal, State, and Local
Deferred tax assets :
Less: valuation allowance		$ (9,400)

INCOME TAXES - Activity in Valuation Allowance associated with Deferred taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
INCOME TAXES
Balance at Beginning of Period	$ (141,859)	$ (106,746)	$ (71,796)
Additions	(30,938)	(35,113)	(34,950)
Balance at End of Period	$ (172,797)	$ (141,859)	$ (106,746)

INCOME TAXES - Reconciliation of Statutory tax rate to effective tax rate (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of effective income tax rate
Statutory tax rate (as a percent)			12.50%	12.50%	12.50%
Income tax provision at statutory rate			$ (17,909)	$ (26,798)	$ (28,001)
Change in valuation allowance			26,771	35,290	37,312
Federal tax law change			21,453
Impairment on equity method investment			1,662
Uncertain tax positions			830	910	1,213
Foreign rate differential			(682)	2,723	13,951
Share-based compensation			(1,205)	2,072	738
U.S. state income taxes, net of U.S. federal benefit			(558)	(2)	557
Intercompany amounts			(5,041)	(5,209)	(3,649)
Irish rate differential			(2,675)	(5,231)	(7,318)
R & D credit			(9,326)	(10,572)	(12,193)
Other permanent items			1,351	874	548
Total tax (benefit) provision			$ 14,671	$ (5,943)	$ 3,158
Effective tax rate (as a percent)			(10.20%)	2.80%	(1.40%)
Reconciliation of the beginning and ending amount of unrecognized tax benefits
Balance at the beginning of the period		$ 5,518	$ 4,688	$ 3,778	$ 2,565
Reductions based on tax positions related to prior periods			(47)	(7)
Additions based on tax positions related to the current period			877	917	1,213
Balance at the end of the period	$ 5,518		$ 5,518	$ 4,688	$ 3,778
Minimum
Reconciliation of the beginning and ending amount of unrecognized tax benefits
Period after loss carryforwards utilized that tax returns remain open to examination			3 years
Maximum
Reconciliation of the beginning and ending amount of unrecognized tax benefits
Period after loss carryforwards utilized that tax returns remain open to examination			4 years
U.S. federal
Reconciliation of effective income tax rate
Statutory tax rate (as a percent)			35.00%
Federal tax law change	$ 21,500
U.S. federal \| Forecast
Reconciliation of effective income tax rate
Statutory tax rate (as a percent)		21.00%

DIVESTITURE (Details) $ / shares in Units, $ in Thousands			3 Months Ended	12 Months Ended
DIVESTITURE (Details) $ / shares in Units, $ in Thousands	Apr. 10, 2015 USD ($) shares	Apr. 09, 2015 item $ / shares	Jun. 30, 2018	Dec. 31, 2017 USD ($) $ / shares	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Discount rate (as a percent)				8.00%
Contingent consideration				$ 84,800	$ 63,200
Increase/(Decrease) in the fair value of contingent consideration				21,600	7,900	$ (2,300)
Decrease (increase) in fair value of warrants					400	300
Estimated consideration received
Fair value of warrants						2,123
Gain on the Gainesville Transaction						9,636
Gainesville Transaction
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Maximum milestone payment receivable				80,000
Milestone payment upon regulatory approval of NDA				$ 45,000
Discount rate (as a percent)				15.00%
Contingent consideration				$ 84,800	63,200
Increase/(Decrease) in the fair value of contingent consideration				21,600	$ 7,900	(2,300)
Fair value of warrants	$ 2,100			1,400
Recro \| Gainesville Transaction
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Initial cash payment on disposition				50,000
Payment relating to net working capital on disposition				$ 4,000
Warrant term (in years)				P7Y
Number of times closing price of common stock on prior day \| item		2
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Closing stock price at December 31, 2017 \| $ / shares				$ 9.25
Warrant strike price \| $ / shares		$ 19.46		$ 19.46
Expected term (years)				4 years 3 months 7 days
Risk-free rate (as a percent)				2.09%
Volatility (as a percent)				77.00%
Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member] \| Recro \| Gainesville Transaction
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Warrants received \| shares	350,000
Disposal Group, Held-for-sale or Disposed of by Sale, Not Discontinued Operations \| Gainesville Transaction
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Maximum milestone payment receivable	$ 125,000
Disposal group income before income tax						$ 4,500
Estimated consideration received
Cash	54,010
Fair value of warrants	2,123
Fair value of contingent consideration	57,600
Total consideration received	113,733
Less: net assets sold	(101,373)
Less: transaction costs	(2,724)
Gain on the Gainesville Transaction	$ 9,636
Minimum \| Gainesville Transaction
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Discount rate (as a percent)				3.50%
Maximum
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Decrease (increase) in fair value of warrants				$ 100
Maximum \| Gainesville Transaction
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Discount rate (as a percent)				5.40%
Forecast \| Gainesville Transaction
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Discount rate (as a percent)			3.00%

COMMITMENTS AND CONTINGENCIES - Lease Commitments and Litigation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Future minimum rental commitments under non-cancelable operating leases
2018	$ 9,174
2019	9,092
2020	6,404
2021	2,448
2022	1,195
Thereafter	3,615
Total future minimum lease payments before estimated sublease income	31,928
Rent expense related to operating leases
Rent expense	9,400	$ 8,100	$ 7,200
Sublease income			$ 700
Purchase commitments
Open purchase order commitments	$ 473,900
Maximum number of days for lawsuit	45 days
Minimum number of months before FDA can approve patent request	30 months
Maximum
Lease Commitments
Provisions for extension of lease term	10 years