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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2018	Apr. 20, 2018
Document and Entity Information
Entity Registrant Name	Alkermes plc.
Entity Central Index Key	0001520262
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		155,037,850
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
CURRENT ASSETS:
Cash and cash equivalents	$ 186,505	$ 191,296
Investments - short-term	218,057	242,208
Receivables, net	214,160	233,590
Contract assets	26,069
Inventory	84,884	93,275
Prepaid expenses and other current assets	46,463	48,475
Total current assets	776,138	808,844
PROPERTY, PLANT AND EQUIPMENT, NET	289,621	284,736
INTANGIBLE ASSETS - NET	240,099	256,168
INVESTMENTS - LONG-TERM	137,473	157,212
GOODWILL	92,873	92,873
CONTINGENT CONSIDERATION	82,900	84,800
DEFERRED TAX ASSETS	100,504	98,560
OTHER ASSETS	16,950	14,034
TOTAL ASSETS	1,736,558	1,797,227
CURRENT LIABILITIES:
Accounts payable and accrued expenses	268,166	286,166
Long-term debt - short-term	2,843	3,000
Contract liabilities—short-term	3,521	1,956
Total current liabilities	274,530	291,122
LONG-TERM DEBT	278,088	278,436
OTHER LONG-TERM LIABILITIES	21,883	19,204
CONTRACT LIABILITIES—LONG-TERM	6,166	5,657
Total liabilities	580,667	594,419
COMMITMENTS AND CONTINGENCIES (Note 13)
SHAREHOLDERS' EQUITY:
Preferred shares, par value, $0.01 per share; 50,000,000 shares authorized; zero issued and outstanding at March 31, 2018 and December 31, 2017, respectively
Ordinary shares, par value, $0.01 per share; 450,000,000 shares authorized; 157,313,318 and 156,057,632 shares issued; 155,003,983 and 154,009,456 shares outstanding at March 31, 2018 and December 31, 2017, respectively	1,570	1,557
Treasury shares, at cost (2,309,335 and 2,048,176 shares at March 31, 2018 and December 31, 2017, respectively)	(105,071)	(89,347)
Additional paid-in capital	2,372,083	2,338,755
Accumulated other comprehensive loss	(4,129)	(3,792)
Accumulated deficit	(1,108,562)	(1,044,365)
Total shareholders' equity	1,155,891	1,202,808
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$ 1,736,558	$ 1,797,227

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2018	Dec. 31, 2017
CONDENSED 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	157,313,318	156,057,632
Ordinary shares, shares outstanding	155,003,983	154,009,456
Treasury shares	2,309,335	2,048,176

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
REVENUES:
Total revenues	$ 225,150	$ 191,778
EXPENSES:
Cost of goods manufactured and sold (exclusive of amortization of acquired intangible assets shown below)	44,476
Research and development	108,346	104,835
Selling, general and administrative	118,147	102,099
Amortization of acquired intangible assets	16,069	15,302
Total expenses	287,038	262,648
OPERATING LOSS	(61,888)	(70,870)
OTHER EXPENSE NET:
Interest income	1,485	943
Interest expense	(5,487)	(2,764)
Change in the fair value of contingent consideration	(1,900)	1,600
Other income (expense), net	792	(1,499)
Total other expense, net	(5,110)	(1,720)
LOSS BEFORE INCOME TAXES	(66,998)	(72,590)
INCOME TAX BENEFIT	(4,493)	(3,709)
NET LOSS	$ (62,505)	$ (68,881)
LOSS PER ORDINARY SHARE:
Basic and diluted (in dollars per share)	$ (0.40)	$ (0.45)
WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING:
Basic and diluted (in shares)	154,424	152,704
COMPREHENSIVE LOSS:
Net loss	$ (62,505)	$ (68,881)
Holding (loss) gain, net of a tax (benefit) provision of $(100) and $23, respectively	(336)	72
COMPREHENSIVE LOSS	(62,841)	(68,809)
Manufacturing and royalty revenues
REVENUES:
Total revenues	114,601	114,679
EXPENSES:
Cost of goods manufactured and sold (exclusive of amortization of acquired intangible assets shown below)	44,476	40,412
Product sales, net
REVENUES:
Total revenues	91,842	76,456
License revenue
REVENUES:
Total revenues	27,000
Research and development revenue
REVENUES:
Total revenues	$ 18,707	$ 643

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
Tax (benefit) provision	$ (100)	$ 23

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (62,505)	$ (68,881)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization	25,722	23,763
Share-based compensation expense	20,042	21,169
Deferred income taxes	(4,101)	(1,215)
Change in the fair value of contingent consideration	1,900	(1,600)
Loss on debt refinancing	2,298
Payment made for debt refinancing	(1,840)
Other non-cash charges		1,623
Other non-cash charges	(75)
Changes in assets and liabilities:
Receivables	19,430	14,615
Contract assets	(16,959)
Inventory	(431)	(733)
Prepaid expenses and other assets	890	(2,901)
Accounts payable and accrued expenses	(14,123)	(1,730)
Contract liabilities	245	(105)
Other long-term liabilities	2,669	2,248
Cash flows used in operating activities	(26,838)	(13,747)
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions of property, plant and equipment	(18,485)	(9,382)
Proceeds from the sale of equipment	324	3
Purchases of investments	(35,995)	(30,161)
Sales and maturities of investments	79,500	55,000
Cash flows provided by investing activities	25,344	15,460
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of ordinary shares under share-based compensation arrangements	13,164	7,114
Employee taxes paid related to net share settlement of equity awards	(15,724)	(13,148)
Payment made for debt refinancing	(737)
Principal payments of long-term debt		(750)
Cash flows used in financing activities	(3,297)	(6,784)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(4,791)	(5,071)
CASH AND CASH EQUIVALENTS - Beginning of period	191,296	186,378
CASH AND CASH EQUIVALENTS - End of period	186,505	181,307
Non-cash investing and financing activities:
Purchased capital expenditures included in accounts payable and accrued expenses	$ 7,516	$ 4,978

THE COMPANY	3 Months Ended
THE COMPANY	Mar. 31, 2018
THE COMPANY
THE COMPANY	1. THE COMPANY Alkermes plc 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 marketed drug products and a clinical pipeline of product candidates that address CNS disorders such as schizophrenia, depression, addiction and MS. Headquartered in Dublin, Ireland, Alkermes has a research and development (“R&D”) center in Waltham, Massachusetts; an R&D and manufacturing facility in Athlone, Ireland; and a manufacturing facility in Wilmington, Ohio.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed consolidated financial statements of the Company for the three months ended March 31, 2018 and 2017 are unaudited and have been prepared on a basis substantially consistent with the audited financial statements for the year ended December 31, 2017. The year-end condensed consolidated balance sheet data, which is presented for comparative purposes, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the U.S. (commonly referred to as “GAAP”). In the opinion of management, the condensed consolidated financial statements include all adjustments, which are of a normal recurring nature, that are necessary to state fairly the results of operations for the reported periods.

These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto of the Company, which are contained in the Company’s Annual Report that has been filed with the SEC. The results of the Company’s operations for any interim period are not necessarily indicative of the results of the Company’s operations for any other interim period or for a full fiscal year.

Principles of Consolidation

The condensed consolidated financial statements include the accounts of Alkermes plc and its wholly-owned subsidiaries as disclosed in Note 2, Summary of Significant Accounting Policies, in the “Notes to Consolidated Financial Statements” accompanying the Company’s Annual Report. Intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of the Company’s condensed consolidated financial statements in accordance with 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 ongoing basis, the Company evaluates its estimates, 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.

Segment Information

The Company operates as one business segment, which is the business of developing, manufacturing and commercializing medicines. The Company’s chief decision maker, the Chairman of the Board 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.

Income Taxes

The Company’s income tax benefit in the three months ended March 31, 2018 and 2017 primarily relates to U.S. federal and state taxes. The Company records a deferred tax asset or liability based on the difference between the financial statement and tax basis of its assets and liabilities, as measured by enacted jurisdictional tax rates assumed to be in effect when these differences reverse. At March 31, 2018, the Company maintained a valuation allowance against certain of its U.S. and foreign deferred tax assets. The Company evaluates, at each reporting period, the need for a valuation allowance on its deferred tax assets on a jurisdiction-by-jurisdiction basis.

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 guidance 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 (“Topic 606”) 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. The two permitted transition methods under the new guidance are the full retrospective method, in which case the guidance would be applied to each prior reporting period presented and the cumulative effect of applying the guidance would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the guidance would be recognized at the date of initial application. In July 2015, the FASB approved the deferral of the new guidance's effective date by one year. The new guidance became effective for annual reporting periods beginning after December 15, 2017.

Effective January 1, 2018, the Company adopted the requirements of Topic 606 using the modified retrospective method. As part of the adoption, the Company reviewed all contracts that were not yet completed as of the date of initial application in determining the cumulative-effect impact related to the adoption of Topic 606. The cumulative-effect impact recorded to retained earnings resulted in an adjustment of approximately $0.8 million, which was primarily due to the acceleration of manufacturing revenue, offset by an adjustment to deferred revenue for license and milestone payments that will now be recognized over time. The following balance sheet accounts were impacted:


	Topic 606 Adjustment
(In thousands)
Contract assets	$	9,110
Inventory		(8,209)
Deferred tax asset		109
Contract liabilities—short-term		(1,104)
Contract liabilities—long-term		(724)
Accumulated deficit		818
	$	—

For additional information regarding how the Company is accounting for revenue under the updated guidance, refer to Note 3, Revenue from Contracts with Customers, in the “Notes to Condensed Consolidated Financial Statements” in this Form 10-Q.

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 the year ending December 31, 2018, and the Company has determined that the adoption of this guidance 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 the year ending December 31, 2019, and the Company is currently assessing the impact that this guidance will have on its consolidated financial statements. At this time, the Company cannot reasonably estimate the expected impact the adoption of this new guidance will have on its consolidated financial statements.

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 the year ending December 31, 2020, with early adoption permitted for the Company in the year ending December 31, 2019. The Company is currently assessing the impact that this guidance will have on its consolidated financial statements.

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. Effective January 1, 2018, the Company adopted this guidance and recorded a cumulative-effect adjustment of $0.9 million to retained earnings.

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 the 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.

REVENUE FROM CONTRACTS WITH CUSTOMERS

3 Months Ended

Mar. 31, 2018

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

3. REVENUE FROM CONTRACTS WITH CUSTOMERS

Under Topic 606, the Company recognizes revenues when its customer obtains control of promised goods or services, in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The Company recognizes revenues following the five step model prescribed under Topic 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) the Company satisfies the performance obligation.

Collaborative Arrangements

The Company has entered into collaboration agreements with pharmaceutical companies including Janssen for INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA as well as RISPERDAL CONSTA; Acorda for AMPYRA/FAMPYRA; AstraZeneca for BYDUREON; and Biogen for BIIB098 (formerly ALKS 8700). Substantially all of the products developed under the Company’s collaborative arrangements, except for BIIB098, are currently being marketed as approved products, for which the Company receives payments for manufacturing services and/or royalties on net product sales.

During the three months ended March 31, 2018 and 2017, the Company recorded manufacturing and royalty revenues from its collaborative arrangements as follows:


	Three Months Ended March 31, 2018
(In thousands)		Manufacturing Revenue		Royalty Revenue		Total
INVEGA SUSTENNA/XEPLION & INVEGA TRINZA/TREVICTA	$	—	$	46,086	$	46,086
AMPYRA/FAMPYRA		13,563		14,696		28,259
RISPERDAL CONSTA		17,792		4,912		22,704
BYDUREON		—		9,749		9,749
Other		6,236		1,567		7,803
	$	37,591	$	77,010	$	114,601

	Three Months Ended March 31, 2017
(In thousands)		Manufacturing Revenue		Royalty Revenue		Total
INVEGA SUSTENNA/XEPLION & INVEGA TRINZA/TREVICTA	$	—	$	39,182	$	39,182
AMPYRA/FAMPYRA		13,836		15,383		29,219
RISPERDAL CONSTA		15,640		5,181		20,821
BYDUREON		—		12,266		12,266
Other		9,376		3,815		13,191
	$	38,852	$	75,827	$	114,679

Manufacturing revenues— The Company recognizes manufacturing revenues from the sale of products it manufactures, which is its one performance obligation under such arrangements, for resale by its licensees. Manufacturing revenues for the Company’s partnered products, with the exception of those from Janssen related to RISPERDAL CONSTA, are recognized over time as products move through the manufacturing process, using a standard cost-based model as a measure of progress, which represents a faithful depiction of the transfer of goods. The Company recognizes manufacturing revenue from these products over-time as it determined, in each instance, that it has a right to payment for performance completed to date if its customer were to terminate the manufacturing agreement for reasons other than the Company’s non-performance and the products have no alternative future use. The Company invoices its licensees upon shipment with payment terms between 30 to 90 days. Prior to the adoption of Topic 606, the Company recorded manufacturing revenue from the sale of products it manufactures for resale by its partners after the Company had shipped such products and risk of loss had passed to the Company’s partner, assuming persuasive evidence of an arrangement existed, the sales price was fixed or determinable and collectability was reasonably assured.

The Company is the exclusive manufacturer of RISPERDAL CONSTA for commercial sale under its manufacturing and supply agreement with Janssen. The Company determined that it is appropriate to record revenue under this agreement at the point in time when control of the product passes to Janssen, which is determined to be when the product has been fully manufactured, since Janssen does not control the product during the manufacturing process and, in the event Janssen terminates the manufacturing and supply agreement, it is unclear whether, and at what amount, the Company would be reimbursed for performance completed to date for product not yet fully manufactured. The manufacturing process is considered fully complete once the finished goods have been approved for shipment by both the Company and Janssen.

The sales price for certain of the Company’s manufacturing revenues is based on the end-market sales price earned by its licensees. As end-market sales generally occur after the Company has recorded manufacturing revenue, the Company estimates the sales price for such products based on information supplied to it by the Company’s licensees, 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 same 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 licensees that incorporate the Company's technologies. Royalties, with the exception of those earned on sales of AMPYRA, qualify for the sales-and-usage exemption under Topic 606 as (i) royalties are based strictly on the sales-and-usage by the licensee; and (ii) a license of IP is the sole or predominant item to which such royalties relate. Based on this exemption, these royalties are earned under the terms of a license agreement in the period the products are sold by the Company's partner and the Company has a present right to payment. Royalties on AMPYRA are incorporated into the standard cost-based model described in the manufacturing revenues section, above, as the terms of the agreement are such that the Company is entitled to the royalty revenue as the product is being manufactured, which represents a faithful depiction of the transfer of goods, and not based on the end-market sales of the licensee. 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 same quarter. The difference between the Company’s actual and estimated royalty revenues has not been material.

Multiple Element Arrangements

When entering into multiple element arrangements, the Company identifies whether its performance obligations under the arrangement represent a distinct good or service or a series of distinct goods or services. A series of distinct goods or services is required to be accounted for as a single performance obligation provided that (i) each distinct good or service in the series promised would meet the criteria to be a performance obligation satisfied over-time; and (ii) the same method would be used to measure the Company’s progress toward complete satisfaction of the performance obligation to transfer each distinct good or service in the series to the customer. If a contract is separated into more than one performance obligation, the Company allocates the total transaction price to each performance obligation in an amount based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. 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.

The Company recognizes revenue when or as it satisfies a performance obligation by transferring an asset to a customer. An asset is transferred when or as the customer obtains control of that asset. 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.

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) new drug application (“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 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, 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, since January 1, 2018, Biogen is 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 Topic 606 and determined that it had four initial performance obligations: (i) the grant of a distinct, right-to-use 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 steering 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 performance obligations as the license is separately identifiable from the development services and clinical supply, and the development services are not expected to significantly modify or customize the IP.

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. The Company allocated the non-contingent 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 allocate the consideration to the performance obligations. 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 maintenance of the 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, under Topic 606, the Company allocated $27.0 million to the delivery of the license, $0.9 million to future R&D work and $0.1 million to clinical supply. The amounts allocated to the R&D services and clinical supply will be recognized over the course of the R&D work and as clinical supply is delivered to Biogen, which is expected to continue through 2019.

The Company determined that the future milestones it is entitled to receive, including an option payment of $50.0 million 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 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, and sales-based royalties, are variable consideration. The Company is using the most likely amount method for estimating the variable consideration to be received related to the milestones under this arrangement. 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. Accordingly, the Company has not included these milestones or royalties in the transaction price as it is not probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

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. Revenue is recognized as the obligations under the R&D arrangements are performed. The research and development revenue recorded during the three months ended March 31, 2018 primarily related to revenue earned under the Company’s license and collaboration agreement with Biogen for BIIB098.

Product Sales, Net

The Company’s product sales, net consist of sales of VIVITROL and ARISTADA in the U.S. primarily to wholesalers, specialty distributors and pharmacies. Product sales, net are recognized when the customer obtains control of the product, which is when the product has been received by the customer.

Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with the Company’s customers, health care providers or payors. The Company’s process for estimating reserves established for these variable consideration components does not differ materially from historical practices. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from the Company’s estimates. If actual results vary, the Company adjusts these estimates, which could have an effect on earnings in the period of adjustment. The following are the Company’s significant categories of sales discounts and allowances:

●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 using the most likely amount method. 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 adjusts 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—discounts that occur when contracted indirect customers purchase directly from wholesalers and specialty distributors. Contracted customers generally purchase a 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 made using the most likely amount method and 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. The reserve is made using the most likely amount method and to date, actual product discounts have not differed materially from the Company’s estimates; and

●Product Returns—the Company records an estimate for product returns at the time its customers take title to the Company’s product. The Company estimates this liability using the most likely amount method 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.

During the three months ended March 31, 2018 and 2017, the Company recorded product sales, net, as follows:


	Three Months Ended March 31,
(In thousands)	2018		2017
VIVITROL	$	62,682	$	58,456
ARISTADA		29,160		18,000
Total product sales, net	$	91,842	$	76,456

Receivables, Net—Receivables, net, include amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable. The Company’s allowance for doubtful accounts was $0.2 million at March 31, 2018 and December 31, 2017.

Contract Assets—Contract assets include unbilled amounts resulting from sales under certain of the Company’s manufacturing contracts where revenue is recognized over-time. The products included in the contract assets table below complete the manufacturing process in ten days to eight weeks. As such, the Company availed itself of the practical expedient to not disclose the transaction price allocated to the remaining performance obligations as the only performance obligation is completing the manufacturing of such products, and the time remaining to manufacture the products is less generally less than eight weeks. Contract assets are classified as current.

Contract assets consisted of the following:


(In thousands)	Contract Assets
Contract assets at January 1, 2018	$	9,110
Additions		23,882
Transferred to receivables, net		(6,923)
Contract assets at March 31, 2018	$	26,069

Contract Liabilities—The Company’s contract liabilities consist of contractual obligations related to deferred revenue.

Contract liabilities consisted of the following:


(In thousands)	Contract Liabilities
Contract liabilities at January 1, 2018	$	9,442
Additions		909
Amounts recognized into revenue		(664)
Contract liabilities at March 31, 2018	$	9,687

In order to determine revenue recognized in the period from contract liabilities, we first allocate revenue to the individual contract liability balance outstanding at the beginning of the period until the revenue exceeds that balance. If additional advances are received on those contracts in subsequent periods, we assume all revenue recognized in the reporting period first applies to the beginning contract liability as opposed to a portion applying to the new advances for the period.

The Company adopted Topic 606 using the modified retrospective method. As such, the Company recognized the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of equity at January 1, 2018. Therefore, the comparative information has not been adjusted and continues to be reported under the old revenue recognition guidance (“Topic 605”). The quantitative impact of the changes are set out below for each the condensed consolidated balance sheet and the condensed consolidated statement of operations for the current reporting period.

ADJUSTED CONDENSED CONSOLIDATED BALANCE SHEET


	March 31, 2018
	As Reported		Adjustment			Balances Without Adoption of Topic 606
	(In thousands)
ASSETS
Contract assets	$	26,069	$	(26,069)	(1)	$	—
Inventory		84,884		12,058	(2)		96,942
Deferred tax asset		100,504		1,148	(3)		101,652

LIABILITIES
Contract liabilities—short-term	$	3,521	$	(3,521)	(4)	$	—
Deferred revenue—short-term		—		2,532	(4)		2,532
Contract liabilities—long-term		6,166		(6,166)	(4)		—
Deferred revenue—long-term		—		5,505	(4)		5,505

SHAREHOLDERS' EQUITY
Accumulated deficit	$	(1,108,562)	$	(11,213)	(5)	$	(1,119,775)

The adjustments are a result of the following:


(1)	Adjustment to contract assets is to reverse revenue recognized over time under Topic 606.
(2)	Adjustment to inventory to add back the cost of goods manufactured related to the revenue transactions summarized in item (1), above.
(3)	Adjustment to deferred tax asset is to apply the tax impact of the revenue transactions summarized in item (1), above.
(4)	Adjustment to contract liabilities—short-term and contract liabilities—long-term to reclassify amounts previously classified as deferred revenue—short-term and deferred revenue—long-term under Topic 605.
(5)	Adjustment to accumulated deficit for the net impact of the transactions noted in items (1) through (4), above.

ADJUSTED CONDENSED CONSOLIDATED STATEMENTS

OF OPERATIONS AND COMPREHENSIVE LOSS


	Three Months Ended March 31, 2018
	As Reported		Adjustment			Balances Without Adoption of Topic 606
	(In thousands, except per share amounts)
REVENUES:
Manufacturing and royalty revenues	$	114,601	$	(16,959)	(1)	$	97,642
Product sales, net		91,842		—			91,842
Research and development revenue		18,707		(178)			18,529
Total revenues		225,150		(17,137)			208,013
EXPENSES:
Cost of goods manufactured and sold		44,476		(3,849)	(2)		40,627
Research and development		108,346		—			108,346
Selling, general and administrative		118,147		—			118,147
Amortization of acquired intangible assets		16,069		—			16,069
Total expenses		287,038		(3,849)			283,189
Operating loss		(61,888)		(13,288)			(75,176)
Other expense, net		(5,110)		—			(5,110)
Loss before income taxes		(66,998)		(13,288)			(80,286)
Income tax benefit		(4,493)		(1,257)			(5,750)
Net loss	$	(62,505)	$	(12,031)		$	(74,536)

Loss per ordinary share — basic and diluted	$	(0.40)	$	(0.08)		$	(0.48)

The adjustments are a result of the following:

(1)	Adjustment to manufacturing and royalty revenues to recognize revenue under Topic 605 in the three months ended March 31, 2018 that was recognized under Topic 606.
(2)	Adjustment to cost of goods manufactured and sold to recognize the cost from the transactions noted in item (1), above.

The Company’s changes in assets and liabilities within its condensed consolidated statement of cash flows changed as a result of the differences in the condensed consolidated balance sheet and change in net income in the condensed consolidated statement of operations but the overall cash flows used in operating activities did not change.

INVESTMENTS

3 Months Ended

Mar. 31, 2018

INVESTMENTS

INVESTMENTS

4. INVESTMENTS

Investments consisted of the following (in thousands):


			Gross Unrealized
					Losses
	Amortized				Less than		Greater than		Estimated
March 31, 2018	Cost		Gains		One Year		One Year		Fair Value
Short-term investments:
Available-for-sale securities:
U.S. government and agency debt securities	$	125,234	$	—	$	(169)	$	(196)	$	124,869
Corporate debt securities		58,056		4		(4)		(170)		57,886
International government agency debt securities		35,376		—		(12)		(62)		35,302
Total short-term investments		218,666		4		(185)		(428)		218,057
Long-term investments:
Available-for-sale securities:
Corporate debt securities		71,477		—		(48)		(517)		70,912
U.S. government and agency debt securities		37,446		—		(78)		(290)		37,078
International government agency debt securities		25,935		—		—		(183)		25,752
		134,858		—		(126)		(990)		133,742
Held-to-maturity securities:
Fixed term deposit account		1,667		273		—		—		1,940
Certificates of deposit		1,791		—		—		—		1,791
		3,458		273		—		—		3,731
Total long-term investments		138,316		273		(126)		(990)		137,473
Total investments	$	356,982	$	277	$	(311)	$	(1,418)	$	355,530

December 31, 2017
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

The proceeds from the sales and maturities of marketable securities, which were primarily reinvested and resulted in realized gains and losses, were as follows:


	Three Months Ended March 31,
(In thousands)	2018		2017
Proceeds from the sales and maturities of marketable securities	$	79,500	$	55,000
Realized gains	$	1	$	9
Realized losses	$	4	$	3

The Company’s available-for-sale and held-to-maturity securities at March 31, 2018 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	$	215,560	$	214,949	$	1,791	$	1,791
After 1 year through 5 years		137,964		136,850		1,667		1,940
Total	$	353,524	$	351,799	$	3,458	$	3,731

At March 31, 2018, the Company believed that the unrealized losses on its available-for-sale investments were temporary. The investments with unrealized losses consisted primarily of U.S. government and agency debt securities. 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; 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 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 March 31, 2018, the Company’s total contribution in Fountain was equal to €4.2 million. The Company’s 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 three months ended March 31, 2018 and 2017, the Company recorded a decrease in its investment in Fountain of less than $0.1 million and $0.6 million, respectively, which represents the Company’s proportional share of Fountain’s net losses for these periods. The Company’s $4.0 million and $3.7 million net investment in Fountain at March 31, 2018 and December 31, 2017, respectively, was included within “Other assets” in the accompanying condensed consolidated balance sheets.

FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2018

FAIR VALUE MEASUREMENTS

FAIR VALUE

5. FAIR VALUE MEASUREMENTS

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 of the valuation techniques the Company utilized to determine such fair value:


	March 31,
(In thousands)	2018		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	1,940	$	1,940	$	—	$	—
U.S. government and agency debt securities		161,947		101,982		59,965		—
Corporate debt securities		128,798		—		128,798		—
International government agency debt securities		61,054		—		61,054		—
Contingent consideration		82,900		—		—		82,900
Common stock warrants		1,697		—		—		1,697
Total	$	438,336	$	103,922	$	249,817	$	84,597


	December 31,
	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

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 between the fair value hierarchies during the three months ended March 31, 2018. The following table is a rollforward of the fair value of the Company’s assets whose fair values were determined using Level 3 inputs at March 31, 2018:


(In thousands)	Fair Value
Balance, January 1, 2018	$	86,195
Change in the fair value of contingent consideration		(1,900)
Increase in the fair value of warrants		302
Balance, March 31, 2018	$	84,597

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 Company’s contingent consideration relates to the divestiture of its Gainesville, GA facility, as summarized in Note 15, Divestiture, in the “Notes to Consolidated Financial Statements” of the Company’s Annual Report. At March 31, 2018, the Company determined the value of the contingent consideration using the following valuation approaches:

• The Company is entitled to receive $45.0 million upon regulatory approval of the first NDA for IV/IM and parenteral forms of Meloxicam or any other product with the same active ingredient as Meloxicam IV/IM that is discovered or identified using certain of the Company’s IP to which Recro Pharma, Inc. (“Recro”) was provided a right of use, through license or transfer (the “Meloxicam Product(s)”). The fair value of the regulatory milestone was estimated based on applying the likelihood of achieving this 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 3.7%;

• 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 of such Meloxicam Product assuming approval and IP protection. The Company then discounted these expected payments using a discount rate of 16.0%, 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 Products. 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 3.9% to 6.0%.

At March 31, 2018 and December 31, 2017, the Company determined that the value of the contingent consideration was $82.9 million and $84.8 million, respectively. The Company recorded the decrease of $1.9 million and increase of $1.6 million during the three months ended March 31, 2018 and 2017, respectively, within “Change in the fair value of contingent consideration” in the accompanying condensed consolidated statements of operations and comprehensive loss.

As part of the Gainesville Transaction, the Company also received warrants to purchase 350,000 shares of Recro common stock at a per share exercise price of $19.46. The Company used a Black-Scholes model with the following assumptions to determine the fair value of these warrants at March 31, 2018:


Closing stock price at March 31, 2018	$	11.01
Warrant strike price	$	19.46
Expected term (years)		4.02
Risk-free rate		2.48	%
Volatility		75.0	%

During the three months ended March 31, 2018 and 2017, the Company determined that the fair value of the warrants, recorded within “Other assets” in the accompanying condensed consolidated balance sheets, increased by $0.3 million and $0.2 million, respectively. The change in the fair value of the warrants was recorded within “Other expense, net” in the accompanying condensed consolidated statements of operations and comprehensive loss.

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.

- 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

3 Months Ended

Mar. 31, 2018

INVENTORY

INVENTORY

6. INVENTORY

Inventory is stated at the lower of cost and net realizable value. Cost is determined using the first-in, first-out method. Inventory consisted of the following:


	March 31,		December 31,
(In thousands)	2018		2017
Raw materials	$	27,005	$	29,883
Work in process		36,895		38,964
Finished goods(1)		20,984		24,428
Total inventory	$	84,884	$	93,275

(1)	At March 31, 2018 and December 31, 2017, the Company had $15.9 million and $8.7 million, respectively, of finished goods inventory located at its third-party warehouse and shipping service provider.

PROPERTY, PLANT AND EQUIPMENT

3 Months Ended

Mar. 31, 2018

PROPERTY, PLANT AND EQUIPMENT

PROPERTY, PLANT AND EQUIPMENT

7. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following:


	March 31,		December 31,
(In thousands)	2018		2017
Land	$	6,293	$	6,293
Building and improvements		155,858		155,198
Furniture, fixtures and equipment		294,249		289,455
Leasehold improvements		19,930		19,578
Construction in progress		62,689		54,270
Subtotal		539,019		524,794
Less: accumulated depreciation		(249,398)		(240,058)
Total property, plant and equipment, net	$	289,621	$	284,736

GOODWILL AND INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2018

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS

8. GOODWILL AND INTANGIBLE ASSETS

Goodwill and intangible assets consisted of the following:


		Three Months Ended
		March 31, 2018
(In thousands)	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Goodwill		$	92,873	$	—	$	92,873
Finite-lived intangible assets:
Collaboration agreements	12	$	465,590	$	(281,701)	$	183,889
NanoCrystal technology	13		74,600		(33,172)		41,428
OCR technologies	12		42,560		(27,778)		14,782
Total		$	582,750	$	(342,651)	$	240,099

Based on the Company’s most recent analysis, amortization of intangible assets included within its condensed consolidated balance sheet at March 31, 2018 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.

- 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

3 Months Ended

Mar. 31, 2018

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

9. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consisted of the following:


	March 31,		December 31,
(In thousands)	2018		2017
Accounts payable	$	65,446	$	55,526
Accrued compensation		46,966		54,568
Accrued sales discounts, allowances and reserves		104,745		111,137
Accrued other		51,009		64,935
Total accounts payable and accrued expenses	$	268,166	$	286,166

LONG-TERM DEBT

3 Months Ended

Mar. 31, 2018

LONG-TERM DEBT

LONG-TERM DEBT

10. LONG-TERM DEBT

Long-term debt consisted of the following:


	March 31,		December 31,
(In thousands)	2018		2017
2023 Term Loans, due March 26, 2023	$	280,931	$	281,436
Less: current portion		(2,843)		(3,000)
Long-term debt	$	278,088	$	278,436

In March 2018, the Company amended and refinanced its existing term loan, referred to as Term Loan B-1 (as so amended and refinanced the “2023 Term Loans”), in order to, among other things, extend the due date of the loan from September 25, 2021 to March 26, 2023, reduce the interest payable from LIBOR plus 2.75% with a LIBOR floor of 0.75% to LIBOR plus 2.25% with no LIBOR floor and increase covenant flexibility (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 the 2023 Term Loans were at least 10% different from the present value of the remaining cash flows under the former 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. With the exception of one lender, who owned 1% of the total outstanding principal amount of Term Loan B-1 at the date of the Refinancing and was accounted for as a debt extinguishment, the Refinancing was accounted for as a debt modification.

The Refinancing resulted in a $2.3 million charge in the three months ended March 31, 2018, which was included in “Interest expense” in the accompanying condensed consolidated statement of operations and comprehensive loss.

RESTRUCTURING	3 Months Ended
RESTRUCTURING	Mar. 31, 2018
RESTRUCTURING
RESTRUCTURING	11. RESTRUCTURING On January 25, 2018, the Company’s management approved a restructuring plan at its Athlone, Ireland manufacturing facility designed to streamline future operational performance. The restructuring plan included a reduction in headcount of 24 employees. In connection with this restructuring plan, during the three months ended March 31, 2018, the Company recorded a restructuring charge of $3.2 million within cost of goods manufactured and sold and $0.4 million within R&D expense, which consisted of severance and outplacement services. The Company will make severance payments and pay for outplacement services through June 2018.

SHARE-BASED COMPENSATION

3 Months Ended

Mar. 31, 2018

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION

12. SHARE-BASED COMPENSATION

Share-based compensation expense consisted of the following:


	Three Months Ended
	March 31,
(In thousands)	2018		2017
Cost of goods manufactured and sold	$	1,418	$	2,233
Research and development		6,714		5,594
Selling, general and administrative		11,910		13,342
Total share-based compensation expense	$	20,042	$	21,169

At March 31, 2018 and December 31, 2017, $0.5 million and $0.4 million, respectively, of share-based compensation cost was capitalized and recorded as “Inventory” in the accompanying condensed consolidated balance sheets.

In February 2017, the compensation committee of the Company’s board of directors approved awards of restricted stock units (“RSUs”) to all employees employed by the Company during 2017, in each case subject to vesting on the achievement of the following performance criteria: (i) FDA approval of the NDA for ALKS 5461, (ii) the achievement of the pre-specified primary efficacy endpoints in each of two phase 3 studies of ALKS 3831, and (iii) revenues equal to or greater than a pre-specified amount for the year ending December 31, 2019. These performance criteria will be assessed over a performance period of three years from the date of the grant. At March 31, 2018, there was $58.0 million of unrecognized compensation cost related to these performance-vesting RSUs, 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.

LOSS PER SHARE

3 Months Ended

Mar. 31, 2018

LOSS PER SHARE

LOSS PER SHARE

13. 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 three months ended March 31, 2018 and 2017, as the Company was in a net loss position, the diluted loss per share does 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 have not been included in the net loss per ordinary share calculation because the effect would have been anti-dilutive:


	Three Months Ended
	March 31,
(In thousands)	2018		2017
Stock options		10,217		9,176
Restricted stock units		2,808		1,835
Total		13,025		11,011

COMMITMENTS AND CONTINGENCIES	3 Months Ended
COMMITMENTS AND CONTINGENCIES	Mar. 31, 2018
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES	14. COMMITMENTS AND CONTINGENCIES Lease Commitments In March 2018, the Company entered into a lease agreement for approximately 220,000 square feet of office and laboratory space located in a building to be built at 900 Winter Street, Waltham, Massachusetts (“900 Winter Street”). The Company plans to occupy the premises in early 2020. The initial term of the lease shall commence on the earlier of (i) the Delivery Date (defined as (i) the later of January 20, 2020, or (ii) the date on which the landlord substantially completes its work in accordance with the terms of the lease), or (ii) the date the Company enters into possession of all or any substantial portion of 900 Winter Street for the conduct of its business (the “Commencement Date”). The initial lease term expires on the last day of the calendar month in which the fifteenth (15th) anniversary of the Commencement Date occurs, with an option to extend for an additional ten (10) years. 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 March 31, 2018, there were no potential material losses from claims, asserted or unasserted, or legal proceedings the Company determined were 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 Pharmaceuticals USA, Inc. (“Teva”), who filed an abbreviated new drug application (“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” of the Company’s Annual Report and specifically the section entitled “—We or our licensees may face claims against IP 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 (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 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 U.S. Court of Appeals for the Federal Circuit (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 Form 10-Q. 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 an appeal of the Delaware Court Decision with 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. The date for oral argument before the Federal Circuit has been set for June 7, 2018. The Company intends to vigorously enforce its IP rights. For information about risks relating to the AMPYRA Paragraph IV litigations and other proceedings see “Part I, Item 1A—Risk Factors” of the Company’s Annual Report and specifically the section entitled “—We or our licensees may face claims against IP rights covering our products and competition from generic drug manufacturers.” VIVITROL IPR Proceeding On April 20, 2018, Amneal Pharmaceuticals LLC filed an inter partes review (“IPR”) petition with the U.S. Patent and Trademark Office challenging U.S. Patent Number 7,919,499 (the “‘499 Patent”), which is an Orange Book-listed patent for VIVITROL. The Company will oppose the institution of this IPR petition, and, if instituted, vigorously defend the ‘499 Patent in the IPR proceedings. For information about risks relating to the ‘499 Patent IPR proceedings see “Part I, Item 1A—Risk Factors” in the Company’s Annual Report and specifically the sections entitled “Patent protection for our products is important and uncertain” and “Uncertainty over intellectual property in the biopharmaceutical industry has been the source of litigation, which is inherently costly and unpredictable.” 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 the Company’s 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)

3 Months Ended

Mar. 31, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

Principles of Consolidation

Use of Estimates

Segment Information

Income Taxes

New Accounting Pronouncements


	Topic 606 Adjustment
(In thousands)
Contract assets	$	9,110
Inventory		(8,209)
Deferred tax asset		109
Contract liabilities—short-term		(1,104)
Contract liabilities—long-term		(724)
Accumulated deficit		818
	$	—

- Definition

Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements.

+ References + Details

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2018

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of cumulative impact on balance sheet accounts


	Topic 606 Adjustment
(In thousands)
Contract assets	$	9,110
Inventory		(8,209)
Deferred tax asset		109
Contract liabilities—short-term		(1,104)
Contract liabilities—long-term		(724)
Accumulated deficit		818
	$	—

REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)

3 Months Ended

Mar. 31, 2018

Disaggregation of Revenue [Line Items]

Schedule of disaggregation of revenue


	Three Months Ended March 31, 2018
(In thousands)		Manufacturing Revenue		Royalty Revenue		Total
INVEGA SUSTENNA/XEPLION & INVEGA TRINZA/TREVICTA	$	—	$	46,086	$	46,086
AMPYRA/FAMPYRA		13,563		14,696		28,259
RISPERDAL CONSTA		17,792		4,912		22,704
BYDUREON		—		9,749		9,749
Other		6,236		1,567		7,803
	$	37,591	$	77,010	$	114,601

	Three Months Ended March 31, 2017
(In thousands)		Manufacturing Revenue		Royalty Revenue		Total
INVEGA SUSTENNA/XEPLION & INVEGA TRINZA/TREVICTA	$	—	$	39,182	$	39,182
AMPYRA/FAMPYRA		13,836		15,383		29,219
RISPERDAL CONSTA		15,640		5,181		20,821
BYDUREON		—		12,266		12,266
Other		9,376		3,815		13,191
	$	38,852	$	75,827	$	114,679

Schedule of contract assets


(In thousands)	Contract Assets
Contract assets at January 1, 2018	$	9,110
Additions		23,882
Transferred to receivables, net		(6,923)
Contract assets at March 31, 2018	$	26,069

Schedule of contract liabilities


(In thousands)	Contract Liabilities
Contract liabilities at January 1, 2018	$	9,442
Additions		909
Amounts recognized into revenue		(664)
Contract liabilities at March 31, 2018	$	9,687

Schedule of Adjusted balance sheet and statement of operations


	Topic 606 Adjustment
(In thousands)
Contract assets	$	9,110
Inventory		(8,209)
Deferred tax asset		109
Contract liabilities—short-term		(1,104)
Contract liabilities—long-term		(724)
Accumulated deficit		818
	$	—

Product sales, net

Disaggregation of Revenue [Line Items]

Schedule of disaggregation of revenue


	Three Months Ended March 31,
(In thousands)	2018		2017
VIVITROL	$	62,682	$	58,456
ARISTADA		29,160		18,000
Total product sales, net	$	91,842	$	76,456

ASU 2014-09

Disaggregation of Revenue [Line Items]

Schedule of Adjusted balance sheet and statement of operations

ADJUSTED CONDENSED CONSOLIDATED BALANCE SHEET


	March 31, 2018
	As Reported		Adjustment			Balances Without Adoption of Topic 606
	(In thousands)
ASSETS
Contract assets	$	26,069	$	(26,069)	(1)	$	—
Inventory		84,884		12,058	(2)		96,942
Deferred tax asset		100,504		1,148	(3)		101,652

LIABILITIES
Contract liabilities—short-term	$	3,521	$	(3,521)	(4)	$	—
Deferred revenue—short-term		—		2,532	(4)		2,532
Contract liabilities—long-term		6,166		(6,166)	(4)		—
Deferred revenue—long-term		—		5,505	(4)		5,505

SHAREHOLDERS' EQUITY
Accumulated deficit	$	(1,108,562)	$	(11,213)	(5)	$	(1,119,775)

The adjustments are a result of the following:


(1)	Adjustment to contract assets is to reverse revenue recognized over time under Topic 606.
(2)	Adjustment to inventory to add back the cost of goods manufactured related to the revenue transactions summarized in item (1), above.
(3)	Adjustment to deferred tax asset is to apply the tax impact of the revenue transactions summarized in item (1), above.
(4)	Adjustment to contract liabilities—short-term and contract liabilities—long-term to reclassify amounts previously classified as deferred revenue—short-term and deferred revenue—long-term under Topic 605.
(5)	Adjustment to accumulated deficit for the net impact of the transactions noted in items (1) through (4), above.

ADJUSTED CONDENSED CONSOLIDATED STATEMENTS

OF OPERATIONS AND COMPREHENSIVE LOSS


	Three Months Ended March 31, 2018
	As Reported		Adjustment			Balances Without Adoption of Topic 606
	(In thousands, except per share amounts)
REVENUES:
Manufacturing and royalty revenues	$	114,601	$	(16,959)	(1)	$	97,642
Product sales, net		91,842		—			91,842
Research and development revenue		18,707		(178)			18,529
Total revenues		225,150		(17,137)			208,013
EXPENSES:
Cost of goods manufactured and sold		44,476		(3,849)	(2)		40,627
Research and development		108,346		—			108,346
Selling, general and administrative		118,147		—			118,147
Amortization of acquired intangible assets		16,069		—			16,069
Total expenses		287,038		(3,849)			283,189
Operating loss		(61,888)		(13,288)			(75,176)
Other expense, net		(5,110)		—			(5,110)
Loss before income taxes		(66,998)		(13,288)			(80,286)
Income tax benefit		(4,493)		(1,257)			(5,750)
Net loss	$	(62,505)	$	(12,031)		$	(74,536)

Loss per ordinary share — basic and diluted	$	(0.40)	$	(0.08)		$	(0.48)

The adjustments are a result of the following:

(1)	Adjustment to manufacturing and royalty revenues to recognize revenue under Topic 605 in the three months ended March 31, 2018 that was recognized under Topic 606.
(2)	Adjustment to cost of goods manufactured and sold to recognize the cost from the transactions noted in item (1), above.

INVESTMENTS (Tables)

3 Months Ended

Mar. 31, 2018

INVESTMENTS

Schedule of investments


			Gross Unrealized
					Losses
	Amortized				Less than		Greater than		Estimated
March 31, 2018	Cost		Gains		One Year		One Year		Fair Value
Short-term investments:
Available-for-sale securities:
U.S. government and agency debt securities	$	125,234	$	—	$	(169)	$	(196)	$	124,869
Corporate debt securities		58,056		4		(4)		(170)		57,886
International government agency debt securities		35,376		—		(12)		(62)		35,302
Total short-term investments		218,666		4		(185)		(428)		218,057
Long-term investments:
Available-for-sale securities:
Corporate debt securities		71,477		—		(48)		(517)		70,912
U.S. government and agency debt securities		37,446		—		(78)		(290)		37,078
International government agency debt securities		25,935		—		—		(183)		25,752
		134,858		—		(126)		(990)		133,742
Held-to-maturity securities:
Fixed term deposit account		1,667		273		—		—		1,940
Certificates of deposit		1,791		—		—		—		1,791
		3,458		273		—		—		3,731
Total long-term investments		138,316		273		(126)		(990)		137,473
Total investments	$	356,982	$	277	$	(311)	$	(1,418)	$	355,530

December 31, 2017
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

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


	Three Months Ended March 31,
(In thousands)	2018		2017
Proceeds from the sales and maturities of marketable securities	$	79,500	$	55,000
Realized gains	$	1	$	9
Realized losses	$	4	$	3

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

The Company’s available-for-sale and held-to-maturity securities at March 31, 2018 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	$	215,560	$	214,949	$	1,791	$	1,791
After 1 year through 5 years		137,964		136,850		1,667		1,940
Total	$	353,524	$	351,799	$	3,458	$	3,731

FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2018

FAIR VALUE MEASUREMENTS

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


	March 31,
(In thousands)	2018		Level 1		Level 2		Level 3
Assets:
Cash equivalents	$	1,940	$	1,940	$	—	$	—
U.S. government and agency debt securities		161,947		101,982		59,965		—
Corporate debt securities		128,798		—		128,798		—
International government agency debt securities		61,054		—		61,054		—
Contingent consideration		82,900		—		—		82,900
Common stock warrants		1,697		—		—		1,697
Total	$	438,336	$	103,922	$	249,817	$	84,597


	December 31,
	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

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, 2018	$	86,195
Change in the fair value of contingent consideration		(1,900)
Increase in the fair value of warrants		302
Balance, March 31, 2018	$	84,597

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


Closing stock price at March 31, 2018	$	11.01
Warrant strike price	$	19.46
Expected term (years)		4.02
Risk-free rate		2.48	%
Volatility		75.0	%

INVENTORY (Tables)

3 Months Ended

Mar. 31, 2018

INVENTORY

Schedule of inventories


	March 31,		December 31,
(In thousands)	2018		2017
Raw materials	$	27,005	$	29,883
Work in process		36,895		38,964
Finished goods(1)		20,984		24,428
Total inventory	$	84,884	$	93,275

(1)	At March 31, 2018 and December 31, 2017, the Company had $15.9 million and $8.7 million, respectively, of finished goods inventory located at its third-party warehouse and shipping service provider.

PROPERTY, PLANT AND EQUIPMENT (Tables)

3 Months Ended

Mar. 31, 2018

PROPERTY, PLANT AND EQUIPMENT

Schedule of property, plant and equipment


	March 31,		December 31,
(In thousands)	2018		2017
Land	$	6,293	$	6,293
Building and improvements		155,858		155,198
Furniture, fixtures and equipment		294,249		289,455
Leasehold improvements		19,930		19,578
Construction in progress		62,689		54,270
Subtotal		539,019		524,794
Less: accumulated depreciation		(249,398)		(240,058)
Total property, plant and equipment, net	$	289,621	$	284,736

GOODWILL AND INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2018

GOODWILL AND INTANGIBLE ASSETS

Schedule of goodwill and intangible assets


		Three Months Ended
		March 31, 2018
(In thousands)	Weighted Amortizable Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Goodwill		$	92,873	$	—	$	92,873
Finite-lived intangible assets:
Collaboration agreements	12	$	465,590	$	(281,701)	$	183,889
NanoCrystal technology	13		74,600		(33,172)		41,428
OCR technologies	12		42,560		(27,778)		14,782
Total		$	582,750	$	(342,651)	$	240,099

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)

3 Months Ended

Mar. 31, 2018

ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Schedule of accounts payable and accrued expenses


	March 31,		December 31,
(In thousands)	2018		2017
Accounts payable	$	65,446	$	55,526
Accrued compensation		46,966		54,568
Accrued sales discounts, allowances and reserves		104,745		111,137
Accrued other		51,009		64,935
Total accounts payable and accrued expenses	$	268,166	$	286,166

LONG-TERM DEBT (Tables)

3 Months Ended

Mar. 31, 2018

LONG-TERM DEBT

Schedule of long-term debt


	March 31,		December 31,
(In thousands)	2018		2017
2023 Term Loans, due March 26, 2023	$	280,931	$	281,436
Less: current portion		(2,843)		(3,000)
Long-term debt	$	278,088	$	278,436

SHARE-BASED COMPENSATION (Tables)

3 Months Ended

Mar. 31, 2018

SHARE-BASED COMPENSATION

Schedule of share-based compensation expense


	Three Months Ended
	March 31,
(In thousands)	2018		2017
Cost of goods manufactured and sold	$	1,418	$	2,233
Research and development		6,714		5,594
Selling, general and administrative		11,910		13,342
Total share-based compensation expense	$	20,042	$	21,169

LOSS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2018

LOSS PER SHARE

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


	Three Months Ended
	March 31,
(In thousands)	2018		2017
Stock options		10,217		9,176
Restricted stock units		2,808		1,835
Total		13,025		11,011

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Mar. 31, 2018 segment
Segment Information
Number of business segments	1

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - New Accounting Pronouncements (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Jan. 02, 2018	Jan. 01, 2018	Dec. 31, 2017
ADJUSTED CONDENSED CONSOLIDATED BALANCE SHEET
Contract assets	$ 26,069	$ 9,110
Inventory	84,884			$ 93,275
Deferred tax asset	100,504			98,560
Contract liabilities—short-term	3,521			1,956
Contract liabilities-long-term	6,166			5,657
Accumulated deficit	(1,108,562)			$ (1,044,365)
ASU 2014-09 \| Adjustment
ADJUSTED CONDENSED CONSOLIDATED BALANCE SHEET
Contract assets	(26,069)	9,110
Inventory	12,058	(8,209)
Deferred tax asset	1,148	109
Contract liabilities—short-term	(3,521)	(1,104)
Contract liabilities-long-term	(6,166)	(724)
Accumulated deficit	$ (11,213)	$ 818
ASU 2016-16 \| Scenario, Adjustment [Member]
ADJUSTED CONDENSED CONSOLIDATED BALANCE SHEET
Accumulated deficit			$ 900

REVENUE FROM CONTRACTS WITH CUSTOMERS - Collaborative Arrangements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	$ 225,150	$ 191,778
Manufacturing Revenue
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	37,591	38,852
Royalty Revenue
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	77,010	75,827
Manufacturing and royalty revenues
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	$ 114,601	114,679
Manufacturing and royalty revenues \| Maximum
REVENUE FROM CONTRACTS WITH CUSTOMERS
Payment terms in number of days	90 days
Manufacturing and royalty revenues \| Minimum
REVENUE FROM CONTRACTS WITH CUSTOMERS
Payment terms in number of days	30 days
INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA \| Royalty Revenue
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	$ 46,086	39,182
INVEGA SUSTENNA/XEPLION and INVEGA TRINZA/TREVICTA \| Manufacturing and royalty revenues
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	46,086	39,182
AMPYRA/ FAMPYRA \| Manufacturing Revenue
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	13,563	13,836
AMPYRA/ FAMPYRA \| Royalty Revenue
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	14,696	15,383
AMPYRA/ FAMPYRA \| Manufacturing and royalty revenues
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	28,259	29,219
RISPERDAL CONSTA \| Manufacturing Revenue
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	17,792	15,640
RISPERDAL CONSTA \| Royalty Revenue
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	4,912	5,181
RISPERDAL CONSTA \| Manufacturing and royalty revenues
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	22,704	20,821
BYDUREON \| Royalty Revenue
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	9,749	12,266
BYDUREON \| Manufacturing and royalty revenues
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	9,749	12,266
Other \| Manufacturing Revenue
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	6,236	9,376
Other \| Royalty Revenue
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	1,567	3,815
Other \| Manufacturing and royalty revenues
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax	$ 7,803	$ 13,191

REVENUE FROM CONTRACTS WITH CUSTOMERS - Multiple Element Arrangements (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Nov. 30, 2017 USD ($) item	Mar. 31, 2018 USD ($)	Mar. 31, 2017 USD ($)
REVENUE FROM CONTRACTS WITH CUSTOMERS
up-front payment received	$ 28,000
Optional payment	50,000
Milestone payment entitled to be received upon the approval of NDA by the FDA	$ 150,000
Number of initial performance obligations \| item	4
Discount Rate (As a percent)	8.00%
Revenue from Contract with Customer, Excluding Assessed Tax		$ 225,150	$ 191,778
License revenue
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax		27,000
Research and Development Revenue
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax		900
Clinical Supply
REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from Contract with Customer, Excluding Assessed Tax		$ 100

REVENUE FROM CONTRACTS WITH CUSTOMERS - Product Sales, Net (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
REVENUE FROM CONTRACTS WITH CUSTOMERS
Total revenues	$ 225,150	$ 191,778
Allowance for doubtful accounts	200		$ 200
VIVITROL
REVENUE FROM CONTRACTS WITH CUSTOMERS
Total revenues	62,682	58,456
ARISTADA
REVENUE FROM CONTRACTS WITH CUSTOMERS
Total revenues	29,160	18,000
Product sales, net
REVENUE FROM CONTRACTS WITH CUSTOMERS
Total revenues	$ 91,842	$ 76,456

REVENUE FROM CONTRACTS WITH CUSTOMERS - CONTRACT ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2018
Disaggregation of Revenue [Line Items]
Contract assets at beginning of period	$ 9,110
Additions	23,882
Transferred to receivables, net	(6,923)
Contract assets at end of period	$ 26,069	$ 26,069
Minimum
Disaggregation of Revenue [Line Items]
Manufacturing Process period		10 days
Maximum
Disaggregation of Revenue [Line Items]
Manufacturing Process period		56 days

REVENUE FROM CONTRACTS WITH CUSTOMERS - CONTRACT LIABILITIES (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($)
REVENUE FROM CONTRACTS WITH CUSTOMERS
Contract liabilities at beginning of the period	$ 9,442
Additions	909
Amounts recognized into revenue	(664)
Contract liabilities at end of the period	$ 9,687

REVENUE FROM CONTRACTS WITH CUSTOMERS - ADJUSTED CONDENSED CONSOLIDATED BALANCE SHEET (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Jan. 02, 2018	Dec. 31, 2017
ADJUSTED CONDENSED CONSOLIDATED BALANCE SHEET
Contract assets	$ 26,069	$ 9,110
Inventory	84,884		$ 93,275
Deferred tax asset	100,504		98,560
Contract liabilities—short-term	3,521		1,956
Contract liabilities-long-term	6,166		5,657
Accumulated deficit	(1,108,562)		$ (1,044,365)
ASU 2014-09 \| Adjustment
ADJUSTED CONDENSED CONSOLIDATED BALANCE SHEET
Contract assets	(26,069)	9,110
Inventory	12,058	(8,209)
Deferred tax asset	1,148	109
Contract liabilities—short-term	(3,521)	(1,104)
Deferred revenue—short-term	2,532
Contract liabilities-long-term	(6,166)	(724)
Deferred revenue-long-term	5,505
Accumulated deficit	(11,213)	$ 818
ASU 2014-09 \| Balances Without Adoption of Topic 606
ADJUSTED CONDENSED CONSOLIDATED BALANCE SHEET
Inventory	96,942
Deferred tax asset	101,652
Deferred revenue—short-term	2,532
Deferred revenue-long-term	5,505
Accumulated deficit	$ (1,119,775)

REVENUE FROM CONTRACTS WITH CUSTOMERS - ADJUSTED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Changes to revenues (expenses):
Total revenues	$ 225,150	$ 191,778
Cost of goods manufactured and sold	44,476
Research and development	108,346	104,835
Selling, general and administrative	118,147	102,099
Amortization of acquired intangible assets	16,069	15,302
Total expenses	287,038	262,648
OPERATING LOSS	(61,888)	(70,870)
Total other expense, net	(5,110)	(1,720)
LOSS BEFORE INCOME TAXES	(66,998)	(72,590)
Income tax benefit	(4,493)	(3,709)
NET LOSS	$ (62,505)	$ (68,881)
Loss per ordinary share — basic and diluted: (in dollars per share)	$ (0.40)	$ (0.45)
Manufacturing and royalty revenues
Changes to revenues (expenses):
Total revenues	$ 114,601	$ 114,679
Cost of goods manufactured and sold	44,476	40,412
Product sales, net
Changes to revenues (expenses):
Total revenues	91,842	76,456
Research and development revenue
Changes to revenues (expenses):
Total revenues	18,707	$ 643
ASU 2014-09 \| Adjustment
Changes to revenues (expenses):
Total revenues	(17,137)
Cost of goods manufactured and sold	(3,849)
Total expenses	(3,849)
OPERATING LOSS	(13,288)
LOSS BEFORE INCOME TAXES	(13,288)
Income tax benefit	(1,257)
NET LOSS	$ (12,031)
Loss per ordinary share — basic and diluted: (in dollars per share)	$ (0.08)
ASU 2014-09 \| Balances Without Adoption of Topic 606
Changes to revenues (expenses):
Total revenues	$ 208,013
Cost of goods manufactured and sold	40,627
Research and development	108,346
Selling, general and administrative	118,147
Amortization of acquired intangible assets	16,069
Total expenses	283,189
OPERATING LOSS	(75,176)
Total other expense, net	(5,110)
LOSS BEFORE INCOME TAXES	(80,286)
Income tax benefit	(5,750)
NET LOSS	$ (74,536)
Loss per ordinary share — basic and diluted: (in dollars per share)	$ (0.48)
ASU 2014-09 \| Manufacturing and royalty revenues \| Adjustment
Changes to revenues (expenses):
Total revenues	$ (16,959)
ASU 2014-09 \| Manufacturing and royalty revenues \| Balances Without Adoption of Topic 606
Changes to revenues (expenses):
Total revenues	97,642
ASU 2014-09 \| Product sales, net \| Balances Without Adoption of Topic 606
Changes to revenues (expenses):
Total revenues	91,842
ASU 2014-09 \| Research and development revenue \| Adjustment
Changes to revenues (expenses):
Total revenues	(178)
ASU 2014-09 \| Research and development revenue \| Balances Without Adoption of Topic 606
Changes to revenues (expenses):
Total revenues	$ 18,529

INVESTMENTS - SUMMARY OF INVESTMENTS (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Available-for-sale securities:
Amortized Cost	$ 353,524
Held-to-maturity securities:
Estimated Fair Value	3,731
Total investments
Amortized Cost	356,982	$ 400,486
Gross Unrealized Gains	277	227
Gross Unrealized Losses, Less than One Year	(311)	(920)
Gross Unrealized Losses, Greater than One Year	(1,418)	(373)
Estimated Fair Value	355,530	399,420
Short-term investments
Available-for-sale securities:
Amortized Cost	218,666	242,703
Gross Unrealized Gains	4	5
Gross Unrealized Losses, Less than One Year	(185)	(232)
Gross Unrealized Losses, Greater than One Year	(428)	(268)
Estimated Fair Value	218,057	242,208
Short-term investments \| U.S. government and agency debt securities
Available-for-sale securities:
Amortized Cost	125,234	150,673
Gross Unrealized Gains		1
Gross Unrealized Losses, Less than One Year	(169)	(130)
Gross Unrealized Losses, Greater than One Year	(196)	(233)
Estimated Fair Value	124,869	150,311
Short-term investments \| Corporate debt securities
Available-for-sale securities:
Amortized Cost	58,056	56,552
Gross Unrealized Gains	4	3
Gross Unrealized Losses, Less than One Year	(4)	(48)
Gross Unrealized Losses, Greater than One Year	(170)	(10)
Estimated Fair Value	57,886	56,497
Short-term investments \| International government agency debt securities
Available-for-sale securities:
Amortized Cost	35,376	35,478
Gross Unrealized Gains		1
Gross Unrealized Losses, Less than One Year	(12)	(54)
Gross Unrealized Losses, Greater than One Year	(62)	(25)
Estimated Fair Value	35,302	35,400
Long-term investments
Available-for-sale securities:
Amortized Cost	134,858	154,325
Gross Unrealized Losses, Less than One Year	(126)	(688)
Gross Unrealized Losses, Greater than One Year	(990)	(105)
Estimated Fair Value	133,742	153,532
Held-to-maturity securities:
Amortized Cost	3,458	3,458
Gross Unrealized Gains	273	222
Estimated Fair Value	3,731	3,680
Long-term Investments
Total long-term investments	138,316	157,783
Gross Unrealized Gains	273	222
Gross Unrealized Losses, Less than one year	(126)	(688)
Gross Unrealized Losses, Greater than one year	(990)	(105)
Total long-term investments	137,473	157,212
Long-term investments \| U.S. government and agency debt securities
Available-for-sale securities:
Amortized Cost	37,446	48,948
Gross Unrealized Losses, Less than One Year	(78)	(270)
Gross Unrealized Losses, Greater than One Year	(290)	(71)
Estimated Fair Value	37,078	48,607
Long-term investments \| Corporate debt securities
Available-for-sale securities:
Amortized Cost	71,477	83,924
Gross Unrealized Losses, Less than One Year	(48)	(300)
Gross Unrealized Losses, Greater than One Year	(517)	(34)
Estimated Fair Value	70,912	83,590
Long-term investments \| International government agency debt securities
Available-for-sale securities:
Amortized Cost	25,935	21,453
Gross Unrealized Losses, Less than One Year		(118)
Gross Unrealized Losses, Greater than One Year	(183)
Estimated Fair Value	25,752	21,335
Long-term investments \| Fixed Term Deposit Account
Held-to-maturity securities:
Amortized Cost	1,667	1,667
Gross Unrealized Gains	273	222
Estimated Fair Value	1,940	1,889
Long-term investments \| Certificates of deposit
Held-to-maturity securities:
Amortized Cost	1,791	1,791
Estimated Fair Value	$ 1,791	$ 1,791

INVESTMENTS - REALIZED GAINS AND LOSSES (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
INVESTMENTS
Proceeds from the sales and maturities of marketable securities	$ 79,500	$ 55,000
Realized gains	1	9
Realized losses	$ 4	$ 3

INVESTMENTS - AVAILABLE FOR SALE AND HELD TO MATURITY (Details) $ in Thousands	Mar. 31, 2018 USD ($)
Available-for-sale, Amortized Cost
Within 1 year	$ 215,560
After 1 year through 5 years	137,964
Amortized Cost	353,524
Available-for-sale, Estimated Fair Value
Within 1 year	214,949
After 1 year through 5 years	136,850
Total	351,799
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	1,940
Estimated Fair Value	$ 3,731

INVESTMENTS - Narratives (Details) - Fountain Healthcare Partners II, LP of Ireland € in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2018 USD ($)	Mar. 31, 2018 EUR (€)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	May 31, 2014 EUR (€)
Equity method investment
Funding commitment as percentage of partnership's total funding		7.00%	7.00%
Increase (decrease) in carrying value of investment of the entity, which represents the Company's share of investee's net gains (losses)	$ (0.6)
Maximum
Equity method investment
Maximum commitment on equity method investment \| €					€ 7.4
Increase (decrease) in carrying value of investment of the entity, which represents the Company's share of investee's net gains (losses)	$ (0.1)
Other Assets
Equity method investment
Total equity method commitment \| €		€ 4.2
Carrying value of equity investment			$ 4.0	$ 3.7

FAIR VALUE MEASUREMENTS (Details) - Recurring basis - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Fair value
Estimated Fair Value	$ 438,336	$ 483,824
Assets, Total	438,336	483,824
Level 1
Fair value
Estimated Fair Value	103,922	126,847
Assets, Total	103,922	126,847
Level 2
Fair value
Estimated Fair Value	249,817	270,782
Assets, Total	249,817	270,782
Level 3
Fair value
Estimated Fair Value	84,597	86,195
Assets, Total	84,597	86,195
Cash equivalents
Fair value
Estimated Fair Value	1,940	1,889
Assets, Total	1,940	1,889
Cash equivalents \| Level 1
Fair value
Estimated Fair Value	1,940	1,889
Assets, Total	1,940	1,889
U.S. government and agency debt securities
Fair value
Estimated Fair Value	161,947	198,918
Assets, Total	161,947	198,918
U.S. government and agency debt securities \| Level 1
Fair value
Estimated Fair Value	101,982	124,958
Assets, Total	101,982	124,958
U.S. government and agency debt securities \| Level 2
Fair value
Estimated Fair Value	59,965	73,960
Assets, Total	59,965	73,960
Corporate debt securities
Fair value
Estimated Fair Value	128,798	140,087
Assets, Total	128,798	140,087
Corporate debt securities \| Level 2
Fair value
Estimated Fair Value	128,798	140,087
Assets, Total	128,798	140,087
International government agency debt securities
Fair value
Estimated Fair Value	61,054	56,735
Assets, Total	61,054	56,735
International government agency debt securities \| Level 2
Fair value
Estimated Fair Value	61,054	56,735
Assets, Total	61,054	56,735
Contingent consideration
Fair value
Estimated Fair Value	82,900	84,800
Assets, Total	82,900	84,800
Contingent consideration \| Level 3
Fair value
Estimated Fair Value	82,900	84,800
Assets, Total	82,900	84,800
Common stock warrants
Fair value
Estimated Fair Value	1,697	1,395
Assets, Total	1,697	1,395
Common stock warrants \| Level 3
Fair value
Estimated Fair Value	1,697	1,395
Assets, Total	$ 1,697	$ 1,395

FAIR VALUE MEASUREMENTS - ROLLFORWARD OF FAIR VALUE OF ASSETS (Details)	3 Months Ended
	Mar. 31, 2018 USD ($)
Roll forward of the fair value of the Company's investments whose fair value was determined using Level 3 inputs
Transfers between the levels	$ 0
Balance at the beginning of the period	86,195,000
Balance at the end of the period	84,597,000
Change 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 (change) in the fair value of contingent consideration	(1,900,000)
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 (change) in the fair value of contingent consideration	$ 302,000

FAIR VALUE MEASUREMENTS - Narratives (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Jun. 30, 2018	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Apr. 10, 2015	Apr. 09, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Discount rate (as a percent)		16.00%
Contingent consideration		$ 82,900		$ 84,800
OTHER ASSETS		16,950		14,034
Increase/(Decrease) in the fair value of contingent consideration		(1,900)	$ 1,600
Other Assets
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Decrease (increase) in fair value of warrants		$ (300)	(200)
Minimum
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Discount rate (as a percent)		3.90%
Maximum
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Discount rate (as a percent)		6.00%
Gainesville Transaction
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Contingent consideration		$ 82,900		$ 84,800
Increase/(Decrease) in the fair value of contingent consideration		(1,900)	$ 1,600
Gainesville Transaction \| Forecast
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Milestone payment upon regulatory approval of NDA	$ 45,000
Discount rate (as a percent)	3.70%
Gainesville Transaction \| Maximum
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Milestone payment receivable		$ 80,000
Gainesville Transaction \| Disposal Group, Disposed of by Sale, Not Discontinued Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Warrants received					350,000
Recro \| Gainesville Transaction
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Closing stock price at March 31, 2018		$ 11.01
Warrant strike price		$ 19.46				$ 19.46
Expected term (years)		4 years 7 days
Risk-free rate (as a percent)		2.48%
Volatility (as a percent)		75.00%

INVENTORY (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
INVENTORY
Raw materials	$ 27,005	$ 29,883
Work in process	36,895	38,964
Finished goods	20,984	24,428
Total inventory	84,884	93,275
Finished goods inventory located at third-party warehouse and shipping service provider	$ 15,900	$ 8,700

PROPERTY, PLANT AND EQUIPMENT (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Property, plant and equipment
Subtotal	$ 539,019	$ 524,794
Less: accumulated depreciation	(249,398)	(240,058)
Total property, plant and equipment, net	289,621	284,736
Land
Property, plant and equipment
Subtotal	6,293	6,293
Buildings and improvements
Property, plant and equipment
Subtotal	155,858	155,198
Furniture, fixtures and equipment
Property, plant and equipment
Subtotal	294,249	289,455
Leasehold improvements
Property, plant and equipment
Subtotal	19,930	19,578
Construction in progress
Property, plant and equipment
Subtotal	$ 62,689	$ 54,270

GOODWILL AND INTANGIBLE ASSETS - INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Goodwill
Gross Carrying Amount	$ 92,873
Goodwill	92,873	$ 92,873
Finite-lived intangible assets:
Gross Carrying Amount	582,750
Accumulated Amortization	(342,651)
Net Carrying Amount	$ 240,099
Collaboration agreements
Finite-lived intangible assets:
Weighted Amortizable Life	12 years
Gross Carrying Amount	$ 465,590
Accumulated Amortization	(281,701)
Net Carrying Amount	$ 183,889
NanoCrystal technology
Finite-lived intangible assets:
Weighted Amortizable Life	13 years
Gross Carrying Amount	$ 74,600
Accumulated Amortization	(33,172)
Net Carrying Amount	$ 41,428
OCR technologies
Finite-lived intangible assets:
Weighted Amortizable Life	12 years
Gross Carrying Amount	$ 42,560
Accumulated Amortization	(27,778)
Net Carrying Amount	$ 14,782

GOODWILL AND INTANGIBLE ASSETS - AMORTIZATION (Details) $ in Millions	Mar. 31, 2018 USD ($)
Expected amortization of intangible assets
2018	$ 65.0
2019	55.0
2020	50.0
2021	40.0
2022	$ 35.0

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable	$ 65,446	$ 55,526
Accrued compensation	46,966	54,568
Accrued sales discounts, allowances and reserves	104,745	111,137
Accrued other	51,009	64,935
Total accounts payable and accrued expenses	$ 268,166	$ 286,166

LONG-TERM DEBT (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Long-term debt
Less: current portion	$ (2,843)	$ (3,000)
Long-term debt	278,088	278,436
2023 Term Loan
Long-term debt
2023 Term Loan, due March 26, 2023	$ 280,931	$ 281,436

LONG-TERM DEBT - Narratives (Details) $ in Thousands	1 Months Ended	2 Months Ended	3 Months Ended
LONG-TERM DEBT - Narratives (Details) $ in Thousands	Mar. 31, 2018 USD ($)	Feb. 28, 2018	Mar. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($)
Long-term debt
Number of lender holding percentage of outstanding amount \| item			1
Percentage of outstanding principal amount held by lender			1.00%
Minimum
Long-term debt
Threshold percentage comparing present value of remaining cash flows			10.00%
Interest Expense
Long-term debt
Refinancing charges			$ 2,300
Term Loan B-1
Long-term debt
Variable interest rate base		LIBOR
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%
2023 Term Loan
Long-term debt
Variable interest rate base	LIBOR
Carrying Value	$ 280,931		$ 280,931	$ 281,436
2023 Term Loan \| LIBOR
Long-term debt
Debt Instrument, Basis Spread on Variable Rate	2.25%
Debt Instrument, Variable Rate Basis Floor	0.00%

RESTRUCTURING (Details) $ in Millions	3 Months Ended
RESTRUCTURING (Details) $ in Millions	Mar. 31, 2018 USD ($) employee
Athlone, Ireland manufacturing facility
Restructuring activity
Number of employees eliminated \| employee	24
Severance and outplacement services \| Cost of goods manufactured and sold
Restructuring activity
Restructuring charge	$ 3.2
Severance and outplacement services \| Research and development
Restructuring activity
Restructuring charge	$ 0.4

SHARE-BASED COMPENSATION (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
SHARE-BASED COMPENSATION (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Share-based compensation Expense
Total share-based compensation expense	$ 20,042	$ 21,169
Cost of goods manufactured and sold
Share-based compensation Expense
Total share-based compensation expense	1,418	2,233
Research and development
Share-based compensation Expense
Total share-based compensation expense	6,714	5,594
Selling, general and administrative
Share-based compensation Expense
Total share-based compensation expense	11,910	$ 13,342
Inventory
Share-based compensation Expense
Share based compensation cost capitalized	500		$ 400
Performance-based RSUs
Share-based compensation Expense
Unrecognized compensation cost	$ 58,000

LOSS PER SHARE (Details) - shares shares in Thousands	3 Months Ended
LOSS PER SHARE (Details) - shares shares in Thousands	Mar. 31, 2018	Mar. 31, 2017
Denominator:
Anti-dilutive potential common equivalent shares excluded from calculation of net loss per ordinary share	13,025	11,011
Stock options
Denominator:
Anti-dilutive potential common equivalent shares excluded from calculation of net loss per ordinary share	10,217	9,176
Restricted stock units
Denominator:
Anti-dilutive potential common equivalent shares excluded from calculation of net loss per ordinary share	2,808	1,835

COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	3 Months Ended
COMMITMENTS AND CONTINGENCIES (Details) $ in Millions	Mar. 31, 2018 USD ($) ft² item
COMMITMENTS AND CONTINGENCIES
Area of Real Estate Property \| ft²	220,000
Provisions for extension of lease term	10 years
Potential losses from claims, legal proceedings probable of occurring \| $	$ 0.0
Number of separate Paragraph IV notices received \| item	10
Maximum number of days for lawsuit	45 days
Minimum number of months before FDA can approve patent request	30 months