View Filing Data

Document And Entity Information - USD ($) $ in Millions	12 Months Ended
Document And Entity Information - USD ($) $ in Millions	Dec. 31, 2018	Feb. 20, 2019	Jun. 30, 2018
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Entity Registrant Name	ANI PHARMACEUTICALS INC
Entity Central Index Key	0001023024
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 609.3
Trading Symbol	ANIP
Entity Shell Company	false
Entity Emerging Growth Company	false
Entity Small Business	false
Class C Special Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		10,864
Common Stock [Member]
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		11,851,329

Consolidated Balance Sheets - USD ($)

Dec. 31, 2018

Dec. 31, 2017

Current Assets

Cash and cash equivalents

$ 43,008,000

$ 31,144,000

Accounts receivable, net of $47,705 and $34,686 of adjustments for chargebacks and other allowances at December 31, 2018 and 2017, respectively

64,842,000

58,788,000

Inventories, net

40,503,000

^[1]

37,727,000

Prepaid income taxes, net

1,162,000

Prepaid expenses and other current assets

4,524,000

2,784,000

Total Current Assets

152,877,000

131,605,000

Property and equipment, net

38,090,000

20,403,000

Restricted cash

5,021,000

5,006,000

Deferred tax assets, net of deferred tax liabilities and valuation allowance

27,964,000

22,667,000

Intangible assets, net

201,604,000

229,790,000

Goodwill

3,580,000

1,838,000

Other long-term assets

1,468,000

829,000

Total Assets

430,604,000

412,138,000

Current Liabilities

Current component of long-term borrowing, net of deferred financing costs

3,256,000

3,353,000

Convertible notes, net of discount and deferred financing costs

112,463,000

Accounts payable

8,884,000

3,630,000

Accrued expenses and other

1,707,000

1,571,000

Accrued royalties

8,456,000

12,164,000

Accrued compensation and related expenses

3,524,000

2,306,000

Current income taxes payable, net

5,022,000

Accrued government rebates

8,974,000

7,930,000

Returned goods reserve

12,552,000

8,274,000

Deferred revenue

711,000

Total Current Liabilities

165,549,000

39,228,000

Long-term Liabilities

Long-term borrowing, net of deferred financing costs and current borrowing component

67,296,000

69,946,000

Convertible notes, net of discount and deferred financing costs

128,208,000

Other long-term liabilities

496,000

Total Liabilities

233,341,000

237,382,000

Commitments and Contingencies (Note 12)

Stockholders' Equity

Common Stock, $0.0001 par value, 33,333,334 shares authorized; 11,862,508 shares issued and 11,851,329 outstanding at December 31, 2018; 11,655,768 shares issued and 11,650,565 shares outstanding at December 31, 2017

1,000

Class C Special Stock, $0.0001 par value, 781,281 shares authorized; 10,864 shares issued and outstanding at December 31, 2018 and 2017, respectively

Preferred Stock, $0.0001 par value, 1,666,667 shares authorized; 0 shares issued and outstanding at December 31, 2018 and 2017, respectively

Treasury stock, 11,179 shares of common stock, at cost, at December 31, 2018 and 5,203 shares of common stock, at cost, at December 31, 2017

(659,000)

(259,000)

Additional paid-in capital

186,812,000

179,020,000

Retained earnings/(accumulated deficit)

11,488,000

(4,006,000)

Accumulated other comprehensive loss, net of tax

(379,000)

Total Stockholders' Equity

197,263,000

174,756,000

Total Liabilities and Stockholders' Equity

$ 430,604,000

$ 412,138,000

[1]	Includes inventory acquired in acquisition of WellSpring (Note 2).

Consolidated Balance Sheets [Parenthetical] - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Adjustments for chargebacks and other allowances	$ 47,705	$ 34,686
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0.0001	$ 0.0001
Preferred Stock, Shares Authorized	1,666,667	1,666,667
Preferred Stock, Shares Issued	0	0
Preferred Stock, Shares Outstanding	0	0
Treasury Stock, Common, Shares	11,179	5,203
Common Stock [Member]
Common Stock, Par Value (in dollars per share)	$ 0.0001	$ 0.0001
Common Stock, Authorized Shares	33,333,334	33,333,334
Common Stock, Issued Shares	11,862,508	11,655,768
Common Stock, Outstanding Shares	11,851,329	11,650,565
Class C Special Stock [Member]
Common Stock, Par Value (in dollars per share)	$ 0.0001	$ 0.0001
Common Stock, Authorized Shares	781,281	781,281
Common Stock, Issued Shares	10,864	10,864
Common Stock, Outstanding Shares	10,864	10,864

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Net Revenues	$ 201,576	$ 176,842	$ 128,622
Operating Expenses
Cost of sales (excluding depreciation and amortization)	73,024	79,032	48,780
Research and development	15,388	9,070	2,906
Selling, general, and administrative	44,063	31,580	27,829
Depreciation and amortization	33,742	27,928	22,343
Intangible asset impairment charge	0	903	6,685
Total Operating Expenses	166,217	148,513	108,543
Operating Income	35,359	28,329	20,079
Other Expense, net
Interest expense, net	(14,758)	(12,035)	(11,327)
Other (expense)/income, net	(550)	55	(74)
Income Before Provision for Income Taxes	20,051	16,349	8,678
Provision for income taxes	(4,557)	(17,425)	(4,744)
Net Income/(Loss)	$ 15,494	$ (1,076)	$ 3,934
Basic and Diluted Earnings/(Loss) Per Share:
Basic Earnings/(Loss) Per Share (in dollars per share)	$ 1.31	$ (0.09)	$ 0.34
Diluted Earnings/(Loss) Per Share (in dollars per share)	$ 1.30	$ (0.09)	$ 0.34
Basic Weighted-Average Shares Outstanding (in shares)	11,677	11,547	11,445
Diluted Weighted-Average Shares Outstanding (in shares)	11,772	11,547	11,573

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Net income/(loss)	$ 15,494	$ (1,076)	$ 3,934
Other comprehensive income/(loss), net of tax:
Change in fair value of interest rate swap, net of tax	(379)	0	0
Total other comprehensive loss, net of tax	(379)	0	0
Total comprehensive income/(loss), net of tax	$ 15,115	$ (1,076)	$ 3,934

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Consolidated Statements of Changes in Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Scenario, Previously Reported [Member]	Common Stock [Member]	Common Stock [Member] Scenario, Previously Reported [Member]	Class C Special Stock [Member]	Class C Special Stock [Member] Scenario, Previously Reported [Member]	Additional Paid-in Capital [Member]	Additional Paid-in Capital [Member] Scenario, Previously Reported [Member]	Treasury Stock [Member]	Treasury Stock [Member] Scenario, Previously Reported [Member]	Accumulated Other Comprehensive Loss, Net of Tax [Member]	Accumulated Other Comprehensive Loss, Net of Tax [Member] Scenario, Previously Reported [Member]	(Accumulated Deficit)/Retained Earnings [Member]	(Accumulated Deficit)/Retained Earnings [Member] Scenario, Previously Reported [Member]
Balance at Dec. 31, 2015	$ 160,082		$ 1		$ 0		$ 164,431		$ 0		$ 0		$ (4,350)
Balance (in shares) at Dec. 31, 2015			11,498						0	0
Stock-based Compensation Expense	6,067		$ 0		0		6,067		$ 0		0		0
Treasury Stock purchases for restricted stock vestings	(122)		0		0		0		$ (122)		0		0
Treasury Stock purchases for restricted stock vestings (in shares)									10
Issuance of Common Shares upon Stock Option and ESPP Exercise	1,570		$ 0		0		1,448		$ 122		0		0
Issuance of Common Shares upon Stock Option and ESPP Exercise (in shares)			119						(10)
Repurchase of Common Stock under Stock Repurchase Program	(2,500)		$ 0		0		0		$ 0		0		(2,500)
Repurchase of Common Stock under Stock Repurchase Program (in shares)			(65)
Issuance of Restricted Stock Awards	0		$ 0		0		0		0		0		0
Issuance of Restricted Stock Awards (in shares)			37
Excess Tax Benefit from Share-based Compensation Awards	617		$ 0		0		617		0		0		0
Change in fair value of interest rate swap, net of tax	0
Net (Loss) Income	3,934		0		0		0		0		0		3,934
Balance at Dec. 31, 2016	169,648	$ 169,648	$ 1	$ 1	0	$ 0	172,577	$ 172,563	$ 0	$ 0	0	$ 0	(2,930)	$ (2,916)
Balance (in shares) at Dec. 31, 2016			11,589	11,589					0
Stock Option Forfeiture Cumulative-effect Adjustment	0		$ 0		0		14		$ 0		0		(14)
Stock-based Compensation Expense	6,090		0		0		6,090		0		0		0
Treasury Stock purchases for restricted stock vestings	(259)		0		0		0		$ (259)		0		0
Treasury Stock purchases for restricted stock vestings (in shares)									5
Issuance of Common Shares upon Stock Option and ESPP Exercise	353		$ 0		0		353		$ 0		0		0
Issuance of Common Shares upon Stock Option and ESPP Exercise (in shares)			17
Repurchase of Common Stock under Stock Repurchase Program			$ 0
Issuance of Restricted Stock Awards	0		$ 0		0		0		0		0		0
Issuance of Restricted Stock Awards (in shares)			50
Change in fair value of interest rate swap, net of tax	0
Net (Loss) Income	(1,076)		$ 0		0		0		0		0		(1,076)
Balance at Dec. 31, 2017	174,756		$ 1		0		179,020		$ (259)		0		(4,006)
Balance (in shares) at Dec. 31, 2017			11,656						5
Stock-based Compensation Expense	6,782		$ 0		0		6,782		$ 0		0		0
Treasury Stock purchases for restricted stock vestings	(659)		0		0		0		$ (659)		0		0
Treasury Stock purchases for restricted stock vestings (in shares)									11
Issuance of Common Shares upon Stock Option and ESPP Exercise	2,978		$ 0		0		2,719		$ 259		0		0
Issuance of Common Shares upon Stock Option and ESPP Exercise (in shares)			142						(5)
Repurchase of Common Stock under Stock Repurchase Program			$ 0
Issuance of Restricted Stock Awards	0		$ 0		0		0		$ 0		0		0
Issuance of Restricted Stock Awards (in shares)			65
Change in fair value of interest rate swap, net of tax	(379)		$ 0		0		0		0		(379)		0
Repurchase of Convertible notes and unwind of call option overlay	(1,709)		0		0		(1,709)		0		0		0
Net (Loss) Income	15,494		0		0		0		0		0		15,494
Balance at Dec. 31, 2018	$ 197,263		$ 1		$ 0		$ 186,812		$ (659)		$ (379)		$ 11,488
Balance (in shares) at Dec. 31, 2018			11,863						11

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash Flows From Operating Activities
Net income/(loss)	$ 15,494	$ (1,076)	$ 3,934
Adjustments to reconcile net income/(loss) to net cash and cash equivalents provided by operating activities:
Stock-based compensation	6,782	6,090	6,067
Deferred taxes	(5,180)	3,560	(8,911)
Depreciation and amortization	33,742	27,928	22,343
Acquired in-process research and development ("IPR&D")	1,335	0	0
Non-cash interest relating to convertible notes and loan cost amortization	8,465	7,666	7,281
Loss on repurchase of Convertible notes	468	0	0
Intangible asset impairment charge	0	903	6,685
Changes in operating assets and liabilities:
Accounts receivable, net	(4,743)	(12,893)	(23,963)
Inventories, net	(379)	5,356	(1,938)
Prepaid expenses and other current assets	(1,142)	(17)	(647)
Accounts payable	3,466	3	1,076
Accrued royalties	(3,708)	(417)	6,269
Current income taxes, net	6,184	(3,560)	3,525
Accrued government rebates	1,044	2,039	1,260
Returned goods reserve	4,278	2,518	3,108
Accrued expenses, accrued compensation, and other	968	1,319	1,383
Net Cash and Cash Equivalents Provided by Operating Activities	67,074	39,419	27,472
Cash Flows From Investing Activities
Acquisiton of WellSpring Pharma Services Inc., net of cash acquired	(16,467)	0	0
Acquisition of product rights, IPR&D, and other related assets	(5,169)	(97,624)	(144,494)
Acquisition of property and equipment, net	(5,743)	(10,369)	(4,566)
Net Cash and Cash Equivalents Used in Investing Activities	(27,379)	(107,993)	(149,060)
Cash Flows From Financing Activities
Payment of debt issuance and convertible debt repurchase costs	(1,572)	(2,737)	(294)
Payments on term loan agreement	(2,813)	0	0
Borrowings under term loan agreement	0	75,000	0
Proceeds from stock option exercises	2,978	353	1,570
Excess tax benefit from share-based compensation awards	0	0	617
Repurchase of common stock under the stock repurchase program	0	0	(2,500)
Repurchase of Convertible notes	(26,125)	0	0
Unwinding of portion of call option overlay, net	375	0	0
Treasury stock purchases for restricted stock vestings	(659)	(259)	(122)
Net Cash and Cash Equivalents (Used in)/Provided by Financing Activities	(27,816)	72,357	(729)
Net Change in Cash and Cash Equivalents	11,879	3,783	(122,317)
Cash, cash equivalents, and restricted cash, beginning of period	36,150	32,367	154,684
Cash, cash equivalents, and restricted cash, end of period	48,029	36,150	32,367
Reconciliation of cash, cash equivalents, and restricted cash, beginning of period
Cash and cash equivalents	31,144	27,365	154,684
Restricted cash	5,006	5,002	0
Cash, cash equivalents, and restricted cash, beginning of period	36,150	32,367	154,684
Reconciliation of cash, cash equivalents, and restricted cash, end of period
Cash and cash equivalents	43,008	31,144	27,365
Restricted cash	5,021	5,006	5,002
Cash, cash equivalents, and restricted cash, end of period	48,029	36,150	32,367
Supplemental disclosure for cash flow information:
Cash paid for interest, net of amounts capitalized	6,285	3,759	4,078
Cash paid for income taxes	6,397	17,786	9,537
Supplemental non-cash investing and financing activities:
Accrued royalties related to asset purchase	0	0	3,882
Property and equipment purchased and included in accounts payable	$ 521	$ 485	$ 247

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

ANI Pharmaceuticals, Inc. and its consolidated subsidiaries, ANIP Acquisition Company and ANI Pharmaceuticals Canada Inc. (together, “ANI,” the “Company,” “we,” “us,” or “our”) is an integrated specialty pharmaceutical company focused on delivering value to our customers by developing, manufacturing, and marketing high quality branded and generic prescription pharmaceuticals. ANI was organized as a Delaware corporation in April 2001. At our three facilities, of which two are located in Baudette, Minnesota and one is located in Oakville, Ontario, we manufacture oral solid dose products, as well as semi-solids, liquids and topicals, controlled substances, and potent products that must be manufactured in a fully-contained environment. We also perform contract manufacturing for other pharmaceutical companies.

On June 19, 2013, BioSante Pharmaceuticals, Inc. (“BioSante”) acquired ANIP Acquisition Company (“ANIP”) in an all-stock, tax-free reorganization (the “Merger”), in which ANIP became a wholly-owned subsidiary of BioSante. BioSante was renamed ANI Pharmaceuticals, Inc. The Merger was accounted for as a reverse acquisition pursuant to which ANIP was considered the acquiring entity for accounting purposes.

On August 6, 2018, our subsidiary, ANI Pharmaceuticals Canada Inc. (“ANI Canada”), acquired all the issued and outstanding equity interests of WellSpring Pharma Services Inc. (“WellSpring”), a Canadian company that performs contract development and manufacturing of pharmaceutical products for a purchase price of $18.0 million, subject to certain customary adjustments. Pursuant to these customary adjustments, the total purchase consideration was $16.7 million. The consideration was paid entirely from cash on hand. In conjunction with the transaction, we acquired WellSpring’s pharmaceutical manufacturing facility, laboratory, and offices, its current book of commercial business, as well as an organized workforce. Following the consummation of the transaction, WellSpring was merged into ANI Canada with the resulting entity’s name being ANI Pharmaceuticals Canada Inc.

Our operations are subject to certain risks and uncertainties including, among others, current and potential competitors with greater resources, dependence on significant customers, and possible fluctuations in financial results. The accompanying consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the ordinary course of business. The propriety of using the going-concern basis is dependent upon, among other things, the achievement of future profitable operations, the ability to generate sufficient cash from operations, and potential other funding sources, including cash on hand, to meet our obligations as they become due. We believe the going-concern basis is appropriate for the accompanying consolidated financial statements based on our current operating plan and business strategy for the 12 months following the issuance of this report.

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain prior period information has been reclassified to conform to the current period presentation.

Principles of Consolidation

The consolidated financial statements include the accounts of ANI Pharmaceuticals, Inc. and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.

Foreign Currency

We have a subsidiary located in Canada. The subsidiary conducts its transactions in U.S. dollars and Canadian dollars, but its functional currency is the U.S. dollar. The results of any non-U.S. dollar transactions are remeasured in U.S. dollars at the applicable exchange rates during the period and resulting foreign currency transaction gains and losses are included in the determination of net income. Our gain on transactions determined in

foreign currencies

was

immaterial for the year ended December 31, 2018. Unless otherwise noted, all references to “$” or “dollar” refer to the U.S. dollar.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. In the accompanying consolidated financial statements, estimates are used for, but not limited to, stock-based compensation, revenue recognition, allowance for doubtful accounts, variable consideration determined based on accruals for chargebacks, administrative fees and rebates, government rebates, returns and other allowances, allowance for inventory obsolescence, valuation of financial instruments and intangible assets, accruals for contingent liabilities, fair value of long-lived assets, income tax provision, deferred taxes and valuation allowance, purchase price allocations, and the depreciable lives of long-lived assets. Because of the uncertainties inherent in such estimates, actual results may differ from those estimates. Management periodically evaluates estimates used in the preparation of the financial statements for reasonableness.

Comprehensive Income

Comprehensive income, which is reported in the statement of comprehensive income, consists of net income, changes in fair value of our interest rate swap, and other comprehensive income, net of tax.

Credit Concentration

Our customers are primarily wholesale distributors, chain drug stores, group purchasing organizations, and other pharmaceutical companies.

During the year ended December 31, 2018,

three

customers represented approximately

%, and

% of net revenues, respectively. As of December

2018

, accounts receivable from these customers totaled

of net accounts receivable. During the year ended December 31, 2017, three customers represented approximately 29%, 29%, and 20% of net revenues, respectively. During the year ended December 31, 2016, three customers represented approximately 28%, 22%, and 18% of net revenues, respectively.

Vendor Concentration

We source the raw materials for products, including active pharmaceutical ingredients (“API”), from both domestic and international suppliers. Generally, only a single source of API is qualified for use in each product due to the costs and time required to validate a second source of supply. As a result, we are dependent upon our current vendors to supply reliably the API required for ongoing product manufacturing. During the year ended December 31, 2018, we purchased approximately 13% of our inventory from one supplier. As of December 31, 2018, amounts payable to this supplier was immaterial. During the year ended December 31, 2017, we purchased approximately 23% of our inventory from two suppliers. During the year ended December 31, 2016, we purchased approximately 25% of our inventory from one supplier.

Revenue Recognition

As of January 1, 2018, we adopted guidance for revenue recognition for contracts, using the modified retrospective method. The implementation of the guidance had no material impact on the measurement or recognition of revenue from customer contracts of prior periods. For our revenue recognition policies prior to adopting the guidance for revenue recognition for contracts, please see Item 8. Consolidated Financial Statements, Note 1,

Description of Business and Summary of Significant Accounting Policies

, in our Annual Report on Form 10-K for the year ended December 31, 2017.

Upon adoption of this new guidance, we recognize revenue using the following steps:

		Identification of the contract, or contracts, with a customer;
		Identification of the performance obligations in the contract;
		Determination of the transaction price, including the identification and estimation of variable consideration;
		Allocation of the transaction price to the performance obligations in the contract; and
		Recognition of revenue when we satisfy a performance obligation.

We derive our revenues primarily from sales of generic and branded pharmaceutical products. Revenue is recognized when our obligations under the terms of our contracts with customers are satisfied, which generally occurs when control of the products we sell is transferred to the customer. We estimate variable consideration after considering applicable information that is reasonably available. We generally do not have incremental costs to obtain contracts that would otherwise not have been incurred. We do not adjust revenue for the promised amount of consideration for the effects of a significant financing component because our customers generally pay us within 100 days.

All revenue recognized in our consolidated statements of operations is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue:

Products and Services	Years Ended December 31,
(in thousands)	2018		2017		2016
Sales of generic pharmaceutical products	$	117,451	$	118,437	$	95,201
Sales of branded pharmaceutical products		60,554		50,919		26,443
Sales of contract manufactured products		9,119		7,046		5,537
Royalties from licensing agreements		12,504		-		-
Product development services		1,019		-		-
Other (1)		929		440		1,441
Total net revenues	$	201,576	$	176,842	$	128,622

(1)

Primarily includes laboratory services and royalties on sales of contract manufactured products

Timing of Revenue Recognition	Years Ended December 31,
(in thousands)	2018		2017		2016
Performance obligations transferred at a point in time	$	200,557	$	176,842	$	128,622
Performance obligations transferred over time		1,019		-		-
Total	$	201,576	$	176,842	$	128,622

During the year ended December 31, 2018, we did not incur, and therefore did not defer, any material incremental costs to obtain contracts. We recognized $5.3 million of net revenue from performance obligations satisfied in prior periods during the year ended December 31, 2018, consisting primarily of royalties from licensing agreements and revised estimates for variable consideration, including chargebacks, rebates, returns, and other allowances, related to prior period sales. In August 2018, we acquired WellSpring (see Note 3), a contract manufacturing company that also provides technical transfer services to customers, for which services are transferred over time. As a result, we had $0.1 million of contract assets related to revenue recognized based on percentage of completion but not yet billed and $0.7 million of deferred revenue at December 31, 2018. We had no contract assets or deferred revenue at December 31, 2017 and 2016.

Revenue from Sales of Generic and Branded Pharmaceutical Products

Product sales consists of sales of our generic and brand pharmaceutical products. Our sole performance obligation in our contracts is to provide pharmaceutical products to customers. Our products are sold at pre-determined standalone selling prices and our performance obligation is considered to be satisfied when control of the product is transferred to the customer. Control is transferred to the customer upon delivery of the product to the customer, as our pharmaceutical products are sold on an FOB destination basis and because inventory risk and risk of ownership passes to the customer upon delivery. Payment terms for these sales are generally less than 100 days.

Revenue from Distribution Agreements

From time to time, we enter into marketing and distribution agreements with third parties in which we sell products under Abbreviated New Drug Applications (“ANDAs”) or New Drug Applications (“NDAs”) owned or licensed by these third parties. These products are sold under our own label. We have assessed and determined that we control the products sold under these marketing and distribution agreements and therefore are the principal for sales under each of these marketing and distribution agreements. As a result, we recognize revenue on a gross basis when control has passed to the customer and we have satisfied our performance obligation. Under these agreements, we pay these third parties a specified percentage of the gross profit earned on sales of the products. These profit-sharing percentages are recognized in cost of sales in our consolidated statements of operations and are accrued in accrued royalties in our consolidated balance sheets until payment has occurred.

Sales of our pharmaceutical products are subject to variable consideration due to chargebacks, government rebates, returns, administrative and other rebates, and cash discounts. Estimates for these elements of variable consideration require significant judgment.

Chargebacks

Chargebacks, primarily from wholesalers, result from arrangements we have with indirect customers establishing prices for products which the indirect customer purchases through a wholesaler. Alternatively, we may pre-authorize wholesalers to offer specified contract pricing to other indirect customers. Under either arrangement, we provide a chargeback credit to the wholesaler for any difference between the contracted price with the indirect customer and the wholesaler's invoice price, typically Wholesale Acquisition Cost ("WAC").

Chargeback credits are calculated as follows:

Prior period chargebacks claimed by wholesalers are analyzed to determine the actual average selling price ("ASP") for each product. This calculation is performed by product by wholesaler. ASPs can be affected by several factors such as:

		A change in customer mix
		A change in negotiated terms with customers
		A change in the volume of off-contract purchases
		Changes in WAC

As necessary, we adjust ASPs based on anticipated changes in the factors above.

The difference between ASP and WAC is recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable in the consolidated balance sheets, at the time we recognize revenue from the product sale.

To evaluate the adequacy of our chargeback accruals, we obtain on-hand inventory counts from the wholesalers. This inventory is multiplied by the chargeback amount, the difference between ASP and WAC, to arrive at total expected future chargebacks, which is then compared to the chargeback accruals. We continually monitor chargeback activity and adjust ASPs when we believe that actual selling prices will differ from current ASPs.

Government Rebates

Our government rebates reserve consists of estimated payments due to governmental agencies for purchases made by third parties under various governmental programs. The two largest government programs that impact our net revenue and our government rebates reserve are federal and state Medicaid rebate programs and Medicare.

We participate in certain qualifying federal and state Medicaid rebate programs whereby discounts and rebates are provided to participating programs after the final dispensing of the product by a pharmacy to a Medicaid plan participant. Medicaid rebates are typically billed up to 120 days after the product is shipped. Medicaid rebate amounts per product unit are established by law, based on the Average Manufacturer Price (“AMP”), which is reported on a monthly and quarterly basis, and, in the case of branded products, best price, which is reported on a quarterly basis. Our Medicaid reserves are based on expected claims from state Medicaid programs. Estimates for expected claims are driven by patient usage, sales mix, calculated AMP or best price, as well as inventory in the distribution channel that will be subject to a Medicaid rebate. As a result of the delay between selling the products and rebate billing, our Medicaid rebate reserve includes both an estimate of outstanding claims for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to plan participants.

Many of our products are also covered under Medicare. We, like all pharmaceutical companies, must provide a discount for any products sold under NDAs to Medicare Part D participants. This applies to all products sold under NDAs, regardless of whether the products are marketed as branded or generic. Our estimates for these discounts are based on historical experience with Medicare rebates for our products. While such experience has allowed for reasonable estimations in the past, history may not always be an accurate indicator of future rebates. Medicare rebates are typically billed up to 120 days after the product is shipped. As a result of the delay between selling the products and rebate billing, our Medicare rebate reserve includes both an estimate of outstanding claims for end-customer sales that have occurred but for which the related claim has not been billed, as well as an estimate for future claims that will be made when inventory in the distribution channel is sold through to Medicare Part D participants.

To evaluate the adequacy of our government rebate reserves, we review the reserves on a quarterly basis against actual claims data to ensure the liability is fairly stated. We continually monitor our government rebate reserve and adjust our estimates if we believe that actual government rebates may differ from our established accruals. Accruals for government rebates are recorded as a reduction to gross revenues in the consolidated statements of operations and as an increase to accrued government rebates in the consolidated balance sheets.

Returns

We maintain a return policy that allows customers to return product within a specified period prior to and subsequent to the expiration date. Generally, product may be returned for a period beginning six months prior to its expiration date to up to one year after its expiration date. Our product returns are settled through the issuance of a credit to the customer. Our estimate for returns is based upon historical experience with actual returns. While such experience has allowed for reasonable estimation in the past, history may not always be an accurate indicator of future returns. We continually monitor our estimates for returns and make adjustments when we believe that actual product returns may differ from the established accruals. Accruals for returns are recorded as a reduction to gross revenues in the consolidated statements of operations and as an increase to the return goods reserve in the consolidated balance sheets.

Administrative Fees and Other Rebates

Administrative fees or rebates are offered to wholesalers, group purchasing organizations, and indirect customers. We accrue for fees and rebates, by product by wholesaler, at the time of sale based on contracted rates and ASPs.

To evaluate the adequacy of our administrative fee accruals, we obtain on-hand inventory counts from the wholesalers. This inventory is multiplied by the ASPs to arrive at total expected future sales, which is then multiplied by contracted rates. The result is then compared to the administrative fee accruals. We continually monitor administrative fee activity and adjust our accruals when we believe that actual administrative fees will differ from the accruals. Accruals for administrative fees and other rebates are recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable in the consolidated balance sheets.

Prompt Payment Discounts

We often grant sales discounts for prompt payment. The reserve for prompt payment discounts is based on invoices outstanding. We assume, based on past experience, that all available discounts will be taken. Accruals for prompt payment discounts are recorded as a reduction in both gross revenues in the consolidated statements of operations and accounts receivable in the consolidated balance sheets.

The following table summarizes activity in the consolidated balance sheets for accruals and allowances for the years ended December 31, 2018, 2017, and 2016:

	Accruals for Chargebacks, Returns, and Other Allowances
										Administrative			Prompt
				Government						Fees and Other			Payment
(in thousands)	Chargebacks			Rebates			Returns			Rebates			Discounts
Balance at December 31, 2015	$	11,381		$	4,631		$	2,648		$	1,653		$	674
Accruals/Adjustments		114,433			9,671			10,271			12,747			5,517
Credits Taken Against Reserve		(99,029	)		(8,411	)		(7,163	)		(10,850	)		(4,637	)
Balance at December 31, 2016	$	26,785		$	5,891		$	5,756		$	3,550		$	1,554
Accruals/Adjustments		179,297			12,237			12,184			24,037			8,126
Credits Taken Against Reserve		(177,852	)		(10,198	)		(9,666	)		(22,361	)		(7,846	)
Balance at December 31, 2017	$	28,230		$	7,930		$	8,274		$	5,226		$	1,834
Accruals/Adjustments		229,813			11,383			14,243			33,167			9,371
Credits Taken Against Reserve		(219,036	)		(10,339	)		(9,965	)		(31,040	)		(9,196	)
Balance at December 31, 2018	$	39,007		$	8,974		$	12,552		$	7,353		$	2,009

Contract Manufacturing Product Sales Revenue

Contract manufacturing arrangements consists of agreements in which we manufacture a pharmaceutical product on behalf of third party. Our performance obligation is to manufacture and provide pharmaceutical products to customers, typically pharmaceutical companies. The contract manufactured products are sold at pre-determined standalone selling prices and our performance obligations are considered to be satisfied when control of the product is transferred to the customer. Control is transferred to the customer when the product leaves our dock to be shipped to the customer, as our pharmaceutical products are sold on an FOB shipping point basis and the inventory risk and risk of ownership passes to the customer at that time. Payment terms for these sales are generally less than two months. We estimate returns based on historical experience. Historically, we have not had material returns for

As of December 31, 2018, the value of our unsatisfied performance obligations (or backlog) was $6.3 million, which consists of firm orders for contract manufactured products, for which our performance obligations remain unsatisfied and for which the related revenue has yet to be recognized. We anticipate satisfying these performance obligations within six months.

Royalties from Licensing Agreements

From time to time, we enter into transition agreements with the sellers of products we acquire, under which we license to the seller the right to sell the acquired products. Therefore, we recognize the revenue associated with sales of the underlying products as royalties. Because these royalties are sales-based, we recognize the revenue when the underlying sales occur, based on sales and gross profit information received from the sellers. Upon full transition of the products and upon launching the products under our own labels, we recognize revenue for the products as sales of generic or branded pharmaceutical products, as described above.

In addition, we receive royalties from a license for patent rights initially owned by Cell Genesys, Inc., which merged with BioSante in 2009.

The royalties are the results of sales and milestones related to the Yescarta® product. We recognize revenue for sales-based royalties when the underlying sales occur and when related milestones occur, which requires significant judgment.

Product Development Services Revenue

We provide product development services to customers, which are performed over time. These services primarily relate to the technology transfer of products to our facility in Oakville, Ontario. Technology transfer refers to the process required to move the manufacture of a product to a new manufacturing site and may include performance obligations such as formulation development, production of small-scale batches, process development, and analytical method development and validation.

The duration of these technology transfer projects is generally 18 months to three years. Deposits received from these customers are recorded as deferred revenue until revenue is recognized. For contracts with no deposits and for the remainder of contracts with deposits, we invoice customers as our performance obligations are satisfied. We recognize revenue on a proportional basis, which results in contract assets on our balance sheet. As of December 31, 2018, the value of our unsatisfied performance obligations for product development services contracts was $2.0 million. We expect to satisfy these performance obligations in the next 6 to 15 months.

Cash and Cash Equivalents

We consider all highly liquid instruments with maturities of three months or less when purchased to be cash equivalents. All interest bearing and non-interest bearing accounts are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to $250 thousand. The majority of our cash balances are in excess of FDIC coverage. We consider this to be a normal business risk.

Accounts Receivable

We extend credit to customers on an unsecured basis. We use the allowance method to provide for doubtful accounts based on our evaluation of the collectability of accounts receivable, whereby we provide an allowance for doubtful accounts equal to the estimated uncollectible amounts. Our estimate is based on historical collection experience and a review of the current status of trade accounts receivable. We determine trade receivables to be delinquent when greater than 30 days past due. Receivables are written off when it is determined that amounts are uncollectible. We determined that no allowance for doubtful accounts was necessary as of December 31, 2018 and 2017.

Inventories

Inventories consist of raw materials, packaging materials, work-in-progress, and finished goods. Inventories are stated at the lower of standard cost or net realizable value. We periodically review and adjust standard costs, which generally approximate weighted average cost.

Property and Equipment

Property and equipment are recorded at cost. Expenditures for repairs and maintenance are charged to expense as incurred. Depreciation is recorded on a straight-line basis over estimated useful lives as follows:

Buildings and improvements	20 - 40 years
Machinery, furniture, and equipment	1 - 10 years

Construction in progress consists of multiple projects, primarily related to new equipment to expand our manufacturing capability as our product lines continue to grow. Construction in progress includes the cost of construction and other direct costs attributable to the construction, along with capitalized interest. Depreciation is not recorded on construction in progress until such time as the assets are placed in service.

We review property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of the long-lived asset is measured by a comparison of the carrying amount of the asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the estimated fair value of the assets. No impairment loss related to property and equipment was recognized during the years ended December 31, 2018, 2017, and 2016. Assets held for disposal are reportable at the lower of the carrying amount or fair value, less costs to sell. No assets were held for disposal as of December 31, 2018 and 2017.

Intangible Assets

Intangible assets were acquired as part of the Merger and several asset purchase transactions. These assets include ANDAs for a total of 54 previously marketed generic products we acquired in 2014 and 2015, ANDAs for three previously-commercialized generic drug products, the approved ANDAs for two generic drug products that have yet to be commercialized, the development package for one generic drug product, a license, supply, and distribution agreement for a generic drug product with an ANDA that is pending approval, ANDAs for 23 previously-marketed generic products we acquired in 2018, NDAs and product rights for our branded products Atacand, Atacand HCT, Arimidex, Casodex, Lithobid, Vancocin, Inderal LA, Inderal XL, InnoPran XL, and Cortrophin, acquired marketing and distribution rights, a non-compete agreement, and fully amortized product rights for Reglan and a generic product. These intangible assets were originally recorded at fair value for business combinations and at relative fair value based on the purchase price for asset acquisitions and are stated net of accumulated amortization.

The ANDAs, NDAs and product rights, marketing and distribution rights, and non-compete agreement are amortized over their remaining estimated useful lives, ranging from four to 10 years, based on the straight-line method. Management reviews definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, in a manner similar to that for property and equipment. No impairment losses related to intangible assets were recognized in the year ended December 31, 2018. During the years ended December 31, 2017 and 2016 we recognized impairment charges of $0.9 million and $6.7 million in relation to our testosterone gel NDA asset, respectively (Note 7).

Goodwill

Goodwill relates to the Merger and the acquisition of WellSpring and represents the excess of the total purchase consideration over the fair value of acquired assets and assumed liabilities, using the purchase method of accounting. Goodwill is not amortized, but is subject to periodic review for impairment. Goodwill is reviewed for impairment annually, as of October 31, and whenever events or changes in circumstances indicate that the carrying amount of the goodwill might not be recoverable. We perform our review of goodwill on our one reporting unit.

Before employing detailed impairment testing methodologies, we first evaluate the likelihood of impairment by considering qualitative factors relevant to our reporting unit. When performing the qualitative assessment, we evaluate events and circumstances that would affect the significant inputs used to determine the fair value of the goodwill. Events and circumstances evaluated include: macroeconomic conditions that could affect us, industry and market considerations for the generic pharmaceutical industry that could affect us, cost factors that could affect our performance, our financial performance (including share price), and consideration of any company-specific events that could negatively affect us, our business, or the fair value of our business. If we determine that it is more likely than not that goodwill is impaired, we will then apply detailed testing methodologies. Otherwise, we will conclude that no impairment has occurred.

Detailed impairment testing involves comparing the fair value of our one reporting unit to its carrying value, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale of ANI. If the fair value exceeds carrying value, then it is concluded that no goodwill impairment has occurred. If the carrying value of the reporting unit were to exceed its fair value, we would recognize an impairment charge for the amount by which the carrying amount exceeded the reporting unit’s fair value. The loss recognized would not exceed the total amount of goodwill allocated to that reporting unit. No impairment loss related to goodwill was recognized in the years ended December 31, 2018, 2017, and 2016.

Collaborative Arrangements

At times, we have entered into arrangements with various commercial partners to further business opportunities. In collaborative arrangements such as these, when we are actively involved and exposed to the risks and rewards of the activities and are determined to be the principal participant in the collaboration, we classify third party costs incurred and revenues in the consolidated statements of operations on a gross basis. Otherwise, third party revenues and costs generated by collaborative arrangements are presented on a net basis. Payments between us and the other participants are recorded and classified based on the nature of the payments.

Royalties

We have entered profit-sharing arrangements with third parties in which we sell products under ANDAs or NDAs owned or licensed by these third parties. Under these agreements, we pay these third parties a specified percentage of the gross profit earned on sales of the products. These profit-sharing percentages are recorded in cost of sales in our consolidated statements of operations when the associated revenue is recognized and are recorded in accrued royalties in our consolidated balance sheets when the associated revenue is recognized and until payment has occurred.

Research and Development Expenses

Research and development costs are expensed as incurred and primarily consist of expenses relating to product development. Research and development costs totaled $15.4 million, $9.1 million, and $2.9 million for the years ended December 31, 2018, 2017, and 2016, respectively.

Stock-Based Compensation

We have a stock-based compensation plan that includes stock options and restricted stock, which are awarded in exchange for employee and non-employee director services. Stock-based compensation cost for stock options is determined at the grant date using an option pricing model and stock-based compensation cost for restricted stock is based on the closing market price of the stock at the grant date. The value of the award is recognized as expense on a straight-line basis over the employee’s requisite service period. We also account for forfeitures as they occur rather than using an estimated forfeiture rate. We recognize excess tax benefits or tax deficiencies as a component of our current period provision for income taxes.

In addition, in July 2016, we commenced administration of our Employee Stock Purchase Plan (“ESPP”). We recognize the estimated fair value of stock-based compensation awards and classify the expense where the underlying salaries are classified. We incurred $6.7 million, $6.1 million, and $6.1 million of non-cash, stock-based compensation cost for the years ended December 31, 2018, 2017, and 2016, respectively, of which $102 thousand, $68 thousand, and $25 thousand of the 2018, 2017, and 2016 expense related to the ESPP, respectively.

Valuation of stock awards requires us to make assumptions and to apply judgment to determine the fair value of the awards. These assumptions and judgments include estimating the future volatility of our stock price and dividend yields. Changes in these assumptions can affect the fair value estimate.

Income Taxes

We use the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. The Tax Cuts and Jobs Act, which was enacted on December 22, 2017, includes a number of changes to existing U.S. tax laws, most notably the reduction of the U.S. corporate income tax rate from 35% to 21%, which began in 2018. We measure our deferred tax assets and liabilities using the enacted tax rates that we believe will apply in the years in which the temporary differences are expected to be recovered or paid. As a result, we remeasured our deferred tax assets and deferred tax liabilities to reflect the reduction in the enacted U.S. corporate income tax rate, resulting in a $13.4 million increase in income tax expense for the year ended December 31, 2017 (Note 11). Beginning with our acquisition of ANI Canada in August 2018, our Canadian operations are subject to corporate taxes at a foreign statutory rate of 26.5%.

The measurement of a deferred tax asset is reduced, if necessary, by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. As of December 31, 2018 and 2017, we maintained a valuation allowance against certain state net operating loss carryforwards that we believe may not be realizable within the individual state statutory carry forward periods. Additionally, as of December 31, 2018 we maintained a valuation against all of our net deferred tax assets at ANI Canada based on our assessment of the eventual realization of those assets.

We use a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. We have not identified any uncertain income tax positions that could have a material impact to the consolidated financial statements. We are subject to taxation in various jurisdictions in the U.S. and remain subject to examination by taxing jurisdictions for the years 1998 and all subsequent periods due to the availability of net operating loss carryforwards.

We are subject to taxation in Canada and remain subject to examination by taxing jurisdictions for a period of four years.

We recognize interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense. We did not have any such amounts accrued as of December 31, 2018, 2017, and 2016.

We consider potential tax effects resulting from discontinued operations and record intra-period tax allocations, when those effects are deemed material. In 2018, we entered in an interest rate swap agreement (Note 4) that we designated as a cash flow hedge designed to manage exposure to changes in LIBOR-based interest rate underlying our Term Loan with Citizen’s Bank., N.A. Due to the effective nature of the hedge, the initial fair value of the hedge and subsequent changes in the fair value of the hedge are recognized in accumulated other comprehensive loss, net of tax in the accompanying consolidated balance sheets. Income taxes are allocated to the hedge component of accumulated other comprehensive income based on appropriate intra-period tax allocations when those effects are deemed material.

Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period.

For periods of net income, and when the effects are not anti-dilutive, we calculate diluted earnings (loss) per share by dividing net income available to common shareholders by the weighted-average number of shares outstanding plus the impact of all potential dilutive common shares, consisting primarily of common stock options, shares to be purchased under our ESPP, unvested restricted stock awards, stock purchase warrants, and any conversion gain on the Notes, using the treasury stock method. For periods of net loss, diluted loss per share is calculated similarly to basic loss per share because the impact of all dilutive potential common shares is anti-dilutive.

Our unvested restricted shares and certain of our outstanding warrants contain non-forfeitable rights to dividends, and therefore are considered to be participating securities; in periods of net income, the calculation of basic and diluted earnings (loss) per share excludes from the numerator net income (but not net loss) attributable to the unvested restricted shares and to the participating warrants, and excludes the impact of those shares from the denominator.

For purposes of determining diluted earnings (loss) per share, we have elected a policy to assume that the principal portion of our 3.0% Convertible Senior Notes due December 1, 2019 (the “Notes,” Note 3) is settled in cash. As such, the principal portion of the Notes has no effect on either the numerator or denominator when determining diluted earnings (loss) per share. Any conversion gain is assumed to be settled in shares and is incorporated in diluted earnings (loss) per share using the treasury method. The warrants issued in conjunction with the issuance of the Notes are considered to be dilutive when they are in-the-money relative to our average stock price during the period; the bond hedge purchased in conjunction with the issuance of the Notes is always considered to be anti-dilutive.

The numerator for earnings per share for the years ended December 31, 2018, 2017, and 2016 are calculated for basic and diluted earnings (loss) per share as follows:

	Basic									Diluted
	Years Ended December 31,									Years Ended December 31,
(in thousands, except per share amounts)	2018			2017			2016			2018			2017			2016
Net income/(loss)	$	15,494		$	(1,076	)	$	3,934		$	15,494		$	(1,076	)	$	3,934
Net income allocated to restricted stock		(154	)		-			(21	)		(154	)		-			(21	)
Net income/(loss) allocated to common shares	$	15,340		$	(1,076	)	$	3,913		$	15,340		$	(1,076	)	$	3,913

Basic Weighted-Average Shares Outstanding		11,677			11,547			11,445			11,677			11,547			11,445
Dilutive effect of stock options and ESPP											95			-			128
Diluted Weighted-Average Shares Outstanding											11,772			11,547			11,573

Earnings/(Loss) per share	$	1.31		$	(0.09	)	$	0.34		$	1.30		$	(0.09	)	$	0.34

The number of anti-dilutive shares, which have been excluded from the computation of diluted earnings (loss) per share, including the shares underlying the Notes, were 4.4 million, 4.8 million, and 4.5 million for the years ended December 31, 2018, 2017, and 2016, respectively. Due to the net loss in the year ended December 31, 2017, all dilutive potential common shares were also excluded from the diluted loss per share calculation, as the impact of those potential common shares is anti-dilutive in the case of a net loss. Anti-dilutive shares consist of out-of-the-money Class C Special stock, out-of-the-money common stock options, common stock options that are anti-dilutive when calculating the impact of the potential dilutive common shares using the treasury stock method, underlying shares related to out-of-the-money bonds issued as convertible debt, and out-of-the-money warrants exercisable for common stock.

Hedge Accounting

As of January 1, 2018, we adopted guidance intended to simplify hedge accounting by better aligning how an entity’s risk management activities and hedging relationships are presented in its financial statements. The guidance also simplified the application of hedge accounting guidance in certain situations. The adoption of this guidance did not have a material impact on our consolidated financial statements. However, the adoption of this guidance did impact how we accounted for the interest rate swaps we entered into in April 2018 and December 2018. See Note 4 for further details regarding the interest rate swap.

We use derivative financial instruments to hedge our exposure to interest rate risks. All derivative financial instruments are recognized as either assets or liabilities at fair value on the consolidated balance sheet and are classified as current or long-term based on the scheduled maturity of the instrument.

When we enter into a hedge arrangement and intend to apply hedge accounting, we formally document the hedge relationship and designate the instrument for financial reporting purposes as a fair value hedge, a cash flow hedge, or a net investment hedge. When we determine that a derivative financial instrument qualifies as a cash flow hedge and is effective, the changes in fair value of the instrument are recorded in accumulated other comprehensive income/(loss), net of tax in our consolidated balance sheets and will be reclassified to earnings when the hedged item affects earnings.

Fair Value of Financial Instruments

Our consolidated balance sheets include various financial instruments (primarily cash and cash equivalents, prepaid expenses, accounts receivable, accounts payable, accrued expenses, and other current liabilities) that are carried at cost and that approximate fair value. The fair value of our long-term indebtedness is estimated based on the quoted prices for the same or similar issues, or on the current rates we have been offered for debt of the same remaining maturities. Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value. These tiers include:



Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date for identical assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.



Level 2—Observable market-based inputs other than quoted prices in active markets for identical assets or liabilities.



Level 3—Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

See Note 8 for additional information regarding fair value.

Geographic Information

Based on the distinct nature of our operations, our internal management structure, and the financial information that is evaluated regularly by our Chief Operating Decision Maker (“CODM”), we determined that we operate in one reportable segment. Our operations are located in the United States and Canada.

The following table depicts the Company’s revenue by geographic operations during the following periods:

(in thousands)	Years Ended December 31,
Location of Operations	2018		2017		2016
United States	$	196,886	$	176,842	$	128,622
Canada		4,690		-		-
Total Revenue	$	201,576	$	176,842	$	128,622

The following table depicts the Company’s property and equipment, net according to geographic location as of:

(in thousands)	December 31, 2018		December 31, 2017
United States	$	24,437	$	20,403
Canada		13,653		-
Total property and equipment, net	$	38,090	$	20,403

Recent Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

In November 2018, the Financial Accounting Standards Board (“FASB”) issued guidance clarifying that certain transactions between collaborative arrangement participants should be accounted for revenue under Accounting Standards Codification Topic 606 when the collaborative arrangement participant is a customer in the context of a unit of account. The guidance is effective for reporting periods beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact, if any, that the adoption of this guidance will have on our consolidated financial statements.

In October 2018, the FASB issued guidance for accounting for derivatives and hedging. The guidance provides for the inclusion of the Secured Overnight Financing Rate (“SOFR”) Overnight Index swap rate as a benchmark interest rate for hedge accounting purposes. In July 2017, the Financial Conduct Authority in the United Kingdom announced that it would phase out London Interbank Offered Rate (“LIBOR”) as a benchmark by the end of 2021. As a result, the U.S. Federal Reserve identified the SOFR as its preferred alternative reference rate, calculated with a broad set of short-term repurchase agreements backed by treasury securities. Amounts drawn under our five-year senior secured credit facility bear interest rates in relation to LIBOR, and our interest rate swap is designated in LIBOR. The guidance is effective for reporting periods beginning after December 15, 2018 and early adoption is permitted. The guidance must be adopted on a modified retrospective basis and provides for certain practical expedients. We will adopt this guidance as of January 1, 2019. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

In August 2018, the FASB issued guidance aligning the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The guidance is effective for reporting periods beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim period. We will adopt this guidance as of January 1, 2019 on a prospective basis. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

In August 2018, the FASB issued guidance modifying the disclosure requirements on fair value measurements. The amendments add, modify, and eliminate certain disclosure requirements on fair value measurements. The guidance is effective for reporting periods beginning after December 15, 2019, including interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim period. We are currently evaluating the impact, if any, that the adoption of this guidance will have on our consolidated financial statements.

In June 2018, the FASB issued guidance simplifying the accounting for nonemployee stock-based compensation awards. The guidance aligns the measurement and classification for employee stock-based compensation awards to nonemployee stock-based compensation awards. Under the guidance, nonemployee awards will be measured at their grant date fair value. Upon transition, the existing nonemployee awards will be measured at fair value as of the adoption date. The guidance is effective for reporting periods beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, including adoption in an interim period. We will adopt this guidance as of January 1, 2019. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.

In June 2016, the FASB issued guidance with respect to measuring credit losses on financial instruments, including trade receivables. The guidance eliminates the probable initial recognition threshold that was previously required prior to recognizing a credit loss on financial instruments. The credit loss estimate can now reflect an entity's current estimate of all future expected credit losses. Under the previous guidance, an entity only considered past events and current conditions. The guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The adoption of certain amendments of this guidance must be applied on a modified retrospective basis and the adoption of the remaining amendments must be applied on a prospective basis. We currently expect that the adoption of this guidance will likely change the way we assess the collectability of our receivables and recoverability of other financial instruments. We have not yet begun to evaluate the specific impacts of this guidance nor have we determined the manner in which we will adopt this guidance.

In February 2016, the FASB issued guidance for accounting for leases. The guidance requires lessees to recognize assets and liabilities related to long-term leases on the balance sheet and expands disclosure requirements regarding leasing arrangements. In July 2018, the FASB issued additional guidance, which offers a transition option to entities adopting the new lease standards. Under the transition option, entities can elect to apply the new guidance using a modified retrospective approach at the beginning of the year in which the new lease standard is adopted, rather than to the earliest comparative period presented in their financial statements. The guidance is effective for reporting periods beginning after December 15, 2018 and early adoption is permitted. The guidance must be adopted on a modified retrospective basis and provides for certain practical expedients. We will elect to use the transition option, as well as the package of practical expedients when we adopt the guidance using the modified retrospective approach as of January 1, 2019.

As a result of this guidance, we anticipate that we will record right-of-use assets and lease liabilities totaling approximately $450 thousand to $500 thousand primarily related to our long-term office operating leases. We also expect that the adoption of this guidance will result in additional lease-related disclosures in the footnotes to our consolidated financial statements.

We have evaluated all other issued and unadopted Accounting Standards Updates and believe the adoption of these standards will not have a material impact on our consolidated statements of operations, comprehensive income, balance sheets, or cash flows.

Recently Adopted Accounting Pronouncements

In August 2018, the Securities and Exchange Commission (“SEC”) adopted the final rule amending certain disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded. In addition, the amendments expand the disclosure requirements on the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The rule was effective on November 5, 2018 and will be effective for the quarter that begins after the effective date. The adoption of this guidance will result in the inclusion of the statement of stockholder’s equity in our interim financial statement filings, as well as the removal of certain redundant disclosures in this Annual Report on Form 10-K for the year ending December 31, 2018.

In August 2017, the FASB issued guidance improving accounting for hedging activities. The guidance is intended to simplify hedge accounting by better aligning how an entity’s risk management activities and hedging relationships are presented in its financial statements. The guidance also simplifies the application of hedge accounting guidance in certain situations. The guidance is effective for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption was permitted, including adoption in an interim period. The guidance with respect to the cash flow and net investment hedge relationships existing on the date of adoption must be applied on a modified retrospective basis and the new disclosure requirements must be applied on a prospective basis. We adopted this guidance as of January 1, 2018. The adoption of this guidance did not have a material impact on our consolidated financial statements. However, the adoption of this guidance did impact how we accounted for the interest rate swap we entered into in April 2018. See Note 4 for further details regarding the interest rate swap.

In May 2017, the FASB issued guidance clarifying when modification accounting should be used for changes to the terms or conditions of a share-based payment award. The guidance does not change the accounting for modifications, but clarifies that modification accounting guidance should only be applied if there is a change to the value, vesting conditions, or award classification and would not be required if the changes are considered non-substantive. The guidance is effective for the fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption was permitted, including adoption in an interim period. We adopted this guidance as of January 1, 2018 on a prospective basis. The adoption of this guidance did not have a material impact on our consolidated financial statements.

In May 2014, the FASB issued guidance for revenue recognition for contracts, superseding the previous revenue recognition requirements, along with most existing industry-specific guidance. The guidance requires an entity to review contracts in five steps: 1) identify the contract, 2) identify performance obligations, 3) determine the transaction price, 4) allocate the transaction price, and 5) recognize revenue. The new standard will result in enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue arising from contracts with customers. In August 2015, the FASB issued guidance approving a one-year deferral, making the standard effective for reporting periods beginning after December 15, 2017, with early adoption permitted only for reporting periods beginning after December 15, 2016. In March 2016, the FASB issued guidance to clarify the implementation guidance on principal versus agent considerations for reporting revenue gross rather than net, with the same deferred effective date. In April 2016, the FASB issued guidance to clarify the implementation guidance on identifying performance obligations and the accounting for licenses of intellectual property, with the same deferred effective date. In May 2016, the FASB issued guidance rescinding SEC paragraphs related to revenue recognition, pursuant to two SEC Staff Announcements at the March 3, 2016 Emerging Issues Task Force meeting. In May 2016, the FASB also issued guidance to clarify the implementation guidance on assessing collectability, presentation of sales tax, noncash consideration, and contracts and contract modifications at transition, with the same effective date. In September 2017, the FASB issued guidance amending and rescinding prior SEC staff announcements and observer comments related to revenue recognition, pursuant to the SEC Staff Announcement at the July 20, 2017 Emerging Issues Task Force meeting.

We performed a comprehensive review of our existing revenue arrangements as of January 1, 2018 following the five-step model. Our analysis indicated that there were no significant changes to how the amount and timing of revenue is recognized under the new guidance as compared to existing guidance. Additionally, our analysis indicated that there were no significant changes to how costs to obtain and fulfill our customer contracts are recognized under the new guidance as compared to existing guidance. We adopted this guidance as of January 1, 2018 using the modified retrospective method and the impact of adoption on our consolidated balance sheet, statement of operations, and statement of cash flows was not material. The adoption of the new guidance impacted the way we analyze, document, and disclose revenue recognition under customer contracts beginning on January 1, 2018 and resulted in additional disclosures in our financial statements. ANI Canada adopted this guidance as of the acquisition date, August 6, 2018. The adoption of this guidance did not have a material impact on our consolidated financial statements.

BUSINESS COMBINATION

12 Months Ended

Dec. 31, 2018

Business Combinations [Abstract]

Business Combination Disclosure

2. BUSINESS COMBINATION

Summary

On August 6, 2018, our subsidiary, ANI Canada, acquired all the issued and outstanding equity interests of WellSpring, a Canadian company that performs contract development and manufacturing of pharmaceutical products for a purchase price of $18.0 million, subject to certain customary adjustments. Pursuant to these customary adjustments, the total purchase consideration was $16.7 million. The consideration was paid entirely from cash on hand. In conjunction with the transaction, we acquired WellSpring’s pharmaceutical manufacturing facility, laboratory, and offices, its current book of commercial business, as well as an organized workforce. Following the consummation of the transaction, WellSpring was merged into ANI Canada with the resulting entity’s name being ANI Pharmaceuticals Canada Inc.

We acquired WellSpring to provide an additional tech transfer site in order to accelerate the re-commercialization of the previously-approved ANDAs in our pipeline, to expand our contract manufacturing revenue base, and to broaden our manufacturing capabilities to three manufacturing facilities.

Transaction Costs

In conjunction with the acquisition, we incurred approximately $1.1 million in transaction costs, all of which were expensed in 2018.

Purchase Consideration and Net Assets Acquired

The business combination was accounted for using the acquisition method of accounting, with ANI as the accounting acquirer of WellSpring. The acquisition method requires that acquired assets and assumed liabilities be recorded at their fair values as of the acquisition date.

The following presents the preliminary allocation of the purchase price, which has been updated to reflect the December 2018 net working capital adjustment of $0.6 million, resulting in a $0.6 million decrease to goodwill, to the assets acquired and liabilities assumed

on August 6, 2018:

	(in thousands)
Total Purchase Consideration	$	16,687

Cash and cash equivalents		220
Accounts receivable		1,311
Inventories		2,197
Prepaid expenses and other current assets		361
Property and equipment		13,935
Deferred tax assets, net		-
Goodwill		1,742
Total assets acquired		19,766

Accounts payable and other current liabilities		2,413
Deferred revenue		666
Total liabilties assumed		3,079
Net assets acquired	$	16,687

The net assets were recorded at their estimated fair value. In valuing acquired assets and liabilities, fair value estimates were based primarily on future expected cash flows, market rate assumptions for contractual obligations, and appropriate discount rates.

The above allocation of the purchase price is based upon certain preliminary valuations and other analyses that have not been finalized as of the date of this filing. Any changes in the estimated fair values of the net assets recorded for this business combination upon the finalization of more detailed analyses of the facts and circumstances that existed at the date of the transaction may change the allocation of the purchase price. As such, the purchase price allocations for this transaction are preliminary estimates, which may be subject to change within the measurement period.

Goodwill is considered an indefinite-lived asset and relates primarily to intangible assets that do not qualify for separate recognition, such as the assembled workforce and synergies between the entities. Goodwill established as a result of the acquisition is not tax deductible in any taxing jurisdiction. There was no value ascribed to any separately identifiable intangible assets.

Legacy WellSpring operations generated $4.7 million of revenue and recorded a net loss of $1.1 million from the acquisition date through December 31, 2018.

Pro Forma Condensed Combined Financial Information (unaudited)

The following unaudited pro forma condensed combined financial information summarizes the results of operations for the periods indicated as if the WellSpring acquisition had been completed as of January 1, 2017.

	Years Ended December 31,
(in thousands)	2018		2017 (1)
Net revenues	$	208,213	$	188,758
Net income/(loss)	$	13,287	$	(3,102	)

(1)

Net income for the year ended December 31, 2017 includes the impact to WellSpring of $4.4 million of related party debt forgiveness.

The pro forma amounts are not necessarily indicative of the results that would have been obtained if the transaction had occurred as of January 1, 2017 or that may be obtained in the future. The unaudited pro forma condensed consolidated financial information includes pro forma adjustments primarily relating to the following non-recurring items directly attributable to the business combination:



Elimination of amortization expense related to the acquiree’s historical intangible assets;



Elimination of transaction costs;



Elimination of profit on sales from WellSpring to ANI in the periods; and



Tax impacts of the adjustments to the acquirer’s net income, calculated as

% in 2018 and

% in 2017. As the acquiree has a loss in both years, there is no tax impact to adjustments to the acquiree’s net income.

The pro forma financial information does not include the effects of any expected operational efficiencies or synergies resulting from the acquisition.

INDEBTEDNESS

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

INDEBTEDNESS

3. INDEBTEDNESS

Credit Facility

On December 27, 2018, we refinanced our $125.0 million Credit Agreement by entering into an amended and restated Senior Secured Credit Facility (the “Credit Facility”) for up to $265.2 million. The principal new feature of the Credit Facility is a $118.0 million Delayed Draw Term Loan (the “DDTL”), which can only be drawn on in order to pay down the Company’s remaining 3.0% Convertible Senior Notes, which will mature in December 2019. The Credit Facility (and specifically the DDTL) has a subjective acceleration clause in case of a material adverse event. As a result, the remaining

% Convertible Senior Notes are classified as current in the accompanying consolidated balance sheets. The Credit Facility also extended the maturity of the $72.2 million secured term loan balance (the “Term Loan”) to December 2023. In addition, the Credit Facility increased the previous $

50.0

million line of credit

(the “Revolver”)

to $75.0 million. Also on December 27, 2018, we entered into an interest rate swap arrangement to manage our exposure to changes in LIBOR-based interest rates underlying our refinanced Term Loan (Note 4). The Term Loan includes a repayment schedule, subsequent to which $3.6 million of the loan will be paid in quarterly installments during 2019. As a result, $3.6 million of the loan is recorded in current component of long-term borrowing, net of deferred financing in the accompanying consolidated balance sheets. Amounts drawn on the Term Loan and, if drawn upon, the DDTL, bear an interest rate equal to, at our option, either a LIBOR rate plus 1.50% to 2.75% per annum, depending on our total leverage ratio or an alternative base rate plus an applicable base rate margin, which varies within a range of 0.50% to 1.75%, depending our total leverage ratio. We will incur a commitment fee at a rate per annum that varies within a range of

0.25

% to

0.50

%, depending on our leverage ratio. We will also incur a delayed draw ticking fee at a rate per annum that varies within a range of 0.25% to 0.50%, depending on our leverage ratio.

The Credit Facility is secured by a lien on substantially all of ANI

Pharmaceuticals,

Inc.’s and its principal domestic subsidiary’s assets and any future domestic subsidiary guarantors’ assets. The Credit Facility imposes financial covenants consisting of a maximum total leverage ratio, which initially shall be no greater than 3.75 to 1.00 and a minimum fixed charge coverage ratio, which shall be greater than or equal to 1.25 to 1.00. The primary non-financial covenants under the Credit Facility limit, subject to various exceptions, our ability to incur future indebtedness, to place liens on assets, to pay dividends or make other distributions on our capital stock, to repurchase our capital stock, to conduct acquisitions, to alter our capital structure, and to dispose of assets.

The carrying value of the current and long-term components of the Term Loan as of December 31, 2018 and 2017 are:

	Current
(in thousands)	2018			2017
Current borrowing on secured term loan	$	3,609		$	3,750
Deferred financing costs		(353	)		(397	)
Current component of long-term borrowing, net of deferred financing costs	$	3,256		$	3,353

	Long-Term
(in thousands)	2018			2017
Long-term borrowing on secured term loan	$	68,578		$	71,250
Deferred financing costs		(1,282	)		(1,304	)
Long-term borrowing, net of deferred financing costs and current borrowing component	$	67,296		$	69,946

The refinancing of the Term Loan was accounted for as a modification of our previous term loan and consequently, the remaining balance of the deferred issuance costs related to the previous term loan are included with the lenders fees associated with the refinance of the Term Loan and amortized as interest expense over the life of the Term Loan using the effective interest method. Fees to third parties associated with the refinance of the Term Loan were recognized as other (expense)/income, net in the accompanying consolidated statements of operations. The refinancing of the Revolver was accounted for as a modification of our previous revolving credit facility and consequently, the remaining balance of the deferred issuance costs related to the previous revolving credit facility are included with the lenders fees and fees to third parties associated with the refinance of the Revolver and amortized as interest expense on a straight-line basis over the life of the Revolver. All issuance costs allocated to the DDTL were deferred and will be amortized as interest expense on a straight-line basis over the five-year term of the DDTL.

As of December 31, 2018, we had a $

72.2

million balance on the Term Loan. As of December 31, 2018, we had not drawn on the Revolving Credit Facility or DDTL. Of the $1.3 million of deferred debt issuance costs allocated to the Revolving Credit Facility, $1.0 million is included in other long-term assets in the accompanying consolidated balance sheets and $0.3 million is included in prepaid expenses and other current assets in the accompanying consolidated balance sheets. Of the $0.6 million of deferred debt issuance costs allocated to the DDTL, $0.5 million is included in other long-term assets in the accompanying consolidated balance sheets and $0.1 million is included in prepaid expenses and other current assets in the accompanying consolidated balance sheets. Of the $1.6 million of deferred debt issuance costs allocated to the Term Loan, $0.3 million is classified as a direct deduction to the current portion of the Term Loan and is included in current component of long-term borrowing, net of deferred financing costs in the accompanying consolidated balance sheets and $1.3 million is classified as a direct deduction to the long-term portion of the Term Loan and is included in long-term borrowing, net of deferred financing costs and current borrowing component in the accompanying consolidated balance sheets.

The contractual maturity for our Term Loan is as follows for the years ending December 31:

(in thousands)
2019	$	3,609
2020		3,609
2021		5,414
2022		5,414
2023		54,141
Total	$	72,187

Previous Credit Agreement

In December 2017, we entered into a five-year senior secured credit facility (the “Credit Agreement”) with Citizens Bank, N.A. as a lender and administrative agent. As contemplated in the initial agreement, the Credit Agreement was syndicated to five additional lenders on February 5, 2018. The Credit Agreement was comprised of a $75.0 million five-year term loan (the “previous Term Loan”) and a $50.0 million senior secured revolving credit facility (the “Revolving Credit Facility”), with availability subject to a borrowing base consisting of eligible accounts receivable and inventory and the satisfaction of conditions precedent specified in the agreement.

The proceeds of the $75.0 million

Term Loan were used to finance our acquisition of the four NDAs acquired for $46.5 million in cash and to refinance the existing indebtedness of $25.0 million that was outstanding on our now retired asset-based revolving credit facility with Citizens Business Capital, a division of Citizens Asset Finance, Inc. We deferred $

2.7

million of total debt issuance costs related to the Credit Agreement, of which $1.7 million was allocated to the

Term Loan and $1.0 million was allocated to the undrawn Revolving Credit Facility.

The Term Loan was accounted for as a modification of our existing Line of Credit and consequently, the remaining balance of the deferred issuance costs related to the Line of Credit are included with the

Term Loan issuance costs and amortized as interest expense over the life of the

Term Loan using the effective interest method. The issuance costs allocated to the Revolving Credit Facility will be deferred and amortized as interest expense on a straight-line basis over the term of the Revolving Credit Facility. During the year ended December 31, 2018, we recorded $2.7 million of interest expense related to the original Credit Agreement.

Convertible Senior Notes

In December 2014, we issued $143.8 million of our Notes in a registered public offering. After deducting the underwriting discounts and commissions and other expenses (including the net cost of the bond hedge and warrant, discussed below), the net proceeds from the offering were approximately $122.6 million. The Notes pay 3.0% interest semi-annually in arrears on June 1 and December 1 of each year, starting on June 1, 2015, and are due December 1, 2019. In December 2018, we

entered into separate, privately negotiated agreements with certain holders of our Notes and repurchased

$25.0 million of our outstanding Notes. We accounted for the repurchase as an extinguishment of the portion of the Notes and recognized a loss on extinguishment of $0.5 million, which was recorded in other (expense)/income, net in the accompanying consolidated statements of operations. At the same time, we unwound a corresponding portion of the bond hedge and warrant, which are described in further detail below. As a result of unwinding this portion of the bond hedge and warrant, we received a net amount of $0.4 million.

The repurchase of the notes and the unwinding of the bond hedge and warrant resulted in a $1.7 million net reduction in additional paid-in capital (“APIC”) in the accompanying consolidated balance sheets.

The remaining Notes are convertible into 1,709,002 shares of common stock, based on an initial conversion price of $69.48 per share.

The Notes are convertible at the option of the holder (i) during any calendar quarter beginning after March 31, 2015, if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day, (ii) during the five business days after any five consecutive trading day period in which the trading price per $1,000 principal amount of the Notes for each trading day of such period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate on each such trading day; and (iii) on or after June 1, 2019 until the second scheduled trading day immediately preceding the maturity date.

Upon conversion by the holders, we may elect to settle such conversion in shares of our common stock, cash, or a combination thereof. As a result of our cash conversion option, we separately accounted for the value of the embedded conversion option as a debt discount (with an offset to APIC) of $33.6 million. The value of the embedded conversion option was determined based on the estimated fair value of the debt without the conversion feature, which was determined using market comparables to estimate the fair value of similar non-convertible debt (Note 8); the debt discount is being amortized as additional non-cash interest expense using the effective interest method over the term of the Notes.

Offering costs of $5.5 million were allocated to the debt and equity components in proportion to the allocation of proceeds to the components, as deferred financing costs and equity issuance costs, respectively. The deferred financing costs of $4.2 million are being amortized as additional non-cash interest expense using the straight-line method over the term of the debt, since this method was not significantly different from the effective interest method. Pursuant to guidance issued by the FASB in April 2015, we have classified the deferred financing costs as a direct deduction to the net carrying value of our Convertible Debt. The $1.3 million portion allocated to equity issuance costs was charged to APIC.

A portion of the offering proceeds was used to simultaneously enter into “bond hedge” (or purchased call) and “warrant” (or written call) transactions with an affiliate of one of the offering underwriters (collectively, the “Call Option Overlay”). We entered into the Call Option Overlay to synthetically raise the initial conversion price of the Notes to $96.21 per share and reduce the potential common stock dilution that may arise from the conversion of the Notes. The exercise price of the bond hedge is $69.48 per share and the exercise price of the warrant is $96.21 per share of our common stock. Because the bond hedge and warrant are both indexed to our common stock and otherwise would be classified as equity, we recorded both elements as equity, resulting in a net reduction to APIC of $15.6 million. After the repurchase of $25.0 million of our outstanding Notes and the unwinding of the corresponding portion of the bond hedge and warrant, our remaining bond hedge had an underlying 1,709,002 common shares as of December 31, 2018 and the remaining warrant had an underlying 1,709,002 common shares as of December 31, 2018.

The carrying value of the Notes is as follows as of December 31:

(in thousands)	2018			2017
Principal amount	$	118,750		$	143,750
Unamortized debt discount		(5,648	)		(13,924	)
Deferred financing costs		(639	)		(1,618	)
Net carrying value	$	112,463		$	128,208

The effective interest rate on the Notes was 7.8% and 7.9%, on an annualized basis, as of December 31, 2018 and 2017, respectively.

The following table sets forth the components of total interest expense related to the Notes and Term Loan recognized in our consolidated statements of operations for the year ended December 31:

(in thousands)	2018			2017			2016
Contractual coupon	$	7,170		$	4,313		$	4,312
Amortization of debt discount		7,002			6,720			6,372
Amortization of finance fees		1,463			845			844
Capitalized interest		(724	)		(554	)		(234	)
	$	14,911		$	11,324		$	11,294

DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY

12 Months Ended

Dec. 31, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY

4. DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY

In April 2018, we entered into an interest rate swap arrangement, which was considered a derivative financial instrument, with Citizens Bank, N.A. to manage our exposure to changes in LIBOR-based interest rates underlying our previous Term Loan. The interest rate swap hedged the variable cash flows associated with the borrowings under our previous Term Loan (Note 3), effectively providing a fixed rate of interest throughout the life of the previous Term Loan.

December 2018

, we refinanced our previous Credit Agreement and, as part of that refinancing, extended the maturity of our $

72.2

million secured term loan balance to

December 2023

. At the same time, we closed out the original interest rate swap and entered into a new interest rate swap arrangement, which is also considered a derivative financial instrument, with Citizens Bank, N.A. to manage our exposure to changes in

LIBOR

-based interest rates underlying our Term Loan. We accounted for the close-out of the original interest rate swap as a termination of the interest rate swap and wrote the interest rate swap liability and accumulated other comprehensive loss balance off as of the date of termination. As there were no excluded components, there was no net impact to the consolidated statement of operations. The interest rate swap hedges the variable cash flows associated with the borrowings under our Term Loan (Note

, effectively providing a fixed rate of interest throughout the life of our Term Loan.

The interest rate swap arrangement with Citizens Bank, N.A became effective on December 27, 2018, with a maturity date of December 27, 2023. The notional amount of the swap agreement at inception was $72.2 million and will decrease in line with our Term Loan. As of December 31, 2018, the notional amount of the interest rate swap was $72.2 million. The interest rate swap has a weighted average fixed rate of 2.60% and has been designated as an effective cash flow hedge and therefore qualifies for hedge accounting. As of December 31, 2018, the fair value of the interest rate swap liability was valued at $0.5 million and was recorded in other long-term liabilities in the accompanying consolidated balance sheets. As of December 31, 2018, $0.4 million, the fair value of the interest rate swap net of tax, was recorded in accumulated other comprehensive loss, net of tax in the accompanying consolidated balance sheets. During the year ended December 31, 2018, changes in the fair value of the interest rate swap of $0.4 million, net of tax, was recorded in accumulated other comprehensive (loss), net of tax in our consolidated statements of comprehensive income. Differences between the hedged LIBOR rate and the fixed rate are recorded as interest expense in the same period that the related interest is recorded for the Term Loan based on the LIBOR rate. In year ended December 31, 2018, $0.2 million of interest expense was recognized in relation to the interest rate swap.

In February 2019, we entered into an interest rate swap with Citizens Bank, N.A. to manage our exposure to changes in LIBOR-based interest rates underlying our DDTL. The notional amount of the interest rate swap is $118.0 million and will go into effect beginning in December 2018. The interest rate swap provides an effective fixed rate of 2.47%.

INVENTORIES

12 Months Ended

Dec. 31, 2018

Inventory Disclosure [Abstract]

INVENTORIES

5. INVENTORIES

Inventories consist of the following as of December 31:

(in thousands)	2018 (1)			2017
Raw materials	$	27,671		$	22,139
Packaging materials		2,563			1,527
Work-in-progress		1,210			510
Finished goods		10,620			13,901	(2)
		42,064			38,077
Reserve for excess/obsolete inventories		(1,561	)		(350	)
Inventories, net	$	40,503		$	37,727

(1)

Includes inventory acquired in acquisition of WellSpring (Note 2).

(2)

Includes finished goods acquired in asset purchases (Note 8).

PROPERTY, PLANT, AND EQUIPMENT

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

PROPERTY, PLANT, AND EQUIPMENT

6. PROPERTY, PLANT, AND EQUIPMENT

Property and equipment consist of the following as of December 31:

(in thousands)	2018 (1)			2017
Land	$	4,558		$	160
Buildings		10,079			3,835
Machinery, furniture, and equipment		26,814			12,334
Construction in progress		5,040			10,663
		46,491			26,992
Less: accumulated depreciation		(8,401	)		(6,589	)
Property and equipment, net	$	38,090		$	20,403

(1)

Includes property and equipment acquired in acquisition of WellSpring (Note 2).

Depreciation expense for the years ended December 31, 2018, 2017, and 2016 totaled $2.1 million, $1.2 million, and $0.9 million, respectively. During the years ended December 31, 2018 and 2017, there was $0.7 million and $0.6 million of interest capitalized into construction in progress, respectively.

INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

7. INTANGIBLE ASSETS

Goodwill

As a result of the Merger we recorded goodwill of $1.8 million. As a result of our acquisition of WellSpring, we recorded additional goodwill of $1.7 million in 2018. We assess the recoverability of the carrying value of goodwill on an annual basis as of October 31 of each year, and whenever events occur or circumstances changes that would, more likely than not, reduce the fair value of our reporting unit below its carrying value.

Changes in the carrying amount of goodwill as of December 31 are as follows:

(in thousands)	2018		2017
Balance at beginning of year	$	1,838	$	1,838
Acquisition of WellSpring (Note 2)		1,742		-
Balance at end of year	$	3,580	$	1,838

For the goodwill impairment analyses performed at October 31, 2018 and 2017, we performed qualitative assessments to determine whether it was more likely than not that our goodwill asset was impaired in order to determine the necessity of performing a quantitative impairment test, under which management would calculate the asset’s fair value. When performing the qualitative assessments, we evaluated events and circumstances that would affect the significant inputs used to determine the fair value of the goodwill. Events and circumstances evaluated include: macroeconomic conditions that could affect us, industry and market considerations for the generic pharmaceutical industry that could affect us, cost factors that could affect our performance, our financial performance (including share price), and consideration of any company-specific events that could negatively affect us, our business, or our fair value. Based on our assessments of the aforementioned factors, it was determined that it was more likely than not that the fair value of our one reporting unit is greater than its carrying amount as of October 31, 2018 and 2017, and therefore no quantitative testing for impairment was required.

In addition to the qualitative impairment analysis performed at October 31, 2018, there were no events or changes in circumstances that could have reduced the fair value of our reporting unit below its carrying value from October 31, 2018 to December 31, 2018. No impairment loss was recognized during the years ended December 31, 2018, 2017, and 2016, and the balance of goodwill was $3.6 million and $1.8 million as of December 31, 2018 and 2017, respectively.

Definite-lived Intangible Assets

Acquisition of Abbreviated New Drug Applications

In April 2018, we entered into an agreement with Impax Laboratories, Inc. (now Amneal Pharmaceuticals, Inc., or “Amneal”) to purchase the approved ANDAs for three previously-commercialized generic drug products, the approved ANDAs for two generic drug products that have not yet been commercialized, the development package for one generic drug product, a license, supply, and distribution agreement for a generic drug product with an ANDA that is pending approval, and certain manufacturing equipment required to manufacture one of the products, for $2.3 million in cash up front. The transaction closed in May 2018 and we made the $2.3 million payment using cash on hand. We also capitalized $0.1 million of costs directly related to the transaction. We accounted for this transaction as an asset purchase. The $1.0 million acquired ANDA intangible assets are being amortized in full over their estimated useful lives of 10 years. Please see Note 8 for further details regarding the transaction.

Acquisition of New Drug Applications and Product Rights

In December 2017, we entered into an agreement with AstraZeneca AB and AstraZeneca UK Limited to purchase the right, title, and interest in the NDAs and the U.S. rights to market Atacand, Atacand HCT, Arimidex, and Casodex, for $46.5 million in cash. We also entered into a license agreement for use of these trademarks in the U.S. We made the $46.5 million cash payment with funds from our Term Loan (Note 3). We also capitalized $0.2 million of costs directly related to the asset purchase. We accounted for this transaction as an asset purchase. The $46.7 million product rights assets are being amortized in full over their estimated useful lives of 10 years. Please see Note 8 for further details regarding the transaction.

In April 2016, we purchased the rights, title, and interest in the NDA for Inderal LA, as well as certain documentation, trademark rights, and finished goods from Cranford Pharmaceuticals, LLC for $60.0 million in cash up front and milestone payments based on future gross profits from sales of products under the NDA. We made the $60.0 million upfront cash payment using cash on hand, capitalized $0.3 million of costs directly related to the transaction, and recognized $3.9 million of minimum milestone payments for a total purchase price of $64.2 million. We accounted for this transaction as an asset purchase and the resultant $52.4 million NDA asset is being amortized in full over its estimated useful life of 10 years. The resultant $0.6 million non-compete agreement associated with the transaction is being amortized in full over its estimated useful life of seven years.

In conjunction with our 2013 merger with BioSante (the “Merger”), we acquired a testosterone gel product that was licensed to Teva (the “Testosterone Gel NDA”) and this product was assigned an intangible asset value of $10.9 million in accounting for the Merger. In May 2015, Teva transferred the rights of the product back to ANI. In exchange, we will pay Teva a royalty of up to $5.0 million, at a rate of 5% of the consideration we receive as a result of commercial sale of the product. We assessed the value of the Testosterone Gel NDA under the new arrangement and determined that the net asset value was recoverable as of the May 2015 transfer date and subsequent balance sheet dates. We began the commercialization process for the product during the second half of 2015 and it continued throughout 2016. In late 2016, we determined that the development and manufacturing costs required to commercialize the product had increased and would pose a significant barrier to commercializing the product ourselves. Generic competition in the testosterone replacement market had increased substantially by the end of 2016, leading to significant decreases in pricing for the product. In the fourth quarter, management began putting forth efforts to sell the Testosterone Gel NDA rather than commercialize it ourselves. As a result of all these factors, in the fourth quarter of 2016, we determined that the facts and circumstances indicated that the asset could be impaired. We performed an impairment assessment, which indicated that the fair value of the asset was lower than the carrying value. We determined the fair value of the Testosterone Gel NDA by using a discounted cash flows model. As a result of this assessment, we recorded an impairment of $6.7 million in the year ended December 31, 2016. In addition, the remaining $0.9 million asset was recorded as a short-term asset held for sale as of December 31, 2016 in the prepaid expenses and other assets caption in the accompanying consolidated balance sheets. Throughout 2017, we continued to attempt to sell the Testosterone Gel NDA and were unable to complete a sale. As a result, in the fourth quarter of 2017, we determined that the asset could be impaired. After performing an impairment assessment, which indicated that the fair value of the asset was lower than the carrying value, we recorded an additional impairment of $0.9 million in the year ended December 31, 2017, writing off the asset in its entirety.

Marketing and Distribution Rights

The components of net definite-lived intangible assets are as follows:

(in thousands)	December 31, 2018					December 31, 2017					Weighted Average
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization			Amortization Period
Acquired ANDA intangible assets	$	46,194	$	(17,093	)	$	42,076	$	(12,592	)	10.0 years
NDAs and product rights		230,974		(62,222	)		230,974		(37,091	)	10.0 years
Marketing and distribution rights		10,423		(7,051	)		11,042		(5,087	)	4.7 years
Non-compete agreement		624		(245	)		624		(156	)	7.0 years
	$	288,215	$	(86,611	)	$	284,716	$	(54,926	)

Definite-lived intangible assets are stated at cost, net of amortization, generally using the straight-line method over the expected useful lives of the intangible assets. In the case of the Inderal XL and InnoPran XL asset purchases, because we anticipate that the acquired assets will provide a greater economic benefit in the earlier years, we are amortizing 80% of the value of the intangible assets over the first five years of useful lives of the assets and amortizing the remaining 20% of the value of the intangible assets over the second five years of useful lives of the assets. Amortization expense was $31.7 million, $26.7 million, and $21.4 million for the years ended December 31, 2018, 2017, and 2016, respectively.

We test for impairment of definite-lived intangible assets when events or circumstances indicate that the carrying value of the assets may not be recoverable. No impairment losses related to intangible assets were recognized in the year ended December 31, 2018. We recorded impairments of $0.9 million and $6.7 million in the years ended December 31, 2017 and 2016, respectively, in relation to the Testosterone Gel NDA. No events or circumstances arose in 2018, 2017, or 2016 that indicated that the carrying value of any of our other definite-lived intangible assets may not be recoverable.

Expected future amortization expense is as follows for the years ending December 31:

(in thousands)
2019	$	31,761
2020		31,279
2021		29,833
2022		26,428
2023		26,360
2024 and thereafter		55,943
Total	$	201,604

FAIR VALUE DISCLOSURES

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE DISCLOSURES

8. FAIR VALUE DISCLOSURES

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of observability of inputs used in measuring fair value.

The inputs used in measuring the fair value of cash and cash equivalents are considered to be Level 1 in accordance with the three-tier fair value hierarchy. The fair market values are based on period-end statements supplied by the various banks and brokers that held the majority of our funds. The fair value of short-term financial instruments (primarily accounts receivable, prepaid expenses, accounts payable, accrued expenses, and other current liabilities) approximate their carrying values because of their short-term nature. While our Notes are recorded on our consolidated balance sheets at their net carrying value of $112.5 million as of December 31, 2018, the Notes are being traded on the bond market and their full fair value is $119.5 million, based on their closing price on December 31, 2018, a Level 1 input. The Term Loan bears an interest rate that fluctuates with the changes in LIBOR and, because the variable interest rates approximate market borrowing rates available to us, we believe the $72.2 million carrying value of the Term Loan approximated its fair value at December 31, 2018.

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Our contingent value rights (“CVRs”), which were granted coincident with our merger with BioSante and expire in June 2023, are considered to be contingent consideration and are classified as liabilities. As such, the CVRs were recorded as purchase consideration at their estimated fair value, using Level 3 inputs, and are marked to market each reporting period until settlement. The fair value of CVRs is estimated using the present value of management’s projection of the expected payments pursuant to the terms of the CVR agreement, which is the primary unobservable input. If our projection or expected payments were to increase substantially, the value of the CVRs could increase as a result. The present value of the liability was calculated using a discount rate of 15%. We determined that the fair value of the CVRs was immaterial as of December 31, 2018 and 2017. We also determined that the changes in such fair value were immaterial for the years ended December 31, 2018, 2017, and 2016.

In April 2018, we entered into an interest rate swap arrangement (Note 4), with Citizens Bank, N.A. to manage our exposure to the variable interest rate on our previous Term Loan. The notional amount of this interest rate swap was set to match the balance of our previous Term Loan. The fair value of our interest rate swap was estimated based on the present value of projected future cash flows using the LIBOR forward rate curve. The model used to value the interest rate swap included inputs of readily observable market data, a Level 2 input.

In December 2018, we refinanced our previous Credit Agreement and, as part of that refinancing, extended the maturity of our $72.2 million secured term loan balance to December 2023. At the same time, we closed out the original interest rate swap and entered into a new interest rate swap arrangement (Note 4) to manage our exposure to the variable interest rate on our Term Loan (Note 3). The notional amount of our interest rate swap is set to match the balance of our Term Loan. Both the notional amount of the interest rate swap and the balance of our Term Loan were $72.2 million as of December 31, 2018. The fair value of our interest rate swap is estimated based on the present value of projected future cash flows using the LIBOR forward rate curve. The model used to value the interest rate swap includes inputs of readily observable market data, a Level 2 input. As described in detail in Note 4, the fair value of the interest rate swap was a $0.5 million liability at December 31, 2018.

The following table presents our financial assets and liabilities accounted for at fair value on a recurring basis as of December 31, 2018 and December 31, 2017, by level within the fair value hierarchy:

(in thousands)
Description	Fair Value at December 31, 2018		Level 1		Level 2		Level 3
Assets
Interest rate swap	$	-	$	-	$	-	$	-

Liabilities
Interest rate swap	$	496	$	-	$	496	$	-
CVRs	$	-	$	-	$	-	$	-

Description

Fair Value at

December 31, 2017

Level 1

Level 2

Level 3

Assets

Interest rate swap

Liabilities

Interest rate swap

CVRs

Financial Liabilities Measured at Fair Value on a Non-Recurring Basis

In December 2014, we issued $143.8 million of Notes (Note 3). In December 2018, we repurchased $25.0 million of our outstanding Notes. At the same time, we unwound a corresponding portion of bond hedge and warrant, which are described in further detail below. As a result of unwinding this portion of the bond hedge and warrant, we received a net amount of $0.4 million. Because we have the option to cash settle the potential conversion of the Notes in cash, we separated the embedded conversion option feature from the debt feature and account for each component separately, based on the fair value of the debt component assuming no conversion option. The calculation of the fair value of the debt component required the use of Level 3 inputs, and was determined by calculating the fair value of similar non-convertible debt, using a theoretical interest rate of 9%. The theoretical interest rate was determined from market comparables to estimate what the interest rate would have been if there was no conversion option embedded in the Notes. The fair value of the embedded conversion option was calculated using the residual value method and is classified as equity.

A portion of the offering proceeds was used to simultaneously enter into “bond hedge” (or purchased call) and “warrant” (or written call) transactions with an affiliate of one of the offering underwriters (Note 3). The exercise price of the bond hedge is $69.48 per share, with an underlying 1,709,002 common shares remaining as of December 31, 2018; the exercise price of the warrant is $96.21 per share of our common stock, also with an underlying 1,709,002 common shares remaining as of December 31, 2018. We calculated the fair value of the bond hedge based on the price we paid to purchase the call. We calculated the fair value of the warrant based on the price at which the affiliate purchased the warrants from us.

Non-Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

We have no non-financial assets and liabilities that are measured at fair value on a recurring basis.

Non-Financial Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis

In the fourth quarter of 2016, the facts and circumstances surrounding our testosterone gel NDA indicated that the asset could be impaired. The Testosterone Gel NDA intangible asset was initially acquired as part of the Merger, when we acquired a testosterone gel product that was licensed to Teva. This product was assigned an intangible asset value of $10.9 million in accounting for the Merger. In May 2015, Teva transferred the rights of the product back to ANI. In exchange, we will pay Teva a royalty of up to $5.0 million, at a rate of 5% of the consideration we receive as a result of commercial sale of the product. We assessed the value of the Testosterone Gel NDA under the new arrangement and determined that the net asset value was recoverable as of the May 2015 transfer date and subsequent balance sheet dates. We began the commercialization process for the product during the second half of 2015 and it continued throughout 2016. In late 2016, we determined that the development and manufacturing costs required to commercialize the product had increased and would pose a significant barrier to commercializing the product ourselves. Generic competition in the testosterone replacement market had increased substantially by the end of 2016, leading to significant decreases in pricing for the product. In the fourth quarter, management began putting forth efforts to sell the Testosterone Gel NDA rather than commercialize it ourselves. As a result of all these factors, in the fourth quarter of 2016, we determined that the facts and circumstances indicated that the asset could be impaired. We performed an impairment assessment, which indicated that the fair value of the asset was lower than the carrying value. We determined the fair value of the Testosterone Gel NDA by using a discounted cash flows model. Due to the uncertainty and risk regarding the potential commercialization of the testosterone gel NDA, we used a discount rate of 30% in our valuation. As a result of this assessment, we recorded an impairment of $6.7 million in the year ended December 31, 2016. We also determined in the fourth quarter of 2016 that the asset met the criteria for being held for sale. As of December 31, 2016, the Testosterone Gel NDA was recorded as a short-term asset held for sale in the prepaid expenses and other assets caption in the accompanying consolidated balance sheets at $0.9 million, which was the fair value of the asset less estimated costs to sell. Throughout 2017, we continued to attempt to sell the Testosterone Gel NDA and were unable to complete a sale. As a result, in the fourth quarter of 2017, we determined that the asset could be impaired. After performing an impairment assessment, which indicated that the fair value of the asset was lower than the carrying value, we recorded an additional impairment of $0.9 million in the year ended December 31, 2017, writing off the asset in its entirety. No events or circumstances arose in 2017 or 2018 that indicated that the carrying value of any of our other definite-lived intangible assets may not be recoverable.

We measure our long-lived assets, including property, plant and equipment, intangible assets and goodwill, at fair value on a non-recurring basis. These assets are recognized at fair value when they are deemed to be other-than-temporarily impaired. No such fair value impairment was recognized in the year ended December 31, 2018.

In April 2018, we entered into an agreement with Impax Laboratories, Inc. (now Amneal) to purchase the approved ANDAs for three previously-commercialized generic drug products, the approved ANDAs for two generic drug products that have not yet been commercialized, the development package for one generic drug product, a license, supply, and distribution agreement for a generic drug product with an ANDA that is pending approval, and certain manufacturing equipment required to manufacture one of the products, for $2.3 million in cash (Note 7). At the same time, we entered into a supply agreement with Amneal under which we may elect to purchase the finished goods for one of the products for up to 17 months beginning October 1, 2019, under certain conditions. If we do elect to purchase the finished goods from Amneal for this period, we may be required to pay a milestone payment of up to $10.0 million upon launch, depending on the number of competitors selling the product at the time of launch. This milestone payment was determined to be contingent consideration and will be recognized when the contingency is resolved. When one of the approved ANDAs that have not yet been commercialized is launched, we could be required to pay a milestone of $25.0 million to Teva Pharmaceuticals USA, Inc. (“Teva”), depending on the number of competitors selling the product at the time of launch. In addition, depending on the number of competitors selling the product one year after the launch date, we could be required to pay a second milestone of $15.0 million to Teva. These milestones are determined to be contingent liabilities and will be recognized if and when they are both estimable and probable. Because we believe that neither milestone is both estimable and probable, we did not record a contingent liability for the milestones. We made the $2.3 million cash payment using cash on hand and capitalized $0.1 million of costs directly related to the asset purchase. We accounted for this transaction as an asset purchase. The $1.0 million acquired ANDA intangible assets were recorded at their relative fair value, determined using Level 3 unobservable inputs. In order to determine the fair value of the acquired ANDA intangible assets, we used the present value of the estimated cash flows related to the approved ANDAs, using discount rates of 10 to 15%. The acquired ANDAs will be amortized in full over their 10-year useful lives, and will be tested for impairment when events or circumstances indicate that the carrying value of the assets may not be recoverable. The $58 thousand of manufacturing equipment used to manufacture one of the products was recorded at its relative fair value, based on the estimated net book value of the equipment purchased. The equipment will be amortized in full over its 5-year useful life, and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to December 31, 2018 and therefore no impairment loss was recognized for the year ended December 31, 2018. The $1.3 million of in-process research and development related to products with significant further work required in order to commercialize the products, and for which there is no alternative future use. The in-process research and development was recorded at its relative fair value, determined using Level 3 unobservable inputs. In order to determine the fair value of the in-process research and development, we used the present value of the estimated cash flows related to the products, using a discount rate of 75%, reflective of the higher risk associated with these products. As the transaction was accounted for as an asset purchase, the $1.3 million of in-process research and development was immediately recognized as research and development expense.

In April 2018, we entered into an agreement with IDT Australia, Limited to purchase the ANDAs for 23 previously-marketed generic drug products and API for four of the acquired products for $2.7 million in cash and a single-digit royalty on net profits from sales of one of the products (Note 7). We made the $2.7 million cash payment using cash on hand and capitalized $18 thousand of costs directly related to the asset purchase. We accounted for this transaction as an asset purchase. The $2.5 million acquired ANDA intangible assets were recorded at their relative fair value, determined using Level 3 unobservable inputs. In order to determine the fair value of the product rights intangible assets, we used the present value of the estimated cash flows related to the product rights, using discount rates of 10% to 15%. The acquired ANDA intangible assets will be amortized in full over their 10-year useful lives, and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to December 31, 2018 and therefore no impairment loss was recognized for the year ended December 31, 2018. We also recorded $0.2 million of raw materials inventory, measured at fair value. The fair value of the raw materials inventory was determined based on the estimated replacement cost.

In December 2017, we entered into an agreement with AstraZeneca AB and AstraZeneca UK Limited to purchase the right, title, and interest in the NDAs and the U.S. right to market Atacand, Atacand HCT, Arimidex, and Casodex, for $46.5 million in cash (Note 7). We also licensed these trademarks for use in the U.S. We made the $46.5 million cash payment with funds from our Term Loan (Note 3). We also capitalized $0.2 million of costs directly related to the asset purchase. The agreement included a $3.0 million contingent payment due in early 2023 if the annual net sales of the Atacand and Atacand HCT products equals or exceeds certain threshold amounts in 2020, 2021, and 2022. Because we believe that the likelihood of meeting or exceeding the threshold amounts is not probable, we did not record a contingent liability in relation to the agreement. We accounted for this transaction as an asset purchase. The $46.7 million product rights intangible assets were recorded at their relative fair value, determined using Level 3 unobservable inputs. In order to determine the fair value of the product rights intangible assets, we used the present value of the estimated cash flows related to the product rights, using a discount rate of 10%. The product rights will be amortized in full over their 10-year useful lives, and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to December 31, 2018 and therefore no impairment loss was recognized for the years ended December 31, 2017 and 2018.

In February 2017, we entered into an agreement with Cranford Pharmaceuticals, LLC to purchase a distribution license, trademark, and certain finished goods inventory for Inderal XL for $20.2 million in cash (Note 7). We made the $20.2 million cash payment using cash on hand and capitalized $40 thousand of costs directly related to the asset purchase. We accounted for this transaction as an asset purchase. The $15.1 million product rights intangible asset was recorded at its relative fair value, determined using Level 3 unobservable inputs. In order to determine the fair value of the product rights intangible asset, we used the present value of the estimated cash flows related to the product rights, using a discount rate of 10%. The product rights will be amortized in full over its 10-year useful life, and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to December 31, 2018 and therefore no impairment loss was recognized for the years ended December 31, 2017 and 2018. We also recorded $5.0 million of finished goods inventory. The fair value of the finished goods inventory was determined based on the estimated selling price to be generated from the finished goods, less costs to sell, including a reasonable margin.

In February 2017, we entered into an agreement with Holmdel Pharmaceuticals, LP to purchase the NDA, trademark, and certain finished goods inventory for InnoPran XL, including a license to an Orange Book listed patent, for $30.6 million in cash (Note 7). We made the $30.6 million cash payment using $30.0 million of funds from our Line of Credit (Note 3) and $0.6 million of cash on hand. We also capitalized $0.1 million of costs directly related to the asset purchase. We accounted for this transaction as an asset purchase. The $19.0 million product rights intangible asset was recorded at its relative fair value, determined using Level 3 unobservable inputs. In order to determine the fair value of the product rights intangible asset, we used the present value of the estimated cash flows related to the product rights, using a discount rate of 10%. The product rights will be amortized in full over its 10-year useful life, and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to December 31, 2018 and therefore no impairment loss was recognized for the years ended December 31, 2017 and 2018. We also recorded $11.6 million of finished goods inventory. The fair value of the finished goods inventory was determined based on the estimated selling price to be generated from the finished goods, less costs to sell, including a reasonable margin.

In April 2016, we purchased the rights, title, and interest in the NDA for Inderal LA, as well as certain documentation, trademark rights, and finished goods from Cranford Pharmaceuticals, LLC for $60.0 million in cash and milestone payments based on future gross profits from sales of products under the NDA (Note 7). In addition, at closing, we transferred $5.0 million to an escrow account as security for future milestone payments. This escrow account balance is not expected to be released in less than one year and is included in restricted cash in our accompanying consolidated balance sheets as of December 31, 2016. We made the $60.0 million upfront cash payment using cash on hand, capitalized $0.3 million of costs directly related to the transaction, and recognized $3.9 million of minimum milestone payments for a total purchase price of $

64.2

million. We accounted for this transaction as an asset purchase. These assets were recorded at their relative fair values, which were determined based on Level 3 unobservable inputs. In order to determine the fair value of the NDA, we used the present value of the estimated cash flows related to the product rights, using a discount rate of 12%. The $52.4 million NDA will be amortized in full over its 10-year useful life, and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to December 31, 2016 and therefore no impairment loss was recognized for the year ended December 31, 2016. We recorded $10.9 million of finished goods. The fair value of the finished goods was determined based on the estimated sales to be generated from the finished goods, less costs to sell, including a reasonable margin. We recorded the $3.9 million of minimum milestone payments as accrued royalties. We recorded $0.6 million for the non-compete agreement associated with the transaction. In order to determine the fair value of the non-compete agreement, we used the probability-weighted lost cash flows method, using a discount rate of 10%. The non-compete agreement will be amortized in full over its seven-year useful life, and will be tested for impairment when events or circumstances indicate that the carrying value of the asset may not be recoverable. No such triggering events were identified during the period from the date of acquisition to December 31, 2018 and therefore no impairment loss was recognized for the years ended December 31, 2016, 2017, and 2018. We also recorded a $0.3 million prepaid balance related to a partially paid purchase order for inventory.

In January 2016, we purchased from Merck Sharp & Dohme B.V. the NDAs for two previously marketed generic drug products for $75.0 million in cash and a percentage of future net sales from product sales (Note 7). In addition, we capitalized $0.3 million in legal costs directly related to the transaction. We accounted for this transaction as an asset purchase. These assets were recorded at their relative fair values, which were determined based on Level 3 unobservable inputs. In order to determine the fair value of the NDAs, we used the present value of the estimated cash flows related to the product rights, using a discount rate of 10%. The NDAs will be amortized in full over their 10-year useful lives, and will be tested for impairment when events or circumstances indicate that the carrying value of the assets may not be recoverable. No such triggering events were identified during the period from the date of acquisition to December 31, 2018 and therefore no impairment loss was recognized for the years ended December 31, 2016, 2017, and 2018.

In January 2016, we purchased from H2-Pharma, LLC the rights to market, sell, and distribute the authorized generic of Lipofen® and a generic hydrocortisone rectal cream product, along with the rights to an early-stage development project, for total consideration of $10.0 million (Note 7). The consideration consisted of a cash payment of $8.8 million and the assumption of $1.2 million in existing royalties owed on the acquired rights. In addition, we capitalized $42 thousand of costs directly related to the transaction. We accounted for this transaction as an asset purchase. These assets were recorded at their relative fair values, which were determined based on Level 3 unobservable inputs. In order to determine the fair value of the rights for purposes of purchase price allocation, we used the present value of the estimate cash flows related to the product rights, using a discount rate of 10%. No value was ascribed to the early-stage development project because the development is still at the preliminary stage, with no expenses incurred or research performed to date. The marketing and distribution rights will be amortized in full over their average estimated useful lives of approximately four years, and will be tested for impairment when events or circumstances indicate that the carrying value of the assets may not be recoverable. No such triggering events were identified from the date of acquisition to December 31, 2018 and therefore no impairment loss was recognized for the years ended December 31, 2016, 2017, and 2018.

- 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

STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2018

Stockholders' Equity Note [Abstract]

STOCKHOLDER'S EQUITY

9. STOCKHOLDERS’ EQUITY

Authorized shares

We are authorized to issue up to 33.3 million shares of common stock with a par value of $0.0001 per share, 0.8 million shares of class C special stock with a par value of $0.0001 per share, and 1.7 million shares of undesignated preferred stock with a par value of $0.0001 per share at December 31, 2018.

There were 11.9 million and 11.7 million shares of common stock issued and outstanding as of December 31, 2018 and 2017, respectively.

There were 11 thousand shares of class C special stock issued and outstanding as of December 31, 2018 and 2017. Each share of class C special stock entitles its holder to one vote per share. Each share of class C special stock is exchangeable, at the option of the holder, for one share of our common stock, at an exchange price of $90.00 per share, subject to adjustment upon certain capitalization events. Holders of class C special stock are not entitled to receive dividends or to participate in the distribution of our assets if we were to liquidate, dissolve, or wind-up the company. The holders of class C special stock have no cumulative voting, preemptive, subscription, redemption, or sinking fund rights.

There were no shares of undesignated preferred stock outstanding as of December 31, 2018 and 2017.

Stock Repurchase Program

In October 2015, our Board of Directors authorized a program to repurchase up to $25.0 million of our outstanding common stock through December 31, 2016. The authorization allowed for repurchases to be conducted through open market or privately negotiated transactions. Shares acquired under the stock repurchase program were returned to the status of authorized but unissued shares of common stock.

In January 2016, we purchased 65 thousand shares under the stock repurchase program for $2.5 million. The repurchased shares were returned to the status of authorized but unissued shares of common stock. This program terminated on December 31, 2016.

Warrants

Warrants to purchase an aggregate of 1.7 million shares of our common stock were outstanding and exercisable as of December 31, 2018:

Issue Date	Number of Underlying Shares of Common Stock (in thousands)		Per Share Exercise Price		Expiration Date
December 4, 2014		1,486	$	96.21	March 1, 2020
December 5, 2014		223	$	96.21	March 1, 2020

All outstanding warrants are classified as equity. No warrants were granted, exercised, or expired unexercised during the years ended December 31, 2018, 2017 and 2016.

STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

10. STOCK-BASED COMPENSATION

In July 2016, we commenced administration of the ANI Pharmaceuticals, Inc. 2016 Employee Stock Purchase Plan, which was approved by shareholders in our May 25, 2016 annual shareholder meeting. The Board of Directors and shareholders approved a maximum of 0.2 million shares of common stock, which were reserved and made available for issuance under the ESPP.

Under the ESPP, participants can purchase shares of our stock at a 15% discount. We issued five thousand, four thousand, and one thousand shares in the years ended December 31, 2018, 2017, and 2016, respectively. In the year ended December 31, 2018, we recognized $11 thousand, $16 thousand, and $75 thousand of stock-based compensation expense related to the ESPP in cost of sales, research and development, and sales, general, and administrative expense in our consolidated statements of operations, respectively. In the year ended December 31, 2017, we recognized $6 thousand, $1 thousand, and $61 thousand of stock-based compensation expense related to the ESPP in cost of sales, research and development, and sales, general, and administrative expense in our consolidated statements of operations, respectively. In the year ended December 31, 2016, we recognized $2 thousand and $23 thousand of stock-based compensation expense related to the ESPP in cost of sales and sales, general, and administrative expense in our consolidated statements of operations, respectively.

All equity-based service awards are granted under the ANI Pharmaceuticals, Inc. Amended and Restated 2008 Stock Incentive Plan (the “2008 Plan”). As of December 31, 2018, 0.6 million shares of our common stock remained available for issuance under the 2008 Plan.

We measure the cost of equity-based service awards based on the grant-date fair value of the award. The cost is recognized over the period during which an employee is required to provide service in exchange for the award or the requisite service period. We recognize stock-based compensation expense ratably over the vesting periods of the awards.

The following table summarizes stock-based compensation expense incurred under the 2008 Plan and included in our consolidated statements of operations:

	Years Ended December 31,
(in thousands)	2018		2017		2016
Cost of sales	$	87	$	86	$	60
Research and development		771		677		112
Selling, general, and administrative		5,822		5,259		5,870
	$	6,680	$	6,022	$	6,042

We recognized income tax benefits of $1.2 million, $0.6 million, and $1.0 million for stock-based compensation-related tax deductions in our 2018, 2017, and 2016 consolidated statements of operations, respectively.

Separation Agreement

On April 26, 2016, we entered into a Separation Agreement and Release (the “Separation Agreement”) with our former Chief Financial Officer (the “Former Officer”), who resigned effective May 6, 2016. Under the Separation Agreement, 25,167 stock options previously granted to the Former Officer vested on May 6, 2016. In addition, 4,050 restricted stock awards and 2,000 stock options previously granted to the Former Officer vested on March 15, 2017. These actions were accounted for as a modification of the underlying awards and the full expense for the modified awards was recorded in the second quarter 2016. In the second quarter of 2016, we recorded $0.9 million of stock-based compensation expense, net of forfeitures, in relation to the Separation Agreement. In the second quarter 2016, we recognized $0.4 million of additional expense related to the Separation Agreement and transition that was not related to stock-based compensation. All expenses related to the Separation Agreement and transition were recognized in the second quarter 2016.

Stock Options

Outstanding stock options granted to employees and consultants generally vest over a period of four years and have 10-year contractual terms. Outstanding stock options granted to non-employee directors generally vest over a period of one to four years and have 10-year contractual terms. Upon exercise of an option, we issue new shares of our common stock or issue shares from treasury stock.

For 2018, 2017, and 2016, the fair value of each option grant was estimated using the Black-Scholes option-pricing model, using the following assumptions:

	Years Ended December 31,
	2018	2017	2016
Expected option life (years)	5.48 - 6.25	5.33 - 7.00	5.50 - 6.25
Risk-free interest rate	2.64% - 2.93%	1.93% - 2.33%	1.14% - 1.55%
Expected stock price volatility	55.1% - 60.6%	50.3% - 57.4%	49.4% - 51.7%
Dividend yield	—	—	—

We use the simplified method to estimate the life of options. The risk-free interest rate used is the yield on a U.S. Treasury note as of the grant date with a maturity equal to the estimated life of the option. We calculated an estimated volatility rate based on the closing prices of several competitors that manufacture similar products. We have not issued a cash dividend in the past nor do we have any current plans to do so in the future; therefore, an expected dividend yield of zero was used.

In 2017, we granted options to two consultants. We used the Black-Scholes option-pricing model to determine the fair value of the option grants and the valuation of the grants were marked to market through December 31, 2018. In June 2018, the FASB issued guidance simplifying the accounting for nonemployee stock-based compensation awards (Note 1). We will be adopting this guidance as of January 1, 2019, therefore the nonemployee awards will be measured at fair value as of the adoption date, and no longer marked to market.

A summary of stock option activity under the 2008 Plan during the years ended December 31, 2018, 2017, and 2016 is presented below:

(in thousands, except per share and remaining term data)	Option Shares			Weighted Average Exercise Price		Weighted Average Grant- date Fair Value		Weighted Average Remaining Term (years)		Aggregate Intrinsic Value
Outstanding December 31, 2015		474		$	29.40				8.2	$	10,136
Granted		265			45.60	$	22.45
Exercised		(127	)		11.79						5,837
Forfeited		(32	)		47.84
Expired		(2	)		139.32
Outstanding December 31, 2016		578		$	39.28				8.2	$	12,928
Granted		207			51.66	$	27.04
Exercised		(13	)		15.92						542
Forfeited		(5	)		53.29
Expired		-			-
Outstanding December 31, 2017		767		$	42.93				7.8	$	16,785
Granted		156			57.60	$	31.76
Exercised		(142	)		19.47						5,863
Forfeited		(18	)		60.17
Expired		(4	)		74.53
Outstanding at December 31, 2018		759		$	49.74				7.6	$	2,221
Exercisable at December 31, 2018		326		$	45.88				6.6	$	1,949

As of December 31, 2018, there was $8.6 million of total unrecognized compensation cost related to non-vested stock options granted under the 2008 Plan. The cost is expected to be recognized over a weighted-average period of 2.4 years. During the year ended December 31, 2018, we received $2.8 million in cash from the exercise of stock options and recorded a $0.6 million tax benefit related to these exercises. During the year ended December 31, 2017, we received $0.2 million in cash from the exercise of stock options and recorded a $0.2 million tax benefit related to these exercises. During the year ended December 31, 2016, we received $1.5 million in cash from the exercise of stock options and recorded a $0.7 million tax benefit related to these exercises.

Restricted Stock Awards

Restricted stock awards (“RSAs”) granted to employees generally vest over a period of four years. RSAs granted to non-officer directors generally vest over a period of one year.

Shares of our common stock delivered to employees and directors will be unrestricted upon vesting. During the vesting period, the recipient of the restricted stock has full voting rights as a stockholder and would receive dividends, if declared, even though the restricted stock remains subject to transfer restrictions and will generally be forfeited upon termination of the officer prior to vesting. The fair value of each RSA is based on the market value of our stock on the date of grant.

A summary of RSA activity under the Plan during the years ended December 31, 2018, 2017, and 2016 is presented below:

(in thousands, except per share and remaining term data)	Shares			Weighted Average Grant Date Fair Value		Weighted Average Remaining Term (years)
Unvested at December 31, 2015		63		$	42.72		2.2
Granted		38			40.59
Vested		(30	)		33.89
Forfeited		(8	)		46.05
Unvested at December 31, 2016		63		$	45.72		2.2
Granted		50			49.51
Vested		(28	)		44.49
Forfeited		-			-
Unvested at December 31, 2017		85		$	48.34		2.6
Granted		65			58.11
Vested		(33	)		47.34
Forfeited		-			-
Unvested at December 31, 2018		117		$	54.04		2.1

As of December 31, 2018, there was $4.7 million of total unrecognized compensation cost related to non-vested RSAs granted under the Plan, which is expected to be recognized over a weighted-average period of 2.1 years.

INCOME TAXES

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

11. INCOME TAXES

On August 6, 2018, ANI Canada acquired all the issued and outstanding equity interests of WellSpring in a non-taxable transaction (Note 2). Following the consummation of the transaction, WellSpring was merged into ANI Canada. For U.S. Federal and state income tax purposes, ANI Canada is not part of ANI’s consolidated group; rather, ANI Canada is subject to income taxes only in Canada and solely based on its stand-alone operations. The foreign current and foreign deferred provisions (benefits) below represent ANI Canada’s tax provision (benefit) from the Canadian taxing jurisdictions.

As part of purchase accounting, as of the August 6, 2018 acquisition date the Company established net deferred tax assets relating to differences in the book bases (determined based on fair value purchase accounting) and tax bases (determined based on the carryover nature of the nontaxable transaction) of ANI Canada’s assets and liabilities of approximately $1.7 million. As discussed below, a valuation allowance was established for the full amount of ANI Canada’s net deferred tax assets based on the Company’s assessment of the eventual realization of those assets.

Our total provision for income taxes consists of the following for the years ended December 31, 2018, 2017, and 2016:

(in thousands)	2018			2017			2016

Current income tax provision:
Federal	$	7,985		$	13,175		$	11,717
State		1,751			690			1,321
Foreign		-			-			-
Total		9,736			13,865			13,038

Deferred income tax (benefit)/provision:
Federal		(4,630	)		4,065			(8,387	)
State		(556	)		(556	)		(658	)
Foreign		(214	)		-			-
Total		(5,400	)		3,509			(9,045	)

Change in valuation allowance		221			51			134
Excess tax benefit from stock-based compensation awards		-			-			617

Total provision for income taxes	$	4,557		$	17,425		$	4,744

The difference between our expected income tax provision from applying federal statutory tax rates to the pre-tax income and actual income tax provision relates primarily to the effect of the following:

	As of December 31,
	2018			2017			2016

US Federal statutory rate		21.0	%		35.0	%		35.0	%
State taxes, net of Federal benefit		2.4	%		2.0	%		2.1	%
Foreign taxes		26.5	%		-	%		-	%
Impact of Tax Cuts and Jobs Act		-	%		81.9	%		-	%
International tax structure impacts		-	%		-	%		23.3	%
Domestic production activities deduction		-	%		(8.8	)%		(14.4	)%
Change in valuation allowance		(26.5	)%		-	%		1.6	%
Stock-based compensation – no windfall tax benefits		(0.7	)%		1.0	%		5.7	%
Stock-based compensation – windfall tax benefit		(1.1	)%		(0.2	)%		-	%
Change in tax rates and other		-	%		(4.3	)%		1.4	%
Total income tax provision/(benefit)		21.6	%		106.6	%		54.7	%

In 2017 our effective tax rate was impacted by the revaluation of our deferred tax assets and liabilities at the lower 21% U.S. corporate tax rate, as proscribed by the Tax Cuts and Jobs Act, which was enacted on December 22, 2017 and lowered the U.S. corporate tax rate from 35% to 21%, which began in 2018. We measure our deferred tax assets and liabilities using the tax rates that we believe will apply in the years in which the temporary differences are expected to be recovered or paid. As a result, we remeasured our deferred tax assets and deferred tax liabilities to reflect the reduction in the enacted U.S. corporate income tax rate, resulting in a net $13.4 million increase in income tax expense for the year ended December 31, 2017.

Deferred income taxes reflect the net tax effects of differences between the bases of assets and liabilities for financial reporting and income tax purposes. Our deferred income tax assets and liabilities consisted of the following:

(in thousands)	As of December 31,
	2018			2017
Deferred tax assets:
Accruals and advances	$	7,748		$	5,254
Bond hedge		3,019			5,617
Accruals for chargebacks and returns		7,132			4,927
Inventory		1,228			857
Intangible asset		9,393			6,355
Net operating loss carryforwards		5,604			3,029
Other		4,682			3,030
Total deferred tax assets	$	38,806		$	29,069

Deferred tax liabilities:
Depreciation	$	(4,437	)	$	(1,110	)
Debt discount		(1,316	)		(3,256	)
Intangible assets		(11	)		(11	)
Other		(2,813	)		(1,699	)
Total deferred tax liabilities	$	(8,577	)	$	(6,076	)
Valuation allowance		(2,265	)		(326	)
Deferred tax assets, net of deferred tax liabilities and valuation allowance	$	27,964		$	22,667

As of December 31, 2018, we had federal net operating loss carryforwards of approximately $12.1 million, all of which arose as a result of the Merger and, if not used, expire in annual increments through 2033. The utilization of the net operating loss carryforwards are limited in future years as prescribed by Section 382 of the U.S. Internal Revenue Code; our current annual limitation of the federal net operating loss is approximately $0.8 million per year. Additionally, as of December 31, 2018 we have total net operating losses in Canada of CAD14.1 million that begin expiring in 2035.

We are required to establish a valuation allowance for deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We consider the projected future taxable income and tax planning strategies in making this assessment. Our net deferred tax assets in the Canadian jurisdiction are fully valued due to cumulative losses in that jurisdiction. As of December 31, 2018, we have provided a full valuation allowance against ANI Canada’s net deferred tax assets of $

1.9

million. As of December 31, 2018, and 2017, deferred tax assets in certain state jurisdictions are also fully valued against certain state net operating loss carryforwards.

We are subject to income taxes in numerous jurisdictions in the U.S. and in Canada. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. We establish liabilities for tax-related uncertainties based on estimates of whether, and the extent to which, additional taxes will be due. These liabilities are established when we believe that certain positions might be challenged despite our belief that our tax return positions are fully supportable. We adjust these liabilities in light of changing facts and circumstances, such as the outcome of a tax audit. The provision for income taxes includes the impact of changes to the liability that is considered appropriate. We identified no material uncertain tax positions as of December 31, 2018 and 2017.

We are subject to income tax audits in all jurisdictions for which we file tax returns. Tax audits by their nature are often complex and can require several years to complete. Neither ANI Pharmaceuticals, Inc. nor any of its subsidiaries is currently under audit in any jurisdiction. All of our income tax returns remain subject to examination by tax authorities due to the availability of net operating loss carryforwards.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

12. COMMITMENTS AND CONTINGENCIES

Vendor Purchase Minimums

We have supply agreements with four vendors that include purchase minimums. Pursuant to these agreements, we will be required to purchase a total of $10.1 million of API from these four vendors during the year ended December 31, 2019.

Government Regulation

Our products and facilities are subject to regulation by a number of federal and state governmental agencies. The FDA, in particular, maintains oversight of the formulation, manufacture, distribution, packaging, and labeling of all of our products. The Drug Enforcement Administration ("DEA") maintains oversight over our products that are considered controlled substances.

Unapproved Products

Two of our products, Esterified Estrogen with Methyltestosterone (“EEMT”) and Opium Tincture, are marketed without approved NDAs or ANDAs. During the years ended December 31, 2018, 2017, and 2016, net revenues for these products total

ed $

24.9

mil

lion, $27.6 million, and $34.3 million, respectively.

The FDA's policy with respect to the continued marketing of unapproved products is stated in the FDA's September 2011 Compliance Policy Guide Sec. 440.100 titled “Marketed New Drugs without Approved NDAs or ANDAs.” Under this policy, the FDA has stated that it will follow a risk-based approach with regard to enforcement against such unapproved products. The FDA evaluates whether to initiate enforcement action on a case-by-case basis, but gives higher priority to enforcement action against products in certain categories, such as those marketed as unapproved drugs with potential safety risks or that lack evidence of effectiveness. We believe that, so long as we comply with applicable manufacturing standards, the FDA will not take action against us under the current enforcement policy. There can be no assurance, however, that the FDA will continue this policy or not take a contrary position with any individual product or group of products. If the FDA were to take a contrary position, we may be required to seek FDA approval for these products or withdraw such products from the market. If we decide to withdraw the products from the market, our net revenues for generic pharmaceutical products would decline materially, and if we decide to seek FDA approval, we would face increased expenses and might need to suspend sales of the products until such approval was obtained, and there are no assurances that we would receive such approval.

In addition, one group of products that we manufacture on behalf of a contract customer is marketed by that customer without an approved NDA. If the FDA took enforcement action against such customer, the customer may be required to seek FDA approval for the group of products or withdraw them from the market. Our contract manufacturing revenues for the group of unapproved products for the years ended December 31, 2018, 2017, and 2016 were $2.0 million, $2.0 million, and $1.5 million, respectively.

We received royalties on the net sales of a group of contract-manufactured products, which are marketed by the contract customer without an approved NDA. If the FDA took enforcement action against such customer, the customer may be required to seek FDA approval for the group of products or withdraw them from the market. Our royalties on the net sales of these unapproved products were less than 1% of total revenues for the three years ended December 31, 2018, 2017, and 2016.

Louisiana Medicaid Lawsuit

On September

2013

, the Attorney General of the State of Louisiana filed a lawsuit in Louisiana state court against numerous pharmaceutical companies, including us, under various state laws, alleging that each defendant caused the state’s Medicaid agency to provide reimbursement for drug products that allegedly were not approved by the FDA and therefore allegedly not reimbursable under the federal Medicaid program. The lawsuit relates to three cough and cold prescription products manufactured and sold by our former Gulfport, Mississippi operation, which was sold in September 2010

. Through its lawsuit, the state seeks unspecified damages, statutory fines, penalties, attorneys’ fees, and costs. While we cannot predict the outcome of the lawsuit at this time, we could be subject to material damages, penalties, and fines. We intend to vigorously defend against all claims in the lawsuit.

Civil Action

In November of

2017

, we were served with a complaint filed by Arbor Pharmaceuticals, LLC, in the United States District Court, District of Minnesota. The complaint alleges false advertising and unfair competition in violation of Section

(a) of the

Lanham

Act, Section

1125

(a) of Title

of the United States Code, and Minnesota State law, and seeks injunctive relief and damages. The action is currently in the discovery phase. We intend to defend this action vigorously.

Other Commitments and Contingencies

All manufacturers of the drug

Reglan

and its generic equivalent

metoclopramide

, including ANI, have faced allegations from plaintiffs in various states, including California, New Jersey, and Pennsylvania, claiming bodily injuries as a result of ingestion of

metoclopramide

or its brand name,

Reglan

, prior to the FDA's February 2009

Black Box warning requirement. In August 2012

, we were dismissed with prejudice from all New Jersey complaints. In August 2016

, we settled the outstanding California short form complaints and in February 2018

, we settled the remaining four complaints that were not captured in the

2016

settlement. We consider our exposure to this litigation to be limited due to several factors:

(1)

the only generic

metoclopramide

that we manufactured prior to the implementation of the FDA's warning requirement was an oral solution introduced after May 28, 2008

;

(2)

our market share for the oral solution was a very small portion of the overall

metoclopramide

market; and

(3)

once we received a request for change of labeling from the FDA, we submitted our proposed changes within

days, and such changes were subsequently approved by the FDA.

At the present time, we are unable to assess the likely outcome of the cases in the remaining states. Our insurance company has assumed the defense of this matter and paid all losses in settlement of the California cases. We cannot provide assurances that the outcome of these matters will not have an adverse effect on our business, financial condition, and operating results. Furthermore, like all pharmaceutical manufacturers, we may be exposed to other product liability claims in the future, which could limit our coverage under future insurance policies or cause those policies to become more expensive, which could harm our business, financial condition, and operating results.

Our

ANDA

for Erythromycin

Ethylsuccinate

(“EES”) was originally approved by the FDA on November 27

1978

. We purchased the EES

ANDA

from

Teva

on July 10, 2015

, and subsequently launched EES on September 27, 2016

. In August 2016

, we filed with the FDA to reintroduce this product under a Changes Being Effected in

Days submission (a “CBE-

submission”). Under a CBE-

submission, certain defined changes to an

ANDA

can be made if the FDA does not object in writing within

days. The FDA’s regulations, guidance documents, and historic actions support the filing of a CBE-

for the types of changes that we proposed for our EES

ANDA

. We received no formal written letter from the FDA within

days of the CBE-

submission date, and as such, launched the product in accordance with FDA regulations. On December 16, 2016

, and nearly four months after our CBE-

submission, the FDA sent us a formal written notice that a Prior Approval Supplement (“PAS”) was required for this

ANDA

. Under a PAS, proposed changes to an

ANDA

cannot be implemented without prior review and approval by the FDA. Because we did not receive this notice in the timeframe prescribed by the FDA’s regulations, we believe that our supplemental

ANDA

is valid, and as such continued to market the product. In addition, we filed a PAS which was approved by the FDA on November 2, 2018

On or about September 20, 2017

, the Company and certain of its employees were served with search warrants and/or grand jury subpoenas to produce documents and possibly testify relating to a federal investigation of the generic pharmaceutical industry. The Company has been cooperating and intends to continue cooperating with the investigation. However, no assurance can be given as to the timing or outcome of the investigation.

SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2018

Subsequent Events [Abstract]

Subsequent Events

13. SUBSEQUENT EVENTS

Amendment to Teva Pharmaceuticals Asset Purchase Agreement

In January 2019, we entered into Amendment No. 4 to our Asset Purchase Agreement with Teva Pharmaceuticals

USA, Inc.

(“Teva”). Under the terms of the Purchase Agreement Amendment, all royalty obligations of the Company owed to Teva with respect to products associated with ten ANDAs under the Asset Purchase Agreement shall cease effective as of December 31, 2018. In consideration for the termination of such future royalty obligations, we paid Teva a sum of $16.0 million.

Interest Rate Swap

QUARTERLY FINANCIAL DATA

12 Months Ended

Dec. 31, 2018

Quarterly Financial Data [Abstract]

QUARTERLY FINANCIAL DATA

14. QUARTERLY FINANCIAL DATA (unaudited)

The following table presents unaudited quarterly consolidated operating results for each of our last eight fiscal quarters. The information below has been prepared on a basis consistent with our audited consolidated financial statements.

	2018 Quarters (unaudited)
(in thousands, except per share data)	First			Second			Third			Fourth
Net revenues	$	46,483		$	47,268		$	50,703		$	57,122
Total operating expenses		39,946			40,005			40,589			45,677
Operating income		6,537			7,263			10,114			11,445
Provision for income taxes		(592	)		(726	)		(1,329	)		(1,910	)
Net income	$	2,250		$	2,777		$	5,037		$	5,430
Basic and diluted earnings per share:
Basic earnings per share	$	0.19		$	0.24		$	0.43		$	0.46
Diluted earnings per share	$	0.19		$	0.23		$	0.42		$	0.46

	2017 Quarters (unaudited)
(in thousands, except per share data)	First			Second			Third			Fourth
Net revenues	$	36,628		$	44,764		$	48,164		$	47,286
Total operating expenses		32,003			37,770			38,833			39,907
Operating income		4,625			6,994			9,331			7,379
Provision for income taxes		(523	)		(1,269	)		(1,654	)		(13,979	)
Net income/(loss)	$	1,152		$	2,681		$	4,720		$	(9,629	)
Basic and diluted earnings/(loss) per share:
Basic earnings/(loss) per share	$	0.10		$	0.23		$	0.41		$	(0.83	)
Diluted earnings/(loss) per share	$	0.10		$	0.23		$	0.40		$	(0.83	)

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Organization and Business

Basis of Presentation

Principles of consolidation

Principles of Consolidation

The consolidated financial statements include the accounts of ANI Pharmaceuticals, Inc. and its subsidiaries. All intercompany accounts and transactions are eliminated in consolidation.

Foreign Currency

foreign currencies

was

immaterial for the year ended December 31, 2018. Unless otherwise noted, all references to “$” or “dollar” refer to the U.S. dollar.

Use of Estimates

Comprehensive Income

Comprehensive income, which is reported in the statement of comprehensive income, consists of net income, changes in fair value of our interest rate swap, and other comprehensive income, net of tax.

Credit Concentration

Our customers are primarily wholesale distributors, chain drug stores, group purchasing organizations, and other pharmaceutical companies.

During the year ended December 31, 2018,

three

customers represented approximately

%, and

% of net revenues, respectively. As of December

2018

, accounts receivable from these customers totaled

Vendor Concentration

Revenue Recognition

Description of Business and Summary of Significant Accounting Policies

, in our Annual Report on Form 10-K for the year ended December 31, 2017.

Upon adoption of this new guidance, we recognize revenue using the following steps:

		Identification of the contract, or contracts, with a customer;
		Identification of the performance obligations in the contract;
		Determination of the transaction price, including the identification and estimation of variable consideration;
		Allocation of the transaction price to the performance obligations in the contract; and
		Recognition of revenue when we satisfy a performance obligation.

All revenue recognized in our consolidated statements of operations is considered to be revenue from contracts with customers. The following table depicts the disaggregation of revenue:

Products and Services	Years Ended December 31,
(in thousands)	2018		2017		2016
Sales of generic pharmaceutical products	$	117,451	$	118,437	$	95,201
Sales of branded pharmaceutical products		60,554		50,919		26,443
Sales of contract manufactured products		9,119		7,046		5,537
Royalties from licensing agreements		12,504		-		-
Product development services		1,019		-		-
Other (1)		929		440		1,441
Total net revenues	$	201,576	$	176,842	$	128,622

(1)

Primarily includes laboratory services and royalties on sales of contract manufactured products

Timing of Revenue Recognition	Years Ended December 31,
(in thousands)	2018		2017		2016
Performance obligations transferred at a point in time	$	200,557	$	176,842	$	128,622
Performance obligations transferred over time		1,019		-		-
Total	$	201,576	$	176,842	$	128,622

Revenue from Sales of Generic and Branded Pharmaceutical Products

Revenue from Distribution Agreements

Chargebacks

Chargeback credits are calculated as follows:

		A change in customer mix
		A change in negotiated terms with customers
		A change in the volume of off-contract purchases
		Changes in WAC

As necessary, we adjust ASPs based on anticipated changes in the factors above.

Government Rebates

Returns

Administrative Fees and Other Rebates

Prompt Payment Discounts

The following table summarizes activity in the consolidated balance sheets for accruals and allowances for the years ended December 31, 2018, 2017, and 2016:

	Accruals for Chargebacks, Returns, and Other Allowances
										Administrative			Prompt
				Government						Fees and Other			Payment
(in thousands)	Chargebacks			Rebates			Returns			Rebates			Discounts
Balance at December 31, 2015	$	11,381		$	4,631		$	2,648		$	1,653		$	674
Accruals/Adjustments		114,433			9,671			10,271			12,747			5,517
Credits Taken Against Reserve		(99,029	)		(8,411	)		(7,163	)		(10,850	)		(4,637	)
Balance at December 31, 2016	$	26,785		$	5,891		$	5,756		$	3,550		$	1,554
Accruals/Adjustments		179,297			12,237			12,184			24,037			8,126
Credits Taken Against Reserve		(177,852	)		(10,198	)		(9,666	)		(22,361	)		(7,846	)
Balance at December 31, 2017	$	28,230		$	7,930		$	8,274		$	5,226		$	1,834
Accruals/Adjustments		229,813			11,383			14,243			33,167			9,371
Credits Taken Against Reserve		(219,036	)		(10,339	)		(9,965	)		(31,040	)		(9,196	)
Balance at December 31, 2018	$	39,007		$	8,974		$	12,552		$	7,353		$	2,009

Contract Manufacturing Product Sales Revenue

Royalties from Licensing Agreements

In addition, we receive royalties from a license for patent rights initially owned by Cell Genesys, Inc., which merged with BioSante in 2009.

Product Development Services Revenue

Cash and Cash Equivalents

Accounts Receivable

Inventories

Property and Equipment

Buildings and improvements	20 - 40 years
Machinery, furniture, and equipment	1 - 10 years

Intangible Assets

Goodwill

Collaborative Arrangements

Royalties

Research and Development Expenses

Stock-Based Compensation

Income Taxes

We are subject to taxation in Canada and remain subject to examination by taxing jurisdictions for a period of four years.

We recognize interest and penalties accrued on any unrecognized tax exposures as a component of income tax expense. We did not have any such amounts accrued as of December 31, 2018, 2017, and 2016.

Earnings per Share

Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing net income available to common shareholders by the weighted-average number of shares of common stock outstanding during the period.

The numerator for earnings per share for the years ended December 31, 2018, 2017, and 2016 are calculated for basic and diluted earnings (loss) per share as follows:

	Basic									Diluted
	Years Ended December 31,									Years Ended December 31,
(in thousands, except per share amounts)	2018			2017			2016			2018			2017			2016
Net income/(loss)	$	15,494		$	(1,076	)	$	3,934		$	15,494		$	(1,076	)	$	3,934
Net income allocated to restricted stock		(154	)		-			(21	)		(154	)		-			(21	)
Net income/(loss) allocated to common shares	$	15,340		$	(1,076	)	$	3,913		$	15,340		$	(1,076	)	$	3,913

Basic Weighted-Average Shares Outstanding		11,677			11,547			11,445			11,677			11,547			11,445
Dilutive effect of stock options and ESPP											95			-			128
Diluted Weighted-Average Shares Outstanding											11,772			11,547			11,573

Earnings/(Loss) per share	$	1.31		$	(0.09	)	$	0.34		$	1.30		$	(0.09	)	$	0.34

Hedge Accounting

Fair Value of Financial Instruments



Level 2—Observable market-based inputs other than quoted prices in active markets for identical assets or liabilities.



Level 3—Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

See Note 8 for additional information regarding fair value.

Geographic Information

The following table depicts the Company’s revenue by geographic operations during the following periods:

(in thousands)	Years Ended December 31,
Location of Operations	2018		2017		2016
United States	$	196,886	$	176,842	$	128,622
Canada		4,690		-		-
Total Revenue	$	201,576	$	176,842	$	128,622

The following table depicts the Company’s property and equipment, net according to geographic location as of:

(in thousands)	December 31, 2018		December 31, 2017
United States	$	24,437	$	20,403
Canada		13,653		-
Total property and equipment, net	$	38,090	$	20,403

Recent Accounting Pronouncements

Recent Accounting Pronouncements Not Yet Adopted

Recently Adopted Accounting Pronouncements

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Disaggregation of Revenue

The following table depicts the disaggregation of revenue:

Products and Services	Years Ended December 31,
(in thousands)	2018		2017		2016
Sales of generic pharmaceutical products	$	117,451	$	118,437	$	95,201
Sales of branded pharmaceutical products		60,554		50,919		26,443
Sales of contract manufactured products		9,119		7,046		5,537
Royalties from licensing agreements		12,504		-		-
Product development services		1,019		-		-
Other (1)		929		440		1,441
Total net revenues	$	201,576	$	176,842	$	128,622

(1)

Primarily includes laboratory services and royalties on sales of contract manufactured products

Timing of Revenue Recognition	Years Ended December 31,
(in thousands)	2018		2017		2016
Performance obligations transferred at a point in time	$	200,557	$	176,842	$	128,622
Performance obligations transferred over time		1,019		-		-
Total	$	201,576	$	176,842	$	128,622

Schedule of Valuation and Qualifying Accounts Disclosure

The following table summarizes activity in the consolidated balance sheets for accruals and allowances for the years ended December 31, 2018, 2017, and 2016:

	Accruals for Chargebacks, Returns, and Other Allowances
										Administrative			Prompt
				Government						Fees and Other			Payment
(in thousands)	Chargebacks			Rebates			Returns			Rebates			Discounts
Balance at December 31, 2015	$	11,381		$	4,631		$	2,648		$	1,653		$	674
Accruals/Adjustments		114,433			9,671			10,271			12,747			5,517
Credits Taken Against Reserve		(99,029	)		(8,411	)		(7,163	)		(10,850	)		(4,637	)
Balance at December 31, 2016	$	26,785		$	5,891		$	5,756		$	3,550		$	1,554
Accruals/Adjustments		179,297			12,237			12,184			24,037			8,126
Credits Taken Against Reserve		(177,852	)		(10,198	)		(9,666	)		(22,361	)		(7,846	)
Balance at December 31, 2017	$	28,230		$	7,930		$	8,274		$	5,226		$	1,834
Accruals/Adjustments		229,813			11,383			14,243			33,167			9,371
Credits Taken Against Reserve		(219,036	)		(10,339	)		(9,965	)		(31,040	)		(9,196	)
Balance at December 31, 2018	$	39,007		$	8,974		$	12,552		$	7,353		$	2,009

Schedule of Earnings Per Share, Basic and Diluted

The numerator for earnings per share for the years ended December 31, 2018, 2017, and 2016 are calculated for basic and diluted earnings (loss) per share as follows:

	Basic									Diluted
	Years Ended December 31,									Years Ended December 31,
(in thousands, except per share amounts)	2018			2017			2016			2018			2017			2016
Net income/(loss)	$	15,494		$	(1,076	)	$	3,934		$	15,494		$	(1,076	)	$	3,934
Net income allocated to restricted stock		(154	)		-			(21	)		(154	)		-			(21	)
Net income/(loss) allocated to common shares	$	15,340		$	(1,076	)	$	3,913		$	15,340		$	(1,076	)	$	3,913

Basic Weighted-Average Shares Outstanding		11,677			11,547			11,445			11,677			11,547			11,445
Dilutive effect of stock options and ESPP											95			-			128
Diluted Weighted-Average Shares Outstanding											11,772			11,547			11,573

Earnings/(Loss) per share	$	1.31		$	(0.09	)	$	0.34		$	1.30		$	(0.09	)	$	0.34

Revenue from External Customers by Geographic Areas

The following table depicts the Company’s revenue by geographic operations during the following periods:

(in thousands)	Years Ended December 31,
Location of Operations	2018		2017		2016
United States	$	196,886	$	176,842	$	128,622
Canada		4,690		-		-
Total Revenue	$	201,576	$	176,842	$	128,622

Schedule of LongLived Assets by Geographical Areas

The following table depicts the Company’s property and equipment, net according to geographic location as of:

(in thousands)	December 31, 2018		December 31, 2017
United States	$	24,437	$	20,403
Canada		13,653		-
Total property and equipment, net	$	38,090	$	20,403

BUSINESS COMBINATION (Tables)

12 Months Ended

Dec. 31, 2018

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

on August 6, 2018:

	(in thousands)
Total Purchase Consideration	$	16,687

Cash and cash equivalents		220
Accounts receivable		1,311
Inventories		2,197
Prepaid expenses and other current assets		361
Property and equipment		13,935
Deferred tax assets, net		-
Goodwill		1,742
Total assets acquired		19,766

Accounts payable and other current liabilities		2,413
Deferred revenue		666
Total liabilties assumed		3,079
Net assets acquired	$	16,687

Business Acquisition, Pro Forma Information

	Years Ended December 31,
(in thousands)	2018		2017 (1)
Net revenues	$	208,213	$	188,758
Net income/(loss)	$	13,287	$	(3,102	)

(1)

Net income for the year ended December 31, 2017 includes the impact to WellSpring of $4.4 million of related party debt forgiveness.

INDEBTEDNESS (Tables)

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Schedule of Long-term Debt Instruments

The carrying value of the current and long-term components of the Term Loan as of December 31, 2018 and 2017 are:

	Current
(in thousands)	2018			2017
Current borrowing on secured term loan	$	3,609		$	3,750
Deferred financing costs		(353	)		(397	)
Current component of long-term borrowing, net of deferred financing costs	$	3,256		$	3,353

	Long-Term
(in thousands)	2018			2017
Long-term borrowing on secured term loan	$	68,578		$	71,250
Deferred financing costs		(1,282	)		(1,304	)
Long-term borrowing, net of deferred financing costs and current borrowing component	$	67,296		$	69,946

Schedule of Maturities of Long-term Debt

The contractual maturity for our Term Loan is as follows for the years ending December 31:

(in thousands)
2019	$	3,609
2020		3,609
2021		5,414
2022		5,414
2023		54,141
Total	$	72,187

Convertible Debt

The carrying value of the Notes is as follows as of December 31:

(in thousands)	2018			2017
Principal amount	$	118,750		$	143,750
Unamortized debt discount		(5,648	)		(13,924	)
Deferred financing costs		(639	)		(1,618	)
Net carrying value	$	112,463		$	128,208

Interest Income and Interest Expense Disclosure

The following table sets forth the components of total interest expense related to the Notes and Term Loan recognized in our consolidated statements of operations for the year ended December 31:

(in thousands)	2018			2017			2016
Contractual coupon	$	7,170		$	4,313		$	4,312
Amortization of debt discount		7,002			6,720			6,372
Amortization of finance fees		1,463			845			844
Capitalized interest		(724	)		(554	)		(234	)
	$	14,911		$	11,324		$	11,294

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28541-108399

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21506-112644

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=114775744&loc=d3e28551-108399

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21521-112644

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21538-112644

Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=75038535&loc=d3e64711-112823

Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=114775985&loc=d3e28878-108400

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109259400&loc=d3e21475-112644

+ Details

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2018

Inventory Disclosure [Abstract]

Schedule of Inventory, Current

Inventories consist of the following as of December 31:

(in thousands)	2018 (1)			2017
Raw materials	$	27,671		$	22,139
Packaging materials		2,563			1,527
Work-in-progress		1,210			510
Finished goods		10,620			13,901	(2)
		42,064			38,077
Reserve for excess/obsolete inventories		(1,561	)		(350	)
Inventories, net	$	40,503		$	37,727

(1)

Includes inventory acquired in acquisition of WellSpring (Note 2).

(2)

Includes finished goods acquired in asset purchases (Note 8).

PROPERTY, PLANT, AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property and equipment consist of the following as of December 31:

(in thousands)	2018 (1)			2017
Land	$	4,558		$	160
Buildings		10,079			3,835
Machinery, furniture, and equipment		26,814			12,334
Construction in progress		5,040			10,663
		46,491			26,992
Less: accumulated depreciation		(8,401	)		(6,589	)
Property and equipment, net	$	38,090		$	20,403

(1)

Includes property and equipment acquired in acquisition of WellSpring (Note 2).

INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule Of Goodwill

Changes in the carrying amount of goodwill as of December 31 are as follows:

(in thousands)	2018		2017
Balance at beginning of year	$	1,838	$	1,838
Acquisition of WellSpring (Note 2)		1,742		-
Balance at end of year	$	3,580	$	1,838

Schedule of Intangible Assets and Goodwill

The components of net definite-lived intangible assets are as follows:

(in thousands)	December 31, 2018					December 31, 2017					Weighted Average
	Gross Carrying Amount		Accumulated Amortization			Gross Carrying Amount		Accumulated Amortization			Amortization Period
Acquired ANDA intangible assets	$	46,194	$	(17,093	)	$	42,076	$	(12,592	)	10.0 years
NDAs and product rights		230,974		(62,222	)		230,974		(37,091	)	10.0 years
Marketing and distribution rights		10,423		(7,051	)		11,042		(5,087	)	4.7 years
Non-compete agreement		624		(245	)		624		(156	)	7.0 years
	$	288,215	$	(86,611	)	$	284,716	$	(54,926	)

Finite-lived Intangible Assets Amortization Expense

Expected future amortization expense is as follows for the years ending December 31:

(in thousands)
2019	$	31,761
2020		31,279
2021		29,833
2022		26,428
2023		26,360
2024 and thereafter		55,943
Total	$	201,604

FAIR VALUE DISCLOSURES (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

(in thousands)
Description	Fair Value at December 31, 2018		Level 1		Level 2		Level 3
Assets
Interest rate swap	$	-	$	-	$	-	$	-

Liabilities
Interest rate swap	$	496	$	-	$	496	$	-
CVRs	$	-	$	-	$	-	$	-

Description

Fair Value at

December 31, 2017

Level 1

Level 2

Level 3

Assets

Interest rate swap

Liabilities

Interest rate swap

CVRs

STOCKHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2018

Stockholders' Equity Note [Abstract]

Schedule of Stockholders' Equity Note, Warrants or Rights

Warrants to purchase an aggregate of 1.7 million shares of our common stock were outstanding and exercisable as of December 31, 2018:

Issue Date	Number of Underlying Shares of Common Stock (in thousands)		Per Share Exercise Price		Expiration Date
December 4, 2014		1,486	$	96.21	March 1, 2020
December 5, 2014		223	$	96.21	March 1, 2020

- Definition

Tabular disclosure of warrants or rights issued. Warrants and rights outstanding are derivative securities that give the holder the right to purchase securities (usually equity) from the issuer at a specific price within a certain time frame. Warrants are often included in a new debt issue to entice investors by a higher return potential. The main difference between warrants and call options is that warrants are issued and guaranteed by the company, whereas options are exchange instruments and are not issued by the company. Also, the lifetime of a warrant is often measured in years, while the lifetime of a typical option is measured in months. Disclose the title of issue of securities called for by warrants and rights outstanding, the aggregate amount of securities called for by warrants and rights outstanding, the date from which the warrants or rights are exercisable, and the price at which the warrant or right is exercisable.

+ References + Details

STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

The following table summarizes stock-based compensation expense incurred under the 2008 Plan and included in our consolidated statements of operations:

	Years Ended December 31,
(in thousands)	2018		2017		2016
Cost of sales	$	87	$	86	$	60
Research and development		771		677		112
Selling, general, and administrative		5,822		5,259		5,870
	$	6,680	$	6,022	$	6,042

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

For 2018, 2017, and 2016, the fair value of each option grant was estimated using the Black-Scholes option-pricing model, using the following assumptions:

	Years Ended December 31,
	2018	2017	2016
Expected option life (years)	5.48 - 6.25	5.33 - 7.00	5.50 - 6.25
Risk-free interest rate	2.64% - 2.93%	1.93% - 2.33%	1.14% - 1.55%
Expected stock price volatility	55.1% - 60.6%	50.3% - 57.4%	49.4% - 51.7%
Dividend yield	—	—	—

Schedule of Share-based Compansation, Stock Option And Restricted Stock, Activity

A summary of stock option activity under the 2008 Plan during the years ended December 31, 2018, 2017, and 2016 is presented below:

(in thousands, except per share and remaining term data)	Option Shares			Weighted Average Exercise Price		Weighted Average Grant- date Fair Value		Weighted Average Remaining Term (years)		Aggregate Intrinsic Value
Outstanding December 31, 2015		474		$	29.40				8.2	$	10,136
Granted		265			45.60	$	22.45
Exercised		(127	)		11.79						5,837
Forfeited		(32	)		47.84
Expired		(2	)		139.32
Outstanding December 31, 2016		578		$	39.28				8.2	$	12,928
Granted		207			51.66	$	27.04
Exercised		(13	)		15.92						542
Forfeited		(5	)		53.29
Expired		-			-
Outstanding December 31, 2017		767		$	42.93				7.8	$	16,785
Granted		156			57.60	$	31.76
Exercised		(142	)		19.47						5,863
Forfeited		(18	)		60.17
Expired		(4	)		74.53
Outstanding at December 31, 2018		759		$	49.74				7.6	$	2,221
Exercisable at December 31, 2018		326		$	45.88				6.6	$	1,949

Nonvested Restricted Stock Shares Activity

A summary of RSA activity under the Plan during the years ended December 31, 2018, 2017, and 2016 is presented below:

(in thousands, except per share and remaining term data)	Shares			Weighted Average Grant Date Fair Value		Weighted Average Remaining Term (years)
Unvested at December 31, 2015		63		$	42.72		2.2
Granted		38			40.59
Vested		(30	)		33.89
Forfeited		(8	)		46.05
Unvested at December 31, 2016		63		$	45.72		2.2
Granted		50			49.51
Vested		(28	)		44.49
Forfeited		-			-
Unvested at December 31, 2017		85		$	48.34		2.6
Granted		65			58.11
Vested		(33	)		47.34
Forfeited		-			-
Unvested at December 31, 2018		117		$	54.04		2.1

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

Our total provision for income taxes consists of the following for the years ended December 31, 2018, 2017, and 2016:

(in thousands)	2018			2017			2016

Current income tax provision:
Federal	$	7,985		$	13,175		$	11,717
State		1,751			690			1,321
Foreign		-			-			-
Total		9,736			13,865			13,038

Deferred income tax (benefit)/provision:
Federal		(4,630	)		4,065			(8,387	)
State		(556	)		(556	)		(658	)
Foreign		(214	)		-			-
Total		(5,400	)		3,509			(9,045	)

Change in valuation allowance		221			51			134
Excess tax benefit from stock-based compensation awards		-			-			617

Total provision for income taxes	$	4,557		$	17,425		$	4,744

Schedule of Effective Income Tax Rate Reconciliation

	As of December 31,
	2018			2017			2016

US Federal statutory rate		21.0	%		35.0	%		35.0	%
State taxes, net of Federal benefit		2.4	%		2.0	%		2.1	%
Foreign taxes		26.5	%		-	%		-	%
Impact of Tax Cuts and Jobs Act		-	%		81.9	%		-	%
International tax structure impacts		-	%		-	%		23.3	%
Domestic production activities deduction		-	%		(8.8	)%		(14.4	)%
Change in valuation allowance		(26.5	)%		-	%		1.6	%
Stock-based compensation – no windfall tax benefits		(0.7	)%		1.0	%		5.7	%
Stock-based compensation – windfall tax benefit		(1.1	)%		(0.2	)%		-	%
Change in tax rates and other		-	%		(4.3	)%		1.4	%
Total income tax provision/(benefit)		21.6	%		106.6	%		54.7	%

Schedule of Deferred Tax Assets and Liabilities

(in thousands)	As of December 31,
	2018			2017
Deferred tax assets:
Accruals and advances	$	7,748		$	5,254
Bond hedge		3,019			5,617
Accruals for chargebacks and returns		7,132			4,927
Inventory		1,228			857
Intangible asset		9,393			6,355
Net operating loss carryforwards		5,604			3,029
Other		4,682			3,030
Total deferred tax assets	$	38,806		$	29,069

Deferred tax liabilities:
Depreciation	$	(4,437	)	$	(1,110	)
Debt discount		(1,316	)		(3,256	)
Intangible assets		(11	)		(11	)
Other		(2,813	)		(1,699	)
Total deferred tax liabilities	$	(8,577	)	$	(6,076	)
Valuation allowance		(2,265	)		(326	)
Deferred tax assets, net of deferred tax liabilities and valuation allowance	$	27,964		$	22,667

QUARTERLY FINANCIAL DATA (Tables)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Information

The information below has been prepared on a basis consistent with our audited consolidated financial statements.

	2018 Quarters (unaudited)
(in thousands, except per share data)	First			Second			Third			Fourth
Net revenues	$	46,483		$	47,268		$	50,703		$	57,122
Total operating expenses		39,946			40,005			40,589			45,677
Operating income		6,537			7,263			10,114			11,445
Provision for income taxes		(592	)		(726	)		(1,329	)		(1,910	)
Net income	$	2,250		$	2,777		$	5,037		$	5,430
Basic and diluted earnings per share:
Basic earnings per share	$	0.19		$	0.24		$	0.43		$	0.46
Diluted earnings per share	$	0.19		$	0.23		$	0.42		$	0.46

	2017 Quarters (unaudited)
(in thousands, except per share data)	First			Second			Third			Fourth
Net revenues	$	36,628		$	44,764		$	48,164		$	47,286
Total operating expenses		32,003			37,770			38,833			39,907
Operating income		4,625			6,994			9,331			7,379
Provision for income taxes		(523	)		(1,269	)		(1,654	)		(13,979	)
Net income/(loss)	$	1,152		$	2,681		$	4,720		$	(9,629	)
Basic and diluted earnings/(loss) per share:
Basic earnings/(loss) per share	$	0.10		$	0.23		$	0.41		$	(0.83	)
Diluted earnings/(loss) per share	$	0.10		$	0.23		$	0.40		$	(0.83	)

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Revenue Recognition

$ 201,576

$ 176,842

$ 128,622

Sales of generic pharmaceutical products [Member]

Revenue Recognition

117,451

118,437

95,201

Sales of branded pharmaceutical products [Member]

Revenue Recognition

60,554

50,919

26,443

Sales of contract manufactured products [Member]

Revenue Recognition

9,119

7,046

5,537

Royalties from licensing agreements [Member]

Revenue Recognition

12,504

Product development services [Member]

Revenue Recognition

1,019

Other [Member]

Revenue Recognition

^[1]

$ 929

$ 440

$ 1,441

[1]	Primarily includes laboratory services and royalties on sales of contract manufactured products

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenues	$ 57,122	$ 50,703	$ 47,268	$ 46,483	$ 47,286	$ 48,164	$ 44,764	$ 36,628	$ 201,576	$ 176,842	$ 128,622
Performance obligations transferred at a point in time [Member]
Revenues									200,557	176,842	128,622
Performance obligations transferred over time [Member]
Revenues									$ 1,019	$ 0	$ 0

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	$ 34,686
Ending balance	47,705	$ 34,686
Chargebacks
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	28,230	26,785	$ 11,381
Accruals/Adjustments	229,813	179,297	114,433
Credits Taken Against Reserve	(219,036)	(177,852)	(99,029)
Ending balance	39,007	28,230	26,785
Government Rebates
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	7,930	5,891	4,631
Accruals/Adjustments	11,383	12,237	9,671
Credits Taken Against Reserve	(10,339)	(10,198)	(8,411)
Ending balance	8,974	7,930	5,891
Returns
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	8,274	5,756	2,648
Accruals/Adjustments	14,243	12,184	10,271
Credits Taken Against Reserve	(9,965)	(9,666)	(7,163)
Ending balance	12,552	8,274	5,756
Administrative Fees and Other Rebates
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	5,226	3,550	1,653
Accruals/Adjustments	33,167	24,037	12,747
Credits Taken Against Reserve	(31,040)	(22,361)	(10,850)
Ending balance	7,353	5,226	3,550
Prompt Payment Discounts
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	1,834	1,554	674
Accruals/Adjustments	9,371	8,126	5,517
Credits Taken Against Reserve	(9,196)	(7,846)	(4,637)
Ending balance	$ 2,009	$ 1,834	$ 1,554

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Net income/(loss), Basic	$ 5,430	$ 5,037	$ 2,777	$ 2,250	$ (9,629)	$ 4,720	$ 2,681	$ 1,152	$ 15,494	$ (1,076)	$ 3,934
Net income/(loss) allocated to common shares, Basic									$ 15,340	$ (1,076)	$ 3,913
Earnings/(Loss) per share, Basic	$ 0.46	$ 0.43	$ 0.24	$ 0.19	$ (0.83)	$ 0.41	$ 0.23	$ 0.10	$ 1.31	$ (0.09)	$ 0.34
Net income/(loss), Diluted	$ 5,430	$ 5,037	$ 2,777	$ 2,250	$ (9,629)	$ 4,720	$ 2,681	$ 1,152	$ 15,494	$ (1,076)	$ 3,934
Net income/(loss) allocated to common shares, Diluted									$ 15,340	$ (1,076)	$ 3,913
Basic Weighted-Average Shares Outstanding									11,677	11,547	11,445
Diluted Weighted-Average Shares Outstanding									11,772	11,547	11,573
(Loss)/Earnings per share, Diluted	$ 0.46	$ 0.42	$ 0.23	$ 0.19	$ (0.83)	$ 0.40	$ 0.23	$ 0.10	$ 1.30	$ (0.09)	$ 0.34
Equity Option [Member]
Dilutive effect of stock options and ESPP									95	0	128
Restricted Stock [Member]
Net income allocated to restricted stock, Basic									$ (154)	$ 0	$ (21)
Net income allocated to restricted stock, Diluted									$ (154)	$ 0	$ (21)

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenues	$ 57,122	$ 50,703	$ 47,268	$ 46,483	$ 47,286	$ 48,164	$ 44,764	$ 36,628	$ 201,576	$ 176,842	$ 128,622
United States [Member]
Revenues									196,886	176,842	128,622
Canada [Member]
Revenues									$ 4,690	$ 0	$ 0

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Property and equipment, net	$ 38,090	$ 20,403
United States [Member]
Property and equipment, net	24,437	20,403
Canada [Member]
Property and equipment, net	$ 13,653	$ 0

DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) - USD ($) shares in Millions		3 Months Ended								12 Months Ended
	Aug. 06, 2018	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Jan. 01, 2019
Business Combination Purchase Price Before Adjustments	$ 18,000,000
Business Combination, Consideration Transferred	$ 16,700,000
Impairment of Intangible Assets, Finite-lived										$ 0	$ 903,000	$ 6,685,000
Research and Development Expense										15,388,000	9,070,000	2,906,000
Allocated Share-based Compensation Expense										$ 6,700,000	$ 6,100,000	$ 6,100,000
Short-term Debt, Percentage Bearing Fixed Interest Rate		3.00%								3.00%
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount										4.4	4.8	4.5
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount											$ 13,400,000
Effective Income Tax Rate Reconciliation, Foreign Income Tax Rate Differential, Percent										26.50%	0.00%	0.00%
Revenues		$ 57,122,000	$ 50,703,000	$ 47,268,000	$ 46,483,000	$ 47,286,000	$ 48,164,000	$ 44,764,000	$ 36,628,000	$ 201,576,000	$ 176,842,000	$ 128,622,000
Contract with Customer, Asset, Net		100,000								100,000
Deferred Revenue, Current		711,000				$ 0				711,000	$ 0	$ 0
Fdic Guaranteed Amount		250,000								$ 250,000
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent										21.00%	35.00%	35.00%
Examination By Taxing Jurisdictions Term										4 years
Performance Obligation From Prior Period [Member]
Revenues										$ 5,300,000
Sales Of Contract Manufactured Products [Member]
Revenue, Remaining Performance Obligation, Amount		6,300,000								6,300,000
Product Development Services [Member]
Revenue, Remaining Performance Obligation, Amount		$ 2,000,000								2,000,000
Subsequent Event [Member]
Operating Lease, Right-of-Use Asset													$ 450,000
Operating Lease, Liability													$ 500,000
Testosterone Gel NDA [Member] \| New Drug Applications [Member]
Impairment of Intangible Assets, Finite-lived											$ 900,000	$ 6,700,000
Employee Stock Purchase Plan [Member]
Allocated Share-based Compensation Expense										$ 102,000	$ 68,000	$ 25,000
Minimum [Member] \| Product Development Services [Member]
Revenue, Remaining Performance Obligation, Remaining Period		6 months								6 months
Minimum [Member] \| Finite-Lived Intangible Assets [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life										4 years
Maximum [Member] \| Product Development Services [Member]
Revenue, Remaining Performance Obligation, Remaining Period		15 months								15 months
Maximum [Member] \| Finite-Lived Intangible Assets [Member]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life										10 years
Building and Building Improvements [Member] \| Minimum [Member]
Property, Plant and Equipment, Useful Life										20 years
Building and Building Improvements [Member] \| Maximum [Member]
Property, Plant and Equipment, Useful Life										40 years
Machinery and Equipment [Member] \| Minimum [Member]
Property, Plant and Equipment, Useful Life										1 year
Machinery and Equipment [Member] \| Maximum [Member]
Property, Plant and Equipment, Useful Life										10 years
Customer One [Member]
Concentration Risk, Percentage										21.00%	29.00%	28.00%
Customer Two [Member]
Concentration Risk, Percentage										23.00%	29.00%	22.00%
Customer Three [Member]
Concentration Risk, Percentage										33.00%	20.00%	18.00%
Customer One Two And Three [Member]
Concentration Risk, Percentage										81.00%
Two Suppliers 2017 [Member]
Concentration Risk, Percentage											23.00%
One Supplier [Member]
Concentration Risk, Percentage										13.00%		25.00%

BUSINESS COMBINATION (Details) - USD ($) $ in Thousands	12 Months Ended
BUSINESS COMBINATION (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Deferred tax assets, net	$ 27,964	$ 22,667
Goodwill	3,580	$ 1,838	$ 1,838
Acquisition of WellSpring
Total Purchase Consideration	16,687
Cash and cash equivalents	220
Accounts receivable	1,311
Inventories	2,197
Prepaid expenses and other current assets	361
Property and equipment	13,935
Deferred tax assets, net	0
Goodwill	1,742
Total assets acquired	19,766
Accounts payable and other current liabilities	2,413
Deferred revenue	666
Total liabilties assumed	3,079
Net assets acquired	$ 16,687

BUSINESS COMBINATION (Details 1) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2018

Dec. 31, 2017

^[1]

Net revenues

$ 208,213

$ 188,758

Net income/(loss)

$ 13,287

$ (3,102)

[1]	Net income for the year ended December 31, 2017 includes the impact to WellSpring of $4.4 million of related party debt forgiveness.

BUSINESS COMBINATION (Details Textual) - USD ($) $ in Millions		5 Months Ended	12 Months Ended
	Aug. 06, 2018	Dec. 31, 2018	Dec. 31, 2018	Dec. 31, 2017
Business Combination, Consideration Transferred	$ 16.7
Business Combination Purchase Price Before Adjustments	18.0
Net Working Capital Adjustment			$ 0.6
Goodwill, Period Increase (Decrease)			$ 0.6
WellSpring Pharma Services Inc [Member]
Business Combination, Consideration Transferred	16.7
Business Combination, Pro Forma Information, Revenue of Acquiree since Acquisition Date, Actual		$ 4.7
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual		$ (1.1)
Business Acquisition Pro Forma Information Effective Tax Rate			23.00%	37.00%
Business Combination, Acquisition Related Costs			$ 1.1
Business Combination Purchase Price Before Adjustments	$ 18.0
Business Combination Related Party Debt Forgiveness				$ 4.4

INDEBTEDNESS (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current component of long-term borrowing, net of deferred financing costs	$ 3,256	$ 3,353
Long-term borrowing, net of deferred financing costs and current borrowing component	67,296	69,946
Long Term Debt Current [Member]
Borrowing on secured term loan	3,609	3,750
Deferred financing costs	(353)	(397)
Current component of long-term borrowing, net of deferred financing costs	3,256	3,353
Long Term Debt Noncurrent [Member]
Borrowing on secured term loan	68,578	71,250
Deferred financing costs	(1,282)	(1,304)
Long-term borrowing, net of deferred financing costs and current borrowing component	$ 67,296	$ 69,946

INDEBTEDNESS (Details 1) - Term Loan [Member] $ in Thousands	Dec. 31, 2018 USD ($)
2019	$ 3,609
2020	3,609
2021	5,414
2022	5,414
2023	54,141
Total	$ 72,187

INDEBTEDNESS (Details 2) - Convertible Senior Notes [Member] - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2014
Principal amount	$ 118,750	$ 143,750	$ 143,800
Unamortized debt discount	(5,648)	(13,924)	$ (33,600)
Deferred financing costs	(639)	(1,618)
Net carrying value	$ 112,463	$ 128,208

INDEBTEDNESS (Details 3) - USD ($) $ in Thousands	12 Months Ended
INDEBTEDNESS (Details 3) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Contractual coupon	$ 7,170	$ 4,313	$ 4,312
Amortization of debt discount	7,002	6,720	6,372
Amortization of finance fees	1,463	845	844
Capitalized interest	(724)	(554)	(234)
Interest Expense, Debt	$ 14,911	$ 11,324	$ 11,294

INDEBTEDNESS (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Dec. 27, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Short-term Debt, Percentage Bearing Fixed Interest Rate		3.00%
Debt Instrument, Interest Rate, Effective Percentage		7.80%	7.90%
Amortization of Debt Issuance Costs		$ 1,463	$ 845	$ 844
Payments to Acquire Intangible Assets		5,169	97,624	144,494
Long-term Debt, Current Maturities		3,256	3,353
Debt Instrument, Maturity Date	Dec. 01, 2019
Interest Expense, Debt		14,911	11,324	$ 11,294
Debt Instrument, Repurchase Amount		25,000
Adjustments To Additional Paid In Capital Repurchase Of Convertible Notes And Unwinding Of Call Option Overlay Net		$ 1,700
Warrant [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		1,709,002
Bond Hedge [Member]
Underlying Shares Of Common Stock Bond Hedge		1,709,002
Delayed Draw Term Loan [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 118,000
Delayed Draw Term Loan [Member] \| Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate	2.75%
Delayed Draw Term Loan Ticking Fee Percentage		0.50%
Delayed Draw Term Loan [Member] \| Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate	1.50%
Delayed Draw Term Loan Ticking Fee Percentage		0.25%
Senior Secured Credit Facility [Member]
Debt Instrument, Description of Variable Rate Basis	LIBOR rate plus 1.50% to 2.75% per annum, depending on our total leverage ratio or an alternative base rate plus an applicable base rate margin, which varies within a range of 0.50% to 1.75%,
Debt Instrument, Covenant Description	which initially shall be no greater than 3.75 to 1.00 and a minimum fixed charge coverage ratio, which shall be greater than or equal to 1.25 to 1.00.
Line of Credit Facility, Maximum Borrowing Capacity	$ 265,200
Credit Agreement [Member]
Payments to Acquire Intangible Assets			46,500
Line of Credit Facility, Maximum Borrowing Capacity			125,000
Interest Expense, Debt		$ 2,700
Debt Issuance Costs, Gross			2,700
Prepaid Expenses and Other Current Assets [Member] \| Delayed Draw Term Loan [Member]
Debt Issuance Costs, Current, Net		100
Prepaid Expenses and Other Current Assets [Member] \| Revolving Credit Facility [Member]
Debt Issuance Costs, Current, Net		300
Other Long-Term Assets [Member] \| Delayed Draw Term Loan [Member]
Debt Issuance Costs, Noncurrent, Net		500
Other Long-Term Assets [Member] \| Revolving Credit Facility [Member]
Debt Issuance Costs, Net			1,000
Debt Issuance Costs, Noncurrent, Net		1,000
Line of Credit Facility, Maximum Borrowing Capacity		75,000	50,000
Convertible Senior Notes [Member]
Long-term Debt, Gross		$ 118,750	143,750			$ 143,800
Proceeds from Issuance of Debt						$ 122,600
Short-term Debt, Percentage Bearing Fixed Interest Rate						3.00%
Underlying Shares Of Common Stock Convertible Debt		1,709,002			2,068,792	2,068,792
Per Note Principal						$ 1,000
Debt Instrument, Unamortized Discount		$ 5,648	$ 13,924			$ 33,600
Deferred Offering Costs						$ 5,500
Exercise Price Of Bond Hedge						$ 69.48
Underlying Shares Of Common Stock Bond Hedge			2,068,792	2,068,792	2,068,792	2,068,792
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 96.21			$ 96.21	$ 96.21
Net Adjustments To Additional Paid In Capital Bond Hedge Acquired Warrant Issued Net						$ 15,600
Amortization of Debt Issuance Costs						4,200
Payments of Stock Issuance Costs						$ 1,300
Debt Issuance Costs, Net		$ 639	$ 1,618
Debt Instrument, Repurchase Amount		25,000	25,000
Cash Received From Unwinding Call Option Overlay		$ 400
Line of Credit [Member] \| Maximum [Member]
Line of Credit Facility, Commitment Fee Percentage		0.50%
Line of Credit [Member] \| Minimum [Member]
Line of Credit Facility, Commitment Fee Percentage		0.25%
Term Loan [Member] \| Senior Secured Credit Facility [Member]
Long-term Debt, Gross		$ 72,200
Debt Issuance Costs, Net		1,600
Debt Instrument, Face Amount	72,200
Debt Issuance Costs, Current, Net		$ 1,300
Long-term Debt, Current Maturities	$ 3,600
Debt Instrument, Maturity Date	Dec. 27, 2023	Dec. 27, 2023
Term Loan [Member] \| Senior Secured Credit Facility [Member] \| Maximum [Member]
Debt Instrument, Basis Spread on Variable Rate		1.75%
Term Loan [Member] \| Senior Secured Credit Facility [Member] \| Minimum [Member]
Debt Instrument, Basis Spread on Variable Rate		0.50%
Previous Term Loan [Member] \| Credit Agreement [Member]
Long-term Debt, Gross			75,000
Debt Issuance Costs, Net			1,700
Debt Instrument, Face Amount			$ 75,000
Current Long-term Debt [Member] \| Term Loan [Member] \| Senior Secured Credit Facility [Member]
Debt Issuance Costs, Current, Net		$ 300

DERIVATIVE FINANCIAL INSTRUMENT AND HEDGING ACTIVITY (Details Textual) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Dec. 27, 2018	Dec. 31, 2018	Feb. 28, 2019	Dec. 31, 2017
Debt Instrument, Maturity Date	Dec. 01, 2019
Other Liabilities, Noncurrent		$ 496		$ 0
Term Loan [Member] \| Senior Secured Credit Facility [Member]
Debt Instrument, Face Amount	$ 72,200
Debt Instrument, Maturity Date	Dec. 27, 2023	Dec. 27, 2023
Derivative Asset, Notional Amount		$ 72,200
Interest rate swap [Member] \| Delayed Draw Term Loan [Member] \| Subsequent Event [Member]
Derivative Asset, Notional Amount			$ 118,000
Derivative, Swaption Interest Rate			2.47%
Interest rate swap [Member] \| Term Loan [Member]
Derivative, Maturity Date	Dec. 27, 2023
Derivative Asset, Notional Amount	$ 72,200	$ 72,200
Derivative, Swaption Interest Rate		2.60%
Other Liabilities, Noncurrent		$ 500
Cash Received From Unwinding Call Option Overlay		400
Interest Expense		200
Derivative Asset, Fair Value, Gross Asset		$ 400

INVENTORIES (Details) - USD ($)
$ in Thousands

Dec. 31, 2018

^[1]

Dec. 31, 2017

Inventory [Line Items]

Raw materials

$ 27,671

$ 22,139

Packaging materials

2,563

1,527

Work-in-progress

1,210

510

Finished goods

10,620

13,901

^[2]

Inventory, Gross, Total

42,064

38,077

Reserve for excess/obsolete inventories

(1,561)

(350)

Inventories, net

$ 40,503

$ 37,727

[1]	Includes inventory acquired in acquisition of WellSpring (Note 2).
[2]	Includes finished goods acquired in asset purchases (Note 8).

PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($)
$ in Thousands

Dec. 31, 2018

Dec. 31, 2017

Property, Plant and Equipment, Gross, Total

$ 46,491

^[1]

$ 26,992

Less: accumulated depreciation

(8,401)

^[1]

(6,589)

Property and equipment, net

38,090

20,403

Land [Member]

Property, Plant and Equipment, Gross, Total

4,558

^[1]

160

Buildings [Member]

Property, Plant and Equipment, Gross, Total

10,079

^[1]

3,835

Machinery, furniture and equipment [Member]

Property, Plant and Equipment, Gross, Total

26,814

^[1]

12,334

Construction in progress [Member]

Property, Plant and Equipment, Gross, Total

$ 5,040

^[1]

$ 10,663

[1]	Includes property and equipment acquired in acquisition of WellSpring (Note 2).

PROPERTY, PLANT, AND EQUIPMENT (Details Textual) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Depreciation	$ 2.1	$ 1.2	$ 0.9
Interest Costs Capitalized	$ 0.7	$ 0.6

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Balance at beginning of year	$ 1,838	$ 1,838
Acquisition of WellSpring (Note 2)	1,742	0
Balance at end of year	$ 3,580	$ 1,838

INTANGIBLE ASSETS (Details1) - USD ($) $ in Thousands	12 Months Ended
INTANGIBLE ASSETS (Details1) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
GOODWILL AND INTANGIBLE ASSETS
Gross Carrying Amount	$ 288,215	$ 284,716
Accumulated Amortization	(86,611)	(54,926)
Acquired ANDA intangible assets
GOODWILL AND INTANGIBLE ASSETS
Gross Carrying Amount	46,194	42,076
Accumulated Amortization	$ (17,093)	(12,592)
Weighted Average Amortization Period	10 years
NDAs and product rights
GOODWILL AND INTANGIBLE ASSETS
Gross Carrying Amount	$ 230,974	230,974
Accumulated Amortization	$ (62,222)	(37,091)
Weighted Average Amortization Period	10 years
Marketing and distribution rights
GOODWILL AND INTANGIBLE ASSETS
Gross Carrying Amount	$ 10,423	11,042
Accumulated Amortization	$ (7,051)	(5,087)
Weighted Average Amortization Period	4 years 8 months 12 days
Non-compete agreement
GOODWILL AND INTANGIBLE ASSETS
Gross Carrying Amount	$ 624	624
Accumulated Amortization	$ (245)	$ (156)
Weighted Average Amortization Period	7 years

INTANGIBLE ASSETS (Details 2) $ in Thousands	Dec. 31, 2018 USD ($)
GOODWILL AND INTANGIBLE ASSETS
2019	$ 31,761
2020	31,279
2021	29,833
2022	26,428
2023	26,360
2024 and thereafter	55,943
Total	$ 201,604

INTANGIBLE ASSETS (Details Textual) - USD ($) $ in Thousands	1 Months Ended							3 Months Ended	12 Months Ended
	May 31, 2018	Apr. 30, 2018	Dec. 31, 2017	Feb. 28, 2017	Apr. 30, 2016	Jan. 31, 2016	May 31, 2015	Dec. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
GOODWILL AND INTANGIBLE ASSETS
Amortization of Intangible Assets									$ 31,700	$ 26,700	$ 21,400
Payments to Acquire Intangible Assets									5,169	97,624	144,494
Finite-Lived Intangible Assets, Gross			$ 284,716						288,215	284,716
Accrued Royalties Related To Asset Purchase									0	0	3,882
Impairment of Intangible Assets, Finite-lived									$ 0	903	6,685
Assets Held-for-sale, Not Part of Disposal Group, Current								$ 900			900
Acquired Finite-lived Intangible Asset, Amortization Description									we are amortizing 80% of the value of the intangible assets over the first five years of useful lives of the assets and amortizing the remaining 20% of the value of the intangible assets over the second five years of useful lives of the assets.
Goodwill [Line Items]
Goodwill			1,838					1,838	$ 3,580	1,838	1,838
WellSpring Pharma Services Inc [Member]
Goodwill [Line Items]
Goodwill									$ 1,742
Cranford Pharmaceuticals [Member] \| Non Compete Agreement [Member]
GOODWILL AND INTANGIBLE ASSETS
Finite-Lived Intangible Asset, Useful Life					7 years
Finite-Lived Intangible Assets, Gross					$ 600
Inderal XL [Member]
GOODWILL AND INTANGIBLE ASSETS
Payments to Acquire Intangible Assets				$ 20,200
Finite-Lived Intangible Asset, Useful Life				10 years
Finite-Lived Intangible Assets, Gross				$ 15,100
Acquisition Costs Capitalized				40
InnoPran XL [Member]
GOODWILL AND INTANGIBLE ASSETS
Payments to Acquire Intangible Assets				$ 30,600
Finite-Lived Intangible Asset, Useful Life				10 years
Finite-Lived Intangible Assets, Gross				$ 19,000
Acquisition Costs Capitalized				100
InnoPran XL [Member] \| Line of Credit [Member]
GOODWILL AND INTANGIBLE ASSETS
Payments to Acquire Intangible Assets				30,000
InnoPran XL [Member] \| Cash [Member]
GOODWILL AND INTANGIBLE ASSETS
Payments to Acquire Intangible Assets				$ 600
Acquired ANDA Intangible Assets [Member]
GOODWILL AND INTANGIBLE ASSETS
Finite-Lived Intangible Asset, Useful Life									10 years
Finite-Lived Intangible Assets, Gross			42,076						$ 46,194	42,076
Acquired ANDA Intangible Assets [Member] \| IDT Australia Limited [Member]
GOODWILL AND INTANGIBLE ASSETS
Payments to Acquire Intangible Assets		$ 2,700
Finite-Lived Intangible Asset, Useful Life		10 years
Finite-Lived Intangible Assets, Gross		$ 2,500
Acquisition Costs Capitalized		$ 18
Marketing and Distribution Rights [Member]
GOODWILL AND INTANGIBLE ASSETS
Finite-Lived Intangible Asset, Useful Life									4 years 8 months 12 days
Finite-Lived Intangible Assets, Gross			11,042						$ 10,423	11,042
Marketing and Distribution Rights [Member] \| H2 - Pharma, LLC [Member]
GOODWILL AND INTANGIBLE ASSETS
Payments to Acquire Intangible Assets						$ 8,800
Finite-Lived Intangible Asset, Useful Life						4 years
Finite-Lived Intangible Assets, Gross						$ 10,000
Acquisition Costs Capitalized						42
Accrued Royalties Assumed in Asset Purchase						$ 1,200
New Drug Applications [Member] \| Cranford Pharmaceuticals [Member]
GOODWILL AND INTANGIBLE ASSETS
Payments to Acquire Intangible Assets					$ 60,000
Finite-Lived Intangible Asset, Useful Life					10 years
Finite-Lived Intangible Assets, Gross					$ 52,400
Acquisition Costs Capitalized					300
Accrued Royalties Related To Asset Purchase					3,900
Asset Acquisition Purchase Price					$ 64,200
New Drug Applications [Member] \| Testosterone Gel NDA [Member]
GOODWILL AND INTANGIBLE ASSETS
Maximum Royalties Potentially Payable							$ 5,000	$ 5,000
Royalty Rate							5.00%	5.00%
Finite-Lived Intangible Assets, Gross									$ 10,900
Impairment of Intangible Assets, Finite-lived										900	6,700
Assets Held-for-sale, Not Part of Disposal Group, Current								$ 900			$ 900
Abbreviated New Drug Applications [Member] \| Impax Laboratories Inc [Member]
GOODWILL AND INTANGIBLE ASSETS
Payments to Acquire Intangible Assets	$ 2,300
Finite-Lived Intangible Asset, Useful Life	10 years
Finite-Lived Intangible Assets, Gross	$ 1,000
Acquisition Costs Capitalized	$ 100
AstraZeneca AB and AstraZeneca UK Limited [Member] \| New Drug Applications [Member]
GOODWILL AND INTANGIBLE ASSETS
Payments to Acquire Intangible Assets			$ 46,500
Finite-Lived Intangible Asset, Useful Life			10 years
Finite-Lived Intangible Assets, Gross			$ 46,700							$ 46,700
Acquisition Costs Capitalized			$ 200

FAIR VALUE DISCLOSURES (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Contingent Value Rights [Member]
Financial Liabilities Fair Value Disclosure	$ 0	$ 0
Interest rate swap [Member]
Assets, Fair Value Disclosure	0	0
Financial Liabilities Fair Value Disclosure	496	0
Fair Value, Inputs, Level 1 [Member] \| Contingent Value Rights [Member]
Financial Liabilities Fair Value Disclosure	0	0
Fair Value, Inputs, Level 1 [Member] \| Interest rate swap [Member]
Assets, Fair Value Disclosure	0	0
Financial Liabilities Fair Value Disclosure	0	0
Fair Value, Inputs, Level 2 [Member] \| Contingent Value Rights [Member]
Financial Liabilities Fair Value Disclosure	0	0
Fair Value, Inputs, Level 2 [Member] \| Interest rate swap [Member]
Assets, Fair Value Disclosure	0	0
Financial Liabilities Fair Value Disclosure	496	0
Fair Value, Inputs, Level 3 [Member] \| Contingent Value Rights [Member]
Financial Liabilities Fair Value Disclosure	0	0
Fair Value, Inputs, Level 3 [Member] \| Interest rate swap [Member]
Assets, Fair Value Disclosure	0	0
Financial Liabilities Fair Value Disclosure	$ 0	$ 0

FAIR VALUE DISCLOSURES (Details Textual) - USD ($)
$ / shares in Units, $ in Thousands

1 Months Ended

3 Months Ended

12 Months Ended

Aug. 06, 2018

May 31, 2018

Apr. 30, 2018

Dec. 31, 2017

Feb. 28, 2017

Apr. 30, 2016

Jan. 31, 2016

May 31, 2015

Dec. 31, 2016

Dec. 31, 2018

Dec. 31, 2017

Dec. 31, 2016

Dec. 31, 2015

Dec. 31, 2014

Dec. 27, 2018

Fair Values Inputs Assets Quantitative Information [Line Items]

Payments to Acquire Intangible Assets

$ 5,169

$ 97,624

$ 144,494

Convertible Debt, Current

$ 0

112,463

Convertible Debt, Noncurrent

128,208

Finite-Lived Intangible Assets, Gross

284,716

288,215

284,716

Inventory, Finished Goods, Gross

13,901

^[1]

10,620

^[2]

13,901

^[1]

Accrued Royalties Related To Asset Purchase

3,882

Impairment of Intangible Assets, Finite-lived

903

6,685

Assets Held-for-sale, Not Part of Disposal Group, Current

$ 900

900

Goodwill, Impairment Loss

$ 0

Fair Values Inputs Discount Rate

15.00%

Business Combination, Consideration Transferred

$ 16,700

Inventory, Raw Materials, Gross

22,139

$ 27,671

^[2]

22,139

Business Combination Purchase Price Before Adjustments

$ 18,000

Research and Development in Process

1,335

Debt Instrument, Repurchase Amount

25,000

Goodwill [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Goodwill, Impairment Loss

$ 0

Cranford Pharmaceuticals [Member] | Non Compete Agreement [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Finite-Lived Intangible Assets, Gross

$ 600

Finite-Lived Intangible Asset, Useful Life

7 years

Fair Values Inputs Discount Rate

10.00%

Inderal XL [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Payments to Acquire Intangible Assets

$ 20,200

Finite-Lived Intangible Assets, Gross

$ 15,100

Finite-Lived Intangible Asset, Useful Life

10 years

Acquisition Costs Capitalized

$ 40

Inventory, Finished Goods, Gross

$ 5,000

Fair Values Inputs Discount Rate

10.00%

InnoPran XL [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Payments to Acquire Intangible Assets

$ 30,600

Finite-Lived Intangible Assets, Gross

$ 19,000

Finite-Lived Intangible Asset, Useful Life

10 years

Acquisition Costs Capitalized

$ 100

Inventory, Finished Goods, Gross

$ 11,600

Fair Values Inputs Discount Rate

10.00%

InnoPran XL [Member] | Cash [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Payments to Acquire Intangible Assets

$ 600

InnoPran XL [Member] | Line of Credit [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Payments to Acquire Intangible Assets

$ 30,000

Impax Laboratories, Inc. [Member] | Equipment [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Finite-Lived Intangible Assets, Gross

$ 58

Finite-Lived Intangible Asset, Useful Life

5 years

Merck Sharp Dohme B.V. [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Finite-Lived Intangible Assets, Gross

$ 75,000

Finite-Lived Intangible Asset, Useful Life

10 years

Acquisition Costs Capitalized

$ 300

Fair Values Inputs Discount Rate

10.00%

Fair Value, Inputs, Level 3 [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Theoretical Interest Rate For Debt Without Embedded Conversion Option

9.00%

Fair Value, Inputs, Level 1 [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Notes Payable, Fair Value Disclosure

119,500

Convertible Senior Notes [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Long-term Debt, Gross

143,750

$ 118,750

143,750

$ 143,800

Class of Warrant or Right, Exercise Price of Warrants or Rights

$ 96.21

Exercise Price Of Bond Hedge

$ 69.48

Underlying Shares Of Common Stock Convertible Debt

1,709,002

2,068,792

Debt Instrument, Repurchase Amount

25,000

$ 25,000

25,000

Term Loan [Member] | Senior Secured Credit Facility [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Long-term Debt, Gross

72,200

Derivative Asset, Notional Amount

72,200

Term Loan [Member] | Interest rate swap [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Derivative Asset, Notional Amount

72,200

$ 72,200

Interest Rate Derivative Liabilities, at Fair Value

500

New Drug Applications [Member] | Cranford Pharmaceuticals [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Payments to Acquire Intangible Assets

$ 60,000

Finite-Lived Intangible Assets, Gross

$ 52,400

Finite-Lived Intangible Asset, Useful Life

10 years

Acquisition Costs Capitalized

$ 300

Inventory, Finished Goods, Gross

10,900

Funds Held In Escrow In Relation To Asset Purchase

5,000

Accrued Royalties Related To Asset Purchase

$ 3,900

Fair Values Inputs Discount Rate

12.00%

Asset Acquisition Purchase Price

$ 64,200

Prepaid Expense and Other Assets, Current

$ 300

Abbreviated New Drug Applications [Member] | IDT Australia Limited [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Fair Values Inputs Discount Rate

15.00%

Abbreviated New Drug Applications [Member] | IDT Australia Limited [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Fair Values Inputs Discount Rate

10.00%

Abbreviated New Drug Applications [Member] | Impax Laboratories, Inc. [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Payments to Acquire Intangible Assets

$ 2,300

Finite-Lived Intangible Assets, Gross

$ 1,000

Finite-Lived Intangible Asset, Useful Life

10 years

Acquisition Costs Capitalized

$ 100

Contingent Consideration In An Asset Purchase

$ 10,000

Abbreviated New Drug Applications [Member] | Impax Laboratories, Inc. [Member] | Maximum [Member] | Measurement Input, Discount Rate [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Fair Values Inputs Discount Rate

15.00%

Abbreviated New Drug Applications [Member] | Impax Laboratories, Inc. [Member] | Minimum [Member] | Measurement Input, Discount Rate [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Fair Values Inputs Discount Rate

10.00%

Acquired New Drug Applications [Member] | IDT Australia Limited [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Payments to Acquire Intangible Assets

$ 2,700

Finite-Lived Intangible Assets, Gross

$ 2,500

Finite-Lived Intangible Asset, Useful Life

10 years

Acquisition Costs Capitalized

$ 18

Inventory, Raw Materials, Gross

$ 200

Marketing and Distribution Rights [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Finite-Lived Intangible Assets, Gross

11,042

$ 10,423

11,042

Finite-Lived Intangible Asset, Useful Life

4 years 8 months 12 days

Marketing and Distribution Rights [Member] | H2 - Pharma, LLC [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Payments to Acquire Intangible Assets

$ 8,800

Finite-Lived Intangible Assets, Gross

10,000

Accrued Royalties Assumed in Asset Purchase

1,200

Acquisition Costs Capitalized

$ 42

Fair Values Inputs Discount Rate

10.00%

Testosterone Gel NDA [Member] | New Drug Applications [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Finite-Lived Intangible Assets, Gross

$ 10,900

Royalty Rate

5.00%

Impairment of Intangible Assets, Finite-lived

900

6,700

Maximum Royalties Potentially Payable

$ 5,000

Assets Held-for-sale, Not Part of Disposal Group, Current

$ 900

Fair Values Inputs Discount Rate

30.00%

In Process Research and Development [Member] | Impax Laboratories, Inc. [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Research and Development in Process

$ 1,300

In Process Research and Development [Member] | Impax Laboratories, Inc. [Member] | Measurement Input, Discount Rate [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Fair Values Inputs Discount Rate

75.00%

AstraZeneca AB and AstraZeneca UK Limited [Member] | New Drug Applications [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Payments to Acquire Intangible Assets

46,500

Finite-Lived Intangible Assets, Gross

$ 46,700

46,700

Finite-Lived Intangible Asset, Useful Life

10 years

Acquisition Costs Capitalized

$ 200

Fair Values Inputs Discount Rate

10.00%

Contingent Consideration In An Asset Purchase

$ 3,000

Teva Pharmaceuticals USA, Inc. ("Teva") [Member] | Impax Laboratories, Inc. [Member] | Milestone One [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Contingent Liability Not Recognized

$ 25,000

Teva Pharmaceuticals USA, Inc. ("Teva") [Member] | Impax Laboratories, Inc. [Member] | Milestone Two [Member]

Fair Values Inputs Assets Quantitative Information [Line Items]

Contingent Liability Not Recognized

$ 15,000

[1]	Includes finished goods acquired in asset purchases (Note 8).
[2]	Includes inventory acquired in acquisition of WellSpring (Note 2).

STOCKHOLDERS' EQUITY (Details) shares in Thousands	Dec. 31, 2018 $ / shares shares
Class of Warrant, Issued On December 4, 2014 - Expires March 1, 2020 [Member]
Number of Underlying Shares of Common Stock \| shares	1,486
Per Share Exercise Price \| $ / shares	$ 96.21
Class of Warrant, Issued On December 5, 2014 - Expires March 1, 2020 [Member]
Number of Underlying Shares of Common Stock \| shares	223
Per Share Exercise Price \| $ / shares	$ 96.21

STOCKHOLDER'S EQUITY (Details Textual) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Jan. 31, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Oct. 31, 2015
Preferred Stock, Shares Authorized		1,666,667	1,666,667
Preferred Stock, Par or Stated Value Per Share		$ 0.0001	$ 0.0001
Stock Repurchased and Retired During Period, Value				$ 2,500
Class C Special Stock [Member]
Common Stock, Shares Authorized		781,281	781,281
Common Stock, Par or Stated Value Per Share		$ 0.0001	$ 0.0001
Common Stock Conversion Price		$ 90.00	$ 90.00
Common Stock, Shares, Issued		10,864	10,864
Common Stock, Shares, Outstanding		10,864	10,864
Warrant [Member]
Class of Warrant or Right, Outstanding		1,700,000
Stock Repurchase Program [Member]
Stock Repurchase Program, Authorized Amount					$ 25,000
Stock Repurchased and Retired During Period, Shares	65,000
Stock Repurchased and Retired During Period, Value	$ 2,500
Common Stock [Member]
Common Stock, Shares Authorized		33,300,000
Common Stock, Par or Stated Value Per Share		$ 0.0001
Common Stock, Shares, Issued		11,900,000	11,700,000
Common Stock, Shares, Outstanding		11,900,000	11,700,000
Stock Repurchased and Retired During Period, Value		$ 0	$ 0	$ 0

STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands	12 Months Ended
STOCK-BASED COMPENSATION (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Allocated Share-based Compensation Expense	$ 6,700	$ 6,100	$ 6,100
2008 Plan [Member]
Allocated Share-based Compensation Expense	6,680	6,022	6,042
Cost of sales [Member] \| 2008 Plan [Member]
Allocated Share-based Compensation Expense	87	86	60
Research and development Expense [Member] \| 2008 Plan [Member]
Allocated Share-based Compensation Expense	771	677	112
Selling, general and administrative Expenses [Member] \| 2008 Plan [Member]
Allocated Share-based Compensation Expense	$ 5,822	$ 5,259	$ 5,870

STOCK-BASED COMPENSATION (Details 1)	12 Months Ended
STOCK-BASED COMPENSATION (Details 1)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Dividend yield	0.00%	0.00%	0.00%
Minimum [Member]
Expected option life (years)	5 years 5 months 23 days	5 years 3 months 29 days	5 years 6 months
Risk-free interest rate	2.64%	1.93%	1.14%
Expected stock price volatility	55.10%	50.30%	49.40%
Maximum [Member]
Expected option life (years)	6 years 3 months	7 years	6 years 3 months
Risk-free interest rate	2.93%	2.33%	1.55%
Expected stock price volatility	60.60%	57.40%	51.70%

STOCK-BASED COMPENSATION (Details 2) - Options [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Option Shares
Outstanding at the beginning of the period (in shares)	767	578	474
Granted (in shares)	156	207	265
Exercised (in shares)	(142)	(13)	(127)
Forfeited (in shares)	(18)	(5)	(32)
Expired (in shares)	(4)	0	(2)
Outstanding at the end of the period (in shares)	759	767	578	474
Exercisable at the end of the period (in shares)	326
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 42.93	$ 39.28	$ 29.40
Granted (in dollars per share)	57.60	51.66	45.60
Exercised (in dollars per share)	19.47	15.92	11.79
Forfeited (in dollars per share)	60.17	53.29	47.84
Expired (in dollars per share)	74.53	0	139.32
Outstanding at the end of the period (in dollars per share)	49.74	42.93	39.28	$ 29.40
Exercisable at the end of the period (in dollars per share)	45.88
Weighted Average Grant-date Fair Value
Granted (in dollars per share)	$ 31.76	$ 27.04	$ 22.45
Weighted Average Remaining Term (years)
Outstanding at the end of the period weighted average remaining term	7 months 18 days	7 years 9 months 18 days	8 years 2 months 12 days	8 years 2 months 12 days
Exercisable at the end of the period weighted average remaining term	6 years 7 months 6 days
Aggregate Intrinsic Value
Outstanding at the beginning of the period intrinsic value (in dollars)	$ 16,785	$ 12,928	$ 10,136
Exercised at the end of the period intrinsic value (in dollars)	5,863	542	5,837
Outstanding at the end of the period intrinsic value (in dollars)	2,221	$ 16,785	$ 12,928	$ 10,136
Exercisable at the end of the period intrinsic value (in dollars)	$ 1,949

STOCK-BASED COMPENSATION (Details 3) - $ / shares shares in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Unvested, Shares, Outstanding, Beginning of period	85	63	63
Unvested Shares, Granted	65	50	38
Unvested Shares, Vested	(33)	(28)	(30)
Unvested Shares, Forfeited	0	0	(8)
Unvested Shares, Outstanding, End of period	117	85	63	63
Weighted Average Grant Date Fair Value, Outstanding, Beginning of period	$ 48.34	$ 45.72	$ 42.72
Weighted Average Grant Date Fair Value, Granted	58.11	49.51	40.59
Weighted Average Grant Date Fair Value, Vested	47.34	44.49	33.89
Weighted Average Grant Date Fair Value, Forfeited	0	0	46.05
Weighted Average Grant Date Fair Value, Outstanding, End of period	$ 54.04	$ 48.34	$ 45.72	$ 42.72
Weighted Average Remaining Term (years)	2 years 1 month 6 days	2 years 7 months 6 days	2 years 2 months 12 days	2 years 2 months 12 days

STOCK-BASED COMPENSATION (Details Textual) - USD ($) $ in Thousands			3 Months Ended	12 Months Ended
	Mar. 15, 2017	May 06, 2016	Jun. 30, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense				$ 6,700	$ 6,100	$ 6,100
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense				1,200	600	1,000
Proceeds from Stock Options Exercised				$ 2,978	353	1,570
Former Chief Financial Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total Cost For Officer Transition Non Stock Based Compensation			$ 400
Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant				600,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period				10 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition				2 years 4 months 24 days
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options				$ 8,600
Proceeds from Stock Options Exercised				2,800		200	$ 1,500
Employee Service Share-based Compensation, Tax Benefit from Exercise of Stock Options				$ 600		200	$ 700
Options [Member] \| Former Chief Financial Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense			$ 900
Stock Option Grants Vested During Period Due To Modification		25,167
Stock Options Modified During Period	2,000
Restricted Stock [Member] \| Former Chief Financial Officer [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share Based Payment Awards Other Than Stock Options Modified During Period	4,050
Non-Employee Director Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period				10 years
2008 Plan [Member] \| Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period				4 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition				2 years 1 month 6 days
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options				$ 4,700
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense				$ 102	68	25
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized				200,000
Share-based Compensation Arrangement by Share-based Payment Award, Discount from Market Price, Purchase Date				15.00%
Employee Stock Purchase Plan [Member] \| Research and development Expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense				$ 16	1
Employee Stock Purchase Plan [Member] \| Selling, general and administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense				75	61	23
Employee Stock Purchase Plan [Member] \| Cost of Sales Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense				$ 11	$ 6	$ 2

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Current income tax provision:
Federal									$ 7,985	$ 13,175	$ 11,717
State									1,751	690	1,321
Foreign									0	0	0
Total									9,736	13,865	13,038
Deferred income tax (benefit)/provision:
Federal									(4,630)	4,065	(8,387)
State									(556)	(556)	(658)
Foreign									(214)	0	0
Total									(5,400)	3,509	(9,045)
Change in valuation allowance									221	51	134
Excess tax benefit from stock-based compensation awards									0	0	617
Total provision for income taxes	$ (1,910)	$ (1,329)	$ (726)	$ (592)	$ (13,979)	$ (1,654)	$ (1,269)	$ (523)	$ 4,557	$ 17,425	$ 4,744

INCOME TAXES (Details 1)	12 Months Ended
INCOME TAXES (Details 1)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
US Federal statutory rate	21.00%	35.00%	35.00%
State taxes, net of Federal benefit	2.40%	2.00%	2.10%
Foreign taxes	26.50%	0.00%	0.00%
Impact of Tax Cuts and Jobs Act	0.00%	81.90%	0.00%
International tax structure impacts	0.00%	0.00%	23.30%
Domestic production activities deduction	0.00%	(8.80%)	(14.40%)
Change in valuation allowance	(26.50%)	0.00%	1.60%
Stock-based compensation – no windfall tax benefits	(0.70%)	1.00%	5.70%
Stock-based compensation – windfall tax benefit	(1.10%)	(0.20%)	0.00%
Change in tax rates and other	0.00%	(4.30%)	1.40%
Total income tax provision/(benefit)	21.60%	106.60%	54.70%

INCOME TAXES (Details 2) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Accruals and advances	$ 7,748	$ 5,254
Bond hedge	3,019	5,617
Accruals for chargebacks and returns	7,132	4,927
Inventory	1,228	857
Intangible asset	9,393	6,355
Net operating loss carryforwards	5,604	3,029
Other	4,682	3,030
Total deferred tax assets	38,806	29,069
Deferred tax liabilities:
Depreciation	(4,437)	(1,110)
Debt discount	(1,316)	(3,256)
Intangible assets	(11)	(11)
Other	(2,813)	(1,699)
Total deferred tax liabilities	(8,577)	(6,076)
Valuation allowance	(2,265)	(326)
Deferred tax assets, net of deferred tax liabilities and valuation allowance	$ 27,964	$ 22,667

INCOME TAXES (Details Textual) $ in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016	Dec. 31, 2018 CAD ($)	Aug. 06, 2018 USD ($)
Deferred Tax Assets, Valuation Allowance	$ 2,265	$ 326
Operating Loss Carryforwards, Limitations on Use	approximately $0.8 million per year.
Effective Income Tax Rate Reconciliation, Change in Enacted Tax Rate, Amount		$ 13,400
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%	35.00%	35.00%
Deferred Tax Assets, Net	$ 27,964	$ 22,667
Operating Loss Carryforwards	12,100
ANI Canada [Member]
Deferred Tax Assets, Valuation Allowance	$ 1,900
Deferred Tax Assets, Net					$ 1,700
Operating Loss Carryforwards				$ 14.1
Scenario, Plan [Member]
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate, Percent	21.00%

COMMITMENTS AND CONTINGENCIES (Details Textual) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
COMMITMENTS AND CONTINGENCIES
Revenue, Net	$ 57,122	$ 50,703	$ 47,268	$ 46,483	$ 47,286	$ 48,164	$ 44,764	$ 36,628		$ 201,576	$ 176,842	$ 128,622
Percentage Of Royalties On Net Sales Of Unapproved Products										less than 1%	less than 1%	less than 1%
Four Vendors [Member] \| Scenario, Forecast [Member]
COMMITMENTS AND CONTINGENCIES
Long-term Purchase Commitment, Amount									$ 10,100
Unapproved Products [Member]
COMMITMENTS AND CONTINGENCIES
Revenue, Net										$ 24,900	$ 27,600	$ 34,300
Unapproved Products [Member] \| Contract Customer [Member]
COMMITMENTS AND CONTINGENCIES
Revenue, Net										$ 2,000	$ 2,000	$ 1,500

SUBSEQUENT EVENTS (Details Textual) - Subsequent Event [Member] - USD ($) $ in Millions	1 Months Ended
	Jan. 31, 2019	Feb. 28, 2019
Interest rate swap [Member] \| Delayed Draw Term Loan [Member]
Subsequent Event [Line Items]
Derivative Asset, Notional Amount		$ 118.0
Derivative, Swaption Interest Rate		2.47%
Teva Pharmaceuticals Inc [Member]
Subsequent Event [Line Items]
Payment in Lieu of Future Royalties	$ 16.0

QUARTERLY FINANCIAL DATA (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Net revenues	$ 57,122	$ 50,703	$ 47,268	$ 46,483	$ 47,286	$ 48,164	$ 44,764	$ 36,628	$ 201,576	$ 176,842	$ 128,622
Total operating expenses	45,677	40,589	40,005	39,946	39,907	38,833	37,770	32,003	166,217	148,513	108,543
Operating income	11,445	10,114	7,263	6,537	7,379	9,331	6,994	4,625	35,359	28,329	20,079
Provision for income taxes	(1,910)	(1,329)	(726)	(592)	(13,979)	(1,654)	(1,269)	(523)	4,557	17,425	4,744
Net income/(loss)	$ 5,430	$ 5,037	$ 2,777	$ 2,250	$ (9,629)	$ 4,720	$ 2,681	$ 1,152	$ 15,494	$ (1,076)	$ 3,934
Basic and diluted earnings/(loss) per share:
Basic earnings/(loss) per share	$ 0.46	$ 0.43	$ 0.24	$ 0.19	$ (0.83)	$ 0.41	$ 0.23	$ 0.10	$ 1.31	$ (0.09)	$ 0.34
Diluted earnings/(loss) per share	$ 0.46	$ 0.42	$ 0.23	$ 0.19	$ (0.83)	$ 0.40	$ 0.23	$ 0.10	$ 1.30	$ (0.09)	$ 0.34

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(19))
-URI http://asc.fasb.org/extlink&oid=114873790&loc=SL114874131-224263

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1337-109256

Reference 3: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 52
-URI http://asc.fasb.org/extlink&oid=109256448&loc=d3e4984-109258

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(21))
-URI http://asc.fasb.org/extlink&oid=115205541&loc=SL114868664-224227

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1252-109256

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(23))
-URI http://asc.fasb.org/extlink&oid=114873765&loc=SL114874048-224260

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=109260490&loc=SL5780133-109256

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 52
-URI http://asc.fasb.org/extlink&oid=109256448&loc=d3e4984-109258

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1252-109256

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(23))
-URI http://asc.fasb.org/extlink&oid=114873765&loc=SL114874048-224260

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1337-109256

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(21))
-URI http://asc.fasb.org/extlink&oid=115205541&loc=SL114868664-224227

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=109260490&loc=SL5780133-109256

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(19))
-URI http://asc.fasb.org/extlink&oid=114873790&loc=SL114874131-224263

+ Details