SEC Filing | Avadel Pharmaceuticals PLC

View:

Download DOC

Download PDF

Download XLS

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________

FORM 8-K

___________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 8, 2018

___________________

AVADEL PHARMACEUTICALS PLC

(Exact name of registrant as specified in its charter)

___________________

Ireland
(State or Other Jurisdiction
of Incorporation)

001-37977
(Commission File Number)

98-1341933

(I.R.S. Employer
Identification No.)

Block 10-1
Blanchardstown Corporate Park, Ballycoolin

Dublin 15, Ireland
(Address of Principal Executive Offices)

Not Applicable

(Zip Code)

Registrant’s telephone number, including area code: +353 1 485 1200

___________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ¨

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

Item 2.02 Results of Operations and Financial Condition.

On March 8, 2018, Avadel Pharmaceuticals plc (the “Company”) issued a press release announcing its earnings for the quarter ended December 31, 2017 and the full year 2017. That press release is attached as Exhibit 99.1 and is incorporated herein by reference.

The information responsive to this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act, except as may be expressly set forth by specific reference in such a filing.

Item 7.01 Regulation FD Disclosure.

On March 8, 2018, the Company posted to its website a set of presentation materials that it will use during its earnings call and webcast to assist participants with understanding the Company’s financial results for the quarter ended December 31, 2017 and full year 2017, and certain additional matters to be discussed during such call and webcast, including updates on the Company’s FT218 (“REST-ON”) product with respect to Phase III trial progress and information relating to the product’s pharmacokinetic properties, and updates on the status of the Company’s commercialization efforts with respect to Noctiva^®. A copy of this presentation is attached hereto as Exhibit 99.2.

The information responsive to this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d)

Exhibits

99.1		Press release dated March 8, 2018, issued by Avadel Pharmaceuticals plc*

99.2		Presentation materials dated March 8, 2018*

* This information shall be deemed to be “furnished” and not filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	AVADEL PHARMACEUTICALS PLC


	By:	/s/ Michael F. Kanan
		Michael F. Kanan
		Senior Vice President, Chief Financial Officer

Date: March 8, 2018

Exhibit Index

99.1		Press release dated March 8, 2018, issued by Avadel Pharmaceuticals plc*

99.2		Presentation materials dated March 8, 2018*

* This information shall be deemed to be “furnished” and not filed herewith.

Exhibit 99.1

Avadel Pharmaceuticals Reports Fourth Quarter and Full Year 2017 Results

Fourth quarter and full year revenues of $34.2 million and $172.7 million, respectively

Dublin, Ireland –March 8, 2018 - Avadel Pharmaceuticals plc (Nasdaq: AVDL), "Avadel" or "the Company," today announced its financial results for the fourth quarter and full year 2017.

Highlights Include:

•

Total revenues for fourth quarter and full year 2017 were $34.2 million and $172.7 million, compared to $43.1 million and $150.2 million in the prior year periods.

•

GAAP net loss for the fourth quarter was $(9.3) million, or $(0.24) per diluted share, compared to GAAP net income of $4.7 million, or $0.11 per diluted share, during the same period last year. GAAP net income for the full year 2017 was $67.3 million or $1.61 per diluted share compared to GAAP net loss of $(41.3) million or $(1.00) per diluted share during the same period last year.

•

Adjusted net loss for the fourth quarter was $(11.0) million, or $(0.28) per diluted share, compared to an adjusted net income of $0.1 million, or $0.00 per diluted share, during the same period last year. ⁽¹⁾

•

Cash and marketable securities at December 31, 2017 were $94.1 million, down from $154.2 million, at December 31, 2016.

Michael Anderson, Avadel's Chief Executive Officer, remarked, "We ended the fourth quarter and full year with strong financial results, coming in near the top end of our revenue guidance. During the fourth quarter we continued the foundational work required to prepare Noctiva™ for launch while we successfully built the necessary infrastructure to enter the urology market. The sales, marketing, market access and medical teams, have experienced and highly qualified personnel, many with urology expertise.

Mr. Anderson continued, “As we entered 2018, we continued the execution of our strategic plan by narrowing our focus to center around our urology, sleep and hospital businesses by divesting our pediatric products. Immediately following the divestiture, we completed a $144 million capital raise, which now ensures that we are well capitalized to launch Noctiva, complete our REST-ON Phase III trial, and continue seeking strategically aligned acquisition opportunities.”

Fourth Quarter 2017 Results

Revenues during the fourth quarter of 2017 were $34.2 million, compared to $43.1 million during the same period last year. The decrease on a year-over-year basis was primarily due to a decline in Bloxiverz® revenue due to additional competition in 2017. GAAP net loss for the fourth quarter was $(9.3) million, or $(0.24) per diluted share, compared to GAAP net income of $4.7 million, or $0.11 per diluted share, during the same period last year. This decrease was primarily attributed to lower revenues and higher sales and marketing expenses associated with the launch of Noctiva.

Research and development expenses totaled $12.1 million for the fourth quarter of 2017. Sequentially, research and development expenses were up from $8.1 million in the third quarter of 2017 as a result of increased spend on the Company’s REST-On Phase III clinical trial including costs associated with increased spending on new patient enrollment initiatives, the investigation of additional clinical sites, and the testing and scale up of commercial contract manufacturing services.

¹ Non-GAAP financial measure. Descriptions of Avadel’s non-GAAP financial measures are included under the caption Non-GAAP Disclosures and Adjustments included within this press release and reconciliations of such non-GAAP financial measures to their most closely applicable GAAP financial measures are found in the Supplemental Information section herein.

Selling, general and administrative expenses were $23.1 million in the fourth quarter of 2017. Sequentially, selling, general and administrative expenses were up from $11.6 million in the third quarter of 2017 as a result of higher costs of services associated with the launch of Noctiva, which the Company acquired in September 2017.

Adjusted net loss⁽¹⁾ for the fourth quarter of 2017 was $(11.0) million, or $(0.28) per diluted share, compared to an adjusted net income of $0.1 million, or $0.00 per diluted share, in the same period last year. The decrease in adjusted net income is largely attributable to an increase in Noctiva sales and marketing costs and a decrease in revenues when compared to the prior year period. Please see the Supplemental Information section within this document for a reconciliation of adjusted net income and adjusted diluted EPS to the respective GAAP amounts.

2018 Guidance

"As a result of the recent divestiture of our pediatrics products, we are revising our 2018 full year revenue guidance to $105 to $125 million, from $110 to $130 million when we guided in December 2017. We are reaffirming our Noctiva revenue guidance of $10 to $20 million and the associated spending of $50 to $55 million. Also, as a result of the pediatrics divestiture, we are lowering our full year SG&A guidance to $80 to $90 million, from the $85 to $95 million in our previous guidance. Overall, the divestiture of the pediatrics products is expected to be accretive to operating income and cash flow. We continue to expect R&D spending be $40 to $50 million. Having recently completed our exchangeable notes offering, cash interest expense is expected to be approximately $6 million. We expect a non- GAAP tax benefit of 0% to 10%,” said Mike Kanan, Avadel's Chief Financial Officer.

Conference Call

A conference call to discuss these results and provide an update on Noctiva launch progress, the REST-ON trial, and new information on FT 218 has been scheduled for Thursday March 8, 2018 at 10:00 a.m. ET. A question and answer period will follow management's prepared remarks. To access the conference call, investors are invited to dial (844) 388-0559 (U.S. and Canada) or (216) 562-0393 (International). The conference ID number is 2299207. A live audio webcast and accompanying slides can be accessed by visiting the “News & Events” page of the Company’s Investors website at www.avadel.com. A replay of the webcast will be archived on Avadel’s website for 90 days following the event.

About Avadel Pharmaceuticals plc:

Avadel Pharmaceuticals plc (NASDAQ: AVDL) is a branded specialty pharmaceutical company passionately committed to providing solutions for overlooked and unmet medical needs through patient-focused, innovative products. Our current portfolio of products and product candidates focus on urology and sleep medicine (CNS), in addition to our suite of hospital products. The Company is headquartered in Dublin, Ireland with operations in St. Louis, Missouri, United States and Lyon, France. For more information, please visit www.avadel.com.

^{1 Non-GAAP
financial measure. Descriptions of Avadel’s non-GAAP financial measures are included under the caption Non-GAAP Disclosures
and Adjustments included within this press release and reconciliations of such non-GAAP financial measures to their most closely
applicable GAAP financial measures are found in the Supplemental Information section herein.}

Safe Harbor: This press release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The words “will,” “may,” “believe,” “expect,” “anticipate,” “estimate,” “project” and similar expressions, and the negatives thereof, identify forward-looking statements, each of which speaks only as of the date the statement is made. Although we believe that our forward-looking statements are based on reasonable assumptions within the bounds of our knowledge of our business and operations, our business is subject to significant risks and as a result there can be no assurance that actual results of our research, development and commercialization activities and our results of operations will not differ materially from the results contemplated in such forward-looking statements. These risks include: (i) risks relating to our exchangeable senior notes including use of the net proceeds from the offering of the notes and other future events related to the notes; (ii) risks relating to the divestiture of our former pediatric business including whether such divestiture will be accretive to our operating income and cash flow; (iii) risks relating to our license agreement with Serenity Pharmaceuticals, LLC including that our internal analyses may overstate the market opportunity in the United States for the drug desmopressin acetate (the “Drug”) or we may not effectively exploit such market opportunity, that significant safety or drug interaction problems could arise with respect to the Drug, that we may not successfully increase awareness of nocturia and the potential benefits of the Drug, and that the need for management to focus attention on the development and commercialization of the Drug could cause our ongoing business operations to suffer; and (iv) the other risks, uncertainties and contingencies described in the Company's filings with the U.S. Securities and Exchange Commission, including our annual report on Form 10-K for the year ended December 31, 2016, and our Current Report on Form 8-K filed on February 14, 2018, in particular disclosures that may be set forth in particular under the captions “Forward-Looking Statements” and “Risk Factors,” including without limitation: our dependence on a small number of products and customers for the majority of our revenues; the possibility that our Bloxiverz®,Vazculep® and Akovaz® products, which are not patent protected, could face substantial competition resulting in a loss of market share or forcing us to reduce the prices we charge for those products; the possibility that we could fail to successfully complete the research and development for pipeline products we are evaluating for potential application to the FDA pursuant to our "unapproved-to-approved" strategy, or that competitors could complete the development of such products and apply for FDA approval of such products before us; the possibility that our products may not reach the commercial market or gain market acceptance; our need to invest substantial sums in research and development in order to remain competitive; our dependence on certain single providers for development of several of our drug delivery platforms and products; our dependence on a limited number of suppliers to manufacture our products and to deliver certain raw materials used in our products; the possibility that our competitors may develop and market technologies or products that are more effective or safer than ours, or obtain regulatory approval and market such technologies or products before we do; the challenges in protecting the intellectual property underlying our drug delivery platforms and other products; and our dependence on key personnel to execute our business plan.

Non-GAAP Disclosures and Adjustments

Avadel discloses certain non-GAAP financial measures, including adjusted net income and loss and adjusted net income and loss per diluted share, as management believes that a comparison of its current and historical results would be difficult if the disclosures were limited to financial measures prepared only in accordance with generally accepted accounting principles (GAAP) in the U.S. In addition to reporting its financial results in accordance with GAAP, Avadel reports certain non-GAAP results that exclude, if any, fair value remeasurements of its contingent consideration, impairment of intangible assets, if any, amortization of intangible assets, restructuring costs, foreign exchange gains and losses on assets and liabilities denominated in foreign currencies, non-cash license revenue adjustments and impacts of US tax reform, but includes the operating cash flows plus any unpaid accrued amounts associated with the contingent consideration, in order to supplement investors' and other readers' understanding and assessment of the Company's financial performance. The Company's management uses these non-GAAP measures internally for forecasting, budgeting and measuring its operating performance. Investors and other readers should review the related GAAP financial measures and the reconciliation of non-GAAP measures to their most closely comparable GAAP measure set forth below and should consider non-GAAP measures only as a supplement to, not as a substitute for or as a superior measure to, measures of financial performance prepared in accordance with GAAP. The table provided within the following “Supplemental Information” section reconciles GAAP net income and loss and diluted earnings or loss per share to the corresponding adjusted amounts.

*******

Contacts:	Michael F. Kanan

	Chief Financial Officer

	Phone:	(636) 449-1844

	Email : mkanan@avadel.com

	Lauren Stival

	Sr. Director, Investor Relations & Corporate Communications

	Phone:	(636) 449-5866

	Email:	lstival@avadel.com

AVADEL PHARMACEUTICALS PLC

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(In thousands, except per share data)

	Three-Months Ended						Twelve-Months Ended
	December 31,						December 31,
	2017			2016			2017			2016

Revenues:
Product sales and services	$	34,328		$	42,364		$	172,337		$	147,222
License and research revenue		(80	)		721			404			3,024
Total revenue		34,248			43,085			172,741			150,246
Operating expenses:
Cost of products and services sold		4,048			2,591			16,301			13,248
Research and development expenses		12,125			13,476			34,218			34,611
Selling, general and administrative expenses		23,058			10,688			58,862			44,179
Intangible asset amortization		1,967			2,970			3,659			13,888
(Gain) loss - changes in fair value of related party contingent consideration		(1,034	)		(3,704	)		(31,141	)		49,285
Restructuring costs		(631	)		—			2,542			—
Total operating expenses		39,533			26,021			84,441			155,211
Operating income (loss)		(5,285	)		17,064			88,300			(4,965	)
Investment income, net		161			555			2,850			1,635
Interest expense, net		(263	)		(261	)		(1,052	)		(963	)
Other income (expense) - changes in fair value of related party payable		(903	)		(413	)		2,085			(6,548	)
Foreign exchange (loss) gain		(587	)		1,135			(714	)		1,123
Income (loss) before income taxes		(6,877	)		18,080			91,469			(9,718	)
Income tax provision		2,385			13,346			24,215			31,558
Net income (loss)	$	(9,262	)	$	4,734		$	67,254		$	(41,276	)

Net income (loss) per share - basic	$	(0.24	)	$	0.11		$	1.66		$	(1.00	)
Net income (loss) per share - diluted	$	(0.24	)	$	0.11		$	1.61		$	(1.00	)

Weighted average number of shares outstanding - basic		39,350			41,269			40,465			41,248
Weighted average number of shares outstanding - diluted		39,350			42,808			41,765			41,248

AVADEL PHARMACEUTICALS PLC

CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data)

	As of December 31,
	2017			2016

ASSETS
Current assets:
Cash and cash equivalents	$	16,564		$	39,215
Marketable securities		77,511			114,980
Accounts receivable		14,764			17,839
Inventories, net		6,157			3,258
Prepaid expenses and other current assets		8,958			5,894
Total current assets		123,954			181,186
Property and equipment, net		3,001			3,320
Goodwill		18,491			18,491
Intangible assets, net		92,289			22,837
Research and development tax credit receivable		5,272			1,775
Income tax deferred charge		—			10,342
Other		9,099			7,531
Total assets	$	252,106		$	245,482

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt	$	111		$	268
Current portion of long-term related party payable		24,893			34,177
Accounts payable		7,478			7,105
Deferred revenue		2,007			2,223
Accrued expenses		50,849			17,222
Income taxes		241			1,200
Other		597			226
Total current liabilities		86,176			62,421
Long-term debt, less current portion		156			547
Long-term related party payable, less current portion		73,918			135,170
Other		7,293			5,275
Total liabilities		167,543			203,413

Shareholders' equity:
Preferred shares, $0.01 nominal value; 50,000 shares authorized; none issued or outstanding at December 31, 2017 and December 31, 2016, respectively		—			—
Ordinary shares, nominal value of $0.01; 500,000 shares authorized; 41,463 issued and 39,346 outstanding at December 31, 2017, and 41,371 issued and outstanding at December 31, 2016		414			414
Treasury shares, at cost, 2,117 and 0 shares held at December 31, 2017 and December 31, 2016, respectively		(22,361	)		—
Additional paid-in capital		393,478			385,020
Accumulated deficit		(263,702	)		(319,800	)
Accumulated other comprehensive loss		(23,266	)		(23,565	)
Total shareholders' equity		84,563			42,069
Total liabilities and shareholders' equity	$	252,106		$	245,482

AVADEL PHARMACEUTICALS PLC

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Years Ended December 31,
	2017			2016

Cash flows from operating activities:
Net income (loss)	$	67,254		$	(41,276	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		4,883			14,489
Loss on disposal of property and equipment		—			110
(Gain) loss on sale of marketable securities		(411	)		826
Foreign exchange loss (gain)		714			(349	)
Grants recognized in research and development expenses		(539	)		—
Remeasurement of related party acquisition-related contingent consideration		(31,141	)		49,285
Remeasurement of related party financing-related contingent consideration		(2,085	)		6,548
Change in deferred tax and income tax deferred charge		3,556			(4,000	)
Stock-based compensation expense		8,072			14,679
Net changes in assets and liabilities
Accounts receivable		3,075			(10,050	)
Inventories		(2,899	)		1,831
Prepaid expenses and other current assets		(3,741	)		3,412
Research and development tax credit receivable		(3,141	)		397
Accounts payable & other current liabilities		596			(434	)
Deferred revenue		(216	)		(2,923	)
Accrued expenses		13,110			6,764
Accrued income taxes		(959	)		1,778
Earn-out payments for related party contingent consideration in excess of acquisition-date fair value		(31,636	)		(20,252	)
Royalty payments for related party payable in excess of original fair value		(4,428	)		(2,469	)
Other long-term assets and liabilities		(3,402	)		535
Net cash provided by operating activities		16,662			18,901
Cash flows from investing activities:
Purchases of property and equipment		(591	)		(1,201	)
Acquisitions of businesses, including cash acquired and other adjustments		—			628
Purchase of intangible assets		(53,111	)		—
Proceeds from sales of marketable securities		189,009			71,546
Purchases of marketable securities		(151,005	)		(107,603	)
Net cash used in investing activities		(15,698	)		(36,630	)
Cash flows from financing activities:
Reimbursement of conditional R&D grants		(115	)		(277	)
Earn-out payments for related party contingent consideration		(1,246	)		(6,892	)
Royalty payments for related party payable		—			(1,225	)
Cash proceeds from issuance of ordinary shares and warrants		404			440
Share repurchases		(22,361	)		—
Net cash used in financing activities		(23,318	)		(7,954	)
Effect of foreign currency exchange rate changes on cash and cash equivalents		(297	)		(166	)
Net decrease in cash and cash equivalents		(22,651	)		(25,849	)
Cash and cash equivalents - beginning balance		39,215			65,064
Cash and cash equivalents - ending balance	$	16,564		$	39,215
Supplemental disclosures of cash flow information:
Income tax paid	$	19,143		$	27,180
Interest paid		1,050			788

AVADEL PHARMACEUTICALS PLC

SUPPLEMENTAL INFORMATION

(In thousands, except per share data)

	Three-Months Ended December 31,					Twelve-Months Ended December 31,
Revenues	2017			2016		2017		2016
	(Unaudited)

Bloxiverz	$	7,763		$	16,938	$	45,304	$	82,896
Vazculep		8,140			10,629		38,046		39,796
Akovaz		15,436			11,263		80,546		16,831
Other		2,989			3,534		8,441		7,699
Total product sales and services		34,328			42,364		172,337		147,222
License and research revenue		(80	)		721		404		3,024
Total revenue	$	34,248		$	43,085	$	172,741	$	150,246

				GAAP to Non-GAAP adjustments for the three-months ended December 31, 2017
				Exclude																Include
	GAAP			Intangible asset amortization			Foreign exchange gain (loss)		Restructuring impacts			License revenue adjustment		US tax reform impact			Contingent related party payable fair value remeasurement			Contingent related party payable paid/accrued			Total adjustments			Adjusted GAAP
Revenues:
Product sales and services	$	34,328		$	—		$	—	$	—		$	—	$	—		$	—		$	—		$	—		$	34,328
License and research revenue		(80	)		—			—		—			342		—			—			—			342			262
Total revenue		34,248			—			—		—			342		—			—			—			342			34,590
Operating expenses:
Cost of products and services sold		4,048			—			—		—			—		—			—			—			—			4,048
Research and development expenses		12,125			—			—		—			—		—			—			—			—			12,125
Selling, general and administrative expenses		23,058			—			—		—			—		—			—			—			—			23,058
Intangible asset amortization		1,967			(1,967	)		—		—			—		—			—			—			(1,967	)		—
(Gain) loss - changes in fair value of related party contingent consideration		(1,034	)		—			—		—			—		—			1,034			5,966			7,000			5,966
Restructuring costs		(631	)		—			—		631			—		—			—			—			631			—
Total operating expenses		39,533			(1,967	)		—		631			—		—			1,034			5,966			5,664			45,197
Operating income (loss)		(5,285	)		1,967			—		(631	)		342		—			(1,034	)		(5,966	)		(5,322	)		(10,607	)
Investment income, net		161			—			—		—			—		—			—			—			—			161
Interest expense, net		(263	)		—			—		—			—		—			—			—			—			(263	)
Other income (expense) - changes in fair value of related party payable		(903	)		—			—		—			—		—			903			(818	)		85			(818	)
Foreign exchange (loss) gain		(587	)		—			587		—			—		—			—			—			587			—
Income (loss) before income taxes		(6,877	)		1,967			587		(631	)		342		—			(131	)		(6,784	)		(4,650	)		(11,527	)
Income tax provision		2,385			706			—		—			—		(3,513	)		299			(433	)		(2,941	)		(556	)
Net income (loss)	$	(9,262	)	$	1,261		$	587	$	(631	)	$	342	$	3,513		$	(430	)	$	(6,351	)	$	(1,709	)	$	(10,971	)

Net income (loss) per share - diluted⁽¹⁾	$	(0.24	)	$	0.03		$	0.01	$	(0.02	)	$	0.01	$	0.09		$	(0.01	)	$	(0.16	)	$	(0.04	)	$	(0.28	)
Weighted average number of shares outstanding - diluted		39,350			39,350			39,350		39,350			39,350		39,350			39,350			39,350			39,350			39,350

⁽¹⁾

Net income (loss) per share - diluted is calculated by dividing Net income (loss) by the Weighted average number of shares outstanding - diluted. Note, when recalculated using this method, the balances in the Total adjustment and Adjusted GAAP columns may not cross-foot as a result of rounding to full precision.

				GAAP to Non GAAP adjustments for the three-months ended December 31, 2016
				Exclude															Include
	GAAP			Intangible asset amortization			Foreign exchange gain (loss)			Cross-border merger impacts			Purchase accounting adjustments - FSC			Contingent related party payable fair value remeasurement			Contingent related party payable paid/accrued			Total adjustments			Adjusted GAAP

Revenues:
Product sales and services	$	42,364		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	42,364
License and research revenue		721			—			—			—			—			—			—			—			721
Total revenue		43,085			—			—			—			—			—			—			—			43,085
Operating expenses:
Cost of products and services sold		2,591			—			—			—			1,019			—			—			1,019			3,610
Research and development expenses		13,476			—			—			—			—			—			—			—			13,476
Selling, general and administrative expenses		10,688			—			—			—			—			—			—			—			10,688
Intangible asset amortization		2,970			(2,970	)		—			—			—			—			—			(2,970	)		—
(Gain) loss - changes in fair value of related party contingent consideration		(3,704	)		—			—			—			—			3,704			7,645			11,349			7,645
Total operating expenses		26,021			(2,970	)		—			—			1,019			3,704			7,645			9,398			35,419
Operating income (loss)		17,064			2,970			—			—			(1,019	)		(3,704	)		(7,645	)		(9,398	)		7,666
Investment income, net		555			—			—			—			—			—			—			—			555
Interest expense, net		(261	)		—			—			—			—			—			—			—			(261	)
Other income (expense) - changes in fair value of related party payable		(413	)		—			—			—			—			413			(1,018	)		(605	)		(1,018	)
Foreign exchange gain		1,135			—			(1,135	)		—			—			—			—			(1,135	)		—
Income (loss) before income taxes		18,080			2,970			(1,135	)		—			(1,019	)		(3,291	)		(8,663	)		(11,138	)		6,942
Income tax provision		13,346			1,066			—			(6,754	)		(366	)		82			(499	)		(6,471	)		6,875
Net income (loss)	$	4,734		$	1,904		$	(1,135	)	$	6,754		$	(653	)	$	(3,373	)	$	(8,164	)	$	(4,667	)	$	67

Net (loss) income per share - diluted ⁽¹⁾	$	0.11		$	0.04		$	(0.03	)	$	0.16		$	(0.02	)	$	(0.08	)	$	(0.19	)	$	(0.11	)	$	—
Weighted average number of shares outstanding - diluted		42,808			42,808			42,808			42,808			42,808			42,808			42,808			42,808			42,808

⁽¹⁾

	GAAP to Non-GAAP adjustments for the twelve-months ended December 31, 2017
	Exclude																						Include
	GAAP			Intangible asset amortization			Foreign exchange gain loss		Restructuring impacts			Purchase accounting adjustment - FSC			License revenue adjustment		US tax reform impact			Contingent related party payable fair value remeasurement			Contingent related party payable paid/ accrued			Total adjustment			Adjusted GAAP

Revenues:
Product sales and services	$	172,337		$	—		$	—	$	—		$	—		$	—	$	—		$	—		$	—		$	—		$	172,337
License and research revenue		404			—			—		—			—			1,442		—			—			—			1,442			1,846
Total revenue		172,741			—			—		—			—			1,442		—			—			—			1,442			174,183
Operating expenses:
Cost of products and services sold		16,301			—			—		—			(46	)		—		—			—			—			(46	)		16,255
Research and development expenses		34,218			—			—		—			—			—		—			—			—			—			34,218
Selling, general and administrative expenses		58,862			—			—		—			—			—		—			—			—			—			58,862
Intangible asset amortization		3,659			(3,659	)		—		—			—			—		—			—			—			(3,659	)		—
(Gain) loss - changes in fair value of related party contingent consideration		(31,141	)		—			—		—			—			—		—			31,141			31,362			62,503			31,362
Restructuring costs		2,542			—			—		(2,542	)		—			—		—			—			—			(2,542	)		—
Total operating expenses		84,441			(3,659	)		—		(2,542	)		(46	)		—		—			31,141			31,362			56,256			140,697
Operating income (loss)		88,300			3,659			—		2,542			46			1,442		—			(31,141	)		(31,362	)		(54,814	)		33,486
Investment income, net		2,850			—			—		—			—			—		—			—			—			—			2,850
Interest expense, net		(1,052	)		—			—		—			—			—		—			—			—			—			(1,052	)
Other income (expense) - changes in fair value of related party payable		2,085			—			—		—			—			—		—			(2,085	)		(4,246	)		(6,331	)		(4,246	)
Foreign exchange (loss) gain		(714	)		—			714		—			—			—		—			—			—			714			—
Income (loss) before income taxes		91,469			3,659			714		2,542			46			1,442		—			(33,226	)		(35,608	)		(60,431	)		31,038
Income tax provision		24,215			1,309			—		—			17			—		(3,513	)		(1,477	)		(2,255	)		(5,919	)		18,296
Net income (loss)	$	67,254		$	2,350		$	714	$	2,542		$	29		$	1,442	$	3,513		$	(31,749	)	$	(33,353	)	$	(54,512	)	$	12,742

Net income (loss) per share - diluted(1)	$	1.61		$	0.06		$	0.02	$	0.06		$	—		$	0.03	$	0.08		$	(0.76	)	$	(0.80	)	$	(1.31	)	$	0.31

Weighted average number of shares outstanding - diluted		41,765			41,765			41,765		41,765			41,765			41,765		41,765			41,765			41,765			41,765			41,765

⁽¹⁾

				GAAP to Non-GAAP adjustments for the twelve-months ended December 31, 2016
				Exclude															Include
	GAAP			Intangible asset amortization			Foreign exchange (gain)/loss			Cross-border merger impacts			Purchase accounting adjustments - FSC			Contingent related party payable fair value remeasurements			Contingent related party payable paid/accrued			Total adjustments			Adjusted GAAP

Revenues:
Product sales and services	$	147,222		$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	147,222
License and research revenue		3,024			—			—			—			—			—			—			—			3,024
Total revenue		150,246			—			—			—			—			—			—			—			150,246
Operating expenses:
Cost of products and services sold		13,248			—			—			—			(506	)		—			—			(506	)		12,742
Research and development expenses		34,611			—			—			—			—			—			—			—			34,611
Selling, general and administrative expenses		44,179			—			—			—			—			—			—			—			44,179
Intangible asset amortization		13,888			(13,888	)		—			—			—			—			—			(13,888	)		—
(Gain) loss - changes in fair value of related party contingent consideration		49,285			—			—			—			—			(49,285	)		26,966			(22,319	)		26,966
Total operating expenses		155,211			(13,888	)		—			—			(506	)		(49,285	)		26,966			(36,713	)		118,498
Operating income (loss)		(4,965	)		13,888			—			—			506			49,285			(26,966	)		36,713			31,748
Investment income, net		1,635			—			—			—			—			—			—			—			1,635
Interest expense, net		(963	)		—			—			—			—			—			—			—			(963	)
Other income (expense) - changes in fair value of related party payable		(6,548	)		—			—			—			—			6,548			(3,636	)		2,912			(3,636	)
Foreign exchange (loss) gain		1,123			—			(1,123	)		—			—			—			—			(1,123	)		—
Income (loss) before income taxes		(9,718	)		13,888			(1,123	)		—			506			55,833			(30,602	)		38,502			28,784
Income tax provision		31,558			4,986			—			(6,754	)		182			3,068			(1,667	)		(185	)		31,373
Net income (loss)	$	(41,276	)	$	8,902		$	(1,123	)	$	6,754		$	324		$	52,765		$	(28,935	)	$	38,687		$	(2,589	)

Net (loss) income per share - diluted ⁽¹⁾	$	(1.00	)	$	0.22		$	(0.03	)	$	0.16		$	0.01		$	1.28		$	(0.70	)	$	0.94		$	(0.06	)
Weighted average number of shares outstanding - diluted		41,248			41,248			41,248			41,248			41,248			41,248			41,248			41,248			41,248

⁽¹⁾

Exhibit 99.2

Fourth Quarter & Full Year 2017 Results March 8, 2018

2 Safe Harbor This presentation may include forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 and Section 21 E of the Securities Exchange Act of 1934 . The words “will,” “may,” “believe,” “expect,” “anticipate,” “estimate,” “project” and similar expressions, and the negatives thereof, identify forward - looking statements, each of which speaks only as of the date the statement is made . Although we believe that our forward - looking statements are based on reasonable assumptions within the bounds of our knowledge of our business and operations, our business is subject to significant risks and as a result there can be no assurance that actual results of our research, development and commercialization activities and our results of operations will not differ materially from the results contemplated in such forward - looking statements . These risks include : ( i ) risks relating to our exchangeable senior notes including use of the net proceeds from the offering of the notes and other future events related to the notes ; (ii) risks relating to the divestiture of our former pediatric business including whether such divestiture will be accretive to our operating income and cash flow ; (iii) risks relating to our license agreement with Serenity Pharmaceuticals, LLC including that our internal analyses may overstate the market opportunity in the United States for the drug desmopressin acetate (the “Drug”) or we may not effectively exploit such market opportunity, that significant safety or drug interaction problems could arise with respect to the Drug, that we may not successfully increase awareness of nocturia and the potential benefits of the Drug, and that the need for management to focus attention on the development and commercialization of the Drug could cause our ongoing business operations to suffer ; and (iv) the other risks, uncertainties and contingencies described in the Company's filings with the U . S . Securities and Exchange Commission, including our annual report on Form 10 - K for the year ended December 31 , 2016 , and our Current Report on Form 8 - K filed on February 14 , 2018 , in particular disclosures that may be set forth in particular under the captions “Forward - Looking Statements” and “Risk Factors,” including without limitation : our dependence on a small number of products and customers for the majority of our revenues ; the possibility that our Bloxiverz ®, Vazculep ® and Akovaz ® products, which are not patent protected, could face substantial competition resulting in a loss of market share or forcing us to reduce the prices we charge for those products ; the possibility that we could fail to successfully complete the research and development for pipeline products we are evaluating for potential application to the FDA pursuant to our "unapproved - to - approved" strategy, or that competitors could complete the development of such products and apply for FDA approval of such products before us ; the possibility that our products may not reach the commercial market or gain market acceptance ; our need to invest substantial sums in research and development in order to remain competitive ; our dependence on certain single providers for development of several of our drug delivery platforms and products ; our dependence on a limited number of suppliers to manufacture our products and to deliver certain raw materials used in our products ; the possibility that our competitors may develop and market technologies or products that are more effective or safer than ours, or obtain regulatory approval and market such technologies or products before we do ; the challenges in protecting the intellectual property underlying our drug delivery platforms and other products ; and our dependence on key personnel to execute our business plan .

3 Call Outline I. Fourth quarter & full year 2017 overview II. REST - ON Phase III trial update III. FT 218: Pharmacokinetic overview IV. Market update: i. Sodium oxybate use and persistence rates ii. Concomitant use of sodium oxybate and sodium valproate iii. Noctiva ™ V. Q&A

4 Recent Highlights Financial Overview • 4Q 2017 revenues of $34.2 million & adjusted LPS of $(0.28) • 2017 total revenues of $172.7 million & adjusted EPS of $0.31 • Repurchased $22.3 million of shares • Operating cash flow positive • $137.7 million in net proceeds from convertible offering (2/14/18) Strategic Execution • In - licensed Noctiva ™ in September 2017 • Continued enrollment in REST - ON Phase III trial of FT 218 in narcolepsy patients • Granted Orphan Drug Designation for FT 218 (1/10/18) • Reduced R&D footprint in France • Developed 4 th sterile injectable product • Divested four pediatric products (2/12/18)

5 Fourth Quarter & Full Year 2017 Financial Results

6 Non - GAAP Financial Results *Reconciliations from GAAP to Non - GAAP can be found in the appendix (in $000s, except for per share amounts 12/31/17 09/30/17 12/31/16 12/31/17 12/31/16 Total revenue 34,590$ 39,675$ 43,085$ 174,183$ 150,246$ Cost of products and services sold 4,048 3,790 3,610 16,255 12,742 Research and development expenses 12,125 8,095 13,476 34,218 34,611 Selling, general and admin expenses 23,058 11,563 10,688 58,862 44,179 Intangible asset amortization - - - - - Restructuring costs - - - - - Operating expenses 39,231 23,448 27,774 109,335 91,532 Contingent consideration payments and accruals 5,966 7,264 7,645 31,362 26,966 Operating income (loss) (10,607) 8,963 7,666 33,486 31,748 Interest and other income (expense), net (102) 847 294 1,798 672 Other expense - contingent consideration payments and accruals (818) (963) (1,018) (4,246) (3,636) Income (loss) before income taxes (11,527) 8,847 6,942 31,038 28,784 Income tax (benefit) provision (556) 5,100 6,875 18,296 31,373 Net income (loss) (10,971)$ 3,747$ 67$ 12,742$ (2,589)$ Diluted earnings (loss) per share (0.28)$ 0.09$ -$ 0.31$ (0.06)$ Weighted average number of shares outstanding - diluted 39,350 41,339 42,808 41,765 41,248 Three Months Ended Twelve Months Ended (in $000, except for per share amounts)

7 GAAP Financial Results (in $000s, except for per share amounts 12/31/17 09/30/17 12/31/16 12/31/17 12/31/16 Total revenue 34,248$ 39,675$ 43,085$ 172,741$ 150,246$ Cost of products and services sold 4,048 3,790 2,591 16,301 13,248 Research and development expenses 12,125 8,095 13,476 34,218 34,611 Selling, general and admin expenses 23,058 11,563 10,688 58,862 44,179 Intangible asset amortization 1,967 564 2,970 3,659 13,888 Restructuring costs (631) (549) - 2,542 - Operating expenses 40,567 23,463 29,725 115,582 105,926 (Gain) loss - changes in fair value of related party contingent consideration (1,034) (9,906) (3,704) (31,141) 49,285 Operating income (loss) (5,285) 26,118 17,064 88,300 (4,965) Interest and other income (expense), net (689) 714 1,429 1,084 1,795 Other income (expense) - changes in fair value of related party payable (903) 768 (413) 2,085 (6,548) Income (loss) before income taxes (6,877) 27,600 18,080 91,469 (9,718) Income tax provision 2,385 5,921 13,346 24,215 31,558 Net income (loss) (9,262)$ 21,679$ 4,734$ 67,254$ (41,276)$ Diluted earnings (loss) per share (0.24)$ 0.52$ 0.11$ 1.61$ (1.00)$ Three Months Ended Twelve Months Ended (in $000, except for per share amounts)

8 Cash Flow Summary in $000's 2017 2016 TOTAL Cash and Marketable Securities Beginning Balance 154,195$ 144,802$ Operating cash flows (excl tax and earnout payments) - base business 86,870 68,801 Noctiva operating spending (15,000) - Earnout/Royalty Payments (37,311) (30,837) Tax Payments (19,143) (27,180) Acquisition of Noctiva Asset (53,111) - Share Repurchases (22,361) - Capital Spending (591) (1,201) Other 527 (190) Change in Total (60,120) 9,393 Ending Balance 94,075$ 154,195$ Twelve Months Ended December 31,

9 2018 Non - GAAP Guidance 2018 Guidance Current Previous Total Revenues $1 05 M - $1 25 M $1 10 M - $1 30 M Noctiva Revenues $10M - $20M $10M - $20M R&D Expense $ 40 M - $ 50 M $ 40 M - $ 50 M Income Ta x Benefit 0 % - 10 % - Guidance update driven by divestiture of pediatric assets in February 2018

10 REST - ON Phase III Clinical Update & PK Overview

11 REST - ON Status Update NDA filing by year end 2018 no longer expected Recent enrollment rate increases are not meeting expectations Activating new clinical sites and increasing patient engagement initiatives to improve screening and enrollment Update on trial to be provided in 2H 2018

12 Pharmacokinetics: FT 218 vs. Twice - Nightly • 3 FT 218 prototypes at 4.5g vs approved 2 x 2.25g doses • Cmax of FT 218 avoids high peak levels of sodium oxybate associated with second dose • With preferred formulations blood concentration higher first 4 hours with gradual decline • FT 218 similar or lower blood levels to 2x nightly dosing at hour 8 – minimize “ hangover”effect • Similar “onset of action” to 2x - nightly • Identical AUC to 2x - nightly

13 Pharmacokinetics: FT 218 at 4.5g, 6g & 7.5g Doses • PK for doses at 4.5g, 6g, 7.5g • Consistency and linearity of response as dose increased • Robust and reproducible across dose strengths • Remove inconsistency in timing or missing of second dose

14 Market Update: Sodium Oxybate & Noctiva ™

15 Sodium Oxybate: Market Research Highlights 3 - year longitudinal claims analysis & market assessment identifying 262K diagnosed narcolepsy patients Of 262K patients, 194K were treated pharmacologically 19K unique patients (~10%) received 2x - nightly sodium oxybate <1% of 19K patients received sodium valproate ~ 50% of the 19K sodium oxybate users discontinue treatment within 12 months – patients report tolerability & difficulty with dosing

16 Sodium Oxybate: Market Research Highlights Significant interest from patients in 1x - night given tolerability & dosing Cost assessment: Current & only approved product’s price increased ~1,600% 1 since 2006 Est. 70% of 2x - nightly product revenue increase in last 5 years was price driven, with an est. 30% driven by volume 2 Findings align with multipronged approach to address approval from clinical, regulatory & legal pathways 1) Gold Standard Drug Database 2) Internal estimates

17 Noctiva ™: Launch Update Accelerated launch >4 weeks ahead of schedule – shipments to wholesalers have begun Patient assistance programs fully operational, including retail & specialty / mail order Fully staffed sales force initiating early access programs & PI launch 4/1/18; Branded launch 5/1 Established Noctiva ™ in own category in 3 major compendia services A primary focus is to secure Part D coverage for 2019 with rollbacks onto 2018 formularies

18 Question & Answer

19 Appendix

20 Revenues by Product (GAAP) in $000's Q1 2017 Q2 2017 Q3 2017 Q4 2017 Full Year 2017 Full Year 2016 Bloxiverz 13,902$ 13,719$ 9,920$ 7,763$ 45,304$ 82,896$ Vazculep 10,179 10,154 9,573 8,140 38,046 39,796 Akovaz 25,638 20,912 18,561 15,435 80,546 16,831 Other 2,038 2,320 1,093 2,990 8,441 7,699 Total product sales and services 51,757$ 47,105$ 39,147$ 34,328$ 172,337$ 147,222$ License and research revenue 750$ (794)$ 528$ (80)$ 404 3,024$ Total revenues 52,507$ 46,311$ 39,675$ 34,248$ 172,741$ 150,246$ (in $000) Products:

21 GAAP to Non - GAAP Reconciliations: 4Q 2017 Include GAAP Intangible asset amortization Foreign exchange (loss) gain Restructuring impacts License Revenue Adjustment U.S. Federal Tax Law Change Contingent related party payable fair value remeasurements Contingent related party payable paid/accrued Total Adjustments Adjusted GAAP Product sales and services 34,328$ -$ -$ -$ -$ -$ -$ -$ -$ 34,328$ License and research revenue (80) - - - 342 - - - 342 262 Total revenue 34,248 - - - 342 - - - 342 34,590 - - - - - - - Cost of products and services sold 4,048 - - - - - - - - 4,048 Research and development expenses 12,125 - - - - - - - - 12,125 Selling, general and administrative expenses 23,058 - - - - - - - - 23,058 Intangible asset amortization 1,967 (1,967) - - - - - - (1,967) - Changes in fair value of related party contingent consideration (1,034) - - - - - 1,034 5,966 7,000 5,966 Restructuring costs (631) - - 631 - - - - 631 - Total operating expenses 39,533 (1,967) - 631 - - 1,034 5,966 5,664 45,197 Operating income (loss) (5,285) 1,967 - (631) 342 - (1,034) (5,966) (5,322) (10,607) - - - - - - - Investment Income 161 - - - - - - - - 161 Interest Expense (263) - - - - - - - - (263) Other Expense - changes in fair value of related party payable (903) - - - - - 903 (818) 85 (818) Foreign exchange (loss) gain (587) - 587 - - - - - 587 - - - - - - - - Income (loss) before income taxes (6,877) 1,967 587 (631) 342 - (131) (6,784) (4,650) (11,527) Income tax provision (benefit) 2,385 706 - - - (3,513) 299 (433) (2,941) (556) Net (loss) income (9,262)$ 1,261$ 587$ (631)$ 342$ 3,513$ (430)$ (6,351)$ (1,709)$ (10,971)$ Net (loss) income per share - diluted (0.24)$ 0.03$ 0.01$ (0.02)$ 0.01$ 0.09$ (0.01)$ (0.15)$ (0.04)$ (0.28)$ Weighted average number of shares outstanding - Diluted 39,350 39,350 39,350 39,350 39,350 39,350 39,350 39,350 39,350 39,350 Exclude GAAP to Non-GAAP adjustments for the three months ended December 31, 2017

22 GAAP to Non - GAAP Reconciliations: 3Q 2017 Include GAAP Intangible asset amortization Foreign exchange (loss) gain Cross-border merger impacts Purchase accounting adjustments - FSC Contingent related party payable fair value remeasurements Contingent related party payable paid/accrued Total Adjustments Adjusted GAAP Product sales and services 42,364$ -$ -$ -$ -$ -$ -$ -$ 42,364$ License and research revenue 721 - - - - - - - 721 Total revenue 43,085 - - - - - - - 43,085 Cost of products and services sold 2,591 - - - 1,019 - - 1,019 3,610 Research and development expenses 13,476 - - - - - - - 13,476 Selling, general and administrative expenses 10,688 - - - - - - - 10,688 Intangible asset amortization 2,970 (2,970) - - - - - (2,970) - Changes in fair value of related party contingent consideration (3,704) - - - - 3,704 7,645 11,349 7,645 Restructuring costs - - - - - - - - - Total operating expenses 26,021 (2,970) - - 1,019 3,704 7,645 9,398 35,419 Operating income (loss) 17,064 2,970 - - (1,019) (3,704) (7,645) (9,398) 7,666 Investment Income 555 - - - - - - - 555 Interest Expense (261) - - - - - - - (261) Other Expense - changes in fair value of related party payable (413) - - - - 413 (1,018) (605) (1,018) Foreign exchange (loss) gain 1,135 - (1,135) - - - - (1,135) - Income (loss) before income taxes 18,080 2,970 (1,135) - (1,019) (3,291) (8,663) (11,138) 6,942 Income tax provision (benefit) 13,346 1,066 - (6,754) (366) 82 (499) (6,471) 6,875 Net income (loss) 4,734$ 1,904$ (1,135)$ 6,754$ (653)$ (3,373)$ (8,164)$ (4,667)$ 67$ Net income (loss) per share - diluted 0.11$ 0.04$ (0.03)$ 0.16$ (0.02)$ (0.08)$ (0.19)$ (0.11)$ -$ Weighted average number of shares outstanding - Diluted 42,808 42,808 42,808 42,808 42,808 42,808 42,808 42,808 42,808 Exclude GAAP to Non-GAAP adjustments for the three months ended December 31, 2016

23 GAAP to Non - GAAP Reconciliations: 4Q 2016 Include GAAP Intangible asset amortization Foreign exchange (loss) gain Cross-border merger impacts Purchase accounting adjustments - FSC Contingent related party payable fair value remeasurements Contingent related party payable paid/accrued Total Adjustments Adjusted GAAP Product sales and services 42,364$ -$ -$ -$ -$ -$ -$ -$ 42,364$ License and research revenue 721 - - - - - - - 721 Total revenue 43,085 - - - - - - - 43,085 Cost of products and services sold 2,591 - - - 1,019 - - 1,019 3,610 Research and development expenses 13,476 - - - - - - - 13,476 Selling, general and administrative expenses 10,688 - - - - - - - 10,688 Intangible asset amortization 2,970 (2,970) - - - - - (2,970) - Changes in fair value of related party contingent consideration (3,704) - - - - 3,704 7,645 11,349 7,645 Restructuring costs - - - - - - - - - Total operating expenses 26,021 (2,970) - - 1,019 3,704 7,645 9,398 35,419 Operating income (loss) 17,064 2,970 - - (1,019) (3,704) (7,645) (9,398) 7,666 Investment Income 555 - - - - - - - 555 Interest Expense (261) - - - - - - - (261) Other Expense - changes in fair value of related party payable (413) - - - - 413 (1,018) (605) (1,018) Foreign exchange (loss) gain 1,135 - (1,135) - - - - (1,135) - Income (loss) before income taxes 18,080 2,970 (1,135) - (1,019) (3,291) (8,663) (11,138) 6,942 Income tax provision (benefit) 13,346 1,066 - (6,754) (366) 82 (499) (6,471) 6,875 Net income (loss) 4,734$ 1,904$ (1,135)$ 6,754$ (653)$ (3,373)$ (8,164)$ (4,667)$ 67$ Net income (loss) per share - diluted 0.11$ 0.04$ (0.03)$ 0.16$ (0.02)$ (0.08)$ (0.19)$ (0.11)$ -$ Weighted average number of shares outstanding - Diluted 42,808 42,808 42,808 42,808 42,808 42,808 42,808 42,808 42,808 Exclude GAAP to Non-GAAP adjustments for the three months ended December 31, 2016

24 GAAP to Non - GAAP Reconciliations: FY 2017 Include GAAP Intangible asset amortization Foreign exchange (loss) gain Restructuring impacts Purchase accounting adjustments - FSC License Revenue Adjustment U.S. Federal Tax Law Change Contingent related party payable fair value remeasurements Contingent related party payable paid/accrued Total Adjustments Adjusted GAAP Product sales and services 172,337$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 172,337$ License and research revenue 404 - - - - 1,442 - - - 1,442 1,846 Total revenue 172,741 - - - - 1,442 - - - 1,442 174,183 Cost of products and services sold 16,301 - - - (46) - - - - (46) 16,255 Research and development expenses 34,218 - - - - - - - - - 34,218 Selling, general and administrative expenses 58,862 - - - - - - - - - 58,862 Intangible asset amortization 3,659 (3,659) - - - - - - - (3,659) - Changes in fair value of related party contingent consideration (31,141) - - - - - - 31,141 31,362 62,503 31,362 Restructuring costs 2,542 - - (2,542) - - - - - (2,542) - Total operating expenses 84,441 (3,659) - (2,542) (46) - - 31,141 31,362 56,256 140,697 Operating income (loss) 88,300 3,659 - 2,542 46 1,442 - (31,141) (31,362) (54,814) 33,486 Investment Income 2,850 - - - - - - - - - 2,850 Interest Expense (1,052) - - - - - - - - - (1,052) Other Expense - changes in fair value of related party payable 2,085 - - - - - - (2,085) (4,246) (6,331) (4,246) Foreign exchange (loss) gain (714) - 714 - - - - - - 714 - - - - - - - - - Income (loss) before income taxes 91,469 3,659 714 2,542 46 1,442 - (33,226) (35,608) (60,431) 31,038 Income tax provision (benefit) 24,215 1,309 - - 17 - (3,513) (1,477) (2,255) (5,919) 18,296 Net income (loss) 67,254$ 2,350$ 714$ 2,542$ 29$ 1,442$ 3,513$ (31,749)$ (33,353)$ (54,512)$ 12,742$ Net income (loss) per share - diluted 1.61$ 0.06$ 0.02$ 0.06$ -$ 0.03$ 0.08$ (0.76)$ (0.80)$ (1.31)$ 0.31$ Weighted average number of shares outstanding - Diluted 41,765 41,765 41,765 41,765 41,765 41,765 41,765 41,765 41,765 41,765 41,765 Exclude GAAP to Non-GAAP adjustments for the twelve months ended December 31, 2017

25 GAAP to Non - GAAP Reconciliations: FY 2016 Include GAAP IntAIgible asset amortization Foreign exchange (loss) gain Cross-border merger impacts Purchase accounting adjustments - FSC Contingent related party payable fair value remeasurements Contingent related party payable paid/accrued Total Adjustments Adjusted GAAP Product sales and services 147,222$ -$ -$ -$ -$ -$ -$ -$ 147,222$ License and research revenue 3,024 - - - - - - - 3,024 Total revenue 150,246 - - - - - - - 150,246 Cost of products and services sold 13,248 - - - (506) - - (506) 12,742 Research and development expenses 34,611 - - - - - - - 34,611 Selling, general and administrative expenses 44,179 - - - - - - - 44,179 Intangible asset amortization 13,888 (13,888) - - - - - (13,888) - Changes in fair value of related party contingent consideration 49,285 - - - - (49,285) 26,966 (22,319) 26,966 Restructuring costs - - - - - - - - - Total operating income (expenses) 155,211 (13,888) - - (506) (49,285) 26,966 (36,713) 118,498 Operating income (loss) (4,965) 13,888 - - 506 49,285 (26,966) 36,713 31,748 Investment Income 1,635 - - - - - - - 1,635 Interest Expense (963) - - - - - - - (963) Other Expense - changes in fair value of related party payable (6,548) - - - - 6,548 (3,636) 2,912 (3,636) Foreign exchange (loss) gain 1,123 - (1,123) - - - - (1,123) - Income (loss) before income taxes (9,718) 13,888 (1,123) - 506 55,833 (30,602) 38,502 28,784 Income tax provision (benefit) 31,558 4,986 - (6,754) 182 3,068 (1,667) (185) 31,373 Net income (loss) (41,276)$ 8,902$ (1,123)$ 6,754$ 324$ 52,765$ (28,935)$ 38,687$ (2,589)$ Net income (loss) per share - diluted (1.00)$ 0.22$ (0.03)$ 0.16$ 0.01$ 1.28$ (0.70)$ 0.94$ (0.06)$ Weighted average number of shares outstanding - Diluted 41,248 41,248 41,248 41,248 41,248 41,248 41,248 41,248 41,248 Exclude GAAP to Non-GAAP adjustments for the twelve months ended December 31, 2016