Accrued Expenses and Other Long-Term Liabilities
|9 Months Ended|
Sep. 30, 2015
|Payables and Accruals [Abstract]|
|Accrued Expenses and Other Long-Term Liabilities||
10. Accrued Expenses and Other Long-Term Liabilities
In December 2012, the Company acquired certain manufacturing rights from Ovamed GmbH (“Ovamed”) and agreed to pay an aggregate of $1.5 million, in three installments of $0.5 million on December 12, 2014, 2015 and 2016, respectively. As of September 30, 2015, the Company had not made any payments to Ovamed. On February 27, 2015, Ovamed, the Company’s supplier and manufacturer of TSO, filed for insolvency in Germany, a process similar to U.S. bankruptcy. The accrual is recorded on the Company’s unaudited condensed consolidated balance sheets as a current accrued expense of $1.5 million as of September 30, 2015, as a result of the bankruptcy notification. This obligation was recorded at its full value; accretion of the obligation was nil and $39,000 for the three month period ended September 30, 2015 and 2014, respectively, and $167,000 and $114,000 for the nine months ended September 30, 2015 and 2014, respectively, and is recorded as interest expense on the unaudited condensed consolidated statements of operations. On April 20, 2015, the Company decided to no longer pursue the development of TSO. As a result, the Company terminated all on-going TSO trials including its Phase 2A clinical trial in pediatric patients with autism spectrum disorder. A preliminary analysis of data from this trial failed to demonstrate any signal of activity.
The Company also had a collaboration agreement with Dr. Falk Pharma (“Falk”) in connection with the development of TSO. Under this agreement, Falk was to provide the Company with the Final Clinical Study Report (“CSR”). On August 3, 2015, Falk notified the Company that the CSR was complete and that Falk was prepared to grant the Company access to the CSR. While the Company disputes the adequacy of the CSR and does not believe any payment is due to Falk, upon receipt of access to the CSR, the Company recorded a liability of €2.5 million ($2.8 million) in accrued expenses as of September 30, 2015.
Accrued expenses and other long-term liabilities consisted of the following:
The entire disclosure for accounts payable and accrued liabilities at the end of the reporting period.
Reference 1: http://www.xbrl.org/2003/role/presentationRef