Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2019	Aug. 02, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Entity Registrant Name	MELINTA THERAPEUTICS, INC. /NEW/
Entity Central Index Key	0001461993
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Smaller Reporting Company	true
Emerging Growth Company	false
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		13,750,691

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets
Cash and equivalents	$ 90,343	$ 81,808
Receivables (See Note 3)	19,081	22,485
Inventory	42,043	41,341
Prepaid expenses and other current assets	5,292	3,848
Total current assets	156,759	149,482
Property and equipment, net	1,309	1,586
Intangible assets, net	220,949	229,196
Other assets (See Note 3)	61,355	61,326
Total assets	440,372	441,590
Current liabilities
Accounts payable	5,792	16,765
Accrued expenses	27,260	33,924
Deferred purchase price and other liabilities (See Notes 3 and 4)	83,031	78,394
Accrued interest on notes payable	4,305	4,485
Warrant liability	129	38
Conversion liability (See Note 4)	11,869	0
Total current liabilities	132,386	133,606
Long-term liabilities
Notes payable, net of debt discount and costs (See Note 4)	93,821	110,476
Convertible notes payable to related parties, net of debt discount and costs (See note 4)	63,239	0
Other long-term liabilities	9,259	7,444
Total long-term liabilities	166,319	117,920
Total liabilities	298,705	251,526
Commitments and contingencies (See Note 10)
Shareholders' Equity
Preferred stock; $.001 par value; 5,000,000 shares authorized; -0- shares issued or outstanding at June 30, 2019, and December 31, 2018, respectively	0	0
Common stock; $.001 par value; 80,000,000 shares authorized; 11,829,897 and 11,204,050 issued and outstanding at June 30, 2019, and December 31, 2018, respectively	12	11
Additional paid-in capital	926,152	909,896
Accumulated deficit	(784,497)	(719,843)
Total shareholders’ equity	141,667	190,064
Total liabilities and shareholders’ equity	$ 440,372	$ 441,590

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	80,000,000	80,000,000
Common stock, shares issued (in shares)	11,829,897	11,204,050
Common stock, shares outstanding (in shares)	11,829,897	11,204,050

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenue
Total revenue	$ 15,955	$ 12,022	$ 30,039	$ 26,863
Operating expenses:
Cost of goods sold	8,639	10,989	16,004	18,675
Research and development	3,527	15,813	8,891	31,942
Selling, general and administrative	30,932	34,946	56,873	69,570
Total operating expenses	43,098	61,748	81,768	120,187
Loss from operations	(27,143)	(49,726)	(51,729)	(93,324)
Other income (expense):
Interest income	210	63	397	273
Interest expense	(8,176)	(10,659)	(15,279)	(20,855)
Interest expense (related party, see Note 4)	(1,365)	0	(1,929)	0
Change in fair value of warrant and conversion liabilities	261	2,389	6,276	26,474
Loss on extinguishment of debt	0	0	(346)	(2,595)
Other income (expense)	8	32	(65)	36
Grant income (expense)	25	2,121	(37)	4,779
Other income (expense), net	(9,037)	(6,054)	(10,983)	8,112
Net loss	$ (36,180)	$ (55,780)	$ (62,712)	$ (85,212)
Basic and diluted net loss per share (in usd per share)	$ (3.07)	$ (6.92)	$ (5.42)	$ (11.96)
Basic and diluted weighted average shares outstanding (in shares)	11,801,874	8,059,471	11,567,250	7,126,687
Product sales, net
Revenue
Total revenue	$ 13,825	$ 9,152	$ 25,600	$ 20,998
Contract research
Revenue
Total revenue	2,130	2,870	3,539	5,865
License
Revenue
Total revenue	$ 0	$ 0	$ 900	$ 0

Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2017		4,399,788
Beginning balance at Dec. 31, 2017	$ 72,336	$ 4	$ 644,991	$ (572,659)
Share-based compensation	955		955
Issuance of common shares (in shares)		40
Issuance of common shares	3		3
Vesting of restricted stock grants (n shares)		5,521
Issuance of common shares in connection with IDB Transaction (in shares)		1,865,301
Issuance of common shares in connection with IDB Transaction	145,963	$ 2	145,961
Net loss	(29,432)			(29,432)
Ending balance (in shares) at Mar. 31, 2018		6,270,650
Ending balance at Mar. 31, 2018	199,833	$ 6	791,910	(592,083)
Beginning balance (in shares) at Dec. 31, 2017		4,399,788
Beginning balance at Dec. 31, 2017	72,336	$ 4	644,991	(572,659)
Net loss	(85,212)
Ending balance (in shares) at Jun. 30, 2018		11,202,050
Ending balance at Jun. 30, 2018	260,974	$ 11	908,826	(647,863)
Beginning balance (in shares) at Mar. 31, 2018		6,270,650
Beginning balance at Mar. 31, 2018	199,833	$ 6	791,910	(592,083)
Share-based compensation	1,649		1,649
Issuance of common shares (in shares)		4,928,000
Issuance of common shares	115,272	$ 5	115,267
Vesting of restricted stock grants (n shares)		3,400
Net loss	(55,780)			(55,780)
Ending balance (in shares) at Jun. 30, 2018		11,202,050
Ending balance at Jun. 30, 2018	260,974	$ 11	908,826	(647,863)
Beginning balance (in shares) at Dec. 31, 2018		11,204,049
Beginning balance at Dec. 31, 2018	190,064	$ 11	909,896	(719,843)
Share-based compensation	909		909
Issuance of common shares (in shares)		1,705
Issuance of common shares	8		8
Vesting of restricted stock grants (n shares)		24,143
Issuance of common shares upon conversion of convertible notes (in shares)		550,000
Issuance of common shares upon conversion of convertible notes	2,767	$ 1	2,766
Discount on issuance of convertible notes (deemed shareholder contribution) (Note 4)	11,242		11,242
Net loss	(26,532)			(26,532)
Ending balance (in shares) at Mar. 31, 2019		11,779,897
Ending balance at Mar. 31, 2019	176,516	$ 12	924,821	(748,317)
Beginning balance (in shares) at Dec. 31, 2018		11,204,049
Beginning balance at Dec. 31, 2018	190,064	$ 11	909,896	(719,843)
Net loss	(62,712)
Ending balance (in shares) at Jun. 30, 2019		11,829,897
Ending balance at Jun. 30, 2019	141,667	$ 12	926,152	(784,497)
Beginning balance (in shares) at Mar. 31, 2019		11,779,897
Beginning balance at Mar. 31, 2019	176,516	$ 12	924,821	(748,317)
Share-based compensation	1,331		1,331
Vesting of restricted stock grants (n shares)		50,000
Net loss	(36,180)			(36,180)
Ending balance (in shares) at Jun. 30, 2019		11,829,897
Ending balance at Jun. 30, 2019	$ 141,667	$ 12	$ 926,152	$ (784,497)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Operating activities
Net loss	$ (62,712)	$ (85,212)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	8,421	8,494
Non-cash interest expense	7,909	12,225
Share-based compensation	2,207	2,373
Change in fair value of warrant and conversion liabilities	(6,276)	(26,474)
Loss on extinguishment of debt	346	2,595
Gain on extinguishment of lease liabilities	(914)	0
Provision for inventory obsolescence	392	2,532
Changes in operating assets and liabilities:
Receivables	3,404	(3,169)
Inventory	(1,060)	(4,628)
Prepaid expenses and other current assets and liabilities	(581)	519
Accounts payable	(10,901)	4,632
Accrued expenses	(4,605)	(1,323)
Accrued interest on notes payable	(181)	4,105
Deposits on inventory	0	22,983
Other non-current assets and liabilities	1,554	565
Net cash used in operating activities	(62,997)	(105,749)
Investing activities
IDB acquisition	0	(166,383)
Purchases of intangible assets	(1,209)	(2,000)
Purchases of property and equipment	(12)	(927)
Net cash used in investing activities	(1,221)	(169,310)
Financing activities
Proceeds from the issuance of notes payable	0	111,421
Proceeds from the issuance of convertible notes payable to related party	75,000	0
Costs associated with the issuance of notes payable	(2,183)	(6,455)
Proceeds from the issuance of warrants	0	33,264
Proceeds from the issuance of royalty agreement	0	1,472
Purchase of notes payable disbursement option	0	(7,609)
Proceeds from issuance of common stock, net, to lender	0	51,452
Proceeds from issuance of common stock, net	8	155,759
Debt extinguishment	0	(2,150)
IDB acquisition deferred payments	(72)	(398)
Proceeds from the exercise of stock options, net of cancellations	0	3
Principal payments on notes payable	0	(40,000)
Net cash provided by financing activities	72,753	296,759
Net increase in cash and equivalents	8,535	21,700
Cash, cash equivalents and restricted cash at beginning of the period	82,008	128,587
Cash, cash equivalents and restricted cash at end of the period	90,543	150,287
Supplemental cash flow information:
Cash paid for interest	8,762	4,480
Supplemental disclosure of non-cash financing and investing activities:
Accrued purchases of fixed assets	$ 0	$ 366

FINANCIAL STATEMENTS	6 Months Ended
FINANCIAL STATEMENTS	Jun. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
FINANCIAL STATEMENTS	FINANCIAL STATEMENTS The accompanying condensed consolidated financial statements have been prepared assuming Melinta Therapeutics, Inc. (the “Company,” “we,” “us,” “our,” or “Melinta”) will continue as a going concern. We are not currently generating revenue from operations that is sufficient to cover our operating expenses and do not anticipate generating revenue sufficient to offset operating costs in the short-term. We have incurred losses from operations since our inception and had an accumulated deficit of $784,497 as of June 30, 2019, and we expect to incur substantial expenses and further losses in the short term for the development and commercialization of our product candidates and approved products. In addition, we have substantial commitments in connection with our acquisition of the Infectious Disease Business ("IDB") of The Medicines Company ("Medicines") that we completed in January 2018, including payments related to deferred purchase price consideration, assumed contingent liabilities and the purchase of inventory. And, there are certain financial-related covenants under our Deerfield Facility, as amended in January 2019, including requirements that we (i) file an Annual Report on Form 10-K for the year ending December 31, 2019, with an audit opinion without a going concern qualification, (ii) maintain a minimum cash balance of $40,000 through March 2020, and thereafter, a balance of $25,000, and (iii) achieve net revenue from product sales of at least $63,750 for the year ending December 31, 2019. (See Note 4 to the consolidated financial statements for further details on the Deerfield Facility.) In addition, under a Senior Subordinated Convertible Loan Agreement with Vatera Healthcare Partners LLC and Oikos Investment Partners LLC (formerly known as Vatera Investment Partners LLC) (together, “Vatera”), as amended in June 2019 (the "Amended Loan Agreement"), we have access to an additional $27,000 by October 31, 2019, subject to certain closing conditions. These conditions include a requirement that no default has occurred or is reasonably expected to occur under the terms of the Amended Loan Agreement, including the condition that the Company's audit opinion on the 2019 financial statements will not include a going concern qualification, and the Company must also establish a working capital revolver of at least $10,000. In addition, we are subject to certain financial-related covenants under the Amended Loan Agreement, including that we (i) file an Annual Report on Form 10-K for the year ending December 31, 2019, with an audit opinion without a going concern qualification, (ii) maintain a minimum cash balance of $36,000 through March 2020, and thereafter, a balance of $22,500, and (iii) achieve net revenue from product sales of at least $57,375 for the year ending December 31, 2019. (See Note 4 to the consolidated financial statements for further details on the Amended Loan Agreement.) Our future cash flows are dependent on key variables such as our ability to access additional capital under our Deerfield Facility and Amended Loan Agreement, our ability to secure a working capital revolver, which is allowed under the Deerfield Facility and required in order to access the remaining commitments under the Amended Loan Agreement, our ability to raise additional capital from the equity markets, and most importantly, the level of sales achievement of our four marketed products, all of which is subject to significant uncertainty. Given the softness in our product sales to date, we believe that there is risk in compliance with the minimum sales covenant under the Deerfield Facility of $63,750 for 2019, as well as our ability to meet the conditions to draw the additional $50,000 of capacity under the Deerfield Facility, which will become available only upon achieving annualized net sales of $75,000 over a two-quarter period ($37,500) before the end of 2019. Further, based on our current forecast, and given our current cash on hand and expected challenges and low likelihood of securing sufficient additional capital in the equity markets, it is likely in the next few quarters that we will not be in compliance with the minimum cash requirement or the going concern covenants mentioned above, either of which would result in both our inability to draw the remaining $27,000 under the Amended Loan Agreement and an event of default under both the Deerfield Facility and Amended Loan Agreement. If an event of default occurs without obtaining waivers or amending certain covenants, the lenders could exercise their rights under the Deerfield Facility and Amended Loan Agreement to accelerate the terms of repayment. If repayment is accelerated, it would be unlikely that the Company would be able to repay the outstanding amounts, including any interest and exit fees, under these credit facilities. Due to the conditions outlined above, we are not able to conclude under FASB Accounting Standards Codification ("ASC") 205-40, Presentation of Financial Statements - Going Concern, that it is probable the actions discussed below will be effectively implemented and, therefore, our current operating plans, existing cash and cash collections from existing revenue arrangements and product sales may not be sufficient to fund our operations for the next 12 months. As such, we believe there is substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should we be unable to continue as a going concern. As of June 30, 2019, the Company had $90,343 in cash and cash equivalents. We continue to look for alternative sources of liquidity, including exploring options to modify the terms of certain assumed liabilities and commitments with various stakeholders and claimants, including $80,000 in payments relating to the IDB acquisition and contractually due to The Medicines Company (see Note 10). And, while we filed a claim against The Medicines Company to dispute payment of such amounts, it is not certain that we will get relief from all or any portion of these payments. In addition, in order to avoid default under our credit facilities, we are working to negotiate with our creditors to amend the terms of the respective agreements, but there can be no assurance that such negotiations will be successful. The Company is continuing its evaluation of strategic alternatives, which may include seeking additional public or private financing, sale or merger of the Company, or other alternatives that would enhance the liquidity and ongoing continuing operations of the business. There can be no assurances that the Company will be successful in the implementation of any of these alternatives. If our efforts described in this and the preceding paragraph are unsuccessful, the Company may be forced to materially reduce its operations, which would have a material adverse effect on its results of operations, or it may be unable to continue as a going concern, in which case the Company may be forced to seek relief through a filing under the U.S. Bankruptcy Code.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2019

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation—The accompanying unaudited condensed consolidated financial statements include the accounts and results of operations of Melinta and its wholly-owned subsidiaries. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The information reflects all adjustments (consisting of only normal, recurring adjustments) necessary for a fair presentation of the information. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates—The preparation of these unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Concentration of Credit Risk—Concentration of credit risk exists with respect to cash and cash equivalents and receivables. We maintain our cash and cash equivalents with federally insured financial institutions, and at times, the amounts may exceed the federally insured deposit limits. To date, we have not experienced any losses on our deposits of cash and cash equivalents. We believe that we are not exposed to significant credit risk due to the financial position of the depository institutions in which deposits are held.

A significant portion of our trade receivables is due from three large wholesaler customers for our products, which constitute 40%, 25% and 24%, respectively, of our trade receivable balance at June 30, 2019.

Fair Value of Financial Instruments—The carrying amounts of our financial instruments, which include cash and cash equivalents, trade and other receivables, accounts payable, accrued expenses, and notes payable approximated their fair values at June 30, 2019, and December 31, 2018.

Intangible Assets—Intangible assets consist of capitalized milestone payments for the licenses we use to make our products and the fair value of identifiable intangible assets acquired. Given the uncertainty of forecasts of future revenue for our products, we amortize the cost of intangible assets on a straight-line basis over the estimated economic life of each asset, generally the exclusivity period of each associated product. Amortization of intangible assets was $4,124 and $8,247, for the three and six months ended June 30, 2019, respectively, and $3,542 and $8,218 for the three and six months ended June 30, 2018, respectively. Based on the intangible asset balances as of June 30, 2019, amortization expense is expected to be approximately $8,247 for the remaining six months of 2019 and $16,495 in each of the years 2020 through 2023.

Revenue Recognition—We recognize revenue from sales of our commercial products and under our licensing arrangements in accordance with ASC 606, Revenue from Contracts with Customers ("ASC 606").

Product Sales

We recognize revenue from product sales upon the transfer of control, which depends on the delivery terms set forth in customer contracts and is generally upon delivery. Payment terms between Melinta and our customers vary by customer, but are generally between 30 and 60 days from the invoice date.

Management exercises judgment in estimating variable consideration. Provisions for prompt-pay discounts, chargebacks, rebates, wholesalers fees-for-services, group purchasing organization administration fees, voluntary patient assist programs, returns and other adjustments are recorded in the period the related sales are recognized. We provide discounts to certain hospitals and private entities, and we provide rebates to government agencies, group purchasing organizations and other private entities.

Chargebacks, rebates administration fees and discounts offered under our patient assistance programs are generally based upon the contractual discounts or the volume of purchases for our products. In the case of discounted pricing, we typically provide a credit to our wholesale customers (i.e., chargeback), representing the difference between the customer’s acquisition list price and the discounted price offered to certain hospitals. For the other certain discounts, we pay rebates based on the program that is ultimately utilized by the hospital or, in the retail setting, the patient under our patient assistance program. Factors used in these calculations include the identification of which products have been sold subject to a discount, rebate or administration fee, which customer, government agency, or group purchasing organization price terms apply, and the estimated lag time between the sale of the product and when the discount, rebate or administration fee is reported to us. Using historical trends, adjusted for current changes, we estimate the amount of these discounts, rebates and administration fees that will be paid, and record them as a reduction to gross sales when we recognize revenue for the sale of our products. Settlement of discounts, rebates and administration fees generally occurs from between one and six months after the initial sale to the wholesaler. We regularly analyze historical trends and make adjustments to reserves for changes in trends and terms of rebate programs. Historically, adjustments to prior periods' rebate accruals have not been material to net product sales.

For product returns, generally, our customers have the right to return any unopened product during the 18-month period beginning six months prior to the labeled expiration date and ending 12 months after the labeled expiration date. Where historical rates of return exist, we use history as a basis to establish a returns reserve for product shipped to wholesalers. For our newly launched products, for which we currently do not have history of product returns, we estimate returns based on third-party industry data for comparable products in the market. As we distribute our products and establish historical sales over a longer period of time (i.e., two years), we will be able to place more reliance on historical purchasing and return patterns of our customers when evaluating our reserves for product return. At the end of each reporting period for any of our products, we may decide to constrain revenue for product returns based on information from various sources, including channel inventory levels and dating and sell-through data, the expiration dates of product currently being shipped, price changes of competitive products and introductions of generic products.

Adjustments to gross sales related to prompt-pay discounts and fees-for-services require less judgment as they are based on contractual percentages and the amounts invoiced to the wholesalers.

At the end of each reporting period, we adjust our product sales allowances when we believe actual experience may differ from current estimates. The following table provides a summary of activity with respect to our sales allowances and accruals during the first six months of 2019:



	Cash Discounts			Product Returns			Chargebacks			Fees-for- Service			MelintAssist			Government Rebates			Commercial Rebates			Admin Fees
Balance as of January 1, 2019	$	245		$	2,970		$	762		$	818		$	412		$	693		$	599		$	138
Allowances for sales	658			919			2,764			1,902			757			1,120			741			310
Payments and credits issued	(684		)	(681		)	(2,801		)	(1,984		)	(671		)	(653		)	(640		)	(278		)
Balance as of June 30, 2019	$	219		$	3,208		$	725		$	736		$	498		$	1,160		$	700		$	170

The allowances for cash discounts and chargebacks are recorded as contra-assets in trade receivables; the other balances are recorded in other accrued expenses.

Licensing Arrangements

We enter into license and collaboration agreements for the research and development ("R&D") and/or commercialization of therapeutic products. The terms of these agreements may include nonrefundable licensing fees, funding for research and development and manufacturing, milestone payments and royalties on any product sales derived from the collaborations in exchange for the delivery of licenses and rights to sell our products within specified territories outside the United States.

In the determination of whether our license and collaboration agreements are accounted for under ASC 606 or ASC 808, Collaborative Arrangements, we first assess whether or not the partner in the arrangement is a customer. If the partner in the arrangement is deemed a customer as it relates to some or all of our performance obligations, then the consideration associated with those performance obligations is accounted for as revenue under ASC 606.

Our license agreements may include contingent or variable consideration based upon the achievement of regulatory- and sales-based milestones and future royalties based on a percentage of the partner’s net product sales. Performance obligations to deliver distinct licenses are recognized at a point in time. Milestone payments from licensees that are contingent and/or variable upon future regulatory events and product sales are not considered probable of being achieved until the milestones are earned and, therefore, the contingent revenue is subject to significant risk of reversal. As such, we constrain this variable consideration and do not include it in the transaction price (or recognize the revenue related to these milestones) until such time that the contingencies are resolved and generally recognized at a point in time. In addition, under the sales- or usage- based royalty exception in ASC 606, we do not estimate, at the onset of the arrangement, the variable consideration from future royalties or sales-based milestones. Instead, we wait to recognize royalty revenue until the future sales occur.

As of June 30, 2019, we do not have any contract assets or liabilities and our contracts do not have any significant financing components. And, we have not capitalized contract origination costs.

Comprehensive Loss—Comprehensive loss is equal to net loss as presented in the accompanying statements of operations.

Advertising Expense—We record advertising expenses when they are incurred. We recognized $298 and $474, of advertising expense in the three and six months ended June 30, 2019, respectively, and $475 and $885 in the three and six months ended June 30, 2018, respectively.

Leases—On January 1, 2019, we adopted Topic 842, Leases ("Topic 842") which requires lessees to recognize assets and liabilities for most leases at the lease inception. All of the Company's leases are operating leases, which are included in other long-term assets as operating right of use ("ROU") assets and other liabilities as operating lease liabilities in our consolidated balance sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We will use the implicit rate when readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. We have lease agreements with lease and non-lease components, which are accounted for separately.

Segment and Geographic Information—Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. We operate and manage our business as one operating segment. Although substantially all of our license and contract research revenue is generated from agreements with companies that are domiciled outside of the U.S., we do not operate outside of the U.S., nor do we have any significant assets in any foreign country. See this Note 2 for further discussion of the license and contract research revenue.

Recently Issued and Adopted Accounting Pronouncements

We adopted Topic 842, Leases, codified as ASC 842 on January 1, 2019 ("Effective Date"). ASC 842 requires lessees to recognize assets and liabilities on the balance sheet for most leases but recognize expense on the income statement in a manner similar to previous accounting. The standard requires a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements or an optional transition method, whereby an entity can elect to apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restatement of comparative prior periods. We adopted this guidance on the Effective Date, electing the optional transition method. Consequently, we did not recast the comparative periods presented in this Quarterly Report on Form 10-Q. In addition, as permitted under ASC 842, we elected several practical expedients and therefore did not reassess at the Effective Date (1) whether any existing contract is or contains a lease, (2) the classification of existing leases, (3) whether previously capitalized costs continue to qualify as initial indirect costs. We also elected not to record on the balance sheet a lease whose term is 12 months or less and does not include a purchase option that the lessee is reasonably certain to exercise. We did not elect the practical expedient to not separate lease and non-lease components.

Upon adoption of ASC 842 on the Effective Date, we recorded ROU assets of $4,768, net of historical deferred rent liabilities and aggregate charges of $1,942 to retained earnings in connection with ROU asset impairments on the Effective Date. In addition, we recorded lease liabilities of $7,411 related to facility and vehicle leases. See Note 6 for further details. The transition to ASC 842, did not result in a cumulative-effect adjustment to the opening balance of retained earnings.

Recently Issued Accounting Pronouncements Not Yet Adopted

For discussion of other issued accounting standards prior to January 1, 2019, but not yet effective, refer to Note 2. Summary of Significant Accounting Polices - Recently Issued Accounting Pronouncements Not Yet Adopted in our Annual Report on Form 10-K for the year ended December 31, 2018.

BALANCE SHEET COMPONENTS

6 Months Ended

Jun. 30, 2019

Balance Sheet Related Disclosures [Abstract]

BALANCE SHEET COMPONENTS

Cash, Cash Equivalents and Restricted Cash—Cash, cash equivalents and restricted cash, as presented on the Condensed Consolidated Statements of Cash Flows, consisted of the following:



	June 30, 2019		December 31, 2018
Cash and cash equivalents	$	90,343	$	81,808
Restricted cash (included in Other Assets)	200		200
Total cash, cash equivalents and restricted cash shown in the Condensed Consolidated Statements of Cash Flows	$	90,543	$	82,008

Accounts Receivable—Accounts receivable consisted of the following:



	June 30, 2019		December 31, 2018
Trade receivables	$	10,573	$	11,509
Contracted services	8,031		10,293
Other receivables	477		683
Total receivables	$	19,081	$	22,485

Inventory—Inventory consisted of the following:



	June 30, 2019			December 31, 2018
Raw materials	$	28,838		$	24,507
Work in process	10,658			11,700
Finished goods	9,276			12,204
Gross value of inventory	48,772			48,411
Less: valuation reserves	(6,729		)	(7,070		)
Total inventory	$	42,043		$	41,341

Other Assets—Other assets consisted of the following:



	June 30, 2019		December 31, 2018
Deerfield disbursement option (see Note 4)	$	7,609	$	7,608
Long-term inventory deposits	47,615		51,127
Other assets	1,356		2,391
Right-of-use assets	4,575		—
Restricted cash	200		200
Total other assets	$	61,355	$	61,326

Long-term inventory deposits consist of advances made to contract manufacturers for production of drug products, principally API for Vabomere. These Vabomere advances were related to contractual commitments assumed under long-term contract manufacturing agreements in connection with a previously acquired entity. As deliveries are made, we transfer appropriate amounts from inventory deposits to inventory.

Accrued Expenses—Accrued expenses consisted of the following:



	June 30, 2019		December 31, 2018
Accrued contracted services	$	3,223	$	2,909
Payroll related expenses	9,223		15,585
Professional fees	189		3,598
Accrued royalty payments	1,883		2,052
Accrued sales allowances	6,473		5,630
Accrued other	6,269		4,150
Total accrued expenses	$	27,260	$	33,924

Accrued contracted services are primarily comprised of amounts owed to third-party clinical research organizations for research and development work and contract manufacturers for research and commercial drug product manufacturing performed on behalf of Melinta, and amounts owed to third-party marketing organizations for work performed to support the commercialization and sale of our products.

Accrued payroll related expenses are primarily comprised of accrued employee termination benefits, bonus and vacation.

Deferred Purchase Price and Other Liabilities—Other liabilities consisted of the following:



	June 30, 2019		December 31, 2018
Deferred purchase price	$	51,107	$	48,394
Milestone liability	30,000		30,000
Lease liabilities, current	1,924		—
Total deferred purchase price and other liabilities	$	83,031	$	78,394

Other Long-Term Liabilities—Other liabilities consisted of the following:



	June 30, 2019		December 31, 2018
Lease liabilities, net of current	$	3,567	$	—
Long-term accrual royalties	657		2,230
Long-term deferred purchase price	5,018		4,708
Other long-term liabilities	17		506
Total other long-term liabilities	$	9,259	$	7,444

FINANCING ARRANGEMENTS

6 Months Ended

Jun. 30, 2019

Debt Disclosure [Abstract]

FINANCING ARRANGEMENTS

2017 Loan Agreement

On May 2, 2017, we entered into a Loan and Security Agreement with a new lender (the “2017 Loan Agreement”). Under the 2017 Loan Agreement, the lender made available to us up to $80,000 in debt financing and up to $10,000 in equity financing.

In January 2018, we retired the 2017 Loan Agreement with the execution of the Facility Agreement (discussed below), in connection with which we recognized a debt extinguishment loss of $2,595 comprised of prepayment penalties and exit fees totaling $2,150 and unamortized debt issuance costs of $445.

Facility Agreement

On January 5, 2018 (the “Agreement Date”), we entered into the Facility Agreement (the “Facility Agreement”) with affiliates of Deerfield Management Company, L.P. (collectively, “Deerfield”). Pursuant to the terms of the Facility Agreement, (i) we issued 625,569 shares of our common stock to Deerfield at a price of $67.50 on January 5, 2018, for total proceeds of $42,226, pursuant to a Securities Purchase Agreement, and (ii) Deerfield loaned us $147,774 as an initial disbursement (the “Term Loan”), for total proceeds of $190,000. We used the proceeds from the Facility Agreement to retire the 2017 Loan Agreement (discussed above) and to fund the IDB acquisition on the Agreement Date.

Under the terms of the Facility Agreement, we have the right to draw from Deerfield additional disbursements up to $50,000 (the “Disbursement Option”), which may be made available upon the satisfaction of certain conditions, such as our having achieved annualized net sales of at least $75,000 over a trailing two-quarter period prior to the end of 2019. The Term Loan bears interest at a rate of 11.75%, while funds distributed pursuant to the Disbursement Option will bear interest at a rate of 14.75%.

On January 14, 2019, in conjunction with the Vatera Loan Agreement (discussed below), we entered into an amendment to the Facility Agreement (the “Deerfield Facility Amendment”). The Deerfield Facility Amendment was a condition (among other conditions) to the funding of the Vatera Loan Agreement, and became effective upon the funding of the initial $75,000 disbursement under the Vatera Loan Agreement in February 2019.

The Deerfield Facility Amendment (i) modified the definition of “change of control” under the Deerfield Facility to permit Vatera and their respective affiliates to own 50% or more of the equity interests in Melinta on a fully diluted basis; (ii) modified the definition of “Indebtedness” under the Deerfield Facility to exclude certain specific payments under (a) the Agreement and Plan of Merger, dated as of December 3, 2013, among the Medicines Company, Rempex Pharmaceuticals, Inc. and the other parties thereto and (b) the Purchase and Sale Agreement, dated as of November 28, 2017, between The Medicines Company and Melinta Therapeutics, Inc.; (iii) modified the definition of “Permitted Indebtedness” under the Deerfield Facility to permit the payment of a certain amount of the interest on the Vatera Loan Agreement (described below) in cash; (iv) eliminated the requirement that the Company’s audited financial statements for the fiscal year ending December 31, 2018, be delivered without an explanatory paragraph expressing doubt as to the Company’s status as a going concern; (v) reduced the net sales covenant set forth in the Facility Agreement for all periods after December 31, 2018, by 15% (we must now achieve net product sales of at least $63,750 during 2019 and at least $85,000 during 2020); (vi) requires the Company to hold a minimum cash balance of $40,000 through March 31, 2020, and $25,000 thereafter; (vii) increased the exit fee under the Deerfield Facility from 2% to 4%; and (viii) made certain other technical modifications, including to accommodate the Vatera Loan Agreement. The requirement to achieve annualized net sales of $75,000 over a trailing two-quarter period by the end of 2019 in order to draw the Disbursement Option was not amended.

The Deerfield Facility Amendment also provided for the conversion of up to $74,000 in principal ("Convertible Notional Amount") amount of the Term Loan into shares of the Company’s common stock at Deerfield’s option at any time and evidenced by a convertible note (the “Deerfield Convertible Note”), subject to the 4.985% Ownership Cap as described below. The conversion price for this option is the greater of (i) $5.15, which is the minimum initial conversion price, subject to adjustment for stock splits (including a reverse split), stock combinations or similar transactions, and (ii) 95.0% of the lesser of (A) the closing price of the Company’s common stock on the trading day immediately preceding the conversion date and (B) the arithmetic average of the volume weighted average price of the Company’s common stock on each of the three trading days immediately preceding the conversion date. Deerfield's conversion rights are subject to a 4.985% beneficial ownership cap based on the total number of shares of the Company’s common stock outstanding. However, this will not prevent Deerfield from periodically converting up to the 4.985% ownership cap and then selling the shares such that up to $74,000 of the loan is converted over time.

The Deerfield Facility Amendment also provided for $5,000 of convertible loans that were deemed funded by Deerfield upon the initial funding under the Vatera Loan Agreement, with terms identical to the Vatera Loan Agreement (the "Deerfield Portion" of the Loan Agreement (see Vatera Loan Agreement discussion below).

In addition, the Company is required to reserve and keep available a sufficient number of shares of common stock for the purpose of enabling the Company to issue all of the underlying shares of common stock issuable pursuant to the Deerfield's conversion rights under the Facility Agreement, as amended, and under the Loan Agreement.

We concluded that the amendment represented a debt modification and not a new debt arrangement that extinguished the former arrangement. As such, the fair value of any new instruments or features and any fees paid to Deerfield in connection with the amendment are added to the discount balance of the Term Loan immediately prior to the amendment and amortized to interest expense over the remaining term.

Based on an analysis of the provisions and features contained in the Deerfield Facility Amendment, we concluded that arrangement contained a share-settled redemption feature that is required to be bifurcated and recorded at fair value (the "Conversion Right") as a derivative liability. Therefore, the Company performed a valuation, in accordance with ASC 820, Fair Value Measurements ("ASC 820"), to determine the fair value of the Conversion Right, which will reduce the carrying amount of the Term Loan and the value of which, will be amortized over the remaining term of the Term Loan utilizing the effective interest method. The terms of these instruments and the methodology and assumptions used to value each of them are discussed below.

Conversion Right

The initial fair value of the Conversion Right was determined to be $18,962 using a "with and with-out" model. The with and with-out model compares the fair value of the amended Term Loan with the Conversion Right, which assumes the full Convertible Notional Amount is converted based on market conditions and other factors at the amendment date, which is based on an option pricing technique, compared with the fair value of the Term Loan assuming no Conversion Right, which is based on a discounted cash flow ("DCF") analysis of the contractual terms of the Convertible Notional Amount.

The significant assumptions or inputs used in the with and with-out model used to estimate the fair value of the Convertible Notional Amount were: the price of our common stock on the amendment date, an expected volatility of 80%, and an estimated yield of 20.6%. Due to the inherent uncertainty of determining the fair value of the Convertible Notional Amount using Level 3 inputs, the fair value may differ significantly from the values that would have been used had a ready market or observable inputs existed. We will remeasure this Conversion Right liability at fair value at each quarterly reporting period.

The fair value of the Conversion Right liability was $11,869 as of June 30, 2019. The change in fair value of the Conversion Right liability was recorded as a gain in fair value of $367 and $6,367, in the three and six months ended June 30, 2019, respectively, and $726 was recorded as an offset to loss on extinguishment of debt (because of the conversion discussed below) in the six months ended June 30, 2019.

In March 2019, Deerfield converted principal of $2,833 under the Term Loan at a rate of $5.15 per share, resulting in the issuance of 550,000 shares of common stock. We recognized a loss on extinguishment of debt of $346, related primarily to the write off of unamortized debt issuance costs associated with the converted principal amount, partially offset by the gain discussed in the previous paragraph.

After the end of the quarter, in July 2019, Deerfield converted principal of $11,633 under the Term Loan at a weighted-average rate of $6.06 per share, resulting in the issuance of 1,920,794 new shares of common stock.

Term Loan

The Deerfield Facility Amendment increased the exit fee from 2.0% to 4.0%. Therefore, total required future cash payments are $153,685 (Term Loan principal of $147,774 plus exit fee of $5,911). The exit fee cost is being accreted as additional interest expense over the life of the loan. After adjusting for the Conversion Right, the effective interest rate is 30.0%. The total cost of all items (cash-based interest payments, upfront fees and costs, and the 4% exit fee) is being expensed as interest expense using the effective interest rate of 30.0%. All amounts were recorded as interest expense in our statement of operations.

The $2,833 of principal converted to common shares in March 2019, was carried on the books at the discounted value of $1,694 on the day of conversion. After deducting the $2,833 of principal converted to common shares (and the avoidance of paying the 4.0% exit fee on the amount converted), the new remaining amount of required future cash payments was reduced to $150,739 (remaining term loan principal of $144,941 plus exit fee of $5,798). The Facility Agreement allows for prepayment beginning only in January 2021, with prepayment penalties equal to 2% plus a percentage of annual interest at the time of prepayment ranging between 25% and 75%. As such, if we were to refinance the Term Loan in January 2021, the prepayment penalties would be approximately $15,000.

Under the Facility Agreement, as amended, the accretion of the principal of the term loan, conversion redemptions, and the future payments, including the 4.0% exit fee due at the end of the term, but excluding the 11.75% rate applied to the $147,774 note per the form of the Facility Agreement, at June 30, 2019, are as follows:



	Beginning Balance		Record Conversion Right and Issuance Costs					Accretion Expense(2)		Principal Payments and Exit Fee (2)			Conversion			Ending Balance
January 5 - December 31, 2018	$	104,966						$	5,510	—			$	—		$	110,476
January 1 - June 30, 2019	110,476		(23,621		)	(1	)	4,330		—			(1,694		)	89,491
July 1 - December 31, 2019 (3)	89,491							5,366		—			—			94,857
Year Ending December 31, 2020	94,857							13,284		—			—			108,141
Year Ending December 31, 2021	108,141							18,044		—			—			126,185
Year Ending December 31, 2022	126,185							17,459		(69,089		)	—			74,555
Year Ending December 31, 2023	74,555							7,079		(75,370		)	—			6,264
Year Ending December 31, 2024	6,264							16		(6,280		)	—			—
			$	(23,621	)			$	71,088	$	(150,739	)	$	(1,694	)

(1.)

Consists of $18,962, representing the day-one fair value of the conversion right, and $4,659, which is comprised of (a) additional issuance costs of $408, and (b) the initial fair value of the Deerfield Portion of the Vatera Loan Agreement of $4,251; as we did not receive cash from Deerfield but, rather, issued the Deerfield Portion in consideration for amending the Facility Agreement, the $4,251 is treated as debt issuance costs. The total of $23,621 will be accreted over the remaining life of the loan.


(2.)	Accretion expense, principal payments and the exit fee will be reduced each time Deerfield exercises their conversion right.


(3.)	The table does not reflect any conversions made after June 30, 2019.

As of June 30, 2019, as reflected in the table above, the carrying value of the Facility Agreement was $89,491; this amount, combined with $4,330, the carrying value of the amount payable for the Deerfield Portion of the Vatera Loan Agreement, including interest and accretion expense, equals the amount of the notes payable to Deerfield on our consolidated balance sheet of $93,821.

Vatera Loan Agreement

On December 31, 2018, we entered into a Senior Subordinated Convertible Loan Agreement (the “Loan Agreement”) with Vatera, a related party, for $135,000 ("Vatera Portion"), and on January 14, 2019, we amended the Loan Agreement pursuant to which, among other things, Deerfield was deemed to have funded an additional $5,000 ("Deerfield Portion") of senior subordinated convertible loans (the "Convertible Loans") under the Vatera Loan Agreement as consideration for entering into the Deerfield Facility Amendment. No amount was drawn under the Loan Agreement as of December 31, 2018, as its effectiveness was contingent upon the satisfaction of several conditions, including the execution of the Deerfield Facility Amendment.

The proceeds of the Convertible Loans will be used for working capital and other general corporate purposes. The Convertible Loans are senior unsecured obligations of the Company and are contractually subordinated to the obligations under the Deerfield Facility. Interest on the Convertible Loans is 5% per year and will be paid in arrears at the end of each fiscal quarter, with 50% of such interest paid in cash and the remaining 50% of such interest paid in kind by increasing the principal balance of the outstanding Convertible Loans in an amount equal thereto (which increase will bear interest once added to such principal balance). The maturity date of the Convertible Loans is January 6, 2025.

The Convertible Loans are convertible at Vatera's option into shares of convertible preferred stock of the Company at a conversion rate of 1.25 shares of preferred Stock per one thousand dollars. The preferred stock is further convertible at Vatera's option into shares of common stock of the Company at a rate of 100 shares of common stock per one share of preferred stock (the “Common Stock Conversion Rate”). At Vatera's option, the Convertible Loans are also directly convertible into common stock at an initial conversion rate equal to the Loan Conversion Rate multiplied by the Common Stock Conversion Rate. The conversion rate for common stock is $8.00 per share. The preferred stock is non-participating, convertible preferred stock, with no preferred dividend rights or voting rights. However, the preferred stock may participate in common stock dividends on the Company’s common stock on an as-converted basis and is senior to the common stock upon liquidation, with a liquidation preference equal to the Conversion Amount for the converted loans, as it may thereafter be adjusted pursuant to the Certificate of Designations (plus, if applicable, the amount of any declared but unpaid dividends on such shares of preferred stock).

An exit fee (the “Interim Exit Fee”) of 1% of the aggregate amount of Convertible Loans funded under the Loan Facility is payable upon repayment or conversion of such funded amount (payable in preferred stock in the case of conversion). In addition, an exit fee (the “Final Exit Fee” and, together with the Interim Exit Fee, the “Exit Fee”) of 3% on the portion of the aggregate committed amount of Convertible Loans not drawn by the Company under the Loan Facility is payable on any repayment in full or conversion in full of the Convertible Loans (payable in preferred stock in the case of conversion).

Subject to the satisfaction (or waiver) of the conditions precedent set forth in the Loan Agreement, as amended in February 2019, $75,000 of Convertible Loans may be drawn in a single draw on or prior to February 25, 2019, up to $25,000 of additional Convertible Loans may be drawn in a single draw after March 31, 2019, but on or prior to June 30, 2019, and up to $35,000 of additional Convertible Loans may be drawn in a single draw after June 30, 2019, but on or prior to July 10, 2019. (The amount of additional Convertible Loans available to us was reduced when we and Vatera amended the Loan Agreement terms in June 2019 - please refer to Vatera Loan Amendment section below.)

Among the conditions precedent, the Loan Agreement required the approval of the shareholders of Melinta to ensure the number of authorized shares of common stock was sufficient to accommodate the potential conversion of the Convertible Loans and approval of the issuance of the Convertible Loans, in accordance with Nasdaq rules. In addition, before each draw, these conditions include a requirement that no default is reasonably expected to occur under the terms of the Amended Loan Agreement, including the condition that the Company's audit opinion on the 2019 financial statements does not include a going concern qualification, and the Company must also establish a working capital revolver of at least $10,000 to draw the last tranche under the Agreement. Melinta drew the first tranche ("Initial Draw") of $75,000 on February 22, 2019 ("Initial Draw Date"), at which time we deemed issuance of the $5,000 Deerfield Portion, for a total of $80,000 outstanding. On February 19, 2019, at a Special Meeting of the shareholders, the shareholders approved both a reverse stock split and an increase of the authorized shares, only one of which was to be implemented by the board of directors, as well as the issuance of the Convertible Notes. the board of directors implemented a 1-for-5 reverse split on February 22, 2019.

Based on an analysis of the provisions and features contained in the Loan Agreement, including the embedded conversion option, we recognized the Convertible Loans as a liability in its entirety. Since Vatera is a related party as Melinta's largest shareholder, and the Convertible Notes contained below-market terms, we determined that the par value did not represent the fair value of the Convertible Notes. Therefore, the Company performed a valuation, in accordance with ASC 820, to determine the appropriate discount to apply to the principal amount of the Convertible Notes, which was deemed a capital contribution from a related party.

We used a convertible bond lattice model to estimate the fair value of the Convertible Notes (Level 3 inputs), which resulted in an estimated fair value of the Vatera Portion of $63,758 on the Initial Draw Date. The related discount and capital contribution of $11,242 ("Valuation Discount") was recorded as a reduction in the carrying amount of the Convertible Notes with an offsetting amount recorded to additional paid-in-capital. The estimated fair value of the Deerfield Portion of the Convertible Loans, for which Melinta did not receive cash but was, rather, consideration for amending the Deerfield Credit Facility, was $4,251, which was recorded as additional debt issuance costs on the Deerfield Term Loan. The discount of $749 was recorded as a discount to the Deerfield Portion of the Convertible Loans. We concluded that there was no beneficial conversion feature present given the conversion price is not "in the money" and that we are not required to revalue the Convertible Notes at the end of each reporting period.

The significant assumptions or inputs used in the convertible bond lattice model used to estimate the fair value of the Convertible Notes were: the price of our common stock on the Initial Draw Date, an expected volatility of 76%, and an estimated yield of 29.8%. Due to the inherent uncertainty of determining the fair value of the Convertible Notes using Level 3 inputs, the fair value may differ significantly from the values that would have been used had a ready market or observable inputs existed.

In connection with the Initial Draw, the Company incurred debt issue costs of $1,775, which is being amortized as additional interest expense over the term of the Convertible Loans. In addition, we will accrete the Interim Exit Fee as additional interest expense over the term of the Convertible Loans, which will ultimately total $928. The total cost of all items (cash and paid-in kind interest ("PIK interest") expense as well as amortization/accretion of the debt issuance costs, the Interim Exit Fee, and the Valuation Discount) is being recognized as interest expense using an effective interest rate of approximately 8.6%.

The following table summarizes the fair value of the Convertible Notes on the Initial Draw Date:



Principal amount of Convertible Loans	$	80,000
Discount and related capital contribution associated with below market terms of Convertible Loans	(11,242		)
Discount on Deerfield portion of Convertible Loans	(749		)
Debt issue costs	(1,775		)
Carrying value at the Initial Draw Date	$	66,234

Of the $66,234, $4,251 was the initial carrying value of the Deerfield Portion, and $61,983 (net of $1,775 of debt issuance costs) was the initial carrying value of the Vatera Portion.

The accretion of the principal of the Loan Agreement, PIK interest, and the future payments, including the exit fees due at the end of the term, for the $80,000 outstanding under the arrangement (including the $5,000 "Deerfield Portion"), are as follows:



	Beginning Balance		Additional Draws	Paid-in Kind Interest		Accretion Expense		Principal Payments and Exit Fee			Ending Balance
February 25 - June 30, 2019	$	66,234		$	718	$	617	$	—		$	67,569
July 1 - December 31, 2019	67,569			1,035		931		—			69,535
Year Ending December 31, 2020	69,535			2,098		2,037		—			73,670
Year Ending December 31, 2021	73,670			2,146		2,296		—			78,112
Year Ending December 31, 2022	78,112			2,200		2,586		—			82,898
Year Ending December 31, 2023	82,898			2,257		2,905		—			88,060
Year Ending December 31, 2024	88,060			2,321		3,264		—			93,645
Year Ending December 31, 2025	93,645			38		57		(93,740		)	—
Total				$	12,813	$	14,693	$	(93,740	)

Of the $67,569 carrying value of the Convertible Notes as of June 30, 2019, as reflected in the table above, $63,239 related to the Vatera Portion and $4,330 related to the Deerfield Portion.

Vatera Loan Amendment

On June 28, 2019, we and Vatera agreed to an amendment to the Loan Agreement (the “Loan Agreement Amendment”) to provide for certain modifications, including an extension of the period to draw the remaining unfunded commitments under the Loan Agreement to October 31, 2019 and a reduction of such commitments to $27,000 (replacing the $60,000 of unfunded commitments that were previously available for borrowing under the Loan Agreement). Our ability to borrow the additional $27,000 remains subject to satisfaction of certain conditions precedent set forth in the original Loan Agreement, including, without limitation: the absence of a material adverse effect on the Company; the absence of a default or event of default under the Loan Agreement and no such default or event of default being reasonably expected to occur; accuracy of the representations and warranties made by the Company and its subsidiaries under the Loan Agreement and the related loan documents in all material respects; and the common stock of the Company remaining listed on NASDAQ or another eligible market.

Interest

We recorded amortization expense and cash interest for the Facility Agreement and Loan Agreement in the three and six months ended June 30, 2019 and 2018, as follows. All amounts were recorded as interest expense in our statement of operations.



	Three Months Ended June 30,		Six Months Ended June 30,
	2019	2018	2019	2018
Facility Agreement
Amortization	2,368	1,373	4,331	2,497
Cash Interest	4,305	4,389	8,534	8,585
Total	6,673	5,762	12,865	11,082
Loan Agreement
Amortization	439	—	617	—
Cash Interest	507	—	718	—
Total	946	—	1,335	—

FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2019

Fair Value Disclosures [Abstract]

FAIR VALUE MEASURMENTS

FAIR VALUE MEASUREMENTS

The provisions of the accounting standard for fair value define fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The transaction of selling an asset or transferring a liability is a hypothetical transaction at the measurement date, considered from the perspective of a market participant who holds the asset or owes the liability. Therefore, the objective of a fair value measurement is to determine the price that would be received when selling an asset or paid to transfer a liability (an exit price) at the measurement date. This standard classifies the inputs used to measure fair value into the following hierarchy:

Level 1—Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability.

Level 3—Unobservable inputs for the asset or liability.

The following is an explanation of the valuation techniques used in establishing fair value for our Level 3 liabilities held at fair value on a recurring basis. Depending on the complexity of the valuation technique we may engage a third-party professional service provider to assist us in determining the fair value.

Royalty Contingent Consideration from IDB Acquisition

We estimate the fair value of the royalty contingent consideration from the IDB acquisition by a applying an option-pricing model in conjunction with a DCF technique. This methodology includes applying a Black-Scholes option-pricing model to evaluate the royalty payments based on projected net sales of the related products, which are then discounted using a credit risk adjusted rate to arrive at the present value.

Changes to the royalty contingent consideration, other than the passage of time, may result from adjustments related, but not limited to, changes in discount rates and the number of remaining periods to which the discount rate is applied, updates in the assumed achievement or timing of any development or commercial milestone or changes in the probability of certain clinical events, changes in our forecasted sales of products acquired, and changes in the assumed probability associated with regulatory approval. At the end of each reporting period, we evaluate the need to remeasure the contingent consideration and, if appropriate, we revalue these obligations and record increases or decreases in their fair value in selling, general and administrative ("SG&A") expenses within the accompanying consolidated statements of operations.

Warrant liability

We estimate the fair value of the common stock warrants acquired by Deerfield in connection with the Deerfield Facility Agreement by applying a Black-Scholes option-pricing model. The significant inputs include the risk-free interest rate, remaining contractual term, and expected volatility.

We remeasure the warrant liability as of the end of each quarterly reporting period and record increases or decreases in estimated fair value in change in fair value of warrant and conversion liabilities within the accompanying consolidated statement of operations.

Conversion right liability

We estimate the fair value of the Conversion Right using a "with and with-out" model. The with and with-out model compares the fair value of the amended Term Loan with the Conversion Right, which assumes the full Convertible Notional Amount is converted based on market conditions and other factors at the measurement date, which is based on an option pricing technique, compared with the fair value of the Term Loan assuming no Conversion Right, which is based on a DCF analysis of the contractual terms of the Convertible Notional Amount. The significant inputs used in the with and with-out model used to estimate the fair value of the Convertible Notional Amount are the price of our common stock on the measurement date, expected volatility, and estimated yield.

We remeasure Conversion Right liability as of the end of each quarterly reporting period and record increases or decreases in estimated fair value in change in fair value of warrant and conversion liabilities within the accompanying consolidated statement of operations.

The following table lists our assets and liabilities that are measured at fair value and the level of the lowest significant inputs used to measure their fair value at June 30, 2019, and December 31, 2018. The money market fund is included in cash and cash equivalents on the balance sheet; the other items are in the captioned line of the balance sheet.



	As of June 30, 2019
	Level 1		Level 2		Level 3		Total
Assets:
Money market fund	$	33,263	$	—	$	—	$	33,263
Total assets at fair value	$	33,263	$	—	$	—	$	33,263

Liabilities:
Current royalty contingent consideration from IDB acquisition	$	—	$	—	$	1,179	$	1,179
Long-term royalty contingent consideration from IDB acquisition	—		—		5,018		5,018
Warrant liability	—		—		129		129
Conversion liability (see Note 4)	—		—		11,869		11,869
Total liabilities at fair value	$	—	$	—	$	18,195	$	18,195



	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Money market fund	$	32,883	$	—	$	—	$	32,883
Total assets at fair value	$	32,883	$	—	$	—	$	32,883

Liabilities:
Current royalty contingent consideration from IDB acquisition	$	—	$	—	$	1,006	$	1,006
Long-term royalty contingent consideration from IDB acquisition	—		—		4,708		4,708
Warrant liability	—		—		38		38
Total liabilities at fair value	$	—	$	—	$	5,752	$	5,752

The following tables provide quantitative information about valuation techniques and the Company’s significant inputs to the Company’s Level 3 fair value measurements as of June 30, 2019, and December 31, 2018. The table below is not intended to be exhaustive, but rather provides information on the significant Level 3 inputs as they relate to our fair value measurements.



	Fair Value at June 30, 2019		Valuation technique	Unobservable inputs	Range (Weighted average)
Liabilities:
Royalty contingent consideration from IDB acquisition	$	6,197	Option pricing / DCF	Net sales	N/A
				Asset volatility	51.7% (N/A)
				Credit spread	20.0% (N/A)

Warrant liability	129		Option pricing	Volatility	50.0%

Conversion liability	11,869		Option pricing / DCF	Volatility	96% (N/A)
				Yield	17.3% (N/A)
Total liabilities at fair value	$	18,195



	Fair Value at December 31, 2018		Valuation technique	Unobservable inputs	Range (Weighted average)
Liabilities:
Royalty contingent consideration from IDB acquisition	$	5,714	Option pricing / DCF	Net sales	N/A
				Asset volatility	51.7% (N/A)
				Credit spread	20.0% (N/A)

Warrant liability	38		Option pricing	Volatility	50.0%

Total liabilities at fair value	$	5,752

Significant increases or decreases in any of these inputs in isolation would result in a significantly different estimated fair value measurement. Generally, an increase in net sales or volatility, and a decrease in yield or credit spread, would result in an increase in the estimated fair value of the liabilities in the preceding table that contain such input.

The following table summarizes the changes in fair value of our Level 3 assets and liabilities for the six months ended June 30, 2019 (there were no transfers into or out of Level 3 assets or liabilities during the period):



Level 3 Liabilities	Fair Value at December 31, 2018		Accretion Recorded in Interest Expense		Change in Unrealized Gains (Losses)			(Issuances) Settlements, Net			Net Transfer Between Liabilities			Fair Value at June 30, 2019
Current royalty contingent consideration from IDB acquisition	$	1,006	$	347	$	—		$	(793	)	$	619		$	1,179
Long-term royalty contingent consideration from IDB acquisition	4,708		929		—			—			(619		)	5,018
Warrant liability	38		—		91			—			—			129
Conversion liability (see Note 4)	—		—		(6,367		)	18,236			—			11,869
Total liabilities at fair value	$	5,752	$	1,276	$	(6,276	)	$	17,443		$	—		$	18,195

- 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

LEASES

6 Months Ended

Jun. 30, 2019

Leases [Abstract]

LEASES

As of June 30, 2019, we were a lessee under three operating lease agreements for office facilities and an operating lease for vehicles for our field-based employees, principally sales representatives.

As more fully described in Note 2, we adopted ASC 842 on January 1, 2019 ("Effective Date"), which requires lessees to recognize assets and liabilities on the balance sheet for most leases recognize expense on the income statement in a manner similar to previous accounting. We elected the optional transition method, whereby an entity can elect to apply the standard at the Effective Date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption without restatement of comparative prior periods. Consequently, the prior comparative period’s financials will remain the same as those previously presented. In addition, the transition to ASC 842 did not result in a cumulative-effect adjustment to the opening balance of retained earnings.

The company has not elected the practical expedient under which the lease components would not be separated from the nonlease components. Therefore, the Company allocates the total transaction price to the lease component and nonlease components on a relative stand-alone price basis obtained from the lessor. Our facility leases include one or more options to renew, with renewal terms that can extend the lease term from three to five years. As of June 30, 2019, the renewal options were not reasonably certain; therefore, the payments associated with renewal were excluded from the measurement of the lease liabilities and ROU assets at June 30, 2019. The Company determined that there was no discount rate implicit in its leases. Thus, the Company used its incremental borrowing rate of 15% to discount the lease payments in determination of its ROU assets and lease liabilities for all leases.

Upon adoption of Accounting Standards Update 2016-02, Topic 842-Leases, we determined our ROU assets related to the operating leases for our principal research facility in New Haven, Connecticut, and our office facilities in Chapel Hill, North Carolina were impaired and therefore reduced to a fair value of zero with a corresponding charge to retained opening earnings of $1,942. See Note 2 for further details.

In March 2019, we terminated our operating lease for our principal research facility in New Haven, Connecticut. In connection with the termination, we agreed to pay the lessor a $462 early termination fee. As a result, we reduced the lease liability equal to the termination fee and recorded a gain of $792, which was recorded in other income. In May 2019, we amended our operating lease in Chapel Hill, North Carolina, which resulted in the termination of certain of our office facilities in that location, the remaining of which we do not occupy. We paid the lessor a termination of $154, which was recorded in other expense. As of June 30, 2019, the lease liability associated with this lease was $197.

Lease cost recognized under ASC 842 was $424 and $897, respectively, for the three and six months ended June 30, 2019. Lease cost for the three and six months ended June 30, 2018 was $811 and $1,144, respectively, recognized under ASC 840, the lease accounting standard in effect prior to 2019.

As of June 30, 2019, the Company's net ROU assets and lease liabilities were as follows:



	Classification	June 30, 2019
Assets
Total operating lease assets	Other assets	$	4,575
Liabilities
Current	Deferred purchase price and other liabilities	1,924
Noncurrent	Other long-term liabilities	3,567
Total operating lease liabilities		$	5,491

As of June 30, 2019, the maturities of the Company's lease liabilities were as follows:



Maturity of Lease Liabilities	Amount
Remainder of 2019	$	1,025
2020	2,056
2021	1,952
2022	1,233
2023	638
After 2023	156
Total operating lease payments	$	7,060
Less: Interest	(1,569		)
Present value of operating lease liabilities	$	5,491

As previously disclosed in our 2018 Annual Report on Form 10-K and under the previous lease accounting standard, ASC 840, the total commitment for our non-cancelable operating lease was $8,568 as of December 31, 2018:



Maturity of Lease Liabilities	Amount
2019	$	2,348
2020	2,269
2021	1,827
2022	1,238
2023	624
2024 and thereafter	262
Total operating lease payments	$	8,568

As of June 30, 2019, the weighted average remaining lease term was 3.6 years, calculated on the basis of the remaining lease term and the lease liability balance of each lease.

The following table sets forth supplemental cash flow information for the six months ended June 30, 2019:



	Six Months Ended June 30, 2019
Cash paid for amounts included in the measurement of operating lease liabilities	$	1,622
Right of use assets obtained in exchange for lease obligations	$	378