SEC Comment Letter for REPLIGEN CORP (RGEN) (CIK 0000730272) (RGEN) — Mar 5, 2007
REPLIGEN CORP (RGEN) (CIK 0000730272)
Date: March 5, 2007 · CIK: 0000730272 · Accession: 0000000000-07-011245
AI Filing Summary & Sentiment
Reasoning
Letter
Via Facsimile and U.S. Mail Mail Stop 6010 March 5, 2007 Mr. Walter C. Herlihy Chief Executive Officer and President Repligen Corporation 41 Seyon Street Building 1, Suite 100 Waltham, MA 02453
Re: Repligen Corporation Form 10-K for Fiscal Year Ended March 31, 2006 File No. 0-14656
Dear Mr. Herlihy:
We have reviewed your filing and have the following comments. We have limited our review to only your financial stat ements and related disclosures and do not intend to expand our review to other portions of your documents. In our comments, we ask you to provide us with more inform ation so we may better understand your disclosure. After reviewing this information, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your compliance with the applicable disclosure requirements and to enhance the overall disclosure in your filings. We look forward to working with you in these respects. We welcome any questions you may have about our comment or any other aspect of our review. Feel free to call us at the telephone numbers listed at the end of this letter.
Form 10-K for the fiscal year ended March 31, 2006
Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations
Critical Accounting Estimates, page 20
1. Your revenue recognition disclosure does not appear to disclose the judgments you must make each period and the uncertain ties surrounding those judgments. In addition, your revenue recognition, inventory reserve and accrued liabilities disclosures do not appear to discuss the potential variability of reasonably likely changes in your underlying estimates nor do your disclosures appear to discuss how accurate your estimates have been in prior periods. Please provide us in a disclosure-type format, revised discussions of your critical accounting estimates that discuss specifically the judgmen ts you make, why your estimates or
Mr. Walter C. Herlihy Repligen Corporation March 5, 2007 Page 2 assumptions bear the risk of change, the impact on your financial results, financial condition and liquidity of reasonably likely changes in the underlying assumptions and the extent to which act ual subsequent experience has differed materially from your initial estimates in each of the periods presented. Please see FR-72.
Results of Operations, page 22
2. Please provide us in a disclosure-type fo rmat, revised discussions of your revenue fluctuations from period to period that clearly differentiate between volume and pricing changes as required by Item 303(a)(3)(iii) of Regulation S-K.
3. Although you identify the nature of the expense items associated with your fluctuations in operating expenses, you do not appear to discuss the underlying causes of those changes. The following lis ts examples of your disclosure and is not intended to be exhaustive:
• higher clinical trial expenses of $192,000 (in your R&D disclosure); • increased personnel costs of $124,000 (in your R&D disclosure); • increased license expense of $59,000 (in your R&D disclosure); • clinical material decreased by $124,000 (in your R&D disclosure); • increased personnel expenses of $291,000 (in your SG&A disclosure); • increased professional expenses of $271,000 (in your SG&A disclosure); and • increased legal expenses of $176,000 (in your SG&A disclosure).
Please provide us in a disclosure-type format revised operating expense discussions that clearly expl ain the underlying causes of all the various increase or decreases you identify. For example, pl ease explain why legal expenses increased by $176,000 in fiscal 2006.
Financial Statements
Note 3: Long-Lived Assets, page F-13
4. You disclose that you recorded an impairm ent charge in fiscal 2004 related to a license intangible with ChiRhoClin, Inc. re sulting from a disput e with the licensor and that you fully amortized the remain ing intangible asset in fiscal 2005. In Note 11 on page F-18, in Business on page 8 and in Legal Proceedings on page 17, you disclose that you entered into a se ttlement agreement with ChiRhoClin in May 2005 whereby you are entitled to continue to market SecreFlo for the next several years and ChinRhoClin will be obligated to provide you supplies of SecreFlo for the next few years. Please explain to us how you determined your impairment and why you have no remain ing intangible asset at March 31, 2005 when you apparently continue to sell Secr eFlo. In your response, please explain to us why you do not disclose the exact or estimated date through which you may market SecreFlo and an exact or estim ated date through which you expect to
Mr. Walter C. Herlihy Repligen Corporation March 5, 2007 Page 3 purchase SecreFlo from ChiRhoClin. In addition, please expl ain to us why you do not apparently disclose and discuss your SecreFlo revenues in your fiscal 2007 Forms 10-Q.
Please respond to these comments within 10 business days or tell us when you will provide us with a response. Please s ubmit a letter that keys your responses to our comments and provides the requested information. Detailed letters greatly facilitate our review. Please submit your letter to us via EDGAR under the form type label CORRESP.
We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes all in formation required under the Securities Exchange Act of 1934 and th at they have provided all information investors require for an informed invest ment decision. Since the company and its management are in possession of all facts re lating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our co mments, please provide, in your letter, a statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the filing;
staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
In addition, please be advise d that the Division of Enfo rcement has access to all information you provide to the staff of the Divi sion of Corporation Fi nance in our review of your filing or in response to our comments on your filing.
If you have any questions, please co ntact Mark Brunhofer , Senior Staff Accountant, at (202) 551-3638. In this regard, do not hesita te to contact me, at (202) 551-3679.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief Accountant
Show Raw Text
Via Facsimile and U.S. Mail
Mail Stop 6010
March 5, 2007
Mr. Walter C. Herlihy
Chief Executive Officer and President
Repligen Corporation
41 Seyon Street
Building 1, Suite 100
Waltham, MA 02453
Re: Repligen Corporation
Form 10-K for Fiscal Year Ended March 31, 2006
File No. 0-14656
Dear Mr. Herlihy:
We have reviewed your filing and have the following comments. We have
limited our review to only your financial stat ements and related disclosures and do not
intend to expand our review to other portions of your documents. In our comments, we
ask you to provide us with more inform ation so we may better understand your
disclosure. After reviewing this information, we may raise additional comments.
Please understand that the purpose of our re view process is to assist you in your
compliance with the applicable disclosure requirements and to enhance the overall
disclosure in your filings. We look forward to working with you in these respects. We
welcome any questions you may have about our comment or any other aspect of our
review. Feel free to call us at the telephone numbers listed at the end of this letter.
Form 10-K for the fiscal year ended March 31, 2006
Management’s Discussion and Analysis of Fi nancial Condition and Results of Operations
Critical Accounting Estimates, page 20
1. Your revenue recognition disclosure does not appear to disclose the judgments
you must make each period and the uncertain ties surrounding those judgments. In
addition, your revenue recognition, inventory reserve and accrued liabilities
disclosures do not appear to discuss the potential variability of reasonably likely
changes in your underlying estimates nor do your disclosures appear to discuss
how accurate your estimates have been in prior periods. Please provide us in a
disclosure-type format, revised discussions of your critical accounting estimates
that discuss specifically the judgmen ts you make, why your estimates or
Mr. Walter C. Herlihy
Repligen Corporation
March 5, 2007
Page 2
assumptions bear the risk of change, the impact on your financial results, financial
condition and liquidity of reasonably likely changes in the underlying
assumptions and the extent to which act ual subsequent experience has differed
materially from your initial estimates in each of the periods presented. Please see
FR-72.
Results of Operations, page 22
2. Please provide us in a disclosure-type fo rmat, revised discussions of your revenue
fluctuations from period to period that clearly differentiate between volume and
pricing changes as required by Item 303(a)(3)(iii) of Regulation S-K.
3. Although you identify the nature of the expense items associated with your
fluctuations in operating expenses, you do not appear to discuss the underlying
causes of those changes. The following lis ts examples of your disclosure and is
not intended to be exhaustive:
• higher clinical trial expenses of $192,000 (in your R&D disclosure);
• increased personnel costs of $124,000 (in your R&D disclosure);
• increased license expense of $59,000 (in your R&D disclosure);
• clinical material decreased by $124,000 (in your R&D disclosure);
• increased personnel expenses of $291,000 (in your SG&A disclosure);
• increased professional expenses of $271,000 (in your SG&A disclosure); and
• increased legal expenses of $176,000 (in your SG&A disclosure).
Please provide us in a disclosure-type format revised operating expense discussions that clearly expl ain the underlying causes of all the various increase or
decreases you identify. For example, pl ease explain why legal expenses increased
by $176,000 in fiscal 2006.
Financial Statements
Note 3: Long-Lived Assets, page F-13
4. You disclose that you recorded an impairm ent charge in fiscal 2004 related to a
license intangible with ChiRhoClin, Inc. re sulting from a disput e with the licensor
and that you fully amortized the remain ing intangible asset in fiscal 2005. In
Note 11 on page F-18, in Business on page 8 and in Legal Proceedings on page 17, you disclose that you entered into a se ttlement agreement with ChiRhoClin in
May 2005 whereby you are entitled to continue to market SecreFlo for the next
several years and ChinRhoClin will be obligated to provide you supplies of
SecreFlo for the next few years. Please explain to us how you determined your impairment and why you have no remain ing intangible asset at March 31, 2005
when you apparently continue to sell Secr eFlo. In your response, please explain
to us why you do not disclose the exact or estimated date through which you may
market SecreFlo and an exact or estim ated date through which you expect to
Mr. Walter C. Herlihy
Repligen Corporation
March 5, 2007
Page 3
purchase SecreFlo from ChiRhoClin. In addition, please expl ain to us why you
do not apparently disclose and discuss your SecreFlo revenues in your fiscal 2007
Forms 10-Q.
Please respond to these comments within 10 business days or tell us when you
will provide us with a response. Please s ubmit a letter that keys your responses to our
comments and provides the requested information. Detailed letters greatly facilitate our
review. Please submit your letter to us via EDGAR under the form type label
CORRESP.
We urge all persons who are responsible for the accuracy and adequacy of the
disclosure in the filing to be certain that the filing includes all in formation required under
the Securities Exchange Act of 1934 and th at they have provided all information
investors require for an informed invest ment decision. Since the company and its
management are in possession of all facts re lating to a company’s disclosure, they are
responsible for the accuracy and adequacy of the disclosures they have made.
In connection with responding to our co mments, please provide, in your letter, a
statement from the company acknowledging that:
the company is responsible for the adequacy and accuracy of the disclosure in the
filing;
staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and
the company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.
In addition, please be advise d that the Division of Enfo rcement has access to all
information you provide to the staff of the Divi sion of Corporation Fi nance in our review
of your filing or in response to our comments on your filing.
If you have any questions, please co ntact Mark Brunhofer , Senior Staff
Accountant, at (202) 551-3638. In this regard, do not hesita te to contact me, at (202)
551-3679.
Sincerely,
Jim B. Rosenberg
Senior Assistant Chief Accountant