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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Schedule of the components of income tax benefit

The components of the income tax benefit for continuing operations are as follows (in thousands):

	Year Ended December 31,
	2013				2012				2011
Current expense (benefit):
Federal	$	—			$	3			$	520
State	33				16				139
	33				19				659
Deferred expense (benefit):
Federal	404				(913		)		(10,803		)
State	(63		)		(297		)		(3,126		)
	$	374			$	(1,191	)		$	(13,270	)

Schedule of deferred tax assets and liabilities

	December 31,
	2013				2012
	(in thousands)
Deferred assets:
Net operating loss carryforwards	$	196,421			$	198,445
Research and AMT credit carryforwards	30,092				27,169
Fixed assets and intangibles	17,293				23,763
Accrued expenses	1,474				1,366
Contingent liabilities	582				1,779
Deferred revenue	760				1,013
Present value of royalties	12,175				10,836
Organon termination asset	(4,073		)		(4,503		)
Organon termination liability	4,073				4,503
Royalty obligation	—				861
Deferred rent	1,634				2,635
Lease termination costs	—				—
Capital loss carryforwards	148				298
Other	3,701				1,844
	264,280				270,009
Valuation allowance for deferred tax assets	(249,470		)		(254,870		)
Net deferred tax assets	$	14,810			$	15,139
Deferred tax liabilities:
Retrophin fair value adjustment	$	(859	)		$	—
Identified intangibles	(13,984		)		(15,139		)
Identified indefinite lived intangibles	(2,639		)		(2,298		)
Total	$	(2,672	)		$	(2,298	)

Schedule of effective income tax rate reconciliation

A reconciliation of income taxes from continuing operations to the amount computed by applying the statutory federal income tax rate to the net loss from continuing operations is summarized as follows:

	Years Ended December 31,
	2013				2012				2011
Amounts computed at statutory federal rate	$	(3,131	)		$	1,317			$	1,204
State taxes net of federal benefit	(293		)		196				(2		)
Meals & entertainment	(10		)		(8		)		(9		)
Acquisition related transaction costs	—				—				(37		)
Imputed interest	(285		)		(259		)		(255		)
CVRs	(2,027		)		695				(601		)
Stock-based compensation	556				581				(597		)
Expired NOLs	—				(6,847		)		(678		)
Expired research and development credits	641				(1,984		)		(1,200		)
R&D credit study	3,940				—				—
Change in uncertain tax positions	(364		)		830				—
Rate change for changes in state law	(901		)		(3,388		)		—
Increase in deferred tax assets from completion of 382 analysis	(786		)		53,257				—
Change in valuation allowance	3,509				(41,768		)		15,486
Other	(1,223		)		(1,431		)		(41		)
	$	(374	)		$	1,191			$	13,270

Schedule of unrecognized tax benefits

A reconciliation of the amount of unrecognized tax benefits at December 31, 2013 and 2012 is as follows (in thousands):

Balance at December 31, 2011	$	8,906
Additions based on tax positions related to the current year	38
Reductions for tax positions of prior years	(877		)
Balance at December 31, 2012	8,067
Additions based on tax positions related to the current year	417
Additions for tax positions of prior years	20
Balance at December 31, 2013	$	8,504

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

+ References

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-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 9

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

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-SubTopic 10

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Tabular disclosure of the change in unrecognized tax benefits, excluding amounts pertaining to examined tax returns.

+ References

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-Name Accounting Standards Codification

-Topic 740

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