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Financial Instruments (Tables) | 3 Months Ended
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Mar. 31, 2014
Investments, All Other Investments [Abstract] |
Summary of the assets and liabilities measured at fair value on recurring basis | The following table provides a summary of the assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2014 (in thousands):
Fair Value Measurements at Reporting Date Using
|  |  | Quoted Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs
| Total |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets: |  |  |  |  |  |  |
Current portion of co-promote termination payments receivable | $ | 688 |  |  | $ | — |  |  | $ | — |  |  | $ | 688 |
Available-for-sale securities | 12,275 |  |  | 12,275 |  |  | — |  |  | — |
Long-term portion of co-promote termination payments receivable | 448 |  |  | — |  |  | — |  |  | 448 |
Total assets | $ | 13,411 |  |  | $ | 12,275 |  |  | $ | — |  |  | $ | 1,136 |
Liabilities: |  |  |  |  |  |  |
Current portion of contingent liabilities-CyDex | $ | 1,094 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,094 |
Current portion of co-promote termination liability | 688 |  |  | — |  |  | — |  |  | 688 |
Long-term portion of contingent liabilities-Metabasis | 6,657 |  |  | 6,657 |  |  | — |  |  | — |
Long-term portion of contingent liabilities-CyDex | 6,086 |  |  | — |  |  | — |  |  | 6,086 |
Liability for short-term investments owed to former licensees | 1,841 |  |  | 1,841 |  |  | — |  |  | — |
Long-term portion of co-promote termination liability | 448 |  |  | — |  |  | — |  |  | 448 |
Total liabilities | $ | 16,814 |  |  | $ | 8,498 |  |  | $ | — |  |  | $ | 8,316 |
The following table provides a summary of the assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2013 (in thousands):
Fair Value Measurements at Reporting Date Using
|  |  | Quoted Prices in Active Markets for Identical Assets |  | Significant Other Observable Inputs |  | Significant Unobservable Inputs
| Total |  | (Level 1) |  | (Level 2) |  | (Level 3)
Assets: |  |  |  |  |  |  |
Current portion of co-promote termination payments receivable | $ | 4,329 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,329 |
Available-for-sale securities | 4,340 |  |  | 4,340 |  |  | — |  |  | — |
Long-term portion of co-promote termination payments receivable | 7,417 |  |  | — |  |  | — |  |  | 7,417 |
Total assets | $ | 16,086 |  |  | $ | 4,340 |  |  | $ | — |  |  | $ | 11,746 |
Liabilities: |  |  |  |  |  |  |
Current portion of contingent liabilities-CyDex | $ | 1,712 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,712 |
Current portion of co-promote termination liability | 4,329 |  |  | — |  |  | — |  |  | 4,329 |
Long-term portion of contingent liabilities-Metabasis | 4,196 |  |  | 4,196 |  |  | — |  |  | — |
Long-term portion of contingent liabilities-CyDex | 7,599 |  |  | — |  |  | — |  |  | 7,599 |
Liability for short-term investments owed to former licensees | 651 |  |  | 651 |  |  | — |  |  | — |
Long-term portion of co-promote termination liability | 7,417 |  |  | — |  |  | — |  |  | 7,417 |
Total liabilities | $ | 25,904 |  |  | $ | 4,847 |  |  | $ | — |  |  | $ | 21,057 |
CyDex Acquisition | The following table represents significant unobservable inputs used in determining the fair value of contingent liabilities assumed in the acquisition of CyDex:
| December 31,
| 2014 |  | 2013
Range of annual revenue subject to revenue sharing (1) | $5.1 million-$17.9 million |  | $4.2 million-$19.8 million
Revenue volatility | 25% |  | 25%
Average of probability of commercialization | 67.4% |  | 67.6%
Sales beta | 0.60 |  | 0.60
Credit rating | BBB |  | BBB
Equity risk premium | 6% |  | 6%
(1) | Revenue subject to revenue sharing represent management’s estimate of the range of total annual revenue subject to revenue sharing (i.e. annual revenues in excess of $15 million) through December 31, 2016, which is the term of the CVR agreement.
Reconciliation of level 3 financial instruments | A reconciliation of the level 3 financial instruments as of March 31, 2014 is as follows (in thousands):
Assets: |
Fair value of level 3 financial instrument assets as of December 31, 2013 | $ | 11,746 |
Assumed payments made by Pfizer or assignee | (276 | )
Fair value adjustments to co-promote termination liability | (10,334 | )
Fair value of level 3 financial instrument assets as of March 31, 2014 | $ | 1,136 |
Liabilities: |
Fair value of level 3 financial instrument liabilities as of December 31, 2013 | $ | 21,057 |
Assumed payments made by Pfizer or assignee | (276 | )
Payments to CVR and other former license holders | (1,618 | )
Fair value adjustments to contingent liabilities | (513 | )
Fair value adjustments to co-promote termination liability | (10,334 | )
Fair value of level 3 financial instrument liabilities as of March 31, 2014 | $ | 8,316 |

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- Definition Tabular disclosure of financial instruments measured at fair value, including those classified in shareholders' equity measured on a recurring or nonrecurring basis. Disclosures include, but are not limited to, fair value measurements recorded and the reasons for the measurements, level within the fair value hierarchy in which the fair value measurements are categorized and transfers between levels 1 and 2. Nonrecurring fair value measurements are those that are required or permitted in the statement of financial position in particular circumstances. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a,b,bb) -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2C -URI http://asc.fasb.org/extlink&oid=25499696&loc=SL7498348-110258 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19279-110258 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19190-110258 + Details
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- Definition Tabular disclosure of quantitative information about the inputs used in the fair value measurement of liabilities. This disclosure may include, but is not limited to, the fair value of the liability, valuation technique used to measure fair value, the inputs used to measure fair value, the ranges of the inputs, and the weighted averages of the inputs. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (bbb) -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 + Details
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