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Financial Instruments (Tables)

6 Months Ended

Jun. 30, 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 June 30, 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	$	391			$	—			$	—			$	391
Available-for-sale securities	7,490				7,490				—				—
Restricted cash and investments	1,261				—				1,261				—
Long-term portion of co-promote termination payments receivable	413				—				—				413
Total assets	$	9,555			$	7,490			$	1,261			$	804
Liabilities:
Current portion of contingent liabilities-CyDex	$	2,877			$	—			$	—			$	2,877
Current portion of co-promote termination liability	391				—				—				391
Long-term portion of contingent liabilities-Metabasis	4,724				4,724				—				—
Long-term portion of contingent liabilities-CyDex	7,498				—				—				7,498
Liability for short-term investments owed to former licensees	1,078				1,078				—				—
Long-term portion of co-promote termination liability	413				—				—				413
Total liabilities	$	16,981			$	5,802			$	—			$	11,179

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				—				—
Restricted cash and investments	1,341				—				1,341				—
Long-term portion of co-promote termination payments receivable	7,417				—				—				7,417
Total assets	$	17,427			$	4,340			$	1,341			$	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:

	June 30, 2014		December 31, 2013
Range of annual revenue subject to revenue sharing (1)	$13.1 million-$18.9 million		$4.2 million-$19.8 million
Revenue volatility	25%		25%
Average of probability of commercialization	79.3%		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 June 30, 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	(631		)
Fair value adjustments to co-promote termination liability	(10,311		)
Fair value of level 3 financial instrument assets as of June 30, 2014	$	804
Liabilities:
Fair value of level 3 financial instrument liabilities as of December 31, 2013	$	21,057
Assumed payments made by Pfizer or assignee	(631		)
Payments to CVR and other former license holders	(1,668		)
Fair value adjustments to contingent liabilities	2,732
Fair value adjustments to co-promote termination liability	(10,311		)
Fair value of level 3 financial instrument liabilities as of June 30, 2014	$	11,179

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Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

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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

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-URI http://asc.fasb.org/extlink&oid=36462937&loc=d3e19279-110258



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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.

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