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Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended
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Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Restatement to Prior Year Income | The effects of these prior period corrections on the statement of operations and comprehensive income are as follows (in thousands except for per share data):
| Nine months ended September 30, 2015
| As Reported |  | Adjustments |  | As Restated
Income tax benefit | $ | 219,083 |  |  | $ | (27,481 | ) |  | $ | 191,602 |
Net income | 250,964 |  |  | (27,481 | ) |  | 223,483 |
Comprehensive income | 251,351 |  |  | (27,481 | ) |  | 223,870 |
Basic earnings per share | 12.71 |  |  | (1.39 | ) |  | 11.32 |
Diluted earnings per share data | 11.88 |  |  | (1.30 | ) |  | 10.58 |
Basic | 19,741 |  |  | — |  |  | 19,741 |
Diluted | 21,122 |  |  | — |  |  | 21,122 |
| Three months ended September 30, 2015
| As Reported |  | Adjustments |  | As Restated
Income tax benefit (expense) | $ | 219,362 |  |  | $ | (27,481 | ) |  | $ | 191,881 |
Net income | 226,646 |  |  | (27,481 | ) |  | 199,165 |
Comprehensive income | 222,981 |  |  | (27,481 | ) |  | 195,500 |
Basic earnings per share | 11.40 |  |  | (1.39 | ) |  | 10.01 |
Diluted earnings per share data | 10.56 |  |  | (1.28 | ) |  | 9.28 |
Summary of computation of basic and diluted net income (loss) per share | The following table presents the calculation of weighted average shares used to calculate basic and diluted earnings per share (in thousands):
| Three months ended |  | Nine months ended
| September 30, |  | September 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
Weighted average shares outstanding: | 20,886,705 |  |  | 19,886,877 |  |  | 20,805,604 |  |  | 19,741,081 |
Dilutive potential common shares: |  |  |  |  |  |  |
Restricted stock | 134,008 |  |  | 63,324 |  |  | 102,282 |  |  | 55,899 |
Stock options | 792,474 |  |  | 763,856 |  |  | 788,106 |  |  | 922,051 |
2019 convertible senior notes | 1,184,092 |  |  | 745,591 |  |  | 1,046,257 |  |  | 402,941 |
Shares used to compute diluted income per share | 22,997,279 |  |  | 21,459,648 |  |  | 22,742,249 |  |  | 21,121,972 |
Potentially dilutive shares excluded from calculation due to anti-dilutive effect | 3,540,806 |  |  | 3,343,719 |  |  | 3,522,063 |  |  | 3,803,007 |
Summary of investment categories | The following table summarizes the various investment categories at September 30, 2016 and December 31, 2015 (in thousands):
| Amortized cost |  | Gross unrealized gains |  | Gross unrealized losses |  | Estimated fair value
September 30, 2016 |  |  |  |  |  |  |
Short-term investments |  |  |  |  |  |  |  |
Bank deposits | $ | 11,999 |  |  | $ | 9 |  |  | $ | (2 | ) |  | $ | 12,006 |
Corporate bonds | 6,014 |  |  | 31 |  |  | — |  |  | 6,045 |
Commercial paper | 13,096 |  |  | 4 |  |  | (9 | ) |  | 13,091 |
Asset backed securities | 63 |  |  | — |  |  | — |  |  | 63 |
Municipal Bonds | 1,778 |  |  | 13 |  |  | — |  |  | 1,791 |
Corporate equity securities | 1,578 |  |  | 2,961 |  |  | — |  |  | 4,539 |
| $ | 34,528 |  |  | $ | 3,018 |  |  | $ | (11 | ) |  | $ | 37,535 |
December 31, 2015 |  |  |  |  |  |  |
Short-term investments |  |  |  |  |  |  |
Bank deposits | $ | 43,043 |  |  | $ | — |  |  | $ | (4 | ) |  | $ | 43,039 |
Corporate bonds | 41,238 |  |  | — |  |  | (35 | ) |  | 41,203 |
Commercial paper | 1,747 |  |  | — |  |  | — |  |  | 1,747 |
Asset backed securities | 10,020 |  |  | — |  |  | (5 | ) |  | 10,015 |
Corporate equity securities | 1,843 |  |  | 4,944 |  |  | — |  |  | 6,787 |
| $ | 97,891 |  |  | $ | 4,944 |  |  | $ | (44 | ) |  | $ | 102,791 |
Summary of goodwill and other identifiable intangible assets | Goodwill and other identifiable intangible assets consist of the following (in thousands):
| September 30, |  | December 31,
| 2016 |  | 2015
Indefinite lived intangible assets |  |  |
Acquired IPR&D | $ | 12,246 |  |  | $ | 12,556 |
Goodwill | 72,359 |  |  | 12,238 |
Definite lived intangible assets |  |  |
Complete technology | 182,577 |  |  | 15,267 |
Less: Accumulated amortization | (10,465 | ) |  | (3,762 | )
Trade name | 2,642 |  |  | 2,642 |
Less: Accumulated amortization | (751 | ) |  | (652 | )
Customer relationships | 29,600 |  |  | 29,600 |
Less: Accumulated amortization | (8,414 | ) |  | (7,304 | )
Total goodwill and other identifiable intangible assets, net | $ | 279,794 |  |  | $ | 60,585 |
Schedule of commercial license rights | Commercial License Rights consist of the following (in thousands):
| September 30, |  | December 31,
| 2016 |  | 2015
CorMatrix | $ | 17,696 |  |  | $ | — |
Selexis | 8,601 |  |  | 8,602 |
| 26,297 |  |  | 8,602 |
Less: accumulated amortization | (312 | ) |  | (48 | )
Total commercial rights, net | $ | 25,985 |  |  | $ | 8,554 |
Summary of property and equipment | Property and equipment is stated at cost and consists of the following (in thousands):
| September 30, |  | December 31,
| 2016 |  | 2015
Lab and office equipment | $ | 1,068 |  |  | $ | 2,248 |
Leasehold improvements | 1,686 |  |  | 273 |
Computer equipment and software | 568 |  |  | 632 |
| 3,322 |  |  | 3,153 |
Less accumulated depreciation and amortization | (1,496 | ) |  | (2,781 | )
Total property and equipment, net | $ | 1,826 |  |  | $ | 372 |
Summary of accrued liabilities | Accrued liabilities consist of the following (in thousands):
| September 30, |  | December 31,
| 2016 |  | 2015
Compensation | $ | 2,150 |  |  | $ | 1,711 |
Professional fees | 640 |  |  | 726 |
Amounts owed to former licensees | 980 |  |  | 915 |
Royalties owed to third parties | 1,028 |  |  | 823 |
Other | 1,877 |  |  | 1,222 |
Total accrued liabilities | $ | 6,675 |  |  | $ | 5,397 |
Schedule for accounting for share-based compensation | The following table summarizes stock-based compensation expense recorded as components of research and development expenses and general and administrative expenses for the periods indicated (in thousands):
| Three months ended |  | Nine months ended
| September 30, |  | September 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
Stock-based compensation expense as a component of: |  |  |  |  |  |  |
Research and development expenses | $ | 2,845 |  |  | $ | 957 |  |  | $ | 6,112 |  |  | $ | 3,131 |
General and administrative expenses | 2,486 |  |  | 1,879 |  |  | 7,578 |  |  | 6,380 |
| $ | 5,331 |  |  | $ | 2,836 |  |  | $ | 13,690 |  |  | $ | 9,511 |
Summary of fair-value options awarded to employees and directors | The fair-value for options that were awarded to employees and directors was estimated at the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions:
| Three months ended |  | Nine months ended
| September 30, |  | September 30,
| 2016 |  | 2015 |  | 2016 |  | 2015
Risk-free interest rate | 1.3% |  | 2% |  | 1.5% |  | 1.7%-2.0%
Dividend yield | — |  | — |  | — |  | —
Expected volatility | 49% |  | 50% |  | 50% |  | 50%-58%
Expected term | 6.7 |  | 6.5 |  | 6.6 |  | 6.6
Forfeiture rate | 5.0% |  | 8.5% |  | 5.0% |  | 8.5%
Restatement of Previously Reported Balance Sheet Information | The effects of these prior period corrections on the consolidated balance sheet is as follows:
| As of December 31, 2015
| As Reported |  | Adjustments |  | As Restated
Deferred income taxes | $ | 216,564 |  |  | $ | (27,481 | ) |  | $ | 189,083 |
Total assets(1) | 530,542 |  |  | (27,481 | ) |  | 503,061 |
2019 convertible senior notes, net - current | — |  |  | 201,985 |  |  | 201,985 |
Total current liabilities | 20,836 |  |  | 201,985 |  |  | 222,821 |
2019 convertible senior notes, net - long term(1) | 201,985 |  |  | (201,985 | ) |  | — |
Equity component of currently redeemable convertible notes (Note 5) | — |  |  | 39,628 |  |  | 39,628 |
Additional paid-in capital | 701,478 |  |  | (39,628 | ) |  | 661,850 |
Accumulated deficit | (402,010 | ) |  | (27,481 | ) |  | (429,491 | )
Total stockholders' equity | 304,391 |  |  | (67,109 | ) |  | 237,282 |
Total liabilities and stockholders' equity(1) | 530,542 |  |  | (27,481 | ) |  | 503,061 |
(1) $3.4 million of unamortized issuance cost was reclassified to debt discount in the concurrently filed 2015 10-K/A form that it is filed after the Company's retrospective adoption of ASU 2015-03, Interest-Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs in Q1 2016.
The effects of these prior period corrections on the condensed consolidated balance sheet is as follows:
| As of September 30, 2015
| As Reported |  | Adjustments |  | As Restated
Deferred income taxes | $ | 208,530 |  |  | $ | (27,481 | ) |  | $ | 181,049 |
Total assets | 523,807 |  |  | (27,481 | ) |  | 496,326 |
Accumulated deficit | (408,351 | ) |  | (27,481 | ) |  | (435,832 | )
Total stockholders' equity | 294,288 |  |  | (27,481 | ) |  | 266,807 |
Total liabilities and stockholders' equity | 523,807 |  |  | (27,481 | ) |  | 496,326 |
The corrections did not have any impact on the company's cash flow statements for any period.

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