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Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 9 Months Ended
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Sep. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Schedule of Revenue by Source | The following table represents disaggregation of Material Sales and License fees, milestone and other (in thousands):
|  | Three months ended |  |  |  | Nine months ended |  |
|  | September 30, |  |  |  | September 30, |  |
|  | 2018 |  | 2017 |  | 2018 |  | 2017
Material Sales |  |  |  |  |  |  |  |
| Captisol | $ | 7,027 |  | $ | 7,664 |  | $ | 19,030 |  | $ | 14,336
License fees, milestones and other |  |  |  |  |  |  |  |
| License Fees | $ | 265 |  | $ | 738 |  | $ | 75,201 |  | $ | 4,276
| Milestone | 1,308 |  | 2,059 |  | 6,052 |  | 7,564
| Other | 936 |  | 983 |  | 3,237 |  | 4,090
|  | $ | 2,509 |  | $ | 3,780 |  | $ | 84,490 |  | $ | 15,930
Schedule of Investment Categories | Our investments consist of the following at September 30, 2018 and December 31, 2017 (in thousands):
| September 30, 2018 |  |  |  |  |  |  |  | December 31, 2017 |  |  |  |  |  |
| Amortized cost |  | Gross unrealized gains |  | Gross unrealized losses |  | Estimated fair value |  | Amortized cost |  | Gross unrealized gains |  | Gross unrealized losses |  | Estimated fair value
Short-term investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Bank deposits | $ | 411,166 |  | $ | 98 |  | $ | (17) |  | $ | 411,247 |  | $ | 80,095 |  | $ | 6 |  | $ | (42) |  | $ | 80,059
Corporate bonds | 76,961 |  | 4 |  | (52) |  | 76,913 |  | 55,335 |  | — |  | (96) |  | 55,239
Commercial paper | 288,549 |  | 3 |  | (72) |  | 288,480 |  | 27,933 |  | — |  | (20) |  | 27,913
U.S. Government bonds | 110,834 |  | — |  | (25) |  | 110,809 |  | 8,939 |  | — |  | (10) |  | 8,929
Agency bonds | — |  | — |  | — |  | — |  | 4,991 |  | — |  | (1) |  | 4,990
Municipal bonds | 2,008 |  | — |  | (13) |  | 1,995 |  | 2,028 |  | — |  | (13) |  | 2,015
Corporate equity securities | 135 |  | 1,549 |  | — |  | 1,684 |  | 207 |  | 1,689 |  | — |  | 1,896
| $ | 889,653 |  | $ | 1,654 |  | $ | (179) |  | $ | 891,128 |  | $ | 179,528 |  | $ | 1,695 |  | $ | (182) |  | $ | 181,041
Schedule of Goodwill and Other Identifiable Intangible Assets | Goodwill and other identifiable intangible assets consist of the following (in thousands):
| September 30, |  | December 31,
| 2018 |  | 2017
Indefinite lived intangible assets |  |  |
IPR&D | $ | — |  | $ | 7,923
Goodwill | 85,961 |  | 85,959
Definite lived intangible assets |  |  |
Complete technology | 228,413 |  | 222,900
Less: accumulated amortization | (31,990) |  | (23,301)
Trade name | 2,642 |  | 2,642
Less: accumulated amortization | (1,015) |  | (916)
Customer relationships | 29,600 |  | 29,600
Less: accumulated amortization | (11,374) |  | (10,264)
Total goodwill and other identifiable intangible assets, net | $ | 302,237 |  | $ | 314,543
Schedule of Commercial License Rights | Commercial license rights consist of the following (in thousands):
| September 30, |  | December 31,
| 2018 |  | 2017
Aziyo and CorMatrix | $ | 17,696 |  | $ | 17,696
Selexis | 8,602 |  | 8,602
| $ | 26,298 |  | $ | 26,298
Less: accumulated amortization | (5,364) |  | (6,772)
Total commercial rights, net | $ | 20,934 |  | $ | 19,526
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands):
|  | September 30, |  | December 31,
|  | 2018 |  | 2017
Compensation |  | $ | 4,249 |  | $ | 4,085
Professional fees |  | 594 |  | 430
Amounts owed to former licensees |  | 481 |  | 396
Royalties owed to third parties |  | 74 |  | 954
Other |  | 3,869 |  | 1,512
Total accrued liabilities |  | $ | 9,267 |  | $ | 7,377
Schedule of Accounting for Share-Based Compensation | The following table summarizes share-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, |  |
| 2018 |  | 2017 |  | 2018 |  | 2017
Share-based compensation expense as a component of: |  |  |  |  |  |  |
Research and development expenses | $ | 2,257 |  | $ | 2,394 |  | $ | 6,120 |  | $ | 8,260
General and administrative expenses | 3,213 |  | 2,854 |  | 8,717 |  | 7,657
| $ | 5,470 |  | $ | 5,248 |  | $ | 14,837 |  | $ | 15,917
Schedule 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, |  |
| 2018 |  | 2017 |  | 2018 |  | 2017
Risk-free interest rate | N/A |  |  | 2% |  |  | 2.8% |  |  | 2.1% |
Dividend yield | N/A |  |  | N/A |  |  | N/A |  | N/A
Expected volatility | N/A |  |  | 47% |  |  | 34% |  |  | 47% |
Expected term | N/A |  |  | 6.5 |  | 5.7 |  | 6.8
Schedule of Inputs and Assumptions Used to Calculate Fair Value of Derivatives | The following table summarizes the inputs and assumptions used in the Black-Scholes model to calculate the fair value of the assets and the inputs and assumptions used in the Binomial model to calculate the fair value of the derivative liabilities associated with the 2023 Notes:
|  | As of May 22, 2018 | As of June 19, 2018
Common stock price |  | $187.09 | $195.91
Exercise price, conversion premium and bond hedge |  | $248.48 | $248.48
Exercise price, warrant |  | $315.38 | $315.38
Risk-free interest rate |  | 2.9% |  | 2.8% |
Volatility |  | 30%-35% | 30%-35%
Dividend yield |  | — |  | — |
Annual coupon rate |  | 0.75% |  | 0.75% |
Remaining contractual term (in years) |  | 5.00 | 4.98
In addition, on May 22, 2018, we amended our 2019 Notes making an irrevocable election to settle the entire note in cash. As a result, we reclassified from equity to derivative liability the fair value of the conversion premium as of May 22, 2018. Amounts paid in excess of the principal amount will be offset by an equal receipt of cash under the corresponding convertible bond hedge. As a result, we reclassified from equity to derivative asset the fair value of the bond hedge as of May 22, 2018. Changes in the fair value of these derivatives are reflected in other expense, net, in our condensed consolidated statements of operations. The following table summarizes the inputs and assumptions used in the Black-Scholes model to calculate the fair value of the derivative assets and the inputs and assumptions used in the Binomial model to calculate the fair value of the derivative liability associated with the 2019 Notes:
|  | As of May 22, 2018 | As of September 30, 2018
Common stock price |  | $187.09 | $274.49
Exercise price, conversion premium and bond hedge |  | $75.05 | $75.05
Risk-free interest rate |  | 2.47% |  | 2.59% |
Volatility |  | 30%-35% | 30%-35%
Dividend yield |  | — |  | — |
Annual coupon rate |  | 0.75% |  | 0.75% |
Remaining contractual term (in years) |  | 1.25 | 0.89
Schedule 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:
| Three months ended |  |  |  | Nine months ended |  |
| September 30, |  |  |  | September 30, |  |
| 2018 |  | 2017 |  | 2018 |  | 2017
Weighted average shares outstanding: | 21,148,080 |  | 21,070,678 |  | 21,188,938 |  | 21,006,718
Dilutive potential common shares: |  |  |  |  |  |  |
Restricted stock | 83,427 |  | 79,222 |  | 68,997 |  | 140,340
Stock options | 1,247,940 |  | 1,019,342 |  | 1,166,777 |  | 980,461
2019 Convertible Senior Notes | — |  | 1,334,357 |  | 923,650 |  | 1,118,456
Warrants | 1,572,969 |  | 47,646 |  | 1,081,209 |  | 15,882
Shares used to compute diluted income per share | 24,052,416 |  | 23,551,245 |  | 24,429,571 |  | 23,261,857
Potentially dilutive shares excluded from calculation due to anti-dilutive effect | 3,125,815 |  | 255,101 |  | 1,788,709 |  | 2,531,219

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