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v3.19.1

Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended
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Mar. 31, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract] |
Schedule of Revenue by Source | The following table represents disaggregation of Royalties, Material Sales and License fees, milestone and other (in thousands):
|  | Three months ended |  |  |  |  |  |
|  | March 31, |  |  |  |  |  |
|  | 2019 |  | 2018 |  |  |  |
Royalties |  |  |  |  |  |  |  |
| Promacta | $ | 14,193 |  | $ | 15,573 |  |  |  |
| Kyprolis | 3,833 |  | 3,262 |  |  |  |
| Evomela | 911 |  | 1,600 |  |  |  |
| Other | 601 |  | 385 |  |  |  |
|  | $ | 19,538 |  | $ | 20,820 |  |  |  |
Material Sales |  |  |  |  |  |  |  |
| Captisol | $ | 8,959 |  | $ | 4,391 |  |  |  |
License fees, milestones and other |  |  |  |  |  |  |  |
| License Fees | $ | 850 |  | $ | 26,955 |  |  |  |
| Milestone | 11,932 |  | 2,825 |  |  |  |
| Other | 2,205 |  | 1,166 |  |  |  |
|  | $ | 14,987 |  | $ | 30,946 |  |  |  |
Total |  | $ | 43,484 |  | $ | 56,157 |  |  |  |
Schedule of Investment Categories | Our investments consist of the following at March 31, 2019 and December 31, 2018 (in thousands):
| March 31, 2019 |  |  |  |  |  |  |  | December 31, 2018 |  |  |  |  |  |
| 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 | $ | 673,988 |  | $ | 184 |  | $ | (20) |  | $ | 674,152 |  | $ | 311,066 |  | $ | 26 |  | $ | (29) |  | $ | 311,063
Corporate bonds | 74,875 |  | 56 |  | (1) |  | 74,930 |  | 53,223 |  | 1 |  | (45) |  | 53,179
Commercial paper | 563,585 |  | 60 |  | (112) |  | 563,533 |  | 225,731 |  | 8 |  | (76) |  | 225,663
U.S. Government bonds | 3,013 |  | — |  | (3) |  | 3,010 |  | 7,982 |  | — |  | (9) |  | 7,973
Municipal bonds | — |  | — |  | — |  | — |  | 2,017 |  | — |  | (4) |  | 2,013
Corporate equity securities(1) | 4,525 |  | 2,915 |  | — |  | 7,440 |  | 135 |  | 1,191 |  | — |  | 1,326
Warrants | — |  | 510 |  | — |  | 510 |  | — |  | — |  | — |  | —
| $ | 1,319,986 |  | $ | 3,725 |  | $ | (136) |  | $ | 1,323,575 |  | $ | 600,154 |  | $ | 1,226 |  | $ | (163) |  | $ | 601,217
(1) The amortized cost for corporate equity securities represents the original purchase cost of the equity securities.
Schedule of Goodwill and Other Identifiable Intangible Assets | Goodwill and other identifiable intangible assets consist of the following (in thousands):
| March 31, |  | December 31,
| 2019 |  | 2018
Goodwill | $ | 86,809 |  | $ | 86,646
Definite lived intangible assets |  |  |
Complete technology | 235,413 |  | 235,413
Less: accumulated amortization | (38,169) |  | (35,070)
Trade name | 2,642 |  | 2,642
Less: accumulated amortization | (1,081) |  | (1,048)
Customer relationships | 29,600 |  | 29,600
Less: accumulated amortization | (12,115) |  | (11,744)
Total goodwill and other identifiable intangible assets, net | $ | 303,099 |  | $ | 306,439
Schedule of Commercial License Rights | Commercial license and other economic rights consist of the following (in thousands):
| March 31, |  | December 31,
| 2019 |  | 2018
Aziyo and CorMatrix | $ | 17,696 |  | $ | 17,696
Palvella | 10,000 |  | 10,000
Selexis | 8,602 |  | 8,602
Dianomi | 2,000 |  | —
| 38,298 |  | 36,298
Less: accumulated amortization attributed to principal or research and development | (7,275) |  | (4,838)
Total commercial license and other economic rights, net | $ | 31,023 |  | $ | 31,460
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands):
|  | March 31, |  | December 31,
|  | 2019 |  | 2018
Compensation |  | $ | 2,384 |  | $ | 4,045
Professional fees |  | 1,022 |  | 942
Amounts owed to former licensees |  | 427 |  | 428
Royalties owed to third parties |  | 1,084 |  | 1,025
Payments due to broker for share repurchases |  | — |  | 4,613
Return reserve |  | 2,813 |  | 3,590
Restructuring |  | 287 |  | 1,093
Current lease liabilities |  | 1,187 |  | —
Other |  | 5,567 |  | 3,464
Total accrued liabilities |  | $ | 14,771 |  | $ | 19,200
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 |  |  |  |  |  |
| March 31, |  |  |  |  |  |
| 2019 |  | 2018 |  |  |  |
Share-based compensation expense as a component of: |  |  |  |  |  |  |
Research and development expenses | $ | 2,127 |  | $ | 1,767 |  |  |  |
General and administrative expenses | 3,220 |  | 2,788 |  |  |  |
| $ | 5,347 |  | $ | 4,555 |  |  |  |
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 |  |  |  |  |  |
| March 31, |  |  |  |  |  |
| 2019 |  | 2018 |  |  |  |
Risk-free interest rate | 2.5% |  |  | 2.7% |  |  |  |  |
Dividend yield | — |  |  | — |  |  |  |  |
Expected volatility | 44% |  |  | 33% |  |  |  |  |
Expected term | 5.1 |  | 5.7 |  |  |  |
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 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 March 31, 2019
Common stock price |  |  | $125.71
Exercise price, conversion premium and bond hedge |  |  | $75.05
Risk-free interest rate |  |  | 2.46% |
Volatility |  |  | 35% |
Dividend yield |  |  | — |
Annual coupon rate |  |  | 0.75% |
Remaining contractual term (in years) |  |  | 0.38
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 (in thousands):
| Three months ended |  |  |  |  |  |
| March 31, |  |  |  |  |  |
| 2019 |  | 2018 |  |  |  |
Weighted average shares outstanding: | 20,447 |  | 21,209 |  |  |  |
Dilutive potential common shares: |  |  |  |  |  |  |
Restricted stock | 45 |  | 64 |  |  |  |
Stock options | 785 |  | 1,119 |  |  |  |
2019 Convertible Senior Notes | — |  | 1,719 |  |  |  |
Warrants | — |  | 689 |  |  |  |
Shares used to compute diluted income per share | 21,277 |  | 24,800 |  |  |  |
Potentially dilutive shares excluded from calculation due to anti-dilutive effect | 7,015 |  | 148 |  |  |  |

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