Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2014

Summarizes Activity of the Product Revenue Allowance and Reserve Categories

The following table summarizes activity in each of the product revenue allowance and reserve categories described above for the three months ended March 31, 2014 and 2013 (in thousands):


	Trade Allowances			Rebates, Chargebacks and Discounts			Product Returns		Other Incentives			Total

Balance at January 1, 2014	$	1,071		$	1,137		$	72	$	189		$	2,469
Provision related to current period sales		1,400			1,930			68		901			4,299
Provision related to prior period sales		—			—			12		—			12
Credits/payments made for current period sales		(411	)		(765	)		—		(972	)		(2,148	)
Credits/payments made for prior period sales		(926	)		(911	)		—		—			(1,837	)

Balance at March 31, 2014	$	1,134		$	1,391		$	152	$	118		$	2,795


	Trade Allowances			Rebates, Chargebacks and Discounts			Product Returns		Other Incentives			Total
Balance at January 1, 2013	$	—		$	—		$	—	$	—		$	—
Provision related to current period and deferred sales		1,073			259			72		830			2,234
Credits/payments made for current period and deferred sales		(566	)		(3	)		—		(210	)		(779	)


Balance at March 31, 2013	$	507		$	256		$	72	$	620		$	1,455

Product Revenue Recognized and Deferred

The following table summarizes product revenue recognized and deferred during the three months ended March 31, 2014 and 2013 (in thousands):


	March 31, 2014		March 31, 2013
Product revenue recognized	$	10,967	$	2,341
Deferred product revenue		—		2,865


	$	10,967	$	5,206

Expensed and Capitalized Cost of Goods

In conjunction with the Company’s recognition and deferral of product revenues, the Company expensed and capitalized the associated cost of goods, as follows, during the three months ended March 31, 2014 and 2013 (in thousands):


	March 31, 2014		March 31, 2013
Cost of goods sold expensed	$	4,246	$	1,287
Finished goods inventory held by others		—		1,422


	$	4,246	$	2,709

Estimated Useful Lives

The estimated useful lives, by asset classification, are as follows:


Asset Classification		Useful Lives
Computer equipment and software		3 - 5 years
Furniture and fixtures		5 years
Leasehold improvements		Lesser of useful life or lease term

Net Loss and the Number of Shares Used to Compute Basic and Diluted Earnings per Share

The calculation of net loss and the number of shares used to compute basic and diluted earnings per share for the three months ended March 31, 2014 and 2013 are as follows:


In thousands	March 31, 2014			March 31, 2013
Net loss—basic	$	(25,980	)	$	(62,158	)
Gain on warrant derivative liability		(965	)		(5,843	)

Net loss—diluted		(26,945	)		(68,001	)
Net loss per share—basic		(0.15	)		(0.41	)
Weighted average shares outstanding—basic		172,872			150,430
Effect of dilutive warrants		1,559			6,643

Weighted average shares outstanding—diluted		174,431			157,073
Net income loss per share—diluted		(0.15	)		(0.43	)

Anti-Dilutive Securities Not Included in the Computation of Net Loss per Share

For the three months ended March 31, 2014 and 2013, the following potentially dilutive securities were not included in the computation of net loss per share because the effect would be anti-dilutive:


In thousands	March 31, 2014		March 31, 2013
Stock options		11,577		11,256
Restricted stock and restricted stock units		2,168		913
Warrants		1,685		1,752

Assets and Liability Measured at Fair Value on a Recurring Basis

The following table presents information about the Company’s assets and liabilities as of March 31, 2014 and December 31, 2013 that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:


	March 31, 2014
*In millions*	Total		Level 1		Level 2		Level 3
Asset:
Cash equivalents—money markets	$	93.5	$	93.5	$	—	$	—

Liabilities:
Warrant derivative liability	$	5.9	$	—	$	—	$	5.9
Long term debt redemption feature	$	7.6	$	—	$	—	$	7.6


	December 31, 2013
*In millions*	Total		Level 1		Level 2		Level 3
Asset:
Cash equivalents—money markets	$	113.5	$	113.5	$	—	$	—

Liabilities:
Warrant derivative liability	$	6.9	$	—	$	—	$	6.9
Long term debt redemption feature	$	11.1	$	—	$	—	$	11.1

Warrant

Change in Fair Value of Derivative Liabilities

The change in the fair value of derivative liabilities is as follows (in thousands):


	October 2009 Warrants			Debt Redemption Feature			Foreign Exchange Contracts		Totals
Balance at December 31, 2013	$	6,894		$	11,100		$	—	$	17,994


Gain on change in fair value of derivative liability		(893	)		(3,500	)		—		(4,393	)
Compensation income for change in fair value of warrants issued to former employees		(72	)		—			—		(72	)
Transfers to equity		—			—			—		—
Balance at March 31, 2014	$	5,929		$	7,600		$	—	$	13,529


	October 2009 Warrants			Debt Redemption Feature		Foreign Exchange Contracts		Totals
Balance at December 31, 2012	$	54,854		$	14,576	$	—	$	69,430


(Gain) loss on change in fair value of derivative liabilities		(5,392	)		1,024		748		(3,620	)
Compensation income for change in fair value of warrants issued to former employees		(451	)		—		—		(451	)
Transfers to equity		—			—		—		—


Balance at March 31, 2013	$	49,011		$	15,600	$	748	$	65,359

- 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.

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