Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 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 six months ended June 30, 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		3,325			4,978			163		2,254			10,720
Provision related to prior period sales		—			—			12		—			12
Credits/payments made for current period sales		(2,082	)		(3,301	)		—		(2,218	)		(7,601	)
Credits/payments made for prior period sales		(926	)		(910	)		—		—			(1,836	)

Balance at June 30, 2014	$	1,388		$	1,904		$	247	$	225		$	3,764


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

Balance at January 1, 2013	$	—		$	—		$	—	$	—		$	—
Provision related to current period and deferred sales		1,654			1,009			72		1,095			3,830
Credits/payments made for current period and deferred sales		(1,053	)		(460	)		—		(869	)		(2,382	)

Balance at June 30, 2013	$	601		$	549		$	72	$	226		$	1,448

Product Revenue Recognized and Deferred

The following table summarizes product revenue recognized and deferred during the six months ended June 30, 2014 and 2013 (in thousands):


	June 30, 2014		June 30, 2013
Product revenue recognized	$	23,573	$	7,842
Deferred product revenue		—		1,833

	$	23,573	$	9,675

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 six months ended June 30, 2014 and 2013 (in thousands):


	June 30, 2014		June 30, 2013
Cost of goods sold expensed	$	9,271	$	4,131
Finished goods inventory held by others		—		695

	$	9,271	$	4,826

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 Income (or Loss) and the Number of Shares Used to Compute Basic and Diluted Earnings per Share

The calculation of net income (or loss) and the number of shares used to compute basic and diluted earnings per share for the three months ended June 30, 2014 and 2013 are as follows:


	Three months ended						Six months ended
In thousands	June 30, 2014			June 30, 2013			June 30, 2014			June 30, 2013
Net income (loss)—basic	$	15,323		$	(39,774	)	$	(10,657	)	$	(101,932	)
Gain on warrant derivative liability		(1,416	)		(12,983	)		(2,381	)		(18,826	)
Gain on exchangeable senior notes derivative liability		(200	)		—			—			—
Exchangeable senior notes interest		1,960			—			—			—

Net income (loss)—diluted		15,667			(52,757	)		(13,038	)		(120,758	)
Net earnings (loss) per share—basic		0.09			(0.26	)		(0.06	)		(0.68	)
Weighted average shares outstanding—basic		172,886			150,694			172,879			150,562
Effect of dilutive warrants		963			6,349			997			6,505
Effect of dilutive stock options		277			—			—			—
Effect of dilutive restricted stock		2,022			—			—			—
Effect of dilutive exchangeable senior notes if converted		31,526			—			—			—

Weighted average shares outstanding—diluted		207,674			157,043			173,876			157,067
Net income (or loss) per share—diluted		0.08			(0.34	)		(0.07	)		(0.77	)

Anti-Dilutive Securities Not Included in the Computation of Net Income (or Loss) per Share

For the three and six months ended June 30, 2014 and 2013, the following potentially dilutive securities were not included in the computation of net income (or loss) per share because the effect would be anti-dilutive:


	Three months ended				Six months ended
In thousands	June 30, 2014		June 30, 2013		June 30, 2014		June 30, 2013
Stock options		10,644		11,196		11,864		11,196
Restricted stock and restricted stock units		—		913		2,305		913
Warrants		—		1,752		1,685		1,752
Exchangeable senior notes (if converted)		—		17,021		49,215		17,021

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 June 30, 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:


	June 30, 2014
*In millions*	Total		Level 1		Level 2		Level 3
Asset:
Cash equivalents—money markets	$	73.5	$	73.5	$	—	$	—


Liabilities:
Warrant derivative liability	$	4.5	$	—	$	—	$	4.5
Long-term debt derivative liabilities	$	9.4	$	—	$	—	$	9.4


	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 derivative liability	$	11.1	$	—	$	—	$	11.1

Carrying Amounts and Estimated Fair Values of Debt Instruments

The carrying amounts and the estimated fair values of debt instruments as of June 30, 2014 and December 31, 2013, are as follows:


	June 30, 2014				December 31, 2013
In thousands	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Long-term debt—December 2012 financing	$	88,700	$	87,800	$	87,717	$	75,700
2012 Notes		31,266		22,900		149,317		106,600
2014 Notes		87,901		93,600		—		—

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			Long-Term Debt Derivative Liabilities			Totals

Balance at December 31, 2013				$	6,894		$	11,100		$	17,994
Record initial fair value of derivative liability on senior notes					—			3,500			3,500
Gain on change in fair value of derivative liabilities					(2,204	)		(5,200	)		(7,404	)
Compensation income for change in fair value of warrants issued to former employees					(177	)		—			(177	)


Balance at June 30, 2014				$	4,513		$	9,400		$	13,913



	October 2009 Warrants			Long-Term Debt Derivative Liability			Foreign Exchange Contracts			Totals

Balance at December 31, 2012	$	54,854		$	14,577		$	—		$	69,431

(Gain) loss on change in fair value of derivative liability		(17,371	)		(5,977	)		887			(22,461	)
Compensation income for change in fair value of warrants issued to former employees		(1,455	)		—			—			(1,455	)


Balance at June 30, 2013	$	36,028		$	8,600		$	887		$	45,515

- 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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