Significant Accounting Policies (Tables)

9 Months Ended

Sep. 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 nine months ended September 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		5,514			8,335			270		3,845			17,964
Provision related to prior period sales		—			—			12		—			12
Credits/payments made for current period sales		(4,120	)		(5,876	)		—		(3,759	)		(13,755	)
Credits/payments made for prior period sales		(925	)		(911	)		—		—			(1,836	)

Balance at September 30, 2014	$	1,540		$	2,685		$	354	$	275		$	4,854


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

Balance at January 1, 2013	$	—		$	—		$	—	$	—		$	—
Provision related to current period and deferred sales		2,839			2,418			72		2,018			7,347
Credits/payments made for current period and deferred sales		(1,951	)		(1,484	)		—		(1,835	)		(5,270	)

Balance at September 30, 2013	$	888		$	934		$	72	$	183		$	2,077

Product Revenue Recognized and Deferred

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


	September 30, 2014		September 30, 2013
Product revenue recognized	$	37,722	$	16,245
Deferred product revenue		—		1,617

	$	37,722	$	17,862

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 nine months ended September 30, 2014 and 2013 (in thousands):


	September 30, 2014		September 30, 2013
Cost of goods sold expensed	$	14,637	$	7,813
Finished goods inventory held by others		—		641

	$	14,637	$	8,454

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

The calculation of net loss and the number of shares used to compute basic and diluted loss per share for the three and nine months ended September 30, 2014 and 2013 are as follows:


	Three months ended						Nine months ended
In thousands	September 30, 2014			September 30, 2013			September 30, 2014			September 30, 2013
Net loss—basic	$	(26,050	)	$	(48,884	)	$	(36,707	)	$	(150,816	)
Gain on warrant derivative liability		(4,392	)		—			(6,773	)		(15,256	)

Net loss—diluted		(30,442	)		(48,884	)		(43,480	)		(166,072	)
Net loss per share—basic		(0.15	)		(0.29	)		(0.21	)		(0.96	)
Weighted average shares outstanding—basic		174,502			170,187			173,426			157,105
Effect of dilutive warrants		639			—			879			6,382

Weighted average shares outstanding—diluted		175,141			170,187			174,305			163,487
Net loss per share—diluted		(0.17	)		(0.29	)		(0.25	)		(1.02	)

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

For the three and nine months ended September 30, 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:


	Three months ended				Nine months ended
In thousands	September 30, 2014		September 30, 2013		September 30, 2014		September 30, 2013
Stock options		11,246		10,866		11,246		10,866
Restricted stock and restricted stock units		2,262		824		2,262		824
Warrants		—		9,817		—		1,702
Exchangeable senior notes (if converted)		49,215		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 September 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:


	September 30, 2014
*In millions*	Total		Level 1		Level 2		Level 3
Asset:
Cash equivalents—money markets	$	65.1	$	65.1	$	—	$	—


Liabilities:
Warrant derivative liability	$	0.1	$	—	$	—	$	0.1
Long-term debt derivative liabilities	$	9.0	$	—	$	—	$	9.0


	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 September 30, 2014 and December 31, 2013, are as follows:


	September 30, 2014				December 31, 2013
In thousands	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Long-term debt—December 2012 financing	$	89,152	$	79,400	$	87,717	$	75,700
2012 Notes		31,266		24,100		149,317		106,600
2014 Notes		89,221		78,700		—		—

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 2014 senior notes					—			3,500			3,500
Gain on change in fair value of derivative liabilities					(6,270	)		(5,600	)		(11,870	)
Compensation income for change in fair value of warrants issued to former employees					(503	)		—			(503	)


Balance at September 30, 2014				$	121		$	9,000		$	9,121



	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		(14,077	)		(7,377	)		395			(21,059	)
Compensation income for change in fair value of warrants issued to former employees		(1,179	)		—			—			(1,179	)


Balance at September 30, 2013	$	39,598		$	7,200		$	395		$	47,193

- 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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