Prepaid and other current assets

$ 405,078,000

^[1],[2]

$ 527,266,000

^[3]

Short-term investments

^[1]

4,848,000

^[3]

Accounts receivable, net

22,646,000

^[1]

31,183,000

^[3]

Notes receivable

55,836,000

^[1]

53,613,000

^[3]

13,372,000

^[1]

14,386,000

^[3]

Total current assets

510,944,000

^[1]

640,443,000

^[3]

Property and equipment, net

7,557,000

^[1]

7,222,000

^[3]

Inventory, Net

^[1]

14,012,000

9,147,000

Notes and other receivables, long-term

341,691,000

^[1]

349,223,000

^[3]

14,975,000

^[1]

17,124,000

^[3]

Long-term deferred tax assets

2,588,000

^[1]

2,432,000

^[3]

Intangible Assets, Net (Excluding Goodwill)

^[1]

213,186,000

215,823,000

Other assets

9,460,000

^[1]

10,856,000

^[3]

Total assets

1,100,401,000

^[1]

1,243,123,000

^[3]

Current liabilities:

Accounts payable

9,954,000

^[1]

19,785,000

^[3]

Accrued liabilities

40,138,000

^[1]

45,881,000

^[3]

Accrued Income Taxes, Current

871,000

^[1]

1,377,000

^[3]

Convertible Notes Payable, Current

^[1]

126,066,000

^[3]

Total current liabilities

50,963,000

^[1]

193,109,000

^[3]

Convertible notes payable

119,166,000

^[1]

117,415,000

^[3]

Business Combination, Contingent Consideration, Liability, Noncurrent

^[1]

41,400,000

42,000,000

Other long-term liabilities

45,763,000

^[1]

44,709,000

^[3]

Total liabilities

257,292,000

^[1]

397,233,000

^[3]

Commitments and contingencies (Note 12)

^[1]

^[3]

Stockholders' deficit:

Preferred stock, par value $0.01 per share, 10,000 shares authorized; no shares issued and outstanding

^[1]

^[3]

Common stock, par value $0.01 per share, 350,000 shares authorized; 152,812 and 153,775 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively

1,528,000

^[1]

1,538,000

^[3]

Additional paid-in capital

(101,486,000)

^[1]

(102,443,000)

^[3]

Treasury Stock, Value

1,188,000

Unrealized Gain (Loss) on Investments

^[3]

1,181,000

^[1]

Retained earnings

944,255,000

^[1]

945,614,000

^[3]

Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest

843,109,000

845,890,000

Total liabilities and stockholders’ equity

$ 1,100,401,000

^[1]

$ 1,243,123,000

^[3]

[1]	unaudited
[2]	unaudited
[3]	Note 1

CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares
shares in Thousands

Mar. 31, 2018

^[1]

Dec. 31, 2017

^[2]

Preferred stock par value (in Dollars per Share)

$ 0.01

Preferred stock, shares authorized (in Shares)

10,000

Preferred stock, shares issued (in Shares)

Preferred stock, shares outstanding (in Shares)

Common stock par value (in Dollars per Share)

$ 0.01

Common stock, shares authorized (in Shares)

350,000

Common stock, shares issued (in Shares)

152,812

153,775

Common stock, shares outstanding (in Shares)

152,812

153,775

[1]	unaudited
[2]	Note 1

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2018

Mar. 31, 2017

Repayments of Secured Debt

$ 126,447

$ 0

Net Income (Loss), Including Portion Attributable to Noncontrolling Interest

1,602

7,194

Adjustments to reconcile net income to net cash provided by operating activities:

Amortization of convertible notes and term loan offering costs

2,132

2,675

Amortization of Intangible Assets

6,293

6,015

Change in fair value of acquired royalty rights

(11,091)

(13,146)

Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Change in Unrealized Gain (Loss)

(71)

(100)

Business Combination, Contingent Consideration Arrangements, Change in Amount of Contingent Consideration, Liability

(600)

1,442

Depreciation, Amortization and Accretion, Net

1,004

Gain (Loss) on Sale of Investments

(764)

(44)

Inventory Write-down

114

112

Provision for Doubtful Accounts

(12)

Stock-based compensation expense

957

1,112

Deferred income taxes

794

15,321

Changes in assets and liabilities:

Receivables from licensees and other

7,621

12,441

Receivables from licensees and other

(945)

(6,000)

Prepaid and other current assets

532

(2,073)

Accrued interest on notes receivable

(74)

(75)

Increase (Decrease) in Inventories

(4,919)

(761)

Other assets

(1,720)

Accounts payable

(9,940)

10,932

Accrued liabilities

(6,226)

4,944

Increase (Decrease) in Income Taxes Payable

(505)

4,586

Other long-term liabilities

407

(10,875)

Net cash provided by / (used in) operating activities

(13,521)

45,782

Cash flows from investing activities

Payments to Acquire Investments

15,975

Proceeds from Sale of Available-for-sale Securities, Equity

4,115

16,015

Payments for (Proceeds from) Productive Assets

18,623

13,494

Proceeds from Sale of Productive Assets

108,169

Proceeds from Collection of Notes Receivable

7,890

Payments to Acquire Property, Plant, and Equipment

1,398

534

Net cash provided by investing activities

21,340

129,059

Cash flows from financing activities

Cash dividends paid

(21)

Payments for Repurchase of Common Stock

(3,560)

(7,647)

Net cash used in financing activities

(130,007)

(7,668)

Net increase in cash and cash equivalents

(122,188)

167,173

Cash and cash equivalents at beginning of the period

^[1]

527,266

147,154

Cash and cash equivalents at end of period

^[3]

405,078

^[2]

314,327

Supplemental cash flow information

Cash paid for income taxes

644

120

Cash paid for interest

2,529

Assets held for sale reclassified from notes receivable to other assets

10,000

Noncash or Part Noncash Acquisition, Other Assets Acquired

598

868

Capital Expenditures Incurred but Not yet Paid

$ 0

$ (288)

[1]	Note 1
[2]	unaudited
[3]	unaudited

Summary of Significant Accounting Policies	3 Months Ended
Summary of Significant Accounting Policies	Mar. 31, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	1. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements of PDL Biopharma, Inc. and its subsidiaries (collectively, the “Company” or “PDL”) have been prepared in accordance with Generally Accepted Accounting Principles (United States) (“GAAP”) for interim financial information. The financial statements include all adjustments (consisting only of normal recurring adjustments), that management of the Company believes are necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period. The accompanying unaudited Condensed Consolidated Financial Statements and related financial information should be read in conjunction with the Company’s audited Consolidated Financial Statements and the related notes thereto for the year ended December 31, 2017, included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the Securities and Exchange Commission (“SEC”) on March 16, 2018. The Condensed Consolidated Balance Sheet at December 31, 2017, has been derived from the audited Consolidated Financial Statements at that date, but does not include all disclosures required by GAAP. Significant Accounting Policies The Company’s significant accounting policies are described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. Summarized below are the accounting pronouncements adopted subsequent to December 31, 2017. Adopted Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. The new standard provides for specific guidance how certain transactions are classified in the statement of cash flows. Effective January 1, 2018, the Company adopted the requirements of ASU No. 2016-15. The adoption did not have an effect on the Consolidated Financial Statements on the adoption date and no adjustment to prior year Consolidated Financial Statements was required. In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory in the period in which the transfer occurs. Effective January 1, 2018, the Company adopted the requirements of ASU No. 2016-16. The adoption did not have an effect on the Consolidated Financial Statements on the adoption date and no adjustment to prior year Consolidated Financial Statements was required. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which requires entities to show the changes in total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. Effective January 1, 2018, the Company adopted the requirements of ASU No. 2016-18. The adoption did not have an effect on the Consolidated Financial Statements on the adoption date and no adjustment to prior year Consolidated Financial Statements was required. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Effective January 1, 2018, the Company adopted the requirements of ASU 2014-09 using the modified retrospective method as discussed in Note 2 below. All amounts and disclosures set forth in this Quarterly Report on Form 10-Q reflect these changes. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases, which seeks to increase transparency and comparability among organizations by, among other things, recognizing lease assets and lease liabilities on the balance sheet for leases classified as operating leases under previous GAAP and disclosing key information about leasing arrangements. ASU No. 2016-02 becomes effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the provisions of ASU No. 2016-02 and assessing the impact, if any, it may have on the Company’s Condensed Consolidated Financial Statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. The new guidance amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses. ASU No. 2016-13 has an effective date of the fiscal years beginning December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating ASU 2016-13 and assessing the impact, if any, it may have to the Company’s consolidated results of operations, financial position and cash flows.

Net Income per Share

3 Months Ended

Mar. 31, 2018

Earnings Per Share [Abstract]

Net Income per Share

. Net Income per Share



	Three Months Ended
	March 31,
Net Income per Basic and Diluted Share:	2018		2017
(in thousands except per share amounts)
Numerator
Income attributable to PDL’s shareholders used to compute net income per basic and diluted share	$	1,602	$	7,241

Denominator
Total weighted average shares used to compute net income attributable to PDL’s shareholders, per basic share	151,473		163,745
Restricted stock outstanding	1,106		247
Shares used to compute net income attributable to PDL’s shareholders, per diluted share	152,579		163,992

Net income attributable to PDL’s shareholders per share - basic	$	0.01	$	0.04
Net income attributable to PDL’s shareholders per share - diluted	$	0.01	$	0.04

The Company computes net income per diluted share using the sum of the weighted-average number of common and common equivalent shares outstanding. Common equivalent shares used in the computation of net income per diluted share include shares that may be issued pursuant to outstanding stock options and restricted stock awards, the 4.0% Convertible Senior Notes due February 1, 2018 (the “February 2018 Notes”) and repaid on February 1, 2018, and the 2.75% Convertible Senior Notes due December 1, 2021 (the “December 2021 Notes”), in each case, on a weighted average basis for the period that the notes were outstanding, including the effect of adding back interest expense and the underlying shares using the if converted method.

December 2021 Notes Capped Call Potential Dilution

In November 2016, the Company issued $150.0 million in aggregate principal of the December 2021 Notes, which provide in certain situations for the conversion of the outstanding principal amount of the December 2021 Notes into shares of the Company’s common stock at a predefined conversion rate. For additional information on the conversion rates on the Company’s convertible debt, see Note 13. In conjunction with the issuance of the December 2021 Notes, the Company entered into a capped call transaction with a hedge counterparty. The capped call transaction is expected generally to reduce the potential dilution, and/or offset, to an extent, the cash payments the Company may choose to make in excess of the principal amount, upon conversion of the December 2021 Notes. The Company has excluded the capped call transaction from the diluted EPS computation as such securities would have an antidilutive effect and those securities should be considered separately rather than in the aggregate in determining whether their effect on diluted EPS would be dilutive or antidilutive. For additional information regarding the capped call transaction related to the Company’s December 2021 Notes, see Note 13.

Anti-Dilutive Effect of Restricted Stock Awards and Stock Options

For the three months ended March 31, 2018 and 2017, the Company excluded approximately 1.2 million and 1.7 million shares underlying restricted stock awards, respectively, calculated on a weighted average basis, from its net income per diluted share calculations because their effect was anti-dilutive.

For the three months ended March 31, 2018 and 2017, the Company excluded approximately 1.5 million and zero shares underlying outstanding stock options, respectively, calculated on a weighted average basis, from its net income per diluted share calculations because their effect was anti-dilutive.

Fair Value Measurements

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

The fair value of the Company’s financial instruments are estimates of the amounts that would be received if the Company were to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date or exit price. The assets and liabilities are categorized and disclosed in one of the following three categories:

Level 1 – based on quoted market prices in active markets for identical assets and liabilities;

Level 2 – based on quoted market prices for similar assets and liabilities, using observable market-based inputs or unobservable market-based inputs corroborated by market data; and

Level 3 – based on unobservable inputs using management’s best estimate and assumptions when inputs are unavailable.

The following table presents the fair value of the Company’s financial instruments measured at fair value on a recurring basis by level within the valuation hierarchy:



	March 31, 2018								December 31, 2017
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
(In thousands)
Financial assets:
Money market funds	$	322,785	$	—	$	—	$	322,785	$	417,563	$	—	$	—	$	417,563
Corporate securities	—		—		—		—		4,848		—		—		4,848
Warrants	—		100		—		100		—		29		—		29
Royalty rights - at fair value	—		—		341,691		341,691		—		—		349,223		349,223
Total	$	322,785	$	100	$	341,691	$	664,576	$	422,411	$	29	$	349,223	$	771,663

Financial liabilities:
Contingent consideration	—		—		41,400		41,400		—		—		42,000		42,000
Total	$	—	$	—	$	41,400	$	41,400	$	—	$	—	$	42,000	$	42,000

There have been no transfers between levels during the three months periods ended March 31, 2018 and December 31, 2017. The Company recognizes transfers between levels on the date of the event or change in circumstances that caused the transfer.

Corporate Securities

Corporate securities consisted primarily of U.S. corporate equity holdings. The fair value of corporate securities is estimated using market quoted prices.

Warrants

Warrants consist primarily of purchased call options to buy U.S. corporate equity holdings and derivative assets acquired as part of note receivable investments. The fair value of the warrants is estimated using recently quoted market prices or estimated fair value of the underlying equity security and the Black-Scholes option pricing model.

Royalty Rights - At Fair Value

Depomed Royalty Agreement

On October 18, 2013, the Company entered into the Royalty Purchase and Sale Agreement (the “Depomed Royalty Agreement”) with Depomed, Inc. and Depo DR Sub, LLC (together, “Depomed”), whereby the Company acquired the rights to receive royalties and milestones payable on sales of Type 2 diabetes products licensed by Depomed in exchange for a $240.5 million cash payment. Total consideration was $241.3 million, which was comprised of the $240.5 million cash payment to Depomed and $0.8 million in transaction costs.

The rights acquired include Depomed’s royalty and milestone payments accruing from and after October 1, 2013: (a) from Santarus, Inc. (“Santarus”) (which was subsequently acquired by Salix Pharmaceuticals, Inc. (“Salix”), which itself was acquired by Valeant Pharmaceuticals International, Inc. (“Valeant”)) with respect to sales of Glumetza (metformin HCL extended-release tablets) in the United States; (b) from Merck & Co., Inc. with respect to sales of Janumet^® XR (sitagliptin and metformin HCL extended-release tablets); (c) from Janssen Pharmaceutica N.V. with respect to potential future development milestones and sales of its recently approved fixed-dose combination of Invokana^® (canagliflozin) and extended-release metformin tablets, marketed as Invokamet XR^®; (d) from Boehringer Ingelheim with respect to potential future development milestones and sales of the investigational fixed-dose combinations of drugs and extended-release metformin subject to Depomed’s license agreement with Boehringer Ingelheim, including its recently approved products, Jentadueto XR^® and Syngardy XR^®; and (e) from LG Life Sciences and Valeant for sales of extended-release metformin tablets in Korea and Canada, respectively.

Under the terms of the Depomed Royalty Agreement, the Company receives all royalty and milestone payments due under license agreements between Depomed and its licensees until the Company has received payments equal to two times the cash payment it made to Depomed, after which all net payments received by Depomed will be shared evenly between the Company and Depomed.

The Depomed Royalty Agreement terminates on the third anniversary following the date upon which the later of the following occurs: (a) October 25, 2021, or (b) at such time as no royalty payments remain payable under any license agreement and each of the license agreements has expired by its terms.

As of March 31, 2018 and December 31, 2017, the Company determined that its royalty purchase interest in Depo DR Sub, LLC represented a variable interest in a variable interest entity. However, the Company does not have the power to direct the activities of Depo DR Sub, LLC that most significantly impact Depo DR Sub, LLC’s economic performance and is not the primary beneficiary of Depo DR Sub, LLC; therefore, Depo DR Sub, LLC is not subject to consolidation by the Company.

The financial asset acquired represents a single unit of accounting. The fair value of the financial asset acquired was determined by using a discounted cash flow analysis related to the expected future cash flows to be generated by each licensed product. This financial asset is classified as a Level 3 asset within the fair value hierarchy, as the Company’s valuation utilized significant unobservable inputs, including estimates as to the probability and timing of future commercialization for products not yet approved by regulatory agencies outside of the United States. The discounted cash flows are based upon expected royalties from sales of licensed products over a nine-year period. The discount rates utilized range from 10% to 24%. Significant judgment is required in selecting appropriate discount rates. At March 31, 2018, an evaluation was performed to assess those rates and general market conditions potentially affecting the fair market value, of the financial asset. Should these discount rates increase or decrease by 2.5%, the fair value of the asset could decrease by $13.4 million or increase by $15.5 million, respectively. A third-party expert was engaged to assist management develop its original estimate of the expected future cash flows. The estimated fair value of the asset is subject to variation should those cash flows vary significantly from those estimates. The Company periodically assesses the expected future cash flows and to the extent such payments are greater or less than its initial estimates, or the timing of such payments is materially different than the original estimates, the Company will adjust the estimated fair value of the asset. Should the expected royalties increase or decrease by 2.5%, the fair value of the asset could increase or decrease by $5.6 million, respectively.

When the Company acquired the Depomed royalty rights, Glumetza was marketed by Santarus. In January 2014, Salix acquired Santarus and assumed responsibility for commercializing Glumetza, which was generally perceived to be a positive development because of Salix’s larger sales force and track record in the successful commercialization of therapies. In late 2014, Salix made a number of disclosures relating to an excess of supply at the distribution level of Glumetza and other drugs that it commercialized and the practices leading to this excess of supply which were under review by Salix’s audit committee in relation to the related accounting practices. Because of these disclosures and the Company’s lack of direct access to information as to the levels of inventory of Glumetza in the distribution channels, the Company commenced a review of all public statements by Salix, publicly available historical third-party prescription data, analyst reports and other relevant data sources. The Company also engaged a third-party expert to specifically assess estimated inventory levels of Glumetza in the distribution channel and to ascertain the potential effects those inventory levels may have on expected future cash flows. Salix was acquired by Valeant in early April 2015. In mid-2015, Valeant implemented two price increases on Glumetza. At year-end 2015, a third-party expert was engaged by the Company to assess the impact of the Glumetza price adjustments and near-term market entrance of generic equivalents to the expected future cash flows. Based on the analysis performed, management revised the underlying assumptions used in the discounted cash flow analysis at year-end 2015. In February and August 2016, a total of three generic equivalents to Glumetza were approved to enter the market. In February 2016, Lupin Pharmaceuticals, Inc. and in August 2017, Teva Pharmaceutical Industries, Ltd., each launched a generic equivalent approved product. To date, the third generic equivalent to Glumetza has not launched.

In May 2017, the Company received notification that a subsidiary of Valeant had launched an authorized generic equivalent product in February 2017, and the Company received royalties on such authorized generic equivalent product under the same terms as the branded Glumetza product, retroactive to February 2017.

At December 31, 2017, management re-evaluated, with assistance of a third-party expert, the market share data, the gross-to-net revenue adjustment assumptions and Glumetza demand data, including the delay in launch of additional generic equivalent products and the entry of an authorized generic product by Valeant. These data and assumptions are based on available but limited information. At March 31, 2018, management updated the expected future cash flows based on the current period demand and supply data of Glumetza and the authorized generic equivalent product launched by Valeant.

As of March 31, 2018, the Company’s discounted cash flow analysis reflects its expectations as to the amount and timing of future cash flows up to the valuation date, including future cash flows for the authorized generic equivalent product. The Company continues to monitor whether the generic competition further affects sales of Glumetza and thus royalties on such sales paid to the Company, and the impact of the launched authorized generic equivalent. Due to the uncertainty around Valeant’s marketing and pricing strategy, as well as the recent generic competition and limited historical demand data after generic market entrance, the Company may need to further evaluate future cash flows in the event of more rapid reduction or increase in market share of Glumetza and its authorized generic equivalent product and/or a further erosion in net pricing.

In February 2016, at the Company’s request and pursuant to the Depomed Royalty Agreement, Depomed exercised its audit right with respect to Glumetza royalties. The independent auditor engaged to perform the royalty audit completed it in July 2017, and based upon the results of the audit, Depomed, on behalf of the Company, filed a lawsuit on September 7, 2017, against Valeant and one of its subsidiaries, claiming damages for unpaid royalties, fees and interest. Valeant, Depomed and the Company entered into a settlement agreement on October 27, 2017 whereby the parties agreed to dismiss the litigation, with prejudice, and Valeant agreed to pay to Depomed $13.0 million. The full amount of the settlement payment was transferred to the Company under the terms of the Depomed Royalty Agreement in November 2017.

On May 31, 2016, the Company obtained a notification indicating that the U.S. Food and Drug Administration (“FDA”) approved Jentadueto XR for use in patients with Type 2 diabetes. In June 2016, the Company received a $6.0 million FDA approval milestone pursuant to the terms of the Depomed Royalty Agreement. The product approval was earlier than initially expected. Based on the FDA approval and anticipated timing of the product launch, the Company adjusted the timing of future cash flows and discount rate used in the discounted cash flow model at June 30, 2016. As of December 31, 2017, management re-evaluated, the cash flow assumptions for Jentadueto XR and revised the discounted cash flow model. As of March 31, 2018, the Company’s discounted cash flow analysis reflects its expectations as to the amount and timing of future cash flows up to the valuation date.

On September 21, 2016, the Company obtained a notification indicating that the FDA approved Invokamet XR for use in patients with Type 2 diabetes. The product approval triggered a $5.0 million approval milestone payment to the Company pursuant to the terms of the Depomed Royalty Agreement. Based on the FDA approval and timing of the product launch, the Company adjusted the timing of future cash flows and discount rate used in the discounted cash flow model.

On December 13, 2016, the Company obtained a notification indicating that the FDA approved Synjardy XR for use in patients with Type 2 diabetes. The product approval triggered a $6.0 million approval milestone payment to the Company pursuant to the terms of the Depomed Royalty Agreement. Based on the FDA approval and the April 2017 launch of Synjardy XR by Boehringer Ingelheim, the Company adjusted the timing of future cash flows and discount rate used in the discounted cash flow model.

As of March 31, 2018, the fair value of the asset acquired as reported in the Company’s Condensed Consolidated Balance Sheet was $222.6 million and the maximum loss exposure was $222.6 million.

Viscogliosi Brothers Royalty Agreement

On June 26, 2014, the Company entered into a Royalty Purchase and Sale Agreement (the “VB Royalty Agreement”) with Viscogliosi Brothers, LLC (“VB”), whereby VB conveyed to the Company the right to receive royalties payable on sales of a spinal implant that has received pre-market approval from the FDA held by VB and commercialized by Paradigm Spine, LLC (“Paradigm Spine”), in exchange for a $15.5 million cash payment, less fees.

The royalty rights acquired includes royalties accruing from and after April 1, 2014. Under the terms of the VB Royalty Agreement, the Company receives all royalty payments due to VB pursuant to certain technology transfer agreements between VB and Paradigm Spine until the Company has received payments equal to 2.3 times the cash payment made to VB, after which all rights to receive royalties will be returned to VB. VB may repurchase the royalty right at any time on or before June 26, 2018, for a specified amount.

The fair value of the royalty right at March 31, 2018, was determined by using a discounted cash flow analysis related to the expected future cash flows to be received. This asset is classified as a Level 3 asset, as the Company’s valuation utilized significant unobservable inputs, including estimates as to the probability and timing of future sales of the licensed product. The discounted cash flow was based upon expected royalties from sales of licensed product over a ten-year period. The discount rate utilized was 15.0%. Significant judgment is required in selecting the appropriate discount rate. Should this discount rate increase or decrease by 2.5%, the fair value of this asset could decrease by $1.4 million or increase by $1.6 million, respectively. Should the expected royalties increase or decrease by 2.5%, the fair value of the asset could increase or decrease by $0.4 million, respectively. A third-party expert was engaged to assist management with the development of its estimate of the expected future cash flows, when deemed necessary. The fair value of the asset is subject to variation should those cash flows vary significantly from the Company’s estimates. At each reporting period, an evaluation is performed to assess those estimates, discount rates utilized and general market conditions affecting fair market value.

As of March 31, 2018, the fair value of the asset acquired as reported in the Company’s Condensed Consolidated Balance Sheet was $14.5 million and the maximum loss exposure was $14.5 million.

University of Michigan Royalty Agreement

On November 6, 2014, the Company acquired a portion of all royalty payments of the Regents of the University of Michigan’s (“U-M”) worldwide royalty interest in Cerdelga (eliglustat) for $65.6 million pursuant to the Royalty Purchase and Sale Agreement with U-M (the “U-M Royalty Agreement”). Under the terms of the U-M Royalty Agreement, the Company receives 75% of all royalty payments due under U-M’s license agreement with Genzyme Corporation, a Sanofi company (“Genzyme”) until expiration of the licensed patents, excluding any patent term extension. Cerdelga, an oral therapy for adult patients with Gaucher disease type 1, was developed by Genzyme. Cerdelga was approved in the United States in August 2014, in the European Union in January 2015, and in Japan in March 2015. In addition, marketing applications for Cerdelga are under review by other regulatory authorities. While marketing applications have been approved in the United States, the European Union and Japan, national pricing and reimbursement decisions are delayed in some countries. At December 31, 2017, a third-party expert was engaged by the Company to assess the impact of the delayed pricing and reimbursement decisions to Cerdelga’s expected future cash flows. Based on the analysis performed, management revised the underlying assumptions used in the discounted cash flow analysis at December 31, 2017. As of March 31, 2018, the Company’s discounted cash flow analysis reflects its expectations as to the amount and timing of future cash flows up to the valuation date.

The fair value of the royalty right at March 31, 2018 was determined by using a discounted cash flow analysis related to the expected future cash flows to be received. This asset is classified as a Level 3 asset, as the Company’s valuation utilized significant unobservable inputs, including estimates as to the probability and timing of future sales of the licensed product. The discounted cash flow was based upon expected royalties from sales of licensed product over a four-year period. The discount rate utilized was approximately 12.8%. Significant judgment is required in selecting the appropriate discount rate. Should this discount rate increase or decrease by 2.5%, the fair value of this asset could decrease by $1.3 million or increase by $1.8 million, respectively. Should the expected royalties increase or decrease by 2.5%, the fair value of the asset could increase by $0.9 million or decrease by $0.5 million, respectively. A third-party expert is engaged to assist management with the development of its estimate of the expected future cash flows, when deemed necessary. The fair value of the asset is subject to variation should those cash flows vary significantly from the Company’s estimates. An evaluation of those estimates, discount rates utilized and general market conditions affecting fair market value is performed in each reporting period.

As of March 31, 2018, the fair value of the asset acquired as reported in the Company’s Condensed Consolidated Balance Sheet was $26.6 million and the maximum loss exposure was $26.6 million.

ARIAD Royalty Agreement

On July 28, 2015, the Company entered into the revenue interest assignment agreement (the “ARIAD Royalty Agreement”) with ARIAD Pharmaceuticals, Inc. (“ARIAD”), whereby the Company acquired the rights to receive royalties from ARIAD’s net revenues generated by the sale, distribution or other use of Iclusig^® (ponatinib), a cancer medicine for the treatment of adult patients with chronic myeloid leukemia, in exchange for up to $200.0 million in cash payments. The purchase price of $100.0 million was payable in two tranches of $50.0 million each, with the first tranche having been funded on July 28, 2015 and the second tranche having been funded on July 28, 2016. Upon the occurrence of certain events, including a change of control of ARIAD, the Company had the right to require ARIAD to repurchase the royalty rights for a specified amount. The Company elected the fair value option to account for the hybrid instrument in its entirety. Any embedded derivative shall not be separated from the host contract. The asset acquired pursuant to the ARIAD Royalty Agreement represents a single unit of accounting.

On February 16, 2017, Takeda Pharmaceutical Company Limited (“Takeda”) acquired ARIAD and the Company exercised its put option on the same day, which resulted in an obligation by Takeda to pay the Company a 1.2x multiple of the $100.0 million funded by the Company under the ARIAD Royalty Agreement, less royalty payments already received by the Company.

On March 30, 2017, Takeda fulfilled its obligations under the put option and paid the Company the repurchase price of $108.2 million for the royalty rights under the ARIAD Royalty Agreement.

AcelRx Royalty Agreement

On September 18, 2015, the Company entered into a royalty interest assignment agreement (the “AcelRx Royalty Agreement”) with ARPI LLC, a wholly owned subsidiary of AcelRx Pharmaceuticals, Inc. (“AcelRx”), whereby the Company acquired the rights to receive a portion of the royalties and certain milestone payments on sales of Zalviso^® (sufentanil sublingual tablet system) in the European Union, Switzerland and Australia by AcelRx’s commercial partner, Grünenthal, in exchange for a $65.0 million cash payment. Under the terms of the AcelRx Royalty Agreement, the Company receives 75% of all royalty payments and 80% of the first four commercial milestone payments due under AcelRx’s license agreement with Grünenthal until the earlier to occur of (i) receipt by the Company of payments equal to three times the cash payments made to AcelRx and (ii) the expiration of the licensed patents (expected to be in January of 2032). Zalviso received marketing approval by the European Commission in September 2015. Grünenthal launched Zalviso in the second quarter of 2016 and the Company started to receive royalties in the third quarter of 2016.

As of March 31, 2018, and December 31, 2017, the Company determined that its royalty rights under the AcelRx Royalty Agreement represented a variable interest in a variable interest entity. However, the Company does not have the power to direct the activities of ARPI LLC that most significantly impact ARPI LLC’s economic performance and is not the primary beneficiary of ARPI LLC; therefore, ARPI LLC is not subject to consolidation by the Company.

The fair value of the royalty right at March 31, 2018 was determined by using a discounted cash flow analysis related to the expected future cash flows to be received. This asset is classified as a Level 3 asset, as the Company’s valuation utilized significant unobservable inputs, including estimates as to the probability and timing of future sales of the licensed product. The discounted cash flow was based upon expected royalties from sales of licensed product over a fourteen-year period. The discount rate utilized was approximately 13.4%. Significant judgment is required in selecting the appropriate discount rate. Should this discount rate increase or decrease by 2.5%, the fair value of this asset could decrease by $9.8 million or increase by $12.1 million, respectively. Should the expected royalties increase or decrease by 2.5%, the fair value of the asset could increase or decrease by $1.9 million, respectively. A third-party expert is engaged to assist management with the development of its estimate of the expected future cash flows, when deemed necessary. The fair value of the asset is subject to variation should those cash flows vary significantly from the Company’s estimates. At March 31, 2018, management performed an evaluation of those estimates, discount rates utilized and general market conditions affecting fair market value is performed in each reporting period. Based on the number of treated patients to date, management adjusted the timing of the expected future cash flows used in the discounted cash flow model at December 31, 2017. As of March 31, 2018, the Company’s discounted cash flow analysis reflects its expectations as to the amount and timing of future cash flows up to the valuation date.

As of March 31, 2018, the fair value of the asset acquired as reported in the Company’s Condensed Consolidated Balance Sheet was $75.1 million and the maximum loss exposure was $75.1 million.

Kybella Royalty Agreement

On July 8, 2016, the Company entered into a royalty purchase and sales agreement with an individual, whereby the Company acquired that individual’s rights to receive certain royalties on sales of KYBELLA^® by Allergen plc in exchange for a $9.5 million cash payment and up to $1.0 million in future milestone payments based upon product sales targets. The Company started to receive royalty payments during the third quarter of 2016.

The fair value of the royalty right at March 31, 2018, was determined by using a discounted cash flow analysis related to the expected future cash flows to be received. This asset is classified as a Level 3 asset, as the Company’s valuation utilized significant unobservable inputs, including estimates as to the probability and timing of future sales of the licensed product. The discounted cash flow was based upon expected royalties from sales of a licensed product over an eight-year period. The discount rate utilized was approximately 14.4%. Significant judgment is required in selecting the appropriate discount rate. Should this discount rate increase or decrease by 2.5%, the fair value of this asset could decrease by $0.3 million or increase by $0.3 million, respectively. Should the expected royalties increase or decrease by 2.5%, the fair value of the asset could increase or decrease by $0.1 million, respectively. A third-party expert is engaged to assist management with the development of its estimate of the expected future cash flows, when deemed necessary. The fair value of the asset is subject to variation should those cash flows vary significantly from the Company’s estimates. At each reporting period, an evaluation of those estimates, discount rates utilized and general market conditions affecting fair market value is performed in each reporting period. Management re-evaluated the cash flow projections during the current period, concluding that lower demand data resulted in a reduction of expected future cash flows, which warranted a revision of the assumptions used in the discounted cash flow model at March 31, 2018.

As of March 31, 2018, the fair value of the asset acquired as reported in the Company’s Condensed Consolidated Balance Sheet was $2.8 million and the maximum loss exposure was $2.8 million.

The following tables summarize the changes in Level 3 assets and the gains and losses included in earnings for the three months ended March 31, 2018:



Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - Royalty Rights Assets

(in thousands)			Royalty Rights - At Fair Value
Fair value as of December 31, 2017						$	349,223

	Total net change in fair value for the period
		Change in fair value of royalty rights - at fair value	$	11,091
		Proceeds from royalty rights - at fair value	$	(18,623	)
		Total net change in fair value for the period				(7,532		)

Fair value as of March 31, 2018						$	341,691



Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - Royalty Rights Assets

	Fair Value as of		Royalty Rights -			Fair Value as of
(in thousands)	December 31, 2017		Change in Fair Value			March 31, 2018
Depomed	$	232,038	$	(9,430	)	$	222,608
VB	14,380		137			14,517
U-M	26,769		(187		)	26,582
AcelRx	72,894		2,237			75,131
Avinger	396		(295		)	101
KYBELLA	2,746		6			2,752
	$	349,223	$	(7,532	)	$	341,691



Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - Liabilities

(in thousands)		Contingent Consideration
Fair value as of December 31, 2017		$	(42,000	)

	Total net change in fair value for the period	600

Fair value as of March 31, 2018		$	(41,400	)

The fair value of the contingent consideration was determined using an income approach derived from the Noden Products (as defined in Note 19 below) revenue estimates and a probability assessment with respect to the likelihood of achieving (a) the level of net sales or (b) generic product launch that would trigger the milestone payments. The key assumptions in determining the fair value are the discount rate and the probability assigned to the potential milestones being achieved. The fair value of the contingent consideration is remeasured each reporting period, with changes in fair value recorded in the Condensed Consolidated Statements of Income. The change in fair value of the contingent consideration during the period ending March 31, 2018 is due primarily to the passage of time, as there have been no significant changes in the key assumptions used in the fair value calculation during the current period.

Gains and losses from changes in Level 3 assets included in earnings for each period are presented in “Royalty rights - change in fair value” and gains and losses from changes in Level 3 liabilities included in earnings for each period are presented in “Change in fair value of anniversary payment and contingent consideration” as follows:



	Three Months Ended
	March 31,
(in thousands)	2018		2017

Total change in fair value for the period included in earnings for royalty right assets held at the end of the reporting period	$	11,091	$	13,146

Total change in fair value for the period included in earnings for liabilities held at the end of the reporting period	$	600	$	(1,442	)

The following tables present the fair value of assets and liabilities not subject to fair value recognition by level within the valuation hierarchy:



	March 31, 2018						December 31, 2017
	Carrying Value		Fair Value Level 2		Fair Value Level 3		Carrying Value		Fair Value Level 2		Fair Value Level 3
(In thousands)
Assets:
Wellstat Diagnostics note receivable	$	50,191	$	—	$	52,412	$	50,191	$	—	$	51,308
Hyperion note receivable	1,200		—		1,200		1,200		—		1,200
CareView note receivable	19,420		—		19,100		19,346		—		18,750
Total	$	70,811	$	—	$	72,712	$	70,737	$	—	$	71,258

Liabilities:
February 2018 Notes	$	—	$	—	$	—	$	126,066	$	126,131	$	—
December 2021 Notes	119,166		146,438		—		117,415		148,028		—
Total	$	119,166	$	146,438	$	—	$	243,481	$	274,159	$	—

As of March 31, 2018 and December 31, 2017, the estimated fair values of the Hyperion Catalysis International, Inc. note receivable, and CareView Communications, Inc. note receivable were determined using one or more discounted cash flow models, incorporating expected payments and the interest rate extended on the notes receivable, with fixed interest rates and incorporating expected payments for notes receivable with a variable rate of return.

When deemed necessary the Company engages a third-party valuation expert to assist in evaluating its investments and the related inputs needed to estimate the fair value of certain investments. The Company determined its notes receivable assets are Level 3 assets as the Company’s valuations utilized significant unobservable inputs, including estimates of future revenues, discount rates, expectations about settlement, terminal values and required yield. To provide support for the estimated fair value measurements, the Company considered forward-looking performance related to the investment and current measures associated with high yield indices, and reviewed the terms and yields of notes placed by specialty finance and venture firms both across industries and in similar sectors.

The CareView note receivable is secured by substantially all assets of, and equity interests in CareView Communications, Inc. The Wellstat Diagnostics note receivable is secured by substantially all assets of Wellstat Diagnostics and is supported by a guaranty from the Wellstat Diagnostics Guarantors. The estimated fair value of the collateral assets was determined by using an asset approach and discounted cash flow model related to the underlying collateral and was adjusted to consider estimated costs to sell the assets.

On March 31, 2018, the carrying values of several of the Company’s notes receivable differed from their estimated fair value. This is the result of discount rates used when performing a discounted cash flow for fair value valuation purposes.

The fair values of the Company’s convertible notes were determined using quoted market pricing or dealer quotes.

The following table represents significant unobservable inputs used in determining the estimated fair value of impaired notes receivable investments:



Asset	Valuation Technique	Unobservable Input	March 31, 2018	December 31, 2017

Wellstat Diagnostics
Wellstat Guarantors Intellectual Property	Income Approach
		Discount rate	12%	12%
		Royalty amount	$21 million	$21 million
Settlement Amount	Income Approach
		Discount rate	15%	15%
		Settlement amount	$33 million	$32 million

Real Estate Property	Market Approach
		Annual appreciation rate	4%	4%
		Estimated realtor fee	6%	6%
		Estimated disposal date	6/30/2019	6/30/2019

CareView
Note receivable cash flows	Income Approach
		Discount rate	17.5%	17.5%

At March 31, 2018, the Company had three notes receivable investments on non-accrual status with a cumulative investment cost and fair value of approximately $70.8 million and $72.7 million, respectively, compared to three note receivable investments on non-accrual status at December 31, 2017 with a cumulative investment cost and fair value of approximately $70.7 million and $71.3 million, respectively. For the three months ended March 31, 2018, the Company recognized $0.7 million of interest revenue for the CareView note receivable investment as a result of cash interest payments made during the period; for the three months ended March 31, 2017, the Company did not recognize any interest for note receivable investments on non-accrual status. During the three months ended March 31, 2018 and 2017, the Company did not recognized losses on extinguishment of notes receivable

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Cash Equivalents and Investments

3 Months Ended

Mar. 31, 2018

Cash and Cash Equivalents [Abstract]

Cash Equivalents and Investments

5. Cash, Cash Equivalents and Short-term Investments

As of March 31, 2018, and December 31, 2017, the Company had invested its excess cash balances primarily in cash, money market funds and a corporate equity security. The Company’s securities are classified as available-for-sale and are carried at estimated fair value, with unrealized gains and losses reported in “Accumulated other comprehensive income” in stockholders’ equity, net of estimated taxes. See Note 4 for fair value measurement information. The cost of securities sold is based on the specific identification method. To date, the Company has not experienced credit losses on investments in these instruments, and it does not require collateral for its investment activities.

The following tables summarize the Company’s cash and available-for-sale securities’ amortized cost, gross unrealized gains and fair value by significant investment category reported as cash and cash equivalents, or short-term investments as of March 31, 2018, and December 31, 2017:



							Reported as:
	Amortized Cost		Unrealized Gains		Estimated Fair Value		Cash and Cash Equivalents		Short-Term Investments
(In thousands)
March 31, 2018
Cash	$	82,293	$	—	$	82,293	$	82,293	$	—
Money market funds	322,785		—		322,785		322,785		—
Total	$	405,078	$	—	$	405,078	$	405,078	$	—

December 31, 2017
Cash	$	109,703	$	—	$	109,703	$	109,703	$	—
Money market funds	417,563		—		417,563		417,563		—
Corporate securities	3,353		1,495		4,848		—		4,848
Total	$	530,619	$	1,495	$	532,114	$	527,266	$	4,848

The Company recognized $0.8 million and zero of gains on sales of available-for-sale securities in the three months ended March 31, 2018 and March 31, 2017, respectively.

The unrealized gains on investments included in “Other comprehensive income (loss), net of tax” was zero and $1.2 million as of March 31, 2018, and December 31, 2017, respectively.

Notes Receivable and Other Long-term Receivables	3 Months Ended
Notes Receivable and Other Long-term Receivables	Mar. 31, 2018
Receivables [Abstract]
Notes and Other Long-term Receivables	. Notes and Other Long-Term Receivables Notes and other long-term receivables included the following significant agreements: Wellstat Diagnostics Note Receivable and Credit Agreement and Related Litigation On November 2, 2012, the Company and Wellstat Diagnostics entered into a $40.0 million credit agreement pursuant to which the Company was to accrue quarterly interest payments at the rate of 5% per annum (payable in cash or in kind). In addition, the Company was to receive quarterly royalty payments based on a low double-digit royalty rate of Wellstat Diagnostics’ net revenues, generated by the sale, distribution or other use of Wellstat Diagnostics’ products, if any, commencing upon the commercialization of its products. A portion of the proceeds of the $40.0 million credit agreement were used to repay certain notes receivable which Wellstat Diagnostics entered into in March 2012. In January 2013, the Company was informed that, as of December 31, 2012, Wellstat Diagnostics had used funds contrary to the terms of the credit agreement and breached Sections 2.1.2 and 7 of the credit agreement. The Company sent Wellstat Diagnostics a notice of default on January 22, 2013, and accelerated the amounts owed under the credit agreement. In connection with the notice of default, the Company exercised one of its available remedies and transferred approximately $8.1 million of available cash from a bank account of Wellstat Diagnostics to the Company and applied the funds to amounts due under the credit agreement. On February 28, 2013, the parties entered into a forbearance agreement whereby the Company agreed to refrain from exercising additional remedies for 120 days. During such forbearance period, the Company provided approximately $1.3 million to Wellstat Diagnostics to fund ongoing operations of the business. During the year ended December 31, 2013, approximately $8.7 million was advanced pursuant to the forbearance agreement. On August 15, 2013, the Company entered into an amended and restated credit agreement with Wellstat Diagnostics. The Company determined that the new agreement should be accounted for as a modification of the existing agreement. Except as otherwise described herein, the material terms of the amended and restated credit agreement are substantially the same as those of the original credit agreement, including quarterly interest payments at the rate of 5% per annum (payable in cash or in kind). In addition, the Company was to continue to receive quarterly royalty payments based on a low double-digit royalty rate of Wellstat Diagnostics’ net revenues. However, pursuant to the amended and restated credit agreement: (i) the principal amount was reset to approximately $44.1 million, which was comprised of approximately $33.7 million original loan principal and interest, $1.3 million term loan principal and interest and $9.1 million forbearance principal and interest; (ii) the specified internal rates of return increased; (iii) the default interest rate was increased; (iv) Wellstat Diagnostics’ obligation to provide certain financial information increased in frequency to monthly; (v) internal financial controls were strengthened by requiring Wellstat Diagnostics to maintain an independent, third-party financial professional with control over fund disbursements; (vi) the Company waived the existing events of default; and (vii) the owners and affiliates of Wellstat Diagnostics were required to contribute additional capital to Wellstat Diagnostics upon the sale of an affiliate entity. The amended and restated credit agreement had an ultimate maturity date of December 31, 2021 (but has subsequently been accelerated as described below). In June 2014, the Company received information from Wellstat Diagnostics showing that it was generally unable to pay its debts as they became due, constituting an event of default under the amended and restated credit agreement. On August 5, 2014, the Company delivered a notice of default (the “Wellstat Diagnostics Borrower Notice”) to Wellstat Diagnostics, which accelerated all obligations under the amended and restated credit agreement and demanded immediate payment in full in an amount equal to approximately $53.9 million, (which amount, in accordance with the terms of the amended and restated credit agreement, included an amount that, together with interest and royalty payments already made to the Company, would generate a specified internal rate of return to the Company), plus accruing fees, costs and interest, and demanded that Wellstat Diagnostics protect and preserve all collateral securing its obligations. On August 7, 2014, the Company delivered a notice (the “Wellstat Diagnostics Guarantor Notice”) to each of the guarantors of Wellstat Diagnostics’ obligations to the Company (collectively, the “Wellstat Diagnostics Guarantors”) under the credit agreement, which included a demand that the guarantors remit payment to the Company in the amount of the outstanding obligations. The guarantors include certain affiliates and related companies of Wellstat Diagnostics, including Wellstat Therapeutics and Wellstat Diagnostics’ stockholders. On September 24, 2014, the Company filed an ex-parte petition for appointment of receiver with the Circuit Court of Montgomery County, Maryland (the “Wellstat Diagnostics Petition”), which was granted on the same day. Wellstat Diagnostics remained in operation during the period of the receivership with incremental additional funding from the Company. On May 24, 2017, Wellstat Diagnostics transferred substantially all of its assets to the Company pursuant to a credit bid. The credit bid reduced the outstanding balance of the loan by an immaterial amount. On September 4, 2015, the Company filed in the Supreme Court of New York a motion for summary judgment in lieu of complaint which requested that the court enter judgment against certain of the Wellstat Diagnostics Guarantors for the total amount due on the Wellstat Diagnostics debt, plus all costs and expenses including lawyers’ fees incurred by the Company in enforcement of the related guarantees. On September 23, 2015, the Company filed in the same court an ex parte application for a temporary restraining order and order of attachment of the Wellstat Diagnostics Guarantor defendants’ assets. Although the court denied the Company’s request for a temporary restraining order at a hearing on September 24, 2015, it ordered that assets of the Wellstat Diagnostics Guarantor defendants should be held in status quo ante and only used in the normal course of business. On July 29, 2016, the Supreme Court of New York granted the Company’s motion for summary judgment and held that the Wellstat Diagnostics Guarantor defendants are liable for all “Obligations” owed by Wellstat Diagnostics to the Company. After appeal by the Wellstat Diagnostics Guarantor defendants, on February 14, 2017, the Appellate Division of the Supreme Court of New York reversed on procedural grounds a portion of the Memorandum of Decision granting the Company summary judgment in lieu of complaint, but affirmed the portion of the Memorandum of Decision denying the Wellstat Diagnostics Guarantor defendants’ motion for summary judgment in which they sought a determination that the guarantees had been released. As a result, the litigation has been remanded to the Supreme Court of New York to proceed on the Company’s claims as a plenary action. On June 21, 2017, the Supreme Court of New York ordered the Company to file a Complaint, which was filed by the Company on July 20, 2017. The Wellstat Diagnostics Guarantors filed their answer on August 9, 2017, including counterclaims against the Company alleging breach of contract, breach of fiduciary duty, and tortious interference with prospective economic advantage. This case is currently pending and in the pre-trial phase. On October 14, 2016, the Company sent a notice of default and reference to foreclosure proceedings to certain of the Wellstat Diagnostics Guarantors which are not defendants in the New York action, but which are owners of real estate assets over which a deed of trust in favor of the Company securing the guarantee of the loan to Wellstat Diagnostics had been executed. On March 2, 2017, the Company sent a second notice to foreclose on the real estate assets, and noticed the sale for March 29, 2017. The sale was taken off the calendar by the trustee under the deed of trust and has not been re-scheduled yet. On March 6, 2017, the Company sent a letter to the Wellstat Diagnostics Guarantors seeking information in preparation for a UCC Article 9 sale of some or all of the intellectual property-related collateral of the Wellstat Diagnostics Guarantors. The Wellstat Diagnostics Guarantors did not respond to the Company’s letter, but on March 17, 2017, filed an order to show cause with the Supreme Court of New York to enjoin the Company’s sale of the real estate or enforcing its security interests in the Wellstat Diagnostics Guarantors’ intellectual property during the pendency of any action involving the guarantees at issue. In October 2017, the Company filed a motion with the Supreme Court of New York requesting an attachment of a potential $55.8 million damages award, plus interest, entered against BTG International, Inc. in favor of Wellstat Therapeutics in Delaware Chancery Court on September 19, 2017. On February 6, 2018, the Supreme Court of New York issued an order from the bench which enjoins the Wellstat Diagnostics Guarantors from selling, encumbering, removing, transferring or altering the collateral pending the outcome of the proceedings before it. The Supreme Court of New York also issued an order precluding the Company from foreclosing on certain of the Wellstat Diagnostics Guarantors’ collateral pending the outcome of the proceedings before it. On October 22, 2015, certain of the Wellstat Diagnostics Guarantors filed a separate complaint against the Company in the Supreme Court of New York seeking a declaratory judgment that certain contractual arrangements entered into between the parties subsequent to Wellstat Diagnostics’ default, and which relate to a split of proceeds in the event that the Wellstat Diagnostics Guarantors voluntarily monetize any assets that are the Company’s collateral, is of no force or effect. This case is currently pending and the Supreme Court has instructed the Parties to coordinate this case with the pending case filed by the Company against the Wellstat Diagnostics Guarantors’ discussed above with respect to pre-trial activities. Effective April 1, 2014, and as a result of the event of default, the Company determined the loan to be impaired and it ceased to accrue interest revenue. At that time and as of March 31, 2018, it has been determined that an allowance on the carrying value of the note was not necessary, as the Company believes the value of the collateral securing Wellstat Diagnostics’ obligations exceeds the carrying value of the asset and is sufficient to enable the Company to recover the current carrying value of $50.2 million. The Company continues to closely monitor the timing and expected recovery of amounts due, including litigation and other matters related to Wellstat Diagnostics Guarantors’ assets. There can be no assurance that an allowance on the carrying value of the notes receivable investment will not be necessary in a future period depending on future developments. Hyperion Agreement On January 27, 2012, the Company and Hyperion Catalysis International, Inc. (“Hyperion”) (which is also a Wellstat Diagnostics Guarantor) entered into an agreement whereby Hyperion sold to the Company the royalty streams due from Showa Denko K.K. (“SDK”) related to a certain patent license agreement between Hyperion and SDK dated December 31, 2008. The agreement assigned the patent license agreement royalty stream accruing from January 1, 2012 through December 31, 2013, to the Company in exchange for the lump sum payment to Hyperion of $2.3 million. In exchange for the lump sum payment, the Company was to receive two equal payments of $1.2 million on each of March 5, 2013 and 2014. The first payment of $1.2 million was paid on March 5, 2013, but Hyperion has not made the second payment that was due on March 5, 2014. Effective as of such date and as a result of the event of default, the Company ceased to accrue interest revenue. As of March 31, 2018, the estimated fair value of the collateral was determined to be in excess of the carrying value. There can be no assurance that this will be true in the event of the Company’s foreclosure on the collateral, nor can there be any assurance of realizing value from such collateral. Avinger Credit and Royalty Agreement Under the terms of the Avinger Credit and Royalty Agreement, the Company receives a low, single-digit royalty on Avinger’s net revenues until April 2018. Commencing in October 2015, after Avinger repaid $21.4 million pursuant to its note receivable prior to its maturity date, the royalty on Avinger’s net revenues reduced by 50%, subject to certain minimum payments from the prepayment date until April 2018. The Company has accounted for the royalty rights in accordance with the fair value option. LENSAR Credit Agreement On October 1, 2013, the Company entered into a credit agreement with LENSAR, Inc. (“LENSAR”), pursuant to which the Company made available to LENSAR up to $60.0 million to be used by LENSAR in connection with the commercialization of its currently marketed LENSAR™ Laser System. Of the $60.0 million available to LENSAR, an initial $40.0 million, net of fees, was funded by the Company at the close of the transaction. The remaining $20.0 million was never funded. Outstanding borrowings under the loans bore interest at the rate of 15.5% per annum, payable quarterly in arrears. On May 12, 2015, the Company entered into a forbearance agreement with LENSAR, pursuant to which the Company agreed to refrain from exercising certain remedies available to it resulting from the failure of LENSAR to comply with a liquidity covenant and make interest payments due under the credit agreement. Under the forbearance agreement, the Company agreed to provide LENSAR with up to an aggregate of $8.5 million in weekly increments through the period ended September 30, 2015 plus employee retention amounts of approximately $0.5 million in the form of additional loans, subject to LENSAR meeting certain milestones related to LENSAR obtaining additional capital to fund the business or sell the business and repay outstanding amounts under the credit agreement. In exchange for the forbearance, LENSAR agreed to additional reporting covenants, the engagement of a chief restructuring officer and an increase on the interest rate to 18.5%, applicable to all outstanding amounts under the credit agreement. On September 30, 2015, the Company agreed to extend the forbearance agreement until October 9, 2015 and provide for up to an additional $0.8 million in funding while LENSAR negotiated a potential sale of its assets. On October 9, 2015, the forbearance agreement expired, but the Company agreed to fund LENSAR’s operations while LENSAR continued to negotiate a potential sale of its assets. On November 15, 2015, LENSAR, LLC (“LENSAR/Alphaeon”), a wholly owned subsidiary of Alphaeon Corporation (“Alphaeon”), and LENSAR entered into the Asset Purchase Agreement whereby LENSAR/Alphaeon agreed to acquire certain assets of LENSAR and assumed certain liabilities of LENSAR. The acquisition was consummated on December 15, 2015. In connection with the closing of the acquisition, LENSAR/Alphaeon entered into an amended and restated credit agreement with the Company, assuming $42.0 million in loans as part of the borrowings under the Company’s prior credit agreement with LENSAR. In addition, Alphaeon issued 1.7 million shares of its Class A common stock to the Company. The Company has estimated a fair value of $3.84 per share for the 1.7 million shares of Alphaeon Class A common stock received in connection with the transactions and recognized this investment as a cost-method investment of $6.6 million included in other long-term assets. The Alphaeon Class A common stock is subject to other-than-temporary impairment assessments in future periods. There is no other-than-temporary impairment charge incurred as of March 31, 2018. In December 2016, LENSAR, re-acquired the assets from LENSAR/Alphaeon and the Company entered into a second amended and restated credit agreement with LENSAR whereby LENSAR assumed all obligations under the amended and restated credit agreement with LENSAR/Alphaeon. Also in December, LENSAR filed for a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code (“Chapter 11 case”) with the support of the Company. In January 2017, the Company agreed to provide debtor-in-possession financing of up to $2.8 million in new advances to LENSAR so that it could continue to operate its business during the Chapter 11 case. LENSAR filed a Chapter 11 plan of reorganization with the Company’s support under which LENSAR would issue 100% of its equity interests to the Company in exchange for the cancellation of the Company’s claims as a secured creditor in the Chapter 11 case, other than with respect to the debtor-in-possession financing, and would thereby become an operating wholly-owned subsidiary of the Company. On April 26, 2017, the bankruptcy court approved the plan of reorganization. Pursuant to the plan of reorganization, LENSAR emerged from bankruptcy on May 11, 2017 as a wholly-owned subsidiary of the Company, and the Company started to consolidate LENSAR’s financial statements under the voting interest model beginning May 11, 2017. For additional information on LENSAR please refer to Note 10 under “Intangible Assets,” Note 19 under “Business Combinations” and Note 20 under “Segment Information.” Direct Flow Medical Credit Agreement On November 5, 2013, the Company entered into a credit agreement with Direct Flow Medical, Inc. (“Direct Flow Medical”) under which the Company agreed to provide up to $50.0 million to Direct Flow Medical. Of the $50.0 million available to Direct Flow Medical, an initial $35.0 million (tranche one), net of fees, was funded by the Company at the close of the transaction. On November 10, 2014, the Company and Direct Flow Medical agreed to an amendment to the credit agreement to permit Direct Flow Medical to borrow the $15.0 million second tranche upon receipt by Direct Flow Medical of a specified minimum amount of proceeds from an equity offering prior to December 31, 2014. In exchange, the parties amended the credit agreement to provide for additional fees associated with certain liquidity events, such as a change of control or the consummation of an initial public offering, and granted the Company certain board of director observation rights. On November 19, 2014, upon Direct Flow Medical satisfying the amended tranche two milestone, the Company funded the $15.0 million second tranche to Direct Flow Medical, net of fees. Outstanding borrowings under tranche one bore interest at the rate of 15.5% per annum, payable quarterly in arrears, until the occurrence of the second tranche. Upon occurrence of the borrowing of this second tranche, the interest rate applicable to all loans under the credit agreement was decreased to 13.5% per annum, payable quarterly in arrears. Under the terms of the credit agreement, Direct Flow Medical’s obligation to repay loan principal commenced on the twelfth interest payment date, September 30, 2016. The principal amount outstanding at commencement of repayment was required to be repaid in equal installments until final maturity of the loans. The loans were to mature on November 5, 2018. The obligations under the credit agreement were secured by a pledge of substantially all of the assets of Direct Flow Medical and any of its subsidiaries. On December 21, 2015, Direct Flow Medical and the Company entered into a waiver to the credit agreement in anticipation of Direct Flow Medical being unable to comply with the liquidity covenant and make interest payments due under the credit agreement, which was subsequently extended on January 14, 2016, and further delayed the timing of the interest payments through the period ending September 30, 2016 while Direct Flow Medical sought additional financing to operate its business. On January 28, 2016, the Company funded an additional $5.0 million to Direct Flow Medical in the form of a short-term secured promissory note. On February 26, 2016, the Company and Direct Flow Medical entered into the fourth amendment to the credit agreement that, among other things, (i) converted the $5.0 million short-term secured promissory note into a loan under the credit agreement with substantially the same interest and payment terms as the existing loans, (ii) added a conversion feature whereby the $5.0 million loan would convert into equity of Direct Flow Medical upon the occurrence of certain events and (iii) provided for a second $5.0 million convertible loan tranche commitment, to be funded at the option of the Company. The commitment for the second tranche was not funded and has since expired. In addition, (i) the Company agreed to waive the liquidity covenant and delay the timing of the unpaid interest payments until September 30, 2016 and (ii) Direct Flow Medical agreed to issue to the Company a specified amount of warrants to purchase shares of convertible preferred stock on the first day of each month for the duration of the waiver period at an exercise price of $0.01 per share. On July 15, 2016, the Company and Direct Flow Medical entered into the fifth amendment and limited waiver to the credit agreement. The Company funded an additional $1.5 million to Direct Flow Medical in the form of a note with substantially the same interest and payment terms as the existing loans and a conversion feature whereby the $1.5 million loan would convert into equity of Direct Flow Medical upon the occurrence of certain events. In addition, Direct Flow Medical agreed to issue to the Company warrants to purchase shares of convertible preferred stock at an exercise price of $0.01 per share. On September 12, 2016, the Company and Direct Flow Medical entered into the sixth amendment and limited waiver to the credit agreement under which the Company funded an additional $1.5 million to Direct Flow Medical in the form of a note with substantially the same interest and payment terms as the existing loans. In addition, Direct Flow Medical agreed to issue to the Company a specified amount of warrants to purchase shares of convertible preferred stock at an exercise price of $0.01 per share. On September 30, 2016, the Company and Direct Flow Medical entered into a waiver to the credit agreement where the parties agreed, among other things, to (i) delay payment on all overdue interest payments until October 31, 2016, (ii) waive the initial principal repayment until October 31, 2016 and (iii) continue to waive the liquidity requirements until October 31, 2016. Further, Direct Flow Medical agreed to issue to the Company a specified amount of warrants to purchase shares of convertible preferred stock at an exercise price of $0.01 per share. On October 31, 2016, the Company agreed to extend the waivers described above until November 30, 2016 and on November 14, 2016, the Company advanced an additional $1.0 million loan while Direct Flow Medical continued to seek additional financing. On November 16, 2016, Direct Flow Medical advised the Company that its potential financing source had modified its proposal from an equity investment to a loan with a substantially smaller amount and under less favorable terms. Direct Flow Medical shut down its operations in December 2016 and in January 2017 made an assignment for the benefit of creditors. The Company then initiated foreclosure proceedings, resulting in the Company obtaining ownership of most of the Direct Flow Medical assets through the Company’s wholly-owned subsidiary, DFM, LLC. The assets are held for sale and carried at the lower of carrying amount or fair value, less estimated selling costs, which is primarily based on supporting data from market participant sources, and valid offers from third parties. At December 31, 2016, the Company completed an impairment analysis and concluded that the situation qualified as a troubled debt restructuring and recognized an impairment loss of $51.1 million. In January 2017, the Company started to actively market the asset held for sale. On January 23, 2017, the Company and DFM, LLC entered into an Intellectual Property Assignment Agreement with Hong Kong Haisco Pharmaceutical Co., Limited (“Haisco”), a Chinese pharmaceutical company, whereby Haisco acquired former Direct Flow Medical clinical, regulatory and commercial information and intellectual property rights exclusively in China for $7.0 million. The Company, through DFM, LLC also sold Haisco certain manufacturing equipment for $450,000 and collected $692,000 on outstanding Direct Flow Medical accounts receivable during the year ended December 31, 2017. On January 6, 2018, the Company and HaisThera Advisors Co., Limited (“HaisThera”) entered into a license agreement whereby the Company granted HaisThera an exclusive license to develop, manufacture and commercialize percutaneously implanting stentless aortic valve. The consideration for the license agreement was $500,000 upfront and up to $2.0 million in royalty payments. kaléo Note Purchase Agreement On April 1, 2014, the Company entered into a note purchase agreement with Accel 300, LLC (“Accel 300”), a wholly-owned subsidiary of kaléo, Inc. (“kaléo”), pursuant to which the Company acquired $150.0 million of secured notes due 2029 (the “kaléo Note”). The kaléo Note was issued pursuant to an indenture between Accel 300 and U.S. Bank, National Association, as trustee, and was secured by 20% of net sales of its first approved product, Auvi-Q^® (epinephrine auto-injection, USP) (known as Allerject^®in Canada) and 10% of net sales of kaléo’s second proprietary auto-injector based product, EVZIO (naloxone hydrochloride injection) (the “kaléo Revenue Interests”), and a pledge of kaléo’s equity ownership in Accel 300. On September 21, 2017, the Company entered into an agreement (the “kaléo Note Sale Agreement”) with MAM-Kangaroo Lender, LLC, a Delaware limited liability company (the “kaléo Purchaser”), pursuant to which the Company sold its entire interest in the kaléo Note. Pursuant to the kaléo Note Sale Agreement, the kaléo Purchaser paid to the Company an amount equal to 100% of the then outstanding principal, a premium of 1% of such amount and accrued interest under the kaléo Note, for an aggregate cash purchase price of $141.7 million, subject to an 18-month escrow holdback of $1.4 million against certain potential contingencies. For a further discussion on this topic, see Note 12. CareView Credit Agreement On June 26, 2015, the Company entered into a credit agreement with CareView, under which the Company made available to CareView up to $40.0 million in two tranches of $20.0 million each. Under the terms of the credit agreement, the first tranche of $20.0 million, net of fees, was funded by the Company upon CareView’s attainment of a specified milestone relating to the placement of CareView Systems^®, on October 7, 2015. On October 7, 2015, the Company and CareView entered into an amendment of the credit agreement to modify certain definitions related to the first and second tranche milestones. The second $20.0 million tranche would be funded upon CareView’s attainment of specified milestones relating to the placement of CareView Systems and consolidated earnings before interest, taxes, depreciation and amortization, to be accomplished no later than June 30, 2017. Such milestones were not achieved, and there is no additional funding obligation due from the Company. Outstanding borrowings under the credit agreement will bear interest at the rate of 13.5% per annum and are payable quarterly in arrears. As part of the transaction, the Company received a warrant to purchase approximately 4.4 million shares of common stock of CareView at an exercise price of $0.45 per share. The Company has accounted for the warrant as derivative asset with an offsetting credit as debt discount. At each reporting period the warrant is marked to market for changes in fair value. In connection with the October 2015 amendment of the credit agreement, the Company and CareView also agreed to amend the warrant to purchase common stock agreement by reducing the warrant’s exercise price from $0.45 to $0.40 per share. In February 2018, the Company entered into a modification agreement with CareView whereby the Company agreed, effective as of December 28, 2017, to modify the credit agreement before remedies could otherwise have become available to the Company under the credit agreement in relation to certain obligations of CareView that would potentially not be met, including the requirement to make principal payments. Under the modification agreement the Company agreed that (i) a lower liquidity covenant would be applicable and (ii) principal repayment would be delayed for a period of up to December 31, 2018. In exchange for agreeing to these modifications, among other things, the exercise price of the Company’s warrants to purchase 4.4 million shares of common stock of CareView was repriced from $0.40 to $0.03 per share and, subject to the occurrence of certain events, CareView agreed to grant the Company additional equity interests. At March 31, 2018, the Company determined an estimated fair value of the warrant to be less than $0.1 million. Effective October 1, 2017, the Company determined the loan to be impaired and it ceased to accrue interest revenue. At March 31, 2018, it has been determined that an allowance on the carrying value of the note was not necessary.

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References + Details

Accrued Liabilities

3 Months Ended

Mar. 31, 2018

Payables and Accruals [Abstract]

Accrued Liabilities

. Accrued Liabilities

Accrued liabilities consist of the following:



(in thousands)	March 31, 2018		December 31, 2017
Compensation	$	5,178	$	6,043
Interest	1,375		2,451
Deferred revenue	6,971		9,741
Dividend payable	79		79
Legal	646		595
Accrued rebates, chargebacks and other revenue reserves	17,863		19,613
Refund to manufacturer	268		647
Customer advances	415		3,198
Other	7,343		3,514
Total	$	40,138	$	45,881

The following table provides a summary of activity with respect to the Company’s sales allowances and accruals for the three months ended March 31, 2018:



(in thousands)	Discount and Distribution Fees			Government Rebates and Chargebacks			Assistance and Other Discounts			Product Return		Total
Balance at December 31, 2017:	$	3,422		$	8,709		$	4,178		$	3,304	$	19,613
Allowances for current period sales	2,323			3,669			2,064			572		8,628
Allowances for prior period sales	—			—			—			—		—
Credits/payments for current period sales	(329		)	(347		)	(154		)	—		(830		)
Credits/payments for prior period sales	(2,344		)	(5,194		)	(2,010		)	—		(9,548		)
Balance at March 31, 2018:	$	3,072		$	6,837		$	4,078		$	3,876	$	17,863

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	12. Commitments and Contingencies Wellstat Litigation On September 4, 2015, the Company filed in the Supreme Court of New York a motion for summary judgment in lieu of complaint which requested that the court enter judgment against Wellstat Diagnostics Guarantors for the total amount due on the Wellstat Diagnostics debt, plus all costs and expenses including lawyers’ fees incurred by the Company in enforcement of the related guarantees. On July 29, 2016, the court issued its Memorandum of Decision granting the Company’s motion for summary judgment and denying the Wellstat Diagnostics Guarantors’ cross-motion for summary judgment seeking a determination that they were no longer liable under the guarantees. The Supreme Court of New York held that the Wellstat Diagnostics Guarantors are liable for all “Obligations” owed by Wellstat Diagnostics to the Company. It did not set a specific dollar amount due, but ordered that a judicial hearing officer or special referee be designated to determine the amount of the Obligations owing, and awarded the Company its attorneys’ fees and costs in an amount to be determined. On July 29, 2016, the Wellstat Diagnostics Guarantors filed a notice of appeal from the Memorandum of Decision to the Appellate Division of the Supreme Court of New York. On February 14, 2017, the Appellate Division reversed the summary judgment decision of the Supreme Court in the Company’s favor, but affirmed the denial of the Wellstat Guarantors’ cross-motion for summary judgment. The Appellate Division determined that the action was inappropriate for summary judgment pursuant to New York Civil Practice Law & Rules section 3213 on procedural grounds, but specifically made no determination regarding whether the Company was entitled to a judgment on the merits. Pursuant to this decision, the action has been remanded to the Supreme Court for further proceedings on the merits. The proceeding is being conducted as a plenary proceeding, with both parties having the opportunity to take discovery and file dispositive motions in accordance with New York civil procedure. Noden Pharma DAC v Anchen Pharmaceuticals, Inc. et al On June 12, 2017, Noden Pharma DAC filed a complaint against Anchen Pharmaceuticals, Inc. (“Anchen”) and Par Pharmaceutical (“Par”) for infringement of U.S. Patent No. 8,617,595 based on their submission of an Abbreviated New Drug Application (“ANDA”) seeking authorization from the FDA to market a generic version of Tekturna^® aliskiren hemifumarate tablets, 150 mg and 300 mg, in the United States. Noden Pharma DAC’s suit triggered a 30-month stay of FDA approval of that application under the Hatch Waxman Act. Par filed a counterclaim seeking a declaratory judgment that their proposed generic version of Tekturna HCT^® aliskiren hemifumarate hydrochlorothiazide tablets (150 mg eq. base/12.5 mg HCT, 150 mg eq. base/25 mg HCT, 300 mg eq. base/12.5 mg HCT, and 300 mg eq. base/25 mg HCT), described in a separate ANDA submitted by Par to FDA, alleging noninfringement of U.S. Patent No. 8,618,172 (the “‘172 Patent”), also owned by Noden Pharma DAC. This case is proceeding in the United States District Court for the District of Delaware. In March 2018, each of the parties to the proceeding filed a joint stipulation of dismissal of the defendants’ counterclaim seeking a declaratory judgment of non-infringement of the ‘172 Patent. In the stipulation, Anchen and Par agreed that they will not seek, or otherwise join or assist in, any post-grant review, including inter partes review, of the ‘172 Patent or U.S. Patent No. 9,023,893 (the “’893 Patent”). The defendants further stipulated that they will not seek approval of Par’s ANDA or submit any other ANDA seeking approval to market aliskiren hemifumarate hydrochlorothiazide prior to the expiration of the ‘172 Patent in July of 2028. Both the ‘172 Patent and the ‘893 Patent are listed in the Orange Book for Tekturna HCT. Noden Pharma DAC intends to continue to take appropriate legal action to protect its intellectual property in Tekturna^® and Tekturna HCT^®. Noden Pharma DAC is aware that Novartis Pharma AG (“Novartis”) received Paragraph IV certifications from Par for Tekturna HCT and Anchen on December 31, 2013. Novartis did not file a responsive patent infringement suit related to these certifications. However, to Noden Pharma DAC’s knowledge, neither Par nor Anchen have in the meantime commercialized generic aliskiren products. Other Legal Proceedings From time to time, the Company is involved in lawsuits, arbitrations, claims, investigations and proceedings, consisting of intellectual property, commercial, employment and other matters, which arise in the ordinary course of business. The Company makes provisions for liabilities when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Such provisions are reviewed at least quarterly and adjusted to reflect the impact of settlement negotiations, judicial and administrative rulings, advice of legal counsel, and other information and events pertaining to a particular case. Litigation is inherently unpredictable. If any unfavorable ruling were to occur in any specific period, there exists the possibility of a material adverse impact on the results of the Company’s operations of that period and on its cash flows and liquidity. Lease Guarantee In connection with the spin-off (the “Spin-Off”) by the Company of Facet Biotech Corporation (“Facet”), the Company entered into amendments to the leases for the Company’s former facilities in Redwood City, California, under which Facet was added as a co-tenant, and a Co-Tenancy Agreement, under which Facet agreed to indemnify us for all matters related to the leases attributable to the period after the Spin-Off date. As of March 31, 2018, the total lease payments for the duration of the guarantee, which runs through December 2021, are approximately $42.3 million. In April 2010, Abbott Laboratories acquired Facet and later renamed the entity AbbVie Biotherapeutics, Inc. (“AbbVie”). If AbbVie were to default under its lease obligations, the Company could be held liable by the landlord as a co-tenant and, thus, the Company has in substance guaranteed the payments under the lease agreements for the Redwood City facilities. The Company prepared a discounted, probability weighted cash flow analysis to calculate the estimated fair value of the lease guarantee as of the Spin-Off. The Company was required to make assumptions regarding the probability of Facet’s default on the lease payment, the likelihood of a sublease being executed and the times at which these events could occur. These assumptions are based on information that the Company received from real estate brokers and the then-current economic conditions, as well as expectations of future economic conditions. The fair value of this lease guarantee was charged to additional paid-in capital upon the Spin-Off and any future adjustments to the carrying value of the obligation will also be recorded in additional paid-in capital. The Company has recorded a liability of $10.7 million on its Condensed Consolidated Balance Sheets as of March 31, 2018 and December 31, 2017, related to this guarantee. In future periods, the Company may adjust this liability for any changes in the ultimate outcome of this matter that are both probable and estimable. Irrevocable Letters of Credit On June 30, 2016, the Company purchased a $75.0 million certificate of deposit, which is designated as cash collateral for the $75.0 million letter of credit issued on July 1, 2016 with respect to the first anniversary payment under the Noden Purchase Agreement (as defined in Note 19 below). In addition, the Company provided an irrevocable and unconditional guarantee to Novartis, to pay up to $14.0 million of the remaining amount of the first anniversary payment not covered by the letter of credit. The Company concluded that both guarantees are contingent obligations and shall be accounted for in accordance with ASC 450, Contingencies. Further, it was concluded that both guarantees do not meet the conditions to be accrued at March 31, 2018. On July 3, 2017, the first anniversary payment of $89.0 million was paid pursuant to the Noden Purchase Agreement and the $14.0 million guarantee expired. Purchase Obligations In connection with the Noden Transaction, Noden entered into an unconditional purchase obligation with Novartis to acquire all local finished goods inventory in certain countries upon transfer of the applicable marketing authorization rights in such country. The purchase is payable within 60 days after the transfer of the marketing authorization rights. The agreement does not specify minimum quantities but details pricing terms. In addition, Noden and Novartis entered into a supply agreement pursuant to which Novartis will manufacture and supply to Noden a finished form of the Noden Products and bulk drug form of the Noden Products for specified periods of time prior to the transfer of manufacturing responsibilities for the Noden Products to another manufacturer. The supply agreement may be terminated by either party for material breach that remains uncured for a specified time period. The supply agreement commits the Company to a minimum purchase obligation of approximately $75.4 million and $105.8 million over the next twelve and thirty-six months, respectively. The Company expects that Noden will meet this requirement. LENSAR and Coherent, Inc. entered into an Original Equipment Manufacturer agreement pursuant to which Coherent, Inc. will manufacture and supply to LENSAR Staccato Lasers by March 31, 2019. The supply agreement commits LENSAR to a minimum purchase obligation of approximately $1.1 million over the next twelve months. The Company expects that LENSAR will meet this requirement. For more information about the LENSAR transaction, see Note 19. Escrow Receivable On September 21, 2017, the Company entered into the kaléo Note Sale Agreement, pursuant to which the Company sold its entire interest in the kaléo Note. Pursuant to the kaléo Note Sale Agreement, the purchaser paid to the Company an amount equal to 100% of the then outstanding principal, a premium of 1% of such amount and accrued interest under the kaléo Notes, for an aggregate cash purchase price of $141.7 million. Pursuant to the terms of the kaléo Note Sale Agreement, $1.4 million of the aggregate purchase price was deposited into an escrow account as a potential payment against certain contingencies, which expires on the 18th month anniversary of the closing date. Upon the expiration of escrow period, the escrow agent is required to release remaining funds to the Company. The Company does not expect there to be any claims by the purchaser under the escrow agreement. However, in the event that such a claim is made, and if successful, the amount of such a claim up to $1.4 million would be released from the escrow account to the purchaser, which amount would be reduced from the amount released to the Company at the end of the 18-month escrow period. As of March 31, 2018, the Company is not aware of any claims by the purchaser that would reduce the escrow receivable.

Convertible Notes

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Convertible and Non-Recourse Notes

. Convertible Notes



		Principal Balance Outstanding		Carrying Value
		March 31,		March 31,		December 31,
Description	Maturity Date	2018		2018		2017
(In thousands)
Convertible Notes
February 2018 Notes	February 1, 2018	$	—	$	—	$	126,066
December 2021 Notes	December 1, 2021	$	150,000	119,166		117,415
Total				$	119,166	$	243,481

February 2018 Notes

On February 12, 2014, the Company issued $300.0 million in aggregate principal amount, at par, of the February 2018 Notes in an underwritten public offering, for net proceeds of $290.2 million. The February 2018 Notes were due February 1, 2018, and the Company paid interest at 4.0% on the February 2018 Notes semiannually in arrears on February 1 and August 1 of each year, beginning August 1, 2014. A portion of the proceeds from the February 2018 Notes, net of amounts used for purchased call option transactions and provided by the warrant transactions described below, were used to redeem $131.7 million of the Company’s 2.975% Convertible Senior Notes due February 17, 2016.

On November 20, 2015, the Company’s agent initiated the repurchase of $53.6 million in aggregate principal amount of its February 2018 Notes for $43.7 million in cash in four open market transactions. The closing of these transactions occurred on November 30, 2015. It was determined that the repurchase of the principal amount shall be accounted for as a partial extinguishment of the February 2018 Notes. As a result, a gain on extinguishment of $6.5 million was recorded at closing of the transaction. The $6.5 million gain on extinguishment included the de-recognition of the original issuance discount of $3.1 million, outstanding deferred issuance costs of $0.9 million and agent fees of $0.1 million. In connection with this repurchase of the February 2018 Notes, the Company unwound a portion of the purchased call options related to the notes. As a result of this unwinding, the Company received $0.3 million in cash. The payments received have been recorded as an increase to additional paid-in-capital. In addition, the Company unwound a portion of the warrants for $0.2 million in cash, payable by the Company. The payments have been recorded as a decrease to additional paid-in-capital.

On November 22, 2016, the Company repurchased $120.0 million in aggregate principal amount of its February 2018 Notes for approximately $121.5 million in cash (including $1.5 million of accrued interest) in open market transactions. It was determined that the repurchase of the principal amount shall be accounted for as an extinguishment. The extinguishment included the de-recognition of the original issuance discount of $4.3 million and outstanding deferred issuance costs of $1.3 million. In connection with the repurchase of the February 2018 Notes, the Company unwound a portion of the purchased call options. The unwind transaction of the purchased call option did not result in any cash payments between the parties. In addition, the Company and the counterparties agreed to unwind a portion of the warrants, which also did not result in any cash payments between the parties.

The February 2018 Notes were convertible under any of the following circumstances:


•	During any fiscal quarter ending after the quarter ended June 30, 2014, if the last reported sale price of the Company’s common stock for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter exceeds 130% of the conversion price for the notes on the last day of such preceding fiscal quarter;


•	During the five business-day period immediately after any five-consecutive trading-day period in which the trading price per $1,000 principal amount of notes for each trading day of that measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate for the notes for each such day;


•	Upon the occurrence of specified corporate events as described further in the indenture; or


•	At any time on or after August 1, 2017.

In accordance with the accounting guidance for convertible debt instruments that may be settled in cash or other assets on conversion, the Company was required to separately account for the liability component of the instrument in a manner that reflects the market interest rate for a similar nonconvertible instrument at the date of issuance. As a result, the Company separated the principal balance of the February 2018 Notes between the fair value of the debt component and the fair value of the common stock conversion feature. Using an assumed borrowing rate of 7.0%, which represents the estimated market interest rate for a similar nonconvertible instrument available to the Company on the date of issuance, the Company recorded a total debt discount of $29.7 million, allocated $19.3 million to additional paid-in capital and allocated $10.4 million to deferred tax liability. The discount was being amortized to interest expense over the term of the February 2018 Notes and increases interest expense during the term of the February 2018 Notes from the 4.0% cash coupon interest rate to an effective interest rate of 6.9%.

On February 1, 2018, upon maturity of the February 2018 Notes, the Company repaid a total cash amount of $129.0 million to the custodian, The Bank of New York Mellon Trust Company, N.A., which was comprised of $126.4 million in principal amount and $2.6 million in accrued interest, to retire the February 2018 Notes.

The carrying value and unamortized discount of the February 2018 Notes were as follows:



(In thousands)	March 31, 2018		December 31, 2017
Principal amount of the February 2018 Notes	$	—	$	126,447
Unamortized discount of liability component	—		(381		)
Net carrying value of the February 2018 Notes	$	—	$	126,066

Interest expense for the February 2018 Notes on the Company’s Condensed Consolidated Statements of Income was as follows:



	Three Months Ended
	March 31,
(In thousands)	2018		2017
Contractual coupon interest	$	421	$	1,265
Amortization of debt issuance costs	88		249
Amortization of debt discount	293		848
Total	$	802	$	2,362

Purchased Call Options and Warrants

In connection with the issuance of the February 2018 Notes, the Company entered into purchased call option transactions with two hedge counterparties. The Company paid an aggregate amount of $31.0 million for the purchased call options with terms substantially similar to the embedded conversion options in the February 2018 Notes. The purchased call options covered, subject to anti-dilution and certain other customary adjustments substantially similar to those in the February 2018 Notes, approximately 13.8 million shares of the Company’s common stock. The purchased call options expired on February 1, 2018.

In addition, the Company sold to the hedge counterparties warrants exercisable, on a cashless basis, for the sale of rights to receive shares of common stock that will initially underlie the February 2018 Notes at a strike price of $10.3610 per share, which represents a premium of approximately 30% over the last reported sale price of the Company’s common stock of $7.97 on February 6, 2014. The Company received an aggregate amount of $11.4 million for the sale from the two counterparties. The warrant counterparties may exercise the warrants on their specified expiration dates that occur over a period of time. If the VWAP of the Company’s common stock, as defined in the warrants, exceeds the strike price of the warrants, the Company will deliver to the warrant counterparties shares equal to the spread between the VWAP on the date of exercise or expiration and the strike price. If the VWAP is less than the strike price, neither party is obligated to deliver anything to the other.

The purchased call options and warrants are considered indexed to the Company stock, require net-share settlement, and met all criteria for equity classification at inception and in subsequent periods. The purchased call options cost of $31.0 million, less deferred taxes of $10.8 million, and the $11.4 million received for the warrants, was recorded as adjustments to additional paid-in capital.

December 2021 Notes

On November 22, 2016, the Company issued $150.0 million in aggregate principal amount, at par, of the December 2021 Notes in an underwritten public offering, for net proceeds of $145.7 million. The December 2021 Notes are due December 1, 2021, and the Company pays interest at 2.75% on the December 2021 Notes semiannually in arrears on June 1 and December 1 of each year, beginning June 1, 2017. A portion of the proceeds from the December 2021 Notes, net of amounts used for capped call transaction described below, was used to extinguish $120.0 million of the February 2018 Notes.

Upon the occurrence of a fundamental change, as defined in the indenture, holders have the option to require the Company to repurchase their December 2021 Notes at a purchase price equal to 100% of the principal, plus accrued interest.

The December 2021 Notes are convertible under any of the following circumstances:

•

During any fiscal quarter (and only during such fiscal quarter) commencing after the fiscal quarter ended June 30, 2017, if the last reported sale price of Company common stock for at least 20 trading days (whether or not consecutive), in the period of 30 consecutive trading days, ending on, and including, the last trading day of the immediately preceding fiscal quarter, exceeds 130% of the conversion price for the notes on each applicable trading day;

•

During the five business-day period immediately after any five consecutive trading-day period, which the Company refers to as the measurement period, in which the trading price per $1,000 principal amount of notes for each trading day of that measurement period was less than 98% of the product of the last reported sale price of Company common stock and the conversion rate for the notes for each such trading day; or


•	Upon the occurrence of specified corporate events as described in the indenture.

The initial conversion rate for the December 2021 Notes is 262.2951 shares of the Company’s common stock per $1,000 principal amount of December 2021 Notes, which is equivalent to an initial conversion price of approximately $3.81 per share of common stock, subject to adjustments upon the occurrence of certain specified events as set forth in the indenture.

In accordance with the accounting guidance for convertible debt instruments that may be settled in cash or other assets on conversion, the Company was required to separately account for the liability component of the instrument in a manner that reflects the market interest rate for a similar nonconvertible instrument at the date of issuance. As a result, the Company separated the principal balance of the December 2021 Notes between the fair value of the debt component and the fair value of the common stock conversion feature. Using an assumed borrowing rate of 9.5%, which represents the estimated market interest rate for a similar nonconvertible instrument available to us on the date of issuance, the Company recorded a total debt discount of $4.3 million, allocated $23.8 million to additional paid-in capital and allocated $12.8 million to deferred tax liability. The discount is being amortized to interest expense over the term of the December 2021 Notes and increases interest expense during the term of the December 2021 Notes from the 2.75% cash coupon interest rate to an effective interest rate of 3.4%. As of March 31, 2018, the remaining discount amortization period is 3.7 years.

The carrying value and unamortized discount of the December 2021 Notes were as follows:



(In thousands)	March 31, 2018			December 31, 2017
Principal amount of the December 2021 Notes	$	150,000		$	150,000
Unamortized discount of liability component	(30,834		)	(32,585		)
Net carrying value of the December 2021 Notes	$	119,166		$	117,415

Interest expense for the December 2021 Notes on the Company’s Condensed Consolidated Statements of Income was as follows:



	Three Months Ended
	March 31,
(In thousands)	2018		2017
Contractual coupon interest	$	1,031	$	1,031
Amortization of debt issuance costs	19		18
Amortization of debt discount	134		130
Amortization of conversion feature	1,598		1,430
Total	$	2,782	$	2,609

As of March 31, 2018, the December 2021 Notes are not convertible. At March 31, 2018, the if-converted value of the December 2021 Notes did not exceed the principal amount.

Capped Call Transaction

In connection with the offering of the December 2021 Notes, the Company entered into a privately-negotiated capped call transaction with an affiliate of the underwriter of such issuance. The aggregate cost of the capped call transaction was $14.4 million. The capped call transaction is generally expected to reduce the potential dilution upon conversion of the December 2021 Notes and/or partially offset any cash payments the Company is required to make in excess of the principal amount of converted December 2021 Notes in the event that the market price per share of the Company’s common stock, as measured under the terms of the capped call transaction, is greater than the strike price of the capped call transaction. This initially corresponds to the approximate $3.81 per share conversion price of the December 2021 Notes and is subject to anti-dilution adjustments substantially similar to those applicable to the conversion rate of the December 2021 Notes. The cap price of the capped call transaction was initially $4.88 per share, and is subject to certain adjustments under the terms of the capped call transaction. The Company will not be required to make any cash payments to the option counterparty upon the exercise of the options that are a part of the capped call transaction, but the Company will be entitled to receive from it an aggregate amount of cash and/or number of shares of the Company’s common stock, based on the settlement method election chosen for the related convertible notes, with a value equal to the amount by which the market price per share of the Company’s common stock, as measured under the terms of the capped call transaction, is greater than the strike price of the capped call transaction during the relevant valuation period under the capped call transaction, with such number of shares of the Company’s common stock and/or amount of cash subject to the cap price.

The Company evaluated the capped call transaction under authoritative accounting guidance and determined that they should be accounted for as separate transactions and classified as a net reduction to additional paid-in capital within stockholders’ equity with no recurring fair value measurement recorded.

Other Long-Term Liabilities

3 Months Ended

Mar. 31, 2018

Other Liabilities Disclosure [Abstract]

Other Long-Term Liabilities

14. Other Long-Term Liabilities

Other long-term liabilities consist of the following:



	March 31,		December 31,
	2018		2017
(In thousands)
Accrued lease liability	$	10,700	$	10,700
Long-term incentive accrual	1,864		1,729
Uncertain tax positions	30,948		30,682
Long-term deferred tax liabilities	1,842		1,208
Dividend payable	47		47
Other	362		343
Total	$	45,763	$	44,709

In connection with the Spin-Off, the Company entered into amendments to the leases for the Company’s former facilities in Redwood City, California, under which Facet was added as a co-tenant, and a Co-Tenancy Agreement, under which Facet agreed to indemnify the Company for all matters related to the leases attributable to the period after the Spin-Off date. As of March 31, 2018, the total lease payments for the duration of the guarantee, which runs through December 2021, are approximately $42.3 million. If Facet were to default, the Company could also be responsible for lease-related costs including utilities, property taxes and common area maintenance that may be as much as the actual lease payments. The Company has recorded a liability of $10.7 million on the Company’s Condensed Consolidated Balance Sheets as of March 31, 2018, and December 31, 2017, related to this guarantee.

Stock-Based Compensation

3 Months Ended

Mar. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

15. Stock-Based Compensation

The Company grants restricted stock awards pursuant to a stockholder approved stock-based incentive plan. This incentive plan is described in further detail in Note 16, Stock-Based Compensation, of Notes to the Condensed Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

On September 12, 2017, the Company granted 961,000 shares of common stock in the form of a nonstatutory inducement stock option grant pursuant to a nonstatutory inducement stock option agreement and granted 240,200 shares of our common stock in the form of an inducement restricted stock grant pursuant to an inducement restricted stock agreement. These inducement awards were not granted under the Company’s 2005 Equity Incentive Plan.

The following table summarizes the Company’s stock option and restricted stock award activity during the three months ended March 31, 2018:



	Stock Options			Restricted Stock Awards
(In thousands except per share amounts)	Number of Shares Outstanding	Weighted Average Exercise Price		Number of Shares Outstanding		Weighted Average Grant-date Fair Value Per Share
Balance at December 31, 2017	961	$	3.21	2,305		$	2.68
Granted	—	$	—	38		$	2.74
Vested or released	—	$	—	(38	)	$	2.74
Balance at March 31, 2018	961	$	3.21	2,305		$	2.68

Cash Dividends	3 Months Ended
Cash Dividends	Mar. 31, 2018
Stockholders' Equity Note [Abstract]
Stockholders' Equity Note Disclosure [Text Block]	17. Stockholders’ Equity Stock Repurchase Program On March 1, 2017, the Company’s board of directors authorized the repurchase through March 2018 of issued and outstanding shares of the Company’s common stock having an aggregate value of up to $30.0 million pursuant to a share repurchase program. The repurchases under the share repurchase program were made from time to time in the open market or in privately negotiated transactions and were funded from the Company’s working capital. All shares of common stock repurchased under the Company’s share repurchase program were retired and restored to authorized but unissued shares of common stock at June 30, 2017. The Company repurchased 13.3 million shares of its common stock under the share repurchase program during the fiscal year ended December 31, 2017, for an aggregate purchase price of $30.0 million, or an average cost of $2.25 per share, including trading commission. On September 25, 2017, the Company’s board of directors authorized the repurchase of issued and outstanding shares of the Company’s common stock having an aggregate value of up to $25.0 million pursuant to a new share repurchase program. The repurchases under the new share repurchase program are made from time to time in the open market or in privately negotiated transactions and are funded from the Company’s working capital. The amount and timing of such repurchases are dependent upon the price and availability of shares, general market conditions and the availability of cash. Repurchases may also be made under a trading plan under Rule 10b5-1, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. All shares of common stock repurchased under the Company’s new share repurchase program are expected to be retired and restored to authorized but unissued shares of common stock. The Company repurchased 1.4 million shares of its common stock under the share repurchase program during the three months ended March 31, 2018, for an aggregate purchase price of $4.2 million, or an average cost of $2.97 per share, including trading commission. As of March 31, 2018, the Company had 400,000 shares held in treasury stock at a total cost of $1.2 million. Those shares were settled and retired on April 6, 2018. The new shares repurchase program may be suspended at any time without notice.

Customer Concentration

3 Months Ended

Mar. 31, 2018

Customer Concentration [Abstract]

Concentration Risk Disclosure [Text Block]

6. Concentration of Credit Risk

Product Line Concentration

The percentage of total revenue recognized, which individually accounted for 10% or more of the Company’s total revenues, was as follows:



		Three Months Ended March 31,
Licensee	Product Name	2018		2017
Biogen	Tysabri^®	7	%	31	%

Depomed	Glumetza, Janumet XR, Jentadueto XR and Invokamet XR	19	%	14	%

N/A	Tekturna, Tekturna HCT, Rasilez and Rasilez HCT	48	%	28	%

kaléo	Interest revenues	—	%	10	%

LENSAR	LENSAR Laser System	13	%	—	%

__________________

N/A = Not applicable

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2018
Income Tax Disclosure [Abstract]
Income Taxes	16. Income Taxes Income tax expense for the three months ended March 31, 2018 and 2017, was $1.0 million and $6.6 million, respectively, which resulted primarily from applying the federal statutory income tax rate to income before income taxes. Our effective tax rate for the current period differs from the U.S. federal statutory rate of 21% due primarily to the effect of state income taxes and the foreign rate differential related to Noden Pharma DAC in Ireland. The uncertain tax positions increased during the three months ended March 31, 2018 and 2017, by zero and $0.8 million, respectively, resulting from an increase in tax uncertainties and estimated tax liabilities. On December 22, 2017, the SEC issued Staff Accounting Bulletin No. 118 to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Cuts and Job Act. The accounting for all items is expected to be complete during 2018 as additional guidance related to GILTI is released. Any differences between what was previously recorded and the final amounts or estimates done for subsequent quarters are not expected to be material. The Company’s income tax returns are subject to examination by U.S. federal, state and local tax authorities for tax years 2000 forward. The Company is currently under income tax examination in the state of California for the tax years 2009 through 2015. Although the timing of the resolution of income tax examinations is highly uncertain, and the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year, the Company does not anticipate any material change to the amount of its unrecognized tax benefit over the next 12 months.

Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Mar. 31, 2018

Accumulated Other Comprehensive Income (Loss) [Abstract]

Comprehensive Income (Loss) Note [Text Block]

18. Accumulated Other Comprehensive Income

Comprehensive income is comprised of net income and other comprehensive income (loss). The Company includes unrealized net gains (losses) on investments held in its available-for-sale securities in other comprehensive income (loss), and present the amounts net of tax. The Company’s other comprehensive income (loss) is included in the Company’s Condensed Consolidated Statements of Comprehensive Income.

The balance of accumulated other comprehensive income, net of tax, was as follows:



	Unrealized gains (losses) on available-for-sale securities			Total Accumulated Other Comprehensive Income
(In thousands)
Beginning Balance at December 31, 2017	$	1,181		$	1,181
Activity for the three months ended March 31, 2018	(1,181		)	(1,181		)
Ending Balance at March 31, 2018	$	—		$	—

Subsequent Events	3 Months Ended
Subsequent Events	Mar. 31, 2018
Subsequent Events [Abstract]
Subsequent Events [Text Block]	21. Subsequent Events Share Repurchase Program From April 1, 2018 to May 8, 2018, the Company repurchased approximately 2.8 million shares of its common stock under the share repurchase program at a weighted average price of $3.04 per share for a total of $8.4 million. Since the inception of the share repurchase program in March 2018, the Company has repurchased approximately 4.2 million shares of its common stock for a total of $12.6 million. Approximately $12.4 million remains available under the current share repurchase program.

Business Combinations (Notes)

3 Months Ended

Mar. 31, 2018

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

19. Business Combinations

LENSAR TRANSACTION

Description of the LENSAR Transaction

In December 2016, LENSAR filed the Chapter 11 case with the support of the Company, as its largest senior secured creditor under a credit agreement, as amended, that the Company and LENSAR had entered into in 2013. For more information regarding the credit agreement between the Company and LENSAR, please see Note 7. In January 2017, the Company agreed to provide debtor-in-possession financing of up to $2.8 million in new advances to LENSAR so that it could continue to operate its business during the remainder of the Chapter 11 case. As part of the Chapter 11 case, LENSAR filed a Chapter 11 plan of reorganization, with the Company’s support, under which LENSAR would issue 100% of its equity securities to the Company in exchange for the cancellation of the Company’s claims as a secured creditor in the Chapter 11 case. Following consummation of the Plan, LENSAR would become an operating subsidiary of the Company and the Company provided LENSAR a new, senior-secured, first-priority term loan facility (the “Exit Facility”).

On April 26, 2017, the bankruptcy court approved the plan of reorganization. On May 11, 2017, LENSAR and the Company consummated the plan of reorganization and LENSAR emerged from bankruptcy. Pursuant to the plan of reorganization, the Company obtained control of 100% of the outstanding voting shares of LENSAR. All assets of the LENSAR bankruptcy estate re-vested in reorganized LENSAR free and clear of all liens, claims or charges. The consummation of the plan of reorganization related transactions effect binding and valid transfers to reorganized LENSAR with all rights, title and interest in the acquired assets. Upon consummation of the plan of reorganization, all debt owed to the Company was eliminated other than the Exit Facility. Liabilities to other creditors, including general unsecured creditors, were satisfied through the plan of reorganization.

The Company concluded that the LENSAR transaction shall be accounted in accordance with ASC 805, Business Combinations, that do not involve a transfer of consideration (“combinations by contract”) by applying the acquisition method.

Fair Value of Consideration Transferred

Contemporaneously with the cancellation of the Company’s notes receivable with a carrying value of $43.9 million, the Company acquired 100% equity interests in LENSAR, at fair value, for $31.7 million, resulting in a loss on extinguishment of notes receivable of $10.6 million. The fair value of the equity interest in LENSAR was determined primarily using the “income method,” which starts with a forecast of all expected future cash flows of the acquired business. The acquisition resulted in a gain on bargain purchase because the fair value of assets acquired and liabilities assumed exceeded the total of the fair value of the equity interest in LENSAR by approximately $9.3 million, which was recorded in the Consolidated Statement of Income for the year ended December 31, 2017.

Assets Acquired and Liabilities Assumed

The following table summarizes the fair values of the identifiable intangible assets acquired and liabilities assumed at the acquisition date (in thousands):



Cash	$	1,983
Tangible assets	18,647
Intangible assets ⁽¹⁾	11,970
Net deferred tax assets	25,723
Total identifiable assets	58,323
Current liabilities	(6,673		)
Total liabilities assumed	(6,673		)

Net loss on derecognition of notes receivables	(10,615		)
Gain on bargain purchase, net of loss on extinguishment of notes receivable	(9,309		)
Total fair value of consideration	$	31,726

______________

⁽¹⁾ As of the effective date of the transaction, identifiable intangible assets are required to be measured at fair value. The fair value measurement is based on significant inputs that are unobservable in the market and thus represents a Level 3 measurement. The Company used an income approach to estimate the preliminary fair value of the intangibles which includes technology, trademarks and customer relationships. The assumptions used to estimate the cash flows of the business included a discount rate of 16%, estimated gross margins ranging from 37-72%, income tax rate of 35%, and operating expenses consisting of direct costs based on the anticipated level of revenues. The intangible assets have a weighted-average useful life of approximately 15.0 years. The intangible assets for acquired technology and trademarks are being amortized over their estimated useful lives using the straight-line method of amortization. The intangible assets for customer relationship are being amortized using a double-declining method of amortization as such method better represents the economic benefits to be obtained.

Pro Forma Impact of Business Combination

The following table represents the unaudited consolidated financial information for the Company on a pro forma basis for the three and three months ended March 31, 2018 and 2017, assuming that the the LENSAR transaction had closed on January 1, 2016. The historical financial information has been adjusted to give effect to pro forma items that are directly attributable to the acquisitions and are expected to have a continuing impact on the consolidated results. Additionally, the following table sets forth unaudited financial information and has been compiled from historical financial statements and other information, but is not necessarily indicative of the results that actually would have been achieved had the transactions occurred on the dates indicated or that may be achieved in the future.



	Three Months Ended
	March 31,
	2018		2017
(in thousands)
Pro forma revenues	$	38,518	$	106,950
Pro forma net income	$	1,522	$	53,466
Pro forma net income per share - basic	$	0.01	$	0.33
Pro forma net income per share - diluted	$	0.01	$	0.33

The unaudited pro forma consolidated results include historical revenues and expenses of assets acquired in the LENSAR Transaction with the following adjustments:


•	Adjustment to recognize incremental amortization expense based on the fair value of intangibles acquired;


•	Elimination of non-recurring charges directly related to the acquisition that were included in the historical results of operations for the Company; and


•	Adjustment to recognize pro forma income tax based on income tax benefit on the amortization of intangible asset at the statutory tax rate of the United States [at such time] (35.0%), and the income tax benefit on the interest expense at the statutory tax rate of the United States [at such time] (35.0%).

Intangibles and Goodwill (Notes)

3 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets Disclosure [Text Block]

. Intangible Assets

Intangible Assets, Net

The components of intangible assets as of March 31, 2018 and December 31, 2017 were as follows:



	March 31, 2018							December 31, 2017
(in thousands)	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Finite-lived intangible assets:
Acquired products rights⁽¹⁾	$	216,690	$	(37,921	)	$	178,769	$	216,690	$	(32,503	)	$	184,187
Customer relationships^{(1) (2)}	27,925		(4,423		)	23,502		26,080		(3,729		)	22,351
Acquired technology^{(2) (3)}	11,011		(561		)	10,450		9,200		(409		)	8,791
Acquired trademarks⁽²⁾	570		(105		)	465		570		(76		)	494
	$	256,196	$	(43,010	)	$	213,186	$	252,540	$	(36,717	)	$	215,823

________________

(1) The Company acquired certain intangible assets as part of the Noden Transaction. They are amortized on a straight-line basis over a weighted average period of 10.0 years.

(2) The Company acquired certain intangible assets as part of the LENSAR transaction, as described further in Note 19. They are amortized over a weighted average period of 10.0 years. The intangible assets for acquired technology and trademarks are being amortized over their estimated useful lives using the straight-line method of amortization. The intangible assets for customer relationships are being amortized using a double-declining method of amortization as such method better represents the economic benefits to be obtained.


(3)	The Company acquired certain intangible assets as part of the foreclosure on certain of Direct Flow Medical assets, as described further in Note 7. They are amortized over a weighted average period of 10.0 years. The intangible assets for acquired technology are being amortized over their estimated useful lives using the straight-line method of amortization.

Amortization expense for the three months ended March 31, 2018 and 2017 was $6.3 million and $6.0 million, respectively.

Based on the intangible assets recorded at March 31, 2018, and assuming no subsequent additions to or impairment of the underlying assets, the remaining estimated amortization expense is expected to be as follows (in thousands):



Fiscal Year	Amount
2018 (Remaining nine months)	$	19,058
2019	25,316
2020	25,281
2021	25,250
2022	25,145
2023	25,081
Thereafter	68,055
Total remaining estimated amortization expense	$	213,186

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Segment Information (Notes)

3 Months Ended

Mar. 31, 2018

Segment Reporting Information [Line Items]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

20. Segment Information

In connection with acquiring 100% of the equity interests of LENSAR in May 2017, the Company added a third reportable segment, “medical devices” and renamed the previous product sales segment “pharmaceutical”.

Information regarding the Company’s segments for the three and three months ended March 31, 2018 and 2017 is as follows:



Revenues by segment	Three Months Ended
	March 31,
(in thousands)	2018		2017
Pharmaceutical	$	18,342	$	12,581
Medical devices	4,982		—
Income generating assets	15,194		32,859
Total revenues	$	38,518	$	45,440



Income (loss) by segment	Three Months Ended
	March 31,
(in thousands)	2018			2017
Pharmaceutical	$	(1,716	)	$	(3,733	)
Medical devices	(584		)	—
Income generating assets	3,902			10,974
Total net income	$	1,602		$	7,241



Long-lived assets by segment
(in thousands)	March 31, 2018		December 31, 2017
Pharmaceutical	$	1,164	$	822
Medical devices	6,267		6,263
Income generating assets	126		137
Total long-lived assets	$	7,557	$	7,222

The operations for the Company’s Pharmaceutical and Medical Devices segments are primarily located in Ireland and the United Stated, respectively.

Inventory (Notes)

3 Months Ended

Mar. 31, 2018

Inventory [Abstract]

Inventory Disclosure [Text Block]

8. Inventories

Inventories consisted of the following (in thousands):



	March 31,		December 31,
	2018		2017
Raw materials	$	3,037	$	1,717
Work in process	2,031		1,119
Finished goods	8,944		6,311
Total inventory	$	14,012	$	9,147

As of March 31, 2018 and December 31, 2017, the Company deferred approximately $0.4 million and $1.3 million, respectively, of costs associated with inventory transfer made under the Company’s third party logistic provider service arrangement. These costs have been recorded as other assets on the Company’s Condensed Consolidated Balance Sheet as of March 31, 2018 and December 31, 2017. The Company will recognize the cost of product sold as inventory is transferred from its third-party logistics provider to the Company’s customers.

During the first quarter of 2018 and fourth quarter of 2017, the Company recognized an inventory write-down of $0.1 million and $1.8 million, respectively, related to Noden Products that the Company would not be able to sell prior to their expiration.

Stockholders' Equity (Notes)	3 Months Ended
Stockholders' Equity (Notes)	Mar. 31, 2018
Stockholders' Equity Attributable to Parent [Abstract]
Stockholders' Equity Note Disclosure [Text Block]	17. Stockholders’ Equity Stock Repurchase Program On March 1, 2017, the Company’s board of directors authorized the repurchase through March 2018 of issued and outstanding shares of the Company’s common stock having an aggregate value of up to $30.0 million pursuant to a share repurchase program. The repurchases under the share repurchase program were made from time to time in the open market or in privately negotiated transactions and were funded from the Company’s working capital. All shares of common stock repurchased under the Company’s share repurchase program were retired and restored to authorized but unissued shares of common stock at June 30, 2017. The Company repurchased 13.3 million shares of its common stock under the share repurchase program during the fiscal year ended December 31, 2017, for an aggregate purchase price of $30.0 million, or an average cost of $2.25 per share, including trading commission. On September 25, 2017, the Company’s board of directors authorized the repurchase of issued and outstanding shares of the Company’s common stock having an aggregate value of up to $25.0 million pursuant to a new share repurchase program. The repurchases under the new share repurchase program are made from time to time in the open market or in privately negotiated transactions and are funded from the Company’s working capital. The amount and timing of such repurchases are dependent upon the price and availability of shares, general market conditions and the availability of cash. Repurchases may also be made under a trading plan under Rule 10b5-1, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. All shares of common stock repurchased under the Company’s new share repurchase program are expected to be retired and restored to authorized but unissued shares of common stock. The Company repurchased 1.4 million shares of its common stock under the share repurchase program during the three months ended March 31, 2018, for an aggregate purchase price of $4.2 million, or an average cost of $2.97 per share, including trading commission. As of March 31, 2018, the Company had 400,000 shares held in treasury stock at a total cost of $1.2 million. Those shares were settled and retired on April 6, 2018. The new shares repurchase program may be suspended at any time without notice.

Revenue from Contracts with Customers (Notes)

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customers [Abstract]

Revenue from Contract with Customer [Text Block]

2. Revenue from Contracts with Customers

Adoption of New Revenue Standard

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) that supersedes ASC 605, Revenue Recognition. Subsequently, the FASB issued several updates to ASU 2014-09, which are pending content or otherwise codified in Accounting Standards Codification (“ASC”) Topic 606 (“ASC 606”). ASC 606 also includes new guidance on costs related to a contract, which is codified in ASC Subtopic 340-40. The Company adopted ASC 606 on January 1, 2018 using the modified retrospective method for all contracts not substantially completed as of the date of adoption. The cumulative impact of the adoption ASC 606 was not material to the Company therefore the Company did not record any adjustments to retained earnings. The reported results for 2018 reflect the application of ASC 606 guidance while the reported results for 2017 were prepared under the guidance of ASC Topic 605, which is also referred to herein as “legacy GAAP” or the “previous guidance”.

Revenue

A. Significant Accounting Policy

In accordance with ASC 606, revenue is recognized when a customer obtains control of promised products and services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these products and services. A five-step model is utilized to achieve the core principle and includes the following steps: (1) identify the customer contract; (2) identify the contract’s performance obligation; (3) determine the transactions price; (4) allocate the transactions price to the performance obligation; and (5) recognize revenue when the performance obligation is satisfied.

B. Practical Expedients

Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue.

Shipping and handling costs associated with outbound freight after control over a product has transferred to a customer are accounted for as a fulfillment cost and are included in cost of revenues.

Sales commissions and other incremental costs of obtaining contracts are expensed as incurred as the amortization periods are less than one year.

C. Nature of Goods and Services

The following is a description of principal activities - separated by reportable segments - from which the Company generates its revenue. For more detailed information about reportable segments, see Note 20.

i. Pharmaceutical

The pharmaceutical segment of the Company principally generates revenue from products sold to wholesalers and distributors. Customer orders are generally fulfilled within a few days of receipt resulting in minimal order backlog. Contractual performance obligations are usually limited to transfer of the product to the customer. The transfer occurs either upon shipment or upon receipt of the product in certain non-U.S. countries after considering when the customer obtains control of the product. In addition, for some non-U.S. countries, the Company sells product on a consignment basis where control is not transferred until the customer resells the product to an end user. At these points, customers are able to direct the use of and obtain substantially all of the remaining benefits of the product.

Sales to customers are initially invoiced at contractual list prices. Payment terms are typically 30 to 90 days based on customary practice in each country. Revenue is reduced from the list price at the time of recognition for expected charge-backs, discounts, rebates, sales allowances and product returns, which are referred to as gross-to-net adjustments. These reductions are attributed to various commercial agreements, managed healthcare organizations and government programs such as Medicare, Medicaid, and the 340B Drug Pricing Program containing various pricing implications such as mandatory discounts, pricing protection below wholesaler list price and other discounts when Medicare Part D beneficiaries are in the coverage gap. These various reductions in the transaction price have been estimated using either a most likely amount or expected value method depending on their nature and have been reflected as liabilities and are settled through cash payments, typically within time periods ranging from a few months to one year. Significant judgment is required in estimating gross-to-net adjustments considering legal interpretations of applicable laws and regulations, historical experience, payer channel mix, current contract prices under applicable programs, unbilled claims, processing time lags and inventory levels in the distribution channel.

ii. Medical Devices

The medical devices segment of the Company principally generates revenue from the sale and lease of the LENSAR^®Laser System (“LLS”), related procedure devices and licenses, and service agreements.

For bundled packages, the Company accounts for individual products and services separately if they are distinct - i.e. if a product or service is separately identifiable form other items in the bundled package and if the customer can benefit from it on its own or with other resources that are readily available to the customer. As the Company both sells and leases the LLS, the consideration (including any discounts) is first allocated between lease and non-lease components and then allocated between the separate products and services based on their stand-alone selling prices. The consideration (including any discounts) is allocated between separate products and services in a bundle based on their stand-alone selling prices. The stand-alone selling prices for the Patient Interface Devices (“PIDs”) and procedure licenses are determined based on the prices at which the Company separately sells the PIDs and procedure licenses. The LLS system and warranty stand-alone selling prices are determined using the expected cost plus a margin approach.

The Company sells and leases the LLS to customers. For LSS sales, the Company recognizes revenue in products revenue when a customer takes possession of the system. This usually occurs after the customer signs a contract, LENSAR installs the system, and LENSAR performs the requisite training for use of the system. For LLS leases, the Company recognizes revenue in products revenue over the length of the lease in products revenue in accordance with ASC 840, Leases.

The LLS requires both a consumable, a PID, and a procedure license to perform each procedure. The Company recognizes revenue for PIDs in products revenue when the customer takes possession of the PID. PIDs are sold by the case. The Company recognizes revenue for procedure licenses in products revenue when a customer purchases a procedure license from the web portal. Typically, consideration for PIDs and procedure licenses is considered fixed consideration except as noted below. Certain customer agreements provide for variable consideration through tiered volume discount pricing.

The Company provides an extended warranty that provides additional services beyond the standard warranty. The Company recognizes revenue in products revenue over the warranty period. Customers have the option of renewing the warranty period, which is considered a new and separate contract.

iii. Income Generating Assets

Licenses of intellectual property: If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, the Company recognizes revenues from non-refundable, up-front fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license.

During the period ended March 31, 2018 the Company granted an exclusive license related to its Direct Flow Medical assets in exchange for $0.5 million in cash and up to $2.0 million in royalty payments. The $0.5 million payment was accounted for in accordance with ASC 606 under which the full cash payment was recognized as revenue at March 31, 2018 as the Company had fulfilled its performance obligation under the agreement.

Royalties: The Company recognizes royalty revenues related to the sale of products by its licensees that incorporate the Company's technologies. Royalties qualify for the sales-and-usage exemption under Topic 606 as (i) royalties are based strictly on the sales-and-usage by the licensee; and (ii) a license of IP is the sole or predominant item to which such royalties relate. Based on this exemption, these royalties are earned under the terms of a license agreement in the period the products are sold by the Company's partner and the Company has a present right to payment.

D. Disaggregation of Revenue

We disaggregate our revenue from contracts with customers by segment and geographic location, as we believe it best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. In the following table, revenue is disaggregated by segment and primary geographical market as of March 31, 2018:



(in thousands)	Medical Devices		Pharmaceutical		Total

Primary geographical markets:
North America	$	1,704	$	10,931	$	12,635
Europe	615		5,991		6,606
Asia	1,114		1,420		2,534
Other	113		—		113
Total revenue from contracts with customers¹	$	3,546	$	18,342	$	21,888

_______________

¹ The table above does not include lease revenue of $1.4 million.

E. Contract Balances

The following table provides information about receivables and contract liabilities from contracts with customers:



(in thousands)	March 31, 2018		January 1, 2018

Receivables, current and non-current, net	$	23,168	$	30,771
Contract liabilities	$	7,237	$	10,084

Receivables, Net—Receivables, net, include amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. The Company maintains an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable.

Contract Liabilities—The Company’s contract liabilities consist of deferred revenue for products sold to customers for which the performance obligation has not been completed by the Company. The Company classifies deferred revenue as current or noncurrent based on the timing of when it expects to recognize revenue. The noncurrent portion of deferred revenue is included in other long-term liabilities in the Company’s consolidated balance sheets.

Revenue recognized during the three months ended March 31, 2018 from amounts included in deferred revenue at the beginning of the period was approximately $9.0 million. Deferred revenue increased by $6.2 million for additional consideration received by customers for which the Company has not yet satisfied its performance obligation.

F. Transaction Price Allocated to Future Performance Obligations

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period.



	Nine Months Ended
(in thousands)	December 31, 2018		Thereafter		Total

Pharmaceutical product sales	$	1,000	$	—	$	1,000
Medical device product sales	$	2,288	$	1,334	$	3,622

We do not disclose the value of unsatisfied performance obligations for (i) contracts with original expected lengths of one year or less or (ii) contracts for which we recognize revenue at the amount to which we have the right to invoice for the products delivered or services performed.

Asset Acquisitions (Notes)

3 Months Ended

Mar. 31, 2018

Mergers, Acquisitions and Dispositions Disclosures [Text Block]

9. Asset Acquisition

On January 8, 2018, LENSAR entered into an Asset Purchase Agreement with Precision Eye Services (“PES”) to purchase assets used in PES’ laser-assisted cataract surgery business. The assets purchased include equipment, inventory and PES’ customer contracts. No workforce was transferred as part of the transaction.

The Company assessed the acquisition of PES assets under FASB ASC Topic 805, “Business Combinations” (“ASC 805”). Under ASC 805, the Company determined that the acquired assets did not constitute a business and that the transaction would be accounted for as an asset acquisition.

The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed at the acquisition date (in thousands):



Equipment and inventory	$	848
Fixed assets	67
Intangible assets (customer relationships)	1,845
Total identifiable assets	$	2,760

Consideration paid at closing, cash	$	1,200
Conversion consideration	920
Contingent consideration	640
Total fair value of consideration	$	2,760

Summary of Significant Accounting Policies (Policies)	3 Months Ended
Summary of Significant Accounting Policies (Policies)	Mar. 31, 2018
Accounting Policies [Abstract]
Basis of Presentation, Policy	Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements of PDL Biopharma, Inc. and its subsidiaries (collectively, the “Company” or “PDL”) have been prepared in accordance with Generally Accepted Accounting Principles (United States) (“GAAP”) for interim financial information. The financial statements include all adjustments (consisting only of normal recurring adjustments), that management of the Company believes are necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of results expected for the full fiscal year or for any subsequent interim period. The accompanying unaudited Condensed Consolidated Financial Statements and related financial information should be read in conjunction with the Company’s audited Consolidated Financial Statements and the related notes thereto for the year ended December 31, 2017, included in its Annual Report on Form 10-K for the fiscal year ended December 31, 2017, filed with the Securities and Exchange Commission (“SEC”) on March 16, 2018. The Condensed Consolidated Balance Sheet at December 31, 2017, has been derived from the audited Consolidated Financial Statements at that date, but does not include all disclosures required by GAAP. Significant Accounting Policies The Company’s significant accounting policies are described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. Summarized below are the accounting pronouncements adopted subsequent to December 31, 2017.
New Accounting Pronouncements, Policy [Policy Text Block]	Adopted Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-15, Classification of Certain Cash Receipts and Cash Payments. The new standard provides for specific guidance how certain transactions are classified in the statement of cash flows. Effective January 1, 2018, the Company adopted the requirements of ASU No. 2016-15. The adoption did not have an effect on the Consolidated Financial Statements on the adoption date and no adjustment to prior year Consolidated Financial Statements was required. In October 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, which requires companies to account for the income tax effects of intercompany sales and transfers of assets other than inventory in the period in which the transfer occurs. Effective January 1, 2018, the Company adopted the requirements of ASU No. 2016-16. The adoption did not have an effect on the Consolidated Financial Statements on the adoption date and no adjustment to prior year Consolidated Financial Statements was required. In November 2016, the FASB issued ASU No. 2016-18, Restricted Cash, which requires entities to show the changes in total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. Effective January 1, 2018, the Company adopted the requirements of ASU No. 2016-18. The adoption did not have an effect on the Consolidated Financial Statements on the adoption date and no adjustment to prior year Consolidated Financial Statements was required. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). Effective January 1, 2018, the Company adopted the requirements of ASU 2014-09 using the modified retrospective method as discussed in Note 2 below. All amounts and disclosures set forth in this Quarterly Report on Form 10-Q reflect these changes. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases, which seeks to increase transparency and comparability among organizations by, among other things, recognizing lease assets and lease liabilities on the balance sheet for leases classified as operating leases under previous GAAP and disclosing key information about leasing arrangements. ASU No. 2016-02 becomes effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company is currently evaluating the provisions of ASU No. 2016-02 and assessing the impact, if any, it may have on the Company’s Condensed Consolidated Financial Statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments. The new guidance amends the impairment model to utilize an expected loss methodology in place of the currently used incurred loss methodology, which will result in more timely recognition of losses. ASU No. 2016-13 has an effective date of the fiscal years beginning December 15, 2019, including interim periods within those fiscal years. The Company is currently evaluating ASU 2016-13 and assessing the impact, if any, it may have to the Company’s consolidated results of operations, financial position and cash flows.

Net Income per Share (Tables)

3 Months Ended

Mar. 31, 2018

Earnings Per Share [Abstract]

Schedule of calculation of numerator and denominator in earnings per share



	Three Months Ended
	March 31,
Net Income per Basic and Diluted Share:	2018		2017
(in thousands except per share amounts)
Numerator
Income attributable to PDL’s shareholders used to compute net income per basic and diluted share	$	1,602	$	7,241

Denominator
Total weighted average shares used to compute net income attributable to PDL’s shareholders, per basic share	151,473		163,745
Restricted stock outstanding	1,106		247
Shares used to compute net income attributable to PDL’s shareholders, per diluted share	152,579		163,992

Net income attributable to PDL’s shareholders per share - basic	$	0.01	$	0.04
Net income attributable to PDL’s shareholders per share - diluted	$	0.01	$	0.04

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

The following table represents significant unobservable inputs used in determining the estimated fair value of impaired notes receivable investments:



Asset	Valuation Technique	Unobservable Input	March 31, 2018	December 31, 2017

Wellstat Diagnostics
Wellstat Guarantors Intellectual Property	Income Approach
		Discount rate	12%	12%
		Royalty amount	$21 million	$21 million
Settlement Amount	Income Approach
		Discount rate	15%	15%
		Settlement amount	$33 million	$32 million

Real Estate Property	Market Approach
		Annual appreciation rate	4%	4%
		Estimated realtor fee	6%	6%
		Estimated disposal date	6/30/2019	6/30/2019

CareView
Note receivable cash flows	Income Approach
		Discount rate	17.5%	17.5%

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following tables summarize the changes in Level 3 assets and the gains and losses included in earnings for the three months ended March 31, 2018:



Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - Royalty Rights Assets

(in thousands)			Royalty Rights - At Fair Value
Fair value as of December 31, 2017						$	349,223

	Total net change in fair value for the period
		Change in fair value of royalty rights - at fair value	$	11,091
		Proceeds from royalty rights - at fair value	$	(18,623	)
		Total net change in fair value for the period				(7,532		)

Fair value as of March 31, 2018						$	341,691



Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - Royalty Rights Assets

	Fair Value as of		Royalty Rights -			Fair Value as of
(in thousands)	December 31, 2017		Change in Fair Value			March 31, 2018
Depomed	$	232,038	$	(9,430	)	$	222,608
VB	14,380		137			14,517
U-M	26,769		(187		)	26,582
AcelRx	72,894		2,237			75,131
Avinger	396		(295		)	101
KYBELLA	2,746		6			2,752
	$	349,223	$	(7,532	)	$	341,691



Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - Liabilities

(in thousands)		Contingent Consideration
Fair value as of December 31, 2017		$	(42,000	)

	Total net change in fair value for the period	600

Fair value as of March 31, 2018		$	(41,400	)

Schedule of fair value of financial instruments measured on recurring basis



	March 31, 2018								December 31, 2017
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
(In thousands)
Financial assets:
Money market funds	$	322,785	$	—	$	—	$	322,785	$	417,563	$	—	$	—	$	417,563
Corporate securities	—		—		—		—		4,848		—		—		4,848
Warrants	—		100		—		100		—		29		—		29
Royalty rights - at fair value	—		—		341,691		341,691		—		—		349,223		349,223
Total	$	322,785	$	100	$	341,691	$	664,576	$	422,411	$	29	$	349,223	$	771,663

Financial liabilities:
Contingent consideration	—		—		41,400		41,400		—		—		42,000		42,000
Total	$	—	$	—	$	41,400	$	41,400	$	—	$	—	$	42,000	$	42,000

Schedule of fair value of assets and liabilities not subject to fair value recognition by level within the valuation hierarchy

ollows:



	Three Months Ended
	March 31,
(in thousands)	2018		2017

Total change in fair value for the period included in earnings for royalty right assets held at the end of the reporting period	$	11,091	$	13,146

Total change in fair value for the period included in earnings for liabilities held at the end of the reporting period	$	600	$	(1,442	)

The following tables present the fair value of assets and liabilities not subject to fair value recognition by level within the valuation h

Convertible Notes (Tables)

3 Months Ended

Mar. 31, 2018

Debt Disclosure [Abstract]

Schedule of carrying value and unamortized discount on December 2021 Notes [Table Text Block]

The carrying value and unamortized discount of the December 2021 Notes were as follows:



(In thousands)	March 31, 2018			December 31, 2017
Principal amount of the December 2021 Notes	$	150,000		$	150,000
Unamortized discount of liability component	(30,834		)	(32,585		)
Net carrying value of the December 2021 Notes	$	119,166		$	117,415

Schedule of convertible and non-recourse notes activity



		Principal Balance Outstanding		Carrying Value
		March 31,		March 31,		December 31,
Description	Maturity Date	2018		2018		2017
(In thousands)
Convertible Notes
February 2018 Notes	February 1, 2018	$	—	$	—	$	126,066
December 2021 Notes	December 1, 2021	$	150,000	119,166		117,415
Total				$	119,166	$	243,481

Schedule of carrying value and unamortized discount on February 2018 Notes [Table Text Block]

The carrying value and unamortized discount of the February 2018 Notes were as follows:



(In thousands)	March 31, 2018		December 31, 2017
Principal amount of the February 2018 Notes	$	—	$	126,447
Unamortized discount of liability component	—		(381		)
Net carrying value of the February 2018 Notes	$	—	$	126,066

Schedule of interest expense for February 2018 Notes [Table Text Block]

Interest expense for the February 2018 Notes on the Company’s Condensed Consolidated Statements of Income was as follows:



	Three Months Ended
	March 31,
(In thousands)	2018		2017
Contractual coupon interest	$	421	$	1,265
Amortization of debt issuance costs	88		249
Amortization of debt discount	293		848
Total	$	802	$	2,362

Schedule of interest expense for December 2021 Notes [Table Text Block]

Interest expense for the December 2021 Notes on the Company’s Condensed Consolidated Statements of Income was as follows:



	Three Months Ended
	March 31,
(In thousands)	2018		2017
Contractual coupon interest	$	1,031	$	1,031
Amortization of debt issuance costs	19		18
Amortization of debt discount	134		130
Amortization of conversion feature	1,598		1,430
Total	$	2,782	$	2,609

Customer Concentration (Tables)

3 Months Ended

Mar. 31, 2018

Customer Concentration [Abstract]

Schedule of Revenue by Major Customers by Reporting Segments [Table Text Block]

The percentage of total revenue recognized, which individually accounted for 10% or more of the Company’s total revenues, was as follows:



		Three Months Ended March 31,
Licensee	Product Name	2018		2017
Biogen	Tysabri^®	7	%	31	%

Depomed	Glumetza, Janumet XR, Jentadueto XR and Invokamet XR	19	%	14	%

N/A	Tekturna, Tekturna HCT, Rasilez and Rasilez HCT	48	%	28	%

kaléo	Interest revenues	—	%	10	%

LENSAR	LENSAR Laser System	13	%	—	%

__________________

N/A = Not

Business Combinations (Tables)

3 Months Ended

Mar. 31, 2018

Acquired Finite-Lived Intangible Assets [Line Items]

Business Acquisition, Pro Forma Information [Table Text Block]



	Three Months Ended
	March 31,
	2018		2017
(in thousands)
Pro forma revenues	$	38,518	$	106,950
Pro forma net income	$	1,522	$	53,466
Pro forma net income per share - basic	$	0.01	$	0.33
Pro forma net income per share - diluted	$	0.01	$	0.33

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block]

Business Combinations Fair Value of Intangible Assets Acquired and Liabilities Assumed (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed at the acquisition date (in thousands):



Equipment and inventory	$	848
Fixed assets	67
Intangible assets (customer relationships)	1,845
Total identifiable assets	$	2,760

Consideration paid at closing, cash	$	1,200
Conversion consideration	920
Contingent consideration	640
Total fair value of consideration	$	2,760

The following table summarizes the fair values of the identifiable intangible assets acquired and liabilities assumed at the acquisition date (in thousands):



Cash	$	1,983
Tangible assets	18,647
Intangible assets ⁽¹⁾	11,970
Net deferred tax assets	25,723
Total identifiable assets	58,323
Current liabilities	(6,673		)
Total liabilities assumed	(6,673		)

Net loss on derecognition of notes receivables	(10,615		)
Gain on bargain purchase, net of loss on extinguishment of notes receivable	(9,309		)
Total fair value of consideration	$	31,726

______________

Intangibles and Goodwill (Tables)

3 Months Ended

Mar. 31, 2018

Acquired Finite-Lived Intangible Assets [Line Items]

Schedule of Acquired Finite-Lived Intangible Assets by Major Class [Table Text Block]

The components of intangible assets as of March 31, 2018 and December 31, 2017 were as follows:



	March 31, 2018							December 31, 2017
(in thousands)	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
Finite-lived intangible assets:
Acquired products rights⁽¹⁾	$	216,690	$	(37,921	)	$	178,769	$	216,690	$	(32,503	)	$	184,187
Customer relationships^{(1) (2)}	27,925		(4,423		)	23,502		26,080		(3,729		)	22,351
Acquired technology^{(2) (3)}	11,011		(561		)	10,450		9,200		(409		)	8,791
Acquired trademarks⁽²⁾	570		(105		)	465		570		(76		)	494
	$	256,196	$	(43,010	)	$	213,186	$	252,540	$	(36,717	)	$	215,823

________________

(1) The Company acquired certain intangible assets as part of the Noden Transaction. They are amortized on a straight-line basis over a weighted average period of 10.0 years.


(3)	The Company acquired certain intangible assets as part of the foreclosure on certain of Direct Flow Medical assets, as described further in Note 7. They are amortized over a weighted average period of 10.0 years. The intangible assets for acquired technology are being amortized over their estimated useful lives using the straight-line method of amortization.

Intangibles and Goodwill Remaining Amortization Expense (Tables)

3 Months Ended

Mar. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]



Fiscal Year	Amount
2018 (Remaining nine months)	$	19,058
2019	25,316
2020	25,281
2021	25,250
2022	25,145
2023	25,081
Thereafter	68,055
Total remaining estimated amortization expense	$	213,186

Segment Information (Tables)

3 Months Ended

Mar. 31, 2018

Segment Reporting Information [Line Items]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Information regarding the Company’s segments for the three and three months ended March 31, 2018 and 2017 is as follows:



Revenues by segment	Three Months Ended
	March 31,
(in thousands)	2018		2017
Pharmaceutical	$	18,342	$	12,581
Medical devices	4,982		—
Income generating assets	15,194		32,859
Total revenues	$	38,518	$	45,440



Income (loss) by segment	Three Months Ended
	March 31,
(in thousands)	2018			2017
Pharmaceutical	$	(1,716	)	$	(3,733	)
Medical devices	(584		)	—
Income generating assets	3,902			10,974
Total net income	$	1,602		$	7,241



Long-lived assets by segment
(in thousands)	March 31, 2018		December 31, 2017
Pharmaceutical	$	1,164	$	822
Medical devices	6,267		6,263
Income generating assets	126		137
Total long-lived assets	$	7,557	$	7,222

Inventory (Tables)

3 Months Ended

Mar. 31, 2018

Inventory [Line Items]

Schedule of Inventory, Current [Table Text Block]

Inventories consisted of the following (in thousands):



	March 31,		December 31,
	2018		2017
Raw materials	$	3,037	$	1,717
Work in process	2,031		1,119
Finished goods	8,944		6,311
Total inventory	$	14,012	$	9,147

Revenue from Contracts with Customers (Tables)

3 Months Ended

Mar. 31, 2018

Revenue from Contracts with Customers [Abstract]

Disaggregation of Revenue [Table Text Block]



(in thousands)	Medical Devices		Pharmaceutical		Total

Primary geographical markets:
North America	$	1,704	$	10,931	$	12,635
Europe	615		5,991		6,606
Asia	1,114		1,420		2,534
Other	113		—		113
Total revenue from contracts with customers¹	$	3,546	$	18,342	$	21,888

_______________

¹ The table above does not include lease revenue of $1.4 million.

Contract with Customer, Asset and Liability [Table Text Block]

The following table provides information about receivables and contract liabilities from contracts with customers:



(in thousands)	March 31, 2018		January 1, 2018

Receivables, current and non-current, net	$	23,168	$	30,771
Contract liabilities	$	7,237	$	10,084

Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Table Text Block]



	Nine Months Ended
(in thousands)	December 31, 2018		Thereafter		Total

Pharmaceutical product sales	$	1,000	$	—	$	1,000
Medical device product sales	$	2,288	$	1,334	$	3,622

Asset Acquisitions (Tables)

3 Months Ended

Mar. 31, 2018

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The following table summarizes the fair values of the identifiable assets acquired and liabilities assumed at the acquisition date (in thousands):



Equipment and inventory	$	848
Fixed assets	67
Intangible assets (customer relationships)	1,845
Total identifiable assets	$	2,760

Consideration paid at closing, cash	$	1,200
Conversion consideration	920
Contingent consideration	640
Total fair value of consideration	$	2,760

The following table summarizes the fair values of the identifiable intangible assets acquired and liabilities assumed at the acquisition date (in thousands):



Cash	$	1,983
Tangible assets	18,647
Intangible assets ⁽¹⁾	11,970
Net deferred tax assets	25,723
Total identifiable assets	58,323
Current liabilities	(6,673		)
Total liabilities assumed	(6,673		)

Net loss on derecognition of notes receivables	(10,615		)
Gain on bargain purchase, net of loss on extinguishment of notes receivable	(9,309		)
Total fair value of consideration	$	31,726

______________

Net Income per Share (Narrative) (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017	Nov. 22, 2016	Nov. 20, 2015
Restricted Stock [Member]
Debt Instrument [Line Items]
Antidilutive securities excluded from computation of earnings per share (in Shares)	1,200,000	1,719,000
Option on Securities [Member]
Debt Instrument [Line Items]
Antidilutive securities excluded from computation of earnings per share (in Shares)	1,500,000	0
December 2021 Notes [Member]
Debt Instrument [Line Items]
Convertible notes	$ 119,166		$ 117,415	$ 150,000	$ 150,000

Net Income per Share (Net Income Per Basic and Diluted Share) (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Numerator
Income used to compute net income per diluted share	$ 1,602	$ 7,241
Denominator
Total weighted-average shares used to compute net income per basic share (in Shares)	151,473	163,745
Diluted (in Shares)	152,579	163,992
Basic (in Dollars per Share)	$ 0.01	$ 0.04
Net income per diluted share (in Dollars per Share)	$ 0.01	$ 0.04
Restricted Stock [Member]
Debt Instrument [Line Items]
Additional shares included in the calculation of diluted EPS (in Shares)	1,106	247

Fair Value Measurements (Narrative) (Detail) - USD ($)

3 Months Ended

Dec. 13, 2016

Sep. 21, 2016

Jul. 08, 2016

Jun. 02, 2016

Mar. 31, 2018

Mar. 31, 2017

Dec. 31, 2017

Mar. 30, 2017

Jul. 09, 2016

Sep. 18, 2015

Jul. 28, 2015

Nov. 06, 2014

Jun. 26, 2014

Oct. 18, 2013

Accounts and Notes Receivable, Net

$ 70,800,000

$ 70,700,000

Cash payment for purchase of royalty right

$ 65,600,000

Change of ownership repayment

$ 108,200,000

Revenue Recognition, Milestone Method, Revenue Recognized

$ 6,000,000

$ 5,000,000

$ 6,000,000

Transfers from level 1 to level 2, amount

341,691,000

^[1]

349,223,000

^[2]

Transfers from level 2 to level 1, amount

Percentage of royalty acquired

75.00%

Notes Receivable, Fair Value Disclosure

72,700,000

$ 71,300,000

Interest revenue

$ 749,000

$ 5,457,000

Depomed [Member]

Cash payment for purchase of royalty right

$ 240,500,000

Royalty right purchase transaction costs

241,300,000

$ 800,000

Long-Duration Contracts, Assumptions by Product and Guarantee, Discount Rate

10.00%

Fair Value Measurements, Sensitivity Analysis, Description

Should these discount rates increase or decrease by 2.5%, the fair value of the asset could decrease by $13.4 million or increase by $15.5 million, respectively. A third-party expert was engaged to assist management develop its original estimate of the expected future cash flows. The estimated fair value of the asset is subject to variation should those cash flows vary significantly from those estimates. The Company periodically assesses the expected future cash flows and to the extent such payments are greater or less than its initial estimates, or the timing of such payments is materially different than the original estimates, the Company will adjust the estimated fair value of the asset. Should the expected royalties increase or decrease by 2.5%, the fair value of the asset could increase or decrease by $5.6 million, respectively.

Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount

$ 222,600,000

$ 222,600,000

VB [Member]

Fair value inputs, discount rate (in Percent)

$ 15,500,000

15.00%

Fair Value Measurements, Sensitivity Analysis, Description

Should this discount rate increase or decrease by 2.5%, the fair value of this asset could decrease by $1.4 million or increase by $1.6 million, respectively. Should the expected royalties increase or decrease by 2.5%, the fair value of the asset could increase or decrease by $0.4 million, respectively.

Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount

$ 14,500,000

$ 14,500,000

University of Michigan [Member]

Long-Duration Contracts, Assumptions by Product and Guarantee, Discount Rate

12.80%

Fair Value Measurements, Sensitivity Analysis, Description

Should this discount rate increase or decrease by 2.5%, the fair value of this asset could decrease by $1.3 million or increase by $1.8 million, respectively. Should the expected royalties increase or decrease by 2.5%, the fair value of the asset could increase by $0.9 million or decrease by $0.5 million, respectively.

Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount

$ 26,600,000

$ 26,600,000

ARIAD [Member]

Royalty Guarantees, Commitments, Amount

$ 100,000,000

200,000,000

ARIAD [Member] | Tranche 1 [Member]

ARIAD [Member] | Tranche 3 [Member]

50,000,000

Cash payment for purchase of royalty right

$ 100,000,000

AcelRx [Member]

Long-Duration Contracts, Assumptions by Product and Guarantee, Discount Rate

$ 65,000,000

13.40%

Fair Value Measurements, Sensitivity Analysis, Description

Should this discount rate increase or decrease by 2.5%, the fair value of this asset could decrease by $9.8 million or increase by $12.1 million, respectively. Should the expected royalties increase or decrease by 2.5%, the fair value of the asset could increase or decrease by $1.9 million, respectively

Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount

$ 75,100,000

$ 75,100,000

Percentage of royalty acquired

75.00%

Kybella [Member]

Long-Duration Contracts, Assumptions by Product and Guarantee, Discount Rate

$ 9,500,000

14.40%

Fair Value Measurements, Sensitivity Analysis, Description

Should this discount rate increase or decrease by 2.5%, the fair value of this asset could decrease by $0.3 million or increase by $0.3 million, respectively. Should the expected royalties increase or decrease by 2.5%, the fair value of the asset could increase or decrease by $0.1 million, respectively

Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Amount

$ 2,800,000

2,800,000

Maximum amount of additional funds, upon attainment of milestones

$ 1,000,000

CareView [Member]

Interest revenue

$ 700,000

[1]	unaudited
[2]	Note 1

Fair Value Measurements (Financial Instruments Measured at Fair Value on a Recurring Basis) (Detail) - USD ($)
$ in Thousands

Mar. 31, 2018

Jan. 06, 2018

Dec. 31, 2017

Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

$ 341,691

^[1]

$ 349,223

^[2]

664,576

771,663

Business Combination, Contingent Consideration, Liability, Noncurrent

100

Financial liabilites:

41,400

^[1]

$ 640

42,000

^[1]

Liabilities, Fair Value Disclosure, Recurring

41,400

42,000

Money Market Funds [Member]

Cash and Cash Equivalents, Fair Value

322,785

417,563

Equity Securities [Member]

Available for Sale Securities, Fair Value

4,848

Fair Value Level 1 [Member]

Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Financial and Nonfinancial Liabilities, Fair Value Disclosure

Fair Value Level 1 [Member] | Money Market Funds [Member]

322,785

422,411

Cash and Cash Equivalents, Fair Value

322,785

417,563

Fair Value Level 1 [Member] | Equity Securities [Member]

Available for Sale Securities, Fair Value

4,848

Fair Value Level 2 [Member]

Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Financial and Nonfinancial Liabilities, Fair Value Disclosure

100

Fair Value Level 2 [Member] | Money Market Funds [Member]

100

Cash and Cash Equivalents, Fair Value

Fair Value Level 2 [Member] | Equity Securities [Member]

Available for Sale Securities, Fair Value

Fair Value Level 3 [Member]

Fair Value Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Financial and Nonfinancial Liabilities, Fair Value Disclosure

41,400

42,000

341,691

349,223

341,691

349,223

Business Combination, Contingent Consideration, Liability, Noncurrent

Financial liabilites:

$ 41,400

$ 42,000

[1]	unaudited
[2]	Note 1

Fair Value Measurements (Schedule of Fair Value of Assets and Liabilities not Subject to Fair Value Recognition) (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Assets
Notes receivable, Carrying Value	$ 70,811	$ 70,737
Notes receivable, Fair Value	72,700	71,300
Liabilities:
Convertible Notes Payable, Carrying Value	119,166	243,481
February 2018 Notes [Member]
Liabilities:
Convertible Notes Payable, Carrying Value		126,066
December 2021 Notes [Member]
Liabilities:
Convertible Notes Payable, Carrying Value	119,166	117,415
Wellstat Note Receivable [Member]
Assets
Notes receivable, Carrying Value	50,191	50,191
Hyperion [Member]
Assets
Notes receivable, Carrying Value	1,200	1,200
CareView [Member]
Assets
Notes receivable, Carrying Value	19,420	19,346
Fair Value Level 2 [Member]
Liabilities:
Notes payable, Fair Value	146,438	274,159
Fair Value Level 2 [Member] \| February 2018 Notes [Member]
Liabilities:
Notes payable, Fair Value		126,131
Fair Value Level 2 [Member] \| December 2021 Notes [Member]
Liabilities:
Notes payable, Fair Value	146,438	148,028
Fair Value Level 2 [Member] \| Hyperion [Member]
Assets
Notes receivable, Fair Value	0	0
Fair Value Level 2 [Member] \| CareView [Member]
Assets
Notes receivable, Fair Value	0	0
Fair Value Level 3 [Member]
Assets
Notes receivable, Fair Value	72,712	71,258
Fair Value Level 3 [Member] \| Wellstat Note Receivable [Member]
Assets
Notes receivable, Fair Value	52,412	51,308
Fair Value Level 3 [Member] \| Hyperion [Member]
Assets
Notes receivable, Fair Value	1,200	1,200
Fair Value Level 3 [Member] \| CareView [Member]
Assets
Notes receivable, Fair Value	$ 19,100	$ 18,750

Fair Value Measurements Level 3 Unobservable Input Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017	Dec. 31, 2017
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Change in fair value of acquired royalty rights, Level 3 Rollforward	$ 11,091	$ 13,146
Payments for (Proceeds from) Productive Assets	(18,623)	(13,494)
Change in fair value included in earnings for liabilities	600	$ (1,442)
Contingent Consideration [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Fair Value, Measurement with Unobservable Inputs Reconciliations, Recurring Basis, Liability Value	(41,400)		$ (42,000)
Change in fair value of acquired royalty rights	600
Royalty right [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	349,223
Change in fair value of acquired royalty rights, Level 3 Rollforward	11,091
Ending balance	341,691
Payments for (Proceeds from) Productive Assets	(18,623)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	(7,532)
Depomed [Member] \| Royalty right [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	232,038
Ending balance	222,608
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	(9,430)
VB [Member] \| Royalty right [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	14,380
Ending balance	14,517
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	137
University of Michigan [Member] \| Royalty right [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	26,769
Ending balance	26,582
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	(187)
AcelRx [Member] \| Royalty right [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	72,894
Ending balance	75,131
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	2,237
Avinger [Member] \| Royalty right [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	396
Ending balance	101
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	(295)
Kybella [Member] \| Royalty right [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	2,746
Ending balance	2,752
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Gain (Loss) Included in Earnings	$ 6

Cash Equivalents and Investments (Narrative) (Detail) - USD ($)

3 Months Ended

12 Months Ended

Mar. 31, 2018

Dec. 31, 2017

Mar. 31, 2017

Dec. 31, 2016

Cash and Cash Equivalents [Abstract]

Unrealized Gain (Loss) on Investments

^[1]

$ 0

$ 1,200,000

Gains (losses) on sales of available-for-sale securities

$ 800,000

$ 0

[1]

unaudited

Cash Equivalents and Investments (Summary of Cash and Available-For-Sale Securities) (Detail) - USD ($)
$ in Thousands

Mar. 31, 2018

Dec. 31, 2017

Mar. 31, 2017

^[2]

Dec. 31, 2016

^[3]

Schedule of Available-For-Sale Securities [Line Items]

Cash, Cash Equivalents and Available-for-Sale Securities, Fair Value

$ 405,078

$ 530,619

405,078

532,114

405,078

^[1],[2]

527,266

^[3]

$ 314,327

$ 147,154

Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax

^[1]

4,848

^[3]

1,495

Cash [Member]

Schedule of Available-For-Sale Securities [Line Items]

Cash, Cash Equivalents and Available-for-Sale Securities, Fair Value

82,293

109,703

82,293

109,703

82,293

109,703

Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax

Money Market Funds [Member]

Schedule of Available-For-Sale Securities [Line Items]

Cash, Cash Equivalents and Available-for-Sale Securities, Fair Value

322,785

417,563

322,785

417,563

322,785

417,563

Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax

$ 0

Equity Securities [Member]

Schedule of Available-For-Sale Securities [Line Items]

Cash, Cash Equivalents and Available-for-Sale Securities, Fair Value

3,353

4,848

Available-for-sale Debt Securities, Accumulated Gross Unrealized Gain, before Tax

4,848

$ 1,495

[1]	unaudited
[2]	unaudited
[3]	Note 1

Notes Receivable and Other Long-term Receivables (Narrative) (Detail)
$ / shares in Units, $ in Thousands, shares in Millions

1 Months Ended

3 Months Ended

12 Months Ended

58 Months Ended

Sep. 21, 2017

USD ($)

Feb. 14, 2017

USD ($)

Feb. 09, 2017

USD ($)

Feb. 06, 2017

USD ($)

Dec. 30, 2016

USD ($)

Jul. 16, 2016

$ / shares

Sep. 22, 2015

USD ($)

Jun. 26, 2015

USD ($)

$ / shares

Nov. 10, 2014

USD ($)

Nov. 05, 2013

USD ($)

Oct. 03, 2013

USD ($)

Aug. 15, 2013

USD ($)

Jan. 31, 2013

USD ($)

Mar. 31, 2018

USD ($)

Mar. 31, 2017

USD ($)

Dec. 31, 2013

USD ($)

Apr. 30, 2018

Feb. 02, 2018

$ / shares

Dec. 31, 2017

USD ($)

Nov. 14, 2016

USD ($)

Sep. 29, 2016

$ / shares

Sep. 12, 2016

USD ($)

$ / shares

Jul. 15, 2016

USD ($)

Dec. 31, 2015

USD ($)

$ / shares

Dec. 15, 2015

USD ($)

Oct. 07, 2015

$ / shares

Sep. 29, 2015

USD ($)

May 12, 2015

USD ($)

Nov. 09, 2014

Sep. 30, 2014

USD ($)

Apr. 01, 2014

USD ($)

Nov. 06, 2013

USD ($)

Jun. 28, 2013

USD ($)

Mar. 05, 2013

USD ($)

Nov. 02, 2012

USD ($)

Jan. 27, 2012

USD ($)

Accounts Notes And Loans Receivable [Line Items]

Premiums, Percentage Assumed to Net

1.00%

Investment Warrants, Exercise Price | $ / shares

$ 0.01

Repayment of notes receivable

$ 0

$ 7,890

Accounts Receivable, Net, Noncurrent

^[1]

1,400

Investment Owned, Balance, Shares | shares

1.7

Investment Owned, at Cost

6,600

Commitments and Contingencies

^[1]

^[2]

$ 500

$ 8,500

Equity investment, shares held (shares) | shares

4.4

Wellstat Diagnostics [Member]

100

$ 29

Accounts Notes And Loans Receivable [Line Items]

Gain Contingency, Unrecorded Amount

$ 53,900

55,800

Financing Receivable, Net

50,200

Accounts Notes And Loans Receivable [Line Items]

5.00%

Avinger [Member]

Repayment of notes receivable

$ 21,400

LENSAR [Member]

Accounts Notes And Loans Receivable [Line Items]

$ 40,000

$ 42,000

Amount company has agreed to advance under agreement

15.50%

18.50%

$ 60,000

Alphaeon [Member]

Accounts Notes And Loans Receivable [Line Items]

Investment estimated fair value, per share | $ / shares

$ 3.84

DirectFlow [Member]

Accounts Notes And Loans Receivable [Line Items]

Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down

$ 1,000

$ 1,500

$ 35,000

$ 51,100

Proceeds from Sale of Other Assets

$ 700

$ 500

$ 7,000

Amount company has agreed to advance under agreement

13.50%

15.50%

$ 15,000

$ 50,000

Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares

$ 0.01

Hyperion [Member]

Accounts Notes And Loans Receivable [Line Items]

Number of payments to be received

$ 2,300

Periodic contractual payments

$ 1,200

kaleo Note Receivable [Member]

Accounts Notes And Loans Receivable [Line Items]

Repayment of notes receivable

$ 150,000

$ 141,700

CareView [Member]

Accounts Notes And Loans Receivable [Line Items]

Amount company has agreed to advance under agreement

13.50%

$ 40,000

Tranche 1 of note receivable

20,000

Tranche 2 of note receivable

$ 20,000

Class of Warrant or Right, Number of Securities Called by Warrants or Rights | shares

4.4

Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares

$ 0.45

$ 0.03

$ 0.40

Credit Agreement [Member] | Wellstat Diagnostics [Member]

$ 100

Accounts Notes And Loans Receivable [Line Items]

Credit agreement, stated interest rate (in Percent)

$ 40,000

5.00%

Proceeds received under remedies available for borrower's breach of terms credit agreement

$ 8,100

Amount company has agreed to advance under agreement

$ 8,700

Financing Receivable, Modifications, Post-Modification Recorded Investment

$ 44,100

Credit Agreement [Member] | LENSAR [Member]

Accounts Notes And Loans Receivable [Line Items]

Amount company has agreed to advance under agreement

$ 2,800

Initial Loan [Member] | Wellstat Diagnostics [Member]

Accounts Notes And Loans Receivable [Line Items]

Financing Receivable, Modifications, Pre-Modification Recorded Investment

33,700

Additional Loan [Member]

Accounts Notes And Loans Receivable [Line Items]

Commitments and Contingencies

$ 800

Additional Loan [Member] | Wellstat Diagnostics [Member]

Accounts Notes And Loans Receivable [Line Items]

Additional Loan [Member] | LENSAR [Member]

$ 1,300

Accounts Notes And Loans Receivable [Line Items]

Amount company has agreed to advance under agreement

$ 20,000

Royalty Agreement [Member] | Avinger [Member]

Accounts Notes And Loans Receivable [Line Items]

Reduction in royalty rate (in percent)

50.00%

Term loan and interest [Member] | Wellstat Diagnostics [Member]

Accounts Notes And Loans Receivable [Line Items]

Financing Receivable, Modifications, Pre-Modification Recorded Investment

1,300

Forbearance principal and interest [Member] | Wellstat Diagnostics [Member]

Accounts Notes And Loans Receivable [Line Items]

Financing Receivable, Modifications, Pre-Modification Recorded Investment

$ 9,100

Tranche three [Member] | DirectFlow [Member]

Accounts Notes And Loans Receivable [Line Items]

Accrued liabilities, amounts received in advance of revenue recognition

$ 5,000

[1]	unaudited
[2]	Note 1

Accrued Liabilities (Narrative) (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Sales Allowances and Accruals [Abstract]
Discount and Distribution Fees	$ 3,072	$ 3,422
Government rebates and chargebacks	6,837	8,709
Assistance and Other Discounts	4,078	4,178
Product return	3,876	3,304
Accrued liabilities, amounts received in advance of revenue recognition	$ 17,863	$ 19,613

Accrued Liabilities (Accrued Liabilities) (Detail) - USD ($)
$ in Thousands

Mar. 31, 2018

Dec. 31, 2017

Payables and Accruals [Abstract]

Compensation

$ 5,178

$ 6,043

Interest

1,375

2,451

Dividend payable

Legal

646

595

17,863

19,613

Customer Refundable Fees

268

647

Customer Advances, Current

415

3,198

Other

7,343

3,514

Total

40,138

^[1]

45,881

^[2]

Deferred Revenue, Current

$ 6,971

$ 9,741

[1]	unaudited
[2]	Note 1

Commitments and Contingencies (Narrative) (Detail) - USD ($)
$ in Thousands

3 Months Ended

Sep. 21, 2017

Mar. 31, 2018

Mar. 31, 2017

Dec. 31, 2017

Jul. 03, 2017

Nov. 22, 2016

Jul. 01, 2016

Jun. 29, 2016

Nov. 20, 2015

Feb. 12, 2014

Premiums, Percentage Assumed to Net

Purchase Obligation

$ 1,100

1.00%

Proceeds from Collection of Notes Receivable

$ 7,890

Accounts Receivable, Net, Noncurrent

^[1]

1,400

Total lease payments for the duration of the guarantee

42,300

Accrued lease liability

10,700

$ 10,700

Other Investments

$ 75,000

Guarantees, Fair Value Disclosure

$ 14,000

Anniversary payment

$ 89,000

Next twelve months [Member]

Next twenty-four months [Member] [Member]

Purchase Obligation

75,400

February 2018 Notes [Member]

Purchase Obligation

105,800

Debt Instrument, Unamortized Discount

$ 0

$ 381

$ 4,300

$ 3,100

$ 29,700

kaleo Note Receivable [Member]

Proceeds from Collection of Notes Receivable

$ 141,700

[1]

unaudited

Convertible Notes (Narrative) (Detail) $ / shares in Units, shares in Millions					3 Months Ended
	Nov. 21, 2016 USD ($)	Nov. 20, 2015 USD ($)	Feb. 11, 2014 USD ($)	Feb. 05, 2014 USD ($)	Mar. 31, 2018 USD ($) $ / shares shares	Mar. 31, 2017 USD ($)	Dec. 31, 2017 USD ($)	Nov. 22, 2016 USD ($) $ / shares	Feb. 12, 2014 USD ($)	Feb. 06, 2014 USD ($) $ / shares
Debt Instrument [Line Items]
Principal amount a $5 incentive cash payment per each to convert debt					$ 1,000
Convertible note rate conversion trading days (in days)					0
Convertible Notes rate conversion consecutive trading days (in days)					$ 30
Minimum conversion price percent for note conversion (in Percent)					130.00%
Interest Paid					$ 2,529,000	$ 2,529,000
Share Price \| $ / shares										$ 7.97
February 2018 Notes [Member]
Debt Instrument [Line Items]
Convertible notes					0		$ 126,066,000		$ 300,000,000
Debt instrument, interest rate (in Percent)									4.00%
Unamortized discount of liability component		$ (3,100,000)			$ 0		(381,000)	$ (4,300,000)	$ (29,700,000)
Deferred issuance costs		900,000						1,300,000
Purchase call option unwind		270,000
Warrant unwind		170,000
Fees and Commissions, Transfer Agent		100,000
Debt discount recorded to additional paid in capital									19,300,000
Debt discount recorded to deferred tax liability									$ 10,400,000
Minimum conversion price percent for note conversion (in Percent)					130.00%
Maximum percent of common stock closing price and conversion rate to convert note (in Percent)					98.00%
Debt Instrument, Interest Rate, Effective Percentage									6.90%
Estimated market interest rate for similar nonconvertible instrument									7.00%
Net proceeds from the issuance of convertible notes			$ 290,200,000
Debt Instrument, Repurchase Amount		53,600,000						120,000,000
Debt instrument, repurchase amount paid		43,700,000						121,500,000
Interest Paid	$ 1,500,000
Debt Instrument, Face Amount					$ 0		126,447,000
Gain on conversion of convertible notes		(6,500,000)
February 2018 Note Warrant [Member]
Debt Instrument [Line Items]
Convertible notes, conversion price (in Dollars per Share) \| $ / shares					$ 10.3610
Proceeds from Issuance of Warrants				$ 11,400,000
December 2021 Notes [Member]
Debt Instrument [Line Items]
Convertible notes		$ 150,000,000			$ 119,166,000		117,415,000	$ 150,000,000
Debt instrument, interest rate (in Percent)								2.80%
Unamortized discount of liability component					$ (30,834,000)		(32,585,000)	$ (4,300,000)
Debt discount recorded to additional paid in capital								23,800,000
Debt discount recorded to deferred tax liability								$ 12,800,000
Maximum percent of common stock closing price and conversion rate to convert note (in Percent)					98.00%
Debt Instrument, Interest Rate, Effective Percentage								3.40%
Convertible notes, conversion price (in Dollars per Share) \| $ / shares								$ 3.81
Estimated market interest rate for similar nonconvertible instrument								9.50%
Debt instrument, convertible, remaining amortization period (in Duration)					3 years 8 months 6 days
Net proceeds from the issuance of convertible notes	$ 145,700,000
Debt Instrument, Face Amount					$ 150,000,000		$ 150,000,000
Conversion Rate per $1,000 Principal Amount (in Ratio)	262.2951
Proceeds from Issuance of Warrants	$ 14,400,000
February 2018 Note Purchase Call Option [Member]
Debt Instrument [Line Items]
Purchased call options cost			31,000,000
Number of shares of common stock covered by the purchased call options purchased (in Shares) \| shares					13.8
Deferred taxes included in purchased call options cost			$ 10,800,000
Purchased Call Options [Member]
Debt Instrument [Line Items]
Convertible notes, conversion price (in Dollars per Share) \| $ / shares					$ 4.88
Series 2012 Notes [Member]
Debt Instrument [Line Items]
Convertible notes										$ 131,700,000

Convertible Notes (Summary of Convertible Notes) (Detail)		3 Months Ended
	Nov. 21, 2016	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Nov. 22, 2016 $ / shares	Feb. 12, 2014
Debt Instrument [Line Items]
Principal amount a $5 incentive cash payment per each to convert debt		$ 1,000
Convertible Notes Payable, Carrying Value		$ 119,166,000	$ 243,481,000
February 2018 Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage					4.00%
Convertible Notes, Maturity Date (Date)		Feb. 01, 2018
Convertible Notes, Principal Balance Outstanding		$ 0	126,447,000
Convertible Notes Payable, Carrying Value			126,066,000
December 2021 Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage				2.80%
Debt Instrument, Convertible, Conversion Ratio	262.2951
Convertible notes, conversion price (in Dollars per Share) \| $ / shares				$ 3.81
Convertible Notes, Maturity Date (Date)		Dec. 01, 2021
Convertible Notes, Principal Balance Outstanding		$ 150,000,000	150,000,000
Convertible Notes Payable, Carrying Value		$ 119,166,000	$ 117,415,000

Convertible Notes (Summary of Series 2012 Notes) (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Convertible Notes Payable, Carrying Value	$ 119,166	$ 243,481

Convertible Notes (Summary of May 2015 Notes) (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Convertible Notes Payable, Carrying Value	$ 119,166	$ 243,481

Convertible Notes Convertible Notes (Summary of February 2018 Notes) (Detail) (Details) - February 2018 Notes [Member] - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Nov. 22, 2016	Nov. 20, 2015	Feb. 12, 2014
Debt Instrument [Line Items]
Debt Instrument, Unamortized Discount	$ 0	$ (381)	$ (4,300)	$ (3,100)	$ (29,700)
Convertible notes	0	126,066			$ 300,000
Debt Instrument, Face Amount	$ 0	$ 126,447

Convertible Notes Convertible Notes (Interest Expense for February 2018 Notes) (Detail) (Details) - February 2018 Notes [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Debt Instrument [Line Items]
Contractual coupon interest	$ 421	$ 1,265
Amortization of debt issuance costs	88	249
Amortization of debt discount	293	848
Total	$ 802	$ 2,362

Convertible Notes Convertible Notes (Summary of December 2021 Notes) (Details) - December 2021 Notes [Member] - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017	Nov. 22, 2016	Nov. 20, 2015
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 150,000	$ 150,000
Debt Instrument, Unamortized Discount	(30,834)	(32,585)	$ (4,300)
Convertible notes	$ 119,166	$ 117,415	$ 150,000	$ 150,000

Convertible Notes Convertible Notes (Interest Expense for December 2021 Notes) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Debt Instrument [Line Items]
Debt Instrument, Convertible, Beneficial Conversion Feature	$ 1,598	$ (1,430)
December 2021 Notes [Member]
Debt Instrument [Line Items]
Contractual coupon interest	1,031	1,031
Amortization of debt issuance costs	19	18
Amortization of debt discount	134	130
Interest Expense, Debt	$ 2,782	$ 2,609

Other Long-Term Liabilities (Narrative) (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Schedule of Other Liabilities [Line Items]
Guarantor Obligations, Maximum Exposure, Undiscounted	$ 42,300
Accrued lease liability	$ 10,700	$ 10,700

Other Long-Term Liabilities (Other Long-Term Liabilities) (Detail) - USD ($)
$ in Thousands

Mar. 31, 2018

Dec. 31, 2017

Schedule of Other Liabilities [Line Items]

Accrued lease liability

$ 10,700

Accrued Bonuses

1,864

1,729

Uncertain tax position

30,948

30,682

Deferred Tax Liabilities, Net, Noncurrent

1,842

1,208

Dividends Payable

Liabilities, Other than Long-term Debt, Noncurrent

362

343

Total

$ 45,763

^[1]

$ 44,709

^[2]

[1]	unaudited
[2]	Note 1

Stock-Based Compensation (Summary of Stock Option and Restricted Stock Award Activity) (Detail) - $ / shares shares in Thousands	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Share Based Compensation Arrangment By Share Based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	38
Employee Stock Option [Member]
Share Based Compensation Arrangment By Share Based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	961	961
Restricted Stock Awards, Weighted Average Grant-date Fair Value, Granted (in Dollars per Share)	$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price	$ 3.21	$ 3.21
Restricted Stock [Member]
Share Based Compensation Arrangment By Share Based Payment Award [Line Items]
Restricted Stock Award, Number of Shares, Balance at beginning of period (in Shares)	2,305
Restricted Stock Awards, Number of Shares Granted (in Shares)	38
Restricted Stock Awards, Number of Shares, Balance at end of period (in Shares)	2,305
Restricted Stock Awards, Weighted Average Grant-date Fair Value, Balance at beginning of period (in Dollars per Share)	$ 2.68
Restricted Stock Awards, Weighted Average Grant-date Fair Value, Granted (in Dollars per Share)	2.74
Restricted Stock Awards, Weighted Average Grant-date Fair Value, Balance at end of period (in Dollars per Share)	2.68
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value	$ 2.74

Customer Concentration (Percentage of Total Revenue From Licenses Over 10% of Revenue) (Detail)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Kaleo [Member] \| Interest revenues [Member]
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	0.00%	10.00%
Elan [Member] \| Tysabri [Member]
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	7.00%	31.00%
Depomed [Member]
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	19.00%	14.00%
Noden [Member]
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	48.00%
Noden [Member] \| Tysabri [Member]
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage		28.00%
LENSAR [Member] \| Interest revenues [Member]
Revenue, Major Customer [Line Items]
Concentration Risk, Percentage	13.00%	0.00%

Income Taxes (Narrative) (Detail) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Narrative) (Detail) - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017
Investments, Owned, Federal Income Tax Note [Line Items]
Income Tax Expense	$ 1,019	$ 6,552
Federal income tax rate	21.00%
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions	$ 0	$ 800

Accumulated Other Comprehensive Income (Loss) (Schedule of Balances of Accumulated Other Comprehensive Income (Loss)) (Detail) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2018

Mar. 31, 2017

Dec. 31, 2017

Unrealized gains (losses) on available-for-sale securities

^[1]

$ 1,181

^[2]

$ (1,181)

$ 0

Other Comprehensive Income (Loss), Net of Tax

(1,181)

$ 0

Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]

AOCI Attributable to Parent [Member]

1,181

Other Comprehensive Income (Loss), Net of Tax

$ 1,181

$ (1,181)

[1]	Note 1
[2]	Net of tax of ($314) and zero for the three months ended March 31, 2018 and 2017, respectively

Subsequent Events (Narrative) (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions		3 Months Ended	4 Months Ended	12 Months Ended
	May 08, 2018	Mar. 31, 2018	May 08, 2018	Dec. 31, 2017
Subsequent Event [Line Items]
Stock Repurchased During Period, Shares		1.4		13.3
Treasury Stock Acquired, Average Cost Per Share		$ 2.97		$ 2.25
Stock Repurchased During Period, Value		$ 4.2		$ 30.0
Stock Repurchase Program, Remaining Authorized Repurchase Amount	$ 12.4		$ 12.4
Subsequent Event [Member]
Subsequent Event [Line Items]
Stock Repurchased During Period, Shares	2.8		4.2
Treasury Stock Acquired, Average Cost Per Share	$ 3.04
Stock Repurchased During Period, Value	$ 8.4		$ 12.6

Business Combinations (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended
	Jan. 08, 2018	May 13, 2017	May 11, 2017	Mar. 31, 2018	Mar. 31, 2017	Jan. 06, 2018	Dec. 31, 2017	Jul. 03, 2017	Jan. 20, 2017
Acquired Indefinite-lived Intangible Assets [Line Items]
Business Acquisition, Pro Forma Revenue				$ 38,518	$ 106,950
Business Combination, Consideration Transferred	$ 1,200
Anniversary payment								$ 89,000
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets						$ 2,760
Federal income tax rate				21.00%
Business Acquisition, Pro Forma Net Income (Loss)				$ 1,522	$ 53,466
Business Acquisition, Pro Forma Earnings Per Share, Basic				$ 0.01	$ 0.33
Business Acquisition, Pro Forma Earnings Per Share, Diluted				$ 0.01	$ 0.33
Accounts and Notes Receivable, Net				$ 70,800			$ 70,700
Business Combination, Step Acquisition, Equity Interest in Acquiree, Fair Value			$ 31,700
LENSAR [Member]
Acquired Indefinite-lived Intangible Assets [Line Items]
Business Combination, Consideration Transferred		$ 31,726
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets			58,323
Contractual Obligation									$ 2,800
Accounts and Notes Receivable, Net			43,900
Gain (Loss) on Investments		$ 9,300	$ 10,600

Business Combinations Proforma (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Business Combinations [Abstract]
Business Acquisition, Pro Forma Revenue	$ 38,518	$ 106,950
Business Acquisition, Pro Forma Net Income (Loss)	$ 1,522	$ 53,466
Business Acquisition, Pro Forma Earnings Per Share, Basic	$ 0.01	$ 0.33
Business Acquisition, Pro Forma Earnings Per Share, Diluted	$ 0.01	$ 0.33

Business Combinations Asset and Liabilities Acquired (Details) - USD ($)
$ in Thousands

Jan. 08, 2018

May 13, 2017

Jan. 06, 2018

May 11, 2017

Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill

$ 1,845

Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets

$ 2,760

Business Combination, Separately Recognized Transactions, Expenses and Losses Recognized

$ (10,615)

Business Combination, Consideration Transferred

$ 1,200

LENSAR [Member]