Contingently Issuable Common Stock

3 Months Ended

Mar. 31, 2012

Business Combinations [Abstract]

Contingently Issuable Common Stock

Contingently Issuable Common Stock

On December 10, 2010 (the “Closing Date”), the Company completed its acquisition of Nellix, Inc., a pre-revenue, AAA medical device company. The purchase price consisted of 3.2 million of the Company's common shares, issuable to the former Nellix stockholders as of the Closing Date, then representing a value of $19.4 million. Additional payments, solely in the form of the Company's common shares (the “Contingent Payment”), will be made upon the achievement of a revenue milestone and a regulatory approval milestone (collectively, the “Nellix Milestones”).

The ultimate value of the Contingent Payment will be determined on the date that each Nellix Milestone is achieved, using an applicable per share price, which is subject to a floor, and/or ceiling. Accordingly, there are a maximum of 10.2 million shares issuable upon the achievement of the Nellix Milestones.

As of the Closing Date, the fair value of the Contingent Payment was estimated to be $28.2 million. At March 31, 2012, the Company's stock price closed at $14.65 per share. Thus, had the Nellix Milestones been achieved on March 31, 2012, the Contingent Payment would have comprised 4.2 million shares, representing a value of $61.9 million.

The value of the Contingent Payment is derived using a discounted income approach model, with a range of probabilities and assumptions related to the timing and likelihood of achievement of the Nellix Milestones (which include Level 3 inputs - see Note 2(vii)) and the Company's stock price (Level 1 input) as of the balance sheet date. These varying probabilities and assumptions and changes in the Company's stock price have required fair value adjustments of the Contingent Payment in periods subsequent to the Closing Date.

The Company's per share price of its common stock increased by $3.17, or 28%, between December 31, 2011 and March 31, 2012. This increase in the value of the Company's common stock was the primary driver affecting the increase in fair value of the Contingent Payment during the three months ended March 31, 2012.

The Contingent Payment fair value will continue to be evaluated on a quarterly basis until milestone achievement occurs, or until the expiration of the "earn-out period," as defined within the Nellix purchase agreement. Adjustments to the fair value of the Contingent Payment are recognized in the Condensed Consolidated Statements of Operations.

	Fair Value of Contingently Issuable Common Stock
December 31, 2011	$	38,700
Fair value adjustment of Contingent Payment during the period	12,450
March 31, 2012	$	51,150