3. Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Company's fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring and nonrecurring basis

In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company's financial assets that are required to be measured at fair value as of September 30, 2015 and December 31, 2014 (in thousands):

		As of September 30, 2015
		Level 1		Level 2		Level 3		Total
Money market fund and trust cash sweep investments (1)	$	26,365	$	-	$	-	$	26,365
Total assets	$	26,365	$	-	$	-	$	26,365
		As of December 31, 2014
		Level 1		Level 2		Level 3		Total
Money market fund and trust cash sweep investments (1)	$	26,297	$	-	$	-	$	26,297
Total assets	$	26,297	$	-	$	-	$	26,297

(1) The Company's money market and trust cash sweep investments are included in cash and cash equivalents within the Condensed Consolidated Balance Sheets.

The fair and carrying value of our debt instruments are detailed as follows (in thousands):

		As of September 30, 2015			As of December 31, 2014
		Fair		Carrying		Fair		Carrying
		Value		Value		Value		Value
4.25% Convertible Notes	$	85,686	$	102,956	$	-	$	-
Derivative liability		9,250		9,250		-		-
8.00% Convertible Notes		-		-		129,320		65,000
Contingent consideration		25,731		25,731		-		-
Treximet Secured Notes		174,427		209,987		167,114		220,000
Total	$	295,094	$	347,924	$	296,434	$	285,000

Rollforward of contingent consideration liabilities

For the Company's liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the nine months ended September 30, 2015 and during the year ended December 31, 2014 (in thousands):

Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

		September 30,		December 31,
		2015		2014
Derivative liability:
Beginning balance	$	-	$	-
Initial measurement of derivative liability		28,480		-
Remeasurement adjustments - gains included in earnings		(19,230)		-
Ending balance	$	9,250	$	-
Contingent consideration:
Beginning balance	$	-	$	-
Initial measurement of contingent consideration		29,327		-
Remeasurement adjustments - gains included in earnings		(3,596)		-
Ending balance	$	25,731	$	-