3. Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2016

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, 2016 and December 31, 2015 (in thousands):

		As of September 30, 2016
		Level 1		Level 2		Level 3		Total
Money market fund and trust cash sweep investments (1)	$	-	$	-	$	-	$	-
Total assets	$	-	$	-	$	-	$	-
		As of December 31, 2015
		Level 1		Level 2		Level 3		Total
Money market fund and trust cash sweep investments (1)	$	4,367	$	-	$	-	$	4,367
Total assets	$	4,367	$	-	$	-	$	4,367

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

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

		As of September 30, 2016				As of December 31, 2015
		Fair		Carrying		Fair		Carrying
		Value		Value		Value		Value
4.25% Convertible Notes	$	31,350	$	102,953	$	68,637	$	99,776
Derivative liability		2,421		2,421		9,165		9,165
Contingent consideration		5,097		5,097		14,055		14,055
Treximet Secured Notes		144,797		184,635		179,518		202,050
Total	$	183,665	$	295,106	$	271,375	$	325,046

Fair Value Measurements Using Significant Unobservable Input (Tables)

For the Company's assets and 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 periods (in thousands).

		As of and for the		As of and for the
		Nine months Ended		Year Ended
		September 30, 2016		December 31, 2015
Derivative liability:
Balance at beginning of year	$	9,165	$	-
Initial measurement of derivative liability		-		28,480
Remeasurement adjustments - gains included in earnings		(6,744)		(19,315)
Ending balance	$	2,421	$	9,165
Contingent consideration:
Balance at beginning of year	$	14,055	$	-
Initial measurement of contingent consideration		-		14,193
Remeasurement adjustments - gains included in earnings		(8,958)		(138)
Ending balance	$	5,097	$	14,055