Fair Value Measurements

9 Months Ended

Sep. 30, 2011

Fair Value Measurements [Abstract]

Fair Value Measurements

(11) FAIR VALUE MEASUREMENTS

The Company measures certain financial assets and liabilities at fair value on a recurring basis, including available-for-sale fixed income securities and foreign currency derivatives. The tables below present the fair value of these financial assets and liabilities determined using the following input levels at September 30, 2011 and December 31, 2010.

		00000000000		00000000000		00000000000		00000000000
	Fair Value Measurements at September 30, 2011
	Total		Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents
Overnight deposits	$	36,493	$	36,493	$	0	$	0
Money market instruments		34,761		0		34,761		0
Total cash and cash equivalents	$	71,254	$	36,493	$	34,761	$	0
Available-for-sale securities
Short-term
Certificates of deposit	$	31,987	$	0	$	31,987	$	0
Commercial paper		39,685		0		39,685		0
Corporate securities		81,448		0		81,448		0
Long-term
Certificates of deposit		28,149		0		28,149		0
Corporate securities		69,073		0		69,073		0
U.S. Government agency securities		48,418		0		48,418		0
Total available-for-sale securities	$	298,760	$	0	$	298,760	$	0
Deferred compensation asset (1)		3,222		0		3,222		0
Forward foreign currency exchange contract asset (2)		1,538		0		1,538		0
Total assets	$	374,774	$	36,493	$	338,281	$	0
Liabilities:
Deferred compensation liability (3)	$	8,733	$	5,511	$	3,222	$	0
Forward foreign currency exchange contract liability (2)		926		0		926		0
Contingent acquisition consideration payable (4)		38,020		0		0		38,020
Asset retirement obligation (5)		2,947		0		0		2,947
Total liabilities	$	50,626	$	5,511	$	4,148	$	40,967

		000000000000000		000000000000000		000000000000000		000000000000000
	Fair Value Measurements at December 31, 2010
	Total		Quoted Price in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents
Overnight deposits	$	51,647	$	51,647	$	0	$	0
Money market instruments		36,432		0		36,432		0
Total cash and cash equivalents	$	88,079	$	51,647	$	36,432	$	0
Available-for-sale securities
Short-term
Certificates of deposit	$	29,845	$	0	$	29,845	$	0
Commercial paper		27,457		0		27,457		0
Corporate securities		80,186		0		80,186		0
U.S. Government agency securities		48,545		0		48,545		0
Long-term
Certificates of deposit		25,848		0		25,848		0
Corporate securities		72,329		0		72,329		0
U.S. Government agency securities		29,994		0		29,994		0
Total available-for-sale securities	$	314,204	$	0	$	314,204	$	0
Deferred compensation asset (1)		2,748		0		2,748		0
Forward foreign currency exchange contract asset (2)		1,496		0		1,496		0
Total assets	$	406,527	$	51,647	$	354,880	$	0
Liabilities:
Deferred compensation liability (3)	$	5,560	$	2,812	$	2,748	$	0
Forward foreign currency exchange contract liability (2)		1,673		0		1,673		0
Contingent acquisition consideration payable (4)		43,718		0		0		43,718
Total liabilities	$	50,951	$	2,812	$	4,421	$	43,718

(1) At September 30, 2011 and December 31, 2010, 96% and 97%, respectively, of the deferred compensation asset balance was included in other assets and the remainder of the balance was included in other current assets on the Company's Condensed Consolidated Balance Sheets.

(2) See Note 9 for further information regarding the Company's derivative instruments.

(3) At September 30, 2011 and December 31, 2010, 93% and 94%, respectively, of the deferred compensation liability balance was included in other long-term liabilities and the remainder was included in accounts payable and accrued liabilities on the Condensed Company's Consolidated Balance Sheets.

(4) At September 30, 2011 and December 31, 2010, 86% and 80%, respectively, of the contingent acquisition consideration payable was included in other long-term liabilities and 14% and 20%, respectively, was included in accounts payable and accrued liabilities.

(5) At September 30, 2011 the asset retirement obligation liability was included in other long-term liabilities.

The Company's level 2 securities are valued using third-party pricing sources, which generally use interest rates and yield curves observable at commonly quoted intervals of similar assets as observable inputs for pricing. See Note 5 for further information regarding the Company's financial instruments.

The Company's level 3 liabilities are estimated using a probability-based income approach utilizing an appropriate discount rate. Subsequent changes in the fair value of the contingent acquisition consideration payable, resulting from the revision of key assumptions, will be recorded in intangible asset amortization and contingent consideration on the Company's Condensed Consolidated Statements of Operations.

During the three and nine months ended September 30, 2011, the fair value of the contingent acquisition consideration payable decreased by $0.8 million and $5.7 million, respectively, due to changes in estimated probability and assumed timing of achievement of certain milestones and a $3.0 million development milestone payment to the former stockholders of Huxley Pharmaceuticals, Inc. Approximately $0.3 million of this change was recorded as a reduction to goodwill during the first quarter of 2011 due to an adjustment to the original assumptions related to the acquisition of LEAD Therapeutics, Inc. Key assumptions used by management to estimate the fair value of contingent acquisition consideration payable include assumed probabilities, timing of when a milestone may be attained and assumed discount periods and rates.

See Notes 5, 6 and 7, to the Company's Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2010 for additional discussion related to business acquisitions and contingent acquisition consideration payable.