Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2014

The Company's assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability:



	As of June 30, 2014								As of December 31, 2013
Assets and Liabilities	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of June 30, 2014		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Balance as of December 31, 2013
	(in thousands)
Assets:
Money market	$	6,030	$	—	$	—	$	6,030	$	45,950	$	—	$	—	$	45,950
Total assets at fair value	$	6,030	$	—	$	—	$	6,030	$	45,950	$	—	$	—	$	45,950
Liabilities:
Contingent purchase price	$	—	$	—	$	360,780	$	360,780	$	—	$	—	$	302,363	$	302,363
Total liabilities at fair value	$	—	$	—	$	360,780	$	360,780	$	—	$	—	$	302,363	$	302,363

Fair Value Inputs, Quantitative Information

The following table provides quantitative information associated with the fair value measurement of the Company’s Level 3 inputs:



	Fair Value as of
	June 30, 2014		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(in thousands)
Targanta:
Contingent purchase price	$	5,885	Probability-adjusted discounted cash flow	Probability of success	20%
				Period in which milestone is expected to be achieved	2019
				Discount rate	11.3%
Incline:
Contingent purchase price	$	121,700	Probability-adjusted discounted cash flow	Probabilities of success	60% -90% (79%)
				Periods in which milestones are expected to be achieved	2015 - 2017
				Discount Rate	18%
ProFibrix:
Contingent purchase price	$	87,745	Probability-adjusted discounted cash flow	Probability of success	5% - 95% (91%)
				Periods in which milestones are expected to be achieved	2015 - 2017
				Discount rate	3.0% - 17.5%
Rempex:
Contingent purchase price: commercial milestone	$	97,050	Probability-adjusted discounted cash flow	Probability of success	11% - 95% (69%)
				Periods in which milestones are expected to be achieved	2014 - 2019
				Discount rate	1.5% - 4.38%
Contingent purchase price: sales milestone	$	9,100	Risk-adjusted revenue simulation	Probability of success	9% - 49% (18%)
				Periods in which milestone is expected to be achieved	2016 - 2022
				Discount rate	2% - 5.4%

Tenaxis:
Contingent purchase price	$	39,300	Probability-adjusted discounted cash flow	Probability of success	5% - 90% (83%)
				Periods in which milestones are expected to be achieved	2014 - 2026
				Discount rate	1% - 11%



	Fair Value as of
	December 31, 2013		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(in thousands)
Targanta:
Contingent purchase price	$	5,573	Probability-adjusted discounted cash flow	Probabilities of success	20%
				Period in which milestone is expected to be achieved	2019
				Discount rate	11.3%
Incline:
Contingent purchase price	$	115,890	Probability-adjusted discounted cash flow	Probabilities of success	60% - 85% (79%)
				Periods in which milestones are expected to be achieved	2013 - 2017
				Discount Rate	18%
ProFibrix:
Contingent purchase price	$	84,000	Probability-adjusted discounted cash flow	Probability of success	5% - 95% (91%)
				Periods in which milestones are expected to be achieved	2015 - 2017
				Discount rate	4.9% - 17.5%
Rempex:
Contingent purchase price: commercial milestone	$	87,900	Probability-adjusted discounted cash flow	Probability of success	11% - 95% (63%)
				Periods in which milestones are expected to be achieved	2014 - 2019
				Discount rate	1.5% - 4.38%
Contingent purchase price: sales milestone	$	9,000	Risk-adjusted revenue simulation	Probability of success	9% - 49% (18%)
				Periods in which milestones are expected to be achieved	2016 - 2022
				Discount rate	2% - 5.4%

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation

The changes in fair value of the Company's Level 3 contingent purchase price during the three and six months ended June 30, 2014 and 2013 were as follows:



	Three Months Ended June 30,					Six Months Ended June 30,
	2014		2013			2014		2013
	(in thousands)
Balance at beginning of period	304,627		105,807			302,363		18,971
Fair value of contingent purchase price with respect to Incline as of January 4, 2013	—		—			—		87,200
Fair value of contingent purchase price with respect to Tenaxis as of May 1, 2014	38,800		—			38,800		—
Fair value adjustment to contingent purchase prices included in net (loss) income.	17,353		(5,283		)	19,617		(5,647		)
Balance at end of period	$	360,780	$	100,524		$	360,780	$	100,524

- Definition

Tabular disclosure of the fair value measurement of liabilities using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets), and gains or losses recognized in other comprehensive income (loss) and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs) by class of liability.

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