Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 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 December 31, 2014								As of December 31, 2013
	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Balance at December 31,		Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs		Balance at December 31,
Assets and Liabilities	(Level 1)		(Level 2)		(Level 3)		2014		(Level 1)		(Level 2)		(Level 3)		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	$	—	$	—	$	351,134	$	351,134	$	—	$	—	$	302,363	$	302,363
Total liabilities at fair value	$	—	$	—	$	351,134	$	351,134	$	—	$	—	$	302,363	$	302,363

Fair Value Inputs, Assets, 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
	December 31, 2014		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(in thousands)
Targanta:
Contingent purchase price	$	6,334	Probability-adjusted discounted cash flow	Probabilities of success	20%
				Periods in which milestones are expected to be achieved	2019
				Discount rate	11%
Incline:
Contingent purchase price	$	123,800	Probability-adjusted discounted cash flow	Probabilities of success	64% - 100% (83%)
				Periods in which milestones are expected to be achieved	2015-2018
				Discount Rate	18%
ProFibrix:
Contingent purchase price	$	88,600	Probability-adjusted discounted cash flow	Probability of success	5% - 95% (92%)
				Period in which milestones are expected to be achieved	2015 - 2017
				Discount rate	2.5% - 24.1%
Rempex:
Contingent purchase price: commercial milestone	$	80,800	Probability-adjusted discounted cash flow	Probability of success	11% -95% (63%)
				Period in which milestones are expected to be achieved	2015 - 2019
				Discount rate	1.5% - 3.7%
Contingent purchase price: sales milestone	$	10,900	Risk adjusted revenue simulation	Probability of success	9% - 49% (17%)
				Period in which milestones are expected to be achieved	2016 - 2022
				Discount rate	1.5% - 4.5%

Tenaxis:
Contingent purchase price	$	40,700	Probability-adjusted discounted cash flow	Probability of success	5% - 100% (84%)
				Periods in which milestones are expected to be achieved	2015 - 2026
				Discount rate	1% - 20%



	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%
				Periods in which milestones are expected to be achieved	2019
				Discount rate	11%
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%)
				Period 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%)
				Period 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%)
				Period 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 year ended December 31, 2014 and 2013 were as follows:



	December 31,
	2014		2013
	(in thousands)
Balance at beginning of period	$	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 ProFibrix as of August 5, 2013	—		82,550
Fair value of contingent purchase price with respect to Rempex as of December 3, 2013	—		96,700
Fair value of contingent purchase price with respect to Tenaxis as of May1, 2014	37,900		—
Fair value adjustment to contingent purchase price included in net income (loss)	10,871		16,942
Balance at end of period	$	351,134	$	302,363

- 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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