Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2015

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 March 31, 2015								As of December 31, 2014
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 March 31, 2015		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, 2014
	(in thousands)
Assets:
Money market	$	6,031	$	—	$	—	$	6,031	$	6,030	$	—	$	—	$	6,030
Total assets at fair value	$	6,031	$	—	$	—	$	6,031	$	6,030	$	—	$	—	$	6,030
Liabilities:
Contingent purchase price	$	—	$	—	$	369,552	$	369,552	$	—	$	—	$	351,134	$	351,134
Total liabilities at fair value	$	—	$	—	$	369,552	$	369,552	$	—	$	—	$	351,134	$	351,134

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
	March 31, 2015		Valuation Technique	Unobservable Input	Range (Weighted Average)
	(in thousands)
Targanta:
Contingent purchase price	$	6,502	Probability-adjusted discounted cash flow	Probability of success	20%
				Period in which milestone is expected to be achieved	2019
				Discount rate	11%
Incline:
Contingent purchase price	$	128,650	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	$	90,500	Probability-adjusted discounted cash flow	Probability of success	5% - 100% (93%)
				Periods in which milestones are expected to be achieved	2015 - 2017
				Discount rate	0.1% - 27.0%
Rempex:
Contingent purchase price: commercial milestone	$	78,100	Probability-adjusted discounted cash flow	Probability of success	11% - 95% (63%)
				Periods in which milestones are expected to be achieved	2015 - 2020
				Discount rate	2.2% - 4.6%
Contingent purchase price: sales milestone	$	10,600	Risk-adjusted revenue simulation	Probability of success	9% - 49% (22%)
				Periods in which milestone is expected to be achieved	2016 - 2022
				Discount rate	1.5% - 4.5%

Tenaxis:



Contingent purchase price	$	37,200	Probability-adjusted discounted cash flow	Probability of success	5% - 100% (84%)
				Periods in which milestones are expected to be achieved	2015 - 2026
				Discount rate	2.4% - 24%
Annovation:
Contingent purchase price	$	18,000	Probability-adjusted discounted cash flow	Probability of success	8% - 50% (27%)
				Periods in which milestones are expected to be achieved	2015 - 2023
				Discount rate	2.2% - 5.4%



	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%
				Period in which milestone is 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%)
				Periods 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%)
				Periods 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%)
				Periods 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, 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 months ended March 31, 2015 and 2014 were as follows:



	Three Months Ended March 31,
	2015		2014
	(in thousands)
Balance at beginning of period	351,134		302,363
Fair value of contingent purchase price with respect to Annovation as of February 2, 2015	18,000		—
Fair value adjustment to contingent purchase prices included in net income (loss).	418		2,264
Balance at end of period	$	369,552	$	304,627

- 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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