2. Discontinued Operations - Sale of Commercial Business

Ipsen

As of March 31, 2017, the Commercial Business met all the conditions to be classified as held-for-sale and represents a discontinued operation since the disposal of the Commercial Business is a strategic shift that will have a major effect on the Company’s operations and financial results. The Company will not have further significant involvement in the operations of the discontinued Commercial Business. The operating results of the Commercial Business are reported as discontinued operations, net of tax in the consolidated statements of operations and comprehensive income (loss) for all periods presented. In addition, in the consolidated balance sheet as of December 31, 2016, the assets and liabilities held for sale have been presented separately. This change is reflected throughout the financial statements as appropriate.

As discussed in Note 1, “Nature of the Business and Summary of Significant Accounting Policies,” on April 3, 2017, the Company completed the sale of the Commercial Business to Ipsen. Pursuant to the Asset Sale Agreement, the Company may be entitled to up to $450.0 million in additional payments based on the achievement by or on behalf of Ipsen of certain milestone events if the U.S. Food and Drug Administration (the “FDA”) approves ONIVYDE for certain indications as follows: (i) $225.0 million upon the regulatory approval by the FDA of ONIVYDE for the first-line treatment of metastatic adenocarcinoma of the pancreas (a) in combination with fluorouracil and leucovorin (with or without oxaliplatin), (b) in combination with gemcitabine and abraxane or (c) following submission and filing of regulatory approval by Ipsen for purposes of commercialization by Ipsen; (ii) $150.0 million upon the regulatory approval by the FDA of ONIVYDE for the treatment of small cell lung cancer after failure of first-line chemotherapy; and (iii) $75.0 million upon the regulatory approval by the FDA of ONIVYDE for an additional indication unrelated to those described above.

Discontinued Operations and Assets Held for Sale

The consolidated financial statements for the years ended December 31, 2017, 2016 and 2015 reflect the operations of the Commercial Business as a discontinued operation. Discontinued operations for the years ended December 31, 2017, 2016 and 2015 includes the following:

(in thousands)	Years Ended December 31,
	2017			2016			2015
Revenues:
Product revenues, net	$	16,135		$	53,064		$	4,328
License and collaboration revenues		7,797			87,119			84,930
Other revenues		1,973			4,090			—
Total revenues		25,905			144,273			89,258
Costs and expenses:
Cost of revenues		3,890			6,912			46
Research and development expenses		3,002			51,352			39,955
Selling, general and administrative expenses		10,907			48,677			33,747
Restructuring expenses		9,535			146			—
Total costs and expenses		27,334			107,087			73,748
Other income and expenses:
Interest expense		(6,743	)		(21,196	)		(463	)
Gain on sale of Commercial Business		601,670			—			—
Income from discontinued operations	$	593,498		$	15,990		$	15,047
Income tax expense		(46,626	)		(13,224	)		(11,215	)
Total income from discontinued operations	$	546,872		$	2,766		$	3,832

The carrying value of the assets and liabilities of the Commercial Business classified as “Assets held for sale” in the consolidated balance sheets are as follows:

(in thousands)	December 31, 2016
Assets
Current assets:
Accounts receivable, net	$	17,194
Inventory		14,554
Prepaid expenses and other current assets		1,547
Total current assets held for sale		33,295
Property and equipment, net		1,553
Intangible assets, net		3,977
Goodwill		3,605
Total long-term assets held for sale		9,135
Liabilities
Current liabilities:
Accounts payable, accrued expenses and other		21,312
Deferred revenues		36,226
Total current liabilities held for sale		57,538
Deferred revenues, net of current portion		25,673
Total long-term liabilities held for sale		25,673

The Company has reclassified approximately $0.6 million of accounts payable, accrued expenses and other from continuing operations to discontinuing operations for the year ended December 31, 2016.