Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Income Taxes

Schedule of components of the income tax (benefit)/ expense

The components of the income tax (benefit)/ expense for the years ended December 31, 2016, 2015 and 2014 were as follow, in thousands:

	Year Ended December 31,
	2016			2015		2014
Current
Federal	$	544		$	624	$	630
State		78			42		—
Deferred
Federal		(39,898	)		—		—
State		(1,576	)		—		—
Total	$	(40,852	)	$	666	$	630

Schedule of reconciliation of the expected income tax (benefit)/ expense computed using the federal statutory income tax rate to the entity's effective income tax rate

A reconciliation of the expected income tax (benefit)/ expense computed using the U.S. Federal statutory income tax rate to the Company's effective income tax rate is as follows, in thousands:

	Year Ended December 31,
	2016			2015			2014
Income tax expense/(benefit) computed at U.S. Federal statutory tax rate	$	17,629		$	5,114		$	(3,603	)
Permanent items		715			601			610
State income taxes		(1,523	)		42			(245	)
Change in valuation allowance		(56,019	)		(4,705	)		4,413
Uncertain income tax position		143			533			(329	)
Research and development credits		(1,902	)		(979	)		(535	)
Other		105			60			(125	)
Deferred rate change		—			—			444
Income tax (benefit)/expense	$	(40,852	)	$	666		$	630

Schedule of Significant components of the entity's deferred tax assets (liabilities)

The significant components of the Company's deferred income tax assets (liabilities) were as follow, in thousands:

	As of December 31,
	2016			2015
Deferred tax assets:
Net operating loss carryforward	$	24,926		$	34,610
Deferred rent credit		417			532
Accrued compensation and non-qualified stock options		8,128			5,886
Deferred financing costs		128			187
Depreciation and amortization		706			290
Research and development credits		7,119			5,529
Capitalized overhead into inventory (UNICAP §263A)		1,086			543
Nonrecourse liability related to sale of future royalties		11,223			11,526
Other		878			498
AMT credit		1,581			1,108
Valuation allowance		—			(60,090	)
Net deferred tax asset		56,192			619
Deferred tax liability:
Debt discount on convertible notes		(141	)		(509	)
Infringement legal cost		(13,899	)		—
Depreciation		(423	)		(110	)
Net deferred taxes	$	41,729		$	—

Schedule of reconciliation of the beginning and ending amount of gross unrecognized tax benefits

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows, in thousands:

	Year Ended December 31,
	2016			2015			2014
Balance as of January 1	$	9,341		$	8,964		$	9,828
Gross (decreases) increases related to prior-year tax positions		—			(5	)		18
Gross increases related to current-year tax positions		662			646			710
Gross decreases related to prior-year tax positions		(375	)		—			—
Gross decreases related to current-year tax positions		(169	)		(243	)		(1,057	)
Change in tax rates		(160	)		(21	)		(535	)
Balance as of December 31	$	9,299		$	9,341		$	8,964