Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

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, 2017, 2016 and 2015 were as follow, in thousands of dollars:

	Year Ended December 31,
	2017			2016			2015
Current
Federal	$	18,288		$	544		$	624
State		3,822			78			42
Deferred
Federal		21,493			(39,898	)		—
State		(269	)		(1,576	)		—
Total	$	43,334		$	(40,852	)	$	666

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 of dollars:

	Year Ended December 31,
	2017			2016			2015
Income tax expense computed at U.S. Federal statutory tax rate	$	35,217		$	17,629		$	5,114
Permanent items		(2,311	)		715			601
State income taxes		2,714			(1,523	)		42
Change in valuation allowance		—			(56,019	)		(4,705	)
Uncertain income tax position		(1,137	)		143			533
Research and development credits		(2,196	)		(1,902	)		(979	)
Other		1,353			105			60
Deferred rate change		9,694			—			—
Income tax expense/ (benefit)	$	43,334		$	(40,852	)	$	666

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 of dollars:

	As of December 31,
	2017			2016
Deferred tax assets:
Net operating loss carryforward	$	5,072		$	24,926
Deferred rent credit		211			417
Accrued compensation and non-qualified stock options		7,090			8,128
Deferred financing costs		—			128
Depreciation and amortization		2,073			706
Research and development credits		3,795			7,119
Capitalized overhead into inventory (UNICAP §263A)		480			1,086
Nonrecourse liability related to sale of future royalties		6,377			11,223
Other		645			878
AMT credit		1,613			1,581
Accrued sales deductions		8,449			—
Net deferred tax asset		35,805			56,192
Deferred tax liability:
Debt discount on convertible notes		—			(141	)
Infringement legal cost		(10,557	)		(13,899	)
Depreciation		(264	)		(423	)
Section 481(a)		(4,141	)		—
Net deferred taxes	$	20,843		$	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 of dollars:

	Year Ended December 31,
	2017			2016			2015
Balance as of January 1	$	9,299		$	9,341		$	8,964
Gross increases (decreases) related to prior-year tax positions		947			—			(5	)
Gross increases related to current-year tax positions		1,178			662			646
Gross decreases related to prior-year tax positions		—			(375	)		—
Gross decreases related to current-year tax positions		—			(169	)		(243	)
Change in tax rates		(2,565	)		(160	)		(21	)
Balance as of December 31	$	8,859		$	9,299		$	9,341