Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of summary of the income tax expense (benefit)

The significant components of income tax are as follows (dollars in thousands):

	Years Ended December 31,
	2019			2018			2017
Current
Federal	$	29,333		$	26,772		$	18,288
State	10,930			5,621			3,822
Deferred
Federal	(4,551		)	(2,450		)	21,493
State	(1,281		)	(760		)	(269		)
Total income tax expense	$	34,431		$	29,183		$	43,334

Schedule of reconciliation of income tax expense at the U.S Federal statutory income tax rate to the entity's effective income tax rate

A reconciliation of income tax expense at the U.S. federal statutory income tax rate to annual income tax expense at the Company's effective tax rate is as follows (dollars in thousands):

	Years Ended December 31,
	2019			2018			2017
Income tax expense computed at U.S. federal statutory income tax rate	$	30,972		$	29,437		$	35,217
State income taxes	7,543			3,674			2,714
Permanent items	1,332			(2,196		)	(2,311		)
Research and development credits	(2,071		)	(3,199		)	(2,196		)
Uncertain income tax position	(2,992		)	716			(1,137		)
Effect of U.S. tax law change(1)	—			—			9,694
Other	(353		)	751			1,353
Income tax expense	$	34,431		$	29,183		$	43,334

⁽¹⁾ Due to the 2017 Tax Cuts and Job Act, which lowered the U.S. Corporate income tax rate from 35% to 21% effective January 1, 2018. As a result, existing deferred taxes were remeasured.

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

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

	As of December 31,
	2019			2018
Deferred tax assets:
Convertible bond hedge	$	17,197		$	21,412
Accrued product returns and rebates	15,123			13,205
Accrued compensation and stock based compensation	10,349			8,218
Non-recourse liability related to sale of future royalties	5,320			5,571
Research and development credit carryforwards	3,817			3,817
Amortization of intangibles	4,617			3,289
Net operating loss carryforwards	2,245			2,900
Operating lease liability	8,187			—
Inventory	1,385			499
Alternative Minimum Tax (AMT) credit	926			978
Other	199			1,268
Total deferred tax assets	69,365			61,157
Less: valuation allowance	(11		)	(9		)
Total deferred tax asset, net of valuation allowance	69,354			61,148
Deferred tax liability:
Debt discount on 2023 Notes	(14,109		)	(17,568		)
Patent infringement legal costs	(10,613		)	(10,697		)
Operating lease assets	(5,237		)	—
Depreciation	(2,778		)	(236		)
IRC Section 481(a) liability	(2,126		)	(2,964		)
Unrealized gain on marketable securities	(2,428		)	—
Total deferred tax liabilities	(37,291		)	(31,465		)
Net deferred tax assets	$	32,063		$	29,683

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 (dollars in thousands):

	Years Ended December 31,
	2019			2018			2017
Balance as of January 1	$	8,848		$	8,859		$	9,299
Gross increases related to current year tax positions	208			1,108			1,178
Gross increases related to prior year tax positions	—			—			947
Gross decreases related to prior year tax positions	(49		)	(484		)	—
Lapse of statute of limitations	(3,029		)	(635		)	—
Change in tax rates	—			—			(2,565		)
Balance as of December 31	$	5,978		$	8,848		$	8,859