Fair value measurements

12 Months Ended

Dec. 31, 2014

Fair value measurements [Abstract]

Fair value measurements

4.Fair value measurements

  The following table represents the Company's fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis:

	At December 31, 2014
(in thousands)		Level 1		Level 2		Level 3		Total
Assets:
Investment in money market funds (1)		$	111,912	$	-	$	-	$	111,912
Total assets		$	111,912	$	-	$	-	$	111,912
Liabilities:
Contingent consideration		$	-	$	-	$	47,657	$	47,657
Total liabilities		$	-	$	-	$	47,657	$	47,657
	At December 31, 2013
(in thousands)		Level 1		Level 2		Level 3		Total
Assets:
Investment in money market funds (1)		$	37,701	$	-	$	-	$	37,701
Total assets		$	37,701	$	-	$	-	$	37,701
Liabilities:
Contingent price consideration		$	-	$	-	$	16,619	$	16,619
Total liabilities		$	-	$	-	$	16,619	$	16,619

(1) Included in cash and cash equivalents in accompanying consolidated balance sheets.

As of December 31, 2014 and 2013, the Company did not have any transfers between Level 1 and Level 2 assets or liabilities.

The fair value of contingent purchase consideration obligations are based on management's assessment of changes as a result of adjustments to the discount rates and updates in the assumed and actual achievement of future net sales for RSDL and HepaGam B, which are inputs that have no observable market (Level 3). For the years ended December 31, 2014 and 2013, the contingent purchase consideration obligation increased by $3.1 million and $735,000, respectively, primarily due to an adjustment to the actual and expected timing of RSDL and HepaGam B sales. This increase resulted in a charge that is classified in the Company's statement of operations as cost of product sales and contract manufacturing. In addition, contingent value rights increased for the year ended December 31, 2014 due to the acquisition of EV-035 series (see Note 3).

The following table is a reconciliation of the beginning and ending balance of the liabilities measured at fair value using significant unobservable inputs (Level 3) during the years ended December 31, 2014 and 2013.

(in thousands)
Balance at December 31, 2012	$	-
Expense (income) included in earnings		735
Settlements		(348	)
Purchases, sales and issuances		16,232
Transfers in/(out) of Level 3		-
Balance at December 31, 2013	$	16,619
Expense (income) included in earnings		3,133
Settlements		(1,579	)
Purchases, sales and issuances		29,484
Transfers in/(out) of Level 3		-
Balance at December 31, 2014	$	47,657

Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis, as documented above, from those measured at fair value on a nonrecurring basis. During the year ended December 31, 2014, the assets acquired and liabilities assumed as part of the Cangene and EV-035 molecules acquisitions (Note 3) and the evaluation of the IXINITY IPR&D asset for impairment (Note 9) were measured at fair value on a nonrecurring basis. For the year ended December 31, 2013, some of the Company's equipment was measured at fair value on a non-recurring basis (see Note 7), which is categorized as a Level 3 fair value measurement.