Fair value measurements

3 Months Ended

Mar. 31, 2015

Fair value measurements [Abstract]

Fair value measurements

3.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:

	March 31, 2015
(in thousands)		Level 1		Level 2		Level 3		Total
Assets:
Investment in money market funds (1)		$	119,063	$	-	$	-	$	119,063
Total assets		$	119,063	$	-	$	-	$	119,063
Liabilities:
Contingent consideration		$	-	$	-	$	48,454	$	48,454
Total liabilities		$	-	$	-	$	48,454	$	48,454
	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

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

For the periods ended March 31, 2015 and 2014, the Company did not have any transfers between Level 1 and Level 2 assets or liabilities.

The fair value of contingent purchase consideration obligations, which is included in the contingent consideration line of the Company's consolidated balance sheets, 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 three months ended March 31, 2015 and 2014, the contingent purchase consideration obligations increased by $0.8 million and $0.4 million, 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.

The fair value of contingent value rights obligations, which is included in the contingent consideration line of the Company's consolidated balance sheets, are based on management's assessment of certain development and regulatory milestones, along with updates in the assumed achievement of potential future net sales for EV-035, which are inputs that have no observable market (Level 3). For the three months ended March 31, 2015, the contingent value rights obligation increased by $0.8 million primarily due to the novation of DTRA contract, the estimated timing of achievement for certain development and regulatory milestones and the estimated timing of potential future sales of EV-035. This increase resulted in a charge that is classified in the Company's statement of operations as both selling, general and administrative and research and development expense.

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 three months ended March 31, 2015.

(in thousands)
Balance at December 31, 2014	$	47,657
Expense included in earnings		1,559
Settlements		(762	)
Purchases, sales and issuances		-
Transfers in/(out) of Level 3		-
Balance at March 31, 2015	$	48,454

Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a nonrecurring basis. During the three months ended March 31, 2015, the Company had no assets or liabilities that were measured at fair value on a nonrecurring basis. During the three months ended March 31, 2014, the assets acquired and liabilities assumed as part of the February 2014 acquisition of Cangene Corporation were measured at fair value on a nonrecurring basis.