Fair value measurements

6 Months Ended

Jun. 30, 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:

	June 30, 2015
(in thousands)		Level 1		Level 2		Level 3		Total
Assets:
Investment in money market funds (1)		$	111,624	$	-	$	-	$	111,624
Total assets		$	111,624	$	-	$	-	$	111,624
Liabilities:
Contingent consideration		$	-	$	-	$	36,835	$	36,835
Total liabilities		$	-	$	-	$	36,835	$	36,835
	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		$	-	$	-	$	41,086	$	41,086
Total liabilities		$	-	$	-	$	41,086	$	41,086

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

During the six months ended June 30, 2015, 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 lines 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 June 30, 2015, the contingent purchase consideration obligations decreased by $0.4 million. For the six months ended June 30, 2015, the contingent purchase consideration obligations increased by $0.4 million. For the three and six months ended June 30, 2014, the contingent purchase consideration obligations increased by $1.2 million and $1.6 million, respectively. The decreases and increases are primarily due to an adjustment to the actual and expected timing of RSDL and HepaGam B sales. These changes are 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 June 30, 2015, the contingent value rights obligation decreased by $0.4 million. For the six months ended June 30, 2015, the contingent value rights obligation increased by $0.4 million. These changes are primarily due to the novation of the DTRA contract, the estimated timing of achievement for certain development and regulatory milestones and the estimated timing of potential future sales of EV-035. The decreases and increases in the contingent consideration to Evolva 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. During the six months ended June 30, 2015, the Company received novation of the DTRA contract and paid the $4.0 million milestone to Evolva in the second quarter of 2015.

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 six months ended June 30, 2015.

(in thousands)
Balance at December 31, 2014	$	41,086
Expense included in earnings		751
Settlements		(5,002	)
Purchases, sales and issuances		-
Transfers in/(out) of Level 3		-
Balance at June 30, 2015	$	36,835

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. As of June 30, 2015, the assets acquired from and the contingent consideration to Evolva, which were measured at fair value on a non-recurring basis. As of June 30, 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.