Fair value measurements

12 Months Ended

Dec. 31, 2015

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, 2015
(in thousands)		Level 1		Level 2		Level 3		Total
Assets:
Investment in money market funds (1)		$	3,323	$	-	$	-	$	3,323
Total assets		$	3,323	$	-	$	-	$	3,323
Liabilities:
Contingent consideration		$	-	$	-	$	25,599	$	25,599
Total liabilities		$	-	$	-	$	25,599	$	25,599
	At December 31, 2014
(in thousands)		Level 1		Level 2		Level 3		Total
Assets:
Investment in money market funds (1)		$	8,069	$	-	$	-	$	8,069
Total assets		$	8,069	$	-	$	-	$	8,069
Liabilities:
Contingent price consideration		$	-	$	-	$	41,086	$	41,086
Total liabilities		$	-	$	-	$	41,086	$	41,086

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

As of December 31, 2015 and 2014, the Company did not have any transfers between Level 1 and Level 2 assets or liabilities.

In addition to the contingent consideration obligations to Evolva, the fair value of contingent consideration obligations changes as a result of management's assessment 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, 2015 and 2014, the contingent purchase consideration obligation decreased by $1.2 million and increased by $3.1 million, respectively. The decrease and increase are primarily due to an adjustment to the actual and expected timing and volume of RSDL and HepaGam B sales. The changes for RSDL and HepaGam b are classified in the Company's statement of operations as cost of product sales and contract manufacturing, within the Biodefense and Biosciences segments, respectively.

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, 2015 and 2014.

(in thousands)
Balance at December 31, 2013	$	16,619
Expense (income) included in earnings		3,133
Settlements		(1,579	)
Purchases, sales and issuances		22,913
Transfers in/(out) of Level 3		-
Balance at December 31, 2014	$	41,086
Expense (income) included in earnings		(10,599	)
Settlements		(5,693	)
Purchases, sales and issuances		805
Transfers in/(out) of Level 3		-
Balance at December 31, 2015	$	25,599

Separate disclosure is required for assets and liabilities measured at fair value on a recurring basis from those measured at fair value on a non-recurring basis. As of December 31, 2015, the EV-035 series of molecules IPR&D asset was measured at fair value on a non-recurring basis due to the toxicity issue. As of December 31, 2015, the assets acquired and liabilities assumed as part of the December 2014 acquisition of the EV-035 series of molecules were measured at fair value on a non-recurring basis. During the year ended December 31, 2014, the assets acquired and liabilities assumed as part of the February 2014 acquisition of Cangene Corporation and EV-035 series of molecules acquisitions (Note 3) and the evaluation of the IXINITY IPR&D asset for impairment (Note 9) were measured at fair value on a non-recurring basis.