Note 16 – Business Combinations and Other Strategic Investments

Hi-Tech Pharmacal Co., Inc.

On August 26, 2013, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) to acquire Hi-Tech Pharmacal Co., Inc., a Delaware corporation (“Hi-Tech”) for a total purchase price of approximately $640 million, calculated before considering the Hi-Tech cash the Company will assume through the acquisition, which will net against the total purchase price. As agreed to by the parties and subsequently approved by the shareholders of Hi-Tech, the Company will pay $43.50 per share for the outstanding common stock of Hi-Tech. The Merger Agreement will involve the merger of Hi-Tech with and into Akorn Enterprises, Inc., a wholly-owned subsidiary of the Company (the “Purchaser”), with Hi-Tech continuing as the surviving entity. The acquisition is expected to close early in the second quarter of 2014, following the required waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the “ HSR Act ”).

Hi-Tech is a specialty pharmaceutical company developing, manufacturing and marketing generic and branded prescription and over-the-counter (OTC) products. Hi-Tech specializes in difficult to manufacture liquid and semi-solid dosage forms and produces and markets a range of oral solutions and suspensions, as well as topical ointments and creams, nasal sprays, otics, sterile ophthalmics and sterile ointment and gels products. Hi-Tech’s Health Care Products division is a leading developer and marketer of OTC products. Hi-Tech's ECR Pharmaceuticals subsidiary markets branded prescription products.

The Hi-Tech acquisition is expected to complement and expand the Company’s product portfolio by diversifying its offering to its retail customers beyond ophthalmics to other niche dosage forms such as oral liquids, topical creams and ointments, nasal sprays and otics. The acquisition is also expected to enhance the Company’s new product pipeline. Further, the acquisition of Hi-Tech will add branded OTC products in the categories of cough & cold, nasals, and topicals to the Company’s existing TheraTears® brand of eye care products, and will provide additional domestic manufacturing capacity for the Company.

The Merger Agreement provides for the terms and conditions of the Merger. Subject to the terms and conditions of the Merger Agreement, upon completion of the Merger, each share of Hi-Tech’s common stock (the “Hi-Tech Stock ”), par value $0.01 (each a “ Hi-Tech Share ”), issued and outstanding immediately prior to such time, other than treasury shares of Hi-Tech and shares of Common Stock owned by Hi-Tech, Akorn, Purchaser or any other wholly-owned subsidiary of Akorn or Hi-Tech (each of which will be cancelled), and other than shares of Hi-Tech Stock as to which dissenters’ rights have been properly exercised, will be cancelled and converted into the right to receive $43.50 in cash (the “Merger Consideration”), without interest, less any applicable withholding taxes, upon surrender of the outstanding Hi-Tech Shares.

In addition, Hi-Tech is required to take all actions necessary to cause each outstanding option, restricted stock grant, restricted stock subject to vesting or similar rights to purchase or acquire Shares (“Stock Rights”), whether or not vested, to be canceled in exchange for the right to receive a cash payment equal to the Merger Consideration, less the applicable exercise price of such Stock Right and any applicable withholding taxes, if any.

Pursuant to the Merger Agreement, the parties have made certain customary representations, warranties and covenants to each other, including using reasonable best efforts to take, or cause to be taken, all actions and do all things necessary, proper or advisable to consummate and make effective the Merger and the other transactions contemplated thereby, including the satisfaction of each of the parties’ respective closing conditions set forth in the Merger Agreement. Hi-Tech has also agreed to various covenants, including, among other things and subject to certain exceptions, (i) to conduct its business in the ordinary course of business consistent with past practices during the period between the execution of the Merger Agreement and the effective date of the Merger and not to engage in certain transactions during such period, and (ii) not to solicit competing acquisition proposals or, subject to certain exceptions, enter into discussions concerning, or provide confidential information in connection with, any alternative acquisition proposal.

The completion of the Merger is subject to certain conditions, including, among others, (i) the expiration or termination of the applicable waiting periods under the HSR Act, as amended, (ii) subject to certain materiality exceptions, the accuracy of the representations and warranties made by Hi-Tech, the Company and Purchaser, respectively, (iii) compliance in all material respects by Hi-Tech, the Company and Purchaser with their respective obligations under the Merger Agreement, (iv) the absence of any change or effect that, individually or in the aggregate, has had a Material Adverse Effect or Purchaser Material Adverse Effect (as such terms are defined in the Merger Agreement) and (v) the absence of any order, injunction or decree or any statute, rule or regulation that prohibits or makes illegal the consummation of the Merger.

The Merger Agreement contains termination rights for Hi-Tech, Purchaser and the Company. The Merger Agreement provides that the Company will be required to pay Hi-Tech a termination fee of approximately $41.6 million if, on or prior to April 26, 2014, (i) the Merger Agreement is terminated by Hi-Tech as a result of a Financing Failure (as defined in the Merger Agreement) or (ii) the Merger Agreement is terminated as a result of a failure to obtain regulatory approval or clearance with respect to the HSR Act or other applicable antitrust laws. In certain circumstances, Akorn has the right to extend the date on which the Merger Agreement automatically terminates to May 26, 2014. In the event that Akorn exercises such right and the Merger Agreement is terminated after April 26, 2014 for either of the reasons set forth in the first sentence of this paragraph, Akorn will be required to pay Hi-Tech a termination fee of approximately $48.0 million.

The Merger Agreement also provides that Hi-Tech would be required to pay Akorn a termination fee of approximately $20.8 million under certain circumstances, including if (i) Hi-Tech terminated the Merger Agreement due to the receipt of an unsolicited superior proposal or Akorn or Purchaser terminates the Merger Agreement due to a Change of Recommendation (as defined in the Merger Agreement); provided however, if Akorn or Purchaser terminates the Merger Agreement, or Hi-Tech stockholders fail to approve the Merger, as a result of a Change of Recommendation related to an Intervening Event (as defined in the Merger Agreement), Hi-Tech will be required to pay a termination fee of $32.0 million, or (ii) (a) the Merger Agreement is terminated because Hi-Tech’s stockholders fail to approve the Merger or because of certain Company breaches of the Merger Agreement, (b) a third party publicly discloses or makes known to the Board of Directors a bona fide alternative acquisition proposal prior to such termination and (c) Hi-Tech enters into or consummates an alternative acquisition agreement within 12 months of the termination of the Merger Agreement.

The Company expects to fund the Hi-Tech acquisition through a $600.0 million term loan and the cash reserves on the balance sheet of Hi-Tech. The Company obtained a loan commitment from JP Morgan Chase Bank, N.A. (“JP Morgan”) for a $600 million term loan to finance the acquisition (the “JPM Term Loan”). As negotiated, the JPM Term Loan will mature in seven (7) years and accrue interest at a variable margin over either prime or LIBOR. Full or partial prepayments of principal will be allowed. JP Morgan completed syndication of the loan in the quarter ended December 31, 2013. The Company expect that the JPM Term Loan agreement will be signed after the Company receives FTC clearance for the Hi-Tech Acquisition and once a closing date has been agreed upon by the parties. The loan itself will take place upon closing the Hi-Tech Acquisition. (For further details regarding JP Morgan’s commitments to us regarding the JPM Term Loan and JPM Revolver, please refer to Exhibit 4 to the Company’s Schedule 13D filed with the SEC on September 5, 2013.)

During 2013, the Company capitalized $3.4 million in deferred financing fees related to the JPM Term Loan. These deferred financing fees, which will be amortized straight-line over the term of the JPM Term Loan, principally consist of fees charged by JPM and initial charges from Moody’s and Standard & Poor’s for establishing the Company’s credit ratings, as required by JPM in order to obtain the term loan. In addition, the Company recorded $1.6 million of acquisition-related expenses relation to the Hi-Tech acquisition, principally consisting of various legal fees.

Merck Products Acquisition – AzaSite, Cosopt and Cosopt PF

On November 15, 2013, the Company acquired from Merck the U.S. rights to three branded ophthalmic products for $52.8 million in cash (the “Merck Acquisition”). The acquired assets met the definition of a business, and accordingly, have been accounted for as a business combination in accordance with ASC 805 – Business Combinations. Through the Merck Acquisition, the Company purchased Inspire Pharmaceuticals, Inc., a wholly-owned subsidiary of Merck. This legal entity owns the U.S. rights to AzaSite, a prescription eye drop used to treat bacterial conjunctivitis. The U.S. rights to the other two products involved in the acquisition, Cosopt and Cosopt PF (preservative free), were purchased directly from Merck. The Cosopt products are prescription sterile eye drop solutions used to lower the pressure in the eye in people with open-angle glaucoma or ocular hypertension. The acquisition of these products expands the Company’s ophthalmic product portfolio to include branded, prescription eye drops, and is complementary to the Company’s existing portfolio of products. The Company believes that this acquisition leverages its existing sales force and ophthalmic and optometric physician relationships.

The following table sets forth the consideration paid for the Merck Acquisition and the fair values of the assets acquired and the liabilities assumed (in thousands):

Product rights:
AzaSite	$	13,800
Cosopt		21,600
Cosopt PF		20,300
Product rights total	$	55,700
Prepaid expenses		48
Deferred tax assets, net		759
Total fair value of acquired assets	$	56,507
Consideration paid	$	52,800
Gain from bargain purchase	$	3,707

Through its acquisition of Inspire Pharmaceuticals, Inc. the Company assumed that entity’s net operating loss carry-forwards (“NOLs”) and unamortized start-up costs. The deferred tax assets, net listed above represents the difference between the acquired deferred tax assets, the NOLs and unamortized start-up costs, and the acquired deferred tax liabilities, which represent the book versus tax basis differences in the product rights. The bargain purchase amount was largely derived from the difference between the fair value and the economic value, as calculated through discounted cash flow analysis, of the deferred tax assets, net. In particular, due to the long-term nature of the NOLs acquired, the book value of the resulting deferred tax asset significantly exceeded its discounted cash flow value.

The Company anticipates amortizing the acquired products on a straight-line basis from the Merck Acquisition date through December 31, 2019. The Merck Acquisition agreement specified the tax values assigned to each product. The tax value of AzaSite product rights will not be amortizable for tax purposes, as these rights were obtained through the stock acquisition of Inspire Pharmaceuticals, Inc. That Company anticipates that the assigned tax values of Cosopt and Cosopt PF will be amortizable for tax purposes over a 15-year period.

During the period from November 15, 2013 through December 31, 2013, the Company recorded revenue of $1.6 million and pre-tax income of $1.4 million related to sales of the products acquired through the Merck Acquisition. The Company has not provided pro forma revenue and earnings of the Company as if the Merck Acquisition was completed as of January 1, 2012 or 2013 because to do so would be impracticable. The products acquired from Merck were not managed as a discrete business by Merck. Accordingly, determining the pro forma revenue and earnings of the Company including the Merck Acquisition would require significant estimates of amounts, and it is impossible to distinguish objectively information about such estimates that (i) provides evidence of circumstances that existed on the dates at which those amounts would be recognized and measured, and (ii) would have been available when the financial statements for that prior period were issued.

Kilitch Acquisition

On February 28, 2012, Akorn India Private Limited (“AIPL”), a wholly owned subsidiary of the Company completed and closed on its acquisition of selected assets of Kilitch Drugs (India) Limited (“KDIL”). This acquisition (the “Kilitch Acquisition”) was pursuant to the terms of the Business Transfer Agreement (the “BTA”) entered into among the Company, KDIL and the members of the promoter group of KDIL on October 5, 2011. In accordance with terms contained in the BTA, the Company also closed on a related Product Transfer Agreement between the Company and NBZ Pharma Limited (“NBZ”), a company associated with KDIL. The primary asset transferred in the Kilitch Acquisition was KDIL’s manufacturing plant in Paonta Sahib, Himachal Pradesh, India, along with its existing book of business. KDIL was engaged in the manufacture and sale of pharmaceutical products for contract customers in India and for export to various unregulated world markets. While the Paonta Sahib manufacturing facility is not currently certified by the U.S. Food and Drug Administration (the “FDA”) for the exporting of drugs to the U.S., the facility was designed with future FDA certification in mind. Accordingly, the Kilitch Acquisition provided the Company with the potential for future expansion of its manufacturing capacity for products to be sold in the U.S., as well as the opportunity to expand the Company’s footprint into markets outside the U.S. The Company has determined that the assets acquired through the Kilitch Acquisition constitute a “business” as defined by Rule 11-01(d) of Regulation S-X and ASC 805, Business Combinations. Accordingly, the Company has accounted for the Kilitch Acquisition as a business combination.

AIPL paid the equivalent of approximately USD $60.1 million at closing. Total purchase consideration was approximately $55.2 million which consisted of approximately $51.2 million in base consideration and $4.0 million in reimbursement for capital expenditures made by KDIL from April 1, 2011 to the closing date. AIPL also paid $7.3 million related to compensation earned from the achievement of acquisition-related milestones, and $1.6 million in stamp duties paid to transfer title to the land and buildings at Paonta Sahib from Kilitch to AIPL. In addition, the Company expects to pay up to an additional $0.5 million for future services that would be expensed as the services are provided. The compensation for acquisition-related milestones and other acquisition costs have been recorded within “acquisition related costs” as part of operating expenses in the Company’s condensed consolidated statement of comprehensive income. The BTA also contains a working capital guarantee that calls for KDIL or AIPL to reimburse the other party for any shortfall or excess, respectively, in the actual acquired working capital compared to the target working capital as established in the BTA.

The following table sets forth the consideration paid for the Kilitch Acquisition, the acquisition-related costs incurred, and the fair values of the assets acquired and the liabilities assumed (U.S. dollar amounts in thousands):

Consideration:	Initial Fair Valuation			Changes in Estimate			Adjusted Fair Valuation
Cash paid	$	55,224					$	55,224
Less working capital shortfall refunded by sellers		(890	)		(138	)		(1,028	)
	$	54,334		$	(138	)	$	54,196

Acquisition-related costs:
Stamp duties paid for transfer of land and buildings	$	1,583					$	1,583
Acquisition-related compensation expense		6,741			511			7,252
Due diligence, legal, travel and other acquisition-related costs		557			119			676
	$	8,881		$	630		$	9,511

Recognized amounts of identifiable assets acquired and liabilities assumed:
Accounts receivable	$	2,130					$	2,130
Inventory		1,799						1,799
Land		3,714			(1,131	)		2,583
Buildings, plant and equipment		8,474						8,474
Construction in progress		14,231						14,231
Goodwill, deductible		21,609			1,004			22,613
Other intangible assets, deductible		5,806			102			5,908
Other assets		38						38
Assumed liabilities		(2,099	)		(779	)		(2,878	)
Deferred tax liabilities		(1,368	)		666			(702	)
	$	54,334		$	(138	)	$	54,196

The Adjusted Fair Valuation presented above is final. The changes in estimate recorded subsequent to the initial accounting estimate were primarily related to refining the calculated fair value of certain acquired assets, adjustments to the working capital settlement amount due from the sellers to the Company, and final determination regarding the tax-deductibility of the acquired intangible assets. The acquisition-related compensation expense during 2012 was primarily related to pre-negotiated compensation paid to members of the sellers’ family based on achievement of various operational milestones.

Goodwill represents expected synergies and intangible assets that do not qualify for separate recognition. Based on an Indian Supreme Court ruling in 2012 upholding the deductibility of goodwill for India tax purposes, the Company anticipates being able to deduct the value of goodwill for income tax purposes in India. A later Indian Supreme Court ruling raised doubt as to the tax deductibility of the cost of the non-compete agreement entered into between AIPL and the sellers. Accordingly, the Company amended its acquisition accounting to establish a deferred tax liability related to this intangible asset. The Company had initially recorded a deferred tax liability valued at $1.4 million and subsequently adjusted to $0.7 million related to intangible assets and other accrued liabilities that it does not believe will be amortizable for Indian tax purposes. This remaining deferred tax liability of $0.7 million was reversed against goodwill during 2012.

For book purposes, the other intangible assets acquired are being amortized over lives of four to five years. Goodwill is not amortized for book purposes but is subject to impairment testing. The tangible assets acquired consist primarily of construction in progress fair valued at $14.2 million, buildings, plant and equipment fair valued at a combined $8.5 million, land fair valued at $2.6 million, accounts receivable fair valued at $2.1 million and inventory fair valued at $1.8 million.

Lundbeck Products

On December 22, 2011, the Company entered into an Asset Sale and Purchase Agreement (the “Lundbeck Agreement”) to acquire the NDA rights to three branded, injectable drug products from the U.S. subsidiary of Lundbeck for an estimated purchase price of approximately $63.4 million (the “Lundbeck Acquisition”). Per terms of the Lundbeck Agreement, the Company made an upfront payment of $45.0 million. The Company also acquired inventory from Lundbeck for a price of $4.6 million, which was paid early in 2012. The Company will owe a subsequent milestone payment of $15.0 million in cash to Lundbeck on the third anniversary of closing of the Lundbeck Agreement, for which contingent consideration of $11.6 million was initially recorded. The initial purchase consideration and the subsequent milestone payment are subject to a reduction if certain sales targets are not met in the first three years and the subsequent three years post-closing. The acquired products include Nembutal®, a Schedule II controlled drug, Diuril® and Cogentin®. This acquisition adds to the Company’s portfolio of injectable drug products, allowing the Company to leverage its existing sales infrastructure to promote sales of these products.

The Company determined that the acquired assets represented a “business” as defined per Rule 11-01(d) of Regulation S-X and ASC 805, Business Combinations. Accordingly, the Company accounted for the Lundbeck Acquisition as a business combination.

The following table sets forth the consideration paid related to the Lundbeck Acquisition, the total acquisition-related costs incurred by the Company, and the fair values of the assets acquired and the liabilities assumed (in thousands):

	Initial Fair Value			Change in Estimate		Adjusted Fair Value
Consideration:
Cash paid	$	49,559				$	49,559
Present value of contingent consideration		11,300			300		11,600
Total consideration	$	60,859		$	300	$	61,159

Acquisition-related costs:	$	50				$	50

Recognized amounts of identifiable assets acquired and liabilities assumed:

Product licensing rights	$	59,525		$	300	$	59,825
Inventory		3,825					3,825
Fixed assets		50					50
Assumed liability – unfavorable contract		(2,541	)				(2,541	)
	$	60,859		$	300	$	61,159

The Company identified Product licensing rights as the only intangible assets acquired in the Lundbeck Acquisition, and is amortizing this intangible asset straight-line over its anticipated useful life of 15 years for both book and tax purposes. The contingent consideration of $15.0 million was initially discounted to present value using a 9% discount rate, which took into account the Company’s cost of long-term credit. The contingent consideration is being adjusted to fair value at each balance sheet date based on the remaining term and updated discount rate. The “Assumed liability – unfavorable contract” is in relation to a supply agreement assumed by the Company which obligates the Company to acquire more inventory of one of the three acquired products than the Company projects it would be able to sell based on historical sales volumes and future projections. This liability has been discounted in determining its fair value.

The tangible assets acquired consist of inventory of approximately $3.8 million and fixed assets of approximately $50,000. The acquired inventory has been valued below its acquisition cost based on the Company’s determination that not all of the acquired inventory can be sold at least six months prior to its expiration.

The Lundbeck Agreement commits the Company to paying royalties to Lundbeck based on the Company’s future sales of an authorized generic of one of the acquired products. There are currently generics of this product on the market. The Lundbeck Agreement calls for payment of royalties equal to 55% of the gross profit margin on sales of this authorized generic for a period of six years following the Company’s initial sale of this generic product. For purposes of the royalty calculation, brand sales in excess of a specified annual unit volume will be treated as generic sales and will therefore be subject to royalties.

AVR Acquisition

On May 3, 2011, the Company purchased all the outstanding shares of stock of Advanced Vision Research, Inc. (“AVR”), paying approximately $26.0 million in cash, net of cash held by AVR. The acquisition of AVR is being accounted for as a business combination. The purchase price was subject to adjustment based on a working capital guarantee contained in the purchase agreement. During the quarter ended September 30, 2011, the Company paid an additional $0.7 million to reimburse the sellers for the net cash balance in AVR’s bank accounts as of the acquisition date, as required by terms of the AVR purchase agreement. Akorn has further agreed to reimburse AVR Business Trust, Advanced Vision Research, Inc., Advanced Vision Pharmaceuticals, LLC , and the shareholders of AVR Business Trust (collectively, the “Sellers”) for any incremental income tax expense they should incur related to the parties making an Internal Revenue Code (“IRC”) Section 338(h)(10) election. In relation to this agreement, the Company paid approximately $0.7 million to the Sellers at closing, which represents the Seller’s initial estimate of their incremental income tax burden as a result of the IRC Section 338(h)(10) election.

The acquisition of AVR is a strategic extension of the Company’s ophthalmic business, allowing the Company to expand its presence in the OTC eye care product space. The Company is leveraging its existing operating infrastructure that markets products to ophthalmologists, optometrists, and retailers nationwide and also expects to attain cost savings and synergies as the Company continues to integrate the AVR business into its existing operations.

AVR markets a line of OTC eye care products under the TheraTears® brand name. Akorn had been a contract manufacturer of certain TheraTears® products since 2008. During 2011, the Company generated revenues of approximately $0.6 million from the sale of contract manufactured TheraTears® products to AVR.

The following table summarizes the consideration paid for AVR, the total acquisition-related costs incurred by the Company during 2011 in connection with the acquisition, and the fair values of the assets acquired and liabilities assumed (amounts in thousands):

Consideration:
Cash paid at closing	$	26,011
Additional consideration paid		723
Fair value of total consideration transferred	$	26,734

Acquisition-related costs:	$	246

Recognized amounts of identifiable assets acquired and liabilities assumed:
Accounts receivable, net	$	611
Inventories, net		3,407
Prepaid expenses and other current assets		730
Property and equipment		250
Goodwill, deductible		11,863
Trademarks and technology		9,500
Customer relationships		3,900
Estimated additional consideration due		(181	)
Accounts payable & other assumed liabilities		(3,346	)
	$	26,734

The adjustment to purchase consideration and the fair valuation of acquired assets and assumed liabilities was primarily related to paying to the Sellers an additional cash amount of $0.7 million, which represented the net cash balance on AVR’s balance sheet on the acquisition date, as well as finalizing the valuation of the acquired intangible assets.

The Company identified Trademarks and technology and Customer relationships as finite-lived intangible assets acquired as part of the AVR acquisition. Both of these assets were valued based on the projected net present value of future cash flows to be generated from these assets. Goodwill represents both expected synergies and intangible assets that do not qualify for separate recognition and equals the excess of purchase price over the fair value of the identifiable tangible and intangible assets acquired. The net tangible assets acquired consist primarily of inventory of approximately $3.4 million, accounts receivable of $0.6 million, prepaid expenses and other currents assets of $0.7 million and property and equipment of $0.3 million. The fair value of inventory was determined based on its net realizable value which was adjusted to include all net costs allocable to the manufacturing effort.

For income tax purposes, the Company is able to deduct the goodwill and other intangible assets resulting from the acquisition ratably over 15 years. Goodwill will not be amortized for book purposes but will be subject to impairment testing. Other intangible assets are being amortized straight-line over their estimated useful lives, which for Trademarks and technology is 30 years and for Customer relationships is 15 years.

Gross accounts receivable of approximately $2.7 million acquired as part of the AVR acquisition were recorded net of the following reserves: (i) product returns of approximately $1.8 million; (ii) doubtful accounts of $0.2 million, and (iii) cash discounts of approximately $0.1 million. The product returns reserve is an estimate of future returns of all products historically sold by AVR that are still potentially subject to return by the customer.

Other Strategic Investments

On August 1, 2011, the Company entered into a Series A-2 Preferred Stock Purchase Agreement (the “Aciex Agreement”) to acquire a minority ownership interest in Aciex Therapeutics Inc. (“Aciex”), based in Westborough, MA, for $8.0 million in cash. Subsequently, on September 30, 2011, the Company entered into Amendment No. 1 to Series A-2 Preferred Stock Purchase Agreement (the “Aciex Amendment”) to acquire additional shares of Series A-2 Preferred Stock in Aciex for approximately $2.0 million in cash. The Company’s investment in Aciex is being carried at cost on the Company’s Condensed Consolidated Balance Sheet. Aciex is an ophthalmic drug development company focused on developing novel therapeutics to treat ocular diseases. Aciex’s pipeline consists of both clinical stage assets and pre-Investigational New Drug stage assets. The investments detailed above have provided the Company with an ownership interest in Aciex of below 20%. The Aciex Agreement and Aciex Amendment contain certain customary rights and preferences over the common stock of Aciex and further provide that the Company shall have the right to a seat on the Aciex board of directors. The Company performs an impairment test of its investment in Aciex annually, or more frequently if there is any indication of possible impairment. The most recent impairment review was completed in the fourth quarter of 2013 and no impairment was identified.

During 2013, 2012 and 2011, the Company paid $2.7 million, $0.8 million and $5.7 million, respectively, for the acquisition of drug product licensing rights (NDA and ANDA rights). Along with the product rights acquired in 2011, the Company also acquired inventory valued at approximately $0.3 million. In the 2012 and 2013 acquisitions, there were no assets acquired other than the drug rights, and no liabilities assumed.