Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis. (in thousands):

	Fair Value Measurements at December 31, 2016

	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and Cash Equivalents	$	82,398	$	82,398	$	—	$	—
Marketable securities	$	1,106	$	831	$	—	$	275
Total assets	$	83,504	$	83,504	$	—	$	—

Liabilities:
Acquisition consideration payable	$	48,362	$	—	$	—	$	48,362
Total liabilities	$	48,362	$	—	$	—	$	48,362

	Fair Value Measurements at December 31, 2015

	Balance		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Marketable securities	$	97,366	$	97,366	$	—	$	—
Total assets	$	97,366	$	97,366	$	—	$	—

Liabilities:
Derivative liability	$	5,520	$	—	$	—	$	5,520
Total liabilities	$	5,520	$	—	$	—	$	5,520

Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3)

The following table includes a summary of the contingent consideration liabilities associated with acquisitions entered into during the year ended December 31, 2016. The contingent consideration is measured at fair value using significant unobservable inputs (Level 3) during the twelve months ended December 31, 2016:


(in thousands)	2016
Fair Value at Beginning of Year		—
Contingent consideration – current year acquisitions	46,826
Remeasurement of Fair Value – current year acquisitions	(1,775)
Payment of current year contingent consideration	—
Balance at End of Year	$	45,052

The following table includes a summary of the derivative liabilities measured at fair value using significant unobservable inputs (Level 3) during the twelve months ended December 31, 2016.


(in thousands)	2016
Fair Value at Beginning of Year	$	5,520
Additions	—
Expiration of derivative liability	(5,520)
Payments	—
Balance at End of Year	$	—

Schedule of Quantitative Information about Inputs and Valuation Methodologies Used for Fair Value Measurements Classified in Level 3 of Fair Value Hierarchy

The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurements classified in Level 3 of the fair value hierarchy at December 31, 2016:



	Fair Value at 12/31/16 (in thousands)		Valuation Methodology	Significant Unobservable Input	Weighted Average (range, if applicable)
BDL Contingent Consideration		$ 3,311	Multiple outcome discounted cash flow	Discount Rate Percent probabilities assigned to scenarios	15.71% 50%
Scilex Contingent Consideration	$	40,000	Multiple outcome discounted cash flow	Discount Rate Probability of Regulatory Milestone	2.28% 95%
Concortis Contingent Consideration	$	596	Multiple outcome discounted cash flow	Discount Rate Percent probabilities assigned to scenarios	12.21% 20%
Shanghai Three Contingent Consideration	$	1,782	Multiple outcome discounted cash flow	Discount Rate Percent probabilities assigned to scenarios	12.21% 50%
RWMC Contingent Consideration	$	2,673	Multiple outcome discounted cash flow	Discount Rate, Percent probabilities assigned to scenarios	12.21% 50%

Schedule of Carrying Value and Fair Value of Notes Receivable and Debt Obligations

The carrying value and fair value of the company’s notes receivable and debt obligations are as follows (in thousands):


	December 31, 2016
	Carrying Value		Fair Value

Debt Obligations:
Term Loan	47,316		47,316

	$	47,316	$	47,316