Note

–

Deerfield Loan

Long-term debt consists solely of amounts due under the Deerfield Loan for the periods presented:

	September 30,		December 31,
(in thousands)	2016		2015
Note payable	$	25,000	$	25,000

The principal amount of the loan is payable in two equal annual installments of $12.5 million

, payable in each of February 2018 and 2019. Under the Deerfield Loan agreement, the February 2018 installment is subject to a potential one-year deferral until February 2019 if we have achieved a market capitalization of $250 million as set forth in the Deerfield Loan agreement.

See

, Note 9, “Deerfield Loan,” in the Notes to Condensed Consolidated Financial Statements in our 2015 Form 10-K.

The following amounts comprise the Deerfield Loan interest expense for the periods presented:

	Three Months Ended				Nine Months Ended
(in thousands)	September 30,				September 30,
	2016		2015		2016		2015

Amortization of prepaid interest expense	$	347	$	420	$	1,435	$	420
Cash interest expense		191		150		191		1,451
Non-cash amortization of debt discount		–		138		–		1,287
Debt discount write-off		–		707		–		707
Amortization of debt costs		–		2		–		12
Write-off of debt costs		–		66		–		66
Total interest expense	$	538	$	1,483	$	1,626	$	3,943

mortization of prepaid interest expense represents non-cash amortization of $5 million of units that Deerfield agreed to purchase in our July 2015 public offering and accept in satisfaction of $5 million of future interest payments due under the Deerfield Notes at an interest rate of 8.75%.

For 2016, cash interest expense represents

interest at an annual rate of 8.75% on the outstanding principal amount for the period, paid in cash on a quarterly basis that exceeds the non-cash amortization of the prepaid interest expense. For 2015, cash interest expense represents interest at an annual rate of 8.75% on the outstanding principal amount for the period, paid in cash on a quarterly basis, up to the date of second amendment to the Deerfield Loan agreement dated July 22, 2015.

on-cash amortization of debt discount represents the amortization of previously capitalized transaction fees and the amortization of the reduction of the carrying value of the debt due to the fair value of the Deerfield Warrants issued.

ebt discount write-off represents the proportional write-off of unamortized debt discount at the time of a $2.5 million prepayment of principal amount outstanding under the Deerfield Loan in July 2015.