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Long-Term Related Party Payable (Tables)
 9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Schedule of Related Party Transactions
Long-term related party payable and related activity are reported at fair value and consist of the following at September 30, 2019 and December 31, 2018:
 
 
 
Activity during the Nine Months Ended
September 30, 2019
 
 
 
 
 
 
 
Changes in Fair Value of Related Party Payable
 
 
Long-Term Related Party Payable:
Balance,
December 31, 2018
 
Payments to
Related Parties
 
Operating Expense
 
Other
Expense
 
Balance, September 30, 2019
 
 
 
 
 
 
 
 
 
 
Acquisition-related contingent consideration:
 

 
 

 
 

 
 

 
 

Earn-out payments - Éclat Pharmaceuticals (a)
$
25,615

 
$
(8,640
)
 
$
2,384

 
$
—

 
$
19,359

Financing-related:
 

 
 

 
 

 
 

 
 
Royalty agreement - Deerfield (b)
2,184

 
(930
)
 
—

 
330

 
1,584

Royalty agreement - Broadfin (c)
1,041

 
(444
)
 
—

 
166

 
763

Total related party payable
28,840

 
$
(10,014
)
 
$
2,384

 
$
496

 
21,706

Less: current portion
(9,439
)
 
 

 
 

 
 

 
(7,588
)
Total long-term related party payable
$
19,401

 
 

 
 

 
 

 
$
14,118



Long-term related party payable and related activity are reported at fair value and consist of the following at September 30, 2019 and June 30, 2019:

 
 
 
Activity during the Three Months Ended
September 30, 2019
 
 
 
 
 
 
 
Changes in Fair Value of Related Party Payable
 
 
Long-Term Related Party Payable:
Balance,
June 30, 2019
 
Payments to
Related Parties
 
Operating Expense
 
Other
Expense
 
Balance, September 30, 2019
 
 
 
 
 
 
 
 
 
 
Acquisition-related contingent consideration:
 

 
 

 
 

 
 

 
 

Earn-out payments - Éclat Pharmaceuticals (a)
$
21,582

 
$
(2,850
)
 
$
627

 
$
—

 
$
19,359

Financing-related:
 

 
 

 
 

 
 

 
 
Royalty agreement - Deerfield (b)
1,799

 
(309
)
 
—

 
94

 
1,584

Royalty agreement - Broadfin (c)
866

 
(148
)
 
—

 
45

 
763

Total related party payable
24,247

 
$
(3,307
)
 
$
627

 
$
139

 
21,706

Less: current portion
(8,264
)
 
 

 
 

 
 

 
(7,588
)
Total long-term related party payable
$
15,983

 
 

 
 

 
 

 
$
14,118

(a) In March 2012, the Company acquired all of the membership interests of Éclat from Breaking Stick Holdings, L.L.C. (“Breaking Stick”, formerly Éclat Holdings), an affiliate of Deerfield. Breaking Stick is majority owned by Deerfield, with a minority interest owned by the Company’s former CEO, and certain other current and former employees. As part of the consideration, the Company committed to provide quarterly earn-out payments equal to 20% of any gross profit generated by certain Éclat products. These payments will continue in perpetuity, to the extent gross profit of the related products also continue in perpetuity.
(b)
As part of a February 2013 debt financing transaction conducted with Deerfield, the Company received cash of $2,600 in exchange for entering into a royalty agreement whereby the Company shall pay quarterly a 1.75% royalty on the net sales of certain Éclat products until December 31, 2024. In connection with such debt financing transaction, the Company granted Deerfield a security interest in the product registration rights of the Eclat products.
(c)
As part of a December 2013 debt financing transaction conducted with Broadfin Healthcare Master Fund, a related party and current shareholder, the Company received cash of $2,200 in exchange for entering into a royalty agreement whereby the Company shall pay quarterly a 0.834% royalty on the net sales of certain Éclat products until December 31, 2024.
The following table summarizes changes to the related party payables, a recurring Level 3 measurement, for the nine-month periods ended September 30, 2019 and 2018, respectively:
Related Party Payable Rollforward:
 
Balance
 
 
 
Balance, December 31, 2017
 
$
98,925

Payments of related party payable
 
(19,261
)
Fair value adjustments (1)
 
(18,468
)
Expiration of warrants
 
(2,167
)
Disposition of the pediatric assets
 
(20,337
)
Balance, September 30, 2018
 
$
38,692

 
 
 
Balance, December 31, 2018
 
$
28,840

Payments of related party payable
 
(10,014
)
Fair value adjustments (1)
 
2,880

Balance, September 30, 2019
 
$
21,706

(1) Fair value adjustments are reported as changes in fair value of related party contingent consideration and other expense - changes in fair value of related party payable in the unaudited condensed consolidated statements of loss.