Discontinued operations

3 Months Ended

Mar. 31, 2016

Discontinued Operations and Disposal Groups [Abstract]

Discontinued operations

On March 10, 2015, the Company entered into the Asset Purchase Agreement whereby the Company agreed to sell its Zohydro ER business to Pernix, and on April 24, 2015, the Company completed the sale to Ferrimill Limited, a subsidiary of Pernix, as a substitute purchaser.

As a result of the Company's strategic decision to sell the Zohydro ER business and focus on clinical development of ZX008 and Relday, the financial results from the Zohydro ER business and the related assets and liabilities have been presented as discontinued operations in the condensed consolidated financial statements. The results of operations from discontinued operations presented below include certain allocations that management believes fairly reflect the utilization of services provided to the Zohydro ER business. The allocations do not include amounts related to general corporate administrative expenses or interest expense, and therefore the results of operations from the Zohydro ER business do not necessarily reflect what the results of operations would have been had the business operated as a stand-alone entity.

The following table summarizes the results of discontinued operations for the periods presented in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2016 and 2015 (in thousands):

	Three Months Ended March 31,
Discontinued operations	2016			2015
Revenues:
Net product revenue	$	334		$	5,006
Operating expenses:
Cost of product sold	15			1,340
Royalty expense	20			418
Research and development	—			4,808
Selling, general and administrative	468			11,136
Total operating expense	503			17,702
Net loss from discontinued operations	$	(169	)	$	(12,696	)

The following table summarizes the assets and liabilities of discontinued operations as of March 31, 2016 and December 31, 2015 related to the Zohydro ER business (in thousands):

	March 31, 2016		December 31, 2015
Assets
Current assets
Prepaid expenses and other current assets	$	41	$	208
Total current assets of discontinued operations	41		208
Total assets of discontinued operations	$	41	$	208
Liabilities
Current liabilities
Accrued expenses	$	2,370	$	2,796
Deferred revenue and other current liabilities	—		110
Total current liabilities of discontinued operations	2,370		2,906
Total liabilities of discontinued operations	$	2,370	$	2,906

There was no stock-based compensation or amortization expense related to discontinued operations for the three months ended March 31, 2016. Total stock-based compensation expense related to discontinued operations was $522,000 and total amortization expense related to discontinued operations was $124,000 for the three months ended March 31, 2015.