Discontinued operations

6 Months Ended

Jun. 30, 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 income (loss) for the three and six months ended June 30, 2016 and 2015 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Revenues:
Net product revenue	$	(43	)	$	4,173		$	291		$	9,179
Operating expense:
Cost of product sold	—			612			15			1,952
Royalty expense	—			291			17			708
Research and development	—			1,020			—			5,829
Selling, general and administrative	539			3,097			1,010			14,233
Restructuring expense	—			568			—			568
Gain on sale of business	—			(89,053		)	—			(89,053		)
Total operating (income) expense	539			(83,465		)	1,042			(65,763		)
Other income	—			5,000			—			5,000
Net income (loss) from discontinued operations before tax	(582		)	92,638			(751		)	79,942
Income tax expense	—			(13,478		)	—			(13,478		)
Net income (loss) from discontinued operations	$	(582	)	$	79,160		$	(751	)	$	66,464

The following table summarizes the assets and liabilities of discontinued operations as of June 30, 2016 and December 31, 2015 related to the Zohydro ER business (in thousands):

	June 30, 2016		December 31, 2015
Assets
Current assets
Prepaid expenses and other current assets	$	—	$	208
Total current assets of discontinued operations	—		208
Total assets of discontinued operations	$	—	$	208
Liabilities
Current liabilities
Accounts payable	$	182	$	—
Accrued expenses	1,355		2,796
Deferred revenue and other current liabilities	—		110
Total current liabilities of discontinued operations	1,537		2,906
Total liabilities of discontinued operations	$	1,537	$	2,906

There was no stock-based compensation or amortization expense related to discontinued operations for the three and six months ended June 30, 2016. Total stock-based compensation expense related to discontinued operations was $898,000 and total amortization expense related to discontinued operations was $166,000 for the six months ended June 30, 2015.