Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis, Valuation Techniques [Table Text Block]

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In October 2011, in connection with the acquisition (the "Amorcyte Acquisition") of Amorcyte, LLC ("Amorcyte"), contingent consideration obligations were recognized relating to earn out payments equal to 10% of the net sales of the lead product candidate CLBS10 (in the event of and following the date of first commercial sale of CLBS10, a CD34 therapy), provided that in the event the Company sublicenses CLBS10, the applicable earn out payment will be equal to 30% of any sublicensing fees, and provided further that the Company will be entitled to recover direct out-of-pocket clinical development costs not previously paid or reimbursed and any costs, expenses, liabilities and settlement amounts arising out of claims of patent infringement or otherwise challenging Amorcyte’s right to use intellectual property, by reducing any earn out payments due by 50% until such costs have been recouped in full (the “Earn Out Payments”). As of June 30, 2015, based on a thorough analysis of the available data from the PreSERVE AMI Phase 2 clinical study for CLBS10, an updated commercial assessment, and consultation with the Company’s scientific advisory board and the Science and Technology Committee of the Board of Directors, the Company determined that it will not pursue further development of CLBS10. As a result, the Amorcyte Acquisition contingent consideration fair value decreased from $5.6 million to $0 as of June 30, 2015, since the contingent consideration is based solely on future revenues of CLBS10. The change in estimated fair value has been recorded in other income in our consolidated statement of operations.

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In May 2014, in connection with the CSC Acquisition, contingent consideration obligations were recognized relating to milestone payments of up to $90.0 million, based on the achievement of certain milestones associated with the future development of the acquired programs. The contingent consideration fair value increased from $12.8 million as of December 31, 2014 to $13.5 million as of June 30, 2015. The change in estimated fair value is based on the impact of the time progression to reach those milestones as of June 30, 2015, and has been recorded in other expenses in our consolidated statement of operations.

The fair value of contingent consideration obligations is based on discounted cash flow models using a probability-weighted income approach. The measurements are based upon unobservable inputs supported by little or no market activity based on our own assumptions and experience. The Company bases the timing to complete the development and approval programs on the current development stage of the product and the inherent difficulties and uncertainties in developing a product candidate, such as obtaining FDA and other regulatory approvals. In determining the probability of regulatory approval and commercial success, we utilize data regarding similar milestone events from several sources, including industry studies and our own experience. These fair value measurements represent Level 3 measurements as they are based on significant inputs not observable in the market. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition date and for each subsequent period. Accordingly, changes in assumptions could have a material impact on the amount of contingent consideration expense we record in any given period.

The following table sets forth by level within the fair value hierarchy the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of June 30, 2015, and December 31, 2014 (in thousands):



	June 30, 2015								December 31, 2014
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Marketable securities - available for sale	$	—	$	3,011.7	$	—	$	3,011.7	$	—	$	7,080.0	$	—	$	7,080.0
	$	—	$	3,011.7	$	—	$	3,011.7	$	—	$	7,080.0	$	—	$	7,080.0

Liabilities:
Contingent consideration	$	—	$	—	$	13,460.0	$	13,460.0	$	—	$	—	$	18,260.0	$	18,260.0
	$	—	$	—	$	13,460.0	$	13,460.0	$	—	$	—	$	18,260.0	$	18,260.0

Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

For those financial instruments with significant Level 3 inputs, the following table summarizes the activity for the six months ended June 30, 2015 by type of instrument (in thousands):



	Six Months Ended
	June 30, 2015
	Contingent Consideration			Total
Beginning liability balance	$	18,260.0		$	18,260.0
Change in fair value recorded in operations	(4,800.0		)	(4,800.0		)
Ending liability balance	$	13,460.0		$	13,460.0