Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Assets and liabilities measured at fair value on recurring basis

The following tables present our money market funds and auction rate securities assets and contingent consideration liability measured at fair value on a recurring basis as of the dates indicated, classified by valuation hierarchy:

			Fair Value Measurements at September 30, 2013
	Balance at September 30, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds	$	70,355	$	70,355	$	-	$	-
Auction rate securities		2,208		-		-		2,208
Total Assets	$	72,563	$	70,355	$	-	$	2,208

Liability:
Contingent consideration	$	15,900	$	-	$	-	$	15,900
Total Liability	$	15,900	$	-	$	-	$	15,900

			Fair Value Measurements at December 31, 2012
	Balance at December 31, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Money market funds	$	56,224	$	56,224	$	-	$	-
Auction rate securities		3,240		-		-		3,240
Total Assets	$	59,464	$	56,224	$	-	$	3,240

Quantitative information for fair value measurement of Level 3

The following table presents quantitative information pertaining to the fair value measurement of the Level 3 inputs:

	Fair Value as of September 30, 2013		Valuation Technique	Unobservable Input	Range (Weighted Average)
Asset:
Auction Rate Securities	$	2,208	Discounted cash flow model	Redemption period	5 to 15 years (6 years)
				Discount rate	0.375% - 2.031% (1.23%)
Contingent consideration liability:
Azedra commercialization	$	2,300	Probability adjusted discounted cash flow model	Probability of success	40%
				Period of milestone expected achievement	2016
				Discount rate	10%

MIP – 1404 commercialization	$	2,000	Probability adjusted discounted cash flow model	Probability of success	31%
				Period of milestone expected achievement	2017
				Discount rate	10%

Small molecule therapeutics (MIP 1095, -1555, -1558) commercialization	$	500	Probability adjusted discounted cash flow model	Probability of success	19%
				Period of milestone expected achievement	2020
				Discount rate	10%

Net sales targets	$	11,100	Monte-Carlo simulation	Probability of success	19% - 40% (32.9%)
				Period of milestone expected achievement	2018 - 2022
				Discount rate	12.5%

	Fair Value as of December 31, 2012		Valuation Technique	Unobservable Input	Range (Weighted Average)
Asset:
Auction Rate Securities	$	3,240	Discounted cash flow model	Redemption period	4 to 15 years (5.9 years)
				Discount rate	0.125% - 2.102% (0.71%)

Summary of activities in financial instruments with Level 3 inputs

For those financial instruments with significant Level 3 inputs (all of which are auction rate securities), the following table summarizes the activities for the periods indicated:

	Asset – Auction Rate Securities Fair Value Measurements Using Significant Unobservable Inputs (Level 3) For the Three Months Ended September 30,
	2013		2012

Balance at beginning of period	$	2,208	$	3,240
Transfers into Level 3		-		-
Transfers out of Level 3		-		-
Total gains (losses)
Included in net loss		-		-
Included in other comprehensive loss		-		-
Settlements at par		-		-
Balance at end of period	$	2,208	$	3,240
Changes in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period	$	-	$	-

	Asset – Auction Rate Securities Fair Value Measurements Using Significant Unobservable Inputs (Level 3) For the Nine Months Ended September 30,
	2013			2012

Balance at beginning of period	$	3,240		$	3,332
Transfers into Level 3		-			-
Transfers out of Level 3		-			-
Total gains (losses)
Included in net loss		-			-
Included in other comprehensive loss		68			8
Settlements at par		(1,100	)		(100	)
Balance at end of period	$	2,208		$	3,240
Changes in unrealized gains or losses for the period included in earnings (or changes in net assets) for assets held at the end of the reporting period	$	-		$	-

	Liability – Contingent Consideration Fair Value Measurements Using Significant Unobservable Inputs (Level 3) For the Three Months Ended September 30,
	2013		2012

Balance at beginning of period	$	15,900	$	-
Fair value of contingent consideration – acquisition of Molecular Insight		-		-
Fair value adjustment to contingent consideration included in net loss		-		-
Balance at end of period	$	15,900	$	-
Changes in unrealized gains or losses for the period included in earnings (or changes in net assets) for liabilities held at the end of the reporting period	$	-	$	-

	Liability – Contingent Consideration Fair Value Measurements Using Significant Unobservable Inputs (Level 3) For the Nine Months Ended September 30,
	2013		2012

Balance at beginning of period	$	-	$	-
Fair value of contingent consideration – acquisition of Molecular Insight		15,900		-
Fair value adjustment to contingent consideration included in net loss		-		-
Balance at end of period	$	15,900	$	-
Changes in unrealized gains or losses for the period included in earnings (or changes in net assets) for liabilities held at the end of the reporting period	$	-	$	-

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

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