SUBSEQUENT EVENTS

12 Months Ended

Dec. 31, 2011

SUBSEQUENT EVENTS [Abstract]

SUBSEQUENT EVENTS

13. SUBSEQUENT EVENTS

In a February 23, 2012 press release, Auxilium announced that it had entered into a Collaboration Agreement with Actelion pursuant to which Actelion has the right to develop and commercialize XIAFLEX for the treatment of Dupuytren's contracture and Peyronie's disease in Canada, Australia, Brazil and Mexico. According to the release, XIAFLEX for the treatment of Dupuytren's contracture has been accepted for review by Health Canada and regulatory action is expected in the second half of 2012. Additionally, Actelion expects to file for approval of XIAFLEX for the treatment of Dupuytren's contracture in Australia, Brazil and Mexico over the next 12 months. Under the terms of the agreement with Actelion, Auxilium is to receive a $10 million upfront payment from Actelion, as well as up to $16 million in potential regulatory, pricing, and reimbursement milestone payments and $42.5 million in potential sales milestone payments. Under the terms of the Auxilium Agreement, we will receive a certain percentage from Auxilium in connection with the upfront payment by Actelion, and a specified percentage of any additional milestones received by Auxilium. We will also receive from Auxilium royalties from net sales and payments on costs of goods sold in Canada, Australia, Brazil and Mexico, which will be a specified percentage of what Auxilium is entitled to receive from Actelion without regard to any offset that Actelion may have with respect to Auxilium.

We have evaluated subsequent events for recognition or disclosure through the time of filing these consolidated financial statements on Form 10-K with the U.S. Securities and Exchange Commission on March 12, 2012.