Segment Information

12 Months Ended

Dec. 31, 2011

Segment Information [Abstract]

Segment Information

Note 19 - Segment Information:

We operate in two reportable business segments: generic pharmaceuticals (referred to as "Par Pharmaceutical" or "Par") and branded pharmaceuticals (referred to as "Strativa Pharmaceuticals" or "Strativa"). Branded products are marketed under brand names through marketing programs that are designed to generate physician and consumer loyalty. Branded products generally are patent protected, which provides a period of market exclusivity during which they are sold with little or no direct competition. Generic pharmaceutical products are the chemical and therapeutic equivalents of corresponding brand drugs. The Drug Price Competition and Patent Term Restoration Act of 1984 provides that generic drugs may enter the market upon the approval of an ANDA and the expiration, invalidation or circumvention of any patents on corresponding brand drugs, or the expiration of any other market exclusivity periods related to the brand drugs. Our chief operating decision maker is our Chief Executive Officer.

Our business segments were determined based on management's reporting and decision-making requirements in accordance with FASB ASC 280-10 Segment Reporting. We believe that our generic products represent a single operating segment because the demand for these products is mainly driven by consumers seeking a lower cost alternative to brand name drugs. Par's generic drugs are developed using similar methodologies, for the same purpose (e.g., seeking bioequivalence with a brand name drug nearing the end of its market exclusivity period for any reason discussed above). Par's generic products are produced using similar processes and standards mandated by the FDA, and Par's generic products are sold to similar customers. Based on the economic characteristics, production processes and customers of Par's generic products, management has determined that Par's generic pharmaceuticals are a single reportable business segment. Our chief operating decision maker does not review the Par (generic) or Strativa (brand) segments in any more granularity, such as at the therapeutic or other classes or categories. Certain of our expenses, such as the direct sales force and other sales and marketing expenses and specific research and development expenses, are charged directly to either of the two segments. Other expenses, such as general and administrative expenses and non-specific research and development expenses are allocated between the two segments based on assumptions determined by management.

The financial data for the two business segments are as follows ($ amounts in thousands):

	For the Years Ended December 31,
	2011			2010			2009
Revenues:
Par Pharmaceutical	$	834,592		$	916,930		$	1,104,295
Strativa		91,546			91,944			88,864
Total revenues	$	926,138		$	1,008,874		$	1,193,159
Gross margin:
Par Pharmaceutical	$	320,313		$	305,716		$	267,830
Strativa		66,431			67,815			66,123
Total gross margin	$	386,744		$	373,531		$	333,953
Operating (loss) income:
Par Pharmaceutical	$	(10,973	)	$	169,882		$	163,186
Strativa		(39,620	)		(36,961	)		(31,716	)
Total operating (loss) income	$	(50,593	)	$	132,921		$	131,470
Gain on bargain purchase		-			-		$	3,021
Loss on extinguishment of senior         subordinated convertible notes		-			-		($	2,598	)
Gain (loss) on marketable securities and         other investments, net		237			3,459			(55	)
Interest income		736			1,257			2,658
Interest expense		(2,676	)		(2,905	)		(8,013	)
(Benefit) provision for income taxes		(5,996	)		41,980			48,883
(Loss) income from continuing operations	$	(46,300	)	$	92,752		$	77,600

Our chief operating decision maker does not review our assets, depreciation or amortization by business segment at this time as they are not material to Strativa. Therefore, such allocations by segment are not provided.

Total revenues of our top selling products were as follows ($ amounts in thousands):

Product	For the Years Ended December 31,
	2011		2010		2009
Par Pharmaceutical
Metoprolol succinate ER (Toprol-XL®)	$	250,995	$	473,206	$	742,697
Budesonide (Entocort® EC)		70,016		-		-
Propafenone (Rythmol SR®)		69,835		-		-
Sumatriptan succinate injection (Imitrex®)		64,068		72,984		72,319
Chlorpheniramine/Hydrocodone (Tussionex®)		39,481		17,479		-
Amlodipine and Benazepril HCl (Lotrel®)		37,310		-		-
Dronabinol (Marinol®)		29,880		27,232		24,997
Tramadol ER (Ultracet ER®)		24,980		22,640		5,520
Meclizine Hydrochloride (Antivert®)		17,184		31,216		38,851
Cholestyramine Powder (Questran®)		16,144		16,007		13,092
Nateglinide (Starlix®)		15,157		15,287		7,001
Omeprazole (Zegerid®)		14,926		18,476		-
Cabergoline (Dostinex®)		12,186		12,487		12,895
Megestrol oral suspension (Megace®)		11,959		12,556		11,830
Methimazole (Tapazole®)		8,756		10,649		10,062
Clonidine TDS (Catapres TTS®)		4,094		61,272		33,747
Propranolol HCl ER (Inderal LA®)		154		5,870		12,473
Other (1)		117,490		103,326		112,079
Other product related revenues (2)		29,977		16,243		6,732
Total Par Pharmaceutical Revenues	$	834,592	$	916,930	$	1,104,295
Strativa
Megace® ES	$	58,172	$	60,879	$	68,703
Nascobal® Nasal Spray (3)		21,399		17,715		10,161
Oravig®		2,434		1,137		-
Zuplenz®		875		213		-
Other product related revenues (2)		8,666		12,000		10,000
Total Strativa Revenues	$	91,546	$	91,944	$	88,864

(1)	The further detailing of revenues of the other approximately 35 generic drugs is impracticable due to the low volume of revenues associated with each of these generic products. No single product in the other category is in excess of 3% of total generic revenues for any year in the three-year period ended December 31, 2011.
(2)	Other product related revenues represents licensing and royalty related revenues from profit sharing agreements related to products such as doxycycline monohydrate, the generic version of Adoxa®, diazepam rectal gel, the generic version of Diastat®, and fenofibrate, the generic version of Tricor®. Other product related revenues included in the Strativa segment relate to a co-promotion arrangement with Solvay for Androgel®, and the $2 million termination payment associated with the discontinuation of the co-promotion arrangement with Solvay in December 2010. On January 30, 2009, the FTC filed a lawsuit against us in the U.S. District Court for the District of Central California alleging violations of antitrust laws stemming from our court-approved settlement in the patent litigation with Unimed and Besins (see "Legal Proceedings" in Note 17, "Commitments, Contingencies and Other Matters").
(3)	Refer to Note 21, "2009 Acquisitions."

During the year ended December 31, 2011, Par recognized a gain on the sale of product rights of $0.1 million, and during the year ended December 31, 2010, of $6.0 million, related to the sale of multiple ANDAs included in gain on sale of product rights and other on the consolidated statements of operations.