Segment Information

3 Months Ended

Mar. 31, 2012

Segment Information [Abstract]

Segment Information

Note 18 - 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):

	Three months ended
	March 31,			March 31,
	2012			2011
Revenues:
Par Pharmaceutical	$	251,167		$	209,745
Strativa		20,305			23,207
Total revenues	$	271,472		$	232,952
Gross margin:
Par Pharmaceutical	$	82,450		$	92,559
Strativa		15,396			17,093
Total gross margin	$	97,846		$	109,652
Operating income (loss):
Par Pharmaceutical	$	24,048		$	(132,746	)
Strativa		(45,261	)		(5,817	)
Total operating loss	$	(21,213	)	$	(138,563	)
Interest income		136			423
Interest expense		(3,094	)		(150	)
Provision (benefit) for income taxes		4,525			(29,446	)
Loss from continuing operations	$	(28,696	)	$	(108,844	)

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	Three months ended
	March 31,			March 31,
	2012			2011
Par Pharmaceutical
Metoprolol succinate ER (Toprol-XL®)	$	61,765		$	63,418
Budesonide (Entocort® EC)		37,984			-
Propafenone (Rythmol SR®)		19,092			22,039
Sumatriptan succinate injection (Imitrex®)		16,700			16,699
Chlorpheniramine/Hydrocodone (Tussionex®)		13,957			12,679
Bupropion ER (Wellbutrin®)		11,354			-
Dronabinol (Marinol®)		7,603			6,871
Zolpidem (Ambien CR®)		6,921			-
Tramadol ER (Ultracet ER®)		5,829			6,081
Cholestyramine Powder (Questran®)		4,652			3,683
Meclizine Hydrochloride (Antivert®)		4,186			4,875
Nateglinide (Starlix®)		4,024			4,306
Amlodipine and Benazepril HCl (Lotrel®)		2,448			18,171
Clonidine TDS (Catapres TTS®)		(991	)		5,806
Other (1)		50,250			37,228
Other product related revenues (2)		5,393			7,889
Total Par Pharmaceutical Revenues	$	251,167		$	209,745
Strativa
Megace® ES	$	12,178		$	14,085
Nascobal® Nasal Spray		5,931			3,878
Oravig®		155			749
Zuplenz®		85			221
Other product related revenues (2)		1,956			4,274
Total Strativa Revenues	$	20,305		$	23,207

(1) No single product in the other category is in excess of 3% of total generic revenues for the three-month period ended March 31, 2012 or for the three-month period ended March 31, 2011.

(2) Other product related revenues represents licensing and royalty related revenues from profit sharing agreements related to products such as 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 primarily to Strativa's share of the proceeds from Optimer Pharmaceuticals' sale of certain rights in fidaxomicin to a third party.