Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Fair Value Inputs, Assets, Quantitative Information [Table Text Block]

The following table represents significant unobservable inputs used in determining the estimated fair value of impaired notes receivable investments:



Asset	Valuation Technique	Unobservable Input	September 30, 2017	December 31, 2016

Wellstat Diagnostics
Wellstat Guarantors Intellectual Property	Income Approach
		Discount rate	12%	13%
		Royalty amount	$60 million	$54-74 million
Real Estate Property	Market Approach
		Annual appreciation rate	4%	4%
		Estimated realtor fee	6%	6%
		Estimated disposal date	12/31/2018	12/31/2017
Direct Flow Medical
All Assets	Income Approach
		Discount rate	N/A	27%
		Implied revenue multiple	N/A	6.9
LENSAR
All Assets	Income Approach
		Discount rate	N/A	25%
		Implied revenue multiple	N/A	2.5

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

The following tables summarize the changes in Level 3 assets and liabilities and the gains and losses included in earnings for the nine months ended September 30, 2017:



Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - Royalty Rights Assets

(in thousands)			Royalty Rights - At Fair Value
Fair value as of December 31, 2016						$	402,318

	Financial instruments settled					(108,169		)
	Total net change in fair for the period
		Change in fair value of royalty rights - at fair value	$	132,224
		Proceeds from royalty rights - at fair value	$	(74,404	)
		Total net change in fair value for the period				57,820

Fair value as of September 30, 2017						$	351,969



Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - Royalty Rights Assets

	Fair Value as of		Change of			Royalty Rights -			Fair Value as of
(in thousands)	December 31, 2016		Ownership			Change in Fair Value			September 30, 2017
Depomed	$	164,070	$	—		$	58,625		$	222,695
VB	14,997		—			440			15,437
U-M	35,386		—			63			35,449
ARIAD	108,631		(108,169		)	(462		)	—
AcelRx	67,483		—			6,582			74,065
Avinger	1,638		—			(777		)	861
KYBELLA	10,113		—			(6,651		)	3,462
	$	402,318	$	(108,169	)	$	57,820		$	351,969



Fair Value Measurements Using Significant Unobservable Inputs (Level 3) - Liabilities

(in thousands)		Anniversary Payment			Contingent Consideration
Fair value as of December 31, 2016		$	(88,001	)	$	(42,650	)

	Total net change in fair for the period	(999		)	(2,350		)
	Settlement of financial instrument	89,000			—

Fair value as of September 30, 2017		$	—		$	(45,000	)

Schedule of fair value of financial instruments measured on recurring basis



	September 30, 2017								December 31, 2016
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
(In thousands)
Financial assets:
Money market funds	$	14,705	$	—	$	—	$	14,705	$	4	$	—	$	—	$	4
Certificates of deposit	—		—		—		—		—		75,000		—		75,000
Commercial paper	—		2,060		—		2,060		—		19,987		—		19,987
Corporate securities	4,349		—		—		4,349		—		—		—		—
Warrants	—		49		—		49		—		78		—		78
Royalty rights - at fair value	—		—		351,969		351,969		—		—		402,318		402,318
Total	$	19,054	$	2,109	$	351,969	$	373,132	$	4	$	95,065	$	402,318	$	497,387

Financial liabilities:
Anniversary payment	$	—	$	—	$	—	$	—	$	—	$	—	$	88,001	$	88,001
Contingent consideration	—		—		45,000		45,000		—		—		42,650		42,650
Total	$	—	$	—	$	45,000	$	45,000	$	—	$	—	$	130,651	$	130,651

Schedule of fair value of assets and liabilities not subject to fair value recognition by level within the valuation hierarchy

ollows:



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(in thousands)	2017			2016			2017			2016

Total change in fair value for the period included in earnings for royalty right assets held at the end of the reporting period	$	35,353		$	16,085		$	132,224		$	(11,872	)

Total change in fair value for the period included in earnings for liabilities held at the end of the reporting period	$	(700	)	$	(2,083	)	$	(3,349	)	$	(2,083	)

The following tables present the fair value of assets and liabilities not subject to fair value recognition by level within the valuation h