Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Schedule of the components of income tax benefit

The components of the income tax expense (benefit) for continuing operations are as follows (in thousands):

	Year Ended December 31,
	2015			2014			2013
Current expense (benefit):
Federal	$	11		$	15		$	—
State	7			19			33
	18			34			33
Deferred expense (benefit):
Federal	(193,398		)	406			404
State	(26,216		)	(30		)	(63		)
	$	(219,596	)	$	410		$	374

Schedule of deferred tax assets and liabilities

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2015 and 2014 are shown below. The Company assesses the positive and negative evidence to determine if sufficient future taxable income will be generated to use the existing deferred tax assets. During the third quarter of the year, the Company's evaluation of evidence resulted in management concluding that the majority of the Company's deferred tax assets will be realized. However, the Company maintains a valuation allowance to offset certain net deferred tax assets as management believes realization of such assets are uncertain as of December 31, 2015, 2014 and 2013. The valuation allowance decreased $230.7 million in 2015, decreased $9.8 million in 2014 and decreased $5.4 million in 2013.

	December 31,
	2015			2014
	(in thousands)
Deferred assets:
Net operating loss carryforwards	$	188,076		$	193,747
Research and AMT credit carryforwards	25,613			28,288
Fixed assets and intangibles	8,839			13,237
Accrued expenses	1,523			1,579
Contingent liabilities	707			579
Deferred revenue	3			771
Present value of royalties	3,007			11,686
Organon termination asset	—			(111		)
Organon termination liability	—			111
Deferred rent	68			730
Other	17,281			5,780
	245,117			256,397
Valuation allowance for deferred tax assets	(9,066		)	(240,420		)
Net deferred tax assets	$	236,051		$	15,977
Deferred tax liabilities:
Retrophin fair value adjustment	$	(1,256	)	$	(1,396	)
Convertible debt	(1,844		)	(1,436		)
Identified intangibles	(12,770		)	(13,146		)
Identified indefinite lived intangibles	(3,617		)	(3,048		)
Total	$	216,564		$	(3,049	)

Schedule of effective income tax rate reconciliation

A reconciliation of income tax expense (benefit) from continuing operations to the amount computed by applying the statutory federal income tax rate to the net income (loss) from continuing operations is summarized as follows:

	Year Ended December 31,
	2015			2014			2013
Amounts computed at statutory federal rate	$	(13,198	)	$	(3,843	)	$	(3,131	)
State taxes net of federal benefit	(386		)	(697		)	(293		)
Meals & entertainment	(16		)	(9		)	(10		)
Imputed interest	161			(53		)	(285		)
Section 162(m) limitation	(197		)	(490		)	—
Contingent liabilities	(1,684		)	(1,748		)	(2,027		)
Stock-based compensation	(140		)	(89		)	556
Expired NOLs	(232		)	(88		)	—
Research and development credits	(304		)	113			4,581
Change in uncertain tax positions	293			(7		)	(364		)
Rate change for changes in state law	5,756			(119		)	(901		)
Increase in deferred tax assets from completion of 382 analysis	(3,329		)	(43		)	(786		)
Avinza true up	2,107			—			—
Change in valuation allowance	231,370			7,243			3,509
Other	(605		)	(580		)	(1,223		)
	$	219,596		$	(410	)	$	(374	)

Schedule of unrecognized tax benefits

A reconciliation of the amount of unrecognized tax benefits at December 31, 2015 and 2014 is as follows (in thousands):

Balance at December 31, 2013	$	8,504
Additions based on tax positions related to the current year	40
Additions for tax positions of prior years	(20		)
Balance at December 31, 2014	$	8,524
Additions based on tax positions related to the current year	154
Additions based on tax positions related to prior years	219
Reductions for tax positions of prior years	(450		)
Balance at December 31, 2015	$	8,447