Derivative Contracts

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE CONTRACTS

DERIVATIVE CONTRACTS

The following table summarizes the fair values and the presentation of our derivative financial instruments in the Condensed Consolidated Balance Sheets:

(In thousands)	Balance Sheet Component	September 30, 2014		December 31, 2013
Derivative financial instruments:
Pharmsynthez Note Receivable and Purchase Option	Prepaid expenses and other current assets	$	—	$	6,151
Common stock options/warrants	Investments, net	$	5,703	$	5,988
Embedded conversion option	2033 Senior Notes, net of discount and estimated fair value of embedded derivatives	$	50,443	$	101,087
Forward contracts (1)	Current portion of lines of credit and notes payable	$	2,914	$	1,585

⁽¹⁾  Gains on forward contracts are recorded in Prepaid expenses and other current assets. Losses on forward contracts are recorded in Accrued expenses.

We enter into foreign currency forward exchange contracts to cover the risk of exposure to exchange rate differences arising from inventory purchases on letters of credit. Under these forward contracts, for any rate above or below the fixed rate, we receive or pay the difference between the spot rate and the fixed rate for the given amount at the settlement date.

To qualify the derivative instrument as a hedge, we are required to meet strict hedge effectiveness and contemporaneous documentation requirements at the initiation of the hedge and assess the hedge effectiveness on an ongoing basis over the life of the hedge. At September 30, 2014 and December 31, 2013, our derivative financial instruments do not meet the documentation requirements to be designated as hedges. Accordingly, we recognize the changes in Fair value of derivative instruments, net in our Condensed Consolidated Statements of Operations. The following table summarizes the (losses) and gains recorded during the three and nine months ended September 30, 2014 and 2013:

	Three months ended September 30,					Nine months ended September 30,
(In thousands)	2014		2013			2014		2013
Derivative gain (loss):
Common stock options/warrants	$	651	$	(692	)	$	388	$	3,152
2033 Senior Notes	2,521		(36,603		)	3,291		(51,478		)
Forward contracts	133		(158		)	79		(25		)
Total	$	3,305	$	(37,453	)	$	3,758	$	(48,351	)

The outstanding forward contracts at September 30, 2014 and December 31, 2013, have been recorded at fair value, and their maturity details are as follows:

(In thousands) Days until maturity	Contract value		Fair value at  September 30, 2014		Effect on income (loss)
0 to 30	$	535	$	568	$	33
31 to 60	1,217		1,245		28
61 to 90	735		748		13
91 to 120	348		353		5
121 to 180	—		—		—
Total	$	2,835	$	2,914	$	79

(In thousands) Days until maturity	Contract value		Fair value at  December 31, 2013		Effect on income (loss)
0 to 30	$	472	$	489	$	17
31 to 60	561		579		18
61 to 90	503		517		14
91 to 120	—		—		—
121 to 180	—		—		—
More than 180	—		—		—
Total	$	1,536	$	1,585	$	49