Pernix Therapeutics 10-K 28 Mar 17 2016 FY Annual report Financial data

Document and Entity Information

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2016	Mar. 03, 2017	Jun. 30, 2016
Document Information [Line Items]
Entity Registrant Name	PERNIX THERAPEUTICS HOLDINGS, INC.
Entity Central Index Key	1,024,126
Document Type	10-K
Document Period End Date	Dec. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$ 38,304,000
Entity Common Stock, Shares Outstanding		10,015,641
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2,016

CONSOLIDATED BALANCE SHEETS (US

CONSOLIDATED BALANCE SHEETS (USD $) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 36,375	$ 56,135
Restricted cash	0	10,002
Accounts receivable, net	50,729	61,209
Inventory, net	7,775	10,035
Prepaid expenses and other current assets	12,617	11,574
Income tax receivable	1,414	6,735
Total current assets	108,910	155,690
Property and equipment, net	1,103	2,346
Goodwill	30,600	54,865
Intangible assets, net	169,571	285,943
Other	257	347
Total assets	310,441	499,191
Current liabilities:
Accounts payable	7,275	14,081
Accrued personnel expense	5,357	4,336
Accrued allowances	60,961	62,678
Other accrued expenses	8,711	9,355
Interest payable	10,897	11,903
Treximet Secured Notes - current	11,103	13,335
Restricted cash payable	0	10,002
Other liabilities - current	5,224	6,753
Total current liabilities	109,528	132,443
Convertible notes - long-term	104,071	99,776
Derivative liability	230	9,165
Contingent consideration	2,403	14,055
Treximet Secured Notes - long-term	172,250	188,715
Credit facilities - long-term	14,000	15,000
Deferred income tax liability - long-term	0	202
Arbitration award	17,522	0
Other liabilities	4,500	6,738
Total liabilities	424,504	466,094
Commitments and contingencies (notes 1, 3, 10, 12, 13, 19 and 20)
Stockholders' (deficit) equity
Preferred stock, $0.01 par value, authorized 10,000,000 shares; no shares issued and outstanding	0	0
Common stock, $.01 par value, 140,000,000 and 140,000,000 shares authorized, 10,015,641 and 6,387,455 issued and 10,015,641 and 6,111,253 outstanding at December 31, 2016 and 2015, respectively	100	61
Additional paid-in capital	244,309	227,387
Treasury stock, at cost, 0 and 2,762,022 shares held at December 31, 2016 and 2015, respectively, see Note 14	0	(5,548)
Accumulated other comprehensive loss	(79)	0
Accumulated deficit	(358,393)	(188,803)
Total stockholders' (deficit) equity	(114,063)	33,097
Total liabilities and stockholders' (deficit) equity	$ 310,441	$ 499,191

CONSOLIDATED BALANCE SHEETS (U3

CONSOLIDATED BALANCE SHEETS (USD $) (Parenthetical) - $ / shares	Dec. 31, 2016	Dec. 31, 2015
Stockholders Equity
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock par value	$ 0.01	$ 0.01
Common stock shares authorized	140,000,000	140,000,000
Common stock shares issued	10,015,641	6,387,455
Common stock shares outstanding	10,015,641	6,111,253
Treasury Stock held, at cost	0	2,762,022

CCONSOLIDATED STATEMENTS OF LOS

CCONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (USD $) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
Net revenues	$ 140,856	$ 175,850
Costs and operating expenses:
Cost of product sales	43,320	51,408
Selling, general and administrative expense	98,834	97,421
Research and development expense	6,079	8,229
Depreciation and amortization expense	86,138	94,695
Change in fair value of contingent consideration	(11,652)	(138)
Loss from disposal of assets, impairments of intangibles and goodwill	56,178	24,352
Restructuring costs	2,287	1,137
Total costs and operating expenses	281,184	277,104
Loss from operations	(140,328)	(101,254)
Other income (expense):
Interest income	0	157
Interest expense	(37,857)	(38,277)
Change in fair value of derivative liability	8,935	19,315
Foreign currency transaction gain (loss)	99	(582)
Cost of inducement	0	(19,500)
Loss on extinguishment of debt	0	(1,112)
Other expense, net	(28,823)	(39,999)
Loss before income tax expense	(169,151)	(141,253)
Income tax expense	439	7,062
Net loss	(169,590)	(148,315)
Other comprehensive loss
Unrealized loss during period, net of tax of $0 and $0, respectively	(79)	0
Comprehensive loss	$ (169,669)	$ (148,315)
Net loss per share, basic	$ (21.67)	$ (27.81)
Net loss per share, diluted	$ (21.67)	$ (27.81)
Weighted-average common shares, basic	7,827	5,333
Weighted-average common shares, diluted	7,827	5,333

CCONSOLIDATED STATEMENTS OF LO5

CCONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (USD $) (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Statement [Abstract]
Unrealized gains during period, tax	$ 0	$ 0

CONSOLIDATED STATEMENTS OF STOC

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Preferred Stock	Common Stock	Additional Paid-In Capital	Treasury Stock	Retained Earnings (Deficit)	Accumulated Other Comprehensive Loss	Total
Beginning Balance, Amount at Dec. 31, 2014	$ 0	$ 38	$ 129,473	$ (5,431)	$ (40,488)	$ 0	$ 83,592
Beginning Balance, Shares at Dec. 31, 2014	0	3,835
Net proceeds from issuance of restricted stock, Amount	$ 0	$ 0	0	(117)	0	0	(117)
Net proceeds from issuance of restricted stock, Shares	0	5
Compensation expense on share-based awards	$ 0	$ 0	5,944	0	0	0	5,944
Conversion of 8.0% convertible notes, Amount	$ 0	$ 18	60,154	0	0	0	60,172
Conversion of 8.0% convertible notes, Shares	0	1,805
Issuance of stock for inducment, Amount	$ 0	$ 2	19,498	0	0	0	19,500
Issuance of stock for inducment, Shares	0	233
Stock issued in connection with the purchase of Zohydro ER, Amount	$ 0	$ 2	11,924	0	0	0	11,926
Stock issued in connection with the purchase of Zohydro ER, Shares	0	168
Net proceeds from sale of shares, Amount	$ 0	$ 1	394	0	0	0	395
Net proceeds from sale of shares, Shares	0	65
Net loss	$ 0	$ 0	0	0	(148,315)	0	(148,315)
Ending Balance, Amount at Dec. 31, 2015	$ 0	$ 61	227,387	(5,548)	(188,803)	0	33,097
Ending Balance, Shares at Dec. 31, 2015	0	6,111
Net proceeds from issuance of restricted stock, Amount	$ 0	$ 0	0	(23)	0	0	(23)
Net proceeds from issuance of restricted stock, Shares	0	4
Reclassification of treasury stock	$ 0	$ 0	(5,571)	5,571	0	0	0
Compensation expense on share-based awards	0	0	2,718	0	0	0	2,718
Net proceeds from sale of shares, Amount	$ 0	$ 39	19,775	0	0	0	19,814
Net proceeds from sale of shares, Shares	0	3,901
Net loss	$ 0	$ 0	0	0	(169,590)	0	(169,590)
Other comprehensine loss	0	0	0	0	0	(79)	(79)
Ending Balance, Amount at Dec. 31, 2016	$ 0	$ 100	$ 244,309	$ 0	$ (358,393)	$ (79)	$ (114,063)
Ending Balance, Shares at Dec. 31, 2016	0	10,016

CONSOLIDATED STATEMENTS OF STO7

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical)	12 Months Ended
	Dec. 31, 2016
Statement of Stockholders' Equity [Abstract]
Interest rate of convertible debt	0.08

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net loss	$ (169,590)	$ (148,315)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation	704	361
Amortization of intangibles	85,511	94,334
Amortization of deferred financing costs	2,440	2,730
Accretion of debt discount	3,590	2,286
Interest accretion of notes receivable	0	(127)
Deferred income tax expense (benefit)	(202)	6,746
Loss on disposal of fixed assets	35	19
Loss on extinguishment of debt	0	1,112
Stock compensation expense	2,718	5,944
Fair market value change in derivative liability	(8,935)	(19,315)
Fair market value change in contingent consideration	(11,652)	(138)
Issuance of stock for inducement	0	19,500
Loss on impairment	56,143	24,352
Decrease (increase) in operating assets (excluding effect of acquisitions):
Accounts receivable	11,009	(17,082)
Income taxes	5,321	(4,145)
Inventory	2,260	444
Prepaid expenses and other assets	(533)	2,471
Increase (decrease) in operating liabilities (excluding effect of acquisitions):
Accounts payable and accrued expenses	(7,958)	6,682
Accrued allowances	(1,717)	10,074
Arbitration award	17,522	0
Interest payable	(1,006)	2,291
Other liabilities	(2,161)	(4,973)
Net cash used in operating activities	(16,501)	(14,749)
Cash flows from investing activities:
Acquisitions	(583)	(87,986)
Payments received on notes receivable	0	4,850
Purchase of software and equipment	(984)	(1,212)
Net cash used in investing activities	(1,567)	(84,348)
Cash flows from financing activities:
Proceeds from issuance of Convertible Notes	0	130,000
Payments on Treximet Secured Notes	(20,406)	(10,013)
Net drawdowns (payments) on credit facilities	(1,000)	7,655
Payments for financing costs	0	(5,349)
Payment of consent fee	0	(2,150)
Payments on mortgages and capital leases	(77)	(44)
Proceeds from issuance of common stock, net of tax and costs	19,814	395
Shares withheld for the payment of taxes	(23)	(117)
Net cash (used in) provided by financing activities	(1,692)	120,377
Net (decrease) increase in cash and cash equivalents	(19,760)	21,280
Cash and cash equivalents, beginning of period	56,135	34,855
Cash and cash equivalents, end of period	$ 36,375	$ 56,135

1. Organization and Nature of B

1. Organization and Nature of Business	12 Months Ended
	Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
1. Organization and Nature of Business	Note 1. Organization and Nature of Business Pernix Therapeutics Holdings, Inc. (Pernix, the Company, we, our and us) is a specialty pharmaceutical company focused on the acquisition, development and commercialization of prescription drugs, primarily for the U.S. market. The Company targets underserved therapeutic areas, such as central nervous system (CNS), including neurology, pain and psychiatry. The Company promotes its branded products to physicians through its Pernix sales force, and markets its generic portfolio through its wholly owned subsidiaries, Macoven Pharmaceuticals, LLC (Macoven) and Cypress Pharmaceuticals, Inc. (Cypress). The Company's branded products include Treximet, a medication indicated for the acute treatment of migraine pain and inflammation, Silenor, a non-controlled substance and approved medication for the treatment of insomnia characterized by difficulty with sleep, and Zohydro ER with BeadTek, an extended-release opioid agonist indicated for the management of pain. Subsequent Events The Company has evaluated all events and transactions since December 31, 2016. The Company did not have any non-recognized subsequent events, but had the following recognized subsequent event: On January 31, 2017, the arbitration tribunal issued opinions in favor of GSK, awarding it damages and fees in the amount of approximately $35 million, plus interest (estimated to be approximately $2 to $5 million). The tribunal also denied the Company's claim that GSK breached its obligations under the supply agreement. Subsequent discussions with GSK resulted in an agreement on March 17, 2017, to amend the Interim Settlement Agreement. A payment schedule was established for satisfaction of the current balance of the award. Pursuant to the amendment, we have agreed that the current outstanding balance is approximately $21.5 million and we have agreed to make quarterly installments to GSK in amounts totaling $1.0 million in 2017, $3.5 million in 2018 and approximately $17.0 million in 2019. Pernix has also agreed that for so long as the Interim Settlement Agreement is in effect, Pernix will be subject to certain restrictions on non-ordinary course payments and transactions and GSK will have certain information rights. GSK has agreed that for so long as Pernix complies with the payment schedule set forth in the Amendment, as well as other agreed-upon obligations, enforcement of the Award will be stayed and GSK shall not seek to enforce or exercise any other remedies in respect of the Award. The Company recorded the fair value of this settlement in the amount of approximately $18.5 million in its financial statements at December 31, 2016 and has recorded $15.3 million as a reduction to net revenues, $1.0 million to selling, general and administrative expense and $2.2 million to interest expense in the year ended December 31, 2016. Reverse Stock Split On October 13, 2016, the Company filed Articles of Amendment to its charter (the Articles of Amendment), with the State Department of Assessments and Taxation of Maryland to effect a one-for-ten reverse stock split of the outstanding shares of common stock, par value $0.01 per share, of the Company (the Reverse Stock Split). The Reverse Stock Split was duly approved by the Board of Directors of the Company without stockholder approval in accordance with the authority conferred by Section 2-309(e)(2) of the Maryland General Corporation Law and Article IV, Section 6 of the Company's charter. Pursuant to the Articles of Amendment, effective as of the close of business on October 13, 2016, each outstanding share of the Company's common stock, par value $0.01 per share, was automatically combined into 1/10th of share of common stock, par value $0.01 per share. Fractional share holdings were rounded up to the nearest whole number. As a result of the Reverse Stock Split, the number of outstanding shares of common stock of the Company was reduced to approximately 9.5 million shares. Each stockholder's percentage ownership in the Company and proportional voting power remained unchanged immediately after the Reverse Stock Split, except for minor changes resulting from the rounding up of fractional shares. The rights and privileges of stockholders were also unaffected by the Reverse Stock Split. There was no change to the number of authorized shares of the Company's common stock as a result of the Reverse Stock Split. Accordingly, all share and per share information in this Annual Report on Form 10-K has been restated to retroactively show the effect of the Reverse Stock Split. Acquisition of Zohydro On April 24, 2015, the Company, through a wholly owned subsidiary Pernix Ireland Pain Limited (PIPL), formerly known as Ferrimill Limited, completed the acquisition of the pharmaceutical product line Zohydro ER, including an abuse-deterrent pipeline and all related intellectual property, a supplier contract, an associated liability payable and a specified quantity of inventory associated therewith, from Zogenix, Inc. (Zogenix). See Note 4, Business Combinations and Other Acquisitions, Acquisition of Treximet On August 20, 2014, the Company, through a wholly owned subsidiary Pernix Ireland Limited (PIL), formerly known as Worrigan Limited, completed the acquisition of the U.S. intellectual property rights to the pharmaceutical product, Treximet from GlaxoSmithKline plc and certain of its related affiliates (together GSK). See Note 4, Business Combinations and Other Acquisitions, Reclassifications Certain comparative figures have been reclassified to conform to the current year presentation. In accordance with Accounting Standards Update (ASU) 2015-03, Simplifying the Presentation of Debt Issuance Costs, (ASU 2015-03), the Company reclassified $1.7 million from Prepaid expenses and other current assets to Treximet Secured Notes - current, $4.0 million from Other assets to Convertible notes - long-term and $6.2 million from Other assets to Treximet Secured Notes - long-term on the consolidated balance sheet at December 31, 2015.

2. Summary of Significant Accou

2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements	Note 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), applied on a consistent basis. Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated. Management's Estimates and Assumptions The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. The Company reviews all significant estimates affecting the consolidated financial statements on a recurring basis and records the effect of any necessary adjustments prior to their issuance. Significant estimates of the Company include: revenue recognition, sales allowances such as returns on product sales, government program rebates, customer coupon redemptions, wholesaler/pharmacy discounts, product service fees, rebates and chargebacks, sales commissions; useful lives of amortizable intangible assets; provisions for income taxes; uncertain tax positions, and realizability of deferred tax assets; expected future cash flows used in evaluating intangible assets for impairment and for determining the Company's liquidity and going concern analysis; stock-based compensation; and the allocation of the purchase price for acquired assets and businesses, including the fair value of contingent consideration. On an ongoing basis, management reviews its estimates to ensure that these estimates appropriately reflect changes in the Company's business and new information as it becomes available. If historical experience and other factors used by management to make these estimates do not reasonably reflect future activity, the Company's consolidated financial statements could be materially impacted. Business Acquisitions Acquired businesses are accounted for using the acquisition method of accounting. The acquisition method of accounting for acquired businesses requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date, with limited exceptions, and that the fair value of acquired in-process research and development (IPR&D), be recorded on the balance sheet. Also, transaction costs are expensed as incurred. Any excess of the acquisition consideration over the assigned values of the net assets acquired is recorded as goodwill. Contingent consideration is included within the acquisition cost and is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved and changes in fair value are recognized in earnings. If the acquired net assets do not constitute a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition and no goodwill is recognized. In an asset acquisition, the amount allocated to acquired IPR&D with no alternative future is charged to expense at the acquisition date. Fair Value of Financial Instruments The estimated fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their carrying values due to their short maturity periods. The fair value of acquisition-related contingent consideration is based on estimated discounted future cash flows and assessment of the probability of occurrence of potential future events. The fair value of long-term debt is based on quoted market prices, if available, or estimated discounted future cash flows. Cash and Cash Equivalents Cash and cash equivalents include certain money-market funds with maturities of three months or less when purchased. The restricted cash amount at December 31, 2015 consisted of amounts escrowed for the purchase of Zohydro ER with BeadTek. In accordance with the asset purchase agreement, the Company had deposited $10.0 million in an escrow fund to be held for a period of 12 months from the closing date as a security to pay, or be applied against, any losses incurred by the Company that are subject to the general representations, warranties and indemnification obligations of Zogenix. The Company was considered to be the legal and tax owner of the fund until the expiration of the escrow period of 12 months. Accordingly, the amount of $10.0 million in the escrow fund was recognized as restricted cash and consideration payable to Zogenix. Restricted cash and the restricted cash payable are presented separately under current assets and current liabilities, respectively, in the consolidated balance sheets. The conditions for the release of this escrow had been satisfied during the year ended December 31, 2016 and therefore the restricted cash has been released to Zogenix. See Note 4, Business Combinations and Other Acquisitions Concentrations of Credit Risk and Economic Dependency The financial instruments that potentially subject the Company to concentrations of credit risk are cash, cash equivalents, and accounts receivable. The Company invests its excess cash in high quality, money market instruments. The Company maintains its cash and cash equivalents with a major financial institution. At times, such amounts may exceed federally insured limits. The Company has not experienced any significant losses on its cash or cash equivalents. The Company's accounts receivable primarily represent amounts due from drug wholesalers, retail drug stores, mass merchandisers and grocery store pharmacies in the United States. The Company performs periodic credit evaluations of customers and does not require collateral. An allowance for doubtful accounts is maintained for potential credit losses based on the aging of accounts receivable, historical bad debts experience, and changes in customer payment patterns. Accounts receivables balances are written off against the allowance when it is probable that the receivable will not be collected. The Company primarily sold to three major customers in 2016 and 2015. See Note 15, Concentrations The Company relies on certain materials used in its development and manufacturing processes, some of which are procured from a single source. Most of the Company's manufacturing arrangements are not subject to long-term agreements and generally may be terminated by either party without penalty at any time. For the year ended December 31, 2016, approximately 42% of the inventory purchases, were from three primary suppliers - Recro Gainesville, LLC, Aphena Pharma Solutions and Belcher Pharmaceuticals, LLC, allocated 16%, 14% and 12%, respectively. For the year ended December 31, 2015, approximately 25% of the inventory purchases were from two primary suppliers - GSK and Aphena Pharma Solutions, allocated 15% and 10%, respectively. The Company believes that it has good relationships with its current suppliers, and could secure the services of alternative suppliers if necessary or required. Inventories Inventory is valued at the lower of cost or market, with cost determined by using the specific identification method. Allowances for slow-moving, obsolete, and/or declines in the value of inventory are determined based on management's assessments. Sample inventory is included in prepaid expenses and other current assets on the consolidated balance sheets and are expensed to selling, general and administrative expenses on the consolidated statements of operations and comprehensive loss when the sample units are distributed to the Company's sales representatives. The Company evaluates the carrying value of inventories on a regular basis, taking into account such factors as historical and anticipated future sales compared with quantities on hand, the price the Company expects to obtain for products in their respective markets compared with historical cost and the remaining shelf life of goods on hand. Property, Equipment and Depreciation Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which ranges from three to eight years. Leasehold improvements are amortized over the shorter of the non-cancelable term of the operating lease or their economic useful lives. Maintenance and repairs are charged against earnings when incurred. Additions and improvements that extend the economic useful life of the asset are capitalized. The cost and accumulated depreciation of assets sold or retired are removed from the respective accounts, and any resulting gain or loss is reflected in current earnings. Goodwill The Company tests goodwill for impairment annually in December and when events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill represents the excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed. The Company has determined that it operates in a single segment and has a single reporting unit associated with the development and commercialization of pharmaceutical products. The test for goodwill impairment is a two-step process. Step 1 is a comparison of the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying value of the reporting unit exceeds the reporting unit's fair value, the Company reports Step 2 of the goodwill impairment test to determine the amount of impairment loss by comparing the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. Under such evaluation, if the carrying value of the reporting unit's goodwill exceeds the implied fair value of the goodwill, the impairment loss is recognized as an operating expense as the amount equal to the excess. During the testing of goodwill for impairment during the year ended December 31, 2016, it was noted that the Company's carrying value exceeded its fair value and therefore the Company failed Step 1 and performed Step 2 of the goodwill impairment test. Step 2 of the impairment test determined a $23.8 million impairment charge for goodwill. See Note 9, Goodwill and Intangible Assets Intangible Assets Intangible assets with finite useful lives consist primarily of purchased developed technology and are amortized on a straight-line basis over their estimated useful lives, which range from 3 to 18 years. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Intangible assets with finite lives are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. The fair value of IPR&D acquired through a business combination is capitalized as an indefinite-lived intangible asset until the completion or abandonment of the related research and development activities. IPR&D is not amortized but is tested for impairment annually or when events or circumstances indicate that the fair value may be below the carrying value of the asset. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets would be deemed finite-lived and would then be amortized over their estimated useful lives. During the years ended December 31, 2016 and 2015, the Company recorded impairment charges of $31.4 million and $24.4 million, respectively. See Note 9, Goodwill and Intangible Assets Impairment of Long-lived Assets The Company reviews long-lived assets, such as property and equipment and finite lived intangibles, subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. If any long-lived assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair value. Deferred Financing Costs Deferred financing costs are reported at cost, less accumulated amortization, and are recorded as a reduction of the debt outstanding in current or long-term debt, unless there is no current portion for the period presented, in which case, the deferred financing cost will be recorded in prepaid expenses. Amortization expense is included in interest expense. Deferred financing costs amortized during years ended December 31, 2016 and 2015 were $2.4 million and $2.7 million, respectively. Unamortized deferred financing costs were $10.4 million and $12.8 million as of December 31, 2016 and 2015, respectively. Revenue Recognition Product Sales Product sales revenue is recognized when title has transferred to the customer and the customer has assumed the risks and rewards of ownership, which is typically on delivery to the customer or, in the case of products that are subject to consignment agreements, when the customer removes product from the Company's consigned inventory location for shipment directly to a patient. Revenue from sales transactions where the buyer has the right to return the product is recognized at the time of sale only if (i) the seller's price to the buyer is substantially fixed or determinable at the date of sale, (ii) the buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product, (iii) the buyer's obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product, (iv) the buyer acquiring the product for resale has economic substance apart from that provided by the seller, (v) the seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer, and (vi) the amount of future returns can be reasonably estimated. Revenues from sales of products are recorded net of estimated allowances for returns, specialty distributor fees, wholesaler fees, prompt payment discounts, government rebates, government chargebacks, coupon programs and rebates under managed care plans. Provisions for returns, specialty distributor fees, wholesaler fees, government rebates, coupon programs and rebates under managed care plans are included within current liabilities in the Company's consolidated balance sheets. Provision for prompt payment discounts are generally shown as a reduction in accounts receivable. Calculating certain of these items involves estimates and judgments based on sales or invoice data, contractual terms, historical utilization rates, new information regarding changes in these programs' regulations and guidelines that would impact the amount of the actual rebates, the Company's expectations regarding future utilization rates for these programs and channel inventory data. Co-promotion, Royalties and Other Product Related Revenues The Company receives royalties from third parties based on sales of the Company's products under licensing and distribution arrangements. For those arrangements where royalties are reasonably estimable, the Company recognizes revenues based on estimates of royalties earned during the applicable period, and adjusts for differences between the estimated and actual royalties in the following quarter. Historically, these adjustments have not been significant. The Company's contract revenues consist of fees and milestone payments. Non-refundable fees where the Company has no continuing performance obligations are recognized as revenues when there is persuasive evidence of an arrangement and collection is reasonably assured. In situations where the Company has continuing performance obligations, non- refundable fees are deferred and are recognized ratably over the Company's projected performance period. Sales-based milestone payments are typically payments made to the Company that are triggered when aggregate net sales of a product by a collaborator for a specified period (for example, an annual period) reach an agreed upon threshold amount. The Company recognizes sales-based milestone payments from a collaborator when the event that triggers the obligation of payment has occurred, there is no further obligation on the Company's part in connection with the payment, and collection is reasonably assured. Cost of Product Sales Cost of product sales is comprised of (i) costs to manufacture or acquire products sold to customers; (ii) royalty, co-promotion and other revenue sharing payments under license and other agreements granting the Company rights to sell related products; (iii) direct and indirect distribution costs incurred in the sale of products; and (iv) the value of any write-offs or donations of obsolete or damaged inventory that cannot be sold. The Company acquired the rights to sell certain of its commercial products through license and assignment agreements with the original developers or other parties with interests in these products. These agreements obligate the Company to make payments under varying payment structures based on its net revenue from related products. In connection with the acquisitions of Cypress and Somaxon, the Company adjusted the predecessor cost basis increasing inventory to fair value as required by ASC No. 820, Fair Value Measurements and Disclosures Research and Development Research and development costs in connection with the Company's internal programs for the development of products are expensed as incurred. Pernix either expenses research and development costs as incurred or will advance third parties a research and development fee, which is amortized over the term of the related agreement. Advertising Expenses The Company expenses the costs of advertising, including promotional expenses, as incurred in SG&A. Advertising expenses for 2016 and 2015 were $12.6 million and $18.3 million, respectively. The decrease is due to advertising programs for Silenor and Treximet that were decreased during 2016. Share-Based Compensation The Company recognizes all share-based payments to employees, including grants of employee stock options and restricted share units (RSUs), at estimated fair value. The Company amortizes the fair value of stock option or RSU grants on a straight-line basis over the requisite service period of the individual stock option or RSU grant, which generally equals the vesting period. Stock option and RSU forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Segment Information The Company currently markets two major product lines: a branded pharmaceuticals product line and a generic pharmaceuticals product line. These product lines qualify for reporting as a single segment in accordance with GAAP because they are similar in the nature of the products and services, production processes, types of customer, distribution methods and regulatory environment. Acquisition-Related Contingent Consideration Acquisition-related contingent consideration, which consists primarily of potential milestone payments and royalty obligations, is recorded in the consolidated balance sheets at its acquisition date estimated fair value, in accordance with the acquisition method of accounting. The fair value of the acquisition-related contingent consideration is remeasured each reporting period, with changes in fair value recorded in the consolidated statements of operations and comprehensive loss. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in fair value measurement accounting. Income Taxes Temporary differences are differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. Deferred taxes represent the future tax consequences on income taxes when the reported amount of the asset or liability is recovered or settled. Deferred taxes are measured using the enacted tax rates expected to apply to taxable income in periods in which the deductible or taxable temporary difference is expected to be recovered or settled. The effect on changes in tax rates and laws are recognized in income from continuing operations in the period that includes the enactment date. The Company will recognize deferred tax assets for deductible temporary differences, operating loss and tax credit carryforwards. The Company must also make judgments regarding the realizability of deferred tax assets. The carrying value of the Company's net deferred tax assets is based on its view of whether it is more likely than not that the Company will generate sufficient future taxable income in certain jurisdictions to realize these deferred tax assets. A valuation allowance has been established for deferred tax assets which the Company does not believe meet the "more likely than not" criteria. The Company's judgments regarding future taxable income may change due to changes in market conditions, changes in tax laws, tax planning strategies or other factors. If the Company's assumptions and consequently its estimates change in the future, the valuation allowances it has established may be increased or decreased, resulting in a respective increase or decrease in income tax expense. The Company's effective tax rate is highly dependent upon the geographic distribution of its worldwide earnings or losses, the tax regulations and tax holidays in each geographic region, the availability of tax credits and carryforwards, and the effectiveness of its tax planning strategies. The Company used a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with the guidance on judgments regarding the realizability of deferred taxes. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. Income tax returns subject to review by taxing authorities include 2013 through 2016. Contingencies Periodically, the Company may be involved in claims and other legal matters. The Company records accruals for loss contingencies to the extent that management concludes that it is probable that a liability has been occurred and the amount of the related loss can be reasonably estimated. Legal fees and other expenses related to litigation are expensed as incurred and included in SG&A. See Note 19, Commitments and Contingencies Earnings per Share Earnings per common share is presented under two formats: basic earnings per common share and diluted earnings per common share. Basic earnings per common share is computed by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period, plus the potentially dilutive impact of common stock equivalents (i.e. restricted stock, stock options, warrants and convertible notes). Dilutive common share equivalents consist of the incremental common shares issuable upon exercise of stock options and warrants, conversion of notes or vesting of restricted stock. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): Year ended December 31, 2016 2015 Numerator: Net loss $ (169,590) $ (148,315) Denominator: Weighted-average common shares, basic 7,827 5,333 Dilutive effective of stock options - - Weighted-average common shares, diluted 7,827 5,333 Net loss per share, basic and diluted $ (21.67) $ (27.81) The following table sets forth the potential common shares that could potentially dilute basic income per share in the future that were not included in the computation of diluted income (loss) per share because to do so would have been anti-dilutive for the periods presented (in thousands): Year ended December 31, 2016 2015 4.25% Convertible Notes 1,133 789 Stock options and restricted stock 774 395 Warrants 33 47 Total potential dilutive effect 1,940 1,231 Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows (Topic 230) In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842) The leasing standard will be effective for calendar year-end public companies beginning after December 15, 2018. Public companies will be required to adopt the new leasing standard for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption will be permitted for all companies and organizations upon issuance of the standard. For calendar year-end public companies, this means an adoption date of January 1, 2019 and retrospective application to previously issued annual and interim financial statements for 2018 and 2017. See Note 19, Commitments and Contingencies, In January 2016, the FASB issued Accounting Standards Update (ASU) 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In July 2015, the FASB issued, ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, On August 27, 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. Revenue Recognition There were no other recent accounting pronouncements that have not yet been adopted by the Company that are expected to have a material impact on the Company's consolidated financial statements.

3. Fair Value Measurement

3. Fair Value Measurement	12 Months Ended
	Dec. 31, 2016
Fair Value Disclosures [Abstract]
3. Fair Value Measurement	Note 3. Fair Value Measurement Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy is based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value as follows: Level 1 - Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. Level 2 - Inputs are other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs). Level 3- Inputs are unobservable and reflect the Company's assumptions that market participants would use in pricing the asset or liability. The Company develops these inputs based on the best information available. Summary of Assets Recorded at Fair Value In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company's financial assets that are required to be measured at fair value as of December 31, 2016 and December 31, 2015 (in thousands): As of December 31, 2016 Level 1 Level 2 Level 3 Total Money market fund and trust cash sweep investments (1) $ - $ - $ - $ - Total assets $ - $ - $ - $ - As of December 31, 2015 Level 1 Level 2 Level 3 Total Money market fund and trust cash sweep investments (1) $ 4,367 $ - $ - $ 4,367 Total assets $ 4,367 $ - $ - $ 4,367 (1) The Company's money market and trust cash sweep investments are included in cash and cash equivalents within the Consolidated Balance Sheets. The Company's cash equivalents are classified within Level 1 of the fair value hierarchy because they are valued using quoted market prices or broker or dealer quotations for similar assets. These investments are initially valued at the transaction price and subsequently valued utilizing third-party pricing providers or other market observable data. Data used in the analysis include reportable trades, broker/dealer quotes, bids and offers, benchmark yields and credit spreads. The Company validates the prices provided by its third-party pricing providers by reviewing their pricing methods, analyzing pricing inputs and confirming that the securities have traded in normally functioning markets. The Company did not adjust or override any fair value measurements provided by its pricing providers as of December 31, 2016 or December 31, 2015. As of December 31, 2016 and December 31, 2015, the Company did not have any investments in Level 2 or Level 3 securities. There were no transfers of assets or liabilities between Level 1 and Level 2 during the years ended December 31, 2016 and 2015. The carrying amounts reflected in the consolidated balance sheets for certain short-term financial instruments including accounts receivable, accounts payable, accrued expenses, and other liabilities approximate fair value due to their short-term nature. Summary of Liabilities Recorded at Carrying Value and Fair Value The fair and carrying value of the Company's debt instruments are detailed as follows (in thousands): As of December 31, 2016 As of December 31, 2015 Fair Carrying Fair Carrying Value Value Value Value 4.25% Convertible Notes $ 32,595 $ 104,071 $ 68,637 $ 99,776 Derivative liability 230 230 9,165 9,165 Contingent consideration 2,403 2,403 14,055 14,055 Treximet Secured Notes 147,551 183,353 179,518 202,050 Total $ 182,779 $ 290,057 $ 271,375 $ 325,046 Convertible Notes The fair values of the convertible notes were estimated using the following significant observable inputs: (i) terms of the convertible notes; (ii) rights, preferences, privileges, and restrictions of the underlying security; (iii) time until any restriction(s) are released; (iv) fundamental financial and other characteristics of the Company; (v) trading characteristics of the underlying security (exchange, volume, price, and volatility); (vi) valuation of derivative liability; and (vii) precedent sale transactions. Significant increases (decreases) in these observable inputs in isolation would likely result in a significantly (lower) higher fair value measurement. Derivative Liability The fair value of the derivative liability was determined using a "with and without" scenario. Under this methodology, valuations are performed on the convertible note inclusive of all terms as well as for a convertible note that has identical terms and features but excluding the conversion option. The difference between the two valuations is equal to the fair value of the conversion option. Significant increases or decreases in these inputs would result in a significant change in the fair value of the derivative liability. Significant increases (decreases) in these observable inputs in isolation would likely result in a significantly (lower) higher fair value measurement. Contingent Consideration The fair value of contingent consideration is based on two components - a regulatory milestone and commercial milestone. For the regulatory milestone, the expected regulatory earn out payment was discounted taking into account (a) the Company's cost of debt, (b) the expected timing of the payment and (c) subordinate nature of the earn out obligation. The fair value of the commercial milestone was determined using a Monte Carlo simulation. This simulation assumed a risk-neutral framework, whereby future net revenue was simulated over the earn out period using the Geometric Brownian Motion. For each simulation path, the earn out payments were calculated based on the achievement of the revenue milestone and then were discounted to the valuation date. Significant increases or decreases in these unobservable inputs and/or the probability of achievement of these milestones would result in a significant change in the fair value of the contingent consideration. Treximet Secured Notes The fair value of the Company's 12% Senior Secured Notes due 2020 (Treximet Secured Notes) was estimated using a discounted cash flow model. Significant increases (decreases) in the expected future annual revenue streams and probability of achievement in isolation would likely result in a significantly (lower) higher fair value measurement. Within the hierarchy of fair value measurements, the fair values of the convertible notes, derivative liability, Treximet Secured Notes and contingent consideration are Level 3 fair values. Fair Value Measurements Using Significant Unobservable Inputs (Level 3) For the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the years ended December 31, 2016 and 2015 (in thousands). December 31, 2016 2015 Derivative liability: Balance at beginning of year $ 9,165 $ - Initial measurement of derivative liability - 28,480 Remeasurement adjustments - gains included in earnings (8,935) (19,315) Ending balance $ 230 $ 9,165 Contingent consideration: Balance at beginning of year $ 14,055 $ - Initial measurement of contingent consideration - 14,193 Remeasurement adjustments - gains included in earnings (11,652) (138) Ending balance $ 2,403 $ 14,055

4. Business Combinations and Ot

4. Business Combinations and Other Acquisitions	12 Months Ended
	Dec. 31, 2016
Business Combinations [Abstract]
4. Business Combinations and Other Acquisitions	Note 4. Business Combinations and Other Acquisitions Consideration paid by the Company for the businesses it purchases is allocated to the assets and liabilities acquired based upon their estimated fair values as of the date of the acquisition. The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed is recorded as goodwill. Zohydro ER Acquisition On April 24, 2015, the Company completed the acquisition of the pharmaceutical product line, Zohydro ER, including an abuse-deterrent pipeline and all related intellectual property, a supplier contract, an associated liability payable and a specified quantity of inventory associated therewith, from Zogenix, Inc. (Zogenix). There were no other tangible or intangible assets acquired and liabilities assumed related to the Zohydro ER product line from Zogenix. The total purchase price consisted of an upfront cash payment of $80.0 million including a deposit of $10.0 million in an escrow fund, stock consideration of $11.9 million issued in common stock of the Company, $927,000 for specified quantity of inventory, and regulatory and commercial milestones of up to $283.5 million including a $12.5 million milestone payment upon approval of ZX007 abuse-deterrent extended-release hydrocodone tablet and up to $271.0 million in potential sales milestones if the Zohydro ER product line achieves certain agreed-upon net sales targets. Zohydro ER is an extended-release form of hydrocodone indicated for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. Zohydro ER does not contain acetaminophen, unlike many immediate-release hydrocodone products, such as Vicodin and Lortab, reducing the risk for potential liver toxicity due to overexposure of acetaminophen. The FDA approved the New Drug Application (NDA) for Zohydro ER in October 2013 and the product was launched in March 2014. The Zohydro ER product line acquisition was accounted for as a business combination in accordance with ASC 805 Business Combinations After the June 30, 2015 condensed consolidated financial statements were filed, the Company updated certain estimates used in the purchase price allocation, primarily with respect to forecast of all expected cash flows due to more current information. The revisions were based on updated assumptions and information related to the facts and circumstances that existed as of the acquisition date. These revisions in the estimates increased the fair value of the developed technology intangible asset by $31.4 million, decreased the fair value of IPR&D by $50.4 million and decreased the fair value of contingent consideration by $15.1 million. In addition, the Company also recognized an intangible asset from a supplier contract amounting to $1.1 million and recognized liabilities assumed amounting to $3.7 million. The net impact of these measurement period adjustments increased goodwill to $6.6 million. These measurement period adjustments resulted in an increase of amortization expense of intangible assets of $3.9 million and a decrease in gain from change in fair value of contingent consideration by $11.5 million in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2015. The Company has finalized the purchase price allocation and these measurement period adjustments are recorded as current period adjustments in accordance with ASU 2015-16. There were no impacts of these measurement period adjustments in the comparative periods included in the financial statements. The following table summarizes the consideration paid to acquire Zohydro ER and amounts recognized for assets acquired and liabilities assumed as of the acquisition date as well as adjustments made during the measurement period after the acquisition date to the amounts initially recorded on the acquisition date (in thousands): Purchase price: As of April 24, 2015 As initially reported Measurement Period Adjustments As of April 24, 2015 As adjusted Cash consideration paid to Zogenix $ 70,000 $ - $ 70,000 Escrow fund deposited at the time of closing (1) 10,000 - 10,000 Purchased product inventory (2) 927 - 927 Common stock issued (3) 11,926 - 11,926 Fair value of contingent consideration payable to Zogenix (4) 29,327 (15,134) 14,193 Total purchase price $ 122,180 $ (15,134) $ 107,046 Estimated fair value of net assets acquired: Intangible assets (5): Developed technologies $ 67,400 $ 31,400 $ 98,800 In-process research and development 54,600 (50,400) 4,200 Supplier Contract (6) - 1,142 1,142 Assets acquired 122,000 (17,858) 104,142 Liabilities assumed (6) - (3,726) (3,726) Amount attributable to net assets acquired 122,000 (21,584) 100,416 Goodwill (7) $ 180 $ 6,450 $ 6,630 (1) In accordance with the asset purchase agreement, the Company has deposited $10.0 million in an escrow fund to be held for a period of 12 months from the closing date as a security to pay, or be applied against, any losses incurred by the Company that are subject to the general representations, warranties and indemnification obligations of Zogenix. The Company is considered to be the legal and tax owner of the fund until the expiration of the escrow period of 12 months. Accordingly, the amount of $10.0 million in the escrow fund is recognized as restricted cash and consideration payable to Zogenix. Restricted cash and restricted cash payable are presented separately under current assets and current liabilities, respectively, in the consolidated balance sheets. The conditions for the release of this escrow had been satisfied during the year ended December 31, 2016 and therefore the restricted cash has been released to Zogenix. (2) Under the asset purchase agreement, the Company purchased a specified quantity of Generation 1 version of Zohydro ER product line from Zogenix on the closing date for $927,000. Shortly before the closing date, the Generation 2 version of Zohydro ER with BeadTek was approved by the FDA and was announced by the Company to be launched in the immediate future. This announcement for the launch of Zohydro ER with BeadTek made the Generation 1 version of Zohydro ER obsolete and unsellable in the market. As a result, the fair value of the Generation 1 product inventory acquired from Zogenix has been estimated to be de-minimis on the closing date. (3) Under the asset purchase agreement, the number of common shares issued to Zogenix equaled $20.0 million divided by the closing price of the common stock on a trading day immediately preceding the purchase agreement date. The closing price of the common stock of Pernix on March 9, 2015 (i.e. trading day immediately preceding the purchase agreement date) was $118.90. Accordingly, Pernix issued 168,209 shares of common stock to Zogenix ($20.0 million/$118.90 per share). The common stock issued by the Company is measured at fair value at the closing date (i.e. April 24, 2015) in accordance with the measurement guidance in ASC 805. The closing price of common stock of the Company on the closing date was $70.90 and accordingly the fair value of common stock issued by the Company on the closing date was determined to be $11.9 million. $1,682 representing the par value of 168,209 shares at $0.01 per share was recorded in common stock and the remaining amount of $11.9 million was recorded in Additional paid-in capital. (4) Contingent consideration includes (a) $12.5 million milestone payment payable upon approval of ZX007 abuse-deterrent extended-release hydrocodone tablet, and (b) up to $271 million payable if the Zohydro ER product line achieves certain agreed-upon net sales targets. Each type of contingent consideration has been recognized as a separate unit of account. In accordance with the provisions of ASC 805-30-25-5, each unit of contingent consideration is recognized at the acquisition date fair value. The acquisition date fair value of the contingent consideration linked to FDA approval is $10.3 million and the fair value of the contingent consideration linked to achievement of net sales target is $19.0 million. During the year ended December 31, 2015, the Company recorded measurement period adjustments of $15.1 million, which adjusted the carrying value to $14.2 million. The adjusted values of the contingent consideration linked to FDA approval and net sales targets at December 31, 2016 were $0 and $2.4 million, respectively and $2.7 million and $11.5 million, at December 31, 2015, respectively. The Company recorded $11.7 million and $138,000 as change in fair value of contingent consideration in the years ended December 31, 2016 and 2015, respectively. The total contingent consideration is classified in other long-term liabilities and is marked to its fair value of $2.4 million and $14.1 million as of December 31, 2016 and 2015, respectively. Such fair values are determined based on a probabilistic model with weights assigned on the likelihood of the Company achieving the sales target in the future. Each unit of contingent consideration is classified as a liability in the consolidated balance sheets and will be subsequently measured at fair value on each reporting date. Any change in fair values between the reporting dates will be recognized in the consolidated statements of operations. (5) As of the effective date of the acquisition, identifiable intangible assets are required to be measured at fair value and these acquired assets could include assets that are not intended to be used or sold or that are intended to be used in a manner other than their highest and best use. For purposes of these consolidated financial statements, it is assumed that all assets will be used in a manner that represents the highest and best use of those assets, but it is not assumed that any market synergies will be achieved. The fair value of identifiable assets is determined primarily using the "income method," which starts with a forecast of all expected future cash flows. Some of the more significant assumptions inherent in the development of intangible asset values, from the perspective of a market participant, include: the amount and timing of projected future cash flows (including net revenue, cost of product sales, research and development costs, sales and marketing expenses, income tax expense, capital expenditures and working capital requirements) as well as estimated contributory asset charges; the discount rate selected to measure the risks inherent in the future cash flows; and the assessment of the asset's life cycle and the competitive trends impacting the asset, among other factors. The consolidated financial statements include estimated identifiable intangible assets representing core technology intangibles valued at $98.8 million, and in-process research and development ("IPR&D") intangibles valued at $4.2 million at December 31, 2015. The core technology intangible assets represent developed technology of products approved for sales in the market, which the Company refers to as marketed products, and have finite useful lives. They are amortized on a straight-line basis over a period of 18.3 years. The IPR&D are considered indefinite-lived intangible assets until the completion or abandonment of the associated research and development efforts. Accordingly, during the development period, these assets are not amortized but subject to an annual impairment review. During year ended December 31, 2016, the Company abandoned the IPR&D intangibles discussed above and impaired the $4.2 million. (6) The measurement period adjustments for intangible assets represent recognition of intangible assets related to a favorable supplier contract. The Company assumed the supplier contract from the seller that had favorable terms for the supply of the product. The intangible assets recognized are amortized over the life of the supplier contract. The measurement period adjustments for liabilities assumed represents the amount owed by the Company to Zogenix for the difference between the notional net selling price stipulated in the Asset Purchase Agreement and the discounted price as stipulated in the supplier contract with respect to a particular product. The measurement period adjustment for liabilities consists of $2.4 million related to supplier contracts assumed and $1.3 million related to inventory obsolescence. (7) Goodwill is calculated as the difference between the acquisition date fair value of the consideration expected to be transferred and the fair values assigned to the net assets acquired. Goodwill is not amortized but tested for impairment on an annual basis or when indications for impairment exist. Goodwill is not deductible for tax purposes. Pro forma Impact of Acquisition The following pro forma combined results of operations are provided for the year ended December 31, 2015, as though the Zohydro ER acquisition had been completed as of January 1, 2015. These supplemental pro forma results of operations are provided for illustrative purposes only and do not purport to be indicative of the actual results that would have been achieved by the combined company for the periods presented or that may be achieved by the combined company in the future. The pro forma results of operations do not include any cost savings or other synergies that resulted, or may result, from the Zohydro ER acquisition or any estimated costs that will be incurred to integrate the Zohydro ER product line. Future results may vary significantly from the results in this pro forma information because of future events and transactions, as well as other factors (in thousands, except for per share data): December 31, 2015 (unaudited) Revenue $ 180,856 Net loss $ (166,709) Pro forma net loss per common share: Basic $ (31.26) Diluted $ (31.26) The Company's historical financial information was adjusted to give effect to the pro forma events that were directly attributable to the Zohydro ER acquisition and are factually supportable. The unaudited pro forma consolidated results include historical revenues and expenses of assets acquired in the acquisition with the following adjustments: Adjustment to recognize incremental amortization expense based on the fair value of intangibles acquired; Adjustment to recognize incremental interest expense and amortization of debt issuance costs for debt issued in connection with the acquisition; Eliminate transaction costs and non-recurring charges directly related to the acquisition that were included in the historical results of operations for Pernix; Adjustment to recognize pro forma income tax based on income tax benefit on the amortization of intangible assets at the statutory tax rate of Ireland (12.50%), and the income tax benefit on the interest expense at the statutory tax rate of the United States (36.95%). For the year ended December 31, 2015, the Company has recognized revenue for Zohydro ER subsequent to the closing of April 24, 2015 in the amount of $16.5 million and pre-tax net loss of $14.6 million. Non-recurring transaction costs of $2.9 million related to the acquisition for the year ended December 31, 2015 are included in the consolidated statements of operations in selling, general and administrative expense. These non-recurring transaction costs have been excluded from the pro forma results in the above table. Treximet Acquisition On August 20, 2014, the Company, through a wholly owned subsidiary PIL, formerly known as Worrigan Limited, completed the acquisition of the U.S. intellectual property rights to the pharmaceutical product, Treximet, from GSK. There were no other tangible or intangible assets acquired or liabilities assumed related to Treximet intellectual property from GSK. The total purchase price consisted of an upfront cash payment of $250.0 million paid to GSK upon closing of the transaction, and $17.0 million payable to GSK upon receipt of an updated FDA-issued "Written Request" for pediatric exclusivity from the FDA, subject to certain deductions based on delays in supplying the commercial product to the Company. Subsequently, the deductions resulting from delays in supplying the commercial product reduced the $17.0 million payable amount to $1.95 million, which was paid during the fourth quarter of 2014. The Company funded this acquisition with $220.0 million in debt, plus approximately $32.0 million from available cash. Treximet is a medication indicated for the acute treatment of migraine pain and inflammation and is manufactured by GSK under a license from Pozen. In June 2003, Pozen licensed the U.S. only rights to Treximet to GSK. GSK was responsible for all commercialization activities in the U.S. The product was approved by the FDA in April 2008. In November 2011, Pozen sold most of the future royalty and milestone payments covering Treximet sales in the U.S. to CPPIB Credit Investments Inc. ("CPPIB"). Treximet is covered by three patents in the U.S. which expire August 14, 2017. In addition, the Company received pediatric exclusivity and may seek other potential FDA exclusivity options, which may provide an additional six months to three years of exclusivity. In connection with the transaction, GSK assigned to PIL the Product Development and Commercialization Agreement, (the PDC Agreement) between GSK and Pozen. In connection with the assignment of the PDC Agreement, PIL paid $3.0 million to CPPIB (which owns the rights to the royalty payments under the PDC Agreement), and the Company granted Pozen a warrant (the Warrant) to purchase 50,000 shares of the Company's common stock at an exercise price of $42.80 per share (the closing price of the Company's common stock on May 13, 2014 as reported on NASDAQ). The Warrant is exercisable from the closing date (August 20, 2014) of the PDC Agreement until February 28, 2018. The Company will continue to pay a royalty to Pozen under the PDC Agreement, equal to 18% of Treximet net sales with quarterly minimum royalty amounts of $4.0 million for the calendar quarters commencing on January 1, 2015 and ending on March 31, 2018.

5. Accounts Receivable

5. Accounts Receivable	12 Months Ended
	Dec. 31, 2016
Accounts Receivable, Net [Abstract]
5. Accounts Receivable	Note 5. Accounts Receivable Accounts receivable consist of the following (in thousands): December 31, 2016 2015 Trade accounts receivable $ 50,532 $ 60,564 Less allowance for prompt pay discounts (1,038) (1,844) Less allowance for doubtful accounts (500) (15) Total trade receivables, net 48,994 58,705 Receivables from third parties 1,200 1,594 Other miscellaneous receivables 535 910 Total accounts receivable, net $ 50,729 $ 61,209 The Company typically requires customers to remit payments within the first 30 days for brand purchases and 60 to 75 days for generic purchases (depending on the customer and the products purchased). The Company offers wholesale distributors a prompt payment discount, which is typically between two and three percent as an incentive to remit payment within this timeframe. Accounts receivable are stated net of the estimated prompt pay discount.

6. Notes Receivable

6. Notes Receivable	12 Months Ended
	Dec. 31, 2016
Notes Receivable
6. Notes Receivable	Note 6. Notes Receivable The Company received two promissory notes from Breckenridge in connection with the sale of its generic assets held by Cypress to Breckenridge on September 11, 2013. The notes matured on the first and second anniversary dates of the closing. The one-year promissory note was paid in full during the year ended December 31, 2014 in the amount of $4.9 million. The remaining two-year promissory note in the amount of $4.9 million matured and was paid in full on September 11, 2015.

7. Inventory

7. Inventory	12 Months Ended
	Dec. 31, 2016
Inventory Disclosure [Abstract]
7. Inventory	Note 7. Inventory Inventories consist of the following (in thousands): December 31, 2016 2015 Raw materials $ 2,365 $ 2,047 Work-in-process - 1,425 Finished goods 7,393 9,011 Inventory, gross 9,758 12,483 Reserve for obsolescence (1,983) (2,448) Inventory, net $ 7,775 $ 10,035

8. Property, Plant & Equipment

8. Property, Plant & Equipment	12 Months Ended
	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
8. Property, Plant & Equipment	Note 8. Property, Plant & Equipment December 31, 2016 2015 Land $ - $ 572 Buildings and improvements 31 31 Equipment 622 840 Furniture and fixtures 701 713 Computer software and website 447 657 Total fixed assets 1,801 2,813 Less: accumulated depreciation (698) (467) Total property and equipment $ 1,103 $ 2,346 Depreciation expense amounted to approximately $704,000 and $361,000 for the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016, the Company has classified $525,000 of land as held for sale, which is included in prepaid expenses and other current assets on the consolidated balance sheet. The carrying value reflects the estimated selling price based on market data, which is a Level 2 input. During the year ended December 31, 2016, the Company recorded an impairment loss of $47,000, related to the write-down of land held for sale, as the book value of the property was in excess of its fair value less costs to sell. The Company is actively marketing the land held for sale as of December 31, 2016 and expects it to be sold within one year.

9. Goodwill and Intangible Asse

9. Goodwill and Intangible Assets	12 Months Ended
	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
9. Goodwill and Intangible Assets	Note 9. Goodwill and Intangible Assets Goodwill consists of the following (in thousands): Amount Balance at December 31, 2014 $ 44,900 Goodwill acquired - Zohydro 180 Measurement period adjustments - Zohydro 6,949 Measurement period adjustments - Treximet 2,836 Balance at December 31, 2015 54,865 Goodwill impairment (23,766) Measurement period adjustments - Zohydro (499) Balance at December 31, 2016 $ 30,600 During the Company's annual impairment test it was noted that the Company's carrying value exceeded its fair value and therefore the Company failed Step 1 and performed Step 2 of the goodwill impairment test. Step 2 of the impairment test determined a $23.8 million impairment charge for goodwill. Intangible assets consist of the following (dollars in thousands): As of December 31, 2016 Weighted Gross Carrying Accumulated Net Carrying Average Life Amount Impairment Amortization Amount Unamortized intangible assets: In-process research and development Indefinite $ 26,500 $ (15,500) $ - $ 11,000 Total unamortized intangible assets 26,500 (15,500) - 11,000 Amortized intangible assets: Brand 0.0 years 3,887 (891) (2,996) - Product licenses 8.4 years 2,846 - (1,232) 1,614 Supplier contracts 5.0 years 583 - (78) 505 Acquired developed technologies 7.7 years 379,737 (15,052) (208,233) 156,452 Total amortized intangible assets 387,053 (15,943) (212,539) 158,571 Total intangible assets $ 413,553 $ (31,443) $ (212,539) $ 169,571 As of December 31, 2015 Weighted Gross Carrying Accumulated Net Carrying Average Life Amount Impairment Amortization Amount Unamortized intangible assets: Trademark rights Indefinite $ 400 $ (400) $ - $ - In-process research and development Indefinite 29,500 (3,000) - 26,500 Total unamortized intangible assets 29,900 (3,400) - 26,500 Amortized intangible assets: Patents 11.0 years 500 (106) (394) - Brand 8.0 years 3,887 - (2,794) 1,093 Product licenses 10.5 years 17,581 (10,059) (5,542) 1,980 Non-compete and supplier contracts 5.6 years 6,337 - (6,337) - Acquired developed technologies 4.1 years 391,624 (10,787) (124,467) 256,370 Total amortized intangible assets 419,929 (20,952) (139,534) 259,443 Total intangible assets $ 449,829 $ (24,352) $ (139,534) $ 285,943 As of December 31, 2016, the weighted average life for the Company's definite-lived intangible assets in total was approximately 7.7 years. In connection with the acquisition of the Zohydro ER acquisition (see Note 4, Business Combinations and Other Acquisitions, In connection with the acquisition of the Treximet intangible assets (see Note 4, Business Combinations and Other Acquisitions, During 2016, the Company determined that the carrying value of certain of its intangible assets were not recoverable based upon the existence of one or more of the indicators of impairment. The Company measured these impairments based on a probability weighted projected discounted cash flow method using a discount rate determined to be commensurate with the risk inherent in the Company's current business model and therefore, recorded impairment charges of approximately $15.5 million against IPR&D (including the $4.2 million in the preceding paragraph), $891,000 against brands, and $15.1 million against acquired developed technologies. During 2015, the Company recorded impairment charges of approximately $400,000 against trademark rights, $3.0 million against IPR&D, $106,000 against patents, $10.1 million against product licenses and $10.8 million against acquired developed technologies. The Company decided during the year ended December 31, 2015 to focus its efforts on certain core products and no longer promote certain other products, which are not aligned with this business strategy or due to the termination of certain contractual agreements. Estimated amortization expense related to intangible assets with definite lives for each of the five succeeding years and thereafter is as follows (in thousands): Amount 2017 $ 72,940 2018 13,961 2019 5,507 2020 5,420 2021 5,325 Thereafter 55,418 Total $ 158,571 Amortization expense was $85.5 million, of which, $78,000 is included in the cost of product sales and $94.3 million for the years ended December 31, 2016 and 2015, respectively.

10. Accrued Allowances

10. Accrued Allowances	12 Months Ended
	Dec. 31, 2016
Accrued Liabilities [Abstract]
10. Accrued Allowances	Note 10. Accrued Allowances Accrued allowances consist of the following (in thousands): December 31, 2016 2015 Accrued returns allowance $ 18,314 $ 11,896 Accrued price adjustments 35,234 44,100 Accrued government program rebates 7,413 6,682 Total $ 60,961 $ 62,678

11. Accrued Expenses

11. Accrued Expenses	12 Months Ended
	Dec. 31, 2016
Accounts Payable and Accrued Liabilities [Abstract]
11. Accrued Expenses	Note 11. Accrued Expenses Accrued expenses consist of the following (in thousands): December 31, 2016 2015 Due to third parties (revenue sharing arrangements) $ 5,402 $ 6,995 Other accrued expenses 3,309 2,360 Total $ 8,711 $ 9,355

12. Other Liabilities

12. Other Liabilities	12 Months Ended
	Dec. 31, 2016
Other Liabilities [Abstract]
12. Other Liabilities	Note 12. Other Liabilities Other liabilities consist of the following (in thousands): December 31, 2016 2015 Settlement obligations (see Note 19) $ 7,783 $ 12,955 Deferred revenue 283 314 Other 1,658 222 Total contracts payable and other obligations 9,724 13,491 Less current portion (5,224) (6,753) Other liabilitites - long-term $ 4,500 $ 6,738

13. Debt and Lines of Credit

13. Debt and Lines of Credit	12 Months Ended
	Dec. 31, 2016
Debt Disclosure [Abstract]
13. Debt and Lines of Credit	Note 13. Debt and Lines of Credit Debt consists of the following (in thousands): December 31, 2016 2015 Wells Fargo Credit Facility $ 14,000 $ 15,000 4.25% Convertible Notes 104,071 99,776 Treximet Secured Notes 183,353 202,050 Total outstanding debt 301,424 316,826 Less current portion 11,103 13,335 Long term debt outstanding $ 290,321 $ 303,491 The following table represents, by year, the future maturity schedule of the outstanding debt and line of credit as of December 31, 2016 (in thousands): Amount 2017 $ 12,812 2018 14,000 2019 - 2020 176,769 2021 130,000 Thereafter - Total maturities 333,581 Less: note discount and deferred financing costs (32,157) Total outstanding debt $ 301,424 Interest expense amounted to $37.9 million and $38.3 million for the years ended December 31, 2016 and 2015, respectively. Credit Facilities: Wells Fargo On August 21, 2015, the Company entered into a Credit Agreement with Wells Fargo, National Association, as Administrative Agent and the lenders party thereto for a $50.0 million, three-year senior secured revolving credit facility (the Wells Fargo Credit Facility), which may be increased by an additional $20.0 million in the lenders' discretion. The Company's obligations under the Wells Fargo Credit Facility are secured by, among other things, the Company's and certain subsidiaries' inventory and accounts receivable, and are guaranteed by certain of the Company's subsidiaries. As of December 31, 2016, $14.0 million is outstanding under the Wells Fargo Credit Facility and classified as Credit facilities - long-term on the consolidated balance sheets. Availability of borrowings under the Wells Fargo Credit Facility from time to time is subject to a borrowing base calculation based upon a valuation of the Company's eligible inventories and eligible accounts receivable, each multiplied by an applicable advance rate. Borrowing availability under the Wells Fargo Credit Facility was $16.9 million as of December 31, 2016. Pursuant to the terms of the Wells Fargo Credit Facility, the Administrative Agent has the authority to impose reserves against our borrowing base under certain circumstances in its sole discretion. We understand that the Administrative Agent is currently evaluating whether to impose such a reserve. If the Administrative Agent were to impose such a reserve, depending on the Company's inventory levels and the size of the reserve, the Company's excess availability under the Wells Fargo Credit Facility could fall below $10.0 million, which, in turn, would trigger an obligation for the Company to meet a 1 to 1 fixed charge coverage ratio test. If the Company were unable to meet this fixed charge coverage ratio test, the Company would be in default under the terms of the Wells Fargo Credit Facility. If the Company were to be in default, the Company anticipate that it would consider entering into a forbearance agreement with the Administrative Agent or seeking an alternative funding source. There can be no assurance that the Company would be able enter into a forbearance agreement or find an alternative funding source on satisfactory terms, or at all. MidCap Funding V, LLC On August 21, 2015, the Company terminated the Amended and Restated Credit Agreement, dated as of May 8, 2013, as amended, by and among MidCap Funding IV, LLC, and certain subsidiaries of the Company and repaid all outstanding loans thereunder (the MidCap Credit Facility). The MidCap Credit Facility provided for a $20.0 million revolving loan commitment and a $20 million uncommitted accordion feature. The obligations under the MidCap Credit Facility were secured by a first priority security interest in the Company's accounts, inventory, deposit accounts, securities accounts, securities entitlements, permits and cash and bore interest at a rate equal to the sum of the LIBOR (with a floor of 1.5%) plus an applicable margin of 7.50% per annum. The MidCap Credit Facility has been closed and has been replaced with the Wells Fargo Credit Facility. Convertible Notes: 4.25% Convertible Notes On April 22, 2015, the Company issued $130.0 million aggregate principal amount 4.25% Convertible Senior Notes (the 4.25% Convertible Notes). The 4.25% Convertible Notes mature on April 1, 2021, unless earlier converted, redeemed or repurchased. The Company received net proceeds from the sale of the 4.25% Convertible Notes of $125.0 million, after deducting placement agent fees and commissions and offering expenses payable by the Company. Interest on the 4.25% Convertible Notes is payable on April 1 and October 1 of each year, beginning October 1, 2015. The discounted note balance of $107.4 million and $103.8 million is recorded as long-term debt on the consolidated balance sheet as of December 31, 2016 and 2015, respectively. The 4.25% Convertible Notes are governed by the terms of an indenture (the Indenture), between the Company and Wilmington Trust, National Association (the Trustee), each of which were entered into on April 22, 2015. The Company may not redeem the 4.25% Convertible Notes prior to April 6, 2019. However, the holders may convert their 4.25% Convertible Notes at any time prior to the close of business on the business day immediately preceding January 1, 2021 only under certain circumstances. Upon conversion, the Company will deliver a number of shares of the Company's common stock equal to the conversion rate in effect on the conversion date. Effective upon the Reverse Stock Split, the conversion rate decreased from 87.2030 shares of the Company's common stock for each $1,000 principal amount of the 4.25% Convertible Notes to 8.7237 shares of the Company's common stock for each $1,000 principal amount of the 4.25% Convertible Notes, which represents a conversion price of approximately $114.63 per share. Following certain corporate transactions that can occur on or prior to the stated maturity date, the Company will increase the conversion rate for a holder that elects to convert its 4.25% Convertible Notes in connection with such a corporate transaction. In addition to the holder option to convert, the 4.25% Convertible Notes may be redeemed upon the occurrence of certain events. The Company incurred debt issuance costs of approximately $5.0 million, which have been deferred and which are being amortized over a six-year period, unless earlier converted, in which case the unamortized costs would be recorded in additional paid-in capital. The effective interest rate on the 4.25% Convertible Notes, including debt issuance costs and bifurcated conversion option derivative (discussed below), is 9.7%. The Company is required to separate the conversion option in the 4.25% Convertible Notes under ASC 815, Derivatives and Hedging Debt with Conversion and Other Options In addition to the bifurcated conversion feature, there are two other features that require bifurcation but contain de minimis value. Although the probability was considered remote, at the time of the transaction, that (1) additional interest would be incurred for failure to file financial statements timely or (2) the 4.25% Convertible Notes would be redeemed by the Company following the failure of the Zohydro ER acquisition to close prior to July 8, 2015. The Company will continue to monitor the timely filing of its financial statements for any additional interest that could be incurred. Interest expense was $9.1 million and $6.1 million for the years ended December 31, 2016 and 2015, respectively, related to the 4.25% Convertible Notes. Change in fair value of derivative liability was income of $8.9 million and $19.3 million for the years ended December 31, 2016 and 2015, respectively. Accrued interest on the 4.25% Convertible Notes was approximately $1.4 million as of December 31, 2016 and December 31, 2015, respectively. As of December 31, 2016 and December 31, 2015, the Company had outstanding borrowings of $130.0 million related to the 4.25% Convertible Notes. 8.00% Convertible Notes On April 16, 2015, the Company entered into an agreement (the Inducement Agreement) with all of the holders of its 8.00% Convertible Senior Notes due 2019 (the 8.00% Convertible Notes) representing $65.0 million aggregate principal amount, pursuant to which such holders agreed to the removal of substantially all of the material restrictive covenants in the indenture governing the 8.00% Convertible Notes and to convert their notes in accordance with the provisions of such indenture in exchange for an aggregate of 233,813 shares of the Company's common stock (the Inducement Shares). The Company recorded $19.5 million as cost of inducement expense in the year ended December 31, 2015. The issuance of the Inducement Shares was made pursuant to an exemption from the registration requirements of the Securities Act contained in Section 4(a)(2). Each of the holders entering into the Inducement Agreement agreed not to sell the shares of the Company's common stock to be issued to it upon conversion of the 8.00% Convertible Notes for 145 days (the lock-up period) subject to exceptions, including in connection with settling existing short positions with respect to the 8.00% Convertible Notes and underwritten public offerings pursuant to existing registration rights with respect to such shares of the Company's common stock. In addition, such holders are permitted to dispose of up to 80 percent of such shares of the Company's common stock remaining after settling existing short positions prior to the end of the lock-up period in specified intervals. During the year ended December 31, 2015, the holders of the 8.00% Convertible Notes converted the outstanding notes at a conversion price of $36.00 per share. The Company issued 1.8 million shares pursuant to this conversion and retired the $65.0 million of the outstanding 8.00% Convertible Notes. Interest expense was $0 and $1.6 million for the years ended December 31, 2016 and 2015, respectively related to the 8.00% Convertible Notes. As of December 31, 2016 and 2015, the Company had outstanding borrowings of $0 related to the 8.00% Convertible Notes, respectively. Accrued interest on the 8.00% Convertible Notes was $0 as of December 31, 2016 and 2015, respectively. Interest expense of $547,000 that accrued during the year ended December 31, 2015 was forfeited and recorded in additional paid-in capital. During the year ended December 31, 2015, the Company recorded the remaining $5.4 million unamortized deferred financing costs related to the 8.00% Convertible Notes in additional paid-in capital. Secured Notes: Treximet Note Offering On August 19, 2014, the Company issued $220.0 million aggregate principal amount of its 12% Senior Secured Notes due 2020 (the Treximet Secured Notes) pursuant to an Indenture (the August 2014 Indenture) dated as of August 19, 2014 among the Company, certain of its subsidiaries (the Guarantors) and U.S. Bank National Association (the August 2014 Trustee), as trustee and collateral agent. The Treximet Secured Notes mature on August 1, 2020 and bear interest at a rate of 12% per annum, payable in arrears on February 1 and August 1 of each year (each, a Payment Date), beginning on February 1, 2015. On each Payment Date, commencing August 1, 2015, the Company will pay an installment of principal of the Treximet Secured Notes in an amount equal to 50% of net sales of Treximet for the two consecutive fiscal quarters immediately preceding such Payment Date (less the amount of interest paid on the Treximet Secured Notes on such Payment Date). At each month-end beginning with January 2015, the net sales of Treximet will be calculated, the monthly interest accrual amount will then be deducted from the net sales and this resulting amount will be recorded as the current portion of the Treximet Secured Notes. If the Treximet net sales less the interest due at each month-end of each six-month period does not result in any excess over the interest due, no principal payment must be paid at that time. The remaining balance outstanding on the Treximet Secured Notes will be due on the maturity date, which is August 1, 2020. As of December 31, 2016 and 2015, the Company classified $12.8 million and $15.0 million, respectively, of the Treximet Secured Notes as a current liability. The Treximet Secured Notes are unconditionally guaranteed, jointly and severally, by the Guarantors. The Treximet Secured Notes and the guarantees of the Guarantors are secured by a continuing first-priority security interest in substantially all of the assets of the Company and the Guarantors related to Treximet other than inventory and certain inventory related assets, including accounts arising from the sale of the inventory. The Company may redeem the Treximet Secured Notes at its option, in whole at any time or in part from time to time, on any business day, on not less than 30 days nor more than 60 days prior notice provided to each holder's registered address. If such redemption was prior to August 1, 2015, the redemption price would have been equal to the greater of (i) the principal amount of the Treximet Secured Notes being redeemed and (ii) the present value, discounted at the applicable treasury rate of the principal amount of the Treximet Secured Notes being redeemed plus 1.00%, of such principal payment amounts and interest at the rate per annum shown above on the outstanding principal balance of the Treximet Secured Notes being redeemed assuming the principal balances were amortized at the times and in the assumed amounts set forth on Schedule A to the August 2014 Indenture. If such redemption occurred on or after August 1, 2015 and prior to August 1, 2016, the redemption price would have been equal to 106% of the outstanding principal amount of Treximet Secured Notes being redeemed plus accrued and unpaid interest thereon, or occurs (i) on or after August 1, 2016 and prior to August 1, 2017, the redemption price will equal 103% of the outstanding principal amount of the Treximet Secured Notes being redeemed plus accrued and unpaid interest thereon and (ii) on or after August 1, 2017, the redemption price will equal 100% of the outstanding principal amount of the Treximet Secured Notes being redeemed plus accrued and unpaid interest thereon. The August 2014 Indenture contains covenants that limit the ability of the Company and the Guarantors to, among other things: incur certain additional indebtedness; pay dividends on, redeem or repurchase stock or make other distributions in respect of its capital stock; repurchase, prepay or redeem certain indebtedness; make certain investments; create restrictions on the ability of the Guarantors to pay dividends to the Company or make other intercompany transfers; create liens; transfer or sell assets; consolidate, merge or sell or otherwise dispose of all or substantially all of its assets and enter into certain transactions with affiliates. Upon the occurrence of certain events constituting a change of control, the Company is required to make an offer to repurchase all of the Treximet Secured Notes (unless otherwise redeemed) at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any to the repurchase date. The August 2014 Indenture provides that an Event of Default (as defined in the August 2014 Indenture) will occur if, among other things, (a) the Company defaults in any payment of interest on any note when due and payable, and such default continues for a period of 30 days; (b) the Company defaults in the payment of principal of or premium, if any, on any note when due and payable on the maturity date, upon declaration of acceleration or otherwise, or to pay the change of control repurchase price, when due and payable, and such default continues for a period of five days; (c) failure to make a repurchase offer in the event of a change in control when required under the August 2014 Indenture, which continues for three business days; (d) the Company or any Guarantor fails to comply with certain covenants after receiving written notice from the August 2014 Trustee or the holders of more than 25% of the principal amount of the outstanding Treximet Secured Notes; (e) the Company or any Guarantor defaults with respect to other indebtedness for borrowed money in excess of $8.0 million and such default is not cured within 30 days after written notice from the August 2014 Trustee or the holders of more than 25% of the principal amount of the outstanding Treximet Secured Notes; (f) the Company or any Guarantor has rendered against it a final judgment for the payment of $8.0 million (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) under certain circumstances; (g) certain bankruptcy, insolvency, liquidation, reorganization or similar events occur with respect to the Company or any Guarantor; (h) a guarantee of the Treximet Secured Notes (with certain exceptions) is held to be unenforceable or invalid in a judicial proceeding or ceases to be in full force and effect or a Guarantor disaffirms its obligations under its guarantee of the Treximet Secured Notes; and (i) certain changes in control of a Guarantor. Interest expense related to the Treximet Secured Notes was $23.3 million and $25.9 million, for the years ended December 31, 2016 and 2015, respectively. Accrued interest on the Treximet Secured Notes was approximately $9.5 million and $10.5 million as of December 31, 2016 and 2015, respectively. The Company recorded debt issuance costs of $7.8 million, which are being amortized using the effective interest method. As of December 31, 2016, $1.3 million and $3.4 million are recorded on the consolidated balance sheet in Treximet Secured Notes - current and Treximet Secured Notes long-term, respectively. As of December 31, 2015, $1.3 million and $4.7 million are recorded on the consolidated balance sheet in Treximet Secured Notes - current and Treximet Secured Notes long-term, respectively. On April 13, 2015, the Company furnished to the holders of the Treximet Secured Notes a Consent Solicitation Statement (the Consent Solicitation). The Consent Solicitation sought the consent of the holders of a majority of the principal amount of the Treximet Secured Notes to amend the August 2014 Indenture, that governs the Treximet Secured Notes to allow the Company to, among other things, incur up to $42.2 million of additional debt (the Indenture Amendments) in exchange for a consent fee in cash equal to 1% of the principal amount of consenting Treximet Secured Notes (the Consent Fees). Through April 28, 2015, the Company received consent to the Indenture Amendments from holders representing approximately 98% of the principal amount of the Notes, and subsequently paid the holders approximately $2.2 million during the year ended December 31, 2015. The cost of inducement of $403,000 and $1.1 million is recorded in Treximet Secured Notes - current and Treximet Secured Notes - long term on the consolidated balance sheet at December 31, 2016, respectively and $403,000 and $1.5 million is recorded in Treximet Secured Notes - current and Treximet Secured Notes - long term on the consolidated balance sheet at December 31, 2015, respectively and are being amortized using the straight-line method, which approximates the effective interest method.

14. Stockholders' Equity

14. Stockholders' Equity	12 Months Ended
	Dec. 31, 2016
Stockholders Equity
14. Stockholders' Equity	Note 14. Stockholders' Equity Reverse Stock Split On October 13, 2016, the Company effectuated a reverse stock split of its outstanding shares of common stock at a ratio of 1 to 10. Upon the effectiveness of the Reverse Stock Split, which occurred on October 13, 2016, the Company's issued and outstanding shares of common stock was decreased from 94,961,549 to 9,499,812 shares, all with a par value of $0.01. Accordingly, all share and per share information has been restated to retroactively show the effect of the Reverse Stock Split. Capital Stock In July 2015, the Company filed an Articles of Amendment of the Amended and Restated Articles of Incorporation of the Company (the Articles of Amendment) with the State Department of Assessment and Taxation of Maryland. The Articles of Amendment amended the Company's Amended and Restated Articles of Incorporation by increasing the number of authorized shares of the Company's common stock from 90,000,000 shares to 140,000,000 shares and the attendant increase in capital stock of all classes from 100,000,000 to 150,000,000, consisting of 140,000,000 shares of common stock and 10,000,000 shares of preferred stock, which shall include 1,000,000 shares of Series B junior participating stock. The Company did not change the authorized number of shares of preferred stock. In April 2015, the Company issued 168,207 shares of common stock for approximately $11.9 million in connection with the acquisition of Zohydro ER, see Note 4, Business Combination and Other Acquisitions In April 2015, the Company issued 233,813 shares of Common stock for approximately $19.5 million for the inducement, which was recorded as an expense in the year ended December 31, 2015, and 1,805,556 shares for $60.2 million, net of deferred financing costs and accrued interest forfeited of $4.8 million in connection with the conversion of the outstanding 8.00% Convertible Notes, see Note 13, Debt and Lines of Credit. Controlled Equity Offering On November 7, 2014, the Company entered into a controlled equity offering sales agreement (the Sales Agreement) with Cantor Fitzgerald & Co. (Cantor) pursuant to which the Company could issue and sell shares of its common stock having an aggregate offering price of up to one hundred million dollars, pursuant to an effective registration statement on Form S-3 (No. 333-200005), from time to time through Cantor, acting as agent. The Company will pay Cantor a commission rate of 3.0% of the gross sales price per share of the common stock sold through Cantor as agent under the Sales Agreement. During the year ended December 31, 2016, the Company sold 3,859,903 shares of common stock under the Sales Agreement at an average price of approximately $5.28 per share for gross proceeds of $20.4 million and net proceeds of $19.8 million, after deducting Cantor's commission. As of December 31, 2016, approximately $79.6 million of common stock remained available to be sold under this facility. Warrants Issued in Acquisition of Somaxon In connection with the acquisition of Somaxon in March 2013, the Company assumed approximately 46,900 outstanding warrants in the acquisition of Somaxon. These warrants have exercise prices ranging from $77.03 to $907.21 and expiration dates ranging from July 2016 through December 2021. As of December 31, 2016, the Company has 32,992 outstanding warrants in connection with these warrants. Warrants Issued in Acquisition of Treximet In connection with the acquisition of Treximet in August 2014, the Company granted Pozen a warrant to purchase 50,000 shares of the Company's common stock at an exercise price of $42.80 per share (equal to the closing price of the Company's common stock on May 13, 2014 as reported on NASDAQ). The Warrant was exercisable from the closing date (August 20, 2014) of the Agreement until February 28, 2018. The warrants were recorded at fair value to stockholders' equity as part of the purchase price allocation as of December 31, 2015. In March 2015, Pozen exercised all 50,000 of their warrants in a cashless exercise for which 31,584 shares were issued. Warrants Issued in connection with Issuance of the 8.00% Convertible Notes The Company issued to Frontline Pharmaceuticals LLC warrants to purchase 50,000 shares of Pernix common stock at an exercise price of $36.00 per share. The warrants were issued as compensation for services Frontline provided to the Company in connection with the sale of the 8.0% Convertible Notes and in connection with the settlement of a lawsuit instituted by Frontline against the Company in October 2014. The exercise price of the warrant equals the conversion price of the convertible notes. The warrants were recorded at a fair value of $841,000 to stockholders' equity as additional paid in capital. In February 2015 and July 2015, Frontline exercised 22,264 and 27,737, respectively, of their warrants in cashless exercises for which 21,757 shares were issued. There are no warrants remaining for Frontline. Treasury Shares The Company reclassified the $5.6 million of outstanding treasury stock from Treasury stock to Common stock and Additional paid-in capital at December 31, 2016 and the 278,239 shares were permanently retired.

15. Concentrations

15. Concentrations	12 Months Ended
	Dec. 31, 2016
Concentration Risks, Types, No Concentration Percentage [Abstract]
15. Concentrations	Note 15. Concentrations The Company's customers consist of drug wholesalers, retail drug stores, mass merchandisers and grocery store pharmacies in the United States. The Company primarily sells products directly to drug wholesalers, which in turn, distribute the products to retail drug stores, mass merchandisers and grocery store pharmacies. The following tables list the Company's customers that individually comprise greater than 10% of total gross product sales (before gross to net deductions) and their aggregate percentage of the Company's total gross product sales for the years ended December 31, 2016 and 2015, and the customers that comprise more than 10% of total accounts receivable and such customers' aggregate percentage of the Company's total accounts receivable as of the years ended December 31, 2016 and 2015: Gross Product Sales 2016 2015 McKesson Corporation 36% 38% AmerisourceBergen Drug Corporation 31% 27% Cardinal Health, Inc. 26% 28% Total 93% 93% Accounts Receivable 2016 2015 McKesson Corporation 36% 34% AmerisourceBergen Drug Corporation 28% 30% Cardinal Health, Inc. 28% 28% Total 92% 92%

16. Other Revenue Sharing Arran

16. Other Revenue Sharing Arrangements	12 Months Ended
	Dec. 31, 2016
Notes to Financial Statements
16. Other Revenue Sharing Arrangements	Note 16. Other Revenue Sharing Arrangements The Company enters into collaborative arrangements to develop and commercialize drug candidates. Collaborative activities might include research and development, marketing and selling (including promotional activities and physician detailing), manufacturing, and distribution. These collaborations often require royalty or profit share payments, contingent upon the occurrence of certain future events linked to the success of the product. Revenues related to products sold by the Company pursuant to these arrangements are included in product sales, while other sources of revenue such as royalties and profit share receipts are included in collaboration, royalty and other revenue as further discussed below. Operating expenses for costs incurred pursuant to these arrangements are reported in their respective expense line item. Co-promotion Agreements The Company seeks to enter into co-promotion agreements to enhance the promotional efforts and sales of products. The Company may enter into co-promotion agreements whereby it obtains rights to market other parties' products in return for certain commissions or percentages of revenue on the sales Pernix generates. Alternatively, Pernix may enter into co-promotion agreements with respect to its products whereby it grants another party certain rights to market or otherwise promote one or more of its products. Typically, the Company will enter into this type of co-promotion arrangement when a particular product is not aligned with its product focus or it lacks sufficient sales force representation in a particular geographic area. Co-promotion revenue is included in net revenues. Expense from co-promotion agreements is included in cost of products sold. For the years ended December 31, 2016 and 2015, the Company recognized approximately $18.2 million and $25.4 million, respectively, in expense included in cost of goods sold from payments pursuant to co-promotion and other revenue sharing arrangements. Co-promotion, royalty and other revenues were $466,000 and $4.6 million for the years ended December 31, 2016 and 2015, respectively. On October 28, 2013, the Company entered into an agreement with Cumberland Pharmaceuticals Inc. to promote Omeclamox-Pak. Pursuant to the agreement, Cumberland will promote Omeclamox-Pak to gastroenterologists in the United States, and the Company will continue to promote the product to certain primary care physicians. This agreement provides for various types of payments, including non-refundable upfront license fees, milestone payments, and future royalties on Cumberland's net product sales of Omeclamox. The Company received a non-refundable upfront payment of $4.0 million upon execution of the agreement. The terms of the arrangement with Cumberland include continuing performance obligations that were conditions to Cumberland's decision to pursue promotion of this product. Due to these ongoing performance obligations, the Company determined that the promotion rights did not have stand-alone value. The Company also did not have objective and reliable evidence of the fair value of these undelivered obligations. Accordingly, amounts received upfront under the license agreement were recorded as deferred revenue and were being recognized on a straight-line basis over the term of the agreement. On November 16, 2015, the Company terminated this agreement and recognized the remaining deferred revenue of $3.0 million during the year ended December 31, 2015. There were additional milestones at the first and second anniversary dates of the execution of the agreement totaling $4.0 million in the aggregate. These milestones were not met and have been canceled. Royalty payments ranging from 15% to 20% were based on tiered levels of gross profits and paid by Cumberland to the Company monthly. In connection with the acquisition of Treximet, the Company is responsible for the payment of royalties to Pozen of 18% of net sales with quarterly minimum royalty amounts of $4.0 million for the calendar quarters commencing on January 1, 2015 and ending on March 31, 2018. See Note 4, Business Combinations and Other Acquisitions In connection with the acquisition of Zohydro, the Company is responsible for the payment of royalties to Recro of 6% of net sales. See Note 4, Business Combinations and Other Acquisitions

17. Stock Benefit Plans and Sto

17. Stock Benefit Plans and Stock-Based Compensation Plans	12 Months Ended
	Dec. 31, 2016
Employee Benefits and Share-based Compensation [Abstract]
17. Stock Benefit Plans and Stock-Based Compensation Plans	Note 17. Stock Benefit Plans and Stock-Based Compensation Plans The Company maintains a tax-qualified employee savings and retirement plan (401(k) Plan) covering all of the Company's full-time employees in the United States. Pursuant to the 401(k) Plan, employees may elect to reduce their current compensation up to the maximum percent allowable, not to exceed the limits of the code section 401(k), 403(b), 404 and 415, of eligible compensation or the prescribed IRS annual limit and have the amount of such reduction contributed to the 401(k) Plan. The 401(k) Plan permits, but does not require, additional matching contributions to the 401(k) Plan by the Company on behalf of all participants. During the years ended December 31, 2016 and 2015, the Company matched 100% of employee contributions up to 3% of employee pre-tax contributions and 50% of employee contribution over 3% up to 5% of employee pre-tax contributions. The 401(k) Plan currently meets the minimum requirements of a Safe Harbor 401(k) plan. Effective January 1, 2016, all eligible employees are automatically enrolled in the plan, unless the employee elects to not participate in the plan. Employees are 100 percent vested in employee and employer contributions once they are eligible to participate. Contribution expense was approximately $950,000 and $519,000 for the years ended December 31, 2016 and 2015, respectively. In June 2015, the Company's shareholders approved the 2015 Omnibus Incentive Plan (the 2015 Plan). The maximum number of shares that can be offered under this plan is 700,000. Incentives may be granted under the 2015 Plan to eligible participants in the form of (a) incentive stock options, (b) non-qualified stock options, (c) restricted shares, (d) restricted stock units, (e) share appreciation rights and (f) other share-based awards. Incentive grants under the 2015 Plan generally vest based on four years of continuous service and have 10-year contractual terms. The Company's 2009 Stock Incentive Plan (the 2009 Plan) was approved concurrent with its merger with Golf Trust of America (GTA), Inc. on March 9, 2010 and subsequently amended. The maximum number of shares that can be offered under this plan, as amended, is 775,000. Incentives may be granted under the 2009 Plan to eligible participants in the form of (a) incentive stock options, (b) non-qualified stock options, (c) restricted stock, (d) restricted stock units, (e) stock appreciation rights and (f) other stock-based awards. Incentive grants under the 2009 Plan generally vest based on four years of continuous service and have 10-year contractual terms. All plans prior to the 2009 Plan, with the exception of the Company's 2007 Stock Option Plan (the 2007 Plan), which was approved by the Company's shareholders and permits the grant of share options and shares to its employees for up to 70,000 shares of common stock, have been terminated. As of December 31, 2016, the 2007 Plan had 4,200 options outstanding. Stock-Based Compensation Stock-based compensation expense is recognized, net of an estimated forfeiture rate, on a straight-line basis over the requisite service period, which is the vesting period. The Company currently uses the Black-Scholes option pricing model to determine the fair value of its stock options. The determination of the fair value of share-based payment awards on the date of grant using an option pricing model is affected by the Company's stock price, as well as assumptions regarding a number of complex and subjective variables. These variables include the Company's expected stock price volatility over the term of the awards, actual employee exercise behaviors, risk-free interest rate and expected dividends. The weighted average fair value of stock options granted during the periods and the assumptions used to estimate those values using the Black-Scholes option pricing model were as follows: Year ended December 31, 2016 2015 Weighted average expected stock price volatility 77.9 % 72.3 % Estimated dividend yield - % - % Risk-free interest rate 1.4 % 1.7 % Expected life of option (in years) 6.1 6.3 Weighted average grant date fair value per option $ 7.63 $ 42.30 The expected stock price volatility for the stock options is based on historical volatility of the Company's stock. The Company has not paid and does not anticipate paying cash dividends; therefore, the expected dividend rate is assumed to be 0%. The risk-free rate was based on the U.S. Treasury yield curve in effect at the time of grant commensurate with the expected life assumption. The expected life of the stock options granted was estimated based on the historical exercise patterns over the option lives. The Company measures the grant date fair value of restricted stock units using the Company's closing common stock price on the trading date immediately preceding the grant date. Stock-based compensation expense was $2.7 million and $5.9 million for the years ended December 31, 2016 and 2015, respectively. Stock-based compensation expense for the periods presented is included within the selling, general and administrative expense in the consolidated statements of operations. Stock Options As of December 31, 2016, approximately 650,000 options are outstanding that have been issued to current officers and employees under the 2007 Plan, the 2009 Plan and the 2015 Plan. As of December 31, 2016, there was approximately $5.7 million of total unrecognized compensation cost related to non-vested stock options issued to employees and directors of the Company, which is expected to be recognized ratably over a weighted-average period of 2.4 years. During the year ended December 31, 2015, the Company's Board of Directors awarded a total of 48,500 options (Performance Options) to certain of the Company's former executive officers. Due to the corporate restructuring that was announced in July 2016 and the associated departures of Company's former executive officers, all outstanding Performance Options have been canceled and none of these Performance Options have vested. The Company utilized a Monte Carlo simulation to determine the grant date fair value of the awards. Compensation expense is recognized over the performance period of each tranche in accordance with ASC 718, Compensation - Stock Compensation The following table shows the stock option activity, described above, during the year ended December 31, 2016 (share and intrinsic values in thousands): Weighted Average Average Remaining Aggregate Exercise Contractual Life Intrinsic Shares Price (years) Value Options Outstanding at December 31, 2015 703 $ 55.42 Granted 632 11.73 Exercised - - $ - Cancelled (685) 43.15 Expired - - Options outstanding at December 31, 2016 650 $ 25.85 9.0 $ - Options vested and expected to vest as of December 31, 2016 491 $ 30.80 8.9 $ - Options vested and exercisable as of December 31, 2016 79 $ 70.34 6.9 $ - The total intrinsic value of options exercised during the years ended December 31, 2016 and 2015 were $0 and $211,000, respectively. Options issued subsequent to January 2014 have a graded vesting schedule over either three or four years. The Company's stock option grants expire ten years from the date of grant. Restricted Stock The following table shows the Company's non-vested restricted stock activity during the year ended December 31, 2016 (share and intrinsic values in thousands): Weighted Average Aggregate Grant Date Fair Intrinsic Shares Value Value Non-vested restricted stock outstanding at December 31, 2015 6 $ 30.00 Granted 197 3.36 Vested (6) 30.00 $ 63 Forfeited - - Non-vested restricted stock outstanding at December 31, 2016 197 $ 3.36 The total intrinsic value of restricted stock vested during the years ended December 31, 2016 and 2015 was $63,000 and $562,000, respectively. Restricted stock issued subsequent to January 2014 have a graded vesting schedule over either three or four years. As of December 31, 2016, there was approximately $619,000 of total unrecognized compensation cost related to non-vested restricted stock issued to employees and directors of the Company. Employee Stock Purchase Plan Effective July 22, 2010, the Company adopted the 2010 Employee Stock Purchase Plan to provide substantially all employees an opportunity to purchase shares of its common stock through payroll deduction, up to 10% of eligible compensation with a $25,000 maximum annual deferral. Semi-annually (on May 1 and November 1), participant account balances will be used to purchase shares of stock at the lesser of 85 percent of the fair market value of shares at the beginning or end of such six-month period. The Employee Stock Purchase Plan expires on July 22, 2020. A total of 100,000 shares are available for purchase under this plan of which 61,698 have been issued. Compensation expense related to the Employee Stock Purchase Plan was $29,000 and $134,000 for the years ended December 31, 2016 and 2015, respectively. Effective December 31, 2016, the Company's board of directors suspended the Employee Stock Purchase Plan and directed the Company to return all funds in each participant's deposit account to such participant as soon as possible.

18. Income Taxes

18. Income Taxes	12 Months Ended
	Dec. 31, 2016
Income Tax Disclosure [Abstract]
18. Income Taxes	Note 18. Income Taxes During the year ended December 31, 2015, the Company established a valuation allowance against its deferred tax assets. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of the deferred tax assets. This evidence includes, but is not limited to, assessing changing business model(s) and market conditions, current and prior earnings history, expected future earnings, carry-back and carry-forward periods, and the feasibility of ongoing tax strategies that could potentially enhance the likelihood of the realization of a deferred tax asset. The weight given to the positive and negative evidence is commensurate with the extent the evidence may be objectively verified. As such, the Company concluded that there was not sufficient positive evidence to outweigh the objective negative evidence of recent financial reporting losses and expected future losses resulting from its new business model. The components of the provision (benefit) for income taxes are as follows for the years ending December 31, 2016 and 2015 (in thousands): Year Ended December 31, 2016 2015 Current: Federal $ 455 $ 6,923 State 356 508 Foreign (172) 207 Total current provision 639 7,638 Deferred Provision: Federal (189) (1,329) State (11) (551) Foreign - 1,304 Total deferred provision (benefit) (200) (576) Total $ 439 $ 7,062 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The sources of the temporary differences and their effect on deferred taxes are as follows (in thousands): Year Ended December 31, 2016 2015 Deferred tax assets: Accruals and other reserves $ 36,052 $ 24,205 Intangibles 4,414 - Inventory 1,157 985 Stock awards 4,532 3,757 Net operating loss carryovers 33,241 8,038 Gross deferred tax assets 79,396 36,985 Valuation allowance (79,373) (31,453) Net deferred tax asset 23 5,532 Deferred tax liabilities: Fixed Assets (23) (1,021) Intangibles - (4,713) Gross deferred tax liability (23) (5,734) Net deferred tax asset/(liability) - (202) Included in consolidated balance sheet: Deferred income tax assets/(liabilities) - current - - Deferred income tax assets/(liabilities) - long-term - (202) Net deferred tax asset/(liability) $ - $ (202) Somaxon has federal net operating loss carryforwards (NOL's) of approximately $250.2 million at December 31, 2016 ranging in expiration from 2023 to 2033. However, based on the change in ownership provision of IRC Section 382, $22.4 million of those NOL are expected to be available for utilization. The Company has federal NOL's of approximately $62.1 million at December 31, 2016 ranging in expiration from 2035 to 2036. Included in the $62.1 million are $798,000 of NOLs which have not been recognized for financial reporting purposes due to unrecognized tax benefits and excess tax benefits related to stock-based compensation. Excess tax benefits related to option exercises cannot be recognized until realized through a reduction of current taxes payable. GTA has federal NOL's of approximately $85.3 million at December 31, 2016 ranging in expiration from 2021 to 2029. However, based on the change in ownership provisions of IRC Section 382, approximately $519,000 of those NOL are expected to be available for utilization. Somaxon has federal research and development credit carryovers of approximately $4.5 million at December 31, 2016. However, based on the change in ownership provision of IRC Section 382, approximately $263,000 of those credits are expected to be available for utilization. It should be noted that only those amounts that are expected to be utilized are included in the deferred tax assets (Somaxon and Pernix's NOLs noted above). The effective income tax rate from continuing operations is different from the federal statutory rate for the years ended December 31, 2016 and 2015 for the following reasons: Year Ended December 31, 2016 2015 Expected taxes at statutory rates 35.0 % 35.0 % State taxes, net of federal tax benefit (0.1) % - Foreign income tax rate differential (10.0) % (13.6) % Amortization and impairment of goodwill (8.7) % (2.0) % Mark to market adjustment 4.3 % - Deductible inducement payment 3.3 % 2.0 % Change in valuation allowance (25.2) % (21.7) % Change in liability for uncertain tax positions - (4.8) % Permanent differences and other 1.1 % 0.1 % (0.3) % (5.0) % Changes in tax laws or in their application or interpretation, such as to the transfer pricing between the Company's non-U.S. operations and the U.S., could increase the Company's effective tax rate and negatively affect the Company's results of operations. Approximately $0 and $500,000 of the deferred tax liability at December 31, 2016 and 2015, respectively, relates to the difference between the financial statement and tax basis of the intangibles acquired in the Cypress acquisition. The following summarizes the activity related to the Company's unrecognized tax benefits (in thousands): Year Ended December 31, 2016 2015 Balance at beginning of year $ 7,410 $ - Tax positions taken in prior periods - - Tax positions taken in current year - 7,410 Accrual of interest related to tax positions taken - - Settlements - - Foreign currency translation - - Balance at end of year $ 7,410 $ 7,410 As of December 31, 2016 and 2015, the total amount of gross unrecognized tax benefits was $7.4 million. Of these amounts as of December 31, 2016 and 2015, $0, would impact the effective tax rate if recognized as the unrecognized tax benefits are associated with deferred tax assets subject to a full valuation allowance. It is the Company's policy to classify accrued interest and penalties as part of the accrued unrecognized tax benefits liability and record the expense in the provision for income taxes. For the years ended December 31, 2016 and 2015, the amount of accrued interest or penalties related to unrecognized tax benefit totaled $0 and $0, respectively. For unrecognized tax benefits that existed at December 31, 2016, the Company does not anticipate any significant changes within the next twelve months. The Company files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. The associated tax filings remain subject to examination by applicable tax authorities for a certain length of time following the tax year to which those filings relate. As of December 31, 2016, the Company's 2014 Federal tax return is under examination by the Internal Revenue Service. Other years subject to potential examination include 2012, 2013 and 2015 in the United States.

19. Commitments and Contingenci

19. Commitments and Contingencies	12 Months Ended
	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
19. Commitments and Contingencies	Note 19. Commitments and Contingencies Arbitration award On January 31, 2017, the arbitration tribunal issued opinions in favor of GSK, awarding it damages and fees in the amount of approximately $35 million, plus interest (estimated to be approximately $2 to $5 million). The tribunal also denied the Company's claim that GSK breached its obligations under the supply agreement. The Company has already paid to GSK an aggregate of $16.5 million, including $6.2 million from the escrow account, which will offset the total award. After discussions with GSK, an agreement was reached on March 17, 2017, to amend the Interim Settlement Agreement with GSK whereby the Company agreed to establish a payment schedule for satisfaction of the current balance of the award. Pursuant to the amendment the Company has agreed that the current outstanding balance is approximately $21.5 million to GSK and the Company has agreed to make quarterly installments in amounts totaling $1.0 million in 2017, $3.5 million in 2018 and approximately $17.0 million in 2019. The Company recorded the fair value of this settlement in the amount of approximately $18.5 million in its financial statements at December 31, 2016 and has recorded $15.3 million as a reduction to net revenues, $1.0 million to selling, general and administrative expense and $2.2 million to interest expense in the year ended December 31, 2016. Purchase Commitments Purchase obligations include fixed or minimum payments under manufacturing and supply agreements with third-party manufacturers and other providers of goods and services. The Company's failure to satisfy minimum sales requirements under its co-promotion agreements generally allows the counterparty to terminate the agreement and/or results in a loss of the Company's exclusivity rights. Leases The Company leases facilities space and equipment under operating lease arrangements that have terms expiring at various dates through 2022. Certain lease arrangements include renewal options and escalation clauses. In addition, various lease agreements to which the Company is a party require that it complies with certain customary covenants throughout the term of the leases. If the Company is unable to comply with these covenants and cannot reach a satisfactory resolution in the event of noncompliance, these agreements could terminate. During the second quarter of 2014, the Company signed a lease for office space for its corporate headquarters in Morristown, New Jersey. The lease agreement is a seven-year lease, beginning on or about May 19, 2014. In January 2015, the Company amended its lease in Morristown, NJ to add 9,562 square feet of office space for a total of 15,990 square feet for approximately $40,000 per month, which is subject to certain annual escalators and extend the original term of the lease to expire July 31, 2022. The total lease obligation is approximately $3.7 million over the term of the lease. During the third quarter of 2014, the Company entered in to a lease for office space in Mount Pleasant, South Carolina where the Company's accounting functions were based. In conjunction with the restructuring discussed in Note 20, Restructuring, Future minimum lease payments under non-cancelable operating leases are as follows as of December 31, 2016 (in thousands): Amount 2017 $ 617 2018 628 2019 640 2020 518 2021 524 Thereafter 309 Total $ 3,236 Future minimum lease payments under non-cancelable operating subleases are as follows as of December 31, 2016 (in thousands): Amount 2017 $ 118 2018 121 2019 125 2020 - 2021 - Thereafter - Total $ 364 Total rent expense was approximately $760,000 and $653,000 for the years ended December 31, 2016 and 2015, respectively. Total sublease rental income was approximately $115,000 and $19,000 for the years ended December 31, 2016 and 2015, respectively and was recorded as a reduction to rent expense. Other Commitments In July 2012 and January 2013, Somaxon settled two patent litigation claims with parties seeking to market generic equivalents of Silenor. As of December 31, 2016, remaining payment obligations owed under these settlement agreements are $1.3 million, payable in equal annual installments of $250,000 through 2019, and $500,000, payable in 2017. These settlement agreements are recorded in other liabilities (both current and long-term) on the balance sheets as of December 31, 2016 and 2015. Texas Attorney General Medicaid Investigation The Company reached an agreement with the Attorney General of the State of Texas to settle all claims arising from certain actions by Cypress under the Texas Medicaid Fraud Prevention Act prior to its acquisition by the Company in connection with a Civil Investigative Demand made on Cypress. As part of the settlement, the Company has agreed to pay $12.0 million to the State of Texas. The Company recorded the fair value of this settlement in the amount of $9.8 million in its financial statements at December 31, 2013 and recorded as an expense during the year ended December 31, 2013. An initial payment of $2.0 million was due and payable within ten business days of the effective date of the final settlement agreement (the Effective Date) and was paid accordingly. Thereafter, the Company will make subsequent payments of $2.0 million on each of the first five anniversaries of the Effective Date. The balance of this obligation was $5.5 million and $7.1 million as of December 31, 2016 and 2015 and is included in other liabilities (both current and long-term) on the consolidated balance sheets.

20. Restructuring

20. Restructuring	12 Months Ended
	Dec. 31, 2016
Restructuring and Related Activities [Abstract]
20. Restructuring	Note 20. Restructuring On July 7, 2016, the Company announced a restructuring of its sales force and operations. The reorganization plan included (1) a reduction of 54 sales positions, primarily from the Company's Neurology sales team; (2) prioritization and reorganization of sales territories to reduce the inefficient time that sales representatives spent driving long distances between customers; (3) improvement of the Company's compensation plan to incentivize the field sales staff to increase the frequency of calls on the focused targets; and (4) consolidation of the Neurology and Pain sales forces under one sales management structure to eliminate redundancies. In addition, as part of this initiative, the Company reduced its administrative staff by six employees. The Company incurred $2.3 million during the year ended December 31, 2016 in severance and other related cash expenses. The charge during the year ended December 31, 2016 was comprised of $1.3 million in severance related cash expenses, and $1.0 million in other cash related expenses. Associated severance and other related payments are expected to be paid by December 31, 2017. On March 16, 2015, the Company decided to institute an initiative to restructure operations and shut down the Charleston, South Carolina site. This step was done to consolidate operations within the Company's headquarters located in Morristown, New Jersey. During the year ended December 31, 2015, the Company incurred a charge of $1.1 million related to the restructuring. The charge during the year ended December 31, 2015 was comprised of $485,000 in severance related cash expenses, and $653,000 for the modification and accelerated vesting of options and awards under existing employee agreements. Associated severance payments were paid by May 31, 2016. A summary of accrued restructuring costs, included as a component of accounts payable and accrued expenses on the consolidated balance sheets, are as follows (in thousands): December 31, 2015 Charges Cash Non-cash December 31, 2016 2016 restructuring costs $ - $ 2,287 $ (1,669) $ - $ 618 2015 restructuring costs 104 - (104) - - Totals $ 104 $ 2,287 $ (1,773) $ - $ 618 December 31, 2014 Charges Cash Non-cash December 31, 2015 2015 restructuring costs $ - $ 1,137 $ (380) $ (653) $ 104

21. Supplemental Cash Flow Info

21. Supplemental Cash Flow Information	12 Months Ended
	Dec. 31, 2016
Supplemental Cash Flow Elements [Abstract]
21. Supplemental Cash Flow Information	Note 21. Supplemental Cash Flow Information Years ended December 31, 2016 2015 Supplemental disclosures of Cash Flow Information: Cash received for income taxes, net $ (4,780) $ (352) Cash paid for interest 30,165 30,207 Supplemental disclosures of Non-cash Investing and Financing Activities: Reclassification of treasury stock 5,571 - Conversion of 8.00% Convertible notes - 60,172 Issuance of 168,209 shares to Zogenix for Zohydro acquisition - 11,926

22. Quarterly Financial Data (U

22. Quarterly Financial Data (Unaudited)	12 Months Ended
	Dec. 31, 2016
Quarterly Financial Information Disclosure [Abstract]
22. Quarterly Financial Data (Unaudited)	Note 22. Quarterly Financial Data (Unaudited) Selected quarterly consolidated financial data are shown below (in thousands, except per share data, unaudited). Three Months Ended March 31, June 30, September 30, December 31, 2016 Net revenues $ 32,469 $ 36,746 $ 41,468 $ 30,173 Operating loss (23,809) (22,300) (17,402) (76,817) Net loss (25,936) (31,139) (26,438) (86,077) Basic loss per common share $ (4.24) $ (4.67) $ (2.99) $ (8.92) Diluted loss per common and potential common share $ (4.24) $ (4.67) $ (2.99) $ (8.92) 2015 Net revenues $ 33,889 $ 46,977 $ 48,615 $ 46,369 Operating loss (18,905) (15,362) (16,153) (50,834) Net loss (23,674) (32,235) (10,740) (81,666) Basic loss per common share $ (6.16) $ (6.15) $ (1.76) $ (13.37) Diluted loss per common and potential common share $ (6.16) $ (6.15) $ (1.76) $ (13.37)

Valuation and Qualifying Accoun

Valuation and Qualifying Accounts	12 Months Ended
	Dec. 31, 2016
Valuation and Qualifying Accounts [Abstract]
Valuation and Qualifying Accounts	Valuation and Qualifying Accounts Additions Balance at charged to Balance at beginning of costs and end of (in thousands) period expenses Deductions period For the year ended December 31, 2016 Allowance for doubtful accounts (1) $ 15 $ 618 $ (133) $ 500 Allowance for prompt pay discounts (1) 1,844 6,718 (7,524) 1,038 Inventory obsolescence allowance (2) 2,448 2,184 (2,649) 1,983 For the year ended December 31, 2015 Allowance for doubtful accounts (1) 228 - (213) 15 Allowance for prompt pay discounts (1) 893 6,949 (5,998) 1,844 Inventory obsolescence allowance (2) 2,220 960 (732) 2,448 (1) Shown as a reduction of accounts receivable. Charges related to prompt pay discounts are reflected as a reduction of revenue.

2. Summary of Significant Acc32

2. Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2016
Accounting Policies [Abstract]
Reverse Stock Split	Reverse Stock Split On October 13, 2016, the Company filed Articles of Amendment to its charter (the Articles of Amendment), with the State Department of Assessments and Taxation of Maryland to effect a one-for-ten reverse stock split of the outstanding shares of common stock, par value $0.01 per share, of the Company (the Reverse Stock Split). The Reverse Stock Split was duly approved by the Board of Directors of the Company without stockholder approval in accordance with the authority conferred by Section 2-309(e)(2) of the Maryland General Corporation Law and Article IV, Section 6 of the Company's charter. Pursuant to the Articles of Amendment, effective as of the close of business on October 13, 2016, each outstanding share of the Company's common stock, par value $0.01 per share, was automatically combined into 1/10th of share of common stock, par value $0.01 per share. Fractional share holdings were rounded up to the nearest whole number. As a result of the Reverse Stock Split, the number of outstanding shares of common stock of the Company was reduced to approximately 9.5 million shares. Each stockholder's percentage ownership in the Company and proportional voting power remained unchanged immediately after the Reverse Stock Split, except for minor changes resulting from the rounding up of fractional shares. The rights and privileges of stockholders were also unaffected by the Reverse Stock Split. There was no change to the number of authorized shares of the Company's common stock as a result of the Reverse Stock Split. Accordingly, all share and per share information in this Annual Report on Form 10-K has been restated to retroactively show the effect of the Reverse Stock Split.
Reclassifications	Reclassifications Certain comparative figures have been reclassified to conform to the current year presentation. In accordance with Accounting Standards Update (ASU) 2015-03, Simplifying the Presentation of Debt Issuance Costs, (ASU 2015-03), the Company reclassified $1.7 million from Prepaid expenses and other current assets to Treximet Secured Notes - current, $4.0 million from Other assets to Convertible notes - long-term and $6.2 million from Other assets to Treximet Secured Notes - long-term on the consolidated balance sheet at December 31, 2015.
Basis of Presentation	Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP), applied on a consistent basis.
Principles of Consolidation	Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated.
Management's Estimates and Assumptions	Management's Estimates and Assumptions The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. The Company reviews all significant estimates affecting the consolidated financial statements on a recurring basis and records the effect of any necessary adjustments prior to their issuance. Significant estimates of the Company include: revenue recognition, sales allowances such as returns on product sales, government program rebates, customer coupon redemptions, wholesaler/pharmacy discounts, product service fees, rebates and chargebacks, sales commissions; useful lives of amortizable intangible assets; provisions for income taxes; uncertain tax positions, and realizability of deferred tax assets; expected future cash flows used in evaluating intangible assets for impairment and for determining the Company's liquidity and going concern analysis; stock-based compensation; and the allocation of the purchase price for acquired assets and businesses, including the fair value of contingent consideration. On an ongoing basis, management reviews its estimates to ensure that these estimates appropriately reflect changes in the Company's business and new information as it becomes available. If historical experience and other factors used by management to make these estimates do not reasonably reflect future activity, the Company's consolidated financial statements could be materially impacted.
Business Acquisitions	Business Acquisitions Acquired businesses are accounted for using the acquisition method of accounting. The acquisition method of accounting for acquired businesses requires, among other things, that assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date, with limited exceptions, and that the fair value of acquired in-process research and development (IPR&D), be recorded on the balance sheet. Also, transaction costs are expensed as incurred. Any excess of the acquisition consideration over the assigned values of the net assets acquired is recorded as goodwill. Contingent consideration is included within the acquisition cost and is recognized at its fair value on the acquisition date. A liability resulting from contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved and changes in fair value are recognized in earnings. If the acquired net assets do not constitute a business under the acquisition method of accounting, the transaction is accounted for as an asset acquisition and no goodwill is recognized. In an asset acquisition, the amount allocated to acquired IPR&D with no alternative future is charged to expense at the acquisition date.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The estimated fair values of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their carrying values due to their short maturity periods. The fair value of acquisition-related contingent consideration is based on estimated discounted future cash flows and assessment of the probability of occurrence of potential future events. The fair value of long-term debt is based on quoted market prices, if available, or estimated discounted future cash flows.
Cash and Cash Equivalents	Cash and Cash Equivalents Cash and cash equivalents include certain money-market funds with maturities of three months or less when purchased. The restricted cash amount at December 31, 2015 consisted of amounts escrowed for the purchase of Zohydro ER with BeadTek. In accordance with the asset purchase agreement, the Company had deposited $10.0 million in an escrow fund to be held for a period of 12 months from the closing date as a security to pay, or be applied against, any losses incurred by the Company that are subject to the general representations, warranties and indemnification obligations of Zogenix. The Company was considered to be the legal and tax owner of the fund until the expiration of the escrow period of 12 months. Accordingly, the amount of $10.0 million in the escrow fund was recognized as restricted cash and consideration payable to Zogenix. Restricted cash and the restricted cash payable are presented separately under current assets and current liabilities, respectively, in the consolidated balance sheets. The conditions for the release of this escrow had been satisfied during the year ended December 31, 2016 and therefore the restricted cash has been released to Zogenix. See Note 4, Business Combinations and Other Acquisitions
Concentration of Credit Risk and Economic Dependency	Concentrations of Credit Risk and Economic Dependency The financial instruments that potentially subject the Company to concentrations of credit risk are cash, cash equivalents, and accounts receivable. The Company invests its excess cash in high quality, money market instruments. The Company maintains its cash and cash equivalents with a major financial institution. At times, such amounts may exceed federally insured limits. The Company has not experienced any significant losses on its cash or cash equivalents. The Company's accounts receivable primarily represent amounts due from drug wholesalers, retail drug stores, mass merchandisers and grocery store pharmacies in the United States. The Company performs periodic credit evaluations of customers and does not require collateral. An allowance for doubtful accounts is maintained for potential credit losses based on the aging of accounts receivable, historical bad debts experience, and changes in customer payment patterns. Accounts receivables balances are written off against the allowance when it is probable that the receivable will not be collected. The Company primarily sold to three major customers in 2016 and 2015. See Note 15, Concentrations The Company relies on certain materials used in its development and manufacturing processes, some of which are procured from a single source. Most of the Company's manufacturing arrangements are not subject to long-term agreements and generally may be terminated by either party without penalty at any time. For the year ended December 31, 2016, approximately 42% of the inventory purchases, were from three primary suppliers - Recro Gainesville, LLC, Aphena Pharma Solutions and Belcher Pharmaceuticals, LLC, allocated 16%, 14% and 12%, respectively. For the year ended December 31, 2015, approximately 25% of the inventory purchases were from two primary suppliers - GSK and Aphena Pharma Solutions, allocated 15% and 10%, respectively. The Company believes that it has good relationships with its current suppliers, and could secure the services of alternative suppliers if necessary or required.
Inventories	Inventories Inventory is valued at the lower of cost or market, with cost determined by using the specific identification method. Allowances for slow-moving, obsolete, and/or declines in the value of inventory are determined based on management's assessments. Sample inventory is included in prepaid expenses and other current assets on the consolidated balance sheets and are expensed to selling, general and administrative expenses on the consolidated statements of operations and comprehensive loss when the sample units are distributed to the Company's sales representatives. The Company evaluates the carrying value of inventories on a regular basis, taking into account such factors as historical and anticipated future sales compared with quantities on hand, the price the Company expects to obtain for products in their respective markets compared with historical cost and the remaining shelf life of goods on hand.
Property, Equipment and Depreciation	Property, Equipment and Depreciation Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which ranges from three to eight years. Leasehold improvements are amortized over the shorter of the non-cancelable term of the operating lease or their economic useful lives. Maintenance and repairs are charged against earnings when incurred. Additions and improvements that extend the economic useful life of the asset are capitalized. The cost and accumulated depreciation of assets sold or retired are removed from the respective accounts, and any resulting gain or loss is reflected in current earnings.
Goodwill	Goodwill The Company tests goodwill for impairment annually in December and when events or changes in circumstances indicate that the carrying value may not be recoverable. Goodwill represents the excess of the acquisition consideration over the fair value of assets acquired and liabilities assumed. The Company has determined that it operates in a single segment and has a single reporting unit associated with the development and commercialization of pharmaceutical products. The test for goodwill impairment is a two-step process. Step 1 is a comparison of the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying value of the reporting unit exceeds the reporting unit's fair value, the Company reports Step 2 of the goodwill impairment test to determine the amount of impairment loss by comparing the implied fair value of the reporting unit's goodwill with the carrying amount of that goodwill. Under such evaluation, if the carrying value of the reporting unit's goodwill exceeds the implied fair value of the goodwill, the impairment loss is recognized as an operating expense as the amount equal to the excess. During the testing of goodwill for impairment during the year ended December 31, 2016, it was noted that the Company's carrying value exceeded its fair value and therefore the Company failed Step 1 and performed Step 2 of the goodwill impairment test. Step 2 of the impairment test determined a $23.8 million impairment charge for goodwill. See Note 9, Goodwill and Intangible Assets
Intangible Assets	Intangible Assets Intangible assets with finite useful lives consist primarily of purchased developed technology and are amortized on a straight-line basis over their estimated useful lives, which range from 3 to 18 years. The estimated useful lives associated with finite-lived intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Intangible assets with finite lives are reviewed for impairment when events or circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. The fair value of IPR&D acquired through a business combination is capitalized as an indefinite-lived intangible asset until the completion or abandonment of the related research and development activities. IPR&D is not amortized but is tested for impairment annually or when events or circumstances indicate that the fair value may be below the carrying value of the asset. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets would be deemed finite-lived and would then be amortized over their estimated useful lives. During the years ended December 31, 2016 and 2015, the Company recorded impairment charges of $31.4 million and $24.4 million, respectively. See Note 9, Goodwill and Intangible Assets
Impairment of Long-lived Assets	Impairment of Long-lived Assets The Company reviews long-lived assets, such as property and equipment and finite lived intangibles, subject to amortization, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. If any long-lived assets are considered to be impaired, the impairment to be recognized equals the amount by which the carrying value of the asset exceeds its fair value.
Deferred Financing Costs	Deferred Financing Costs Deferred financing costs are reported at cost, less accumulated amortization, and are recorded as a reduction of the debt outstanding in current or long-term debt, unless there is no current portion for the period presented, in which case, the deferred financing cost will be recorded in prepaid expenses. Amortization expense is included in interest expense. Deferred financing costs amortized during years ended December 31, 2016 and 2015 were $2.4 million and $2.7 million, respectively. Unamortized deferred financing costs were $10.4 million and $12.8 million as of December 31, 2016 and 2015, respectively.
Revenue Recognition	Revenue Recognition Product Sales Product sales revenue is recognized when title has transferred to the customer and the customer has assumed the risks and rewards of ownership, which is typically on delivery to the customer or, in the case of products that are subject to consignment agreements, when the customer removes product from the Company's consigned inventory location for shipment directly to a patient. Revenue from sales transactions where the buyer has the right to return the product is recognized at the time of sale only if (i) the seller's price to the buyer is substantially fixed or determinable at the date of sale, (ii) the buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product, (iii) the buyer's obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product, (iv) the buyer acquiring the product for resale has economic substance apart from that provided by the seller, (v) the seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer, and (vi) the amount of future returns can be reasonably estimated. Revenues from sales of products are recorded net of estimated allowances for returns, specialty distributor fees, wholesaler fees, prompt payment discounts, government rebates, government chargebacks, coupon programs and rebates under managed care plans. Provisions for returns, specialty distributor fees, wholesaler fees, government rebates, coupon programs and rebates under managed care plans are included within current liabilities in the Company's consolidated balance sheets. Provision for prompt payment discounts are generally shown as a reduction in accounts receivable. Calculating certain of these items involves estimates and judgments based on sales or invoice data, contractual terms, historical utilization rates, new information regarding changes in these programs' regulations and guidelines that would impact the amount of the actual rebates, the Company's expectations regarding future utilization rates for these programs and channel inventory data.
Co-promotion, Royalties and Other Product Related Revenues	Co-promotion, Royalties and Other Product Related Revenues The Company receives royalties from third parties based on sales of the Company's products under licensing and distribution arrangements. For those arrangements where royalties are reasonably estimable, the Company recognizes revenues based on estimates of royalties earned during the applicable period, and adjusts for differences between the estimated and actual royalties in the following quarter. Historically, these adjustments have not been significant. The Company's contract revenues consist of fees and milestone payments. Non-refundable fees where the Company has no continuing performance obligations are recognized as revenues when there is persuasive evidence of an arrangement and collection is reasonably assured. In situations where the Company has continuing performance obligations, non- refundable fees are deferred and are recognized ratably over the Company's projected performance period. Sales-based milestone payments are typically payments made to the Company that are triggered when aggregate net sales of a product by a collaborator for a specified period (for example, an annual period) reach an agreed upon threshold amount. The Company recognizes sales-based milestone payments from a collaborator when the event that triggers the obligation of payment has occurred, there is no further obligation on the Company's part in connection with the payment, and collection is reasonably assured.
Cost of Product Sales	Cost of Product Sales Cost of product sales is comprised of (i) costs to manufacture or acquire products sold to customers; (ii) royalty, co-promotion and other revenue sharing payments under license and other agreements granting the Company rights to sell related products; (iii) direct and indirect distribution costs incurred in the sale of products; and (iv) the value of any write-offs or donations of obsolete or damaged inventory that cannot be sold. The Company acquired the rights to sell certain of its commercial products through license and assignment agreements with the original developers or other parties with interests in these products. These agreements obligate the Company to make payments under varying payment structures based on its net revenue from related products. In connection with the acquisitions of Cypress and Somaxon, the Company adjusted the predecessor cost basis increasing inventory to fair value as required by ASC No. 820, Fair Value Measurements and Disclosures
Subsequent Events	Subsequent Events The Company has evaluated all events and transactions since December 31, 2016. The Company did not have any non-recognized subsequent events, but had the following recognized subsequent event: On January 31, 2017, the arbitration tribunal issued opinions in favor of GSK, awarding it damages and fees in the amount of approximately $35 million, plus interest (estimated to be approximately $2 to $5 million). The tribunal also denied the Company's claim that GSK breached its obligations under the supply agreement. Subsequent discussions with GSK resulted in an agreement on March 17, 2017, to amend the Interim Settlement Agreement. A payment schedule was established for satisfaction of the current balance of the award. Pursuant to the amendment, we have agreed that the current outstanding balance is approximately $21.5 million and we have agreed to make quarterly installments to GSK in amounts totaling $1.0 million in 2017, $3.5 million in 2018 and approximately $17.0 million in 2019. Pernix has also agreed that for so long as the Interim Settlement Agreement is in effect, Pernix will be subject to certain restrictions on non-ordinary course payments and transactions and GSK will have certain information rights. GSK has agreed that for so long as Pernix complies with the payment schedule set forth in the Amendment, as well as other agreed-upon obligations, enforcement of the Award will be stayed and GSK shall not seek to enforce or exercise any other remedies in respect of the Award. The Company recorded the fair value of this settlement in the amount of approximately $18.5 million in its financial statements at December 31, 2016 and has recorded $15.3 million as a reduction to net revenues, $1.0 million to selling, general and administrative expense and $2.2 million to interest expense in the year ended December 31, 2016.
Research and Development Costs	Research and Development Research and development costs in connection with the Company's internal programs for the development of products are expensed as incurred. Pernix either expenses research and development costs as incurred or will advance third parties a research and development fee, which is amortized over the term of the related agreement.
Advertising Expenses	Advertising Expenses The Company expenses the costs of advertising, including promotional expenses, as incurred in SG&A. Advertising expenses for 2016 and 2015 were $12.6 million and $18.3 million, respectively. The decrease is due to advertising programs for Silenor and Treximet that were decreased during 2016.
Share-Based Compensation	Share-Based Compensation The Company recognizes all share-based payments to employees, including grants of employee stock options and restricted share units (RSUs), at estimated fair value. The Company amortizes the fair value of stock option or RSU grants on a straight-line basis over the requisite service period of the individual stock option or RSU grant, which generally equals the vesting period. Stock option and RSU forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
Segment Information	Segment Information The Company currently markets two major product lines: a branded pharmaceuticals product line and a generic pharmaceuticals product line. These product lines qualify for reporting as a single segment in accordance with GAAP because they are similar in the nature of the products and services, production processes, types of customer, distribution methods and regulatory environment.
Acquisition-Related Contingent Consideration	Acquisition-Related Contingent Consideration Acquisition-related contingent consideration, which consists primarily of potential milestone payments and royalty obligations, is recorded in the consolidated balance sheets at its acquisition date estimated fair value, in accordance with the acquisition method of accounting. The fair value of the acquisition-related contingent consideration is remeasured each reporting period, with changes in fair value recorded in the consolidated statements of operations and comprehensive loss. The fair value measurement is based on significant inputs not observable in the market and thus represents a Level 3 measurement as defined in fair value measurement accounting.
Income Taxes	Income Taxes Temporary differences are differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities. Deferred taxes represent the future tax consequences on income taxes when the reported amount of the asset or liability is recovered or settled. Deferred taxes are measured using the enacted tax rates expected to apply to taxable income in periods in which the deductible or taxable temporary difference is expected to be recovered or settled. The effect on changes in tax rates and laws are recognized in income from continuing operations in the period that includes the enactment date. The Company will recognize deferred tax assets for deductible temporary differences, operating loss and tax credit carryforwards. The Company must also make judgments regarding the realizability of deferred tax assets. The carrying value of the Company's net deferred tax assets is based on its view of whether it is more likely than not that the Company will generate sufficient future taxable income in certain jurisdictions to realize these deferred tax assets. A valuation allowance has been established for deferred tax assets which the Company does not believe meet the "more likely than not" criteria. The Company's judgments regarding future taxable income may change due to changes in market conditions, changes in tax laws, tax planning strategies or other factors. If the Company's assumptions and consequently its estimates change in the future, the valuation allowances it has established may be increased or decreased, resulting in a respective increase or decrease in income tax expense. The Company's effective tax rate is highly dependent upon the geographic distribution of its worldwide earnings or losses, the tax regulations and tax holidays in each geographic region, the availability of tax credits and carryforwards, and the effectiveness of its tax planning strategies. The Company used a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with the guidance on judgments regarding the realizability of deferred taxes. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments and which may not accurately anticipate actual outcomes. Income tax returns subject to review by taxing authorities include 2013 through 2016.
Contingencies	Contingencies Periodically, the Company may be involved in claims and other legal matters. The Company records accruals for loss contingencies to the extent that management concludes that it is probable that a liability has been occurred and the amount of the related loss can be reasonably estimated. Legal fees and other expenses related to litigation are expensed as incurred and included in SG&A. See Note 19, Commitments and Contingencies
Earnings per Share	Earnings per Share Earnings per common share is presented under two formats: basic earnings per common share and diluted earnings per common share. Basic earnings per common share is computed by dividing net income attributable to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period, plus the potentially dilutive impact of common stock equivalents (i.e. restricted stock, stock options, warrants and convertible notes). Dilutive common share equivalents consist of the incremental common shares issuable upon exercise of stock options and warrants, conversion of notes or vesting of restricted stock. The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): Year ended December 31, 2016 2015 Numerator: Net loss $ (169,590) $ (148,315) Denominator: Weighted-average common shares, basic 7,827 5,333 Dilutive effective of stock options - - Weighted-average common shares, diluted 7,827 5,333 Net loss per share, basic and diluted $ (21.67) $ (27.81) The following table sets forth the potential common shares that could potentially dilute basic income per share in the future that were not included in the computation of diluted income (loss) per share because to do so would have been anti-dilutive for the periods presented (in thousands): Year ended December 31, 2016 2015 4.25% Convertible Notes 1,133 789 Stock options and restricted stock 774 395 Warrants 33 47 Total potential dilutive effect 1,940 1,231
Recent Accounting Pronouncements	Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-15, Statement of Cash Flows (Topic 230) In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting, In February 2016, the FASB issued ASU 2016-02 Leases (Topic 842) The leasing standard will be effective for calendar year-end public companies beginning after December 15, 2018. Public companies will be required to adopt the new leasing standard for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption will be permitted for all companies and organizations upon issuance of the standard. For calendar year-end public companies, this means an adoption date of January 1, 2019 and retrospective application to previously issued annual and interim financial statements for 2018 and 2017. See Note 19, Commitments and Contingencies, In January 2016, the FASB issued Accounting Standards Update (ASU) 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In July 2015, the FASB issued, ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory, On August 27, 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers. Revenue Recognition There were no other recent accounting pronouncements that have not yet been adopted by the Company that are expected to have a material impact on the Company's consolidated financial statements.

2. Summary of Significant Acc33

2. Summary of Significant Accounting Policies and Recent Accounting Pronouncements (Earnings per Share) (Tables)	12 Months Ended
	Dec. 31, 2016
Earnings Per Share [Abstract]
Earnings per Share	The following table sets forth the computation of basic and diluted net loss per share (in thousands, except per share data): Year ended December 31, 2016 2015 Numerator: Net loss $ (169,590) $ (148,315) Denominator: Weighted-average common shares, basic 7,827 5,333 Dilutive effective of stock options - - Weighted-average common shares, diluted 7,827 5,333 Net loss per share, basic and diluted $ (21.67) $ (27.81)
Antidilutive securitites	The following table sets forth the potential common shares that could potentially dilute basic income per share in the future that were not included in the computation of diluted income (loss) per share because to do so would have been anti-dilutive for the periods presented (in thousands): Year ended December 31, 2016 2015 4.25% Convertible Notes 1,133 789 Stock options and restricted stock 774 395 Warrants 33 47 Total potential dilutive effect 1,940 1,231

3. Fair Value Measurement (Tabl

3. Fair Value Measurement (Tables)	12 Months Ended
	Dec. 31, 2016
Fair Value Disclosures [Abstract]
Company's fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring and nonrecurring basis	In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company's financial assets that are required to be measured at fair value as of December 31, 2016 and December 31, 2015 (in thousands): As of December 31, 2016 Level 1 Level 2 Level 3 Total Money market fund and trust cash sweep investments (1) $ - $ - $ - $ - Total assets $ - $ - $ - $ - As of December 31, 2015 Level 1 Level 2 Level 3 Total Money market fund and trust cash sweep investments (1) $ 4,367 $ - $ - $ 4,367 Total assets $ 4,367 $ - $ - $ 4,367 (1) The Company's money market and trust cash sweep investments are included in cash and cash equivalents within the Consolidated Balance Sheets. The fair and carrying value of the Company's debt instruments are detailed as follows (in thousands): As of December 31, 2016 As of December 31, 2015 Fair Carrying Fair Carrying Value Value Value Value 4.25% Convertible Notes $ 32,595 $ 104,071 $ 68,637 $ 99,776 Derivative liability 230 230 9,165 9,165 Contingent consideration 2,403 2,403 14,055 14,055 Treximet Secured Notes 147,551 183,353 179,518 202,050 Total $ 182,779 $ 290,057 $ 271,375 $ 325,046
Fair Value Measurements Using Significant Unobservable Input (Tables)	For the Company's assets and liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3), the following table provides a reconciliation of the beginning and ending balances for each category therein, and gains or losses recognized during the years ended December 31, 2016 and 2015 (in thousands). December 31, 2016 2015 Derivative liability: Balance at beginning of year $ 9,165 $ - Initial measurement of derivative liability - 28,480 Remeasurement adjustments - gains included in earnings (8,935) (19,315) Ending balance $ 230 $ 9,165 Contingent consideration: Balance at beginning of year $ 14,055 $ - Initial measurement of contingent consideration - 14,193 Remeasurement adjustments - gains included in earnings (11,652) (138) Ending balance $ 2,403 $ 14,055

4. Business Combinations and 35

4. Business Combinations and Other Acquisitions (Tables) - Zohydro ER	12 Months Ended
	Dec. 31, 2016
Schedule of Purchase Price Allocation	The following table summarizes the consideration paid to acquire Zohydro ER and amounts recognized for assets acquired and liabilities assumed as of the acquisition date as well as adjustments made during the measurement period after the acquisition date to the amounts initially recorded on the acquisition date (in thousands): Purchase price: As of April 24, 2015 As initially reported Measurement Period Adjustments As of April 24, 2015 As adjusted Cash consideration paid to Zogenix $ 70,000 $ - $ 70,000 Escrow fund deposited at the time of closing (1) 10,000 - 10,000 Purchased product inventory (2) 927 - 927 Common stock issued (3) 11,926 - 11,926 Fair value of contingent consideration payable to Zogenix (4) 29,327 (15,134) 14,193 Total purchase price $ 122,180 $ (15,134) $ 107,046 Estimated fair value of net assets acquired: Intangible assets (5): Developed technologies $ 67,400 $ 31,400 $ 98,800 In-process research and development 54,600 (50,400) 4,200 Supplier Contract (6) - 1,142 1,142 Assets acquired 122,000 (17,858) 104,142 Liabilities assumed (6) - (3,726) (3,726) Amount attributable to net assets acquired 122,000 (21,584) 100,416 Goodwill (7) $ 180 $ 6,450 $ 6,630
Pro forma financial information	Future results may vary significantly from the results in this pro forma information because of future events and transactions, as well as other factors (in thousands, except for per share data): December 31, 2015 (unaudited) Revenue $ 180,856 Net loss $ (166,709) Pro forma net loss per common share: Basic $ (31.26) Diluted $ (31.26)

5. Accounts Receivables (Tables

5. Accounts Receivables (Tables)	12 Months Ended
	Dec. 31, 2016
Receivables [Abstract]
Accounts receivable	Accounts receivable consist of the following (in thousands): December 31, 2016 2015 Trade accounts receivable $ 50,532 $ 60,564 Less allowance for prompt pay discounts (1,038) (1,844) Less allowance for doubtful accounts (500) (15) Total trade receivables, net 48,994 58,705 Receivables from third parties 1,200 1,594 Other miscellaneous receivables 535 910 Total accounts receivable, net $ 50,729 $ 61,209

7. Inventory (Tables)

7. Inventory (Tables)	12 Months Ended
	Dec. 31, 2016
Inventory Disclosure [Abstract]
Schedule of Inventory	Inventories consist of the following (in thousands): December 31, 2016 2015 Raw materials $ 2,365 $ 2,047 Work-in-process - 1,425 Finished goods 7,393 9,011 Inventory, gross 9,758 12,483 Reserve for obsolescence (1,983) (2,448) Inventory, net $ 7,775 $ 10,035

8. Property, Plant & Equipment

8. Property, Plant & Equipment (Tables)	12 Months Ended
	Dec. 31, 2016
Property, Plant and Equipment [Abstract]
Property, Plant & Equipment	December 31, 2016 2015 Land $ - $ 572 Buildings and improvements 31 31 Equipment 622 840 Furniture and fixtures 701 713 Computer software and website 447 657 Total fixed assets 1,801 2,813 Less: accumulated depreciation (698) (467) Total property and equipment $ 1,103 $ 2,346

9. Goodwill and Intangible As39

9. Goodwill and Intangible Assets (Tables)	12 Months Ended
	Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Changes in the carrying amount of goodwill	Goodwill consists of the following (in thousands): Amount Balance at December 31, 2014 $ 44,900 Goodwill acquired - Zohydro 180 Measurement period adjustments - Zohydro 6,949 Measurement period adjustments - Treximet 2,836 Balance at December 31, 2015 54,865 Goodwill impairment (23,766) Measurement period adjustments - Zohydro (499) Balance at December 31, 2016 $ 30,600
Intangible assets	Intangible assets consist of the following (dollars in thousands): As of December 31, 2016 Weighted Gross Carrying Accumulated Net Carrying Average Life Amount Impairment Amortization Amount Unamortized intangible assets: In-process research and development Indefinite $ 26,500 $ (15,500) $ - $ 11,000 Total unamortized intangible assets 26,500 (15,500) - 11,000 Amortized intangible assets: Brand 0.0 years 3,887 (891) (2,996) - Product licenses 8.4 years 2,846 - (1,232) 1,614 Supplier contracts 5.0 years 583 - (78) 505 Acquired developed technologies 7.7 years 379,737 (15,052) (208,233) 156,452 Total amortized intangible assets 387,053 (15,943) (212,539) 158,571 Total intangible assets $ 413,553 $ (31,443) $ (212,539) $ 169,571 As of December 31, 2015 Weighted Gross Carrying Accumulated Net Carrying Average Life Amount Impairment Amortization Amount Unamortized intangible assets: Trademark rights Indefinite $ 400 $ (400) $ - $ - In-process research and development Indefinite 29,500 (3,000) - 26,500 Total unamortized intangible assets 29,900 (3,400) - 26,500 Amortized intangible assets: Patents 11.0 years 500 (106) (394) - Brand 8.0 years 3,887 - (2,794) 1,093 Product licenses 10.5 years 17,581 (10,059) (5,542) 1,980 Non-compete and supplier contracts 5.6 years 6,337 - (6,337) - Acquired developed technologies 4.1 years 391,624 (10,787) (124,467) 256,370 Total amortized intangible assets 419,929 (20,952) (139,534) 259,443 Total intangible assets $ 449,829 $ (24,352) $ (139,534) $ 285,943
Intangible Assets Estimated Amortization Expenses	Estimated amortization expense related to intangible assets with definite lives for each of the five succeeding years and thereafter is as follows (in thousands): Amount 2017 $ 72,940 2018 13,961 2019 5,507 2020 5,420 2021 5,325 Thereafter 55,418 Total $ 158,571

10. Accrued Allowances (Tables)

10. Accrued Allowances (Tables)	12 Months Ended
	Dec. 31, 2016
Accrued Liabilities [Abstract]
Accrued allowances	Accrued allowances consist of the following (in thousands): December 31, 2016 2015 Accrued returns allowance $ 18,314 $ 11,896 Accrued price adjustments 35,234 44,100 Accrued government program rebates 7,413 6,682 Total $ 60,961 $ 62,678

11. Accrued Expenses (Tables)

11. Accrued Expenses (Tables)	12 Months Ended
	Dec. 31, 2016
Accrued Expenses Tables
Accrued Expenses	Accrued expenses consist of the following (in thousands): December 31, 2016 2015 Due to third parties (revenue sharing arrangements) $ 5,402 $ 6,995 Other accrued expenses 3,309 2,360 Total $ 8,711 $ 9,355

12. Other Liabilities (Tables)

12. Other Liabilities (Tables)	12 Months Ended
	Dec. 31, 2016
Other Liabilities [Abstract]
Other Liabilities	Other liabilities consist of the following (in thousands): December 31, 2016 2015 Settlement obligations (see Note 19) $ 7,783 $ 12,955 Deferred revenue 283 314 Other 1,658 222 Total contracts payable and other obligations 9,724 13,491 Less current portion (5,224) (6,753) Other liabilitites - long-term $ 4,500 $ 6,738

13. Debt and Lines of Credit (T

13. Debt and Lines of Credit (Tables)	12 Months Ended
	Dec. 31, 2016
Debt Disclosure [Abstract]
Debt consists	Debt consists of the following (in thousands): December 31, 2016 2015 Wells Fargo Credit Facility $ 14,000 $ 15,000 4.25% Convertible Notes 104,071 99,776 Treximet Secured Notes 183,353 202,050 Total outstanding debt 301,424 316,826 Less current portion 11,103 13,335 Long term debt outstanding $ 290,321 $ 303,491
Future maturity schedule of the mortgage	The following table represents, by year, the future maturity schedule of the outstanding debt and line of credit as of December 31, 2016 (in thousands): Amount 2017 $ 12,812 2018 14,000 2019 - 2020 176,769 2021 130,000 Thereafter - Total maturities 333,581 Less: note discount and deferred financing costs (32,157) Total outstanding debt $ 301,424

15. Concentrations (Tables)

15. Concentrations (Tables)	12 Months Ended
	Dec. 31, 2016
Concentration Risks, Types, No Concentration Percentage [Abstract]
Aggregate percentage of the Company's total sales and accounts receivable	The following tables list the Company's customers that individually comprise greater than 10% of total gross product sales (before gross to net deductions) and their aggregate percentage of the Company's total gross product sales for the years ended December 31, 2016 and 2015, and the customers that comprise more than 10% of total accounts receivable and such customers' aggregate percentage of the Company's total accounts receivable as of the years ended December 31, 2016 and 2015: Gross Product Sales 2016 2015 McKesson Corporation 36% 38% AmerisourceBergen Drug Corporation 31% 27% Cardinal Health, Inc. 26% 28% Total 93% 93% Accounts Receivable 2016 2015 McKesson Corporation 36% 34% AmerisourceBergen Drug Corporation 28% 30% Cardinal Health, Inc. 28% 28% Total 92% 92%

17. Stock Benefit Plans and S45

17. Stock Benefit Plans and Stock-Based CompensationPlans (Tables)	12 Months Ended
	Dec. 31, 2016
Stock Benefit Plans And Stock-Based Compensation Tables
Weighted average fair value of stock options granted	The weighted average fair value of stock options granted during the periods and the assumptions used to estimate those values using the Black-Scholes option pricing model were as follows: Year ended December 31, 2016 2015 Weighted average expected stock price volatility 77.9 % 72.3 % Estimated dividend yield - % - % Risk-free interest rate 1.4 % 1.7 % Expected life of option (in years) 6.1 6.3 Weighted average grant date fair value per option $ 7.63 $ 42.30
Option activity	The following table shows the stock option activity, described above, during the year ended December 31, 2016 (share and intrinsic values in thousands): Weighted Average Average Remaining Aggregate Exercise Contractual Life Intrinsic Shares Price (years) Value Options Outstanding at December 31, 2015 703 $ 55.42 Granted 632 11.73 Exercised - - $ - Cancelled (685) 43.15 Expired - - Options outstanding at December 31, 2016 650 $ 25.85 9.0 $ - Options vested and expected to vest as of December 31, 2016 491 $ 30.80 8.9 $ - Options vested and exercisable as of December 31, 2016 79 $ 70.34 6.9 $ -
Non-vested restricted stock activity	The following table shows the Company's non-vested restricted stock activity during the year ended December 31, 2016 (share and intrinsic values in thousands): Weighted Average Aggregate Grant Date Fair Intrinsic Shares Value Value Non-vested restricted stock outstanding at December 31, 2015 6 $ 30.00 Granted 197 3.36 Vested (6) 30.00 $ 63 Forfeited - - Non-vested restricted stock outstanding at December 31, 2016 197 $ 3.36

18. Income Taxes (Tables)

18. Income Taxes (Tables)	12 Months Ended
	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Income tax expense (benefits)	The components of the provision (benefit) for income taxes are as follows for the years ending December 31, 2016 and 2015 (in thousands): Year Ended December 31, 2016 2015 Current: Federal $ 455 $ 6,923 State 356 508 Foreign (172) 207 Total current provision 639 7,638 Deferred Provision: Federal (189) (1,329) State (11) (551) Foreign - 1,304 Total deferred provision (benefit) (200) (576) Total $ 439 $ 7,062
Deferred income taxes	The sources of the temporary differences and their effect on deferred taxes are as follows (in thousands): Year Ended December 31, 2016 2015 Deferred tax assets: Accruals and other reserves $ 36,052 $ 24,205 Intangibles 4,414 - Inventory 1,157 985 Stock awards 4,532 3,757 Net operating loss carryovers 33,241 8,038 Gross deferred tax assets 79,396 36,985 Valuation allowance (79,373) (31,453) Net deferred tax asset 23 5,532 Deferred tax liabilities: Fixed Assets (23) (1,021) Intangibles - (4,713) Gross deferred tax liability (23) (5,734) Net deferred tax asset/(liability) - (202) Included in consolidated balance sheet: Deferred income tax assets/(liabilities) - current - - Deferred income tax assets/(liabilities) - long-term - (202) Net deferred tax asset/(liability) $ - $ (202)
Effective on income tax rate from continuing operations	The effective income tax rate from continuing operations is different from the federal statutory rate for the years ended December 31, 2016 and 2015 for the following reasons: Year Ended December 31, 2016 2015 Expected taxes at statutory rates 35.0 % 35.0 % State taxes, net of federal tax benefit (0.1) % - Foreign income tax rate differential (10.0) % (13.6) % Amortization and impairment of goodwill (8.7) % (2.0) % Mark to market adjustment 4.3 % - Deductible inducement payment 3.3 % 2.0 % Change in valuation allowance (25.2) % (21.7) % Change in liability for uncertain tax positions - (4.8) % Permanent differences and other 1.1 % 0.1 % (0.3) % (5.0) %
Reconciliation of beginning and ending amount of unrecognized tax benefits	The following summarizes the activity related to the Company's unrecognized tax benefits (in thousands): Year Ended December 31, 2016 2015 Balance at beginning of year $ 7,410 $ - Tax positions taken in prior periods - - Tax positions taken in current year - 7,410 Accrual of interest related to tax positions taken - - Settlements - - Foreign currency translation - - Balance at end of year $ 7,410 $ 7,410

19. Commitments and Contingen47

19. Commitments and Contingencies (Tables)	12 Months Ended
	Dec. 31, 2016
Commitments and Contingencies Disclosure [Abstract]
Future minimum lease payments under non-cancelable operating leases	Future minimum lease payments under non-cancelable operating leases are as follows as of December 31, 2016 (in thousands): Amount 2017 $ 617 2018 628 2019 640 2020 518 2021 524 Thereafter 309 Total $ 3,236 Future minimum lease payments under non-cancelable operating subleases are as follows as of December 31, 2016 (in thousands): Amount 2017 $ 118 2018 121 2019 125 2020 - 2021 - Thereafter - Total $ 364

20. Restructuring (Tables)

20. Restructuring (Tables)	12 Months Ended
	Dec. 31, 2016
Restructuring and Related Activities [Abstract]
Accrued restructuring costs	A summary of accrued restructuring costs, included as a component of accounts payable and accrued expenses on the consolidated balance sheets, are as follows (in thousands): December 31, 2015 Charges Cash Non-cash December 31, 2016 2016 restructuring costs $ - $ 2,287 $ (1,669) $ - $ 618 2015 restructuring costs 104 - (104) - - Totals $ 104 $ 2,287 $ (1,773) $ - $ 618 December 31, 2014 Charges Cash Non-cash December 31, 2015 2015 restructuring costs $ - $ 1,137 $ (380) $ (653) $ 104

21. Schedule of Cash Flow, Supp

21. Schedule of Cash Flow, Supplemental Disclosures (Tables)	12 Months Ended
	Dec. 31, 2016
Schedule Of Cash Flow Supplemental Disclosures Tables
Schedule of cash flow, supplemental disclosures	Note 21. Supplemental Cash Flow Information Years ended December 31, 2016 2015 Supplemental disclosures of Cash Flow Information: Cash received for income taxes, net $ (4,780) $ (352) Cash paid for interest 30,165 30,207 Supplemental disclosures of Non-cash Investing and Financing Activities: Reclassification of treasury stock 5,571 - Conversion of 8.00% Convertible notes - 60,172 Issuance of 168,209 shares to Zogenix for Zohydro acquisition - 11,926

22. Quarterly Financial Data 50

22. Quarterly Financial Data (Unaudited) (Tables)	12 Months Ended
	Dec. 31, 2016
Quarterly Financial Information Disclosure [Abstract]
Quarterly consolidated financial data	Selected quarterly consolidated financial data are shown below (in thousands, except per share data, unaudited). Three Months Ended March 31, June 30, September 30, December 31, 2016 Net revenues $ 32,469 $ 36,746 $ 41,468 $ 30,173 Operating loss (23,809) (22,300) (17,402) (76,817) Net loss (25,936) (31,139) (26,438) (86,077) Basic loss per common share $ (4.24) $ (4.67) $ (2.99) $ (8.92) Diluted loss per common and potential common share $ (4.24) $ (4.67) $ (2.99) $ (8.92) 2015 Net revenues $ 33,889 $ 46,977 $ 48,615 $ 46,369 Operating loss (18,905) (15,362) (16,153) (50,834) Net loss (23,674) (32,235) (10,740) (81,666) Basic loss per common share $ (6.16) $ (6.15) $ (1.76) $ (13.37) Diluted loss per common and potential common share $ (6.16) $ (6.15) $ (1.76) $ (13.37)

Valuation Reserves Schedule (Ta

Valuation Reserves Schedule (Tables)	12 Months Ended
	Dec. 31, 2016
Valuation Reserves Schedule Tables
Schedule of Valuation Allowance for Impairment of Recognized Servicing Assets	Valuation and Qualifying Accounts Additions Balance at charged to Balance at beginning of costs and end of (in thousands) period expenses Deductions period For the year ended December 31, 2016 Allowance for doubtful accounts (1) $ 15 $ 618 $ (133) $ 500 Allowance for prompt pay discounts (1) 1,844 6,718 (7,524) 1,038 Inventory obsolescence allowance (2) 2,448 2,184 (2,649) 1,983 For the year ended December 31, 2015 Allowance for doubtful accounts (1) 228 - (213) 15 Allowance for prompt pay discounts (1) 893 6,949 (5,998) 1,844 Inventory obsolescence allowance (2) 2,220 960 (732) 2,448 (1) Shown as a reduction of accounts receivable. Charges related to prompt pay discounts are reflected as a reduction of revenue.

2. Summary of Significant Acc52

2. Summary of Significant Accounting Policies Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Numerator:
Net loss	$ (86,077)	$ (26,438)	$ (31,139)	$ (25,936)	$ (81,666)	$ (10,740)	$ (32,235)	$ (23,674)	$ (169,590)	$ (148,315)
Denominator:
Weighted-average common shares, basic									7,827	5,333
Dilutive effect of stock options									0	0
Weighted-average common shares, diluted									7,827	5,333
Net loss per share, basic and diluted									$ (21.67)	$ (27.81)

2. Summary of Significant Acc53

2. Summary of Significant Accounting Policies Earnings Per Share Excluded (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Anti-dilutive shares	1,940	1,231
4.25% Convertible Notes
Anti-dilutive shares	1,133	789
Stock Options and Restricted Stock
Anti-dilutive shares	774	395
Warrants
Anti-dilutive shares	33	47

3. Fair Value Measurement (Deta

3. Fair Value Measurement (Details) - USD ($) $ in Thousands	Dec. 31, 2016		Dec. 31, 2015
Assets
Money market fund and trust cash sweep investments (1)	$ 0		$ 4,367
Total Assets	0		4,367
Level 1 Member
Assets
Money market fund and trust cash sweep investments (1)	0	[1]	4,367
Total Assets	0		4,367
Level 2 Member
Assets
Money market fund and trust cash sweep investments (1)	0		0
Total Assets	0		0
Level 3 Member
Assets
Money market fund and trust cash sweep investments (1)	0		0
Total Assets	$ 0		$ 0
[1]	The Company's money market and trust cash sweep investments are included in cash and cash equivalents within the Consolidated Balance Sheet.

3. Fair Value Measurement (Debt

3. Fair Value Measurement (Debt Instruments) (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Debt instruments, fair value	$ 182,779	$ 271,375
Debt instruments, carrying value	290,057	325,046
4.25% Convertible Notes
Debt instruments, fair value	32,595	68,637
Debt instruments, carrying value	104,071	99,776
Derivative Liability
Debt instruments, fair value	230	9,165
Debt instruments, carrying value	230	9,165
Contingent Consideration
Debt instruments, fair value	2,403	14,055
Debt instruments, carrying value	2,403	14,055
Treximet Secured Notes
Debt instruments, fair value	147,551	179,518
Debt instruments, carrying value	$ 183,353	$ 202,050

3. Fair Value Measurements Usin

3. Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Derivative Liability
Beginning balance	$ 9,165	$ 0
Initial measurement of derivative liability or contingent consideration	0	28,480
Remeasurement adjustments - gains included in earnings	(8,935)	(19,315)
Ending balance	230	9,165
Contingent Consideration
Beginning balance	14,055	0
Initial measurement of derivative liability or contingent consideration	0	14,193
Remeasurement adjustments - gains included in earnings	(11,652)	(138)
Ending balance	$ 2,403	$ 14,055

4. Business Combination (Purcha

4. Business Combination (Purchase Price and Fair Value) (Details) - USD ($) $ in Thousands	1 Months Ended
	Apr. 24, 2015	Aug. 20, 2014
(initially reported)
Purchase price components
Cash consideration paid to Zogenix	$ 70,000
Escrow fund deposited at the time of closing	10,000
Purchased product inventory	927
Common stock issued	11,926
Fair value of contingent consideration payable to Zogenix	29,327
Total purchase price	122,180
Intangible assets:
Developed technologies	67,400
In-process research and development	54,600
Supplier Contract	0
Assets acquired	122,000
Liabilities assumed	0
Amount attributable to net assets acquired	122,000
Goodwill	$ 180
Business Acquisition, Name of Acquired Entity	Zohydro ER	Treximet
Business Combination, Assets and Liabilities, Description	On April 24, 2015, the Company completed the acquisition of the pharmaceutical product line, Zohydro ER, including an abuse-deterrent pipeline and all related intellectual property, a supplier contract, an associated liability payable and a specified quantity of inventory associated therewith, from Zogenix, Inc. (Zogenix). There were no other tangible or intangible assets acquired and liabilities assumed related to the Zohydro ER product line from Zogenix. The total purchase price consisted of an upfront cash payment of $80.0 million including a deposit of $10.0 million in an escrow fund, stock consideration of $11.9 million issued in common stock of the Company, $927,000 for specified quantity of inventory, and regulatory and commercial milestones of up to $283.5 million including a $12.5 million milestone payment upon approval of ZX007 abuse-deterrent extended-release hydrocodone tablet and up to $271.0 million in potential sales milestones if the Zohydro ER product line achieves certain agreed-upon net sales targets. Zohydro ER is an extended-release form of hydrocodone indicated for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. Zohydro ER does not contain acetaminophen, unlike many immediate-release hydrocodone products, such as Vicodin and Lortab, reducing the risk for potential liver toxicity due to overexposure of acetaminophen. The FDA approved the New Drug Application (NDA) for Zohydro ER in October 2013 and the product was launched in March 2014. The Zohydro ER product line acquisition was accounted for as a business combination in accordance with ASC 805 Business Combinations	On August 20, 2014, the Company, through a wholly owned subsidiary PIL, formerly known as Worrigan Limited, completed the acquisition of the U.S. intellectual property rights to the pharmaceutical product, Treximet, from GSK. There were no other tangible or intangible assets acquired or liabilities assumed related to Treximet intellectual property from GSK. The total purchase price consisted of an upfront cash payment of $250.0 million paid to GSK upon closing of the transaction, and $17.0 million payable to GSK upon receipt of an updated FDA-issued "Written Request" for pediatric exclusivity from the FDA, subject to certain deductions based on delays in supplying the commercial product to the Company. Subsequently, the deductions resulting from delays in supplying the commercial product reduced the $17.0 million payable amount to $1.95 million, which was paid during the fourth quarter of 2014. The Company funded this acquisition with $220.0 million in debt, plus approximately $32.0 million from available cash. Treximet is a medication indicated for the acute treatment of migraine pain and inflammation and is manufactured by GSK under a license from Pozen. In June 2003, Pozen licensed the U.S. only rights to Treximet to GSK. GSK was responsible for all commercialization activities in the U.S. The product was approved by the FDA in April 2008. In November 2011, Pozen sold most of the future royalty and milestone payments covering Treximet sales in the U.S. to CPPIB Credit Investments Inc. ("CPPIB"). Treximet is covered by three patents in the U.S. which expire August 14, 2017. In addition, the Company received pediatric exclusivity and may seek other potential FDA exclusivity options, which may provide an additional six months to three years of exclusivity. In connection with the transaction, GSK assigned to PIL the Product Development and Commercialization Agreement, (the PDC Agreement) between GSK and Pozen. In connection with the assignment of the PDC Agreement, PIL paid $3.0 million to CPPIB (which owns the rights to the royalty payments under the PDC Agreement), and the Company granted Pozen a warrant (the Warrant) to purchase 50,000 shares of the Company's common stock at an exercise price of $42.80 per share (the closing price of the Company's common stock on May 13, 2014 as reported on NASDAQ). The Warrant is exercisable from the closing date (August 20, 2014) of the PDC Agreement until February 28, 2018. The Company will continue to pay a royalty to Pozen under the PDC Agreement, equal to 18% of Treximet net sales with quarterly minimum royalty amounts of $4.0 million for the calendar quarters commencing on January 1, 2015 and ending on March 31, 2018.
Period Adjustments
Purchase price components
Cash consideration paid to Zogenix	$ 0
Escrow fund deposited at the time of closing	0
Purchased product inventory	0
Common stock issued	0
Fair value of contingent consideration payable to Zogenix	(15,134)
Total purchase price	(15,134)
Intangible assets:
Developed technologies	31,400
In-process research and development	(50,400)
Supplier Contract	1,142
Assets acquired	(17,858)
Liabilities assumed	(3,726)
Amount attributable to net assets acquired	(21,584)
Goodwill	6,450
(as adjusted)
Purchase price components
Cash consideration paid to Zogenix	70,000
Escrow fund deposited at the time of closing	10,000
Purchased product inventory	927
Common stock issued	11,926
Fair value of contingent consideration payable to Zogenix	14,193
Total purchase price	107,046
Intangible assets:
Developed technologies	98,800
In-process research and development	4,200
Supplier Contract	1,142
Assets acquired	104,142
Liabilities assumed	(3,726)
Amount attributable to net assets acquired	100,416
Goodwill	$ 6,630

4. Business Combinations (Pro F

4. Business Combinations (Pro Forma Financial Information with Narrative) (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2016USD ($)$ / shares
Business Combinations Pro Forma Financial Information With Narrative Details
Revenue | $	$ 180,856
Net loss | $	$ (166,709)
Business acquisition, pro forma net loss per share, basic | $ / shares	$ (31.26)
Business acquisition, pro forma net loss per share, diluted | $ / shares	$ (31.26)
Business Acquisition, Pro Forma Information, Description	The Company's historical financial information was adjusted to give effect to the pro forma events that were directly attributable to the Zohydro ER acquisition and are factually supportable. The unaudited pro forma consolidated results include historical revenues and expenses of assets acquired in the acquisition with the following adjustments: Adjustment to recognize incremental amortization expense based on the fair value of intangibles acquired; Adjustment to recognize incremental interest expense and amortization of debt issuance costs for debt issued in connection with the acquisition; Eliminate transaction costs and non-recurring charges directly related to the acquisition that were included in the historical results of operations for Pernix; Adjustment to recognize pro forma income tax based on income tax benefit on the amortization of intangible assets at the statutory tax rate of Ireland (12.50%), and the income tax benefit on the interest expense at the statutory tax rate of the United States (36.95%). For the year ended December 31, 2015, the Company has recognized revenue for Zohydro ER subsequent to the closing of April 24, 2015 in the amount of $16.5 million and pre-tax net loss of $14.6 million. Non-recurring transaction costs of $2.9 million related to the acquisition for the year ended December 31, 2015 are included in the consolidated statements of operations in selling, general and administrative expense. These non-recurring transaction costs have been excluded from the pro forma results in the above table.

5. Accounts Receivable (Details

5. Accounts Receivable (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Accounts Receivable Details
Trade accounts receivable	$ 50,532	$ 60,564
Less allowance for prompt pay discounts	(1,038)	(1,844)
Less allowance for doubtful accounts	(500)	(15)
Total trade receivables, net	48,994	58,705
Receivables from third parties	1,200	1,594
Other miscellaneous receivables	535	910
Total accounts receivable, net	$ 50,729	$ 61,209

7. Inventory (Details)

7. Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 2,365	$ 2,047
Work-in-process	0	1,425
Finished goods	7,393	9,011
Inventory, gross	9,758	12,483
Reserve for obsolescence	(1,983)	(2,448)
Inventory, net	$ 7,775	$ 10,035

8. Property, Plant & Equipmen61

8. Property, Plant & Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Property, Plant and Equipment [Abstract]
Land	$ 0	$ 572
Buildings and improvements	31	31
Equipment	622	840
Furniture and fixtures	701	713
Computer software and website	447	657
Total fixed assets	1,801	2,813
Less: accumulated depreciation	(698)	(467)
Total property and equipment	$ 1,103	$ 2,346

8. Property, Plant & Equipmen62

8. Property, Plant & Equipment (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Depreciation expense	$ 704	$ 361
Impairment charges for land held for sale	$ 47,000

9. Goodwill (Details)

9. Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Goodwill	$ 30,600	$ 54,865	$ 44,900
Goodwill impairment	(23,766)
Zohydro ER
Increase in goodwill related to acquisitions	0	180
Measurement period adjustments	(499)	6,949
Treximet
Increase in goodwill related to acquisitions	0
Measurement period adjustments	$ 0	$ 2,836

9. Goodwill and Intangible As64

9. Goodwill and Intangible Assets (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Intangible assets consist of the following
Gross Carrying Amount	$ 413,553	$ 449,829
Impairment	(31,443)	(24,352)
Accumulated Amortization	(212,539)	(139,534)
Net Carrying Amount	169,571	285,943
In Process Research And Development Member
Intangible assets consist of the following
Gross Carrying Amount	26,500	29,500
Impairment	(15,500)	(3,000)
Accumulated Amortization	0	0
Net Carrying Amount	11,000	26,500
Trademark rights Member
Intangible assets consist of the following
Gross Carrying Amount		400
Impairment		(400)
Accumulated Amortization		0
Net Carrying Amount		0
Total Indefinite Lived
Intangible assets consist of the following
Gross Carrying Amount	26,500	29,900
Impairment	(15,500)	(3,400)
Accumulated Amortization	0	0
Net Carrying Amount	$ 11,000	$ 26,500
Brand Member
Intangible assets consist of the following
Weighted Average Life	0 years	8 years
Gross Carrying Amount	$ 3,887	$ 3,887
Impairment	(891)	0
Accumulated Amortization	(2,996)	(2,794)
Net Carrying Amount	$ 0	$ 1,093
Product Licenses Member
Intangible assets consist of the following
Weighted Average Life	8 years 144 days	10 years 180 days
Gross Carrying Amount	$ 2,846	$ 17,581
Impairment	0	(10,059)
Accumulated Amortization	(1,232)	(5,542)
Net Carrying Amount	$ 1,614	$ 1,980
Noncompete And Supplier Contracts Member
Intangible assets consist of the following
Weighted Average Life	5 years	5 years 216 days
Gross Carrying Amount	$ 583	$ 6,337
Impairment	0	0
Accumulated Amortization	(78)	(6,337)
Net Carrying Amount	$ 505	$ 0
Acquired Developed Technology Member
Intangible assets consist of the following
Weighted Average Life	7 years 252 days	4 years 36 days
Gross Carrying Amount	$ 379,737	$ 391,624
Impairment	(15,052)	(10,787)
Accumulated Amortization	(208,233)	(124,467)
Net Carrying Amount	156,452	$ 256,370
Patents Member
Intangible assets consist of the following
Weighted Average Life		11 years
Gross Carrying Amount		$ 500
Impairment		(106)
Accumulated Amortization		(394)
Net Carrying Amount		0
Total Definite Lived
Intangible assets consist of the following
Gross Carrying Amount	387,053	419,929
Impairment	(15,943)	(20,952)
Accumulated Amortization	(212,539)	(139,534)
Net Carrying Amount	$ 158,571	$ 259,443

9. Goodwill and Intangible As65

9. Goodwill and Intangible Assets (Details 2) $ in Thousands	Dec. 31, 2016USD ($)
Estimated amortization expense related to intangible assets
2,017	$ 72,940
2,018	13,961
2,019	5,507
2,020	5,420
2,021	5,325
Thereafter	55,418
Total	$ 158,571

9. Goodwill and Intangible As66

9. Goodwill and Intangible Assets (Details Narrative) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expense	$ 85.5	$ 94.3

10. Accrued Allowances (Details

10. Accrued Allowances (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Accrued allowances consist of the following
Accrued returns allowance	$ 18,314	$ 11,896
Accrued price adjustments	35,234	44,100
Accrued government program rebates	7,413	6,682
Total	$ 60,961	$ 62,678

11. Accrued Expenses (Details)

11. Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Accrued Liabilities [Abstract]
Due to third parties (revenue sharing arrangements)	$ 5,402	$ 6,995
Other accrued expenses	3,309	2,360
Total	$ 8,711	$ 9,355

12. Other Liabilities (Details)

12. Other Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Other Liabilities [Abstract]
Settlement obligations (see Note 19)	$ 7,783	$ 12,955
Deferred revenue	283	314
Other	1,658	222
Total contracts payable and other obligations	9,724	13,491
Other liabilities - current	(5,224)	(6,753)
Other liabilities - long term	$ 4,500	$ 6,738

13. Debt and Lines of Credit (D

13. Debt and Lines of Credit (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Total debt	$ 301,424	$ 316,826
Debt - current	11,103	13,335
Debt - long term	290,321	303,491
Wells Fargo Credit Facility
Total debt	14,000	15,000
4.25% Convertible Notes
Total debt	104,071	99,776
Treximet Secured Notes
Total debt	$ 183,353	$ 202,050

13. Debt and Lines of Credit 71

13. Debt and Lines of Credit (Details 1) $ in Thousands	Dec. 31, 2016USD ($)
Debt And Lines Of Credit Details 1
2,017	$ 12,812
2,018	14,000
2,019	0
2,020	176,769
2,021	130,000
Thereafter	0
Total maturities	333,581
Total outstanding debt	$ 301,424

13. Debt and Lines of Credit 72

13. Debt and Lines of Credit (Details Narrative) $ in Thousands	12 Months Ended
	Dec. 31, 2016USD ($)
Wells Fargo
Outstanding notes	$ 14,000
Line of Credit Facility, Description	Wells Fargo On August 21, 2015, the Company entered into a Credit Agreement with Wells Fargo, National Association, as Administrative Agent and the lenders party thereto for a $50.0 million, three-year senior secured revolving credit facility (the Wells Fargo Credit Facility), which may be increased by an additional $20.0 million in the lenders' discretion. The Company's obligations under the Wells Fargo Credit Facility are secured by, among other things, the Company's and certain subsidiaries' inventory and accounts receivable, and are guaranteed by certain of the Company's subsidiaries. As of December 31, 2016, $14.0 million is outstanding under the Wells Fargo Credit Facility and classified as Credit facilities - long-term on the consolidated balance sheets. Availability of borrowings under the Wells Fargo Credit Facility from time to time is subject to a borrowing base calculation based upon a valuation of the Company's eligible inventories and eligible accounts receivable, each multiplied by an applicable advance rate. Borrowing availability under the Wells Fargo Credit Facility was $16.9 million as of December 31, 2016. Pursuant to the terms of the Wells Fargo Credit Facility, the Administrative Agent has the authority to impose reserves against our borrowing base under certain circumstances in its sole discretion. We understand that the Administrative Agent is currently evaluating whether to impose such a reserve. If the Administrative Agent were to impose such a reserve, depending on the Company's inventory levels and the size of the reserve, the Company's excess availability under the Wells Fargo Credit Facility could fall below $10.0 million, which, in turn, would trigger an obligation for the Company to meet a 1 to 1 fixed charge coverage ratio test. If the Company were unable to meet this fixed charge coverage ratio test, the Company would be in default under the terms of the Wells Fargo Credit Facility. If the Company were to be in default, the Company anticipate that it would consider entering into a forbearance agreement with the Administrative Agent or seeking an alternative funding source. There can be no assurance that the Company would be able enter into a forbearance agreement or find an alternative funding source on satisfactory terms, or at all.
4.25% Convertible Notes
Outstanding notes	$ 104,071
Interest rate	4.25%
Debt, Description	4.25% Convertible Notes On April 22, 2015, the Company issued $130.0 million aggregate principal amount 4.25% Convertible Senior Notes (the 4.25% Convertible Notes). The 4.25% Convertible Notes mature on April 1, 2021, unless earlier converted, redeemed or repurchased. The Company received net proceeds from the sale of the 4.25% Convertible Notes of $125.0 million, after deducting placement agent fees and commissions and offering expenses payable by the Company. Interest on the 4.25% Convertible Notes is payable on April 1 and October 1 of each year, beginning October 1, 2015. The discounted note balance of $107.4 million and $103.8 million is recorded as long-term debt on the consolidated balance sheet as of December 31, 2016 and 2015, respectively. The 4.25% Convertible Notes are governed by the terms of an indenture (the Indenture), between the Company and Wilmington Trust, National Association (the Trustee), each of which were entered into on April 22, 2015. The Company may not redeem the 4.25% Convertible Notes prior to April 6, 2019. However, the holders may convert their 4.25% Convertible Notes at any time prior to the close of business on the business day immediately preceding January 1, 2021 only under certain circumstances. Upon conversion, the Company will deliver a number of shares of the Company's common stock equal to the conversion rate in effect on the conversion date. Effective upon the Reverse Stock Split, the conversion rate decreased from 87.2030 shares of the Company's common stock for each $1,000 principal amount of the 4.25% Convertible Notes to 8.7237 shares of the Company's common stock for each $1,000 principal amount of the 4.25% Convertible Notes, which represents a conversion price of approximately $114.63 per share. Following certain corporate transactions that can occur on or prior to the stated maturity date, the Company will increase the conversion rate for a holder that elects to convert its 4.25% Convertible Notes in connection with such a corporate transaction. In addition to the holder option to convert, the 4.25% Convertible Notes may be redeemed upon the occurrence of certain events. The Company incurred debt issuance costs of approximately $5.0 million, which have been deferred and which are being amortized over a six-year period, unless earlier converted, in which case the unamortized costs would be recorded in additional paid-in capital. The effective interest rate on the 4.25% Convertible Notes, including debt issuance costs and bifurcated conversion option derivative (discussed below), is 9.7%. The Company is required to separate the conversion option in the 4.25% Convertible Notes under ASC 815, Derivatives and Hedging Debt with Conversion and Other Options In addition to the bifurcated conversion feature, there are two other features that require bifurcation but contain de minimis value. Although the probability was considered remote, at the time of the transaction, that (1) additional interest would be incurred for failure to file financial statements timely or (2) the 4.25% Convertible Notes would be redeemed by the Company following the failure of the Zohydro ER acquisition to close prior to July 8, 2015. The Company will continue to monitor the timely filing of its financial statements for any additional interest that could be incurred. Interest expense was $9.1 million and $6.1 million for the years ended December 31, 2016 and 2015, respectively, related to the 4.25% Convertible Notes. Change in fair value of derivative liability was income of $8.9 million and $19.3 million for the years ended December 31, 2016 and 2015, respectively. Accrued interest on the 4.25% Convertible Notes was approximately $1.4 million as of December 31, 2016 and December 31, 2015, respectively. As of December 31, 2016 and December 31, 2015, the Company had outstanding borrowings of $130.0 million related to the 4.25% Convertible Notes.
8.00% Convertible Notes
Interest rate	8.00%
Debt, Description	8.00% Convertible Notes On April 16, 2015, the Company entered into an agreement (the Inducement Agreement) with all of the holders of its 8.00% Convertible Senior Notes due 2019 (the 8.00% Convertible Notes) representing $65.0 million aggregate principal amount, pursuant to which such holders agreed to the removal of substantially all of the material restrictive covenants in the indenture governing the 8.00% Convertible Notes and to convert their notes in accordance with the provisions of such indenture in exchange for an aggregate of 233,813 shares of the Company's common stock (the Inducement Shares). The Company recorded $19.5 million as cost of inducement expense in the year ended December 31, 2015. The issuance of the Inducement Shares was made pursuant to an exemption from the registration requirements of the Securities Act contained in Section 4(a)(2). Each of the holders entering into the Inducement Agreement agreed not to sell the shares of the Company's common stock to be issued to it upon conversion of the 8.00% Convertible Notes for 145 days (the lock-up period) subject to exceptions, including in connection with settling existing short positions with respect to the 8.00% Convertible Notes and underwritten public offerings pursuant to existing registration rights with respect to such shares of the Company's common stock. In addition, such holders are permitted to dispose of up to 80 percent of such shares of the Company's common stock remaining after settling existing short positions prior to the end of the lock-up period in specified intervals. During the year ended December 31, 2015, the holders of the 8.00% Convertible Notes converted the outstanding notes at a conversion price of $36.00 per share. The Company issued 1.8 million shares pursuant to this conversion and retired the $65.0 million of the outstanding 8.00% Convertible Notes. Interest expense was $0 and $1.6 million for the years ended December 31, 2016 and 2015, respectively related to the 8.00% Convertible Notes. As of December 31, 2016 and 2015, the Company had outstanding borrowings of $0 related to the 8.00% Convertible Notes, respectively. Accrued interest on the 8.00% Convertible Notes was $0 as of December 31, 2016 and 2015, respectively. Interest expense of $547,000 that accrued during the year ended December 31, 2015 was forfeited and recorded in additional paid-in capital. During the year ended December 31, 2015, the Company recorded the remaining $5.4 million unamortized deferred financing costs related to the 8.00% Convertible Notes in additional paid-in capital.
Treximet Note Offering [Member]
Term Loan Interest Percentage	12.00%
Deferred financing fees expensed	$ 7,800
Interest expense debt	23,300
Outstanding notes	$ 183,353
Interest rate	12.00%
Debt, Description	Treximet Note Offering On August 19, 2014, the Company issued $220.0 million aggregate principal amount of its 12% Senior Secured Notes due 2020 (the Treximet Secured Notes) pursuant to an Indenture (the August 2014 Indenture) dated as of August 19, 2014 among the Company, certain of its subsidiaries (the Guarantors) and U.S. Bank National Association (the August 2014 Trustee), as trustee and collateral agent. The Treximet Secured Notes mature on August 1, 2020 and bear interest at a rate of 12% per annum, payable in arrears on February 1 and August 1 of each year (each, a Payment Date), beginning on February 1, 2015. On each Payment Date, commencing August 1, 2015, the Company will pay an installment of principal of the Treximet Secured Notes in an amount equal to 50% of net sales of Treximet for the two consecutive fiscal quarters immediately preceding such Payment Date (less the amount of interest paid on the Treximet Secured Notes on such Payment Date). At each month-end beginning with January 2015, the net sales of Treximet will be calculated, the monthly interest accrual amount will then be deducted from the net sales and this resulting amount will be recorded as the current portion of the Treximet Secured Notes. If the Treximet net sales less the interest due at each month-end of each six-month period does not result in any excess over the interest due, no principal payment must be paid at that time. The remaining balance outstanding on the Treximet Secured Notes will be due on the maturity date, which is August 1, 2020. As of December 31, 2016 and 2015, the Company classified $12.8 million and $15.0 million, respectively, of the Treximet Secured Notes as a current liability. The Treximet Secured Notes are unconditionally guaranteed, jointly and severally, by the Guarantors. The Treximet Secured Notes and the guarantees of the Guarantors are secured by a continuing first-priority security interest in substantially all of the assets of the Company and the Guarantors related to Treximet other than inventory and certain inventory related assets, including accounts arising from the sale of the inventory. The Company may redeem the Treximet Secured Notes at its option, in whole at any time or in part from time to time, on any business day, on not less than 30 days nor more than 60 days prior notice provided to each holder's registered address. If such redemption was prior to August 1, 2015, the redemption price would have been equal to the greater of (i) the principal amount of the Treximet Secured Notes being redeemed and (ii) the present value, discounted at the applicable treasury rate of the principal amount of the Treximet Secured Notes being redeemed plus 1.00%, of such principal payment amounts and interest at the rate per annum shown above on the outstanding principal balance of the Treximet Secured Notes being redeemed assuming the principal balances were amortized at the times and in the assumed amounts set forth on Schedule A to the August 2014 Indenture. If such redemption occurred on or after August 1, 2015 and prior to August 1, 2016, the redemption price would have been equal to 106% of the outstanding principal amount of Treximet Secured Notes being redeemed plus accrued and unpaid interest thereon, or occurs (i) on or after August 1, 2016 and prior to August 1, 2017, the redemption price will equal 103% of the outstanding principal amount of the Treximet Secured Notes being redeemed plus accrued and unpaid interest thereon and (ii) on or after August 1, 2017, the redemption price will equal 100% of the outstanding principal amount of the Treximet Secured Notes being redeemed plus accrued and unpaid interest thereon. The August 2014 Indenture contains covenants that limit the ability of the Company and the Guarantors to, among other things: incur certain additional indebtedness; pay dividends on, redeem or repurchase stock or make other distributions in respect of its capital stock; repurchase, prepay or redeem certain indebtedness; make certain investments; create restrictions on the ability of the Guarantors to pay dividends to the Company or make other intercompany transfers; create liens; transfer or sell assets; consolidate, merge or sell or otherwise dispose of all or substantially all of its assets and enter into certain transactions with affiliates. Upon the occurrence of certain events constituting a change of control, the Company is required to make an offer to repurchase all of the Treximet Secured Notes (unless otherwise redeemed) at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any to the repurchase date. The August 2014 Indenture provides that an Event of Default (as defined in the August 2014 Indenture) will occur if, among other things, (a) the Company defaults in any payment of interest on any note when due and payable, and such default continues for a period of 30 days; (b) the Company defaults in the payment of principal of or premium, if any, on any note when due and payable on the maturity date, upon declaration of acceleration or otherwise, or to pay the change of control repurchase price, when due and payable, and such default continues for a period of five days; (c) failure to make a repurchase offer in the event of a change in control when required under the August 2014 Indenture, which continues for three business days; (d) the Company or any Guarantor fails to comply with certain covenants after receiving written notice from the August 2014 Trustee or the holders of more than 25% of the principal amount of the outstanding Treximet Secured Notes; (e) the Company or any Guarantor defaults with respect to other indebtedness for borrowed money in excess of $8.0 million and such default is not cured within 30 days after written notice from the August 2014 Trustee or the holders of more than 25% of the principal amount of the outstanding Treximet Secured Notes; (f) the Company or any Guarantor has rendered against it a final judgment for the payment of $8.0 million (or its foreign currency equivalent) or more (excluding any amounts covered by insurance) under certain circumstances; (g) certain bankruptcy, insolvency, liquidation, reorganization or similar events occur with respect to the Company or any Guarantor; (h) a guarantee of the Treximet Secured Notes (with certain exceptions) is held to be unenforceable or invalid in a judicial proceeding or ceases to be in full force and effect or a Guarantor disaffirms its obligations under its guarantee of the Treximet Secured Notes; and (i) certain changes in control of a Guarantor. Interest expense related to the Treximet Secured Notes was $23.3 million and $25.9 million, for the years ended December 31, 2016 and 2015, respectively. Accrued interest on the Treximet Secured Notes was approximately $9.5 million and $10.5 million as of December 31, 2016 and 2015, respectively. The Company recorded debt issuance costs of $7.8 million, which are being amortized using the effective interest method. As of December 31, 2016, $1.3 million and $3.4 million are recorded on the consolidated balance sheet in Treximet Secured Notes - current and Treximet Secured Notes long-term, respectively. As of December 31, 2015, $1.3 million and $4.7 million are recorded on the consolidated balance sheet in Treximet Secured Notes - current and Treximet Secured Notes long-term, respectively. On April 13, 2015, the Company furnished to the holders of the Treximet Secured Notes a Consent Solicitation Statement (the Consent Solicitation). The Consent Solicitation sought the consent of the holders of a majority of the principal amount of the Treximet Secured Notes to amend the August 2014 Indenture, that governs the Treximet Secured Notes to allow the Company to, among other things, incur up to $42.2 million of additional debt (the Indenture Amendments) in exchange for a consent fee in cash equal to 1% of the principal amount of consenting Treximet Secured Notes (the Consent Fees). Through April 28, 2015, the Company received consent to the Indenture Amendments from holders representing approximately 98% of the principal amount of the Notes, and subsequently paid the holders approximately $2.2 million during the year ended December 31, 2015. The cost of inducement of $403,000 and $1.1 million is recorded in Treximet Secured Notes - current and Treximet Secured Notes - long term on the consolidated balance sheet at December 31, 2016, respectively and $403,000 and $1.5 million is recorded in Treximet Secured Notes - current and Treximet Secured Notes - long term on the consolidated balance sheet at December 31, 2015, respectively and are being amortized using the straight-line method, which approximates the effective interest method.

15. Concentrations (Details)

15. Concentrations (Details)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Company's customers that individually comprised greater than 10% of total gross product sales
Percentage of gross product sales	93.00%	93.00%
McKesson Corporation
Company's customers that individually comprised greater than 10% of total gross product sales
Percentage of gross product sales	36.00%	38.00%
Amerisource Bergen Drug Corporation
Company's customers that individually comprised greater than 10% of total gross product sales
Percentage of gross product sales	31.00%	27.00%
Cardinal Health Inc
Company's customers that individually comprised greater than 10% of total gross product sales
Percentage of gross product sales	26.00%	28.00%

15. Concentrations (Details 1)

15. Concentrations (Details 1)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Accounts Receivable
McKesson Corporation	36.00%	34.00%
AmerisourceBergen Drug Corporation	28.00%	30.00%
Cardinal Health, Inc.	28.00%	28.00%
Total	92.00%	92.00%

16. Other Revenue Sharing Arr75

16. Other Revenue Sharing Arrangements (Details Narrative) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Other Revenue Sharing Arrangements Details Narrative
Co-promotion expenses	$ 18.2	$ 25.4
Co-promotion, royalty and other revenues	$ 0.5	$ 4.6

17. Stock Benefit Plans and S76

17. Stock Benefit Plans and Stock-Based Compensation Assumptions (Details) - $ / shares	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Weighted average of the assumptions used to value stock options on the date of grant
Weighted average expected stock price volatility	77.90%	72.30%
Estimated dividend yield	0.00%	0.00%
Risk-free interest rate	1.40%	1.70%
Expected life of option (in years)	6 years 36 days	6 years 108 days
Weighted average grant date fair value per option	$ 7.63	$ 42.30

17. Stock Benefit Plans and S77

17. Stock Benefit Plans and Stock-Based Compensation Option Activity (Details 1) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016USD ($)$ / sharesshares
Shares
Options outstanding at December 31, 2015 | shares	703
Granted | shares	632
Exercised | shares	0
Cancelled | shares	(685)
Expired | shares	0
Options outstanding at December 31, 2016 | shares	650
Options vested and expected to vest as of December 31, 2016 | shares	491
Options vested and exercisable as of December 31, 2016 | shares	79
Average Exercise Price
Options outstanding at December 31, 2015 | $ / shares	$ 55.42
Granted | $ / shares	11.73
Exercised | $ / shares	0
Cancelled | $ / shares	43.15
Expired | $ / shares	0
Options outstanding at December 31, 2016 | $ / shares	25.85
Options vested and expected to vest, end of period | $ / shares	30.80
Options vested and exercisable, end of period | $ / shares	$ 70.34
Weighted Average Remaining Contractual Life Years
Options outstanding at December 31, 2016	9 years
Options vested and expected to vest, end of period	8 years 324 days
Options vested and exercisable, end of period	6 years 324 days
Aggregate Intrinsic Value
Exercised | $	$ 0
Options outstanding at December 31, 2016 | $	0
Options vested and expected to vest as of December 31, 2016 | $	0
Options vested and exercisable as of December 31, 2016 | $	$ 0

17. Stock Benefit Plans and S78

17. Stock Benefit Plans and Stock-Based Compensation Restricted Stock (Details 2) - Restricted shares $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2016USD ($)$ / sharesshares
Non-vested restricted stock outstanding at December 31, 2015 | shares	6
Granted | shares	197
Vested | shares	(6)
Forfeited | shares	0
Non-vested restricted stock outstanding at December 31, 2016 | shares	197
Weighted Average Grant Date Fair Value | $ / shares	$ 30
Granted | $ / shares	3.36
Vested | $ / shares	30
Forfeited | $ / shares	0
Weighted Average Grant Date Fair Value | $ / shares	$ 3.36
Aggregate Intrinsic Value, Vested | $	$ 63

18. Income Taxes (Details 1)

18. Income Taxes (Details 1) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Current:
Federal	$ 455	$ 6,923
State	356	508
Foreign	(172)	207
Total current provision (benefit)	639	7,638
Deferred Provision
Federal	(189)	(1,329)
State	(11)	(551)
Foreign	0	1,304
Total deferred provision (benefit)	(200)	(576)
Total	$ 439	$ 7,062

18. Income Taxes (Details 2)

18. Income Taxes (Details 2) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2015
Deferred tax assets:
Accruals and other reserves	$ 36,052	$ 24,205
Intangibles	4,414	0
Inventory	1,157	985
Stock awards	4,532	3,757
Net operating loss carryovers	33,241	8,038
Gross deferred tax assets	79,396	36,985
Valuation allowance	(79,373)	(31,453)
Net deferred tax asset	23	5,532
Deferred tax liabilities:
Fixed assets	(23)	(1,021)
Intangibles	0	(4,713)
Gross deferred tax liability	(23)	(5,734)
Net deferred tax asset/(liability)	0	(202)
Included in consolidated balance sheet:
Deferred income tax assets/(liabilities) - current	0	0
Deferred income tax assets/(liabilities) - long-term	0	(202)
Net deferred tax asset/(liability)	$ 0	$ (202)

18. Income Taxes (Details 3)

18. Income Taxes (Details 3)	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Effective income tax rate from continuing operations
Expected taxes at statutory rates	35.00%	35.00%
State taxes, net of federal tax benefit	(0.10%)	0.00%
Foreign income tax rate differential	(10.00%)	(13.60%)
Amortization and impairment of goodwill	(8.70%)	(2.00%)
Mark to market adjustment	4.30%	0.00%
Deductible inducement payment	3.30%	2.00%
Change in valuation allowance	(25.20%)	(21.70%)
Change in liability for uncertain tax positions	0.00%	(4.80%)
Permanent differences and other	1.10%	0.10%
Total	(0.30%)	(5.00%)

18. Income Taxes (Unrecognized

18. Income Taxes (Unrecognized Tax Benefits) (Details 4) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Income Taxes Unrecognized Tax Benefits Details 4
Balance at beginning of year	$ 7,410	$ 0
Tax positions taken in prior periods	0	0
Tax positions taken in current year	0	7,410
Accrual of interest related to tax positions taken	0	0
Settlements	0	0
Foreign currency translation	0	0
Balance at end of year	$ 7,410	$ 7,410

18. Income Taxes (Details Narra

18. Income Taxes (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Federal net operating loss carryforwards	$ 62,100
Federal net operating loss carryforwards expiration date	Dec. 31, 2035
Operating Loss Carryforwards, Limitations on Use	The Company has federal NOL's of approximately $62.1 million at December 31, 2016 ranging in expiration from 2035 to 2036. Included in the $62.1 million are $798,000 of NOLs which have not been recognized for financial reporting purposes due to unrecognized tax benefits and excess tax benefits related to stock-based compensation. Excess tax benefits related to option exercises cannot be recognized until realized through a reduction of current taxes payable.
Tax interest and penalties	$ 0	$ 0
Tax years open for examination	2,014
Somaxon [Member]
Federal net operating loss carryforwards	$ 250,200
Research Tax Credit Carryforwards	$ 4,500
Somaxon [Member] | Minimum [Member]
Federal net operating loss carryforwards expiration date	Dec. 31, 2023
Operating Loss Carryforwards, Limitations on Use	However, based on the change in ownership provision of IRC Section 382, $22.4 million of those NOL are expected to be available for utilization.
Research Tax Credit Carryforward, Limitations on Use	However, based on the change in ownership provision of IRC Section 382, approximately $263,000 of those credits are expected to be available for utilization.
Somaxon [Member] | Maximum [Member]
Federal net operating loss carryforwards expiration date	Dec. 31, 2033
GTA GP, Inc [Member]
Federal net operating loss carryforwards	$ 85,300
GTA GP, Inc [Member] | Minimum [Member]
Federal net operating loss carryforwards expiration date	Dec. 31, 2021
Operating Loss Carryforwards, Limitations on Use	However, based on the change in ownership provisions of IRC Section 382, approximately $519,000 of those NOL are expected to be available for utilization.
GTA GP, Inc [Member] | Maximum [Member]
Federal net operating loss carryforwards expiration date	Dec. 31, 2029

19. Commitments and Contingen84

19. Commitments and Contingencies (Details 1) $ in Thousands	Dec. 31, 2016USD ($)
Commitments and Contingencies Disclosure [Abstract]
2,017	$ 617
2,018	628
2,019	640
2,020	518
2,021	524
Thereafter	309
Total	$ 3,236

19. Commitments and Contingen85

19. Commitments and Contingencies (Details 2) $ in Thousands	Dec. 31, 2016USD ($)
Commitments And Contingencies Details 2
2,017	$ 118
2,018	121
2,019	125
2,020	0
2,021	0
Thereafter	0
Total	$ 364

19. Commitments and Contingen86

19. Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Commitments and Contingencies Disclosure [Abstract]
Rent Expense	$ 760	$ 653
Sublease income	115	$ 19
Other commitments obligation	$ 1,300

20. Restructuring Plans (Detail

20. Restructuring Plans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Accrued restructuring costs	$ 618	$ 104	$ 0
Restructuring charges	2,287	1,137
Restructuring cash	(17,733)	(380)
Restructuring noncash	0	(653)
2016 Restructing Costs
Accrued restructuring costs	618	0
Restructuring charges	2,287
Restructuring cash	(1,669)
Restructuring noncash	$ 0
Restructuring and Related Activities, Description	On July 7, 2016, the Company announced a restructuring of its sales force and operations. The reorganization plan included (1) a reduction of 54 sales positions, primarily from the Company's Neurology sales team; (2) prioritization and reorganization of sales territories to reduce the inefficient time that sales representatives spent driving long distances between customers; (3) improvement of the Company's compensation plan to incentivize the field sales staff to increase the frequency of calls on the focused targets; and (4) consolidation of the Neurology and Pain sales forces under one sales management structure to eliminate redundancies. In addition, as part of this initiative, the Company reduced its administrative staff by six employees. The Company incurred $2.3 million during the year ended December 31, 2016 in severance and other related cash expenses. The charge during the year ended December 31, 2016 was comprised of $1.3 million in severance related cash expenses, and $1.0 million in other cash related expenses. Associated severance and other related payments are expected to be paid by December 31, 2017.
2015 Restructing Costs
Accrued restructuring costs	$ 0	104	$ 0
Restructuring charges	0	1,137
Restructuring cash	(104)	(380)
Restructuring noncash	$ 0	$ (653)
Restructuring and Related Activities, Description	On March 16, 2015, the Company decided to institute an initiative to restructure operations and shut down the Charleston, South Carolina site. This step was done to consolidate operations within the Company's headquarters located in Morristown, New Jersey. During the year ended December 31, 2015, the Company incurred a charge of $1.1 million related to the restructuring. The charge during the year ended December 31, 2015 was comprised of $485,000 in severance related cash expenses, and $653,000 for the modification and accelerated vesting of options and awards under existing employee agreements. Associated severance payments were paid by May 31, 2016.

21. Supplemental Cash Flow In88

21. Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Supplemental disclosures of Cash Flow Information:
Cash received for income taxes, net	$ (4,780)	$ (352)
Cash paid for interest	30,165	30,207
Supplemental disclosures of Non-cash Investing and Financing Activities:
Reclassification of treasury stock	5,571	0
Conversion of 8.00% Convertible notes	0	60,172
Issuance of 168,209 shares to Zogenix for Zohydro acquisition	$ 0	$ 11,926

22. Quarterly Financial Data 89

22. Quarterly Financial Data (Unaudited)(Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2016	Dec. 31, 2015
Quarterly Financial Data Unauditeddetails
Net revenues	$ 30,173	$ 41,468	$ 36,746	$ 32,469	$ 46,369	$ 48,615	$ 46,977	$ 33,889	$ 140,856	$ 175,850
Operating loss	(76,817)	(17,402)	(22,300)	(23,809)	(50,834)	(16,153)	(15,362)	(18,905)	(140,328)	(101,254)
Net loss	$ (86,077)	$ (26,438)	$ (31,139)	$ (25,936)	$ (81,666)	$ (10,740)	$ (32,235)	$ (23,674)	$ (169,590)	$ (148,315)
Basic loss per common share	$ (8.92)	$ (2.99)	$ (4.67)	$ (4.24)	$ (13.37)	$ (1.76)	$ (6.15)	$ (6.16)	$ (21.67)	$ (27.81)
Diluted loss per common and potential common share	$ (8.92)	$ (2.99)	$ (4.67)	$ (4.24)	$ (13.37)	$ (1.76)	$ (6.15)	$ (6.16)	$ (21.67)	$ (27.81)

Valuation and Qualifying Acco90

Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2016	Dec. 31, 2015
Allowance for doubtful accounts
Balance at beginning of period	$ 15	$ 228
Additions charged to costs and expenses	618	0
Deductions	(133)	(213)
Balance at end of period	500	15
Allowance for prompt pay discounts
Balance at beginning of period	1,844	893
Additions charged to costs and expenses	6,718	6,949
Deductions	(7,524)	(5,998)
Balance at end of period	1,038	1,844
Inventory obsolescence allowance
Balance at beginning of period	2,448	2,220
Additions charged to costs and expenses	2,184	960
Deductions	(2,649)	(732)
Balance at end of period	$ 1,983	$ 2,448