Supernus Pharmaceuticals (SUPN) 10-Q/A 20 Jan 17 2015 Q3 Quarterly report (amended) Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Jan. 17, 2017
Document and Entity Information
Entity Registrant Name	SUPERNUS PHARMACEUTICALS INC
Entity Central Index Key	1,356,576
Document Type	10-Q/A
Document Period End Date	Sep. 30, 2015
Amendment Flag	true
Amendment Description	Unless the context requires otherwise, the words "Supernus," "we," "our," and "the Company" refer to Supernus Pharmaceuticals, Inc. and its subsidiaries. Supernus Pharmaceuticals, Inc. (the Company) is filing this Amendment No. 1 on Form 10-Q/A (the Amended Form 10-Q) to its Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2015 (the Original Form 10-Q), which was originally filed with the U.S. Securities and Exchange Commission (SEC) on November 9, 2015 (the Original Filing Date), to reflect the restatement of consolidated financial statements (Restatement) as described below. In this Amended Form 10-Q for the fiscal quarter ended September 30, 2015, we are restating our previously issued and unaudited consolidated financial statements and the related disclosures for the three and nine month periods ended September 30, 2015 and 2014. As discussed in further detail below and in Note 2 to the accompanying consolidated financial statements, the Restatement is the result of a misapplication in the guidance on accounting for revenue recognition related to the sale of future revenues (as described below). We assessed the impact of this misapplication on our prior interim and annual consolidated financial statements and concluded that the impact was material to these consolidated financial statements. Consequently, we have restated the prior period consolidated financial statements identified above. All amounts in this Amended Form 10-Q affected by the Restatement reflect such amounts as restated. For a more detailed explanation of these matters and resulting restatements, please see Part I, Item 1: Financial Statements – Note 2 to the Consolidated Financial Statements; Part I, Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations – Restatement of Previously Issued Consolidated Financial Statements; and Part I, Item 4: Controls and Procedures. For the convenience of the reader, this Amended Form 10-Q sets forth the Original Form 10-Q for the three month and nine month period ended September 30, 2015 in its entirety, as amended by and to reflect the Restatement and includes certain restated information for the three month and nine month periods ended September 30, 2014.
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		50,121,242
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

Consolidated Balance Sheets

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Current assets:
Cash and cash equivalents	$ 25,641	$ 36,396	$ 37,780
Marketable securities	32,061	37,940	34,783
Accounts receivable, net	23,603	17,270	15,303
Inventories, net	14,742	13,441	11,145
Prepaid expenses and other current assets	6,468	3,679	3,791
Total current assets	102,515	108,726	102,802
Long term marketable securities	43,967	19,816	15,763
Property and equipment, net	3,210	2,448	2,500
Intangible assets, net	16,627	5,434	4,135
Other non-current assets	322	360	360
Total assets	166,641	136,784	125,560
Current liabilities:
Accounts payable	2,812	1,863	1,573
Accrued sales deductions	18,820	8,461	7,298
Accrued expenses	21,654	17,656	13,112
Non-recourse liability related to sale of future royalties- current portion	261
Deferred licensing revenue	143	143	143
Total current liabilities	43,690	28,123	22,126
Deferred licensing revenue, net of current portion	1,167	1,274	1,310
Convertible notes, net of discount	7,939	26,223	25,732
Non-recourse liability related to sale of future royalties-long term	30,287	30,025	30,127
Other non-current liabilities	3,815	3,876	3,015
Derivative liabilities	1,156	6,564	7,258
Total liabilities	88,054	96,085	89,568
Stockholders' equity:
Common stock, $0.001 par value, 130,000,000 shares authorized at September 30, 2015, December 31, 2014 and September 30, 2014; 48,686,657, 42,974,463 and 42,929,826 shares issued and outstanding at September 30, 2015, December 31, 2014 and September 30, 2014, respectively	49	43	43
Additional paid-in capital	261,006	230,263	229,225
Accumulated other comprehensive loss	(107)	(154)	(35)
Accumulated deficit	(182,361)	(189,453)	(193,241)
Total stockholders' equity	78,587	40,699	35,992
Total liabilities and stockholders' equity	$ 166,641	$ 136,784	$ 125,560

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Consolidated Balance Sheets
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Common stock, shares authorized	130,000,000	130,000,000	130,000,000
Common stock, shares issued	48,686,657	42,974,463	42,929,826
Common stock, shares outstanding	48,686,657	42,974,463	42,929,826

Consolidated Statements of Oper

Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Revenue
Net product sales	$ 38,551	$ 22,452	$ 100,914	$ 59,056
Royalty revenue	776	199	2,007	199
Licensing revenue	35	36	857	2,188
Total revenue	39,362	22,687	103,778	61,443
Costs and expenses
Cost of product sales	2,248	1,321	5,628	3,476
Research and development	9,129	4,657	19,690	13,816
Selling, general and administrative	22,900	17,445	65,496	54,554
Total costs and expenses	34,277	23,423	90,814	71,846
Operating income (loss)	5,085	(736)	12,964	(10,403)
Other income (expense)
Interest income	169	78	419	265
Interest expense	(292)	(1,289)	(1,004)	(3,774)
Interest expense - non-recourse liability related to sale of future royalties	(998)	(326)	(2,530)	(326)
Changes in fair value of derivative liabilities	114	760	66	2,115
Loss on extinguishment of debt	(25)	(860)	(2,400)	(2,592)
Other income	5	2	30	2
Total other expense	(1,027)	(1,635)	(5,419)	(4,310)
Earnings (loss) before income taxes	4,058	(2,371)	7,545	(14,713)
Income tax expense	142		453
Net income (loss)	$ 3,916	$ (2,371)	$ 7,092	$ (14,713)
Income (loss) per common share:
Basic	$ 0.08	$ (0.06)	$ 0.15	$ (0.35)
Diluted	$ 0.08	$ (0.06)	$ 0.15	$ (0.35)
Weighted-average number of common shares outstanding:
Basic (in shares)	48,515,071	42,900,269	47,011,243	42,035,025
Diluted (in shares)	51,590,797	42,900,269	51,059,466	42,035,025

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Consolidated Statements of Comprehensive Income
Net income (loss)	$ 3,916	$ (2,371)	$ 7,092	$ (14,713)
Other comprehensive (loss) income:
Unrealized net gain (loss) on marketable securities	44	(36)	47	(35)
Other comprehensive income (loss):	44	(36)	47	(35)
Comprehensive income (loss)	$ 3,960	$ (2,407)	$ 7,139	$ (14,748)

Consolidated Statements of Cash

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities
Net income (loss)	$ 7,092	$ (14,713)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss on extinguishment of debt	2,400	2,592
Change in fair value of derivative liability	(66)	(2,115)
Unrealized gain (loss) on marketable securities	47	(35)
Non-cash interest expense/income on liability related to sale of future royalties	2,530	326
Non-cash royalty revenue	(2,007)	(199)
Depreciation and amortization	651	701
Amortization of deferred financing costs and debt discount	646	1,599
Share-based compensation expense	3,011	2,125
Changes in operating assets and liabilities:
Accounts receivable	(6,334)	(10,249)
Inventories	(1,301)	(3,993)
Prepaid expenses and other assets	(2,793)	(1,256)
Accounts payable	949	(1,584)
Accounts sales deductions	10,359	4,354
Accrued expenses	(459)	(598)
Deferred product revenue, net		(7,882)
Deferred licensing revenue	(107)	(168)
Other non-current liabilities	(21)	337
Net cash provided by (used in) operating activities	14,597	(30,758)
Cash flows from investing activities
Purchases of marketable securities	(51,942)	(34,566)
Sales and maturities of marketable securities	33,671	41,987
Purchases of property and equipment	(1,240)	(475)
Deferred legal fees	(6,908)	(1,652)
Net cash (used in) provided by investing activities	(26,419)	5,294
Cash flows from financing activities
Proceeds from issuance of common stock	1,067	265
Cash settlement of debt to equity conversion		(1)
Proceeds from sale of future royalties		30,000
Net cash provided by financing activities	1,067	30,264
Net change in cash and cash equivalents	(10,755)	4,800
Cash and cash equivalents at beginning of period	36,396	32,980
Cash and cash equivalents at end of period	25,641	37,780
Supplemental cash flow information:
Cash paid for interest	504	1,502
Noncash financial activity:
Conversion of convertible notes and interest make-whole	26,019	14,887
Exercise of warrants	652
Deferred legal fees included in accrued expenses	$ 6,866	$ 1,497

Organization and Business

Organization and Business	9 Months Ended
	Sep. 30, 2015
Organization and Business
Organization and Business	1. Organization and Business Supernus Pharmaceuticals, Inc. (the Company) is a specialty pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases, including neurological and psychiatric disorders. The Company markets two epilepsy products, Oxtellar XR and Trokendi XR, and has several proprietary product candidates in clinical development that address the psychiatry market. The Company commenced the commercialization of Oxtellar XR and Trokendi XR in 2013.

Restatement of Financial Statem

Restatement of Financial Statements	9 Months Ended
	Sep. 30, 2015
Restatement of Financial Statements
Restatement of Financial Statements	2. Restatement of Financial Statements In July 2014, the Company entered into a royalty monetization transaction and recorded the transaction as revenue. In October 2016, the Company submitted to the U.S. Securities and Exchange Commission’s (the SEC) Office of the Chief Accountant (the OCA) a request for post-accounting review of the royalty monetization transaction. On November 9, 2016, the OCA completed its review and informed the Company that the royalty monetization transaction should have been recorded as a debt obligation in 2014. As a result, on November 10, 2016, the Company’s Audit Committee concluded that the Company’s financial statements for the years ended December 31, 2014 and December 31, 2015, and the interim quarterly reports in those years beginning with the third quarter of 2014, and the interim quarterly reports for the first and second quarters in 2016 and related reports of the Company’s independent registered public accounting firms thereon, should no longer be relied upon and will be restated. The Company is restating in this Quarterly Report its financial statements for the three and nine month periods ended September 30, 2015 and September 30, 2014. This restatement results in noncash, financial statement corrections and will have no impact on the Company’s current or previously reported cash and marketable securities position or net product sales . The Company has also made corrections to reflect (i) the recording during the fourth quarter of 2014 of a current tax expense related to an increase in our reserve for an uncertain tax position related to alternative minimum taxes that had been previously recognized in the second quarter of 2015 and (ii) an increase in Selling, General and Administrative Expense in 2014 which is fully offset by a corresponding decrease in Selling, General and Administrative Expense in 2015. This adjustment is the result of the recognition of stock compensation expense over a period of twelve months as opposed to four years related to certain option grants granted in January 2014. Additionally, during the first quarter of 2015, the Company purchased a Certificate of Deposit (CD) that has been continually renewed on a quarterly basis. This CD has 91 days to maturity and the Company incorrectly classified this amount as cash and cash equivalents on the balance sheets at March 31, 2015, June 30, 2015, September 30, 2015 and December 31, 2015. We have corrected the balance sheets in all periods to reflect the reclassification from cash and cash equivalents to current marketable securities. An adjustment was made to the Statement of Cash Flows for the nine month periods ended September 30, 2015 and 2014 to change cash used in investing activities, with an offset to cash provided by operations for certain accrued legal fees that have been deferred. The impact of the restatement and other corrections on the condensed Consolidated Balance Sheet, Consolidated Statement of Operations and Consolidated Statement of Cash Flows as of and for the three and nine month periods ended September 30, 2015 and September 30, 2014 is presented below, in thousands except share and per share data. Three Months Ended September 30, 2015 As Previously Restatement Other Consolidated Statement of Operations (unaudited) Reported Adjustments Corrections As Restated Royalty revenue $ — $ $ $ Total revenue Operating income Interest expense — non-recourse liability related to sale of future royalties — ) ) Total other expense ) ) ) Earnings before income taxes ) Income tax expense Net income ) ) Income per common share: Basic ) Nine Months Ended September 30, 2015 As Previously Restatement Other Consolidated Statement of Operations (unaudited) Reported Adjustments Corrections As Restated Royalty revenue $ — $ $ $ Total revenue Selling, general and administrative ) Total costs and expenses ) Operating income Interest expense — non-recourse liability related to sale of future royalties — ) ) Total other expense ) ) ) Earnings before income taxes ) Income tax expense ) Net income ) Nine Months Ended September 30, 2015 As Previously Restatement Other Consolidated Statements of Cash Flows (unaudited) Reported Adjustments Corrections As Restated Net cash provided by operating activities $ $ $ Net cash used in investing activities ) ) ) Net change in cash and cash equivalents ) ) ) As of September 30, 2015 As Previously Restatement Other Consolidated Balance Sheet (unaudited) Reported Adjustments Corrections As Restated Cash and cash equivalents $ $ ) $ Marketable securities Accrued expenses Non-recourse liability related to sale of future royalties — current portion — Total current liabilities Non-recourse liability related to sale of future royalties — long term — Total liabilities Accumulated deficit ) ) ) ) Total stockholders’ equity ) ) As of December 31, 2014 As Previously Restatement Other Consolidated Balance Sheet Reported Adjustments Corrections As Restated Accrued expenses Total current liabilities Non-recourse liability related to sale of future royalties — long term — Total liabilities Additional paid-in capital Accumulated deficit ) ) ) ) Total stockholders’ equity ) ) Three Months Ended September 30, 2014 As Previously Restatement Other Consolidated Statement of Operations (unaudited) Reported Adjustments Corrections As Restated Royalty revenue $ — $ $ $ Revenue from royalty agreement ) — Total revenue ) Selling, general and administrative Total costs and expenses Operating income (loss) ) ) ) Interest expense — non-recourse liability related to sale of future royalties — ) ) Total other expense ) ) ) Earnings before income taxes ) ) ) Net Income (loss) ) ) ) Income (loss) per common share: Basic ) ) Income (loss) per common share: Diluted ) ) Weighted average number of common shares - Diluted ) Nine Months Ended September 30, 2014 As Previously Restatement Other Consolidated Statement of Operations (unaudited) Reported Adjustments Corrections As Restated Royalty revenue $ — $ $ $ Revenue from royalty agreement ) — Total revenue ) Selling, general and administrative Total costs and expenses Operating Income (loss) ) ) ) Interest expense — non-recourse liability related to sale of future royalties — ) ) Total other expense ) ) ) Earnings before income taxes ) ) ) Net income (loss) ) ) ) Income (loss) per common share: Basic ) ) Income (loss) per common share: Diluted ) ) Weighted average number of common shares - Diluted ) Nine Months Ended September 30, 2014 As Previously Restatement Other Consolidated Statements of Cash Flows (unaudited) Reported Adjustments Corrections As Restated Net cash provided by (used in) operating activities $ ) $ ) $ ) Net cash provided by investing activities Net cash provided by financing activities As of September 30, 2014 As Previously Restatement Other Consolidated Balance Sheet (unaudited) Reported Adjustments Corrections As Restated Non-recourse liability related to sale of future royalties — long term — Total liabilities ) Additional paid-in capital Accumulated deficit ) ) ) ) Total stockholders’ equity )

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
Summary of Significant Accounting Policies
Summary of Significant Accounting Policies	3. Summary of Significant Accounting Policies Basis of Presentation The Company’s unaudited consolidated financial statements include the accounts of Supernus Pharmaceuticals, Inc. and Supernus Europe Ltd. These are collectively referred to herein as “Supernus” or “the Company.” All significant intercompany transactions and balances have been eliminated in consolidation. The Company’s unaudited consolidated financial statements have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (SEC) for interim financial information. As permitted under Generally Accepted Accounting Principles in the United States (U.S. GAAP), certain notes and other information have been omitted from the interim unaudited consolidated financial statements presented in this Quarterly Report on Form 10-Q/A. Therefore, these financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2015 filed with the SEC. In the opinion of management, the consolidated financial statements reflect all adjustments necessary to fairly present the Company’s financial position, results of operations, and cash flows for the periods presented. These adjustments are of a normal recurring nature. The Company currently operates in one business segment. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the Company’s future financial results. Marketable Securities Marketable securities consist of investments in U.S. Treasuries, various U.S. governmental agency debt securities, corporate bonds and other fixed income securities. The Company’s investments are classified as available for sale. Such securities are carried at estimated fair value, with any unrealized holding gains or losses reported, net of any tax effects reported, as accumulated other comprehensive income, which is a separate component of stockholders’ equity. Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are included in consolidated results of operations. A decline in the market value of any available for sale security below cost that is deemed to be other-than-temporary results in a reduction in fair value, which is charged to earnings in that period, and a new cost basis for the security is established. Dividend and interest income is recognized when earned. The cost of securities sold is calculated using the specific identification method. The Company places all investments with highly rated government or private sector or industrial financial institutions whose debt is rated as investment grade. The Company classifies all available-for-sale marketable securities with maturities greater than one year from the balance sheet date as non-current assets. The Company established the Supernus Supplemental Executive Retirement Plan (SERP) for the sole purpose of receiving funds for executives from a previous SERP and providing a continuing deferral program under the Supernus SERP. As of September 30, 2015, the fair value of the SERP was $267,000 and was held in cash securities. As of December 30, 2014, the estimated fair value of the mutual fund investment securities within the SERP was approximately $305,000. The fair value of these assets is included within other non-current assets on the consolidated balance sheets. A corresponding noncurrent liability is also included in the consolidated balance sheets to reflect the Company’s obligation for the SERP. The Company has not made, and has no plans to make, contributions to the SERP. The securities are restricted in nature and can only be used for purposes of paying benefits under the SERP. Accounts Receivable, net Accounts receivable are reported on the consolidated balance sheets at outstanding amounts, less an allowance for doubtful accounts and discounts. The Company extends credit without requiring collateral. The Company writes off uncollectible receivables when the likelihood of collection is remote. The Company evaluates the collectability of accounts receivable on a regular basis. An allowance, when needed, is based upon various factors including the financial condition and payment history of customers, an overall review of collections experience on other accounts, and economic factors or events expected to affect future collections experience. No accounts have been written off in 2015 and 2014. The Company recorded an allowance of approximately $4.7 million and $4.1 million for estimated sales discounts as of September 30, 2015 and December 31, 2014, respectively. Revenue Recognition Revenue from product sales is recognized when persuasive evidence of an arrangement exists; delivery has occurred and title to the product and associated risk of loss has passed to the customer; the price is fixed or determinable; collection from the customer has been reasonably assured; all performance obligations have been met; and returns and allowances can be reasonably estimated. Product sales are recorded net of estimated rebates, chargebacks, discounts, co-pay assistance and other deductions as well as estimated product returns (collectively, “sales deductions”). Our products are distributed through wholesalers and pharmaceutical distributors. Each of these wholesalers and distributors will take title and ownership to the product upon physical receipt of the product and then distribute our products to pharmacies. For the three and nine months ended September 30, 2015, the revenue for Oxtellar XR and Trokendi XR was recognized contemporaneously upon shipment of finished products to wholesalers, net of allowances for estimated sales deductions and returns. Beginning in the second quarter of 2014, the Company began recognizing revenue for Trokendi XR, net of estimated sales deductions, at the time of shipments to wholesalers. Prior to this change in accounting estimate, the Company recognized revenue for Trokendi XR once delivery had occurred and all sales deductions were known or reasonably estimated. The effect of this change was to increase net product sales by $7.9 million, which represents the impact of the deferred product revenue at December 31, 2013, and cost of product sales by $0.5 million for the nine months ended September 30, 2014. During the three and nine months ended September 30, 2015, the Company recorded a $2.9 million reduction to net revenue related to a change in estimate associated with its accrued sales deductions of $18.8 million at September 30, 2015. The change in estimate reflects returns experience associated with our initial launch shipments, which have now passed their expiry dating. Royalty Revenue In the third quarter of 2014, the Company received a $30.0 million payment pursuant to a royalty agreement related to the purchase by HC Royalty of certain of the Company’s rights under the agreement with United Therapeutics Corporation related to the commercialization of Orenitram. We have recorded a non-recourse liability related to this transaction and have begun to amortize this amount to recognize royalty revenue as royalties are received by HC Royalty from United Therapeutics. We also recognize non-cash interest expense related to this liability that accrues at an effective interest rate determined based on projections of HC Royalty’s rate of return. We recognized royalty revenue of $2.0 million and $0.2 million for the nine months ended September 30, 2015 and 2014, respectively. We recognized interest expense of $2.5 million and $0.3 million for the nine months ended September 30, 2015 and 2014, respectively. Sales Deductions Allowances for estimated sales deductions are provided for the following: · Rebates. Rebates include mandated discounts under the Medicaid Drug Rebate Program, the Medicare coverage gap program, as well as negotiated discounts with commercial health-care providers. Rebates are amounts owed after the final dispensing of products to a benefit plan participant and are based upon contractual agreements or legal requirements with the public sector (e.g. Medicaid) and with private sector benefit providers. The allowance for rebates is based on statutory and contractual discount rates and expected claimed rebates paid based on a plan provider’s utilization. Rebates are generally invoiced and paid quarterly in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarters’ unpaid rebates. If actual future rebates vary from estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. · Chargebacks. Chargebacks are discounts that occur when contracted customers purchase directly from an intermediary distributor or wholesaler. Contracted customers, which currently consist primarily of Public Health Service institutions and Federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The distributor or wholesaler, in turn, charges back the difference between the price initially paid by the distributor or wholesaler and the discounted price paid to the distributor or wholesaler by the customer. The allowance for distributor/wholesaler chargebacks is based on known sales to contracted customers. · Distributor/Wholesaler deductions and discounts. U.S. specialty distributors and wholesalers are offered various forms of consideration including allowances, service fees and prompt payment discounts as consideration for distributing our products. Distributor allowances and service fees arise from contractual agreements with distributors and are generally a percentage of the purchase price paid by the distributors and wholesalers. Wholesale customers are offered a prompt pay discount for payment within a specified period. · Co-pay assistance. Patients who pay in cash or have commercial insurance and meet certain eligibility requirements may receive co-pay assistance from the Company. The intent of this program is to reduce the patient’s out of pocket costs. Liabilities for co-pay assistance are based on actual program participation and estimates of program redemption using data provided by third-party administrators. · Returns. Sales of our products are not subject to a general right of return; however, the Company will accept product that is damaged or defective when shipped directly from our warehouse and expired product six months prior and up to 12 months subsequent to its expiry date. Product that has been used to fill patient prescriptions is no longer subject to any right of return. Milestone Payments Milestone payments on licensing agreements are recognized as revenue when the collaborative partner acknowledges completion of the milestone and substantive effort was necessary to achieve the milestone. Management may recognize revenue contingent upon the achievement of a milestone in its entirety in the period in which the milestone is achieved only if the milestone meets all the criteria to be considered substantive. The Company recorded zero and $750,000 of milestone revenue during the three and nine months ended September 30, 2015, respectively, and zero and $2.0 million of milestone revenue during the three and nine months ended September 30, 2014, respectively. Cost of Product Sales The cost of product sales consists primarily of materials, third-party manufacturing costs, freight and distribution costs, allocation of labor, quality control and assurance, and other manufacturing overhead costs. Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Valuation allowances are established to reduce deferred tax assets to the amounts expected to be realized. The Company accounts for uncertain tax positions in its consolidated financial statements when it is more-likely-than-not that the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company’s policy is to recognize any interest and penalties related to income taxes in income tax expense. Recently Issued Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” This ASU provides guidance about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the software license element of the arrangement is consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, then it should account for the arrangement as a service contract. The amendments in this ASU are effective for financial statements issued for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. The Company has elected to adopt the amendment early. The adoption of this standard had no impact on the Company’s financial results. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): “Simplifying the Measurement of Inventory.” Under this new guidance, entities that measure inventory using any method other than last-in, first-out or the retail inventory method will be required to measure inventory at the lower of cost and net realizable value. The amendments in this ASU, which should be applied prospectively, are effective for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of ASU No. 2015-11 on our consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” This ASU more closely aligns the treatment of debt issuance costs with debt discounts and premiums and requires debt issuance costs be presented as a direct deduction from the carrying amount of the related debt. The amendments in this ASU are effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. This guidance has been applied on a retrospective basis and the impact is reflected in the as previously reported column in Note 2. The adoption of ASU 2015-03 resulted in a reclassification of deferred financing costs of $765,000, $724,000 and $129,000 from asset to liability classification on the Company’s consolidated financial statements as of September 30, 2014, December 31, 2014 and September 2015, respectively. In August 2014, the FASB issued ASU No. 2014-15 “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern”. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We do not believe the adoption of the new standard will have a significant impact on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current GAAP and replace it with a principles-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016. The FASB has voted to approve a one-year deferral, changing the effective date to annual reporting periods beginning after December 15, 2017, with early adoption being permitted for periods ending after December 15, 2016. Earlier adoption is not permitted. Entities can transition to the standard either retrospectively or as a cumulative effect adjustment as of the date of adoption. Presently, the Company is assessing what effect the adoption of ASU 2014-09 will have on our consolidated financial statements and accompanying notes. The Company has evaluated all other ASUs issued through the date the consolidated financials were issued and believes that no other ASU will have a material impact on the Company’s consolidated financial statements.

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2015
Fair Value of Financial Instruments
Fair Value of Financial Instruments	4. Fair Value of Financial Instruments The fair value of an asset or liability should represent the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Such transactions to sell an asset or transfer a liability are assumed to occur in the principal or most advantageous market for the asset or liability. Accordingly, fair value is determined based on a hypothetical transaction at the measurement date, considered from the perspective of a market participant rather than from a reporting entity’s perspective. The Company reports assets and liabilities that are measured at fair value using a three level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: · Level 1—Inputs are unadjusted quoted prices in active markets for identical assets that the Company has the ability to access at the measurement date. · Level 2—Inputs are 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 (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—Unobservable inputs that reflect the Company’s own assumptions, based on the best information available, including the Company’s own data. In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value, in thousands: Fair Value Measurements at September 30, 2015 (unaudited) (restated) Significant Total Carrying Quoted Prices Other Significant Value at in Active Observable Unobservable September 30, Markets Inputs Inputs 2015 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents $ $ $ — $ — Marketable securities — Long term marketable securities — — Marketable securities - restricted (SERP) — — Total assets at fair value $ $ $ $ — Liabilities: Derivative liabilities $ $ — $ — $ Fair Value Measurements at December 31, 2014 Significant Total Carrying Quoted Prices Other Significant Value at in Active Observable Unobservable December 31, Markets Inputs Inputs 2014 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents $ $ $ — $ — Marketable securities — — Long term marketable securities — — Marketable securities - restricted (SERP) — — Total assets at fair value $ $ $ $ — Liabilities: Derivative liabilities $ $ — $ — $ Fair Value Measurements at September 30, 2014 (unaudited) (restated) Significant Total Carrying Quoted Prices Other Significant Value at in Active Observable Unobservable September 30, Markets Inputs Inputs 2014 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents $ $ $ — $ — Marketable securities — — Long term marketable securities — — Marketable securities - restricted (SERP) — — Total assets at fair value $ $ $ $ — Liabilities: Derivative liabilities $ $ — $ — $ The fair value of the restricted marketable securities is included within other non-current assets in the consolidated balance sheets. The Company’s Level 1 assets include money market funds, a CD and U.S. Treasury and government agency debt securities with quoted prices in active markets. Level 2 assets include the SERP (Supplemental Executive Retirement Plan) assets, commercial paper and investment grade corporate bonds and other fixed income securities. Level 3 liabilities include the estimated fair value of the interest make-whole liability associated with the Company’s 7.5% Convertible Senior Secured Notes due 2019 (the Notes) and outstanding warrants to purchase common stock, which are recorded as derivative liabilities. During the three months ended September 30, 2015, all of the outstanding warrants to purchase common stock were exercised. As of September 30, 2015 there remain no warrants outstanding. The fair value of the interest make-whole liability of the Notes was calculated using a binomial-lattice model with the following key assumptions as of September 30, 2015, unaudited: Volatility 45% Stock Price as of September 30, 2015 $14.03 per share Credit Spread 1851 bps Term 1.6 years Dividend Yield 0.0% Significant changes to these assumptions could result in increases/decreases to the fair value of the derivative liabilities. Changes in the fair value of the warrants and the interest make-whole liability are recognized as a component of Other Income (Expense) in the Consolidated Statements of Operations. The following table presents information about the Company’s Level 3 liabilities as of December 31, 2014 and September 30, 2015 that are included in the Non-Current Liabilities section of the Consolidated Balance Sheets, in thousands: Nine Months ended September 30, 2015 (unaudited) Balance at December 31, 2014 $ Changes in fair value of derivative liabilities included in earnings ) Reduction due to conversion of debt to equity ) Cashless exercise of common stock warrants ) Balance at September 30, 2015 $ The carrying value, face value and estimated fair value of the Notes was approximately $8.1 million, $9.7 million and $27.3 million, respectively, as of September 30, 2015. The fair value was estimated based on actual trade information as well as quoted prices provided by bond traders, which would be characterized within Level 2 of the fair value hierarchy. This fair value amount gives recognition to the value of the interest make-whole liability and the value of the conversion option. These items have been accounted for as derivative liabilities and additional paid-in-capital, respectively. The carrying amounts of other financial instruments, including accounts receivable, accounts payable and accrued expenses approximate fair value due to their short-term maturities. Unrestricted marketable securities held by the Company were as follows, in thousands: At September 30, 2015 (unaudited) (restated) : Available for Sale Amortized Gross Gross Fair Value Corporate debt securities $ $ $ ) $ At December 31, 2014: Available for Sale Amortized Gross Gross Fair Value Corporate debt securities $ $ $ ) $ At September 30, 2014 (unaudited): Available for Sale Amortized Gross Gross Fair Value Corporate debt securities $ $ $ ) $ The contractual maturities of the unrestricted available for sale marketable securities held by the Company were as follows, in thousands: September 30, 2015 (unaudited) (restated) Less Than 1 Year $ 1-5 years Greater Than 5 Years — Total $ The Company has not experienced any other-than-temporary losses on its marketable securities and restricted marketable securities. The cost of securities sold is calculated using the specific identification method.

Inventories

Inventories	9 Months Ended
	Sep. 30, 2015
Inventories
Inventories	5. Inventories Inventories consist of the following, in thousands: September 30, December 31, September 30 2015 2014 2014 (unaudited) (unaudited) Raw materials $ $ $ Work in process Finished goods $ $ $

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2015
Property and Equipment
Property and Equipment	6. Property and Equipment Property and equipment consist of the following, in thousands: September 30, December 31, September 30, 2015 2014 2014 (unaudited) (unaudited) Computer equipment $ $ Software Lab equipment and furniture Leasehold improvements Less accumulated depreciation and amortization ) ) ) $ $ $ Depreciation and amortization expense on property and equipment was approximately $162,000 and $478,000 for the three and nine months ended September 30, 2015, respectively, and $184,000 and $529,000 for the three and nine months ended September 30, 2014, respectively.

Intangible Assets and Deferred

Intangible Assets and Deferred Legal Fees	9 Months Ended
	Sep. 30, 2015
Intangible Assets and Deferred Legal Fees.
Intangible Assets and Deferred Legal Fees	7. Intangible Assets and Deferred Legal Fees The Company purchased certain patents from Shire Laboratories, Inc. pursuant to a 2005 purchase agreement. These patents are being amortized over the weighted average life of the patents purchased in that transaction. Deferred legal fees have been incurred in connection with litigation related to patents for Oxtellar XR and Trokendi XR (see Part II, Item I—Legal Proceedings in this Quarterly Report on Form 10-Q/A). The following sets forth the gross carrying amount and related accumulated amortization of these intangible assets, in thousands: September 30, 2015 September 30, 2014 (unaudited) December 31, 2014 (unaudited) Weighted- Gross Carrying Accumulated Gross Carrying Accumulated Gross Carrying Accumulated Average Life Amount Amortization Amount Amortization Amount Amortization Purchased patents $ $ $ $ $ $ Deferred legal fees $ $ — $ $ — — Deferred legal fees will be capitalized as part of the patents upon successful outcome of the on-going litigation related to these patents, at which point amortization of those costs will begin. If the Company is unsuccessful, the deferred legal fees will be expensed at that time. Five U.S. patents have been issued covering Oxtellar XR and six U.S. patents have been issued covering Trokendi XR, with the patents expiring no earlier than 2027. Amortization expense associated with purchased patents was approximately $57,000 for each of the three months ended September 30, 2015 and 2014 and was approximately $172,000 for each of the nine months ended September 30, 2015 and 2014. The estimated annual aggregate amortization expense through December 31, 2015 is $229,000. The net book value of intangible assets was approximately $16.6 million as of September 30, 2015 and was approximately $5.4 million as of December 31, 2014. There were no indicators of impairment identified at September 30, 2015 or December 31, 2014.

Accrued Expenses

Accrued Expenses	9 Months Ended
	Sep. 30, 2015
Accrued Expenses
Accrued Expenses	8. Accrued Expenses Accrued Expenses are comprised of the following, in thousands: September 30, December 31, September 30 2015 2014 2014 (unaudited) (restated) (unaudited) Accrued compensation $ $ $ Accrued professional fees Accrued clinical trial and clinical supply costs Accrued sales and marketing expenses Accrued product costs Accrued interest expense Other accrued expenses $ $ $

Convertible Senior Secured Note

Convertible Senior Secured Notes	9 Months Ended
	Sep. 30, 2015
Convertible Senior Secured Notes
Convertible Senior Secured Notes	9. Convertible Senior Secured Notes The table below summarizes activity related to the Notes from issuance on May 3, 2013 through September 30, 2015, in thousands: Gross proceeds $ Initial value of interest make-whole derivative reported as debt discount ) Conversion option reported as debt discount and APIC ) Conversion of debt to equity - principal ) Conversion of debt to equity - accretion of debt discount Accretion of debt discount and deferred financing costs December 31, 2014 carrying value Conversion of debt to equity - principal ) Conversion of debt to equity - accretion of debt discount Accretion of debt discount and deferred financing costs September 30, 2015 carrying value, unaudited, restated $ During the nine month period ended September 30, 2015, approximately $26.3 million of the Notes were presented to the Company for conversion. Accordingly, the Company issued approximately 5.0 million shares of common stock in conversion of the principal amount of the Notes. The Company issued an additional 0.5 million shares of common stock in settlement of the interest make-whole provision related to the converted Notes. As a result of the conversions, the Company incurred a loss of approximately $2.4 million on extinguishment of debt during the nine months ended September 30, 2015, which is included as a separate component of other income (expense) on the consolidated statement of operations. During the nine month period ended September 30, 2014, as a result of approximately $13.4 million in note conversions, the Company incurred a loss of approximately $2.6 million on extinguishment of debt.

Summary Stockholders' Equity

Summary Stockholders' Equity	9 Months Ended
	Sep. 30, 2015
Stockholders' Equity
Stockholders' Equity	10. Summary Stockholders’ Equity The following summary table provides details related to the activity in certain captions within Stockholders’ Equity for the nine month period ended September 30, 2015, in thousands. Common Stock Additional Paid-in (unaudited) (restated) Balance, December 31, 2014 $ $ Share-based compensation — Issuance of ESPP shares — Exercise of stock options — Equity issued on note conversion Exercise of warrants — Balance, September 30, 2015 $ $

Share-Based Payments

Share-Based Payments	9 Months Ended
	Sep. 30, 2015
Share-Based Payments
Share-Based Payments	11. Share-Based Payments The Company has adopted the Supernus Pharmaceuticals, Inc. 2012 Equity Incentive Plan (the 2012 Plan), which is stockholder approved, and provides for the grant of stock options and certain other awards, including stock appreciation rights (SAR), restricted and unrestricted stock, stock units, performance awards, cash awards and other awards that are convertible into or otherwise based on the Company’s common stock, to the Company’s key employees, directors, and consultants and advisors. The 2012 Plan is administered by the Company’s Board of Directors and provides for the issuance of up to 4,000,000 shares of the Company’s common stock upon the exercise of stock awards. Option awards are granted with an exercise price equal to the estimated fair value of the Company’s common stock at the grant date; those option awards generally vest in four annual installments, starting on the first anniversary of the date of grant and have ten year contractual terms. Option awards granted to the directors generally vest over a one year term. Share-based compensation recognized related to the grant of employee and non-employee stock options, SAR, potential Employee Stock Purchase Plan (ESPP) awards and non-vested stock was as follows, in thousands: Three Months ended September 30, Nine Months ended September 30, 2015 2014 2015 2014 (unaudited) (restated) (unaudited) (restated) Research and development $ $ $ $ Selling, general and administrative Total $ $ $ $ The following table summarizes stock option and SAR activity: Number of Weighted- Weighted- Outstanding, December 31, 2014 $ 8.04 Granted (unaudited) $ Exercised (unaudited) ) $ Forfeited or expired (unaudited) ) $ Outstanding, September 30, 2015 (unaudited) $ 8.14 As of December 31, 2014: Vested and expected to vest $ 8.03 Exercisable $ 6.91 As of September 30, 2015: Vested and expected to vest (unaudited) $ 8.13 Exercisable (unaudited) $ 7.13 The following table summarizes stock option and SAR activity: Number of Weighted- Weighted- Outstanding, December 31, 2013 $ 8.51 Granted (unaudited) $ Exercised (unaudited) ) $ Forfeited or expired (unaudited) ) $ Outstanding, September 30, 2014 (unaudited) $ 8.28 As of December 31, 2013: Vested and expected to vest $ 8.50 Exercisable $ 6.44 As of September 30, 2014: Vested and expected to vest (unaudited) $ 8.27 Exercisable (unaudited) $ 7.18

Earnings per Share

Earnings per Share	9 Months Ended
	Sep. 30, 2015
Earnings per Share
Earnings per Share	12. Earnings per Share Basic income per common share is determined by dividing income attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Diluted income per share is computed by dividing the income attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period. The treasury stock method is used to determine the dilutive effect of the Company’s stock option grants, SARs, and potential ESPP awards, and the if-converted method is used to determine the dilutive effect of the Company’s Notes. The following common stock equivalents were excluded in the calculation of diluted income per share because their effect would be anti-dilutive as applied to the income from continuing operations applicable to common stockholders for the three and nine months ended September 30, 2015 and 2014: Three Months ended September 30, Nine Months ended September 30, 2015 2014 (Restated) 2015 2014 (Restated) (unaudited) (unaudited) Shares underlying Convertible Senior Secured Notes — — Warrants to purchase common stock Stock options, stock appreciation rights, non-vested stock options and ESPP awards The following table sets forth the computation of basic and diluted net income per share for the three and nine months ended September 30, 2015 and 2014, in thousands, except share and per share amounts, restated: Three Months ended September 30, Nine Months ended September 30, 2015 2014 2015 2014 (unaudited) (unaudited) Numerator, in thousands: Net income used for calculation of basic EPS $ $ ) $ $ ) Interest expense on convertible debt — — Changes in fair value of derivative liabilities ) — ) — Loss on extinguishment of outstanding debt, as if converted — ) — Total adjustments — — Net income used for calculation of diluted EPS $ $ ) $ $ ) Denominator: Weighted average shares outstanding, basic Effect of dilutive potential common shares: Shares underlying Convertible Senior Secured Notes — — Shares issuable to settle interest make-whole derivatives — — — Stock options, stock appreciation rights, non-vested stock options and ESPP awards — — Total potential dilutive common shares — — Weighted average shares outstanding, diluted Net income per share, basic $ $ ) $ $ ) Net income per share, diluted $ $ ) $ $ )

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2015
Income Taxes
Income Taxes	13. Income Taxes During the three and nine months ended September 30, 2015, the Company had pre-tax income of $4.1 million and $7.5 million, respectively. The provision for Federal and state income taxes related to the pre-tax income has been largely offset by the utilization of available net operating loss carryforwards (NOL’s). Accordingly, the Company reduced its valuation allowance against its deferred tax assets and recognized an income tax expense for the jurisdictions that did not have sufficient NOL’s to offset the expected tax expense. During the three months and nine months ended September 30, 2015, the Company recorded $0.1 million and $0.5 million, respectively, of current tax expense related to an increase in our reserve for an uncertain tax position related to the Alternative Minimum Tax.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2015
Commitments and Contingencies
Commitments and Contingencies	14. Commitments and Contingencies The Company has concurrent leases for office and lab space that extend through April 2020. The Company may elect to extend the term of the leases for an additional five-year term. The leases provide for a tenant improvement allowance of approximately $2.1 million in aggregate. During the three and nine months ended September 30, 2015, $107,000 and $215,000, respectively, of the allowance was utilized and is included in fixed assets and deferred rent. During the three and nine months ended September 30, 2014, $7,000 and $90,000, respectively, of the allowance was utilized. As of September 30, 2015, $0.5 million remains available for tenant improvements. Rent expense for the leased facilities and leased vehicles for the three and nine months ended September 30, 2015 was approximately, $0.7 million, and $2.0 million, respectively. Rent expense for the leased facilities and leased vehicles for the three and nine months ended September 30, 2014 was approximately, $0.7 million, and $1.6 million, respectively. Future minimum lease payments under non-cancelable operating leases as of September 30, 2015 are as follows, in thousands: Year ending December 31: 2015 (remaining) $ 2016 2017 2018 Thereafter $ The Company has obtained exclusive licenses from third parties for proprietary rights to support the product candidates in the Company’s psychiatry portfolio. Under license agreements with Afecta Pharmaceuticals, Inc. (Afecta), the Company has an exclusive option to evaluate Afecta’s CNS pipeline and to obtain exclusive worldwide rights to selected product candidates, including an exclusive license to SPN-810. The Company does not owe any future milestone payments for SPN-810. The Company is obligated to pay royalties to Afecta based on worldwide net sales of each of these products in the low-single digits. The Company has also entered into a purchase and sale agreement with Rune Healthcare Limited (Rune), where the Company obtained the exclusive worldwide rights to a product concept from Rune. There are no future milestone payments due to Rune under this agreement. If the Company receives approval to market and sell any products based on the Rune product concept for SPN-809, the Company is obligated to pay royalties to Rune based on net sales worldwide in the low single digits.

Collaboration Agreements

Collaboration Agreements	9 Months Ended
	Sep. 30, 2015
Collaboration Agreements
Collaboration Agreements	15. Collaboration Agreements United Therapeutics The Company has a license agreement with United Therapeutics Corporation to use one of its proprietary technologies for an oral formulation of Remodulin for the treatment of pulmonary arterial hypertension and potentially for additional indications. Through September 30, 2015, the Company has received $3.5 million in milestone payments under the agreement. During 2014, we entered into a Royalty Interest Acquisition Agreement with HC Royalty. Pursuant to this Agreement, HC Royalty made a $30.0 million cash payment to the Company in consideration for acquiring from the Company certain royalty and milestone rights related to the commercialization of Orenitram (treprostinil) Extended-Release Tablets. We will retain full ownership of the royalty rights if a certain threshold is reached per the terms of the Agreement. There was zero milestone revenue generated from this license agreement in the three and nine months ended September 30, 2015. The revenue generated from this license agreement in the three and nine months ended September 30, 2014 was $2.0 million for a milestone payment. As of September 30, 2015 and December 31, 2014, there are no receivables or payables related to the collaboration with United Therapeutics Corporation. Stendhal Licenses In August 2011, we executed a Development and Licensing Agreement with Especificos Stendhal, S.A., DE C.V. (Stendhal) that provided Stendhal an exclusive license to our licensed intellectual property underlying our Oxtellar XR product in Mexico, Venezuela, Colombia and other select markets in Central and South America. The agreement included the right to our patents, proprietary information, and know-how of our drug-delivery technology and pharmaceutical product underlying our Oxtellar XR product. Stendhal is responsible for all costs associated with clinical development, approval, commercialization and distribution of the product in the defined territory, which may be expanded upon certain events. We have received $2.3 million from Stendhal, which was recognized as revenue on a straight-line basis over the substantive obligation period. As of September 30, 2015, this up-front payment had been fully recognized as revenue. We may receive up to $1.5 million in additional milestone payments, based on certain regulatory and commercial milestones defined in the agreement. In September 2012, the Company executed a Development and Licensing Agreement (Stendhal License Agreement) with Stendhal that provided Stendhal with an exclusive license of the Company’s licensed intellectual property underlying the Trokendi XR product in the defined territory. The license included the right to the Company’s patents, proprietary information, and know-how of the Company’s drug-delivery technology and pharmaceutical product underlying its Trokendi XR product. Stendhal is responsible for all costs associated with clinical development, approval, commercialization and distribution of the product in the defined territory. The Company received $1.8 million that is being recognized as revenue on a straight-line basis over its substantive obligation period of twelve years. As of September 30, 2015, approximately $1.3 million of this amount was recorded as deferred revenue of which $0.1 million was current and $1.2 million was non-current. The Company monitors this estimate on a quarterly basis to determine if facts and circumstances may have changed that would require a prospective adjustment to the recognition period. The Company may receive up to an additional $1.8 million in future milestone payments, based on certain milestones defined in the Stendhal License Agreement. The licensing revenue generated from Stendhal in the nine months ended September 30, 2015 and September 30, 2014 was $0.1 million and $0.2 million, respectively. As of September 30, 2015 and December 31, 2014, there is $1.3 million and $1.4 million, respectively, in deferred licensing revenue included in the balance sheet. There were de minimis amounts of product revenue for the nine months ended September 30, 2015 and 2014. There is a combined amount of $0.8 million of milestone and product receivables at September 30, 2015 and a de minimis amount of receivables at December 31, 2014.

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2015
Subsequent Events
Subsequent Events	16. Subsequent Events Subsequent to September 30, 2015, holders of the Notes converted approximately $1.2 million of the Notes and we issued a total of approximately 0.2 million shares of common stock in conversion of the principal amount of the Notes and accrued interest thereon, and issued an additional 13,000 shares of common stock in settlement of the interest make-whole provision related to the converted Notes.

Summary of Significant Accoun23

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The Company’s unaudited consolidated financial statements include the accounts of Supernus Pharmaceuticals, Inc. and Supernus Europe Ltd. These are collectively referred to herein as “Supernus” or “the Company.” All significant intercompany transactions and balances have been eliminated in consolidation. The Company’s unaudited consolidated financial statements have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (SEC) for interim financial information. As permitted under Generally Accepted Accounting Principles in the United States (U.S. GAAP), certain notes and other information have been omitted from the interim unaudited consolidated financial statements presented in this Quarterly Report on Form 10-Q/A. Therefore, these financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2015 filed with the SEC. In the opinion of management, the consolidated financial statements reflect all adjustments necessary to fairly present the Company’s financial position, results of operations, and cash flows for the periods presented. These adjustments are of a normal recurring nature. The Company currently operates in one business segment. The results of operations for the three and nine months ended September 30, 2015 are not necessarily indicative of the Company’s future financial results.
Marketable Securities	Marketable Securities Marketable securities consist of investments in U.S. Treasuries, various U.S. governmental agency debt securities, corporate bonds and other fixed income securities. The Company’s investments are classified as available for sale. Such securities are carried at estimated fair value, with any unrealized holding gains or losses reported, net of any tax effects reported, as accumulated other comprehensive income, which is a separate component of stockholders’ equity. Realized gains and losses, and declines in value judged to be other-than-temporary, if any, are included in consolidated results of operations. A decline in the market value of any available for sale security below cost that is deemed to be other-than-temporary results in a reduction in fair value, which is charged to earnings in that period, and a new cost basis for the security is established. Dividend and interest income is recognized when earned. The cost of securities sold is calculated using the specific identification method. The Company places all investments with highly rated government or private sector or industrial financial institutions whose debt is rated as investment grade. The Company classifies all available-for-sale marketable securities with maturities greater than one year from the balance sheet date as non-current assets. The Company established the Supernus Supplemental Executive Retirement Plan (SERP) for the sole purpose of receiving funds for executives from a previous SERP and providing a continuing deferral program under the Supernus SERP. As of September 30, 2015, the fair value of the SERP was $267,000 and was held in cash securities. As of December 30, 2014, the estimated fair value of the mutual fund investment securities within the SERP was approximately $305,000. The fair value of these assets is included within other non-current assets on the consolidated balance sheets. A corresponding noncurrent liability is also included in the consolidated balance sheets to reflect the Company’s obligation for the SERP. The Company has not made, and has no plans to make, contributions to the SERP. The securities are restricted in nature and can only be used for purposes of paying benefits under the SERP.
Accounts Receivable, net	Accounts Receivable, net Accounts receivable are reported on the consolidated balance sheets at outstanding amounts, less an allowance for doubtful accounts and discounts. The Company extends credit without requiring collateral. The Company writes off uncollectible receivables when the likelihood of collection is remote. The Company evaluates the collectability of accounts receivable on a regular basis. An allowance, when needed, is based upon various factors including the financial condition and payment history of customers, an overall review of collections experience on other accounts, and economic factors or events expected to affect future collections experience. No accounts have been written off in 2015 and 2014. The Company recorded an allowance of approximately $4.7 million and $4.1 million for estimated sales discounts as of September 30, 2015 and December 31, 2014, respectively.
Revenue Recognition	Revenue Recognition Revenue from product sales is recognized when persuasive evidence of an arrangement exists; delivery has occurred and title to the product and associated risk of loss has passed to the customer; the price is fixed or determinable; collection from the customer has been reasonably assured; all performance obligations have been met; and returns and allowances can be reasonably estimated. Product sales are recorded net of estimated rebates, chargebacks, discounts, co-pay assistance and other deductions as well as estimated product returns (collectively, “sales deductions”). Our products are distributed through wholesalers and pharmaceutical distributors. Each of these wholesalers and distributors will take title and ownership to the product upon physical receipt of the product and then distribute our products to pharmacies. For the three and nine months ended September 30, 2015, the revenue for Oxtellar XR and Trokendi XR was recognized contemporaneously upon shipment of finished products to wholesalers, net of allowances for estimated sales deductions and returns. Beginning in the second quarter of 2014, the Company began recognizing revenue for Trokendi XR, net of estimated sales deductions, at the time of shipments to wholesalers. Prior to this change in accounting estimate, the Company recognized revenue for Trokendi XR once delivery had occurred and all sales deductions were known or reasonably estimated. The effect of this change was to increase net product sales by $7.9 million, which represents the impact of the deferred product revenue at December 31, 2013, and cost of product sales by $0.5 million for the nine months ended September 30, 2014. During the three and nine months ended September 30, 2015, the Company recorded a $2.9 million reduction to net revenue related to a change in estimate associated with its accrued sales deductions of $18.8 million at September 30, 2015. The change in estimate reflects returns experience associated with our initial launch shipments, which have now passed their expiry dating. Royalty Revenue In the third quarter of 2014, the Company received a $30.0 million payment pursuant to a royalty agreement related to the purchase by HC Royalty of certain of the Company’s rights under the agreement with United Therapeutics Corporation related to the commercialization of Orenitram. We have recorded a non-recourse liability related to this transaction and have begun to amortize this amount to recognize royalty revenue as royalties are received by HC Royalty from United Therapeutics. We also recognize non-cash interest expense related to this liability that accrues at an effective interest rate determined based on projections of HC Royalty’s rate of return. We recognized royalty revenue of $2.0 million and $0.2 million for the nine months ended September 30, 2015 and 2014, respectively. We recognized interest expense of $2.5 million and $0.3 million for the nine months ended September 30, 2015 and 2014, respectively. Sales Deductions Allowances for estimated sales deductions are provided for the following: · Rebates. Rebates include mandated discounts under the Medicaid Drug Rebate Program, the Medicare coverage gap program, as well as negotiated discounts with commercial health-care providers. Rebates are amounts owed after the final dispensing of products to a benefit plan participant and are based upon contractual agreements or legal requirements with the public sector (e.g. Medicaid) and with private sector benefit providers. The allowance for rebates is based on statutory and contractual discount rates and expected claimed rebates paid based on a plan provider’s utilization. Rebates are generally invoiced and paid quarterly in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarters’ unpaid rebates. If actual future rebates vary from estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. · Chargebacks. Chargebacks are discounts that occur when contracted customers purchase directly from an intermediary distributor or wholesaler. Contracted customers, which currently consist primarily of Public Health Service institutions and Federal government entities purchasing via the Federal Supply Schedule, generally purchase the product at a discounted price. The distributor or wholesaler, in turn, charges back the difference between the price initially paid by the distributor or wholesaler and the discounted price paid to the distributor or wholesaler by the customer. The allowance for distributor/wholesaler chargebacks is based on known sales to contracted customers. · Distributor/Wholesaler deductions and discounts. U.S. specialty distributors and wholesalers are offered various forms of consideration including allowances, service fees and prompt payment discounts as consideration for distributing our products. Distributor allowances and service fees arise from contractual agreements with distributors and are generally a percentage of the purchase price paid by the distributors and wholesalers. Wholesale customers are offered a prompt pay discount for payment within a specified period. · Co-pay assistance. Patients who pay in cash or have commercial insurance and meet certain eligibility requirements may receive co-pay assistance from the Company. The intent of this program is to reduce the patient’s out of pocket costs. Liabilities for co-pay assistance are based on actual program participation and estimates of program redemption using data provided by third-party administrators. · Returns. Sales of our products are not subject to a general right of return; however, the Company will accept product that is damaged or defective when shipped directly from our warehouse and expired product six months prior and up to 12 months subsequent to its expiry date. Product that has been used to fill patient prescriptions is no longer subject to any right of return. Milestone Payments Milestone payments on licensing agreements are recognized as revenue when the collaborative partner acknowledges completion of the milestone and substantive effort was necessary to achieve the milestone. Management may recognize revenue contingent upon the achievement of a milestone in its entirety in the period in which the milestone is achieved only if the milestone meets all the criteria to be considered substantive. The Company recorded zero and $750,000 of milestone revenue during the three and nine months ended September 30, 2015, respectively, and zero and $2.0 million of milestone revenue during the three and nine months ended September 30, 2014, respectively.
Cost of Product Sales	Cost of Product Sales The cost of product sales consists primarily of materials, third-party manufacturing costs, freight and distribution costs, allocation of labor, quality control and assurance, and other manufacturing overhead costs.
Income Taxes	Income Taxes The Company utilizes the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Valuation allowances are established to reduce deferred tax assets to the amounts expected to be realized. The Company accounts for uncertain tax positions in its consolidated financial statements when it is more-likely-than-not that the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. The Company’s policy is to recognize any interest and penalties related to income taxes in income tax expense.
Recently Issued Accounting Pronouncements	Recently Issued Accounting Pronouncements In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-05, “Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement.” This ASU provides guidance about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the software license element of the arrangement is consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, then it should account for the arrangement as a service contract. The amendments in this ASU are effective for financial statements issued for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. The Company has elected to adopt the amendment early. The adoption of this standard had no impact on the Company’s financial results. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): “Simplifying the Measurement of Inventory.” Under this new guidance, entities that measure inventory using any method other than last-in, first-out or the retail inventory method will be required to measure inventory at the lower of cost and net realizable value. The amendments in this ASU, which should be applied prospectively, are effective for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of ASU No. 2015-11 on our consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU No. 2015-03, “Simplifying the Presentation of Debt Issuance Costs.” This ASU more closely aligns the treatment of debt issuance costs with debt discounts and premiums and requires debt issuance costs be presented as a direct deduction from the carrying amount of the related debt. The amendments in this ASU are effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. This guidance has been applied on a retrospective basis and the impact is reflected in the as previously reported column in Note 2. The adoption of ASU 2015-03 resulted in a reclassification of deferred financing costs of $765,000, $724,000 and $129,000 from asset to liability classification on the Company’s consolidated financial statements as of September 30, 2014, December 31, 2014 and September 2015, respectively. In August 2014, the FASB issued ASU No. 2014-15 “Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern”. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue to meet its obligations as they become due within one year after the date that the financial statements are issued. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We do not believe the adoption of the new standard will have a significant impact on our consolidated financial statements. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 will eliminate transaction- and industry-specific revenue recognition guidance under current GAAP and replace it with a principles-based approach for determining revenue recognition. ASU 2014-09 will require that companies recognize revenue based on the value of transferred goods or services as they occur in the contract. The ASU also will require additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016. The FASB has voted to approve a one-year deferral, changing the effective date to annual reporting periods beginning after December 15, 2017, with early adoption being permitted for periods ending after December 15, 2016. Earlier adoption is not permitted. Entities can transition to the standard either retrospectively or as a cumulative effect adjustment as of the date of adoption. Presently, the Company is assessing what effect the adoption of ASU 2014-09 will have on our consolidated financial statements and accompanying notes. The Company has evaluated all other ASUs issued through the date the consolidated financials were issued and believes that no other ASU will have a material impact on the Company’s consolidated financial statements.

Restatement of Financial Stat24

Restatement of Financial Statements (Tables)	9 Months Ended
	Sep. 30, 2015
Restatement of Financial Statements
Schedule of restatement on the condensed consolidated balance sheet, consolidated statement of operations and consolidated statement of cash flows	The impact of the restatement and other corrections on the condensed Consolidated Balance Sheet, Consolidated Statement of Operations and Consolidated Statement of Cash Flows as of and for the three and nine month periods ended September 30, 2015 and September 30, 2014 is presented below, in thousands except share and per share data. Three Months Ended September 30, 2015 As Previously Restatement Other Consolidated Statement of Operations (unaudited) Reported Adjustments Corrections As Restated Royalty revenue $ — $ $ $ Total revenue Operating income Interest expense — non-recourse liability related to sale of future royalties — ) ) Total other expense ) ) ) Earnings before income taxes ) Income tax expense Net income ) ) Income per common share: Basic ) Nine Months Ended September 30, 2015 As Previously Restatement Other Consolidated Statement of Operations (unaudited) Reported Adjustments Corrections As Restated Royalty revenue $ — $ $ $ Total revenue Selling, general and administrative ) Total costs and expenses ) Operating income Interest expense — non-recourse liability related to sale of future royalties — ) ) Total other expense ) ) ) Earnings before income taxes ) Income tax expense ) Net income ) Nine Months Ended September 30, 2015 As Previously Restatement Other Consolidated Statements of Cash Flows (unaudited) Reported Adjustments Corrections As Restated Net cash provided by operating activities $ $ $ Net cash used in investing activities ) ) ) Net change in cash and cash equivalents ) ) ) As of September 30, 2015 As Previously Restatement Other Consolidated Balance Sheet (unaudited) Reported Adjustments Corrections As Restated Cash and cash equivalents $ $ ) $ Marketable securities Accrued expenses Non-recourse liability related to sale of future royalties — current portion — Total current liabilities Non-recourse liability related to sale of future royalties — long term — Total liabilities Accumulated deficit ) ) ) ) Total stockholders’ equity ) ) As of December 31, 2014 As Previously Restatement Other Consolidated Balance Sheet Reported Adjustments Corrections As Restated Accrued expenses Total current liabilities Non-recourse liability related to sale of future royalties — long term — Total liabilities Additional paid-in capital Accumulated deficit ) ) ) ) Total stockholders’ equity ) ) Three Months Ended September 30, 2014 As Previously Restatement Other Consolidated Statement of Operations (unaudited) Reported Adjustments Corrections As Restated Royalty revenue $ — $ $ $ Revenue from royalty agreement ) — Total revenue ) Selling, general and administrative Total costs and expenses Operating income (loss) ) ) ) Interest expense — non-recourse liability related to sale of future royalties — ) ) Total other expense ) ) ) Earnings before income taxes ) ) ) Net Income (loss) ) ) ) Income (loss) per common share: Basic ) ) Income (loss) per common share: Diluted ) ) Weighted average number of common shares - Diluted ) Nine Months Ended September 30, 2014 As Previously Restatement Other Consolidated Statement of Operations (unaudited) Reported Adjustments Corrections As Restated Royalty revenue $ — $ $ $ Revenue from royalty agreement ) — Total revenue ) Selling, general and administrative Total costs and expenses Operating Income (loss) ) ) ) Interest expense — non-recourse liability related to sale of future royalties — ) ) Total other expense ) ) ) Earnings before income taxes ) ) ) Net income (loss) ) ) ) Income (loss) per common share: Basic ) ) Income (loss) per common share: Diluted ) ) Weighted average number of common shares - Diluted ) Nine Months Ended September 30, 2014 As Previously Restatement Other Consolidated Statements of Cash Flows (unaudited) Reported Adjustments Corrections As Restated Net cash provided by (used in) operating activities $ ) $ ) $ ) Net cash provided by investing activities Net cash provided by financing activities As of September 30, 2014 As Previously Restatement Other Consolidated Balance Sheet (unaudited) Reported Adjustments Corrections As Restated Non-recourse liability related to sale of future royalties — long term — Total liabilities ) Additional paid-in capital Accumulated deficit ) ) ) ) Total stockholders’ equity )

Fair Value of Financial Instr25

Fair Value of Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2015
Fair Value of Financial Instruments
Schedule of fair value of the financial assets and liabilities	In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value, in thousands: Fair Value Measurements at September 30, 2015 (unaudited) (restated) Significant Total Carrying Quoted Prices Other Significant Value at in Active Observable Unobservable September 30, Markets Inputs Inputs 2015 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents $ $ $ — $ — Marketable securities — Long term marketable securities — — Marketable securities - restricted (SERP) — — Total assets at fair value $ $ $ $ — Liabilities: Derivative liabilities $ $ — $ — $ Fair Value Measurements at December 31, 2014 Significant Total Carrying Quoted Prices Other Significant Value at in Active Observable Unobservable December 31, Markets Inputs Inputs 2014 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents $ $ $ — $ — Marketable securities — — Long term marketable securities — — Marketable securities - restricted (SERP) — — Total assets at fair value $ $ $ $ — Liabilities: Derivative liabilities $ $ — $ — $ Fair Value Measurements at September 30, 2014 (unaudited) (restated) Significant Total Carrying Quoted Prices Other Significant Value at in Active Observable Unobservable September 30, Markets Inputs Inputs 2014 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents $ $ $ — $ — Marketable securities — — Long term marketable securities — — Marketable securities - restricted (SERP) — — Total assets at fair value $ $ $ $ — Liabilities: Derivative liabilities $ $ — $ — $
Schedule of assumptions used to calculate fair value of the interest make-whole liability	Volatility 45% Stock Price as of September 30, 2015 $14.03 per share Credit Spread 1851 bps Term 1.6 years Dividend Yield 0.0%
Schedule of Level 3 liabilities included in Non-current Liabilities on the Balance Sheet	The following table presents information about the Company’s Level 3 liabilities as of December 31, 2014 and September 30, 2015 that are included in the Non-Current Liabilities section of the Consolidated Balance Sheets, in thousands: Nine Months ended September 30, 2015 (unaudited) Balance at December 31, 2014 $ Changes in fair value of derivative liabilities included in earnings ) Reduction due to conversion of debt to equity ) Cashless exercise of common stock warrants ) Balance at September 30, 2015 $
Schedule of unrestricted marketable securities	Unrestricted marketable securities held by the Company were as follows, in thousands: At September 30, 2015 (unaudited) (restated) : Available for Sale Amortized Gross Gross Fair Value Corporate debt securities $ $ $ ) $ At December 31, 2014: Available for Sale Amortized Gross Gross Fair Value Corporate debt securities $ $ $ ) $ At September 30, 2014 (unaudited): Available for Sale Amortized Gross Gross Fair Value Corporate debt securities $ $ $ ) $
Schedule of contractual maturities of the unrestricted available for sale marketable securities held	The contractual maturities of the unrestricted available for sale marketable securities held by the Company were as follows, in thousands: September 30, 2015 (unaudited) (restated) Less Than 1 Year $ 1-5 years Greater Than 5 Years — Total $

Inventories (Tables)

Inventories (Tables)	9 Months Ended
	Sep. 30, 2015
Inventories
Schedule of inventories	Inventories consist of the following, in thousands: September 30, December 31, September 30 2015 2014 2014 (unaudited) (unaudited) Raw materials $ $ $ Work in process Finished goods $ $ $

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2015
Property and Equipment
Schedule of property and equipment	Property and equipment consist of the following, in thousands: September 30, December 31, September 30, 2015 2014 2014 (unaudited) (unaudited) Computer equipment $ $ Software Lab equipment and furniture Leasehold improvements Less accumulated depreciation and amortization ) ) ) $ $ $

Intangible Assets and Deferre28

Intangible Assets and Deferred Legal Fees (Tables)	9 Months Ended
	Sep. 30, 2015
Intangible Assets and Deferred Legal Fees.
Schedule of gross carrying amount and related accumulated amortization of the intangible assets	The following sets forth the gross carrying amount and related accumulated amortization of these intangible assets, in thousands: September 30, 2015 September 30, 2014 (unaudited) December 31, 2014 (unaudited) Weighted- Gross Carrying Accumulated Gross Carrying Accumulated Gross Carrying Accumulated Average Life Amount Amortization Amount Amortization Amount Amortization Purchased patents $ $ $ $ $ $ Deferred legal fees $ $ — $ $ — —

Accrued Expenses (Tables)

Accrued Expenses (Tables)	9 Months Ended
	Sep. 30, 2015
Accrued Expenses
Schedule of accrued expenses	Accrued Expenses are comprised of the following, in thousands: September 30, December 31, September 30 2015 2014 2014 (unaudited) (restated) (unaudited) Accrued compensation $ $ $ Accrued professional fees Accrued clinical trial and clinical supply costs Accrued sales and marketing expenses Accrued product costs Accrued interest expense Other accrued expenses $ $ $

Convertible Senior Secured No30

Convertible Senior Secured Notes (Tables)	9 Months Ended
	Sep. 30, 2015
Convertible Senior Secured Notes
Summary of issuance of Notes reflected in balance sheet	The table below summarizes activity related to the Notes from issuance on May 3, 2013 through September 30, 2015, in thousands: Gross proceeds $ Initial value of interest make-whole derivative reported as debt discount ) Conversion option reported as debt discount and APIC ) Conversion of debt to equity - principal ) Conversion of debt to equity - accretion of debt discount Accretion of debt discount and deferred financing costs December 31, 2014 carrying value Conversion of debt to equity - principal ) Conversion of debt to equity - accretion of debt discount Accretion of debt discount and deferred financing costs September 30, 2015 carrying value, unaudited, restated $

Summary Stockholders' Equity (T

Summary Stockholders' Equity (Tables)	9 Months Ended
	Sep. 30, 2015
Stockholders' Equity
Schedule of activity in certain captions within Stockholders' Equity	The following summary table provides details related to the activity in certain captions within Stockholders’ Equity for the nine month period ended September 30, 2015, in thousands. Common Stock Additional Paid-in (unaudited) (restated) Balance, December 31, 2014 $ $ Share-based compensation — Issuance of ESPP shares — Exercise of stock options — Equity issued on note conversion Exercise of warrants — Balance, September 30, 2015 $ $

Share-Based Payments (Tables)

Share-Based Payments (Tables)	9 Months Ended
	Sep. 30, 2015
Share-Based Payments
Schedule of share-based compensation recognized related to the grant of employee and non-employee stock options, SARS, potential Employee Stock Purchase Plan (ESPP) and non-vested stock	Share-based compensation recognized related to the grant of employee and non-employee stock options, SAR, potential Employee Stock Purchase Plan (ESPP) awards and non-vested stock was as follows, in thousands: Three Months ended September 30, Nine Months ended September 30, 2015 2014 2015 2014 (unaudited) (restated) (unaudited) (restated) Research and development $ $ $ $ Selling, general and administrative Total $ $ $ $
Summary of stock option and SAR activity	Number of Weighted- Weighted- Outstanding, December 31, 2014 $ 8.04 Granted (unaudited) $ Exercised (unaudited) ) $ Forfeited or expired (unaudited) ) $ Outstanding, September 30, 2015 (unaudited) $ 8.14 As of December 31, 2014: Vested and expected to vest $ 8.03 Exercisable $ 6.91 As of September 30, 2015: Vested and expected to vest (unaudited) $ 8.13 Exercisable (unaudited) $ 7.13 Number of Weighted- Weighted- Outstanding, December 31, 2013 $ 8.51 Granted (unaudited) $ Exercised (unaudited) ) $ Forfeited or expired (unaudited) ) $ Outstanding, September 30, 2014 (unaudited) $ 8.28 As of December 31, 2013: Vested and expected to vest $ 8.50 Exercisable $ 6.44 As of September 30, 2014: Vested and expected to vest (unaudited) $ 8.27 Exercisable (unaudited) $ 7.18

Earnings per Share (Tables)

Earnings per Share (Tables)	9 Months Ended
	Sep. 30, 2015
Earnings per Share
Schedule of common stock equivalents excluded in the calculation of diluted income per share	Three Months ended September 30, Nine Months ended September 30, 2015 2014 (Restated) 2015 2014 (Restated) (unaudited) (unaudited) Shares underlying Convertible Senior Secured Notes — — Warrants to purchase common stock Stock options, stock appreciation rights, non-vested stock options and ESPP awards
Schedule of computation of basic and diluted net income per share	The following table sets forth the computation of basic and diluted net income per share for the three and nine months ended September 30, 2015 and 2014, in thousands, except share and per share amounts, restated: Three Months ended September 30, Nine Months ended September 30, 2015 2014 2015 2014 (unaudited) (unaudited) Numerator, in thousands: Net income used for calculation of basic EPS $ $ ) $ $ ) Interest expense on convertible debt — — Changes in fair value of derivative liabilities ) — ) — Loss on extinguishment of outstanding debt, as if converted — ) — Total adjustments — — Net income used for calculation of diluted EPS $ $ ) $ $ ) Denominator: Weighted average shares outstanding, basic Effect of dilutive potential common shares: Shares underlying Convertible Senior Secured Notes — — Shares issuable to settle interest make-whole derivatives — — — Stock options, stock appreciation rights, non-vested stock options and ESPP awards — — Total potential dilutive common shares — — Weighted average shares outstanding, diluted Net income per share, basic $ $ ) $ $ ) Net income per share, diluted $ $ ) $ $ )

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2015
Commitments and Contingencies
Schedule of future minimum lease payments under non-cancelable operating leases	Future minimum lease payments under non-cancelable operating leases as of September 30, 2015 are as follows, in thousands: Year ending December 31: 2015 (remaining) $ 2016 2017 2018 Thereafter $

Organization and Business (Deta

Organization and Business (Details)	9 Months Ended
	Sep. 30, 2015product
Organization and Business
Number of proprietary products in clinical development	2

Restatement of Financial Stat36

Restatement of Financial Statements - Consolidated Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Impact of Restatement on the Condensed Consolidated Financial Statements
Maturity (in days)			91 days
Royalty Revenue	$ 776	$ 199	$ 2,007	$ 199
Total revenue	39,362	22,687	103,778	61,443
Selling, general and administrative	22,900	17,445	65,496	54,554
Costs and Expenses	34,277	23,423	90,814	71,846
Operating income (loss)	5,085	(736)	12,964	(10,403)
Interest expense - non-recourse liability related to sale of future royalties	(998)	(326)	(2,530)	(326)
Total other expense	(1,027)	(1,635)	(5,419)	(4,310)
Earnings before income taxes	4,058	(2,371)	7,545	(14,713)
Income tax expense	142		453
Net income (loss)	$ 3,916	$ (2,371)	$ 7,092	$ (14,713)
Net income per share, basic	$ 0.08	$ (0.06)	$ 0.15	$ (0.35)
Net income per share, diluted	$ 0.08	$ (0.06)	$ 0.15	$ (0.35)
Weighted average shares outstanding, diluted	51,590,797	42,900,269	51,059,466	42,035,025
As Previously Reported
Impact of Restatement on the Condensed Consolidated Financial Statements
Revenue from royalty agreement		$ 30,000		$ 30,000
Total revenue	$ 38,586	52,488	$ 101,771	91,244
Selling, general and administrative		17,343	65,637	54,452
Costs and Expenses		23,321	90,955	71,744
Operating income (loss)	4,309	29,167	10,816	19,500
Total other expense	(29)	(1,309)	(2,889)	(3,984)
Earnings before income taxes	4,280	27,858	7,927	15,516
Income tax expense	58		782
Net income (loss)	$ 4,222	$ 27,858	7,145	$ 15,516
Net income per share, basic	$ 0.09	$ 0.65		$ 0.37
Net income per share, diluted		$ 0.39		$ 0.13
Weighted average shares outstanding, diluted		50,825,633		50,378,186
Restatement Adjustments
Impact of Restatement on the Condensed Consolidated Financial Statements
Royalty Revenue	$ 776	$ 199	2,007	$ 199
Revenue from royalty agreement		(30,000)		(30,000)
Total revenue	776	(29,801)	2,007	(29,801)
Operating income (loss)	776	(29,801)	2,007	(29,801)
Interest expense - non-recourse liability related to sale of future royalties	(998)	(326)	(2,530)	(326)
Total other expense	(998)	(326)	(2,530)	(326)
Earnings before income taxes	(222)	(30,127)	(523)	(30,127)
Net income (loss)	$ (222)	$ (30,127)	(523)	$ (30,127)
Net income per share, basic	$ (0.01)	$ (0.71)		$ (0.72)
Net income per share, diluted		$ (0.45)		$ (0.48)
Weighted average shares outstanding, diluted		(7,925,364)		(8,343,161)
Other Corrections
Impact of Restatement on the Condensed Consolidated Financial Statements
Selling, general and administrative		$ 102	(141)	$ 102
Costs and Expenses		102	(141)	102
Operating income (loss)		(102)	141	(102)
Earnings before income taxes		(102)	141	(102)
Income tax expense	$ 84		(329)
Net income (loss)	$ (84)	$ (102)	$ 470	$ (102)

Restatement of Financial Stat37

Restatement of Financial Statements - Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Impact of Restatement on the Condensed Consolidated Financial Statements
Net cash provided by (used in) operating activities	$ 14,597	$ (30,758)
Net cash (used in) provided by investing activities	(26,419)	5,294
Net cash provided by financing activities	1,067	30,264
Net change in cash and cash equivalents	(10,755)	4,800
As Previously Reported
Impact of Restatement on the Condensed Consolidated Financial Statements
Net cash provided by (used in) operating activities	12,189	739
Net cash (used in) provided by investing activities	(23,358)	3,797
Net cash provided by financing activities		264
Net change in cash and cash equivalents	(10,102)
Restatement Adjustments
Impact of Restatement on the Condensed Consolidated Financial Statements
Net cash provided by (used in) operating activities		(30,000)
Net cash provided by financing activities		30,000
Other Corrections
Impact of Restatement on the Condensed Consolidated Financial Statements
Net cash provided by (used in) operating activities	2,408	(1,497)
Net cash (used in) provided by investing activities	(3,061)	$ 1,497
Net change in cash and cash equivalents	$ (653)

Restatement of Financial Stat38

Restatement of Financial Statements - Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014	Dec. 31, 2013
Impact of Restatement on the Condensed Consolidated Financial Statements
Cash and cash equivalents	$ 25,641	$ 36,396	$ 37,780	$ 32,980
Marketable securities	32,061	37,940	34,783
Accrued expenses	21,654	17,656	13,112
Non-recourse liability related to sale of future royalties- current portion	261
Total current liabilities	43,690	28,123	22,126
Non-recourse liability related to sale of future royalties-long term	30,287	30,025	30,127
Total liabilities	88,054	96,085	89,568
Additional paid-in capital	261,006	230,263	229,225
Accumulated deficit	(182,361)	(189,453)	(193,241)
Total stockholders' equity	78,587	40,699	35,992
As Previously Reported
Impact of Restatement on the Condensed Consolidated Financial Statements
Cash and cash equivalents	26,294
Marketable securities	31,408
Accrued expenses	21,353	17,026
Total current liabilities	43,128	27,493
Total liabilities	57,205	65,430	60,206
Additional paid-in capital		230,122	229,123
Accumulated deficit	(151,512)	(158,657)	(163,012)
Total stockholders' equity	109,436	71,354	66,119
Restatement Adjustments
Impact of Restatement on the Condensed Consolidated Financial Statements
Non-recourse liability related to sale of future royalties- current portion	261
Total current liabilities	261
Non-recourse liability related to sale of future royalties-long term	30,287	30,025	30,127
Total liabilities	30,548	30,025	30,127
Accumulated deficit	(30,548)	(30,025)	(30,127)
Total stockholders' equity	(30,548)	(30,025)	(30,127)
Other Corrections
Impact of Restatement on the Condensed Consolidated Financial Statements
Cash and cash equivalents	(653)
Marketable securities	653
Accrued expenses	301	630
Total current liabilities	301	630
Total liabilities	301	630	(765)
Additional paid-in capital		141	102
Accumulated deficit	(301)	(771)	$ (102)
Total stockholders' equity	$ (301)	$ (630)

Summary of Significant Accoun39

Summary of Significant Accounting Policies (Details)	9 Months Ended
	Sep. 30, 2015segment
Basis of Presentation
Number of business segments	1

Summary of Significant Accoun40

Summary of Significant Accounting Policies (Details 2) - USD ($)	Sep. 30, 2015	Dec. 31, 2014
SERP | Other Non-current Assets
Marketable Securities - Restricted
Marketable securities - restricted	$ 267,000	$ 305,000

Summary of Significant Accoun41

Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Accounts Receivable, net
Accounts receivable written off	$ 0	$ 0
Allowance for expected prompt-pay discounts	$ 4.7		$ 4.1

Summary of Significant Accoun42

Summary of Significant Accounting Policies (Details 4) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Revenue Recognition on Product Sales
Increase in net product sales	$ 38,551,000	$ 22,452,000	$ 100,914,000	$ 59,056,000
Increase in cost of product sales	2,248,000	1,321,000	5,628,000	3,476,000
Reduction in net revenues	39,362,000	22,687,000	103,778,000	61,443,000
Accrued sales deductions	18,820,000	7,298,000	18,820,000	7,298,000	$ 8,461,000
Royalty Revenue [Abstract]
Non-recourse liability related to sale of future royalties		30,000,000		30,000,000
Royalty revenue	776,000	199,000	2,007,000	199,000
Non-cash interest expense/income on liability related to sale of future royalties	998,000	326,000	$ 2,530,000	326,000
Sales return period prior to expiry date			6 months
Sales return period subsequent to expiry date			12 months
Milestone revenues recorded	0	0	$ 750,000	2,000,000
Sales deductions
Revenue Recognition on Product Sales
Increase in net product sales		7,900,000		7,900,000
Increase in cost of product sales		$ 500,000		$ 500,000
Reduction in net revenues	$ (2,900,000)		$ (2,900,000)

Summary of Significant Accoun43

Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Simplifying the Presentation of Debt Issuance Costs
Assets	$ 166,641,000	$ 136,784,000	$ 125,560,000
Liabilities	88,054,000	96,085,000	89,568,000
Retrospective basis | Accounting Standards Update ("ASU") 2015-03 - Simplifying the Presentation of Debt Issuance Costs
Simplifying the Presentation of Debt Issuance Costs
Assets	(129,000)	(724,000)	(765,000)
Liabilities	$ (129,000)	$ (724,000)	$ (765,000)

Fair Value of Financial Instr44

Fair Value of Financial Instruments (Details) - USD ($)	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Assets:
Marketable securities	$ 32,061,000	$ 37,940,000	$ 34,783,000
Long term marketable securities	43,967,000	19,816,000	15,763,000
Liabilities:
Derivative liabilities	1,156,000	6,564,000	7,258,000
Recurring
Assets:
Cash and cash equivalents	25,641,000	36,396,000	37,780,000
Marketable securities	32,061,000	37,940,000	34,783,000
Long term marketable securities	43,967,000	19,816,000	15,763,000
Marketable securities - restricted (SERP)	267,000	305,000	305,000
Total assets at fair value	101,936,000	94,457,000	88,631,000
Liabilities:
Derivative liabilities	1,156,000	6,564,000	7,258,000
Quoted Prices in Active Markets (Level 1) | Recurring
Assets:
Cash and cash equivalents	25,641,000	36,396,000	37,780,000
Marketable securities	653,000
Marketable securities - restricted (SERP)	267,000
Total assets at fair value	26,561,000	36,396,000	37,780,000
Significant Other Observable Inputs (Level 2) | Recurring
Assets:
Marketable securities	31,408,000	37,940,000	34,783,000
Long term marketable securities	43,967,000	19,816,000	15,763,000
Marketable securities - restricted (SERP)		305,000	305,000
Total assets at fair value	75,375,000	58,061,000	50,851,000
Significant Unobservable Inputs (Level 3) | Recurring
Liabilities:
Derivative liabilities	1,156,000	$ 6,564,000	$ 7,258,000
Warrants outstanding	$ 0

Fair Value of Financial Instr45

Fair Value of Financial Instruments (Details 2)	9 Months Ended
	Sep. 30, 2015$ / shares
Fair Value of Financial Instruments
Volatility (as a percent)	45.00%
Stock Price (in dollars per share)	$ 14.03
Credit Spread (as a percent)	18.51%
Term	1 year 7 months 6 days
Dividend Yield (as a percent)	0.00%
Interest rate (as a percent)	7.50%

Fair Value of Financial Instr46

Fair Value of Financial Instruments (Details 3) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Note Liability
Carrying value of the convertible notes	$ 7,939	$ 26,223	$ 25,732
Amount issued	9,700
Estimated fair value of the convertible notes	27,300
Significant Unobservable Inputs (Level 3) | Derivative Financial Instruments, Liabilities
Warrant and Interest Make-Whole Liability
Balance at the beginning of the period	6,564
Changes in fair value of derivative liabilities included in earnings	(66)
Reduction due to conversion of debt to equity	(4,690)
Cashless exercise of common stock warrants	(652)
Balance at the end of the period	$ 1,156

Fair Value of Financial Instr47

Fair Value of Financial Instruments (Details 4) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Fair Value of Financial Instruments
Corporate debt securities, Amortized Cost	$ 76,135	$ 57,910	$ 50,581
Corporate debt securities, Gross Unrealized Gains	23	4	14
Corporate debt securities, Gross Unrealized Losses	(130)	(158)	(49)
Corporate debt securities, Fair Value	76,028	57,756	50,546
Contractual maturities of the unrestricted marketable securities held
Less Than 1 Year	32,061
1-5 years	43,967
Corporate debt securities, Fair Value	$ 76,028	$ 57,756	$ 50,546

Inventories (Details)

Inventories (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Inventories
Raw materials	$ 3,604	$ 2,491	$ 4,502
Work in process	4,051	6,328	3,190
Finished goods	7,087	4,622	3,453
Total inventories	$ 14,742	$ 13,441	$ 11,145

Property and Equipment (Details

Property and Equipment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Property and equipment
Property and equipment, gross	$ 9,978,000	$ 8,620,000	$ 9,978,000	$ 8,620,000	$ 8,738,000
Less accumulated depreciation and amortization	(6,768,000)	(6,120,000)	(6,768,000)	(6,120,000)	(6,290,000)
Property and equipment, net	3,210,000	2,500,000	3,210,000	2,500,000	2,448,000
Depreciation and amortization expense	162,000	184,000	478,000	529,000
Computer Equipment
Property and equipment
Property and equipment, gross	1,039,000	858,000	1,039,000	858,000	862,000
Software
Property and equipment
Property and equipment, gross	663,000	225,000	663,000	225,000	254,000
Lab Equipment and Furniture
Property and equipment
Property and equipment, gross	5,634,000	5,114,000	5,634,000	5,114,000	5,194,000
Leasehold Improvements
Property and equipment
Property and equipment, gross	$ 2,642,000	$ 2,423,000	$ 2,642,000	$ 2,423,000	$ 2,428,000

Intangible Assets and Deferre50

Intangible Assets and Deferred Legal Fees (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)patent	Sep. 30, 2014USD ($)	Dec. 31, 2015USD ($)	Dec. 31, 2014USD ($)
Additional disclosures
Net book value of intangible assets	$ 16,627,000	$ 4,135,000	$ 16,627,000	$ 4,135,000		$ 5,434,000
Purchased Patents
Finite lived intangible assets disclosures
Weighted-Average Life			10 years			10 years
Gross Carrying Amount	2,292,000	2,292,000	$ 2,292,000	2,292,000		$ 2,292,000
Accumulated Amortization	2,240,000	2,010,000	2,240,000	2,010,000		2,067,000
Additional disclosures
Amortization expense	57,000	57,000	$ 172,000	172,000
Oxtellar XR
Finite lived intangible assets disclosures
Number of U.S. patents issued | patent			5
Trokendi XR
Finite lived intangible assets disclosures
Number of U.S. patents issued | patent			6
Deferred Legal Fees
Finite lived intangible assets disclosures
Gross Carrying Amount	$ 16,575,000	$ 3,853,000	$ 16,575,000	$ 3,853,000		$ 5,209,000
Forecast
Additional disclosures
Amortization expense					$ 229,000

Accrued Expenses (Details)

Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2014
Accrued Expenses
Accrued compensation	$ 7,711	$ 5,784	$ 5,011
Accrued professional fees	7,309	2,049	2,051
Accrued clinical trial and clinical supply costs	1,693	2,942	877
Accrued sales and marketing expenses	1,007	1,017	807
Accrued product costs	966	3,014	1,909
Accrued interest expense	492	639	1,292
Other accrued expenses	2,476	2,211	1,165
Total	$ 21,654	$ 17,656	$ 13,112

Convertible Senior Secured No52

Convertible Senior Secured Notes (Details) - USD ($) $ in Thousands, shares in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Details of Notes reflected in balance sheet
Amortization of deferred financing costs and debt discount			$ 646	$ 1,599
Carrying value	$ 7,939	$ 25,732	7,939	25,732	$ 26,223
Loss on extinguishment of debt	25	$ 860	2,400	2,592
7.50% Convertible Senior Secured Notes due 2019
Details of Notes reflected in balance sheet
Gross proceeds					90,000
Initial value of interest make-whole derivative reported as debt discount					(9,270)
Conversion option reported as debt discount and APIC					(22,336)
Conversion of debt to equity - principal			(26,335)	(13,400)	(53,941)
Conversion of debt to equity - accretion of debt discount	6,863		6,863		17,926
Amortization of deferred financing costs and debt discount			1,188		3,844
Carrying value	$ 7,939		$ 7,939		$ 26,223
Shares of common stock issued in conversion of Notes			5
Shares of common stock issued in settlement of the interest make-whole provision			0.5
Loss on extinguishment of debt			$ 2,400	$ 2,600

Summary Stockholders' Equity (D

Summary Stockholders' Equity (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015USD ($)
Balance at the beginning	$ 40,699
Balance at the ending	78,587
Common Stock
Balance at the beginning	43
Equity issued on note conversion	6
Balance at the ending	49
Additional Paid-in Capital
Balance at the beginning	230,263
Share-based compensation	3,011
Issuance of ESPP shares	324
Exercise of stock options	743
Equity issued on note conversion	26,013
Exercise of warrants	652
Balance at the ending	$ 261,006

Share-Based Payments (Details)

Share-Based Payments (Details) - 2012 Plan	9 Months Ended
	Sep. 30, 2015installmentshares
Share-based payments
Maximum number of shares of common stock provided for issuance | shares	4,000,000
Director
Share-based payments
Vesting period	1 year
Stock Option
Share-based payments
Number of annual installments in which the awards would generally vest starting on the first anniversary of the date of grant | installment	4
Contractual term	10 years

Share-Based Payments (Details 2

Share-Based Payments (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Share-based Payments
Share-based compensation recognized	$ 1,132	$ 806	$ 3,011	$ 2,125
Research and Development
Share-based Payments
Share-based compensation recognized	236	196	646	559
Selling, General and Administrative
Share-based Payments
Share-based compensation recognized	$ 896	$ 610	$ 2,365	$ 1,566

Share-Based Payments (Details 3

Share-Based Payments (Details 3) - Stock Option Stock Appreciation Rights - $ / shares	9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Dec. 31, 2013
Number of Options and SAR
Outstanding at the beginning of the period (in shares)	2,080,749	1,463,043	1,463,043
Granted (in shares)	950,800	672,185
Exercised (in shares)	(177,270)	(14,814)
Forfeited or expired (in shares)	(127,965)	(40,620)
Outstanding at the end of the period (in shares)	2,726,314	2,079,794	2,080,749	1,463,043
Vested and expected to vest (in shares)	2,672,876	2,032,896	2,041,026	1,425,752
Exercisable (in shares)	879,346	546,672	626,548	256,227
Weighted-Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 7.93	$ 7.27	$ 7.27
Granted (in dollars per share)	10.06	9.21
Exercised (in dollars per share)	4.19	2.95
Forfeited or expired (in dollars per share)	8.56	7.56
Outstanding at the end of the period (in dollars per share)	8.89	7.93	7.93	$ 7.27
Vested and expected to vest (in dollars per share)	8.87	7.91	7.91	7.26
Exercisable (in dollars per share)	$ 7.96	$ 6.55	$ 6.40	$ 4.47
Weighted-Average Remaining Contractual Term (in years)
Outstanding at the end of the period	8 years 1 month 21 days	8 years 3 months 11 days	8 years 15 days	8 years 6 months 4 days
Vested and expected to vest	8 years 1 month 17 days	8 years 3 months 7 days	8 years 11 days	8 years 6 months
Exercisable	7 years 1 month 17 days	7 years 2 months 5 days	6 years 10 months 28 days	6 years 5 months 9 days

Earnings per Share (Details)

Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Numerator, in thousands
Net income used for calculation of basic EPS	$ 3,916	$ (2,371)	$ 7,092	$ (14,713)
Interest expense on convertible debt	292		1,004
Change in fair value of derivative liabilities	(174)		(462)
Loss on extinguishment of outstanding debt, as if converted	32		(94)
Total adjustments	150		448
Net income used for calculation of diluted EPS	$ 4,066	$ (2,371)	$ 7,540	$ (14,713)
Denominator
Weighted average shares outstanding, basic	48,515,071	42,900,269	47,011,243	42,035,025
Effect of dilutive potential common shares
Shares underlying Convertible Senior Secured Notes	1,961,410		3,703,320
Shares issuable to settle interest make-whole derivatives	98,879
Stock options, stock appreciation rights, and non-vested stock options and ESPP awards	1,015,437		344,903
Total potential dilutive common shares	3,075,726		4,048,223
Weighted average shares outstanding, diluted	51,590,797	42,900,269	51,059,466	42,035,025
Net income per share, basic	$ 0.08	$ (0.06)	$ 0.15	$ (0.35)
Net income per share, diluted	$ 0.08	$ (0.06)	$ 0.15	$ (0.35)
Warrant to purchase common stock
Loss Per Share
Common stock equivalents excluded in the calculation of diluted loss per share	40,850	20,857	38,424	20,905
Stock options, stock appreciation rights, non-vested stock options and ESSP awards
Loss Per Share
Common stock equivalents excluded in the calculation of diluted loss per share	39,289	327,966	13,240	326,916
7.50% Convertible Senior Secured Notes due 2019
Loss Per Share
Common stock equivalents excluded in the calculation of diluted loss per share		7,576,541		7,995,340

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Taxes
Pre-tax income	$ 4,058	$ (2,371)	$ 7,545	$ (14,713)
Income tax expense	$ 142		$ 453

Commitments and Contingencies59

Commitments and Contingencies (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Commitments and Contingencies
Additional period for which the entity may elect to extend the term of the lease			5 years
Additional tenant improvement allowance			$ 2,100
Tenant improvement allowance utilized and included in fixed assets and deferred rent	$ 107,000	$ 7,000	215,000	$ 90,000
Amount available for tenant improvements			500
Rent expense	700	$ 700	2,000	$ 1,600
Future minimum lease payments under non-cancelable operating leases
2015 (remaining)	449		449
2,016	1,451		1,451
2,017	1,290		1,290
2,018	1,314		1,314
Thereafter	1,795		1,795
Total	$ 6,299		$ 6,299

Collaboration Agreements (Detai

Collaboration Agreements (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Collaboration agreement
Revenue	$ 38,551	$ 22,452	$ 100,914	$ 59,056
Payables	2,812	1,573	2,812	1,573	$ 1,863
United Therapeutics
Collaboration agreement
Commercial milestone payments received	3,500		3,500
Revenue From Royalty Agreement					30,000
Revenue	0	$ 2,000	0	2,000
Receivables	0		0		0
Payables	0		0		0
Stendhal License
Collaboration agreement
Amount received to be recognized as revenue on a straight-line basis	2,300		2,300
Future milestone payment to be received, based on certain milestones defined in the license agreement	1,500		1,500
Collaborative Arrangement | Stendhal License
Collaboration agreement
Revenue			100	$ 200
Amount received to be recognized as revenue on a straight-line basis	1,800		$ 1,800
Collaboration agreement substantive obligation period			12 years
Deferred revenue	1,300		$ 1,300		$ 1,400
Deferred revenue current	100		100
Deferred revenue Non-current	1,200		1,200
Future milestone payment to be received, based on certain milestones defined in the license agreement	1,800		1,800
Combined amount of milestone and product receivables	$ 800		$ 800

Subsequent Events (Details)

Subsequent Events (Details) - 7.50% Convertible Senior Secured Notes due 2019 - USD ($) $ in Thousands	1 Months Ended	9 Months Ended		12 Months Ended
	Nov. 09, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Subsequent events
Principal amount of the Notes converted		$ 26,335	$ 13,400	$ 53,941
Shares of common stock issued in conversion of Notes and accrued interest thereon		5,000,000
Shares of common stock issued in settlement of the interest make-whole provision		500,000
Subsequent Event
Subsequent events
Principal amount of the Notes converted	$ 1,200
Shares of common stock issued in conversion of Notes and accrued interest thereon	200,000
Shares of common stock issued in settlement of the interest make-whole provision	13,000