Osiris Therapeutics 10-Q 16 Nov 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 13, 2015
Document and Entity Information
Entity Registrant Name	OSIRIS THERAPEUTICS, INC.
Entity Central Index Key	1,360,886
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		34,452,640
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash	$ 15,799	$ 2,208
Investments available for sale	24,452	37,305
Trading securities	3,090	10,591
Trade accounts receivable, net of reserves	37,857	23,235
Other receivables	562	9,951
Inventory	15,818	11,160
Prepaids and other current assets	1,167	650
Total current assets	98,745	95,100
Property and equipment, net	2,180	2,087
Other assets	95	95
Total assets	101,020	97,282
Current liabilities:
Accounts payable and accrued expenses	9,579	8,854
Capital lease obligations, current portion	45	45
Dividends payable	6,890
Deferred commissions payable, current portion	1,667	1,667
Total current liabilities	18,181	10,566
Other long-term liabilities	2,995	3,589
Total liabilities	$ 21,176	$ 14,155
Commitments and contingencies
Stockholders' equity
Common stock, $.001 par value, 90,000 shares authorized, 34,453 shares outstanding - 2015, 34,346 shares outstanding - 2014	$ 35	$ 35
Additional paid-in-capital	283,964	287,525
Accumulated other comprehensive loss	(94)	(54)
Accumulated deficit	(204,061)	(204,379)
Total stockholders' equity	79,844	83,127
Total liabilities and stockholders' equity	$ 101,020	$ 97,282

CONDENSED BALANCE SHEETS (Paren

CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Sep. 30, 2015	Dec. 31, 2014
CONDENSED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	90,000	90,000
Common stock, shares outstanding	34,453	34,346

CONDENSED STATEMENTS OF COMPREH

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Product revenues	$ 25,331,000	$ 17,204,000	$ 67,277,000	$ 40,548,000
Cost of product revenues	5,390,000	3,785,000	14,822,000	8,921,000
Gross profit	19,941,000	13,419,000	52,455,000	31,627,000
Operating expenses:
Research and development	2,306,000	1,207,000	6,233,000	2,932,000
Selling, general and administrative	17,325,000	10,993,000	44,090,000	28,153,000
Total operating expenses	19,631,000	12,200,000	50,323,000	31,085,000
Income from operations of continuing operations	310,000	1,219,000	2,132,000	542,000
Other expense, net	(1,100,000)	(405,000)	(1,156,000)	(1,763,000)
Income (loss) from continuing operations, before income taxes	(790,000)	814,000	976,000	(1,221,000)
Income tax benefit (expense)	132,000	(104,000)	(354,000)	(104,000)
Income (loss) from continuing operations	(658,000)	710,000	622,000	(1,325,000)
Discontinued operations:
Loss from operations of discontinued operations, net of income taxes of $75 and $672, for the three and nine months ended September 30, 2014, respectively		(65,000)		(1,280,000)
Loss from discontinued operations		(65,000)		(1,280,000)
Net income (loss)	(658,000)	645,000	622,000	(2,605,000)
Other comprehensive income (loss)
Unrealized gain (loss) on investments available for sale	108,000	(30,000)	(40,000)	75,000
Comprehensive income (loss)	$ (550,000)	$ 615,000	$ 582,000	$ (2,530,000)
Basic income (loss) per share
Income (loss) from continuing operations (in dollars per share)	$ (0.02)	$ 0.02	$ 0.02	$ (0.04)
Loss from discontinued operations (in dollars per share)				(0.04)
Basic income (loss) per share (in dollars per share)	(0.02)	0.02	0.02	(0.08)
Diluted income (loss) per share
Income (loss) from continuing operations (in dollars per share)	(0.02)	0.02	0.02	(0.04)
Loss from discontinued operations (in dollars per share)				(0.04)
Diluted income (loss) per share (in dollars per share)	$ (0.02)	$ 0.02	$ 0.02	$ (0.08)
Weighted average common shares basic (in shares)	34,444	34,314	34,404	34,243
Weighted average common shares diluted (in shares)	34,444	34,662	34,900	34,243
Dividends declared per common share	$ 0.20		$ 0.20

CONDENSED STATEMENTS OF COMPRE5

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2014
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Income tax expense	$ 75	$ 672

CONDENSED STATEMENTS OF CHANGES

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Accumulated Deficit	Total
Balance at Dec. 31, 2014	$ 35	$ 287,525	$ (54)	$ (204,379)	$ 83,127
Balance (in shares) at Dec. 31, 2014	34,345,688				34,346,000
Increase (Decrease) in Stockholders' Equity
Net income					$ 485
Balance at Mar. 31, 2015					84,179
Balance at Dec. 31, 2014	$ 35	287,525	(54)	(204,379)	$ 83,127
Balance (in shares) at Dec. 31, 2014	34,345,688				34,346,000
Increase (Decrease) in Stockholders' Equity
Net income					$ 1,280
Balance at Jun. 30, 2015					85,560
Balance at Dec. 31, 2014	$ 35	287,525	(54)	(204,379)	$ 83,127
Balance (in shares) at Dec. 31, 2014	34,345,688				34,346,000
Increase (Decrease) in Stockholders' Equity
Dividends declared		(6,890)			$ (6,890)
Exercise of options to purchase common stock ($.40- $16.24 per share)		1,061			1,061
Exercise of options to purchase common stock (in shares)	136,065
Repurchase and retirement of common stock (in shares)	(29,113)
Repurchase and retirement of common stock		(250)		(304)	(554)
Share-based compensation-employees		2,381			2,381
Net income				622	622
Unrealized loss on investments available for sale			(40)		(40)
Windfall tax benefit from stock-based compensation		137			137
Balance at Sep. 30, 2015	$ 35	283,964	(94)	(204,061)	$ 79,844
Balance (in shares) at Sep. 30, 2015	34,452,640				34,453,000
Balance at Mar. 31, 2015					$ 84,179
Increase (Decrease) in Stockholders' Equity
Net income					795
Balance at Jun. 30, 2015					85,560
Increase (Decrease) in Stockholders' Equity
Net income					(658)
Unrealized loss on investments available for sale					108
Balance at Sep. 30, 2015	$ 35	$ 283,964	$ (94)	$ (204,061)	$ 79,844
Balance (in shares) at Sep. 30, 2015	34,452,640				34,453,000

CONDENSED STATEMENTS OF CHANGE7

CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical)	9 Months Ended
	Sep. 30, 2015$ / shares
CONDENSED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
Exercise of options to purchase common stock, per share, low end of range	$ 0.40
Exercise of options to purchase common stock, per share, high end of range	$ 16.24

CONDENSED STATEMENTS OF CASH FL

CONDENSED STATEMENTS OF CASH FLOWS - USD ($)	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash flows from operating activities:
Income (loss) from continuing operations	$ 622,000	$ (1,325,000)
Adjustments to reconcile income (loss) from continuing operations to net cash used in operations of continuing operations:
Net realized and unrealized loss on trading securities	1,192,000	2,026,000
Net realized loss (gain) on investments available for sale	356,000	(120,000)
Depreciation and amortization	850,000	685,000
Non cash share-based payments	2,381,000	2,184,000
Provision for bad debts	150,000	250,000
Changes in operating assets and liabilities:
Accounts receivable	(14,772,000)	(14,237,000)
Inventory	(4,658,000)	(6,911,000)
Other receivables	4,980,000	(343,000)
Prepaid expenses, and other current assets	(517,000)	(45,000)
Accounts payable, accrued expenses, and other liabilities	165,000	4,434,000
Net cash used in operating activities of continuing operations	(9,251,000)	(13,402,000)
Discontinued operations
Loss from discontinued operations		(1,280,000)
Changes in operating assets and liabilities:
Accounts receivable and other current assets		91,000
Accounts payable and accrued expenses		(57,000)
Net cash used in operations of discontinued operations		(1,246,000)
Net cash used in operating activities	(9,251,000)	(14,648,000)
Cash flows from investing activities:
Purchases of property and equipment	(943,000)	(801,000)
Proceeds from sale of discontinued operations, net		15,000,000
Proceeds from sale of trading securities	4,520,000
Proceeds from sale of investments available for sale	142,438,000	10,354,000
Purchases of investments available for sale	(129,981,000)	(13,000,000)
Guaranteed payment related to trading securities	6,198,000
Net cash provided by investing activities	22,232,000	11,553,000
Cash flows from financing activities:
Principal payments on capital lease obligations	(34,000)	(34,000)
Restricted cash		147,000
Proceeds from the exercise of options to purchase common stock	1,061,000	1,441,000
Common stock repurchased and retired	(554,000)
Windfall benefit from stock-based compensation	137,000	71,000
Net cash provided by financing activities	610,000	1,625,000
Net increase (decrease) in cash	13,591,000	(1,470,000)
Cash at beginning of period	2,208,000	2,416,000
Cash at end of period	15,799,000	$ 946,000
Supplemental disclosure of cash flows information:
Cash paid for income taxes	2,424,000
Supplemental disclosure of non cash activities:
Cash dividends declared	$ 6,890,000

Description of Business and Sig

Description of Business and Significant Accounting Policies	9 Months Ended
	Sep. 30, 2015
Description of Business and Significant Accounting Policies
Description of Business and Significant Accounting Policies	1. Description of Business and Significant Accounting Policie s Description of Business Osiris Therapeutics, Inc. ("we," "us," "our," or the "Company") is a Maryland corporation headquartered in Columbia, Maryland. We began operations on December 23, 1992 and were a Delaware corporation until, with approval of our stockholders, we reincorporated as a Maryland corporation on May 31, 2010. We are a leading cellular regenerative medicine company focused on researching, developing and marketing products in the wound, orthopaedic, and sports medicine markets. From 2010 to 2013, we operated our business in two segments, Biosurgery and Therapeutics. We now operate only our Biosurgery business, as a result of the sale of our Therapeutics segment assets in the fourth quarter of 2013, as discussed further below. Our Biosurgery business focuses on products for wound care, orthopaedic, and sports medicine to harness the ability of cells and novel constructs to promote the body's natural healing. Until it was sold, our Therapeutics business focused on developing biologic stem cell drug candidates from a readily available and non-controversial source—adult bone marrow. Our Biosurgery business has continued to grow since its inception, and we have increased our organizational focus on the development and commercialization of products in this segment. Consistent with this organizational focus, as discussed further in Note 2— Discontinued Operations below, on October 10, 2013, we entered into a Purchase Agreement to sell our Therapeutics segment, including all of our culture expanded mesenchymal stem cell business, including Prochymal® and other related assets. We eliminated the Therapeutics segment from our continuing operations as a result of the disposal transaction, and have presented the assets, liabilities, and results of the segment's operations as a discontinued operation for all periods presented. Our continuing operations now represent the portion of our business previously referred to as our Biosurgery segment. Unaudited Interim Financial Statements Except for the Balance Sheet as of December 31, 2014, which was derived from audited financial statements, the accompanying condensed financial statements are unaudited. The accompanying condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, these statements include all adjustments (consisting of normal recurring adjustments) considered necessary to present a fair statement of our results of operations, financial position and cash flows. Operating results for any interim period are not necessarily indicative of the results that may be expected for the full year. This Quarterly Report on Form 10-Q should be read in conjunction with our financial statements and footnotes included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014. Correction of Prior Period Financial Statements In connection with preparing the Company’s financial statements for the quarter ended September 30, 2015, the Company reviewed the timing of revenue recognition under contracts with its distributors. As a result of this review, the Company determined to correct the revenue recognition for three contracts which will result in a decrease in product revenues of $1.8 million in the first quarter of 2015, a decrease in product revenue of $1.0 million in the second quarter, an increase in product revenues of $0.8 million in the third quarter of 2015 and a decrease in product revenues of $1.1 million in 2014. Background Under US GAAP, revenue is generally recognized when persuasive evidence of an arrangement exists, delivery has occurred, the price is fixed and determinable, a nd collectability is probable. The Company previously recognized revenue under these three distributor contracts which was reflected in the Company’s audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2014 and its unaudited financial statements in its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2015 and June 30, 2015. Upon subsequent review in connection with the Company’s review of its third quarter 2015 financial statements, the Company determined, in consultation with its independent registered public accounting firm, that the transaction s did not meet certain conditions for revenue recognition in the fourth quarter of 2014, and the first and second quarters of 2015. Specifically to the transaction in the fourth quarter of 2014, the Company determined that the persuasive evidence of an arrangement was not met until January 2015 and the price was not fixed and determinable in the quarter that the revenues were previously recognized . As a result, the Company is required to account for the contract with this distributor under the cash basis of accounting, which means that revenues are recognized when cash receipts are actually received. Correcting this revenue recognition error in one contract will result in an increase in product revenues of approximately $0.8 million , net of cost of sales, in the third quarter of 2015 and a decrease in product revenues of approximately $1.1 million , net of cost of sales, in 2014. The approximate $0.3 million difference between the $0.8 million increase in product revenues for the third quarter of 2015 and the $1.1 million decrease in product revenues in 2014 will not be included as an accounts receivable as of the end of the third quarter of 2015, but will be recorded as product revenue in future periods when and if such amounts are actually received. The Company also sold product to the same distributor during the first quarter of 2015. The Company is also recognizing this sale on the cash-basis of accounting. Correcting this revenue recognition error will result in a decrease in product revenues of approximately $0.8 million, net of cost of sales, in the first quarter of 2015. The $0.8 million of accounts receivable will not be included as an accounts receivable as of the end of the first quarter of 2015, but will be recorded as product revenue in future periods when and if such amounts are actually received. Also during the first quarter of 2015, the C ompany recognized a $0.7 million sale , net of cost of sales, to a distributor that ordered products for sale outside of the United States. During its review of all distributor contracts undertaken during the third quarter 2015 period close process, the Company also dete rmined that revenue recognition of this first quarter 2015 transaction is appropriate in a future period when the distributor achieves full regulatory approval in the country where they will be selling the product. This determination was made because the distributor has the right to return the product if regulatory approval is not achieved. During the third quarter of 2015, the C ompany received true-up information from a nother distributor which showed the average price for product sales during the year. This distributor first sold product for the C ompany during the first quarter 2015. The distributor has the right to sell the product at any price, as long as it sell above a set minimum price. The impact of this price adjustment was $0.3 million revenue reduction during the first quarter 2015 and $1.0 million reduction during the second quarter 2015. The revenue adjustment was offset by a reduction in costs of goods sold, commissions and fees for that revenue. This adjustment was preliminarily recorded during the third quarter of 2015 but a determination was made to adjust previous quarters to reflect the proper impact of the adjustment to previously reported periods. Materiality Assessment The Company evaluated the effect of the adjustment in accordance with the Securities and Exchange Commission (“SEC”) Staff Accounting Bulletin No. 99 (SAB 99) and SEC Staff Accounting Bulletin No. 108, "Effects of Prior Year Misstatements on Current Year Financial Statements" (SAB 108) and determined the cumulative impact of the adjustment was not material to our previously issued annual audited financial statements for the year ended December 31, 2014 and therefore, amendments of our previously filed 2014 Form 10-K is not required. We restated previously reported results for the three months ended December 31, 2014 and the year ended December 31, 2014 in this Quarterly Report on Form 10-Q for the quarter ended September 30,2015 . The accompanying condensed financial statements as of September 30, 2015 reflect the aforementioned immaterial correction s . The following tables present the effects of the corrections on the Company’s financial statements for December 31, 2014: As Previously Reported Q1 2014 Q2 2014 Q3 2014 Q4 2014 2014 Product revenues $ $ $ $ $ Cost of product revenue Gross profit Income (loss) from continuing operations Net income (loss) Diluted income (loss) per share $ $ $ $ $ Trade accounts receivable, net $ Inventory $ Total stockholders' equity $ Adjustments Q1 2014 Q2 2014 Q3 2014 Q4 2014 2014 Product revenues $ — $ — $ — $ $ Cost of product revenue — — — Gross profit — — — Income (loss) from continuing operations — — — Net income (loss) — — — Diluted income (loss) per share $ — $ — $ — $ $ Trade accounts receivable, net $ $ Inventory $ $ Total stockholders' equity $ $ Restated Q1 2014 Q2 2014 Q3 2014 Q4 2014 2014 Product revenues $ $ $ $ $ Cost of product revenue Gross profit Income (loss) from continuing operations Net income (loss) Diluted income (loss) per share $ $ $ $ $ Trade accounts receivable, net $ Inventory $ Total stockholders' equity $ Percentage Change Q1 2014 Q2 2014 Q3 2014 Q4 2014 2014 Product revenues % % % % % Cost of product revenue % % % % % Gross profit % % % % % Income (loss) from continuing operations % % % % % Net income (loss) % % % % % Diluted income (loss) per share % % % % % Trade accounts receivable, net % Inventory % Total stockholders' equity % The following tables present the effects of the corrections on the Company’s financial statements for each quarter during 2015: As Previously Reported Q1 2015 Q2 2015 2015 Product revenues $ $ $ Cost of product revenue Gross profit Selling, general, and administrative expenses Income taxes expense Income (loss) from continuing operations Net income (loss) Diluted income (loss) per share $ $ $ Trade accounts receivable, net $ $ Inventory $ $ Total liabilities $ $ Total stockholders' equity $ $ Adjustments Q1 2015 Q2 2015 2015 Product revenues $ $ $ Cost of product revenue — Gross profit Selling, general, and administrative expenses Income taxes expense Income (loss) from continuing operations Net income (loss) Diluted income (loss) per share $ $ $ Trade accounts receivable, net $ $ Inventory $ $ Total liabilities $ $ Total stockholders' equity $ $ Restated Q1 2015 Q2 2015 2015 Product revenues $ $ $ Cost of product revenue Gross profit Selling, general, and administrative expenses Income taxes expense Income (loss) from continuing operations Net income (loss) Diluted income (loss) per share $ $ $ Trade accounts receivable, net $ $ Inventory $ $ Total liabilities $ $ Total stockholders' equity $ $ Percentage Change Q1 2015 Q2 2015 2015 Product revenues % % % Cost of product revenue % % % Gross profit % % % Selling, general, and administrative expenses % % % Income taxes expense % % % Income (loss) from continuing operations % % % Net income (loss) % % % Diluted income (loss) per share % % % Trade accounts receivable, net % % Inventory % % Total liabilities % % Total stockholders' equity % % Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Due to the inherent uncertainty involved in making those assumptions, actual results could differ from those estimates. We believe that the most significant estimates that affect our financial statements are those that relate to deferred tax assets, inventory valuation, allowance for doubtful accounts, and share-based compensation. Reclassifications We have reclassified certain prior-year amounts for comparative purposes. These reclassifications did not affect our results of operations or financial positions for the periods presented. Cash and Cash Equivalents Amounts listed as cash on our balance sheets are maintained in depository accounts at commercial banks, which include $2.2 million denominated in Australian dollars from the sale of our Mesoblast shares. Cash and cash equivalents, which include highly liquid investments with maturities of three months or less when purchased, held in our brokerage investment accounts are classified as investments available for sale, as the amounts represent investments that have matured and are anticipated to be reinvested in debt securities in the near future, and are disclosed at fair value, which approximates cost. Investments Available for Sale Investments available for sale consist primarily of marketable securities with maturities less than one year. Investments available for sale are valued at their fair value, with unrealized gains and losses reported as a separate component of stockholders' equity in accumulated other comprehensive income (loss). All realized gains and losses on our investments available for sale are recognized in results of operations as other income (expense). Investments available for sale are evaluated periodically to determine whether a decline in their value is "other than temporary." The term "other than temporary" is not intended to indicate a permanent decline in value. Rather, it means that the prospects for near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the security. We review criteria such as the magnitude and duration of the decline, as well as the reasons for the decline, to predict whether the loss in value is other than temporary. If a decline in value is determined to be other than temporary, the carrying value of the security is reduced and a corresponding charge to earnings is recognized. Trading Securities - Derivative and Securities Received in Business Disposition As discussed in Note 2 – Discontinued Operations , we disposed of our Therapeutics segment in October 2013. A portion of the consideration for the sale of that business was stock of Mesoblast Limited (“Mesoblast”), the parent of the purchaser. We were required to hold that stock for one year from the date of receipt. Mesoblast is a public company and its stock is traded on the Australian stock exchange. The Mesoblast stock was previously subject to limited price protection for the one year required holding period. To the extent the value of those shares decreased during the holding period, Mesoblast was required to pay us for the decrease in value. This payment was to be made at least one half in cash and at the option of Mesoblast, up to one half in additional shares of Mesoblast stock. Any additional Mesoblast stock would also have to be held for one year during which period there was no further price protection. The price protection was accounted for as a derivative under ASC 815, Derivatives and Hedging , and, as such was recorded on the balance sheets at fair value, with changes recognized in net income. We elected to measure the Mesoblast stock at fair value with changes in fair value reflected in net income, as permitted under ASC 825-10, Financial Instruments — Fair Value Option . In December 2014, the price protection on these shares expired and we extended the restriction period to May 2015 in exchange for Mesoblast paying us the difference between the prevailing market value of the Mesoblast stock and $ 15 million in cash, thereby eliminating the derivative. As of December 31, 2014, this $15 million was shown as $10.6 million in Trading Securities and $4.4 million in Other Receivables on our Balance Sheets. In June 2015, we received $6.2 million in cash from Mesoblast for the difference between the market value of the Mesoblast stock and the $15 million agreed to be paid to us by Mesoblast. Also in June 2015, we began selling the shares of Mesoblast stock through a stockbroker in Australia. As of September 30, 2015, we sold 1,557,551 shares of Mesoblast stock and realized a loss of $13,000 . As of September 30, 2015, the market value of the remaining 1,391,178 shares of Mesoblast stock held by us was $3.1 million. For the three and nine months ended September 30, 2015, we recognized an unrealized loss on the value of the Mesoblast stock of $933,000 and $1.2 million, respectively, as a component of Other Expense, Net. We expect to sell all of the Mesoblast shares by the end of this fiscal year. Trade Accounts Receivable Trade accounts receivable are reported at their net realizable value. We charge off uncollectible receivables when the likelihood of collection is remote. We set credit terms with individual customers, and consider receivables outstanding longer than the time specified in the respective customer's contract, typically 45 -days, to be past due. As of September 30, 2015 and December 31, 2014, accounts receivable in the accompanying balance sheets is each reported net of $411,000 and $1.3 million allowance for doubtful accounts, respectively. During the nine months ended September 30, 2015, we entered into a settlement agreement with a former customer and wrote off $995,000 of accounts receivable against the allowance for doubtful accounts. This amount was fully reserved as of December 31, 2014. Trade accounts receivable balances are not collateralized. We incurred $150,000 of bad debt expense during the three months and nine months period ended September 30, 2015. We incurred $200,000 and $250,000 of bad debt expense during the three months and nine months period ended September 30, 2014, respectively. Other Receivables Other receivables at December 31, 2014 included the $5.0 million fee payable from Stryker, as further described below, and the $4.4 million difference between the market value of the Mesoblast ordinary shares and the $15 million agreed to be paid to us by Mesoblast as described above under “Trading Securities.” The $5.0 million fee from Stryker was received in February 2015 and the true-up payment from Mesoblast was received in June 2015. Inventory We began carrying inventory of our Biosurgery products on our balance sheet following commercial launch of such products. Inventory consists of raw materials, biologic products in process, and products available for distribution. We determine our inventory values using the first-in, first-out method. Inventory is valued at the lower of cost or market, and excludes units that we anticipate distributing for clinical evaluation. Materials and supplies purchased for product development and product improvement activities are expensed as incurred. Property and Equipment Property and equipment, including improvements that extend useful lives, are valued at cost, while maintenance and repairs are charged to operations as incurred. Depreciation is calculated using the straight-line method based on estimated useful lives ranging from three to seven years for furniture, equipment and internal use software. Leasehold improvements and assets under capital leases are amortized over the shorter of the estimated useful life of the asset or the term of the lease. Valuation of Long-lived Assets We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. Assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of the cash flows generated by other asset groups. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized for the difference between the fair value and carrying value of assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of like risk. There were no impairment losses recognized during the first nine months of fiscal 2015 or during fiscal year 2014. Biosurgery Revenue Recognition We recognize revenue from product distribution when title passes to the customer. Title usually passes when the product is shipped to the customer and leaves our loading dock. On occasion, customers purchase product and request that the Company store the purchased product in segregated freezers at the Company’s facility. In those cases, title passes to the customer and the customer accepts all risks associated with the purchased product. Customers may request this service of the Company in instances where they want to ensure that supply of product is available to them and they do not have the capability to store the product themselves in special freezers at -80 degrees Celsius. In some situations, we store consigned inventory on site in freezers at hospital or clinic facilities. No revenue is recognized upon the placement of inventory into consignment as we retain title and maintain the inventory on our balance sheets. For these products, revenue is recognized when we receive appropriate notification that the product has been used in a surgical procedure. We verify the condition and status of all consigned inventory on at least a quarterly basis. Due to the nature of our products and the need to ensure they are maintained at the proper frozen temperature, we generally do not allow product returns. In December 2014, we entered into an exclusive distribution agreement with a subsidiary of Stryker Corporation for the marketing and distribution of BIO 4™ , our viable bone matrix allograft. Pursuant to the agreement, Stryker has been granted worldwide distribution rights to the product and any improvements, for all surgical applications. We are responsible for supply, processing, inventory management, shipments to customers, continued research and product improvement activities. The amount we recognized as revenue is based on our list prices for the allograft. We reconcile and record the difference, if any, between the revenue previously recognized and the selling price when we receive the data from Stryker on a monthly basis. Commissions and administrative fees paid to Stryker are accounted for as selling expenses, as Stryker is acting as outside sales and marketing agent for Osiris. We received an initial exclusivity fee of $5.0 million in the first nine months of fiscal 2015 and are entitled to receive additional fees upon any exercise by Stryker of its right to extend the initial term, whether on an exclusive or non-exclusive basis. The exclusivity fee and any extension fees subsequently received are considered to be adjustments of the selling expenses. As such, we recognize the exclusively fee as deferred revenue, which will be amortized over the related exclusivity period in proportion to the expected fees to be paid to Stryker, as an offset to selling expenses. We amortized $236,000 and $611,000 for the three and nine months ended September 30, 2015, respectively. At December 31, 2014, we recorded a $5.0 million receivable with the offset to short-term deferred commissions of $1.7 million and long-term deferred commissions of $3.3 million. At September 30, 2015, the short-term and long-term deferred commissions were $1.7 million and $2.7 million, respectively. In October 2014, we entered into an exclusive commercial and development partnership for our cartilage product, Cartiform®, with Arthrex, Inc. The agreement provides Arthrex with exclusive commercial distribution rights to Cartiform beginning in 2015. We are responsible for product processing, continued research and product improvement activities. The responsibilities related to the design and conduct of future clinical development programs are shared between both organizations. Pursuant to the agreement, Arthrex is entitled to a certain commission on Cartiform sales. We recognize the full sales price as revenue and account for the payment to Arthrex as commission expense. Research and Development Costs We expense internal and external research and development (“R&D”) costs, including costs of funded R&D arrangements and the processing and production of clinical batches of Biosurgery products used in clinical trials, in the period incurred. Income Taxes Deferred tax liabilities and assets are recognized for the estimated future tax consequences of temporary differences, income tax credits and net operating loss carry-forwards. Temporary differences are primarily the result of the differences between the tax bases of assets and liabilities and their financial reporting values. Deferred tax liabilities and assets are measured by applying the enacted statutory tax rates applicable to the future years in which deferred tax liabilities or assets are expected to be settled or realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense, if any, consists of the taxes payable for the current period and the change during the period in deferred tax assets and liabilities. We recognize in our financial statements the impact of a tax position, if that position is more likely than not to be sustained upon an examination, based on the technical merits of the position. Interest and penalties related to income tax matters are recorded as income tax expense. At September 30, 2015 and December 31, 2014 we had no accruals for interest or penalties related to income tax matters. Income (Loss) per Common Share Basic income (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted income (loss) per common share adjusts basic income (loss) per share for the potentially dilutive effects of common share equivalents, using the treasury stock method, and includes the incremental effect of shares that would be issued upon the assumed exercise of stock options and warrants. Diluted loss per common share for the three months ended September 30, 2015 excludes al l 1,573,742 of our outstanding options as of that date, as on their impact on our net loss is anti-dilutive. Diluted income per common share for the nine months ended September 30, 2015 includes the dilutive impact of options equivalent to 495,087 shares. Diluted income per common share for the three months ended September 30, 2014 includes the dilutive impact of options equivalent to 348,350 shares. Diluted loss per common share for the nine months ended September 30, 2014 excludes all 1,544,070 of our outstanding options as of that date, as their impact on our net loss is anti-dilutive. Share-Based Compensation We account for share-based payments using the fair value method. We recognize all share-based payments to employees and non-employee directors in our financial statements based on their grant date fair values, calculated using the Black-Scholes option pricing model. Compensation expense related to share-based awards is recognized on a straight-line basis for each vesting tranche based on the value of share awards that are expected to vest on the grant date, which is revised if actual forfeitures differ materially from original expectations. Comprehensive Income Comprehensive income consists of net income and all changes in equity from non-stockholder sources, which consist of changes in unrealized gains and losses on investments. Concentration of Risk We maintain cash and short-term investment balances in accounts that exceed federally insured limits, although we have not experienced any losses on such accounts. We also invest excess cash in investment grade securities, generally with maturities of one year or less. We have historically provided credit in the normal course of business to contract counterparties and to the end user customers and distributors of our products. Trade accounts receivable in the accompanying balance sheets consist primarily of amounts due from end user customers and distributors of our Biosurgery products within the United States. During the first nine months of fiscal 2015 and 2014, revenues from one of the distributors of our Biosurgery products, Stability Biologics, comprised approximately 11% and 9% , respectively, of our total Biosurgery product revenues. As of September 30, 2015 and December 31, 2014, receivables from this distributor comprised 2% and 13% , respectively, of our trade receivables. As discussed under “Trade Accounts Receivable,” we have incurred $150,000 bad debt expense for the three and nine months ended September 30, 2015. We incurred $200,000 and $250,000 of bad debt expense for the three and nine months ended September 30, 2014. Recent Accounting Guidance at September 30, 2015 In July 2015, the FASB issued Accounting Standards Update No. 2015-11, “ Simplifying the Measurement of Inventory ” (“ASU 2015- 11”). ASU 2015-11 requires an entity to measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured using last-in, first-out (“LIFO”) or the retail inventory method. It is effective for annual reporting periods beginning after December 15, 2016. The amendments should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company is currently in the process of evaluating the impact of adoption of ASU 2015-11 on its balance sheets. No other new accounting pronouncements, issued or effective during the third quarter of 2015, have had or are expected to have a significant impact on the Company’s financial statements.

Discontinued Operations

Discontinued Operations	9 Months Ended
	Sep. 30, 2015
Discontinued Operations
Discontinued Operations	2. Discontinued Operations On October 10, 2013, we entered into a Purchase Agreement with a wholly-owned subsidiary of Mesoblast Limited, pursuant to the terms of which we sold our culture expanded mesenchymal stem cell (ceMSC) business, including Prochymal and other related assets. The Purchase Agreement provides for payment to us of $50 million in initial consideration, and payment of up to an additional $50 million upon the achievement by Mesoblast of certain clinical and regulatory milestones. Additionally, we will be entitled to earn low single to double digit cash royalties on future sales by Mesoblast of Prochymal and other products utilizing the acquired ceMSC technology. The Purchase Agreement provides for the $50.0 million of initial payments and up to $50.0 million of contingent additional payments to us upon our achievement of milestone events, as follows: Amount Milestone ($000) Initial consideration Letter of intent payments $ Initial closing payment Additional closing payment, received in April 2014 Delivery of all scheduled assets under the Transfer Agreement (paid in stock) Total initial consideration Contingent consideration First marketing authorization received in the U.S. First marketing authorization received from France, Germany, or European Union Completion of the enrollment of the Phase 3 Crohn’s Trial or Mesoblast’s election to discontinue the trial Receipt of final data for the Crohn’s trial or first marketing approval for Crohn’s Total conditional consideration Total possible purchase price $ Of the $50 million in total initial consideration, we received payment of $35 million in cash, and $15 million in Mesoblast ordinary shares, which were delivered to us upon completed delivery of the ceMSC assets. Our ability to receive the second $50 millio n is subject to satisfaction of the milestones indicated above all of which are largely dependent upon the clinical and regulatory success of Mesoblast and other factors not in our control. These include many if not all of the risks and uncertainties that our ceMSC business was subject to prior to its sale to Mesoblast, including product development, efficacy and regulatory risks. We have received no such payments thus far, and receiving any such payments in the foreseeable future is uncertain. Our ability to earn royalties from Mesoblast is subject to these same risks and will require performance by Mesoblast that results in its meeting some or all of the milestones referred to above, and is thereafter also dependent upon the commercial success of Mesoblast’s ceMSC business. Royalties, if any, are payable to us in cash. Any portion of the second $50 million that becomes payable to us will be payable, at the discretion of Mesoblast, in Mesoblast ordinary shares, based on a then current valuation of such shares. Any such Mesoblast ordinary shares that we receive will be subject to a one year holding period, with limited downside protection for a drop in the Mesoblast share price over the holding period. We eliminated the Therapeutics segment from our continuing operations as a result of the disposal transaction and have presented the assets, liabilities, and results of the segment’s operations as a discontinued operation for all periods. Our continuing operations now represent the portion of our business previously referred to as our Biosurgery segment. During the first fiscal quarter of 2015, we completed all of our responsibilities under a separate transition services agreement with Mesoblast and all involvement in our former Therapeutics business has ceased. The only continuing cash flows to us related to our former Therapeutics business will be the contingent consideration and royalties provided for under the purchase agreement, as described above. We received no such contingent payments or royalties in the first nine months of fiscal 2015 or full fiscal year 2014. Summarized operating results of discontinued operations are as follows: Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2015 2014 2015 2014 ($000s) ($000s) ($000s) ($000s) Revenue from collaborative research agreements and royalties $ — $ $ — $ Operating expenses: Research and development $ — $ — Selling, general and administrative — — — — — Loss from discontinued operations before income tax expense — — Income tax expense — — Loss from discontinued operations $ — $ $ — $ Revenues from our former Therapeutics business historically consisted primarily of collaborative research agreements and royalties . Because of the disposition of our Therapeutics business in 2013, we will no longer incur related research and development expenses related to these discontinued operations. Our discontinued operations also earned royalty revenues and cost reimbursement under an adult expanded access program. Royalties were earned on the sale of human mesenchymal stem cells sold for research purposes. We recognized this revenue as sales were made.

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2015
Property and Equipment
Property and Equipment	3. Property and Equipment Property and equipment at September 30, 2015 and December 31, 2014 are as follows: September 30, December 31, 2015 2014 ($000) ($000) Laboratory and manufacturing equipment $ $ Computer hardware, furniture and fixtures Leased assets Leasehold improvements Accumulated depreciation and amortization Property and equipment, net $ $ Depreciation and amortization expense for property and equipment was $850,000 and $685,000 for nine months ended September 30, 2015 and 2014, respectively. Depreciation and amortization expense for property and equipment was $303,000 and $244,000 for three months ended September 30, 2015 and 2014, respectively.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2015
Inventory
Inventory	4. Inventory As of September 30, 2015 and December 31, 2014, inventory for our Biosurgery business consists of the following: September 30, December 31, 2015 2014 ($000) ($000) Inventory Raw materials and supplies $ $ Work-in-process Finished goods Total Biosurgery inventory, net Prior to the transaction described in Note 2— Discontinued Operations , we did not carry any inventory for our Therapeutics products, as we had yet to launch Prochymal for commercial distribution. Finished goods include inventory at distributors in the amounts of $434,000 and $236,000 as of September 30, 2015 and December 31, 2014, respectively. Inventory at Distributors consists of inventory that was used to fulfill a firm order, where there was an agreed upon sales price and a transfer o f inventory to the distributor, but the revenue recognition criteria has not yet been met. The agreed sales price for the inventory at distributors was $1.7 million and $1.1 million as of September 30, 2015 and December 31, 2014, respectively. Revenue is generally recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed and determinable, and collectability is probable . For the Inventory at Distributors, the revenue recognition criteria were not satisfied at t he time of shipment or receipt as the fee was not fixed and determinable.

Cash Dividends

Cash Dividends	9 Months Ended
	Sep. 30, 2015
Equity [Abstract]
Cash Dividends	5. Cash Dividends On September 16, 2015, the Board of Directors declared a special cash dividend of $0.20 per common share payable to stockholders of record as of October 16, 2015. The dividend was paid on October 30 , 2015. As the Company had an accumulated deficit at the time the dividends were declared, these dividends were recorded as a reduction to additional paid-in capital.

Share-Based Compensation

Share-Based Compensation	9 Months Ended
	Sep. 30, 2015
Share-Based Compensation [Abstract]
Share-Based Compensation	6. Share-Based Compensation In April 2006, we adopted our 2006 Omnibus Plan. We amended and restated this plan in 2008 and 2010, and further amended it in 2012 and 2014, in each case to, among other things, increase the number of shares available for grant. In addition, we had previously established our Amended and Restated 1994 Stock Incentive Plan. Both Plans authorize the issuance of various forms of stock-based awards, including incentive and non-qualified stock options, stock purchase rights, stock appreciation rights and restricted and unrestricted stock awards. A total of 3,000,000 shares of our common stock have been reserved for issuance under the Amended and Restated 2006 Omnibus Plan, and 736,378 shares were reserved under our Amended and Restated 1994 Stock Incentive Plan. We ceased all grants under the Amended and Restated 1994 Stock Incentive Plan concurrent with our initial public offering in August 2006. As a result, no shares are currently available for future awards under the Amended and Restated 1994 Stock Incentive Plan. At September 30, 2015, there were 407,281 shares available for future awards under the Amended and Restated 2006 Omnibus Plan. In July 2015, the Board of Directors authorized the Company to settle employee option exercises on a net-share settlement. These net-share settlements had the effect of share repurchases by the Company as they reduced and retired the number of shares that would have otherwise been issued as a result of option exercises and did not represent an expense to the Company. During the quarter ended September 30, 2015, 42,812 options were exercised on a net-share basis, resulting in a net issuance of 13,699 shares of common stock. The cash proceeds that would have been received by the Company upon exercise of the options were used to repurchase and retire 29,113 shares of common stock delivered as payment for the exercise price of options exercised and to satisfy the option holders’ tax withholding liability. During the quarter ended September 30, 2015, the Company remitted $270,000 to the proper taxing authorities in satisfaction of the employees’ minimum statutory withholding requirements. During the three months ended September 30, 2015 and 2014, the Company recognized $750,000 and $647,000 , respectively, of stock-based compensation expense. During the nine months ended September 30, 2015 and 2014, the Company recognized $ 2.4 million and $ 2.2 million, respectively, of stock-based compensation expense. At September 30, 2015, there was $3.5 million of total unrecognized compensation costs related to non-vested stock options, which is expected to be recognized through fiscal 2019. A summary of stock option activity for the nine months ended September 30, 2015 is as follows: Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Shares Price Life (in thousands) Outstanding at, December 31, 2014 $ years $ Granted $ Exercised * $ $ Forfeited or canceled $ Balance, September 30, 2015 $ years $ Exercisable at September 30, 2015 $ years $ * Includes 42,812 options that were net settled The weighted fair value of options granted during the nine months ended September 30, 2015 was $17.86 per share.

Income Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2015
Income Taxes.
Income Taxes	7. Income Taxes We calculate our interim tax provision in accordance with the guidance for accounting for income taxes in interim periods. At the end of each interim period, we estimate the annual effective tax rate and apply that tax rate to our ordinary quarterly pre-tax income from continuing operations. The tax expense or benefit related to significant, unusual or extraordinary discrete events during the interim period is recognized in the interim period in which those events occurred. In addition, the effect of changes in enacted tax laws or rates or tax status is recognized in the interim period in which the change occurs. For the three months ended September 30, 2015, the tax benefit from continuing operations was $132,000 and for the nine months ended September 30, 2015, the tax expense from continuing operations was $354,000 . For the three and nine months ended September 30, 2014, the tax expense from continuing operations was $104,00 0 .

Investments Available for Sale

Investments Available for Sale	9 Months Ended
	Sep. 30, 2015
Investments Available for Sale
Investments Available for Sale	8. Investments Available for Sale Investments available for sale consisted of the following as of September 30, 2015 and December 31, 2014: September 30, 2015 December 31, 2014 ($000s) ($000s) Unrealized Unrealized Cost Gain Loss Fair Value Cost Gain Loss Fair Value Cash equivalents: Money market funds & certificates of deposit $ $ — $ — $ $ $ — $ — $ Corporate debt securities & commercial paper Investments: Municipal securities Agency obligations — US & International government agencies — Investments available for sale $ $ $ $ $ $ $ $ The cash equivalents detailed above represent highly liquid investments with maturities of three months or less when purchased that are held in our brokerage investment accounts. They are classified as investments available for sale as the amounts represent investments that have matured and are anticipated to be reinvested in debt securities in the near future. The following tables summarize the securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position, as of September 30, 2015 and December 31, 2014: Less than 12 Months More than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss September 30, 2015 ($000s) Municipal securities $ $ $ — $ — $ $ Corporate debt securities & commercial paper — — US & International government agencies — — Total temporary impaired $ $ $ — $ — $ $ Less than 12 Months More than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss December 31, 2014 ($000s) Municipal securities $ $ $ $ $ $ Agency obligations — — Corporate debt securities & commercial paper — — US & International government agencies — — Total temporary impaired $ $ $ $ $ $ The following table summarizes maturities of our investments available for sale as of September 30, 2015 and December 31, 2014: September 30, 2015 December 31, 2014 ($000s) ($000s) Cost Fair Value Cost Fair Value Maturities: Within 3 months $ $ $ $ Between 3 - 12 months More than 1 year Investments available for sale $ $ $ $ Realized gains (losses) and investment interest income net of management fees earned on investments available for sale were $(34,000) and $120,000 , respectively, for the three months ended September 30, 2015 and 2014, and $180,000 and $268,000 , respectively, for the nine months ended September 30, 2015 and 2014. The net amounts are included as a component of “Other income (expense), net” in the accompanying financial statements.

Fair Value

Fair Value	9 Months Ended
	Sep. 30, 2015
Fair Value
Fair Value	9. Fair Value Fair value is defined as the price at which an asset could be exchanged or a liability transferred (an exit price) in an orderly transaction between knowledgeable, willing parties in the principal or most advantageous market for the asset or liability. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. Financial assets recorded at fair value in the accompanying financial statements are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The levels are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities, and are as follows: Level 1 Inputs are unadjusted, quoted prices in active markets for identical assets at the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. The fair valued assets we hold that are generally included in this category are money market securities and the Mesoblast shares received in the disposition of the Therapeutics business, where fair value is based on publicly quoted prices. Level 2 Inputs are other than quoted prices included in Level 1, which are either directly or indirectly observable for the asset or liability through correlation with market data at the reporting date and for the duration of the instrument’s anticipated life. The fair valued assets we hold that are generally included in this category are investment grade short-term securities. Level 3 Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities and which reflect management’s best estimate of what market participants would use in pricing the asset or liability at the reporting date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. We do not currently hold any assets in this category. When quoted prices in active markets for identical assets are available, we use these quoted market prices to determine the fair value of financial assets and classify these assets as Level 1. In other cases where a quoted market price for identical assets in an active market is either not available or not observable, we obtain the fair value from a third party vendor that uses pricing models, such as matrix pricing, to determine fair value. These financial assets would then be classified as Level 2. In the event quoted market prices were not available, we would determine fair value using broker quotes or an internal analysis of each investment’s financial statements and cash flow projections. In these instances, financial assets would be classified based upon the lowest level of input that is significant to the valuation. Thus, financial assets might be classified in Level 3 even though there could be some significant inputs that may be readily available. Assets and liabilities measured at fair value on a recurring basis are summarized below as of September 30, 2015 and December 31, 2014: September 30, 2015 ($000s) Level I Level II Level III Total Assets Investments: Available for Sale Securities Cash & Cash Equivalents $ $ — $ — $ US & International government agencies — — Agency Obligations — — Corporate Debt Securities & Commercial Paper — — Municipal Securities — — Total investments available for sale $ $ $ — $ Securities received in business disposition Mesoblast common stock — — Total securities — — Total assets $ $ $ — $ December 31, 2014 ($000s) Level I Level II Level III Total Assets Investments: Available for Sale Securities Cash & Cash Equivalents $ $ — $ — $ US & International government agencies — — Agency Obligations — — Corporate Debt Securities & Commercial Paper — — Municipal Securities — — Total investments available for sale $ $ $ — $ Securities received in business disposition Mesoblast common stock — — Total securities — — Total assets $ $ $ — $

Contingencies

Contingencies	9 Months Ended
	Sep. 30, 2015
Contingencies
Contingencies	10. Contingencies The Company is subject to various legal proceedings and claims that arise in the ordinary course of business. We do not believe we are party to any currently pending legal proceedings, the outcome of which would have a material adverse effect on our financial statements. We regularly evaluate the status of legal proceedings in which we are involved in order to assess whether a loss is probable or there is a reasonable possibility that a loss or additional loss may have been incurred and determine if accruals are appropriate. We further evaluate each legal proceeding to assess whether an estimate of possible loss or range of loss can be made. However, the actual loss in any such contingency may be materially different from our estimates. Although management considers the likelihood of such an outcome to be remote, an unfavorable resolution of existing or future legal proceedings could have a material adverse effect on our financial statements for that reporting period .

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2015
Subsequent Events
Subsequent Events	11. Subsequent Events We evaluated our September 30, 2015 financial statements for subsequent events through the date the consolidated financial statements were issued. We are not aware of any subsequent events that would require recognition of disclosure in the financial statements. Furthermore, there have been no material changes, outside of the normal course of business, to any of the contractual obligations disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

Description of Business and S20

Description of Business and Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2015
Description of Business and Significant Accounting Policies
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Due to the inherent uncertainty involved in making those assumptions, actual results could differ from those estimates. We believe that the most significant estimates that affect our financial statements are those that relate to deferred tax assets, inventory valuation, allowance for doubtful accounts, and share-based compensation.
Reclassifications	Reclassifications We have reclassified certain prior-year amounts for comparative purposes. These reclassifications did not affect our results of operations or financial positions for the periods presented.
Cash and Cash Equivalents	Cash and Cash Equivalents Amounts listed as cash on our balance sheets are maintained in depository accounts at commercial banks, which include $2.2 million denominated in Australian dollars from the sale of our Mesoblast shares. Cash and cash equivalents, which include highly liquid investments with maturities of three months or less when purchased, held in our brokerage investment accounts are classified as investments available for sale, as the amounts represent investments that have matured and are anticipated to be reinvested in debt securities in the near future, and are disclosed at fair value, which approximates cost.
Investments Available for Sale	Investments Available for Sale Investments available for sale consist primarily of marketable securities with maturities less than one year. Investments available for sale are valued at their fair value, with unrealized gains and losses reported as a separate component of stockholders' equity in accumulated other comprehensive income (loss). All realized gains and losses on our investments available for sale are recognized in results of operations as other income (expense). Investments available for sale are evaluated periodically to determine whether a decline in their value is "other than temporary." The term "other than temporary" is not intended to indicate a permanent decline in value. Rather, it means that the prospects for near term recovery of value are not necessarily favorable, or that there is a lack of evidence to support fair values equal to, or greater than, the carrying value of the security. We review criteria such as the magnitude and duration of the decline, as well as the reasons for the decline, to predict whether the loss in value is other than temporary. If a decline in value is determined to be other than temporary, the carrying value of the security is reduced and a corresponding charge to earnings is recognized.
Trading Securities - Derivative and Securities Received in Business Disposition	Trading Securities - Derivative and Securities Received in Business Disposition As discussed in Note 2 – Discontinued Operations , we disposed of our Therapeutics segment in October 2013. A portion of the consideration for the sale of that business was stock of Mesoblast Limited (“Mesoblast”), the parent of the purchaser. We were required to hold that stock for one year from the date of receipt. Mesoblast is a public company and its stock is traded on the Australian stock exchange. The Mesoblast stock was previously subject to limited price protection for the one year required holding period. To the extent the value of those shares decreased during the holding period, Mesoblast was required to pay us for the decrease in value. This payment was to be made at least one half in cash and at the option of Mesoblast, up to one half in additional shares of Mesoblast stock. Any additional Mesoblast stock would also have to be held for one year during which period there was no further price protection. The price protection was accounted for as a derivative under ASC 815, Derivatives and Hedging , and, as such was recorded on the balance sheets at fair value, with changes recognized in net income. We elected to measure the Mesoblast stock at fair value with changes in fair value reflected in net income, as permitted under ASC 825-10, Financial Instruments — Fair Value Option . In December 2014, the price protection on these shares expired and we extended the restriction period to May 2015 in exchange for Mesoblast paying us the difference between the prevailing market value of the Mesoblast stock and $ 15 million in cash, thereby eliminating the derivative. As of December 31, 2014, this $15 million was shown as $10.6 million in Trading Securities and $4.4 million in Other Receivables on our Balance Sheets. In June 2015, we received $6.2 million in cash from Mesoblast for the difference between the market value of the Mesoblast stock and the $15 million agreed to be paid to us by Mesoblast. Also in June 2015, we began selling the shares of Mesoblast stock through a stockbroker in Australia. As of September 30, 2015, we sold 1,557,551 shares of Mesoblast stock and realized a loss of $13,000 . As of September 30, 2015, the market value of the remaining 1,391,178 shares of Mesoblast stock held by us was $3.1 million. For the three and nine months ended September 30, 2015, we recognized an unrealized loss on the value of the Mesoblast stock of $933,000 and $1.2 million, respectively, as a component of Other Expense, Net. We expect to sell all of the Mesoblast shares by the end of this fiscal year.
Trade Accounts Receivable	Trade Accounts Receivable Trade accounts receivable are reported at their net realizable value. We charge off uncollectible receivables when the likelihood of collection is remote. We set credit terms with individual customers, and consider receivables outstanding longer than the time specified in the respective customer's contract, typically 45 -days, to be past due. As of September 30, 2015 and December 31, 2014, accounts receivable in the accompanying balance sheets is each reported net of $411,000 and $1.3 million allowance for doubtful accounts, respectively. During the nine months ended September 30, 2015, we entered into a settlement agreement with a former customer and wrote off $995,000 of accounts receivable against the allowance for doubtful accounts. This amount was fully reserved as of December 31, 2014. Trade accounts receivable balances are not collateralized. We incurred $150,000 of bad debt expense during the three months and nine months period ended September 30, 2015. We incurred $200,000 and $250,000 of bad debt expense during the three months and nine months period ended September 30, 2014, respectively.
Other Receivables	Other Receivables Other receivables at December 31, 2014 included the $5.0 million fee payable from Stryker, as further described below, and the $4.4 million difference between the market value of the Mesoblast ordinary shares and the $15 million agreed to be paid to us by Mesoblast as described above under “Trading Securities.” The $5.0 million fee from Stryker was received in February 2015 and the true-up payment from Mesoblast was received in June 2015.
Inventory	Inventory We began carrying inventory of our Biosurgery products on our balance sheet following commercial launch of such products. Inventory consists of raw materials, biologic products in process, and products available for distribution. We determine our inventory values using the first-in, first-out method. Inventory is valued at the lower of cost or market, and excludes units that we anticipate distributing for clinical evaluation. Materials and supplies purchased for product development and product improvement activities are expensed as incurred.
Property and Equipment	Property and Equipment Property and equipment, including improvements that extend useful lives, are valued at cost, while maintenance and repairs are charged to operations as incurred. Depreciation is calculated using the straight-line method based on estimated useful lives ranging from three to seven years for furniture, equipment and internal use software. Leasehold improvements and assets under capital leases are amortized over the shorter of the estimated useful life of the asset or the term of the lease.
Valuation of Long-lived Assets	Valuation of Long-lived Assets We review long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or group of assets may not be fully recoverable. These events or changes in circumstances may include a significant deterioration of operating results, changes in business plans, or changes in anticipated future cash flows. If an impairment indicator is present, we evaluate recoverability by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. Assets are grouped at the lowest level for which there is identifiable cash flows that are largely independent of the cash flows generated by other asset groups. If the total of the expected undiscounted future cash flows is less than the carrying amount of the asset, an impairment loss is recognized for the difference between the fair value and carrying value of assets. Fair value is generally determined by estimates of discounted cash flows. The discount rate used in any estimate of discounted cash flows would be the rate required for a similar investment of like risk. There were no impairment losses recognized during the first nine months of fiscal 2015 or during fiscal year 2014.
Biosurgery Revenue Recognition	Biosurgery Revenue Recognition We recognize revenue from product distribution when title passes to the customer. Title usually passes when the product is shipped to the customer and leaves our loading dock. On occasion, customers purchase product and request that the Company store the purchased product in segregated freezers at the Company’s facility. In those cases, title passes to the customer and the customer accepts all risks associated with the purchased product. Customers may request this service of the Company in instances where they want to ensure that supply of product is available to them and they do not have the capability to store the product themselves in special freezers at -80 degrees Celsius. In some situations, we store consigned inventory on site in freezers at hospital or clinic facilities. No revenue is recognized upon the placement of inventory into consignment as we retain title and maintain the inventory on our balance sheets. For these products, revenue is recognized when we receive appropriate notification that the product has been used in a surgical procedure. We verify the condition and status of all consigned inventory on at least a quarterly basis. Due to the nature of our products and the need to ensure they are maintained at the proper frozen temperature, we generally do not allow product returns. In December 2014, we entered into an exclusive distribution agreement with a subsidiary of Stryker Corporation for the marketing and distribution of BIO 4™ , our viable bone matrix allograft. Pursuant to the agreement, Stryker has been granted worldwide distribution rights to the product and any improvements, for all surgical applications. We are responsible for supply, processing, inventory management, shipments to customers, continued research and product improvement activities. The amount we recognized as revenue is based on our list prices for the allograft. We reconcile and record the difference, if any, between the revenue previously recognized and the selling price when we receive the data from Stryker on a monthly basis. Commissions and administrative fees paid to Stryker are accounted for as selling expenses, as Stryker is acting as outside sales and marketing agent for Osiris. We received an initial exclusivity fee of $5.0 million in the first nine months of fiscal 2015 and are entitled to receive additional fees upon any exercise by Stryker of its right to extend the initial term, whether on an exclusive or non-exclusive basis. The exclusivity fee and any extension fees subsequently received are considered to be adjustments of the selling expenses. As such, we recognize the exclusively fee as deferred revenue, which will be amortized over the related exclusivity period in proportion to the expected fees to be paid to Stryker, as an offset to selling expenses. We amortized $236,000 and $611,000 for the three and nine months ended September 30, 2015, respectively. At December 31, 2014, we recorded a $5.0 million receivable with the offset to short-term deferred commissions of $1.7 million and long-term deferred commissions of $3.3 million. At September 30, 2015, the short-term and long-term deferred commissions were $1.7 million and $2.7 million, respectively. In October 2014, we entered into an exclusive commercial and development partnership for our cartilage product, Cartiform®, with Arthrex, Inc. The agreement provides Arthrex with exclusive commercial distribution rights to Cartiform beginning in 2015. We are responsible for product processing, continued research and product improvement activities. The responsibilities related to the design and conduct of future clinical development programs are shared between both organizations. Pursuant to the agreement, Arthrex is entitled to a certain commission on Cartiform sales. We recognize the full sales price as revenue and account for the payment to Arthrex as commission expense.
Research and Development Costs	Research and Development Costs We expense internal and external research and development (“R&D”) costs, including costs of funded R&D arrangements and the processing and production of clinical batches of Biosurgery products used in clinical trials, in the period incurred.
Income Taxes	Income Taxes Deferred tax liabilities and assets are recognized for the estimated future tax consequences of temporary differences, income tax credits and net operating loss carry-forwards. Temporary differences are primarily the result of the differences between the tax bases of assets and liabilities and their financial reporting values. Deferred tax liabilities and assets are measured by applying the enacted statutory tax rates applicable to the future years in which deferred tax liabilities or assets are expected to be settled or realized. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. Income tax expense, if any, consists of the taxes payable for the current period and the change during the period in deferred tax assets and liabilities. We recognize in our financial statements the impact of a tax position, if that position is more likely than not to be sustained upon an examination, based on the technical merits of the position. Interest and penalties related to income tax matters are recorded as income tax expense. At September 30, 2015 and December 31, 2014 we had no accruals for interest or penalties related to income tax matters.
Income per Common Share	Income (Loss) per Common Share Basic income (loss) per common share is calculated by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted income (loss) per common share adjusts basic income (loss) per share for the potentially dilutive effects of common share equivalents, using the treasury stock method, and includes the incremental effect of shares that would be issued upon the assumed exercise of stock options and warrants. Diluted loss per common share for the three months ended September 30, 2015 excludes al l 1,573,742 of our outstanding options as of that date, as on their impact on our net loss is anti-dilutive. Diluted income per common share for the nine months ended September 30, 2015 includes the dilutive impact of options equivalent to 495,087 shares. Diluted income per common share for the three months ended September 30, 2014 includes the dilutive impact of options equivalent to 348,350 shares. Diluted loss per common share for the nine months ended September 30, 2014 excludes all 1,544,070 of our outstanding options as of that date, as their impact on our net loss is anti-dilutive.
Share-Based Compensation	Share-Based Compensation We account for share-based payments using the fair value method. We recognize all share-based payments to employees and non-employee directors in our financial statements based on their grant date fair values, calculated using the Black-Scholes option pricing model. Compensation expense related to share-based awards is recognized on a straight-line basis for each vesting tranche based on the value of share awards that are expected to vest on the grant date, which is revised if actual forfeitures differ materially from original expectations.
Comprehensive Income	Comprehensive Income Comprehensive income consists of net income and all changes in equity from non-stockholder sources, which consist of changes in unrealized gains and losses on investments.
Concentration of Risk	Concentration of Risk We maintain cash and short-term investment balances in accounts that exceed federally insured limits, although we have not experienced any losses on such accounts. We also invest excess cash in investment grade securities, generally with maturities of one year or less. We have historically provided credit in the normal course of business to contract counterparties and to the end user customers and distributors of our products. Trade accounts receivable in the accompanying balance sheets consist primarily of amounts due from end user customers and distributors of our Biosurgery products within the United States. During the first nine months of fiscal 2015 and 2014, revenues from one of the distributors of our Biosurgery products, Stability Biologics, comprised approximately 11% and 9% , respectively, of our total Biosurgery product revenues. As of September 30, 2015 and December 31, 2014, receivables from this distributor comprised 2% and 13% , respectively, of our trade receivables. As discussed under “Trade Accounts Receivable,” we have incurred $150,000 bad debt expense for the three and nine months ended September 30, 2015. We incurred $200,000 and $250,000 of bad debt expense for the three and nine months ended September 30, 2014.

Description of Business and S21

Description of Business and Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2015
Description of Business and Significant Accounting Policies
Schedule Of Prior Period Adjustments	The following tables present the effects of the corrections on the Company’s financial statements for December 31, 2014: As Previously Reported Q1 2014 Q2 2014 Q3 2014 Q4 2014 2014 Product revenues $ $ $ $ $ Cost of product revenue Gross profit Income (loss) from continuing operations Net income (loss) Diluted income (loss) per share $ $ $ $ $ Trade accounts receivable, net $ Inventory $ Total stockholders' equity $ Adjustments Q1 2014 Q2 2014 Q3 2014 Q4 2014 2014 Product revenues $ — $ — $ — $ $ Cost of product revenue — — — Gross profit — — — Income (loss) from continuing operations — — — Net income (loss) — — — Diluted income (loss) per share $ — $ — $ — $ $ Trade accounts receivable, net $ $ Inventory $ $ Total stockholders' equity $ $ Restated Q1 2014 Q2 2014 Q3 2014 Q4 2014 2014 Product revenues $ $ $ $ $ Cost of product revenue Gross profit Income (loss) from continuing operations Net income (loss) Diluted income (loss) per share $ $ $ $ $ Trade accounts receivable, net $ Inventory $ Total stockholders' equity $ Percentage Change Q1 2014 Q2 2014 Q3 2014 Q4 2014 2014 Product revenues % % % % % Cost of product revenue % % % % % Gross profit % % % % % Income (loss) from continuing operations % % % % % Net income (loss) % % % % % Diluted income (loss) per share % % % % % Trade accounts receivable, net % Inventory % Total stockholders' equity % The following tables present the effects of the corrections on the Company’s financial statements for each quarter during 2015: As Previously Reported Q1 2015 Q2 2015 2015 Product revenues $ $ $ Cost of product revenue Gross profit Selling, general, and administrative expenses Income taxes expense Income (loss) from continuing operations Net income (loss) Diluted income (loss) per share $ $ $ Trade accounts receivable, net $ $ Inventory $ $ Total liabilities $ $ Total stockholders' equity $ $ Adjustments Q1 2015 Q2 2015 2015 Product revenues $ $ $ Cost of product revenue — Gross profit Selling, general, and administrative expenses Income taxes expense Income (loss) from continuing operations Net income (loss) Diluted income (loss) per share $ $ $ Trade accounts receivable, net $ $ Inventory $ $ Total liabilities $ $ Total stockholders' equity $ $ Restated Q1 2015 Q2 2015 2015 Product revenues $ $ $ Cost of product revenue Gross profit Selling, general, and administrative expenses Income taxes expense Income (loss) from continuing operations Net income (loss) Diluted income (loss) per share $ $ $ Trade accounts receivable, net $ $ Inventory $ $ Total liabilities $ $ Total stockholders' equity $ $ Percentage Change Q1 2015 Q2 2015 2015 Product revenues % % % Cost of product revenue % % % Gross profit % % % Selling, general, and administrative expenses % % % Income taxes expense % % % Income (loss) from continuing operations % % % Net income (loss) % % % Diluted income (loss) per share % % % Trade accounts receivable, net % % Inventory % % Total liabilities % % Total stockholders' equity % %

Discontinued Operations (Tables

Discontinued Operations (Tables)	9 Months Ended
	Sep. 30, 2015
Discontinued Operations
Schedule of initial consideration and contingent additional payments upon achievement of milestone events provided under Purchase Agreement	Amount Milestone ($000) Initial consideration Letter of intent payments $ Initial closing payment Additional closing payment, received in April 2014 Delivery of all scheduled assets under the Transfer Agreement (paid in stock) Total initial consideration Contingent consideration First marketing authorization received in the U.S. First marketing authorization received from France, Germany, or European Union Completion of the enrollment of the Phase 3 Crohn’s Trial or Mesoblast’s election to discontinue the trial Receipt of final data for the Crohn’s trial or first marketing approval for Crohn’s Total conditional consideration Total possible purchase price $
Summary of operating results of discontinued operations	Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2015 2014 2015 2014 ($000s) ($000s) ($000s) ($000s) Revenue from collaborative research agreements and royalties $ — $ $ — $ Operating expenses: Research and development $ — $ — Selling, general and administrative — — — — — Loss from discontinued operations before income tax expense — — Income tax expense — — Loss from discontinued operations $ — $ $ — $

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2015
Property and Equipment
Schedule of property and equipment	September 30, December 31, 2015 2014 ($000) ($000) Laboratory and manufacturing equipment $ $ Computer hardware, furniture and fixtures Leased assets Leasehold improvements Accumulated depreciation and amortization Property and equipment, net $ $

Inventory (Tables)

Inventory (Tables)	9 Months Ended
	Sep. 30, 2015
Inventory
Schedule of inventory for Biosurgery business	September 30, December 31, 2015 2014 ($000) ($000) Inventory Raw materials and supplies $ $ Work-in-process Finished goods Total Biosurgery inventory, net

Share-Based Compensation (Table

Share-Based Compensation (Tables)	9 Months Ended
	Sep. 30, 2015
Share-Based Compensation [Abstract]
Summary of stock option activity	Weighted Average Aggregate Average Remaining Intrinsic Number of Exercise Contractual Value Shares Price Life (in thousands) Outstanding at, December 31, 2014 $ years $ Granted $ Exercised * $ $ Forfeited or canceled $ Balance, September 30, 2015 $ years $ Exercisable at September 30, 2015 $ years $ * Includes 42,812 options that were net settled

Investments Available for Sale

Investments Available for Sale (Tables)	9 Months Ended
	Sep. 30, 2015
Investments Available for Sale
Schedule of investments available for sale	September 30, 2015 December 31, 2014 ($000s) ($000s) Unrealized Unrealized Cost Gain Loss Fair Value Cost Gain Loss Fair Value Cash equivalents: Money market funds & certificates of deposit $ $ — $ — $ $ $ — $ — $ Corporate debt securities & commercial paper Investments: Municipal securities Agency obligations — US & International government agencies — Investments available for sale $ $ $ $ $ $ $ $
Summary of securities with unrealized losses	Less than 12 Months More than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss September 30, 2015 ($000s) Municipal securities $ $ $ — $ — $ $ Corporate debt securities & commercial paper — — US & International government agencies — — Total temporary impaired $ $ $ — $ — $ $ Less than 12 Months More than 12 Months Total Fair Unrealized Fair Unrealized Fair Unrealized Value Loss Value Loss Value Loss December 31, 2014 ($000s) Municipal securities $ $ $ $ $ $ Agency obligations — — Corporate debt securities & commercial paper — — US & International government agencies — — Total temporary impaired $ $ $ $ $ $
Schedule of maturities of investments available for sale	September 30, 2015 December 31, 2014 ($000s) ($000s) Cost Fair Value Cost Fair Value Maturities: Within 3 months $ $ $ $ Between 3 - 12 months More than 1 year Investments available for sale $ $ $ $

Fair Value (Tables)

Fair Value (Tables)	9 Months Ended
	Sep. 30, 2015
Fair Value
Schedule of assets and liabilities measured at fair value on a recurring basis	September 30, 2015 ($000s) Level I Level II Level III Total Assets Investments: Available for Sale Securities Cash & Cash Equivalents $ $ — $ — $ US & International government agencies — — Agency Obligations — — Corporate Debt Securities & Commercial Paper — — Municipal Securities — — Total investments available for sale $ $ $ — $ Securities received in business disposition Mesoblast common stock — — Total securities — — Total assets $ $ $ — $ December 31, 2014 ($000s) Level I Level II Level III Total Assets Investments: Available for Sale Securities Cash & Cash Equivalents $ $ — $ — $ US & International government agencies — — Agency Obligations — — Corporate Debt Securities & Commercial Paper — — Municipal Securities — — Total investments available for sale $ $ $ — $ Securities received in business disposition Mesoblast common stock — — Total securities — — Total assets $ $ $ — $

Description of Business and S28

Description of Business and Significant Accounting Policies(Details) $ in Millions	9 Months Ended	48 Months Ended
	Sep. 30, 2015USD ($)	Dec. 31, 2013segment
Number of operating segments | segment		2
Purchase Agreement with Mesoblast
Cash from sale of Mesoblast Shares	$ 2.2

Description of Business and S29

Description of Business and Significant Accounting Policies (Details 2) - USD ($)	Oct. 10, 2014	Oct. 10, 2013	Jun. 30, 2015	Sep. 30, 2015	Sep. 30, 2015	Dec. 31, 2014
Derivative and Securities Received in Business Disposition
Trading securities				$ 3,090,000	$ 3,090,000	$ 10,591,000
Other receivables				$ 562,000	562,000	$ 9,951,000
Consideration received					$ (6,198,000)
Shares outstanding				34,453,000	34,453,000	34,346,000
Therapeutics segment | Purchase Agreement with Mesoblast
Derivative and Securities Received in Business Disposition
Holding period for initial payments made in ordinary shares		1 year
Holding period of stock subject to limited price protection		1 year
Holding period for price protection payments made in ordinary shares	1 year
Consideration in restricted stock						$ 15,000,000
Trading securities						10,600,000
Other receivables						$ 4,400,000
Consideration received			$ 6,200,000
Number of shares sold					1,557,551
Realized loss					$ 13,000
Shares outstanding				1,391,178	1,391,178
Market value				$ 3,100,000	$ 3,100,000
Unrealized loss				$ 933,000	$ 1,200,000
Minimum | Therapeutics segment | Purchase Agreement with Mesoblast
Derivative and Securities Received in Business Disposition
Aggregate compensation to be received for decrease in value of shares payable in cash (as a percent)	50.00%
Maximum | Therapeutics segment | Purchase Agreement with Mesoblast
Derivative and Securities Received in Business Disposition
Aggregate compensation to be received for decrease in value of shares (as a percent)	50.00%

Description of Business and S30

Description of Business and Significant Accounting Policies (Details 3) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Feb. 28, 2015	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Accounts Receivable
Typical trade accounts receivable due period				45 days
Allowance for doubtful accounts related to accounts receivable		$ 411,000		$ 411,000		$ 1,300,000
Allowance for doubtful accounts written off				995,000
Provision for bad debts		150,000	$ 200,000	150,000	$ 250,000
Deferred commissions payable, current portion		1,667,000		1,667,000		1,667,000
Other receivables		562,000		562,000		9,951,000
Therapeutics segment | Purchase Agreement with Mesoblast
Accounts Receivable
Other receivables						4,400,000
Therapeutics segment | Purchase Agreement with Mesoblast | Delivery of all scheduled assets under the Transfer Agreement (paid in stock)
Accounts Receivable
Other receivables		15,000,000		15,000,000		15,000,000
Stryker
Accounts Receivable
Other receivables						5,000,000
Fee received	$ 5,000,000
Biosurgery segment
Accounts Receivable
Deferred commissions payable, current portion		1,700,000		1,700,000		1,700,000
Deferred commissions payable, non-current portion		2,700,000		2,700,000		3,300,000
Amortized liability		$ 236,000		611,000
Exclusivity fee received				$ 5,000,000
Other receivables						$ 5,000,000

Description of Business and S31

Description of Business and Significant Accounting Policies (Details 4) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Valuation of Long-lived Assets
Impairment losses	$ 0	$ 0
Income Taxes
Accruals for interest or penalties related to income tax matters	$ 0	$ 0
Minimum
Property and Equipment
Estimated useful lives	3 years
Maximum
Property and Equipment
Estimated useful lives	7 years

Description of Business and S32

Description of Business and Significant Accounting Policies (Details 5) - Stock options - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income per Common Share
Dilutive weighted average options outstanding (in shares)	1,573,742	348,350	495,087
Anti-dilutive securities not included in diluted income (loss) per common share				1,544,070

Description of Business and S33

Description of Business and Significant Accounting Policies (Details 6)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015USD ($)	Sep. 30, 2014USD ($)	Sep. 30, 2015USD ($)Distributor	Sep. 30, 2014USD ($)Distributor	Dec. 31, 2014
Concentration of Risk
Provision for Doubtful Accounts | $	$ 150,000	$ 200,000	$ 150,000	$ 250,000
Receivables | Distributors
Concentration of Risk
Concentration of risk (as a percent)			2.00%		13.00%
Revenue | Distributors | Biosurgery segment
Concentration of Risk
Number of significant distributors			1	1
Concentration of risk (as a percent)			11.00%	9.00%

Description of Business and S34

Description of Business and Significant Accounting Policies (Details 7)	3 Months Ended							6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2015USD ($)item$ / shares	Jun. 30, 2015USD ($)$ / shares	Mar. 31, 2015USD ($)$ / shares	Dec. 31, 2014USD ($)$ / shares	Sep. 30, 2014USD ($)$ / shares	Jun. 30, 2014USD ($)$ / shares	Mar. 31, 2014USD ($)$ / shares	Jun. 30, 2015USD ($)$ / shares	Sep. 30, 2015USD ($)$ / shares	Sep. 30, 2014USD ($)$ / shares	Dec. 31, 2014USD ($)$ / shares
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Product revenues	$ 25,331,000	$ 22,731,000	$ 19,215,000	$ 18,247,000	$ 17,204,000	$ 13,290,000	$ 10,054,000	$ 41,946,000	$ 67,277,000	$ 40,548,000	$ 58,795,000
Cost of product revenues	5,390,000	5,142,000	4,290,000	4,014,000	3,785,000	2,924,000	2,212,000	9,432,000	14,822,000	8,921,000	12,935,000
Gross profit	19,941,000	17,589,000	14,925,000	14,233,000	13,419,000	10,366,000	7,842,000	32,514,000	52,455,000	31,627,000	45,860,000
Selling, general and administrative	17,325,000	14,029,000	12,736,000		10,993,000			26,765,000	44,090,000	28,153,000
Income Tax Expense (Benefit)	(132,000)	276,000	210,000		104,000			486,000	354,000	104,000
Income (loss) from continuing operations	(658,000)	795,000	485,000	247,000	710,000	(1,428,000)	(611,000)	1,280,000	622,000	(1,325,000)	(1,082,000)
Net income (loss)	$ (658,000)	$ 795,000	$ 485,000	$ (20,000)	$ 645,000	$ (1,885,000)	$ (1,365,000)	$ 1,280,000	$ 622,000	$ (2,605,000)	$ (2,625,000)
Diluted income (loss) per share | $ / shares	$ (0.02)	$ 0.02	$ 0.02	$ 0	$ 0.02	$ (0.05)	$ (0.04)	$ 0.04	$ 0.02	$ (0.08)	$ (0.07)
Trade accounts receivable, net	$ 37,857,000	$ 34,781,000	$ 29,162,000	$ 23,235,000				$ 34,781,000	$ 37,857,000		$ 23,235,000
Inventory	15,818,000	13,903,000	12,494,000	11,160,000				13,903,000	15,818,000		11,160,000
Total liabilities	21,176,000	12,835,000	14,498,000	14,155,000				12,835,000	21,176,000		14,155,000
Total stockholders' equity	$ 79,844,000	85,560,000	84,179,000	83,127,000				85,560,000	79,844,000		83,127,000
As Previously Reported [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Product revenues		23,688,000	21,003,000	19,319,000	$ 17,204,000	$ 13,290,000	$ 10,054,000	44,691,000			59,867,000
Cost of product revenues		5,142,000	4,609,000	4,250,000	3,785,000	2,924,000	2,212,000	9,751,000			13,171,000
Gross profit		18,546,000	16,394,000	15,069,000	13,419,000	10,366,000	7,842,000	34,940,000			46,696,000
Selling, general and administrative		14,526,000	12,911,000					27,437,000
Income Tax Expense (Benefit)		367,000	612,000					979,000
Income (loss) from continuing operations		1,164,000	1,377,000	1,083,000	710,000	(1,428,000)	(611,000)	2,541,000			(246,000)
Net income (loss)		$ 1,164,000	$ 1,377,000	$ 816,000	$ 645,000	$ (1,885,000)	$ (1,365,000)	$ 2,541,000			$ (1,789,000)
Diluted income (loss) per share | $ / shares		$ 0.03	$ 0.04	$ 0.02	$ 0.02	$ (0.05)	$ (0.04)	$ 0.07			$ (0.05)
Trade accounts receivable, net		$ 38,598,000	$ 32,022,000	$ 24,307,000				$ 38,598,000			$ 24,307,000
Inventory		13,348,000	11,939,000	10,924,000				13,348,000			10,924,000
Total liabilities		14,185,000	15,128,000					14,185,000
Total stockholders' equity		88,822,000	86,484,000	83,963,000				88,822,000			83,963,000
Restatement Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Number of contracts | item	3
Number of contracts impacted by correction of revenue recognition error | item	1
Increase (decrease) in product revenues	$ 800,000	(1,000,000)	(1,800,000)
Increase (decrease) in product revenues under the cash basis of accounting	$ 800,000		800,000								(1,100,000)
Increase (decrease) in product revenues right to return product			(700,000)
Difference in product revenue									$ 300,000
Product revenues		(957,000)	(1,788,000)	(1,072,000)				(2,745,000)			(1,072,000)
Cost of product revenues			(319,000)	(236,000)				(319,000)			(236,000)
Gross profit		(957,000)	(1,469,000)	(836,000)				(2,426,000)			(836,000)
Selling, general and administrative		(497,000)	(175,000)					(672,000)
Income Tax Expense (Benefit)		(91,000)	(402,000)					(493,000)
Income (loss) from continuing operations		(369,000)	(892,000)	(836,000)				(1,261,000)			(836,000)
Net income (loss)		$ (369,000)	$ (892,000)	$ (836,000)				$ (1,261,000)			$ (836,000)
Diluted income (loss) per share | $ / shares		$ (0.01)	$ (0.02)	$ (0.02)				$ (0.03)			$ (0.02)
Trade accounts receivable, net		$ (3,817,000)	$ (2,860,000)	$ (1,072,000)				$ (3,817,000)			$ (1,072,000)
Inventory		555,000	555,000	236,000				555,000			236,000
Total liabilities		(1,350,000)	(630,000)					(1,350,000)
Total stockholders' equity		$ (3,262,000)	$ (2,305,000)	$ (836,000)				$ (3,262,000)			$ (836,000)
Trade Accounts Receivable, Net [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Percentage Change		(9.89%)	(8.93%)								(4.41%)
Inventory [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Percentage Change		4.16%	4.65%								2.16%
Total Liabilities [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Percentage Change		(9.52%)	(4.16%)
Stockholders Equity [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Percentage Change		(3.67%)	(2.67%)								(1.00%)
Product Revenues [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Percentage Change		(4.04%)	(8.51%)	(5.55%)	0.00%	0.00%	0.00%	(6.14%)			(1.79%)
Product Revenues [Member] | Restatement Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Increase (decrease) in product revenues											$ (1,100,000)
Increase (decrease) in product revenues from price adjustment		$ (1,000,000)	$ (300,000)
Cost of Sales [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Percentage Change		0.00%	(6.92%)	(5.55%)	0.00%	0.00%	0.00%	(3.27%)			(1.79%)
Gross Profit [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Percentage Change		(5.16%)	(8.96%)	(5.55%)	0.00%	0.00%	0.00%	(6.94%)			(1.79%)
Selling, general and administrative
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Percentage Change		(3.42%)	(1.36%)					(2.45%)
Income (Loss) From Continuing Operations [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Percentage Change		(31.70%)	(64.78%)	(77.19%)	0.00%	0.00%	0.00%	(49.63%)			339.84%
Income Taxes Expense Member
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Percentage Change		(24.80%)	(65.69%)					(50.36%)
Net Income (Loss) [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Percentage Change		(31.70%)	(64.78%)	(102.45%)	0.00%	0.00%	0.00%	(49.63%)			46.73%
Diluted Income (Loss) Per Share [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Percentage Change		(33.33%)	(50.00%)	(120.73%)	0.00%	0.00%	0.00%	(42.86%)			48.80%

Discontinued Operations (Detail

Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014	Oct. 10, 2013
Operating expenses:
Income tax expense	$ 75		$ 672
Loss from discontinued operations	(65)		(1,280)
Therapeutics segment
Initial consideration and contingent additional payments provided under Purchase Agreement
Contingent milestone payments received		$ 0		$ 0
Royalty revenue		$ 0		$ 0
Summarized operating results
Revenue from collaborative research agreements and royalties	69		219
Operating expenses:
Research and development	59		236
Selling, general and administrative			591
Total operating expenses	59		827
Loss from discontinued operations before income tax expense	10		(608)
Income tax expense	75		672
Loss from discontinued operations	$ (65)		$ (1,280)
Purchase Agreement with Mesoblast | Therapeutics segment
Initial consideration and contingent additional payments provided under Purchase Agreement
Initial consideration					$ 50,000
Contingent Consideration					50,000
Total possible purchase price					100,000
Total initial consideration paid in cash					35,000
Initial consideration paid in ordinary shares					15,000
Purchase Agreement with Mesoblast | Letter of intent payments | Therapeutics segment
Initial consideration and contingent additional payments provided under Purchase Agreement
Initial consideration					3,500
Purchase Agreement with Mesoblast | Initial closing payment | Therapeutics segment
Initial consideration and contingent additional payments provided under Purchase Agreement
Initial consideration					16,500
Purchase Agreement with Mesoblast | Additional closing payment, received in April 2014 | Therapeutics segment
Initial consideration and contingent additional payments provided under Purchase Agreement
Initial consideration					15,000
Purchase Agreement with Mesoblast | Delivery of all scheduled assets under the Transfer Agreement (paid in stock) | Therapeutics segment
Initial consideration and contingent additional payments provided under Purchase Agreement
Initial consideration					15,000
Purchase Agreement with Mesoblast | First marketing authorization received in the U.S. | Therapeutics segment
Initial consideration and contingent additional payments provided under Purchase Agreement
Contingent Consideration					20,000
Purchase Agreement with Mesoblast | First marketing authorization received from France, Germany, or European Union | Therapeutics segment
Initial consideration and contingent additional payments provided under Purchase Agreement
Contingent Consideration					10,000
Purchase Agreement with Mesoblast | Completion of the enrollment of the Phase 3 Crohn's Trial or Mesoblast's election to discontinue the trial | Therapeutics segment
Initial consideration and contingent additional payments provided under Purchase Agreement
Contingent Consideration					10,000
Purchase Agreement with Mesoblast | Receipt of final data for the Crohn's trial or first marketing approval for Crohn's | Therapeutics segment
Initial consideration and contingent additional payments provided under Purchase Agreement
Contingent Consideration					$ 10,000

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	$ 8,124,000		$ 8,124,000		$ 7,181,000
Accumulated depreciation and amortization	(5,944,000)		(5,944,000)		(5,094,000)
Property and equipment, net	2,180,000		2,180,000		2,087,000
Depreciation, Depletion and Amortization	303,000	$ 244,000	850,000	$ 685,000
Laboratory and manufacturing equipment
Property and Equipment
Property and equipment, gross	1,533,000		1,533,000		1,211,000
Computer hardware, furniture and fixtures
Property and Equipment
Property and equipment, gross	1,820,000		1,820,000		1,377,000
Leased assets
Property and Equipment
Property and equipment, gross	228,000		228,000		228,000
Leasehold improvements
Property and Equipment
Property and equipment, gross	$ 4,543,000		$ 4,543,000		$ 4,365,000

Inventory (Details)

Inventory (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Jun. 30, 2015	Mar. 31, 2015
Total Biosurgery inventory, net	$ 15,818,000	$ 11,160,000	$ 13,903,000	$ 12,494,000
Inventory at distributors	(434,000)	(236,000)
Biosurgery segment
Raw materials and supplies	1,163,000	1,025,000
Work-in-process	94,000	465,000
Finished goods	14,561,000	9,670,000
Total Biosurgery inventory, net	15,818,000	11,160,000
Agreed sales price of the inventory at distributors	$ 1,700,000	$ 1,100,000

Cash Dividends (Details)

Cash Dividends (Details) - $ / shares	Sep. 16, 2015	Sep. 30, 2015	Sep. 30, 2015
Equity [Abstract]
Common Stock, Dividends, Per Share, Declared	$ 0.20	$ 0.20	$ 0.20

Share-Based Compensation (Detai

Share-Based Compensation (Details) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Share-Based Compensation
Share-based Compensation	$ 750,000	$ 647,000	$ 2,381,000	$ 2,184,000
Stock options
Share-Based Compensation
Stock Repurchased and Retired During Period, Shares	29,113
Payments Related to Tax Withholding for Share-based Compensation	$ 270,000
Total unrecognized compensation costs related to non-vested stock options	$ 3,500,000		$ 3,500,000
Number of Shares
Net issuance of shares of common stock	13,699
Outstanding at the beginning of the period (in shares)			1,608,557
Granted (in shares)			226,500
Exercised (in shares)	(42,812)		(136,065)
Forfeited or Canceled (in shares)			(125,250)
Outstanding at the end of the period (in shares)	1,573,742		1,573,742		1,608,557
Exercisable at the end of the period (in shares)	573,991		573,991
Weighted Average Exercise Price Per Share
Outstanding at the beginning of the period (in dollars per share)			$ 12.01
Granted (in dollars per share)			17.86
Exercised (in dollars per share)			7.80
Canceled (in dollars per share			14.11
Outstanding at the end of the period (in dollars per share)	$ 13.05		13.05		$ 12.01
Exercisable at the end of the period (in dollars per share)	$ 11.09		$ 11.09
Weighted Average Remaining Term Contractual Life
Average Remaining Contractual Life			7 years 5 months 5 days		7 years 11 months 1 day
Exercisable at the end of the period			5 years 7 months 13 days
Aggregate Intrinsic Value
Outstanding at the beginning of the period (in dollars)			$ 6,774,000
Exercised (in dollars)			1,401,000
Outstanding at the end of the period (in dollars)	$ 8,543,000		8,543,000		$ 6,774,000
Exercisable at the end of the period (in dollars)	$ 4,333,000		$ 4,333,000
Weighted average fair value of options granted (in dollars per share)			$ 17.86
Amended and Restated 2006 Omnibus Plan
Share-Based Compensation
Common stock reserved for issuance (in shares)	3,000,000		3,000,000
Shares available for future issuance	407,281		407,281
Amended and Restated 1994 Stock Incentive Plan
Share-Based Compensation
Common stock reserved for issuance (in shares)	736,378		736,378
Shares available for future issuance	0		0

Income Taxes (Details)

Income Taxes (Details) - USD ($)	3 Months Ended				6 Months Ended	9 Months Ended
	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Sep. 30, 2014	Jun. 30, 2015	Sep. 30, 2015	Sep. 30, 2014
Income Taxes.
Income tax Expense (benefit) from continuing operations	$ (132,000)	$ 276,000	$ 210,000	$ 104,000	$ 486,000	$ 354,000	$ 104,000

Investments Available for Sal41

Investments Available for Sale (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Investments available for sale
Cost	$ 24,546	$ 37,359
Unrealized Gain	16	47
Unrealized loss	(110)	(101)
Fair value of investments available for sale	24,452	37,305
Fair Value
Less than 12 Months	17,139	14,885
12 Months or more		1,032
Total	17,139	15,917
Unrealized Loss
Less than 12 Months	110	55
12 Months or more		46
Total	110	101
Investments
Investments available for sale
Cost	15,731	23,481
Unrealized Gain	7	26
Unrealized loss	(71)	(77)
Fair value of investments available for sale	15,667	23,430
Municipal securities
Investments available for sale
Cost	8,234	12,400
Unrealized Gain	2	13
Unrealized loss	(53)	(47)
Fair value of investments available for sale	8,183	12,366
Fair Value
Less than 12 Months	5,526	1,000
12 Months or more		1,032
Total	5,526	2,032
Unrealized Loss
Less than 12 Months	53	1
12 Months or more		46
Total	53	47
Agency obligations
Investments available for sale
Cost	999	5,401
Unrealized Gain	5	12
Unrealized loss		(28)
Fair value of investments available for sale	1,004	5,385
Fair Value
Less than 12 Months		3,939
Total		3,939
Unrealized Loss
Less than 12 Months		28
Total		28
US and International government agencies
Investments available for sale
Cost	6,498	5,680
Unrealized Gain		1
Unrealized loss	(18)	(2)
Fair value of investments available for sale	6,480	5,679
Fair Value
Less than 12 Months	6,481	2,873
Total	6,481	2,873
Unrealized Loss
Less than 12 Months	18	2
Total	18	2
Cash equivalents
Investments available for sale
Cost	8,815	13,878
Unrealized Gain	9	21
Unrealized loss	(39)	(24)
Fair value of investments available for sale	8,785	13,875
Money market funds and certificates of deposit
Investments available for sale
Cost	1,935	1,043
Fair value of investments available for sale	1,935	1,043
Corporate debt securities & commercial paper
Investments available for sale
Cost	6,880	12,835
Unrealized Gain	9	21
Unrealized loss	(39)	(24)
Fair value of investments available for sale	6,850	12,832
Fair Value
Less than 12 Months	5,132	7,073
Total	5,132	7,073
Unrealized Loss
Less than 12 Months	39	24
Total	$ 39	$ 24

Investments Available for Sal42

Investments Available for Sale (Details 2) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Cost
Maturities Within 3-months	$ 6,113,000		$ 6,113,000		$ 3,056,000
Maturities Between 3 - 12 months	6,634,000		6,634,000		12,658,000
More than 1 year	11,799,000		11,799,000		21,645,000
Cost of investments available for sale	24,546,000		24,546,000		37,359,000
Fair Value
Maturities Within 3-months	6,067,000		6,067,000		3,056,000
Maturities Between 3 - 12 months	6,617,000		6,617,000		12,660,000
More than 1 year	11,768,000		11,768,000		21,589,000
Fair value of investments available for sale	24,452,000		24,452,000		$ 37,305,000
Realized gains (losses) and investment interest income earned on investments available for sale	$ (34,000)	$ 120,000	$ 180,000	$ 268,000

Fair Value (Details)

Fair Value (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Assets
Investments available for sale	$ 24,452	$ 37,305
Recurring | Total
Assets
Investments available for sale	24,452	37,305
Fair value of securities		10,591
Derivative and securities received in business disposition	3,090
Total assets	27,542	47,896
Recurring | Level I
Assets
Investments available for sale	1,935	1,043
Fair value of securities		10,591
Derivative and securities received in business disposition	3,090
Total assets	5,025	11,634
Recurring | Level II
Assets
Investments available for sale	22,517	36,262
Total assets	22,517	36,262
Recurring | Cash equivalents | Total
Assets
Investments available for sale	1,935	1,043
Recurring | Cash equivalents | Level I
Assets
Investments available for sale	1,935	1,043
Recurring | US and International government agencies | Total
Assets
Investments available for sale	6,480	5,679
Recurring | US and International government agencies | Level II
Assets
Investments available for sale	6,480	5,679
Recurring | Agency obligations | Total
Assets
Investments available for sale	1,004	5,385
Recurring | Agency obligations | Level II
Assets
Investments available for sale	1,004	5,385
Recurring | Corporate debt securities & commercial paper | Total
Assets
Investments available for sale	6,850	12,832
Recurring | Corporate debt securities & commercial paper | Level II
Assets
Investments available for sale	6,850	12,832
Recurring | Municipal securities | Total
Assets
Investments available for sale	8,183	12,366
Recurring | Municipal securities | Level II
Assets
Investments available for sale	8,183	12,366
Recurring | Restricted shares of Mesoblast common stock | Total
Assets
Fair value of securities	3,090	10,591
Recurring | Restricted shares of Mesoblast common stock | Level I
Assets
Fair value of securities	$ 3,090	$ 10,591