Pacira BioSciences (PCRX) 10-Q 4 Aug 16 2016 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 31, 2016
Document and Entity Information
Entity Registrant Name	Pacira Pharmaceuticals, Inc.
Entity Central Index Key	1,396,814
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus (Q1,Q2,Q3,FY)	Q2
Amendment Flag	false
Entity Current Reporting Status	Yes
Entity Common Stock, Shares Outstanding		37,278,231

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 25,309	$ 56,984
Short-term investments	137,358	101,981
Accounts receivable, net	28,651	25,855
Inventories, net	60,916	61,645
Prepaid expenses and other current assets	5,755	6,117
Total current assets	257,989	252,582
Long-term investments	0	13,462
Fixed assets, net	99,282	90,324
Goodwill	42,751	30,880
Intangible assets, net	0	81
Other assets	677	406
Total assets	400,699	387,735
Current liabilities:
Accounts payable	4,614	8,739
Accrued expenses	38,330	35,375
Convertible senior notes	106,388	104,040
Current portion of deferred revenue	1,048	1,426
Income taxes payable	58	208
Total current liabilities	150,438	149,788
Deferred revenue	7,747	8,082
Other liabilities	14,163	11,473
Total liabilities	172,348	169,343
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.001; 5,000,000 shares authorized; none issued and outstanding at June 30, 2016 and December 31, 2015	0	0
Common stock, par value $0.001, 250,000,000 shares authorized; 37,273,407 shares issued and outstanding at June 30, 2016; 36,848,319 shares issued and outstanding at December 31, 2015	37	37
Additional paid-in capital	548,277	526,696
Accumulated deficit	(320,101)	(308,289)
Accumulated other comprehensive income (loss)	138	(52)
Total stockholders’ equity	228,351	218,392
Total liabilities and stockholders’ equity	$ 400,699	$ 387,735

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	37,273,407	36,848,319
Common stock, shares outstanding	37,273,407	36,848,319
Treasury stock at cost, shares	0	0

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Net product sales	$ 67,687	$ 58,062	$ 132,189	$ 115,146
Collaborative licensing and milestone revenue	1,356	356	1,713	713
Royalty revenue	597	730	1,212	1,604
Total revenues	69,640	59,148	135,114	117,463
Operating expenses:
Cost of goods sold	23,053	18,929	43,331	36,509
Research and development	9,362	3,649	18,855	9,616
Selling, general and administrative	43,669	34,752	81,626	66,180
Total operating expenses	76,084	57,330	143,812	112,305
Income (loss) from operations	(6,444)	1,818	(8,698)	5,158
Other (expense) income:
Interest income	324	177	576	332
Interest expense	(1,733)	(1,940)	(3,601)	(3,935)
Royalty interest obligation	0	0	0	(71)
Loss on early extinguishment of debt	0	(51)	0	(51)
Other, net	(47)	43	1	(74)
Total other expense, net	(1,456)	(1,771)	(3,024)	(3,799)
Income (loss) before income taxes	(7,900)	47	(11,722)	1,359
Income tax expense	(58)	(39)	(90)	(91)
Net income (loss)	$ (7,958)	$ 8	$ (11,812)	$ 1,268
Net loss per share:
Basic and diluted net income (loss) per share of common stock	$ (0.21)	$ 0
Earnings Per Share, Basic			$ (0.32)	$ 0.03
Weighted average common shares outstanding:
Weighted Average Number of Shares Outstanding, Basic (shares)	37,181	36,481	37,101	36,358
Weighted Average Number of Shares Outstanding, Diluted (shares)	37,181	41,445	37,101	41,612

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (7,958)	$ 8	$ (11,812)	$ 1,268
Other comprehensive income:
Net unrealized gain on investments	89	1	190	53
Total other comprehensive income	89	1	190	53
Comprehensive income (loss)	$ (7,869)	$ 9	$ (11,622)	$ 1,321

CONSOLIDATED STATEMENT OF STOCK

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2016 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Income
Stock Issued During Period, Value, Employee Stock Purchase Plan	$ 995		$ 995
Balances (in shares) at Dec. 31, 2015		36,848
Balances at Dec. 31, 2015	218,392	$ 37	526,696	$ (308,289)	$ (52)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options (shares)		331
Exercise of stock options	4,431	$ 0	4,431
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period		59
Vested restricted stock units	0	$ 0
Stock-based compensation	16,155		16,155
Net unrealized gain on investments	190				190
Net loss	(11,812)			(11,812)
Balances (in shares) at Jun. 30, 2016		37,273
Balances at Jun. 30, 2016	$ 228,351	$ 37	$ 548,277	$ (320,101)	$ 138

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Operating activities:
Net income (loss)	$ (11,812)	$ 1,268
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation of fixed assets and amortization of intangibles	6,381	5,526
Amortization of unfavorable lease obligation and debt issuance costs, net	240	241
Amortization of debt discount	2,044	2,058
Loss on early extinguishment of debt	0	(51)
Stock-based compensation	16,155	14,813
Changes in operating assets and liabilities:
Restricted cash	0	1,509
Accounts receivable, net	(2,796)	(1,915)
Inventories, net	729	(19,506)
Prepaid expenses and other assets	92	1,032
Accounts payable and accrued expenses	(8,658)	2,182
Royalty interest obligation	0	(276)
Other liabilities	2,758	38
Deferred revenue	(713)	(713)
Net cash provided by operating activities	4,420	6,308
Investing activities:
Purchases of fixed assets	(15,921)	(19,706)
Purchases of investments	(121,790)	(92,921)
Sales of investments	100,065	98,179
Payment of contingent consideration	(3,871)	(3,362)
Net cash used in investing activities	(41,517)	(17,810)
Financing activities:
Proceeds from exercise of stock options	4,431	6,975
Proceeds from shares issued under employee stock purchase plan	995	1,195
Conversion of principal and premium paid on convertible senior notes	4	1,466
Net cash provided by financing activities	5,422	6,704
Net decrease in cash and cash equivalents	(31,675)	(4,798)
Cash and cash equivalents, beginning of period	56,984	37,520
Cash and cash equivalents, end of period	25,309	32,722
Supplemental cash flow information:
Cash paid for interest, including royalty interest obligation	1,926	2,297
Cash paid for income taxes, net of refunds	241	159
Non-cash investing and financing activities:
Issuance of stock from conversion of convertible senior notes	0	3,930
Net (decrease) increase in accrued fixed assets	(662)	(4,150)
Accrued payment of contingent consideration	$ (8,000)	$ 0

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	6 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
DESCRIPTION OF BUSINESS	DESCRIPTION OF BUSINESS Pacira Pharmaceuticals, Inc. and its subsidiaries (collectively, the “Company” or “Pacira”) is a specialty pharmaceutical company focused on the development, commercialization and manufacture of proprietary pharmaceutical products, based on its proprietary DepoFoam ® extended release drug delivery technology, for use primarily in hospitals and ambulatory surgery centers. The Company’s lead product, EXPAREL ® (bupivacaine liposome injectable suspension), which consists of bupivacaine encapsulated in DepoFoam, was approved by the United States Food and Drug Administration, or FDA, on October 28, 2011 and launched commercially in April 2012. DepoFoam is also the basis for the Company’s other FDA-approved commercial product, DepoCyt(e), which the Company manufactures for its commercial partners. Pacira is subject to risks common to companies in similar industries and stages of development, including, but not limited to, competition from larger companies, reliance on revenue from few products, reliance on a single manufacturing site, new technological innovations, dependence on key personnel, reliance on third-party service providers and sole source suppliers, protection of proprietary technology and compliance with government regulations.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation These interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the Securities and Exchange Commission for interim reporting. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in complete annual financial statements have been condensed or omitted. Therefore, these interim consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . The consolidated financial statements at June 30, 2016 , and for the three and six months ended June 30, 2016 and 2015 , are unaudited, but include all adjustments (consisting of only normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial information set forth herein in accordance with GAAP. The consolidated balance sheet at December 31, 2015 is derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . The consolidated financial statements as presented reflect certain reclassifications from previously issued financial statements to conform to the current year presentation. The accounts of wholly-owned subsidiaries are included in the consolidated financial statements. Intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the interim periods are not necessarily indicative of results that may be expected for any other interim periods or for the full year. Concentration of Major Customers The Company’s customers are national and regional wholesalers of pharmaceutical products as well as commercial, collaborative and licensing partners. The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers (including AmerisourceBergen Health Corporation, Cardinal Health, Inc. and McKesson Drug Company), but shipments of the product are sent directly to individual accounts, such as hospitals, ambulatory surgery centers and individual doctors. The table below includes the percentage of revenue comprised by the Company’s three largest customers (i.e., wholesalers or commercial partners) in each period presented: Three Months Ended Six Months Ended 2016 2015 2016 2015 Largest customer 32% 32% 32% 31% Second largest customer 27% 28% 28% 29% Third largest customer 26% 27% 27% 27% 85% 87% 87% 87% Recent Accounting Pronouncements Recently Adopted In April 2015, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , which requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. The Company adopted this standard on January 1, 2016. The Company applied the new guidance retrospectively to all prior periods presented in the financial statements to conform to the 2016 presentation. As a result, $1.9 million of debt issuance costs related to the Company’s convertible senior notes at December 31, 2015 were reclassified from other assets to a reduction in the carrying value of the Company’s convertible senior notes. Not Adopted as of June 30, 2016 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which requires that an entity recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to its customers. In order to achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date , which deferred the effective date of revenue standard ASU 2014-09 by one year and permits early adoption on a limited basis. Subsequently, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations; ASU 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing and ASU 2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow Scope Improvements and Practical Expedients , which provide clarification and additional guidance related to ASU 2014-09. These updates will replace existing revenue recognition guidance under GAAP when it becomes effective for the Company beginning January 1, 2018, with early adoption permitted in the first quarter of 2017. The updated standards will permit the use of either the retrospective or cumulative effect transition method. The Company is continuing to evaluate the impact of these updates on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . The standard requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is defined as one of three different measures, one of which is net realizable value). The standard is effective for the Company prospectively beginning January 1, 2017. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) . This update requires lessees to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. The standard is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those annual periods. Early adoption is permitted. The Company is evaluating the impact of ASU 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This update includes multiple provisions intended to simplify various aspects of the accounting for share-based payment transactions including accounting for excess tax benefits and tax deficiencies, classification of excess tax benefits in the statement of cash flows and accounting for award forfeitures. This update is effective for annual and interim reporting periods of public entities beginning after December 15, 2016, with early adoption permitted. The Company is evaluating the impact of ASU 2016-09 on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) , which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. This update also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. This ASU is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact of ASU 2016-13 on the consolidated financial statements. Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company.

INVENTORIES

INVENTORIES	6 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
INVENTORIES	INVENTORIES The components of inventories are as follows (in thousands): June 30, December 31, 2016 2015 Raw materials $ 14,436 $ 16,712 Work-in-process 1,965 12,152 Finished goods 44,515 32,781 Total $ 60,916 $ 61,645

FIXED ASSETS

FIXED ASSETS	6 Months Ended
	Jun. 30, 2016
Property, Plant and Equipment [Abstract]
FIXED ASSETS	FIXED ASSETS Fixed assets, summarized by major category, consist of the following (in thousands): June 30, December 31, 2016 2015 Machinery and laboratory equipment $ 32,362 $ 29,864 Leasehold improvements 32,665 30,834 Computer equipment and software 5,296 4,007 Office furniture and equipment 1,606 1,439 Construction in progress 58,563 49,097 Total 130,492 115,241 Less: accumulated depreciation (31,210 ) (24,917 ) Fixed assets, net $ 99,282 $ 90,324 For the three months ended June 30, 2016 and 2015, depreciation expense was $3.2 million and $2.7 million , respectively. For the three months ended June 30, 2016 and 2015, capitalized interest on the construction of manufacturing sites was $0.4 million and $0.2 million , respectively. For the six months ended June 30, 2016 and 2015, depreciation expense was $6.3 million and $5.4 million , respectively. For the six months ended June 30, 2016 and 2015, capitalized interest on the construction of manufacturing sites was $0.7 million and $0.4 million , respectively. As of June 30, 2016 and December 31, 2015 , total fixed assets, net, includes leasehold improvements and manufacturing process equipment located in England in the amount of $29.9 million and $25.9 million , respectively.

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS	6 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Intangible Assets	GOODWILL AND INTANGIBLE ASSETS In March 2007, the Company acquired from SkyePharma Holding, Inc., or Skyepharma, its California operating subsidiary, referred to herein as the Acquisition. The Company’s goodwill arose in April 2012 from a contingent milestone payment to Skyepharma in connection with the Acquisition. The Acquisition was accounted for under Statement of Financial Accounting Standards 141, Accounting for Business Combinations , which was the effective GAAP standard at the Acquisition date. In connection with the Acquisition, the Company agreed to certain earn-out payments based on a percentage of net sales of EXPAREL collected and certain other yet-to-be-developed products, as well as milestone payments for EXPAREL, as follows: (i) $10.0 million upon the first commercial sale in the United States (met April 2012); (ii) $4.0 million upon the first commercial sale in a major E.U. country (United Kingdom, France, Germany, Italy and Spain); (iii) $8.0 million when annual net sales collected reach $100.0 million (met September 2014); (iv) $8.0 million when annual net sales collected reach $250.0 million (met June 2016); and (v) $32.0 million when annual net sales collected reach $500.0 million . The first milestone was met in April 2012, resulting in a $10.0 million payment to Skyepharma. The Company recorded this payment net of a $2.0 million contingent consideration liability recognized at the time of the Acquisition, resulting in $8.0 million recorded as goodwill. In September 2014, the Company made an $8.0 million milestone payment to Skyepharma in connection with achieving $100.0 million of annual EXPAREL net sales collected, and in June 2016, the Company recorded an $8.0 million milestone payable for achieving $250.0 million of annual EXPAREL net sales collected, with payment to be made in the third quarter of 2016. For purposes of meeting milestone payments, annual net sales are measured on a rolling quarterly basis. Cumulatively through June 30, 2016 , the Company has recorded an additional $18.8 million as goodwill for earn-out payments which are based on a percentage of net sales of EXPAREL collected. Any remaining earn-out payments will also be treated as additional costs of the Acquisition and, therefore, recorded as goodwill if and when each contingency is resolved. The change in the carrying value of goodwill is summarized as follows (in thousands): Carrying Value Balance at December 31, 2015 $ 30,880 Milestone payments triggered by collections of net sales of EXPAREL 8,000 Percentage payments on collections of net sales of EXPAREL 3,871 Balance at June 30, 2016 $ 42,751 Intangible assets, net, consisted of core technology, developed technology and trademarks and trade names acquired in the Acquisition and are summarized as follows (in thousands): June 30, 2016 December 31, 2015 Amortizable Intangible Assets: Gross Accumulated Intangible Gross Carrying Value Accumulated Amortization Intangible Assets, Net Estimated Core technology $ 2,900 $ (2,900 ) $ — $ 2,900 $ (2,819 ) $ 81 9 Years Developed technology 11,700 (11,700 ) — 11,700 (11,700 ) — 7 Years Trademarks and trade names 400 (400 ) — 400 (400 ) — 7 Years Total intangible assets $ 15,000 $ (15,000 ) $ — $ 15,000 $ (14,919 ) $ 81 There was no amortization expense for intangible assets for the three months ended June 30, 2016 and $0.1 million for the six months ended June 30, 2016 . For the three and six months ended June 30, 2015 , amortization expense for intangible assets was $0.1 million and $0.2 million , respectively.

DEBT

DEBT	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
DEBT	DEBT The composition of the Company’s debt and financing obligations is as follows (in thousands): June 30, December 31, 2016 2015 3.25% convertible senior notes $ 118,531 $ 118,533 Deferred financing costs (1,582 ) (1,888 ) Discount on debt (10,561 ) (12,605 ) Total debt, net of debt discount $ 106,388 $ 104,040 On January 23, 2013, the Company completed a private placement of $120.0 million in aggregate principal amount of 3.25% convertible senior notes due 2019, or Notes, and entered into an indenture agreement, or Indenture, with respect to the Notes. The Notes accrue interest at a fixed rate of 3.25% per year, payable semiannually in arrears on February 1 and August 1 of each year. The Notes mature on February 1, 2019. On or after August 1, 2018, until the close of business on the second scheduled trading day immediately preceding February 1, 2019, holders may convert their Notes at any time. Upon conversion, holders will receive cash up to the principal amount of the Notes and, with respect to any excess conversion value, may receive cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s option. The initial conversion rate for the Notes was 40.2945 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of approximately $24.82 per share of the Company’s common stock. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. Holders may convert their Notes prior to August 1, 2018 only if certain circumstances are met, including if during the previous calendar quarter, the sales price of the Company’s common stock was greater than 130% of the conversion price then applicable for at least 20 out of the last 30 consecutive trading days of the quarter. During the quarter ended June 30, 2016 , this condition for conversion was met. As a result, the Notes are classified as a current obligation and will be convertible until September 30, 2016 . As of June 30, 2016 , the Notes had a market price of $1,485 per $1,000 principal amount, compared to an estimated conversion value of $1,359 per $1,000 principal amount. In the event of conversion, holders would forgo all future interest payments, any unpaid accrued interest and the possibility of further stock price appreciation. Upon the receipt of conversion requests, the settlement of the Notes will be paid pursuant to the terms of the Indenture, which state that the principal must be settled in cash. In the event that all of the Notes are converted, the Company would be required to repay the $118.5 million in principal value and approximately $42.6 million of cash or issue approximately 1.3 million shares of its common stock (or a combination of cash and shares of its common stock at the Company’s option) to settle the conversion premium as of June 30, 2016 , causing dilution to the Company’s shareholders and/or significant expenditures of the Company’s cash and liquid securities. In February 2015, the Company received notice of an election for conversion from one of the holders of the Notes. The principal amount of the conversion request was $1.5 million which was paid in cash pursuant to the terms of the Indenture in April 2015. The Company elected to settle the conversion premium by issuing 44,287 shares of its common stock, calculated based on a daily volume-weighted adjusted price over a 40 trading-day observation period which ended on April 8, 2015. The Company realized a $0.1 million loss on the extinguishment of the converted Notes. The Company has completed other immaterial conversion requests. While the Notes are classified in the Company’s consolidated balance sheets at June 30, 2016 and December 31, 2015 as a current obligation, the future convertibility and resulting balance sheet classification of this liability will be monitored at each quarterly reporting date and will be analyzed dependent upon market prices of the Company’s common stock during the prescribed measurement periods. In the event that the holders of the Notes continue to have the election to convert the Notes at any time during the prescribed measurement period, the Notes will continue to be considered a current obligation and classified as such. Prior to August 1, 2017, in the event that none of the conversion conditions are met in a given quarter, the Notes would be reclassified as a long-term liability. On or after February 1, 2017, the Company may redeem for cash all or part of the Notes if the last reported sale price (as defined in the Indenture) of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period, ending within five trading days prior to the date on which the Company provides notice of redemption. Under Accounting Standards Codification 470-20, Debt with Conversion and Other Options , an entity must separately account for the liability and equity components of convertible debt instruments (such as the Notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The equity component is recorded in additional paid-in capital in the consolidated balance sheet at the issuance date and that equity component is treated as a discount on the liability component of the Notes. The initial carrying value of the liability component of $95.1 million was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying value of the equity component, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the Notes. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The Company allocated the total transaction costs of $4.7 million related to the issuance of the Notes to the liability and equity components of the Notes based on their relative values. Transaction costs attributable to the liability component are amortized to interest expense over the six -year term of the Notes, and transaction costs attributable to the equity component are netted with the equity component in stockholders’ equity. The following table sets forth the total interest expense recognized (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Contractual interest expense $ 963 $ 963 $ 1,926 $ 1,930 Amortization of debt issuance costs 153 153 306 308 Amortization of debt discount 1,022 1,024 2,044 2,058 Capitalized interest (Note 4) (405 ) (200 ) (675 ) (361 ) Total $ 1,733 $ 1,940 $ 3,601 $ 3,935 Effective interest rate on the Notes 7.22 % 7.20 % 7.22 % 7.20 %

FINANCIAL INSTRUMENTS

FINANCIAL INSTRUMENTS	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
FINANCIAL INSTRUMENTS	FINANCIAL INSTRUMENTS Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in the principal or most advantageous market in an orderly transaction. To increase consistency and comparability in fair value measurements, the FASB established a three-level hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of fair value measurements are: • Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. • Level 2—Observable prices that are based on inputs not quoted on active markets, but corroborated by market data. • Level 3—Unobservable inputs that are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs. The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these items. The fair value of the Notes at June 30, 2016 is calculated utilizing market quotations from an over-the-counter trading market for these Notes (Level 2). The carrying amount and fair value of the Notes are as follows (in thousands): Financial Liabilities Carried at Historical Cost Carrying Value Fair Value Measurements Using June 30, 2016 Level 1 Level 2 Level 3 3.25% convertible senior notes * $ 106,388 $ — $ 176,019 $ — * The fair value of the Notes was based on the closing price of the Company’s common stock of $33.73 per share at June 30, 2016 compared to a conversion price of $24.82 per share which, if converted, would result in an approximate conversion premium of 1.3 million shares or $42.6 million of cash. The maximum conversion premium that can be due on the Notes is 4.8 million shares, which assumes no increases in the conversion rate for certain corporate events. Short-term investments consist of asset-backed securities collateralized by credit card receivables, investment grade commercial paper and corporate bonds with maturities less than one year. Long-term investments consist of corporate bonds with maturities greater than one year. The net unrealized gains and losses from the Company’s short-term and long-term investments are reported in other comprehensive income. At June 30, 2016 , all of the Company’s short-term investments are classified as available for sale investments and are determined to be Level 2 instruments, which are measured at fair value using standard industry models with observable inputs. The fair value of the commercial paper is measured based on a standard industry model that uses the three-month Treasury bill rate as an observable input. The fair value of the asset-backed securities and corporate bonds is principally measured or corroborated by trade data for identical issues in which related trading activity is not sufficiently frequent to be considered a Level 1 input or that of comparable securities. At June 30, 2016 , the Company’s short-term investments were rated A or better by Standard & Poor’s. The following summarizes the Company’s investments at June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 Debt Securities Cost Gross Gross Fair Value Short-term: Asset-backed securities $ 31,908 $ 9 $ (1 ) $ 31,916 Commercial paper 36,839 119 — 36,958 Corporate bonds 68,473 29 (18 ) 68,484 Total $ 137,220 $ 157 $ (19 ) $ 137,358 December 31, 2015 Debt Securities Cost Gross Gross Fair Value Short-term: Asset-backed securities $ 27,484 $ — $ (15 ) $ 27,469 Commercial paper 35,191 31 — 35,222 Corporate bonds 39,319 2 (31 ) 39,290 Subtotal 101,994 33 (46 ) 101,981 Long-term: Corporate bonds 13,501 — (39 ) 13,462 Total $ 115,495 $ 33 $ (85 ) $ 115,443 Certain assets and liabilities are measured at fair value on a nonrecurring basis, including assets and liabilities acquired in a business combination and long-lived assets, which would be recognized at fair value if deemed to be impaired or if reclassified as assets held for sale. The fair value in these instances would be determined using Level 3 inputs. At June 30, 2016 , the Company had no financial instruments which were measured using Level 3 inputs. Credit Risk Financial instruments which potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. At times, such amounts may exceed federally-insured limits. The Company performs ongoing credit evaluations of its customers as warranted and generally does not require collateral. As of June 30, 2016 , three customers each accounted for over 10% of the Company’s accounts receivable, at 28% , 26% and 26% , respectively. At December 31, 2015 , three customers each accounted for over 10% of the Company’s accounts receivable, at 34% , 28% and 27% , respectively (for additional information regarding the Company’s customers, see Note 2 , Summary of Significant Accounting Policies ). Revenues are primarily derived from major wholesalers and pharmaceutical companies which generally have significant cash resources. Allowances for doubtful accounts receivable are maintained based on historical payment patterns, aging of accounts receivable and the Company’s actual write-off history. As of June 30, 2016 and December 31, 2015 , no allowances for doubtful accounts were deemed necessary by the Company on its accounts receivable.

STOCK PLANS

STOCK PLANS	6 Months Ended
	Jun. 30, 2016
Stockholders' Equity Note [Abstract]
STOCK PLANS	STOCK PLANS Stock Incentive Plans In June 2016, the Company’s stockholders approved the Amended and Restated 2011 Stock Incentive Plan, or 2011 Plan. The 2011 Plan was amended to, among other things, increase the number of shares of common stock authorized for issuance as equity awards under the plan by 4,000,000 shares. Stock-Based Compensation The Company recognized stock-based compensation expense in its consolidated statements of operations as follows (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Cost of goods sold $ 1,610 $ 1,586 $ 3,159 $ 2,689 Research and development 1,015 561 1,908 2,070 Selling, general and administrative 5,040 5,149 11,088 10,054 Total $ 7,665 $ 7,296 $ 16,155 $ 14,813 Stock-based compensation from: Stock options (employee awards) $ 5,789 $ 6,739 $ 12,633 $ 13,049 Stock options (consultant awards) 437 (54 ) 723 942 Restricted stock units (employee awards) 1,140 369 2,225 369 Employee stock purchase plan 299 242 574 453 Total $ 7,665 $ 7,296 $ 16,155 $ 14,813 Employee Stock Purchase Plan The Company’s 2014 Employee Stock Purchase Plan, or ESPP, features two six-month offering periods per year, running from January 1 to June 30 and July 1 to December 31. Under the ESPP, employees may elect to contribute after-tax earnings to purchase shares at 85% of the closing fair market value of the Company’s common stock on either the offering date or the purchase date, whichever is less. During the six months ended June 30, 2016 , 34,705 shares were purchased under the ESPP. Equity Awards The following tables contain information about the Company’s stock option and restricted stock unit, or RSU, activity for the six months ended June 30, 2016 : Stock Options Number of Options Weighted Average Exercise Price Outstanding at December 31, 2015 4,645,722 $ 44.03 Granted 741,003 44.68 Exercised (331,272 ) 13.39 Forfeited (273,630 ) 72.50 Expired (119,848 ) 81.26 Outstanding at June 30, 2016 4,661,975 43.68 Restricted Stock Units Number of Units Weighted Average Grant Date Fair Value Unvested at December 31, 2015 216,198 $ 78.59 Granted 246,281 40.46 Vested (59,111 ) 79.33 Forfeited (24,753 ) 79.43 Unvested at June 30, 2016 378,615 53.56 The weighted average fair value of stock options granted for the six months ended June 30, 2016 and 2015 was $22.06 and $40.92 per share, respectively. The fair values of stock options granted were estimated using the Black-Scholes option valuation model with the following weighted average assumptions: Six Months Ended 2016 2015 Expected dividend yield None None Risk free interest rate 1.21 - 1.85% 1.40 - 1.85% Expected volatility 53.02% 53.28% Expected term of options 5.75 years 5.75 years

STOCKHOLDERS' EQUITY

STOCKHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2016
Stockholders' Equity Note [Abstract]
Stockholders' Equity	STOCKHOLDERS’ EQUITY Accumulated Other Comprehensive Income (Loss) The following table illustrates the changes in the balances of the Company’s accumulated other comprehensive income (loss) for the periods presented (in thousands): Six Months Ended Net unrealized gains (losses) from available for sale investments: 2016 2015 Balance at beginning of period $ (52 ) $ (80 ) Other comprehensive income before reclassifications 190 53 Amounts reclassified from accumulated other comprehensive income (loss) — — Balance at end of period $ 138 $ (27 )

NET INCOME (LOSS) PER SHARE

NET INCOME (LOSS) PER SHARE	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
NET INCOME (LOSS) PER SHARE	NET INCOME (LOSS) PER SHARE Basic net income (loss) per share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share is calculated by dividing the net income (loss) attributable to common shares by the weighted average number of common shares outstanding plus dilutive potential common stock outstanding during the period. Potential common shares include the shares of common stock issuable upon the exercise of outstanding stock options and warrants, the vesting of RSUs and the purchase of shares from the ESPP (using the treasury stock method) as well as the conversion of the excess conversion value on the Notes. As discussed in Note 6, Debt, the Company must settle the principal of the Notes in cash upon conversion, and it may settle any conversion premium in either cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s option. For purposes of calculating the dilutive impact of the conversion premium on the Notes, it is presumed that the conversion premium will be settled in common stock. Potential common shares are excluded from the diluted net income (loss) per share computation to the extent they would be antidilutive. Because the Company reported a net loss for the three and six months ended June 30, 2016 , no potentially dilutive securities have been included in the computation of diluted net loss per share for those periods. The following table sets forth the computation of basic and diluted net income (loss) per share for the three and six months ended June 30, 2016 and 2015 (in thousands, except per share amounts): Three Months Ended Six Months Ended 2016 2015 2016 2015 Numerator: Net income (loss) $ (7,958 ) $ 8 $ (11,812 ) $ 1,268 Denominator: Weighted average shares of common stock outstanding—basic 37,181 36,481 37,101 36,358 Computation of diluted securities: Dilutive effect of stock options — 1,680 — 1,782 Dilutive effect of conversion premium on the Notes — 3,277 — 3,465 Dilutive effect of warrants — 6 — 6 Dilutive effect of ESPP — 1 — 1 Weighted average shares of common stock outstanding—diluted 37,181 41,445 37,101 41,612 Net income (loss) per share: Basic and diluted net income (loss) per share of common stock $ (0.21 ) $ 0.00 $ (0.32 ) $ 0.03 The following outstanding stock options, RSUs, conversion premium on the Notes, warrants and ESPP purchase options are antidilutive in the periods presented (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Weighted average number of stock options 4,254 1,738 4,288 1,530 Weighted average number of RSUs 218 — 212 — Conversion premium on the Notes 2,364 — 2,557 — Weighted average number of warrants — — 1 — Weighted average ESPP purchase options — — 12 — Total 6,836 1,738 7,070 1,530

TAXES

TAXES	6 Months Ended
	Jun. 30, 2016
Income Tax Disclosure [Abstract]
TAXES	TAXES Income (loss) before income taxes is as follows (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Income (loss) before income taxes: Domestic $ (7,526 ) $ 352 $ (11,025 ) $ 2,238 Foreign (374 ) (305 ) (697 ) (879 ) Total income (loss) before income taxes $ (7,900 ) $ 47 $ (11,722 ) $ 1,359 The Company recorded tax provisions of less than $0.1 million in both of the three and six month periods ended June 30, 2016 and 2015, respectively. The provision for income taxes is recorded based upon the best current estimate of the Company’s annual effective tax rate, or AETR. Generally, the AETR is the result of a mix of profits and losses the Company and its subsidiaries earn in multiple tax jurisdictions with different income tax rates. For the three and six months ended June 30, 2016 , the Company determined that its actual year-to-date rate was the best estimate of its AETR. For the three and six months ended June 30, 2015 , the Company estimated its AETR based on full-year estimates for ordinary income and related tax expense. The tax provisions reflect federal alternative minimum taxes as well as state income taxes. Due to the fact that the Company’s deferred tax assets are fully offset by a valuation allowance, the tax provisions do not reflect deferred tax expenses.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES Leases The Company leases research and development, manufacturing and warehouse facilities in San Diego, California which expire in August 2020 and its corporate headquarters in Parsippany, New Jersey which expires in March 2028. As of June 30, 2016 , annual aggregate minimum payments due under the Company’s lease obligations are as follows (in thousands): Year Aggregate Minimum Payments 2016 (remaining six months) $ 3,818 2017 7,878 2018 8,081 2019 8,303 2020 6,420 2021 through 2028 8,731 Total $ 43,231 Litigation From time to time, the Company has been and may again become involved in legal proceedings arising in the ordinary course of its business, including those related to patents, product liability and government investigations. Except as described below, the Company is not presently a party to any litigation which it believes to be material, and is not aware of any pending or threatened litigation against the Company which it believes could have a material adverse effect on its business, operating results, financial condition or cash flows. In April 2015, the Company received a subpoena from the U.S. Department of Justice, U.S. Attorney’s Office for the District of New Jersey, requiring the production of a broad range of documents pertaining to marketing and promotional practices related to EXPAREL. The Company is cooperating with the government’s inquiry. The Company can make no assurances as to the time or resources that will need to be devoted to this inquiry or its final outcome, or the impact, if any, of this inquiry or any proceedings on its business, financial condition, results of operations and cash flows.

COMMERCIAL PARTNERS AND OTHER A

COMMERCIAL PARTNERS AND OTHER AGREEMENTS	6 Months Ended
	Jun. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
COMMERCIAL PARTNERS AND OTHER AGREEMENTS	NOTE 13—COMMERCIAL PARTNERS AND OTHER AGREEMENTS Aratana Therapeutics, Inc. On December 5, 2012, the Company entered into a worldwide license, development and commercialization agreement with Aratana Therapeutics, Inc., or Aratana. Under the agreement, the Company granted Aratana an exclusive royalty-bearing license, including the limited right to grant sublicenses, for the development and commercialization of the Company’s bupivacaine liposome injectable suspension product for animal health indications. Under the agreement, Aratana will develop and seek approval for the use of the product in veterinary surgery to manage postsurgical pain, focusing initially on developing the product for cats and dogs. In connection with its entry into the license agreement, the Company received a one-time payment of $1.0 million . In December 2013, the Company received a $0.5 million milestone payment under the agreement. In June 2016, the Company recorded milestone revenue for two additional milestones totaling $1.0 million . The Company is eligible to receive up to an additional aggregate $41.0 million upon the achievement of development and commercial milestones. Once the product has been approved by the FDA for sale in the United States, Aratana will be required to pay the Company a tiered double digit royalty on net sales made in the United States. If the product is approved by foreign regulatory agencies for sale outside of the United States, Aratana will be required to pay the Company a tiered double digit royalty on such net sales. Royalty rates will be reduced by a certain percentage upon the entry of a generic competitor for animal health indications into a jurisdiction or if Aratana must pay royalties to third parties under certain circumstances. The Company’s Chief Executive Officer and Chairman is a managing director at MPM Asset Management, LLC, which holds capital stock of Aratana and one of the Company’s directors is also a director of Aratana. CrossLink BioScience, LLC In October 2013, the Company and CrossLink BioScience, LLC, or CrossLink, commenced a five -year arrangement for the promotion and sale of EXPAREL, pursuant to the terms of a Master Distributor Agreement (as amended, the “Agreement”). On June 30, 2016, the Company provided notice to CrossLink electing to terminate the Agreement effective as of September 30, 2016. In connection with the termination of the Agreement, a termination fee based on a percentage of earned performance-based fees will be due to CrossLink. This fee, estimated to be approximately $7.2 million , is payable to CrossLink quarterly over two years beginning in the fourth quarter of 2016 and was recorded in selling, general and administrative expense in the consolidated statements of operations. At June 30, 2016 , $3.6 million is classified in accrued expenses and $3.6 million is classified in other liabilities.

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Basis of Presentation and Principles of Consolidation	Basis of Presentation and Principles of Consolidation These interim consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the Securities and Exchange Commission for interim reporting. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in complete annual financial statements have been condensed or omitted. Therefore, these interim consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . The consolidated financial statements at June 30, 2016 , and for the three and six months ended June 30, 2016 and 2015 , are unaudited, but include all adjustments (consisting of only normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial information set forth herein in accordance with GAAP. The consolidated balance sheet at December 31, 2015 is derived from the audited consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . The consolidated financial statements as presented reflect certain reclassifications from previously issued financial statements to conform to the current year presentation. The accounts of wholly-owned subsidiaries are included in the consolidated financial statements. Intercompany accounts and transactions have been eliminated in consolidation. The results of operations for the interim periods are not necessarily indicative of results that may be expected for any other interim periods or for the full year.
Concentration of Major Customers	Concentration of Major Customers The Company’s customers are national and regional wholesalers of pharmaceutical products as well as commercial, collaborative and licensing partners. The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers (including AmerisourceBergen Health Corporation, Cardinal Health, Inc. and McKesson Drug Company), but shipments of the product are sent directly to individual accounts, such as hospitals, ambulatory surgery centers and individual doctors.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Recently Adopted In April 2015, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs , which requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of being presented as an asset. Debt disclosures will include the face amount of the debt liability and the effective interest rate. The update requires retrospective application and represents a change in accounting principle. The update is effective for fiscal years beginning after December 15, 2015. The Company adopted this standard on January 1, 2016. The Company applied the new guidance retrospectively to all prior periods presented in the financial statements to conform to the 2016 presentation. As a result, $1.9 million of debt issuance costs related to the Company’s convertible senior notes at December 31, 2015 were reclassified from other assets to a reduction in the carrying value of the Company’s convertible senior notes. Not Adopted as of June 30, 2016 In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , which requires that an entity recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to its customers. In order to achieve this core principle, an entity should apply the following steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when (or as) the entity satisfies a performance obligation. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers: Deferral of the Effective Date , which deferred the effective date of revenue standard ASU 2014-09 by one year and permits early adoption on a limited basis. Subsequently, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations; ASU 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing and ASU 2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow Scope Improvements and Practical Expedients , which provide clarification and additional guidance related to ASU 2014-09. These updates will replace existing revenue recognition guidance under GAAP when it becomes effective for the Company beginning January 1, 2018, with early adoption permitted in the first quarter of 2017. The updated standards will permit the use of either the retrospective or cumulative effect transition method. The Company is continuing to evaluate the impact of these updates on its consolidated financial statements. In July 2015, the FASB issued ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory . The standard requires entities to measure most inventory “at the lower of cost and net realizable value,” thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market (market in this context is defined as one of three different measures, one of which is net realizable value). The standard is effective for the Company prospectively beginning January 1, 2017. The adoption of ASU 2015-11 is not expected to have a material impact on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (ASC 842) . This update requires lessees to recognize lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous authoritative guidance. This update also introduces new disclosure requirements for leasing arrangements. The standard is effective for annual reporting periods beginning after December 15, 2018 and interim periods within those annual periods. Early adoption is permitted. The Company is evaluating the impact of ASU 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This update includes multiple provisions intended to simplify various aspects of the accounting for share-based payment transactions including accounting for excess tax benefits and tax deficiencies, classification of excess tax benefits in the statement of cash flows and accounting for award forfeitures. This update is effective for annual and interim reporting periods of public entities beginning after December 15, 2016, with early adoption permitted. The Company is evaluating the impact of ASU 2016-09 on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326) , which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. This update also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. This ASU is effective for annual reporting periods beginning after December 15, 2019, with early adoption permitted. The Company is evaluating the impact of ASU 2016-13 on the consolidated financial statements. Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company.

SUMMARY OF SIGNIFICANT ACCOUN22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2016
Accounting Policies [Abstract]
Schedule of percentage of revenue comprised by the three largest customers (i.e. wholesalers or commercial partners)	The table below includes the percentage of revenue comprised by the Company’s three largest customers (i.e., wholesalers or commercial partners) in each period presented: Three Months Ended Six Months Ended 2016 2015 2016 2015 Largest customer 32% 32% 32% 31% Second largest customer 27% 28% 28% 29% Third largest customer 26% 27% 27% 27% 85% 87% 87% 87%

INVENTORIES (Tables)

INVENTORIES (Tables)	6 Months Ended
	Jun. 30, 2016
Inventory Disclosure [Abstract]
Schedule of components of inventories	The components of inventories are as follows (in thousands): June 30, December 31, 2016 2015 Raw materials $ 14,436 $ 16,712 Work-in-process 1,965 12,152 Finished goods 44,515 32,781 Total $ 60,916 $ 61,645

FIXED ASSETS (Tables)

FIXED ASSETS (Tables)	6 Months Ended
	Jun. 30, 2016
Property, Plant and Equipment [Abstract]
Schedule of fixed assets summarized by major category	Fixed assets, summarized by major category, consist of the following (in thousands): June 30, December 31, 2016 2015 Machinery and laboratory equipment $ 32,362 $ 29,864 Leasehold improvements 32,665 30,834 Computer equipment and software 5,296 4,007 Office furniture and equipment 1,606 1,439 Construction in progress 58,563 49,097 Total 130,492 115,241 Less: accumulated depreciation (31,210 ) (24,917 ) Fixed assets, net $ 99,282 $ 90,324

GOODWILL AND INTANGIBLE ASSETS

GOODWILL AND INTANGIBLE ASSETS (Tables)	6 Months Ended
	Jun. 30, 2016
Goodwill and Intangible Assets Disclosure [Abstract]
Schedule of Goodwill	The change in the carrying value of goodwill is summarized as follows (in thousands): Carrying Value Balance at December 31, 2015 $ 30,880 Milestone payments triggered by collections of net sales of EXPAREL 8,000 Percentage payments on collections of net sales of EXPAREL 3,871 Balance at June 30, 2016 $ 42,751
Summary of intangible assets	Intangible assets, net, consisted of core technology, developed technology and trademarks and trade names acquired in the Acquisition and are summarized as follows (in thousands): June 30, 2016 December 31, 2015 Amortizable Intangible Assets: Gross Accumulated Intangible Gross Carrying Value Accumulated Amortization Intangible Assets, Net Estimated Core technology $ 2,900 $ (2,900 ) $ — $ 2,900 $ (2,819 ) $ 81 9 Years Developed technology 11,700 (11,700 ) — 11,700 (11,700 ) — 7 Years Trademarks and trade names 400 (400 ) — 400 (400 ) — 7 Years Total intangible assets $ 15,000 $ (15,000 ) $ — $ 15,000 $ (14,919 ) $ 81

DEBT (Tables)

DEBT (Tables)	6 Months Ended
	Jun. 30, 2016
Debt Disclosure [Abstract]
Schedule of composition of the Company's debt and financing obligations	The composition of the Company’s debt and financing obligations is as follows (in thousands): June 30, December 31, 2016 2015 3.25% convertible senior notes $ 118,531 $ 118,533 Deferred financing costs (1,582 ) (1,888 ) Discount on debt (10,561 ) (12,605 ) Total debt, net of debt discount $ 106,388 $ 104,040
Schedule of total interest expense recognized related to the Notes	The following table sets forth the total interest expense recognized (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Contractual interest expense $ 963 $ 963 $ 1,926 $ 1,930 Amortization of debt issuance costs 153 153 306 308 Amortization of debt discount 1,022 1,024 2,044 2,058 Capitalized interest (Note 4) (405 ) (200 ) (675 ) (361 ) Total $ 1,733 $ 1,940 $ 3,601 $ 3,935 Effective interest rate on the Notes 7.22 % 7.20 % 7.22 % 7.20 %

FINANCIAL INSTRUMENTS (Tables)

FINANCIAL INSTRUMENTS (Tables)	6 Months Ended
	Jun. 30, 2016
Fair Value Disclosures [Abstract]
Schedule of carrying amount and fair value of the long-term debt	The carrying amount and fair value of the Notes are as follows (in thousands): Financial Liabilities Carried at Historical Cost Carrying Value Fair Value Measurements Using June 30, 2016 Level 1 Level 2 Level 3 3.25% convertible senior notes * $ 106,388 $ — $ 176,019 $ — * The fair value of the Notes was based on the closing price of the Company’s common stock of $33.73 per share at June 30, 2016 compared to a conversion price of $24.82 per share which, if converted, would result in an approximate conversion premium of 1.3 million shares or $42.6 million of cash. The maximum conversion premium that can be due on the Notes is 4.8 million shares, which assumes no increases in the conversion rate for certain corporate events.
Schedule of short-term investments	The following summarizes the Company’s investments at June 30, 2016 and December 31, 2015 (in thousands): June 30, 2016 Debt Securities Cost Gross Gross Fair Value Short-term: Asset-backed securities $ 31,908 $ 9 $ (1 ) $ 31,916 Commercial paper 36,839 119 — 36,958 Corporate bonds 68,473 29 (18 ) 68,484 Total $ 137,220 $ 157 $ (19 ) $ 137,358 December 31, 2015 Debt Securities Cost Gross Gross Fair Value Short-term: Asset-backed securities $ 27,484 $ — $ (15 ) $ 27,469 Commercial paper 35,191 31 — 35,222 Corporate bonds 39,319 2 (31 ) 39,290 Subtotal 101,994 33 (46 ) 101,981 Long-term: Corporate bonds 13,501 — (39 ) 13,462 Total $ 115,495 $ 33 $ (85 ) $ 115,443

STOCK PLANS (Tables)

STOCK PLANS (Tables)	6 Months Ended
	Jun. 30, 2016
Stockholders' Equity Note [Abstract]
Schedule of recognized stock-based compensation in consolidated statements of operations	The Company recognized stock-based compensation expense in its consolidated statements of operations as follows (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Cost of goods sold $ 1,610 $ 1,586 $ 3,159 $ 2,689 Research and development 1,015 561 1,908 2,070 Selling, general and administrative 5,040 5,149 11,088 10,054 Total $ 7,665 $ 7,296 $ 16,155 $ 14,813 Stock-based compensation from: Stock options (employee awards) $ 5,789 $ 6,739 $ 12,633 $ 13,049 Stock options (consultant awards) 437 (54 ) 723 942 Restricted stock units (employee awards) 1,140 369 2,225 369 Employee stock purchase plan 299 242 574 453 Total $ 7,665 $ 7,296 $ 16,155 $ 14,813
Schedule of the Company's stock option activity and related information	The following tables contain information about the Company’s stock option and restricted stock unit, or RSU, activity for the six months ended June 30, 2016 : Stock Options Number of Options Weighted Average Exercise Price Outstanding at December 31, 2015 4,645,722 $ 44.03 Granted 741,003 44.68 Exercised (331,272 ) 13.39 Forfeited (273,630 ) 72.50 Expired (119,848 ) 81.26 Outstanding at June 30, 2016 4,661,975 43.68 Restricted Stock Units Number of Units Weighted Average Grant Date Fair Value Unvested at December 31, 2015 216,198 $ 78.59 Granted 246,281 40.46 Vested (59,111 ) 79.33 Forfeited (24,753 ) 79.43 Unvested at June 30, 2016 378,615 53.56

STOCKHOLDERS' EQUITY (Tables)

STOCKHOLDERS' EQUITY (Tables)	6 Months Ended
	Jun. 30, 2016
Stockholders' Equity Note [Abstract]
Schedule of accumulated other comprehensive income (loss)	The following table illustrates the changes in the balances of the Company’s accumulated other comprehensive income (loss) for the periods presented (in thousands): Six Months Ended Net unrealized gains (losses) from available for sale investments: 2016 2015 Balance at beginning of period $ (52 ) $ (80 ) Other comprehensive income before reclassifications 190 53 Amounts reclassified from accumulated other comprehensive income (loss) — — Balance at end of period $ 138 $ (27 )

NET INCOME (LOSS) PER SHARE (Ta

NET INCOME (LOSS) PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2016
Earnings Per Share [Abstract]
Schedule of computation of basic and diluted loss per share	The following table sets forth the computation of basic and diluted net income (loss) per share for the three and six months ended June 30, 2016 and 2015 (in thousands, except per share amounts): Three Months Ended Six Months Ended 2016 2015 2016 2015 Numerator: Net income (loss) $ (7,958 ) $ 8 $ (11,812 ) $ 1,268 Denominator: Weighted average shares of common stock outstanding—basic 37,181 36,481 37,101 36,358 Computation of diluted securities: Dilutive effect of stock options — 1,680 — 1,782 Dilutive effect of conversion premium on the Notes — 3,277 — 3,465 Dilutive effect of warrants — 6 — 6 Dilutive effect of ESPP — 1 — 1 Weighted average shares of common stock outstanding—diluted 37,181 41,445 37,101 41,612 Net income (loss) per share: Basic and diluted net income (loss) per share of common stock $ (0.21 ) $ 0.00 $ (0.32 ) $ 0.03
Schedule of potential dilutive effect of the securities excluded from the calculation of diluted loss per share	The following outstanding stock options, RSUs, conversion premium on the Notes, warrants and ESPP purchase options are antidilutive in the periods presented (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Weighted average number of stock options 4,254 1,738 4,288 1,530 Weighted average number of RSUs 218 — 212 — Conversion premium on the Notes 2,364 — 2,557 — Weighted average number of warrants — — 1 — Weighted average ESPP purchase options — — 12 — Total 6,836 1,738 7,070 1,530

TAXES (Tables)

TAXES (Tables)	6 Months Ended
	Jun. 30, 2016
Income Tax Disclosure [Abstract]
Schedule of Income before Income Tax, Domestic and Foreign	Income (loss) before income taxes is as follows (in thousands): Three Months Ended Six Months Ended 2016 2015 2016 2015 Income (loss) before income taxes: Domestic $ (7,526 ) $ 352 $ (11,025 ) $ 2,238 Foreign (374 ) (305 ) (697 ) (879 ) Total income (loss) before income taxes $ (7,900 ) $ 47 $ (11,722 ) $ 1,359

COMMITMENTS AND CONTINGENCIES (

COMMITMENTS AND CONTINGENCIES (Tables)	6 Months Ended
	Jun. 30, 2016
Commitments and Contingencies Disclosure [Abstract]
Schedule of future minimum lease payments	As of June 30, 2016 , annual aggregate minimum payments due under the Company’s lease obligations are as follows (in thousands): Year Aggregate Minimum Payments 2016 (remaining six months) $ 3,818 2017 7,878 2018 8,081 2019 8,303 2020 6,420 2021 through 2028 8,731 Total $ 43,231

SUMMARY OF SIGNIFICANT ACCOUN33

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016USD ($)	Jun. 30, 2015	Jun. 30, 2016USD ($)customer	Jun. 30, 2015	Dec. 31, 2015USD ($)
Concentration of Major Customers
Debt issuance costs reclassified (from) to	$ 1,582		$ 1,582		$ 1,888
Concentration risk by major customer
Concentration of Major Customers
Number of major customers | customer			3
Net revenue | Concentration risk by major customer
Concentration of Major Customers
Percentage of revenue from customers to total revenue	85.00%	87.00%	87.00%	87.00%
Net revenue | Concentration risk by major customer | Largest customer
Concentration of Major Customers
Percentage of revenue from customers to total revenue	32.00%	32.00%	32.00%	31.00%
Net revenue | Concentration risk by major customer | Second largest customer
Concentration of Major Customers
Percentage of revenue from customers to total revenue	27.00%	28.00%	28.00%	29.00%
Net revenue | Concentration risk by major customer | Third largest customer
Concentration of Major Customers
Percentage of revenue from customers to total revenue	26.00%	27.00%	27.00%	27.00%
Other assets
Concentration of Major Customers
Debt issuance costs reclassified (from) to					(1,900)
Long-term debt
Concentration of Major Customers
Debt issuance costs reclassified (from) to					$ 1,900

INVENTORIES (Details)

INVENTORIES (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 14,436	$ 16,712
Work-in-process	1,965	12,152
Finished goods	44,515	32,781
Total	$ 60,916	$ 61,645

FIXED ASSETS (Details)

FIXED ASSETS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
FIXED ASSETS
Total	$ 130,492		$ 130,492		$ 115,241
Less: accumulated depreciation	(31,210)		(31,210)		(24,917)
Fixed assets, net	99,282		99,282		90,324
Depreciation expense	3,200	$ 2,700	6,300	$ 5,400
Capitalized interest	400	$ 200	700	$ 400
Foreign Property, Plant and Equipment, Net	29,900		29,900		25,900
Machinery and laboratory equipment
FIXED ASSETS
Total	32,362		32,362		29,864
Leasehold improvements
FIXED ASSETS
Total	32,665		32,665		30,834
Computer equipment and software
FIXED ASSETS
Total	5,296		5,296		4,007
Office furniture and equipment
FIXED ASSETS
Total	1,606		1,606		1,439
Construction in progress
FIXED ASSETS
Total	$ 58,563		$ 58,563		$ 49,097

GOODWILL AND INTANGIBLE ASSET36

GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($)	Jun. 30, 2016	Dec. 31, 2015	Apr. 30, 2012
Goodwill
Payment obligation arising in connection with the acquisition			$ 10,000,000
Contingent consideration liability recognized at the time of the acquisition			2,000,000
Goodwill recorded in connection with the acquisition	$ 42,751,000	$ 30,880,000	$ 8,000,000
Goodwill recorded for the percentage payments on net sales of EXPAREL collected	18,800,000
Upon first commercial sale in the United States
Goodwill
Milestone payments for EXPAREL agreed in connection with acquisition	10,000,000
Upon first commercial sale in a major EU country (United Kingdom, France, Germany, Italy and Spain)
Goodwill
Milestone payments for EXPAREL agreed in connection with acquisition	4,000,000
When annual net sales collected reach $100.0 million
Goodwill
Milestone payments for EXPAREL agreed in connection with acquisition	8,000,000
Annual net sales threshold	100,000,000
Payment Obligation Arising Due to Net Sales Collected Threshold of $100 Million	8,000,000
Net Sales Collected Threshold Which Triggers a Payment Obligation	100,000,000
When annual net sales collected reach $250.0 million
Goodwill
Milestone payments for EXPAREL agreed in connection with acquisition	8,000,000
Annual net sales threshold	250,000,000
Net Sales Collected Threshold Which Triggers a Payment Obligation	250,000,000
Contingent liability for milestone achievement	8,000,000
When annual net sales collected reach $500.0 million
Goodwill
Milestone payments for EXPAREL agreed in connection with acquisition	32,000,000
Annual net sales threshold	$ 500,000,000

GOODWILL AND INTANGIBLE ASSET37

GOODWILL AND INTANGIBLE ASSETS (Details 2) $ in Thousands	6 Months Ended
	Jun. 30, 2016USD ($)
Goodwill [Roll Forward]
Balance at December 31, 2015	$ 30,880
Milestone payments triggered by collections of net sales of EXPAREL	8,000
Percentage payments on collections of net sales of EXPAREL	3,871
Balance at June 30, 2016	$ 42,751

GOODWILL AND INTANGIBLE ASSET38

GOODWILL AND INTANGIBLE ASSETS (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Intangible Assets
Finite-Lived Intangible Assets, Gross	$ 15,000		$ 15,000		$ 15,000
Finite-Lived Intangible Assets, Accumulated Amortization	(15,000)		(15,000)		(14,919)
Intangible assets, net	0		0		81
Amortization expense for intangibles	0	$ 100	100	$ 200
Core technology
Intangible Assets
Finite-Lived Intangible Assets, Gross	2,900		2,900		2,900
Finite-Lived Intangible Assets, Accumulated Amortization	(2,900)		(2,900)		(2,819)
Intangible assets, net	0		$ 0		$ 81
Finite-Lived Intangible Asset, Useful Life			9 years		9 years
Developed technology
Intangible Assets
Finite-Lived Intangible Assets, Gross	11,700		$ 11,700		$ 11,700
Finite-Lived Intangible Assets, Accumulated Amortization	(11,700)		(11,700)		(11,700)
Intangible assets, net	0		$ 0		$ 0
Finite-Lived Intangible Asset, Useful Life			7 years		7 years
Trademarks and trade names
Intangible Assets
Finite-Lived Intangible Assets, Gross	400		$ 400		$ 400
Finite-Lived Intangible Assets, Accumulated Amortization	(400)		(400)		(400)
Intangible assets, net	$ 0		$ 0		$ 0
Finite-Lived Intangible Asset, Useful Life			7 years		7 years

DEBT (Details)

DEBT (Details) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Debt:
3.25% convertible senior notes	$ 118,531	$ 118,533
Deferred financing costs	(1,582)	(1,888)
Discount on debt	(10,561)	(12,605)
Total debt, net of debt discount	$ 106,388	$ 104,040

DEBT (Details 2)

DEBT (Details 2) $ / shares in Units, shares in Millions	Jan. 23, 2013USD ($)$ / shares	Jun. 30, 2016USD ($)dshares	Jun. 30, 2015USD ($)shares	Jun. 30, 2016USD ($)	Jun. 30, 2015USD ($)	Dec. 31, 2015USD ($)
DEBT AND FINANCING OBLIGATIONS
Convertible debt, threshold percentage of stock price trigger		130.00%
Convertible debt, threshold trading days | d		20
Convertible debt, threshold consecutive trading days		30 days
Estimated conversion value		$ 42,600,000		$ 42,600,000
Shares issued to settle the conversion premium | shares		1.3
Conversion Request Convertible Senior Notes			$ 1,500,000		$ 1,500,000
Debt Instrument, Convertible, Conversion Premium, Shares | shares		1.3
Liability component of convertible debt		$ 118,531,000		118,531,000		$ 118,533,000
Settlement Period - Convertible Debt Conversion Request			40 days
Loss on early extinguishment of debt		0	$ (51,000)	0	$ (51,000)
Notes
DEBT AND FINANCING OBLIGATIONS
Debt issued in private placement	$ 120,000,000
Stated interest rate (as a percent)	3.25%
Principal amount used for debt instrument conversion ratio	$ 1,000
Initial conversion price of notes into common stock (in dollars per share) | $ / shares	$ 24.82
Initial conversion rate of common stock per $1000 of principal amount of Notes (in shares)					0.0402945
Repayments of Debt	$ 118,500,000
Liability component of convertible debt		95,100,000		95,100,000
Total transaction costs related to the issuance of Notes	$ 4,700,000
Term of Notes	6 years
Notes | Conversion terms, prior to close of business on business day immediately preceding August 1, 2018
DEBT AND FINANCING OBLIGATIONS
Principal amount used for debt instrument conversion ratio		1,000		1,000
Market price per $1000 of principal amount of notes		1,485		1,485
Estimated conversion value		$ 1,359		$ 1,359
Convertible Debt [Member]
DEBT AND FINANCING OBLIGATIONS
Debt Instrument, Convertible, Conversion Premium, Shares | shares			0

DEBT DEBT (Details 3)

DEBT DEBT (Details 3) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Debt Instrument [Line Items]
Amortization of debt discount			$ 2,044	$ 2,058
Interest Costs Capitalized	$ (400)	$ (200)	(700)	(400)
Notes
Debt Instrument [Line Items]
Interest Expense, Debt, Excluding Amortization	963	963	1,926	1,930
Amortization of Financing Costs	153	153	306	308
Amortization of debt discount	1,022	1,024	2,044	2,058
Interest Costs Capitalized	(405)	(200)	(675)	(361)
Interest Expense, Debt	$ 1,733	$ 1,940	$ 3,601	$ 3,935
Debt Instrument, Interest Rate During Period	7.22%	7.20%	7.22%	7.20%

FINANCIAL INSTRUMENTS (Details)

FINANCIAL INSTRUMENTS (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions		Jan. 23, 2013	Jun. 30, 2016
Fair Value Measurements
Closing sale price (in dollars per share)			$ 33.73
Debt Instrument, Convertible, Conversion Premium, Shares			1.3
Estimated conversion value			$ 42,600
Level 1
Fair Value Measurements
Convertible senior notes	[1]		0
Level 2
Fair Value Measurements
Convertible senior notes	[1]		176,019
Level 3
Fair Value Measurements
Convertible senior notes	[1]		0
Carrying Value
Fair Value Measurements
Convertible senior notes	[1]		$ 106,388
Notes
Fair Value Measurements
Initial conversion price of notes into common stock (in dollars per share)		$ 24.82
Maximum
Fair Value Measurements
Debt Instrument, Convertible, Conversion Premium, Shares		4.8
[1]	The fair value of the Notes was based on the closing price of the Company’s common stock of $33.73 per share at June 30, 2016 compared to a conversion price of $24.82 per share which, if converted, would result in an approximate conversion premium of 1.3 million shares or $42.6 million of cash. The maximum conversion premium that can be due on the Notes is 4.8 million shares, which assumes no increases in the conversion rate for certain corporate events.

FINANCIAL INSTRUMENTS (Details

FINANCIAL INSTRUMENTS (Details 2) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value Measurements
Cost	$ 137,220	$ 115,495
Gross Unrealized Gains	157	33
Gross Unrealized Losses	(19)	(85)
Level 2
Fair Value Measurements
Fair Value	137,358	115,443
Short-term Investments
Fair Value Measurements
Cost		101,994
Gross Unrealized Gains		33
Gross Unrealized Losses		(46)
Short-term Investments | Level 2
Fair Value Measurements
Fair Value		101,981
Short-term Investments | Asset-backed securities
Fair Value Measurements
Cost	31,908	27,484
Gross Unrealized Gains	9	0
Gross Unrealized Losses	(1)	(15)
Short-term Investments | Asset-backed securities | Level 2
Fair Value Measurements
Fair Value	31,916	27,469
Short-term Investments | Commercial paper
Fair Value Measurements
Cost	36,839	35,191
Gross Unrealized Gains	119	31
Gross Unrealized Losses	0	0
Short-term Investments | Commercial paper | Level 2
Fair Value Measurements
Fair Value	36,958	35,222
Short-term Investments | Corporate bonds
Fair Value Measurements
Cost	68,473	39,319
Gross Unrealized Gains	29	2
Gross Unrealized Losses	(18)	(31)
Short-term Investments | Corporate bonds | Level 2
Fair Value Measurements
Fair Value	$ 68,484	39,290
Long-Term Investments | Corporate bonds
Fair Value Measurements
Cost		13,501
Gross Unrealized Gains		0
Gross Unrealized Losses		(39)
Long-Term Investments | Corporate bonds | Level 2
Fair Value Measurements
Fair Value		$ 13,462

FINANCIAL INSTRUMENTS (Detail44

FINANCIAL INSTRUMENTS (Details 3)	6 Months Ended	12 Months Ended
	Jun. 30, 2016USD ($)customer	Dec. 31, 2015USD ($)customer
Credit Risk
Number of major customers | customer	3	3
Amount of allowance for doubtful accounts | $	$ 0	$ 0
Accounts receivable | Credit risk | Major customer one
Credit Risk
Concentration risk (as a percent)	28.00%	34.00%
Accounts receivable | Credit risk | Major customer two
Credit Risk
Concentration risk (as a percent)	26.00%	28.00%
Accounts receivable | Credit risk | Major customer three
Credit Risk
Concentration risk (as a percent)	26.00%	27.00%

STOCK PLANS (Details)

STOCK PLANS (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-Based Compensation
Number of Additional Shares Authorized			4,000,000
Stock-based compensation expense	$ 7,665	$ 7,296	$ 16,155	$ 14,813
Compensation expense from stock options, employees	5,789	6,739	12,633	13,049
Compensation expense from stock options, non-employee awards	437	(54)	723	942
Restricted Stock or Unit Expense	1,140	369	2,225	369
Compensation expense from employee stock purchase plan	299	242	574	453
Stock-based compensation	7,665	7,296	$ 16,155	14,813
Purchase price of common stock, ESPP (as a percent)			85.00%
Shares issued under employee stock purchase plan (shares)			34,705
Cost of goods sold
Share-Based Compensation
Stock-based compensation expense	1,610	1,586	$ 3,159	2,689
Research and development
Share-Based Compensation
Stock-based compensation expense	1,015	561	1,908	2,070
Selling, general and administrative
Share-Based Compensation
Stock-based compensation expense	$ 5,040	$ 5,149	$ 11,088	$ 10,054

STOCK PLANS (Details 2)

STOCK PLANS (Details 2) - $ / shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Stock Incentive Plans
Shares issued under employee stock purchase plan (shares)	34,705
Weighted average fair value (in dollars per share)	$ 22.06	$ 40.92
Employee Stock Option
Stock Incentive Plans
Outstanding beginning of period (in shares)	4,645,722
Granted (in shares)	741,003
Exercised (in shares)	331,272
Forfeited (in shares)	273,630
Expired (in shares)	119,848
Outstanding end of period (in shares)	4,661,975
Outstanding beginning of period (in dollars per share)	$ 44.03
Granted (in dollars per share)	44.68
Exercised (in dollars per share)	13.39
Forfeited (in dollars per share)	72.50
Expired (in dollars per share)	81.26
Outstanding at end of period (in dollars per share)	$ 43.68

STOCK PLANS (Details 3)

STOCK PLANS (Details 3) - $ / shares	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Risk free interest rate, minimum (as a percent)	1.21%	1.40%
Risk free interest rate, maximum (as a percent)	1.85%	1.90%
Expected volatility (as a percent)	53.00%	53.30%
Expected term of options	5 years 9 months	5 years 9 months
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Unvested at beginning of period (shares)	216,198
Granted (shares)	246,281
Vested (shares)	(59,111)
Forfeited (shares)	(24,753)
Unvested at end of period (shares)	378,615
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Unvested at beginning of period (usd per share)	$ 78.59
Granted (usd per share)	40.46
Vested (usd per share)	79.33
Forfeited (usd per share)	79.43
Unvested at end of period (usd per share)	$ 53.56

STOCKHOLDERS' EQUITY (Details)

STOCKHOLDERS' EQUITY (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at beginning of period	$ (52)
Balance at end of period	138
Accumulated Net Unrealized Investment Gain (Loss)
AOCI Attributable to Parent, Net of Tax [Roll Forward]
Balances at beginning of period	(52)	$ (80)
Other comprehensive loss before reclassifications	190	53
Amounts reclassified from accumulated other comprehensive income (loss)	0	0
Balance at end of period	$ 138	$ (27)

NET INCOME (LOSS) PER SHARE (De

NET INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Numerator for basic and diluted loss per share
Net income (loss)	$ (7,958)	$ 8	$ (11,812)	$ 1,268
Denominator
Weighted Average Number of Shares Outstanding, Basic (shares)	37,181	36,481	37,101	36,358
Dilutive Securities, Effect on Basic Earnings Per Share, Dilutive Convertible Securities	0	1,680	0	1,782
Incremental Common Shares Attributable to Dilutive Effect of Conversion of Debt Securities	0	3,277	0	3,465
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants	0	6	0	6
Incremental Common Shares Attributable to Dilutive Effect of Equity Unit Purchase Agreements	0	1	0	1
Weighted Average Number of Shares Outstanding, Diluted (shares)	37,181	41,445	37,101	41,612
Basic and diluted net income (loss) per share of common stock	$ (0.21)	$ 0
Earnings Per Share, Basic			$ (0.32)	$ 0.03

NET INCOME (LOSS) PER SHARE (50

NET INCOME (LOSS) PER SHARE (Details 2) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
EARNINGS PER SHARE
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	6,836	1,738	7,070	1,530
Employee Stock Option
EARNINGS PER SHARE
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,254	1,738	4,288	1,530
Restricted Stock Units (RSUs)
EARNINGS PER SHARE
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	218	0	212	0
Conversion premium on the Notes
EARNINGS PER SHARE
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	2,364	0	2,557	0
Warrants
EARNINGS PER SHARE
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	0	1	0
Employee Stock
EARNINGS PER SHARE
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	0	0	12	0

TAXES (Details)

TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Tax Disclosure [Abstract]
Income (Loss) from Continuing Operations before Income Taxes, Domestic	$ (7,526)	$ 352	$ (11,025)	$ 2,238
Income (Loss) from Continuing Operations before Income Taxes, Foreign	(374)	(305)	(697)	(879)
Income (Loss) from Continuing Operations before Income Taxes, Total	(7,900)	$ 47	$ (11,722)	1,359
Income Tax Provision	$ 100			$ 100

COMMITMENTS AND CONTINGENCIES52

COMMITMENTS AND CONTINGENCIES (Details) $ in Thousands	Jun. 30, 2016USD ($)
Commitments and Contingencies Disclosure [Abstract]
Contract Termination Fee	$ 7,200
Future minimum lease payments
2016 (remaining six months)	3,818
2,017	7,878
2,018	8,081
2,019	8,303
2,020	6,420
2021 through 2028	8,731
Total	43,231
Contract Termination Fee, Current Portion	3,600
Contract Termination Fee, Long-Term Portion	$ 3,600

COMMERCIAL PARTNERS AND OTHER53

COMMERCIAL PARTNERS AND OTHER AGREEMENTS (Details) - USD ($) $ in Millions	Dec. 05, 2012	Jun. 30, 2016	Dec. 31, 2013	Oct. 31, 2013	Jun. 30, 2016
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Agreement term				5 years
Contract Termination Fee		$ 7.2			$ 7.2
Fee payment period					2 years
Contract Termination Fee, Current Portion		3.6			$ 3.6
Contract Termination Fee, Long-Term Portion		3.6			$ 3.6
Aratana Therapeutics Inc [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaborative Arrangement, Upfront Payment Received	$ 1
Collaborative Arrangement, Milestone Payments Received		$ 1	$ 0.5
Maximum [Member] | Achievement of Development and Commercial Milestones [Member] | Aratana Therapeutics Inc [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaborative Arrangement, Milestone Payments to be Received	$ 41