Balance Sheet Account Detail | BALANCE SHEET ACCOUNT DETAIL The composition of selected financial statement captions that comprise the accompanying Condensed Consolidated Balance Sheets are summarized below: (a) Cash and Cash Equivalents and Marketable Securities As of September 30, 2018 and December 31, 2017 , our “cash and cash equivalents” were held with major financial institutions. Our “marketable securities” primarily relate to our equity holdings in CASI (as defined below). We maintain cash balances in excess of federally insured limits with reputable financial institutions. To a limited degree, the Federal Deposit Insurance Corporation and other third parties insure these investments. However, these investments are not insured against the possibility of a complete loss of earnings or principal and are inherently subject to the credit risk related to the continued credit worthiness of the underlying issuer and general credit market risks. We manage such risks in our portfolio by investing in highly liquid, highly-rated instruments, and limit investing in long-term maturity instruments. Our investment policy requires that purchased investments in marketable securities may only be in highly-rated instruments, which are primarily U.S. treasury bills or treasury-backed securities, and also limits our investments in securities of any single issuer (excluding any debt or equity securities received from our strategic partners in connection with an out-license arrangement, as discussed in Note 10 ). The carrying amount of our equity securities, money market funds, and Bank CDs approximates their fair value (utilizing “ Level 1” or “ Level 2” inputs – see Note 2(xiii) ) because of our ability to immediately convert these instruments into cash with minimal expected change in value. The following is a summary of our presented “cash and cash equivalents” and “marketable securities”: Cost Foreign Currency Translation Gross Gross Estimated Cash and Cash Marketable Securities September 30, 2018 Equity securities* (see Note 3(g) and Note 10 ) $ 8,710 $ (1,920 ) $ 47,138 $ — $ 53,928 $ — $ 53,928 Bank deposits 22,256 — — — 22,256 22,256 — Money market funds 144,285 — — — 144,285 144,285 — Bank certificates of deposits 87 — — — 87 — 87 Total cash and cash equivalents and marketable securities $ 175,338 $ (1,920 ) $ 47,138 $ — $ 220,556 $ 166,541 $ 54,015 December 31, 2017 Bank deposits $ 10,965 $ — $ — $ — $ 10,965 $ 10,965 $ — Money market funds 216,358 — — — 216,358 216,358 — Bank certificates of deposits 248 — — — 248 — 248 Total cash and cash equivalents and marketable securities $ 227,571 $ — $ — $ — $ 227,571 $ 227,323 $ 248 * Beginning January 1, 2018, under the new requirements of ASU 2016-01, Recognition and Measurement of Financial Assets and Liabilities , the unrealized (losses) gains on our CASI Pharmaceuticals, Inc. (NASDAQ: CASI) (“CASI”) equity securities are recognized as a (decrease) increase to “other (expense) income, net” on the Consolidated Statements of Operations (rather than through “other comprehensive (loss) income” on the Consolidated Statements of Comprehensive Loss). Our adoption of ASU 2016-01 on January 1, 2018, resulted in a $17.2 million cumulative-effect adjustment, net of income tax, recorded as a decrease to “accumulated other comprehensive (loss) income” and a decrease to “accumulated deficit” on the accompanying Condensed Consolidated Balance Sheets. Our recognized unrealized loss on these equity securities for the three months ended September 30, 2018 was $40.9 million and our recognized unrealized gain on these equity securities for the nine months ended September 30, 2018 was $17.7 million , as reported in “other (expense) income, net” on the accompanying Condensed Consolidated Statements of Operations. As of September 30, 2018 , no ne of our securities were in an unrealized loss position. (b) Property and Equipment, net of Accumulated Depreciation “Property and equipment, net of accumulated depreciation” consists of the following: September 30, 2018 December 31, 2017 Computer hardware and software $ 3,076 $ 2,994 Laboratory equipment 635 630 Office furniture 212 218 Leasehold improvements 2,938 2,938 Property and equipment, at cost 6,861 6,780 (Less): Accumulated depreciation (6,424 ) (6,191 ) Property and equipment, net of accumulated depreciation $ 437 $ 589 Depreciation expense (included within “total operating costs and expenses” in the accompanying Condensed Consolidated Statements of Operations) for the three and nine months ended September 30, 2018 and 2017 , was $0.1 million , $0.1 million , $0.2 million , and $0.2 million , respectively. New Accounting Standard for Leases, effective January 1, 2019 In February 2016, the FASB issued ASU 2016-02 , which amends the FASB Accounting Standards Codification and creates Topic 842 , Leases ( “Topic 842” ). The new topic supersedes Topic 840 , Leases and requires additional disclosures regarding our lease arrangements, as well as our presentation of lease assets and lease liabilities (including those for operating leases) on the balance sheet at the present value of lease payments not yet paid, and for us to subsequently apply the “effective interest rate” method” to reduce the lease liability, while amortizing the right-of-use asset for straight-line expense recognition over the lease term. Topic 842 is effective for us beginning January 1, 2019, and mandates a “modified retrospective” transition method. We are currently assessing the quantitative impact this guidance will have on our consolidated financial statements. However, we presently do not have any capital lease arrangements, or any active contracts that would contain an “embedded lease”. Our current operating lease arrangements affected by this “gross-up” presentation are limited to (1) our executive, administrative, and research and development office facilities and (2) certain office equipment. (c) Inventories “Inventories” consists of the following: September 30, 2018 December 31, 2017 Raw materials $ 1,870 $ 1,077 Work-in-process 2,569 2,551 Finished goods 1,515 5,187 (Less:) Non-current portion of inventories included within "other assets" * (1,975 ) (3,100 ) Inventories $ 3,979 $ 5,715 * The “non-current” portion of inventories is presented within “other assets” in the accompanying Condensed Consolidated Balance Sheets at September 30, 2018 and December 31, 2017 , respectively. This value of $2 million at September 30, 2018 represents product that we expect to sell beyond September 30, 2019 , and the value at December 31, 2017 represented product that we expected to sell beyond December 31, 2018 . (d) Prepaid Expenses and Other Assets “Prepaid expenses and other assets” consists of the following: September 30, 2018 December 31, 2017 Other miscellaneous prepaid operating expenses $ 7,186 $ 3,389 Prepaid insurance 131 645 Research and development supplies 983 1,883 Key employee life insurance - cash surrender value — 4,150 Prepaid expenses and other assets $ 8,300 $ 10,067 (e) Other Receivables “Other receivables” consists of the following: September 30, 2018 December 31, 2017 Other miscellaneous receivables (including Medicaid rebate credits and royalty receivables) $ 1,147 $ 1,152 Income tax receivable 632 665 Insurance receivable 1,458 53 CASI note - short term 1,523 — Reimbursements due from development partners for incurred research and development expenses 371 263 Other receivables $ 5,131 $ 2,133 (f) Intangible Assets and Goodwill Intangible assets, net of accumulated amortization and impairment charges consists of the following: September 30, 2018 Historical Accumulated Foreign Impairment Net Amount Full Remaining MARQIBO IPR&D (NHL and other novel indications) $ 17,600 $ — $ — $ — $ 17,600 n/a n/a EVOMELA distribution rights 7,700 (1,481 ) — — 6,219 156 126 BELEODAQ distribution rights 25,000 (7,969 ) — — 17,031 160 109 MARQIBO distribution rights 26,900 (20,420 ) — — 6,480 81 21 FOLOTYN distribution rights (1) 118,400 (63,918 ) — — 54,482 152 50 ZEVALIN distribution rights – U.S. 41,900 (40,163 ) — — 1,737 123 6 ZEVALIN distribution rights – ex-U.S. 23,490 (17,913 ) (3,132 ) — 2,445 96 18 FUSILEV distribution rights (2) 16,778 (9,618 ) — (7,160 ) — 56 0 FOLOTYN out-license (3) 27,900 (16,598 ) — (1,023 ) 10,279 110 46 Total intangible assets $ 305,668 $ (178,080 ) $ (3,132 ) $ (8,183 ) $ 116,273 (1) Beginning June 2016, we adjusted the amortization period of our FOLOTYN distribution rights to November 2022 from March 2025, representing the period through which we expect to have patent protection from generic competition. (2) On February 20, 2015, the United States District Court for the District of Nevada found the patent covering FUSILEV to be invalid, which was upheld on appeal. On April 24, 2015, Sandoz began to commercialize a generic version of FUSILEV. This represented a “triggering event” under applicable GAAP in evaluating the value of our FUSILEV distribution rights as of March 31, 2015, resulting in a recognized $7.2 million impairment charge (non-cash) in 2015. We accelerated amortization expense recognition in 2015 for the then remaining net book value of FUSILEV distribution rights. (3) On May 29, 2013, we amended our FOLOTYN collaboration agreement with Mundipharma. As a result of the amendment, Europe and Turkey were excluded from Mundipharma’s commercialization territory, and their royalty rates and milestone payments to us were modified. This constituted a change under which we originally valued the FOLOTYN out-license as part of business combination accounting, resulting in a recognized impairment charge (non-cash) of $1 million in 2013. December 31, 2017 Historical Accumulated Foreign Impairment Net Amount MARQIBO IPR&D (NHL and other novel indications) $ 17,600 $ — $ — $ — $ 17,600 EVOMELA distribution rights 7,700 (1,037 ) — — 6,663 BELEODAQ distribution rights 25,000 (6,563 ) — — 18,437 MARQIBO distribution rights 26,900 (17,182 ) — — 9,718 FOLOTYN distribution rights 118,400 (54,111 ) — — 64,289 ZEVALIN distribution rights – U.S. 41,900 (37,557 ) — — 4,343 ZEVALIN distribution rights – ex-U.S. 23,490 (17,232 ) (2,471 ) — 3,787 FUSILEV distribution rights 16,778 (9,618 ) — (7,160 ) — FOLOTYN out-license 27,900 (14,555 ) — (1,023 ) 12,322 Total intangible assets $ 305,668 $ (157,855 ) $ (2,471 ) $ (8,183 ) $ 137,159 Intangible asset amortization expense recognized during the three and nine months ended September 30, 2018 and 2017 , was $6.9 million , $6.9 million , $20.8 million and $20.7 million , respectively. Estimated intangible asset amortization expense for the remainder of 2018 and the five succeeding fiscal years and thereafter is as follows: Years Ending December 31, Remainder of 2018 $ 6,923 2019 25,084 2020 19,754 2021 18,266 2022 15,882 2023 2,467 2024 and thereafter 10,297 $ 98,673 “Goodwill” consists of the following, by source: September 30, 2018 December 31, 2017 Acquisition of Talon (MARQIBO distribution rights) $ 10,526 $ 10,526 Acquisition of ZEVALIN ex-U.S. distribution rights 2,525 2,525 Acquisition of Allos (FOLOTYN distribution rights) 5,346 5,346 Foreign currency exchange translation effects (306 ) (235 ) Goodwill $ 18,091 $ 18,162 (g) Other Assets “Other assets” consists of the following: September 30, 2018 December 31, 2017 Equity securities (see Note 10 )* $ — $ 37,530 Key employee life insurance – cash surrender value 6,382 10,737 Inventories - non-current portion 1,975 3,100 CASI note - long term (see Note 10 ) — 1,517 Income tax receivable** 668 668 Research & development supplies and other 1,351 231 Other assets $ 10,376 $ 53,783 * As of March 31, 2018, we reclassified our presentation of these equity securities from this account caption to “marketable securities” on our accompanying Condensed Consolidated Balance Sheets - ( see Note 3(a) ). ** This value represents the non-current portion of the refundable alternative minimum tax credit that is expected to be received over the next few years (see Note 16 ). (h) Accounts Payable and Other Accrued Liabilities “Accounts payable and other accrued liabilities” consists of the following : September 30, 2018 December 31, 2017 Trade accounts payable and other accrued liabilities $ 35,535 $ 33,648 Accrued rebates 8,228 7,990 Accrued product royalty 3,992 4,339 Allowance for returns 4,715 4,045 Accrued data and distribution fees 2,701 4,305 Accrued GPO administrative fees 244 296 Accrued inventory management fee 428 1,126 Allowance for chargebacks 1,790 2,368 Accounts payable and other accrued liabilities $ 57,633 $ 58,117 Amounts presented within “accounts payable and other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets for our categories of GTN estimates (see Note 2(i) ) were as follows: Commercial/Medicaid Rebates and Government Chargebacks Distribution, Data, Inventory and Product Return Allowances Balance as of December 31, 2016 $ 9,817 $ 5,146 $ 2,309 Add: provisions 106,647 20,104 2,807 (Less): credits or actual allowances (106,106 ) (19,523 ) (1,071 ) Balance as of December 31, 2017 10,358 5,727 4,045 Add: provisions 47,130 10,425 1,207 (Less): credits or actual allowances (47,470 ) (12,779 ) (537 ) Balance as of September 30, 2018 $ 10,018 $ 3,373 $ 4,715 (i) Deferred Revenue Deferred revenue (current and non-current) consists of the following: September 30, 2018 December 31, 2017 EVOMELA deferred revenue $ — $ 3,819 ZEVALIN out-license in India territory (see Note 15(b)(iii) ) — 368 Deferred revenue* $ — $ 4,187 * On January 1, 2018, we reclassified the deferred revenue related to our EVOMELA product sales and our ZEVALIN out-license in the India territory of $3.8 million and $0.4 million , respectively. These amounts were included in the $4.7 million aggregate decrease to “accumulated deficit” on January 1, 2018, in accordance with the adoption of Topic 606 (see Note 2(i) ). (j) Other Long-Term Liabilities “Other long-term liabilities” consists of the following: September 30, 2018 December 31, 2017 Accrued executive deferred compensation $ 5,764 $ 5,928 Deferred rent (non-current portion) 1 52 Clinical study holdback fees, non-current 56 59 Other tax liabilities 176 176 Other long-term liabilities $ 5,997 $ 6,215 |