Document and Entity Information	9 Months Ended
Document and Entity Information	Sep. 30, 2014	Oct. 31, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Trading Symbol	SPPI
Entity Registrant Name	SPECTRUM PHARMACEUTICALS INC
Entity Central Index Key	0000831547
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		65,760,456

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 144,234	$ 156,306
Marketable securities	3,306	3,471
Accounts receivable, net of allowance for doubtful accounts of $200 and $206, respectively	60,085	49,483
Other receivables	9,348	7,539
Inventories	9,943	13,519
Prepaid expenses and other current assets	4,505	3,213
Deferred tax assets	138	1,659
Total current assets	231,559	235,190
Property and equipment, net of accumulated depreciation	1,414	1,535
Intangible assets, net of accumulated amortization	237,244	231,352
Goodwill	18,295	18,501
Other assets	21,156	12,577
Total assets	509,668	499,155
Current liabilities:
Accounts payable and other accrued liabilities	101,801	79,837
Accrued payroll and benefits	6,863	6,872
Deferred revenue	1,090	156
Drug development liability	3,119	3,119
Total current liabilities	112,873	89,984
Drug development liability, less current portion	13,283	14,623
Deferred revenue, less current portion	8,869
Acquisition-related contingent obligations	10,239	8,329
Deferred tax liability	6,989	7,168
Other long-term liabilities	5,787	5,965
Convertible senior notes	95,036	91,480
Total liabilities	253,076	217,549
Commitments and contingencies
Stockholders' equity:
Preferred stock	0	0
Common stock, $0.001 par value; 175,000,000 shares authorized; 65,743,230 and 64,104,173 shares issued and outstanding at September 30, 2014 and December 31, 2013, respectively	66	64
Additional paid-in capital	535,645	518,144
Accumulated other comprehensive income	1,120	894
Accumulated deficit	(280,362)	(237,619)
Total stockholders' equity	256,592	281,606
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	509,668	499,155
Series B junior participating preferred stock [Member]
Stockholders' equity:
Preferred stock	0	0
Series E Convertible Voting Preferred Stock [Member]
Stockholders' equity:
Preferred stock	$ 123	$ 123

Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Allowance for doubtful accounts receivable	$ 200	$ 206
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	175,000,000	175,000,000
Common stock, shares issued	65,743,230	64,104,173
Common stock, shares outstanding	65,743,230	64,104,173
Series B junior participating preferred stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	1,500,000	1,500,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series E Convertible Voting Preferred Stock [Member]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, stated value	$ 10,000	$ 10,000
Preferred stock, shares authorized	2,000	2,000
Preferred stock, shares issued	20	20
Preferred stock, shares outstanding	20	20
Convertible preferred shares	40,000	40,000
Preferred stock, liquidation value	$ 240	$ 240

Condensed Consolidated Statements of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenues:
Product sales, net	$ 47,916	$ 41,439	$ 134,867	$ 102,998
License fees and service revenue	74	1,000	102	11,340
Total revenues	47,990	42,439	134,969	114,338
Operating costs and expenses:
Cost of product sales (excludes amortization and impairment of intangible assets)	6,530	8,221	18,964	22,271
Selling, general and administrative	24,125	29,003	72,927	73,601
Research and development	14,420	13,567	55,252	35,910
Amortization and impairment of intangible assets	7,042	4,935	17,763	14,829
Total operating costs and expenses	52,117	55,726	164,906	146,611
Loss from operations	(4,127)	(13,287)	(29,937)	(32,273)
Other expenses:
Interest expense, net	(2,361)	(628)	(6,404)	(1,542)
Change in fair value of contingent consideration related to acquisitions	(181)		(1,910)
Other income (expense), net	(1,393)	1,370	(2,238)	804
Total other expenses	(3,935)	742	(10,552)	(738)
Loss before income taxes	(8,062)	(12,545)	(40,489)	(33,011)
(Provision) benefit for income taxes	(3,477)	4,733	(2,254)	10,249
Net loss	$ (11,539)	$ (7,812)	$ (42,743)	$ (22,762)
Net loss per share:
Basic and diluted	$ (0.18)	$ (0.13)	$ (0.66)	$ (0.38)
Weighted average shares outstanding:
Basic and diluted	64,765,072	61,903,242	64,369,466	60,013,842

Condensed Consolidated Statements of Comprehensive Loss (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Statement of Comprehensive Income [Abstract]
Net loss	$ (11,539)	$ (7,812)	$ (42,743)	$ (22,762)
Other comprehensive income, net of income tax:
Unrealized gain (loss) on available-for-sale securities	706	(293)	1,364	313
Adjustment for realized gain on available-for-sale securities, and included in net income	(2,217)		(2,217)
Foreign currency translation adjustments	897	(122)	1,080	49
Other comprehensive income	(614)	(415)	227	362
Total comprehensive loss	$ (12,153)	$ (8,227)	$ (42,516)	$ (22,400)

Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash Flows From Operating Activities:
Net loss	$ (42,743)	$ (22,762)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of deferred revenue		(11,300)
Depreciation and amortization	18,692	16,249
Stock-based compensation	8,589	8,662
Accretion of debt discount to interest expense on 2018 Convertible Notes (Note 12)	3,556
Amortization of deferred financing costs to interest expense on 2018 Convertible Notes (Note 12)	443
Bad debt (recovery) expense	(46)	59
Impairment of intangible assets		1,023
Unrealized foreign currency loss	4,469	675
Research and development expense for the value of stock issued to TopoTarget in connection with milestone achievement (Note 13)	55,252	35,910
Change in fair value of common stock warrants		202
Change in fair value of contingent consideration related to acquisitions (Note 9)	1,910
Change in fair value of drug development liability (Note 13)		(2,869)
Changes in operating assets and liabilities:
Accounts receivable, net	(10,556)	37,187
Other receivables	(1,809)
Inventories	3,576	447
Prepaid expenses and other current assets	(1,292)	(3,193)
Deferred tax assets	1,521	(10,016)
Intangible assets, net	(25,000)
Other assets	(13,803)
Accounts payable and other accrued obligations	21,964	(26,104)
Accrued payroll and benefits	(9)	1,324
Drug development liability	(1,340)	(861)
Deferred revenue	9,803	1,271
Deferred tax liability	(179)
Other long-term liabilities	(179)
Net cash used in operating activities	(14,643)	(10,006)
Cash Flows From Investing Activities:
Proceeds from sale of available-for-sale securities	4,093
Purchases of property and equipment	(808)	(127)
Net cash provided by (used in) investing activities	3,285	(14,316)
Cash Flows From Financing Activities:
Proceeds from exercise of stock options	1,460	2,970
Proceeds from sale of stock under employee stock purchase plan	348	197
Purchase of treasury stock		(1,652)
Purchase and retirement of restricted stock to satisfy employee tax liability at vesting	(684)	(612)
Proceeds from Mundipharma related to FOLOTYN collaboration (Note 13)		7,000
Proceeds from revolving line of credit		100,000
Repayment of revolving line of credit		(150,000)
Net cash provided by (used in) financing activities	1,124	(42,097)
Effect of exchange rates on cash	(1,838)	(1,305)
Net (decrease) increase in cash and cash equivalents	(12,072)	(67,724)
Cash and cash equivalents-beginning of period	156,306	139,698
Cash and cash equivalents-end of period	144,234	71,974
Supplemental disclosure of cash flow information:
CASI out-license proceeds (Note 10) included in other assets	9,959
C-E MELPHALAN license included in intangible assets and other long term obligations		4,700
BELEODAQ license (Note 14(6)(ix)) included in intangible assets and accounts payable and other accrued liabilities	25,000
Retirement of treasury shares		1,652
Cash paid for income taxes	329	197
Cash paid for interest	1,588	998
TopoTarget [Member]
Adjustments to reconcile net loss to net cash used in operating activities:
Research and development expense for the value of stock issued to TopoTarget in connection with milestone achievement (Note 13)	7,790
C-E MELPHALAN rights [Member]
Cash Flows From Investing Activities:
Acquisition of Business, net of cash		(3,000)
Talon Therapeutics, Inc. [Member]
Cash Flows From Investing Activities:
Acquisition of Business, net of cash		$ (11,189)

Description of Business, Basis of Presentation, and Operating Segment

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Description of Business, Basis of Presentation, and Operating Segment

1.	DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, AND OPERATING SEGMENT

(a) Description of Business

Spectrum Pharmaceuticals, Inc. (“Spectrum”, the “Company”, “we”, “our”, or “us”) is a biotechnology company, with a primary focus on oncology and hematology. Our strategy is comprised of the (i) commercialization of cancer therapeutics through our U.S. direct sales force and international distributors, (ii) completion of studies for new indications of our marketed products, and (iii) acquiring and developing a diverse pipeline of late-stage drug compounds for commercialization.

We currently market five drugs for the following indications:

•

FUSILEV^® injection for patients in the U.S. with advanced metastatic colorectal cancer and to counteract certain effects of methotrexate therapy;

•

ZEVALIN^® injection for patients in the U.S. and various international markets with follicular non-Hodgkin’s lymphoma;

•

FOLOTYN^® injection for patients in the U.S. with relapsed or refractory peripheral T-cell lymphoma (“PTCL”);

•

MARQIBO^® injection for patients in the U.S. with Philadelphia chromosome–negative acute lymphoblastic leukemia; and

•

BELEODAQ^® injection for patients in the U.S. with relapsed or refractory PTCL.

(b) Basis of Presentation

Interim Financial Statements

The interim financial data as of September 30, 2014 and 2013 is unaudited and is not necessarily indicative of our results for a full year. In the opinion of our management, the interim data includes normal and recurring adjustments necessary for a fair presentation of our financial results for the three and nine months ended September 30, 2014 and 2013. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) have been condensed or omitted pursuant to U.S. Securities and Exchange Commission (“SEC”) rules and regulations relating to interim financial statements. Certain amounts presented within “Cash Flows from Operating Activities” on our Condensed Consolidated Statements of Cash Flows in the prior year period have been reclassified to conform with current year presentation. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with our audited Consolidated Financial Statements and Notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013, filed with the SEC on March 12, 2014.

Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements include the financial position, results of operations, and cash flows of Spectrum and its subsidiaries, all of which are wholly-owned (except for SPC, as discussed below). All inter-company accounts and transactions among the consolidated entities have been eliminated in consolidation.

Variable Interest Entity

We own fifty-percent of Spectrum Pharma Canada (“SPC”), organized in Quebec, Canada in January 2008. Certain of our drug clinical studies are conducted through this “variable interest entity” (as defined under applicable GAAP). We are obligated to fund all of SPC’s costs and have the sole rights to any revenue it derives. Since we carry the full risks and rewards of SPC, we meet the applicable GAAP criteria as being its “primary beneficiary.” Accordingly, SPC’s balance sheets and statements of operations are included in our Condensed Consolidated Financial Statements as if it were a wholly-owned subsidiary for all periods presented.

(c) Operating Segment

We operate in one reportable operating segment that is focused exclusively on developing and commercializing oncology and hematology drug products. For the three and nine months ended September 30, 2014 and 2013, all of our revenue and related expenses were solely attributable to these activities. Substantially all of our assets (excluding certain of our bank accounts and intangible asset rights held by our wholly-owned foreign subsidiaries) are located in the U.S.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References+ Details

Use of Estimates and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Use of Estimates and Summary of Significant Accounting Policies

2.	USE OF ESTIMATES AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The preparation of financial statements in conformity with GAAP requires our management to make informed estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. On an on-going basis, our management evaluates its estimates, including those related to (i) gross-to-net revenue adjustments; (ii) the collectability of customer accounts; (iii) whether the cost of inventories can be recovered; (iv) the fair value of goodwill and intangible assets; (v) the realization of tax assets and estimates of tax liabilities; (vi) the likelihood of payment and value of contingent liabilities; (vii) the fair value of investments; (viii) assumptions used in reporting stock-based compensation; and (ix) the potential outcome of ongoing or threatened litigation.

Our estimates are based on our management’s professional judgment which involves their experience and consideration of all available facts. Actual results may materially differ from management’s estimates. In our judgment, the accounting policies, estimates, and assumptions described below have the greatest potential to significantly impact the accompanying Condensed Consolidated Financial Statements:

(i) Revenue Recognition

(a) Product Sales: We sell our products to wholesalers or distributors (i.e., our customers), except for our U.S. sales of ZEVALIN in which case the end-user is our customer. Our wholesalers and distributors in turn sell the products directly to end-users, such as clinics, hospitals, and private oncology-based practices. Revenue from product sales is recognized when title and risk of loss have transferred to our customer, and the following additional criteria are met:

(1)

appropriate evidence of a binding arrangement exists with our customer;

(2)

price is substantially fixed and determinable;

(3)

collection from our customer is reasonably assured;

(4)

our customer’s obligation to pay us is not contingent on resale of the product;

(5)

we do not have significant obligations for future performance to directly bring about the resale of our product; and

(6)

we have a reasonable basis to estimate returns.

Our gross revenue is reduced by our gross-to-net (“GTN”) estimates each period, resulting in our reported “product sales, net” in the accompanying Condensed Consolidated Statements of Operations. We defer revenue recognition in full if these estimates are not reasonably determinable at the time of sale. These estimates are based upon information received from external sources, in combination with management’s judgments and estimates. Such external information includes written and oral information obtained from our wholesalers with respect to their period-end inventory levels, and their sales to end-users during the period. Due to the inherent uncertainty of the inputs that these estimates are based upon, the actual amount we incur may be prospectively reported by us as a revenue adjustment in periods after the initial sale is recorded, and could be materially different from our initial estimates.

Our GTN estimates include the following major categories:

Product Returns Allowances: Our FUSILEV, MARQIBO, and BELEODAQ customers are permitted to return purchased product beginning at its expiration date, and within six months thereafter. Returned product is generally not resold. Returns for expiry of ZEVALIN and FOLOTYN are not contractually, or customarily, allowed. We estimate potential returns based on historical rates of return.

Government Chargebacks: Our products are subject to pricing limits under certain federal government programs. Qualifying entities (end-users) purchase product from our wholesalers at their qualifying discounted price. The chargeback amount we incur represents the difference between our original sales price to the wholesaler, and the end-user’s applicable discounted purchase price. There may be significant lag time between our original sale to the wholesaler and our receipt of the corresponding government chargeback from our wholesalers.

Prompt Pay Discounts: Discounts for prompt payment are estimated at the time of sale, based on our eligible customers’ prompt payment history and the contractual discount percentage.

Commercial Rebates: Rebates are estimated based on our customers’ actual purchase level during the quarterly or annual rebate purchase period, and the corresponding contractual rebate tier we expect each customer to achieve.

Medicaid Rebates: Our products are subject to state government-managed Medicaid programs, whereby rebates for purchases are issued to participating state governments. These rebates arise when the patient treated with our products is covered under Medicaid. Our calculations related to these Medicaid rebate accruals require us to estimate end-user and patient mix to determine which of our sales will likely be subject to these rebates. There is a significant time lag in us receiving these rebate notices (generally several months after our sale is made). Our estimates are based on our historical claims, as supplemented by management’s judgment.

Distribution, Data, and GPO Administrative Fees: Distribution, data, and group purchasing organization (GPO) administrative fees are paid to authorized wholesalers of our products (except for U.S. sales of ZEVALIN) for various services, including: contract administration, inventory management, end-user sales data, and product returns processing. These fees are based on a contractually determined percentage of applicable sales.

(b) License Fees: We recognize revenue for our licensing of intellectual property to third parties (i.e., out-licenses), based on the contractual terms of each agreement. This results in periodic revenue recognition as the licensee has sales for which we are entitled to a royalty. In certain instances in which we receive a lump-sum payment, revenue is deferred and recognized over the actual or implied contractual term.

(c) Service Revenue: We receive fees under certain arrangements for research and development activities, clinical trial management, and supply chain services. Payment may be triggered by the successful completion of a phase of development, results from a clinical trial, regulatory approval events, or completion of product delivery in our capacity as an agent in such arrangement. We recognize revenue when the corresponding milestone is achieved, or the revenue is otherwise earned through our on-going activities.

(d) New Revenue Recognition Standard: ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), was issued in May 2014 for our mandatory adoption beginning January 1, 2017 (no early adoption is permitted under this new revenue recognition standard). ASU 2014-09 requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle, the guidance provides that 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. We continue to evaluate the impact of ASU 2014-09 to our current revenue recognition models for product sales, license fees, and service revenue, as described above.

(ii) Cash and Equivalents

Our cash and equivalents consist of bank deposits and highly liquid investments with original maturities of three months or less from the original purchase date.

(iii) Marketable Securities

Our marketable securities consist of our holdings in mutual funds and bank certificates of deposit. Since we classify these securities as “available-for-sale” under applicable GAAP, any unrealized gains or losses from their change in value is reflected in “unrealized gain (loss) on securities” on the accompanying Condensed Consolidated Statements of Comprehensive Income (Loss). Realized gains and losses on available-for-sale securities are included in “other expense” on the accompanying Condensed Consolidated Statements of Operations.

(iv) Accounts Receivable

Our accounts receivables are derived from our product sales, license fees, and service revenue, and do not bear interest. The allowance for doubtful accounts is management’s best estimate of the amount of probable credit losses in existing accounts receivable. Account balances are charged off against the allowance after appropriate collection efforts are exhausted.

(v) Inventories

We value our inventory at the lower of (i) the actual cost to purchase or manufacture it, or (ii) its current market value. Inventory cost is determined on the first-in, first-out method (FIFO). We regularly review our inventory quantities in process of manufacture and on hand, and when appropriate, record a provision for obsolete and excess inventory.

Direct and indirect manufacturing costs related to the production of inventory prior to FDA approval are expensed through “research and development,” rather than being capitalized.

(vi) Property and Equipment

Our property and equipment is stated at cost, and is depreciated on a straight-line basis over an estimated useful life that corresponds with its designated asset category. We evaluate the recoverability of “long-lived assets” (which includes property and equipment) whenever events or changes in circumstances in our business indicate that the asset’s carrying amount may not be recoverable through on-going operations.

(vii) Goodwill and Intangible Assets

Our goodwill represents the excess of our business acquisition cost over the estimated fair value of the net assets acquired in the corresponding transaction. Goodwill has an indefinite accounting life and is therefore not amortized. Instead, goodwill is evaluated for impairment on an annual basis (as of each October 1^st), unless we identify impairment indicators that would require earlier testing.

We evaluate the recoverability of indefinite-lived intangible assets at least annually, or whenever events or changes in our business indicate that an intangible asset’s (whether indefinite or definite-lived) carrying amount may not be recoverable. Such circumstances could include, but are not limited to the following:

(a)

a significant decrease in the market value of an asset;

(b)

a significant adverse change in the extent or manner in which an asset is used; or

(c)

an accumulation of costs significantly in excess of the amount originally expected for the acquisition of an asset.

Intangible assets with finite useful lives are amortized over their estimated useful lives on a straight-line basis. We review these assets for potential impairment if/when facts or circumstances suggest that the carrying value of these assets may not be recoverable.

(viii) Stock-Based Compensation

Stock-based compensation expense for equity awards granted to our employees and members of our board of directors is recognized on a straight-line basis over the award’s vesting period. Recognized compensation expense is net of an estimated forfeiture rate, which estimates those shares expected to be forfeited prior to vesting. We use the Black-Scholes option pricing model to determine the fair value of stock options (as of the date of grant) which carry service conditions for vesting. We use the Monte Carlo valuation model to value equity awards (as of the date of grant) which carry combined market conditions and service conditions for vesting.

Calculating stock-based compensation expense requires the input of highly subjective assumptions, including the pre-vesting forfeiture rate, expected term of the stock-based awards, stock price volatility, and risk-free interest rates. We estimate the expected term of options granted based on our employees’ historical exercise patterns, which we believe will be representative of their future behavior. We estimate the volatility of our common stock on the date of grant based on historical volatility of our common stock for a look-back period that corresponds with the expected term. We estimate the risk-free interest rate based upon the U.S. Treasury yields in effect at award grant, for a period equaling the stock options’ expected term.

(ix) Foreign Currency Transactions and Translation

We translate the assets and liabilities of our foreign subsidiaries that are stated in their local functional currencies, to U.S. dollars at the rates of exchange in effect at the reported balance sheet date. Revenues and expenses are translated using average exchange rates during the reported period. Unrealized gains and losses from the translation of our subsidiaries’ financial statements (that are initially denominated in its foreign functional currency) are included as a separate component of “accumulated other comprehensive loss” in the Condensed Consolidated Balance Sheets.

We record foreign currency transactions, when initially denominated in a currency other than the respective functional currency of our subsidiary, at the prevailing exchange rate on the date of the transaction. Resulting unrealized and realized gains and losses (including those associated with intercompany loans with our subsidiaries, whose functional currency is not the U.S. dollar) are included in “other income (expense), net” within the Condensed Consolidated Statements of Operations, based on our expectation and intent that these intercompany transactions will be settled in the foreseeable future.

(x) Basic and Diluted Net (Loss) Income per Share

We calculate basic and diluted net (loss) income per share using the weighted average number of common shares outstanding during the periods presented. In periods of a net loss, basic and diluted loss per share are the same. For the diluted earnings per share calculation, we adjust the weighted average number of common shares outstanding to include only dilutive stock options, warrants, and other common stock equivalents outstanding during the period.

(xi) Income Taxes

Deferred tax assets and liabilities are recorded based on the estimated future tax effects of temporary differences between the tax basis of assets and liabilities and amounts reported in the financial statements, as well as operating losses and tax credit carry forwards using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Realization of deferred tax assets is dependent upon future earnings, the timing and amount of which are uncertain.

We have recorded a valuation allowance to reduce our deferred tax assets, because we believe that, based upon a weighting of positive and negative factors, it is more likely than not that these deferred tax assets will not be realized. If/when we determine that our deferred tax assets are realizable, an adjustment to the corresponding valuation allowance would increase our net income in the period that such determination was made.

In the event that we are assessed interest and/or penalties from taxing authorities that have not been previously accrued, such amounts would be included in “income tax benefit (expense)” within the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) in the period the notice was received.

(xii) Research and Development Costs

Our research and development costs are expensed as incurred, or as certain milestone payments become due, generally triggered by clinical or regulatory events.

(xiii) Fair Value Measurements

We determine measurement-date fair value based on the proceeds that would be received through the sale of the asset, or that we would pay to settle or transfer the liability, in an orderly transaction between market participants. We utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. Fair value measurements are based on a three-tier hierarchy that prioritizes the inputs used to measure fair value. These tiers include the following:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that are publicly accessible at the measurement date.

Level 2: Observable prices that are based on inputs not quoted on active markets, but that are corroborated by market data. These inputs may include quoted prices for similar assets or liabilities or quoted market prices in markets that are not active to the general public.

Level 3: Unobservable inputs are used when little or no market data is available. The fair value hierarchy gives the lowest priority to Level 3 inputs.

“Cash and cash equivalents” within our accompanying Condensed Consolidated Balance Sheets include certificates of deposit and money market funds that are valued utilizing Level 2 inputs. “Marketable securities” consist of mutual funds that are valued utilizing Level 2 inputs.

The fair value of our “drug development liability” within our accompanying Condensed Consolidated Balance Sheets was estimated using the discounted income approach model. The unobservable inputs (i.e., Level 3 inputs) in this valuation model that have the most significant effect on these liabilities include (i) estimates of research and development personnel costs needed to perform the research and development services, (ii) estimates of expected cash outflows to third parties for services and supplies over the expected period that the services will be performed, and (iii) an appropriate discount rate for these expenditures. These inputs are reviewed for reasonableness by management on at least on a quarterly basis.

“Acquisition-related contingent obligations” within our accompanying Condensed Consolidated Balance Sheets represent future amounts we may be required to pay in conjunction with our business combinations. See Note 9(a) for a discussion of contingent value rights granted as part of our acquisition of Talon, and Note 9(b) for the fair value of the liability associated with FDA approval of
C-E MELPHALAN. These liabilities are valued using Level 3 inputs and include probabilities and assumptions related to the timing and likelihood of achievement of regulatory and sales milestones.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

Balance Sheet Account Detail

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Balance Sheet Account Detail

3.	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, 2014 and December 31, 2013, our holdings included within “cash and cash equivalents” and “marketable securities” were at major financial institutions.

Our investment policy requires that investments in marketable securities be in only highly-rated instruments, which are primarily U.S. treasury bills or U.S. treasury-backed securities, and limited investments in securities of any single issuer. We maintain cash balances in excess of federally insured limits with reputable financial institutions. To a limited degree, the Federal Deposit Insurance Corporation (FDIC) 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 on our portfolio by investing in highly liquid, highly rated instruments, and limit investing in long-term maturity instruments.

The carrying amount of our equity securities, money market funds, bank certificate of deposits (“Bank CDs”), and mutual funds 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 “cash and cash equivalents” and “marketable securities”:


											Marketable Securities
	Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated fair Value		Cash and cash equivalents		Current		Long Term
September 30, 2014
Bank deposits	$	67,316	$	—	$	—	$	67,316	$	67,316	$	—	$	—
Money market funds		76,918		—		—		76,918		76,918		—		—
Bank CDs		244		—		—		244		—		244		—
Mutual funds		3,062		—		—		3,062		—		3,062		—

Total cash and equivalents and marketable securities	$	147,540	$	—	$	—	$	147,540	$	144,234	$	3,306	$	—


December 31, 2013
Bank deposits	$	55,911	$	—	$	—	$	55,911	$	55,911	$	—	$	—
Money market funds		100,395		—		—		100,395		100,395		—		—
Bank CDs		410		—		—		410		—		410		—
Mutual funds		3,061		—		—		3,061		—		3,061		—

Total cash and equivalents and marketable securities	$	159,777	$	—	$	—	$	159,777	$	156,306	$	3,471	$	—

As of September 30, 2014, none of these securities had been in a continuous unrealized loss position longer than one year.

(b) Property and Equipment

“Property and equipment, net of accumulated depreciation” consist of the following:


	September 30, 2014			December 31, 2013
Computer hardware and software	$	3,490		$	5,154
Laboratory equipment		643			1,063
Office furniture		345			1,575
Leasehold improvements		2,847			2,813

Property and equipment, at cost		7,325			10,605
(Less): Accumulated depreciation		(5,911	)		(9,070	)

Property and equipment, net of accumulated depreciation	$	1,414		$	1,535

Depreciation expense (included within “operating costs and expenses” in the accompanying Condensed Consolidated Statement of Operations) for the nine months ended September 30, 2014 and 2013, was $0.9 million and $1.0 million in each period. During the nine months ended September 30, 2014, we corrected our property and equipment balances to remove assets which were determined to no longer be in use (property and equipment at cost of $4.2 million, less accumulated depreciation of $4.0 million).

(c) Inventories

“Inventories” consist of the following:


	September 30, 2014		December 31, 2013
Raw materials	$	1,930	$	1,794
Work-in-process		3,084		3,312
Finished goods		4,929		8,413

	$	9,943	$	13,519

(d) Prepaid expenses and other current assets

“Prepaid expenses and other current assets” consist of the following:


	September 30, 2014		December 31, 2013
Prepaid operating expenses	$	4,280	$	3,213
Research and development supplies		225		—

	$	4,505	$	3,213

(e) Other receivables

“Other receivables” consist of the (i) amounts we expect to be refunded from taxing authorities for our income taxes paid, relating to fiscal year 2012, and the (ii) amounts we expect to be reimbursed from certain third-parties for incurred drug development expenses.


	September 30, 2014		December 31, 2013
Income tax receivable	$	6,261	$	7,539
Drug development expenses - reimbursement receivables		3,087		—

	$	9,348	$	7,539

(f) Intangible Assets and Goodwill

“Intangible assets, net of accumulated amortization” consist of the following:


			September 30, 2014
	Historical Cost		Accumulated Amortization			Foreign Currency Translation		Impairment		Net Amount		Full Amortization Period (months)		Remaining Amortization Period (months)
MARQIBO IPR&D (NHL indication)	$	17,600	$	—		$	—	$	—	$	17,600		n/a		n/a
C-E MELPHALAN IPR&D		7,700		—			—		—		7,700		n/a		n/a
BELEODAQ distribution rights		25,000		(469	)		—		—		24,531		160		157
MARQIBO distribution rights		26,900		(3,145	)		—		—		23,755		81		66


			September 30, 2014
	Historical Cost		Accumulated Amortization			Foreign Currency Translation			Impairment			Net Amount		Full Amortization Period (months)		Remaining Amortization Period (months)
FOLOTYN distribution rights		118,400		(17,669	)		—			—			100,731		152		128
ZEVALIN distribution rights – U.S.		41,900		(26,245	)		—			—			15,655		122		51
ZEVALIN distribution rights – Ex-U.S.		23,490		(7,029	)		(1,232	)		—			15,229		95		65
FUSILEV distribution rights		16,778		(5,908	)		—			—			10,870		131		90
FOLOTYN out-license*		27,900		(5,704	)		—			(1,023	)		21,173		110		94

Total intangible assets	$	305,668	$	(66,169	)	$	(1,232	)	$	(1,023	)	$	237,244

On May 29, 2013, we amended our collaboration agreement with Mundipharma in order to modify the scope of their licensed territories and the respective development obligations. As a result of the amendment, Europe and Turkey were excluded from Mundipharma’s commercialization territory, and royalty and milestone rates were modified. The modification of our associated royalty and milestone rights constituted a change in the contractual provisions under which we measured our original acquired intangible asset (i.e., FOLOTYN rights). We determined that an impairment of the FOLOTYN out-license rights to Mundipharma of $1.0 million resulted from this amendment.

Our annual impairment evaluation (as of October 1^st) of our indefinite-lived intangible assets (see Note 2(vii)) is ongoing and will be completed by our management by December 2014. The assets under review include MARQIBO IPR&D and C-E MELPHALAN IPR&D, which we carry on our accompanying Condensed Consolidated Balance Sheet as of September 30, 2014, at its net book value of $17.6 million and $7.7 million, respectively.


			December 31, 2013
	Historical Cost		Accumulated Amortization			Foreign Currency Translation		Impairment			Net Amount
MARQIBO IPR&D (NHL indication)	$	17,600	$	—		$	—	$	—		$	17,600
C-E MELPHALAN IPR&D		7,700		—			—		—			7,700
MARQIBO distribution rights		26,900		(1,107	)		—		—			25,793
FOLOTYN distribution rights		118,400		(10,587	)		—		—			107,813
ZEVALIN distribution rights – U.S.		41,900		(23,455	)		—		—			18,445
ZEVALIN distribution rights – Ex-U.S.		23,490		(5,343	)		682		—			18,829
FUSILEV distribution rights		16,778		(4,821	)		—		—			11,957
FOLOTYN out-license		27,900		(3,662	)		—		(1,023	)		23,215

Total intangible assets	$	280,668	$	(48,975	)	$	682	$	(1,023	)	$	231,352

Intangible asset amortization expense recognized in the nine months ended September 30, 2014 and 2013 was $17.8 million and $14.8 million, respectively. Estimated intangible asset amortization expense (excluding incremental amortization from the reclassification of IPR&D to developed technology) for the remainder of 2014 and the five succeeding fiscal years and thereafter is as follows:


Years Ending December 31
Remainder of 2014	$	6,585
2015		26,342
2016		26,342
2017		26,342
2018		26,187
2019		22,622
2020 and thereafter		76,445

	$	210,865

“Goodwill” is comprised of the following (by source):


	September 30, 2014			December 31, 2013
Acquisition of Talon	$	10,526		$	10,526
Acquisition of ZEVALIN Ex-U.S. distribution rights		2,526			2,525
Acquisition of Allos		5,346			5,346
Foreign currency exchange translation effects		(103	)		104

	$	18,295		$	18,501

(g) Other assets

“Other assets” are comprised of the following:


	September 30, 2014		December 31, 2013
Equity securities – CASI (see Note 10)**	$	9,676	$	3,593
Supplies		268		190
Promissory note, net of discount – CASI		1,310		—
2018 Convertible Notes issuance costs		2,989		3,432
Executive officer life insurance – cash surrender value		6,913		5,362

	$	21,156	$	12,577

These equity securities were excluded from “marketable securities” (see Note 3(a)) due to our intent to hold these securities for at least one year beyond September 30, 2014, given the nature of the transaction that gave rise to our ownership of them, as discussed in Note 10. Gross unrealized gains from these equity securities (recognized through “other comprehensive income”) were $1.0 million for the three and nine months ended September 30, 2014.

(h) Accounts payable and other accrued liabilities

“Accounts payable and other accrued liabilities” are comprised of the following:


	September 30, 2014		December 31, 2013
Trade payables		29,140		12,796
Accrued research and development expenses		5,330		6,433
Accrued selling, general and administrative expenses		10,251		8,870
Accrued rebates		40,037		28,893
Accrued product royalty		4,485		9,498
Allowance for returns		1,186		2,900
Accrued data and distribution fees		3,430		2,430
Accrued GPO administrative fees		3,041		2,327
Inventory management fee		1,021		616
Allowance for chargebacks		3,880		5,074

	$	101,801	$	79,837

Amounts presented within “accounts payable and other accrued liabilities” in the accompanying Condensed Consolidated Balance Sheets specifically for GTN estimates (see Note 2(i)) are as follows:


Description	Rebates and Chargebacks			Data and Distribution, GPO Fees, and Inventory Management Fees			Returns
Balance as of December 31, 2012	$	26,176		$	14,149		$	5,056
Add: provisions (recovery)		63,609			19,067			(2,034	)
(Less): credits or actual allowances		(55,818	)		(27,843	)		(122	)

Balance as of December 31, 2013		33,967			5,373			2,900
Add: provisions (recovery)		56,216			15,123			(1,054	)
(Less): credits or actual allowances		(46,266	)		(13,005	)		(660	)

Balance as of September 30, 2014	$	43,917		$	7,491		$	1,186

(i) Other long-term liabilities

Other long-term liabilities are comprised of the following:


	September 30, 2014		December 31, 2013
Accrued executive deferred compensation	$	4,719	$	3,949
Deferred rent (non-current portion)		408		366

Business acquisition liability		—		298
Other tax liabilities		660		1,352

	$	5,787	$	5,965

(j) Accumulated other comprehensive income

“Accumulated other comprehensive income” (a component of stockholders’ equity) includes, among other items, unrealized gains and losses from available-for-sale securities (“AFS”). When AFS securities are sold, and the resulting gain or loss is realized, any corresponding unrealized gain or loss amounts previously included within accumulated other comprehensive income is eliminated. In the third quarter of 2014, we sold certain stock holdings that had been classified as an AFS. As a result, we reversed $2.9 million of unrealized gain from “accumulated other comprehensive income” previously included and reported on our June 30, 2014 Condensed Consolidated Balance Sheet of which $2.2 million was recognized as a realized gain through “other income (expense), net” for the three and nine months ended September 30, 2014.

Gross-to-Net Product Sales

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Gross-to-Net Product Sales

4.	GROSS-TO-NET PRODUCT SALES

The below table presents a GTN product sales reconciliation for the accompanying Condensed Consolidated Statement of Operations:


	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Gross product sales	$	75,331		$	61,256		$	205,158		$	161,750
Rebates and chargebacks		(21,495	)		(15,136	)		(56,215	)		(46,219	)
Data, distribution and GPO administrative fees		(5,707	)		(4,631	)		(15,123	)		(14,677	)
Prompt pay discount		(2	)		(50	)		(7	)		(155	)
Product returns allowance		(211	)		—			1,054			2,299

Product sales, net	$	47,916		$	41,439		$	134,867		$	102,998

Product Sales, Net by Geographic Region and Product Line

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Product Sales, Net by Geographic Region and Product Line

5.	PRODUCT SALES, NET BY GEOGRAPHIC REGION AND PRODUCT LINE

The below table presents “product sales, net” by geography for the three and nine months ended September 30, 2014 and 2013:


	Three months ended September 30,								Nine months ended September 30,
	2014				2013				2014				2013
United States	$	46,382	96.8	%	$	38,452	92.8	%	$	128,380	95.2	%		95,542	92.8	%

International:
Europe		849	1.8	%		1,251	3.0	%		2,685	2.0	%		2,882	2.8	%
Asia Pacific		685	1.4	%		1,736	4.2	%		3,802	2.8	%		4,574	4.4	%

Total international		1,534	3.2	%		2,987	7.2	%		6,487	4.8	%		7,456	7.2	%

Product sales, net	$	47,916	100.0	%	$	41,439	100.0	%	$	134,867	100.0	%		102,998	100.0	%

The below table presents “product sales, net” by product line for the three and nine months ended September 30, 2014 and 2013:


	Three months ended September 30,								Nine months ended September 30,
	2014				2013				2014				2013
FUSILEV	$	26,883	56.1	%	$	23,057	55.6	%	$	75,630	56.1	%	$	47,764	46.4	%
FOLOTYN		12,677	26.5	%		10,550	25.5	%		35,332	26.2	%		33,031	32.1	%
ZEVALIN		4,585	9.6	%		7,768	18.7	%		17,221	12.8	%		22,139	21.5	%
MARQIBO		1,793	3.7	%		64	(0.2	)%		4,706	3.5	%		64	—	%
BELEODAQ		1,978	4.1	%		—	—	%		1,978	1.5	%		—	—	%

Product sales, net	$	47,916	100.0	%	$	41,439	100.0	%	$	134,867	100.0	%	$	102,998	100.0	%

Stock-Based Compensation

9 Months Ended

Sep. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

6.	STOCK-BASED COMPENSATION

We classify our stock-based compensation expense (inclusive of our incentive stock plan, employee stock purchase plan, and 401(k) contribution matching program) in the accompanying Condensed Consolidated Statements of Operations, based on the department to which the recipient belongs. Stock-based compensation expense included within “operating costs and expenses” for the three and nine months ended September 30, 2014 and 2013 was as follows:


	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
Research and development	$	411	$	283	$	1,366	$	1,152
Selling, general and administrative		2,653		2,708		7,223		7,510

Total share-based compensation	$	3,064	$	2,991	$	8,589	$	8,662

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References+ Details

Net Loss Per Share

9 Months Ended

Sep. 30, 2014

Earnings Per Share [Abstract]

Net Loss Per Share

7.	NET LOSS PER SHARE

Net loss per share was computed by dividing net loss by the weighted average number of common shares outstanding for the three and nine months ended September 30, 2014 and 2013:


	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Net loss	$	(11,539	)	$	(7,812	)	$	(42,743	)	$	(22,762	)

Weighted average shares – basic and diluted		64,765,072			61,903,242			64,369,466			60,013,842
Net loss per share – basic and diluted	$	(0.18	)	$	(0.13	)	$	(0.66	)	$	(0.38	)

The below listed outstanding securities were excluded from our calculation of net loss per share (using the treasury stock and if-converted method, as applicable) because their impact would have been anti-dilutive due to net loss per share in the three and nine months ended September 30, 2014 and 2013:


	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
2018 Convertible Notes		11,401,284		—		11,401,284		—
Common stock options		2,173,016		2,881,993		2,256,053		3,247,710
Restricted stock awards		972,881		1,044,904		972,881		1,044,904
Common stock warrants		121,741		132,565		126,909		160,486
Preferred stock		40,000		40,000		40,000		40,000

Total		14,708,922		4,099,462		14,797,127		4,493,100

- Definition

The entire disclosure for earnings per share.

+ References+ Details

Fair Value Measurements

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements

8.	FAIR VALUE MEASUREMENTS

The below table summarizes certain asset and liability fair values that are included within our accompanying Condensed Consolidated Balance Sheets, and their designations among three fair value measurement categories (as described within Note 2(xiii)):


	September 30, 2014 Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Assets:
Bank CDs	$	—	$	244	$	—	$	244
Money market currency funds		—		76,918		—		76,918
Mutual funds		—		3,062		—		3,062
Deferred compensation investments, including life insurance cash surrender value		—		6,913		—		6,913
Equity securities		9,676		—		—		9,676

	$	9,676	$	87,137	$	—	$	96,813

Liabilities:
Deferred executive compensation liability	$	—	$	4,718	$	—	$	4,718
Drug development liability		—		—		16,402		16,402
Ligand Contingent Consideration		—		—		4,337		4,337
Talon CVR		—		—		5,840		5,840
Corixa Liability		—		—		62		62

	$	—	$	4,718	$	26,641	$	31,359


	December 31, 2013 Fair Value Measurements
	Level 1		Level 2		Level 3		Total
Assets:
Bank CDs	$	—	$	410	$	—	$	410
Money market currency funds		—		100,395		—		100,395
Mutual funds		—		3,061		—		3,061
Deferred compensation investments, including life insurance cash surrender value		—		5,361		—		5,361
Equity securities		3,593		—		—		3,593

	$	3,593	$	109,227	$	—	$	112,820

Liabilities:
Deferred executive compensation liability	$	—	$	3,949	$	—	$	3,949
Deferred development costs		—		—		17,742		17,742
Ligand Contingent Consideration		—		—		4,000		4,000
Talon CVR		—		—		4,329		4,329

	$	—	$	3,949	$	26,071	$	30,020

The following summarizes the fair value measurement activity for our liabilities that utilize Level 3 inputs:


	Fair Value Measurements of Unobservable Inputs (Level 3)
Balance at December 31, 2012	$	14,520

Transfers in (out) of Level 3		—
Deferred development costs		5,509
Deferred payment contingency		(2,287	)
Ligand Contingent Consideration		4,000
Talon CVR		4,329

Balance at December 31, 2013		26,071

Transfers in (out) of Level 3		—
Deferred development costs (see Note 13)		(1,340	)
Ligand Contingent Consideration (see Note 9(b))		337
Talon CVR (see Note 9(a))		1,511
Corixa Liability (see Note 14(b)(i))		62

Balance at September 30, 2014**	$	26,641

**	This amount is comprised of current and long-term portion of “drug development liability” and “acquisition-related contingent obligations” on our accompanying Condensed Consolidated Balance Sheets.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References+ Details

Business Combinations and Contingent Consideration

9 Months Ended

Sep. 30, 2014

Business Combinations [Abstract]

Business Combinations and Contingent Consideration

9.	BUSINESS COMBINATIONS AND CONTINGENT CONSIDERATION

(a) Acquisition of Talon Therapeutics, Inc.

Overview of Talon Acquisition

On July 17, 2013, we purchased all of the outstanding shares of common stock of Talon Therapeutics, Inc. (“Talon”). Through the acquisition of Talon, we gained worldwide rights to MARQIBO. The Talon purchase consideration comprised of (i) an aggregate upfront cash amount of $11.3 million, (ii) issuance of 3.0 million shares of our common stock, then equivalent to $26.3 million (based on a closing price of $8.77 per share on July 17, 2013), and (iii) the issuance of contingent value rights (“CVR”) initially valued at $6.5 million.

The CVR was valued using a valuation model that probability-weights expected outcomes (ranging from 50% to 100%) and discounts those amounts to their present value, using a discount rate of 25% (these represent unobservable inputs and are therefore classified as Level 3 inputs – see Note 2 (xiii)). The CVR has a maximum payout of $195.0 million if all sales and regulatory approval milestones are achieved, as summarized below:

•

$5.0 million upon the achievement of net sales of MARQIBO in excess of $30.0 million in any calendar year

•

$10.0 million upon the achievement of net sales of MARQIBO in excess of $60.0 million in any calendar year

•

$25.0 million upon the achievement of net sales of MARQIBO in excess of $100.0 million in any calendar year

•

$50.0 million upon the achievement of net sales of MARQIBO in excess of $200.0 million in any calendar year

•

$100.0 million upon the achievement of net sales of MARQIBO in excess of $400.0 million in any calendar year

•

$5.0 million upon receipt of marketing authorization from the FDA regarding Menadione Topical Lotion

Talon CVR Fair Value as of September 30, 2014 and December 31, 2013

The CVR fair value will continue to be evaluated on a quarterly basis. Current and future changes in its fair value results from the likelihood and timing of milestone achievement and/or the corresponding discount rate applied thereon. Adjustments to CVR fair value are recognized within “change in fair value of contingent consideration related to acquisitions” in the accompanying Condensed Consolidated Statements of Operations.


	Fair Value of Talon CVR
December 31, 2013	$	4,329
Fair value adjustment for the nine months ended September 30, 2014		1,511

September 30, 2014	$	5,840

(b) Acquisition of Rights to Captisol-Enabled® Melphalan

Overview of Acquisition of Rights to Captisol-Enabled® Melphalan

In March 2013, we completed the acquisition of exclusive global development and commercialization rights to Captisol-enabled ®, propylene glycol-free MELPHALAN (“C-E MELPHALAN”) for use as a conditioning treatment prior to autologous stem cell transplant for patients with multiple myeloma from CyDex Pharmaceuticals, Inc. a wholly-owned subsidiary of Ligand Pharmaceuticals Incorporated (“Ligand”) for an initial license fee of $3.0 million.

We accounted for this transaction as a business combination, which requires that assets acquired and liabilities assumed be recognized on the balance sheet at their fair values, which involves our estimates of future discounted cash flows as of the transaction date.

We are required to pay Ligand additional amounts up to an aggregate $66.0 million, upon the achievement of certain regulatory milestones and net sales thresholds (“Ligand Contingent Consideration”), and we also assumed full financial responsibility for its ongoing clinical and regulatory development program. We also must pay royalties in the range of 15% to 25% on our future net sales of licensed products in all territories.

Consideration Transferred

The acquisition-date fair value of the consideration transferred consisted of the following:


Cash consideration	$	3,000
Ligand Contingent Consideration		4,700

Total purchase consideration	$	7,700

Fair Value Estimate of Asset Acquired and Liability Assumed

The total purchase consideration is allocated to the acquisition of the net tangible and intangible assets based on their estimated fair values as of the closing date. The allocation of the total purchase price to the net assets acquired is as follows:


IPR&D C-E MELPHALAN rights	$	7,700

We estimated the fair value of this IPR&D using the “income approach”. The income approach uses valuation techniques to convert future expected net cash flows to a single discounted present-value. The fair value estimate took into account our estimates of future incremental earnings that may be achieved upon regulatory approval, promotion, and distribution associated with the rights, and included estimated cash flows of approximately 10 years and a discount rate of approximately 25%.

The fair value of the contingent consideration liability assumed was determined using the probability of success and the discounted cash flow method of the income approach, which assumes that FDA approval of C-E MELPHALAN will occur on or about November 30, 2015. Upon receipt of FDA approval, we will be obligated to make a milestone payment to Ligand of $6.0 million.

Ligand Contingent Consideration Fair Value as of September 30, 2014 and December 31, 2013

The Ligand Contingent Consideration fair value will continue to be evaluated on a quarterly basis. This liability is included within “acquisition-related contingent obligations” in the accompanying Condensed Consolidated Balance Sheets. Current and future changes in its fair value results from the likelihood and timing of milestone achievement and/or the corresponding discount rate applied thereon. Adjustments to Ligand Contingent Consideration fair value are recognized within “change in fair value of contingent consideration related to acquisitions” in the accompanying Condensed Consolidated Statements of Operations.


	Fair Value of Ligand Contingent Consideration
December 31, 2013	$	4,000
Fair value adjustment for the nine months ended September 30, 2014		337

September 30, 2014	$	4,337

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

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+ Details

Out-License of Marqibo, Zevalin, & C-E Melphalan in China Territory

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Out-License of Marqibo, Zevalin, & C-E Melphalan in China Territory

10.

OUT-LICENSE OF MARQIBO, ZEVALIN, & C-E MELPHALAN IN CHINA TERRITORY

Overview of CASI Out-License

On September 17, 2014, we executed three product out-license agreements with a perpetual term (collectively, the “CASI Out-License”) with CASI Pharmaceuticals, Inc. (“CASI”), a publicly-traded biopharmaceutical company (NASDAQ: CASI) with a primary focus on the China market. Under the CASI Out-License, we granted CASI the exclusive rights to distribute two of our commercialized oncology drugs, ZEVALIN and MARQIBO, and our Phase 3 drug candidate, C-E MELPHALAN (“CASI Out-Licensed Products”) in greater China (which includes Taiwan, Hong Kong and Macau). In return, we received CASI equity for the rights related to ZEVALIN and C-E MELPHALAN and a secured promissory note for the rights related to MARQIBO. Additionally, for a period ending upon the earlier to occur of (i) the date on which CASI has raised, in the aggregate, $50 million in net proceeds through capital raising activities or (ii) September 17, 2019 (subject to certain extensions), we have a contingent right to receive additional CASI equity in order to maintain our post-investment ownership percentage if CASI issues securities (subject to a limited exception for certain equity compensation grants).

CASI will be responsible for the development and commercialization of these three drugs, including the submission of import drug registration applications to regulatory authorities and conducting any confirmatory clinical studies in greater China. We have agreed to act as CASI’s procurement agent for their future commercial supply of the CASI Out-Licensed Products on a cost-plus basis, under typical market terms.

Proceeds Received

The proceeds we received, and its fair value on the CASI Out-License execution date, consisted of the following:


CASI common stock (a) (5.4 million shares)	$	8,649
CASI secured promissory note due March 17, 2016, net of fair value discount (b) ($1.5 million face value and 0.5% annual coupon)		1,310

Total consideration received	$	9,959

(a)	Value determined based on the September 17, 2014 closing price of 5.4 million shares of CASI common stock on the NASDAQ Capital Market of $1.60 per share.

(b)	Present value estimated using the terms of the $1.5 million promissory note, and the application of a synthetic debt rating based on CASI’s publicly-available financial information, and the prevailing interest yields on similar public debt securities as of September 17, 2014.

In addition, CASI will be responsible for paying any royalties or milestones that we are obligated to pay to our third-party licensors resulting from the achievement of certain milestones and/or sales of CASI Out-Licensed Products, but only to the extent of the greater China portion of such royalties or milestones.

Recognition of Proceeds – License Fee Revenue

The $10.1 million (undiscounted) value of the upfront proceeds that we received from CASI will be recognized within “license fees and service revenue” through the Consolidated Statements of Operations. The value assigned for each of these products was based on the number of CASI shares issued, or the promissory note issued, as consideration under each of the three separately negotiated out-license agreements.

Revolving Line of Credit

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Revolving Line of Credit

11.

REVOLVING LINE OF CREDIT

We entered into a credit agreement on September 5, 2012 with Bank of America, N.A, as the administrative agent and Wells Fargo Bank, N.A, as an initial lender (the “Credit Agreement”). The Credit Agreement provided us with a committed $50.0 million revolving line of credit facility (the “Credit Facility”). The Credit Facility was repaid in full, then immediately terminated, on December 20, 2013 in connection with the sale and issuance of our 2018 Convertible Notes (see Note 12).

The Credit Facility bore interest, at our election, at a rate equal to the London Interbank Offer Rate (LIBOR), plus an applicable margin (2.75% to 4.25%, dependent on a defined liquidity ratio). An unused line fee was payable quarterly in an amount ranging from 0.38% to 0.63%.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References+ Details

Convertible Senior Notes

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Convertible Senior Notes

12.

CONVERTIBLE SENIOR NOTES

On December 17, 2013, we entered into an agreement for the sale of $120.0 million aggregate principal amount of 2.75% Convertible Senior Notes due December 2018 (the “2018 Convertible Notes”). The 2018 Convertible Notes are convertible into shares of our common stock at a conversion rate of 95 shares per $1,000 principal amount of the 2018 Convertible Notes, totaling 11.4 million common shares if fully converted. The in-the-money conversion price is equivalent to $10.53 per common share. The conversion rate and conversion price is subject to adjustment under certain limited circumstances. The 2018 Convertible Notes bear interest at a rate of 2.75% per year, payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2014. The 2018 Convertible Notes will mature and become payable on December 15, 2018, subject to earlier conversion into common stock at the holders’ option.

The sale of the 2018 Convertible Notes closed on December 23, 2013 and our net proceeds were $115.4 million, after deducting banker and professional fees of $4.6 million. We used a portion of these net proceeds to simultaneously enter into “bought call” and “sold warrant” transactions with Royal Bank of Canada (collectively, the “Note Hedge”). We recorded the Note Hedge on a net cost basis of $13.1 million, as a reduction to “additional paid-in capital” in our accompanying Condensed Consolidated Balance Sheets. Under applicable GAAP, the Note Hedge transaction is not expected to be marked-to-market through earnings or comprehensive income in future reported periods.

We entered into Note Hedge transactions to reduce the potential dilution to our stockholders and/or offset any cash payments that we are required to make in excess of the principal amount, upon conversion of the 2018 Convertible Notes (in the event that the market price of our common stock is greater than the conversion price). The strike price of the “bought call” is equal to the conversion price and conversion rate of the 2018 Convertible Notes, matching the 11.4 million common shares the 2018 Convertible Notes may be converted into. The strike price of our “sold warrant” is $14.03 per share of our common stock, and is also for 11.4 million common shares.

Prior to June 15, 2018, holders may convert all or a portion of their 2018 Convertible Notes only under any of the following circumstances: (1) during any fiscal quarter (and only during such fiscal quarter), if, for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on the last trading day of the immediately preceding fiscal quarter, the last reported sale price of our common stock on such trading day is greater than or equal to 130% of the applicable conversion price on such trading day; (2) during the five consecutive business day period immediately following any five consecutive trading day period in which, for each trading day of that measurement period, the trading price per $1,000 principal amount of 2018 Convertible Notes for such trading day was less than 98% of the product of (i) the last reported sale price of our common stock on such trading day and (ii) the applicable conversion rate on such trading day; (3) upon the occurrence of certain corporate transactions; and (4) at any time prior to our stockholders’ approval to settle the 2018 Convertible Notes in our common shares and/or cash. On and after June 15, 2018 until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or a portion of their 2018 Convertible Notes at any time.

As of September 30, 2014, the 2018 Convertible Notes are eligible to be converted into common stock, based on element (4) above being met, since our stockholders’ approval of this flexible settlement feature has not yet occurred.

We initially may only settle conversions of the 2018 Convertible Notes by delivering shares of our common stock. However, if we obtain stockholder approval, we may, at our election, settle conversions of the 2018 Convertible Notes by paying or delivering, as the case may be, cash, shares of common stock, or a combination of cash and shares of common stock.

The carrying value of the 2018 Convertible Notes as of September 30, 2014 is summarized as follows:


Principal amount	$	120,000
(Less): Unamortized debt discount (amortized through December 2018)		(24,964	)

September 30, 2014	$	95,036

The following table sets forth the components of the “interest expense” recognized in the accompanying Condensed Consolidated Statements of Operations for the 2018 Convertible Notes for the nine months ended September 30, 2014:


Contractual coupon interest expense	$	2,503
Amortization of debt issuance costs		443
Accretion of debt discount		3,556

Total	$	6,502

Effective interest rate		8.59	%

Mundipharma Agreement

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Mundipharma Agreement

13.

MUNDIPHARMA AGREEMENT

As the result of our acquisition of Allos Therapeutics, Inc. on September 5, 2012 (through which we obtained distribution rights for FOLOTYN), we assumed its obligations under an active strategic collaboration agreement with a third-party, Mundipharma (the “Mundipharma Collaboration Agreement”). Under the Mundipharma Collaboration Agreement, we retained full commercialization rights for FOLOTYN in the U.S. and Canada, with Mundipharma having exclusive rights to commercialize FOLOTYN in all other countries in the world (the “Mundipharma Territories”).

On May 29, 2013, the Mundipharma Collaboration Agreement was amended and restated (the “Amended Munipharma Collaboration Agreement”), in order to modify: (i) the scope of the licensed territory, (ii) milestone payments, (iii) royalty rates, and (iv) drug development obligations. In connection with the Amended Munipharma Collaboration Agreement, we received a one-time $7.0 million payment from Mundipharma for certain research and development activities to be performed by us.

As a result of the Amended Mundipharma Collaboration Agreement, (a) Europe and Turkey were excluded from Mundipharma’s commercialization territory, (b) we may receive regulatory milestone payments of up to $16.0 million, and commercial progress and sales-dependent milestone payments of up to $107.0 million, (c) we will receive tiered double-digit royalties based on net sales of FOLOTYN within Mundipharma’s licensed territories, and (d) we and Mundipharma will bear our own FOLOTYN development costs.

We recorded the initial September 2012 fair value of the related drug development liability of $12.3 million, using the discounted cash flow method of the income approach. The fair value of this liability was determined to be $16.4 million as of September 30, 2014 (inclusive of the $7.0 million payment received from Mundipharma). This value is included in the current and long-term portions of “drug development liability” within the accompanying Condensed Consolidated Balance Sheets, and it includes our assumptions about personnel needed to perform these research and development activities, third party costs for projected clinical trial enrollment, and patient treatment-related follow up through approximately 2031.

We will assess this liability at each subsequent reporting date and record its adjustment through “research and development” expense in our Condensed Consolidated Statements of Operations.


	Drug Development Liability, Current – FOLOTYN		Drug Development Liability, Long Term – FOLOTYN			Total Drug Development Liability – FOLOTYN
Balance at December 31, 2013	$	3,119	$	14,623		$	17,742
Transfer from long-term to current in 2014		—		—			—
(Less): Expenses incurred in 2014		—		(1,340	)		(1,340	)

Balance at September 30, 2014	$	3,119	$	13,283		$	16,402

Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

14.

COMMITMENTS AND CONTINGENCIES

(a) Facility Leases

We lease our principal executive office in Henderson, Nevada under a non-cancelable operating lease expiring April 30, 2019. We also lease our research and development facility in Irvine, California under a non-cancelable operating lease expiring May 31, 2019, in addition to several other administrative office leases. Each lease agreement contains scheduled rent increases which are accounted for on a straight-line basis.

(b) Licensing Agreements, Co-Development Agreements, and Milestone Payments

Our drug candidates are being developed pursuant to license agreements that provide us with territory-specific rights to its manufacture, sublicense, and sale. We are generally responsible for all development costs, patent filings and maintenance costs, sales and marketing costs, and liability insurance costs. We are also obligated to make certain milestone payments to third parties upon the achievement of regulatory and sales milestones that are specified in these license agreements. We estimate and present a corresponding liability on our Condensed Consolidated Balance Sheets when amounts are probable and reasonably estimable. In addition, we are obligated to pay royalties based on our current and future net sales of in-licensed products.

Our most significant of these agreements are listed and summarized below:

(i) ZEVALIN U.S.: Licensing and development in the U.S.

In December 2008, we acquired rights to commercialize and develop ZEVALIN in the U.S. as the result of a transaction with a third-party, Cell Therapeutics, Inc. (“CTI”) through our wholly-owned subsidiary, RIT Oncology LLC (“RIT”). We assumed certain agreements with various third parties related to ZEVALIN intellectual property related to its manufacture, use, and sale in the U.S.

In accordance with the terms of assumed contracts, we are required to meet specified payment obligations, including a milestone payment to Corixa Corporation of $5.0 million based on ZEVALIN sales in the U.S. (the “Corixa Liability”). This milestone has not yet been met, and $0.1 million for this potential milestone achievement is included within “acquisition-related contingent obligations” in our accompanying September 30, 2014 Condensed Consolidated Balance Sheet. Our U.S. net sales-based royalties are in the low to mid-single digits to Genentech, Inc. and mid-single digits to Corixa.

(ii) ZEVALIN Ex-U.S.: License and Asset Purchase Agreement with Bayer Pharma

In April 2012, through our wholly-owned subsidiary, Spectrum Pharmaceuticals Cayman, L.P., we completed the acquisition of licensing rights to market ZEVALIN outside of the U.S. from Bayer Pharma AG (“Bayer”). ZEVALIN is currently approved in more than 40 countries outside the U.S. for the treatment of B-cell non-Hodgkin lymphoma, including countries in Europe, Latin America and Asia.

In consideration for the rights granted under the agreement, concurrent with the closing, we paid Bayer a one-time fee of €19.0 million. Our ex-U.S. net sales-based royalty to Bayer ranges between the single digits to mid-teens. Unless earlier terminated, the term of the agreement continues until the expiration of the last-to-expire patent covering the sale of a licensed product in the relevant country, or 15 years from the date of first commercial sale of the licensed product in such country, whichever is longer.

(iii) FUSILEV: Amended and Restated License Agreement with Merck & Cie AG

In May 2006, we amended and restated a license agreement with Merck & Cie AG (“Merck”), which we assumed in connection with our March 2006 acquisition of the assets of Targent. Pursuant to the license agreement with Merck, we obtained the exclusive license to use regulatory filings related to FUSILEV and a non-exclusive license under certain patents and know-how to develop, manufacture, use, and sell FUSILEV in the field of oncology in North America in return for a royalty percentage (in the mid-single digits) of net sales. Merck is eligible to receive a $0.2 million payment from us upon the achievement of a FDA approval of an oral form of FUSILEV. This milestone has not yet been met, and no such value is included within “total liabilities” in our accompanying Condensed Consolidated Balance Sheets for its potential achievement.

(iv) FOLOTYN: License Agreement with Sloan-Kettering Institute, SRI International and Southern Research Institute

In December 2002, Allos entered into the FOLOTYN License Agreement with Sloan-Kettering Institute for Cancer Research, SRI International, and Southern Research Institute. As a result of Allos becoming our wholly owned subsidiary in September 2012, we are bound by the FOLOTYN License Agreement under which we obtained exclusive worldwide rights to a portfolio of patents and patent applications related to FOLOTYN and its uses. Under the terms of the FOLOTYN License Agreement, we are required to fund all development programs and will have sole responsibility for all commercialization activities. In addition, we pay graduated royalties to our licensors based on our (including sub licensees) worldwide annual net sales of FOLOTYN. Royalties are 8% of annual worldwide net sales up to $150 million; 9% of annual worldwide net sales of $150 million through $300 million; and 11% of annual worldwide net sales in excess of $300 million.

(v) C-E MELPHALAN: License Agreement with Cydex Pharmaceuticals, Inc.

In March 2013, we completed the acquisition of exclusive global development and commercialization rights to
C-E MELPHALAN from Ligand (see Note 9(b)). In April 2014, we reported that C-E MELPHALAN had met its primary endpoint in a pivotal trial for use as a conditioning treatment prior to autologous stem cell transplant for patients with multiple myeloma, and as a result, we intend to file a NDA with the FDA in the fourth quarter of 2014.

We assumed full responsibility for its ongoing clinical and regulatory development program. We are required to pay Ligand additional amounts of up to $66 million, upon achievement of certain regulatory milestones and net sales thresholds, which we have valued at $4.3 million and $4.0 million within “acquisition-related contingent obligations” in our accompanying Condensed Consolidated Statements of Operations as of September 30, 2014 and December 31, 2013, respectively. We will also pay royalties in the range of 15% to 25% on our net sales of licensed products in all territories.

(vi) MARQIBO: Agreement with Talon Therapeutics, Inc.

In July 2013, we completed the acquisition of Talon, through which we obtained exclusive global development and commercialization rights to MARQIBO (see Note 9(a)). As part of this acquisition, we issued the former Talon stockholders contingent value rights (“CVR”) that we have valued and presented on our accompanying Condensed Consolidated Balance Sheets as a $5.8 million and $4.3 million liability within “acquisition-related contingent obligations” as of September 30, 2014 and December 31, 2013, respectively. The CVR has a maximum payout of $195 million if all sales and regulatory approval milestones are achieved.

(vii) APAZIQUONE: In-License Agreement with Allergan, Inc.

In October 2008, we entered into an exclusive development and commercialization collaboration agreement with Allergan for APAZIQUONE. Pursuant to the terms of the agreement, Allergan paid us an up-front non-refundable fee of $41.5 million at closing (which we have amortized through revenue within “license fees and service revenue” in full as of December 31, 2013).

In January 2013, we entered into a second amendment to the license, development, supply and distribution agreement with Allergan to amend the agreement and reacquire the rights originally licensed to Allergan in the U.S., Europe, and other territories in exchange for a tiered single-digit royalty on certain products containing APAZIQUONE, and relieved Allergan of its development and commercialization obligations.

As a result of this amendment to the agreement, Allergan has no remaining obligations to us. We will be obligated to pay Allergan a tiered single-digit royalty not to exceed mid-single digits based upon our net sales of certain products containing APAZIQUONE in specified territories. Additionally, we will be obligated to pay any royalties or other payments due to certain licensors of underlying intellectual property, as well as to provide indemnification of Allergan for claims arising from the manufacture, development, or commercialization of pharmaceutical products containing APAZIQUONE by us.

(viii) APAZIQUONE: Collaboration Agreement with Nippon Kayaku Co. LTD.

In November 2009, we entered into a collaboration agreement with Nippon Kayaku Co., LTD. (“Nippon Kayaku”) for the development and commercialization of APAZIQUONE in Asia, except North and South Korea (the “Nippon Kayaku Territory”). In addition, Nippon Kayaku received exclusive rights to APAZIQUONE for the treatment of non-muscle invasive bladder cancer in Asia (other than North and South Korea), including Japan and China. Nippon Kayaku will conduct APAZIQUONE clinical trials in the Nippon Kayaku Territory pursuant to a development plan. Further, Nippon Kayaku will be responsible for all expenses relating to the development and commercialization of APAZIQUONE in the Nippon Kayaku Territory.

Pursuant to the terms of this agreement, Nippon Kayaku paid us an upfront fee of $15.0 million (which we have amortized through revenue within “license fees and service revenue” in full as of December 31, 2013). Nippon Kayaku is also obligated to make additional payments to us based on the achievement of certain development, regulatory and commercialization milestones. Under the terms of the agreement, we are entitled to payment of $10 million and $126 million upon achievement of certain regulatory and commercialization milestones, respectively. Also, Nippon Kayaku has agreed to pay us royalties based on a percentage of net sales of the subject products in the defined territory in the mid-teen digits.

Our license agreement with Nippon Kayaku provides for payments to us upon the achievement of development milestones, such as the completion of clinical trials or regulatory submissions, approvals by health authorities, and commercial launches of drug candidates. Given the challenges inherent in developing and obtaining approval for drug products and in achieving commercial launches, there was substantial uncertainty whether any such milestones would be achieved at the time of execution of such license agreement. Such revenue will only be recognized if/when such milestones are achieved.

(ix) BELEODAQ: Licensing and Collaboration Agreement with TopoTarget

In February 2010, we entered into a licensing and collaboration agreement with TopoTarget A/S (now Onxeo DK) (“TopoTarget”), as amended in October 2013, for the development and commercialization of BELEODAQ. The agreement provides that we have the exclusive right to manufacture, develop, and commercialize BELEODAQ in North America and India, with an option for China. Pursuant to the terms of this agreement, we paid TopoTarget an upfront fee of $30.0 million in 2010.

Under continuing terms, all development, including studies, will be conducted under a joint development plan, which we will fund 70% of such costs, and TopoTarget will fund 30%. We have final decision-making authority for all developmental activities in North America and India (and China upon exercise of its option). TopoTarget has final decision-making authority for all developmental activities in all other jurisdictions.

In February 2014, upon FDA acceptance of our new drug application, we issued 1.0 million shares of our common stock, and made a $10.0 million milestone payment to TopoTarget. The aggregate payout value of this first milestone at achievement was $17.8 million, and is recognized within “research and development” of the accompanying Condensed Consolidated Statement of Operations for the nine months ended September 30, 2014.

In July 2014, we received approval from the FDA for BELEODAQ’s use for injection for the treatment of PTCL, and as a result, we are obligated to TopoTarget for a second milestone payment of $25.0 million in November 2014. As of September 30, 2014, this amount is included within “accounts payable and other accrued liabilities” on the Condensed Consolidated Balance Sheets. Other potential milestone payments due upon BELEODAQ regulatory achievements and sales thresholds (aggregating $278.0 million) are not included within “total liabilities” in our accompanying Condensed Consolidated Balance Sheets.

We will pay TopoTarget future royalties in the mid-teen digits based on net sales of BELEODAQ in the defined territory. The agreement will continue until the expiration of the last royalty payment period in the last country in the defined territory with certain provisions surviving, unless earlier terminated in accordance with its terms.

(x) SPI-2012: Co-Development and Commercialization Agreement with Hanmi Pharmaceutical Company

In January 2012, we entered into a co-development and commercialization agreement with Hanmi Pharmaceutical Company, (“Hanmi”), for SPI-2012, formerly known as “LAPS-GCSF”, a drug for the treatment of chemotherapy induced neutropenia based on Hanmi’s proprietary LAPSCOVERY™ Technology, at which time we paid Hanmi $1.0 million. Under the terms of the agreement, as amended in March 2014, we will share the expenses of this study, and we continue to have primary responsibility for the SPI-2012 development plan. If SPI-2012 is ultimately commercialized by us, we will have worldwide rights, except for Korea, China, and Japan upon our payment of agreed-upon fees to Hanmi. We will also be responsible for milestone payments related to SPI-2012 regulatory approvals and sales thresholds.

(c) Service Agreements

In connection with the research and development of our drug products, we have entered into contracts with numerous third party service providers, such as radio-pharmacies, distributors, clinical trial centers, clinical research organizations, data monitoring centers, and with drug formulation, development and testing laboratories. The financial terms of these agreements are varied and generally obligate us to pay in stages, depending on achievement of certain events specified in the agreements, such as contract execution, reservation of service or production capacity, actual performance of service, or the successful accrual and dosing of patients.

At each period end, we accrue for all services received, with such accruals based on factors such as estimates of work performed, patient enrollment, completion of patient studies and other events. Should we decide to discontinue and/or slow-down the work on any project, the associated costs for those projects would be limited to the extent of the work completed. Generally, we are able to terminate these contracts due to the discontinuance of the related project(s) and thus avoid paying for the services that have not yet been rendered.

(d) Supply Agreements

We have entered into certain supply agreements, or have issued purchase orders, which require us to make minimum purchases from vendors for the manufacture of our products. These commitments do not exceed our planned commercial requirements (except for certain amounts accrued for within the accompanying Condensed Consolidated Financial Statements), and the contracted prices do not exceed their fair market value.

(e) Employment Agreement

We have entered into an employment agreement with our Chief Executive Officer under which cash compensation and benefits would become payable in the event of termination by us for any reason other than cause, his resignation for good reason, or upon a change in control of our Company.

(f) Deferred Compensation Plan

The Spectrum Pharmaceuticals, Inc. Deferred Compensation Plan (the “DC Plan”) is administered by the Compensation Committee of our Board of Directors and is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended.

The DC Plan is maintained to provide deferred compensation benefits for a select group of our employees (the “DC Participants”). Under the DC Plan, we provide the DC Participants with the opportunity to make annual elections to defer up to a specified amount or percentage of their eligible cash compensation, and we have the option to make discretionary contributions. At September 30, 2014 and December 31, 2013, DC Plan deferrals and contributions totaling $4.5 million and $3.9 million, respectively, are included within “other long-term liabilities” in the accompanying Condensed Consolidated Balance Sheets.

(g) Litigation

We are involved from time-to-time with various legal matters arising in the ordinary course of business. These claims and legal proceedings are of a nature we believe are normal and incidental to a pharmaceutical business, and may include product liability, intellectual property, employment matters, and other general claims.

We make provisions for liabilities when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Such provisions are assessed at least quarterly and adjusted to reflect the impact of any settlement negotiations, judicial and administrative rulings, advice of legal counsel, and other information and events pertaining to a particular case. Litigation is inherently unpredictable. Although the ultimate resolution of these various matters cannot be determined at this time, we do not believe that such matters, individually or in the aggregate, will have a material adverse effect on our consolidated results of operations, cash flows, or financial condition.

We are presently responding to Abbreviated New Drug Applications (“ANDAs”) filed by companies seeking to launch generic forms of FUSILEV and FOLOTYN, respectively, and to certain shareholder suits that purportedly stem from our March 12, 2013 press release, in which we announced anticipated changes in customer ordering patterns of FUSILEV. These complaints allege that, as a result of the March 12, 2013 press release, our stock price declined.

FUSILEV ANDA Litigation

On January 20, 2012, March 2, 2012, and June 18, 2014, respectively, we filed suit against Sandoz Inc. and Innopharma Inc., and Ben Venue Laboratories, Inc., respectively, following Paragraph IV certifications in connection with their filing separate ANDAs, to manufacture a generic version of FUSILEV. We filed the lawsuits in the U.S. District Court for the Districts of Nevada and Delaware seeking to enjoin the approval of their ANDAs plus recovery of our litigation fees and costs incurred in such matters. On December 9, 2013, three Mylan entities collaborating with Innopharma were joined to Innopharma case. A trial date of January 12, 2015 has been set in the Sandoz case in the U.S. District Court for the District of Nevada and the other trial dates in the FUSILEV litigation have not been set yet. While we believe our patent rights are strong, the ultimate outcome of these cases is uncertain.

FOLOTYN ANDA Litigation

On June 19, 2014, we filed a lawsuit against five parties resulting from Paragraph IV certifications in connection with four separate ANDAs to manufacture a generic version of FOLOTYN: (1) Teva Pharmaceuticals USA, Inc., (2) Sandoz Inc., (3) Fresenius Kabi USA, LLC, and (4) Dr. Reddy’s Laboratories, Ltd., and Dr. Reddy’s Laboratories, Inc. We filed the lawsuit in the U.S. District Court for the District of Delaware seeking to enjoin the approval of their ANDAs plus recovery of our litigation fees and costs. A trial date of September 12, 2016 has been set in the FOLOTYN lawsuit in the U.S. District Court for the District of Delaware. While we believe our patent rights are strong, the ultimate outcome of such action is uncertain.

Shareholder Litigation

John Perry v. Spectrum Pharmaceuticals, Inc. et al. (Filed March 14, 2013 in United States District Court, District of Nevada; Case Number 2:2013-cv-00433-LDG-CWH. This putative consolidated class action raises substantially identical claims and allegations against defendants Spectrum Pharmaceuticals, Inc., Dr. Rajesh C. Shrotriya, Brett L. Scott, and Joseph Kenneth Keller. The alleged class period is August 8, 2012 to March 12, 2013. The lawsuits allege a violation of Section 10(b) of the Securities Exchange Act of 1934 against all defendants and control person liability, as a violation of Section 20(b) of the Securities Exchange Act of 1934, against the individual defendants. The claims purportedly stem from the Company’s March 12, 2013 press release, in which it announced that it anticipated a change in ordering patterns of FUSILEV. The complaints allege that, as a result of the March 12, 2013 press release, the Company’s stock price declined. The complaints further allege that during the putative class period certain defendants made misleadingly optimistic statements about FUSILEV sales, which inflated the trading price of Company stock. The lawsuits seek relief in the form of monetary damages, costs and fees, and any other equitable or injunctive relief that the court deems appropriate. On March 21, 2014, the Court entered an order appointing Arkansas Teacher Retirement System as lead plaintiff. On May 20, 2014, Arkansas Teacher Retirement System filed a consolidated amended class action complaint. On July 18, 2014, we filed a motion to dismiss the consolidated amended class action complaint. On September 19, 2014, Arkansas Teacher Retirement System filed an opposition to our motion to dismiss. On October 17, 2014, we filed a reply in support of our motion to dismiss.

Timothy Fik v. Rajesh C. Shrotriya, et al. (Filed April 11, 2013 in United States District Court, District of Nevada; Case Number 2:2013-cv-00624-JCM-CWH); Christopher J. Watkins v. Rajesh C. Shrotriya, et al. (Filed April 22, 2013 in United States District Court, District of Nevada; Case Number 2:2013-cv-00684-JCM-VCF); and Stefan Muenchhagen v. Rajesh C. Shrotriya, et al. (Filed May 28, 2013 in United States District Court, District of Nevada; Case Number 2:2013-cv-00942-APG-PAL). These derivative complaints are brought by the respective purported shareholders on behalf of nominal plaintiff Spectrum against certain current and former directors and officers. The complaints generally allege breaches of fiduciary based on conduct relating to the events alleged in the consolidated Perry action. The complaints seek compensatory damages, corporate governance reforms, restitution and disgorgement of defendants’ alleg