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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2016	Nov. 03, 2016
Document And Entity Information
Entity Registrant Name	Retrophin, Inc.
Entity Central Index Key	0001438533
Trading Symbol	rtrx
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		37,732,329
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q3

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 23,895	$ 37,805
Marketable securities	250,408	191,799
Accounts receivable, net	14,955	12,458
Inventory, net	3,253	2,536
Prepaid expenses and other current assets	3,553	2,378
Prepaid taxes	0	8,107
Note receivable, current	46,526	46,849
Total current assets	342,590	301,932
Property and equipment, net	382	428
Other assets	1,974	1,859
Prepaid tax assets	3,240	0
Intangible assets, net	183,298	161,536
Goodwill	936	936
Note receivable, long term	0	45,573
Total assets	532,420	512,264
Current liabilities:
Accounts payable	3,066	7,639
Accrued expenses	40,376	23,820
Guaranteed minimum royalty	2,000	2,000
Other current liabilities	1,143	958
Taxes payable	3,879	0
Business combination-related contingent consideration	6,570	13,754
Derivative financial instruments, warrants	28,960	38,810
Total current liabilities	85,994	86,981
Convertible debt	44,257	43,766
Other non-current liabilities	2,461	3,066
Guaranteed minimum royalty, less current portion	8,281	8,885
Business combination-related contingent consideration, less current portion	75,370	45,267
Deferred income tax liability, net	8,462	24,328
Total liabilities	224,825	212,293
Stockholders' Equity:
Preferred stock $0.001 par value; 20,000,000 shares authorized; 0 issued and outstanding as of September 30, 2016 and December 31, 2015	0	0
Common stock $0.0001 par value; 100,000,000 shares authorized; 37,703,996 and 36,465,853 issued and outstanding as of September 30, 2016 and December 31, 2015, respectively	4	4
Additional paid-in capital	412,348	365,802
Accumulated deficit	(104,453)	(65,153)
Accumulated other comprehensive loss	(304)	(682)
Total stockholders' equity	307,595	299,971
Total liabilities and stockholders' equity	$ 532,420	$ 512,264

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	20,000,000	20,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock shares authorized (in shares)	100,000,000	100,000,000
Common stock shares issued (in shares)	37,703,996	36,465,853
Common stock shares outstanding (in shares)	37,703,996	36,465,853

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Statement [Abstract]
Net product sales	$ 33,945	$ 28,005	$ 96,265	$ 69,444
Operating expenses:
Cost of goods sold	1,573	513	3,351	1,424
Research and development	18,428	14,064	50,775	34,974
Selling, general and administrative	23,848	22,308	66,178	56,856
Legal fee settlement	5,212	0	5,212	0
Change in fair value of contingent consideration	(5,256)	(6,906)	(10,741)	(7,026)
Impairment of intangible assets	0	4,710	0	4,710
Total operating expenses	54,317	48,501	136,257	104,990
Operating loss	(20,372)	(20,496)	(39,992)	(35,546)
Other income (expenses), net:
Other income (expenses), net	151	(314)	156	35
Interest expense, net	(299)	(695)	(609)	(7,415)
Debt early payment penalty	0	0	0	(2,250)
Finance expense	0	0	0	(600)
Change in fair value of derivative instruments	(10,126)	29,991	(4,849)	(36,180)
Gain on sale of assets	0	140,004	0	140,004
Loss on extinguishment of debt	0	(4,151)	0	(4,151)
Litigation settlement gain	0	0	0	15,500
Bargain purchase gain	0	0	0	49,063
Total other income (loss), net	(10,274)	164,835	(5,302)	154,006
Income (loss) before provision for income taxes	(30,646)	144,339	(45,294)	118,460
Income tax benefit (expense)	(6,467)	(38,761)	5,994	1,246
Net income (loss)	$ (37,113)	$ 105,578	$ (39,300)	$ 119,706
Net earnings (loss) per common share, basic (in dollars per share)	$ (1.00)	$ 2.95	$ (1.07)	$ 3.67
Net earnings (loss) per common share, diluted (in dollars per share)	$ (1.00)	$ 1.78	$ (1.07)	$ 3.30
Weighted average common shares outstanding, basic (in shares)	36,980,356	35,741,877	36,728,911	32,650,408
Weighted average common shares outstanding, diluted (in shares)	36,980,356	42,752,859	36,728,911	36,800,536
Comprehensive income (loss):
Net income (loss)	$ (37,113)	$ 105,578	$ (39,300)	$ 119,706
Foreign currency translation	17	14	19	8
Unrealized gain (loss) on marketable securities	308	(876)	(397)	(4,395)
Comprehensive income (loss)	$ (36,788)	$ 104,716	$ (39,678)	$ 115,319

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash Flows From Operating Activities:
Net income (loss)	$ (39,300)	$ 119,706
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	11,953	9,417
Realized gain (loss) on marketable securities	(11)	293
Gain upon divestiture of Pediatric Priority Review Voucher	0	(140,004)
Gain upon divestiture of assets to Turing Pharmaceuticals	0	(914)
Deferred income tax benefit	(10,999)	(11,791)
Interest income from notes receivable	(1,605)	0
Legal fee settlement	5,212	0
Non-cash interest expense	1,551	1,818
Amortization of premiums on marketable securities	853	0
Amortization of debt discount and deferred financing costs	491	1,175
Lease liability	0	32
Loss on early retirement of debt	0	4,151
Impairment of intangible assets	0	4,710
Loss on disposal of fixed assets	0	112
Legal accrual reversal	(2,967)	0
Bargain purchase gain	0	(49,063)
Share based compensation	22,034	18,748
Derivative financial instruments, warrants, issued, recorded in interest expense	0	1,050
Change in estimated fair value of liability classified warrants	4,849	36,180
Change in estimated fair value of contingent consideration	10,741	7,026
Payments related to change in fair value of contingent consideration	(772)	(203)
Changes in operating assets and liabilities, net of business acquisitions:
Accounts receivable	(2,486)	(5,540)
Inventory	(712)	(1,284)
Prepaid expenses and other current assets	(822)	(1,912)
Accounts payable and accrued expenses	3,278	(1,172)
Income taxes payable	3,879	9,628
Net cash provided by operating activities	5,167	2,163
Cash Flows From Investing Activities:
Purchase of fixed assets	(61)	(35)
Cash paid for intangible assets	(7,632)	(5,271)
Proceeds from the sale/maturity of marketable securities	92,609	4,977
Purchase of marketable securities	(152,016)	(94,793)
Proceeds from maturity of note receivable	47,500	0
Security deposits	(115)	0
Cash received upon divestiture of asset	0	148,411
Cash paid upon acquisition, net of cash acquired	(500)	(33,430)
Net cash provided by (used in) investing activities	(20,215)	19,859
Cash Flows From Financing Activities:
Payment of guaranteed minimum royalty	(1,500)	(1,500)
Proceeds from exercise of warrants	5,998	4,372
Payment of other liability	(750)	(1,000)
Proceeds from exercise of stock options	2,225	5,237
Excess benefit related to stock compensation	(439)	834
Repayment of credit facility	0	(45,000)
Proceeds received from issuance of common stock	0	149,454
Financing costs from issuance of common stock	0	(9,500)
Net cash provided by financing activities	1,195	100,370
Effect of exchange rate changes on cash	(57)	0
Net change in cash	(13,910)	122,392
Cash, beginning of year	37,805	18,204
Cash, end of period	23,895	140,596
Manchester
Cash Flows From Financing Activities:
Payment of acquisition-related contingent consideration	(3,257)	(2,220)
Asklepion
Cash Flows From Financing Activities:
Payment of acquisition-related contingent consideration	$ (1,082)	$ (307)

DESCRIPTION OF BUSINESS

9 Months Ended

Sep. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

DESCRIPTION OF BUSINESS

Organization and Description of Business

In this Quarterly Report on Form 10-Q, unless the context requires otherwise, the terms “we”, “our”, “us”, “Retrophin” and the “Company” refer to Retrophin, Inc., a Delaware corporation, as well as our direct and indirect subsidiaries. We are a fully integrated biopharmaceutical company with approximately 135 employees headquartered in San Diego, California dedicated to delivering life-changing therapies to people living with rare diseases who have few, if any, treatment options. Our approach centers on our pipeline, featuring clinical-stage assets and pre-clinical discovery programs targeting rare diseases with significant unmet medical needs. Our research and development efforts are supported by revenues from the Company's marketed products, Chenodal^®, Cholbam^®and Thiola^®. In addition we regularly evaluate and, where appropriate, act on opportunities to expand our product pipeline through licenses and acquisitions of products in areas that will serve patients with serious, catastrophic or rare diseases and that we believe offer attractive growth characteristics.

Products on the Market:

•

Chenodal^® (chenodeoxycholic acid) is approved in the United States for the treatment of patients suffering from gallstones in whom surgery poses an unacceptable health risk due to disease or advanced age. Chenodal has also been the standard of care for cerebrotendinous xanthomatosis (“CTX”) patients for more than three decades and the Company is currently pursuing adding this indication to the label.


•	Cholbam^® (cholic acid) is approved in the United States for the treatment of bile acid synthesis disorders due to single enzyme defects and is further indicated for adjunctive treatment of patients with peroxisomal disorders.


•	Thiola^® (tiopronin) is approved in the United States for the prevention of cystine (kidney) stone formation in patients with homozygous cystinuria.

Product Candidates:

Sparsentan, also known as RE-021, is an investigational therapeutic agent which acts as both a potent angiotensin receptor blocker (“ARB”), as well as a selective endothelin receptor antagonist (“ERA”), with in vitro selectivity toward endothelin receptor type A. We have secured a license to sparsentan from Ligand Pharmaceuticals, Inc. and Bristol-Myers Squibb Company (who referred to it as DARA). We are developing sparsentan as a treatment for focal segmental glomerulosclerosis ("FSGS"), which is a leading cause of end-stage renal disease and Nephrotic Syndrome (“NS”). There are no U.S. Food and Drug Administration ("FDA") approved pharmacological treatments for FSGS and the off-label armamentarium is limited to ACE/ARBs, steroids, and immunosuppressant agents, which are effective in only a subset of patients. In the third quarter of 2016, we announced positive top-line data from the Phase 2 DUET study of sparsentan for the treatment of FSGS. We will work with the FDA in the near future to determine the most expeditious path forward to gain approval for sparsentan. Sparsentan was granted orphan drug designation in the U.S. and EU in January 2015 and November 2015, respectively.

We are developing RE-024, a novel small molecule, as a potential treatment for pantothenate kinase-associated neurodegeneration ("PKAN"). PKAN is a genetic neurodegenerative disorder that is typically diagnosed in the first decade of life. Consequences of PKAN include dystonia, dysarthria, rigidity, retinal degeneration, and severe digestive problems. There are currently no viable treatment options for patients with PKAN. RE-024 is a phosphopantothenate prodrug therapy that aims to restore levels of this key substrate in PKAN patients. Certain international health regulators have approved the initiation of dosing RE-024 in PKAN patients under physician-initiated studies in accordance with local regulations in their respective countries. The Company filed a Investigational New Drug application ("U.S. IND") for RE-024 with the FDA in the first quarter of 2015 to support the commencement of a Company-sponsored Phase 1 study, which was successfully completed during 2015. RE-024 was granted orphan drug designation by the FDA in May 2015 and was granted fast track designation by the FDA in June 2015. On February 24, 2016, we announced RE-024 was granted orphan drug designation from the European Commission. The Company continues discussions with the FDA and the European Medicines Agency ("EMA") regarding the initiation of a potential registration-enabling efficacy trial in PKAN patients.

L-UDCA is a liquid formulation of ursodeoxycholic acid being developed for the treatment of a rare liver disease called primary biliary cholangitis ("PBC"). Retrophin expects to file a New Drug Application with the FDA in 2017 and, if approved, plans to make L-UDCA commercially available to the subset of PBC patients who have difficulty swallowing. There are no liquid formulations of ursodeoxycholic acid currently approved by the FDA.

RE-034 is a synthetic hormone analog of the first 24 amino acids of the 39 amino acids contained in adrenocorticotropic hormone ("ACTH") incorporated into a novel formulation developed by the Company. RE-034 exhibits similar physiological actions as endogenous ACTH by binding to all five melanocortin receptors (pan-MCR), resulting in its anti-inflammatory and immunomodulatory effects. Retrophin has successfully manufactured RE-034 at proof-of-concept scale using a novel formulation process that allows modulation of the release of the active ingredient from the site of administration. The Company is exploring strategic options for development of RE-034, including the evaluation of external partnership and out-licensing opportunities.

Preclinical:

NGLY1

The Company entered into a research collaboration with the Grace Science Foundation and the Warren Family Research Center for Drug Discovery and Development at the University of Notre Dame for the development of a novel therapeutic for patients with NGLY1 deficiency, a rare genetic disorder. NGLY1 deficiency is believed to be caused by a deficiency in an enzyme called N-glycanase-1, which is encoded by the gene NGLY1. The condition is characterized by a variety of symptoms, including global developmental delay, movement disorder, seizures, and ocular abnormalities. Under this collaboration, the Grace Science Foundation is providing support and funding to Retrophin to enable discovery efforts that aim to validate and address a new molecular target that may be relevant to NGLY1 deficiency. The Warren Family Research Center for Drug Discovery and Development at the University of Notre Dame is providing funding and in-kind research support to help Retrophin advance this program.

BASIS OF PRESENTATION	9 Months Ended
BASIS OF PRESENTATION	Sep. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 (the “2015 10-K”) filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2016, and amended on March 2, 2016. The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information, the instructions for Form 10-Q and the rules and regulations of the SEC. Accordingly, since they are interim statements, the accompanying condensed consolidated financial statements do not include all of the information and notes required by GAAP for annual financial statements, but reflect all adjustments consisting of normal, recurring adjustments, that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of the results that may be expected for any future periods. The December 31, 2015 balance sheet information was derived from the audited financial statements as of that date. Certain reclassifications have been made to the prior period consolidated financial statements to conform to the current period presentation.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Sep. 30, 2016
Accounting Policies [Abstract]
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A summary of the significant accounting policies applied in the preparation of the accompanying condensed consolidated financial statements follows: Principles of Consolidation The unaudited condensed consolidated financial statements represent the consolidation of the accounts of the Company and its subsidiaries in conformity with GAAP. All intercompany accounts and transactions have been eliminated in consolidation. Adoption of New Accounting Standards In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. This ASU amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of as a deferred charge. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2015. The Company retroactively adopted the new guidance in 2016. The adoption of the new guidance did not have a material impact on the Company’s financial statements. See Note 10 for further discussion. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred taxes. This ASU requires that all deferred tax assets and liabilities, along with any related valuation allowances, be classified as noncurrent on the balance sheet. However, an entity shall not offset deferred tax liabilities and assets attributable to different tax jurisdictions. This ASU is effective for annual and interim reporting periods ending after December 15, 2016. Early adoption is permitted, and the new guidance may be applied either prospectively or retrospectively. We adopted this guidance prospectively as of December 31, 2015. Therefore, prior periods have not been adjusted to reflect this adoption. This change in accounting principle did not change our results of operations, cash flows or stockholders’ equity. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial position or results of operations upon adoption. In May 2014, the FASB issued ASU No. 2014-9, Revenue from Contracts with Customers. Under the new standard, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration for which the entity expects to be entitled for that specific good or service. Entities may use a full retrospective approach or report the cumulative effect as of the date of adoption. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of this ASU is permitted but not before the original effective date (annual periods beginning after December 15, 2016). We are currently evaluating the impact, if any, the adoption of this standard will have on our consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. This standard amends Topic 330, Inventory, which currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. When this standard is adopted, an entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The adoption of this standard will not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact, if any, the adoption of this standard will have on our consolidated financial statements. In April 2016, the FASB issued ASU No. 2016-09, Compensation —Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Specifically, the ASU requires all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) to be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity also should recognize excess tax benefits, and assess the need for a valuation allowance, regardless of whether the benefit reduces taxes payable in the current period. That is, off balance sheet accounting for net operating losses stemming from excess tax benefits would no longer be required and instead such net operating losses would be recognized when they arise. Existing net operating losses that are currently tracked off balance sheet would be recognized, net of a valuation allowance if required, through an adjustment to opening retained earnings in the period of adoption. Entities will no longer need to maintain and track an “APIC pool.” The ASU also requires excess tax benefits to be classified along with other income tax cash flows as an operating activity in the statement of cash flows. In addition, the ASU elevates the statutory tax withholding threshold to qualify for equity classification up to the maximum statutory tax rates in the applicable jurisdiction(s). The ASU also clarifies that cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity. The ASU provides an optional accounting policy election (with limited exceptions), to be applied on an entity-wide basis, to either estimate the number of awards that are expected to vest (consistent with GAAP) or account for forfeitures when they occur. The ASU is effective for public business entities for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Certain detailed transition provisions apply if an entity elects to early adopt. We are currently evaluating the impact, if any, the adoption of this standard will have on our consolidated financial statements. In June 2016, the FASB issued No. 2016-13, Financial Instruments —Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Topic 326 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. This Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company currently holds available for sale debt securities that are affected by this ASU. This ASU is not expected to have a material impact on the Company’s financial statements. In October 2016, the FASB issued No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The new guidance changes the accounting for income tax effects of intra-entity transfers of assets other than inventory. Under the new guidance, the selling (transferring) entity is required to recognize a current tax expense or benefit upon transfer of the asset. Similarly, the purchasing (receiving) entity is required to recognize a deferred tax asset or deferred tax liability, as well as the related deferred tax benefit or expense, upon receipt of the asset. The new guidance will be effective for the Company starting in fiscal year 2018 on a modified retrospective basis, and early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements as well as whether to adopt the new guidance early.

INCOME TAXES

9 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

INCOME TAXES

The following table summarizes our effective tax rate and income tax (expense) benefit for the three and nine months ended September 30, 2016 and 2015 (in thousands except for percentages):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Effective tax rate	(21.1	)%	26.9	%	13.2	%	(1.1	)%
Income tax (expense) benefit	(6,467	)	(38,761	)	5,994		1,246

For the three and nine months ended September 30, 2016, we recognized an income tax expense of $6.5 million and an income tax benefit $6.0 million, respectively, representing an effective tax rate of (21.1)% and 13.2%, respectively. Under GAAP, quarterly effective tax rates may vary significantly depending on the actual operating results in the various tax jurisdictions, and significant transactions, as well as changes in the valuation allowance related to the expected recovery of deferred tax assets.

The difference between the expected statutory federal tax benefit of 35% and the (21.1)% effective tax expense for the three months ended September 30, 2016, was primarily attributable to the increase in valuation allowance against our deferred tax assets, partially offset by the tax benefit of prior year return to provision true-ups.

The difference between the expected statutory federal tax benefit of 35% and the 13.2% effective tax benefit for the nine months ended September 30, 2016, was primarily attributable to the increase in valuation allowance against our deferred tax assets.

For the three and nine months ended September 30, 2015, we recognized income tax expense of $38.8 million and an income tax benefit of $1.2 million, respectively, representing an effective tax rate of 26.9% and (1.1)%, respectively. The difference between the expected statutory federal tax expense of 35% and the (1.1)% effective tax benefit for the nine months ended September 30, 2015, was primarily attributable to the current and deferred tax expense recorded on the sale of our Priority Review Voucher, offset by the partial release of the US federal valuation allowance.

At September 30, 2016, we had gross unrecognized tax benefits of $1.5 million compared to $3.3 million at December 31, 2015, representing a net decrease of $1.8 million during the nine months ended September 30, 2016. If recognized, none of unrecognized tax benefits would affect the Company’s effective tax rate. We did not recognize any interest and penalties related to unrecognized tax benefits during the nine months ended September 30, 2016.

We are currently under income tax audit examination for our United States federal income tax return for 2014. At this time, we do not anticipate that the conclusion of the audit will have a material effect on the financial statements.

BUSINESS COMBINATION

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

BUSINESS COMBINATION

Acquisition of Liquid Ursodeoxycholic Acid (L-UDCA)

On June 20, 2016, the Company announced the signing of a definitive agreement to purchase the rights, titles, and ownership of L-UDCA from Asklepion. Retrophin intends to file a New Drug Application ("NDA") with the FDA for L-UDCA for the treatment of PBC in 2017.

The acquisition was accounted for under the purchase method of accounting in accordance with Accounting Standard Codification ("ASC") 805. The fair value of assets acquired and liabilities assumed was based upon a valuation and the Company’s estimates. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired product rights for L-UDCA, licenses, trade names and developed technologies, present value and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Management's valuation is preliminary. Once the valuation is complete, the Company will make any necessary adjustments.

The purchase included $25.5 million for an intangible asset with a definite life related to product rights for the U.S. The useful life related to the acquired product rights is expected to be approximately 17 years once the NDA is approved by the FDA.

The contingent consideration of $25.0 million (present value) recorded during the period ended June 30, 2016, is related to an agreement to pay an additional cash amount in the form of milestones and sales royalties through 2035. The accrued contingent consideration was recorded as a liability at acquisition-date fair value using the income approach with an assumed discount rate of 12.0% over the applicable term.

The purchase price allocation of $25.5 million as of the acquisition completion date of June 16, 2016 is as follows (in thousands):



Cash paid upon consummation	$	500
Present value of contingent consideration	25,000
Total purchase price	$	25,500

Fair Value of Assets Acquired and Liabilities Assumed
Acquired product rights: L-UDCA (intangible asset)	$	25,500
Total purchase price	$	25,500

Unaudited pro forma information for the transaction is not presented, because the effects of such transaction are considered immaterial to the Company.

Acquisition of Cholic Acid

On January 12, 2015, the Company announced the signing of a definitive agreement under which it acquired the exclusive right to purchase from Asklepion, all worldwide rights, titles, and ownership of Cholbam (cholic acid) for the treatment of bile acid synthesis defects, if approved by the FDA. Under the terms of the agreement, Retrophin paid Asklepion an upfront payment of $5.0 million and agreed to pay milestones based on FDA approval and net product sales, plus tiered royalties on future net sales of Cholbam.

On March 18, 2015, the Company announced that the FDA had approved Cholbam capsules, the first FDA approved treatment for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects, and for patients with peroxisomal disorders (including Zellweger spectrum disorders). As a result of the approval, Retrophin exercised its right to purchase from Asklepion all worldwide rights, titles, and ownership of Cholbam and related assets. The FDA also granted Asklepion a Pediatric Priority Review Voucher ("PRV"), awarded to encourage development of new drugs and biologics for the prevention and treatment of rare pediatric diseases. A Pediatric PRV is transferable and provides the bearer with FDA priority review classification for a new drug application. The Pediatric PRV was transferred to Retrophin under the original terms of the agreement with Asklepion.

On March 31, 2015, the Company completed its acquisition from Asklepion of all worldwide rights, titles and ownership of Cholbam, including all related contracts, data assets, intellectual property, regulatory assets and the Pediatric PRV, in exchange for a cash payment of $28.4 million, in addition to approximately 661,279 shares of the Company’s common stock (initially valued at $9 million at the time of the definitive agreement with Asklepion, and $15.8 million at the acquisition completion date). The Company is also required to pay contingent consideration consisting of milestones and tiered royalties with a present value of $39.1 million.

The original asset value of the Pediatric PRV was recognized at $96.3 million. In this valuation process, we considered various factors which included data from recent sales of similar vouchers. The consideration paid to Asklepion did not value the Pediatric PRV because the issuance of a Pediatric PRV is extremely rare. Therefore when the FDA granted the Pediatric PRV with the Cholbam approval, a bargain purchase gain resulted.

The acquisition was accounted for under the purchase method of accounting in accordance with ASC 805. The fair value of assets acquired and liabilities assumed was based upon a valuation and the Company’s estimates. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired product rights to Cholbam, the Pediatric PRV, trade names and developed technologies, present value and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

The purchase included $83.2 million of intangible assets with definite lives related to product rights with values of $75.9 million for the U.S. and $7.3 million for the international rights. The useful lives related to the acquired product rights are expected to be approximately 10 years.

The contingent consideration of $39.1 million recorded during the year ended December 31, 2015 was related to an agreement to pay an additional cash amount based on the product performance through 2025. The accrued contingent consideration was recorded as a liability at acquisition-date fair value using the income approach with assumed discount rates of 19.0% over the applicable term. The undiscounted amount the Company could pay under the contingent consideration agreement as of December 31, 2015 was up to $16.3 million.

Service fees with a net present value of $2.9 million were recorded during the year ended December 31, 2015. The net present value is based upon $4.0 million in total payments over a four year period starting as of the acquisition date.

As part of the business combination the Company recorded a deferred tax liability of $39.9 million. The deferred tax liability was derived from the difference in the Company's book basis and tax basis in the assets acquired of $88.5 million. The tax rate utilized was 45.4%.

The purchase price allocation of $91.3 million as of the acquisition completion date of March 31, 2015 was as follows (in thousands):



Cash paid upon consummation	$	33,430
Present value of contingent consideration and service fees	42,010
Fair Value of 661,279 shares issued to Asklepion	15,844
Total Purchase Price	$	91,284

Fair Value of Assets Acquired and Liabilities Assumed
Acquired product rights: Cholbam (Intangible Asset)	$	83,200
Pediatric Priority Review Voucher	96,250
Inventory	777
Deferred tax liability	(39,880		)
Total Allocation of Purchase Price	$	140,347
Bargain Purchase Gain	(49,063		)
Total Purchase Price	$	91,284

- 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).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1497-128463

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 805
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1490-128463

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Section 50
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 805
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 805
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
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-URI http://asc.fasb.org/extlink&oid=56956515&loc=d3e1524-128463

Reference 10: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-URI http://asc.fasb.org/extlink&oid=35744584&loc=d3e6996-128479

+ Details

MARKETABLE SECURITIES

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

MARKETABLE SECURITIES

The Company's marketable securities as of September 30, 2016 and December 31, 2015 were comprised of available-for-sale marketable securities which are carried at fair value, with the unrealized gains and losses reported in accumulated other comprehensive income. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income or expense. Interest and dividends on securities classified as available-for-sale are included in interest income. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Such amortization and accretion is included in interest income. During the nine months ended September 30, 2016, investment activity for the Company included $92.6 million in maturities and purchases of $152.0 million, all relating to debt based marketable securities.

Marketable securities consisted of the following (in thousands):



	September 30, 2016		December 31, 2015
Marketable other than equity securities:
Commercial paper	$	37,251	$	31,864
Corporate debt securities	173,669		125,547
Securities of government sponsored entities	39,488		34,388
Total Marketable Securities:	$	250,408	$	191,799

The following is a summary of short-term marketable securities classified as available-for-sale as of September 30, 2016 (in thousands):



	Remaining Contractual Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses			Aggregate Estimated Fair Value
Marketable other than equity securities:
Commercial paper	Less than 1	$	37,302	$	—	$	(51	)	$	37,251
Corporate debt securities	Less than 1	96,929		18		(57		)	96,890
Securities of government-sponsored entities	Less than 1	9,500		—		—			9,500
Total maturity less than 1 year		143,731		18		(108		)	143,641
Corporate debt securities	1 to 2	76,909		24		(154		)	76,779
Securities of government-sponsored entities	1 to 2	30,012		—		(24		)	29,988
Total maturity 1 to 2 years		106,921		24		(178		)	106,767
Total available-for-sale securities		$	250,652	$	42	$	(286	)	$	250,408

The following is a summary of short-term marketable securities classified as available-for-sale as of December 31, 2015 (in thousands):



	Remaining Contractual Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses			Aggregate Estimated Fair Value
Marketable Other than Equity Securities:
Commercial paper	Less than 1	$	31,899	$	6	$	(41	)	$	31,864
Corporate debt securities	Less than 1	69,859		—		(164		)	69,695
Total maturity less than 1 year		101,758		6		(205		)	101,559
Corporate debt securities	1 to 2	56,162		—		(310		)	55,852
Securities of government-sponsored entities	1 to 2	34,522		2		(136		)	34,388
Total maturity 1 to 2 years		90,684		2		(446		)	90,240
Total available-for-sale securities		$	192,442	$	8	$	(651	)	$	191,799

The primary objective of the Company’s investment portfolio is to enhance overall returns while preserving capital and liquidity. The Company’s investment policy limits interest-bearing security investments to certain types of instruments issued by institutions with primarily investment grade credit ratings and places restrictions on maturities and concentration by asset class and issuer.

The Company reviews the available-for-sale investments for other-than-temporary declines in fair value below cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below the cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security, and the intent to sell, or whether the Company will more likely than not be required to sell the security before recovery of its amortized cost basis. The assessment of whether a security is other-than-temporarily impaired could change in the future due to new developments or changes in assumptions related to any particular security. As of September 30, 2016 and December 31, 2015, the Company believed the cost basis for available-for-sale investments was recoverable in all material respects.

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References + Details

DERIVATIVE FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

Since 2013, the Company has issued five tranches of common stock purchase warrants to secure financing, remediate covenant violations and provide consideration for credit facility amendments extinguished in 2015.

The Company accounts for derivative financial instruments in accordance with FASB ASC 815-40, Derivative and Hedging – Contracts in Entity’s Own Equity, pursuant to which instruments which do not have fixed settlement provisions are deemed to be derivative instruments. The Company’s warrants are classified as liability instruments due to an anti-dilution provision that provides for a reduction to the exercise price of the warrants if the Company issues additional equity or equity linked instruments in the future at an effective price per share less than the exercise price then in effect.

The warrants are re-measured at each balance sheet date based on estimated fair value. Changes in estimated fair value are recorded as non-cash adjustments within other income (expenses), net, in the Company’s accompanying Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The Company recorded a loss on the change in the estimated fair value of warrants of $10.1 million and $4.8 million for the three and nine months ended September 30, 2016, respectively, and a gain on the change in the estimated fair value of warrants of $30.0 million and a loss on the change in the estimated fair value of warrants of $36.2 million for the three and nine months ended September 30, 2015, respectively.

The Company calculated the fair value of the warrants using the Monte Carlo Simulation as of September 30, 2016 and December 31, 2015, using the following assumptions:



	September 30, 2016			December 31, 2015
Fair value of common stock	$	22.38		$	19.29
Remaining life of the warrants (in years)	1.4 - 3.3 years			2.1 - 4.0 years
Risk-free interest rate	.66-.89%			1.11-1.59%
Expected volatility	55-80%			75-85%
Dividend yield	—		%	—		%

Expected volatility is based on analysis of the Company’s volatility, as well as the volatilities of guideline companies. The risk free interest rate is based on the U.S. Treasury security rates for the remaining term of the warrants at the measurement date.

FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

Financial Instruments and Fair Value

The Company accounts for financial instruments in accordance with ASC 820, Fair Value Measurements and Disclosures (“ASC 820”). ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below:

Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2 – Quoted prices in markets that are not active or financial instruments for which all significant inputs are observable, either directly or indirectly; and

Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The valuation techniques used to measure the fair value of the Company’s marketable securities and all other financial instruments, all of which have counterparties with high credit ratings, were valued based on quoted market prices or model driven valuations using significant inputs derived from or corroborated by observable market data. Based on the fair value hierarchy, the Company classified marketable securities within Level 2.

In estimating the fair value of the Company’s derivative liabilities, the Company used the Monte Carlo Simulation as of September 30, 2016 and December 31, 2015. Based on the fair value hierarchy, the Company classified the derivative liability within Level 3.

In estimating the fair value of the Company’s contingent consideration, the Company used the comparable uncontrolled transaction (“CUT”) method for royalty payments based on projected revenues. Based on the fair value hierarchy, the Company classified contingent consideration within Level 3 because valuation inputs are based on projected revenues discounted to a present value.

Financial instruments with carrying values approximating fair value include cash and cash equivalents, accounts receivable, notes receivable, and accounts payable, due to their short term nature. We estimate the fair value of convertible debt is $74.7 million, considering factors such as market conditions, prepayment and make-whole provisions, variability in pricing from multiple lenders and term of debt.

The following table presents the Company’s assets and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of September 30, 2016 (in thousands):



	As of September 30, 2016
	Total carrying and estimated fair value		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Asset:
Marketable securities, available-for-sale	$	250,408	$	—	$	250,408	$	—

Liabilities:
Derivative liability related to warrants	$	28,960	$	—	$	—	$	28,960
Business combination-related contingent consideration	$	81,940	$	—	$	—	$	81,940

The following table presents the Company’s asset and liabilities, measured and recognized at fair value on a recurring basis, classified under the appropriate level of the fair value hierarchy as of December 31, 2015 (in thousands):



	As of December 31, 2015
	Total carrying and estimated fair value		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Asset:
Marketable securities, available-for-sale	$	191,799	$	—	$	191,799	$	—

Liabilities:
Derivative liability related to warrants	$	38,810	$	—	$	—	$	38,810
Business combination-related contingent consideration	$	59,021	$	—	$	—	$	59,021

The following table sets forth a summary of changes in the estimated fair value of the Company’s derivative financial instruments-warrants liability for the nine months ended September 30, 2016 (in thousands):



	Fair Value Measurements of Common Stock Warrants Using Significant Unobservable Inputs (Level 3)
Balance at January 1, 2016	$	38,810
Reclassification of derivative liability to equity upon exercise of warrants	(14,699		)
Change in estimated fair value of liability classified warrants	4,849
Balance at September 30, 2016	$	28,960

A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, the Company performs a detailed analysis of the assets and liabilities that are subject to ASC 820. See Note 7 for further discussion of derivative financial instruments relating to warrants.

The following table sets forth a summary of changes in the estimated fair value of the Company's business combination-related contingent consideration for the nine months ended September 30, 2016 (in thousands):



	Fair Value Measurements of Acquisition-Related Contingent Consideration (Level 3)
Balance at January 1, 2016	$	59,021
Increase from revaluation of contingent consideration	10,741
Acquisition of L-UDCA	25,000
Contractual payments	(3,149		)
Contractual payments accrued at September 30, 2016	(9,756		)
Foreign currency impact	83
Balance at September 30, 2016	$	81,940

The fair value of contingent consideration liabilities was determined by applying a form of the income approach (a level 3 input), based upon the probability-weighted projected payment amounts discounted to present value at a rate appropriate for the risk of achieving the performance targets. The key assumptions included in the calculations were the earn-out period payment probabilities, projected revenues, discount rate and the timing of payments. The present value of the expected payments considers the time at which the obligations are expected to be settled and a discount rate that reflects the risk associated with the performance payments.

During the three and nine month periods ended September 30, 2016, the Company incurred charges of $5.3 million and $10.7 million, respectively, in operating expenses on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the revaluation of the contingent consideration liabilities. For the three month period ended September 30, 2016, $1.6 million, $1.8 million and $1.9 million are related to the increase in contingent consideration liabilities for the products Chenodal, Cholbam and product candidate L-UDCA, respectively. For the nine month period ended September 30, 2016, $4.4 million, $4.4 million and $1.9 million are related to the increase in contingent consideration liabilities for the products Chenodal, Cholbam and product candidate L-UDCA, respectively. In each case, the value increased due to changes in the estimated timing of payments. During the three and nine month periods ended September 30, 2015, the Company incurred charges of $6.9 million and $7.0 million, respectively, in operating expenses on the Condensed Consolidated Statement of Operations and Comprehensive Income (Loss).

- 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

INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS

As of September 30, 2016, the net book value of amortizable intangible assets was approximately $183.3 million.

The following table sets forth amortizable intangible assets as of September 30, 2016 and December 31, 2015 (in thousands):



	September 30, 2016			December 31, 2015
Finite-lived intangible assets	$	212,722		$	179,096
Less: accumulated amortization	(29,424		)	(17,560		)
Net carrying value	$	183,298		$	161,536

The following table summarizes amortization expense for the three and nine months ended September 30, 2016 and 2015 (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Research and development	$	82	$	200	$	245	$	614
Selling, general and administrative	3,987		3,675		11,619		8,803
Total amortization expense	$	4,069	$	3,875	$	11,864	$	9,417

CONVERTIBLE NOTES PAYABLE	9 Months Ended
CONVERTIBLE NOTES PAYABLE	Sep. 30, 2016
Debt Disclosure [Abstract]
CONVERTIBLE NOTES PAYABLE	CONVERTIBLE NOTES PAYABLE On May 29, 2014, the Company entered into a Note Purchase Agreement relating to a private placement by the Company of $46.0 million aggregate principal senior convertible notes due in 2019 (the “Notes”) which are convertible into shares of the Company’s common stock at an initial conversion price of $17.41 per share. The conversion price is subject to customary anti-dilution protection. The Notes bear interest at a rate of 4.5% per annum, payable semiannually in arrears on May 15 and November 15 of each year. The Notes mature on May 30, 2019 unless earlier converted or repurchased in accordance with the terms, and there are no contractual payments due prior to that date. At September 30, 2016 and December 31, 2015, the aggregate carrying value of the Notes was $44.3 million and $43.8 million, respectively. As of March 31, 2016, the Company retrospectively adopted FASB ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs." This ASU amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of as a deferred charge. At September 30, 2016 and December 31, 2015 the debt issuance costs related to the Notes was $0.1 million.

ACCRUED EXPENSES

9 Months Ended

Sep. 30, 2016

Payables and Accruals [Abstract]

ACCRUED EXPENSES

Accrued expenses at September 30, 2016 and December 31, 2015 consisted of the following (in thousands):



	September 30, 2016		December 31, 2015
Government rebates payable	$	4,470	$	3,158
Compensation related costs	6,387		7,143
Legal fees⁽¹⁾	4,050		882
Accrued royalties and contingent consideration	13,194		4,688
Research and development	6,694		4,281
Selling, general and administrative	1,417		2,704
Miscellaneous accrued	4,164		964
	$	40,376	$	23,820

(1) Included in 2016 balance is $3.2 million, the cash portion of the legal fee settlement. See Note 13 for details.

EARNINGS (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

EARNINGS (LOSS) PER SHARE

Basic and diluted net earnings (loss) per common share is calculated by dividing net income (loss) applicable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. The Company’s potentially dilutive shares, which include outstanding stock options, restricted stock units, warrants and shares issuable upon conversion of the Notes, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive.

Basic and diluted net earnings (loss) per share is calculated as follows (net income amounts are stated in thousands):



	Three Months Ended
	September 30, 2016							September 30, 2015
	Shares	Net Income			EPS			Shares	Net Income			EPS
Basic Earnings per Share	36,980,356	$	(37,113	)	$	(1.00	)	35,741,877	$	105,578		$	2.95
Dilutive shares related to warrants	—	—						2,053,934	—
Change in fair value of derivative instruments	—	—						—	(29,991		)
Convertible debt	—	—						2,642,160	518
Restricted stock	—	—						409,166	—
Stock options	—	—						1,905,722	—
Dilutive net earnings (loss) per share	36,980,356	$	(37,113	)	$	(1.00	)	42,752,859	$	76,105		$	1.78



	Nine Months Ended
	September 30, 2016							September 30, 2015
	Shares	Net Income			EPS			Shares	Net Income		EPS
Basic net earnings (loss) per share	36,728,911	$	(39,300	)	$	(1.07	)	32,650,408	$	119,706	$	3.67
Convertible debt	—	—						2,642,160	1,553
Restricted stock	—	—						331,073	—
Stock options	—	—						1,176,895	—
Dilutive net earnings (loss) per share	36,728,911	$	(39,300	)	$	(1.07	)	36,800,536	$	121,259	$	3.30

For the three and nine months ended September 30, 2016 and 2015, the following shares were excluded because they were anti-dilutive (share amounts in millions):



	Three Months Ended		Nine Months Ended
	September 30, 2016	September 30, 2015	September 30, 2016	September 30, 2015
Restricted stock units	0.3	—	0.3	—
Convertible debt	2.6	—	2.6	—
Options	6.7	1.8	6.1	1.1
Warrants	1.8	—	1.8	2.7
Total anti-dilutive shares	11.4	1.8	10.8	3.8

COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Leases and Sublease Agreements

California Offices

San Diego Office

On September 15, 2016 the Company signed a lease for the second floor of 3721 Valley Centre Drive in San Diego, California. This location will become the Company's headquarters in December 2016, when renovations are expected to be completed. Lease commencement is based upon occupation of the premises which is estimated to be December 16, 2016. For GAAP, lease commencement is the day the Company takes control of the premises, which was September 15, 2016. The Company rents this office space for approximately $1.1 million per annum plus escalations. The lease is expected to expire 91 months from the first full month of occupation, or July 31, 2024. The Company negotiated a tenant allowance of $1.5 million paid by the landlord to help with the renovations of the facility.

On September 8, 2014, the Company entered into a lease agreement for its current corporate headquarters located in San Diego, California. The Company rents this office space for approximately $0.5 million per annum plus escalations. The lease commenced on October 1, 2014 and expires on December 31, 2017.

Carlsbad Office - Vacated

In October 2014, the Company ceased use of this facility and all employees moved into the current headquarters facility in San Diego, California. As a result of vacating this location, the Company recorded a loss of $0.2 million in the year ended December 31, 2014. The Company's lease for the two suites which encompass this facility expires on June 30, 2017. The Company has sublet the two suites through the expiration of the lease.

Massachusetts Office

On July 31, 2014, the Company entered into a sublease agreement for office space located in Cambridge, Massachusetts. The Company rents this office space for approximately $0.8 million per annum. The sublease expires on December 31, 2016.

New York Office

On December 30, 2015, the Company amended the lease agreement for its offices in New York, New York to extend the lease term through November 2018. The Company rents this office space for approximately $0.5 million per annum plus escalations.

Research Collaboration and Licensing Agreements

As part of the Company's research and development efforts, the Company enters into research collaboration and licensing agreements with unrelated companies, scientific collaborators, universities, and consultants. These agreements contain varying terms and provisions which include fees and milestones to be paid by the Company, services to be provided, and ownership rights to certain proprietary technology developed under the agreements. Some of these agreements contain provisions which require the Company to pay royalties, in the event the Company sells or licenses any proprietary products developed under the respective agreements.

Contractual Commitments

The following table summarizes our principal contractual commitments, excluding open orders that support normal operations, as of September 30, 2016 (in thousands):



	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Operating leases	$	10,663	$	1,288	$	3,138	$	1,218	$	5,019
Note payable, including contractual interest	52,037		2,070		49,967		—		—
Sales support services	3,158		416		833		1,909		—
Product supply contracts	1,117		867		250		—		—
	$	66,975	$	4,641	$	54,188	$	3,127	$	5,019

Legal Proceedings

On September 19, 2014, purported shareholders of the Company sued Martin Shkreli, the Company’s former Chief Executive Officer, in federal court in the Southern District of New York (Donoghue v. Retrophin, Inc., Case No. 14-cv-7640). The Company is a nominal defendant in this action. The plaintiffs sought, on behalf of the Company, disgorgement of short-swing profits from Mr. Shkreli under section 16(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78(p)(b)). The Court has approved a settlement between the parties, under which Mr. Shkreli is obligated to pay $2.025 million to the Company and an additional $0.6 million to Plaintiffs to compensate them for their legal fees. Mr. Shkreli defaulted on the judgment and the Company and the Plaintiffs took steps to collect it. The Company did not record anything related to the judgment on its financial statements for 2015. Any related amounts received will be recorded against equity when collected. On February 18, 2016, Mr. Shkreli sought leave from the Court to move for a protective order to block the enforcement of the judgment. The Company and Plaintiffs’ counsel also sought leave to file motions in connection with their enforcement efforts. On March 16, 2016, the Court granted the parties leave to file their respective motions and ordered that all enforcement efforts be stayed for thirty days. On May 24, 2016, Plaintiffs’ counsel informed the Court that the parties had entered into an agreement under which Plaintiffs’ counsel were to be paid in full, and that pursuant to that agreement they had no further stake in the matter and would not participate in future case events. Under that agreement, the Company paid $8,249 to Plaintiffs’ counsel to compensate them for certain disbursements which Plaintiffs’ counsel had made in connection with their efforts to enforce the judgment, and the Company also assumed control over all restraining notices and subpoenas previously served by Plaintiffs’ counsel. At a status conference on June 10, 2016, the Court ordered Mr. Shkreli and the Company to keep the Court updated on the progress of their settlement negotiations. To date, none of the parties have filed any of the motions which they previously sought leave to file. The Company and Mr. Shkreli have entered into a binding term sheet with respect to a settlement, under which the $2.025 million judgment against Mr. Shkreli would offset and satisfy certain existing legal fees that Mr. Shkreli claimed should be advanced to him by the Company, as described more fully below.

In January 2015, the Company received a subpoena relating to a criminal investigation by the U.S. Attorney for the Eastern District of New York. The subpoena requested information regarding, among other things, the Company’s relationship with Mr. Shkreli and individuals or entities that had been investors in investment funds previously managed by Mr. Shkreli. The Company has been informed that it is not a target of the U.S. Attorney’s investigation, and is cooperating with the investigation. On December 17, 2015, an indictment against the Company’s former Chief Executive Officer, Martin Shkreli, and its former outside counsel, Evan Greebel, was unsealed in the United States District Court for the Eastern District of New York. A superseding indictment reflecting additional charges was filed on June 3, 2016. The Company has also been cooperating with a parallel investigation by the U.S. Securities and Exchange Commission (the “SEC”). On December 17, 2015, the SEC filed a civil complaint against Mr. Shkreli, Mr. Greebel, MSMB Capital Management LLC, and MSMB Healthcare Management LLC in the United States District Court for the Eastern District of New York. In connection with these proceedings, Mr. Shkreli, as well as a number of other current and former directors, officers and employees, have sought advancement of their legal fees from the Company. Mr. Shkreli, in particular, claims that the Company owes him in excess of $5 million in legal fees that he has incurred defending these actions. The Company disputed its obligation to pay the amount in full. The Company and Mr. Shkreli have entered into a binding term sheet with respect to a settlement under which the Company will advance $2.8 million in legal fees to Mr. Shkreli’s counsel, representing a portion of the existing legal fees related to these proceedings that Mr. Shkreli claims should be advanced. The Company will also undertake an obligation to advance an additional $2 million in future legal fees in the event the matter proceeds to trial. The Company expects to receive payment from its directors’ and officers’ insurance carriers for a portion of the legal fees it advances, although the amount it will receive from the insurance carriers is not currently estimable. In addition, the legal fees the Company advances will be subject to reimbursement by Mr. Shkreli under Delaware law in the event it is ultimately determined that Mr. Shkreli is not entitled to be indemnified by the Company in these proceedings.

On August 17, 2015, the Company filed a lawsuit in federal district court for the Southern District of New York against Martin Shkreli, asserting that he breached his fiduciary duty of loyalty during his tenure as the Company’s Chief Executive Officer and a member of its Board of Directors (Retrophin, Inc. v. Shkreli, 15-CV-06451(NRB)). On August 19, 2015, Mr. Shkreli served a demand for JAMS arbitration on Retrophin, claiming that Retrophin had breached his December 2013 employment agreement. In response to Mr. Shkreli’s arbitration demand, the Company has asserted counterclaims in the arbitration that are substantially similar to the claims it previously asserted in the federal lawsuit against Mr. Shkreli. The parties have selected an arbitration panel. On Mr. Shkreli’s application, and with the Company’s consent, the federal Court has granted a stay of the federal lawsuit pending a determination by the arbitration panel whether the Company’s counterclaims will be litigated in the arbitration, as the Company is seeking. On April 22, 2016, the arbitration panel granted the parties’ request for a stay of the proceedings pending settlement discussions. In connection with these proceedings, Mr. Shkreli has sought advancement of his legal fees from the Company relating to his defense of the Company’s claims against him. Mr. Shkreli claims that he has to date incurred in excess of $2.8 million in fees, including fees incurred in negotiating with the Company over advancement. The Company disputed its obligation to pay the amount in full. The Company and Mr. Shkreli have entered into a binding term sheet with respect to a settlement under which the significant majority of the existing legal fees related to these proceedings that Mr. Shkreli claims should be advanced will be offset and satisfied by the $2.025 million judgment against Mr. Shkreli in the Donoghue v. Retrophin, Inc. case described above. The Company will advance $0.4 million in legal fees to Mr. Shkreli’s counsel, representing a portion of the remaining existing legal fees related to these proceedings that Mr. Shkreli claims should be advanced. The legal fees the Company advances will be subject to reimbursement by Mr. Shkreli under Delaware law in the event it is ultimately determined that Mr. Shkreli is not entitled to be indemnified by the Company in these proceedings.

In July 2016, the Company received a demand for payment from the United States Internal Revenue Service (“IRS”) regarding a levy issued by the IRS in March 2016 with respect to unpaid federal income taxes personally owed by Mr. Shkreli for the year ended December 31, 2014, for approximately $4.0 million, which has since been reduced to $2.4 million. The levy sought to collect any property or rights to property (such as money, credits and bank deposits) in the Company’s possession that belong to or are owed to Mr. Shkreli. The Company believes that it is uncertain, as a matter of law, whether and how the tax levy applies to the Company’s advancement obligations to Mr. Shkreli. The Company currently believes the IRS will not enforce the tax levy against the Company once the IRS receives certain payments from Mr. Shkreli. The Company’s settlement with Mr. Shkreli enables the delivery of these payments to the IRS. Once these payments are received and the IRS has confirmed the tax levy has been satisfied, the remaining terms of the settlement will become effective. The settlement will satisfy the Company’s obligation in full to provide advancement or indemnification for existing legal fees in the proceedings described above.

As of September 30, 2016, the Company has recorded expenses related to the settlement of approximately $5.2 million on its Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), of which approximately $3.2 million consists of cash payments. The remainder consists of the $2.025 million offset judgment against Mr. Shkreli in the Donoghue v. Retrophin, Inc. case described above. The expense does not include the additional $2 million in future legal fees that the Company will be obligated to advance in the event the criminal and SEC actions involving Mr. Shkreli proceed to trial. Although the Company expects to receive payment from its directors’ and officers’ insurance carriers for a portion of the legal fees it will advance as part of the contemplated settlement, the Company has not yet recorded any gain contingency for such payments as the amount it will receive from the insurance carriers is not currently estimable. While the Company believes the contemplated settlement is probable, it has not yet been finalized, and therefore the settlement may not be consummated on the currently anticipated terms, if at all.

From time to time the Company is involved in legal proceedings arising in the ordinary course of business. The Company believes there is no litigation pending that could have, individually or in the aggregate, a material adverse effect on its results of operations or financial condition.

SHARE BASED COMPENSATION

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

SHARE BASED COMPENSATION

Restricted Shares

Service and Performance Based Restricted Stock Units

The following table summarizes the Company’s restricted stock activity during the nine months ended September 30, 2016:



	Number of Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding December 31, 2015	429,666		$	20.38
Granted	245,000		17.52
Vested	(120,501	)	18.49
Forfeited/canceled	(54,835	)	15.39
Outstanding September 30, 2016	499,330		$	19.98

At September 30, 2016, unamortized stock compensation for restricted stock awards was $6.7 million, with a weighted-average recognition period of 1.1 years.

Performance Based Restricted Stock Awards

During the nine months ended September 30, 2016, the Company granted 130,000 performance based restricted stock awards, included in the Restricted Stock Awards table above.

Stock Options

The following table summarizes stock option activity during the nine months ended September 30, 2016:



	Shares Underlying Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2015	5,665,584		$	17.05	8.75	$	31,542
Granted	1,685,250		16.72
Exercised	(220,109	)	10.11
Forfeited/canceled	(273,450	)	20.61
Outstanding at September 30, 2016	6,857,275		$	17.05	8.13	$	49,301

At September 30, 2016, unamortized stock compensation for stock options was $42.5 million, with a weighted-average recognition period of 2.0 years.

At September 30, 2016, outstanding options to purchase 3.4 million shares of common stock were exercisable with a weighted-average exercise price per share of $14.41.

Share Based Compensation

The following table sets forth total non-cash stock-based compensation by operating statement classification for the three and nine months ended September 30, 2016 and 2015 (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Research and development	$	2,934	$	2,692	$	8,061	$	6,660
Selling, general & administrative	4,814		5,489		13,973		12,088
Total	$	7,748	$	8,181	$	22,034	$	18,748

Exercise of Warrants

During the three and nine months ended September 30, 2016, the Company issued 882,533 and 897,533 shares of common stock, respectively, upon the exercise of warrants for cash received by the Company in the amount of $5.9 million and $6.0 million, respectively. The Company reclassified $14.5 million and $14.7 million, respectively, of derivative liability to equity for the value of these warrants on the date of exercise. The warrants were revalued immediately prior to exercise and the change in the fair value of $2.9 million for both periods was recorded as other expense in the consolidated financial statements of the Company.

At September 30, 2016 and December 31, 2015, warrants to purchase 1,768,015 and 2,665,548 shares of common stock, respectively, were outstanding.

INVENTORY

9 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

INVENTORY

Inventory, net of reserves, consisted of the following at September 30, 2016 and December 31, 2015 (in thousands):



	September 30, 2016		December 31, 2015
Raw materials	$	778	$	289
Finished goods	2,475		2,247
Total inventory	$	3,253	$	2,536

The inventory reserve was $0.6 million and $0.3 million at September 30, 2016 and December 31, 2015, respectively.

RECEIVABLES	9 Months Ended
RECEIVABLES	Sep. 30, 2016
Receivables [Abstract]
RECEIVABLES	RECEIVABLES Accounts Receivables Accounts receivable, net of reserves for prompt pay discounts and doubtful accounts, was $15.0 million and $12.5 million at September 30, 2016 and December 31, 2015, respectively. The total reserves for both periods were immaterial. Notes Receivables The notes receivable arose from the Company's sale of a Pediatric PRV in July 2015 to Sanofi for $245.0 million. $150.0 million was received upon closing, and $47.5 million is due on each of the first and second anniversaries of the closing. In accordance with GAAP, the Company recorded the future short term and long term notes receivable at their present value of $46.2 million and $44.9 million, respectively, at the date of the sale using a discount rate of 2.8%. The accretion on the notes receivable totaled $0.3 million and $1.6 million for the three and nine month periods ending September 30, 2016, respectively, and is recorded in interest expense, net, in the Consolidated Statements of Operations and Comprehensive Income (Loss). The first anniversary payment was received on July 2, 2016. The present value of the remaining notes receivable is $46.5 million and is recorded in current assets at September 30, 2016. At December 31, 2015, notes receivable was recorded in long term assets with a present value of $45.6 million. There are no indications for impairment as of September 30, 2016 and December 31, 2015.

SUBSEQUENT EVENT SUBSEQUENT EVENT	9 Months Ended
SUBSEQUENT EVENT SUBSEQUENT EVENT	Sep. 30, 2016
Subsequent Events [Abstract]
SUBSEQUENT EVENT	SUBSEQUENT EVENT On November 1, 2016, the Company signed a legal settlement with its former Chief Executive Officer ("CEO") relating to his claims for advancement of legal fees relating to his defense for actions while employed by the Company. See Note 13 for further discussion.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	9 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	Sep. 30, 2016
Accounting Policies [Abstract]
Principles of Consolidation	Principles of Consolidation The unaudited condensed consolidated financial statements represent the consolidation of the accounts of the Company and its subsidiaries in conformity with GAAP. All intercompany accounts and transactions have been eliminated in consolidation.
Adoption of New Accounting Standards/Recently Issued Accounting Pronouncements	Adoption of New Accounting Standards In April 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Simplifying the Presentation of Debt Issuance Costs. This ASU amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a direct deduction from the carrying amount of the related debt liability instead of as a deferred charge. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2015. The Company retroactively adopted the new guidance in 2016. The adoption of the new guidance did not have a material impact on the Company’s financial statements. See Note 10 for further discussion. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, to simplify the presentation of deferred taxes. This ASU requires that all deferred tax assets and liabilities, along with any related valuation allowances, be classified as noncurrent on the balance sheet. However, an entity shall not offset deferred tax liabilities and assets attributable to different tax jurisdictions. This ASU is effective for annual and interim reporting periods ending after December 15, 2016. Early adoption is permitted, and the new guidance may be applied either prospectively or retrospectively. We adopted this guidance prospectively as of December 31, 2015. Therefore, prior periods have not been adjusted to reflect this adoption. This change in accounting principle did not change our results of operations, cash flows or stockholders’ equity. Recently Issued Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its consolidated financial position or results of operations upon adoption. In May 2014, the FASB issued ASU No. 2014-9, Revenue from Contracts with Customers. Under the new standard, revenue is recognized at the time a good or service is transferred to a customer for the amount of consideration for which the entity expects to be entitled for that specific good or service. Entities may use a full retrospective approach or report the cumulative effect as of the date of adoption. On July 9, 2015, the FASB voted to defer the effective date by one year to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption of this ASU is permitted but not before the original effective date (annual periods beginning after December 15, 2016). We are currently evaluating the impact, if any, the adoption of this standard will have on our consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory. This standard amends Topic 330, Inventory, which currently requires an entity to measure inventory at the lower of cost or market. Market could be replacement cost, net realizable value, or net realizable value less an approximately normal profit margin. When this standard is adopted, an entity should measure in scope inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The adoption of this standard will not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are currently evaluating the impact, if any, the adoption of this standard will have on our consolidated financial statements. In April 2016, the FASB issued ASU No. 2016-09, Compensation —Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Specifically, the ASU requires all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) to be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity also should recognize excess tax benefits, and assess the need for a valuation allowance, regardless of whether the benefit reduces taxes payable in the current period. That is, off balance sheet accounting for net operating losses stemming from excess tax benefits would no longer be required and instead such net operating losses would be recognized when they arise. Existing net operating losses that are currently tracked off balance sheet would be recognized, net of a valuation allowance if required, through an adjustment to opening retained earnings in the period of adoption. Entities will no longer need to maintain and track an “APIC pool.” The ASU also requires excess tax benefits to be classified along with other income tax cash flows as an operating activity in the statement of cash flows. In addition, the ASU elevates the statutory tax withholding threshold to qualify for equity classification up to the maximum statutory tax rates in the applicable jurisdiction(s). The ASU also clarifies that cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity. The ASU provides an optional accounting policy election (with limited exceptions), to be applied on an entity-wide basis, to either estimate the number of awards that are expected to vest (consistent with GAAP) or account for forfeitures when they occur. The ASU is effective for public business entities for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Certain detailed transition provisions apply if an entity elects to early adopt. We are currently evaluating the impact, if any, the adoption of this standard will have on our consolidated financial statements. In June 2016, the FASB issued No. 2016-13, Financial Instruments —Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. Topic 326 amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected. For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write-down. This Accounting Standards Update affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash. This update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The Company currently holds available for sale debt securities that are affected by this ASU. This ASU is not expected to have a material impact on the Company’s financial statements. In October 2016, the FASB issued No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory. The new guidance changes the accounting for income tax effects of intra-entity transfers of assets other than inventory. Under the new guidance, the selling (transferring) entity is required to recognize a current tax expense or benefit upon transfer of the asset. Similarly, the purchasing (receiving) entity is required to recognize a deferred tax asset or deferred tax liability, as well as the related deferred tax benefit or expense, upon receipt of the asset. The new guidance will be effective for the Company starting in fiscal year 2018 on a modified retrospective basis, and early adoption is permitted. The Company is currently evaluating the impact of this accounting standard update on its consolidated financial statements as well as whether to adopt the new guidance early.

INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2016

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax (Expense) Benefit

The following table summarizes our effective tax rate and income tax (expense) benefit for the three and nine months ended September 30, 2016 and 2015 (in thousands except for percentages):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Effective tax rate	(21.1	)%	26.9	%	13.2	%	(1.1	)%
Income tax (expense) benefit	(6,467	)	(38,761	)	5,994		1,246

BUSINESS COMBINATION (Tables)

9 Months Ended

Sep. 30, 2016

Business Combinations [Abstract]

Schedule of purchase price allocation

The purchase price allocation of $25.5 million as of the acquisition completion date of June 16, 2016 is as follows (in thousands):



Cash paid upon consummation	$	500
Present value of contingent consideration	25,000
Total purchase price	$	25,500

Fair Value of Assets Acquired and Liabilities Assumed
Acquired product rights: L-UDCA (intangible asset)	$	25,500
Total purchase price	$	25,500

The purchase price allocation of $91.3 million as of the acquisition completion date of March 31, 2015 was as follows (in thousands):



Cash paid upon consummation	$	33,430
Present value of contingent consideration and service fees	42,010
Fair Value of 661,279 shares issued to Asklepion	15,844
Total Purchase Price	$	91,284

Fair Value of Assets Acquired and Liabilities Assumed
Acquired product rights: Cholbam (Intangible Asset)	$	83,200
Pediatric Priority Review Voucher	96,250
Inventory	777
Deferred tax liability	(39,880		)
Total Allocation of Purchase Price	$	140,347
Bargain Purchase Gain	(49,063		)
Total Purchase Price	$	91,284

MARKETABLE SECURITIES (Tables)

9 Months Ended

Sep. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Schedule of marketable securities

Marketable securities consisted of the following (in thousands):



	September 30, 2016		December 31, 2015
Marketable other than equity securities:
Commercial paper	$	37,251	$	31,864
Corporate debt securities	173,669		125,547
Securities of government sponsored entities	39,488		34,388
Total Marketable Securities:	$	250,408	$	191,799

Schedule of available for sale securities

The following is a summary of short-term marketable securities classified as available-for-sale as of September 30, 2016 (in thousands):



	Remaining Contractual Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses			Aggregate Estimated Fair Value
Marketable other than equity securities:
Commercial paper	Less than 1	$	37,302	$	—	$	(51	)	$	37,251
Corporate debt securities	Less than 1	96,929		18		(57		)	96,890
Securities of government-sponsored entities	Less than 1	9,500		—		—			9,500
Total maturity less than 1 year		143,731		18		(108		)	143,641
Corporate debt securities	1 to 2	76,909		24		(154		)	76,779
Securities of government-sponsored entities	1 to 2	30,012		—		(24		)	29,988
Total maturity 1 to 2 years		106,921		24		(178		)	106,767
Total available-for-sale securities		$	250,652	$	42	$	(286	)	$	250,408

The following is a summary of short-term marketable securities classified as available-for-sale as of December 31, 2015 (in thousands):



	Remaining Contractual Maturity (in years)	Amortized Cost		Unrealized Gains		Unrealized Losses			Aggregate Estimated Fair Value
Marketable Other than Equity Securities:
Commercial paper	Less than 1	$	31,899	$	6	$	(41	)	$	31,864
Corporate debt securities	Less than 1	69,859		—		(164		)	69,695
Total maturity less than 1 year		101,758		6		(205		)	101,559
Corporate debt securities	1 to 2	56,162		—		(310		)	55,852
Securities of government-sponsored entities	1 to 2	34,522		2		(136		)	34,388
Total maturity 1 to 2 years		90,684		2		(446		)	90,240
Total available-for-sale securities		$	192,442	$	8	$	(651	)	$	191,799

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

+ References + Details

DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of assumptions for valuation of warrants

The Company calculated the fair value of the warrants using the Monte Carlo Simulation as of September 30, 2016 and December 31, 2015, using the following assumptions:



	September 30, 2016			December 31, 2015
Fair value of common stock	$	22.38		$	19.29
Remaining life of the warrants (in years)	1.4 - 3.3 years			2.1 - 4.0 years
Risk-free interest rate	.66-.89%			1.11-1.59%
Expected volatility	55-80%			75-85%
Dividend yield	—		%	—		%

FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2016

Fair Value Disclosures [Abstract]

Schedule of fair value on a recurring basis



	As of September 30, 2016
	Total carrying and estimated fair value		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Asset:
Marketable securities, available-for-sale	$	250,408	$	—	$	250,408	$	—

Liabilities:
Derivative liability related to warrants	$	28,960	$	—	$	—	$	28,960
Business combination-related contingent consideration	$	81,940	$	—	$	—	$	81,940



	As of December 31, 2015
	Total carrying and estimated fair value		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Asset:
Marketable securities, available-for-sale	$	191,799	$	—	$	191,799	$	—

Liabilities:
Derivative liability related to warrants	$	38,810	$	—	$	—	$	38,810
Business combination-related contingent consideration	$	59,021	$	—	$	—	$	59,021

Schedule of estimated fair value of the derivative financial instruments,warrants liability



	Fair Value Measurements of Common Stock Warrants Using Significant Unobservable Inputs (Level 3)
Balance at January 1, 2016	$	38,810
Reclassification of derivative liability to equity upon exercise of warrants	(14,699		)
Change in estimated fair value of liability classified warrants	4,849
Balance at September 30, 2016	$	28,960

Schedule of summary of changes in estimated acquisition related contingent consideration



	Fair Value Measurements of Acquisition-Related Contingent Consideration (Level 3)
Balance at January 1, 2016	$	59,021
Increase from revaluation of contingent consideration	10,741
Acquisition of L-UDCA	25,000
Contractual payments	(3,149		)
Contractual payments accrued at September 30, 2016	(9,756		)
Foreign currency impact	83
Balance at September 30, 2016	$	81,940

INTANGIBLE ASSETS (Tables)

9 Months Ended

Sep. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived amortizable intangible assets

The following table sets forth amortizable intangible assets as of September 30, 2016 and December 31, 2015 (in thousands):



	September 30, 2016			December 31, 2015
Finite-lived intangible assets	$	212,722		$	179,096
Less: accumulated amortization	(29,424		)	(17,560		)
Net carrying value	$	183,298		$	161,536

Schedule of amortization expense

The following table summarizes amortization expense for the three and nine months ended September 30, 2016 and 2015 (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Research and development	$	82	$	200	$	245	$	614
Selling, general and administrative	3,987		3,675		11,619		8,803
Total amortization expense	$	4,069	$	3,875	$	11,864	$	9,417

ACCRUED EXPENSES (Tables)

9 Months Ended

Sep. 30, 2016

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses at September 30, 2016 and December 31, 2015 consisted of the following (in thousands):



	September 30, 2016		December 31, 2015
Government rebates payable	$	4,470	$	3,158
Compensation related costs	6,387		7,143
Legal fees⁽¹⁾	4,050		882
Accrued royalties and contingent consideration	13,194		4,688
Research and development	6,694		4,281
Selling, general and administrative	1,417		2,704
Miscellaneous accrued	4,164		964
	$	40,376	$	23,820

(1) Included in 2016 balance is $3.2 million, the cash portion of the legal fee settlement. See Note 13 for details.

EARNINGS (LOSS) PER SHARE (Tables)

9 Months Ended

Sep. 30, 2016

Earnings Per Share [Abstract]

Schedule of basic and diluted net income (loss) per share

Basic and diluted net earnings (loss) per share is calculated as follows (net income amounts are stated in thousands):



	Three Months Ended
	September 30, 2016							September 30, 2015
	Shares	Net Income			EPS			Shares	Net Income			EPS
Basic Earnings per Share	36,980,356	$	(37,113	)	$	(1.00	)	35,741,877	$	105,578		$	2.95
Dilutive shares related to warrants	—	—						2,053,934	—
Change in fair value of derivative instruments	—	—						—	(29,991		)
Convertible debt	—	—						2,642,160	518
Restricted stock	—	—						409,166	—
Stock options	—	—						1,905,722	—
Dilutive net earnings (loss) per share	36,980,356	$	(37,113	)	$	(1.00	)	42,752,859	$	76,105		$	1.78



	Nine Months Ended
	September 30, 2016							September 30, 2015
	Shares	Net Income			EPS			Shares	Net Income		EPS
Basic net earnings (loss) per share	36,728,911	$	(39,300	)	$	(1.07	)	32,650,408	$	119,706	$	3.67
Convertible debt	—	—						2,642,160	1,553
Restricted stock	—	—						331,073	—
Stock options	—	—						1,176,895	—
Dilutive net earnings (loss) per share	36,728,911	$	(39,300	)	$	(1.07	)	36,800,536	$	121,259	$	3.30

Schedule of common stock options, convertible debt and restricted stock units anti-dilutive

For the three and nine months ended September 30, 2016 and 2015, the following shares were excluded because they were anti-dilutive (share amounts in millions):



	Three Months Ended		Nine Months Ended
	September 30, 2016	September 30, 2015	September 30, 2016	September 30, 2015
Restricted stock units	0.3	—	0.3	—
Convertible debt	2.6	—	2.6	—
Options	6.7	1.8	6.1	1.1
Warrants	1.8	—	1.8	2.7
Total anti-dilutive shares	11.4	1.8	10.8	3.8

COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Schedule of principal contractual commitments

The following table summarizes our principal contractual commitments, excluding open orders that support normal operations, as of September 30, 2016 (in thousands):



	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Operating leases	$	10,663	$	1,288	$	3,138	$	1,218	$	5,019
Note payable, including contractual interest	52,037		2,070		49,967		—		—
Sales support services	3,158		416		833		1,909		—
Product supply contracts	1,117		867		250		—		—
	$	66,975	$	4,641	$	54,188	$	3,127	$	5,019

SHARE BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Schedule of restricted stock activity

The following table summarizes the Company’s restricted stock activity during the nine months ended September 30, 2016:



	Number of Restricted Stock Units		Weighted Average Grant Date Fair Value
Outstanding December 31, 2015	429,666		$	20.38
Granted	245,000		17.52
Vested	(120,501	)	18.49
Forfeited/canceled	(54,835	)	15.39
Outstanding September 30, 2016	499,330		$	19.98

Schedule of stock option issuances and balances outstanding

The following table summarizes stock option activity during the nine months ended September 30, 2016:



	Shares Underlying Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2015	5,665,584		$	17.05	8.75	$	31,542
Granted	1,685,250		16.72
Exercised	(220,109	)	10.11
Forfeited/canceled	(273,450	)	20.61
Outstanding at September 30, 2016	6,857,275		$	17.05	8.13	$	49,301

Schedule of Share based compensation expenses

The following table sets forth total non-cash stock-based compensation by operating statement classification for the three and nine months ended September 30, 2016 and 2015 (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Research and development	$	2,934	$	2,692	$	8,061	$	6,660
Selling, general & administrative	4,814		5,489		13,973		12,088
Total	$	7,748	$	8,181	$	22,034	$	18,748

INVENTORY (Tables)

9 Months Ended

Sep. 30, 2016

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory, net of reserves, consisted of the following at September 30, 2016 and December 31, 2015 (in thousands):



	September 30, 2016		December 31, 2015
Raw materials	$	778	$	289
Finished goods	2,475		2,247
Total inventory	$	3,253	$	2,536

DESCRIPTION OF BUSINESS (Details)	Sep. 30, 2016 Employee
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of employees	135

INCOME TAXES - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Income Tax Disclosure [Abstract]
Effective tax rate	(21.10%)	26.90%	13.20%	(1.10%)
Income tax (expense) benefit	$ (6,467)	$ (38,761)	$ 5,994	$ 1,246

INCOME TAXES (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 6,467	$ 38,761	$ (5,994)	$ (1,246)
Effective tax rate	(21.10%)	26.90%	13.20%	(1.10%)
Statutory income tax rate percentage	35.00%		35.00%	35.00%
Unrecognized tax benefits	$ 1,500		$ 1,500		$ 3,300
Net decrease in unrecognized tax benefits			$ 1,800

BUSINESS COMBINATION (Details) - USD ($) $ in Thousands				9 Months Ended		12 Months Ended
BUSINESS COMBINATION (Details) - USD ($) $ in Thousands	Jun. 16, 2016	Mar. 31, 2015	Jan. 12, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Business Acquisition [Line Items]
Acquisition-related contingent consideration				$ 75,370		$ 45,267
Liquid Ursodeoxycholic Acid (L-UDCA) [Member]
Business Acquisition [Line Items]
Intangible assets acquired	$ 25,500
Discount rate percentage	12.00%
Liquid Ursodeoxycholic Acid (L-UDCA) [Member] \| Product rights
Business Acquisition [Line Items]
Assets useful life (in years)	17 years
Asklepion Pharmaceuticals, LLC
Business Acquisition [Line Items]
Cash payment		$ 28,400		$ 1,082	$ 307
Common stock shares issued (in shares)		661,279
Value of common stock		$ 15,844
Acquisition-related contingent consideration		39,100
Fair value of Pediatric Priority Review Voucher		96,250
Intangible assets acquired		83,200
Discount rate percentage						19.00%
Contingent consideration agreement, high amount						$ 16,300
Net present value of service fees						2,900
Total payments of service fees						$ 4,000
Deferred tax liability		39,880
Assets acquired in business combination		$ 88,500
Utilized tax rate percentage		45.40%
Purchase price allocation		$ 91,284
Asklepion Pharmaceuticals, LLC \| Definitive agreement
Business Acquisition [Line Items]
Upfront payment			$ 5,000
Asklepion Pharmaceuticals, LLC \| Purchase agreement
Business Acquisition [Line Items]
Value of common stock		$ 9,000
Asklepion Pharmaceuticals, LLC \| Product rights
Business Acquisition [Line Items]
Assets useful life (in years)		10 years
Asklepion Pharmaceuticals, LLC \| Product rights \| United States
Business Acquisition [Line Items]
Intangible assets acquired		$ 75,900
Asklepion Pharmaceuticals, LLC \| Product rights \| International
Business Acquisition [Line Items]
Intangible assets acquired		$ 7,300

BUSINESS COMBINATION - Purchase Price Allocation (Details) - USD ($) $ in Thousands			9 Months Ended
	Jun. 16, 2016	Mar. 31, 2015	Sep. 30, 2016	Sep. 30, 2015
Business Acquisition [Line Items]
Cash paid upon consummation			$ 500	$ 33,430
Liquid Ursodeoxycholic Acid (L-UDCA) [Member]
Business Acquisition [Line Items]
Cash paid upon consummation	$ 500
Present value of contingent consideration and service fees	25,000
Total Purchase Price	25,500
Fair Value of Assets Acquired and Liabilities Assumed
Acquired product rights- (Intangible Asset)	25,500
Total Allocation of Purchase Price	$ 25,500
Asklepion Pharmaceuticals, LLC
Business Acquisition [Line Items]
Common stock shares issued (in shares)		661,279
Cash paid upon consummation		$ 33,430
Present value of contingent consideration and service fees		42,010
Fair Value of 661,279 shares issued to Asklepion		15,844
Total Purchase Price		91,284
Fair Value of Assets Acquired and Liabilities Assumed
Acquired product rights- (Intangible Asset)		83,200
Pediatric Priority Review Voucher		96,250
Inventory		777
Deferred tax liability		(39,880)
Total Allocation of Purchase Price		140,347
Bargain Purchase Gain		(49,063)
Total Purchase Price		$ 91,284

MARKETABLE SECURITIES - Marketable Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Marketable securities	$ 250,408	$ 191,799
Commercial paper
Schedule of Available-for-sale Securities [Line Items]
Marketable securities	37,251	31,864
Corporate debt securities
Schedule of Available-for-sale Securities [Line Items]
Marketable securities	173,669	125,547
Securities of government sponsored entities
Schedule of Available-for-sale Securities [Line Items]
Marketable securities	$ 39,488	$ 34,388

MARKETABLE SECURITIES - Available for Sale Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 250,652	$ 192,442
Unrealized Gains	42	8
Unrealized Losses	(286)	(651)
Aggregate Estimated Fair Value	250,408	191,799
Less than 1 year
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	143,731	101,758
Unrealized Gains	18	6
Unrealized Losses	(108)	(205)
Aggregate Estimated Fair Value	143,641	101,559
1 to 2 years
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	106,921	90,684
Unrealized Gains	24	2
Unrealized Losses	(178)	(446)
Aggregate Estimated Fair Value	106,767	90,240
Commercial paper \| Less than 1 year
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	37,302	31,899
Unrealized Gains	0	6
Unrealized Losses	(51)	(41)
Aggregate Estimated Fair Value	37,251	31,864
Corporate debt securities \| Less than 1 year
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	96,929	69,859
Unrealized Gains	18	0
Unrealized Losses	(57)	(164)
Aggregate Estimated Fair Value	96,890	69,695
Corporate debt securities \| 1 to 2 years
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	76,909	56,162
Unrealized Gains	24	0
Unrealized Losses	(154)	(310)
Aggregate Estimated Fair Value	76,779	55,852
Securities of government sponsored entities \| Less than 1 year
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	9,500
Unrealized Gains	0
Unrealized Losses	0
Aggregate Estimated Fair Value	9,500
Securities of government sponsored entities \| 1 to 2 years
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	30,012	34,522
Unrealized Gains	0	2
Unrealized Losses	(24)	(136)
Aggregate Estimated Fair Value	$ 29,988	$ 34,388

MARKETABLE SECURITIES - Additional Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Investments, Debt and Equity Securities [Abstract]
Proceeds from the sale/maturity of marketable securities	$ 92,609	$ 4,977
Purchase of marketable securities	$ 152,016	$ 94,793

DERIVATIVE FINANCIAL INSTRUMENTS (Details) - Warrant $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016 USD ($)	Sep. 30, 2015 USD ($)	Sep. 30, 2016 USD ($) tranche	Sep. 30, 2015 USD ($)
Derivative [Line Items]
Number of tranches \| tranche			5
Recorded gain on change in estimated fair value of warrants		$ 30.0
Recorded loss on change in estimated fair value of warrants	$ 10.1		$ 4.8	$ 36.2

DERIVATIVE FINANCIAL INSTRUMENTS - Valuation Assumptions (Details) - Warrant - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Derivative [Line Items]
Fair value of common stock (in dollars per share)	$ 22.38	$ 19.29
Dividend yield	0.00%	0.00%
Minimum
Derivative [Line Items]
Remaining life of the warrants (in years)	1 year 4 months 24 days	2 years 1 month 6 days
Risk-free interest rate	0.66%	1.11%
Expected volatility	55.00%	75.00%
Maximum
Derivative [Line Items]
Remaining life of the warrants (in years)	3 years 3 months 18 days	4 years
Risk-free interest rate	0.89%	1.59%
Expected volatility	80.00%	85.00%

FAIR VALUE MEASUREMENTS - Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Asset:
Marketable securities, available-for-sale	$ 250,408	$ 191,799
Recurring basis
Asset:
Marketable securities, available-for-sale	250,408	191,799
Liabilities:
Derivative liability related to warrants	28,960	38,810
Business combination-related contingent consideration	81,940	59,021
Recurring basis \| Significant other observable inputs (Level 2)
Asset:
Marketable securities, available-for-sale	250,408	191,799
Recurring basis \| Significant unobservable inputs (Level 3)
Liabilities:
Derivative liability related to warrants	28,960	38,810
Business combination-related contingent consideration	$ 81,940	$ 59,021

FAIR VALUE MEASUREMENTS - Warrants Liability (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Reclassification of derivative liability to equity upon exercise of warrants	$ (14,500)	$ (14,700)
Warrants liability
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance		38,810
Reclassification of derivative liability to equity upon exercise of warrants		(14,699)
Change in estimated fair value of liability classified warrants		4,849
Ending Balance	$ 28,960	$ 28,960

FAIR VALUE MEASUREMENTS - Acquisition-related Contingent Consideration (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Business Combination, Acquisition Related Contingent Consideration [Roll Forward]
Increase from revaluation of contingent consideration	$ 5,256	$ 6,906	$ 10,741	$ 7,026
Recurring basis
Business Combination, Acquisition Related Contingent Consideration [Roll Forward]
Beginning Balance			59,021
Ending Balance	81,940		81,940
Recurring basis \| Level 3
Business Combination, Acquisition Related Contingent Consideration [Roll Forward]
Beginning Balance			59,021
Increase from revaluation of contingent consideration			10,741
Acquisition of L-UDCA			25,000
Contractual payments			(3,149)
Contractual payments accrued at September 30, 2016			(9,756)
Foreign currency impact			83
Ending Balance	$ 81,940		$ 81,940

FAIR VALUE MEASUREMENTS - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Business Acquisition [Line Items]
Fair value of convertible debt	$ 74,700		$ 74,700
Increase from revaluation of contingent consideration	5,256	$ 6,906	10,741	$ 7,026
Product Rights Chenodal
Business Acquisition [Line Items]
Increase from revaluation of contingent consideration	1,600		4,400
Product Rights Cholbam
Business Acquisition [Line Items]
Increase from revaluation of contingent consideration	1,800		4,400
Product Rights L-UDCA
Business Acquisition [Line Items]
Increase from revaluation of contingent consideration	$ 1,900		$ 1,900

INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Net book value of amortizable intangible assets	$ 183,298	$ 161,536

INTANGIBLE ASSETS - Amortizable Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Finite-lived intangible assets	$ 212,722	$ 179,096
Less: accumulated amortization	(29,424)	(17,560)
Net carrying value	$ 183,298	$ 161,536

INTANGIBLE ASSETS - Amortization (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Finite-Lived Intangible Assets [Line Items]
Total amortization expense	$ 4,069	$ 3,875	$ 11,864	$ 9,417
Research and development
Finite-Lived Intangible Assets [Line Items]
Total amortization expense	82	200	245	614
Selling, general and administrative
Finite-Lived Intangible Assets [Line Items]
Total amortization expense	$ 3,987	$ 3,675	$ 11,619	$ 8,803

CONVERTIBLE NOTES PAYABLE (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015	May 29, 2014
Debt Instrument [Line Items]
Convertible Debt	$ 44,257	$ 43,766
Note Purchase Agreement \| Senior convertible notes due 2019
Debt Instrument [Line Items]
Credit Agreement amount			$ 46,000
Initial conversion price (in dollars per share)			$ 17.41
Interest rate percentage			4.50%
Debt issuance costs	$ 100	$ 100

ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Payables and Accruals [Abstract]
Government rebates payable	$ 4,470	$ 3,158
Compensation related costs	6,387	7,143
Legal fees	4,050	882
Accrued royalties and contingent consideration	13,194	4,688
Research and development	6,694	4,281
Selling, general and administrative	1,417	2,704
Miscellaneous accrued	4,164	964
Accrued expenses	$ 40,376	$ 23,820

ACCRUED EXPENSES - Additional Information (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($)
Donoghue v. Retrophin, Inc. \| Martin Shkreli
Loss Contingencies [Line Items]
Cash payments of litigation settlement	$ 3.2

EARNINGS (LOSS) PER SHARE - EPS Reconciliation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Shares
Basic net earnings (loss) per Share (in shares)	36,980,356	35,741,877	36,728,911	32,650,408
Dilutive shares related to warrants (in shares)	0
Change in fair value of derivative instruments (in shares)	0	0
Convertible Debt (in shares)	0	2,642,160	0	2,642,160
Dilutive net earnings (loss) per share (in shares)	36,980,356	42,752,859	36,728,911	36,800,536
Net Income
Basic net earnings (loss) per Share	$ (37,113)	$ 105,578	$ (39,300)	$ 119,706
Change in fair value of derivative instruments		(29,991)
Convertible debt	0	518	0	1,553
Dilutive net earnings (loss) per share	$ (37,113)	$ 76,105	$ (39,300)	$ 121,259
Basic Earnings per Share, EPS (in dollars per share)	$ (1.00)	$ 2.95	$ (1.07)	$ 3.67
Diluted Earnings per Share, EPS (in dollars per share)	$ (1.00)	$ 1.78	$ (1.07)	$ 3.30
Restricted stock units
Shares
Dilutive securities (in shares)	0	409,166	0	331,073
Net Income
Dilutive securities	$ 0	$ 0	$ 0	$ 0
Stock Options
Shares
Dilutive securities (in shares)	0	1,905,722	0	1,176,895
Net Income
Dilutive securities	$ 0	$ 0	$ 0	$ 0
Warrant
Shares
Dilutive shares related to warrants (in shares)		2,053,934
Net Income
Dilutive securities	0	$ 0
Change in fair value of derivative instruments	$ 0

EARNINGS (LOSS) PER SHARE - Antidilutive Shares (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from the calculation	11.4	1.8	10.8	3.8
Restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from the calculation	0.3	0.0	0.3	0.0
Convertible debt
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from the calculation	2.6	0.0	2.6	0.0
Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from the calculation	6.7	1.8	6.1	1.1
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from the calculation	1.8	0.0	1.8	2.7

COMMITMENTS AND CONTINGENCIES - Contractual Commitments (Details) $ in Thousands	Sep. 30, 2016 USD ($)
Operating leases
Total	$ 10,663
Less than 1 year	1,288
1-3 years	3,138
3-5 years	1,218
More than 5 years	5,019
Total
Total	66,975
Less than 1 year	4,641
1-3 years	54,188
3-5 years	3,127
More than 5 years	5,019
Note payable, including contractual interest
Other commitments
Total	52,037
Less than 1 year	2,070
1-3 years	49,967
3-5 years	0
More than 5 years	0
Sales support services
Other commitments
Total	3,158
Less than 1 year	416
1-3 years	833
3-5 years	1,909
More than 5 years	0
Product supply contracts
Other commitments
Total	1,117
Less than 1 year	867
1-3 years	250
3-5 years	0
More than 5 years	$ 0

COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - USD ($)									1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 15, 2016	May 24, 2016	Apr. 22, 2016	Dec. 30, 2015	Dec. 17, 2015	Sep. 19, 2014	Sep. 08, 2014	Jul. 31, 2014	Jul. 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2014
Commitment And Contingency [Line Items]
Accrued expenses										$ 5,212,000	$ 0	$ 5,212,000	$ 0
Donoghue v. Retrophin, Inc. \| IRS \| Levy Sought on Unpaid Income Taxes by Plaintiff
Commitment And Contingency [Line Items]
Damages sought									$ 4,000,000	$ 2,400,000
Donoghue v. Retrophin, Inc. \| Martin Shkreli
Commitment And Contingency [Line Items]
Litigation settlement						$ 2,025,000
Amount paid to plaintiff's counsel		$ 8,249
Accrued expenses												5,200,000
Cash payments of litigation settlement												3,200,000
Donoghue v. Retrophin, Inc. \| Martin Shkreli \| Legal Fees
Commitment And Contingency [Line Items]
Damages sought			$ 2,800,000		$ 5,000,000
Donoghue v. Retrophin, Inc. \| Martin Shkreli \| Advancement of Legal Fees [Member]
Commitment And Contingency [Line Items]
Damages sought			$ 400,000		2,800,000
Donoghue v. Retrophin, Inc. \| Martin Shkreli \| Additional Future Legal Fees
Commitment And Contingency [Line Items]
Damages sought					$ 2,000,000							$ 2,000,000
Donoghue v. Retrophin, Inc. \| Martin Shkreli \| Plaintiffs
Commitment And Contingency [Line Items]
Litigation settlement						$ 600,000
Lease Agreement \| California
Commitment And Contingency [Line Items]
Rent expense	$ 1,100,000						$ 500,000
Leasing contract (in months)	91 months
Tenant allowance from landlord	$ 1,500,000
Loss on leased assets														$ 200,000
Lease Agreement \| Massachusetts
Commitment And Contingency [Line Items]
Rent expense								$ 800,000
Lease Agreement \| New York
Commitment And Contingency [Line Items]
Rent expense				$ 500,000

SHARE BASED COMPENSATION - Restricted Stock Activity (Details) $ / shares in Units, $ in Millions	9 Months Ended
	Sep. 30, 2016 USD ($) $ / shares shares
Restricted stock units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unamortized stock compensation expense \| $	$ 6.7
Weighted-average recognition period (in years)	1 year 1 month 6 days
Number of Restricted Stock Units
Beginning Balance (in shares)	429,666,000
Granted (in shares)	245,000,000
Vested (in shares)	(120,501,000)
Forfeited/canceled (in shares)	(54,835,000)
Ending Balance (in share)	499,330,000
Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share) \| $ / shares	$ 20.38
Granted (in dollars per share) \| $ / shares	17,520.00
Vested (in dollars per share) \| $ / shares	18,490.00
Forfeited/canceled (in dollars per share) \| $ / shares	15,390.00
Ending balance (in dollars per share) \| $ / shares	$ 19.98
Performance Based Restricted Stock Awards
Number of Restricted Stock Units
Granted (in shares)	130,000

SHARE BASED COMPENSATION - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares exercisable (in shares)	3,400,000
Weighted average exercise price (in dollars per share)	$ 14.41
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unamortized stock compensation expense	$ 42,500
Weighted-average recognition period (in years)	2 years
Shares Underlying Options
Beginning Balance (in shares)	5,665,584
Granted (in shares)	1,685,250
Exercised (in shares)	(220,109)
Forfeited/canceled (in shares)	(273,450)
Ending Balance (in shares)	6,857,275	5,665,584
Weighted Average Exercise Price
Beginning balance (in dollars per share)	$ 17.05
Granted (in dollars per share)	16.72
Exercised (in dollars per share)	10.11
Forfeited/canceled (in dollars per share)	20.61
Ending balance (in dollars per share)	$ 17.05	$ 17.05
Weighted Average Remaining Contractual Life (years)	8 years 1 month 17 days	8 years 9 months
Aggregate Intrinsic Value (in thousands)	$ 49,301	$ 31,542

SHARE BASED COMPENSATION - Stock based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 7,748	$ 8,181	$ 22,034	$ 18,748
Research and development
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	2,934	2,692	8,061	6,660
Selling, general & administrative
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 4,814	$ 5,489	$ 13,973	$ 12,088

SHARE BASED COMPENSATION - Exercise of Warrants (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016	Dec. 31, 2015
Equity [Abstract]
Common stock issued upon the exercise of warrants (in shares)	882,533	897,533
Cash received from exercise of warrants	$ 5.9	$ 6.0
Reclassification of derivative liability to equity upon exercise of warrants	$ 14.5	14.7
Change in fair value of warrants		$ 2.9
Warrants outstanding	1,768,015	1,768,015	2,665,548

INVENTORY (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 778	$ 289
Finished goods	2,475	2,247
Total inventory	3,253	2,536
Inventory reserve	$ 600	$ 300

RECEIVABLES (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended	9 Months Ended
RECEIVABLES (Details) - USD ($) $ in Thousands	Jul. 31, 2015	Sep. 30, 2016	Sep. 30, 2016	Dec. 31, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts receivable, net of reserves		$ 14,955	$ 14,955	$ 12,458
Note receivable, current		46,526	46,526	46,849
Note receivable, long term		0	0	$ 45,573
Asklepion Pharmaceuticals, LLC \| Asset Purchase Agreement
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from sale of asset	$ 245,000
Discount rate of future payments to be received	2.80%
At Time Of Closing \| Asset Purchase Agreement
Accounts, Notes, Loans and Financing Receivable [Line Items]
Present value of future payments to be received	$ 46,200
At Time Of Closing \| Asklepion Pharmaceuticals, LLC \| Asset Purchase Agreement
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from sale of asset	150,000
Due On First And Second Anniversaries Of Closing \| Asset Purchase Agreement
Accounts, Notes, Loans and Financing Receivable [Line Items]
Present value of future payments to be received	44,900
Due On First And Second Anniversaries Of Closing \| Asklepion Pharmaceuticals, LLC \| Asset Purchase Agreement
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from sale of asset	$ 47,500
Interest expense \| Asklepion Pharmaceuticals, LLC \| Asset Purchase Agreement
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accretion on notes receivable		$ 300	$ 1,600