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Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Dec. 31, 2018	Feb. 24, 2019	Jun. 29, 2018
Document and Entity Information
Entity Registrant Name	Pacira Pharmaceuticals, Inc.
Entity Central Index Key	0001396814
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1.3
Entity Common Stock, Shares Outstanding		41,229,766
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 132,526	$ 54,126
Short-term investments	250,928	257,221
Accounts receivable, net	38,000	31,658
Inventories, net	48,569	41,411
Prepaid expenses and other current assets	7,946	6,694
Total current assets	477,969	391,110
Long-term investments	25,871	60,047
Fixed assets, net	108,670	107,046
Goodwill	62,040	55,197
Equity investment	14,146	14,146
Other assets	657	825
Total assets	689,353	628,371
Current liabilities:
Accounts payable	14,368	14,658
Accrued expenses	45,865	41,057
Convertible senior notes	338	324
Current portion of deferred revenue	0	102
Income taxes payable	90	76
Total current liabilities	60,661	56,217
Convertible senior notes	290,592	276,173
Other liabilities	16,874	16,498
Total liabilities	368,127	348,888
Commitments and contingencies
Stockholders’ equity:
Preferred stock, par value $0.001; 5,000,000 shares authorized; none issued and outstanding at December 31, 2018 and 2017	0	0
Common stock, par value $0.001; 250,000,000 shares authorized; 41,222,799 shares issued and outstanding at December 31, 2018; 40,668,877 shares issued and outstanding at December 31, 2017	41	41
Additional paid-in capital	709,691	669,032
Accumulated deficit	(388,226)	(389,136)
Accumulated other comprehensive loss	(280)	(454)
Total stockholders’ equity	321,226	279,483
Total liabilities and stockholders’ equity	$ 689,353	$ 628,371

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares issued	41,222,799	40,668,877
Common stock, shares outstanding	41,222,799	40,668,877

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenues:
Net product sales	$ 332,427	$ 284,342	$ 270,073
Collaborative licensing and milestone revenue	3,000	387	3,426
Royalty revenue	1,850	1,901	2,872
Total revenues	337,277	286,630	276,371
Operating expenses:
Cost of goods sold	86,845	87,915	110,104
Research and development	55,688	57,290	45,678
Selling, general and administrative	177,265	161,494	152,613
Product discontinuation	1,564	4,868	0
Total operating expenses	321,362	311,567	308,395
Income (loss) from operations	15,915	(24,937)	(32,024)
Other (expense) income:
Interest income	6,497	4,078	1,323
Interest expense	(21,949)	(18,047)	(7,061)
Loss on early extinguishment of debt	0	(3,732)	0
Other, net	(888)	167	(82)
Total other expense, net	(16,340)	(17,534)	(5,820)
Loss before income taxes	(425)	(42,471)	(37,844)
Income tax expense	(46)	(140)	(105)
Net loss	$ (471)	$ (42,611)	$ (37,949)
Net loss per share:
Basic and diluted net income (loss) per common share (in dollars per share)	$ (0.01)	$ (1.07)	$ (1.02)
Weighted average common shares outstanding:
Basic and diluted (in shares)	40,911	39,806	37,236

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (471)	$ (42,611)	$ (37,949)
Other comprehensive income (loss):
Net unrealized gain (loss) on investments	174	(424)	22
Total other comprehensive income (loss)	174	(424)	22
Comprehensive loss	$ (297)	$ (43,035)	$ (37,927)

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Convertible debt	Convertible Senior Notes Due 2022 [Member]	Common Stock	Additional Paid-In Capital	Additional Paid-In Capital Convertible debt	Additional Paid-In Capital Convertible Senior Notes Due 2022 [Member]	Accumulated Deficit	Accumulated Other Comprehensive Income
Balances at Dec. 31, 2015	$ 218,392			$ 37	$ 526,696			$ (308,289)	$ (52)
Balances (in shares) at Dec. 31, 2015				36,848,000
Increase (Decrease) in Stockholders' Equity
Exercise of stock options	5,770				5,770
Exercise of stock options (in shares)				518,000
Vested restricted stock units	0
Vested restricted stock units (in shares)				62,000
Shares issued under employee stock purchase plan	1,495				1,495
Shares issued under employee stock purchase plan (in shares)				53,000
Stock-based compensation	31,248				31,248
Equity component of convertible senior notes, net of issuance costs	(2)				(2)
Net unrealized gain (loss) on investments	22								22
Net loss	(37,949)							(37,949)
Balances at Dec. 31, 2016	218,976			$ 37	565,207			(346,238)	(30)
Balances (in shares) at Dec. 31, 2016				37,481,000
Increase (Decrease) in Stockholders' Equity
Net loss	(19,866)
Balances at Dec. 31, 2016	218,976			$ 37	565,207			(346,238)	(30)
Balances (in shares) at Dec. 31, 2016				37,481,000
Increase (Decrease) in Stockholders' Equity
Exercise of stock options	6,778			$ 1	6,777
Exercise of stock options (in shares)				540,000
Vested restricted stock units	0
Vested restricted stock units (in shares)				101,000
Shares issued under employee stock purchase plan	1,862				1,862
Shares issued under employee stock purchase plan (in shares)				57,000
Stock-based compensation	31,601				31,601
Issuance of common stock upon conversion of 2019 convertible senior notes	120,960			$ 3	120,957
Issuance of common stock upon conversion of 2019 convertible senior notes (in shares)				2,490,000
Equity component of convertible senior notes, net of issuance costs		$ (126,328)	$ 68,669			$ (126,328)	$ 68,669
Net unrealized gain (loss) on investments	(424)								(424)
Net loss	(42,611)							(42,611)
Balances at Dec. 31, 2017	279,483			$ 41	669,032			(389,136)	(454)
Balances (in shares) at Dec. 31, 2017				40,669,000
Increase (Decrease) in Stockholders' Equity
Cumulative effect adjustment of the adoption of Accounting Standards Update 2016-09 (Note 3)					287			(287)
Net loss	(10,680)
Balances at Dec. 31, 2017	279,483			$ 41	669,032			(389,136)	(454)
Balances (in shares) at Dec. 31, 2017				40,669,000
Increase (Decrease) in Stockholders' Equity
Exercise of stock options	7,170			$ 0	7,170
Exercise of stock options (in shares)				333,000
Vested restricted stock units	0			$ 0
Vested restricted stock units (in shares)				156,000
Shares issued under employee stock purchase plan	$ 1,784				1,784
Shares issued under employee stock purchase plan (in shares)	224,887			65,000
Stock-based compensation	$ 31,725				31,725
Net unrealized gain (loss) on investments	174								174
Net loss	(471)							(471)
Balances at Dec. 31, 2018	321,226			$ 41	709,691			(388,226)	$ (280)
Balances (in shares) at Dec. 31, 2018				41,223,000
Increase (Decrease) in Stockholders' Equity
Cumulative effect adjustment of the adoption of Accounting Standards Update 2016-09 (Note 3)	1,361							1,361
Net loss	$ 2,564
Cumulative effect adjustment of the adoption of Accounting Standards Update 2016-09 (Note 3)					$ (20)			$ 20

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Operating activities:
Net loss	$ (471)	$ (42,611)	$ (37,949)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation of fixed assets and amortization of intangibles	13,165	13,833	12,919
Amortization of unfavorable lease obligation and debt issuance costs	1,590	1,248	479
Amortization of debt discount	12,799	10,423	4,088
Loss on disposal of fixed assets	65	2,133	389
Loss on early extinguishment of debt	0	3,732	0
Stock-based compensation	31,725	31,601	31,248
Loss on unexercised investment purchase option	854	0	0
Changes in operating assets and liabilities:
Accounts receivable, net	(5,999)	(1,721)	(4,082)
Inventories, net	(7,157)	(10,133)	30,367
Prepaid expenses and other assets	(3,228)	3,476	(3,377)
Accounts payable	(573)	5,712	(350)
Accrued expenses and income taxes payable	5,203	3,647	1,060
Other liabilities	897	(3,555)	(1,339)
Net cash provided by operating activities	48,870	17,785	33,453
Investing activities:
Purchases of fixed assets	(14,514)	(19,266)	(24,709)
Purchases of investments	(363,255)	(502,752)	(192,815)
Sales of investments	405,188	321,713	171,627
Payment of contingent consideration	(6,843)	(8,460)	(15,857)
Equity investment	0	(15,000)	0
Net cash provided by (used in) investing activities	20,576	(223,765)	(61,754)
Financing activities:
Proceeds from exercises of stock options	7,170	6,778	5,770
Proceeds from shares issued under employee stock purchase plan	1,784	1,862	1,495
Proceeds from issuance of 2022 convertible senior notes	0	345,000	0
Repayment of 2019 convertible senior notes		(118,193)	(4)
Payment of debt issuance and financing costs	0	(11,000)	0
Costs for conversions of convertible senior notes	0	(285)	0
Net cash provided by financing activities	8,954	224,162	7,261
Net increase (decrease) in cash and cash equivalents	78,400	18,182	(21,040)
Cash and cash equivalents, beginning of year	54,126	35,944	56,984
Cash and cash equivalents, end of year	132,526	54,126	35,944
Supplemental cash flow information:
Cash paid for interest	8,205	6,896	3,852
Cash paid for income taxes, net of refunds	128	129	247
Non-cash investing and financing activities:
Issuance of common stock from conversion of 2019 convertible senior notes	0	120,960	0
Issuance of common stock from conversion of 2019 convertible senior notes	0	(126,328)	0
Net increase (decrease) in accrued fixed assets	$ (98)	$ 2,189	$ (789)

Valuation and Qualifying Accounts Disclosure Statement - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Valuation and Qualifying Accounts Disclosure [Line Items]
Valuation Allowances and Reserves, Balance	$ 3,300	$ 3,013	$ 3,800	$ 3,900
Accruals	19,321	15,581	12,871
Valuation Allowances and Reserves, Deductions	$ (19,034)	$ (16,368)	$ (12,971)

DESCRIPTION OF BUSINESS	12 Months Ended
DESCRIPTION OF BUSINESS	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
DESCRIPTION OF BUSINESS	DESCRIPTION OF BUSINESS Pacira Pharmaceuticals, Inc. and its subsidiaries (collectively, the “Company” or “Pacira”) is a specialty pharmaceutical company focused on the development, manufacture and commercialization of pharmaceutical products, based on its proprietary DepoFoam^® extended release drug delivery technology, for use primarily in hospitals and ambulatory surgery centers. Pacira is committed to becoming a global leader in delivering innovative non-opioid pain management solutions to surgeons and anesthesiologists. The Company’s mission is to provide an opioid alternative to as many appropriate patients as possible. The Company’s flagship product, EXPAREL^®(bupivacaine liposome injectable suspension), which consists of bupivacaine encapsulated in DepoFoam, was approved by the United States Food and Drug Administration, or FDA, on October 28, 2011 and launched commercially in April 2012. The Company also sells its bupivacaine liposome injectable suspension product to a commercial partner for use in animals. Pacira is subject to risks common to companies in similar industries and stages of development, including, but not limited to, competition from larger companies, reliance on revenue from one product, reliance on two manufacturing sites, new technological innovations, dependence on key personnel, reliance on third-party service providers and sole source suppliers, protection of proprietary technology, compliance with government regulations and risks related to cybersecurity.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the United States Securities and Exchange Commission, or SEC. The accounts of wholly owned subsidiaries are included in the consolidated financial statements. All intercompany balances and transactions have been eliminated in consolidation. Certain reclassifications were made to conform to the current presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and contingent liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are used for, among other things, revenue recognition, inventory costs, impairments of equity investments, long-lived assets, goodwill, liabilities and accruals and the valuation of deferred tax assets. The Company’s critical accounting policies are those that are both most important to the Company’s consolidated financial condition and results of operations and require the most difficult, subjective or complex judgments on the part of management in their application, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Because of the uncertainty of factors surrounding the estimates or judgments used in the preparation of the consolidated financial statements, actual results could differ from these estimates.

Revenue From Contracts With Customers

The Company’s sources of revenue include (i) sales of EXPAREL in the United States, or U.S.; (ii) sales of its bupivacaine liposome injectable suspension product for use in animals in the U.S.; (iii) royalties based on sales of its bupivacaine liposome injectable suspension product for use in animals and (iv) license fees and milestone payments. See Note 4, Revenue, for further information on the Company’s accounting policies related to revenue from contracts with customers.

Collaborative Licensing and Milestone Revenue

The Company’s collaboration agreements generally involve a license to the Company’s products. In determining how and when to recognize the revenue under a collaboration agreement, the Company must assess whether the license is distinct, which depends upon whether the customer can benefit from the license and whether the license is separate from other performance obligations in the agreement. If the license is distinct, the Company must further assess whether the customer has a right to access or a right to use the license depending on whether the functionality of the license is expected to substantively change over time. If the license is not expected to substantively change, the revenue is recognized at the point in time when the license is provided. If the license is expected to substantively change, the revenue is recognized over the license period.

Revenue recognition from milestone payments is dependent upon the facts and circumstances surrounding the milestone payments. Milestone payments based on a non-sales metric such as a development-based milestone (e.g. obtaining regulatory approval) represent variable consideration and are included in the transaction price subject to any constraints. If the milestone payments relate to future development, the timing of recognition depends upon historical experience and the significance a third party has on the outcome. For milestone payments to be received upon the achievement of a sales threshold, the revenue from the milestone payments is recognized at the later of when the actual sales are incurred or the performance obligation to which the sales relate to has been satisfied.

Royalty Revenue

Royalties are estimated and recognized as revenue when sales to the Company’s commercial partners occur, unless some constraint exists, as the royalties predominately relate to a supply agreement. Royalties are based on sales of the Company’s bupivacaine liposome injectable suspension product to serve animal indications.

Concentration of Major Customers

The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers (including AmerisourceBergen Health Corporation, Cardinal Health, Inc. and McKesson Drug Company), but shipments of the product are sent directly to individual accounts, such as hospitals, ambulatory surgery centers and individual doctors. The Company also sells EXPAREL directly to ambulatory surgical centers and physicians. The table below includes the percentage of net product sales comprised by the Company’s three largest wholesalers in each period presented:



	Year Ended December 31,
	2018		2017		2016
Largest wholesaler	34	%	35	%	32	%
Second largest wholesaler	30	%	30	%	28	%
Third largest wholesaler	26	%	26	%	26	%
Total	90	%	91	%	86	%

Revenue from outside the U.S. accounted for less than 1% of the Company’s total revenue for the years ended December 31, 2018 and 2017, and 1% of the Company’s total revenue for the year ended December 31, 2016.

Research and Development Expenses

Research and development expenditures are expensed as incurred. These include both internal and external costs, of which a significant portion of development activities are outsourced to third parties, including contract research organizations. Clinical trial costs are accrued over the service periods specified in contracts and adjusted as necessary based on an ongoing review of the level of effort and actual costs incurred. Research and development costs are presented net of reimbursements from commercial partners.

Income Taxes

The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to basis differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. As of December 31, 2018 and 2017, all deferred tax assets were fully offset by a valuation allowance because there is significant doubt regarding the Company’s ability to utilize such net deferred tax assets.

The Company accrues interest and penalties, if any, on underpayment of income taxes related to unrecognized tax benefits as a component of income tax expense in its consolidated statements of operations.

Stock-Based Compensation

The Company’s stock-based compensation includes grants of stock options and restricted stock units, or RSUs, to employees, consultants and non-employee directors in addition to the opportunity for employees to participate in an employee stock purchase plan. The expense associated with these programs is recognized in the Company’s consolidated statements of operations based on their fair values as they are earned under the applicable vesting terms or the length of an offering period.

In calculating the estimated fair value of stock options granted, the Company uses the Black-Scholes option valuation model, or Black-Scholes model, which requires the consideration of the following variables for purposes of estimating fair value:


•	Expected term of the option


•	Expected volatility


•	Expected dividends


•	Risk-free interest rate

The Company utilizes its available historic volatility data to determine expected volatility over the expected option term. The Company uses an expected term based on its historical data from stock option activity. The risk-free interest rate is based on the implied yield on U.S. Department of the Treasury zero-coupon bonds for periods commensurate with the expected term of the options. The dividend yield on the Company’s common stock is estimated to be zero as the Company has not paid any dividends since inception, nor does it have any intention to do so in the foreseeable future. The Company records forfeitures as they occur rather than estimating forfeitures during each period.

Cash and Cash Equivalents

All highly-liquid investments with maturities of 90 days or less when purchased are considered cash equivalents.

Short-Term and Long-Term Investments

Short-term investments consist of asset-backed securities collateralized by credit card receivables, investment grade commercial paper and corporate bonds with maturities of greater than three months, but less than one year. Long-term investments consist of asset-backed securities collateralized by credit card receivables and corporate bonds with maturities greater than one year. The Company determines the appropriate classification of its investments at the time of purchase and reevaluates such determination at each balance sheet date. The Company’s investment policy sets minimum credit quality criteria and maximum maturity limits on its investments to provide for preservation of capital, liquidity and a reasonable rate of return. Available-for-sale securities are recorded at fair value, based on current market valuations. Unrealized holding gains and losses on available-for-sale securities are excluded from net income (loss) and are reported as a separate component of accumulated other comprehensive income (loss) until realized. Realized gains and losses are included in interest income in the consolidated statements of operations and are derived using the specific identification method for determining the cost of the securities sold.

Inventories

Inventories consist of finished goods held for sale and distribution, raw materials and work in process. Inventories are stated at the lower of cost, which includes amounts related to material, labor and overhead, or net realizable value and is determined using the first-in, first-out (“FIFO”) method. The Company periodically reviews its inventory to identify obsolete, slow-moving, or otherwise unsalable inventories, and establishes allowances for situations in which the cost of the inventory is not expected to be recovered.

Fixed Assets

Fixed assets are recorded at cost, net of accumulated depreciation and amortization. The Company reviews its property, plant and equipment assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Depreciation of fixed assets is provided over their estimated useful lives on a straight-line basis. Leasehold improvements are amortized on a straight-line basis over the shorter of their estimated useful lives or the related remaining lease terms. Useful lives by asset category are as follows:



Asset Category		Useful Life
Computer equipment and software		1 to 3 years
Office furniture and equipment		5 years
Manufacturing and laboratory equipment		5 to 10 years

Asset Retirement Obligations

The Company has contractual obligations stemming from certain of its lease agreements to return leased space to its original condition upon termination of the lease agreement. The Company records an asset retirement obligation, or ARO, along with a corresponding capital asset in an amount equal to the estimated fair value of the ARO, based on the present value of expected future cash flows. In subsequent periods, the Company records interest expense to accrete the ARO to its full value. Each ARO capital asset is depreciated over the depreciable term of the associated asset.

Goodwill

Goodwill represents the excess of purchase price over fair value acquired in a business combination and is not amortized, but is subject to impairment at least annually or when a triggering event occurs that could indicate a potential impairment.

Equity Investments

The Company historically accounted for its equity investment in a minority interest of a company over which it does not exercise significant influence using the cost method. The equity investment held by the Company does not have a readily determinable fair value. Effective January 1, 2018, the Company elected to account for its equity investment at its cost less impairment, if any, plus or minus any changes resulting from observable price changes in orderly transactions for a similar investment in the same investee. The Company performs a qualitative assessment for impairment each reporting period. Such an assessment is judgmental and dependent on specific facts and circumstances. Factors considered in determining whether a decline in value has occurred include, but are not limited to: (i) a significant deterioration in the earnings performance, credit rating, asset quality, or business prospects of the investee; (ii) a significant adverse change in the regulatory, economic or technological environment of the investee; (iii) a sale of the same or similar investment for an amount less than the carrying amount of that investment and (iv) factors that raise significant concerns about the investee’s ability to continue as a going concern. If an impairment exists, the Company will estimate the fair value of the equity investment and an impairment will be recognized in its consolidated statements of operations based on the difference between the fair value and carrying amount.

Impairment of Long-Lived Assets

Management reviews long-lived assets, including fixed assets, for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets.

Convertible Debt Transactions

The Company separately accounts for the liability and equity components of convertible debt instruments by allocating the proceeds from the issuance between the liability component and the embedded conversion option, or equity component. This is done in accordance with accounting for convertible debt instruments that may be settled in cash (including partial cash settlement) upon conversion. The value of the equity component is calculated by first measuring the fair value of the liability component, using the interest rate of a similar liability that does not have a conversion feature, as of the issuance date. The difference between the initial proceeds from the convertible debt issuance and the fair value of the liability component is recorded as the carrying amount of the equity component. The Company recognizes the amortization of the resulting discount as part of interest expense in its consolidated statements of operations.

Upon settlement of the convertible senior notes, the liability component is measured at fair value. The Company allocates a portion of the fair value of the total settlement consideration transferred to the extinguishment of the liability component equal to the fair value of that component immediately prior to the settlement. Any difference between the consideration attributed to the liability component and the net carrying amount of the liability component, including any unamortized debt issuance costs and debt discount, is recognized as a gain or loss in the consolidated statements of operations. Any remaining consideration is allocated to the reacquisition of the equity component and is recognized as a reduction of additional paid-in capital.

Per Share Data

Basic net income (loss) per common share is computed by dividing net income (loss) available (attributable) to common stockholders by the weighted average number of shares of common stock outstanding during the period.

Diluted net income (loss) per common share is calculated by dividing net income (loss) available (attributable) to common stockholders as adjusted for the effect of dilutive securities, if any, by the weighted average number of shares of common stock and dilutive common stock outstanding during the period. Potential common shares include the shares of common stock issuable upon the exercise of outstanding stock options, the vesting of RSUs and the purchase of shares from the Company’s employee stock purchase plan (using the treasury stock method), as well as the excess conversion value on the Company’s convertible senior notes.

Segment Reporting

The Company operates in one reportable segment and, accordingly, no segment disclosures have been presented.

RECENT ACCOUNTING PRONOUNCEMENTS	12 Months Ended
RECENT ACCOUNTING PRONOUNCEMENTS	Dec. 31, 2018
New Accounting Pronouncements and Changes in Accounting Principles [Abstract]
RECENT ACCOUNTING PRONOUNCEMENTS	Recent Accounting Pronouncements Not Adopted as of December 31, 2018 In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and subsequently issued clarifications and corrections to the update by issuing ASU 2018-10 in July 2018. This update requires lessees to recognize lease assets and lease liabilities on the consolidated balance sheet for those leases classified as operating leases under previous authoritative guidance. Upon adoption, the lease liability will be equal to the present value of future lease payments and a right-of-use, or ROU, asset will be based on the lease liability, subject to adjustment for items such as initial direct costs. For income statement purposes, the new standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating or financing. Operating leases will continue to result in straight-line expense while financing leases will result in a front-loaded expense pattern (similar to current accounting guidance by lessees for operating and capital leases, respectively, under ASC 840). There are a number of practical expedients available to the Company at transition. The transition practical expedients are that the Company may elect to not re-assess: (i) whether its contracts contain a lease under the new definition, (ii) the classification of those leases and (iii) the accounting for any initial direct costs previously incurred. In addition, the Company may apply hindsight in determining the lease terms and in assessing a purchase option on its existing leases and any potential impairments that may exist on the ROU assets to be recognized at adoption. The Company may also elect to not recognize an ROU asset and lease liability for those leases with a remaining lease term of 12 months or less. The Company will apply these practical expedients upon adoption. Upon adoption, ROU assets and lease liabilities are being recognized on the Company’s consolidated balance sheets. The lease liability recognized upon adoption is based upon the present value of the sum of the remaining minimum lease payments (as previously identified under ASC 840) and any amounts probable of being owed under a residual value guarantee (if applicable), to be determined using the discount rate then in effect. The interest rate is based on the Company’s ability to borrow on a collateralized basis over a similar remaining term and in a similar economic environment. The ROU asset to be recorded is based on the lease liability and adjusted for any prepaid or accrued lease payments, the remaining balance of any lease incentives, initial indirect costs and impairments (if applicable). The standard is effective for the Company beginning January 1, 2019. The Company elected to adopt the new standard at the beginning of the period of adoption through a cumulative-effect adjustment. The Company will reflect its ROU assets, lease liabilities and any cumulative-effect adjustment to retained earnings in its consolidated financial statements beginning on January 1, 2019. The Company continues to evaluate the impact of ASU 2016-02 on its consolidated financial statements. The recognition of lease liabilities and corresponding ROU assets is expected to have a material impact on the Company’s consolidated balance sheet. The Company estimates that it will record approximately $35.0 million to $38.0 million of lease liabilities and $26.0 million to $29.0 million of ROU assets as of January 1, 2019, the difference representing previously recorded lease-related assets and liabilities. The Company does not believe the adoption of this standard will have a material impact on its consolidated statements of operations, stockholders’ equity or cash flows. Refer to Note 18, Commitments and Contingencies, for further information on the Company’s existing leases. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. This update also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. This standard will become effective for the Company beginning January 1, 2020, with early adoption permitted. The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework. The purpose of the update is to improve the effectiveness of the fair value measurement disclosures that allows for clear communication of information that is most important to the users of financial statements. There were certain required disclosures that have been removed or modified. In addition, the update added the following disclosures: (i) changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period and (ii) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The standard will become effective for the Company beginning January 1, 2020, with early adoption permitted. The Company is currently evaluating the impact of ASU 2018-13 on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other Internal-Use Software (Subtopic 350-40: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The update provides guidance to determine which implementation costs to capitalize as they relate to the service contract and which costs to expense. In addition, the update further defines the term of the hosting arrangement to include the non-cancelable period of the arrangement plus periods covered by (i) an option to extend the arrangement if the customer is reasonably certain to exercise that option; (ii) an option to terminate the arrangement if the customer is reasonably certain not to exercise the termination option and (iii) an option to extend (or not to terminate) the arrangement in which exercise of the option is in the control of the vendor. Any expense related to the capitalized implementation costs should be recorded in the same financial statement line item in the consolidated statements of operations as the fees associated with the hosting element of the arrangement, and the payments for capitalized implementation costs should be classified in the same manner as payments made for fees associated with the hosting element in the consolidated statements of cash flows. This standard will become effective for the Company beginning January 1, 2020. The amendments may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently evaluating the impact of ASU 2018-15 on its consolidated financial statements. Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company.

REVENUE

12 Months Ended

Dec. 31, 2018

Revenue from Contract with Customer [Abstract]

REVENUE

Revenue from Contracts with Customers

The Company’s sources of revenue include (i) sales of EXPAREL in the U.S.; (ii) sales of its bupivacaine liposome injectable suspension product for use in animal health indications in the U.S.; (iii) royalties based on sales of its bupivacaine liposome injectable suspension product for use in animal health indications and (iv) license fees and milestone payments. The majority of the Company’s revenue is derived from sales of EXPAREL. The Company does not consider revenue from other product sales, collaborative licensing, milestones and royalties to be material sources of its consolidated revenue. As such, the following disclosure only relates to revenue associated with net EXPAREL product sales.

Net Product Sales

The Company sells EXPAREL through a drop-ship program under which orders are processed through wholesalers based on orders of the product placed by end-users which include hospitals, ambulatory surgery centers and doctors. EXPAREL is delivered directly to the end-user without the wholesaler ever taking physical possession of the product. Product revenue is recognized when control of the promised goods are transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods. EXPAREL revenue is recorded at the time the product is delivered to the end-user.

Revenues from sales of products are recorded net of returns allowances, prompt payment discounts, wholesaler service fees, volume rebates and chargebacks. These reserves are based on estimates of the amounts earned or to be claimed on the related sales. These amounts are treated as variable consideration, estimated and recognized as a reduction of the transaction price at the time of the sale, using the most likely amount method for the gross to net adjustments, except for returns, which is based on the expected value method. The Company includes these estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized for such transaction will not occur, or when the uncertainty associated with the variable consideration is resolved. The calculation of some of these items requires management to make estimates based on sales data, historical return data, contracts and other related information that may become known in the future. The adequacy of these provisions is reviewed on a quarterly basis. The following table provides a summary of activity with respect to the Company’s sales related allowances and accruals for the years ended December 31, 2018, 2017 and 2016 (in thousands):



	Returns Allowances			Prompt Payment Discounts			Wholesaler Service Fees			Volume Rebates and Chargebacks			Total
Balance at December 31, 2015	$	1,733		$	625		$	745		$	797		$	3,900
Provision	694			5,448			4,118			2,611			12,871
Payments/Adjustments	(1,081		)	(5,478		)	(4,128		)	(2,284		)	(12,971		)
Balance at December 31, 2016	1,346			595			735			1,124			3,800
Provision	716			5,806			4,403			4,656			15,581
Payments/Adjustments	(1,241		)	(5,744		)	(4,299		)	(5,084		)	(16,368		)
Balance at December 31, 2017	821			657			839			696			3,013
Provision	680			6,802			5,194			6,645			19,321
Payments/Adjustments	(1,157		)	(6,680		)	(4,866		)	(6,331		)	(19,034		)
Balance at December 31, 2018	$	344		$	779		$	1,167		$	1,010		$	3,300

Accounts Receivable

The majority of accounts receivable arise from product sales and represent amounts due from wholesalers, hospitals, ambulatory surgery centers and doctors. Payment terms generally range from zero to 37 days from the date of the transaction, and accordingly, there is no significant financing component.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. At contract inception, the Company assesses the goods promised in its contracts with customers and identifies a performance obligation for each promise to transfer to the customer a good that is distinct. When identifying individual performance obligations, the Company considers all goods promised in the contract regardless of whether explicitly stated in the customer contract or implied by customary business practices. The Company’s contracts with customers require it to transfer an individual distinct product, which represents a single performance obligation. The Company’s performance obligation with respect to its product sales are satisfied at a point in time, which transfers control upon delivery of EXPAREL to its customers. The Company considers control to have transferred upon delivery because the customer has legal title to the asset, physical possession of the asset has been transferred, the customer has significant risks and rewards of ownership of the asset, and the Company has a present right to payment at that time.

Disaggregated Revenue

The following table represents disaggregated net product sales in the periods presented (in thousands):



	Year Ended December 31,
	2018		2017		2016
Net product sales:
EXPAREL	$	331,112	$	282,905	$	265,802
Other product sales	1,315		1,437		4,271
Total net product sales	$	332,427	$	284,342	$	270,073

INVENTORIES

12 Months Ended

Dec. 31, 2018

Inventory Disclosure [Abstract]

INVENTORIES

The components of inventories, net are as follows (in thousands):



	December 31,
	2018		2017
Raw materials	$	19,193	$	16,500
Work-in-process	9,711		8,371
Finished goods	19,665		16,540
Total	$	48,569	$	41,411

The Company is required to perform ongoing stability testing on select lots of EXPAREL at various time intervals. In October 2016, as part of its ongoing stability testing, the Company identified that a single batch of EXPAREL, which was manufactured in early 2016, did not meet the required specification. An internal investigation tied this unexpected result to a modification in the manufacturing process that existed when this product was made, which has subsequently been corrected. The Company reserved all impacted inventory on hand and recorded a $20.7 million charge to cost of goods sold in 2016 related to this matter.

FIXED ASSETS

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

FIXED ASSETS

Fixed assets, net, summarized by major category, consist of the following (in thousands):



	December 31,
	2018			2017
Machinery and laboratory equipment	$	67,431		$	39,002
Leasehold improvements	57,955			34,933
Computer equipment and software	8,131			7,086
Office furniture and equipment	1,548			1,603
Construction in progress	35,163			73,632
Total	170,228			156,256
Less: accumulated depreciation	(61,558		)	(49,210		)
Fixed assets, net	$	108,670		$	107,046

Depreciation expense for the years ended December 31, 2018, 2017 and 2016 was $13.2 million, $13.8 million and $12.8 million, respectively. During the years ended December 31, 2018, 2017 and 2016, the Company capitalized interest of $0.7 million, $1.1 million and $1.5 million, respectively.

As of December 31, 2018 and 2017, total fixed assets, net, includes leasehold improvements and manufacturing process equipment located in England in the amount of $64.6 million and $59.8 million, respectively.

As of December 31, 2018 and 2017, the Company had AROs of $2.2 million and $1.5 million, respectively, included in other liabilities on its consolidated balance sheet, for costs associated with returning leased space to its original condition upon the termination of certain lease agreements. The increase in 2018 related to a $0.4 million revision in estimated future cash flows related to the AROs and $0.1 million of accretion expense.

GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

GOODWILL

In March 2007, the Company acquired from SkyePharma Holding, Inc. (now a subsidiary of Vectura Group plc), or Skyepharma, its California operating subsidiary (Pacira California), referred to herein as the Skyepharma Acquisition. The Company’s goodwill arose in April 2012 from a contingent milestone payment to Skyepharma in connection with the Skyepharma Acquisition. The Skyepharma Acquisition was accounted for under Statement of Financial Accounting Standards 141, Accounting for Business Combinations, which was the effective GAAP standard at the Skyepharma Acquisition date. In connection with the Skyepharma Acquisition, the Company agreed to milestone payments for DepoBupivacaine products, including EXPAREL, as follows:


(i)	$10.0 million upon the first commercial sale in the U.S. (met April 2012);


(ii)	$4.0 million upon the first commercial sale in a major E.U. country (United Kingdom, France, Germany, Italy and Spain);


(iii)	$8.0 million when annual net sales collected reach $100.0 million (met September 2014);


(iv)	$8.0 million when annual net sales collected reach $250.0 million (met June 2016); and


(v)	$32.0 million when annual net sales collected reach $500.0 million.

For purposes of meeting future potential milestone payments, annual net sales are measured on a rolling quarterly basis.

As part of the Skyepharma Acquisition, the Company agreed to pay certain earn-out payments based on a percentage of net sales of DepoBupivacaine products collected, including EXPAREL, for the term during which such sales were covered by a valid claim in certain patent rights related to EXPAREL and other biologics products. The last patents during which a valid claim existed expired on September 18, 2018 and thus, the only remaining obligations to Skyepharma are the two unmet milestone payments totaling $36.0 million. Any remaining milestone payments will be treated as additional costs of the Skyepharma Acquisition and, therefore, recorded as goodwill if and when each contingency is resolved.

The Company recorded goodwill related to contingent payments due under the Skyepharma Acquisition during the years ended December 31, 2018 and 2017, which are not deductible for income tax purposes.

The change in the carrying value of goodwill is summarized as follows (in thousands):



	Carrying Value
Balance at December 31, 2016	$	46,737
Percentage payments on collections of net sales of DepoBupivacaine products, including EXPAREL	8,460
Balance at December 31, 2017	55,197
Percentage payments on collections of net sales of DepoBupivacaine products, including EXPAREL	6,843
Balance at December 31, 2018	$	62,040

ACCRUED EXPENSES

12 Months Ended

Dec. 31, 2018

Payables and Accruals [Abstract]

ACCRUED EXPENSES

Accrued expenses consist of the following (in thousands):



	December 31,
	2018		2017
Accrued operating expenses	$	23,019	$	20,646
Compensation and benefits	16,974		12,295
Accrued royalties	2,286		4,091
Accrued interest	2,053		2,053
Product returns, rebates and other fees	1,533		1,972
Total	$	45,865	$	41,057

DEBT

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

DEBT

Convertible Senior Notes Due 2022

On March 13, 2017, the Company completed a private placement of $345.0 million in aggregate principal amount of 2.375% convertible senior notes due 2022, or 2022 Notes, and entered into an indenture, or 2022 Indenture, with respect to the 2022 Notes. The 2022 Notes accrue interest at a fixed rate of 2.375% per year, payable semiannually in arrears on April 1 and October 1 of each year. The 2022 Notes mature on April 1, 2022.

The total debt composition of the 2022 Notes is as follows (in thousands):



	December 31,
	2018			2017
2.375% convertible senior notes due 2022	$	345,000		$	345,000
Deferred financing costs	(5,850		)	(7,482		)
Discount on debt	(48,558		)	(61,345		)
Total debt, net of debt discount and deferred financing costs	$	290,592		$	276,173

The net proceeds from the issuance of the 2022 Notes were $334.0 million, after deducting commissions and the offering expenses paid by the Company. A portion of the net proceeds from the 2022 Notes were used by the Company to repurchase the majority of its then-outstanding convertible senior notes due 2019 in privately-negotiated transactions.

Holders may convert the 2022 Notes at any time prior to the close of business on the business day immediately preceding October 1, 2021, only under the following circumstances:

(i) during any calendar quarter commencing after June 30, 2017 (and only during such calendar quarter), if the last reported sale price of the Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than 130% of the conversion price on each applicable trading day;

(ii) during the five business-day period immediately after any five consecutive trading-day period (the ‘‘measurement period’’) in which the trading price (as defined in the 2022 Indenture) per $1,000 principal amount of the 2022 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s common stock and the conversion rate on each such trading day;

(iii) upon the occurrence of specified corporate events, including a merger or a sale of all or substantially all of the Company’s assets; or

(iv) if the Company calls the 2022 Notes for redemption, until the close of business on the business day immediately preceding the redemption date.

On or after October 1, 2021, until the close of business on the second scheduled trading day immediately preceding April 1, 2022, holders may convert their 2022 Notes at any time.

Upon conversion, holders will receive the principal amount of their 2022 Notes and any excess conversion value, calculated based on the per share volume-weighted average price for each of the 40 consecutive trading days during the observation period (as more fully described in the 2022 Indenture). For both the principal and excess conversion value, holders may receive cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s option. The initial conversion rate for the 2022 Notes is 14.9491 shares of common stock per $1,000 principal amount, which is equivalent to an initial conversion price of $66.89 per share of the Company’s common stock. The conversion rate will be subject to adjustment in some events but will not be adjusted for any accrued and unpaid interest. The initial conversion price of the 2022 Notes represents a premium of approximately 37.5% to the closing sale price of $48.65 per share of the Company’s common stock on the NASDAQ Global Select Market on March 7, 2017, the date that the Company priced the private offering of the 2022 Notes.

As of December 31, 2018, the 2022 Notes had a market price of $998 per $1,000 principal amount. In the event of conversion, holders would forgo all future interest payments, any unpaid accrued interest and the possibility of stock price appreciation. Upon the receipt of conversion requests, the settlement of the 2022 Notes will be paid pursuant to the terms of the 2022 Indenture. In the event that all of the 2022 Notes are converted, the Company would be required to repay the $345.0 million in principal value and any conversion premium in any combination of cash and shares of its common stock (at the Company’s option).

Prior to April 1, 2020, the Company may not redeem the 2022 Notes. On or after April 1, 2020, the Company may redeem for cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s option, all or part of the 2022 Notes if the last reported sale price (as defined in the 2022 Indenture) of the Company’s common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading-day period ending within five trading days prior to the date on which the Company provides notice of redemption. The redemption price will equal the sum of (i) 100% of the principal amount of the 2022 Notes being redeemed, plus (ii) accrued and unpaid interest, including additional interest, if any, to, but excluding, the redemption date. In addition, calling the 2022 Notes for redemption will constitute a “make whole fundamental change” (as defined in the 2022 Indenture) and will, in certain circumstances, increase the conversion rate applicable to the conversion of such notes if it is converted in connection with the redemption. No sinking fund is provided for the 2022 Notes.

If the Company undergoes a fundamental change, as defined in the 2022 Indenture, subject to certain conditions, holders of the 2022 Notes may require the Company to repurchase for cash all or part of their 2022 Notes at a repurchase price equal to 100% of the principal amount of the 2022 Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, if a ‘‘make-whole fundamental change’’ (as defined in the 2022 Indenture) occurs prior to April 1, 2022, the Company will, in certain circumstances, increase the conversion rate for a holder who elects to convert its notes in connection with the make-whole fundamental change.

The 2022 Notes are the Company’s general unsecured obligations that rank senior in right of payment to all of its indebtedness that is expressly subordinated in right of payment to the 2022 Notes, and equal in right of payment to the Company’s unsecured indebtedness. The 2022 Notes are also effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness, and are structurally subordinated to any debt or other liabilities (including trade payables) of the Company’s subsidiaries.

While the 2022 Notes are currently classified on the Company’s consolidated balance sheet at December 31, 2018 as long-term debt, the future convertibility and resulting balance sheet classification of this liability will be monitored at each quarterly reporting date and will be analyzed dependent upon market prices of the Company’s common stock during the prescribed measurement periods. In the event that the holders of the 2022 Notes have the right to convert the 2022 Notes at any time during the prescribed measurement period, the 2022 Notes would then be considered a current obligation and classified as such.

Under ASC 470-20, Debt with Conversion and Other Options, an entity must separately account for the liability and equity components of convertible debt instruments (such as the 2022 Notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. The liability component of the instrument is valued in a manner that reflects the market interest rate for a similar nonconvertible instrument at the date of issuance. The initial carrying value of the liability component of $274.1 million was calculated using a 7.45% assumed borrowing rate. The equity component of $70.9 million, representing the conversion option, was determined by deducting the fair value of the liability component from the par value of the 2022 Notes and was recorded in additional paid-in capital on the consolidated balance sheet at the issuance date. That equity component is treated as a discount on the liability component of the 2022 Notes, which is amortized over the five-year term of the 2022 Notes using the effective interest rate method. The equity component is not re-measured as long as it continues to meet the conditions for equity classification.

The Company allocated the total transaction costs of $11.0 million related to the issuance of the 2022 Notes to the liability and equity components of the 2022 Notes based on their relative values. Transaction costs attributable to the liability component are amortized to interest expense over the five-year term of the 2022 Notes, and transaction costs attributable to the equity component are netted with the equity component in stockholders’ equity.

The 2022 Notes do not contain any financial or operating covenants or any restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by the Company. The 2022 Indenture contains customary events of default with respect to the 2022 Notes, including that upon certain events of default, 100% of the principal and accrued and unpaid interest on the 2022 Notes will automatically become due and payable.

Convertible Senior Notes Due 2019

On January 23, 2013, the Company completed a private placement of $120.0 million in aggregate principal amount of

3.25% convertible senior notes due 2019, or 2019 Notes. The 2019 Notes accrued interest at a fixed rate of 3.25% per year, payable semiannually in arrears on February 1 and August 1 of each year. In 2017, the Company used part of the net proceeds from the issuance of the 2022 Notes discussed above to repurchase $118.2 million aggregate principal of the 2019 Notes in cash and the issuance of approximately 2.5 million shares of common stock in privately-negotiated transactions. The partial repurchase of the 2019 Notes resulted in a $3.7 million loss on early extinguishment of debt. At both December 31, 2018 and 2017, the principal outstanding on the 2019 Notes was $338 thousand, which was paid in full upon maturity on February 1, 2019. As of February 1, 2019, no amounts under the 2019 Notes remained outstanding.

Interest Expense

The following table sets forth the total interest expense recognized in the periods presented (dollar amounts in thousands):



	Year Ended December 31,
	2018			2017			2016
Contractual interest expense	$	8,205		$	7,344		$	3,852
Amortization of debt issuance costs	1,634			1,381			612
Amortization of debt discount	12,799			10,423			4,088
Capitalized interest and other (Note 6)	(689		)	(1,101		)	(1,491		)
Total	$	21,949		$	18,047		$	7,061

Effective interest rate on convertible senior notes	7.81		%	7.77		%	7.22		%

FINANCIAL INSTRUMENTS

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

FINANCIAL INSTRUMENTS

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or be paid to transfer a liability in the principal or most advantageous market in an orderly transaction. To increase consistency and comparability in fair value measurements, the FASB established a three-level hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The three levels of fair value measurements are:


•	Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.


•	Level 2: Observable prices that are based on inputs not quoted on active markets, but corroborated by market data.


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

The carrying value of financial instruments including cash and cash equivalents, accounts receivable and accounts payable approximate their respective fair values due to the short-term nature of these items. The fair value of the Company’s convertible senior notes at December 31, 2018 are calculated utilizing market quotations from an over-the-counter trading market for these notes (Level 2). The carrying amount and fair value of the Company’s convertible senior notes are as follows (in thousands):



Financial Liabilities Carried at Historical Cost	Carrying Value		Fair Value Measurements Using
December 31, 2018	Carrying Value		Level 1		Level 2		Level 3
2.375% convertible senior notes due 2022 ⁽¹⁾	$	290,592	$	—	$	344,353	$	—
3.25% convertible senior notes due 2019 ⁽²⁾	$	338	$	—	$	586	$	—

(1) The closing price of the Company’s common stock was $43.02 per share at December 31, 2018 compared to a conversion price of $66.89 per share. Currently, the conversion price is above the stock price. The maximum conversion premium that can be due on the 2022 Notes is approximately 5.2 million shares of the Company’s common stock, which assumes no increases in the conversion rate for certain corporate events.

(2) The closing price of the Company’s common stock was $43.02 per share at December 31, 2018 compared to a conversion price of $24.82 per share which, if converted, would have resulted in an approximate conversion premium of fewer than 10,000 shares of the Company’s common stock or $0.2 million of cash. The maximum conversion premium that can be due on the 2019 Notes is approximately 10,000 shares of the Company’s common stock, which assumes no increases in the conversion rate for certain corporate events. On February 1, 2019, the 2019 Notes were paid in full upon maturity.

Short-term investments consist of asset-backed securities collateralized by credit card receivables, investment grade commercial paper and corporate bonds with maturities greater than three months, but less than one year. Long-term investments consist of asset-backed securities collateralized by credit card receivables and corporate bonds with maturities greater than one year. Net unrealized gains or losses from the Company’s short-term and long-term investments are reported in other comprehensive income (loss). At December 31, 2018, all of the Company’s short-term investments are classified as available for sale investments and are determined to be Level 2 instruments, which are measured at fair value using standard industry models with observable inputs. The fair value of the commercial paper is measured based on a standard industry model that uses the three-month U.S. Treasury bill rate as an observable input. The fair value of the asset-backed securities and corporate bonds is principally measured or corroborated by trade data for identical issues in which related trading activity is not sufficiently frequent to be considered a Level 1 input or that of comparable securities. At December 31, 2018, all short-term and long-term investments were rated A or better by Standard & Poor’s.

The following summarizes the Company’s investments at December 31, 2018 and 2017 (in thousands):



December 31, 2018 Investments:	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value (Level 2)
Short-term:
Asset-backed securities	$	34,873	$	—	$	(33	)	$	34,840
Commercial paper	45,035		—		(30		)	45,005
Corporate bonds	171,289		—		(206		)	171,083
Subtotal	251,197		—		(269		)	250,928
Long-term:
Asset-backed securities	9,383		5		—			9,388
Corporate bonds	16,499		—		(16		)	16,483
Subtotal	25,882		5		(16		)	25,871
Total	$	277,079	$	5	$	(285	)	$	276,799



December 31, 2017 Investments:	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value (Level 2)
Short-term:
Asset-backed securities	$	28,338	$	—	$	(37	)	$	28,301
Commercial paper	48,999		—		(23		)	48,976
Corporate bonds	180,119		—		(175		)	179,944
Subtotal	257,456		—		(235		)	257,221
Long-term:
Asset-backed securities	23,836		—		(79		)	23,757
Corporate bonds	36,430		—		(140		)	36,290
Subtotal	60,266		—		(219		)	60,047
Total	$	317,722	$	—	$	(454	)	$	317,268

Certain assets and liabilities are measured at fair value on a nonrecurring basis, including assets and liabilities acquired in a business combination, and long-lived assets, which would be recognized at fair value if deemed to be impaired or if reclassified as assets held for sale. The fair value in these instances would be determined using Level 3 inputs.

TELA Bio, Inc.

In October 2017, the Company made a cash investment of $15.0 million in convertible preferred B shares of TELA Bio, Inc., or TELA Bio, a privately-held surgical reconstruction company that markets its proprietary OviTex^TM portfolio of products for ventral hernia repair and abdominal wall reconstruction. In conjunction with the investment in TELA Bio, the Company acquired an option to purchase an additional $10.0 million of convertible preferred B shares of TELA Bio under the same terms and conditions as existed on the initial purchase date. The investment in TELA Bio and the purchase option were recorded at fair value based on integrated valuation pricing models with the equity investment in the TELA Bio Series B Preferred Stock recorded at $14.1 million and the purchase option recorded in prepaid expenses and other current assets at $0.9 million. The purchase option expired unexercised on September 15, 2018. Accordingly, the Company recorded a loss of $0.9 million on the unexercised purchase option, which was recorded in other (expense) income in the consolidated statement of operations for the year ended December 31, 2018.

Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, short-term investments, long-term investments and accounts receivable. The Company maintains its cash and cash equivalents with high-credit quality financial institutions. Such amounts may exceed federally-insured limits.

As of December 31, 2018, three wholesalers accounted for over 10% of the Company’s accounts receivable: 32%, 32% and 29%, respectively. At December 31, 2017, three wholesalers accounted for over 10% of the Company’s accounts receivable: 35%, 30% and 27%, respectively. Revenues are primarily derived from major wholesalers and pharmaceutical companies which generally have significant cash resources. The Company performs ongoing credit evaluations of its customers as warranted and generally does not require collateral. Allowances for doubtful accounts receivable are maintained based on historical payment patterns, aging of accounts receivable and actual write-off history. As of December 31, 2018 and 2017, no allowances for doubtful accounts were deemed necessary by the Company on its accounts receivable.

STOCKHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2018

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Common Stock

The Company is authorized to issue up to 250,000,000 shares of common stock, of which 41,222,799 and 40,668,877 were issued and outstanding at December 31, 2018 and 2017, respectively.

Preferred Stock

The Company is authorized to issue up to 5,000,000 shares of preferred stock. No preferred stock was issued or outstanding at either December 31, 2018 or 2017.

Accumulated Other Comprehensive Income (Loss)

The following table illustrates the changes in the balances of the Company’s accumulated other comprehensive income (loss) for the periods presented (in thousands):



	Net Unrealized Gains (Losses) From Available For Sale Investments
Balance at December 31, 2016	$	(30	)
Other comprehensive loss before reclassifications	(424		)
Amounts reclassified from accumulated other comprehensive income (loss)	—
Balance at December 31, 2017	(454		)
Other comprehensive income before reclassifications	174
Amounts reclassified from accumulated other comprehensive income (loss)	—
Balance at December 31, 2018	$	(280	)

STOCK PLANS

12 Months Ended

Dec. 31, 2018

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

STOCK PLANS

Stock Incentive Plans

The Company’s amended and restated 2011 stock incentive plan, or 2011 Plan, was originally adopted by its board of directors and approved by its stockholders in June 2014, and amended in June 2016. The 2011 Plan allows the granting of incentive stock options, non-statutory stock options, restricted stock awards and other stock-based awards. Since the adoption of the 2011 Plan, any remaining shares available for issuance under a 2007 stock incentive plan, or 2007 Plan, are automatically reallocated to the 2011 Plan. In April 2014, the Company’s board of directors also adopted the 2014 Inducement Plan.

All of the Company’s stock option grants have an exercise price equal to the closing price of the Company’s common stock on the date of grant, generally have a 10-year contractual term and vest in increments (generally over four years from the date of grant although the Company may occasionally grant options with different vesting terms). The Company also grants RSUs to employees and non-employee directors. The Company uses authorized and unissued shares to satisfy its obligations under these plans.

2014 Employee Stock Purchase Plan

The Company’s 2014 Employee Stock Purchase Plan, or ESPP, was adopted by its board of directors in April 2014 and approved by the Company’s stockholders in June 2014. The purpose of the ESPP is to provide a vehicle for eligible employees to purchase shares of the Company’s common stock at a discounted price and to help retain and motivate current employees as well as attract new talent. Under the ESPP, up to 500,000 shares of common stock may be sold. The plan expires in June 2024. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code. The maximum fair market value of stock which can be purchased by a participant in a calendar year is $25,000. Six-month offering periods begin on January 1 and July 1 of each year. During an offering period, eligible employees have the opportunity to elect to purchase shares of the Company’s common stock on the purchase dates of June 30 and December 31 (or the last trading day of an offering period). The per share purchase price will be equal to the lesser of 85% of the fair market value of the Company’s common stock on either the offering date or the purchase date. During the year ended December 31, 2018, 64,740 shares were purchased and issued under the ESPP.

The following tables contain information about the Company’s stock incentive plans at December 31, 2018:



Stock Incentive Plan	Awards Reserved For Issuance	Awards Issued	Awards Available For Grant
2007 Plan	2,022,837	2,022,837	—
2011 Plan	9,931,700	8,392,572	1,539,128
2014 Inducement Plan	175,000	36,576	138,424
	12,129,537	10,451,985	1,677,552

Employee Stock Purchase Plan	Shares Reserved For Purchase	Shares Purchased	Shares Available For Purchase
2014 ESPP	500,000	224,887	275,113

Stock-Based Compensation

Compensation expense for stock options and RSUs is based on the estimated grant date fair value of options recognized over the requisite service period on a straight-line expense attribution method. This applies to employees and non-employee directors, as well as nonemployees upon the Company’s adoption of ASU 2018-07 in June 2018, which aligned the accounting for share-based payments to nonemployees with that of employees and directors. Subsequent to the adoption of ASU 2018-07, compensation expense for options and RSUs granted to nonemployees are measured at the estimated grant date fair value and are no longer required to be revalued at each reporting period until vested. For more information on the Company’s adoption of ASU 2018-07, refer to Note 3, Recent Accounting Pronouncements. Compensation expense for ESPP share options is based on the estimated grant date fair value of the ESPP shares and the grant date number of shares that can be purchased, which is recognized as expense over the length of an offering period.

The Company recognized stock-based compensation expense in its consolidated statements of operations for the years ended December 31, 2018, 2017 and 2016 as follows (in thousands):



	Year Ended December 31,
	2018		2017		2016
Cost of goods sold	$	4,478	$	5,467	$	6,438
Research and development	3,934		3,341		3,297
Selling, general and administrative	23,313		22,793		21,513
Total	$	31,725	$	31,601	$	31,248

Stock-based compensation from:
Stock options (employee awards)	$	21,980	$	24,056	$	24,505
Stock options (consultant awards)	663		167		841
RSUs	8,371		6,698		5,117
ESPP	711		680		785
Total	$	31,725	$	31,601	$	31,248

The following table summarizes the Company’s stock option activity and related information for the period from December 31, 2015 to December 31, 2018:



	Number of Options		Weighted Average Exercise Price (Per Share)		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in Thousands)
Outstanding at December 31, 2015	4,645,722		$	44.03	7.31	$	162,340
Granted	1,656,598		38.20
Exercised	(518,226	)	11.13			$	21,750
Forfeited	(401,048	)	70.27
Expired	(175,303	)	80.91
Outstanding at December 31, 2016	5,207,743		42.16		7.39	$	37,581
Granted	1,072,625		43.93
Exercised	(539,989	)	12.55			$	15,865
Forfeited	(555,897	)	48.66
Expired	(232,989	)	74.65
Outstanding at December 31, 2017	4,951,493		43.51		6.91	$	57,021
Granted	1,994,332		39.35
Exercised	(332,732	)	21.55			$	7,418
Forfeited	(481,126	)	42.30
Expired	(409,149	)	68.01
Outstanding at December 31, 2018	5,722,818		$	41.69	7.07	$	49,166
Exercisable at December 31, 2018	3,009,133		$	43.03	5.38	$	37,629
Vested and expected to vest at December 31, 2018	5,722,818		$	41.69	7.07	$	49,166

As of December 31, 2018, $47.5 million of total unrecognized compensation cost related to non-vested stock options is expected to be recognized over a weighted average period of 2.9 years. The Company’s stock options have a maximum expiration date of ten years from the date of grant.

The weighted average fair value of stock options granted for the years ended December 31, 2018, 2017 and 2016 was $19.34, $20.78 and $19.13 per share, respectively. The fair values of stock options granted were estimated using the Black-Scholes model with the following weighted average assumptions:



	Year Ended December 31,
	2018	2017	2016
Expected dividend yield	None	None	None
Risk-free interest rate	2.26% - 3.05%	1.68% - 2.42%	1.03% - 2.48%
Expected volatility	53.3%	51.4%	53.5%
Expected term of options	5.14 years	5.31 years	5.77 years

The following table summarizes the Company’s RSU activity and related information for the period from December 31, 2015 to December 31, 2018:



	Number of Units		Weighted Average Grant Date Fair Value (Per Share)		Aggregate Intrinsic Value (in Thousands)
Unvested at December 31, 2015	216,198		$	78.59	$	16,602
Granted	256,631		40.21
Vested	(61,487	)	78.33
Forfeited	(46,939	)	68.84
Unvested at December 31, 2016	364,403		52.85		$	11,824
Granted	343,583		44.23
Vested	(101,379	)	53.76
Forfeited	(107,061	)	49.98
Unvested at December 31, 2017	499,546		47.32		$	22,804
Granted	331,129		38.36
Vested	(156,450	)	49.59
Forfeited	(96,261	)	43.92
Unvested and expected to vest at December 31, 2018	577,964		$	42.14	$	24,864

As of December 31, 2018, $19.2 million of total unrecognized compensation cost related to non-vested RSUs is expected to be recognized over a weighted average period of 2.8 years. The Company’s RSUs have a maximum vest date of four years from the date of grant. The fair values of RSUs awarded are equal to the closing price of the Company’s common stock on the date of grant.

The fair values of the ESPP share options granted were estimated using the Black-Scholes model with the following weighted average assumptions:



	Year Ended December 31,
	2018	2017	2016
ESPP share option fair value	$10.40 - $13.15	$10.80 - $13.85	$10.57 - $25.28
Expected dividend yield	None	None	None
Risk-free interest rate	1.53% - 2.14%	0.62% - 1.14%	0.37% - 0.49%
Expected volatility	52.2%	53.8%	63.4%
Expected term of ESPP share options	6 months	6 months	6 months

NET INCOME (LOSS) PER SHARE

12 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

EARNINGS PER SHARE

NET INCOME (LOSS) PER SHARE

Potential common shares are excluded from the diluted net income (loss) per share computation to the extent that they would be antidilutive. Because the Company reported a net loss for the years ended December 31, 2018, 2017 and 2016, no potentially dilutive securities have been included in the computation of diluted net loss per share for those periods. As discussed in Note 9, Debt, the Company has the option to pay cash for the aggregate principal amount due upon the conversion of its 2022 Notes. Since it is the Company’s intent to settle the principal amount of its 2022 Notes in cash, the potentially dilutive effect of such notes on net income (loss) per share is computed under the treasury stock method. In 2018, because it was the Company’s intent to settle the conversion premium of its 2019 Notes in cash (as it did upon maturity on February 1, 2019), there was no potentially dilutive effect on the computation of diluted securities.

The following table sets forth the computation of basic and diluted net income (loss) per share for the years ended December 31, 2018, 2017 and 2016 (in thousands, except per share amounts):



	Year Ended December 31,
	2018			2017			2016
Numerator:
Net loss	$	(471	)	$	(42,611	)	$	(37,949	)
Denominator:
Weighted average shares of common stock outstanding	40,911			39,806			37,236
Net loss per share:
Basic and diluted net loss per common share	$	(0.01	)	$	(1.07	)	$	(1.02	)

The following outstanding stock options, RSUs, conversion premiums on the Company’s convertible senior notes, warrants and ESPP purchase options are antidilutive in the periods presented (in thousands):



	Year Ended December 31,
	2018	2017	2016
Weighted average number of stock options	5,492	5,171	4,482
Weighted average number of RSUs	542	449	290
Conversion premium on the 2019 Notes	—	411	2,022
Weighted average number of warrants	—	—	1
Weighted average ESPP purchase options	31	29	21
Total	6,065	6,060	6,816

INCOME TAXES

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

Income (loss) before income taxes and the related tax expense is as follows (in thousands):



	Year Ended December 31,
	2018			2017			2016
Income (loss) before income taxes:
Domestic	$	5,169		$	(39,898	)	$	(36,339	)
Foreign	(5,594		)	(2,573		)	(1,505		)
Total loss before income taxes	$	(425	)	$	(42,471	)	$	(37,844	)

Current taxes:
Federal	$	(96	)	$	—		$	11
State	142			140			94
Total income tax expense	$	46		$	140		$	105

The tax provisions for each of the years ended December 31, 2018, 2017 and 2016 are principally the result of minimum state taxes.

A reconciliation of income taxes at the U.S. federal statutory rate to the provision for income taxes is as follows:



	Year Ended December 31,
	2018		2017		2016
U.S. federal statutory rate	21.00	%	35.00	%	35.00	%
State taxes	(24.84	)%	2.26	%	2.20	%
Foreign taxes	(92.04	)%	(1.28	)%	(0.81	)%
Change in valuation allowance	369.27	%	4.58	%	(43.96	)%
Stock-based compensation	(874.29	)%	(1.21	)%	(0.54	)%
Tax credits	700.35	%	4.96	%	8.77	%
Interest expense	218.47	%	2.90	%	5.75	%
Effect of rate changes	13.44	%	(130.88	)%	(4.65	)%
Convertible senior notes refinancing	—	%	6.55	%	—	%
Effect of the adoption of ASU 2016-09	—	%	68.89	%	—	%
Nondeductible expenses	(132.96	)%	—	%	—	%
Reserves	(202.98	)%	—	%	—	%
Other	(6.15	)%	7.90	%	(2.04	)%
Effective tax rate	(10.73	)%	(0.33	)%	(0.28	)%

The Company’s effective tax rates of (10.73)%, (0.33)% and (0.28)% for the years ended December 31, 2018, 2017 and 2016, respectively, differed from the expected U.S. statutory tax rate of 21.0% (previously 35.0%). This difference was primarily driven by pretax losses for which the Company concluded that a majority of its tax benefits are not more-likely-than-not to be realized, resulting in the recording of a full valuation allowance.

Deferred taxes reflect the tax effects of the differences between the amounts recorded as assets and liabilities for financial reporting purposes and the comparable amounts recorded for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities at December 31, 2018 and 2017 are as follows (in thousands):



	December 31,
	2018			2017
Deferred tax assets:
Net operating loss carry-forwards	$	79,446		$	95,067
Federal and state credits	17,730			15,048
Depreciation and amortization	2,851			2,593
Accruals and reserves	11,009			2,743
Deferred revenue	—			1,841
Stock based compensation	18,302			16,925
Inventory	848			552
Other	127			139
Total deferred tax assets	130,313			134,908
Deferred tax liabilities:
Discount on convertible senior notes	(11,655		)	(14,678		)
Deferred tax assets, net of deferred tax liabilities	118,658			120,230
Less: valuation allowance	(118,658		)	(120,230		)
Net deferred tax assets	$	—		$	—

As of December 31, 2018, the Company’s federal net operating losses, or NOLs, and federal tax credit carryforwards totaled $346.2 million and $12.7 million, respectively. The Company also had state NOLs and state tax credit carryforwards of $159.2 million and $6.3 million, respectively, which are subject to change on an annual basis due to variations in the Company’s annual state apportionment factors. The Company had non-U.S. tax NOLs of $11.4 million at December 31, 2018. The existing federal NOLs will begin expiring in 2027 while the existing state NOLs begin expiring in 2024, if the Company has not used them prior to that time. The non-U.S. NOLs do not expire.

Since the Company had cumulative changes in ownership of more than 50% within a three-year period, under Internal Revenue Code sections 382 and 383, the Company’s ability to use certain net operating loss and credit carryforwards to offset taxable income or tax will be limited. Such ownership changes were triggered by the initial acquisition of the Company’s stock in 2007 as well as cumulative ownership changes arising as a result of the completion of the Company’s initial public offering and other financing transactions. As a result of these ownership changes, the Company estimates that approximately $191.1 million of federal net operating losses are subject to annual limitations. At December 31, 2018, $108.0 million of these federal net operating losses were available. The Company estimates that an additional $10.3 million will come available each year from 2019 through 2022, $3.5 million in 2023, $1.4 million each from 2024-2025 and that the remaining $35.8 million will expire unused. In addition, California and certain states have previously suspended or limited the use of NOL carryforwards for certain taxable years, and certain states are considering similar future measures. As a result, the Company may incur higher state income tax expense in the future.

In accordance with ASC Topic 740, the Company establishes a valuation allowance for deferred tax assets that, in its judgment, are not more-likely-than-not realizable. These judgments are based on projections of future income, including tax-planning strategies, by individual tax jurisdictions. In each reporting period, the Company assesses the likelihood that its deferred tax assets will be realized and determines if adjustments to its valuation allowance is appropriate. The Company had a net reduction in its valuation allowance of $1.6 million and $28.5 million in the years ended December 31, 2018 and 2017, respectively, and a net increase in its valuation allowance of $0.8 million for the year ended December 31, 2016. There is significant doubt regarding the Company’s ability to utilize its net deferred tax assets and, therefore, the Company has recorded a full valuation allowance reducing its net deferred tax assets to zero at both December 31, 2018 and 2017.

In December 2017, new legislation was signed into law reducing the corporate U.S. tax rate from 35% to 21% for tax years beginning after December 31, 2017, fully repealing the corporate alternative minimum tax and making the NOL carryforward period indefinite for NOLs generated after 2017. In accordance with ASC Topic 740, deferred tax assets and liabilities are required to be measured at the enacted tax rate expected to apply when temporary differences are to be realized or settled. As of December 31, 2017, the Company re-measured its deferred tax balances based upon the new 21% tax rate. This resulted in a reduction of $55.7 million in the Company’s deferred tax assets, which was offset by a change in its year-end valuation allowance.

In March 2017, the Company established a deferred tax liability with an offset to additional paid-in capital resulting from the conversion feature of the 2022 Notes. The initial difference between the book value of the convertible debt, issued with a beneficial conversion feature, and its tax basis was $70.9 million, a temporary difference. The net effect of the deferred tax liability recorded to additional paid-in capital was zero because the Company has a full valuation allowance against its net deferred tax assets.

In 2018, the Company recorded a reserve of $0.4 million related to unrecognized tax benefits, or UTBs, which relates to tax positions taken in 2018. The Company’s UTB liability at December 31, 2018 was $2.9 million. The change in the Company’s UTBs in 2018 is summarized as follows (in thousands):



	Unrecognized Tax Benefit
Balance at December 31, 2017	$	2,473
Additions for current year positions	408
Balance at December 31, 2018	$	2,881

The Company regularly assesses the likelihood of additional tax assessments by jurisdiction and, if necessary, adjusts its reserve for UTBs based on new information or developments. Due to the Company’s tax credit carryforwards, the reserve was recorded as a reduction of the Company’s deferred tax assets, and any potential deficiency would not result in a tax liability. Therefore, no interest or penalties were recognized in income tax expense for the years ended December 31, 2018 and 2017. Due to the Company’s full valuation allowance against deferred tax assets, none of the UTBs, if recognized, would affect the effective income tax rate.

The Company estimates that it is not reasonably possible that within the next twelve months, any of the unrecognized tax benefits will significantly increase or decrease. The Company is currently subject to audit by the U.S. Internal Revenue Service, or IRS, for the years 2015 through 2018, and state tax jurisdictions for the years 2014 through 2018. However, the IRS or states may still examine and adjust an NOL arising from a closed year to the extent it is utilized in a year that remains subject to audit. The Company’s previously filed income tax returns are not presently under audit by the IRS or state tax authorities.

OTHER EMPLOYEE BENEFITS	12 Months Ended
OTHER EMPLOYEE BENEFITS	Dec. 31, 2018
Retirement Benefits [Abstract]
OTHER EMPLOYEE BENEFITS	OTHER EMPLOYEE BENEFITS The Company sponsors a 401(k) savings plan. Under this plan, employees may make contributions which are eligible for a discretionary percentage match as defined in the plan and determined by the Company’s board of directors. The Company recognized $1.6 million, $1.3 million and $1.5 million of related compensation expense for the years ended December 31, 2018, 2017 and 2016, respectively.

COMMERCIAL PARTNERS AND OTHER AGREEMENTS

12 Months Ended

Dec. 31, 2018

COMMERCIAL PARTNERS AND OTHER AGREEMENTS

COMMERCIAL PARTNERS AND OTHER AGREEMENTS

DepoCyt(e) Discontinuation

In June 2017, the Company’s board of directors approved a decision to discontinue production of DepoCyt^® (U.S. and Canada) and DepoCyte^® (E.U.) due to persistent technical issues specific to the DepoCyt(e) manufacturing process. As of June 30, 2017, the Company had ceased all production of DepoCyt(e).

In 2017, the Company recorded a non-recurring charge of $5.4 million related to the discontinuation of its DepoCyt(e) manufacturing activities, including $0.5 million for DepoCyt(e) related inventory, which is recorded in cost of goods sold, and $4.9 million was recorded in product discontinuation, including the remaining lease costs less an estimate of potential sublease income for the facility where DepoCyt(e) was manufactured, the write-off of property, plant and equipment, employee severance, asset retirement obligations and other estimated exit costs.

In 2018, the Company recorded a non-recurring charge of $1.6 million related to the discontinuation of its DepoCyt(e) manufacturing activities for lease costs, asset retirement obligations and other estimated exit costs. The charges incurred in 2018 represent additional lease and facility costs due to the fact that the Company does not expect to be able to sub-lease the property considering the short period of time remaining on the Company’s existing lease.

Cash payments related to the lease on the DepoCyt(e) manufacturing facility are expected to continue through the end of the lease term in August 2020.

A summary of the Company’s costs and reserves related to the DepoCyt(e) discontinuation are as follows (in thousands):



	Severance and Related Costs			Lease Costs			Write-Off of Property, Plant & Equipment and Inventory			Asset Retirement Obligations and Other Discontinuation Costs			Total
Balance at December 31, 2016	$	—		$	—		$	—		$	—		$	—
Charges incurred	303			2,018			2,470			656			5,447
Cash payments made	(303		)	(744		)	—			(420		)	(1,467		)
Disposal of property, plant & equipment and inventory	—			—			(2,470		)	—			(2,470		)
Balance sheet reclassifications	—			494			—			73			567
Balance at December 31, 2017	—			1,768			—			309			2,077
Charges incurred	—			1,513			—			51			1,564
Cash payments made	—			(1,311		)	—			(91		)	(1,402		)
Balance sheet reclassifications	—			—			—			13			13
Balance at December 31, 2018	$	—		$	1,970		$	—		$	282		$	2,252

Prior to the discontinuation, the Company received a fixed payment for the supply of DepoCyt(e) and double-digit royalties, net of supply price, on the sales of DepoCyt by Leadiant Bioscience, Ltd. in the U.S. and Canada, and on the sales of DepoCyte by Mundipharma International Corporation Limited, or Mundipharma, in the E.U. and other European countries. In addition, the Company also received a non-refundable upfront payment of $8.0 million in connection with a 15 year extension and concurrent expansion of the territories where Mundipharma can market and distribute DepoCyte. In April 2018, the Company received formal notice of the termination of the supply and distribution agreements (and all related agreements) from Mundipharma and its affiliates. The Company may be required to make additional payments or incur additional costs relating to the DepoCyt(e) discontinuation which could be material to the Company’s results of operations and/or cash flows in a given period.

Commercial Partners

Thermo Fisher Scientific Pharma Services (Formerly Patheon UK Limited)

In April 2014, the Company and Thermo Fisher Scientific Pharma Services (formerly Patheon UK Limited), or Thermo Fisher, entered into a Strategic Co-Production Agreement, a Technical Transfer and Service Agreement and a Manufacturing and Supply Agreement to collaborate in the manufacture of EXPAREL. Under the terms of the Technical Transfer and Service Agreement, Thermo Fisher agreed to undertake certain technical transfer activities and construction services needed to prepare its Swindon, England facility for the manufacture of EXPAREL in two dedicated manufacturing suites. The Company contracted to purchase EXPAREL from Thermo Fisher, beginning with FDA approval of the suites, which occurred in May 2018. Commercial production began in February 2019. Under these agreements, the Company makes monthly base fee payments to Thermo Fisher. Unless earlier terminated by giving notice of up to three years (other than termination by the Company in the event of a material breach by Thermo Fisher), this agreement will expire in May 2028.

DePuy Synthes Sales, Inc.

In January 2017, the Company announced the initiation of a Co-Promotion Agreement, or the Agreement, with DePuy

Synthes Sales, Inc., or DePuy Synthes, part of the Johnson & Johnson family of companies, to market and promote the use of

EXPAREL for orthopedic procedures in the U.S. DePuy Synthes field representatives, specializing in joint reconstruction, spine, sports medicine and trauma, collaborate with and supplement the Company’s field teams by expanding the reach and frequency of EXPAREL education in the hospital surgical suite and ambulatory surgery center settings.

Under the five-year arrangement, DePuy Synthes is the exclusive third-party distributor during the term of the Agreement to promote and sell EXPAREL for operating room use for orthopedic and spine surgeries (including knee, hip, shoulder, sports and trauma surgeries) in the U.S. DePuy Synthes receives a tiered commission ranging from low single-digits to double-digits on sales of EXPAREL under the Agreement, subject to conditions, limitations and adjustments. The initial term of the Agreement commenced on January 24, 2017 and ends on December 31, 2021, with the option to extend the Agreement in additional 12-month increments upon mutual agreement of the parties, subject to certain conditions.

The Company and DePuy Synthes have mutual termination rights under the Agreement, subject to certain terms, conditions and advance notice requirements, provided that the Company or DePuy Synthes generally may not terminate the Agreement, without cause, within three years of the effective date of the Agreement. The Company also has additional unilateral termination rights under certain circumstances. The Agreement contains customary representations, warranties, covenants and confidentiality provisions, as well as mutual indemnification obligations. DePuy Synthes is also subject to certain obligations and restrictions, including required compliance with certain laws and regulations and the Company’s policies, in connection with fulfilling their obligations under the Agreement.

Aratana Therapeutics, Inc.

On December 5, 2012, the Company entered into a worldwide license, development and commercialization agreement with Aratana Therapeutics, Inc., or Aratana. Under the agreement, the Company granted Aratana an exclusive royalty-bearing license, including the limited right to grant sublicenses, for the development and commercialization of the Company’s bupivacaine liposome injectable suspension product for use in animals. Under the agreement, Aratana developed and obtained FDA approval for the use of the product in veterinary surgery to manage postsurgical pain. In connection with its entry into the license agreement, the Company received a one-time payment of $1.0 million. In December 2013, the Company received a $0.5 million milestone payment under the agreement. In June 2016, the Company recorded $1.0 million in milestone revenue for Aratana’s filing of an FDA Administrative New Animal Drug Application, or ANADA, and in August 2016 recorded $1.0 million related to the FDA’s approval of the ANADA. The Company is eligible to receive up to an additional aggregate $40.0 million upon the achievement of commercial milestones. Aratana is required to pay the Company a tiered double digit royalty on net sales made in the U.S. If the product is approved by foreign regulatory agencies for sale outside of the U.S., Aratana will be required to pay the Company a tiered double digit royalty on such net sales. Royalty rates will be reduced by a certain percentage upon the entry of a generic competitor for animal health indications into a jurisdiction or if Aratana must pay royalties to third parties under certain circumstances. Unless terminated earlier pursuant to its terms, the license agreement is effective until December 2027, after which Aratana has the option to extend the agreement for an additional five-year term, subject to certain requirements.

Aratana began purchasing bupivacaine liposome injectable suspension product in 2016, which they market under the trade name NOCITA^® (a registered trademark of Aratana Therapeutics, Inc.) to serve animals.

CrossLink BioScience, LLC

In October 2013, the Company and CrossLink BioScience, LLC, or CrossLink, commenced a five-year arrangement for the promotion and sale of EXPAREL, pursuant to the terms of a Master Distributor Agreement. On June 30, 2016, the Company provided notice to CrossLink electing to terminate this agreement effective September 30, 2016. In connection with the termination of the agreement, the Company recorded a $7.1 million charge to selling, general and administrative expense in its consolidated statement of operations. There was nothing payable to CrossLink at December 31, 2018. $2.4 million was classified in accrued expenses at December 31, 2017.

Nuance Biotech Co. Ltd.

In June 2018, the Company entered into an agreement with Nuance Biotech Co. Ltd., or Nuance, a China-based specialty pharmaceutical company, to advance the development and commercialization of EXPAREL in China. Under the terms of the agreement, the Company agreed to be the sole supplier of EXPAREL to Nuance and has granted Nuance the exclusive rights to develop and commercialize EXPAREL in China. In June 2018, the Company recognized an upfront payment of $3.0 million since collaborative licensing revenue is recognized at the point in time when the license is provided and is not expected to substantively change. This payment was received in July 2018 and the Company is eligible to receive future milestone payments of up to $60.0 million that are triggered by filing for and securing regulatory approval(s) and annual sales in China exceeding certain levels. The Company is also entitled to tiered royalties as a percentage of net sales.

RELATED PARTY TRANSACTIONS	12 Months Ended
RELATED PARTY TRANSACTIONS	Dec. 31, 2018
Related Party Transactions [Abstract]
RELATED PARTY TRANSACTIONS	RELATED PARTY TRANSACTIONS The Company’s former Chief Medical Officer, Dr. Gary Patou, is a partner of MPM Asset Management LLC, or MPM, an investor in the Company. The Company incurred no consulting expenses with MPM or Dr. Patou in the years ended December 31, 2018 and 2017, and expenses of $0.1 million for the year ended December 31, 2016. At both December 31, 2018 and 2017, there were no amounts payable to MPM. The Company’s agreement with MPM expired on December 31, 2015, and the Company contracted with Dr. Patou directly for his services for the first six months of 2016. In December 2012, the Company entered into a worldwide license, development and commercialization agreement with Aratana as discussed in Note 16, Commercial Partners and Other Agreements. MPM and its affiliates are holders of capital stock of Aratana. David Stack, the Company’s Chief Executive Officer and Chairman, was a managing director at MPM from 2005 through March 2017. In April 2012, the Company entered into a consulting agreement with Dr. Gary Pace, a director of the Company. The Company recorded no expense under the consulting agreement in the years ended December 31, 2018 and 2017 and expenses of less than $0.1 million for the year ended December 31, 2016. In connection with the consulting agreement, Dr. Pace received an option to purchase 20,000 shares of common stock at an exercise price of $11.02 per share and an option to purchase 70,000 shares of common stock at an exercise price of $16.67 per share. At December 31, 2018 and 2017, there was nothing payable to Dr. Pace for consulting services.

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

Leases

The Company leases its EXPAREL manufacturing, research and development, warehouse and DepoCyt(e) facilities in San Diego, California, and its corporate headquarters in Parsippany, New Jersey. Many of these leases provide renewal options at the then-current market value. In addition, the Company has a lease for the use of Thermo Fisher’s facility in Swindon, England embedded in the Thermo Fisher agreements and a portion of the monthly base fee has been allocated to the lease component based on a relative fair value basis.

As of December 31, 2018, aggregate annual minimum payments due under the Company’s lease obligations are as follows (in thousands):



Year	Aggregate Minimum Payments Due
2019	$	8,140
2020	7,621
2021	5,295
2022	5,417
2023	5,543
2024 through 2028	14,329
Total	$	46,345

Total rent expense, net of amortization of unfavorable lease obligations and tenant improvements, under all operating leases for the years ended December 31, 2018, 2017 and 2016 was $7.2 million, $7.5 million and $6.0 million, respectively. Deferred rent was $6.9 million at December 31, 2018 and $6.8 million at December 31, 2017.

Litigation

From time to time, the Company has been and may again become involved in legal proceedings arising in the ordinary course of its business, including those related to patents, product liability and government investigations. Except as described below, the Company is not presently a party to any legal proceedings which it believes to be material, and is not aware of any pending or threatened litigation against the Company which it believes could have a material adverse effect on its business, operating results, financial condition or cash flows.

In April 2015, the Company received a subpoena from the U.S. Department of Justice, U.S. Attorney’s Office for the District of New Jersey, requiring the production of a broad range of documents pertaining to marketing and promotional practices related to EXPAREL. The Company is cooperating with the government’s inquiry. The Company can make no assurances as to the time or resources that will need to be devoted to this inquiry or the impact, if any, of this inquiry or any proceedings on its business, financial condition, results of operations and cash flows.

Purchase Obligations

The Company has approximately $24.5 million of minimum, non-cancelable contractual commitments for contract manufacturing services as of December 31, 2018.

Other Commitments and Contingencies

The FDA, as a condition of EXPAREL approval, has required the Company to study EXPAREL in pediatric patients. The Company was granted a deferral for the required pediatric trials in all age groups for EXPAREL in the setting of wound infiltration and plans to conduct these pediatric trials as a post-marketing requirement, which was stated in the New Drug Application (NDA) approval letter for EXPAREL. The Company recently began activating a study site for an extended pharmacokinetic and safety study for local analgesia in children aged 6 to 17 undergoing cardiovascular or spine surgeries and is working with the FDA to define a program to study the administration of EXPAREL as a nerve block in the pediatric setting.

In addition to the initial $19.6 million purchase price for the Skyepharma Acquisition, the Company entered into an earn-out agreement with Skyepharma based on the Company reaching certain revenue milestones following the Skyepharma Acquisition. Pursuant to this agreement, the Company is required to pay Skyepharma milestone payments up to an aggregate of $62.0 million, of which $36.0 million are for milestones not yet met. The Company also agreed to pay certain earn-out payments based on a percentage of net sales of DepoBupivacaine products collected, including EXPAREL, for the term during which such sales were covered by a valid claim in certain patent rights related to EXPAREL and other biologics products. The last patents during which a valid claim existed expired on September 18, 2018. Refer to Note 7, Goodwill, for further discussion.

Pursuant to an agreement with the Research Development Foundation, or RDF, the Company is required to pay RDF a low single-digit royalty on the collection of revenues from its DepoFoam-based products, for as long as certain patents assigned to the Company under the agreement remain valid. RDF has the right to terminate the agreement for an uncured material breach by the Company, in connection with its bankruptcy or insolvency or if it directly or indirectly opposes or disputes the validity of the assigned patent rights.

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

The following tables present selected quarterly financial data for the years ended December 31, 2018 and 2017 (in thousands, except per share amounts):



	Three Months Ended
	March 31, 2018			June 30, 2018		September 30, 2018			December 31, 2018
Total revenues	$	74,607		$	84,107	$	83,448		$	95,115
Cost of goods sold	22,885			20,916		19,065			23,979
Total operating expenses	81,544			77,566		79,400			82,852
Net income (loss)	(10,680		)	2,564		(640		)	8,285
Basic and diluted net income (loss) per common share	$	(0.26	)	$	0.06	$	(0.02	)	$	0.20



	Three Months Ended
	March 31, 2017			June 30, 2017			September 30, 2017			December 31, 2017
Total revenues	$	69,283		$	70,934		$	67,335		$	79,078
Cost of goods sold	24,581			23,811			18,228			21,295
Total operating expenses	83,333			86,714			70,907			70,613
Net income (loss)	(19,866		)	(19,743		)	(7,597		)	4,595
Basic and diluted net income (loss) per common share	$	(0.52	)	$	(0.49	)	$	(0.19	)	$	0.11

For periods where the Company reported a net loss, no potentially dilutive securities were included in the computation of diluted net loss per share.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Use of Estimates

Revenue Recognition

Revenue From Contracts With Customers

Collaborative Licensing and Milestone Revenue

Royalty Revenue

Concentration of Major Customers



	Year Ended December 31,
	2018		2017		2016
Largest wholesaler	34	%	35	%	32	%
Second largest wholesaler	30	%	30	%	28	%
Third largest wholesaler	26	%	26	%	26	%
Total	90	%	91	%	86	%

Research and Development Expenses

Income Taxes

Stock-Based Compensation


•	Expected term of the option


•	Expected volatility


•	Expected dividends


•	Risk-free interest rate

Cash and Cash Equivalents

All highly-liquid investments with maturities of 90 days or less when purchased are considered cash equivalents.

Short-Term Investments

Short-Term and Long-Term Investments

Inventories

Fixed Assets



Asset Category		Useful Life
Computer equipment and software		1 to 3 years
Office furniture and equipment		5 years
Manufacturing and laboratory equipment		5 to 10 years

Asset Retirement Obligations

Goodwill

Equity Investments

Impairment of Long-Lived Assets

Convertible Debt Transactions

Per Share Data

Segment Reporting

The Company operates in one reportable segment and, accordingly, no segment disclosures have been presented.

Recent Accounting Pronouncements

RECENT ACCOUNTING PRONOUNCEMENTS

Recently Adopted Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers, and subsequently issued a number of amendments to this update. The new standard, as amended in Accounting Standards Codification, or ASC, 606, provides a single comprehensive model to be used in accounting for revenue arising from contracts with customers and supersedes previously applicable revenue recognition guidance, ASC 605. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

The Company adopted this standard on January 1, 2018 using the modified retrospective method and recorded a cumulative effect adjustment of $1.4 million to accumulated deficit upon adoption—the impact related to the acceleration of $1.0 million of deferred revenue and $0.4 million of royalties. Under the modified retrospective method of adoption, the comparative information in the consolidated financial statements has not been revised and continues to be reported under ASC 605. The implementation of ASC 606 did not have a material impact on the Company’s consolidated statements of operations because the timing of revenue recognition for EXPAREL product sales did not change. The Company is recognizing existing collaborative licensing, milestone and royalty revenue earlier than it would have under the previous standard, subject to the variable consideration constraints. If ASC 605 had been applied to the year ended December 31, 2018, deferred revenue would have been $0.9 million higher on the consolidated balance sheet, with $0.1 million in current portion of deferred revenue and $0.8 million in other liabilities. Under ASC 605, royalty revenue for the year ended December 31, 2018 would have been lower by $0.4 million and the related royalty receivable as of December 31, 2018 would have been lower by $0.7 million.

For additional information regarding the Company’s revenue, see Note 4, Revenue.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ASU 2016-01 changes accounting for equity investments and presentation and disclosure requirements for financial instruments. ASU 2016-01 does not apply to equity investments in consolidated subsidiaries or those accounted for under the equity method of accounting. Equity investments with readily determinable fair values will be measured at fair value with changes in fair value recognized in net income (loss). Entities have the option to measure equity investments without readily determinable fair values either at fair value or at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The standard requires a qualitative assessment to identify impairment. When a qualitative assessment indicates that impairment exists, an entity is required to measure the investment at fair value. ASU 2016-01 became effective for the Company beginning January 1, 2018. The Company elected to measure its equity investment without a readily determinable fair value at cost minus impairment and will adjust for changes in observable prices when available. The guidance related to equity investments without readily determinable fair values is being applied prospectively to the Company’s investment in TELA Bio, Inc. The implementation of this standard did not have a material impact on the Company’s consolidated financial statements and related disclosures. Refer to Note 10, Financial Instruments, for further information.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which clarifies existing guidance on how companies present and classify certain cash receipts and cash payments in the statement of cash flows by addressing specific cash flow issues in an effort to reduce diversity in practice, including guidance on debt prepayment or extinguishment costs and contingent consideration payments made after a business combination. ASU 2016-15 became effective for the Company on January 1, 2018 and did not have a material impact on the Company’s consolidated statement of cash flows.

In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which aligns accounting for share-based payments issued to nonemployees to that of employees under the existing guidance of Topic 718, with certain exceptions. This update supersedes previous guidance for equity-based payments to nonemployees under Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. The Company chose to early adopt ASU 2018-07 in June 2018 and recorded a cumulative effect adjustment of less than $0.1 million to accumulated deficit upon adoption.

In March 2016, the FASB issued ASU 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This update included multiple provisions intended to simplify various aspects of accounting for share-based payment transactions including accounting for excess tax benefits and tax deficiencies, classification of excess tax benefits and tax deficiencies in the statement of cash flows and accounting for award forfeitures. The update also removed the requirement to delay recognition of an excess tax benefit until it reduces current taxes payable, instead, it is required to be recognized at the time of settlement, subject to normal valuation allowance considerations. This update became effective for the Company beginning January 1, 2017. The Company elected an accounting policy change to record forfeitures as they occur rather than estimating forfeitures during each period and recorded a charge of $0.3 million to retained earnings as of January 1, 2017 related to the reversal of cumulative forfeiture estimates. The adoption of this standard also resulted in the recognition of $29.3 million of previously unrecognized excess tax benefits in deferred tax assets, fully offset by a valuation allowance. The changes were applied prospectively in accordance with the update, and prior periods were not adjusted. All tax-related cash flows resulting from stock-based compensation, including the excess tax benefits related to the settlement of stock-based awards, are now classified as cash flows from operating activities in the Company’s consolidated statements of cash flows.

Recent Accounting Pronouncements Not Adopted as of December 31, 2018

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) and subsequently issued clarifications and corrections to the update by issuing ASU 2018-10 in July 2018. This update requires lessees to recognize lease assets and lease liabilities on the consolidated balance sheet for those leases classified as operating leases under previous authoritative guidance. Upon adoption, the lease liability will be equal to the present value of future lease payments and a right-of-use, or ROU, asset will be based on the lease liability, subject to adjustment for items such as initial direct costs. For income statement purposes, the new standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating or financing. Operating leases will continue to result in straight-line expense while financing leases will result in a front-loaded expense pattern (similar to current accounting guidance by lessees for operating and capital leases, respectively, under ASC 840).

There are a number of practical expedients available to the Company at transition. The transition practical expedients are that the Company may elect to not re-assess: (i) whether its contracts contain a lease under the new definition, (ii) the classification of those leases and (iii) the accounting for any initial direct costs previously incurred. In addition, the Company may apply hindsight in determining the lease terms and in assessing a purchase option on its existing leases and any potential impairments that may exist on the ROU assets to be recognized at adoption. The Company may also elect to not recognize an ROU asset and lease liability for those leases with a remaining lease term of 12 months or less. The Company will apply these practical expedients upon adoption.

Upon adoption, ROU assets and lease liabilities are being recognized on the Company’s consolidated balance sheets. The lease liability recognized upon adoption is based upon the present value of the sum of the remaining minimum lease payments (as previously identified under ASC 840) and any amounts probable of being owed under a residual value guarantee (if applicable), to be determined using the discount rate then in effect. The interest rate is based on the Company’s ability to borrow on a collateralized basis over a similar remaining term and in a similar economic environment. The ROU asset to be recorded is based on the lease liability and adjusted for any prepaid or accrued lease payments, the remaining balance of any lease incentives, initial indirect costs and impairments (if applicable).

The standard is effective for the Company beginning January 1, 2019. The Company elected to adopt the new standard at the beginning of the period of adoption through a cumulative-effect adjustment. The Company will reflect its ROU assets, lease liabilities and any cumulative-effect adjustment to retained earnings in its consolidated financial statements beginning on January 1, 2019.

The Company continues to evaluate the impact of ASU 2016-02 on its consolidated financial statements. The recognition of lease liabilities and corresponding ROU assets is expected to have a material impact on the Company’s consolidated balance sheet. The Company estimates that it will record approximately $35.0 million to $38.0 million of lease liabilities and $26.0 million to $29.0 million of ROU assets as of January 1, 2019, the difference representing previously recorded lease-related assets and liabilities. The Company does not believe the adoption of this standard will have a material impact on its consolidated statements of operations, stockholders’ equity or cash flows. Refer to Note 18, Commitments and Contingencies, for further information on the Company’s existing leases.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Entities will now use forward-looking information to better form their credit loss estimates. This update also requires enhanced disclosures to help financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an entity’s portfolio. This standard will become effective for the Company beginning January 1, 2020, with early adoption permitted. The Company is currently evaluating the impact of ASU 2016-13 on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework. The purpose of the update is to improve the effectiveness of the fair value measurement disclosures that allows for clear communication of information that is most important to the users of financial statements. There were certain required disclosures that have been removed or modified. In addition, the update added the following disclosures: (i) changes in unrealized gains and losses for the period included in other comprehensive income (loss) for recurring Level 3 fair value measurements held at the end of the reporting period and (ii) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The standard will become effective for the Company beginning January 1, 2020, with early adoption permitted. The Company is currently evaluating the impact of ASU 2018-13 on its consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles—Goodwill and Other Internal-Use Software (Subtopic 350-40: Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That is a Service Contract, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The update provides guidance to determine which implementation costs to capitalize as they relate to the service contract and which costs to expense. In addition, the update further defines the term of the hosting arrangement to include the non-cancelable period of the arrangement plus periods covered by (i) an option to extend the arrangement if the customer is reasonably certain to exercise that option; (ii) an option to terminate the arrangement if the customer is reasonably certain not to exercise the termination option and (iii) an option to extend (or not to terminate) the arrangement in which exercise of the option is in the control of the vendor. Any expense related to the capitalized implementation costs should be recorded in the same financial statement line item in the consolidated statements of operations as the fees associated with the hosting element of the arrangement, and the payments for capitalized implementation costs should be classified in the same manner as payments made for fees associated with the hosting element in the consolidated statements of cash flows. This standard will become effective for the Company beginning January 1, 2020. The amendments may be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company is currently evaluating the impact of ASU 2018-15 on its consolidated financial statements.

Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Schedule of percentage of revenue comprised by the three largest customers

The table below includes the percentage of net product sales comprised by the Company’s three largest wholesalers in each period presented:



	Year Ended December 31,
	2018		2017		2016
Largest wholesaler	34	%	35	%	32	%
Second largest wholesaler	30	%	30	%	28	%
Third largest wholesaler	26	%	26	%	26	%
Total	90	%	91	%	86	%

Schedule of useful lives by asset category

Useful lives by asset category are as follows:



Asset Category		Useful Life
Computer equipment and software		1 to 3 years
Office furniture and equipment		5 years
Manufacturing and laboratory equipment		5 to 10 years

REVENUE (Tables)

12 Months Ended

Dec. 31, 2018

Revenue from Contract with Customer [Abstract]

Summary of Activity in Accrued Rebates and Chargebacks, Returns, Wholsesaler Service Fees and Prompt Pay Discounts

The following table provides a summary of activity with respect to the Company’s sales related allowances and accruals for the years ended December 31, 2018, 2017 and 2016 (in thousands):



	Returns Allowances			Prompt Payment Discounts			Wholesaler Service Fees			Volume Rebates and Chargebacks			Total
Balance at December 31, 2015	$	1,733		$	625		$	745		$	797		$	3,900
Provision	694			5,448			4,118			2,611			12,871
Payments/Adjustments	(1,081		)	(5,478		)	(4,128		)	(2,284		)	(12,971		)
Balance at December 31, 2016	1,346			595			735			1,124			3,800
Provision	716			5,806			4,403			4,656			15,581
Payments/Adjustments	(1,241		)	(5,744		)	(4,299		)	(5,084		)	(16,368		)
Balance at December 31, 2017	821			657			839			696			3,013
Provision	680			6,802			5,194			6,645			19,321
Payments/Adjustments	(1,157		)	(6,680		)	(4,866		)	(6,331		)	(19,034		)
Balance at December 31, 2018	$	344		$	779		$	1,167		$	1,010		$	3,300

Disaggregation of Revenue

The following table represents disaggregated net product sales in the periods presented (in thousands):



	Year Ended December 31,
	2018		2017		2016
Net product sales:
EXPAREL	$	331,112	$	282,905	$	265,802
Other product sales	1,315		1,437		4,271
Total net product sales	$	332,427	$	284,342	$	270,073

INVENTORIES (Tables)

12 Months Ended

Dec. 31, 2018

Inventory Disclosure [Abstract]

Schedule of components of inventories

The components of inventories, net are as follows (in thousands):



	December 31,
	2018		2017
Raw materials	$	19,193	$	16,500
Work-in-process	9,711		8,371
Finished goods	19,665		16,540
Total	$	48,569	$	41,411

FIXED ASSETS (Tables)

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Schedule of fixed assets summarized by major category

Fixed assets, net, summarized by major category, consist of the following (in thousands):



	December 31,
	2018			2017
Machinery and laboratory equipment	$	67,431		$	39,002
Leasehold improvements	57,955			34,933
Computer equipment and software	8,131			7,086
Office furniture and equipment	1,548			1,603
Construction in progress	35,163			73,632
Total	170,228			156,256
Less: accumulated depreciation	(61,558		)	(49,210		)
Fixed assets, net	$	108,670		$	107,046

GOODWILL AND INTANGIBLE ASSETS (Tables)

12 Months Ended

Dec. 31, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of change in carrying value of goodwill

The change in the carrying value of goodwill is summarized as follows (in thousands):



	Carrying Value
Balance at December 31, 2016	$	46,737
Percentage payments on collections of net sales of DepoBupivacaine products, including EXPAREL	8,460
Balance at December 31, 2017	55,197
Percentage payments on collections of net sales of DepoBupivacaine products, including EXPAREL	6,843
Balance at December 31, 2018	$	62,040

ACCRUED EXPENSES (Tables)

12 Months Ended

Dec. 31, 2018

Payables and Accruals [Abstract]

Schedule of accrued expenses

Accrued expenses consist of the following (in thousands):



	December 31,
	2018		2017
Accrued operating expenses	$	23,019	$	20,646
Compensation and benefits	16,974		12,295
Accrued royalties	2,286		4,091
Accrued interest	2,053		2,053
Product returns, rebates and other fees	1,533		1,972
Total	$	45,865	$	41,057

DEBT (Tables)

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Schedule of composition of the Company's debt and financing obligations

The total debt composition of the 2022 Notes is as follows (in thousands):



	December 31,
	2018			2017
2.375% convertible senior notes due 2022	$	345,000		$	345,000
Deferred financing costs	(5,850		)	(7,482		)
Discount on debt	(48,558		)	(61,345		)
Total debt, net of debt discount and deferred financing costs	$	290,592		$	276,173

Schedule of total interest expense recognized related to the Notes

The following table sets forth the total interest expense recognized in the periods presented (dollar amounts in thousands):



	Year Ended December 31,
	2018			2017			2016
Contractual interest expense	$	8,205		$	7,344		$	3,852
Amortization of debt issuance costs	1,634			1,381			612
Amortization of debt discount	12,799			10,423			4,088
Capitalized interest and other (Note 6)	(689		)	(1,101		)	(1,491		)
Total	$	21,949		$	18,047		$	7,061

Effective interest rate on convertible senior notes	7.81		%	7.77		%	7.22		%

FINANCIAL INSTRUMENTS (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Schedule of carrying amount and fair value of the long-term debt

The carrying amount and fair value of the Company’s convertible senior notes are as follows (in thousands):



Financial Liabilities Carried at Historical Cost	Carrying Value		Fair Value Measurements Using
December 31, 2018	Carrying Value		Level 1		Level 2		Level 3
2.375% convertible senior notes due 2022 ⁽¹⁾	$	290,592	$	—	$	344,353	$	—
3.25% convertible senior notes due 2019 ⁽²⁾	$	338	$	—	$	586	$	—

Schedule of short-term investments

The following summarizes the Company’s investments at December 31, 2018 and 2017 (in thousands):



December 31, 2018 Investments:	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value (Level 2)
Short-term:
Asset-backed securities	$	34,873	$	—	$	(33	)	$	34,840
Commercial paper	45,035		—		(30		)	45,005
Corporate bonds	171,289		—		(206		)	171,083
Subtotal	251,197		—		(269		)	250,928
Long-term:
Asset-backed securities	9,383		5		—			9,388
Corporate bonds	16,499		—		(16		)	16,483
Subtotal	25,882		5		(16		)	25,871
Total	$	277,079	$	5	$	(285	)	$	276,799



December 31, 2017 Investments:	Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value (Level 2)
Short-term:
Asset-backed securities	$	28,338	$	—	$	(37	)	$	28,301
Commercial paper	48,999		—		(23		)	48,976
Corporate bonds	180,119		—		(175		)	179,944
Subtotal	257,456		—		(235		)	257,221
Long-term:
Asset-backed securities	23,836		—		(79		)	23,757
Corporate bonds	36,430		—		(140		)	36,290
Subtotal	60,266		—		(219		)	60,047
Total	$	317,722	$	—	$	(454	)	$	317,268

STOCKHOLDERS' EQUITY (Tables)

12 Months Ended

Dec. 31, 2018

Stockholders' Equity Note [Abstract]

Schedule of accumulated other comprehensive income

The following table illustrates the changes in the balances of the Company’s accumulated other comprehensive income (loss) for the periods presented (in thousands):



	Net Unrealized Gains (Losses) From Available For Sale Investments
Balance at December 31, 2016	$	(30	)
Other comprehensive loss before reclassifications	(424		)
Amounts reclassified from accumulated other comprehensive income (loss)	—
Balance at December 31, 2017	(454		)
Other comprehensive income before reclassifications	174
Amounts reclassified from accumulated other comprehensive income (loss)	—
Balance at December 31, 2018	$	(280	)

STOCK PLANS (Tables)

12 Months Ended

Dec. 31, 2018

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

Schedule of information about the plans

The following tables contain information about the Company’s stock incentive plans at December 31, 2018:



Stock Incentive Plan	Awards Reserved For Issuance	Awards Issued	Awards Available For Grant
2007 Plan	2,022,837	2,022,837	—
2011 Plan	9,931,700	8,392,572	1,539,128
2014 Inducement Plan	175,000	36,576	138,424
	12,129,537	10,451,985	1,677,552

Employee Stock Purchase Plan	Shares Reserved For Purchase	Shares Purchased	Shares Available For Purchase
2014 ESPP	500,000	224,887	275,113

Schedule of recognized stock-based compensation in consolidated statements of operations

The Company recognized stock-based compensation expense in its consolidated statements of operations for the years ended December 31, 2018, 2017 and 2016 as follows (in thousands):



	Year Ended December 31,
	2018		2017		2016
Cost of goods sold	$	4,478	$	5,467	$	6,438
Research and development	3,934		3,341		3,297
Selling, general and administrative	23,313		22,793		21,513
Total	$	31,725	$	31,601	$	31,248

Stock-based compensation from:
Stock options (employee awards)	$	21,980	$	24,056	$	24,505
Stock options (consultant awards)	663		167		841
RSUs	8,371		6,698		5,117
ESPP	711		680		785
Total	$	31,725	$	31,601	$	31,248

Schedule of the Company's stock option activity and related information

The following table summarizes the Company’s stock option activity and related information for the period from December 31, 2015 to December 31, 2018:



	Number of Options		Weighted Average Exercise Price (Per Share)		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in Thousands)
Outstanding at December 31, 2015	4,645,722		$	44.03	7.31	$	162,340
Granted	1,656,598		38.20
Exercised	(518,226	)	11.13			$	21,750
Forfeited	(401,048	)	70.27
Expired	(175,303	)	80.91
Outstanding at December 31, 2016	5,207,743		42.16		7.39	$	37,581
Granted	1,072,625		43.93
Exercised	(539,989	)	12.55			$	15,865
Forfeited	(555,897	)	48.66
Expired	(232,989	)	74.65
Outstanding at December 31, 2017	4,951,493		43.51		6.91	$	57,021
Granted	1,994,332		39.35
Exercised	(332,732	)	21.55			$	7,418
Forfeited	(481,126	)	42.30
Expired	(409,149	)	68.01
Outstanding at December 31, 2018	5,722,818		$	41.69	7.07	$	49,166
Exercisable at December 31, 2018	3,009,133		$	43.03	5.38	$	37,629
Vested and expected to vest at December 31, 2018	5,722,818		$	41.69	7.07	$	49,166

Schedule of weighted average assumptions used to estimate the fair values of each option grant using the Black-Scholes option pricing model

The fair values of stock options granted were estimated using the Black-Scholes model with the following weighted average assumptions:



	Year Ended December 31,
	2018	2017	2016
Expected dividend yield	None	None	None
Risk-free interest rate	2.26% - 3.05%	1.68% - 2.42%	1.03% - 2.48%
Expected volatility	53.3%	51.4%	53.5%
Expected term of options	5.14 years	5.31 years	5.77 years

Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]

The following table summarizes the Company’s RSU activity and related information for the period from December 31, 2015 to December 31, 2018:



	Number of Units		Weighted Average Grant Date Fair Value (Per Share)		Aggregate Intrinsic Value (in Thousands)
Unvested at December 31, 2015	216,198		$	78.59	$	16,602
Granted	256,631		40.21
Vested	(61,487	)	78.33
Forfeited	(46,939	)	68.84
Unvested at December 31, 2016	364,403		52.85		$	11,824
Granted	343,583		44.23
Vested	(101,379	)	53.76
Forfeited	(107,061	)	49.98
Unvested at December 31, 2017	499,546		47.32		$	22,804
Granted	331,129		38.36
Vested	(156,450	)	49.59
Forfeited	(96,261	)	43.92
Unvested and expected to vest at December 31, 2018	577,964		$	42.14	$	24,864

NET INCOME (LOSS) PER SHARE (Tables)

12 Months Ended

Dec. 31, 2018

Earnings Per Share [Abstract]

Schedule of computation of basic and diluted loss per share

The following table sets forth the computation of basic and diluted net income (loss) per share for the years ended December 31, 2018, 2017 and 2016 (in thousands, except per share amounts):



	Year Ended December 31,
	2018			2017			2016
Numerator:
Net loss	$	(471	)	$	(42,611	)	$	(37,949	)
Denominator:
Weighted average shares of common stock outstanding	40,911			39,806			37,236
Net loss per share:
Basic and diluted net loss per common share	$	(0.01	)	$	(1.07	)	$	(1.02	)

Schedule of potential dilutive effect of the securities excluded from the calculation of diluted loss per share



	Year Ended December 31,
	2018	2017	2016
Weighted average number of stock options	5,492	5,171	4,482
Weighted average number of RSUs	542	449	290
Conversion premium on the 2019 Notes	—	411	2,022
Weighted average number of warrants	—	—	1
Weighted average ESPP purchase options	31	29	21
Total	6,065	6,060	6,816

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax and Current Taxes

Income (loss) before income taxes and the related tax expense is as follows (in thousands):



	Year Ended December 31,
	2018			2017			2016
Income (loss) before income taxes:
Domestic	$	5,169		$	(39,898	)	$	(36,339	)
Foreign	(5,594		)	(2,573		)	(1,505		)
Total loss before income taxes	$	(425	)	$	(42,471	)	$	(37,844	)

Current taxes:
Federal	$	(96	)	$	—		$	11
State	142			140			94
Total income tax expense	$	46		$	140		$	105

Schedule of reconciliation of income taxes at the U.S. Federal statutory rate to the provision for income taxes

A reconciliation of income taxes at the U.S. federal statutory rate to the provision for income taxes is as follows:



	Year Ended December 31,
	2018		2017		2016
U.S. federal statutory rate	21.00	%	35.00	%	35.00	%
State taxes	(24.84	)%	2.26	%	2.20	%
Foreign taxes	(92.04	)%	(1.28	)%	(0.81	)%
Change in valuation allowance	369.27	%	4.58	%	(43.96	)%
Stock-based compensation	(874.29	)%	(1.21	)%	(0.54	)%
Tax credits	700.35	%	4.96	%	8.77	%
Interest expense	218.47	%	2.90	%	5.75	%
Effect of rate changes	13.44	%	(130.88	)%	(4.65	)%
Convertible senior notes refinancing	—	%	6.55	%	—	%
Effect of the adoption of ASU 2016-09	—	%	68.89	%	—	%
Nondeductible expenses	(132.96	)%	—	%	—	%
Reserves	(202.98	)%	—	%	—	%
Other	(6.15	)%	7.90	%	(2.04	)%
Effective tax rate	(10.73	)%	(0.33	)%	(0.28	)%

Schedule of significant components of the Company's deferred tax assets



	December 31,
	2018			2017
Deferred tax assets:
Net operating loss carry-forwards	$	79,446		$	95,067
Federal and state credits	17,730			15,048
Depreciation and amortization	2,851			2,593
Accruals and reserves	11,009			2,743
Deferred revenue	—			1,841
Stock based compensation	18,302			16,925
Inventory	848			552
Other	127			139
Total deferred tax assets	130,313			134,908
Deferred tax liabilities:
Discount on convertible senior notes	(11,655		)	(14,678		)
Deferred tax assets, net of deferred tax liabilities	118,658			120,230
Less: valuation allowance	(118,658		)	(120,230		)
Net deferred tax assets	$	—		$	—

Schedule of Unrecognized Tax Benefits Roll Forward

The change in the Company’s UTBs in 2018 is summarized as follows (in thousands):



	Unrecognized Tax Benefit
Balance at December 31, 2017	$	2,473
Additions for current year positions	408
Balance at December 31, 2018	$	2,881

COMMERCIAL PARTNERS AND OTHER AGREEMENTS COMMERICAL PARTNERS AND OTHER AGREEMENTS (Tables)

12 Months Ended

Dec. 31, 2018

COMMERCIAL PARTNERS AND OTHER AGREEMENTS

COMMERCIAL PARTNERS AND OTHER AGREEMENTS [Table Text Block]

summary of the Company’s costs and reserves related to the DepoCyt(e) discontinuation are as follows (in thousands):



	Severance and Related Costs			Lease Costs			Write-Off of Property, Plant & Equipment and Inventory			Asset Retirement Obligations and Other Discontinuation Costs			Total
Balance at December 31, 2016	$	—		$	—		$	—		$	—		$	—
Charges incurred	303			2,018			2,470			656			5,447
Cash payments made	(303		)	(744		)	—			(420		)	(1,467		)
Disposal of property, plant & equipment and inventory	—			—			(2,470		)	—			(2,470		)
Balance sheet reclassifications	—			494			—			73			567
Balance at December 31, 2017	—			1,768			—			309			2,077
Charges incurred	—			1,513			—			51			1,564
Cash payments made	—			(1,311		)	—			(91		)	(1,402		)
Balance sheet reclassifications	—			—			—			13			13
Balance at December 31, 2018	$	—		$	1,970		$	—		$	282		$	2,252

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of annual minimum payments due under the Company's lease obligations

As of December 31, 2018, aggregate annual minimum payments due under the Company’s lease obligations are as follows (in thousands):



Year	Aggregate Minimum Payments Due
2019	$	8,140
2020	7,621
2021	5,295
2022	5,417
2023	5,543
2024 through 2028	14,329
Total	$	46,345

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables)

12 Months Ended

Dec. 31, 2018

Quarterly Financial Information Disclosure [Abstract]

Schedule of Quarterly Financial Data

The following tables present selected quarterly financial data for the years ended December 31, 2018 and 2017 (in thousands, except per share amounts):



	Three Months Ended
	March 31, 2018			June 30, 2018		September 30, 2018			December 31, 2018
Total revenues	$	74,607		$	84,107	$	83,448		$	95,115
Cost of goods sold	22,885			20,916		19,065			23,979
Total operating expenses	81,544			77,566		79,400			82,852
Net income (loss)	(10,680		)	2,564		(640		)	8,285
Basic and diluted net income (loss) per common share	$	(0.26	)	$	0.06	$	(0.02	)	$	0.20



	Three Months Ended
	March 31, 2017			June 30, 2017			September 30, 2017			December 31, 2017
Total revenues	$	69,283		$	70,934		$	67,335		$	79,078
Cost of goods sold	24,581			23,811			18,228			21,295
Total operating expenses	83,333			86,714			70,907			70,613
Net income (loss)	(19,866		)	(19,743		)	(7,597		)	4,595
Basic and diluted net income (loss) per common share	$	(0.52	)	$	(0.49	)	$	(0.19	)	$	0.11

For periods where the Company reported a net loss, no potentially dilutive securities were included in the computation of diluted net loss per share.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - Customer concentration - customer	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Concentration of Major Customers
Concentration Risk, Number of Customers	3
Net revenue
Concentration of Major Customers
Percentage of revenue from customers to total revenue	90.00%	91.00%	86.00%
Net revenue \| Largest customer
Concentration of Major Customers
Percentage of revenue from customers to total revenue	34.00%	35.00%	32.00%
Net revenue \| Second largest customer
Concentration of Major Customers
Percentage of revenue from customers to total revenue	30.00%	30.00%	28.00%
Net revenue \| Third largest customer
Concentration of Major Customers
Percentage of revenue from customers to total revenue	26.00%	26.00%	26.00%
Net revenue \| Customers outside U.S.
Concentration of Major Customers
Percentage of revenue from customers to total revenue	1.00%	1.00%	1.00%

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4)	12 Months Ended
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4)	Dec. 31, 2018 segment
Segment Reporting
Number of reportable segments	1
Computer equipment and software \| Minimum
Fixed Assets
Useful life	1 year
Computer equipment and software \| Maximum
Fixed Assets
Useful life	3 years
Office furniture and equipment
Fixed Assets
Useful life	5 years
Manufacturing and laboratory equipment \| Minimum
Fixed Assets
Useful life	5 years
Manufacturing and laboratory equipment \| Maximum
Fixed Assets
Useful life	10 years

RECENT ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands			12 Months Ended
	Jun. 30, 2018	Jan. 01, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Jan. 01, 2019	Mar. 31, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Retained Earnings (Accumulated Deficit)			$ (388,226)	$ (389,136)
Contract with Customer, Liability			900
Royalty revenue			1,850	$ 1,901	$ 2,872
Cumulative Effect on Retained Earnings, Net of Tax	$ 100	$ 300
Effective Income Tax Rate Reconciliation, Share-based Compensation, Excess Tax		$ 29,300
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] \| Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Retained Earnings (Accumulated Deficit)							$ 1,400
Contract with Customer, Liability							1,000
Accrued Royalties							$ 400
Royalty revenue			400
Royalties Receivable			700
Accrued Liabilities [Member] \| Difference between Revenue Guidance in Effect before and after Topic 606 [Member] \| Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract with Customer, Liability			100
Other Liabilities [Member] \| Difference between Revenue Guidance in Effect before and after Topic 606 [Member] \| Accounting Standards Update 2014-09
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Contract with Customer, Liability			$ 800
Scenario, Forecast \| Minimum \| Accounting Standards Update 2016-02
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Operating Lease, Liability						$ 35,000
Operating Lease, Right-of-Use Asset						26,000
Scenario, Forecast \| Maximum \| Accounting Standards Update 2016-02
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Operating Lease, Liability						38,000
Operating Lease, Right-of-Use Asset						$ 29,000

RECENT ACCOUNTING PRONOUNCEMENTS Stock-Based Compensation (Details) - USD ($) $ in Millions	Jun. 30, 2018	Jan. 01, 2017
Accounting Policies [Abstract]
Cumulative Effect on Retained Earnings, Net of Tax	$ 0.1	$ 0.3

REVENUE (Details) - USD ($) $ in Thousands	12 Months Ended
REVENUE (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Movement in Valuation Allowances and Reserves [Roll Forward]
Beginning of Period	$ 3,013	$ 3,800	$ 3,900
Accruals	19,321	15,581	12,871
Payments (Credits)	(19,034)	(16,368)	(12,971)
End of Period	$ 3,300	3,013	3,800
Minimum
Movement in Valuation Allowances and Reserves [Roll Forward]
Accounts Receivable, Additional Narrative Disclosure	0
Maximum
Movement in Valuation Allowances and Reserves [Roll Forward]
Accounts Receivable, Additional Narrative Disclosure	37
Accrued returns
Movement in Valuation Allowances and Reserves [Roll Forward]
Beginning of Period	$ 821	1,346	1,733
Accruals	680	716	694
Payments (Credits)	(1,157)	(1,241)	(1,081)
End of Period	344	821	1,346
Reserves for prompt pay discounts
Movement in Valuation Allowances and Reserves [Roll Forward]
Beginning of Period	657	595	625
Accruals	6,802	5,806	5,448
Payments (Credits)	(6,680)	(5,744)	(5,478)
End of Period	779	657	595
Accrued wholesaler service fees
Movement in Valuation Allowances and Reserves [Roll Forward]
Beginning of Period	839	735	745
Accruals	5,194	4,403	4,118
Payments (Credits)	(4,866)	(4,299)	(4,128)
End of Period	1,167	839	735
Accrued rebates and chargebacks
Movement in Valuation Allowances and Reserves [Roll Forward]
Beginning of Period	696	1,124	797
Accruals	6,645	4,656	2,611
Payments (Credits)	(6,331)	(5,084)	(2,284)
End of Period	$ 1,010	$ 696	$ 1,124

REVENUE (Details 2) - USD ($) $ in Thousands	12 Months Ended
REVENUE (Details 2) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Disaggregation of Revenue [Line Items]
Total net product sales	$ 332,427	$ 284,342	$ 270,073
EXPAREL
Disaggregation of Revenue [Line Items]
Total net product sales	331,112	282,905	265,802
Other product sales
Disaggregation of Revenue [Line Items]
Total net product sales	$ 1,315	$ 1,437	$ 4,271

INVENTORIES (Details) - USD ($) $ in Thousands	12 Months Ended
INVENTORIES (Details) - USD ($) $ in Thousands	Dec. 31, 2016	Dec. 31, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Raw materials		$ 19,193	$ 16,500
Work-in-process		9,711	8,371
Finished goods		19,665	16,540
Total		$ 48,569	$ 41,411
Inventory Write-down	$ 20,700

FIXED ASSETS (Details) - USD ($) $ in Thousands	12 Months Ended
FIXED ASSETS (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
FIXED ASSETS
Total	$ 170,228	$ 156,256
Less accumulated depreciation	(61,558)	(49,210)
Fixed assets, net	108,670	107,046
Depreciation expense	13,200	13,800	$ 12,800
Capitalized interest	689	1,101	$ 1,491
Foreign Property, Plant and Equipment, Net	64,600	59,800
Asset Retirement Obligation	2,200	1,500
Increase (Decrease) in Asset Retirement Obligations	400
Asset Retirement Obligation, Accretion Expense	100
Manufacturing and laboratory equipment
FIXED ASSETS
Total	67,431	39,002
Leasehold improvements
FIXED ASSETS
Total	57,955	34,933
Computer equipment and software
FIXED ASSETS
Total	8,131	7,086
Office furniture and equipment
FIXED ASSETS
Total	1,548	1,603
Construction in progress
FIXED ASSETS
Total	$ 35,163	$ 73,632

GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($)	12 Months Ended
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017
Goodwill [Roll Forward]
Beginning balance	$ 55,197,000	$ 46,737,000
Percentage payments on collections of net sales of DepoBupivacaine products, including EXPAREL	6,843,000	8,460,000
Ending balance	62,040,000	$ 55,197,000
Upon first commercial sale in the United States
Goodwill
Milestone payments for EXPAREL agreed in connection with acquisition	10,000,000
Upon first commercial sale in a major EU country (United Kingdom, France, Germany, Italy and Spain)
Goodwill
Milestone payments for EXPAREL agreed in connection with acquisition	4,000,000
When annual net sales collected reach $100.0 million
Goodwill
Milestone payments for EXPAREL agreed in connection with acquisition	8,000,000
Annual net sales threshold	100,000,000
When annual net sales collected reach $250.0 million
Goodwill
Milestone payments for EXPAREL agreed in connection with acquisition	8,000,000
Annual net sales threshold	250,000,000
When annual net sales collected reach $500.0 million
Goodwill
Milestone payments for EXPAREL agreed in connection with acquisition	32,000,000
Annual net sales threshold	500,000,000
Skye Pharma Holding Inc. [Member]
Goodwill [Roll Forward]
Total Milestone Payments Yet to be Paid for Sale of Product in Connection with Acquisition	$ 36,000,000

ACCRUED EXPENSES (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Accrued operating expenses	$ 16,974	$ 12,295
Compensation and benefits	23,019	20,646
Accrued royalties	2,286	4,091
Accrued interest	2,053	2,053
Product returns, rebates and other fees	1,533	1,972
Total	$ 45,865	$ 41,057

DEBT (Details) - USD ($) $ / shares in Units, shares in Millions			12 Months Ended
	Mar. 13, 2017	Jan. 23, 2013	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Mar. 07, 2017
Debt:
Settlement Period - Convertible Debt Conversion Request	40 days
Share Price			$ 43.02
Debt Conversion, Converted Instrument, Shares Issued				2.5
Debt Instrument, Convertible, Conversion Value			$ 200,000
Loss on early extinguishment of debt			0	$ 3,732,000	$ 0
Convertible Senior Notes Due 2022 [Member]
Debt:
Debt Instrument, Convertible, Conversion Ratio	14.9491
Debt Instrument, Convertible, Conversion Price	$ 66.89
Debt Instrument, Conversion Obligation Premium on Common Stock	37.50%
Share Price						$ 48.65
Debt Redemption Price Due to Fundamental Change as Percentage of Principal Amount	100.00%
Convertible Debt	$ 274,100,000
Debt Instrument, Convertible, Assumed Borrowing Rate	7.45%
Debt Instrument, Convertible, Carrying Amount of Equity Component	$ 70,900,000
Debt Related Commitment Fees and Debt Issuance Costs	$ 11,000,000
Debt Issuance Costs, Amortization period	5 years
Debt Instrument, Customary Events of Default, Percentage of Principal and Accrued and Unpaid Interest Due and Payable Upon Default	100.00%
Convertible Senior Notes Due 2022 [Member] \| Debt Conversion Terms Business Day Immediately Preceding October 1, 2021 [Member]
Debt:
Debt Instrument, Conversion Obligation Common Stock Closing Sales Price Minimum, Number of Trading Days	20 days
Debt Instrument, Conversion Obligation Number of Consecutive Trading Days	30 days
Debt Instrument, Conversion Obligation Common Stock Closing Sales Price Minimum as Percentage of Conversion Price	130.00%
Debt Instrument Conversion Obligation Number of Consecutive Business Days after Consecutive Trading Day Period	5 days
Debt Instrument, Conversion Obligation Period of Consecutive Trading Days	5 days
Debt Instrument, Principal Amount Denominator for Conversion into Common Stock	$ 1,000		1,000
Debt Instrument, Conversion Obligation Trading Price as Percentage of Product of Last Reported Common Stock Sale Price and Conversion Rate Maximum	98.00%
Debt Instrument, Market Price			$ 998
Convertible Senior Notes Due 2022 [Member] \| Debt Redemption Terms on or after April 1, 2020 [Member]
Debt:
Debt Instrument, Conversion Obligation Common Stock Closing Sales Price Minimum, Number of Trading Days	20 days
Debt Instrument, Conversion Obligation Number of Consecutive Trading Days	30 days
Debt Instrument, Conversion Obligation Common Stock Closing Sales Price Minimum as Percentage of Conversion Price	130.00%
Debt Instrument Conversion Obligation Number of Trading Days Prior to Date on which Entity Provides Notice of Redemption	5 days
Debt Instrument, Percentage of Principal Amount for Computation of Redemption Price	100.00%
Convertible debt
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage		3.25%	3.25%
Debt:
Debt Instrument, Principal Amount Denominator for Conversion into Common Stock	$ 1,000
Debt Instrument, Convertible, Conversion Price			$ 24.82
Gross Proceeds From Issuance of Debt		$ 120,000,000
Debt Instrument, Repurchased Face Amount				118,200,000
Unsecured Debt \| Convertible Senior Notes Due 2022 [Member]
Debt Instrument [Line Items]
Long-term Debt, Gross			$ 345,000,000	345,000,000
Proceeds from Issuance of Debt	$ 345,000,000
Debt Instrument, Interest Rate, Stated Percentage	2.375%
Debt:
Debt Issuance Costs, Net			(5,850,000)	(7,482,000)
Discount on debt			(48,558,000)	(61,345,000)
Total debt, net of debt discount			290,592,000	276,173,000
Proceeds from Convertible Debt, Net	$ 334,000,000
Unsecured Debt \| Convertible debt
Debt:
Long-term Debt, Gross			$ 338,000	$ 338,000

DEBT (Details 2) - USD ($) $ in Thousands	12 Months Ended
DEBT (Details 2) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Interest Expense, Debt [Abstract]
Amortization of debt discount	$ 12,799	$ 10,423	$ 4,088
Interest Costs Capitalized	(689)	(1,101)	(1,491)
Notes
Interest Expense, Debt [Abstract]
Total interest expense recognized	21,949	18,047	7,061
Convertible Debt [Member]
Interest Expense, Debt [Abstract]
Contractual interest expense	8,205	7,344	3,852
Amortization of debt issuance costs	1,634	1,381	612
Amortization of debt discount	$ 12,799	$ 10,423	$ 4,088
Effective interest rate (as a percent)	7.81%	7.77%	7.22%

FINANCIAL INSTRUMENTS (Details) - USD ($)
$ / shares in Units, $ in Thousands

1 Months Ended

12 Months Ended

Mar. 13, 2017

Oct. 31, 2017

Dec. 31, 2018

Dec. 31, 2017

Sep. 30, 2017

Mar. 07, 2017

Fair Value Measurements

Price per share (in dollars per share)

$ 43.02

Debt Instrument, Convertible, Conversion Premium, Shares

10,000

Estimated conversion value

$ 200

Payments to Acquire Businesses, Net of Cash Acquired

$ 15,000

Business Combination, Contingent Consideration Arrangements, Range of Outcomes, Value, High

$ 10,000

Equity investment

14,146

$ 14,146

Investments, Contingent Purchase Obligation

900

Level 2

Fair Value Measurements

Cost

277,079

317,722

Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax

Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax

(285)

(454)

Available-for-sale Securities

$ 276,799

317,268

Convertible Senior Notes Due 2022 [Member]

Fair Value Measurements

Price per share (in dollars per share)

$ 48.65

Initial conversion price of notes into common stock (in dollars per share)

$ 66.89

Notes

Fair Value Measurements

Initial conversion price of notes into common stock (in dollars per share)

$ 24.82

Maximum

Fair Value Measurements

Debt Instrument, Convertible, Conversion Premium, Shares

10,000

Maximum | Convertible Senior Notes Due 2022 [Member]

Fair Value Measurements

Debt Instrument, Convertible, Conversion Premium, Shares

5,200,000

Unsecured Debt | Convertible Senior Notes Due 2022 [Member] | Level 1

Fair Value Measurements

Long-term debt-current and long-term

^[1]

$ 0

Unsecured Debt | Convertible Senior Notes Due 2022 [Member] | Level 2

Fair Value Measurements

Long-term debt-current and long-term

^[1]

344,353

Unsecured Debt | Convertible Senior Notes Due 2022 [Member] | Level 3

Fair Value Measurements

Long-term debt-current and long-term

^[1]

Unsecured Debt | Notes | Level 1

Fair Value Measurements

Long-term debt-current and long-term

^[2]

Unsecured Debt | Notes | Level 2

Fair Value Measurements

Long-term debt-current and long-term

^[2]

586

Unsecured Debt | Notes | Level 3

Fair Value Measurements

Long-term debt-current and long-term

^[2]

Unsecured Debt | Carrying Value | Convertible Senior Notes Due 2022 [Member]

Fair Value Measurements

Long-term debt-current and long-term

^[1]

290,592

Unsecured Debt | Carrying Value | Notes

Fair Value Measurements

Long-term debt-current and long-term

^[2]

338

Long-term:

Fair Value Measurements

Cost

25,882

Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax

Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax

(16)

Long-term: | Level 2

Fair Value Measurements

Cost

60,266

Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax

Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax

(219)

Available-for-sale Securities

25,871

60,047

Long-term: | Asset-backed Securities

Fair Value Measurements

Cost

9,383

23,836

Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax

Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax

(79)

Long-term: | Asset-backed Securities | Level 2

Fair Value Measurements

Available-for-sale Securities

9,388

23,757

Long-term: | Corporate bonds

Fair Value Measurements

Cost

16,499

Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax

Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax

(16)

Long-term: | Corporate bonds | Level 2

Fair Value Measurements

Cost

36,430

Available-for-sale Securities, Accumulated Gross Unrealized Gain, before Tax

Available-for-sale Securities, Accumulated Gross Unrealized Loss, before Tax

(140)

Available-for-sale Securities

$ 16,483

$ 36,290

[1]

The closing price of the Company’s common stock was $43.02 per share at December 31, 2018 compared to a conversion price of $66.89 per share. Currently, the conversion price is above the stock price. The maximum conversion premium that can be due on the 2022 Notes is approximately 5.2 million shares of the Company’s common stock, which assumes no increases in the conversion rate for certain corporate events.

[2]

The closing price of the Company’s common stock was $43.02 per share at December 31, 2018 compared to a conversion price of $24.82 per share which, if converted, would have resulted in an approximate conversion premium of fewer than 10,000 shares of the Company’s common stock or $0.2 million of cash. The maximum conversion premium that can be due on the 2019 Notes is approximately 10,000 shares of the Company’s common stock, which assumes no increases in the conversion rate for certain corporate events.

FINANCIAL INSTRUMENTS (Details 2) - USD ($) $ in Thousands	12 Months Ended
FINANCIAL INSTRUMENTS (Details 2) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Fair Value Measurements
Equity investment	$ 14,146	$ 14,146
Investments, Contingent Purchase Obligation	900
Realized Investment Gains (Losses)	900
Level 2
Fair Value Measurements
Cost	277,079	317,722
Gross Unrealized Gains	5	0
Gross Unrealized Losses	(285)	(454)
Fair Value	276,799	317,268
Short-term:
Fair Value Measurements
Cost	251,197
Gross Unrealized Gains	0
Gross Unrealized Losses	(269)
Short-term: \| Level 2
Fair Value Measurements
Cost		257,456
Gross Unrealized Gains		0
Gross Unrealized Losses		(235)
Fair Value	250,928	257,221
Short-term: \| Asset-backed Securities
Fair Value Measurements
Cost	34,873
Gross Unrealized Gains	0
Gross Unrealized Losses	(33)
Short-term: \| Asset-backed Securities \| Level 2
Fair Value Measurements
Cost		28,338
Gross Unrealized Gains		0
Gross Unrealized Losses		(37)
Fair Value	34,840	28,301
Short-term: \| Commercial Paper
Fair Value Measurements
Cost	45,035
Gross Unrealized Gains	0
Gross Unrealized Losses	(30)
Short-term: \| Commercial Paper \| Level 2
Fair Value Measurements
Cost		48,999
Gross Unrealized Gains		0
Gross Unrealized Losses		(23)
Fair Value	45,005	48,976
Short-term: \| Corporate bonds
Fair Value Measurements
Cost	171,289
Gross Unrealized Gains	0
Gross Unrealized Losses	(206)
Short-term: \| Corporate bonds \| Level 2
Fair Value Measurements
Cost		180,119
Gross Unrealized Gains		0
Gross Unrealized Losses		(175)
Fair Value	171,083	179,944
Long-term:
Fair Value Measurements
Cost	25,882
Gross Unrealized Gains	5
Gross Unrealized Losses	(16)
Long-term: \| Level 2
Fair Value Measurements
Cost		60,266
Gross Unrealized Gains		0
Gross Unrealized Losses		(219)
Fair Value	25,871	60,047
Long-term: \| Asset-backed Securities
Fair Value Measurements
Cost	9,383	23,836
Gross Unrealized Gains	5	0
Gross Unrealized Losses	0	(79)
Long-term: \| Asset-backed Securities \| Level 2
Fair Value Measurements
Fair Value	9,388	23,757
Long-term: \| Corporate bonds
Fair Value Measurements
Cost	16,499
Gross Unrealized Gains	0
Gross Unrealized Losses	(16)
Long-term: \| Corporate bonds \| Level 2
Fair Value Measurements
Cost		36,430
Gross Unrealized Gains		0
Gross Unrealized Losses		(140)
Fair Value	$ 16,483	$ 36,290

FINANCIAL INSTRUMENTS (Details 3) - customer	12 Months Ended
FINANCIAL INSTRUMENTS (Details 3) - customer	Dec. 31, 2018	Dec. 31, 2017
Credit Risk
Number of major customers	3	3
Accounts receivable \| Credit risk \| Major customer one
Credit Risk
Concentration risk (as a percent)	32.00%	35.00%
Accounts receivable \| Credit risk \| Major customer two
Credit Risk
Concentration risk (as a percent)	32.00%	30.00%
Accounts receivable \| Credit risk \| Major customer three
Credit Risk
Concentration risk (as a percent)	29.00%	27.00%

STOCKHOLDERS' EQUITY (Details) - shares	Dec. 31, 2018	Dec. 31, 2017
Stockholders' Equity Note [Abstract]
Common stock, shares authorized	250,000,000	250,000,000
Common stock, shares outstanding	41,222,799	40,668,877
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares outstanding	0	0

STOCKHOLDERS' EQUITY (Details 2) - USD ($) $ in Thousands	12 Months Ended
STOCKHOLDERS' EQUITY (Details 2) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances at the beginning of the period	$ (454)
Balances at the end of the period	(280)	$ (454)
Accumulated Net Unrealized Investment Gain (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balances at the beginning of the period	(454)	(30)
Other comprehensive loss before reclassifications	174	(424)
Amounts reclassified from accumulated other comprehensive income (loss)	0	0
Balances at the end of the period	$ (280)	$ (454)

STOCK PLANS (Details) - USD ($)	12 Months Ended
STOCK PLANS (Details) - USD ($)	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Stock Incentive Plans
Awards Reserved for Issuance (in shares)	12,129,537
Employee Stock Purchase Plan (ESPP), Shares in ESPP	500,000
Maximum Fair Market Value Purchase of ESPP Shares	$ 25,000
Employee Stock Purchase Plan fair value	85.00%
Awards Issued (in shares)	10,451,985
Stock Purchased And Issued During Period, Shares, Employee Stock Purchase Plans	64,740
Awards Available for Grant (in shares)	1,677,552
Employee Stock Purchase Plan, Number of Shares Authorized	500,000
Stock Issued During Period, Shares, Employee Stock Purchase Plans	224,887
Employee Stock Purchase Plan, Number of Shares Available For Purchase	275,113
Stock options
Stock Incentive Plans
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options	$ 47,500,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 10 months 7 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 19.34	$ 20.78	$ 19.13
Restricted Stock Units (RSUs) [Member]
Stock Incentive Plans
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 9 months 2 days
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 19,200,000
Inducement Plan 2014 [Member]
Stock Incentive Plans
Awards Reserved for Issuance (in shares)	175,000
Awards Issued (in shares)	36,576
Awards Available for Grant (in shares)	138,424
Two Thousand Seven Stock Incentive Plan [Member]
Stock Incentive Plans
Awards Reserved for Issuance (in shares)	2,022,837
Awards Issued (in shares)	2,022,837
Awards Available for Grant (in shares)	0
Stock Incentive Plan 2011 [Member]
Stock Incentive Plans
Awards Reserved for Issuance (in shares)	9,931,700
Awards Issued (in shares)	8,392,572
Awards Available for Grant (in shares)	1,539,128

STOCK PLANS (Details 2) - USD ($) $ in Thousands	12 Months Ended
STOCK PLANS (Details 2) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Share-Based Compensation
Stock-based compensation expense	$ 31,725	$ 31,601	$ 31,248
Compensation expense from stock options, employees	21,980	24,056	24,505
Compensation expense from stock options, non-employee awards	663	167	841
Restricted Stock or Unit Expense	8,371	6,698	5,117
Compensation expense from employee stock purchase plan	711	680	785
Stock-based compensation	31,725	31,601	31,248
Cost of revenues
Share-Based Compensation
Stock-based compensation expense	4,478	5,467	6,438
Research and development
Share-Based Compensation
Stock-based compensation expense	3,934	3,341	3,297
Selling, general and administrative
Share-Based Compensation
Stock-based compensation expense	$ 23,313	$ 22,793	$ 21,513

STOCK PLANS (Details 3) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2014	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based Compensation arrangement by Share-based payment award, equity instruments others than options, vested and expected to vest, weighted average grant date fair value	$ 42.14
share-based compensation arrangement by share-based payment award, equity instruments other than options, vested and expected to vest, aggregate intrinsic value	$ 24,864
Stock options
Number of Shares
Balance at the beginning of the period (in shares)	4,951,493	5,207,743	4,645,722
Granted (in shares)	1,994,332	1,072,625	1,656,598
Exercised (in shares)	(332,732)	(539,989)	(518,226)
Forfeited (in shares)	(481,126)	(555,897)	(401,048)
Expired (in shares)	(409,149)	(232,989)	(175,303)
Balance at the end of the period (in shares)	5,722,818	4,951,493	5,207,743
Exercisable at the end of the period (in shares)	3,009,133
Vested and expected to vest at the end of the period (in shares)	5,722,818
Weighted Average Exercise Price
Balance at the beginning of the period (in dollars per share)	$ 43.51	$ 42.16	$ 44.03
Granted (in dollars per share)	39.35	43.93	38.20
Exercised (in dollars per share)	21.55	12.55	11.13
Forfeited (in dollars per share)	42.30	48.66	70.27
Expired (in dollars per share)	68.01	74.65	80.91
Balance at the end of the period (in dollars per share)	41.69	$ 43.51	$ 42.16
Exercisable at the end of the period (in dollars per share)	43.03
Vested and expected to vest at the end of the period (in dollars per share)	$ 41.69
Weighted Average remaining contractual term
Balance at the end of the period	7 years 24 days	6 years 10 months 27 days	7 years 4 months 22 days	7 years 3 months 22 days
Exercisable at the end of the period	5 years 4 months 16 days
Vested and expected to vest at the end of the period	7 years 24 days
Aggregate intrinsic value
Balance at the beginning of the period (in dollars)	$ 57,021	$ 37,581	$ 162,340
Exercised (in dollars)	7,418	15,865	21,750
Balance at the end of the period (in dollars)	49,166	$ 57,021	$ 37,581
Exercisable at the end of the period (in dollars)	37,629
Vested and expected to vest at the end of the period (in dollars)	$ 49,166
Weighted average assumptions used to estimate the fair values of each option grant
Risk free interest rate, minimum (as a percent)	2.26%	1.68%	1.03%
Risk free interest rate, maximum (as a percent)	3.05%	2.42%	2.48%
Expected volatility (as a percent)	53.30%	51.40%	53.50%
Expected life of options	5 years 1 month 19 days	5 years 3 months 21 days	5 years 9 months 6 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 19.34	$ 20.78	$ 19.13
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	499,546	364,403	216,198
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	331,129	343,583	256,631
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	(156,450)	(101,379)	(61,487)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	(96,261)	(107,061)	(46,939)
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number	577,964	499,546	364,403
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 47.32	$ 52.85	$ 78.59
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	38.36	44.23	40.21
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value	49.59	53.76	78.33
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value	43.92	49.98	68.84
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value	$ 42.14	$ 47.32	$ 52.85
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value, Outstanding	$ 24,864	$ 22,804	$ 11,824		$ 16,602
Share-based Compensation Arrangement by Share-based Payment Award, Restricted Stock Units, Vested and Expected to Vest	577,964,000
Stock options
Weighted average assumptions used to estimate the fair values of each option grant
Expected volatility (as a percent)	52.20%	53.80%	63.40%
Expected life of options	6 months	6 months	6 months
Stock options \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 13.15	$ 13.85	$ 10.57
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	1.53%	1.14%	0.37%
Stock options \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 10.40	$ 10.80	$ 25.28
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Risk Free Interest Rate	2.14%	0.62%	0.49%

NET INCOME (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Numerator:
Net loss	$ 8,285	$ (640)	$ 2,564	$ (10,680)	$ 4,595	$ (7,597)	$ (19,743)	$ (19,866)	$ (471)	$ (42,611)	$ (37,949)
Weighted average common shares outstanding—basic (in shares)									40,911	39,806	37,236
Basic and diluted net income (loss) per common share (in dollars per share)	$ 0.20	$ (0.02)	$ 0.06	$ (0.26)	$ 0.11	$ (0.19)	$ (0.49)	$ (0.52)	$ (0.01)	$ (1.07)	$ (1.02)

NET INCOME (LOSS) PER SHARE (Details 2) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential dilutive effect of securities (in shares)	6,065	6,060	6,816
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential dilutive effect of securities (in shares)	5,492	5,171	4,482
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential dilutive effect of securities (in shares)	542	449	290
Convertible debt
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential dilutive effect of securities (in shares)	0	411	2,022
Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential dilutive effect of securities (in shares)	0	0	1
ESPP purchase options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Potential dilutive effect of securities (in shares)	31	29	21

INCOME TAXES (Details) - USD ($) $ in Thousands	12 Months Ended
INCOME TAXES (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Mar. 13, 2017
Income Tax Provision [Line Items]
Domestic	$ 5,169	$ (39,898)	$ (36,339)
Foreign	(5,594)	(2,573)	(1,505)
Total loss before income taxes	(425)	(42,471)	(37,844)
Federal	(96)	0	11
State	142	140	94
Total income tax expense	$ 46	$ 140	$ 105
Reconciliation of income taxes at U.S. Federal statutory rate to the provision for income taxes
U.S. federal statutory rate	21.00%	35.00%	35.00%
State taxes	(24.84%)	2.26%	2.20%
Foreign taxes	(92.04%)	(1.28%)	(0.81%)
Change in valuation allowance	369.27%	4.58%	(43.96%)
Stock-based compensation	(874.29%)	(1.21%)	(0.54%)
Tax credits	700.35%	4.96%	8.77%
Interest expense	218.47%	2.90%	5.75%
Effect of rate changes	13.44%	(130.88%)	(4.65%)
Convertible senior notes refinancing	0.00%	6.55%	0.00%
Effect of the adoption of ASU 2016-09	0.00%	68.89%	0.00%
Effective Income Tax Rate Reconciliation, Nondeductible Expense, Percent	(132.96%)	0.00%	0.00%
Effective Income Tax Rate Reconciliation, Tax Reserves, Percent	(202.98%)	0.00%	0.00%
Other	(6.15%)	7.90%	(2.04%)
Effective tax rate	(10.73%)	(0.33%)	(0.28%)
Deferred tax assets:
Net operating loss carry-forwards	$ 79,446	$ 95,067
Federal and state credits	17,730	15,048
Depreciation and amortization	2,851	2,593
Accruals and reserves	11,009	2,743
Deferred revenue	0	1,841
Stock based compensation	18,302	16,925
Inventory	848	552
Other	127	139
Total deferred tax assets	130,313	134,908
Discount on convertible senior notes	(11,655)	(14,678)
Net deferred tax assets, before valuation allowance	118,658	120,230
Less: valuation allowance	(118,658)	(120,230)
Net deferred tax assets	0	0
Non-US Net Operating Loss	$ 11,400
Minimum Cumulative Percentage of Change in Ownership as Condition to Offset Taxable Income or Tax	50.00%
Increase in valuation allowance for deferred tax assets	$ 1,600	$ (28,500)	$ 800
Tax Cuts and Jobs Act of 2017, Change in Tax Rate, Income Tax Expense (Benefit)	$ 55,700
United States Statutory Tax Rate	21.00%	35.00%	35.00%
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Unrecognized Tax Benefits	$ 2,473
Unrecognized Tax Benefits, Increase Resulting from Current Period Tax Positions	408
Unrecognized Tax Benefits	2,881	$ 2,473
Convertible Senior Notes Due 2022 [Member]
Deferred tax assets:
Debt Instrument, Convertible, Carrying Amount of Equity Component				$ 70,900
Federal
Deferred tax assets:
Net operating losses	346,200
Net Operating Loss, Subject to Limitation	191,100
Available Net Operating Loss, Subject to Limitation	108,000
Future NOL's Which Will Become Available (2019-2022)	10,300
Future NOL's Which Will Become Available (2023)	3,500
Future NOL's Which Will Become Available (2024-2025)	1,400
Future NOL's Expired and Unused	35,800
State
Deferred tax assets:
Net operating losses	159,200
Research Tax Credit Carryforward [Member] \| Federal
Deferred tax assets:
Tax Credit Carryforward, Amount	12,700
Research Tax Credit Carryforward [Member] \| State
Deferred tax assets:
Tax Credit Carryforward, Amount	$ 6,300

OTHER EMPLOYEE BENEFITS (Details) - USD ($) $ in Millions	12 Months Ended
OTHER EMPLOYEE BENEFITS (Details) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Savings Plan
Compensation expense recognized	$ 1.6	$ 1.3	$ 1.5

COMMERCIAL PARTNERS AND OTHER AGREEMENTS (Details) - USD ($) $ in Thousands			1 Months Ended				3 Months Ended	12 Months Ended
	Jul. 20, 2018	Dec. 05, 2012	Aug. 31, 2016	Jun. 30, 2016	Apr. 30, 2014	Dec. 31, 2013	Jun. 30, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Jun. 19, 2018
COMMERCIAL PARTNERS AND OTHER AGREEMENTS
Discontinued Operation, Tax Effect of Gain (Loss) from Disposal of Discontinued Operation								$ 1,600	$ 5,400
Inventory Write-down										$ 20,700
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax								(1,564)	(4,868)	0
Supplemental Unemployment Benefits, Severance Benefits								0	0	0
Discontinued Operations - Residual Lease Costs								1,970	1,768	0
Asset Retirement Obligation, Current								282	309	0
Discontinued Operation, Amounts of Material Contingent Liabilities Remaining								2,252	2,077	$ 0
Severance Costs								0	303
Discontinued Operations - Remaining Lease Costs								1,513	2,018
Discontinued Operations - Fixed Asset and Inventory Writedown								0	2,470
Costs Incurred, Asset Retirement Obligation Incurred								51	656
Payments for Postemployment Benefits								0	(303)
Discontinued Operations, Payments For Lease Costs								(1,311)	(744)
Asset Retirement Obligation, Liabilities Settled								(91)	(420)
Disposal Group, Including Discontinued Operation, Operating Expense								(1,402)	(1,467)
Other Adjustments to Income, Discontinued Operations								0	494
Business Exit Costs								13	73
Discontinued Operations Assets removed from Service									(2,470)
Total Change in Discontinued Operations Balance								13	567
Contract Termination Fee								7,100
Contract Termination Fee, Current Portion								0	2,400
Aratana
COMMERCIAL PARTNERS AND OTHER AGREEMENTS
Up-front payment received		$ 1,000
Milestone payment received			$ 1,000	$ 1,000		$ 500
Aratana \| Maximum \| Achievement of development and commercial milestones
COMMERCIAL PARTNERS AND OTHER AGREEMENTS
Milestone payments Company is entitled to receive based on terms of agreement		$ 40,000
Nuance Biotech Co. Ltd. [Member]
COMMERCIAL PARTNERS AND OTHER AGREEMENTS
Up-front payment received	$ 3,000
Nuance Biotech Co. Ltd. [Member] \| Maximum \| Achievement of development and commercial milestones
COMMERCIAL PARTNERS AND OTHER AGREEMENTS
Milestone payments Company is entitled to receive based on terms of agreement											$ 60,000
Mundipharma Ltd [Member]
COMMERCIAL PARTNERS AND OTHER AGREEMENTS
European Rights Expansion & New Distribution Payment					$ 8,000
Term Extension of 2003 Agreements					P15Y
DepoCyte [Member]
COMMERCIAL PARTNERS AND OTHER AGREEMENTS
Inventory Write-down									500
Discontinued Operation, Gain (Loss) from Disposal of Discontinued Operation, before Income Tax							$ (4,900)	$ 1,564	$ 5,447

RELATED PARTY TRANSACTIONS (Details) - USD ($)	1 Months Ended		12 Months Ended
RELATED PARTY TRANSACTIONS (Details) - USD ($)	Aug. 31, 2012	Apr. 30, 2012	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
MPM
RELATED PARTY TRANSACTIONS
Due to Related Parties			$ 0
MPM \| Consulting agreement
RELATED PARTY TRANSACTIONS
Expenses incurred by the entity			0	$ 0	$ 100,000
Member of board of directors
RELATED PARTY TRANSACTIONS
Due to Related Parties			0	0
Member of board of directors \| Consulting agreement
RELATED PARTY TRANSACTIONS
Number of shares that can be purchased under option (in shares)	70,000	20,000
Exercise price of shares that can be purchased under option (in dollars per share)	$ 16.67	$ 11.02
Member of board of directors \| Consulting agreement \| Maximum
RELATED PARTY TRANSACTIONS
Expenses incurred by the entity			$ 0	$ 0	$ 100,000

COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Annual minimum payments due
2018	$ 8,140
2019	7,621
2020	5,295
2021	5,417
2022	5,543
2024 through 2028	14,329
Total	46,345
Rent expense	7,200	$ 7,500	$ 6,000
Deferred rent	6,900	$ 6,800
Purchase Obligation	$ 24,500

COMMITMENTS AND CONTINGENCIES (Details 2) - USD ($) $ in Millions	Mar. 21, 2007	Dec. 31, 2018
SkyePharma Holding, Inc.
Commitments
Total milestone payments paid		$ 36.0
SkyePharma Holding, Inc. \| Maximum
Commitments
Milestone payments for EXPAREL agreed in connection with acquisition		$ 62.0
PPI-California
Commitments
Initial purchase price for acquisition	$ 19.6

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Quarterly Financial Information Disclosure [Abstract]
Total revenues	$ 95,115	$ 83,448	$ 84,107	$ 74,607	$ 79,078	$ 67,335	$ 70,934	$ 69,283	$ 337,277	$ 286,630	$ 276,371
Cost of goods sold	23,979	19,065	20,916	22,885	21,295	18,228	23,811	24,581	86,845	87,915	110,104
Total operating expenses	82,852	79,400	77,566	81,544	70,613	70,907	86,714	83,333	321,362	311,567	308,395
Net loss	$ 8,285	$ (640)	$ 2,564	$ (10,680)	$ 4,595	$ (7,597)	$ (19,743)	$ (19,866)	$ (471)	$ (42,611)	$ (37,949)
Basic and diluted net income (loss) per common share (in dollars per share)	$ 0.20	$ (0.02)	$ 0.06	$ (0.26)	$ 0.11	$ (0.19)	$ (0.49)	$ (0.52)	$ (0.01)	$ (1.07)	$ (1.02)