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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2019	May 01, 2019
Document and Entity Information
Entity Registrant Name	SUPERNUS PHARMACEUTICALS INC
Entity Central Index Key	0001356576
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		52,384,248
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 122,778	$ 192,248
Marketable securities	170,165	163,770
Accounts receivable, net	79,950	102,922
Inventories, net	26,518	25,659
Prepaid expenses and other current assets	20,556	8,888
Total current assets	419,967	493,487
Long term marketable securities	522,551	418,798
Property and equipment, net	4,226	4,095
Intangible assets, net	30,063	31,368
Lease assets	20,049
Deferred income taxes	27,967	29,683
Other assets	625	380
Total assets	1,025,448	977,811
Current liabilities
Accounts payable	7,240	3,195
Accrued product returns and rebates	88,200	107,063
Accrued expenses and other current liabilities	36,607	36,535
Income taxes payable	17,233	12,377
Non-recourse liability related to sale of future royalties, current portion	2,426	2,183
Total current liabilities	151,706	161,353
Convertible notes, net	333,310	329,462
Non-recourse liability related to sale of future royalties, long term	21,957	22,575
Lease liabilities, long term	27,824
Other non-current liabilities	10,633	11,398
Total liabilities	545,430	524,788
Stockholders' equity
Common stock, $0.001 par value, 130,000,000 shares authorized 52,374,248 and 52,316,583 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively	52	52
Additional paid-in capital	373,707	369,637
Accumulated other comprehensive earnings (loss), net of tax	1,427	(3,158)
Retained earnings	104,832	86,492
Total stockholders' equity	480,018	453,023
Total liabilities and stockholders' equity	$ 1,025,448	$ 977,811

Condensed Consolidated Statements of Earnings - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues
Total revenues	$ 85,474	$ 90,429
Costs and expenses
Cost of product sales	3,684	3,278
Research and development	15,394	18,908
Selling, general and administrative	40,968	36,849
Total costs and expenses	60,046	59,035
Operating earnings	25,428	31,394
Other expenses, net	(1,189)	(212)
Earnings before income taxes	24,239	31,182
Income tax expense	5,899	4,830
Net earnings	$ 18,340	$ 26,352
Earnings per share
Basic (in dollars per share)	$ 0.35	$ 0.51
Diluted (in dollars per share)	$ 0.34	$ 0.49
Weighted-average shares outstanding
Basic (in shares)	52,336,443	51,536,474
Diluted (in shares)	53,985,385	53,788,346
Product
Revenues
Total revenues	$ 83,099	$ 89,120
Royalty
Revenues
Total revenues	$ 2,375	$ 1,309

Condensed Consolidated Statements of Comprehensive Earnings - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Condensed Consolidated Statements of Comprehensive Earnings
Net earnings	$ 18,340	$ 26,352
Other comprehensive earnings (loss)
Unrealized gain (loss) on marketable securities, net of tax	4,585	(1,544)
Other comprehensive earnings (loss)	4,585	(1,544)
Comprehensive earnings	$ 22,925	$ 24,808

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Condensed Consolidated Statements of Changes in Stockholder's Equity - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Earnings (Loss)	Retained Earnings (Accumulated Deficit)	Total
Increase (Decrease) in Stockholders' Equity
Cumulative-effect of adoption of ASU \| ASU 2014-09				$ 2,322	$ 2,322
Adjusted Balance	$ 51	$ 294,999	$ (747)	(24,501)	269,802
Beginning balance at Dec. 31, 2017	$ 51	294,999	(747)	(26,823)	267,480
Beginning balance (in shares) at Dec. 31, 2017	51,314,850
Increase (Decrease) in Stockholders' Equity
Share-based compensation		2,635			2,635
Exercise of stock options	$ 1	2,857			2,858
Exercise of stock options (in shares)	319,141
Equity component of convertible notes issuance, net of tax		56,215			56,215
Purchases of convertible note hedges, net of tax		(70,137)			(70,137)
Issuance of warrants		65,688			65,688
Net earnings				26,352	26,352
Unrealized gains (loss) on marketable securities, net of tax			(1,544)		(1,544)
Ending balance at Mar. 31, 2018	$ 52	352,257	(2,291)	1,851	351,869
Ending balance (in shares) at Mar. 31, 2018	51,633,991
Adjusted Balance at Dec. 31, 2017	51,314,850
Beginning balance at Dec. 31, 2018	$ 52	369,637	(3,158)	86,492	453,023
Beginning balance (in shares) at Dec. 31, 2018	52,316,583
Increase (Decrease) in Stockholders' Equity
Share-based compensation		3,287			3,287
Exercise of stock options		783			783
Exercise of stock options (in shares)	57,665
Net earnings				18,340	18,340
Unrealized gains (loss) on marketable securities, net of tax			4,585		4,585
Ending balance at Mar. 31, 2019	$ 52	$ 373,707	$ 1,427	$ 104,832	$ 480,018
Ending balance (in shares) at Mar. 31, 2019	52,374,248

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operating activities
Net earnings	$ 18,340	$ 26,352
Adjustments to reconcile net earnings to net cash provided by operating activities:
Realized loss on sales of securities	(8)
Depreciation and amortization	1,679	1,707
Amortization of operating lease assets	879
Amortization of deferred financing costs and debt discount	3,848	612
Amortization of premium/discount on marketable securities	(1,094)	89
Non-cash interest expense	1,437	701
Non-cash royalty revenue	(1,576)	(1,300)
Share-based compensation expense	3,287	2,635
Deferred income tax (benefit) provision	279	(1,120)
Changes in operating assets and liabilities:
Accounts receivable	23,013	(798)
Inventories	(859)	(2,771)
Prepaid expenses and other current assets	(1,799)	(62)
Other non-current assets	(196)	(342)
Accounts payable	4,045	(3,440)
Accrued product returns and rebates	(18,863)	4,691
Accrued expenses and other current liabilities	(3,177)	(1,132)
Income taxes payable	4,856	327
Other non-current liabilities	(1,098)	984
Net cash provided by operating activities	32,993	27,133
Cash flows from investing activities
Purchases of marketable securities	(150,167)	(57,757)
Sales and maturities of marketable securities	47,143	7,343
Purchases of property and equipment	(221)	(253)
Deferred legal fees	(1)	(343)
Net cash used in investing activities	(103,246)	(51,010)
Cash flows from financing activities
Proceeds from issuance of convertible notes		402,500
Convertible notes issuance financing costs		(10,435)
Proceeds from issuance of warrants		65,688
Purchases of convertible note hedges		(92,897)
Proceeds from issuance of common stock	783	2,857
Net cash provided by financing activities	783	367,713
Net change in cash and cash equivalents	(69,470)	343,836
Cash and cash equivalents at beginning of year	192,248	100,304
Cash and cash equivalents at end of period	122,778	444,140
Supplemental cash flow information
Cash paid for interest on convertible notes	1,258
Income taxes paid	800	5,623
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	1,313	1,385
Non-cash investing and financing activities
Deferred legal fees included in accounts payable and accrued expenses	250	$ 304
Lease assets and tenant receivable obtained for new operating leases	$ 17,136

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2019

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s condensed consolidated financial statements include the accounts of Supernus Pharmaceuticals, Inc., Supernus Europe Ltd., Biscayne Neurotherapeutics, Inc. and its wholly-owned subsidiary, Biscayne Neurotherapeutics Australia Pty Ltd., collectively referred to herein as “Supernus” or “the Company.” All significant intercompany transactions and balances have been eliminated in consolidation.

The Company’s unaudited condensed consolidated financial statements have been prepared in accordance with the requirements of the U.S. Securities and Exchange Commission (SEC) for interim financial information. As permitted under Generally Accepted Accounting Principles in the United States (U.S. GAAP), certain notes and other information have been omitted from the interim unaudited condensed consolidated financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the Company’s most recent annual report on Form 10-K for the year ended December 31, 2018, filed with the SEC.

In management’s opinion, the condensed consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the Company’s financial position, results of operations and cash flows. The results of operations for any interim period are not necessarily indicative of the Company’s future quarterly or annual results.

The Company, which is primarily located in the United States (U.S.), operates in one operating segment.

Use of Estimates

The Company bases its estimates on: historical experience; various forecasts; information received from its service providers; and other assumptions that the Company believes are reasonable under the circumstances. Actual results could differ materially from the Company’s estimates. The Company evaluates the methodology employed in its estimates on an ongoing basis.

Revenue Recognition

The Company recognizes revenue when control of goods or provision of services are transferred to the Company's customers, in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The Company does not adjust revenue for any financing effects for transactions where the Company expects the period between the transfer of the goods or services and collection to be less than one year.

There were no contract assets or liabilities recorded as of March 31, 2019.

Revenue from Product Sales

The Company’s products are distributed through a third party fulfillment center. The Company’s customers, who are primarily pharmaceutical wholesalers and distributors, purchase product to fulfill orders from retail pharmacy chains and independent pharmacies of varying size and buying power. The Company recognizes gross revenue when its products are shipped from its fulfillment center to its customers and the customers take control of the products. The Company’s customers take control of the products, including title and ownership, upon physical receipt of the products at their facilities.

Product sales are recorded net of various forms of variable consideration, including estimated rebates, discounts, allowances, and an estimated liability for future product returns (collectively, “sales deductions”).

Variability in the net transaction price for the Company’s products primarily arises from sales deductions, as described below. Significant judgment is required in estimating sales deductions. In estimating sales deductions the Company considers: historical experience; current contract prices under applicable programs; unbilled claims; processing time lags; and inventory levels in the distribution channel. The Company adjusts its estimates of revenue either when the most likely amount of consideration it expects to receive changes, or when the consideration becomes fixed.

If actual results in the future vary from estimates, the Company adjusts these estimates. These adjustments could materially affect net product sales and earnings in the period that such adjustments become known.

Sales Deductions

Sales deductions are primarily comprised of rebates, product returns and sales discounts. The Company records product sales net of the following sales deductions:

Rebates: Rebates are discounts which the Company pays under either private sector or public sector health care programs. Public sector rebate programs encompass: various Medicaid Drug Rebate Programs; Medicare Coverage Gap Programs; and programs covering public health service institutions and government entities. All federal employees and agencies purchase drugs under the Federal Supply Schedule. Private sector rebate programs include: contractual agreements with managed care providers, under which the Company pays fees to gain access to that provider's patient drug formulary; Company sponsored programs, under which the Company defrays or eliminates patient co-payment charges that the patient would otherwise pay to their managed care provider. Rebates paid under public sector programs are generally mandated under law, whereas private sector rebates are generally contractually negotiated by the Company with managed care providers.

Rebates are owed upon dispensing product to a patient (i.e., filling a prescription. The accrual balance consists of three components). First, because rebates are generally invoiced and paid quarterly in arrears, the accrual balance consists of an estimate of the amount expected to be incurred for prescriptions dispensed in the current quarter. Second, the accrual balance also includes an estimate for known or estimated prior quarters' unpaid rebates, to cover prescriptions dispensed in past quarters. Third, the accrual balance includes an estimate for rebates that will be prospectively owed, for prescriptions filled in future quarters (i.e., for product which has been sold to wholesalers or distributors, and which resides either as wholesaler/distributor inventory, or is held as inventory at pharmacies).

Because the period from the date on which the prescription is filled to the date the Company receives and pays the invoice varies, the Company's estimates of expected rebate claims vary by program and by type of customer. For each of its products, the Company bases its estimates of expected rebate claims on multiple factors, including historical levels of deductions; contractual terms with managed care providers; actual and anticipated changes in product price; prospective changes in managed care fee for service contractual agreements; prospective changes in co-pay assistance programs; and anticipated changes in program utilization rates (i.e., patient participation rates).

The sensitivity of the Company's estimates can vary by program and by type of customer. If actual rebates vary from estimated amounts, the Company may need to adjust the balances of such accrued rebates to reflect actual expenditures with respect to these programs. These changes could materially affect net product sales and earnings in the period of adjustment. The Company records an estimated liability for rebates at the time the customer takes title to the product (i.e., at the time of sale to wholesalers/distributors), and records this liability as a reduction to gross product sales and an increase in Accrued product returns and rebates in current liabilities.

Returns: Sale of the Company's products are not subject to a general right of return. Product that has been used to fill patient prescriptions is no longer subject to any right of return. However, the Company will accept return of product that is damaged or defective when shipped from its warehouse. In addition, the Company will accept return of expired product six months prior to and up to 12 months subsequent to the product's expiry date. Expired or defective returned product cannot be re-sold and is therefore destroyed.

The Company estimates the liability for returns based on the actual returns experience for its two commercial products, in conjunction with industry experience for return of similar products (i.e., ambient temperature storage for oral formulations). Because the Company's products have not reached maturity, the return rate of its products has and is expected to continue to vary. The Company records an estimated liability for product returns at the time the customer takes title to the product (i.e., at time of sale) as a reduction to gross product sales and an increase in Accrued product returns and rebates in current liabilities.

The Company's estimated liability for product returns is also affected by price increases taken subsequent to the date of sale. The Company's products have a shelf life of 36 to 48 months from date of manufacture. Because of the extended shelf life coupled with its return policy, there typically is a significant time lag between the time at which the product is sold and when the Company issues credit on expired product. The Company's policy generally permits product returns to be processed at current wholesaler price rather than historical price. Therefore, price increase(s) taken during the current period increase(s) the provision for product returns because it affects the estimated liability for product returns for both sales made in the current period as well as sales made in prior periods. When the Company adjusts its estimates for product returns, either favorably or unfavorably, this affects product sales and earnings in the period of adjustment.

Sales discounts: Distributors and wholesalers of pharmaceutical products are generally offered various forms of consideration, including allowances, service fees and prompt payment discounts, for distributing products. Distributor and wholesaler allowances and service fees arise from contractual agreements and are estimated as a percentage of the price at which the Company sells product to them. In addition, they are offered a prompt pay discount for payment within a specified period.

The Company accounts for these discounts at the time of sale as a reduction to gross product sales, and records these amounts as an Accounts receivable valuation allowance.

Customer orders are generally fulfilled within a few days of receipt, resulting in minimal order backlog. Open purchase orders for products from customers are expected to be fulfilled within the next 12 months. There are no minimum product purchase requirements.

License Revenues

License and Collaboration Agreements

The Company has entered into collaboration agreements to commercialize both Oxtellar XR and Trokendi XR outside of the U.S., which involve the right to use the Company’s intellectual property as a functional license. These agreements generally include an up-front license fee and ongoing milestone payments upon the achievement of specific events. These agreements may also require minimum royalty payments based on sales of products developed from the applicable intellectual property.

Up-front license fees are recognized once the license has been delivered to the customer.

Milestones are a form of variable consideration that are recognized when either the underlying events have been achieved (i.e., event-based milestone) or the sales-based targets have been met by the collaborative partner (i.e., sales-based milestone). Both types of milestone payments are non-refundable. The Company evaluates whether achieving the milestones is considered probable and estimates the amount to be included in the transaction price using the most likely amount method. This can involve management's judgment that includes assessing factors that are outside of the Company's influence, such as: likelihood of regulatory success; availability of third party information; and expected duration of time until achievement of event. These factors are evaluated based on the specific facts and circumstances. If it is probable that a significant revenue reversal would not occur, the value of the associated milestone is included in the transaction price.

Event-based milestones are recognized in the period that the related event, such as regulatory approval, occurs. Milestone payments that are not within the control of the Company, such as approval from regulatory authorities, or where attainment of the specified event is dependent on the success of a third-party, are not considered probable of being achieved until the specified event occurs. Sales-based milestones are recognized as revenue when the sales-based target is achieved. Revenue is recognized from the satisfaction of performance obligations in the amount billable to the customer.

Revenue associated with future milestones will be recognized when the related event occurs or sales-based target is achieved. There are no guaranteed minimum amounts owed to the Company related to license and collaboration agreements.

Royalty Revenues

The Company recognizes non-cash royalty revenue for amounts earned pursuant to a royalty agreement with United Therapeutics Corporation (United Therapeutics) that involves the right to use the Company’s intellectual property as a functional license. In 2014, the Company sold certain of these royalty rights to Healthcare Royalty Partners III, L.P. (HC Royalty) (see Note 17, Commitments and Contingencies). Accordingly, the Company records non-cash royalty revenue based on estimated product sales by United Therapeutics, in which those product sales result in payments made from United Therapeutics to HC Royalty in connection with these agreements.

Royalty revenue also includes royalty amounts received from collaboration partners, including from Shire Plc (Shire) (now a subsidiary of Takeda Pharmaceutical Company Ltd), based on net product sales of Shire's product, Mydayis, in the current period. Royalty revenue is only recognized when the underlying product sale by Shire occurs. The Shire arrangement also involves the right to use the Company's intellectual property as a functional license.

There are no guaranteed minimum amounts owed to the Company related to any royalty revenue agreement.

Preclinical Study and Clinical Trial Accruals

The Company estimates preclinical study and clinical trial expenses based on the services performed pursuant to contracts with research institutions, clinical investigators, clinical research organizations (CROs) and other service providers that conduct activities on the Company’s behalf. In recording service fees, the Company estimates the time period over which the related services are performed and compares the level of effort expended through the end of each period with the cumulative expenses recorded and payments made for such services. As appropriate, the Company accrues additional service fees or defers any non-refundable advance payments until the related services are performed. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company adjusts its accrued expenses or its deferred advance payments accordingly. If the Company later determines that it no longer expects the services associated with a nonrefundable advance payment to be rendered, the remaining portion of that advance payment is charged to expense in the period in which such determination is made.

Share-Based Compensation

The Company recognizes share-based compensation expense over the service period using the straight-line method. Employee share-based compensation is measured based on estimated fair value as of the grant date. The Company uses the Black-Scholes option-pricing model in calculating the fair value of option grants as of the grant date. The Company uses the following assumptions for estimating fair value of option grants:

Fair Value of Common Stock—The fair value of the common stock underlying the option grants is determined based on observable market prices of the Company's common stock.

Expected Volatility—Volatility is a measure of the amount by which the Company’s share price has fluctuated (historical volatility) or is expected to fluctuate (expected volatility) during a period. Beginning in the first quarter of 2019, the Company uses the historical volatility of its common stock to measure expected volatility for future option grants. Prior to 2019, the Company used the volatility of the common stock of several public entities of similar size, complexity, and stage of development. Prior to the first quarter of 2019, volatility was estimated using the volatility of the stock of these companies, as well as taking into consideration the Company's actual volatility since the Company's IPO in 2012.

Dividend Yield—The Company has never declared or paid dividends, and has no plans to do so in the foreseeable future.

Expected Term— This is the period of time during which options are expected to remain unexercised. Options have a maximum contractual term of ten years. Beginning in the first quarter of 2019, the Company determines the average expected life of stock options using its historical experience. Prior to the first quarter of 2019, the Company determined the average expected life of stock options according to the "simplified method", as described in Staff Accounting Bulletin 110, which is the mid-point between the vesting date and the end of the contractual term.

Risk-Free Interest Rate—This is the U.S. Treasury note rate as of the week each option grant is issued, with a term that most closely resembles the expected term of the option.

Expected Forfeiture Rate—Forfeitures are accounted for as they occur.

Self-insurance Liabilities

As of January 1, 2019, the Company self-insures its employee medical insurance liability. The self-insurance liability is undiscounted and determined actuarially. It is based on claims filed, historical and industry claims experience, and an estimate of claims incurred but not yet paid. The Company has established stop-loss amounts that limit the Company’s further exposure after a claim reaches the designated stop-loss threshold. The stop-loss limit for self-insured employee medical claims is $150,000 per employee per year.

The Company recorded self-insurance liability of approximately $515,000 as of March 31, 2019 in Accrued expenses and other current liabilities in the condensed consolidated balance sheets.

Advertising Expense

Advertising expense includes costs of promotional materials and activities, such as marketing materials, marketing programs and speaker programs. The costs of the Company’s advertising efforts are expensed as incurred.

The Company incurred approximately $9.9 million and $7.9 million in advertising costs for the three month periods ended March 31, 2019 and 2018, respectively. These expenses are recorded in Selling, general and administrative expenses in the condensed consolidated statements of earnings.

Recently Issued Accounting Pronouncements

Accounting Pronouncements Adopted

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, “Leases (Topic 842)” and its related amendments (New Lease Standard). The New Lease Standard requires a lessee to recognize a right-of-use (ROU) lease asset and a corresponding lease liability on the balance sheet. The Company adopted the New Lease Standard on January 1, 2019 using the modified retrospective method, which applies the provision of the New Lease Standard at the effective date without adjusting comparative periods presented. In addition, the Company elected the package of practical expedients permitted under the transition guidance within the New Lease Standard which, among other things, allowed the Company to carry forward the historical lease classification.

The adoption of the New Lease Standard resulted in the recognition of lease assets and lease liabilities for operating leases as of January 1, 2019 of approximately $4.0 million. Financial reporting for periods on or after January 1, 2019 are presented under the new guidance. Prior period amounts are not adjusted and continue to be reported in accordance with previous guidance. The standard did not materially impact the Company’s condensed consolidated net earnings and had no impact on cash flows (see Note 14, Leases).

New Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326), which requires credit losses on financial assets measured on an amortized cost basis to be presented at the net amount expected to be collected, rather than based on incurred losses. Further, credit losses on available-for-sale debt securities should be recorded through an allowance for credit losses, limited to the amount by which fair value is below amortized cost. The new standard also requires enhanced disclosure of credit risk associated with respective assets.

The standard is effective for fiscal years beginning after December 15, 2019, for interim and annual periods within those years, with early adoption permitted. The Company is currently assessing the impact of this new standard. The Company does not expect it to have a material impact.

Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2019

Fair Value of Financial Instruments

Fair Value of Financial Instruments

3. Fair Value of Financial Instruments

The fair value of an asset or liability represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

The Company reports assets and liabilities measured at fair value using a three level fair value hierarchy that prioritizes the inputs used to measure fair value. The three levels of inputs used to measure fair value are as follows:

Level 1—Inputs are unadjusted quoted prices in active markets for identical assets that the Company has the ability to access as of the measurement date.

Level 2—Inputs are: quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; inputs other than quoted prices that are observable for the asset or liability (e.g., interest rates, yield curves, etc.); and inputs that are derived principally from or corroborated by observable market data by correlation or other means (i.e., market corroborated inputs).

Level 3—Unobservable inputs that reflect the Company’s own assumptions, based on the best information available, including the Company’s own data.

The Company's financial assets that are required to be measured at fair value on a recurring basis are as follows, in thousands of dollars:


	Fair Value Measurements at
	March 31, 2019
	(unaudited)
					Significant
	Total Fair		Quoted Prices		Other		Significant
	Value at		in Active Markets		Observable		Unobservable
	March 31,		for Identical Assests		Inputs		Inputs
	2019		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	122,778	$	122,778	$	—	$	—
Marketable securities
Corporate debt securities		170,165		246		169,919		—
Long term marketable securities
Corporate debt securities		521,398		450		520,948		—
Government debt securities		1,153		—		1,153		—
Other non-current assets
Marketable securities - restricted (SERP)		375		1		374		—
Total assets at fair value	$	815,869	$	123,475	$	692,394	$	—


	Fair Value Measurements at
	December 31, 2018
					Significant
	Total Fair		Quoted Prices		Other		Significant
	Value at		in Active Markets		Observable		Unobservable
	December 31,		for Identical Assests		Inputs		Inputs
	2018		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	192,248	$	192,248	$	—	$	—
Marketable securities
Corporate debt securities		163,770		245		163,525		—
Long term marketable securities
Corporate debt securities		415,650		445		415,205		—
Government debt securities		3,148		—		3,148		—
Other non-current assets
Marketable securities - restricted (SERP)		326		1		325		—
Total assets at fair value	$	775,142	$	192,939	$	582,203	$	—

Level 1 assets include cash held at banks, certificates of deposit, money market funds, and investment grade corporate and government debt securities.

Level 2 assets include the SERP (Supplemental Executive Retirement Plan) assets, commercial paper and investment grade corporate and government debt securities and other fixed income securities. Level 2 securities are valued using third-party pricing sources that apply applicable inputs and other relevant data in their models to estimate fair value. The fair value of the restricted marketable securities is recorded in Other Assets in the condensed consolidated balance sheets.

The carrying amounts of other financial instruments, including accounts receivable, accounts payable and accrued expenses approximate fair value due to their short-term maturities.

The following table sets forth the Company’s financial liabilities that are not carried at fair value, in thousands of dollars:


	March 31, 2019				December 31, 2018
	(unaudited)
	Carrying Value		Fair Value		Carrying Value		Fair Value
2023 Notes	$	333,310	$	388,664	$	329,462	$	375,834

The fair value is estimated based on actual trade information as well as quoted prices provided by bond traders and is characterized within Level 2 of the fair value hierarchy.

Unrestricted available-for-sale marketable securities held by the Company are as follows, in thousands of dollars:


	March 31, 2019		December 31, 2018
	(unaudited)
Corporate and government debt securities
Amortized cost	$	690,853	$	586,726
Gross unrealized gains		2,905		55
Gross unrealized losses		(1,042)		(4,213)
Total fair value	$	692,716	$	582,568

The contractual maturities of the unrestricted available-for-sale marketable securities held by the Company are as follows, in thousands of dollars:


	March 31,
	2019
	(unaudited)
Less than 1 year	$	170,165
1 year to 2 years		170,246
2 years to 3 years		181,872
3 years to 4 years		170,433
Greater than 4 years		—
Total	$	692,716

The Company has not experienced any other-than-temporary losses on its marketable securities.

- Definition

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

+ References + Details

Convertible Senior Secured Notes

3 Months Ended

Mar. 31, 2019

Convertible Senior Notes Due 2023

Convertible Senior Secured Notes

9. Convertible Senior Notes Due 2023

The 0.625% Convertible Senior Notes Due 2023 (2023 Notes), which were issued in March 2018, bear interest at an annual rate of 0.625%, payable semi-annually in arrears on April 1 and October 1 of each year. The 2023 Notes will mature on April 1, 2023, unless earlier converted or repurchased by the Company. The Company may not redeem the 2023 Notes at its option before maturity.

The 2023 Notes were issued pursuant to an Indenture between the Company and Wilmington Trust, National Association, as trustee. The Indenture includes customary terms and covenants, including certain events of default upon which the 2023 Notes may be due and payable immediately. The Indenture does not contain any financial or operating covenants or restrictions on the payment of dividends, the issuance of other indebtedness or the issuance or repurchase of securities by the Company.

The Company will settle conversions by paying or delivering, as applicable, cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at its election, based on the applicable conversion rate. The initial conversion rate is 16.8545 shares per $1,000 principal amount of the 2023 Notes, which represents an initial conversion price of approximately $59.33 per share, and is subject to adjustment as specified in the Indenture. In the event of conversion, if converted in cash, the holders would forgo all future interest payments, any unpaid accrued interest and the possibility of further stock price appreciation.

If a “make-whole fundamental change,” as defined in the Indenture, occurs, then the Company will in certain circumstances increase the conversion rate for a specified period of time. If a “fundamental change,” as defined in the Indenture, occurs, then noteholders may require the Company to repurchase their 2023 Notes at a cash repurchase price equal to the principal amount of the 2023 Notes to be repurchased, plus accrued and unpaid interest, if any.

Contemporaneous with the issuance of the 2023 Notes, the Company also entered into separate privately negotiated convertible note hedge transactions (collectively, the Convertible Note Hedge Transactions) with each of the call spread counterparties. The Company issued 402,500 convertible note hedge options. In the event that shares or cash are deliverable to holders of the 2023 Notes upon conversion at limits defined in the Indenture, counterparties to the convertible note hedges will be required to deliver up to approximately 6.8 million shares of the Company’s common stock or pay cash to the Company in a similar amount as the value that the Company delivers to the holders of the 2023 Notes based on a conversion price of $59.33 per share.

Concurrently with entering into the Convertible Note Hedge Transactions, the Company also entered into separate privately negotiated warrant transactions (collectively, the Warrant Transactions) with each of the call spread counterparties. The Company issued a total of 6,783,939 warrants. The warrants entitle the holder to one share per warrant at the strike price through 2023. The strike price of the Warrant Transactions will initially be $80.9063 per share of the Company’s common stock (subject to adjustment).

The Convertible Note Hedge Transactions are expected to generally reduce the potential dilution with respect to the Company’s common stock upon conversion of the 2023 Notes and/or offset any potential cash payments the Company is required to make in excess of the principal amount of converted 2023 Notes, as the case may be. The Warrant Transactions are intended to partially offset the cost to the Company of the purchased Convertible Note Hedge Transactions; however, the Warrant Transactions could have a dilutive effect with respect to the Company’s common stock to the extent that the market price per share of the Company’s common stock, as measured under the terms of the Warrant Transactions, exceeds the strike price of the warrants.

The liability component of the 2023 Notes consists of the following, in thousands of dollars:


	March 31,		December 31,
	2019		2018
	(unaudited)
Principal amount of the 2023 Notes	$	402,500	$	402,500
Debt discount		(76,434)		(76,434)
Deferred financing costs		(8,452)		(8,452)
Accretion of debt discount and deferred financing costs		15,696		11,848
Total carrying value	$	333,310	$	329,462

No 2023 Notes were converted as of March 31, 2019.

Share-Based Payments

3 Months Ended

Mar. 31, 2019

Share-Based Payments

Share-Based Payments

11. Share-Based Payments

Share-based compensation expense is as follows, in thousands of dollars:


	Three Months ended March 31,
	2019		2018
	(unaudited)
Research and development	$	574	$	418
Selling, general and administrative		2,713		2,217
Total	$	3,287	$	2,635

The following table summarizes stock options and SAR activities:


				Weighted-
				Average
		Weighted-		Remaining
	Number of	Average		Contractual
	Options	Exercise Price		Term (in years)

Outstanding, December 31, 2018	3,916,963	$	19.98	7.10
Granted (unaudited)	831,835	$	36.75
Exercised (unaudited)	(57,665)	$	13.57
Forfeited (unaudited)	(10,437)	$	30.69
Outstanding, March 31, 2019 (unaudited)	4,680,696	$	23.01	7.40

As of December 31, 2018:
Vested and expected to vest	3,916,963	$	19.98	7.10
Exercisable	1,889,947	$	12.47	5.96

As of March 31, 2019:
Vested and expected to vest (unaudited)	4,680,696	$	23.01	7.40
Exercisable (unaudited)	2,605,591	$	15.33	6.22

Earnings per Share

3 Months Ended

Mar. 31, 2019

Earnings per Share

Earnings per Share

12. Earnings per Share

Basic earnings per share (EPS) is calculated using the weighted-average number of common shares outstanding. Diluted earnings per share is calculated using the weighted-average number of common shares outstanding including the dilutive effect of the Company's stock option grants, stock appreciation rights (SAR), warrants, employee stock purchase plan (ESPP) awards and the 2023 Notes, as determined per the treasury stock method.

The following common stock equivalents are excluded in the calculation of diluted earnings per share because their inclusion would be anti-dilutive, as applied to the earnings from continuing operations, and as applicable to common stockholders, for the three month periods ended March 31, 2019 and 2018:


	Three Months ended March 31,
	2019	2018
	(unaudited)
Warrants to purchase common stock	7,966,488	1,752,793
Convertible notes	239,272	22,634
Convertible notes hedges	240	23
Stock options, SAR and ESPP awards	608,948	208,661

The following table sets forth the computation of basic and diluted earnings per share for the three month periods ended March 31, 2019 and 2018, in thousands of dollars, except share and per share amounts:


	Three Months ended March 31,
	2019		2018
	(unaudited)
Numerator, in thousands:
Net earnings used for calculation of basic and diluted EPS	$	18,340	$	26,352

Denominator:
Weighted average shares outstanding, basic		52,336,443		51,536,474

Effect of dilutive potential common shares:
Stock options and SAR		1,648,942		2,251,872
Total dilutive potential common shares		1,648,942		2,251,872
Weighted average shares outstanding, diluted		53,985,385		53,788,346

Earnings per share, basic	$	0.35	$	0.51
Earnings per share, diluted	$	0.34	$	0.49

Leases

3 Months Ended

Mar. 31, 2019

Leases

Leases

14. Leases

The Company determines if an arrangement is a lease at inception. Some leases include options to terminate or to extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

The Company has lease arrangements that contain lease components (e.g., minimum rent payments) and non-lease components (e.g., maintenance, labor charges, etc.) and accounts for these components as a single lease component. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating leases are included in Lease assets, Accrued expenses and other current liabilities, and Lease liabilities, long term on the condensed consolidated balance sheets. Operating lease assets and lease liabilities are recognized at the commencement date, based on the present value of the future minimum lease payments over the lease term. Lease expense for operating leases is recognized as an operating cost. Leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company uses its incremental borrowing rate based on the information available at commencement date of the lease in determining the present value of future payments.

The Company has operating leases for its current headquarters office and lab space and for the fleet vehicles. The Company’s existing leases for its current headquarters office and lab space run through April 2020. The Company applies a portfolio approach for the fleet vehicle leases to effectively account for the operating lease assets and liabilities, given the volume of individual leases involved in the overall arrangement.

New Headquarters Lease

The Company entered into a new lease agreement, effective January 31, 2019, with Advent Key West, LLC (Landlord), for its new headquarters in Rockville, MD (Premises). The term of the new headquarters lease commenced on February 1, 2019 (the Commencement Date) and will continue until April 30, 2034, unless earlier terminated in accordance with the terms of the lease. The lease includes options to extend the lease for up to 10 years. Fixed rent with respect to the Premises begins on the Commencement Date; however, the Landlord agreed to a rent abatement from the Commencement Date through April 30, 2020. The initial fixed rental rate is approximately $195,000 per month for the first 12 months. The rate will automatically increase by 2% on each anniversary of the Commencement Date. Under the terms of the Lease, the Company provided a security deposit of approximately $195,000 and will be required to pay all utility charges for the Premises and its pro rata share of any operating expenses and real estate taxes.

The lease also provides for a tenant improvement allowance of approximately $10.2 million in aggregate. Any unspent tenant improvement allowance as of January 31, 2020 will be forfeited. The full amount of tenant improvement allowance was initially recorded in Prepaid expenses and other current assets in the condensed consolidated balance sheets.

Lease assets, lease-related assets and lease liabilities are as follows, in thousands of dollars:


		March 31,
		2019
		(unaudited)

Assets	Balance Sheet Classification
Operating leases	Lease assets	$	20,049
Tenant receivable	Prepaid expenses and other current assets		10,151
Total lease and lease-related assets		$	30,200
Liabilities
Current
Operating leases	Accrued expenses and other current liabilities	$	3,250
Non-current
Operating leases	Lease liabilities, long term		27,824
Total lease liabilities		$	31,074

Lease costs for the three month period ended March 31, 2019 is as follows, in thousands of dollars:


	Three Months ended
	March 31, 2019
	(unaudited)
Operating leases cost
Fixed lease cost	$	1,032
Variable lease cost		465
Total operating leases cost	$	1,497

Weighted average lease term and discount rate for the three month period ended March 31, 2019 are as follows:


	Three Months ended
		March 31, 2019
	(unaudited)

Weighted-average remaining lease term (years)
Operating leases		13.53
Weighted-average discount rate
Operating leases		4.37	%

Future minimum lease payments under non-cancellable leases as of March 31, 2019 are as follows, in thousands of dollars:


	Operating leases
Year ending December 31:
2019 (remaining)	$	2,512
2020		2,938
2021		2,527
2022		2,486
2023		2,536
Thereafter		29,371
Total future minimum lease payments	$	42,370
Less: Imputed interest (1)		11,296
Present value of lease liabilities	$	31,074

⁽¹⁾

Calculated using the interest rate for each lease.

Dislcosure Related to Periods Prior to Adoption of the New Lease Standard

Rent expense for the leased facilities and leased vehicles for the years ended December 31, 2018, 2017 and 2016 was approximately $3.6 million, $2.7 million and $2.7 million, respectively.

Future minimum lease payments under non-cancelable operating leases as of December 31, 2018 are as follows, in thousands of dollars:


Year ending December 31:
2019	$	3,400
2020		2,287
Thereafter		1,840
Total	$	7,527

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2019

Summary of Significant Accounting Policies

Basis of Presentation

The Company, which is primarily located in the United States (U.S.), operates in one operating segment.

Use of Estimates

Revenue Recognition

There were no contract assets or liabilities recorded as of March 31, 2019.

Revenue from Product Sales

Sales Deductions

Sales deductions are primarily comprised of rebates, product returns and sales discounts. The Company records product sales net of the following sales deductions:

The Company accounts for these discounts at the time of sale as a reduction to gross product sales, and records these amounts as an Accounts receivable valuation allowance.

License Revenues

License and Collaboration Agreements

Up-front license fees are recognized once the license has been delivered to the customer.

Royalty Revenues

There are no guaranteed minimum amounts owed to the Company related to any royalty revenue agreement.

Preclinical Study and Clinical Trial Accruals

Share-Based Compensation

Fair Value of Common Stock—The fair value of the common stock underlying the option grants is determined based on observable market prices of the Company's common stock.

Dividend Yield—The Company has never declared or paid dividends, and has no plans to do so in the foreseeable future.

Risk-Free Interest Rate—This is the U.S. Treasury note rate as of the week each option grant is issued, with a term that most closely resembles the expected term of the option.

Expected Forfeiture Rate—Forfeitures are accounted for as they occur.

Self-insurance Liabilities

The Company recorded self-insurance liability of approximately $515,000 as of March 31, 2019 in Accrued expenses and other current liabilities in the condensed consolidated balance sheets.

Advertising Expense

Recently Issued Accounting Pronouncements

Accounting Pronouncements Adopted

New Accounting Pronouncements Not Yet Adopted

Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2019

Fair Value of Financial Instruments

Schedule of fair value of the financial assets and liabilities

The Company's financial assets that are required to be measured at fair value on a recurring basis are as follows, in thousands of dollars:


	Fair Value Measurements at
	March 31, 2019
	(unaudited)
					Significant
	Total Fair		Quoted Prices		Other		Significant
	Value at		in Active Markets		Observable		Unobservable
	March 31,		for Identical Assests		Inputs		Inputs
	2019		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	122,778	$	122,778	$	—	$	—
Marketable securities
Corporate debt securities		170,165		246		169,919		—
Long term marketable securities
Corporate debt securities		521,398		450		520,948		—
Government debt securities		1,153		—		1,153		—
Other non-current assets
Marketable securities - restricted (SERP)		375		1		374		—
Total assets at fair value	$	815,869	$	123,475	$	692,394	$	—


	Fair Value Measurements at
	December 31, 2018
					Significant
	Total Fair		Quoted Prices		Other		Significant
	Value at		in Active Markets		Observable		Unobservable
	December 31,		for Identical Assests		Inputs		Inputs
	2018		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents	$	192,248	$	192,248	$	—	$	—
Marketable securities
Corporate debt securities		163,770		245		163,525		—
Long term marketable securities
Corporate debt securities		415,650		445		415,205		—
Government debt securities		3,148		—		3,148		—
Other non-current assets
Marketable securities - restricted (SERP)		326		1		325		—
Total assets at fair value	$	775,142	$	192,939	$	582,203	$	—

Schedule of financial liabilities that are not carried at fair value

The following table sets forth the Company’s financial liabilities that are not carried at fair value, in thousands of dollars:


	March 31, 2019				December 31, 2018
	(unaudited)
	Carrying Value		Fair Value		Carrying Value		Fair Value
2023 Notes	$	333,310	$	388,664	$	329,462	$	375,834

Schedule of unrestricted available-for-sale marketable securities

Unrestricted available-for-sale marketable securities held by the Company are as follows, in thousands of dollars:


	March 31, 2019		December 31, 2018
	(unaudited)
Corporate and government debt securities
Amortized cost	$	690,853	$	586,726
Gross unrealized gains		2,905		55
Gross unrealized losses		(1,042)		(4,213)
Total fair value	$	692,716	$	582,568

Schedule of contractual maturities of the unrestricted available-for-sale marketable securities held

The contractual maturities of the unrestricted available-for-sale marketable securities held by the Company are as follows, in thousands of dollars:


	March 31,
	2019
	(unaudited)
Less than 1 year	$	170,165
1 year to 2 years		170,246
2 years to 3 years		181,872
3 years to 4 years		170,433
Greater than 4 years		—
Total	$	692,716

Share-Based Payments (Tables)

3 Months Ended

Mar. 31, 2019

Share-Based Payments

Schedule of share-based compensation expense

Share-based compensation expense is as follows, in thousands of dollars:


	Three Months ended March 31,
	2019		2018
	(unaudited)
Research and development	$	574	$	418
Selling, general and administrative		2,713		2,217
Total	$	3,287	$	2,635

Summary of stock options and SAR activities


				Weighted-
				Average
		Weighted-		Remaining
	Number of	Average		Contractual
	Options	Exercise Price		Term (in years)

Outstanding, December 31, 2018	3,916,963	$	19.98	7.10
Granted (unaudited)	831,835	$	36.75
Exercised (unaudited)	(57,665)	$	13.57
Forfeited (unaudited)	(10,437)	$	30.69
Outstanding, March 31, 2019 (unaudited)	4,680,696	$	23.01	7.40

As of December 31, 2018:
Vested and expected to vest	3,916,963	$	19.98	7.10
Exercisable	1,889,947	$	12.47	5.96

As of March 31, 2019:
Vested and expected to vest (unaudited)	4,680,696	$	23.01	7.40
Exercisable (unaudited)	2,605,591	$	15.33	6.22

Earnings per Share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings per Share

Schedule of common stock equivalents excluded in the calculation of diluted earnings per share


	Three Months ended March 31,
	2019	2018
	(unaudited)
Warrants to purchase common stock	7,966,488	1,752,793
Convertible notes	239,272	22,634
Convertible notes hedges	240	23
Stock options, SAR and ESPP awards	608,948	208,661

Schedule of computation of basic and diluted earnings per share


	Three Months ended March 31,
	2019		2018
	(unaudited)
Numerator, in thousands:
Net earnings used for calculation of basic and diluted EPS	$	18,340	$	26,352

Denominator:
Weighted average shares outstanding, basic		52,336,443		51,536,474

Effect of dilutive potential common shares:
Stock options and SAR		1,648,942		2,251,872
Total dilutive potential common shares		1,648,942		2,251,872
Weighted average shares outstanding, diluted		53,985,385		53,788,346

Earnings per share, basic	$	0.35	$	0.51
Earnings per share, diluted	$	0.34	$	0.49

Leases (Tables)

3 Months Ended

Mar. 31, 2019

Leases

Schedule of balance sheet information related to leases

Lease assets, lease-related assets and lease liabilities are as follows, in thousands of dollars:


		March 31,
		2019
		(unaudited)

Assets	Balance Sheet Classification
Operating leases	Lease assets	$	20,049
Tenant receivable	Prepaid expenses and other current assets		10,151
Total lease and lease-related assets		$	30,200
Liabilities
Current
Operating leases	Accrued expenses and other current liabilities	$	3,250
Non-current
Operating leases	Lease liabilities, long term		27,824
Total lease liabilities		$	31,074

Schedule of lease costs

Lease costs for the three month period ended March 31, 2019 is as follows, in thousands of dollars:


	Three Months ended
	March 31, 2019
	(unaudited)
Operating leases cost
Fixed lease cost	$	1,032
Variable lease cost		465
Total operating leases cost	$	1,497

Schedule of weighted average remaining lease term and discount rate information

Weighted average lease term and discount rate for the three month period ended March 31, 2019 are as follows:


	Three Months ended
		March 31, 2019
	(unaudited)

Weighted-average remaining lease term (years)
Operating leases		13.53
Weighted-average discount rate
Operating leases		4.37	%

Schedule of maturities of operating lease liabilities

Future minimum lease payments under non-cancellable leases as of March 31, 2019 are as follows, in thousands of dollars:


	Operating leases
Year ending December 31:
2019 (remaining)	$	2,512
2020		2,938
2021		2,527
2022		2,486
2023		2,536
Thereafter		29,371
Total future minimum lease payments	$	42,370
Less: Imputed interest (1)		11,296
Present value of lease liabilities	$	31,074

⁽¹⁾

Calculated using the interest rate for each lease.

Schedule of future minimum lease payments under non-cancelable operating leases

Future minimum lease payments under non-cancelable operating leases as of December 31, 2018 are as follows, in thousands of dollars:


Year ending December 31:
2019	$	3,400
2020		2,287
Thereafter		1,840
Total	$	7,527

Fair Value of Financial Instruments - Carrying Value (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair value of financial instruments
Carrying value	$ 333,310	$ 329,462
Total Fair Value \| Recurring
Assets:
Cash and cash equivalents	122,778	192,248
Marketable securities
Corporate debt securities	170,165	163,770
Long term marketable securities
Corporate debt securities	521,398	415,650
Government debt securities	1,153	3,148
Other non-current assets
Marketable securities - restricted (SERP)	375	326
Total assets at fair value	815,869	775,142
Quoted Prices in Active Markets for Identical Assets (Level 1) \| Recurring
Assets:
Cash and cash equivalents	122,778	192,248
Marketable securities
Corporate debt securities	246	245
Long term marketable securities
Corporate debt securities	450	445
Other non-current assets
Marketable securities - restricted (SERP)	1	1
Total assets at fair value	123,475	192,939
Significant Other Observable Inputs (Level 2) \| Recurring
Marketable securities
Corporate debt securities	169,919	163,525
Long term marketable securities
Corporate debt securities	520,948	415,205
Government debt securities	1,153	3,148
Other non-current assets
Marketable securities - restricted (SERP)	374	325
Total assets at fair value	692,394	582,203
0.625% Convertible Senior Notes due 2023 \| Significant Other Observable Inputs (Level 2)
Fair value of financial instruments
Carrying value	333,310	329,462
Fair value	$ 388,664	$ 375,834

Fair Value of Financial Instruments - Unrestricted Marketable Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Fair Value of Financial Instruments
Corporate and government debt securities, Amortized cost	$ 690,853	$ 586,726
Corporate and government debt securities, Gross unrealized gains	2,905	55
Corporate and government debt securities, Gross unrealized losses	(1,042)	(4,213)
Corporate and government debt securities, Fair Value	692,716	582,568
Contractual maturities of the unrestricted available for sale marketable securities held
Less than 1 year	170,165
1 year to 2 years	170,246
2 years to 3 years	181,872
3 years to 4 years	170,433
Corporate debt securities, Fair Value	$ 692,716	$ 582,568

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accrued Expenses and Other Current Liabilities
Accrued clinical trial and clinical supply costs	$ 15,420	$ 14,034
Accrued compensation	11,545	13,546
Accrued professional fees	3,336	3,706
Accrued interest expense		650
Accrued product costs	751	38
Lease liabilities, current	3,250
Other accrued expenses	2,305	4,561
Total	$ 36,607	$ 36,535

Convertible Senior Notes Due 2023 (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Notes payable
Total cost of the convertible note hedge transactions			$ 92,897
Strike price of the Warrant Transactions (in dollars per share)	$ 80.9063		$ 80.9063
Proceeds from sale of warrants			$ 65,688
Debt financing costs			$ 10,435
Liability component of the 2023 Notes
December 31, 2018 carrying value		$ 333,310		$ 329,462
2023 Notes
Notes payable
Aggregate principal amount		$ 402,500		402,500
Interest rate (as a percent)	0.625%		0.625%
Conversion rate for the Notes (in shares)		16.8545
Conversion ratio, principal amount		$ 1,000
Conversion price, per share of Common Stock	$ 59.33	$ 59.33	$ 59.33
Convertible note hedge options issued (in shares)	402,500
Shares of common stock issued upon conversion of Notes	6,800,000
Warrants issued	6,783,939		6,783,939
Number of shares per warrant entitled to holder	1
Liability component of the 2023 Notes
Principal amount of the 2023 Notes		$ 402,500		402,500
Debt discount		(76,434)		(76,434)
Deferred financing costs		(8,452)		(8,452)
Accretion of debt discount and deferred financing costs		15,696		11,848
December 31, 2018 carrying value		333,310		$ 329,462
Conversion of debt to equity		$ 0

Share-Based Payments - Activity (Details) - Stock option and Stock Appreciation Rights - $ / shares	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Number of Options and SAR
Outstanding at the beginning of the period (in shares)	3,916,963
Granted (in shares)	831,835
Exercised (in shares)	(57,665)
Forfeited (in shares)	(10,437)
Outstanding at the end of the period (in shares)	4,680,696	3,916,963
Vested and expected to vest (in shares)	4,680,696	3,916,963
Exercisable (in shares)	2,605,591	1,889,947
Weighted-Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)	$ 19.98
Granted (in dollars per share)	36.75
Exercised (in dollars per share)	13.57
Forfeited (in dollars per share)	30.69
Outstanding at the end of the period (in dollars per share)	23.01	$ 19.98
Vested and expected to vest (in dollars per share)	23.01	19.98
Exercisable (in dollars per share)	$ 15.33	$ 12.47
Weighted-Average Remaining Contractual Term (in years)
Outstanding at the end of the period	7 years 4 months 24 days	7 years 1 month 6 days
Vested and expected to vest	7 years 4 months 24 days	7 years 1 month 6 days
Exercisable	6 years 2 months 19 days	5 years 11 months 16 days

Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Numerator, in thousands:
Net earnings used for calculation of basic and diluted EPS	$ 18,340	$ 26,352
Denominator:
Weighted average shares outstanding, basic	52,336,443	51,536,474
Effect of dilutive potential common shares:
Stock options and SAR	1,648,942	2,251,872
Total dilutive potential common shares	1,648,942	2,251,872
Weighted average shares outstanding, diluted	53,985,385	53,788,346
Earnings per share, basic	$ 0.35	$ 0.51
Earnings per share, diluted	$ 0.34	$ 0.49
Warrants to purchase common stock
Income per share
Common stock equivalents excluded in the calculation of diluted income per share	7,966,488	1,752,793
Convertible notes
Income per share
Common stock equivalents excluded in the calculation of diluted income per share	239,272	22,634
Convertible notes hedges
Income per share
Common stock equivalents excluded in the calculation of diluted income per share	240	23
Stock options, SAR, and ESPP awards
Income per share
Common stock equivalents excluded in the calculation of diluted income per share	608,948	208,661

Organization and Business	3 Months Ended
Organization and Business	Mar. 31, 2019
Organization and Business
Organization and Business	1. Organization and Business Supernus Pharmaceuticals, Inc. (the Company) was incorporated in Delaware and commenced operations in 2005. The Company is a pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system (CNS) diseases. The Company markets two products; Oxtellar XR for the treatment of epilepsy and Trokendi XR for the prophylaxis of migraine headache and treatment of epilepsy. The Company has several proprietary product candidates in clinical development that address the CNS market. The Company launched Oxtellar XR and Trokendi XR for the treatment of epilepsy in 2013, launched Trokendi XR for the prophylaxis of migraine headache in adolescents and adults in April 2017 and launched Oxtellar XR with an expanded indication to include monotherapy for partial seizures in January 2019.

Accounts Receivable	3 Months Ended
Accounts Receivable	Mar. 31, 2019
Accounts Receivable
Accounts Receivable	15. Accounts Receivable The Company recorded an allowance of approximately $7.8 million and $11.5 million for expected sales discounts and allowances related to prompt pay discounts and contractual fees for service arrangements with the Company’s customers, who are primarily pharmaceutical wholesalers and distributors, as of March 31, 2019 and December 31, 2018, respectively.

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2019
Commitments and Contingencies
Commitments and Contingencies	17. Commitments and Contingencies Product Licenses The Company has obtained exclusive licenses from third parties for proprietary rights to support the product candidates in the Company's neurology and psychiatry portfolio. Under these license agreements, the Company may be required to pay certain amounts upon the achievement of certain milestones. The Company is also obligated to pay royalties to third parties, as percentage of net product sales, for each respective product under license agreement, if these products are ultimately commercialized. Royalty Agreement In the third quarter of 2014, the Company received a $30.0 million payment pursuant to a Royalty Interest Acquisition Agreement related to the purchase by HC Royalty of certain of the Company's rights under the Company's agreement with United Therapeutics related to the commercialization of Orenitram (treprostinil) Extended-Release Tablets. The Company will retain full ownership of the royalty rights if and when a certain cumulative payment threshold is reached per the terms of the agreement. The Company recorded a non-recourse liability related to this transaction, and amortizes this amount as non-cash royalty revenue. The Company also recognizes non-cash interest expense related to this liability and accrues at an effective interest rate. That rate is determined based on projections of HC Royalty's rate of return (see Notes 10 and 16).

Organization and Business (Details)	3 Months Ended
Organization and Business (Details)	Mar. 31, 2019 product
Organization and Business
Number of commercial products	2

Summary of Significant Accounting Policies - Segments (Details)	3 Months Ended
	Mar. 31, 2019 segment
Basis of Presentation
Number of operating segments	1

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2019	Dec. 31, 2018
Condensed Consolidated Balance Sheets
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	130,000,000	130,000,000
Common stock, shares issued	52,374,248	52,316,583
Common stock, shares outstanding	52,374,248	52,316,583

Summary of Significant Accounting Policies - Revenue Recognition (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($) product
Revenue Recognition
Sales return period prior to expiry date	6 months
Sales return period subsequent to expiry date	12 months
Number of commercial products \| product	2
Contract assets	$ 0
Contract liabilities	$ 0
Minimum
Revenue Recognition
Product shelf life	36 months
Maximum
Revenue Recognition
Product shelf life	48 months
License and collaboration agreements
Revenue Recognition
Guaranteed minimum amounts	$ 0
Royalty revenue agreements
Revenue Recognition
Guaranteed minimum amounts	$ 0

Summary of Significant Accounting Policies - Share-based Compensation and Self-insurance Liabilities (Details)	3 Months Ended
	Mar. 31, 2019 USD ($)
Share-based Compensation
Maximum contractual term of share-based grants	10 years
Self-insurance Liabilities
Stop-loss limit per employee, per year, for self-insured employee medical claims	$ 150,000
Self-insurance liability	$ 515,000

Summary of Significant Accounting Policies - Accounting Pronouncements Adopted (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Jan. 01, 2019
Recently Issued Accounting Pronouncements
Practical Expedients	true
Lease assets	$ 20,049
Operating lease liabilities	$ 31,074
ASU 2016 - 02 \| Restatement Adjustment
Recently Issued Accounting Pronouncements
Lease assets		$ 4,000
Operating lease liabilities		$ 4,000

Inventories (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Inventories
Raw materials	$ 5,377	$ 5,742
Work in process	5,661	7,275
Finished goods	15,480	12,642
Total inventories	$ 26,518	$ 25,659

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Property and equipment
Property and equipment, gross	$ 15,818		$ 15,314
Less accumulated depreciation and amortization	(11,592)		(11,219)
Property and equipment, net	4,226		4,095
Depreciation and amortization expense	400	$ 400
Lab equipment and furniture
Property and equipment
Property and equipment, gross	9,056		8,995
Leasehold improvements
Property and equipment
Property and equipment, gross	3,014		2,731
Software
Property and equipment
Property and equipment, gross	2,197		2,181
Computer equipment
Property and equipment
Property and equipment, gross	1,313		1,313
Construction-in-progress
Property and equipment
Property and equipment, gross	$ 238		$ 94

Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
Intangible Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Intangible Assets
Less accumulated amortization	$ (14,662)		$ (13,356)
Net book value of intangible assets	30,063		31,368
Additional disclosures
Amortization expense	1,300	$ 1,300
Capitalized patent defense costs
Intangible Assets
Gross carrying amount	$ 44,725		$ 44,724
Capitalized patent defense costs \| Minimum
Intangible Assets
Weighted-Average Life	3 years 9 months		3 years 9 months
Capitalized patent defense costs \| Maximum
Intangible Assets
Weighted-Average Life	8 years		8 years

Accrued Product Returns and Rebates (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Accrued Product Returns and Rebates
Accrued rebates	$ 66,090	$ 85,003
Accrued product returns	22,110	22,060
Total	$ 88,200	$ 107,063

Other Expenses (Details) - USD ($) $ in Thousands	3 Months Ended
Other Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Mar. 31, 2018
Other Expenses
Interest income	$ 4,681	$ 1,206
Interest expense	(4,710)	(717)
Interest expense-nonrecourse liability related to sale of future royalties	(1,160)	(701)
Total	(1,189)	(212)
Non-cash interest expense	$ 3,848	$ 612

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Mar. 31, 2018
Income Taxes
Income tax expense	$ 5,899	$ 4,830
Effective tax rate	24.34%	15.49%
Excess tax benefits related to employee exercise of stock options	$ 300	$ 2,000

Leases - General (Details)	3 Months Ended
Leases - General (Details)	Mar. 31, 2019
Leases
Operating lease - Option to extend	true
Operating lease - Option to terminate	true

Leases - New Headquarters Lease (Details) - Advent Key West, LLC (Landlord) - USD ($)		2 Months Ended
	Feb. 01, 2019	Mar. 31, 2019
Leases
Optional lease renewal term	10 years
Initial fixed monthly rental rate		$ 195,000
Increase in fixed monthly rental payments (as a percent)	2.00%
Required security deposit	$ 195,000
Tenant improvement allowance	$ 10,200,000

Leases - Leases Balance Sheet Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019 USD ($)
Balance sheet information related to leases
Operating leases, Assets	$ 20,049
Operating leases, Assets (Balance Sheet Location)	us-gaap:OperatingLeaseRightOfUseAsset
Tenant receivable, Assets	$ 10,151
Tenant receivable, Assets (Balance Sheet Location)	us-gaap:PrepaidExpenseAndOtherAssetsCurrent
Total lease assets	$ 30,200
Operating leases, Current Liabilities	$ 3,250
Operating leases, Current Liabilities (Balance Sheet Location)	us-gaap:OtherAccountsPayableAndAccruedLiabilities
Operating leases, Non-current Liabilities	$ 27,824
Operating leases, Non-current Liabilities (Balance Sheet Location)	us-gaap:OperatingLeaseLiabilityNoncurrent
Total lease liabilities	$ 31,074

Leases - Lease Costs (Details) $ in Thousands	3 Months Ended
Leases - Lease Costs (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Operating leases cost
Fixed lease cost	$ 1,032
Variable lease cost	465
Total operating leases cost	$ 1,497

Leases - Schedule of Weighted Average Remaining Lease Term and Discount Rate Information (Details)	Mar. 31, 2019
Leases
Operating leases, Weighted-average remaining lease term (in years)	13 years 6 months 11 days
Operating leases, Weighted-average discount rate (as a percent)	4.37%

Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Thousands	Mar. 31, 2019 USD ($)
Operating leases
2019	$ 2,512
2020	2,938
2021	2,527
2022	2,486
2023	2,536
After 2023	29,371
Total lease payments	42,370
Less: Interest	11,296
Present value of lease liabilities	$ 31,074

Leases - Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Leases
Rent expense	$ 3,600	$ 2,700	$ 2,700
Year ending December 31:
2019	3,400
2020	2,287
Thereafter	1,840
Total	$ 7,527

Accounts Receivable (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Accounts Receivable
Allowance for expected sales discounts and allowances	$ 7.8	$ 11.5

Disaggregated Revenues (Details) $ in Thousands	3 Months Ended
Disaggregated Revenues (Details) $ in Thousands	Mar. 31, 2019 USD ($) customer	Mar. 31, 2018 USD ($) customer
Revenue Recognition
Total revenues	$ 85,474	$ 90,429
Non-cash royalty revenue	$ (1,576)	$ (1,300)
Revenues \| Customer Concentration Risk \| Wholesale pharmaceutical distributors
Revenue Recognition
Number of customers \| customer	3	3
Revenues \| Customer Concentration Risk \| Wholesale pharmaceutical distributors \| Minimum
Revenue Recognition
Concentration risk percentage	90.00%	90.00%
Product
Revenue Recognition
Total revenues	$ 83,099	$ 89,120
Trokendi XR
Revenue Recognition
Total revenues	63,693	70,555
Oxtellar XR
Revenue Recognition
Total revenues	19,406	18,565
Royalty
Revenue Recognition
Total revenues	2,375	1,309
Milestone revenue
Revenue Recognition
Total revenues	$ 0	$ 0

Commitments and Contingencies (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2014
Commitments and Contingencies
Non-recourse liability related to sale of future royalties, long term	$ 21,957	$ 22,575	$ 30,000