Annual report pursuant to Section 13 and 15(d)

CONSOLIDATED STATEMENTS OF CASH FLOWS

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CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Operating activities      
Net (loss) income $ (1,636) $ 227,444 $ 10,892
Less: gain from discontinued operations 731 0 0
Income (loss) from continuing operations (2,367) 227,444 10,892
Adjustments to reconcile net income to net cash used in operating activities:      
Change in estimated fair value of contingent liabilities 3,334 5,013 5,135
Realized gain on sale of short-term investment (2,352) (2,603) (1,538)
Gain on disposal of assets 183 0 0
Depreciation and amortization 11,290 2,627 2,657
Gain on deconsolidation of Viking 0 (28,190) 0
Loss on equity investment in Viking 23,132 5,143 0
Change in fair value of the convertible debt receivable from Viking and warrants (462) 765 0
Amortization of Premium (discount) on investments, net 348 0 0
Amortization of debt discount and issuance fees 10,925 10,274 3,694
Non-cash milestone revenue 0 0 (1,211)
Stock-based compensation 18,893 12,458 11,270
Deferred income taxes 10,697 (192,132) 410
Other 0 107 206
Changes in operating assets and liabilities, net of acquisition:      
Accounts receivable, net (8,525) 6,489 (10,412)
Inventory (244) (401) 4,369
Restricted cash 0 1,261 0
Other current assets 558 51 (426)
Other long term assets (32) (325) (1,439)
Accounts payable and accrued liabilities (2,369) (4,027) (3,121)
Deferred revenue (8) (2,227) 80
Net cash provided by operating activities of continuing operations 63,001 41,727 20,566
Net cash used in operating activities of discontinued operations 0 0 0
Net cash provided by operating activities 63,001 41,727 20,566
Investing activities      
Purchase of commercial license rights (17,695) (4,030) (1,000)
Reduction of cash due to deconsolidation of Viking 0 (247) 0
Purchase of commercial license rights (92,502) 0 0
Payments to CVR holders and other contingency payments (8,777) (6,740) (3,493)
Purchases of property and equipment (1,850) (93) (6)
Purchases of short-term investments (164,438) (166,025) 0
Proceeds from sale of short-term investments 24,596 16,039 2,342
Proceeds from maturity of short-term investments 118,874 57,234 0
Proceeds received from repayment of Viking note receivable 300 0 0
Other, net 0 0 130
Net cash used in investing activities (143,192) (112,862) (2,027)
Financing activities      
Repayment of debt 0 0 (9,366)
Gross proceeds from issuance of 2019 Convertible Senior Notes 0 0 245,000
Payment of debt issuance costs 0 0 (5,711)
Proceeds from issuance of warrants 0 0 11,638
Purchase of convertible bond hedge 0 0 (48,143)
Net proceeds from stock option exercises and ESPP 6,415 8,849 4,561
Taxes paid related to net share settlement of equity awards (999) 0 0
Share repurchases (3,901) (489) (67,954)
Net cash provided by financing activities 1,515 8,360 130,025
Net (decrease) increase in cash and cash equivalents (78,676) (62,775) 148,564
Cash and cash equivalents at beginning of year 97,428 160,203 11,639
Cash and cash equivalents at end of year 18,752 97,428 160,203
Supplemental disclosure of cash flow information      
Interest paid 1,838 1,822 494
Taxes paid 38 28 18
Supplemental schedule of non-cash investing and financing activities      
Stock issued for acquisition, net of issuance cost (77,331) 0 0
Stock and warrant received for repayment of Viking notes receivable 1,200 0 0
Accrued inventory purchases 646 1,333 3,246
Unrealized gain on AFS investments (1,109) 3,005 3,872
Viking Therapeutics, Inc.      
Investing activities      
Purchase of Viking common stock and warrant (700) (9,000) 0
Purchase of Common Stock [Member]      
Investing activities      
Purchase of Viking common stock and warrant $ (1,000) $ 0 $ 0