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, 2017
Dec. 31, 2016
Dec. 31, 2015
Operating activities      
Net income (loss) $ 12,556 $ (1,636) $ 227,444
Less: gain from discontinued operations 0 731 0
Income (loss) from continuing operations 12,556 (2,367) 227,444
Adjustments to reconcile net income to net cash provided by operating activities:      
Change in estimated fair value of contingent liabilities 2,580 3,334 5,013
Realized gain on sale of short-term investment (831) (2,352) (2,603)
Depreciation and amortization 11,714 11,290 2,627
Gain on deconsolidation of Viking 0 0 (28,190)
Loss on equity investment in Viking 2,048 23,132 5,143
Change in fair value of the convertible debt receivable from Viking and warrants (4,032) (462) 765
Amortization of premium (discount) on investments, net (81) 348 0
Amortization of debt discount and issuance fees 11,619 10,925 10,274
Stock-based compensation 24,915 18,893 12,458
Deferred income taxes 44,518 10,697 (192,132)
Other 0 183 107
Changes in operating assets and liabilities, net of acquisition:      
Accounts receivable, net (8,358) (8,525) 6,489
Inventory (843) (244) (401)
Other current assets 402 526 987
Accounts payable and accrued liabilities (1,713) (2,369) (4,027)
Deferred revenue (926) (8) (2,227)
Net cash provided by operating activities 93,568 63,001 41,727
Investing activities      
Purchase of commercial license rights 0 (17,695) (4,030)
Reduction of cash due to deconsolidation of Viking 0 0 (247)
Cash paid for acquisition, net of cash acquired (26,653) (92,502) 0
Payments to CVR holders and other contingency payments (4,998) (8,777) (6,740)
Purchases of property and equipment (2,156) (1,850) (93)
Purchases of short-term investments (254,258) (164,438) (166,025)
Proceeds from sale of short-term investments 86,985 24,596 16,039
Proceeds from maturity of short-term investments 109,649 118,874 57,234
Proceeds from commercial license rights 7,054 0 0
Proceeds received from repayment of Viking note receivable 200 300 0
Net cash used in investing activities (84,177) (143,192) (112,862)
Financing activities      
Net proceeds from stock option exercises and ESPP 4,517 6,415 8,849
Taxes paid related to net share settlement of equity awards (10,074) (999) 0
Share repurchases (1,966) (3,901) (489)
Net cash (used in) provided by financing activities (7,523) 1,515 8,360
Net increase (decrease) in cash and cash equivalents 1,868 (78,676) (62,775)
Cash and cash equivalents at beginning of year 18,752 97,428 160,203
Cash and cash equivalents at end of year 20,620 18,752 97,428
Supplemental disclosure of cash flow information      
Interest paid 1,838 1,838 1,822
Taxes paid 157 38 28
Supplemental schedule of non-cash investing and financing activities      
Stock issued for acquisition, net of issuance cost 0 (77,331) 0
Stock and warrant received for repayment of Viking notes receivable 0 1,200 0
Accrued inventory purchases 1,007 646 1,333
Unrealized gain on AFS investments 144 (1,109) 3,005
Viking Therapeutics, Inc.      
Investing activities      
Common stock and warrants in equity method investments 0 (700) (9,000)
Purchase of Common Stock      
Investing activities      
Common stock and warrants in equity method investments $ 0 $ (1,000) $ 0