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Document And Entity Information - USD ($) $ in Millions	12 Months Ended
Document And Entity Information - USD ($) $ in Millions	Dec. 31, 2015	Mar. 01, 2016	Jun. 30, 2015
Entity Registrant Name	Sucampo Pharmaceuticals, Inc.
Entity Central Index Key	0001365216
Trading Symbol	scmp
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		45,539,384
Entity Public Float			$ 355.2
Document Type	10-K/A
Document Period End Date	Dec. 31, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY
Amendment Flag	true
Amendment Description	This Amendment No. 1 on Form 10-K/A to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015, initially filed with the Securities Exchange Commission on March 11, 2016 (the "Original Filing"), amends and restates the dates on the following: 1) the PricewaterhouseCoopers LLP Report of Independent Registered Public Accounting Firm to March 9, 2015, 2) the Ernst & Young LLP Consent of Independent Registered Public Accounting Firm (Exhibit 23.1) report date to March 10, 2016 (replaced by attached Exhibit 23.1), and 3) the PricewaterhouseCoopers LLP Consent of Independent Registered Public Accounting Firm (Exhibit 23.2) report date to March 9, 2015 (replaced by attached Exhibit 23.2). The Original Filing inadvertently used incorrect dates on these pages. This Amendment No. 1 does not modify or update any other disclosures contained in our Original Filing; however, pursuant to Rule 12b-15 of the Securities Exchange Act of 1934, as amended, this Amendment No. 1 includes Item 8 (Financial Statements and Supplementary Data) in its entirety.

Consolidated Balance Sheets - USD ($)	Dec. 31, 2015	Dec. 31, 2014
Common Class A [Member]
Stockholders' equity:
Common stock value	$ 455,000	$ 446,000
Common Class B [Member]
Stockholders' equity:
Common stock value	0	0
Cash and cash equivalents	108,284,000	71,622,000
Investments, current		22,393,000
Product royalties receivable	22,792,000	18,576,000
Accounts receivable, net	22,759,000	5,338,000
Deferred charge, current	295,000	295,000
Restricted cash, current	55,218,000	213,000
Inventories, net	33,121,000	0
Prepaid expenses and other current assets	8,891,000	3,411,000
Total current assets	251,360,000	121,848,000
Investments, non-current		13,540,000
Property and equipment, net	6,393,000	763,000
Intangible assets	130,315,000	151,000
Goodwill	60,937,000	0
In-process research & development	6,171,000
Deferred tax assets, non-current		1,047,000
Deferred charge, non-current	1,400,000	1,695,000
Restricted cash, non-current		2,224,000
Other assets	605,000	306,000
Total assets	457,181,000	141,574,000
Accounts payable	11,213,000	4,143,000
Accrued expenses	10,886,000	8,467,000
Deferred revenue, current	676,000	2,051,000
Collaboration obligation	5,623,000	6,000,000
Income tax payable	6,507,000	1,291,000
Notes payable, current	39,083,000	8,240,000
Other current liabilities	14,139,000	3,618,000
Total current liabilities	88,127,000	33,810,000
Notes payable, non-current	213,277,000	17,578,000
Deferred revenue, non-current	1,088,000	5,118,000
Deferred tax liability net, non-current	52,497,000	820,000
Other liabilities	15,743,000	1,936,000
Total liabilities	370,732,000	59,262,000
Commitments and contingencies
Preferred stock, $0.01 par value; 5,000,000 shares authorized at December 31, 2015 and 2014; no shares issued and outstanding at December 31, 2015 and 2014, respectively	0	0
Additional paid-in capital	99,212,000	83,646,000
Accumulated other comprehensive income	13,412,000	14,265,000
Treasury stock, at cost; 3,009,942 and 524,792 shares at December 31, 2015 and 2014, respectively	(46,269,000)	(2,313,000)
Retained earnings (Accumulated deficit)	19,639,000	(13,732,000)
Total stockholders' equity	86,449,000	82,312,000
Total liabilities and stockholders' equity	$ 457,181,000	$ 141,574,000

Consolidated Balance Sheets (Parentheticals) - $ / shares	Dec. 31, 2015	Dec. 31, 2014
Common Class A [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	270,000,000	270,000,000
Common stock, shares issued (in shares)	45,509,150	44,602,988
Common stock, shares outstanding (in shares)	45,509,150	44,602,988
Common Class B [Member]
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	75,000,000	75,000,000
Common stock, shares issued (in shares)	0	0
Common stock, shares outstanding (in shares)	0	0
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Treasury stock, shares (in shares)	3,009,942	524,792

Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenues:
Product royalty revenue	$ 74,138	$ 62,775	$ 52,100
Product sales revenue	66,276	33,252	16,425
Research and development revenue	10,199	7,246	20,354
Contract and collaboration revenue	2,567	8,817	654
Co-promotion revenue		3,360	61
Total revenues	153,180	115,450	89,594
Costs and expenses:
Costs of goods sold	36,731	16,269	12,402
Intangible assets impairment		5,631
Research and development	33,631	20,566	21,524
General and administrative	35,517	31,230	25,413
Selling and marketing	2,842	14,523	21,059
Total costs and expenses	108,721	88,219	80,398
Income from operations	44,459	27,231	9,196
Non-operating income (expense):
Interest income	181	172	124
Interest expense	(6,854)	(1,520)	(1,894)
Other income, net	5,889	1,250	3,517
Total non-operating income (expense), net	(784)	(98)	1,747
Income before income taxes	43,675	27,133	10,943
Income tax provision	(10,304)	(14,005)	(3,928)
Net income	$ 33,371	$ 13,128	$ 7,015
Net income per share:
Basic (in dollars per share)	$ 0.76	$ 0.30	$ 0.17
Diluted (in dollars per share)	$ 0.73	$ 0.29	$ 0.16
Weighted average common shares outstanding:
Basic (in shares)	44,150	43,691	41,716
Diluted (in shares)	45,680	44,506	42,544
Comprehensive income:
Net income	$ 33,371	$ 13,128	$ 7,015
Other comprehensive income (loss):
Unrealized gain (loss) on pension benefit obligation	105	(978)
Unrealized gain (loss) on investments, net of tax effect	7	(7)	2
Foreign currency translation	(965)	(351)	(567)
Total comprehensive income	$ 32,518	$ 11,792	$ 6,450

Consolidated Statement of Changes in Stockholders' Equity - USD ($)	Common Stock [Member] Common Class A [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Treasury Stock [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2012	41,964,905			457,030
Balance at Dec. 31, 2012	$ 420,000	$ 62,521,000	$ 16,166,000	$ (1,977,000)	$ (33,875,000)	$ 43,255,000
Employee stock option expense		1,744,000				1,744,000
Stock issued upon exercise of stock options (in shares)	597,836
Stock issued upon exercise of stock options	$ 5,000	2,332,000				2,337,000
Stock issued under employee stock purchase plan (in shares)	3,625
Stock issued under employee stock purchase plan		25,000				25,000
Stock issued under "at-the-market" offering (in shares)	749,383
Stock issued under "at-the-market" offering	$ 7,000	5,274,000				5,281,000
Foreign currency translation			(567,000)			(567,000)
Unrealized loss on investments, net of tax effect			2,000			2,000
Windfall tax benefit from stock-based compensation		213,000				213,000
Treasury stock, at cost (in shares)				67,762
Treasury stock, at cost				$ (336,000)		(336,000)
Net income					7,015,000	7,015,000
Balance (in shares) at Dec. 31, 2013	43,315,749			524,792
Balance at Dec. 31, 2013	$ 432,000	72,109,000	15,601,000	$ (2,313,000)	(26,860,000)	58,969,000
Unrealized gain (loss) on pension benefit obligation
Unrealized gain (loss) on investments, net of tax effect			2,000			2,000
Employee stock option expense		2,287,000				$ 2,287,000
Stock issued upon exercise of stock options (in shares)	742,865					618,377
Stock issued upon exercise of stock options	$ 9,000	3,780,000				$ 3,789,000
Stock issued under employee stock purchase plan (in shares)	5,853
Stock issued under employee stock purchase plan		36,000				36,000
Stock issued under "at-the-market" offering (in shares)	538,521
Stock issued under "at-the-market" offering	$ 5,000	5,321,000				5,326,000
Foreign currency translation			(351,000)			(351,000)
Unrealized loss on investments, net of tax effect			(7,000)			(7,000)
Windfall tax benefit from stock-based compensation		113,000				113,000
Net income					13,128,000	13,128,000
Balance (in shares) at Dec. 31, 2014	44,602,988			524,792
Balance at Dec. 31, 2014	$ 446,000	83,646,000	14,265,000	$ (2,313,000)	(13,732,000)	82,312,000
Unrealized gain (loss) on pension benefit obligation			(978,000)			(978,000)
Unrealized gain (loss) on investments, net of tax effect			(7,000)			(7,000)
Employee stock option expense		7,349,000				$ 7,349,000
Stock issued upon exercise of stock options (in shares)	897,077					693,077
Stock issued upon exercise of stock options	$ 9,000	5,614,000				$ 5,623,000
Stock issued under employee stock purchase plan (in shares)	9,085
Stock issued under employee stock purchase plan		128,000				128,000
Foreign currency translation			(965,000)			(965,000)
Unrealized loss on investments, net of tax effect			7,000			7,000
Windfall tax benefit from stock-based compensation		2,475,000				2,475,000
Treasury stock, at cost (in shares)				2,485,150
Treasury stock, at cost				$ (43,956,000)		(43,956,000)
Net income					33,371,000	33,371,000
Balance (in shares) at Dec. 31, 2015	45,509,150			3,009,942
Balance at Dec. 31, 2015	$ 455,000	$ 99,212,000	13,412,000	$ (46,269,000)	$ 19,639,000	86,449,000
Unrealized gain (loss) on pension benefit obligation			105,000			105,000
Unrealized gain (loss) on investments, net of tax effect			$ 7,000			$ 7,000

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities:
Net income	$ 33,371,000	$ 13,128,000	$ 7,015,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	10,580,000	1,090,000	1,488,000
Intangible assets impairment		5,631,000
Deferred tax provision (benefit)	(9,779,000)	770,000	(1,678,000)
Deferred charge	295,000	3,223,000	673,000
Stock-based compensation	7,349,000	2,287,000	1,744,000
Amortization of premiums on investments	121,000	82,000	110,000
Foreign currency remeasurement gain	(3,687,000)	(1,146,000)	(2,023,000)
Shortfall from stock-based compensation	(70,000)	(227,000)
Windfall benefit from stock-based compensation	(2,547,000)
Transfer and assignment of licensing rights	(2,000,000)
Changes in operating assets and liabilities:
Accounts receivable	(8,481,000)	67,000	(4,047,000)
Unbilled accounts receivable	(668,000)		732,000
Product royalties receivable	(4,216,000)	(3,747,000)	(654,000)
Inventory	(1,436,000)	206,000	(163,000)
Income taxes receivable and payable, net	1,110,000	592,000	560,000
Accounts payable	(1,723,000)	(3,437,000)	2,242,000
Accrued expenses	395,000	2,868,000	(4,685,000)
Deferred revenue	(5,351,000)	(191,000)	(3,126,000)
Collaboration obligation	(377,000)	6,000,000
Accrued interest payable	(25,000)	(32,000)	(32,000)
Other assets and liabilities, net	5,724,000	3,714,000	(2,365,000)
Net cash provided by (used in) operating activities	18,585,000	30,878,000	(4,209,000)
Cash flows from investing activities:
Purchases of investments	(39,775,000)	(29,153,000)	(10,127,000)
Proceeds from the sales of investments	45,062,000	1,700,000	755,000
Maturities of investments	30,554,000	14,650,000	6,485,000
Tenant improvement allowance	(1,880,000)
Purchases of property and equipment	(3,557,000)	(66,000)	(168,000)
Transfer and assignment of licensing rights	2,000,000
Changes in restricted cash	(2,368,000)	25,828,000	(9,561,000)
Acquisition, net of acquired cash	(161,187,000)
Net cash provided by (used in) investing activities	(131,151,000)	12,959,000	(12,616,000)
Cash flows from financing activities:
Proceeds from notes payable, net of debt issuance costs	235,911,000		10,600,000
Repayment of notes payable	(8,236,000)	(24,904,000)	(7,539,000)
Changes in restricted cash	(42,676,000)
Proceeds from exercise of stock options	5,623,000	3,789,000	2,337,000
Proceeds from employee stock purchase plan	128,000	36,000	25,000
Proceeds from "at-the market" stock issuance		5,326,000	5,281,000
Purchase of treasury stock	(43,956,000)		(336,000)
Windfall benefit from stock-based compensation	2,547,000	340,000	213,000
Net cash provided by (used in) financing activities	149,341,000	(15,413,000)	10,581,000
Effect of exchange rates on cash and cash equivalents	(113,000)	(904,000)	(1,676,000)
Net increase (decrease) in cash and cash equivalents	36,662,000	27,520,000	(7,920,000)
Cash and cash equivalents at beginning of period	71,622,000	44,102,000	52,022,000
Cash and cash equivalents at end of period	108,284,000	71,622,000	44,102,000
Supplemental cash flow disclosures:
Cash paid for interest	5,983,000	129,000	156,000
Tax refunds received	423,000	76,000	103,000
Tax payments made	$ 17,621,000	$ 9,166,000	$ 4,939,000

Note 1 - Business Organization and Basis of Presentation	12 Months Ended
	Dec. 31, 2015
Notes to Financial Statements
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	1. Business Organization and Basis of Presentation Description of the Business Sucampo Pharmaceuticals, Inc., (Company) is a global biopharmaceutical company focused on innovative research and development of proprietary drugs to treat gastrointestinal, ophthalmic, autoimmune, and oncology-based inflammatory disorders. The Company currently generates revenue mainly from product royalties, upfront and milestone payments, product sales and reimbursements for development activities. The Company expects to continue to incur significant expenses for the next several years as the Company continues its research and development activities, seeks additional regulatory approvals and additional indications for approved products and other compounds and seeks strategic opportunities for in-licensing new products. AMITIZA is being marketed for three gastrointestinal indications under the collaboration and license agreement (as amended in October 2014, the North America Takeda Agreement) with Takeda Pharmaceutical Company Limited (Takeda). These indications are chronic idiopathic constipation (CIC) in adults, irritable bowel syndrome with constipation (IBS-C) in adult women and opioid-induced constipation (OIC) in adults suffering from chronic non-cancer related pain. Under the North America Takeda Agreement, the Company is primarily responsible for clinical development activities, while Takeda is responsible for commercialization of AMITIZA in the U.S. and Canada. The Company and Takeda initiated commercial sales of AMITIZA in the U.S. for the treatment of CIC in April 2006, for the treatment of IBS-C in May 2008 and for the treatment of OIC in May 2013. Takeda is required to provide a minimum annual commercial investment during the current term of the North America Takeda Agreement and may reduce the minimum annual commercial investment when a generic equivalent enters the market. In October 2015, Health Canada approved AMITIZA for CIC in adults. In October 2014, the Company and Takeda executed amendments (Takeda Amendment) to the North America Takeda Agreement which, among other things, extended the term of the North America Takeda Agreement beyond December 2020. During the extended term, Takeda and the Company will split the annual net sales revenue of the branded AMITIZA products. In addition, beginning April 2015, the North America Takeda Agreement was amended to terminate the Company’s right to perform commercialization activities with respect to AMITIZA and Takeda’s obligation to reimburse the Company for such commercialization activities. In Japan, AMITIZA is marketed under a license, commercialization and supply agreement (the Japan Mylan Agreement) that was transferred to Mylan, Inc. (Mylan) from Abbott Laboratories, Inc. (Abbott), as of February 2015, as part of Mylan’s acquisition of a product portfolio from Abbott. The Company received approval of its new drug application (NDA) for AMITIZA for the treatment of chronic constipation (CC), excluding constipation caused by organic diseases, from the Ministry of Health, Labour and Welfare in June 2012 and pricing approval in November 2012. AMITIZA is Japan’s only prescription medicine for CC. The Company did not experience any significant changes in the commercialization of AMITIZA in Japan as a result of the transfer of the Japan Mylan Agreement from Abbott to Mylan. In the People’s Republic of China, the Company entered into an exclusive license, development, commercialization and supply agreement (the China Gloria Agreement) with Harbin Gloria Pharmaceuticals Co., Ltd. (Gloria), for AMITIZA in May 2015. Under the China Gloria Agreement, Gloria is responsible for all development activities and costs, as well as commercialization and regulatory activities, for AMITIZA in the People’s Republic of China. The Company will be the exclusive supplier of AMITIZA to Gloria at an agreed upon supply price. Upon entering into the China Gloria Agreement, the Company received an upfront payment of $1.0 million. In June 2015, the China Food and Drug Administration accepted an Investigational New Drug (IND) application for a pivotal trial of AMITIZA in patients with CIC; as a result the Company received an additional payment of $500,000 from Gloria. In addition to the $1.5 million in payments received and recognized as revenue through June 2015, the Company is eligible to receive an additional payment in the amount of $1.5 million upon the occurrence of a specified regulatory or commercial milestone event. In October 2014, the Company entered into an exclusive license, development, commercialization and supply agreement (the Global Takeda Agreement) for lubiprostone with Takeda, through which Takeda has the exclusive rights to further develop and commercialize AMITIZA in all global markets, except the U.S., Canada, Japan and the People’s Republic of China. Takeda became the marketing authorization holder in Switzerland in April 2015 and is expected to become the marketing authorization holder in the United Kingdom (U.K.), Austria, Belgium, Germany, Italy, Ireland, Luxembourg, the Netherlands and Spain in the first half of 2016. Before the execution of the Global Takeda Agreement, the Company retained full rights to develop and commercialize AMITIZA for the rest of the world’s markets outside of the U.S., Canada and Japan. In the U.K., the Company received approval in September 2012 from the Medicines and Healthcare Products Regulatory Agency (MHRA) for the use of AMITIZA to treat CIC. The Company made AMITIZA available in the U.K. in the fourth quarter of 2013. In 2014, the Company resubmitted an application to the MHRA for approval of the OIC indication following its initial decision to not approve in March 2014. In January 2016, the Company received notification from the MHRA that the appeal for the OIC indication was not approved. The Company will not pursue additional filings in the U.K. at this time. In July 2014, National Institute of Health and Care Excellence (NICE) published the technology appraisal guidance recommending the use of AMITIZA in the treatment of CIC and associated symptoms in adults who have failed laxatives. In January 2015, the Company successfully completed the European mutual recognition procedure (MRP) for AMITIZA for the treatment of CIC in select European countries, resulting in a recommendation for marketing authorization. In Switzerland, AMITIZA was approved to treat CIC in 2009. In 2012, the Company reached an agreement with the Bundesamt fur Gesundheit, (BAG), the Federal Office of Public Health in Switzerland, on a reimbursement price for AMITIZA in Switzerland, and began active marketing in the first quarter of 2013. Since February 2012, AMITIZA has also been available through a Named Patient Program throughout the European Union, Iceland and Norway. In February 2014, the Company announced that the BAG revised several reimbursement limitations with which AMITIZA was first approved for reimbursement and inclusion in the Spezialitätenliste (SL) to allow all Swiss physicians to prescribe AMITIZA to patients who have failed previous treatments with at least two laxatives over a nine month period. In July 2014, AMITIZA was approved for the treatment of OIC in chronic, non-cancer adult patients by the Swissmedic, the Swiss Agency for Therapeutic Products. In October 2015, the Company and Takeda obtained approval of the clinical trial application (CTA) for AMITIZA for the treatment of CIC and IBS-C in Russia that was submitted in June 2015. In December 2015, a CTA was filed for AMITIZA for the treatment of CIC, IBS-C and OIC in Mexico and South Korea. The Company expects to initiate phase 3 registration trials in Russia, Mexico, and South Korea in the first half of 2016. An NDA for the treatment of CIC, IBS-C, and OIC was submitted in Kazakhstan in December 2015. In the U.S., the Company ceased marketing RESCULA in the fourth quarter of 2014 and no product was made available after the March 2015 expiration date. In May 2015, the Company returned all licenses for unoprostone isopropyl to R-Tech. As part of the acquisition of R-Tech in October 2015, the Company acquired all rights to RESCULA. RESCULA is being commercialized by Santen Pharmaceutical Co., Ltd in Japan, Dong-A Pharmaceutical, Co., Ltd in South Korea and Zuelliq Pharma Co., Ltd in Taiwan. The Company’s other clinical development programs include the following: Lubiprostone Alternate Formulation The Company has been developing an alternate formulation of lubiprostone for both adult and pediatric patients who are unable to tolerate capsules and for naso-gastric tube fed patients. Takeda has agreed to fund 100% of the costs, up to a cap, of this alternate formulation work and the Company expects to initiate a phase 3 trial of the alternate formulation of lubiprostone in the second half of 2016. Lubiprostone for Pediatric Functional Constipation The phase 3 program required to support an application for marketing approval of lubiprostone for pediatric functional constipation comprises four clinical trials, two of which are currently ongoing and are both testing the soft gelatin capsule formulation of lubiprostone in patients 6 to 17 years of age. The first of the two trials is a pivotal 12-week, randomized, placebo-controlled trial which was initiated in December 2013. The second trial is a follow-on, long-term safety extension trial that was initiated in March 2014. Following the successful completion of the phase 3 trial for the alternative formulation of lubiprostone, as described above, the Company is also planning to initiate two additional trials in its phase 3 program for pediatric functional constipation, which will be in children aged 6 months to less than 6 years testing the alternative formulation. Takeda has agreed to fund 70% of the costs, up to a cap, of this pediatric functional constipation program. Cobiprostone for Oral Mucositis In May 2015, the U.S. FDA granted Fast Track Designation for cobiprostone for the prevention of OM. In September 2015, the Company initiated a phase 2a clinical trial in the U.S. of cobiprostone oral spray for the prevention of OM in patients suffering from HNC receiving concurrent RT and CT. Cobiprostone for Proton Pump Inhibitor-Refractory Non-Erosive Reflux Disease (NERD)/symptomatic Gastroesophageal Reflux Disease (sGERD) In December 2014, the Company initiated a phase 2a clinical trial in Japan for cobiprostone in NERD/sGERD patients who have had a non-satisfactory response to proton pump inhibitors. The Company expects to announce top-line data from this study in the first half of 2016. VAP-1 Inhibitor for RTU-1096 RTU-1096 is an oral compound under development for the treatment of nonalcoholic steatohepatitis (NASH), chronic obstructive pulmonary disease (COPD), diabetic macular edema (DME) and diabetic retinopathy (DR) and immune-oncology. In the first quarter of 2016, the phase 1 trial has been completed in healthy individuals that evaluated the safety and pharmacokinetics and the results will be accessed in the first half of 2016. The Company will also look to generate additional preclinical data in the emerging area of immune-oncology, to support partnership opportunities of combination therapy in cancer patients of our molecules with check-point pathway inhibitors. VAP-1 Inhibitor for RTU-009 RTU-009 is a pre-clinical stage, injectable VAP-1 inhibitor that is being studied in acute cerebral infarction as well as ophthalmic diseases. Our next step would be to complete IND-enabling studies, and thereafter initiate clinical-stage development. Basis of Presentation The accompanying Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America, (GAAP) and the rules and regulations of the Securities and Exchange Commission, (SEC). The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries: Sucampo AG, based in Zug, Switzerland, through which the Company conducts certain worldwide and European operations; Sucampo Pharma, LLC, based in Tokyo and Osaka, Japan and R-Tech Ueno, Ltd. (acquired October 20, 2015), based in Kobe, Japan through which the Company conducts its Asian operations; Sucampo Pharma Americas LLC, based in Rockville, Maryland, through which the Company conducts operations in North and South America and Sucampo Pharma Europe, Ltd., based in Oxford, U.K.. All inter-company balances and transactions have been eliminated. The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Note 2 - Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Significant Accounting Policies [Text Block]

2. Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of Sucampo Pharmaceuticals, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenues and expense during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

For the purpose of the Consolidated Balance Sheets and Consolidated Statements of Cash Flows, cash equivalents include all highly liquid investments with a maturity of 90 days or less at the time of purchase.

Current and Non-Current Investments

Current and non-current investments consist primarily of U.S. government agency securities, certificates of deposit, corporate bonds, municipal securities and variable rate demand notes, and are classified as current or non-current based on their maturity dates. The Company classifies all investments as available-for-sale securities and reports unrealized gains or losses, net of related tax effects, in other comprehensive income.

Accounts Receivable

Accounts receivable primarily represents amounts due under the North America Takeda Agreement and Japan Mylan Agreement. The Company recorded an immaterial allowance for doubtful accounts at December 31, 2015 and 2014. Accounts receivable of zero and $779,000 were charged off against the allowance for doubtful accounts during the years ended December 31, 2015 and 2014, respectively.

Inventories

Inventories are stated at the lower of cost or net realizable value, using the first-in, first-out convention. Inventories consist of raw material, work-in-process and finished goods. The Company’s inventories include the direct purchase cost of materials and supplies and manufacturing overhead costs.

Restricted Cash

As of December 31, 2015, restricted cash consisted primarily of $25.0 million related to the Credit Facility that requires the Company to maintain $25.0 million in a restricted cash account until at least $35 million of the Term Loans have been repaid or prepaid (see note 17). Further, as part of the R-Tech acquisition, $17.7 million is held in a restricted cash account for payment of the Ueno and Kuno Trust Notes, which were settled on February 1, 2016 (see note 17), and $8.2 million is held in restricted cash related to the squeeze out of non-tendering R-Tech shareholders, which was settled in January, 2016.

Restricted cash at December 31, 2014 primarily represented collateral pledged to support a loan guarantee and development agreement (Numab Agreement) between Numab AG (Numab) and Zurcher Kantonalbank, which the Company serves as guarantor; and operating leases with certain financial institutions. Restricted cash totaled $2.4 million at December 31, 2014.

Property and Equipment

Property and equipment are recorded at cost and consist of computer and office machines, furniture and fixtures, IT infrastructure and leasehold improvements. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Expenditures for maintenance and repairs are charged to earnings as incurred. When assets are sold or retired, the related cost and accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in earnings.

Certain Risks, Concentrations and Uncertainties

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash and cash equivalents, restricted cash, investments and receivables. The Company places its cash, cash equivalents and restricted cash with highly rated financial institutions and invests its excess cash in highly rated investments. As of December 31, 2015 and 2014, approximately $5.9 million, or 3.6%, and $37.0 million, or 33.6%, respectively, of the Company’s cash, cash equivalents, restricted cash and investments were issued or insured by the U.S. government or other government agencies. The Company has not experienced any losses on these accounts related to amounts in excess of insured limits.

Revenues from Takeda, an unrelated party, accounted for 63.3%, 71.3% and 81.3% of the Company’s total revenues for the years ended December 31, 2015, 2014 and 2013, respectively. Accounts receivable and product royalties receivable from Takeda accounted for 78.1% and 88.5% of the Company’s total accounts receivable and product royalties receivable at December 31, 2015 and 2014. Revenues from another unrelated party, Mylan, accounted for 35.2%, 27.8% and 17.6% of the Company’s total revenues for the years ended December 31, 2015, 2014 and 2013. The Company depends significantly upon collaborations with Takeda and Mylan, and its activities may be impacted if these relationships are disrupted (see note 19).

Fair Value of Financial Instruments

The carrying values of the Company’s financial instruments approximate their fair values based on their short maturities, independent valuations or internal assessments. The Company’s financial instruments include cash and cash equivalents, restricted cash, current and non-current investments, receivables, accounts payable, collaboration obligation and accrued expenses. The carrying amounts of the Notes (as defined below) at December 31, 2015 and 2014 did approximate fair value and are classified as a Level 2 instrument.

Revenue Recognition

The Company’s revenues are derived primarily from product royalties, product sales, development milestone payments, clinical development activities, and contract and collaboration activities.

Multiple-Element Arrangements

The Company evaluated the multiple deliverables within the AMITIZA agreements in accordance with the guidance of multiple deliverables under ASC 605-25 “

Revenue Recognition — Multiple-Element Arrangements”

to determine whether the deliverables can be separated for revenue recognition purposes. The separation criteria include whether the deliverables have standalone value and whether objective reliable evidence of fair value exists. Deliverables that meet these criteria are considered a separate unit of accounting. Deliverables that do not meet these criteria are combined and accounted for as a single unit of accounting. The appropriate recognition of revenue is then applied to each separate unit of accounting. The Company’s deliverables under AMITIZA agreements are more fully described in note 19 below.

Where agreements include contingent milestones the Company evaluates whether each milestone is substantive. Milestones are considered substantive if all of the following conditions are met: (1) it is commensurate with either our performance to meet the milestone or the enhancement of the value of the delivered item or items as a result of a specific outcome resulting from the our performance to achieve the milestone, (2) it relates solely to past performance, and (3) the value of the milestone is reasonable relative to all the deliverables and payment terms (including other potential milestone consideration) within the arrangement. Where milestones are not considered substantive their treatment is based on either a time-based or proportional performance model.

Research and Development Revenue

The Company applied a time-based model of revenue recognition for cash flows associated with research and development deliverables agreed upon prior to January 1, 2011 under the North America Takeda Agreement. Under this model, cash flow streams related to each unit of accounting are recognized as revenue over the estimated performance period. Upon receipt of cash payments, such as development milestones, revenue is recognized to the extent the accumulated service time has occurred. The remainder is deferred and recognized as revenue ratably over the remaining estimated performance period.

For research and development deliverables agreed upon subsequent to January 1, 2011 under the North America Takeda agreement, which are reimbursable by Takeda at contractually predetermined percentages, the Company recognizes revenue when the underlying research and development expenses are incurred, assuming all other revenue recognition criteria are met.

Product Royalty Revenue

Product royalty revenue represents royalty revenue earned on Takeda’s net sales of AMITIZA under the North America Takeda Agreement, and is recorded when earned in accordance with the contractual terms, collectability is reasonably assured and all other revenue recognition criteria are met.

Product Sales Revenue

Product sales revenue consists of AMITIZA sales under the Japan Mylan Agreement, the North America Takeda Agreement, Global Takeda Agreement, and prior to the Global Takeda Agreement, by the Company in Europe, and RESCULA sales to Santen in Japan and by the Company in the U.S. Revenue from AMITIZA product sales is recognized when persuasive evidence of an arrangement exists, delivery has occurred, title to product and associated risk of loss have passed to the customer, the price is fixed or determinable, and collection from the customer is reasonably assured. The Company did not record sales deductions and returns for sales of AMITIZA due to the absence of discounts and rebates and the lack of right of return.

Co-promotion Revenue

Takeda reimbursements of co-promotion costs under the North America Takeda Agreement, including costs associated with the Company’s specialty sales force and miscellaneous marketing activities, are recognized as co-promotion revenue as the related costs are incurred and Takeda becomes contractually obligated to pay the amounts. The Company has determined that it is acting as a principal under this agreement, and as such, records reimbursements of these amounts on a gross basis as co-promotion revenue. In December 2014, the Company ceased co-promoting AMITIZA as a result of the amendment to the North America Takeda Agreement.

Contract and Collaboration Revenue

Contract and Collaboration revenue relates to development and consulting activities and includes $8.0 million of the upfront payment received from Takeda in 2014 under the Global Takeda Agreement.

The Company considers its participation in joint committees under the Japan Mylan Agreement and North America Takeda Agreement as separate deliverables under the contracts and recognizes the best estimate of selling price of such participation as collaboration revenue over the period of the participation per the terms of the contracts.

Deferred Revenue

Deferred revenue represents payments received for licensing fees, option fees, consulting, research and development contracts and related cost sharing and supply agreements, mainly with Takeda and Mylan, which are deferred until revenue can be recognized under the Company’s revenue recognition policy. At December 31, 2015 and 2014, total deferred revenue was approximately $1.8 million and $7.2 million, respectively.

Total deferred revenue consists of the following as of:

	December 31,
(In thousands)	2015		2014
Deferred revenue, current	$	676	$	2,051
Deferred revenue, non-current		1,088		5,118
	$	1,764	$	7,169

Deferred revenue to related parties, included in total deferred revenue:
Deferred revenue to related parties, current	$	-	$	453
Deferred revenue to related parties, non-current		-		4,141
Total	$	-	$	4,594

During the fourth quarter of 2015, as part of the R-Tech acquisition, the Company recognized $3.9 million of deferred revenue as part of settlement of a pre-existing relationship with R-Tech.

Stock-Based Compensation

The Company estimates the fair value of share-based payment awards on the date of the grant using an option-pricing model and recognizes the expense over the required service periods.

For recording of the stock-based compensation expense for service based and market condition options, the Company has chosen to use:

the straight-line method of allocating compensation cost for service based options and graded vesting for market condition options;

the Black-Scholes-Merton option pricing formula for time based options and the Monte Carlo simulation model for the market condition options as the Company’s chosen option-pricing models;

the simplified method to calculate the expected term for options as discussed under the SEC’s guidance for share-based payments for service based options;

an estimate of expected volatility based on the historical volatility of the Company’s share price; and

an estimate for expected forfeitures.

The three factors which most affect stock-based compensation are the fair value of the common stock underlying the stock options, the vesting term of the options, and the volatility of such fair value of the underlying common stock. If the Company’s estimates are too high or too low, the Company may overstate or understate its stock-based compensation expense.

Pension

The Company utilizes actuarial methods to measure the benefit obligations and net periodic pension cost/income for its Swiss pension plan. Inherent in the application of these actuarial methods are key assumptions, including, but not limited to, discount rates, mortality rates, and rates of compensation increases. Company management evaluates these assumptions annually and updates assumptions as necessary. Net actuarial gains or losses are amortized to expense in future periods over the average future service period for employees of plans. The fair values of assets are determined based on the sum of the saving capitals of the actives in the pension plan.

Mergers and Acquisitions

In a business combination, the acquisition method of accounting requires that the assets acquired and liabilities assumed be recorded as of the date of the merger or acquisition at their respective fair values. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Accordingly, the Company may be required to value assets at fair value measures that do not reflect our intended use of those assets. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of the acquired business are reflected in our consolidated financial statements after the date of the merger or acquisition. If the Company determines the assets acquired do not meet the definition of a business under the acquisition method of accounting, the transaction will be accounted for as an acquisition of assets rather than a business combination and, therefore, no goodwill will be recorded. The fair values of intangible assets, including acquired in-process research and development (IPR&D) are determined utilizing information available near the merger or acquisition date based on expectations and assumptions of a market participant that are deemed reasonable by management. Given the considerable judgment involved in determining fair values, the Company typically obtains assistance from third-party valuation specialists for significant items. Amounts allocated to acquire IPR&D are capitalized and accounted for as indefinite-lived intangible assets. Upon successful completion of each project, the Company will make a separate determination as to the then useful life of the asset and begin amortization. The judgments made in determining estimated fair values assigned to assets acquired and liabilities assumed in a business combination, as well as asset lives, can materially affect the Company's results of operations.

The fair values of identifiable intangible assets related to currently marketed products and product rights are primarily determined by using an "income approach" through which fair value is estimated based on each asset's discounted projected net cash flows. Our estimates of market participant net cash flows consider historical and projected pricing, margins and expense levels; the performance of competing products where applicable; relevant industry growth drivers and factors; current and expected trends in technology and product life cycles; the time and investment that will be required to develop products and technologies; the ability to obtain marketing and regulatory approvals; the ability to manufacture and commercialize the products; the extent and timing of potential new product introductions by the Company's competitors; and the life of each asset's underlying patent, if any. The net cash flows are then probability-adjusted where appropriate to consider the uncertainties associated with the underlying assumptions, as well as the risk profile of the net cash flows utilized in the valuation. The probability-adjusted future net cash flows of each product are then discounted to present value utilizing an appropriate discount rate.

The fair values of identifiable intangible assets related to IPR&D are determined using an income or cost approach. Under the income approach fair value is estimated based on each asset’s probability-adjusted future net cash flows, which reflect the different stages of development of each product and the associated probability of successful completion. The net cash flows are then discounted to present value using appropriate discounts. Under the replacement cost approach, historical research and development spending is analyzed to derive the costs incurred to date related to the asset. An expected return of 20% was applied to the cumulative research and development costs incurred to date, as this estimates the required rate of a return a prudent investor would require on a similarly situated asset. No tax amortization benefit is applied given the asset is valued under the replacement cost approach, which is representative of buying the asset in the market at fair value.

Goodwill

The Company assesses the carrying value of goodwill on an annual basis, or whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable to determine whether any impairment in this asset may exist and, if so, the extent of such impairment. The provisions of the relevant accounting guidance require that the Company perform a two-step impairment test. In the first step, the Company compares the fair value of its reporting unit to the carrying value. If the carrying value of the reporting unit exceeds the fair value of the reporting unit, then the second step of the impairment test is performed in order to determine the implied fair value of the reporting unit's goodwill. If the carrying value of the reporting unit's goodwill exceeds its implied fair value, an impairment loss equal to the difference is recognized. The Company calculates the fair value of the reporting unit utilizing the income approach. The income approach utilizes a discounted cash flow model, using a discount rate based on the Company's estimated weighted average cost of capital. The Company also evaluates goodwill using the qualitative assessment method, which permits companies to qualitatively assess whether it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. The Company considers developments in its operations, the industry in which it operates and overall macroeconomic factors that could have affected the fair value of the reporting unit since the date of the most recent quantitative analysis of a reporting unit's fair value. As described in note 4 to these consolidated financial statements, the Company operates as one operating segment which is considered our only reporting unit.

The determination of the fair value of a reporting unit is judgmental in nature and involves the use of significant estimates and assumptions. The estimates and assumptions used in calculating fair value include identifying future cash flows, which requires that the Company makes a number of critical legal, economic, market and business assumptions that reflect best estimates as of the testing date. The Company's assumptions and estimates may differ significantly from actual results, or circumstances could change that would cause the Company to conclude that an impairment now exists or that it previously understated the extent of impairment. The Company selected October 1 as its annual impairment test date.

Research and Development Expenses

Research and development costs are expensed in the period in which they are incurred and include the expenses from third parties who conduct research and development activities pursuant to development and consulting agreements on behalf of the Company. Costs related to the acquisition of intellectual property are expensed as incurred in research and development expenses since the underlying technology associated with such acquisitions is unproven, has not received regulatory approval at its early stage of development and does not have alternative future uses. Milestone payments due under agreements with third party contract research organizations (CROs) are accrued when it is considered probable that the milestone event will be achieved.

Accrued Research and Development Expenses

As part of the process of preparing Consolidated Financial Statements, the Company is required to estimate accruals for research and development expenses. This process involves reviewing and identifying services which have been performed by third parties on the Company’s behalf and determining the value of these services. In addition, the Company makes estimates of costs incurred to date but not yet invoiced, in relation to external CROs and clinical site costs. The Company analyzes the progress of clinical trials, including levels of patient enrollment; invoices received and contracted costs, when evaluating the adequacy of the accrued liabilities for research and development. The Company makes significant judgments and estimates in determining the accrued balance in any accounting period. No material adjustments have been required for this accrual during the years ended December 31, 2015 and 2014.

Income Taxes

The Company accounts for income taxes under the asset and liability method in accordance with the relevant accounting guidance for income taxes. Under the asset and liability method, the current income tax provision or benefit is the amount of income taxes expected to be payable or refundable for the current year. A deferred income tax asset or liability is recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credits and loss carry-forwards. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax rate changes are reflected in the income tax provision during the period such changes are enacted. Changes in ownership may limit the amount of net operating loss (NOL) carry-forwards that can be utilized in the future to offset taxable income. The Company’s discussion of income tax is described more fully under note 21 found below.

In September 2011, the Company internally transferred certain intellectual property and licenses from the Company’s subsidiaries, including the U.S. based subsidiary, to SAG. Since the transfer of these assets was to a related party, the recognition of a deferred tax asset by SAG is prohibited and the net tax effect of the transaction is deferred in consolidation. The tax liability generated from this transaction is offset by a deferred charge that is being amortized over ten years. As of December 31, 2015, 2014 and 2013, the total deferred charge is $1.7 million, $2.0 million and $5.2 million, respectively, after a net current year amortization and impairment expense of $0.3 million, $3.2 million and $0.7 million, respectively. Impairment expense included in the $3.2 million for 2014 totaled $1.8 million and resulted from the cessation of direct commercialization activities for RESCULA in 2014.

For all significant intercompany transactions, the Company’s management has evaluated the terms of the transactions using significant estimates and judgments to ensure that each significant transaction would be on similar terms if the Company completed the transaction with an unrelated party. Although the Company believes there will be no material tax liabilities to the Company as a result of multi-jurisdictional transactions, there can be no assurance that taxing authorities will not assert that transactions were entered into at monetary values other than fair values. If such assertions were made, the Company’s intention would be to vigorously defend its positions; however, there can be no assurance that additional liabilities may not occur as a result of any such assertions.

The Company considers certain undistributed earnings of foreign subsidiaries to be indefinitely reinvested outside of the U.S. and, accordingly, no U.S. deferred taxes have been recorded under the applicable accounting standard with respect to such earnings. Should the earnings be remitted to the U.S., the Company may be subject to additional U.S. taxes, net of allowable foreign tax credits. It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings.

Uncertain Tax Positions

The Company applies the accounting guidance for uncertain tax positions that requires the application of a more likely than not threshold to the recognition and de-recognition of uncertain tax positions. If the recognition threshold is met, the Company recognizes a tax benefit measured at the largest amount of the tax benefit that, in its judgment, is more than 50% likely to be realized upon settlement.

The Company has recorded an income tax liability of approximately $2.9 million and $0.8 million, including interest, for uncertain tax positions as of December 31, 2015 and 2014, respectively. As of December 31, 2015, the entire balance was reflected as other liabilities in the accompanying Consolidated Balance Sheets. As of December 31, 2014, $0.3 million and $0.6 million are reflected as other current liabilities and other liabilities, respectively, in the accompanying Consolidated Balance Sheets. These amounts represent the aggregate tax effect of differences between tax return positions and the amounts otherwise recognized in the Company’s Consolidated Financial Statements.

The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision. It is reasonably possible that the $1.3 million of the liability for unrecognized tax benefits will decrease within the next 12 months. In addition, future changes in the unrecognized tax benefits would have an effect on the effective tax rate when recognized.

Currently, tax years 2011 to 2015 remain open and subject to examination in the major tax jurisdictions in which tax returns are filed.

Foreign Currency

The functional currency for most of the Company’s foreign subsidiaries is its local currency. For the Company’s non-U.S. subsidiaries that transact in a functional currency other than the U.S. dollar, assets and liabilities are translated at current rates of exchange at the balance sheet date. Income and expense items are translated at the average foreign exchange rates for the period. Adjustments resulting from the translation of the financial statements of the Company’s foreign operations into U.S. dollars are excluded from the determination of net income and are recorded in accumulated other comprehensive income, a separate component of equity. For subsidiaries where the functional currency is the U.S. dollar, non-monetary assets and liabilities are translated at the rate of exchange in effect on the date assets were acquired while monetary assets and liabilities are translated at current rates of exchange as of the balance sheet date. Income and expense items are translated at the average foreign currency rates for the period. Translation adjustments of these subsidiaries are included in net income.

Realized and unrealized foreign currency gains or losses on assets and liabilities denominated in a currency other than the functional currency are included in net income.

Other Comprehensive Income

Comprehensive income consists of net income plus certain other items that are recorded directly to stockholders’ equity. The Company has reported comprehensive income in the Consolidated Statements of Operations and Comprehensive Income.

The Company has outstanding intercompany loans and investments between its subsidiaries which are eliminated for purposes of the Consolidated Financial Statements. These intercompany loans are not expected to be repaid or settled in the foreseeable future. Accordingly, the currency transaction gains or losses on these intercompany loans are recorded as part of other comprehensive income in the Consolidated Financial Statements. In addition, the actuarial gains and losses of the Swiss Pension plan are recorded in comprehensive income.

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (FASB) issued new guidance related to accounting for leases. The new standard requires the recognition of assets and liabilities arising from lease transactions on the balance sheet and the disclosure of key information about leasing arrangements. Accordingly, a lessee will recognize a lease asset for its right to use the underlying asset and a lease liability for the corresponding lease obligation. Both the asset and liability will initially be measured at the present value of the future minimum lease payments over the lease term. Subsequent measurement, including the presentation of expenses and cash flows, will depend on the classification of the lease as either a finance or an operating lease. Initial costs directly attributable to negotiating and arranging the lease will be included in the asset. For leases with a term of 12 months or less, a lessee can make an accounting policy election by class of underlying asset to not recognize an asset and corresponding liability. Lessees will also be required to provide additional qualitative and quantitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. These disclosures are intended to supplement the amounts recorded in the financial statements and provide additional information about the nature of an organization’s leasing activities. The new standard is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The transition guidance also provides specific guidance for sale and leaseback transactions, build-to-suit leases and amounts previously recognized in accordance with the business combinations guidance for leases. We are currently evaluating our expected adoption method and the impact of this new standard on our consolidated financial statements.

In January 2016, the FASB issued Accounting Standards Update (ASU) 2016-01,

Recognition and Measurement of Financial Assets and Financial Liabilities

(ASU 2016-01), which requires that most equity investments be measured at fair value, with subsequent changes in fair value recognized in net income (other

than those accounted for under equity method of accounting). This guidance is effective for fiscal years, and interim periods within those

years, beginning after December 15, 2017. The Company is currently assessing the impact of the adoption of this guidance on its Consolidated Financial

Statements and disclosures.

In November 2015, the FASB issued ASU No. 2015-17,

Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes

, (ASU 2015-17). This new guidance requires businesses to classify deferred tax liabilities and assets on their balance sheets as noncurrent. Under existing accounting, a business must separate deferred income tax liabilities and assets into current and noncurrent. ASU 2015-17 was issued as a way to simplify the way businesses classify deferred tax liabilities and assets on their balance sheets. Public companies must apply ASU 2015-17 to fiscal years beginning after December 15, 2016. Companies must follow the requirements for interim periods within those fiscal years, but early adoption at the beginning of an interim or annual period is allowed for all entities. The Company has elected to early adopt the guidance and applied the guidance on a prospective basis. The adoption has no impact on consolidated statements of operations and comprehensive income, changes in stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2015. The impact to the consolidated balance sheets as of December 31, 2014 was the reclassification of $0.5 million from current deferred income tax assets, net to non-current deferred income tax liabilities, net resulting in an ending balance of $1.0 million of noncurrent deferred tax asset and $0.8 million of noncurrent deferred tax liability as of December 31, 2014.

In September 2015, the FASB issued Accounting Standards Update 2015-16,

Business Combinations (Topic 805) - Simplifying the Accounting for Measurement-Period Adjustments

(ASU 2015-16), which requires that an acquirer recognize adjustments to provisional amounts that are identified during the

measurement period in the reporting period in which the adjustment amounts are determined. The amendments in ASU 2015-16 require that the acquirer record, in

the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to

the provisional amounts, calculated as if the accounting had been completed at the acquisition date. An entity is required to present separately on the face of the

income statement or disclose in the notes thereto the portion of the amount recorded in current period earnings by line item that would have been recorded in

previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. This guidance is effective for fiscal years,

and for interim periods within those fiscal years, beginning after December 15, 2015 and should be applied prospectively to adjustments to provisional amounts

that occur after the effective date with earlier adoption permitted for financial statements that have not been issued. The Company will prospectively adopt this

guidance beginning in fiscal year 2016.

In July 2015, the FASB issued ASU No. 2015-11,

Simplifying the Measurement of Inventory

, (ASU 2015-11). This new guidance requires an entity to measure inventory at the lower of cost and net realizable value. Currently, entities measure inventory at the lower of cost or market. ASU 2015-11 replaces market with net realizable value. Net realizable value is the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. Subsequent measurement is unchanged for inventory measured under last-in, first-out or the retail inventory method. ASU 2015-11 requires prospective adoption for inventory measurements for fiscal years beginning after December 15, 2016, and interim periods within those years for public business entities. Early application is permitted. The Company is evaluating the effect that ASU 2015-11 will have on its Consolidated Financial Statements and related disclosures.

In April 2015

, the FASB issued ASU Number 2015-03,

Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs

(ASU 2015-03). ASU 2015-03 specifies that debt issuance costs related

to a note shall be reported in the balance sheet as a direct reduction from the face amount of the note. ASU 2015-03 is effective for annual reporting periods beginning after December 15, 2015, and interim periods within those fiscal years. ASU 2015-03 will have no effect on the Company’s results of operations or liquidity.

In May 2014, the FASB issued authoritative guidance which sets forth a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The guidance was originally scheduled to be effective for annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2016, but in July 2015 the FASB voted to defer the effective date to December 15, 2017 for interim and annual reporting periods beginning after that date. Early adoption is permitted, but not before the original effective date of December 15, 2016. Companies may use either a full retrospective or a modified retrospective approach to adopt this guidance. The Company is currently evaluating the impact of this guidance on its results of operations, financial position and cash flows.

Note 3 - Net Income Per Share

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Earnings Per Share [Text Block]

3. Net Income per Share

Basic net income per share is computed by dividing net income by the sum of the weighted average class A and class B common shares outstanding. Diluted net income per share is computed by dividing net income by the weighted average common shares and potential dilutive common shares outstanding. Diluted net loss per share, when applicable, is computed by dividing net loss by the weighted average common shares outstanding without the impact of potential dilutive common shares outstanding because they would have an anti-dilutive impact on diluted net loss per share.

The computation of net income per share for the years ended December 31, 2015, 2014 and 2013 is shown below:

	Year To Date December 31,
(in thousands, except per share data)	2015		2014		2013
Basic net income per share:
Net income	$	33,371	$	13,128	$	7,015

Weighted average class A and B common shares outstanding		44,150		43,691		41,716

Basic net income per share	$	0.76	$	0.30	$	0.17

Diluted net income per share:
Net income	$	33,371	$	13,128	$	7,015

Weighted average class A and B common shares outstanding for diluted net income per share		44,150		43,691		41,716

Assumed exercise of stock options under the treasury stock method		1,530		815		828
		45,680		44,506		42,544

Diluted net income per share	$	0.73	$	0.29	$	0.16

The potentially dilutive securities used in the calculations of diluted net income per share at December 31, 2015, 2014 and 2013 are as follows:

	December 31,
(In thousands)	2015		2014		2013
Employee stock options		3,290		1,124		2,129
Non-employee stock options		-		255		410

The following securities were excluded from the computation of diluted net income per share as their effect would be anti-dilutive as of December 31, 2015, 2014 and 2013:

	December 31,
(In thousands)	2015		2014		2013
Employee stock options		1,188		3,012		530

Note 4 - Segment Reporting

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

4. Segment Information

In the first quarter of 2015, the Company made a number of strategic and operational changes to its business, including re-evaluating and accelerating its pipeline to focus on clinical programs that it believes hold the most promise for patients, the highest likelihood for regulatory approval, and the strongest potential for commercial return. As a result of such changes, the Company combined its reportable geographic segments of Asia, the Americas and Europe into one operating segment: the development and commercialization of pharmaceutical products. This change reflects the manner in which information is now being presented internally and used by the Company’s chief operating decision maker, the Company’s Chief Executive Officer, to allocate resources and assess performance.

Summarized product category and geographic information is shown in the tables below.

Product Category Information

Revenues for product categories are attributed based on the following categories.

Product royalty revenue represents royalty revenue earned on the net sales of AMITIZA in North America. Product sales revenue represents drug product net sales of AMITIZA in North America, Japan and Europe and drug product net sales of RESCULA in Japan. Research and development revenue represents funded development work primarily related to AMITIZA. Contract and collaboration revenue represents the amortization of up-front payments under the North America Takeda Agreement and release of the collaboration obligation under the Global Takeda agreement. Co-promotion revenue represents reimbursements by Takeda of a portion of the Company’s co-promotion costs for its specialty sales force.

Company revenues by product category for the years ended December 31, 2015, 2014 and 2013 were as follows:

	Years Ended December 31,
(In thousands)	2015		2014		2013
Product royalty revenue	$	74,138	$	62,775	$	52,100
Product sales revenue		66,276		33,252		16,425
Research and development revenue		10,199		7,246		654
Contract and collaboration revenue		2,567		8,817		20,354
Co-promotion revenue		-		3,360		61
Total	$	153,180	$	115,450	$	89,594

Geographical Information

Revenues are attributable to countries based on the location of the customer. The Company operates a manufacturing facility in Japan that supplies products to customers as well as the Company’s subsidiaries in other countries. The sales from the manufacturing operations to other countries are included in the net sales of the country in which the manufacturing location is based. The intersegment portions of such sales are excluded to derive consolidated revenues. The Company’s country of domicile is the United States.

Company revenues by geographic location for the years ended December 31, 2015, 2014 and 2013 were as follows:

	Years Ended December 31,
(In thousands)	2015		2014		2013
United States	$	95,769	$	74,688	$	73,637
Japan		55,371		32,128		15,849
Rest of the world		2,040		8,634		108
Total	$	153,180	$	115,450	$	89,594

The Company’s long-lived assets by geographic location where located on December 31, 2015, 2014 and 2013 were as follows:

	December 31,
(In thousands)	2015		2014		2013
United States	$	3,105	$	566	$	869
Japan		3,232		114		175
Rest of the world		56		83		112
Total	$	6,393	$	763	$	1,156

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8981-108599

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8380-108599

Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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-Publisher FASB
-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-URI http://asc.fasb.org/extlink&oid=51669610&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Note 5 - Acquisitions

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Business Acquisition, Integration, Restructuring and Other Related Costs [Text Block]

5. Acquisitions

Acquisitions have been accounted for as business combinations and the acquired companies results have been included in the accompanying consolidated statements of income from their respective date of acquisition.

The Company’s recent acquisition has been made at prices above the fair value of the acquired net assets, resulting in goodwill, due to expectations of synergies of combining the businesses. These synergies include the use of the Company’s existing infrastructure, such as sales and distribution channels, customer relations, shared services, as well as the elimination of duplicative facilities, functions and staffing.

Acquisition of R-Tech

In August 2015, the Company entered into a share purchase agreement with Drs. Ryuji Ueno and Sachiko Kuno and S&R Technology Holdings, LLC, to acquire 44% of outstanding R-Tech shares. The total purchase price for these shares was 1,400 Japanese Yen (JPY) per share, or 12 billion JPY in the aggregate, or approximately $100.0 million.

In August 2015, the Company launched, through its wholly-owned Japanese subsidiary (the Offeror), an all-cash tender offer in Japan to acquire the remaining 56% of the outstanding shares and stock acquisition rights of R-Tech for 1,900 JPY per share, resulting in a total consideration of up to 21 billion JPY, or approximately $175.0 million. The price offered in the tender offer reflected that R-Tech held approximately $62.1 million in cash and 2.5 million shares of the Company’s common stock as of the commencement of the tender offer.

On October 20, 2015, the transactions contemplated by the share purchase agreement were completed, and the tender offer was concluded. As a result of these transactions, the Company acquired approximately 98% of R-Tech’s outstanding shares. The Company acquired the remaining 2% of outstanding shares of R-Tech through a squeeze-out process under Japanese law on December 8, 2015 for total consideration of 926 million JPY, or approximately $7.7 million. This acquisition diversified the product portfolio, expanded the Company’s development pipeline and integrated the manufacturing of the Company’s main product, AMITIZA.

This transaction was accounted for under the acquisition method of accounting, with the Company as the acquirer. Under the acquisition method of accounting, the assets and liabilities of R-Tech were recorded as of the acquisition date at their respective fair values, and combined with those of the Company.

The allocation of the purchase price is preliminary and is not yet finalized. The purchase price allocation is still considered preliminary due to finalization of valuation reports, evaluation of acquired tax attributes and review of IPR&D. The preliminary allocation of the purchase price is based upon preliminary estimates using information that was available to management at the time the financial statements were prepared and these estimates and assumptions are subject to change within the measurement period, up to one year form the acquisition date. Accordingly, the allocation may change. The Company continues to gather information about the fair value of all assets and liabilities, including intangible assets, acquired deferred tax and liabilities. Acquisition related costs are expensed when incurred and are included in general and administrative expenses in the consolidated statement of operations and comprehensive income.

The preliminary allocation of the purchase price based upon estimated fair value of assets acquired and liabilities assumed on October 20, 2015 is as follows:

(In thousands)	As of October 20, 2015
Cash	$	62,097
Accounts receivable		8,299
Inventory (i)		37,563
Prepaid expenses		3,425
Property, plant and equipment		3,115
Other long term assets		449
Accounts payable and accrued liabilities		(11,598	)
Income tax payable		(5,025	)
Other liabilities, current		(3,282	)
Deferred tax liability, net		(62,927	)
Other liabilities, long term		(9,347	)
R-Tech shares of Sucampo stock (treasury stock)		43,956
Total fair value of tangible assets acquired and liabilities assumed		66,725
Acquired in-process research and development		6,200
Acquired intangible assets		134,600
Goodwill		61,228
Total purchase price	$	268,753

Total purchase price	$	268,753
Settlement of net receivable from pre-existing relationship		6,364
Total consideration	$	275,117

Acquisition, net of acquired cash	$	161,187
Acquired cash		62,097
Purchase of treasury stock		43,956
Squeeze out liability for non-tendering R-Tech shareholders		7,668
Other		209
Total consideration	$	275,117

(i) Acquired inventory includes a $20.1 million adjustment to record inventory at fair value, referred to as a step-up adjustment. The $20.1 million step-up adjustment will amortize evenly through costs of goods sold over a seven month period beginning in November 2015 and ending in May 2016, in alignment with expected inventory turnover. The amortization of the inventory step-up adjustment will increase costs of goods sold during these periods. For the year ended December 31, 2015, the Company recognized $5.8 million in additional costs of goods sold related to the amortization of the inventory step-up adjustment.

The estimated fair value of intangible assets acquired and related estimated amortization periods in years is as follows:

(In thousands)	As of October 20, 2015		Amortization period in years

Acquired in-process research and development	$	6,200		Indefinite
Acquired intangible assets:
AMITIZA - manufacturing know-how		120,200		14
RESCULA - manufacturing know-how		14,400		10
	$	134,600

In-process research and development (IPR&D) acquired from R-Tech is related to RTU-009 and RTU-1096. Management estimated the fair value of IPR&D at the acquisition date to be $6.2 million. The estimated fair value was determined using the replacement cost approach. Under the replacement cost approach, historical research and development spending is analyzed to derive the costs incurred to date related to the asset. An expected return of 20% was applied to the cumulative mid-year pre-tax research and development costs incurred to date, as this estimates the required rate of a return a prudent investor would require on a similarly situated asset. An adjustment was not made for economic obsolescence as the costs considered are historical and the method applied is considering the estimate of fair value to buy the asset in the market at its current stage of development. No tax amortization benefit has been applied given the asset is valued under the replacement cost approach, which is representative of buying the asset in the market at fair trade value.

The Company estimated the fair values of the AMITIZA manufacturing know-how intangible asset and RESCULA manufacturing know-how intangible asset using the income approach with a present value discount rate of 18%, which is based on the estimated weighted-average cost of capital for companies with profiles substantially similar to that of R-Tech and the Company. This is comparable to the estimated internal rate of return for the acquisition and presents the rate that market participants would use to value these intangible assets. The projected cash flows from the AMITIZA manufacturing know-how intangible asset and RESCULA manufacturing know-how intangible asset were based on key assumptions including estimates of revenues, operating profits, the life of the potential commercialized product, associated risks, and the risks related to the viability of and potential alternative use in any future markets.

The weighted average amortization period of the intangible assets from the R-Tech acquisition is 78 months which is reflective of expected cash flows. For the year ended December 31, 2015, the Company recorded amortization expense of $3.7 million, all of which has been recorded in costs of goods sold in the Consolidated Statements of Operations and Comprehensive Income.

The Company recorded approximately $61.2 million in goodwill related to the acquisition of R-Tech, representing the purchase price paid in the acquisition that was in excess of the fair value of the tangible and intangible assets acquired. None of the goodwill generated from R-Tech acquisition is expected to be deductible for tax purposes.

The Company has incurred transaction costs related to the R-Tech acquisition of approximately $5.2 million for the year ended December 31, 2015, all of which has been recorded in general and administrative expenses.

The following unaudited pro forma information is presented as if the acquisition had occurred on January 1, 2014, and combines the historical results of operations of the Company and R-Tech for the year ended December 31, 2015 and 2014.

		Year Ended December 31,
(In thousands)		2015 (unaudited)		2014 (unaudited)
Pro forma revenue	$	199,462	$	151,527
Pro forma net income		25,617		(20,031	)

For the year ended December 31, 2015, R-Tech contributed revenues and net loss to the Company’s consolidated results of $11.8 million and $4.7 million, respectively.

Note 6 - Restructuring

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Restructuring and Related Activities Disclosure [Text Block]

6. Restructuring

In December 2015, the Company adopted a plan to restructure certain operations and consolidate certain functions in the Company’s corporate headquarters located in Rockville, Maryland. During the fourth quarter, the Company recorded pretax charges of approximately $953,000. The restructuring plan primarily included headcount reductions. These costs are reflected within operating expenses between research and development, general and administrative expenses, and selling and marketing expenses. At December 31, 2015, a restructuring accrual of $851,000 was included in accrued liabilities. The Company expects to record additional restructuring charges in 2016 related to this program and in connection with the integration of the R-Tech acquisition.

The following table summarizes the cash components of the restructuring costs at December 31, 2015.

(In thousands)	Termination Benefits			Facility Related		Contract & Other Costs		Total
Balance at December 31, 2014	$	-		$	-	$	-	$	-
Expenses incurred		953			-		-		953
Amounts paid		(102	)		-		-		(102	)
Balance at December 31, 2015	$	851		$	-	$	-	$	851

Note 7 - Current and Non-Current Investments

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Investment [Text Block]

7. Current and Non-Current Investments

At December 31, 2015, the Company held no investments. At December 31, 2014, current and non-current investments consisted of the following securities:

	December 31, 2014
(In thousands)	Cost		Unrealized Gains		Unrealized Losses			Fair Value
Current:
U.S. government agencies	$	4,203	$	1	$	-		$	4,204
Certificates of deposit		2,500		-		-			2,500
Corporate bonds		4,575		-		(3	)		4,572
U.S. commercial paper		11,109		8		-			11,117
Total	$	22,387	$	9	$	(3	)	$	22,393

Non-current:
U.S. government agencies	$	8,047	$	-	$	(15	)	$	8,032
Certificates of deposit		5,000							5,000
Corporate bonds		509		-		(1	)		508
Total	$	13,556	$	-	$	(16	)	$	13,540

Note 8 - Fair Value Measurements	12 Months Ended
Note 8 - Fair Value Measurements	Dec. 31, 2015
Notes to Financial Statements
Fair Value, Measurement Inputs, Disclosure [Text Block]	8. Fair Value Measurements The Company performs fair value measurements in accordance with the FASB’s guidance for fair value measurements and disclosures, which defines fair value as the exchange price that would be received for selling an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. A fair value hierarchy is established which requires the Company to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The Company classifies its investments into the following categories based on the three levels of inputs used to measure fair value: Level 1 : Observable inputs, such as quoted prices in active markets for identical assets or liabilities; Level 2 : Inputs, other than the quoted price in active markets, that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; or Level 3 : Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. The carrying values of financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, collaboration obligation and other accrued liabilities, approximate their fair values due to their short maturities. The estimated fair value of long term debt as disclosed in note 17 and 18 was based on similar types of borrowings. The estimated fair values may not represent actual values of the financial instruments that could be realized as of the balance sheet date or that will be realized in the future. There were no fair value adjustments other than the assets and liabilities acquired under the R-Tech acquisition (see note 5) in the years ended December 31, 2015 and 2014 for nonfinancial assets or liabilities required to be measured at fair value on a non-recurring basis. The Company’s financial instruments measured at fair value on a recurring basis, which are subject to the fair value disclosure requirements, are as follows: There were no transfers between levels during the years ended December 31, 2015 and 2014.

Note 9 - Inventories

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Inventory Disclosure [Text Block]

9. Inventories

Inventories are stated at the lower of cost or net realizable value. Inventories consist of raw materials, work-in-process and finished goods. The Company’s inventories include the direct purchase cost of materials and supplies and manufacturing overhead costs. In connection with the acquisition of R-Tech, all inventory held by R-Tech was stepped-up in value to $37.6 million as of the acquisition date. As of December 31, 2015, the remaining balance of inventory step-up was $14.3 million. As of December 31, 2014, the company had no inventory.

Inventories consisted of the following as of December 31, 2015:

	December 31,
(In thousands)	2015
Raw materials	$	5,554
Work in process		26,926
Finished goods		641
Total	$	33,121

Note 10 - Property and Equipment

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Property, Plant and Equipment Disclosure [Text Block]

10. Property and Equipment

Property and equipment consist of the following at December 31, 2015 and 2014:

	December 31,
(In thousands)	2015			2014
Computer and office machines	$	2,647		$	2,622
Furniture and fixtures		1,023			473
Leasehold improvements		3,066			1,415
Buildings		1,022			-
Machinery and equipment		2,074			-
Construction in progress		140			-
Total cost		9,972			4,510
Less: accumulated depreciation		(3,579	)		(3,747	)
Total	$	6,393		$	763

Depreciation expense for the years ended December 31, 2015, 2014 and 2013 was approximately $637,000, $422,000 and $512,000, respectively.

Leasehold improvements as of December 31, 2015 are tenant improvements to the Company’s offices in Rockville, Maryland and Kobe, Japan. Leasehold improvements as of December 31, 2014 are tenant improvements to the Company’s former headquarters in Bethesda, Maryland.

Note 11 - Intangible Assets, In-process Research and Development and Goodwill

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Intangible Assets Disclosure [Text Block]

11. Intangible Assets, In-Process Research and Development and Goodwill

Intangible assets by major class as of December 31, 2015 and 2014 are as follows:

	December 31, 2015					December 31, 2014
(In thousands)	Weighted average life (in months)		Carrying amount			Weighted average life (in months)		Carrying amount
Amortized intangible assets
Patent and license rights		72	$	10,513			84	$	10,513
Manufacturing know how		76		134,600					-
Accumulated amortization				(8,463	)				(4,711	)
Impairment losses				(5,651	)				(5,651	)
Foreign currency translation adjustments				(684	)				-
Total amortized intangible assets			$	130,315				$	151

Unamortized intangible assets
In-process research and development			$	6,171				$	-
Goodwill				60,937					-
Total unamortized intangible assets			$	67,108				$	-

Total intangible assets			$	197,423				$	151

The changes in intangible assets for the years ended December 31, 2015 and 2014 are as follows:

(In thousands)	Intangibles			Goodwill			In-process research & development
Balance at December 31, 2013	$	6,438		$	-		$	-
Amortization		(636	)		-			-
Impairment losses		(5,651	)		-			-

Balance at December 31, 2014	$	151		$	-		$	-
Additions		134,600			61,228			6,200
Amortization		(3,752	)		-			-
Foreign currency translation adjustment		(684	)		(291	)		(29	)
Balance at December 31, 2015	$	130,315		$	60,937		$	6,171

Amortization expense on intangible assets totaled approximately $3.7 million, $636,000 and $1.0 million, respectively for the years ended December 31, 2015, 2014 and 2013.

There was no impairment charge recorded during the twelve months ended December 31, 2015. The changes in the carrying value of goodwill during the year ended December 31, 2015 resulted from the acquisition and foreign currency translation. In 2014, the Company ceased direct commercialization activities for RESCULA in the United States for its approved FDA indication. Accordingly, the Company recorded an impairment charge of $5.6 million in 2014, which was the full amount of the remaining balances of the unamortized intangibles related to its two RESCULA license agreements. Both license agreements were for the development and commercialization of RESCULA for its approved indication, and for any new indications for unoprostone isopropyl.

The estimated fair values of acquired in-process research and development projects which have not reached technological feasibility at the date of acquisition are capitalized and subsequently tested for impairment through completion of the development process, at which point the capitalized amounts are amortized over their estimated useful life. If a project is abandoned rather than completed, all capitalized amounts are written-off immediately. During 2015 and 2014, no development projects were completed and no in-process research and development costs were reclassified into developed technology. As the underlying in-process research and development are in the early stage of development, the Company does not expect to amortize any in-process research and development in 2016.

Amortization of intangibles for the next five years is expected to be as follows:

(In thousands)		Amortization
Years ended December 31,
2016	$	22,689
2017		22,689
2018		22,689
2019		22,689
2020		22,689

Note 12 - Accrued Expenses

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

12. Accrued Expenses

Accrued expenses consist of the following at December 31, 2015 and 2014:

	December 31,
(In thousands)	2015		2014
Research and development costs	$	3,843	$	3,537
Employee compensation		4,860		3,459
Restructuring		851		-
Selling and marketing costs		1		163
Legal service fees		428		612
Other accrued expenses		903		696
Total	$	10,886	$	8,467

Note 13 - Collaboration Obligation	12 Months Ended
Note 13 - Collaboration Obligation	Dec. 31, 2015
Notes to Financial Statements
Collaborative Arrangement Disclosure [Text Block]	13. Collaboration Obligation Under the Global Takeda Agreement (see note 19), the Company received an upfront payment from Takeda of $14.0 million in 2014, of which the Company is obligated to reimburse Takeda for the first $6.0 million in developmental expenses incurred by Takeda. At December 31, 2015 and 2014, the collaboration obligation was $5.6 million and $6.0 million, respectively.

Note 14 - Other Current Liabilities

12 Months Ended

Dec. 31, 2015

Other Current Liabilities [Member]

Notes to Financial Statements

Other Liabilities Disclosure [Text Block]

14. Other Current Liabilities

Other current liabilities consist of the following at December 31, 2015 and 2014:

	December 31,
(In thousands)	2015		2014
Indirect taxes payable		5,963		3,075
Squeeze out liability for non-tendering R-Tech shareholders		7,668		-
Other current liabilities		508		543
Total	$	14,139	$	3,618

Other Liabilities Disclosure [Text Block]

15. Other Liabilities

Other liabilities consist of the following at December 31, 2015 and 2014:

	December 31,
(In thousands)	2015		2014
Deferred grants	$	9,604	$	-
Unrecognized tax benefits		3,061		-
Deferred leasehold incentive		1,715		380
Defined benefit obligation		949		977
Other liabilities		414		579
Total	$	15,743	$	1,936

Deferred grants consist of a $9.3 million interest-free grant from the Japan Science and Technology Agency for use in developing unoprostone-related medicine for pigmentary degeneration of the retina, and a $300,000 government grant from Montgomery County, Maryland related to the move of the Company’s headquarters. Both grants may have to be repaid if certain conditions are not met.

Defined benefit obligation relates to defined benefit pension plans for employees in the Company’s subsidiary in Switzerland (Swiss Plan). The Swiss Plan is a government-mandated retirement fund that provides employees with a minimum investment return. The minimum investment return is determined annually by the Swiss government and was 1.75% in 2015 and 1.75% in 2014. Under the Swiss Plan, the Company and certain of its employees with annual earnings in excess of government determined amounts are required to make contributions into a fund managed by an independent investment fiduciary. Employer contributions must be in an amount at least equal to the employee’s contribution. Minimum employee contributions are based on the respective employee’s age, salary, and gender. As of December 31, 2015, the Swiss Plan had an unfunded net pension obligation of approximately $949,000, plan assets of approximately $1.6 million and projected benefit obligation of approximately $2.5 million. As of December 31, 2014, the Swiss Plan had an unfunded net pension obligation of approximately $977,000, plan assets of approximately $1.8 million and projected benefit obligation of approximately $2.8 million. The entire liability is listed as non-current because plan assets are more than enough to pay expected benefit payments over the next year. The Company recognized pension expense of $226,000 and $221,000 for the years ended December 31, 2015 and 2014, respectively, related to the Swiss Plan.

While the Swiss Plan originated in 2011, the Company only accounted for the Swiss Plan in accordance with ASC 715-30

Defined Benefit Plans - Pensions

starting in 2014. The Company evaluated the impact of not recording the net pension obligation in the Consolidated Balance Sheet and corresponding charges in Net income and Total comprehensive income in the Statement of Operations and Comprehensive Income, and the omission of the required pension disclosures in prior years, and concluded that the effect was immaterial. The Company corrected the immaterial error in 2014 by recording an out of period adjustment to the net pension obligation liability of $366,000, with an offsetting amount in Net Income of $11,000 and total comprehensive income of $355,000.

The following tables provide reconciliations of the changes in the Swiss Plan’s projected benefit obligations and assets, and the assumptions used at December 31, 2015 and 2014.

Reconciliation of Projected Benefit Obligation	December 31, 2015			December 31, 2014
(in thousands)
Projected benefit obligation at beginning of year	$	2,760		$	1,708
Service cost		164			191
Interest cost		28			43
Plan participants’ contributions		90			165
Plan amendments		(39	)		-
Actuarial loss (gain)		-			653
Benefits paid		(436	)		83
Expenses Paid		(5	)		(8	)
Premiums Paid		(49	)		(66	)
Projected benefit obligation at end of year	$	2,513		$	2,769

Reconciliation of Fair Value of Plan Assets	December 31, 2015			December 31, 2014
(in thousands)
Fair value of plan assets at beginning of year	$	1,787		$	1,342
Actual return on plan assets		42			42
Employer contribution		136			234
Plan participants’ contributions		90			165
Benefits paid		(436	)		83
Expenses Paid		(5	)		(8	)
Premiums Paid		(49	)		(66	)
Fair value of plan assets at end of year	$	1,565		$	1,792

Funded status at end of year	$	(948	)	$	(977	)

Reconciliation of amounts recognized in Consolidated Statements of Operations and Comprehensive Income	Year ended December 31, 2015			Year ended December 31, 2014
(in thousands)
Net loss	$	(862	)	$	(978	)

Total amount recognized in accumulated other comprehensive income	$	(862	)	$	(978	)
Accumulated contributions in excess of net periodic benefit cost		(87	)		1
Funded status at end of year	$	(949	)	$	(977	)

Net periodic pension cost included the following components	Year ended December 31, 2015			Year ended December 31, 2014
(in thousands)
Service cost	$	164		$	191
Interest cost		28			43
Expected return on assets		(39	)		(30	)
Amortization of unrecognized net loss		73			17
Net periodic pension cost	$	226		$	221

Changes in plan assets and benefit obligations recognized in other comprehensive income	Year ended December 31, 2015			Year ended December 31, 2014
(in thousands)
New prior service cost	$	(39	)	$	-
Net loss arising during year		(2	)		641
Amortization or settlement of net loss		(73	)		(17	)
Total recognized in other comprehensive income	$	(114	)	$	624

Total loss recognized in net periodic cost and other comprehensive income	$	111		$	845

Estimated amounts to be amortized from accumulated other comprehensive income over the next year	December 31, 2015		December 31, 2014
(in thousands)
Net loss	$	76	$	73

Additional year-end information for plans with projected benefit obligations in excess of plan assets	December 31, 2015		December 31, 2014
(in thousands)
Projected benefit obligation	$	2,514	$	2,769
Accumulated benefit obligation		2,233		2,469
Fair value of plan assets		1,566		1,792

Weighted average allocation of plan assets	December 31, 2015			December 31, 2014
Debt Securities		78	%		79	%
Real Estate		12	%		12	%
Other Investments		8	%		6	%
Cash		2	%		3	%
Total		100	%		100	%

Weighted average assumptions used to determine net periodic pension cost	Year ended December 31, 2015			Year ended December 31, 2014
Discount or settlement rates		1.0	%		2.5	%
Expected long-term rates of return on assets		2.1	%		2.1	%
Rates of increase in compensation levels		1.5	%		1.5	%

Weighted average assumptions used to determine future benefit obligations	December 31, 2015			December 31, 2014
Discount rate		0.9	%		1.0	%
Rates of increase in compensation levels		1.5	%		1.5	%

Expected future cash flows
(in thousands)
Employee Contributions
2016	$	155		$	151
Benefit Payments
2016		7			145
2017		12			10
2018		17			14
2019		23			18
2020		28			23
2021-2025		634			494

Note 15 - Other Liabilities

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Other Liabilities Disclosure [Text Block]

15. Other Liabilities

Other liabilities consist of the following at December 31, 2015 and 2014:

	December 31,
(In thousands)	2015		2014
Deferred grants	$	9,604	$	-
Unrecognized tax benefits		3,061		-
Deferred leasehold incentive		1,715		380
Defined benefit obligation		949		977
Other liabilities		414		579
Total	$	15,743	$	1,936

While the Swiss Plan originated in 2011, the Company only accounted for the Swiss Plan in accordance with ASC 715-30

Defined Benefit Plans - Pensions

The following tables provide reconciliations of the changes in the Swiss Plan’s projected benefit obligations and assets, and the assumptions used at December 31, 2015 and 2014.

Reconciliation of Projected Benefit Obligation	December 31, 2015			December 31, 2014
(in thousands)
Projected benefit obligation at beginning of year	$	2,760		$	1,708
Service cost		164			191
Interest cost		28			43
Plan participants’ contributions		90			165
Plan amendments		(39	)		-
Actuarial loss (gain)		-			653
Benefits paid		(436	)		83
Expenses Paid		(5	)		(8	)
Premiums Paid		(49	)		(66	)
Projected benefit obligation at end of year	$	2,513		$	2,769

Reconciliation of Fair Value of Plan Assets	December 31, 2015			December 31, 2014
(in thousands)
Fair value of plan assets at beginning of year	$	1,787		$	1,342
Actual return on plan assets		42			42
Employer contribution		136			234
Plan participants’ contributions		90			165
Benefits paid		(436	)		83
Expenses Paid		(5	)		(8	)
Premiums Paid		(49	)		(66	)
Fair value of plan assets at end of year	$	1,565		$	1,792

Funded status at end of year	$	(948	)	$	(977	)

Reconciliation of amounts recognized in Consolidated Statements of Operations and Comprehensive Income	Year ended December 31, 2015			Year ended December 31, 2014
(in thousands)
Net loss	$	(862	)	$	(978	)

Total amount recognized in accumulated other comprehensive income	$	(862	)	$	(978	)
Accumulated contributions in excess of net periodic benefit cost		(87	)		1
Funded status at end of year	$	(949	)	$	(977	)

Net periodic pension cost included the following components	Year ended December 31, 2015			Year ended December 31, 2014
(in thousands)
Service cost	$	164		$	191
Interest cost		28			43
Expected return on assets		(39	)		(30	)
Amortization of unrecognized net loss		73			17
Net periodic pension cost	$	226		$	221

Changes in plan assets and benefit obligations recognized in other comprehensive income	Year ended December 31, 2015			Year ended December 31, 2014
(in thousands)
New prior service cost	$	(39	)	$	-
Net loss arising during year		(2	)		641
Amortization or settlement of net loss		(73	)		(17	)
Total recognized in other comprehensive income	$	(114	)	$	624

Total loss recognized in net periodic cost and other comprehensive income	$	111		$	845

Estimated amounts to be amortized from accumulated other comprehensive income over the next year	December 31, 2015		December 31, 2014
(in thousands)
Net loss	$	76	$	73

Additional year-end information for plans with projected benefit obligations in excess of plan assets	December 31, 2015		December 31, 2014
(in thousands)
Projected benefit obligation	$	2,514	$	2,769
Accumulated benefit obligation		2,233		2,469
Fair value of plan assets		1,566		1,792

Weighted average allocation of plan assets	December 31, 2015			December 31, 2014
Debt Securities		78	%		79	%
Real Estate		12	%		12	%
Other Investments		8	%		6	%
Cash		2	%		3	%
Total		100	%		100	%

Weighted average assumptions used to determine net periodic pension cost	Year ended December 31, 2015			Year ended December 31, 2014
Discount or settlement rates		1.0	%		2.5	%
Expected long-term rates of return on assets		2.1	%		2.1	%
Rates of increase in compensation levels		1.5	%		1.5	%

Weighted average assumptions used to determine future benefit obligations	December 31, 2015			December 31, 2014
Discount rate		0.9	%		1.0	%
Rates of increase in compensation levels		1.5	%		1.5	%

Expected future cash flows
(in thousands)
Employee Contributions
2016	$	155		$	151
Benefit Payments
2016		7			145
2017		12			10
2018		17			14
2019		23			18
2020		28			23
2021-2025		634			494

Note 16 - Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

16. Commitments and Contingencies

Operating Leases

The Company leases office space in the U.S., Switzerland and Japan. In Japan the Company also leases a research and development facility and a manufacturing facility. At December 31, 2015, total future minimum non-cancelable lease payments under operating leases are as follows:

(In thousands of U.S. dollars)	December 31, 2015
2016	$	1,781
2017		941
2018		1,233
2019		1,020
2020		966
Total minimum lease payments	$	5,941

Rent expense for all operating leases was $1.8 million, $1.4 million and $1.5 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Research and Development Costs

The Company routinely enters into agreements with third-party CROs to oversee clinical research and development studies provided on an outsourced basis and assist in other research and development activities. The Company generally is not contractually obligated to pay the third party if the service or reports are not provided.

The maximum contingent liability under the Numab Agreement (see note 17) in the event that Numab defaults under its loan with Zurcher Kantonalbank is $2.2 million. As of December 31, 2015, due to the pay down of the loan with Zurcher Kantonalbank, the potential amount of payments in the event of Numab’s default is $1.5 million.

Note 17 - Related Party Transactions

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

17. Related Party Transactions

R-Tech Ueno, Ltd.

Before the R-Tech acquisition, R-Tech had been considered a related party. Drs. Ryuji Ueno and Sachiko Kuno are married to each other and prior to 2015, directly or indirectly, owned the majority of the stock of R-Tech. Drs. Ueno and Kuno are also controlling stockholders of S&R Technology Holding, LLC (S&R), which in turn owned approximately 47% of the Company’s common stock and 44% of R-Tech’s common stock. Dr. Ueno was the Company’s Chief Executive Officer and Chairman of the Company’s Board of Directors through March 3, 2014 and was our Chief Scientific Officer through March 18, 2014.

Prior to the R-Tech acquisition on October 20, 2015 (see note 5), the Company did not own manufacturing facilities. Instead, the Company contracted with R-Tech as the sole manufacturer of the Company’s products to produce AMITIZA and RESCULA. The Company had entered into multiple exclusive supply arrangements with R-Tech and had granted to R-Tech the exclusive right to manufacture and supply AMITIZA and other products and compounds to the Company to meet its commercial and clinical requirements. Since 2003, the Company has received upfront, development and milestone payments under these agreements totaling $9.0 million through October 20, 2015.

The Company recorded the following expenses under all of its agreements with R-Tech for the period January 1, 2015 through October 20, 2015, and for the years ended December 31, 2014 and 2013:

	January 1 through October 20,		Year Ended December 31,
(In thousands)	2015		2014		2013
Clinical supplies	$	155	$	396	$	827
Other research and development services		347		171		194
Commercial supplies		21,415		15,776		14,902
	$	21,917	$	16,343	$	15,923

Deferred revenues under the Company’s agreements with R-Tech consist of the following at December 31, 2015 and 2014.

	Year Ended December 31,
(In thousands)	2015		2014
Deferred revenue, current	$	-	$	453
Deferred revenue, non-current		-		4,141
	$	-	$	4,594

The decrease in deferred revenue from $4.6 million as of December 31, 2014 to zero as of December 31, 2015 was primarily due to the settlement of a pre-existing relationship upon acquiring R-Tech on October 20, 2015.

Numab AG

In September 2011, the Company entered into the Numab Agreement with Numab. Under the terms of the Numab Agreement, which extends through September, 2016, the Company would provide Numab with up to CHF 5.0 million as collateral and would serve as guarantor for a loan to Numab from a third party, Zurcher Kantonalbank. Following the payment of the first success fee during the first quarter of 2013, this amount was reduced to CHF 2.2 million, or approximately $2.2 million as of December 31, 2015.

As of December 31, 2015, collateral of CHF 2.2 million had been deposited by the Company and Numab has utilized CHF 1.5 million of its loan facility, or approximately $1.5 million. At December 31, 2015 and 2014, the Company has a recorded guarantee liability of $202,000 and $1.0 million, respectively, in collateral callable to meet a potential loan default by Numab.

Subordinated Unsecured Promissory Notes

In connection with the SAG acquisition in 2010, the Company issued a subordinated unsecured promissory note (Notes) to the Ueno Trust and Kuno Trust, former shareholders of SAG. The Ueno Trust and Kuno Trust are considered related parties. Each of the Notes was issued with an initial principal balance of approximately $25.9 million, or approximately $51.9 million in the aggregate. The interest rate for the Notes is the sum of the London Interbank Offered Rate, or LIBOR, plus 4.0%, and is reset on December 1st and June 1st each year. The interest rate beginning December 1, 2015 is 4.7%. On February 1, 2016, these Notes were paid in full.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References + Details

Note 18 - Notes Payable

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Debt Disclosure [Text Block]

18. Notes Payable

On October 16, 2015, the Company entered into a Credit Agreement (Credit Facility) with Jefferies Financing LLC. The Credit Facility provides for term loans in the aggregate principal amount of $250.0 million (Term Loans) and allows for the incurrence of incremental loans in an amount up to $25.0 million on the terms and subject to the conditions set forth in the Credit Facility. The Term Loans bear interest, at the Company’s option, at the Adjusted Eurodollar Rate plus 7.25% or the Adjustable Base Rate plus 6.25%. The Adjusted Eurodollar Rate is subject to a 1.00% floor and the Adjusted Base Rate is subject to a 2.00% floor. The Company must repay the Term Loans in installments of $6.25 million on the last business day of each quarter, starting in March 2016 and ending in September 2021, with the balance due in a final installment on October 16, 2021. The Company is prohibited from paying dividends under the terms of the agreement.

The Company’s payment obligations under the Credit Facility are secured by a lien on substantially all of the Company’s tangible and intangible assets, subject to certain limitation and restrictions. The Credit Facility contains certain affirmative, negative, financial and reporting covenants customary for financing of this type. The credit facility requires that the Company maintain at least $25.0 million in a restricted cash collateral account, until at least $35.0 million in aggregate principal amount of initial term loans has been prepaid or repaid. Affirmative covenants in the Credit Facility require that the Company prepay principal of the term loans in an amount equal to certain thresholds of excess cash as defined in the credit facility. The Company has the ability to repay the loans early in increments no less than $1 million, subject to a 2% early payment penalty if paid in year 1 and a 1% early payment penalty if paid in year 2. Thereafter, there is no early payment penalty. In addition, the Company must preserve the existence of the legal entity, maintain the property and insurance and comply with all laws and contractual obligations.

The credit facility also contains certain financial covenants, tested quarterly and in connection with any triggering event under the credit facility that include the maintenance of a total leverage ratio as of the last day of any fiscal quarter of 3.25 to 1.00 for the period ending December 31, 2015 through December 31, 2016. Thereafter, it decreases to 2.40 to 1.00 at December 31, 2017, 1.60 to 1.00 at December 31, 2018 and .80 to 1.00 at December 31, 2019.

Negative covenants in the credit facility limit the Company’s ability to, among other things: incur additional indebtedness or swap obligations, without triggering a repayment event, incur or permit any lien on any property or asset, dispose of material assets in excess of $2 million, make investments including loans in excess of $15 million or merge or divest a line of business or subsidiary.

Upon the occurrence and continuance of an event of default under the credit facility, the commitments of the lenders to make loans under the credit facility may be terminated and the Company’s payment obligation under the credit facility may be accelerated. The event of default under the credit facility include, among others, subject in some cases to specified cure periods: payment defaults; inaccuracy of representations and warranties in any material respect; defaults in the observance or performance of covenants; bankruptcy and insolvency related defaults; the entry of a final judgement in excess of a threshold amount; a material ERISA event; change of control; an impairment of collateral; and invalidity of loan documents relating to the credit facility. The Company was in compliance with all the covenants under the credit facility at December 31, 2015.

Company maturities of notes payable over the next five years are as follows:

(In thousands)	Amount
Years ended December 31,
2016	$	42,582
2017		25,000
2018		25,000
2019		25,000
2020		25,000

Note 19 - Collaboration and License Agreements

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Collaborative and License Arrangement Disclosure [Text Block]

19. Collaboration and License Agreements

North America Takeda Agreement

In October 2004, the Company entered into an agreement with Takeda to supply, develop and commercialize AMITIZA for gastrointestinal indications in the U.S. and Canada. The original agreement was amended on February 1, 2006 through a supplemental agreement, and in October 2014 the Company and Takeda and certain Takeda affiliates executed amendments to the agreement. Collectively, these are referred to as the North America Takeda Agreement. Payments to the Company under these agreements include a non-refundable upfront payment, non-refundable development and commercial milestone payments, reimbursement of certain development and co-promotion costs, and product royalties.

The Company has received a total of $160.0 million in upfront and development milestone payments through December 31, 2015 under the North America Takeda Agreement, including a $10.0 million development milestone received in the second quarter of 2013 for the first commercial sale of AMITIZA for OIC. Subject to development and acceptance of future indications, the Company is potentially entitled to receive additional development milestone and commercial milestone payments under the North America Takeda Agreement, although there can be no assurance that the Company will receive any such payments.

The following table summarizes the cash streams and related revenue recognized or deferred under the North America Takeda Agreement for the year ended December 31, 2015:

	Cash Received Through December 31,		Revenue Recognized for the Year Ended December 31,						Accounts Receivable for the Year Ended December 31,		Amount Deferred at December 31,
(In thousands)	2015		Through 2013		2014		2015		2015 (1)		2015

Product royalty revenue	$	405,410	$	291,427	$	62,775	$	74,000	$	22,792	$	-

Product sales revenue	$	996	$	-	$	-	$	10,311	$	9,315	$	-

Research and development revenue:
Up-front payment - remainder	$	17,624	$	17,624	$	-	$	-	$	-	$	-
Development milestones		140,000		140,000		-		-		-		-
Reimbursement of research and development expenses		131,432		116,805		7,221		10,164		2,758		-
Total	$	289,056	$	274,429	$	7,221	$	10,164	$	2,758	$	-

Collaboration revenue:
Supply agreements - Manufacturing	$	2,337	$	-	$	-	$	2,337	$	-	$	-
Up-front payment associated with the Company's obligation to participate in joint committees	$	2,376	$	1,346	$	147	$	147	$	-	$	736
Total	$	4,713	$	1,346	$	147	$	2,484	$	-	$	736

Co-promotion revenue	$	32,813	$	29,453	$	3,360	$	-	$	-	$	-

(1) Includes billed and unbilled accounts receivable.

Upon execution of the North America Takeda Agreement, the Company was required to complete several deliverables, which Takeda was responsible to fund. The following are the required deliverables of the Company, along with the related contractual cash flows from Takeda and the associated obligations and performance period of the Company relating to research and development revenue:

	·	Upon receipt of the $20.0 million upfront payment, the Company deferred approximately $2.4 million to be recognized using the time-based model over the performance period of the participation in various joint committee meetings. The Company expects its participation on all committees to continue throughout the term of the North America Takeda Agreement. During each of the years ended December 31, 2015, 2014 and 2013, the Company recognized approximately $147,000 of this deferred amount as collaboration revenue on the Consolidated Statements of Operations and Comprehensive Income.
	·	The Company granted Takeda an exclusive license of lubiprostone to co-develop, commercialize, and sell products for gastroenterology indications in the U.S. and Canada. The Company has recorded product royalty revenue of approximately $74.0 million, $62.8 million; and $52.1 million for the years ended December 31, 2015, 2014 and 2013, respectively. This revenue is recorded as product royalty revenue in the Consolidated Statements of Operations and Comprehensive Income.

	·	The Company has provided development work necessary for an NDA submission to the FDA for the treatment of CIC and IBS-C indications. Takeda funded the initial $30.0 million of development costs, the Company was obligated to fund the first $20.0 million in excess of the initial $30.0 million funded by Takeda and the two parties are to equally share any required development costs in excess of $50.0 million. Although there was no defined performance period for this development work, the period to perform the work would not exceed the term of the North America Takeda Agreement. In January 2006, the Company received approval for its NDA for AMITIZA to treat CIC and completed and submitted the supplemental NDA for IBS-C to the FDA in June 2007.
	·	In conjunction with the R-Tech acquisition in October 2015, the Company now recognizes product sales through the North America Takeda Agreement. The Company has recorded product sales revenue of approximately $10.3 million for the year ended December 31, 2015.

The Company initially deferred the residual amount of the $20.0 million upfront payment totaling approximately $17.6 million, development milestone payments received totaling $50.0 million, and reimbursement of the initial $30.0 million of research and development costs for the development of AMITIZA for CIC and IBS-C indications. These deferred amounts were applied towards the unit of accounting that combines the participation in the joint development committee and the development of CIC and IBS-C and was recognized over the performance period of developing the CIC and IBS-C NDA submissions. The Company completed the development of the CIC and IBS-C in June 2007 and filed a sNDA for IBS-C. This was the culmination of the performance period. In June 2007, the Company also recognized as revenue, in full, $30.0 million from Takeda upon the filing of the sNDA for AMITIZA to treat IBS-C. The Company received a $50.0 million development milestone from Takeda as a result of the FDA’s approval on April 29, 2008 of the sNDA for IBS-C in women aged 18 years and older and recognized the payment as research and development revenue during the year ended December 31, 2008.

During 2006, the joint commercialization committee granted approval for the Company and Takeda to begin three new studies. The following are the three additional deliverables of the Company, along with the related contractual cash flows from Takeda and the associated obligations and performance period of the Company, when the three studies were agreed upon:

The Company is obligated to perform studies in connection with changes to labeling for CIC. Takeda is obligated to fund 70% of the labeling studies and the Company is obligated to fund the remaining 30%. There is no defined performance period, but the performance period will not exceed the term of the North America Takeda Agreement.

The Company is obligated to perform studies for the development of an additional indication for OIC. Takeda is obligated to fund all development work up to a maximum aggregate of $50.0 million for each additional indication and $20.0 million for each new formulation. If development costs exceed these amounts, Takeda and the Company shall equally share such excess costs. There is no defined performance period, but the performance period will not exceed the term of the North America Takeda Agreement. The Company decided to conduct one additional phase 3 efficacy studies in order to submit a sNDA for the OBD indication. In February 2012, the Company announced that lubiprostone met the primary endpoint in a phase 3 clinical trial for the treatment of OBD in patients with chronic, non-cancer pain, excluding those taking methadone.

The Company is obligated to perform all development work necessary for phase 4 studies, for which Takeda is obligated to fund all development work. There is no defined performance period, but the performance period will not exceed the term of the North America Takeda Agreement.

The Company has assessed these required deliverables to determine which deliverables are considered separate units of accounting. As a result of the Company and Takeda agreeing to perform and fund these studies simultaneously, the Company determined that there is no objective and reliable evidence to determine the fair value for each of the studies. Accordingly, the Company has combined these three required deliverables as a single unit of accounting. All cash payments from Takeda related to these three deliverables are deferred upon receipt and recognized over the estimated performance period to complete the three studies using the time-based model.

In 2011, the Joint Commercialization Committee (JCC) granted approval to begin studies for a liquid formulation. In addition, in 2012, the JCC granted approval for studies for a pediatric dosage. These additional deliverables are considered separate units of accounting and the Company recognizes revenue from Takeda reimbursements for these deliverables when earned.

Co-promotion costs after May 31, 2011 were reimbursed under the Takeda Agreement. The Company has recognized approximately zero, $3.4 million and $61,000 of revenues for the years ended December 31, 2015, 2014 and 2013, respectively, which is recorded as co-promotion revenue in the Consolidated Statements of Operations and Comprehensive Income.

The Company has assessed these required deliverables to determine which deliverables are considered separate units of accounting. The Company determined that its sales force and miscellaneous marketing activities are treated as separate units of accounting. The Company is recognizing the cost reimbursements received for these deliverables as co-promotion revenues when services are performed and the reimbursement payments are due under the Supplemental Takeda Agreement.

Global Takeda Agreement

In October 2014, the Company and Takeda entered into the Global Takeda Agreement to develop and commercialize AMITIZA. The territories excluded from the Global Takeda Agreement are Canada, the U.S., Japan and the People’s Republic of China. Canada and the U.S. are covered by the North America Takeda Agreement, and Japan is covered by the Japan Mylan Agreement. Switzerland and the U.K. have already received regulatory approval for AMITIZA to be marketed and sold. All other territories covered under the Global Takeda Agreement will need to have regulatory approval before AMITIZA can be sold.

Under the terms of the Global Takeda Agreement, the Company supplies Takeda with AMITIZA at a negotiated supply price. The Company also received a nonrefundable upfront payment of $14.0 million from Takeda for exclusive rights to develop and commercialize AMITIZA in the global markets covered by the Global Takeda Agreement. In addition, the Company is also eligible for up to $35.0 million in additional commercial milestone payments contingent on the achievement of certain net sales revenue targets. Takeda is responsible for all development activities and costs, except that the Company will assume responsibility for the first $6.0 million of those development expenses incurred by Takeda.

The Global Takeda Agreement is considered a multiple-element arrangement for accounting purposes. The Company identified the rights to use the Company’s license to develop and commercialize AMITIZA and the sale of AMITIZA product at a negotiated price as the deliverables. During the fourth quarter of 2014, the Company received a $14.0 million milestone payment and allocated $8.0 million to the right to use the license and $6.0 million to a collaboration obligation to reimburse Takeda for the first $6.0 million in developmental expenses incurred. There were no product sales to Takeda under the Global Takeda Agreement during 2014 and 2015.

Japan Mylan Agreement

In February 2015, Abbott and Mylan closed Mylan’s purchase of Abbott’s non-U.S. developed markets specialty and branded generics business, which included the Company’s February 2009 Japan Mylan Agreement to develop and commercialize lubiprostone for the treatment of CIC in Japan. The Company did not experience any significant changes in the commercialization of AMITIZA in Japan as a result of the transfer of the Japan Mylan Agreement from Abbott to Mylan.

The Japan Mylan Agreement grants Mylan the right of exclusive negotiation to any additional indications for which lubiprostone is developed in Japan under all relevant patents, know-how and trademarks. Under the terms of the Japan Mylan Agreement, payments to the Company include sales of product at a negotiated sales price, a non-refundable upfront payment and non-refundable development and commercial milestone payments based on achieving specified development, regulatory and sales goals.

The collaboration efforts under the agreement are governed by two committees consisting of an equal number of representatives from both parties. The joint commercialization and steering committee oversees commercialization-related activities and resolves any conflicts arising from a joint development committee, which oversees the development-related activities in Japan.

The Company is required to fund and complete all the development work including additional clinical studies required to obtain regulatory approval for the treatment of CIC in Japan. The Company completed all development activities in the fourth quarter of 2012. The Company owns all the rights covered under the regulatory filings.

Mylan is required to fund and undertake all commercialization efforts including pre-launch and post-launch marketing, promotion and distribution. Mylan is required to maintain the number of sales staff and the estimated level of annual net sales based on the commercialization plan to be developed and approved by the joint commercialization and steering committee described above.

The Company has recorded product sales revenue under the Japan Mylan Agreement of approximately $53.9 million and $32.1 million for the years ended December 31, 2015 and 2014, which includes a $5.0 million and a $2.5 million net sales milestone, respectively. As of December 31, 2015, the Company has received a total of $37.5 million in up-front and development milestone payments under the Japan Mylan Agreement. Under the Japan Mylan Agreement, the Company could receive additional milestone payments based on achieving other specified development and commercialization goals although there can be no assurance that the Company will receive any such payments.

The following table summarizes the cash streams and related revenue recognized or deferred under the Japan Mylan Agreement for the year ended December 31, 2015:

	Cash Received Through December 31,		Revenue Recognized for the Year Ended December 31,						Accounts Receivable for the Year Ended December 31,		Foreign Currency			Amount Deferred at December 31,
(In thousands)	2015		Through 2013		2014		2015		2015		Effects			2015
Collaboration revenue:
Up-front payment associated with the Company's obligation to participate in joint committees	$	846	$	241	$	39	$	34	$	-	$	116		$	416

Research and development revenue
Up-front payment - remainder	$	9,154	$	9,302	$	-	$	-	$	-	$	(148	)	$	-
Development milestone payment		27,500		27,755		-		5,000		5,000		(255	)		-
Total	$	36,654	$	37,057	$	-	$	5,000	$	5,000	$	(403	)	$	-

Product sales revenue	$	96,937	$	20,830	$	32,088	$	48,908	$	4,958	$	69		$	-

China Gloria Agreement

In May 2015, the Company entered into an exclusive license, development, commercialization and supply agreement (China Gloria Agreement), for AMITIZA in the People’s Republic of China. The China Gloria Agreement is effective until the thirteenth anniversary of the effective date and will automatically renew for successive three year periods unless terminated upon one year’s prior written notice by one of the parties. Under the terms of the China Gloria Agreement:

The Company received an upfront payment of $1.0 million from Gloria during May 2015 and an upfront payment of $500,000 in June 2015 after the CFDA accepted the IND application for a pivotal trial of AMITIZA in patients with CIC.

The Company is eligible to receive an additional payment in the amount of $1.5 million upon the occurrence of a specified regulatory or commercial milestone event.

Gloria is responsible for all development activities and costs, as well as commercialization and regulatory activities, for AMITIZA in the People’s Republic of China.

The Company will be the exclusive supplier of AMITIZA to Gloria at an agreed upon supply price.

RESCULA Agreement

Japan Santen Agreement

In March 2012, R-Tech entered into an exclusive transaction agreement (Japan Santen Agreement) with Santen Pharmaceutical Co. Ltd (Santen) to commercialize RESCULA in Japan. The initial term of the Japan Santen Agreement ends on March 31, 2016; thereafter, the agreement automatically extends for successive one-year renewal terms unless either party gives the other party an 11-month prior notice. Under the terms of the Japan Santen Agreement:

The Company recognizes revenues from the product sales of RESCULA to Santen at a negotiated price.

During 2015, the Company recognized $1.5 million of RESCULA revenue.

Note 20 - Stockholders' Equity

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

20. Stockholders’ Equity

Capital Structure

The Company has two classes of common stock authorized: class A common stock and class B common stock. In 2012, the company’s majority stockholder and only holder of the Company’s class B common stock converted all of its outstanding shares of class B common stock into shares of the Company’s class A common stock. The Company is not authorized to issue additional shares of class B common stock except in limited circumstances. As a result of the conversion, there is now only a single class of outstanding common stock, class A common stock, which is entitled to one vote per share.

Cantor Sales Agreement

In January 2013, the Company entered into a sales agreement with Cantor Fitzgerald & Co. (Cantor Sales Agreement), which enables the Company to offer and sell up to an aggregate of $20.0 million of shares of its class A common stock through Cantor Fitzgerald & Co. as the Company’s sales agent. Sales of the Company’s class A common stock under the Cantor Sales Agreement are sales deemed to be “at-the-market” equity offerings as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (Securities Act). Cantor Fitzgerald & Co. is entitled to receive a commission of 3.0% of gross sales in connection with the sale of the Company’s class A common stock. During the year ended December 31, 2014, the Company sold an aggregate of 538,521 shares of its class A common stock, and received gross proceeds of approximately $5.5 million, before deducting issuance expenses, pursuant to the Cantor sales Agreement. The Company terminated the Cantor Sales Agreement in November 2015.

Treasury Stock

In 2008, the Company announced a stock repurchase program under which the Company is authorized to purchase up to $10.0 million of its class A common stock from time to time in open-market transactions. In 2011, the Board authorized the repurchase of up to an aggregate of $2.0 million of the Company’s class A common stock out of the $10.0 million authorized by the Board in 2008. In 2012, the Board authorized the increase of such amount of repurchase to up to an aggregate of $5.0 million. In 2013, the Company repurchased 67,762 shares of its class A common stock under this program at a cost of $336,000. All shares of class A common stock purchased in 2013 were purchased in January, February and March of 2013.

On October 20, 2015, as part of the R-Tech acquisition, the Company acquired 2,485,150 shares of the Company’s class A common stock. As part of the R-Tech purchase price allocation, $44.0 million was allocated to these shares based on the October 20, 2015 closing price of $17.68 per share.

Employee Stock-Based Compensation

The Company accounts for stock-based compensation using the fair value method. The fair value of awards granted is estimated at the date of grant and recognized as expense on a straight-line basis over the requisite service period with the offsetting credit to additional paid-in capital. For awards with performance conditions, the Company recognizes the compensation expense if and when the Company concludes that it is probable that the performance condition will be achieved. The Company reassesses the probability of achieving the performance condition at each reporting date. The assumptions used to estimate the fair value of stock options granted for the years ended December 31, 2015, 2014 and 2013 were as follows:

	Year Ended December 31,
	2015				2014				2013
Expected volatility		54%	-	70%		70%	-	72%		65%	-	75%
Risk-free interest rate		1.34%	-	1.93%		1.63%	-	2.01%		1.23%	-	1.40%
Expected term (in years)		5.28	-	6.25		5.28	-	6.25		5.50	-	6.25
Expected dividend yield			0%				0%				0%

Employee stock-based compensation expense for the years ended December 31, 2015, 2014 and 2013 has been reduced for estimated forfeitures as such expense is based upon awards expected to ultimately vest. Estimated forfeiture rates used during the years ended December 31, 2015, 2014 and 2013 ranged from 10.0% to 30.94%.

Employee stock-based compensation expense recorded in the Company’s Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2015, 2014 and 2013 was as follows:

	Year Ended December 31,
(In thousands)	2015		2014		2013
Research and development expense	$	2,165	$	349	$	293
General and administrative expense		5,053		1,816		1,260
Selling and marketing expense		131		122		191
Total		7,349		2,287		1,744

Stock Option Plans

Amended and Restated 2001 Stock Incentive Plan

In 2001, the Company adopted the 2001 Stock Incentive Plan (2001 Plan) to provide common stock incentives to certain eligible employees, officers, directors, consultants and advisors of the Company. In 2003, the Board amended the 2001 Plan (Amended 2001 Plan) to allow for a maximum of 8,500,000 shares of class A common stock to be issued under all awards.

In August 2005, the Board granted 510,000 stock options to non-employees under the Amended 2001 Plan. These non-employee stock options vested immediately and had a weighted average exercise price per share of $5.85. In 2006, the Board determined no further options would be granted under the Amended 2001 Plan. Non-employee options outstanding and exercisable under the Amended 2001 Plan at December 31, 2015 and 2014 were zero and 255,000, respectively, with a remaining contractual life of zero and .25 years, respectively. During 2015 and 2014, 127,500 and 155,000 options were exercised, respectively, with an aggregate intrinsic value of $1.0 million and $0.3 million, respectively. The Company received $0.7 million and $0.9 million upon the exercise of these options in 2015 and 2014, respectively.

A summary of non-employee stock option activity for the year ended December 31, 2015 under the Amended 2001 Plan is presented below:

	Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Options outstanding, December 31, 2014		255,000		$	5.85
Options exercised		(127,500	)		5.85
Options expired		(127,500	)		5.85
Options outstanding, December 31, 2015		-					$	-
Options exercisable, December 31, 2015		-					$	-
Options vested and expected to vest, December 31, 2015		-					$	-

Employee options outstanding and exercisable under the Amended 2001 Plan at December 31, 2015 and 2014 totaled 37,400 and 113,900 respectively, with a remaining contractual life of .34 years and .93 years, respectively. During 2015 and 2014, 76,500 and 6,800 options were exercised, respectively, with an aggregate intrinsic value of $0.6 million and

$28,000, respectively. The Company received $0.8 million and $68,000 upon the exercise of these options in 2015 and 2014, respectively.

A summary of the employee stock option activity for the year ended December 31, 2015 under the Amended 2001 Plan is presented below:

	Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Options outstanding, December 31, 2014		113,900		$	10.00
Options exercised		(76,500	)		10.00
Options outstanding, December 31, 2015		37,400			10.00		0.34	$	272,646
Options exercisable, December 31, 2015		37,400			10.00		0.34	$	272,646
Options vested and expected to vest, December 31, 2015		37,400			10.00		0.34	$	272,646

2006 Stock Incentive Plan

In 2006, the Board approved the 2006 Stock Incentive Plan, which has been amended and restated (as amended and restated, 2006 Plan), and reserved 8,500,000 shares of class A common stock for issuance under the 2006 Plan. Option awards under the 2006 Plan are granted with an exercise price equal to the closing market price of the Company’s stock on the date of grant. The options generally vest over four years and have a ten-year contractual term. At December 31, 2015, there were 2,083,077 shares available for future grants under this plan.

The 2006 Plan includes an “evergreen” provision by which the number of shares of the Company’s class A common stock available for issuance increases automatically on the first day of each calendar year by 5.0% of the aggregate number of shares of the Company’s class A and B common stock outstanding on such date, or such lesser number as the Board may determine. The 2006 Plan also provides that the number of shares of class A common stock included in each annual increase will be 500,000, or such lesser number as the Board may determine. The Board determined that the amount of the increase in the shares available for issuance under the 2006 Plan as of January 1, 2015 and 2014 pursuant to the “evergreen” provision was zero.

A summary of the employee stock option activity for the year ended December 31, 2015 under the 2006 Plan is presented below:

	Shares			Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Options outstanding, December 31, 2014		4,021,491		$	6.93
Options granted		1,321,634			15.18
Options exercised		(693,077	)		5.93
Options forfeited		(205,516	)		10.45
Options expired		(3,924	)		4.09
Options outstanding, December 31, 2015		4,440,608			9.37		8.23	$	35,461,431
Options exercisable, December 31, 2015		1,763,116			7.07		6.89	$	18,019,310
Options vested and expected to vest, December 31, 2015		3,581,991			8.99		8.02	$	29,896,200

During 2015 the 200,000 market-based stock options held by the Company’s Chief Executive Officer attained the award’s performance goal and began vesting ratably through 2018. This event had an insignificant impact on the stock-based compensation expense in 2015.

Additionally in 2015 450,000 time-based stock options with accelerated vesting conditions held by certain eligible employees fully vested upon achieving the award’s goals. Stock-based compensation expense for the year ended December 31, 2015 increased approximately $1.0 million as a result of this event.

ime-based

stock options granted in 2015 totaled 1,321,634. These options vest in equal annual installments over four years from date of grant, and expire ten years from date of grant.

The weighted average grant date fair value of options granted during the years ended December 31, 2015, 2014 and 2013 were $15.18, $7.68 and $7.36, respectively. As of December 31, 2015, approximately $9.8 million of total unrecognized compensation costs, net of estimated forfeitures, related to non-vested awards are expected to be recognized over a weighted average period of 2.8 years. When an option is exercised, the Company issues a new share of class A common stock. During 2015 and 2014, 693,077 options and 618,377 options were exercised, respectively, with an aggregate intrinsic value of $8.6 million and $3.0 million, respectively. The Company received $4.1 million and $2.8 million upon the exercise of these options in 2015 and 2014, respectively.

Employee Stock Purchase Plan

In 2006, the Board approved a 2006 Employee Stock Purchase Plan (ESPP) and reserved 4,250,000 shares of class A common stock for issuance under the ESPP. The ESPP is non-compensatory and is intended to qualify as an Employee Stock Purchase Plan as defined in Section 423 of the Internal Revenue Code of 1986, as amended. Under the ESPP, eligible employees may purchase common stock through payroll deductions of up to 10.0% of compensation during the plan period. On January 19, 2015, the Compensation Committee of the Board approved the change in the purchase price to 85.0% of market price at the end of each plan period, which is generally three months. A total of 9,085 shares, 5,853 shares, and 3,625 shares of common stock were purchased by employees under the ESPP during the years ended December 31, 2015, 2014 and 2013, respectively. The Company received approximately $128,000, $35,000, and $24,000 from the purchase of shares under the ESPP for the years ended December 31, 2015, 2014 and 2013, respectively.

Tax Benefits

As of December 31, 2015, the balance of the Company's additional paid-in capital pool related to tax windfall benefits from the stock option exercises was $2.5 million.

The Company applies a with-and-without approach in determining its intra-period allocation of tax expense or benefit attributable to stock based compensation deductions. Since the Company does not have any net operating loss carry-forwards in the U.S., the tax benefit reduces income taxes payable in the current year and is therefore recorded to additional paid-in-capital.

Accumulated Other Comprehensive Income (Loss)

The following table details the accumulated other comprehensive income (loss) activity for the years ended December 31, 2015, 2014, and 2013:

(In thousands)	Foreign currency translation adjustments			Unrealized income (loss) on investments, net of tax effect			Unrealized income (loss) on pension benefit obligation, net of tax effect			Accumulated other comprehensive income (loss)
Balance at December 31, 2012	$	16,126		$	40		$	-		$	16,166
Other comprehensive income before reclassifications		(567	)		2			-			(565	)
Amounts reclassified from accumulated other comprehensive loss		-			-			-			-
Balance at December 31, 2013	$	15,559		$	42		$	-		$	15,601
Other comprehensive income before reclassifications		(351	)		(7	)		(978	)		(1,336	)
Amounts reclassified from accumulated other comprehensive loss		-			-			-			-
Balance at December 31, 2014	$	15,208		$	35		$	(978	)	$	14,265
Other comprehensive income before reclassifications		(965	)		7			105			(853	)
Amounts reclassified from accumulated other comprehensive loss		-			-			-			-
Balance at December 31, 2015	$	14,243		$	42		$	(873	)	$	13,412

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 4
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-SubTopic 10
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-Paragraph 2
-Subparagraph (SAB TOPIC 4.E)
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 210
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-Paragraph 1
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 505
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Preferred Stock
-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21463-112644

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
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-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21564-112644

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section C

+ Details

Note 21 - Income Taxes

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Income Tax Disclosure [Text Block]

21. Income Taxes

Income before income taxes for the years ended December 31, 2015, 2014 and 2013 is as follows:

	Year Ending December 31,
	2015		2014		2013
U.S.	$	14,685	$	18,005	$	9,175
Foreign		28,990		9,128		1,768
	$	43,675	$	27,133	$	10,943

The provision for income taxes consists of the following for the years ended December 31, 2015, 2014 and 2013:

	Year Ended December 31,
(In thousands)	2015			2014			2013
Current tax provision (benefit):
U.S. Federal	$	15,678		$	11,319		$	5,198
U.S. State		1,810			1,351			1,008
Foreign		2,709			793			(582	)
Total current tax provision		20,197			13,463			5,624

Deferred provision (benefit):
U.S. Federal		(6,375	)		(172	)		(1,783	)
U.S. State		(899	)		(16	)		(279	)
Foreign		(2,619	)		730			366
Total deferred provision (benefit)		(9,893	)		542			(1,696	)

Total income tax provision	$	10,304		$	14,005		$	3,928

Deferred tax assets (liabilities), net, consist of the following as of December 31, 2015 and 2014:

	December 31,
	2015			2014
(In thousands)
Deferred tax assets:
Foreign net operating loss carry-forwards	$	716		$	1,409
State net operating loss carry-forwards		2			3
Tax credit carry-forwards		976			-
Deferred revenue		446			1,803
Accrued expenses		1,450			734
Tax benefits on stock options		3,288			2,063
Research and development credits		1,759			-
Inventory		-			615
Property and equipment		-			15
Other		3,775			207
Gross deferred tax assets		12,412			6,849

Deferred tax liabilities:
Property and equipment		(654	)		(122	)
Inventory		(3,990	)		-
Investments		(13,963	)		-
Intangibles		(44,025	)		(4,368	)
Gross deferred tax liabilities		(62,632	)		(4,490	)

Less: valuation allowance		(2,277	)		(2,132	)
Net deferred tax assets (liabilities)	$	(52,497	)	$	227

The provision for income taxes vary from the income taxes provided based on the federal statutory rate as follows for the three years ended December 31, 2015, 2014 and 2013:

	Year Ended December 31,
(In thousands)	2015			2014			2013
Federal tax provision (benefit)		35.0	%		35.0	%		35.0	%
State taxes, net of federal tax benefit		0.9	%		2.1	%		4.9	%
Foreign tax rate differential		-16.8	%		0.0	%		0.0	%
Changes in valuation allowance		0.5	%		1.4	%		-21.6	%
Nondeductible expenses		2.3	%		1.7	%		1.3	%
Stock based compensation		0.6	%		-0.1	%		-2.8	%
Impact of intangible transfer		0.7	%		5.8	%		7.3	%
Impact of uncertain tax positions		1.8	%		-0.2	%		-0.1	%
Adjustment to deferred tax asset		-1.6	%		0.5	%		11.1	%
Impact of foreign operations		0.0	%		-3.7	%		0.3	%
Subpart F income, net of FTC		2.3	%		9.1	%		0.0	%
Change in tax rates		0.0	%		0.0	%		0.6	%
Loan forgiveness		-2.3	%		0.0	%		0.0	%
Japanese R&D credit		-1.6	%		0.0	%		0.0	%
Changes in other tax matters		1.8	%		0.0	%		-0.1	%
		23.6	%		51.6	%		35.9	%

The significant increase in the net deferred tax liability shown above was a result of the R-Tech acquisition in October 2015. Specifically, purchase accounting adjustments to the financial reporting basis of R-Tech assets and liabilities resulted in significant deferred tax liabilities that were recorded during purchase accounting.

At December 31, 2015 and 2014, the Company had foreign net operating loss carry-forwards of $2.8 million and $5.9 million, respectively. Approximately $1.0 million of the foreign NOLs begin to expire in December 2019, and $1.8 million of the foreign NOLs do not expire. As of December 31, 2015 and 2014, the Company had no material NOLs in the U.S.

As of December 31, 2015 and 2014, the Company had a valuation allowance on its deferred tax assets of $2.3 million and $2.1 million, respectively. The change in the valuation allowance was due to two factors. First, the release of valuation allowance in two foreign jurisdictions and the reversal of existing US GAAP to local GAAP deferred tax assets during the year resulted in a net decrease. In addition, the Company established a valuation allowance for certain tax credit carryforwards that are expected to expire unutilized.

The valuation allowance at December 31, 2015 and 2014 relates to deferred tax assets in the foreign jurisdictions and certain tax credit carryforwards in the US. The Company will continue to evaluate its valuation allowance position in each jurisdiction on a regular basis. To the extent the Company determines that all or a portion of its valuation allowance is no longer necessary, the Company will recognize an income tax benefit in the period such determination is made for the reversal of the valuation allowance. Once the valuation allowance is eliminated in whole or in part, it will not be available to offset the Company’s future tax provision.

The Company has recorded a total income tax liability for uncertain tax positions (including interest) of approximately $3.1 million and $0.8 million, as of December 31, 2015 and 2014, respectively. The Company presently does not expect to settle any of this amount within the next twelve months in cash and as such, has reflected the entire balance as other liabilities in the accompanying Consolidated Balance Sheets. The amount represents the aggregate tax effect of differences between tax return positions and the amounts otherwise recognized in the Company’s Consolidated Financial Statements. The liability for uncertain tax positions as of December 31, 2015 and 2014 mainly pertains to the Company’s interpretation of nexus in certain states related to revenue sourcing for state income tax purposes, as well as uncertain tax positions related to related party interest in foreign jurisdictions.

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2015, 2014 and 2013 is as follows:

	Year Ended December 31,
	2015			2014			2013
Balance at January 1	$	712		$	550		$	979
Increases for tax positions taken during prior periods		452			(91	)		4
Decreases in unrecognized tax benefits related to taxing authority correspondence		(280	)		-			(467	)
Increases for tax positions taken during current period		2,108			253			34
Balance at December 31	$	2,992		$	712		$	550

The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision. During 2015, 2014 and 2013, the Company recorded an immaterial amount of interest related to uncertain tax positions. Of the unrecognized tax benefits noted above, approximately $1.7 million would impact the effective tax rate if a future change were to occur. It is reasonably possible that the $1.3 million of the liability for unrecognized tax benefits will decrease within the next 12 months.

Currently tax years 2011 to 2015 remain open and subject to examination in the major tax jurisdictions in which tax returns are filed. The tax years 2009-2011 were examined by the U.S. tax authorities and resulted in no tax adjustments.

Note 22 - Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Quarterly Financial Information [Text Block]

22. Quarterly Financial Data (unaudited)

	2015 Quarters Ended
(In thousands, except per share data)	December 31		September 30		June 30		March 31
Total revenues	$	55,368	$	33,448	$	34,884	$	29,480
Income from operations		11,568		11,657		11,580		9,654
Net income		10,151		7,236		9,576		6,408
Net income per share:
Basic	$	0.24	$	0.16	$	0.21	$	0.14
Diluted		0.23		0.16		0.21		0.14

	2014 Quarters Ended
(In thousands, except per share data)	December 31		September 30		June 30		March 31
Total revenues	$	37,757	$	31,463	$	24,069	$	22,161
Income from operations		17,048		3,643		3,811		2,729
Net income		9,283		1,480		1,610		755
Net income per share:
Basic	$	0.21	$	0.03	$	0.04	$	0.02
Diluted		0.21		0.03		0.04		0.02

Net income per share is computed independently for each of the quarters presented. Therefore, the sum of the quarterly net income per share information may not equal annual net income per share.

Note 23 - Subsequent Events	12 Months Ended
Note 23 - Subsequent Events	Dec. 31, 2015
Notes to Financial Statements
Subsequent Events [Text Block]	23. Subsequent Events On January 11, 2016, the Company entered into an option and collaboration agreement with Cancer Prevention Pharmaceuticals, Inc. (CPP). Under the terms of the agreement, CPP granted the Company the sole option to acquire an exclusive license to commercialize CPP-1X/sulindac combination product in North America. This product is currently in a Phase 3 clinical trial for the treatment of familial adenomatous polyposis (FAP). Enrollment in the study is expected to be complete in the first half of 2016 and the trial is expected to conclude in 2018. Under the terms of the agreement, the Company has invested $5.0 million in CPP in the form of a convertible note, with a planned additional $5.0 million equity investment in CPP’s next qualified financing, which will be either an IPO or a private financing, as defined by the agreement. In addition, the Company will pay CPP an option fee of up to $7.5 million, payable in two tranches; the first tranche of $3.0 million was paid at signing. CPP will complete the ongoing Phase 3 trial under the oversight of a joint steering committee. Upon exercise of its exclusive option, the Company would acquire an exclusive license to develop and commercialize the product in North America for all indications and would be obligated to pay CPP up to an aggregate of $190 million in license fees and milestone payments upon the achievement of specified clinical development and sales milestones. Under the terms of the license, the Company and CPP would share equally in profits from the sale of licensed products.

Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2015

Notes to Financial Statements

Schedule of Valuation and Qualifying Accounts Disclosure [Text Block]

Schedule II – Valuation and Qualifying Accounts

(In thousands)	Balance at Beginning of Year		Additions Charged to Costs and Expenses			Deductions			Balance at End of Year
Allowance for doubtful accounts:
2013	$	280	$	160	(a)	$	-		$	440
2014	$	440	$	364	(a)	$	(779	)(b)	$	25
2015	$	25	$	29		$	-		$	54
Valuation allowance for deferred tax assets:
2013	$	4,142	$	-		$	(2,391	)(c)	$	1,751
2014	$	1,751	$	381	(d)	$	-		$	2,132
2015	$	2,132	$	1,177	(e)	$	(1,032	)(c)	$	2,277

(a)

In 2013 and 2014, the increase in allowance for doubtful accounts is associated with certain disputed Takeda invoices.

(b)

In 2014 the deduction from allowance for doubtful accounts resulted from a charge-off of certain disputed Takeda invoices.

(c)

In 2013 and 2015, the net decrease in valuation allowance for deferred tax assets of $2.4 million and $1.0 million, respectively, was due primarily to the release of the valuation allowance in certain jurisdictions that management believes the deferred tax assets are more likely than not to be utilized, as well as the reversal of all deferred tax assets of Ambrent in 2013 for anticipated liquidation.

(d)

The net increase of $381,000 was primarily due to the additional NOL’s in foreign jurisdictions where management believes it is more likely than not a portion of the NOL balance will expire prior to utilization.

(e)

In 2015, the net increase in the valuation allowance of $1.2 million was a result of the accrual of tax credit carryforwards that are expected to expire prior to utilization.

Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2015

Accounting Policies [Abstract]

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America, (GAAP) and the rules and regulations of the Securities and Exchange Commission, (SEC). The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries: Sucampo AG, based in Zug, Switzerland, through which the Company conducts certain worldwide and European operations; Sucampo Pharma, LLC, based in Tokyo and Osaka, Japan and R-Tech Ueno, Ltd. (acquired October 20, 2015), based in Kobe, Japan through which the Company conducts its Asian operations; Sucampo Pharma Americas LLC, based in Rockville, Maryland, through which the Company conducts operations in North and South America and Sucampo Pharma Europe, Ltd., based in Oxford, U.K.. All inter-company balances and transactions have been eliminated.

The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Consolidation, Policy [Policy Text Block]

Principles of Consolidation

The consolidated financial statements include the accounts of Sucampo Pharmaceuticals, Inc. and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

Investment, Policy [Policy Text Block]

Current and Non-Current Investments

Receivables, Trade and Other Accounts Receivable, Allowance for Doubtful Accounts, Policy [Policy Text Block]

Accounts Receivable

Inventory, Policy [Policy Text Block]

Inventories

Cash and Cash Equivalents, Restricted Cash and Cash Equivalents, Policy [Policy Text Block]

Restricted Cash

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Certain Risks, Concentrations and Uncertainties

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Value of Financial Instruments

Revenue Recognition, Policy [Policy Text Block]

Revenue Recognition

The Company’s revenues are derived primarily from product royalties, product sales, development milestone payments, clinical development activities, and contract and collaboration activities.

Multiple-Element Arrangements

The Company evaluated the multiple deliverables within the AMITIZA agreements in accordance with the guidance of multiple deliverables under ASC 605-25 “

Revenue Recognition — Multiple-Element Arrangements”

Research and Development Revenue

Product Royalty Revenue

Product Sales Revenue

Co-promotion Revenue

Contract and Collaboration Revenue

Contract and Collaboration revenue relates to development and consulting activities and includes $8.0 million of the upfront payment received from Takeda in 2014 under the Global Takeda Agreement.

Deferred Revenue

Total deferred revenue consists of the following as of:

	December 31,
(In thousands)	2015		2014
Deferred revenue, current	$	676	$	2,051
Deferred revenue, non-current		1,088		5,118
	$	1,764	$	7,169

Deferred revenue to related parties, included in total deferred revenue:
Deferred revenue to related parties, current	$	-	$	453
Deferred revenue to related parties, non-current		-		4,141
Total	$	-	$	4,594

During the fourth quarter of 2015, as part of the R-Tech acquisition, the Company recognized $3.9 million of deferred revenue as part of settlement of a pre-existing relationship with R-Tech.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation

The Company estimates the fair value of share-based payment awards on the date of the grant using an option-pricing model and recognizes the expense over the required service periods.

For recording of the stock-based compensation expense for service based and market condition options, the Company has chosen to use:

the straight-line method of allocating compensation cost for service based options and graded vesting for market condition options;

the Black-Scholes-Merton option pricing formula for time based options and the Monte Carlo simulation model for the market condition options as the Company’s chosen option-pricing models;

the simplified method to calculate the expected term for options as discussed under the SEC’s guidance for share-based payments for service based options;

an estimate of expected volatility based on the historical volatility of the Company’s share price; and

an estimate for expected forfeitures.

Pension and Other Postretirement Plans, Policy [Policy Text Block]

Pension

Business Combinations Policy [Policy Text Block]

Mergers and Acquisitions

Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]

Goodwill

Research and Development Expense, Policy [Policy Text Block]

Research and Development Expenses

Accrued Research and Development Expenses [Policy Text Block]

<div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style="display: inline; font-family: times new roman; font-size: 10pt"><div style=" font-size: 10pt; text-align: justify; margin: 0pt 0; background-color: white"><div style="display: inline; font-weight: bold;"><div style="display: inline; font-style: italic;">Accrued Research and Development Expenses</div></div></div><div style=" font-size: 10pt; text-align: justify; text-indent: 18.7pt; margin: 0pt 0">As part of the process of preparing Consolidated Financial Statements, the Company is required to estimate accruals for research and development expenses. This process involves reviewing and identifying services which have been performed by third parties on the Company’s behalf and determining the value of these services. In addition, the Company makes estimates of costs incurred to date but not yet invoiced, in relation to external CROs and clinical site costs. The Company analyzes the progress of clinical trials, including levels of patient enrollment; invoices received and contracted costs, when evaluating the adequacy of the accrued liabilities for research and development. The Company makes significant judgments and estimates in determining the accrued balance in any accounting period. No material adjustments have been required for this accrual during the years ended December 31, 2015 and 2014.</div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div></div>

Income Tax, Policy [Policy Text Block]

Income Taxes

Income Tax Uncertainties, Policy [Policy Text Block]

Uncertain Tax Positions

Currently, tax years 2011 to 2015 remain open and subject to examination in the major tax jurisdictions in which tax returns are filed.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency

Realized and unrealized foreign currency gains or losses on assets and liabilities denominated in a currency other than the functional currency are included in net income.

Comprehensive Income, Policy [Policy Text Block]

Other Comprehensive Income

New Accounting Pronouncements, Policy [Policy Text Block]