Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Billions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 18, 2015 | Jun. 30, 2014 |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | MDVN | ||
Entity Registrant Name | MEDIVATION, INC. | ||
Entity Central Index Key | 1011835 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 78,233,026 | ||
Entity Public Float | $5 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $502,677 | $228,788 |
Receivable from collaboration partner | 184,737 | 107,210 |
Deferred income tax assets | 21,987 | 5,541 |
Prepaid expenses and other current assets | 12,264 | 12,440 |
Restricted cash | 203 | |
Total current assets | 721,868 | 353,979 |
Property and equipment, net | 41,161 | 17,035 |
Intangible assets | 101,000 | |
Deferred income tax assets, noncurrent | 15,176 | |
Restricted cash, net of current | 11,562 | 9,899 |
Goodwill | 10,000 | |
Other non-current assets | 10,852 | 11,737 |
Total assets | 911,619 | 392,650 |
Current liabilities: | ||
Accounts payable, accrued expenses and other current liabilities | 106,132 | 78,758 |
Contingent consideration | 10,000 | |
Deferred revenue | 2,822 | 16,931 |
Current portion of build-to-suit lease obligation | 698 | |
Total current liabilities | 119,652 | 95,689 |
Convertible Notes, net of unamortized discount of $36,598 and $50,336 at December 31, 2014 and 2013, respectively | 222,140 | 208,414 |
Contingent consideration | 96,000 | |
Build-to-suit lease obligation, excluding current portion | 18,711 | |
Other non-current liabilities | 5,817 | 11,600 |
Total liabilities | 462,320 | 315,703 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value per share; 1,000,000 shares authorized; no shares issued and outstanding | ||
Common stock, $0.01 par value per share; 170,000,000 shares authorized; 78,117,227 and 75,803,020 shares issued and outstanding at December 31, 2014 and 2013, respectively | 781 | 758 |
Additional paid-in capital | 506,227 | 410,350 |
Accumulated deficit | -57,709 | -334,161 |
Total stockholders' equity | 449,299 | 76,947 |
Total liabilities and stockholders' equity | $911,619 | $392,650 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Convertible Notes, discount | $36,598 | $50,336 |
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 170,000,000 | 170,000,000 |
Common stock, shares issued | 78,117,227 | 75,803,020 |
Common stock, shares outstanding | 78,117,227 | 75,803,020 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||
Collaboration revenue | $710,487 | $272,942 | $181,696 |
Operating expenses: | |||
Research and development expenses | 189,570 | 118,952 | 95,628 |
Selling, general and administrative expenses | 239,071 | 176,231 | 112,282 |
Total operating expenses | 428,641 | 295,183 | 207,910 |
Income (loss) from operations | 281,846 | -22,241 | -26,214 |
Other income (expense), net: | |||
Interest expense | -21,690 | -20,249 | -14,985 |
Interest income | 46 | 193 | 229 |
Other income (expense), net | -8 | -201 | -280 |
Total other income (expense), net | -21,652 | -20,257 | -15,036 |
Income (loss) before income tax benefit (expense) | 260,194 | -42,498 | -41,250 |
Income tax benefit (expense) | 16,258 | -115 | -7 |
Net income (loss) | $276,452 | ($42,613) | ($41,257) |
Basic net income (loss) per common share | $3.59 | ($0.57) | ($0.56) |
Diluted net income (loss) per common share | $3.42 | ($0.57) | ($0.56) |
Weighted-average common shares used in the calculation of basic net income (loss) per common share | 76,929 | 75,165 | 73,480 |
Weighted-average common shares used in the calculation of diluted net income (loss) per common share | 85,000 | 75,165 | 73,480 |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (Loss) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $276,452 | ($42,613) | ($41,257) |
Other comprehensive income (loss): | |||
Change in unrealized gain on available-for-sale securities, net | -33 | 20 | |
Other comprehensive income (loss), net | -33 | 20 | |
Comprehensive income (loss) | $276,452 | ($42,646) | ($41,237) |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net income (loss) | $276,452 | ($42,613) | ($41,257) |
Adjustments for non-cash operating items: | |||
Release of valuation allowance for deferred income taxes | -33,403 | ||
Excess tax benefits from stock-based compensation | -16,965 | ||
Changes in deferred income taxes | -3,827 | ||
Amortization of deferred revenue | -14,109 | -25,396 | -100,944 |
Stock-based compensation | 45,134 | 37,078 | 23,678 |
Amortization of debt discount and debt issuance costs | 14,898 | 13,456 | 9,663 |
Depreciation on property and equipment | 5,239 | 3,449 | 1,614 |
Asset impairment and other charges | 1,124 | 158 | 80 |
Accretion of discount on securities | -168 | -166 | |
Changes in operating assets and liabilities: | |||
Receivable from collaboration partners | -77,527 | -71,752 | -22,913 |
Prepaid expenses and other current assets | 301 | -3,953 | -1,114 |
Other non-current assets | -401 | -7,353 | -581 |
Accounts payable, accrued expenses and other current liabilities | 43,935 | 27,889 | 19,312 |
Other non-current liabilities | -252 | 996 | 8,210 |
Interest payable | 1,698 | ||
Net cash provided by (used) in operating activities | 240,599 | -68,209 | -102,720 |
Cash flows from investing activities: | |||
Purchases of property and equipment | -10,544 | -7,535 | -13,972 |
Payments to CureTech, Ltd. under License Agreement | -5,000 | ||
Change in restricted cash | -1,866 | -713 | -3,197 |
Reduction of build to suit obligation | -135 | ||
Purchases of short-term investments | -144,926 | -424,757 | |
Maturities of short-term investments | 370,000 | 275,000 | |
Net cash (used in) provided by investing activities | -17,545 | 216,826 | -166,926 |
Cash flows from financing activities: | |||
Proceeds from issuance of common stock under equity incentive and stock purchase plans | 33,882 | 8,870 | 22,046 |
Excess tax benefits from stock-based compensation | 16,965 | ||
Repayment of Convertible Notes | -12 | ||
Proceeds from issuance of Convertible Notes, net | 250,987 | ||
Financing transaction costs | -614 | ||
Tax withholdings related to net share settlement of performance share awards | -1,608 | ||
Net cash provided by financing activities | 50,835 | 8,870 | 270,811 |
Net increase in cash and cash equivalents | 273,889 | 157,487 | 1,165 |
Cash and cash equivalents at beginning of year | 228,788 | 71,301 | 70,136 |
Cash and cash equivalents at end of year | 502,677 | 228,788 | 71,301 |
Supplemental disclosures of cash flow information: | |||
Interest | 6,792 | 6,792 | 3,623 |
Income taxes, net of refunds | 1,525 | -127 | 23 |
Non-cash investing and financing activities: | |||
Amounts capitalized under build-to-suit lease transactions | 18,085 | ||
Interest capitalized during construction period for build-to-suit lease transactions | 1,459 | ||
Property and equipment expenditures incurred but not yet paid | 242 | 99 | 254 |
Stock appreciation rights-reclassification from current liabilities to stockholders' equity | $110 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] |
In Thousands, except Share data | |||||
Balances at Dec. 31, 2011 | $1,321 | $714 | $250,885 | $13 | ($250,291) |
Balance, Shares at Dec. 31, 2011 | 71,463,676 | ||||
Common stock issued under equity incentive and employee stock purchase plans, net of shares withheld for employee taxes, Amount | 20,438 | 34 | 20,404 | ||
Common stock issued under equity incentive and employee stock purchase plans, net of shares withheld for employee taxes, Shares | 3,311,263 | ||||
Stock-based compensation expense | 23,678 | 23,678 | |||
Equity component of Convertible Notes, net of issuance costs | 69,335 | 69,335 | |||
Stock appreciation rights-reclassification from current liabilities to stockholders' equity | 110 | 110 | |||
Change in comprehensive income | 20 | 20 | |||
Net income (loss) | -41,257 | -41,257 | |||
Balances at Dec. 31, 2012 | 73,645 | 748 | 364,412 | 33 | -291,548 |
Balance, Shares at Dec. 31, 2012 | 74,774,939 | ||||
Common stock issued under equity incentive and employee stock purchase plans, net of shares withheld for employee taxes, Amount | 8,870 | 10 | 8,860 | ||
Common stock issued under equity incentive and employee stock purchase plans, net of shares withheld for employee taxes, Shares | 1,002,609 | ||||
Common stock issued for warrant exercises, net of shares withheld for exercise price | 0 | 0 | 0 | 0 | 0 |
Common stock issued for warrant exercises, net of shares withheld for exercise price, Shares | 25,472 | ||||
Stock-based compensation expense | 37,078 | 37,078 | |||
Change in comprehensive income | -33 | -33 | |||
Net income (loss) | -42,613 | -42,613 | |||
Balances at Dec. 31, 2013 | 76,947 | 758 | 410,350 | -334,161 | |
Balance, Shares at Dec. 31, 2013 | 75,803,020 | 75,803,020 | |||
Common stock issued under equity incentive and employee stock purchase plans, net of shares withheld for employee taxes, Amount | 33,882 | 23 | 33,859 | ||
Common stock issued under equity incentive and employee stock purchase plans, net of shares withheld for employee taxes, Shares | 2,314,207 | ||||
Stock-based compensation expense | 45,134 | 45,134 | |||
Excess tax benefits from stock-based compensation | 16,965 | 16,965 | |||
Tax shortfalls from stock-based compensation | -77 | -77 | |||
Repayment of Convertible Notes | -4 | -4 | |||
Net income (loss) | 276,452 | 276,452 | |||
Balances at Dec. 31, 2014 | $449,299 | $781 | $506,227 | ($57,709) | |
Balance, Shares at Dec. 31, 2014 | 78,117,227 | 78,117,227 |
Description_of_Business
Description of Business | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Description of Business | NOTE 1. DESCRIPTION OF BUSINESS |
The Company is a biopharmaceutical company focused on the development and commercialization of medically innovative therapies to treat serious diseases for which there are limited treatment options. Through the Company’s collaboration with Astellas Pharma, Inc. or Astellas, it has one commercial product, XTANDI® (enzalutamide) capsules, or XTANDI. XTANDI has received marketing approval in the United States, Europe, and numerous other countries worldwide for the treatment of patients with metastatic castration-resistant prostate cancer (mCRPC) and in Japan for the treatment of patients with castration-resistant prostate cancer (CRPC). Since its launch in the United States in September 2012, and subsequent launch in additional countries, XTANDI’s worldwide net sales (as reported by Astellas) were approximately $1.6 billion through December 31, 2014. The Company and Astellas are also conducting investigational studies of enzalutamide in prostate cancer and in advanced breast cancer. Under the Company’s collaboration agreement with Astellas, it shares with Astellas equally all profits (losses) related to U.S. net sales of XTANDI. The Company also receives royalties ranging from the low teens to the low twenties on ex-U.S. XTANDI net sales and certain milestone payments upon the achievement of defined development and sales events. | |
The Company seeks to become a fully-integrated biopharmaceutical company through the continued commercialization of XTANDI, the acquisition or in-license and development and commercialization of other product opportunities (such as pidilizumab), and through the advancement of its own proprietary research and development programs. The Company expects that its future growth may come from both internal research efforts and third party business development activities. In the fourth quarter of 2014, the Company licensed exclusive worldwide rights to pidilizumab, an immune modulatory, anti-Programmed Death-1 (PD-1) monoclonal antibody for all potential indications from CureTech, Ltd., or CureTech. Under the license agreement, the Company is responsible for all development, regulatory, manufacturing, and commercialization activities for pidilizumab. The Company currently anticipates that it may initiate a Phase 3 clinical trial evaluating pidilizumab in one or more hematologic malignancies as early as in 2015. The Company is also considering evaluating pidilizumab in other indications, including but not limited to in combination with enzalutamide in breast and prostate cancer. In addition, the Company’s internal research and discovery efforts are focused, among other areas, in oncology and neurology. | |
The Company has incurred cumulative net losses of $57.7 million from inception through December 31, 2014, and may incur substantial costs in the foreseeable future as it continues to finance the commercialization of XTANDI in the U.S. market, clinical and preclinical studies of enzalutamide, pidilizumab and its early-stage programs, potential business development activities, and its corporate overhead costs. The Company has funded its operations primarily through public offerings of its common stock, the issuance of 2.625% convertible senior notes due April 1, 2017, or the Convertible Notes, from upfront, milestone, and cost-sharing payments under collaboration agreements, and subsequent to September 13, 2012, from collaboration revenue related to XTANDI net sales. As of December 31, 2014, the Company may earn up to $245.0 million of remaining sales milestones under the Astellas Collaboration Agreement. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||
Dec. 31, 2014 | |||
Accounting Policies [Abstract] | |||
Summary of Significant Accounting Policies | NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||
(a) Basis of Presentation and Principles of Consolidation | |||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Company operates in one business segment. | |||
All tabular disclosures of dollar and share amounts are presented in thousands unless otherwise indicated. All per share amounts are presented at their actual amounts. The number of shares issuable under the Amended and Restated 2004 Equity Incentive Award Plan, or the Medivation Equity Incentive Plan, and the Medivation, Inc. 2013 Employee Stock Purchase Plan, or ESPP, disclosed in Note 10, “Stockholders’ Equity,” are presented at their actual amounts. Amounts presented herein may not calculate or sum precisely due to rounding. | |||
Certain prior period amounts have been reclassified to conform to the current year presentation. There was no effect on net income (loss) or stockholders’ equity related to these reclassifications. | |||
(b) Use of Estimates | |||
The preparation of consolidated financial statements in accordance with U.S. GAAP requires that management make estimates and assumptions in certain circumstances that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Although management believes that these estimates are reasonable, actual future results could differ materially from those estimates. In addition, had different estimates and assumptions been used, the consolidated financial statements could have differed materially from what is presented. | |||
Significant estimates and assumptions used by management principally relate to revenue recognition, including reliance on third party information, estimating the performance periods of the Company’s deliverables under collaboration agreements, and estimating the various deductions from gross sales to calculate net sales of XTANDI. Additionally, significant estimates and assumptions used by management include those related to business combination accounting, the Convertible Notes, determining whether the Company is the primary beneficiary of any variable interest entities, leases, taxes, research and development and other accruals, and share-based compensation. | |||
(c) Capital Structure | |||
On September 20, 2012, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, as amended, effecting an increase in the total number of authorized shares of capital stock of the Company from 51,000,000 to 86,000,000 and an increase in the total number of authorized shares of common stock of the Company from 50,000,000 to 85,000,000. | |||
On September 21, 2012, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, as amended, effecting (i) an increase in the total number of authorized shares of capital stock of the Company from 86,000,000 to 171,000,000, (ii) an increase in the total number of authorized shares of common stock of the Company from 85,000,000 to 170,000,000, and (iii) a two-for-one forward split of its common stock effective as of 5:00 p.m., Eastern Time, on September 21, 2012. | |||
The Company issued approximately 37.0 million shares of its common stock as a result of the two-for-one forward stock split. The par value of the Company’s common stock remained unchanged at $0.01 per share. | |||
Information regarding shares and amount of common stock, additional paid-in-capital, and net income (loss) per common share for all periods presented reflects the two-for-one forward split of the Company’s common stock. The number of shares of the Company’s common stock issuable upon exercise of outstanding stock options and vesting of other stock-based awards was proportionally increased, and the exercise price per share thereof was proportionally decreased, in accordance with the terms of the Medivation Equity Incentive Plan. Following the completion of the two-for-one forward stock split, the conversion rate of the Company’s Convertible Notes was adjusted to 19.5172 shares of common stock per $1,000 principal amount of the Convertible Notes, equivalent to a conversion price of approximately $51.24 per share of common stock. | |||
(d) Cash and Cash Equivalents | |||
Cash and cash equivalents are stated at cost, which approximates fair market value. The Company considers all highly liquid investments with a remaining maturity of three months or less at the time of acquisition to be cash equivalents. | |||
(e) Short-Term Investments | |||
The Company considers all highly liquid investments with a remaining maturity at the time of acquisition of more than three months but no longer than 12 months to be short-term investments. The Company classifies its short-term investments as available-for-sale securities and reports them at fair value with related unrealized gains and losses included as a component of stockholders’ equity. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in other income (expense), net, on the consolidated statements of operations. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income (expense), net. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in other income (expense), net. | |||
(f) Restricted Cash | |||
Restricted cash represents certificates of deposit held in the Company’s name with a major financial institution to secure the Company’s contingent obligations under irrevocable letters of credit issued to certain of its lessors. | |||
(g) Fair Value of Financial Instruments | |||
The estimated fair value of the Company’s cash equivalents is based on quoted market prices. The estimated fair value of contingent consideration is determined utilizing a model that considers the probability of achieving each milestone and an appropriate discount rate. The estimated fair value of the Company’s Convertible Notes is determined using recent trading prices of the Convertible Notes. Other financial instruments, including bank deposits, receivable from collaboration partner, accounts payable, accrued expenses, and other current liabilities are carried at cost, which the Company believes approximates fair value because of the short-term maturities of these instruments. | |||
(h) Concentration of Credit Risk | |||
Financial instruments that potentially subject the Company to credit risk consist of cash, cash equivalents, short-term investments and receivable from collaboration partner. The Company’s current investment policy is to invest only in (a) debt securities issued by, or backed by the full faith and credit of, the U.S. government, (b) repurchase agreements that are fully collateralized by such debt securities, and (c) money market funds invested exclusively in the types of securities described in (a) and (b) above. Given this investment policy, the Company does not believe its exposure to credit risk with respect to the issuers of the securities in which it invests is material, and accordingly has no formal policy for mitigating such risk. The Company’s cash and cash equivalents are primarily invested in deposits and money market accounts with one major financial institution in the United States. Deposits in this financial institution may exceed the amount of insurance provided on such deposits. | |||
(i) Property and Equipment | |||
Property and equipment are recorded at cost, less accumulated depreciation and amortization. Repairs and maintenance costs are expensed in the period incurred. Property and equipment is generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows: | |||
Description | Estimated Useful Life | ||
Furniture and fixtures | 3-5 years | ||
Computer equipment and software | 3-5 years | ||
Laboratory equipment | 5 years | ||
Leasehold improvements are amortized over their estimated useful life or the related lease term, whichever is shorter. | |||
(j) Convertible Notes | |||
The debt and equity components of the Company’s Convertible Notes have been bifurcated and accounted for separately based on the authoritative guidance in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 470-20, “Debt with Conversion and Other Options.” The debt component of the Convertible Notes, which excludes the associated equity conversion feature, was recorded at fair value on the issuance date. The equity component, representing the difference between the aggregate principal amount of the Convertible Notes and the fair value of the debt component, was recorded in additional paid-in capital on the consolidated balance sheet. The discounted carrying value of the Convertible Notes resulting from the bifurcation will be subsequently accreted to its principal amount through the recognition of non-cash interest expense. | |||
Costs related to the issuance of the Convertible Notes, consisting primarily of investment banking, legal and other professional fees were allocated to the debt and equity components of the Company’s Convertible Notes in proportion to the allocation of the principal. Amounts allocated to the debt component were capitalized and are being amortized as non-cash interest expense using the effective yield method over the five-year contract term of the Convertible Notes. Amounts allocated to the equity component were recorded against additional paid-in capital. | |||
(k) Leases | |||
At the inception of a lease, the Company evaluates the lease agreement to determine whether the lease is an operating, capital or build-to-suit lease using the criteria in ASC 840, “Leases.” | |||
Certain lease agreements also require the Company to make additional payments for taxes, insurance, and other operating expenses incurred during the lease period, which are expensed as incurred. | |||
Operating Leases | |||
For operating leases, the Company recognizes rent expense on a straight-line basis over the lease term and records the difference between cash rent payments and the recognition of rent expense as a deferred liability. Where lease agreements contain rent escalation clauses, rent abatements and/or concessions, such as rent holidays and tenant improvement allowances, the Company applies them in the determination of straight-line expense over the lease term. | |||
Capital Leases | |||
Capital leases are recorded as an asset within property and equipment, net and as an obligation at an amount equal to the present value of the minimum lease payments during the lease term. The asset is generally amortized over its estimated useful life or the related lease term, whichever is shorter. Lease payments under capital leases are recognized as a reduction of the capital lease obligation and interest expense. | |||
Build-to-Suit Leases | |||
In certain lease arrangements, the Company is involved in the construction of the building. To the extent the Company is involved with the structural improvements of the construction project or takes construction risk prior to the commencement of a lease, ASC 840-40, “Leases – Sale-Leaseback Transactions (Subsection 05-5),” requires the Company to be considered the owner for accounting purposes of these types of projects during the construction period. Therefore, the Company records an asset in property and equipment, net on the consolidated balance sheets, including capitalized interest costs, for the replacement cost of the Company’s portion of the pre-existing building plus the amount of estimated structural construction costs incurred by the landlord and the Company as of the balance sheet date. The Company records a corresponding build-to-suit lease obligation on its consolidated balance sheets representing the amounts paid by the lessor. | |||
Once construction is complete, the Company considers the requirements for sale-leaseback accounting treatment, including evaluating whether all risks of ownership have been transferred back to the landlord, as evidenced by a lack of continuing involvement in the leased property. If the arrangement does not qualify for sale-leaseback accounting treatment, the building asset remains on the Company’s consolidated balance sheets at its historical cost, and such asset is depreciated over its estimated useful life. The Company bifurcates its lease payments into a portion allocated to the building and a portion allocated to the parcel of land on which the building has been built. The portion of the lease payments allocated to the land is treated for accounting purposes as operating lease payments, and therefore is recorded as rent expense in the consolidated statements of operations. The portion of the lease payments allocated to the building is further bifurcated into a portion allocated to interest expense and a portion allocated to reduce the build-to-suit lease obligation. The interest rate used for the build-to-suit lease obligation represents the Company’s estimated incremental borrowing rate, adjusted to reduce any built in loss. The initial recording of these assets and liabilities is classified as non-cash investing and financing items, respectively, for purposes of the consolidated statements of cash flows. | |||
(l) Business Combinations | |||
Business combinations are accounted for under the acquisition method of accounting. The purchase price, including the fair value of any contingent consideration, is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. Transaction costs are expensed as incurred. | |||
Contingent Consideration | |||
The Company determines the fair value of contingent consideration payable at the acquisition date using a probability-based income approach utilizing an appropriate discount rate. Each reporting period thereafter, the Company re-measures the contingent consideration and records increases or decreases in their fair value as non-cash adjustments in the consolidated statements of operations. Changes in the fair value of contingent consideration payable can result from adjustments to the estimated probability and assumed timing of achieving the underlying milestones, as well as from changes to the discount rates and periods. | |||
In-Process Research and Development | |||
In-process research and development, or IPR&D, represents the fair value assigned to incomplete research projects that the Company acquires through business combinations which, at the time of acquisition, have not reached technological feasibility. The amounts are capitalized and accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each project, the Company will make a determination as to the then useful life of the intangible asset, generally determined by the period in which the substantial majority of the cash flows are expected to be generated, and begin amortization over that period. The Company tests IPR&D for impairment at least annually, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the IPR&D is less than its carrying amount. If the Company concludes it is more likely than not that the fair value is less than the carrying amount, a quantitative test that compares the fair value of the IPR&D with its carrying value is performed. If the fair value is less than the carrying amount, a non-cash impairment change is recognized in the consolidated statements of operations. | |||
Goodwill | |||
Goodwill represents the excess of the consideration transferred over the fair value of net assets of businesses acquired. Goodwill is assigned to reporting units and evaluated for impairment on at least an annual basis, or more frequently if impairment indicators exist. The impairment test for goodwill uses a two-step approach, which is performed at the entity level as the Company has one reporting unit. Step 1 compares the fair value of the reporting unit to its carrying value including goodwill. If the carrying value exceeds the fair value, there is potential impairment and Step 2 must be performed. Step 2 compares the carrying value of the reporting unit’s goodwill to its implied fair value (e.g., the fair value of the reporting unit less the fair value of the unit’s assets and liabilities, including identifiable intangible assets). If the carrying value of goodwill exceeds its implied fair value, the excess is recorded as a non-cash impairment charge in the consolidated statement of operations. | |||
(m) Litigation | |||
The Company is party to legal proceedings, investigations, and claims in the ordinary course of its business. The Company records accruals for outstanding legal matters when it believes that it is both probable that a liability has been incurred and the amount of such liability can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in significant legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. To the extent new information is obtained and the Company’s views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company’s accrued liabilities would be recorded in the period in which such determination is made. In addition, in accordance with the relevant authoritative guidance, for matters for which the likelihood of material loss is at least reasonably possible, the Company provides disclosure of the possible loss or range of loss; however, if a reasonable estimate cannot be made, the Company will provide disclosure to that effect. Gain contingencies, if any, are recorded as a reduction of expense when they are realized. | |||
(n) Collaboration Agreement Payments | |||
The Company accounts for the various payment flows under its collaboration agreement with Astellas, or the Astellas Collaboration Agreement, and its former collaboration agreement with Pfizer in a consistent manner, as follows: | |||
Estimated Performance Periods | |||
Both the Astellas Collaboration Agreement and the former collaboration agreement with Pfizer contain multiple elements and deliverables, and required evaluation pursuant to ASC 605-25, “Revenue Recognition—Multiple-Element Arrangements.” The Company concluded that it had multiple deliverables under both collaboration agreements, including deliverables relating to grants of technology licenses, and performance of manufacturing, regulatory and clinical development activities in the United States. In the case of the Astellas Collaboration Agreement, the period in which the Company performed its deliverables began in the fourth quarter of 2009 and is currently estimated to conclude in the second quarter of 2015 upon completion of the Company’s remaining performance obligations. In the case of the former collaboration agreement with Pfizer, the period in which the Company performed its deliverables began in the fourth quarter of 2008 and concluded in the third quarter of 2012 upon completion of the Company’s performance obligations. The Company also concluded that its deliverables under each collaboration agreement should be accounted for as a single unit under ASC 605-25. | |||
Estimation of the performance periods of the Company’s deliverables requires the use of management’s judgment. Significant factors considered in management’s evaluation of the estimated performance periods include, but are not limited to, the Company’s experience, along with its collaboration partners’ experience, in conducting manufacturing, clinical development and regulatory activities. The Company reviews the estimated duration of its performance periods under its collaboration agreements on a quarterly basis and makes any appropriate adjustments on a prospective basis. Future changes in estimates of the performance period under its collaboration agreements could impact the timing of future revenue recognition. | |||
Upfront Payments | |||
The Company received non-refundable, upfront cash payments of $110.0 million and $225.0 million under the Astellas Collaboration Agreement and its former collaboration agreement with Pfizer, respectively. The Company recognizes these payments as collaboration revenue on a straight-line basis over the applicable estimated performance period. | |||
Milestone Payments | |||
The Company is eligible to receive milestone payments under the Astellas Collaboration Agreement based on achievement of specified development, regulatory and commercial events. Management evaluated the nature of the events triggering these contingent payments, and concluded that these events fall into two categories: (a) events which involve the performance of the Company’s obligations under the Astellas Collaboration Agreement, and (b) events which do not involve the performance of the Company’s obligations under the Astellas Collaboration Agreement. | |||
The former category of milestone payments consist of those triggered by development and regulatory activities in the United States and by the acceptance for review of marketing applications in Europe and Japan. Management concluded that each of these payments, with one exception, constitute substantive milestone payments. This conclusion was based primarily on the facts that (i) each triggering event represents a specific outcome that can be achieved only through successful performance by the Company of one or more of its deliverables, (ii) achievement of each triggering event was subject to inherent risk and uncertainty and would result in additional payments becoming due to the Company, (iii) each of the milestone payments is non-refundable, (iv) substantial effort is required to complete each milestone, (v) the amount of each milestone payment is reasonable in relation to the value created in achieving the milestone, (vi) a substantial amount of time is expected to pass between the upfront payment and the potential milestone payments, and (vii) the milestone payments relate solely to past performance. Based on the foregoing, the Company recognizes any revenue from these milestone payments in the period in which the underlying triggering event occurs. The one exception is the milestone payment for initiation of the Phase 3 PREVAIL trial, an event which management deemed to be reasonably assured at the inception of the Astellas collaboration. This milestone payment was triggered in the third quarter of 2010, and the Company is recognizing the milestone payment as revenue on a straight-line basis over the estimated remaining performance period of the Astellas Collaboration Agreement. | |||
The latter category of milestone payments consists of those triggered by potential marketing approvals in Europe and Japan, and commercial activities globally, all of which are areas in which the Company has no pertinent contractual responsibilities under the Astellas Collaboration Agreement. Management concluded that these payments constitute contingent revenues and thus recognizes them as revenue in the period in which the contingency is met. | |||
Royalties and Profit (Loss) Sharing Payments | |||
Under the Astellas Collaboration Agreement, the Company shares equally profits (losses) on sales of products in the United States and receives royalties on sales of products outside the United States. The Company recognizes revenue from these events based on the revenue recognition criteria set forth in ASC 605-10-25-1, “Revenue Recognition.” Based on those criteria, the Company considers these payments to be contingent revenues, and recognizes them as revenue in the period in which the applicable contingency is resolved. | |||
Cost-Sharing Payments | |||
Under both the Astellas Collaboration Agreement and the former collaboration agreement with Pfizer, the Company and its collaboration partners share certain development and commercialization costs (including in the case of the Astellas Collaboration Agreement, cost of goods sold and the royalty on net sales payable to The Regents of the University of California, or UCLA, under the Company’s license agreement with UCLA) in the United States. The parties make quarterly cost-sharing payments to one another in amounts necessary to ensure that each party bears its contractual share of the overall shared U.S. development and commercialization costs incurred. The Company’s policy is to account for cost-sharing payments to its collaboration partners as increases in expense in its consolidated statements of operations, while cost-sharing payments by its collaboration partners to the Company are accounted for as reductions in expense. Cost-sharing payments related to development activities and commercialization activities are recorded in research and development expenses, or R&D expenses, and selling, general and administrative expenses, or SG&A expenses, respectively. | |||
Reliance on Third-Party Information | |||
Under the Astellas Collaboration Agreement, Astellas records all XTANDI sales globally and has operational responsibility for certain development and commercialization activities in the United States for which the Company shares costs. Thus, Astellas has control over certain XTANDI-related financial information needed to prepare the Company’s financial statements and related disclosures, including information regarding gross sales, net sales, gross-to-net sales deductions, including estimates of potential future product returns, and shared U.S. development and commercialization costs incurred by Astellas. The Company is dependent on Astellas to provide it with such information in a timely and accurate manner for use in preparing the Company’s consolidated financial statements and disclosures. Certain of this information provided by Astellas is subject to estimates, including estimates used in determining gross-to-net revenue deductions such as payor mix, discounts (including legally mandated discounts to government entities), returns, chargebacks, rebates, and participation levels in patient assistance programs, and estimates regarding accrued development and commercialization costs incurred by Astellas. Under the Astellas Collaboration Agreement, the deductions from gross sales used to derive net sales of XTANDI are determined in a manner consistent with GAAP, consistently applied. Should Astellas fail to provide the Company with any such financial information in a timely manner, or should any such financial information provided by Astellas, or any of the estimates upon which such financial information was based, prove to be inaccurate, the Company could be required to record adjustments in future periods. | |||
(o) Research and Development Expenses and Accruals | |||
R&D expenses are charged to expense as incurred unless there is an alternative future use in other research and development projects or otherwise. R&D expenses are comprised of costs incurred in performing research and development activities, including personnel-related costs, share-based compensation, and facilities-related overhead, outside contracted services including clinical trial costs, manufacturing and process development costs for both clinical and pre-clinical materials, research costs, upfront and development milestone payments under license agreements and other consulting services. Non-refundable advance payment for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. In instances where the Company enters into agreements with third parties to provide research and development services to it, costs are expensed as services are performed. Amounts due under such arrangements may be either fixed fee or fee for service, and may include upfront payments, monthly payments, and payments upon the completion of milestones or receipt of deliverables. | |||
The Company’s accruals for clinical trials and other research and development activities are based on estimates of the services received and efforts expended pursuant to contracts with numerous clinical trial centers, contract research organizations and clinical manufacturing organizations. In the normal course of business the Company contracts with third parties to perform various research and development activities in the on-going development of its product candidates, including, without limitation, third party clinical trial centers and contract research organizations that perform and administer the Company’s clinical trials on its behalf and clinical manufacturing organizations that manufacture clinical trial materials. The financial terms of these agreements are subject to negotiation and vary from contract to contract and may result in uneven payment flows. Payments under these agreements depend on factors such as the achievement of certain events, the successful enrollment of patients, and the completion of portions of the clinical trial or similar conditions. The objective of the Company’s accrual policy is to match the recording of expenses in its consolidated financial statements to the actual services received and efforts expended. As such, expense accruals related to clinical trials and other research and development activities are recognized based on the Company’s estimate of the degree of completion of the event or events specified in the specific agreement. | |||
The Company’s accrual estimates are dependent upon the timeliness and accuracy of data provided by third parties regarding the status and cost of studies, and may not match the actual services performed by the organizations. During the course of a clinical trial, the Company adjusts its rate of clinical trial expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued clinical trial expenses as of each balance sheet date based on facts and circumstances known at that time. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in the Company reporting amounts that are too high or too low for any particular period. This could result in adjustment to the Company’s R&D expense in future periods. The Company has had no significant adjustments to previously recorded research and development amounts. | |||
(p) Stock-Based Compensation | |||
The Company has granted stock options, restricted stock units, performance share awards, and stock appreciation rights pursuant to the terms of the Medivation Equity Incentive Plan and ESPP shares pursuant to the ESPP. The Company accounts for stock-based compensation awards to employees and directors and ESPP shares in accordance with ASC 718, “Stock Compensation,” and in the case of awards to consultants in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees.” | |||
Stock-based compensation expense associated with stock options is based on the estimated grant date fair value using the Black-Scholes valuation model, which requires the use of subjective assumptions related to the expected stock price volatility, option term, risk-free interest rate and dividend yield. The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest. | |||
Stock-based compensation expense associated with restricted stock units is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date. For restricted stock units, the Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest. Performance share awards allow the recipients of such awards to earn fully vested shares of the Company’s common stock upon the achievement of pre-established performance objectives. Stock-based compensation expense associated with performance share awards is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date, and is recognized when the performance objective is expected to be achieved. The Company evaluates on a quarterly basis the probability of achieving the performance criteria. The cumulative effect on current and prior periods of a change in the estimated number of performance share awards expected to be earned is recognized as compensation expense or as reduction of previously recognized compensation expense in the period of the revised estimate. | |||
The fair value of stock-settled and cash-settled stock appreciation rights is initially measured on the grant date using the Black-Scholes valuation model, which requires the use of subjective assumptions related to the expected stock price volatility, term, risk-free interest rate and dividend yield. Similar to stock options, compensation expense for stock-settled stock appreciation rights is recognized over the vesting period of the awards that are ultimately expected to vest based on the grant-date fair value. Cash-settled stock appreciation rights are liability-classified awards for which compensation expense and the liability are remeasured at each reporting date through the date of settlement based on the portion of the requisite service period rendered. Upon the conversion of cash-settled stock appreciation rights to stock-settled stock appreciation rights, the awards are remeasured using the then-current Black-Scholes assumptions and the remeasured liability is reclassified to additional paid-in capital. | |||
The Company accounts for the ESPP as a compensatory plan. The fair value of each purchase under the Company’s ESPP is estimated on the date of the beginning of the offering period using the Black-Scholes valuation model, which requires the use of subjective assumptions related to the expected stock price volatility, term, risk-free interest rate and dividend yield. The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest. | |||
Equity awards to consultants are typically remeasured at fair value at each reporting date until the awards vest in accordance with ASC 505-50. | |||
The Company applies a forfeiture rate when determining stock-based compensation expense to account for an estimate of the granted awards not expected to vest. If actual forfeitures differ from the expected rate, the Company may be required to make additional adjustments to compensation expense in future periods. | |||
The Black-Scholes valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable, characteristics not present in the Company’s stock options, stock appreciation rights, or ESPP shares. If the model permitted consideration of the unique characteristics of employee stock options, stock appreciation rights, and ESPP shares, the resulting estimate of fair value of the stock options, stock appreciation rights, and ESPP shares could be different. In addition, if the Company had made different assumptions and estimates for use in the Black-Scholes valuation model, the amount of recognized and to be recognized stock-based compensation expense could have been different. | |||
(q) Promotional and Advertising Costs | |||
Promotional and advertising costs are classified as SG&A expenses and are expensed as incurred. Promotional and advertising expenses consist primarily of the costs of designing, producing and distributing materials promoting the Company and its products, including its corporate website. Under both the Astellas Collaboration Agreement and the former collaboration agreement with Pfizer, the Company and its collaboration partners share certain commercialization costs, including certain promotional and advertising costs, in the United States. See Note 3, “Collaboration Agreements,” for additional information regarding cost-sharing with its collaboration partners. | |||
(r) Income Taxes | |||
The Company accounts for income taxes using an asset and liability approach in accordance with the guidance provided by ASC 740-10, “Accounting for Income Taxes.” ASC 740-10 requires the recognition of taxes payable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in the consolidated financial statements or tax returns. The measurement of current and deferred tax assets and liabilities is based on provisions of the enacted tax law; the effects of future changes in tax laws or rates are not anticipated. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, is not expected to be realized. | |||
The Company records a valuation allowance to reduce its deferred tax assets to reflect the net amount that it believes is more likely than not to be realized. Realization of the deferred tax assets is dependent upon the generation of future taxable income, the amount and timing of which are uncertain. Based upon the weight of available evidence at December 31, 2014, the Company determined that it was more likely than not that a portion of its deferred tax assets would be realizable and consequently released the valuation allowance against Federal and certain state net deferred tax assets during the fourth quarter of 2014 and recorded a discrete tax benefit of $33.4 million during the fourth quarter of 2014. The decision to reverse a portion of the valuation allowance was made after management considered all available evidence, both positive and negative, including but not limited to the Company’s historical operating results, income or loss in recent periods, cumulative income in recent years, forecasted earnings, forecasted future taxable income, and significant risk and uncertainty related to forecasts. The release of the valuation allowance resulted in the recognition of certain deferred tax assets and a decrease to income tax expense. | |||
Significant judgment in required in evaluating the Company’s uncertain income tax positions based on the guidance in ASC 740-10-25, “Accounting for Uncertainty in Income Taxes.” The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the position will be sustained upon examination by tax authorities. The tax benefit recognized in the financial statements on a particular tax position is measured on the largest benefit that is more likely than not to be realized. The Company evaluates uncertain tax positions on a quarterly basis and adjusts the liability for changes in facts and circumstances, such as new regulations or interpretations by the taxing authorities, new information obtained during a tax examination, significant amendment to an existing tax law, or resolution of an examination. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which such determination is made. The resolution of our uncertain income tax positions is dependent on uncontrollable factors such as law changes, new case law, and the willingness of the income tax authorities to settle, including the timing thereof and other factors. Although The Company does not anticipate significant changes to its uncertain income tax positions in the next twelve months, items outside of the Company’s control could cause the uncertain income tax positions to change in the future, which would be recorded in the consolidated statements of operations. Interest and/or penalties related to income tax matters are recognized as a component of income tax expense as incurred. | |||
(s) New Accounting Pronouncements | |||
In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This update clarifies that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss, or NOL, carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In situations where an NOL carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction or the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The Company adopted this amended guidance prospectively as of January 1, 2014. The adoption of this amended guidance did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. | |||
In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606), a comprehensive new revenue recognition standard that will supersede the existing revenue recognition guidance. The new accounting guidance creates a framework by which an entity will allocate the transaction price to separate performance obligations and recognize revenue when (or as) each performance obligation is satisfied. Under the new standard, entities will be required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for either “full retrospective” adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch-up as of the earliest period presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch-up as of the current period. The accounting standard will be effective for reporting periods beginning after December 15, 2016. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. | |||
(t) Out-of-Period Adjustment | |||
In the first quarter of 2013, the Company recorded an out-of-period correcting adjustment that increased operating expenses and net loss by $3.6 million for the three months ended March 31, 2013. Management concluded that the adjustment is not material to the full year 2013 results or any previously reported financial statements. |
Collaboration_Agreements
Collaboration Agreements | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Collaboration Agreements | NOTE 3. COLLABORATION AGREEMENTS | ||||||||||||
(a) Collaboration Agreement with Astellas | |||||||||||||
In October 2009, the Company entered into a collaboration agreement with Astellas, or the Astellas Collaboration Agreement, pursuant to which it is collaborating with Astellas to develop and commercialize XTANDI globally. Under the agreement, decision making and economic participation differs between the U.S. market and the ex-U.S. market. In the United States, decisions are generally made by consensus, pre-tax profits and losses are shared equally, and, subject to certain exceptions, development and commercialization costs (including cost of goods sold and the royalty on net sales payable to The Regents of the University of California (“UCLA” or “the Regents”) under the Company’s license agreement with UCLA) are also shared equally. The primary exceptions to equal cost sharing in the U.S. market are that each party is responsible for its own commercial full-time equivalent, or FTE, costs, and that development costs supporting marketing approvals in both the United States and either Europe or Japan are borne one-third by the Company and two-thirds by Astellas. The Company and Astellas are co-promoting XTANDI in the U.S. market, with each company providing half of the sales and medical affairs effort in support of the product. Both the Company and Astellas are entitled to receive a fee for each qualifying detail made by its respective sales representatives. Outside the United States, decisions are generally made by Astellas and all development and commercialization costs (including cost of goods sold and the royalty on net sales payable to UCLA) are borne by Astellas. Astellas retains all ex-U.S. profits and losses, and pays the Company a tiered royalty ranging from the low teens to the low twenties on the aggregate net sales of XTANDI outside the United States, or ex-U.S. XTANDI sales. Astellas has sole responsibility for promoting XTANDI outside the United States and for recording all XTANDI sales both inside and outside the United States. Both the Company and Astellas have agreed not to commercialize certain other products having a similar mechanism of action (as defined by the Astellas Collaboration Agreement) as XTANDI for the treatment of prostate cancer for a specified time period, subject to certain exceptions. | |||||||||||||
Under the Astellas Collaboration Agreement, Astellas paid the Company a non-refundable, upfront cash payment of $110.0 million in the fourth quarter of 2009. The Company is also eligible to receive up to $335.0 million in development milestone payments and up to $320.0 million in sales milestone payments. As of December 31, 2014, the Company has earned all of the $335.0 million in development milestone payments and $75.0 million in sales milestone payments under the Astellas Collaboration Agreement. The Company expects that any of the remaining $245.0 million in sales milestone payments that the Company may earn in future periods will be recognized as revenue in their entirety in the period in which the underlying milestone event is achieved. The triggering events for the sales milestone payments are as follows: | |||||||||||||
Annual Global Net Sales in a Calendar Year | Milestone Payment(1) | ||||||||||||
$400 million | -2 | ||||||||||||
$800 million | -3 | ||||||||||||
$1.2 billion | $70 million | ||||||||||||
$1.6 billion | $175 million | ||||||||||||
-1 | Each milestone shall only be paid once during the term of the Astellas Collaboration Agreement. | ||||||||||||
-2 | This milestone totaling $25.0 million was earned and recognized as collaboration revenue during the fourth quarter of 2013 and payment was received in the first quarter of 2014. | ||||||||||||
-3 | This milestone totaling $50.0 million was earned and recognized as collaboration revenue during the fourth quarter of 2014 and is included in receivable from collaboration partner on the consolidated balance sheet at December 31, 2014. Payment was received during the first quarter of 2015. | ||||||||||||
The Company and Astellas are each permitted to terminate the Astellas Collaboration Agreement for an uncured material breach by the other party or for the insolvency of the other party. Astellas has a right to terminate the Astellas Collaboration Agreement unilaterally by advance written notice to the Company. Following any termination of the Astellas Collaboration Agreement in its entirety, all rights to develop and commercialize XTANDI will revert to the Company, and Astellas will grant a license to the Company to enable it to continue such development and commercialization. In addition, except in the case of a termination by Astellas for the Company’s material breach, Astellas will supply XTANDI to the Company during a specified transition period. | |||||||||||||
Unless terminated earlier by the Company or Astellas pursuant to the terms thereof, the Astellas Collaboration Agreement will remain in effect: (a) in the United States, until such time as Astellas notifies the Company that Astellas has permanently stopped selling products covered by the Astellas Collaboration Agreement in the United States; and (b) in each other country of the world, on a country-by-country basis, until such time as (i) products covered by the Astellas Collaboration Agreement cease to be protected by patents or regulatory exclusivity in such country and (ii) commercial sales of generic equivalent products have commenced in such country. | |||||||||||||
(b) Former Collaboration Agreement with Pfizer | |||||||||||||
The Company entered into a collaboration agreement with Pfizer in October 2008. Under the terms of the agreement, the Company and Pfizer agreed to collaborate on the development and commercialization of its former product candidate dimebon for the treatment of Alzheimer’s disease and Huntington disease for the U.S. market. Pfizer paid the Company a non-refundable, upfront cash payment of $225.0 million in the fourth quarter of 2008. Under the terms of the former collaboration agreement with Pfizer, the Company and Pfizer shared the costs and expenses of developing and commercializing dimebon for the U.S. market on a 60%/40% basis, with Pfizer assuming the larger share. In January 2012, Pfizer exercised its right to terminate the collaboration agreement and the Company and Pfizer discontinued development of dimebon for all indications due to the negative Phase 3 trial results in both indications. Amortization of the full Pfizer upfront payment was completed upon completion of the Company’s performance obligations in the third quarter of 2012. | |||||||||||||
(c) Collaboration Revenue | |||||||||||||
Collaboration revenue consists of three components: (a) collaboration revenue related to U.S. XTANDI sales; (b) collaboration revenue related to ex-U.S. XTANDI sales; and (c) collaboration revenue related to upfront and milestone payments. | |||||||||||||
Collaboration revenue was as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Collaboration revenue: | |||||||||||||
Related to U.S. XTANDI sales | $ | 339,902 | $ | 196,208 | $ | 35,752 | |||||||
Related to ex-U.S. XTANDI sales | 49,476 | 6,338 | — | ||||||||||
Related to upfront and milestone payments | 321,109 | 70,396 | 145,944 | ||||||||||
Total | $ | 710,487 | $ | 272,942 | $ | 181,696 | |||||||
Collaboration Revenue Related to U.S. XTANDI Sales | |||||||||||||
Under the Astellas Collaboration Agreement, Astellas records all U.S. XTANDI sales. The Company and Astellas share equally all pre-tax profits and losses from U.S. XTANDI sales. Subject to certain exceptions, the Company and Astellas also share equally all XTANDI development and commercialization costs attributable to the U.S. market, including cost of goods sold and the royalty on net sales payable to UCLA under the Company’s license agreement with UCLA. The primary exceptions to the equal cost sharing are that each party is responsible for its own commercial FTE costs and that development costs supporting marketing approvals in both the United States and either Europe or Japan are borne one-third by the Company and two-thirds by Astellas. The Company recognizes collaboration revenue related to U.S. XTANDI sales in the period in which such sales occur. Collaboration revenue related to U.S. XTANDI sales consists of the Company’s share of pre-tax profits and losses from U.S. sales, plus reimbursement of the Company’s share of reimbursable U.S. development and commercialization costs. The Company’s collaboration revenue related to U.S. XTANDI sales in any given period is equal to 50% of U.S. XTANDI net sales as reported by Astellas for the applicable period. | |||||||||||||
Collaboration revenue related to U.S. XTANDI sales was as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
U.S. XTANDI sales (as reported by Astellas) | $ | 679,805 | $ | 392,415 | $ | 71,504 | |||||||
Shared U.S. development and commercialization costs | (323,730 | ) | (241,106 | ) | (88,908 | ) | |||||||
Pre-tax U.S. profit (loss) | $ | 356,075 | $ | 151,309 | $ | (17,404 | ) | ||||||
Medivation’s share of pre-tax U.S. profit (loss) | $ | 178,037 | $ | 75,655 | $ | (8,702 | ) | ||||||
Reimbursement of Medivation’s share of shared U.S. costs | 161,865 | 120,553 | 44,454 | ||||||||||
Collaboration revenue related to U.S. XTANDI sales | $ | 339,902 | $ | 196,208 | $ | 35,752 | |||||||
XTANDI first became available for shipment on September 13, 2012. Collaboration revenue related to U.S. XTANDI sales for the year ended December 31, 2012 represents U.S. XTANDI sales from September 13, 2012 through December 31, 2012. | |||||||||||||
Collaboration Revenue Related to Ex-U.S. XTANDI Sales | |||||||||||||
Under the Astellas Collaboration Agreement, Astellas records all ex-U.S. XTANDI sales. Astellas is responsible for all development and commercialization costs for XTANDI outside the United States, including cost of goods sold and the royalty on net sales payable to UCLA under the Company’s license agreement with UCLA, and pays the Company a tiered royalty ranging from the low teens to the low twenties on net ex-U.S. XTANDI sales. The Company recognizes collaboration revenue related to ex-U.S. XTANDI sales in the period in which such sales occur. Collaboration revenue related to ex-U.S. XTANDI sales consists of royalties from Astellas on those sales. | |||||||||||||
Collaboration revenue related to ex-U.S. XTANDI sales was $49.5 million and $6.3 million for the years ended December 31, 2014 and 2013, respectively. There was no collaboration revenue related to ex-U.S. XTANDI sales for the year ended December 31, 2012. | |||||||||||||
Collaboration Revenue Related to Upfront and Milestone Payments | |||||||||||||
Collaboration revenue related to upfront and milestone payments was as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
From Astellas: | |||||||||||||
Development milestones earned | $ | 257,000 | $ | 20,000 | $ | 45,000 | |||||||
Sales milestones earned | 50,000 | 25,000 | — | ||||||||||
Amortization of deferred upfront and development milestones | 14,109 | 25,396 | 28,914 | ||||||||||
321,109 | 70,396 | 73,914 | |||||||||||
From Pfizer: | |||||||||||||
Amortization of deferred upfront and development milestones | — | — | 72,030 | ||||||||||
Total | $ | 321,109 | $ | 70,396 | $ | 145,944 | |||||||
Deferred revenue under the Astellas Collaboration Agreement was $2.8 million and $16.9 million at December 31, 2014 and 2013, respectively. | |||||||||||||
(d) Cost-Sharing Payments | |||||||||||||
The following table summarizes the reductions in R&D expenses related to development cost sharing payments: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Development cost-sharing payments from Astellas | $ | 63,479 | $ | 46,594 | $ | 47,473 | |||||||
Development cost-sharing payments from Pfizer | — | — | 1,740 | ||||||||||
Total | $ | 63,479 | $ | 46,594 | $ | 49,213 | |||||||
The following table summarizes the (increases) reductions in SG&A expenses related to commercialization cost-sharing payments: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Commercialization cost-sharing payments to Astellas | $ | (36,094 | ) | $ | (11,973 | ) | $ | (3,437 | ) | ||||
Commercialization cost-sharing payments from Pfizer | — | — | 9 | ||||||||||
Total | $ | (36,094 | ) | $ | (11,973 | ) | $ | (3,428 | ) | ||||
(e) Collaboration Receivable | |||||||||||||
At December 31, 2014 and 2013, collaboration receivable from Astellas was $184.7 million and $107.2 million, respectively. The amounts receivable at December 31, 2014 and 2013 were received in the first quarter of 2015 and 2014, respectively. |
Business_Acquisition
Business Acquisition | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Business Combinations [Abstract] | |||||
Business Acquisition | NOTE 4. BUSINESS ACQUISITION | ||||
In the fourth quarter of 2014, the Company entered into a License Agreement with Israel-based CureTech, pursuant to which it licensed exclusive worldwide rights to CureTech’s late-stage clinical molecule, pidilizumab, an immune modulatory anti-PD-1 monoclonal antibody. Under the License Agreement, the Company will be responsible for all development, regulatory, manufacturing, and commercialization activities for pidilizumab for all indications, including oncology. Immuno-oncology is a rapidly evolving field that focuses on harnessing the ability of the immune system in the fight against cancer. The Company believes that pidilizumab may have utility in immuno-oncology. The Company has concluded that the in-license transaction is an acquisition of a business and will account for it in accordance with ASC 805-10, “Business Combinations.” | |||||
In connection with the acquisition, the Company made upfront cash payments to CureTech totaling $5.0 million during the fourth quarter of 2014. In addition, CureTech is entitled to contingent payments totaling up to $85.0 million upon attainment of certain development and regulatory milestones, up to $245.0 million upon the achievement of certain annual worldwide net sales thresholds, and tiered royalties ranging from 5% to 11% on annual worldwide net sales. CureTech is also entitled to a $5.0 million milestone payment upon completion of the Manufacturing Technology Transfer as described in Note 14, “Commitments and Contingencies.” The acquisition-date fair value of the contingent consideration payments totaled $106.0 million and was estimated by applying a probability-based income approach using an appropriate discount rate. The estimation was based on significant inputs that are not observable in the market, referred to as Level 3 inputs, as described in more detail in Note 13, “Fair Value Measurements.” | |||||
The following table presents the final allocation of the purchase consideration for the CureTech acquisition, including the contingent consideration payable, based on fair value. | |||||
Purchase consideration: | |||||
Cash | $ | 5,000 | |||
Acquisition-date fair value of contingent consideration | 106,000 | ||||
Total purchase consideration | $ | 111,000 | |||
Allocation of the purchase consideration: | |||||
Assets: | |||||
Identifiable intangible assets- IPR&D | $ | 101,000 | |||
Net identifiable assets acquired | 101,000 | ||||
Goodwill | 10,000 | ||||
Net assets acquired | $ | 111,000 | |||
Identifiable intangible assets totaled $101.0 million and consist entirely of IPR&D for pidilizumab. As of the valuation date, the Company determined that pidilizumab was the only R&D project with substance, such that the project had undergone conceptual stages, and research, development, and preproduction had been started for the project. As such, no other intangible assets were identified in the transaction other than pidilizumab as separate from goodwill. The Company utilized the multi-period excess earnings model of the “income method” to determine the fair value of the IPR&D as of the acquisition date. The excess of the consideration over the fair values assigned to the net assets acquired was $10.0 million, which represents the amount of goodwill resulting from the acquisition. The Company believes that the goodwill primarily represents benefits to it, such as the potential to diversify its product portfolio into the area of immuno-oncology, that do not qualify for separate recognition as acquired intangible assets. The amount of goodwill that is expected to be deductible for income tax purposes is $10.0 million. The Company recorded the goodwill on its consolidated balance sheet as of the acquisition date. |
Net_Income_Loss_Per_Common_Sha
Net Income (Loss) Per Common Share | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Net Income (Loss) Per Common Share | NOTE 5. NET INCOME (LOSS) PER COMMON SHARE | ||||||||||||
The computation of basic net income (loss) per common share is based on the weighted- average number of common shares outstanding during each period. The computation of diluted net income (loss) per common share is based on the weighted-average number of common shares outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, restricted stock units, performance share awards, stock appreciation rights, ESPP shares, warrants, and shares issuable upon conversion of convertible debt. | |||||||||||||
In periods in which the Company reports net income, the Company uses the “if-converted” method in calculating the diluted net income per common share effect of the assumed conversion of the Convertible Notes. Under the “if-converted” method, interest expense, net of tax, related to the Convertible Notes is added back to net income, and the Convertible Notes are assumed to have been converted into common shares at the beginning of the period (or issuance date) in periods in which there would have been a dilutive effect. The Convertible Notes can be settled in common stock, cash, or a combination thereof, at the Company’s election. During periods of net income, the Company’s intent and ability to settle the Convertible Notes in cash could impact the computation of diluted net income per common share. | |||||||||||||
In periods in which the Company reports a net loss, all common stock equivalents are deemed anti-dilutive such that basic net loss per common share and diluted net loss per common share are equal. | |||||||||||||
The following table reconciles the numerator and denominator used to calculate diluted net income (loss) per common share: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Numerator: | |||||||||||||
Net income (loss) | $ | 276,452 | $ | (42,613 | ) | $ | (41,257 | ) | |||||
Interest expense on convertible notes, net of tax | 14,030 | — | — | ||||||||||
Numerator for diluted net income (loss) per common share calculation | $ | 290,482 | $ | (42,613 | ) | $ | (41,257 | ) | |||||
Denominator: | |||||||||||||
Weighted-average common shares, basic | 76,929 | 75,165 | 73,480 | ||||||||||
Dilutive effect of common stock equivalents | 8,071 | — | — | ||||||||||
Weighted-average common shares, diluted | 85,000 | 75,165 | 73,480 | ||||||||||
Net income (loss) per common share: | |||||||||||||
Basic net income (loss) per common share | $ | 3.59 | $ | (0.57 | ) | $ | (0.56 | ) | |||||
Diluted net income (loss) per common share | $ | 3.42 | $ | (0.57 | ) | $ | (0.56 | ) | |||||
Approximately 12.6 million and 13.0 million potentially dilutive common shares have been excluded from the diluted net loss per common share computations for the years ended December 31, 2013 and 2012, respectively, because such securities have an anti-dilutive effect on net loss per common share due to the Company’s net loss in each of these years. |
Convertible_Senior_Notes_Due_2
Convertible Senior Notes Due 2017 | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Debt Disclosure [Abstract] | |||||||||||||
Convertible Senior Notes Due 2017 | NOTE 6. CONVERTIBLE SENIOR NOTES DUE 2017 | ||||||||||||
On March 19, 2012, the Company issued $258.8 million aggregate principal amount of the Convertible Notes. The Convertible Notes are governed by an indenture, dated as of March 19, 2012 between the Company and Wells Fargo Bank, National Association as Trustee, as supplemented by the first supplemental indenture dated as of March 19, 2012, or the Indenture. The Convertible Notes bear interest at a rate of 2.625% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2012. The Convertible Notes mature on April 1, 2017, unless earlier converted, redeemed or repurchased in accordance with their terms. The Convertible Notes are general senior unsecured obligations and rank (1) senior in right of payment to any of the Company’s future indebtedness that is expressly subordinated in right of payment to the Convertible Notes, (2) equal in right of payment to any of the Company’s future indebtedness and other liabilities of the Company that are not so subordinated, (3) junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness and (4) structurally junior to all future indebtedness incurred by the Company’s subsidiaries and their other liabilities (including trade payables). | |||||||||||||
Prior to April 6, 2015, the Convertible Notes are not redeemable. On or after April 6, 2015, the Company may elect to redeem for cash all or a part of the Convertible Notes if the closing sale price of its common stock for 20 or more trading days in a period of 30 consecutive trading days ending on the trading day preceding the date it provides notice of the redemption exceeds 130% of the conversion price in effect on each such trading day, subject to certain conditions. The redemption price will equal 100% of the principal amount of the Convertible Notes to be redeemed plus accrued and unpaid interest, if any, to, but excluding the redemption date. If a fundamental change (as defined in the Indenture) occurs prior to the maturity date, holders may require the Company to purchase for cash all or any portion of the Convertible Notes at a purchase price equal to 100% of the principal amount of the Convertible Notes to be purchased plus accrued and unpaid interest, if any, to, but excluding, the fundamental change purchase date. | |||||||||||||
Holders may convert their Convertible Notes prior to the close of business on the business day immediately preceding January 1, 2017 only upon the occurrence of the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2012, if the closing sale price of the Company’s common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs, is more than 130% of the conversion price of the Convertible Notes in effect on each applicable trading day; (2) during the five consecutive trading-day period following any five consecutive trading-day period in which the trading price for the Convertible Notes for each such trading day was less than 98% of the closing sale price of the Company’s common stock on such date multiplied by the then-current conversion rate; (3) upon the occurrence of specified corporate events; or (4) if the Company calls any Convertible Notes for redemption, at any time until the close of business on the second business day preceding the redemption date. On or after January 1, 2017 until the close of business on the second business day immediately preceding the stated maturity date, holders may surrender their Convertible Notes for conversion at any time, regardless of the foregoing circumstances. | |||||||||||||
At December 31, 2014, the Convertible Notes met a requirement of convertibility because the Company’s common stock price was in excess of the stated conversion premium for at least 20 trading days in the period of 30 consecutive trading days ending on December 31, 2014. The Convertible Notes remain convertible through March 31, 2015. Convertibility of the Convertible Notes based on the trading price of the Company’s common stock is assessed on a calendar-quarter basis. Upon a conversion of the Convertible Notes, the Company is required to pay or deliver, as the case may be, cash, shares of the Company’s common stock, or a combination of both, at the Company’s election. As of December 31, 2014, the conversion rate was 19.5172 shares of common stock per $1,000 principal amount of the Convertible Notes, equivalent to a conversion price of approximately $51.24 per share of common stock. The conversion rate is subject to adjustment in certain events, such as distribution of dividends and stock splits. In addition, upon a Make-Whole Adjustment Event (as defined in the Indenture), the Company will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert its Convertible Notes in connection with such Make-Whole Adjustment Event. | |||||||||||||
The debt and equity components of the Convertible Notes have been bifurcated and accounted for separately based on the authoritative accounting guidance in ASC 470-20. The $258.8 million aggregate principal amount of Convertible Notes was bifurcated between the debt component ($187.1 million) and the equity component ($71.7 million). The amount allocated to the debt component of $187.1 million was estimated based on the fair value of similar debt instruments that do not include an equity conversion feature. The Convertible Notes were recorded at an initial carrying value of $187.1 million, net of $71.7 million in debt discount. The debt discount is being accreted to the carrying value of the Convertible Notes as non-cash interest expense utilizing the effective yield amortization method over the period ending on April 1, 2017, which is the scheduled maturity date of the Convertible Notes. | |||||||||||||
The Company incurred issuance costs of $8.4 million, consisting primarily of investment banking, legal and other professional fees. These issuance costs were allocated to the debt component ($6.1 million) and the equity component ($2.3 million) in proportion to the allocation of the Convertible Note proceeds. The $6.1 million of issuance costs allocated to the debt component was capitalized and is being amortized as non-cash interest expense utilizing the effective yield amortization method over the period ending on the scheduled maturity date of the Convertible Notes. The $2.3 million of issuance costs allocated to the equity component was charged to additional paid-in capital. | |||||||||||||
After giving effect to the bifurcation described above, the effective interest rate on the Convertible Notes was 10.71% for the years ended December 31, 2014, 2013 and 2012. Interest expense on the Convertible Notes consisted of the following: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Coupon interest expense | $ | 6,792 | $ | 6,793 | $ | 5,322 | |||||||
Non-cash amortization of debt discount | 13,737 | 12,407 | 8,910 | ||||||||||
Non-cash amortization of debt issuance costs | 1,161 | 1,049 | 753 | ||||||||||
Total | $ | 21,690 | $ | 20,249 | $ | 14,985 | |||||||
BuildtoSuit_Lease_Obligation
Build-to-Suit Lease Obligation | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Leases [Abstract] | |||||
Build-to-Suit Lease Obligation | NOTE 7 — BUILD-TO-SUIT LEASE OBLIGATION | ||||
In the fourth quarter of 2013, the Company entered into a long-term property lease for approximately 52,000 square feet of space located in San Francisco, California. The lease agreement expires in July 2024, and the Company has an option to extend the lease term for up to an additional five years. | |||||
The Company is deemed, for accounting purposes only, to be the owner of the entire project including the building shell, even though it is not the legal owner. In connection with the Company’s accounting for this transaction, the Company capitalized $14.5 million as a build-to-suit property within property and equipment, net, and recognized a corresponding build-to-suit lease obligation for the same amount. The Company also recognized, as an additional build-to-suit lease obligation, structural tenant improvements totaling $3.6 million for amounts paid by the landlord and $1.5 million for capitalized interest during the construction period. | |||||
A portion of the monthly lease payment will be allocated to land rent and recorded as an operating lease expense and the non-interest portion of the amortized lease payments to the landlord related to the rent of the building will be applied to reduce the build-to-suit lease obligation. At December 31, 2014, $0.7 million of the build-to-suit lease obligation representing the expected reduction in the liability over the next twelve months is classified as a current liability and the remaining $18.7 million is classified as a non-current liability on the consolidated balance sheet. Expected reductions (increases) in the build-to-suit lease obligation at December 31, 2014 were as follows: | |||||
Years Ending December 31, | Build-To-Suit Lease | ||||
Obligation | |||||
2015 | $ | 698 | |||
2016 | (12 | ) | |||
2017 | 66 | ||||
2018 | 150 | ||||
2019 | 241 | ||||
2020 and thereafter | 18,266 | ||||
Total | $ | 19,409 | |||
The amounts included in the table above represent the reductions (increases) in the build-to-suit lease obligation on the Company’s consolidated balance sheet in each of the periods presented. The amount in the terminal period includes the amount to derecognize the build-to-suit lease obligation at the end of the lease term. The expected reductions (increases) in the build-to-suit obligation presented in the table above are impacted by the timing of the completion of the construction project. Actual expected lease payments under the build-to-suit lease obligation are included in Note 14, “Commitments and Contingencies.” |
Property_and_Equipment_Net
Property and Equipment, Net | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment, Net | NOTE 8. PROPERTY AND EQUIPMENT, NET | ||||||||
Property and equipment, net, consisted of the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Build-to-suit property | $ | 19,544 | $ | — | |||||
Leasehold improvements | 15,051 | 12,034 | |||||||
Computer equipment and software | 9,499 | 4,503 | |||||||
Furniture and fixtures | 4,667 | 3,981 | |||||||
Construction in progress | 1,360 | 1,177 | |||||||
Laboratory equipment | 735 | 703 | |||||||
50,856 | 22,398 | ||||||||
Less: Accumulated depreciation | (9,695 | ) | (5,363 | ) | |||||
Total | $ | 41,161 | $ | 17,035 | |||||
Accounts_Payable_Accrued_Expen
Accounts Payable, Accrued Expenses and Other Current Liabilities | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Accounts Payable, Accrued Expenses and Other Current Liabilities | NOTE 9. ACCOUNTS PAYABLE, ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ||||||||
Accounts payable, accrued expenses and other current liabilities consisted of the following: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Payroll and payroll-related | $ | 33,272 | $ | 23,832 | |||||
Clinical and preclinical | 31,069 | 34,182 | |||||||
Royalties payable | 13,582 | 6,377 | |||||||
Accounts payable | 10,492 | 3,290 | |||||||
Accrued professional services and other current liabilities | 8,913 | 6,879 | |||||||
Other payable to licensor | 5,000 | 2,500 | |||||||
Taxes payable | 2,106 | — | |||||||
Interest payable | 1,698 | 1,698 | |||||||
Total | $ | 106,132 | $ | 78,758 | |||||
Accounts payable represents short-term liabilities for which the Company has received and processed a vendor invoice prior to the end of the reporting period. Accrued expenses and other current liabilities represent, among other things, compensation and related benefits to employees, royalties due to licensors of technologies; cash interest payable related to the Company’s Convertible Notes, estimated amounts due to third party vendors for services rendered prior to the end of the reporting period, invoices received from third party vendors that have not yet been processed, taxes payable, and other accrued items. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Stockholders' Equity | NOTE 10. STOCKHOLDERS’ EQUITY | ||||||||||||||||
(a) Stock Purchase Rights | |||||||||||||||||
All shares of the Company’s common stock, if issued prior to the termination by the Company of its rights agreement, dated as of December 4, 2006, include stock purchase rights. The rights are exercisable only if a person or group acquires twenty percent or more of the Company’s common stock or announces a tender or exchange offer which would result in ownership of twenty percent or more of the Company’s common stock. Following the acquisition of twenty percent or more of the Company’s common stock, the holders of the rights, other than the acquiring person or group, may purchase Medivation common stock at half of its fair market value. In the event of a merger or other acquisition of the Company, the holders of the rights, other than the acquiring person or group, may purchase shares of the acquiring entity at half of their fair market value. The rights were not exercisable at December 31, 2014. | |||||||||||||||||
(b) Medivation Equity Incentive Plan | |||||||||||||||||
The Medivation Equity Incentive Plan, which is stockholder-approved, provides for the issuance of options and other stock-based awards, including restricted stock units, performance share awards and stock appreciation rights, to employees, directors and consultants. The vesting of all outstanding awards under the Medivation Equity Incentive Plan will accelerate, and all such awards will become immediately exercisable, upon a “change of control” of Medivation, as defined in the Medivation Equity Incentive Plan. At December 31, 2014, there were 21,150,000 shares of common stock authorized for issuance under the Medivation Equity Incentive Plan, of which approximately 2.7 million shares of common stock were available for issuance. | |||||||||||||||||
Stock Options | |||||||||||||||||
The terms of stock options granted under the Medivation Equity Incentive Plan cannot exceed ten years. Stock options generally have an exercise price equal to the fair market value of the Company’s common stock on the grant date, and generally vest over a period of four years except for annual stock option grants to non-employee directors, which vest over a period of one year. | |||||||||||||||||
The following table summarizes stock option activity for the year ended December 31, 2014: | |||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Options | Average | Average | Intrinsic | ||||||||||||||
Exercise Price | Remaining | Value(1) | |||||||||||||||
Contractual | |||||||||||||||||
Term | |||||||||||||||||
(in years) | |||||||||||||||||
Outstanding at December 31, 2013 | 6,614,534 | $ | 22.12 | ||||||||||||||
Granted | 957,131 | $ | 78.57 | ||||||||||||||
Exercised | (2,015,934 | ) | $ | 14.43 | |||||||||||||
Forfeited/expired | (487,774 | ) | $ | 46.13 | |||||||||||||
Outstanding at December 31, 2014 | 5,067,957 | $ | 33.52 | 6.27 | $ | 335.3 | |||||||||||
Vested and exercisable at December 31, 2014 | 3,423,815 | $ | 19.7 | 5.16 | $ | 273.6 | |||||||||||
-1 | The aggregate intrinsic value is calculated as the pre-tax difference between the weighted-average exercise price of the underlying awards and the closing price per share of $99.61 of the Company’s common stock on December 31, 2014. The calculation excludes any awards with an exercise price higher than the closing price of the Company’s common stock on December 31, 2014. The amounts are presented in millions. | ||||||||||||||||
Additional information regarding stock options is set forth below (in thousands, except per share data): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Intrinsic value of options exercised | $ | 145,842 | $ | 35,155 | $ | 116,867 | |||||||||||
Grant-date fair value of options vested | $ | 38,147 | $ | 22,278 | $ | 10,795 | |||||||||||
Weighted-average grant-date fair value per share of options granted | $ | 43.35 | $ | 30.39 | $ | 26.01 | |||||||||||
Restricted Stock Units | |||||||||||||||||
A restricted stock unit is an agreement to issue shares of the Company’s common stock at the time of vesting. Restricted stock units generally vest in three equal installments on approximately the first, second and third anniversaries of the grant date, except for annual restricted stock unit grants to non-employee directors, which vest on approximately the first anniversary of the grant date. | |||||||||||||||||
The following table summarizes restricted stock unit activity for the year ended December 31, 2014: | |||||||||||||||||
Number of | Weighted- | ||||||||||||||||
Shares | Average | ||||||||||||||||
Grant-Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Unvested at December 31, 2013 | 311,347 | $ | 52.57 | ||||||||||||||
Granted | 399,102 | $ | 83.55 | ||||||||||||||
Vested | (134,865 | ) | $ | 51.85 | |||||||||||||
Forfeited | (92,004 | ) | $ | 63.95 | |||||||||||||
Unvested at December 31, 2014 | 483,580 | $ | 76.2 | ||||||||||||||
The total fair value of restricted stock units that vested during the years ended December 31, 2014, 2013, and 2012 was $7.0 million, $11.8 million, and $6.2 million, respectively. | |||||||||||||||||
Performance Share Awards | |||||||||||||||||
The Company granted performance share awards in 2011 to certain employees pursuant to the terms of the Medivation Equity Incentive Plan. During the year ended December 31, 2012, the compensation committee of the Company’s Board (“Compensation Committee”) certified the actual achievement of performance objectives related to certain performance share awards. As a result, during the year ended December 31, 2012, recipients earned a total of 83,332 shares of common stock that had a fair market value of $4.7 million. In December 2012, the Compensation Committee cancelled all remaining performance share awards covering an aggregate of 41,668 shares of common stock. There were no performance share awards outstanding under the Medivation Equity Incentive Plan at either December 31, 2014 or 2013. | |||||||||||||||||
Stock Appreciation Rights | |||||||||||||||||
Stock appreciation rights give the holder the right, upon exercise, to receive the difference between the market price per share of the Company’s common stock at the time of exercise and the exercise price of the stock appreciation right. The exercise price of the stock appreciation right is equal to the market price of the Company’s common stock at the date of the grant. | |||||||||||||||||
The following table summarizes stock appreciation rights activity for the year ended December 31, 2014: | |||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Rights | Average | Average | Intrinsic | ||||||||||||||
Exercise Price | Remaining | Value(1) | |||||||||||||||
Contractual | |||||||||||||||||
Term | |||||||||||||||||
(in years) | |||||||||||||||||
Outstanding at December 31, 2013 | 806,116 | $ | 23.98 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (97,994 | ) | $ | 23.5 | |||||||||||||
Forfeited | (19,894 | ) | $ | 23.82 | |||||||||||||
Outstanding at December 31, 2014 | 688,228 | $ | 24.05 | 6.96 | $ | 52 | |||||||||||
Vested and exercisable at December 31, 2014 | 501,740 | $ | 24.07 | 6.96 | $ | 37.9 | |||||||||||
-1 | The aggregate intrinsic value is calculated as the pre-tax difference between the weighted-average exercise price of the underlying awards and the closing price per share of $99.61 of the Company’s common stock on December 31, 2014. The calculation excludes any awards with an exercise price higher than the closing price of the Company’s common stock on December 31, 2014. The amounts are presented in millions. | ||||||||||||||||
Additional information regarding stock appreciation rights is set forth below (in thousands, except per share data): | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Intrinsic value of stock appreciation rights exercised | $ | 7,024 | $ | 1,090 | $ | — | |||||||||||
Fair value of stock appreciation rights vested (based on remeasurement-date fair value) | $ | 6,834 | $ | 9,955 | $ | 4,307 | |||||||||||
Weighted-average grant-date fair value per share of stock appreciation rights granted | $ | — | $ | — | $ | 14.33 | |||||||||||
Weighted-average remeasurement-date fair value per share of stock appreciation rights | $ | — | $ | — | $ | 32.94 | |||||||||||
No stock appreciation rights were granted during the years ended December 31, 2014 and 2013. | |||||||||||||||||
(c) Medivation Employee Stock Purchase Plan | |||||||||||||||||
The Medivation, Inc. 2013 Employee Stock Purchase Plan, or ESPP, which is stockholder approved, permits eligible employees to purchase shares of the Company’s common stock through payroll deductions at the lower of 85% of the fair market value of the common stock at the beginning or end of a purchase period. Eligible employee purchases are limited on an annual basis to $25,000 in accordance with Section 423 of the Internal Revenue Code. As of December 31, 2014, a total of 3,000,000 shares of the Company’s common stock were authorized for issuance under the ESPP, approximately 34,696 shares are reserved for issuance under the current purchase period, and 90,067 shares have been issued. At December 31, 2014, total employee withholdings for ESPP shares of $1.5 million were recorded in “accounts payable, accrued expenses and other current liabilities” on the consolidated balance sheet. | |||||||||||||||||
(d) Stock-Based Compensation | |||||||||||||||||
The Company estimates the fair value of stock options, stock appreciation rights, and ESPP shares using the Black-Scholes valuation model. The Company estimates expected volatility based on the historical price volatility of its common stock and implied volatility of its common stock inherent in the market price of publicly traded options in its common stock. The Company estimates the expected term of stock options and stock appreciation rights based on actual exercise experience and an assumption that unexercised options will remain outstanding for a period equal to the midpoint between the date the option vests in full and the contractual option termination date. The Company estimates the expected term of ESPP shares based on the duration of the applicable purchase period. The risk-free interest rate is based on the U.S. Treasury yield for a term consistent with the expected term of the awards at the time of grant. The Company uses a dividend yield of zero as it has no history or expectation of paying cash dividends on its common stock. | |||||||||||||||||
The Black-Scholes assumptions used to estimate the fair value of stock options and stock appreciation rights to employees and directors were as follows: | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Expected volatility | 60-65 | % | 64-75 | % | 66-73 | % | |||||||||||
Expected term (in years) | 5.0-5.5 | 5.2-5.5 | 5.3-5.5 | ||||||||||||||
Risk-free interest rate | 1.56-1.79 | % | 0.73-1.64 | % | 0.68-1.01 | % | |||||||||||
Expected dividend yield | — | — | — | ||||||||||||||
No significant stock options or stock appreciation rights were granted to consultants during the periods presented above. | |||||||||||||||||
The Black-Scholes assumptions used to estimate the fair value of shares issued under the ESPP on the commencement date of the offering period were as follows: | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected volatility | 43-53 | % | 45 | % | |||||||||||||
Expected term (in years) | 0.5 | 0.5 | |||||||||||||||
Risk-free interest rate | 0.04-0.06 | % | 0.04 | % | |||||||||||||
Expected dividend yield | — | — | |||||||||||||||
No ESPP offerings commenced during the year ended December 31, 2012. | |||||||||||||||||
Stock-based compensation expense was as follows: | |||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Stock-based compensation expense recognized as: | |||||||||||||||||
R&D expenses | $ | 17,913 | $ | 16,503 | $ | 11,998 | |||||||||||
SG&A expenses | 27,221 | 20,575 | 11,680 | ||||||||||||||
Total | $ | 45,134 | $ | 37,078 | $ | 23,678 | |||||||||||
Unrecognized stock-based compensation expense totaled $77.8 million at December 31, 2014, and is expected to be recognized over a weighted-average period of 2.34 years. | |||||||||||||||||
(e) Warrants | |||||||||||||||||
At December 31, 2014, an aggregate of 20,000 warrants to purchase shares of Medivation common stock at an exercise price of $6.93 per share were outstanding. These outstanding warrants expire in 2017. During the year ended December 31, 2013, an aggregate of 25,808 warrants to purchase shares of Medivation common stock at an exercise price of $0.78 per share were exercised. |
Retirement_Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2014 | |
Postemployment Benefits [Abstract] | |
Retirement Plan | NOTE 11. RETIREMENT PLAN |
The Company has a defined contribution savings plan, which qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code, or IRC. The 401(k) Plan is for the benefit of all participating employees and permits voluntary contributions by employees up to 100% of their annual pre-tax compensation limited by the Internal Revenue Service, or the IRS, imposed maximum contribution. The Company matches 100% of the first 3% of employee contributions and 50% of the next 2% of employee contributions. The Company’s contributions and the employee contributions are fully vested when contributed. The plan assets are held in trust and invested as directed by the plan participants. Employer matching contributions to the plan were $2.7 million, $1.9 million, and $1.3 million for the years ended December 31, 2014, 2013, and 2012, respectively. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Income Taxes | NOTE 12. INCOME TAXES | ||||||||||||
The Company’s income before income tax benefit was $260.2 million for the year ended December 31, 2014. The Company’s loss before income tax expense was $42.5 million and $41.3 million for the years ended December 31, 2013 and 2012, respectively. Since inception, the Company has only generated pre-tax income (losses) in the United States and has not generated any pre-tax income (losses) outside the United States. Income tax benefit (expense) for the periods presented consisted of the following: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current: | |||||||||||||
Federal | $ | (19,476 | ) | $ | (7 | ) | $ | (7 | ) | ||||
State | (1,496 | ) | (108 | ) | — | ||||||||
Total current | (20,972 | ) | (115 | ) | (7 | ) | |||||||
Deferred: | |||||||||||||
Federal | 36,917 | — | — | ||||||||||
State | 313 | — | — | ||||||||||
Total deferred | 37,230 | — | — | ||||||||||
Total income tax benefit (expense) | $ | 16,258 | $ | (115 | ) | $ | (7 | ) | |||||
During 2014, the Company reduced its current Federal and state taxes payable by $17.0 million related to excess tax benefits from stock-based compensation, offsetting additional paid-in capital. The Company has unrecorded Federal and state excess stock-based compensation tax benefits of $81.4 million (tax-effected) as of December 31, 2014. These amounts will be credited to additional paid-in-capital when such amounts reduce cash taxes payable. | |||||||||||||
A reconciliation of the statutory Federal income tax rate of 35% to the Company’s effective income tax rates is as follows: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Federal tax provision at statutory rate | 35 | % | 35 | % | 35 | % | |||||||
State taxes (net of Federal benefit) | 0.4 | % | 1.4 | % | 10.8 | % | |||||||
Orphan drug credit | — | — | 0.3 | % | |||||||||
Stock-based compensation | 0.1 | % | (0.2 | %) | 1.5 | % | |||||||
Non-deductible officer compensation | 0.1 | % | (1.8 | %) | (1.9 | %) | |||||||
Change in valuation allowance | (40.5 | %) | (52.1 | %) | (45.5 | %) | |||||||
Research and development credits | (1.5 | %) | 17.1 | % | — | ||||||||
Other | 0.2 | % | 0.3 | % | (0.2 | %) | |||||||
Effective income tax rate | (6.2 | %) | (0.3 | %) | 0 | % | |||||||
The Company recorded an income tax benefit of $16.3 million for the year ended December 31, 2014. The provision for income taxes was lower than the tax computed at the U.S. Federal statutory rate due primarily to utilization of net operating loss and tax credit carryforwards and the release of the valuation allowance on a portion of the Company’s net deferred tax assets. The income tax expense for the years ended December 31, 2013 and 2012 was not significant. The difference in the effective tax rate for 2013 as compared to 2012 is primarily attributable to state income tax expense. | |||||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the tax basis of assets and liabilities. Significant components of the Company’s deferred tax assets for Federal and state income taxes are follows: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Deferred revenue | $ | 1,005 | $ | 6,073 | |||||||||
Net operating loss carryforward | 9,100 | 80,620 | |||||||||||
Stock-based compensation | 26,000 | 21,257 | |||||||||||
Tax credits | 12,098 | 22,616 | |||||||||||
Intangible assets | 5,259 | — | |||||||||||
Accruals and reserves | 15,247 | 10,544 | |||||||||||
Total deferred tax assets | 68,709 | 141,110 | |||||||||||
Less: valuation allowance | (16,023 | ) | (120,807 | ) | |||||||||
Total net deferred tax assets | 52,686 | 20,303 | |||||||||||
Deferred tax liabilities | |||||||||||||
Depreciation | (2,741 | ) | (2,674 | ) | |||||||||
Convertible Notes | (12,792 | ) | (17,629 | ) | |||||||||
Total deferred tax liabilities | (15,533 | ) | (20,303 | ) | |||||||||
Net deferred tax assets | $ | 37,153 | $ | — | |||||||||
Recorded as: | |||||||||||||
Net current deferred tax assets | $ | 21,987 | $ | 5,541 | |||||||||
Net non-current deferred tax assets | 15,176 | — | |||||||||||
Net non-current deferred tax liabilities (included in “Other non-current liabilities”) | (10 | ) | (5,541 | ) | |||||||||
Net deferred tax assets | $ | 37,153 | $ | — | |||||||||
As of December 31, 2014, the Company had Federal net operating loss carryforwards for tax return purposes of approximately $160.6 million, which will expire in 2032 and 2033, if not utilized. Also, as of December 31, 2014, the Company had state net operating loss carryforwards for tax return purposes of approximately $240.4 million, which will expire at various dates between the years 2019 and 2033, if not utilized. | |||||||||||||
The Company has Federal research and development credit and Orphan Drug credit carryforwards of approximately $29.0 million and alternative minimum tax credits of approximately $4.0 million as of December 31, 2014. The Federal research tax credit carryforwards expire between the years 2024 through 2034, if not utilized. The alternative minimum tax credits do not expire. In addition, the Company has California research and development credit carryforwards of approximately $13.8 million as of December 31, 2014. The California research credits do not expire. On December 19, 2014 the Tax Increase Prevention Act of 2014 was signed, renewing the Federal research and development tax credit retroactive to January 1, 2014. ASC 740-10-45-15, “Income Taxes,” requires that the effects of a change in tax laws or rates be recognized in the period that includes the enactment date; consequently, the Company recognized the benefit of the Federal research and development credit during the year ended December 31, 2014. | |||||||||||||
Federal and state tax laws impose substantial restrictions on the utilization of net operating loss and credit carryforwards in the event of an “ownership change” for tax purposes, as defined in IRC Section 382. The Company completed Section 382 studies through December 31, 2013, and concluded that ownership changes occurred in 2004, 2007 and 2010. The ownership changes did not result in a reduction of its net operating loss or in its research and development credits expiring unused. If additional ownership changes occur, the utilization of net operating loss and credit carryforwards could be significantly reduced. | |||||||||||||
The valuation allowance decreased by $104.8 million in 2014, increased by $22.1 million in 2013 and decreased by $8.0 million in 2012. | |||||||||||||
The Company records a valuation allowance to reduce deferred tax assets to reflect the net amount that is more likely than not to be realized. Based upon the weight of available evidence at December 31, 2014, the Company determined that it was more likely than not that a portion of its deferred tax assets would be realizable and consequently released the valuation allowance against Federal and certain state net deferred tax assets and recorded a discrete tax benefit of $33.4 million during the fourth quarter of 2014. The decision to reverse a portion of the valuation allowance was made after management considered all available evidence, both positive and negative, including but not limited to the historical operating results, income or loss in recent periods, cumulative income in recent years, forecasted earnings, forecasted future taxable income, and significant risk and uncertainty related to forecasts. The release of the valuation allowance resulted in the recognition of certain deferred net tax assets and a decrease to income tax expense. | |||||||||||||
The following table summarizes activity related to the Company’s gross unrecognized tax positions: | |||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Balance as of beginning of year | $ | 5,955 | $ | 4,602 | $ | 3,936 | |||||||
Additions based on tax positions related to the current year | 6,439 | 702 | 400 | ||||||||||
Additions based on tax position related to prior year | — | 660 | 270 | ||||||||||
Decreases based on tax positions related to prior year | (27 | ) | (9 | ) | (4 | ) | |||||||
Balance as of end of year | $ | 12,367 | $ | 5,955 | $ | 4,602 | |||||||
Approximately $6.7 million of the total gross unrecognized tax benefits at December 31, 2014, if recognized, would affect the effective tax rate. The Company does not anticipate a material change in unrecognized tax benefits during the next twelve months. | |||||||||||||
Interest and/or penalties related to income tax matters are recognized as a component of income tax expense as incurred. The interest expense related to uncertain tax positions in the income tax expense line of the Company’s consolidated statements of operations was not significant during 2014, 2013, and 2012. Interest related to income tax matters accrued as of December 31, 2014 and 2013 was not significant. | |||||||||||||
As a result of the Company’s net operating loss and tax credit carryforwards, all of its tax years are subject to Federal and state examination. The Company’s Federal income tax returns were audited by the Internal Revenue Service for tax years 2008 and 2012 and resulted in no material adjustments. The Company’s 2009 and 2010 California income tax returns are currently under audit by the California tax authorities. The Company believes that it has adequately provided for any reasonable foreseeable outcomes related to its Federal and California income tax returns. | |||||||||||||
The future effective tax rate is subject to volatility and may be materially impacted by various internal and external factors. These factors may include, but are not limited to, the amount of income tax benefits and charges from: interpretations of existing tax laws; changes in tax laws and rates; future levels of research and development expenditures; changes in the mix of earnings in countries with differing statutory tax rates in which the Company may conduct business; changes in the valuation of deferred tax assets and liabilities; state income taxes; the tax impact of stock-based compensation; accounting for uncertain tax positions; closure of statute of limitations or settlement of tax audits; changes in estimates of prior years’ items; tax costs for acquisition-related items; changes in accounting standards; and overall levels of income before taxes. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value Measurements | NOTE 13. FAIR VALUE MEASUREMENTS | ||||||||||||||||
The Company follows ASC 820-10, “Fair Value Measurements and Disclosures,” which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows: | |||||||||||||||||
• | Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. | ||||||||||||||||
• | Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. | ||||||||||||||||
• | Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Unobservable inputs are used when little or no market data are available. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. | ||||||||||||||||
Financial assets and liabilities measured at fair value on a recurring basis are summarized below: | |||||||||||||||||
Fair value measurements using: | |||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||
December 31, 2014: | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 189,031 | $ | 189,031 | — | — | |||||||||||
Current liabilities: | |||||||||||||||||
Contingent consideration | $ | 10,000 | — | — | $ | 10,000 | |||||||||||
Long-term liabilities: | |||||||||||||||||
Contingent consideration | $ | 96,000 | — | — | $ | 96,000 | |||||||||||
December 31, 2013: | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 189,092 | $ | 189,092 | — | — | |||||||||||
The fair value of contingent consideration related to an acquisition was estimated utilizing a model with key assumptions that included estimated revenues or completion of certain development and sales milestone targets during the earn-out period, volatility, and estimated discount rates corresponding to the periods of expected payments. The estimated fair value of the contingent consideration liability is remeasured at each reporting period based upon increases or decreases in the probability of the contingent payments, as well as the discount rate. Changes in the estimated fair value of contingent consideration are reflected as non-cash adjustments to operating expenses in the consolidated statements of operations. Additional information regarding the acquisition is included in Note 4, “Business Acquisition.” | |||||||||||||||||
The following table presents the total balance of the Company’s other financial instruments that are not measured at fair value on a recurring basis. | |||||||||||||||||
Fair value measurements using: | |||||||||||||||||
Total Balance | Level 1 | Level 2 | Level 3 | ||||||||||||||
December 31, 2014: | |||||||||||||||||
Assets: | |||||||||||||||||
Bank deposits (included in “Cash and cash equivalents”) | $ | 313,646 | $ | 313,646 | — | — | |||||||||||
Liabilities: | |||||||||||||||||
Convertible Notes | $ | 359,219 | — | $ | 359,219 | — | |||||||||||
December 31, 2013: | |||||||||||||||||
Assets: | |||||||||||||||||
Bank deposits (included in “Cash and cash equivalents”) | $ | 39,696 | $ | 39,696 | — | — | |||||||||||
Liabilities: | |||||||||||||||||
Convertible Notes | $ | 277,145 | — | $ | 277,145 | — | |||||||||||
Due to their short-term maturities, the Company believes that the fair value of its bank deposits, receivable from collaboration partner, accounts payable, and accrued expenses and other current liabilities approximate their carrying value. | |||||||||||||||||
The estimated fair value of the Company’s Convertible Notes, including the equity component, was $496.8 million and $383.3 million at December 31, 2014 and 2013, respectively, and was determined using recent trading prices of the Convertible Notes. The fair value of the Convertible Notes included in the table above represents only the liability component of the Convertible Notes, because the equity component is included in stockholders’ equity on the consolidated balance sheets. For purposes of the table above, the fair value of the Convertible Notes was bifurcated between the debt and equity components in a ratio similar to the principal amounts of the Convertible Notes. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies | NOTE 14. COMMITMENTS AND CONTINGENCIES | ||||
(a) Leases | |||||
The Company leases approximately 142,000 square feet of office space, including 127,000 square feet of office space at its corporate headquarters, pursuant to operating lease agreements expiring at various dates through December 2019. The Company has the option to extend the lease term of its corporate headquarters for an additional five years. | |||||
Future operating lease obligations as of December 31, 2014, are as follows: | |||||
Years Ending December 31, | Operating | ||||
Leases | |||||
2015 | $ | 8,008 | |||
2016 | 8,170 | ||||
2017 | 8,334 | ||||
2018 | 8,499 | ||||
2019 | 4,431 | ||||
2020 and thereafter | — | ||||
Total | $ | 37,442 | |||
The Company is considered the “accounting owner” for a build-to-suit property and has recorded a build-to-suit lease obligation on its December 31, 2014 consolidated balance sheet. Additional information regarding the build-to-suit lease obligation is included in Note 7, “Build-To-Suit Lease Obligation.” | |||||
Expected future lease payments under the build-to-suit lease as of December 31, 2014 are as follows: | |||||
Years Ending December 31, | Expected Cash | ||||
Payments Under Build- | |||||
To-Suit Lease | |||||
Obligation | |||||
2015 | $ | 2,435 | |||
2016 | 2,538 | ||||
2017 | 2,614 | ||||
2018 | 2,692 | ||||
2019 | 2,773 | ||||
2020 and thereafter | 14,162 | ||||
Total minimum lease payments | $ | 27,214 | |||
Rent expense for the years ended December 31, 2014, 2013, and 2012 was $8.1 million, $5.2 million, and $4.6 million, respectively. In addition to the amounts included in the tables above, certain lease agreements also require the Company to make additional payments during the lease term for taxes, insurance, and other operating expenses. | |||||
(b) Restricted Cash | |||||
The Company had outstanding letters of credit collateralized by restricted cash totaling $11.8 million and $9.9 million at December 31, 2014 and 2013, respectively, to secure various operating leases. At December 31, 2014, $0.2 million and $11.6 million of restricted cash associated with these letters of credit were classified as current and long-term assets, respectively, on the consolidated balance sheets. At December 31, 2013, $9.9 million of restricted cash associated with these letters of credit was classified as long-term assets on the consolidated balance sheets. | |||||
(c) License Agreement with UCLA | |||||
Under an August 2005 license agreement with UCLA, the Company’s subsidiary Medivation Prostate Therapeutics, Inc. holds an exclusive worldwide license under several UCLA patents and patent applications covering XTANDI and related compounds. Under the Astellas Collaboration Agreement, the Company granted Astellas a sublicense under the patent rights licensed to it by UCLA. | |||||
The Company is required to pay UCLA (a) an annual maintenance fee, (b) $2.8 million in aggregate milestone payments upon achievement of certain development and regulatory milestone events with respect to XTANDI (all of which has been paid as of December 31, 2014), (c) ten percent of all Sublicensing Income, as defined in the agreement, which the Company earns under the Astellas Collaboration Agreement, and (d) a four percent royalty on global net sales of XTANDI, as defined. Under the terms of the Astellas Collaboration Agreement, the Company shares this royalty obligation equally with Astellas with respect to sales in the United States, and Astellas is responsible for this entire royalty obligation with respect to sales outside of the United States. The Company is currently involved in litigation with UCLA, which are discussed in the section titled “Litigation” below. | |||||
UCLA may terminate the agreement if the Company does not meet a general obligation to diligently proceed with the development, manufacturing and sale of licensed products, or if it commits any other uncured material breach of the agreement. The Company may terminate the agreement at any time upon advance written notice to UCLA. If neither party terminates the agreement early, the agreement will continue in force until the expiration of the last-to-expire patent on a country-by-country basis. | |||||
(d) Clinical Manufacturing Agreements | |||||
Manufacturing Services and Supply Agreement with CureTech Ltd. | |||||
Contemporaneous with the execution of the License Agreement with CureTech described in Note 4, “Business Acquisition,” the Company entered into a Manufacturing Services and Supply Agreement, or MSA, with CureTech pursuant to which CureTech will provide clinical trial supply of pidilizumab over a three year period. In accordance with the terms of the MSA, the Company paid CureTech an upfront fee of $3.0 million during the fourth quarter of 2014, which has been recorded in R&D expense in the consolidated statement of operations for the year ended December 31, 2014. The Company is required to pay CureTech a one-time milestone payment of $5.0 million upon the completion of the Manufacturing Technology Transfer, as defined. In accordance with the terms of the MSA, the Company is also responsible for providing Manufacturing Funding totaling up to $19.3 million for clinical trial materials of pidilizumab over the three-year term of the MSA. The Manufacturing Funding is contingent upon the successful achievement of the requirements set forth in the Manufacturing Plan, and any such amounts may be reduced or eliminated by the Company under the terms of the MSA. | |||||
The MSA shall commence on the Effective Date and, shall continue in force and effect until the earlier of (i) the termination of the License Agreement by the Company, or (ii) unless earlier terminated in accordance with the MSA, the third anniversary of the Effective Date. The MSA may be renewed by mutual agreement of the Parties for additional terms of one (1) year or such other time periods as the Parties may agree, upon at least six (6) months notice of such renewal. If CureTech fails to deliver minimum quantities of clinical product supply of the Licensed Molecule, the Company may terminate by written notice to CureTech any or all current and future manufacturing and supply obligations. | |||||
The Company considered the guidance in ASC 805-10-55-18, “Business Combinations—Determining What is Part of the Business Combination Transaction,” and concluded that the $5.0 million milestone payment to CureTech upon completion of the Manufacturing Technology Transfer is contingent consideration under the acquisition model and therefore is included in determining the acquisition date fair value of the consideration transferred to CureTech under the License Agreement described in Note 4, “Business Acquisition.” | |||||
Development and Manufacturing Services Agreement | |||||
During the fourth quarter of 2014, the Company entered into a Development and Manufacturing Services Agreement with a third party clinical manufacturing organization. The term of the agreement is for the longer of (i) a period of five (5) years or (ii) through the completion of the Services, as defined. Under the current statement of work under this agreement, the Company intends to transfer the current manufacturing process of pidilizumab from CureTech to this third party, further scale up and production of Phase 3 clinical trial material of pidilizumab from this entity’s manufacturing facility. The estimated total consideration under the current statement of work is approximately $14.8 million and is currently estimated to be completed in approximately 18 months. The Company will record payments pursuant to this statement of work as R&D expense in the consolidated statements of operations in the period in which the services have been performed. | |||||
(e) Research and License Agreement | |||||
In March 2014, the Company entered into a Research and License Agreement with a third party. Under the terms of the agreement, the Company paid a $12.0 million license and research agreement fee which is recorded in R&D expense in the consolidated statement of operations for the year ended December 31, 2014. The Company could also be required to pay potential future development and sales milestone payments, subject to the achievement of defined clinical and commercial events, and royalties based on sales. Such future milestone and royalty payments are contingent upon future events that may or may not materialize. | |||||
(f) Litigation | |||||
The Company is party to legal proceedings, investigations, and claims in the ordinary course of its business, including the matters described below. The Company records accruals for outstanding legal matters when it believes that it is both probable that a liability has been incurred and the amount of such liability can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in significant legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. To the extent new information is obtained and the Company’s views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company’s accrued liabilities would be recorded in the period in which such determination is made. In addition, in accordance with the relevant authoritative guidance, for matters for which the likelihood of material loss is at least reasonably possible, the Company provides disclosure of the possible loss or range of loss; however, if a reasonable estimate cannot be made, the Company will provide disclosure to that effect. Gain contingencies, if any, are recorded as a reduction of expense when they are realized. | |||||
In May 2011, the Company filed a lawsuit in San Francisco Superior Court against the Regents of the University of California, or the Regents, and one of its professors, alleging breach of contract and fraud claims, among others. The Company’s allegations in this lawsuit include that it has exclusive commercial rights to an investigational drug known as ARN-509, which is currently being developed by Aragon Pharmaceuticals, or Aragon. In August 2013, Johnson & Johnson and Aragon completed a transaction in which Johnson & Johnson acquired all ARN-509 assets owned by Aragon. ARN-509 is an investigational drug currently in development to treat the non-metastatic CRPC population. ARN-509 is a close structural analog of XTANDI, was developed contemporaneously with XTANDI in the same academic laboratories in which XTANDI was developed, and was purportedly licensed by the Regents to Aragon, a company co-founded by the heads of the academic laboratories in which XTANDI was developed. On February 9, 2012, the Company filed a Second Amended Complaint, adding as additional defendants a former Regents professor and Aragon. The Company seeks remedies including a declaration that it is the proper licensee of ARN-509, contractual remedies conferring to it exclusive patent license rights regarding ARN-509, and other equitable and monetary relief. On August 7, 2012, the Regents filed a cross-complaint against the Company seeking declaratory relief which, if granted, would require the Company to share with the Regents ten percent of any sales milestone payments it may receive under the Astellas Collaboration Agreement because such milestones constitute Sublicensing Income under the license agreement with UCLA. Under the Astellas Collaboration Agreement, the Company is eligible to receive up to $320.0 million in sales milestone payments. As of December 31, 2014, the Company has earned $75.0 million in sales milestones under the Astellas Collaboration Agreement, of which $50.0 million was earned in 2014 and $25.0 million was earned in 2013. The Company recorded expense of $5.0 million and $2.5 million during 2014, and 2013, respectively, within SG&A, representing 10% of the sales milestone amounts earned from Astellas. On September 18, 2012, the trial court approved a settlement agreement dismissing the former Regents professor who was added to the case on February 9, 2012. On December 20, 2012, and January 25, 2013, the Court granted summary judgment motions filed by defendants Regents and Aragon, resulting in dismissal of all claims against Regents and Aragon, but denied such motions filed by the remaining Regents professor. On April 15, 2013, the Company filed a Notice of Appeal seeking appeal of the judgment in favor of Aragon, which is now wholly-owned by Johnson & Johnson, and the briefing of that matter has been concluded. The bench trial of the Regent’s cross-complaint against the Company was conducted in July 2013, and on January 15, 2014, the Court entered a judgment in the cross-complaint in favor of Regents, which the Company appealed on February 13, 2014 along with the December 2012 summary judgment order in favor of Regents. The jury trial of the Company’s breach of contract and fraud claims against the remaining Regents professor was conducted in October and November 2013. On November 15, 2013, the jury rendered a verdict in the case, finding in favor of Medivation on the breach of contract claim, and in favor of the Regents professor on the fraud claims. On November 22, 2013, the Court entered judgment for the prevailing party Medivation on the contract claim, and entering judgment in favor of the Regents professor on the fraud claims. The Company’s notice of appeal of the judgment on the fraud claims was filed on February 13, 2014. On October 17, 2014, the briefing in Medivation’s appeal of the summary judgment order and cross-complaint order in favor of Regents, as well as its appeal of the judgment on the fraud claims against the Regents professor commenced. On October 24, 2014, the court of appeals issued an order consolidating all of these appeals for hearing and consideration purposes, so the appeals will be heard and considered together once the briefing is completed. | |||||
On April 11, 2014, UCLA filed a complaint against the Company in which UCLA alleges that Medivation and MPT have failed to pay UCLA ten percent of “Operating Profits” Medivation has received (and will continue to receive) from Astellas, as a result of the Astellas Collaboration Agreement, and that Medivation has breached its fiduciary duties to UCLA, as minority shareholder of MPT. On July 16, 2014, UCLA dismissed without prejudice its claim that Medivation breached its fiduciary duties to UCLA, as a minority shareholder of MPT. The Company denies UCLA’s allegations and intends to vigorously defend the litigation. | |||||
While the Company believes it has meritorious positions with respect to the claims asserted against it and intends to advance its positions in these lawsuits vigorously, including on appeal, the process of resolving matters through litigation or other means is inherently uncertain, and it is not possible to predict the ultimate resolution of any such proceeding. The actual costs of defending the Company’s position may be significant, and the Company may not prevail. |
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Selected Quarterly Financial Data | NOTE 15. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED) | ||||||||||||||||
The following table presents the unaudited quarterly results of operations of the Company for the years ended December 31, 2014 and 2013, respectively. The unaudited financial information is prepared on the same basis as the audited consolidated financial statements. The Company’s operating results for any quarter are not necessarily indicative of results for any future quarters or for a full year. | |||||||||||||||||
Quarters Ended | |||||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||||
2014:00:00 | |||||||||||||||||
Collaboration revenue | $ | 87,189 | $ | 148,090 | $ | 200,478 | $ | 274,730 | |||||||||
Operating expenses | $ | (95,654 | ) | $ | (93,139 | ) | $ | (108,595 | ) | $ | (131,253 | ) | |||||
Income (loss) from operations | $ | (8,465 | ) | $ | 54,951 | $ | 91,883 | $ | 143,477 | ||||||||
Net income (loss) | $ | (13,665 | ) | $ | 47,919 | $ | 77,993 | $ | 164,205 | ||||||||
Basic net income (loss) per common share | $ | (0.18 | ) | $ | 0.63 | $ | 1.01 | $ | 2.11 | ||||||||
Diluted net income (loss) per common share | $ | (0.18 | ) | $ | 0.6 | $ | 0.96 | $ | 1.96 | ||||||||
Weighted-average common shares used in the calculation of basic net income (loss) per common share | 76,245 | 76,577 | 77,056 | 77,822 | |||||||||||||
Weighted-average common shares used in the calculation of diluted net income (loss) per common share | 76,245 | 80,491 | 81,223 | 85,756 | |||||||||||||
2013:00:00 | |||||||||||||||||
Collaboration revenue | $ | 46,154 | $ | 70,149 | $ | 60,027 | $ | 96,612 | |||||||||
Operating expenses | $ | (68,476 | ) | $ | (70,095 | ) | $ | (68,025 | ) | $ | (88,587 | ) | |||||
Income (loss) from operations | $ | (22,322 | ) | $ | 54 | $ | (7,998 | ) | $ | 8,025 | |||||||
Net income (loss) | $ | (27,170 | ) | $ | (4,898 | ) | $ | (13,313 | ) | $ | 2,768 | ||||||
Basic net income (loss) per common share | $ | (0.36 | ) | $ | (0.07 | ) | $ | (0.18 | ) | $ | 0.04 | ||||||
Diluted net income (loss) per common share | $ | (0.36 | ) | $ | (0.07 | ) | $ | (0.18 | ) | $ | 0.03 | ||||||
Weighted-average common shares used in the calculation of basic net income (loss) per common share | 74,824 | 75,013 | 75,255 | 75,560 | |||||||||||||
Weighted-average common shares used in the calculation of diluted net income (loss) per common share | 74,824 | 75,013 | 75,255 | 79,912 | |||||||||||||
Net income (loss) per common share amounts for the 2014 and 2013 quarters and full years have been computed separately. Accordingly, quarterly amounts may not add to the annual amounts because of differences in the weighted average shares outstanding during each quarter due to the effect of potentially dilutive securities only in the periods in which such effect would be dilutive. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||
Dec. 31, 2014 | ||||
Accounting Policies [Abstract] | ||||
Basis of Presentation and Principles of Consolidation | (a) Basis of Presentation and Principles of Consolidation | |||
The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, and include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Company operates in one business segment. | ||||
All tabular disclosures of dollar and share amounts are presented in thousands unless otherwise indicated. All per share amounts are presented at their actual amounts. The number of shares issuable under the Amended and Restated 2004 Equity Incentive Award Plan, or the Medivation Equity Incentive Plan, and the Medivation, Inc. 2013 Employee Stock Purchase Plan, or ESPP, disclosed in Note 10, “Stockholders’ Equity,” are presented at their actual amounts. Amounts presented herein may not calculate or sum precisely due to rounding. | ||||
Certain prior period amounts have been reclassified to conform to the current year presentation. There was no effect on net income (loss) or stockholders’ equity related to these reclassifications. | ||||
Use of Estimates | (b) Use of Estimates | |||
The preparation of consolidated financial statements in accordance with U.S. GAAP requires that management make estimates and assumptions in certain circumstances that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Although management believes that these estimates are reasonable, actual future results could differ materially from those estimates. In addition, had different estimates and assumptions been used, the consolidated financial statements could have differed materially from what is presented. | ||||
Significant estimates and assumptions used by management principally relate to revenue recognition, including reliance on third party information, estimating the performance periods of the Company’s deliverables under collaboration agreements, and estimating the various deductions from gross sales to calculate net sales of XTANDI. Additionally, significant estimates and assumptions used by management include those related to business combination accounting, the Convertible Notes, determining whether the Company is the primary beneficiary of any variable interest entities, leases, taxes, research and development and other accruals, and share-based compensation. | ||||
Capital Structure | (c) Capital Structure | |||
On September 20, 2012, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, as amended, effecting an increase in the total number of authorized shares of capital stock of the Company from 51,000,000 to 86,000,000 and an increase in the total number of authorized shares of common stock of the Company from 50,000,000 to 85,000,000. | ||||
On September 21, 2012, the Company filed a Certificate of Amendment to its Amended and Restated Certificate of Incorporation, as amended, effecting (i) an increase in the total number of authorized shares of capital stock of the Company from 86,000,000 to 171,000,000, (ii) an increase in the total number of authorized shares of common stock of the Company from 85,000,000 to 170,000,000, and (iii) a two-for-one forward split of its common stock effective as of 5:00 p.m., Eastern Time, on September 21, 2012. | ||||
The Company issued approximately 37.0 million shares of its common stock as a result of the two-for-one forward stock split. The par value of the Company’s common stock remained unchanged at $0.01 per share. | ||||
Information regarding shares and amount of common stock, additional paid-in-capital, and net income (loss) per common share for all periods presented reflects the two-for-one forward split of the Company’s common stock. The number of shares of the Company’s common stock issuable upon exercise of outstanding stock options and vesting of other stock-based awards was proportionally increased, and the exercise price per share thereof was proportionally decreased, in accordance with the terms of the Medivation Equity Incentive Plan. Following the completion of the two-for-one forward stock split, the conversion rate of the Company’s Convertible Notes was adjusted to 19.5172 shares of common stock per $1,000 principal amount of the Convertible Notes, equivalent to a conversion price of approximately $51.24 per share of common stock. | ||||
Cash and Cash Equivalents | (d) Cash and Cash Equivalents | |||
Cash and cash equivalents are stated at cost, which approximates fair market value. The Company considers all highly liquid investments with a remaining maturity of three months or less at the time of acquisition to be cash equivalents. | ||||
Short-Term Investments | (e) Short-Term Investments | |||
The Company considers all highly liquid investments with a remaining maturity at the time of acquisition of more than three months but no longer than 12 months to be short-term investments. The Company classifies its short-term investments as available-for-sale securities and reports them at fair value with related unrealized gains and losses included as a component of stockholders’ equity. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in other income (expense), net, on the consolidated statements of operations. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in other income (expense), net. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in other income (expense), net. | ||||
Restricted Cash | (f) Restricted Cash | |||
Restricted cash represents certificates of deposit held in the Company’s name with a major financial institution to secure the Company’s contingent obligations under irrevocable letters of credit issued to certain of its lessors. | ||||
Fair Value of Financial Instruments | (g) Fair Value of Financial Instruments | |||
The estimated fair value of the Company’s cash equivalents is based on quoted market prices. The estimated fair value of contingent consideration is determined utilizing a model that considers the probability of achieving each milestone and an appropriate discount rate. The estimated fair value of the Company’s Convertible Notes is determined using recent trading prices of the Convertible Notes. Other financial instruments, including bank deposits, receivable from collaboration partner, accounts payable, accrued expenses, and other current liabilities are carried at cost, which the Company believes approximates fair value because of the short-term maturities of these instruments. | ||||
Concentration of Credit Risk | (h) Concentration of Credit Risk | |||
Financial instruments that potentially subject the Company to credit risk consist of cash, cash equivalents, short-term investments and receivable from collaboration partner. The Company’s current investment policy is to invest only in (a) debt securities issued by, or backed by the full faith and credit of, the U.S. government, (b) repurchase agreements that are fully collateralized by such debt securities, and (c) money market funds invested exclusively in the types of securities described in (a) and (b) above. Given this investment policy, the Company does not believe its exposure to credit risk with respect to the issuers of the securities in which it invests is material, and accordingly has no formal policy for mitigating such risk. The Company’s cash and cash equivalents are primarily invested in deposits and money market accounts with one major financial institution in the United States. Deposits in this financial institution may exceed the amount of insurance provided on such deposits. | ||||
Property and Equipment | (i) Property and Equipment | |||
Property and equipment are recorded at cost, less accumulated depreciation and amortization. Repairs and maintenance costs are expensed in the period incurred. Property and equipment is generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows: | ||||
Description | Estimated Useful Life | |||
Furniture and fixtures | 3-5 years | |||
Computer equipment and software | 3-5 years | |||
Laboratory equipment | 5 years | |||
Leasehold improvements are amortized over their estimated useful life or the related lease term, whichever is shorter. | ||||
Convertible Notes | (j) Convertible Notes | |||
The debt and equity components of the Company’s Convertible Notes have been bifurcated and accounted for separately based on the authoritative guidance in the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, 470-20, “Debt with Conversion and Other Options.” The debt component of the Convertible Notes, which excludes the associated equity conversion feature, was recorded at fair value on the issuance date. The equity component, representing the difference between the aggregate principal amount of the Convertible Notes and the fair value of the debt component, was recorded in additional paid-in capital on the consolidated balance sheet. The discounted carrying value of the Convertible Notes resulting from the bifurcation will be subsequently accreted to its principal amount through the recognition of non-cash interest expense. | ||||
Costs related to the issuance of the Convertible Notes, consisting primarily of investment banking, legal and other professional fees were allocated to the debt and equity components of the Company’s Convertible Notes in proportion to the allocation of the principal. Amounts allocated to the debt component were capitalized and are being amortized as non-cash interest expense using the effective yield method over the five-year contract term of the Convertible Notes. Amounts allocated to the equity component were recorded against additional paid-in capital. | ||||
Leases | (k) Leases | |||
At the inception of a lease, the Company evaluates the lease agreement to determine whether the lease is an operating, capital or build-to-suit lease using the criteria in ASC 840, “Leases.” | ||||
Certain lease agreements also require the Company to make additional payments for taxes, insurance, and other operating expenses incurred during the lease period, which are expensed as incurred. | ||||
Operating Leases | ||||
For operating leases, the Company recognizes rent expense on a straight-line basis over the lease term and records the difference between cash rent payments and the recognition of rent expense as a deferred liability. Where lease agreements contain rent escalation clauses, rent abatements and/or concessions, such as rent holidays and tenant improvement allowances, the Company applies them in the determination of straight-line expense over the lease term. | ||||
Capital Leases | ||||
Capital leases are recorded as an asset within property and equipment, net and as an obligation at an amount equal to the present value of the minimum lease payments during the lease term. The asset is generally amortized over its estimated useful life or the related lease term, whichever is shorter. Lease payments under capital leases are recognized as a reduction of the capital lease obligation and interest expense. | ||||
Build-to-Suit Leases | ||||
In certain lease arrangements, the Company is involved in the construction of the building. To the extent the Company is involved with the structural improvements of the construction project or takes construction risk prior to the commencement of a lease, ASC 840-40, “Leases – Sale-Leaseback Transactions (Subsection 05-5),” requires the Company to be considered the owner for accounting purposes of these types of projects during the construction period. Therefore, the Company records an asset in property and equipment, net on the consolidated balance sheets, including capitalized interest costs, for the replacement cost of the Company’s portion of the pre-existing building plus the amount of estimated structural construction costs incurred by the landlord and the Company as of the balance sheet date. The Company records a corresponding build-to-suit lease obligation on its consolidated balance sheets representing the amounts paid by the lessor. | ||||
Once construction is complete, the Company considers the requirements for sale-leaseback accounting treatment, including evaluating whether all risks of ownership have been transferred back to the landlord, as evidenced by a lack of continuing involvement in the leased property. If the arrangement does not qualify for sale-leaseback accounting treatment, the building asset remains on the Company’s consolidated balance sheets at its historical cost, and such asset is depreciated over its estimated useful life. The Company bifurcates its lease payments into a portion allocated to the building and a portion allocated to the parcel of land on which the building has been built. The portion of the lease payments allocated to the land is treated for accounting purposes as operating lease payments, and therefore is recorded as rent expense in the consolidated statements of operations. The portion of the lease payments allocated to the building is further bifurcated into a portion allocated to interest expense and a portion allocated to reduce the build-to-suit lease obligation. The interest rate used for the build-to-suit lease obligation represents the Company’s estimated incremental borrowing rate, adjusted to reduce any built in loss. The initial recording of these assets and liabilities is classified as non-cash investing and financing items, respectively, for purposes of the consolidated statements of cash flows. | ||||
Business Combinations | (l) Business Combinations | |||
Business combinations are accounted for under the acquisition method of accounting. The purchase price, including the fair value of any contingent consideration, is allocated between tangible and intangible assets acquired and liabilities assumed from the acquired business based on their estimated fair values, with the residual of the purchase price recorded as goodwill. Transaction costs are expensed as incurred. | ||||
Contingent Consideration | ||||
The Company determines the fair value of contingent consideration payable at the acquisition date using a probability-based income approach utilizing an appropriate discount rate. Each reporting period thereafter, the Company re-measures the contingent consideration and records increases or decreases in their fair value as non-cash adjustments in the consolidated statements of operations. Changes in the fair value of contingent consideration payable can result from adjustments to the estimated probability and assumed timing of achieving the underlying milestones, as well as from changes to the discount rates and periods. | ||||
In-Process Research and Development | ||||
In-process research and development, or IPR&D, represents the fair value assigned to incomplete research projects that the Company acquires through business combinations which, at the time of acquisition, have not reached technological feasibility. The amounts are capitalized and accounted for as indefinite-lived intangible assets, subject to impairment testing until completion or abandonment of the projects. Upon successful completion of each project, the Company will make a determination as to the then useful life of the intangible asset, generally determined by the period in which the substantial majority of the cash flows are expected to be generated, and begin amortization over that period. The Company tests IPR&D for impairment at least annually, or more frequently if impairment indicators exist, by first assessing qualitative factors to determine whether it is more likely than not that the fair value of the IPR&D is less than its carrying amount. If the Company concludes it is more likely than not that the fair value is less than the carrying amount, a quantitative test that compares the fair value of the IPR&D with its carrying value is performed. If the fair value is less than the carrying amount, a non-cash impairment change is recognized in the consolidated statements of operations. | ||||
Goodwill | ||||
Goodwill represents the excess of the consideration transferred over the fair value of net assets of businesses acquired. Goodwill is assigned to reporting units and evaluated for impairment on at least an annual basis, or more frequently if impairment indicators exist. The impairment test for goodwill uses a two-step approach, which is performed at the entity level as the Company has one reporting unit. Step 1 compares the fair value of the reporting unit to its carrying value including goodwill. If the carrying value exceeds the fair value, there is potential impairment and Step 2 must be performed. Step 2 compares the carrying value of the reporting unit’s goodwill to its implied fair value (e.g., the fair value of the reporting unit less the fair value of the unit’s assets and liabilities, including identifiable intangible assets). If the carrying value of goodwill exceeds its implied fair value, the excess is recorded as a non-cash impairment charge in the consolidated statement of operations. | ||||
Litigation | (m) Litigation | |||
The Company is party to legal proceedings, investigations, and claims in the ordinary course of its business. The Company records accruals for outstanding legal matters when it believes that it is both probable that a liability has been incurred and the amount of such liability can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in significant legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. To the extent new information is obtained and the Company’s views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company’s accrued liabilities would be recorded in the period in which such determination is made. In addition, in accordance with the relevant authoritative guidance, for matters for which the likelihood of material loss is at least reasonably possible, the Company provides disclosure of the possible loss or range of loss; however, if a reasonable estimate cannot be made, the Company will provide disclosure to that effect. Gain contingencies, if any, are recorded as a reduction of expense when they are realized. | ||||
Collaboration Agreement Payments | (n) Collaboration Agreement Payments | |||
The Company accounts for the various payment flows under its collaboration agreement with Astellas, or the Astellas Collaboration Agreement, and its former collaboration agreement with Pfizer in a consistent manner, as follows: | ||||
Estimated Performance Periods | ||||
Both the Astellas Collaboration Agreement and the former collaboration agreement with Pfizer contain multiple elements and deliverables, and required evaluation pursuant to ASC 605-25, “Revenue Recognition—Multiple-Element Arrangements.” The Company concluded that it had multiple deliverables under both collaboration agreements, including deliverables relating to grants of technology licenses, and performance of manufacturing, regulatory and clinical development activities in the United States. In the case of the Astellas Collaboration Agreement, the period in which the Company performed its deliverables began in the fourth quarter of 2009 and is currently estimated to conclude in the second quarter of 2015 upon completion of the Company’s remaining performance obligations. In the case of the former collaboration agreement with Pfizer, the period in which the Company performed its deliverables began in the fourth quarter of 2008 and concluded in the third quarter of 2012 upon completion of the Company’s performance obligations. The Company also concluded that its deliverables under each collaboration agreement should be accounted for as a single unit under ASC 605-25. | ||||
Estimation of the performance periods of the Company’s deliverables requires the use of management’s judgment. Significant factors considered in management’s evaluation of the estimated performance periods include, but are not limited to, the Company’s experience, along with its collaboration partners’ experience, in conducting manufacturing, clinical development and regulatory activities. The Company reviews the estimated duration of its performance periods under its collaboration agreements on a quarterly basis and makes any appropriate adjustments on a prospective basis. Future changes in estimates of the performance period under its collaboration agreements could impact the timing of future revenue recognition. | ||||
Upfront Payments | ||||
The Company received non-refundable, upfront cash payments of $110.0 million and $225.0 million under the Astellas Collaboration Agreement and its former collaboration agreement with Pfizer, respectively. The Company recognizes these payments as collaboration revenue on a straight-line basis over the applicable estimated performance period. | ||||
Milestone Payments | ||||
The Company is eligible to receive milestone payments under the Astellas Collaboration Agreement based on achievement of specified development, regulatory and commercial events. Management evaluated the nature of the events triggering these contingent payments, and concluded that these events fall into two categories: (a) events which involve the performance of the Company’s obligations under the Astellas Collaboration Agreement, and (b) events which do not involve the performance of the Company’s obligations under the Astellas Collaboration Agreement. | ||||
The former category of milestone payments consist of those triggered by development and regulatory activities in the United States and by the acceptance for review of marketing applications in Europe and Japan. Management concluded that each of these payments, with one exception, constitute substantive milestone payments. This conclusion was based primarily on the facts that (i) each triggering event represents a specific outcome that can be achieved only through successful performance by the Company of one or more of its deliverables, (ii) achievement of each triggering event was subject to inherent risk and uncertainty and would result in additional payments becoming due to the Company, (iii) each of the milestone payments is non-refundable, (iv) substantial effort is required to complete each milestone, (v) the amount of each milestone payment is reasonable in relation to the value created in achieving the milestone, (vi) a substantial amount of time is expected to pass between the upfront payment and the potential milestone payments, and (vii) the milestone payments relate solely to past performance. Based on the foregoing, the Company recognizes any revenue from these milestone payments in the period in which the underlying triggering event occurs. The one exception is the milestone payment for initiation of the Phase 3 PREVAIL trial, an event which management deemed to be reasonably assured at the inception of the Astellas collaboration. This milestone payment was triggered in the third quarter of 2010, and the Company is recognizing the milestone payment as revenue on a straight-line basis over the estimated remaining performance period of the Astellas Collaboration Agreement. | ||||
The latter category of milestone payments consists of those triggered by potential marketing approvals in Europe and Japan, and commercial activities globally, all of which are areas in which the Company has no pertinent contractual responsibilities under the Astellas Collaboration Agreement. Management concluded that these payments constitute contingent revenues and thus recognizes them as revenue in the period in which the contingency is met. | ||||
Royalties and Profit (Loss) Sharing Payments | ||||
Under the Astellas Collaboration Agreement, the Company shares equally profits (losses) on sales of products in the United States and receives royalties on sales of products outside the United States. The Company recognizes revenue from these events based on the revenue recognition criteria set forth in ASC 605-10-25-1, “Revenue Recognition.” Based on those criteria, the Company considers these payments to be contingent revenues, and recognizes them as revenue in the period in which the applicable contingency is resolved. | ||||
Cost-Sharing Payments | ||||
Under both the Astellas Collaboration Agreement and the former collaboration agreement with Pfizer, the Company and its collaboration partners share certain development and commercialization costs (including in the case of the Astellas Collaboration Agreement, cost of goods sold and the royalty on net sales payable to The Regents of the University of California, or UCLA, under the Company’s license agreement with UCLA) in the United States. The parties make quarterly cost-sharing payments to one another in amounts necessary to ensure that each party bears its contractual share of the overall shared U.S. development and commercialization costs incurred. The Company’s policy is to account for cost-sharing payments to its collaboration partners as increases in expense in its consolidated statements of operations, while cost-sharing payments by its collaboration partners to the Company are accounted for as reductions in expense. Cost-sharing payments related to development activities and commercialization activities are recorded in research and development expenses, or R&D expenses, and selling, general and administrative expenses, or SG&A expenses, respectively. | ||||
Reliance on Third-Party Information | ||||
Under the Astellas Collaboration Agreement, Astellas records all XTANDI sales globally and has operational responsibility for certain development and commercialization activities in the United States for which the Company shares costs. Thus, Astellas has control over certain XTANDI-related financial information needed to prepare the Company’s financial statements and related disclosures, including information regarding gross sales, net sales, gross-to-net sales deductions, including estimates of potential future product returns, and shared U.S. development and commercialization costs incurred by Astellas. The Company is dependent on Astellas to provide it with such information in a timely and accurate manner for use in preparing the Company’s consolidated financial statements and disclosures. Certain of this information provided by Astellas is subject to estimates, including estimates used in determining gross-to-net revenue deductions such as payor mix, discounts (including legally mandated discounts to government entities), returns, chargebacks, rebates, and participation levels in patient assistance programs, and estimates regarding accrued development and commercialization costs incurred by Astellas. Under the Astellas Collaboration Agreement, the deductions from gross sales used to derive net sales of XTANDI are determined in a manner consistent with GAAP, consistently applied. Should Astellas fail to provide the Company with any such financial information in a timely manner, or should any such financial information provided by Astellas, or any of the estimates upon which such financial information was based, prove to be inaccurate, the Company could be required to record adjustments in future periods. | ||||
Research and Development Expenses and Accruals | (o) Research and Development Expenses and Accruals | |||
R&D expenses are charged to expense as incurred unless there is an alternative future use in other research and development projects or otherwise. R&D expenses are comprised of costs incurred in performing research and development activities, including personnel-related costs, share-based compensation, and facilities-related overhead, outside contracted services including clinical trial costs, manufacturing and process development costs for both clinical and pre-clinical materials, research costs, upfront and development milestone payments under license agreements and other consulting services. Non-refundable advance payment for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. In instances where the Company enters into agreements with third parties to provide research and development services to it, costs are expensed as services are performed. Amounts due under such arrangements may be either fixed fee or fee for service, and may include upfront payments, monthly payments, and payments upon the completion of milestones or receipt of deliverables. | ||||
The Company’s accruals for clinical trials and other research and development activities are based on estimates of the services received and efforts expended pursuant to contracts with numerous clinical trial centers, contract research organizations and clinical manufacturing organizations. In the normal course of business the Company contracts with third parties to perform various research and development activities in the on-going development of its product candidates, including, without limitation, third party clinical trial centers and contract research organizations that perform and administer the Company’s clinical trials on its behalf and clinical manufacturing organizations that manufacture clinical trial materials. The financial terms of these agreements are subject to negotiation and vary from contract to contract and may result in uneven payment flows. Payments under these agreements depend on factors such as the achievement of certain events, the successful enrollment of patients, and the completion of portions of the clinical trial or similar conditions. The objective of the Company’s accrual policy is to match the recording of expenses in its consolidated financial statements to the actual services received and efforts expended. As such, expense accruals related to clinical trials and other research and development activities are recognized based on the Company’s estimate of the degree of completion of the event or events specified in the specific agreement. | ||||
The Company’s accrual estimates are dependent upon the timeliness and accuracy of data provided by third parties regarding the status and cost of studies, and may not match the actual services performed by the organizations. During the course of a clinical trial, the Company adjusts its rate of clinical trial expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued clinical trial expenses as of each balance sheet date based on facts and circumstances known at that time. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in the Company reporting amounts that are too high or too low for any particular period. This could result in adjustment to the Company’s R&D expense in future periods. The Company has had no significant adjustments to previously recorded research and development amounts. | ||||
Stock-Based Compensation | (p) Stock-Based Compensation | |||
The Company has granted stock options, restricted stock units, performance share awards, and stock appreciation rights pursuant to the terms of the Medivation Equity Incentive Plan and ESPP shares pursuant to the ESPP. The Company accounts for stock-based compensation awards to employees and directors and ESPP shares in accordance with ASC 718, “Stock Compensation,” and in the case of awards to consultants in accordance with ASC 505-50, “Equity-Based Payments to Non-Employees.” | ||||
Stock-based compensation expense associated with stock options is based on the estimated grant date fair value using the Black-Scholes valuation model, which requires the use of subjective assumptions related to the expected stock price volatility, option term, risk-free interest rate and dividend yield. The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest. | ||||
Stock-based compensation expense associated with restricted stock units is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date. For restricted stock units, the Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest. Performance share awards allow the recipients of such awards to earn fully vested shares of the Company’s common stock upon the achievement of pre-established performance objectives. Stock-based compensation expense associated with performance share awards is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date, and is recognized when the performance objective is expected to be achieved. The Company evaluates on a quarterly basis the probability of achieving the performance criteria. The cumulative effect on current and prior periods of a change in the estimated number of performance share awards expected to be earned is recognized as compensation expense or as reduction of previously recognized compensation expense in the period of the revised estimate. | ||||
The fair value of stock-settled and cash-settled stock appreciation rights is initially measured on the grant date using the Black-Scholes valuation model, which requires the use of subjective assumptions related to the expected stock price volatility, term, risk-free interest rate and dividend yield. Similar to stock options, compensation expense for stock-settled stock appreciation rights is recognized over the vesting period of the awards that are ultimately expected to vest based on the grant-date fair value. Cash-settled stock appreciation rights are liability-classified awards for which compensation expense and the liability are remeasured at each reporting date through the date of settlement based on the portion of the requisite service period rendered. Upon the conversion of cash-settled stock appreciation rights to stock-settled stock appreciation rights, the awards are remeasured using the then-current Black-Scholes assumptions and the remeasured liability is reclassified to additional paid-in capital. | ||||
The Company accounts for the ESPP as a compensatory plan. The fair value of each purchase under the Company’s ESPP is estimated on the date of the beginning of the offering period using the Black-Scholes valuation model, which requires the use of subjective assumptions related to the expected stock price volatility, term, risk-free interest rate and dividend yield. The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest. | ||||
Equity awards to consultants are typically remeasured at fair value at each reporting date until the awards vest in accordance with ASC 505-50. | ||||
The Company applies a forfeiture rate when determining stock-based compensation expense to account for an estimate of the granted awards not expected to vest. If actual forfeitures differ from the expected rate, the Company may be required to make additional adjustments to compensation expense in future periods. | ||||
The Black-Scholes valuation model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable, characteristics not present in the Company’s stock options, stock appreciation rights, or ESPP shares. If the model permitted consideration of the unique characteristics of employee stock options, stock appreciation rights, and ESPP shares, the resulting estimate of fair value of the stock options, stock appreciation rights, and ESPP shares could be different. In addition, if the Company had made different assumptions and estimates for use in the Black-Scholes valuation model, the amount of recognized and to be recognized stock-based compensation expense could have been different. | ||||
Promotional and Advertising Costs | (q) Promotional and Advertising Costs | |||
Promotional and advertising costs are classified as SG&A expenses and are expensed as incurred. Promotional and advertising expenses consist primarily of the costs of designing, producing and distributing materials promoting the Company and its products, including its corporate website. Under both the Astellas Collaboration Agreement and the former collaboration agreement with Pfizer, the Company and its collaboration partners share certain commercialization costs, including certain promotional and advertising costs, in the United States. See Note 3, “Collaboration Agreements,” for additional information regarding cost-sharing with its collaboration partners. | ||||
Income Taxes | (r) Income Taxes | |||
The Company accounts for income taxes using an asset and liability approach in accordance with the guidance provided by ASC 740-10, “Accounting for Income Taxes.” ASC 740-10 requires the recognition of taxes payable or refundable for the current year and deferred tax assets and liabilities for the future tax consequences of events that have been recognized in the consolidated financial statements or tax returns. The measurement of current and deferred tax assets and liabilities is based on provisions of the enacted tax law; the effects of future changes in tax laws or rates are not anticipated. The measurement of deferred tax assets is reduced, if necessary, by the amount of any tax benefits that, based on available evidence, is not expected to be realized. | ||||
The Company records a valuation allowance to reduce its deferred tax assets to reflect the net amount that it believes is more likely than not to be realized. Realization of the deferred tax assets is dependent upon the generation of future taxable income, the amount and timing of which are uncertain. Based upon the weight of available evidence at December 31, 2014, the Company determined that it was more likely than not that a portion of its deferred tax assets would be realizable and consequently released the valuation allowance against Federal and certain state net deferred tax assets during the fourth quarter of 2014 and recorded a discrete tax benefit of $33.4 million during the fourth quarter of 2014. The decision to reverse a portion of the valuation allowance was made after management considered all available evidence, both positive and negative, including but not limited to the Company’s historical operating results, income or loss in recent periods, cumulative income in recent years, forecasted earnings, forecasted future taxable income, and significant risk and uncertainty related to forecasts. The release of the valuation allowance resulted in the recognition of certain deferred tax assets and a decrease to income tax expense. | ||||
Significant judgment in required in evaluating the Company’s uncertain income tax positions based on the guidance in ASC 740-10-25, “Accounting for Uncertainty in Income Taxes.” The Company recognizes a tax benefit from an uncertain tax position only if it is more likely than not that the position will be sustained upon examination by tax authorities. The tax benefit recognized in the financial statements on a particular tax position is measured on the largest benefit that is more likely than not to be realized. The Company evaluates uncertain tax positions on a quarterly basis and adjusts the liability for changes in facts and circumstances, such as new regulations or interpretations by the taxing authorities, new information obtained during a tax examination, significant amendment to an existing tax law, or resolution of an examination. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the income tax provision in the period in which such determination is made. The resolution of our uncertain income tax positions is dependent on uncontrollable factors such as law changes, new case law, and the willingness of the income tax authorities to settle, including the timing thereof and other factors. Although The Company does not anticipate significant changes to its uncertain income tax positions in the next twelve months, items outside of the Company’s control could cause the uncertain income tax positions to change in the future, which would be recorded in the consolidated statements of operations. Interest and/or penalties related to income tax matters are recognized as a component of income tax expense as incurred. | ||||
New Accounting Pronouncements | (s) New Accounting Pronouncements | |||
In July 2013, the FASB issued ASU No. 2013-11, “Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists.” This update clarifies that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss, or NOL, carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. In situations where an NOL carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction or the tax law of the jurisdiction does not require, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The Company adopted this amended guidance prospectively as of January 1, 2014. The adoption of this amended guidance did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. | ||||
In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU 2014-09, “Revenue from Contracts with Customers” (Topic 606), a comprehensive new revenue recognition standard that will supersede the existing revenue recognition guidance. The new accounting guidance creates a framework by which an entity will allocate the transaction price to separate performance obligations and recognize revenue when (or as) each performance obligation is satisfied. Under the new standard, entities will be required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for either “full retrospective” adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch-up as of the earliest period presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch-up as of the current period. The accounting standard will be effective for reporting periods beginning after December 15, 2016. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures. | ||||
Out-of-Period Adjustment | (t) Out-of-Period Adjustment | |||
In the first quarter of 2013, the Company recorded an out-of-period correcting adjustment that increased operating expenses and net loss by $3.6 million for the three months ended March 31, 2013. Management concluded that the adjustment is not material to the full year 2013 results or any previously reported financial statements. | ||||
Net Income (Loss) Per Common Share | The computation of basic net income (loss) per common share is based on the weighted- average number of common shares outstanding during each period. The computation of diluted net income (loss) per common share is based on the weighted-average number of common shares outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, restricted stock units, performance share awards, stock appreciation rights, ESPP shares, warrants, and shares issuable upon conversion of convertible debt. | |||
In periods in which the Company reports net income, the Company uses the “if-converted” method in calculating the diluted net income per common share effect of the assumed conversion of the Convertible Notes. Under the “if-converted” method, interest expense, net of tax, related to the Convertible Notes is added back to net income, and the Convertible Notes are assumed to have been converted into common shares at the beginning of the period (or issuance date) in periods in which there would have been a dilutive effect. The Convertible Notes can be settled in common stock, cash, or a combination thereof, at the Company’s election. During periods of net income, the Company’s intent and ability to settle the Convertible Notes in cash could impact the computation of diluted net income per common share. | ||||
Fair Value Measurements | The Company follows ASC 820-10, “Fair Value Measurements and Disclosures,” which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows: | |||
• | Level 1—Inputs are unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. | |||
• | Level 2—Inputs (other than quoted prices included in Level 1) are either directly or indirectly observable for the asset or liability through correlation with market data at the measurement date and for the duration of the instrument’s anticipated life. | |||
• | Level 3—Inputs reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Unobservable inputs are used when little or no market data are available. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Accounting Policies [Abstract] | |||
Estimated Useful Lives of Property and Equipment | Property and equipment is generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows: | ||
Description | Estimated Useful Life | ||
Furniture and fixtures | 3-5 years | ||
Computer equipment and software | 3-5 years | ||
Laboratory equipment | 5 years |
Collaboration_Agreements_Table
Collaboration Agreements (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Schedule of Potential Milestone Payments in Sales | The triggering events for the sales milestone payments are as follows: | ||||||||||||
Annual Global Net Sales in a Calendar Year | Milestone Payment(1) | ||||||||||||
$400 million | -2 | ||||||||||||
$800 million | -3 | ||||||||||||
$1.2 billion | $70 million | ||||||||||||
$1.6 billion | $175 million | ||||||||||||
-1 | Each milestone shall only be paid once during the term of the Astellas Collaboration Agreement. | ||||||||||||
-2 | This milestone totaling $25.0 million was earned and recognized as collaboration revenue during the fourth quarter of 2013 and payment was received in the first quarter of 2014. | ||||||||||||
-3 | This milestone totaling $50.0 million was earned and recognized as collaboration revenue during the fourth quarter of 2014 and is included in receivable from collaboration partner on the consolidated balance sheet at December 31, 2014. Payment was received during the first quarter of 2015. | ||||||||||||
Schedule of Collaboration Revenue | Collaboration revenue was as follows: | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Collaboration revenue: | |||||||||||||
Related to U.S. XTANDI sales | $ | 339,902 | $ | 196,208 | $ | 35,752 | |||||||
Related to ex-U.S. XTANDI sales | 49,476 | 6,338 | — | ||||||||||
Related to upfront and milestone payments | 321,109 | 70,396 | 145,944 | ||||||||||
Total | $ | 710,487 | $ | 272,942 | $ | 181,696 | |||||||
Schedule of Collaboration Revenue Related to U.S. XTANDI Sales | Collaboration revenue related to U.S. XTANDI sales was as follows: | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
U.S. XTANDI sales (as reported by Astellas) | $ | 679,805 | $ | 392,415 | $ | 71,504 | |||||||
Shared U.S. development and commercialization costs | (323,730 | ) | (241,106 | ) | (88,908 | ) | |||||||
Pre-tax U.S. profit (loss) | $ | 356,075 | $ | 151,309 | $ | (17,404 | ) | ||||||
Medivation’s share of pre-tax U.S. profit (loss) | $ | 178,037 | $ | 75,655 | $ | (8,702 | ) | ||||||
Reimbursement of Medivation’s share of shared U.S. costs | 161,865 | 120,553 | 44,454 | ||||||||||
Collaboration revenue related to U.S. XTANDI sales | $ | 339,902 | $ | 196,208 | $ | 35,752 | |||||||
Schedule of Collaboration Revenue Related to Upfront and Milestone Payments | Collaboration revenue related to upfront and milestone payments was as follows: | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
From Astellas: | |||||||||||||
Development milestones earned | $ | 257,000 | $ | 20,000 | $ | 45,000 | |||||||
Sales milestones earned | 50,000 | 25,000 | — | ||||||||||
Amortization of deferred upfront and development milestones | 14,109 | 25,396 | 28,914 | ||||||||||
321,109 | 70,396 | 73,914 | |||||||||||
From Pfizer: | |||||||||||||
Amortization of deferred upfront and development milestones | — | — | 72,030 | ||||||||||
Total | $ | 321,109 | $ | 70,396 | $ | 145,944 | |||||||
Development and Commercialization Cost-Sharing Payments | The following table summarizes the reductions in R&D expenses related to development cost sharing payments: | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Development cost-sharing payments from Astellas | $ | 63,479 | $ | 46,594 | $ | 47,473 | |||||||
Development cost-sharing payments from Pfizer | — | — | 1,740 | ||||||||||
Total | $ | 63,479 | $ | 46,594 | $ | 49,213 | |||||||
The following table summarizes the (increases) reductions in SG&A expenses related to commercialization cost-sharing payments: | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Commercialization cost-sharing payments to Astellas | $ | (36,094 | ) | $ | (11,973 | ) | $ | (3,437 | ) | ||||
Commercialization cost-sharing payments from Pfizer | — | — | 9 | ||||||||||
Total | $ | (36,094 | ) | $ | (11,973 | ) | $ | (3,428 | ) | ||||
Business_Acquisition_Tables
Business Acquisition (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Business Combinations [Abstract] | |||||
Summary of Final Allocation of Purchase Consideration, Including Contingent Consideration Payable, Based on Fair Value | The following table presents the final allocation of the purchase consideration for the CureTech acquisition, including the contingent consideration payable, based on fair value. | ||||
Purchase consideration: | |||||
Cash | $ | 5,000 | |||
Acquisition-date fair value of contingent consideration | 106,000 | ||||
Total purchase consideration | $ | 111,000 | |||
Allocation of the purchase consideration: | |||||
Assets: | |||||
Identifiable intangible assets- IPR&D | $ | 101,000 | |||
Net identifiable assets acquired | 101,000 | ||||
Goodwill | 10,000 | ||||
Net assets acquired | $ | 111,000 | |||
Net_Income_Loss_Per_Common_Sha1
Net Income (Loss) Per Common Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Earnings Per Share [Abstract] | |||||||||||||
Calculation of Diluted Net Income (Loss) Per Common Share | The following table reconciles the numerator and denominator used to calculate diluted net income (loss) per common share: | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Numerator: | |||||||||||||
Net income (loss) | $ | 276,452 | $ | (42,613 | ) | $ | (41,257 | ) | |||||
Interest expense on convertible notes, net of tax | 14,030 | — | — | ||||||||||
Numerator for diluted net income (loss) per common share calculation | $ | 290,482 | $ | (42,613 | ) | $ | (41,257 | ) | |||||
Denominator: | |||||||||||||
Weighted-average common shares, basic | 76,929 | 75,165 | 73,480 | ||||||||||
Dilutive effect of common stock equivalents | 8,071 | — | — | ||||||||||
Weighted-average common shares, diluted | 85,000 | 75,165 | 73,480 | ||||||||||
Net income (loss) per common share: | |||||||||||||
Basic net income (loss) per common share | $ | 3.59 | $ | (0.57 | ) | $ | (0.56 | ) | |||||
Diluted net income (loss) per common share | $ | 3.42 | $ | (0.57 | ) | $ | (0.56 | ) | |||||
Convertible_Senior_Notes_Due_21
Convertible Senior Notes Due 2017 (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Debt Disclosure [Abstract] | |||||||||||||
Interest Expense on Convertible Notes | Interest expense on the Convertible Notes consisted of the following: | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Coupon interest expense | $ | 6,792 | $ | 6,793 | $ | 5,322 | |||||||
Non-cash amortization of debt discount | 13,737 | 12,407 | 8,910 | ||||||||||
Non-cash amortization of debt issuance costs | 1,161 | 1,049 | 753 | ||||||||||
Total | $ | 21,690 | $ | 20,249 | $ | 14,985 | |||||||
BuildtoSuit_Lease_Obligation_T
Build-to-Suit Lease Obligation (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Leases [Abstract] | |||||
Schedule of Expected Reductions (Increases) in Build-to-Suit Lease Obligation | Expected reductions (increases) in the build-to-suit lease obligation at December 31, 2014 were as follows: | ||||
Years Ending December 31, | Build-To-Suit Lease | ||||
Obligation | |||||
2015 | $ | 698 | |||
2016 | (12 | ) | |||
2017 | 66 | ||||
2018 | 150 | ||||
2019 | 241 | ||||
2020 and thereafter | 18,266 | ||||
Total | $ | 19,409 | |||
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of Property and Equipment, Net | Property and equipment, net, consisted of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Build-to-suit property | $ | 19,544 | $ | — | |||||
Leasehold improvements | 15,051 | 12,034 | |||||||
Computer equipment and software | 9,499 | 4,503 | |||||||
Furniture and fixtures | 4,667 | 3,981 | |||||||
Construction in progress | 1,360 | 1,177 | |||||||
Laboratory equipment | 735 | 703 | |||||||
50,856 | 22,398 | ||||||||
Less: Accumulated depreciation | (9,695 | ) | (5,363 | ) | |||||
Total | $ | 41,161 | $ | 17,035 | |||||
Accounts_Payable_Accrued_Expen1
Accounts Payable, Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Components of Accounts Payable, Accrued Expenses and Other Current Liabilities | Accounts payable, accrued expenses and other current liabilities consisted of the following: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Payroll and payroll-related | $ | 33,272 | $ | 23,832 | |||||
Clinical and preclinical | 31,069 | 34,182 | |||||||
Royalties payable | 13,582 | 6,377 | |||||||
Accounts payable | 10,492 | 3,290 | |||||||
Accrued professional services and other current liabilities | 8,913 | 6,879 | |||||||
Other payable to licensor | 5,000 | 2,500 | |||||||
Taxes payable | 2,106 | — | |||||||
Interest payable | 1,698 | 1,698 | |||||||
Total | $ | 106,132 | $ | 78,758 | |||||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Summary of Stock Option Activity | The following table summarizes stock option activity for the year ended December 31, 2014: | ||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Options | Average | Average | Intrinsic | ||||||||||||||
Exercise Price | Remaining | Value(1) | |||||||||||||||
Contractual | |||||||||||||||||
Term | |||||||||||||||||
(in years) | |||||||||||||||||
Outstanding at December 31, 2013 | 6,614,534 | $ | 22.12 | ||||||||||||||
Granted | 957,131 | $ | 78.57 | ||||||||||||||
Exercised | (2,015,934 | ) | $ | 14.43 | |||||||||||||
Forfeited/expired | (487,774 | ) | $ | 46.13 | |||||||||||||
Outstanding at December 31, 2014 | 5,067,957 | $ | 33.52 | 6.27 | $ | 335.3 | |||||||||||
Vested and exercisable at December 31, 2014 | 3,423,815 | $ | 19.7 | 5.16 | $ | 273.6 | |||||||||||
-1 | The aggregate intrinsic value is calculated as the pre-tax difference between the weighted-average exercise price of the underlying awards and the closing price per share of $99.61 of the Company’s common stock on December 31, 2014. The calculation excludes any awards with an exercise price higher than the closing price of the Company’s common stock on December 31, 2014. The amounts are presented in millions. | ||||||||||||||||
Schedule of Value of Options Vested and Exercised | Additional information regarding stock options is set forth below (in thousands, except per share data): | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Intrinsic value of options exercised | $ | 145,842 | $ | 35,155 | $ | 116,867 | |||||||||||
Grant-date fair value of options vested | $ | 38,147 | $ | 22,278 | $ | 10,795 | |||||||||||
Weighted-average grant-date fair value per share of options granted | $ | 43.35 | $ | 30.39 | $ | 26.01 | |||||||||||
Summary of Restricted Stock Units | The following table summarizes restricted stock unit activity for the year ended December 31, 2014: | ||||||||||||||||
Number of | Weighted- | ||||||||||||||||
Shares | Average | ||||||||||||||||
Grant-Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Unvested at December 31, 2013 | 311,347 | $ | 52.57 | ||||||||||||||
Granted | 399,102 | $ | 83.55 | ||||||||||||||
Vested | (134,865 | ) | $ | 51.85 | |||||||||||||
Forfeited | (92,004 | ) | $ | 63.95 | |||||||||||||
Unvested at December 31, 2014 | 483,580 | $ | 76.2 | ||||||||||||||
Summary of Stock Appreciation Rights Activity | The following table summarizes stock appreciation rights activity for the year ended December 31, 2014: | ||||||||||||||||
Number of | Weighted- | Weighted- | Aggregate | ||||||||||||||
Rights | Average | Average | Intrinsic | ||||||||||||||
Exercise Price | Remaining | Value(1) | |||||||||||||||
Contractual | |||||||||||||||||
Term | |||||||||||||||||
(in years) | |||||||||||||||||
Outstanding at December 31, 2013 | 806,116 | $ | 23.98 | ||||||||||||||
Granted | — | — | |||||||||||||||
Exercised | (97,994 | ) | $ | 23.5 | |||||||||||||
Forfeited | (19,894 | ) | $ | 23.82 | |||||||||||||
Outstanding at December 31, 2014 | 688,228 | $ | 24.05 | 6.96 | $ | 52 | |||||||||||
Vested and exercisable at December 31, 2014 | 501,740 | $ | 24.07 | 6.96 | $ | 37.9 | |||||||||||
-1 | The aggregate intrinsic value is calculated as the pre-tax difference between the weighted-average exercise price of the underlying awards and the closing price per share of $99.61 of the Company’s common stock on December 31, 2014. The calculation excludes any awards with an exercise price higher than the closing price of the Company’s common stock on December 31, 2014. The amounts are presented in millions. | ||||||||||||||||
Schedule of Additional Information Regarding Stock Appreciation Rights | Additional information regarding stock appreciation rights is set forth below (in thousands, except per share data): | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Intrinsic value of stock appreciation rights exercised | $ | 7,024 | $ | 1,090 | $ | — | |||||||||||
Fair value of stock appreciation rights vested (based on remeasurement-date fair value) | $ | 6,834 | $ | 9,955 | $ | 4,307 | |||||||||||
Weighted-average grant-date fair value per share of stock appreciation rights granted | $ | — | $ | — | $ | 14.33 | |||||||||||
Weighted-average remeasurement-date fair value per share of stock appreciation rights | $ | — | $ | — | $ | 32.94 | |||||||||||
Schedule of Black-Scholes Assumptions Used for Stock options and Stock Appreciation Rights to Employees and Directors | The Black-Scholes assumptions used to estimate the fair value of stock options and stock appreciation rights to employees and directors were as follows: | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Expected volatility | 60-65 | % | 64-75 | % | 66-73 | % | |||||||||||
Expected term (in years) | 5.0-5.5 | 5.2-5.5 | 5.3-5.5 | ||||||||||||||
Risk-free interest rate | 1.56-1.79 | % | 0.73-1.64 | % | 0.68-1.01 | % | |||||||||||
Expected dividend yield | — | — | — | ||||||||||||||
Schedule of Black-Scholes Assumptions Used to Estimate Fair Value of Shares Issued under ESPP | The Black-Scholes assumptions used to estimate the fair value of shares issued under the ESPP on the commencement date of the offering period were as follows: | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected volatility | 43-53 | % | 45 | % | |||||||||||||
Expected term (in years) | 0.5 | 0.5 | |||||||||||||||
Risk-free interest rate | 0.04-0.06 | % | 0.04 | % | |||||||||||||
Expected dividend yield | — | — | |||||||||||||||
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense was as follows: | ||||||||||||||||
Years Ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Stock-based compensation expense recognized as: | |||||||||||||||||
R&D expenses | $ | 17,913 | $ | 16,503 | $ | 11,998 | |||||||||||
SG&A expenses | 27,221 | 20,575 | 11,680 | ||||||||||||||
Total | $ | 45,134 | $ | 37,078 | $ | 23,678 | |||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||
Schedule of Income Tax Expense | Income tax benefit (expense) for the periods presented consisted of the following: | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Current: | |||||||||||||
Federal | $ | (19,476 | ) | $ | (7 | ) | $ | (7 | ) | ||||
State | (1,496 | ) | (108 | ) | — | ||||||||
Total current | (20,972 | ) | (115 | ) | (7 | ) | |||||||
Deferred: | |||||||||||||
Federal | 36,917 | — | — | ||||||||||
State | 313 | — | — | ||||||||||
Total deferred | 37,230 | — | — | ||||||||||
Total income tax benefit (expense) | $ | 16,258 | $ | (115 | ) | $ | (7 | ) | |||||
Schedule of Reconciliation of Statutory Federal Income Tax Rate | A reconciliation of the statutory Federal income tax rate of 35% to the Company’s effective income tax rates is as follows: | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Federal tax provision at statutory rate | 35 | % | 35 | % | 35 | % | |||||||
State taxes (net of Federal benefit) | 0.4 | % | 1.4 | % | 10.8 | % | |||||||
Orphan drug credit | — | — | 0.3 | % | |||||||||
Stock-based compensation | 0.1 | % | (0.2 | %) | 1.5 | % | |||||||
Non-deductible officer compensation | 0.1 | % | (1.8 | %) | (1.9 | %) | |||||||
Change in valuation allowance | (40.5 | %) | (52.1 | %) | (45.5 | %) | |||||||
Research and development credits | (1.5 | %) | 17.1 | % | — | ||||||||
Other | 0.2 | % | 0.3 | % | (0.2 | %) | |||||||
Effective income tax rate | (6.2 | %) | (0.3 | %) | 0 | % | |||||||
Schedule of Company's Deferred Tax Assets | Significant components of the Company’s deferred tax assets for Federal and state income taxes are follows: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | ||||||||||||
Deferred tax assets: | |||||||||||||
Deferred revenue | $ | 1,005 | $ | 6,073 | |||||||||
Net operating loss carryforward | 9,100 | 80,620 | |||||||||||
Stock-based compensation | 26,000 | 21,257 | |||||||||||
Tax credits | 12,098 | 22,616 | |||||||||||
Intangible assets | 5,259 | — | |||||||||||
Accruals and reserves | 15,247 | 10,544 | |||||||||||
Total deferred tax assets | 68,709 | 141,110 | |||||||||||
Less: valuation allowance | (16,023 | ) | (120,807 | ) | |||||||||
Total net deferred tax assets | 52,686 | 20,303 | |||||||||||
Deferred tax liabilities | |||||||||||||
Depreciation | (2,741 | ) | (2,674 | ) | |||||||||
Convertible Notes | (12,792 | ) | (17,629 | ) | |||||||||
Total deferred tax liabilities | (15,533 | ) | (20,303 | ) | |||||||||
Net deferred tax assets | $ | 37,153 | $ | — | |||||||||
Recorded as: | |||||||||||||
Net current deferred tax assets | $ | 21,987 | $ | 5,541 | |||||||||
Net non-current deferred tax assets | 15,176 | — | |||||||||||
Net non-current deferred tax liabilities (included in “Other non-current liabilities”) | (10 | ) | (5,541 | ) | |||||||||
Net deferred tax assets | $ | 37,153 | $ | — | |||||||||
Schedule of Gross Unrecognized Tax Positions | The following table summarizes activity related to the Company’s gross unrecognized tax positions: | ||||||||||||
December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Balance as of beginning of year | $ | 5,955 | $ | 4,602 | $ | 3,936 | |||||||
Additions based on tax positions related to the current year | 6,439 | 702 | 400 | ||||||||||
Additions based on tax position related to prior year | — | 660 | 270 | ||||||||||
Decreases based on tax positions related to prior year | (27 | ) | (9 | ) | (4 | ) | |||||||
Balance as of end of year | $ | 12,367 | $ | 5,955 | $ | 4,602 | |||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Financial Assets and Liabilities Measured at Fair Value on Recurring Basis | Financial assets and liabilities measured at fair value on a recurring basis are summarized below: | ||||||||||||||||
Fair value measurements using: | |||||||||||||||||
Fair Value | Level 1 | Level 2 | Level 3 | ||||||||||||||
December 31, 2014: | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 189,031 | $ | 189,031 | — | — | |||||||||||
Current liabilities: | |||||||||||||||||
Contingent consideration | $ | 10,000 | — | — | $ | 10,000 | |||||||||||
Long-term liabilities: | |||||||||||||||||
Contingent consideration | $ | 96,000 | — | — | $ | 96,000 | |||||||||||
December 31, 2013: | |||||||||||||||||
Cash equivalents: | |||||||||||||||||
Money market funds | $ | 189,092 | $ | 189,092 | — | — | |||||||||||
Fair Value of Other Financial Instruments Not Measured on Recurring Basis | The following table presents the total balance of the Company’s other financial instruments that are not measured at fair value on a recurring basis. | ||||||||||||||||
Fair value measurements using: | |||||||||||||||||
Total Balance | Level 1 | Level 2 | Level 3 | ||||||||||||||
December 31, 2014: | |||||||||||||||||
Assets: | |||||||||||||||||
Bank deposits (included in “Cash and cash equivalents”) | $ | 313,646 | $ | 313,646 | — | — | |||||||||||
Liabilities: | |||||||||||||||||
Convertible Notes | $ | 359,219 | — | $ | 359,219 | — | |||||||||||
December 31, 2013: | |||||||||||||||||
Assets: | |||||||||||||||||
Bank deposits (included in “Cash and cash equivalents”) | $ | 39,696 | $ | 39,696 | — | — | |||||||||||
Liabilities: | |||||||||||||||||
Convertible Notes | $ | 277,145 | — | $ | 277,145 | — |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies Disclosure [Abstract] | |||||
Schedule of Future Operating Lease Obligations | Future operating lease obligations as of December 31, 2014, are as follows: | ||||
Years Ending December 31, | Operating | ||||
Leases | |||||
2015 | $ | 8,008 | |||
2016 | 8,170 | ||||
2017 | 8,334 | ||||
2018 | 8,499 | ||||
2019 | 4,431 | ||||
2020 and thereafter | — | ||||
Total | $ | 37,442 | |||
Schedule of Future Lease Cash Payments under Build to Suit Lease | Expected future lease payments under the build-to-suit lease as of December 31, 2014 are as follows: | ||||
Years Ending December 31, | Expected Cash | ||||
Payments Under Build- | |||||
To-Suit Lease | |||||
Obligation | |||||
2015 | $ | 2,435 | |||
2016 | 2,538 | ||||
2017 | 2,614 | ||||
2018 | 2,692 | ||||
2019 | 2,773 | ||||
2020 and thereafter | 14,162 | ||||
Total minimum lease payments | $ | 27,214 | |||
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||
Selected Quarterly Financial Data | The following table presents the unaudited quarterly results of operations of the Company for the years ended December 31, 2014 and 2013, respectively. The unaudited financial information is prepared on the same basis as the audited consolidated financial statements. The Company’s operating results for any quarter are not necessarily indicative of results for any future quarters or for a full year. | ||||||||||||||||
Quarters Ended | |||||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||||
2014:00:00 | |||||||||||||||||
Collaboration revenue | $ | 87,189 | $ | 148,090 | $ | 200,478 | $ | 274,730 | |||||||||
Operating expenses | $ | (95,654 | ) | $ | (93,139 | ) | $ | (108,595 | ) | $ | (131,253 | ) | |||||
Income (loss) from operations | $ | (8,465 | ) | $ | 54,951 | $ | 91,883 | $ | 143,477 | ||||||||
Net income (loss) | $ | (13,665 | ) | $ | 47,919 | $ | 77,993 | $ | 164,205 | ||||||||
Basic net income (loss) per common share | $ | (0.18 | ) | $ | 0.63 | $ | 1.01 | $ | 2.11 | ||||||||
Diluted net income (loss) per common share | $ | (0.18 | ) | $ | 0.6 | $ | 0.96 | $ | 1.96 | ||||||||
Weighted-average common shares used in the calculation of basic net income (loss) per common share | 76,245 | 76,577 | 77,056 | 77,822 | |||||||||||||
Weighted-average common shares used in the calculation of diluted net income (loss) per common share | 76,245 | 80,491 | 81,223 | 85,756 | |||||||||||||
2013:00:00 | |||||||||||||||||
Collaboration revenue | $ | 46,154 | $ | 70,149 | $ | 60,027 | $ | 96,612 | |||||||||
Operating expenses | $ | (68,476 | ) | $ | (70,095 | ) | $ | (68,025 | ) | $ | (88,587 | ) | |||||
Income (loss) from operations | $ | (22,322 | ) | $ | 54 | $ | (7,998 | ) | $ | 8,025 | |||||||
Net income (loss) | $ | (27,170 | ) | $ | (4,898 | ) | $ | (13,313 | ) | $ | 2,768 | ||||||
Basic net income (loss) per common share | $ | (0.36 | ) | $ | (0.07 | ) | $ | (0.18 | ) | $ | 0.04 | ||||||
Diluted net income (loss) per common share | $ | (0.36 | ) | $ | (0.07 | ) | $ | (0.18 | ) | $ | 0.03 | ||||||
Weighted-average common shares used in the calculation of basic net income (loss) per common share | 74,824 | 75,013 | 75,255 | 75,560 | |||||||||||||
Weighted-average common shares used in the calculation of diluted net income (loss) per common share | 74,824 | 75,013 | 75,255 | 79,912 |
Description_of_Business_Additi
Description of Business - Additional Information (Detail) (USD $) | 12 Months Ended | 28 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Organization And Description Of Business [Line Items] | |||
Cumulative net losses | ($57,709,000) | ($57,709,000) | ($334,161,000) |
Debt instrument, interest rate | 2.63% | 2.63% | |
Convertible senior notes, maturity date | 1-Apr-17 | ||
Astellas Pharma Inc. [Member] | Milestone and cost-sharing payments [Member] | |||
Organization And Description Of Business [Line Items] | |||
Remaining sales milestone payments may receive | 245,000,000 | ||
XTANDI [Member] | |||
Organization And Description Of Business [Line Items] | |||
Number of commercial product | 1 | 1 | |
XTANDI [Member] | Astellas Pharma Inc. [Member] | |||
Organization And Description Of Business [Line Items] | |||
World wide net sales | $1,600,000,000 | ||
Collaborative agreement [Member] | Astellas Pharma Inc. [Member] | |||
Organization And Description Of Business [Line Items] | |||
Royalty received on ex-U.S. sales per collaboration arrangement | Low teens to the low twenties |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Sep. 21, 2012 | Dec. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 20, 2012 | |
Segment | |||||||
Reporting_Unit | |||||||
Number of operating business segment | 1 | ||||||
Total number of authorized shares | 170,000,000 | 170,000,000 | 170,000,000 | ||||
Common stock issued in forward stock split | 37,000,000 | ||||||
Par value of common stock | $0.01 | $0.01 | $0.01 | ||||
Debt instrument convertible increment of principal amount of conversion | $1,000 | $1,000 | |||||
Conversion rate of common stock, shares per principal amount | 19.5172 | 19.5172 | |||||
Conversion price, per share of common stock | $51.24 | $51.24 | $51.24 | ||||
Contract term of the Convertible Notes, years | 5 years | ||||||
Number of reporting unit | 1 | ||||||
Discrete tax benefit | 33,400,000 | ||||||
Amount of net loss increased due to out-of-period adjustment | 3,600,000 | ||||||
Out-of-period adjustment | In the first quarter of 2013, the Company recorded an out-of-period correcting adjustment that increased operating expenses and net loss by $3.6 million for the three months ended March 31, 2013. Management concluded that the adjustment is not material to the full year 2013 results or any previously reported financial statements. | ||||||
Astellas [Member] | Collaborative agreement [Member] | |||||||
Nonrefundable upfront payment received under collaboration arrangement | 110,000,000 | ||||||
Pfizer [Member] | Collaborative agreement [Member] | |||||||
Nonrefundable upfront payment received under collaboration arrangement | $225,000,000 | ||||||
Cash and cash equivalents [Member] | |||||||
Highly liquid investments maximum maturity period | 3 months | ||||||
Short-Term Investments [Member] | |||||||
Highly liquid investments maximum maturity period | 12 months | ||||||
Capital stock [Member] | |||||||
Shares of capital stock authorized | 171,000,000 | ||||||
Capital stock [Member] | Pre-Amended and Restated Certificate of Incorporation [Member] | |||||||
Shares of capital stock authorized pre-split | 51,000,000 | ||||||
Capital stock [Member] | After-Amended and Restated Certificate of Incorporation [Member] | |||||||
Shares of capital stock authorized pre-split | 86,000,000 | ||||||
Common Stock [Member] | |||||||
Total number of authorized shares | 170,000,000 | ||||||
Forward stock split of common stock | 2 | 2 | |||||
Common Stock [Member] | Pre-Amended and Restated Certificate of Incorporation [Member] | |||||||
Shares of common stock authorized pre-split | 50,000,000 | ||||||
Common Stock [Member] | After-Amended and Restated Certificate of Incorporation [Member] | |||||||
Shares of common stock authorized pre-split | 85,000,000 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Estimated Useful Lives of Property and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Furniture and fixtures [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Estimated Useful Life, years | 3 years |
Furniture and fixtures [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Estimated Useful Life, years | 5 years |
Computer equipment and software [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Estimated Useful Life, years | 3 years |
Computer equipment and software [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Estimated Useful Life, years | 5 years |
Laboratory equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and Equipment, Estimated Useful Life, years | 5 years |
Collaboration_Agreements_Colla
Collaboration Agreements - Collaboration Agreements with Astellas and Pfizer- Additional Information (Detail) (USD $) | 12 Months Ended | 3 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2008 | Dec. 31, 2009 | |
Collaborative agreement [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Co-promotion of sales and medical affairs percentage | 50.00% | ||
Astellas Pharma Inc. [Member] | Collaborative agreement [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Royalty received on ex-U.S. sales per collaboration arrangement | Low teens to the low twenties | ||
Up-front cash payment arrangement [Member] | Pfizer [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Non-refundable, upfront cash payment | $225,000,000 | ||
Up-front cash payment arrangement [Member] | Astellas Pharma Inc. [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Non-refundable, upfront cash payment | 110,000,000 | ||
Development cost-sharing payments [Member] | Pfizer [Member] | Collaborative agreement [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Share percentage of developing and commercializing dimebon | 60.00% | ||
Commercial cost sharing-payments [Member] | Medivation [Member] | Collaborative agreement [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Share percentage of developing and commercializing dimebon | 40.00% | ||
Development milestone payments [Member] | Astellas Pharma Inc. [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Eligible to receive milestone payments | 335,000,000 | ||
Milestone payments earned | 335 | ||
Sales milestone payments [Member] | Astellas Pharma Inc. [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Eligible to receive milestone payments | 320,000,000 | ||
Milestone payments earned | 75 | ||
Remaining future milestone payments eligible to receive | 245,000,000 |
Collaboration_Agreements_Sched
Collaboration Agreements - Schedule of Potential Milestone Payments in Sales (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Milestone Payment | $50,000,000 | $25,000,000 | |
Milestone Payment Three [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Remaining future milestone payments eligible to receive | 70,000,000 | ||
Milestone Payment Four [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Remaining future milestone payments eligible to receive | 175,000,000 | ||
Milestone Sales One [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Annual global net sales of XTANDI (calendar year), as reported by Astellas | 400,000,000 | ||
Milestone Sales Two [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Annual global net sales of XTANDI (calendar year), as reported by Astellas | 800,000,000 | ||
Milestone Sales Three [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Annual global net sales of XTANDI (calendar year), as reported by Astellas | 1,200,000,000 | ||
Milestone Sales Four [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Annual global net sales of XTANDI (calendar year), as reported by Astellas | $1,600,000,000 |
Collaboration_Agreements_Sched1
Collaboration Agreements - Schedule of Potential Milestone Payments in Sales (Parenthetical) (Detail) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Milestone payments earned | $50 | $25 |
Collaboration_Agreements_Sched2
Collaboration Agreements - Schedule of Collaboration Revenue (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||
Related to U.S. XTANDI sales | $339,902 | $196,208 | $35,752 | ||||||||
Related to ex-U.S. XTANDI sales | 49,476 | 6,338 | |||||||||
Related to upfront and milestone payments | 321,109 | 70,396 | 145,944 | ||||||||
Collaboration revenue | $274,730 | $200,478 | $148,090 | $87,189 | $96,612 | $60,027 | $70,149 | $46,154 | $710,487 | $272,942 | $181,696 |
Collaboration_Agreements_Colla1
Collaboration Agreements - Collaboration Revenue and Collaboration Receivables - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Collaboration revenue percentage compared to U.S. XTANDI net sales | 50.00% | 50.00% | |
Collaboration revenue related to ex-U.S. XTANDI sales | $49,500,000 | $6,300,000 | $0 |
Deferred revenue, Current | 2,822,000 | 16,931,000 | |
Collaboration receivable | 184,737,000 | 107,210,000 | |
Collaborative agreement [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Deferred revenue, Current | 2,800,000 | 16,900,000 | |
Collaboration receivable | $184,700,000 | $107,200,000 | |
Development cost-sharing payments [Member] | Collaborative agreement [Member] | Medivation Inc [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Share of developing and commercializing XTANDI U.S. | 50.00% | ||
Share of developing and commercializing XTANDI ex-U.S. | 33.33% | ||
Commercial cost sharing-payments [Member] | Astellas Pharma Inc. [Member] | Collaborative agreement [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Share of developing and commercializing XTANDI U.S. | 50.00% | ||
Share of developing and commercializing XTANDI ex-U.S. | 66.67% |
Collaboration_Agreements_Sched3
Collaboration Agreements - Schedule of Collaboration Revenue Related to U.S. XTANDI Sales (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Collaboration revenue related to U.S. XTANDI sales | $339,902 | $196,208 | $35,752 |
U.S. XTANDI sales [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Collaboration revenue related to U.S. XTANDI sales | 339,902 | 196,208 | 35,752 |
U.S. XTANDI sales [Member] | Astellas Pharma Inc. [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
U.S. XTANDI sales (as reported by Astellas) | 679,805 | 392,415 | 71,504 |
Shared U.S. development and commercialization costs | -323,730 | -241,106 | -88,908 |
Pre-tax U.S. profit (loss) | 356,075 | 151,309 | -17,404 |
U.S. XTANDI sales [Member] | Medivation [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Medivation's share of pre-tax U.S. profit (loss) | 178,037 | 75,655 | -8,702 |
Reimbursement of Medivation's share of shared U.S. costs | $161,865 | $120,553 | $44,454 |
Collaboration_Agreements_Sched4
Collaboration Agreements - Schedule of Collaboration Revenue Related to Upfront and Milestone Payments (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Sales milestones earned | $50,000 | $25,000 | |||
Amortization of deferred upfront and development milestones | 14,109 | 25,396 | 100,944 | ||
Total collaboration revenue attributable to upfront and milestone payments | 321,109 | 70,396 | 145,944 | ||
Astellas Pharma Inc. [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Total collaboration revenue attributable to upfront and milestone payments | 321,109 | 70,396 | 73,914 | ||
Astellas Pharma Inc. [Member] | Development milestones earned [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Milestones earned | 257,000 | 20,000 | 45,000 | ||
Astellas Pharma Inc. [Member] | Sales milestones earned [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Sales milestones earned | 50,000 | 25,000 | |||
Astellas Pharma Inc. [Member] | Amortization of deferred upfront and development milestones [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Amortization of deferred upfront and development milestones | 14,109 | 25,396 | 28,914 | ||
Pfizer [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Total collaboration revenue attributable to upfront and milestone payments | 321,109 | 70,396 | 145,944 | ||
Pfizer [Member] | Amortization of deferred upfront and development milestones [Member] | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Amortization of deferred upfront and development milestones | $72,030 |
Collaboration_Agreements_Devel
Collaboration Agreements - Development and Commercialization Cost-Sharing Payments (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Development cost-sharing payments [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Development cost-sharing payments | $63,479 | $46,594 | $49,213 |
Development cost-sharing payments [Member] | Astellas Pharma Inc. [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Development cost-sharing payments | 63,479 | 46,594 | 47,473 |
Development cost-sharing payments [Member] | Pfizer [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Development cost-sharing payments | 1,740 | ||
Commercial cost sharing-payments [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Commercialization cost-sharing payments | -36,094 | -11,973 | -3,428 |
Commercial cost sharing-payments [Member] | Astellas Pharma Inc. [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Commercialization cost-sharing payments | -36,094 | -11,973 | -3,437 |
Commercial cost sharing-payments [Member] | Pfizer [Member] | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Commercialization cost-sharing payments | $9 |
Business_Acquisition_Additiona
Business Acquisition - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||
Business acquisition upfront cash payments | $5,000,000 | |
Business combination, goodwill | 10,000,000 | 10,000,000 |
CureTech Ltd [Member] | ||
Business Acquisition [Line Items] | ||
Business acquisition upfront cash payments | 5,000,000 | 5,000,000 |
Milestone payment | 5,000,000 | |
Acquisition-date fair value of contingent consideration payments | 106,000,000 | 106,000,000 |
Business combination, identifiable intangible asset | 101,000,000 | 101,000,000 |
Business combination, goodwill | 10,000,000 | 10,000,000 |
Business combination, Goodwill expected to be deductible for tax purposes | 10,000,000 | 10,000,000 |
Minimum [Member] | CureTech Ltd [Member] | ||
Business Acquisition [Line Items] | ||
Percentage of royalty | 5.00% | 5.00% |
Maximum [Member] | CureTech Ltd [Member] | ||
Business Acquisition [Line Items] | ||
Percentage of royalty | 11.00% | 11.00% |
Sales milestones earned [Member] | CureTech Ltd [Member] | ||
Business Acquisition [Line Items] | ||
Business acquisition maximum contingent consideration | 85,000,000 | 85,000,000 |
Development milestones earned [Member] | CureTech Ltd [Member] | ||
Business Acquisition [Line Items] | ||
Business acquisition maximum contingent consideration | $245,000,000 | $245,000,000 |
Business_Acquisition_Summary_o
Business Acquisition - Summary of Final Allocation of Purchase Consideration, Including Contingent Consideration Payable, Based on Fair Value (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 |
Purchase consideration: | ||
Cash | $5,000 | |
Assets: | ||
Goodwill | 10,000 | 10,000 |
CureTech Ltd [Member] | ||
Purchase consideration: | ||
Cash | 5,000 | 5,000 |
Acquisition-date fair value of contingent consideration | 106,000 | 106,000 |
Total purchase consideration | 111,000 | |
Assets: | ||
Identifiable intangible assets- IPR&D | 101,000 | 101,000 |
Net identifiable assets acquired | 101,000 | 101,000 |
Goodwill | 10,000 | 10,000 |
Net assets acquired | $111,000 | $111,000 |
Net_Income_Loss_Per_Common_Sha2
Net Income (Loss) Per Common Share - Calculation of Diluted Net Income (Loss) Per Common Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Numerator: | |||||||||||
Net income (loss) | $164,205 | $77,993 | $47,919 | ($13,665) | $2,768 | ($13,313) | ($4,898) | ($27,170) | $276,452 | ($42,613) | ($41,257) |
Interest expense on convertible notes, net of tax | 14,030 | ||||||||||
Numerator for diluted net income (loss) per common share calculation | $290,482 | ($42,613) | ($41,257) | ||||||||
Denominator: | |||||||||||
Weighted-average common shares, basic | 77,822 | 77,056 | 76,577 | 76,245 | 75,560 | 75,255 | 75,013 | 74,824 | 76,929 | 75,165 | 73,480 |
Dilutive effect of common stock equivalents | 8,071 | ||||||||||
Weighted-average common shares, diluted | 85,756 | 81,223 | 80,491 | 76,245 | 79,912 | 75,255 | 75,013 | 74,824 | 85,000 | 75,165 | 73,480 |
Basic net income (loss) per common share | $2.11 | $1.01 | $0.63 | ($0.18) | $0.04 | ($0.18) | ($0.07) | ($0.36) | $3.59 | ($0.57) | ($0.56) |
Diluted net income (loss) per common share | $1.96 | $0.96 | $0.60 | ($0.18) | $0.03 | ($0.18) | ($0.07) | ($0.36) | $3.42 | ($0.57) | ($0.56) |
Net_Income_Loss_Per_Common_Sha3
Net Income (Loss) Per Common Share - Additional Information (Detail) | 12 Months Ended | |
In Millions, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Earnings Per Share [Abstract] | ||
Dilutive common shares excluded from net loss per common share computations | 12.6 | 13 |
Convertible_Senior_Notes_Due_22
Convertible Senior Notes Due 2017 - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | ||
Sep. 21, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
D | ||||
Debt Instrument [Line Items] | ||||
Convertible Notes, maturity date | 1-Apr-17 | |||
Convertible Notes, payment terms | The Convertible Notes bear interest at a rate of 2.625% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on October 1, 2012. | |||
Convertible Notes, aggregate principal amount | $258,800,000 | |||
Debt instrument, interest rate | 2.63% | |||
Maximum percentage of conversion price upon redemption of Convertible Notes | 130.00% | |||
Percentage of redemption price to principal amount of note | 100.00% | |||
Convertible Notes, conversion term description | (1) during any calendar quarter commencing after the calendar quarter ending on June 30, 2012, if the closing sale price of the Companybs common stock, for at least 20 trading days (whether or not consecutive) in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter immediately preceding the calendar quarter in which the conversion occurs, is more than 130% of the conversion price of the Convertible Notes in effect on each applicable trading day; (2) during the five consecutive trading-day period following any five consecutive trading-day period in which the trading price for the Convertible Notes for each such trading day was less than 98% of the closing sale price of the Companybs common stock on such date multiplied by the then-current conversion rate; (3) upon the occurrence of specified corporate events; or (4) if the Company calls any Convertible Notes for redemption, at any time until the close of business on the second business day preceding the redemption date. On or after January 1, 2017 until the close of business on the second business day immediately preceding the stated maturity date, holders may surrender their Convertible Notes for conversion at any time, regardless of the foregoing circumstances. | |||
Number of trading days | 20 | |||
Consecutive trading days | 30 days | |||
Conversion rate of common stock, shares per principal amount | 19.5172 | 19.5172 | ||
Debt instrument convertible increment of principal amount of conversion | 1,000 | 1,000 | ||
Conversion price, per share of common stock | $51.24 | $51.24 | ||
Issuance costs | 8,400,000 | |||
Convertible Notes, issuance costs allocated to debt component | 6,100,000 | |||
Additional Paid-In Capital [Member] | ||||
Debt Instrument [Line Items] | ||||
Convertible Notes, issuance costs allocated to equity component | 2,300,000 | |||
Equity component [Member] | ||||
Debt Instrument [Line Items] | ||||
Convertible Notes, equity component | 71,700,000 | |||
Debt component [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument convertible debt equity component | $187,100,000 | |||
2.625% convertible senior notes due 2017 [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, effective percentage rate | 10.71% | 10.71% | 10.71% |
Convertible_Senior_Notes_Due_23
Convertible Senior Notes Due 2017 - Interest Expense on Convertible Notes (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Debt Disclosure [Abstract] | |||
Coupon interest expense | $6,792 | $6,793 | $5,322 |
Non-cash amortization of debt discount | 13,737 | 12,407 | 8,910 |
Non-cash amortization of debt issuance costs | 1,161 | 1,049 | 753 |
Total | $21,690 | $20,249 | $14,985 |
BuildtoSuit_Lease_Obligation_A
Build-to-Suit Lease Obligation - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2014 |
sqft | ||
Build To Suit Lease Obligation [Line Items] | ||
Operating lease space, in square feet | 142,000 | |
Lease expiry period | Dec-19 | |
Amounts capitalized under build-to-suit transactions | 18,085 | |
Interest capitalized during construction period for build-to-suit transactions | 1,459 | |
Build-to-suit lease obligation current liability | 698 | |
Build-to-suit lease obligation non-current liability | 18,711 | |
Laboratory Space [Member] | ||
Build To Suit Lease Obligation [Line Items] | ||
Operating lease space, in square feet | 52,000 | |
Lease expiry period | Jul-24 | |
Optional lease extension term, in years | 5 years | |
Property and equipment [Member] | ||
Build To Suit Lease Obligation [Line Items] | ||
Amounts capitalized under build-to-suit transactions | 14,500 | |
Tenant Improvements [Member] | ||
Build To Suit Lease Obligation [Line Items] | ||
Amounts capitalized under build-to-suit transactions | 3,600 |
BuildtoSuit_Lease_Obligation_S
Build-to-Suit Lease Obligation - Schedule of Expected Reductions (Increases) in Build-to-Suit Lease Obligation (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Leases [Abstract] | |
Build-to-Suit Lease Obligation, 2015 | $698 |
Build-to-Suit Lease Obligation, 2016 | -12 |
Build-to-Suit Lease Obligation, 2017 | 66 |
Build-to-Suit Lease Obligation, 2018 | 150 |
Build-to-Suit Lease Obligation, 2019 | 241 |
Build-to-Suit Lease Obligation, 2020 and thereafter | 18,266 |
Total minimum payments | $19,409 |
Property_and_Equipment_Net_Sch
Property and Equipment, Net - Schedule of Property and Equipment, Net (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $50,856 | $22,398 |
Less: Accumulated depreciation | -9,695 | -5,363 |
Total | 41,161 | 17,035 |
Build-to-suit property [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 19,544 | |
Leasehold improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 15,051 | 12,034 |
Computer equipment and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 9,499 | 4,503 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 4,667 | 3,981 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,360 | 1,177 |
Laboratory equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $735 | $703 |
Accounts_Payable_Accrued_Expen2
Accounts Payable, Accrued Expenses and Other Current Liabilities - Components of Accounts Payable, Accrued Expenses and Other Current Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ||
Payroll and payroll-related | $33,272 | $23,832 |
Clinical and preclinical | 31,069 | 34,182 |
Royalties payable | 13,582 | 6,377 |
Accounts payable | 10,492 | 3,290 |
Accrued professional services and other current liabilities | 8,913 | 6,879 |
Other payable to licensor | 5,000 | 2,500 |
Taxes payable | 2,106 | |
Interest payable | 1,698 | 1,698 |
Total | $106,132 | $78,758 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 04, 2006 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Maximum percentage before exercise | 20.00% | |||
Total fair value of restricted stock units vested | $7,000,000 | $11,800,000 | $6,200,000 | |
Total fair market value of performance share awards that are vested during the period | 4,700,000 | |||
Employees share purchase plan, fair market value of common stock at beginning of offering period | 85.00% | |||
Employees share purchase plan, fair market value of common stock at end of purchase period | 85.00% | |||
Eligible employee contributions | 25,000 | |||
Shares reserved for issuance | 34,696 | |||
Shares issued in period | 90,067 | |||
Employee withholdings for ESPP shares | 1,500,000 | |||
Expected dividend yield | 0.00% | |||
Unrecognized stock-based compensation expense | 77,800,000 | |||
Unrecognized stock-based compensation expense, weighted-average period for recognition | 2 years 4 months 2 days | |||
Warrants to purchase aggregate shares of common stock, Exercised | 25,808 | |||
Common stock, Exercise price per share | $0.78 | |||
Warrants to purchase aggregate shares of common stock, Outstanding | 20,000 | |||
Common stock, Exercise price per share, Outstanding | $6.93 | |||
Warrants expiration date | 2017 | |||
Upside Case Achievement [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance shares eligible to be earned | 83,332 | |||
Stock options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payments award, expiration term | 10 years | |||
Share-based payment awards, vesting period | 4 years | |||
Restricted stock units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance shares eligible to be earned | 134,865 | |||
Performance share awards outstanding | 483,580 | 311,347 | ||
Stock appreciation rights granted | 399,102 | |||
Performance shares [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance share awards outstanding | 0 | 0 | ||
Performance shares [Member] | Upside Case Achievement [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance share awards canceled during period | 41,668 | |||
Stock appreciation rights [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total fair value of restricted stock units vested | 6,834,000 | 9,955,000 | 4,307,000 | |
Total fair market value of performance share awards that are vested during the period | $37,900,000 | |||
Stock appreciation rights granted | 0 | 0 | ||
Stock options and stock appreciation rights to employees and directors [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock appreciation rights granted | 0 | 0 | ||
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Annual non-employee directors grants [Member] | Stock options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment awards, vesting period | 1 year | |||
Annual non-employee directors grants [Member] | Restricted stock units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payment awards, vesting period, descriptions | Restricted stock units generally vest in three equal installments on approximately the first, second and third anniversaries of the grant date, except for annual restricted stock unit grants to non-employee directors, which vest on approximately the first anniversary of the grant date. | |||
Equity Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized for issuance | 21,150,000 | |||
Number of shares available for issuance | 2,700,000 | |||
ESPP [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares authorized for issuance | 3,000,000 | |||
Expected dividend yield | 0.00% | 0.00% | ||
Employee stock purchase plan offerings | 0 |
Stockholders_Equity_Summary_of
Stockholders' Equity - Summary of Stock Option Activity (Detail) (Stock options [Member], USD $) | 12 Months Ended |
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 |
Stock options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Options, Outstanding at December 31, 2013 | 6,614,534 |
Number of Options, Granted | 957,131 |
Number of Options, Exercised | -2,015,934 |
Number of Options, Forfeited/expired | -487,774 |
Number of Options, Outstanding at December 31, 2014 | 5,067,957 |
Number of Options, Vested and exercisable at December 31, 2014 | 3,423,815 |
Weighted Average Exercise Price, Outstanding at December 31, 2013 | $22.12 |
Weighted Average Exercise Price, Granted | $78.57 |
Weighted Average Exercise Price, Exercised | $14.43 |
Weighted Average Exercise Price, Forfeited/expired | $46.13 |
Weighted Average Exercise Price, Outstanding at December 31, 2014 | $33.52 |
Weighted Average Exercise Price, Vested and exercisable at December 31, 2014 | $19.70 |
Weighted Average Remaining Contractual Term (in years), Outstanding at December 31, 2014 | 6 years 3 months 7 days |
Weighted Average Remaining Contractual Term (in years), Vested and exercisable at December 31, 2014 | 5 years 1 month 28 days |
Aggregate Intrinsic Value, Outstanding at December 31, 2014 | $335.30 |
Aggregate Intrinsic Value, Vested and exercisable at December 31, 2014 | $273.60 |
Stockholders_Equity_Summary_of1
Stockholders' Equity - Summary of Stock Option Activity (Parenthetical) (Detail) (Stock options [Member], USD $) | Dec. 31, 2014 |
Stock options [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Closing stock price of common stock | $99.61 |
Stockholders_Equity_Schedule_o
Stockholders' Equity - Schedule of Value of Options Vested and Exercised (Detail) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Stockholders' Equity Note [Abstract] | |||
Intrinsic value of options exercised | $145,842 | $35,155 | $116,867 |
Grant-date fair value of options vested | $38,147 | $22,278 | $10,795 |
Weighted-average grant-date fair value per share of options granted | $43.35 | $30.39 | $26.01 |
Stockholders_Equity_Summary_of2
Stockholders' Equity - Summary of Restricted Stock Units (Detail) (Restricted stock units [Member], USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Restricted stock units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of Shares, Unvested at December 31, 2013 | 311,347 |
Number of Shares, Granted | 399,102 |
Number of Shares, Vested | -134,865 |
Number of Shares, Forfeited | -92,004 |
Number of Shares, Unvested at December 31, 2014 | 483,580 |
Weighted-Average Grant-Date Fair Value, Unvested at December 31, 2013 | $52.57 |
Weighted-Average Grant-Date Fair Value, Granted | $83.55 |
Weighted-Average Grant-Date Fair Value, Vested | $51.85 |
Weighted-Average Grant-Date Fair Value, Forfeited | $63.95 |
Weighted-Average Grant-Date Fair Value, Unvested at December 31, 2014 | $76.20 |
Stockholders_Equity_Summary_of3
Stockholders' Equity - Summary of Stock Appreciation Rights Activity (Detail) (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Aggregate Intrinsic Value, Vested and exercisable at December 31, 2014 | $4.70 | ||
Stock appreciation rights [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of stock appreciation rights, Outstanding at December 31, 2013 | 806,116 | ||
Number of stock appreciation rights, Granted | 0 | 0 | |
Number of stock appreciation rights, Exercised | -97,994 | ||
Number of stock appreciation rights, Forfeited | -19,894 | ||
Number of stock appreciation rights, Outstanding at December 31, 2014 | 688,228 | 806,116 | |
Number of stock appreciation rights, Vested and exercisable at December 31, 2014 | 501,740 | ||
Weighted Average Exercise Price, Outstanding at December 31, 2013 | $23.98 | ||
Weighted Average Exercise Price, Granted | $0 | ||
Weighted Average Exercise Price, Exercised | $23.50 | ||
Weighted Average Exercise Price, Forfeited | $23.82 | ||
Weighted Average Exercise Price, Outstanding at December 31, 2014 | $24.05 | $23.98 | |
Weighted Average Exercise Price, Vested and exercisable at December 31, 2014 | $24.07 | ||
Weighted Average Remaining Contractual Term (in years), Outstanding at December 31, 2014 | 6 years 11 months 16 days | ||
Weighted Average Remaining Contractual Term (in years), Vested and exercisable at December 31, 2014 | 6 years 11 months 16 days | ||
Aggregate Intrinsic Value, Outstanding at December 31, 2014 | 52 | ||
Aggregate Intrinsic Value, Vested and exercisable at December 31, 2014 | $37.90 |
Stockholders_Equity_Summary_of4
Stockholders' Equity - Summary of Stock Appreciation Rights Activity (Parenthetical) (Detail) (Stock appreciation rights [Member], USD $) | Dec. 31, 2014 |
Stock appreciation rights [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Closing stock price of common stock | $99.61 |
Stockholders_Equity_Schedule_o1
Stockholders' Equity - Schedule of Additional Information Regarding Stock Appreciation Rights (Detail) (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of stock appreciation rights vested (based on remeasurement-date fair value) | $7,000 | $11,800 | $6,200 |
Stock appreciation rights [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Intrinsic value of stock appreciation rights exercised | 7,024 | 1,090 | |
Fair value of stock appreciation rights vested (based on remeasurement-date fair value) | $6,834 | $9,955 | $4,307 |
Weighted-average grant-date fair value per share of stock appreciation rights granted | $14.33 | ||
Weighted-average remeasurement-date fair value per share of stock appreciation rights | $32.94 |
Stockholders_Equity_Schedule_o2
Stockholders' Equity - Schedule of Black-Scholes Assumptions Used for Stock options and Stock Appreciation Rights to Employees and Directors (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | ||
Stock options and stock appreciation rights to employees and directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Minimum [Member] | Stock options and stock appreciation rights to employees and directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 60.00% | 64.00% | 66.00% |
Expected term (in years) | 5 years | 5 years 2 months 12 days | 5 years 3 months 18 days |
Risk-free interest rate | 1.56% | 0.73% | 0.68% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Maximum [Member] | Stock options and stock appreciation rights to employees and directors [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 65.00% | 75.00% | 73.00% |
Expected term (in years) | 5 years 6 months | 5 years 6 months | 5 years 6 months |
Risk-free interest rate | 1.79% | 1.64% | 1.01% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Stockholders_Equity_Schedule_o3
Stockholders' Equity - Schedule of Black-Scholes Assumptions Used to Estimate Fair Value of Shares Issued under ESPP (Detail) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0.00% | |
ESPP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 45.00% | |
Expected term (in years) | 6 months | 6 months |
Risk-free interest rate | 0.04% | |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ESPP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 43.00% | |
Risk-free interest rate | 0.04% | |
Expected dividend yield | 0.00% | |
Maximum [Member] | ESPP [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 53.00% | |
Risk-free interest rate | 0.06% | |
Expected dividend yield | 0.00% |
Stockholders_Equity_Schedule_o4
Stockholders' Equity - Schedule of Stock-Based Compensation Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation | $45,134 | $37,078 | $23,678 |
R&D expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation | 17,913 | 16,503 | 11,998 |
SG&A expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Share-based compensation | $27,221 | $20,575 | $11,680 |
Retirement_Plan_Additional_Inf
Retirement Plan - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Compensation and Retirement Disclosure [Abstract] | |||
Maximum defined contribution plan employees contributions, percentage | 100.00% | ||
Percentage of participant contributions considered for first condition of plan | 100.00% | ||
Description of percentage of employees eligible earnings subject to match | The Company matches 100% of the first 3% of employee contributions and 50% of the next 2% of employee contributions. | ||
Percentage of participant salary under first condition of plan | 3.00% | ||
Percentage of participant contributions considered for second condition of plan | 50.00% | ||
Percentage of participant salary under second condition of plan | 2.00% | ||
Employer matching contributions to the plan | $2.70 | $1.90 | $1.30 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Taxes [Line Items] | ||||
Income (loss) before income tax expense benefit (expense) | $260,194,000 | ($42,498,000) | ($41,250,000) | |
Excess tax benefits from stock-based compensation | 16,965,000 | |||
Unrecorded excess stock-based compensation tax benefits | 81,400,000 | |||
Federal tax provision at statutory rate | 35.00% | 35.00% | 35.00% | |
Income tax benefit (expense) | 16,258,000 | -115,000 | -7,000 | |
Research and development credit and orphan drug credit, expiration dates | 2024 through 2034 | |||
Alternative minimum tax credits | 4,000,000 | 4,000,000 | ||
Valuation allowance increased (decreased) | 104,800,000 | 22,100,000 | -8,000,000 | |
Release of valuation allowance for deferred income taxes | 33,403,000 | 33,403,000 | ||
Gross unrecognized tax that would decrease effective tax rate, if recognized | 6,700,000 | 6,700,000 | ||
Federal [Member] | ||||
Income Taxes [Line Items] | ||||
Operating loss carryforwards | 160,600,000 | 160,600,000 | ||
Operating loss carryforwards, expiration dates | 2032 and 2033 | |||
Research and development credit and orphan drug credit | 29,000,000 | 29,000,000 | ||
State [Member] | ||||
Income Taxes [Line Items] | ||||
Operating loss carryforwards | 240,400,000 | 240,400,000 | ||
Operating loss carryforwards, expiration dates | At various dates between the years 2019 and 2033 | |||
California credit carryforwards [Member] | ||||
Income Taxes [Line Items] | ||||
Research and development credit and orphan drug credit | $13,800,000 | $13,800,000 |
Income_Taxes_Schedule_of_Incom
Income Taxes - Schedule of Income Tax Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Current Federal | ($19,476) | ($7) | ($7) |
Current State | -1,496 | -108 | |
Total current | -20,972 | -115 | -7 |
Deferred Federal | 36,917 | ||
Deferred State | 313 | ||
Total deferred | 37,230 | ||
Total income tax benefit (expense) | $16,258 | ($115) | ($7) |
Income_Taxes_Schedule_of_Recon
Income Taxes - Schedule of Reconciliation of Statutory Federal Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||
Federal tax provision at statutory rate | 35.00% | 35.00% | 35.00% |
State taxes (net of Federal benefit) | 0.40% | 1.40% | 10.80% |
Orphan drug credit | 0.30% | ||
Stock-based compensation | 0.10% | -0.20% | 1.50% |
Non-deductible officer compensation | 0.10% | -1.80% | -1.90% |
Change in valuation allowance | -40.50% | -52.10% | -45.50% |
Research and development credits | -1.50% | 17.10% | |
Other | 0.20% | 0.30% | -0.20% |
Effective income tax rate | -6.20% | -0.30% | 0.00% |
Income_Taxes_Schedule_of_Compa
Income Taxes - Schedule of Company's Deferred Tax Assets (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ||
Deferred revenue | $1,005 | $6,073 |
Net operating loss carryforward | 9,100 | 80,620 |
Stock-based compensation | 26,000 | 21,257 |
Tax credits | 12,098 | 22,616 |
Intangible assets | 5,259 | |
Accruals and reserves | 15,247 | 10,544 |
Total deferred tax assets | 68,709 | 141,110 |
Less: valuation allowance | -16,023 | -120,807 |
Total net deferred tax assets | 52,686 | 20,303 |
Depreciation | -2,741 | -2,674 |
Convertible Notes | -12,792 | -17,629 |
Total deferred tax liabilities | -15,533 | -20,303 |
Net deferred tax assets | 37,153 | |
Net current deferred tax assets | 21,987 | 5,541 |
Net non-current deferred tax assets | 15,176 | |
Net non-current deferred tax liabilities (included in "Other non-current liabilities") | -10 | -5,541 |
Net deferred tax assets | $37,153 |
Income_Taxes_Schedule_of_Gross
Income Taxes - Schedule of Gross Unrecognized Tax Positions (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Tax Disclosure [Abstract] | |||
Balance as of beginning of year | $5,955 | $4,602 | $3,936 |
Additions based on tax positions related to the current year | 6,439 | 702 | 400 |
Additions based on tax position related to prior year | 660 | 270 | |
Decreases based on tax positions related to prior year | -27 | -9 | -4 |
Balance as of end of year | $12,367 | $5,955 | $4,602 |
Fair_Value_Measurements_Financ
Fair Value Measurements - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value [Member] | Money market funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $189,031 | $189,092 |
Current Liabilities [Member] | Fair Value [Member] | Contingent consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 10,000 | |
Long Term Liabilities [Member] | Fair Value [Member] | Contingent consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 96,000 | |
Level 1 [Member] | Money market funds [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 189,031 | 189,092 |
Level 3 [Member] | Current Liabilities [Member] | Contingent consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | 10,000 | |
Level 3 [Member] | Long Term Liabilities [Member] | Contingent consideration [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingent consideration | $96,000 |
Fair_Value_Measurements_Fair_V
Fair Value Measurements - Fair Value of Other Financial Instruments Not Measured on Recurring Basis (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible Notes | $222,140 | $208,414 |
Fair value, measurements, nonrecurring [Member] | Fair Value [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank deposits (included in "Cash and cash equivalents") | 313,646 | 39,696 |
Convertible Notes | 359,219 | 277,145 |
Fair value, measurements, nonrecurring [Member] | Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Bank deposits (included in "Cash and cash equivalents") | 313,646 | 39,696 |
Fair value, measurements, nonrecurring [Member] | Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Convertible Notes | $359,219 | $277,145 |
Fair_Value_Measurements_Additi
Fair Value Measurements - Additional Information (Detail) (Fair value, measurements, nonrecurring [Member], USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Fair value, measurements, nonrecurring [Member] | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Estimated fair value of the debt | $496.80 | $383.30 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
sqft | sqft | |||
Commitments And Contingencies [Line Items] | ||||
Operating lease office space, in square feet | 142,000 | 142,000 | ||
Lease expiry period | Dec-19 | |||
Rent expense | $8,100,000 | $5,200,000 | $4,600,000 | |
Business acquisition upfront fee | 12,000,000 | |||
Total consideration under current statement of work | 14,800,000 | |||
Estimated of development and manufacturing period | 18 months | |||
CureTech Ltd [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Milestone payment | 5,000,000 | |||
CureTech Ltd [Member] | Pidilizumab [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Business acquisition upfront fee | 3,000,000 | |||
Manufacturing services and supply agreement period | 3 years | |||
Milestone payment | 5,000,000 | |||
Funding for clinical trial materials | 19,300,000 | |||
Collateralized letters of credit [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Outstanding letters of credit collateralized by restricted cash | 11,800,000 | 11,800,000 | 9,900,000 | |
Current asset [Member] | Collateralized letters of credit [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Outstanding letters of credit collateralized by restricted cash | 200,000 | 200,000 | ||
Long-term assets [Member] | Collateralized letters of credit [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Outstanding letters of credit collateralized by restricted cash | 11,600,000 | 11,600,000 | 9,900,000 | |
Corporate Headquarters [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Operating lease office space, in square feet | 127,000 | 127,000 | ||
Optional lease extension term | 5 years | |||
Development milestone payments [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Aggregate milestone payments upon achievement of certain development and regulatory milestone events | 2,800,000 | 2,800,000 | ||
Percentage of sublicensing income | 10.00% | |||
Royalty percentage on sales | 4.00% | |||
Sales milestone payments [Member] | Astellas Pharma Inc. [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Percentage of sublicensing income | 10.00% | |||
Milestone payments eligible to earn | 320,000,000 | |||
Sales milestone payments under collaborative agreement | 50,000,000 | 25,000,000 | ||
Accrued payment to sales milestone payments | $5,000,000 | $2,500,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies - Schedule of Future Operating Lease Obligations (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Leases, 2015 | $8,008 |
Operating Leases, 2016 | 8,170 |
Operating Leases, 2017 | 8,334 |
Operating Leases, 2018 | 8,499 |
Operating Leases, 2019 | 4,431 |
Operating Leases, 2020 and thereafter | 0 |
Total minimum lease payments | $37,442 |
Commitments_and_Contingencies_3
Commitments and Contingencies - Schedule of Future Lease Cash Payments under the Build to Suit Lease (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments and Contingencies Disclosure [Abstract] | |
Build-To-Suit Lease, 2015 | $2,435 |
Build-To-Suit Lease, 2016 | 2,538 |
Build-To-Suit Lease, 2017 | 2,614 |
Build-To-Suit Lease, 2018 | 2,692 |
Build-To-Suit Lease, 2019 | 2,773 |
Build-To-Suit Lease, 2019 and thereafter | 14,162 |
Total minimum lease payments | $27,214 |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data - Selected Quarterly Financial Data (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Statement [Abstract] | |||||||||||
Collaboration revenue | $274,730 | $200,478 | $148,090 | $87,189 | $96,612 | $60,027 | $70,149 | $46,154 | $710,487 | $272,942 | $181,696 |
Operating expenses | -131,253 | -108,595 | -93,139 | -95,654 | -88,587 | -68,025 | -70,095 | -68,476 | -428,641 | -295,183 | -207,910 |
Income (loss) from operations | 143,477 | 91,883 | 54,951 | -8,465 | 8,025 | -7,998 | 54 | -22,322 | 281,846 | -22,241 | -26,214 |
Net income (loss) | $164,205 | $77,993 | $47,919 | ($13,665) | $2,768 | ($13,313) | ($4,898) | ($27,170) | $276,452 | ($42,613) | ($41,257) |
Basic net income (loss) per common share | $2.11 | $1.01 | $0.63 | ($0.18) | $0.04 | ($0.18) | ($0.07) | ($0.36) | $3.59 | ($0.57) | ($0.56) |
Diluted net income (loss) per common share | $1.96 | $0.96 | $0.60 | ($0.18) | $0.03 | ($0.18) | ($0.07) | ($0.36) | $3.42 | ($0.57) | ($0.56) |
Weighted-average common shares used in the calculation of basic net income (loss) per common share | 77,822 | 77,056 | 76,577 | 76,245 | 75,560 | 75,255 | 75,013 | 74,824 | 76,929 | 75,165 | 73,480 |
Weighted-average common shares used in the calculation of diluted net income (loss) per common share | 85,756 | 81,223 | 80,491 | 76,245 | 79,912 | 75,255 | 75,013 | 74,824 | 85,000 | 75,165 | 73,480 |