Vanda Pharmaceuticals (VNDA) 10-Q 31 Jul 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 24, 2015
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2
Trading Symbol	VNDA
Entity Registrant Name	Vanda Pharmaceuticals Inc.
Entity Central Index Key	1,347,178
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		42,285,426

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 48,337	$ 60,901
Marketable securities	98,300	68,921
Accounts receivable, net	15,818	3,654
Inventory	4,962	5,170
Prepaid expenses and other current assets	6,956	3,084
Total current assets	174,373	141,730
Property and equipment, net	3,869	2,437
Intangible assets, net	44,638	26,724
Restricted cash and other	813	813
Total assets	223,693	171,704
Current liabilities:
Accounts payable	1,631	835
Accrued and other current liabilities	43,562	6,951
Total current liabilities	45,193	7,786
Milestone obligation under license agreement	25,000
Other non-current liabilities	3,753	3,101
Total liabilities	$ 73,946	$ 10,887
Commitments and contingencies (Notes 13 and 14)
Stockholders' equity:
Preferred stock, $0.001 par value; 20,000,000 shares authorized, and no shares issued or outstanding
Common stock, $0.001 par value; 150,000,000 shares authorized; 42,270,426 and 41,486,361 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively	$ 42	$ 41
Additional paid-in capital	453,269	448,744
Accumulated other comprehensive income	27	16
Accumulated deficit	(303,591)	(287,984)
Total stockholders' equity	149,747	160,817
Total liabilities and stockholders' equity	$ 223,693	$ 171,704

CONDENSED CONSOLIDATED BALANCE3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	42,270,426	41,486,361
Common stock, shares outstanding	42,270,426	41,486,361

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenues:
Product sales, net	$ 27,582	$ 1,559	$ 49,732	$ 1,559
Royalty revenue		1,539		3,230
Licensing revenue		7,764		15,216
Total revenues	27,582	10,862	49,732	20,005
Operating expenses:
Cost of goods sold	5,766	198	10,781	198
Research and development	5,946	3,514	10,424	10,777
Selling, general and administrative	18,386	28,139	37,192	56,032
Intangible asset amortization	2,942	617	7,086	1,182
Total operating expenses	33,040	32,468	65,483	68,189
Loss from operations	(5,458)	(21,606)	(15,751)	(48,184)
Other income	72	31	144	76
Net loss	$ (5,386)	$ (21,575)	$ (15,607)	$ (48,108)
Basic and diluted net loss per share	$ (0.13)	$ (0.64)	$ (0.37)	$ (1.42)
Weighted average shares outstanding, basic and diluted	41,991,578	33,874,625	41,868,944	33,777,207

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Net loss	$ (5,386)	$ (21,575)	$ (15,607)	$ (48,108)
Other comprehensive income (loss):
Change in net unrealized income (loss) on marketable securities		2	11	(11)
Tax provision on other comprehensive income (loss)	0	0	0	0
Other comprehensive income (loss), net of tax		2	11	(11)
Comprehensive loss	$ (5,386)	$ (21,573)	$ (15,596)	$ (48,119)

CONDENSED CONSOLIDATED STATEME6

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2015 - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Other Comprehensive Income	Accumulated Deficit
Beginning balance (in shares) at Dec. 31, 2014	41,486,361	41,486,361
Beginning balance at Dec. 31, 2014	$ 160,817	$ 41	$ 448,744	$ 16	$ (287,984)
Issuance of common stock from the exercise of stock options and settlement of restricted stock units (in shares)		809,012
Issuance of common stock from the exercise of stock options and settlement of restricted stock units	795	$ 1	794
Shares withheld upon settlement of equity awards(in shares)		(24,947)
Shares withheld upon settlement of equity awards	(282)		(282)
Stock-based compensation expense	4,013		4,013
Net income (loss)	(15,607)				(15,607)
Other comprehensive income, net of tax	$ 11			11
Ending balance (in shares) at Jun. 30, 2015	42,270,426	42,270,426
Ending balance at Jun. 30, 2015	$ 149,747	$ 42	$ 453,269	$ 27	$ (303,591)

CONDENSED CONSOLIDATED STATEME7

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities
Net loss	$ (15,607)	$ (48,108)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization of property and equipment	263	264
Stock-based compensation expense	4,013	2,836
Amortization of discounts and premiums on marketable securities	426	96
Intangible asset amortization	7,086	1,182
Changes in assets and liabilities:
Accounts receivable	(12,164)	(345)
Prepaid expenses and other current assets	(3,872)	(1,463)
Inventory	208	(1,093)
Accounts payable	796	(413)
Accrued and other liabilities	36,193	1,691
Deferred revenue	314	(15,216)
Net cash provided by (used in) operating activities	17,656	(60,569)
Cash flows from investing activities
Purchases of property and equipment	(939)	(378)
Purchases of marketable securities	(81,348)	(20,544)
Proceeds from sale of marketable securities	999	8,198
Maturities of marketable securities	50,555	31,235
Change in restricted cash		245
Net cash provided by (used in) investing activities	(30,733)	10,756
Cash flows from financing activities
Obligations paid in connection with settlement of equity awards	(282)	(436)
Proceeds from exercise of stock options	795	2,479
Net cash provided by financing activities	513	2,043
Net decrease in cash and cash equivalents	(12,564)	(47,770)
Cash and cash equivalents
Beginning of period	60,901	64,764
End of period	48,337	16,994
Non-cash investing activities
Acquisition of intangible asset included in non-current liabilities	25,000
Purchases of property and equipment in current liabilities	759	20
Hetlioz
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Intangible asset amortization	$ 2,100
Cash flows from investing activities
Acquisition of intangible assets		$ (8,000)

Business Organization and Prese

Business Organization and Presentation	6 Months Ended
	Jun. 30, 2015
Business Organization and Presentation	1. Business Organization and Presentation Business Organization Vanda Pharmaceuticals Inc. (Vanda or the Company) is a biopharmaceutical company focused on the development and commercialization of products for the treatment of central nervous system disorders. Vanda commenced its operations in 2003 and the Company’s portfolio includes the following products: • HETLIOZ ® ® ® • Fanapt ® ® Settlement Agreement with Novartis ® • Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist, which is presently in clinical development for the treatment of chronic pruritus in atopic dermatitis. • Trichostatin A, a small molecule histone deacetylase (HDAC) inhibitor. • AQW051, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements for the fiscal year ended December 31, 2014 included in the Company’s annual report on Form 10-K. The financial information as of June 30, 2015 and for the three and six months ended June 30, 2015 and 2014 is unaudited, but in the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair statement of the results for these interim periods have been included. The condensed consolidated balance sheet data as of December 31, 2014 was derived from audited financial statements but does not include all disclosures required by GAAP. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or for a full fiscal year. The financial information included herein should be read in conjunction with the consolidated financial statements and notes in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2014.

Summary of Significant Accounti

Summary of Significant Accounting Policies	6 Months Ended
	Jun. 30, 2015
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Inventory Inventory, which is recorded at the lower of cost or market, includes the cost of third-party manufacturing and other direct and indirect costs and is valued using the first-in, first-out method. The Company capitalizes inventory costs associated with its products upon regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. Inventory is evaluated for impairment by consideration of factors such as lower of cost or market, net realizable value, obsolescence or expiry. Net Product Sales The Company’s net product sales consist of sales of HETLIOZ ® ® Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, (in thousands) 2015 2014 2015 2014 HETLIOZ ® $ 10,017 $ 1,559 $ 17,477 $ 1,559 Fanapt ® 17,565 — 32,255 — $ 27,582 $ 1,559 $ 49,732 $ 1,559 The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 605-15, Revenue Recognition—Products HETLIOZ ® ® The Company has entered into distribution agreements with Probiomed S.A. de C.V. (Probiomed) for the commercialization of Fanapt ® ® ® ® ® ® ® Product Sales Discounts and Allowances The Company’s product sales are recorded net of applicable discounts, chargebacks, rebates, co-pay assistance, service fees and product returns that are applicable for various government and commercial payors. Reserves established for discounts and returns are classified as reductions of accounts receivable if the amount is payable to direct customers, with the exception of service fees. Service fees are classified as a liability. Reserves established for chargebacks, rebates or co-pay assistance are classified as a liability if the amount is payable to a party other than customers. The Company currently records sales allowances for the following: Rebates: Chargebacks: Medicare Part D Coverage Gap: Service Fees: Co-payment Assistance: Prompt-pay: Product Returns: Stock-based Compensation Compensation costs for all stock-based awards to employees and directors are measured based on the grant date fair value of those awards and recognized over the period during which the employee or director is required to perform service in exchange for the award. The Company generally recognizes the expense over the award’s vesting period. The fair value of restricted stock units (RSUs) awarded is also amortized using the straight line method. Stock-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest. Therefore, it has been reduced for estimated forfeitures. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Advertising Expense The Company expenses the costs of advertising, including branded promotional expenses, as incurred. Branded advertising expenses, recorded in selling, general and administrative expenses, were $0.9 million and $3.3 million for the three months ended June 30, 2015 and 2014, respectively, and $1.9 million and $4.3 million for the six months ended June 30, 2015 and 2014, respectively. Segment Reporting The Company operates in one reporting segment and, accordingly, no segment disclosures are presented herein. Recent accounting pronouncements In January 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-01, Income Statement-Extraordinary and Unusual Items In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606)

Settlement Agreement with Novar

Settlement Agreement with Novartis	6 Months Ended
	Jun. 30, 2015
Settlement Agreement with Novartis	3. Settlement Agreement with Novartis In May 2014, the Company commenced arbitration proceedings with Novartis relating to the license of Fanapt ® ® ® ® Pursuant to the stock purchase agreement entered into as part of the Settlement Agreement, Novartis purchased $25.0 million of the Company’s common stock. The Company issued to Novartis an aggregate of 1,808,973 shares at $13.82 per share, which per share represented a 10% premium to the average closing prices of the Company’s common stock for the ten trading days prior to December 22, 2014. The Company recorded a loss of $0.9 million as part of gain on arbitration settlement in the consolidated statement of operations for the period ending December 31, 2014 related to the issuance of stock, which was valued using the Company’s closing stock price on December 31, 2014, the effective date of the transaction. In connection with the Settlement Agreement, the Company received an exclusive worldwide license under certain patents and patent applications, and other licenses to intellectual property, to develop and commercialize AQW051. Under the AQW051 license agreement, the Company is obligated to use its commercially reasonable efforts to develop and commercialize AQW051 and is responsible for all development costs under the AQW051 license agreement. Novartis is eligible to receive tiered-royalties on net sales at percentage rates up to the mid-teens. The Company evaluated AQW051 and determined that the asset is both incomplete and has substance. However, given the early stage of AQW051 and the future costs of development, no transaction value was allocated to this asset. The Company accounted for the Settlement Agreement in accordance with the provisions of ASC Subtopic 805, Business Combinations The following summarizes the fair value of consideration exchanged as part of the Settlement Agreement: (in thousands) Equity issued $ 25,904 Cash received (25,000 ) Settlement of pre-existing non-contractual relationship 18,087 $ 18,991 Assets acquired and recorded at fair value as of December 31, 2014 were as follows: (in thousands) Inventory $ 2,960 Intangible - Re-acquired right 15,940 Prepaid services 91 $ 18,991 The Company recorded the reacquired right as an intangible asset as of December 31, 2014. The Company is amortizing the reacquired right on a straight-line basis through November 2016. Due to the effective date of the Settlement Agreement being December 31, 2014, the Company did not recognize any revenue or operating expenses related to U.S. or Canadian commercial sales of Fanapt ® In connection with the Settlement Agreement, the Company and Novartis terminated the 2009 Amended Sublicense Agreement (the 2009 Agreement). Given the termination of this pre-existing contractual relationship and that there is no further obligation under the 2009 Agreement, the Company recognized a gain of $59.5 million, representing the remaining deferred revenue related to the $200.0 million upfront payment received from Novartis under the 2009 Agreement. This amount was included in gain on arbitration settlement in the consolidated statement of operations in the fourth quarter of 2014. The Settlement Agreement provided for a mutual release of claims and dismissed the Fanapt ®

Earnings per Share

Earnings per Share	6 Months Ended
	Jun. 30, 2015
Earnings per Share	4. Earnings per Share Basic earnings per share (EPS) is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding. Diluted EPS is computed by dividing the net loss by the weighted average number of shares of common stock outstanding, plus potential outstanding common stock for the period. Potential outstanding common stock includes stock options and shares underlying RSUs, but only to the extent that their inclusion is dilutive. The following table presents the calculation of basic and diluted net loss per share of common stock for the three and six months ended June 30, 2015 and 2014: Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, (in thousands, except for share and per share amounts) 2015 2014 2015 2014 Numerator: Net loss $ (5,386 ) $ (21,575 ) $ (15,607 ) $ (48,108 ) Denominator: Weighted average shares outstanding, basic and diluted 41,991,578 33,874,625 41,868,944 33,777,207 Net loss per share, basic and diluted: Net loss per share $ (0.13 ) $ (0.64 ) $ (0.37 ) $ (1.42 ) Antidilutive securities excluded from calculations of diluted net loss per share 5,765,618 3,739,874 5,711,140 3,805,191 The Company incurred net losses for the three and six months ended June 30, 2015 and 2014 causing inclusion of any potentially dilutive securities to have an anti-dilutive effect, resulting in dilutive loss per share and basic loss per share attributable to common stockholders being equivalent.

Marketable Securities

Marketable Securities	6 Months Ended
	Jun. 30, 2015
Marketable Securities	5. Marketable Securities The following is a summary of the Company’s available-for-sale marketable securities as of June 30, 2015, which all have contract maturities of less than one year: Gross Gross Fair June 30, 2015 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 54,628 $ 7 $ (2 ) $ 54,633 Corporate debt 43,645 26 (4 ) 43,667 $ 98,273 $ 33 $ (6 ) $ 98,300 The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2014: Gross Gross Fair December 31, 2014 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 30,618 $ 4 $ (4 ) $ 30,618 Corporate debt 38,287 25 (9 ) 38,303 $ 68,905 $ 29 $ (13 ) $ 68,921

Fair Value Measurements

Fair Value Measurements	6 Months Ended
	Jun. 30, 2015
Fair Value Measurements	6. Fair Value Measurements Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: • Level 1 — defined as observable inputs such as quoted prices in active markets • Level 2 — defined as inputs other than quoted prices in active markets that are either directly or indirectly observable • Level 3 — defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions Marketable securities classified in Level 1 and Level 2 as of June 30, 2015 and December 31, 2014 consist of available-for-sale marketable securities. The valuation of Level 1 instruments is determined using a market approach, and is based upon unadjusted quoted prices for identical assets in active markets. The valuation of investments classified in Level 2 also is determined using a market approach based upon quoted prices for similar assets in active markets, or other inputs that are observable for substantially the full term of the financial instrument. Level 2 securities include certificates of deposit, commercial paper and corporate notes that use as their basis readily observable market parameters. The Company did not transfer any assets between Level 2 and Level 1 during the six months ended June 30, 2015. As of June 30, 2015, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of June 30, 2015 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable June 30, Identical Assets Observable Inputs Inputs (in thousands) 2015 (Level 1) (Level 2) (Level 3) Available-for-sale securities $ 98,300 $ 54,633 $ 43,667 $ — As of December 31, 2014, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of December 31, 2014 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs (in thousands) 2014 (Level 1) (Level 2) (Level 3) Available-for-sale securities $ 68,921 $ 30,618 $ 38,303 $ — The Company also has financial assets and liabilities, not required to be measured at fair value on a recurring basis, which primarily consist of cash and cash equivalents, accounts receivable, restricted cash, accounts payable and accrued liabilities, the carrying value of which materially approximate their fair values.

Inventory

Inventory	6 Months Ended
	Jun. 30, 2015
Inventory	7. Inventory The Company evaluates expiry risk by evaluating current and future product demand relative to product shelf life. The Company builds demand forecasts by considering factors such as, but not limited to, overall market potential, market share, market acceptance and patient usage. Inventory consisted of the following as of June 30, 2015 and December 31, 2014: June 30, December 31, (in thousands) 2015 2014 Raw materials $ 128 $ 198 Work-in-process 1,778 1,326 Finished goods 2,646 3,394 Deferred cost of goods sold 410 252 $ 4,962 $ 5,170 Deferred cost of goods sold represents the cost of product shipped to Probiomed, for which revenue recognition has been deferred. See Note 2, Summary of Significant Accounting Policies ®

Prepaid Expenses and Other Curr

Prepaid Expenses and Other Current Assets	6 Months Ended
	Jun. 30, 2015
Prepaid Expenses and Other Current Assets	8. Prepaid Expenses and Other Current Assets The following is a summary of the Company’s prepaid expenses and other current assets as of June 30, 2015 and December 31, 2014: June 30, December 31, (in thousands) 2015 2014 Prepaid insurance $ 928 $ 270 Prepaid manufacturing cost 346 358 Other prepaid expenses and vendor advances 5,363 2,302 Other current assets 319 154 $ 6,956 $ 3,084

Intangible Assets

Intangible Assets	6 Months Ended
	Jun. 30, 2015
Intangible Assets	9. Intangible Assets The following is a summary of the Company’s intangible assets as of June 30, 2015: June 30, 2015 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® January 2033 $ 33,000 $ 2,600 $ 30,400 Fanapt ® November 2016 27,941 13,703 14,238 $ 60,941 $ 16,303 $ 44,638 The following is a summary of the Company’s intangible assets as of December 31, 2014: December 31, 2014 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® January 2033 $ 8,000 $ 539 $ 7,461 Fanapt ® November 2016 27,941 8,678 19,263 $ 35,941 $ 9,217 $ 26,724 In January 2014, the Company announced that the FDA had approved the NDA for HETLIOZ ® ® ® ® The Company is obligated to make a future milestone payment to BMS of $25.0 million in the event that cumulative worldwide sales of HETLIOZ ® ® ® ® ® ® ® In 2009, the Company announced that the FDA had approved the NDA for Fanapt ® ® Pursuant to the Settlement Agreement, Novartis transferred all U.S. and Canadian rights in the Fanapt ® ® ® ® Settlement Agreement with Novartis The intangible assets are being amortized over their estimated useful economic life using the straight-line method. Amortization expense was $2.9 million and $0.6 million for the three months ended June 30, 2015 and 2014, respectively, and $7.1 million and $1.2 million for the six months ended June 30, 2015 and 2014, respectively. The following is a summary of the future intangible asset amortization schedule as of June 30, 2015: Remainder (in thousands) Total of 2015 2016 2017 2018 2019 Thereafter HETLIOZ ® $ 30,400 $ 860 $ 1,721 $ 1,721 $ 1,721 $ 1,721 $ 22,656 Fanapt ® 14,238 5,025 9,213 — — — — $ 44,638 $ 5,885 $ 10,934 $ 1,721 $ 1,721 $ 1,721 $ 22,656

Accrued Liabilities

Accrued Liabilities	6 Months Ended
	Jun. 30, 2015
Accrued Liabilities	10. Accrued Liabilities The following is a summary of the Company’s accrued liabilities as of June 30, 2015 and December 31, 2014: June 30, December 31, (in thousands) 2015 2014 Accrued sales allowances $ 28,738 $ 495 Accrued research and development expenses 1,953 1,759 Accrued consulting and other professional fees 4,475 2,522 Compensation and employee benefits 1,888 388 Royalties payable 5,000 602 Other accrued liabilities 1,508 1,185 $ 43,562 $ 6,951

Deferred Revenue

Deferred Revenue	6 Months Ended
	Jun. 30, 2015
Deferred Revenue	11. Deferred Revenue The following is a summary of changes in total deferred revenue for the six months ended June 30, 2015 and 2014: Six Months Ended June 30, June 30, (in thousands) 2015 2014 Balance beginning of period $ 174 $ 90,275 Deferred Fanapt ® 314 — Licensing revenue recognized — 15,216 Balance end of period $ 488 $ 75,059 The Company entered into an amended and restated sublicense agreement with Novartis in 2009, pursuant to which Novartis had the right to commercialize and develop Fanapt ® ® ® Settlement Agreement with Novartis

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2015
Income Taxes	12. Income Taxes Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The fact that the Company has historically generated net operating losses (NOLs) serves as strong evidence that it is more likely than not that deferred tax assets will not be realized in the future. Therefore, the Company has a full valuation allowance against all deferred tax assets as of June 30, 2015 and December 31, 2014. Changes in ownership may limit the amount of NOL carryforwards that can be utilized in the future to offset taxable income. Ownership changes did occur as of December 31, 2008 and December 31, 2014. The Company determined that there was sufficient Built-In-Gain as of December 31, 2008 to offset the Internal Revenue Code of 1986, as amended (IRC), Section 382 limitation generated by the ownership change. The Company believes that there is sufficient Built-In-Gain as of December 31, 2014 to offset the IRC Section 382 limitation generated by the ownership change. Any future ownership changes may cause the Company’s existing tax attributes to have additional limitations.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2015
Commitments and Contingencies	13. Commitments and Contingencies Operating leases The following is a summary of the minimum annual future payments under operating leases as of June 30, 2015: Remainder (in thousands) Total of 2015 2016 2017 2018 2019 Thereafter Operating leases $ 14,051 $ 736 $ 1,500 $ 1,538 $ 1,576 $ 1,616 $ 7,085 The minimum annual future payments for operating leases consists of the lease for office space for the Company’s headquarters located in Washington, D.C., which expires in 2023. In 2011, the Company entered into an office lease with Square 54 Office Owner LLC (the Landlord) for Vanda’s current headquarters, consisting of 21,400 square feet at 2200 Pennsylvania Avenue, N.W. in Washington, D.C. (the Lease). Subject to the prior rights of other tenants in the building, the Company has the right to renew the Lease for five years following the expiration of its original term. The Company has the right to sublease or assign all or a portion of the premises, subject to standard conditions. The Lease may be terminated early by the Company or the Landlord upon certain conditions. In March 2014, the Company and the Landlord entered into a lease amendment (the Lease Amendment). Under the Lease Amendment, the Company has the right to occupy an additional 8,860 square feet in the building. The Lease Amendment has a 12 year and one month term beginning on September 1, 2014, but may be terminated early by either the Landlord or the Company upon certain conditions. The Company will pay approximately $0.4 million in additional annual rent over the term of the Lease Amendment; however, rent was abated for the first nine months of the amended lease ending on June 30, 2015. The Landlord provided the Company with a cash allowance of $0.8 million for tenant improvements. The allowance for tenant improvements is reflected in the consolidated financial statements as an increase to the deferred rent liability for the six months ended June 30, 2015. Subject to the prior rights of other tenants in the building, the Company will have the right to renew the Lease Amendment for five years following the expiration of its original term. The Company will also have the right to sublease or assign all or a portion of the premises, subject to standard conditions. Rent expense under operating leases, was $0.5 million and $0.4 million for the three months ended June 30, 2015 and 2014, respectively, and $0.9 million and $0.8 million for the six months ended June 30, 2015 and 2014, respectively. Guarantees and indemnifications The Company has entered into a number of standard intellectual property indemnification agreements in the ordinary course of its business. Pursuant to these agreements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the Company’s business partners or customers, in connection with any U.S. patent or any copyright or other intellectual property infringement claim by any third party with respect to the Company’s products. The term of these indemnification agreements is generally perpetual from the date of execution of the agreement. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited. Since inception, the Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. The Company also indemnifies its officers and directors for certain events or occurrences, subject to certain conditions. License agreements The Company’s rights to develop and commercialize its products are subject to the terms and conditions of licenses granted to the Company by other pharmaceutical companies. HETLIOZ ® . ® ® ® ® ® ® ® ® ® ® ® ® The license agreement was amended in April 2013 to add a process that would allow BMS to waive the right to develop and commercialize HETLIOZ ® ® Either party may terminate the HETLIOZ ® Fanapt ® . ® A predecessor company of Sanofi, Hoechst Marion Roussel, Inc. (HMRI) discovered Fanapt ® ® ® ® ® In October 2009, the Company entered into an amended and restated sublicense agreement with Novartis, which amended and restated the June 2004 sublicense agreement. Pursuant to the amended and restated sublicense agreement, Novartis has exclusive commercialization rights to all formulations of Fanapt ® ® ® ® ® ® The Company has entered into agreements with the following partners for the commercialization of Fanapt ® Country Partner Market Approval Date Mexico Probiomed S.A. de C.V. October 2013 Israel Megapharm Ltd. August 2012 Pursuant to the terms of the Settlement Agreement, Novartis transferred all U.S. and Canadian rights in the Fanapt ® ® ® Settlement Agreement with Novartis Tradipitant. Pursuant to the license agreement, the Company paid Lilly an initial license fee of $1.0 million and will be responsible for all development costs. The initial license fee was recognized as research and development expense in the consolidated statement of operations for the year ended December 31, 2012. Lilly is also eligible to receive additional payments based upon achievement of specified development and commercialization milestones as well as tiered-royalties on net sales at percentage rates up to the low double digits. These milestones include $4.0 million for pre-NDA approval milestones and up to $95.0 million for future regulatory approval and sales milestones. Vanda is obligated to use its commercially reasonable efforts to develop and commercialize tradipitant. Either party may terminate the license agreement under certain circumstances, including a material breach of the license agreement by the other. In the event that Vanda terminates the license agreement, or if Lilly terminates due to Vanda’s breach or for certain other reasons set forth in the license agreement, all rights licensed and developed by Vanda under the license agreement will revert or otherwise be licensed back to Lilly on an exclusive basis, subject to payment by Lilly to the Company of a royalty on net sales of products that contain tradipitant. AQW051. Pursuant to the license agreement, the Company is obligated to use its commercially reasonable efforts to develop and commercialize AQW051 and is responsible for all development costs under the AQW051 license agreement. The Company has no milestone obligations; however, Novartis is eligible to receive tiered-royalties on net sales at percentage rates up to the mid-teens. Research and development and marketing agreements In the course of its business, the Company regularly enters into agreements with clinical organizations to provide services relating to clinical development and clinical manufacturing activities under fee service arrangements. The Company’s current agreements for clinical services may be terminated on generally 60 days’ notice without incurring additional charges, other than charges for work completed but not paid for through the effective date of termination and other costs incurred by the Company’s contractors in closing out work in progress as of the effective date of termination.

Legal Matters

Legal Matters	6 Months Ended
	Jun. 30, 2015
Legal Matters	14. Legal Matters In June 2014, the Company filed suit against Roxane Laboratories, Inc. (Roxane) in the U.S. District Court for the District of Delaware. The suit seeks an adjudication that Roxane has infringed one or more claims of the Company’s U.S. Patent No. 8,586,610 (the Patent) by submitting to the FDA an Abbreviated New Drug Application (ANDA) for generic versions of Fanapt ® ® Pursuant to the Settlement Agreement, the Company assumed Novartis’ patent infringement action against Roxane in the U.S. District Court for the District of Delaware. The suit alleges that Roxane’s filing of an ANDA for generic iloperidone with a paragraph IV certification infringes Sanofi’s new chemical entity patent. Roxane is defending on the grounds that the patent claims are invalid or unenforceable or that certain patent claims are not infringed. Roxane also filed a motion to dismiss on the grounds that the court lacks jurisdiction. The two pending cases against Roxane were consolidated by agreement of the parties in April 2015 and are scheduled to be tried together in a four-day bench trial beginning on February 29, 2016. In May 2015, the Company filed a lawsuit against Inventia Healthcare Pvt. Ltd. (Inventia) in the U.S. District Court for the District of Delaware. The suit seeks an adjudication that Inventia has infringed on one or more claims of one of the Company’s patents by submitting to the FDA an ANDA for a generic version of Fanapt ® ®

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2015
Stock-Based Compensation	15. Stock-Based Compensation Compensation costs for all stock-based awards to employees and directors are measured based on the grant date fair value of those awards and recognized over the period during which the employee or director is required to perform service in exchange for the award. The Company recognizes the expense over the award’s vesting period. The fair value of stock options granted and RSUs awarded are amortized using the straight-line method. As stock-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The fair value of each option award is estimated on the date of grant using the Black-Scholes-Merton option pricing model that uses the assumptions noted in the following table. Expected volatility rates are based on the historical volatility of the Company’s publicly traded common stock and other factors. The risk-free interest rates are based on the U.S. Treasury yield for a period consistent with the expected term of the option in effect at the time of the grant. The Company has not paid dividends to its stockholders since its inception (other than a dividend of preferred share purchase rights, which was declared in September 2008) and does not plan to pay dividends in the foreseeable future. Assumptions used in the Black-Scholes-Merton option pricing model for stock options granted during the six months ended June 30, 2015 and 2014 were as follows: Six Months Ended June 30, June 30, 2015 2014 Expected dividend yield 0 % 0 % Weighted average expected volatility 61 % 64 % Weighted average expected term (years) 5.99 5.83 Weighted average risk-free rate 1.61 % 1.77 % Weighted average fair value per share $ 6.15 $ 7.14 Total stock-based compensation expense related to stock-based awards for the three and six months ended June 30, 2015 and 2014 was comprised of the following: Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, (in thousands) 2015 2014 2015 2014 Research and development $ 603 $ 454 $ 1,227 $ 935 Selling, general and administrative 1,465 989 2,786 1,901 $ 2,068 $ 1,443 $ 4,013 $ 2,836 As of June 30, 2015, the Company had two equity incentive plans, the Second Amended and Restated Management Equity Plan (the 2004 Plan) and the 2006 Equity Incentive Plan (the 2006 Plan) that were adopted in December 2004 and April 2006, respectively. There were 198,148 shares subject to outstanding options granted under the 2004 Plan as of June 30, 2015, and no additional options will be granted under the 2004 Plan. As of June 30, 2015, there were 11,829,472 shares of the Company’s common stock reserved for issuance under the 2006 Plan, of which 7,641,146 shares were subject to outstanding options and RSUs and 1,713,842 shares remained available for future grant. On January 1 of each year, the number of shares reserved under the 2006 Plan is automatically increased by the lesser of 4% of the total number of shares of common stock that are outstanding at that time or 1,500,000 shares (or such lesser number as may be approved by the Company’s board of directors). As of January 1, 2015, the number of shares of common stock that may be issued under the 2006 Plan was automatically increased by 1,500,000 shares, increasing the number of shares of common stock available for issuance under the Plan to 11,829,472 shares. The Company has granted option awards with service conditions (service option awards) that are subject to terms and conditions established by the compensation committee of the board of directors. Service option awards have 10-year contractual terms and all service option awards granted prior to December 31, 2006, service option awards granted to new employees, and certain service option awards granted to existing employees vest and become exercisable on the first anniversary of the grant date with respect to the 25% of the shares subject to service option awards. The remaining 75% of the shares subject to the service option awards vest and become exercisable monthly in equal installments thereafter over three years. Certain service option awards granted to existing employees after December 31, 2006 vest and become exercisable monthly in equal installments over four years. The initial service option awards granted to directors upon their election vest and become exercisable in equal monthly installments over a period of four years, while the subsequent annual service option awards granted to directors vest and become exercisable in equal monthly installments over a period of one year. Certain service option awards to executives and directors provide for accelerated vesting if there is a change in control of the Company. Certain service option awards to employees and executives provide for accelerated vesting if the respective employee’s or executive’s service is terminated by the Company for any reason other than cause or permanent disability. As of June 30, 2015, $14.8 million of unrecognized compensation costs related to unvested service option awards are expected to be recognized over a weighted average period of 1.6 years. No option awards are classified as a liability as of June 30, 2015. A summary of option activity for the 2004 Plan for the six months ended June 30, 2015 follows: 2004 Option Plan Weighted Average Weighted Average Aggregate Number of Exercise Price at Remaining Term Intrinsic (in thousands, except for share and per share amounts) Shares Grant Date (Years) Value Outstanding at December 31, 2014 652,810 1.74 0.78 8,212 Exercised (454,662 ) 0.44 4,559 Outstanding at June 30, 2015 198,148 4.73 0.50 4,455 Exercisable at June 30, 2015 198,148 4.73 0.50 1,577 Vested and expected to vest at June 30, 2015 198,148 4.73 0.50 1,577 A summary of option activity for the 2006 Plan for the six months ended June 30, 2015 follows: 2006 Option Plan Weighted Average Weighted Average Aggregate Number of Exercise Price at Remaining Term Intrinsic (in thousands, except for share and per share amounts) Shares Grant Date (Years) Value Outstanding at December 31, 2014 6,227,112 11.58 6.71 28,523 Granted 721,500 11.35 Forfeited (166,606 ) 11.10 Expired (2,409 ) 11.70 Exercised (123,257 ) 5.32 794 Outstanding at June 30, 2015 6,656,340 11.68 6.52 19,773 Exercisable at June 30, 2015 4,151,650 12.20 5.02 14,830 Vested and expected to vest at June 30, 2015 6,456,458 11.69 6.43 19,516 Proceeds from the exercise of stock options amounted to $0.8 million for the six months ended June 30, 2015. An RSU is a stock award that entitles the holder to receive shares of the Company’s common stock as the award vests. The fair value of each RSU is based on the closing price of the Company’s stock on the date of grant. The Company has granted RSUs with service conditions (service RSUs) that vest in four equal annual installments provided that the employee remains employed with the Company. As of June 30, 2015, $9.2 million of unrecognized compensation costs related to unvested service RSUs are expected to be recognized over a weighted average period of 2.0 years. No service RSUs are classified as a liability as of June 30, 2015. A summary of RSU activity for the 2006 Plan for the six months ended June 30, 2015 follows: RSUs Number of Weighted Shares Average Underlying Grant Date RSUs Fair Value Unvested at December 31, 2014 1,025,961 $ 9.94 Granted 253,000 11.23 Forfeited (63,062 ) 10.88 Vested (231,093 ) 7.96 Unvested at June 30, 2015 984,806 10.67 The grant date fair value for the 231,093 shares underlying RSUs that vested during the six months ended June 30, 2015 was $1.8 million.

Business Organization and Pre23

Business Organization and Presentation (Policies)	6 Months Ended
	Jun. 30, 2015
Business Organization	Business Organization Vanda Pharmaceuticals Inc. (Vanda or the Company) is a biopharmaceutical company focused on the development and commercialization of products for the treatment of central nervous system disorders. Vanda commenced its operations in 2003 and the Company’s portfolio includes the following products: • HETLIOZ ® ® ® • Fanapt ® ® Settlement Agreement with Novartis ® • Tradipitant (VLY-686), a small molecule neurokinin-1 receptor (NK-1R) antagonist, which is presently in clinical development for the treatment of chronic pruritus in atopic dermatitis. • Trichostatin A, a small molecule histone deacetylase (HDAC) inhibitor. • AQW051, a Phase II alpha-7 nicotinic acetylcholine receptor partial agonist.
Basis of Presentation	Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s consolidated financial statements for the fiscal year ended December 31, 2014 included in the Company’s annual report on Form 10-K. The financial information as of June 30, 2015 and for the three and six months ended June 30, 2015 and 2014 is unaudited, but in the opinion of management, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair statement of the results for these interim periods have been included. The condensed consolidated balance sheet data as of December 31, 2014 was derived from audited financial statements but does not include all disclosures required by GAAP. The results of the Company’s operations for any interim period are not necessarily indicative of the results that may be expected for any other interim period or for a full fiscal year. The financial information included herein should be read in conjunction with the consolidated financial statements and notes in the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2014.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates that affect the reported amounts of assets and liabilities at the date of the financial statements, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Inventory	Inventory Inventory, which is recorded at the lower of cost or market, includes the cost of third-party manufacturing and other direct and indirect costs and is valued using the first-in, first-out method. The Company capitalizes inventory costs associated with its products upon regulatory approval when, based on management’s judgment, future commercialization is considered probable and the future economic benefit is expected to be realized; otherwise, such costs are expensed as research and development. Inventory is evaluated for impairment by consideration of factors such as lower of cost or market, net realizable value, obsolescence or expiry.
Net Product Sales	Net Product Sales The Company’s net product sales consist of sales of HETLIOZ ® ® Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, (in thousands) 2015 2014 2015 2014 HETLIOZ ® $ 10,017 $ 1,559 $ 17,477 $ 1,559 Fanapt ® 17,565 — 32,255 — $ 27,582 $ 1,559 $ 49,732 $ 1,559 The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 605-15, Revenue Recognition—Products HETLIOZ ® ® The Company has entered into distribution agreements with Probiomed S.A. de C.V. (Probiomed) for the commercialization of Fanapt ® ® ® ® ® ® ® Product Sales Discounts and Allowances The Company’s product sales are recorded net of applicable discounts, chargebacks, rebates, co-pay assistance, service fees and product returns that are applicable for various government and commercial payors. Reserves established for discounts and returns are classified as reductions of accounts receivable if the amount is payable to direct customers, with the exception of service fees. Service fees are classified as a liability. Reserves established for chargebacks, rebates or co-pay assistance are classified as a liability if the amount is payable to a party other than customers. The Company currently records sales allowances for the following: Rebates: Chargebacks: Medicare Part D Coverage Gap: Service Fees: Co-payment Assistance: Prompt-pay: Product Returns:
Stock-based Compensation	Stock-based Compensation Compensation costs for all stock-based awards to employees and directors are measured based on the grant date fair value of those awards and recognized over the period during which the employee or director is required to perform service in exchange for the award. The Company generally recognizes the expense over the award’s vesting period. The fair value of restricted stock units (RSUs) awarded is also amortized using the straight line method. Stock-based compensation expense recognized in the consolidated statements of operations is based on awards ultimately expected to vest. Therefore, it has been reduced for estimated forfeitures. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.
Advertising Expense	Advertising Expense The Company expenses the costs of advertising, including branded promotional expenses, as incurred. Branded advertising expenses, recorded in selling, general and administrative expenses, were $0.9 million and $3.3 million for the three months ended June 30, 2015 and 2014, respectively, and $1.9 million and $4.3 million for the six months ended June 30, 2015 and 2014, respectively.
Segment Reporting	Segment Reporting The Company operates in one reporting segment and, accordingly, no segment disclosures are presented herein.
Recent accounting pronouncements	Recent accounting pronouncements In January 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2015-01, Income Statement-Extraordinary and Unusual Items In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606)

Summary of Significant Accoun24

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2015
Net Sales by Product	The Company’s net product sales consist of sales of HETLIOZ ® ® Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, (in thousands) 2015 2014 2015 2014 HETLIOZ ® $ 10,017 $ 1,559 $ 17,477 $ 1,559 Fanapt ® 17,565 — 32,255 — $ 27,582 $ 1,559 $ 49,732 $ 1,559

Settlement Agreement with Nov25

Settlement Agreement with Novartis (Tables)	6 Months Ended
	Jun. 30, 2015
Fair Value of Consideration Exchanged as Part of Settlement Agreement	The following summarizes the fair value of consideration exchanged as part of the Settlement Agreement: (in thousands) Equity issued $ 25,904 Cash received (25,000 ) Settlement of pre-existing non-contractual relationship 18,087 $ 18,991
Assets Acquired and Recorded at Fair Value	Assets acquired and recorded at fair value as of December 31, 2014 were as follows: (in thousands) Inventory $ 2,960 Intangible - Re-acquired right 15,940 Prepaid services 91 $ 18,991

Earnings per Share (Tables)

Earnings per Share (Tables)	6 Months Ended
	Jun. 30, 2015
Basic and Diluted Net Loss Per Share of Common Stock	The following table presents the calculation of basic and diluted net loss per share of common stock for the three and six months ended June 30, 2015 and 2014: Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, (in thousands, except for share and per share amounts) 2015 2014 2015 2014 Numerator: Net loss $ (5,386 ) $ (21,575 ) $ (15,607 ) $ (48,108 ) Denominator: Weighted average shares outstanding, basic and diluted 41,991,578 33,874,625 41,868,944 33,777,207 Net loss per share, basic and diluted: Net loss per share $ (0.13 ) $ (0.64 ) $ (0.37 ) $ (1.42 ) Antidilutive securities excluded from calculations of diluted net loss per share 5,765,618 3,739,874 5,711,140 3,805,191

Marketable Securities (Tables)

Marketable Securities (Tables)	6 Months Ended
	Jun. 30, 2015
Summary of Available-for-Sale Marketable Securities	The following is a summary of the Company’s available-for-sale marketable securities as of June 30, 2015, which all have contract maturities of less than one year: Gross Gross Fair June 30, 2015 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 54,628 $ 7 $ (2 ) $ 54,633 Corporate debt 43,645 26 (4 ) 43,667 $ 98,273 $ 33 $ (6 ) $ 98,300 The following is a summary of the Company’s available-for-sale marketable securities as of December 31, 2014: Gross Gross Fair December 31, 2014 Amortized Unrealized Unrealized Market (in thousands) Cost Gains Losses Value U.S. Treasury and government agencies $ 30,618 $ 4 $ (4 ) $ 30,618 Corporate debt 38,287 25 (9 ) 38,303 $ 68,905 $ 29 $ (13 ) $ 68,921

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	6 Months Ended
	Jun. 30, 2015
Assets Measured at Fair Value on Recurring Basis	As of June 30, 2015, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of June 30, 2015 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable June 30, Identical Assets Observable Inputs Inputs (in thousands) 2015 (Level 1) (Level 2) (Level 3) Available-for-sale securities $ 98,300 $ 54,633 $ 43,667 $ — As of December 31, 2014, the Company held certain assets that are required to be measured at fair value on a recurring basis, as follows: Fair Value Measurement as of December 31, 2014 Using Quoted Prices in Significant Active Markets for Significant Other Unobservable December 31, Identical Assets Observable Inputs Inputs (in thousands) 2014 (Level 1) (Level 2) (Level 3) Available-for-sale securities $ 68,921 $ 30,618 $ 38,303 $ —

Inventory (Tables)

Inventory (Tables)	6 Months Ended
	Jun. 30, 2015
Inventory	Inventory consisted of the following as of June 30, 2015 and December 31, 2014: June 30, December 31, (in thousands) 2015 2014 Raw materials $ 128 $ 198 Work-in-process 1,778 1,326 Finished goods 2,646 3,394 Deferred cost of goods sold 410 252 $ 4,962 $ 5,170

Prepaid Expenses and Other Cu30

Prepaid Expenses and Other Current Assets (Tables)	6 Months Ended
	Jun. 30, 2015
Summary of Prepaid Expenses, and Other Current Assets	The following is a summary of the Company’s prepaid expenses and other current assets as of June 30, 2015 and December 31, 2014: June 30, December 31, (in thousands) 2015 2014 Prepaid insurance $ 928 $ 270 Prepaid manufacturing cost 346 358 Other prepaid expenses and vendor advances 5,363 2,302 Other current assets 319 154 $ 6,956 $ 3,084

Intangible Assets (Tables)

Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2015
Summary of Intangible Assets	The following is a summary of the Company’s intangible assets as of June 30, 2015: June 30, 2015 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® January 2033 $ 33,000 $ 2,600 $ 30,400 Fanapt ® November 2016 27,941 13,703 14,238 $ 60,941 $ 16,303 $ 44,638 The following is a summary of the Company’s intangible assets as of December 31, 2014: December 31, 2014 Estimated Gross Net Useful Life Carrying Accumulated Carrying (in thousands) (Years) Amount Amortization Amount HETLIOZ ® January 2033 $ 8,000 $ 539 $ 7,461 Fanapt ® November 2016 27,941 8,678 19,263 $ 35,941 $ 9,217 $ 26,724
Summary of Future Intangible Asset Amortization	The following is a summary of the future intangible asset amortization schedule as of June 30, 2015: Remainder (in thousands) Total of 2015 2016 2017 2018 2019 Thereafter HETLIOZ ® $ 30,400 $ 860 $ 1,721 $ 1,721 $ 1,721 $ 1,721 $ 22,656 Fanapt ® 14,238 5,025 9,213 — — — — $ 44,638 $ 5,885 $ 10,934 $ 1,721 $ 1,721 $ 1,721 $ 22,656

Accrued Liabilities (Tables)

Accrued Liabilities (Tables)	6 Months Ended
	Jun. 30, 2015
Summary of Accrued Liabilities	The following is a summary of the Company’s accrued liabilities as of June 30, 2015 and December 31, 2014: June 30, December 31, (in thousands) 2015 2014 Accrued sales allowances $ 28,738 $ 495 Accrued research and development expenses 1,953 1,759 Accrued consulting and other professional fees 4,475 2,522 Compensation and employee benefits 1,888 388 Royalties payable 5,000 602 Other accrued liabilities 1,508 1,185 $ 43,562 $ 6,951

Deferred Revenue (Tables)

Deferred Revenue (Tables)	6 Months Ended
	Jun. 30, 2015
Summary of Changes in Total Deferred Revenue	The following is a summary of changes in total deferred revenue for the six months ended June 30, 2015 and 2014: Six Months Ended June 30, June 30, (in thousands) 2015 2014 Balance beginning of period $ 174 $ 90,275 Deferred Fanapt ® 314 — Licensing revenue recognized — 15,216 Balance end of period $ 488 $ 75,059

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2015
Summary of Minimum Annual Future Payments under Operating Leases	The following is a summary of the minimum annual future payments under operating leases as of June 30, 2015: Remainder (in thousands) Total of 2015 2016 2017 2018 2019 Thereafter Operating leases $ 14,051 $ 736 $ 1,500 $ 1,538 $ 1,576 $ 1,616 $ 7,085

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2015
Black-Scholes-Merton Option Pricing Model for Stock Options Granted	Assumptions used in the Black-Scholes-Merton option pricing model for stock options granted during the six months ended June 30, 2015 and 2014 were as follows: Six Months Ended June 30, June 30, 2015 2014 Expected dividend yield 0 % 0 % Weighted average expected volatility 61 % 64 % Weighted average expected term (years) 5.99 5.83 Weighted average risk-free rate 1.61 % 1.77 % Weighted average fair value per share $ 6.15 $ 7.14
Total Stock-Based Compensation Expense	Total stock-based compensation expense related to stock-based awards for the three and six months ended June 30, 2015 and 2014 was comprised of the following: Three Months Ended Six Months Ended June 30, June 30, June 30, June 30, (in thousands) 2015 2014 2015 2014 Research and development $ 603 $ 454 $ 1,227 $ 935 Selling, general and administrative 1,465 989 2,786 1,901 $ 2,068 $ 1,443 $ 4,013 $ 2,836
Summary of RSU Activity for 2006 Plan	A summary of RSU activity for the 2006 Plan for the six months ended June 30, 2015 follows: RSUs Number of Weighted Shares Average Underlying Grant Date RSUs Fair Value Unvested at December 31, 2014 1,025,961 $ 9.94 Granted 253,000 11.23 Forfeited (63,062 ) 10.88 Vested (231,093 ) 7.96 Unvested at June 30, 2015 984,806 10.67
2004 Plan
Summary of Option Activity Plan	A summary of option activity for the 2004 Plan for the six months ended June 30, 2015 follows: 2004 Option Plan Weighted Average Weighted Average Aggregate Number of Exercise Price at Remaining Term Intrinsic (in thousands, except for share and per share amounts) Shares Grant Date (Years) Value Outstanding at December 31, 2014 652,810 1.74 0.78 8,212 Exercised (454,662 ) 0.44 4,559 Outstanding at June 30, 2015 198,148 4.73 0.50 4,455 Exercisable at June 30, 2015 198,148 4.73 0.50 1,577 Vested and expected to vest at June 30, 2015 198,148 4.73 0.50 1,577
2006 Plan
Summary of Option Activity Plan	A summary of option activity for the 2006 Plan for the six months ended June 30, 2015 follows: 2006 Option Plan Weighted Average Weighted Average Aggregate Number of Exercise Price at Remaining Term Intrinsic (in thousands, except for share and per share amounts) Shares Grant Date (Years) Value Outstanding at December 31, 2014 6,227,112 11.58 6.71 28,523 Granted 721,500 11.35 Forfeited (166,606 ) 11.10 Expired (2,409 ) 11.70 Exercised (123,257 ) 5.32 794 Outstanding at June 30, 2015 6,656,340 11.68 6.52 19,773 Exercisable at June 30, 2015 4,151,650 12.20 5.02 14,830 Vested and expected to vest at June 30, 2015 6,456,458 11.69 6.43 19,516

Net Sales by Product (Detail)

Net Sales by Product (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenue from External Customer [Line Items]
Product sales, net	$ 27,582	$ 1,559	$ 49,732	$ 1,559
Hetlioz
Revenue from External Customer [Line Items]
Product sales, net	10,017	$ 1,559	17,477	$ 1,559
Fanapt
Revenue from External Customer [Line Items]
Product sales, net	$ 17,565		$ 32,255

Summary of Significant Accoun37

Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Jun. 30, 2015USD ($)SegmentCustomer	Jun. 30, 2014USD ($)	Dec. 31, 2014USD ($)	Dec. 31, 2013USD ($)
Summary Of Significant Accounting Policies [Line Items]
Deferred revenue	$ 488	$ 75,059	$ 488	$ 75,059	$ 174	$ 90,275
Percentage of insurance coverage gap allocated for prescription drugs			50.00%
Advertising expenses	900	$ 3,300	$ 1,900	$ 4,300
Number of reportable segments | Segment			1
Customer Concentration Risk | Sales Revenue, Net
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage			95.00%
Number of major customers for sales revenues | Customer			6
Credit Concentration Risk | Accounts Receivable
Summary Of Significant Accounting Policies [Line Items]
Concentration Risk, Percentage			72.00%
Number of major customers for accounts receivable | Customer			3
Fanapt
Summary Of Significant Accounting Policies [Line Items]
Deferred revenue	$ 500		$ 500

Settlement Agreement with Nov38

Settlement Agreement with Novartis - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014	Dec. 31, 2009
Business Acquisition [Line Items]
Intangible assets, amortization method	Straight-line basis
Fanapt
Business Acquisition [Line Items]
Intangible assets, amortizing period end date	2016-11	2016-11
Upfront payment received			$ 200,000
Settlement Agreement
Business Acquisition [Line Items]
Net proceeds from offering of common stock		$ 25,000
Effective date of the Settlement Agreement		Dec. 31, 2014
Gain on termination of pre-existing non-contractual relationship		$ 18,087
Up-front Payment Arrangement
Business Acquisition [Line Items]
Gain on termination of pre-existing non-contractual relationship		59,500
Novartis Pharma AG | Settlement Agreement
Business Acquisition [Line Items]
Net proceeds from offering of common stock		$ 25,000
Price per share		$ 13.82
Stock issued during period, shares		1,808,973
Percentage of premium to average closing prices		10.00%
Trading days		10 days
Gain (Loss) on issuance of stock		$ (900)

Fair Value of Consideration Exc

Fair Value of Consideration Exchanged as Part of Settlement Agreement (Detail) - Settlement Agreement $ in Thousands	12 Months Ended
	Dec. 31, 2014USD ($)
Business Acquisition [Line Items]
Equity issued	$ 25,904
Cash received	(25,000)
Settlement of pre-existing non-contractual relationship	18,087
Business Combination, Consideration Transferred, Total	$ 18,991

Assets Acquired and Recorded at

Assets Acquired and Recorded at Fair Value (Detail) $ in Thousands	Dec. 31, 2014USD ($)
Business Acquisition [Line Items]
Assets acquired and recorded at fair value, Inventory	$ 2,960
Assets acquired and recorded at fair value, Intangible re-acquired right	15,940
Assets acquired and recorded at fair value, Prepaid services	91
Assets acquired and recorded at fair value	$ 18,991

Basic and Diluted Net Income (L

Basic and Diluted Net Income (Loss) Per Share of Common Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator:
Net loss	$ (5,386)	$ (21,575)	$ (15,607)	$ (48,108)
Denominator:
Weighted average shares outstanding, basic and diluted	41,991,578	33,874,625	41,868,944	33,777,207
Net loss per share, basic and diluted:
Net loss per share	$ (0.13)	$ (0.64)	$ (0.37)	$ (1.42)
Antidilutive securities excluded from calculations of diluted net loss per share	5,765,618	3,739,874	5,711,140	3,805,191

Summary of Available-For-Sale M

Summary of Available-For-Sale Marketable Securities (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Fair Market Value	$ 98,300	$ 68,921
Current Investment
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	98,273	68,905
Gross Unrealized Gains	33	29
Gross Unrealized Losses	(6)	(13)
Fair Market Value	98,300	68,921
Current Investment | U.S. Treasury and government agencies
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	54,628	30,618
Gross Unrealized Gains	7	4
Gross Unrealized Losses	(2)	(4)
Fair Market Value	54,633	30,618
Current Investment | Corporate debt
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	43,645	38,287
Gross Unrealized Gains	26	25
Gross Unrealized Losses	(4)	(9)
Fair Market Value	$ 43,667	$ 38,303

Assets Measured at Fair Value o

Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 98,300	$ 68,921
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	54,633	30,618
Significant Other Observable Inputs (Level 2)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Available-for-sale securities	$ 43,667	$ 38,303

Inventory (Detail)

Inventory (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Inventory [Line Items]
Raw materials	$ 128	$ 198
Work-in-process	1,778	1,326
Finished goods	2,646	3,394
Deferred cost of goods sold	410	252
Total	$ 4,962	$ 5,170

Summary of Prepaid Expenses and

Summary of Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Prepaid Expenses And Other Current Assets [Line Items]
Prepaid insurance	$ 928	$ 270
Prepaid manufacturing cost	346	358
Other prepaid expenses and vendor advances	5,363	2,302
Other current assets	319	154
Prepaid expenses and other current assets	$ 6,956	$ 3,084

Summary of Intangible Assets (D

Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended	12 Months Ended
	Mar. 31, 2004	Jun. 30, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Amount		$ 60,941	$ 35,941
Accumulated Amortization		16,303	9,217
Net Carrying Amount		$ 44,638	$ 26,724
Hetlioz
Finite-Lived Intangible Assets [Line Items]
Estimated Patent life end date	2022-12	2033-01	2033-01
Gross Carrying Amount		$ 33,000	$ 8,000
Accumulated Amortization		2,600	539
Net Carrying Amount		$ 30,400	$ 7,461
Fanapt
Finite-Lived Intangible Assets [Line Items]
Estimated Patent life end date		2016-11	2016-11
Gross Carrying Amount		$ 27,941	$ 27,941
Accumulated Amortization		13,703	8,678
Net Carrying Amount		$ 14,238	$ 19,263

Intangible Assets (Textual 2 -

Intangible Assets (Textual 2 - HETLIOZ) - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended				6 Months Ended		12 Months Ended
	Jul. 31, 2013	Feb. 28, 2004	Jun. 30, 2015	Jun. 30, 2014	Mar. 31, 2014	Mar. 31, 2004	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014	Dec. 31, 2006
Finite-Lived Intangible Assets [Line Items]
Milestone obligation under license agreement			$ 25,000				$ 25,000
Intangible asset amortization			2,942	$ 617			$ 7,086	$ 1,182
Hetlioz
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets	$ 3,000	$ 500			$ 8,000			$ 8,000		$ 1,000
Estimated Patent life end date						2022-12	2033-01		2033-01
Cumulative worldwide sales milestone							$ 250,000
Milestone obligation under license agreement			$ 25,000				25,000
Intangible assets capitalized							25,000
Intangible asset amortization							2,100
Catch-up amortization of intangible asset							1,200
Future annual amortization of intangible asset							$ 1,700

Intangible Assets (Textual 3 -

Intangible Assets (Textual 3 - Fanapt) - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014	Dec. 31, 2009	Dec. 31, 2004
Finite-Lived Intangible Assets [Line Items]
Assets acquired and recorded at fair value, Intangible re-acquired right		$ 15,940
Fanapt
Finite-Lived Intangible Assets [Line Items]
Acquisition of intangible assets			$ 12,000	$ 500
Estimated Patent life end date	2016-11	2016-11
Assets acquired and recorded at fair value, Intangible re-acquired right		$ 15,900

Intangible Assets - Additional

Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Finite-Lived Intangible Assets [Line Items]
Intangible asset amortization	$ 2,942	$ 617	$ 7,086	$ 1,182

Summary of Future Intangible As

Summary of Future Intangible Asset Amortization (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	$ 44,638	$ 26,724
Remainder of 2015	5,885
2,016	10,934
2,017	1,721
2,018	1,721
2,019	1,721
Thereafter	22,656
Hetlioz
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	30,400	7,461
Remainder of 2015	860
2,016	1,721
2,017	1,721
2,018	1,721
2,019	1,721
Thereafter	22,656
Fanapt
Finite-Lived Intangible Assets [Line Items]
Net Carrying Amount	14,238	$ 19,263
Remainder of 2015	5,025
2,016	$ 9,213

Summary of Accrued Liabilities

Summary of Accrued Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Accrued Liabilities [Line Items]
Accrued sales allowances	$ 28,738	$ 495
Accrued research and development expenses	1,953	1,759
Accrued consulting and other professional fees	4,475	2,522
Compensation and employee benefits	1,888	388
Royalties payable	5,000	602
Other accrued liabilities	1,508	1,185
Accrued liabilities	$ 43,562	$ 6,951

Summary of Changes in Total Def

Summary of Changes in Total Deferred Revenue (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Deferred Revenue Arrangement [Line Items]
Balance beginning of period	$ 174	$ 90,275
Deferred Fanapt® product revenue	314
Licensing revenue recognized		15,216
Balance end of period	$ 488	$ 75,059

Deferred Revenue - Additional I

Deferred Revenue - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2014	Jun. 30, 2014	Dec. 31, 2014	Dec. 31, 2009
Deferred Revenue Arrangement [Line Items]
Licensing agreement	$ 7,764	$ 15,216	$ 30,700
Up-front Payment Arrangement
Deferred Revenue Arrangement [Line Items]
Recognized as part of gain on arbitration settlement			$ 59,500
Fanapt
Deferred Revenue Arrangement [Line Items]
Upfront payment received				$ 200,000

Summary of Minimum Annual Futur

Summary of Minimum Annual Future Payments Under Operating Leases (Detail) $ in Thousands	Jun. 30, 2015USD ($)
Operating Leased Assets [Line Items]
Operating leases, Total	$ 14,051
Operating leases,Remainder of 2015	736
Operating leases, 2016	1,500
Operating leases, 2017	1,538
Operating leases, 2018	1,576
Operating leases, 2019	1,616
Operating leases, Thereafter	$ 7,085

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail) $ in Millions	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2014USD ($)ft²	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Jun. 30, 2015USD ($)	Jun. 30, 2014USD ($)	Dec. 31, 2011ft²
Commitments and Contingencies Disclosure [Line Items]
Rent expense		$ 0.5	$ 0.4	$ 0.9	$ 0.8
Washington DC Lease Amendment
Commitments and Contingencies Disclosure [Line Items]
Renewal term of Lease agreement	5 years
Additional square feet leased | ft²	8,860
Lease term	12 years 1 month
Additional annual rental payment under lease amendment	$ 0.4
Allowance for tenant improvements	$ 0.8
Washington DC Lease
Commitments and Contingencies Disclosure [Line Items]
Renewal term of Lease agreement						5 years
Square feet leased | ft²						21,400

Commitments and Contingencies56

Commitments and Contingencies (Textual 2 - HETLIOZ) - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended	6 Months Ended		12 Months Ended
	Jul. 31, 2013	Feb. 28, 2004	Mar. 31, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2006
HETLIOZ
Milestone obligation under license agreement				$ 25,000
Percentage of future sublicense fees payable to third-party				Mid-twenties
Hetlioz
HETLIOZ
Acquisition of intangible assets	$ 3,000	$ 500	$ 8,000		$ 8,000	$ 1,000
Milestone obligation under license agreement				$ 25,000
Royalty payable percentage				10.00%
Cumulative worldwide sales milestone				$ 250,000
Intangible assets capitalized				$ 25,000

Commitments and Contingencies57

Commitments and Contingencies (Textual 3 - Fanapt) - Additional Information (Detail) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014	Dec. 31, 2009	Dec. 31, 2004
Novartis Pharma AG | Through November 2016
Fanapt
Royalty percentage payable on net sales below annual threshold		23.00%
Novartis Pharma AG | Royalty Rate for Annual Sales in Excess of $200 million
Fanapt
Royalty percentage payable on net sales above annual threshold	mid-twenties
Novartis Pharma AG | Beyond November 2016
Fanapt
Royalty percentage on net sales payable to Sanofi after expiration of patent		9.00%
Maximum | Novartis Pharma AG
Fanapt
Agreed upon sales threshold level for royalty rate		$ 200,000,000
Fanapt
Fanapt
Acquisition of intangible assets			$ 12,000,000	$ 500,000
Royalty payments to Novartis based on sales, old rate from 2014	mid-twenties
Upfront payment received			$ 200,000,000

Commitments and Contingencies58

Commitments and Contingencies (Textual 4 - Tradipitant) - Additional Information (Detail) - Tradipitant - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2012
Tradipitant
Future percentage of royalty payments based net sales	Low double digits
Possible future milestone payments		$ 4
Milestone payment under license agreement		1
License Agreement
Tradipitant
Possible future milestone payments		$ 95

Legal Matters - Additional Info

Legal Matters - Additional Information (Detail)	1 Months Ended
	Apr. 30, 2015Case
Roxane Laboratories Inc. | Pending Cases
Legal Proceedings [Line Items]
Number of cases that were consolidated	2

Black-Scholes-Merton Option Pri

Black-Scholes-Merton Option Pricing Model for Stock Options Granted (Detail) - $ / shares	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Share Based Payment Award Stock Options Valuation Assumptions [Line Items]
Expected dividend yield	0.00%	0.00%
Weighted average expected volatility	61.00%	64.00%
Weighted average expected term (years)	5 years 11 months 27 days	5 years 9 months 29 days
Weighted average risk-free rate	1.61%	1.77%
Weighted average fair value per share	$ 6.15	$ 7.14

Total Stock-Based Compensation

Total Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total employee stock-based compensation expense	$ 2,068	$ 1,443	$ 4,013	$ 2,836
Research and development
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total employee stock-based compensation expense	603	454	1,227	935
Selling, general and administrative
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Total employee stock-based compensation expense	$ 1,465	$ 989	$ 2,786	$ 1,901

Equity Incentive Plans (Textual

Equity Incentive Plans (Textual 1 - Equity Incentive Plan) - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2015EquityPlanshares	Dec. 31, 2014shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of equity incentive plans | EquityPlan	2
2004 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding options granted	198,148	652,810
2006 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Outstanding options granted	6,656,340	6,227,112
Common stock reserved for issuance	11,829,472
2006 Plan | Outstanding options and RSUs granted (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares subject to outstanding options and RSUs	7,641,146
Shares available for future grant	1,713,842
2006 Plan | January 1, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock reserved for issuance	11,829,472
Increase each January 1 in the number of shares reserved under 2006 Plan as a percentage of common stock outstanding	4.00%
Minimum increase each January 1 in the number of shares reserved	1,500,000
Increase in number of shares reserved and available for future grant	1,500,000

Equity Incentive Plans (Textu63

Equity Incentive Plans (Textual 2 Stock Option) - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share based compensation option awards contractual term	10 years
Portion of initial stock options granted to employees that vests on employee's first anniversary	25.00%
Portion of initial stock options granted to employees that vests ratably over three years after completion of first year of service	75.00%
Option awards vesting period, after completion of one year of service	3 years
Vesting period	4 years
Vesting period for initial stock options granted to directors	4 years
Vesting period for subsequent stock options granted to directors	1 year
Unrecognized compensation expenses, weighted average period	2 years
Proceeds from exercise of employee stock options	$ 795	$ 2,479
Service option awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expenses	$ 14,800
Unrecognized compensation expenses, weighted average period	1 year 7 months 6 days

Summary of Option Activity for

Summary of Option Activity for 2004 Plan (Detail) - 2004 Plan - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Number of Shares
Beginning balance	652,810
Exercised	(454,662)
Ending balance	198,148	652,810
Exercisable	198,148
Vested and expected to vest at June 30, 2015	198,148
Weighted Average Exercise Price at Grant Date
Beginning balance	$ 1.74
Exercised	0.44
Ending balance	4.73	$ 1.74
Exercisable	4.73
Vested and expected to vest at June 30, 2015	$ 4.73
Weighted Average Remaining Term (Years)
Weighted Average Remaining Term	6 months	9 months 11 days
Exercisable	6 months
Vested and expected to vest at June 30, 2015	6 months
Aggregate Intrinsic Value
Beginning balance	$ 8,212
Exercised	4,559
Ending balance	4,455	$ 8,212
Exercisable	1,577
Vested and expected to vest at June 30, 2015	$ 1,577

Summary of Option Activity fo65

Summary of Option Activity for 2006 Plan (Detail) - 2006 Plan - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Number of Shares
Beginning balance	6,227,112
Granted	721,500
Forfeited	(166,606)
Expired	(2,409)
Exercised	(123,257)
Ending balance	6,656,340	6,227,112
Exercisable	4,151,650
Vested and expected to vest at June 30, 2015	6,456,458
Weighted Average Exercise Price at Grant Date
Beginning balance	$ 11.58
Granted	11.35
Forfeited	11.10
Expired	11.70
Exercised	5.32
Ending balance	11.68	$ 11.58
Exercisable	12.20
Vested and expected to vest at June 30, 2015	$ 11.69
Weighted Average Remaining Term (Years)
Weighted Average Remaining Term	6 years 6 months 7 days	6 years 8 months 16 days
Exercisable	5 years 7 days
Vested and expected to vest at June 30, 2015	6 years 5 months 5 days
Aggregate Intrinsic Value
Beginning balance	$ 28,523
Exercised	794
Ending balance	19,773	$ 28,523
Exercisable	14,830
Vested and expected to vest at June 30, 2015	$ 19,516

Equity Incentive Plans (Textu66

Equity Incentive Plans (Textual 3 RSU) - Additional Information (Detail) - Jun. 30, 2015 - USD ($) $ in Millions	Total
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period of RSU awards in equal installments	4 years
Unrecognized compensation expenses, weighted average period	2 years
Fair value of common stock vested	$ 1.8
2006 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value of common stock vested, shares	231,093
Restricted Stock Units (RSU)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expenses related to unvested RSUs	$ 9.2

Summary of RSU Activity for 200

Summary of RSU Activity for 2006 Plan (Detail) - 6 months ended Jun. 30, 2015 - 2006 Plan - $ / shares	Total
Number of Shares Unvested
Beginning balance	1,025,961
Granted	253,000
Forfeited	(63,062)
Vested	(231,093)
Ending balance	984,806
Weighted Average Price/Share Unvested
Beginning balance	$ 9.94
Granted	11.23
Forfeited	10.88
Vested	7.96
Ending balance	$ 10.67