Ironwood Pharmaceuticals (IRWD) 10-Q5 Aug 142014 Q2 Quarterly reportFinancial data

Company Profile

Document_and_Entity_Informatio

Document and Entity Information	6 Months Ended
	Jun. 30, 2014	Jul. 25, 2014	Jul. 25, 2014
	Jun. 30, 2014	Class A common stock	Class B common stock
Entity Registrant Name	'IRONWOOD PHARMACEUTICALS INC	'	'
Entity Central Index Key	'0001446847	'	'
Document Type	'10-Q	'	'
Document Period End Date	30-Jun-14	'	'
Amendment Flag	'false	'	'
Current Fiscal Year End Date	'--12-31	'	'
Entity Current Reporting Status	'Yes	'	'
Entity Filer Category	'Large Accelerated Filer	'	'
Entity Common Stock, Shares Outstanding	'	120,866,472	18,491,673
Document Fiscal Year Focus	'2014	'	'
Document Fiscal Period Focus	'Q2	'	'

Condensed_Consolidated_Balance

Condensed Consolidated Balance Sheets (USD $)	Jun. 30, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Current assets:	'	'
Cash and cash equivalents	$95,357	$75,490
Available-for-sale securities	206,621	122,112
Accounts receivable	'	513
Related party accounts receivable, net	4,455	2,700
Inventory	12,989	22,145
Prepaid expenses and other current assets	6,338	6,168
Total current assets	325,760	229,128
Restricted cash	8,147	8,147
Property and equipment, net	33,560	37,376
Other assets	3,597	4,311
Total assets	371,064	278,962
Current liabilities:	'	'
Accounts payable	3,393	10,139
Related party accounts payable, net	5	48
Accrued research and development costs	2,235	3,412
Accrued expenses	19,048	18,438
Current portion of capital lease obligations	1,104	1,139
Current portion of deferred rent	2,817	2,790
Current portion of deferred revenue	6,447	5,074
Current portion of notes payable	6,577	'
Total current liabilities	41,626	41,040
Capital lease obligations, net of current portion	3,158	3,134
Deferred rent, net of current portion	7,431	8,822
Deferred revenue, net of current portion	8,879	11,416
Notes payable, net of current portion	168,139	174,672
Other liabilities	'	1,653
Commitments and contingencies	'	'
Stockholders' equity:	'	'
Preferred stock, $0.001 par value, 75,000,000 shares authorized, no shares issued and outstanding	'	'
Additional paid-in capital	1,029,501	815,930
Accumulated deficit	-887,811	-777,828
Accumulated other comprehensive income	3	2
Total stockholders' equity	141,831	38,225
Total liabilities and stockholders' equity	371,064	278,962
Class A common stock	'	'
Stockholders' equity:	'	'
Common stock	120	103
Class B common stock	'	'
Stockholders' equity:	'	'
Common stock	$18	$18

Condensed_Consolidated_Balance1

Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Jun. 30, 2014	Dec. 31, 2013
Preferred stock, par value (in dollars per share)	$0.00	$0.00
Preferred stock, shares authorized	75,000,000	75,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Class A common stock	'	'
Common stock, par value (in dollars per share)	$0.00	$0.00
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	120,635,892	102,803,093
Common stock, shares outstanding	120,635,892	102,803,093
Class B common stock	'	'
Common stock, par value (in dollars per share)	$0.00	$0.00
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	18,497,673	18,362,037
Common stock, shares outstanding	18,497,673	18,362,037

Condensed_Consolidated_Stateme

Condensed Consolidated Statements of Operations (USD $)	3 Months Ended		6 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Condensed Consolidated Statements of Operations	'	'	'	'
Collaborative arrangements revenue	$6,840	$9,663	$21,445	$12,918
Cost and expenses:	'	'	'	'
Cost of revenue	10,518	3,418	12,442	4,649
Research and development	22,142	24,093	49,286	56,846
Selling, general and administrative	29,299	30,870	59,223	64,244
Collaboration expense	'	11,162	'	35,892
Total cost and expenses	61,959	69,543	120,951	161,631
Loss from operations	-55,119	-59,880	-99,506	-148,713
Other income (expense):	'	'	'	'
Interest expense	-5,303	-5,318	-10,586	-10,439
Interest and investment income	65	49	109	101
Other expense, net	-5,238	-5,269	-10,477	-10,338
Net loss	($60,357)	($65,149)	($109,983)	($159,051)
Net loss per share - basic and diluted (in dollars per share)	($0.44)	($0.57)	($0.82)	($1.44)
Weighted average number of common shares used in net loss per share - basic and diluted: (in shares)	138,315	113,441	134,053	110,772

Condensed_Consolidated_Stateme1

Condensed Consolidated Statements of Comprehensive Loss (USD $)	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Condensed Consolidated Statements of Comprehensive Loss	'	'	'	'
Net loss	($60,357)	($65,149)	($109,983)	($159,051)
Other comprehensive income (loss):	'	'	'	'
Unrealized gains (losses) on available-for-sale securities	15	-13	1	-6
Total other comprehensive income (loss)	15	-13	1	-6
Comprehensive loss	($60,342)	($65,162)	($109,982)	($159,057)

Condensed_Consolidated_Stateme2

Condensed Consolidated Statements of Cash Flows (USD $)	6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities:	'	'
Net loss	($109,983)	($159,051)
Adjustments to reconcile net loss to net cash used in operating activities:	'	'
Depreciation and amortization	6,211	5,577
Share-based compensation expense	12,086	10,092
Write-down of inventory to net realizable value	8,894	0
Accretion of discount/premium on investment securities	466	887
Non-cash interest expense	788	937
Changes in assets and liabilities:	'	'
Accounts receivable and related party accounts receivable	-1,242	-3,811
Restricted cash	'	-500
Prepaid expenses and other current assets	-84	-3,447
Inventory	272	-10,197
Other assets	-116	72
Accounts payable and accrued expenses	-7,691	-10,098
Accrued research and development costs	-1,177	-718
Deferred revenue	-1,164	-2,379
Deferred rent	-1,364	-1,348
Other liabilities	'	661
Net cash used in operating activities	-94,104	-173,323
Cash flows from investing activities:	'	'
Purchases of available-for-sale securities	-206,943	-144,584
Sales and maturities of available-for-sale securities	121,969	94,142
Purchases of property and equipment	-2,023	-4,890
Net cash used in investing activities	-86,997	-55,332
Cash flows from financing activities:	'	'
Proceeds from issuance of common stock	190,428	137,766
Proceeds from issuance of notes payable	'	175,000
Costs associated with issuance of notes payable	'	-7,717
Proceeds from exercise of stock options and employee stock purchase plan	11,064	6,515
Payments on capital leases	-524	-148
Net cash provided by financing activities	200,968	311,416
Net increase in cash and cash equivalents	19,867	82,761
Cash and cash equivalents, beginning of period	75,490	136,700
Cash and cash equivalents, end of period	$95,357	$219,461

Nature_of_Business

Nature of Business	6 Months Ended
Nature of Business	Jun. 30, 2014
Nature of Business	'
Nature of Business	'
	1. Nature of Business

	Overview

	Ironwood Pharmaceuticals, Inc. (the “Company”) is an entrepreneurial pharmaceutical company focused on creating medicines that make a difference for patients, building value to earn the continued support of its fellow shareholders, and empowering its team to passionately pursue excellence. The Company’s core strategy is to establish a leading gastrointestinal (“GI”) therapeutics company, leveraging its development and commercial capabilities in addressing GI disorders as well as its pharmacologic expertise in guanylate cyclase (“GC”) pathways.

	The Company’s lead product, linaclotide, is being marketed in the United States (“U.S.”) under the trademarked name of LINZESS®. In August 2012, the United States Food and Drug Administration (“FDA”) approved LINZESS as a once-daily treatment for adult men and women suffering from irritable bowel syndrome with constipation (“IBS-C”) or chronic idiopathic constipation (“CIC”). LINZESS is the first and, to date, only FDA-approved guanylate cyclase type-C (“GC-C”) agonist. The Company and Forest Laboratories, Inc. (“Forest”) began commercializing LINZESS in the U.S. in December 2012. On July 1, 2014, Actavis plc (together with Forest, “Actavis”) completed its acquisition of Forest. The collaboration between the companies for the development and commercialization of linaclotide in North America remains in effect.

	In November 2012, the European Commission granted marketing authorization to linaclotide (CONSTELLA®) for the symptomatic treatment of moderate to severe IBS-C in adults. CONSTELLA is the first and only drug approved in the European Union (“E.U.”) for IBS-C. The Company’s European partner, Almirall, S.A. (“Almirall”), has exclusive marketing rights for CONSTELLA in Europe (including the Commonwealth of Independent States and Turkey). Currently, CONSTELLA is commercially available in certain European countries, including the United Kingdom, Italy and Spain. Almirall recently suspended commercialization of CONSTELLA in Germany following an inability to reach agreement with the German National Association of Statutory Health Insurance Funds on a reimbursement price that reflects the innovation and value of CONSTELLA. Almirall is assessing all possibilities to facilitate continued access to CONSTELLA for appropriate patients in Germany.

	In December 2013 and February 2014, linaclotide was approved in Canada and Mexico, respectively, as a treatment for adult women and men suffering from IBS-C or CIC. Actavis has exclusive rights to commercialize linaclotide in Canada as CONSTELLA and, through a sublicense from Actavis, Almirall has exclusive rights to commercialize linaclotide in Mexico as LINZESS. In May 2014, Actavis began commercializing CONSTELLA in Canada and in June 2014, Almirall began commercializing LINZESS in Mexico.

	Astellas Pharma Inc. (“Astellas”), the Company’s partner in Japan, is developing linaclotide for the treatment of patients with IBS-C in its territory. Astellas completed a double-blind, placebo-controlled, dose-ranging Phase II clinical trial of linaclotide in adult patients with IBS-C. In February 2014, the Company received preliminary top level data for the Phase II trial from Astellas indicating that, while all linaclotide dose groups showed numerically higher responder rates in the primary endpoint than placebo, the responder rates were not statistically significant compared to placebo in this study. Linaclotide was well tolerated in all dose groups in this study. Data analysis is still ongoing at Astellas to determine next steps.

	In October 2012, the Company entered into a collaboration agreement with AstraZeneca AB (“AstraZeneca”) to co-develop and co-commercialize linaclotide in China, Hong Kong and Macau, with AstraZeneca having primary responsibility for the local operational execution. In the third quarter of 2013, the Company and AstraZeneca initiated a double-blind, placebo-controlled Phase III clinical trial of linaclotide in adult patients with IBS-C.

	The Company continues to assess alternatives to bring linaclotide to IBS-C and CIC sufferers in the parts of the world outside of its partnered territories.

	The Company and Actavis are also exploring development opportunities to enhance the clinical profile of LINZESS by seeking to expand its utility in its indicated populations, as well as studying linaclotide in additional indications and populations and in new formulations to assess its potential to treat various GI conditions. In addition to linaclotide-based opportunities, the Company is advancing multiple GI development programs as well as further leveraging its GC expertise to advance a second GC program targeting soluble guanylate cyclase (“sGC”), a validated mechanism with the potential for broad therapeutic utility and multiple opportunities for product development. The Company is exploring sGC for utility in cardiovascular disease and other indications.

	Basis of Presentation

	The accompanying condensed consolidated financial statements and the related disclosures are unaudited and have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 7, 2014.

	The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position as of June 30, 2014, results of its operations for the three and six months ended June 30, 2014 and 2013 and its cash flows for the six months ended June 30, 2014 and 2013. The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the full year or any other subsequent interim period.

	Principles of Consolidation

	The accompanying condensed consolidated financial statements include the accounts of Ironwood Pharmaceuticals, Inc. and its wholly owned subsidiaries, Ironwood Pharmaceuticals Securities Corporation and Ironwood Pharmaceuticals GmbH. All intercompany transactions and balances are eliminated in consolidation.

	Use of Estimates

	The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company’s management evaluates its estimates, including those related to revenue recognition, available-for-sale securities, inventory valuation and related reserves, impairment of long-lived assets, balance sheet classification of notes payable, income taxes including the valuation allowance for deferred tax assets, research and development expense, contingencies and share-based compensation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known.

	Summary of Significant Accounting Policies

	During the quarter ended March 31, 2014, the Company transitioned from a “simplified method” to the use of its historical data when estimating the expected term of stock option grants for purposes of determining stock-based compensation expense. This change did not have a significant impact on the Company’s financial position or results of operations. The Company’s significant accounting policies are otherwise as described in Note 2, “Summary of Significant Accounting Policies,” in the Company’s 2013 Annual Report on Form 10-K.

	New Accounting Pronouncements

	In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition and most industry-specific guidance. The new standard requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. The Company has not determined yet the potential effects of the adoption of this standard on its consolidated financial position, results of operations or cash flows.

	For a discussion of additional recent accounting pronouncements please refer to Note 2, “Summary of Significant Accounting Policies,” in the Company’s 2013 Annual Report on Form 10-K.

	The Company did not adopt any new accounting pronouncements during the six months ended June 30, 2014 that had a material effect on the Company’s condensed consolidated financial statements.

Net_Loss_Per_Share

Net Loss Per Share	6 Months Ended
	Jun. 30, 2014
Net Loss Per Share	'
Net Loss Per Share	'
	2. Net Loss Per Share

	Basic and diluted net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the period.

	The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive (in thousands):

		Six Months Ended
		June 30,
		2014	2013
	Options to purchase common stock	20,818	20,470
	Shares subject to repurchase	198	45
		21,016	20,515

	The number of shares issuable under the Company’s employee stock purchase plan that were excluded from the calculation of diluted weighted average shares outstanding because their effects would be anti-dilutive was insignificant.

Collaboration_and_License_Agre

Collaboration and License Agreements

6 Months Ended

Jun. 30, 2014

Collaboration and License Agreements

3. Collaboration and License Agreements

Actavis plc (formerly Forest Laboratories, Inc.)

In September 2007, the Company entered into a collaboration agreement with Forest to develop and commercialize linaclotide for the treatment of IBS-C, CIC and other GI conditions in North America. On July 1, 2014, Actavis completed its acquisition of Forest. The collaboration between the companies for the development and commercialization of linaclotide in North America remains in effect. Under the terms of this collaboration agreement, the Company shares equally with Actavis all development costs as well as future net profits or losses from the development and sale of linaclotide in the U.S. The Company will also receive royalties in the mid-teens percent based on net sales in Canada and Mexico. Actavis is solely responsible for the further development, regulatory approval and commercialization of linaclotide in those countries and funding any costs. In September 2012, Actavis sublicensed its commercialization rights in Mexico to Almirall. Actavis made non-refundable, up-front payments totaling $70.0 million to the Company in order to obtain rights to linaclotide in North America. Because the license to jointly develop and commercialize linaclotide did not have a standalone value without research and development activities provided by the Company, the Company recorded the up-front license fee as collaborative arrangements revenue on a straight-line basis through September 30, 2012, the period over which linaclotide was jointly developed under the collaboration. The collaboration agreement also includes contingent milestone payments, as well as a contingent equity investment, based on the achievement of specific development and commercial milestones. At June 30, 2014, $205.0 million in license fees and development milestone payments had been received by the Company, as well as a $25.0 million equity investment in the Company’s capital stock. The Company can also achieve up to $100.0 million in a sales-related milestone if certain conditions are met.

The collaboration agreement included a contingent equity investment, in the form of a forward purchase contract, which required Actavis to purchase shares of the Company’s convertible preferred stock upon achievement of a specific development milestone. At the inception of the arrangement, the Company valued the contingent equity investment and recorded an approximately $9.0 million asset and incremental deferred revenue. The $9.0 million of incremental deferred revenue was recognized as collaborative arrangements revenue on a straight-line basis over the period of the Company’s continuing involvement through September 30, 2012. In July 2009, the Company achieved the development milestone triggering the equity investment and reclassified the forward purchase contract as a reduction to convertible preferred stock. On September 1, 2009, the Company issued 2,083,333 shares of convertible preferred stock to Actavis (Note 11).

The Company achieved all six development milestones under this agreement. In September 2008 and July 2009, the Company achieved development milestones which triggered $10.0 million and $20.0 million milestone payments, respectively. These development milestones were recognized as collaborative arrangements revenue through September 2012. In October 2011, the Company achieved two development milestones upon the FDA’s acceptance of the linaclotide New Drug Applications (“NDA”) for both IBS-C and CIC in adults and received milestone payments totaling $20.0 million from Actavis. In August 2012, the Company achieved two additional development milestones upon the FDA’s approval of the linaclotide NDAs for both IBS-C and CIC in adults and received milestone payments totaling $85.0 million from Actavis in September 2012, accordingly. In accordance with ASU 2010-17, these four development milestones were recognized as collaborative arrangements revenue in their entirety upon achievement. The remaining milestone payment that could be received from Actavis upon the achievement of sales targets will be recognized as collaborative arrangements revenue as earned.

As a result of the research and development cost-sharing provisions of the collaboration, the Company offset approximately $1.5 million and approximately $2.1 million against research and development costs during the three and six months ended June 30, 2014, respectively, and recognized less than $0.1 million and approximately $3.0 million in incremental research and development costs during the three and six months ended June 30, 2013, respectively, to reflect its obligation under the collaboration to bear half of the development costs incurred by both parties.

The Company receives 50% of the net profits and bears 50% of the net losses from the commercial sale of LINZESS in the U.S., provided, however, that if either party provides fewer calls on physicians in a particular year than it is contractually required to provide, such party’s share of the net profits will be adjusted as stipulated by the collaboration agreement. Net profits or net losses consist of net sales to third-party customers and sublicense income in the U.S. less cost of goods sold as well as selling, general and administrative expenses. Net sales are calculated and recorded by Actavis and may include gross sales net of discounts, rebates, allowances, sales taxes, freight and insurance charges, and other applicable deductions. The Company records its share of the net profits or net losses from the sale of LINZESS on a net basis and presents the settlement payments to and from Actavis as collaboration expense or collaborative arrangements revenue, as applicable. The Company and Actavis began commercializing LINZESS in the U.S. in December 2012.

The following table presents the amounts recorded by the Company for commercial efforts related to LINZESS in the three and six months ended June 30, 2014 and 2013 (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

2014

2013

2014

2013

Collaborative arrangements revenue (1) (2)

1,778

—

10,225

—

Collaboration expense

—

(11,162

)

—

(35,892

)

Selling, general and administrative costs incurred by the Company (1)

(7,806

)

(8,271

)

(15,805

)

(16,810

)

The Company’s share of net loss

(6,028

)

(19,433

)

(5,580

)

(52,702

)

(1) Includes only collaborative arrangement revenue or selling, general and administrative costs attributable to the cost-sharing arrangement with Actavis.

(2) Includes a net profit share adjustment of approximately $2.3 million recorded during the three months ended June 30, 2014, as described above.

In May 2014, Actavis began commercializing CONSTELLA in Canada and in June 2014, Almirall began commercializing LINZESS in Mexico. The Company records royalties on sales of CONSTELLA in Canada and LINZESS in Mexico one quarter in arrears as it does not have access to the royalty reports from its partners or the ability to estimate the royalty revenue in the period earned.

Almirall, S.A.

In April 2009, the Company entered into a license agreement with Almirall to develop and commercialize linaclotide in Europe (including the Commonwealth of Independent States and Turkey) for the treatment of IBS-C, CIC and other GI conditions. Under the terms of the license agreement, Almirall is responsible for the expenses associated with the development and commercialization of linaclotide in the European territory and the Company is required to participate on a joint development committee over linaclotide’s development period.

In May 2009, the Company received an approximately $38.0 million payment from Almirall representing a $40.0 million non-refundable up-front payment net of foreign withholding taxes. The Company elected to record the non-refundable up-front payment net of taxes withheld. The Company recognized the up-front license fee as collaborative arrangements revenue on a straight-line basis through September 30, 2012, the period over which linaclotide was developed under the license agreement.

The license agreement also included a $15.0 million contingent equity investment, in the form of a forward purchase contract, which required Almirall to purchase shares of the Company’s convertible preferred stock upon achievement of a specific development milestone. At the inception of the arrangement, the Company valued the contingent equity investment and recorded an approximately $6.0 million asset and incremental deferred revenue. The $6.0 million of incremental deferred revenue was recognized as collaborative arrangements revenue through September 2012. In November 2009, the Company achieved the development milestone triggering the equity investment and reclassified the forward purchase contract as a reduction to convertible preferred stock. On November 13, 2009, the Company received $15.0 million from Almirall for the purchase of 681,819 shares of convertible preferred stock (Note 11).

The original license agreement also included contingent milestone payments that could total up to $40.0 million upon achievement of specific development and commercial launch milestones. In November 2010, the Company achieved a development milestone, which resulted in an approximately $19.0 million payment, representing a $20.0 million milestone, net of foreign withholding taxes. This development milestone was recognized as collaborative arrangements revenue through September 2012. Commercial milestone payments under the original license agreement consisted of $4.0 million due upon the first commercial launch in each of the five major E.U. countries set forth in the agreement.

In June 2013 and February 2014, the Company and Almirall amended the original license agreement. Pursuant to the terms of the amendments, (i) the commercial launch milestones were reduced to $17.0 million; (ii) new sales-based milestone payments were added to the agreement; and (iii) the escalating royalties based on sales of linaclotide were modified such that they begin in the low-twenties percent and escalate to the mid-forties percent through April 2017, and thereafter begin in the mid-twenties percent and escalate to the mid-forties percent at lower sales thresholds. In each case, these royalty payments are reduced by the transfer price paid for the active pharmaceutical ingredient (“API”) included in the product actually sold in the Almirall territory and other contractual deductions. The Company concluded that the amendments were a material modification, but the modification did not have a material impact on the Company’s consolidated financial statements. The commercial launch and sales-based milestones are recognized as revenue as earned. The Company records royalties on sales of CONSTELLA one quarter in arrears as it does not have access to the royalty reports from Almirall or the ability to estimate the royalty revenue in the period earned.

During the second quarter of 2013, the Company achieved two milestones under the amended Almirall license agreement, which resulted in payments of approximately $1.9 million from Almirall to the Company related to the commercial launches in two of the five major E.U. countries, the United Kingdom and Germany. The approximately $1.9 million payment represented the two $1.0 million milestones, net of foreign tax withholdings. During the first and second quarters of 2014, the Company achieved two milestones under the amended Almirall license agreement triggering payments of approximately $1.0 million each related to the commercial launches in two additional major E.U. countries, Italy and Spain. Each approximately $1.0 million payment represents the $1.0 million milestone, net of foreign tax withholdings.

The Company recognized approximately $2.8 million and approximately $7.3 million in total collaborative arrangements revenue from the Almirall license agreement during the three and six months ended June 30, 2014, respectively, including approximately $1.7 million and approximately $5.1 million, respectively, from the sale of API to Almirall, approximately $0.9 million and approximately $1.9 million, respectively, in commercial launch milestones, as well as approximately $0.2 million and approximately $0.3 million, respectively, in royalty revenue. The Company recognized approximately $7.8 million and approximately $10.0 million in total collaborative arrangements revenue from the Almirall license agreement during the three and six months ended June 30, 2013, respectively, including approximately $5.9 million and approximately $8.1 million, respectively, from the sale of API to Almirall, and approximately $1.9 million in each period in commercial launch milestones.

Astellas Pharma Inc.

In November 2009, the Company entered into a license agreement with Astellas to develop and commercialize linaclotide for the treatment of IBS-C, CIC and other GI conditions in Japan, South Korea, Taiwan, Thailand, the Philippines and Indonesia. As a result of an amendment executed in March 2013, the Company regained rights to linaclotide in South Korea, Taiwan, Thailand, the Philippines and Indonesia. The Company concluded that the amendment was not a material modification of the license agreement. Astellas continues to be responsible for all activities relating to development, regulatory approval and commercialization in Japan as well as funding any costs and the Company is required to participate on a joint development committee over linaclotide’s development period.

In 2009, Astellas paid the Company a non-refundable, up-front licensing fee of $30.0 million, which is being recognized as collaborative arrangements revenue on a straight-line basis over the Company’s estimate of the period over which linaclotide will be developed under the license agreement. In March 2013, the Company revised its estimate of the development period from 115 months to 85 months based on the Company’s assessment of regulatory approval timelines for Japan. This resulted in the recognition of an additional approximately $0.5 million and approximately $1.0 million of revenue in the three and six months ended June 30, 2014, respectively.

The agreement also includes additional development milestone payments that could total up to $45.0 million. These milestone payments, none of which the Company considers substantive, consist of $15.0 million upon initiation of a Phase III study for linaclotide in Japan, $15.0 million upon filing of the Japanese equivalent of an NDA with the relevant regulatory authority in Japan, and $15.0 million upon approval of such equivalent by the relevant regulatory authority. In addition, the Company will receive royalties which escalate based on sales volume, beginning in the low-twenties percent, less the transfer price paid for the API included in the product actually sold and other contractual deductions.

At June 30, 2014, approximately $14.0 million of the up-front license fee remains deferred. During the three and six months ended June 30, 2014, the Company recognized approximately $1.9 million and approximately $3.2 million, respectively, in collaborative arrangements revenue from the Astellas license agreement, including approximately $0.7 million during the three and six months ended June 30, 2014 from the sale of API to Astellas. During the three and six months ended June 30, 2013, the Company recognized approximately $1.5 million and approximately $2.3 million, respectively, in collaborative arrangements revenue from the Astellas license agreement, including approximately $0.2 million in each period from the sale of API to Astellas.

AstraZeneca AB

In October 2012, the Company entered into a collaboration agreement with AstraZeneca (the “AstraZeneca Collaboration Agreement”) to co-develop and co-commercialize linaclotide in China, Hong Kong and Macau (the “License Territory”). The collaboration provides AstraZeneca with an exclusive nontransferable license to exploit the underlying technology in the License Territory. The parties will share responsibility for continued development and commercialization of linaclotide under a joint development plan and a joint commercialization plan, respectively, with AstraZeneca having primary responsibility for the local operational execution.

The parties agreed to an Initial Development Plan (“IDP”) which includes the planned development of linaclotide in China, including the lead responsibility for each activity and the related internal and external costs. The IDP indicates that AstraZeneca is responsible for a multinational Phase III clinical trial, the Company is responsible for nonclinical development and supplying clinical trial material and both parties are responsible for the regulatory submission process. The IDP indicates that the party specifically designated as being responsible for a particular development activity under the IDP shall implement and conduct such activities. The activities are governed by a Joint Development Committee (“JDC”), with equal representation from each party. The JDC is responsible for approving, by unanimous consent, the joint development plan and development budget, as well as approving protocols for clinical studies, reviewing and commenting on regulatory submissions, and providing an exchange of data and information.

The AstraZeneca Collaboration Agreement will continue until there is no longer a development plan or commercialization plan in place, however, it can be terminated by AstraZeneca at any time upon 180 days’ prior written notice. Under certain circumstances, either party may terminate the AstraZeneca Collaboration Agreement in the event of bankruptcy or an uncured material breach of the other party. Upon certain change in control scenarios of AstraZeneca, the Company may elect to terminate the AstraZeneca Collaboration Agreement and may re-acquire its product rights in a lump sum payment equal to the fair market value of such product rights.

In connection with the AstraZeneca Collaboration Agreement, the Company and AstraZeneca also executed a co-promotion agreement (the “Co-Promotion Agreement”), pursuant to which the Company utilized its existing sales force to co-promote NEXIUM® (esomeprazole magnesium), one of AstraZeneca’s products, in the U.S. The Co-Promotion Agreement expired in May 2014.

There are no refund provisions in the AstraZeneca Collaboration Agreement and the Co-Promotion Agreement (together, the “AstraZeneca Agreements”).

Under the terms of the AstraZeneca Collaboration Agreement, the Company received a $25.0 million non-refundable upfront payment upon execution. The Company is also eligible for $125.0 million in additional commercial milestone payments contingent on the achievement of certain sales targets. The parties will also share in the net profits and losses associated with the development and commercialization of linaclotide in the License Territory, with AstraZeneca receiving 55% of the net profits or incurring 55% of the net losses until a certain specified commercial milestone is achieved, at which time profits and losses will be shared equally thereafter.

Activities under the AstraZeneca Agreements were evaluated in accordance with the Accounting Standards Codification (“ASC”) Topic 605-25, Revenue Recognition — Multiple-Element Arrangements (“ASC 605-25”) to determine if they represented a multiple element revenue arrangement. The Company identified the following deliverables in the AstraZeneca Agreements:

· an exclusive license to develop and commercialize linaclotide in the License Territory (the “License Deliverable”),

· research, development and regulatory services pursuant to the IDP (the “R&D Services”),

· JDC services,

· obligation to supply clinical trial material, and

· co-promotion services for AstraZeneca’s product (the “Co-Promotion Deliverable”).

The License Deliverable is nontransferable and has certain sublicense restrictions. The Company determined that the License Deliverable had standalone value as a result of AstraZeneca’s internal product development and commercialization capabilities, which would enable it to use the License Deliverable for its intended purposes without the involvement of the Company. The remaining deliverables were deemed to have standalone value based on their nature and all deliverables met the criteria to be accounted for as separate units of accounting under ASC 605-25. Factors considered in this determination included, among other things, whether any other vendors sell the items separately and if the customer could use the delivered item for its intended purpose without the receipt of the remaining deliverables.

The Company identified the supply of linaclotide drug product for commercial requirements and commercialization services as contingent deliverables because these services are contingent upon the receipt of regulatory approval to commercialize linaclotide in the License Territory, and there were no binding commitments or firm purchase orders pending for commercial supply. As these deliverables are contingent, and are not at an incremental discount, they are not evaluated as deliverables at the inception of the arrangement. These contingent deliverables will be evaluated and accounted for separately as each related contingency is resolved. As of June 30, 2014, no contingent deliverables were provided by the Company under the AstraZeneca Agreements.

The total amount of the non-contingent consideration allocable to the AstraZeneca Agreements of approximately $27.8 million (“Arrangement Consideration”) includes the $25.0 million non-refundable upfront payment and 55% of the costs for clinical trial material supply services and research, development and regulatory activities allocated to the Company in the IDP and as approved by the JDC in subsequent periods, or approximately $2.8 million. The Company allocated the original Arrangement Consideration of approximately $26.9 million to the non-contingent deliverables based on management’s best estimate of selling price (“BESP”) of each deliverable using the relative selling price method as the Company did not have vendor-specific objective evidence or third-party evidence of selling price for such deliverables. The Company allocated the additional arrangement consideration of approximately $0.9 million, as approved by the JDC in subsequent periods, to the remaining non-contingent deliverables using the relative selling price method. The Company estimated the BESP for the License Deliverable using a multi-period excess-earnings method under the income approach which utilized cash flow projections, the key assumptions of which included the following market conditions and entity-specific factors: (a) the specific rights provided under the license to develop and commercialize linaclotide; (b) the potential indications for linaclotide pursuant to the license; (c) the likelihood linaclotide will be developed for more than one indication; (c) the stage of development of linaclotide for IBS-C and CIC and the projected timeline for regulatory approval; (d) the development risk by indication; (f) the market size by indication; (g) the expected product life of linaclotide assuming commercialization; (h) the competitive environment, and (i) the estimated development and commercialization costs of linaclotide in the License Territory. The Company utilized a discount rate of 11.5% in its analysis, representing the weighted average cost of capital derived from returns on equity for comparable companies. The Company determined its BESP for the remaining deliverables based on the nature of the services to be performed and estimates of the associated effort and cost of the services adjusted for a reasonable profit margin such that they represented estimated market rates for similar services sold on a standalone basis.

The Company concluded that a change in key assumptions used to determine BESP for each deliverable would not have a significant effect on the allocation of the Arrangement Consideration, as the estimated selling price of the License Deliverable significantly exceeds the other deliverables.

Of the approximately $27.8 million Arrangement Consideration, approximately $24.7 million was allocated to the License Deliverable, approximately $1.1 million to the R&D Services, approximately $0.1 million to the JDC services, approximately $0.1 million to the clinical trial material supply services, and approximately $1.8 million to the Co-Promotion Deliverable in the relative selling price model. The Company recognized all $24.7 million allocated to the License Deliverable as revenue upon the execution of the AstraZeneca Agreements as the associated unit of accounting had been delivered and there is no general right of return. At inception, the remaining approximately $0.3 million of the Arrangement Consideration received, and allocated to the remaining deliverables based on their relative selling prices, was deferred.

Because the Company shares development costs with AstraZeneca, payments from AstraZeneca with respect to both research and development and selling, general and administrative costs incurred by the Company prior to the commercialization of linaclotide in the License Territory are recorded as a reduction to expense, in accordance with the Company’s policy, which is consistent with the nature of the cost reimbursement. Development costs incurred by the Company that pertain to the IDP and subsequent amendments to the IDP, as approved by the JDC, are recorded as research and development expense as incurred. Payments to AstraZeneca are recorded as incremental research and development expense.

The Company will perform the R&D Services, JDC services and supply clinical trial materials during the estimated development period. All Arrangement Consideration allocated to such services is being recognized as a reduction of research and development costs, using the proportional performance method, by which the amounts are recognized in proportion to the costs incurred. As a result of the cost-sharing arrangements under the collaboration, the Company recognized approximately $0.9 million and approximately $1.3 million in incremental research and development costs during the three and six months ended June 30, 2014, respectively, and approximately $0.5 million and approximately $0.6 million in incremental research and development costs during the three and six months ended June 30, 2013, respectively.

The amount allocated to the Co-Promotion Deliverable is being recognized as collaborative arrangements revenue using the proportional performance method, which approximates recognition on a straight-line basis beginning on the date that the Company began to co-promote AstraZeneca’s product, through December 31, 2013 (the earliest cancellation date). As of December 31, 2013, the Company completed its obligation related to the Co-Promotion Deliverable; however, the revenue recognized in the statement of operations was limited to the non-contingent consideration in accordance with ASC 605-25. During the three and six months ended June 30, 2014, the Company recognized approximately $0.3 million and approximately $0.7 million, respectively, as collaborative arrangements revenue related to this deliverable as this portion of the arrangement consideration was no longer contingent. During the three and six months ended June 30, 2013, the Company recognized approximately $0.4 million and approximately $0.6 million, respectively, in collaborative arrangements revenue related to this deliverable.

The Company reassesses the periods of performance for each deliverable at the end of each reporting period.

Milestone payments received from AstraZeneca upon the achievement of sales targets will be recognized as earned.

Other Collaboration and License Agreements

The Company has other collaboration and license agreements that are not individually significant to its business. In connection with entering into these agreements, the Company made aggregate up-front payments of approximately $5.8 million, which were expensed as research and development expense. Pursuant to the terms of certain of those agreements, the Company may be required to pay $99.5 million for development milestones, of which $2.5 million had been paid, and $265.5 million for regulatory milestones, none of which had been paid, in each case as of June 30, 2014. In addition, pursuant to the terms of another agreement, the contingent milestones could total up to $114.5 million per product to one of the Company’s collaboration partners, including $21.5 million for development milestones, $58.0 million for regulatory milestones and $35.0 million for sales-based milestones. Further, under such agreements, the Company is also required to fund certain research activities and, if any product related to these collaborations is approved for marketing, to pay significant royalties on future sales. The Company did not incur any research and development expense associated with the Company’s other collaboration and license agreements during the three months ended June 30, 2014. During the six months ended June 30, 2014, the Company incurred approximately $1.0 million in research and development expense associated with the Company’s other collaboration and license agreements. During the three and six months ended June 30, 2013, the Company incurred approximately $0.8 million and approximately $1.8 million, respectively, in research and development expense associated with the Company’s other collaboration and license agreements.

Fair_Value_of_Financial_Instru

Fair Value of Financial Instruments	6 Months Ended
	Jun. 30, 2014
Fair Value of Financial Instruments	'
Fair Value of Financial Instruments	'
	4. Fair Value of Financial Instruments

	The tables below present information about the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2014 and December 31, 2013 and indicate the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize observable inputs such as quoted prices in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are either directly or indirectly observable, such as quoted prices, interest rates and yield curves. Fair values determined by Level 3 inputs utilize unobservable data points in which there is little or no market data, which require the Company to develop its own assumptions for the asset or liability.

	The Company’s investment portfolio includes many fixed income securities that do not always trade on a daily basis. As a result, the pricing services used by the Company apply other available information as applicable through processes such as benchmark yields, benchmarking of like securities, sector groupings and matrix pricing to prepare valuations. In addition, model processes were used to assess interest rate impact and develop prepayment scenarios. These models take into consideration relevant credit information, perceived market movements, sector news and economic events. The inputs into these models may include benchmark yields, reported trades, broker-dealer quotes, issuer spreads and other relevant data.

	The following tables present the assets the Company has measured at fair value on a recurring basis (in thousands):

				Fair Value Measurements at Reporting Date Using
	Description	June 30,		Quoted Prices in		Significant Other		Significant
		2014		Active Markets for		Observable		Unobservable
				Identical Assets		Inputs		Inputs
				(Level 1)		(Level 2)		(Level 3)
	Cash and cash equivalents:
	Money market funds	$	85,236	$	85,236	$	—	$	—
	Available-for-sale securities:
	U.S. Treasury securities	24,011		24,011		—		—
	U.S. government-sponsored securities	182,610		—		182,610		—
	Total	$	291,857	$	109,247	$	182,610	$	—

				Fair Value Measurements at Reporting Date Using
	Description	December 31,		Quoted Prices in		Significant Other		Significant
		2013		Active Markets for		Observable		Unobservable
				Identical Assets		Inputs		Inputs
				(Level 1)		(Level 2)		(Level 3)
	Cash and cash equivalents:
	Money market funds	$	59,747	$	59,747	$	—	$	—
	U.S. government-sponsored securities	7,505		—		7,505		—
	Available-for-sale securities:
	U.S. Treasury securities	7,253		7,253		—		—
	U.S. government-sponsored securities	114,859		—		114,859		—
	Total	$	189,364	$	67,000	$	122,364	$	—

	There were no transfers between Level 1 and Level 2 of the fair value hierarchy during the three or six months ended June 30, 2014 or 2013.

	Cash equivalents, accounts receivable, including related party accounts receivable, prepaid expenses and other current assets, accounts payable, related party accounts payable, accrued expenses and the current portion of capital lease obligations at June 30, 2014 and December 31, 2013 are carried at amounts that approximate fair value due to their short-term maturities.

	The non-current portion of the capital lease obligations at June 30, 2014 and December 31, 2013 approximates fair value as it bears interest at a rate approximating a market interest rate.

AvailableforSale_Securities

Available-for-Sale Securities	6 Months Ended
	Jun. 30, 2014
Available-for-Sale Securities	'
Available-for-Sale Securities	'
	5. Available-for-Sale Securities

	The following tables summarize the available-for-sale securities held at June 30, 2014 and December 31, 2013 (in thousands):

		Amortized Cost		Gross		Gross			Fair Value
				Unrealized		Unrealized
				Gains		Losses
	June 30, 2014:
	U.S. government-sponsored securities	$	182,615	$	10	$	(15	)	$	182,610
	U.S. Treasury securities	24,003		8		—			24,011
	Total	$	206,618	$	18	$	(15	)	$	206,621

		Amortized Cost		Gross		Gross			Fair Value
				Unrealized		Unrealized
				Gains		Losses
	December 31, 2013:
	U.S. government-sponsored securities	$	114,857	$	6	$	(4	)	$	114,859
	U.S. Treasury securities	7,253		—		—			7,253
	Total	$	122,110	$	6	$	(4	)	$	122,112

	The contractual maturities of all securities held at June 30, 2014 are one year or less. There were 26 and 12 available-for-sale securities in an unrealized loss position at June 30, 2014 and December 31, 2013, respectively, none of which had been in an unrealized loss position for more than twelve months. The aggregate fair value of these securities at June 30, 2014 and December 31, 2013 was approximately $85.5 million and approximately $38.7 million, respectively. The Company reviews its investments for other-than-temporary impairment whenever the fair value of an investment is less than amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers whether it has the ability and intent to hold the investment until a market price recovery and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. The Company does not intend to sell the investments and it is not more likely than not that the Company will be required to sell the investments before recovery of their amortized cost bases, which may be maturity. The Company did not hold any securities with other-than-temporary impairment at June 30, 2014.

	There were no sales of available-for-sale securities during the three or six months ended June 30, 2014 or 2013. Gross realized gains and losses on the sales of available-for-sale securities that have been included in other income (expense), net unrealized holding gains or losses for the period that have been included in accumulated other comprehensive income as well as gains and losses reclassified out of accumulated other comprehensive income into other income (expense) were not material to the Company’s consolidated results of operations. The cost of securities sold or the amount reclassified out of the accumulated other comprehensive income into other income (expense) is based on the specific identification method for purposes of recording realized gains and losses.

Inventory

Inventory	6 Months Ended
	Jun. 30, 2014
Inventory	'
Inventory	'
	6. Inventory

	Inventory consisted of the following (in thousands):

		June 30,		December 31,
		2014		2013
	Raw materials	$	12,989	$	22,145


	Inventory at June 30, 2014 and December 31, 2013 represents API that is available for commercial sale. The Company writes down the value of its inventory for excess, obsolescence or other net realizable value adjustments to cost of revenue. During the three and six months ended June 30, 2014, approximately $8.9 million was charged to cost of revenue. No amounts of inventory were written down during the three or six months ended June 30, 2013.

Property_and_Equipment

Property and Equipment	6 Months Ended
	Jun. 30, 2014
Property and Equipment	'
Property and Equipment	'
	7. Property and Equipment

	Property and equipment, net consisted of the following (in thousands):

		June 30,			December 31,
		2014			2013
	Manufacturing equipment	$	3,623		$	2,812
	Laboratory equipment	14,530			14,039
	Computer and office equipment	5,272			5,202
	Furniture and fixtures	2,365			2,365
	Software	12,373			12,352
	Construction in process	1,362			996
	Leased vehicles	4,472			4,472
	Leasehold improvements	36,831			36,827
		80,828			79,065
	Less accumulated depreciation and amortization	(47,268		)	(41,689		)
		$	33,560		$	37,376

Accrued_Expenses

Accrued Expenses	6 Months Ended
	Jun. 30, 2014
Accrued Expenses	'
Accrued Expenses	'
	8. Accrued Expenses

	Accrued expenses consisted of the following (in thousands):

		June 30,		December 31,
		2014		2013
	Salaries and benefits	$	12,488	$	13,784
	Workforce reduction charges	373		—
	Professional fees	706		531
	Accrued interest	856		856
	Other	4,625		3,267
		$	19,048	$	18,438

Notes_Payable

Notes Payable	6 Months Ended
	Jun. 30, 2014
Notes Payable	'
Notes Payable	'
	9. Notes Payable

	On January 4, 2013, the Company closed a private placement of $175.0 million in aggregate principal amount of notes due on or before June 15, 2024. The notes bear an annual interest rate of 11%, with interest payable March 15, June 15, September 15 and December 15 of each year (each a “Payment Date”) beginning June 15, 2013. Beginning March 15, 2014, the Company began making quarterly payments on the notes equal to the greater of (i) 7.5% of net sales of LINZESS in the U.S. for the preceding quarter (the “Synthetic Royalty Amount”) and (ii) accrued and unpaid interest on the notes (the “Required Interest Amount”). Principal on the notes will be repaid in an amount equal to the Synthetic Royalty Amount minus the Required Interest Amount, when this is a positive number, until the principal has been paid in full. Given the principal payments on the notes are based on the Synthetic Royalty Amount, which will vary from quarter to quarter, the notes may be repaid prior to June 15, 2024, the final legal maturity date. The Company did not make any principal payments through June 30, 2014 and expects to pay approximately $6.6 million of the principal within twelve months following June 30, 2014.

	The notes are secured solely by a security interest in a segregated bank account established to receive the required quarterly payments. Up to the amount of the required quarterly payments under the notes, Actavis will deposit its quarterly profit (loss) sharing payments due to the Company under the collaboration agreement, if any, into the segregated bank account. If the funds deposited by Actavis into the segregated bank account are insufficient to make a required payment of interest or principal on a particular Payment Date, the Company is obligated to deposit such shortfall out of the Company’s general funds into the segregated bank account.

	The notes may be redeemed at any time prior to maturity, in whole or in part, at the option of the Company. The Company will pay a redemption price equal to the percentage of outstanding principal balance of the notes being redeemed specified below for the period in which the redemption occurs (plus the accrued and unpaid interest to the redemption date on the notes being redeemed):

	Payment Dates	Redemption Percentage
	From and including January 1, 2014 to and including December 31, 2014	112	%
	From and including January 1, 2015 to and including December 31, 2015	105.5	%
	From and including January 1, 2016 to and including December 31, 2016	102.75	%
	From and including January 1, 2017 and thereafter	100	%

	The notes contain certain covenants related to the Company’s obligations with respect to the commercialization of LINZESS and the related collaboration agreement with Actavis, as well as certain customary covenants, including covenants that limit or restrict the Company’s ability to incur certain liens, merge or consolidate or make dispositions of assets. The notes also specify a number of events of default (some of which are subject to applicable cure periods), including, among other things, covenant defaults, other non-payment defaults, and bankruptcy and insolvency defaults. Upon the occurrence of an event of default, subject to cure periods in certain circumstances, all amounts outstanding may become immediately due and payable.

	The upfront cash proceeds of $175.0 million, less a discount of approximately $0.4 million for payment of legal fees incurred on behalf of the noteholders, were recorded as notes payable at issuance. The Company also capitalized approximately $7.3 million of debt issuance costs, which are included in prepaid expenses and other current assets and in other assets on the Company’s consolidated balance sheet. The debt issuance costs and discount are being amortized over the estimated term of the obligation using the effective interest method. The repayment provisions represent embedded derivatives that are clearly and closely related to the notes and as such do not require separate accounting treatment.

	The accounting for the notes requires the Company to make certain estimates and assumptions about the future net sales of LINZESS in the U.S. LINZESS has been marketed since December 2012 and the estimates of the magnitude and timing of LINZESS net sales are subject to significant variability due to the recent product launch and the extended time period associated with the financing transaction, and thus subject to significant uncertainty. Therefore, these estimates and assumptions are likely to change as the Company gains additional experience marketing LINZESS, which may result in future adjustments to the portion of the debt that is classified as a current liability, the amortization of debt issuance costs and discounts as well as the accretion of the interest expense. Any such adjustments could be material to the condensed consolidated financial statements.

	The fair value of the notes was estimated to be approximately $183.8 million as of June 30, 2014, and was determined using Level 3 inputs, including a quoted rate.

Employee_Stock_Benefit_Plans

Employee Stock Benefit Plans	6 Months Ended
Employee Stock Benefit Plans	Jun. 30, 2014
Employee Stock Benefit Plans	'
Employee Stock Benefit Plans	'
	10. Employee Stock Benefit Plans

	The Company has several share-based compensation plans under which stock options, restricted stock, restricted stock units, and other share-based awards are available for grant to employees, directors and consultants of the Company.

	The following table summarizes share-based compensation expense reflected in the condensed consolidated statements of operations for the three and six months ended June 30, 2014 and 2013 (in thousands):

		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2014			2013			2014		2013
	Research and development	$	2,271		$	2,701		$	4,961	$	4,925
	Selling, general and administrative	3,741			2,116			7,125		5,167
		$	6,012		$	4,817		$	12,086	$	10,092

	A summary of stock option activity for the six months ended June 30, 2014 is as follows:

		Number of Shares		Weighted-Average
		Number of Shares		Exercise Price

	Outstanding at December 31, 2013	20,927,874		$	8.87
	Granted	2,856,300		14
	Exercised	(1,738,266	)	5.44
	Cancelled	(1,228,161	)	12.07
	Outstanding at June 30, 2014	20,817,747		$	9.67

	The weighted-average assumptions used to estimate the fair value of the stock options using the Black-Scholes option-pricing model were as follows for the three and six months ended June 30, 2014 and 2013:

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2014		2013		2014		2013
	Expected volatility	48.1	%	46.9	%	46.7	%	46.3	%
	Expected term (in years)	6.1		6.5		6.1		6.5
	Risk-free interest rate	2	%	1.4	%	1.8	%	1.4	%
	Expected dividend yield	—	%	—	%	—	%	—	%

Related_Party_Transactions

Related Party Transactions	6 Months Ended
Related Party Transactions	Jun. 30, 2014
Related Party Transactions	'
Related Party Transactions	'
	11. Related Party Transactions

	The Company has and currently obtains legal services from a law firm that is an investor in the Company. The Company paid less than $0.1 million in legal fees to this investor during the three and six months ended June 30, 2014 and 2013. At June 30, 2014 and December 31, 2013, the Company had less than $0.1 million of accounts payable due to this related party.

	In September 2009, Forest became a related party when the Company sold to Forest 2,083,333 shares of the Company’s convertible preferred stock. On July 1, 2014, Actavis became a related party when it completed its acquisition of Forest. In November 2009, Almirall became a related party when the Company sold to Almirall 681,819 shares of the Company’s convertible preferred stock (Note 3). These shares of preferred stock converted to the Company’s Class B common stock on a 1:1 basis upon the completion of the Company’s initial public offering in February 2010. Amounts due to and due from Actavis and Almirall are reflected as related party accounts payable and related party accounts receivable, respectively. These balances are reported net of any balances due to or from the related party. At June 30, 2014, the Company had approximately $1.2 million in related party accounts receivable associated with Almirall and approximately $3.3 million in related party accounts receivable, net of related party accounts payable, associated with Actavis. At December 31, 2013, the Company had less than $0.1 million in related party accounts receivable associated with Almirall and approximately $2.7 million in related party accounts receivable, net of related party accounts payable, associated with Actavis.

Public_Offerings

Public Offerings	6 Months Ended
Public Offerings	Jun. 30, 2014
Public Offerings	'
Public Offerings	'
	12. Public Offerings

	In February 2014, the Company sold 15,784,325 shares of its Class A common stock through a firm commitment, underwritten public offering at a price to the public of $12.75 per share. As a result of this offering, the Company received aggregate net proceeds, after underwriting discounts and commissions and other offering expenses, of approximately $190.4 million.

	During the second quarter of 2013, the Company sold 11,204,948 shares of its Class A common stock through a firm commitment, underwritten public offering at a price to the public of $13.00 per share. As a result of this offering, the Company received aggregate net proceeds, after underwriting discounts and commissions and other offering expenses, of approximately $137.8 million.

Workforce_Reduction

Workforce Reduction	6 Months Ended
	Jun. 30, 2014
Workforce Reduction	'
Workforce Reduction	'
	13. Workforce Reduction

	On January 8, 2014, the Company announced a headcount reduction of approximately 10% to align its workforce with its strategy to grow a leading GI therapeutics company. The field-based sales force and medical science liaison team were excluded from the workforce reduction.

	During the three months ended March 31, 2014, the Company substantially completed the implementation of this reduction in workforce and, in accordance with ASC 420, Exit or Disposal Cost Obligations, recorded approximately $4.3 million of costs in research and development and selling, general and administrative expenses, including employee severance, benefits and related costs. The Company did not record any significant charges during the three months ended June 30, 2014, and the Company does not expect to incur any additional significant costs, associated with this workforce reduction.

	The following table summarizes the charges related to the reduction in workforce for the six months ended June 30, 2014 (in thousands):

		Charges		Adjustments			Amounts			Non-cash			Amounts
							Paid			Expense			Accrued at
													June 30, 2014
	Employee severance, benefits and related costs	$	4,334	$	(43	)	$	(3,367	)	$	(551	)	$	373
	Total	$	4,334	$	(43	)	$	(3,367	)	$	(551	)	$	373

	The Company expects that substantially all remaining payments related to this reduction in workforce will be made by the end of 2014.

Subsequent_Events

Subsequent Events	6 Months Ended
Subsequent Events	Jun. 30, 2014
Subsequent Events	'
Subsequent Events	'
	14. Subsequent Events

	In July 2014, the Company agreed to sublease, with the landlord’s consent, a portion of its Cambridge, Massachusetts corporate headquarters through January 2018 as it does not intend to use the space for its operations. The subleases provide for total payments to the Company through January 2018 of approximately $18.0 million. Upon meeting the cease use criteria in ASC 420, Exit or Disposal Cost Obligations, the Company recorded a charge of approximately $1.9 million, which represents its obligations to the landlord associated with the sublet space, net of sublease income from the executed subleases.

Nature_of_Business_Policies

Nature of Business (Policies)	6 Months Ended
Nature of Business (Policies)	Jun. 30, 2014
Nature of Business	'
Basis of Presentation	'
	Basis of Presentation

	The accompanying condensed consolidated financial statements and the related disclosures are unaudited and have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 7, 2014.

	The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and, in the opinion of management, reflect all normal recurring adjustments considered necessary for a fair presentation of the Company’s financial position as of June 30, 2014, results of its operations for the three and six months ended June 30, 2014 and 2013 and its cash flows for the six months ended June 30, 2014 and 2013. The results of operations for the three and six months ended June 30, 2014 are not necessarily indicative of the results that may be expected for the full year or any other subsequent interim period.
Principles of Consolidation	'
	Principles of Consolidation

	The accompanying condensed consolidated financial statements include the accounts of Ironwood Pharmaceuticals, Inc. and its wholly owned subsidiaries, Ironwood Pharmaceuticals Securities Corporation and Ironwood Pharmaceuticals GmbH. All intercompany transactions and balances are eliminated in consolidation.
Use of Estimates	'
	Use of Estimates

	The preparation of condensed consolidated financial statements in accordance with U.S. GAAP requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosure of contingent assets and liabilities. On an on-going basis, the Company’s management evaluates its estimates, including those related to revenue recognition, available-for-sale securities, inventory valuation and related reserves, impairment of long-lived assets, balance sheet classification of notes payable, income taxes including the valuation allowance for deferred tax assets, research and development expense, contingencies and share-based compensation. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known.
New Accounting Pronouncements	'
	New Accounting Pronouncements

	In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in Accounting Standards Codification Topic 605, Revenue Recognition and most industry-specific guidance. The new standard requires that an entity recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The update also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. ASU 2014-09 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and should be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of initially applying this update recognized at the date of initial application. The Company has not determined yet the potential effects of the adoption of this standard on its consolidated financial position, results of operations or cash flows.

	For a discussion of additional recent accounting pronouncements please refer to Note 2, “Summary of Significant Accounting Policies,” in the Company’s 2013 Annual Report on Form 10-K.

	The Company did not adopt any new accounting pronouncements during the six months ended June 30, 2014 that had a material effect on the Company’s condensed consolidated financial statements.

Net_Loss_Per_Share_Tables

Net Loss Per Share (Tables)	6 Months Ended
	Jun. 30, 2014
Net Loss Per Share	'
Schedule of potentially dilutive securities that have been excluded from computation of diluted weighted average shares outstanding	'
	The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as they would be anti-dilutive (in thousands):

		Six Months Ended
		June 30,
		2014	2013
	Options to purchase common stock	20,818	20,470
	Shares subject to repurchase	198	45
		21,016	20,515

Collaboration_and_License_Agre1

Collaboration and License Agreements (Tables)	6 Months Ended
	Jun. 30, 2014
Collaboration and License Agreements	'
Schedule of amount recorded by the Company for share of net loss related to collaborative arrangement	'
	The following table presents the amounts recorded by the Company for commercial efforts related to LINZESS in the three and six months ended June 30, 2014 and 2013 (in thousands):

		Three Months Ended June 30,						Six Months Ended June 30,
		2014			2013			2014			2013
	Collaborative arrangements revenue (1) (2)	$	1,778		$	—		$	10,225		$	—
	Collaboration expense	—			(11,162		)	—			(35,892		)
	Selling, general and administrative costs incurred by the Company (1)	(7,806		)	(8,271		)	(15,805		)	(16,810		)
	The Company’s share of net loss	$	(6,028	)	$	(19,433	)	$	(5,580	)	$	(52,702	)

	(1) Includes only collaborative arrangement revenue or selling, general and administrative costs attributable to the cost-sharing arrangement with Actavis.
	(2) Includes a net profit share adjustment of approximately $2.3 million recorded during the three months ended June 30, 2014, as described above.

Fair_Value_of_Financial_Instru1

Fair Value of Financial Instruments (Tables)	6 Months Ended
	Jun. 30, 2014
Fair Value of Financial Instruments	'
Schedule of assets measured at fair value on a recurring basis	'
	The following tables present the assets the Company has measured at fair value on a recurring basis (in thousands):

				Fair Value Measurements at Reporting Date Using
	Description	June 30,		Quoted Prices in		Significant Other		Significant
		2014		Active Markets for		Observable		Unobservable
				Identical Assets		Inputs		Inputs
				(Level 1)		(Level 2)		(Level 3)
	Cash and cash equivalents:
	Money market funds	$	85,236	$	85,236	$	—	$	—
	Available-for-sale securities:
	U.S. Treasury securities	24,011		24,011		—		—
	U.S. government-sponsored securities	182,610		—		182,610		—
	Total	$	291,857	$	109,247	$	182,610	$	—

				Fair Value Measurements at Reporting Date Using
	Description	December 31,		Quoted Prices in		Significant Other		Significant
		2013		Active Markets for		Observable		Unobservable
				Identical Assets		Inputs		Inputs
				(Level 1)		(Level 2)		(Level 3)
	Cash and cash equivalents:
	Money market funds	$	59,747	$	59,747	$	—	$	—
	U.S. government-sponsored securities	7,505		—		7,505		—
	Available-for-sale securities:
	U.S. Treasury securities	7,253		7,253		—		—
	U.S. government-sponsored securities	114,859		—		114,859		—
	Total	$	189,364	$	67,000	$	122,364	$	—

AvailableforSale_Securities_Ta

Available-for-Sale Securities (Tables)	6 Months Ended
	Jun. 30, 2014
Available-for-Sale Securities	'
Schedule of summary of available-for-sale securities	'
	The following tables summarize the available-for-sale securities held at June 30, 2014 and December 31, 2013 (in thousands):

		Amortized Cost		Gross		Gross			Fair Value
				Unrealized		Unrealized
				Gains		Losses
	June 30, 2014:
	U.S. government-sponsored securities	$	182,615	$	10	$	(15	)	$	182,610
	U.S. Treasury securities	24,003		8		—			24,011
	Total	$	206,618	$	18	$	(15	)	$	206,621

		Amortized Cost		Gross		Gross			Fair Value
				Unrealized		Unrealized
				Gains		Losses
	December 31, 2013:
	U.S. government-sponsored securities	$	114,857	$	6	$	(4	)	$	114,859
	U.S. Treasury securities	7,253		—		—			7,253
	Total	$	122,110	$	6	$	(4	)	$	122,112

Inventory_Tables

Inventory (Tables)	6 Months Ended
	Jun. 30, 2014
Inventory	'
Schedule of Inventory	'
	Inventory consisted of the following (in thousands):

		June 30,		December 31,
		2014		2013
	Raw materials	$	12,989	$	22,145

Property_and_Equipment_Tables

Property and Equipment (Tables)	6 Months Ended
	Jun. 30, 2014
Property and Equipment	'
Schedule of property and equipment	'
	Property and equipment, net consisted of the following (in thousands):

		June 30,			December 31,
		2014			2013
	Manufacturing equipment	$	3,623		$	2,812
	Laboratory equipment	14,530			14,039
	Computer and office equipment	5,272			5,202
	Furniture and fixtures	2,365			2,365
	Software	12,373			12,352
	Construction in process	1,362			996
	Leased vehicles	4,472			4,472
	Leasehold improvements	36,831			36,827
		80,828			79,065
	Less accumulated depreciation and amortization	(47,268		)	(41,689		)
		$	33,560		$	37,376

Accrued_Expenses_Tables

Accrued Expenses (Tables)	6 Months Ended
	Jun. 30, 2014
Accrued Expenses	'
Schedule of accrued expenses	'
	Accrued expenses consisted of the following (in thousands):

		June 30,		December 31,
		2014		2013
	Salaries and benefits	$	12,488	$	13,784
	Workforce reduction charges	373		—
	Professional fees	706		531
	Accrued interest	856		856
	Other	4,625		3,267
		$	19,048	$	18,438

Notes_Payable_Tables

Notes Payable (Tables)	6 Months Ended
Notes Payable (Tables)	Jun. 30, 2014
Notes Payable	'
Schedule of redemption price as percentage of outstanding principal balance	'


	Payment Dates	Redemption Percentage
	From and including January 1, 2014 to and including December 31, 2014	112	%
	From and including January 1, 2015 to and including December 31, 2015	105.5	%
	From and including January 1, 2016 to and including December 31, 2016	102.75	%
	From and including January 1, 2017 and thereafter	100	%

Employee_Stock_Benefit_Plans_T

Employee Stock Benefit Plans (Tables)	6 Months Ended
Employee Stock Benefit Plans (Tables)	Jun. 30, 2014
Employee Stock Benefit Plans	'
Share-based compensation expense reflected in the condensed consolidated statements of operations	'
	The following table summarizes share-based compensation expense reflected in the condensed consolidated statements of operations for the three and six months ended June 30, 2014 and 2013 (in thousands):

		Three Months Ended						Six Months Ended
		June 30,						June 30,
		2014			2013			2014		2013
	Research and development	$	2,271		$	2,701		$	4,961	$	4,925
	Selling, general and administrative	3,741			2,116			7,125		5,167
		$	6,012		$	4,817		$	12,086	$	10,092
Summary of stock option activity	'


		Number of Shares		Weighted-Average
		Number of Shares		Exercise Price

	Outstanding at December 31, 2013	20,927,874		$	8.87
	Granted	2,856,300		14
	Exercised	(1,738,266	)	5.44
	Cancelled	(1,228,161	)	12.07
	Outstanding at June 30, 2014	20,817,747		$	9.67
Schedule of weighted-average assumptions used to estimate the fair value of the stock options using the Black-Scholes option-pricing model	'


		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2014		2013		2014		2013
	Expected volatility	48.1	%	46.9	%	46.7	%	46.3	%
	Expected term (in years)	6.1		6.5		6.1		6.5
	Risk-free interest rate	2	%	1.4	%	1.8	%	1.4	%
	Expected dividend yield	—	%	—	%	—	%	—	%

Workforce_Reduction_Tables

Workforce Reduction (Tables)	6 Months Ended
	Jun. 30, 2014
Workforce Reduction	'
Summary of charges related to the reduction in workforce	'
	The following table summarizes the charges related to the reduction in workforce for the six months ended June 30, 2014 (in thousands):

		Charges		Adjustments			Amounts			Non-cash			Amounts
							Paid			Expense			Accrued at
													June 30, 2014
	Employee severance, benefits and related costs	$	4,334	$	(43	)	$	(3,367	)	$	(551	)	$	373
	Total	$	4,334	$	(43	)	$	(3,367	)	$	(551	)	$	373

Net_Loss_Per_Share_Details

Net Loss Per Share (Details)	6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013
Potentially dilutive securities	'	'
Dilutive securities excluded from the computation of diluted weighted average shares outstanding	21,016	20,515
Options to purchase common stock	'	'
Potentially dilutive securities	'	'
Dilutive securities excluded from the computation of diluted weighted average shares outstanding	20,818	20,470
Shares subject to repurchase	'	'
Potentially dilutive securities	'	'
Dilutive securities excluded from the computation of diluted weighted average shares outstanding	198	45

Collaboration_and_License_Agre2

Collaboration and License Agreements (Details) (USD $)

3 Months Ended

6 Months Ended

1 Months Ended

3 Months Ended

6 Months Ended

1 Months Ended

6 Months Ended

1 Months Ended

6 Months Ended

3 Months Ended

6 Months Ended

Jun. 30, 2013

Sep. 30, 2007

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

Sep. 30, 2009

Jun. 30, 2014

Sep. 30, 2012

Aug. 31, 2012

Oct. 31, 2011

Jul. 31, 2009

Sep. 30, 2008

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Actavis plc

Convertible preferred stock

Development and sales milestones

Development milestones

Commercialization milestone

Minimum

Maximum

item

Sales milestones

Collaboration and License Agreements

Up-front fee received

$70,000,000

Cumulative license fees and development milestone payments received

205,000,000

Equity investment in the entity's capital stock

25,000,000

Milestone payment to be received by company upon milestone achievement

100,000,000

Asset value for contingent equity investment by collaborative party recorded at inception of agreement

9,000,000

Incremental deferred revenue related to contingent equity investment

9,000,000

Collaborative arrangements revenue

1,778,000

10,225,000

Collaboration expense

-11,162,000

-35,892,000

-11,162,000

-35,892,000

Selling, general and administrative costs incurred by the Company

-7,806,000

-8,271,000

-15,805,000

-16,810,000

The Company's share of net loss

-6,028,000

-19,433,000

-5,580,000

-52,702,000

Adjusted share of net profit (loss)

2,300,000

Issuance of Convertible preferred stock (in shares)

2,083,333

Number of milestones achieved under collaboration agreement

Milestone payment received

85,000,000

20,000,000

10,000,000

Number of milestone payments recognized

Net cost sharing offset or incremental expense related to research and development expense

$1,500,000

$2,100,000

($3,000,000)

($100,000)

Percentage of net profit from commercialization

50.00%

Percentage of net loss from commercialization

50.00%

Collaboration_and_License_Agre3

Collaboration and License Agreements (Details 2) (USD $)

3 Months Ended

6 Months Ended

1 Months Ended

3 Months Ended

6 Months Ended

1 Months Ended

3 Months Ended

Jun. 30, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

31-May-09

Apr. 30, 2009

Jun. 30, 2014

Mar. 31, 2014

Jun. 30, 2013

Jun. 30, 2014

Jun. 30, 2013

31-May-13

Nov. 30, 2009

Apr. 30, 2009

Nov. 30, 2010

Apr. 30, 2009

Jun. 30, 2014

Mar. 31, 2014

Jun. 30, 2013

Almirall, S.A.

item

Convertible preferred stock

Development and sales milestones

Development milestones

Amended Development Milestones

Convertible preferred stock

item

Collaboration and License Agreements

Up-front fee received, net

$38,000,000

Up-front fee received

40,000,000

Equity investment in the entity's capital stock

15,000,000

Contingent equity investment to be received form forward purchase contract

15,000,000

Asset value for contingent equity investment by collaborative party recorded at inception of agreement

6,000,000

Incremental deferred revenue related to contingent equity investment

6,000,000

Issuance of Convertible preferred stock (in shares)

681,819

Maximum contingent equity and milestone payments to be received

40,000,000

Number of milestones achieved under collaboration agreement

Milestone payment received

20,000,000

1,000,000

Revenue recognized from sale of API

1,700,000

5,900,000

5,100,000

8,100,000

Revenue recognized in royalty payments

200,000

300,000

Revenue recognized in commercial launch milestones

900,000

1,900,000

Collaborative arrangements revenue

6,840,000

9,663,000

21,445,000

12,918,000

2,800,000

7,800,000

7,300,000

10,000,000

Milestone payment received, net of foreign withholding taxes

19,000,000

1,000,000

1,900,000

Milestones, net of foreign tax withholdings

1,000,000

Total milestone payment due upon the first commercial launch in all major European Union countries

17,000,000

Number of major European Union countries

Number of major European Union countries in which commercial launch occurred

Milestone payment due upon the first commercial launch in each of the five major European Union countries

$4,000,000

Collaboration_and_License_Agre4

Collaboration and License Agreements (Details 3) (USD $)	1 Months Ended		3 Months Ended		6 Months Ended
Collaboration and License Agreements (Details 3) (USD $)	Mar. 31, 2013	Nov. 30, 2009	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Collaboration and License Agreements	'	'	'	'	'	'
Collaborative arrangements revenue	'	'	$6,840,000	$9,663,000	$21,445,000	$12,918,000
Astellas Pharma Inc.	'	'	'	'	'	'
Collaboration and License Agreements	'	'	'	'	'	'
Up-front fee received	'	30,000,000	'	'	'	'
Estimated development period prior to assessment	'115 months	'	'	'	'	'
Estimated development period	'85 months	'	'	'	'	'
Revenue recognized as a result of revised estimate of development period	'	'	500,000	'	1,000,000	'
Up-front license fee deferred	'	'	14,000,000	'	14,000,000	'
Collaborative arrangements revenue	'	'	1,900,000	1,500,000	3,200,000	2,300,000
Revenue recognized from sale of API	'	'	700,000	200,000	700,000	200,000
Astellas Pharma Inc. \| Additional development milestones \| Maximum	'	'	'	'	'	'
Collaboration and License Agreements	'	'	'	'	'	'
Total milestone payments to be received	'	'	'	'	45,000,000	'
Astellas Pharma Inc. \| Phase 3 milestones	'	'	'	'	'	'
Collaboration and License Agreements	'	'	'	'	'	'
Milestone payment to be received by company upon milestone achievement	'	'	'	'	15,000,000	'
Astellas Pharma Inc. \| Japanese NDA equivalent filing milestone	'	'	'	'	'	'
Collaboration and License Agreements	'	'	'	'	'	'
Milestone payment to be received by company upon milestone achievement	'	'	'	'	15,000,000	'
Astellas Pharma Inc. \| Approval of Japanese NDA equivalent filing milestone	'	'	'	'	'	'
Collaboration and License Agreements	'	'	'	'	'	'
Milestone payment to be received by company upon milestone achievement	'	'	'	'	$15,000,000	'

Collaboration_and_License_Agre5

Collaboration and License Agreements (Details 4) (AstraZeneca, USD $)	1 Months Ended	3 Months Ended		6 Months Ended
In Millions, unless otherwise specified	Oct. 31, 2012	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Collaboration and License Agreements	'	'	'	'	'
Prior notice period to terminate the agreement	'180 days	'	'	'	'
Up-front fee received	$25	'	'	'	'
Total amount of non-contingent arrangement consideration	26.9	'	'	'	'
Amount of arrangement consideration for clinical trial material supply services and research, development and regulatory activities	2.8	'	'	'	'
Additional amount of non-contingent arrangement consideration approved by JDC	'	'	'	0.9	'
Discount rate utilized in analysis (as a percent)	11.50%	'	'	'	'
Arrangement Consideration allocated to the License Deliverable	24.7	'	'	'	'
Arrangement Consideration allocated to the R&D Services	1.1	'	'	'	'
Arrangement Consideration allocated to the JDC services	0.1	'	'	'	'
Arrangement Consideration allocated to the clinical trial material supply services	0.1	'	'	'	'
Arrangement Consideration allocated to Co-Promotion Deliverable	1.8	'	'	'	'
Remaining Arrangement Consideration received and allocated to the remaining deliverables, which was deferred	0.3	'	'	'	'
Percentage of costs of clinical trial material supply services and research, development and regulatory activities allocated	55.00%	'	'	'	'
Net cost sharing offset or incremental expense related to research and development expense	'	-0.9	-0.5	-1.3	-0.6
Collaborative arrangements revenue earned	'	0.3	0.4	0.7	0.6
Sales milestones	'	'	'	'	'
Collaboration and License Agreements	'	'	'	'	'
Milestone payment to be received by company upon milestone achievement	$125	'	'	'	'
Commercialization milestone	'	'	'	'	'
Collaboration and License Agreements	'	'	'	'	'
Percentage of net profit from commercialization	55.00%	'	'	'	'
Percentage of net loss from commercialization	55.00%	'	'	'	'

Collaboration_and_License_Agre6

Collaboration and License Agreements (Details 5) (USD $)	3 Months Ended		6 Months Ended
Collaboration and License Agreements (Details 5) (USD $)	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Collaboration and License Agreements	'	'	'	'
Research and development expense	$22,142,000	$24,093,000	$49,286,000	$56,846,000
Other Collaboration and License Agreements	'	'	'	'
Collaboration and License Agreements	'	'	'	'
Aggregate up-front fee paid	'	'	5,800,000	'
Contingent milestone payable per product, maximum	'	'	114,500,000	'
Research and development expense	'	800,000	1,000,000	1,800,000
Other Collaboration and License Agreements \| Sales milestones	'	'	'	'
Collaboration and License Agreements	'	'	'	'
Contingent milestone payable per product	'	'	35,000,000	'
Other Collaboration and License Agreements \| Development milestones	'	'	'	'
Collaboration and License Agreements	'	'	'	'
Contingent milestone payable	'	'	99,500,000	'
Milestone payment	'	'	2,500,000	'
Contingent milestone payable per product	'	'	21,500,000	'
Other Collaboration and License Agreements \| Regulatory milestones	'	'	'	'
Collaboration and License Agreements	'	'	'	'
Contingent milestone payable	'	'	265,500,000	'
Milestone payment	'	'	0	'
Contingent milestone payable per product	'	'	$58,000,000	'

Fair_Value_of_Financial_Instru2

Fair Value of Financial Instruments (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013
In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2013
Description	'	'	'
Available-for-sale securities	$206,621	$122,112	'
Transfers between Level 1 and Level 2 of the fair value hierarchy	0	'	0
Recurring basis \| Fair Value	'	'	'
Description	'	'	'
Total assets fair value	291,857	189,364	'
Recurring basis \| Fair Value \| Money market funds	'	'	'
Description	'	'	'
Cash and cash equivalents	85,236	59,747	'
Recurring basis \| Fair Value \| U.S. Treasury securities	'	'	'
Description	'	'	'
Available-for-sale securities	24,011	7,253	'
Recurring basis \| Fair Value \| U.S. government-sponsored securities	'	'	'
Description	'	'	'
Cash and cash equivalents	'	7,505	'
Available-for-sale securities	182,610	114,859	'
Recurring basis \| Quoted Prices in Active Markets for Identical Assets (Level 1)	'	'	'
Description	'	'	'
Total assets fair value	109,247	67,000	'
Recurring basis \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| Money market funds	'	'	'
Description	'	'	'
Cash and cash equivalents	85,236	59,747	'
Recurring basis \| Quoted Prices in Active Markets for Identical Assets (Level 1) \| U.S. Treasury securities	'	'	'
Description	'	'	'
Available-for-sale securities	24,011	7,253	'
Recurring basis \| Significant Other Observable Inputs (Level 2)	'	'	'
Description	'	'	'
Total assets fair value	182,610	122,364	'
Recurring basis \| Significant Other Observable Inputs (Level 2) \| U.S. government-sponsored securities	'	'	'
Description	'	'	'
Cash and cash equivalents	'	7,505	'
Available-for-sale securities	$182,610	$114,859	'

AvailableforSale_Securities_De

Available-for-Sale Securities (Details) (USD $)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
	item	Jun. 30, 2013	item	Jun. 30, 2013	item
Available-for-Sale Securities	'	'	'	'	'
Amortized Cost	$206,618,000	'	$206,618,000	'	$122,110,000
Gross Unrealized Gains	'	'	18,000	'	6,000
Gross Unrealized Losses	'	'	-15,000	'	-4,000
Fair Value	206,621,000	'	206,621,000	'	122,112,000
Contractual maturity period, maximum	'	'	'1 year	'	'
Number of investments classified as available-for-sale securities in an unrealized loss position	26	'	26	'	12
Number of investments classified as available-for-sale securities in an unrealized loss position for more than twelve months	0	'	0	'	0
Aggregate fair value of securities none of which had been in an unrealized loss position for more than twelve months	85,500,000	'	85,500,000	'	38,700,000
Proceeds from sales of available-for-sale securities	0	0	0	0	'
U.S. government-sponsored securities	'	'	'	'	'
Available-for-Sale Securities	'	'	'	'	'
Amortized Cost	182,615,000	'	182,615,000	'	114,857,000
Gross Unrealized Gains	'	'	10,000	'	6,000
Gross Unrealized Losses	'	'	-15,000	'	-4,000
Fair Value	182,610,000	'	182,610,000	'	114,859,000
U.S. Treasury securities	'	'	'	'	'
Available-for-Sale Securities	'	'	'	'	'
Amortized Cost	24,003,000	'	24,003,000	'	7,253,000
Gross Unrealized Gains	'	'	8,000	'	'
Fair Value	$24,011,000	'	$24,011,000	'	$7,253,000

Inventory_Details

Inventory (Details) (USD $)	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013
Inventory	'	'	'	'	'
Raw materials	$12,989	'	$12,989	'	$22,145
Write-down of inventory to net realizable value	$8,900	$0	$8,894	$0	'

Property_and_Equipment_Details

Property and Equipment (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Property and equipment	'	'
Property and equipment, gross	$80,828	$79,065
Less accumulated depreciation and amortization	-47,268	-41,689
Property and equipment, net	33,560	37,376
Manufacturing equipment	'	'
Property and equipment	'	'
Property and equipment, gross	3,623	2,812
Laboratory equipment	'	'
Property and equipment	'	'
Property and equipment, gross	14,530	14,039
Computer and office equipment	'	'
Property and equipment	'	'
Property and equipment, gross	5,272	5,202
Furniture and fixtures	'	'
Property and equipment	'	'
Property and equipment, gross	2,365	2,365
Software	'	'
Property and equipment	'	'
Property and equipment, gross	12,373	12,352
Construction in process	'	'
Property and equipment	'	'
Property and equipment, gross	1,362	996
Leased vehicles	'	'
Property and equipment	'	'
Property and equipment, gross	4,472	4,472
Leasehold improvements	'	'
Property and equipment	'	'
Property and equipment, gross	$36,831	$36,827

Accrued_Expenses_Details

Accrued Expenses (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Accrued Expenses	'	'
Salaries and benefits	$12,488	$13,784
Workforce reduction charges	373	'
Professional fees	706	531
Accrued interest	856	856
Other	4,625	3,267
Total accrued expense	$19,048	$18,438

Notes_Payable_Details

Notes Payable (Details) (USD $)	6 Months Ended	0 Months Ended	6 Months Ended
	Jun. 30, 2013	Jan. 04, 2013	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2014
		Notes Payable	Notes Payable	Notes Payable	Notes Payable	Notes Payable	Notes Payable
				From and including January 1, 2014 to and including December 31, 2014	From and including January 1, 2015 to and including December 31, 2015	From and including January 1, 2016 to and including December 31, 2016	From and including January 1, 2017 and thereafter
Notes Payable	'	'	'	'	'	'	'
Payment start date	'	'	'	1-Jan-14	1-Jan-15	1-Jan-16	1-Jan-17
Payment end date	'	'	'	31-Dec-14	31-Dec-15	31-Dec-16	'
Aggregate principal amount of notes issued in private placement	'	$175,000,000	'	'	'	'	'
Annual interest rate of notes (as a percent)	'	11.00%	'	'	'	'	'
Estimated principal payments	'	'	6,600,000	'	'	'	'
Percentage of net sales of LINZESS considered to determine quarterly payments on the notes	'	'	7.50%	'	'	'	'
Redemption Percentage	'	'	'	112.00%	105.50%	102.75%	100.00%
Upfront cash proceeds	175,000,000	175,000,000	'	'	'	'	'
Discount on issuance of debt	'	400,000	'	'	'	'	'
Debt issuance costs capitalized	'	7,300,000	'	'	'	'	'
Estimated fair value	'	'	$183,800,000	'	'	'	'

Employee_Stock_Benefit_Plans_D

Employee Stock Benefit Plans (Details) (USD $)	3 Months Ended		6 Months Ended
In Thousands, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Share-based compensation is reflected in the condensed consolidated statements of operations	'	'	'	'
Share-based compensation	$6,012	$4,817	$12,086	$10,092
Research and development	'	'	'	'
Share-based compensation is reflected in the condensed consolidated statements of operations	'	'	'	'
Share-based compensation	2,271	2,701	4,961	4,925
Selling, general and administrative	'	'	'	'
Share-based compensation is reflected in the condensed consolidated statements of operations	'	'	'	'
Share-based compensation	$3,741	$2,116	$7,125	$5,167

Employee_Stock_Benefit_Plans_D1

Employee Stock Benefit Plans (Details 2) (Stock options, USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Stock options	'	'	'	'
Number of Shares	'	'	'	'
Outstanding at the beginning of the period (in shares)	'	'	20,927,874	'
Granted (in shares)	'	'	2,856,300	'
Exercised (in shares)	'	'	-1,738,266	'
Cancelled (in shares)	'	'	-1,228,161	'
Outstanding at the end of the period (in shares)	20,817,747	'	20,817,747	'
Weighted-Average Exercise Price	'	'	'	'
Outstanding at the beginning of the period (in dollars per share)	'	'	$8.87	'
Granted (in dollars per share)	'	'	$14	'
Exercised (in dollars per share)	'	'	$5.44	'
Cancelled (in dollars per share)	'	'	$12.07	'
Outstanding at the end of the period (in dollars per share)	$9.67	'	$9.67	'
Weighted-average assumptions used to estimate the fair value of the stock options using the Black-Scholes option-pricing model	'	'	'	'
Expected volatility (as a percent)	48.10%	46.90%	46.70%	46.30%
Expected term	'6 years 1 month 6 days	'6 years 6 months	'6 years 1 month 6 days	'6 years 6 months
Risk-free interest rate (as a percent)	2.00%	1.40%	1.80%	1.40%

Related_Party_Transactions_Det

Related Party Transactions (Details) (USD $)	6 Months Ended	3 Months Ended	6 Months Ended						1 Months Ended
In Millions, except Share data, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2014	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014	Dec. 31, 2013	Nov. 30, 2009	Sep. 30, 2009
	Class B common stock	Law firm investor	Law firm investor	Law firm investor	Actavis plc	Actavis plc	Almirall, S.A.	Almirall, S.A.	Almirall, S.A.	Forest Laboratories, Inc.
		Maximum	Maximum	Maximum				Maximum	Convertible preferred stock	Convertible preferred stock
Related Party Transactions	'	'	'	'	'	'	'	'	'	'
Legal fees paid	'	$0.10	$0.10	'	'	'	'	'	'	'
Accounts payable	'	0.1	0.1	0.1	'	'	'	'	'	'
Issuance of Convertible preferred stock (in shares)	'	'	'	'	'	'	'	'	681,819	2,083,333
Preferred stock conversion basis	1	'	'	'	'	'	'	'	'	'
Accounts receivable	'	'	'	'	$3.30	$2.70	$1.20	$0.10	'	'

Public_Offerings_Details

Public Offerings (Details) (USD $)	6 Months Ended		1 Months Ended	3 Months Ended
In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014	Jun. 30, 2013	Feb. 28, 2014	Jun. 30, 2013
	Jun. 30, 2014	Jun. 30, 2013	Class A common stock	Class A common stock
Public offerings	'	'	'	'
Shares sold	'	'	15,784,325	11,204,948
Issuance price per share (in dollars per share)	'	'	$12.75	$13
Proceeds from issuance of common stock	$190,428	$137,766	$190,400	$137,800

Workforce_Reduction_Details

Workforce Reduction (Details) (USD $)	0 Months Ended	6 Months Ended	3 Months Ended	6 Months Ended
In Thousands, unless otherwise specified	Jan. 08, 2014	Jun. 30, 2014	Mar. 31, 2014	Jun. 30, 2014
	Jan. 08, 2014	Jun. 30, 2014	Employee severance, benefits and related costs	Employee severance, benefits and related costs
Restructuring	'	'	'	'
Reduction in workforce (as a percent)	10.00%	'	'	'
Restructuring-related costs	'	$4,334	$4,300	$4,334
Charges related to the reduction in workforce	'	'	'	'
Charges	'	4,334	4,300	4,334
Adjustments	'	-43	'	-43
Amounts Paid	'	-3,367	'	-3,367
Non-cash Expense	'	-551	'	-551
Amounts Accrued at the end of the period	'	$373	'	$373

Subsequent_Events_Details

Subsequent Events (Details) (301 Binney Street, Cambridge, Massachusetts, Subsequent event, USD $)	Jul. 31, 2014
In Millions, unless otherwise specified	Jul. 31, 2014
301 Binney Street, Cambridge, Massachusetts \| Subsequent event	'
Subsequent Events	'
Future sublease payments	$18
Accumulated amortization balances related to assets under capital lease	$1.90