Ironwood Pharmaceuticals (IRWD) 10-Q 7 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 03, 2016
Entity Registrant Name	IRONWOOD PHARMACEUTICALS INC
Entity Central Index Key	1,446,847
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
Class A common stock
Entity Common Stock, Shares Outstanding		131,161,068
Class B common stock
Entity Common Stock, Shares Outstanding		15,062,481

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 182,937	$ 261,287
Available-for-sale securities	136,936	178,107
Accounts receivable	1,174	2,884
Related party accounts receivable, net	52,541	51,634
Prepaid expenses and other current assets	9,216	6,293
Total current assets	382,804	500,205
Restricted cash	8,247	8,747
Property and equipment, net	18,842	21,075
Convertible note hedges	137,302	86,466
Intangible assets, net	182,722
Goodwill	649
Other assets	1,412	2,628
Total assets	731,978	619,121
Current liabilities:
Accounts payable and related party accounts payable, net	19,752	8,589
Accrued research and development costs	8,042	4,245
Accrued expenses and other current liabilities	29,055	23,301
Current portion of capital lease obligations	3,525	2,631
Current portion of deferred rent	7,821	5,544
Current portion of deferred revenue	4,127	7,191
Current portion of PhaRMA notes payable	8,405	24,964
Current portion of contingent consideration	14,578
Total current liabilities	95,305	76,465
Capital lease obligations, net of current portion	141	306
Deferred rent, net of current portion	2,490	6,395
Deferred revenue, net of current portion		1,798
Contingent consideration, net of current portion	81,682
Note hedge warrants	120,121	75,328
Convertible senior notes	230,717	220,620
PhaRMA notes payable, net of current portion	131,944	132,964
Other liabilities	10,120	10,120
Stockholders' equity:
Additional paid-in capital	1,237,569	1,205,183
Accumulated deficit	(1,178,318)	(1,110,115)
Accumulated other comprehensive income (loss)	61	(86)
Total stockholders' equity	59,458	95,125
Total liabilities and stockholders' equity	731,978	619,121
Class A common stock
Stockholders' equity:
Common stock	131	127
Class B common stock
Stockholders' equity:
Common stock	$ 15	$ 16

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
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)	$ 0.001	$ 0.001
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares issued	130,855,190	127,371,478
Common stock, shares outstanding	130,855,190	127,371,478
Class B common stock
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	14,802,481	15,870,356
Common stock, shares outstanding	14,802,481	15,870,356

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Consolidated Statements of Operations
Collaborative arrangements revenue	$ 66,106	$ 39,572	$ 186,498	$ 96,248
Cost and expenses:
Cost of revenues, excluding amortization of acquired intangible asset				12
Write-down of inventory to net realizable value and loss on non-cancellable purchase commitments		9,488		17,638
Research and development	37,526	25,830	101,050	81,119
Selling, general and administrative	44,987	30,439	118,073	93,740
Amortization of acquired intangible asset	3,213		4,278
Loss on fair value remeasurement of contingent consideration	8,667		8,667
Total cost and expenses	94,393	65,757	232,068	192,509
Loss from operations	(28,287)	(26,185)	(45,570)	(96,261)
Other (expense) income:
Interest expense	(9,765)	(10,021)	(29,499)	(21,115)
Interest and investment income	307	156	823	292
Gain (loss) on derivatives	4,541	(11,340)	6,043	(11,548)
Other expense, net	(4,917)	(21,205)	(22,633)	(32,371)
Net loss	$ (33,204)	$ (47,390)	$ (68,203)	$ (128,632)
Net loss per share - basic and diluted	$ (0.23)	$ (0.33)	$ (0.47)	$ (0.91)
Weighted average number of common shares used in net loss per share - basic and diluted:	145,180	142,473	144,474	141,954

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Condensed Consolidated Statements of Comprehensive Loss
Net loss	$ (33,204)	$ (47,390)	$ (68,203)	$ (128,632)
Other comprehensive income:
Unrealized gains on available-for-sale securities	22	26	147	67
Total other comprehensive income	22	26	147	67
Comprehensive loss	$ (33,182)	$ (47,364)	$ (68,056)	$ (128,565)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Cash flows from operating activities:
Net loss	$ (68,203)	$ (128,632)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	7,518	8,831
Amortization of acquired intangible asset	4,278
Share-based compensation expense	21,836	18,969
Change in fair value of note hedge warrants	44,793	(7,873)
Change in fair value of convertible note hedges	(50,836)	19,421
Write-down of inventory to net realizable value and loss on non-cancellable purchase commitments		17,638
Loss on facility subleases	3,480
Accretion of discount/premium on investment securities	561	722
Non-cash interest expense	10,981	4,599
Non-cash change in fair value of contingent consideration	8,667
Changes in assets and liabilities:
Accounts receivable and related party accounts receivable	803	(11,132)
Restricted cash	500	(600)
Prepaid expenses and other current assets	(2,923)	2,722
Other assets	1,670	(181)
Accounts payable, related party accounts payable and accrued expenses	16,301	(2,946)
Accrued research and development costs	3,797	(939)
Deferred revenue	(4,862)	(5,393)
Deferred rent	(5,108)	(2,774)
Net cash used in operating activities	(6,747)	(87,568)
Cash flows from investing activities:
Purchases of available-for-sale securities	(163,229)	(252,865)
Sales and maturities of available-for-sale securities	203,986	212,018
Purchases of property and equipment	(3,008)	(3,256)
Payment for acquisition of lesinurad license	(100,000)
Proceeds from sale of property and equipment	1	37
Net cash used in investing activities	(62,250)	(44,066)
Cash flows from financing activities:
Proceeds from issuance of convertible senior notes		335,699
Costs associated with issuance of 2026 notes	(200)
Proceeds from issuance of note hedge warrants		70,849
Purchase of convertible note hedges		(91,915)
Costs associated with issuance of convertible senior notes		(11,682)
Proceeds from exercise of stock options and employee stock purchase plan	10,553	11,874
Payments on capital leases	(1,243)	(964)
Principal payments on PhaRMA notes	(18,463)	(8,447)
Net cash (used in) provided by financing activities	(9,353)	305,414
Net (decrease) increase in cash and cash equivalents	(78,350)	173,780
Cash and cash equivalents, beginning of period	261,287	74,297
Cash and cash equivalents, end of period	182,937	$ 248,077
Non-cash investing activities:
Contingent consideration	$ 96,260

Nature of Business

Nature of Business	9 Months Ended
	Sep. 30, 2016
Nature of Business
Nature of Business	1. Nature of Business Overview Ironwood Pharmaceuticals, Inc. (the “Company”) is a commercial biotechnology company leveraging its proven development and commercial capabilities as it seeks to bring multiple medicines to patients. The Company is advancing innovative product opportunities in areas of large unmet need, including irritable bowel syndrome with constipation (“IBS-C”) and chronic idiopathic constipation (“CIC”), hyperuricemia associated with uncontrolled gout, refractory gastroesophageal reflux disease (“rGERD”), and vascular and fibrotic diseases. The Company’s first commercial product, linaclotide, is available to adult men and women suffering from IBS-C or CIC in the United States (“U.S.”) under the trademarked name LINZESS ® , and is available to adult men and women suffering from IBS-C in certain European countries under the trademarked name CONSTELLA ® . The Company and its U.S. partner Allergan plc (together with its affiliates, “Allergan”) began commercializing LINZESS in the U.S. in December 2012. Under the Company’s collaboration with Allergan for North America, total net sales of LINZESS in the U.S., as recorded by Allergan, are reduced by commercial costs incurred by each party, and the resulting amount is shared equally between the Company and Allergan. The Company’s former European partner, Almirall, S.A. (“Almirall”), began commercializing CONSTELLA in Europe for the symptomatic treatment of moderate to severe IBS-C in adults in the second quarter of 2013. In October 2015, Almirall transferred its exclusive license to develop and commercialize linaclotide in Europe to Allergan, and the Company and Allergan entered into an amendment to the European license agreement (Note 4). Currently, CONSTELLA is commercially available in certain European countries, including the United Kingdom, Italy and Spain. Within the Company’s IBS-C/CIC franchise, the Company and Allergan are exploring development opportunities to enhance the clinical profile of LINZESS by seeking to expand its utility within IBS-C and CIC, as well as studying linaclotide in additional indications and populations to assess its potential to treat various gastrointestinal (“GI”) conditions. The Company and Allergan are also developing linaclotide colonic release, a targeted oral delivery formulation of linaclotide designed to potentially improve abdominal pain relief in adult IBS-C patients. In addition to IBS-C, the Company is exploring linaclotide colonic release for use in additional GI disorders where lower abdominal pain is a predominant symptom, including IBS-mixed, ulcerative colitis and diverticulitis, among others. Linaclotide is also being developed and commercialized in other parts of the world by the Company’s partners. In December 2013 and February 2014, linaclotide was approved in Canada and Mexico, respectively, as a treatment for adult men and women suffering from IBS-C or CIC. Allergan has exclusive rights to commercialize linaclotide in Canada as CONSTELLA and in Mexico as LINZESS. In May 2014, CONSTELLA became commercially available in Canada and in June 2014, LINZESS became commercially available in Mexico. Astellas Pharma Inc. (“Astellas”), the Company’s partner in Japan, is developing linaclotide for the treatment of patients with IBS-C and chronic constipation in its territory. In February 2016, Astellas filed a new drug application (“NDA”) seeking approval of linaclotide for the treatment of adults with IBS-C in Japan with the Japanese Ministry of Health, Labor and Welfare. In October 2012, the Company entered into a collaboration agreement with AstraZeneca AB (together with its affiliates, “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 December 2015, the Company and AstraZeneca filed for approval with the China Food and Drug Administration to market linaclotide in China. 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. In June 2016, the Company closed a transaction with AstraZeneca pursuant to which the Company received an exclusive license to develop, manufacture, and commercialize products containing lesinurad as an active ingredient, including ZURAMPIC ® , in the U.S. Lesinurad 200mg tablets were approved as ZURAMPIC by the U.S. Food and Drug Administration (“FDA”) in December 2015 for use in combination with a xanthine oxidase inhibitor (“XOI”) for the treatment of hyperuricemia associated with uncontrolled gout. The Company began commercializing ZURAMPIC in the U.S. in October 2016. The Company is also developing a fixed-dose combination product (“FDC Product”) of lesinurad and allopurinol, an XOI, which is included under the license agreement. The Company is advancing its rGERD franchise through the development of IW-3718, a gastric retentive formulation of a bile acid sequestrant. Within the Company’s vascular and fibrotic franchise, it is leveraging its pharmacological expertise in guanylate cyclase pathways gained through the discovery and development of linaclotide to advance development programs targeting soluble guanylate cyclase (“sGC”). sGC is a validated mechanism with the potential for broad therapeutic utility and multiple opportunities for product development in vascular and fibrotic diseases, as well as other therapeutic areas. The Company is progressing two sGC development candidates, IW-1973 and IW-1701, which have distinct pharmacologic profiles that the Company believes may be differentiating and enable opportunities in multiple indications. In April 2016, the Company announced the discontinuation of development of IW-9179 for gastroparesis, as top-line data from its exploratory Phase IIa clinical study indicated that IW-9179 did not meaningfully reduce the severity of symptoms in patients with diabetic gastroparesis. In July 2016, as part of its continued assessment and prioritization of resources, the Company discontinued assessing the potential of IW-9179 for the treatment of functional dyspepsia and is no longer advancing this program. The Company and Exact Sciences Corp. (“Exact Sciences”) entered into an agreement (the “Cologuard Co-Promotion Agreement”) to co-promote Cologuard ® , the first and only FDA-approved noninvasive stool DNA screening test for colorectal cancer in March 2015. The parties co-promoted Cologuard through July 2016 and the Cologuard Co-Promotion Agreement was terminated in August 2016. Under the terms of the Cologuard Co-Promotion Agreement, the Company will continue to receive royalty payments through July 2017. In August 2015, the Company and Allergan entered into an agreement for the co-promotion of VIBERZI™ (eluxadoline) in the U.S., Allergan’s treatment for adults suffering from IBS with diarrhea (“IBS-D”). These agreements are more fully described in Note 3, Business Combinations, and Note 4, Collaboration, License and Co-Promotion Agreements, to these condensed consolidated financial statements. In June 2015, the Company issued approximately $335.7 million in aggregate principal amount of 2.25% Convertible Senior Notes due 2022 (the “2022 Notes”). The Company received net proceeds of approximately $324.0 million from the sale of the 2022 Notes, after deducting fees and expenses of approximately $11.7 million. In September 2016, the Company closed a direct private placement, pursuant to which the Company will issue $150.0 million in aggregate principal amount of 8.375% notes due 2026 (the “2026 Notes”). The issuance of the 2026 Notes is expected to occur on January 5, 2017 (the “Funding Date”). The proceeds from the issuance of the 2026 Notes will be used to redeem the outstanding principal balance of the 11% PhaRMA Notes due 2024 (the “PhaRMA Notes”), which is expected to be completed on the Funding Date. 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. Additionally, 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 for the year ended December 31, 2015, which was filed with the Securities and Exchange Commission on February 19, 2016 (the “2015 Annual Report on Form 10-K”). 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 September 30, 2016, and the results of its operations for the three and nine months ended September 30, 2016 and 2015 and its cash flows for the nine months ended September 30, 2016 and 2015. The results of operations for the three and nine months ended September 30, 2016 and 2015 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. generally accepted accounting principles requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. On an ongoing basis, the Company’s management evaluates its estimates, judgments and methodologies. Significant estimates and assumptions in the condensed consolidated financial statements include those related to revenue recognition including returns, rebates, and other pricing adjustments; available-for-sale securities; inventory valuation, and related reserves; impairment of long-lived assets; initial valuation procedures for the issuance of convertible notes; fair value of derivatives; balance sheet classification of notes payable and convertible notes; income taxes, including the valuation allowance for deferred tax assets; research and development expenses; goodwill; contingent consideration; acquired intangible assets; 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 materially 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 The Company’s significant accounting policies are described in Note 2, Summary of Significant Accounting Policies , in the 2015 Annual Report on Form 10-K. During the nine months ended September 30, 2016, the Company adopted the following additional significant accounting policies: Business Combinations The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination by assessing whether or not the Company has acquired inputs and processes that have the ability to create outputs. If determined to be a business combination, the Company accounts for business acquisitions under the acquisition method of accounting as indicated in the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations”, (“ASC 805”) which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, and non-controlling interest in the acquiree based on the fair value estimates as of the date of acquisition. In accordance with ASC 805, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. The consideration for the Company’s business acquisitions includes future payments that are contingent upon the occurrence of a particular event or events. The obligations for such contingent consideration payments are recorded at fair value on the acquisition date. The contingent consideration obligations are then evaluated each reporting period. Changes in the fair value of contingent consideration obligations, other than changes due to payments, are recognized as a (gain) loss on fair value remeasurement of contingent consideration in the condensed consolidated statements of operations. Finite and Indefinite-Lived Intangible Assets The Company records the fair value of purchased intangible assets with definite useful lives as of the transaction date of a business combination. Purchased intangible assets with definite useful lives are amortized to their estimated residual values over their estimated useful lives. The Company evaluates the finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the reduction in the fair value below their respective carrying amounts. If the Company determines that an impairment has occurred, a write-down of the carrying value and an impairment charge to operating expenses in the period the determination is made is recorded. In addition, the Company would also reassess the remaining estimated useful life of the finite-lived intangible asset. In accordance with ASC Topic 350, “Intangibles – Goodwill and Other” (“ASC 350”), during the period that an asset is considered indefinite-lived, such as in-process research and development (“IPR&D”), it will not be amortized. Acquired IPR&D represents the fair value assigned to research and development assets that have not reached technological feasibility. The value assigned to acquired IPR&D is determined by estimating the costs to develop the acquired technology into commercially viable products, estimating the resulting revenue from the projects, and discounting the net cash flows to present value. The revenue and costs projections used to value acquired IPR&D are, as applicable, reduced based on the probability of success of developing a new drug. Additionally, the projections consider the relevant market sizes and growth factors, expected trends in technology, and the nature and expected timing of new product introductions by the Company and its competitors. The rates utilized to discount the net cash flows to their present value are commensurate with the stage of development of the projects and uncertainties in the economic estimates used in the projections. Upon the acquisition of IPR&D, the Company completes an assessment of whether its acquisition constitutes the purchase of a single asset or a group of assets. Multiple factors are considered in this assessment, including the nature of the technology acquired, the presence or absence of separate cash flows, the development process and stage of completion, quantitative significance and the rationale for entering into the transaction. Indefinite-lived assets are maintained on the Company’s condensed consolidated balance sheet until either the project underlying it is completed or the asset becomes impaired. Indefinite-lived assets are tested for impairment on an annual basis, or whenever events or changes in circumstances indicate the reduction in the fair value of the IPR&D asset below its respective carrying amount. If the Company determines that an impairment has occurred, a write-down of the carrying value and an impairment charge to operating expenses in the period the determination is made is recorded. When development of an IPR&D asset is complete the associated asset would be deemed finite-lived and would then be amortized based on its respective estimated useful life at that point. Goodwill Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized, but is reviewed for impairment. The Company tests its goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, by comparing its carrying value to its implied fair value in accordance with ASC 350. Impairment may result from, among other things, deterioration in the performance of the acquired asset, adverse market conditions, adverse changes in applicable laws or regulations and a variety of other circumstances. If the Company determines that an impairment has occurred, a write-down of the carrying value and an impairment charge to operating expenses in the period the determination is made is recorded. In evaluating the carrying value of goodwill, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the acquired assets. Changes in strategy or market conditions could significantly impact those judgments in the future and require an adjustment to the recorded balances. Product Revenue, Net Net product revenue will be derived from sales of ZURAMPIC in the U.S. Pursuant to the terms and conditions of the transitional services agreement between the Company and AstraZeneca (the “Lesinurad TSA”), the Company sells ZURAMPIC principally to a limited number of major wholesalers and selected regional wholesalers through certain of AstraZeneca’s existing arrangements (the “Distributors”). The Distributors subsequently resell ZURAMPIC to patients and healthcare providers. The Company will recognize net product revenue from sales of ZURAMPIC in accordance with ASC 605, “Revenue Recognition” (“ASC 605”), when persuasive evidence of an arrangement exists, delivery has occurred and title of the product and associated risk of loss has passed to the customer, the price is fixed or determinable, collection from the customer has been reasonably assured. This includes the ability to reasonably estimate returns and other allowances. For the three and nine months ended September 30, 2016, the Company concluded that certain of the above revenue recognition criteria were not met, including the ability to reasonably estimate returns related to ZURAMPIC. One of the key elements to meet certain of the revenue recognition criteria is sufficient volume of activity, which provides visibility into the distribution channel and the ultimate utilization of the product. Under the Lesinurad TSA, the first units of ZURAMPIC were shipped to Distributors in September 2016. Due to the early stage of the product launch, the Company determined that it was not able to reliably make certain estimates necessary to recognize product revenue and therefore did not recognize revenue on the stocking shipments made to Distributors during the three and nine months ended September 30, 2016. For those quantities shipped to the Distributors during the three and nine months ended September 30, 2016, the cost of the related units is included within other current assets in the condensed consolidated balance sheets, and will be recorded to cost of revenues upon recognition of the related revenue. The Company will continue to evaluate these criteria in future periods to determine if and when the revenue recognition criteria under ASC 605 has been met. The Company expects to recognize ZURAMPIC product revenue once all the applicable revenue recognition criteria have been met. New Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that are adopted by the Company as of the specified effective date. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”), which supersedes the revenue recognition requirements in ASC 605, 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, 2017 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. Early adoption is permitted beginning after December 15, 2016, including interim reporting periods within those years. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers: Identifying Performance Obligations and Licensing (“ASU 2016-10”), which clarifies certain aspects of identifying performance obligations and licensing implementation guidance. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers: Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers. These standards have the same effective date and transition date as ASU 2014-09. The Company is evaluating the method of adoption and the potential impact that ASU 2014-09, ASU 2016-10 and ASU 2016-12 may have on its financial position and results of operations. In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements - Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (“ASU 2014-15”). ASU 2014-15 is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures, if required. ASU 2014-15 is effective for annual reporting periods ending after December 15, 2016, and applies to annual and interim periods thereafter. The Company does not believe that the adoption of ASU 2014-15 will have a significant impact on the Company’s financial statement disclosures. In April 2015, the FASB issued ASU No. 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement, which amends ASC 350 . Under this standard, if a cloud computing arrangement includes a software license, the software license element of the arrangement should be accounted for consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the arrangement should be accounted for as a service contract. The amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and may be applied on either a prospective or retrospective basis. The Company adopted this standard during the three months ended March 31, 2016. The adoption of this standard did not have a material impact on the Company’s financial position or results of operations. In July 2015, the FASB issued ASU No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”). ASU 2015-11 requires entities that measure inventory using the first-in, first-out method, to do so at the lower of cost and net realizable value. The standard defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. The standard is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016. Early adoption is permitted. The Company is evaluating the potential impact that adoption of ASU 2015-11 may have on the Company’s financial position or results of operations. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASU 2016-02”), which supersedes the lease accounting requirements in ASC Topic 840, “Leases”, and most industry-specific guidance. ASU 2016-02 requires the identification of arrangements that should be accounted for as leases by lessees. In general, for lease arrangements exceeding a 12-month term, these arrangements must now be recognized as assets and liabilities on the balance sheet of the lessee. Under ASU 2016-02, a right-of-use asset and lease obligation will be recorded for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization and interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of ASU 2016-02 must be calculated using the applicable incremental borrowing rate at the date of adoption. In addition, ASU 2016-02 requires the use of modified retrospective method, which will require adjustment to all comparative periods presented in the consolidated financial statements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is evaluating the potential impact that ASU 2016-02 may have on the Company’s financial position or results of operations. In March 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation , which amends ASC Topic 718, “Compensation - Stock Compensation” (“ASU 2016-09”). ASU 2016-09 identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The amendments are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is evaluating the potential impact that ASU 2016-09 may have on the Company’s financial position, results of operations or statement of cash flows.

Net Loss Per Share

Net Loss Per Share	9 Months Ended
	Sep. 30, 2016
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. In June 2015, in connection with the issuance of approximately $335.7 million in aggregate principal amount of the 2022 Notes, the Company entered into convertible note hedge transactions (the “Convertible Note Hedges”). The Convertible Note Hedges are generally expected to reduce the potential dilution to the Company’s Class A common stockholders upon a conversion of the 2022 Notes, as conversion would result in fewer shares available for purchase in the market. The Convertible Note Hedges are also designed to offset any cash payments the Company is required to make in excess of the principal amount of converted 2022 Notes in the event that the market price per share of the Company’s Class A common stock, as measured under the terms of the Convertible Note Hedges, exceeds the conversion price of the 2022 Notes (Note 10). The Convertible Note Hedges are not considered for purposes of calculating the number of diluted weighted average shares outstanding, as their effect would be antidilutive. Concurrently with entering into the Convertible Note Hedges, the Company also entered into certain warrant transactions in which it sold note hedge warrants (the “Note Hedge Warrants”) to the Convertible Note Hedge counterparties to acquire 20,249,665 shares of the Company’s Class A common stock, subject to customary anti-dilution adjustments. The Note Hedge Warrants could have a dilutive effect on the Company’s Class A common stock to the extent that the market price per share of the Class A common stock exceeds the applicable strike price of such warrants (Note 10). The Note Hedge Warrants are not considered for purposes of calculating the number of diluted weighted averages shares outstanding, as their effect would be antidilutive. The following potentially dilutive securities have been excluded from the computation of diluted weighted average shares outstanding as their effect would be anti-dilutive (in thousands): Nine Months Ended September 30, 2016 2015 Options to purchase common stock Shares subject to repurchase Restricted stock units Note hedge warrants 2022 Notes An insignificant number of shares issuable under the Company’s employee stock purchase plan were excluded from the calculation of diluted weighted average shares outstanding because their effects would be anti-dilutive.

Business Combinations

Business Combinations	9 Months Ended
	Sep. 30, 2016
Business Combinations
Business Combinations	3. Business Combinations In April 2016, the Company and AstraZeneca entered into a license agreement (the “Lesinurad License Agreement”) pursuant to which the Company received, upon closing the transaction on June 2, 2016 (the “Acquisition Date”), an exclusive license to develop, manufacture and commercialize products containing lesinurad as an active ingredient, including ZURAMPIC (the “Products”), in the U.S. (the “Lesinurad Transaction”). Subject to the terms of the Lesinurad License Agreement, AstraZeneca is obligated to conduct certain development activities on the Company’s behalf for (i) ZURAMPIC, including the post-marketing requirement activities currently required by the FDA, for which the Company is obligated to reimburse AstraZeneca up to $100.0 million over up to ten years, and (ii) the FDC Product, for which the Company will also reimburse AstraZeneca. In connection with the Lesinurad License Agreement, the Company and AstraZeneca entered into a commercial supply agreement (the “Lesinurad CSA”), pursuant to which the Company relies exclusively on AstraZeneca for the commercial manufacture and supply of ZURAMPIC and, if approved, the FDC Product, and the Lesinurad TSA, pursuant to which AstraZeneca is providing certain support services, including development, regulatory and commercial services, to the Company for ZURAMPIC until such activities under the Lesinurad TSA are transferred to the Company. The Company may obtain production techniques from AstraZeneca via a manufacturing technology transfer available under the Lesinurad CSA upon provision of six-months’ notice. The Company is responsible for commercialization of the Products in the U.S., and any additional development of the Products for commercialization in the U.S. In addition, under the terms of the Lesinurad License Agreement, the Company will have the right of first negotiation and right of last refusal with AstraZeneca for the right to commercialize, develop and manufacture for commercialization in the U.S., products for the prevention or treatment of gout that include verinurad as at least one of its active ingredients. The Company concluded that the Lesinurad Transaction included inputs and processes that have the ability to create outputs and accordingly accounted for the transaction as a business combination in accordance with ASC 805. As such, the assets acquired and liabilities assumed were recorded at fair value, with the remaining purchase price recorded as goodwill. The purchase price consisted of the upfront payment to AstraZeneca of $100.0 million, which was made in June 2016, and the fair value of the contingent consideration of $87.6 million. The Company also paid approximately $1.6 million in transaction-related costs, including external consulting fees, which were expensed as incurred as selling, general and administrative expenses. Pursuant to the terms of the Lesinurad License Agreement, the Company will also pay a tiered royalty to AstraZeneca in the single-digits as a percentage of net sales of the Products in the U.S., as well as commercial and other milestones of up to $165.0 million over the duration of the agreement. The contingent consideration was valued as approximately $87.6 million, using a discounted cash flow estimate as of the Acquisition Date. The total fair value of consideration for the purchase was approximately $187.6 million. The Company has preliminarily valued the acquired assets and liabilities based on their estimated fair value as of the Acquisition Date. These estimates are subject to change as additional information becomes available. The preliminary fair values included in the balance sheet as of September 30, 2016 are based on the best estimates of the Company. The Company had not made any adjustments to the preliminary Acquisition Date valuation of the acquired assets and liabilities as of September 30, 2016. The completion of the valuation of the acquired assets and liabilities may result in adjustments to the carrying value of assets and liabilities, revision to the useful life of the finite intangible asset, the determination of any residual amount that will be allocated to goodwill and the related tax effects. The related amortization of acquired finite-lived intangible asset is also subject to revision based on the final valuation. Any adjustments to the preliminary fair values will be made as such information becomes available, but no later than June 1, 2017. The following table presents the preliminary allocation of the purchase consideration for the Lesinurad Transaction as of the Acquisition Date, including the contingent consideration (in thousands): As of the Acquisition Date: Cash portion of consideration $ Contingent consideration Total purchase consideration $ As of the Acquisition Date: Developed technology — ZURAMPIC $ IPR&D - FDC Product Goodwill Net assets acquired $ The fair value of the FDC Product IPR&D was determined using a probability adjusted discounted cash flow approach, including assumptions of projected revenues, operating expenses and a discount rate of 16.0% applied to the projected cash flows. The remaining cost of development for this asset was approximately $13.9 million as of the Acquisition Date, with an expected completion date of no earlier than 2017. Through September 30, 2016, the Company continued to incur costs related to the FDC Product. The fair value of the ZURAMPIC intangible asset was determined using a probability adjusted discounted cash flow approach, including assumptions of projected revenues, operating expenses and a discount rate of 13.5% applied to the projected cash flows. The Company considers the ZURAMPIC intangible asset acquired to be developed technology, as it was approved by the FDA for commercialization as of the Acquisition Date. The Company believes the assumptions are representative of those a market participant would use in estimating fair value. The ZURAMPIC intangible asset is finite lived. The amount allocated to the ZURAMPIC intangible asset is being amortized on a straight-line basis to amortization of acquired intangible assets within the Company’s condensed consolidated statements of operations over its estimated useful life of 13 years, the period of estimated future cash flows from the Acquisition Date. The Company believes that the straight-line method of amortization represents the pattern in which the economic benefits of the intangible asset are consumed. As of September 30, 2016, the Company recognized accumulated amortization of approximately $4.3 million with respect to the ZURAMPIC intangible asset. The estimated future amortization of ZURAMPIC is expected to be as follows (in thousands): As of September 30, 2016 2016 (1) $ 2017 2018 2019 2020 and thereafter Total $ (1) For the three months ending December 31, 2016. The amount allocated to the FDC Product IPR&D is considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. As of September 30, 2016, there was no impairment related to the FDC Product IPR&D or the ZURAMPIC intangible asset. The Company allocated the excess of the purchase price over the identifiable intangible assets to goodwill. Such goodwill is not deductible for tax purposes and represents the value placed on entering new markets, expanding market share and operating synergies. As of September 30, 2016, there was no impairment of goodwill. All goodwill has been assigned to the Company’s single reporting unit, which is the single operating segment human therapeutics. These fair value measurements were based on significant inputs not observable in the market and thus represent Level 3 fair value measurements (Note 5). As of September 30, 2016, the estimated fair value of the Company’s contingent consideration liability increased by approximately $8.7 million to approximately $96.3 million, compared to the Acquisition Date estimated fair value primarily due to the passage of time and changes in the yield curve equivalent to the Company’s credit risk, which was the estimated cost of debt financing for similar market participants used in the valuation.

Collaboration, License and Co-

Collaboration, License and Co- Promotion Agreements	9 Months Ended
	Sep. 30, 2016
Collaboration, License and Co-Promotion Agreements
Collaboration, License and Co-Promotion Agreements	4. Collaboration, License and Co-Promotion Agreements For the three and nine months ended September 30, 2016, the Company had linaclotide collaboration agreements with Allergan for North America and AstraZeneca for China, Hong Kong and Macau, as well as linaclotide license agreements with Allergan for the European territory and Astellas for Japan. The Company had a co-promotion agreement with Exact Sciences to co-promote Cologuard in the U.S., which was terminated in August 2016, and a co-promotion agreement with Allergan to co-promote VIBERZI in the U.S. The following table provides amounts included in the Company’s condensed consolidated statements of operations as collaborative arrangements revenue attributable to transactions from these arrangements (in thousands): Collaborative Arrangements Revenue Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Linaclotide Agreements: Allergan (North America) $ $ $ $ Allergan (Europe) — — AstraZeneca (China, Hong Kong and Macau) Almirall (Europe) (1) — Astellas (Japan) Co-Promotion Agreements: Exact Sciences (Cologuard) Allergan (VIBERZI) — — Total collaborative arrangements revenue $ $ $ $ (1) In October 2015, Almirall transferred its exclusive license to develop and commercialize linaclotide in Europe to Allergan. Linaclotide Agreements Collaboration Agreement for North America with Allergan In September 2007, the Company entered into a collaboration agreement with Allergan to develop and commercialize linaclotide for the treatment of IBS‑C, CIC and other GI conditions in North America. Under the terms of this collaboration agreement, the Company shares equally with Allergan all development costs as well as net profits or losses from the development and sale of linaclotide in the U.S. In addition, the Company receives royalties in the mid‑teens percent based on net sales in Canada and Mexico. Allergan is solely responsible for the further development, regulatory approval and commercialization of linaclotide in Canada and Mexico and funding any costs. The collaboration agreement for North America also includes contingent milestone payments, as well as a contingent equity investment, based on the achievement of specific development and commercial milestones. As of September 30, 2016, approximately $205.0 million in license fees and all six development milestone payments had been received by the Company, as well as a $25.0 million equity investment in the Company’s capital stock (Note 13). The Company can also achieve up to $100.0 million in a sales-related milestone if certain conditions are met, which will be recognized as collaborative arrangements revenue as earned. As a result of the research and development cost-sharing provisions of the collaboration for North America, the Company offset approximately $1.1 million and approximately $6.4 million against research and development costs during the three and nine months ended September 30, 2016, respectively, and approximately $2.9 million and approximately $14.8 million during the three and nine months ending September 30, 2015, respectively, to reflect the obligations of each party under the collaboration to bear half of the development costs incurred. In addition, in March 2015, the Company and Allergan agreed to share certain costs relating to the manufacturing of linaclotide active pharmaceutical ingredient (“API”) and certain other manufacturing activities for the North American territory. This arrangement resulted in net amounts received from Allergan of approximately $4.3 million for costs incurred in prior periods, which were recorded by the Company as a reduction in research and development expenses during the three months ended March 31, 2015. The Company and Allergan began commercializing LINZESS in the U.S. in December 2012. 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 set forth in the collaboration agreement for North America. Certain of these adjustments to the share of the net profits may be reduced or eliminated in connection with the co-promotion activities under the Company’s agreement with Allergan to co-promote VIBERZI in the U.S., as described below in Co-Promotion Agreement with Allergan for VIBERZI . Net profits or net losses consist of net sales of LINZESS to third-party customers and sublicense income in the U.S. less the cost of goods sold as well as selling, general and administrative expenses. LINZESS net sales are calculated and recorded by Allergan 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 Allergan as collaboration expense or collaborative arrangements revenue, as applicable. The Company recognized collaborative arrangements revenue from the Allergan collaboration agreement for North America during the three and nine months ended September 30, 2016 and 2015 as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Collaborative arrangements revenue related to sales of LINZESS in the U.S. (1) (2) $ $ $ $ Royalty revenue Sale of API — — — Total collaborative arrangements revenue $ $ $ $ The collaborative arrangements revenue recognized in the three and nine months ended September 30, 2016 and 2015 primarily represents the Company’s share of the net profits and net losses on the sale of LINZESS in the U.S. In addition, during the nine months ended September 30, 2016, the Company recorded collaboration revenue of approximately $4.5 million related to the sale of API to Allergan under the terms of the collaboration for North America. The Company recorded no collaboration revenue related to the sale of API to Allergan during the three months ended September 30, 2016, or during each of the three and nine months ended September 30, 2015. The following table presents the amounts recorded by the Company for commercial efforts related to LINZESS in the U.S. in the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Collaborative arrangements revenue related to sales of LINZESS in the U.S. (1)(2) $ $ $ $ Selling, general and administrative costs incurred by the Company (1) The Company’s share of net profit $ $ $ $ (1) Includes only collaborative arrangement revenue or selling, general and administrative costs attributable to the cost-sharing arrangement with Allergan. (2) Certain of the unfavorable adjustments to the Company’s share of the LINZESS net profits may be reduced or eliminated in connection with the co-promotion activities under the Company’s agreement with Allergan to co-promote VIBERZI in the U.S., as described below in Co-Promotion Agreement with Allergan for VIBERZI . In May 2014, CONSTELLA became commercially available in Canada and in June 2014, LINZESS became commercially available 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 partner or the ability to estimate the royalty revenue in the period earned. The Company recognized approximately $0.3 million and approximately $0.8 million of royalty revenues from Canada and Mexico during the three and nine months ended September 30, 2016, respectively. The Company recognized approximately $0.3 million and approximately $0.6 million of royalty revenues from Canada and Mexico during the three and nine months ended September 30, 2015, respectively. License Agreement for the European Territory with Allergan (formerly with Almirall through October 2015) In April 2009, the Company entered into a license agreement with Almirall (the “European License Agreement”) 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 European License Agreement, Almirall was responsible for the expenses associated with the development and commercialization of linaclotide in the European territory and the Company was required to participate on a joint development committee over linaclotide’s development period and a joint commercialization committee while the product was being commercialized. Pursuant to the terms of the European License Agreement, the Company received approximately $38.0 million, net of foreign tax withholdings, as a non-refundable up-front payment from Almirall. In November 2009, the Company achieved a development milestone triggering an equity investment and received $15.0 million from Almirall for the purchase of 681,819 shares of convertible preferred stock (Note 13). In addition, the European 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. During the years ended December 31, 2013 and 2014, the Company achieved four commercial milestones under the European License Agreement for the first commercial launch in four out of five major European Union (“E.U.”) countries set forth in the agreement, aggregating to approximately $4.0 million. In connection with the achievement of these milestones, the Company received approximately $3.9 million, net of foreign tax withholdings. In October 2015, Almirall transferred its exclusive license to develop and commercialize linaclotide in Europe to Allergan. Additionally, in October 2015, the Company and Allergan separately entered into an amendment to the European License Agreement relating to the development and commercialization of linaclotide in Europe. Pursuant to the terms of the amendment, (i) the remaining sales‑based milestones payable to the Company under the European License Agreement were modified to increase the total milestone payments such that, when aggregated with the remaining commercial launch milestones, they could total up to $42.5 million, (ii) the royalties payable to the Company during the term of the European License Agreement were modified such that the royalties based on sales volume in Europe begin in the mid‑single digit percent and escalate to the upper‑teens percent by calendar year 2019, and (iii) Allergan assumed responsibility for the manufacturing of linaclotide API for Europe from the Company, as well as the associated costs. Furthermore, with the Company no longer responsible for the manufacturing of linaclotide API for Europe, the royalties under the European License Agreement are no longer reduced by the transfer price paid for the API included in the product actually sold by Allergan in Europe in any given period. The Company concluded that the 2015 amendment to the European License Agreement was not a modification to the linaclotide collaboration agreement with Allergan for North America. The commercial launch and sales‑based milestones under the European License Agreement are recognized as revenue as earned. The Company recognized an insignificant amount and approximately $0.3 million of royalty revenue during the three and nine months ended September 30, 2016, respectively. The Company recognized an insignificant amount and approximately $0.4 million in royalty revenue during the three and nine months ended September 30, 2015, respectively. The Company records royalties on sales of CONSTELLA one quarter in arrears as it does not have access to the royalty reports from Allergan or the ability to estimate the royalty revenue in the period earned. License Agreement for Japan with Astellas 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. Astellas is responsible for all activities relating to development, regulatory approval and commercialization in Japan, as well as funding the associated 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 and September 2016, the Company revised its estimate of the development period from 115 months to 85 months and from 85 months to 82 months, respectively, based on the Company’s assessment of regulatory approval timelines for Japan. During the three and nine months ended September 30, 2016, the Company recognized approximately $1.6 million and approximately $4.1 million, respectively, of revenue related to the up-front licensing fee. The revenue recognized during the three and nine months ended September 30, 2016 includes approximately $0.5 million and approximately $1.5 million, respectively, of revenue attributable to a revision to the estimated development period in March 2013, and approximately $0.3 million in each period of revenue attributable to a revision to the estimated development period in September 2016. During the three and nine months ended September 30, 2015, the Company recognized approximately $1.3 million and approximately $3.8 million, respectively, of revenue related to the up‑front licensing fee, including approximately $0.5 million and approximately $1.5 million of revenue, respectively, attributable to the March 2013 revision to the estimated development period. At September 30, 2016, approximately $2.2 million of the up-front license fee remained deferred. The agreement also includes three development milestone payments that could total up to $45.0 million, none of which the Company considers substantive. The first milestone payment, consisting of $15.0 million upon enrollment of the first study subject in a Phase III study for linaclotide in Japan, was achieved in November 2014, and approximately $14.1 million was recognized as revenue through September 30, 2016, including approximately $0.7 million and approximately $1.7 million during the three and nine months ended September 30, 2016, respectively, and approximately $0.5 million and approximately $1.6 million during the three and nine months ended September 30, 2015, respectively. The remaining approximately $0.9 million of this milestone payment will be recognized over the remaining development period. In February 2016, Astellas filed an NDA with the Japanese Ministry of Health, Labor and Welfare seeking approval of linaclotide for the treatment of adults with IBS-C in Japan. In connection with this filing, a second milestone payment, consisting of $15.0 million, was achieved and approximately $0.7 million and approximately $14.1 million was recognized as revenue during the three and nine months ended September 30, 2016, respectively. The remaining approximately $0.9 million of this milestone payment will be recognized over the remaining development period. The third development milestone payment consists of $15.0 million upon approval of NDA by the Japanese Ministry of Health, Labor and Welfare to market linaclotide in Japan. 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. During the three and nine months ended September 30, 2016, the Company recognized approximately $4.4 million and approximately $21.5 million, respectively, in collaborative arrangements revenue from the Astellas license agreement, including approximately $1.5 million in each period from the sale of API to Astellas. During the three and nine months ended September 30, 2015, the Company recognized approximately $1.8 million and approximately $5.9 million, respectively, in collaborative arrangements revenue from the Astellas license agreement, including an insignificant amount and approximately $0.5 million, respectively, from the sale of API to Astellas. Collaboration Agreement for China, Hong Kong and Macau with AstraZeneca 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 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 “Phase III 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 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, as modified from time to time (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 at the inception of the AstraZeneca Collaboration Agreement. 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 September 30, 2016, no contingent deliverables were provided by the Company under the AstraZeneca Agreements. In August 2014, the Company and AstraZeneca, through the JDC, modified the IDP and development budget to include approximately $14.0 million in additional activities over the remaining development period, to be shared by the Company and AstraZeneca under the terms of the AstraZeneca Collaboration Agreement. These additional activities serve to support the continued development of linaclotide in the License Territory, including the Phase III Trial. Pursuant to the terms of the modified IDP and development budget, certain of the Company’s deliverables were modified, specifically the R&D Services and the obligation to supply clinical trial material. The modification did not, however, have a material impact on the Company’s condensed consolidated financial statements. The total amount of the non-contingent consideration allocable to the AstraZeneca Agreements was approximately $34.0 million (“Arrangement Consideration”), consisting of the $25.0 million non-refundable up-front payment and approximately $9.0 million representing 55% of the estimated costs for clinical trial material supply services and research, development and regulatory activities allocated to the Company in the IDP or as approved by the JDC in subsequent periods. The Company allocated the Arrangement Consideration to the non-contingent deliverables based on management’s best estimated 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. Of the total Arrangement Consideration, approximately $29.7 million was allocated to the License Deliverable, approximately $1.8 million to the R&D Services, approximately $0.1 million to the JDC services, approximately $0.3 million to the clinical trial material supply services, and approximately $2.1 million to the Co-Promotion Deliverable in the relative selling price model, at the time of the material modification. 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 in 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 joint development plan and subsequent amendments to the joint development plan, 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 completed its obligations related to the License Deliverable upon execution of the AstraZeneca Agreements; however, the revenue recognized in the statement of operations was limited to the non-contingent portion of the License Deliverable consideration in accordance with ASC 605-25. During the three and nine months ended September 30, 2016, the Company recognized an insignificant amount and approximately $0.3 million, respectively, and during the three and nine months ending September 30, 2015, the Company recognized approximately $0.4 million and approximately $2.0 million, respectively, in each case, in collaborative arrangements revenue related to the License Deliverable in connection with the modification to the IDP and development budget in August 2014, as these portions of the Arrangement Consideration were no longer contingent. The Company also performs R&D Services and JDC services, and supplies 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 an insignificant amount of incremental research and development costs during each of the three and nine months ended September 30, 2016, and recognized an insignificant amount and approximately $0.7 million in incremental research and development costs during the three and nine months ended September 30, 2015, respectively. The amount allocated to the Co-Promotion Deliverable was 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 each of the three and nine months ended September 30, 2016 and 2015, the Company recognized an insignificant amount as collaborative arrangements revenue related to this deliverable, as this portion of the Arrangement Consideration was no longer contingent. 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. Co-Promotion Agreements Co-Promotion Agreement with Exact Sciences Corp. for Cologuard In March 2015, the Company and Exact Sciences entered into an agreement to co-promote Exact Sciences’ Cologuard, the first and only FDA-approved noninvasive stool DNA screening test for colorectal cancer (the “Exact Sciences Co-Promotion Agreement”). The Exact Sciences Co-Promotion Agreement was terminated by the parties in August 2016. Under the terms of the non-exclusive Exact Sciences Co-Promotion Agreement, the Company’s sales team promoted and educated health care practitioners regarding Cologuard through July 2016, with LINZESS remaining the Company’s first-position product. Exact Sciences maintained responsibility for all other aspects of the commercialization of Cologuard outside of the co-promotion. Under the terms of the Exact Sciences Co-Promotion Agreement, the Company is compensated primarily via royalties earned on the net sales of Cologuard generated from the healthcare practitioners on whom the Company called with such royalties being payable through July 2017. There are no refund provisions in the Exact Sciences Co-Promotion Agreement. Through September 30, 2016, the Company received approximately $3.4 million in connection with the Exact Sciences Co-Promotion Agreement. Activities under the Exact Sciences Co-Promotion Agreement were evaluated in accordance with ASC 605-25, to determine if they represented a multiple element revenue arrangement. The Company identified the following deliverables in the Exact Sciences Co-Promotion Agreement through July 31, 2016: (i) second position sales detailing, (ii) promotional support services, and (iii) medical education services. Each of the deliverables was 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. The Company determined that the BESP for each of the three deliverables approximated the value allocated to the deliverables under the agreement. The revenue related to each deliverable is recognized as collaborative arrangements revenue in the Company’s condensed consolidated statement of operations, in accordance with ASC 605-25, during the period earned. During the three and nine months ended September 30, 2016, the Company recognized approximately $0.8 million and approximately $2.6 million, respectively, as collaborative arrangements revenue related to this arrangement, and approximately $2.0 million and approximately $3.0 million was recognized during the three and nine months ended September 30, 2015. Co-Promotion Agreement with Allergan for VIBERZI In August 2015, the Company and Allergan entered into an agreement for the co‑promotion of VIBERZI in the U.S., Allergan’s treatment for adults suffering from IBS‑D (the “VIBERZI Co‑Promotion Agreement”). Under the terms of the VIBERZI Co‑Promotion Agreement, the Company’s clinical sales specialists are detailing VIBERZI to the approximately 25,000 health care practitioners to whom they detail LINZESS. Allergan is responsible for all costs and activities relating to the commercialization of VIBERZI outside of the co‑promotion. Under the terms of the VIBERZI Co‑Promotion Agreement, the Company’s promotional efforts are compensated based on the volume of calls delivered by the Company’s sales force, with the terms of the agreement reducing or eliminating certain of the unfavorable adjustments to the Company’s share of net profits stipulated by the linaclotide collaboration agreement with Allergan for North America, provided that the Company provides a minimum number of VIBERZI calls on physicians. The Company has the potential to achieve milestone payments of up to $10.0 million based on the net sales of VIBERZI in each of 2017 and 2018, and is also compensated via reimbursements for medical education initiatives. The Company’s promotional efforts under the non‑exclusive co‑promotion began when VIBERZI became commercially available in December 2015, and will continue until December 31, 2017, unless earlier terminated by either party pursuant to the provisions of the VIBERZI Co‑Promotion Agreement. Either party may also terminate the VIBERZI Co‑Promotion Agreement in the event of an uncured material breach by the other party, withdrawal of necessary approvals by the FDA, for convenience, or bankruptcy or insolvency of the other party. Allergan may terminate the VIBERZI Co‑Promotion Agreement if th

Fair Value of Financial Instrum

Fair Value of Financial Instruments	9 Months Ended
	Sep. 30, 2016
Fair Value of Financial Instruments
Fair Value of Financial Instruments	5. 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 September 30, 2016 and December 31, 2015 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 mainly 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 are 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 Company validates the prices provided by its third party pricing services by obtaining market values from other pricing sources and analyzing pricing data in certain instances. The following tables present the assets and liabilities the Company has measured at fair value on a recurring basis (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs September 30, 2016 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ $ $ — $ — U.S. government-sponsored securities — — Available-for-sale securities: U.S. Treasury securities — — U.S. government-sponsored securities — — Convertible Note Hedges — — Total assets measured at fair value $ $ $ $ Liabilities: Note Hedge Warrants $ $ — $ — $ Contingent Consideration — — Total liabilities measured at fair value $ $ — $ — $ Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs December 31, 2015 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ $ $ — $ — U.S. government-sponsored securities — — Available-for-sale securities: U.S. Treasury securities — — U.S. government-sponsored securities — — Convertible Note Hedges — — Total assets measured at fair value $ $ $ $ Liabilities: Note Hedge Warrants $ $ — $ — $ Total liabilities measured at fair value $ $ — $ — $ There were no transfers between fair value measurement levels during the three or nine months ended September 30, 2016 or 2015. Cash equivalents, accounts receivable, 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 September 30, 2016 and December 31, 2015 are carried at amounts that approximate fair value due to their short-term maturities. The non-current portion of the capital lease obligations at September 30, 2016 and December 31, 2015 approximates fair value as it bears interest at a rate approximating a market interest rate. Convertible Note Hedges and Note Hedge Warrants The Company’s Convertible Note Hedges and the Note Hedge Warrants are recorded as derivative assets and liabilities, and are classified as Level 3 under the fair value hierarchy. These derivatives are not actively traded and are valued using the Black-Scholes option-pricing model which requires the use of subjective assumptions. Significant inputs used to determine the fair value as of September 30, 2016 included the price per share of the Company’s Class A common stock, time to maturity of the derivative instruments, the strike prices of the derivative instruments, the risk-free interest rate, and the volatility of the Company’s Class A common stock. The Company has not paid and does not anticipate paying cash dividends on its shares of common stock in the foreseeable future; therefore, the expected dividend yield is assumed to be zero. Changes to these inputs could materially affect the valuation of the Convertible Note Hedges and Note Hedge Warrants. The following inputs were used in the fair market valuation of the Convertible Note Hedges and Note Hedge Warrants as of September 30, 2016: Convertible Note Hedge Note Hedges Warrants Risk-free interest rate (1) 1.2 % % Time to maturity Stock price (2) $ $ Strike price (3) $ $ Common stock volatility (4) % % Dividend yield — % — % (1) Based on U.S. Treasury yield curve, with terms commensurate with the terms of the Convertible Note Hedges and the Note Hedge Warrants. (2) The closing price of the Company’s Class A common stock on the last trading day of the quarter ended September 30, 2016. (3) As per the respective agreements for the Convertible Note Hedges and Note Hedge Warrants. (4) Selected volatility based on historical volatility of the Company’s Class A common stock. The Convertible Note Hedges and the Note Hedge Warrants are recorded at fair value at each reporting period and changes in fair value are recorded in other expense, net within the Company’s condensed consolidated statements of operations. Gains and losses for these derivative financial instruments are presented separately in the Company’s condensed consolidated statements of cash flows. The following table reflects the change in the Company’s Level 3 convertible note derivatives from December 31, 2015 through September 30, 2016 (in thousands): Convertible Note Hedge Note Hedges Warrants Balance at December 31, 2015 $ $ Change in fair value, recorded as a component of gain (loss) on derivatives Balance at September 30, 2016 $ $ Contingent Consideration In connection with the Lesinurad Transaction, the Company recorded a liability of $87.6 million as of the Acquisition Date, representing the fair value of the contingent consideration. This valuation was based on a Monte-Carlo simulation, which includes significant estimates related to probability weighted net cash outflow projections, discounted using a yield curve equivalent to the Company’s credit risk, which was the estimated cost of debt financing for market participants. This estimate represents the probability weighted analysis of expected future milestone and royalty payments based on net sales to be made to AstraZeneca. Changes to these inputs are re-evaluated each reporting period and could materially affect the valuation of the contingent consideration. The estimated fair value of contingent consideration was approximately $96.3 million as of September 30, 2016. The following table reflects the change in the Company’s Level 3 contingent consideration payable from December 31, 2015 through September 30, 2016 (in thousands): Contingent Consideration Fair value at December 31, 2015 $ — Additions Changes in fair value Payments/transfers to other current liabilities Fair value at September 30, 2016 $ 11% PhaRMA Notes In January 2013, the Company closed a private placement of $175.0 million in aggregate principal amount of the PhaRMA Notes due on or before June 15, 2024. The estimated fair value of the PhaRMA Notes was approximately $144.8 million and approximately $166.8 million as of September 30, 2016 and December 31, 2015, respectively, and was determined using Level 3 inputs, including a quoted rate. 2.25% Convertible Senior Notes In June 2015, the Company issued approximately $335.7 million of its 2022 Notes. The Company separately accounted for the liability and equity components of the 2022 Notes by allocating the proceeds between the liability component and equity component (Note 10). The fair value of the 2022 Notes, which differs from their carrying value, is influenced by interest rates, the price of the Company’s Class A common stock and the volatility thereof, and the prices for the 2022 Notes observed in market trading, which are Level 2 inputs. The estimated fair value of the 2022 Notes was approximately $402.7 million and approximately $311.6 million as of September 30, 2016 and December 31, 2015, respectively.

Available-for-Sale Securities

Available-for-Sale Securities	9 Months Ended
	Sep. 30, 2016
Available-for-Sale Securities
Available-for-Sale Securities	6. Available-for-Sale Securities The following tables summarize the available-for-sale securities held at September 30, 2016 and December 31, 2015 (in thousands): Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value September 30, 2016 U.S. Treasury securities $ $ $ — $ U.S. government-sponsored securities Total $ $ $ $ Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value December 31, 2015 U.S. Treasury securities $ $ — $ $ U.S. government-sponsored securities Total $ $ $ $ The contractual maturities of all securities held at September 30, 2016 are one year or less. There were 4 and 32 available-for-sale securities in an unrealized loss position at September 30, 2016 and December 31, 2015, respectively, none of which had been in an unrealized loss position for more than twelve months. The aggregate fair value of these securities at September 30, 2016 and December 31, 2015 was approximately $5.2 million and approximately $167.6 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 September 30, 2016. There were no sales of available-for-sale securities during the three or nine months ended September 30, 2016 or 2015. Net unrealized holding gains or losses for the period that have been included in accumulated other comprehensive income were not material to the Company’s condensed consolidated results of operations.

Inventory

Inventory	9 Months Ended
	Sep. 30, 2016
Inventory
Inventory	7. Inventory The Company’s inventory represents linaclotide API that is available for commercial sale. At September 30, 2016 and December 31, 2015, the Company did not hold any balances of such inventory. The Company has entered into multiple commercial supply agreements for the purchase of linaclotide API, as the Company is responsible for supplying API to its collaboration partners outside of North America and Europe. Two of the Company’s API supply agreements contain minimum purchase commitments. As part of the Company’s net realizable value assessment of its inventory, the Company assesses whether it has any excess non‑cancelable purchase commitments resulting from its minimum supply agreements with its suppliers of linaclotide API. As of September 30, 2016 and December 31, 2015, the Company had an accrual for excess purchase commitments of approximately $10.1 million, which is recorded in other liabilities in the Company’s condensed consolidated balance sheet. The Company has evaluated all remaining minimum purchase commitments under its linaclotide API supply agreements through 2023 and concluded that the minimum purchase commitments under such agreements are realizable based on the current forecasts received from the Company’s partners in these territories and the Company’s internal forecasts.

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2016
Property and Equipment
Property and Equipment	8. Property and Equipment Property and equipment, net consisted of the following (in thousands): September 30, 2016 December 31, 2015 Manufacturing equipment $ $ Laboratory equipment Computer and office equipment Furniture and fixtures Software Construction in process Leased vehicles Leasehold improvements Less accumulated depreciation and amortization $ $

Accrued Expenses and Other Curr

Accrued Expenses and Other Current Liabilities	9 Months Ended
	Sep. 30, 2016
Accrued Expenses
Accrued Expenses and Other Current Liabilities	9. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, 2016 December 31, 2015 Salaries and benefits $ $ Professional fees Accrued interest Other $ $

Notes Payable

Notes Payable	9 Months Ended
	Sep. 30, 2016
Notes Payable.
Notes Payable	10. Notes Payable 8.375% Notes due 2026 On September 23, 2016, the Company closed a direct private placement, pursuant to which the Company will issue $150.0 million in aggregate principal amount of 8.375% notes due 2026. The issuance of the 2026 Notes is expected to occur on the Funding Date. The Company must meet the following funding requirements, expected to occur on the Funding Date (the satisfaction or performance of which may be waived by the purchasers): delivery of the 2026 Notes to the purchasers, redemption of the PhaRMA Notes, absence of bankruptcy, and a certification that the conditions have been met. The proceeds from the issuance of the 2026 Notes will be used to redeem the outstanding principal balance of the PhaRMA Notes, which is expected to be completed on the Funding Date. As of September 30, 2016, the Company capitalized approximately $0.5 million of debt issuance costs, which are included in other assets on the Company’s condensed consolidated balance sheet. Upon funding, the issuance costs will be netted against the outstanding 2026 Notes. The 2026 Notes, once funded, will bear an annual interest rate of 8.375%, with interest payable March 15, June 15, September 15 and December 15 of each year (each a “8.375% Payment Date”) commencing on June 15, 2017. Principal of the 2026 Notes will be payable on the 8.375% Payment Dates from and after March 15, 2019. From March 15, 2019, the Company will make quarterly payments on the 2026 Notes equal to the greater of (i) 7.5% of net sales of LINZESS in the U.S. for the preceding quarter (the “8.375% Synthetic Royalty Amount”) and (ii) accrued and unpaid interest on the PhaRMA Notes (the “8.375% Required Interest Amount”). Principal on the 2026 Notes will be repaid in an amount equal to the 8.375% Synthetic Royalty Amount minus the 8.375% Required Interest Amount, when this is a positive number, until the principal has been paid in full. Given the principal payments on the 2026 Notes are based on the 8.375% Synthetic Royalty Amount, which will vary from quarter to quarter, the 2026 Notes may be repaid prior to September 15, 2026, the final legal maturity date. The 2026 Notes, once funded, will be secured by a security interest in a segregated bank account established to receive the required quarterly payments as well as certain limited accounts receivables, payment intangibles or other rights to payment or proceeds, in each case, up to the 8.375% Synthetic Royalty Amount or estimated equivalent thereto, as applicable. Up to the amount of the required quarterly payments under the 2026 Notes, Allergan will deposit its quarterly profit (loss) sharing payments due to the Company related to net sales of linaclotide in the United States pursuant to the collaboration agreement for North America, if any, into the segregated bank account. If the funds deposited by Allergan into the segregated bank account are insufficient to make a required payment of interest or principal on a particular 8.375% Payment Date, the Company is obligated to deposit such shortfall out of the Company’s general funds into the segregated bank account. The 2026 Notes, once funded, may be redeemed at any time prior to maturity, in whole or in part, at the option of the Company. If the applicable redemption of the 2026 Notes occurs prior to March 15, 2018, the Company will pay a redemption price equal to the outstanding principal balance of the 2026 Notes being redeemed, plus (i) the difference between (A) the required interest amount that would have otherwise been payable from the date of redemption through March 15, 2018 on the outstanding principal balance of the 2026 Notes being redeemed, minus (B) the aggregate amount of interest the purchasers would earn if the outstanding principal balance of the 2026 Notes being redeemed were reinvested for the period from the date of redemption through March 15, 2018 at a rate per annum equal to the yield expressed as a rate listed in The Wall Street Journal for United States Treasury securities having a term of not greater than 12 months on the date three business days prior to the date of redemption, plus (ii) an amount equal to the redemption premium that would otherwise be payable as if such redemption had occurred at March 15, 2018. If the applicable redemption of the 2026 Notes occurs on or after March 15, 2018, the Company will pay a redemption price equal to the percentage of outstanding principal balance of the 2026 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 2026 Notes being redeemed): Redemption Payment Dates Percentage From and including March 15, 2018 to and including March 14, 2019 % From and including March 15, 2019 to and including March 14, 2020 % From and including March 15, 2020 to and including March 14, 2021 % From and including March 15, 2021 and thereafter % The 2026 Notes, once funded, will contain certain covenants related to the Company’s obligations with respect to the commercialization of linaclotide and the related collaboration agreement with Allergan for North America, 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 2026 Notes also will 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 accounting for the 2026 Notes will require 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 and uncertainty. These estimates and assumptions are likely to change, which may result in future adjustments to the portion of the 2026 Notes that will be 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 Company’s condensed consolidated financial statements. 2.25% Convertible Senior Notes due 2022 In June 2015, the Company issued approximately $335.7 million aggregate principal amount of the 2022 Notes. The Company received net proceeds of approximately $324.0 million from the sale of the 2022 Notes, after deducting fees and expenses of approximately $11.7 million. The Company used approximately $21.1 million of the net proceeds from the sale of the 2022 Notes to pay the net cost of the Convertible Note Hedges (after such cost was partially offset by the proceeds to the Company from the sale of the Note Hedge Warrants), as described below. The 2022 Notes are governed by an indenture (the “Indenture”) between the Company and U.S. Bank National Association, as the trustee. The 2022 Notes are senior unsecured obligations and bear cash interest at the annual rate of 2.25%, payable on June 15 and December 15 of each year, which began on December 15, 2015. The 2022 Notes will mature on June 15, 2022, unless earlier converted or repurchased. The Company may settle conversions of the 2022 Notes through payment or delivery, as the case may be, of cash, shares of Class A common stock of the Company or a combination of cash and shares of Class A common stock, at the Company’s option (subject to, and in accordance with, the settlement provisions of the Indenture). The initial conversion rate for the 2022 Notes is 60.3209 shares of Class A common stock (subject to adjustment as provided for in the Indenture) per $1,000 principal amount of the 2022 Notes, which is equal to an initial conversion price of approximately $16.58 per share and 20,249,665 shares. Holders of the 2022 Notes may convert their 2022 Notes at their option at any time prior to the close of business on the business day immediately preceding December 15, 2021 in multiples of $1,000 principal amount, only under the following circumstances: · during any calendar quarter commencing after the calendar quarter ending on September 30, 2015 (and only during such calendar quarter), if the last reported sale price of the Company’s Class A common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2022 Notes on each applicable trading day; · during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined in the Indenture) per $1,000 principal amount of the 2022 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s Class A common stock and the conversion rate for the 2022 Notes on each such trading day; or · upon the occurrence of specified corporate events described in the Indenture. On or after December 15, 2021, until the close of business on the second scheduled trading day immediately preceding June 15, 2022, holders may convert their 2022 Notes, in multiples of $1,000 principal amount, at the option of the holder regardless of the foregoing circumstances. If a make-whole fundamental change, as described in the Indenture, occurs and a holder elects to convert its 2022 Notes in connection with such make-whole fundamental change, such holder may be entitled to an increase in the conversion rate as described in the Indenture. The Company may not redeem the 2022 Notes prior to the maturity date and no “sinking fund” is provided for by the 2022 Notes, which means that the Company is not required to periodically redeem or retire the 2022 Notes. Upon the occurrence of certain fundamental changes involving the Company, holders of the 2022 Notes may require the Company to repurchase for cash all or part of their 2022 Notes at a repurchase price equal to 100% of the principal amount of the 2022 Notes to be repurchased, plus accrued and unpaid interest. The Indenture does not contain any financial covenants or restrict the Company’s ability to repurchase the Company’s securities, pay dividends or make restricted payments in the event of a transaction that substantially increases the Company’s level of indebtedness. The Indenture provides for customary events of default. In the case of an event of default with respect to the 2022 Notes arising from specified events of bankruptcy or insolvency, all outstanding 2022 Notes will become due and payable immediately without further action or notice. If any other event of default with respect to the 2022 Notes under the Indenture occurs or is continuing, the trustee or holders of at least 25% in aggregate principal amount of the then outstanding 2022 Notes may declare the principal amount of the 2022 Notes to be immediately due and payable. Notwithstanding the foregoing, the Indenture provides that, upon the Company’s election, and for up to 180 days, the sole remedy for an event of default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right to receive additional interest on the 2022 Notes. In accordance with accounting guidance for debt with conversion and other options, the Company separately accounted for the liability and equity components of the 2022 Notes by allocating the proceeds between the liability component and the embedded conversion option, or equity component, due to the Company’s ability to settle the 2022 Notes in cash, its Class A common stock, or a combination of cash and Class A common stock at the option of the Company. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The allocation was performed in a manner that reflected the Company’s non-convertible debt borrowing rate for similar debt. The equity component of the 2022 Notes was recognized as a debt discount and represents the difference between the gross proceeds from the issuance of the 2022 Notes and the fair value of the liability of the 2022 Notes on their respective dates of issuance. The excess of the principal amount of the liability component over its carrying amount, or debt discount, is amortized to interest expense using the effective interest method over seven years, or the life of the 2022 Notes. The equity component is not remeasured as long as it continues to meet the conditions for equity classification. The Company’s outstanding Convertible Note balances as of September 30, 2016 consisted of the following (in thousands): Principal $ Less: unamortized debt discount Less: unamortized debt issuance costs Net carrying amount $ Equity component $ In connection with the issuance of the 2022 Notes, the Company incurred approximately $11.7 million of debt issuance costs, which primarily consisted of initial purchasers’ discounts and legal and other professional fees. The Company allocated these costs to the liability and equity components based on the allocation of the proceeds. The portion of these costs allocated to the equity components totaling approximately $4.0 million were recorded as a reduction to additional paid-in capital. The portion of these costs allocated to the liability components totaling approximately $7.7 million were recorded as a reduction in the carrying value of the debt on the balance sheet and are amortized to interest expense using the effective interest method over the expected life of the 2022 Notes. The Company determined the expected life of the 2022 Notes was equal to their seven-year term. The effective interest rate on the liability components of the 2022 Notes for the period from the date of issuance through September 30, 2016 was 9.34%. The following table sets forth total interest expense recognized related to the 2022 Notes during the three and nine months ended September 30, 2016 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Contractual interest expense $ $ $ $ Amortization of debt issuance costs Amortization of debt discount Total interest expense $ $ $ $ Convertible Note Hedge and Warrant Transactions with Respect to 2022 Notes To minimize the impact of potential dilution to the Company’s Class A common stockholders upon conversion of the 2022 Notes, the Company entered into the Convertible Note Hedges covering 20,249,665 shares of the Company’s Class A common stock in connection with the issuance of the 2022 Notes. The Convertible Note Hedges have an exercise price of approximately $16.58 per share and are exercisable when and if the 2022 Notes are converted. If upon conversion of the 2022 Notes, the price of the Company’s Class A common stock is above the exercise price of the Convertible Note Hedges, the counterparties are obligated to deliver shares of the Company’s Class A common stock and/or cash with an aggregate value approximately equal to the difference between the price of the Company’s Class A common stock at the conversion date and the exercise price, multiplied by the number of shares of the Company’s Class A common stock related to the Convertible Note Hedge being exercised. Concurrently with entering into the Convertible Note Hedges, the Company also sold Note Hedge Warrants to the Convertible Note Hedge counterparties to acquire 20,249,665 shares of the Company’s Class A common stock, subject to customary anti-dilution adjustments. The strike price of the Note Hedge Warrants is initially $21.50 per share, subject to adjustment, and such warrants are exercisable over the 150 trading day period beginning on September 15, 2022. The Note Hedge Warrants could have a dilutive effect on the Class A common stock to the extent that the market price per share of the Company’s Class A common stock exceeds the applicable strike price of such warrants. The Convertible Note Hedges and the Note Hedge Warrants are separate transactions entered into by the Company and are not part of the terms of the 2022 Notes. Holders of the 2022 Notes and the Note Hedge Warrants do not have any rights with respect to the Convertible Note Hedges. The Company paid approximately $91.9 million for the Convertible Note Hedges and recorded this amount as a long-term asset on the condensed consolidated balance sheet. The Company received approximately $70.8 million for the Note Hedge Warrants and recorded this amount as a long-term liability, resulting in a net cost to the Company of approximately $21.1 million. The Convertible Note Hedges and Note Hedge Warrants are accounted for as derivative assets and liabilities, respectively, in accordance with ASC Topic 815, “Derivatives and Hedging” (“ASC 815”) (Note 5). 11% PhaRMA Notes due 2024 In January 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 PhaRMA 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 “11% Payment Date”) which began on June 15, 2013. On March 15, 2014, the Company began making quarterly payments on the PhaRMA Notes equal to the greater of (i) 7.5% of net sales of LINZESS in the U.S. for the preceding quarter (the “11% Synthetic Royalty Amount”) and (ii) accrued and unpaid interest on the PhaRMA Notes (the “11% Required Interest Amount”). Principal on the PhaRMA Notes will be repaid in an amount equal to the 11% Synthetic Royalty Amount minus the 11% Required Interest Amount, when this is a positive number, until the principal has been paid in full. Given the principal payments on the PhaRMA Notes are based on the 11% Synthetic Royalty Amount, which will vary from quarter to quarter, the PhaRMA Notes may be repaid prior to June 15, 2024, the final legal maturity date. The Company made principal payments of approximately $32.3 million on the PhaRMA Notes through September 30, 2016. The Company expects to redeem the remaining outstanding principal balance on the Funding Date in connection with the funding and issuance of the 2026 Notes. The Company has the intent and, concurrently with the funding and issuance of the 2026 Notes, the ability to redeem the PhaRMA Notes. In accordance with ASC 470, Debt, the Company classified the PhaRMA Notes, excluding principal payments due prior to the Funding Date, as a long-term obligation as of September 30, 2016, since the 8.375% Synthetic Royalty Amount on the 2026 Notes first becomes payable on March 15, 2019. The PhaRMA 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 PhaRMA Notes, Allergan will deposit its quarterly profit (loss) sharing payments due to the Company under the collaboration agreement for North America, if any, into the segregated bank account. If the funds deposited by Allergan into the segregated bank account are insufficient to make a required payment of interest or principal on a particular 11% Payment Date, the Company is obligated to deposit such shortfall out of the Company’s general funds into the segregated bank account. The PhaRMA 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 PhaRMA 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 PhaRMA Notes being redeemed): Redemption Payment Dates Percentage From and including January 1, 2016 to and including December 31, 2016 % From and including January 1, 2017 and thereafter % The PhaRMA Notes contain certain covenants related to the Company’s obligations with respect to the commercialization of LINZESS and the related collaboration agreement with Allergan for North America, 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 PhaRMA 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 in connection with the PhaRMA Notes, which are presented in the Company’s condensed consolidated Balance Sheet as a deduction from the associated debt liability. The PhaRMA Notes 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 PhaRMA Notes and as such do not require separate accounting treatment. The accounting for the PhaRMA 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 and uncertainty. These estimates and assumptions are likely to change, which may result in future adjustments to the portion of the PhaRMA Notes 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 Company’s condensed consolidated financial statements.

Commitments and Contingencies

Commitments and Contingencies	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies
Commitments and Contingencies	11. Commitments and Contingencies Lease Commitments The Company leases its facility, offsite data storage location, vehicles and various equipment under leases that expire at varying dates through 2018. Certain of these leases contain renewal options, and require the Company to pay operating costs, including property taxes, insurance, maintenance and other operating expenses. The Company rents office and laboratory space at its corporate headquarters in Cambridge, Massachusetts under a non‑cancelable operating lease, entered into in January 2007, as amended (“2007 Lease Agreement”). The 2007 Lease Agreement contains various provisions for renewal at the Company’s option and, in certain cases, free rent periods and rent escalation tied to the Consumer Price Index and fair market rent. The rent expense, inclusive of the escalating rent payments and free rent periods, is estimated and recognized on a straight‑line basis over the lease term through January 2018. In addition, during 2014, the Company entered into two arrangements, with the landlord’s consent, to sublease a portion of its corporate headquarters that it did not intend to use for its operations. Effective in February 2016, the Company’s obligations due to the landlord of its corporate headquarters increased in connection with a rent escalation tied to the Consumer Price Index and fair market rent, pursuant to the terms of the 2007 Lease Agreement, which resulted in a change in the accounting estimate of rent expense. This change in accounting estimate is recognized on a prospective, straight-line basis. Rent expenses related to the 2007 Lease Agreement, net of sublease income, recorded during the three months ended September 30, 2016 and 2015 were approximately $2.0 million and approximately $1.5 million, respectively, and during the nine months ended September 30, 2016 and 2015 were approximately $9.5 million and approximately $4.5 million, respectively. In accordance with ASC Topic 420, “Exit or Disposal Cost Obligations” , the Company recorded all obligations to the landlord associated with sublet space, net of sublease income due to the Company under the subleases in the period in which the change occurred. As a result, the rent expense associated with the 2007 Lease Agreement for the nine months ended September 30, 2016 includes approximately $3.5 million of estimated obligations to the landlord associated with the sublet space, net of sublease income due to the Company under the subleases. At September 30, 2016, future minimum lease payments under all non‑cancelable lease arrangements were as follows (in thousands): Operating Lease Payments Capital Lease to be Received Net Operating Lease Payments from Subleases Lease Payments Payments 2016 (1) $ $ $ $ 2017 $ $ $ 2018 $ $ $ Total future minimum lease payments $ $ $ $ Less: amounts representing interest Capital lease obligations at September 30, 2016 Less: current portion of capital lease obligations Capital lease obligations, net of current portion $ (1) Amounts are for the three months ending December 31, 2016. Commercial Supply Commitments The Lesinurad CSA with AstraZeneca provides for commercial supply of ZURAMPIC, and, if approved by the FDA, the FDC Product. The Lesinurad CSA includes certain purchase obligations based on the Company’s forecasted demand. As of September 30, 2016, the Company had approximately $1.6 million in such commitments related to lesinurad commercial supply.

Employee Stock Benefit Plans

Employee Stock Benefit Plans	9 Months Ended
	Sep. 30, 2016
Employee Stock Benefit Plans
Employee Stock Benefit Plans	12. Employee Stock Benefit Plans The Company has several share-based compensation plans under which stock options, restricted stock awards, restricted stock units (“RSUs”), 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 nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Research and development $ $ $ $ Selling, general and administrative $ $ $ $ A summary of stock option activity for the nine months ended September 30, 2016 is as follows: Weighted- Average Number of Shares Fair Value (in thousands) Outstanding at December 31, 2015 $ Granted Exercised Cancelled Outstanding at September 30, 2016 $ 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 nine months ended September 30, 2016 and 2015: Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Expected volatility % % % % Expected term (in years) Risk-free interest rate % % % % Expected dividend yield — % — % — % — % In 2015, the Company began granting RSUs in addition to stock options as part of the equity compensation it provides to its employees, each RSU representing the right to receive one share of the Company’s Class A common stock pursuant to the terms of the applicable award agreement and granted pursuant to the terms of the Company’s 2010 Equity Plan. The RSUs generally vest 25% per year on the approximate anniversary of the date of grant until fully vested, provided the employee remains continuously employed with the Company through each vesting date. Shares of the Company’s Class A common stock are delivered to the employee upon vesting, subject to payment of applicable withholding taxes. The fair value of all RSUs is based on the market value of the Company’s Class A common stock on the date of grant. Compensation expense, including the effect of estimated forfeitures, is recognized over the applicable service period. A summary of RSU activity for the nine months ended September 30, 2016 is as follows: Weighted- Average Number Grant Date of Shares Fair Value (in thousands) Unvested as of December 31, 2015 $ Granted $ Vested $ Forfeited $ Unvested as of September 30, 2016 $

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2016
Related Party Transactions
Related Party Transactions	13. Related Party Transactions In September 2009, Allergan became a related party when the Company sold to Allergan 2,083,333 shares of the Company’s convertible preferred stock. 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 4). 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. At September 30, 2016, Almirall was no longer a related party because it converted and sold all such shares during the three months ended September 30, 2016. Amounts due to and due from Allergan 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. As of September 30, 2016, the Company had approximately $52.5 million in related party accounts receivable, net of related party accounts payable, associated with Allergan and as of December 31, 2015, the Company had approximately $51.6 million in related party accounts receivable, net of related party accounts payable, associated with Allergan. The Company has and currently obtains health insurance services for its employees from an insurance provider whose President and Chief Executive Officer became a member of the Company’s Board of Directors in April 2016. The Company paid approximately $1.8 million and approximately $5.6 million in insurance premiums to this insurance provider during the three and nine months ended September 30, 2016, respectively, and approximately $1.8 million and approximately $5.3 million during the three and nine months ending September 30, 2015, respectively. At September 30, 2016 and December 31, 2015, the Company had no accounts payable due to this related party.

Nature of Business (Policies)

Nature of Business (Policies)	9 Months Ended
	Sep. 30, 2016
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. Additionally, 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 for the year ended December 31, 2015, which was filed with the Securities and Exchange Commission on February 19, 2016 (the “2015 Annual Report on Form 10-K”). 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 September 30, 2016, and the results of its operations for the three and nine months ended September 30, 2016 and 2015 and its cash flows for the nine months ended September 30, 2016 and 2015. The results of operations for the three and nine months ended September 30, 2016 and 2015 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. generally accepted accounting principles requires the Company’s management to make estimates and judgments that may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. On an ongoing basis, the Company’s management evaluates its estimates, judgments and methodologies. Significant estimates and assumptions in the condensed consolidated financial statements include those related to revenue recognition including returns, rebates, and other pricing adjustments; available-for-sale securities; inventory valuation, and related reserves; impairment of long-lived assets; initial valuation procedures for the issuance of convertible notes; fair value of derivatives; balance sheet classification of notes payable and convertible notes; income taxes, including the valuation allowance for deferred tax assets; research and development expenses; goodwill; contingent consideration; acquired intangible assets; 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 materially from these estimates under different assumptions or conditions. Changes in estimates are reflected in reported results in the period in which they become known.
Business Combinations	Business Combinations The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination by assessing whether or not the Company has acquired inputs and processes that have the ability to create outputs. If determined to be a business combination, the Company accounts for business acquisitions under the acquisition method of accounting as indicated in the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) Topic 805, “Business Combinations”, (“ASC 805”) which requires the acquiring entity in a business combination to recognize the fair value of all assets acquired, liabilities assumed, and any non-controlling interest in the acquiree and establishes the acquisition date as the fair value measurement point. Accordingly, the Company recognizes assets acquired and liabilities assumed in business combinations, including contingent assets and liabilities, and non-controlling interest in the acquiree based on the fair value estimates as of the date of acquisition. In accordance with ASC 805, the Company recognizes and measures goodwill as of the acquisition date, as the excess of the fair value of the consideration paid over the fair value of the identified net assets acquired. The consideration for the Company’s business acquisitions includes future payments that are contingent upon the occurrence of a particular event or events. The obligations for such contingent consideration payments are recorded at fair value on the acquisition date. The contingent consideration obligations are then evaluated each reporting period. Changes in the fair value of contingent consideration obligations, other than changes due to payments, are recognized as a (gain) loss on fair value remeasurement of contingent consideration in the condensed consolidated statements of operations.
Finite and Indefinite-Lived Intangible Assets	Finite and Indefinite-Lived Intangible Assets The Company records the fair value of purchased intangible assets with definite useful lives as of the transaction date of a business combination. Purchased intangible assets with definite useful lives are amortized to their estimated residual values over their estimated useful lives. The Company evaluates the finite-lived intangible assets for impairment whenever events or changes in circumstances indicate the reduction in the fair value below their respective carrying amounts. If the Company determines that an impairment has occurred, a write-down of the carrying value and an impairment charge to operating expenses in the period the determination is made is recorded. In addition, the Company would also reassess the remaining estimated useful life of the finite-lived intangible asset. In accordance with ASC Topic 350, “Intangibles – Goodwill and Other” (“ASC 350”), during the period that an asset is considered indefinite-lived, such as in-process research and development (“IPR&D”), it will not be amortized. Acquired IPR&D represents the fair value assigned to research and development assets that have not reached technological feasibility. The value assigned to acquired IPR&D is determined by estimating the costs to develop the acquired technology into commercially viable products, estimating the resulting revenue from the projects, and discounting the net cash flows to present value. The revenue and costs projections used to value acquired IPR&D are, as applicable, reduced based on the probability of success of developing a new drug. Additionally, the projections consider the relevant market sizes and growth factors, expected trends in technology, and the nature and expected timing of new product introductions by the Company and its competitors. The rates utilized to discount the net cash flows to their present value are commensurate with the stage of development of the projects and uncertainties in the economic estimates used in the projections. Upon the acquisition of IPR&D, the Company completes an assessment of whether its acquisition constitutes the purchase of a single asset or a group of assets. Multiple factors are considered in this assessment, including the nature of the technology acquired, the presence or absence of separate cash flows, the development process and stage of completion, quantitative significance and the rationale for entering into the transaction. Indefinite-lived assets are maintained on the Company’s condensed consolidated balance sheet until either the project underlying it is completed or the asset becomes impaired. Indefinite-lived assets are tested for impairment on an annual basis, or whenever events or changes in circumstances indicate the reduction in the fair value of the IPR&D asset below its respective carrying amount. If the Company determines that an impairment has occurred, a write-down of the carrying value and an impairment charge to operating expenses in the period the determination is made is recorded. When development of an IPR&D asset is complete the associated asset would be deemed finite-lived and would then be amortized based on its respective estimated useful life at that point.
Goodwill	Goodwill Goodwill represents the difference between the purchase price and the fair value of the identifiable tangible and intangible net assets when accounted for using the purchase method of accounting. Goodwill is not amortized, but is reviewed for impairment. The Company tests its goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, by comparing its carrying value to its implied fair value in accordance with ASC 350. Impairment may result from, among other things, deterioration in the performance of the acquired asset, adverse market conditions, adverse changes in applicable laws or regulations and a variety of other circumstances. If the Company determines that an impairment has occurred, a write-down of the carrying value and an impairment charge to operating expenses in the period the determination is made is recorded. In evaluating the carrying value of goodwill, the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the acquired assets. Changes in strategy or market conditions could significantly impact those judgments in the future and require an adjustment to the recorded balances.

Net Loss Per Share (Tables)

Net Loss Per Share (Tables)	9 Months Ended
	Sep. 30, 2016
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 their effect would be anti-dilutive (in thousands): Nine Months Ended September 30, 2016 2015 Options to purchase common stock Shares subject to repurchase Restricted stock units Note hedge warrants 2022 Notes

Business Combinations (Tables)

Business Combinations (Tables)	9 Months Ended
	Sep. 30, 2016
Business Combinations
Schedule of preliminary allocation of purchase consideration including contingent acquisition consideration payable	The following table presents the preliminary allocation of the purchase consideration for the Lesinurad Transaction as of the Acquisition Date, including the contingent consideration (in thousands): As of the Acquisition Date: Cash portion of consideration $ Contingent consideration Total purchase consideration $
Schedule of identifiable assets acquired	As of the Acquisition Date: Developed technology — ZURAMPIC $ IPR&D - FDC Product Goodwill Net assets acquired $
Schedule of estimated future amortization expense	The estimated future amortization of ZURAMPIC is expected to be as follows (in thousands): As of September 30, 2016 2016 (1) $ 2017 2018 2019 2020 and thereafter Total $ (1) For the three months ending December 31, 2016.

Collaboration, License and Co-P

Collaboration, License and Co-Promotion Agreements (Tables)	9 Months Ended
	Sep. 30, 2016
Collaboration, License and Co-Promotion Agreements
Schedule of revenue attributable to transactions from collaboration and license arrangements	The following table provides amounts included in the Company’s condensed consolidated statements of operations as collaborative arrangements revenue attributable to transactions from these arrangements (in thousands): Collaborative Arrangements Revenue Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Linaclotide Agreements: Allergan (North America) $ $ $ $ Allergan (Europe) — — AstraZeneca (China, Hong Kong and Macau) Almirall (Europe) (1) — Astellas (Japan) Co-Promotion Agreements: Exact Sciences (Cologuard) Allergan (VIBERZI) — — Total collaborative arrangements revenue $ $ $ $ (1) In October 2015, Almirall transferred its exclusive license to develop and commercialize linaclotide in Europe to Allergan.
Schedule of amounts recorded for commercial efforts related to LIZNESS	The following table presents the amounts recorded by the Company for commercial efforts related to LINZESS in the U.S. in the three and nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Collaborative arrangements revenue related to sales of LINZESS in the U.S. (1)(2) $ $ $ $ Selling, general and administrative costs incurred by the Company (1) The Company’s share of net profit $ $ $ $ (1) Includes only collaborative arrangement revenue or selling, general and administrative costs attributable to the cost-sharing arrangement with Allergan. (2) Certain of the unfavorable adjustments to the Company’s share of the LINZESS net profits may be reduced or eliminated in connection with the co-promotion activities under the Company’s agreement with Allergan to co-promote VIBERZI in the U.S., as described below in Co-Promotion Agreement with Allergan for VIBERZI .
Allergan
Collaboration, License and Co-Promotion Agreements
Schedule of revenue attributable to transactions from collaboration and license arrangements	The Company recognized collaborative arrangements revenue from the Allergan collaboration agreement for North America during the three and nine months ended September 30, 2016 and 2015 as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Collaborative arrangements revenue related to sales of LINZESS in the U.S. (1) (2) $ $ $ $ Royalty revenue Sale of API — — — Total collaborative arrangements revenue $ $ $ $

Fair Value of Financial Instr24

Fair Value of Financial Instruments (Tables)	9 Months Ended
	Sep. 30, 2016
Fair Value of Financial Instruments
Schedule of assets and liabilities measured at fair value on a recurring basis	The following tables present the assets and liabilities the Company has measured at fair value on a recurring basis (in thousands): Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs September 30, 2016 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ $ $ — $ — U.S. government-sponsored securities — — Available-for-sale securities: U.S. Treasury securities — — U.S. government-sponsored securities — — Convertible Note Hedges — — Total assets measured at fair value $ $ $ $ Liabilities: Note Hedge Warrants $ $ — $ — $ Contingent Consideration — — Total liabilities measured at fair value $ $ — $ — $ Fair Value Measurements at Reporting Date Using Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs December 31, 2015 (Level 1) (Level 2) (Level 3) Assets: Cash and cash equivalents: Money market funds $ $ $ — $ — U.S. government-sponsored securities — — Available-for-sale securities: U.S. Treasury securities — — U.S. government-sponsored securities — — Convertible Note Hedges — — Total assets measured at fair value $ $ $ $ Liabilities: Note Hedge Warrants $ $ — $ — $ Total liabilities measured at fair value $ $ — $ — $
Schedule of assumptions used in fair market valuations	The following inputs were used in the fair market valuation of the Convertible Note Hedges and Note Hedge Warrants as of September 30, 2016: Convertible Note Hedge Note Hedges Warrants Risk-free interest rate (1) 1.2 % % Time to maturity Stock price (2) $ $ Strike price (3) $ $ Common stock volatility (4) % % Dividend yield — % — % (1) Based on U.S. Treasury yield curve, with terms commensurate with the terms of the Convertible Note Hedges and the Note Hedge Warrants. (2) The closing price of the Company’s Class A common stock on the last trading day of the quarter ended September 30, 2016. (3) As per the respective agreements for the Convertible Note Hedges and Note Hedge Warrants. (4) Selected volatility based on historical volatility of the Company’s Class A common stock.
Schedule of the change in Level 3 convertible note derivatives	The following table reflects the change in the Company’s Level 3 convertible note derivatives from December 31, 2015 through September 30, 2016 (in thousands): Convertible Note Hedge Note Hedges Warrants Balance at December 31, 2015 $ $ Change in fair value, recorded as a component of gain (loss) on derivatives Balance at September 30, 2016 $ $
Significant Unobservable Inputs (Level 3)
Fair Value of Financial Instruments
Schedule of changes in contingent consideration payable	The following table reflects the change in the Company’s Level 3 contingent consideration payable from December 31, 2015 through September 30, 2016 (in thousands): Contingent Consideration Fair value at December 31, 2015 $ — Additions Changes in fair value Payments/transfers to other current liabilities Fair value at September 30, 2016 $

Available-for-Sale Securities (

Available-for-Sale Securities (Tables)	9 Months Ended
	Sep. 30, 2016
Available-for-Sale Securities
Schedule of summary of available-for-sale securities	The following tables summarize the available-for-sale securities held at September 30, 2016 and December 31, 2015 (in thousands): Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value September 30, 2016 U.S. Treasury securities $ $ $ — $ U.S. government-sponsored securities Total $ $ $ $ Gross Gross Amortized Unrealized Unrealized Fair Cost Gains Losses Value December 31, 2015 U.S. Treasury securities $ $ — $ $ U.S. government-sponsored securities Total $ $ $ $

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2016
Property and Equipment
Schedule of property and equipment	Property and equipment, net consisted of the following (in thousands): September 30, 2016 December 31, 2015 Manufacturing equipment $ $ Laboratory equipment Computer and office equipment Furniture and fixtures Software Construction in process Leased vehicles Leasehold improvements Less accumulated depreciation and amortization $ $

Accrued Expenses and Other Cu27

Accrued Expenses and Other Current Liabilities (Tables)	9 Months Ended
	Sep. 30, 2016
Accrued Expenses
Schedule of accrued expenses and other current liabilities	Accrued expenses and other current liabilities consisted of the following (in thousands): September 30, 2016 December 31, 2015 Salaries and benefits $ $ Professional fees Accrued interest Other $ $

Notes Payable (Tables)

Notes Payable (Tables)	9 Months Ended
	Sep. 30, 2016
Schedule of outstanding Convertible Note	The Company’s outstanding Convertible Note balances as of September 30, 2016 consisted of the following (in thousands): Principal $ Less: unamortized debt discount Less: unamortized debt issuance costs Net carrying amount $ Equity component $
Schedule of interest expense related to Convertible Notes	The following table sets forth total interest expense recognized related to the 2022 Notes during the three and nine months ended September 30, 2016 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Contractual interest expense $ $ $ $ Amortization of debt issuance costs Amortization of debt discount Total interest expense $ $ $ $
8.375% Notes due 2026
Schedule of redemption price as percentage of outstanding principal balance	Redemption Payment Dates Percentage From and including March 15, 2018 to and including March 14, 2019 % From and including March 15, 2019 to and including March 14, 2020 % From and including March 15, 2020 to and including March 14, 2021 % From and including March 15, 2021 and thereafter %
11% PhaRMA Notes
Schedule of redemption price as percentage of outstanding principal balance	Redemption Payment Dates Percentage From and including January 1, 2016 to and including December 31, 2016 % From and including January 1, 2017 and thereafter %

Commitments and Contingencies (

Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2016
Commitments and Contingencies
Schedule of future minimum lease payments under all non-cancelable lease arrangements	At September 30, 2016, future minimum lease payments under all non‑cancelable lease arrangements were as follows (in thousands): Operating Lease Payments Capital Lease to be Received Net Operating Lease Payments from Subleases Lease Payments Payments 2016 (1) $ $ $ $ 2017 $ $ $ 2018 $ $ $ Total future minimum lease payments $ $ $ $ Less: amounts representing interest Capital lease obligations at September 30, 2016 Less: current portion of capital lease obligations Capital lease obligations, net of current portion $ (1) Amounts are for the three months ending December 31, 2016.

Employee Stock Benefit Plans (T

Employee Stock Benefit Plans (Tables)	9 Months Ended
	Sep. 30, 2016
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 nine months ended September 30, 2016 and 2015 (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Research and development $ $ $ $ Selling, general and administrative $ $ $ $
Summary of stock option activity	Weighted- Average Number of Shares Fair Value (in thousands) Outstanding at December 31, 2015 $ Granted Exercised Cancelled Outstanding at September 30, 2016 $
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 Nine Months Ended September 30, September 30, 2016 2015 2016 2015 Expected volatility % % % % Expected term (in years) Risk-free interest rate % % % % Expected dividend yield — % — % — % — %
Summary of RSU activity	Weighted- Average Number Grant Date of Shares Fair Value (in thousands) Unvested as of December 31, 2015 $ Granted $ Vested $ Forfeited $ Unvested as of September 30, 2016 $

Nature of Business - Debt Issue

Nature of Business - Debt Issued (Details) - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Jun. 30, 2015	Sep. 30, 2015	Sep. 30, 2016
Debt
Net proceeds received		$ 335,699
2.25% Convertible Senior Notes due in 2022 | Convertible Senior Notes
Debt
Aggregate principal amount of notes issued	$ 335,700
Annual interest rate of notes (as a percent)	2.25%	2.25%
Net proceeds received	$ 324,000
Fees and expenses	$ 11,700
8.375% Notes due 2026
Debt
Aggregate principal amount of notes issued			$ 150,000
Annual interest rate of notes (as a percent)			8.375%
11% PhaRMA Notes
Debt
Annual interest rate of notes (as a percent)			11.00%

Net Loss Per Share - Potentiall

Net Loss Per Share - Potentially Dilutive Securities (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Jun. 30, 2015
Potentially dilutive securities
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	63,457,000	62,080,000
Options to purchase common stock
Potentially dilutive securities
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	21,549,000	20,936,000
Shares subject to repurchase
Potentially dilutive securities
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	144,000	112,000
Restricted stock units
Potentially dilutive securities
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	1,264,000	532,000
2.25% Convertible Senior Notes due in 2022
Potentially dilutive securities
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	20,250,000	20,250,000
Note Hedge Warrants
Potentially dilutive securities
Total potentially dilutive securities excluded from the computation of diluted weighted average shares outstanding (in shares)	20,250,000	20,250,000
Note Hedge Warrants | Class A common stock
Potentially dilutive securities
Shares into which warrants may be converted (in shares)	20,249,665
2.25% Convertible Senior Notes due in 2022 | Convertible Senior Notes
Potentially dilutive securities
Aggregate principal amount of notes issued			$ 335.7

Business Combinations (Details)

Business Combinations (Details) - USD ($) $ in Thousands	Jun. 02, 2016	Jun. 02, 2016	Jun. 30, 2016	Sep. 30, 2016	Sep. 30, 2016
Preliminary allocation of purchase consideration
Cash payments					$ 100,000
Identifiable assets acquired
Goodwill				$ 649	649
Business combination other disclosures
Changes in fair value				8,667	$ 8,667
Licensing agreement | AstraZeneca
Business Combinations
Royalty percentage per agreement					single digits
Milestone payment to be paid by company upon milestone achievement					$ 165,000
Product related collaborative arrangements | AstraZeneca | Developed technology - ZURAMPIC
Business Combinations
Total milestone payments to be paid by company		$ 100,000
Period for reimbursement amount of development activities (in years)		10 years
Lesinurad transaction | AstraZeneca
Business Combinations
Acquisition related issuance costs			$ 1,600
Preliminary allocation of purchase consideration
Cash payments		$ 100,000
Contingent consideration	$ 87,649
Total consideration		187,649
Identifiable assets acquired
Goodwill	649	649
Total identifiable assets acquired	187,649	187,649
Business combination other disclosures
Impairment of goodwill					0
Lesinurad transaction | AstraZeneca | IPR&D - FDC Product
Identifiable assets acquired
In-process research and development	19,100	$ 19,100
Business combination other disclosures
Discount rate applied to determine fair value (as a percent)		16.00%
Remaining cost of development for intangible asset				13,900	13,900
Impairment of indefinite-lived intangible					0
Lesinurad transaction | AstraZeneca | Developed technology - ZURAMPIC
Identifiable assets acquired
Developed technology	$ 167,900	$ 167,900
Business combination other disclosures
Discount rate applied to determine fair value (as a percent)		13.50%
Estimated useful life		13 years
Accumulated amortization of intangible assets				4,300	4,300
Impairment of finite-lived intangible					0
Estimated future amortization expense
2,016				3,207	3,207
2,017				12,833	12,833
2,018				12,833	12,833
2,019				12,833	12,833
2020 and thereafter				121,916	121,916
Total				$ 163,622	$ 163,622
Lesinurad transaction | Commercial Supply Agreement (CSA) | AstraZeneca
Business Combinations
Time period for manufacturing technology transfer per agreement		6 months

Collaboration, License and Co34

Collaboration, License and Co-Promotion Agreements - Summary (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Collaboration, License and Co-Promotion Agreements
Total collaborative arrangements revenue	$ 66,106	$ 39,572	$ 186,498	$ 96,248
Allergan | Product related collaborative arrangements | North America | Linaclotide
Collaboration, License and Co-Promotion Agreements
Total collaborative arrangements revenue	60,285	35,083	160,294	84,790
Allergan | Product related collaborative arrangements | Europe | Linaclotide
Collaboration, License and Co-Promotion Agreements
Total collaborative arrangements revenue	110		300
Allergan | Co-Promotion Agreements | Viberzi
Collaboration, License and Co-Promotion Agreements
Total collaborative arrangements revenue	424		1,428
AstraZeneca | Product related collaborative arrangements | China, Hong Kong, and Macau | Linaclotide
Collaboration, License and Co-Promotion Agreements
Total collaborative arrangements revenue	77	474	371	2,170
Almirall | Product related collaborative arrangements | Europe | Linaclotide
Collaboration, License and Co-Promotion Agreements
Total collaborative arrangements revenue		143	3	360
Astellas | Collaborative arrangement
Collaboration, License and Co-Promotion Agreements
Total collaborative arrangements revenue	4,400	1,800	21,500	5,900
Astellas | Product related collaborative arrangements | Japan | Linaclotide
Collaboration, License and Co-Promotion Agreements
Total collaborative arrangements revenue	4,446	1,806	21,460	5,886
Exact Sciences Corp | Co-Promotion Agreements | Cologuard
Collaboration, License and Co-Promotion Agreements
Total collaborative arrangements revenue	$ 764	$ 2,066	$ 2,642	$ 3,042

Collaboration, License and Co35

Collaboration, License and Co-Promotion Agreements - North America (Details) - Allergan $ in Thousands	1 Months Ended	3 Months Ended			9 Months Ended
	Sep. 30, 2007	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Mar. 31, 2015USD ($)	Sep. 30, 2016USD ($)item	Sep. 30, 2015USD ($)
North America | Collaborative arrangement
Collaboration, License and Co-Promotion Agreements
Collaborative arrangements revenue related to sales of LINZESS in the U.S.		$ 59,983	$ 34,750		$ 154,963	$ 84,162
Royalty revenue		302	333		849	627
Sale of API		0			4,482
Total collaborative arrangements revenue		60,285	35,083		160,294	84,789
North America | Product related collaborative arrangements
Collaboration, License and Co-Promotion Agreements
Equity investment in the entity's capital stock					25,000
Net cost sharing offset or incremental expense related to research and development expense		1,100	2,900		6,400	14,800
Cost sharing amount, reduction to research and development				$ 4,300
Net profit share adjustment		(1,800)	(1,000)		(4,500)	(1,000)
North America | Product related collaborative arrangements | Development milestones
Collaboration, License and Co-Promotion Agreements
Cumulative license fees and development milestone payments received					$ 205,000
Number of milestone payments | item					6
North America | Product related collaborative arrangements | Commercialization milestone
Collaboration, License and Co-Promotion Agreements
Percentage of net profit from commercialization					50.00%
Percentage of net loss from commercialization					50.00%
North America | Future payments | Product related collaborative arrangements | Maximum | Sales milestones
Collaboration, License and Co-Promotion Agreements
Milestone payment to be received by company upon milestone achievement					$ 100,000
U.S. | Product related collaborative arrangements
Collaboration, License and Co-Promotion Agreements
Collaborative arrangements revenue related to sales of LINZESS in the U.S.		59,983	34,750		154,963	84,162
Selling, general and administrative costs incurred by the Company		(7,491)	(8,645)		(25,523)	(24,647)
The Company's share of net profit (loss)		52,492	26,105		129,440	59,515
Canada and Mexico | Product related collaborative arrangements
Collaboration, License and Co-Promotion Agreements
Royalty percentage per agreement	mid-teens
Royalty revenue		$ 300	$ 300		$ 800	$ 600

Collaboration, License and Co36

Collaboration, License and Co-Promotion Agreements - European Territory (Details) $ in Thousands	Nov. 13, 2009USD ($)shares	Nov. 30, 2010USD ($)	Apr. 30, 2009USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Dec. 31, 2014USD ($)item	Oct. 31, 2015USD ($)
Almirall | Europe | Product related collaborative arrangements
Collaboration, License and Co-Promotion Agreements
Up-front fee received, net			$ 38,000					$ 3,900
Milestone payment due upon the first commercial launch in each of the five major European Union countries								$ 4,000
Number of major European Union countries | item								5
Number of milestones achieved under collaboration agreement | item								4
Number of major European Union countries in which commercial launch occurred | item								4
Revenue recognized in royalty payments					$ 400		$ 400
Almirall | Europe | Product related collaborative arrangements | Convertible preferred stock
Collaboration, License and Co-Promotion Agreements
Equity investment in the entity's capital stock	$ 15,000
Issuance of Convertible preferred stock (in shares) | shares	681,819
Almirall | Europe | Product related collaborative arrangements | Development and sales milestones
Collaboration, License and Co-Promotion Agreements
Maximum contingent equity and milestone payments to be received			$ 40,000
Almirall | Europe | Product related collaborative arrangements | Development milestones
Collaboration, License and Co-Promotion Agreements
Milestone payment received, net of foreign withholding taxes		$ 19,000
Milestone payment received		$ 20,000
Allergan | North America | Collaborative arrangement
Collaboration, License and Co-Promotion Agreements
Revenue recognized in royalty payments				$ 302	$ 333	$ 849	$ 627
Allergan | North America | Product related collaborative arrangements
Collaboration, License and Co-Promotion Agreements
Equity investment in the entity's capital stock						25,000
Almirall S A and Allergan Plc | Europe | Product related collaborative arrangements
Collaboration, License and Co-Promotion Agreements
Remaining milestone payment due upon the amendment to the license agreement									$ 42,500
Revenue recognized in royalty payments						$ 300

Collaboration, License and Co37

Collaboration, License and Co-Promotion Agreements - Japan (Details) $ in Thousands	1 Months Ended			3 Months Ended		9 Months Ended		23 Months Ended
	Sep. 30, 2016USD ($)	Mar. 31, 2013	Nov. 30, 2009USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)item	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)
Collaboration, License and Co-Promotion Agreements
Collaborative arrangements revenue				$ 66,106	$ 39,572	$ 186,498	$ 96,248
Astellas | Collaborative arrangement
Collaboration, License and Co-Promotion Agreements
Collaborative arrangements revenue				4,400	1,800	21,500	5,900
Astellas | Japan | Product related collaborative arrangements
Collaboration, License and Co-Promotion Agreements
Up-front fee received			$ 30,000	1,600	1,300	4,100	3,800
Estimated development period prior to assessment	85 months	115 months
Estimated development period	82 months	85 months
Revenue recognized over the remaining development period	$ 2,200			2,200		2,200		$ 2,200
Revenue recognized from sale of API				1,500		1,500	500
Astellas | Japan | Product related collaborative arrangements | March2013
Collaboration, License and Co-Promotion Agreements
Revenue attributable to revision to estimated development period				500	500	1,500	1,500
Astellas | Japan | Product related collaborative arrangements | September 2016
Collaboration, License and Co-Promotion Agreements
Revenue attributable to revision to estimated development period				300		$ 300
Astellas | Japan | Product related collaborative arrangements | Additional development milestones
Collaboration, License and Co-Promotion Agreements
Number of milestone payments to be received (in payments) | item						3
Astellas | Japan | Product related collaborative arrangements | Additional development milestones | Maximum
Collaboration, License and Co-Promotion Agreements
Total milestone payments to be received						$ 45,000
Astellas | Japan | Product related collaborative arrangements | Phase 3 milestones
Collaboration, License and Co-Promotion Agreements
Milestone payment to be received by company upon milestone achievement						15,000
Collaborative arrangements revenue				700	$ 500	1,700	$ 1,600	14,100
Revenue recognized over the remaining development period	900			900		900		900
Astellas | Japan | Product related collaborative arrangements | Japanese NDA equivalent filing milestone
Collaboration, License and Co-Promotion Agreements
Milestone payment to be received by company upon milestone achievement						15,000
Collaborative arrangements revenue				700		14,100
Revenue recognized over the remaining development period	$ 900			900		900		$ 900
Astellas | Japan | Product related collaborative arrangements | Approval of Japanese NDA equivalent filing milestone
Collaboration, License and Co-Promotion Agreements
Milestone payment to be received by company upon milestone achievement						15,000
Allergan | North America | Collaborative arrangement
Collaboration, License and Co-Promotion Agreements
Revenue recognized from sale of API				$ 0		$ 4,482

Collaboration, License and Co38

Collaboration, License and Co-Promotion Agreements - China, Hong Kong and Macau (Details) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended
	Aug. 31, 2014	Oct. 31, 2012	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Collaboration, License and Co-Promotion Agreements
Collaborative arrangements revenue			$ 66,106	$ 39,572	$ 186,498	$ 96,248
AstraZeneca | Product related collaborative arrangements | China, Hong Kong, and Macau
Collaboration, License and Co-Promotion Agreements
Prior notice period to terminate the agreement		180 days
Up-front fee received		$ 25,000
Additional budget for activities supporting the development of linaclotide	$ 14,000
Total amount of non-contingent arrangement consideration		$ 34,000
Percentage of costs of clinical trial material supply services and research, development and regulatory activities allocated		55.00%
Amount of arrangement consideration for clinical trial material supply services and research, development and regulatory activities		$ 9,000
Arrangement Consideration allocated to the License Deliverable		29,700
Arrangement Consideration allocated to the R&D Services		1,800
Arrangement Consideration allocated to the JDC services		100
Arrangement Consideration allocated to the clinical trial material supply services		300
Arrangement Consideration allocated to Co-Promotion Deliverable		2,100
Net cost sharing offset or incremental expense related to research and development expense						700
AstraZeneca | Product related collaborative arrangements | China, Hong Kong, and Macau | Sales milestones
Collaboration, License and Co-Promotion Agreements
Milestone payment to be received by company upon milestone achievement		$ 125,000
AstraZeneca | Product related collaborative arrangements | China, Hong Kong, and Macau | Commercialization milestone
Collaboration, License and Co-Promotion Agreements
Percentage of net profit from commercialization		55.00%
Percentage of net loss from commercialization		55.00%
AstraZeneca | Collaborative Arrangement, License Deliverable | China, Hong Kong, and Macau
Collaboration, License and Co-Promotion Agreements
Collaborative arrangements revenue				$ 400	$ 300	$ 2,000

Collaboration, License and Co39

Collaboration, License and Co-Promotion Agreements - Co-Promotion Agreements (Details) $ in Thousands	3 Months Ended		6 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2016USD ($)item	Sep. 30, 2015USD ($)	Jun. 30, 2015USD ($)	Sep. 30, 2016USD ($)item	Sep. 30, 2015USD ($)	Dec. 31, 2015USD ($)
Collaboration, License and Co-Promotion Agreements
Collaborative arrangements revenue	$ 66,106	$ 39,572		$ 186,498	$ 96,248
Viberzi
Collaboration, License and Co-Promotion Agreements
Collaborative Arrangement Revenues Earned			$ 2,400
Co-Promotion Agreements | Viberzi
Collaboration, License and Co-Promotion Agreements
Collaborative Arrangement Revenues Earned	400			1,400		$ 2,400
Exact Sciences Corp | Co-Promotion Agreements | Cologuard
Collaboration, License and Co-Promotion Agreements
Collaborative arrangements revenue	764	$ 2,066		2,642	$ 3,042
Exact Sciences Corp | Co-Promotion Agreements | Cologuard | Maximum
Collaboration, License and Co-Promotion Agreements
Reimbursement of revenue				3,400
Allergan | Co-Promotion Agreements | Viberzi
Collaboration, License and Co-Promotion Agreements
Collaborative arrangements revenue	$ 424			$ 1,428
Number of health care practitioners (in practitioners) | item	25,000			25,000
Milestone payment to be received by company upon milestone achievement				$ 10,000

Collaboration,License and Co-Pr

Collaboration,License and Co-Promotion Agreements - Other Collaborations and License Agreements (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016USD ($)
Agreement One - other collaboration and license agreements | Development milestones
Collaboration, License and Co-Promotion Agreements
Contingent milestone payable	$ 7.5
Milestone payment made	2.5
Agreement One - other collaboration and license agreements | Regulatory milestones
Collaboration, License and Co-Promotion Agreements
Contingent milestone payable	18
Milestone payment made	0
Agreement Two - other collaboration and license agreements
Collaboration, License and Co-Promotion Agreements
Contingent milestone payable per product, maximum	114.5
Agreement Two - other collaboration and license agreements | Sales milestones
Collaboration, License and Co-Promotion Agreements
Contingent milestone payable per product	35
Agreement Two - other collaboration and license agreements | Development milestones
Collaboration, License and Co-Promotion Agreements
Contingent milestone payable per product	21.5
Agreement Two - other collaboration and license agreements | Regulatory milestones
Collaboration, License and Co-Promotion Agreements
Contingent milestone payable per product	$ 58

Fair Value of Financial Instr41

Fair Value of Financial Instruments - Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015	Sep. 30, 2015
Assets:
Available-for-sale securities	$ 136,936	$ 178,107
Convertible note hedges	137,302	86,466
Liabilities:
Note hedge warrants	(120,121)	(75,328)
Contingent Consideration	(96,300)
Fair value transfers
Fair value transfer between measurement levels	0		$ 0
Convertible Note Hedge
Assets:
Convertible note hedges	91,900
Note Hedge Warrants
Liabilities:
Note hedge warrants	(70,800)
Significant Unobservable Inputs (Level 3)
Liabilities:
Contingent Consideration	(96,260)
Recurring basis
Assets:
Total assets measured at fair value	439,764	522,816
Liabilities:
Contingent Consideration	(96,260)
Total liabilities measured at fair value	(216,381)	(75,328)
Recurring basis | Convertible Note Hedge
Assets:
Convertible note hedges	137,302	86,466
Recurring basis | Note Hedge Warrants
Liabilities:
Note hedge warrants	(120,121)	(75,328)
Recurring basis | Money market funds
Assets:
Cash and cash equivalents	163,521	254,903
Recurring basis | U.S. Treasury securities
Assets:
Available-for-sale securities	40,404	50,091
Recurring basis | U.S. government-sponsored securities
Assets:
Cash and cash equivalents	2,005	3,340
Available-for-sale securities	96,532	128,016
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets:
Total assets measured at fair value	203,925	304,994
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Money market funds
Assets:
Cash and cash equivalents	163,521	254,903
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury securities
Assets:
Available-for-sale securities	40,404	50,091
Recurring basis | Significant Other Observable Inputs (Level 2)
Assets:
Total assets measured at fair value	98,537	131,356
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. government-sponsored securities
Assets:
Cash and cash equivalents	2,005	3,340
Available-for-sale securities	96,532	128,016
Recurring basis | Significant Unobservable Inputs (Level 3)
Assets:
Total assets measured at fair value	137,302	86,466
Liabilities:
Contingent Consideration	(96,260)
Total liabilities measured at fair value	(216,381)	(75,328)
Recurring basis | Significant Unobservable Inputs (Level 3) | Convertible Note Hedge
Assets:
Convertible note hedges	137,302	86,466
Recurring basis | Significant Unobservable Inputs (Level 3) | Note Hedge Warrants
Liabilities:
Note hedge warrants	$ (120,121)	$ (75,328)

Fair Value of Financial Instr42

Fair Value of Financial Instruments - Change in Fair Value (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Change in level 3 assets
Purchase of convertible note hedges		$ (91,915)
Change in level 3 liabilities
Proceeds from issuance of note hedge warrants		$ 70,849
Significant Unobservable Inputs (Level 3) | Convertible Note Hedge
Derivative Instrument Detail [Abstract]
Risk-free interest rate (as a percent)	1.20%
Time to maturity	5 years 8 months 12 days
Stock price (in dollars per share)	$ 15.88
Strike price (in dollars per share)	$ 16.58
Common stock volatility (as a percent)	46.20%
Change in level 3 assets
Balance at beginning of period	$ 86,466
Change in fair value, recorded as a component of gain (loss) on derivatives	50,836
Balance at end of period	$ 137,302
Significant Unobservable Inputs (Level 3) | Note Hedge Warrants
Derivative Instrument Detail [Abstract]
Risk-free interest rate (as a percent)	1.30%
Time to maturity	6 years 3 months 18 days
Stock price (in dollars per share)	$ 15.88
Strike price (in dollars per share)	$ 21.50
Common stock volatility (as a percent)	45.90%
Change in level 3 liabilities
Balance at beginning of period	$ (75,328)
Change in fair value, recorded as a component of gain on derivatives	(44,793)
Balance at end of period	$ (120,121)

Fair Value of Financial Instr43

Fair Value of Financial Instruments - Contingent Consideration (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2016
Changes in contingent consideration payable
Changes in fair value	$ 8,667	$ 8,667
Ending balance	96,300	96,300
Significant Unobservable Inputs (Level 3)
Changes in contingent consideration payable
Changes in fair value		8,667
Payments/transfers to other current liabilities		(56)
Ending balance	$ 96,260	96,260
Significant Unobservable Inputs (Level 3) | Lesinurad transaction
Changes in contingent consideration payable
Additions		$ 87,649

Fair Value of Financial Instr44

Fair Value of Financial Instruments - Notes Payable (Details) - USD ($) $ in Millions	Sep. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Jan. 31, 2013
Notes Payable | 11% PhaRMA Notes
Fair value disclosures
Aggregate principal amount of notes issued in private placement				$ 175
Notes Payable | 11% PhaRMA Notes | Significant Unobservable Inputs (Level 3)
Fair value disclosures
Estimated fair value	$ 144.8	$ 166.8
Convertible Senior Notes | 2.25% Convertible Senior Notes due in 2022
Fair value disclosures
Aggregate principal amount of notes issued in private placement			$ 335.7
Convertible Senior Notes | 2.25% Convertible Senior Notes due in 2022 | Significant Other Observable Inputs (Level 2)
Fair value disclosures
Estimated fair value	$ 402.7	$ 311.6

Available-for-Sale Securities45

Available-for-Sale Securities (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016USD ($)item	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)item	Sep. 30, 2015USD ($)	Dec. 31, 2015USD ($)item
Available-for-Sale Securities
Amortized Cost	$ 136,875		$ 136,875		$ 178,193
Gross Unrealized Gains	62		62		2
Gross Unrealized Losses	(1)		(1)		(88)
Fair Value	$ 136,936		$ 136,936		$ 178,107
Contractual maturity period, maximum			1 year
Number of investments classified as available-for-sale securities in an unrealized loss position (in investments) | item	4		4		32
Number of investments classified as available-for-sale securities in an unrealized loss position for more than twelve months (in investments) | item	0		0		0
Aggregate fair value of securities none of which had been in an unrealized loss position for more than twelve months	$ 5,200		$ 5,200		$ 167,600
Proceeds from sales of available-for-sale securities	0	$ 0	0	$ 0
U.S. Treasury securities
Available-for-Sale Securities
Amortized Cost	40,376		40,376		50,124
Gross Unrealized Gains	28		28
Gross Unrealized Losses					(33)
Fair Value	40,404		40,404		50,091
U.S. government-sponsored securities
Available-for-Sale Securities
Amortized Cost	96,499		96,499		128,069
Gross Unrealized Gains	34		34		2
Gross Unrealized Losses	(1)		(1)		(55)
Fair Value	$ 96,532		$ 96,532		$ 128,016

Inventory (Details)

Inventory (Details) $ in Millions	9 Months Ended
	Sep. 30, 2016USD ($)agreement	Dec. 31, 2015USD ($)
Inventory
Number of minimum supply agreements (in agreements) | agreement	2
Accrual for excess purchase commitments | $	$ 10.1	$ 10.1

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Property and equipment
Property and equipment, gross	$ 81,661	$ 77,681
Less accumulated depreciation and amortization	(62,819)	(56,606)
Property and equipment, net	18,842	21,075
Manufacturing equipment
Property and equipment
Property and equipment, gross	3,748	3,748
Laboratory equipment
Property and equipment
Property and equipment, gross	14,459	13,681
Computer and office equipment
Property and equipment
Property and equipment, gross	4,330	3,596
Furniture and fixtures
Property and equipment
Property and equipment, gross	2,088	2,062
Software
Property and equipment
Property and equipment, gross	13,416	12,715
Construction in process
Property and equipment
Property and equipment, gross	1,229	375
Leased vehicles
Property and equipment
Property and equipment, gross	3,913	3,039
Leasehold improvements
Property and equipment
Property and equipment, gross	$ 38,478	$ 38,465

Accrued Expenses and Other Cu48

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2016	Dec. 31, 2015
Accrued Expenses
Salaries and benefits	$ 19,142	$ 19,582
Professional fees	1,655	507
Accrued interest	2,901	1,103
Other	5,357	2,109
Total accrued expenses and other current liabilities	$ 29,055	$ 23,301

Notes Payable - General Informa

Notes Payable - General Information (Details) - USD ($)	1 Months Ended	9 Months Ended
	Jun. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Sep. 23, 2016
Notes Payable
Net proceeds received			$ 335,699,000
Redemption Period		12 months
Convertible Senior Notes
Notes Payable
Maximum period of the sole remedy for event failures in the Indenture	180 days
2.25% Convertible Senior Notes due in 2022 | Convertible Senior Notes
Notes Payable
Aggregate principal amount of notes issued	$ 335,700,000
Debt issuance costs capitalized		$ 6,960,000
Net proceeds received	324,000,000
Fees and expenses	11,700,000
Payments for convertible bond hedges	$ 21,100,000
Annual interest rate of notes (as a percent)	2.25%		2.25%
Amortization period	7 years
8.375% Notes due 2026
Notes Payable
Aggregate principal amount of notes issued		$ 150,000,000
Annual interest rate of notes (as a percent)		8.375%
8.375% Notes due 2026 | Notes Payable
Notes Payable
Aggregate principal amount of notes issued				$ 150,000,000
Annual interest rate of notes (as a percent)		8.375%		8.375%
Percentage of net sales of LINZESS considered to determine quarterly payments on the notes		7.50%
8.375% Notes due 2026 | Other assets | Notes Payable
Notes Payable
Debt issuance costs capitalized		$ 500,000
Class A common stock | Convertible Senior Notes
Notes Payable
Number of trading days	30 days
Class A common stock | Maximum | Convertible Senior Notes
Notes Payable
Number of trading days	20 days
Class A common stock | 2.25% Convertible Senior Notes due in 2022 | Convertible Senior Notes
Notes Payable
Initial conversion rate, number of shares to be issued per $1000 of principal amount (in shares)	60.3209
Initial conversion price (in dollars per share)	$ 16.58
Shares issuable upon conversion of debt (in shares)	20,249,665
Principal amount used for debt instrument conversion ratio	$ 1,000
Number of trading days	30 days
Minimum percentage of stock price	130.00%
Number of business days immediately after any five consecutive trading day period during the measurement period	5 days
Number of consecutive trading days before five business days during the measurement period	5 days
Repurchase price, as percentage of principal amount, if company undergoes change of control	100.00%
Class A common stock | 2.25% Convertible Senior Notes due in 2022 | Maximum | Convertible Senior Notes
Notes Payable
Percentage of the trading price to the product of the sale price of the entity's common stock and the conversion rate	98.00%
Class A common stock | 2.25% Convertible Senior Notes due in 2022 | Minimum | Convertible Senior Notes
Notes Payable
Percentage of aggregate principal amount payable, in case of event of default	25.00%

Notes Payable - Carrying Amount

Notes Payable - Carrying Amount (Details) - 2.25% Convertible Senior Notes due in 2022 - Convertible Senior Notes - USD ($) $ in Thousands	1 Months Ended	9 Months Ended
	Jun. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Liability component:
Principal		$ 335,699
Less: unamortized debt discount		(98,022)
Less: unamortized debt issuance costs		(6,960)
Net carrying amount		230,717
Equity component		$ 114,199
Debt Issuance Cost	$ 11,700
Debt issuance costs allocated to equity components	4,000
Debt issuance costs allocated to liability components	$ 7,700
Debt instrument term	7 years
Effective interest rate on liability components		9.34%
Contractual interest expense		$ 5,665	$ 2,181
Amortization of debt issuance costs		483	160
Amortization of debt discount		9,614	3,496
Total interest expense		$ 15,762	$ 5,837

Notes Payable - Convertible Deb

Notes Payable - Convertible Debt (Details) - USD ($) $ / shares in Units, $ in Thousands	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Notes Payable
Long-term asset	$ 137,302	$ 86,466
Long-term liability	120,121	$ 75,328
Net derivative issuance cost	21,100
Convertible Note Hedge
Notes Payable
Long-term asset	$ 91,900
Convertible Note Hedge | Class A common stock
Notes Payable
Shares issuable upon conversion of debt (in shares)	20,249,665
Initial conversion price (in dollars per share)	$ 16.58
Note Hedge Warrants
Notes Payable
Long-term liability	$ 70,800
Note Hedge Warrants | Class A common stock
Notes Payable
Shares into which warrants may be converted (in shares)	20,249,665
Warrants strike price (in dollars per share)	$ 21.50
Number of trading days for exercise of warrants	150 days

Notes Payable - PhaRMA Notes (D

Notes Payable - PhaRMA Notes (Details) - USD ($) $ in Thousands	Mar. 15, 2014	Jan. 04, 2013	Sep. 30, 2016	Sep. 23, 2016	Dec. 31, 2015	Jan. 31, 2013
Notes Payable
Prepaid expenses and other current assets			$ 9,216		$ 6,293
Other assets			$ 1,412		$ 2,628
11% PhaRMA Notes
Notes Payable
Annual cash interest rate			11.00%
8.375% Notes due 2026
Notes Payable
Aggregate principal amount of notes issued in private placement			$ 150,000
Annual cash interest rate			8.375%
Notes Payable | 11% PhaRMA Notes
Notes Payable
Aggregate principal amount of notes issued in private placement						$ 175,000
Annual cash interest rate						11.00%
Percentage of net sales of LINZESS considered to determine quarterly payments on the notes	7.50%
Principal payment			$ 32,300
Upfront cash proceeds		$ 175,000
Discount on issuance of debt		400
Debt issuance costs capitalized		$ 7,300
Notes Payable | 11% PhaRMA Notes | From and including January 1, 2016 to and including December 31, 2016
Notes Payable
Redemption Percentage			102.75%
Payment start date			Jan. 1, 2016
Payment end date			Dec. 31, 2016
Notes Payable | 11% PhaRMA Notes | From and including January 1, 2017 and thereafter
Notes Payable
Redemption Percentage			100.00%
Payment start date			Jan. 1, 2017
Notes Payable | 8.375% Notes due 2026
Notes Payable
Aggregate principal amount of notes issued in private placement				$ 150,000
Annual cash interest rate			8.375%	8.375%
Percentage of net sales of LINZESS considered to determine quarterly payments on the notes			7.50%
Notes Payable | 8.375% Notes due 2026 | From and including March 15, 2018 to and including March 14, 2019
Notes Payable
Redemption Percentage			108.00%
Payment start date			Mar. 15, 2018
Payment end date			Mar. 14, 2019
Notes Payable | 8.375% Notes due 2026 | From and including March 15, 2019 to and including March 14, 2020
Notes Payable
Redemption Percentage			105.50%
Payment start date			Mar. 15, 2019
Payment end date			Mar. 14, 2020
Notes Payable | 8.375% Notes due 2026 | From and including March 15, 2020 to and including March 14, 2021
Notes Payable
Redemption Percentage			102.75%
Payment start date			Mar. 15, 2020
Payment end date			Mar. 14, 2021
Notes Payable | 8.375% Notes due 2026 | From and including March 15, 2021 and thereafter
Notes Payable
Redemption Percentage			100.00%
Payment start date			Mar. 15, 2021
Other assets | Notes Payable | 8.375% Notes due 2026
Notes Payable
Debt issuance costs capitalized			$ 500

Commitments and Contingencies -

Commitments and Contingencies - Minimum Lease Payments (Details) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Dec. 31, 2014item	Dec. 31, 2015USD ($)
Operating lease
Number of sublease agreements | item					2
Rent expense	$ 2,000	$ 1,500	$ 9,500	$ 4,500
Estimated obligations to the landlord associated with sublease space, recorded as rent expense			(3,480)
Future minimum lease payments under Operating Lease Payments
2,016	5,123		5,123
2,017	20,498		20,498
2,018	831		831
Total future minimum lease payments	26,452		26,452
Future minimum lease payments under Capital Leases Payments
2,016	1,024		1,024
2,017	2,668		2,668
2,018	85		85
Total future minimum lease payments	3,777		3,777
Less amounts representing interest	(111)		(111)
Capital lease obligations at the end of the period	3,666		3,666
Less: current portion of capital lease obligations	(3,525)		(3,525)			$ (2,631)
Capital lease obligations, net of current portion	141		141			$ 306
Subleases
Future minimum Lease Payments to be Received from Subleases
2,016	(1,610)		(1,610)
2,017	(5,665)		(5,665)
2,018	(476)		(476)
Total future minimum lease payments	(7,751)		(7,751)
Net Operating Lease Payments
Future minimum lease payments under Operating Lease Payments
2,016	3,513		3,513
2,017	14,833		14,833
2,018	355		355
Total future minimum lease payments	$ 18,701		$ 18,701

Commitments and Contingencies54

Commitments and Contingencies - Other Commitments (Details2) $ in Millions	Sep. 30, 2016USD ($)
Developed technology - ZURAMPIC | AstraZeneca
Purchase obligations
Commercial supply purchase obligations	$ 1.6

Employee Stock Benefit Plans -

Employee Stock Benefit Plans - Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Share-based compensation is reflected in the condensed consolidated statements of operations
Allocated Share-based Compensation Expense	$ 6,933	$ 6,640	$ 21,836	$ 18,969
Research and development
Share-based compensation is reflected in the condensed consolidated statements of operations
Allocated Share-based Compensation Expense	2,634	2,662	8,398	7,407
Selling, general and administrative
Share-based compensation is reflected in the condensed consolidated statements of operations
Allocated Share-based Compensation Expense	$ 4,299	$ 3,978	$ 13,438	$ 11,562

Employee Stock Benefit Plans 56

Employee Stock Benefit Plans - Plan Activity (Details) - Options to purchase common stock - $ / shares shares in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Number of Shares
Outstanding at the beginning of the period (in shares)			20,566
Granted (in shares)			3,851
Exercised (in shares)			(1,912)
Cancelled (in shares)			(956)
Outstanding at the end of the period (in shares)	21,549		21,549
Weighted-Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)			$ 11.18
Granted (in dollars per share)			10.52
Exercised (in dollars per share)			4.63
Cancelled (in dollars per share)			12.85
Outstanding at the end of the period (in dollars per share)	$ 11.57		$ 11.57
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)	45.50%	46.10%	45.90%	46.10%
Expected term	6 years 1 month 6 days	6 years	6 years 1 month 6 days	6 years
Risk-free interest rate (as a percent)	1.20%	1.80%	1.50%	1.70%

Employee Stock Benefit Plans (D

Employee Stock Benefit Plans (Details) - Restricted Stock	9 Months Ended
	Sep. 30, 2016$ / sharesshares
Restricted Stock
Common stock receivable per option exercised (in shares).	1
Vesting percentage.	25.00%
Summary of unvested shares of restricted stock, shares
Outstanding at the beginning of the period ( in shares)	900,000
Granted (in shares)	554,000
Vested (in shares)	(130,000)
Forfeited (in shares)	(60,000)
Outstanding at the end of the period (in shares)	1,264,000
Summary of unvested shares of restricted stock, weighted-average fair value
Outstanding at the beginning of the period (in dollars per share) | $ / shares	$ 13.36
Granted (in dollars per share) | $ / shares	10.62
Vested (in dollars per share) | $ / shares	15.03
Forfeited (in dollars per share) | $ / shares	12.40
Outstanding at the end of the period (in dollars per share) | $ / shares	$ 12.03

Related Party Transactions (Det

Related Party Transactions (Details) $ in Millions	1 Months Ended		3 Months Ended		9 Months Ended
	Nov. 30, 2009shares	Sep. 30, 2009shares	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)	Sep. 30, 2015USD ($)	Dec. 31, 2015USD ($)
Class B common stock
Related Party Transactions
Preferred stock conversion basis					1
Allergan
Related Party Transactions
Accounts receivable			$ 52.5		$ 52.5		$ 51.6
Allergan | Convertible preferred stock
Related Party Transactions
Issuance of Convertible preferred stock (in shares) | shares		2,083,333
Almirall | Convertible preferred stock
Related Party Transactions
Issuance of Convertible preferred stock (in shares) | shares	681,819
Board of Directors
Related Party Transactions
Amount of insurance premium paid to the insurance provider			1.8	$ 1.8	5.6	$ 5.3
Accounts payable			$ 0		$ 0		$ 0