Tesaro (TSRO) 10-Q 7 Aug 15 2015 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 30, 2015
Document and Entity Information
Entity Registrant Name	TESARO, Inc.
Entity Central Index Key	1,491,576
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		40,026,328
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q2

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 354,369	$ 256,861
Other current assets	2,871	1,735
Total current assets	357,240	258,596
Property and equipment, net	2,177	1,022
Other assets	3,960	4,284
Total assets	363,377	263,902
Current liabilities:
Accounts payable	9,623	6,089
Accrued expenses	24,791	16,750
Other current liabilities	1,559	1,526
Total current liabilities	35,973	24,365
Convertible notes, net	119,685	115,481
Total liabilities	$ 155,658	$ 139,846
Commitments and contingencies (Note 8 and 9)
Stockholders' equity:
Preferred stock, $0.0001 par value; 10,000,000 shares authorized at both December 31, 2014 and June 30, 2015; no shares issued or outstanding at both December 31, 2014 and June 30, 2015
Common stock, $0.0001 par value; 100,000,000 shares authorized at both December 31, 2014 and June 30, 2015; 36,110,082 and 40,026,328 shares issued and outstanding at December 31, 2014 and June 30, 2015, respectively	$ 4	$ 4
Additional paid-in capital	667,288	474,562
Accumulated deficit	(459,573)	(350,510)
Total stockholders' equity	207,719	124,056
Total liabilities and stockholders' equity	$ 363,377	$ 263,902

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
Condensed Consolidated Balance Sheets
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	40,026,328	36,110,082
Common stock, shares outstanding	40,026,328	36,110,082

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Expenses:
Research and development	$ 38,930	$ 30,569	$ 72,475	$ 58,686
General and administrative	16,783	5,587	28,025	10,275
Acquired in-process research and development	1,000	900	1,000	17,900
Total expenses	56,713	37,056	101,500	86,861
Loss from operations	(56,713)	(37,056)	(101,500)	(86,861)
Interest expense	(3,853)		(7,579)
Interest income	9	5	16	10
Net loss	$ (60,557)	$ (37,051)	$ (109,063)	$ (86,851)
Net loss per share applicable to common stockholders - basic and diluted (in dollars per share)	$ (1.51)	$ (1.03)	$ (2.82)	$ (2.45)
Weighted-average number of common shares used in net loss per share applicable to common stockholders - basic and diluted (in shares)	40,008	35,982	38,667	35,422
Comprehensive loss	$ (60,557)	$ (37,051)	$ (109,063)	$ (86,851)

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating activities
Net loss	$ (109,063)	$ (86,851)
Adjustments to reconcile net loss to net cash used in operating activities:
Acquired in-process research and development	1,000	17,900
Depreciation expense	227	158
Stock-based compensation expense	9,381	5,640
Non-cash interest expense	4,544
Loss on disposal of property and equipment		80
Changes in operating assets and liabilities:
Other assets	(1,136)	530
Accounts payable	2,303	980
Accrued expenses	7,806	6,015
Other liabilities	33	(16)
Net cash used in operating activities	(84,905)	(55,564)
Investing activities
Acquisition of product candidate and technology licenses and milestone payments		(17,900)
Purchase of property and equipment	(943)	(945)
Net cash used in investing activities	(943)	(18,845)
Financing activities
Proceeds from sale of common stock, net of issuance costs	179,763	94,199
Proceeds from exercise of stock options	3,345	868
Proceeds from issuance of common stock under Employee Stock Purchase Plan	248	120
Net cash provided by financing activities	183,356	95,187
Increase in cash and cash equivalents	97,508	20,778
Cash and cash equivalents at beginning of period	256,861	130,310
Cash and cash equivalents at end of period	354,369	$ 151,088
Non-cash investing and financing activities
Purchase of property and equipment - cash not paid as of period end	456
Acquired in-process research and development -- milestone not paid as of period end	1,000
Supplemental Cash Flow Information
Interest Paid	$ 3,052

Description of Business

Description of Business	6 Months Ended
	Jun. 30, 2015
Description of Business
Description of Business	1. Description of Business TESARO, Inc., or the Company or TESARO, was incorporated in Delaware on March 26, 2010 and commenced operations in May 2010. Headquartered in Waltham, Massachusetts, TESARO is an oncology-focused biopharmaceutical company dedicated to improving the lives of cancer patients. TESARO acquires, in-licenses and develops oncology product candidates and, if approved for marketing, intends to commercialize these products. Since incorporation, primary activities have consisted of acquiring product candidates, advancing development of these product candidates, developing intellectual property, recruiting personnel and raising capital. The Company intends to in-license or acquire additional product candidates across various stages of development, operates in one segment and has never earned revenue from its activities. The Company is subject to a number of risks, including dependence on key individuals, the need to develop commercially viable products, competition from other companies, many of which are larger and better capitalized, and the need to obtain adequate additional financing to fund the development and potential commercialization of its product candidates and further its in-licensing and acquisition activities. The Company has incurred significant operating losses since inception and has relied on its ability to fund its operations through private and public equity and debt financings. Management expects operating losses and negative operating cash flows to continue for the foreseeable future. As the Company continues to incur losses, transition to profitability is dependent upon the successful development, approval, and commercialization of its product candidates and the achievement of a level of revenues adequate to support its cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital. Management intends to fund future operations through additional public or private equity or debt offerings and may seek additional capital through arrangements with strategic partners or from other sources.

Basis of Presentation and Signi

Basis of Presentation and Significant Accounting Policies	6 Months Ended
	Jun. 30, 2015
Basis of Presentation and Significant Accounting Policies
Basis of Presentation and Significant Accounting Policies	2. Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared by TESARO in conformity with accounting principles generally accepted in the United States of America, or GAAP. The Company’s condensed consolidated financial statements reflect the operations of the Company and its wholly-owned subsidiaries: TESARO UK Limited, TESARO Securities Corporation and TESARO Development, Ltd. All significant intercompany balances and transactions have been eliminated in consolidation. The Company currently operates in one business segment, which is the identification, acquisition, development and commercialization of oncology therapeutics and supportive care product candidates, and has a single reporting and operating unit structure. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods ended June 30, 2014 and 2015. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full fiscal year. These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2014 and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014. Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities and expenses, other comprehensive income and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to accrued clinical trial and manufacturing development expenses, which form part of the Company’s research and development expenses, and stock-based compensation expense. Significant estimates in these consolidated financial statements include estimates made in connection with accrued research and development expenses, stock-based compensation expense and valuation of convertible notes. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Cash and Cash Equivalents The Company considers all highly-liquid investments with original or remaining maturity from the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits and money market funds that invest primarily in certificates of deposit, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair value. Fair Value of Financial Instruments The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of investment credit quality. The hierarchy defines three levels of valuation inputs: Level 1 inputs Quoted prices in active markets for identical assets or liabilities Level 2 inputs Observable inputs other than Level 1 inputs, including quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active Level 3 inputs Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability The following table presents information about the Company’s financial assets and liabilities that have been measured at fair value as of December 31, 2014 and June 30, 2015 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands): December 31, 2014 Description Balance Sheet Classification Total Level 1 Level 2 Level 3 Assets: Money market funds Cash and cash equivalents $ $ $ — $ — Total assets $ $ $ — $ — June 30, 2015 Description Balance Sheet Classification Total Level 1 Level 2 Level 3 Assets: Money market funds Cash and cash equivalents $ $ $ — $ — Total assets $ $ $ — $ — The carrying amounts of accounts payable and accrued expenses approximate their fair values due to their short-term maturities. In September 2014, the Company issued $201.3 million aggregate principal amount of 3.00% convertible senior notes due October 1, 2021, or the Convertible Notes. Interest is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2015. As of June 30, 2015, the carrying value of the Convertible Notes, net of unamortized discount, was $119.7 million and the estimated fair value of the principal amount was $365.9 million. The Convertible Notes are discussed in more detail in Note 4, “Convertible Notes . ” Research and Development Expenses Research and development costs are charged to expense as incurred and include: · license fees and milestone payments related to the acquisition of in-licensed products, which are reported on the statements of operations as acquired in-process research and development; · employee-related expenses, including salaries, bonuses, benefits, travel and stock-based compensation expense; · fees and expenses incurred under agreements with contract research organizations, investigative sites, research consortia and other entities in connection with the conduct of clinical trials and preclinical studies and related services, such as data management, laboratory and biostatistics services; · the cost of acquiring, developing and manufacturing active pharmaceutical ingredients, clinical trial materials and other research and development materials; · fees and costs related to regulatory filings and activities; · facilities, depreciation and other expenses, which include direct and allocated expenses for rent, utilities, maintenance of facilities, insurance and other supplies; and · other costs associated with clinical and preclinical activities. Costs for certain development activities, such as clinical trials and manufacturing development activities, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred or level of effort expended. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the consolidated balance sheets as prepaid or accrued research and development expenses. Acquired In-Process Research and Development Expense The Company has acquired the rights to develop and commercialize new product candidates. Up-front payments that relate to the acquisition of a new drug compound, as well as milestone payments, are immediately expensed as acquired in-process research and development in the period in which they are incurred, provided that the acquisition did not also include processes or activities that would constitute a “business,” as defined under GAAP, the drug has not achieved regulatory approval for marketing and, absent obtaining such approval, has no alternative future use. Royalties owed on future sales of the products licensed pursuant to the agreements are expensed in the period the related revenues are recognized. Stock-Based Compensation Expense Stock-based compensation is recognized as expense for each stock-based award based on its estimated fair value. The Company determines the fair value of each stock option award at its grant date using the Black-Scholes option pricing model. The Company determines the fair value of each restricted stock unit at its grant date based on the fair market value of its common stock. The value of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service period. The cumulative effect of any changes to the estimated forfeiture rates are accounted for as an adjustment to expense in the period of the change. New Accounting Pronouncements - Recently Issued In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, which amends the guidance for accounting for revenue from contracts with customers. This ASU supersedes the revenue recognition requirements in Accounting Standards Codification, or ASC, Topic 605, Revenue Recognition , and creates a new Topic 606, Revenue from Contracts with Customers . Two adoption methods are permitted: retrospectively to all prior reporting periods presented, with certain practical expedients permitted; or retrospectively with the cumulative effect of initially adopting the ASU recognized at the date of initial application. On July 9, 2015, the FASB approved a deferral of the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also approved permitting early adoption of the standard, but not before the original effective date of December 15, 2016. The Company has not yet determined which adoption method it will utilize or the effect that the adoption of this guidance will have on its potential future revenue streams and consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-12. The amendments in this ASU apply to reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target can be achieved after a requisite service period. The amendments require an entity to treat a performance target that affects vesting, and that could be achieved after the requisite service period, as a performance condition. A reporting entity should apply existing guidance in ASC Topic 718 relating to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2015, and early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, which 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. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or are available to be issued). ASU No. 2014-15 provides guidance to an organization’s management, with principles and definitions intended to reduce diversity in the timing and content of disclosures commonly provided by organizations in the footnotes of their financial statements. ASU No. 2014-15 is effective for annual reporting periods ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU No. 2015-03, which amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. ASU No. 2015-03 is effective for annual reporting periods beginning after December 15, 2015, and early adoption is permitted. The amendment must be applied retrospectively such that the balance sheet of each individual period presented is adjusted to reflect the period-specific impact of using the new guidance. Upon transition, a business must adhere to the appropriate disclosures for an adjustment in an accounting principle. Such disclosures include why the change in accounting principle is occurring, the transition method, an explanation of the prior period information that was retrospectively adjusted, and how the change impacts the financial statement line items (i.e., debt issuance cost asset and the debt liability). The Company is currently in the process of evaluating the timing of adoption. If the Company had adopted this guidance as of June 30, 2015, the impact would have been to decrease “Other assets” and “Convertible notes, net” by $3.2 million as of June 30, 2015. In April 2015, the FASB issued ASU No. 2015-05, which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. ASU 2015-05 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. An entity can elect to adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date, or (2) retrospectively. For prospective transition, the only disclosure requirements at transition are the nature of and reason for the change in accounting principle, the transition method, and a qualitative description of the financial statement line items affected by the change. For retrospective transition, the disclosure requirements at transition include the requirements for prospective transition and quantitative information about the effects of the accounting change. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

Net Loss per Share

Net Loss per Share	6 Months Ended
	Jun. 30, 2015
Net Loss per Share
Net Loss per Share	3. Net Loss per Share Basic and diluted net loss per common share is calculated by dividing net loss applicable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. The Company’s potentially dilutive shares, which include outstanding stock options, unvested restricted stock, restricted stock units, and shares issuable upon conversion of the Convertible Notes, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The following table presents amounts that were excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect (in thousands): Three and Six Months Ended June 30, 2014 2015 Outstanding stock awards Unvested restricted stock — Shares issuable upon conversion of Convertible Notes — In September 2014, the Company issued Convertible Notes, which provide in certain situations for the conversion of the outstanding principal amount of the Convertible Notes into shares of the Company’s common stock at a predefined conversion rate. See Note 4, “Convertible Notes”, for additional information. In conjunction with the issuance of the Convertible Notes, the Company entered into capped call option transactions, or Capped Calls, with certain counterparties. The Capped Calls are expected generally to reduce the potential dilution, and/or offset, to an extent, the cash payments the Company may choose to make in excess of the principal amount, upon conversion of the Convertible Notes. As provided by the terms of the indenture underlying the Convertible Notes, the Company has a choice to settle the conversion obligation for the Convertible Notes in cash, shares or any combination of the two. The Company currently intends to settle the par value of the Convertible Notes in cash and any excess conversion premium in shares. Accordingly, the par value of the Convertible Notes will not be included in the calculation of diluted income per share, but the dilutive effect of the conversion premium will be considered in the calculation of diluted net income per share using the treasury stock method. The Convertible Notes first became convertible during the calendar quarter beginning on April 1, 2015. The share figure in the table above represents the estimated incremental shares that would be issued, after the consideration of the Capped Calls, assuming conversion of all of the outstanding Convertible Notes as of June 30, 2015.

Convertible Notes

Convertible Notes	6 Months Ended
	Jun. 30, 2015
Convertible Notes
Convertible notes.	4. Convertible Notes On September 29, 2014, in a registered underwritten public offering, the Company completed the issuance of $201.3 million aggregate principal amount of the Convertible Notes. In conjunction with the sale of the Convertible Notes, the Company used $20.8 million of the net proceeds to enter into separate Capped Calls. The Convertible Notes bear interest at a rate of 3.00% per annum, payable semi-annually on April 1 and October 1, beginning from April 1, 2015, and will be convertible into cash, shares of the Company’s common stock or a combination of cash and shares of the Company’s common stock, at the Company’s election. The Convertible Notes will mature on October 1, 2021, unless earlier converted or repurchased in accordance with their terms. Prior to the close of business on the business day immediately preceding April 1, 2021, the Convertible Notes will be convertible only upon the occurrence of certain events and during certain periods as discussed below, and thereafter, at any time until the close of business on the second scheduled trading day immediately preceding the maturity date. The initial conversion price of the Convertible Notes is approximately $35.13 per share of common stock at an initial conversion rate of 28.4627 shares of the Company’s common stock per $1,000 principal amount of Convertible Notes. The conversion rate is subject to adjustment from time to time upon the occurrence of certain events, including, but not limited to, the issuance of stock dividends and payment of cash dividends. At any time prior to the close of business on the business day immediately preceding April 1, 2021, holders may convert their Convertible Notes at their option only under the following circumstances: (1) during any calendar quarter commencing after the calendar quarter ending on December 31, 2014 (and only during such calendar quarter), if the closing sale price of the Company’s 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 in which the conversion occurs is greater than 130% of the conversion price on each applicable trading day; (2) during the five business day period after any ten consecutive trading day period, or the measurement period, in which the trading price per $1,000 principal amount of the Convertible Notes for each trading day of the measurement period was less than 98% of the product of the closing sale price of the Company’s common stock and the conversion rate on each such trading day; or (3) upon the occurrence of specified corporate events. The following table sets forth total interest expense recognized related to the Convertible Notes during the three and six months ended June 30, 2015 (in thousands): Three Months Ended Six Months Ended June 30, 2015 June 30, 2015 Contractual interest expense $ $ Amortization of debt discount Amortization of debt issuance costs Total interest expense $ $ During the three and six months ended June 30, 2015 the Company paid $3.1 million in interest related to the Convertible Notes.

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2015
Stock-Based Compensation
Stock-Based Compensation	5. Stock-Based Compensation The Company maintains several equity compensation plans, including the 2012 Omnibus Incentive Plan, or the 2012 Incentive Plan, the 2010 Stock Incentive Plan, or the 2010 Incentive Plan, the 2015 Non-Employee Director Stock Incentive Plan, or the 2015 Director Plan, and the 2012 Employee Stock Purchase Plan, or the 2012 ESPP. On April 27, 2012, the stockholders of the Company approved the 2012 Incentive Plan, which had been previously adopted by the board of directors. Upon effectiveness of the 2012 Incentive Plan, the Company ceased making awards under the 2010 Incentive Plan. The 2012 Incentive Plan allows the Company to grant awards for up to 1,428,571 shares of common stock plus the number of shares of common stock available for grant under the 2010 Incentive Plan as of the effectiveness of the 2012 Incentive Plan (an additional 6,857 shares) plus the number of shares of common stock related to awards outstanding under the 2010 Incentive Plan that terminate by expiration, forfeiture, cancellation, cash settlement or otherwise. In addition, each year starting with 2014, the number of shares available for grants of awards under the 2012 Incentive Plan is increased automatically on January 1 by a number of shares of common stock equal to the lesser of 4% of the shares of common stock outstanding at such time or the number of shares determined by the Company’s board of directors. Accordingly, effective January 1, 2014 and 2015, the number of shares authorized for issuance under the 2012 Incentive Plan was increased by 1,309,560 shares and 1,444,403 shares, respectively. On May 14, 2015, the stockholders of the Company approved an increase of 2,000,000 shares of common stock available for grant under the 2012 Incentive Plan. Awards under the 2012 Incentive Plan may include the following award types: stock options, which may be either incentive stock options or nonqualified stock options; stock appreciation rights; restricted stock; restricted stock units; dividend equivalent rights; performance shares; performance units; cash-based awards; other stock-based awards, including unrestricted shares; or any combination of the foregoing. The exercise price of stock options granted under the 2012 Incentive Plan is equal to the closing price of a share of the Company’s common stock on the grant date. On May 14, 2015, the stockholders of the Company approved the 2015 Director Plan, which had been previously adopted by the board of directors in order to have a plan in addition to the 2012 Incentive Plan for purposes of granting awards to non-employee directors . The 2015 Director Plan allows the Company to grant awards for up to 500,000 shares of common stock. Awards under the 2015 Director Plan may include the following award types: stock options; stock appreciation rights; restricted stock; restricted stock units; unrestricted stock; or any combination of the foregoing. The exercise price of stock options granted under the 2015 Director Plan is equal to the closing price of a share of the Company’s common stock on the grant date. Stock-based compensation expense as reflected in the Company’s condensed consolidated statements of operations and comprehensive loss was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2014 2015 2014 2015 Research and development $ $ $ $ General and administrative Total stock-based compensation expense $ $ $ $ Stock Options The following table presents a summary of the Company’s stock option activity and related information: Shares Weighted-average exercise price per share Outstanding at December 31, 2014 $ Granted Exercised ) Cancelled ) Outstanding at June 30, 2015 $ Vested at June 30, 2015 $ Vested and expected to vest at June 30, 2015 (a) $ (a) This represents the number of vested options as of June 30, 2015, plus the number of unvested options expected to vest as of June 30, 2015, based on the unvested options at June 30, 2015, adjusted for the estimated forfeiture rate. At June 30, 2015, there was approximately $81.0 million of total unrecognized compensation cost related to unvested stock options, which the Company expects to recognize over a remaining weighted-average period of 3.0 years. Restricted Stock Units During the three months ended June 30, 2015, the Company issued 50,000 restricted stock units, or RSUs, to certain employees. These RSUs are subject to time-based vesting. At June 30, 2015, there was approximately $2.8 million of unrecognized compensation cost related to the time-based RSUs, which the Company expects to recognize over a remaining weighted-average period of 4.0 years. All 50,000 RSUs remain outstanding at June 30, 2015. In August 2014, the Company issued 19,500 RSUs to certain employees, of which 3,900 vested during 2014 and no additional units have vested. During the six months ended June 30, 2015, 3,600 of these RSUs were cancelled. These stock awards have performance conditions, pursuant to which vesting of the award is contingent on the occurrence of certain milestone events. As a result, the related compensation cost is recognized as an expense when the probability of the milestone is deemed probable. At June 30, 2015, there was approximately $0.3 million of unrecognized compensation cost related to the RSU grants. ESPP Under the Company’s 2012 ESPP, an aggregate of 275,000 shares of common stock have been reserved for issuance pursuant to purchase rights granted to the Company’s employees or to employees of the Company’s designated subsidiaries. As of June 30, 2015, 249,801 shares remained available for issuance. During the six months ended June 30, 2014 and 2015, the Company issued 5,372 and 7,523 shares, respectively, under the 2012 ESPP, and recognized approximately $0.1 million and $0.1 million in related stock-based compensation expense, respectively.

Common Stock Transactions

Common Stock Transactions	6 Months Ended
	Jun. 30, 2015
Common Stock Transactions
Common Stock Transactions	6. Common Stock Transactions In February 2014, the Company sold 3,200,000 shares of common stock, in an underwritten public offering at a price to the public of $31.50 per share, resulting in gross proceeds of approximately $100.8 million. Net proceeds to the Company after deducting fees, commissions and other expenses related to the offering were approximately $94.2 million. The shares were issued pursuant to an automatic shelf registration statement on Form S-3. In March 2015, the Company sold 3,755,000 shares of common stock, in an underwritten public offering at a price to the public of $51.00 per share, resulting in gross proceeds of approximately $191.5 million. Net proceeds to the Company after deducting fees, commissions and other expenses related to the offering were approximately $179.8 million. The shares were issued pursuant to an automatic shelf registration statement on Form S-3.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2015
Income Taxes
Income Taxes	7. Income Taxes Deferred tax assets and deferred tax liabilities are determined based on temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is recorded against deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized. For the three and six months ended June 30, 2014 and 2015, the Company did not record any current or deferred income tax provisions or benefits. Due to the uncertainty surrounding the future realization of the favorable tax attributes, the Company has recorded full valuation allowances against its otherwise recognizable net deferred tax assets at both December 31, 2014 and June 30, 2015.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2015
Commitments and Contingencies
Commitments and Contingencies	8. Commitments and Contingencies The Company leases office space in Waltham, Massachusetts under a non-cancelable operating lease agreement. In April 2015, the Company amended its lease to add an additional 17,700 square feet to its existing leased office space of 53,200 square feet, increasing the total to approximately 70,900 square feet. The term of the lease commenced April 1, 2013 and continues through June 30, 2017. The lease agreement provides for one month of free rent with respect to a portion of the leased premises and a tenant improvement allowance of $0.1 million. The Company recognizes rental expense on a straight-line basis over the respective lease term including any free rent periods and tenant allowances. Future minimum rental commitments under the lease as of June 30, 2015 were $1.2 million, $2.3 million and $1.2 million for the remainder of the year ending December 31, 2015, and the years ending December 31, 2016 and 2017, respectively. The Company has entered into agreements with certain vendors for the provision of services, including services related to data management, clinical and commercial operation support and companion diagnostic development, that the Company is not contractually able to terminate for convenience and avoid any and all future obligations to the vendors. Under such agreements, the Company is contractually obligated to make certain minimum payments to the vendors, with the exact amounts in the event of termination to be based on the timing of the termination and the exact terms of the agreement. The Company has certain obligations under licensing agreements with third parties that are contingent upon achieving various development, regulatory and commercial milestones. Pursuant to these license agreements, the Company is required to make milestone payments if certain development, regulatory and commercial sales milestones are achieved, and may have certain additional research funding obligations. Also, pursuant to the terms of each of these license agreements, when and if commercial sales of a product commence, the Company will pay royalties to its licensors on net sales of the respective products. Legal Proceedings The Company may periodically become subject to legal proceedings and claims arising in connection with ongoing business activities, including claims or disputes related to patents that have been issued or that are pending in the field of research on which the Company is focused. The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities.

Collaboration Arrangements

Collaboration Arrangements	6 Months Ended
	Jun. 30, 2015
Collaboration Arrangements
Collaboration Arrangements	9. Collaboration Arrangements In May 2015, the Company entered into a research agreement with Merck Sharp & Dohme Corp., a subsidiary of Merck & Co., Inc., or Merck, to perform a trial to evaluate the preliminary safety and efficacy of niraparib plus KEYTRUDA® in patients with triple negative breast cancer and patients with ovarian cancer. Under the terms of this agreement, the Company is responsible for providing niraparib study materials and for carrying out clinical research activities. The Company and Merck will share in the costs of the study equally, with certain exceptions. The Company records cost-sharing payments received from Merck as reductions of research and development expense. The Company and Merck have the right to terminate the agreement, prior to the study completion date, in the event of the other party’s uncured breach or insolvency, and in certain other circumstances agreed to by the parties. Costs incurred by the Company related to this study were insignificant during the three months ended June 30, 2015.

Summary of Significant Accounti

Summary of Significant Accounting Policies (Policies)	6 Months Ended
	Jun. 30, 2015
Basis of Presentation and Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared by TESARO in conformity with accounting principles generally accepted in the United States of America, or GAAP. The Company’s condensed consolidated financial statements reflect the operations of the Company and its wholly-owned subsidiaries: TESARO UK Limited, TESARO Securities Corporation and TESARO Development, Ltd. All significant intercompany balances and transactions have been eliminated in consolidation. The Company currently operates in one business segment, which is the identification, acquisition, development and commercialization of oncology therapeutics and supportive care product candidates, and has a single reporting and operating unit structure. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the Company’s financial position and results of operations for the interim periods ended June 30, 2014 and 2015. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full fiscal year. These interim financial statements should be read in conjunction with the audited financial statements as of and for the year ended December 31, 2014 and the notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.
Use of Estimates	Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities and expenses, other comprehensive income and the related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to accrued clinical trial and manufacturing development expenses, which form part of the Company’s research and development expenses, and stock-based compensation expense. Significant estimates in these consolidated financial statements include estimates made in connection with accrued research and development expenses, stock-based compensation expense and valuation of convertible notes. The Company bases its estimates on historical experience, known trends and other market-specific or other relevant factors that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly-liquid investments with original or remaining maturity from the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include bank demand deposits and money market funds that invest primarily in certificates of deposit, commercial paper and U.S. government and U.S. government agency obligations. Cash equivalents are reported at fair value.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. The fair value hierarchy prioritizes valuation inputs based on the observable nature of those inputs. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of investment credit quality. The hierarchy defines three levels of valuation inputs: Level 1 inputs Quoted prices in active markets for identical assets or liabilities Level 2 inputs Observable inputs other than Level 1 inputs, including quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active Level 3 inputs Unobservable inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability The following table presents information about the Company’s financial assets and liabilities that have been measured at fair value as of December 31, 2014 and June 30, 2015 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands): December 31, 2014 Description Balance Sheet Classification Total Level 1 Level 2 Level 3 Assets: Money market funds Cash and cash equivalents $ $ $ — $ — Total assets $ $ $ — $ — June 30, 2015 Description Balance Sheet Classification Total Level 1 Level 2 Level 3 Assets: Money market funds Cash and cash equivalents $ $ $ — $ — Total assets $ $ $ — $ — The carrying amounts of accounts payable and accrued expenses approximate their fair values due to their short-term maturities. In September 2014, the Company issued $201.3 million aggregate principal amount of 3.00% convertible senior notes due October 1, 2021, or the Convertible Notes. Interest is payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2015. As of June 30, 2015, the carrying value of the Convertible Notes, net of unamortized discount, was $119.7 million and the estimated fair value of the principal amount was $365.9 million. The Convertible Notes are discussed in more detail in Note 4, “Convertible Notes . ”
Research and Development Expenses	Research and Development Expenses Research and development costs are charged to expense as incurred and include: · license fees and milestone payments related to the acquisition of in-licensed products, which are reported on the statements of operations as acquired in-process research and development; · employee-related expenses, including salaries, bonuses, benefits, travel and stock-based compensation expense; · fees and expenses incurred under agreements with contract research organizations, investigative sites, research consortia and other entities in connection with the conduct of clinical trials and preclinical studies and related services, such as data management, laboratory and biostatistics services; · the cost of acquiring, developing and manufacturing active pharmaceutical ingredients, clinical trial materials and other research and development materials; · fees and costs related to regulatory filings and activities; · facilities, depreciation and other expenses, which include direct and allocated expenses for rent, utilities, maintenance of facilities, insurance and other supplies; and · other costs associated with clinical and preclinical activities. Costs for certain development activities, such as clinical trials and manufacturing development activities, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors on their actual costs incurred or level of effort expended. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the consolidated balance sheets as prepaid or accrued research and development expenses.
Acquired In-Process Research and Development Expense	Acquired In-Process Research and Development Expense The Company has acquired the rights to develop and commercialize new product candidates. Up-front payments that relate to the acquisition of a new drug compound, as well as milestone payments, are immediately expensed as acquired in-process research and development in the period in which they are incurred, provided that the acquisition did not also include processes or activities that would constitute a “business,” as defined under GAAP, the drug has not achieved regulatory approval for marketing and, absent obtaining such approval, has no alternative future use. Royalties owed on future sales of the products licensed pursuant to the agreements are expensed in the period the related revenues are recognized.
Stock-Based Compensation Expense	Stock-Based Compensation Expense Stock-based compensation is recognized as expense for each stock-based award based on its estimated fair value. The Company determines the fair value of each stock option award at its grant date using the Black-Scholes option pricing model. The Company determines the fair value of each restricted stock unit at its grant date based on the fair market value of its common stock. The value of the award that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service period. The cumulative effect of any changes to the estimated forfeiture rates are accounted for as an adjustment to expense in the period of the change.
New Accounting Pronouncements - Recently Issued	New Accounting Pronouncements - Recently Issued In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, which amends the guidance for accounting for revenue from contracts with customers. This ASU supersedes the revenue recognition requirements in Accounting Standards Codification, or ASC, Topic 605, Revenue Recognition , and creates a new Topic 606, Revenue from Contracts with Customers . Two adoption methods are permitted: retrospectively to all prior reporting periods presented, with certain practical expedients permitted; or retrospectively with the cumulative effect of initially adopting the ASU recognized at the date of initial application. On July 9, 2015, the FASB approved a deferral of the effective date by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also approved permitting early adoption of the standard, but not before the original effective date of December 15, 2016. The Company has not yet determined which adoption method it will utilize or the effect that the adoption of this guidance will have on its potential future revenue streams and consolidated financial statements. In June 2014, the FASB issued ASU No. 2014-12. The amendments in this ASU apply to reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target can be achieved after a requisite service period. The amendments require an entity to treat a performance target that affects vesting, and that could be achieved after the requisite service period, as a performance condition. A reporting entity should apply existing guidance in ASC Topic 718 relating to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. The amendments in this ASU are effective for annual reporting periods and interim periods within those annual reporting periods beginning after December 15, 2015, and early adoption is permitted. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, which 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. Substantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or are available to be issued). ASU No. 2014-15 provides guidance to an organization’s management, with principles and definitions intended to reduce diversity in the timing and content of disclosures commonly provided by organizations in the footnotes of their financial statements. ASU No. 2014-15 is effective for annual reporting periods ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this guidance on its consolidated financial statements and related disclosures. In April 2015, the FASB issued ASU No. 2015-03, which amends existing guidance to require the presentation of debt issuance costs in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. ASU No. 2015-03 is effective for annual reporting periods beginning after December 15, 2015, and early adoption is permitted. The amendment must be applied retrospectively such that the balance sheet of each individual period presented is adjusted to reflect the period-specific impact of using the new guidance. Upon transition, a business must adhere to the appropriate disclosures for an adjustment in an accounting principle. Such disclosures include why the change in accounting principle is occurring, the transition method, an explanation of the prior period information that was retrospectively adjusted, and how the change impacts the financial statement line items (i.e., debt issuance cost asset and the debt liability). The Company is currently in the process of evaluating the timing of adoption. If the Company had adopted this guidance as of June 30, 2015, the impact would have been to decrease “Other assets” and “Convertible notes, net” by $3.2 million as of June 30, 2015. In April 2015, the FASB issued ASU No. 2015-05, which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. The guidance will not change GAAP for a customer’s accounting for service contracts. ASU 2015-05 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. An entity can elect to adopt the amendments either (1) prospectively to all arrangements entered into or materially modified after the effective date, or (2) retrospectively. For prospective transition, the only disclosure requirements at transition are the nature of and reason for the change in accounting principle, the transition method, and a qualitative description of the financial statement line items affected by the change. For retrospective transition, the disclosure requirements at transition include the requirements for prospective transition and quantitative information about the effects of the accounting change. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

Summary of Significant Accoun16

Summary of Significant Accounting Policies (Tables)	6 Months Ended
	Jun. 30, 2015
Basis of Presentation and Significant Accounting Policies
Schedule of company's financial assets and liabilities that have been measured at fair value and indicating the fair value hierarchy of the valuation inputs utilized to determine such fair value:	The following table presents information about the Company’s financial assets and liabilities that have been measured at fair value as of December 31, 2014 and June 30, 2015 and indicates the fair value hierarchy of the valuation inputs utilized to determine such fair value (in thousands): December 31, 2014 Description Balance Sheet Classification Total Level 1 Level 2 Level 3 Assets: Money market funds Cash and cash equivalents $ $ $ — $ — Total assets $ $ $ — $ — June 30, 2015 Description Balance Sheet Classification Total Level 1 Level 2 Level 3 Assets: Money market funds Cash and cash equivalents $ $ $ — $ — Total assets $ $ $ — $ —

Net Loss per Share (Tables)

Net Loss per Share (Tables)	6 Months Ended
	Jun. 30, 2015
Net Loss per Share
Schedule of share amount excluded from the calculation of diluted net loss per share , prior to the use of the treasury stock method, due to their anti-dilutive effect	The following table presents amounts that were excluded from the calculation of diluted net loss per share, due to their anti-dilutive effect (in thousands): Three and Six Months Ended June 30, 2014 2015 Outstanding stock awards Unvested restricted stock — Shares issuable upon conversion of Convertible Notes —

Convertible Notes (Tables)

Convertible Notes (Tables)	6 Months Ended
	Jun. 30, 2015
Convertible Notes
Schedule of convertible note interest expense	The following table sets forth total interest expense recognized related to the Convertible Notes during the three and six months ended June 30, 2015 (in thousands): Three Months Ended Six Months Ended June 30, 2015 June 30, 2015 Contractual interest expense $ $ Amortization of debt discount Amortization of debt issuance costs Total interest expense $ $

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2015
Stock-Based Compensation
Schedule of stock-based compensation expense as reflected in the Company's condensed consolidated statements of operations and comprehensive loss	Stock-based compensation expense as reflected in the Company’s condensed consolidated statements of operations and comprehensive loss was as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2014 2015 2014 2015 Research and development $ $ $ $ General and administrative Total stock-based compensation expense $ $ $ $
Summary of the Company's stock option activity and related information	Shares Weighted-average exercise price per share Outstanding at December 31, 2014 $ Granted Exercised ) Cancelled ) Outstanding at June 30, 2015 $ Vested at June 30, 2015 $ Vested and expected to vest at June 30, 2015 (a) $ (a) This represents the number of vested options as of June 30, 2015, plus the number of unvested options expected to vest as of June 30, 2015, based on the unvested options at June 30, 2015, adjusted for the estimated forfeiture rate.

Description of Business (Detail

Description of Business (Details)	6 Months Ended
	Jun. 30, 2015segment
Description of Business
Number of operating segments	1

Significant Accounting Policies

Significant Accounting Policies (Details)	6 Months Ended
	Jun. 30, 2015segment
Basis of Presentation and Significant Accounting Policies
Number of operating segments	1

Significant Accounting Polici22

Significant Accounting Policies (Details 2) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Estimate of Fair Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 349,783	$ 254,840
Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	349,783	254,840
Money Market Funds | Estimate of Fair Value Measurement
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	349,783	254,840
Money Market Funds | Fair Value, Inputs, Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 349,783	$ 254,840

Significant Accounting Polici23

Significant Accounting Policies (Details 3) - Convertible senior notes due October 2021 - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Sep. 30, 2014	Jun. 30, 2015	Sep. 29, 2014
Convertible notes [Line Items]
Proceeds from issuance of convertible notes	$ 201.3
Interest rate (as a percent)	3.00%		3.00%
Net carrying amount		$ 119.7
Convertible notes fair value disclosures		365.9
Other Assets | ASU No. 2015-03
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Impact of adoption		$ 3.2

Net Loss per Share (Details)

Net Loss per Share (Details) - shares shares in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Net Loss per Share
Amounts excluded from the calculation of diluted net loss per share due to their anti-dilutive effect	6,524	3,634
Shares issuable due to conversion of convertible debt	1,076
Employee Stock Option
Net Loss per Share
Amounts excluded from the calculation of diluted net loss per share due to their anti-dilutive effect	5,448	3,612
Restricted Stock
Net Loss per Share
Amounts excluded from the calculation of diluted net loss per share due to their anti-dilutive effect		22

Convertible Notes (Details)

Convertible Notes (Details)	Sep. 29, 2014USD ($)	Jun. 30, 2015USD ($)$ / shares	Jun. 30, 2015USD ($)item$ / shares	Sep. 30, 2014
Interest expense
Interest paid			$ 3,052,000
Convertible senior notes due October 2021
Notes, issued amount	$ 201,300,000
Capped call transactions payments	$ 20,800,000
Interest rate (as a percent)	3.00%			3.00%
Conversion price per share of convertible notes into common stock | $ / shares		$ 35.13	$ 35.13
Convertible notes conversion ratio per 1,000 principal			28.4627
Denominator of the principal amount used in conversion			$ 1,000
Interest expense
Contractual interest expense		$ 1,509,000	3,035,000
Amortization of debt discount		2,178,000	4,204,000
Amortization of debt issuance costs		166,000	340,000
Total interest expense		3,853,000	7,579,000
Interest paid		$ 3,100,000	$ 3,100,000
Convertible senior notes due October 2021 | Conversion of convertible notes into common stock after December 31,2014
Convertible threshold trading days | item			20
Convertible threshold consecutive trading days			30 days
Minimum threshold percentage of stock price trigger			130.00%
Convertible senior notes due October 2021 | Conversion of convertible notes when common share trading price is less than 98% of target ratio
Convertible threshold trading days | item			5
Convertible threshold consecutive trading days			10 days
Denominator of the principal amount for conversion into common stock			$ 1,000
Threshold percentage forcing conversion when less than share price times conversion ratio			98.00%

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - Common Stock - shares	May. 14, 2015	Jan. 01, 2015	Jan. 02, 2014	Jun. 30, 2015	Apr. 27, 2012
Omnibus Incentive Plan 2012
Stock-Based Compensation
Number of shares available for grant under the plan					1,428,571
Number of shares available for future grants that were added to the total number of shares reserved for issuance					6,857
Number of additional shares authorized under the plan	2,000,000	1,444,403	1,309,560
Annual increase in common stock available for grant as a percentage of common stock outstanding				4.00%
Director Incentive Plan 2015
Stock-Based Compensation
Number of shares available for grant under the plan	500,000

Stock-Based Compensation (Det27

Stock-Based Compensation (Details 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Stock-based compensation expense
Total stock-based compensation expense	$ 5,460	$ 3,102	$ 9,381	$ 5,640
Research and Development Expense
Stock-based compensation expense
Total stock-based compensation expense	2,211	1,454	4,025	2,364
General and Administrative Expense
Stock-based compensation expense
Total stock-based compensation expense	$ 3,249	$ 1,648	$ 5,356	$ 3,276

Stock-Based Compensation (Det28

Stock-Based Compensation (Details 3) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Additional disclosure
Stock-based compensation expense	$ 5,460	$ 3,102	$ 9,381	$ 5,640
Employee Stock Option
Additional disclosure
Weighted average period over which unrecognized compensation costs are expected to be recognized			3 years
Shares
Outstanding at the beginning of the period (in shares)			3,726,329
Granted (in shares)			1,942,582
Exercised (in shares)			(150,294)
Cancelled (in shares)			134,334
Outstanding at the end of the period (in shares)	5,384,283		5,384,283
Vested at the end of the period (in shares)			2,129,131
Vested and expected to vest at the end of the period (in shares)	5,042,367		5,042,367
Weighted-average price per share
Outstanding at the beginning of the period (in dollars per share)			$ 18.82
Granted (in dollars per share)			54.91
Exercised (in dollars per share)			22.26
Cancelled (in dollars per share)			37.81
Outstanding at the end of the period (in dollars per share)	$ 31.27		31.27
Vested at the end of the period (in dollars per share)	14.18		14.18
Vested and expected to vest at the end of the period (in dollars per share)	$ 30.08		$ 30.08
Additional disclosure
Weighted average period over which unrecognized compensation costs are expected to be recognized			3 years
Unrecognized compensation costs	$ 81,000		$ 81,000

Stock-Based Compensation (Det29

Stock-Based Compensation (Details 4) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended		12 Months Ended
	Aug. 31, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Additional disclosure
Stock-based compensation expense		$ 5,460	$ 3,102	$ 9,381	$ 5,640
Restricted Stock Units
Shares
Granted (in shares)		50,000
Unvested restricted at the end of the period (in shares)		50,000		50,000
Additional disclosure
Unrecognized compensation costs		$ 2,800		$ 2,800
Weighted average period over which unrecognized compensation costs are expected to be recognized				4 years
Certain employees | Restricted Stock Units
Shares
Granted (in shares)	19,500
Vested (in shares)				0		3,900
Cancelled (in shares)				3,600
Additional disclosure
Unrecognized compensation costs		$ 300		$ 300
Employee Stock Purchase Plan
Additional disclosure
Number of shares available for grant under the plan		275,000		275,000
Shares issued				7,523	5,372
Stock-based compensation expense				$ 100	$ 100
Number of shares remaining available for issuance		249,801		249,801

Common Stock Transactions (Deta

Common Stock Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended		6 Months Ended
	Mar. 31, 2015	Feb. 28, 2014	Jun. 30, 2015	Jun. 30, 2014
Common Stock Transactions
Shares sold	3,755,000	3,200,000
Common stock issue price, in an underwritten public offering (in dollars per share)	$ 51	$ 31.50
Gross proceeds from the sale of common stock in an underwritten public offering	$ 191,500	$ 100,800
Net proceeds from the sale of common stock in an underwritten public offering	$ 179,800	$ 94,200	$ 179,763	$ 94,199

Commitments and Contingencies (

Commitments and Contingencies (Details) $ in Millions	1 Months Ended
	Apr. 30, 2015USD ($)ft²	Jun. 30, 2015USD ($)
Future minimum rental commitments
Remainder of 2015		$ 1.2
2,016		2.3
2,017		$ 1.2
Operating Lease
Commitments and Contingencies
Leased office space (in square feet) | ft²	53,200
Operating Lease | Amendment of Operating Lease
Commitments and Contingencies
Square footage added to existing leased office space | ft²	17,700
Leased office space (in square feet) | ft²	70,900
Period of free rent	1 month
Tenant improvements	$ 0.1