Celgene (CELG) 10-Q 31 Jul 09 2009 Q2 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
	6 Months Ended Jun. 30, 2009	Apr. 29, 2009	Jun. 30, 2008
Document And Entity Information [Abstract]
Entity Registrant Name	CELGENE CORPORATION
Entity Central Index Key	0000816284
Document Type	10-Q
Document Period End Date	2009-06-30
Amendment Flag	false
Amendment Description	N/A
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$29,035,709,107
Entity Common Stock, Shares Outstanding		458,622,488

Consolidated Statements of Oper

Consolidated Statements of Operations (USD $)
In Thousands, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Revenue:
Net product sales	$598,154	$543,165	$1,174,386	$974,539
Collaborative agreements and other revenue	2,354	2,789	4,598	7,557
Royalty revenue	28,158	25,510	54,735	51,965
Total revenue	628,666	571,464	1,233,719	1,034,061
Expenses:
Cost of goods sold (excluding amortization of acquired intangible assets)	50,902	75,194	115,201	119,918
Research and development	218,500	144,861	399,747	301,739
Selling, general and administrative	176,311	176,287	349,752	316,737
Amortization of acquired intangible assets	22,667	35,167	46,292	45,009
Acquired in-process research and development	0	0	0	1,740,000
Total expenses	468,380	431,509	910,992	2,523,403
Operating income (loss)	160,286	139,955	322,727	(1,489,342)
Other income and expense:
Interest and investment income, net	24,072	19,853	41,525	49,603
Equity in (income) losses of affiliated companies	(157)	1,343	615	6,423
Interest expense	527	1,246	991	3,456
Other income, net	5,176	1,697	37,786	2,493
Income (loss) before income taxes	189,164	158,916	400,432	(1,447,125)
Income tax provision	46,329	39,033	94,715	74,080
Net income (loss)	$142,835	$119,883	$305,717	($1,521,205)
Net income (loss) per common share:
Basic	0.31	0.27	0.67	-3.56
Diluted	0.31	0.26	0.65	-3.56
Weighted average shares (in thousands):
Basic	459,586	442,640	459,584	427,451
Diluted	467,082	466,687	467,759	427,451

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Thousands	Jun. 30, 2009	Dec. 31, 2008
Current assets:
Cash and cash equivalents	$866,843	$1,092,386
Marketable securities available for sale	1,631,125	1,129,705
Accounts receivable, net of allowances of $9,678 and $9,391 at June 30, 2009 and December 31, 2008, respectively	353,627	312,243
Inventory	76,839	100,176
Deferred income taxes	22,752	16,415
Other current assets	216,980	190,441
Total current assets	3,168,166	2,841,366
Property, plant and equipment, net	266,645	248,971
Investment in affiliated companies	19,476	18,392
Intangible assets, net	384,934	434,764
Goodwill	577,596	588,822
Other assets	332,451	312,955
Total assets	4,749,268	4,445,270
Current liabilities:
Accounts payable	39,246	53,859
Accrued expenses	279,452	306,120
Income taxes payable	15,489	51,162
Current portion of deferred revenue	1,973	1,419
Other current liabilities	95,210	114,688
Total current liabilities	431,370	527,248
Deferred revenue, net of current portion	3,876	3,127
Non-current income taxes payable	384,563	358,578
Other non-current liabilities	66,691	64,989
Total liabilities	886,500	953,942
Stockholders' Equity:
Preferred stock, $.01 par value per share, 5,000,000 shares authorized; none outstanding at June 30, 2009 and December 31, 2008, respectively	0	0
Common stock, $.01 par value per share, 575,000,000 shares authorized; issued 464,719,591 and 463,274,296 shares at June 30, 2009 and December 31, 2008, respectively	4,647	4,633
Common stock in treasury, at cost; 6,198,012 and 4,144,667 shares at June 30, 2009 and December 31, 2008, respectively	(243,091)	(157,165)
Additional paid-in capital	5,331,128	5,180,397
Accumulated deficit	(1,103,276)	(1,408,993)
Accumulated other comprehensive loss	(126,640)	(127,544)
Total stockholders' equity	3,862,768	3,491,328
Total liabilities and stockholders' equity	$4,749,268	$4,445,270

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands	Jun. 30, 2009	Dec. 31, 2008
Allowances for accounts receivable	$9,678	$9,391
Preferred stock, par value	0.01	0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares outstanding	0	0
Common stock, par value	0.01	0.01
Common stock, shares authorized	575,000,000	575,000,000
Common stock, shares issued	464,719,591	463,274,296
Treasury shares, at cost	6,198,012	4,144,667

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Thousands	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Cash flows from operating activities:
Net income (loss)	$305,717	($1,521,205)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation of long-term assets	19,262	15,622
Amortization of intangible assets	46,527	45,209
Allocation of pre-paid royalties	16,553	0
Provision for accounts receivable allowances	2,620	4,078
Deferred income taxes	(21,200)	(4,804)
Acquired in-process research and development	0	1,740,000
Share-based compensation expense	68,469	47,421
Equity in (income) losses of affiliated companies	615	6,423
Share-based employee benefit plan expense	6,018	5,136
Unrealized change in value of foreign currency forward contracts	(25,943)	936
Realized gain on marketable securities available for sale	(17,171)	(2,239)
Other, net	2,049	724
Change in current assets and liabilities, excluding the effect of acquisition:
Accounts receivable	(36,536)	(63,273)
Inventory	16,822	7,989
Other operating assets	(28,560)	(8,686)
Accounts payable and other operating liabilities	(36,818)	(42,928)
Income tax payable	(7,660)	28,270
Deferred revenue	1,276	(71)
Net cash provided by operating activities	312,040	258,602
Cash flows from investing activities:
Proceeds from sales of marketable securities available for sale	850,274	789,155
Purchases of marketable securities available for sale	(1,334,675)	(252,094)
Payments for acquisition of business, net of cash acquired	0	(746,779)
Capital expenditures	(38,702)	(34,183)
Investment in affiliated companies	(1,700)	(1,339)
Purchases of investment securities	(10,847)	(4,762)
Other	3,333	10,107
Net cash used in investing activities	(532,317)	(239,895)
Cash flows from financing activities:
Payment for treasury shares	(100,000)	0
Net proceeds from exercise of common stock options and warrants	16,569	62,035
Excess tax benefit from share-based compensation arrangements	69,713	34,120
Net cash provided by (used in) financing activities	(13,718)	96,155
Effect of currency rate changes on cash and cash equivalents	8,452	15,533
Net increase (decrease) in cash and cash equivalents	(225,543)	130,395
Cash and cash equivalents at beginning of period	1,092,386	1,218,273
Cash and cash equivalents at end of period	866,843	1,348,668
Supplemental schedule of non-cash investing and financing activity:
Change in net unrealized (gain) loss on marketable securities available for sale	(590)	102,928
Matured shares tendered in connection with stock option exercises	(597)	(1,981)
Conversion of convertible notes	0	196,543
Supplemental disclosure of cash flow information:
Interest paid	0	1,640
Income taxes paid	$52,761	$6,409

Nature of Business and Basis of

Nature of Business and Basis of Presentation
	6 Months Ended Jun. 30, 2009 USD / shares
Nature Of Business And Basis Of Presentation [Abstract]
Nature Of Business And Basis Of Presentation	1. Nature of Business and Basis of Presentation Celgene Corporation and its subsidiaries (collectively Celgene or the Company) is a global biopharmaceutical company primarily engaged in the discovery, development and commercialization of innovative therapies designed to treat cancer and immune-inflammatory diseases. The Companys primary commercial stage products include REVLIMID, THALOMID (inclusive of Thalidomide CelgeneTM and Thalidomide PharmionTM, subsequent to the acquisition of Pharmion Corporation, or Pharmion), VIDAZA and FOCALIN. ALKERAN was licensed from GlaxoSmithKline, or GSK, and sold under the Celgene label through March31, 2009, the conclusion date of the ALKERAN license with GSK. For a period of two years, the Company will continue to earn residual payments based upon GSKs ALKERAN revenues. FOCALIN is sold exclusively to Novartis Pharma AG, or Novartis. The Company also derives revenues from a licensing agreement with Novartis, which entitles it to royalties on FOCALIN XR and the entire RITALIN family of drugs, and sales of bio-therapeutic products and services through the Companys Cellular Therapeutics subsidiary. The accompanying unaudited consolidated financial statements have been prepared from the books and records of the Company pursuant to U.S. generally accepted accounting principles for interim information and the rules and regulations of the Securities and Exchange Commission for interim reporting. Pursuant to such rules and regulations, certain information and footnote disclosures normally included in complete annual financial statements have been condensed or omitted. The consolidated financial statements include the accounts of Celgene Corporation and its subsidiaries. All intercompany transactions and balances have been eliminated. Investments in limited partnerships and interests in which the Company has an equity interest of 50% or less and does not otherwise have a controlling financial interest are accounted for by either the equity or cost method. Certain immaterial reclassifications have been made to the prior period consolidated financial statements in order to conform to the current period presentation. The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December31, 2008, or the 2008 Annual Report on Form 10-K. The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The Company is subject to certain risks and uncertainties related to product development, regulatory approval, market acceptance, scope of patent and proprietary rights, competition, technological change and product liability. Interim results may not be indicative of the results that may be expected for the full year. In the opinion of management, these financial statements include all normal and recurring adjustments considered necessary for a fair presentation of these interim consolidated financial statements.

Summary of Significant Accounti

Summary of Significant Accounting Policies
	6 Months Ended Jun. 30, 2009 USD / shares
Summary Of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies The Companys significant accounting policies are described in Note 1 of the Notes to the Consolidated Financial Statements included in the 2008 Annual Report on Form 10-K. New Accounting Pronouncements: In September2006, the Financial Accounting Standards Board, or FASB, issued Statement of Financial Accounting Standards, or SFAS, No.157, Fair Value Measurements, or SFAS 157, which establishes a framework for measuring fair value and expands disclosures about fair value measurements. The FASB partially deferred the effective date of SFAS 157 for non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a nonrecurring basis to fiscal years beginning after November15, 2008. The Companys adoption of SFAS 157 related to non-financial assets beginning January1, 2009 did not have a material impact on the Companys consolidated financial statements. In December2007, the FASB ratified EITF Issue No.07-1, Accounting for Collaborative Arrangements Related to the Development and Commercialization of Intellectual Property, or EITF 07-1, which provides guidance on how the parties to a collaborative agreement should account for costs incurred and revenue generated on sales to third parties, how sharing payments pursuant to a collaboration agreement should be presented in the income statement and certain related disclosure requirements. EITF 07-1 was effective for the Company beginning January1, 2009 on a retrospective basis and did not have any impact on the Companys consolidated financial statements. In December2007, the FASB issued SFAS No.141R, Business Combinations, or SFAS 141R, which replaces FASB Statement No.141, Business Combinations, and requires an acquirer to recognize the assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date, with limited exceptions. SFAS 141R amended SFAS No.109, Accounting for Income Taxes, or SFAS 109, and FASB Interpretation No., or FIN, 48, Accounting for Uncertainty in Income Taxes an Interpretation of FASB Statement No.109, or FIN 48. Previously, SFAS 109 and FIN 48, respectively, generally required post-acquisition adjustments to a business combination related deferred tax asset valuation allowance and liabilities related to uncertain tax positions to be recorded as an increase or decrease to goodwill. SFAS 141R does not permit this accounting and generally will require any such changes to be recorded in current period income tax expense. Thus, after SFAS 141R is adopted, all changes to valuation allowances and liabilities related to uncertain tax positions from an acquisition (whether the combination was accounted for under SFAS 141 or SFAS 141R) must be recognized in current period income tax expense. SFAS 141R was effective for the Company beginning January1, 2009 and the Company will account for future business combinations in accordance with its provisions. In December2007, the FASB issued SFAS No.160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of ARB No

Acquisition of Pharmion Corpora

Acquisition of Pharmion Corporation
	6 Months Ended Jun. 30, 2009 USD / shares
Acquisition Of Business [Abstract]
Acquisition of Pharmion Corporation	3. Acquisition of Pharmion Corporation On March7, 2008, Celgene acquired all of the outstanding common stock and stock options of Pharmion in a transaction accounted for under the purchase method of accounting for business combinations. Celgene paid a combination of $920.8million in cash and approximately 30.8million shares of Celgene common stock valued at $1.749billion to Pharmion shareholders. The operating results of Pharmion are included in the Companys consolidated financial statements from the date of acquisition. The following table provides unaudited pro forma financial information for the six-month period ended June30, 2008 as if the acquisition of Pharmion had occurred as of the beginning of the period presented. For the six-month period presented, the unaudited pro forma results include the nonrecurring charge for in-process research and development, or IPRD, amortization of acquired intangible assets, elimination of expense and income related to pre-acquisition agreements with Pharmion, reduced interest and investment income attributable to cash paid for the acquisition and the amortization of the inventory step-up to fair value of acquired Pharmion product inventories. The unaudited pro forma results do not reflect any operating efficiencies or potential cost savings that may result from the combined operations of Celgene and Pharmion. Accordingly, these unaudited pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual results of operations of the combined company that would have been achieved had the acquisition occurred at the beginning of the period presented, nor are they intended to represent or be indicative of future results of operations. Six-Month Period Ended June 30, 2008 Total revenue $ 1,086,415 Net loss $ (1,530,660 ) Net loss per common share: basic and diluted $ (3.58 ) Prior to the acquisition, Celgene had licensed exclusive rights relating to the development and commercial use of THALOMID and its distribution system to Pharmion, and also maintained a THALOMID supply agreement with Pharmion. The Company accounted for these arrangements in accordance with EITF Issue No.04-1, Accounting for Preexisting Relationships between the Parties to a Business Combination. The effective settlement of these arrangements resulted in no settlement gain or loss as the contractual terms were deemed to be at market rates due to several factors including, but not limited to, the continued absence of European marketing authorization for THALOMID since the agreements were executed by unrelated entities in December2004, the review of similar recent agreements entered into by pharmaceutical and biotechnology companies containing similar economic terms and the lack of a termination penalty for either party to the agreements. In addition, the Company has valued the reacquired THALOMID-related rights when valuing the developed product rights acquired. Any assets and liabilities that existed between Celgene and Pharmion as of the acquisition date have been eliminated in the accompanying con

Restructuring

Restructuring
	6 Months Ended Jun. 30, 2009 USD / shares
Restructuring [Abstract]
Restructuring	4. Restructuring The March7, 2008 acquisition cost of Pharmion included $58.6million in restructuring liabilities primarily related to the planned exit of certain business activities, involuntary terminations and the relocation of certain Pharmion employees. The remaining balance of these restructuring liabilities totaled $27.6million and $15.9million as of December31, 2008 and June30, 2009, respectively. The following table summarizes changes to the restructuring liabilities during the six-month period ended June30, 2009: Balance Balance Cumulative December 31, 2008 Payments Adjustments June 30, 2009 Payments Severance costs $ 1,654 $ (1,635 ) $ $ 19 $ (17,419 ) Contract termination fees 22,485 (2,859 ) (6,100 )(1) 13,526 (11,525 ) Facility closing costs 2,664 (660 ) 2,004 (3,591 ) Other 834 (459 ) 375 (4,075 ) Total restructuring costs $ 27,637 $ (5,613 ) $ (6,100 ) $ 15,924 $ (36,610 ) (1) In 2009, the Company amended a manufacturing contract on terms other than those that had been expected. The Company expects to finalize the contractual terms of the remaining arrangements being restructured during 2009.

Earnings Per Share

Earnings Per Share (EPS)
	6 Months Ended Jun. 30, 2009 USD / shares
Earnings Per Share Disclosure [Abstract]
Earnings Per Share (EPS)	5. Earnings Per Share (EPS) Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income adjusted to add back the after-tax amount of interest recognized in the period associated with any convertible debt issuance that may be dilutive by the weighted-average number of common shares outstanding during the period increased to include all additional common shares that would have been outstanding as if the outstanding convertible debt was converted into shares of common stock and assuming potentially dilutive common shares, resulting from option exercises, had been issued and any proceeds thereof used to repurchase common stock at the average market price during the period. The assumed proceeds used to repurchase common stock are the sum of the amount to be paid to the Company upon exercise of options, the amount of compensation cost attributed to future services and not yet recognized and, if applicable, the amount of excess income tax benefit that would be credited to paid-in capital upon exercise. As of their maturity date, June1, 2008, substantially all of the Companys convertible notes were converted into shares of common stock. Three-Month Periods Ended Six-Month Periods Ended June 30, June 30, 2009 2008 2009 2008 Net income (loss) $ 142,835 $ 119,883 $ 305,717 $ (1,521,205 ) Interest expense on convertible debt, net of tax 456 Net income (loss)for diluted computation $ 142,835 $ 120,339 $ 305,717 $ (1,521,205 ) Weighted average shares: Basic 459,586 442,640 459,584 427,451 Effect of dilutive securities: Options, restricted stock units, warrants and other incentives 7,496 13,528 8,175 Convertible debt 10,519 Diluted 467,082 466,687 467,759 427,451 Net income (loss)per share: Basic $ 0.31 $ 0.27 $ 0.67 $ (3.56 ) Diluted $ 0.31 $ 0.26 $ 0.65 $ (3.56 ) The total number of potential common shares excluded from the diluted earnings per share computation because their inclusion would have been anti-dilutive was 21,040,000 and 9,778,698 shares for the three-month periods ended June30, 2009 and 2008, respectively. The total number of potential common shares excluded for the six-month periods ended June30, 2009 and 2008 was 19,911,123 and 33,827,167, respectively. All of the potentially dilutive securities for the six-month period ended June30, 2008 were determined to be anti-dilutive as a result of the net loss for the period. Substantially all of the Companys convertible debt had been converted into shares of common stock as of June30, 2008. On May26, 2009, the Company entered int

Comprehensive Income

Comprehensive Income (Loss)
	6 Months Ended Jun. 30, 2009 USD / shares
Comprehensive Income (Loss) [Abstract]
Comprehensive Income (Loss)	6. Comprehensive Income (Loss) The components of comprehensive income (loss)consist of net income (loss), changes in pension liability, changes in net unrealized gains (losses)on marketable securities classified as available-for-sale, net unrealized gains (losses)related to cash flow hedges and changes in foreign currency translation adjustments. Three-Month Periods Ended Six-Month Periods Ended June 30, June 30, 2009 2008 2009 2008 Net income (loss) $ 142,835 $ 119,883 $ 305,717 $ (1,521,205 ) Other comprehensive income (loss): Marketable securities: Net unrealized gains (losses)on marketable securities available for sale, net of tax 5,105 (6,862 ) 6,932 104 Reversal of unrealized gains on Pharmion investment, net of tax (62,806 ) Reclassification adjustment for gains included in net income (loss) (12,204 ) (951 ) (17,171 ) (2,239 ) Total other comprehensive losses related to marketable securities available for sale, net of tax (7,099 ) (7,813 ) (10,239 ) (64,941 ) Net unrealized gains (losses)related to cash flow hedges, net of tax (25,917 ) 26,843 Currency translation adjustments 31,066 2,455 (15,700 ) 28,179 Total other comprehensive income (loss)items (1,950 ) (5,358 ) 904 (36,762 ) Comprehensive income (loss) $ 140,885 $ 114,525 $ 306,621 $ (1,557,967 )

Financial Instruments and Fair

Financial Instruments and Fair Value Measurement
	6 Months Ended Jun. 30, 2009 USD / shares
Financial Instruments And Fair Value Measurement [Abstract]
Financial Instruments and Fair Value Measurement	7. Financial Instruments and Fair Value Measurement The table below presents information about assets and liabilities that are measured at fair value on a recurring basis as of June30, 2009 and the valuation techniques the Company utilized to determine such fair value. In general, fair values determined based on Level 1 inputs utilize quoted prices (unadjusted)in active markets for identical assets or liabilities. The Companys Level 1 assets consist of marketable equity securities. Fair values determined based on Level 2 inputs utilize observable quoted prices for similar assets and liabilities in active markets and observable quoted prices for identical or similar assets in markets that are not very active. The Companys Level 2 assets consist primarily of U.S. Treasury fixed rate securities, U.S. government-sponsored agency fixed rate securities, U.S. government-sponsored agency mortgage-backed fixed rate obligations, Federal Deposit Insurance Corporation, or FDIC, guaranteed fixed rate corporate debt, non-U.S. government issued fixed rate securities, non-U.S. government guaranteed fixed rate securities, forward currency contracts and warrants for the purchase of equity securities. Fair values determined based on Level 3 inputs utilize unobservable inputs and include valuations of assets or liabilities for which there is little, if any, market activity. The Companys Level 3 securities at June30, 2009 consist of warrants for the purchase of equity securities in a non-publicly traded company in which the Company has invested and which is party to a collaboration and option agreement with the Company. Quoted Price in Significant Significant Active Markets for Other Observable Unobservable Balance at Identical Assets Inputs Inputs June 30, 2009 (Level 1) (Level 2) (Level 3) Available-for-sale securities $ 1,631,125 $ 510 $ 1,630,615 $ Warrants 830 830 Cash equivalents 15,687 15,687 Forward currency contracts (3,780 ) (3,780 ) $ 1,643,862 $ 510 $ 1,642,522 $ 830 Quoted Price in Significant Significant Active Markets for Other Observable Unobservable Balance at Identical Assets Inputs Inputs December 31, 2008 (Level 1) (Level 2) (Level 3) Available-for-sale securities $ 1,129,705 $ 407 $ 1,118,244 $ 11,054 Forward currency contracts (57,486 ) (57,486 ) $ 1,072,219 $ 407 $ 1,060,758 $ 11,054 The following table is a roll-forward of the fair value of Level 3 securities (significant unobservable inputs): Six-Month Periods Ended June 30, 2009 2008 Balance at beginning of period $ 11,054 $ 37,038 Net gains (losses) (realized and unrealized) 2,436

Derivative Instruments And Hedg

Derivative Instruments And Hedging Activities
	6 Months Ended Jun. 30, 2009 USD / shares
Derivative Instruments And Hedging Activities [Abstract]
Derivative Instruments and Hedging Activities	8. Derivative Instruments and Hedging Activities Foreign Currency Forward Contracts: Effective January1, 2009, the Company adopted SFAS 161 and enhanced its disclosures for derivative instruments and hedging activities by providing additional information about its objectives for using derivative instruments, the level of derivative activity the Company engages in, as well as how derivative instruments and related hedged items affect its financial position and performance. Since SFAS 161 requires only additional disclosures concerning derivatives and hedging activities, the adoption of SFAS 161 did not affect the presentation of the Companys financial position or results of operations. The Company uses foreign currency forward contracts to hedge specific forecasted transactions denominated in foreign currencies and to reduce exposures to foreign currency fluctuations of certain assets and liabilities denominated in foreign currencies. The Company enters into foreign currency forward contracts to protect against changes in anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates, primarily associated with non-functional currency denominated revenues and expenses of foreign subsidiaries. The foreign currency forward hedging contracts outstanding at June30, 2009 and December31, 2008 had settlement dates within 24months. These foreign currency forward contracts are designated as cash flow hedges under SFAS No.133, Accounting for Derivative Instruments and Hedging Activities, as amended, or SFAS 133, and, accordingly, to the extent effective, any unrealized gains or losses on them are reported in other comprehensive income (loss), or OCI, and reclassified to operations in the same periods during which the underlying hedged transactions affect operations. Any ineffectiveness on these foreign currency forward contracts is reported in other income, net. Foreign currency forward contracts entered into to hedge forecasted revenue and expenses were as follows: Notional Amount Foreign Currency June 30, 2009 December 31, 2008 Euro $ 688,650 $ 704,198 Yen 15,311 Total $ 703,961 $ 704,198 The notional settlement amounts of the foreign currency forward contracts outstanding as of June30, 2009 and December31, 2008 were $704.0million and $704.2million, respectively. The Company considers the impact of its own and the counterparties credit risk on the fair value of the contracts as well as the ability of each party to execute its obligations under the contract. As of June30, 2009 and December31, 2008, credit risk did not materially change the fair value of the Companys foreign currency forward contracts. The Company recognized reductions in net product sales for the settlement of certain effective cash flow hedge instruments of $5.8million and $6.6million for the three- and six-month periods ended June30, 2009, respectively, and no reductions for each of the three- and six-month periods ended June30, 2008. These settlements were recorded in the same period as the related forecasted sales occu

Cash, Cash Equivalents and Mark

Cash, Cash Equivalents and Marketable Securities Available for Sale
	6 Months Ended Jun. 30, 2009 USD / shares
Cash, Cash Equivalents And Marketable Securities Available-For-Sale [Abstract]
Cash, Cash Equivalents and Marketable Securities Available-for-Sale	9. Cash, Cash Equivalents and Marketable Securities Available-for-Sale Money market funds of $456.7million and $691.0million at June30, 2009 and December31, 2008, respectively, were recorded at cost, which approximates fair value and are included in cash and cash equivalents. The amortized cost, gross unrealized holding gains, gross unrealized holding losses and estimated fair value of available-for-sale securities by major security type and class of security at June 30, 2009 and December31, 2008 were as follows: Gross Gross Estimated Amortized Unrealized Unrealized Fair June 30, 2009 Cost Gain Loss Value U.S. Treasury securities $ 377,853 $ 1,157 $ (673 ) $ 378,337 U.S. government-sponsored agency securities 486,652 5,422 (224 ) 491,850 U.S. government-sponsored agency MBS 467,595 6,177 (1,039 ) 472,733 FDIC guaranteed corporate debt 213,697 1,032 (230 ) 214,499 Non-U.S. government issued securities 12,462 12,462 Non-U.S. government guaranteed securities 61,045 109 (420 ) 60,734 Marketable equity securities 407 103 510 Total available-for-sale marketable securities $ 1,619,711 $ 14,000 $ (2,586 ) $ 1,631,125 Gross Gross Estimated Amortized Unrealized Unrealized Fair December 31, 2008 Cost Gain Loss Value U.S. Treasury securities $ 263,541 $ 8,394 $ $ 271,935 U.S. government-sponsored agency securities 571,072 16,985 (212 ) 587,845 U.S. government-sponsored agency MBS 229,847 3,241 (429 ) 232,659 FDIC guaranteed corporate debt 25,546 265 (6 ) 25,805 Private cash fund shares 11,054 11,054 Marketable equity securities 407 407 Total available-for-sale marketable securities $ 1,101,467 $ 28,885 $ (647 ) $ 1,129,705 U.S. government-sponsored agency securities include general unsecured obligations of the issuing agency. U.S. government-sponsored mortgage-backed securities, or MBS, include fixed rate asset-backed securities issued by the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association. FDIC guaranteed corporate debt includes obligations of bank holding companies that meet certain criteria set forth under the Temporary Liquidity Guaranty Program, or TLGP, and are unconditionally guaranteed by the FDIC. Non-U.S. government issued securities consist of direct obligations of highly rated governments of nations other then the United States. Non-U.S. government guaranteed securities consist of obligations of agencies and other entities that are explicitly guaranteed by highly rated governments of nations other then th

Inventory

Inventory
	6 Months Ended Jun. 30, 2009 USD / shares
Inventory [Abstract]
Inventory	10. Inventory A summary of inventories by major category at June30, 2009 and December31, 2008 follows: June 30, December 31, 2009 2008 Raw materials $ 13,287 $ 16,910 Work in process 41,390 33,170 Finished goods 22,162 50,096 Total $ 76,839 $ 100,176

Investment in Affiliated Compan

Investment in Affiliated Companies
	6 Months Ended Jun. 30, 2009 USD / shares
Investment In Affiliated Companies [Abstract]
Investment in Affiliated Companies	11. Investment in Affiliated Companies A summary of the Companys equity investment in affiliated companies follows: June 30, December 31, Investment in Affiliated Companies 2009 2008 Investment in affiliated companies(1) $ 16,606 $ 14,862 Excess of investment over share of equity (2) 2,870 3,530 Investment in affiliated companies $ 19,476 $ 18,392 Three-Month Periods Ended Six-Month Periods Ended June 30, June 30, Equity in (Income) Losses of Affiliated Companies 2009 2008 2009 2008 Affiliated companies (income)losses (1) $ (157 ) $ 1,343 $ 615 $ 6,423 (1) The Company records its interest and share of losses based on its ownership percentage. (2) Consists of goodwill. Additional equity investments totaling $1.7million were made during the six-month period ended June30, 2009. The six-month period ended June30, 2008 included other-than-temporary impairment losses of $4.4million. These impairment losses were based on an evaluation of several factors, including a decrease in fair value of the equity investment below its cost.

Intangible Assets and Goodwill

Intangible Assets and Goodwill
	6 Months Ended Jun. 30, 2009 USD / shares
Intangible Assets and Goodwill [Abstract]
Intangible Assets and Goodwill	12. Intangible Assets and Goodwill Intangible Assets: The Companys intangible assets consist of developed product rights from the Pharmion acquisition, contract-based licenses, technology and an acquired workforce. Remaining amortization periods related to these categories range from one to eleven years. A summary of intangible assets by category follows: Gross Intangible Weighted Carrying Accumulated Assets, Average June 30, 2009 Value Amortization Net Life (Years) Acquired developed product rights $ 530,000 $ (148,622 ) $ 381,378 6.5 License 4,250 (1,075 ) 3,175 13.8 Technology 290 (69 ) 221 12.6 Acquired workforce 331 (171 ) 160 5.0 Total $ 534,871 $ (149,937 ) $ 384,934 6.5 Gross Intangible Weighted Carrying Accumulated Assets, Average December 31, 2008 Value Amortization Net Life (Years) Acquired developed product rights $ 533,339 $ (102,331 ) $ 431,008 6.5 License 4,250 (922 ) 3,328 13.8 Technology 290 (59 ) 231 12.6 Acquired workforce 337 (140 ) 197 5.0 Total $ 538,216 $ (103,452 ) $ 434,764 6.5 The decrease in gross carrying value of intangibles at June30, 2009 compared to December31, 2008 was primarily due to elimination of the $3.3million intangible related to RIMIFON, which was obtained in the Pharmion acquisition and sold in March of 2009. Amortization of intangible assets was $22.8million and $35.3million for the three-month periods ended June30, 2009 and 2008, respectively. Amortization for the six-month periods ended June30, 2009 and 2008 was $46.5million and $45.2million, respectively. Amortization expense for the six-month period ended June30, 2008 included amortization of the intangible assets related to the Pharmion acquisition only for the period subsequent to the March7, 2008 acquisition date. Assuming no changes in the gross carrying amount of intangible assets, the amortization of intangible assets for the next five years is estimated to be approximately $83.8million for the year ending December31, 2009 and approximately $64.3million for each of the years ending December 31, 2010 through 2013. Goodwill: At June30, 2009, the Companys goodwill related to the March7, 2008 acquisition of Pharmion and the October21, 2004 acquisition of Penn T Limited. The goodwill related to the Pharmion acquisition reflects the allocation of the Pharmion purchase price. The change in carrying value of goodwill is summarized as follows: Balance at December31, 2008 $ 588,822 Tax benefit on the exercise of Pharmion converted stock options (848 ) Adjustments to Pharmion assets acquired (444 ) Adjustments to Pharmion restructuring liabilities (6,100 ) For

Share Based Compensation

Share Based Compensation
	6 Months Ended Jun. 30, 2009 USD / shares
Share Based Compensation Disclosure [Abstract]
Share-Based Compensation	13. Share-Based Compensation The following table summarizes the components of share-based compensation expense in the consolidated statements of operations for the three- and six-month periods ended June30, 2009 and 2008: Three-Month Periods Ended Six-Month Periods Ended June 30, June 30, 2009 2008 2009 2008 Cost of good sold $ 1,001 $ 632 $ 1,973 $ 1,160 Research and development 14,965 11,685 29,663 21,300 Selling, general and administrative 19,363 13,828 36,217 24,961 Total share-based compensation expense $ 35,329 $ 26,145 $ 67,853 $ 47,421 Share-based compensation cost included in inventory was $1.4million at June30, 2009 and $0.8 million at December31, 2008. Stock Options: The weighted-average grant date fair value of the stock options issued during the three-month periods ended June30, 2009 and 2008 was $17.83 per share and $25.97 per share, respectively. The weighted-average grant date fair value of the stock options issued during the six-month periods ended June30, 2009 and 2008 was $20.78 per share and $24.18 per share, respectively. There have been no significant changes to the assumptions used to estimate the fair value of options granted during the six-month period ended June30, 2009 as compared to those disclosed for the year ended December31, 2008 in Note 15 to the Consolidated Financial Statements included in the Companys 2008 Annual Report on Form 10-K. Stock option transactions for the six-month period ended June30, 2009 under all plans are as follows: Weighted Weighted Average Average Aggregate Exercise Remaining Intrinsic Price Contractual Value Options Per Option Term (Years) (In Thousands) Outstanding at December31, 2008 33,805,610 $ 40.39 6.5 $ 617,873 Changes during the period: Granted 4,533,806 44.92 Exercised (1,433,410 ) 12.64 Forfeited (632,617 ) 58.59 Expired (66,698 ) 59.70 Outstanding at June30, 2009 36,206,691 $ 41.72 6.6 $ 440,490 Vested at June30, 2009 or expected to vest in the future 35,604,005 $ 41.48 $ 439,352 Vested at June30, 2009 19,526,973 $ 29.14 $ 407,384 The total fair value of shares vested during the six-month periods ended June30, 2009 and 2008 were $16.8million and $13.2million, respectively. The total intrinsic value of stock options exercised during the six-month periods ended June30, 2009 and 2008 was $48.7million and $194.8million, respectively. The Company primarily utilizes newly issued shares to satisfy the exercise of stock options. As of June30, 2009, there was $304.9million of unrecognized compensation ex

Income Taxes

Income Taxes
	6 Months Ended Jun. 30, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	14. Income Taxes The Company periodically evaluates the likelihood of the realization of its deferred tax assets and reduces the carrying amount of those deferred tax assets by a valuation allowance to the extent it believes a portion will not be realized. The Company considers many factors when assessing the likelihood of future realization of its deferred tax assets, including recent cumulative earnings experience by taxing jurisdiction, expectations of future taxable income, the carryforward periods available to it for tax reporting purposes and other relevant factors. Significant judgment is required in making this assessment. During the first quarter of 2009, the Company effectively settled an examination with the Internal Revenue Service, or IRS, for the years ended December31, 2004 and 2005. The Companys U.S. federal income tax returns have now been audited by the IRS through the year ended December31, 2005. The Company is also subject to audits by various state and foreign taxing authorities, including, but not limited to, most U.S. states and major European and Asian countries where the Company has operations. The Company regularly reevaluates its tax positions and the associated interest and potential penalties, if applicable, resulting from audits of federal, state and foreign income tax filings, as well as changes in tax law (including regulations, administrative pronouncements, judicial precedents, etc.) that would reduce the technical merits of the position to below more likely than not. The Company believes that its accruals for tax liabilities are adequate for all open years. Many factors are considered in making these evaluations, including past history, recent interpretations of tax law and the specifics of each matter. Because tax regulations are subject to interpretation and tax litigation is inherently uncertain, these evaluations can involve a series of complex judgments about future events and can rely heavily on estimates and assumptions. The Company applies a variety of methodologies in making these estimates and assumptions which include studies performed by independent economists, advice from industry and subject matter experts, evaluation of public actions taken by the IRS and other taxing authorities, as well as the Companys industry experience. These evaluations are based on estimates and assumptions that have been deemed reasonable by management. However, if managements estimates are not representative of actual outcomes, the Companys results of operations could be materially impacted. Unrecognized tax benefits, generally represented by liabilities on the consolidated balance sheet and all subject to tax examinations, arise when the estimated benefit recorded in the financial statements differs from the amounts taken or expected to be taken in a tax return because of the uncertainties described above. These unrecognized tax benefits relate primarily to issues common among multinational corporations. Virtually all of these unrecognized tax benefits, if recognized, would impact the effective income tax rate. The Company accounts for interest and potential penalties related to uncertain tax posi

Collaboration Agreements

Collaboration Agreements
	6 Months Ended Jun. 30, 2009 USD / shares
Collaboration Agreements [Abstract]
Collaboration Agreements	15. Collaboration Agreements Novartis Pharma AG: The Company entered into an agreement with Novartis in which the Company granted to Novartis an exclusive worldwide license (excluding Canada) to develop and market FOCALIN (d-methylphenidate, or d MPH) and FOCALIN XR, the long-acting drug formulation. The Company has retained the exclusive commercial rights to FOCALIN and FOCALIN XR for oncology-related disorders, such as chronic fatigue associated with chemotherapy. The Company also granted Novartis rights to all of its related intellectual property and patents, including new formulations of the currently marketed RITALIN LA. The Company also sells FOCALIN to Novartis and receives royalties on sales of all of Novartis FOCALIN XR and RITALIN family of ADHD-related products. Array BioPharma Inc.: The Company has a research collaboration agreement with Array BioPharma Inc., or Array, focused on the discovery, development and commercialization of novel therapeutics in cancer and inflammation. As part of this agreement, the Company made an upfront payment in September2007 to Array of $40.0million, which was recorded as research and development expense, in return for an option to receive exclusive worldwide rights for compounds developed against two of the four research targets defined in the agreement, except for Arrays limited U.S. co-promotional rights. In June2009, the Company made an additional upfront payment of $4.5 million to expand the research targets defined in the agreement, which was recorded as research and development expense. Array will be responsible for all discovery and clinical development through Phase I or Phase IIa and be entitled to receive, for each compound, potential milestone payments of approximately $200.0million, if certain discovery, development and regulatory milestones are achieved and $300.0million if certain commercial milestones are achieved, as well as royalties on net sales. The Companys option will terminate upon the earlier of either a termination of the agreement, the date the Company has exercised its options for compounds developed against two of the four research targets defined in the agreement, or September21, 2012, unless the term is extended. The Company may unilaterally extend the option term for two additional one-year terms until September21, 2014 and the parties may mutually extend the term for two additional one-year terms until September21, 2016. Upon exercise of a Company option, the agreement will continue until the Company has satisfied all royalty payment obligations to Array. Upon the expiration of the agreement, Array will grant the Company a fully paid-up, royalty-free license to use certain intellectual properties of Array to market and sell the compounds and products developed under the agreement. The agreement may expire on a product-by-product and country-by-country basis as the Company satisfies its royalty payment obligation with respect to each product in each country. Prior to its expiration as described above, the agreement may be terminated by: (i) the Company at its sole discretion, or (ii) either party if the other party (x)

Commitments and Contingencies

Commitments and Contingencies
	6 Months Ended Jun. 30, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	16. Commitments and contingencies Collaboration Arrangements: The Company has entered into certain research and development collaboration agreements with third parties that include the funding of certain development, manufacturing and commercialization efforts with the potential for future milestone and royalty payments upon the achievement of pre-established developmental, regulatory and/or commercial targets. The Companys obligation to fund these efforts is contingent upon continued involvement in the programs and/or the lack of any adverse events which could cause the discontinuance of the programs. Due to the nature of these arrangements, the future potential payments are inherently uncertain, and accordingly no amounts have been recorded in the Companys consolidated balance sheets at June30, 2009 or December31, 2008. Contingencies: The Company believes it maintains insurance coverage adequate for its current needs. The Companys operations are subject to environmental laws and regulations, which impose limitations on the discharge of pollutants into the air and water and establish standards for the treatment, storage and disposal of solid and hazardous wastes. The Company reviews the effects of such laws and regulations on its operations and modifies its operations as appropriate. The Company believes it is in substantial compliance with all applicable environmental laws and regulations.

Subsequent Event

Subsequent Event
	6 Months Ended Jun. 30, 2009 USD / shares
Subsequent Event [Abstract]
Subsequent Event	17. Subsequent Event The Companys management has evaluated its subsequent events for disclosure in these interim consolidated financial statements filed on Form 10-Q through July31, 2009, the date on which the Financial Statements were issued, and has identified the following event. On July16, 2009, the Company and PTC entered into a pre-negotiated collaboration and license agreement under which PTC is eligible to receive quarterly research fees, as defined in the agreement, and is entitled to receive potential milestone payments of approximately $129.0million if certain development, regulatory and sales-based milestones are achieved. PTC will also receive tiered royalties on worldwide net sales. Under the agreement, the Company may transfer certain research and development activities from PTC to the Company and upon such transfer the Company will no longer fund such quarterly research fees to PTC. The agreement will continue until the Company has satisfied all royalty payment obligations to PTC. Upon the Companys full satisfaction of its royalty payment obligations to PTC under the agreement, the license granted to the Company by PTC under the agreement will become a non-exclusive, fully paid-up, sub-licensable, royalty-free license to use certain intellectual properties of PTC to market and sell the products developed under the agreement. The agreement may expire on a product-by-product and country-by-country basis as the Company satisfies its royalty payment obligation with respect to each product in each country. Prior to its expiration as described above, the agreement may be terminated by: (i) the Company at its sole discretion following the first anniversary of the agreement, or (ii) either party if the other party (x) materially breaches any of its material obligations under the agreement, or (y) files for bankruptcy. If the agreement is terminated by the Company at its sole discretion or by PTC for a material breach by the Company, then all licenses granted to the Company under the agreement will terminate. If PTC materially breaches any of its obligations under the agreement, the Company can either terminate the agreement, in which case all licenses and rights granted under the agreement are terminated, or elect to continue the agreement, in which case all milestone obligations cease and future royalties payable by the Company under the agreement will be reduced by between 50% and 70%.