Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 21, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | VERTEX PHARMACEUTICALS INC / MA | |
Entity Central Index Key | 875,320 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 248,033,389 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues: | ||||
Product revenues, net | $ 409,689 | $ 302,511 | $ 1,229,750 | $ 593,774 |
Royalty revenues | 3,835 | 5,759 | 12,713 | 17,628 |
Collaborative revenues | 259 | 1,546 | 1,008 | 2,999 |
Total revenues | 413,783 | 309,816 | 1,243,471 | 614,401 |
Costs and expenses: | ||||
Cost of product revenues | 53,222 | 30,269 | 147,165 | 55,059 |
Royalty expenses | 855 | 1,691 | 2,813 | 6,068 |
Research and development expenses | 272,370 | 246,284 | 799,238 | 685,741 |
Sales, general and administrative expenses | 106,055 | 99,772 | 322,921 | 280,026 |
Restructuring expenses, net | 8 | 1,826 | 1,038 | 682 |
Total costs and expenses | 432,510 | 379,842 | 1,273,175 | 1,027,576 |
Loss from operations | (18,727) | (70,026) | (29,704) | (413,175) |
Interest expense, net | (20,140) | (21,134) | (60,993) | (63,552) |
Other (expenses) income, net | (167) | (1,326) | 3,025 | (5,025) |
Loss before provision for income taxes | (39,034) | (92,486) | (87,672) | (481,752) |
Provision for income taxes | 503 | 1,330 | 24,118 | 31,760 |
Net loss | (39,537) | (93,816) | (111,790) | (513,512) |
Loss (Income) attributable to noncontrolling interest | 696 | (1,333) | (33,207) | 30,909 |
Net loss attributable to Vertex | $ (38,841) | $ (95,149) | $ (144,997) | $ (482,603) |
Net loss: | ||||
Basic (usd per share) | $ (0.16) | $ (0.39) | $ (0.59) | $ (2) |
Diluted (usd per share) | $ (0.16) | $ (0.39) | $ (0.59) | $ (2) |
Shares used in per share calculations: | ||||
Basic (in shares) | 244,920 | 241,969 | 244,529 | 240,749 |
Diluted (in shares) | 244,920 | 241,969 | 244,529 | 240,749 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||||
Net loss | $ (39,537) | $ (93,816) | $ (111,790) | $ (513,512) |
Changes in other comprehensive loss: | ||||
Unrealized holding gains (losses) on marketable securities | (96) | 56 | 104 | 186 |
Unrealized gains (losses) on foreign currency forward contracts, net of tax | 2,149 | 4,546 | 1,936 | 572 |
Foreign currency translation adjustment | (2,508) | (1,384) | (7,709) | (164) |
Total changes in other comprehensive loss | (455) | 3,218 | (5,669) | 594 |
Comprehensive loss | (39,992) | (90,598) | (117,459) | (512,918) |
Comprehensive (income) loss attributable to noncontrolling interest | 696 | (1,333) | (33,207) | 30,909 |
Comprehensive loss attributable to Vertex | $ (39,296) | $ (91,931) | $ (150,666) | $ (482,009) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 719,692 | $ 714,768 |
Marketable securities, available for sale | 408,749 | 327,694 |
Restricted cash and cash equivalents (VIE) | 58,420 | 78,910 |
Accounts receivable, net | 182,229 | 173,838 |
Inventories | 71,799 | 57,207 |
Prepaid expenses and other current assets | 61,012 | 54,736 |
Total current assets | 1,501,901 | 1,407,153 |
Property and equipment, net | 687,613 | 697,715 |
Intangible assets | 284,340 | 284,340 |
Goodwill | 50,384 | 50,384 |
Cost method investments | 53,314 | 0 |
Notes receivable | 0 | 30,000 |
Restricted cash | 22,087 | 22,083 |
Other assets | 10,002 | 6,912 |
Total assets | 2,609,641 | 2,498,587 |
Current liabilities: | ||
Accounts payable | 50,914 | 74,942 |
Accrued expenses | 292,015 | 305,820 |
Deferred revenues, current portion | 9,247 | 16,296 |
Accrued restructuring expenses, current portion | 3,923 | 7,894 |
Capital lease obligations, current portion | 17,772 | 15,545 |
Senior secured term loan, current portion | 297,751 | 71,296 |
Other liabilities, current portion | 51,219 | 14,374 |
Total current liabilities | 722,841 | 506,167 |
Deferred revenues, excluding current portion | 6,559 | 9,714 |
Accrued restructuring expenses, excluding current portion | 3,314 | 7,464 |
Capital lease obligations, excluding current portion | 31,719 | 42,923 |
Deferred tax liability | 133,270 | 110,439 |
Construction financing lease obligation, excluding current portion | 473,073 | 472,611 |
Senior secured term loan, net of current portion and discount | 0 | 223,863 |
Other liabilities, excluding current portion | 30,524 | 31,778 |
Total liabilities | 1,401,300 | 1,404,959 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding at September 30, 2016 and December 31, 2015 | 0 | 0 |
Common stock, $0.01 par value; 500,000,000 and 500,000,000 shares authorized at September 30, 2016 and December 31, 2015, respectively; 248,028,962 and 246,306,818 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively | 2,446 | 2,427 |
Additional paid-in capital | 6,429,726 | 6,197,500 |
Accumulated other comprehensive (loss) income | (3,845) | 1,824 |
Accumulated deficit | (5,406,781) | (5,261,784) |
Total Vertex shareholders' equity | 1,021,546 | 939,967 |
Noncontrolling interest | 186,795 | 153,661 |
Total shareholders’ equity | 1,208,341 | 1,093,628 |
Total liabilities and shareholders’ equity | $ 2,609,641 | $ 2,498,587 |
Condensed Consolidated Balance5
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 248,028,962 | 246,306,818 |
Common stock, shares outstanding | 248,028,962 | 246,306,818 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Shareholders' Equity and Noncontrolling Interest (unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Total Vertex Shareholders’ Equity | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Noncontrolling Interest |
Balance (shares) at Dec. 31, 2014 | 241,764 | ||||||
Balance at Dec. 31, 2014 | $ 1,096,183 | $ 1,075,006 | $ 2,385 | $ 5,777,154 | $ 917 | $ (4,705,450) | $ 21,177 |
Increase (Decrease) in Stockholders' Equity | |||||||
Other comprehensive loss, net of tax | 594 | 594 | 594 | ||||
Net loss | (513,512) | (482,603) | (482,603) | (30,909) | |||
Issuance of common stock under benefit plans (shares) | 3,882 | ||||||
Issuance of common stock under benefit plans | 139,453 | 139,453 | $ 34 | 139,419 | 0 | ||
Stock-based compensation expense | 189,697 | 189,697 | 189,697 | 0 | |||
Noncontrolling interest upon consolidation | 164,317 | 164,317 | |||||
Balance (shares) at Sep. 30, 2015 | 245,646 | ||||||
Balance at Sep. 30, 2015 | 1,076,732 | 922,147 | $ 2,419 | 6,106,270 | 1,511 | (5,188,053) | 154,585 |
Balance (shares) at Dec. 31, 2015 | 246,307 | ||||||
Balance at Dec. 31, 2015 | 1,093,628 | 939,967 | $ 2,427 | 6,197,500 | 1,824 | (5,261,784) | 153,661 |
Increase (Decrease) in Stockholders' Equity | |||||||
Other comprehensive loss, net of tax | (5,669) | (5,669) | (5,669) | ||||
Net loss | (111,790) | (144,997) | (144,997) | 33,207 | |||
Issuance of common stock under benefit plans (shares) | 1,722 | ||||||
Issuance of common stock under benefit plans | 50,894 | 50,894 | $ 19 | 50,875 | 0 | ||
Stock-based compensation expense | 181,278 | 181,351 | 181,351 | (73) | |||
Balance (shares) at Sep. 30, 2016 | 248,029 | ||||||
Balance at Sep. 30, 2016 | $ 1,208,341 | $ 1,021,546 | $ 2,446 | $ 6,429,726 | $ (3,845) | $ (5,406,781) | $ 186,795 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (111,790) | $ (513,512) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Stock-based compensation expense | 178,623 | 186,379 |
Depreciation and amortization expense | 45,947 | 46,596 |
Deferred income taxes | 23,544 | 7,793 |
Other non-cash items, net | (904) | (2,876) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (9,760) | (88,735) |
Inventories | (11,536) | (16,127) |
Prepaid expenses and other assets | (8,979) | (23,737) |
Accounts payable | (21,532) | 6,283 |
Accrued expenses and other liabilities | 26,121 | 45,163 |
Accrued restructuring expense | (8,151) | (28,051) |
Deferred revenues | (10,204) | (13,751) |
Net cash provided by (used in) operating activities | 91,379 | (394,575) |
Cash flows from investing activities: | ||
Purchases of marketable securities | (616,625) | (292,135) |
Maturities of marketable securities | 535,379 | 804,588 |
Expenditures for property and equipment | (41,775) | (32,775) |
Decrease in restricted cash and cash equivalents (VIE) | 20,490 | 14,830 |
Investments in other entities | (20,000) | 0 |
Investment in CRISPR Series B preferred stock | (3,075) | 0 |
(Increase) decrease in other assets | (90) | (982) |
Increase in restricted cash and cash equivalents | (3) | (21,980) |
Payment for acquisition of variable interest entity | 0 | (80,000) |
Net cash (used in) provided by investing activities | (125,699) | 391,546 |
Cash flows from financing activities: | ||
Issuances of common stock under benefit plans | 51,165 | 139,689 |
Payments on capital lease obligations | (13,330) | (16,515) |
Payments on construction financing lease obligation | (356) | (281) |
Proceeds from capital lease financing | 2,030 | 13,386 |
Net cash provided by financing activities | 39,509 | 136,279 |
Effect of changes in exchange rates on cash | (265) | (2,259) |
Net increase in cash and cash equivalents | 4,924 | 130,991 |
Cash and cash equivalents—beginning of period | 714,768 | 625,259 |
Cash and cash equivalents—end of period | 719,692 | 756,250 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 64,662 | 64,231 |
Cash received from (paid for) income taxes | 1,617 | (1,261) |
Capitalization of costs related to construction financing lease obligation | 824 | 0 |
Issuances of common stock exercises from employee benefit plans receivable | $ 19 | $ (236) |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Policies | Basis of Presentation and Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared by Vertex Pharmaceuticals Incorporated ("Vertex" or the "Company") in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The condensed consolidated financial statements reflect the operations of (i) the Company, (ii) its wholly-owned subsidiaries and (iii) consolidated variable interest entities (VIEs). All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. 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 financial position and results of operations for the interim periods ended September 30, 2016 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 for the year ended December 31, 2015 , which are contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 that was filed with the Securities and Exchange Commission (the “SEC”) on February 16, 2016 (the " 2015 Annual Report on Form 10-K"). The Company has reclassified certain amounts in the condensed consolidated balance sheets for the period ended December 31, 2015 between Accounts receivables, net and Prepaid expenses and other current assets to conform to the current year presentation. Use of Estimates and Summary of Significant Accounting Policies The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. Significant estimates in these condensed consolidated financial statements have been made in connection with the calculation of revenues, inventories, research and development expenses, stock-based compensation expense, restructuring expense, the fair value of intangible assets, goodwill, contingent consideration, noncontrolling interest, the consolidation of VIEs, leases, the fair value of cash flow hedges and the provision for or benefit from income taxes. The Company bases its estimates on historical experience and various other assumptions, including in certain circumstances future projections that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known. The Company's significant accounting policies are described in Note A, "Nature of Business and Accounting Policies," in the 2015 Annual Report on Form 10-K. Recent Accounting Pronouncements In 2014, the Financial Accounting Standards Board (“FASB”) issued amended guidance applicable to revenue recognition that will be effective for the year ending December 31, 2018. Early adoption is permitted for the year-ending December 31, 2017. The new guidance applies a more principle based approach to recognizing revenue. The new guidance must be adopted using either a full retrospective approach for all periods presented or a modified retrospective approach. The Company is in the process of evaluating the new guidance and determining the expected effect on its consolidated financial statements. In 2016, the FASB issued amended guidance applicable to leases that will be effective for the year ending December 31, 2019. Early adoption is permitted. This update requires an entity to recognize assets and liabilities for leases with lease terms of more than 12 months on the balance sheet. The Company is in the process of evaluating the new guidance and determining the expected effect on its consolidated financial statements. In 2016, the FASB issued amended guidance applicable to share-based compensation to employees that will be effective for the year ending December 31, 2017. Early adoption is permitted. This update simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company is in the process of evaluating the new guidance and determining the expected effect on its consolidated financial statements. In 2016, the FASB issued amended guidance for the classification of certain cash receipts and cash payments on the statement of cash flows to reduce existing diversity in practice. The new accounting guidance is effective for the year ending December 31, 2017. Early adoption is permitted. The Company is in the process of evaluating the new guidance and determining the expected effect on its consolidated financial statements. For a discussion of other recent accounting pronouncements please refer to Note A, “Nature of Business and Accounting Policies—Recent Accounting Pronouncements,” in the 2015 Annual Report on Form 10-K. The Company did not adopt any new accounting pronouncements during the nine months ended September 30, 2016 that had a material effect on its condensed consolidated financial statements. |
Product Revenues, Net
Product Revenues, Net | 9 Months Ended |
Sep. 30, 2016 | |
Product Revenues [Abstract] | |
Product Revenues, Net | Product Revenues, Net The Company sells its products principally to a limited number of specialty pharmacy providers and selected regional wholesalers in North America as well as government-owned and supported customers in international markets (collectively, its “Customers”). The Company's Customers in North America subsequently resell the products to patients and health care providers. The Company recognizes net revenues from product sales upon delivery to the Customer as long as (i) there is persuasive evidence that an arrangement exists between the Company and the Customer, (ii) collectibility is reasonably assured and (iii) the price is fixed or determinable. In order to conclude that the price is fixed or determinable, the Company must be able to (i) calculate its gross product revenues from sales to Customers and (ii) reasonably estimate its net product revenues upon delivery to its Customers' locations. The Company calculates gross product revenues based on the price that the Company charges its Customers. The Company estimates its net product revenues by deducting from its gross product revenues (a) trade allowances, such as invoice discounts for prompt payment and Customer fees, (b) estimated government and private payor rebates, chargebacks and discounts, (c) estimated reserves for expected product returns and (d) estimated costs of co-pay assistance programs for patients, as well as other incentives for certain indirect customers. The Company makes significant estimates and judgments that materially affect the Company's recognition of net product revenues. In certain instances, the Company may be unable to reasonably conclude that the price is fixed or determinable at the time of delivery, in which case it defers the recognition of revenues. Once the Company is able to determine that the price is fixed or determinable, it recognizes the revenues associated with the units in which revenue recognition was deferred. The following table summarizes activity in each of the product revenue allowance and reserve categories for the nine months ended September 30, 2016 : Trade Rebates, Product Other Total (in thousands) Balance at December 31, 2015 $ 2,089 $ 44,669 $ 1,228 $ 1,310 $ 49,296 Provision related to current period sales 14,680 98,242 1,631 5,547 120,100 Adjustments related to prior period sales (82 ) (1,081 ) (205 ) (80 ) (1,448 ) Credits/payments made (14,505 ) (70,718 ) (345 ) (5,607 ) (91,175 ) Balance at September 30, 2016 $ 2,182 $ 71,112 $ 2,309 $ 1,170 $ 76,773 In the three and nine months ended September 30, 2016 , the Company sold ORKAMBI in France pursuant to early access programs. The Company has not recognized any product revenues based on these sales because the price is not fixed or determinable due to the ongoing negotiations regarding the reimbursement rate for ORKAMBI in France. If the negotiated reimbursement rate in France is lower than the price currently being paid by Customers in France under these programs, the Company would reimburse the difference between such prices to the Customers. The cash received from sales in France is included as a liability on the Company's condensed consolidated balance sheet, and the increase in "other liabilities, current portion" from December 31, 2015 to September 30, 2016 is primarily due to this liability. |
Collaborative Arrangements
Collaborative Arrangements | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaborative Arrangements | Collaborative Arrangements Cystic Fibrosis Foundation Therapeutics Incorporated The Company has a research, development and commercialization agreement with Cystic Fibrosis Foundation Therapeutics Incorporated (“CFFT”) that was originally entered into in May 2004, and was most recently amended on October 13, 2016 (the “2016 Amendment”). Pursuant to the agreement, as amended, the Company has agreed to pay royalties ranging from low single digits to mid-single digits on potential sales of certain compounds first synthesized and/or tested between March 1, 2014 and August 31, 2016 and tiered royalties ranging from single digits to sub-teens on any approved drugs first synthesized and/or tested during a research term on or before February 28, 2014, including KALYDECO (ivacaftor), ORKAMBI (lumacaftor in combination with ivacaftor), lumacaftor and VX-661 (tezacaftor). For combination products, such as ORKAMBI, sales will be allocated equally to each of the active pharmaceutical ingredients in the combination product consistent with the allocation of net sales for ORKAMBI since the Company began marketing ORKAMBI in mid-2015. In each of the fourth quarter of 2015 and first quarter of 2016, CFFT earned a commercial milestone payment of $13.9 million from the Company upon achievement of certain sales levels of lumacaftor. There are no additional commercial milestone payments payable by the Company to CFFT pursuant to the agreement. Pursuant to the 2016 Amendment, the CFFT provided the Company an upfront program award of $75.0 million and agreed to provide development funding to the Company of up to $6.0 million annually. The Company began marketing KALYDECO in the United States and certain countries in the European Union in 2012 and began marketing ORKAMBI in the United States in 2015. The Company received approval for ORKAMBI In the European Union in 2015 and in Canada and Australia in 2016. The Company has royalty obligations to CFFT for ivacaftor, lumacaftor and VX-661 until the expiration of patents covering those compounds. The Company has patents in the United States and European Union covering the composition-of-matter of ivacaftor that expire in 2027 and 2025, respectively, subject to potential patent extensions. The Company has patents in the United States and European Union covering the composition-of-matter of lumacaftor that expire in 2030 and 2026, respectively, subject to potential extension. The Company has patents in the United States and European Union covering the composition-of-matter of VX-661 (tezacaftor) that expire in 2027 and 2028, respectively, subject to potential extension. CRISPR Therapeutics AG In October 2015, the Company entered into a strategic collaboration, option and license agreement (the "CRISPR Agreement") with CRISPR Therapeutics AG and its affiliates ("CRISPR") to collaborate on the discovery and development of potential new treatments aimed at the underlying genetic causes of human diseases using CRISPR-Cas9 gene editing technology. The Company has the exclusive right to license up to six CRISPR-Cas9-based targets. In connection with the CRISPR Agreement, the Company made an upfront payment to CRISPR of $75.0 million and a $30.0 million investment in CRISPR pursuant to a convertible loan agreement that converted into preferred stock in January 2016. The Company expensed $75.0 million to research and development, and the $30.0 million investment was recorded at cost and is classified as a long-term asset on the Company’s condensed consolidated balance sheet. In the second quarter of 2016, the Company made an additional preferred stock investment in CRISPR of approximately $3.1 million . In connection with CRISPR's initial public offering in October 2016, the Company made an additional $10 million common share investment in CRISPR and the Company's preferred stock investment in CRISPR converted into common shares. The Company will fund all of the discovery activities conducted pursuant to the CRISPR Agreement. For potential hemoglobinapathy treatments, including treatments for sickle cell disease, the Company and CRISPR will share equally all research and development costs and worldwide revenues. For other targets that the Company elects to license, the Company would lead all development and global commercialization activities. For each of up to six targets that the Company elects to license, other than hemoglobinapathy targets, CRISPR has the potential to receive up to $420.0 million in development, regulatory and commercial milestones and royalties on net product sales. The Company may terminate the CRISPR Agreement upon 90 days’ notice to CRISPR prior to any product receiving marketing approval or upon 270 days’ notice after a product has received marketing approval. The CRISPR Agreement also may be terminated by either party for a material breach by the other, subject to notice and cure provisions. Unless earlier terminated, the CRISPR Agreement will continue in effect until the expiration of the Company's payment obligations under the CRISPR Agreement. Variable Interest Entities The Company has entered into several agreements pursuant to which it has licensed rights to certain drug candidates from third-party collaborators, which has resulted in the consolidation of the third parties' financial statements into the Company's condensed consolidated financial statements as VIEs. In order to account for the fair value of the contingent milestone and royalty payments related to these collaborations under GAAP, the Company uses present-value models based on assumptions regarding the probability of achieving the relevant milestones, estimates regarding the timing of achieving the milestones, estimates of future product sales and the appropriate discount rates. The Company bases its estimate of the probability of achieving the relevant milestones on industry data for similar assets and its own experience. The discount rates used in the valuation model represent a measure of credit risk and market risk associated with settling the liabilities. Significant judgment is used in determining the appropriateness of these assumptions at each reporting period. Changes in these assumptions could have a material effect on the fair value of the contingent milestone and royalty payments. The following collaborations are reflected in the Company's financial statements as consolidated VIEs: Parion Sciences, Inc. License and Collaboration Agreement In June 2015, the Company entered into a strategic collaboration and license agreement (the "Parion Agreement") with Parion Sciences, Inc. (“Parion”). Pursuant to the Parion Agreement, the Company is collaborating with Parion to develop investigational epithelial sodium channel (“ENaC”) inhibitors, including VX-371 (formerly P-1037) and VX-551 (formerly P-1055), for the potential treatment of cystic fibrosis, or CF, and other pulmonary diseases. The Company is leading development activities for VX-371 and VX-551 and is responsible for all costs, subject to certain exceptions, related to development and commercialization of the compounds. Pursuant to the Parion Agreement, the Company has worldwide development and commercial rights to Parion’s lead investigational ENaC inhibitors, VX-371 and VX-551, for the potential treatment of CF and all other pulmonary diseases and has the option to select additional compounds discovered in Parion’s research program. Parion received an $80.0 million up-front payment and has the potential to receive up to an additional (i) $490.0 million in development and regulatory milestone payments for development of ENaC inhibitors in CF, including $360.0 million related to global filing and approval milestones, (ii) $370.0 million in development and regulatory milestones for VX-371 and VX-551 in non-CF pulmonary indications and (iii) $230.0 million in development and regulatory milestones should the Company elect to develop an additional ENaC inhibitor from Parion’s research program. The Company has agreed to pay Parion tiered royalties that range from the low double digits to mid-teens as a percentage of potential sales of licensed products. The Company may terminate the Parion Agreement upon 90 days’ notice to Parion prior to any licensed product receiving marketing approval or upon 180 days’ notice after a licensed product has received marketing approval. If the Company experiences a change of control prior to the initiation of the first Phase 3 clinical trial for a licensed product, Parion may terminate the Parion Agreement upon 30 days’ notice, subject to the Company's right to receive specified royalties on any subsequent commercialization of licensed products. The Parion Agreement also may be terminated by either party for a material breach by the other, subject to notice and cure provisions. Unless earlier terminated, the Parion Agreement will continue in effect until the expiration of the Company's royalty obligations, which expire on a country-by-country basis on the later of (i) the date the last-to-expire patent covering a licensed product expires or (ii) ten years after the first commercial sale in the country. The Company determined that Parion is a VIE based on, among other factors, the significance to Parion of the ENaC inhibitors licensed to the Company pursuant to the Parion Agreement and on the Company's power to direct the activities that most significantly affect the economic performance of Parion. Accordingly, the Company consolidated Parion's financial statements beginning on June 4, 2015. However, the Company's interests in Parion are limited to those accorded to the Company in the Parion Agreement. Consideration for the Parion Agreement The Company determined that the fair value of the consideration from the Company to Parion was $255.3 million as of June 4, 2015, which consisted of (i) an $80.0 million up-front payment, (ii) the estimated fair value of the contingent research and development milestones potentially payable by the Company to Parion and (iii) the estimated fair value of potential royalty payments payable by the Company to Parion. The Company valued the contingent milestone and royalty payments using (a) discount rates ranging from 4.1% to 5.9% for the development milestones and (b) a discount rate of 6.6% for royalties. The consideration paid and the preliminary fair value of the contingent milestone and royalty payments payable by the Company pursuant to the agreement are set forth in the table below: June 4, 2015 (in thousands) Up-front payment $ 80,000 Fair value of contingent milestone and royalty payments 175,340 Total $ 255,340 Allocation of Assets and Liabilities The Company allocated the total consideration to the assets and liabilities of Parion. The following table summarizes the final fair values of the assets and liabilities recorded on the effective date of the agreement: June 4, 2015 (in thousands) Intangible assets $ 255,340 Net assets attributable to noncontrolling interests (164,317 ) Deferred tax liability (91,023 ) Net other assets (liabilities) (10,468 ) Goodwill $ 10,468 The Company recorded $255.3 million of intangible assets on the Company's condensed consolidated balance sheet for Parion's in-process research and development assets. These in-process research and development assets relate to Parion's pulmonary ENaC platform, including the intellectual property related to VX-371 and VX-551, that are licensed by Parion to the Company. The Company recorded Parion’s assets and liabilities including (i) the fair value of the intangible assets, (ii) the fair value of the net assets attributable to noncontrolling interest, and (iii) a deferred tax liability resulting from a basis difference in the intangible assets and certain other net liabilities held by Parion. The difference between the fair value of the consideration paid and the fair value of Parion’s net assets was recorded as goodwill. BioAxone Biosciences, Inc. In October 2014, the Company entered into a license and collaboration agreement (the “BioAxone Agreement”) with BioAxone Biosciences, Inc. (“BioAxone”), a privately-held biotechnology company, which resulted in the consolidation of BioAxone as a VIE beginning on October 1, 2014. The Company paid BioAxone initial payments of $10.0 million in the fourth quarter of 2014. BioAxone has the potential to receive up to $90.0 million in milestones and fees, including development, regulatory and milestone payments and a license continuation fee. In addition, BioAxone would receive royalties and commercial milestones on future net product sales of VX-210, if any. The Company recorded an in-process research and development intangible asset of $29.0 million for VX-210 and a corresponding deferred tax liability of $11.3 million attributable to BioAxone. The Company holds an option to purchase BioAxone at a predetermined price. The option expires on the earliest of (a) the day the FDA accepts the Biologics License Application submission for VX-210, (b) the day the Company elects to continue the license instead of exercising the option to purchase BioAxone and (c) March 15, 2018, subject to the Company’s option to extend this date by one year. Aggregate VIE Financial Information An aggregate summary of net loss attributable to noncontrolling interest related to the Company's VIEs for the three and nine months ended September 30, 2016 and 2015 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Loss attributable to noncontrolling interest before provision for income taxes $ 2,406 $ 1,743 $ 6,080 $ 3,322 (Benefit from) provision for income taxes (510 ) 777 20,063 30,367 (Increase) decrease in fair value of contingent milestone and royalty payments (1,200 ) (3,853 ) (59,350 ) (2,780 ) Net (income) loss attributable to noncontrolling interest $ 696 $ (1,333 ) $ (33,207 ) $ 30,909 The increases in the fair value of the contingent milestone and royalty payments in the nine months ended September 30, 2016 were primarily due to a Phase 2 clinical trial of VX-371, a compound being developed pursuant to the Parion Agreement, achieving its primary safety endpoint in the second quarter of 2016. The fair value of the contingent milestone and royalty payments also reflects changes in market interest rates and the time value of money. During the three and nine months ended September 30, 2016 and 2015 , the increase (decrease) in the fair value of the contingent milestone and royalty payments related to the Company's VIEs was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Parion $ 1,100 $ 4,481 $ 58,500 $ 2,860 BioAxone 100 (628 ) 850 (80 ) As of September 30, 2016 , the fair value of the contingent milestone and royalty payments related to the Parion Agreement and the BioAxone Agreement was $232.5 million and $28.8 million , respectively. As of December 31, 2015 , the fair value of the contingent milestone and royalty payments related to the Parion collaboration and the BioAxone collaboration was $179.0 million and $28.0 million , respectively. The following table summarizes items related to the Company's VIEs included in the Company's condensed consolidated balance sheets as of the dates set forth in the table: September 30, 2016 December 31, 2015 (in thousands) Restricted cash and cash equivalents (VIE) $ 58,420 $ 78,910 Prepaid expenses and other current assets 2,360 3,138 Intangible assets 284,340 284,340 Goodwill 19,391 19,391 Other assets 382 455 Accounts payable 1,122 676 Taxes payable 6,263 24,554 Other current liabilities 1,121 7,100 Deferred tax liability, net 133,270 110,438 Other liabilities 300 300 Noncontrolling interest 186,795 153,661 The Company has recorded the VIEs' cash and cash equivalents as restricted cash and cash equivalents (VIE) because (i) the Company does not have any interest in or control over the VIEs' cash and cash equivalents and (ii) the Company's agreements with each VIE do not provide for the VIEs' cash and cash equivalents to be used for the development of the assets that the Company licensed from the applicable VIE. Assets recorded as a result of consolidating the Company's VIEs' financial condition into the Company's balance sheet do not represent additional assets that could be used to satisfy claims against the Company's general assets. Other Collaborations The Company has entered into various agreements pursuant to which it collaborates with third parties, including inlicensing and outlicensing arrangements. Although the Company does not consider any of these arrangements to be material, the most notable of these arrangements are described below. Moderna Therapeutics, Inc. In July 2016, the Company entered into a strategic collaboration and licensing agreement (the "Moderna Agreement") with Moderna Therapeutics, Inc. ("Moderna") pursuant to which the parties are seeking to identify and develop messenger Ribonucleic Acid ("mRNA") Therapeutics for the treatment of CF. In connection with the Moderna Agreement in the third quarter of 2016, the Company made an upfront payment to Moderna of $20.0 million and a $20.0 million cost-method investment in Moderna pursuant to a convertible promissory note that converted into preferred stock in August 2016. Moderna has the potential to receive future development and regulatory milestones of up to $275.0 million , including $220.0 million in approval and reimbursement milestones, as well as tiered royalty payments on future sales. Under the terms of the Moderna Agreement, Moderna will lead discovery efforts and the Company will lead all preclinical, development and commercialization activities associated with the advancement of mRNA Therapeutics that result from this collaboration and will fund all expenses related to the collaboration. The Company may terminate the Moderna Agreement by providing advanced notice to Moderna, with the required length of notice dependent on whether any product developed under the Moderna Agreement has received marketing approval. The Moderna Agreement also may be terminated by either party for a material breach by the other, subject to notice and cure provisions. Unless earlier terminated, the Moderna Agreement will continue in effect until the expiration of the Company's payment obligations under the Moderna Agreement. Janssen Pharmaceuticals, Inc. In June 2014, the Company entered into an agreement (the “Janssen Influenza Agreement”) with Janssen Pharmaceuticals, Inc. (“Janssen Inc.”), which was amended in October 2014 to clarify certain roles and responsibilities of the parties. Pursuant to the Janssen Influenza Agreement, Janssen Inc. has an exclusive worldwide license to develop and commercialize certain drug candidates for the treatment of influenza, including VX-787. The Company received non-refundable payments of $35.0 million from Janssen Inc. in 2014, which were recorded as collaborative revenue. The Company has the potential to receive development, regulatory and commercial milestone payments as well as royalties on future product sales, if any. Janssen Inc. may terminate the Janssen Influenza Agreement, subject to certain exceptions, upon six months' notice. Janssen Inc. is responsible for costs related to the development and commercialization of the compounds. During the three and nine months ended September 30, 2016 , the Company recorded reimbursement for these development activities of $2.8 million and $10.6 million , respectively. During the three and nine months ended September 30, 2015 , the Company recorded reimbursement for these development activities of $4.0 million and $18.7 million , respectively. The reimbursements are recorded as a reduction to development expense in the Company's condensed consolidated statements of operations primarily due to the fact that Janssen Inc. directs the activities and selects the suppliers associated with these activities. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic net loss per share attributable to Vertex common shareholders is based upon the weighted-average number of common shares outstanding during the period, excluding restricted stock and restricted stock units that have been issued but are not yet vested. Diluted net loss per share attributable to Vertex common shareholders is based upon the weighted-average number of common shares outstanding during the period plus additional weighted-average common equivalent shares outstanding during the period when the effect is dilutive. The Company did not include the securities in the following table in the computation of the net loss per share attributable to Vertex common shareholders calculations because the effect would have been anti-dilutive during each period: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Stock options 12,947 12,025 12,947 12,025 Unvested restricted stock and restricted stock units 3,624 3,367 3,624 3,367 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of the Company’s financial assets and liabilities reflects the Company’s estimate of amounts that it would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from sources independent from the Company) and to minimize the use of unobservable inputs (the Company’s assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include 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: Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. The Company’s investment strategy is focused on capital preservation. The Company invests in instruments that meet the credit quality standards outlined in the Company’s investment policy. This policy also limits the amount of credit exposure to any one issue or type of instrument. As of September 30, 2016 , the Company’s investments were primarily in money market funds, short-term government-sponsored enterprise securities, corporate debt securities and commercial paper. As of September 30, 2016 , all of the Company’s financial assets that were subject to fair value measurements were valued using observable inputs. The Company’s financial assets valued based on Level 1 inputs consisted of money market funds and short-term government-sponsored enterprise securities. The Company’s financial assets valued based on Level 2 inputs consisted of corporate debt securities and commercial paper, which consisted of investments in highly-rated investment-grade corporations. The following table sets forth the Company’s financial assets (excluding VIE cash and cash equivalents) and liabilities subject to fair value measurements: Fair Value Measurements as Fair Value Hierarchy Total Level 1 Level 2 Level 3 (in thousands) Financial assets carried at fair value: Cash equivalents: Money market funds $ 101,844 $ 101,844 $ — $ — Marketable securities: Government-sponsored enterprise securities 130,431 130,431 — — Corporate debt securities 146,942 — 146,942 — Commercial paper 131,376 — 131,376 — Prepaid and other current assets: Foreign currency forward contracts 7,644 — 7,644 — Other assets: Foreign currency forward contracts 217 — 217 — Total financial assets $ 518,454 $ 232,275 $ 286,179 $ — Financial liabilities carried at fair value: Other liabilities, current portion: Foreign currency forward contracts $ (1,459 ) $ — $ (1,459 ) $ — Other liabilities, excluding current portion: Foreign currency forward contracts (315 ) — (315 ) — Total financial liabilities $ (1,774 ) $ — $ (1,774 ) $ — Fair Value Measurements as Fair Value Hierarchy Total Level 1 Level 2 Level 3 (in thousands) Financial instruments carried at fair value (asset position): Cash equivalents: Money market funds $ 199,507 $ 199,507 $ — $ — Government-sponsored enterprise securities 85,994 85,994 — — Commercial paper 34,889 — 34,889 — Corporate debt securities 11,533 — 11,533 — Marketable securities: Government-sponsored enterprise securities 87,162 87,162 — — Commercial paper 99,123 — 99,123 — Corporate debt securities 141,409 — 141,409 — Prepaid and other current assets: Foreign currency forward contracts 5,161 — 5,161 — Other assets: Foreign currency forward contracts 605 $ — 605 $ — Total financial assets $ 665,383 $ 372,663 $ 292,720 $ — Financial instruments carried at fair value (liability position): Other liabilities, current portion: Foreign currency forward contracts $ (769 ) $ — $ (769 ) $ — Other liabilities, excluding current portion: Foreign currency forward contracts (132 ) — (132 ) — Total financial liabilities $ (901 ) $ — $ (901 ) $ — The Company's VIEs invested in cash equivalents consisting of money market funds of $57.9 million as of September 30, 2016 , which are valued based on Level 1 inputs. These cash equivalents are not included in the table above. The Company’s noncontrolling interest related to VIEs includes the fair value of the contingent milestone and royalty payments , which are valued based on Level 3 inputs. Please refer to Note C, “Collaborative Arrangements,” for further information. As of September 30, 2016 , the fair value and carrying value of the Company's Term Loan was $297.8 million . The fair value of the Company's Term Loan was estimated based on Level 3 inputs computed using the effective interest rate of the Term Loan. The effective interest rate considers the timing and amount of estimated future interest payments as well as current market rates. Please refer to Note K, "Long-term Obligations" for further information regarding the Company's Term Loan. |
Marketable Securities
Marketable Securities | 9 Months Ended |
Sep. 30, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Marketable Securities | Marketable Securities A summary of the Company’s cash, cash equivalents and marketable securities is shown below: Amortized Cost Gross Gross Fair Value (in thousands) As of September 30, 2016 Cash and cash equivalents: Cash and money market funds $ 719,692 $ — $ — $ 719,692 Total cash and cash equivalents $ 719,692 $ — $ — $ 719,692 Marketable securities: Government-sponsored enterprise securities (due within 1 year) 130,404 29 (2 ) 130,431 Commercial paper (due within 1 year) 131,099 277 — 131,376 Corporate debt securities (due within 1 year) 147,016 6 (80 ) 146,942 Total marketable securities $ 408,519 $ 312 $ (82 ) $ 408,749 Total cash, cash equivalents and marketable securities $ 1,128,211 $ 312 $ (82 ) $ 1,128,441 As of December 31, 2015 Cash and cash equivalents: Cash and money market funds $ 582,352 $ — $ — $ 582,352 Government-sponsored enterprise securities 85,994 — — 85,994 Commercial paper 34,889 — — 34,889 Corporate debt securities 11,533 — — 11,533 Total cash and cash equivalents $ 714,768 $ — $ — $ 714,768 Marketable securities: Government-sponsored enterprise securities (due within 1 year) $ 87,176 $ — $ (14 ) $ 87,162 Commercial paper (due within 1 year) 98,877 246 — 99,123 Corporate debt securities (due within 1 year) 141,515 — (106 ) 141,409 Total marketable securities $ 327,568 $ 246 $ (120 ) $ 327,694 Total cash, cash equivalents and marketable securities $ 1,042,336 $ 246 $ (120 ) $ 1,042,462 The Company has a limited number of marketable securities in insignificant loss positions as of September 30, 2016 , which the Company does not intend to sell and has concluded it will not be required to sell before recovery of the amortized costs for the investment at maturity. There were no charges recorded for other-than-temporary declines in fair value of marketable securities nor gross realized gains or losses recognized in the three and nine months ended September 30, 2016 and 2015 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income A summary of the Company's changes in accumulated other comprehensive (loss) income by component is shown below: Foreign Currency Translation Adjustment Unrealized Holding Gains on Marketable Securities Unrealized Gains (Losses) on Foreign Currency Forward Contracts, net of tax Total (in thousands) Balance at December 31, 2015 $ (2,080 ) $ 126 $ 3,778 $ 1,824 Other comprehensive (loss) income before reclassifications (7,709 ) 104 6,715 (890 ) Amounts reclassified from accumulated other comprehensive loss — — (4,779 ) (4,779 ) Net current period other comprehensive (loss) income $ (7,709 ) $ 104 $ 1,936 $ (5,669 ) Balance at September 30, 2016 $ (9,789 ) $ 230 $ 5,714 $ (3,845 ) Foreign Currency Translation Adjustment Unrealized Holding (Losses) Gains on Marketable Securities Unrealized Gains (Losses) on Foreign Currency Forward Contracts Total (in thousands) Balance at December 31, 2014 $ (971 ) $ (123 ) $ 2,011 $ 917 Other comprehensive (loss) income before reclassifications (164 ) 186 4,072 4,094 Amounts reclassified from accumulated other comprehensive loss — — (3,500 ) (3,500 ) Net current period other comprehensive (loss) income $ (164 ) $ 186 $ 572 $ 594 Balance at September 30, 2015 $ (1,135 ) $ 63 $ 2,583 $ 1,511 |
Hedging
Hedging | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Hedging | Hedging The Company maintains a hedging program intended to mitigate the effect of changes in foreign exchange rates for a portion of the Company’s forecasted product revenues denominated in certain foreign currencies. The program includes foreign currency forward contracts that are designated as cash flow hedges under GAAP having contractual durations from one to eighteen months. The Company formally documents the relationship between foreign currency forward contracts (hedging instruments) and forecasted product revenues (hedged items), as well as the Company's risk management objective and strategy for undertaking various hedging activities, which includes matching all foreign currency forward contracts that are designated as cash flow hedges to forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the foreign currency forward contracts are highly effective in offsetting changes in cash flows of hedged items on a prospective and retrospective basis. If the Company determines that a (i) foreign currency forward contract is not highly effective as a cash flow hedge, (ii) foreign currency forward contract has ceased to be a highly effective hedge or (iii) forecasted transaction is no longer probable of occurring, the Company would discontinue hedge accounting treatment prospectively. The Company measures effectiveness based on the change in fair value of the forward contracts and the fair value of the hypothetical foreign currency forward contracts with terms that match the critical terms of the risk being hedged. As of September 30, 2016 , all hedges were determined to be highly effective and the Company had not recorded any ineffectiveness related to the hedging program. The following table summarizes the notional amount of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges: As of September 30, 2016 As of December 31, 2015 Foreign Currency (in thousands) Euro $ 156,245 $ 103,362 British pound sterling 73,684 78,756 Australian dollar 26,550 27,167 Total foreign currency forward contracts $ 256,479 $ 209,285 The following table summarizes the fair value of the Company's outstanding foreign currency forward contracts designated as cash flow hedges under GAAP included on the Company's condensed consolidated balance sheets: As of September 30, 2016 Assets Liabilities Classification Fair Value Classification Fair Value (in thousands) Prepaid and other current assets $ 7,644 Other liabilities, current portion $ (1,459 ) Other assets 217 Other liabilities, excluding current portion (315 ) Total assets $ 7,861 Total liabilities $ (1,774 ) As of December 31, 2015 Assets Liabilities Classification Fair Value Classification Fair Value (in thousands) Prepaid and other current assets $ 5,161 Other liabilities, current portion $ (769 ) Other assets 605 Other liabilities, excluding current portion (132 ) Total assets $ 5,766 Total liabilities $ (901 ) The following table summarizes the potential effect of offsetting derivatives by type of financial instrument on the Company's condensed consolidated balance sheets: As of September 30, 2016 Gross Amounts Recognized Gross Amounts Offset Gross Amounts Presented Gross Amounts Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 7,861 $ — $ 7,861 $ (1,774 ) $ 6,087 Total liabilities $ (1,774 ) $ — $ (1,774 ) $ 1,774 $ — As of December 31, 2015 Gross Amounts Recognized Gross Amounts Offset Gross Amounts Presented Gross Amounts Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 5,766 $ — $ 5,766 $ (901 ) $ 4,865 Total liabilities $ (901 ) $ — $ (901 ) $ 901 $ — |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: As of September 30, 2016 As of December 31, 2015 (in thousands) Raw materials $ 9,824 $ 8,696 Work-in-process 46,057 40,695 Finished goods 15,918 7,816 Total $ 71,799 $ 57,207 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets As of September 30, 2016 and December 31, 2015 , in-process research and development intangible assets of $284.3 million were recorded on the Company's condensed consolidated balance sheet. In June 2015, in connection with entering into the Parion Agreement, the Company recorded an in-process research and development intangible asset of $255.3 million based on the Company’s estimate of the fair value of Parion’s lead investigational ENaC inhibitors, including VX-371 and VX-551, that were licensed by the Company from Parion. The Company aggregated the fair value of the ENaC inhibitors into a single intangible asset because the phase, nature and risks of development as well as the amount and timing of benefits associated with the assets were similar. In October 2014, the Company recorded an in-process research and development intangible asset of $29.0 million based on the Company’s estimate of the fair value of VX-210, a drug candidate for patients with spinal cord injuries that was licensed by the Company from BioAxone. The Company used discount rates of 7.1% and 7.5% in the present-value models to estimate the fair values of the ENaC inhibitors and VX-210 intangible assets, respectively. Goodwill As of September 30, 2016 and December 31, 2015 , goodwill of $50.4 million was recorded on the Company's condensed consolidated balance sheet. |
Long-term Obligations
Long-term Obligations | 9 Months Ended |
Sep. 30, 2016 | |
Long-term Debt and Capital Lease Obligations [Abstract] | |
Long-term Obligations | Long-term Obligations Fan Pier Leases In 2011, the Company entered into two lease agreements, pursuant to which the Company leases approximately 1.1 million square feet of office and laboratory space in two buildings (the “Buildings”) at Fan Pier in Boston, Massachusetts (the “Fan Pier Leases”). The Company commenced lease payments in December 2013, and will make lease payments pursuant to the Fan Pier Leases through December 2028. The Company has an option to extend the term of the Fan Pier Leases for an additional ten years . Because the Company was involved in the construction project, the Company was deemed for accounting purposes to be the owner of the Buildings during the construction period and recorded project construction costs incurred by the landlord. Upon completion of the Buildings, the Company evaluated the Fan Pier Leases and determined that the Fan Pier Leases did not meet the criteria for “sale-leaseback” treatment. Accordingly, the Company began depreciating the asset and incurring interest expense related to the financing obligation in 2013. The Company bifurcates its lease payments pursuant to the Fan Pier Leases into (i) a portion that is allocated to the Buildings and (ii) a portion that is allocated to the land on which the Buildings were constructed. The portion of the lease obligations allocated to the land is treated as an operating lease that commenced in 2011. Property and equipment, net, included $492.3 million and $502.3 million as of September 30, 2016 and December 31, 2015 , respectively, related to construction costs for the Buildings. The carrying value of the Company's lease agreement liability for the Buildings was $472.7 million and $473.0 million as of September 30, 2016 and December 31, 2015 , respectively. San Diego Lease On December 2, 2015, the Company entered into a lease agreement for 3215 Merryfield Row, San Diego, California with ARE-SD Region No. 23, LLC. Pursuant to this agreement, the Company agreed to lease approximately 170,000 square feet of office and laboratory space in a building to be built in San Diego, California. The lease will commence upon completion of the building, scheduled for the first half of 2018, and will extend for 16 years from the commencement date. Pursuant to the lease agreement, during the initial 16 -year term, the Company will pay an average of approximately $10.2 million per year in aggregate rent, exclusive of operating expenses. The Company has the option to extend the lease term for up to two additional five -year terms. Term Loan In July 2014, the Company entered into a credit agreement with the lenders party thereto, and Macquarie US Trading LLC ("Macquarie"), as administrative agent. The credit agreement provided for a $300.0 million senior secured term loan ("Macquarie Loan"). On October 13, 2016, the Company terminated and repaid all outstanding obligations under the Macquarie Loan. The Macquarie Loan initially bore interest at a rate of 7.2% per annum, which was reduced to 6.2% per annum based on the FDA's approval of ORKAMBI. The Term Loan bore interest at a rate of LIBOR plus 5.0% per annum during the third year of the term. If the Company had not terminated and repaid all outstanding obligations, the maturity date of all loans under the facilities was July 9, 2017. Based on the Company's evaluation of the Macquarie Loan, the Company determined that the Macquarie Loan contained several embedded derivatives. These embedded derivatives were clearly and closely related to the host instrument because they related to the Company's credit risk; therefore, they did not require bifurcation from the host instrument, the Macquarie Loan. The Company incurred $5.3 million in fees paid to Macquarie that were recorded as a discount on the Macquarie Loan and were recorded as interest expense using the effective interest method over the term of the loan in the Company’s condensed consolidated statements of operations . As of September 30, 2016 and December 31, 2015 , the unamortized discount associated with the Macquarie Loan that was included in the senior secured term loan caption on the Company’s condensed consolidated balance sheet was $2.1 million and $4.6 million , respectively. Subsequent Event On October 13, 2016, the Company entered into a Credit Agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent and the lenders referred to therein. The Credit Agreement provides for a $500.0 million revolving facility, $300.0 million of which was drawn at closing (the “Loans”). The Credit Agreement also provides that, subject to satisfaction of certain conditions, the Company may request that the borrowing capacity under the Credit Agreement be increased by an additional $300.0 million . The Credit Agreement matures on October 13, 2021. The proceeds of the borrowing under the Credit Agreement were used primarily to repay the Company's existing indebtedness under the Macquarie Loan. The Company will incur a charge of $2.2 million in the fourth quarter of 2016 related to a loss on extinguishment attributable to the Macquarie Loan. The Loans will bear interest, at the Company's option, at either a base rate or a Eurodollar rate, in each case plus an applicable margin. Under the Credit Agreement, the applicable margins on base rate loans range from 0.75% to 1.50% and the applicable margins on Eurodollar loans range from 1.75% to 2.5% , in each case based on the Company's consolidated leverage ratio (the ratio of the Company's total consolidated debt to the Company's trailing twelve-month EBITDA). The Loans are guaranteed by certain of the Company's domestic subsidiaries and secured by substantially all of the Company's assets and the assets of the Company's domestic subsidiaries (excluding intellectual property, owned and leased real property and certain other excluded property) and by the equity interests of the Company's subsidiaries, subject to certain exceptions. Under the terms of the Credit Agreement, the Company must maintain, subject to certain limited exceptions, a consolidated leverage ratio of 3.00 to 1.00 and consolidated EBITDA of at least $200.0 million , in each case to be measured on a quarterly basis. The Credit Agreement contains customary representations and warranties and usual and customary affirmative and negative covenants. The Credit Agreement also contains customary events of default. In the case of a continuing event of default, the administrative agent would be entitled to exercise various remedies, including the acceleration of amounts due under outstanding loans. |
Stock-based Compensation Expens
Stock-based Compensation Expense | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation Expense | Stock-based Compensation Expense During the three and nine months ended September 30, 2016 and 2015 , the Company recognized the following stock-based compensation expense: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Stock-based compensation expense by type of award: Stock options $ 28,773 $ 39,074 $ 86,859 $ 105,720 Restricted stock and restricted stock units 30,966 26,203 88,107 78,274 ESPP share issuances 2,425 1,738 6,385 5,703 Less stock-based compensation expense capitalized to inventories (955 ) (1,281 ) (2,728 ) (3,318 ) Total stock-based compensation included in costs and expenses $ 61,209 $ 65,734 $ 178,623 $ 186,379 Stock-based compensation expense by line item: Research and development expenses $ 39,980 $ 44,701 $ 115,068 $ 124,550 Sales, general and administrative expenses 21,229 21,033 63,555 61,829 Total stock-based compensation included in costs and expenses $ 61,209 $ 65,734 $ 178,623 $ 186,379 The following table sets forth the Company's unrecognized stock-based compensation expense, net of estimated forfeitures, by type of award and the weighted-average period over which that expense is expected to be recognized: As of September 30, 2016 Unrecognized Expense, Weighted-average (in thousands) (in years) Type of award: Stock options $ 185,148 2.66 Restricted stock and restricted stock units $ 206,336 2.57 ESPP share issuances $ 2,886 0.47 The following table summarizes information about stock options outstanding and exercisable at September 30, 2016 : Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted-average Weighted-average Number Weighted-average (in thousands) (in years) (per share) (in thousands) (per share) $18.93–$20.00 137 1.35 $ 18.93 137 $ 18.93 $20.01–$40.00 1,816 3.32 $ 34.08 1,815 $ 34.07 $40.01–$60.00 1,937 5.89 $ 48.19 1,719 $ 48.57 $60.01–$80.00 1,348 7.38 $ 75.90 809 $ 75.51 $80.01–$100.00 4,598 8.74 $ 90.62 1,271 $ 89.38 $100.01–$120.00 1,627 8.33 $ 109.33 606 $ 109.29 $120.01–$134.69 1,484 8.80 $ 130.60 510 $ 130.06 Total 12,947 7.29 $ 80.99 6,867 $ 66.29 |
Other Arrangements
Other Arrangements | 9 Months Ended |
Sep. 30, 2016 | |
Other Income and Expenses [Abstract] | |
Other Arrangements | Other Arrangements Sale of HIV Protease Inhibitor Royalty Stream In 2008, the Company sold to a third party its rights to receive royalty payments from GlaxoSmithKline plc, net of royalty amounts to be earned by and due to a third party, for a one-time cash payment of $160.0 million . These royalty payments relate to net sales of HIV protease inhibitors, which had been developed pursuant to a collaboration agreement between the Company and GlaxoSmithKline plc. As of September 30, 2016 , the Company had $15.8 million in deferred revenues related to the one-time cash payment, which it is recognizing over the life of the collaboration agreement with GlaxoSmithKline plc based on the units-of-revenue method. In addition, the Company continues to recognize royalty revenues equal to the amount of the third-party subroyalty and an offsetting royalty expense for the third-party subroyalty payment. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is subject to United States federal, state, and foreign income taxes. For the three and nine months ended September 30, 2016 , the Company recorded a provision for income taxes of $0.5 million and $24.1 million , respectively. The provision for income taxes recorded in the three and nine months ended September 30, 2016 included a benefit of $0.5 million and a provision of $20.1 million , respectively, related to the Company's VIEs' income tax provision. The Company has no liability for taxes payable by the Company's VIEs and the income tax provision and related liability have been allocated to noncontrolling interest (VIE). For the three and nine months ended September 30, 2015 , the Company recorded a provision for income taxes of $1.3 million and $31.8 million , respectively, primarily related to the Company's VIEs' income tax provision. As of September 30, 2016 and December 31, 2015 , the Company had unrecognized tax benefits of zero and $0.4 million , respectively. The Company recognizes interest and penalties related to income taxes as a component of income tax expense. As of September 30, 2016 , no interest and penalties have been accrued. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company did not recognize any material interest or penalties related to uncertain tax positions as of September 30, 2016 and December 31, 2015 . For the three months ended September 30, 2016 , the Company reduced the balance of its unrecognized tax benefits by approximately $0.4 million due to the expiration of statute of limitations, which reduced the Company’s effective tax rate. The Company continues to maintain a valuation allowance against certain deferred tax assets where it is more likely than not that the deferred tax asset will not be realized because of its extended history of annual losses. The Company files United States federal income tax returns and income tax returns in various state, local and foreign jurisdictions. The Company is no longer subject to any tax assessment from an income tax examination in the United States before 2011 or any other major taxing jurisdiction for years before 2009, except where the Company has net operating losses or tax credit carryforwards that originated before 2009. The Company currently is under examination by the Internal Revenue Service for the year ended December 31, 2011 and in Delaware, Canada and Quebec for varying periods including the years ended December 31, 2011 through 2014. No adjustments have been reported. The Company is not under examination by any other jurisdictions for any tax year. The Company concluded audits with Pennsylvania and Texas during 2016 and Massachusetts and New York during 2015 with no material adjustments. The Company currently intends to reinvest the total amount of its unremitted earnings. At September 30, 2016 , foreign earnings, which were not significant, have been retained indefinitely by foreign subsidiary companies for reinvestment; therefore, no provision has been made for income taxes that would be payable upon the distribution of such earnings, and it would not be practicable to determine the amount of the related unrecognized deferred income tax liability. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company would be subject to United States federal income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries. |
Restructuring Liabilities
Restructuring Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Liabilities | Restructuring Liabilities 2003 Kendall Restructuring In 2003, the Company adopted a plan to restructure its operations to coincide with its increasing internal emphasis on advancing drug candidates through clinical development to commercialization. The restructuring liability relates to specialized laboratory and office space that is leased to the Company pursuant to a 15 -year lease that terminates in 2018. The Company has not used more than 50% of this space since it adopted the plan to restructure its operations in 2003. This unused laboratory and office space currently is subleased to third parties. The activities related to the restructuring liability for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Liability, beginning of the period $ 6,388 $ 9,924 $ 7,944 $ 11,596 Cash payments (5,340 ) (3,975 ) (13,104 ) (10,544 ) Cash received from subleases 2,866 2,919 8,882 8,194 Restructuring expense (income) 30 146 222 (232 ) Liability, end of the period $ 3,944 $ 9,014 $ 3,944 $ 9,014 Fan Pier Move Restructuring In connection with the relocation of its Massachusetts operations to Fan Pier in Boston, Massachusetts, which commenced in 2013, the Company is incurring restructuring charges related to its remaining lease obligations at its facilities in Cambridge, Massachusetts. The majority of these restructuring charges were recorded in the third quarter of 2014 upon decommissioning three facilities in Cambridge. During the first quarter of 2015, the Company terminated two of these lease agreements resulting in a credit to restructuring expense equal to the difference between the Company’s estimated future cash flows related to its lease obligations for these facilities and the termination payment paid to the Company’s landlord on the effective date of the termination. The third major facility included in this restructuring activity is 120,000 square feet of the Kendall Square Facility that the Company continued to use for its operations following its 2003 Kendall Restructuring . The rentable square footage in this portion of the Kendall Square Facility was subleased to a third party in February 2015. The Company will continue to incur charges through April 2018 related to the difference between the Company’s estimated future cash flows related to this portion of the Kendall Square Facility , which include an estimate for sublease income to be received from the Company's sublessee and its actual cash flows. The Company discounted the estimated cash flows related to this restructuring activity at a discount rate of 9% . The activities related to the restructuring liability for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Liability, beginning of the period $ 4,863 $ 9,017 $ 5,964 $ 33,390 Cash payments (4,199 ) (3,070 ) (10,451 ) (25,421 ) Cash received from subleases 2,539 1,820 7,308 1,820 Restructuring expense (income) 90 51 472 (1,971 ) Liability, end of the period $ 3,293 $ 7,818 $ 3,293 $ 7,818 Other Restructuring Activities The Company has engaged in several other restructuring activities that are unrelated to its 2003 Kendall Restructuring and the Fan Pier Move Restructuring . The most significant activity commenced in October 2013 when the Company adopted a restructuring plan that included (i) a workforce reduction primarily related to the commercial support of INCIVEK following the continued and rapid decline in the number of patients being treated with INCIVEK as new medicines for the treatment of HCV infection neared approval and (ii) the write-off of certain assets. This action resulted from the Company's decision to focus its investment on future opportunities in CF and other research and development programs. The activities related to the Company's other restructuring liabilities for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Liability, beginning of the period $ 1,233 $ 902 $ 1,450 $ 869 Cash payments (1,121 ) (1,559 ) (1,794 ) (2,782 ) Restructuring expense (112 ) 1,629 344 2,885 Liability, end of the period $ — $ 972 $ — $ 972 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Financing Arrangements As of September 30, 2016 , the Company had irrevocable stand-by letters of credit outstanding that were issued in connection with property leases and other similar agreements totaling $21.9 million that were cash collateralized. The cash used to support these letters of credit is included in restricted cash, as of September 30, 2016 , on the Company's condensed consolidated balance sheet. Effective as of October 13, 2016, the letters of credit are covered by the Company's credit agreement with Bank of America, N.A., as administrative agent and the lenders referred to therein, and as a result, are no longer cash collateralized. Litigation On May 28, 2014, a purported shareholder class action Local No. 8 IBEW Retirement Plan & Trust v. Vertex Pharmaceuticals Incorporated, et al. was filed in the United States District Court for the District of Massachusetts, naming the Company and certain of the Company's current and former officers and directors as defendants. The lawsuit alleged that the Company made material misrepresentations and/or omissions of material fact in the Company's disclosures during the period from May 7, 2012 through May 29, 2012, all in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The purported class consists of all persons (excluding defendants) who purchased the Company’s common stock between May 7, 2012 and May 29, 2012. The plaintiffs seek unspecified monetary damages, costs and attorneys’ fees as well as disgorgement of the proceeds from certain individual defendants’ sales of the Company’s stock. On October 8, 2014, the Court approved Local No. 8 IBEW Retirement Fund as lead plaintiff, and Scott and Scott LLP as lead counsel for the plaintiff and the putative class. On February 23, 2015, the Company filed a reply to the plaintiffs’ opposition to its motion to dismiss. The court heard oral argument on the motion to dismiss on March 6, 2015 and took the motion under advisement. On September 30, 2015, the court granted the Company's motion to dismiss. On October 15, 2015, the plaintiff filed a notice of appeal. The First Circuit Court of Appeals issued a scheduling order on December 24, 2015. On February 2, 2016, the Plaintiff filed their opening brief and the Company filed its opposition brief on March 7, 2016. On March 24, 2016, the plaintiff filed their reply brief. Oral argument on the appeal took place on July 26, 2016. On October 3, 2016, the First Circuit Court of Appeals affirmed the district court’s dismissal of the Plaintiff’s complaint. As of September 30, 2016 , the Company has no t recorded any reserves for this purported class action. Guaranties and Indemnifications As permitted under Massachusetts law, the Company’s Articles of Organization and By-laws provide that the Company will indemnify certain of its officers and directors for certain claims asserted against them in connection with their service as an officer or director. The maximum potential amount of future payments that the Company could be required to make under these indemnification provisions is unlimited. However, the Company has purchased directors’ and officers’ liability insurance policies that could reduce its monetary exposure and enable it to recover a portion of any future amounts paid. No indemnification claims currently are outstanding, and the Company believes the estimated fair value of these indemnification arrangements is minimal. The Company customarily agrees in the ordinary course of its business to indemnification provisions in agreements with clinical trial investigators and sites in its drug development programs, sponsored research agreements with academic and not-for-profit institutions, various comparable agreements involving parties performing services for the Company and its real estate leases. The Company also customarily agrees to certain indemnification provisions in its drug discovery, development and commercialization collaboration agreements. With respect to the Company’s clinical trials and sponsored research agreements, these indemnification provisions typically apply to any claim asserted against the investigator or the investigator’s institution relating to personal injury or property damage, violations of law or certain breaches of the Company’s contractual obligations arising out of the research or clinical testing of the Company’s compounds or drug candidates. With respect to lease agreements, the indemnification provisions typically apply to claims asserted against the landlord relating to personal injury or property damage caused by the Company, to violations of law by the Company or to certain breaches of the Company’s contractual obligations. The indemnification provisions appearing in the Company’s collaboration agreements are similar to those for the other agreements discussed above, but in addition provide some limited indemnification for its collaborator in the event of third-party claims alleging infringement of intellectual property rights. In each of the cases above, the indemnification obligation generally survives the termination of the agreement for some extended period, although the Company believes the obligation typically has the most relevance during the contract term and for a short period of time thereafter. The maximum potential amount of future payments that the Company could be required to make under these provisions is generally unlimited. The Company has purchased insurance policies covering personal injury, property damage and general liability that reduce its exposure for indemnification and would enable it in many cases to recover all or a portion of any future amounts paid. The Company has never paid any material amounts to defend lawsuits or settle claims related to these indemnification provisions. Accordingly, the Company believes the estimated fair value of these indemnification arrangements is minimal. Other Contingencies The Company has certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a reserve for contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There were no material contingent liabilities accrued as of September 30, 2016 or December 31, 2015 . |
Basis of Presentation and Acc24
Basis of Presentation and Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared by Vertex Pharmaceuticals Incorporated ("Vertex" or the "Company") in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The condensed consolidated financial statements reflect the operations of (i) the Company, (ii) its wholly-owned subsidiaries and (iii) consolidated variable interest entities (VIEs). All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. 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 financial position and results of operations for the interim periods ended September 30, 2016 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 for the year ended December 31, 2015 , which are contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 that was filed with the Securities and Exchange Commission (the “SEC”) on February 16, 2016 (the " 2015 Annual Report on Form 10-K"). The Company has reclassified certain amounts in the condensed consolidated balance sheets for the period ended December 31, 2015 between Accounts receivables, net and Prepaid expenses and other current assets to conform to the current year presentation. |
Use of Estimates and Summary of Significant Accounting Policies | Use of Estimates and Summary of Significant Accounting Policies The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. Significant estimates in these condensed consolidated financial statements have been made in connection with the calculation of revenues, inventories, research and development expenses, stock-based compensation expense, restructuring expense, the fair value of intangible assets, goodwill, contingent consideration, noncontrolling interest, the consolidation of VIEs, leases, the fair value of cash flow hedges and the provision for or benefit from income taxes. The Company bases its estimates on historical experience and various other assumptions, including in certain circumstances future projections that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In 2014, the Financial Accounting Standards Board (“FASB”) issued amended guidance applicable to revenue recognition that will be effective for the year ending December 31, 2018. Early adoption is permitted for the year-ending December 31, 2017. The new guidance applies a more principle based approach to recognizing revenue. The new guidance must be adopted using either a full retrospective approach for all periods presented or a modified retrospective approach. The Company is in the process of evaluating the new guidance and determining the expected effect on its consolidated financial statements. In 2016, the FASB issued amended guidance applicable to leases that will be effective for the year ending December 31, 2019. Early adoption is permitted. This update requires an entity to recognize assets and liabilities for leases with lease terms of more than 12 months on the balance sheet. The Company is in the process of evaluating the new guidance and determining the expected effect on its consolidated financial statements. In 2016, the FASB issued amended guidance applicable to share-based compensation to employees that will be effective for the year ending December 31, 2017. Early adoption is permitted. This update simplifies the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The Company is in the process of evaluating the new guidance and determining the expected effect on its consolidated financial statements. In 2016, the FASB issued amended guidance for the classification of certain cash receipts and cash payments on the statement of cash flows to reduce existing diversity in practice. The new accounting guidance is effective for the year ending December 31, 2017. Early adoption is permitted. The Company is in the process of evaluating the new guidance and determining the expected effect on its consolidated financial statements. For a discussion of other recent accounting pronouncements please refer to Note A, “Nature of Business and Accounting Policies—Recent Accounting Pronouncements,” in the 2015 Annual Report on Form 10-K. The Company did not adopt any new accounting pronouncements during the nine months ended September 30, 2016 that had a material effect on its condensed consolidated financial statements. |
Product Revenues, Net (Tables)
Product Revenues, Net (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Product Revenues [Abstract] | |
Schedule of product revenue allowances and reserve categories | The following table summarizes activity in each of the product revenue allowance and reserve categories for the nine months ended September 30, 2016 : Trade Rebates, Product Other Total (in thousands) Balance at December 31, 2015 $ 2,089 $ 44,669 $ 1,228 $ 1,310 $ 49,296 Provision related to current period sales 14,680 98,242 1,631 5,547 120,100 Adjustments related to prior period sales (82 ) (1,081 ) (205 ) (80 ) (1,448 ) Credits/payments made (14,505 ) (70,718 ) (345 ) (5,607 ) (91,175 ) Balance at September 30, 2016 $ 2,182 $ 71,112 $ 2,309 $ 1,170 $ 76,773 |
Collaborative Arrangements (Tab
Collaborative Arrangements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fair Value Of Consideration Transferred | The consideration paid and the preliminary fair value of the contingent milestone and royalty payments payable by the Company pursuant to the agreement are set forth in the table below: June 4, 2015 (in thousands) Up-front payment $ 80,000 Fair value of contingent milestone and royalty payments 175,340 Total $ 255,340 |
Schedule of Collaborative Arrangement Activity Net Loss Attributable to Noncontrolling Interest | An aggregate summary of net loss attributable to noncontrolling interest related to the Company's VIEs for the three and nine months ended September 30, 2016 and 2015 is as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Loss attributable to noncontrolling interest before provision for income taxes $ 2,406 $ 1,743 $ 6,080 $ 3,322 (Benefit from) provision for income taxes (510 ) 777 20,063 30,367 (Increase) decrease in fair value of contingent milestone and royalty payments (1,200 ) (3,853 ) (59,350 ) (2,780 ) Net (income) loss attributable to noncontrolling interest $ 696 $ (1,333 ) $ (33,207 ) $ 30,909 |
Changes In Fair Value Of Contingent Consideration | During the three and nine months ended September 30, 2016 and 2015 , the increase (decrease) in the fair value of the contingent milestone and royalty payments related to the Company's VIEs was as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Parion $ 1,100 $ 4,481 $ 58,500 $ 2,860 BioAxone 100 (628 ) 850 (80 ) |
Schedule Of Collaborative Arrangement Summary Of Items Related To Variable Interest Entities | The following table summarizes items related to the Company's VIEs included in the Company's condensed consolidated balance sheets as of the dates set forth in the table: September 30, 2016 December 31, 2015 (in thousands) Restricted cash and cash equivalents (VIE) $ 58,420 $ 78,910 Prepaid expenses and other current assets 2,360 3,138 Intangible assets 284,340 284,340 Goodwill 19,391 19,391 Other assets 382 455 Accounts payable 1,122 676 Taxes payable 6,263 24,554 Other current liabilities 1,121 7,100 Deferred tax liability, net 133,270 110,438 Other liabilities 300 300 Noncontrolling interest 186,795 153,661 |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the final fair values of the assets and liabilities recorded on the effective date of the agreement: June 4, 2015 (in thousands) Intangible assets $ 255,340 Net assets attributable to noncontrolling interests (164,317 ) Deferred tax liability (91,023 ) Net other assets (liabilities) (10,468 ) Goodwill $ 10,468 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Potential gross common equivalent shares | The Company did not include the securities in the following table in the computation of the net loss per share attributable to Vertex common shareholders calculations because the effect would have been anti-dilutive during each period: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Stock options 12,947 12,025 12,947 12,025 Unvested restricted stock and restricted stock units 3,624 3,367 3,624 3,367 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial assets subject to fair value measurements (excluding restricted cash and cash equivalents (Alios)) | The following table sets forth the Company’s financial assets (excluding VIE cash and cash equivalents) and liabilities subject to fair value measurements: Fair Value Measurements as Fair Value Hierarchy Total Level 1 Level 2 Level 3 (in thousands) Financial assets carried at fair value: Cash equivalents: Money market funds $ 101,844 $ 101,844 $ — $ — Marketable securities: Government-sponsored enterprise securities 130,431 130,431 — — Corporate debt securities 146,942 — 146,942 — Commercial paper 131,376 — 131,376 — Prepaid and other current assets: Foreign currency forward contracts 7,644 — 7,644 — Other assets: Foreign currency forward contracts 217 — 217 — Total financial assets $ 518,454 $ 232,275 $ 286,179 $ — Financial liabilities carried at fair value: Other liabilities, current portion: Foreign currency forward contracts $ (1,459 ) $ — $ (1,459 ) $ — Other liabilities, excluding current portion: Foreign currency forward contracts (315 ) — (315 ) — Total financial liabilities $ (1,774 ) $ — $ (1,774 ) $ — Fair Value Measurements as Fair Value Hierarchy Total Level 1 Level 2 Level 3 (in thousands) Financial instruments carried at fair value (asset position): Cash equivalents: Money market funds $ 199,507 $ 199,507 $ — $ — Government-sponsored enterprise securities 85,994 85,994 — — Commercial paper 34,889 — 34,889 — Corporate debt securities 11,533 — 11,533 — Marketable securities: Government-sponsored enterprise securities 87,162 87,162 — — Commercial paper 99,123 — 99,123 — Corporate debt securities 141,409 — 141,409 — Prepaid and other current assets: Foreign currency forward contracts 5,161 — 5,161 — Other assets: Foreign currency forward contracts 605 $ — 605 $ — Total financial assets $ 665,383 $ 372,663 $ 292,720 $ — Financial instruments carried at fair value (liability position): Other liabilities, current portion: Foreign currency forward contracts $ (769 ) $ — $ (769 ) $ — Other liabilities, excluding current portion: Foreign currency forward contracts (132 ) — (132 ) — Total financial liabilities $ (901 ) $ — $ (901 ) $ — |
Marketable Securities (Tables)
Marketable Securities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Cash and Cash Equivalents [Abstract] | |
Summary of cash, cash equivalents and marketable securities | A summary of the Company’s cash, cash equivalents and marketable securities is shown below: Amortized Cost Gross Gross Fair Value (in thousands) As of September 30, 2016 Cash and cash equivalents: Cash and money market funds $ 719,692 $ — $ — $ 719,692 Total cash and cash equivalents $ 719,692 $ — $ — $ 719,692 Marketable securities: Government-sponsored enterprise securities (due within 1 year) 130,404 29 (2 ) 130,431 Commercial paper (due within 1 year) 131,099 277 — 131,376 Corporate debt securities (due within 1 year) 147,016 6 (80 ) 146,942 Total marketable securities $ 408,519 $ 312 $ (82 ) $ 408,749 Total cash, cash equivalents and marketable securities $ 1,128,211 $ 312 $ (82 ) $ 1,128,441 As of December 31, 2015 Cash and cash equivalents: Cash and money market funds $ 582,352 $ — $ — $ 582,352 Government-sponsored enterprise securities 85,994 — — 85,994 Commercial paper 34,889 — — 34,889 Corporate debt securities 11,533 — — 11,533 Total cash and cash equivalents $ 714,768 $ — $ — $ 714,768 Marketable securities: Government-sponsored enterprise securities (due within 1 year) $ 87,176 $ — $ (14 ) $ 87,162 Commercial paper (due within 1 year) 98,877 246 — 99,123 Corporate debt securities (due within 1 year) 141,515 — (106 ) 141,409 Total marketable securities $ 327,568 $ 246 $ (120 ) $ 327,694 Total cash, cash equivalents and marketable securities $ 1,042,336 $ 246 $ (120 ) $ 1,042,462 |
Accumulated Other Comprehensi30
Accumulated Other Comprehensive (Loss) Income (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | A summary of the Company's changes in accumulated other comprehensive (loss) income by component is shown below: Foreign Currency Translation Adjustment Unrealized Holding Gains on Marketable Securities Unrealized Gains (Losses) on Foreign Currency Forward Contracts, net of tax Total (in thousands) Balance at December 31, 2015 $ (2,080 ) $ 126 $ 3,778 $ 1,824 Other comprehensive (loss) income before reclassifications (7,709 ) 104 6,715 (890 ) Amounts reclassified from accumulated other comprehensive loss — — (4,779 ) (4,779 ) Net current period other comprehensive (loss) income $ (7,709 ) $ 104 $ 1,936 $ (5,669 ) Balance at September 30, 2016 $ (9,789 ) $ 230 $ 5,714 $ (3,845 ) Foreign Currency Translation Adjustment Unrealized Holding (Losses) Gains on Marketable Securities Unrealized Gains (Losses) on Foreign Currency Forward Contracts Total (in thousands) Balance at December 31, 2014 $ (971 ) $ (123 ) $ 2,011 $ 917 Other comprehensive (loss) income before reclassifications (164 ) 186 4,072 4,094 Amounts reclassified from accumulated other comprehensive loss — — (3,500 ) (3,500 ) Net current period other comprehensive (loss) income $ (164 ) $ 186 $ 572 $ 594 Balance at September 30, 2015 $ (1,135 ) $ 63 $ 2,583 $ 1,511 |
Hedging (Tables)
Hedging (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Cash Flow Hedging Instruments | The following table summarizes the notional amount of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges: As of September 30, 2016 As of December 31, 2015 Foreign Currency (in thousands) Euro $ 156,245 $ 103,362 British pound sterling 73,684 78,756 Australian dollar 26,550 27,167 Total foreign currency forward contracts $ 256,479 $ 209,285 |
Schedule of Foreign Exchange Contracts | The following table summarizes the fair value of the Company's outstanding foreign currency forward contracts designated as cash flow hedges under GAAP included on the Company's condensed consolidated balance sheets: As of September 30, 2016 Assets Liabilities Classification Fair Value Classification Fair Value (in thousands) Prepaid and other current assets $ 7,644 Other liabilities, current portion $ (1,459 ) Other assets 217 Other liabilities, excluding current portion (315 ) Total assets $ 7,861 Total liabilities $ (1,774 ) As of December 31, 2015 Assets Liabilities Classification Fair Value Classification Fair Value (in thousands) Prepaid and other current assets $ 5,161 Other liabilities, current portion $ (769 ) Other assets 605 Other liabilities, excluding current portion (132 ) Total assets $ 5,766 Total liabilities $ (901 ) |
Derivatives Offsetting | The following table summarizes the potential effect of offsetting derivatives by type of financial instrument on the Company's condensed consolidated balance sheets: As of September 30, 2016 Gross Amounts Recognized Gross Amounts Offset Gross Amounts Presented Gross Amounts Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 7,861 $ — $ 7,861 $ (1,774 ) $ 6,087 Total liabilities $ (1,774 ) $ — $ (1,774 ) $ 1,774 $ — As of December 31, 2015 Gross Amounts Recognized Gross Amounts Offset Gross Amounts Presented Gross Amounts Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 5,766 $ — $ 5,766 $ (901 ) $ 4,865 Total liabilities $ (901 ) $ — $ (901 ) $ 901 $ — |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories by Type | Inventories consisted of the following: As of September 30, 2016 As of December 31, 2015 (in thousands) Raw materials $ 9,824 $ 8,696 Work-in-process 46,057 40,695 Finished goods 15,918 7,816 Total $ 71,799 $ 57,207 |
Stock-based Compensation Expe33
Stock-based Compensation Expense (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation expense by line item | During the three and nine months ended September 30, 2016 and 2015 , the Company recognized the following stock-based compensation expense: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Stock-based compensation expense by type of award: Stock options $ 28,773 $ 39,074 $ 86,859 $ 105,720 Restricted stock and restricted stock units 30,966 26,203 88,107 78,274 ESPP share issuances 2,425 1,738 6,385 5,703 Less stock-based compensation expense capitalized to inventories (955 ) (1,281 ) (2,728 ) (3,318 ) Total stock-based compensation included in costs and expenses $ 61,209 $ 65,734 $ 178,623 $ 186,379 Stock-based compensation expense by line item: Research and development expenses $ 39,980 $ 44,701 $ 115,068 $ 124,550 Sales, general and administrative expenses 21,229 21,033 63,555 61,829 Total stock-based compensation included in costs and expenses $ 61,209 $ 65,734 $ 178,623 $ 186,379 |
Unrecognized stock-based compensation expense, net of estimated forfeitures | The following table sets forth the Company's unrecognized stock-based compensation expense, net of estimated forfeitures, by type of award and the weighted-average period over which that expense is expected to be recognized: As of September 30, 2016 Unrecognized Expense, Weighted-average (in thousands) (in years) Type of award: Stock options $ 185,148 2.66 Restricted stock and restricted stock units $ 206,336 2.57 ESPP share issuances $ 2,886 0.47 |
Stock options outstanding and exercisable | The following table summarizes information about stock options outstanding and exercisable at September 30, 2016 : Options Outstanding Options Exercisable Range of Exercise Prices Number Weighted-average Weighted-average Number Weighted-average (in thousands) (in years) (per share) (in thousands) (per share) $18.93–$20.00 137 1.35 $ 18.93 137 $ 18.93 $20.01–$40.00 1,816 3.32 $ 34.08 1,815 $ 34.07 $40.01–$60.00 1,937 5.89 $ 48.19 1,719 $ 48.57 $60.01–$80.00 1,348 7.38 $ 75.90 809 $ 75.51 $80.01–$100.00 4,598 8.74 $ 90.62 1,271 $ 89.38 $100.01–$120.00 1,627 8.33 $ 109.33 606 $ 109.29 $120.01–$134.69 1,484 8.80 $ 130.60 510 $ 130.06 Total 12,947 7.29 $ 80.99 6,867 $ 66.29 |
Restructuring Liabilities (Tabl
Restructuring Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Kendall Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Activity related to restructuring liability | The activities related to the restructuring liability for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Liability, beginning of the period $ 6,388 $ 9,924 $ 7,944 $ 11,596 Cash payments (5,340 ) (3,975 ) (13,104 ) (10,544 ) Cash received from subleases 2,866 2,919 8,882 8,194 Restructuring expense (income) 30 146 222 (232 ) Liability, end of the period $ 3,944 $ 9,014 $ 3,944 $ 9,014 |
Fan Pier Move Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Activity related to restructuring liability | The activities related to the restructuring liability for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Liability, beginning of the period $ 4,863 $ 9,017 $ 5,964 $ 33,390 Cash payments (4,199 ) (3,070 ) (10,451 ) (25,421 ) Cash received from subleases 2,539 1,820 7,308 1,820 Restructuring expense (income) 90 51 472 (1,971 ) Liability, end of the period $ 3,293 $ 7,818 $ 3,293 $ 7,818 |
Other Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Activity related to restructuring liability | The activities related to the Company's other restructuring liabilities for the three and nine months ended September 30, 2016 and 2015 were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 (in thousands) Liability, beginning of the period $ 1,233 $ 902 $ 1,450 $ 869 Cash payments (1,121 ) (1,559 ) (1,794 ) (2,782 ) Restructuring expense (112 ) 1,629 344 2,885 Liability, end of the period $ — $ 972 $ — $ 972 |
Basis of Presentation and Acc35
Basis of Presentation and Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2016segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Product Revenues, Net (Details)
Product Revenues, Net (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Product Revenue Allowance and Reserve [Roll Forward] | |
Balance at December 31, 2015 | $ 49,296 |
Provision related to current period sales | 120,100 |
Adjustments related to prior period sales | (1,448) |
Credits/payments made | (91,175) |
Balance at September 30, 2016 | 76,773 |
Trade Allowances | |
Product Revenue Allowance and Reserve [Roll Forward] | |
Balance at December 31, 2015 | 2,089 |
Provision related to current period sales | 14,680 |
Adjustments related to prior period sales | (82) |
Credits/payments made | (14,505) |
Balance at September 30, 2016 | 2,182 |
Rebates, Chargebacks and Discounts | |
Product Revenue Allowance and Reserve [Roll Forward] | |
Balance at December 31, 2015 | 44,669 |
Provision related to current period sales | 98,242 |
Adjustments related to prior period sales | (1,081) |
Credits/payments made | (70,718) |
Balance at September 30, 2016 | 71,112 |
Product Returns | |
Product Revenue Allowance and Reserve [Roll Forward] | |
Balance at December 31, 2015 | 1,228 |
Provision related to current period sales | 1,631 |
Adjustments related to prior period sales | (205) |
Credits/payments made | (345) |
Balance at September 30, 2016 | 2,309 |
Other Incentives | |
Product Revenue Allowance and Reserve [Roll Forward] | |
Balance at December 31, 2015 | 1,310 |
Provision related to current period sales | 5,547 |
Adjustments related to prior period sales | (80) |
Credits/payments made | (5,607) |
Balance at September 30, 2016 | $ 1,170 |
Collaborative Arrangements - Cy
Collaborative Arrangements - Cystic Fibrosis Foundation Therapeutics Incorporated (Details) - USD ($) | Oct. 13, 2016 | Sep. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Collaborative revenues | $ 259,000 | $ 1,546,000 | $ 1,008,000 | $ 2,999,000 | |||
Cystic Fibrosis Foundation Therapeutics Incorporated | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Milestone Payments | $ 13,900,000 | ||||||
Milestone Revenues | $ 13,900,000 | ||||||
Additional Milestone Payments | $ 0 | ||||||
Subsequent Event | Cystic Fibrosis Foundation Therapeutics Incorporated | |||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||
Collaborative funding | $ 75,000,000 | ||||||
Additional Collaborative Funding | $ 6,000,000 |
Collaborative Arrangements - CR
Collaborative Arrangements - CRISPR Therapeutics AG (Details) - CRISPR Therapeutics | 1 Months Ended | 3 Months Ended | |
Oct. 31, 2016USD ($) | Oct. 31, 2015USD ($)target | Jun. 30, 2016USD ($) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Right to license, number of targets (up to) | target | 6 | ||
Up-front payment | $ 75,000,000 | ||
Investment in collaborative partner, pursuant to convertible loan agreement | 30,000,000 | $ 3,100,000 | |
Collaborative funding | 75,000,000 | ||
Collaborative arrangement development and regulatory potential milestone payments maximum | $ 420,000,000 | ||
Prior to marketing approval, time period of notice required to terminate (in days) | 90 days | ||
Subsequent to marketing approval, time period of notice required to terminate (in days) | 270 days | ||
Subsequent Event | |||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Investment in collaborative partner, pursuant to convertible loan agreement | $ 10,000,000 |
Collaborative Arrangements - Pa
Collaborative Arrangements - Parion Sciences, Inc. (Details) - USD ($) | Jun. 04, 2015 | Jun. 30, 2015 | Sep. 30, 2016 | Dec. 31, 2015 |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||||
Intangible assets | $ 284,340,000 | $ 284,340,000 | ||
Deferred tax liability, net | (133,270,000) | (110,439,000) | ||
Goodwill | $ 50,384,000 | $ 50,384,000 | ||
Parion Sciences, Inc | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Business Acquisition Contingent Consideration Commercial Milestones And Royalties Discount Rate | 6.60% | |||
Prior to marketing approval, time period of notice required to terminate (in days) | 90 days | |||
Subsequent to marketing approval, time period of notice required to terminate (in days) | 180 days | |||
Change of control prior to clinical trial, time period of notice required to terminate (in days) | 30 days | |||
Term of agreement following first commercial sale (in years) | 10 years | |||
Business Acquisition Contingent Consideration Development Milestones Discount Rate Low End Of Range | 4.10% | |||
Business Acquisition Contingent Consideration Development Milestones Discount Rate High End Of Range | 5.90% | |||
Business Combination, Consideration Transferred [Abstract] | ||||
Up-front payment | $ 80,000,000 | $ 80,000,000 | ||
Business Combination, Liabilities Arising from Contingencies, Amount Recognized | 175,340,000 | |||
Business Combination, Consideration Transferred | 255,340,000 | |||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||||
Intangible assets | 255,340,000 | 255,300,000 | ||
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net | (164,317,000) | |||
Deferred tax liability, net | (91,023,000) | |||
Other Liabilities Assets Net | (10,468,000) | |||
Goodwill | $ 10,468,000 | |||
ENaC Inhibitors in CF | Parion Sciences, Inc | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Collaborative arrangement development and regulatory potential milestone payments maximum | 490,000,000 | |||
Collaborative arrangement regulatory potential milestone payments maximum, global filling and approval | 360,000,000 | |||
Enac Inhibitors in Non Cf | Parion Sciences, Inc | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Collaborative arrangement development and regulatory potential milestone payments maximum | 370,000,000 | |||
Additional Enac Inhibitors | Parion Sciences, Inc | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Collaborative arrangement development and regulatory potential milestone payments maximum | $ 230,000,000 |
Collaborative Arrangements - Bi
Collaborative Arrangements - BioAxone Biosciences, Inc. (Details) - BioAxone Biosciences Inc - USD ($) | 1 Months Ended | 3 Months Ended |
Oct. 31, 2014 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Up-front payment | $ 10,000,000 | |
Maximum license fees and milestone payments | $ 90,000,000 | |
In-process research and development intangible asset | 29,000,000 | |
Deferred tax liability attributable to BioAxone | $ 11,300,000 | |
Purchase option, term of extension of expiration date (in years) | 1 year |
Collaborative Arrangements - Ag
Collaborative Arrangements - Aggregate VIE Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Jun. 30, 2015 | Jun. 04, 2015 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |||||||
(Benefit from) provision for income taxes | $ (503) | $ (1,330) | $ (24,118) | $ (31,760) | |||
Net (income) loss attributable to noncontrolling interest | 696 | (1,333) | (33,207) | 30,909 | |||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net: | |||||||
Restricted cash and cash equivalents (VIE) | 58,420 | 58,420 | $ 78,910 | ||||
Prepaid expenses and other current assets | 61,012 | 61,012 | 54,736 | ||||
Intangible assets | 284,340 | 284,340 | 284,340 | ||||
Goodwill | 50,384 | 50,384 | 50,384 | ||||
Other assets | 10,002 | 10,002 | 6,912 | ||||
Accounts payable | 50,914 | 50,914 | 74,942 | ||||
Other current liabilities | 292,015 | 292,015 | 305,820 | ||||
Deferred tax liability, net | 133,270 | 133,270 | 110,439 | ||||
Other liabilities | 30,524 | 30,524 | 31,778 | ||||
Noncontrolling interest | 186,795 | 186,795 | 153,661 | ||||
BioAxone Biosciences Inc | |||||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |||||||
Contingent consideration, liability | 28,800 | 28,800 | 28,000 | ||||
Parion Sciences, Inc | |||||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |||||||
(Benefit from) provision for income taxes | (500) | (20,100) | |||||
Contingent consideration, liability | 232,500 | 232,500 | 179,000 | ||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net: | |||||||
Intangible assets | $ 255,300 | $ 255,340 | |||||
Goodwill | 10,468 | ||||||
Deferred tax liability, net | $ 91,023 | ||||||
Variable Interest Entity, Primary Beneficiary | |||||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |||||||
Loss attributable to noncontrolling interest before provision for income taxes | 2,406 | 1,743 | 6,080 | 3,322 | |||
(Benefit from) provision for income taxes | (510) | 777 | 20,063 | 30,367 | |||
(Increase) decrease in fair value of contingent milestone and royalty payments | (1,200) | (3,853) | (59,350) | (2,780) | |||
Net (income) loss attributable to noncontrolling interest | 696 | (1,333) | (33,207) | 30,909 | |||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net: | |||||||
Restricted cash and cash equivalents (VIE) | 58,420 | 58,420 | 78,910 | ||||
Prepaid expenses and other current assets | 2,360 | 2,360 | 3,138 | ||||
Intangible assets | 284,340 | 284,340 | 284,340 | ||||
Goodwill | 19,391 | 19,391 | 19,391 | ||||
Other assets | 382 | 382 | 455 | ||||
Accounts payable | 1,122 | 1,122 | 676 | ||||
Taxes payable | 6,263 | 6,263 | 24,554 | ||||
Other current liabilities | 1,121 | 1,121 | 7,100 | ||||
Deferred tax liability, net | 133,270 | 133,270 | 110,438 | ||||
Other liabilities | 300 | 300 | 300 | ||||
Noncontrolling interest | 186,795 | 186,795 | $ 153,661 | ||||
Variable Interest Entity, Primary Beneficiary | BioAxone Biosciences Inc | |||||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |||||||
(Increase) decrease in fair value of contingent milestone and royalty payments | (100) | 628 | (850) | 80 | |||
Variable Interest Entity, Primary Beneficiary | Parion Sciences, Inc | |||||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |||||||
(Increase) decrease in fair value of contingent milestone and royalty payments | $ (1,100) | $ (4,481) | $ (58,500) | $ (2,860) |
Collaborative Arrangements - Ja
Collaborative Arrangements - Janssen Pharmaceuticals, Inc. (Details) - Janssen - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Up-front payment | $ 35 | ||||
Time period of notice required to terminate | 6 months | ||||
Reimbursement for development and commercialization of compounds | $ 2.8 | $ 4 | $ 10.6 | $ 18.7 |
Collaborative Arrangements - Mo
Collaborative Arrangements - Moderna Therapeutics, Inc. (Details) - Moderna Therapeutics, Inc. $ in Millions | 1 Months Ended |
Jul. 31, 2016USD ($) | |
Schedule of Collaborative Arrangement Agreements [Line Items] | |
Collaborative arrangement development and regulatory potential milestone payments maximum | $ 275 |
Collaborative Arrangement Approval and Reimbursement Milestones | 220 |
Collaborative Arrangement, Investment in Collaborative Partner, Amount | 20 |
Collaborative Arrangement Up-front License Fee | $ 20 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 12,947 | 12,025 | 12,947 | 12,025 |
Unvested restricted stock and restricted stock units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,624 | 3,367 | 3,624 | 3,367 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Level 3 | ||
Financial instruments carried at fair value (liability position): | ||
Term loan fair value | $ 297,800 | |
Recurring basis | ||
Financial assets carried at fair value: | ||
Total financial assets | 518,454 | $ 665,383 |
Financial instruments carried at fair value (liability position): | ||
Total financial liabilities | 1,774 | 901 |
Recurring basis | Money market funds | ||
Financial assets carried at fair value: | ||
Cash equivalents | 101,844 | 199,507 |
Recurring basis | Commercial paper | ||
Financial assets carried at fair value: | ||
Cash equivalents | 34,889 | |
Marketable securities | 131,376 | 99,123 |
Recurring basis | Government-sponsored enterprise securities | ||
Financial assets carried at fair value: | ||
Cash equivalents | 85,994 | |
Marketable securities | 130,431 | 87,162 |
Recurring basis | Corporate debt securities | ||
Financial assets carried at fair value: | ||
Cash equivalents | 11,533 | |
Marketable securities | 146,942 | 141,409 |
Recurring basis | Level 1 | ||
Financial assets carried at fair value: | ||
Total financial assets | 232,275 | 372,663 |
Financial instruments carried at fair value (liability position): | ||
Total financial liabilities | 0 | 0 |
Recurring basis | Level 1 | Money market funds | ||
Financial assets carried at fair value: | ||
Cash equivalents | 101,844 | 199,507 |
Recurring basis | Level 1 | Commercial paper | ||
Financial assets carried at fair value: | ||
Cash equivalents | 0 | |
Marketable securities | 0 | 0 |
Recurring basis | Level 1 | Government-sponsored enterprise securities | ||
Financial assets carried at fair value: | ||
Cash equivalents | 85,994 | |
Marketable securities | 130,431 | 87,162 |
Recurring basis | Level 1 | Corporate debt securities | ||
Financial assets carried at fair value: | ||
Cash equivalents | 0 | |
Marketable securities | 0 | 0 |
Recurring basis | Level 2 | ||
Financial assets carried at fair value: | ||
Total financial assets | 286,179 | 292,720 |
Financial instruments carried at fair value (liability position): | ||
Total financial liabilities | 1,774 | 901 |
Recurring basis | Level 2 | Money market funds | ||
Financial assets carried at fair value: | ||
Cash equivalents | 0 | 0 |
Recurring basis | Level 2 | Commercial paper | ||
Financial assets carried at fair value: | ||
Cash equivalents | 34,889 | |
Marketable securities | 131,376 | 99,123 |
Recurring basis | Level 2 | Government-sponsored enterprise securities | ||
Financial assets carried at fair value: | ||
Cash equivalents | 0 | |
Marketable securities | 0 | 0 |
Recurring basis | Level 2 | Corporate debt securities | ||
Financial assets carried at fair value: | ||
Cash equivalents | 11,533 | |
Marketable securities | 146,942 | 141,409 |
Recurring basis | Level 3 | ||
Financial assets carried at fair value: | ||
Total financial assets | 0 | 0 |
Financial instruments carried at fair value (liability position): | ||
Total financial liabilities | 0 | 0 |
Recurring basis | Level 3 | Money market funds | ||
Financial assets carried at fair value: | ||
Cash equivalents | 0 | 0 |
Recurring basis | Level 3 | Commercial paper | ||
Financial assets carried at fair value: | ||
Cash equivalents | 0 | |
Marketable securities | 0 | 0 |
Recurring basis | Level 3 | Government-sponsored enterprise securities | ||
Financial assets carried at fair value: | ||
Cash equivalents | 0 | |
Marketable securities | 0 | 0 |
Recurring basis | Level 3 | Corporate debt securities | ||
Financial assets carried at fair value: | ||
Cash equivalents | 0 | |
Marketable securities | 0 | 0 |
Prepaid and other current assets | Foreign currency forward contracts | Recurring basis | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | 7,644 | 5,161 |
Prepaid and other current assets | Foreign currency forward contracts | Recurring basis | Level 1 | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | 0 | 0 |
Prepaid and other current assets | Foreign currency forward contracts | Recurring basis | Level 2 | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | 7,644 | 5,161 |
Prepaid and other current assets | Foreign currency forward contracts | Recurring basis | Level 3 | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | 0 | 0 |
Other Assets | Foreign currency forward contracts | Recurring basis | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | 217 | 605 |
Other Assets | Foreign currency forward contracts | Recurring basis | Level 1 | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | 0 | 0 |
Other Assets | Foreign currency forward contracts | Recurring basis | Level 2 | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | 217 | 605 |
Other Assets | Foreign currency forward contracts | Recurring basis | Level 3 | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | 0 | 0 |
Other liabilities, current portion | Foreign currency forward contracts | Recurring basis | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | (1,459) | |
Financial instruments carried at fair value (liability position): | ||
Derivative liability current | (769) | |
Other liabilities, current portion | Foreign currency forward contracts | Recurring basis | Level 1 | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | 0 | |
Financial instruments carried at fair value (liability position): | ||
Derivative liability current | 0 | |
Other liabilities, current portion | Foreign currency forward contracts | Recurring basis | Level 2 | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | (1,459) | |
Financial instruments carried at fair value (liability position): | ||
Derivative liability current | (769) | |
Other liabilities, current portion | Foreign currency forward contracts | Recurring basis | Level 3 | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | 0 | |
Financial instruments carried at fair value (liability position): | ||
Derivative liability current | 0 | |
Other liabilities, excluding current portion | Foreign currency forward contracts | Recurring basis | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | (315) | |
Financial instruments carried at fair value (liability position): | ||
Derivative liability noncurrent | (132) | |
Other liabilities, excluding current portion | Foreign currency forward contracts | Recurring basis | Level 1 | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | 0 | |
Financial instruments carried at fair value (liability position): | ||
Derivative liability noncurrent | 0 | |
Other liabilities, excluding current portion | Foreign currency forward contracts | Recurring basis | Level 2 | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | (315) | |
Financial instruments carried at fair value (liability position): | ||
Derivative liability noncurrent | (132) | |
Other liabilities, excluding current portion | Foreign currency forward contracts | Recurring basis | Level 3 | ||
Financial assets carried at fair value: | ||
Foreign currency forward contracts | 0 | |
Financial instruments carried at fair value (liability position): | ||
Derivative liability noncurrent | $ 0 | |
Variable Interest Entity, Primary Beneficiary | BioAxone Biosciences Inc | Level 1 | ||
Financial instruments carried at fair value (liability position): | ||
Cash and cash equivalents | $ 57,900 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Summary of cash, cash equivalents and marketable securities | |||
Other than Temporary Impairment Losses, Investments | $ 0 | $ 0 | |
Amortized Cost | 1,128,211,000 | 1,128,211,000 | $ 1,042,336,000 |
Gross Unrealized Gains | 312,000 | 312,000 | 246,000 |
Gross Unrealized Losses | (82,000) | (82,000) | (120,000) |
Fair Value | 1,128,441,000 | 1,128,441,000 | 1,042,462,000 |
Available-for-sale Securities, Gross Realized Gains (Losses), Sale Proceeds | 0 | 0 | |
Total cash and cash equivalents | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 719,692,000 | 719,692,000 | 714,768,000 |
Gross Unrealized Gains | 0 | 0 | 0 |
Gross Unrealized Losses | 0 | 0 | 0 |
Fair Value | 719,692,000 | 719,692,000 | 714,768,000 |
Cash and money market funds | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 719,692,000 | 719,692,000 | 582,352,000 |
Gross Unrealized Gains | 0 | 0 | 0 |
Gross Unrealized Losses | 0 | 0 | 0 |
Fair Value | 719,692,000 | 719,692,000 | 582,352,000 |
Government-sponsored enterprise securities | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 85,994,000 | ||
Gross Unrealized Gains | 0 | ||
Gross Unrealized Losses | 0 | ||
Fair Value | 85,994,000 | ||
Commercial paper | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 34,889,000 | ||
Gross Unrealized Gains | 0 | ||
Gross Unrealized Losses | 0 | ||
Fair Value | 34,889,000 | ||
Corporate debt securities | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 11,533,000 | ||
Gross Unrealized Gains | 0 | ||
Gross Unrealized Losses | 0 | ||
Fair Value | 11,533,000 | ||
Total marketable securities | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 408,519,000 | 408,519,000 | 327,568,000 |
Gross Unrealized Gains | 312,000 | 312,000 | 246,000 |
Gross Unrealized Losses | (82,000) | (82,000) | (120,000) |
Fair Value | 408,749,000 | 408,749,000 | 327,694,000 |
Government-sponsored enterprise securities (due within 1 year) | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 130,404,000 | 130,404,000 | 87,176,000 |
Gross Unrealized Gains | 29,000 | 29,000 | 0 |
Gross Unrealized Losses | (2,000) | (2,000) | (14,000) |
Fair Value | 130,431,000 | 130,431,000 | 87,162,000 |
Commercial paper (due within 1 year) | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 131,099,000 | 131,099,000 | 98,877,000 |
Gross Unrealized Gains | 277,000 | 277,000 | 246,000 |
Gross Unrealized Losses | 0 | 0 | 0 |
Fair Value | 131,376,000 | 131,376,000 | 99,123,000 |
Corporate debt securities (due within 1 year) | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 147,016,000 | 147,016,000 | 141,515,000 |
Gross Unrealized Gains | 6,000 | 6,000 | 0 |
Gross Unrealized Losses | (80,000) | (80,000) | (106,000) |
Fair Value | $ 146,942,000 | $ 146,942,000 | $ 141,409,000 |
Accumulated Other Comprehensi47
Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at balance sheet date | $ 1,824 | $ 917 | ||
Other comprehensive (loss) income before reclassifications | (890) | 4,094 | ||
Amounts reclassified from accumulated other comprehensive loss | (4,779) | (3,500) | ||
Total changes in other comprehensive loss | $ (455) | $ 3,218 | (5,669) | 594 |
Balance at balance sheet date | (3,845) | 1,511 | (3,845) | 1,511 |
Foreign Currency Translation Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at balance sheet date | (2,080) | (971) | ||
Other comprehensive (loss) income before reclassifications | (7,709) | (164) | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Total changes in other comprehensive loss | (7,709) | (164) | ||
Balance at balance sheet date | (9,789) | (1,135) | (9,789) | (1,135) |
Unrealized Holding Gains on Marketable Securities | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at balance sheet date | 126 | (123) | ||
Other comprehensive (loss) income before reclassifications | 104 | 186 | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Total changes in other comprehensive loss | 104 | 186 | ||
Balance at balance sheet date | 230 | 63 | 230 | 63 |
Unrealized Gains (Losses) on Foreign Currency Forward Contracts, net of tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Balance at balance sheet date | 3,778 | 2,011 | ||
Other comprehensive (loss) income before reclassifications | 6,715 | 4,072 | ||
Amounts reclassified from accumulated other comprehensive loss | (4,779) | (3,500) | ||
Total changes in other comprehensive loss | 1,936 | 572 | ||
Balance at balance sheet date | $ 5,714 | $ 2,583 | $ 5,714 | $ 2,583 |
Hedging (Details)
Hedging (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Derivative [Line Items] | |||
Amount of Ineffectiveness on Net Investment Hedges | $ 0 | $ 0 | |
Offsetting Derivative Assets [Abstract] | |||
Gross Amounts Recognized | 7,861 | 7,861 | $ 5,766 |
Gross Amounts Offset | 0 | 0 | 0 |
Gross Amounts Presented | 7,861 | 7,861 | 5,766 |
Gross Amounts Not Offset | (1,774) | (1,774) | (901) |
Legal Offset | 6,087 | 6,087 | 4,865 |
Offsetting Derivative Liabilities [Abstract] | |||
Gross Amounts Recognized | (1,774) | (1,774) | (901) |
Gross Amounts Offset | 0 | 0 | 0 |
Gross Amounts Presented | (1,774) | (1,774) | (901) |
Gross Amounts Not Offset | 1,774 | 1,774 | 901 |
Legal Offset | 0 | 0 | 0 |
Prepaid and other current assets | |||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | |||
Fair Value - assets | 7,644 | 7,644 | 5,161 |
Other liabilities, current portion | |||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | |||
Fair Value - liabilities | (1,459) | (1,459) | (769) |
Other assets | |||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | |||
Fair Value - assets | 217 | 217 | 605 |
Other liabilities, excluding current portion | |||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | |||
Fair Value - liabilities | (315) | (315) | (132) |
Designated as hedging instrument | Foreign Currency Forward Contract | Cash Flow Hedging | |||
Derivative [Line Items] | |||
Notional amount of foreign currency forward contract | 256,479 | 256,479 | 209,285 |
Designated as hedging instrument | Euro | Foreign Currency Forward Contract | Cash Flow Hedging | |||
Derivative [Line Items] | |||
Notional amount of foreign currency forward contract | 156,245 | 156,245 | 103,362 |
Designated as hedging instrument | British pound sterling | Foreign Currency Forward Contract | Cash Flow Hedging | |||
Derivative [Line Items] | |||
Notional amount of foreign currency forward contract | 73,684 | 73,684 | 78,756 |
Designated as hedging instrument | Australian dollar | Foreign Currency Forward Contract | Cash Flow Hedging | |||
Derivative [Line Items] | |||
Notional amount of foreign currency forward contract | $ 26,550 | $ 26,550 | $ 27,167 |
Minimum | Foreign Currency Forward Contract | Cash Flow Hedging | |||
Derivative [Line Items] | |||
Derivative term | 1 month | ||
Maximum | Foreign Currency Forward Contract | Cash Flow Hedging | |||
Derivative [Line Items] | |||
Derivative term | 18 months |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 9,824 | $ 8,696 |
Work-in-process | 46,057 | 40,695 |
Finished goods | 15,918 | 7,816 |
Total | $ 71,799 | $ 57,207 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 1 Months Ended | ||||
Oct. 31, 2014 | Sep. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Jun. 04, 2015 | |
Indefinite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 284,340 | $ 284,340 | |||
Goodwill | 50,384 | 50,384 | |||
Parion Sciences, Inc | |||||
Indefinite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 255,300 | $ 255,340 | |||
Goodwill | $ 10,468 | ||||
BioAxone Biosciences Inc | |||||
Indefinite-Lived Intangible Assets [Line Items] | |||||
In-process research and development intangible asset | $ 29,000 | ||||
Variable Interest Entity, Primary Beneficiary | |||||
Indefinite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | 284,340 | 284,340 | |||
Goodwill | $ 19,391 | $ 19,391 | |||
Variable Interest Entity, Primary Beneficiary | BioAxone Biosciences Inc | |||||
Indefinite-Lived Intangible Assets [Line Items] | |||||
In-process research and development intangible asset | $ 29,000 | ||||
Indefinite-lived Intangible Assets | Variable Interest Entity, Primary Beneficiary | Parion Sciences, Inc | |||||
Indefinite-Lived Intangible Assets [Line Items] | |||||
Fair value inputs, discount rate (percent) | 7.10% | ||||
Indefinite-lived Intangible Assets | Variable Interest Entity, Primary Beneficiary | BioAxone Biosciences Inc | |||||
Indefinite-Lived Intangible Assets [Line Items] | |||||
Fair value inputs, discount rate (percent) | 7.50% |
Long-term Obligations - Fan Pie
Long-term Obligations - Fan Pier Leases (Details) $ in Thousands, ft² in Millions | 12 Months Ended | ||
Dec. 31, 2011ft²leasebuilding | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, net | $ 687,613 | $ 697,715 | |
Fan Pier Leases | |||
Property, Plant and Equipment [Line Items] | |||
Number of leases | lease | 2 | ||
Area of real estate property (in square feet) | ft² | 1.1 | ||
Number of buildings under lease agreement | building | 2 | ||
Optional term of lease agreement (in years) | 10 years | ||
Fan Pier Leases | Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Construction financing lease obligation, current and noncurrent | 472,700 | 473,000 | |
Fan Pier Leases | Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, net | $ 492,300 | $ 502,300 |
Long-term Obligations - San Die
Long-term Obligations - San Diego Lease (Details) - San Diego Lease $ in Millions | Dec. 02, 2015USD ($)ft²term_extension |
Property, Plant and Equipment [Line Items] | |
Area of real estate property (in square feet) | ft² | 170,000 |
Length of lease | 16 years |
Average yearly aggregate rent | $ | $ 10.2 |
Amount of optional renewal terms | term_extension | 2 |
Optional renewal term length | 5 years |
Long-term Obligations - Term Lo
Long-term Obligations - Term Loan (Details) - Senior Secured Term Loan - USD ($) | 1 Months Ended | |||
Oct. 31, 2016 | Jul. 31, 2014 | Sep. 30, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||||
Face amount of term loan | $ 300,000,000 | |||
Interest rate, stated percentage | 7.20% | |||
Unamortized discount on term loan | $ 5,300,000 | $ 2,100,000 | $ 4,600,000 | |
Minimum | ||||
Debt Instrument [Line Items] | ||||
Interest rate, stated percentage | 6.20% | |||
Minimum | LIBOR | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate (percent) | 5.00% | |||
Subsequent Event | ||||
Debt Instrument [Line Items] | ||||
Repayments of Debt | $ 300,000,000 | |||
Gain (Loss) on Extinguishment of Debt | $ 2,200,000 |
Long-term Obligations - Credit
Long-term Obligations - Credit Facility (Details) - Subsequent Event | Oct. 13, 2016USD ($) |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Fair Value of Amount Outstanding | $ 300,000,000 |
Line Of Credit Facility Additional Borrowing Capacity | 300,000,000 |
Line of Credit | |
Line of Credit Facility [Line Items] | |
Line of Credit Facility, Current Borrowing Capacity | 500,000,000 |
Debt Covenant, Minimum Consolidated EBITDA | $ 200,000,000 |
Debt Covenant, Consolidated Leverage Ratio | 3.00% |
Base Rate | Minimum | Line of Credit | |
Line of Credit Facility [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 0.75% |
Base Rate | Maximum | Line of Credit | |
Line of Credit Facility [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.50% |
Eurodollar | Minimum | Line of Credit | |
Line of Credit Facility [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 1.75% |
Eurodollar | Maximum | Line of Credit | |
Line of Credit Facility [Line Items] | |
Debt Instrument, Interest Rate, Stated Percentage | 2.50% |
Stock-based Compensation Expe55
Stock-based Compensation Expense - (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Stock-based compensation expense: | ||||
Less stock-based compensation expense capitalized to inventories | $ (955) | $ (1,281) | $ (2,728) | $ (3,318) |
Total stock-based compensation included in costs and expenses | 61,209 | 65,734 | 178,623 | 186,379 |
Stock options | ||||
Stock-based compensation expense: | ||||
Stock-based compensation expense by type of award: | 28,773 | 39,074 | 86,859 | 105,720 |
Type of award: | ||||
Unrecognized Expense, Net of Estimated Forfeitures | 185,148 | $ 185,148 | ||
Weighted-average recognition period (in years) | 2 years 7 months 28 days | |||
Restricted stock and restricted stock units | ||||
Stock-based compensation expense: | ||||
Stock-based compensation expense by type of award: | 30,966 | 26,203 | $ 88,107 | 78,274 |
Type of award: | ||||
Unrecognized Expense, Net of Estimated Forfeitures | 206,336 | $ 206,336 | ||
Weighted-average recognition period (in years) | 2 years 6 months 26 days | |||
ESPP share issuances | ||||
Stock-based compensation expense: | ||||
Stock-based compensation expense by type of award: | 2,425 | 1,738 | $ 6,385 | 5,703 |
Type of award: | ||||
Unrecognized Expense, Net of Estimated Forfeitures | 2,886 | $ 2,886 | ||
Weighted-average recognition period (in years) | 5 months 19 days | |||
Research and development expenses | ||||
Stock-based compensation expense: | ||||
Total stock-based compensation included in costs and expenses | 39,980 | 44,701 | $ 115,068 | 124,550 |
Sales, general and administrative expenses | ||||
Stock-based compensation expense: | ||||
Total stock-based compensation included in costs and expenses | $ 21,229 | $ 21,033 | $ 63,555 | $ 61,829 |
Stock-based Compensation Expe56
Stock-based Compensation Expense - Stock Options Outstanding and Exercisable (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2016$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Exercise price range, options outstanding (in shares) | shares | 12,947 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 7 years 3 months 15 days |
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 80.99 |
Exercise price range, options exercisable (in shares) | shares | 6,867 |
Exercise price range, options exercisable, weighted-average exercise price (usd per share) | $ 66.29 |
$18.93–$20.00 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Exercise price, low end of range (usd per share) | 18.93 |
Exercise price, high end of range (usd per share) | $ 20 |
Exercise price range, options outstanding (in shares) | shares | 137 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 1 year 4 months 6 days |
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 18.93 |
Exercise price range, options exercisable (in shares) | shares | 137 |
Exercise price range, options exercisable, weighted-average exercise price (usd per share) | $ 18.93 |
$20.01–$40.00 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Exercise price, low end of range (usd per share) | 20.01 |
Exercise price, high end of range (usd per share) | $ 40 |
Exercise price range, options outstanding (in shares) | shares | 1,816 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 3 years 3 months 26 days |
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 34.08 |
Exercise price range, options exercisable (in shares) | shares | 1,815 |
Exercise price range, options exercisable, weighted-average exercise price (usd per share) | $ 34.07 |
$40.01–$60.00 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Exercise price, low end of range (usd per share) | 40.01 |
Exercise price, high end of range (usd per share) | $ 60 |
Exercise price range, options outstanding (in shares) | shares | 1,937 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 5 years 10 months 21 days |
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 48.19 |
Exercise price range, options exercisable (in shares) | shares | 1,719 |
Exercise price range, options exercisable, weighted-average exercise price (usd per share) | $ 48.57 |
$60.01–$80.00 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Exercise price, low end of range (usd per share) | 60.01 |
Exercise price, high end of range (usd per share) | $ 80 |
Exercise price range, options outstanding (in shares) | shares | 1,348 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 7 years 4 months 17 days |
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 75.90 |
Exercise price range, options exercisable (in shares) | shares | 809 |
Exercise price range, options exercisable, weighted-average exercise price (usd per share) | $ 75.51 |
$80.01–$100.00 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Exercise price, low end of range (usd per share) | 80.01 |
Exercise price, high end of range (usd per share) | $ 100 |
Exercise price range, options outstanding (in shares) | shares | 4,598 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 8 years 8 months 27 days |
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 90.62 |
Exercise price range, options exercisable (in shares) | shares | 1,271 |
Exercise price range, options exercisable, weighted-average exercise price (usd per share) | $ 89.38 |
$100.01–$120.00 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Exercise price, low end of range (usd per share) | 100.01 |
Exercise price, high end of range (usd per share) | $ 120 |
Exercise price range, options outstanding (in shares) | shares | 1,627 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 8 years 3 months 29 days |
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 109.33 |
Exercise price range, options exercisable (in shares) | shares | 606 |
Exercise price range, options exercisable, weighted-average exercise price (usd per share) | $ 109.29 |
$120.01–$134.69 | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Exercise price, low end of range (usd per share) | 120.01 |
Exercise price, high end of range (usd per share) | $ 134.69 |
Exercise price range, options outstanding (in shares) | shares | 1,484 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 8 years 9 months 18 days |
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 130.60 |
Exercise price range, options exercisable (in shares) | shares | 510 |
Exercise price range, options exercisable, weighted-average exercise price (usd per share) | $ 130.06 |
Other Arrangements (Details)
Other Arrangements (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2008 | Sep. 30, 2016 | |
Sale of HIV Protease Inhibitor Royalty Stream | ||
Gross proceeds from sale of royalty rights receivable from GlaxoSmithKline | $ 160,000,000 | |
Deferred revenue royalty purchase agreement | $ 15,800,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||
Provision for income taxes | $ 503,000 | $ 1,330,000 | $ 24,118,000 | $ 31,760,000 | |
Income Tax Liability Associated With Variable Interest Entity | 0 | 0 | |||
Unrecognized tax benefits | 0 | 0 | $ 400,000 | ||
Income taxes, interest and penalties accrued | 0 | 0 | |||
Income taxes, material interest or penalties related to uncertain tax positions | 0 | $ 0 | |||
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations | 400,000 | ||||
Parion Sciences, Inc | |||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||
Provision for income taxes | $ 500,000 | $ 20,100,000 |
Restructuring Liabilities - Nar
Restructuring Liabilities - Narrative (Details) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2015ft²lease | Sep. 30, 2014facility | Dec. 31, 2003 | |
Kendall Restructuring | |||
Restructuring Cost and Reserve [Line Items] | |||
Lease term (in years) | 15 years | ||
Restructuring and related activities, leased office space, maximum percentage used - not more than | 50.00% | ||
Fan Pier Move Restructuring | |||
Restructuring Cost and Reserve [Line Items] | |||
Number of facilities decommissioned | facility | 3 | ||
Number of leases terminated | lease | 2 | ||
Area of real estate property (in square feet) | ft² | 120,000 | ||
Discount rate related to leases (percent) | 9.00% |
Restructuring Liabilities - Act
Restructuring Liabilities - Activity Related to Restructuring Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Restructuring activities | ||||
Restructuring expense (income) | $ 8 | $ 1,826 | $ 1,038 | $ 682 |
Kendall Restructuring | ||||
Restructuring activities | ||||
Liability, beginning of the period | 6,388 | 9,924 | 7,944 | 11,596 |
Cash payments | (5,340) | (3,975) | (13,104) | (10,544) |
Cash received from subleases | 2,866 | 2,919 | 8,882 | 8,194 |
Restructuring expense (income) | 30 | 146 | 222 | (232) |
Liability, end of the period | 3,944 | 9,014 | 3,944 | 9,014 |
Fan Pier Move Restructuring | ||||
Restructuring activities | ||||
Liability, beginning of the period | 4,863 | 9,017 | 5,964 | 33,390 |
Cash payments | (4,199) | (3,070) | (10,451) | (25,421) |
Cash received from subleases | 2,539 | 1,820 | 7,308 | 1,820 |
Restructuring expense (income) | 90 | 51 | 472 | (1,971) |
Liability, end of the period | 3,293 | 7,818 | 3,293 | 7,818 |
Other Restructuring | ||||
Restructuring activities | ||||
Liability, beginning of the period | 1,233 | 902 | 1,450 | 869 |
Cash payments | (1,121) | (1,559) | (1,794) | (2,782) |
Restructuring expense (income) | (112) | 1,629 | 344 | 2,885 |
Liability, end of the period | $ 0 | $ 972 | $ 0 | $ 972 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 |
Loss Contingencies [Line Items] | ||
Contingent liabilities | $ 0 | $ 0 |
Indemnification Claims | 0 | |
Restricted cash and cash equivalents | 21,900,000 | |
IBEW | ||
Loss Contingencies [Line Items] | ||
Legal reserves | $ 0 |