Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 10, 2017 | Jun. 30, 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-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Public Float | $ 21.1 | ||
Entity Common Stock, Shares Outstanding | 248,438,127 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||
Product revenues, net | $ 1,683,632 | $ 1,000,324 | $ 487,821 |
Royalty revenues | 16,600 | 23,959 | 40,919 |
Collaborative revenues | 1,945 | 8,053 | 51,675 |
Total revenues | 1,702,177 | 1,032,336 | 580,415 |
Costs and expenses: | |||
Cost of product revenues | 206,811 | 117,151 | 39,725 |
Royalty expenses | 3,649 | 7,361 | 21,262 |
Research and development expenses | 1,047,690 | 995,922 | 855,506 |
Sales, general and administrative expenses | 432,829 | 376,575 | 305,409 |
Restructuring expenses | 1,262 | 2,206 | 50,925 |
Total costs and expenses | 1,692,241 | 1,499,215 | 1,272,827 |
Income (loss) from operations | 9,936 | (466,879) | (692,412) |
Interest expense, net | (81,432) | (84,206) | (72,863) |
Other income (expense), net | 4,130 | (6,715) | 30,400 |
Loss from continuing operations before provision for income taxes | (67,366) | (557,800) | (734,875) |
Provision for income taxes | 16,665 | 30,381 | 6,958 |
Loss from continuing operations | (84,031) | (588,181) | (741,833) |
Loss from discontinued operations, net of tax benefit of $0, $0 and $0, respectively | 0 | 0 | (912) |
Net loss | (84,031) | (588,181) | (742,745) |
(Income) loss attributable to noncontrolling interest | (28,021) | 31,847 | 4,190 |
Net loss attributable to Vertex | (112,052) | (556,334) | (738,555) |
Loss from continuing operations | (112,052) | (556,334) | (737,643) |
Loss from discontinued operations | $ 0 | $ 0 | $ (912) |
Net loss from continuing operations: | |||
Basic (usd per share) | $ (0.46) | $ (2.31) | $ (3.14) |
Diluted (usd per share) | (0.46) | (2.31) | (3.14) |
Net loss from discontinued operations: | |||
Basic (usd per share) | 0 | 0 | 0 |
Diluted (usd per share) | 0 | 0 | 0 |
Net loss: | |||
Basic (usd per share) | (0.46) | (2.31) | (3.14) |
Diluted (usd per share) | $ (0.46) | $ (2.31) | $ (3.14) |
Shares used in per share calculations: | |||
Basic (in shares) | 244,685 | 241,312 | 235,307 |
Diluted (in shares) | 244,685 | 241,312 | 235,307 |
Consolidated Statements of Ope3
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Loss from discontinued operations, tax (benefit) provision | $ 0 | $ 0 | $ 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | |||
Net loss | $ (84,031) | $ (588,181) | $ (742,745) |
Changes in other comprehensive income (loss): | |||
Unrealized holding gains (losses) on marketable securities, net of tax | 17,395 | 249 | (165) |
Unrealized gains on foreign currency forward contracts, net of tax | 7,736 | 1,767 | 2,034 |
Foreign currency translation adjustment | (5,782) | (1,109) | (646) |
Total changes in other comprehensive income (loss) | 19,349 | 907 | 1,223 |
Comprehensive loss | (64,682) | (587,274) | (741,522) |
Comprehensive (income) loss attributable to noncontrolling interest | (28,021) | 31,847 | 4,190 |
Comprehensive loss attributable to Vertex | $ (92,703) | $ (555,427) | $ (737,332) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 1,183,945 | $ 714,768 |
Marketable securities, available-for-sale | 250,612 | 327,694 |
Restricted cash and cash equivalents (VIE) | 47,762 | 78,910 |
Accounts receivable, net | 201,083 | 173,838 |
Inventories | 77,604 | 57,207 |
Prepaid expenses and other current assets | 70,534 | 54,736 |
Total current assets | 1,831,540 | 1,407,153 |
Property and equipment, net | 698,362 | 697,715 |
Intangible assets | 284,340 | 284,340 |
Goodwill | 50,384 | 50,384 |
Cost method investments | 20,276 | 0 |
Note receivable | 0 | 30,000 |
Restricted cash | 52 | 22,083 |
Other assets | 11,833 | 6,912 |
Total assets | 2,896,787 | 2,498,587 |
Current liabilities: | ||
Accounts payable | 61,451 | 74,942 |
Accrued expenses | 315,249 | 305,820 |
Deferred revenues, current portion | 6,005 | 16,296 |
Accrued restructuring expense, current portion | 6,047 | 7,894 |
Capital lease obligations, current portion | 19,426 | 15,545 |
Senior secured term loan, current portion | 0 | 71,296 |
Customer deposits | 73,416 | 0 |
Credit facility | 300,000 | 0 |
Other liabilities, current portion | 10,943 | 14,374 |
Total current liabilities | 792,537 | 506,167 |
Deferred revenues, excluding current portion | 6,632 | 9,714 |
Accrued restructuring expense, excluding current portion | 1,907 | 7,464 |
Capital lease obligations, excluding current portion | 34,976 | 42,923 |
Deferred tax liability | 134,063 | 110,439 |
Construction financing lease obligation, excluding current portion | 486,359 | 472,611 |
Senior secured term loan, excluding current portion | 0 | 223,863 |
Other liabilities, excluding current portion | 102,122 | 31,778 |
Total liabilities | 1,558,596 | 1,404,959 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding at December 31, 2015 and 2014 | 0 | 0 |
Common stock, $0.01 par value; 500,000,000 shares authorized at December 31, 2016 and 2015; 248,300,517 and 246,306,818 shares issued and outstanding at December 31, 2016 and 2015, respectively | 2,450 | 2,427 |
Additional paid-in capital | 6,506,795 | 6,197,500 |
Accumulated other comprehensive income | 21,173 | 1,824 |
Accumulated deficit | (5,373,836) | (5,261,784) |
Total Vertex shareholders’ equity | 1,156,582 | 939,967 |
Noncontrolling interest | 181,609 | 153,661 |
Total shareholders’ equity | 1,338,191 | 1,093,628 |
Total liabilities and shareholders’ equity | $ 2,896,787 | $ 2,498,587 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (shares) | 248,300,517 | 246,306,818 |
Common stock, shares outstanding (shares) | 248,300,517 | 246,306,818 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity and Noncontrolling Interest - USD ($) shares in Thousands, $ in Thousands | Total | Total Vertex Shareholders' Equity | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Noncontrolling Interest |
Balance (shares) at Dec. 31, 2013 | 233,789 | ||||||
Balance at Dec. 31, 2013 | $ 1,356,405 | $ 1,356,405 | $ 2,320 | $ 5,321,286 | $ (306) | $ (3,966,895) | $ 0 |
Increase (Decrease) in Stockholders' Equity | |||||||
Other comprehensive income, net of tax | 1,223 | 1,223 | 1,223 | ||||
Net (loss) income | (742,745) | (738,555) | (738,555) | (4,190) | |||
Issuance of common stock under benefit plans (shares) | 7,975 | ||||||
Issuance of common stock under benefit plans | 274,808 | 274,808 | $ 65 | 274,743 | |||
Stock-based compensation expense | 178,965 | 178,965 | 178,965 | ||||
Tax benefit from equity compensation | 2,160 | 2,160 | 2,160 | ||||
Noncontrolling interest upon consolidation | 25,367 | 25,367 | |||||
Balance at Dec. 31, 2014 | 1,096,183 | 1,075,006 | $ 2,385 | 5,777,154 | 917 | (4,705,450) | 21,177 |
Balance (shares) at Dec. 31, 2014 | 241,764 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Other comprehensive income, net of tax | 907 | 907 | 907 | ||||
Net (loss) income | (588,181) | (556,334) | (556,334) | (31,847) | |||
Issuance of common stock under benefit plans (shares) | 4,543 | ||||||
Issuance of common stock under benefit plans | 185,290 | 185,276 | $ 42 | 185,234 | 14 | ||
Stock-based compensation expense | 235,112 | 235,112 | 235,112 | ||||
Tax benefit from equity compensation | 0 | 0 | 0 | ||||
Noncontrolling interest upon consolidation | 164,317 | 164,317 | |||||
Balance at Dec. 31, 2015 | 1,093,628 | 939,967 | $ 2,427 | 6,197,500 | 1,824 | (5,261,784) | 153,661 |
Balance (shares) at Dec. 31, 2015 | 246,307 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Other comprehensive income, net of tax | 19,349 | 19,349 | 19,349 | ||||
Net (loss) income | (84,031) | (112,052) | (112,052) | 28,021 | |||
Issuance of common stock under benefit plans (shares) | 1,994 | ||||||
Issuance of common stock under benefit plans | 68,006 | 68,006 | $ 23 | 67,983 | 0 | ||
Stock-based compensation expense | 241,239 | 241,312 | 241,312 | (73) | |||
Balance at Dec. 31, 2016 | $ 1,338,191 | $ 1,156,582 | $ 2,450 | $ 6,506,795 | $ 21,173 | $ (5,373,836) | $ 181,609 |
Balance (shares) at Dec. 31, 2016 | 248,301 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net loss | $ (84,031) | $ (588,181) | $ (742,745) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Stock-based compensation expense | 237,705 | 231,025 | 177,542 |
Depreciation and amortization expense | 61,398 | 62,343 | 63,257 |
Deferred income taxes | 16,961 | 3,283 | 281 |
Impairment of property and equipment | 0 | 2,516 | 1,689 |
Excess tax benefit from share-based payment arrangements | 0 | 0 | (2,160) |
Other non-cash items, net | 6,140 | 9,532 | 0 |
Changes in operating assets and liabilities, excluding the effects of the acquisition and deconsolidation of variable interest entities: | |||
Accounts receivable, net | (33,027) | (104,847) | 7,428 |
Inventories | (16,450) | (23,146) | (16,469) |
Prepaid expenses and other assets | (8,699) | (9,260) | (15,771) |
Accounts payable | (11,745) | (1,709) | 25,048 |
Accrued expenses and other liabilities | 88,649 | 102,746 | (63,183) |
Accrued restructuring expense | (7,426) | (30,492) | 17,502 |
Deferred revenues | (13,372) | (19,242) | (25,531) |
Net cash provided by provided by (used in) operating activities | 236,103 | (365,432) | (573,112) |
Cash flows from investing activities: | |||
Maturities of marketable securities | 757,562 | 1,067,443 | 1,557,938 |
Purchases of marketable securities | (616,625) | (633,041) | (1,424,172) |
Payment for acquisition of variable interest entity | 0 | (80,000) | (10,000) |
Expenditures for property and equipment | (56,563) | (45,302) | (51,201) |
Investment in note receivable | (20,000) | (30,000) | 0 |
Investment in CRISPR | (13,075) | 0 | 0 |
(Decrease) increase in restricted cash and cash equivalents | 22,029 | (21,981) | 0 |
Decrease in restricted cash and cash equivalents (VIE) | 31,148 | 11,685 | 1,638 |
Increase (decrease) in other assets | (7) | 52 | (244) |
Payments returned related to construction financing lease obligation | 0 | 0 | 8,050 |
Net cash provided by investing activities | 104,469 | 268,856 | 82,009 |
Cash flows from financing activities: | |||
Issuances of common stock under benefit plans | 68,230 | 185,592 | 274,615 |
Payments on construction financing lease obligation | (432) | (381) | (336) |
Proceeds from lease financing | 11,208 | 23,662 | 0 |
Payments on capital lease financing | (17,597) | (19,954) | (21,443) |
Proceeds from senior secured term loan | 0 | 0 | 294,243 |
Payments on senior secured term loan | (75,000) | 0 | 0 |
Proceeds from revolving credit facility | 74,965 | 0 | 0 |
Payments of debt issuance costs | (3,103) | 0 | 0 |
Advance from CFFT | 75,000 | 0 | 0 |
Excess tax benefit from share-based payment arrangements | 0 | 0 | 2,160 |
Net cash provided by financing activities | 133,271 | 188,919 | 549,239 |
Effect of changes in exchange rates on cash | (4,666) | (2,834) | (2,176) |
Net increase in cash and cash equivalents | 469,177 | 89,509 | 55,960 |
Cash and cash equivalents—beginning of period | 714,768 | 625,259 | 569,299 |
Cash and cash equivalents—end of period | 1,183,945 | 714,768 | 625,259 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 83,656 | 85,613 | 68,963 |
Cash (received from) paid for income taxes | (2,579) | 1,806 | 1,210 |
Non-cash investing and financing activities: | |||
Capitalization of costs related to construction financing lease obligation | 14,238 | 0 | 25,564 |
Assets acquired under capital lease obligations | 0 | 0 | 9,188 |
Issuances of common stock exercises from employee benefit plans receivable | 68 | 361 | 637 |
Proceeds from revolving credit facility directly paid to settle all outstanding obligations under the term loan | $ 225,000 | $ 0 | $ 0 |
Nature of Business and Accounti
Nature of Business and Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Nature of Business and Accounting Policies | Nature of Business and Accounting Policies Business Vertex Pharmaceuticals Incorporated (“Vertex” or the “Company”) is in the business of discovering, developing, manufacturing and commercializing medicines for serious diseases. The Company uses precision medicine approaches with the goal of creating transformative medicines for patients in specialty markets. The Company is focused on developing and commercializing therapies for the treatment of cystic fibrosis (“CF”) and advancing its research and development programs. The Company’s two marketed medicines are ORKAMBI and KALYDECO, which are approved to treat patients with CF who have specific mutations in their cystic fibrosis transmembrane conductance regulator (“CFTR”) gene. The Company’s net loss attributable to Vertex for 2016 was $112.1 million , or $0.46 per share. As of December 31, 2016 , the Company had cash, cash equivalents and marketable securities of $1.43 billion . The Company expects that cash flows from the sales of its products, together with the Company’s cash, cash equivalents and marketable securities, will be sufficient to fund its operations for at least the next twelve months. Vertex is subject to risks common to companies in its industry including, but not limited to, the dependence on revenues from ORKAMBI and KALYDECO, competition, uncertainty about clinical trial outcomes and regulatory approvals, uncertainties relating to pharmaceutical pricing and reimbursement, uncertainty related to international expansion, uncertain protection of proprietary technology, the need to comply with government regulations, share price volatility, dependence on collaborative relationships and potential product liability. Basis of Presentation The consolidated financial statements reflect the operations of (i) the Company, (ii) its wholly-owned subsidiaries and (iii) consolidated variable interest entities (VIEs). In addition, the consolidated financial statements for 2014 reflect the operations of Alios BioPharma, Inc. (“Alios”), a former collaborator, as well as direct expenses Vertex incurred as a result of the Company’s agreement with Alios, as discontinued operations. All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. Please refer to Note T, “Segment Information,” for enterprise-wide disclosures regarding the Company’s revenues, major customers and long-lived assets by geographic area. The Company has reclassified certain amounts in the consolidated balance sheets for the period ended December 31, 2015 between Accounts receivable, net and Prepaid expenses and other current assets to conform to the current year presentation. Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“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 consolidated financial statements, and the amounts of revenues and expenses during the reported periods. Significant estimates in these 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. Revenue Recognition 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 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 Customer’s 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. Trade Allowances: The Company generally provides invoice discounts on product sales to its Customers for prompt payment and pays fees for distribution services, such as fees for certain data that Customers provide to the Company. The payment terms for sales to Customers in the United States generally include a discount for payment within 30 days. The Company expects that, based on its experience, its Customers will earn these discounts and fees, and deducts the full amount of these discounts and fees from its gross product revenues and accounts receivable at the time such revenues are recognized. Rebates, Chargebacks and Discounts: The Company contracts with government agencies and various private organizations (collectively, its “Third-party Payors”) so that products will be eligible for purchase by, or partial or full reimbursement from, such Third-party Payors. The Company estimates the rebates, chargebacks and discounts it will provide to Third-party Payors and deducts these estimated amounts from its gross product revenues at the time the revenues are recognized. For each product, the Company estimates the aggregate rebates, chargebacks and discounts that it will provide to Third-party Payors based upon (i) the Company’s contracts with these Third-party Payors, (ii) the government-mandated discounts applicable to government-funded programs, (iii) information obtained from the Company’s Customers and other third-party data regarding the payor mix for such product and (iv) historical experience. Product Returns: The Company estimates the amount of each product that will be returned and deducts these estimated amounts from its gross revenues at the time the revenues are recognized. The Company’s Customers have the right to return unopened unprescribed packages, subject to contractual limitations. To date product returns have been minimal and, based on inventory levels held by its Customers and its distribution model, the Company believes that returns of its products will continue to be minimal. Other Incentives: Other incentives that the Company offers include co-pay mitigation rebates provided by the Company to commercially insured patients who have coverage and who reside in states that permit co-pay mitigation programs. The Company’s co-pay mitigation programs are intended to reduce each participating patient’s portion of the financial responsibility for a product’s purchase price to a specified dollar amount. Based upon the terms of the Company’s co-pay mitigation programs, the Company estimates average co-pay mitigation amounts for each of its products in order to establish its accruals for co-pay mitigation rebates and deducts these estimated amounts from its gross product revenues at the later of the date (i) the revenues are recognized or (ii) the incentive is offered. The Company’s co-pay mitigation rebates are subject to expiration. 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. ORKAMBI net product revenues do not include any revenues from product sales in France. The Company began distributing ORKAMBI through early access programs in the fourth quarter of 2015. The Company’s consolidated balance sheet includes $73.4 million collected as of December 31, 2016 in France related to ORKAMBI that is classified as customer deposits. The Company expects that revenues from these early access programs will be recognized in the period that a formal reimbursement agreement in France is reached based on the terms of such agreement. The following table summarizes activity in each of the product revenue allowance and reserve categories for the three years ended December 31, 2016 : Trade Rebates, Product Other Total (in thousands) 2016 Beginning Balance $ 2,089 $ 44,669 $ 1,228 $ 1,310 $ 49,296 Provision related to current period sales 20,075 134,198 3,047 6,602 163,922 Adjustments related to prior period sales (90 ) 154 (17 ) (151 ) (104 ) Credits/payments made (19,506 ) (97,094 ) (766 ) (6,547 ) (123,913 ) Ending Balance $ 2,568 $ 81,927 $ 3,492 $ 1,214 $ 89,201 2015 Beginning Balance $ 1,463 $ 29,102 $ 4,713 $ 745 $ 36,023 Provision related to current period sales 10,890 65,781 779 3,755 81,205 Adjustments related to prior period sales (214 ) (19,410 ) (993 ) (235 ) (20,852 ) Credits/payments made (10,050 ) (30,804 ) (3,271 ) (2,955 ) (47,080 ) Ending Balance $ 2,089 $ 44,669 $ 1,228 $ 1,310 $ 49,296 2014 Beginning Balance $ 1,535 $ 68,244 $ 15,799 $ 1,555 $ 87,133 Provision related to current period sales 8,468 35,713 2,478 1,347 48,006 Adjustments related to prior period sales (43 ) 329 3,056 (72 ) 3,270 Credits/payments made (8,497 ) (75,184 ) (16,620 ) (2,085 ) (102,386 ) Ending Balance $ 1,463 $ 29,102 $ 4,713 $ 745 $ 36,023 The Company adjusts its estimated rebates, chargebacks and discounts based on new information, including information regarding actual rebates, chargebacks and discounts for its products, as it becomes available. Claims by third-party payors for rebates, chargebacks and discounts frequently are submitted to the Company significantly after the related sales, potentially resulting in adjustments in the period in which the new information becomes known. In each of the periods presented, the Company’s adjustments relating to prior period sales principally related to the Company’s estimates for INCIVEK. During the fourth quarter of 2014, the Company withdrew INCIVEK from the market in the United States. Royalty Revenues The Company’s royalty revenues on commercial sales of INCIVO (telaprevir) by Janssen NV were based on net sales of licensed products in licensed territories as provided by Janssen NV. The Company recognized royalty revenues in the period the sales occured. The Company has sold its rights to receive certain royalties on sales of an HIV protease inhibitor (fosamprenavir) and recognizes the revenues related to this sale as royalty revenues. In the circumstance where the Company has sold its rights to future royalties under a license agreement and also maintains continuing involvement in the royalty arrangement (but not significant continuing involvement in the generation of the cash flows payable to the purchaser of the future royalty rights), the Company defers recognition of the proceeds it receives for the royalty stream and recognizes these deferred revenues over the life of the license agreement pursuant to the units-of-revenue method. The Company’s estimates regarding the estimated remaining royalty payments due to the purchaser have changed in the past and may change in the future. Collaborative Revenues The Company recognizes revenues generated through collaborative research, development and/or commercialization agreements. The terms of these agreements typically include payment to the Company of one or more of the following: nonrefundable, up-front license fees; development and commercial milestone payments; funding of research and/or development activities; payments for services the Company provides through its third-party manufacturing network; and royalties on net sales of licensed products. Each of these types of payments results in collaborative revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. For each collaborative research, development and/or commercialization agreement that result in revenues, the Company determines (i) whether multiple deliverables exist, (ii) whether the undelivered elements have value to the customer on a stand-alone basis, (iii) how the deliverables should be separated and (iv) how the consideration should be allocated to the deliverables. For arrangements entered into or materially modified after January 1, 2011, the Company allocates consideration in an arrangement using the relative selling price method based on management’s best estimate of selling price of deliverables if it does not have vendor-specific objective evidence or third-party evidence. As part of the accounting for these agreements, the Company must develop assumptions that require judgment to determine the best estimate of selling price. Key assumptions utilized by the Company to determine the best estimate of selling price may include forecasted revenues, patient enrollment requirements from regulatory authorities, development timelines, reimbursement rates for personnel costs, discount rates, and estimated third-party development costs. The Company evaluates amendments to its existing arrangements to determine whether they have been materially modified. In making its determination that an arrangement has been materially modified, the Company considers whether there have been significant changes to the consideration under the arrangement, the deliverables under the arrangement, the timing of deliverables and the period of the arrangement. If the arrangement is determined to have been materially modified, the Company allocates fixed consideration under the arrangement using its best estimate of selling price to the remaining undelivered elements at the date of material modification. Any consideration remaining after the allocation is recognized as revenue. Up-front License Fees: If the license to the Company’s intellectual property was determined to have stand-alone value from the other deliverables identified in the arrangement, the Company recognized revenues from nonrefundable, up-front license fees upon delivery. If these licenses did not have stand-alone value, the Company recognized revenues from nonrefundable, up-front license fees on a straight-line basis over the contracted or estimated period of performance. The Company evaluates the period of performance each reporting period and adjusts the period of performance on a prospective basis if there are changes to be made. Milestone Payments: At the inception of each agreement that included research and development milestone payments, the Company evaluated whether each milestone was substantive. The Company recognized revenues related to substantive milestones in full in the period in which the substantive milestone is achieved if payment is reasonably assured. If a milestone is not considered substantive, the Company recognized the applicable milestone payment over the period of performance. Research and Development Activities/Manufacturing Services: If the Company was entitled to reimbursement from its collaborators for specified research and development expenses and/or was entitled to payments for specified manufacturing services that the Company provided through its third-party manufacturing network, the Company determines whether the research and development funding would result in collaborative revenues or an offset to research and development expenses in accordance with the provisions of gross or net revenue presentation. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of money market funds and marketable securities. The Company places these investments with highly rated financial institutions, and, by policy, limits the amounts of credit exposure to any one financial institution. These amounts at times may exceed federally insured limits. The Company also maintains a foreign currency hedging program that includes foreign currency forward contracts with several counterparties. The Company has not experienced any credit losses related to these financial instruments and does not believe it is exposed to any significant credit risk related to these instruments. The Company also is subject to credit risk from its accounts receivable related to its product sales and collaborators. The Company evaluates the creditworthiness of each of its customers and has determined that all of its material customers are creditworthy. To date, the Company has not experienced significant losses with respect to the collection of its accounts receivable. The Company’s receivables from Greece, Italy, Portugal and Spain were not material at December 31, 2016. The Company believes that its allowance for doubtful accounts was adequate at December 31, 2016 . Please refer to Note T, “Segment Information,” for further information. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Marketable Securities The Company’s marketable securities consist of investments in government-sponsored enterprise securities, corporate debt securities, corporate equity securities and commercial paper that are classified as available-for-sale. The Company classifies marketable securities available to fund current operations as current assets on its consolidated balance sheets. Marketable securities are classified as long-term assets on the consolidated balance sheets if (i) they have been in an unrealized loss position for longer than one year and (ii) the Company has the ability and intent to hold them (a) until the carrying value is recovered and (b) such holding period may be longer than one year. The Company’s marketable securities are stated at fair value with their unrealized gains and losses included as a component of accumulated other comprehensive income (loss), which is a separate component of shareholders’ equity, until such gains and losses are realized. The fair value of these securities is based on quoted prices for identical or similar assets. The Company reviews investments in marketable securities for other-than-temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers whether it has an intent to sell, or whether it is more likely than not that the Company will be required to sell, the investment before recovery of the investment’s amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with the Company’s investment policy, the severity and the duration of the impairment and changes in value subsequent to year-end. If a decline in the fair value is considered other-than-temporary, based on available evidence, the unrealized loss is transferred from other comprehensive income (loss) to the consolidated statements of operations. Realized gains and losses are determined using the specific identification method and are included in other income (expense), net in the consolidated statements of operations. Accounts Receivable The Company deducts trade allowances for prompt payment and fees for distribution services from its accounts receivable based on its experience that the Company’s Customers will earn these discounts and fees. The Company’s estimates for its allowance for doubtful accounts, which have not been significant to date, are determined based on existing contractual payment terms and historical payment patterns. Stock-based Compensation Expense The Company expenses the fair value of employee stock options and other forms of stock-based employee compensation over the associated employee service period on a straight-line basis. Stock-based compensation expense is determined based on the fair value of the award at the grant date, net of estimated forfeitures, and is adjusted each period to reflect actual forfeitures and the outcomes of certain performance conditions. For awards with performance conditions that accelerate vesting of the award, the Company estimates the likelihood of satisfaction of the performance conditions, which affects the period over which the expense is recognized, and recognizes the expense using the accelerated attribution model. For awards with performance conditions in which the award does not vest unless the performance condition is met, the Company recognizes expense if, and to the extent that, the Company estimates that achievement of the performance condition is probable. If the Company concludes that vesting is probable, it recognizes expense from the date it reaches this conclusion through the estimated vesting date. Effective for equity awards granted on or after February 5, 2014, the Company provides to employees who have rendered a certain number of years’ to the Company and meet certain age requirements, partial or full acceleration of vesting of these equity awards, subject to certain conditions including a notification period, upon a termination of employment other than for cause. Approximately 5% of the Company’s employees were eligible for partial or full acceleration of any of their equity awards as of December 31, 2016. The Company recognizes stock-based compensation expense related to these awards over a service period reflecting qualified employees eligibility for partial or full acceleration of vesting. Research and Development Expenses The Company expenses as incurred all research and development expenses, including amounts funded by research and development collaborations. The Company capitalizes nonrefundable advance payments made by the Company for research and development activities and expenses the payments as the related goods are delivered or the related services are performed. Research and development expenses are comprised of costs incurred by the Company in performing research and development activities, including salary and benefits; stock-based compensation expense; laboratory supplies and other direct expenses; outsourced services, including clinical trial and pharmaceutical development costs; expenses associated with drug supplies that are not being capitalized; and infrastructure costs, including facilities costs and depreciation expense. Advertising Expenses The Company expenses the costs of advertising, including promotional expenses, as incurred. Advertising expenses, recorded in sales, general and administrative expenses, were $31.4 million , $24.5 million and $16.2 million in 2016 , 2015 and 2014 , respectively. Inventories The Company values its inventories at the lower-of-cost or market. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and writes down any excess and obsolete inventories to their realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases are capitalized and recorded upon sale in cost of product revenues in the consolidated statements of operations. Shipping and handling costs incurred for product shipments are recorded as incurred in cost of product revenues in the consolidated statements of operations. The Company capitalizes inventories produced in preparation for initiating sales of a drug candidate when the related drug candidate is considered to have a high likelihood of regulatory approval and the related costs are expected to be recoverable through sales of the inventories. In determining whether or not to capitalize such inventories, the Company evaluates, among other factors, information regarding the drug candidate’s safety and efficacy, the status of regulatory submissions and communications with regulatory authorities and the outlook for commercial sales, including the existence of current or anticipated competitive drugs and the availability of reimbursement. In addition, the Company evaluates risks associated with manufacturing the drug candidate and the remaining shelf-life of the inventories. Property and Equipment Property and equipment are recorded at cost. Depreciation expense is recorded using the straight-line method over the estimated useful life of the related asset, generally seven to ten years for furniture and equipment, three to five years for computers and software, 40 years for buildings and for leasehold improvements, the shorter of the useful life of the improvements or the estimated remaining life of the associated lease. Amortization expense of assets acquired under capital leases is included in depreciation expense. Maintenance and repairs to an asset that do not improve or extend its life are charged to operations. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in the Company’s consolidated statements of operations. The Company performs an assessment of the fair value of the assets if indicators of impairment are identified during a reporting period and records the assets at the lower of the net book value or the fair value of the assets. The Company capitalizes internal costs incurred to develop software for internal use during the application development stage. The Company expenses costs related to the planning and post-implementation phases of development of software for internal use as these costs are incurred. Maintenance and enhancement costs (including costs in the post-implementation stages) are expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the software resulting in added functionality, in which case the costs are capitalized. Amortization of capitalized internally developed software costs is recorded in depreciation expense over the useful life of the related asset. The Company records certain construction costs incurred by a landlord as an asset and a corresponding financing obligation on the Company’s consolidated balance sheets when the Company is determined to be the owner of the buildings during construction for accounting purposes. Upon completion of the project, the Company performs a sale-leaseback analysis to determine if the Company can remove the assets from its consolidated balance sheet. Capital Leases The assets and liabilities associated with capital lease agreements are recorded at the present value of the minimum lease payments at the inception of the lease agreement. The assets are depreciated using the straight-line method over the shorter of the useful life of the related asset or the remaining life of the associated lease. Amortization of assets that the Company leases pursuant to a capital lease is included in depreciation expense. The Company performs an assessment of the fair value of the assets if indicators of impairment are identified during a reporting period and records the assets at the lower of the net book value or the fair value of the assets. Assets recorded under capital leases are recorded within “Property and equipment, net” and liabilities related to those assets are recorded within “Capital lease obligations, current portion” and “Capital lease obligations, excluding current portion” on the Company’s consolidated balance sheets. Income Taxes Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the income tax bases of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company records liabilities related to uncertain tax positions by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company does not believe any such uncertain tax positions currently pending will have a material adverse effect on its consolidated financial statements. Variable Interest Entities The Company reviews each collaboration agreement pursuant to which the Company licenses assets owned by a collaborator in order to determine whether or not the Company has a variable interest via the license agreement with the collaborator and if the variable interest is a variable interest in the collaborator as a whole. In assessing whether the Company has a variable interest in the collaborator as a whole, the Company considers and makes judgments regarding the purpose and design of the entity, the value of the licensed assets to the collaborator and the significant activities of the collaborator. If the Company has a variable interest in the collaborator as a whole, the Company assesses whether or not the Company is the primary beneficiary of that VIE based on a number of factors, including (i) which party has the power to direct the activities that most significantly affect the VIE’s economic performance, (ii) the parties’ contractual rights and responsibilities pursuant to the collaboration agreement and (iii) which party has the obligation to absorb losses of or the right to receive benefits from the VIE that could be significant to the VIE. If the Company determines it is the primary beneficiary of a VIE at the onset of the collaboration agreement, the collaboration is treated as a business combination and the Company consolidates the financial statements of the VIE into the Company’s consolidated financial statements. The Company evaluates whether it continues to be the primary beneficiary of any consolidated VIEs on a quarterly basis. If the Company determines that it is no longer the primary beneficiary of a consolidated VIE, or no longer has a variable interest in the VIE, it deconsolidates the VIE in the period that the determination is made. Assets recorded as a result of consolidating VIEs’ financial results into the Company’s consolidated balance sheet do not represent additional assets that could be used to satisfy claims against the Company’s general assets. With respect to the Company’s VIEs, the VIEs’ assets are not significant, except for the VIEs’ cash and cash equivalents. The Company records the cash and cash equivalents of consolidated VIEs as restricted cash because the Company does not have control over the VIEs’ cash and cash equivalents. The Company also has recorded the liabilities of its consolidated VIEs for which creditors do not have recourse to the Company’s general assets outside of the VIE. Fair Value of In-process Research and Development Assets and Contingent Payments The present-value models used to estimate the fair values of research and development assets and contingent payments pursuant to collaborations incorporate significant assumptions, including: assumptions regarding the probability of obtaining marketing approval and/or achieving relevant development milestones for a drug candidate; estimates regarding the timing of and the expected costs to develop a drug candidate; estimates of future cash flows from potential product sales and/or the potential to ac |
Collaborative Arrangements
Collaborative Arrangements | 12 Months Ended |
Dec. 31, 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 tezacaftor. For combination products, such as ORKAMBI, sales will be allocated equally to each of the active pharmaceutical ingredients in the combination product. 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 payment of $75.0 million and agreed to provide development funding to the Company of up to $6.0 million annually. The upfront payment plus any future development funding represent a form of financing pursuant to Accounting Standards Codification (ASC) 730, Research and Development , and thus the amounts are recorded as a liability on the consolidated balance sheet, primarily reflected in Other liabilities, excluding current portion. The liability is reduced over the estimated royalty term of the agreement. Reductions in the liability are reflected as an offset to cost of product revenues and as interest expense. 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 tezacaftor 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 tezacaftor that expire in 2027 and 2028, respectively, subject to potential extension. CRISPR Therapeutics AG On October 26, 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 was classified as a long-term asset on the Company’s consolidated balance sheet in 2015. 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 purchased $10.0 million of common shares at the public offering price and the Company's preferred stock investments in CRISPR converted into common shares. Pursuant to the terms of a lockup agreement between the Company and the underwriters of CRISPR’s initial public offering, the Company agreed not to sell or otherwise dispose of its shares in CRISPR through April 17, 2017. As of December 31, 2016, the Company recorded the CRISPR common shares it holds at fair value and included the fair value of the common shares in its marketable securities and the unrecognized gain related to these common shares in accumulated other comprehensive income (loss) on the consolidated balance sheet. 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 (VIE) 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 consolidated financial statements as VIEs. In order to account for the fair value of the contingent payments, which consist of milestone, royalty and option 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 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 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 CF and all 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. In the second quarter of 2016, Parion earned a milestone payment of $5.0 million based upon the achievement of a specified milestone under the Parion Agreement. 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 it has a variable interest in Parion via the Parion Agreement, and that the variable interest represents a variable interest in Parion as a whole since the fair value of the ENaC inhibitors represents more than half of the total fair value of Parion’s assets. The Company also concluded that it is the primary beneficiary as it has the power to direct the activities that most significantly affect the economic performance of Parion and it has the obligation to absorb losses and right to receive benefits that potentially could be significant to 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 to be transferred 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 and (iii) the estimated fair value of potential royalty payments. The Company valued the contingent 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 up-front payment made and the fair value of the contingent payments payable by the Company pursuant to the Parion Agreement are set forth in the table below: June 4, 2015 (in thousands) Up-front payment $ 80,000 Fair value of contingent payments 175,340 Total $ 255,340 Allocation of Assets and Liabilities The Company recorded the fair value of the assets and liabilities of Parion on the effective date of the agreement as follows: June 4, 2015 (in thousands) Consideration transferred $ — Noncontrolling interest 164,317 Intangible assets (255,340 ) Net other liabilities 10,468 Deferred tax liability 91,023 Goodwill $ 10,468 While there was a transfer of $80.0 million to Parion, the cash remained within the Company’s consolidated financial statements since Parion is part of the consolidated entity. The cash is classified as restricted cash and cash equivalents (VIE) within the consolidated balance sheet as it is attributed to the noncontrolling interest holders of Parion. When determining the valuation of goodwill, the fair value of consideration for the license is zero since there was no consideration transferred outside the consolidated financial statements. The Company recorded $255.3 million of intangible assets on the Company's consolidated balance sheets 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 also recorded the fair value of the net assets attributable to noncontrolling interest and 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 values of the consideration and noncontrolling interest 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”), which resulted in the consolidation of BioAxone as a VIE beginning on October 1, 2014. The Company determined that BioAxone is a VIE based on, among other factors, the significance to BioAxone of VX-210, which was licensed to the Company pursuant to the BioAxone Agreement, and on the Company’s power to direct the activities that most significantly affect the economic performance of BioAxone. Accordingly, the Company consolidated BioAxone’s financial statements beginning in October 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. Alios BioPharma, Inc. In 2011, the Company entered into a license and collaboration agreement (the “Alios Agreement”) with Alios, which terminated in the fourth quarter of 2014. Pursuant to the Alios Agreement, which resulted in the consolidation of Alios as a VIE through December 31, 2013, the Company and Alios collaborated on the research, development and commercialization of HCV nucleotide analogues discovered by Alios. As of September 30, 2014, the Company concluded that it no longer had significant continuing involvement with Alios due to its intent and ability to terminate the Alios Agreement, among other factors, and the operations of Alios are presented as discontinued operations in these consolidated financial statements for 2014. Aggregate VIE Financial Information An aggregate summary of net loss attributable to noncontrolling interest related to the Company’s VIEs for the three years ended December 31, 2016 was as follows: 2016 2015 2014 (in thousands) Loss attributable to noncontrolling interest before provision for income taxes $ 10,086 $ 6,646 $ 764 Provision for income taxes 16,743 29,731 3,876 Increase in fair value of contingent payments (54,850 ) (4,530 ) (450 ) Net (income) loss attributable to noncontrolling interest $ (28,021 ) $ 31,847 $ 4,190 During the years ended December 31, 2016 and 2015 , the noncontrolling interest holders’ claim to net assets with respect to the contingent payments related to the Parion Agreement, increased by $64.8 million and $3.6 million , respectively. The increase in the fair value of the contingent payments related to the Parion Agreement in 2016 was primarily due to a Phase 2 clinical trial of VX-371 achieving its primary safety endpoint in the second quarter of 2016 offset by a payment of $5.0 million related to the achievement of a specified milestone under the Parion Agreement. The changes in the fair value of the contingent payments were also due to the changes in market interest rates and the time value of money. As of December 31, 2016 and 2015 , the fair value of the contingent payments related to the Parion Agreement was $238.8 million and $179.0 million , respectively. During the year ended December 31, 2016 , the noncontrolling interest holders’ claim to net assets with respect to the contingent payments related to the BioAxone Agreement decreased by $10.0 million . The decrease in the fair value of the contingent payments was due to changes in certain assumptions used in establishing the fair value including revenue assumptions and the development timeline. During the year ended December 31, 2015 and 2014 , the fair value of the contingent payments related to the BioAxone Agreement increased by $0.9 million and $0.5 million , respectively. As of December 31, 2016 and 2015 , the fair value of the contingent payments related to the BioAxone Agreement was $18.0 million and $28.0 million , respectively. The following table summarizes items related to the Company’s VIEs included in the Company’s consolidated balance sheets as of the dates set forth in the table: December 31, 2016 December 31, 2015 (in thousands) Restricted cash and cash equivalents (VIE) $ 47,762 $ 78,910 Prepaid expenses and other current assets 6,812 3,138 Intangible assets 284,340 284,340 Goodwill 19,391 19,391 Other assets 399 455 Accounts payable 415 676 Taxes payable 1,330 24,554 Other current liabilities 2,137 7,100 Deferred tax liability, net 131,446 110,438 Other liabilities 300 300 Noncontrolling interest 181,609 153,661 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 sheets 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 JNJ-3872 (formerly VX-787). The Company received non-refundable payments of $35.0 million from Janssen Inc. in 2014, which were recorded as collaborative revenues. 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. is responsible for costs related to the development and commercialization of the compounds. The Company recorded reimbursement for these development activities of $14.7 million , $22.8 million and $9.1 million in 2016 , 2015 and 2014 , respectively. The reimbursements are recorded as a reduction to development expense in the Company’s consolidated statements of operations primarily due to the fact that Janssen Inc. directs the activities and selects the suppliers associated with these activities. Janssen Inc. may terminate the Janssen Influenza Agreement, subject to certain exceptions, upon six months’ notice. Janssen Pharmaceutica NV The Company has a collaboration agreement (the “Janssen HCV Agreement”) with Janssen Pharmaceutica NV (“Janssen NV”) for the development, manufacture and commercialization of telaprevir, which Janssen NV began marketing under the brand name INCIVO in certain of its territories in September 2011. Pursuant to the Janssen HCV Agreement, as amended, Janssen NV has a fully-paid license to manufacture and commercialize INCIVO in its territories including Europe, South America, the Middle East, Africa and Australia, subject to the payment of third-party royalties on net sales of INCIVO. In addition to the collaborative revenues, the Company recorded royalty revenues and corresponding royalty expenses related to third-party royalties that Janssen NV remains responsible for based on INCIVO net sales. During the three years ended December 31, 2016 , the Company recognized the following revenues attributable to the Janssen HCV collaboration: 2016 2015 2014 (in thousands) Royalty revenues $ 71 $ 1,518 $ 13,481 Collaborative revenues $ (155 ) $ 1,946 $ 7,104 Total revenues attributable to the Janssen HCV collaboration $ (84 ) $ 3,464 $ 20,585 Subsequent Event Merck KGaA On January 10, 2017, the Company entered into a Strategic Collaboration and License Agreement (the “Merck KGaA Agreement”) with Merck KGaA, Darmstadt, Germany (“Merck KGaA”). Pursuant to the Merck KGaA Agreement, the Company granted Merck KGaA an exclusive worldwide license to research, develop and commercialize four oncology research and development programs. Under the Merck KGaA Agreement, the Company granted Merck KGaA exclusive, worldwide rights to our two clinical-stage programs targeting DNA damage repair: its ataxia telangiectasia and Rad3-related protein inhibitor program, including VX-970 and VX-803, and its DNA-dependent protein kinase inhibitor program, including VX-984. In addition, the Company granted Merck KGaA exclusive, worldwide rights to two pre-clinical programs. Under the Merck KGaA Agreement, the Company will receive an up-front payment of $230.0 million . In addition, it will receive tiered royalties on potential sales of licensed products, calculated as a percentage of net sales, that range from (i) mid-single digits to mid-twenties for clinical-stage programs and (ii) mid-single digits to high single digits for the pre-clinical research programs. Merck KGaA will assume full responsibility for development and commercialization costs for all programs. The licenses granted pursuant to the Merck KGaA Agreement and the up-front payment are subject to the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act. Merck KGaA may terminate the Merck KGaA Agreement or any individual program by providing 90 days’ notice, or, in the case of termination of a program with a product that has received marketing approval, 180 days’ notice. The Merck KGaA Agreement may also be terminated by either party for a material breach by the other party, subject to notice and cure provisions. Unless earlier terminated, the Merck KGaA Agreement will continue in effect until the date on which the royalty term and all payment obligations with respect to all products in all countries have expired. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 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 from continuing operations per share attributable to Vertex common shareholders calculations because the effect would have been anti-dilutive during each period. 2016 2015 2014 (in thousands) Stock options 12,642 11,145 12,003 Unvested restricted stock and restricted stock units 3,546 3,024 3,091 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 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 December 31, 2016 , the Company’s investments were in money market funds, government-sponsored enterprise securities, corporate equity securities, corporate debt securities and commercial paper. As of December 31, 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 a money market funds, corporate equity securities and 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 fair value of the Company’s foreign currency forward contracts was based on Level 2 inputs using third party pricing services. During 2016 , 2015 and 2014 , the Company did not record an other-than-temporary impairment charge related to its financial assets. The following table sets forth the Company’s financial assets (excluding VIE cash and cash equivalents) subject to fair value measurements: 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 $ 280,560 $ 280,560 $ — $ — Marketable securities: Government-sponsored enterprise securities 15,508 15,508 — — Corporate equity securities 64,560 64,560 — — Commercial paper 59,404 — 59,404 — Corporate debt securities 111,140 — 111,140 — Prepaid and other current assets: Foreign currency forward contracts 14,407 — 14,407 — Other assets: Foreign currency forward contracts 1,186 $ — 1,186 $ — Total financial assets $ 546,765 $ 360,628 $ 186,137 $ — Financial instruments carried at fair value (liability position): Other liabilities, current portion: Foreign currency forward contracts $ (144 ) $ — $ (144 ) $ — Total financial liabilities $ (144 ) $ — $ (144 ) $ — 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 ) $ — VIEs had cash equivalents of $46.1 million as of December 31, 2016 that consisted of money market funds, 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 payments, which are valued based on Level 3 inputs. Please refer to Note B, “Collaborative Arrangements,” for further information. The Company’s Credit Facility carries a variable interest rate set at current market rates, and as such, the carrying value approximates fair values. As of December 31, 2016 , the fair value and carrying value of the Company’s Credit Facility was $300.0 million . |
Marketable Securities
Marketable Securities | 12 Months Ended |
Dec. 31, 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) December 31, 2016 Cash and cash equivalents: Cash and money market funds $ 1,183,945 $ — $ — $ 1,183,945 Total cash and cash equivalents $ 1,183,945 $ — $ — $ 1,183,945 Marketable securities: Government-sponsored enterprise securities (matures within 1 year) $ 15,506 $ 2 $ — $ 15,508 Corporate equity securities (matures within 1 year) 43,213 21,347 — 64,560 Commercial paper (matures within 1 year) 59,331 73 — 59,404 Corporate debt securities (matures within 1 year) 111,225 — (85 ) 111,140 Total marketable securities 229,275 21,422 (85 ) 250,612 Total cash, cash equivalents and marketable securities $ 1,413,220 $ 21,422 $ (85 ) $ 1,434,557 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 (matures within 1 year) $ 87,176 $ — $ (14 ) $ 87,162 Commercial paper (matures within 1 year) 98,877 246 — 99,123 Corporate debt securities (matures 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 December 31, 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 2016 , 2015 or 2014 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income The following table summarizes the changes in accumulated other comprehensive income by component: Foreign currency translation adjustment Unrealized holding gains (losses) on marketable securities, net of tax Unrealized (losses) gains on foreign currency forward contracts, net of tax Total (in thousands) Balance at December 31, 2013 $ (325 ) $ 42 $ (23 ) $ (306 ) Other comprehensive (loss) income before reclassifications (646 ) (165 ) 3,591 2,780 Amounts reclassified from accumulated other comprehensive loss — — (1,557 ) (1,557 ) Net current period other comprehensive (loss) income (646 ) (165 ) 2,034 1,223 Balance at December 31, 2014 $ (971 ) $ (123 ) $ 2,011 $ 917 Other comprehensive (loss) income before reclassifications (1,109 ) 249 6,493 5,633 Amounts reclassified from accumulated other comprehensive loss — — (4,726 ) (4,726 ) Net current period other comprehensive (loss) income (1,109 ) 249 1,767 907 Balance at December 31, 2015 $ (2,080 ) $ 126 $ 3,778 $ 1,824 Other comprehensive (loss) income before reclassifications (5,782 ) 17,395 17,383 28,996 Amounts reclassified from accumulated other comprehensive loss — — (9,647 ) (9,647 ) Net current period other comprehensive (loss) income (5,782 ) 17,395 7,736 19,349 Balance at December 31, 2016 $ (7,862 ) $ 17,521 $ 11,514 $ 21,173 |
Hedging
Hedging | 12 Months Ended |
Dec. 31, 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 December 31, 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 December 31, 2016 As of December 31, 2015 Foreign Currency (in thousands) Euro $ 164,368 $ 103,362 British pound sterling 65,237 78,756 Australian dollar 23,776 27,167 Total foreign currency forward contracts $ 253,381 $ 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 consolidated balance sheets: As of December 31, 2016 Assets Liabilities Classification Fair Value Classification Fair Value (in thousands) Prepaid and other current assets $ 14,407 Other liabilities, current portion $ (144 ) Other assets 1,186 Other liabilities, excluding current portion — Total assets $ 15,593 Total liabilities $ (144 ) 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 consolidated balance sheets: As of December 31, 2016 Gross Amounts Recognized Gross Amounts Offset Gross Amount Presented Gross Amount Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 15,593 $ — $ 15,593 $ (144 ) $ 15,449 Total liabilities $ (144 ) $ — $ (144 ) $ 144 $ — As of December 31, 2015 Gross Amounts Recognized Gross Amounts Offset Gross Amount Presented Gross Amount 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 | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: As of December 31, 2016 2015 (in thousands) Raw materials $ 6,348 $ 8,696 Work-in-process 56,672 40,695 Finished goods 14,584 7,816 Total $ 77,604 $ 57,207 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net consisted of the following: As of December 31, 2016 2015 (in thousands) Buildings $ 548,232 $ 531,627 Furniture and equipment 236,634 218,623 Software 134,321 124,469 Leasehold improvements 108,702 106,768 Computers 58,271 52,295 Total property and equipment, gross 1,086,160 1,033,782 Less: accumulated depreciation (387,798 ) (336,067 ) Total property and equipment, net $ 698,362 $ 697,715 Total property and equipment, gross, as of December 31, 2016 and 2015 , included $101.3 million and $106.8 million , respectively, for property and equipment recorded under capital leases. Accumulated depreciation, as of December 31, 2016 and 2015 , included $37.9 million and $30.4 million , respectively, for property and equipment recorded under capital leases. As of December 31, 2016 , included in property and equipment, net were $17.8 million and $9.2 million in capitalized internally developed software costs and related amortization, respectively. As of December 31, 2015 , included in property and equipment, net were $15.4 million and $4.1 million in capitalized internally developed software costs and related amortization, respectively. The Company recorded depreciation expense of $60.8 million , $60.0 million and $62.3 million in 2016 , 2015 and 2014 , respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets As of each of December 31, 2016 and December 31, 2015 , in-process research and development intangible assets of $284.3 million were recorded on the Company’s consolidated balance sheets. 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. The Company used a discount rate of 7.1% in the present-value models to estimate the fair values of the ENaC inhibitors intangible assets. The Company also conducted an evaluation of Parion’s other programs at the effective date of the Parion Agreement and determined that market participants would not have ascribed value to those programs because of the stage of development of the assets in each program and uncertainties related to the potential development and commercialization of the programs. Goodwill As of each of December 31, 2016 and December 31, 2015 , goodwill of $50.4 million was recorded on the Company’s consolidated balance sheet. |
Additional Balance Sheet Detail
Additional Balance Sheet Detail | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Additional Balance Sheet Detail | Additional Balance Sheet Detail Prepaid and other current assets consisted of the following: As of December 31, 2016 2015 (in thousands) Prepaid expenses $ 36,134 $ 22,058 Fair value foreign currency forward contracts 14,407 5,161 Taxes receivable 3,213 14,682 Other 16,780 12,835 Total $ 70,534 $ 54,736 Accrued expenses consisted of the following: As of December 31, 2016 2015 (in thousands) Payroll and benefits $ 86,387 $ 87,873 Research, development and commercial contract costs 62,756 55,677 Product revenue allowances 86,533 47,209 Royalty payable 52,845 60,191 Taxes payable and reserves (including VIE taxes payable) 6,883 30,953 Professional fees 6,512 7,455 Interest 1,390 4,642 Other 11,943 11,820 Total $ 315,249 $ 305,820 Other liabilities, excluding current portion consisted of the following: As of December 31, 2016 2015 (in thousands) Advance from CFFT $ 73,423 $ — Deferred rent 19,551 22,235 Other 9,148 9,543 Total $ 102,122 $ 31,778 |
Long Term Obligations
Long Term Obligations | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [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 10 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. The Company recorded interest expense of $60.2 million in each of 2016 , 2015 and 2014 . The Company recorded depreciation expense of $13.3 million in each of 2016 , 2015 and $13.4 million in 2014 , respectively. In each of 2016 , 2015 and 2014 , the Company recorded rent expense of $6.5 million . Property and equipment, net, included $489.0 million and $502.3 million as of December 31, 2016 and 2015 , respectively, related to construction costs for the Buildings. The carrying value of the construction financing lease obligation related to the Buildings, which excludes interest that will be imputed over the course of the Company’s lease agreement for the Buildings, was $472.6 million and $473.0 million , as of December 31, 2016 and 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 under construction in San Diego, California (“San Diego Lease”). Lease payments pursuant to the San Diego 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 San Diego Lease, 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. Because the Company is involved in the construction project, the Company is deemed for accounting purposes to be the owner of the San Diego building during the construction period and recorded project construction costs incurred by the landlord. The Company bifurcates its lease payments pursuant to the San Diego Lease into (i) a portion that is allocated to the San Diego building and (ii) a portion that is allocated to the land on which the San Diego building was constructed. Although the Company will not begin making lease payments pursuant to the San Diego Lease until the commencement date, the portion of the lease obligation allocated to the land is treated for accounting purposes as an operating lease that commenced in the fourth quarter of 2016. Upon completion of the San Diego building, the Company will evaluate the San Diego Lease and determine if the San Diego Lease meets the criteria for “sale-leaseback” treatment. If the San Diego Lease meets the “sale-leaseback” criteria, the Company will remove the asset and the related liability from its consolidated balance sheet and treat the San Diego Lease as either an operating or a capital lease based on the Company’s assessment of the accounting guidance. The Company expects that upon completion of construction of the San Diego building the San Diego Lease will not meet the “sale-leaseback” criteria. If the San Diego Lease does not meet “sale-leaseback” criteria, the Company will treat the San Diego Lease as a financing obligation and will depreciate the asset over its estimated useful life. Revolving Credit Facility In October 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 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 2.50% , 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. Term Loan On July 9, 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 Company incurred a charge of $2.2 million in the fourth quarter of 2016 related to a loss on extinguishment attributable to the Macquarie Loan that was recorded as Interest Expense in the Company’s consolidated statements of operations. 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 Macquarie 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 would have been 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 Term Loan and that were recorded as additional interest expense using the effective interest method over the term of the loan in the Company’s consolidated statements of operations. As of December 31, 2016 and 2015 , the unamortized discount associated with the Term Loan that was included in the senior secured term loan caption on the Company’s consolidated balance sheets was zero and $4.6 million , respectively. Subsequent Event In February 2017, the Company repaid all $300.0 million outstanding under the Credit Agreement. The Company may reborrow and repay amounts under the revolving credit agreement without penalty. |
Common Stock, Preferred Stock a
Common Stock, Preferred Stock and Equity Plans | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Common Stock, Preferred Stock and Equity Plans | Common Stock, Preferred Stock and Equity Plans The Company is authorized to issue 500,000,000 shares of common stock. Holders of common stock are entitled to one vote per share. Holders of common stock are entitled to receive dividends, if and when declared by the Company’s Board of Directors, and to share ratably in the Company’s assets legally available for distribution to the Company’s shareholders in the event of liquidation. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The holders of common stock do not have cumulative voting rights. The Company is authorized to issue 1,000,000 shares of preferred stock in one or more series and to fix the powers, designations, preferences and relative participating, option or other rights thereof, including dividend rights, conversion rights, voting rights, redemption terms, liquidation preferences and the number of shares constituting any series, without any further vote or action by the Company’s shareholders. As of December 31, 2016 and 2015 , the Company had no shares of preferred stock issued or outstanding. Stock and Option Plans The purpose of each of the Company’s stock and option plans is to attract, retain and motivate its employees, consultants and directors. Awards granted under these plans can be incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), restricted stock (“RSs”), restricted stock units (“RSUs”) or other equity-based awards, as specified in the individual plans. Shares issued under all of the Company’s plans are funded through the issuance of new shares. The following table contains information about the Company’s equity plans: As of December 31, 2016 Title of Plan Group Eligible Type of Award Awards Additional Awards 2013 Stock and Option Plan Employees, Non-employee Directors and Consultants NSO, 9,832,269 9,180,002 2006 Stock and Option Plan Employees, Non-employee Directors and Consultants NSO, 6,355,357 — Total 16,187,626 9,180,002 All options granted under the Company’s 2013 Stock and Option Plan (“2013 Plan”) and 2006 Stock and Option Plan (“2006 Plan”) were granted with an exercise price equal to the fair value of the underlying common stock on the date of grant. As of December 31, 2016 , the stock and option plan under which the Company makes new equity awards is the Company’s 2013 Plan. Under the 2013 Plan, no stock options can be awarded with an exercise price less than the fair market value on the date of grant. The Company’s shareholders (i) approved an increase in the number of shares authorized for issuance pursuant to the 2013 Plan of 7,800,000 shares, plus the number of shares that remained available for issuance under the Company’s 2006 Stock and Option Plan, which rolled-over into the 2013 Stock and Option Plan in 2015 and (ii) approved an increase in the number of shares authorized for issuance pursuant to the 2013 Plan of 9,500,000 shares in 2014. During the three years ended December 31, 2016 , grants to current employees and directors primarily had a grant date that was the same as the date the award was approved by the Company’s Board of Directors. During the three years ended December 31, 2016 , for grants to new employees and directors, the date of grant for awards was the employee’s first day of employment or the date the director was elected to the Company’s Board of Directors. All options awarded under the Company’s stock and option plans expire not more than 10 years from the grant date. Historically, all shares of restricted stock and restricted stock units have been granted at a price equal to $0.01 , the par value of the Company’s common stock. Beginning with awards approved by the Company’s Board of Directors in July 2016, the Company stopped granting restricted stock units at par value and instead grants the awards at a purchase price equal to $0.00 . Vesting of options, restricted stock and restricted stock units generally is ratable over specified periods and is determined by the Company’s Board of Directors. The following table summarizes information related to the outstanding and exercisable options during the year ended December 31, 2016 : Stock Options Weighted-average Weighted-average Aggregate Intrinsic (in thousands) (per share) (in years) (in thousands) Outstanding at December 31, 2015 11,145 $ 75.99 Granted 3,183 $ 91.36 Exercised (1,064 ) $ 45.61 Forfeited (544 ) $ 94.62 Expired (78 ) $ 107.51 Outstanding at December 31, 2016 12,642 $ 81.41 7.06 $ 124,939 Exercisable at December 31, 2016 7,323 $ 68.92 6.00 $ 121,671 Exercisable and Expected to Vest at December 31, 2016 12,200 $ 80.76 7.00 $ 124,892 The aggregate intrinsic value in the table above represents the total pre-tax amount, net of exercise price, that would have been received by option holders if all option holders had exercised all options with an exercise price lower than the market price on December 30, 2016 , which was $74.11 based on the average of the high and low price of the Company’s common stock on that date. The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during 2016 , 2015 and 2014 was $48.6 million , $252.9 million and $316.5 million , respectively. The total cash received by the Company as a result of employee stock option exercises during 2016 , 2015 and 2014 was $48.5 million , $165.6 million and $255.5 million , respectively. The following table summarizes information about stock options outstanding and exercisable at December 31, 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 1.10 $ 18.93 137 $ 18.93 $20.01–$40.00 1,696 3.19 $ 33.94 1,696 $ 33.94 $40.01–$60.00 1,867 5.59 $ 48.26 1,762 $ 48.44 $60.01–$80.00 1,345 7.11 $ 75.90 891 $ 75.60 $80.01–$100.00 4,529 8.45 $ 90.60 1,548 $ 89.61 $100.01–$120.00 1,604 8.05 $ 109.33 702 $ 109.29 $120.01–$134.69 1,464 8.53 $ 130.58 587 $ 130.17 Total 12,642 7.06 $ 81.41 7,323 $ 68.92 The following table summarizes the restricted stock and restricted stock unit activity of the Company during the year ended December 31, 2016 : Restricted Stock Restricted Stock Units Number of Units Weighted-average Number of Shares Weighted-average (in thousands) (per share) (in thousands) (per share) Unvested at December 31, 2015 2,831 $ 98.80 193 $ 98.36 Granted 857 $ 91.49 847 $ 90.46 Vested (817 ) $ 79.28 (59 ) $ 83.13 Cancelled (258 ) $ 98.56 (48 ) $ 94.54 Unvested at December 31, 2016 2,613 $ 102.54 933 $ 92.35 The total fair value of restricted stock that vested during 2016 , 2015 and 2014 (measured on the date of vesting) was $74.1 million , $124.0 million and $54.5 million , respectively. The total fair value of restricted stock units that vested during 2016 , 2015 and 2014 (measured on the date of vesting) was $5.3 million , $8.0 million and $2.9 million , respectively. Employee Stock Purchase Plan The Company has an employee stock purchase plan (the “ESPP”). The ESPP permits eligible employees to enroll in a twelve -month offering period comprising two six -month purchase periods. Participants may purchase shares of the Company’s common stock, through payroll deductions, at a price equal to 85% of the fair market value of the common stock on the first day of the applicable twelve -month offering period, or the last day of the applicable six -month purchase period, whichever is lower. Purchase dates under the ESPP occur on or about May 14 and November 14 of each year. As of December 31, 2016 , there were 891,353 shares of common stock authorized for issuance pursuant to the ESPP. In 2016 , the following shares were issued to employees under the ESPP: Year Ended December 31, 2016 (in thousands, Number of shares 272 Average price paid per share $ 70.70 |
Stock-based Compensation Expens
Stock-based Compensation Expense | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation Expense | Stock-based Compensation Expense The Company recognizes share-based payments to employees as compensation expense using the fair value method. The fair value of stock options and shares purchased pursuant to the ESPP is calculated using the Black-Scholes option pricing model. The fair value of restricted stock and restricted stock units is based on the intrinsic value on the date of grant. Stock-based compensation, measured at the grant date based on the fair value of the award, is typically recognized as expense ratably over the requisite service period. The expense recognized over the requisite service period includes an estimate of awards that will be forfeited. The effect of stock-based compensation expense during the three years ended December 31, 2016 was as follows: 2016 2015 2014 (in thousands) Stock-based compensation expense by line item: Research and development expenses $ 153,451 $ 152,955 $ 116,998 Sales, general and administrative expenses 84,254 78,070 60,544 Total stock-based compensation expense included in costs and expenses $ 237,705 $ 231,025 $ 177,542 The stock-based compensation expense by type of award during the three years ended December 31, 2016 was as follows: 2016 2015 2014 (in thousands) Stock-based compensation expense by type of award: Stock options $ 114,768 $ 129,276 $ 99,961 Restricted stock and restricted stock units 118,709 98,811 70,678 ESPP share issuances 7,835 7,025 8,326 Less: stock-based compensation expense capitalized to inventories (3,607 ) (4,087 ) (1,423 ) Total stock-based compensation expense included in costs and expenses $ 237,705 $ 231,025 $ 177,542 The Company capitalizes stock-based compensation expense to inventories, all of which is attributable to employees who support the Company’s manufacturing operations for the Company’s products. The following table sets forth the Company’s unrecognized stock-based compensation expense, net of estimated forfeitures, as of December 31, 2016 , by type of award and the weighted-average period over which that expense is expected to be recognized: As of December 31, 2016 Unrecognized Expense Weighted-average (in thousands) (in years) Type of award: Stock options $ 157,819 2.50 Restricted stock and restricted stock units $ 176,972 2.39 ESPP share issuances $ 4,080 0.58 Stock Options The Company issues stock options with service conditions, which are generally the vesting periods of the awards. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options at the grant date. The Black-Scholes option pricing model uses the option exercise price as well as estimates and assumptions related to the expected price volatility of the Company’s stock, the rate of return on risk-free investments, the expected period during which the options will be outstanding, and the expected dividend yield for the Company’s stock to estimate the fair value of a stock option on the grant date. The options granted during 2016 , 2015 and 2014 had a weighted-average grant-date fair value per share of $37.93 , $52.16 and $39.95 , respectively. The fair value of each option granted during 2016 , 2015 and 2014 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: 2016 2015 2014 Expected stock price volatility 46.77 % 47.29 % 50.86 % Risk-free interest rate 1.32 % 1.61 % 1.77 % Expected term of options (in years) 4.91 5.28 5.47 Expected annual dividends — — — The weighted-average valuation assumptions were determined as follows: • Expected stock price volatility: Expected stock price volatility is calculated using the trailing one month average of daily implied volatilities prior to grant date. Implied volatility is based on options to purchase the Company’s stock with remaining terms of greater than one year that are regularly traded in the market. • Risk-free interest rate: The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term. • Expected term of options: The expected term of options represents the period of time options are expected to be outstanding. The Company uses historical data to estimate employee exercise and post-vest termination behavior. The Company believes that all groups of employees exhibit similar exercise and post-vest termination behavior and therefore does not stratify employees into multiple groups in determining the expected term of options. • Expected annual dividends: The estimate for annual dividends is $0.00 because the Company has not historically paid, and does not intend for the foreseeable future to pay, a dividend. Restricted Stock and Restricted Stock Units The Company awards restricted stock and restricted stock units with service conditions, which are generally the vesting periods of the awards. Until 2017, the Company also awarded, to certain members of senior management, on an annual basis restricted stock and restricted stock units that vest upon the earlier of the satisfaction of (i) a performance condition or (ii) a service condition. In February 2016, the Company began granting performance-based restricted stock units (“PSUs”) to certain members of senior management. Threshold, target and maximum parameters were established for the financial and half on non-financial goals, and will be used to calculate the number of shares that will be issuable when the award vests, which may range from zero to 200% of the target amount. The financial-based PSUs vest in three equal installments over a three -year period and are expensed ratably over that same period based upon an assessment of the likelihood of achievement. The non-financial based PSUs cliff vest at the end of the three -year performance period and are expensed on a straight-line basis over that same period based upon an assessment of the likelihood of achievement. In addition, in 2015 and 2014, the Company issued, pursuant to a retention program, restricted stock awards to certain members of senior management that will vest upon the satisfaction of both (i) a performance condition and (ii) a service condition. Employee Stock Purchase Plan The weighted-average fair value of each purchase right granted during 2016 , 2015 and 2014 was $26.86 , $37.84 and $29.59 , respectively. The following table reflects the weighted-average assumptions used in the Black-Scholes option pricing model for 2016 , 2015 and 2014 : 2016 2015 2014 Expected stock price volatility 48.22 % 47.20 % 60.32 % Risk-free interest rate 0.56 % 0.40 % 0.09 % Expected term (in years) 0.75 0.72 0.75 Expected annual dividends — — — The expected stock price volatility for ESPP offerings is based on implied volatility. The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term. The expected term represents purchases and purchase periods that take place within the offering period. The expected annual dividends estimate is $0.00 because the Company has not historically paid, and does not for the foreseeable future intend to pay, a dividend. |
Other Arrangements
Other Arrangements | 12 Months Ended |
Dec. 31, 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 December 31, 2016 , the Company had $12.6 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. Other income (expense), net In April 2014, the Company received a one-time cash payment of $36.7 million from its landlord pursuant to the Fan Pier Leases. This payment related to bonds issued pursuant to an Infrastructure Development Assistance Agreement between The Commonwealth of Massachusetts and the Company’s landlord. The bonds were issued in connection with the landlord’s contribution to infrastructure improvements and also were dependent upon employment levels at the Company through the bond issuance date. The Company accounted for the cash payment as a government grant as it was provided in part related to the Company’s employment level in Massachusetts. Such grants are recognized in income in the period in which the conditions of the grant are met and there is reasonable assurance that the grant will be received, provided it is not subject to refund. In the second quarter of 2014, the Company recorded $36.7 million as a credit to other income (expense), net in its consolidated statements of operations because the Company’s employment obligations related to these funds were satisfied as of the date of issuance of the bonds and the payment received is not subject to refund. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of loss from continuing operations before provision for income taxes during the three years ended December 31, 2016 consisted of the following: 2016 2015 2014 (in thousands) United States $ (147,860 ) $ (272,326 ) $ (645,465 ) Foreign 80,494 (285,474 ) (89,410 ) Loss from continuing operations before provision for income taxes $ (67,366 ) $ (557,800 ) $ (734,875 ) The components of the provision for income taxes from continuing operations during the three years ended December 31, 2016 consisted of the following: 2016 2015 2014 (in thousands) Current taxes: United States $ (3,821 ) $ 25,623 $ 2,853 Foreign 1,794 831 2,457 State 1,836 3,629 1,366 Total current taxes $ (191 ) $ 30,083 $ 6,676 Deferred taxes: United States $ 18,659 $ 497 $ 244 Foreign (3,359 ) (355 ) — State 1,556 156 38 Total deferred taxes $ 16,856 $ 298 $ 282 Provision for income taxes $ 16,665 $ 30,381 $ 6,958 The difference between the Company’s “expected” tax provision (benefit), as computed by applying the U.S. federal corporate tax rate of 35% to loss from continuing operations before provision for income taxes, and actual tax is reconciled as follows: 2016 2015 2014 (in thousands) Loss from continuing operations before provision for income taxes $ (67,366 ) $ (557,800 ) $ (734,875 ) Expected tax provision (benefit) (23,578 ) (195,230 ) (257,206 ) State taxes, net of federal benefit 3,621 3,800 1,124 Foreign rate differential 21,346 47,402 39,335 Tax credits (47,773 ) (55,696 ) (33,788 ) Unbenefitted operating losses (gains) 14,837 226,169 241,037 Non-deductible expenses 24,749 5,817 18,756 Rate change 12,836 (1,224 ) (1,826 ) Tax attribute expiration 9,947 — — Other 680 (657 ) (474 ) Provision for income taxes $ 16,665 $ 30,381 $ 6,958 The foreign rate differential in the tax rate reconciliation table reflects the effect of operations in jurisdictions with tax rates that are different from the United States. As set forth in the components of loss before provision for income taxes, the Company had income in 2016 and losses in 2015 and 2014 in foreign jurisdictions in each year presented. Due to lower foreign tax rates, particularly in the United Kingdom, the Company’s tax expense (benefit) in foreign jurisdictions is less than the “expected” tax expense (benefit) that would have resulted from income (losses) in these jurisdictions at corporate tax rates in the United States. The difference between the tax expense (benefit) at foreign corporate tax rates and the “expected” expense (benefit) based on corporate tax rates in the United States is reflected in the tax reconciliation table under the caption “foreign rate differential.” The unbenefitted operating losses in the tax rate reconciliation table primarily reflect a change in the valuation allowance on deferred tax assets related to the United States, United Kingdom and Switzerland. In 2016, the valuation allowance increased primarily due to an increase in tax credits in the United States and an increase in the net operating loss in the United Kingdom, both due to the uncertainty in the Company’s ability to use them in future periods. In 2015 and 2014, the valuation allowance increased primarily related to an increase in net operating losses that have been incurred with no corresponding benefit due to the uncertainty in the Company’s ability to use them in future periods. In 2016, the effect of non-deductible expenses is related to equity compensation, Orphan Drug Credits, foreign amortization and partial disallowance of expenses related to dissolution of a foreign subsidiary. Deferred tax assets and liabilities are determined based on the difference between financial statement and tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred taxes were as follows: As of December 31, 2016 2015 (in thousands) Deferred tax assets: Net operating loss $ 1,232,399 $ 1,250,642 Tax credit carryforwards 367,402 315,535 Property and equipment 22 — Intangible assets 34,938 14,673 Deferred revenues 31,205 9,341 Stock-based compensation 110,446 93,404 Inventories 4,705 5,913 Accrued expenses 23,078 27,236 Currency translation adjustment — 222 Unrealized loss 5 — Construction financing lease obligation 177,735 176,250 Gross deferred tax assets 1,981,935 1,893,216 Valuation allowance (1,731,186 ) (1,716,349 ) Total deferred tax assets 250,749 176,867 Deferred tax liabilities: Property and equipment (169,089 ) (175,424 ) Acquired intangibles (134,063 ) (110,439 ) Deferred revenue $ (73,357 ) $ — Unrealized gain $ (7,967 ) $ (1,088 ) Net deferred tax liabilities $ (133,727 ) $ (110,084 ) The Company presents its deferred tax assets and deferred tax liabilities gross on its consolidated balance sheets. As of December 31, 2016 , $134.0 million of the deferred tax liabilities are attributable to the Company’s collaborations with BioAxone and Parion. As of December 31, 2015 , $110.4 million of the deferred tax liabilities are attributable to the Company’s collaborations with BioAxone and Parion. For federal income tax purposes, as of December 31, 2016 , the Company has net operating loss carryforwards of approximately $4.1 billion and tax credits of $262.9 million , which may be used to offset future federal income and tax liability, respectively. In addition, the Company will record an increase of approximately $1.2 billion of the federal net operating loss carryforward with a corresponding valuation allowance upon adoption of the new stock compensation guidance in the first quarter 2017. For state income tax purposes, the Company has net operating loss carryforwards of approximately $975.8 million and tax credits of $103.8 million , which may be used to offset future state income and tax liability, respectively. In addition, the Company will record an increase of approximately $190.0 million of the state net operating loss carryforward with a corresponding valuation allowance upon adoption of the new stock compensation guidance in the first quarter 2017. These federal and state operating loss carryforwards and tax credits expire at various dates through 2036. After consideration of all the evidence, both positive and negative, the Company continues to maintain a valuation allowance for the majority of the 2016 deferred tax asset because it is more likely than not that the deferred tax asset will not be realized. In future periods, if management determines that it is more likely than not that the deferred tax asset will be realized, (i) the valuation allowance would be decreased, (ii) the deferred tax asset would be reflected on the Company’s consolidated balance sheet and (iii) the Company would record non-cash benefits in its consolidated statements of operations related to the reflection of the deferred tax asset on its consolidated balance sheets. The valuation allowance increased by $14.8 million from December 31, 2015 to December 31, 2016 primarily due to an increase in research tax credit carry forwards in the United States and other timing items. Unrecognized tax benefits during the two years ended December 31, 2016 consisted of the following: 2016 2015 (in thousands) Unrecognized tax benefits beginning of year $ 425 $ 880 Decrease due to statute of limitations expiring (425 ) — Decrease due to settlements and payments — (455 ) Unrecognized tax benefits end of year $ — $ 425 The Company had gross unrecognized tax benefits of zero and $0.4 million , respectively, as of December 31, 2016 and 2015 . The Company recognizes interest and penalties related to income taxes as a component of income tax expense. As of December 31, 2016 , no interest and penalties have been accrued. 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 or any other major taxing jurisdiction for years before 2011, except where the Company has net operating losses or tax credit carryforwards that originate before 2011. The Company currently is under examination by Canada Revenue Agency for the years ending December 31, 2011 through December 31, 2013. No adjustments have been reported. The Company is not under examination by any other jurisdictions for any tax year. The Company concluded audits with Internal Revenue Service, Delaware, Pennsylvania, Texas and Revenue Quebec during 2016, and Massachusetts and New York during 2015, with no material adjustments. At December 31, 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 U.S. federal income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries. |
Restructuring Expenses
Restructuring Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Expenses | Restructuring Expenses Facility Lease Obligations The Company has adopted several plans to restructure its facility operations for which it has incurred restructuring expenses in the three years ended December 31, 2016 . The Company’s initial estimate of its liabilities for net ongoing costs associated with these facility obligations are recorded at fair value on the cease use date. In estimating the expenses and liabilities related to these facilities, the Company utilizes the probability-weighted discounted cash-flows of the Company’s ongoing lease obligations. In estimating the expense and liability under its lease obligations, the Company estimated (i) the costs to be incurred to satisfy rental and build-out commitments under the lease (including operating costs), (ii) the lead-time necessary to sublease the space, (iii) the projected sublease rental rates and (iv) the anticipated durations of subleases. The Company uses a credit-adjusted risk-free rate to discount the estimated cash flows. The Company reviews its estimates and assumptions on at least a quarterly basis, intends to continue such reviews until the termination of these facility lease obligations, and will make whatever modifications the Company believes necessary, based on the Company’s best judgment, to reflect any changed circumstances. The Company’s estimates have changed in the past, and may change in the future, resulting in additional adjustments to the estimate of these liabilities. Changes to the Company’s estimate of these liabilities are recorded as additional restructuring expenses (credits). In addition, because the Company’s estimate of these liabilities includes the application of a discount rate to reflect the time-value of money, the Company records imputed interest costs related to these liabilities each quarter. These costs are included in restructuring expenses on the Company’s consolidated statements of operations. 2003 Kendall Restructuring In 2003, the Company adopted a plan to restructure its operations (the “2003 Kendall Restructuring”) to coincide with its increasing internal emphasis on advancing drug candidates through clinical development to commercialization. The restructuring was designed to re-balance the Company’s relative investments in research and development to better support the Company’s long-term strategy. At that time, the restructuring plan included a workforce reduction, write-offs of certain assets and a decision not to occupy approximately 290,000 square feet of specialized laboratory and office space in Cambridge, Massachusetts under lease to Vertex (the “Kendall Square Lease”). The Kendall Square Lease commenced in January 2003 and has a 15 -year term. In 2005, the Company revised its assessment of its real estate requirements and decided to use approximately 120,000 square feet of the facility subject to the Kendall Square Lease (the “Kendall Square Facility”) for its operations, beginning in 2006. The rentable square footage of the Kendall Square Facility related to the 2003 Kendall Restructuring currently is subleased to third parties. The restructuring expense incurred from the second quarter of 2003 through the end of the first quarter of 2005 (i.e., immediately prior to the Company’s decision to use a portion of the Kendall Square Facility for its operations) related to the estimated incremental net ongoing lease obligations associated with the entire Kendall Square Facility, together with imputed interest costs relating to the restructuring liability. The restructuring expense incurred in the period beginning in the second quarter of 2005 relates only to the portion of the Kendall Square Facility that the Company was not occupying and did not intend to occupy for its operations. The Company uses a discount rate of 10% related to this restructuring activity. The remaining lease obligations, which are associated with the 120,000 square foot portion of the Kendall Square Facility that the Company occupied and used for its operations, were recorded as rental expense in the period incurred until the Company incurred a cease use charge related to this portion of the Kendall Square Facility in the third quarter of 2014 in connection with transitioning its Massachusetts operations to Fan Pier in Boston, Massachusetts (the “Fan Pier Move Restructuring”). The activity related to restructuring and other liability for 2003 was as follows: Restructuring Expense Cash Non-cash Liability as of (in thousands) Lease restructuring and other operating lease expense $ 84,726 $ (15,200 ) $ — $ 69,526 Employee severance, benefits and related costs 2,616 (2,616 ) — — Leasehold improvements and asset impairments 4,482 — (4,482 ) — Total $ 91,824 $ (17,816 ) $ (4,482 ) $ 69,526 In 2003, the lease restructuring and other operating lease expense included $78.7 million of lease restructuring expense and $6.0 million of lease operating expense incurred prior to the decision not to occupy the Kendall Square Facility. The restructuring accrual as of December 31, 2003 related only to the lease restructuring expense. The activities related to 2003 restructuring liability for 2004 through 2016 were as follows: 2016 2015 2014 2004-2016 (in thousands) Liability, beginning of the period $ 7,944 $ 11,596 $ 19,115 $ 69,526 Cash payments (15,841 ) (14,625 ) (17,494 ) (226,912 ) Cash received from subleases 11,892 11,089 12,912 111,601 Credit for portion of facility Vertex decided to occupy in 2005 — — — (10,018 ) Restructuring expense 333 (116 ) (2,937 ) 60,131 Liability, end of the period $ 4,328 $ 7,944 $ 11,596 $ 4,328 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. The Company discounted the estimated cash flows related to the facilities at a discount rate of 9% . The Company will continue to incur charges through April 2018 related to the difference between the Company’s estimated future cash flows related to its lease obligations, which include an estimate for sublease income to be received if applicable, and its actual cash flows. The Fan Pier Move Restructuring included lease obligations related to the 120,000 square feet of the Kendall Square Facility that the Company continued to use for its operations following its 2013 Kendall Restructuring. The remaining rentable square footage of the Kendall Square Facility related to the Fan Pier Move Restructuring was subleased to a third party in February 2015. The activities related to the Fan Pier relocation restructuring liability for the three years ended December 31, 2016 were as follows: 2016 2015 2014 (in thousands) Liability, beginning of the period $ 5,964 $ 33,390 $ 797 Cash payments (12,674 ) (30,022 ) (18,271 ) Cash received from subleases 9,751 4,229 — Restructuring expense 585 (1,633 ) 50,864 Liability, end of the period $ 3,626 $ 5,964 $ 33,390 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 years ended December 31, 2016 were as follows: 2016 2015 2014 (in thousands) Liability, beginning of the period $ 1,450 $ 869 $ 8,441 Cash payments (1,794 ) (3,374 ) (10,570 ) Restructuring expense 344 3,955 2,998 Liability, end of the period $ — $ 1,450 $ 869 |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefits | Employee Benefits The Company has a 401(k) retirement plan (the “Vertex 401(k) Plan”) in which substantially all of its permanent U.S. employees are eligible to participate. Participants may contribute up to 60% of their annual compensation to the Vertex 401(k) Plan, subject to statutory limitations. The Company may declare discretionary matching contributions to the Vertex 401(k) Plan. Beginning in mid-2013, the Company began paying matching contributions in the form of cash. For the years ended December 31, 2016 , 2015 and 2014 , the Company contributed approximately $11.8 million , $12.8 million and $12.0 million to the plan, respectively. As of December 31, 2016 , 755,000 shares of common stock remained available for grant under the Vertex 401(k) Plan. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Obligations The Company moved into its corporate headquarters to Boston, Massachusetts in January 2014. In December 2015, the Company entered into a lease agreement for 3215 Merryfield Row, San Diego, California. Please refer to Note L, “Long Term Obligations,” for additional information regarding both of these commitments. The Kendall Square Lease began in January 2003 and will expire in April 2018. The Company occupied and used for its operations approximately 120,000 square feet of the Kendall Square Facility until 2014 when it moved its operations to Fan Pier. The Company has sublease arrangements in place for the remaining rentable square footage of the Kendall Square Facility, with terms that expire concurrently with the Kendall Square Lease. Please refer to Note Q, “Restructuring Expenses,” for further information. As of December 31, 2016 , future minimum commitments under the facility leases with terms of more than one year and contractual sublease income under the Company’s subleases for the Kendall Square Facility were as follows: Year Fan Pier San Diego Leases Kendall Square Kendall Sublease Other Total Lease (Net of Sublease Income) (in thousands) 2017 $ 67,206 $ 3,147 $ 20,088 $ (15,687 ) $ 13,156 $ 87,910 2018 67,206 3,245 6,696 (5,236 ) 12,975 84,886 2019 72,589 6,906 — — 11,746 91,241 2020 72,589 9,208 — — 11,100 92,897 2021 72,589 9,208 — — 10,300 92,097 Thereafter 535,032 138,217 — — 62,409 735,658 Total minimum lease payments $ 887,211 $ 169,931 $ 26,784 $ (20,923 ) $ 121,686 $ 1,184,689 During 2016 , 2015 and 2014 , rental expense was $19.1 million , $18.1 million and $38.9 million , respectively. The majority of the Company’s lease payments related to the Fan Pier Leases are recorded as interest expense because the Company is deemed for accounting purposes to be the owner of the Buildings. Please refer to Note L, “Long Term Obligations,” for further information. The Company has outstanding leases, which are accounted for as capital leases, for equipment, leasehold improvements and software licenses. The capital leases bear interest at rates ranging from less than 1% to 9% per year. The following table sets forth the Company’s future minimum payments due under capital leases as of December 31, 2016 : Year (in thousands) 2017 $ 21,995 2018 21,393 2019 8,778 2020 3,336 2021 2,457 Thereafter 543 Total payments 58,502 Less: amount representing interest (4,100 ) Present value of payments $ 54,402 In addition, the Company has committed to make potential future milestone and royalty payments pursuant to certain collaboration agreements. Payments generally become due and payable upon the achievement of certain developmental, regulatory and/or commercial milestones. Please refer to Note B, “Collaborative Arrangements,” for further information. 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 sought 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 September 30, 2015, the court granted the Company’s motion to dismiss. On October 15, 2015, the plaintiff filed a notice of appeal. In 2016, the parties filed briefs with, and presented oral arguments to, the First Circuit Court of Appeals. On October 3, 2016, the First Circuit Court of Appeals affirmed the district court’s dismissal of the plaintiff’s complaint. The times for petitioning the U.S. Court of Appeals for the First Circuit for an en banc rehearing as well as filing a petition for certiorari to the U.S. Supreme Court both have passed. As of December 31, 2016 , the Company has not 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 December 31, 2016 or 2015 . |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Segment reporting is prepared on the same basis that the Company’s chief executive officer, who is the Company’s chief operating decision maker, manages the business, makes operating decisions and assesses performance. The Company operates in one segment, pharmaceuticals. Enterprise-wide disclosures about revenues, significant customers, and property and equipment, net by location are presented below. Revenues by Product Product revenues, net consisted of the following: 2016 2015 2014 (in thousands) KALYDECO $ 703,432 $ 631,674 $ 463,750 ORKAMBI 979,590 350,663 — INCIVEK 610 17,987 24,071 Total product revenues, net $ 1,683,632 $ 1,000,324 $ 487,821 Revenues by Geographic Location Total revenues from external customers and collaborators by geographic region consisted of the following. Product revenues are attributed to countries based on the location of the customer. Collaborative revenues are attributed to the operations of the Company in the United States. Royalty revenues are attributed to countries based on the location of the collaborator. 2016 2015 2014 (in thousands) United States $ 1,321,807 $ 763,316 $ 361,074 Outside of the United States Europe 320,456 219,596 197,611 Other 59,914 49,424 21,730 Total revenues outside of the United States 380,370 269,020 219,341 Total revenues $ 1,702,177 $ 1,032,336 $ 580,415 In 2016, 2015 and 2014, revenues attributable to the United Kingdom were the largest contributor to the Company’s European revenues. Significant Customers Gross revenues and accounts receivable from each of the Company’s customers who individually accounted for 10% or more of total gross revenues and/or 10% or more of total gross accounts receivable consisted of the following: Percent of Total Gross Revenues Percent of Gross Accounts Receivable Year Ended December 31, As of December 31, 2016 2015 2014 2016 2015 Walgreen Co. 19 % 20 % 12 % 15 % 15 % CVS/Caremark 19 % 17 % <10 % 17 % 17 % Accredo/Curascript 15 % 15 % <10 % 10 % 16 % Property and Equipment, Net by Location Property and equipment, net by location consisted of the following: As of December 31, 2016 2015 (in thousands) United States $ 665,552 $ 661,421 Outside of the United States United Kingdom 26,921 32,793 Other 5,889 3,501 Total property and equipment, net outside of the United States 32,810 36,294 Total property and equipment, net $ 698,362 $ 697,715 |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (unaudited) | Quarterly Financial Data (unaudited) The following table sets forth the Company’s quarterly financial data for the two years ended December 31, 2016 . Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share amounts) Revenues: Product revenues, net $ 394,410 $ 425,651 $ 409,689 $ 453,882 Royalty revenues 3,596 5,282 3,835 3,887 Collaborative revenues 74 675 259 937 Total revenues 398,080 431,608 413,783 458,706 Costs and expenses: Cost of product revenues 49,789 44,154 53,222 59,646 Royalty expenses 860 1,098 855 836 Research and development expenses (1) 255,860 271,008 272,370 248,452 Sales, general and administrative expenses 105,214 111,652 106,055 109,908 Restructuring expenses 687 343 8 224 Total costs and expenses 412,410 428,255 432,510 419,066 (Loss) income from operations (14,330 ) 3,353 (18,727 ) 39,640 Interest expense, net (20,698 ) (20,155 ) (20,140 ) (20,439 ) Other income (expense), net 4,411 (1,219 ) (167 ) 1,105 (Loss) income before provision for income taxes (30,617 ) (18,021 ) (39,034 ) 20,306 Provision for (benefit from) income taxes 5,485 18,130 503 (7,453 ) Net (loss) income (36,102 ) (36,151 ) (39,537 ) 27,759 (Income) loss attributable to noncontrolling interest (5,529 ) (28,374 ) 696 5,186 Net (loss) income attributable to Vertex $ (41,631 ) $ (64,525 ) $ (38,841 ) $ 32,945 Amounts per share attributable to Vertex common shareholders: Net (loss) income: Basic $ (0.17 ) $ (0.26 ) $ (0.16 ) $ 0.13 Diluted $ (0.17 ) $ (0.26 ) $ (0.16 ) $ 0.13 Shares used in per share calculations: Basic 243,831 244,482 244,920 245,454 Diluted 243,831 244,482 244,920 247,757 Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share amounts) Revenues: Product revenues, net $ 130,875 $ 160,388 $ 302,511 $ 406,550 Royalty revenues 6,792 5,077 5,759 6,331 Collaborative revenues 842 611 1,546 5,054 Total revenues 138,509 166,076 309,816 417,935 Costs and expenses: Cost of product revenues 9,381 15,409 30,269 62,092 Royalty expenses 2,926 1,451 1,691 1,293 Research and development expenses (2) 215,599 223,858 246,284 310,181 Sales, general and administrative expenses 85,860 94,394 99,772 96,549 Restructuring (income) expenses (3,272 ) 2,128 1,826 1,524 Total costs and expenses 310,494 337,240 379,842 471,639 Loss from operations (171,985 ) (171,164 ) (70,026 ) (53,704 ) Interest expense, net (21,307 ) (21,111 ) (21,134 ) (20,654 ) Other (expense) income, net (5,113 ) 1,414 (1,326 ) (1,690 ) Loss before provision for (benefit from) income taxes (198,405 ) (190,861 ) (92,486 ) (76,048 ) Provision for (benefit from) income taxes 299 30,131 1,330 (1,379 ) Net loss (198,704 ) (220,992 ) (93,816 ) (74,669 ) Loss (income) attributable to noncontrolling interest 98 32,144 (1,333 ) 938 Net loss attributable to Vertex $ (198,606 ) $ (188,848 ) $ (95,149 ) $ (73,731 ) Amounts per share attributable to Vertex common shareholders: Net loss: Basic and diluted $ (0.83 ) $ (0.78 ) $ (0.39 ) $ (0.30 ) Shares used in per share calculations: Basic and diluted 239,493 240,757 241,969 242,987 1. In the second quarter of 2016, the Company incurred research and development expenses of approximately $10.0 million to acquire certain early-stage research assets. In the third quarter of 2016, the Company incurred research and development expenses related to a $20.0 million upfront payment to Moderna Therapeutics, Inc. See Note B, “Collaborative Arrangements,” for further information. 2. In the fourth quarter of 2015, the Company made a $75.0 million upfront payment to CRISPR Therapeutics in connection with the collaboration, which was recorded as a research and development expense. See Note B, “Collaborative Arrangements,” for further information. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In February 2017, the Company decided to consolidate its research activities into its Boston, Milton Park and San Diego locations. As a result, the Company plans to close its Laval, Canada site. In connection with this decision, approximately 70 positions were affected and the Company estimates that it will incur aggregate restructuring expenses of approximately $ 10 million in the first quarter of 2017. In January 2017, the Company entered into the Merck KGaA Agreement. A description of the Merck KGaA Agreement is set forth in Note B, “Collaborative Arrangements.” In February 2017, the Company repaid all outstanding borrowings under the Credit Agreement. Further information on the Credit Agreement, including the February 2017 repayment, is set forth in Note L, “Long Term Obligations.” |
Nature of Business and Accoun31
Nature of Business and Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements reflect the operations of (i) the Company, (ii) its wholly-owned subsidiaries and (iii) consolidated variable interest entities (VIEs). In addition, the consolidated financial statements for 2014 reflect the operations of Alios BioPharma, Inc. (“Alios”), a former collaborator, as well as direct expenses Vertex incurred as a result of the Company’s agreement with Alios, as discontinued operations. All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. Please refer to Note T, “Segment Information,” for enterprise-wide disclosures regarding the Company’s revenues, major customers and long-lived assets by geographic area. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“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 consolidated financial statements, and the amounts of revenues and expenses during the reported periods. Significant estimates in these 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. |
Revenue Recognition | Revenue Recognition 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 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 Customer’s 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. Trade Allowances: The Company generally provides invoice discounts on product sales to its Customers for prompt payment and pays fees for distribution services, such as fees for certain data that Customers provide to the Company. The payment terms for sales to Customers in the United States generally include a discount for payment within 30 days. The Company expects that, based on its experience, its Customers will earn these discounts and fees, and deducts the full amount of these discounts and fees from its gross product revenues and accounts receivable at the time such revenues are recognized. Rebates, Chargebacks and Discounts: The Company contracts with government agencies and various private organizations (collectively, its “Third-party Payors”) so that products will be eligible for purchase by, or partial or full reimbursement from, such Third-party Payors. The Company estimates the rebates, chargebacks and discounts it will provide to Third-party Payors and deducts these estimated amounts from its gross product revenues at the time the revenues are recognized. For each product, the Company estimates the aggregate rebates, chargebacks and discounts that it will provide to Third-party Payors based upon (i) the Company’s contracts with these Third-party Payors, (ii) the government-mandated discounts applicable to government-funded programs, (iii) information obtained from the Company’s Customers and other third-party data regarding the payor mix for such product and (iv) historical experience. Product Returns: The Company estimates the amount of each product that will be returned and deducts these estimated amounts from its gross revenues at the time the revenues are recognized. The Company’s Customers have the right to return unopened unprescribed packages, subject to contractual limitations. To date product returns have been minimal and, based on inventory levels held by its Customers and its distribution model, the Company believes that returns of its products will continue to be minimal. Other Incentives: Other incentives that the Company offers include co-pay mitigation rebates provided by the Company to commercially insured patients who have coverage and who reside in states that permit co-pay mitigation programs. The Company’s co-pay mitigation programs are intended to reduce each participating patient’s portion of the financial responsibility for a product’s purchase price to a specified dollar amount. Based upon the terms of the Company’s co-pay mitigation programs, the Company estimates average co-pay mitigation amounts for each of its products in order to establish its accruals for co-pay mitigation rebates and deducts these estimated amounts from its gross product revenues at the later of the date (i) the revenues are recognized or (ii) the incentive is offered. The Company’s co-pay mitigation rebates are subject to expiration. 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. ORKAMBI net product revenues do not include any revenues from product sales in France. The Company began distributing ORKAMBI through early access programs in the fourth quarter of 2015. The Company’s consolidated balance sheet includes $73.4 million collected as of December 31, 2016 in France related to ORKAMBI that is classified as customer deposits. The Company expects that revenues from these early access programs will be recognized in the period that a formal reimbursement agreement in France is reached based on the terms of such agreement. The following table summarizes activity in each of the product revenue allowance and reserve categories for the three years ended December 31, 2016 : Trade Rebates, Product Other Total (in thousands) 2016 Beginning Balance $ 2,089 $ 44,669 $ 1,228 $ 1,310 $ 49,296 Provision related to current period sales 20,075 134,198 3,047 6,602 163,922 Adjustments related to prior period sales (90 ) 154 (17 ) (151 ) (104 ) Credits/payments made (19,506 ) (97,094 ) (766 ) (6,547 ) (123,913 ) Ending Balance $ 2,568 $ 81,927 $ 3,492 $ 1,214 $ 89,201 2015 Beginning Balance $ 1,463 $ 29,102 $ 4,713 $ 745 $ 36,023 Provision related to current period sales 10,890 65,781 779 3,755 81,205 Adjustments related to prior period sales (214 ) (19,410 ) (993 ) (235 ) (20,852 ) Credits/payments made (10,050 ) (30,804 ) (3,271 ) (2,955 ) (47,080 ) Ending Balance $ 2,089 $ 44,669 $ 1,228 $ 1,310 $ 49,296 2014 Beginning Balance $ 1,535 $ 68,244 $ 15,799 $ 1,555 $ 87,133 Provision related to current period sales 8,468 35,713 2,478 1,347 48,006 Adjustments related to prior period sales (43 ) 329 3,056 (72 ) 3,270 Credits/payments made (8,497 ) (75,184 ) (16,620 ) (2,085 ) (102,386 ) Ending Balance $ 1,463 $ 29,102 $ 4,713 $ 745 $ 36,023 The Company adjusts its estimated rebates, chargebacks and discounts based on new information, including information regarding actual rebates, chargebacks and discounts for its products, as it becomes available. Claims by third-party payors for rebates, chargebacks and discounts frequently are submitted to the Company significantly after the related sales, potentially resulting in adjustments in the period in which the new information becomes known. In each of the periods presented, the Company’s adjustments relating to prior period sales principally related to the Company’s estimates for INCIVEK. During the fourth quarter of 2014, the Company withdrew INCIVEK from the market in the United States. Royalty Revenues The Company’s royalty revenues on commercial sales of INCIVO (telaprevir) by Janssen NV were based on net sales of licensed products in licensed territories as provided by Janssen NV. The Company recognized royalty revenues in the period the sales occured. The Company has sold its rights to receive certain royalties on sales of an HIV protease inhibitor (fosamprenavir) and recognizes the revenues related to this sale as royalty revenues. In the circumstance where the Company has sold its rights to future royalties under a license agreement and also maintains continuing involvement in the royalty arrangement (but not significant continuing involvement in the generation of the cash flows payable to the purchaser of the future royalty rights), the Company defers recognition of the proceeds it receives for the royalty stream and recognizes these deferred revenues over the life of the license agreement pursuant to the units-of-revenue method. The Company’s estimates regarding the estimated remaining royalty payments due to the purchaser have changed in the past and may change in the future. Collaborative Revenues The Company recognizes revenues generated through collaborative research, development and/or commercialization agreements. The terms of these agreements typically include payment to the Company of one or more of the following: nonrefundable, up-front license fees; development and commercial milestone payments; funding of research and/or development activities; payments for services the Company provides through its third-party manufacturing network; and royalties on net sales of licensed products. Each of these types of payments results in collaborative revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues. For each collaborative research, development and/or commercialization agreement that result in revenues, the Company determines (i) whether multiple deliverables exist, (ii) whether the undelivered elements have value to the customer on a stand-alone basis, (iii) how the deliverables should be separated and (iv) how the consideration should be allocated to the deliverables. For arrangements entered into or materially modified after January 1, 2011, the Company allocates consideration in an arrangement using the relative selling price method based on management’s best estimate of selling price of deliverables if it does not have vendor-specific objective evidence or third-party evidence. As part of the accounting for these agreements, the Company must develop assumptions that require judgment to determine the best estimate of selling price. Key assumptions utilized by the Company to determine the best estimate of selling price may include forecasted revenues, patient enrollment requirements from regulatory authorities, development timelines, reimbursement rates for personnel costs, discount rates, and estimated third-party development costs. The Company evaluates amendments to its existing arrangements to determine whether they have been materially modified. In making its determination that an arrangement has been materially modified, the Company considers whether there have been significant changes to the consideration under the arrangement, the deliverables under the arrangement, the timing of deliverables and the period of the arrangement. If the arrangement is determined to have been materially modified, the Company allocates fixed consideration under the arrangement using its best estimate of selling price to the remaining undelivered elements at the date of material modification. Any consideration remaining after the allocation is recognized as revenue. Up-front License Fees: If the license to the Company’s intellectual property was determined to have stand-alone value from the other deliverables identified in the arrangement, the Company recognized revenues from nonrefundable, up-front license fees upon delivery. If these licenses did not have stand-alone value, the Company recognized revenues from nonrefundable, up-front license fees on a straight-line basis over the contracted or estimated period of performance. The Company evaluates the period of performance each reporting period and adjusts the period of performance on a prospective basis if there are changes to be made. Milestone Payments: At the inception of each agreement that included research and development milestone payments, the Company evaluated whether each milestone was substantive. The Company recognized revenues related to substantive milestones in full in the period in which the substantive milestone is achieved if payment is reasonably assured. If a milestone is not considered substantive, the Company recognized the applicable milestone payment over the period of performance. Research and Development Activities/Manufacturing Services: If the Company was entitled to reimbursement from its collaborators for specified research and development expenses and/or was entitled to payments for specified manufacturing services that the Company provided through its third-party manufacturing network, the Company determines whether the research and development funding would result in collaborative revenues or an offset to research and development expenses in accordance with the provisions of gross or net revenue presentation. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of money market funds and marketable securities. The Company places these investments with highly rated financial institutions, and, by policy, limits the amounts of credit exposure to any one financial institution. These amounts at times may exceed federally insured limits. The Company also maintains a foreign currency hedging program that includes foreign currency forward contracts with several counterparties. The Company has not experienced any credit losses related to these financial instruments and does not believe it is exposed to any significant credit risk related to these instruments. The Company also is subject to credit risk from its accounts receivable related to its product sales and collaborators. The Company evaluates the creditworthiness of each of its customers and has determined that all of its material customers are creditworthy. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. |
Marketable Securities | Marketable Securities The Company’s marketable securities consist of investments in government-sponsored enterprise securities, corporate debt securities, corporate equity securities and commercial paper that are classified as available-for-sale. The Company classifies marketable securities available to fund current operations as current assets on its consolidated balance sheets. Marketable securities are classified as long-term assets on the consolidated balance sheets if (i) they have been in an unrealized loss position for longer than one year and (ii) the Company has the ability and intent to hold them (a) until the carrying value is recovered and (b) such holding period may be longer than one year. The Company’s marketable securities are stated at fair value with their unrealized gains and losses included as a component of accumulated other comprehensive income (loss), which is a separate component of shareholders’ equity, until such gains and losses are realized. The fair value of these securities is based on quoted prices for identical or similar assets. The Company reviews investments in marketable securities for other-than-temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers whether it has an intent to sell, or whether it is more likely than not that the Company will be required to sell, the investment before recovery of the investment’s amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with the Company’s investment policy, the severity and the duration of the impairment and changes in value subsequent to year-end. If a decline in the fair value is considered other-than-temporary, based on available evidence, the unrealized loss is transferred from other comprehensive income (loss) to the consolidated statements of operations. Realized gains and losses are determined using the specific identification method and are included in other income (expense), net in the consolidated statements of operations |
Accounts Receivable | Accounts Receivable The Company deducts trade allowances for prompt payment and fees for distribution services from its accounts receivable based on its experience that the Company’s Customers will earn these discounts and fees. The Company’s estimates for its allowance for doubtful accounts, which have not been significant to date, are determined based on existing contractual payment terms and historical payment patterns. |
Stock-based Compensation Expense | Stock-based Compensation Expense The Company expenses the fair value of employee stock options and other forms of stock-based employee compensation over the associated employee service period on a straight-line basis. Stock-based compensation expense is determined based on the fair value of the award at the grant date, net of estimated forfeitures, and is adjusted each period to reflect actual forfeitures and the outcomes of certain performance conditions. For awards with performance conditions that accelerate vesting of the award, the Company estimates the likelihood of satisfaction of the performance conditions, which affects the period over which the expense is recognized, and recognizes the expense using the accelerated attribution model. For awards with performance conditions in which the award does not vest unless the performance condition is met, the Company recognizes expense if, and to the extent that, the Company estimates that achievement of the performance condition is probable. If the Company concludes that vesting is probable, it recognizes expense from the date it reaches this conclusion through the estimated vesting date. Effective for equity awards granted on or after February 5, 2014, the Company provides to employees who have rendered a certain number of years’ to the Company and meet certain age requirements, partial or full acceleration of vesting of these equity awards, subject to certain conditions including a notification period, upon a termination of employment other than for cause. Approximately 5% of the Company’s employees were eligible for partial or full acceleration of any of their equity awards as of December 31, 2016. The Company recognizes stock-based compensation expense related to these awards over a service period reflecting qualified employees eligibility for partial or full acceleration of vesting |
Research and Development Expenses | Research and Development Expenses The Company expenses as incurred all research and development expenses, including amounts funded by research and development collaborations. The Company capitalizes nonrefundable advance payments made by the Company for research and development activities and expenses the payments as the related goods are delivered or the related services are performed. Research and development expenses are comprised of costs incurred by the Company in performing research and development activities, including salary and benefits; stock-based compensation expense; laboratory supplies and other direct expenses; outsourced services, including clinical trial and pharmaceutical development costs; expenses associated with drug supplies that are not being capitalized; and infrastructure costs, including facilities costs and depreciation expense |
Advertising Expenses | Advertising Expenses The Company expenses the costs of advertising, including promotional expenses, as incurred |
Inventories | Inventories The Company values its inventories at the lower-of-cost or market. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and writes down any excess and obsolete inventories to their realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases are capitalized and recorded upon sale in cost of product revenues in the consolidated statements of operations. Shipping and handling costs incurred for product shipments are recorded as incurred in cost of product revenues in the consolidated statements of operations. The Company capitalizes inventories produced in preparation for initiating sales of a drug candidate when the related drug candidate is considered to have a high likelihood of regulatory approval and the related costs are expected to be recoverable through sales of the inventories. In determining whether or not to capitalize such inventories, the Company evaluates, among other factors, information regarding the drug candidate’s safety and efficacy, the status of regulatory submissions and communications with regulatory authorities and the outlook for commercial sales, including the existence of current or anticipated competitive drugs and the availability of reimbursement. In addition, the Company evaluates risks associated with manufacturing the drug candidate and the remaining shelf-life of the inventories |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation expense is recorded using the straight-line method over the estimated useful life of the related asset, generally seven to ten years for furniture and equipment, three to five years for computers and software, 40 years for buildings and for leasehold improvements, the shorter of the useful life of the improvements or the estimated remaining life of the associated lease. Amortization expense of assets acquired under capital leases is included in depreciation expense. Maintenance and repairs to an asset that do not improve or extend its life are charged to operations. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in the Company’s consolidated statements of operations. The Company performs an assessment of the fair value of the assets if indicators of impairment are identified during a reporting period and records the assets at the lower of the net book value or the fair value of the assets. The Company capitalizes internal costs incurred to develop software for internal use during the application development stage. The Company expenses costs related to the planning and post-implementation phases of development of software for internal use as these costs are incurred. Maintenance and enhancement costs (including costs in the post-implementation stages) are expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the software resulting in added functionality, in which case the costs are capitalized. Amortization of capitalized internally developed software costs is recorded in depreciation expense over the useful life of the related asset. The Company records certain construction costs incurred by a landlord as an asset and a corresponding financing obligation on the Company’s consolidated balance sheets when the Company is determined to be the owner of the buildings during construction for accounting purposes. Upon completion of the project, the Company performs a sale-leaseback analysis to determine if the Company can remove the assets from its consolidated balance sheet |
Capital Leases | Capital Leases The assets and liabilities associated with capital lease agreements are recorded at the present value of the minimum lease payments at the inception of the lease agreement. The assets are depreciated using the straight-line method over the shorter of the useful life of the related asset or the remaining life of the associated lease. Amortization of assets that the Company leases pursuant to a capital lease is included in depreciation expense. The Company performs an assessment of the fair value of the assets if indicators of impairment are identified during a reporting period and records the assets at the lower of the net book value or the fair value of the assets. Assets recorded under capital leases are recorded within “Property and equipment, net” and liabilities related to those assets are recorded within “Capital lease obligations, current portion” and “Capital lease obligations, excluding current portion” on the Company’s consolidated balance sheets. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the income tax bases of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company records liabilities related to uncertain tax positions by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company does not believe any such uncertain tax positions currently pending will have a material adverse effect on its consolidated financial statements |
Variable Interest Entities | Variable Interest Entities The Company reviews each collaboration agreement pursuant to which the Company licenses assets owned by a collaborator in order to determine whether or not the Company has a variable interest via the license agreement with the collaborator and if the variable interest is a variable interest in the collaborator as a whole. In assessing whether the Company has a variable interest in the collaborator as a whole, the Company considers and makes judgments regarding the purpose and design of the entity, the value of the licensed assets to the collaborator and the significant activities of the collaborator. If the Company has a variable interest in the collaborator as a whole, the Company assesses whether or not the Company is the primary beneficiary of that VIE based on a number of factors, including (i) which party has the power to direct the activities that most significantly affect the VIE’s economic performance, (ii) the parties’ contractual rights and responsibilities pursuant to the collaboration agreement and (iii) which party has the obligation to absorb losses of or the right to receive benefits from the VIE that could be significant to the VIE. If the Company determines it is the primary beneficiary of a VIE at the onset of the collaboration agreement, the collaboration is treated as a business combination and the Company consolidates the financial statements of the VIE into the Company’s consolidated financial statements. The Company evaluates whether it continues to be the primary beneficiary of any consolidated VIEs on a quarterly basis. If the Company determines that it is no longer the primary beneficiary of a consolidated VIE, or no longer has a variable interest in the VIE, it deconsolidates the VIE in the period that the determination is made. Assets recorded as a result of consolidating VIEs’ financial results into the Company’s consolidated balance sheet do not represent additional assets that could be used to satisfy claims against the Company’s general assets. With respect to the Company’s VIEs, the VIEs’ assets are not significant, except for the VIEs’ cash and cash equivalents. The Company records the cash and cash equivalents of consolidated VIEs as restricted cash because the Company does not have control over the VIEs’ cash and cash equivalents. The Company also has recorded the liabilities of its consolidated VIEs for which creditors do not have recourse to the Company’s general assets outside of the VIE |
Fair Value of In-process Research and Development Assets and Contingent Payments | Fair Value of In-process Research and Development Assets and Contingent Payments The present-value models used to estimate the fair values of research and development assets and contingent payments pursuant to collaborations incorporate significant assumptions, including: assumptions regarding the probability of obtaining marketing approval and/or achieving relevant development milestones for a drug candidate; estimates regarding the timing of and the expected costs to develop a drug candidate; estimates of future cash flows from potential product sales and/or the potential to achieve certain commercial milestones with respect to a drug candidate; and the appropriate discount and tax rates. |
In-process Research and Development Assets | In-process Research and Development Assets The Company records the fair value of in-process research and development assets as of the transaction date of a business combination. Each of these assets is accounted for as an indefinite-lived intangible asset and is maintained on the Company’s consolidated balance sheet until either the project underlying it is completed or the asset becomes impaired. If the asset becomes impaired or is abandoned, the carrying value of the related intangible asset is written down to its fair value, and an impairment charge is recorded in the period in which the impairment occurs. If a project is completed, the carrying value of the related intangible asset is amortized as a part of cost of product revenues over the remaining estimated life of the asset beginning in the period in which the project is completed. In-process research and development assets are tested for impairment on an annual basis as of October 1, and more frequently if indicators are present or changes in circumstances suggest that impairment may exist |
Goodwill | Goodwill The difference between the purchase price and the fair value of assets acquired and liabilities assumed in a business combination is allocated to goodwill. Goodwill is evaluated for impairment on an annual basis as of October 1, and more frequently if indicators are present or changes in circumstances suggest that impairment may exist |
Noncontrolling Interest | Noncontrolling Interest The Company records noncontrolling interest, which has historically related to consolidated VIEs, on its consolidated balance sheets. The Company records net loss (income) attributable to noncontrolling interest on its consolidated statements of operations, reflecting the VIEs’ net loss (income) for the reporting period, adjusted for changes in the noncontrolling interest holders’ claim to net assets, including contingent milestone, royalty and option payments, is evaluated each reporting period |
Deconsolidation and Discounted Operations | Deconsolidation and Discontinued Operations Upon the occurrence of certain events and on a regular basis, the Company evaluates whether it no longer has a controlling interest in its subsidiaries, including consolidated VIEs. If the Company determines it no longer has a controlling interest, the subsidiary is deconsolidated. The Company records a gain or loss on deconsolidation based on the difference on the deconsolidation date between (i) the aggregate of (a) the fair value of any consideration received, (b) the fair value of any retained noncontrolling investment in the former subsidiary and (c) the carrying amount of any noncontrolling interest in the subsidiary being deconsolidated, less (ii) the carrying amount of the former subsidiary’s assets and liabilities. The Company assesses whether a deconsolidation is required to be presented as discontinued operations in its consolidated financial statements on the deconsolidation date. This assessment is based on whether or not the deconsolidation represents a strategic shift that has or will have a major effect on the Company’s operations or financial results. If the Company determines that a deconsolidation requires presentation as a discontinued operation on the deconsolidation date, or at any point during the one year period following such date, it will present the former subsidiary as a discontinued operation in current and comparative period financial statements |
Derivative Instruments, Embedded Derivatives and Hedging Activities | Derivative Instruments, Embedded Derivatives and Hedging Activities The Company has entered into financial transactions involving free-standing derivative instruments and embedded derivatives in the past. Embedded derivatives are required to be bifurcated from the host instruments if the derivatives are not clearly and closely related to the host instruments. The Company determines the fair value of each derivative instrument or embedded derivative that is identified on the date of issuance and at the end of each quarterly period. The estimates of the fair value of the derivatives include significant assumptions regarding the estimates market participants would make in order to evaluate these derivatives. The Company recognizes the fair value of hedging instruments that are designated and qualify as hedging instruments pursuant to GAAP, primarily foreign currency forward contracts, as either assets or liabilities on the consolidated balance sheets. Changes in the fair value of hedging instruments are recorded each period in accumulated other comprehensive income (loss) as unrealized gains and losses until the forecasted underlying transaction occurs. Unrealized gains and losses on these foreign currency forward contracts are included in (i) “Prepaid expenses and other current assets,” (ii) Other assets,” (iii) “Other liabilities, current portion” and (iv) “Other liabilities, excluding current portion,” respectively, on the Company’s consolidated balance sheets. Realized gains and losses for the effective portion of such contracts are recognized in “Product revenues, net” in the consolidated statement of operations when the contract is settled with the counterparty. The Company classifies the cash flows from hedging instruments in the same category as the cash flows from the hedged items. Certain of the Company’s hedging instruments are subject to master netting arrangements to reduce the risk arising from such transactions with its counterparties. The Company presents unrealized gains and losses on its foreign currency forward contracts on a gross basis within its consolidated balance sheets. The Company assesses, both at inception and on an ongoing basis, whether the foreign currency forward contracts used in hedging transactions are highly effective in offsetting the changes in cash flows of the hedged items. The Company also assesses hedge ineffectiveness quarterly and, if determined to be ineffective, records the gain or loss related to the ineffective portion to earnings in “Other income (expense), net” in its consolidated statements of operations |
Restructuring Expenses | Restructuring Expenses The Company records costs and liabilities associated with exit and disposal activities based on estimates of fair value in the period the liabilities are incurred. In periods subsequent to the initial measurement, the Company measures changes to the liability using the credit-adjusted risk-free discount rate applied in the initial period. The Company evaluates and adjusts these liabilities as appropriate for changes in circumstances at least on a quarterly basis. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss), which includes foreign currency translation adjustments and unrealized gains and losses on foreign currency forward contracts and certain marketable securities. For purposes of comprehensive income (loss) disclosures, the Company records tax provisions or benefits related to the unrealized gains and losses on foreign currency forward contracts and certain marketable securities. The Company does not record tax provisions or benefits related to the cumulative translation adjustment, as the Company intends to permanently reinvest undistributed earnings in its foreign subsidiaries |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The Company primarily operates with entities that have the U.S. dollar denominated as their functional currency. Non-U.S. dollar denominated functional currency subsidiaries have assets and liabilities translated into U.S. dollars at rates of exchange in effect at the end of the year. Revenue and expense amounts are translated using the average exchange rates for the period. Net unrealized gains and losses resulting from foreign currency translation are included in accumulated other comprehensive income (loss), which is a separate component of shareholders’ equity |
Net Loss Per Share Attributable to Vertex Common Stockholders | Net Loss Per Share Attributable to Vertex Common Shareholders Basic and diluted net loss per share attributable to Vertex common shareholders are presented in conformity with the two-class method required for participating securities. Under the two-class method, earnings are allocated to (i) Vertex common shares, excluding unvested restricted stock, and (ii) participating securities, based on their respective weighted-average shares outstanding for the period. Shares of unvested restricted stock granted under the Company’s Amended and Restated 2006 Stock and Option Plan have the non-forfeitable right to receive dividends on an equal basis with other outstanding common stock. As a result, these unvested shares of restricted stock are considered participating securities under the two-class method. Potentially dilutive shares result from the assumed exercise of outstanding stock options (the proceeds of which are then assumed to have been used to repurchase outstanding stock using the treasury stock method). 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 that has been issued but is 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 utilizes income (loss) from continuing operations attributable to Vertex to determine whether potentially outstanding stock options and the assumed conversion of convertible notes are dilutive |
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 principles based approach to recognizing revenue. Under the new guidance, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration that an entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The new guidance must be adopted using either a modified retrospective approach or a full retrospective approach for all periods presented. Under the modified retrospective method, the cumulative effect of applying the standard would be recognized at the date of initial application within retained earnings. Under the full retrospective approach, the standard would be applied to each prior reporting period presented. The Company expects to adopt the new guidance using the modified retrospective method. The Company is in the process of evaluating the new guidance and determining whether the expected effect is material to its consolidated financial statements. The process includes identifying and analyzing the impact of the standard by reviewing the Company’s current accounting policies and practices to identify potential differences that would result from applying the requirements of the new standard to each revenue contract associated with all of the Company’s revenue streams. The new guidance could impact the Company’s accounting for product shipments to countries through early access programs, for example the French early access programs, whereby the associated product has received regulatory approval but the reimbursement rate has not been finalized. 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 with early adoption permitted. This guidance 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 plans to change how it accounts for forfeitures upon adoption and is currently quantifying the adjustment to be recorded to retained earnings related to this change in policy. In addition, the Company will include certain net operating losses and tax credits, offset with a full valuation allowance, as a component of deferred taxes upon adoption of this guidance that were previously not included in deferred taxes. The Company will also record a corresponding valuation allowance against these increased net operating loss carryforwards upon adoption of this new guidance. 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 does not expect a significant effect on its consolidated financial statements upon adoption of this new guidance. In January 2017, the FASB issued amended guidance related to business combinations. The new guidance clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The new accounting guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted. The Company plans to apply this new guidance to future acquisitions. In 2014, the FASB issued new guidance on management’s responsibility in evaluating whether or not there is substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued each reporting period. This new accounting guidance became effective for the Company for the year ended December 31, 2016. The adoption of the new guidance did not have a material effect on the Company’s consolidated financial statements |
Nature of Business and Accoun32
Nature of Business and Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of product revenues allowances and reserve categories | The following table summarizes activity in each of the product revenue allowance and reserve categories for the three years ended December 31, 2016 : Trade Rebates, Product Other Total (in thousands) 2016 Beginning Balance $ 2,089 $ 44,669 $ 1,228 $ 1,310 $ 49,296 Provision related to current period sales 20,075 134,198 3,047 6,602 163,922 Adjustments related to prior period sales (90 ) 154 (17 ) (151 ) (104 ) Credits/payments made (19,506 ) (97,094 ) (766 ) (6,547 ) (123,913 ) Ending Balance $ 2,568 $ 81,927 $ 3,492 $ 1,214 $ 89,201 2015 Beginning Balance $ 1,463 $ 29,102 $ 4,713 $ 745 $ 36,023 Provision related to current period sales 10,890 65,781 779 3,755 81,205 Adjustments related to prior period sales (214 ) (19,410 ) (993 ) (235 ) (20,852 ) Credits/payments made (10,050 ) (30,804 ) (3,271 ) (2,955 ) (47,080 ) Ending Balance $ 2,089 $ 44,669 $ 1,228 $ 1,310 $ 49,296 2014 Beginning Balance $ 1,535 $ 68,244 $ 15,799 $ 1,555 $ 87,133 Provision related to current period sales 8,468 35,713 2,478 1,347 48,006 Adjustments related to prior period sales (43 ) 329 3,056 (72 ) 3,270 Credits/payments made (8,497 ) (75,184 ) (16,620 ) (2,085 ) (102,386 ) Ending Balance $ 1,463 $ 29,102 $ 4,713 $ 745 $ 36,023 |
Collaborative Arrangements (Tab
Collaborative Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Fair Value of Consideration Transferred | The up-front payment made and the fair value of the contingent payments payable by the Company pursuant to the Parion Agreement are set forth in the table below: June 4, 2015 (in thousands) Up-front payment $ 80,000 Fair value of contingent payments 175,340 Total $ 255,340 |
Schedule of Collaborative Arrangement Summary of Final Fair Values of the Assets and Liabilities Recorded on the Effective Date of the Agreement | : June 4, 2015 (in thousands) Consideration transferred $ — Noncontrolling interest 164,317 Intangible assets (255,340 ) Net other liabilities 10,468 Deferred tax liability 91,023 Goodwill $ 10,468 |
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 years ended December 31, 2016 was as follows: 2016 2015 2014 (in thousands) Loss attributable to noncontrolling interest before provision for income taxes $ 10,086 $ 6,646 $ 764 Provision for income taxes 16,743 29,731 3,876 Increase in fair value of contingent payments (54,850 ) (4,530 ) (450 ) Net (income) loss attributable to noncontrolling interest $ (28,021 ) $ 31,847 $ 4,190 |
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 consolidated balance sheets as of the dates set forth in the table: December 31, 2016 December 31, 2015 (in thousands) Restricted cash and cash equivalents (VIE) $ 47,762 $ 78,910 Prepaid expenses and other current assets 6,812 3,138 Intangible assets 284,340 284,340 Goodwill 19,391 19,391 Other assets 399 455 Accounts payable 415 676 Taxes payable 1,330 24,554 Other current liabilities 2,137 7,100 Deferred tax liability, net 131,446 110,438 Other liabilities 300 300 Noncontrolling interest 181,609 153,661 |
Schedule of Collaborative Arrangements and Non-collaborative Arrangement Transactions - Royalty and Collaborative Revenues | During the three years ended December 31, 2016 , the Company recognized the following revenues attributable to the Janssen HCV collaboration: 2016 2015 2014 (in thousands) Royalty revenues $ 71 $ 1,518 $ 13,481 Collaborative revenues $ (155 ) $ 1,946 $ 7,104 Total revenues attributable to the Janssen HCV collaboration $ (84 ) $ 3,464 $ 20,585 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 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 from continuing operations per share attributable to Vertex common shareholders calculations because the effect would have been anti-dilutive during each period. 2016 2015 2014 (in thousands) Stock options 12,642 11,145 12,003 Unvested restricted stock and restricted stock units 3,546 3,024 3,091 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Financial assets subject to fair value measurements (excluding restricted cash and cash equivalents (VIE)) | The following table sets forth the Company’s financial assets (excluding VIE cash and cash equivalents) subject to fair value measurements: 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 $ 280,560 $ 280,560 $ — $ — Marketable securities: Government-sponsored enterprise securities 15,508 15,508 — — Corporate equity securities 64,560 64,560 — — Commercial paper 59,404 — 59,404 — Corporate debt securities 111,140 — 111,140 — Prepaid and other current assets: Foreign currency forward contracts 14,407 — 14,407 — Other assets: Foreign currency forward contracts 1,186 $ — 1,186 $ — Total financial assets $ 546,765 $ 360,628 $ 186,137 $ — Financial instruments carried at fair value (liability position): Other liabilities, current portion: Foreign currency forward contracts $ (144 ) $ — $ (144 ) $ — Total financial liabilities $ (144 ) $ — $ (144 ) $ — 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) | 12 Months Ended |
Dec. 31, 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) December 31, 2016 Cash and cash equivalents: Cash and money market funds $ 1,183,945 $ — $ — $ 1,183,945 Total cash and cash equivalents $ 1,183,945 $ — $ — $ 1,183,945 Marketable securities: Government-sponsored enterprise securities (matures within 1 year) $ 15,506 $ 2 $ — $ 15,508 Corporate equity securities (matures within 1 year) 43,213 21,347 — 64,560 Commercial paper (matures within 1 year) 59,331 73 — 59,404 Corporate debt securities (matures within 1 year) 111,225 — (85 ) 111,140 Total marketable securities 229,275 21,422 (85 ) 250,612 Total cash, cash equivalents and marketable securities $ 1,413,220 $ 21,422 $ (85 ) $ 1,434,557 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 (matures within 1 year) $ 87,176 $ — $ (14 ) $ 87,162 Commercial paper (matures within 1 year) 98,877 246 — 99,123 Corporate debt securities (matures 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 Comprehensi37
Accumulated Other Comprehensive Income (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Reclassifications out of Accumulated Other Comprehensive Income | The following table summarizes the changes in accumulated other comprehensive income by component: Foreign currency translation adjustment Unrealized holding gains (losses) on marketable securities, net of tax Unrealized (losses) gains on foreign currency forward contracts, net of tax Total (in thousands) Balance at December 31, 2013 $ (325 ) $ 42 $ (23 ) $ (306 ) Other comprehensive (loss) income before reclassifications (646 ) (165 ) 3,591 2,780 Amounts reclassified from accumulated other comprehensive loss — — (1,557 ) (1,557 ) Net current period other comprehensive (loss) income (646 ) (165 ) 2,034 1,223 Balance at December 31, 2014 $ (971 ) $ (123 ) $ 2,011 $ 917 Other comprehensive (loss) income before reclassifications (1,109 ) 249 6,493 5,633 Amounts reclassified from accumulated other comprehensive loss — — (4,726 ) (4,726 ) Net current period other comprehensive (loss) income (1,109 ) 249 1,767 907 Balance at December 31, 2015 $ (2,080 ) $ 126 $ 3,778 $ 1,824 Other comprehensive (loss) income before reclassifications (5,782 ) 17,395 17,383 28,996 Amounts reclassified from accumulated other comprehensive loss — — (9,647 ) (9,647 ) Net current period other comprehensive (loss) income (5,782 ) 17,395 7,736 19,349 Balance at December 31, 2016 $ (7,862 ) $ 17,521 $ 11,514 $ 21,173 |
Hedging (Tables)
Hedging (Tables) | 12 Months Ended |
Dec. 31, 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 December 31, 2016 As of December 31, 2015 Foreign Currency (in thousands) Euro $ 164,368 $ 103,362 British pound sterling 65,237 78,756 Australian dollar 23,776 27,167 Total foreign currency forward contracts $ 253,381 $ 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 consolidated balance sheets: As of December 31, 2016 Assets Liabilities Classification Fair Value Classification Fair Value (in thousands) Prepaid and other current assets $ 14,407 Other liabilities, current portion $ (144 ) Other assets 1,186 Other liabilities, excluding current portion — Total assets $ 15,593 Total liabilities $ (144 ) 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 consolidated balance sheets: As of December 31, 2016 Gross Amounts Recognized Gross Amounts Offset Gross Amount Presented Gross Amount Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 15,593 $ — $ 15,593 $ (144 ) $ 15,449 Total liabilities $ (144 ) $ — $ (144 ) $ 144 $ — As of December 31, 2015 Gross Amounts Recognized Gross Amounts Offset Gross Amount Presented Gross Amount 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) | 12 Months Ended |
Dec. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories by Type | Inventories consisted of the following: As of December 31, 2016 2015 (in thousands) Raw materials $ 6,348 $ 8,696 Work-in-process 56,672 40,695 Finished goods 14,584 7,816 Total $ 77,604 $ 57,207 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and equipment | Property and equipment, net consisted of the following: As of December 31, 2016 2015 (in thousands) Buildings $ 548,232 $ 531,627 Furniture and equipment 236,634 218,623 Software 134,321 124,469 Leasehold improvements 108,702 106,768 Computers 58,271 52,295 Total property and equipment, gross 1,086,160 1,033,782 Less: accumulated depreciation (387,798 ) (336,067 ) Total property and equipment, net $ 698,362 $ 697,715 |
Additional Balance Sheet Deta41
Additional Balance Sheet Detail (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Prepaid and other current assets | Prepaid and other current assets consisted of the following: As of December 31, 2016 2015 (in thousands) Prepaid expenses $ 36,134 $ 22,058 Fair value foreign currency forward contracts 14,407 5,161 Taxes receivable 3,213 14,682 Other 16,780 12,835 Total $ 70,534 $ 54,736 |
Accrued expenses and other current liabilities | Accrued expenses consisted of the following: As of December 31, 2016 2015 (in thousands) Payroll and benefits $ 86,387 $ 87,873 Research, development and commercial contract costs 62,756 55,677 Product revenue allowances 86,533 47,209 Royalty payable 52,845 60,191 Taxes payable and reserves (including VIE taxes payable) 6,883 30,953 Professional fees 6,512 7,455 Interest 1,390 4,642 Other 11,943 11,820 Total $ 315,249 $ 305,820 |
Other liabilities, excluding current portion | Other liabilities, excluding current portion consisted of the following: As of December 31, 2016 2015 (in thousands) Advance from CFFT $ 73,423 $ — Deferred rent 19,551 22,235 Other 9,148 9,543 Total $ 102,122 $ 31,778 |
Common Stock, Preferred Stock42
Common Stock, Preferred Stock and Equity Plans (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Schedule of stock and stock equity plans | The following table contains information about the Company’s equity plans: As of December 31, 2016 Title of Plan Group Eligible Type of Award Awards Additional Awards 2013 Stock and Option Plan Employees, Non-employee Directors and Consultants NSO, 9,832,269 9,180,002 2006 Stock and Option Plan Employees, Non-employee Directors and Consultants NSO, 6,355,357 — Total 16,187,626 9,180,002 |
Outstanding and vested options | The following table summarizes information related to the outstanding and exercisable options during the year ended December 31, 2016 : Stock Options Weighted-average Weighted-average Aggregate Intrinsic (in thousands) (per share) (in years) (in thousands) Outstanding at December 31, 2015 11,145 $ 75.99 Granted 3,183 $ 91.36 Exercised (1,064 ) $ 45.61 Forfeited (544 ) $ 94.62 Expired (78 ) $ 107.51 Outstanding at December 31, 2016 12,642 $ 81.41 7.06 $ 124,939 Exercisable at December 31, 2016 7,323 $ 68.92 6.00 $ 121,671 Exercisable and Expected to Vest at December 31, 2016 12,200 $ 80.76 7.00 $ 124,892 |
Stock options outstanding and exercisable | The following table summarizes information about stock options outstanding and exercisable at December 31, 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 1.10 $ 18.93 137 $ 18.93 $20.01–$40.00 1,696 3.19 $ 33.94 1,696 $ 33.94 $40.01–$60.00 1,867 5.59 $ 48.26 1,762 $ 48.44 $60.01–$80.00 1,345 7.11 $ 75.90 891 $ 75.60 $80.01–$100.00 4,529 8.45 $ 90.60 1,548 $ 89.61 $100.01–$120.00 1,604 8.05 $ 109.33 702 $ 109.29 $120.01–$134.69 1,464 8.53 $ 130.58 587 $ 130.17 Total 12,642 7.06 $ 81.41 7,323 $ 68.92 |
Restricted stock and restricted stock units activity | The following table summarizes the restricted stock and restricted stock unit activity of the Company during the year ended December 31, 2016 : Restricted Stock Restricted Stock Units Number of Units Weighted-average Number of Shares Weighted-average (in thousands) (per share) (in thousands) (per share) Unvested at December 31, 2015 2,831 $ 98.80 193 $ 98.36 Granted 857 $ 91.49 847 $ 90.46 Vested (817 ) $ 79.28 (59 ) $ 83.13 Cancelled (258 ) $ 98.56 (48 ) $ 94.54 Unvested at December 31, 2016 2,613 $ 102.54 933 $ 92.35 |
Shares issued under Employee Stock Purchase Plan | In 2016 , the following shares were issued to employees under the ESPP: Year Ended December 31, 2016 (in thousands, Number of shares 272 Average price paid per share $ 70.70 |
Stock-based Compensation Expe43
Stock-based Compensation Expense (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation expense by line item | The effect of stock-based compensation expense during the three years ended December 31, 2016 was as follows: 2016 2015 2014 (in thousands) Stock-based compensation expense by line item: Research and development expenses $ 153,451 $ 152,955 $ 116,998 Sales, general and administrative expenses 84,254 78,070 60,544 Total stock-based compensation expense included in costs and expenses $ 237,705 $ 231,025 $ 177,542 |
Stock-based compensation expense by type of award | The stock-based compensation expense by type of award during the three years ended December 31, 2016 was as follows: 2016 2015 2014 (in thousands) Stock-based compensation expense by type of award: Stock options $ 114,768 $ 129,276 $ 99,961 Restricted stock and restricted stock units 118,709 98,811 70,678 ESPP share issuances 7,835 7,025 8,326 Less: stock-based compensation expense capitalized to inventories (3,607 ) (4,087 ) (1,423 ) Total stock-based compensation expense included in costs and expenses $ 237,705 $ 231,025 $ 177,542 |
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, as of December 31, 2016 , by type of award and the weighted-average period over which that expense is expected to be recognized: As of December 31, 2016 Unrecognized Expense Weighted-average (in thousands) (in years) Type of award: Stock options $ 157,819 2.50 Restricted stock and restricted stock units $ 176,972 2.39 ESPP share issuances $ 4,080 0.58 |
Schedule of assumptions used to estimate the grant date fair value of options | The fair value of each option granted during 2016 , 2015 and 2014 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: 2016 2015 2014 Expected stock price volatility 46.77 % 47.29 % 50.86 % Risk-free interest rate 1.32 % 1.61 % 1.77 % Expected term of options (in years) 4.91 5.28 5.47 Expected annual dividends — — — |
Schedule of assumptions used to estimate the grant date fair value employee stock purchase plan | The following table reflects the weighted-average assumptions used in the Black-Scholes option pricing model for 2016 , 2015 and 2014 : 2016 2015 2014 Expected stock price volatility 48.22 % 47.20 % 60.32 % Risk-free interest rate 0.56 % 0.40 % 0.09 % Expected term (in years) 0.75 0.72 0.75 Expected annual dividends — — — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income (loss) before provision for (benefit from) income taxes | The components of loss from continuing operations before provision for income taxes during the three years ended December 31, 2016 consisted of the following: 2016 2015 2014 (in thousands) United States $ (147,860 ) $ (272,326 ) $ (645,465 ) Foreign 80,494 (285,474 ) (89,410 ) Loss from continuing operations before provision for income taxes $ (67,366 ) $ (557,800 ) $ (734,875 ) |
Schedule of components of provision for (benefit from) income taxes | The components of the provision for income taxes from continuing operations during the three years ended December 31, 2016 consisted of the following: 2016 2015 2014 (in thousands) Current taxes: United States $ (3,821 ) $ 25,623 $ 2,853 Foreign 1,794 831 2,457 State 1,836 3,629 1,366 Total current taxes $ (191 ) $ 30,083 $ 6,676 Deferred taxes: United States $ 18,659 $ 497 $ 244 Foreign (3,359 ) (355 ) — State 1,556 156 38 Total deferred taxes $ 16,856 $ 298 $ 282 Provision for income taxes $ 16,665 $ 30,381 $ 6,958 |
Reconciliation of the provision for (benefit from) income taxes | The difference between the Company’s “expected” tax provision (benefit), as computed by applying the U.S. federal corporate tax rate of 35% to loss from continuing operations before provision for income taxes, and actual tax is reconciled as follows: 2016 2015 2014 (in thousands) Loss from continuing operations before provision for income taxes $ (67,366 ) $ (557,800 ) $ (734,875 ) Expected tax provision (benefit) (23,578 ) (195,230 ) (257,206 ) State taxes, net of federal benefit 3,621 3,800 1,124 Foreign rate differential 21,346 47,402 39,335 Tax credits (47,773 ) (55,696 ) (33,788 ) Unbenefitted operating losses (gains) 14,837 226,169 241,037 Non-deductible expenses 24,749 5,817 18,756 Rate change 12,836 (1,224 ) (1,826 ) Tax attribute expiration 9,947 — — Other 680 (657 ) (474 ) Provision for income taxes $ 16,665 $ 30,381 $ 6,958 |
Schedule of deferred tax assets and liabilities | The components of the deferred taxes were as follows: As of December 31, 2016 2015 (in thousands) Deferred tax assets: Net operating loss $ 1,232,399 $ 1,250,642 Tax credit carryforwards 367,402 315,535 Property and equipment 22 — Intangible assets 34,938 14,673 Deferred revenues 31,205 9,341 Stock-based compensation 110,446 93,404 Inventories 4,705 5,913 Accrued expenses 23,078 27,236 Currency translation adjustment — 222 Unrealized loss 5 — Construction financing lease obligation 177,735 176,250 Gross deferred tax assets 1,981,935 1,893,216 Valuation allowance (1,731,186 ) (1,716,349 ) Total deferred tax assets 250,749 176,867 Deferred tax liabilities: Property and equipment (169,089 ) (175,424 ) Acquired intangibles (134,063 ) (110,439 ) Deferred revenue $ (73,357 ) $ — Unrealized gain $ (7,967 ) $ (1,088 ) Net deferred tax liabilities $ (133,727 ) $ (110,084 ) |
Schedule of unrecognized tax benefits | Unrecognized tax benefits during the two years ended December 31, 2016 consisted of the following: 2016 2015 (in thousands) Unrecognized tax benefits beginning of year $ 425 $ 880 Decrease due to statute of limitations expiring (425 ) — Decrease due to settlements and payments — (455 ) Unrecognized tax benefits end of year $ — $ 425 |
Restructuring Expenses (Tables)
Restructuring Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
2003 Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring and other liabilities | The activity related to restructuring and other liability for 2003 was as follows: Restructuring Expense Cash Non-cash Liability as of (in thousands) Lease restructuring and other operating lease expense $ 84,726 $ (15,200 ) $ — $ 69,526 Employee severance, benefits and related costs 2,616 (2,616 ) — — Leasehold improvements and asset impairments 4,482 — (4,482 ) — Total $ 91,824 $ (17,816 ) $ (4,482 ) $ 69,526 |
Activity related to the restructuring liability | The activities related to 2003 restructuring liability for 2004 through 2016 were as follows: 2016 2015 2014 2004-2016 (in thousands) Liability, beginning of the period $ 7,944 $ 11,596 $ 19,115 $ 69,526 Cash payments (15,841 ) (14,625 ) (17,494 ) (226,912 ) Cash received from subleases 11,892 11,089 12,912 111,601 Credit for portion of facility Vertex decided to occupy in 2005 — — — (10,018 ) Restructuring expense 333 (116 ) (2,937 ) 60,131 Liability, end of the period $ 4,328 $ 7,944 $ 11,596 $ 4,328 |
Fan Pier Move Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring and related liability | The activities related to the Fan Pier relocation restructuring liability for the three years ended December 31, 2016 were as follows: 2016 2015 2014 (in thousands) Liability, beginning of the period $ 5,964 $ 33,390 $ 797 Cash payments (12,674 ) (30,022 ) (18,271 ) Cash received from subleases 9,751 4,229 — Restructuring expense 585 (1,633 ) 50,864 Liability, end of the period $ 3,626 $ 5,964 $ 33,390 |
Other Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring and related liability | The activities related to the Company’s other restructuring liabilities for the three years ended December 31, 2016 were as follows: 2016 2015 2014 (in thousands) Liability, beginning of the period $ 1,450 $ 869 $ 8,441 Cash payments (1,794 ) (3,374 ) (10,570 ) Restructuring expense 344 3,955 2,998 Liability, end of the period $ — $ 1,450 $ 869 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum commitments under Fan Pier Leases and facility operating leases with terms of more than one year, net of estimated sublease income | As of December 31, 2016 , future minimum commitments under the facility leases with terms of more than one year and contractual sublease income under the Company’s subleases for the Kendall Square Facility were as follows: Year Fan Pier San Diego Leases Kendall Square Kendall Sublease Other Total Lease (Net of Sublease Income) (in thousands) 2017 $ 67,206 $ 3,147 $ 20,088 $ (15,687 ) $ 13,156 $ 87,910 2018 67,206 3,245 6,696 (5,236 ) 12,975 84,886 2019 72,589 6,906 — — 11,746 91,241 2020 72,589 9,208 — — 11,100 92,897 2021 72,589 9,208 — — 10,300 92,097 Thereafter 535,032 138,217 — — 62,409 735,658 Total minimum lease payments $ 887,211 $ 169,931 $ 26,784 $ (20,923 ) $ 121,686 $ 1,184,689 |
Schedule of future minimum lease payments for capital leases | The following table sets forth the Company’s future minimum payments due under capital leases as of December 31, 2016 : Year (in thousands) 2017 $ 21,995 2018 21,393 2019 8,778 2020 3,336 2021 2,457 Thereafter 543 Total payments 58,502 Less: amount representing interest (4,100 ) Present value of payments $ 54,402 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Revenues by Product | Product revenues, net consisted of the following: 2016 2015 2014 (in thousands) KALYDECO $ 703,432 $ 631,674 $ 463,750 ORKAMBI 979,590 350,663 — INCIVEK 610 17,987 24,071 Total product revenues, net $ 1,683,632 $ 1,000,324 $ 487,821 |
Revenues and Property and Equipment by Location | Property and equipment, net by location consisted of the following: As of December 31, 2016 2015 (in thousands) United States $ 665,552 $ 661,421 Outside of the United States United Kingdom 26,921 32,793 Other 5,889 3,501 Total property and equipment, net outside of the United States 32,810 36,294 Total property and equipment, net $ 698,362 $ 697,715 Total revenues from external customers and collaborators by geographic region consisted of the following. Product revenues are attributed to countries based on the location of the customer. Collaborative revenues are attributed to the operations of the Company in the United States. Royalty revenues are attributed to countries based on the location of the collaborator. 2016 2015 2014 (in thousands) United States $ 1,321,807 $ 763,316 $ 361,074 Outside of the United States Europe 320,456 219,596 197,611 Other 59,914 49,424 21,730 Total revenues outside of the United States 380,370 269,020 219,341 Total revenues $ 1,702,177 $ 1,032,336 $ 580,415 |
Significant Customers | Gross revenues and accounts receivable from each of the Company’s customers who individually accounted for 10% or more of total gross revenues and/or 10% or more of total gross accounts receivable consisted of the following: Percent of Total Gross Revenues Percent of Gross Accounts Receivable Year Ended December 31, As of December 31, 2016 2015 2014 2016 2015 Walgreen Co. 19 % 20 % 12 % 15 % 15 % CVS/Caremark 19 % 17 % <10 % 17 % 17 % Accredo/Curascript 15 % 15 % <10 % 10 % 16 % |
Quarterly Financial Data (una48
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial data | The following table sets forth the Company’s quarterly financial data for the two years ended December 31, 2016 . Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share amounts) Revenues: Product revenues, net $ 394,410 $ 425,651 $ 409,689 $ 453,882 Royalty revenues 3,596 5,282 3,835 3,887 Collaborative revenues 74 675 259 937 Total revenues 398,080 431,608 413,783 458,706 Costs and expenses: Cost of product revenues 49,789 44,154 53,222 59,646 Royalty expenses 860 1,098 855 836 Research and development expenses (1) 255,860 271,008 272,370 248,452 Sales, general and administrative expenses 105,214 111,652 106,055 109,908 Restructuring expenses 687 343 8 224 Total costs and expenses 412,410 428,255 432,510 419,066 (Loss) income from operations (14,330 ) 3,353 (18,727 ) 39,640 Interest expense, net (20,698 ) (20,155 ) (20,140 ) (20,439 ) Other income (expense), net 4,411 (1,219 ) (167 ) 1,105 (Loss) income before provision for income taxes (30,617 ) (18,021 ) (39,034 ) 20,306 Provision for (benefit from) income taxes 5,485 18,130 503 (7,453 ) Net (loss) income (36,102 ) (36,151 ) (39,537 ) 27,759 (Income) loss attributable to noncontrolling interest (5,529 ) (28,374 ) 696 5,186 Net (loss) income attributable to Vertex $ (41,631 ) $ (64,525 ) $ (38,841 ) $ 32,945 Amounts per share attributable to Vertex common shareholders: Net (loss) income: Basic $ (0.17 ) $ (0.26 ) $ (0.16 ) $ 0.13 Diluted $ (0.17 ) $ (0.26 ) $ (0.16 ) $ 0.13 Shares used in per share calculations: Basic 243,831 244,482 244,920 245,454 Diluted 243,831 244,482 244,920 247,757 Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share amounts) Revenues: Product revenues, net $ 130,875 $ 160,388 $ 302,511 $ 406,550 Royalty revenues 6,792 5,077 5,759 6,331 Collaborative revenues 842 611 1,546 5,054 Total revenues 138,509 166,076 309,816 417,935 Costs and expenses: Cost of product revenues 9,381 15,409 30,269 62,092 Royalty expenses 2,926 1,451 1,691 1,293 Research and development expenses (2) 215,599 223,858 246,284 310,181 Sales, general and administrative expenses 85,860 94,394 99,772 96,549 Restructuring (income) expenses (3,272 ) 2,128 1,826 1,524 Total costs and expenses 310,494 337,240 379,842 471,639 Loss from operations (171,985 ) (171,164 ) (70,026 ) (53,704 ) Interest expense, net (21,307 ) (21,111 ) (21,134 ) (20,654 ) Other (expense) income, net (5,113 ) 1,414 (1,326 ) (1,690 ) Loss before provision for (benefit from) income taxes (198,405 ) (190,861 ) (92,486 ) (76,048 ) Provision for (benefit from) income taxes 299 30,131 1,330 (1,379 ) Net loss (198,704 ) (220,992 ) (93,816 ) (74,669 ) Loss (income) attributable to noncontrolling interest 98 32,144 (1,333 ) 938 Net loss attributable to Vertex $ (198,606 ) $ (188,848 ) $ (95,149 ) $ (73,731 ) Amounts per share attributable to Vertex common shareholders: Net loss: Basic and diluted $ (0.83 ) $ (0.78 ) $ (0.39 ) $ (0.30 ) Shares used in per share calculations: Basic and diluted 239,493 240,757 241,969 242,987 1. In the second quarter of 2016, the Company incurred research and development expenses of approximately $10.0 million to acquire certain early-stage research assets. In the third quarter of 2016, the Company incurred research and development expenses related to a $20.0 million upfront payment to Moderna Therapeutics, Inc. See Note B, “Collaborative Arrangements,” for further information. 2. In the fourth quarter of 2015, the Company made a $75.0 million upfront payment to CRISPR Therapeutics in connection with the collaboration, which was recorded as a research and development expense. See Note B, “Collaborative Arrangements,” for further information. |
Nature of Business and Accoun49
Nature of Business and Accounting Policies - Business (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($)marketed_medecine$ / shares | Sep. 30, 2016USD ($)$ / shares | Jun. 30, 2016USD ($)$ / shares | Mar. 31, 2016USD ($)$ / shares | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)segmentmarketed_medecine$ / shares | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |||||||||||
Customer deposits | $ 73,416 | $ 0 | $ 73,416 | $ 0 | |||||||
Number of marketed medicines | marketed_medecine | 2 | 2 | |||||||||
Accounts receivable, net | $ 201,083 | 173,838 | $ 201,083 | 173,838 | |||||||
Net loss | $ 27,759 | $ (39,537) | $ (36,151) | $ (36,102) | $ (74,669) | $ (93,816) | $ (220,992) | $ (198,704) | $ (84,031) | $ (588,181) | $ (742,745) |
Basic EPS (usd per share) | $ / shares | $ 0.13 | $ (0.16) | $ (0.26) | $ (0.17) | $ (0.46) | $ (2.31) | $ (3.14) | ||||
Cash, cash equivalents and marketable securities | $ 1,430,000 | $ 1,430,000 | |||||||||
Number of operating segments | segment | 1 | ||||||||||
Advertising expense | $ 31,400 | $ 24,500 | $ 16,200 | ||||||||
Accumulated Deficit | |||||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||||||||||
Net loss | (112,052) | $ (556,334) | $ (738,555) | ||||||||
Greece, Italy, Portugal and Spain | |||||||||||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||||||||||
Accounts receivable, net | $ 0 | $ 0 |
Nature of Business and Accoun50
Nature of Business and Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Activity related to product revenues allowances and reserve categories | |||
Beginning Balance | $ 49,296 | $ 36,023 | $ 87,133 |
Provision related to current period sales | 163,922 | 81,205 | 48,006 |
Adjustments related to prior period sales | (104) | (20,852) | 3,270 |
Credits/payments made | (123,913) | (47,080) | (102,386) |
Ending Balance | 89,201 | 49,296 | 36,023 |
Trade Allowances | |||
Activity related to product revenues allowances and reserve categories | |||
Beginning Balance | 2,089 | 1,463 | 1,535 |
Provision related to current period sales | 20,075 | 10,890 | 8,468 |
Adjustments related to prior period sales | (90) | (214) | (43) |
Credits/payments made | (19,506) | (10,050) | (8,497) |
Ending Balance | 2,568 | 2,089 | 1,463 |
Rebates, Chargebacks and Discounts | |||
Activity related to product revenues allowances and reserve categories | |||
Beginning Balance | 44,669 | 29,102 | 68,244 |
Provision related to current period sales | 134,198 | 65,781 | 35,713 |
Adjustments related to prior period sales | 154 | (19,410) | 329 |
Credits/payments made | (97,094) | (30,804) | (75,184) |
Ending Balance | 81,927 | 44,669 | 29,102 |
Product Returns | |||
Activity related to product revenues allowances and reserve categories | |||
Beginning Balance | 1,228 | 4,713 | 15,799 |
Provision related to current period sales | 3,047 | 779 | 2,478 |
Adjustments related to prior period sales | (17) | (993) | 3,056 |
Credits/payments made | (766) | (3,271) | (16,620) |
Ending Balance | 3,492 | 1,228 | 4,713 |
Other Incentives | |||
Activity related to product revenues allowances and reserve categories | |||
Beginning Balance | 1,310 | 745 | 1,555 |
Provision related to current period sales | 6,602 | 3,755 | 1,347 |
Adjustments related to prior period sales | (151) | (235) | (72) |
Credits/payments made | (6,547) | (2,955) | (2,085) |
Ending Balance | $ 1,214 | $ 1,310 | $ 745 |
Nature of Business and Accoun51
Nature of Business and Accounting Policies - Share-Based Compensation and Advertising Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||
Accounts receivable, net | $ 201,083 | $ 173,838 |
Percentage of employees eligible for acceleration of equity awards (less than) (percent) | 5.00% | |
Tranche one | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Vesting rights percentage | 33.33% | |
Tranche two | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Vesting rights percentage | 33.33% | |
Tranche three | ||
Share-based Compensation Arrangement by Share-based Payment Award | ||
Vesting rights percentage | 33.33% |
Nature of Business and Accoun52
Nature of Business and Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2016 | |
Furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 10 years |
Furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 7 years |
Computers and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Computers and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 3 years |
Buildings and leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 40 years |
Nature of Business and Accoun53
Nature of Business and Accounting Policies - Foreign Currency Gain (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Foreign Currency Translation | |||
Net unrealized losses related to foreign currency translation | $ (7.9) | $ (2.1) | $ (1) |
Net foreign currency transaction gain (loss) | $ 4 | $ (6.8) | $ (6.4) |
Collaborative Arrangements - Cy
Collaborative Arrangements - Cystic Fibrosis Foundation Therapeutics Incorporated (Details) - USD ($) | Oct. 13, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Additional milestone payments | $ 0 | |||
Cystic Fibrosis Foundation Therapeutics Incorporated | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Milestone payments | $ 13,900,000 | $ 13,900,000 | ||
Collaborative funding | $ 75,000,000 | |||
Additional collaborative funding | $ 6,000,000 |
Collaborative Arrangements - CR
Collaborative Arrangements - CRISPR Therapeutics AG (Details) - CRISPR Therapeutics | Oct. 26, 2015USD ($)target | Oct. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Collaborative funding | $ 75,000,000 | $ 75,000,000 | ||
Investment in collaborative partner, pursuant to convertible loan agreement | $ 30,000,000 | $ 10,000,000 | $ 3,100,000 | |
Right to license, number of targets (up to) | target | 6 | |||
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 |
Collaborative Arrangements - Pa
Collaborative Arrangements - Parion Sciences, Inc. (Details) - USD ($) | Jun. 04, 2015 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Jun. 30, 2015 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Indefinite-lived Intangible Assets Acquired | $ 255,300,000 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | ||||||
Intangible assets | $ (284,340,000) | $ (284,340,000) | ||||
Goodwill | 50,384,000 | $ 50,384,000 | ||||
Parion Sciences, Inc | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Milestone payments | $ 5,000,000 | |||||
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) | 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 Combination, Consideration VIE | $ 255,340,000 | |||||
Milestones discount rate, low end of the range | 4.10% | |||||
Milestones discount rate, high end of the range | 5.90% | |||||
Commercial milestones and royalties discount rate | 6.60% | |||||
Consideration paid: | ||||||
Up-front payment | $ 80,000,000 | |||||
Fair value of contingent payments | 175,340,000 | |||||
Total consideration paid | 0 | |||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | ||||||
Consideration transferred | 0 | |||||
Noncontrolling interest | 164,317,000 | |||||
Intangible assets | $ (255,340,000) | |||||
Net other liabilities | 10,468,000 | |||||
Deferred tax liability | 91,023,000 | |||||
Goodwill | 10,468,000 | |||||
Parion Sciences, Inc | Enac Inhibitors in Cf | ||||||
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 | 360,000,000 | |||||
Parion Sciences, Inc | Enac Inhibitors in Non Cf | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Collaborative arrangement development and regulatory potential milestone payments maximum | 370,000,000 | |||||
Parion Sciences, Inc | Additional Enac Inhibitors | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Collaborative arrangement development and regulatory potential milestone payments maximum | $ 230,000,000 | |||||
Cystic Fibrosis Foundation Therapeutics Incorporated | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Milestone payments | $ 13,900,000 | $ 13,900,000 |
Collaborative Arrangements - Bi
Collaborative Arrangements - BioAxone Biosciences, Inc. (Details) - BioAxone Biosciences, Inc - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Decrease (increase) in fair value of contingent payments | $ 10,000,000 | $ (900,000) | $ (500,000) | ||
Up-front payment | $ 10,000,000 | ||||
Maximum license fees and milestone payments | $ 90,000,000 | ||||
In-process research and development intangible assets | 29,000,000 | ||||
Deferred tax liability attributable to BioAxone | $ 11,300,000 | ||||
Purchase option, term of extension of expiration date | 1 year | ||||
Contingent consideration liability | $ 18,000,000 | $ 28,000,000 |
Collaborative Arrangements - Ja
Collaborative Arrangements - Janssen Pharmaceuticals, Inc. (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Royalty revenues | $ 3,887 | $ 3,835 | $ 5,282 | $ 3,596 | $ 6,331 | $ 5,759 | $ 5,077 | $ 6,792 | $ 16,600 | $ 23,959 | $ 40,919 |
Collaborative revenues | 937 | 259 | 675 | 74 | 5,054 | 1,546 | 611 | 842 | 1,945 | 8,053 | 51,675 |
Revenues | $ 458,706 | $ 413,783 | $ 431,608 | $ 398,080 | $ 417,935 | $ 309,816 | $ 166,076 | $ 138,509 | 1,702,177 | 1,032,336 | 580,415 |
Janssen | |||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||
Royalty revenues | 71 | 1,518 | 13,481 | ||||||||
Up-front payment | 35,000 | ||||||||||
Reimbursement for research and development activities | $ 14,700 | 22,800 | 9,100 | ||||||||
Time period of notice required to terminate | 6 months | ||||||||||
Collaborative revenues | $ (155) | 1,946 | 7,104 | ||||||||
Revenue, Net | $ (84) | $ 3,464 | $ 20,585 |
Collaborative Arrangements - Mo
Collaborative Arrangements - Moderna Therapeutics, Inc. (Details) - Moderna Therapeutics, Inc. - USD ($) | 1 Months Ended | 3 Months Ended |
Jul. 31, 2016 | Sep. 30, 2016 | |
Schedule of Collaborative Arrangement Agreements [Line Items] | ||
Up-front payment | $ 20,000,000 | |
Investment in collaborative partner, pursuant to convertible loan agreement | $ 20,000,000 | |
Collaborative arrangement development and regulatory potential milestone payments maximum | $ 275,000,000 | |
Collaborative arrangement approval and reimbursement milestones | $ 220,000,000 |
Collaborative Arrangements - Ag
Collaborative Arrangements - Aggregate VIE Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Jun. 04, 2015 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | ||||||||||||
Loss attributable to noncontrolling interest before provision for income taxes | $ (28,021) | $ 31,847 | $ 4,190 | |||||||||
Provision for income taxes | $ (7,453) | $ 503 | $ 18,130 | $ 5,485 | $ (1,379) | $ 1,330 | $ 30,131 | $ 299 | 16,665 | 30,381 | 6,958 | |
Net (income) loss attributable to noncontrolling interest | 5,186 | $ 696 | $ (28,374) | $ (5,529) | ||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net: | ||||||||||||
Restricted cash and cash equivalents (VIE) | 47,762 | 78,910 | 47,762 | 78,910 | ||||||||
Prepaid expenses and other current assets | 70,534 | 54,736 | 70,534 | 54,736 | ||||||||
Intangible assets | 284,340 | 284,340 | 284,340 | 284,340 | ||||||||
Goodwill | 50,384 | 50,384 | 50,384 | 50,384 | ||||||||
Other assets | 11,833 | 6,912 | 11,833 | 6,912 | ||||||||
Accounts payable | 61,451 | 74,942 | 61,451 | 74,942 | ||||||||
Other current liabilities | 315,249 | 305,820 | 315,249 | 305,820 | ||||||||
Deferred tax liability | 134,063 | 110,439 | 134,063 | 110,439 | ||||||||
Other liabilities | 102,122 | 31,778 | 102,122 | 31,778 | ||||||||
Noncontrolling interest | 181,609 | 153,661 | 181,609 | 153,661 | ||||||||
BioAxone Biosciences, Inc | ||||||||||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | ||||||||||||
Decrease (increase) in fair value of contingent payments | 10,000 | (900) | (500) | |||||||||
Contingent consideration liability | 18,000 | 28,000 | 18,000 | 28,000 | ||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net: | ||||||||||||
Deferred tax liability | 134,000 | 110,400 | 134,000 | 110,400 | ||||||||
Parion Sciences, Inc | ||||||||||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | ||||||||||||
Decrease (increase) in fair value of contingent payments | (64,800) | (3,600) | ||||||||||
Contingent consideration liability | 238,800 | 179,000 | 238,800 | 179,000 | ||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net: | ||||||||||||
Intangible assets | 255,340 | |||||||||||
Goodwill | $ 10,468 | |||||||||||
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 | 10,086 | 6,646 | 764 | |||||||||
Provision for income taxes | 16,743 | 29,731 | 3,876 | |||||||||
Decrease (increase) in fair value of contingent payments | (54,850) | (4,530) | (450) | |||||||||
Net (income) loss attributable to noncontrolling interest | (28,021) | 31,847 | $ 4,190 | |||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net: | ||||||||||||
Restricted cash and cash equivalents (VIE) | 47,762 | 78,910 | 47,762 | 78,910 | ||||||||
Prepaid expenses and other current assets | 6,812 | 3,138 | 6,812 | 3,138 | ||||||||
Intangible assets | 284,340 | 284,340 | 284,340 | 284,340 | ||||||||
Goodwill | 19,391 | 19,391 | 19,391 | 19,391 | ||||||||
Other assets | 399 | 455 | 399 | 455 | ||||||||
Accounts payable | 415 | 676 | 415 | 676 | ||||||||
Taxes payable | 1,330 | 24,554 | 1,330 | 24,554 | ||||||||
Other current liabilities | 2,137 | 7,100 | 2,137 | 7,100 | ||||||||
Deferred tax liability | 131,446 | 110,438 | 131,446 | 110,438 | ||||||||
Other liabilities | 300 | 300 | 300 | 300 | ||||||||
Noncontrolling interest | $ 181,609 | $ 153,661 | $ 181,609 | $ 153,661 | ||||||||
Variable Interest Entity, Primary Beneficiary | Parion Sciences, Inc | ||||||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net: | ||||||||||||
Intangible assets | $ 255,300 |
Collaborative Arrangements - Me
Collaborative Arrangements - Merck KGaA (Details) - Subsequent Event - Merck KGaA | Jan. 10, 2017USD ($)pre-clinical_stage_programclinical-stage_programdevelopment_program |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Right to license, number of development programs | development_program | 4 |
Right to license, number of clinical stage programs | clinical-stage_program | 2 |
Number of pre-clinical stage programs | pre-clinical_stage_program | 2 |
Up-front payment | $ | $ 230,000,000 |
Time period of notice required to terminate | 90 days |
Time period of notice required to terminate after product has received marketing approval | 180 days |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 12,642 | 11,145 | 12,003 |
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) | 3,546 | 3,024 | 3,091 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Financial instruments carried at fair value (asset position): | ||
Fair value of the term loan | $ 300,000 | |
Level 1 | Variable Interest Entity, Primary Beneficiary | BioAxone Biosciences, Inc | ||
Financial instruments carried at fair value (asset position): | ||
Cash and cash equivalents | 46,100 | |
Level 3 | ||
Financial instruments carried at fair value (asset position): | ||
Loans payable, fair value disclosure | 300,000 | |
Recurring basis | ||
Financial instruments carried at fair value (asset position): | ||
Total financial assets | 546,765 | $ 665,383 |
Total financial liabilities | 144 | 901 |
Recurring basis | Money market funds | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 280,560 | 199,507 |
Recurring basis | Government-sponsored enterprise securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 85,994 | |
Marketable securities: | 15,508 | 87,162 |
Recurring basis | Corporate equity securities | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities: | 64,560 | |
Recurring basis | Commercial paper | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 34,889 | |
Marketable securities: | 59,404 | 99,123 |
Recurring basis | Corporate debt securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 11,533 | |
Marketable securities: | 111,140 | 141,409 |
Recurring basis | Prepaid and other current assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Prepaid and other current assets: | 14,407 | 5,161 |
Recurring basis | Other assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other assets: | 1,186 | 605 |
Recurring basis | Other liabilities, current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other liabilities, current portion: | (144) | (769) |
Recurring basis | Other liabilities, excluding current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other liabilities, excluding current portion: | (132) | |
Recurring basis | Level 1 | ||
Financial instruments carried at fair value (asset position): | ||
Total financial assets | 360,628 | 372,663 |
Total financial liabilities | 0 | 0 |
Recurring basis | Level 1 | Money market funds | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 280,560 | 199,507 |
Recurring basis | Level 1 | Government-sponsored enterprise securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 85,994 | |
Marketable securities: | 15,508 | 87,162 |
Recurring basis | Level 1 | Corporate equity securities | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities: | 64,560 | |
Recurring basis | Level 1 | Commercial paper | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 0 | |
Marketable securities: | 0 | 0 |
Recurring basis | Level 1 | Corporate debt securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 0 | |
Marketable securities: | 0 | 0 |
Recurring basis | Level 1 | Prepaid and other current assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Prepaid and other current assets: | 0 | 0 |
Recurring basis | Level 1 | Other assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other assets: | 0 | 0 |
Recurring basis | Level 1 | Other liabilities, current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other liabilities, current portion: | 0 | 0 |
Recurring basis | Level 1 | Other liabilities, excluding current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other liabilities, excluding current portion: | 0 | |
Recurring basis | Level 2 | ||
Financial instruments carried at fair value (asset position): | ||
Total financial assets | 186,137 | 292,720 |
Total financial liabilities | 144 | 901 |
Recurring basis | Level 2 | Money market funds | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 0 | 0 |
Recurring basis | Level 2 | Government-sponsored enterprise securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 0 | |
Marketable securities: | 0 | 0 |
Recurring basis | Level 2 | Corporate equity securities | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities: | 0 | |
Recurring basis | Level 2 | Commercial paper | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 34,889 | |
Marketable securities: | 59,404 | 99,123 |
Recurring basis | Level 2 | Corporate debt securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 11,533 | |
Marketable securities: | 111,140 | 141,409 |
Recurring basis | Level 2 | Prepaid and other current assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Prepaid and other current assets: | 14,407 | 5,161 |
Recurring basis | Level 2 | Other assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other assets: | 1,186 | 605 |
Recurring basis | Level 2 | Other liabilities, current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other liabilities, current portion: | (144) | (769) |
Recurring basis | Level 2 | Other liabilities, excluding current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other liabilities, excluding current portion: | (132) | |
Recurring basis | Level 3 | ||
Financial instruments carried at fair value (asset position): | ||
Total financial assets | 0 | 0 |
Total financial liabilities | 0 | 0 |
Recurring basis | Level 3 | Money market funds | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 0 | 0 |
Recurring basis | Level 3 | Government-sponsored enterprise securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 0 | |
Marketable securities: | 0 | 0 |
Recurring basis | Level 3 | Corporate equity securities | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities: | 0 | |
Recurring basis | Level 3 | Commercial paper | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 0 | |
Marketable securities: | 0 | 0 |
Recurring basis | Level 3 | Corporate debt securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents: | 0 | |
Marketable securities: | 0 | 0 |
Recurring basis | Level 3 | Prepaid and other current assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Prepaid and other current assets: | 0 | 0 |
Recurring basis | Level 3 | Other assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other assets: | 0 | 0 |
Recurring basis | Level 3 | Other liabilities, current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other liabilities, current portion: | $ 0 | 0 |
Recurring basis | Level 3 | Other liabilities, excluding current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other liabilities, excluding current portion: | $ 0 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | $ 1,413,220,000 | $ 1,042,336,000 | |
Gross Unrealized Gains | 21,422,000 | 246,000 | |
Gross Unrealized Losses | (85,000) | (120,000) | |
Fair Value | 1,434,557,000 | 1,042,462,000 | |
Other than temporary impairment losses | 0 | 0 | $ 0 |
Realized gains or losses | 0 | 0 | $ 0 |
Total cash and cash equivalents | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 1,183,945,000 | 714,768,000 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 1,183,945,000 | 714,768,000 | |
Cash and money market funds | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 1,183,945,000 | 582,352,000 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 1,183,945,000 | 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 | 229,275,000 | 327,568,000 | |
Gross Unrealized Gains | 21,422,000 | 246,000 | |
Gross Unrealized Losses | (85,000) | (120,000) | |
Fair Value | 250,612,000 | 327,694,000 | |
Government-sponsored enterprise securities (matures within 1 year) | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 15,506,000 | 87,176,000 | |
Gross Unrealized Gains | 2,000 | 0 | |
Gross Unrealized Losses | 0 | (14,000) | |
Fair Value | 15,508,000 | 87,162,000 | |
Corporate equity securities (matures within 1 year) | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 43,213,000 | ||
Gross Unrealized Gains | 21,347,000 | ||
Gross Unrealized Losses | 0 | ||
Fair Value | 64,560,000 | ||
Commercial paper (matures within 1 year) | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 59,331,000 | 98,877,000 | |
Gross Unrealized Gains | 73,000 | 246,000 | |
Gross Unrealized Losses | 0 | 0 | |
Fair Value | 59,404,000 | 99,123,000 | |
Corporate debt securities (matures within 1 year) | |||
Summary of cash, cash equivalents and marketable securities | |||
Amortized Cost | 111,225,000 | 141,515,000 | |
Gross Unrealized Gains | 0 | 0 | |
Gross Unrealized Losses | (85,000) | (106,000) | |
Fair Value | $ 111,140,000 | $ 141,409,000 |
Accumulated Other Comprehensi65
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance | $ 1,093,628 | $ 1,096,183 | $ 1,356,405 |
Total changes in other comprehensive income (loss) | 19,349 | 907 | 1,223 |
Balance | 1,338,191 | 1,093,628 | 1,096,183 |
Foreign currency translation adjustment | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance | (2,080) | (971) | (325) |
Other comprehensive (loss) income before reclassifications | (5,782) | (1,109) | (646) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 |
Total changes in other comprehensive income (loss) | (5,782) | (1,109) | (646) |
Balance | (7,862) | (2,080) | (971) |
Unrealized holding gains (losses) on marketable securities, net of tax | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance | 126 | (123) | 42 |
Other comprehensive (loss) income before reclassifications | 17,395 | 249 | (165) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 |
Total changes in other comprehensive income (loss) | 17,395 | 249 | (165) |
Balance | 17,521 | 126 | (123) |
Unrealized (losses) gains on foreign currency forward contracts, net of tax | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance | 3,778 | 2,011 | (23) |
Other comprehensive (loss) income before reclassifications | 17,383 | 6,493 | 3,591 |
Amounts reclassified from accumulated other comprehensive loss | (9,647) | (4,726) | (1,557) |
Total changes in other comprehensive income (loss) | 7,736 | 1,767 | 2,034 |
Balance | 11,514 | 3,778 | 2,011 |
AOCI Attributable to Parent | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance | 1,824 | 917 | (306) |
Other comprehensive (loss) income before reclassifications | 28,996 | 5,633 | 2,780 |
Amounts reclassified from accumulated other comprehensive loss | (9,647) | (4,726) | (1,557) |
Total changes in other comprehensive income (loss) | 19,349 | 907 | 1,223 |
Balance | $ 21,173 | $ 1,824 | $ 917 |
Hedging - Notional Amount (Deta
Hedging - Notional Amount (Details) - Cash Flow Hedging - Foreign currency forward contracts - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | $ 253,381 | $ 209,285 |
Designated as Hedging Instrument | Euro | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | 164,368 | 103,362 |
Designated as Hedging Instrument | British pound sterling | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | 65,237 | 78,756 |
Designated as Hedging Instrument | Australian dollar | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | $ 23,776 | $ 27,167 |
Minimum | ||
Derivative [Line Items] | ||
Derivative term | 1 month | |
Maximum | ||
Derivative [Line Items] | ||
Derivative term | 18 months |
Hedging - Derivative Fair Value
Hedging - Derivative Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Total assets | $ 5,766 | |
Total liabilities | (901) | |
Foreign currency forward contracts | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Total assets | $ 15,593 | 5,766 |
Total liabilities | (144) | (901) |
Prepaid and other current assets | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Fair value - assets | 14,407 | 5,161 |
Other liabilities, current portion | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Fair value - liabilities | (144) | (769) |
Other assets | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Fair value - assets | 1,186 | 605 |
Other liabilities, excluding current portion | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Fair value - liabilities | $ 0 | $ (132) |
Hedging - Offsetting Derivative
Hedging - Offsetting Derivatives (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Offsetting Derivative Assets [Abstract] | ||
Gross Amounts Recognized | $ 5,766 | |
Offsetting Derivative Liabilities [Abstract] | ||
Gross Amounts Recognized | (901) | |
Foreign currency forward contracts | ||
Offsetting Derivative Assets [Abstract] | ||
Gross Amounts Recognized | $ 15,593 | 5,766 |
Gross Amounts Offset | 0 | 0 |
Gross Amount Presented | 15,593 | 5,766 |
Gross Amount Not Offset | (144) | (901) |
Legal Offset | 15,449 | 4,865 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross Amounts Recognized | (144) | (901) |
Gross Amounts Offset | 0 | 0 |
Gross Amount Presented | (144) | (901) |
Gross Amount Not Offset | 144 | 901 |
Legal Offset | $ 0 | $ 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 6,348 | $ 8,696 |
Work-in-process | 56,672 | 40,695 |
Finished goods | 14,584 | 7,816 |
Total | $ 77,604 | $ 57,207 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | $ 1,086,160 | $ 1,033,782 | |
Less: accumulated depreciation | (387,798) | (336,067) | |
Total property and equipment, net | 698,362 | 697,715 | |
Capital leased assets, gross | 101,300 | 106,800 | |
Capital leases accumulated depreciation | 37,900 | 30,400 | |
Depreciation and amortization expense | 60,800 | 60,000 | $ 62,300 |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 548,232 | 531,627 | |
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 236,634 | 218,623 | |
Software | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 134,321 | 124,469 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 108,702 | 106,768 | |
Computers | |||
Property, Plant and Equipment [Line Items] | |||
Total property and equipment, gross | 58,271 | 52,295 | |
Internal Use Software | |||
Property, Plant and Equipment [Line Items] | |||
Less: accumulated depreciation | (9,200) | (4,100) | |
Total property and equipment, net | $ 17,800 | $ 15,400 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | 1 Months Ended | ||||
Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 04, 2015 | Oct. 31, 2014 | |
Indefinite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 284,340 | $ 284,340 | |||
Goodwill | 50,384 | 50,384 | |||
BioAxone Biosciences, Inc | |||||
Indefinite-Lived Intangible Assets [Line Items] | |||||
In-process research and development intangible assets | $ 29,000 | ||||
Parion Sciences, Inc | |||||
Indefinite-Lived Intangible Assets [Line Items] | |||||
Intangible assets | $ 255,340 | ||||
Goodwill | $ 10,468 | ||||
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 | Parion Sciences, Inc | |||||
Indefinite-Lived Intangible Assets [Line Items] | |||||
In-process research and development intangible assets | $ 284,300 | $ 284,300 | |||
Intangible assets | $ 255,300 | ||||
Indefinite-lived Intangible Assets | Variable Interest Entity, Primary Beneficiary | Parion Sciences, Inc | |||||
Indefinite-Lived Intangible Assets [Line Items] | |||||
Discount rate used to estimate fair value (percent) | 7.10% |
Additional Balance Sheet Deta72
Additional Balance Sheet Detail (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Prepaid and other current assets | ||
Prepaid expenses | $ 36,134 | $ 22,058 |
Fair value foreign currency forward contracts | 14,407 | 5,161 |
Taxes receivable | 3,213 | 14,682 |
Other | 16,780 | 12,835 |
Total | 70,534 | 54,736 |
Accrued expenses | ||
Payroll and benefits | 86,387 | 87,873 |
Research, development and commercial contract costs | 62,756 | 55,677 |
Product revenue allowances | 86,533 | 47,209 |
Royalty payable | 52,845 | 60,191 |
Taxes payable and reserves (including VIE taxes payable) | 6,883 | 30,953 |
Professional fees | 6,512 | 7,455 |
Interest | 1,390 | 4,642 |
Other | 11,943 | 11,820 |
Total | 315,249 | 305,820 |
Other liabilities, current portion | ||
Advance from CFFT | 73,423 | 0 |
Deferred rent | 19,551 | 22,235 |
Other Sundry Liabilities, Noncurrent | 9,148 | 9,543 |
Total non-current liabilities | $ 102,122 | $ 31,778 |
Long Term Obligations (Fan Pier
Long Term Obligations (Fan Pier Leases) (Details) $ in Thousands, ft² in Millions | 12 Months Ended | |||
Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Dec. 31, 2011ft²leasebuilding | |
Depreciation expense | $ 60,800 | $ 60,000 | $ 62,300 | |
Rental expense | 19,100 | 18,100 | 38,900 | |
Property and equipment, net | 698,362 | 697,715 | ||
Construction financing lease obligation, current and noncurrent | 472,600 | 473,000 | ||
Fan Pier Leases | ||||
Number of leases | lease | 2 | |||
Area of real estate property (in square feet) | ft² | 1.1 | |||
Lease agreements number of buildings | building | 2 | |||
Optional term of lease agreement (in years) | 10 years | |||
Buildings | Fan Pier Leases | ||||
Interest expense | 60,200 | 60,200 | 60,200 | |
Depreciation expense | 13,300 | 13,300 | 13,400 | |
Rental expense | 6,500 | 6,500 | $ 6,500 | |
Construction-in-process | ||||
Property and equipment, net | $ 489,000 | $ 502,300 |
Long Term Obligations (San Dieg
Long Term Obligations (San Diego Lease) (Details) - San Diego Lease ft² in Thousands, $ in Millions | Dec. 02, 2015USD ($)ft²term |
Area of real estate property (in square feet) | ft² | 170 |
Length of lease | 16 years |
Average yearly aggregate rent | $ | $ 10.2 |
Amount of optional renewal terms | term | 2 |
Optional renewal term length | 5 years |
Long Term Obligations - Revolvi
Long Term Obligations - Revolving Credit Facility (Details) | Oct. 13, 2016 | Feb. 23, 2017USD ($) | Feb. 16, 2017USD ($) | Oct. 31, 2016USD ($) |
Line of Credit Facility [Line Items] | ||||
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, consolidated leverage ratio | 3 | |||
Debt covenant, minimum consolidated EBITDA | $ 200,000,000 | |||
Line of Credit | Minimum | Base Rate | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate (percent) | 0.75% | |||
Line of Credit | Minimum | Eurodollar | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate (percent) | 1.75% | |||
Line of Credit | Maximum | Base Rate | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate (percent) | 1.50% | |||
Line of Credit | Maximum | Eurodollar | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate (percent) | 2.50% | |||
Subsequent Event | ||||
Line of Credit Facility [Line Items] | ||||
Repayments of lines of credit | $ 300,000,000 | |||
Line of of credit facility, fair value of amount outstanding | $ 300,000,000 |
Long Term Obligations (Term Loa
Long Term Obligations (Term Loan) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2016 | Oct. 31, 2016 | Dec. 31, 2015 | Jul. 09, 2014 | |
Senior Secured Term Loan | |||||
Debt Instrument [Line Items] | |||||
Face amount of term loan | $ 300,000,000 | ||||
Gains (losses) on extinguishment of debt | $ 2,200,000 | ||||
Interest rate (percent) | 6.20% | 6.20% | 7.20% | ||
Unamortized discount on term loan | $ 0 | $ 0 | $ 4,600,000 | $ 5,300,000 | |
Minimum | Senior Secured Term Loan | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Basis spread on variable rate (percent) | 5.00% | ||||
Line of Credit | Minimum | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Interest rate (percent) | 0.75% | ||||
Line of Credit | Minimum | Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Interest rate (percent) | 1.75% | ||||
Line of Credit | Maximum | Base Rate | |||||
Debt Instrument [Line Items] | |||||
Interest rate (percent) | 1.50% | ||||
Line of Credit | Maximum | Eurodollar | |||||
Debt Instrument [Line Items] | |||||
Interest rate (percent) | 2.50% |
Long Term Obligations (Converti
Long Term Obligations (Convertible Senior Subordinated Notes) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Convertible Senior Subordinated Notes | |||
Depreciation expense | $ 60.8 | $ 60 | $ 62.3 |
Rental expense | 19.1 | 18.1 | 38.9 |
Buildings | Fan Pier Leases | |||
Convertible Senior Subordinated Notes | |||
Interest expense | 60.2 | 60.2 | 60.2 |
Depreciation expense | 13.3 | 13.3 | 13.4 |
Rental expense | $ 6.5 | $ 6.5 | $ 6.5 |
Common Stock, Preferred Stock78
Common Stock, Preferred Stock and Equity Plans (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2016USD ($)vote$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)shares | Dec. 30, 2016$ / shares | Jul. 31, 2016$ / shares | Jun. 30, 2016$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Common stock, shares authorized (shares) | 500,000,000 | 500,000,000 | ||||
Common stock, votes per share (votes per share) | vote | 1 | |||||
Preferred stock, shares authorized (shares) | 1,000,000 | 1,000,000 | ||||
Preferred stock, shares issued (shares) | 0 | 0 | ||||
Awards outstanding (shares) | 16,187,626 | |||||
Additional awards authorized for grant (shares) | 9,180,002 | |||||
Grant price of outstanding restricted stock and restricted stock units (usd per share) | $ / shares | $ 10 | |||||
Stock Options | ||||||
Stock options outstanding at beginning of period (in shares) | 11,145,000 | |||||
Stock options granted (in shares) | 3,183,000 | |||||
Stock options exercised (in shares) | (1,064,000) | |||||
Stock options forfeited (in shares) | (544,000) | |||||
Stock options expired (in shares) | (78,000) | |||||
Stock options outstanding at end of period (in shares) | 12,642,000 | 11,145,000 | ||||
Stock options exercisable at end of period (in shares) | 7,323,000 | |||||
Total exercisable or expected to vest, stock options (in shares) | 12,200,000 | |||||
Weighted-average Exercise Price | ||||||
Weighted-average exercise price outstanding at beginning of period (usd per share) | $ / shares | $ 75.99 | |||||
Weighted average exercise price, granted (usd per share) | $ / shares | 91.36 | |||||
Weighted average exercise price, exercised (usd per share) | $ / shares | 45.61 | |||||
Weighted average exercise price, forfeited (usd per share) | $ / shares | 94.62 | |||||
Weighted average exercise price, expired (usd per share) | $ / shares | 107.51 | |||||
Weighted-average exercise price outstanding at end of period (usd per share) | $ / shares | 81.41 | $ 75.99 | ||||
Weighted average exercise price exercisable at the end of the period (usd per share) | $ / shares | 68.92 | |||||
Total exercisable or expected to vest, weighted average exercise price (usd per share) | $ / shares | $ 80.76 | |||||
Weighted-average Remaining Contractual Life | ||||||
Weighted-average Remaining Contractual Life, outstanding (in years) | 7 years 22 days | |||||
Weighted-average Remaining Contractual Life, exercisable (in years) | 6 years | |||||
Weighted-average Remaining Contractual Life, total exercisable or expected to vest (in years) | 7 years | |||||
Aggregate Intrinsic Value | ||||||
Aggregate intrinsic value, outstanding | $ | $ 124,939 | |||||
Aggregate intrinsic value, exercisable | $ | 121,671 | |||||
Aggregate intrinsic value, total exercisable or expected to vest | $ | 124,892 | |||||
Total Intrinsic Value and Cash Received | ||||||
Total intrinsic value of stock options exercised | $ | 48,600 | $ 252,900 | $ 316,500 | |||
Total cash received from employees as a result of employee stock option exercises | $ | $ 48,500 | $ 165,600 | $ 255,500 | |||
Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Expiration period (years) | 10 years | |||||
Weighted Average | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Share price (in dollars per share) | $ / shares | $ 74.11 | |||||
2013 Stock and Option Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Awards outstanding (shares) | 9,832,269 | |||||
Additional awards authorized for grant (shares) | 9,180,002 | |||||
Additional shares authorized (shares) | 7,800,000 | 9,500,000 | ||||
2006 Stock and Option Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Awards outstanding (shares) | 6,355,357 | |||||
Additional awards authorized for grant (shares) | 0 | |||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||||
Grant price of outstanding restricted stock and restricted stock units (usd per share) | $ / shares | $ 0 | $ 0.01 |
Common Stock, Preferred Stock79
Common Stock, Preferred Stock and Equity Plans (Details 2) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016USD ($)period$ / sharesshares | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($) | |
Stock options outstanding and exercisable | |||
Exercise price range, options outstanding (in shares) | shares | 12,642,000 | ||
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 7 years 22 days | ||
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 81.41 | ||
Exercise price range, options exercisable (in shares) | shares | 7,323,000 | ||
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, restricted stock units vested and expected to vest (usd per share) | $ 68.92 | ||
$18.93–$20.00 | |||
Stock options outstanding and exercisable | |||
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 | 137,000 | ||
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 1 year 1 month 6 days | ||
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 18.93 | ||
Exercise price range, options exercisable (in shares) | shares | 137,000 | ||
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, restricted stock units vested and expected to vest (usd per share) | $ 18.93 | ||
$20.01–$40.00 | |||
Stock options outstanding and exercisable | |||
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 | 1,696,000 | ||
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 3 years 2 months 9 days | ||
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 33.94 | ||
Exercise price range, options exercisable (in shares) | shares | 1,696,000 | ||
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, restricted stock units vested and expected to vest (usd per share) | $ 33.94 | ||
$40.01–$60.00 | |||
Stock options outstanding and exercisable | |||
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 | 1,867,000 | ||
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 5 years 7 months 2 days | ||
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 48.26 | ||
Exercise price range, options exercisable (in shares) | shares | 1,762,000 | ||
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, restricted stock units vested and expected to vest (usd per share) | $ 48.44 | ||
$60.01–$80.00 | |||
Stock options outstanding and exercisable | |||
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 | 1,345,000 | ||
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 7 years 1 month 10 days | ||
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 75.90 | ||
Exercise price range, options exercisable (in shares) | shares | 891,000 | ||
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, restricted stock units vested and expected to vest (usd per share) | $ 75.60 | ||
$80.01–$100.00 | |||
Stock options outstanding and exercisable | |||
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 | 4,529,000 | ||
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 8 years 5 months 12 days | ||
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 90.60 | ||
Exercise price range, options exercisable (in shares) | shares | 1,548,000 | ||
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, restricted stock units vested and expected to vest (usd per share) | $ 89.61 | ||
$100.01–$120.00 | |||
Stock options outstanding and exercisable | |||
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 | 1,604,000 | ||
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 8 years 18 days | ||
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 109.33 | ||
Exercise price range, options exercisable (in shares) | shares | 702,000 | ||
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, restricted stock units vested and expected to vest (usd per share) | $ 109.29 | ||
$120.01–$134.69 | |||
Stock options outstanding and exercisable | |||
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 | 1,464,000 | ||
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 8 years 6 months 11 days | ||
Exercise price range, options outstanding, weighted-average exercise price (usd per share) | $ 130.58 | ||
Exercise price range, options exercisable (in shares) | shares | 587,000 | ||
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, restricted stock units vested and expected to vest (usd per share) | $ 130.17 | ||
Restricted Stock | |||
Restricted stock and Restricted Stock Units | |||
Beginning of the period (in shares) | shares | 2,831,000 | ||
Granted (in shares) | shares | 857,000 | ||
Vested (in shares) | shares | (817,000) | ||
Cancelled (in shares) | shares | (258,000) | ||
End of the period (in shares) | shares | 2,613,000 | 2,831,000 | |
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, as of the beginning of the period (usd per share) | $ 98.80 | ||
Weighted-average grant-date fair value, granted (usd per share) | 91.49 | ||
Weighted-average grant-date fair value, vested (usd per share) | 79.28 | ||
Weighted-average grant-date fair value, cancelled (usd per share) | 98.56 | ||
Weighted-average grant-date fair value, as of the end of the period (usd per share) | $ 102.54 | $ 98.80 | |
Restricted stock vested in period, total fair value | $ | $ 74.1 | $ 124 | $ 54.5 |
Restricted Stock Units | |||
Restricted stock and Restricted Stock Units | |||
Beginning of the period (in shares) | shares | 193,000 | ||
Granted (in shares) | shares | 847,000 | ||
Vested (in shares) | shares | (59,000) | ||
Cancelled (in shares) | shares | (48,000) | ||
End of the period (in shares) | shares | 933,000 | 193,000 | |
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, as of the beginning of the period (usd per share) | $ 98.36 | ||
Weighted-average grant-date fair value, granted (usd per share) | 90.46 | ||
Weighted-average grant-date fair value, vested (usd per share) | 83.13 | ||
Weighted-average grant-date fair value, cancelled (usd per share) | 94.54 | ||
Weighted-average grant-date fair value, as of the end of the period (usd per share) | $ 92.35 | $ 98.36 | |
Restricted stock vested in period, total fair value | $ | $ 5.3 | $ 8 | $ 2.9 |
Employee Stock Purchase Plan | |||
Employee Stock Purchase Plan | |||
Offering period (in months) | 12 months | ||
Number of purchase periods | period | 2 | ||
Duration of purchase period | 6 months | ||
Eligible employee purchase price percentage of fair value | 85.00% | ||
Number of shares authorized (shares) | shares | 891,353 | ||
Number of shares (shares) | shares | 272,000 | ||
Average price paid per share (usd per share) | $ 70.70 |
Stock-based Compensation Expe80
Stock-based Compensation Expense (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-based compensation expense: | |||
Stock-based compensation expense | $ 237,705,000 | $ 231,025,000 | $ 177,542,000 |
Less: stock-based compensation expense capitalized to inventories | (3,607,000) | (4,087,000) | (1,423,000) |
Allocated stock-based compensation expense | 237,705,000 | $ 231,025,000 | $ 177,542,000 |
Stock Options | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Expected annual dividends | $ 0 | ||
Employee stock purchase plan | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Weighted average fair value (usd per share) | $ 26.86 | $ 37.84 | $ 29.59 |
Expected stock price volatility (percent) | 48.22% | 47.20% | 60.32% |
Risk-free interest rate (percent) | 0.56% | 0.40% | 0.09% |
Expected term of options (in years) | 9 months | 8 months 20 days | 9 months |
Expected annual dividends | $ 0 | $ 0 | $ 0 |
Stock options | |||
Stock-based compensation expense: | |||
Stock-based compensation expense | 114,768,000 | $ 129,276,000 | $ 99,961,000 |
Type of award: | |||
Unrecognized Expense Net of Estimated Forfeitures | $ 157,819,000 | ||
Weighted-average Recognition Period (in years) | 2 years 6 months | ||
Weighted-average grant-date fair value, granted (in dollars per share) | $ 37.93 | $ 52.16 | $ 39.95 |
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Expected stock price volatility (percent) | 46.77% | 47.29% | 50.86% |
Risk-free interest rate (percent) | 1.32% | 1.61% | 1.77% |
Expected term of options (in years) | 4 years 10 months 28 days | 5 years 3 months 11 days | 5 years 5 months 19 days |
Expected annual dividends | $ 0 | $ 0 | $ 0 |
Employee Restricted Stock Option | |||
Stock-based compensation expense: | |||
Stock-based compensation expense | 118,709,000 | 98,811,000 | 70,678,000 |
Type of award: | |||
Unrecognized Expense Net of Estimated Forfeitures | $ 176,972,000 | ||
Weighted-average Recognition Period (in years) | 2 years 4 months 21 days | ||
Employee Stock Purchase Plan | |||
Stock-based compensation expense: | |||
Stock-based compensation expense | $ 7,835,000 | 7,025,000 | 8,326,000 |
Type of award: | |||
Unrecognized Expense Net of Estimated Forfeitures | $ 4,080,000 | ||
Weighted-average Recognition Period (in years) | 6 months 29 days | ||
Research and development expenses | |||
Stock-based compensation expense: | |||
Stock-based compensation expense | $ 153,451,000 | 152,955,000 | 116,998,000 |
Sales, general and administrative expenses | |||
Stock-based compensation expense: | |||
Stock-based compensation expense | $ 84,254,000 | $ 78,070,000 | $ 60,544,000 |
Tranche one | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting rights percentage | 33.33% | ||
Tranche two | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting rights percentage | 33.33% | ||
Tranche three | |||
Share-based Compensation Arrangement by Share-based Payment Award | |||
Vesting rights percentage | 33.33% | ||
Minimum | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Performance Target | 0.00% | ||
Maximum | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Performance Target | 200.00% | ||
Financial performance shares | Performance Shares [Member] | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Vesting period | 3 years | ||
Non-financial performance shares | Performance Shares [Member] | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Vesting period | 3 years |
Other Arrangements (Details)
Other Arrangements (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Apr. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2008 | Dec. 31, 2016 | |
Sale of HIV Protease Inhibitor Royalty Stream | ||||
Gross proceeds from sale of royalty rights receivable from GlaxoSmithKline | $ 160 | |||
Royalty purchase agreement deferred revenue | $ 12.6 | |||
Other nonoperating Income | $ 36.7 | $ 36.7 |
Income Taxes- Components of Inc
Income Taxes- Components of Income and Provision for (Benefit from) Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Components of income (loss) before provision for (benefit from) income taxes | |||||||||||
United States | $ (147,860) | $ (272,326) | $ (645,465) | ||||||||
Foreign | 80,494 | (285,474) | (89,410) | ||||||||
Loss from continuing operations before provision for income taxes | $ 20,306 | $ (39,034) | $ (18,021) | $ (30,617) | $ (76,048) | $ (92,486) | $ (190,861) | $ (198,405) | (67,366) | (557,800) | (734,875) |
Current taxes: | |||||||||||
United States | (3,821) | 25,623 | 2,853 | ||||||||
Foreign | 1,794 | 831 | 2,457 | ||||||||
State | 1,836 | 3,629 | 1,366 | ||||||||
Total current taxes | (191) | 30,083 | 6,676 | ||||||||
Deferred taxes: | |||||||||||
United States | 18,659 | 497 | 244 | ||||||||
Foreign | (3,359) | (355) | 0 | ||||||||
State | 1,556 | 156 | 38 | ||||||||
Total deferred taxes | 16,856 | 298 | 282 | ||||||||
Provision for income taxes | $ (7,453) | $ 503 | $ 18,130 | $ 5,485 | $ (1,379) | $ 1,330 | $ 30,131 | $ 299 | $ 16,665 | $ 30,381 | $ 6,958 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2017 | |
Tax Carryforwards | ||||
Unrealized gain | $ 7,967,000 | $ 1,088,000 | ||
Federal statutory income tax rate (percent) | 35.00% | 35.00% | 35.00% | |
Deferred tax liabilities recognized in other liabilities, excluding current portion | $ 134,063,000 | $ 110,439,000 | ||
Unrecognized tax benefits | 0 | 425,000 | $ 880,000 | |
Income tax penalties and interest accrued | 0 | |||
Increase in valuation allowance | (14,800,000) | |||
Deferred tax liabilities not recognized, undistributed foreign earnings | 0 | |||
BioAxone Biosciences, Inc | ||||
Tax Carryforwards | ||||
Deferred tax liabilities recognized in other liabilities, excluding current portion | 134,000,000 | $ 110,400,000 | ||
State and Local Jurisdiction | ||||
Tax Carryforwards | ||||
Operating loss carryforwards | 975,800,000 | |||
Tax credit carryforwards | 103,800,000 | |||
Internal Revenue Service (IRS) | ||||
Tax Carryforwards | ||||
Operating loss carryforwards | 4,100,000,000 | |||
Tax credit carryforwards | $ 262,900,000 | |||
Accounting Standards Update 2016-09 | Scenario, Forecast | Retained Earnings | State and Local Jurisdiction | ||||
Tax Carryforwards | ||||
Operating loss carryforwards | $ 190,000,000 | |||
Accounting Standards Update 2016-09 | Scenario, Forecast | Retained Earnings | Domestic Tax Authority | ||||
Tax Carryforwards | ||||
Operating loss carryforwards | $ 1,200,000,000 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Income Tax Expense: | |||||||||||
Loss from continuing operations before provision for income taxes | $ 20,306 | $ (39,034) | $ (18,021) | $ (30,617) | $ (76,048) | $ (92,486) | $ (190,861) | $ (198,405) | $ (67,366) | $ (557,800) | $ (734,875) |
Expected tax provision (benefit) | (23,578) | (195,230) | (257,206) | ||||||||
State taxes, net of federal benefit | 3,621 | 3,800 | 1,124 | ||||||||
Foreign rate differential | 21,346 | 47,402 | 39,335 | ||||||||
Tax credits | (47,773) | (55,696) | (33,788) | ||||||||
Unbenefitted operating losses (gains) | 14,837 | 226,169 | 241,037 | ||||||||
Non-deductible expenses | 24,749 | 5,817 | 18,756 | ||||||||
Rate change | 12,836 | (1,224) | (1,826) | ||||||||
Tax attribute expiration | 9,947 | 0 | 0 | ||||||||
Other | 680 | (657) | (474) | ||||||||
Provision for income taxes | $ (7,453) | $ 503 | $ 18,130 | $ 5,485 | $ (1,379) | $ 1,330 | $ 30,131 | $ 299 | $ 16,665 | $ 30,381 | $ 6,958 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss | $ 1,232,399 | $ 1,250,642 |
Tax credit carryforwards | 367,402 | 315,535 |
Property and equipment | 22 | 0 |
Intangible assets | 34,938 | 14,673 |
Deferred revenues | 31,205 | 9,341 |
Stock-based compensation | 110,446 | 93,404 |
Inventories | 4,705 | 5,913 |
Accrued expenses | 23,078 | 27,236 |
Currency translation adjustment | 0 | 222 |
Unrealized loss | 5 | 0 |
Construction financing lease obligation | 177,735 | 176,250 |
Gross deferred tax assets | 1,981,935 | 1,893,216 |
Valuation allowance | (1,731,186) | (1,716,349) |
Total deferred tax assets | 250,749 | 176,867 |
Deferred tax liabilities: | ||
Property and equipment | (169,089) | (175,424) |
Acquired intangibles | (134,063) | (110,439) |
Deferred revenue | (73,357) | 0 |
Unrealized gain | (7,967) | (1,088) |
Net deferred tax liabilities | $ (133,727) | $ (110,084) |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of unrecognized tax benefits | ||
Unrecognized Tax Benefits | $ 425 | $ 880 |
Decrease due to statute of limitations expiring | (425) | 0 |
Decrease due to settlements and payments | 0 | (455) |
Unrecognized Tax Benefits | $ 0 | $ 425 |
Restructuring Expenses - 2003 K
Restructuring Expenses - 2003 Kendall Restructuring (Details) - 2003 Restructuring ft² in Thousands, $ in Millions | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2003 | Dec. 31, 2003USD ($)ft² | Jan. 01, 2006ft² | |
Restructuring and Related Activities [Line Items] | |||
Discount rate, lease restructuring liability (percent) | 10.00% | ||
Lease restructuring expense | $ | $ 78.7 | ||
Lease operating expense | $ | $ 6 | ||
Facility Closing | |||
Restructuring and Related Activities [Line Items] | |||
Leased area (in square feet) | ft² | 290 | ||
Lease term (in years) | 15 years | ||
Area of real estate property (in square feet) | ft² | 120 |
Restructuring Expenses - Restru
Restructuring Expenses - Restructuring and Other Liability for 2003 (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 36 Months Ended | |||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2003 | Dec. 31, 2016 | Dec. 31, 2013 | |
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Restructuring expenses | $ 224 | $ 8 | $ 343 | $ 687 | $ 1,524 | $ 1,826 | $ 2,128 | $ (3,272) | $ 1,262 | $ 2,206 | $ 50,925 | |||
2003 Restructuring | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Restructuring expenses | 333 | (116) | (2,937) | $ 91,824 | $ 60,131 | |||||||||
Cash Payments | (15,841) | (14,625) | (17,494) | (17,816) | (226,912) | |||||||||
Non-cash Expense | (4,482) | |||||||||||||
Liability as of December 31, 2003 | $ 4,328 | $ 7,944 | $ 4,328 | $ 7,944 | $ 11,596 | 69,526 | $ 4,328 | $ 19,115 | ||||||
2003 Restructuring | Lease restructuring and other operating lease expense | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Restructuring expenses | 84,726 | |||||||||||||
Cash Payments | (15,200) | |||||||||||||
Non-cash Expense | 0 | |||||||||||||
Liability as of December 31, 2003 | 69,526 | |||||||||||||
2003 Restructuring | Employee severance, benefits and related costs | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Restructuring expenses | 2,616 | |||||||||||||
Cash Payments | (2,616) | |||||||||||||
Non-cash Expense | 0 | |||||||||||||
Liability as of December 31, 2003 | 0 | |||||||||||||
2003 Restructuring | Leasehold improvements and asset impairments | ||||||||||||||
Restructuring Cost and Reserve [Line Items] | ||||||||||||||
Restructuring expenses | 4,482 | |||||||||||||
Cash Payments | 0 | |||||||||||||
Non-cash Expense | (4,482) | |||||||||||||
Liability as of December 31, 2003 | $ 0 |
Restructuring Expenses - 2003 R
Restructuring Expenses - 2003 Restructuring Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 36 Months Ended | ||||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2003 | Dec. 31, 2016 | |
Restructuring activities | |||||||||||||
Restructuring expenses | $ 224 | $ 8 | $ 343 | $ 687 | $ 1,524 | $ 1,826 | $ 2,128 | $ (3,272) | $ 1,262 | $ 2,206 | $ 50,925 | ||
2003 Restructuring | |||||||||||||
Restructuring activities | |||||||||||||
Liability, beginning of the period | $ 7,944 | $ 11,596 | 7,944 | 11,596 | 19,115 | $ 19,115 | |||||||
Cash payments | (15,841) | (14,625) | (17,494) | $ (17,816) | (226,912) | ||||||||
Cash received from subleases | 11,892 | 11,089 | 12,912 | 111,601 | |||||||||
Credit for portion of facility Vertex decided to occupy in 2005 | 0 | 0 | 0 | (10,018) | |||||||||
Restructuring expenses | 333 | (116) | (2,937) | 91,824 | 60,131 | ||||||||
Liability, end of the period | $ 4,328 | $ 7,944 | $ 4,328 | $ 7,944 | $ 11,596 | $ 69,526 | $ 4,328 |
Restructuring Expenses - Fan Pi
Restructuring Expenses - Fan Pier Restructuring Liability (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | 36 Months Ended | ||||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($)ft² | Dec. 31, 2016USD ($) | Sep. 30, 2014 | |
Restructuring activities | |||||||||||||
Restructuring expenses | $ 224 | $ 8 | $ 343 | $ 687 | $ 1,524 | $ 1,826 | $ 2,128 | $ (3,272) | $ 1,262 | $ 2,206 | $ 50,925 | ||
Fan Pier Move Restructuring | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Discount rate, lease restructuring liability (percent) | 9.00% | ||||||||||||
Area of real estate property (in square feet) | ft² | 120 | ||||||||||||
Restructuring activities | |||||||||||||
Liability, beginning of the period | $ 5,964 | $ 33,390 | 5,964 | 33,390 | $ 797 | $ 797 | |||||||
Cash payments | (12,674) | (30,022) | (18,271) | ||||||||||
Cash received from subleases | 9,751 | 4,229 | 0 | ||||||||||
Restructuring expenses | 585 | (1,633) | 50,864 | ||||||||||
Liability, end of the period | $ 3,626 | $ 5,964 | $ 3,626 | $ 5,964 | $ 33,390 | $ 3,626 |
Restructuring Expenses - Other
Restructuring Expenses - Other Restructuring Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 36 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2016 | |
Restructuring activities | ||||||||||||
Restructuring expenses | $ 224 | $ 8 | $ 343 | $ 687 | $ 1,524 | $ 1,826 | $ 2,128 | $ (3,272) | $ 1,262 | $ 2,206 | $ 50,925 | |
Other Restructuring | ||||||||||||
Restructuring activities | ||||||||||||
Liability, beginning of the period | $ 1,450 | $ 869 | 1,450 | 869 | 8,441 | $ 8,441 | ||||||
Cash payments | (1,794) | (3,374) | (10,570) | |||||||||
Restructuring expenses | 344 | 3,955 | 2,998 | |||||||||
Liability, end of the period | $ 0 | $ 1,450 | $ 0 | $ 1,450 | $ 869 | $ 0 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Compensation and Retirement Disclosure [Abstract] | |||
Maximum percentage of annual compensation contributed by the participant (percent) | 60.00% | ||
Company contribution | $ 11.8 | $ 12.8 | $ 12 |
Common stock shares remained available for grant (shares) | 755,000 |
Commitments and Contingencies93
Commitments and Contingencies (Details) ft² in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)ft² | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Future minimum commitments under facility leases commitments with terms of more than one year | |||
2,017 | $ 87,910 | ||
2,018 | 84,886 | ||
2,019 | 91,241 | ||
2,020 | 92,897 | ||
2,021 | 92,097 | ||
Thereafter | 735,658 | ||
Total minimum lease payments | 1,184,689 | ||
Future minimum sublease income | |||
2,017 | (15,687) | ||
2,018 | (5,236) | ||
2,019 | 0 | ||
2,020 | 0 | ||
2,021 | 0 | ||
Thereafter | 0 | ||
Total minimum lease payments | (20,923) | ||
Rental expense | 19,100 | $ 18,100 | $ 38,900 |
Fan Pier Leases | |||
Future minimum commitments under facility leases commitments with terms of more than one year | |||
2,017 | 67,206 | ||
2,018 | 67,206 | ||
2,019 | 72,589 | ||
2,020 | 72,589 | ||
2,021 | 72,589 | ||
Thereafter | 535,032 | ||
Total minimum lease payments | 887,211 | ||
San Diego Lease | |||
Future minimum commitments under facility leases commitments with terms of more than one year | |||
2,017 | 3,147 | ||
2,018 | 3,245 | ||
2,019 | 6,906 | ||
2,020 | 9,208 | ||
2,021 | 9,208 | ||
Thereafter | 138,217 | ||
Total minimum lease payments | $ 169,931 | ||
Kendall Square Lease | |||
Operating lease | |||
Office space used for operation (in square feet) | ft² | 120 | ||
Future minimum commitments under facility leases commitments with terms of more than one year | |||
2,017 | $ 20,088 | ||
2,018 | 6,696 | ||
2,019 | 0 | ||
2,020 | 0 | ||
2,021 | 0 | ||
Thereafter | 0 | ||
Total minimum lease payments | 26,784 | ||
Other Leases | |||
Future minimum commitments under facility leases commitments with terms of more than one year | |||
2,017 | 13,156 | ||
2,018 | 12,975 | ||
2,019 | 11,746 | ||
2,020 | 11,100 | ||
2,021 | 10,300 | ||
Thereafter | 62,409 | ||
Total minimum lease payments | $ 121,686 |
Commitments and Contingencies
Commitments and Contingencies - Capital Lease Financing Obligations (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Capital Leases, Future Minimum Payments Due [Abstract] | |
2,017 | $ 21,995 |
2,018 | 21,393 |
2,019 | 8,778 |
2,020 | 3,336 |
2,021 | 2,457 |
Thereafter | 543 |
Total payments | 58,502 |
Less: amount representing interest | (4,100) |
Present value of payments | $ 54,402 |
Minimum | |
Capital Leased Assets | |
Effective interest rate (less than) (percentage) | 1.00% |
Maximum | |
Capital Leased Assets | |
Effective interest rate (less than) (percentage) | 9.00% |
Commitments and Contingencies -
Commitments and Contingencies - Contingencies (Details) | Dec. 31, 2016USD ($) |
Loss Contingencies [Line Items] | |
Indemnification claims | $ 0 |
Contingent liabilities | 0 |
IBEW | |
Loss Contingencies [Line Items] | |
Legal reserves | $ 0 |
Segment Information - Revenues
Segment Information - Revenues by Product (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of operating segments | segment | 1 | ||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total product revenues, net | $ 453,882 | $ 409,689 | $ 425,651 | $ 394,410 | $ 406,550 | $ 302,511 | $ 160,388 | $ 130,875 | $ 1,683,632 | $ 1,000,324 | $ 487,821 |
KALYDECO | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total product revenues, net | 703,432 | 631,674 | 463,750 | ||||||||
ORKAMBI | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total product revenues, net | 979,590 | 350,663 | 0 | ||||||||
INCIVEK | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Total product revenues, net | $ 610 | $ 17,987 | $ 24,071 |
Segment Information - Revenue b
Segment Information - Revenue by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 458,706 | $ 413,783 | $ 431,608 | $ 398,080 | $ 417,935 | $ 309,816 | $ 166,076 | $ 138,509 | $ 1,702,177 | $ 1,032,336 | $ 580,415 |
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 1,321,807 | 763,316 | 361,074 | ||||||||
Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 320,456 | 219,596 | 197,611 | ||||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 59,914 | 49,424 | 21,730 | ||||||||
Total revenues outside of the United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 380,370 | $ 269,020 | $ 219,341 |
Segment Information - Significa
Segment Information - Significant Customers (Details) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues, Net | Minimum | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Accounts Receivable | Minimum | |||
Concentration Risk [Line Items] | |||
Threshold for disclosure of concentration risk | 10.00% | ||
Credit Concentration Risk | Revenues, Net | Walgreen Co. | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 19.00% | 20.00% | 12.00% |
Credit Concentration Risk | Revenues, Net | CVS/Caremark | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 19.00% | 17.00% | 10.00% |
Credit Concentration Risk | Revenues, Net | Accredo/Curascript | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 15.00% | 15.00% | 10.00% |
Credit Concentration Risk | Accounts Receivable | Walgreen Co. | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 15.00% | 15.00% | |
Credit Concentration Risk | Accounts Receivable | CVS/Caremark | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 17.00% | 17.00% | |
Credit Concentration Risk | Accounts Receivable | Accredo/Curascript | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 10.00% | 16.00% |
Segment Information - Property
Segment Information - Property and Equipment, Net by Location (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 698,362 | $ 697,715 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 665,552 | 661,421 |
United Kingdom | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 26,921 | 32,793 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | 5,889 | 3,501 |
Total revenues outside of the United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Total property and equipment, net | $ 32,810 | $ 36,294 |
Quarterly Financial Data (un100
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Revenues: | |||||||||||
Product revenues, net | $ 453,882 | $ 409,689 | $ 425,651 | $ 394,410 | $ 406,550 | $ 302,511 | $ 160,388 | $ 130,875 | $ 1,683,632 | $ 1,000,324 | $ 487,821 |
Royalty revenues | 3,887 | 3,835 | 5,282 | 3,596 | 6,331 | 5,759 | 5,077 | 6,792 | 16,600 | 23,959 | 40,919 |
Collaborative revenues | 937 | 259 | 675 | 74 | 5,054 | 1,546 | 611 | 842 | 1,945 | 8,053 | 51,675 |
Total revenues | 458,706 | 413,783 | 431,608 | 398,080 | 417,935 | 309,816 | 166,076 | 138,509 | 1,702,177 | 1,032,336 | 580,415 |
Costs and expenses: | |||||||||||
Cost of product revenues | 59,646 | 53,222 | 44,154 | 49,789 | 62,092 | 30,269 | 15,409 | 9,381 | 206,811 | 117,151 | 39,725 |
Royalty expenses | 836 | 855 | 1,098 | 860 | 1,293 | 1,691 | 1,451 | 2,926 | 3,649 | 7,361 | 21,262 |
Research and development expenses | 248,452 | 272,370 | 271,008 | 255,860 | 310,181 | 246,284 | 223,858 | 215,599 | 1,047,690 | 995,922 | 855,506 |
Sales, general and administrative expenses | 109,908 | 106,055 | 111,652 | 105,214 | 96,549 | 99,772 | 94,394 | 85,860 | 432,829 | 376,575 | 305,409 |
Restructuring expenses | 224 | 8 | 343 | 687 | 1,524 | 1,826 | 2,128 | (3,272) | 1,262 | 2,206 | 50,925 |
Total costs and expenses | 419,066 | 432,510 | 428,255 | 412,410 | 471,639 | 379,842 | 337,240 | 310,494 | 1,692,241 | 1,499,215 | 1,272,827 |
Income (loss) from operations | 39,640 | (18,727) | 3,353 | (14,330) | (53,704) | (70,026) | (171,164) | (171,985) | 9,936 | (466,879) | (692,412) |
Interest expense, net | (20,439) | (20,140) | (20,155) | (20,698) | (20,654) | (21,134) | (21,111) | (21,307) | (81,432) | (84,206) | (72,863) |
Other income (expense), net | 1,105 | (167) | (1,219) | 4,411 | (1,690) | (1,326) | 1,414 | (5,113) | 4,130 | (6,715) | 30,400 |
Loss from continuing operations before provision for income taxes | 20,306 | (39,034) | (18,021) | (30,617) | (76,048) | (92,486) | (190,861) | (198,405) | (67,366) | (557,800) | (734,875) |
Provision for (benefit from) income taxes | (7,453) | 503 | 18,130 | 5,485 | (1,379) | 1,330 | 30,131 | 299 | 16,665 | 30,381 | 6,958 |
Net loss | 27,759 | (39,537) | (36,151) | (36,102) | (74,669) | (93,816) | (220,992) | (198,704) | (84,031) | (588,181) | (742,745) |
Loss (income) attributable to noncontrolling interest | 938 | (1,333) | 32,144 | 98 | |||||||
(Income) loss attributable to noncontrolling interest | 5,186 | 696 | (28,374) | (5,529) | |||||||
Net loss attributable to Vertex | $ 32,945 | $ (38,841) | $ (64,525) | $ (41,631) | $ (73,731) | $ (95,149) | $ (188,848) | $ (198,606) | $ (112,052) | $ (556,334) | $ (738,555) |
Net (loss) income: | |||||||||||
Basic (usd per share) | $ 0.13 | $ (0.16) | $ (0.26) | $ (0.17) | $ (0.46) | $ (2.31) | $ (3.14) | ||||
Diluted (usd per share) | $ 0.13 | $ (0.16) | $ (0.26) | $ (0.17) | $ (0.46) | $ (2.31) | $ (3.14) | ||||
Basic and diluted (usd per share) | $ (0.30) | $ (0.39) | $ (0.78) | $ (0.83) | |||||||
Shares used in per share calculations: | |||||||||||
Basic (in shares) | 245,454 | 244,920 | 244,482 | 243,831 | 244,685 | 241,312 | 235,307 | ||||
Diluted (in shares) | 247,757 | 244,920 | 244,482 | 243,831 | 244,685 | 241,312 | 235,307 | ||||
Basic and diluted (in shares) | 242,987 | 241,969 | 240,757 | 239,493 |
Quarterly Financial Data (un101
Quarterly Financial Data (unaudited) (footnotes) (Details) - USD ($) | Oct. 26, 2015 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Research and development expenses, early-stage research assets | $ 10,000,000 | |||
Moderna Therapeutics, Inc. | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Up-front payment | $ 20,000,000 | |||
CRISPR Therapeutics | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Collaborative funding with CRISPR | $ 75,000,000 | $ 75,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Facility Closing - Subsequent Event $ in Millions | 1 Months Ended |
Feb. 23, 2017USD ($)position | |
Restructuring Cost and Reserve [Line Items] | |
Number of positions eliminated | position | 70 |
Restructuring and related costs, expected total costs | $ | $ 10 |