Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 21, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | VERTEX PHARMACEUTICALS INC / MA | |
Entity Central Index Key | 875,320 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 252,118,869 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Product revenues, net | $ 513,988 | $ 425,651 | $ 994,610 | $ 820,061 |
Royalty revenues | 2,861 | 5,282 | 4,412 | 8,878 |
Collaborative revenues | 27,286 | 675 | 259,831 | 749 |
Total revenues | 544,135 | 431,608 | 1,258,853 | 829,688 |
Costs and expenses: | ||||
Cost of product revenues | 70,535 | 44,154 | 116,777 | 93,943 |
Royalty expenses | 670 | 1,098 | 1,416 | 1,958 |
Research and development expenses | 289,451 | 271,008 | 563,014 | 526,868 |
Sales, general and administrative expenses | 127,249 | 111,652 | 240,575 | 216,866 |
Restructuring expenses, net | 3,523 | 343 | 13,522 | 1,030 |
Total costs and expenses | 491,428 | 428,255 | 935,304 | 840,665 |
Income (loss) from operations | 52,707 | 3,353 | 323,549 | (10,977) |
Interest expense, net | (14,664) | (20,155) | (31,429) | (40,853) |
Other (expenses) income, net | (2,537) | (1,219) | (3,081) | 3,192 |
Income (loss) before provision for income taxes | 35,506 | (18,021) | 289,039 | (48,638) |
Provision for income taxes | 4,337 | 18,130 | 8,322 | 23,615 |
Net income (loss) | 31,169 | (36,151) | 280,717 | (72,253) |
Income attributable to noncontrolling interest | (13,173) | (28,374) | (14,965) | (33,903) |
Net income (loss) attributable to Vertex | $ 17,996 | $ (64,525) | $ 265,752 | $ (106,156) |
Net income (loss): | ||||
Basic (in dollars per share) | $ 0.07 | $ (0.26) | $ 1.08 | $ (0.43) |
Diluted (in dollars per share) | $ 0.07 | $ (0.26) | $ 1.06 | $ (0.43) |
Shares used in per share calculations: | ||||
Basic (in shares) | 247,521 | 244,482 | 246,782 | 244,124 |
Diluted (in shares) | 251,635 | 244,482 | 250,199 | 244,124 |
Condensed Consolidated Stateme3
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||||
Net income (loss) | $ 31,169 | $ (36,151) | $ 280,717 | $ (72,253) |
Changes in other comprehensive income (loss): | ||||
Unrealized holding (losses) gains on marketable securities, net of tax of $1.0 million, zero, zero and zero, respectively | (17,281) | (29) | (13,747) | 200 |
Unrealized (losses) gains on foreign currency forward contracts, net of tax of $1.1 million, $0.2 million, $2.0 million and $(0.6) million, respectively | (15,245) | 4,999 | (21,926) | (213) |
Foreign currency translation adjustment | (5,252) | (3,461) | (7,253) | (5,201) |
Total changes in other comprehensive (loss) income | (37,778) | 1,509 | (42,926) | (5,214) |
Comprehensive (loss) income | (6,609) | (34,642) | 237,791 | (77,467) |
Comprehensive income attributable to noncontrolling interest | (13,173) | (28,374) | (14,965) | (33,903) |
Comprehensive (loss) income attributable to Vertex | $ (19,782) | $ (63,016) | $ 222,826 | $ (111,370) |
Condensed Consolidated Stateme4
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract] | ||||
Unrealized holding (losses) gains on marketable securities, tax | $ 1 | $ 0 | $ 0 | $ 0 |
Unrealized (losses) gains on foreign currency forward contracts, tax | $ 1.1 | $ 0.2 | $ 2 | $ (0.6) |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,223,130 | $ 1,183,945 |
Marketable securities, available for sale | 445,520 | 250,612 |
Restricted cash and cash equivalents (VIE) | 64,628 | 47,762 |
Accounts receivable, net | 247,949 | 201,083 |
Inventories | 92,263 | 77,604 |
Prepaid expenses and other current assets | 107,082 | 70,534 |
Total current assets | 2,180,572 | 1,831,540 |
Property and equipment, net | 740,103 | 698,362 |
Intangible assets | 284,340 | 284,340 |
Goodwill | 50,384 | 50,384 |
Cost method investments | 20,252 | 20,276 |
Other assets | 9,943 | 11,885 |
Total assets | 3,285,594 | 2,896,787 |
Current liabilities: | ||
Accounts payable | 75,941 | 61,451 |
Accrued expenses | 345,062 | 315,249 |
Deferred revenues, current portion | 7,277 | 6,005 |
Accrued restructuring expenses, current portion | 6,491 | 6,047 |
Capital lease obligations, current portion | 18,179 | 19,426 |
Customer deposits | 147,686 | 73,416 |
Credit facility | 0 | 300,000 |
Other liabilities, current portion | 24,770 | 10,943 |
Total current liabilities | 625,406 | 792,537 |
Deferred revenues, excluding current portion | 4,161 | 6,632 |
Accrued restructuring expenses, excluding current portion | 527 | 1,907 |
Capital lease obligations, excluding current portion | 25,346 | 34,976 |
Deferred tax liability | 136,649 | 134,063 |
Construction financing lease obligation, excluding current portion | 525,019 | 486,359 |
Advance from collaborator | 76,034 | 73,423 |
Other liabilities, excluding current portion | 25,221 | 28,699 |
Total liabilities | 1,418,363 | 1,558,596 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 500,000,000 shares authorized; 250,769,906 and 248,300,517 shares issued and outstanding at June 30, 2017 and December 31, 2016, respectively | 2,479 | 2,450 |
Additional paid-in capital | 6,808,002 | 6,506,795 |
Accumulated other comprehensive (loss) income | (21,753) | 21,173 |
Accumulated deficit | (5,117,455) | (5,373,836) |
Total Vertex shareholders’ equity | 1,671,273 | 1,156,582 |
Noncontrolling interest | 195,958 | 181,609 |
Total shareholders’ equity | 1,867,231 | 1,338,191 |
Total liabilities and shareholders’ equity | $ 3,285,594 | $ 2,896,787 |
Condensed Consolidated Balance6
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 250,769,906 | 248,300,517 |
Common stock, shares outstanding | 250,769,906 | 248,300,517 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Shareholders' Equity and Noncontrolling Interest (unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Total Vertex Shareholders’ Equity | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive (Loss) Income | Accumulated Deficit | Noncontrolling Interest |
Balance (shares) at Dec. 31, 2015 | 246,307 | ||||||
Beginning Balance at Dec. 31, 2015 | $ 1,093,628 | $ 939,967 | $ 2,427 | $ 6,197,500 | $ 1,824 | $ (5,261,784) | $ 153,661 |
Increase (Decrease) in Stockholders' Equity | |||||||
Other comprehensive loss, net of tax | (5,214) | (5,214) | (5,214) | ||||
Net income (loss) | (72,253) | (106,156) | (106,156) | 33,903 | |||
Issuance of common stock under benefit plans (shares) | 1,397 | ||||||
Issuance of common stock under benefit plans | 33,570 | 33,570 | $ 13 | 33,557 | 0 | ||
Stock-based compensation expense | 119,114 | 119,187 | 119,187 | (73) | |||
Balance (shares) at Jun. 30, 2016 | 247,704 | ||||||
Ending Balance at Jun. 30, 2016 | 1,168,845 | 981,354 | $ 2,440 | 6,350,244 | (3,390) | (5,367,940) | 187,491 |
Increase (Decrease) in Stockholders' Equity | |||||||
Cumulative effect adjustment for adoption of new accounting guidance | Accounting Standards Update 2016-09, Forfeiture Rate Component | 9,371 | (9,371) | |||||
Balance (shares) at Dec. 31, 2016 | 248,301 | ||||||
Beginning Balance at Dec. 31, 2016 | 1,338,191 | 1,156,582 | $ 2,450 | 6,506,795 | 21,173 | (5,373,836) | 181,609 |
Increase (Decrease) in Stockholders' Equity | |||||||
Other comprehensive loss, net of tax | (42,926) | (42,926) | (42,926) | ||||
Net income (loss) | 280,717 | 265,752 | 265,752 | 14,965 | |||
Issuance of common stock under benefit plans (shares) | 2,469 | ||||||
Issuance of common stock under benefit plans | 148,008 | 148,008 | $ 29 | 147,979 | 0 | ||
Stock-based compensation expense | 143,857 | 143,857 | 143,857 | 0 | |||
Other | (616) | (616) | |||||
Balance (shares) at Jun. 30, 2017 | 250,770 | ||||||
Ending Balance at Jun. 30, 2017 | $ 1,867,231 | $ 1,671,273 | $ 2,479 | $ 6,808,002 | $ (21,753) | $ (5,117,455) | $ 195,958 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net income (loss) | $ 280,717 | $ (72,253) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Stock-based compensation expense | 141,564 | 117,414 |
Depreciation and amortization expense | 29,740 | 31,378 |
Write-downs of inventories to net realizable value | 9,479 | 0 |
Deferred income taxes | 4,626 | 22,858 |
Impairment of property and equipment | 1,946 | 0 |
Other non-cash items, net | (4,834) | 3,436 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (41,450) | (12,954) |
Inventories | (22,028) | (7,779) |
Prepaid expenses and other assets | (47,848) | (7,971) |
Accounts payable | 14,047 | (23,821) |
Accrued expenses and other liabilities | 83,643 | (14,562) |
Accrued restructuring expense | (1,058) | (2,892) |
Deferred revenues | (1,199) | (7,131) |
Net cash provided by operating activities | 447,345 | 25,723 |
Cash flows from investing activities: | ||
Purchases of marketable securities | (377,667) | (470,077) |
Maturities of marketable securities | 168,882 | 332,316 |
Expenditures for property and equipment | (28,866) | (27,892) |
(Increase) decrease in restricted cash and cash equivalents (VIE) | (16,865) | 8,397 |
Investment in CRISPR Series B preferred stock | 0 | (3,075) |
Decrease (increase) in other assets | 388 | (159) |
Net cash used in investing activities | (254,128) | (160,490) |
Cash flows from financing activities: | ||
Issuances of common stock under benefit plans | 147,887 | 33,702 |
Payments on revolving credit facility | (300,000) | 0 |
Advance from collaborator | 7,500 | 0 |
Payments on capital lease obligations | (10,637) | (7,538) |
Payments on construction financing lease obligation | (238) | (209) |
Repayments of advanced funding | (2,044) | 0 |
Net cash (used in) provided by financing activities | (157,532) | 25,955 |
Effect of changes in exchange rates on cash | 3,500 | (90) |
Net increase (decrease) in cash and cash equivalents | 39,185 | (108,902) |
Cash and cash equivalents—beginning of period | 1,183,945 | 714,768 |
Cash and cash equivalents—end of period | 1,223,130 | 605,866 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 35,003 | 41,325 |
Cash paid for income taxes | 2,218 | 1,237 |
Capitalization of costs related to construction financing lease obligation | 38,930 | 0 |
Issuances of common stock from employee benefit plans receivable | $ 188 | $ 161 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Policies | Basis of Presentation and Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared by Vertex Pharmaceuticals Incorporated (“Vertex” or the “Company”) in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements reflect the operations of (i) the Company, (ii) its wholly-owned subsidiaries and (iii) consolidated variable interest entities (VIEs). All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position and results of operations for the interim periods ended June 30, 2017 and 2016 . The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full fiscal year. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2016 , which are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 that was filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2017 (the “ 2016 Annual Report on Form 10-K”). Use of Estimates and Summary of Significant Accounting Policies The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. Significant estimates in these condensed consolidated financial statements have been made in connection with the calculation of revenues, inventories, research and development expenses, stock-based compensation expense, restructuring expense, the fair value of intangible assets, goodwill, contingent consideration, noncontrolling interest, the consolidation of VIEs, leases, the fair value of cash flow hedges and the provision for or benefit from income taxes. The Company bases its estimates on historical experience and various other assumptions, including in certain circumstances future projections that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known. The Company’s significant accounting policies are described in Note A, “Nature of Business and Accounting Policies,” in the 2016 Annual Report on Form 10-K. Recent Accounting Pronouncements In 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance applicable to revenue recognition that will be effective January 1, 2018. Early adoption was 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. Upon adoption, the Company will use the modified retrospective method. The Company continued its evaluation of the new guidance and the effect of adoption on the condensed consolidated financial statements. The Company’s project team progressed its review of existing customer contracts and current accounting policies to identify and assess the potential differences that would result from applying the requirements of the new standard. Based on the Company’s assessment performed to date, the new guidance could impact the Company’s accounting for product shipments to certain countries through early access programs, including the French early access programs, whereby the associated product has received regulatory approval but the reimbursement rate has not been finalized, and could impact the Company’s accounting for certain reimbursement agreements that the Company plans to negotiate in the second half of 2017. The Company is also in the process of implementing appropriate changes to its controls to support revenue recognition and additional revenue-related disclosures under the new standard. In 2016, the FASB issued amended guidance applicable to share-based compensation to employees that 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 amended guidance became effective for the Company during the first quarter of 2017. The amended guidance eliminates the requirement that excess tax benefits be realized as a reduction in current taxes payable before the associated tax benefit can be recognized as an increase in additional paid-in capital. This created approximately $410.8 million of deferred tax asset (“DTA”) relating to federal and state net operating losses (“NOLs”) that are fully reserved by an equal increase in valuation allowance. The Company recorded DTAs of approximately $404.7 million relating to Federal NOLs and approximately $6.1 million relating to State NOLs, both of which are offset by a full valuation allowance. Upon adoption, the Company also elected to change its accounting policy to account for forfeitures of options and awards as they occur. The change was applied on a modified retrospective basis with a cumulative effect adjustment to the Company’s accumulated deficit of $9.4 million , which increased the accumulated deficit as of January 1, 2017. This change also resulted in an increase to the DTA of $3.4 million , which is offset by a full valuation allowance. As a result, there was no cumulative-effect adjustment to accumulated deficit. The provisions related to the recognition of excess tax benefits in the income statement and classification in the statement of cash flows were adopted prospectively, and as such, the prior periods were not retrospectively adjusted. In 2016, the FASB issued amended guidance related to the recording of financial assets and financial liabilities. Under the amended guidance, equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are to be measured at fair value with changes in fair value recognized in net income. However, an entity has the option to either measure equity investments without readily determinable fair values at fair value or at cost adjusted for changes in observable prices minus impairment. Changes in measurement under either alternative will be recognized in net income. The amended guidance is effective for the year-ending December 31, 2018. Early adoption is permitted. The Company expects the implementation of this standard to have an impact on its consolidated financial statements and related disclosures, as the Company held publicly traded equity investments as of June 30, 2017 as well as equity investments accounted for under the cost method. A cumulative-effect adjustment to the balance sheet will be recorded as of the beginning of the fiscal year of adoption. The implementation of this amended guidance is expected to increase volatility in net income as the volatility currently recorded in other comprehensive income related to changes in the fair market value of available-for-sale equity investments will be reflected in net income after adoption. 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 guidance requires entities 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 this guidance and determining the expected effect on its condensed consolidated financial statements. In 2016, the FASB issued amended guidance related to intra-entity transfers other than inventory. This guidance removes the current exception in GAAP prohibiting entities from recognizing current and deferred income tax expenses or benefits related to transfer of assets, other than inventory, within the consolidated entity. The current exception to defer the recognition of any tax impact on the transfer of inventory within the consolidated entity until it is sold to a third party remains unaffected. The amended guidance is effective for the year ending December 31, 2018. Early adoption is permitted. The Company is in the process of evaluating this guidance and determining the expected effect on its condensed consolidated financial statements. In 2017, the FASB issued amended guidance related to business combinations. The amended 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 early adopted this new guidance as of January 1, 2017 and will apply this new guidance to future acquisitions. In 2017, the FASB issued amended guidance related to measurements of goodwill. The amended guidance eliminates a step from the goodwill impairment test. Under the amended guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amended guidance is effective for the year-ending December 31, 2020. Early adoption is permitted. The Company does not expect a significant effect on its condensed consolidated financial statements upon adoption of this new guidance. In 2017, the FASB issued amended guidance related to the scope of stock option modification accounting, to reduce diversity in practice and provide clarity regarding existing guidance. 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 does not expect the adoption of this guidance to have a material effect on its condensed consolidated financial statements and related disclosures. For a discussion of other recent accounting pronouncements please refer to Note A, “Nature of Business and Accounting Policies—Recent Accounting Pronouncements,” in the 2016 Annual Report on Form 10-K. |
Product Revenues, Net
Product Revenues, Net | 6 Months Ended |
Jun. 30, 2017 | |
Product Revenues [Abstract] | |
Product Revenues, Net | Product Revenues, Net The Company sells its products principally to a limited number of specialty pharmacy providers in North America as well as government-owned and supported customers in international markets (collectively, its “Customers”). The Company’s Customers in North America subsequently resell the products to patients and health care providers. The Company recognizes net revenues from product sales upon delivery to the Customer as long as (i) there is persuasive evidence that an arrangement exists between the Company and the Customer, (ii) collectibility is reasonably assured and (iii) the price is fixed or determinable. In order to conclude that the price is fixed or determinable, the Company must be able to (i) calculate its gross product revenues from sales to Customers and (ii) reasonably estimate its net product revenues upon delivery to its Customers’ locations. The Company calculates gross product revenues based on the price that the Company charges its Customers. The Company estimates its net product revenues by deducting from its gross product revenues (a) trade allowances, such as invoice discounts for prompt payment and Customer fees, (b) estimated government and private payor rebates, chargebacks and discounts, (c) estimated reserves for expected product returns and (d) estimated costs of co-pay assistance programs for patients, as well as other incentives for certain indirect customers. The Company makes significant estimates and judgments that materially affect the Company’s recognition of net product revenues. In certain instances, the Company may be unable to reasonably conclude that the price is fixed or determinable at the time of delivery, in which case it defers the recognition of revenues. Once the Company is able to determine that the price is fixed or determinable, it recognizes the revenues associated with the units in which revenue recognition was deferred. ORKAMBI net product revenues do not include any revenues from product sales in France. The Company began distributing ORKAMBI through early access programs in France during the fourth quarter of 2015. The Company’s condensed consolidated balance sheet includes $147.7 million collected as of June 30, 2017 in France related to ORKAMBI that is classified as Customer deposits. The Company currently expects that revenues from these early access programs and deferred expenses associated with these revenues 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 six months ended June 30, 2017 : Trade Rebates, Product Other Total (in thousands) Balance at December 31, 2016 $ 2,568 $ 81,927 $ 3,492 $ 1,214 $ 89,201 Provision related to current period sales 11,941 69,669 1,777 9,224 92,611 Adjustments related to prior period sales (194 ) (3,268 ) (48 ) (145 ) (3,655 ) Credits/payments made (11,683 ) (58,121 ) (631 ) (6,966 ) (77,401 ) Balance at June 30, 2017 $ 2,632 $ 90,207 $ 4,590 $ 3,327 $ 100,756 |
Collaborative Arrangements and
Collaborative Arrangements and Acquisitions | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaborative Arrangements and Acquisitions | Collaborative Arrangements and Acquisitions 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 in October 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 (i) KALYDECO (ivacaftor) and ORKAMBI (lumacaftor in combination with ivacaftor), which are the Company’s current products and (ii) tezacaftor in combination with ivacaftor. For combination products, such as ORKAMBI, sales will be allocated equally to each of the active pharmaceutical ingredients in the combination product. In the first quarter of 2016, CFFT earned a commercial milestone payment of $13.9 million from the Company upon achievement of certain sales levels of lumacaftor. There are no additional commercial milestone payments payable by the Company to CFFT pursuant to the agreement. Pursuant to the 2016 Amendment, the CFFT provided the Company an upfront program award of $75.0 million and agreed to provide development funding to the Company of up to $6.0 million annually. The program award 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 condensed consolidated balance sheet, primarily reflected in Advance from collaborator. 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 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 In 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, including targets for the potential treatment of sickle cell disease. 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 condensed consolidated balance sheets. 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 million of common shares at public offering price and the Company’s preferred stock investments in CRISPR converted into common shares. As of June 30, 2017 , the Company recorded the CRISPR common shares it holds at fair value and included the $51.0 million fair value of the common shares in its marketable securities and the 7.8 million unrecognized gain related to these common shares in accumulated other comprehensive income (loss) on the condensed 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. 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 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. The Merck KGaA Agreement provided for an up-front payment from Merck KGaA to the Company of $230.0 million . During the first quarter of 2017, the Company received $193.6 million of the up-front payment and the remaining $36.4 million was remitted to the German tax authorities. Pursuant to a tax treaty between the United States and Germany, the Company filed a refund application for the tax withholding and expects to receive the refund in the second half of 2017. The income tax receivable is included in Prepaid expenses and other current assets at June 30, 2017. In addition to the up-front payment, the Company 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 has assumed full responsibility for development and commercialization costs for all programs. The Company evaluated the deliverables, primarily consisting of a license to the four programs and the obligation to complete certain fully-reimbursable research and development and transition activities as directed by Merck KGaA, pursuant to the Merck KGaA Agreement, under the multiple element arrangement accounting guidance. The Company concluded that the license has stand-alone value from the research and development and transition activities based on the resources and know-how possessed by Merck KGaA, and thus concluded that there are two units of accounting in the arrangement. The Company determined the relative selling price of the units of accounting based on the Company’s best estimate of selling price. The Company utilized key assumptions to determine the best estimate of selling price for the license, which included future potential net sales of licensed products, development timelines, reimbursement rates for personnel costs, discount rates, and estimated third-party development costs. The Company utilized a discounted cash flow model to determine its best estimate of selling price for the license and determined the best estimate of selling price for the research and development and transition activities based on what it would sell the services for separately. Based on this analysis, the Company recognized approximately $231.7 million in collaborative revenues related to the up-front payment upon delivery of the license and to the research and development and transition activities provided during the first quarter of 2017. During the three and six months ended June 30, 2017 , the Company recorded the reimbursement for the research and development and transition activities of $6.1 million and $7.6 million , respectively, as revenue in the Company’s consolidated statements of operations primarily due to the fact that the Company is the primary obligor in the arrangement. The Company is providing research and development and transition activities and will recognize the revenues and associated expenses as the services are provided. 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 also may 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. Variable Interest Entities The Company has entered into several agreements pursuant to which it has licensed rights to certain drug candidates from third-party collaborators, which has resulted in the consolidation of the third parties’ financial statements into the Company’s condensed consolidated financial statements as VIEs. In order to account for the fair value of the contingent 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. 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. 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. While there was a transfer of $80.0 million to Parion, the cash remained within the Company’s condensed consolidated balance sheet since Parion is part of the consolidated entity. The cash received, net of any cash spend by Parion, is classified as restricted cash and cash equivalents (VIE) within the condensed 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 condensed consolidated financial statements. The Company recorded $255.3 million of intangible assets on the Company’s condensed consolidated balance sheet for Parion’s in-process research and development assets. These in-process research and development assets relate to Parion’s pulmonary ENaC platform, including the intellectual property related to VX-371 and VX-551, that are licensed by Parion to the Company. The Company also recorded the fair value of the net assets attributable to noncontrolling interest of $164.3 million , deferred tax liability of $91.0 million resulting from a basis difference in the intangible assets and certain other net liabilities held by Parion of $10.5 million . 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. In the second quarter of 2017, Parion signed a license agreement with an affiliate of Shire plc related to the development of a drug candidate for the potential treatment of dry eye disease. The Company evaluated the license agreement entered into by Parion as a reconsideration event to determine whether it should continue to consolidate Parion as a variable interest entity into its condensed consolidated financial statements. The Company determined that there was no substantive change in the design of Parion subsequent to Parion’s agreement with Shire. Additionally, the Company concluded that it is appropriate to continue to consolidate the financial results of Parion because it continues to have (i) the power to direct the activities that most significantly affect the economic performance of Parion and (ii) the obligation to absorb losses and right to receive benefits that potentially could be significant to Parion. Based on the consolidation of Parion’s financial statements, in the three and six months ended June 30, 2017, the Company recognized (i) $20.0 million of collaborative revenues and (ii) a tax provision of $7.4 million , both of which were attributable to noncontrolling interest related to an upfront payment that Parion received from Shire in the second quarter of 2017. The Company has no interest in Parion’s license agreement with Shire, including the economic benefits and/or obligations derived therefrom. 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 paid BioAxone initial payments of $10.0 million in the fourth quarter of 2014. BioAxone has the potential to receive up to $90.0 million in milestones and fees, including development, regulatory and milestone payments and a license continuation fee. In addition, BioAxone would receive royalties and commercial milestones on future net product sales of VX-210, if any. The Company recorded an in-process research and development intangible asset of $29.0 million for VX-210 and a corresponding deferred tax liability of $11.3 million attributable to BioAxone. The Company holds an option to purchase BioAxone at a predetermined price. The option expires on the earliest of (a) the day the FDA accepts the Biologics License Application submission for VX-210, (b) the day the Company elects to continue the license instead of exercising the option to purchase BioAxone and (c) March 15, 2018, subject to the Company’s option to extend this date by one year. Aggregate VIE Financial Information An aggregate summary of net income attributable to noncontrolling interest related to the Company’s VIEs for the three and six months ended June 30, 2017 and 2016 is as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands) (Income) loss attributable to noncontrolling interest before provision for income taxes and changes in fair value of contingent payments $ (18,045 ) $ 2,835 $ (16,498 ) $ 3,674 Provision for income taxes 8,132 17,511 8,523 20,573 Increase in fair value of contingent payments (3,260 ) (48,720 ) (6,990 ) (58,150 ) Net income attributable to noncontrolling interest $ (13,173 ) $ (28,374 ) $ (14,965 ) $ (33,903 ) The increases in the noncontrolling interest holders’ claim to net assets with respect to the fair value of the contingent payments in the three and six months ended June 30, 2017 were primarily due to changes in market interest rates and the time value of money. The increases in the fair value of the contingent milestone and royalty payments in the three and six months ended June 30, 2016 were primarily due to a Phase 2 clinical trial of VX-371, a compound being developed pursuant to the Parion Agreement, achieving its primary safety endpoint in the second quarter of 2016. During the three and six months ended June 30, 2017 and 2016 , the increases in the fair value of the contingent payments related to the Company’s VIEs was as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands) Parion $ 3,260 $ 48,400 $ 6,090 $ 57,400 BioAxone — 320 900 750 The fair value of the contingent payments related to the Parion Agreement and the BioAxone Agreement as of the dates set forth in the table: June 30, 2017 December 31, 2016 (in thousands) Parion $ 244,890 $ 238,800 BioAxone 18,900 18,000 The following table summarizes items related to the Company’s VIEs included in the Company’s condensed consolidated balance sheets as of the dates set forth in the table: June 30, 2017 December 31, 2016 (in thousands) Restricted cash and cash equivalents (VIE) $ 64,628 $ 47,762 Prepaid expenses and other current assets 1,198 6,812 Intangible assets 284,340 284,340 Goodwill 19,391 19,391 Other assets 752 399 Accounts payable 702 415 Accrued expenses 4,118 1,330 Other liabilities, current portion 1,610 2,137 Deferred tax liability 134,305 131,446 Other liabilities, excluding current portion 300 300 Noncontrolling interest 195,958 181,609 The Company has recorded the VIEs’ cash and cash equivalents as restricted cash and cash equivalents (VIE) because (i) the Company does not have any interest in or control over the VIEs’ cash and cash equivalents and (ii) the Company’s agreements with each VIE do not provide for the VIEs’ cash and cash equivalents to be used for the development of the assets that the Company licensed from the applicable VIE. Assets recorded as a result of consolidating the Company’s VIEs’ financial condition into the Company’s balance sheet do not represent additional assets that could be used to satisfy claims against the Company’s general assets. Other Collaborations The Company has entered into various agreements pursuant to which it collaborates with third parties, including inlicensing and outlicensing arrangements. Although the Company does not consider any of these arrangements to be material, the most notable of these arrangements are described below. Moderna Therapeutics, Inc. In July 2016, the Company entered into a strategic collaboration and licensing agreement (the “Moderna Agreement”) with Moderna Therapeutics, Inc. (“Moderna”) pursuant to which the parties are seeking to identify and develop messenger Ribonucleic Acid (“mRNA”) Therapeutics for the treatment of CF. In connection with the Moderna Agreement in the third quarter of 2016, the Company made an upfront payment to Moderna of $20.0 million and a $20.0 million cost-method investment in Moderna pursuant to a convertible promissory note that converted into preferred stock in August 2016. Moderna has the potential to receive future development and regulatory milestones of up to $275.0 million , including $220.0 million in approval and reimbursement milestones, as well as tiered royalty payments on future sales. Under the terms of the Moderna Agreement, Moderna will lead discovery efforts and the Company will lead all preclinical, development and commercialization activities associated with the advancement of mRNA Therapeutics that result from this collaboration and will fund all expenses related to the collaboration. The Company may terminate the Moderna Agreement by providing advanced notice to Moderna, with the required length of notice dependent on whether any product developed under the Moderna Agreement has received marketing approval. The Moderna Agreement also may be terminated by either party for a material breach by the other, subject to notice and cure provisions. Unless earlier terminated, the Moderna Agreement will continue in effect until the expiration of the Company’s payment obligations under the Moderna Agreement. The Company evaluates the carrying value of its $20.0 million cost-method investment in Moderna, which is not a publicly traded company, for impairment on a quarterly basis and has not recorded any adjustments to the carrying value of its investment to date. Janssen Pharmaceuticals, Inc. In June 2014, the Company entered into an agreement (the “Janssen 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 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 revenue. The Company has the potential to receive development, regulatory and commercial milestone payments as well as royalties on future product sales, if any. Janssen Inc. may terminate the Janssen Agreement, subject to certain exceptions, upon six months’ notice. Janssen Inc. is responsible for costs related to the development and commercialization of the compounds. During the three and six months ended June 30, 2017 the Company recorded reimbursement for these development activities of $0.3 million and $1.8 million , respectively. During the three and six months ended June 30, 2016 the Company recorded reimbursement for these development activities of $4.3 million and $7.8 million , respectively. The reimbursements are recorded as a reduction to development expense in the Company’s condensed consolidated statements of operations primarily due to the fact that Janssen Inc. directs the activities and selects the suppliers associated with these activities. Acquisition Concert Pharmaceuticals In July 2017, the Company acquired certain CF assets including CTP-656 from Concert Pharmaceuticals Inc. (“Concert”) pursuant to an asset purchase agreement that was entered into in March 2017 (the “Concert Agreement”). CTP-656 is an investigational CFTR potentiator that has the potential to be used as part of future once-daily combination regimens of CFTR modulators that treat the underlying cause of CF. As part of the Concert Agreement, Vertex paid Concert $160 million in cash for all worldwide development and commercialization rights to CTP-656. If CTP-656 is approved as part of a combination regimen to treat CF, Concert could receive up to an additional $90 million in milestones based on regulatory approval in the U.S. and reimbursement in the UK, Germany or France. There was no accounting impact relating to this agreement during the three and six months ended June 30, 2017. In the third quarter of 2017, the Company expects to record the $160 million payment as a research and development expense. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic net income (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 income (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 following table sets forth the computation of basic and diluted net income (loss) per share for the periods ended: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands, except per share amounts) Basic net income (loss) attributable to Vertex per common share calculation: Net income (loss) attributable to Vertex common shareholders $ 17,996 $ (64,525 ) $ 265,752 $ (106,156 ) Less: Undistributed earnings allocated to participating securities (23 ) — (387 ) — Net income (loss) attributable to Vertex common shareholders—basic $ 17,973 $ (64,525 ) $ 265,365 $ (106,156 ) Basic weighted-average common shares outstanding 247,521 244,482 246,782 244,124 Basic net income (loss) attributable to Vertex per common share $ 0.07 $ (0.26 ) $ 1.08 $ (0.43 ) Diluted net income (loss) attributable to Vertex per common share calculation: Net income (loss) attributable to Vertex common shareholders $ 17,996 $ (64,525 ) $ 265,752 $ (106,156 ) Less: Undistributed earnings allocated to participating securities (23 ) — (382 ) — Net income (loss) attributable to Vertex common shareholders—diluted $ 17,973 $ (64,525 ) $ 265,370 $ (106,156 ) Weighted-average shares used to compute basic net income (loss) per common share 247,521 244,482 246,782 244,124 Effect of potentially dilutive securities: Stock options 2,787 — 2,407 — Restricted stock and restricted stock units 1,264 — 958 — Other 63 — 52 — Weighted-average shares used to compute diluted net income (loss) per common share 251,635 244,482 250,199 244,124 Diluted net income (loss) attributable to Vertex per common share $ 0.07 $ (0.26 ) $ 1.06 $ (0.43 ) The Company did not include the securities in the following table in the computation of the dilutive net income (loss) per share attributable to Vertex common shareholders calculations because the effect would have been anti-dilutive during each period: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands) Stock options 3,112 12,231 7,065 12,231 Unvested restricted stock and restricted stock units 6 3,506 32 3,506 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2017 | |
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 June 30, 2017 , the Company’s investments were primarily in money market funds, corporate equity securities, corporate debt securities and commercial paper. As of June 30, 2017 , all of the Company’s financial assets that were subject to fair value measurements were valued using observable inputs. The Company’s financial assets valued based on Level 1 inputs consisted of money market funds, corporate debt securities, commercial paper and corporate equity securities. The Company’s financial assets valued based on Level 2 inputs consisted of corporate debt securities and commercial paper, which consisted of investments in highly-rated investment-grade corporations. The following table sets forth the Company’s financial assets (excluding VIE cash and cash equivalents, which are recorded as Restricted cash and cash equivalents (VIE)) and liabilities subject to fair value measurements: Fair Value Measurements as of June 30, 2017 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 $ 318,411 $ 318,411 $ — $ — Commercial paper 5,996 — 5,996 — Marketable securities: Corporate equity securities 51,049 51,049 — — Corporate debt securities 291,124 — 291,124 — Commercial paper 103,347 — 103,347 — Prepaid and other current assets: Foreign currency forward contracts 985 — 985 — Total financial assets $ 770,912 $ 369,460 $ 401,452 $ — Financial instruments carried at fair value (liability position): Other liabilities, current portion: Foreign currency forward contracts $ (8,067 ) $ — $ (8,067 ) $ — Other liabilities, excluding current portion: Foreign currency forward contracts (1,435 ) — (1,435 ) — Total financial liabilities $ (9,502 ) $ — $ (9,502 ) $ — Fair Value Measurements as of December 31, 2016 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 ) $ — The Company’s VIEs invested in cash equivalents consisting of money market funds of $62.6 million as of June 30, 2017 , 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 consist of milestone, royalty and option payments , which are valued based on Level 3 inputs. Please refer to Note C, “Collaborative Arrangements,” for further information. |
Marketable Securities
Marketable Securities | 6 Months Ended |
Jun. 30, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Marketable Securities | Marketable Securities A summary of the Company’s cash, cash equivalents and marketable securities is shown below: Amortized Cost Gross Gross Fair Value (in thousands) As of June 30, 2017 Cash and cash equivalents: Cash and money market funds $ 1,217,134 $ — $ — $ 1,217,134 Commercial paper 5,996 — — 5,996 Total cash and cash equivalents $ 1,223,130 $ — $ — $ 1,223,130 Marketable securities: Corporate equity securities 43,213 7,836 — 51,049 Commercial paper (matures within 1 year) 103,386 1 (40 ) 103,347 Corporate debt securities (matures within 1 year) 218,216 4 (143 ) 218,077 Corporate debt securities (matures after 1 year) 73,115 2 (70 ) 73,047 Total marketable securities $ 437,930 $ 7,843 $ (253 ) $ 445,520 Total cash, cash equivalents and marketable securities $ 1,661,060 $ 7,843 $ (253 ) $ 1,668,650 As of 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 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 The Company has a limited number of marketable securities in insignificant loss positions as of June 30, 2017 , which the Company does not intend to sell and has concluded it will not be required to sell before recovery of the amortized costs of the investment at maturity. There were no charges recorded for other-than-temporary declines in fair value of marketable securities nor gross realized gains or losses recognized in the three and six months ended June 30, 2017 and 2016 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) A summary of the Company’s changes in accumulated other comprehensive income (loss) by component is shown below: Foreign Currency Translation Adjustment Unrealized Holding Gains (Losses) on Marketable Securities, Net of Tax Unrealized Gains (Losses) on Foreign Currency Forward Contracts, Net of Tax Total (in thousands) Balance at December 31, 2016 $ (7,862 ) $ 17,521 $ 11,514 $ 21,173 Other comprehensive loss before reclassifications (7,253 ) (13,747 ) (17,215 ) (38,215 ) Amounts reclassified from accumulated other comprehensive loss — — (4,711 ) (4,711 ) Net current period other comprehensive (loss) income $ (7,253 ) $ (13,747 ) $ (21,926 ) $ (42,926 ) Balance at June 30, 2017 $ (15,115 ) $ 3,774 $ (10,412 ) $ (21,753 ) Foreign Currency Translation Adjustment Unrealized Holding Gains on Marketable Securities Unrealized Gains (Losses) on Foreign Currency Forward Contracts, Net of Tax Total (in thousands) Balance at December 31, 2015 $ (2,080 ) $ 126 $ 3,778 $ 1,824 Other comprehensive (loss) income before reclassifications (5,201 ) 200 1,847 (3,154 ) Amounts reclassified from accumulated other comprehensive loss — — (2,060 ) (2,060 ) Net current period other comprehensive (loss) income $ (5,201 ) $ 200 $ (213 ) $ (5,214 ) Balance at June 30, 2016 $ (7,281 ) $ 326 $ 3,565 $ (3,390 ) |
Hedging
Hedging | 6 Months Ended |
Jun. 30, 2017 | |
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 U.S. 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 June 30, 2017 , 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 June 30, 2017 As of December 31, 2016 Foreign Currency (in thousands) Euro $ 209,800 $ 164,368 British pound sterling 71,917 65,237 Australian dollar 28,680 23,776 Total foreign currency forward contracts $ 310,397 $ 253,381 The following table summarizes the fair value of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges under GAAP included on the Company’s condensed consolidated balance sheets: As of June 30, 2017 Assets Liabilities Classification Fair Value Classification Fair Value (in thousands) Prepaid and other current assets $ 985 Other liabilities, current portion $ (8,067 ) Other assets — Other liabilities, excluding current portion (1,435 ) Total assets $ 985 Total liabilities $ (9,502 ) 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 ) The following table summarizes the potential effect of offsetting derivatives by type of financial instrument on the Company’s condensed consolidated balance sheets: As of June 30, 2017 Gross Amounts Recognized Gross Amounts Offset Gross Amounts Presented Gross Amounts Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 985 $ — $ 985 $ (985 ) $ — Total liabilities $ (9,502 ) $ — $ (9,502 ) $ 985 $ (8,517 ) As of December 31, 2016 Gross Amounts Recognized Gross Amounts Offset Gross Amounts Presented Gross Amounts Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 15,593 $ — $ 15,593 $ (144 ) $ 15,449 Total liabilities $ (144 ) $ — $ (144 ) $ 144 $ — |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: As of June 30, 2017 As of December 31, 2016 (in thousands) Raw materials $ 13,876 $ 6,348 Work-in-process 63,116 56,672 Finished goods 15,271 14,584 Total $ 92,263 $ 77,604 Based on its evaluation of, among other factors, information regarding tezacaftor's safety and efficacy, the Company has capitalized $4.9 million of inventory costs for tezacaftor manufactured in preparation for its potential product launch as of June 30, 2017 . In periods prior, the Company expensed costs associated with tezacaftor’s raw materials and work-in-process as a development expense. The Company submitted a New Drug Application to the United States Food and Drug Administration and a Marketing Authorization Application to the European Medicines Agency for tezacaftor in combination with ivacaftor. The Company plans to continue to monitor the status of the tezacaftor regulatory process and the other factors used to determine whether or not to capitalize the tezacaftor inventory and, if there are significant negative developments regarding tezacaftor, the Company could be required to impair previously capitalized costs. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets As of June 30, 2017 and December 31, 2016 , in-process research and development intangible assets of $284.3 million were recorded on the Company’s condensed consolidated balance sheet. In 2015, the Company recorded an in-process research development intangible asset of $255.3 million related 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. In 2014, the Company recorded an in-process research development intangible asset of $29.0 million related to VX-210 that is licensed by BioAxone to the Company. Goodwill As of June 30, 2017 and December 31, 2016 , goodwill of $50.4 million was recorded on the Company’s condensed consolidated balance sheet. |
Long-term Obligations
Long-term Obligations | 6 Months Ended |
Jun. 30, 2017 | |
Long-term Debt and Capital Lease Obligations [Abstract] | |
Long-term Obligations | Long-term Obligations Fan Pier Leases In 2011, the Company entered into two lease agreements, pursuant to which the Company leases approximately 1.1 million square feet of office and laboratory space in two buildings (the “Fan Pier Buildings”) at Fan Pier in Boston, Massachusetts (the “Fan Pier Leases”). The Company commenced lease payments in December 2013, and will make lease payments pursuant to the Fan Pier Leases through December 2028. The Company has an option to extend the term of the Fan Pier Leases for an additional ten years . Because the Company was involved in the construction project, the Company was deemed for accounting purposes to be the owner of the Fan Pier Buildings during the construction period and recorded project construction costs incurred by the landlord. Upon completion of the Fan Pier 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 Fan Pier Buildings were constructed. The portion of the lease obligations allocated to the land is treated as an operating lease that commenced in 2011. Property and equipment, net, included $482.4 million and $489.0 million as of June 30, 2017 and December 31, 2016 , respectively, related to construction costs for the Fan Pier Buildings. The carrying value of the Company’s lease agreement liability for the Fan Pier Buildings was $472.4 million and $472.6 million as of June 30, 2017 and December 31, 2016 , 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 (the “San Diego Building”). Pursuant to this agreement, the Company agreed to lease approximately 170,000 square feet of office and laboratory space in a building to be built in San Diego, California. The lease will commence upon completion of the building, scheduled for the first half of 2018, and will extend for 16 years from the commencement date. Pursuant to the lease agreement, during the initial 16 -year term, the Company will pay an average of approximately $10.2 million per year in aggregate rent, exclusive of operating expenses. The Company has the option to extend the lease term for up to two additional five -year terms. 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. Property and equipment, net, included $57.1 million and $15.0 million as of June 30, 2017 and December 31, 2016 , respectively, related to construction costs for the San Diego Building. The carrying value of the Company’s lease agreement liability for the San Diego Building was $50.2 million and $12.6 million as of June 30, 2017 and December 31, 2016 , respectively. 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”) and was repaid in February 2017. 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 then outstanding indebtedness under the Macquarie Loan (as defined below). 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 In July 2014, the Company entered into a credit agreement with the lenders party thereto, and Macquarie US Trading LLC (“Macquarie”), as administrative agent. The credit agreement provided for a $300.0 million senior secured term loan (the “Macquarie Loan”). On October 13, 2016, the Company terminated and repaid all outstanding obligations under the Macquarie Loan. The Macquarie Loan initially bore interest at a rate of 7.2% per annum, which was reduced to 6.2% per annum based on the FDA’s approval of ORKAMBI. The Term Loan bore interest at a rate of LIBOR plus 5.0% per annum during the third year of the term. The Company incurred $5.3 million in fees paid to Macquarie that were recorded as a discount on the Macquarie Loan and were recorded as interest expense using the effective interest method over the term of the loan in the Company’s condensed consolidated statements of operations . |
Stock-based Compensation Expens
Stock-based Compensation Expense | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation Expense | Stock-based Compensation Expense During the three and six months ended June 30, 2017 and 2016 , the Company recognized the following stock-based compensation expense: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands) Stock-based compensation expense by type of award: Stock options $ 27,915 $ 31,826 $ 54,896 $ 58,086 Restricted stock and restricted stock units 43,906 29,608 84,651 57,141 ESPP share issuances 2,246 1,436 4,310 3,960 Less stock-based compensation expense capitalized to inventories (1,485 ) (928 ) (2,293 ) (1,773 ) Total stock-based compensation included in costs and expenses $ 72,582 $ 61,942 $ 141,564 $ 117,414 Stock-based compensation expense by line item: Research and development expenses $ 43,832 $ 40,640 $ 88,669 $ 75,088 Sales, general and administrative expenses 28,750 21,302 52,895 42,326 Total stock-based compensation included in costs and expenses $ 72,582 $ 61,942 $ 141,564 $ 117,414 The following table sets forth the Company’s unrecognized stock-based compensation expense by type of award and the weighted-average period over which that expense is expected to be recognized: As of June 30, 2017 Unrecognized Expense Weighted-average (in thousands) (in years) Type of award: Stock options $ 165,047 2.51 Restricted stock and restricted stock units $ 249,474 2.41 ESPP share issuances $ 5,064 0.62 The following table summarizes information about stock options outstanding and exercisable at June 30, 2017 : 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–$20.00 129 0.61 $ 18.93 129 $ 18.93 $20.01–$40.00 943 2.57 $ 34.74 943 $ 34.74 $40.01–$60.00 1,233 5.15 $ 48.58 1,233 $ 48.58 $60.01–$80.00 1,042 6.69 $ 75.83 784 $ 75.63 $80.01–$100.00 5,336 8.45 $ 89.52 1,733 $ 89.89 $100.01–$120.00 1,437 7.56 $ 109.35 786 $ 109.27 $120.01–$131.89 1,416 8.03 $ 130.34 763 $ 130.00 Total 11,536 7.21 $ 86.12 6,371 $ 77.74 |
Other Arrangements
Other Arrangements | 6 Months Ended |
Jun. 30, 2017 | |
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 June 30, 2017 , the Company had $9.6 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. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company is subject to United States federal, state, and foreign income taxes. For the three and six months ended June 30, 2017 , the Company recorded a provision for income taxes of $4.3 million and $8.3 million , respectively, which included a provision of $8.1 million and $8.5 million , respectively, related to the Company’s VIEs’ income tax provision. The Company has no liability for taxes payable by the Company’s VIEs and the income tax provision and related liability have been allocated to noncontrolling interest (VIE). For the three and six months ended June 30, 2016 , the Company recorded a provision for income taxes of $18.1 million and $23.6 million , respectively, which included a provision of $17.5 million and $20.6 million , respectively, related to the Company’s VIEs’ income tax provision. As of June 30, 2017 and December 31, 2016 , the Company did not have unrecognized tax benefits. The Company recognizes interest and penalties related to income taxes as a component of income tax expense. As of June 30, 2017 , no interest and penalties have been accrued. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company did not recognize any material interest or penalties related to uncertain tax positions as of June 30, 2017 and December 31, 2016 . The Company continues to maintain a valuation allowance against certain deferred tax assets where it is more likely than not that the deferred tax asset will not be realized because of its extended history of annual losses. As described in Footnote A, the Company adopted Accounting Standards Update (ASU) 2016-09, during the six month period ended June 30, 2017. The ASU eliminates additional paid in capital (“APIC”) pools and requires excess tax benefits and tax deficiencies to be recorded in the condensed consolidated statement of operations when the awards vest or are settled. Amendments related to accounting for excess tax benefits have been adopted prospectively resulting in a tax benefit of $30.4 million and $30.8 million for the three and six months ended June 30, 2017, respectively. In connection with the adoption of this new standard, the Company recorded a cumulative-effect adjustment of $410.8 million as of January 1, 2017 to accumulated deficit and deferred tax assets, with an equal offsetting adjustment to the Company’s valuation allowance. In addition, the Company has recorded $9.4 million related to the impact from adoption of the provisions related to forfeiture rates to accumulated deficit. This change also increased the Company’s deferred tax assets by $3.4 million that is offset by an increase to the valuation allowance in the same amount. 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. At June 30, 2017 , foreign earnings, which were not significant, have been retained indefinitely by foreign subsidiary companies for reinvestment; therefore, no provision has been made for income taxes that would be payable upon the distribution of such earnings, and it would not be practicable to determine the amount of the related unrecognized deferred income tax liability. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company would be subject to United States federal income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries. |
Restructuring Liabilities
Restructuring Liabilities | 6 Months Ended |
Jun. 30, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Liabilities | Restructuring Liabilities Research and Development Restructuring In February 2017, the Company decided to consolidate its research activities into its Boston, Milton Park and San Diego locations and to close the research site in Canada. As a result, the Company is in the process of closing one of its research sites. In connection with this decision, approximately 70 positions were affected. The Company estimates that it will incur aggregate restructuring charges of approximately $12.4 million , including $6.9 million for employee salary, severance and benefit costs, $2.2 million in assets associated with the restructuring that have become impaired and $3.3 million for other costs primarily related to the Company’s exit from the facility. The restructuring charge and other activities recorded during the the three and six months ended June 30, 2017 and the related liability balance as of June 30, 2017 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2017 (in thousands) Liability, beginning of the period $ 3,727 $ — Restructuring expense 3,222 12,440 Cash payments (3,861 ) (7,119 ) Asset impairments and other non-cash items 419 (1,814 ) Liability, end of the period $ 3,507 $ 3,507 2003 Kendall Restructuring In 2003, the Company adopted a plan to restructure its operations to coincide with its increasing internal emphasis on advancing drug candidates through clinical development to commercialization. The restructuring liability relates to specialized laboratory and office space that is leased to the Company pursuant to a 15 -year lease that terminates in 2018. The Company has not used more than 50% of this space since it adopted the plan to restructure its operations in 2003. This unused laboratory and office space currently is subleased to third parties. The activities related to the restructuring liability for the three and six months ended June 30, 2017 and 2016 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands) Liability, beginning of the period $ 2,525 $ 7,224 $ 4,328 $ 7,944 Restructuring expense 342 (11 ) 827 192 Cash payments (3,695 ) (3,833 ) (8,959 ) (7,764 ) Cash received from subleases 2,818 3,008 5,794 6,016 Liability, end of the period $ 1,990 $ 6,388 $ 1,990 $ 6,388 Fan Pier Move Restructuring In connection with the relocation of its Massachusetts operations to Fan Pier in Boston, Massachusetts, which commenced in 2013, the Company is incurring restructuring charges related to its remaining lease obligations at its facilities in Cambridge, Massachusetts. The majority of these restructuring charges were recorded in the third quarter of 2014 upon decommissioning three facilities in Cambridge. During 2015, the Company terminated two of these lease agreements resulting in a credit to restructuring expense equal to the difference between the Company’s estimated future cash flows related to its lease obligations for these facilities and the termination payment paid to the Company’s landlord on the effective date of the termination. The third major facility included in this restructuring activity is 120,000 square feet of the Kendall Square Facility that the Company continued to use for its operations following its 2003 Kendall Restructuring. The rentable square footage in this portion of the Kendall Square Facility was subleased to a third party in February 2015. The Company will continue to incur charges through April 2018 related to the difference between the Company’s estimated future cash flows related to this portion of the Kendall Square Facility , which include an estimate for sublease income to be received from the Company’s sublessee and its actual cash flows. The Company discounted the estimated cash flows related to this restructuring activity at a discount rate of 9% . The activities related to the restructuring liability for the three and six months ended June 30, 2017 and 2016 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands) Liability, beginning of the period $ 1,995 $ 5,449 $ 3,626 $ 5,964 Restructuring expense (41 ) 149 255 382 Cash payments (2,911 ) (3,096 ) (7,316 ) (6,252 ) Cash received from subleases 2,478 2,361 4,956 4,769 Liability, end of the period $ 1,521 $ 4,863 $ 1,521 $ 4,863 Other Restructuring Activities The Company has engaged in several other restructuring activities that are unrelated to its Research and Development Restructuring, 2003 Kendall Restructuring and 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 remaining restructuring activities were completed in 2016. As such, there was no outstanding liability as of June 30, 2017 . The activities related to the Company’s other restructuring liabilities for the three and six months ended June 30, 2016 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2016 (in thousands) Liability, beginning of the period $ 1,262 $ 1,450 Restructuring expense 205 456 Cash payments (234 ) (673 ) Liability, end of the period $ 1,233 $ 1,233 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies 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 June 30, 2017 or December 31, 2016 . |
Basis of Presentation and Acc25
Basis of Presentation and Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared by Vertex Pharmaceuticals Incorporated (“Vertex” or the “Company”) in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The condensed consolidated financial statements reflect the operations of (i) the Company, (ii) its wholly-owned subsidiaries and (iii) consolidated variable interest entities (VIEs). All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. Certain information and footnote disclosures normally included in the Company’s annual financial statements have been condensed or omitted. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of the financial position and results of operations for the interim periods ended June 30, 2017 and 2016 . The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full fiscal year. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2016 , which are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 that was filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2017 (the “ 2016 Annual Report on Form 10-K”). |
Use of Estimates and Summary of Significant Accounting Policies | Use of Estimates and Summary of Significant Accounting Policies The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. Significant estimates in these condensed consolidated financial statements have been made in connection with the calculation of revenues, inventories, research and development expenses, stock-based compensation expense, restructuring expense, the fair value of intangible assets, goodwill, contingent consideration, noncontrolling interest, the consolidation of VIEs, leases, the fair value of cash flow hedges and the provision for or benefit from income taxes. The Company bases its estimates on historical experience and various other assumptions, including in certain circumstances future projections that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In 2014, the Financial Accounting Standards Board (“FASB”) issued new guidance applicable to revenue recognition that will be effective January 1, 2018. Early adoption was 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. Upon adoption, the Company will use the modified retrospective method. The Company continued its evaluation of the new guidance and the effect of adoption on the condensed consolidated financial statements. The Company’s project team progressed its review of existing customer contracts and current accounting policies to identify and assess the potential differences that would result from applying the requirements of the new standard. Based on the Company’s assessment performed to date, the new guidance could impact the Company’s accounting for product shipments to certain countries through early access programs, including the French early access programs, whereby the associated product has received regulatory approval but the reimbursement rate has not been finalized, and could impact the Company’s accounting for certain reimbursement agreements that the Company plans to negotiate in the second half of 2017. The Company is also in the process of implementing appropriate changes to its controls to support revenue recognition and additional revenue-related disclosures under the new standard. In 2016, the FASB issued amended guidance applicable to share-based compensation to employees that 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 amended guidance became effective for the Company during the first quarter of 2017. The amended guidance eliminates the requirement that excess tax benefits be realized as a reduction in current taxes payable before the associated tax benefit can be recognized as an increase in additional paid-in capital. This created approximately $410.8 million of deferred tax asset (“DTA”) relating to federal and state net operating losses (“NOLs”) that are fully reserved by an equal increase in valuation allowance. The Company recorded DTAs of approximately $404.7 million relating to Federal NOLs and approximately $6.1 million relating to State NOLs, both of which are offset by a full valuation allowance. Upon adoption, the Company also elected to change its accounting policy to account for forfeitures of options and awards as they occur. The change was applied on a modified retrospective basis with a cumulative effect adjustment to the Company’s accumulated deficit of $9.4 million , which increased the accumulated deficit as of January 1, 2017. This change also resulted in an increase to the DTA of $3.4 million , which is offset by a full valuation allowance. As a result, there was no cumulative-effect adjustment to accumulated deficit. The provisions related to the recognition of excess tax benefits in the income statement and classification in the statement of cash flows were adopted prospectively, and as such, the prior periods were not retrospectively adjusted. In 2016, the FASB issued amended guidance related to the recording of financial assets and financial liabilities. Under the amended guidance, equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) are to be measured at fair value with changes in fair value recognized in net income. However, an entity has the option to either measure equity investments without readily determinable fair values at fair value or at cost adjusted for changes in observable prices minus impairment. Changes in measurement under either alternative will be recognized in net income. The amended guidance is effective for the year-ending December 31, 2018. Early adoption is permitted. The Company expects the implementation of this standard to have an impact on its consolidated financial statements and related disclosures, as the Company held publicly traded equity investments as of June 30, 2017 as well as equity investments accounted for under the cost method. A cumulative-effect adjustment to the balance sheet will be recorded as of the beginning of the fiscal year of adoption. The implementation of this amended guidance is expected to increase volatility in net income as the volatility currently recorded in other comprehensive income related to changes in the fair market value of available-for-sale equity investments will be reflected in net income after adoption. 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 guidance requires entities 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 this guidance and determining the expected effect on its condensed consolidated financial statements. In 2016, the FASB issued amended guidance related to intra-entity transfers other than inventory. This guidance removes the current exception in GAAP prohibiting entities from recognizing current and deferred income tax expenses or benefits related to transfer of assets, other than inventory, within the consolidated entity. The current exception to defer the recognition of any tax impact on the transfer of inventory within the consolidated entity until it is sold to a third party remains unaffected. The amended guidance is effective for the year ending December 31, 2018. Early adoption is permitted. The Company is in the process of evaluating this guidance and determining the expected effect on its condensed consolidated financial statements. In 2017, the FASB issued amended guidance related to business combinations. The amended 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 early adopted this new guidance as of January 1, 2017 and will apply this new guidance to future acquisitions. In 2017, the FASB issued amended guidance related to measurements of goodwill. The amended guidance eliminates a step from the goodwill impairment test. Under the amended guidance, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity would recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. The amended guidance is effective for the year-ending December 31, 2020. Early adoption is permitted. The Company does not expect a significant effect on its condensed consolidated financial statements upon adoption of this new guidance. In 2017, the FASB issued amended guidance related to the scope of stock option modification accounting, to reduce diversity in practice and provide clarity regarding existing guidance. 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 does not expect the adoption of this guidance to have a material effect on its condensed consolidated financial statements and related disclosures. For a discussion of other recent accounting pronouncements please refer to Note A, “Nature of Business and Accounting Policies—Recent Accounting Pronouncements,” in the 2016 Annual Report on Form 10-K. |
Product Revenues, Net (Tables)
Product Revenues, Net (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Product Revenues [Abstract] | |
Schedule of product revenue allowances and reserve categories | The following table summarizes activity in each of the product revenue allowance and reserve categories for the six months ended June 30, 2017 : Trade Rebates, Product Other Total (in thousands) Balance at December 31, 2016 $ 2,568 $ 81,927 $ 3,492 $ 1,214 $ 89,201 Provision related to current period sales 11,941 69,669 1,777 9,224 92,611 Adjustments related to prior period sales (194 ) (3,268 ) (48 ) (145 ) (3,655 ) Credits/payments made (11,683 ) (58,121 ) (631 ) (6,966 ) (77,401 ) Balance at June 30, 2017 $ 2,632 $ 90,207 $ 4,590 $ 3,327 $ 100,756 |
Collaborative Arrangements an27
Collaborative Arrangements and Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of collaborative arrangement activity net loss attributable to noncontrolling interest | An aggregate summary of net income attributable to noncontrolling interest related to the Company’s VIEs for the three and six months ended June 30, 2017 and 2016 is as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands) (Income) loss attributable to noncontrolling interest before provision for income taxes and changes in fair value of contingent payments $ (18,045 ) $ 2,835 $ (16,498 ) $ 3,674 Provision for income taxes 8,132 17,511 8,523 20,573 Increase in fair value of contingent payments (3,260 ) (48,720 ) (6,990 ) (58,150 ) Net income attributable to noncontrolling interest $ (13,173 ) $ (28,374 ) $ (14,965 ) $ (33,903 ) |
Changes in fair value of contingent consideration | During the three and six months ended June 30, 2017 and 2016 , the increases in the fair value of the contingent payments related to the Company’s VIEs was as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands) Parion $ 3,260 $ 48,400 $ 6,090 $ 57,400 BioAxone — 320 900 750 |
Schedule of fair value of contingent consideration | The fair value of the contingent payments related to the Parion Agreement and the BioAxone Agreement as of the dates set forth in the table: June 30, 2017 December 31, 2016 (in thousands) Parion $ 244,890 $ 238,800 BioAxone 18,900 18,000 |
Schedule of collaborative arrangement summary of items related to variable interest entities | The following table summarizes items related to the Company’s VIEs included in the Company’s condensed consolidated balance sheets as of the dates set forth in the table: June 30, 2017 December 31, 2016 (in thousands) Restricted cash and cash equivalents (VIE) $ 64,628 $ 47,762 Prepaid expenses and other current assets 1,198 6,812 Intangible assets 284,340 284,340 Goodwill 19,391 19,391 Other assets 752 399 Accounts payable 702 415 Accrued expenses 4,118 1,330 Other liabilities, current portion 1,610 2,137 Deferred tax liability 134,305 131,446 Other liabilities, excluding current portion 300 300 Noncontrolling interest 195,958 181,609 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of earnings per share, basic and diluted | The following table sets forth the computation of basic and diluted net income (loss) per share for the periods ended: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands, except per share amounts) Basic net income (loss) attributable to Vertex per common share calculation: Net income (loss) attributable to Vertex common shareholders $ 17,996 $ (64,525 ) $ 265,752 $ (106,156 ) Less: Undistributed earnings allocated to participating securities (23 ) — (387 ) — Net income (loss) attributable to Vertex common shareholders—basic $ 17,973 $ (64,525 ) $ 265,365 $ (106,156 ) Basic weighted-average common shares outstanding 247,521 244,482 246,782 244,124 Basic net income (loss) attributable to Vertex per common share $ 0.07 $ (0.26 ) $ 1.08 $ (0.43 ) Diluted net income (loss) attributable to Vertex per common share calculation: Net income (loss) attributable to Vertex common shareholders $ 17,996 $ (64,525 ) $ 265,752 $ (106,156 ) Less: Undistributed earnings allocated to participating securities (23 ) — (382 ) — Net income (loss) attributable to Vertex common shareholders—diluted $ 17,973 $ (64,525 ) $ 265,370 $ (106,156 ) Weighted-average shares used to compute basic net income (loss) per common share 247,521 244,482 246,782 244,124 Effect of potentially dilutive securities: Stock options 2,787 — 2,407 — Restricted stock and restricted stock units 1,264 — 958 — Other 63 — 52 — Weighted-average shares used to compute diluted net income (loss) per common share 251,635 244,482 250,199 244,124 Diluted net income (loss) attributable to Vertex per common share $ 0.07 $ (0.26 ) $ 1.06 $ (0.43 ) |
Potential gross common equivalent shares | The Company did not include the securities in the following table in the computation of the dilutive net income (loss) per share attributable to Vertex common shareholders calculations because the effect would have been anti-dilutive during each period: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands) Stock options 3,112 12,231 7,065 12,231 Unvested restricted stock and restricted stock units 6 3,506 32 3,506 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial assets subject to fair value measurements (excluding VIE cash and cash equivalents, which are recorded as Restricted cash and cash equivalents (VIE)) | The following table sets forth the Company’s financial assets (excluding VIE cash and cash equivalents, which are recorded as Restricted cash and cash equivalents (VIE)) and liabilities subject to fair value measurements: Fair Value Measurements as of June 30, 2017 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 $ 318,411 $ 318,411 $ — $ — Commercial paper 5,996 — 5,996 — Marketable securities: Corporate equity securities 51,049 51,049 — — Corporate debt securities 291,124 — 291,124 — Commercial paper 103,347 — 103,347 — Prepaid and other current assets: Foreign currency forward contracts 985 — 985 — Total financial assets $ 770,912 $ 369,460 $ 401,452 $ — Financial instruments carried at fair value (liability position): Other liabilities, current portion: Foreign currency forward contracts $ (8,067 ) $ — $ (8,067 ) $ — Other liabilities, excluding current portion: Foreign currency forward contracts (1,435 ) — (1,435 ) — Total financial liabilities $ (9,502 ) $ — $ (9,502 ) $ — Fair Value Measurements as of December 31, 2016 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 ) $ — |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Cash and Cash Equivalents [Abstract] | |
Summary of cash, cash equivalents and marketable securities | A summary of the Company’s cash, cash equivalents and marketable securities is shown below: Amortized Cost Gross Gross Fair Value (in thousands) As of June 30, 2017 Cash and cash equivalents: Cash and money market funds $ 1,217,134 $ — $ — $ 1,217,134 Commercial paper 5,996 — — 5,996 Total cash and cash equivalents $ 1,223,130 $ — $ — $ 1,223,130 Marketable securities: Corporate equity securities 43,213 7,836 — 51,049 Commercial paper (matures within 1 year) 103,386 1 (40 ) 103,347 Corporate debt securities (matures within 1 year) 218,216 4 (143 ) 218,077 Corporate debt securities (matures after 1 year) 73,115 2 (70 ) 73,047 Total marketable securities $ 437,930 $ 7,843 $ (253 ) $ 445,520 Total cash, cash equivalents and marketable securities $ 1,661,060 $ 7,843 $ (253 ) $ 1,668,650 As of 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 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 |
Accumulated Other Comprehensi31
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | A summary of the Company’s changes in accumulated other comprehensive income (loss) by component is shown below: Foreign Currency Translation Adjustment Unrealized Holding Gains (Losses) on Marketable Securities, Net of Tax Unrealized Gains (Losses) on Foreign Currency Forward Contracts, Net of Tax Total (in thousands) Balance at December 31, 2016 $ (7,862 ) $ 17,521 $ 11,514 $ 21,173 Other comprehensive loss before reclassifications (7,253 ) (13,747 ) (17,215 ) (38,215 ) Amounts reclassified from accumulated other comprehensive loss — — (4,711 ) (4,711 ) Net current period other comprehensive (loss) income $ (7,253 ) $ (13,747 ) $ (21,926 ) $ (42,926 ) Balance at June 30, 2017 $ (15,115 ) $ 3,774 $ (10,412 ) $ (21,753 ) Foreign Currency Translation Adjustment Unrealized Holding Gains on Marketable Securities Unrealized Gains (Losses) on Foreign Currency Forward Contracts, Net of Tax Total (in thousands) Balance at December 31, 2015 $ (2,080 ) $ 126 $ 3,778 $ 1,824 Other comprehensive (loss) income before reclassifications (5,201 ) 200 1,847 (3,154 ) Amounts reclassified from accumulated other comprehensive loss — — (2,060 ) (2,060 ) Net current period other comprehensive (loss) income $ (5,201 ) $ 200 $ (213 ) $ (5,214 ) Balance at June 30, 2016 $ (7,281 ) $ 326 $ 3,565 $ (3,390 ) |
Hedging (Tables)
Hedging (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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 June 30, 2017 As of December 31, 2016 Foreign Currency (in thousands) Euro $ 209,800 $ 164,368 British pound sterling 71,917 65,237 Australian dollar 28,680 23,776 Total foreign currency forward contracts $ 310,397 $ 253,381 |
Schedule of Foreign Exchange Contracts | The following table summarizes the fair value of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges under GAAP included on the Company’s condensed consolidated balance sheets: As of June 30, 2017 Assets Liabilities Classification Fair Value Classification Fair Value (in thousands) Prepaid and other current assets $ 985 Other liabilities, current portion $ (8,067 ) Other assets — Other liabilities, excluding current portion (1,435 ) Total assets $ 985 Total liabilities $ (9,502 ) 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 ) |
Derivatives Offsetting | The following table summarizes the potential effect of offsetting derivatives by type of financial instrument on the Company’s condensed consolidated balance sheets: As of June 30, 2017 Gross Amounts Recognized Gross Amounts Offset Gross Amounts Presented Gross Amounts Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 985 $ — $ 985 $ (985 ) $ — Total liabilities $ (9,502 ) $ — $ (9,502 ) $ 985 $ (8,517 ) As of December 31, 2016 Gross Amounts Recognized Gross Amounts Offset Gross Amounts Presented Gross Amounts Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 15,593 $ — $ 15,593 $ (144 ) $ 15,449 Total liabilities $ (144 ) $ — $ (144 ) $ 144 $ — |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories by Type | Inventories consisted of the following: As of June 30, 2017 As of December 31, 2016 (in thousands) Raw materials $ 13,876 $ 6,348 Work-in-process 63,116 56,672 Finished goods 15,271 14,584 Total $ 92,263 $ 77,604 |
Stock-based Compensation Expe34
Stock-based Compensation Expense (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation expense by line item | During the three and six months ended June 30, 2017 and 2016 , the Company recognized the following stock-based compensation expense: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands) Stock-based compensation expense by type of award: Stock options $ 27,915 $ 31,826 $ 54,896 $ 58,086 Restricted stock and restricted stock units 43,906 29,608 84,651 57,141 ESPP share issuances 2,246 1,436 4,310 3,960 Less stock-based compensation expense capitalized to inventories (1,485 ) (928 ) (2,293 ) (1,773 ) Total stock-based compensation included in costs and expenses $ 72,582 $ 61,942 $ 141,564 $ 117,414 Stock-based compensation expense by line item: Research and development expenses $ 43,832 $ 40,640 $ 88,669 $ 75,088 Sales, general and administrative expenses 28,750 21,302 52,895 42,326 Total stock-based compensation included in costs and expenses $ 72,582 $ 61,942 $ 141,564 $ 117,414 |
Unrecognized stock-based compensation expense, net of estimated forfeitures | The following table sets forth the Company’s unrecognized stock-based compensation expense by type of award and the weighted-average period over which that expense is expected to be recognized: As of June 30, 2017 Unrecognized Expense Weighted-average (in thousands) (in years) Type of award: Stock options $ 165,047 2.51 Restricted stock and restricted stock units $ 249,474 2.41 ESPP share issuances $ 5,064 0.62 |
Stock options outstanding and exercisable | The following table summarizes information about stock options outstanding and exercisable at June 30, 2017 : 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–$20.00 129 0.61 $ 18.93 129 $ 18.93 $20.01–$40.00 943 2.57 $ 34.74 943 $ 34.74 $40.01–$60.00 1,233 5.15 $ 48.58 1,233 $ 48.58 $60.01–$80.00 1,042 6.69 $ 75.83 784 $ 75.63 $80.01–$100.00 5,336 8.45 $ 89.52 1,733 $ 89.89 $100.01–$120.00 1,437 7.56 $ 109.35 786 $ 109.27 $120.01–$131.89 1,416 8.03 $ 130.34 763 $ 130.00 Total 11,536 7.21 $ 86.12 6,371 $ 77.74 |
Restructuring Liabilities (Tabl
Restructuring Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Research and Development Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Activity related to restructuring liability | The restructuring charge and other activities recorded during the the three and six months ended June 30, 2017 and the related liability balance as of June 30, 2017 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2017 (in thousands) Liability, beginning of the period $ 3,727 $ — Restructuring expense 3,222 12,440 Cash payments (3,861 ) (7,119 ) Asset impairments and other non-cash items 419 (1,814 ) Liability, end of the period $ 3,507 $ 3,507 |
Kendall Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Activity related to restructuring liability | The activities related to the restructuring liability for the three and six months ended June 30, 2017 and 2016 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands) Liability, beginning of the period $ 2,525 $ 7,224 $ 4,328 $ 7,944 Restructuring expense 342 (11 ) 827 192 Cash payments (3,695 ) (3,833 ) (8,959 ) (7,764 ) Cash received from subleases 2,818 3,008 5,794 6,016 Liability, end of the period $ 1,990 $ 6,388 $ 1,990 $ 6,388 |
Fan Pier Move Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Activity related to restructuring liability | The activities related to the restructuring liability for the three and six months ended June 30, 2017 and 2016 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 (in thousands) Liability, beginning of the period $ 1,995 $ 5,449 $ 3,626 $ 5,964 Restructuring expense (41 ) 149 255 382 Cash payments (2,911 ) (3,096 ) (7,316 ) (6,252 ) Cash received from subleases 2,478 2,361 4,956 4,769 Liability, end of the period $ 1,521 $ 4,863 $ 1,521 $ 4,863 |
Other Restructuring | |
Restructuring Cost and Reserve [Line Items] | |
Activity related to restructuring liability | The activities related to the Company’s other restructuring liabilities for the three and six months ended June 30, 2016 were as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2016 (in thousands) Liability, beginning of the period $ 1,262 $ 1,450 Restructuring expense 205 456 Cash payments (234 ) (673 ) Liability, end of the period $ 1,233 $ 1,233 |
Basis of Presentation and Acc36
Basis of Presentation and Accounting Policies (Details) | 6 Months Ended | ||
Jun. 30, 2017segment | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Accounting Policies [Abstract] | |||
Number of operating segments | segment | 1 | ||
Accounting Standards Update 2016-09, Excess Tax Benefit | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating loss carryforwards | $ 410,800,000 | $ 410,800,000 | |
Deferred income tax assets, net | 3,400,000 | ||
Accounting Standards Update 2016-09, Forfeiture Rate Component | Accumulated Deficit | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of new accounting principle in period of adoption | 9,371,000 | ||
Accounting Standards Update 2016-09, Forfeiture Rate Component | Additional Paid-in Capital | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of new accounting principle in period of adoption | (9,371,000) | ||
Accounting Standards Update 2016-09 | Accumulated Deficit | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect of new accounting principle in period of adoption | $ 0 | ||
Domestic Tax Authority | Accounting Standards Update 2016-09, Excess Tax Benefit | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating loss carryforwards | 404,700,000 | ||
State and Local Jurisdiction | Accounting Standards Update 2016-09, Excess Tax Benefit | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating loss carryforwards | $ 6,100,000 |
Product Revenues, Net (Details)
Product Revenues, Net (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Customer deposits | $ 147,686 | $ 73,416 |
Product Revenue Allowance and Reserve [Roll Forward] | ||
Balance at December 31, 2016 | 89,201 | |
Provision related to current period sales | 92,611 | |
Adjustments related to prior period sales | (3,655) | |
Credits/payments made | (77,401) | |
Balance at June 30, 2017 | 100,756 | |
Trade Allowances | ||
Product Revenue Allowance and Reserve [Roll Forward] | ||
Balance at December 31, 2016 | 2,568 | |
Provision related to current period sales | 11,941 | |
Adjustments related to prior period sales | (194) | |
Credits/payments made | (11,683) | |
Balance at June 30, 2017 | 2,632 | |
Rebates, Chargebacks and Discounts | ||
Product Revenue Allowance and Reserve [Roll Forward] | ||
Balance at December 31, 2016 | 81,927 | |
Provision related to current period sales | 69,669 | |
Adjustments related to prior period sales | (3,268) | |
Credits/payments made | (58,121) | |
Balance at June 30, 2017 | 90,207 | |
Product Returns | ||
Product Revenue Allowance and Reserve [Roll Forward] | ||
Balance at December 31, 2016 | 3,492 | |
Provision related to current period sales | 1,777 | |
Adjustments related to prior period sales | (48) | |
Credits/payments made | (631) | |
Balance at June 30, 2017 | 4,590 | |
Other Incentives | ||
Product Revenue Allowance and Reserve [Roll Forward] | ||
Balance at December 31, 2016 | 1,214 | |
Provision related to current period sales | 9,224 | |
Adjustments related to prior period sales | (145) | |
Credits/payments made | (6,966) | |
Balance at June 30, 2017 | 3,327 | |
Cystic Fibrosis Foundation Therapeutics Incorporated | ||
Valuation and Qualifying Accounts Disclosure [Line Items] | ||
Customer deposits | $ 147,700 |
Collaborative Arrangements an38
Collaborative Arrangements and Acquisitions - Cystic Fibrosis Foundation Therapeutics Incorporated (Details) - Cystic Fibrosis Foundation Therapeutics Incorporated - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Oct. 31, 2016 | Mar. 31, 2016 | Jun. 30, 2017 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Milestone payments | $ 13,900,000 | ||
Additional milestone payments | $ 0 | ||
Collaborative funding | $ 75,000,000 | ||
Additional collaborative funding | $ 6,000,000 |
Collaborative Arrangements an39
Collaborative Arrangements and Acquisitions - CRISPR Therapeutics AG (Details) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Oct. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($)target | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Fair Value | $ 1,668,650,000 | $ 1,434,557,000 | |||
Gross unrealized gains | 7,843,000 | $ 21,422,000 | |||
CRISPR Therapeutics AG | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Right to license, number of targets (up to) | target | 6 | ||||
Collaborative arrangement, up-front payment | $ 75,000,000 | ||||
Collaborative arrangement, investment in collaborative partner, pursuant to convertible loan agreement | 30,000,000 | ||||
Collaborative funding | 75,000,000 | ||||
Collaborative arrangement, development and regulatory potential milestone payments maximum | $ 420,000,000 | ||||
Prior to marketing approval, time period of notice required to terminate (in days) | 90 days | ||||
Subsequent to marketing approval, time period of notice required to terminate (in days) | 270 days | ||||
Preferred Stock | CRISPR Therapeutics AG | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Collaborative arrangement, investment in collaborative partner, pursuant to convertible loan agreement | $ 3,100,000 | ||||
Common Stock | CRISPR Therapeutics AG | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Collaborative arrangement, investment in collaborative partner, pursuant to convertible loan agreement | $ 10,000,000 | ||||
Fair Value | 51,000,000 | ||||
Gross unrealized gains | $ 7,836,000 |
Collaborative Arrangements an40
Collaborative Arrangements and Acquisitions - Merck KGaA (Details) | Jan. 10, 2017USD ($)pre-clinical_stage_programclinical-stage_programdevelopment_program | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Jun. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Collaborative revenues | $ 27,286,000 | $ 675,000 | $ 259,831,000 | $ 749,000 | ||
Merck KGaA | ||||||
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 | |||||
Collaborative arrangement, up-front payment | $ 230,000,000 | |||||
Collaborative revenues | $ 6,100,000 | $ 193,600,000 | $ 7,600,000 | |||
Collaborative revenues, related to upfront payment upon delivery of license and to research and development transition activities | 231,700,000 | |||||
Time period of notice required to terminate | 90 days | |||||
Time period of notice required to terminate after a product has received marketing approval | 180 days | |||||
German Tax Authority | Merck KGaA | ||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Collaborative revenues, tax withholding | $ 36,400,000 |
Collaborative Arrangements an41
Collaborative Arrangements and Acquisitions - Parion Sciences, Inc. (Details) - USD ($) | Jun. 04, 2015 | Jun. 30, 2015 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Collaborative revenues | $ 27,286,000 | $ 675,000 | $ 259,831,000 | $ 749,000 | ||||
Provision for income taxes | 4,337,000 | 18,130,000 | 8,322,000 | 23,615,000 | ||||
Business Combination, Consideration Transferred [Abstract] | ||||||||
Intangible assets | 284,340,000 | 284,340,000 | $ 284,340,000 | |||||
Parion Sciences, Inc. | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Collaborative arrangement, up-front payment | $ 80,000,000 | $ 80,000,000 | ||||||
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 | |||||||
Collaborative revenues | 20,000,000 | |||||||
Provision for income taxes | 7,400,000 | |||||||
Business Combination, Consideration Transferred [Abstract] | ||||||||
Intangible assets | 255,300,000 | |||||||
Noncontrolling interest, fair value | 164,300,000 | |||||||
Deferred tax liabilities, net | 91,000,000 | |||||||
Other liabilities / assets, net | $ 10,500,000 | |||||||
ENaC Inhibitors in CF | Parion Sciences, Inc. | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Collaborative arrangement, development and regulatory potential milestone payments maximum | $ 490,000,000 | |||||||
Collaborative arrangement regulatory potential milestone payments maximum, global filling and approval | 360,000,000 | |||||||
Enac Inhibitors in Non Cf | Parion Sciences, Inc. | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Collaborative arrangement, development and regulatory potential milestone payments maximum | 370,000,000 | |||||||
Additional Enac Inhibitors | Parion Sciences, Inc. | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Collaborative arrangement, development and regulatory potential milestone payments maximum | $ 230,000,000 | |||||||
Variable Interest Entity, Primary Beneficiary | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Provision for income taxes | 8,132,000 | $ 17,511,000 | 8,523,000 | $ 20,573,000 | ||||
Business Combination, Consideration Transferred [Abstract] | ||||||||
Intangible assets | 284,340,000 | $ 284,340,000 | $ 284,340,000 | |||||
Variable Interest Entity, Primary Beneficiary | Parion Sciences, Inc. | ||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||
Collaborative revenues | 20,000,000 | |||||||
Provision for income taxes | $ 7,400,000 | |||||||
Business Combination, Consideration Transferred [Abstract] | ||||||||
Intangible assets | $ 255,300,000 |
Collaborative Arrangements an42
Collaborative Arrangements and Acquisitions - BioAxone Biosciences, Inc. (Details) - BioAxone Biosciences Inc. - USD ($) | 1 Months Ended | 3 Months Ended |
Oct. 31, 2014 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Collaborative arrangement, up-front payment | $ 10,000,000 | |
Maximum license fees and milestone payments | $ 90,000,000 | |
In-process research and development intangible asset | 29,000,000 | |
Deferred tax liability attributable to variable interest entity | $ 11,300,000 | |
Purchase option, term of extension of expiration date (in years) | 1 year |
Collaborative Arrangements an43
Collaborative Arrangements and Acquisitions - Aggregate VIE Financial Information, Summary of Net Income Attributable to Noncontrolling Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | ||||
Provision for income taxes | $ 4,337 | $ 18,130 | $ 8,322 | $ 23,615 |
Net income attributable to noncontrolling interest | 13,173 | 28,374 | 14,965 | 33,903 |
Variable Interest Entity, Primary Beneficiary | ||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | ||||
(Income) loss attributable to noncontrolling interest before provision for income taxes and changes in fair value of contingent payments | (18,045) | 2,835 | (16,498) | 3,674 |
Provision for income taxes | 8,132 | 17,511 | 8,523 | 20,573 |
Increase in fair value of contingent payments | (3,260) | (48,720) | (6,990) | (58,150) |
Net income attributable to noncontrolling interest | $ 13,173 | $ 28,374 | $ 14,965 | $ 33,903 |
Collaborative Arrangements an44
Collaborative Arrangements and Acquisitions - Aggregate VIE Financial Information, Contingent Consideration Liability (Details) - Variable Interest Entity, Primary Beneficiary - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Increase in the fair value of the contingent payments | $ 3,260 | $ 48,720 | $ 6,990 | $ 58,150 | |
Parion Sciences, Inc. | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Increase in the fair value of the contingent payments | 3,260 | 48,400 | 6,090 | 57,400 | |
Contingent consideration, liability | 244,890 | 244,890 | $ 238,800 | ||
BioAxone Biosciences Inc. | |||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||
Increase in the fair value of the contingent payments | 0 | $ 320 | 900 | $ 750 | |
Contingent consideration, liability | $ 18,900 | $ 18,900 | $ 18,000 |
Collaborative Arrangements an45
Collaborative Arrangements and Acquisitions - Aggregate VIE Financial Information, Items Related to the Company's VIEs (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||
Restricted cash and cash equivalents (VIE) | $ 64,628 | $ 47,762 |
Prepaid expenses and other current assets | 107,082 | 70,534 |
Intangible assets | 284,340 | 284,340 |
Goodwill | 50,384 | 50,384 |
Other assets | 9,943 | 11,885 |
Accounts payable | 75,941 | 61,451 |
Accrued expenses | 345,062 | 315,249 |
Other liabilities, current portion | 24,770 | 10,943 |
Deferred tax liability | 136,649 | 134,063 |
Other liabilities, excluding current portion | 25,221 | 28,699 |
Noncontrolling interest | 195,958 | 181,609 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||
Restricted cash and cash equivalents (VIE) | 64,628 | 47,762 |
Prepaid expenses and other current assets | 1,198 | 6,812 |
Intangible assets | 284,340 | 284,340 |
Goodwill | 19,391 | 19,391 |
Other assets | 752 | 399 |
Accounts payable | 702 | 415 |
Accrued expenses | 4,118 | 1,330 |
Other liabilities, current portion | 1,610 | 2,137 |
Deferred tax liability | 134,305 | 131,446 |
Other liabilities, excluding current portion | 300 | 300 |
Noncontrolling interest | $ 195,958 | $ 181,609 |
Collaborative Arrangements an46
Collaborative Arrangements and Acquisitions - Moderna Therapeutics, Inc. (Details) - Moderna Therapeutics, Inc. $ in Millions | 1 Months Ended |
Jul. 31, 2016USD ($) | |
Schedule of Collaborative Arrangement Agreements [Line Items] | |
Collaborative arrangement, up-front payment | $ 20 |
Collaborative arrangement, investment in collaborative partner, pursuant to convertible loan agreement | 20 |
Collaborative arrangement, development and regulatory potential milestone payments maximum | 275 |
Collaborative arrangement approval and reimbursement milestones | $ 220 |
Collaborative Arrangements an47
Collaborative Arrangements and Acquisitions - Janssen Pharmaceuticals, Inc. (Details) - Janssen Pharmaceuticals, Inc. - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2014 | Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||
Collaborative arrangement, up-front payment | $ 35 | |||||
Time period of notice required to terminate | 6 months | |||||
Reimbursement for development and commercialization of compounds | $ 0.3 | $ 4.3 | $ 1.8 | $ 7.8 |
Collaborative Arrangements an48
Collaborative Arrangements and Acquisitions - Concert Pharmaceuticals (Details) - Concert Pharmaceuticals - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended |
Jul. 28, 2017 | Sep. 30, 2017 | |
Subsequent Event | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Collaborative arrangement, development and commercialization rights potential maximum milestone payments | $ 160 | |
Collaborative arrangement, additional maximum milestone payments based on regulatory approval | $ 90 | |
Scenario, Forecast | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Collaborative funding | $ 160 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share Computation Statement (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Basic net income (loss) attributable to Vertex per common share calculation: | ||||
Net income (loss) attributable to Vertex common shareholders | $ 17,996 | $ (64,525) | $ 265,752 | $ (106,156) |
Less: Undistributed earnings allocated to participating securities | (23) | 0 | (387) | 0 |
Net income (loss) attributable to Vertex common shareholders—basic | $ 17,973 | $ (64,525) | $ 265,365 | $ (106,156) |
Basic weighted-average common shares outstanding (in shares) | 247,521 | 244,482 | 246,782 | 244,124 |
Basic net income (loss) attributable to Vertex per common share (in dollars per share) | $ 0.07 | $ (0.26) | $ 1.08 | $ (0.43) |
Diluted net income (loss) attributable to Vertex per common share calculation: | ||||
Less: Undistributed earnings allocated to participating securities | $ (23) | $ 0 | $ (382) | $ 0 |
Net income (loss) attributable to Vertex common shareholders—diluted | $ 17,973 | $ (64,525) | $ 265,370 | $ (106,156) |
Effect of potentially dilutive securities: | ||||
Other (in shares) | 63 | 0 | 52 | 0 |
Weighted-average shares used to compute diluted net income (loss) per common share (in shares) | 251,635 | 244,482 | 250,199 | 244,124 |
Diluted net income (loss) attributable to Vertex per common share (in dollars per share) | $ 0.07 | $ (0.26) | $ 1.06 | $ (0.43) |
Stock options | ||||
Effect of potentially dilutive securities: | ||||
Share-based payment arrangements (in shares) | 2,787 | 0 | 2,407 | 0 |
Restricted stock and restricted stock units | ||||
Effect of potentially dilutive securities: | ||||
Share-based payment arrangements (in shares) | 1,264 | 0 | 958 | 0 |
Earnings Per Share (Details)
Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 3,112 | 12,231 | 7,065 | 12,231 |
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) | 6 | 3,506 | 32 | 3,506 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Recurring basis | ||
Financial instruments carried at fair value (asset position): | ||
Total financial assets | $ 770,912 | $ 546,765 |
Financial instruments carried at fair value (liability position): | ||
Total financial liabilities | (9,502) | (144) |
Recurring basis | Level 1 | ||
Financial instruments carried at fair value (asset position): | ||
Total financial assets | 369,460 | 360,628 |
Financial instruments carried at fair value (liability position): | ||
Total financial liabilities | 0 | 0 |
Recurring basis | Level 2 | ||
Financial instruments carried at fair value (asset position): | ||
Total financial assets | 401,452 | 186,137 |
Financial instruments carried at fair value (liability position): | ||
Total financial liabilities | (9,502) | (144) |
Recurring basis | Level 3 | ||
Financial instruments carried at fair value (asset position): | ||
Total financial assets | 0 | 0 |
Financial instruments carried at fair value (liability position): | ||
Total financial liabilities | 0 | 0 |
Prepaid and other current assets | Foreign currency forward contracts | Recurring basis | ||
Financial instruments carried at fair value (asset position): | ||
Foreign currency forward contracts | 985 | 14,407 |
Prepaid and other current assets | Foreign currency forward contracts | Recurring basis | Level 1 | ||
Financial instruments carried at fair value (asset position): | ||
Foreign currency forward contracts | 0 | 0 |
Prepaid and other current assets | Foreign currency forward contracts | Recurring basis | Level 2 | ||
Financial instruments carried at fair value (asset position): | ||
Foreign currency forward contracts | 985 | 14,407 |
Prepaid and other current assets | Foreign currency forward contracts | Recurring basis | Level 3 | ||
Financial instruments carried at fair value (asset position): | ||
Foreign currency forward contracts | 0 | 0 |
Other assets | Foreign currency forward contracts | Recurring basis | ||
Financial instruments carried at fair value (asset position): | ||
Foreign currency forward contracts | 1,186 | |
Other assets | Foreign currency forward contracts | Recurring basis | Level 1 | ||
Financial instruments carried at fair value (asset position): | ||
Foreign currency forward contracts | 0 | |
Other assets | Foreign currency forward contracts | Recurring basis | Level 2 | ||
Financial instruments carried at fair value (asset position): | ||
Foreign currency forward contracts | 1,186 | |
Other assets | Foreign currency forward contracts | Recurring basis | Level 3 | ||
Financial instruments carried at fair value (asset position): | ||
Foreign currency forward contracts | 0 | |
Other liabilities, current portion | Foreign currency forward contracts | Recurring basis | ||
Financial instruments carried at fair value (liability position): | ||
Derivative liability current | (8,067) | (144) |
Other liabilities, current portion | Foreign currency forward contracts | Recurring basis | Level 1 | ||
Financial instruments carried at fair value (liability position): | ||
Derivative liability current | 0 | 0 |
Other liabilities, current portion | Foreign currency forward contracts | Recurring basis | Level 2 | ||
Financial instruments carried at fair value (liability position): | ||
Derivative liability current | (8,067) | (144) |
Other liabilities, current portion | Foreign currency forward contracts | Recurring basis | Level 3 | ||
Financial instruments carried at fair value (liability position): | ||
Derivative liability current | 0 | 0 |
Other liabilities, excluding current portion | Foreign currency forward contracts | Recurring basis | ||
Financial instruments carried at fair value (liability position): | ||
Derivative liability, noncurrent | (1,435) | |
Other liabilities, excluding current portion | Foreign currency forward contracts | Recurring basis | Level 1 | ||
Financial instruments carried at fair value (liability position): | ||
Derivative liability, noncurrent | 0 | |
Other liabilities, excluding current portion | Foreign currency forward contracts | Recurring basis | Level 2 | ||
Financial instruments carried at fair value (liability position): | ||
Derivative liability, noncurrent | (1,435) | |
Other liabilities, excluding current portion | Foreign currency forward contracts | Recurring basis | Level 3 | ||
Financial instruments carried at fair value (liability position): | ||
Derivative liability, noncurrent | 0 | |
Money market funds | Recurring basis | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 318,411 | 280,560 |
Money market funds | Recurring basis | Level 1 | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 318,411 | 280,560 |
Money market funds | Recurring basis | Level 2 | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 0 | 0 |
Money market funds | Recurring basis | Level 3 | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 0 | 0 |
Commercial paper | Recurring basis | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 5,996 | |
Marketable securities | 103,347 | 59,404 |
Commercial paper | Recurring basis | Level 1 | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 0 | |
Marketable securities | 0 | 0 |
Commercial paper | Recurring basis | Level 2 | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 5,996 | |
Marketable securities | 103,347 | 59,404 |
Commercial paper | Recurring basis | Level 3 | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 0 | |
Marketable securities | 0 | 0 |
Government-sponsored enterprise securities | Recurring basis | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 15,508 | |
Government-sponsored enterprise securities | Recurring basis | Level 1 | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 15,508 | |
Government-sponsored enterprise securities | Recurring basis | Level 2 | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 0 | |
Government-sponsored enterprise securities | Recurring basis | Level 3 | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 0 | |
Corporate equity securities | Recurring basis | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 51,049 | 64,560 |
Corporate equity securities | Recurring basis | Level 1 | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 51,049 | 64,560 |
Corporate equity securities | Recurring basis | Level 2 | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 0 | 0 |
Corporate equity securities | Recurring basis | Level 3 | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 0 | 0 |
Corporate debt securities | Recurring basis | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 291,124 | 111,140 |
Corporate debt securities | Recurring basis | Level 1 | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 0 | 0 |
Corporate debt securities | Recurring basis | Level 2 | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 291,124 | 111,140 |
Corporate debt securities | Recurring basis | Level 3 | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 0 | $ 0 |
Variable Interest Entity, Primary Beneficiary | Level 1 | ||
Financial instruments carried at fair value (liability position): | ||
Cash and cash equivalents | $ 62,600 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Summary of cash, cash equivalents and marketable securities | |||||
Amortized Cost | $ 1,661,060,000 | $ 1,661,060,000 | $ 1,413,220,000 | ||
Gross Unrealized Gains | 7,843,000 | 7,843,000 | 21,422,000 | ||
Gross Unrealized Losses | (253,000) | (253,000) | (85,000) | ||
Fair Value | 1,668,650,000 | 1,668,650,000 | 1,434,557,000 | ||
Other than temporary impairment losses, investments | 0 | $ 0 | 0 | $ 0 | |
Gross realized gains (losses) | 0 | $ 0 | 0 | $ 0 | |
Total cash and cash equivalents | |||||
Summary of cash, cash equivalents and marketable securities | |||||
Amortized Cost | 1,223,130,000 | 1,223,130,000 | 1,183,945,000 | ||
Gross Unrealized Gains | 0 | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | 0 | ||
Fair Value | 1,223,130,000 | 1,223,130,000 | 1,183,945,000 | ||
Cash and money market funds | |||||
Summary of cash, cash equivalents and marketable securities | |||||
Amortized Cost | 1,217,134,000 | 1,217,134,000 | 1,183,945,000 | ||
Gross Unrealized Gains | 0 | 0 | 0 | ||
Gross Unrealized Losses | 0 | 0 | 0 | ||
Fair Value | 1,217,134,000 | 1,217,134,000 | 1,183,945,000 | ||
Commercial paper | |||||
Summary of cash, cash equivalents and marketable securities | |||||
Amortized Cost | 5,996,000 | 5,996,000 | |||
Gross Unrealized Gains | 0 | 0 | |||
Gross Unrealized Losses | 0 | 0 | |||
Fair Value | 5,996,000 | 5,996,000 | |||
Total marketable securities | |||||
Summary of cash, cash equivalents and marketable securities | |||||
Amortized Cost | 437,930,000 | 437,930,000 | 229,275,000 | ||
Gross Unrealized Gains | 7,843,000 | 7,843,000 | 21,422,000 | ||
Gross Unrealized Losses | (253,000) | (253,000) | (85,000) | ||
Fair Value | 445,520,000 | 445,520,000 | 250,612,000 | ||
Government-sponsored enterprise securities (matures within 1 year) | |||||
Summary of cash, cash equivalents and marketable securities | |||||
Amortized Cost | 15,506,000 | ||||
Gross Unrealized Gains | 2,000 | ||||
Gross Unrealized Losses | 0 | ||||
Fair Value | 15,508,000 | ||||
Corporate equity securities | |||||
Summary of cash, cash equivalents and marketable securities | |||||
Amortized Cost | 43,213,000 | 43,213,000 | 43,213,000 | ||
Gross Unrealized Gains | 7,836,000 | 7,836,000 | 21,347,000 | ||
Gross Unrealized Losses | 0 | 0 | 0 | ||
Fair Value | 51,049,000 | 51,049,000 | 64,560,000 | ||
Commercial paper (matures within 1 year) | |||||
Summary of cash, cash equivalents and marketable securities | |||||
Amortized Cost | 103,386,000 | 103,386,000 | 59,331,000 | ||
Gross Unrealized Gains | 1,000 | 1,000 | 73,000 | ||
Gross Unrealized Losses | (40,000) | (40,000) | 0 | ||
Fair Value | 103,347,000 | 103,347,000 | 59,404,000 | ||
Corporate debt securities (matures within 1 year) | |||||
Summary of cash, cash equivalents and marketable securities | |||||
Amortized Cost | 218,216,000 | 218,216,000 | 111,225,000 | ||
Gross Unrealized Gains | 4,000 | 4,000 | 0 | ||
Gross Unrealized Losses | (143,000) | (143,000) | (85,000) | ||
Fair Value | 218,077,000 | 218,077,000 | $ 111,140,000 | ||
Corporate debt securities (matures after 1 year) | |||||
Summary of cash, cash equivalents and marketable securities | |||||
Amortized Cost | 73,115,000 | 73,115,000 | |||
Gross Unrealized Gains | 2,000 | 2,000 | |||
Gross Unrealized Losses | (70,000) | (70,000) | |||
Fair Value | $ 73,047,000 | $ 73,047,000 |
Accumulated Other Comprehensi53
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | $ 1,338,191 | $ 1,093,628 | ||
Total changes in other comprehensive (loss) income | $ (37,778) | $ 1,509 | (42,926) | (5,214) |
Ending Balance | 1,867,231 | 1,168,845 | 1,867,231 | 1,168,845 |
Foreign Currency Translation Adjustment | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | (7,862) | (2,080) | ||
Other comprehensive loss before reclassifications | (7,253) | (5,201) | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Total changes in other comprehensive (loss) income | (7,253) | (5,201) | ||
Ending Balance | (15,115) | (7,281) | (15,115) | (7,281) |
Unrealized Holding Gains (Losses) on Marketable Securities, Net of Tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | 17,521 | 126 | ||
Other comprehensive loss before reclassifications | (13,747) | 200 | ||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | ||
Total changes in other comprehensive (loss) income | (13,747) | 200 | ||
Ending Balance | 3,774 | 326 | 3,774 | 326 |
Unrealized Gains (Losses) on Foreign Currency Forward Contracts, Net of Tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | 11,514 | 3,778 | ||
Other comprehensive loss before reclassifications | (17,215) | 1,847 | ||
Amounts reclassified from accumulated other comprehensive loss | (4,711) | (2,060) | ||
Total changes in other comprehensive (loss) income | (21,926) | (213) | ||
Ending Balance | (10,412) | 3,565 | (10,412) | 3,565 |
AOCI Attributable to Parent | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning Balance | 21,173 | 1,824 | ||
Other comprehensive loss before reclassifications | (38,215) | (3,154) | ||
Amounts reclassified from accumulated other comprehensive loss | (4,711) | (2,060) | ||
Total changes in other comprehensive (loss) income | (42,926) | (5,214) | ||
Ending Balance | $ (21,753) | $ (3,390) | $ (21,753) | $ (3,390) |
Hedging (Details)
Hedging (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Dec. 31, 2016 | |
Derivative [Line Items] | ||
Amount of ineffectiveness on net investment hedges | $ 0 | |
Foreign currency forward contracts | ||
Offsetting Derivative Assets [Abstract] | ||
Gross Amounts Recognized | 985,000 | $ 15,593,000 |
Gross Amounts Offset | 0 | 0 |
Gross Amounts Presented | 985,000 | 15,593,000 |
Gross Amounts Not Offset | (985,000) | (144,000) |
Legal Offset | 0 | 15,449,000 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross Amounts Recognized | (9,502,000) | (144,000) |
Gross Amounts Offset | 0 | 0 |
Gross Amounts Presented | (9,502,000) | (144,000) |
Gross Amounts Not Offset | 985,000 | 144,000 |
Legal Offset | (8,517,000) | 0 |
Prepaid and other current assets | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Fair Value - assets | 985,000 | 14,407,000 |
Other assets | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Fair Value - assets | 0 | 1,186,000 |
Other liabilities, current portion | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Fair Value - liabilities | (8,067,000) | (144,000) |
Other liabilities, excluding current portion | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Fair Value - liabilities | (1,435,000) | 0 |
Designated as hedging instrument | Foreign currency forward contracts | Cash flow hedging | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | 310,397,000 | 253,381,000 |
Designated as hedging instrument | Euro | Foreign currency forward contracts | Cash flow hedging | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | 209,800,000 | 164,368,000 |
Designated as hedging instrument | British pound sterling | Foreign currency forward contracts | Cash flow hedging | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | 71,917,000 | 65,237,000 |
Designated as hedging instrument | Australian dollar | Foreign currency forward contracts | Cash flow hedging | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | $ 28,680,000 | $ 23,776,000 |
Minimum | Foreign currency forward contracts | Cash flow hedging | ||
Derivative [Line Items] | ||
Derivative term | 1 month | |
Maximum | Foreign currency forward contracts | Cash flow hedging | ||
Derivative [Line Items] | ||
Derivative term | 18 months |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Raw materials | $ 13,876 | $ 6,348 |
Work-in-process | 63,116 | 56,672 |
Finished goods | 15,271 | 14,584 |
Total Inventories | 92,263 | $ 77,604 |
Tezacaftor | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Capitalized inventory | $ 4,900 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 04, 2015 | Dec. 31, 2014 | Oct. 31, 2014 |
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Intangible assets | $ 284,340 | $ 284,340 | ||||
Goodwill | 50,384 | 50,384 | ||||
Parion Sciences, Inc. | ||||||
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Intangible assets | $ 255,300 | |||||
BioAxone Biosciences Inc. | ||||||
Indefinite-Lived Intangible Assets [Line Items] | ||||||
In-process research and development intangible asset | $ 29,000 | |||||
Variable Interest Entity, Primary Beneficiary | ||||||
Indefinite-Lived Intangible Assets [Line Items] | ||||||
In-process research and development intangible asset | 284,300 | 284,300 | ||||
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] | ||||||
Intangible assets | $ 255,300 | |||||
Variable Interest Entity, Primary Beneficiary | BioAxone Biosciences Inc. | ||||||
Indefinite-Lived Intangible Assets [Line Items] | ||||||
Intangible assets | $ 29,000 |
Long-term Obligations - Fan Pie
Long-term Obligations - Fan Pier Leases (Details) $ in Thousands, ft² in Millions | 12 Months Ended | ||
Dec. 31, 2011ft²leasebuilding | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, net | $ 740,103 | $ 698,362 | |
Fan Pier Leases | |||
Property, Plant and Equipment [Line Items] | |||
Number of leases | lease | 2 | ||
Area of real estate property (in square feet) | ft² | 1.1 | ||
Number of buildings under lease agreement | building | 2 | ||
Optional term of lease agreement (in years) | 10 years | ||
Fan Pier Leases | Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, net | 482,400 | 489,000 | |
Fan Pier Leases | Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Construction financing lease obligation, current and noncurrent | $ 472,400 | $ 472,600 |
Long-term Obligations - San Die
Long-term Obligations - San Diego Lease (Details) ft² in Thousands, $ in Thousands | Dec. 02, 2015USD ($)ft²term_extension | Jun. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, net | $ 740,103 | $ 698,362 | |
San Diego Lease | |||
Property, Plant and Equipment [Line Items] | |||
Area of real estate property (in square feet) | ft² | 170 | ||
Length of lease | 16 years | ||
Average yearly aggregate rent | $ 10,200 | ||
Amount of optional renewal terms | term_extension | 2 | ||
Optional renewal term length | 5 years | ||
San Diego Lease | Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, net | 57,100 | 15,000 | |
San Diego Lease | Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Construction financing lease obligation, current and noncurrent | $ 50,200 | $ 12,600 |
Long-term Obligations - Revolvi
Long-term Obligations - Revolving Credit Facility (Details) | 1 Months Ended | 6 Months Ended | ||
Feb. 28, 2017USD ($) | Oct. 31, 2016USD ($) | Jun. 30, 2017USD ($) | Jun. 30, 2016USD ($) | |
Line of Credit Facility [Line Items] | ||||
Proceeds from lines of credit | $ 300,000,000 | |||
Repayments of lines of credit | $ 300,000,000 | $ 300,000,000 | $ 0 | |
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 | |||
Base Rate | Minimum | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate, stated percentage | 0.75% | |||
Base Rate | Maximum | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate, stated percentage | 1.50% | |||
Eurodollar | Minimum | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate, stated percentage | 1.75% | |||
Eurodollar | Maximum | Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate, stated percentage | 2.50% |
Long-term Obligations - Term Lo
Long-term Obligations - Term Loan (Details) - Senior Secured Term Loan - USD ($) | 1 Months Ended | |
Jul. 31, 2014 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||
Face amount of term loan | $ 300,000,000 | |
Interest rate, stated percentage | 7.20% | 6.20% |
Unamortized discount on term loan | $ 5,300,000 | |
LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (percent) | 5.00% |
Stock-based Compensation Expe61
Stock-based Compensation Expense - (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Stock-based compensation expense: | ||||
Less stock-based compensation expense capitalized to inventories | $ (1,485) | $ (928) | $ (2,293) | $ (1,773) |
Total stock-based compensation included in costs and expenses | 72,582 | 61,942 | 141,564 | 117,414 |
Research and development expenses | ||||
Stock-based compensation expense: | ||||
Total stock-based compensation included in costs and expenses | 43,832 | 40,640 | 88,669 | 75,088 |
Sales, general and administrative expenses | ||||
Stock-based compensation expense: | ||||
Total stock-based compensation included in costs and expenses | 28,750 | 21,302 | 52,895 | 42,326 |
Stock options | ||||
Stock-based compensation expense: | ||||
Stock-based compensation expense by type of award: | 27,915 | 31,826 | 54,896 | 58,086 |
Type of award: | ||||
Unrecognized Expense | 165,047 | $ 165,047 | ||
Weighted-average Recognition Period | 2 years 6 months 4 days | |||
Restricted stock and restricted stock units | ||||
Stock-based compensation expense: | ||||
Stock-based compensation expense by type of award: | 43,906 | 29,608 | $ 84,651 | 57,141 |
Type of award: | ||||
Unrecognized Expense | 249,474 | $ 249,474 | ||
Weighted-average Recognition Period | 2 years 4 months 28 days | |||
ESPP share issuances | ||||
Stock-based compensation expense: | ||||
Stock-based compensation expense by type of award: | 2,246 | $ 1,436 | $ 4,310 | $ 3,960 |
Type of award: | ||||
Unrecognized Expense | $ 5,064 | $ 5,064 | ||
Weighted-average Recognition Period | 7 months 13 days |
Stock-based Compensation Expe62
Stock-based Compensation Expense - Stock Options Outstanding and Exercisable (Details) shares in Thousands | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Exercise price range, options outstanding (in shares) | shares | 11,536 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 7 years 2 months 16 days |
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share) | $ 86.12 |
Exercise price range, options exercisable (in shares) | shares | 6,371 |
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share) | $ 77.74 |
$18.93–$20.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Exercise price, low end of range (in dollars per share) | 18.93 |
Exercise price, high end of range (in dollars per share) | $ 20 |
Exercise price range, options outstanding (in shares) | shares | 129 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 7 months 10 days |
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share) | $ 18.93 |
Exercise price range, options exercisable (in shares) | shares | 129 |
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share) | $ 18.93 |
$20.01–$40.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Exercise price, low end of range (in dollars per share) | 20.01 |
Exercise price, high end of range (in dollars per share) | $ 40 |
Exercise price range, options outstanding (in shares) | shares | 943 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 2 years 6 months 26 days |
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share) | $ 34.74 |
Exercise price range, options exercisable (in shares) | shares | 943 |
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share) | $ 34.74 |
$40.01–$60.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Exercise price, low end of range (in dollars per share) | 40.01 |
Exercise price, high end of range (in dollars per share) | $ 60 |
Exercise price range, options outstanding (in shares) | shares | 1,233 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 5 years 1 month 24 days |
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share) | $ 48.58 |
Exercise price range, options exercisable (in shares) | shares | 1,233 |
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share) | $ 48.58 |
$60.01–$80.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Exercise price, low end of range (in dollars per share) | 60.01 |
Exercise price, high end of range (in dollars per share) | $ 80 |
Exercise price range, options outstanding (in shares) | shares | 1,042 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 6 years 8 months 9 days |
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share) | $ 75.83 |
Exercise price range, options exercisable (in shares) | shares | 784 |
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share) | $ 75.63 |
$80.01–$100.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Exercise price, low end of range (in dollars per share) | 80.01 |
Exercise price, high end of range (in dollars per share) | $ 100 |
Exercise price range, options outstanding (in shares) | shares | 5,336 |
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 (in dollars per share) | $ 89.52 |
Exercise price range, options exercisable (in shares) | shares | 1,733 |
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share) | $ 89.89 |
$100.01–$120.00 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Exercise price, low end of range (in dollars per share) | 100.01 |
Exercise price, high end of range (in dollars per share) | $ 120 |
Exercise price range, options outstanding (in shares) | shares | 1,437 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 7 years 6 months 22 days |
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share) | $ 109.35 |
Exercise price range, options exercisable (in shares) | shares | 786 |
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share) | $ 109.27 |
$120.01–$131.89 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Exercise price, low end of range (in dollars per share) | 120.01 |
Exercise price, high end of range (in dollars per share) | $ 131.89 |
Exercise price range, options outstanding (in shares) | shares | 1,416 |
Exercise price range, options outstanding, weighted-average remaining contractual life (in years) | 8 years 11 days |
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share) | $ 130.34 |
Exercise price range, options exercisable (in shares) | shares | 763 |
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share) | $ 130 |
Other Arrangements (Details)
Other Arrangements (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2008 | Jun. 30, 2017 | |
Other Income and Expenses [Abstract] | ||
Gross proceeds from sale of royalty rights receivable from GlaxoSmithKline | $ 160,000,000 | |
Deferred revenue royalty purchase agreement | $ 9,600,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Mar. 31, 2017 | |
Schedule of Collaborative Arrangement Agreements [Line Items] | ||||||
Provision for income taxes | $ 4,337,000 | $ 18,130,000 | $ 8,322,000 | $ 23,615,000 | ||
Unrecognized tax benefits | 0 | 0 | $ 0 | |||
Income taxes, interest and penalties accrued | 0 | 0 | ||||
Increase in unrecognized tax benefits is reasonably possible | 0 | 0 | ||||
Income taxes, material interest or penalties related to uncertain tax positions | 0 | 0 | ||||
Effective income tax rate reconciliation, share-based compensation, excess tax benefit, amount | 30,400,000 | 30,800,000 | ||||
Amount of unrecognized deferred tax liability, undistributed earnings of foreign subsidiaries | 0 | 0 | ||||
Accounting Standards Update 2016-09, Excess Tax Benefit | ||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | ||||||
Operating loss carryforwards | 410,800,000 | $ 410,800,000 | ||||
Deferred income tax assets, net | 3,400,000 | |||||
Retained Earnings | Accounting Standards Update 2016-09, Forfeiture Rate Component | ||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | ||||||
Cumulative effect of new accounting principle in period of adoption | $ 9,371,000 | |||||
Variable Interest Entity, Primary Beneficiary | ||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | ||||||
Provision for income taxes | 8,132,000 | $ 17,511,000 | 8,523,000 | $ 20,573,000 | ||
Income tax liability associated with variable interest entity | $ 0 | $ 0 |
Restructuring Liabilities - Nar
Restructuring Liabilities - Narrative (Details) ft² in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Feb. 28, 2017positionfacility | Sep. 30, 2014facility | Dec. 31, 2015USD ($)ft²lease | Dec. 31, 2003 | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | |
Research and Development Restructuring | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring and related cost, number of facilities expected to close | facility | 1 | ||||||||
Restructuring and related cost, number of positions eliminated | position | 70 | ||||||||
Restructuring and related cost, expected cost | $ 12,400,000 | ||||||||
Restructuring reserve | 3,507,000 | $ 3,727,000 | $ 0 | ||||||
Kendall Restructuring | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Lease term (in years) | 15 years | ||||||||
Restructuring and related activities, leased office space, maximum percentage used - not more than | 50.00% | ||||||||
Restructuring reserve | $ 7,944,000 | 1,990,000 | 2,525,000 | 4,328,000 | $ 6,388,000 | $ 7,224,000 | |||
Fan Pier Move Restructuring | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Number of facilities decommissioned | facility | 3 | ||||||||
Number of leases terminated | lease | 2 | ||||||||
Area of real estate property (in square feet) | ft² | 120 | ||||||||
Discount rate related to leases (percent) | 9.00% | ||||||||
Restructuring reserve | $ 5,964,000 | 1,521,000 | $ 1,995,000 | $ 3,626,000 | 4,863,000 | 5,449,000 | |||
Other Restructuring | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring reserve | $ 1,450,000 | 0 | $ 1,233,000 | $ 1,262,000 | |||||
Employee Severance | Research and Development Restructuring | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring and related cost, expected cost | 6,900,000 | ||||||||
Asset Impairments | Research and Development Restructuring | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring and related cost, expected cost | 2,200,000 | ||||||||
Facility Closing | Research and Development Restructuring | |||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||
Restructuring and related cost, expected cost | $ 3,300,000 |
Restructuring Liabilities - Act
Restructuring Liabilities - Activity Related to Restructuring Liability (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Restructuring activities | ||||
Restructuring expense | $ 3,523,000 | $ 343,000 | $ 13,522,000 | $ 1,030,000 |
Kendall Restructuring | ||||
Restructuring activities | ||||
Liability, beginning of the period | 2,525,000 | 7,224,000 | 4,328,000 | 7,944,000 |
Restructuring expense | 342,000 | (11,000) | 827,000 | 192,000 |
Cash payments | (3,695,000) | (3,833,000) | (8,959,000) | (7,764,000) |
Cash received from subleases | 2,818,000 | 3,008,000 | 5,794,000 | 6,016,000 |
Liability, end of the period | 1,990,000 | 6,388,000 | 1,990,000 | 6,388,000 |
Fan Pier Move Restructuring | ||||
Restructuring activities | ||||
Liability, beginning of the period | 1,995,000 | 5,449,000 | 3,626,000 | 5,964,000 |
Restructuring expense | (41,000) | 149,000 | 255,000 | 382,000 |
Cash payments | (2,911,000) | (3,096,000) | (7,316,000) | (6,252,000) |
Cash received from subleases | 2,478,000 | 2,361,000 | 4,956,000 | 4,769,000 |
Liability, end of the period | 1,521,000 | 4,863,000 | 1,521,000 | 4,863,000 |
Research and Development Restructuring | ||||
Restructuring activities | ||||
Liability, beginning of the period | 3,727,000 | 0 | ||
Restructuring expense | 3,222,000 | 12,440,000 | ||
Cash payments | (3,861,000) | (7,119,000) | ||
Asset impairments and other non-cash items | 419,000 | (1,814,000) | ||
Liability, end of the period | 3,507,000 | 3,507,000 | ||
Other Restructuring | ||||
Restructuring activities | ||||
Liability, beginning of the period | 1,262,000 | 1,450,000 | ||
Restructuring expense | 205,000 | 456,000 | ||
Cash payments | (234,000) | (673,000) | ||
Liability, end of the period | $ 0 | $ 1,233,000 | $ 0 | $ 1,233,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Indemnification claims | $ 0 | |
Contingent liabilities | $ 0 | $ 0 |