Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2018 | Jan. 31, 2019 | Jun. 29, 2018 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | VERTEX PHARMACEUTICALS INC / MA | ||
Entity Central Index Key | 875,320 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 42.5 | ||
Entity Common Stock, Shares Outstanding | 255,656,889 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||||||||||
Revenues | $ 870,106 | $ 784,535 | $ 752,157 | $ 640,799 | $ 651,634 | $ 578,165 | $ 544,135 | $ 714,718 | $ 3,047,597 | $ 2,488,652 | $ 1,702,177 |
Costs and expenses: | |||||||||||
Cost of sales | 122,289 | 111,255 | 104,382 | 71,613 | 84,052 | 72,874 | 71,205 | 46,988 | 409,539 | 275,119 | 210,460 |
Research and development expenses | 437,881 | 330,510 | 337,532 | 310,553 | 306,664 | 454,947 | 289,451 | 273,563 | 1,416,476 | 1,324,625 | 1,047,690 |
Sales, general and administrative expenses | 153,210 | 137,295 | 137,303 | 129,808 | 134,794 | 120,710 | 127,249 | 113,326 | 557,616 | 496,079 | 432,829 |
Restructuring (income) expenses | 4 | (174) | 62 | (76) | 387 | 337 | 3,523 | 9,999 | (184) | 14,246 | 1,262 |
Intangible asset impairment charges | 29,000 | 0 | 0 | 0 | 0 | 255,340 | 0 | 0 | 29,000 | 255,340 | 0 |
Total costs and expenses | 742,384 | 578,886 | 579,279 | 511,898 | 525,897 | 904,208 | 491,428 | 443,876 | 2,412,447 | 2,365,409 | 1,692,241 |
Income from operations | 127,722 | 205,649 | 172,878 | 128,901 | 125,737 | (326,043) | 52,707 | 270,842 | 635,150 | 123,243 | 9,936 |
Interest expense, net | (4,773) | (8,143) | (10,106) | (11,097) | (12,547) | (13,574) | (14,664) | (16,765) | (34,119) | (57,550) | (81,432) |
Other (expense) income, net | (90,452) | (60,995) | 53,819 | 96,838 | (748) | (77,553) | (2,537) | (544) | (790) | (81,382) | 4,130 |
Income (loss) before (benefit from) provision for income taxes | 32,497 | 136,511 | 216,591 | 214,642 | 112,442 | (417,170) | 35,506 | 253,533 | 600,241 | (15,689) | (67,366) |
(Benefit from) provision for income taxes | (1,492,599) | 8,055 | 10,341 | (12,659) | 10,257 | (125,903) | 4,337 | 3,985 | (1,486,862) | (107,324) | 16,665 |
Net income (loss) | 1,525,096 | 128,456 | 206,250 | 227,301 | 102,185 | (291,267) | 31,169 | 249,548 | 2,087,103 | 91,635 | (84,031) |
Loss (income) attributable to noncontrolling interest | 25,431 | 290 | 1,110 | (17,038) | (1,501) | 188,315 | (13,173) | (1,792) | 9,793 | 171,849 | (28,021) |
Net income (loss) attributable to Vertex | $ 1,550,527 | $ 128,746 | $ 207,360 | $ 210,263 | $ 100,684 | $ (102,952) | $ 17,996 | $ 247,756 | $ 2,096,896 | $ 263,484 | $ (112,052) |
Net income (loss): | |||||||||||
Basic (usd per share) | $ 6.08 | $ 0.51 | $ 0.82 | $ 0.83 | $ 0.40 | $ (0.41) | $ 0.07 | $ 1.01 | $ 8.24 | $ 1.06 | $ (0.46) |
Diluted (usd per share) | $ 5.97 | $ 0.50 | $ 0.80 | $ 0.81 | $ 0.39 | $ (0.41) | $ 0.07 | $ 0.99 | $ 8.09 | $ 1.04 | $ (0.46) |
Shares used in per share calculations: | |||||||||||
Basic (in shares) | 254,868 | 254,905 | 254,135 | 253,231 | 251,557 | 250,268 | 247,521 | 246,024 | 254,292 | 248,858 | 244,685 |
Diluted (in shares) | 259,812 | 259,788 | 258,584 | 258,526 | 256,804 | 250,268 | 251,635 | 248,700 | 259,185 | 253,225 | 244,685 |
Product revenues, net | |||||||||||
Revenues: | |||||||||||
Revenues | $ 868,173 | $ 782,511 | $ 749,912 | $ 637,729 | $ 621,228 | $ 549,642 | $ 513,988 | $ 480,622 | $ 3,038,325 | $ 2,165,480 | $ 1,683,632 |
Collaborative and royalty revenues | |||||||||||
Revenues: | |||||||||||
Revenues | $ 1,933 | $ 2,024 | $ 2,245 | $ 3,070 | $ 30,406 | $ 28,523 | $ 30,147 | $ 234,096 | $ 9,272 | $ 323,172 | $ 18,545 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ 2,087,103 | $ 91,635 | $ (84,031) |
Changes in other comprehensive income (loss): | |||
Unrealized holding gains on marketable securities, net of tax of zero, $(2.7) million and $(3.8) million, respectively | 58 | 6,954 | 17,395 |
Unrealized gains (losses) on foreign currency forward contracts, net of tax of $(7.1) million, $3.4 million and $(3.9) million, respectively | 27,438 | (26,530) | 7,736 |
Foreign currency translation adjustment | 8,855 | (13,169) | (5,782) |
Total changes in other comprehensive income (loss) | 36,351 | (32,745) | 19,349 |
Comprehensive income (loss) | 2,123,454 | 58,890 | (64,682) |
Comprehensive loss (income) attributable to noncontrolling interest | 9,793 | 171,849 | (28,021) |
Comprehensive income (loss) attributable to Vertex | $ 2,133,247 | $ 230,739 | $ (92,703) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized holding gains (losses) on marketable securities, tax | $ 0 | $ (2.7) | $ (3.8) |
Unrealized (losses) gains on foreign currency forward contracts, tax | $ (7.1) | $ 3.4 | $ (3.9) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 2,650,134 | $ 1,665,412 |
Marketable securities | 518,108 | 423,254 |
Accounts receivable, net | 409,688 | 281,343 |
Inventories | 124,360 | 111,830 |
Prepaid expenses and other current assets | 140,819 | 167,124 |
Total current assets | 3,843,109 | 2,648,963 |
Property and equipment, net | 812,005 | 789,437 |
Intangible assets | 0 | 29,000 |
Goodwill | 50,384 | 50,384 |
Deferred tax assets | 1,499,672 | 834 |
Other assets | 40,728 | 27,396 |
Total assets | 6,245,898 | 3,546,014 |
Current liabilities: | ||
Accounts payable | 110,987 | 73,994 |
Accrued expenses | 604,495 | 443,961 |
Capital lease obligations, current portion | 9,817 | 22,531 |
Early access sales accrual | 354,404 | 232,401 |
Other liabilities, current portion | 40,589 | 34,373 |
Total current liabilities | 1,120,292 | 807,260 |
Capital lease obligations, excluding current portion | 19,658 | 20,496 |
Deferred tax liabilities | 0 | 6,341 |
Construction financing lease obligation, excluding current portion | 561,892 | 563,406 |
Advance from collaborator, excluding current portion | 82,573 | 78,431 |
Other liabilities, excluding current portion | 26,280 | 27,774 |
Total liabilities | 1,810,695 | 1,503,708 |
Commitments and contingencies | 0 | 0 |
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, 255,172,328 and 253,253,362 shares issued and outstanding, respectively | 2,546 | 2,512 |
Additional paid-in capital | 7,421,476 | 7,157,362 |
Accumulated other comprehensive income (loss) | 659 | (11,572) |
Accumulated deficit | (2,989,478) | (5,119,723) |
Total Vertex shareholders’ equity | 4,435,203 | 2,028,579 |
Noncontrolling interest | 0 | 13,727 |
Total shareholders’ equity | 4,435,203 | 2,042,306 |
Total liabilities and shareholders’ equity | $ 6,245,898 | $ 3,546,014 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (shares) | 255,172,328 | 253,253,362 |
Common stock, shares outstanding (shares) | 255,172,328 | 253,253,362 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity and Noncontrolling Interest - USD ($) $ in Thousands | Total | Total Vertex Shareholders' Equity | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Noncontrolling Interest |
Balance (shares) at Dec. 31, 2015 | 246,307,000 | ||||||
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 income, net of tax | 19,349 | 19,349 | 19,349 | ||||
Net (loss) income | (84,031) | (112,052) | (112,052) | 28,021 | |||
Issuance of common stock under benefit plans (shares) | 1,994,000 | ||||||
Issuance of common stock under benefit plans | 68,006 | 68,006 | $ 23 | 67,983 | 0 | ||
Stock-based compensation expense | 241,239 | 241,312 | 241,312 | (73) | |||
Balance (shares) at Dec. 31, 2016 | 248,301,000 | ||||||
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 | |||||||
Cumulative effect adjustment for adoption of new accounting guidance | Accounting standards update 2016-09 | 9,371 | (9,371) | |||||
Other comprehensive income, net of tax | (32,745) | (32,745) | (32,745) | ||||
Net (loss) income | 91,635 | 263,484 | 263,484 | (171,849) | |||
Issuance of common stock under benefit plans (shares) | 4,952,000 | ||||||
Issuance of common stock under benefit plans | 345,673 | 345,616 | $ 62 | 345,554 | 57 | ||
Stock-based compensation expense | 295,642 | 295,642 | 295,642 | 0 | |||
VIE noncontrolling interest upon deconsolidation | 3,910 | 3,910 | |||||
Balance (shares) at Dec. 31, 2017 | 253,253,000 | ||||||
Balance at Dec. 31, 2017 | 2,042,306 | 2,028,579 | $ 2,512 | 7,157,362 | (11,572) | (5,119,723) | 13,727 |
Increase (Decrease) in Stockholders' Equity | |||||||
Cumulative effect adjustment for adoption of new accounting guidance | Accounting standards update 2016-09 | 9,229 | 9,229 | (24,120) | 33,349 | |||
Other comprehensive income, net of tax | 36,351 | 36,351 | 36,351 | ||||
Net (loss) income | $ 2,087,103 | 2,096,896 | 2,096,896 | (9,793) | |||
Repurchase of common stock (shares) | (2,093,891) | (2,094,000) | |||||
Repurchases of common stock | $ (350,043) | (350,043) | $ (21) | (350,022) | |||
Issuance of common stock under benefit plans (shares) | 4,013,000 | ||||||
Issuance of common stock under benefit plans | 288,535 | 288,535 | $ 55 | 288,480 | |||
Stock-based compensation expense | 325,656 | 325,656 | 325,656 | 0 | |||
VIE noncontrolling interest upon deconsolidation | (3,540) | (3,540) | |||||
Other VIE activity | (394) | (394) | |||||
Balance (shares) at Dec. 31, 2018 | 255,172,000 | ||||||
Balance at Dec. 31, 2018 | $ 4,435,203 | $ 4,435,203 | $ 2,546 | $ 7,421,476 | $ 659 | $ (2,989,478) | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 2,087,103 | $ 91,635 | $ (84,031) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Stock-based compensation expense | 325,047 | 293,236 | 240,623 |
Depreciation expense | 72,420 | 61,397 | 61,398 |
Write-downs of inventories to net realizable value | 20,413 | 15,292 | 0 |
Deferred income taxes (including benefit from valuation allowance release) | (1,512,325) | (120,513) | 16,961 |
Unrealized gain on equity securities | (2,558) | 0 | 0 |
Intangible asset impairment charges | 29,000 | 255,340 | 0 |
Acquired in-process research and development | 0 | 160,000 | 0 |
Deconsolidation of VIE | 1,077 | 76,644 | 0 |
Other non-cash items, net | 12,089 | (853) | 6,140 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | (108,152) | (71,759) | (39,095) |
Inventories | (31,965) | (47,484) | (19,368) |
Prepaid expenses and other assets | 16,684 | (111,063) | (2,631) |
Accounts payable | 36,554 | 8,753 | (11,745) |
Accrued expenses and other liabilities | 195,623 | 75,332 | (5,565) |
Early access sales accrual | 129,276 | 158,985 | 73,416 |
Net cash provided by operating activities | 1,270,286 | 844,942 | 236,103 |
Cash flows from investing activities: | |||
Maturities of available-for-sale debt securities | 431,576 | 369,214 | 757,562 |
Purchases of available-for-sale debt securities | (431,918) | (532,581) | (616,625) |
Expenditures for property and equipment | (95,524) | (99,421) | (56,563) |
Purchase of in-process research and development | 0 | (160,000) | 0 |
Investment in note receivable | (15,000) | 0 | (20,000) |
Investment in equity securities | (83,471) | 0 | (13,075) |
Decrease in restricted cash due to deconsolidation of VIE | (7,896) | (61,602) | 0 |
Other investing activities | 75 | 1,061 | (61) |
Net cash used in (provided by) investing activities | (202,158) | (483,329) | 51,238 |
Cash flows from financing activities: | |||
Issuances of common stock under benefit plans | 289,293 | 344,840 | 68,230 |
Repurchase of common stock | (350,043) | 0 | 0 |
Payments on revolving credit facility | 0 | (300,000) | 0 |
Advance from collaborator | 7,500 | 12,500 | 75,000 |
Payments related to construction financing lease obligation | (5,462) | (541) | (432) |
Proceeds related to construction financing lease obligation | 9,566 | 27,182 | 0 |
Proceeds from capital lease financing | 11,274 | 7,484 | 11,208 |
Payments on capital lease obligations | (27,926) | (18,795) | (17,597) |
Repayments of advanced funding | (5,027) | (4,266) | 0 |
Payments on senior secured term loan | 0 | 0 | (75,000) |
Proceeds from revolving credit facility | 0 | 0 | 74,965 |
Payments of debt issuance costs | 0 | 0 | (3,103) |
Other financing activities | (394) | 0 | 0 |
Net cash (used in) provided by financing activities | (71,219) | 68,404 | 133,271 |
Effect of changes in exchange rates on cash | (6,182) | 5,802 | (4,666) |
Net increase in cash, cash equivalents and restricted cash | 990,727 | 435,819 | 415,946 |
Cash, cash equivalents and restricted cash—beginning of period | 1,667,526 | 1,231,707 | 815,761 |
Cash, cash equivalents and restricted cash—end of period | 2,658,253 | 1,667,526 | 1,231,707 |
Supplemental disclosure of cash flow information: | |||
Cash paid for interest | 66,458 | 68,696 | 83,656 |
Cash paid for (received from) income taxes | 12,402 | 6,414 | (2,579) |
Non-cash investing and financing activities: | |||
Capitalization of costs related to construction financing lease obligation | 3,389 | 40,855 | 14,238 |
Issuances of common stock from employee benefit plans receivable | 86 | 844 | 68 |
Proceeds from revolving credit facility directly paid to settle all outstanding obligations under the term loan | $ 0 | $ 0 | $ 225,000 |
Nature of Business and Accounti
Nature of Business and Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Nature of Business and Accounting Policies | Nature of Business and Accounting Policies Business Vertex Pharmaceuticals Incorporated (“Vertex” or the “Company”) invests in scientific innovation to create transformative medicines for serious diseases. The Company’s business is focused on developing and commercializing therapies for the treatment of cystic fibrosis (“CF”) and advancing research and development programs in other indications. The Company’s marketed products are SYMDEKO/SYMKEVI (tezacaftor in combination with ivacaftor), ORKAMBI (lumacaftor in combination with ivacaftor) and KALYDECO (ivacaftor), which are approved to treat patients with CF who have specific mutations in their cystic fibrosis transmembrane conductance regulator (“CFTR”) gene. As of December 31, 2018 , the Company had cash, cash equivalents and marketable securities of $3.2 billion . The Company expects that cash flows from the sales of its products, together with the Company’s cash, cash equivalents and marketable securities, will be sufficient to fund its operations for at least the next twelve months. Vertex is subject to risks common to companies in its industry including, but not limited to, the dependence on revenues from its CF products, competition, uncertainty about clinical trial outcomes and regulatory approvals, uncertainties relating to pharmaceutical pricing and reimbursement, uncertainty related to international expansion, uncertain protection of proprietary technology, the need to comply with government regulations, share price volatility, dependence on collaborative relationships and potential product liability. Basis of Presentation The consolidated financial statements reflect the operations of (i) the Company, (ii) its wholly-owned subsidiaries and (iii) consolidated variable interest entities (“VIEs”). As of September 30, 2017, the Company deconsolidated Parion Sciences, Inc. (“Parion”), a VIE the Company had consolidated since 2015. As of December 31, 2018, the Company deconsolidated BioAxone Biosciences, Inc. (“BioAxone”), a VIE the Company had consolidated since 2014. As of December 31, 2018, the Company does not have any consolidated VIEs. All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. Please refer to Note R, “ Segment Information, ” for enterprise-wide disclosures regarding the Company’s revenues, major customers and long-lived assets by geographic area. The Company has reclassified certain items from the prior year’s consolidated financial statements to conform to the current year’s presentation. Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the amounts of revenues and expenses during the reported periods. Significant estimates in these consolidated financial statements have been made in connection with the calculation of revenues, research and development expenses, the fair value of intangible assets, goodwill, noncontrolling interest, the consolidation and deconsolidation of VIEs, deferred tax asset valuation allowances and the provision for or benefit from income taxes. The Company bases its estimates on historical experience and various other assumptions, including in certain circumstances future projections, that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known. Revenue Recognition Pursuant to Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ ASC 606 ”), the Company recognizes revenue when a customer obtains control of promised goods or services. The Company records the amount of revenue that reflects the consideration that it expects to receive in exchange for those goods or services. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration to which it is entitled in exchange for the goods or services that it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. The Company recognizes as revenue the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon delivery. Product Revenues, Net The Company sells its products principally to a limited number of specialty pharmacy and specialty distributors in the United States, which account for the largest portion of its total revenues, and makes international sales primarily to specialty distributors and retail chains, as well as hospitals and clinics, many of which are government-owned or supported (collectively, its “Customers”). The Company’s Customers in the United States subsequently resell the products to patients and health care providers. In accordance with ASC 606 , the Company recognizes net revenues from product sales when the Customers obtain control of the Company’s products, which typically occurs upon delivery to the Customer. The Company’s payment terms are approximately 30 days in the United States and consistent with prevailing practice in international markets. Revenues from product sales are recorded at the net sales price, or “transaction price,” which includes estimates of variable consideration that result from (a) invoice discounts for prompt payment and distribution fees, (b) government and private payor rebates, chargebacks, discounts and fees and (c) costs of co-pay assistance programs for patients, as well as other incentives for certain indirect customers. Reserves are established for the estimates of variable consideration based on the amounts earned or to be claimed on the related sales. The reserves are classified as reductions to “ Accounts receivable, net ” if payable to a Customer or “ Accrued expenses ” if payable to a third-party. Where appropriate, the Company utilizes the expected value method to determine the appropriate amount for estimates of variable consideration based on factors such as the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The amount of variable consideration that is included in the transaction price may be constrained and is included in net product revenues only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results vary from the Company’s estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known. Invoice Discounts and Distribution Fees: The Company generally provides invoice discounts on product sales to its Customers for prompt payment and pays fees for distribution services, such as fees for certain data that Customers provide to the Company. The Company estimates that, based on its experience, its Customers will earn these discounts and fees, and deducts the full amount of these discounts and fees from its gross product revenues and accounts receivable at the time such revenues are recognized. Rebates, Chargebacks, Discounts and Fees: The Company contracts with government agencies (its “Third-party Payors”) so that products will be eligible for purchase by, or partial or full reimbursement from, such Third-party Payors. The Company estimates the rebates, chargebacks, discounts and fees it will provide to Third-party Payors and deducts these estimated amounts from its gross product revenues at the time the revenues are recognized. For each product, the Company estimates the aggregate rebates, chargebacks and discounts that it will provide to Third-party Payors based upon (i) the Company’s contracts with these Third-party Payors, (ii) the government-mandated discounts and fees applicable to government-funded programs, (iii) information obtained from the Company’s Customers and other third-party data regarding the payor mix for such product and (iv) historical experience. Other Incentives: Other incentives that the Company offers include co-pay mitigation rebates provided by the Company to commercially insured patients who have coverage and who reside in states that permit co-pay mitigation programs. Based upon the terms of the Company’s co-pay mitigation programs, the Company estimates average co-pay mitigation amounts for each of its products in order to establish appropriate accruals. The Company makes significant estimates and judgments that materially affect its recognition of net product revenues. The Company adjusts its estimated rebates, chargebacks and discounts based on new information, including information regarding actual rebates, chargebacks and discounts for its products, as it becomes available. Claims by third-party payors for rebates, chargebacks and discounts frequently are submitted to the Company significantly after the related sales, potentially resulting in adjustments in the period in which the new information becomes known. The Company’s credits to product revenue related to prior period sales have not been significant and primarily related to rebates and discounts. The Company excludes taxes collected from Customers relating to product sales and remitted to governmental authorities from revenues. Contract Liabilities The Company’s contract liabilities relate to annual contracts with government-owned and supported customers in international markets that limit the amount of annual reimbursement the Company can receive. Upon exceeding the annual reimbursement amount, products are provided free of charge, which is a material right pursuant to ASC 606. These contracts, which are classified as “ Other liabilities, current portion ,” include upfront payments and fees. The Company defers a portion of the consideration received for shipments made up to the annual reimbursement limit, and the deferred amount is recognized as revenue when the free products are shipped. The Company’s product revenue contracts include performance obligations that are one year or less. The Company’s contract liabilities of $24.9 million and $1.7 million as of December 31, 2018 and 2017 , respectively, represent balances related to contracts with annual reimbursement limits in several international markets in which the annual period associated with the contract is not the same as the Company’s fiscal year. In the majority of international markets in which the Company has a contract with an annual reimbursement limit, the annual period associated with the contract is the same as the Company’s fiscal year, resulting in no contract liability balance at the end of the year and no revenues recognized in the current year related to performance obligations satisfied in previous periods. For the international markets in which the periods associated with these annual contracts are not the same as the Company’s fiscal year, the Company recognizes revenues related to performance obligations satisfied in previous years; however, these amounts are not material to the Company’s financial statements and do not relate to any performance obligations that were satisfied more than 12 months prior to the beginning of the current year. The revenues recognized in the year ended December 31, 2018 related to performance obligations satisfied in the prior year were $1.7 million . French Early Access Programs Pursuant to ASC 605, Revenue Recognition (“ ASC 605 ”), which was applicable until December 31, 2017, the Company only recognized revenues from product sales if it determined that the price was fixed or determinable at the time of delivery. If the Company determined that the price was not fixed or determinable, it deferred the recognition of revenues. If the Company was able to determine that the price was fixed or determinable, it recognized the net product revenues associated with the units. The Company began distributing ORKAMBI through early access programs in France during the fourth quarter of 2015 and is engaged in ongoing pricing discussions regarding the final price for ORKAMBI in France. The Company’s ORKAMBI net product revenues for 2017, 2016 and 2015 did not include any net product revenues from sales of ORKAMBI in France because the price was not fixed or determinable. The Company expects that the difference between the amounts collected based on the invoiced price and the final price for ORKAMBI in France will be returned to the French government. As of December 31, 2018 and 2017 , the Company’s consolidated balance sheets included $354.4 million and $232.4 million , respectively, classified as “ Early access sales accrual ” related to amounts collected in France as payment for shipments of ORKAMBI under the early access programs, which is considered to be a refund liability pursuant to ASC 606. Upon adopting ASC 606 in 2018, the Company recorded an $8.3 million cumulative effect adjustment to “ Accumulated deficit ” primarily related to shipments of ORKAMBI under the early access programs in France. The Company determined the amount of the adjustment based upon (i) the status of pricing discussions in France upon adoption, (ii) its estimate of the amount of consideration it expects to retain related to ORKAMBI sales in France that occurred on or prior to December 31, 2017 that will not be subject to a significant reversal in amounts recognized and (iii) recognition of costs previously deferred related to the ORKAMBI sales in France. For ORKAMBI sales in France that occurred after December 31, 2017 under the early access programs, the Company has recognized net product revenues based on the estimate of consideration it expects to retain that will not be subject to a significant reversal in amounts recognized. If the Company’s estimate regarding the amounts it will receive for ORKAMBI supplied pursuant to these early access programs changes, it will reflect the effect of the change in estimate in net product revenues in the period in which the change in estimate occurs and will include adjustments to all prior sales of ORKAMBI under the early access programs. Please refer to Recent Accounting Pronouncements included in this Note A, “Nature of Business and Accounting Policies,” below for more information regarding the revenue recognition guidance adopted as of January 1, 2018. Collaborative and Royalty Revenues The Company recognizes collaborative revenues generated through collaborative research, development and/or commercialization agreements. The terms of these agreements typically include payment to the Company related to one or more of the following: nonrefundable, upfront license fees; development and commercial milestones; funding of research and/or development activities; and royalties on net sales of licensed products. Revenue is recognized upon satisfaction of a performance obligation by transferring control of a good or service to the collaborator. For each collaborative research, development and/or commercialization agreement that results in revenue, the Company identifies all material performance obligations, which may include a license to intellectual property and know-how, research and development activities and/or transition activities. In order to determine the transaction price, in addition to any upfront payment, the Company estimates the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract. The Company constrains (reduces) the estimate of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur throughout the life of the contract. When determining if variable consideration should be constrained, management considers whether there are factors outside the Company’s control that could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required. Once the estimated transaction price is established, amounts are allocated to the performance obligations that have been identified. The transaction price is generally allocated to each separate performance obligation on a relative standalone selling price basis. In order to account for these agreements, the Company must develop assumptions that require judgment to determine the standalone selling price, which may include (i) the probability of obtaining marketing approval for the drug candidate, (ii) estimates regarding the timing of and the expected costs to develop and commercialize the drug candidate, (iii) estimates of future cash flows from potential product sales with respect to the drug candidate and (iv) appropriate discount and tax rates. Standalone selling prices used to perform the initial allocation are not updated after contract inception. The Company does not include a financing component to its estimated transaction price at contract inception unless it estimates that certain performance obligations will not be satisfied within one year. Upfront License Fees: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in an arrangement, the Company recognizes revenue from the related nonrefundable, upfront license fees based on the relative standalone selling price prescribed to the license compared to the total selling price of the arrangement. The revenue is recognized when the license is transferred to the collaborator and the collaborator is able to use and benefit from the license. For licenses that are not distinct from other obligations identified in the arrangement, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, the Company applies an appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront license fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Development and Regulatory Milestone Payments: Depending on facts and circumstances, the Company may conclude that it is appropriate to include certain milestones in the estimated transaction price or that it is appropriate to fully constrain the milestones. A milestone payment is included in the transaction price in the reporting period that the Company concludes that it is probable that recording revenue in the period will not result in a significant reversal in amounts recognized in future periods. The Company may record revenues from certain milestones in a reporting period before the milestone is achieved if the Company concludes that achievement of the milestone is probable and that recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. The Company records a corresponding contract asset when this conclusion is reached. Milestone payments that have not been included in the transaction price to date are fully constrained. These milestones remain fully constrained until the Company concludes that their achievement is probable and that recognition of the related revenue will not result in a significant reversal in amounts recognized in future periods. The Company re-evaluates the probability of achievement of such development milestones and any related constraint each reporting period and adjusts its estimate of the overall transaction price, including the amount of collaborative revenue that it has recorded, if necessary. Research and Development Activities/Transition Services: If the Company is entitled to reimbursement from its collaborators for specified research and development expenses, it accounts for the related services that it provides as separate performance obligations if it determines that these services represent a material right. The Company also determines whether the reimbursement of research and development expenses should be accounted for as collaborative revenues or an offset to research and development expenses in accordance with the provisions of gross or net revenue presentation. The Company recognizes the corresponding revenues or records the corresponding offset to research and development expenses as it satisfies the related performance obligations. Sales-based Milestone and Royalty Payments: The Company’s collaborators may be required to pay the Company sales-based milestones or royalties on future sales of commercial products. The Company recognizes revenues related to sales-based milestone and royalties upon the later to occur of (i) achievement of the collaborator’s underlying sales or (ii) satisfaction of any performance obligation(s) related to these sales, in each case assuming the license to the Company’s intellectual property is deemed to be the predominant item to which the sales-based milestones and/or royalties relate. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of money market funds and marketable securities. The Company places these investments with highly rated financial institutions, and, by policy, limits the amounts of credit exposure to any one financial institution. These amounts at times may exceed federally insured limits. The Company also maintains a foreign currency hedging program that includes foreign currency forward contracts with several counterparties. The Company has not experienced any credit losses related to these financial instruments and does not believe it is exposed to any significant credit risk related to these instruments. The Company also is subject to credit risk from its accounts receivable related to its product sales and collaborators. The Company evaluates the creditworthiness of each of its customers and has determined that all of its material customers are creditworthy. To date, the Company has not experienced significant losses with respect to the collection of its accounts receivable. The Company’s receivables from Greece, Italy, Portugal and Spain were not material as of December 31, 2018 . The Company believes that its allowance for doubtful accounts was adequate at December 31, 2018 . Please refer to Note R, “ Segment Information, ” for further information. Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. Marketable Securities As of December 31, 2018 , the Company’s marketable securities consisted of investments in available-for-sale debt securities, including U.S. Treasury securities, government-sponsored enterprise securities, corporate debt securities and commercial paper, and corporate equity securities with readily determinable fair values. The Company classifies marketable securities available to fund current operations as current assets on its consolidated balance sheets. Marketable securities are classified as long-term assets on the consolidated balance sheets if (i) they have been in an unrealized loss position for longer than one year and (ii) the Company has the ability and intent to hold them (a) until the carrying value is recovered and (b) such holding period may be longer than one year. The Company’s marketable securities are stated at fair value. The fair value of these securities is based on quoted prices for identical or similar assets. The Company records unrealized gains (losses) on available-for-sale debt securities as a component of “ Accumulated other comprehensive income (loss) ,” which is a separate component of shareholders’ equity on its consolidated balance sheet, until such gains and losses are realized. Pursuant to the adoption of Accounting Standards Update (“ASU”) No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ ASU 2016-01 ”) on January 1, 2018, the Company began recording changes in the fair value of its investments in corporate equity securities to “Other (expense) income, net” in the Company’s consolidated statements of operations. Prior to its adoption of ASU 2016-01 in 2018, the Company recorded changes in the fair value of its investments in corporate equity securities to “Accumulated other comprehensive income (loss).” The Company reviews investments in marketable debt securities for other-than-temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers whether it has an intent to sell, or whether it is more likely than not that the Company will be required to sell, the investment before recovery of the investment’s amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with the Company’s investment policy, the severity and the duration of the impairment and changes in value subsequent to year-end. If a decline in the fair value is considered other-than-temporary, based on available evidence, the unrealized loss is transferred from other comprehensive income (loss) to the consolidated statements of operations. Realized gains and losses are determined using the specific identification method and are included in “ Other (expense) income, net ” in the consolidated statements of operations. Accounts Receivable The Company deducts invoice discounts for prompt payment and fees for distribution services from its accounts receivable based on its experience that the Company’s Customers will earn these discounts and fees. The Company’s estimates for its allowance for doubtful accounts, which have not been significant to date, are determined based on existing contractual payment terms and historical payment patterns. Stock-based Compensation Expense The Company expenses the fair value of employee stock options and other forms of stock-based employee compensation over the associated employee service period on a straight-line basis. Stock-based compensation expense is determined based on the fair value of the award at the grant date and is adjusted each period to reflect actual forfeitures and the outcomes of certain performance conditions. For awards with performance conditions in which the award does not vest unless the performance condition is met, the Company recognizes expense if, and to the extent that, the Company estimates that achievement of the performance condition is probable. If the Company concludes that vesting is probable, it recognizes expense from the date it reaches this conclusion through the estimated vesting date. For awards with performance conditions that accelerate vesting of the award, the Company estimates the likelihood of satisfaction of the performance conditions, which affects the period over which the expense is recognized, and recognizes the expense using the accelerated attribution model. The Company provides to employees who have rendered a certain number of years’ to the Company and meet certain age requirements, partial or full acceleration of vesting of these equity awards, subject to certain conditions including a notification period, upon a termination of employment other than for cause. Less than 5% of the Company’s employees were eligible for partial or full acceleration of any of their equity awards as of December 31, 2018 . The Company recognizes stock-based compensation expense related to these awards over a service period reflecting qualified employees’ eligibility for partial or full acceleration of vesting. Research and Development Expenses The Company expenses as incurred all research and development expenses, including amounts funded by research and development collaborations. The Company capitalizes nonrefundable advance payments made by the Company for research and development activities and expenses the payments as the related goods are delivered or the related services are performed. Research and development expenses are comprised of costs incurred by the Company in performing research and development activities, including salary and benefits; stock-based compensation expense; laboratory supplies and other direct expenses; outsourced services, including clinical trial and pharmaceutical development costs; collaboration and asset acquisition payments; expenses associated with drug supplies that are not being capitalized; and infrastructure costs, including facilities costs and depreciation expense. Advertising Expenses The Company expenses the costs of advertising, including promotional expenses, as incurred. Advertising expenses, recorded in sales, general and administrative expenses, were $43.5 million , $35.2 million and $31.4 million in 2018 , 2017 and 2016 , respectively. Inventories The Company values its inventories at the lower-of-cost or net realizable value. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and writes down any excess and obsolete inventories to their net realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases are capitalized and recorded upon sale in “ Cost of sales ” in the consolidated statements of operations. Shipping and handling costs incurred for product shipments are recorded as incurred in “ Cost of sales ” in the consolidated statements of operations. The Company capitalizes inventories produced in preparation for initiating sales of a drug candidate when the related drug candidate is considered to have a high likelihood of regulatory approval and the related costs are expected to be recoverable through sales of the inventories. In determining whether or not to capitalize such inventories, the Company evaluates, among other factors, information regarding the drug candidate’s safety and efficacy, the status of regulatory submissions and communications with regulatory authorities and the outlook for commercial sales, including the existence of current or anticipated competitive drugs and the availability of reimbursement. In addition, the Company evaluates risks associated with manufacturing the drug candidate and the remaining shelf-life of the inventories. Property and Equipment Property and equipment are recorded at cost. Depreciation expense is recorded using the straight-line method over the estimated useful life of the related asset, generally seven to ten years for furniture and equipment, three to five years for computers and software, 40 years for buildings and for leasehold improvements, the shorter of the useful life of the improvements or the estimated remaining life of the associated lease. Amortization expense of assets acquired under capital leases is included in d |
Collaborative Arrangements
Collaborative Arrangements | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Collaborative Arrangements | Collaborative Arrangements and Acquisitions The Company has entered into numerous agreements pursuant to which it collaborates with third parties on research, development and commercialization programs, including in-license and out-license agreements and asset acquisitions. In-license Agreements The Company has entered into a number of license agreements in order to advance and obtain access to technologies and services related to its research and early-development activities. The Company is generally required to make an upfront payment upon execution of the license agreement; development, regulatory and commercialization milestones payments upon the achievement of certain product research, development and commercialization objectives; and royalty payments on future sales, if any, of commercial products resulting from the collaboration. Pursuant to the terms of its in-license agreements, the Company’s collaborators lead the discovery efforts and the Company leads all preclinical, development and commercialization activities associated with the advancement of any drug candidates and funds all expenses unless otherwise described below. The Company typically can terminate its in-license agreements by providing advance notice to it collaborators; the required length of notice is dependent on whether any product developed under the license agreement has received marketing approval. The Company’s license agreements may be terminated by either party for a material breach by the other, subject to notice and cure provisions. Unless earlier terminated, these license agreements generally remain in effect until the date on which the royalty term and all payment obligations with respect to all products in all countries have expired. 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 an investment in CRISPR’s stock. The Company has also made several subsequent investments in CRISPR’s common shares, which has resulted in CRISPR becoming a related party of the Company as of December 31, 2018. Please refer to Note E, “Marketable Securities and Equity Investments,” for further information regarding the Company’s investment in CRISPR’s common stock. The Company funds all the discovery activities conducted pursuant to the CRISPR Agreement. For targets that the Company elects to license, other than hemoglobinopathy treatments, the Company would lead all development and global commercialization activities. For each target that the Company elects to license, other than hemoglobinopathy targets, CRISPR has the potential to receive up to $420.0 million in development, regulatory and commercial milestones as well as royalties on net product sales. As part of the collaboration, the Company and CRISPR share equally all development costs and potential worldwide revenues related to potential hemoglobinopathy treatments, including treatments for beta-thalassemia and sickle cell disease. In 2017, the Company entered into a co-development and co-commercialization agreement with CRISPR pursuant to the terms of the CRISPR Agreement, under which the Company and CRISPR are co-developing and will co-commercialize CTX001 (the “CTX001 Co-Co Agreement”) for the treatment of hemoglobinopathy, including treatments for sickle cell disease and beta-thalassemia. The Company concluded that the CTX001 Co-Co Agreement is a cost-sharing arrangement, which results in the net impact of the arrangement being recorded in “ Research and development expenses ” in its consolidated statements of operations. During the year ended December 31, 2018 , the net expense related to the CTX001 Co-Co Agreement was $19.7 million . Net expense related to the CTX001 Co-Co Agreement during the year ended December 31, 2017 was not significant. Other In-License Agreements In 2016, the Company entered into a strategic collaboration and licensing agreement with Moderna Therapeutics, Inc. (“Moderna”), pursuant to which the parties are seeking to identify and develop messenger ribonucleic acid, or mRNA, therapeutics for the treatment of CF . The Company made an upfront payment to Moderna of $20.0 million , which was recorded to “ Research and development expenses ” and an investment in Moderna’s preferred stock, which converted to common stock when Moderna became a publicly traded company in December 2018. Moderna has the potential to receive future development and regulatory milestones of up to $275.0 million as well as royalties on net product sales. Please refer to Note E, “Marketable Securities and Equity Investments,” for further information regarding the Company’s investment in Moderna’s common stock. In December 2018, the Company entered into a strategic collaboration and licensing agreement (the “Arbor Agreement”) with Arbor Biotechnologies, Inc. (“Arbor”) focused on the discovery of novel proteins, including DNA endonucleases, to advance the development of new gene-editing therapies . Pursuant to the Arbor Agreement, Arbor’s platform technology is being applied in the collaboration activities for up to five Vertex disease areas in exchange for an upfront payment of $30.0 million . In addition, the Company received a convertible promissory note that matures in 2023 for an additional $15.0 million payment. For the each product identified by the collaboration, Arbor has the potential to receive up to $337.5 million in development, regulatory and commercial milestones as well as royalties on net product sales. The Company determined that the fair value of the convertible promissory note approximated its contractual value upon agreement execution and is accounting for the convertible note at amortized cost. The Company determined that substantially all of the fair value of the Arbor Agreement was attributable to an in-process research and development asset and no substantive processes were acquired that would constitute a business. The Company concluded that it did not have any alternative future use for the acquired in-process research and development asset and recorded the $30.0 million upfront payment to “ Research and development expenses .” Variable Interest Entities (VIEs) The Company has license agreements with Parion and BioAxone, pursuant to which the Company licensed rights to certain drug candidates from these third-party collaborators that resulted in the consolidation of the third-parties’ financial statements into the Company’s consolidated financial statements as VIEs for portions or all of the three years ended December 31, 2018. The Company deconsolidated the financial statements of Parion as of September 30, 2017 and BioAxone as of December 31, 2018 from its consolidated financial statements. Please refer to Note J, “Intangible Assets and Goodwill,” for further information regarding the impairment of Parion’s pulmonary ENaC platform and BioAxone’s VX-210 program that were related to these collaborations. Parion Sciences, Inc. In 2015, the Company entered into a strategic collaboration and license agreement (the “Parion Agreement”) with Parion to collaborate with Parion to develop investigational epithelial sodium channel (“ENaC”) inhibitors for the potential treatment of CF and all other pulmonary diseases. The Company 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. To date Parion has received $85.0 million in upfront and milestone payments under the Parion Agreement. Parion has the potential to receive additional development and regulatory milestones related to the ENaC inhibitors for the potential treatment of CF and all other pulmonary diseases. Following execution of the Parion Agreement, the Company determined that it had a variable interest in Parion via the Parion Agreement, and that the variable interest represented a variable interest in Parion as a whole because the fair value of the ENaC inhibitors represented more than half of the total fair value of Parion’s assets. The Company also concluded that it was the primary beneficiary as it had the power to direct the activities that most significantly affect the economic performance of Parion and that it had 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 in June 2015. 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; however, the Company continued to consolidate Parion as a variable interest entity because it determined that there was no substantive change in the design of Parion subsequent to Parion’s agreement with Shire. Based on the consolidation of Parion’s financial statements, during the year ended December 31, 2017, the Company recognized $40.0 million of collaborative revenues and (ii) a tax provision of $14.8 million , both of which were attributable to noncontrolling interest related to payments that Parion received from Shire in the year ended December 31, 2017. As of September 30, 2017, the Company determined that the fair value of Parion’s pulmonary ENaC platform had declined significantly based on data received in September 2017 from a Phase 2 clinical trial of VX-371 that did not meet its primary efficacy endpoint. After evaluating the results of the clinical trial and based on the decrease in the fair value of Parion’s pulmonary ENaC platform relative to Parion’s other activities, the Company determined that it was no longer the primary beneficiary of Parion as it no longer had the power to direct the significant activities of Parion. Accordingly, the Company deconsolidated Parion as of September 30, 2017. The impairment charge of $255.3 million , the decrease in the fair value of the contingent payments payable by the Company to Parion of $69.6 million and the benefit from income taxes of $126.2 million resulting from these charges were recorded in the third quarter of 2017 and were attributable to noncontrolling interest. The benefit from income taxes consisted of benefits of $97.7 million attributable to the impairment charge and $28.5 million attributable to the decrease in the fair value of contingent payments. The net effect of these charges and impact of the deconsolidation was a loss of $7.1 million recorded in “ Other (expense) income, net ” attributable to Vertex in the consolidated statement of operations for the year ended December 31, 2017. The loss of $7.1 million was approximately the difference between (i) the aggregate of $85.0 million in upfront and milestone payments that the Company made to Parion pursuant to the Parion Agreement and (ii) losses the Company recorded in 2015, 2016 and the first half of 2017 based on increases in the fair value of contingent payments payable by the Company to Parion. BioAxone Biosciences, Inc. In 2014, the Company entered into a license and collaboration agreement (the “BioAxone Agreement”) with BioAxone, which resulted in the consolidation of BioAxone as a VIE beginning in October 2014. The Company made an initial payment to BioAxone of $10.0 million in 2014. In the first quarter of 2018, an option held by the Company to purchase BioAxone expired and the Company paid a $10.0 million license continuation fee to BioAxone. In October 2018, the Company announced it would stop clinical development of VX-210 and terminate the Phase 2b clinical trial of VX-210 based on the recommendation of the clinical trial’s Data Safety Monitoring Board and the Company’s review of interim data. In December 2018, the Company notified BioAxone of its intent to terminate the BioAxone Agreement and executed a release that immediately allowed BioAxone to control development of its neurological programs other than VX-210 without the Company’s consent. As a result, the Company deconsolidated BioAxone as of December 31, 2018 because it determined that it no longer was the primary beneficiary of BioAxone as it no longer had the power to direct the significant activities of BioAxone. The net impact of the deconsolidation was not material to the Company’s consolidated statement of operations. The Company concluded that the deconsolidations of Parion and BioAxone, based on clinical data that did not meet expectations, were not developments that represented a significant strategic shift or had a material impact on the Company’s overall operations and financial results or its plans to focus on developing and commercializing therapies for the treatment of CF and advancing its research and development programs in additional diseases. Therefore, the Company did not present the results related to Parion and BioAxone as discontinued operations in its consolidated statements of operations for the three years ended December 31, 2018 . Aggregate VIE Financial Information An aggregate summary of net loss attributable to noncontrolling interest related to the Company’s VIEs for the three years ended December 31, 2018 was as follows: 2018 2017 2016 (in thousands) Loss attributable to noncontrolling interest before (benefit from) provision for income taxes and changes in fair value of contingent payments $ 31,191 $ 223,379 $ 10,086 (Benefit from) provision for income taxes (3,668 ) (114,090 ) 16,743 (Increase) decrease in fair value of contingent payments (17,730 ) 62,560 (54,850 ) Net loss (income) attributable to noncontrolling interest $ 9,793 $ 171,849 $ (28,021 ) The increase in the noncontrolling interest holders’ claim to net assets with respect to the fair value of the contingent payments for the year ended December 31, 2018 was primarily due to the expiration of the Company’s option to purchase BioAxone that increased the probability of the $10.0 million license continuation fee for VX-210 that was paid in 2018. The decrease in the noncontrolling interest holders’ claim to net assets with respect to the fair value of the contingent payments for the year ended December 31, 2017 was primarily due to the decrease in the fair value of Parion’s pulmonary ENaC platform described above. The increase in the fair value of the contingent payments for the year ended December 31, 2016 was primarily due to a separate Phase 2 clinical trial of VX-371 achieving its primary safety endpoint in 2016. The fair value of the contingent payments payable by the Company to BioAxone was zero , due to the deconsolidation of BioAxone, and $18.9 million as of December 31, 2018 and 2017 , respectively. During three years ended December 31, 2018 , the (increases) decreases in the fair value of the contingent payments related to the Company’s VIEs were as follows: 2018 2017 2016 (in thousands) Parion $ — $ 63,460 $ (64,800 ) BioAxone (17,730 ) (900 ) 9,950 As of December 31, 2018, the Company did not have any consolidated VIEs. As of December 31, 2017, the Company’s consolidated balance sheet included the following significant amounts related to its consolidation of BioAxone as a VIE: December 31, 2017 (in thousands) Intangible assets $ 29,000 Deferred tax liabilities 4,756 Noncontrolling interest 13,727 Asset Acquisition Concert Pharmaceuticals In 2017, the Company acquired certain CF assets including VX-561 (the “Concert Assets”) from Concert Pharmaceuticals Inc. (“Concert”) pursuant to an asset purchase agreement (the “Concert Agreement”). VX-561 is an investigational CFTR potentiator that has the potential to be used as part of combination regimens of CFTR modulators to treat CF. Pursuant to the Concert Agreement, Vertex paid Concert $160.0 million in cash for the Concert Assets. If VX-561 is approved as part of a combination regimen to treat CF, Concert could receive up to an additional $90.0 million in milestones based on regulatory approval in the United States and reimbursement in the United Kingdom, Germany or France. The Company determined that substantially all of the fair value of the Concert Agreement was attributable to a single in-process research and development asset, VX-561, which did not constitute a business. The Company concluded that it did not have any alternative future use for the acquired in-process research and development asset. Thus, the Company recorded the $160.0 million upfront payment to “ Research and development expenses ” in 2017. The total cost of the transaction was $165.1 million including $5.1 million of transaction costs that were recorded to “ Sales, general and administrative expenses .” Out-license Agreements The Company has entered into licensing agreements pursuant to which it has out-licensed rights to certain drug candidates to third-party collaborators. Pursuant to these out-license agreements, the Company’s collaborators become responsible for all costs related to the continued development of such drug candidates and obtain development and commercialization rights to these drug candidates. Depending on the terms of the agreements, the Company’s collaborators may be required to make upfront payments, milestone payments upon the achievement of certain product research and development objectives and may also be required to pay royalties on future sales, if any, of commercial products resulting from the collaboration. The termination provisions associated with these collaborations are generally the same as those described above related to the Company’s in-license agreements. Merck KGaA, Darmstadt, Germany In January 2017, the Company entered into a strategic collaboration and license agreement (the “Oncology Agreement”) with Merck KGaA, Darmstadt, Germany (the “Licensee”). Pursuant to the Oncology Agreement, the Company granted the Licensee an exclusive worldwide license to research, develop and commercialize four oncology research and development programs including two clinical-stage programs targeting DNA damage repair: its ataxia telangiectasia and Rad3-related protein kinase inhibitor program, or ATR program, including VX-970 and VX-803, and its DNA-dependent protein kinase inhibitor program, or DNA-PK program, including VX-984. In addition, the Company granted the Licensee exclusive, worldwide rights to two pre-clinical programs. The Oncology Agreement provided for an upfront payment from the Licensee to the Company of $230.0 million . 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 the Licensee, pursuant to the Oncology Agreement, under the multiple element arrangement accounting guidance that was applicable in 2017. The Company concluded that the license had stand-alone value from the research and development and transition activities based on the resources and know-how possessed by the Licensee, 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. Given the significance of the best estimate of selling price for the license as compared to the best estimate of selling price for the research and development and transition services, reasonable changes in the assumptions used in the discounted cash flow model would not have a significant impact on the relative selling price allocation. Based on this analysis, the Company recognized the $230.0 million upfront payment upon delivery of the license as well as research and development and transition activities during the year ended December 31, 2017. The Company records the reimbursement for the research and development and transition activities in its consolidated statements of operations as collaborative revenue primarily due to the fact that it is the primary obligor in the arrangement. The Company’s activities related to the research and development and transition activities under the Oncology Agreement were substantially complete as of December 31, 2017. In December 2018, the Company entered into an agreement with Merck KGaA, Darmstadt, Germany (the “DNA-PK Agreement”) whereby the Company licensed the two lead Vertex DNA-PK compounds from its DNA-PK program for use in the field of gene integration for six specific indications. In exchange for this exclusive worldwide license to research, develop and commercialize the DNA-PK program for the specified indications within the field of gene integration, the Company made an upfront payment of $65.0 million . Merck KGaA, Darmstadt, Germany has the potential to receive additional milestones, primarily related to approval and reimbursement in various markets, as well as royalties on net product sales. The Company evaluated the DNA-PK Agreement and concluded it represents a modification of the Oncology Agreement pursuant to ASC 606. As of December 2018, when the Company entered into the DNA-PK Agreement, the Company had completed its obligations under the Oncology Agreement, but the Oncology Agreement was an open contract pursuant to ASC 606 since the Company could receive future royalty payments from the commercialization of the licensed programs under the Oncology Agreement. In applying ASC 606, the Company determined that the license granted under the DNA-PK Agreement is distinct from the license granted by the Company under the Oncology Agreement since the license to the two lead Vertex DNA-PK compounds is capable of being distinct as the Company is able to benefit from the license via its ability to internally develop and commercialize the two lead Vertex DNA-PK compounds in the six named indications in the field of gene-editing, and the license is not dependent on Merck KGaA, Darmstadt, Germany providing any specialized services to the Company. In addition, the license to the two lead Vertex DNA-PK compounds granted to the Company under the DNA-PK Agreement is distinct from the license granted by the Company under the Oncology Agreement as the rights conveyed in the licenses differ and both parties have the ability to commercially benefit from the licenses on their own. Furthermore, the consideration attributable to the license of the two lead Vertex DNA-PK compounds represents fair value. Therefore, the Company determined it should account for the DNA-PK Agreement as a separate agreement. The Company determined that substantially all of the fair value of the DNA-PK Agreement was attributable to a single in-process research and development asset that did not constitute a business. The Company concluded that it did not have any alternative future use for the acquired in-process research and development asset and recorded the $65.0 million payment to “ Research and development expenses ” accordingly. Janssen Pharmaceuticals, Inc. In 2014, the Company entered into an agreement with Janssen Pharmaceuticals, Inc. (“Janssen”). Pursuant to the agreement, Janssen has an exclusive worldwide license to develop and commercialize certain drug candidates for the treatment of influenza, including pimodivir. The Company received non-refundable payments of $35.0 million from Janssen in 2014 and recognized a $25.0 million milestone in 2017, based on a Phase 3 clinical trial Janssen initiated in 2017, that was collected in 2018. Cystic Fibrosis Foundation The Company has a research, development and commercialization agreement that was originally entered into in 2004 with Cystic Fibrosis Foundation (“ CFF ”), as successor in interest to the Cystic Fibrosis Foundation Therapeutics, Inc. This agreement was most recently amended in 2016 (the “2016 Amendment”). Pursuant to the agreement, as amended, the Company 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, including VX-659 and VX-445, and tiered royalties ranging from single digits to sub-teens on any approved drugs first synthesized and/or tested during a research term on or before February 28, 2014, including KALYDECO (ivacaftor), ORKAMBI (lumacaftor in combination with ivacaftor) and SYMDEKO/SYMKEVI (tezacaftor in combination with ivacaftor). For combination products, such as ORKAMBI and SYMDEKO, sales are allocated equally to each of the active pharmaceutical ingredients in the combination product. In 2016, CFF earned the last commercial milestone payment of $13.9 million payable by the Company pursuant to the agreement upon achievement of certain sales levels of lumacaftor. Pursuant to the 2016 Amendment, the Company received an upfront payment of $75.0 million and is receiving development funding from CFF of up to $6.0 million annually. The Company concluded that the upfront payment plus any future development funding represent a form of financing pursuant to ASC 730 and thus records the amounts as a liability on the consolidated balance sheet, primarily reflected in “ Advance from collaborator, excluding current portion .” The Company reduces this liability over the estimated royalty term of the agreement and reflects the reductions as an offset to “ Cost of sales ” and as “ Interest expense, net .” The Company has royalty obligations to CFF 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 extension. 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. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2018 | |
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, restricted stock units and performance-based restricted stock units, or PSUs, which 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 three years ended December 31, 2018 : 2018 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 $ 2,096,896 $ 263,484 $ (112,052 ) Less: Undistributed earnings allocated to participating securities (501 ) (293 ) — Net income (loss) attributable to Vertex common shareholders—basic $ 2,096,395 $ 263,191 $ (112,052 ) Basic weighted-average common shares outstanding 254,292 248,858 244,685 Basic net income (loss) attributable to Vertex per common share $ 8.24 $ 1.06 $ (0.46 ) Diluted net income (loss) attributable to Vertex per common share calculation: Net income (loss) attributable to Vertex common shareholders $ 2,096,896 $ 263,484 $ (112,052 ) Less: Undistributed earnings allocated to participating securities (492 ) (288 ) — Net income (loss) attributable to Vertex common shareholders—diluted $ 2,096,404 $ 263,196 $ (112,052 ) Weighted-average shares used to compute basic net income (loss) per common share 254,292 248,858 244,685 Effect of potentially dilutive securities: Stock options 2,913 2,797 — Restricted stock and restricted stock units (including PSUs) 1,963 1,542 — Employee stock purchase plan 17 28 — Weighted-average shares used to compute diluted net income (loss) per common share 259,185 253,225 244,685 Diluted net income (loss) attributable to Vertex per common share $ 8.09 $ 1.04 $ (0.46 ) The Company did not include the securities in the following table in the computation of the net income (loss) per share attributable to Vertex common shareholders calculations because the effect would have been anti-dilutive during each period. 2018 2017 2016 (in thousands) Stock options 2,217 3,554 12,642 Unvested restricted stock and restricted stock units (including PSUs) 5 411 3,546 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of the Company’s financial assets and liabilities reflects the Company’s estimate of amounts that it would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from sources independent from the Company) and to minimize the use of unobservable inputs (the Company’s assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. The Company’s investment strategy is focused on capital preservation. The Company invests in instruments that meet the credit quality standards outlined in the Company’s investment policy. This policy also limits the amount of credit exposure to any one issue or type of instrument. As of December 31, 2018 , the Company’s investments were primarily in money market funds, U.S. Treasury securities, government-sponsored enterprise securities, corporate equity securities, corporate debt securities and commercial paper. Additionally, the Company utilizes foreign currency forward contracts intended to mitigate the effect of changes in foreign exchange rates on its consolidated statement of operations. As of December 31, 2018 , all of the Company’s financial assets and liabilities 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, U.S. Treasury securities, government-sponsored enterprise securities and corporate equity securities. The Company’s financial assets and liabilities valued based on Level 2 inputs consisted of certain corporate equity securities as described below, corporate debt securities and commercial paper, which consisted of investments in highly-rated investment-grade corporations and foreign currency forward contracts with reputable and creditworthy counterparties. In 2018, Moderna became a publicly traded company. The Company has valued its investment in Moderna based on Level 2 inputs due to transfer restrictions for a period of time subsequent to Moderna’s initial public offering. The reduction in fair value recorded on the Company’s consolidated balance sheet related to this transfer restriction is not material to its financial statements. During 2018 , 2017 and 2016 , the Company did not record any other-than-temporary impairment charges related to its financial assets. The following table sets forth the Company’s financial assets and liabilities (excluding VIE cash and cash equivalents) subject to fair value measurements: Fair Value Measurements as of December 31, 2018 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 $ 1,226,603 $ 1,226,603 $ — $ — U.S. Treasury securities 5,966 5,966 — — Government-sponsored enterprise securities 7,123 7,123 — — Commercial paper 58,268 — 58,268 — Marketable securities: Corporate equity securities 167,323 153,733 13,590 — U.S. Treasury securities 6,026 6,026 — — Government-sponsored enterprise securities 10,704 10,704 — — Corporate debt securities 233,665 — 233,665 — Commercial paper 100,390 — 100,390 — Prepaid and other current assets: Foreign currency forward contracts 19,023 — 19,023 — Other assets: Foreign currency forward contracts 1,514 — 1,514 — Total financial assets $ 1,836,605 $ 1,410,155 $ 426,450 $ — Financial instruments carried at fair value (liability position): Other liabilities, current portion: Foreign currency forward contracts $ (340 ) $ — $ (340 ) $ — Other liabilities, excluding current portion: Foreign currency forward contracts (108 ) — (108 ) — Total financial liabilities $ (448 ) $ — $ (448 ) $ — Fair Value Measurements as of December 31, 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 $ 614,951 $ 614,951 $ — $ — Government-sponsored enterprise securities 12,678 12,678 — — Commercial paper 57,357 — 57,357 — Marketable securities: Corporate equity securities 74,821 74,821 — — Government-sponsored enterprise securities 2,303 2,303 — — Corporate debt securities 265,867 — 265,867 — Commercial paper 80,263 — 80,263 — Prepaid and other current assets: Foreign currency forward contracts 13 — 13 — Total financial assets $ 1,108,253 $ 704,753 $ 403,500 $ — Financial instruments carried at fair value (liability position): Other liabilities, current portion: Foreign currency forward contracts $ (13,642 ) $ — $ (13,642 ) $ — Other liabilities, excluding current portion: Foreign currency forward contracts (866 ) — (866 ) — Total financial liabilities $ (14,508 ) $ — $ (14,508 ) $ — Please refer to Note E, “Marketable Securities and Equity Investments,” for the carrying amount and related unrealized gains (losses) by type of the Company’s financial assets and liabilities. As of December 31, 2018, the Company did not have any noncontrolling interest. As of December 31, 2017, the Company’s noncontrolling interest related to the Company’s VIE included the fair value of the contingent payments, which could consist of milestone, royalty and option payments, which were valued based on Level 3 inputs. Please refer to Note B, “Collaborative Arrangements and Acquisitions,” for further information regarding the fair value of the contingent payments. |
Marketable Securities and Equit
Marketable Securities and Equity Investments | 12 Months Ended |
Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Marketable Securities and Equity Investments | Marketable Securities and Equity Investments Pursuant to the adoption of ASU 2016-01 on January 1, 2018, the Company began recording changes in the fair value of its investments in corporate equity securities (except those accounted for under the equity method of accounting or those that result in consolidation of an investee) to “ Other (expense) income, net ” in the Company’s consolidated statements of operations. Prior to its adoption of ASU 2016-01 , the Company recorded changes in the fair value of its investments in corporate equity securities to “ Accumulated other comprehensive income (loss) ” on its consolidated balance sheet until the related gains or losses were realized. The Company continues to record unrealized gains (losses) on available-for-sale debt securities as a component of accumulated other comprehensive income (loss) until such gains and losses are realized. A summary of the Company’s cash equivalents and marketable securities is shown below: Amortized Cost Gross Gross Fair Value (in thousands) As of December 31, 2018 Cash equivalents: Money market funds $ 1,226,603 $ — $ — $ 1,226,603 U.S. Treasury securities 5,967 — (1 ) 5,966 Government-sponsored enterprise securities 7,124 — (1 ) 7,123 Commercial paper 58,271 — (3 ) 58,268 Total cash equivalents 1,297,965 — (5 ) 1,297,960 Marketable securities: U.S Treasury securities (matures within 1 year) 6,026 — — 6,026 Government-sponsored enterprise securities (matures within 1 year) 10,704 — — 10,704 Corporate debt securities (matures within 1 year) 232,845 25 (450 ) 232,420 Corporate debt securities (matures after 1 year through 5 years) 1,243 2 — 1,245 Commercial paper (matures within 1 year) 100,498 — (108 ) 100,390 Total marketable debt securities 351,316 27 (558 ) 350,785 Corporate equity securities 133,157 40,619 (6,453 ) 167,323 Total marketable securities $ 484,473 $ 40,646 $ (7,011 ) $ 518,108 As of December 31, 2017 Cash equivalents: Money market funds $ 614,951 $ — $ — $ 614,951 Government-sponsored enterprise securities 12,679 — (1 ) 12,678 Commercial paper 57,371 — (14 ) 57,357 Total cash equivalents 685,001 — (15 ) 684,986 Marketable securities: Government-sponsored enterprise securities (matures within 1 year) 2,304 — (1 ) 2,303 Corporate debt securities (matures within 1 year) 215,639 — (363 ) 215,276 Corporate debt securities (matures after 1 year through 5 years) 50,697 — (106 ) 50,591 Commercial paper (matures within 1 year) 80,372 — (109 ) 80,263 Total marketable debt securities 349,012 — (579 ) 348,433 Available-for-sale corporate equity securities 43,213 31,608 — 74,821 Total marketable securities $ 392,225 $ 31,608 $ (579 ) $ 423,254 Available-for-sale debt securities were recorded in the Company's consolidated balance sheets as follows: As of December 31, 2018 2017 (in thousands) Cash and cash equivalents $ 1,297,960 $ 684,986 Marketable securities 350,785 348,433 Total $ 1,648,745 $ 1,033,419 The Company has a limited number of available-for-sale debt securities in insignificant loss positions as of December 31, 2018 , which it does not intend to sell and has concluded it will not be required to sell before recovery of the amortized costs for the investments at maturity. The Company did not record any charges for other-than-temporary declines in the fair value of available-for-sale debt securities or gross realized gains or losses in 2018 , 2017 or 2016 . The Company maintains strategic investments separately from the investment policy that governs its other cash, cash equivalents and marketable securities. The Company’s investments in the common stock of publicly traded companies have readily determinable fair values and are recorded in “ Marketable securities ” on its consolidated balance sheets. As of December 31, 2018 , the fair value of the Company’s investments in the common stock of CRISPR, a publicly traded company and a related party, and Moderna, which became a publicly traded company in December 2018, were $153.7 million and $13.6 million , respectively. During the year ended December 31, 2018 , the Company recorded unrealized gains of $2.6 million related to its investment in corporate equity securities, which included an unrealized gain of $9.0 million related to its investment in CRISPR offset by an unrealized loss of $6.5 million related to its investment in Moderna. In 2018, the Company invested $69.9 million in additional shares of CRISPR’s common stock. As of December 31, 2018 , the carrying value of the Company’s equity investments without readily determinable fair values, which are recorded in “ Other assets ” on its consolidated balance sheets, was $13.6 million . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in accumulated other comprehensive income (loss) by component: Unrealized Holding Gains (Losses), Net of Tax Foreign Currency Translation Adjustment On Available-For-Sale Debt Securities On Equity Securities On Foreign Currency Forward Contracts Total (in thousands) Balance at December 31, 2015 $ (2,080 ) $ 126 $ — $ 3,778 $ 1,824 Other comprehensive (loss) income before reclassifications (5,782 ) (136 ) 17,531 17,383 28,996 Amounts reclassified from accumulated other comprehensive income (loss) — — — (9,647 ) (9,647 ) Net current period other comprehensive (loss) income (5,782 ) (136 ) 17,531 7,736 19,349 Balance at December 31, 2016 $ (7,862 ) $ (10 ) $ 17,531 $ 11,514 $ 21,173 Other comprehensive (loss) income before reclassifications (13,169 ) (584 ) 7,538 (29,175 ) (35,390 ) Amounts reclassified from accumulated other comprehensive income (loss) — — — 2,645 2,645 Net current period other comprehensive (loss) income (13,169 ) (584 ) 7,538 (26,530 ) (32,745 ) Balance as of December 31, 2017 $ (21,031 ) $ (594 ) $ 25,069 $ (15,016 ) $ (11,572 ) Other comprehensive income before reclassifications 8,855 58 — 25,664 34,577 Amounts reclassified from accumulated other comprehensive income (loss) — — — 1,774 1,774 Net current period other comprehensive income 8,855 58 — 27,438 36,351 Amounts reclassified to accumulated deficit pursuant to adoption of new accounting standard 949 — (25,069 ) — (24,120 ) Balance as of December 31, 2018 $ (11,227 ) $ (536 ) $ — $ 12,422 $ 659 |
Hedging
Hedging | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Hedging | Hedging Foreign currency forward contracts - Designated as hedging instruments The Company maintains a hedging program intended to mitigate the effect of changes in foreign exchange rates for a portion of the Company’s forecasted product revenues denominated in certain foreign currencies. The program includes foreign currency forward contracts that are designated as cash flow hedges under GAAP having contractual durations from one to eighteen months. The Company recognizes realized gains and losses for the effective portion of such contracts in “ Product revenues, net ” in its consolidated statements of operations in the same period that it recognizes the product revenues that were impacted by the hedged foreign exchange rate changes. 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 were to determine that a (i) foreign currency forward contract is not highly effective as a cash flow hedge, (ii) foreign currency forward contract has ceased to be a highly effective hedge or (iii) forecasted transaction is no longer probable of occurring, the Company would discontinue hedge accounting treatment prospectively. The Company measures effectiveness based on the change in fair value of the forward contracts and the fair value of the hypothetical foreign currency forward contracts with terms that match the critical terms of the risk being hedged. As of December 31, 2018 , all hedges were determined to be highly effective and the Company has not recorded any ineffectiveness related to its hedging program since inception. The Company considers the impact of its counterparties’ credit risk on the fair value of the foreign currency forward contracts. As of December 31, 2018 and December 31, 2017 , credit risk did not change the fair value of the Company’s foreign currency forward contracts. The following table summarizes the notional amount of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges under GAAP: As of December 31, 2018 2017 Foreign Currency (in thousands) Euro $ 335,179 $ 257,230 British pound sterling 73,460 77,481 Australian dollar 52,820 30,501 Canadian dollar 43,759 — Total foreign currency forward contracts $ 505,218 $ 365,212 Foreign currency forward contracts - Not designated as hedging instruments The Company also enters into foreign currency forward contracts with contractual maturities of less than one month designed to mitigate the effect of changes in foreign exchange rates on monetary assets and liabilities, including intercompany balances. These contracts are not designated as hedging instruments under GAAP. The Company recognizes realized gains and losses for such contracts in “ Other (expense) income, net ” in its consolidated statements of operations each period. As of December 31, 2018 , the notional amount of the Company’s outstanding foreign currency forward contracts where hedge accounting under GAAP is not applied was $251.4 million . During the three years ended December 31, 2018 , the Company recognized the following related to foreign currency forward contacts in its consolidated statements of operations: December 31, 2018 2017 2016 (in thousands) Designated as hedging instruments - Reclassified from AOCI Product revenues, net $ (1,252 ) $ 768 $ 10,543 Not designated as hedging instruments Other (expense) income, net $ 623 $ 14,129 $ (6,917 ) 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 its consolidated balance sheets: As of December 31, 2018 Assets Liabilities Classification Fair Value Classification Fair Value (in thousands) Prepaid and other current assets $ 19,023 Other liabilities, current portion $ (340 ) Other assets 1,514 Other liabilities, excluding current portion (108 ) Total assets $ 20,537 Total liabilities $ (448 ) As of December 31, 2017 Assets Liabilities Classification Fair Value Classification Fair Value (in thousands) Prepaid and other current assets $ 13 Other liabilities, current portion $ (13,642 ) Other assets — Other liabilities, excluding current portion (866 ) Total assets $ 13 Total liabilities $ (14,508 ) As of December 31, 2018 , the Company expects amounts that are related to foreign exchange forward contracts designated as cash flow hedges under GAAP recorded in “ Prepaid expenses and other current assets ” and “ Other liabilities, current portion ” to be reclassified to earnings within twelve months. The following table summarizes the potential effect of offsetting derivatives by type of financial instrument designated as cash flow hedges under GAAP on the Company’s consolidated balance sheets: As of December 31, 2018 Gross Amounts Recognized Gross Amounts Offset Gross Amounts Presented Gross Amounts Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 20,537 $ — $ 20,537 $ (448 ) $ 20,089 Total liabilities (448 ) — (448 ) 448 — As of December 31, 2017 Gross Amounts Recognized Gross Amounts Offset Gross Amounts Presented Gross Amounts Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 13 $ — $ 13 $ (13 ) $ — Total liabilities (14,508 ) — (14,508 ) 13 (14,495 ) |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories consisted of the following: As of December 31, 2018 2017 (in thousands) Raw materials $ 9,677 $ 20,924 Work-in-process 87,944 74,237 Finished goods 26,739 16,669 Total $ 124,360 $ 111,830 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment, net consisted of the following: As of December 31, 2018 2017 (in thousands) Buildings $ 657,438 $ 634,061 Furniture and equipment 280,908 256,509 Software 162,601 151,890 Leasehold improvements 103,428 117,806 Computers 59,073 61,294 Total property and equipment, gross 1,263,448 1,221,560 Less: accumulated depreciation (451,443 ) (432,123 ) Total property and equipment, net $ 812,005 $ 789,437 Total property and equipment, gross, as of December 31, 2018 and 2017 , included $94.8 million and $100.9 million , respectively, for property and equipment recorded under capital leases. Accumulated depreciation, as of December 31, 2018 and 2017 , included $34.0 million and $43.4 million , respectively, for property and equipment recorded under capital leases. The Company recorded depreciation expense of $72.4 million , $61.4 million and $60.8 million in 2018 , 2017 and 2016 , respectively. The Company’s capital lease amortization is included in depreciation expense. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill Intangible Assets As of December 31, 2018 , the Company had no in-process research and development intangible assets recorded on its consolidated balance sheet. As of December 31, 2017 , the Company had a $29.0 million in-process research and development intangible asset related to VX-210 that was licensed from BioAxone in 2014 recorded on its consolidated balance sheet. In October 2018, the Company announced it would stop clinical development of VX-210 and terminate the Phase 2b clinical trial of VX-210 based on the recommendation of the clinical trial’s Data Safety Monitoring Board and the Company’s review of interim data the Company received in October 2018. As a result of this decision, the Company recorded a $29.0 million impairment charge and a benefit from income taxes of $7.9 million in 2018 attributable to noncontrolling interest. In 2017, the Company determined that there were indicators that the value of the Parion’s pulmonary ENaC platform intangible asset had become impaired. Prior to this determination, the Company reflected a $255.3 million in-process research and development intangible asset on its consolidated balance sheet related to Parion’s pulmonary ENaC platform, which included the intellectual property related to VX-371 and VX-551 that are licensed by Parion to the Company. The Company determined that the fair value of the intangible asset had decreased significantly based on data from a Phase 2 clinical trial of VX-371 that did not meet its primary efficacy endpoint. Based on this data, the Company evaluated the fair value of Parion’s pulmonary ENaC platform using the discounted cash flow approach from the perspective of a market participant and determined that the fair value of the intangible asset was zero as of September 30, 2017. The Company recorded a $255.3 million impairment charge and a benefit from income taxes of $97.7 million in 2017 attributable to noncontrolling interest. Goodwill As of each of December 31, 2018 and December 31, 2017 , goodwill of $50.4 million was recorded on the Company’s consolidated balance sheet. |
Additional Balance Sheet Detail
Additional Balance Sheet Detail | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Additional Balance Sheet Detail | Additional Balance Sheet Detail Prepaid and other current assets consisted of the following: As of December 31, 2018 2017 (in thousands) Prepaid expenses $ 74,045 $ 62,475 Collaborative accounts receivable 5,182 28,907 Other receivables and assets 61,592 75,742 Total $ 140,819 $ 167,124 Accrued expenses consisted of the following: As of December 31, 2018 2017 (in thousands) Payroll and benefits $ 124,753 $ 113,026 Research, development and commercial contract costs 115,300 98,411 Product revenue allowances 195,598 119,919 Royalty payable 101,108 73,044 Other 67,736 39,561 Total $ 604,495 $ 443,961 |
Long Term Obligations
Long Term Obligations | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long Term Obligations | Long-term Obligations Construction Financing Lease Obligation As a result of the Company being involved in the construction of several of its leased buildings in Boston and San Diego, the Company was deemed for accounting purposes to be the owner of these buildings during their construction periods and recorded project construction costs incurred by its landlords. Upon completion of these buildings, the Company determined that the underlying leases did not meet the criteria for “sale-leaseback” treatment. Accordingly, the Company depreciates the lease assets and records interest expense associated with the financing obligations for these buildings. The Company bifurcates the lease payments pursuant to these leases into (i) a portion that is allocated to the buildings and (ii) a portion that is allocated to the land on which the buildings were constructed. The portion of the lease obligations allocated to the land is treated as an operating lease. 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. San Diego Lease In 2015, the Company entered into a lease agreement for a facility in San Diego, California (the “San Diego Building”), pursuant to which it leases approximately 170,000 square feet of office and laboratory space in San Diego, California (“San Diego Lease”) for a term of 16 years . Base rent payments will commence in the second quarter of 2019. Pursuant to the San Diego Lease, during the initial 16 -year term, the Company will pay an average of approximately $10.2 million per year in aggregate rent, excluding operating expenses. The Company has the option to extend the lease term for up to two additional five -year terms. Property and equipment, net and the carrying value of the Company’s construction financing lease obligation (including current and non-current portions and excluding interest that will be imputed over the course of the Company’s underlying lease agreements for these buildings) related to the Fan Pier Buildings and the San Diego Building were as follows: As of December 31, 2018 2017 (in thousands) Property and equipment, net Fan Pier Buildings $ 462,863 $ 475,725 San Diego Building $ 113,296 $ 94,602 Construction financing lease obligation Fan Pier Buildings $ 471,058 $ 472,070 San Diego Building $ 96,105 $ 87,392 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 terminate and repay all outstanding obligations under the Company’s senior secured term loan with Macquarie US Trading LLC, as administrative agent, that had been outstanding since 2014. 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 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. |
Common Stock, Preferred Stock a
Common Stock, Preferred Stock and Equity Plans | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Common Stock, Preferred Stock and Equity Plans | Common Stock, Preferred Stock and Equity Plans Common Stock and Preferred Stock The Company is authorized to issue 500,000,000 shares of common stock. Holders of common stock are entitled to one vote per share. Holders of common stock are entitled to receive dividends, if and when declared by the Company’s Board of Directors, and to share ratably in the Company’s assets legally available for distribution to the Company’s shareholders in the event of liquidation. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The holders of common stock do not have cumulative voting rights. The Company is authorized to issue 1,000,000 shares of preferred stock in one or more series and to fix the powers, designations, preferences and relative participating, option or other rights thereof, including dividend rights, conversion rights, voting rights, redemption terms, liquidation preferences and the number of shares constituting any series, without any further vote or action by the Company’s shareholders. As of December 31, 2018 and 2017 , the Company had no shares of preferred stock issued or outstanding. Share Repurchase Program The Company’s Board of Directors approved a share repurchase program, pursuant to which the Company is authorized to repurchase up to $500.0 million of its common stock between February 1, 2018 and December 31, 2019. Under the share repurchase program, the Company is authorized to purchase shares from time to time through open market or privately negotiated transactions. Such purchases may be made pursuant to Rule 10b5-1 plans or other means as determined by the Company’s management and in accordance with the requirements of the SEC. During the year ended December 31, 2018 , the Company repurchased 2,093,891 shares of its common stock under the share repurchase program for an aggregate of $350.0 million , including commissions and fees. The Company expects to fund further repurchases of its common stock through a combination of cash on hand and cash generated by operations. Stock and Option Plans The purpose of each of the Company’s stock and option plans is to attract, retain and motivate its employees, consultants and directors. Awards granted under these plans can be incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), restricted stock (“RSs”), restricted stock units (“RSUs”) including performance-based RSUs (“PSUs”) or other equity-based awards, as specified in the individual plans. Shares issued under all of the Company’s plans are funded through the issuance of new shares. The following table contains information about the Company’s equity plans: As of December 31, 2018 Title of Plan Group Eligible Type of Award Awards Additional Awards 2013 Stock and Option Plan Employees, Non-employee Directors and Consultants NSO, 10,735,107 14,737,360 2006 Stock and Option Plan Employees, Non-employee Directors and Consultants NSO, 1,770,994 — Total 12,506,101 14,737,360 All options granted under the Company’s 2013 Stock and Option Plan (“2013 Plan”) and 2006 Stock and Option Plan (“2006 Plan”) were granted with an exercise price equal to the fair value of the underlying common stock on the date of grant. As of December 31, 2018 , the stock and option plan under which the Company is authorized to make new equity awards is the Company’s 2013 Plan. Under the 2013 Plan, no stock options can be awarded with an exercise price less than the fair market value on the date of grant. In the three years ended December 31, 2018 , the Company’s shareholders approved increases in the number of shares authorized for issuance pursuant to the 2013 Stock and Option Plan of (i) 8,000,000 shares in 2018, and (ii) 6,750,000 shares in 2017. During the three years ended December 31, 2018 , grants to current employees and directors primarily had a grant date that was the same as the date the award was approved by the Company’s Board of Directors. During the three years ended December 31, 2018 , for grants to new employees and directors, the date of grant for awards was the employee’s first day of employment or the date the director was elected to the Company’s Board of Directors. All options awarded under the Company’s stock and option plans expire not more than 10 years from the grant date. Stock Options The following table summarizes information related to the outstanding and exercisable options during the year ended December 31, 2018 : Stock Options Weighted-average Weighted-average Aggregate Intrinsic (in thousands) (per share) (in years) (in thousands) Outstanding at December 31, 2017 9,767 $ 91.57 Granted 2,297 $ 164.11 Exercised (3,076 ) $ 85.66 Forfeited (431 ) $ 125.37 Expired (6 ) $ 98.30 Outstanding at December 31, 2018 8,551 $ 111.46 6.92 $ 462,563 Exercisable at December 31, 2018 4,577 $ 93.21 5.63 $ 325,382 The aggregate intrinsic value in the table above represents the total pre-tax amount, net of exercise price, that would have been received by option holders if all option holders had exercised all options with an exercise price lower than the market price on the last business day of 2018 , which was $164.11 based on the average of the high and low price of the Company’s common stock on that date. The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during 2018 , 2017 and 2016 was $258.2 million , $302.8 million and $48.6 million , respectively. The total cash received by the Company as a result of employee stock option exercises during 2018 , 2017 and 2016 was $263.4 million , $323.3 million and $48.5 million , respectively. The following table summarizes information about stock options outstanding and exercisable at December 31, 2018 : 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) $29.07–$40.00 532 1.08 $ 34.89 532 $ 35.89 $40.01–$60.00 470 3.51 $ 50.04 470 $ 50.04 $60.01–$80.00 543 5.25 $ 74.90 533 $ 74.89 $80.01–$100.00 2,839 7.18 $ 89.19 1320 $ 89.85 $100.01–$120.00 693 6.09 $ 109.30 603 $ 109.22 $120.01–$140.00 839 6.62 $ 130.27 642 $ 130.24 $140.01–$160.00 1,400 9.06 $ 155.52 271 $ 155.30 $160.01–$180.00 526 8.50 $ 162.94 156 $ 162.94 $180.01–$181.60 709 9.53 $ 181.60 50 $ 181.60 Total 8,551 6.92 $ 111.46 4,577 $ 93.21 Restricted Stock and Restricted Stock Units (excluding PSUs) The following table summarizes the restricted stock and restricted stock unit activity of the Company during the year ended December 31, 2018 : Restricted Stock Restricted Stock Units (excluding PSUs) Number of Units Weighted-average Number of Shares Weighted-average (in thousands) (per share) (in thousands) (per share) Unvested at December 31, 2017 1,229 $ 102.12 2,011 $ 109.27 Granted — $ — 1,600 $ 164.70 Vested (690 ) $ 100.07 (629 ) $ 108.02 Cancelled (59 ) $ 101.55 (265 ) $ 132.26 Unvested at December 31, 2018 480 $ 104.91 2,717 $ 140.10 The total fair value of restricted stock that vested during 2018 , 2017 and 2016 (measured on the date of vesting) was $114.5 million , $157.0 million and $74.1 million , respectively. The total fair value of restricted stock units that vested during 2018 , 2017 and 2016 (measured on the date of vesting) was $104.8 million , $33.2 million and $5.3 million , respectively. Performance-based RSUs (PSUs) The potential range of shares issuable pursuant to the Company’s PSU awards range from 0% to 200% of the target shares based on financial and non-financial measures. Fifty percent of PSUs that could be earned have a one -year performance period with the amount actually earned dependent upon the Company’s financial performance and with vesting of the earned shares in three equal installments over a three -year period. The remaining 50% of PSUs that could be earned have a three -year performance period with the amount actually earned dependent upon the achievement of multiple clinical development milestones and with the earned shares cliff vesting at the end of the three -year performance period. The following table summarizes the PSU activity of the Company during the year ended December 31, 2018 : Performance-Based RSU Number of Units Weighted-average (in thousands) (per share) Unvested at December 31, 2017 (1) 484 $ 87.59 Granted (2) 494 $ 152.40 Vested (154 ) $ 87.13 Cancelled (65 ) $ 99.34 Unvested at December 31, 2018 759 $ 110.50 (1) “Unvested” represents the Company’s PSUs at target to the extent performance has not been certified plus the actual number of shares that continue to be subject to service conditions for which the performance has been achieved and certified. (2) “Granted” represents (i) the target number of shares issuable for grants during 2018 and (ii) any change in the number of shares issuable pursuant to outstanding PSUs based on performance certification during 2018. The total fair value of PSUs that vested during 2018 and 2017 (measured on the date of vesting) was $23.2 million and $1.3 million , respectively. There were no PSUs that vested during 2016, which was the first year that the Company granted PSUs. Employee Stock Purchase Plan The Company has an employee stock purchase plan (the “ESPP”). The ESPP permits eligible employees to enroll in a twelve -month offering period comprising two six -month purchase periods. Participants may purchase shares of the Company’s common stock, through payroll deductions, at a price equal to 85% of the fair market value of the common stock on the first day of the applicable twelve -month offering period, or the last day of the applicable six -month purchase period, whichever is lower. Purchase dates under the ESPP occur on or about May 14 and November 14 of each year. As of December 31, 2018 , there were 402,602 shares of common stock authorized for issuance pursuant to the ESPP. In 2018 , the following shares were issued to employees under the ESPP: Year Ended December 31, 2018 (in thousands, Number of shares 213,654 Average price paid per share $ 117.52 |
Stock-based Compensation Expens
Stock-based Compensation Expense | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation Expense | Stock-based Compensation Expense The Company recognizes share-based payments to employees as compensation expense using the fair value method. The fair value of stock options and shares purchased pursuant to the ESPP is calculated using the Black-Scholes option pricing model. The fair value of restricted stock and restricted stock units, including PSUs, is based on the intrinsic value on the date of grant. Stock-based compensation, measured at the grant date based on the fair value of the award, is typically recognized as expense ratably over the requisite service period. In 2017 and 2018, the expense recognized over the requisite service period was recorded net of the impact for actual awards that were forfeited prior to vesting in accordance with accounting guidance that became effective in January 1, 2017. Prior to adoption of this guidance, the expense recognized included an estimate of awards that would be forfeited prior to vesting. The effect of stock-based compensation expense during the three years ended December 31, 2018 was as follows: 2018 2017 2016 (in thousands) Stock-based compensation expense by line item: Cost of sales $ 4,543 $ 2,500 $ 2,918 Research and development expenses 203,112 181,900 153,451 Sales, general and administrative expenses 117,392 108,836 84,254 Total stock-based compensation expense included in costs and expenses $ 325,047 $ 293,236 $ 240,623 The stock-based compensation expense by type of award during the three years ended December 31, 2018 was as follows: 2018 2017 2016 (in thousands) Stock-based compensation expense by type of award: Stock options $ 107,854 $ 105,367 $ 114,768 Restricted stock and restricted stock units (including PSUs) 207,845 181,258 118,709 ESPP share issuances 9,933 9,017 7,835 Stock-based compensation expense related to inventories (585 ) (2,406 ) (689 ) Total stock-based compensation expense included in costs and expenses $ 325,047 $ 293,236 $ 240,623 The Company capitalizes stock-based compensation expense to inventories, all of which is attributable to employees who support the Company’s manufacturing operations for the Company’s products. The following table sets forth the Company’s unrecognized stock-based compensation expense as of December 31, 2018 , by type of award and the weighted-average period over which that expense is expected to be recognized: As of December 31, 2018 Unrecognized Expense Weighted-average Recognition Period (in thousands) (in years) Type of award: Stock options $ 155,465 2.64 Restricted stock and restricted stock units (including PSUs) $ 321,683 2.58 ESPP share issuances $ 5,132 0.58 Stock Options The Company issues stock options with service conditions, which are generally the vesting periods of the awards. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options at the grant date. The Black-Scholes option pricing model uses the option exercise price as well as estimates and assumptions related to the expected price volatility of the Company’s stock, the rate of return on risk-free investments, the expected period during which the options will be outstanding, and the expected dividend yield for the Company’s stock to estimate the fair value of a stock option on the grant date. The options granted during 2018 , 2017 and 2016 had a weighted-average grant-date fair value per share of $60.83 , $43.27 and $37.93 , respectively. The fair value of each option granted during 2018 , 2017 and 2016 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: 2018 2017 2016 Expected stock price volatility 40.50 % 45.31 % 46.77 % Risk-free interest rate 2.61 % 1.94 % 1.32 % Expected term of options (in years) 4.55 4.68 4.91 Expected annual dividends — — — The weighted-average valuation assumptions were determined as follows: • Expected stock price volatility: Expected stock price volatility is calculated using the trailing one month average of daily implied volatilities prior to the grant date. Implied volatility is based on options to purchase the Company’s stock with remaining terms of greater than one year that are regularly traded in the market. • Risk-free interest rate: The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term. • Expected term of options: The expected term of options represents the period of time options are expected to be outstanding. The Company uses historical data to estimate employee exercise and post-vest termination behavior. The Company believes that all groups of employees exhibit similar exercise and post-vest termination behavior and therefore does not stratify employees into multiple groups in determining the expected term of options. • Expected annual dividends: The estimate for annual dividends is $0.00 because the Company has not historically paid, and does not intend for the foreseeable future to pay, a dividend. Restricted Stock, Restricted Stock Units and Performance-based Restricted Stock Units The Company awards restricted stock and restricted stock units with service conditions, which are generally the vesting periods of the awards. Prior to 2017, the Company also awarded, to certain members of senior management, on an annual basis restricted stock and restricted stock units that vest upon the earlier of the satisfaction of (i) a performance condition or (ii) a service condition. In February 2016, the Company began granting PSUs to certain members of senior management. Half of the PSUs contain financial goals as the performance metric and the other half contain non-financial goals. A target number of shares was established for each award, however the actual number of shares that are issued when an award vests may range from zero to 200% of the target amount depending upon the level of achievement of the applicable performance metric. The financial-based PSUs vest in three equal installments over a three -year period and are expensed ratably over that same period based upon an assessment of the likely level of achievement. The non-financial based PSUs cliff vest at the end of the three -year performance period and are expensed on a straight-line basis over that same period based upon an assessment of the likely level of achievement. Employee Stock Purchase Plan The weighted-average fair value of each purchase right granted during 2018 , 2017 and 2016 was $44.04 , $35.90 and $26.86 , respectively. The following table reflects the weighted-average assumptions used in the Black-Scholes option pricing model for 2018 , 2017 and 2016 : 2018 2017 2016 Expected stock price volatility 36.51 % 39.09 % 48.22 % Risk-free interest rate 2.36 % 1.24 % 0.56 % Expected term (in years) 0.75 0.75 0.75 Expected annual dividends — — — The expected stock price volatility for ESPP offerings is based on implied volatility. The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term. The expected term represents purchases and purchase periods that take place within the offering period. The expected annual dividends estimate is $0.00 because the Company has not historically paid, and does not for the foreseeable future intend to pay, a dividend. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The components of income (loss) before (benefit from) provision for income taxes during the three years ended December 31, 2018 consisted of the following: 2018 2017 2016 (in thousands) United States $ 812,086 $ 330,340 $ (147,860 ) Foreign (211,845 ) (346,029 ) 80,494 Income (loss) before (benefit from) provision for income taxes $ 600,241 $ (15,689 ) $ (67,366 ) On a periodic basis, the Company reassesses the valuation allowance on its deferred income tax assets weighing positive and negative evidence to assess the recoverability of the deferred tax assets. In the fourth quarter of 2018, the Company assessed the valuation allowance and considered positive evidence, including significant cumulative consolidated and U.S. income over the three years ended December 31, 2018, revenue growth, clinical trial data from the Company’s triple combination regimens, competitor clinical progress and expectations regarding future profitability, and negative evidence, including the potential impact of competition on the Company’s projections and cumulative losses in one of the jurisdictions. After assessing both the positive evidence and the negative evidence, the Company determined it was more likely than not that its deferred tax assets would be realized in the future and released the valuation allowance on the majority of its NOLs and other deferred tax assets as of December 31, 2018, resulting in a benefit from income taxes of $1.56 billion . As of December 31, 2018 , the Company maintained a valuation allowance of $168.5 million related primarily to U.S. state and foreign tax attributes. The components of the (benefit from) provision for income taxes during the three years ended December 31, 2018 consisted of the following: 2018 2017 2016 (in thousands) Current taxes: United States $ 772 $ 11,559 $ (3,821 ) Foreign 15,600 3,576 1,794 State 9,018 5,025 1,836 Total current taxes 25,390 20,160 (191 ) Deferred taxes: United States (1,105,053 ) (113,805 ) 18,659 Foreign (364,919 ) (3,222 ) (3,359 ) State (42,280 ) (10,457 ) 1,556 Total deferred taxes (1,512,252 ) (127,484 ) 16,856 (Benefit from) provision for income taxes $ (1,486,862 ) $ (107,324 ) $ 16,665 A reconciliation of the (benefit from) provision for income taxes as computed by applying the U.S. federal statutory rate of 21% for the year ended December 31, 2018 and 35% for the years ended December 31, 2017 and 2016 to the (benefit from) provision for income taxes is as follows: 2018 2017 2016 (in thousands) Income (loss) before (benefit from) provision for income taxes $ 600,241 $ (15,689 ) $ (67,366 ) Expected provision for (benefit from) income taxes 126,051 (5,491 ) (23,578 ) State taxes, net of federal benefit 8,680 4,742 3,621 Foreign income tax rate differential 23,427 77,801 21,346 Tax credits (52,629 ) (58,204 ) (47,773 ) (Benefit from) provision for income taxes attributable to valuation allowances (1,563,169 ) (575,801 ) 14,837 Permanent items 1,421 15,324 24,663 Rate change — 575,192 12,836 Stock compensation (benefit) shortfalls and cancellations (49,044 ) (21,453 ) 4,162 Officer’s compensation 8,310 6,501 86 Tax attribute expiration — — 9,947 Deconsolidation of VIE (9,390 ) (126,183 ) — Uncertain tax positions 15,431 — — Other 4,050 248 (3,482 ) (Benefit from) provision for income taxes $ (1,486,862 ) $ (107,324 ) $ 16,665 In 2018, the change in the “ (Benefit from) provision for income taxes attributable to valuation allowances ” on deferred tax assets in the tax rate reconciliation table above was primarily related to the release of the Company’s valuation allowances on the majority of its NOLs and other deferred tax assets related to the United States and the United Kingdom. In 2017, the valuation allowance decreased by $178.2 million primarily due to the utilization of NOLs in the United States and a decrease in the U.S. federal corporate tax rate from 35% to 21% partially offset by the adoption of ASU 2016-09. In 2016, the valuation allowance increased by $14.8 million primarily due to an increase in tax credits in the U.S. and an increase in the NOL in the United Kingdom. On December 22, 2017, H.R.1., known as the Tax Cuts and Jobs Act, was signed into law. The new law did not have a significant impact on the Company’s consolidated financial statements for the year ended December 31, 2017. However, the reduction of the U.S. federal corporate tax rate from 35% to 21% resulted in increases to the amounts reflected in “ (Benefit from) provision for income taxes attributable to valuation allowances ” and “ Rate change ” in the Company’s tax reconciliation table above for the year ended December 31, 2017 compared to the year ended December 31, 2016. The change in the U.S. federal corporate tax rate, which was effective January 1, 2018, is also reflected in the Company’s deferred tax table below. Staff Accounting Bulletin No. 118’s (“SAB 118”) impact on the Company’s consolidated financial statements is discussed below. In 2018 and 2017, “ Deconsolidation of VIE ” in the Company’s tax rate reconciliation above related to the impairments of VX-210 and Parion’s pulmonary ENaC platform, respectively, and the decreases in the Company’s fair value of the contingent payments to BioAxone and Parion associated with these deconsolidations, respectively. Please refer to Note J, “Intangible Assets and Goodwill,” for further information regarding these impairments. The Company operates in foreign tax jurisdictions, which impose income taxes at different rates than the United States. The impact of these rate differences, which are primarily related to the Company’s operations in the United Kingdom, is included in the “ Foreign income tax rate differential ” in the Company’s tax rate reconciliation above. Other items that affected the Company’s tax rate reconciliation table were related to equity and executive compensation, research and development credits, Orphan Drug Credits and foreign amortization during the three years ended December 31, 2018 . Deferred tax assets and liabilities are determined based on the difference between financial statement and tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred taxes were as follows: As of December 31, 2018 2017 (in thousands) Deferred tax assets: Net operating loss $ 882,014 $ 1,004,404 Tax credit carryforwards 487,635 440,429 Intangible assets 241,775 54,091 Deferred revenues 19,311 19,593 Stock-based compensation 93,915 83,196 Accrued expenses 17,795 17,808 Construction financing lease obligation 130,849 109,354 Other 6,831 5,667 Gross deferred tax assets 1,880,125 1,734,542 Valuation allowance (168,491 ) (1,552,942 ) Total deferred tax assets 1,711,634 181,600 Deferred tax liabilities: Property and equipment (128,407 ) (101,019 ) Acquired intangibles — (6,341 ) Deferred revenue (73,357 ) (73,357 ) Unrealized gain (10,198 ) (6,401 ) Net deferred tax assets (liabilities) $ 1,499,672 $ (5,518 ) The Company presents its deferred tax assets and deferred tax liabilities gross on its consolidated balance sheets. As of December 31, 2018 , the majority of the Company’s net deferred tax assets were related to NOLs and tax credit carryforwards. As of December 31, 2017 , the Company’s net deferred tax liability, which was primarily attributable to the Company’s collaboration with BioAxone, was not material to the Company’s consolidated financial statements. As of December 31, 2018 , the Company had NOL carryforwards of $2.9 billion and tax credits of $350.7 million for U.S. federal income tax purposes and had NOL carryforwards of $775.5 million and tax credits of $134.9 million for U.S. state income tax purposes. These U.S. federal and state NOL carryforwards and tax credits expire at various dates through 2038 and may be used to offset future federal and state income tax liabilities, respectively. As of December 31, 2018 , the Company had foreign net operating loss carryforwards of $942.0 million , including $7.6 million that were subject to expiration and $934.4 million that had an indefinite carryforward period. Unrecognized tax benefits during the three years ended December 31, 2018 were as follows: 2018 2017 2016 (in thousands) Balance at beginning of the period $ 3,814 $ — $ 425 Increases related to current period tax positions 9,704 3,814 — Increases related to prior period tax positions 6,031 — — Decrease due to statute limitations — — (425 ) Balance at end of period $ 19,549 $ 3,814 $ — As of December 31, 2018, the Company has classified $7.6 million and $11.9 million of its unrecognized tax benefits as credits to “ Deferred tax assets ” and “ Accrued expenses ”, respectively on its consolidated balance sheet. The Company has reviewed the tax positions taken, or to be taken, in its tax returns for all tax years currently open to examination by a taxing authority. Unrecognized tax benefits represent the aggregate tax effect of differences between tax return positions and the benefits recognized in the financial statements. As of December 31, 2018, the Company had $19.5 million of gross unrecognized tax benefits, which would affect the Company's tax rate if recognized. As of December 31, 2017, the Company had $3.8 million of gross unrecognized tax benefits, which would not affect the Company's tax rate if recognized. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company recognizes interest and penalties related to income taxes as a component of its “ (Benefit from) provision for income taxes .” As of December 31, 2018 , no interest and penalties have been accrued. The Company did not recognize any material interest or penalties related to uncertain tax positions during the three years ended December 31, 2018 . In December 2017, the SEC staff issued SAB 118 to address the application of GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of H.R.1. The Company recognized the provisional tax impacts related to deemed repatriated earnings and the revaluation of deferred tax assets and liabilities and included these amounts in its consolidated financial statements for the year ended December 31, 2017. The Company did not record any adjustments in the year ended December 31, 2018 to these provisional amounts that were material to its financial statements. As of December 31, 2018, the Company’s accounting treatment is complete. As of December 31, 2018, unremitted foreign earnings, which were not significant, have been retained by the Company’s foreign subsidiaries for indefinite reinvestment. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company could be subject to immaterial withholding taxes payable to the various foreign countries. The Company files U.S. 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 NOLs or tax credit carryforwards that originate before 2011. The Company currently is under examination in Canada for 2011 through 2013, Germany for 2012 through 2015, Italy for 2015 and 2016 and the United Kingdom for 2015 and 2016. No adjustments have been reported. The Company is not under examination by any other jurisdictions for any tax year. |
Employee Benefits
Employee Benefits | 12 Months Ended |
Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits The Company has a 401(k) retirement plan (the “Vertex 401(k) Plan”) in which substantially all of its permanent U.S. employees are eligible to participate. Participants may contribute up to 60% of their annual compensation to the Vertex 401(k) Plan, subject to statutory limitations. The Company may declare discretionary matching contributions to the Vertex 401(k) Plan. The Company pays matching contributions in the form of cash. For the years ended December 31, 2018 , 2017 and 2016 , the Company contributed approximately $13.9 million , $12.3 million and $11.8 million to the plan, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Lease Obligations For information regarding the Company’s lease commitments for its corporate headquarters in Boston, Massachusetts and its location in San Diego, California please refer to Note L, “Long-term Obligations.” As of December 31, 2018 , future minimum commitments under the facility leases with initial terms of more than one year were as follows: Year Fan Pier San Diego Lease Other Total Lease (in thousands) 2019 $ 66,540 $ 5,324 $ 13,207 $ 85,071 2020 72,589 9,127 14,270 95,986 2021 72,589 9,127 12,529 94,245 2022 72,589 9,127 12,045 93,761 2023 72,589 9,530 11,952 94,071 Thereafter 389,855 119,864 65,472 575,191 Total minimum lease payments $ 746,751 $ 162,099 $ 129,475 $ 1,038,325 As of December 31, 2018 , the Company’s total sublease income to be received related to its facility leases was $6.2 million . During 2018 , 2017 and 2016 , rental expense was $17.3 million , $19.2 million and $19.1 million , respectively. The majority of the Company’s lease payments related to the Fan Pier Leases are recorded as interest expense because the Company is deemed for accounting purposes to be the owner of the Buildings. Please refer to Note L, “Long-term Obligations,” for further information. The Company has outstanding leases, which are accounted for as capital leases, for equipment and leasehold improvements. The capital leases bear interest at rates ranging from less than 1% to 6% per year. The following table sets forth the Company’s future minimum payments due under capital leases as of December 31, 2018 : Year (in thousands) 2019 $ 10,770 2020 7,282 2021 5,649 2022 3,300 2023 1,974 Thereafter 3,085 Total payments 32,060 Less: amount representing interest (2,585 ) Present value of payments $ 29,475 In addition, the Company has committed to make potential future milestone and royalty payments pursuant to certain collaboration agreements and an asset acquisition agreement. Payments generally become due and payable upon the achievement of certain developmental, regulatory and/or commercial milestones. Please refer to Note B, “Collaborative Arrangements and Acquisitions,” for further information. Guaranties and Indemnifications As permitted under Massachusetts law, the Company’s Articles of Organization and By-laws provide that the Company will indemnify certain of its officers and directors for certain claims asserted against them in connection with their service as an officer or director. The maximum potential amount of future payments that the Company could be required to make under these indemnification provisions is unlimited. However, the Company has purchased directors’ and officers’ liability insurance policies that could reduce its monetary exposure and enable it to recover a portion of any future amounts paid. No indemnification claims currently are outstanding, and the Company believes the estimated fair value of these indemnification arrangements is minimal. The Company customarily agrees in the ordinary course of its business to indemnification provisions in agreements with clinical trial investigators and sites in its drug development programs, sponsored research agreements with academic and not-for-profit institutions, various comparable agreements involving parties performing services for the Company, and its real estate leases. The Company also customarily agrees to certain indemnification provisions in its drug discovery, development and commercialization collaboration agreements. With respect to the Company’s clinical trials and sponsored research agreements, these indemnification provisions typically apply to any claim asserted against the investigator or the investigator’s institution relating to personal injury or property damage, violations of law or certain breaches of the Company’s contractual obligations arising out of the research or clinical testing of the Company’s compounds or drug candidates. With respect to lease agreements, the indemnification provisions typically apply to claims asserted against the landlord relating to personal injury or property damage caused by the Company, to violations of law by the Company or to certain breaches of the Company’s contractual obligations. The indemnification provisions appearing in the Company’s collaboration agreements are similar to those for the other agreements discussed above, but in addition provide some limited indemnification for its collaborator in the event of third-party claims alleging infringement of intellectual property rights. In each of the cases above, the indemnification obligation generally survives the termination of the agreement for some extended period, although the Company believes the obligation typically has the most relevance during the contract term and for a short period of time thereafter. The maximum potential amount of future payments that the Company could be required to make under these provisions is generally unlimited. The Company has purchased insurance policies covering personal injury, property damage and general liability that reduce its exposure for indemnification and would enable it in many cases to recover all or a portion of any future amounts paid. The Company has never paid any material amounts to defend lawsuits or settle claims related to these indemnification provisions. Accordingly, the Company believes the estimated fair value of these indemnification arrangements is minimal. Other Contingencies The Company has certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a reserve for contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There were no material contingent liabilities accrued as of December 31, 2018 or 2017 . |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Segment reporting is prepared on the same basis that the Company’s chief executive officer, who is the Company’s chief operating decision maker, manages the business, makes operating decisions and assesses performance. The Company operates in one segment, pharmaceuticals. Enterprise-wide disclosures about revenues, significant customers, and property and equipment, net by location are presented below. Revenues by Product Product revenues, net consisted of the following: 2018 2017 2016 (in thousands) SYMDEKO/SYMKEVI $ 768,657 $ — $ — ORKAMBI 1,262,166 1,320,850 979,590 KALYDECO 1,007,502 844,630 703,432 Other — — 610 Total product revenues, net $ 3,038,325 $ 2,165,480 $ 1,683,632 Revenues by Geographic Location Net product revenues are attributed to countries based on the location of the customer. Collaborative and royalty revenues are attributed to countries based on the location of the Company’s subsidiary associated with the collaborative arrangement related to such revenues. Total revenues from external customers and collaborators by geographic region consisted of the following: 2018 2017 2016 (in thousands) United States $ 2,365,079 $ 1,986,786 $ 1,321,807 Outside of the United States Europe 543,179 420,317 320,456 Other 139,339 81,549 59,914 Total revenues outside of the United States 682,518 501,866 380,370 Total revenues $ 3,047,597 $ 2,488,652 $ 1,702,177 In 2018 , 2017 and 2016 , revenues attributable to Germany and the United Kingdom contributed the largest amounts to the Company’s European revenues. Significant Customers Gross revenues and accounts receivable from each of the Company’s customers who individually accounted for 10% or more of total gross revenues and/or 10% or more of total gross accounts receivable consisted of the following: Percent of Total Gross Revenues Percent of Gross Accounts Receivable Year Ended December 31, As of December 31, 2018 (as reported under ASC 606) 2017 (as reported under ASC 605) 2016 (as reported under ASC 605) 2018 2017 Walgreen Co. 20 % 17 % 19 % 16 % 20 % Accredo/Curascript 14 % 14 % 15 % 10 % 12 % McKesson Corporation 14 % <10 % <10 % 16 % <10 % CVS/Caremark n/a <10 % 19 % n/a n/a Property and Equipment, Net by Location Property and equipment, net by location consisted of the following: As of December 31, 2018 2017 (in thousands) United States $ 778,157 $ 753,128 Outside of the United States United Kingdom 30,496 31,279 Other 3,352 5,030 Total property and equipment, net outside of the United States 33,848 36,309 Total property and equipment, net $ 812,005 $ 789,437 |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (unaudited) | Quarterly Financial Data (unaudited) The following table sets forth the Company’s quarterly financial data for the two years ended December 31, 2018 . Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share amounts) Revenues: Product revenues, net $ 637,729 $ 749,912 $ 782,511 $ 868,173 Collaborative and royalty revenues 3,070 2,245 2,024 1,933 Total revenues 640,799 752,157 784,535 870,106 Costs and expenses: Cost of sales 71,613 104,382 111,255 122,289 Research and development expenses (1) 310,553 337,532 330,510 437,881 Sales, general and administrative expenses 129,808 137,303 137,295 153,210 Restructuring (income) expenses (76 ) 62 (174 ) 4 Intangible asset impairment charge (2) — — — 29,000 Total costs and expenses 511,898 579,279 578,886 742,384 Income from operations 128,901 172,878 205,649 127,722 Interest expense, net (11,097 ) (10,106 ) (8,143 ) (4,773 ) Other income (expense), net (3) 96,838 53,819 (60,995 ) (90,452 ) Income before (benefit from) provision for income taxes 214,642 216,591 136,511 32,497 (Benefit from) provision for income taxes (4) (12,659 ) 10,341 8,055 (1,492,599 ) Net income 227,301 206,250 128,456 1,525,096 (Income) loss attributable to noncontrolling interest (17,038 ) 1,110 290 25,431 Net income attributable to Vertex $ 210,263 $ 207,360 $ 128,746 $ 1,550,527 Amounts per share attributable to Vertex common shareholders: Net income: Basic $ 0.83 $ 0.82 $ 0.51 $ 6.08 Diluted $ 0.81 $ 0.80 $ 0.50 $ 5.97 Shares used in per share calculations: Basic 253,231 254,135 254,905 254,868 Diluted 258,526 258,584 259,788 259,812 Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share amounts) Revenues: Product revenues, net $ 480,622 $ 513,988 $ 549,642 $ 621,228 Collaborative and royalty revenues (5) 234,096 30,147 28,523 30,406 Total revenues 714,718 544,135 578,165 651,634 Costs and expenses: Cost of sales 46,988 71,205 72,874 84,052 Research and development expenses (6) 273,563 289,451 454,947 306,664 Sales, general and administrative expenses 113,326 127,249 120,710 134,794 Restructuring expenses 9,999 3,523 337 387 Intangible asset impairment charge (7) — — 255,340 — Total costs and expenses 443,876 491,428 904,208 525,897 Income (loss) from operations 270,842 52,707 (326,043 ) 125,737 Interest expense, net (16,765 ) (14,664 ) (13,574 ) (12,547 ) Other expense, net (7) (544 ) (2,537 ) (77,553 ) (748 ) Income (loss) before provision for (benefit from) income taxes 253,533 35,506 (417,170 ) 112,442 Provision for (benefit from) income taxes (7) 3,985 4,337 (125,903 ) 10,257 Net income (loss) 249,548 31,169 (291,267 ) 102,185 (Income) loss attributable to noncontrolling interest (7) (1,792 ) (13,173 ) 188,315 (1,501 ) Net income (loss) attributable to Vertex $ 247,756 $ 17,996 $ (102,952 ) $ 100,684 Amounts per share attributable to Vertex common shareholders: Net income (loss): Basic $ 1.01 $ 0.07 $ (0.41 ) $ 0.40 Diluted $ 0.99 $ 0.07 $ (0.41 ) $ 0.39 Shares used in per share calculations: Basic 246,024 247,521 250,268 251,557 Diluted 248,700 251,635 250,268 256,804 1. In the fourth quarter of 2018, the Company incurred research and development expenses of $95.0 million to related license agreements with Merck KGaA, Darmstadt, Germany, and Arbor. See Note B, “Collaborative Arrangements and Acquisitions.” 2. In the fourth quarter of 2018, the Company recorded a $29.0 million intangible asset impairment charge related to its VX-210 indefinite-lived in-process research and development asset. See Note J, “Intangible Assets and Goodwill.” 3. In 2018, other income (expense), net was primarily related to changes in the fair value of the Company’s equity investment in CRISPR. See Note E, “Marketable Securities and Equity Investments.” 4. In the fourth quarter of 2018, the Company released the valuation allowance on the majority of its net operating losses and other deferred tax assets as of December 31, 2018 resulting in a benefit from income taxes of $1.56 billion . See Note O, “Income Taxes.” 5. In the first quarter of 2017, the Company recognized $230.0 million of collaborative revenues related to an upfront payment from Merck KGaA, Darmstadt, Germany, pursuant to a collaboration. In each of the second and third quarters of 2017, the Company recognized $20.0 million of collaborative revenues related to payments that Parion, which was a variable interest entity during these periods, received from Shire pursuant to a license agreement. In the fourth quarter of 2017, the Company recognized $25.0 million of collaborative revenues related to a milestone achieved pursuant to its license agreement with Janssen pursuant to which Janssen is developing pimodivir for the treatment of influenza. See Note B, “Collaborative Arrangements and Acquisitions.” 6. In the third quarter of 2017, the Company incurred research and development expenses of $160.0 million to acquire certain CF assets including VX-561 from Concert. See Note B, “Collaborative Arrangements and Acquisitions.” 7. In the third quarter of 2017, the Company recorded a $255.3 million intangible asset impairment charge related to Parion’s pulmonary ENaC platform indefinite-lived in-process research and development asset, a decrease in the fair value of the contingent payments payable by the Company to Parion of $69.6 million and benefit from income taxes of $126.2 million resulting from these charges. These charges and benefit from income taxes were attributable to noncontrolling interest. See Note B, “Collaborative Arrangements and Acquisitions,” and Note J, “Intangible Assets and Goodwill.” |
Nature of Business and Accoun_2
Nature of Business and Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements reflect the operations of (i) the Company, (ii) its wholly-owned subsidiaries and (iii) consolidated variable interest entities (“VIEs”). As of September 30, 2017, the Company deconsolidated Parion Sciences, Inc. (“Parion”), a VIE the Company had consolidated since 2015. As of December 31, 2018, the Company deconsolidated BioAxone Biosciences, Inc. (“BioAxone”), a VIE the Company had consolidated since 2014. As of December 31, 2018, the Company does not have any consolidated VIEs. All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. Please refer to Note R, “ Segment Information, ” for enterprise-wide disclosures regarding the Company’s revenues, major customers and long-lived assets by geographic area. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the amounts of revenues and expenses during the reported periods. Significant estimates in these consolidated financial statements have been made in connection with the calculation of revenues, research and development expenses, the fair value of intangible assets, goodwill, noncontrolling interest, the consolidation and deconsolidation of VIEs, deferred tax asset valuation allowances and the provision for or benefit from income taxes. The Company bases its estimates on historical experience and various other assumptions, including in certain circumstances future projections, that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known. |
Revenue Recognition | Revenue Recognition Pursuant to Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers (“ ASC 606 ”), the Company recognizes revenue when a customer obtains control of promised goods or services. The Company records the amount of revenue that reflects the consideration that it expects to receive in exchange for those goods or services. The Company applies the following five-step model in order to determine this amount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration to which it is entitled in exchange for the goods or services that it transfers to the customer. Once a contract is determined to be within the scope of ASC 606 at contract inception, the Company reviews the contract to determine which performance obligations it must deliver and which of these performance obligations are distinct. The Company recognizes as revenue the amount of the transaction price that is allocated to each performance obligation when that performance obligation is satisfied or as it is satisfied. Generally, the Company's performance obligations are transferred to customers at a point in time, typically upon delivery. Product Revenues, Net The Company sells its products principally to a limited number of specialty pharmacy and specialty distributors in the United States, which account for the largest portion of its total revenues, and makes international sales primarily to specialty distributors and retail chains, as well as hospitals and clinics, many of which are government-owned or supported (collectively, its “Customers”). The Company’s Customers in the United States subsequently resell the products to patients and health care providers. In accordance with ASC 606 , the Company recognizes net revenues from product sales when the Customers obtain control of the Company’s products, which typically occurs upon delivery to the Customer. The Company’s payment terms are approximately 30 days in the United States and consistent with prevailing practice in international markets. Revenues from product sales are recorded at the net sales price, or “transaction price,” which includes estimates of variable consideration that result from (a) invoice discounts for prompt payment and distribution fees, (b) government and private payor rebates, chargebacks, discounts and fees and (c) costs of co-pay assistance programs for patients, as well as other incentives for certain indirect customers. Reserves are established for the estimates of variable consideration based on the amounts earned or to be claimed on the related sales. The reserves are classified as reductions to “ Accounts receivable, net ” if payable to a Customer or “ Accrued expenses ” if payable to a third-party. Where appropriate, the Company utilizes the expected value method to determine the appropriate amount for estimates of variable consideration based on factors such as the Company’s historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The amount of variable consideration that is included in the transaction price may be constrained and is included in net product revenues only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results vary from the Company’s estimates, the Company adjusts these estimates, which would affect net product revenue and earnings in the period such variances become known. Invoice Discounts and Distribution Fees: The Company generally provides invoice discounts on product sales to its Customers for prompt payment and pays fees for distribution services, such as fees for certain data that Customers provide to the Company. The Company estimates that, based on its experience, its Customers will earn these discounts and fees, and deducts the full amount of these discounts and fees from its gross product revenues and accounts receivable at the time such revenues are recognized. Rebates, Chargebacks, Discounts and Fees: The Company contracts with government agencies (its “Third-party Payors”) so that products will be eligible for purchase by, or partial or full reimbursement from, such Third-party Payors. The Company estimates the rebates, chargebacks, discounts and fees it will provide to Third-party Payors and deducts these estimated amounts from its gross product revenues at the time the revenues are recognized. For each product, the Company estimates the aggregate rebates, chargebacks and discounts that it will provide to Third-party Payors based upon (i) the Company’s contracts with these Third-party Payors, (ii) the government-mandated discounts and fees applicable to government-funded programs, (iii) information obtained from the Company’s Customers and other third-party data regarding the payor mix for such product and (iv) historical experience. Other Incentives: Other incentives that the Company offers include co-pay mitigation rebates provided by the Company to commercially insured patients who have coverage and who reside in states that permit co-pay mitigation programs. Based upon the terms of the Company’s co-pay mitigation programs, the Company estimates average co-pay mitigation amounts for each of its products in order to establish appropriate accruals. The Company makes significant estimates and judgments that materially affect its recognition of net product revenues. The Company adjusts its estimated rebates, chargebacks and discounts based on new information, including information regarding actual rebates, chargebacks and discounts for its products, as it becomes available. Claims by third-party payors for rebates, chargebacks and discounts frequently are submitted to the Company significantly after the related sales, potentially resulting in adjustments in the period in which the new information becomes known. The Company’s credits to product revenue related to prior period sales have not been significant and primarily related to rebates and discounts. The Company excludes taxes collected from Customers relating to product sales and remitted to governmental authorities from revenues. Contract Liabilities The Company’s contract liabilities relate to annual contracts with government-owned and supported customers in international markets that limit the amount of annual reimbursement the Company can receive. Upon exceeding the annual reimbursement amount, products are provided free of charge, which is a material right pursuant to ASC 606. These contracts, which are classified as “ Other liabilities, current portion ,” include upfront payments and fees. The Company defers a portion of the consideration received for shipments made up to the annual reimbursement limit, and the deferred amount is recognized as revenue when the free products are shipped. The Company’s product revenue contracts include performance obligations that are one year or less. The Company’s contract liabilities of $24.9 million and $1.7 million as of December 31, 2018 and 2017 , respectively, represent balances related to contracts with annual reimbursement limits in several international markets in which the annual period associated with the contract is not the same as the Company’s fiscal year. In the majority of international markets in which the Company has a contract with an annual reimbursement limit, the annual period associated with the contract is the same as the Company’s fiscal year, resulting in no contract liability balance at the end of the year and no revenues recognized in the current year related to performance obligations satisfied in previous periods. For the international markets in which the periods associated with these annual contracts are not the same as the Company’s fiscal year, the Company recognizes revenues related to performance obligations satisfied in previous years; however, these amounts are not material to the Company’s financial statements and do not relate to any performance obligations that were satisfied more than 12 months prior to the beginning of the current year. The revenues recognized in the year ended December 31, 2018 related to performance obligations satisfied in the prior year were $1.7 million . French Early Access Programs Pursuant to ASC 605, Revenue Recognition (“ ASC 605 ”), which was applicable until December 31, 2017, the Company only recognized revenues from product sales if it determined that the price was fixed or determinable at the time of delivery. If the Company determined that the price was not fixed or determinable, it deferred the recognition of revenues. If the Company was able to determine that the price was fixed or determinable, it recognized the net product revenues associated with the units. The Company began distributing ORKAMBI through early access programs in France during the fourth quarter of 2015 and is engaged in ongoing pricing discussions regarding the final price for ORKAMBI in France. The Company’s ORKAMBI net product revenues for 2017, 2016 and 2015 did not include any net product revenues from sales of ORKAMBI in France because the price was not fixed or determinable. The Company expects that the difference between the amounts collected based on the invoiced price and the final price for ORKAMBI in France will be returned to the French government. As of December 31, 2018 and 2017 , the Company’s consolidated balance sheets included $354.4 million and $232.4 million , respectively, classified as “ Early access sales accrual ” related to amounts collected in France as payment for shipments of ORKAMBI under the early access programs, which is considered to be a refund liability pursuant to ASC 606. Upon adopting ASC 606 in 2018, the Company recorded an $8.3 million cumulative effect adjustment to “ Accumulated deficit ” primarily related to shipments of ORKAMBI under the early access programs in France. The Company determined the amount of the adjustment based upon (i) the status of pricing discussions in France upon adoption, (ii) its estimate of the amount of consideration it expects to retain related to ORKAMBI sales in France that occurred on or prior to December 31, 2017 that will not be subject to a significant reversal in amounts recognized and (iii) recognition of costs previously deferred related to the ORKAMBI sales in France. For ORKAMBI sales in France that occurred after December 31, 2017 under the early access programs, the Company has recognized net product revenues based on the estimate of consideration it expects to retain that will not be subject to a significant reversal in amounts recognized. If the Company’s estimate regarding the amounts it will receive for ORKAMBI supplied pursuant to these early access programs changes, it will reflect the effect of the change in estimate in net product revenues in the period in which the change in estimate occurs and will include adjustments to all prior sales of ORKAMBI under the early access programs. Please refer to Recent Accounting Pronouncements included in this Note A, “Nature of Business and Accounting Policies,” below for more information regarding the revenue recognition guidance adopted as of January 1, 2018. Collaborative and Royalty Revenues The Company recognizes collaborative revenues generated through collaborative research, development and/or commercialization agreements. The terms of these agreements typically include payment to the Company related to one or more of the following: nonrefundable, upfront license fees; development and commercial milestones; funding of research and/or development activities; and royalties on net sales of licensed products. Revenue is recognized upon satisfaction of a performance obligation by transferring control of a good or service to the collaborator. For each collaborative research, development and/or commercialization agreement that results in revenue, the Company identifies all material performance obligations, which may include a license to intellectual property and know-how, research and development activities and/or transition activities. In order to determine the transaction price, in addition to any upfront payment, the Company estimates the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract. The Company constrains (reduces) the estimate of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur throughout the life of the contract. When determining if variable consideration should be constrained, management considers whether there are factors outside the Company’s control that could result in a significant reversal of revenue. In making these assessments, the Company considers the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required. Once the estimated transaction price is established, amounts are allocated to the performance obligations that have been identified. The transaction price is generally allocated to each separate performance obligation on a relative standalone selling price basis. In order to account for these agreements, the Company must develop assumptions that require judgment to determine the standalone selling price, which may include (i) the probability of obtaining marketing approval for the drug candidate, (ii) estimates regarding the timing of and the expected costs to develop and commercialize the drug candidate, (iii) estimates of future cash flows from potential product sales with respect to the drug candidate and (iv) appropriate discount and tax rates. Standalone selling prices used to perform the initial allocation are not updated after contract inception. The Company does not include a financing component to its estimated transaction price at contract inception unless it estimates that certain performance obligations will not be satisfied within one year. Upfront License Fees: If a license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in an arrangement, the Company recognizes revenue from the related nonrefundable, upfront license fees based on the relative standalone selling price prescribed to the license compared to the total selling price of the arrangement. The revenue is recognized when the license is transferred to the collaborator and the collaborator is able to use and benefit from the license. For licenses that are not distinct from other obligations identified in the arrangement, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, the Company applies an appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront license fees. The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition. Development and Regulatory Milestone Payments: Depending on facts and circumstances, the Company may conclude that it is appropriate to include certain milestones in the estimated transaction price or that it is appropriate to fully constrain the milestones. A milestone payment is included in the transaction price in the reporting period that the Company concludes that it is probable that recording revenue in the period will not result in a significant reversal in amounts recognized in future periods. The Company may record revenues from certain milestones in a reporting period before the milestone is achieved if the Company concludes that achievement of the milestone is probable and that recognition of revenue related to the milestone will not result in a significant reversal in amounts recognized in future periods. The Company records a corresponding contract asset when this conclusion is reached. Milestone payments that have not been included in the transaction price to date are fully constrained. These milestones remain fully constrained until the Company concludes that their achievement is probable and that recognition of the related revenue will not result in a significant reversal in amounts recognized in future periods. The Company re-evaluates the probability of achievement of such development milestones and any related constraint each reporting period and adjusts its estimate of the overall transaction price, including the amount of collaborative revenue that it has recorded, if necessary. Research and Development Activities/Transition Services: If the Company is entitled to reimbursement from its collaborators for specified research and development expenses, it accounts for the related services that it provides as separate performance obligations if it determines that these services represent a material right. The Company also determines whether the reimbursement of research and development expenses should be accounted for as collaborative revenues or an offset to research and development expenses in accordance with the provisions of gross or net revenue presentation. The Company recognizes the corresponding revenues or records the corresponding offset to research and development expenses as it satisfies the related performance obligations. Sales-based Milestone and Royalty Payments: The Company’s collaborators may be required to pay the Company sales-based milestones or royalties on future sales of commercial products. The Company recognizes revenues related to sales-based milestone and royalties upon the later to occur of (i) achievement of the collaborator’s underlying sales or (ii) satisfaction of any performance obligation(s) related to these sales, in each case assuming the license to the Company’s intellectual property is deemed to be the predominant item to which the sales-based milestones and/or royalties relate. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentration of credit risk consist principally of money market funds and marketable securities. The Company places these investments with highly rated financial institutions, and, by policy, limits the amounts of credit exposure to any one financial institution. These amounts at times may exceed federally insured limits. The Company also maintains a foreign currency hedging program that includes foreign currency forward contracts with several counterparties. The Company has not experienced any credit losses related to these financial instruments and does not believe it is exposed to any significant credit risk related to these instruments. The Company also is subject to credit risk from its accounts receivable related to its product sales and collaborators. The Company evaluates the creditworthiness of each of its customers and has determined that all of its material customers are creditworthy. To date, the Company has not experienced significant losses with respect to the collection of its accounts receivable. The Company’s receivables from Greece, Italy, Portugal and Spain were not material as of December 31, 2018 . The Company believes that its allowance for doubtful accounts was adequate at December 31, 2018 . Please refer to Note R, “ Segment Information, ” for further information. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents. |
Marketable Securities | Marketable Securities As of December 31, 2018 , the Company’s marketable securities consisted of investments in available-for-sale debt securities, including U.S. Treasury securities, government-sponsored enterprise securities, corporate debt securities and commercial paper, and corporate equity securities with readily determinable fair values. The Company classifies marketable securities available to fund current operations as current assets on its consolidated balance sheets. Marketable securities are classified as long-term assets on the consolidated balance sheets if (i) they have been in an unrealized loss position for longer than one year and (ii) the Company has the ability and intent to hold them (a) until the carrying value is recovered and (b) such holding period may be longer than one year. The Company’s marketable securities are stated at fair value. The fair value of these securities is based on quoted prices for identical or similar assets. The Company records unrealized gains (losses) on available-for-sale debt securities as a component of “ Accumulated other comprehensive income (loss) ,” which is a separate component of shareholders’ equity on its consolidated balance sheet, until such gains and losses are realized. Pursuant to the adoption of Accounting Standards Update (“ASU”) No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ ASU 2016-01 ”) on January 1, 2018, the Company began recording changes in the fair value of its investments in corporate equity securities to “Other (expense) income, net” in the Company’s consolidated statements of operations. Prior to its adoption of ASU 2016-01 in 2018, the Company recorded changes in the fair value of its investments in corporate equity securities to “Accumulated other comprehensive income (loss).” The Company reviews investments in marketable debt securities for other-than-temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers whether it has an intent to sell, or whether it is more likely than not that the Company will be required to sell, the investment before recovery of the investment’s amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with the Company’s investment policy, the severity and the duration of the impairment and changes in value subsequent to year-end. If a decline in the fair value is considered other-than-temporary, based on available evidence, the unrealized loss is transferred from other comprehensive income (loss) to the consolidated statements of operations. Realized gains and losses are determined using the specific identification method and are included in “ Other (expense) income, net ” in the consolidated statements of operations. |
Accounts Receivable | Accounts Receivable The Company deducts invoice discounts for prompt payment and fees for distribution services from its accounts receivable based on its experience that the Company’s Customers will earn these discounts and fees. The Company’s estimates for its allowance for doubtful accounts, which have not been significant to date, are determined based on existing contractual payment terms and historical payment patterns. |
Stock-based Compensation Expense | Stock-based Compensation Expense The Company expenses the fair value of employee stock options and other forms of stock-based employee compensation over the associated employee service period on a straight-line basis. Stock-based compensation expense is determined based on the fair value of the award at the grant date and is adjusted each period to reflect actual forfeitures and the outcomes of certain performance conditions. For awards with performance conditions in which the award does not vest unless the performance condition is met, the Company recognizes expense if, and to the extent that, the Company estimates that achievement of the performance condition is probable. If the Company concludes that vesting is probable, it recognizes expense from the date it reaches this conclusion through the estimated vesting date. For awards with performance conditions that accelerate vesting of the award, the Company estimates the likelihood of satisfaction of the performance conditions, which affects the period over which the expense is recognized, and recognizes the expense using the accelerated attribution model. The Company provides to employees who have rendered a certain number of years’ to the Company and meet certain age requirements, partial or full acceleration of vesting of these equity awards, subject to certain conditions including a notification period, upon a termination of employment other than for cause. Less than 5% of the Company’s employees were eligible for partial or full acceleration of any of their equity awards as of December 31, 2018 . The Company recognizes stock-based compensation expense related to these awards over a service period reflecting qualified employees’ eligibility for partial or full acceleration of vesting. |
Research and Development Expenses | Research and Development Expenses The Company expenses as incurred all research and development expenses, including amounts funded by research and development collaborations. The Company capitalizes nonrefundable advance payments made by the Company for research and development activities and expenses the payments as the related goods are delivered or the related services are performed. Research and development expenses are comprised of costs incurred by the Company in performing research and development activities, including salary and benefits; stock-based compensation expense; laboratory supplies and other direct expenses; outsourced services, including clinical trial and pharmaceutical development costs; collaboration and asset acquisition payments; expenses associated with drug supplies that are not being capitalized; and infrastructure costs, including facilities costs and depreciation expense. |
Advertising Expenses | Advertising Expenses The Company expenses the costs of advertising, including promotional expenses, as incurred. |
Inventories | Inventories The Company values its inventories at the lower-of-cost or net realizable value. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and writes down any excess and obsolete inventories to their net realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases are capitalized and recorded upon sale in “ Cost of sales ” in the consolidated statements of operations. Shipping and handling costs incurred for product shipments are recorded as incurred in “ Cost of sales ” in the consolidated statements of operations. The Company capitalizes inventories produced in preparation for initiating sales of a drug candidate when the related drug candidate is considered to have a high likelihood of regulatory approval and the related costs are expected to be recoverable through sales of the inventories. In determining whether or not to capitalize such inventories, the Company evaluates, among other factors, information regarding the drug candidate’s safety and efficacy, the status of regulatory submissions and communications with regulatory authorities and the outlook for commercial sales, including the existence of current or anticipated competitive drugs and the availability of reimbursement. In addition, the Company evaluates risks associated with manufacturing the drug candidate and the remaining shelf-life of the inventories. |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost. Depreciation expense is recorded using the straight-line method over the estimated useful life of the related asset, generally seven to ten years for furniture and equipment, three to five years for computers and software, 40 years for buildings and for leasehold improvements, the shorter of the useful life of the improvements or the estimated remaining life of the associated lease. Amortization expense of assets acquired under capital leases is included in depreciation expense. Maintenance and repairs to an asset that do not improve or extend its life are charged to operations. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in the Company’s consolidated statements of operations. The Company performs an assessment of the fair value of the assets if indicators of impairment are identified during a reporting period and records the assets at the lower of the net book value or the fair value of the assets. The Company capitalizes internal costs incurred to develop software for internal use during the application development stage. Amortization of capitalized internally developed software costs is recorded in depreciation expense over the useful life of the related asset. The Company records certain construction costs incurred by a landlord as an asset and a corresponding financing obligation on the Company’s consolidated balance sheets when the Company is determined to be the owner of a building during construction for accounting purposes. Upon completion of the project, the Company performs a sale-leaseback analysis to determine if the Company can remove the assets and corresponding liability from its consolidated balance sheet. |
Capital Leases | Capital Leases The assets and liabilities associated with capital lease agreements are recorded at the present value of the minimum lease payments at the inception of the lease agreement. The assets are depreciated using the straight-line method over the shorter of the useful life of the related asset or the remaining life of the associated lease. Amortization of assets that the Company leases pursuant to a capital lease is included in depreciation expense. The Company performs an assessment of the fair value of the assets if indicators of impairment are identified during a reporting period and records the assets at the lower of the net book value or the fair value of the assets. Assets recorded under capital leases are recorded in “ Property and equipment, net ” and liabilities related to those assets are recorded in “ Capital lease obligations, current portion ” and “ Capital lease obligations, excluding current portion ” on the Company’s consolidated balance sheets. |
Income Taxes | Income Taxes Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the income tax bases of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. On a periodic basis, the Company reassesses the valuation allowance on its deferred income tax assets weighing positive and negative evidence to assess the recoverability of its deferred tax assets. The Company includes, among other things, its recent financial performance and its future projections in this periodic assessment. The Company records liabilities related to uncertain tax positions by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company does not believe any such uncertain tax positions currently pending will have a material adverse effect on its consolidated financial statements. |
Variable Interest Entities | Variable Interest Entities The Company reviews each collaboration agreement pursuant to which it licenses assets owned by a collaborator in order to determine whether or not it has a variable interest via the license agreement with the collaborator and if the variable interest is a variable interest in the collaborator as a whole. In assessing whether the Company has a variable interest in the collaborator as a whole, the Company considers and makes judgments regarding the purpose and design of the entity, the value of the licensed assets to the collaborator, the value of the collaborator’s total assets and the significant activities of the collaborator. If the Company has a variable interest in the collaborator as a whole, the Company assesses whether or not the Company is the primary beneficiary of that VIE based on a number of factors, including (i) which party has the power to direct the activities that most significantly affect the VIE’s economic performance, (ii) the parties’ contractual rights and responsibilities pursuant to the collaboration agreement and (iii) which party has the obligation to absorb losses of or the right to receive benefits from the VIE that could be significant to the VIE. If the Company determines it is the primary beneficiary of a VIE at the onset of the collaboration agreement, the collaboration is treated as a business combination and the Company consolidates the financial statements of the VIE into the Company’s consolidated financial statements. On a quarterly basis, the Company evaluates whether it continues to be the primary beneficiary of any consolidated VIEs. If the Company determines that it is no longer the primary beneficiary of a consolidated VIE, or no longer has a variable interest in the VIE, it deconsolidates the VIE in the period that the determination is made. Assets and liabilities recorded as a result of consolidating VIEs’ financial results into the Company’s consolidated balance sheet do not represent additional assets that could be used to satisfy claims against the Company’s general assets or liabilities for which creditors have recourse to the Company’s general assets. |
Fair Value of In-process Research and Development Assets and Contingent Payments | Fair Value of In-process Research and Development Assets and Contingent Payments The present-value models the Company uses to estimate the fair values of in-process research and development assets and contingent payments pursuant to collaborations incorporate significant assumptions. The Company’s discounted cash flow models pertaining to in-process research and development assets include: (i) assumptions regarding the probability of obtaining marketing approval or a drug candidate; (ii) estimates regarding the timing of and the expected costs to develop and commercialize a drug candidate; (iii) estimates of future cash flows from potential product sales with respect to a drug candidate; and (iv) appropriate discount and tax rates. |
In-process Research and Development Assets | In-process Research and Development Assets The Company records the fair value of in-process research and development assets as of the transaction date of a business combination. Each of these assets is accounted for as an indefinite-lived intangible asset and is maintained on the Company’s consolidated balance sheet until either the project underlying it is completed or the asset becomes impaired. If the asset becomes impaired or is abandoned, the carrying value of the related intangible asset is written down to its fair value, and an impairment charge is recorded in the period in which the impairment occurs. If a project is completed, the carrying value of the related intangible asset is amortized as a part of “ Cost of sales ” over the remaining estimated life of the asset beginning in the period in which the project is completed. In-process research and development assets are tested for impairment on an annual basis as of October 1, and more frequently if indicators are present or changes in circumstances suggest that impairment may exist. In-process research and development assets that are acquired in a transaction that does not qualify as a business combination under GAAP and that do not have an alternative future use are expensed in the period in which the assets are acquired. |
Goodwill | Goodwill The difference between the purchase price and the fair value of assets acquired and liabilities assumed in a business combination is allocated to goodwill. Goodwill is evaluated for impairment on an annual basis as of October 1, and more frequently if indicators are present or changes in circumstances suggest that impairment may exist. |
Noncontrolling Interest | Noncontrolling Interest The Company records “ Noncontrolling interest ,” which has historically related to consolidated VIEs, on its consolidated balance sheets. The Company records “ Loss (income) attributable to noncontrolling interest ” on its consolidated statements of operations, reflecting the VIEs’ net loss (income) for the reporting period, adjusted for changes in the noncontrolling interest holders’ claim to net assets, including contingent milestone, royalty and option payments, each of which is evaluated each reporting period. |
Deconsolidation and Discounted Operations | Deconsolidation and Discontinued Operations Upon the occurrence of certain events and on a regular basis, the Company evaluates whether it no longer has a controlling interest in its subsidiaries, including consolidated VIEs. If the Company determines it no longer has a controlling interest, the subsidiary is deconsolidated. The Company records a gain or loss on deconsolidation based on the difference on the deconsolidation date between (i) the aggregate of (a) the fair value of any consideration received, (b) the fair value of any retained noncontrolling investment in the former subsidiary and (c) the carrying amount of any noncontrolling interest in the subsidiary being deconsolidated, less (ii) the carrying amount of the former subsidiary’s assets and liabilities. The Company assesses whether a deconsolidation is required to be presented as discontinued operations in its consolidated financial statements on the deconsolidation date. This assessment is based on whether or not the deconsolidation represents a strategic shift that has or will have a major effect on the Company’s operations or financial results. If the Company determines that a deconsolidation requires presentation as a discontinued operation on the deconsolidation date, or at any point during the one year period following such date, it will present the former subsidiary as a discontinued operation in current and comparative period financial statements. |
Derivative Instruments, Embedded Derivatives and Hedging Activities | Derivative Instruments and Embedded Derivatives The Company has entered into financial transactions involving free-standing derivative instruments and embedded derivatives in the past. Embedded derivatives are required to be bifurcated from the host instruments if the derivatives are not clearly and closely related to the host instruments. The Company determines the fair value of each derivative instrument or embedded derivative that is identified on the date of issuance and at the end of each quarterly period. The estimates of the fair value of the derivatives include significant assumptions regarding the estimates market participants would make in order to evaluate these derivatives. Hedging Activities The Company recognizes the fair value of hedging instruments that are designated and qualify as hedging instruments pursuant to GAAP, foreign currency forward contracts, as either assets or liabilities on the consolidated balance sheets. Changes in the fair value of these instruments are recorded each period in “ Accumulated other comprehensive income (loss) ” as unrealized gains and losses until the forecasted underlying transaction occurs. Unrealized gains and losses on these foreign currency forward contracts are included in “ Prepaid expenses and other current assets ” or “ Other assets ,” and “ Other liabilities, current portion ” or “ Other liabilities, excluding current portion ,” respectively, on the Company’s consolidated balance sheets depending on the remaining period until their contractual maturity. Realized gains and losses for the effective portion of such contracts are recognized in “ Product revenues, net ” in the consolidated statement of operations in the same period that it recognizes the product revenues that were impacted by the hedged foreign exchange rate changes. The Company classifies the cash flows from hedging instruments in the same category as the cash flows from the hedged items. Certain of the Company’s hedging instruments are subject to master netting arrangements to reduce the risk arising from such transactions with its counterparties. The Company presents unrealized gains and losses on its foreign currency forward contracts on a gross basis within its consolidated balance sheets. The Company assesses, both at inception and on an ongoing basis, whether the foreign currency forward contracts used in hedging transactions are highly effective in offsetting the changes in cash flows of the hedged items. The Company also assesses hedge ineffectiveness quarterly and, if determined to be ineffective, records the gain or loss related to the ineffective portion to earnings in “ Other (expense) income, net ” in its consolidated statements of operations. The Company did not record any ineffectiveness related to these hedging transactions in the three years ended December 31, 2018 . The Company also enters into foreign currency forward contracts with contractual maturities of less than one month designed to mitigate the effect of changes in foreign exchange rates on monetary assets and liabilities including intercompany balances. These contracts are not designated as hedging instruments pursuant to GAAP. Realized gains and losses for such contracts are recognized in “ Other (expense) income, net ” in the consolidated statement of operations each period. |
Restructuring Expenses | Restructuring Expenses The Company records costs and liabilities associated with exit and disposal activities based on estimates of fair value in the period the liabilities are incurred. The Company’s exit and disposal activities have primarily been associated with the Company’s facilities, but also have included the termination of employees in some cases. The Company’s initial estimate of its liabilities for net ongoing costs associated with its facility obligations are recorded at fair value on the cease use date. On a quarterly basis, the Company evaluates and adjusts these liabilities as appropriate for changes in circumstances. Changes to the Company’s estimate of these liabilities are recorded as additional restructuring expenses (credits). These costs are included in “ Restructuring (income) expenses ” on the Company’s consolidated statements of operations. The Company has adopted several plans to restructure its facilities and operations for which it has incurred restructuring expenses. The most significant restructuring event during the three years ended December 31, 2018 commenced in February 2017 upon the Company’s decision to consolidate its research activities into its Boston, Milton Park and San Diego locations. The Company closed its research site in Canada as a result of this decision affecting approximately 70 positions. The Company’s lease for its research site in Canada expired in October 2018. As of December 31, 2018 , the Company has no restructuring liabilities recorded on its consolidated balance sheet and does not anticipate any additional charges related to this restructuring event in the future. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss), which includes foreign currency translation adjustments and unrealized gains and losses on foreign currency forward contracts and certain marketable securities. For purposes of comprehensive income (loss) disclosures, the Company records provisions for or benefits from income taxes related to the unrealized gains and losses on foreign currency forward contracts and certain marketable securities. The Company does not record provisions for or benefits from income taxes related to the cumulative translation adjustment, as the Company intends to permanently reinvest undistributed earnings in its foreign subsidiaries |
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions The majority of the Company’s operations occur in entities that have the U.S. dollar denominated as their functional currency. Non-U.S. dollar denominated functional currency subsidiaries have assets and liabilities translated into U.S. dollars at rates of exchange in effect at the end of the year. Revenue and expense amounts are translated using the average exchange rates for the period. Net unrealized gains and losses resulting from foreign currency translation are included in “ Accumulated other comprehensive income (loss) .” |
Net Loss Per Share Attributable to Vertex Common Stockholders | Net Loss Per Share Attributable to Vertex Common Shareholders Basic and diluted net loss per share attributable to Vertex common shareholders are presented in conformity with the two-class method required for participating securities. Under the two-class method, earnings are allocated to (i) Vertex common shares, excluding unvested restricted stock, and (ii) participating securities, based on their respective weighted-average shares outstanding for the period. Shares of unvested restricted stock granted under the Company’s Amended and Restated 2006 Stock and Option Plan have the non-forfeitable right to receive dividends on an equal basis with other outstanding common stock. As a result, these unvested shares of restricted stock are considered participating securities under the two-class method. Potentially dilutive shares result from the assumed exercise of outstanding stock options (the proceeds of which are then assumed to have been used to repurchase outstanding stock using the treasury stock method). Basic net loss per share attributable to Vertex common shareholders is based upon the weighted-average number of common shares outstanding during the period, excluding restricted stock that has been issued but is not yet vested. Diluted net loss per share attributable to Vertex common shareholders is based upon the weighted-average number of common shares outstanding during the period plus additional weighted-average common equivalent shares outstanding during the period when the effect is dilutive. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements Revenue Recognition In 2014, the Financial Accounting Standards Board (“FASB”) issued ASC 606 . The new guidance became effective January 1, 2018. ASC 606 applies a more principles-based approach to recognizing revenue. Under ASC 606 , revenue is recognized when a customer obtains control of promised goods or services 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 Company adopted ASC 606 on January 1, 2018 using the modified-retrospective adoption method for all contracts that were not completed as of the date of adoption. Under the modified-retrospective method, the Company recognized the cumulative effect of applying the standard within “ Accumulated deficit ” on its consolidated balance sheet as of January 1, 2018. For all reporting periods, the Company has not disclosed the value of unsatisfied performance obligations for all product revenue contracts with an original expected length of one year or less, which is an optional exemption that is permitted under the adoption rules. Based on the Company’s review of existing customer contracts as of January 1, 2018, it concluded that the only significant impact that the adoption of ASC 606 had on its financial statements relates to shipments of ORKAMBI under early access programs in France. Prior to the adoption of ASC 606 , the Company did not recognize revenue on the proceeds received from sales of ORKAMBI under early access programs in France because the price was not fixed or determinable based on the status of ongoing pricing discussions. As of January 1, 2018, the Company recorded a cumulative effect adjustment to its accumulated deficit of $8.3 million related to the adoption of ASC 606 , which primarily represented the Company’s estimated amount of consideration it expects to retain related to these shipments that will not be subject to a significant reversal in amounts recognized, net of costs previously deferred related to these shipments. Please refer to “Product Revenues, Net” above for further information related to the impact of the new revenue recognition on these sales. The Company concluded that the remaining $6.9 million that was recorded as deferred revenues as of December 31, 2017 related to the Company’s 2008 sale of its HIV protease inhibitor royalty stream is not subject to ASC 606 because it was initially accounted for pursuant to ASC 470, Debt , which is not under the scope of ASC 606 . The Company has continued to recognize the payment received as royalty revenues over the expected life of the collaboration agreement with GlaxoSmithKline plc based on the units-of-revenue method. The cumulative effect of applying ASC 606 to the Company’s contracts with customers that were not completed as of January 1, 2018 was as follows: Balance as of Balance as of December 31, 2017 Adjustments January 1, 2018 Assets (in thousands) Accounts receivable, net $ 281,343 $ 29,881 $ 311,224 Inventories 111,830 (90 ) 111,740 Prepaid expenses and other current assets 167,124 (17,166 ) 149,958 Total assets $ 3,546,014 $ 12,625 $ 3,558,639 Liabilities and Shareholders’ Equity Accrued expenses $ 443,961 $ 8,586 $ 452,547 Early access sales accrual 232,401 (7,273 ) 225,128 Other liabilities, current portion 34,373 2,083 36,456 Accumulated other comprehensive income (loss) (11,572 ) 949 (10,623 ) Accumulated deficit (5,119,723 ) 8,280 (5,111,443 ) Total liabilities and shareholders’ equity $ 3,546,014 $ 12,625 $ 3,558,639 The impact of adoption on the Company’s consolidated balance sheet as of December 31, 2018 was as follows: As of December 31, 2018 As Reported Balances Effect of Change Assets (in thousands) Accounts receivable, net $ 409,688 $ 376,949 $ 32,739 Inventories 124,360 124,506 (146 ) Prepaid expenses and other current assets 140,819 167,522 (26,703 ) Total assets $ 6,245,898 $ 6,240,008 $ 5,890 Liabilities and Shareholders’ Equity Accrued expenses $ 604,495 $ 618,873 $ (14,378 ) Early access sales accrual 354,404 380,609 (26,205 ) Other liabilities, current portion 40,589 14,355 26,234 Accumulated other comprehensive income (loss) 659 927 (268 ) Accumulated deficit (2,989,478 ) (3,009,985 ) 20,507 Total liabilities and shareholders’ equity $ 6,245,898 $ 6,240,008 $ 5,890 The impact of adoption on the Company’s consolidated statement of operations for the year ended December 31, 2018 was as follows: Year Ended December 31, 2018 As Reported Balances Effect of Change (in thousands) Product revenues, net $ 3,038,325 $ 3,019,484 $ 18,841 Cost of sales 409,539 402,925 6,614 Income from operations 635,150 622,923 12,227 Net income attributable to Vertex $ 2,096,896 $ 2,084,669 $ 12,227 Amounts per share attributable to Vertex common shareholders: Net income: Basic $ 8.24 $ 8.20 $ 0.04 Diluted $ 8.09 $ 8.04 $ 0.05 ASC 606 did not have an aggregate impact on the Company’s net cash provided by operating activities, but resulted in offsetting changes in certain assets and liabilities presented within net cash provided by operating activities in the Company’s consolidated statement of cash flows. Equity Investments In 2016, the FASB issued ASU 2016-01 , which amended guidance related to the recording of financial assets and financial liabilities. Under ASU 2016-01 , equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of an investee) are measured at fair value with changes in fair value recognized in net income (loss). However, an entity has the option to measure equity investments without readily determinable fair values at (i) fair value or (ii) cost adjusted for changes in observable prices minus impairment. Changes in measurement under either alternative are recognized in net income (loss). ASU 2016-01 became effective January 1, 2018 and required the modified-retrospective adoption method. As of January 1, 2018, the Company held publicly traded equity investments and equity investments accounted for under the cost method. As a result, in 2018, the Company recorded a $25.1 million cumulative effect adjustment to “ Accumulated deficit ” related to its publicly traded equity investments equal to the unrealized gain, net of tax, that was recorded in “ Accumulated other comprehensive income (loss) ” as of December 31, 2017. The adoption of ASU 2016-01 had no effect on the Company’s equity investments accounted for under the cost method because the original cost basis of these investments was recorded on the Company’s consolidated balance sheet as of December 31, 2017. The Company recorded net unrealized gains of $2.6 million to “ Other (expense) income, net ” in its consolidated statement of operations related to the change in fair value of its equity investments in the year ended December 31, 2018. Intra-Entity Transfers In 2016, the FASB issued ASU No. 2016-16, Intra-Entity Transfers of Assets Other Than Inventory (“ ASU 2016-16 ”), which removes the previous exception in GAAP prohibiting an entity from recognizing current and deferred income tax expenses or benefits related to the transfer of assets, other than inventory, within the consolidated entity. The 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. ASU 2016-16 became effective January 1, 2018. In 2018, upon adoption of ASU 2016-16 , the Company recorded a deferred tax asset and corresponding full valuation allowance of $204.7 million equal to the unamortized cost of intellectual property rights transferred to the United Kingdom in 2014 multiplied by an appropriate statutory rate. There was no cumulative effect adjustment to “ Accumulated deficit ” using the modified-retrospective adoption method. Goodwill In 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) (“ ASU 2017-04 ”) related to measurements of goodwill. ASU 2017-04 modifies the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value, which eliminates Step 2 from the goodwill impairment test. 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 the related reporting unit. The Company early adopted ASU 2017-04 and utilized this approach for annual and interim goodwill impairment tests conducted after January 1, 2018. The adoption of ASU 2017-04 did not have a significant effect on the Company’s consolidated financial statements. Stock-Based Compensation - Modifications In 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718) (“ ASU 2017-09 ”) related to the scope of stock option modification accounting, to reduce diversity in practice and provide clarity regarding existing guidance. ASU 2017-09 became effective January 1, 2018. The Company does not expect the adoption of ASU 2017-09 to have a significant effect on its consolidated financial statements in future periods and had no effect in the year ended December 31, 2018. Cash Flows - Restricted Cash In 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230) Restricted Cash (“ ASU 2016-18 ”), which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and restricted cash. Therefore, amounts described as restricted cash should be included with cash and cash equivalents when reconciling the beginning of period and end of period amounts shown on the statement of cash flows. ASU 2016-18 became effective January 1, 2018 and is effective on a retrospective basis. The cash, cash equivalents and restricted cash balances for the years ended December 31, 2018 through 2015 , which are presented in the Company’s consolidated statements of cash flows subsequent to the adoption of ASU 2016-18 , consisted of the following: As of December 31, 2018 2017 2016 2015 (in thousands) Cash and cash equivalents $ 2,650,134 $ 1,665,412 $ 1,183,945 $ 714,768 Prepaid expenses and other current assets 4,910 2,114 47,762 78,910 Other assets 3,209 — — 22,083 Cash, cash equivalents and restricted cash per statement of cash flows $ 2,658,253 $ 1,667,526 $ 1,231,707 $ 815,761 The Company’s restricted cash is included in “ Prepaid expenses and other current assets ” and “ Other assets ,” if any, in its consolidated balance sheets. As of December 31, 2017, the Company recorded its VIE’s cash and cash equivalents, which were not material to the Company’s financial statements, as “ Prepaid expenses and other current assets ” because (i) the Company did not have any interest in or control over BioAxone’s cash and cash equivalents and (ii) the Company’s agreement with BioAxone did not provide for BioAxone’s cash and cash equivalents to be used for the development of the asset that the Company licensed from BioAxone. As of December 31, 2018, the Company does not have any consolidated VIEs. Stock-Based Compensation - Improvements In 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting (“ ASU 2016-09 ”), which 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. ASU 2016-09 became effective January 1, 2017. ASU 2016-09 eliminated the requirement that excess tax benefits were realized as a reduction in current taxes payable before the associated tax benefit could be recognized as an increase in additional paid-in capital. This created a deferred tax asset (“DTA”) of $410.8 million relating to federal and state net operating losses (“NOLs”) that were fully reserved by an equal increase in the Company’s valuation allowance as of January 1, 2017. The Company recorded DTAs of $404.7 million relating to federal NOLs and $6.1 million relating to state NOLs, both of which were 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 increase “ Accumulated deficit ” by $9.4 million as of January 1, 2017. This change also resulted in an increase to the DTA of $3.4 million , which was offset by a full valuation allowance. As a result, there was no cumulative effect adjustment to accumulated deficit related to income taxes. The provisions related to the recognition of excess tax benefits in the Company’s consolidated statement of operations and classification in the consolidated statement of cash flows were adopted prospectively, and as such, the prior periods were not retrospectively adjusted. Recently Issued Accounting Standards Leases In 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ ASC 842 ”), which amends a number of aspects of lease accounting and requires entities to recognize right-of-use assets and liabilities on the balance sheet for leases with lease terms of more than 12 months. ASC 842 is effective on January 1, 2019. The Company’s project team has substantially completed its review of its portfolio of existing leases and current accounting policies to identify and assess the potential differences that would result from applying the requirements of the new standard. The Company is also in the process of finalizing appropriate changes to its controls to support lease accounting and related disclosures under the new standard. As discussed in Note L, “Long-term Obligations,” the Company currently applies build-to-suit accounting and is the deemed owner of its leased corporate headquarters in Boston and research site in San Diego, for which it is recognizing depreciation expense over the buildings’ useful lives and imputed interest on the corresponding construction financing lease obligations. Under ASC 842 , the Company will account for these buildings as financing leases, resulting in increased depreciation expense over the respective lease terms, which are significantly shorter than the buildings’ useful lives. The Company also expects a reduction in its imputed interest expense in the initial years of each financing lease term. In 2019, the Company expects an increase in operating expenses of approximately $26 million and a decrease in interest expense of approximately $13 million due to this change. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements (“ ASU 2018-11 ”), which offers a transition option to entities adopting ASC 842 . Under ASU 2018-11 entities can elect to apply ASC 842 using a modified-retrospective adoption approach resulting in a cumulative effect adjustment to accumulated deficit at the beginning of the year in which the new lease standard is adopted, rather than adjustments to the earliest comparative period presented in their financial statements. The Company will adopt ASC 842 using the modified-retrospective method. In the first quarter of 2019, the Company expects to record a cumulative effect adjustment to increase its “ Accumulated deficit ” by approximately $ 50 million related to the adjustments to its build-to-suit leases described in the previous paragraph. Additionally, the Company expects to record, upon adoption of ASC 842 on January 1, 2019, right-of-use assets of approximately $60 million and corresponding liabilities of approximately $70 million related to its real estate leases with terms of more than 12 months that are not treated as financing leases under ASC 842 . The difference between these assets and liabilities will be primarily attributable to prepaid or accrued lease payments. The Company also anticipates reclassifying amounts recorded as “ Capital lease obligations, current portion ” and “ Capital lease obligations, excluding current portion ” as financing lease obligations on January 1, 2019. These adjustments will have no impact on the Company’s consolidated statement of operations and no impact on the Company’s accumulated deficit. Derivatives and Hedging In 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815) (“ ASU 2017-12 ”), which helps simplify certain aspects of hedge accounting and enables entities to more accurately present their risk management activities in their financial statements. ASU 2017-12 is effective on January 1, 2019. The Company does not expect the adoption of ASU 2017-12 to have a significant effect on its consolidated financial statements. Internal-Use Software In 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ ASU 2018-15 ”), which clarifies the accounting for implementation costs in cloud computing arrangements. ASU 2018-15 is effective on January 1, 2020. Early adoption is permitted. The Company currently is evaluating the impact the adoption of ASU 2018-15 may have on its consolidated financial statements. Fair Value Measurement In 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement (“ ASU 2018-13 ”), which modifies the disclosure requirements for fair value measurements. ASU 2018-13 is effective on January 1, 2020. Early adoption is permitted. The Company currently is evaluating the impact the adoption of ASU 2018-13 may have on its disclosures. |
Nature of Business and Accoun_3
Nature of Business and Accounting Policies Nature of Business and Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effect of applying ASC 606 to the Company’s contracts with customers that were not completed as of January 1, 2018 was as follows: Balance as of Balance as of December 31, 2017 Adjustments January 1, 2018 Assets (in thousands) Accounts receivable, net $ 281,343 $ 29,881 $ 311,224 Inventories 111,830 (90 ) 111,740 Prepaid expenses and other current assets 167,124 (17,166 ) 149,958 Total assets $ 3,546,014 $ 12,625 $ 3,558,639 Liabilities and Shareholders’ Equity Accrued expenses $ 443,961 $ 8,586 $ 452,547 Early access sales accrual 232,401 (7,273 ) 225,128 Other liabilities, current portion 34,373 2,083 36,456 Accumulated other comprehensive income (loss) (11,572 ) 949 (10,623 ) Accumulated deficit (5,119,723 ) 8,280 (5,111,443 ) Total liabilities and shareholders’ equity $ 3,546,014 $ 12,625 $ 3,558,639 The impact of adoption on the Company’s consolidated balance sheet as of December 31, 2018 was as follows: As of December 31, 2018 As Reported Balances Effect of Change Assets (in thousands) Accounts receivable, net $ 409,688 $ 376,949 $ 32,739 Inventories 124,360 124,506 (146 ) Prepaid expenses and other current assets 140,819 167,522 (26,703 ) Total assets $ 6,245,898 $ 6,240,008 $ 5,890 Liabilities and Shareholders’ Equity Accrued expenses $ 604,495 $ 618,873 $ (14,378 ) Early access sales accrual 354,404 380,609 (26,205 ) Other liabilities, current portion 40,589 14,355 26,234 Accumulated other comprehensive income (loss) 659 927 (268 ) Accumulated deficit (2,989,478 ) (3,009,985 ) 20,507 Total liabilities and shareholders’ equity $ 6,245,898 $ 6,240,008 $ 5,890 The impact of adoption on the Company’s consolidated statement of operations for the year ended December 31, 2018 was as follows: Year Ended December 31, 2018 As Reported Balances Effect of Change (in thousands) Product revenues, net $ 3,038,325 $ 3,019,484 $ 18,841 Cost of sales 409,539 402,925 6,614 Income from operations 635,150 622,923 12,227 Net income attributable to Vertex $ 2,096,896 $ 2,084,669 $ 12,227 Amounts per share attributable to Vertex common shareholders: Net income: Basic $ 8.24 $ 8.20 $ 0.04 Diluted $ 8.09 $ 8.04 $ 0.05 |
Schedule of Cash and Cash Equivalents | The cash, cash equivalents and restricted cash balances for the years ended December 31, 2018 through 2015 , which are presented in the Company’s consolidated statements of cash flows subsequent to the adoption of ASU 2016-18 , consisted of the following: As of December 31, 2018 2017 2016 2015 (in thousands) Cash and cash equivalents $ 2,650,134 $ 1,665,412 $ 1,183,945 $ 714,768 Prepaid expenses and other current assets 4,910 2,114 47,762 78,910 Other assets 3,209 — — 22,083 Cash, cash equivalents and restricted cash per statement of cash flows $ 2,658,253 $ 1,667,526 $ 1,231,707 $ 815,761 |
Collaborative Arrangements (Tab
Collaborative Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of collaborative arrangement activity net loss attributable to noncontrolling interest | An aggregate summary of net loss attributable to noncontrolling interest related to the Company’s VIEs for the three years ended December 31, 2018 was as follows: 2018 2017 2016 (in thousands) Loss attributable to noncontrolling interest before (benefit from) provision for income taxes and changes in fair value of contingent payments $ 31,191 $ 223,379 $ 10,086 (Benefit from) provision for income taxes (3,668 ) (114,090 ) 16,743 (Increase) decrease in fair value of contingent payments (17,730 ) 62,560 (54,850 ) Net loss (income) attributable to noncontrolling interest $ 9,793 $ 171,849 $ (28,021 ) |
Schedule of changes in fair value of contingent payments | During three years ended December 31, 2018 , the (increases) decreases in the fair value of the contingent payments related to the Company’s VIEs were as follows: 2018 2017 2016 (in thousands) Parion $ — $ 63,460 $ (64,800 ) BioAxone (17,730 ) (900 ) 9,950 |
Schedule of collaborative arrangement summary of items related to variable interest entities | As of December 31, 2018, the Company did not have any consolidated VIEs. As of December 31, 2017, the Company’s consolidated balance sheet included the following significant amounts related to its consolidation of BioAxone as a VIE: December 31, 2017 (in thousands) Intangible assets $ 29,000 Deferred tax liabilities 4,756 Noncontrolling interest 13,727 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of earning per share, basic and diluted, by common shares | The following table sets forth the computation of basic and diluted net income (loss) per share for three years ended December 31, 2018 : 2018 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 $ 2,096,896 $ 263,484 $ (112,052 ) Less: Undistributed earnings allocated to participating securities (501 ) (293 ) — Net income (loss) attributable to Vertex common shareholders—basic $ 2,096,395 $ 263,191 $ (112,052 ) Basic weighted-average common shares outstanding 254,292 248,858 244,685 Basic net income (loss) attributable to Vertex per common share $ 8.24 $ 1.06 $ (0.46 ) Diluted net income (loss) attributable to Vertex per common share calculation: Net income (loss) attributable to Vertex common shareholders $ 2,096,896 $ 263,484 $ (112,052 ) Less: Undistributed earnings allocated to participating securities (492 ) (288 ) — Net income (loss) attributable to Vertex common shareholders—diluted $ 2,096,404 $ 263,196 $ (112,052 ) Weighted-average shares used to compute basic net income (loss) per common share 254,292 248,858 244,685 Effect of potentially dilutive securities: Stock options 2,913 2,797 — Restricted stock and restricted stock units (including PSUs) 1,963 1,542 — Employee stock purchase plan 17 28 — Weighted-average shares used to compute diluted net income (loss) per common share 259,185 253,225 244,685 Diluted net income (loss) attributable to Vertex per common share $ 8.09 $ 1.04 $ (0.46 ) |
Schedule of antidilutive securities excluded from computation of earnings per share | The Company did not include the securities in the following table in the computation of the net income (loss) per share attributable to Vertex common shareholders calculations because the effect would have been anti-dilutive during each period. 2018 2017 2016 (in thousands) Stock options 2,217 3,554 12,642 Unvested restricted stock and restricted stock units (including PSUs) 5 411 3,546 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities subject to fair value measurements (excluding restricted cash and cash equivalents (VIE)) | The following table sets forth the Company’s financial assets and liabilities (excluding VIE cash and cash equivalents) subject to fair value measurements: Fair Value Measurements as of December 31, 2018 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 $ 1,226,603 $ 1,226,603 $ — $ — U.S. Treasury securities 5,966 5,966 — — Government-sponsored enterprise securities 7,123 7,123 — — Commercial paper 58,268 — 58,268 — Marketable securities: Corporate equity securities 167,323 153,733 13,590 — U.S. Treasury securities 6,026 6,026 — — Government-sponsored enterprise securities 10,704 10,704 — — Corporate debt securities 233,665 — 233,665 — Commercial paper 100,390 — 100,390 — Prepaid and other current assets: Foreign currency forward contracts 19,023 — 19,023 — Other assets: Foreign currency forward contracts 1,514 — 1,514 — Total financial assets $ 1,836,605 $ 1,410,155 $ 426,450 $ — Financial instruments carried at fair value (liability position): Other liabilities, current portion: Foreign currency forward contracts $ (340 ) $ — $ (340 ) $ — Other liabilities, excluding current portion: Foreign currency forward contracts (108 ) — (108 ) — Total financial liabilities $ (448 ) $ — $ (448 ) $ — Fair Value Measurements as of December 31, 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 $ 614,951 $ 614,951 $ — $ — Government-sponsored enterprise securities 12,678 12,678 — — Commercial paper 57,357 — 57,357 — Marketable securities: Corporate equity securities 74,821 74,821 — — Government-sponsored enterprise securities 2,303 2,303 — — Corporate debt securities 265,867 — 265,867 — Commercial paper 80,263 — 80,263 — Prepaid and other current assets: Foreign currency forward contracts 13 — 13 — Total financial assets $ 1,108,253 $ 704,753 $ 403,500 $ — Financial instruments carried at fair value (liability position): Other liabilities, current portion: Foreign currency forward contracts $ (13,642 ) $ — $ (13,642 ) $ — Other liabilities, excluding current portion: Foreign currency forward contracts (866 ) — (866 ) — Total financial liabilities $ (14,508 ) $ — $ (14,508 ) $ — |
Marketable Securities and Equ_2
Marketable Securities and Equity Investments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Summary of cash, cash equivalents and marketable securities | A summary of the Company’s cash equivalents and marketable securities is shown below: Amortized Cost Gross Gross Fair Value (in thousands) As of December 31, 2018 Cash equivalents: Money market funds $ 1,226,603 $ — $ — $ 1,226,603 U.S. Treasury securities 5,967 — (1 ) 5,966 Government-sponsored enterprise securities 7,124 — (1 ) 7,123 Commercial paper 58,271 — (3 ) 58,268 Total cash equivalents 1,297,965 — (5 ) 1,297,960 Marketable securities: U.S Treasury securities (matures within 1 year) 6,026 — — 6,026 Government-sponsored enterprise securities (matures within 1 year) 10,704 — — 10,704 Corporate debt securities (matures within 1 year) 232,845 25 (450 ) 232,420 Corporate debt securities (matures after 1 year through 5 years) 1,243 2 — 1,245 Commercial paper (matures within 1 year) 100,498 — (108 ) 100,390 Total marketable debt securities 351,316 27 (558 ) 350,785 Corporate equity securities 133,157 40,619 (6,453 ) 167,323 Total marketable securities $ 484,473 $ 40,646 $ (7,011 ) $ 518,108 As of December 31, 2017 Cash equivalents: Money market funds $ 614,951 $ — $ — $ 614,951 Government-sponsored enterprise securities 12,679 — (1 ) 12,678 Commercial paper 57,371 — (14 ) 57,357 Total cash equivalents 685,001 — (15 ) 684,986 Marketable securities: Government-sponsored enterprise securities (matures within 1 year) 2,304 — (1 ) 2,303 Corporate debt securities (matures within 1 year) 215,639 — (363 ) 215,276 Corporate debt securities (matures after 1 year through 5 years) 50,697 — (106 ) 50,591 Commercial paper (matures within 1 year) 80,372 — (109 ) 80,263 Total marketable debt securities 349,012 — (579 ) 348,433 Available-for-sale corporate equity securities 43,213 31,608 — 74,821 Total marketable securities $ 392,225 $ 31,608 $ (579 ) $ 423,254 Available-for-sale debt securities were recorded in the Company's consolidated balance sheets as follows: As of December 31, 2018 2017 (in thousands) Cash and cash equivalents $ 1,297,960 $ 684,986 Marketable securities 350,785 348,433 Total $ 1,648,745 $ 1,033,419 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Reclassifications out of Accumulated Other Comprehensive Income (Loss) | The following table summarizes the changes in accumulated other comprehensive income (loss) by component: Unrealized Holding Gains (Losses), Net of Tax Foreign Currency Translation Adjustment On Available-For-Sale Debt Securities On Equity Securities On Foreign Currency Forward Contracts Total (in thousands) Balance at December 31, 2015 $ (2,080 ) $ 126 $ — $ 3,778 $ 1,824 Other comprehensive (loss) income before reclassifications (5,782 ) (136 ) 17,531 17,383 28,996 Amounts reclassified from accumulated other comprehensive income (loss) — — — (9,647 ) (9,647 ) Net current period other comprehensive (loss) income (5,782 ) (136 ) 17,531 7,736 19,349 Balance at December 31, 2016 $ (7,862 ) $ (10 ) $ 17,531 $ 11,514 $ 21,173 Other comprehensive (loss) income before reclassifications (13,169 ) (584 ) 7,538 (29,175 ) (35,390 ) Amounts reclassified from accumulated other comprehensive income (loss) — — — 2,645 2,645 Net current period other comprehensive (loss) income (13,169 ) (584 ) 7,538 (26,530 ) (32,745 ) Balance as of December 31, 2017 $ (21,031 ) $ (594 ) $ 25,069 $ (15,016 ) $ (11,572 ) Other comprehensive income before reclassifications 8,855 58 — 25,664 34,577 Amounts reclassified from accumulated other comprehensive income (loss) — — — 1,774 1,774 Net current period other comprehensive income 8,855 58 — 27,438 36,351 Amounts reclassified to accumulated deficit pursuant to adoption of new accounting standard 949 — (25,069 ) — (24,120 ) Balance as of December 31, 2018 $ (11,227 ) $ (536 ) $ — $ 12,422 $ 659 |
Hedging (Tables)
Hedging (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
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 under GAAP: As of December 31, 2018 2017 Foreign Currency (in thousands) Euro $ 335,179 $ 257,230 British pound sterling 73,460 77,481 Australian dollar 52,820 30,501 Canadian dollar 43,759 — Total foreign currency forward contracts $ 505,218 $ 365,212 |
Derivative Instruments, Gain (Loss) | During the three years ended December 31, 2018 , the Company recognized the following related to foreign currency forward contacts in its consolidated statements of operations: December 31, 2018 2017 2016 (in thousands) Designated as hedging instruments - Reclassified from AOCI Product revenues, net $ (1,252 ) $ 768 $ 10,543 Not designated as hedging instruments Other (expense) income, net $ 623 $ 14,129 $ (6,917 ) |
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 its consolidated balance sheets: As of December 31, 2018 Assets Liabilities Classification Fair Value Classification Fair Value (in thousands) Prepaid and other current assets $ 19,023 Other liabilities, current portion $ (340 ) Other assets 1,514 Other liabilities, excluding current portion (108 ) Total assets $ 20,537 Total liabilities $ (448 ) As of December 31, 2017 Assets Liabilities Classification Fair Value Classification Fair Value (in thousands) Prepaid and other current assets $ 13 Other liabilities, current portion $ (13,642 ) Other assets — Other liabilities, excluding current portion (866 ) Total assets $ 13 Total liabilities $ (14,508 ) |
Derivatives Offsetting | The following table summarizes the potential effect of offsetting derivatives by type of financial instrument designated as cash flow hedges under GAAP on the Company’s consolidated balance sheets: As of December 31, 2018 Gross Amounts Recognized Gross Amounts Offset Gross Amounts Presented Gross Amounts Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 20,537 $ — $ 20,537 $ (448 ) $ 20,089 Total liabilities (448 ) — (448 ) 448 — As of December 31, 2017 Gross Amounts Recognized Gross Amounts Offset Gross Amounts Presented Gross Amounts Not Offset Legal Offset Foreign currency forward contracts (in thousands) Total assets $ 13 $ — $ 13 $ (13 ) $ — Total liabilities (14,508 ) — (14,508 ) 13 (14,495 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories by Type | Inventories consisted of the following: As of December 31, 2018 2017 (in thousands) Raw materials $ 9,677 $ 20,924 Work-in-process 87,944 74,237 Finished goods 26,739 16,669 Total $ 124,360 $ 111,830 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and equipment | Property and equipment, net consisted of the following: As of December 31, 2018 2017 (in thousands) Buildings $ 657,438 $ 634,061 Furniture and equipment 280,908 256,509 Software 162,601 151,890 Leasehold improvements 103,428 117,806 Computers 59,073 61,294 Total property and equipment, gross 1,263,448 1,221,560 Less: accumulated depreciation (451,443 ) (432,123 ) Total property and equipment, net $ 812,005 $ 789,437 |
Additional Balance Sheet Deta_2
Additional Balance Sheet Detail (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Summary of Prepaid and other current assets | Prepaid and other current assets consisted of the following: As of December 31, 2018 2017 (in thousands) Prepaid expenses $ 74,045 $ 62,475 Collaborative accounts receivable 5,182 28,907 Other receivables and assets 61,592 75,742 Total $ 140,819 $ 167,124 |
Summary of Accrued expenses and other current liabilities | Accrued expenses consisted of the following: As of December 31, 2018 2017 (in thousands) Payroll and benefits $ 124,753 $ 113,026 Research, development and commercial contract costs 115,300 98,411 Product revenue allowances 195,598 119,919 Royalty payable 101,108 73,044 Other 67,736 39,561 Total $ 604,495 $ 443,961 |
Long Term Obligations Long Term
Long Term Obligations Long Term Obligations (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Financing Lease Obligations | Property and equipment, net and the carrying value of the Company’s construction financing lease obligation (including current and non-current portions and excluding interest that will be imputed over the course of the Company’s underlying lease agreements for these buildings) related to the Fan Pier Buildings and the San Diego Building were as follows: As of December 31, 2018 2017 (in thousands) Property and equipment, net Fan Pier Buildings $ 462,863 $ 475,725 San Diego Building $ 113,296 $ 94,602 Construction financing lease obligation Fan Pier Buildings $ 471,058 $ 472,070 San Diego Building $ 96,105 $ 87,392 |
Common Stock, Preferred Stock_2
Common Stock, Preferred Stock and Equity Plans (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of stock and stock equity plans | The following table contains information about the Company’s equity plans: As of December 31, 2018 Title of Plan Group Eligible Type of Award Awards Additional Awards 2013 Stock and Option Plan Employees, Non-employee Directors and Consultants NSO, 10,735,107 14,737,360 2006 Stock and Option Plan Employees, Non-employee Directors and Consultants NSO, 1,770,994 — Total 12,506,101 14,737,360 |
Outstanding and vested options | The following table summarizes information related to the outstanding and exercisable options during the year ended December 31, 2018 : Stock Options Weighted-average Weighted-average Aggregate Intrinsic (in thousands) (per share) (in years) (in thousands) Outstanding at December 31, 2017 9,767 $ 91.57 Granted 2,297 $ 164.11 Exercised (3,076 ) $ 85.66 Forfeited (431 ) $ 125.37 Expired (6 ) $ 98.30 Outstanding at December 31, 2018 8,551 $ 111.46 6.92 $ 462,563 Exercisable at December 31, 2018 4,577 $ 93.21 5.63 $ 325,382 |
Stock options outstanding and exercisable | The following table summarizes information about stock options outstanding and exercisable at December 31, 2018 : 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) $29.07–$40.00 532 1.08 $ 34.89 532 $ 35.89 $40.01–$60.00 470 3.51 $ 50.04 470 $ 50.04 $60.01–$80.00 543 5.25 $ 74.90 533 $ 74.89 $80.01–$100.00 2,839 7.18 $ 89.19 1320 $ 89.85 $100.01–$120.00 693 6.09 $ 109.30 603 $ 109.22 $120.01–$140.00 839 6.62 $ 130.27 642 $ 130.24 $140.01–$160.00 1,400 9.06 $ 155.52 271 $ 155.30 $160.01–$180.00 526 8.50 $ 162.94 156 $ 162.94 $180.01–$181.60 709 9.53 $ 181.60 50 $ 181.60 Total 8,551 6.92 $ 111.46 4,577 $ 93.21 |
Restricted stock and restricted stock units activity | The following table summarizes the restricted stock and restricted stock unit activity of the Company during the year ended December 31, 2018 : Restricted Stock Restricted Stock Units (excluding PSUs) Number of Units Weighted-average Number of Shares Weighted-average (in thousands) (per share) (in thousands) (per share) Unvested at December 31, 2017 1,229 $ 102.12 2,011 $ 109.27 Granted — $ — 1,600 $ 164.70 Vested (690 ) $ 100.07 (629 ) $ 108.02 Cancelled (59 ) $ 101.55 (265 ) $ 132.26 Unvested at December 31, 2018 480 $ 104.91 2,717 $ 140.10 |
PSU activity | The following table summarizes the PSU activity of the Company during the year ended December 31, 2018 : Performance-Based RSU Number of Units Weighted-average (in thousands) (per share) Unvested at December 31, 2017 (1) 484 $ 87.59 Granted (2) 494 $ 152.40 Vested (154 ) $ 87.13 Cancelled (65 ) $ 99.34 Unvested at December 31, 2018 759 $ 110.50 (1) “Unvested” represents the Company’s PSUs at target to the extent performance has not been certified plus the actual number of shares that continue to be subject to service conditions for which the performance has been achieved and certified. (2) “Granted” represents (i) the target number of shares issuable for grants during 2018 and (ii) any change in the number of shares issuable pursuant to outstanding PSUs based on performance certification during 2018. |
Shares issued under Employee Stock Purchase Plan | In 2018 , the following shares were issued to employees under the ESPP: Year Ended December 31, 2018 (in thousands, Number of shares 213,654 Average price paid per share $ 117.52 |
Stock-based Compensation Expe_2
Stock-based Compensation Expense (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based compensation expense by line item | The effect of stock-based compensation expense during the three years ended December 31, 2018 was as follows: 2018 2017 2016 (in thousands) Stock-based compensation expense by line item: Cost of sales $ 4,543 $ 2,500 $ 2,918 Research and development expenses 203,112 181,900 153,451 Sales, general and administrative expenses 117,392 108,836 84,254 Total stock-based compensation expense included in costs and expenses $ 325,047 $ 293,236 $ 240,623 |
Stock-based compensation expense by type of award | The stock-based compensation expense by type of award during the three years ended December 31, 2018 was as follows: 2018 2017 2016 (in thousands) Stock-based compensation expense by type of award: Stock options $ 107,854 $ 105,367 $ 114,768 Restricted stock and restricted stock units (including PSUs) 207,845 181,258 118,709 ESPP share issuances 9,933 9,017 7,835 Stock-based compensation expense related to inventories (585 ) (2,406 ) (689 ) Total stock-based compensation expense included in costs and expenses $ 325,047 $ 293,236 $ 240,623 |
Unrecognized stock-based compensation expense, net of estimated forfeitures | The following table sets forth the Company’s unrecognized stock-based compensation expense as of December 31, 2018 , by type of award and the weighted-average period over which that expense is expected to be recognized: As of December 31, 2018 Unrecognized Expense Weighted-average Recognition Period (in thousands) (in years) Type of award: Stock options $ 155,465 2.64 Restricted stock and restricted stock units (including PSUs) $ 321,683 2.58 ESPP share issuances $ 5,132 0.58 |
Schedule of assumptions used to estimate the grant date fair value of options | The fair value of each option granted during 2018 , 2017 and 2016 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions: 2018 2017 2016 Expected stock price volatility 40.50 % 45.31 % 46.77 % Risk-free interest rate 2.61 % 1.94 % 1.32 % Expected term of options (in years) 4.55 4.68 4.91 Expected annual dividends — — — |
Schedule of assumptions used to estimate the grant date fair value employee stock purchase plan | The following table reflects the weighted-average assumptions used in the Black-Scholes option pricing model for 2018 , 2017 and 2016 : 2018 2017 2016 Expected stock price volatility 36.51 % 39.09 % 48.22 % Risk-free interest rate 2.36 % 1.24 % 0.56 % Expected term (in years) 0.75 0.75 0.75 Expected annual dividends — — — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income (loss) before provision for (benefit from) income taxes | The components of income (loss) before (benefit from) provision for income taxes during the three years ended December 31, 2018 consisted of the following: 2018 2017 2016 (in thousands) United States $ 812,086 $ 330,340 $ (147,860 ) Foreign (211,845 ) (346,029 ) 80,494 Income (loss) before (benefit from) provision for income taxes $ 600,241 $ (15,689 ) $ (67,366 ) |
Schedule of components of provision for (benefit from) income taxes | The components of the (benefit from) provision for income taxes during the three years ended December 31, 2018 consisted of the following: 2018 2017 2016 (in thousands) Current taxes: United States $ 772 $ 11,559 $ (3,821 ) Foreign 15,600 3,576 1,794 State 9,018 5,025 1,836 Total current taxes 25,390 20,160 (191 ) Deferred taxes: United States (1,105,053 ) (113,805 ) 18,659 Foreign (364,919 ) (3,222 ) (3,359 ) State (42,280 ) (10,457 ) 1,556 Total deferred taxes (1,512,252 ) (127,484 ) 16,856 (Benefit from) provision for income taxes $ (1,486,862 ) $ (107,324 ) $ 16,665 |
Reconciliation of the provision for (benefit from) income taxes | A reconciliation of the (benefit from) provision for income taxes as computed by applying the U.S. federal statutory rate of 21% for the year ended December 31, 2018 and 35% for the years ended December 31, 2017 and 2016 to the (benefit from) provision for income taxes is as follows: 2018 2017 2016 (in thousands) Income (loss) before (benefit from) provision for income taxes $ 600,241 $ (15,689 ) $ (67,366 ) Expected provision for (benefit from) income taxes 126,051 (5,491 ) (23,578 ) State taxes, net of federal benefit 8,680 4,742 3,621 Foreign income tax rate differential 23,427 77,801 21,346 Tax credits (52,629 ) (58,204 ) (47,773 ) (Benefit from) provision for income taxes attributable to valuation allowances (1,563,169 ) (575,801 ) 14,837 Permanent items 1,421 15,324 24,663 Rate change — 575,192 12,836 Stock compensation (benefit) shortfalls and cancellations (49,044 ) (21,453 ) 4,162 Officer’s compensation 8,310 6,501 86 Tax attribute expiration — — 9,947 Deconsolidation of VIE (9,390 ) (126,183 ) — Uncertain tax positions 15,431 — — Other 4,050 248 (3,482 ) (Benefit from) provision for income taxes $ (1,486,862 ) $ (107,324 ) $ 16,665 |
Schedule of deferred tax assets and liabilities | The components of the deferred taxes were as follows: As of December 31, 2018 2017 (in thousands) Deferred tax assets: Net operating loss $ 882,014 $ 1,004,404 Tax credit carryforwards 487,635 440,429 Intangible assets 241,775 54,091 Deferred revenues 19,311 19,593 Stock-based compensation 93,915 83,196 Accrued expenses 17,795 17,808 Construction financing lease obligation 130,849 109,354 Other 6,831 5,667 Gross deferred tax assets 1,880,125 1,734,542 Valuation allowance (168,491 ) (1,552,942 ) Total deferred tax assets 1,711,634 181,600 Deferred tax liabilities: Property and equipment (128,407 ) (101,019 ) Acquired intangibles — (6,341 ) Deferred revenue (73,357 ) (73,357 ) Unrealized gain (10,198 ) (6,401 ) Net deferred tax assets (liabilities) $ 1,499,672 $ (5,518 ) |
Summary of income tax contingencies | Unrecognized tax benefits during the three years ended December 31, 2018 were as follows: 2018 2017 2016 (in thousands) Balance at beginning of the period $ 3,814 $ — $ 425 Increases related to current period tax positions 9,704 3,814 — Increases related to prior period tax positions 6,031 — — Decrease due to statute limitations — — (425 ) Balance at end of period $ 19,549 $ 3,814 $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum commitments under Fan Pier Leases and facility operating leases with terms of more than one year, net of estimated sublease income | As of December 31, 2018 , future minimum commitments under the facility leases with initial terms of more than one year were as follows: Year Fan Pier San Diego Lease Other Total Lease (in thousands) 2019 $ 66,540 $ 5,324 $ 13,207 $ 85,071 2020 72,589 9,127 14,270 95,986 2021 72,589 9,127 12,529 94,245 2022 72,589 9,127 12,045 93,761 2023 72,589 9,530 11,952 94,071 Thereafter 389,855 119,864 65,472 575,191 Total minimum lease payments $ 746,751 $ 162,099 $ 129,475 $ 1,038,325 |
Schedule of future minimum lease payments for capital leases | The following table sets forth the Company’s future minimum payments due under capital leases as of December 31, 2018 : Year (in thousands) 2019 $ 10,770 2020 7,282 2021 5,649 2022 3,300 2023 1,974 Thereafter 3,085 Total payments 32,060 Less: amount representing interest (2,585 ) Present value of payments $ 29,475 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Revenues by Product | Product revenues, net consisted of the following: 2018 2017 2016 (in thousands) SYMDEKO/SYMKEVI $ 768,657 $ — $ — ORKAMBI 1,262,166 1,320,850 979,590 KALYDECO 1,007,502 844,630 703,432 Other — — 610 Total product revenues, net $ 3,038,325 $ 2,165,480 $ 1,683,632 |
Revenues and Property and Equipment by Location | Property and equipment, net by location consisted of the following: As of December 31, 2018 2017 (in thousands) United States $ 778,157 $ 753,128 Outside of the United States United Kingdom 30,496 31,279 Other 3,352 5,030 Total property and equipment, net outside of the United States 33,848 36,309 Total property and equipment, net $ 812,005 $ 789,437 Total revenues from external customers and collaborators by geographic region consisted of the following: 2018 2017 2016 (in thousands) United States $ 2,365,079 $ 1,986,786 $ 1,321,807 Outside of the United States Europe 543,179 420,317 320,456 Other 139,339 81,549 59,914 Total revenues outside of the United States 682,518 501,866 380,370 Total revenues $ 3,047,597 $ 2,488,652 $ 1,702,177 |
Significant Customers | Gross revenues and accounts receivable from each of the Company’s customers who individually accounted for 10% or more of total gross revenues and/or 10% or more of total gross accounts receivable consisted of the following: Percent of Total Gross Revenues Percent of Gross Accounts Receivable Year Ended December 31, As of December 31, 2018 (as reported under ASC 606) 2017 (as reported under ASC 605) 2016 (as reported under ASC 605) 2018 2017 Walgreen Co. 20 % 17 % 19 % 16 % 20 % Accredo/Curascript 14 % 14 % 15 % 10 % 12 % McKesson Corporation 14 % <10 % <10 % 16 % <10 % CVS/Caremark n/a <10 % 19 % n/a n/a |
Quarterly Financial Data (una_2
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial data | The following table sets forth the Company’s quarterly financial data for the two years ended December 31, 2018 . Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share amounts) Revenues: Product revenues, net $ 637,729 $ 749,912 $ 782,511 $ 868,173 Collaborative and royalty revenues 3,070 2,245 2,024 1,933 Total revenues 640,799 752,157 784,535 870,106 Costs and expenses: Cost of sales 71,613 104,382 111,255 122,289 Research and development expenses (1) 310,553 337,532 330,510 437,881 Sales, general and administrative expenses 129,808 137,303 137,295 153,210 Restructuring (income) expenses (76 ) 62 (174 ) 4 Intangible asset impairment charge (2) — — — 29,000 Total costs and expenses 511,898 579,279 578,886 742,384 Income from operations 128,901 172,878 205,649 127,722 Interest expense, net (11,097 ) (10,106 ) (8,143 ) (4,773 ) Other income (expense), net (3) 96,838 53,819 (60,995 ) (90,452 ) Income before (benefit from) provision for income taxes 214,642 216,591 136,511 32,497 (Benefit from) provision for income taxes (4) (12,659 ) 10,341 8,055 (1,492,599 ) Net income 227,301 206,250 128,456 1,525,096 (Income) loss attributable to noncontrolling interest (17,038 ) 1,110 290 25,431 Net income attributable to Vertex $ 210,263 $ 207,360 $ 128,746 $ 1,550,527 Amounts per share attributable to Vertex common shareholders: Net income: Basic $ 0.83 $ 0.82 $ 0.51 $ 6.08 Diluted $ 0.81 $ 0.80 $ 0.50 $ 5.97 Shares used in per share calculations: Basic 253,231 254,135 254,905 254,868 Diluted 258,526 258,584 259,788 259,812 Three Months Ended March 31, June 30, September 30, December 31, (in thousands, except per share amounts) Revenues: Product revenues, net $ 480,622 $ 513,988 $ 549,642 $ 621,228 Collaborative and royalty revenues (5) 234,096 30,147 28,523 30,406 Total revenues 714,718 544,135 578,165 651,634 Costs and expenses: Cost of sales 46,988 71,205 72,874 84,052 Research and development expenses (6) 273,563 289,451 454,947 306,664 Sales, general and administrative expenses 113,326 127,249 120,710 134,794 Restructuring expenses 9,999 3,523 337 387 Intangible asset impairment charge (7) — — 255,340 — Total costs and expenses 443,876 491,428 904,208 525,897 Income (loss) from operations 270,842 52,707 (326,043 ) 125,737 Interest expense, net (16,765 ) (14,664 ) (13,574 ) (12,547 ) Other expense, net (7) (544 ) (2,537 ) (77,553 ) (748 ) Income (loss) before provision for (benefit from) income taxes 253,533 35,506 (417,170 ) 112,442 Provision for (benefit from) income taxes (7) 3,985 4,337 (125,903 ) 10,257 Net income (loss) 249,548 31,169 (291,267 ) 102,185 (Income) loss attributable to noncontrolling interest (7) (1,792 ) (13,173 ) 188,315 (1,501 ) Net income (loss) attributable to Vertex $ 247,756 $ 17,996 $ (102,952 ) $ 100,684 Amounts per share attributable to Vertex common shareholders: Net income (loss): Basic $ 1.01 $ 0.07 $ (0.41 ) $ 0.40 Diluted $ 0.99 $ 0.07 $ (0.41 ) $ 0.39 Shares used in per share calculations: Basic 246,024 247,521 250,268 251,557 Diluted 248,700 251,635 250,268 256,804 1. In the fourth quarter of 2018, the Company incurred research and development expenses of $95.0 million to related license agreements with Merck KGaA, Darmstadt, Germany, and Arbor. See Note B, “Collaborative Arrangements and Acquisitions.” 2. In the fourth quarter of 2018, the Company recorded a $29.0 million intangible asset impairment charge related to its VX-210 indefinite-lived in-process research and development asset. See Note J, “Intangible Assets and Goodwill.” 3. In 2018, other income (expense), net was primarily related to changes in the fair value of the Company’s equity investment in CRISPR. See Note E, “Marketable Securities and Equity Investments.” 4. In the fourth quarter of 2018, the Company released the valuation allowance on the majority of its net operating losses and other deferred tax assets as of December 31, 2018 resulting in a benefit from income taxes of $1.56 billion . See Note O, “Income Taxes.” 5. In the first quarter of 2017, the Company recognized $230.0 million of collaborative revenues related to an upfront payment from Merck KGaA, Darmstadt, Germany, pursuant to a collaboration. In each of the second and third quarters of 2017, the Company recognized $20.0 million of collaborative revenues related to payments that Parion, which was a variable interest entity during these periods, received from Shire pursuant to a license agreement. In the fourth quarter of 2017, the Company recognized $25.0 million of collaborative revenues related to a milestone achieved pursuant to its license agreement with Janssen pursuant to which Janssen is developing pimodivir for the treatment of influenza. See Note B, “Collaborative Arrangements and Acquisitions.” 6. In the third quarter of 2017, the Company incurred research and development expenses of $160.0 million to acquire certain CF assets including VX-561 from Concert. See Note B, “Collaborative Arrangements and Acquisitions.” 7. In the third quarter of 2017, the Company recorded a $255.3 million intangible asset impairment charge related to Parion’s pulmonary ENaC platform indefinite-lived in-process research and development asset, a decrease in the fair value of the contingent payments payable by the Company to Parion of $69.6 million and benefit from income taxes of $126.2 million resulting from these charges. These charges and benefit from income taxes were attributable to noncontrolling interest. See Note B, “Collaborative Arrangements and Acquisitions,” and Note J, “Intangible Assets and Goodwill.” |
Nature of Business and Accoun_4
Nature of Business and Accounting Policies - Business Narrative (Details) $ in Billions | 12 Months Ended |
Dec. 31, 2018USD ($)segment | |
Accounting Policies [Abstract] | |
Cash, cash equivalents and marketable securities | $ | $ 3.2 |
Number of operating segments | segment | 1 |
Nature of Business and Accoun_5
Nature of Business and Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Contract liabilites | $ 24,900 | $ 1,700 | |
Early access sales accrual | 354,404 | $ 225,128 | 232,401 |
Accounting Standards Update 2014-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect adjustment for adoption of new accounting guidance | (24,120) | ||
Accounting Standards Update 2014-09 | Accumulated Deficit | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cumulative effect adjustment for adoption of new accounting guidance | $ 8,300 | $ 8,300 | |
HIV Protease Inhibitor Royalty | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Deferred Revenue | $ 6,900 |
Nature of Business and Accoun_6
Nature of Business and Accounting Policies - Share-Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Percentage of employees eligible for acceleration of equity awards (less than) (percent) | 5.00% |
Nature of Business and Accoun_7
Nature of Business and Accounting Policies - Advertising Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Advertising expense | $ 43.5 | $ 35.2 | $ 31.4 |
Nature of Business and Accoun_8
Nature of Business and Accounting Policies - Property and Equipment (Details) | 12 Months Ended |
Dec. 31, 2018 | |
Furniture and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 7 years |
Furniture and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 10 years |
Computers and software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 3 years |
Computers and software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 5 years |
Buildings and leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Property and equipment useful life | 40 years |
Nature of Business and Accoun_9
Nature of Business and Accounting Policies - Foreign Currency Gain (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | |||
Derivative term (less than) | 1 month | ||
Foreign Currency Translation | |||
Net foreign currency transaction gain (loss) | $ (1.1) | $ (5.5) | $ 4 |
Nature of Business and Accou_10
Nature of Business and Accounting Policies - Cumulative Effect of applying ASC 606 to the Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable, net | $ 409,688 | $ 311,224 | $ 281,343 |
Inventories | 124,360 | 111,740 | 111,830 |
Prepaid expenses and other current assets | 140,819 | 149,958 | 167,124 |
Total assets | 6,245,898 | 3,558,639 | 3,546,014 |
Accrued expenses | 604,495 | 452,547 | 443,961 |
Early access sales accrual | 354,404 | 225,128 | 232,401 |
Other liabilities, current portion | 40,589 | 36,456 | 34,373 |
Accumulated other comprehensive income (loss) | 659 | (10,623) | (11,572) |
Accumulated deficit | (2,989,478) | (5,111,443) | (5,119,723) |
Total liabilities and shareholders’ equity | 6,245,898 | 3,558,639 | $ 3,546,014 |
Balances without Adoption of ASC 606 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable, net | 376,949 | ||
Inventories | 124,506 | ||
Prepaid expenses and other current assets | 167,522 | ||
Total assets | 6,240,008 | ||
Accrued expenses | 618,873 | ||
Early access sales accrual | 380,609 | ||
Other liabilities, current portion | 14,355 | ||
Accumulated other comprehensive income (loss) | 927 | ||
Accumulated deficit | (3,009,985) | ||
Total liabilities and shareholders’ equity | 6,240,008 | ||
Effect of Change Higher/(Lower) | Accounting Standards Update 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts receivable, net | 32,739 | 29,881 | |
Inventories | (146) | (90) | |
Prepaid expenses and other current assets | (26,703) | (17,166) | |
Total assets | 5,890 | 12,625 | |
Accrued expenses | (14,378) | 8,586 | |
Early access sales accrual | (26,205) | (7,273) | |
Other liabilities, current portion | 26,234 | 2,083 | |
Accumulated other comprehensive income (loss) | (268) | 949 | |
Accumulated deficit | 20,507 | 8,280 | |
Total liabilities and shareholders’ equity | $ 5,890 | $ 12,625 |
Nature of Business and Accou_11
Nature of Business and Accounting Policies - Impact of Adopted to the Condensed Consolidated Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Product revenues, net | $ 870,106 | $ 784,535 | $ 752,157 | $ 640,799 | $ 651,634 | $ 578,165 | $ 544,135 | $ 714,718 | $ 3,047,597 | $ 2,488,652 | $ 1,702,177 |
Cost of sales | 122,289 | 111,255 | 104,382 | 71,613 | 84,052 | 72,874 | 71,205 | 46,988 | 409,539 | 275,119 | 210,460 |
Income from operations | 127,722 | 205,649 | 172,878 | 128,901 | 125,737 | (326,043) | 52,707 | 270,842 | 635,150 | 123,243 | 9,936 |
Net income (loss) attributable to Vertex | $ 1,550,527 | $ 128,746 | $ 207,360 | $ 210,263 | $ 100,684 | $ (102,952) | $ 17,996 | $ 247,756 | $ 2,096,896 | $ 263,484 | $ (112,052) |
Basic (usd per share) | $ 6.08 | $ 0.51 | $ 0.82 | $ 0.83 | $ 0.40 | $ (0.41) | $ 0.07 | $ 1.01 | $ 8.24 | $ 1.06 | $ (0.46) |
Diluted (usd per share) | $ 5.97 | $ 0.50 | $ 0.80 | $ 0.81 | $ 0.39 | $ (0.41) | $ 0.07 | $ 0.99 | $ 8.09 | $ 1.04 | $ (0.46) |
Product | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Product revenues, net | $ 868,173 | $ 782,511 | $ 749,912 | $ 637,729 | $ 621,228 | $ 549,642 | $ 513,988 | $ 480,622 | $ 3,038,325 | $ 2,165,480 | $ 1,683,632 |
Balances without Adoption of ASC 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Cost of sales | 402,925 | ||||||||||
Income from operations | 622,923 | ||||||||||
Net income (loss) attributable to Vertex | $ 2,084,669 | ||||||||||
Basic (usd per share) | $ 8.20 | ||||||||||
Diluted (usd per share) | $ 8.04 | ||||||||||
Balances without Adoption of ASC 606 | Product | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Product revenues, net | $ 3,019,484 | ||||||||||
Effect of Change Higher/(Lower) | Accounting Standards Update 2014-09 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Cost of sales | 6,614 | ||||||||||
Income from operations | 12,227 | ||||||||||
Net income (loss) attributable to Vertex | $ 12,227 | ||||||||||
Basic (usd per share) | $ 0.04 | ||||||||||
Diluted (usd per share) | $ 0.05 | ||||||||||
Effect of Change Higher/(Lower) | Accounting Standards Update 2014-09 | Product | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||||||||
Product revenues, net | $ 18,841 |
Nature of Business and Accou_12
Nature of Business and Accounting Policies Nature of Business and Accounting Policies - Equity Investments (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Unrealized gains to other (expense) income, net | $ 2.6 |
Accounting standards update 2016-01, financial instruments | Accumulated Deficit | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Cumulative effect adjustment for adoption of new accounting guidance | $ 25.1 |
Nature of Business and Accou_13
Nature of Business and Accounting Policies Nature of Business and Accounting Policies - Intra-Equity Transfers (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred tax assets | $ 1,880,125,000 | $ 1,734,542,000 |
Accounting Standards Update 2016-16 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Deferred tax assets | 204,700,000 | |
Accumulated Deficit | Accounting standards update 2016-01 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Cumulative effect adjustment for adoption of new accounting guidance | $ 0 |
Nature of Business and Accou_14
Nature of Business and Accounting Policies - Schedule of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Cash and Cash Equivalents [Line Items] | ||||
Cash and cash equivalents | $ 2,650,134 | $ 1,665,412 | $ 1,183,945 | $ 714,768 |
Cash, cash equivalents and restricted cash per statement of cash flows | 2,658,253 | 1,667,526 | 1,231,707 | 815,761 |
Prepaid and other current assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash and cash equivalents | 4,910 | 2,114 | 47,762 | 78,910 |
Other assets | ||||
Cash and Cash Equivalents [Line Items] | ||||
Restricted cash and cash equivalents | $ 3,209 | $ 0 | $ 0 | $ 22,083 |
Nature of Business and Accou_15
Nature of Business and Accounting Policies - Stock-Based Compensation - Improvement (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 01, 2017 | Dec. 31, 2016 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating loss carryforwards | $ 2,900,000 | $ 775,500 | ||
Accounting standards update 2016-09, excess tax benefit | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Operating loss carryforwards | $ 410,800 | |||
Deferred income tax assets, net | 3,400 | |||
Accounting standards update 2016-09, forfeiture rate component | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment for adoption of new accounting guidance | 9,229 | |||
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 | |||
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 | |||
Accumulated Deficit | Accounting standards update 2016-09, forfeiture rate component | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Cumulative effect adjustment for adoption of new accounting guidance | $ 33,349 | $ 9,400 | $ (9,371) |
Nature of Business and Accou_16
Nature of Business and Accounting Policies Nature of Business and Accounting Policies - Leases (Details) - Accounting Standards Update 2016-02 $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Expected future increase (decrease) in operating expenses | $ 26 |
Expected future increase (decrease) in interest expense | (13) |
Expected right-of-use assets | 60 |
Expected right-of-use liabilities | 70 |
Accumulated Deficit | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Expected cumulative effect of new accounting principle in period of adoption | $ 50 |
Collaborative Arrangements - CR
Collaborative Arrangements - CRISPR Therapeutics AG (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($) | Dec. 31, 2015USD ($)target | |
CRISPR Therapeutics | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Right to license, number of targets (up to) | target | 6 | |
Collaborative funding | $ 75,000,000 | |
Collaborative arrangement development and regulatory potential milestone payments maximum | $ 420,000,000 | |
CTX001 Co-Co Agreement | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Collaborative Arrangement Research and Development Expenses | $ 19,700,000 |
Collaborative Arrangements Coll
Collaborative Arrangements Collaborative Arrangements - Other In-License Agreements (Details) - USD ($) | 1 Months Ended | |
Dec. 31, 2018 | Jul. 31, 2016 | |
Moderna Therapeutics, Inc. | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Up-front payment | $ 20,000,000 | |
Collaborative arrangement development and regulatory potential milestone payments maximum | $ 275,000,000 | |
Arbor | ||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Up-front payment | $ 30,000,000 | |
Collaborative arrangement development and regulatory potential milestone payments maximum | 337,500,000 | |
Investment in collaborative partner, pursuant to convertible loan agreement | $ 15,000,000 |
Collaborative Arrangements - Pa
Collaborative Arrangements - Parion Sciences, Inc. (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
(Benefit from) provision for income taxes | $ (1,492,599) | $ 8,055 | $ 10,341 | $ (12,659) | $ 10,257 | $ (125,903) | $ 4,337 | $ 3,985 | $ (1,486,862) | $ (107,324) | $ 16,665 | |
Intangible asset impairment charges | $ 29,000 | $ 0 | $ 0 | $ 0 | $ 0 | 255,340 | 0 | $ 0 | 29,000 | 255,340 | 0 | |
Parion Sciences, Inc | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Up-front payment | 85,000 | $ 85,000 | ||||||||||
Collaborative and royalty revenues | 20,000 | $ 20,000 | ||||||||||
(Benefit from) provision for income taxes | (126,200) | |||||||||||
Intangible asset impairment charges | 255,300 | |||||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | (69,600) | |||||||||||
Income tax expense (benefit), attributable to intangible asset impairment | (97,700) | |||||||||||
Income tax expense (benefit), attributable to decrease in the fair value of contingent consideration liability | $ (28,500) | |||||||||||
Deconsolidation, gain (loss), amount | (7,100) | (7,100) | ||||||||||
Variable Interest Entity, Primary Beneficiary | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
(Benefit from) provision for income taxes | (3,668) | (114,090) | 16,743 | |||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | 17,730 | (62,560) | 54,850 | |||||||||
Variable Interest Entity, Primary Beneficiary | Parion Sciences, Inc | ||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||||||||||
Collaborative and royalty revenues | 40,000 | |||||||||||
(Benefit from) provision for income taxes | 14,800 | |||||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | $ 0 | $ (63,460) | $ 64,800 |
Collaborative Arrangements - Bi
Collaborative Arrangements - BioAxone Biosciences, Inc. (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2014 | Dec. 31, 2017 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Contingent liabilities | $ 0 | $ 0 | ||
BioAxone Biosciences, Inc | ||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Up-front payment | $ 10,000,000 | $ 10,000,000 | $ 10,000,000 |
Collaborative Arrangements - Ag
Collaborative Arrangements - Aggregate VIE Financial Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |||||||||||||
(Benefit from) provision for income taxes | $ (1,492,599,000) | $ 8,055,000 | $ 10,341,000 | $ (12,659,000) | $ 10,257,000 | $ (125,903,000) | $ 4,337,000 | $ 3,985,000 | $ (1,486,862,000) | $ (107,324,000) | $ 16,665,000 | ||
Net loss (income) attributable to noncontrolling interest | 25,431,000 | $ 290,000 | $ 1,110,000 | (17,038,000) | (1,501,000) | 188,315,000 | $ (13,173,000) | $ (1,792,000) | 9,793,000 | 171,849,000 | (28,021,000) | ||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net: | |||||||||||||
Intangible assets | 0 | 29,000,000 | 0 | 29,000,000 | |||||||||
Deferred tax liabilities | 0 | 6,341,000 | 0 | 6,341,000 | |||||||||
Noncontrolling interest | 0 | 13,727,000 | 0 | 13,727,000 | |||||||||
Parion Sciences, Inc | |||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||
Up-front payment | 85,000,000 | $ 85,000,000 | |||||||||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |||||||||||||
(Benefit from) provision for income taxes | (126,200,000) | ||||||||||||
(Increase) decrease in fair value of contingent payments | $ 69,600,000 | ||||||||||||
BioAxone Biosciences, Inc | |||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||
Up-front payment | $ 10,000,000 | 10,000,000 | $ 10,000,000 | ||||||||||
Fair value of the contingent payments payable | 0 | 0 | |||||||||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |||||||||||||
Contingent consideration liability | $ 18,900,000 | 18,900,000 | 18,900,000 | 18,900,000 | |||||||||
Variable Interest Entity, Primary Beneficiary | |||||||||||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |||||||||||||
Loss attributable to noncontrolling interest before (benefit from) provision for income taxes and changes in fair value of contingent payments | 31,191,000 | 223,379,000 | 10,086,000 | ||||||||||
(Benefit from) provision for income taxes | (3,668,000) | (114,090,000) | 16,743,000 | ||||||||||
(Increase) decrease in fair value of contingent payments | (17,730,000) | 62,560,000 | (54,850,000) | ||||||||||
Net loss (income) attributable to noncontrolling interest | 9,793,000 | 171,849,000 | (28,021,000) | ||||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net: | |||||||||||||
Deferred tax liabilities | 4,756,000 | 4,756,000 | |||||||||||
Noncontrolling interest | $ 13,727,000 | 13,727,000 | |||||||||||
Variable Interest Entity, Primary Beneficiary | Parion Sciences, Inc | |||||||||||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |||||||||||||
(Benefit from) provision for income taxes | 14,800,000 | ||||||||||||
(Increase) decrease in fair value of contingent payments | $ 0 | 63,460,000 | (64,800,000) | ||||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net: | |||||||||||||
Intangible assets | 255,300,000 | ||||||||||||
Variable Interest Entity, Primary Beneficiary | BioAxone Biosciences, Inc | |||||||||||||
Variable Interest Entity, Primary Beneficiary, Does Not Hold Majority Voting Interest, Disclosures [Abstract] | |||||||||||||
(Increase) decrease in fair value of contingent payments | $ (900,000) | $ 9,950,000 |
Collaborative Arrangements - Co
Collaborative Arrangements - Concert Pharmaceuticals (Details) - Concert Pharmaceuticals - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Jul. 31, 2017 | Jul. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||||
Collaborative arrangement, development and commercialization rights potential maximum milestone payments | $ 160 | $ 160 | ||
Collaborative arrangement, additional maximum milestone payments based on regulatory approval | $ 90 | |||
Collaborative funding | $ 160 | |||
Collaborative arrangement, purchase price | $ 165.1 | |||
Collaborative arrangement, transaction costs | $ 5.1 |
Collaborative Arrangements - Me
Collaborative Arrangements - Merck KGaA (Details) - Merck KGaA | 1 Months Ended | 3 Months Ended | |
Dec. 31, 2018USD ($) | Jan. 31, 2017USD ($)pre-clinical_stage_programclinical-stage_programdevelopment_program | Mar. 31, 2017USD ($) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||
Right to license, number of development programs | development_program | 4 | ||
Right to license, number of clinical stage programs | clinical-stage_program | 2 | ||
Number of pre-clinical stage programs | pre-clinical_stage_program | 2 | ||
Up-front payment | $ 65,000,000 | $ 230,000,000 | |
Collaborative arrangement development and regulatory potential milestone payments maximum | $ 230,000,000 |
Collaborative Arrangements - Ja
Collaborative Arrangements - Janssen Pharmaceuticals, Inc. (Details) - Janssen - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2014 | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | ||
Collaborative arrangement, up-front payment | $ 35 | |
Collaborative and royalty revenues | $ 25 |
Collaborative Arrangements - Cy
Collaborative Arrangements - Cystic Fibrosis Foundation Therapeutics Incorporated (Details) - Cystic Fibrosis Foundation Therapeutics Incorporated | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |
Milestone payments | $ 13,900,000 |
Collaborative funding | 75,000,000 |
Additional collaborative funding | $ 6,000,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Basic net income (loss) attributable to Vertex per common share calculation: | |||||||||||
Net income (loss) attributable to Vertex common shareholders | $ 1,550,527 | $ 128,746 | $ 207,360 | $ 210,263 | $ 100,684 | $ (102,952) | $ 17,996 | $ 247,756 | $ 2,096,896 | $ 263,484 | $ (112,052) |
Less: Undistributed earnings allocated to participating securities | (501) | (293) | 0 | ||||||||
Net income (loss) attributable to Vertex common shareholders—basic | $ 2,096,395 | $ 263,191 | $ (112,052) | ||||||||
Basic weighted-average common shares outstanding | 254,868 | 254,905 | 254,135 | 253,231 | 251,557 | 250,268 | 247,521 | 246,024 | 254,292 | 248,858 | 244,685 |
Basic net income (loss) attributable to Vertex per common share (usd per share) | $ 6.08 | $ 0.51 | $ 0.82 | $ 0.83 | $ 0.40 | $ (0.41) | $ 0.07 | $ 1.01 | $ 8.24 | $ 1.06 | $ (0.46) |
Diluted net income (loss) attributable to Vertex per common share calculation: | |||||||||||
Net income (loss) attributable to Vertex common shareholders—diluted | $ 2,096,404 | $ 263,196 | $ (112,052) | ||||||||
Less: Undistributed earnings allocated to participating securities | $ (492) | $ (288) | $ 0 | ||||||||
Employee stock purchase plan (in shares) | 17 | 28 | 0 | ||||||||
Weighted-average shares used to compute diluted net income (loss) per common share | 259,812 | 259,788 | 258,584 | 258,526 | 256,804 | 250,268 | 251,635 | 248,700 | 259,185 | 253,225 | 244,685 |
Diluted net income (loss) attributable to Vertex per common share (usd per share) | $ 5.97 | $ 0.50 | $ 0.80 | $ 0.81 | $ 0.39 | $ (0.41) | $ 0.07 | $ 0.99 | $ 8.09 | $ 1.04 | $ (0.46) |
Stock options | |||||||||||
Diluted net income (loss) attributable to Vertex per common share calculation: | |||||||||||
Share-based payment arrangements (in shares) | 2,913 | 2,797 | 0 | ||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 2,217 | 3,554 | 12,642 | ||||||||
Unvested restricted stock and restricted stock units (including PSUs) | |||||||||||
Diluted net income (loss) attributable to Vertex per common share calculation: | |||||||||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 5 | 411 | 3,546 | ||||||||
Restricted stock and restricted stock units (including PSUs) | |||||||||||
Diluted net income (loss) attributable to Vertex per common share calculation: | |||||||||||
Share-based payment arrangements (in shares) | 1,963 | 1,542 | 0 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Financial instruments carried at fair value (asset position): | ||
Total financial assets | $ 1,836,605 | $ 1,108,253 |
Total financial liabilities | (448) | (14,508) |
Money market funds | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 1,226,603 | 614,951 |
U.S. Treasury securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 5,966 | |
Marketable securities | 6,026 | |
Government-sponsored enterprise securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 7,123 | 12,678 |
Marketable securities | 10,704 | 2,303 |
Commercial paper | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 58,268 | 57,357 |
Marketable securities | 100,390 | 80,263 |
Corporate equity securities | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 167,323 | 74,821 |
Corporate debt securities | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 233,665 | 265,867 |
Prepaid and other current assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Prepaid and other current assets | 19,023 | 13 |
Other assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other assets | 1,514 | |
Other liabilities, current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Foreign currency forward contracts | (340) | (13,642) |
Other liabilities, excluding current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other liabilities, excluding current portion | (108) | (866) |
Level 1 | ||
Financial instruments carried at fair value (asset position): | ||
Total financial assets | 1,410,155 | 704,753 |
Total financial liabilities | 0 | 0 |
Level 1 | Money market funds | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 1,226,603 | 614,951 |
Level 1 | U.S. Treasury securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 5,966 | |
Marketable securities | 6,026 | |
Level 1 | Government-sponsored enterprise securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 7,123 | 12,678 |
Marketable securities | 10,704 | 2,303 |
Level 1 | Commercial paper | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 0 | 0 |
Marketable securities | 0 | 0 |
Level 1 | Corporate equity securities | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 153,733 | 74,821 |
Level 1 | Corporate debt securities | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 0 | 0 |
Level 1 | Prepaid and other current assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Prepaid and other current assets | 0 | 0 |
Level 1 | Other assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other assets | 0 | |
Level 1 | Other liabilities, current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Foreign currency forward contracts | 0 | 0 |
Level 1 | Other liabilities, excluding current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other liabilities, excluding current portion | 0 | 0 |
Level 2 | ||
Financial instruments carried at fair value (asset position): | ||
Total financial assets | 426,450 | 403,500 |
Total financial liabilities | (448) | (14,508) |
Level 2 | Money market funds | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 0 | 0 |
Level 2 | U.S. Treasury securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 0 | |
Marketable securities | 0 | |
Level 2 | Government-sponsored enterprise securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 0 | 0 |
Marketable securities | 0 | 0 |
Level 2 | Commercial paper | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 58,268 | 57,357 |
Marketable securities | 100,390 | 80,263 |
Level 2 | Corporate equity securities | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 13,590 | 0 |
Level 2 | Corporate debt securities | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 233,665 | 265,867 |
Level 2 | Prepaid and other current assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Prepaid and other current assets | 19,023 | 13 |
Level 2 | Other assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other assets | 1,514 | |
Level 2 | Other liabilities, current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Foreign currency forward contracts | (340) | (13,642) |
Level 2 | Other liabilities, excluding current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other liabilities, excluding current portion | (108) | (866) |
Level 3 | ||
Financial instruments carried at fair value (asset position): | ||
Total financial assets | 0 | 0 |
Total financial liabilities | 0 | 0 |
Level 3 | Money market funds | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 0 | 0 |
Level 3 | U.S. Treasury securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 0 | |
Marketable securities | 0 | |
Level 3 | Government-sponsored enterprise securities | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 0 | 0 |
Marketable securities | 0 | 0 |
Level 3 | Commercial paper | ||
Financial instruments carried at fair value (asset position): | ||
Cash equivalents | 0 | 0 |
Marketable securities | 0 | 0 |
Level 3 | Corporate equity securities | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 0 | 0 |
Level 3 | Corporate debt securities | ||
Financial instruments carried at fair value (asset position): | ||
Marketable securities | 0 | 0 |
Level 3 | Prepaid and other current assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Prepaid and other current assets | 0 | 0 |
Level 3 | Other assets | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other assets | 0 | |
Level 3 | Other liabilities, current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Foreign currency forward contracts | 0 | 0 |
Level 3 | Other liabilities, excluding current portion | Foreign currency forward contracts | ||
Financial instruments carried at fair value (asset position): | ||
Other liabilities, excluding current portion | $ 0 | $ 0 |
Marketable Securities and Equ_3
Marketable Securities and Equity Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Available-for-sale Debt Securities | ||
Fair Value | $ 1,648,745 | $ 1,033,419 |
Equity Securities, FV-NI and without Readily Determinable Fair Value [Abstract] | ||
Amortized Cost | 484,473 | |
Gross Unrealized Gains | 40,646 | |
Gross Unrealized Losses | 7,011 | |
Fair Value | 518,108 | |
Amortized Cost | 392,225 | |
Gross Unrealized Gains | 31,608 | |
Gross Unrealized Losses | (579) | |
Fair Value | 423,254 | |
Money market funds | ||
Summary of cash, cash equivalents and marketable securities | ||
Amortized Cost | 1,226,603 | 614,951 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 1,226,603 | 614,951 |
U.S. Treasury securities | ||
Summary of cash, cash equivalents and marketable securities | ||
Amortized Cost | 5,967 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 1 | |
Fair Value | 5,966 | |
Government-sponsored enterprise securities | ||
Summary of cash, cash equivalents and marketable securities | ||
Amortized Cost | 7,124 | 12,679 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 1 | 1 |
Fair Value | 7,123 | 12,678 |
Commercial paper | ||
Summary of cash, cash equivalents and marketable securities | ||
Amortized Cost | 58,271 | 57,371 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 3 | 14 |
Fair Value | 58,268 | 57,357 |
Cash Equivalents | ||
Summary of cash, cash equivalents and marketable securities | ||
Amortized Cost | 1,297,965 | 685,001 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 5 | 15 |
Fair Value | 1,297,960 | 684,986 |
Total marketable debt securities | ||
Available-for-sale Debt Securities | ||
Amortized Cost | 351,316 | 349,012 |
Gross Unrealized Gains | 27 | 0 |
Gross Unrealized Losses | (558) | (579) |
Fair Value | 350,785 | 348,433 |
US Treasury securities (matures within 1 year) | ||
Available-for-sale Debt Securities | ||
Amortized Cost | 6,026 | |
Gross Unrealized Gains | 0 | |
Gross Unrealized Losses | 0 | |
Fair Value | 6,026 | |
Government-sponsored enterprise securities (matures within 1 year) | ||
Available-for-sale Debt Securities | ||
Amortized Cost | 10,704 | 2,304 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | (1) |
Fair Value | 10,704 | 2,303 |
Corporate debt securities (matures within 1 year) | ||
Available-for-sale Debt Securities | ||
Amortized Cost | 232,845 | 215,639 |
Gross Unrealized Gains | 25 | 0 |
Gross Unrealized Losses | (450) | (363) |
Fair Value | 232,420 | 215,276 |
Corporate debt securities (matures after 1 year through 5 years) | ||
Available-for-sale Debt Securities | ||
Amortized Cost | 1,243 | 50,697 |
Gross Unrealized Gains | 2 | 0 |
Gross Unrealized Losses | 0 | (106) |
Fair Value | 1,245 | 50,591 |
Commercial Paper (matures within 1 year) | ||
Available-for-sale Debt Securities | ||
Amortized Cost | 100,498 | 80,372 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | (108) | (109) |
Fair Value | 100,390 | 80,263 |
Corporate equity securities | ||
Equity Securities, FV-NI and without Readily Determinable Fair Value [Abstract] | ||
Amortized Cost | 133,157 | |
Gross Unrealized Gains | 40,619 | |
Gross Unrealized Losses | 6,453 | |
Fair Value | $ 167,323 | |
Amortized Cost | 43,213 | |
Gross Unrealized Gains | 31,608 | |
Gross Unrealized Losses | 0 | |
Fair Value | $ 74,821 |
Marketable Securities and Equ_4
Marketable Securities and Equity Investments Marketable Securities and Equity Investments - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary of cash, cash equivalents and marketable securities | |||
Other-than-temporary declines in fair value of available-for-sale debt securities | $ 0 | $ 0 | $ 0 |
Gross realized gains or losses | 0 | $ 0 | $ 0 |
Unrealized gains to other (expense) income, net | 2,600,000 | ||
Other assets | |||
Summary of cash, cash equivalents and marketable securities | |||
Equity securities without readily determinable fair value, amount | 13,600,000 | ||
CRISPR Therapeutics | |||
Summary of cash, cash equivalents and marketable securities | |||
Marketable securities, fair value, investment in common stock | 153,700,000 | ||
Unrealized gains to other (expense) income, net | 9,000,000 | ||
Payments to acquire investment | 69,900,000 | ||
Moderna Therapeutics, Inc. | |||
Summary of cash, cash equivalents and marketable securities | |||
Marketable securities, fair value, investment in common stock | 13,600,000 | ||
Unrealized gains to other (expense) income, net | $ 6,500,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance | $ 2,042,306 | $ 1,338,191 | $ 1,093,628 |
Other comprehensive income before reclassifications | 34,577 | (35,390) | 28,996 |
Amounts reclassified from accumulated other comprehensive income (loss) | 1,774 | 2,645 | (9,647) |
Total changes in other comprehensive income (loss) | 36,351 | (32,745) | 19,349 |
Balance | 4,435,203 | 2,042,306 | 1,338,191 |
Foreign Currency Translation Adjustment | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance | (21,031) | (7,862) | (2,080) |
Other comprehensive income before reclassifications | 8,855 | (13,169) | (5,782) |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 |
Total changes in other comprehensive income (loss) | 8,855 | (13,169) | (5,782) |
Balance | (11,227) | (21,031) | (7,862) |
On Available-For-Sale Debt Securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance | (594) | (10) | 126 |
Other comprehensive income before reclassifications | 58 | (584) | (136) |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 |
Total changes in other comprehensive income (loss) | 58 | (584) | (136) |
Balance | (536) | (594) | (10) |
On Equity Securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance | 25,069 | 17,531 | 0 |
Other comprehensive income before reclassifications | 0 | 7,538 | 17,531 |
Amounts reclassified from accumulated other comprehensive income (loss) | 0 | 0 | 0 |
Total changes in other comprehensive income (loss) | 0 | 7,538 | 17,531 |
Balance | 0 | 25,069 | 17,531 |
On Foreign Currency Forward Contracts | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance | (15,016) | 11,514 | 3,778 |
Other comprehensive income before reclassifications | 25,664 | (29,175) | 17,383 |
Amounts reclassified from accumulated other comprehensive income (loss) | 1,774 | 2,645 | (9,647) |
Total changes in other comprehensive income (loss) | 27,438 | (26,530) | 7,736 |
Balance | 12,422 | (15,016) | 11,514 |
AOCI Attributable to Parent | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Balance | (11,572) | 21,173 | 1,824 |
Total changes in other comprehensive income (loss) | 36,351 | (32,745) | 19,349 |
Balance | 659 | $ (11,572) | $ 21,173 |
Accounting Standards Update 2014-09 | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect adjustment for adoption of new accounting guidance | (24,120) | ||
Accounting Standards Update 2014-09 | Foreign Currency Translation Adjustment | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect adjustment for adoption of new accounting guidance | 949 | ||
Accounting Standards Update 2014-09 | On Available-For-Sale Debt Securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect adjustment for adoption of new accounting guidance | 0 | ||
Accounting Standards Update 2014-09 | On Equity Securities | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect adjustment for adoption of new accounting guidance | (25,069) | ||
Accounting Standards Update 2014-09 | On Foreign Currency Forward Contracts | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Cumulative effect adjustment for adoption of new accounting guidance | $ 0 |
Hedging - Narrative (Details)
Hedging - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative term | 1 month |
Foreign currency forward contracts | Not designated as hedging instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Derivative term | 1 year |
Foreign currency forward contracts | Not designated as hedging instrument | Cash Flow Hedging | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Notional amount of foreign currency forward contract | $ 251.4 |
Hedging - Notional Amount (Deta
Hedging - Notional Amount (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative [Line Items] | ||
Derivative term | 1 month | |
Designated as hedging instruments | Cash Flow Hedging | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | $ 505,218 | $ 365,212 |
Designated as hedging instruments | Cash Flow Hedging | Foreign currency forward contracts | Euro | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | 335,179 | 257,230 |
Designated as hedging instruments | Cash Flow Hedging | Foreign currency forward contracts | British pound sterling | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | 73,460 | 77,481 |
Designated as hedging instruments | Cash Flow Hedging | Foreign currency forward contracts | Australian dollar | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | 52,820 | 30,501 |
Designated as hedging instruments | Cash Flow Hedging | Foreign currency forward contracts | Canadian dollar | ||
Derivative [Line Items] | ||
Notional amount of foreign currency forward contract | $ 43,759 | $ 0 |
Minimum | Cash Flow Hedging | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Derivative term | 1 month | |
Maximum | Cash Flow Hedging | Foreign currency forward contracts | ||
Derivative [Line Items] | ||
Derivative term | 18 months |
Hedging Hedging - Cash Flow Hed
Hedging Hedging - Cash Flow Hedging Instruments (Details) - Foreign currency forward contracts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Product revenues, net | Designated as hedging instruments | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on cash flow hedging instruments | $ (1,252) | $ 768 | $ 10,543 |
Other (expense) income, net | Not designated as hedging instrument | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain (loss) on cash flow hedging instruments | $ 623 | $ 14,129 | $ (6,917) |
Hedging - Derivative Fair Value
Hedging - Derivative Fair Value (Details) - Foreign currency forward contracts - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Total assets | $ 20,537 | $ 13 |
Total liabilities | (448) | (14,508) |
Designated as hedging instruments | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Total assets | 20,537 | 13 |
Total liabilities | (448) | (14,508) |
Prepaid and other current assets | Designated as hedging instruments | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Fair value - assets | 19,023 | 13 |
Other liabilities, current portion | Designated as hedging instruments | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Fair value - liabilities | (340) | (13,642) |
Other assets | Designated as hedging instruments | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Fair value - assets | 1,514 | 0 |
Other liabilities, excluding current portion | Designated as hedging instruments | ||
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract] | ||
Fair value - liabilities | $ (108) | $ (866) |
Hedging - Offsetting Derivative
Hedging - Offsetting Derivatives (Details) - Foreign currency forward contracts - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Offsetting Derivative Assets [Abstract] | ||
Gross Amounts Recognized | $ 20,537 | $ 13 |
Gross Amounts Offset | 0 | 0 |
Gross Amounts Presented | 20,537 | 13 |
Gross Amounts Not Offset | (448) | (13) |
Legal Offset | 20,089 | 0 |
Offsetting Derivative Liabilities [Abstract] | ||
Gross Amounts Recognized | (448) | (14,508) |
Gross Amounts Offset | 0 | 0 |
Gross Amounts Presented | (448) | (14,508) |
Gross Amounts Not Offset | 448 | 13 |
Legal Offset | $ 0 | $ (14,495) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | |||
Raw materials | $ 9,677 | $ 20,924 | |
Work-in-process | 87,944 | 74,237 | |
Finished goods | 26,739 | 16,669 | |
Total | $ 124,360 | $ 111,740 | $ 111,830 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 1,263,448 | $ 1,221,560 |
Less: accumulated depreciation | (451,443) | (432,123) |
Total property and equipment, net | 812,005 | 789,437 |
Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 657,438 | 634,061 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 280,908 | 256,509 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 162,601 | 151,890 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | 103,428 | 117,806 |
Computers | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment, gross | $ 59,073 | $ 61,294 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |||
Total capital leased assets, gross | $ 94.8 | $ 100.9 | |
Capital leases accumulated depreciation | 34 | 43.4 | |
Depreciation expense | $ 72.4 | $ 61.4 | $ 60.8 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Indefinite-Lived Intangible Assets [Line Items] | |||||||||||
Intangible assets | $ 0 | $ 29,000,000 | $ 0 | $ 29,000,000 | |||||||
Intangible asset impairment charges | 29,000,000 | $ 0 | $ 0 | $ 0 | 0 | $ 255,340,000 | $ 0 | $ 0 | 29,000,000 | 255,340,000 | $ 0 |
(Benefit from) provision for income taxes | (1,492,599,000) | $ 8,055,000 | $ 10,341,000 | $ (12,659,000) | 10,257,000 | (125,903,000) | $ 4,337,000 | $ 3,985,000 | (1,486,862,000) | (107,324,000) | 16,665,000 |
Goodwill | $ 50,384,000 | $ 50,384,000 | 50,384,000 | 50,384,000 | |||||||
Parion Sciences, Inc | |||||||||||
Indefinite-Lived Intangible Assets [Line Items] | |||||||||||
Intangible asset impairment charges | 255,300,000 | ||||||||||
(Benefit from) provision for income taxes | (126,200,000) | ||||||||||
Variable Interest Entity, Primary Beneficiary | |||||||||||
Indefinite-Lived Intangible Assets [Line Items] | |||||||||||
(Benefit from) provision for income taxes | (3,668,000) | (114,090,000) | 16,743,000 | ||||||||
Variable Interest Entity, Primary Beneficiary | Parion Sciences, Inc | |||||||||||
Indefinite-Lived Intangible Assets [Line Items] | |||||||||||
Intangible assets | $ 255,300,000 | ||||||||||
Fair value of intangible asset | 0 | ||||||||||
(Benefit from) provision for income taxes | 14,800,000 | ||||||||||
Other Intangible Assets | Variable Interest Entity, Primary Beneficiary | Parion Sciences, Inc | |||||||||||
Indefinite-Lived Intangible Assets [Line Items] | |||||||||||
Intangible asset impairment charges | 255,300,000 | 255,300,000 | |||||||||
(Benefit from) provision for income taxes | $ (97,700,000) | ||||||||||
Other Intangible Assets | Variable Interest Entity, Primary Beneficiary | BioAxone Biosciences, Inc | |||||||||||
Indefinite-Lived Intangible Assets [Line Items] | |||||||||||
Intangible asset impairment charges | $ 29,000,000 | ||||||||||
(Benefit from) provision for income taxes | $ (7,900,000) |
Additional Balance Sheet Deta_3
Additional Balance Sheet Detail (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Prepaid and other current assets | |||
Prepaid expenses | $ 74,045 | $ 62,475 | |
Collaborative accounts receivable | 5,182 | 28,907 | |
Other receivables and assets | 61,592 | 75,742 | |
Total | 140,819 | $ 149,958 | 167,124 |
Accrued expenses | |||
Payroll and benefits | 124,753 | 113,026 | |
Research, development and commercial contract costs | 115,300 | 98,411 | |
Product revenue allowances | 195,598 | 119,919 | |
Royalty payable | 101,108 | 73,044 | |
Other | 67,736 | 39,561 | |
Total | $ 604,495 | $ 452,547 | $ 443,961 |
Long Term Obligations - Fan Pie
Long Term Obligations - Fan Pier Leases (Details) - Fan Pier Leases ft² in Millions | 12 Months Ended |
Dec. 31, 2011ft²leasebuilding | |
Lessee, Lease, Description [Line Items] | |
Number of leases | lease | 2 |
Area of real estate property (in square feet) | ft² | 1.1 |
Lease agreements number of buildings | building | 2 |
Optional term of lease agreement (in years) | 10 years |
Long Term Obligations - San Die
Long Term Obligations - San Diego Lease (Details) - San Diego Lease ft² in Thousands, $ in Millions | 12 Months Ended |
Dec. 31, 2015USD ($)ft²term | |
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 | $ | $ 10.2 |
Amount of optional renewal terms | term | 2 |
Optional renewal term length | 5 years |
Long Term Obligations Long Te_2
Long Term Obligations Long Term Obligations - Lease Obligations (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $ 812,005 | $ 789,437 |
Fan Pier Leases | Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 462,863 | 475,725 |
Construction financing lease obligation | 471,058 | 472,070 |
San Diego Lease | Buildings | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | 113,296 | 94,602 |
Construction financing lease obligation | $ 96,105 | $ 87,392 |
Long Term Obligations - Revolvi
Long Term Obligations - Revolving Credit Facility (Details) | 1 Months Ended | |
Feb. 28, 2017USD ($) | Oct. 31, 2016USD ($) | |
Line of Credit Facility [Line Items] | ||
Line of of credit facility, fair value of amount outstanding | $ 300,000,000 | |
Line of credit facility, additional borrowing capacity | $ 300,000,000 | |
Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Line of credit facility, current borrowing capacity | $ 500,000,000 | |
Debt covenant, consolidated leverage ratio | 3 | |
Debt covenant, minimum consolidated EBITDA | $ 200,000,000 | |
Line of Credit | Minimum | Base Rate | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percent) | 0.75% | |
Line of Credit | Minimum | Eurodollar | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percent) | 1.75% | |
Line of Credit | Maximum | Base Rate | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percent) | 1.50% | |
Line of Credit | Maximum | Eurodollar | ||
Line of Credit Facility [Line Items] | ||
Interest rate (percent) | 2.50% |
Common Stock, Preferred Stock_3
Common Stock, Preferred Stock and Equity Plans - Stock and Option Plans (Details) | 12 Months Ended | |
Dec. 31, 2018voteshares | Dec. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Common stock, shares authorized (shares) | 500,000,000 | 500,000,000 |
Common stock, number of votes per share | vote | 1 | |
Preferred stock, shares authorized (shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Awards outstanding (shares) | 12,506,101 | |
Additional awards authorized for grant (shares) | 14,737,360 | |
2013 Stock and Option Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards outstanding (shares) | 10,735,107 | |
Additional awards authorized for grant (shares) | 14,737,360 | |
Additional shares authorized (shares) | 8,000,000 | 6,750,000 |
2006 Stock and Option Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Awards outstanding (shares) | 1,770,994 | |
Additional awards authorized for grant (shares) | 0 | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiration period | 10 years |
Common Stock, Preferred Stock_4
Common Stock, Preferred Stock and Equity Plans - Share Repurchase Program (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($)shares | |
Equity [Abstract] | |
Number of shares authorized to be repurchased | 500,000,000 |
Repurchase of common stock (shares) | 2,093,891 |
Repurchases of common stock | $ | $ 350,043 |
Common Stock, Preferred Stock_5
Common Stock, Preferred Stock and Equity Plans - Outstanding and Vested Stock Options (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock Options | |||
Stock options outstanding at beginning of period (in shares) | 9,767 | ||
Stock options granted (in shares) | 2,297 | ||
Stock options exercised (in shares) | (3,076) | ||
Stock options forfeited (in shares) | (431) | ||
Stock options expired (in shares) | (6) | ||
Stock options outstanding at end of period (in shares) | 8,551 | 9,767 | |
Stock options exercisable at end of period (in shares) | 4,577 | ||
Weighted-average Exercise Price | |||
Weighted-average exercise price outstanding at beginning of period (usd per share) | $ 91.57 | ||
Weighted average exercise price, granted (usd per share) | 164.11 | ||
Weighted average exercise price, exercised (usd per share) | 85.66 | ||
Weighted average exercise price, forfeited (usd per share) | 125.37 | ||
Weighted average exercise price, expired (usd per share) | 98.30 | ||
Weighted-average exercise price outstanding at end of period (usd per share) | 111.46 | $ 91.57 | |
Weighted average exercise price exercisable at the end of the period (usd per share) | $ 93.21 | ||
Weighted-average Remaining Contractual Life | |||
Weighted-average Remaining Contractual Life, outstanding (in years) | 6 years 11 months 1 day | ||
Weighted-average Remaining Contractual Life, exercisable (in years) | 5 years 7 months 17 days | ||
Aggregate Intrinsic Value | |||
Aggregate intrinsic value, outstanding | $ 462,563 | ||
Aggregate intrinsic value, exercisable | 325,382 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of stock options exercised | 258,200 | $ 302,800 | $ 48,600 |
Total cash received from employees as a result of employee stock option exercises | $ 263,400 | $ 323,300 | $ 48,500 |
Weighted Average | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Market share price (usd per share) | $ 164.11 |
Common Stock, Preferred Stock_6
Common Stock, Preferred Stock and Equity Plans - Stock Options Outstanding and Exercisable (Details) shares in Thousands | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Stock options outstanding and exercisable | |
Options outstanding (in shares) | shares | 8,551 |
Options outstanding, weighted-average remaining contractual life | 6 years 11 months 1 day |
Options outstanding, weighted-average exercise price (usd per share) | $ 111.46 |
Options exercisable (in shares) | shares | 4,577 |
Options exercisable, weighted-average exercise price (usd per share) | $ 93.21 |
$29.07–$40.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (usd per share) | 29.07 |
Exercise price, high end of range (usd per share) | $ 40 |
Options outstanding (in shares) | shares | 532 |
Options outstanding, weighted-average remaining contractual life | 1 year 29 days |
Options outstanding, weighted-average exercise price (usd per share) | $ 34.89 |
Options exercisable (in shares) | shares | 532 |
Options exercisable, weighted-average exercise price (usd per share) | $ 35.89 |
$40.01–$60.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (usd per share) | 40.01 |
Exercise price, high end of range (usd per share) | $ 60 |
Options outstanding (in shares) | shares | 470 |
Options outstanding, weighted-average remaining contractual life | 3 years 6 months 4 days |
Options outstanding, weighted-average exercise price (usd per share) | $ 50.04 |
Options exercisable (in shares) | shares | 470 |
Options exercisable, weighted-average exercise price (usd per share) | $ 50.04 |
$60.01–$80.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (usd per share) | 60.01 |
Exercise price, high end of range (usd per share) | $ 80 |
Options outstanding (in shares) | shares | 543 |
Options outstanding, weighted-average remaining contractual life | 5 years 3 months |
Options outstanding, weighted-average exercise price (usd per share) | $ 74.90 |
Options exercisable (in shares) | shares | 533 |
Options exercisable, weighted-average exercise price (usd per share) | $ 74.89 |
$80.01–$100.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (usd per share) | 80.01 |
Exercise price, high end of range (usd per share) | $ 100 |
Options outstanding (in shares) | shares | 2,839 |
Options outstanding, weighted-average remaining contractual life | 7 years 2 months 5 days |
Options outstanding, weighted-average exercise price (usd per share) | $ 89.19 |
Options exercisable (in shares) | shares | 1,320 |
Options exercisable, weighted-average exercise price (usd per share) | $ 89.85 |
$100.01–$120.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (usd per share) | 100.01 |
Exercise price, high end of range (usd per share) | $ 120 |
Options outstanding (in shares) | shares | 693 |
Options outstanding, weighted-average remaining contractual life | 6 years 1 month 2 days |
Options outstanding, weighted-average exercise price (usd per share) | $ 109.30 |
Options exercisable (in shares) | shares | 603 |
Options exercisable, weighted-average exercise price (usd per share) | $ 109.22 |
$120.01–$140.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (usd per share) | 120.01 |
Exercise price, high end of range (usd per share) | $ 140 |
Options outstanding (in shares) | shares | 839 |
Options outstanding, weighted-average remaining contractual life | 6 years 7 months 13 days |
Options outstanding, weighted-average exercise price (usd per share) | $ 130.27 |
Options exercisable (in shares) | shares | 642 |
Options exercisable, weighted-average exercise price (usd per share) | $ 130.24 |
$140.01–$160.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (usd per share) | 140.01 |
Exercise price, high end of range (usd per share) | $ 160 |
Options outstanding (in shares) | shares | 1,400 |
Options outstanding, weighted-average remaining contractual life | 9 years 22 days |
Options outstanding, weighted-average exercise price (usd per share) | $ 155.52 |
Options exercisable (in shares) | shares | 271 |
Options exercisable, weighted-average exercise price (usd per share) | $ 155.30 |
$160.01–$180.00 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (usd per share) | 160.01 |
Exercise price, high end of range (usd per share) | $ 160 |
Options outstanding (in shares) | shares | 526 |
Options outstanding, weighted-average remaining contractual life | 8 years 6 months |
Options outstanding, weighted-average exercise price (usd per share) | $ 162.94 |
Options exercisable (in shares) | shares | 156 |
Options exercisable, weighted-average exercise price (usd per share) | $ 162.94 |
$180.01–$181.60 | |
Stock options outstanding and exercisable | |
Exercise price, low end of range (usd per share) | 180.01 |
Exercise price, high end of range (usd per share) | $ 181.6 |
Options outstanding (in shares) | shares | 709 |
Options outstanding, weighted-average remaining contractual life | 9 years 6 months 11 days |
Options outstanding, weighted-average exercise price (usd per share) | $ 181.60 |
Options exercisable (in shares) | shares | 50 |
Options exercisable, weighted-average exercise price (usd per share) | $ 181.60 |
Common Stock, Preferred Stock_7
Common Stock, Preferred Stock and Equity Plans - Restricted Stock and Restricted Stock Units and PSUs (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted Stock | |||
Restricted stock and Restricted Stock Units | |||
Beginning of the period (in shares) | 1,229 | ||
Granted (in shares) | 0 | ||
Vested (in shares) | (690) | ||
Cancelled (in shares) | (59) | ||
End of the period (in shares) | 480 | 1,229 | |
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, as of the beginning of the period (usd per share) | $ 102.12 | ||
Weighted-average grant-date fair value, granted (usd per share) | 0 | ||
Weighted-average grant-date fair value, vested (usd per share) | 100.07 | ||
Weighted-average grant-date fair value, cancelled (usd per share) | 101.55 | ||
Weighted-average grant-date fair value, as of the end of the period (usd per share) | $ 104.91 | $ 102.12 | |
Restricted stock vested in period, total fair value | $ 114.5 | $ 157 | $ 74.1 |
Restricted Stock Units (excluding PSUs) | |||
Restricted stock and Restricted Stock Units | |||
Beginning of the period (in shares) | 2,011 | ||
Granted (in shares) | 1,600 | ||
Vested (in shares) | (629) | ||
Cancelled (in shares) | (265) | ||
End of the period (in shares) | 2,717 | 2,011 | |
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, as of the beginning of the period (usd per share) | $ 109.27 | ||
Weighted-average grant-date fair value, granted (usd per share) | 164.70 | ||
Weighted-average grant-date fair value, vested (usd per share) | 108.02 | ||
Weighted-average grant-date fair value, cancelled (usd per share) | 132.26 | ||
Weighted-average grant-date fair value, as of the end of the period (usd per share) | $ 140.10 | $ 109.27 | |
Restricted stock vested in period, total fair value | $ 104.8 | $ 33.2 | $ 5.3 |
Performance-based RSUs | |||
Restricted stock and Restricted Stock Units | |||
Beginning of the period (in shares) | 484 | ||
Granted (in shares) | 494 | ||
Vested (in shares) | (154) | ||
Cancelled (in shares) | (65) | ||
End of the period (in shares) | 759 | 484 | |
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Weighted-average grant-date fair value, as of the beginning of the period (usd per share) | $ 87.59 | ||
Weighted-average grant-date fair value, granted (usd per share) | 152.40 | ||
Weighted-average grant-date fair value, vested (usd per share) | 87.13 | ||
Weighted-average grant-date fair value, cancelled (usd per share) | 99.34 | ||
Weighted-average grant-date fair value, as of the end of the period (usd per share) | $ 110.50 | $ 87.59 | |
Restricted stock vested in period, total fair value | $ 23.2 | $ 1.3 | |
Potential awards, percent of target shares, minimum | 0.00% | ||
Potential awards, percent of target shares, maximum | 200.00% | ||
Performance-based RSUs | Tranche one | |||
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Percent of awards in tranche | 50.00% | ||
Performance period | 1 year | ||
Vesting period | 3 years | ||
Performance-based RSUs | Tranche two | |||
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | |||
Percent of awards in tranche | 50.00% | ||
Performance period | 3 years | ||
Vesting period | 3 years |
Common Stock, Preferred Stock_8
Common Stock, Preferred Stock and Equity Plans - Performance-based RSUs (PSUs) (Details) - Performance-based RSUs - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restricted stock and Restricted Stock Units | ||
Beginning of the period (in shares) | 484 | |
Granted (in shares) | 494 | |
Vested (in shares) | (154) | |
Cancelled (in shares) | (65) | |
End of the period (in shares) | 759 | 484 |
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | ||
Weighted-average grant-date fair value, as of the beginning of the period (usd per share) | $ 87.59 | |
Weighted average fair value (usd per share) | 152.40 | |
Weighted-average grant-date fair value, vested (usd per share) | 87.13 | |
Weighted-average grant-date fair value, cancelled (usd per share) | 99.34 | |
Weighted-average grant-date fair value, as of the end of the period (usd per share) | $ 110.50 | $ 87.59 |
Potential awards, percent of target shares, minimum | 0.00% | |
Potential awards, percent of target shares, maximum | 200.00% | |
Restricted stock vested in period, total fair value | $ 23.2 | $ 1.3 |
Tranche one | ||
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | ||
Percent of awards in tranche | 50.00% | |
Performance period | 1 year | |
Vesting period | 3 years | |
Tranche two | ||
Restricted stock and Restricted Stock Units, weighted-average grant-date fair value | ||
Percent of awards in tranche | 50.00% | |
Performance period | 3 years | |
Vesting period | 3 years |
Common Stock, Preferred Stock_9
Common Stock, Preferred Stock and Equity Plans - Employee Stock Purchase Plan (Details) - ESPP share issuances | 12 Months Ended |
Dec. 31, 2018period$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of purchase periods | period | 2 |
Duration of purchase period | 6 months |
Offering period (in months) | 12 months |
Eligible employee purchase price percentage of fair value | 85.00% |
Number of shares authorized (shares) | 402,602 |
Number of shares (shares) | 213,654,000 |
Average price paid per share (usd per share) | $ / shares | $ 117.52 |
Stock-based Compensation Expe_3
Stock-based Compensation Expense (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Stock-based compensation expense: | |||
Stock-based compensation expense | $ 325,047,000 | $ 293,236,000 | $ 240,623,000 |
Stock-based compensation expense related to inventories | (585,000) | (2,406,000) | (689,000) |
Allocated stock-based compensation expense | 325,047,000 | $ 293,236,000 | $ 240,623,000 |
Stock Options | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Expected annual dividends | $ 0 | ||
Employee stock purchase plan | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Expected stock price volatility (percent) | 36.51% | 39.09% | 48.22% |
Risk-free interest rate (percent) | 2.36% | 1.24% | 0.56% |
Expected term of options (in years) | 9 months | 9 months | 9 months |
Expected annual dividends | $ 0 | $ 0 | $ 0 |
Weighted average fair value (usd per share) | $ 44.04 | $ 35.90 | $ 26.86 |
Tranche one | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Vesting rights percentage | 33.30% | ||
Tranche two | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Vesting rights percentage | 33.30% | ||
Tranche three | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Vesting rights percentage | 33.30% | ||
Performance-based RSUs | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Potential awards, percent of target shares, minimum | 0.00% | ||
Potential awards, percent of target shares, maximum | 200.00% | ||
Weighted average fair value (usd per share) | $ 152.40 | ||
Performance-based RSUs | Tranche one | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Vesting period | 3 years | ||
Performance-based RSUs | Tranche two | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Vesting period | 3 years | ||
Financial performance shares | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Vesting period | 3 years | ||
Non-financial performance shares | |||
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Vesting period | 3 years | ||
Stock options | |||
Stock-based compensation expense: | |||
Stock-based compensation expense | $ 107,854,000 | $ 105,367,000 | $ 114,768,000 |
Type of award: | |||
Unrecognized Expense | $ 155,465,000 | ||
Weighted-average Recognition Period | 2 years 7 months 21 days | ||
Weighted-average grant-date fair value, granted (usd per share) | $ 60.83 | $ 43.27 | $ 37.93 |
Weighted-average assumptions for options and ESPP subscriptions granted | |||
Expected stock price volatility (percent) | 40.50% | 45.31% | 46.77% |
Risk-free interest rate (percent) | 2.61% | 1.94% | 1.32% |
Expected term of options (in years) | 4 years 6 months 18 days | 4 years 8 months 5 days | 4 years 10 months 28 days |
Expected annual dividends | $ 0 | $ 0 | $ 0 |
Restricted stock and restricted stock units (including PSUs) | |||
Stock-based compensation expense: | |||
Stock-based compensation expense | 207,845,000 | 181,258,000 | 118,709,000 |
Type of award: | |||
Unrecognized Expense | $ 321,683,000 | ||
Weighted-average Recognition Period | 2 years 6 months 29 days | ||
ESPP share issuances | |||
Stock-based compensation expense: | |||
Stock-based compensation expense | $ 9,933,000 | 9,017,000 | 7,835,000 |
Type of award: | |||
Unrecognized Expense | $ 5,132,000 | ||
Weighted-average Recognition Period | 6 months 29 days | ||
Cost of sales | |||
Stock-based compensation expense: | |||
Stock-based compensation expense | $ 4,543,000 | 2,500,000 | 2,918,000 |
Research and development expenses | |||
Stock-based compensation expense: | |||
Stock-based compensation expense | 203,112,000 | 181,900,000 | 153,451,000 |
Sales, general and administrative expenses | |||
Stock-based compensation expense: | |||
Stock-based compensation expense | $ 117,392,000 | $ 108,836,000 | $ 84,254,000 |
Income Taxes - Components of In
Income Taxes - Components of Income and Provision for (Benefit from) Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components of income (loss) before provision for (benefit from) income taxes | |||||||||||
United States | $ 812,086 | $ 330,340 | $ (147,860) | ||||||||
Foreign | (211,845) | (346,029) | 80,494 | ||||||||
Income (loss) before (benefit from) provision for income taxes | $ 32,497 | $ 136,511 | $ 216,591 | $ 214,642 | $ 112,442 | $ (417,170) | $ 35,506 | $ 253,533 | 600,241 | (15,689) | (67,366) |
Current taxes: | |||||||||||
United States | 772 | 11,559 | (3,821) | ||||||||
Foreign | 15,600 | 3,576 | 1,794 | ||||||||
State | 9,018 | 5,025 | 1,836 | ||||||||
Total current taxes | 25,390 | 20,160 | (191) | ||||||||
Deferred taxes: | |||||||||||
United States | (1,105,053) | (113,805) | 18,659 | ||||||||
Foreign | (364,919) | (3,222) | (3,359) | ||||||||
State | (42,280) | (10,457) | 1,556 | ||||||||
Total deferred taxes | (1,512,252) | (127,484) | 16,856 | ||||||||
(Benefit from) provision for income taxes | $ (1,492,599) | $ 8,055 | $ 10,341 | $ (12,659) | $ 10,257 | $ (125,903) | $ 4,337 | $ 3,985 | $ (1,486,862) | $ (107,324) | $ 16,665 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Tax Carryforwards | ||||||||||||
Income tax (benefit) resulting in the release of valuation allowance | $ (1,560,000,000) | |||||||||||
(Benefit from) provision for income taxes | (1,492,599,000) | $ 8,055,000 | $ 10,341,000 | $ (12,659,000) | $ 10,257,000 | $ (125,903,000) | $ 4,337,000 | $ 3,985,000 | $ (1,486,862,000) | $ (107,324,000) | $ 16,665,000 | |
Increase (decrease) in valuation allowance | (178,200,000) | 14,800,000 | ||||||||||
Deferred tax liabilities recognized in other liabilities, excluding current portion | 0 | 6,341,000 | 0 | 6,341,000 | ||||||||
Operating loss carryforwards | 2,900,000,000 | 775,500,000 | 2,900,000,000 | 775,500,000 | ||||||||
Tax credit carryforwards | 350,700,000 | 134,900,000 | 350,700,000 | 134,900,000 | ||||||||
Valuation allowance | 168,491,000 | 1,552,942,000 | 168,491,000 | 1,552,942,000 | ||||||||
Unrecognized tax benefits | 19,549,000 | 3,814,000 | 19,549,000 | 3,814,000 | 0 | $ 425,000 | ||||||
Income tax penalties and interest accrued | 0 | 0 | ||||||||||
Variable Interest Entity, Primary Beneficiary | ||||||||||||
Tax Carryforwards | ||||||||||||
(Benefit from) provision for income taxes | (3,668,000) | (114,090,000) | $ 16,743,000 | |||||||||
Deferred tax liabilities recognized in other liabilities, excluding current portion | $ 4,756,000 | $ 4,756,000 | ||||||||||
Domestic and Foreign Tax Authority | ||||||||||||
Tax Carryforwards | ||||||||||||
Valuation allowance | 168,500,000 | 168,500,000 | ||||||||||
Foreign Tax Authority | ||||||||||||
Tax Carryforwards | ||||||||||||
Operating loss carryforwards | 942,000,000 | 942,000,000 | ||||||||||
Operating loss carryforwards, subject to expiration | 7,600,000 | 7,600,000 | ||||||||||
Operating loss carryforwards, not subject to expiration | 934,400,000 | 934,400,000 | ||||||||||
Deferred Tax Assets | ||||||||||||
Tax Carryforwards | ||||||||||||
Unrecognized tax benefits | 7,600,000 | 7,600,000 | ||||||||||
Accrued Expenses | ||||||||||||
Tax Carryforwards | ||||||||||||
Unrecognized tax benefits | $ 11,900,000 | $ 11,900,000 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Income Tax Expense: | |||||||||||
Income (loss) before (benefit from) provision for income taxes | $ 32,497 | $ 136,511 | $ 216,591 | $ 214,642 | $ 112,442 | $ (417,170) | $ 35,506 | $ 253,533 | $ 600,241 | $ (15,689) | $ (67,366) |
Expected provision for (benefit from) income taxes | 126,051 | (5,491) | (23,578) | ||||||||
State taxes, net of federal benefit | 8,680 | 4,742 | 3,621 | ||||||||
Foreign income tax rate differential | 23,427 | 77,801 | 21,346 | ||||||||
Tax credits | (52,629) | (58,204) | (47,773) | ||||||||
(Benefit from) provision for income taxes attributable to valuation allowances | (1,563,169) | (575,801) | 14,837 | ||||||||
Permanent items | 1,421 | 15,324 | 24,663 | ||||||||
Rate change | 0 | 575,192 | 12,836 | ||||||||
Stock compensation (benefit) shortfalls and cancellations | (49,044) | (21,453) | 4,162 | ||||||||
Officer’s compensation | 8,310 | 6,501 | 86 | ||||||||
Tax attribute expiration | 0 | 0 | 9,947 | ||||||||
Deconsolidation of VIE | (9,390) | (126,183) | 0 | ||||||||
Uncertain tax positions | 15,431 | 0 | 0 | ||||||||
Other | 4,050 | 248 | (3,482) | ||||||||
(Benefit from) provision for income taxes | $ (1,492,599) | $ 8,055 | $ 10,341 | $ (12,659) | $ 10,257 | $ (125,903) | $ 4,337 | $ 3,985 | $ (1,486,862) | $ (107,324) | $ 16,665 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss | $ 882,014 | $ 1,004,404 |
Tax credit carryforwards | 487,635 | 440,429 |
Intangible assets | 241,775 | 54,091 |
Deferred revenues | 19,311 | 19,593 |
Stock-based compensation | 93,915 | 83,196 |
Accrued expenses | 17,795 | 17,808 |
Construction financing lease obligation | 130,849 | 109,354 |
Other | 6,831 | 5,667 |
Gross deferred tax assets | 1,880,125 | 1,734,542 |
Valuation allowance | (168,491) | (1,552,942) |
Total deferred tax assets | 1,711,634 | 181,600 |
Deferred tax liabilities: | ||
Property and equipment | (128,407) | (101,019) |
Acquired intangibles | 0 | (6,341) |
Deferred revenue | (73,357) | (73,357) |
Unrealized gain | (10,198) | (6,401) |
Net deferred tax assets | $ 1,499,672 | 834 |
Net deferred tax liabilities | $ (5,518) |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Balance at beginning of the period | $ 3,814 | $ 0 | $ 425 |
Increases related to current period tax positions | 9,704 | 3,814 | 0 |
Increases related to prior period tax positions | 6,031 | 0 | 0 |
Decrease due to statute limitations | 0 | 0 | (425) |
Balance at end of period | $ 19,549 | $ 3,814 | $ 0 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Retirement Benefits [Abstract] | |||
Maximum percentage of annual compensation contributed by the participant (percent) | 60.00% | ||
Company contribution | $ 13.9 | $ 12.3 | $ 11.8 |
Commitments and Contingencies -
Commitments and Contingencies - Lease Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Future minimum commitments under facility leases commitments with terms of more than one year | |||
2,019 | $ 85,071 | ||
2,020 | 95,986 | ||
2,021 | 94,245 | ||
2,022 | 93,761 | ||
2,023 | 94,071 | ||
Thereafter | 575,191 | ||
Total minimum lease payments | 1,038,325 | ||
Sublease income 2018 | 6,200 | ||
Rental expense | 17,300 | $ 19,200 | $ 19,100 |
Fan Pier Leases | |||
Future minimum commitments under facility leases commitments with terms of more than one year | |||
2,019 | 66,540 | ||
2,020 | 72,589 | ||
2,021 | 72,589 | ||
2,022 | 72,589 | ||
2,023 | 72,589 | ||
Thereafter | 389,855 | ||
Total minimum lease payments | 746,751 | ||
San Diego Lease | |||
Future minimum commitments under facility leases commitments with terms of more than one year | |||
2,019 | 5,324 | ||
2,020 | 9,127 | ||
2,021 | 9,127 | ||
2,022 | 9,127 | ||
2,023 | 9,530 | ||
Thereafter | 119,864 | ||
Total minimum lease payments | 162,099 | ||
Other Leases | |||
Future minimum commitments under facility leases commitments with terms of more than one year | |||
2,019 | 13,207 | ||
2,020 | 14,270 | ||
2,021 | 12,529 | ||
2,022 | 12,045 | ||
2,023 | 11,952 | ||
Thereafter | 65,472 | ||
Total minimum lease payments | $ 129,475 |
Commitments and Contingencies_2
Commitments and Contingencies - Capital Lease Financing Obligations (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Capital Leases, Future Minimum Payments Due [Abstract] | |
2,019 | $ 10,770 |
2,020 | 7,282 |
2,021 | 5,649 |
2,022 | 3,300 |
2,023 | 1,974 |
Thereafter | 3,085 |
Total payments | 32,060 |
Less: amount representing interest | (2,585) |
Present value of payments | $ 29,475 |
Minimum | |
Capital Leased Assets | |
Effective interest rate (less than for minimum) | 1.00% |
Maximum | |
Capital Leased Assets | |
Effective interest rate (less than for minimum) | 6.00% |
Commitments and Contingencies_3
Commitments and Contingencies - Contingencies (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies Disclosure [Abstract] | ||
Indemnification claims | $ 0 | |
Contingent liabilities | $ 0 | $ 0 |
Segment Information - Revenues
Segment Information - Revenues by Product (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of operating segments | segment | 1 | ||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Product revenues, net | $ 870,106 | $ 784,535 | $ 752,157 | $ 640,799 | $ 651,634 | $ 578,165 | $ 544,135 | $ 714,718 | $ 3,047,597 | $ 2,488,652 | $ 1,702,177 |
SYMDEKO/SYMKEVI | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Product revenues, net | 768,657 | 0 | 0 | ||||||||
ORKAMBI | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Product revenues, net | 1,262,166 | 1,320,850 | 979,590 | ||||||||
KALYDECO | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Product revenues, net | 1,007,502 | 844,630 | 703,432 | ||||||||
Other | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Product revenues, net | 0 | 0 | 610 | ||||||||
Product | |||||||||||
Revenue from External Customer [Line Items] | |||||||||||
Product revenues, net | $ 868,173 | $ 782,511 | $ 749,912 | $ 637,729 | $ 621,228 | $ 549,642 | $ 513,988 | $ 480,622 | $ 3,038,325 | $ 2,165,480 | $ 1,683,632 |
Segment Information - Revenue b
Segment Information - Revenue by Geographic Location (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 870,106 | $ 784,535 | $ 752,157 | $ 640,799 | $ 651,634 | $ 578,165 | $ 544,135 | $ 714,718 | $ 3,047,597 | $ 2,488,652 | $ 1,702,177 |
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 2,365,079 | 1,986,786 | 1,321,807 | ||||||||
Europe | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 543,179 | 420,317 | 320,456 | ||||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | 139,339 | 81,549 | 59,914 | ||||||||
Total revenues outside of the United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Revenues | $ 682,518 | $ 501,866 | $ 380,370 |
Segment Information - Significa
Segment Information - Significant Customers (Details) - Credit Concentration Risk | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues, Net | Walgreen Co. | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (less than for CVS/Caremark 2017 revenue) | 20.00% | 17.00% | 19.00% |
Revenues, Net | Accredo/Curascript | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (less than for CVS/Caremark 2017 revenue) | 14.00% | 14.00% | 15.00% |
Revenues, Net | McKesson Corporation | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (less than for CVS/Caremark 2017 revenue) | 14.00% | 10.00% | 10.00% |
Revenues, Net | CVS/Caremark | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (less than for CVS/Caremark 2017 revenue) | 10.00% | 19.00% | |
Accounts Receivable | Walgreen Co. | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (less than for CVS/Caremark 2017 revenue) | 16.00% | 20.00% | |
Accounts Receivable | Accredo/Curascript | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (less than for CVS/Caremark 2017 revenue) | 10.00% | 12.00% | |
Accounts Receivable | McKesson Corporation | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage (less than for CVS/Caremark 2017 revenue) | 16.00% | 10.00% |
Segment Information - Property
Segment Information - Property and Equipment, Net by Location (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 812,005 | $ 789,437 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 778,157 | 753,128 |
United Kingdom | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 30,496 | 31,279 |
Other | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | 3,352 | 5,030 |
Total revenues outside of the United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property and equipment, net | $ 33,848 | $ 36,309 |
Quarterly Financial Data (una_3
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues: | |||||||||||
Product revenues, net | $ 870,106 | $ 784,535 | $ 752,157 | $ 640,799 | $ 651,634 | $ 578,165 | $ 544,135 | $ 714,718 | $ 3,047,597 | $ 2,488,652 | $ 1,702,177 |
Costs and expenses: | |||||||||||
Cost of sales | 122,289 | 111,255 | 104,382 | 71,613 | 84,052 | 72,874 | 71,205 | 46,988 | 409,539 | 275,119 | 210,460 |
Research and development expenses | 437,881 | 330,510 | 337,532 | 310,553 | 306,664 | 454,947 | 289,451 | 273,563 | 1,416,476 | 1,324,625 | 1,047,690 |
Sales, general and administrative expenses | 153,210 | 137,295 | 137,303 | 129,808 | 134,794 | 120,710 | 127,249 | 113,326 | 557,616 | 496,079 | 432,829 |
Restructuring (income) expenses | 4 | (174) | 62 | (76) | 387 | 337 | 3,523 | 9,999 | (184) | 14,246 | 1,262 |
Intangible asset impairment charges | 29,000 | 0 | 0 | 0 | 0 | 255,340 | 0 | 0 | 29,000 | 255,340 | 0 |
Total costs and expenses | 742,384 | 578,886 | 579,279 | 511,898 | 525,897 | 904,208 | 491,428 | 443,876 | 2,412,447 | 2,365,409 | 1,692,241 |
Income from operations | 127,722 | 205,649 | 172,878 | 128,901 | 125,737 | (326,043) | 52,707 | 270,842 | 635,150 | 123,243 | 9,936 |
Interest expense, net | (4,773) | (8,143) | (10,106) | (11,097) | (12,547) | (13,574) | (14,664) | (16,765) | (34,119) | (57,550) | (81,432) |
Other (expense) income, net | (90,452) | (60,995) | 53,819 | 96,838 | (748) | (77,553) | (2,537) | (544) | (790) | (81,382) | 4,130 |
Income (loss) before (benefit from) provision for income taxes | 32,497 | 136,511 | 216,591 | 214,642 | 112,442 | (417,170) | 35,506 | 253,533 | 600,241 | (15,689) | (67,366) |
Provision for (benefit from) income taxes | (1,492,599) | 8,055 | 10,341 | (12,659) | 10,257 | (125,903) | 4,337 | 3,985 | (1,486,862) | (107,324) | 16,665 |
Net income (loss) | 1,525,096 | 128,456 | 206,250 | 227,301 | 102,185 | (291,267) | 31,169 | 249,548 | 2,087,103 | 91,635 | (84,031) |
Loss (income) attributable to noncontrolling interest | 25,431 | 290 | 1,110 | (17,038) | (1,501) | 188,315 | (13,173) | (1,792) | 9,793 | 171,849 | (28,021) |
Net income (loss) attributable to Vertex common shareholders | $ 1,550,527 | $ 128,746 | $ 207,360 | $ 210,263 | $ 100,684 | $ (102,952) | $ 17,996 | $ 247,756 | $ 2,096,896 | $ 263,484 | $ (112,052) |
Net income: | |||||||||||
Basic (usd per share) | $ 6.08 | $ 0.51 | $ 0.82 | $ 0.83 | $ 0.40 | $ (0.41) | $ 0.07 | $ 1.01 | $ 8.24 | $ 1.06 | $ (0.46) |
Diluted (usd per share) | $ 5.97 | $ 0.50 | $ 0.80 | $ 0.81 | $ 0.39 | $ (0.41) | $ 0.07 | $ 0.99 | $ 8.09 | $ 1.04 | $ (0.46) |
Shares used in per share calculations: | |||||||||||
Basic (in shares) | 254,868 | 254,905 | 254,135 | 253,231 | 251,557 | 250,268 | 247,521 | 246,024 | 254,292 | 248,858 | 244,685 |
Diluted (in shares) | 259,812 | 259,788 | 258,584 | 258,526 | 256,804 | 250,268 | 251,635 | 248,700 | 259,185 | 253,225 | 244,685 |
Product revenues, net | |||||||||||
Revenues: | |||||||||||
Product revenues, net | $ 868,173 | $ 782,511 | $ 749,912 | $ 637,729 | $ 621,228 | $ 549,642 | $ 513,988 | $ 480,622 | $ 3,038,325 | $ 2,165,480 | $ 1,683,632 |
Collaborative and royalty revenues | |||||||||||
Revenues: | |||||||||||
Product revenues, net | $ 1,933 | $ 2,024 | $ 2,245 | $ 3,070 | $ 30,406 | $ 28,523 | $ 30,147 | $ 234,096 | $ 9,272 | $ 323,172 | $ 18,545 |
Quarterly Financial Data (una_4
Quarterly Financial Data (unaudited) Quarterly Financial Data (unaudited) Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||
Dec. 31, 2018 | Jul. 30, 2017 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||||
Intangible asset impairment charges | $ 29,000,000 | $ 0 | $ 0 | $ 0 | $ 0 | $ 255,340,000 | $ 0 | $ 0 | $ 29,000,000 | $ 255,340,000 | $ 0 | ||||
Income tax (benefit) resulting in the release of valuation allowance | (1,560,000,000) | ||||||||||||||
Provision for (benefit from) income taxes | $ (1,492,599,000) | $ 8,055,000 | $ 10,341,000 | (12,659,000) | 10,257,000 | (125,903,000) | 4,337,000 | 3,985,000 | (1,486,862,000) | (107,324,000) | 16,665,000 | ||||
Merck KGaA and Arbor | |||||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||||
Collaborative arrangement, development and commercialization rights potential maximum milestone payments | 95,000,000 | ||||||||||||||
BioAxone Biosciences, Inc | |||||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||||
Up-front payment | $ 10,000,000 | 10,000,000 | $ 10,000,000 | ||||||||||||
Merck KGaA | |||||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||||
Up-front payment | $ 65,000,000 | $ 230,000,000 | |||||||||||||
Parion Sciences, Inc | |||||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||||
Up-front payment | 85,000,000 | $ 85,000,000 | |||||||||||||
Collaborative revenues | 20,000,000 | $ 20,000,000 | |||||||||||||
Intangible asset impairment charges | 255,300,000 | ||||||||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | (69,600,000) | ||||||||||||||
Provision for (benefit from) income taxes | (126,200,000) | ||||||||||||||
Janssen | |||||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||||
Up-front payment | $ 35,000,000 | ||||||||||||||
Collaborative revenues | $ 25,000,000 | ||||||||||||||
Concert Pharmaceuticals | |||||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||||
Collaborative arrangement, development and commercialization rights potential maximum milestone payments | $ 160,000,000 | 160,000,000 | |||||||||||||
Variable Interest Entity, Primary Beneficiary | |||||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | 17,730,000 | (62,560,000) | 54,850,000 | ||||||||||||
Provision for (benefit from) income taxes | (3,668,000) | (114,090,000) | 16,743,000 | ||||||||||||
Variable Interest Entity, Primary Beneficiary | BioAxone Biosciences, Inc | |||||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | 900,000 | (9,950,000) | |||||||||||||
Variable Interest Entity, Primary Beneficiary | Parion Sciences, Inc | |||||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||||
Collaborative revenues | 40,000,000 | ||||||||||||||
Business combination, contingent consideration arrangements, change in amount of contingent consideration, liability | 0 | (63,460,000) | $ 64,800,000 | ||||||||||||
Provision for (benefit from) income taxes | 14,800,000 | ||||||||||||||
Other Intangible Assets | Variable Interest Entity, Primary Beneficiary | BioAxone Biosciences, Inc | |||||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||||
Intangible asset impairment charges | 29,000,000 | ||||||||||||||
Provision for (benefit from) income taxes | $ (7,900,000) | ||||||||||||||
Other Intangible Assets | Variable Interest Entity, Primary Beneficiary | Parion Sciences, Inc | |||||||||||||||
Schedule of Collaborative Arrangement Agreements [Line Items] | |||||||||||||||
Intangible asset impairment charges | $ 255,300,000 | 255,300,000 | |||||||||||||
Provision for (benefit from) income taxes | $ (97,700,000) |