View Filing Data

Document and Entity Information - shares	3 Months Ended
Mar. 31, 2012	Apr. 25, 2012
Document and Entity Information
Entity Registrant Name	THERAVANCE INC
Entity Central Index Key	0001080014
Document Type	10-Q
Document Period End Date	Mar. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		86,542,315
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 14,310	$ 44,778
Marketable securities	185,854	196,137
Receivable from related party	63	223
Notes receivable, current	200	100
Prepaid and other current assets	3,900	3,525
Total current assets	204,327	244,763
Restricted cash	893	893
Property and equipment, net	10,059	10,372
Notes receivable, non-current	140	240
Other assets, non-current	2,308	2,514
Total assets	217,727	258,782
Current liabilities:
Accounts payable	5,308	5,813
Accrued personnel related expenses	4,884	9,643
Accrued clinical and development expenses	6,547	6,956
Accrued interest on convertible subordinated notes	1,078	2,372
Other accrued liabilities	1,974	1,946
Note payable and capital lease, current	13	69
Deferred revenue, current	5,771	18,697
Total current liabilities	25,575	45,496
Convertible subordinated notes	172,500	172,500
Deferred rent	5,678	5,821
Deferred revenue, non-current	7,843	122,017
Commitments and contingencies (Notes 3 and 7)
Stockholders' equity (net capital deficiency):
Common stock, $0.01 par value; authorized: 200,000 shares; outstanding: 86,470 at March 31, 2012 and 85,543 at December 31, 2011	865	855
Additional paid-in capital	1,236,641	1,228,037
Accumulated other comprehensive income (loss)	(9)	16
Accumulated deficit	(1,231,366)	(1,315,960)
Total stockholders' equity (net capital deficiency)	6,131	(87,052)
Total liabilities and stockholders' equity (net capital deficiency)	$ 217,727	$ 258,782

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Revenue (including amounts from a related party of $1,430 in the three months ended March 31, 2012, and $2,456 in the three months ended March 31, 2011)	$ 127,099	$ 6,331
Operating expenses:
Research and development	33,202	20,464
General and administrative	7,857	7,169
Total operating expenses	41,059	27,633
Income (loss) from operations	86,040	(21,302)
Interest income	56	145
Interest expense	(1,502)	(1,510)
Net income (loss)	$ 84,594	$ (22,667)
Net income (loss) per share:
Basic (in dollars per share)	$ 1.01	$ (0.28)
Diluted (in dollars per share)	$ 0.93	$ (0.28)
Weighted-average number of shares used in per share calculations:
Basic (in shares)	83,590	80,854
Diluted (in shares)	92,080	80,854

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Net income (loss)	$ 84,594	$ (22,667)
Other comprehensive income:
Net unrealized loss on available-for-sale securities, net of tax	(25)	(5)
Comprehensive income (loss)	$ 84,569	$ (22,672)

- Definition

The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the reporting entity. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, but excludes any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent.

+ References

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+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

- Definition

Appreciation or loss in value (before reclassification adjustment) of the total of unsold securities during the period being reported on, net of tax. Reclassification adjustments include: (1) the unrealized holding gain (loss), net of tax, at the date of the transfer for a debt security from the held-to-maturity category transferred into the available-for-sale category. Also includes the unrealized gain (loss) at the date of transfer for a debt security from the available-for-sale category transferred into the held-to-maturity category; (2) the unrealized gains (losses) realized upon the sale of securities, after tax; and (3) the unrealized gains (losses) realized upon the write-down of securities, after tax.

+ References

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flows from operating activities
Net income (loss)	$ 84,594	$ (22,667)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	1,910	1,650
Stock-based compensation	6,235	5,541
Forgiveness of notes receivable		1
Changes in operating assets and liabilities:
Receivables	160	268
Prepaid expenses and other current assets	(375)	73
Accounts payable	48	198
Accrued personnel-related expenses, accrued interest on convertible subordinated notes and other current liabilities	(6,657)	(6,031)
Deferred rent	(143)	776
Deferred revenue	(127,100)	(5,700)
Net cash used in operating activities	(41,328)	(25,891)
Cash flows from investing activities
Purchases of property and equipment	(1,103)	(1,381)
Purchases of marketable securities	(35,671)	(76,408)
Sales of marketable securities		5,000
Maturities of marketable securities	45,158	71,250
Payments received on notes receivable		300
Net cash provided by (used in) investing activities	8,384	(1,239)
Cash flows from financing activities
Payments on note payable and capital lease	(56)	(62)
Proceeds from issuances of common stock, net	2,532	11,733
Net cash provided by financing activities	2,476	11,671
Net decrease in cash and cash equivalents	(30,468)	(15,459)
Cash and cash equivalents at beginning of period	44,778	163,333
Cash and cash equivalents at end of period	$ 14,310	$ 147,874

Description of Operations and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2012

Description of Operations and Summary of Significant Accounting Policies

Description of Operations and Summary of Significant Accounting Policies

1. Description of Operations and Summary of Significant Accounting Policies

Description of Operations

Theravance, Inc. (the Company or Theravance) is a biopharmaceutical company with a pipeline of internally discovered product candidates and strategic collaborations with pharmaceutical companies. Theravance is focused on the discovery, development and commercialization of small molecule medicines across a number of therapeutic areas including respiratory disease, bacterial infections, and central nervous system (CNS)/pain. By leveraging the Company’s proprietary insight of multivalency to drug discovery, Theravance is pursuing a best-in-class strategy designed to discover superior medicines in areas of significant unmet medical need.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements have been prepared on the same basis as audited consolidated financial statements and include all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position, results of operations, comprehensive income (loss) and cash flows. The interim results are not necessarily indicative of the results of operations to be expected for the year ending December 31, 2012 or any other period.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the Securities and Exchange Commission (SEC) on February 27, 2012.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Management’s Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates.

Segment Reporting

The Company has determined that it operates in a single segment which is the research and development of human therapeutics. Revenues are generated primarily from the Company’s collaborations with GlaxoSmithKline plc (GSK), located in the United Kingdom and, through January 6, 2012, Astellas Pharma Inc. (Astellas), located in Japan. All long-lived assets are maintained in the United States.

Marketable Securities

The Company determines the appropriate classification of its marketable securities, which consist of debt securities, at the time of purchase and reevaluates such designation at each balance sheet date. All of the marketable securities are classified as available-for-sale and carried at estimated fair values and reported in either cash equivalents or marketable securities. Unrealized gains and losses on available-for-sale securities are reported in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity (net capital deficiency). Interest, amortization of purchase premiums and discounts, and realized gains and losses on sales of securities are included in interest. The cost of securities sold is based on the specific identification method.

The Company regularly reviews all of its investments for other-than-temporary declines in fair value. The Company’s review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not that the Company will be required to sell the securities before the recovery of their amortized cost basis. When the Company determines that the decline in fair value of an investment is below the amortized cost basis and the decline is other-than-temporary, the Company reduces the carrying value of the security and records a loss for the amount of such decline.

Research and Development Costs

Research and development costs are expensed in the period that services are rendered or goods are received. Research and development costs consist of salaries and benefits, laboratory supplies and facility costs, as well as fees paid to third parties that conduct certain research and development activities on behalf of the Company, net of certain external research costs reimbursed by GSK and, through 2011, Astellas.

Fair Value of Stock-Based Compensation Awards

Stock-based compensation arrangements currently include the following awards granted under the 2004 Equity Incentive Plan (2004 Plan) and the 2008 New Employee Equity Incentive Plan (2008 Plan): stock options, restricted stock unit awards (RSUs), performance-contingent RSUs, restricted stock awards (RSAs), and performance-contingent RSAs. In addition, stock-based compensation arrangements include purchases of common stock by the Company’s employees at a discount to the market price during offering periods under the Company’s Employee Stock Purchase Plan (ESPP). Under the 2004 Plan and 2008 Plan, stock options are to be granted at an exercise price not less than the fair market value per share on the grant date for incentive options and are generally granted with terms of up to ten years and vest over a period of four years. Following the approval by stockholders of the amendment and restatement of the 2004 Plan on April 27, 2010, no additional awards have been made or will be made in the future under the 2008 Plan.

The Company uses the Black Scholes option pricing model to estimate the fair value of options granted under its equity incentive plans and rights to acquire stock granted under its employee stock purchase plan. The Black Scholes option valuation model requires the use of assumptions, including the expected term of the award and the expected stock price volatility. The Company used the “simplified” method as described in Staff Accounting Bulletin No. 107 for the expected option term because the usage of its historical exercise data is limited due to post-IPO exercise restrictions. Beginning April 1, 2011, the Company used its historical volatility to estimate expected stock price volatility. Prior to April 1, 2011, the Company used peer company price volatility to estimate expected stock price volatility due to the Company’s limited historical common stock price volatility since its initial public offering in 2004. RSUs and RSAs are measured based on the fair market values of the underlying stock on the dates of grant.

Stock-based compensation expense was calculated based on awards ultimately expected to vest and has been reduced for estimated forfeitures at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company’s estimated annual forfeiture rates for stock options, RSUs and RSAs are based on its historical forfeiture experience.

The estimated fair value of stock options, RSUs and RSAs is expensed on a straight-line basis over the expected term of the grant and the fair value of performance-contingent RSUs and RSAs is expensed during the term of the award when the Company determines that it is probable that certain performance milestones will be achieved. Compensation expense for purchases under the ESPP is recognized based on the estimated fair value of the common stock during each offering period and purchase discount percentage.

The Company has not recognized, and does not expect to recognize in the near future, any tax benefit related to employee stock-based compensation costs as a result of the full valuation allowance on the Company’s deferred tax assets including deferred tax assets related to its net operating loss carryforwards.

Recently Adopted Accounting Updates

On January 1, 2012, the Company adopted Accounting Standards Update (ASU) No. 2011-05, “Presentation of Comprehensive Income” an update to Accounting Standards Codification (ASC) Topic 220, “Comprehensive Income”. This update requires that all nonowner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This update is to be applied retrospectively and is effective for financial statements issued for fiscal years, and interim periods within those years, beginning after December 15, 2011, and interim and annual periods thereafter. This update was effective for the Company January 1, 2012. The Company elected the two separate but consecutive statements approach.

- Definition

The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

+ References + Details

Net Income (Loss) per Share

3 Months Ended

Mar. 31, 2012

Net Income (Loss) per Share

Net Income (Loss) per Share

2. Net Income (Loss) per Share

Basic net income (loss) per share amounts for each period presented were computed by dividing net income (loss) by the weighted-average number of shares of common stock outstanding, less RSAs subject to forfeiture.

For the three months ended March 31, 2012, diluted net income per share was computed by dividing net income plus interest on dilutive convertible notes by the weighted-average number of shares of common stock outstanding during each period, less RSAs subject to forfeiture, plus all additional common shares that would have been outstanding assuming dilutive potential common shares had been issued for dilutive convertible notes (see Note 6) and other dilutive securities.

Dilutive potential common shares for dilutive convertible notes were calculated based on the “if-converted” method. Under the “if-converted” method, when computing the dilutive effect of convertible notes, net income was adjusted to add back the amount of interest and debt issuance costs recognized in the period and the denominator was adjusted to add back the number of shares that would be issued if the entire obligation was settled in shares.

Dilutive potential common shares also include the dilutive effect of the common stock underlying in-the-money stock options and were calculated based on the average share price for each period using the treasury stock method. Under the treasury stock method, the exercise price of an option and the average amount of compensation cost, if any, for future service that the Company has not yet recognized when the option is exercised, are assumed to be used to repurchase shares in the current period. Dilutive potential common shares also reflect the dilutive effect of unvested restricted stock units.

For the three months ended March 31, 2011, diluted net loss per share was identical to basic EPS since potential common shares were excluded from the calculation, as their effect was anti-dilutive.

The computations for basic and diluted net income (loss) per share were as follows:

	Three Months Ended March 31,
(in thousands, except for per share amounts)	2012			2011
Numerator:
Net income (loss) — basic	$	84,594		$	(22,667	)
Add: interest and issuance costs related to convertible notes	1,500			—
Net income (loss) — diluted	86,094			(22,667		)

Denominator:
Weighted-average common shares outstanding	86,292			83,325
Less: unvested RSAs	(2,702		)	(2,471		)
Weighted-average common shares outstanding — basic	83,590			80,854
Dilutive effect of equity incentive plans and ESPP	1,822			—
Dilutive effect of convertible subordinated notes	6,668			—
Weighted-average common shares outstanding and dilutive potential common shares — diluted	92,080			80,854

Anti-dilutive securities

The following awards were not included in the computation of diluted net income (loss) per share because their effect was anti-dilutive:

	Three Months Ended March 31,
(in thousands)	2012	2011
Shares issuable under Equity Incentive Plans and ESPP	4,641	6,673
Shares issuable upon the conversion of convertible debt	—	6,668
Total anti-dilutive securities	4,641	13,341

Collaboration Arrangements

3 Months Ended

Mar. 31, 2012

Collaboration Arrangements

Collaboration Arrangements

3. Collaboration Arrangements

GSK

LABA collaboration

In November 2002, the Company entered into its long-acting beta2 agonist (LABA) collaboration with GSK to develop and commercialize once-daily LABA products for the treatment of chronic obstructive pulmonary disease (COPD) and asthma. For the treatment of COPD, the collaboration is developing combination products, RELOVAIR™ and the LAMA/LABA (GSK573719/vilanterol or ‘719/VI). For the treatment of asthma, the collaboration is developing RELOVAIR™. RELOVAIR™ is an investigational once-daily combination medicine consisting of a LABA, VI, previously referred to as GW642444 or ‘444, and an inhaled corticosteroid (ICS), fluticasone furoate (FF). The LAMA/LABA, ‘719/VI, is an investigational once-daily combination medicine consisting of the long-acting muscarinic antagonist (LAMA) ‘719, and the LABA, VI.

The current lead product candidates in the LABA collaboration, VI and FF, were discovered by GSK. In the event that VI is successfully developed and commercialized, the Company will be obligated to make milestone payments to GSK which could total as much as $220.0 million if both a single-agent and a combination product or two different combination products are launched in multiple regions of the world. If global regulatory authorities accept the applications for RELOVAIR™, which the Company anticipates will be filed by GSK beginning in mid-2012, a portion of these potential milestone payments could be payable to GSK within the next two years. The Company is entitled to annual royalties from GSK of 15% on the first $3.0 billion of annual global net sales and 5% for all annual global net sales above $3.0 billion. Sales of single-agent LABA medicines and combination medicines would be combined for the purposes of this royalty calculation. For other products combined with a LABA from the LABA collaboration, such as ‘719/VI, royalties are upward tiering and range from the mid-single digits to 10%. However, if GSK is not selling a LABA/ICS combination product at the time that the first other LABA combination is launched, then the royalties described above for the LABA/ICS combination medicine would be applicable.

2004 Strategic Alliance

In March 2004, the Company entered into its strategic alliance with GSK. Under this alliance, GSK received an option to license exclusive development and commercialization rights to product candidates from certain of the Company’s discovery programs on pre-determined terms and on an exclusive, worldwide basis.

Upon GSK’s decision to license a program, GSK is responsible for funding all future development, manufacturing and commercialization activities for product candidates in that program. In addition, GSK is obligated to use diligent efforts to develop and commercialize product candidates from any program that it licenses. If the program is successfully advanced through development by GSK, the Company is entitled to receive clinical, regulatory and commercial milestone payments and royalties on any sales of medicines developed from the program. If GSK chooses not to license a program, the Company retains all rights to the program and may continue the program alone or with a third party.

In 2005, GSK licensed the Company’s bifunctional muscarinic antagonist-beta2 agonist (MABA) program for the treatment of COPD, and in October 2011, the Company and GSK expanded the MABA program by adding six additional Theravance discovered preclinical MABA compounds (the “Additional MABAs”). GSK’s development, commercialization, milestone and royalty obligations under the strategic alliance remain the same with respect to ‘081, the lead compound in the MABA program. GSK is obligated to use diligent efforts to develop and commercialize at least one MABA within the MABA program, but may terminate progression of any or all Additional MABAs at any time and return them to the Company, at which point the Company may develop and commercialize such Additional MABAs alone or with a third party. Both GSK and the Company have agreed not to conduct any MABA clinical studies outside of the strategic alliance so long as GSK is in possession of the Additional MABAs. If a single-agent MABA medicine containing ‘081 is successfully developed and commercialized, the Company is entitled to receive royalties from GSK of between 10% and 20% of annual global net sales up to $3.5 billion, and 7.5% for all annual global net sales above $3.5 billion. If a MABA medicine containing ‘081 is commercialized only as a combination product, such as a MABA/ICS, the royalty rate is 70% of the rate applicable to sales of the single-agent MABA medicine. For single-agent MABA medicines containing an Additional MABA, the Company is entitled to receive royalties from GSK of between 10% and 15% of annual global net sales up to $3.5 billion, and 10% for all annual global net sales above $3.5 billion. For combination products containing an Additional MABA, such as a MABA/ICS, the royalty rate is 50% of the rate applicable to sales of the single-agent MABA medicine. If a MABA medicine containing ‘081 is successfully developed and commercialized in multiple regions of the world, the Company could earn total milestone payments up to $125.0 million for a single-agent medicine and up to $250.0 million for both a single-agent and a combination medicine. If a MABA medicine containing an Additional MABA is successfully developed and commercialized in multiple regions of the world, the Company could earn total milestone payments up to $129.0 million.

In connection with the expansion of the MABA program, GSK relinquished its option right on the Company’s MonoAmine Reuptake Inhibitor (MARIN) program and Angiotensin Receptor-NEP Inhibitor (ARNI) program. GSK has no further option rights on any of the Company’s research or development programs under the strategic alliance.

In May 2004, GlaxoSmithKline LLC, an affiliate of GSK, purchased 6,387,096 shares of the Company’s Class A common stock for an aggregate purchase price of $108.9 million and, upon the closing of the Company’s initial public offering on October 8, 2004, GlaxoSmithKline LLC purchased an additional 433,757 shares of Class A common stock for an aggregate purchase price of $6.9 million. In November 2010, Glaxo Group Limited, an affiliate of GSK, purchased 5,750,000 shares of the Company’s common stock for an aggregate purchase price of $129.4 million.

GSK Conversion of the Company’s Class A Common Stock and Purchases of Common Stock under the Company’s Governance Agreement with GSK

In July 2011, GSK converted all of the shares of the Company’s Class A common stock held by its affiliates into 9,401,499 shares of the Company’s common stock on a one share-for-one share basis in accordance with the terms of the Company’s restated certificate of incorporation. In addition, Glaxo Group Limited purchased shares of the Company’s common stock pursuant to its periodic “top-up” rights under the Company’s governance agreement with GSK dated June 4, 2004, as amended, as follows:

	Through March 31, 2012
	Common Stock Shares Purchased	Aggregate Amounts (in thousands)
Purchase dates
February 24, 2011	152,278	$	3,609
May 3, 2011	261,299	$	6,689
August 2, 2011	102,466	$	2,020
November 1, 2011	58,411	$	1,298
February 14, 2012	88,468	$	1,603

See Note 10 for subsequent event.

GSK Upfront License Fees, Milestone Payments and Revenue

Upfront license fees and milestone payments received from GSK under the LABA collaboration and strategic alliance agreements were as follows:

	Through March 31, 2012
(in thousands)	Upfront Fees		Milestone Payments		Total
GSK Collaborations
LABA/RELOVAIR™ collaboration(1)	$	10,000	$	50,000	$	60,000
Strategic alliance agreement	20,000		—		20,000
Strategic alliance—LAMA license(2)	5,000		3,000		8,000
Strategic alliance—MABA program license	6,000		16,000		22,000
Total	$	41,000	$	69,000	$	110,000

(1) The Company does not currently expect to be eligible for any additional milestones under this collaboration.

(2) In August 2004, GSK exercised its right to license the Company’s LAMA program pursuant to the terms of the strategic alliance. In 2009, GSK returned the program to the Company.

The eligible potential contingent payments related to the MABA program, which includes the Additional MABAs, are not deemed substantive due to the fact that the achievement of the event underlying the payment predominantly relates to GSK’s performance of future development, manufacturing and commercialization activities for product candidates after licensing the program.

Revenue recognized from GSK under the LABA collaboration and strategic alliance agreements was as follows:

	Three Months Ended March 31,
(in thousands)	2012		2011
GSK Collaborations
LABA/RELOVAIR™ collaboration	$	907	$	1,270
Strategic alliance agreement	—		684
Strategic alliance—MABA program license	523		502
Total	$	1,430	$	2,456

Astellas

License, Development and Commercialization Agreement with Astellas

In November 2005, the Company entered into a global collaboration arrangement with Astellas for the development and commercialization of VIBATIV®. On January 6, 2012, Astellas exercised its right to terminate this agreement. The rights previously granted to Astellas ceased upon termination of the agreement and Astellas stopped all promotional sales efforts. Pursuant to the terms of the agreement, Astellas is entitled to a ten-year, 2% royalty on future net sales of VIBATIV®. In March 2012, the Company entered into a series of agreements with Astellas for the purchase of VIBATIV® active pharmaceutical ingredient and raw materials of up to $6.2 million and VIBATIV® finished goods inventory of up to $4.2 million, which is subject to release by a third party manufacturer.

In addition, beginning July 1, 2012, the Company is responsible to fund governmental rebate and governmental chargeback claims for Astellas-labeled product sales. As a result of the termination agreement, the Company recorded a liability of $150,000 at March 31, 2012. The Company is evaluating global commercialization alternatives for VIBATIV® either with partners or alone.

Through January 6, 2012, the Company had received $191.0 million in upfront license, milestone and other fees from Astellas. The Company previously recorded these payments as deferred revenue and amortized them ratably over its estimated performance period (development and commercialization period). As a result of the termination of the collaboration agreement, the Company has no remaining performance obligations. Therefore the development and commercialization period ended on January 6, 2012. As such, the Company recognized into revenue $125.8 million of deferred revenue related to Astellas in the three months ended March 31, 2012, and it is no longer eligible to receive any further milestone payments.

Net revenue recognized under this collaboration agreement was as follows:

	Three Months Ended March 31,
(in thousands)	2012			2011
Recognition of deferred revenue	$	125,819		$	3,244
Royalties from net sales of VIBATIV®	—			631
Astellas-labeled product sales allowance	(150		)	—
Total net revenue	$	125,669		$	3,875

Marketable Securities

3 Months Ended

Mar. 31, 2012

Marketable Securities

Marketable Securities

4. Marketable Securities

Available-for-sale money market funds and debt securities were recorded in cash equivalents or marketable securities in the Company’s consolidated balance sheets at their estimated fair value based on prices obtained from commercial pricing services. The Company’s marketable securities were as follows:

	March 31, 2012										December 31, 2011
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value			Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government securities	$	61,028	$	5	$	(2	)	$	61,031		$	66,150		$	24	$	—		$	66,174
U.S. government agencies	82,942		2		(15		)	82,929			93,183			9		(17		)	93,175
U.S. corporate notes	550		—		—			550			2,707			—		(2		)	2,705
U.S. commercial paper	45,736		1		—			45,737			34,973			3		—			34,976
Money market funds	6,213		—		—			6,213			38,721			—		—			38,721
Total	196,469		8		(17		)	196,460			235,734			36		(19		)	235,751
Less amounts classified as cash equivalents	(9,713)		—		—			(9,713		)	(38,721		)	—		—			(38,721		)
Less amounts classified as restricted cash	(893)		—		—			(893		)	(893		)	—		—			(893		)
Amounts classified as marketable securities	$	185,863	$	8	$	(17	)	$	185,854		$	196,120		$	36	$	(19	)	$	196,137

At March 31, 2012, all of the marketable securities have contractual maturities within twelve months and the average duration of marketable securities was approximately five months. The Company does not intend to sell the investments which are in an unrealized loss position and it is unlikely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. The Company has determined that the gross unrealized losses on its marketable securities at March 31, 2012, were temporary in nature. All marketable securities with unrealized losses have been in a loss position for less than twelve months.

Fair Value Measurements

3 Months Ended

Mar. 31, 2012

Fair Value Measurements

Fair Value Measurements

5. Fair Value Measurements

The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

The Company’s valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect the Company’s market assumptions. The Company classifies these inputs into the following hierarchy:

Level 1 Inputs—Quoted prices for identical instruments in active markets.

Level 2 Inputs—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 Inputs—Unobservable inputs and little, if any, market activity for the assets.

The estimated fair values of the Company’s financial assets were as follows:

	Fair Value Measurements at Reporting Date Using
March 31, 2012	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Level 1		Level 2		Level 3		Total
U.S. government securities	$	25,998	$	35,033	$	—	$	61,031
U.S. government agency securities	34,441		48,488		—		82,929
U.S. corporate notes	—		550		—		550
U.S. commercial paper	—		45,737		—		45,737
Money market funds	6,213		—		—		6,213
Total	$	66,652	$	129,808	$	—	$	196,460

	Fair Value Measurements at Reporting Date Using
December 31, 2011	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Level 1		Level 2		Level 3		Total
U.S. government securities	$	66,174	$	—	$	—	$	66,174
U.S. government agency securities	55,901		37,274		—		93,175
U.S. corporate notes	2,705		—		—		2,705
U.S. commercial paper	—		34,976		—		34,976
Money market funds	38,721		—		—		38,721
Total	$	163,501	$	72,250	$	—	$	235,751

At March 31, 2012, securities with a total fair value of $19.6 million were measured using Level 1 inputs in comparison to December 31, 2011, at which time the securities had a fair value of $19.7 million and were measured using Level 2 inputs. The transfer to Level 1 from Level 2 was primarily the result of increased trading volume of the securities at and around March 31, 2012, compared to December 31, 2011.

At March 31, 2012, securities with a total fair value of $56.2 million were measured using Level 2 inputs in comparison to December 31, 2011, at which time the securities had a fair value of $56.5 million and were measured using Level 1 inputs. The transfer to Level 2 from Level 1 was primarily the result of decreased trading volume of the securities at and around March 31, 2012, compared to December 31, 2011.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
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-Paragraph 32, 33, 34
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Stock-Based Compensation

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation

Stock-Based Compensation

8. Stock-Based Compensation

Equity Incentive Plan

The 2004 Plan provides for the granting of stock options, restricted stock awards, stock appreciation rights and RSUs to employees, officers, directors and consultants of the Company. On April 27, 2010, an amendment and restatement of the 2004 Plan was approved by the Company’s stockholders to, among other things, reserve additional shares of common stock for issuance thereunder. As of March 31, 2012, total shares remaining available for issuance under the 2004 Plan were 720,587.

Employee Stock Purchase Plan

As of March 31, 2012, a total of 2,025,000 shares of common stock were approved and authorized for issuance under the ESPP. Through March 31, 2012, the Company issued 1,468,454 shares under the ESPP at an average price of $10.15 per share. Total shares remaining available for issuance under the ESPP were 556,546 as of March 31, 2012.

Stock-Based Compensation Expense

The allocation of stock-based compensation expense included in the condensed consolidated statements of operations was as follows:

	Three Months Ended March 31,
(in thousands)	2012		2011
Research and development	$	3,529	$	3,132
General and administrative	2,706		2,409
Total stock-based compensation expense	$	6,235	$	5,541

As of March 31, 2012, unrecognized compensation expense, net of expected forfeitures, was as follows: $7.0 million related to unvested stock options; $21.9 million related to unvested RSUs; and $29.1 million related to unvested RSAs (excludes performance-contingent RSAs).

Compensation Awards

The Company granted the following compensation awards:

	Three Months Ended March 31, 2012			Three Months Ended March 31, 2011
	Number of Compensation Awards Granted	Weighted- Average Exercise Price/Fair Value		Number of Compensation Awards Granted	Weighted- Average Exercise Price/Fair Value
2004 Plan
Stock options	118,000	$	19.05	94,000	$	22.12
RSUs time-based	468,541	18.12		394,580	24.59
RSAs time-based	402,500	18.11		1,148,000	24.70

RSAs performance-contingent(1)	44,500	18.11		1,290,000	24.73

(1) In 2011, the Compensation Committee of the Company’s Board of Directors approved the grant of 1,290,000 performance-contingent RSAs to senior management. These grants have dual triggers of vesting based upon the achievement of certain performance conditions over a six-year timeframe from 2011-2016 and continued employment, both of which must be satisfied in order for the RSAs to vest. Expense associated with these RSAs would be recognized, if at all, during these years depending on the probability of meeting the performance conditions. The maximum potential expense associated with the RSAs could be up to approximately $31.9 million (allocated as $6.3 million for research and development expense and $25.6 million for general and administrative expense) if all of the performance conditions are achieved on time. As of March 31, 2012, the Company had determined that the achievement of the requisite performance conditions was not probable and, as a result, no compensation expense has been recognized. As the RSAs are dependent upon the achievement of certain performance conditions, the expense associated with the RSAs may vary significantly from period to period. In 2012, the Compensation Committee of the Company’s Board of Directors approved the grant of 44,500 performance-contingent RSAs to senior management. These grants are subject to forfeiture unless one of three possible performance goals is achieved by December 31, 2013.

Valuation Assumptions

The range of weighted-average assumptions used to estimate the fair value of stock options granted was as follows:

	Three Months Ended March 31,
	2012			2011
*Employee stock options*
Risk-free interest rate	1.00%-1.17		%	2.38%-2.46		%
Expected life (in years)	6			6
Volatility	0.55			0.49
Dividend yield	—		%	—		%
Weighted-average estimated fair value of stock options granted	$	9.88		$	10.86

Stockholders’ Equity

For the three months ended March 31, 2012, approximately 247,818 shares were exercised at a weighted-average exercise price of $8.13 per share, for total cash proceeds of approximately $2,015,000.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
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-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
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+ Details

Description of Operations and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2012

Description of Operations and Summary of Significant Accounting Policies

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.

Use of Management's Estimates

Segment Reporting

Marketable Securities

Research and Development Costs

Fair Value of Stock-Based Compensation Awards

Recently Adopted Accounting Updates

- Definition

Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 140
-Paragraph 46
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 46R
-Paragraph 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 18
-Paragraph 5, 6, 16-19
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 18
-Paragraph 20
-Subparagraph a(2)
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 96-16
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 97-2
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 3A
-Section 02, 03

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph k
-Article 1

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 46R
-Paragraph 4
-Subparagraph c
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 46R
-Paragraph 4
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-SubTopic 40
-Section 45
-URI http://asc.fasb.org/section&trid=2197723

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2197480

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6921930&loc=d3e5614-111684

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.3A-02)
-URI http://asc.fasb.org/extlink&oid=6959686&loc=d3e355033-122828

Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2196966

Reference 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 45
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6382870&loc=d3e33801-111570

Reference 19: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 325
-SubTopic 20
-URI http://asc.fasb.org/subtopic&trid=2197087

+ Details

- Definition

Disclosure of accounting policy for investments in debt and equity securities that have readily determinable fair values (marketable securities). At a minimum, the disclosure might address accounting policies for investments classified as trading, available for sale, or held to maturity and may include how the entity determines whether impairments of available for sale or held to maturity investments are other than temporary, how the fair values of the entity's securities are determined, and the entity's accounting treatment for transfers between investment categories.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 5
-Section M

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 10, 11
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 115
-Paragraph 7-16
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 2, 12
-Article 5

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS115-1/124-1
-Paragraph 7, 8, 9, 13, 14, 15, 16, 17
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2196929

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 320
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62652-112803

+ Details

- Definition

Disclosure of accounting policy for costs it has incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process.

+ References + Details

- Definition

Disclosure of accounting policy for stock option and stock incentive plans. This disclosure may include (1) the types of stock option or incentive plans sponsored by the entity (2) the groups that participate in (or are covered by) each plan (3) significant plan provisions and (4) how stock compensation is measured, and the methodologies and significant assumptions used to determine that measurement.

+ References + Details

Collaboration Arrangements (Tables)

3 Months Ended

Mar. 31, 2012

Collaboration Arrangements

Schedule of common stock shares purchased in private placements by the affiliate of GSK

	Through March 31, 2012
	Common Stock Shares Purchased	Aggregate Amounts (in thousands)
Purchase dates
February 24, 2011	152,278	$	3,609
May 3, 2011	261,299	$	6,689
August 2, 2011	102,466	$	2,020
November 1, 2011	58,411	$	1,298
February 14, 2012	88,468	$	1,603

Schedule of upfront license fees and milestone payments received from GSK under the LABA collaboration and strategic alliance agreements

	Through March 31, 2012
(in thousands)	Upfront Fees		Milestone Payments		Total
GSK Collaborations
LABA/RELOVAIR™ collaboration(1)	$	10,000	$	50,000	$	60,000
Strategic alliance agreement	20,000		—		20,000
Strategic alliance—LAMA license(2)	5,000		3,000		8,000
Strategic alliance—MABA program license	6,000		16,000		22,000
Total	$	41,000	$	69,000	$	110,000

(1) The Company does not currently expect to be eligible for any additional milestones under this collaboration.

(2) In August 2004, GSK exercised its right to license the Company’s LAMA program pursuant to the terms of the strategic alliance. In 2009, GSK returned the program to the Company.

Schedule of revenue recognized from GSK under the LABA collaboration and strategic alliance agreements

	Three Months Ended March 31,
(in thousands)	2012		2011
GSK Collaborations
LABA/RELOVAIR™ collaboration	$	907	$	1,270
Strategic alliance agreement	—		684
Strategic alliance—MABA program license	523		502
Total	$	1,430	$	2,456

Schedule of revenue recognized under the Astellas collaboration agreement

	Three Months Ended March 31,
(in thousands)	2012			2011
Recognition of deferred revenue	$	125,819		$	3,244
Royalties from net sales of VIBATIV®	—			631
Astellas-labeled product sales allowance	(150		)	—
Total net revenue	$	125,669		$	3,875

Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2012

Marketable Securities

Schedule of estimated fair values of available-for-sale money market funds and debt securities

	March 31, 2012										December 31, 2011
(in thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value			Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government securities	$	61,028	$	5	$	(2	)	$	61,031		$	66,150		$	24	$	—		$	66,174
U.S. government agencies	82,942		2		(15		)	82,929			93,183			9		(17		)	93,175
U.S. corporate notes	550		—		—			550			2,707			—		(2		)	2,705
U.S. commercial paper	45,736		1		—			45,737			34,973			3		—			34,976
Money market funds	6,213		—		—			6,213			38,721			—		—			38,721
Total	196,469		8		(17		)	196,460			235,734			36		(19		)	235,751
Less amounts classified as cash equivalents	(9,713)		—		—			(9,713		)	(38,721		)	—		—			(38,721		)
Less amounts classified as restricted cash	(893)		—		—			(893		)	(893		)	—		—			(893		)
Amounts classified as marketable securities	$	185,863	$	8	$	(17	)	$	185,854		$	196,120		$	36	$	(19	)	$	196,137

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2012

Fair Value Measurements

Estimated fair values of the financial assets

	Fair Value Measurements at Reporting Date Using
March 31, 2012	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Level 1		Level 2		Level 3		Total
U.S. government securities	$	25,998	$	35,033	$	—	$	61,031
U.S. government agency securities	34,441		48,488		—		82,929
U.S. corporate notes	—		550		—		550
U.S. commercial paper	—		45,737		—		45,737
Money market funds	6,213		—		—		6,213
Total	$	66,652	$	129,808	$	—	$	196,460

	Fair Value Measurements at Reporting Date Using
December 31, 2011	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
(in thousands)	Level 1		Level 2		Level 3		Total
U.S. government securities	$	66,174	$	—	$	—	$	66,174
U.S. government agency securities	55,901		37,274		—		93,175
U.S. corporate notes	2,705		—		—		2,705
U.S. commercial paper	—		34,976		—		34,976
Money market funds	38,721		—		—		38,721
Total	$	163,501	$	72,250	$	—	$	235,751

- Definition

Tabular disclosure of assets, including [financial] instruments measured at fair value that are classified in stockholders' equity, if any, by class that are measured at fair value on a recurring basis. The disclosures contemplated herein include the fair value measurements at the reporting date by the level within the fair value hierarchy in which the fair value measurements in their entirety fall, segregating fair value measurements using quoted prices in active markets for identical assets (Level 1), significant other observable inputs (Level 2), and significant unobservable inputs (Level 3).

+ References + Details

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2012

Stock-Based Compensation

Allocation of stock-based compensation expense included in the consolidated statements of operations

	Three Months Ended March 31,
(in thousands)	2012		2011
Research and development	$	3,529	$	3,132
General and administrative	2,706		2,409
Total stock-based compensation expense	$	6,235	$	5,541

Summary of equity award activity under the 2004 Plan

	Three Months Ended March 31, 2012			Three Months Ended March 31, 2011
	Number of Compensation Awards Granted	Weighted- Average Exercise Price/Fair Value		Number of Compensation Awards Granted	Weighted- Average Exercise Price/Fair Value
2004 Plan
Stock options	118,000	$	19.05	94,000	$	22.12
RSUs time-based	468,541	18.12		394,580	24.59
RSAs time-based	402,500	18.11		1,148,000	24.70

RSAs performance-contingent(1)	44,500	18.11		1,290,000	24.73

Schedule of weighted-average assumptions used to estimate the fair value of stock options granted

	Three Months Ended March 31,
	2012			2011
*Employee stock options*
Risk-free interest rate	1.00%-1.17		%	2.38%-2.46		%
Expected life (in years)	6			6
Volatility	0.55			0.49
Dividend yield	—		%	—		%
Weighted-average estimated fair value of stock options granted	$	9.88		$	10.86

- Definition

Tabular disclosure of the allocation of equity-based compensation costs to a given line item on the balance sheet and income statement for the period. This may include the reporting line for the costs and the amount capitalized and expensed.

+ References + Details

Net Income (Loss) per Share (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Numerator
Net income (loss) - basic	$ 84,594	$ (22,667)
Add: interest and issuance costs related to convertible notes	1,500
Net income (loss) - diluted	$ 86,094	$ (22,667)
Denominator
Weighted-average common shares outstanding	86,292	83,325
Less: unvested RSAs (in shares)	(2,702)	(2,471)
Weighted-average shares used in computing basic net income (loss) per share	83,590	80,854
Dilutive effect of equity incentive plans and ESPP	1,822
Dilutive effect of convertible subordinated notes	6,668
Weighted-average common shares outstanding and dilutive potential common shares - diluted	92,080	80,854
Securities that could potentially dilute basic EPS in the future
Anti-dilutive securities (in shares)	4,641	13,341
Equity Incentive Plans and ESPP
Securities that could potentially dilute basic EPS in the future
Anti-dilutive securities (in shares)	4,641	6,673
Convertible debt
Securities that could potentially dilute basic EPS in the future
Anti-dilutive securities (in shares)		6,668

Collaboration Arrangements (Details)	1 Months Ended									3 Months Ended
Collaboration Arrangements (Details)	Feb. 29, 2012 USD ($) shares	Nov. 30, 2011 USD ($) shares	Aug. 31, 2011 USD ($) shares	Jul. 31, 2011 shares	May 31, 2011 USD ($) shares	Feb. 28, 2011 USD ($) shares	Nov. 30, 2010 USD ($) shares	Oct. 31, 2004 USD ($) shares	May 31, 2004 USD ($) shares	Mar. 31, 2012 USD ($) product Y	Mar. 31, 2011 USD ($)
GSK
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees										$ 41,000,000
Milestone Payments										69,000,000
Total										110,000,000
Net revenue recognized under the collaboration
Recognition of deferred revenue										1,430,000	$ 2,456,000
VIBATIV \| Maximum
Information related to collaboration arrangements
Amount of purchase agreements for pharmaceutical ingredient and raw materials										6,200,000
Amount of purchase agreements for for finished goods inventory										4,200,000
Long-acting beta agonist (LABA) collaboration \| GSK
Information related to collaboration arrangements
Maximum obligation for milestone payments to GSK										$ 220,000,000
Number of combination products \| product										2
Long-acting beta agonist (LABA) collaboration \| LAMA/LABA \| GSK \| Maximum
Information related to collaboration arrangements
Percentage of royalties receivable										10.00%
Long-acting beta agonist (LABA) collaboration \| LABA/RELOVAIR collaboration \| GSK
Information related to collaboration arrangements
If global regulatory authorities accept the applications for RELOVAIR, which the Company anticipates will be filed by GSK beginning in mid-2012, a portion of these potential milestone payments could be payable to GSK within the next two years. \| Y										2
Royalty rate for first level of annual global net sales (as a percent)										15.00%
Royalty rate for sales above first level of annual global net sales (as a percent)										5.00%
Annual global sales level used to determine royalty rate										$ 3,000,000,000
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees										10,000,000
Milestone Payments										50,000,000
Total										60,000,000
Net revenue recognized under the collaboration
Recognition of deferred revenue										907,000	1,270,000
2004 Strategic alliance \| Common stock \| Glaxo Group Limited, an affiliate of GSK
Entity's common stock information
Common Stock Shares Purchased \| shares							5,750,000
Aggregate Amounts							$ 129,400,000
2004 Strategic alliance \| Class A common stock \| GlaxoSmithKline LLC, an affiliate of GSK
Entity's common stock information
Common Stock Shares Purchased \| shares								433,757	6,387,096
Aggregate Amounts								$ 6,900,000	$ 108,900,000
2004 Strategic alliance \| LAMA \| GSK
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees										5,000,000
Milestone Payments										3,000,000
Total										$ 8,000,000
2004 Strategic alliance \| MABA \| GSK
Information related to collaboration arrangements
Number of combination products to be developed and commercialized \| product										1
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees										$ 6,000,000
Milestone Payments										16,000,000
Total										22,000,000
Net revenue recognized under the collaboration
Recognition of deferred revenue										523,000	502,000
2004 Strategic alliance \| MABA containing '081 \| GSK
Information related to collaboration arrangements
Potential upfront license and milestone payments that Company could receive in respect of combination medicines										$ 250,000,000
2004 Strategic alliance \| MABA containing '081 - single-agent \| GSK
Information related to collaboration arrangements
Royalty rate for sales above first level of annual global net sales (as a percent)										7.50%
Annual global sales level used to determine royalty rate										$ 3,500,000,000
Potential upfront license and milestone payments that Company could receive										$ 125,000,000
2004 Strategic alliance \| MABA containing '081 - single-agent \| GSK \| Maximum
Information related to collaboration arrangements
Royalty rate for first level of annual global net sales (as a percent)										20.00%
2004 Strategic alliance \| MABA containing '081 - single-agent \| GSK \| Minimum
Information related to collaboration arrangements
Royalty rate for first level of annual global net sales (as a percent)										10.00%
2004 Strategic alliance \| MABA containing '081 - combination product \| GSK
Information related to collaboration arrangements
Royalty rate for combination products as a percentage of the rate applied to single products										70.00%
2004 Strategic alliance \| MABA containing additional MABA \| GSK
Information related to collaboration arrangements
Number of products which Company is obligated to use diligent efforts to discover after license of a program \| product										6
2004 Strategic alliance \| MABA containing additional MABA \| GSK \| Maximum
Information related to collaboration arrangements
Milestone payments receivable										$ 129,000,000
2004 Strategic alliance \| MABA containing additional MABA - single-agent \| GSK
Information related to collaboration arrangements
Royalty rate for sales above first level of annual global net sales (as a percent)										10.00%
Annual global sales level used to determine royalty rate										$ 3,500,000,000
2004 Strategic alliance \| MABA containing additional MABA - single-agent \| GSK \| Maximum
Information related to collaboration arrangements
Royalty rate for first level of annual global net sales (as a percent)										15.00%
2004 Strategic alliance \| MABA containing additional MABA - single-agent \| GSK \| Minimum
Information related to collaboration arrangements
Royalty rate for first level of annual global net sales (as a percent)										10.00%
2004 Strategic alliance \| MABA containing additional MABA - combination product \| GSK
Information related to collaboration arrangements
Royalty rate for combination products as a percentage of the rate applied to single products										50.00%
2004 Strategic alliance \| Non-license specific \| GSK
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees										$ 20,000,000
Total										$ 20,000,000
Net revenue recognized under the collaboration
Recognition of deferred revenue											684,000
Governance agreement \| Common stock \| GSK
Entity's common stock information
Issuance of common stock for cash in private placement to a related party (in shares) \| shares	88,468	58,411	102,466		261,299	152,278
Issuance of common stock for cash in private placement to a related party	$ 1,603,000	$ 1,298,000	$ 2,020,000		$ 6,689,000	$ 3,609,000
Governance agreement \| Class A common stock \| GSK
Entity's common stock information
Shares of Class A common stock converted into common stock \| shares				9,401,499
Number of shares of Class A stock convertible into one share of common stock \| shares				1
Number of shares of common stock into which one share of Class A stock can be converted \| shares				1
License, development and commercialization agreement \| VIBATIV \| Astellas
Information related to collaboration arrangements
Percentage of royalties payable to Astellas										2.00%
Liability recorded due to termination agreement										$ 150,000
GSK Upfront License Fees, Milestone Payments and Revenue
Term of royalty payment (in years) \| Y										10
License, Development and Commercialization Agreement with Astellas
Upfront license, milestone and other fees received										$ 191,000,000
Net revenue recognized under the collaboration
Recognition of deferred revenue										125,819,000	3,244,000
Royalties from net sales of VIBATIV											631,000
VIBATIV-labeled product sales allowance										150,000
Total net revenue										$ 125,669,000	$ 3,875,000

Marketable Securities (Details) $ in Thousands	3 Months Ended
Marketable Securities (Details) $ in Thousands	Mar. 31, 2012 USD ($) M	Dec. 31, 2011 USD ($)
Available-for-sale securities
Less amounts classified as cash equivalents	$ (9,713)	$ (38,721)
Less amounts classified as restricted cash	(893)	(893)
Amortized Cost	185,863	196,120
Gross Unrealized Gains	8	36
Gross Unrealized Losses	(17)	(19)
Amounts classified as marketable securities	$ 185,854	196,137
Maturity period for marketable securities
Maximum contractual maturity period (in months)	12 months
Average contractual maturity period (in months) \| M	5
Available-for-sale securities and restricted and unrestricted cash
Available-for-sale securities
Amortized Cost	$ 196,469	235,734
Gross Unrealized Gains	8	36
Gross Unrealized Losses	(17)	(19)
Estimated Fair Value	196,460	235,751
U.S. government securities \| Available-for-sale securities and restricted and unrestricted cash
Available-for-sale securities
Amortized Cost	61,028	66,150
Gross Unrealized Gains	5	24
Gross Unrealized Losses	(2)
Estimated Fair Value	61,031	66,174
U.S. government agencies \| Available-for-sale securities and restricted and unrestricted cash
Available-for-sale securities
Amortized Cost	82,942	93,183
Gross Unrealized Gains	2	9
Gross Unrealized Losses	(15)	(17)
Estimated Fair Value	82,929	93,175
U.S. corporate notes \| Available-for-sale securities and restricted and unrestricted cash
Available-for-sale securities
Amortized Cost	550	2,707
Gross Unrealized Losses		(2)
Estimated Fair Value	550	2,705
U.S. commercial paper \| Available-for-sale securities and restricted and unrestricted cash
Available-for-sale securities
Amortized Cost	45,736	34,973
Gross Unrealized Gains	1	3
Estimated Fair Value	45,737	34,976
Money market funds \| Available-for-sale securities and restricted and unrestricted cash
Available-for-sale securities
Amortized Cost	6,213	38,721
Estimated Fair Value	$ 6,213	$ 38,721

Long-Term Debt (Details)	1 Months Ended	3 Months Ended
Long-Term Debt (Details)	Jan. 31, 2008 USD ($)	Mar. 31, 2012 USD ($) shares D $ / shares	Mar. 31, 2011 USD ($)	Dec. 31, 2011 USD ($)
Information related to long-term obligations
Carrying Value of convertible subordinated notes		$ 172,500,000		$ 172,500,000
Estimated Fair Value of convertible subordinated notes		$ 178,436,000		$ 189,588,000
Convertible Subordinated Notes
Debt disclosures
Loan amount	$ 172,500,000
Proceeds from issuance of debt, net of issuance costs	$ 166,700,000
Interest rate (as a percent)		3.00%
Conversion rate, number of shares to be issued per $1000 of principal amount of notes \| shares		38.6548
Principal amount used for debt instrument conversion ratio		$ 1,000
Initial conversion price of convertible notes into common stock (in dollars per share) \| $ / shares		$ 25.87
Unamortized debt issuance costs		$ 2,300,000
Amortization expense		$ 0,200,000	$ 200,000
Percentage of principal amount at which the entity may redeem some or all notes		100.00%
Percentage of closing sales price of the entity's common stock the conversion price must exceed in order for the notes to be convertible		130.00%
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be redeemable \| D		20
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be redeemable \| D		30

Stock-Based Compensation (Details 3)	3 Months Ended
Stock-Based Compensation (Details 3)	Mar. 31, 2012 USD ($) Y $ / shares shares	Mar. 31, 2011 Y $ / shares shares
Stock options
Weighted-average assumptions
Risk-free interest rate, minimum (as a percent)	1.00%	2.38%
Risk-free interest rate, maximum (as a percent)	1.17%	2.46%
Expected life (in years) \| Y	6	6
Volatility (as a percent)	0.55%	0.49%
Weighted-average estimated fair value of stock options granted (in dollars per share)	$ 9.88	$ 10.86
Stockholders' equity (net capital deficiency):
Shares exercised \| shares	247,818
Shares exercised, Weighted-Average Exercise Price of Outstanding Options (in dollars per share)	$ 8.13
Total cash proceed \| $	$ 2,015,000
Stock options \| 2004 Equity Incentive Plan
Compensation Awards
Number of Compensation Awards Granted (in shares) \| shares	118,000	94,000
Weighted-Average Exercise Price (in dollars per share)	$ 19.05	$ 22.12
RSUs \| 2004 Equity Incentive Plan \| Time-Based
Compensation Awards
Number of Compensation Awards Granted (in shares) \| shares	468,541	394,580
Weighted-Average Fair Value (in dollars per share)	$ 18.12	$ 24.59
RSAs \| 2004 Equity Incentive Plan \| Time-Based
Compensation Awards
Number of Compensation Awards Granted (in shares) \| shares	402,500	1,148,000
Weighted-Average Fair Value (in dollars per share)	$ 18.11	$ 24.70
RSAs \| 2004 Equity Incentive Plan \| Performance-Contingent
Compensation Awards
Number of Compensation Awards Granted (in shares) \| shares	44,500	1,290,000
Weighted-Average Fair Value (in dollars per share)	$ 18.11	$ 24.73

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Mar. 31, 2012	Dec. 31, 2011
CONDENSED CONSOLIDATED BALANCE SHEETS
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	200,000	200,000
Common stock, outstanding shares	86,470	85,543

Description of Operations and Summary of Significant Accounting Policies (Details) - Stock options	3 Months Ended
	Mar. 31, 2012
Information related to stock-based compensation
Stock options, contractual term (in years)	10 years
Vesting period (in years)	4 years

Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 31, 2012	Dec. 31, 2011
Estimated fair values of entity's financial assets
Fair value measurements transfer to Level 1 From Level 2	$ 19,600	$ 19,700
Fair value measured transfer to Level 2 From Level 1	56,200	56,500
Recurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1
Estimated fair values of entity's financial assets
Fair value of financial assets	66,652	163,501
Recurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1 \| U.S. government securities
Estimated fair values of entity's financial assets
Fair value of financial assets	25,998	66,174
Recurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1 \| U.S. government agency securities
Estimated fair values of entity's financial assets
Fair value of financial assets	34,441	55,901
Recurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1 \| U.S. corporate notes
Estimated fair values of entity's financial assets
Fair value of financial assets		2,705
Recurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1 \| Money market funds
Estimated fair values of entity's financial assets
Fair value of financial assets	6,213	38,721
Recurring basis \| Significant Other Observable Inputs, Level 2
Estimated fair values of entity's financial assets
Fair value of financial assets	129,808	72,250
Recurring basis \| Significant Other Observable Inputs, Level 2 \| U.S. government securities
Estimated fair values of entity's financial assets
Fair value of financial assets	35,033
Recurring basis \| Significant Other Observable Inputs, Level 2 \| U.S. government agency securities
Estimated fair values of entity's financial assets
Fair value of financial assets	48,488	37,274
Recurring basis \| Significant Other Observable Inputs, Level 2 \| U.S. corporate notes
Estimated fair values of entity's financial assets
Fair value of financial assets	550
Recurring basis \| Significant Other Observable Inputs, Level 2 \| U.S. commercial paper
Estimated fair values of entity's financial assets
Fair value of financial assets	45,737	34,976
Recurring basis \| Total
Estimated fair values of entity's financial assets
Fair value of financial assets	196,460	235,751
Recurring basis \| Total \| U.S. government securities
Estimated fair values of entity's financial assets
Fair value of financial assets	61,031	66,174
Recurring basis \| Total \| U.S. government agency securities
Estimated fair values of entity's financial assets
Fair value of financial assets	82,929	93,175
Recurring basis \| Total \| U.S. corporate notes
Estimated fair values of entity's financial assets
Fair value of financial assets	550	2,705
Recurring basis \| Total \| U.S. commercial paper
Estimated fair values of entity's financial assets
Fair value of financial assets	45,737	34,976
Recurring basis \| Total \| Money market funds
Estimated fair values of entity's financial assets
Fair value of financial assets	$ 6,213	$ 38,721

Stock-Based Compensation (Details)	99 Months Ended
Stock-Based Compensation (Details)	Mar. 31, 2012 $ / shares shares
Employee stock purchase plan
Information related to stock-based compensation
Shares of common stock approved and authorized for issuance	2,025,000
Shares remaining available for issuance	556,546
Stock issued during period	1,468,454
Cumulative average sale price per share as of the period end (in dollars per share) \| $ / shares	$ 10.15
2004 Equity Incentive Plan
Information related to stock-based compensation
Shares remaining available for issuance	720,587

Stock-Based Compensation (Details 2) $ in Thousands	3 Months Ended		12 Months Ended
Stock-Based Compensation (Details 2) $ in Thousands	Mar. 31, 2012 USD ($) shares	Mar. 31, 2011 USD ($)	Dec. 31, 2011 USD ($) Y shares
Allocation of stock-based compensation expense
Stock-based compensation expense	$ 6,235	$ 5,541
Stock options
Information related to share-based compensation
Total unrecognized compensation cost related to unvested stock-based compensation	7,000
RSUs
Information related to share-based compensation
Total unrecognized compensation cost related to unvested stock-based compensation	21,900
RSAs
Information related to share-based compensation
Total unrecognized compensation cost related to unvested stock-based compensation	$ 29,100
RSAs \| Employee \| Performance-Contingent \| Senior management
Information related to share-based compensation
Shares of common stock approved and authorized for issuance \| shares	44,500		1,290,000
Timeframe for performance targets (in years) \| Y			6
Maximum potential expenses associated with 2011 performance-contingent restricted stock grant			$ 31,900
Research and development
Allocation of stock-based compensation expense
Stock-based compensation expense	$ 3,529	3,132
Research and development \| RSAs \| Employee \| Performance-Contingent \| Senior management
Information related to share-based compensation
Maximum potential expenses associated with 2011 performance-contingent restricted stock grant			6,300
General and administrative
Allocation of stock-based compensation expense
Stock-based compensation expense	$ 2,706	$ 2,409
General and administrative \| RSAs \| Employee \| Performance-Contingent \| Senior management
Information related to share-based compensation
Maximum potential expenses associated with 2011 performance-contingent restricted stock grant			$ 25,600

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue from a related party	$ 1,430	$ 2,456

Commitments and Contingencies (Details) - Maximum - VIBATIV $ in Millions	3 Months Ended
	Mar. 31, 2012 USD ($)
Purchase Obligation
Amount of purchase agreements for pharmaceutical ingredient and raw materials	$ 6.2
Amount of purchase agreements for for finished goods inventory	$ 4.2

Subsequent Event (Details) - Shares issued - USD ($)	1 Months Ended
Subsequent Event (Details) - Shares issued - USD ($)	May 15, 2012	Apr. 30, 2012
Information related to subsequent events
Agreement to issue stock, number of shares		10,000,000
Agreement to issue stock, price per share (in dollars per share)		$ 21.2887
Total investment by related party upon issuance of company's common stock in common stock purchase agreement		$ 212,887,000
Maximum percentage decline against S & P benchmark value, before common stock purchase agreement termination option activated for related party	30.00%