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Document and Entity Information - shares	6 Months Ended
Jun. 30, 2012	Jul. 25, 2012
Document and Entity Information
Entity Registrant Name	THERAVANCE INC
Entity Central Index Key	0001080014
Document Type	10-Q
Document Period End Date	Jun. 30, 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		96,899,828
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 161,096	$ 44,778
Short-term investments	134,393	196,137
Receivable from related party	94	223
Notes receivable, current	100	100
Prepaid and other current assets	3,398	3,525
Inventory	4,299
Total current assets	303,380	244,763
Long-term marketable securities	83,208
Restricted cash	833	893
Property and equipment, net	9,660	10,372
Notes receivable, non-current	240	240
Other assets, non-current	2,101	2,514
Total assets	399,422	258,782
Current liabilities:
Accounts payable	4,989	5,813
Accrued personnel related expenses	5,669	9,643
Accrued clinical and development expenses	4,898	6,956
Accrued interest on convertible subordinated notes	2,372	2,372
Other accrued liabilities	2,077	1,946
Note payable and capital lease, current		69
Deferred revenue, current	5,771	18,697
Total current liabilities	25,776	45,496
Convertible subordinated notes	172,500	172,500
Deferred rent	5,477	5,821
Deferred revenue, non-current	6,413	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: 96,882 at June 30, 2012 and 85,543 at December 31, 2011	969	855
Additional paid-in capital	1,456,882	1,228,037
Accumulated other comprehensive income (loss)	(109)	16
Accumulated deficit	(1,268,486)	(1,315,960)
Total stockholders' equity (net capital deficiency)	189,256	(87,052)
Total liabilities and stockholders' equity (net capital deficiency)	$ 399,422	$ 258,782

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenue (including amounts from a related party: three months-2012-$1,430; 2011-$2,456; six months-2012-$2,860; 2011-$4,913)	$ 1,430	$ 6,389	$ 128,529	$ 12,719
Operating expenses:
Research and development	29,549	22,798	62,751	43,262
General and administrative	7,590	7,248	15,447	14,417
Total operating expenses	37,139	30,046	78,198	57,679
Income (loss) from operations	(35,709)	(23,657)	50,331	(44,960)
Interest income	90	118	145	263
Interest expense	(1,501)	(1,506)	(3,002)	(3,015)
Net income (loss)	$ (37,120)	$ (25,045)	$ 47,474	$ (47,712)
Net income (loss) per share:
Basic net income (loss) per share (in dollars per share)	$ (0.42)	$ (0.31)	$ 0.55	$ (0.59)
Diluted net income (loss) per share (in dollars per share)	$ (0.42)	$ (0.31)	$ 0.53	$ (0.59)
Shares used to compute basic earnings per share (in shares)	89,169	81,811	86,379	81,415
Shares used to compute diluted earnings per share (in shares)	89,169	81,811	95,044	81,415

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities
Net income (loss)	$ 47,474	$ (47,712)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization	3,572	3,407
Recognized gain on marketable securities	(2)
Stock-based compensation	12,214	11,134
Forgiveness of notes receivable		1
Changes in operating assets and liabilities:
Receivables	129	(53)
Prepaid expenses and other current assets	127	1,717
Inventory	(4,299)
Accounts payable	(81)	813
Accrued personnel-related expenses, accrued interest on convertible subordinated notes and other current liabilities	(5,956)	(3,488)
Deferred rent	(344)	1,932
Deferred revenue	(128,530)	(11,401)
Net cash used in operating activities	(75,696)	(43,650)
Cash flows from investing activities
Purchases of property and equipment	(1,762)	(2,763)
Purchases of marketable securities	(185,456)	(176,322)
Sales of marketable securities	8,520	8,750
Maturities of marketable securities	153,921	119,476
Release of restricted cash	60
Additions to notes receivable		(140)
Payments received on notes receivable		530
Net cash used in investing activities	(24,717)	(50,469)
Cash flows from financing activities
Payments on note payable and capital lease	(69)	(113)
Proceeds from issuances of common stock, net	216,800	21,557
Net cash provided by financing activities	216,731	21,444
Net increase (decrease) in cash and cash equivalents	116,318	(72,675)
Cash and cash equivalents at beginning of period	44,778	163,333
Cash and cash equivalents at end of period	$ 161,096	$ 90,658

Description of Operations and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 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 condensed 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 condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed 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, short-term investments or long-term 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 marketable 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.

Inventories

Inventories are stated at the lower of cost or market value. Cost is determined using an average cost basis. Inventories include VIBATIV® active pharmaceutical ingredient and other raw materials of $4.3 million at June 30, 2012. VIBATIV® is a U.S. Food and Drug Administration (FDA) approved drug. If information becomes available that suggests the inventories may not be realizable, the Company may be required to expense a portion or all of the capitalized inventory costs.

In May 2012, the Company entered into a Technology Transfer and Supply Agreement with Hospira Worldwide, Inc. (Hospira) and technology transfer activities are in process. The Company must obtain regulatory approval for VIBATIV® drug product that will be manufactured at Hospira’s facility before any such product may be sold, and this regulatory approval process could take up through mid-2013.

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

The Company uses the Black-Scholes-Merton 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-Merton 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.

Restricted Stock Units (RSUs) and Restricted Stock Awards (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.

New 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 (net capital deficiency) be presented either in a single continuous statement of comprehensive income (loss) or in two separate but consecutive statements. 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

6 Months Ended

Jun. 30, 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 six months ended June 30, 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 the 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 June 30, 2012, and for the three and six months ended June 30, 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 June 30,						Six Months Ended June 30,
(in thousands, except for per share amounts)	2012			2011			2012			2011
Numerator:
Net income (loss) — basic	$	(37,120	)	$	(25,045	)	$	47,474		$	(47,712	)
Add: interest and issuance costs related to convertible notes	—			—			3,002			—
Net income (loss) — diluted	(37,120		)	(25,045		)	50,476			(47,712		)

Denominator:
Weighted-average common shares outstanding	91,809			84,263			89,019			83,867
Less: unvested RSAs	(2,640		)	(2,452		)	(2,640		)	(2,452		)
Weighted-average common shares outstanding — basic	89,169			81,811			86,379			81,415
Effect of dilutive equity incentive plans and ESPP	—			—			1,997			—
Effect of dilutive convertible subordinated notes	—			—			6,668			—
Weighted-average common shares outstanding —diluted	89,169			81,811			95,044			81,415

Anti-Dilutive Securities

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

	Three Months Ended June 30,		Six Months Ended June 30,
(in thousands)	2012	2011	2012	2011
Shares issuable under Equity Incentive Plans and ESPP	6,348	5,472	3,801	5,616
Shares issuable upon the conversion of convertible debt	6,668	6,668	—	6,668
Total anti-dilutive securities	13,016	12,140	3,801	12,284

Collaboration Arrangements

6 Months Ended

Jun. 30, 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 two combination products: Relvar™/Breo™ (FF/VI) and umeclidinium bromide/vilanterol (UMEC/VI). For the treatment of asthma, the collaboration is developing FF/VI. FF/VI is an investigational once-daily combination medicine consisting of a LABA, vilanterol (VI), and an inhaled corticosteroid (ICS), fluticasone furoate (FF). UMEC/VI is an investigational once-daily combination medicine consisting of the long-acting muscarinic antagonist (LAMA) umeclidinium bromide (UMEC) and a LABA, VI.

In the event that a product containing 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. 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 UMEC/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.

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

On April 2, 2012, the Company and Glaxo Group Limited, an affiliate of GSK, entered into a common stock purchase agreement, under which the Company issued and sold to Glaxo Group Limited 10,000,000 shares of the Company’s common stock at a price of $21.2887 per share, for a total investment of $212,887,000. The stock purchase was completed May 16, 2012.

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 June 30, 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

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.

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 June 30, 2012
(in thousands)	Upfront Fees		Milestone Payments		Total
GSK Collaborations
LABA 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 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 June 30,				Six Months Ended June 30,
(in thousands)	2012		2011		2012		2011
GSK Collaborations
LABA collaboration	$	907	$	1,270	$	1,814	$	2,540
Strategic alliance agreement	—		684		—		1,369
Strategic alliance—MABA program license	523		502		1,046		1,004
Total revenue	$	1,430	$	2,456	$	2,860	$	4,913

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 purchase agreements with Astellas for the purchase of VIBATIV® active pharmaceutical ingredient and other 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. As of June 30, 2012, the Company had purchased $4.3 million of active pharmaceutical ingredient and other raw materials pursuant to these purchase agreements.

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 of the VIBATIV® collaboration agreement, the Company recorded a liability of $150,000 at June 30, 2012, which is included in the condensed consolidated balance sheets. The Company continues to evaluate 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 VIBATIV® collaboration agreement, 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 first quarter of 2012, and the Company is no longer eligible to receive any further milestone payments from Astellas.

Net revenue recognized under this collaboration agreement was as follows:

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2012		2011			2012			2011
Recognition of deferred revenue	$	—	$	—		$	125,819		$	—
Amortization of deferred revenue	—		3,244			—			6,488
Royalties from net sales of VIBATIV®	—		694			—			1,324
Proceeds from VIBATIV® delivered to Astellas	—		1,171			—			1,171
Cost of VIBATIV® delivered to Astellas	—		(1,177		)	—			(1,177		)
Astellas-labeled product sales allowance	—		—			(150		)	—
Total net revenue	$	—	$	3,932		$	125,669		$	7,806

Available-for-Sale Securities

6 Months Ended

Jun. 30, 2012

Available-for-Sale Securities

Available-for-Sale Securities

4. Available-for-Sale Securities

The following table is a summary of available-for-sale debt securities recorded in cash and cash equivalents, short-term investments, long-term marketable securities, or restricted cash in the Company’s condensed consolidated balance sheets. Estimated fair values of available-for-sale securities are generally based on prices obtained from commercial pricing services:

	June 30, 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	$	30,270	$	1	$	(16	)	$	30,255	$	66,150	$	24	$	—		$	66,174
U.S. government agencies	112,266		4		(74		)	112,196		93,183		9		(17		)	93,175
U.S. corporate notes	60,176		9		(33		)	60,152		2,707		—		(2		)	2,705
U.S. commercial paper	44,993		—		—			44,993		34,973		3		—			34,976
Money market funds	129,891		—		—			129,891		38,721		—		—			38,721
Total	$	377,596	$	14	$	(123	)	$	377,487	$	235,734	$	36	$	(19	)	$	235,751

The following table summarizes the classification of the available-for-sale debt securities on the Company’s condensed consolidated balance sheets:

(in thousands)	June 30, 2012		December 31, 2011
Cash and cash equivalents	$	159,053	$	38,721
Short-term investments	134,393		196,137
Long-term marketable securities	83,208		—
Restricted cash	833		893
Total	$	377,487	$	235,751

At June 30, 2012, all of the marketable securities have contractual maturities within twenty-four months and the average duration of marketable securities was approximately eleven 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 June 30, 2012, were temporary in nature. All marketable securities with unrealized losses have been in a loss position for less than twelve months.

- Definition

The entire disclosure for investments in certain debt and equity securities.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 320
-Glossary Debt Security
-URI http://asc.fasb.org/extlink&oid=6509901

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 310
-SubTopic 30
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6379141&loc=d3e15032-111544

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27290-111563

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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-URI http://asc.fasb.org/extlink&oid=6511694

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Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 115
-Paragraph 3, 19, 20, 21, 22, 137
-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.

+ Details

Fair Value Measurements

6 Months Ended

Jun. 30, 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
June 30, 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	$	30,255	$	—	$	—	$	30,255
U.S. government agency securities	75,632		36,564		—		112,196
U.S. corporate notes	57,066		3,086		—		60,152
U.S. commercial paper	—		44,993		—		44,993
Money market funds	129,891		—		—		129,891
Total	$	292,844	$	84,643	$	—	$	377,487

	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 June 30, 2012, securities with a total fair value of $11.2 million were measured using Level 1 inputs in comparison to December 31, 2011, at which time the securities had a fair value of $11.4 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 June 30, 2012, compared to December 31, 2011.

There were no transfers from Level 1 to Level 2 for the six months ended June 30, 2012.

- 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 Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

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-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-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
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-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 9: 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 10: http://www.xbrl.org/2003/role/presentationRef
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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 11: http://www.xbrl.org/2003/role/presentationRef
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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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 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-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.

+ Details

Stock-Based Compensation

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation

Stock-Based Compensation

8. Stock-Based Compensation

Equity Incentive Plans

In May 2012, the Company adopted the 2012 Equity Incentive Plan (2012 Plan). The number of shares of the Company’s common stock available for issuance under the 2012 Plan is equal to 6,500,000 shares plus up to 12,667,411 additional shares that may be added to the 2012 Plan in connection with the forfeiture, repurchase, cash settlement or termination of awards outstanding under the 2004 Equity Incentive Plan (2004 Plan), the 2008 New Employee Equity Incentive Plan, the 1997 Stock Plan and the Long-Term Stock Option Plan (collectively, the “Prior Plans”) as of December 31, 2011. While a maximum of 12,667,411 shares could be added to the 2012 Plan from the Prior Plans, since this assumes that all the awards outstanding on December 31, 2011 will be forfeited, repurchased, cash settled or terminated, the Company expects the actual number to be added to the 2012 Plan share reserve to be less. Upon adoption of the 2012 Plan the Company reserved 6,500,000 shares of common stock for issuance under the 2012 Plan. The 2012 Plan reserve was also reduced by the number of stock awards granted under the 2004 Plan on or after January 1, 2012. No additional awards have been or will be made after May 15, 2012 under the 2004 Plan. Stock options and SARS will reduce the 2012 Plan reserve by one share for every share granted, and stock awards other than options and SARs granted will reduce the 2012 Plan share reserve by 1.45 shares for every share granted. The 2012 Plan share reserve was also reduced by the number of stock awards granted under the 2004 Plan on or after January 1, 2012, using the same ratios described. As of June 30, 2012, total shares remaining available for issuance under the 2012 Plan were 5,037,262.

The 2012 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards, stock unit awards and stock appreciation rights (“SARs”) to employees, non-employee directors and consultants of the Company. Stock options may be granted with an exercise price not less than the fair market value of the common stock on the grant date. Stock options granted to employees generally have a maximum term of 10 years and vest over a four year period from the date of grant; 25% vest at the end of one year, and 75% vest monthly over the remaining three years. The Company may grant options with different vesting terms from time to time. Unless an employee’s termination of service is due to disability or death, upon termination of service, any unexercised vested options will be forfeited at the end of three months or the expiration of the option, whichever is earlier.

Employee Stock Purchase Plan

As of June 30, 2012, a total of 2,025,000 shares of common stock were approved and authorized for issuance under the ESPP. Through June 30, 2012, the Company issued 1,548,023 shares under the ESPP at an average price of $10.53 per share. As of June 30, 2012, total shares remaining available for issuance under the ESPP were 476,977.

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 June 30,				Six Months Ended June 30,
(in thousands)	2012		2011		2012		2011
Research and development	$	3,541	$	3,379	$	7,070	$	6,511
General and administrative	2,438		2,896		5,144		5,305
Total stock-based compensation expense	$	5,979	$	6,275	$	12,214	$	11,816

As of June 30, 2012, unrecognized compensation expense, net of expected forfeitures, was as follows: $6.8 million related to unvested stock options; $19.8 million related to unvested RSUs; and $27.1 million related to unvested RSAs (excludes performance-contingent RSAs).

Compensation Awards

The Company granted the following compensation awards:

	Six Months Ended June 30, 2012			Six Months Ended June 30, 2011
	Number of Compensation Awards Granted	Weighted- Average Exercise Price/Fair Value		Number of Compensation Awards Granted	Weighted- Average Exercise Price/Fair Value
2004 and 2012 Plans
Stock options	198,000	$	20.01	307,500	$	24.56
RSUs time-based	528,381	18.45		465,000	25.03
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 June 30, 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 February 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. As of June 30, 2012, the Company had determined that the achievement of one of three possible performance conditions was not probable and, as a result, no compensation expense has been recognized.

Valuation Assumptions

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
*Employee stock options*
Risk-free interest rate	0.74%-1.10		%	1.94%-2.57		%	0.74%-1.17		%	1.94%-2.57		%
Expected term (in years)	5-6			5-6			5-6			5-6
Volatility	55%-60		%	53%-55		%	55%-60		%	49%-55		%
Dividend yield	—		%	—		%	—		%	—		%
Weighted-average estimated fair value of stock options granted	$	11.11		$	13.09		$	10.37		$	12.41

The range of weighted-average assumptions used to estimate the fair value of employee stock purchase plan awards was as follows:

	Three Months Ended June 30,						Six Months Ended June 30,

*Employee stock purchase plan issuances*
Risk-free interest rate	0.15%-0.29		%	0.07%-0.54		%	0.15%-0.29		%	0.07%-0.54		%
Expected term (in years)	0.5-2.0			0.5-2.0			0.5-2.0			0.5-2.0
Volatility	55%-64		%	48%-50		%	55%-64		%	48%-50		%
Dividend yield	—		%	—		%	—		%	—		%
Weighted-average estimated fair value of ESPP issuances	$	9.00		$	9.25		$	9.00		$	9.25

Stockholders’ Equity

For the six months ended June 30, 2012, approximately 349,538 shares were exercised at a weighted-average exercise price of $7.99 per share, for total cash proceeds of approximately $2,792,007.

- 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 Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 7: 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 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-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.

+ Details

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

6 Months Ended

Jun. 30, 2012

Description of Operations and Summary of Significant Accounting Policies

Principles of Consolidation

Principles of Consolidation

Use of Management's Estimates

Use of Management’s Estimates

Segment Reporting

Segment Reporting

Marketable Securities

Marketable Securities

Inventory

Inventories

Research and Development Costs

Research and Development Costs

Fair Value of Stock-Based Compensation Awards

Fair Value of Stock-Based Compensation Awards

Restricted Stock Units (RSUs) and Restricted Stock Awards (RSAs) are measured based on the fair market values of the underlying stock on the dates of grant.

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.

New Accounting Updates

New 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
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-Name Accounting Standards Codification
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-SubTopic 10
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Number 46R
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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-Number 18
-Paragraph 5, 6, 16-19
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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-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 15: 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 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph k
-Article 1

Reference 17: 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 18: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02, 03
-Article 3A

Reference 19: 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.

+ Details

- Definition

Disclosure of accounting policy for major classes of inventories, bases of stating inventories (for example, lower of cost or market), methods by which amounts are added and removed from inventory classes (for example, FIFO, LIFO, or average cost), loss recognition on impairment of inventories, and situations in which inventories are stated above cost. If inventory is carried at cost, this disclosure includes the nature of the cost elements included in inventory.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.6(b))
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 330
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6386783&loc=d3e4492-108314

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 330
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2126999

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 235
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-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790

Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6386783&loc=d3e4556-108314

Reference 6: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6361739&loc=d3e7789-107766

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 81-1
-Paragraph 69-75
-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 AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
-Paragraph 3, 5-10, 15, 16, 17
-Chapter 4
-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 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Financial Reporting Release (FRR)
-Number 206
-Paragraph b
-Subparagraph i, ii
-Chapter 2

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 43
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-Paragraph 9
-Chapter 3
-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 SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 6
-Subparagraph a
-Article 5

+ 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 FASB
-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-URI http://asc.fasb.org/subtopic&trid=2196929

Reference 2: 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 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 942
-SubTopic 320
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62652-112803

Reference 4: 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 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 5
-Section M

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 2, 12
-Article 5

Reference 7: 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 8: 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.

+ 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

Net Income (Loss) per Share (Tables)

6 Months Ended

Jun. 30, 2012

Net Income (Loss) per Share

Computation of basic and diluted net income (loss) and the weighted-average number of shares used in computing basic and diluted net income (loss) per share

	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands, except for per share amounts)	2012			2011			2012			2011
Numerator:
Net income (loss) — basic	$	(37,120	)	$	(25,045	)	$	47,474		$	(47,712	)
Add: interest and issuance costs related to convertible notes	—			—			3,002			—
Net income (loss) — diluted	(37,120		)	(25,045		)	50,476			(47,712		)

Denominator:
Weighted-average common shares outstanding	91,809			84,263			89,019			83,867
Less: unvested RSAs	(2,640		)	(2,452		)	(2,640		)	(2,452		)
Weighted-average common shares outstanding — basic	89,169			81,811			86,379			81,415
Effect of dilutive equity incentive plans and ESPP	—			—			1,997			—
Effect of dilutive convertible subordinated notes	—			—			6,668			—
Weighted-average common shares outstanding —diluted	89,169			81,811			95,044			81,415

Schedule of anti-dilutive shares

	Three Months Ended June 30,		Six Months Ended June 30,
(in thousands)	2012	2011	2012	2011
Shares issuable under Equity Incentive Plans and ESPP	6,348	5,472	3,801	5,616
Shares issuable upon the conversion of convertible debt	6,668	6,668	—	6,668
Total anti-dilutive securities	13,016	12,140	3,801	12,284

Collaboration Arrangements (Tables)

6 Months Ended

Jun. 30, 2012

Collaboration Arrangements

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

	Through June 30, 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 June 30, 2012
(in thousands)	Upfront Fees		Milestone Payments		Total
GSK Collaborations
LABA 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 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 June 30,				Six Months Ended June 30,
(in thousands)	2012		2011		2012		2011
GSK Collaborations
LABA collaboration	$	907	$	1,270	$	1,814	$	2,540
Strategic alliance agreement	—		684		—		1,369
Strategic alliance—MABA program license	523		502		1,046		1,004
Total revenue	$	1,430	$	2,456	$	2,860	$	4,913

Schedule of revenue recognized under the Astellas collaboration agreement

	Three Months Ended June 30,					Six Months Ended June 30,
(in thousands)	2012		2011			2012			2011
Recognition of deferred revenue	$	—	$	—		$	125,819		$	—
Amortization of deferred revenue	—		3,244			—			6,488
Royalties from net sales of VIBATIV®	—		694			—			1,324
Proceeds from VIBATIV® delivered to Astellas	—		1,171			—			1,171
Cost of VIBATIV® delivered to Astellas	—		(1,177		)	—			(1,177		)
Astellas-labeled product sales allowance	—		—			(150		)	—
Total net revenue	$	—	$	3,932		$	125,669		$	7,806

Available-for-Sale Securities (Tables)

6 Months Ended

Jun. 30, 2012

Available-for-Sale Securities

Schedule of amortized cost and estimated fair values for available-for-sale securities

	June 30, 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	$	30,270	$	1	$	(16	)	$	30,255	$	66,150	$	24	$	—		$	66,174
U.S. government agencies	112,266		4		(74		)	112,196		93,183		9		(17		)	93,175
U.S. corporate notes	60,176		9		(33		)	60,152		2,707		—		(2		)	2,705
U.S. commercial paper	44,993		—		—			44,993		34,973		3		—			34,976
Money market funds	129,891		—		—			129,891		38,721		—		—			38,721
Total	$	377,596	$	14	$	(123	)	$	377,487	$	235,734	$	36	$	(19	)	$	235,751

Schedule of classification of the available-for-sale debt securities

(in thousands)	June 30, 2012		December 31, 2011
Cash and cash equivalents	$	159,053	$	38,721
Short-term investments	134,393		196,137
Long-term marketable securities	83,208		—
Restricted cash	833		893
Total	$	377,487	$	235,751

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 320
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62557-112803

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-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27337-111563

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
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-Paragraph 3
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=6957658&loc=d3e62586-112803

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-Name Accounting Standards Codification
-Topic 320
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-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27161-111563

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-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27357-111563

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-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27290-111563

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 115
-Paragraph 19, 20, 21
-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 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS115-1/124-1
-Paragraph 17
-Subparagraph a, b
-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 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 03-1
-Paragraph 21
-Subparagraph a, b
-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.

+ Details

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2012

Fair Value Measurements

Estimated fair values of the financial assets

	Fair Value Measurements at Reporting Date Using
June 30, 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	$	30,255	$	—	$	—	$	30,255
U.S. government agency securities	75,632		36,564		—		112,196
U.S. corporate notes	57,066		3,086		—		60,152
U.S. commercial paper	—		44,993		—		44,993
Money market funds	129,891		—		—		129,891
Total	$	292,844	$	84,643	$	—	$	377,487

	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)

6 Months Ended

Jun. 30, 2012

Stock-Based Compensation

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

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2012		2011		2012		2011
Research and development	$	3,541	$	3,379	$	7,070	$	6,511
General and administrative	2,438		2,896		5,144		5,305
Total stock-based compensation expense	$	5,979	$	6,275	$	12,214	$	11,816

Summary of equity award activity under the 2004 and 2012 Plan

	Six Months Ended June 30, 2012			Six Months Ended June 30, 2011
	Number of Compensation Awards Granted	Weighted- Average Exercise Price/Fair Value		Number of Compensation Awards Granted	Weighted- Average Exercise Price/Fair Value
2004 and 2012 Plans
Stock options	198,000	$	20.01	307,500	$	24.56
RSUs time-based	528,381	18.45		465,000	25.03
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 June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
*Employee stock options*
Risk-free interest rate	0.74%-1.10		%	1.94%-2.57		%	0.74%-1.17		%	1.94%-2.57		%
Expected term (in years)	5-6			5-6			5-6			5-6
Volatility	55%-60		%	53%-55		%	55%-60		%	49%-55		%
Dividend yield	—		%	—		%	—		%	—		%
Weighted-average estimated fair value of stock options granted	$	11.11		$	13.09		$	10.37		$	12.41

Schedule of weighted-average assumptions used to estimate the fair value of stock purchase plan issuances

	Three Months Ended June 30,						Six Months Ended June 30,

*Employee stock purchase plan issuances*
Risk-free interest rate	0.15%-0.29		%	0.07%-0.54		%	0.15%-0.29		%	0.07%-0.54		%
Expected term (in years)	0.5-2.0			0.5-2.0			0.5-2.0			0.5-2.0
Volatility	55%-64		%	48%-50		%	55%-64		%	48%-50		%
Dividend yield	—		%	—		%	—		%	—		%
Weighted-average estimated fair value of ESPP issuances	$	9.00		$	9.25		$	9.00		$	9.25

- 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		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Numerator
Net income (loss) - basic	$ (37,120)	$ (25,045)	$ 47,474	$ (47,712)
Add: interest and issuance costs related to convertible notes			3,002
Net income (loss) - diluted	$ (37,120)	$ (25,045)	$ 50,476	$ (47,712)
Denominator
Weighted-average common shares outstanding	91,809	84,263	89,019	83,867
Less: unvested RSAs (in shares)	(2,640)	(2,452)	(2,640)	(2,452)
Weighted-average shares used in computing basic net income (loss) per share	89,169	81,811	86,379	81,415
Effect of dilutive equity incentive plans and ESPP (in shares)			1,997
Effect of dilutive convertible subordinated notes			6,668
Weighted-average common shares outstanding - diluted	89,169	81,811	95,044	81,415
Securities that could potentially dilute basic EPS in the future
Anti-dilutive securities (in shares)	13,016	12,140	3,801	12,284
Equity Incentive Plans and ESPP
Securities that could potentially dilute basic EPS in the future
Anti-dilutive securities (in shares)	6,348	5,472	3,801	5,616
Convertible debt
Securities that could potentially dilute basic EPS in the future
Anti-dilutive securities (in shares)	6,668	6,668		6,668

Collaboration Arrangements (Details)	1 Months Ended						3 Months Ended			6 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 ($) shares	Jun. 30, 2012 USD ($) product	Mar. 31, 2012 USD ($)	Jun. 30, 2011 USD ($)	Jun. 30, 2012 USD ($) product	Jun. 30, 2011 USD ($)	Apr. 02, 2012 USD ($) $ / shares shares
Net revenue recognized under the collaboration
Revenue							$ 1,430,000		$ 6,389,000	$ 128,529,000	$ 12,719,000
GSK
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees							41,000,000			41,000,000
Milestone Payments							69,000,000			69,000,000
Total							110,000,000			110,000,000
Net revenue recognized under the collaboration
Revenue							1,430,000		2,456,000	2,860,000	4,913,000
VIBATIV
Information related to collaboration arrangements
Purchases of active pharmaceutical ingredient and other raw materials							4,300,000			4,300,000
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 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			$ 220,000,000
Number of combination products \| product							2			2
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees							$ 10,000,000			$ 10,000,000
Milestone Payments							50,000,000			50,000,000
Total							60,000,000			$ 60,000,000
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 collaboration \| GSK
Information related to collaboration arrangements
Period over which portion of potential milestone payments could be payable to GSK										2 years
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
Net revenue recognized under the collaboration
Revenue							907,000		1,270,000	1,814,000	2,540,000
2004 Strategic alliance \| LAMA \| GSK
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees							5,000,000			5,000,000
Milestone Payments							3,000,000			3,000,000
Total							8,000,000			$ 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			$ 6,000,000
Milestone Payments							16,000,000			16,000,000
Total							22,000,000			22,000,000
Net revenue recognized under the collaboration
Revenue							523,000		502,000	1,046,000	1,004,000
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			$ 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			$ 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			6
2004 Strategic alliance \| MABA containing additional MABA \| GSK \| Maximum
Information related to collaboration arrangements
Potential milestone payments that Company could receive							$ 129,000,000			$ 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			$ 20,000,000
Total							20,000,000			$ 20,000,000
Net revenue recognized under the collaboration
Revenue									684,000		1,369,000
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
Common stock purchase agreement \| Common stock \| GSK
Information related to collaboration arrangements
Agreement to issue stock, number of shares \| shares												10,000,000
Agreement to issue stock, price per share \| $ / shares												$ 21.2887
Agreement to issue stock, total investment in the Company's stock												$ 212,887,000
License, Development and Commercialization Agreement With Astellas \| VIBATIV \| Astellas
Information related to collaboration arrangements
Percentage of royalties payable to Astellas										2.00%
Liability recorded due to termination agreement							150,000			$ 150,000
GSK Upfront License Fees, Milestone Payments and Revenue
Term of royalty payment										10 years
License, Development and Commercialization Agreement with Astellas
Upfront license, milestone and other fees received							$ 191,000,000			$ 191,000,000
Net revenue recognized under the collaboration
Revenue									3,932,000	125,669,000	7,806,000
Recognition of remaining deferred revenue								$ 125,800,000		125,819,000
Amortization of deferred revenue									3,244,000		6,488,000
Royalties from net sales of VIBATIV									694,000		1,324,000
Proceeds from VIBATIV delivered to Astellas									1,171,000		1,171,000
Cost of VIBATIV delivered to Astellas									$ (1,177,000)		$ (1,177,000)
Astellas-labeled product sales allowance										$ (150,000)

Long-Term Debt (Details)	1 Months Ended	3 Months Ended		6 Months Ended
Long-Term Debt (Details)	Jan. 31, 2008 USD ($)	Jun. 30, 2012 USD ($) $ / shares	Jun. 30, 2011 USD ($)	Jun. 30, 2012 USD ($) shares $ / shares	Jun. 30, 2011 USD ($)	Dec. 31, 2011 USD ($)
Information related to long-term obligations
Carrying Value of convertible subordinated notes		$ 172,500,000		$ 172,500,000		$ 172,500,000
Estimated Fair Value of convertible subordinated notes		$ 183,549,000		$ 183,549,000		$ 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%		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		$ 1,000
Initial conversion price of convertible notes into common stock (in dollars per share) \| $ / shares		$ 25.87		$ 25.87
Unamortized debt issuance costs		$ 2,100,000		$ 2,100,000
Amortization expense		$ 200,000	$ 200,000	$ 400,000	$ 400,000
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				20 days
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				30 days

Stock-Based Compensation (Details 3)	1 Months Ended	3 Months Ended		6 Months Ended
Stock-Based Compensation (Details 3)	Feb. 29, 2012 shares	Jun. 30, 2012 item $ / shares	Jun. 30, 2011 $ / shares	Jun. 30, 2012 USD ($) item $ / shares shares	Jun. 30, 2011 $ / shares shares
Stock options
Weighted-average assumptions
Risk-free interest rate, minimum (as a percent)		0.74%	1.94%	0.74%	1.94%
Risk-free interest rate, maximum (as a percent)		1.10%	2.57%	1.17%	2.57%
Weighted-average estimated fair value of ESPP issuances (in dollars per share)		$ 11.11	$ 13.09	$ 10.37	$ 12.41
Stockholders' equity (net capital deficiency):
Shares exercised \| shares				349,538
Shares exercised, Weighted-Average Exercise Price of Outstanding Options (in dollars per share)				$ 7.99
Total cash proceed \| $				$ 2,792,007
Stock options \| Minimum
Weighted-average assumptions
Expected life		5 years	5 years	5 years	5 years
Volatility (as a percent)		55.00%	53.00%	55.00%	49.00%
Stock options \| Maximum
Weighted-average assumptions
Expected life		6 years	6 years	6 years	6 years
Volatility (as a percent)		60.00%	55.00%	60.00%	55.00%
Stock options \| 2004 and 2012 Plans
Compensation Awards
Number of Compensation Awards Granted (in shares) \| shares				198,000	307,500
Weighted-Average Exercise Price (in dollars per share)				$ 20.01	$ 24.56
Employee stock purchase plan issuances
Weighted-average assumptions
Risk-free interest rate, minimum (as a percent)		0.15%	0.07%	0.15%	0.07%
Risk-free interest rate, maximum (as a percent)		0.29%	0.54%	0.29%	0.54%
Weighted-average estimated fair value of ESPP issuances (in dollars per share)		$ 9.00	$ 9.25	$ 9.00	$ 9.25
Employee stock purchase plan issuances \| Minimum
Weighted-average assumptions
Expected life		6 months	6 months	6 months	6 months
Volatility (as a percent)		55.00%	48.00%	55.00%	48.00%
Employee stock purchase plan issuances \| Maximum
Weighted-average assumptions
Expected life		2 years	2 years	2 years	2 years
Volatility (as a percent)		64.00%	50.00%	64.00%	50.00%
RSUs \| 2004 and 2012 Plans \| Time-Based
Compensation Awards
Number of Compensation Awards Granted (in shares) \| shares				528,381	465,000
Weighted-Average Fair Value (in dollars per share)				$ 18.45	$ 25.03
RSAs \| 2004 and 2012 Plans \| 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 and 2012 Plans \| Performance-Contingent
Compensation Awards
Number of Compensation Awards Granted (in shares) \| shares	44,500			44,500	1,290,000
Weighted-Average Fair Value (in dollars per share)				$ 18.11	$ 24.73
Number of possible performance conditions, achievement of which not probable \| item		1		1
Number of possible performance conditions \| item		3		3

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Jun. 30, 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	96,882	85,543

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Net income (loss)	$ (37,120)	$ (25,045)	$ 47,474	$ (47,712)
Other comprehensive income:
Net unrealized loss on available-for-sale securities, net of tax	(100)	(36)	(125)	(41)
Comprehensive income (loss)	$ (37,220)	$ (25,081)	$ 47,349	$ (47,753)

Description of Operations and Summary of Significant Accounting Policies (Details) $ in Thousands	Jun. 30, 2012 USD ($)
Description of operations and summary of significant accounting policies
Inventories of active pharmaceutical ingredient and other raw materials	$ 4,299
VIBATIV
Description of operations and summary of significant accounting policies
Inventories of active pharmaceutical ingredient and other raw materials	$ 4,300

Fair Value Measurements (Details) - USD ($) $ in Thousands	Jun. 30, 2012	Dec. 31, 2011
Estimated fair values of entity's financial assets
Fair value of financial assets	$ 377,487	$ 235,751
Fair value measurements transfer to Level 1 From Level 2	11,200	11,400
U.S. government securities
Estimated fair values of entity's financial assets
Fair value of financial assets	30,255	66,174
U.S. government agency securities
Estimated fair values of entity's financial assets
Fair value of financial assets	112,196	93,175
U.S. corporate notes
Estimated fair values of entity's financial assets
Fair value of financial assets	60,152	2,705
U.S. commercial paper
Estimated fair values of entity's financial assets
Fair value of financial assets	44,993	34,976
Money market funds
Estimated fair values of entity's financial assets
Fair value of financial assets	129,891	38,721
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	292,844	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	30,255	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	75,632	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	57,066	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	129,891	38,721
Recurring basis \| Significant Other Observable Inputs, Level 2
Estimated fair values of entity's financial assets
Fair value of financial assets	84,643	72,250
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	36,564	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	3,086
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	44,993	34,976
Recurring basis \| Total
Estimated fair values of entity's financial assets
Fair value of financial assets	377,487	235,751
Recurring basis \| Total \| U.S. government securities
Estimated fair values of entity's financial assets
Fair value of financial assets	30,255	66,174
Recurring basis \| Total \| U.S. government agency securities
Estimated fair values of entity's financial assets
Fair value of financial assets	112,196	93,175
Recurring basis \| Total \| U.S. corporate notes
Estimated fair values of entity's financial assets
Fair value of financial assets	60,152	2,705
Recurring basis \| Total \| U.S. commercial paper
Estimated fair values of entity's financial assets
Fair value of financial assets	44,993	34,976
Recurring basis \| Total \| Money market funds
Estimated fair values of entity's financial assets
Fair value of financial assets	$ 129,891	$ 38,721

Stock-Based Compensation (Details) - $ / shares	3 Months Ended	6 Months Ended	12 Months Ended	102 Months Ended
Stock-Based Compensation (Details) - $ / shares	Jun. 30, 2012	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2012	May 31, 2012
Employee stock purchase plan
Information related to stock-based compensation
Shares of common stock approved and authorized for issuance	2,025,000	2,025,000		2,025,000
Shares remaining available for issuance	476,977	476,977		476,977
Stock issued during period (in shares)				1,548,023
Cumulative average sale price per share as of the period end (in dollars per share)				$ 10.53
Stock options
Information related to stock-based compensation
Maximum term for stock options	10 years
Vesting term for stock option	4 years
Percentage of stock options to be vested at end of year one	25.00%
Percentage of stock options to be vested monthly over remaining three years	75.00%
2012 Employee Incentive Plan
Information related to stock-based compensation
Shares of common stock approved and authorized for issuance					6,500,000
Reduction in number of shares 2012 plan reserve for each stock option and SAR granted		1
Reduction in number of shares 2012 plan reserve for each stock award other than option and SAR granted		1.45
Shares remaining available for issuance	5,037,262	5,037,262		5,037,262
Prior Plans
Information related to stock-based compensation
Additional number of shares of common stock approved and authorized for issuance			12,667,411

Commitments and Contingencies (Details) - VIBATIV $ in Millions	6 Months Ended
	Jun. 30, 2012 USD ($)
Purchase Obligation
Purchases of active pharmaceutical ingredient and other raw materials	$ 4.3
Maximum
Purchase Obligation
Amount of purchase agreements for pharmaceutical ingredient and raw materials	6.2
Amount of purchase agreements for finished goods inventory	$ 4.2