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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2015	Feb. 16, 2016	Jun. 30, 2015
Document and Entity Information
Entity Registrant Name	Innoviva, Inc.
Entity Central Index Key	0001080014
Document Type	10-K
Document Period End Date	Dec. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 636,988,750
Entity Common Stock, Shares Outstanding		114,117,517
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 159,180	$ 96,800
Short-term marketable securities	28,103	143,698
Related party receivables from collaborative arrangements	26,228	10,550
Prepaid expenses and other current assets	814	1,134
Total current assets	214,325	252,182
Marketable securities	0	42,856
Property and equipment, net	221	324
Capitalized fees paid to a related party, net	194,368	208,191
Other assets	15,158	18,101
Total assets	424,072	521,654
Current liabilities:
Accounts payable	818	0
Payable to Theravance Biopharma, Inc.	0	1,056
Accrued personnel-related expenses	1,659	1,959
Accrued interest payable	7,911	7,551
Other accrued liabilities	2,218	2,108
Deferred revenue	885	1,082
Total current liabilities	13,491	13,756
Convertible subordinated notes, due 2023	255,109	255,109
Non-recourse notes, due 2029	493,162	470,527
Other long-term liabilities	1,856	1,823
Deferred revenue	3,099	3,788
Commitments and contingencies (Notes 3, 6 and 9)
Stockholders' deficit:
Preferred stock: $0.01 par value, 230 shares authorized, no shares issued and outstanding
Common stock: $0.01 par value, 200,000 shares authorized, 114,933 and 116,445 shares issued as of December 31, 2015 and 2014, respectively	1,149	1,164
Treasury stock: 150 shares as of December 31, 2015 and 2014	(3,263)	(3,263)
Additional paid-in capital	1,351,898	1,452,504
Accumulated other comprehensive loss	(2)	(87)
Accumulated deficit	(1,692,427)	(1,673,667)
Total stockholders' deficit	(342,645)	(223,349)
Total liabilities and stockholders' deficit	$ 424,072	$ 521,654

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2015	Dec. 31, 2014
CONDENSED CONSOLIDATED BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	230	230
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	200,000	200,000
Common stock, shares issued	114,933	116,445
Treasury Stock, Shares	150	150

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Revenue:
Royalty revenue from a related party, net of amortization for capitalized fees paid to a related party of $13,823, $11,066 and $743 in the year ended December 31, 2015, 2014 and 2013	$ 53,064	$ 7,351	$ 1,202
Revenue from collaborative arrangements from a related party, net	885	1,082	3,330
Total net revenue	53,949	8,433	4,532
Operating expenses:
Research and development	2,619	7,498	9,038
General and administrative	19,750	34,864	24,289
Total operating expenses	22,369	42,362	33,327
Income (loss) from operations	31,580	(33,929)	(28,795)
Other income (expense), net	1,120	(3,272)	6,732
Interest income	343	563	778
Interest expense	(51,803)	(36,892)	(9,348)
Loss from continuing operations before income taxes	(18,760)	(73,530)	(30,633)
Income tax expense (benefit)	0	0	0
Loss from continuing operations, net of tax	(18,760)	(73,530)	(30,633)
Loss from discontinued operations (Notes 1 and 12)	0	(94,934)	(140,068)
Net loss	$ (18,760)	$ (168,464)	$ (170,701)
Basic and diluted net loss per share:
Continuing operations, net of tax (in dollars per share)	$ (0.16)	$ (0.66)	$ (0.30)
Discontinued operations (in dollars per share)	0.00	(0.84)	(1.37)
Basic and diluted net loss per share (in dollars per share)	(0.16)	(1.50)	(1.67)
Cash dividend declared per common share (in dollars per share)	$ 0.75	$ 0.50	$ 0.00
Shares used to compute basic and diluted net loss per share	115,372	112,059	102,425

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Amortization of capitalized fees paid to a related party	$ 13,823	$ 11,066	$ 743

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net loss	$ (18,760)	$ (168,464)	$ (170,701)
Other comprehensive income:
Unrealized gain (loss) on marketable securities, net	1,305	(4,001)	63
Less: Realized gain on marketable securities, net	(1,220)	0	0
Add: Reclassification adjustments for other-than temporary impairment loss included in net loss	0	3,752	0
Comprehensive loss	$ (18,675)	$ (168,713)	$ (170,638)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Treasury Stock	Total
Balance at Dec. 31, 2012	$ 984	$ 1,488,447	$ 99	$ (1,334,502)		$ 155,028
Balance (in shares) at Dec. 31, 2012	98,379
Increase (Decrease) in Stockholders' Equity
Exercise of stock options, and issuance of common stock units, stock awards and purchase plan	$ 29	26,962				26,991
Exercise of stock options, and issuance of common stock units, stock awards and purchase plan (in shares)	2,964
Issuance of common stock in private placement to a related party	$ 35	125,995				126,030
Issuance of common stock in private placement to a related party (in shares)	3,505
Stock based compensation		25,858				25,858
Conversion of convertible subordinated notes	$ 67	171,164				171,231
Conversion of convertible subordinated notes (in shares)	6,668
Capped call options associated with convertible subordinated notes due 2023		(35,378)				(35,378)
Net loss				(170,701)		(170,701)
Other comprehensive income (loss)			63			63
Balance at Dec. 31, 2013	$ 1,115	1,803,048	162	(1,505,203)		299,122
Balance (in shares) at Dec. 31, 2013	111,516
Increase (Decrease) in Stockholders' Equity
Exercise of stock options, and issuance of common stock units, stock awards and purchase plan	$ 17	10,813				10,830
Exercise of stock options, and issuance of common stock units, stock awards and purchase plan (in shares)	1,744
Issuance of common stock in private placement to a related party	$ 17	38,078				38,095
Issuance of common stock in private placement to a related party (in shares)	1,665
Stock based compensation		27,485				27,485
Conversion of convertible subordinated notes	$ 15	31,756				31,771
Conversion of convertible subordinated notes (in shares)	1,520
Repurchase of common stock		3,263			$ (3,263)
Repurchase of common stock (in shares)					(150)
Guarantee issued in connection with distribution to Theravance Biopharma, Inc. related to lease agreements		(1,300)				(1,300)
Distribution to Theravance Biopharma, Inc.		(402,787)				(402,787)
Cash dividends declared, $0.50 and $0.75 per common share		(57,852)				(57,852)
Net loss				(168,464)		(168,464)
Other comprehensive income (loss)			(249)			(249)
Balance at Dec. 31, 2014	$ 1,164	1,452,504	(87)	(1,673,667)	$ (3,263)	(223,349)
Balance (in shares) at Dec. 31, 2014	116,445				(150)
Increase (Decrease) in Stockholders' Equity
Exercise of stock options, and issuance of common stock units, stock awards and purchase plan	$ 8	(488)				(480)
Exercise of stock options, and issuance of common stock units, stock awards and purchase plan (in shares)	740
Issuance of common stock in private placement to a related party	$ 4	6,524				6,528
Issuance of common stock in private placement to a related party (in shares)	424
Stock based compensation		6,873				6,873
Repurchase of common stock	$ (27)	(25,609)				(25,636)
Repurchase of common stock (in shares)	(2,676)
Cash dividends declared, $0.50 and $0.75 per common share		(87,906)				(87,906)
Net loss				(18,760)		(18,760)
Other comprehensive income (loss)			85			85
Balance at Dec. 31, 2015	$ 1,149	$ 1,351,898	$ (2)	$ (1,692,427)	$ (3,263)	$ (342,645)
Balance (in shares) at Dec. 31, 2015	114,933				(150)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - $ / shares						3 Months Ended								12 Months Ended
	Jul. 24, 2015	Apr. 24, 2015	Feb. 20, 2015	Oct. 16, 2014	Jul. 25, 2014	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Consolidated Statements of Stockholders' Equity (Deficit)
Cash dividend declared per common share (in dollars per share)	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0	$ 0	$ 0.75	$ 0.50	$ 0.00

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Cash flows from operating activities
Net loss	$ (18,760)	$ (168,464)	$ (170,701)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	13,933	12,175	3,458
Stock-based compensation	6,873	27,390	25,687
Amortization of premium on investments	583	1,742	3,794
Interest added to the principal balance of the non-recourse term notes due 2029	22,635	20,527	0
Realized gain on sale of marketable securities, net	(1,220)	0	0
Amortization of debt issuance costs	2,943	2,408	951
Other-than-temporary impairment loss on marketable securities	0	3,752	0
Change in fair value of capped-call derivative assets	0	0	1,422
Other non-cash items	(3)	(2)	17
Changes in operating assets and liabilities:
Accounts receivable	0	74	702
Receivables from collaborative arrangements	(15,678)	(7,371)	(2,117)
Prepaid expenses and other current assets	320	(338)	36
Inventories	0	(1,908)	(3,100)
Other assets	0	1,549	(578)
Accounts payable	818	(7,695)	1,613
Payable to Theravance Biopharma, Inc., net	(1,056)	(15,916)	0
Accrued personnel-related expenses, accrued clinical and development expenses, and other accrued liabilities	(725)	(491)	5,850
Accrued interest payable	360	4,751	428
Other long-term liabilities	(7)	275	(299)
Deferred revenue	(885)	(3,181)	3,235
Net cash provided by (used in) operating activities	10,131	(130,723)	(129,602)
Cash flows from investing activities
Purchases of property and equipment	(7)	(689)	(2,734)
Purchases of marketable securities	(86,523)	(276,914)	(410,407)
Maturities of marketable securities	137,621	339,359	255,861
Sales of marketable securities	108,077	7,211	22,600
Capitalized fees paid to a related party	0	(135,000)	(85,000)
Change in restricted cash	0	833	0
Payments received on notes receivable	0	140	100
Net cash provided by (used in) investing activities	159,168	(65,060)	(219,580)
Cash flows from financing activities
Proceeds from issuances of common stock, net	6,048	48,925	153,021
Payments of cash dividends to stockholders	(87,331)	(56,988)	0
Repurchase of common stock	(25,636)	0	0
Cash and cash equivalents contributed to Theravance Biopharma, Inc.	0	(277,541)	0
Purchase of capped-call options	0	0	(36,800)
Proceeds from issuances of note payable, net of debt issuance costs	0	434,677	281,622
Net cash (used in) provided by financing activities	(106,919)	149,073	397,843
Net increase (decrease) in cash and cash equivalents	62,380	(46,710)	48,661
Cash and cash equivalents at beginning of period	96,800	143,510	94,849
Cash and cash equivalents at end of period	159,180	96,800	143,510
Supplemental disclosure of cash flow information
Cash paid for interest	25,863	9,208	7,970
Supplemental disclosure of noncash information
Contribution of net assets, excluding cash and cash equivalents to Theravance Biopharma, Inc.	0	125,337	0
Conversion of convertible subordinated notes into common stock	$ 0	$ 32,391	$ 172,499

Description of Operations and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2015

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

Innoviva, Inc. (formerly known as Theravance, Inc. and referred to as "Innoviva", the "Company", or "we" and other similar pronouns) is focused on bringing compelling new medicines to patients in areas of unmet need by leveraging its significant expertise in the development, commercialization and financial management of bio-pharmaceuticals. Innoviva's portfolio is anchored by the respiratory assets partnered with Glaxo Group Limited ("GSK"), including RELVAR®/BREO® ELLIPTA® (fluticasone furoate/ vilanterol, "FF/VI") and ANORO® ELLIPTA® (umeclidinium bromide/ vilanterol, "UMEC/VI"). Under the Long-Acting Beta2 Agonist ("LABA") Collaboration Agreement and the Strategic Alliance Agreement with GSK (referred to herein as the "GSK Agreements"), Innoviva is eligible to receive the associated royalty revenues from RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA®. Innoviva is also entitled to 15% of any future payments made by GSK under its agreements originally entered into with us, and since assigned to Theravance Respiratory Company, LLC ("TRC"), relating to the combination FF/UMEC/VI and the Bifunctional Muscarinic Antagonist- Beta2 Agonist ("MABA") program, as monotherapy and in combination with other therapeutically active components, such as an inhaled corticosteroid, and any other product or combination of products that may be discovered and developed in the future under the LABA Collaboration Agreement ("LABA Collaboration"), which has been assigned to TRC other than RELVAR®/BREO®ELLIPTA® and ANORO® ELLIPTA®.

Business Separation

On June 1, 2014, we separated our biopharmaceutical research and drug development operations from our late-stage partnered respiratory assets by transferring our research and drug development operations into our then wholly- owned subsidiary, Theravance Biopharma, Inc. ("Theravance Biopharma"). We contributed $393.0 million of cash, cash equivalents and marketable securities to Theravance Biopharma and all outstanding shares of Theravance Biopharma were then distributed to Innoviva stockholders as a pro-rata dividend distribution on June 2, 2014 by issuing one ordinary share of Theravance Biopharma for every 3.5 shares held of our common stock to stockholders of record on May 15, 2014 (the "Spin-Off"). The Spin-Off resulted in Theravance Biopharma operating as an independent, publicly traded company.

The results of operations for the former research and drug development operations conducted by us and by Theravance Biopharma until June 1, 2014 are included as part of this report as discontinued operations. Refer to Notes 11 and 12, "Spin-Off of Theravance Biopharma, Inc.," and "Discontinued Operations" for further information.

Principles of Consolidation

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

Use of Management's Estimates

The preparation of consolidated financial statements in conformity with U.S. Generally Accepted Accounting Principles ("GAAP") requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. Management evaluates its significant accounting policies and estimates on an ongoing basis. We base our estimates on historical experience and other relevant assumptions that we believe to be reasonable under the circumstances. These estimates also form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources.

Certain Risks and Concentrations

Our financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and marketable securities. Although we deposit our cash with multiple financial institutions, our deposits, at times, may exceed federally insured limits. Refer to "Segment Reporting" below for concentrations with respect to revenues and geographic locations.

Segment Reporting

We operate in a single segment, which is to provide capital return to stockholders by maximizing the potential value of our respiratory assets partnered with GSK. Revenues are generated from our collaborative arrangements and royalty payment from GSK, located in Great Britain. Our facilities are located within the United States.

Variable Interest Entities

We evaluate our ownership, contractual and other interest in entities to determine if they are variable-interest entities ("VIE"), whether we have a variable interest in those entities and the nature and extent of those interests. Based on our evaluations, if we determine we are the primary beneficiary of such VIEs, we consolidate such entities into our financial statements. We consolidate the financial results of TRC, which we have determined to be a VIE, because we have the power to direct the economically significant activities of TRC and the obligation to absorb losses of, or the right to receive benefits from, TRC. The financial position and results of operations of TRC are not material for the periods presented.

Cash and Cash Equivalents

We consider all highly liquid investments purchased with a maturity of three months or less on the date of purchase to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value.

Investments in Marketable Securities

We invest in short-term investments and marketable securities, primarily corporate notes, government, government agency, and municipal bonds. We limit the amount of credit exposure with any one issuer, industry or geographic area for investments other than instruments backed by the U.S. federal government. We classify our marketable securities as available-for-sale securities and report them at fair value in cash equivalents, short-term investments or marketable securities on the consolidated balance sheets with related unrealized gains and losses included as a component of stockholders' equity (deficit). The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income on the consolidated statements of operations. Realized gains and losses, if any, on available-for-sale securities are included in interest income. The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income.

We regularly review all of our investments for other-than-temporary declines in estimated fair value. Our 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 we have the intent to sell the securities and whether it is more likely than not that we will be required to sell the securities before the recovery of their amortized cost basis. When we determine that the decline in estimated fair value of an investment is below the amortized cost basis and the decline is other-than-temporary, we reduce the carrying value of the security and record a loss for the amount of such decline to other income (expense), net.

Fair Value of Financial Instruments

We define 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.

Our valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. We classify these inputs into the following hierarchy:

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

Level 2—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—Unobservable inputs and little, if any, market activity for the assets.

Financial instruments include cash equivalents, marketable securities, accounts receivable, receivables from collaborative arrangements, accounts payable, and accrued liabilities. Cash equivalents and marketable securities are carried at estimated fair value. The carrying value of accounts receivable, receivables from collaborative arrangements, accounts payable, and accrued liabilities approximate their estimated fair value due to the relatively short-term nature of these instruments.

Property and Equipment

All property, equipment and leasehold improvements prior to the Spin-Off were related to our former research and drug development operations and thus, were contributed to Theravance Biopharma in connection with the Spin-Off.

Property and equipment as of December 31, 2015 and 2014, which consisted of computer software, amounted to $0.2 million and $0.3 million, respectively.

Property, equipment and leasehold improvements are stated at cost and depreciated using the straight-line method as follows:

Leasehold improvements		Shorter of remaining lease terms or useful life
Equipment, furniture and fixtures		5 - 7 years
Software and computer equipment		3 years

Depreciation expense for the years ended December 31, 2015, 2014 and 2013 was $0.1 million, $1.1 million and $2.7 million. Depreciation expense for property and equipment used by our former research and drug development operations is classified within discontinued operations in the consolidated statements of operations. The change in accumulated depreciation is net of asset retirements.

Capitalized Software

We capitalize certain costs related to direct material and service costs for software obtained for internal use. Capitalized software costs are depreciated over three years.

Capitalized Fees paid to a Related Party

We capitalize fees paid to licensors related to agreements for approved products or commercialized products. We capitalize these fees as capitalized fees paid to a related party ("Capitalized Fees") and amortize these Capitalized Fees on a straight-line basis over their estimated useful lives upon the commercial launch of the product, which has been shortly after regulatory approval of such product. The estimated useful lives of these Capitalized Fees are based on a country-by-country and product-by-product basis, as the later of the expiration or termination of the last patent right covering the compound in such product in such country and 15 years from first commercial sale of such product in such country, unless the agreement is terminated earlier. Consistent with our policy for classification of costs under the research and development collaborative arrangements, the amortization of these Capitalized Fees are recognized as a reduction of royalty revenue. We review our Capitalized Fees for impairment when events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. The recoverability of Capitalized Fees is measured by comparing the asset's carrying amount to the expected undiscounted future cash flows that the asset is expected to generate. The determination of recoverability typically requires various estimates and assumptions, including estimating the useful life over which cash flows will occur, their amount, and the asset's residual value, if any. We derive the required cash flow estimates from near-term forecasted product sales and long-term projected sales in the corresponding market.

Revenue Recognition

Revenue is recognized when the four basic criteria of revenue recognition are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. Where the revenue recognition criteria are not met, we defer the recognition of revenue by recording deferred revenue until such time that all criteria are met.

Collaborative Arrangements and Multiple-Element Arrangements

Revenue from nonrefundable, up-front license or technology access payments under license and collaborative arrangements that are not dependent on any future performance by us is recognized when such amounts are earned. If we have continuing obligations to perform under the arrangement, such fees are recognized over the estimated period of continuing performance obligation.

Our arrangements can include multiple elements which may consist of license and development agreements. When multiple-element arrangements exist, we evaluate whether these individual deliverables should be accounted for as separate units of accounting or one single unit of accounting. For new or materially amended multiple element arrangements, we identify the deliverables at the inception of the arrangement and each deliverable within a multiple deliverable revenue arrangement is accounted for as a separate unit of accounting if both of the following criteria are met: (1) the delivered item or items have value to the customer on a standalone basis and (2) for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. We allocate revenue to each non-contingent element based on the relative selling price of each element. When applying the relative selling price method, we determine the selling price for each deliverable using vendor-specific objective evidence ("VSOE") of selling price, if it exists, or third-party evidence ("TPE") of selling price, if it exists. If neither VSOE nor TPE of selling price exist for a deliverable, we use the best estimated selling price for that deliverable. Revenue allocated to each element is then recognized based on when the basic four revenue recognition criteria are met for each element.

For multiple-element arrangements entered into prior to January 1, 2011, we determined the delivered items under our collaborative arrangements did not meet the criteria to be considered separate accounting units for the purposes of revenue recognition. As a result, we recognized revenue from non-refundable, upfront fees and development contingent payments in the same manner as the final deliverable, which is ratably over the expected term of our performance of research and development services under the agreements. These upfront or contingent payments received, pending recognition as revenue, are recorded as deferred revenue and are classified as a short-term or long-term liability on the consolidated balance sheets and recognized over the estimated period of performance. We periodically review the estimated performance periods of our contracts based on the progress of our programs.

Where a portion of non-refundable upfront fees or other payments received are allocated to continuing performance obligations under the terms of a collaborative arrangement, they are recorded as deferred revenue and recognized as revenue, or as an accrued liability and recognized as a reduction of research and development expenses ratably over the term of our estimated performance period under the agreement. We determine the estimated performance periods, and they are periodically reviewed based on the progress of the related program. The effect of any change made to an estimated performance period and, therefore revenue recognized, would occur on a prospective basis in the period that the change was made.

Under certain collaborative arrangements, we have been reimbursed for a portion of our research and development expenses. These reimbursements have been reflected as a reduction of research and development expense in our consolidated statements of operations, as we do not consider performing research and development services to be a part of our ongoing and central operations. Therefore, the reimbursement of research and developmental services and any amounts allocated to our research and development services are recorded as a reduction of research and development expense.

Amounts deferred under a collaborative arrangement in which the performance obligations are terminated will result in an immediate recognition of any remaining deferred revenue and accrued liability in the period that termination occurred, provided that there are no remaining performance obligations.

We account for contingent payments in accordance with FASB Subtopic ASC 605-28 "Revenue Recognition—Milestone Method." We recognize revenue from milestone payments when (i) the milestone event is substantive and its achievability was not reasonably assured at the inception of the agreement and (ii) we do not have ongoing performance obligations related to the achievement of the milestone. Milestone payments are considered substantive if all of the following conditions are met: the milestone payment (a) is commensurate with either our performance to achieve the milestone or the enhancement of the value of the delivered item or items as a result of a specific outcome resulting from our performance to achieve the milestone, (b) relates solely to past performance, and (c) is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement.

Under our collaborative arrangements with GSK, royalty revenue earned is reduced by amortization expense resulting from the fees paid to GSK, which were recognized as capitalized fees paid to a related party. When amortization expense exceeds amounts recognized for royalty revenues from GSK, negative revenue would be reported in our consolidated statements of operations.

Royalties

We recognize royalty revenue on licensee net sales of products with respect to which we have contractual royalty rights in the period in which the royalties are earned and reported to us and collectability is reasonably assured. Royalties are recognized net of amortization of capitalized fees associated with any approval and launch milestone payments made to GSK.

Product Revenues

We currently have no product revenues following the Spin-Off.

Prior to the Spin-Off, we recognized revenues from product sales when there was persuasive evidence that an arrangement existed, title and risk of loss transferred, the price was fixed and determinable, and collectability was reasonably assured. Product sales were recognized net of estimated allowances, discounts, sales returns, chargebacks and rebates. Such amounts are presented within discontinued operations in the consolidated statements of operations.

Allowance for Doubtful Accounts

We maintain a policy to record allowances for potentially doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. As of December 31, 2015, there were no allowances for doubtful accounts and we have not had any write-offs historically.

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 primarily of salaries and benefits. Prior to the Spin-Off, research and development costs also included laboratory supplies and facility costs, and fees paid to third parties that conduct certain research and development activities on behalf of us, net of certain external research and development costs reimbursed under collaborative arrangements, which are classified within discontinued operations in the consolidated statements of operations.

Fair Value of Stock-Based Compensation Awards

We use the Black-Scholes-Merton option pricing model to estimate the fair value of options granted under our equity incentive plans and rights to acquire stock granted under our employee stock purchase plan ("ESPP"). 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. We use the "simplified" method as described in Staff Accounting Bulletin No. 107, "Share-Based Payment," for the expected option term because the usage of its historical option exercise data is limited due to post-IPO exercise restrictions. Beginning April 1, 2011, we used our historical volatility to estimate expected stock price volatility. Prior to April 1, 2011, we used peer company price volatility to estimate expected stock price volatility due to our limited historical common stock price volatility since our initial public offering in the year ended December 31, 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 was reduced for estimated forfeitures at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differed from those estimates. Our estimated annual forfeiture rates for stock options, RSUs and RSAs are based on our 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 estimated fair value of performance-contingent RSUs and RSAs is expensed using an accelerated method over the term of the award once we have determined that it is probable that performance milestones will be achieved. Compensation expense for RSUs and RSAs that contain performance conditions is based on the grant date fair value of the award. Compensation expense is recorded over the requisite service period based on management's best estimate as to whether it is probable that the shares awarded are expected to vest. We assess the probability of the performance milestones being met on a continuous basis.

Compensation expense for purchases under the ESPP is recognized based on the fair value of the common stock on the date of offering, less the purchase discount percentage provided for in the plan.

We have not recognized, any income tax benefit related to employee stock-based compensation expense as a result of the full valuation allowance on our deferred tax assets including deferred tax assets related to our net operating loss carryforwards.

Amortization of Debt Issuance Costs from Non-recourse Notes Payable, due 2029

In April 2014, we entered into certain note purchase agreements relating to the private placement of $450.0 million aggregate principal amount of non-recourse 9% fixed rate term notes due 2029 (the "2029 Notes") issued by our wholly-owned subsidiary.

We incurred approximately $15.3 million in transaction costs in connection with issuance of 2029 Notes, which we amortize to interest expense over the estimated life of the 2029 Notes based on the effective interest method. Since the principal and interest payments on the 2029 Notes are based on royalties from product sales, which will vary from quarter to quarter, the 2029 Notes may be repaid prior to the final maturity date in 2029. We continue to assess, on an ongoing basis, our estimates on royalties from products sales as it relates to its impact on payments of principal and interest on the 2029 Notes. To the extent that the interest or principal payments are greater or less than our initial estimates or the timing of such payments is materially different than our original estimates, we prospectively adjust the amortization of the debt issuance costs.

Income Taxes

We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

None of our currently unrecognized tax benefits would affect our effective income tax rate if recognized, due to the valuation allowance that currently offsets our deferred tax assets. We do not anticipate the total amount of unrecognized income tax benefits relating to uncertain tax positions existing as of December 31, 2015 will significantly increase or decrease in the next 12 months.

We assess all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position's sustainability and is measured at the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and we will determine whether: the factors underlying the sustainability assertion have changed and whether the amount of the recognized tax benefit is still appropriate.

The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available.

In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes, which eliminates the requirement for organizations to present deferred tax liabilities and assets as current and noncurrent in a classified balance sheet. The standard requires us to classify all deferred tax assets and liabilities as noncurrent. We adopted this standard in December 2015. This adoption did not have a material impact on our consolidated financial statements.

Comprehensive Loss

Comprehensive loss is comprised of net loss and other comprehensive income (loss). Other comprehensive income (loss) consists of changes in unrealized and realized gains and losses on our marketable securities, net of tax.

Related Parties

GSK owned 27.9% of our outstanding common stock as of December 31, 2015. Transactions with GSK are described in Note 3, "Collaborative Arrangements".

Prior to the Spin-Off, Robert V. Gunderson, Jr. was one of our directors. We have engaged Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, of which Mr. Gunderson is a partner, as our primary legal counsel. Fees incurred in the ordinary course of business were, $1.3 million in the year ended December 31, 2014 and $3.2 million in the year ended December 31, 2013. As Mr. Gunderson was not one of our directors for the year ended December 31, 2015, he is no longer considered a related party.

Recently Issued Accounting Pronouncements Not Yet Adopted

In January 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, which provides guidance for the recognition, measurement, presentation, and disclosure of financial assets and liabilities. This ASU will be effective for us beginning in January 1, 2018. We are evaluating the effects of the adoption of this ASU to our consolidated financial statements.

In April 2015, the FASB issued ASU 2015-03, Interest—Imputation of Interest, to simplify the presentation of debt issuance costs. This standard amends existing guidance to require the presentation of debt issuance costs associated with term loans in the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred charge. It will be effective for us on January 1, 2016, with early adoption permitted. We plan to adopt ASU 2015-03 on January 1, 2016. Upon adoption of ASU 2015-03, we will apply the guidance retrospectively to all periods presented and classify our debt issuance costs, which are currently included in other assets in the consolidated financial statements, as a deduction to our long-term debt.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"), which converges the FASB and the International Accounting Standards Board standards on revenue recognition. Areas of revenue recognition that will be affected include, but are not limited to, transfer of control, variable consideration, allocation of transfer pricing, licenses, time value of money, contract costs and disclosures. This guidance is effective for the fiscal years and interim reporting periods beginning after December 15, 2017 (as amended through ASU 2015-14 issued in August 2015), at which time we may adopt the new standard under the full retrospective method or the modified retrospective method. Early adoption is permitted. We are currently evaluating the impact of adopting ASU 2014-09 on our consolidated financial statements and related disclosures.

Net Loss per Share

12 Months Ended

Dec. 31, 2015

Net Loss per Share

Net Loss per Share

2. Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted- average number of shares of common stock outstanding, less RSAs subject to forfeiture. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares of common stock outstanding, less RSAs subject to forfeiture, plus all additional common shares that would have been outstanding, assuming dilutive potential common shares had been issued for other dilutive securities.

For the years ended December 31, 2015, 2014 and 2013, diluted and basic net loss per common share was identical since potential common shares were excluded from the calculation, as their effect was anti-dilutive.

Anti-dilutive Securities

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

	Year Ended December 31,
	2015(1)		2014		2013
Outstanding options and awards granted under equity incentive plan and employee stock purchase plan		5,290		6,239		4,095
Unvested RSAs		1,644		1,772		2,364
Shares issuable upon conversion of convertible subordinated notes		12,904		12,329		2,780

Total		19,838		20,340		9,239

(1)

Includes 4.1 million options, 0.4 million restricted stock units, and 1.0 million unvested RSAs retained by former employees who were transferred to Theravance Biopharma in connection with the Spin-Off during the year ended December 31, 2015. Subsequent to the Spin-Off, stock-based compensation expense associated with the awards held by Theravance Biopharma employees granted prior to the Spin-Off is recognized by Theravance Biopharma.

Collaborative Arrangements

12 Months Ended

Dec. 31, 2015

Collaborative Arrangements

Collaborative Arrangements

3. Collaborative Arrangements

Net Revenue from Collaborative Arrangements

Net revenue from collaborative arrangements from continuing operations relates to our collaborative arrangement with GSK. Net revenue from other collaborative arrangements is reflected as discontinued operations in the consolidated statements of operations. Refer to Notes 1, 11 and 12, "Description of Operations and Summary of Significant Accounting Policies," "Spin-Off of Theravance Biopharma, Inc." and "Discontinued Operations" for further information.

Net revenue recognized under our GSK Agreements was as follows (in thousands):

	Year Ended December 31,
	2015			2014			2013
Royalties from a related party	$	66,887		$	18,417		$	1,945
Less: amortization of capitalized fees paid to a related party		(13,823	)		(11,066	)		(743	)

Royalty revenue		53,064			7,351			1,202
LABA collaboration(1)		—			—			1,815
Strategic alliance—MABA program		885			1,082			1,515

Total net revenue from GSK	$	53,949		$	8,433		$	4,532


(1)	Deferred revenue under this agreement was fully recognized in the year ended December 31, 2013.

LABA Collaboration

In November 2002, we entered into our LABA Collaboration Agreement with GSK to develop and commercialize once-daily LABA products for the treatment of chronic obstructive pulmonary disease ("COPD") and asthma.

As a result of the launch and approval of RELVAR®/BREO® ELLIPTA® and ANORO® ELLIPTA® in the U.S., Japan and Europe, we paid milestone fees to GSK totaling $220.0 million during the year ended December 31, 2014. Although we have no further milestone payment obligations to GSK pursuant to the LABA Collaboration Agreement, we continue to have ongoing development and commercialization activities under the GSK Agreements that are expected to continue over the life of the agreements. The milestone fees paid to GSK were recognized as capitalized fees paid to a related party, which are being amortized over their estimated useful lives commencing upon the commercial launch of the product. The amortization expense is recorded as a reduction to the royalties from GSK.

We are entitled to receive annual royalties from GSK on sales of RELVAR®/BREO® ELLIPTA® as follows: 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 ANORO® ELLIPTA®, royalties are upward tiering and range from 6.5% to 10%.

2004 Strategic Alliance

In March 2004, we entered into the Strategic Alliance Agreement with GSK where GSK received an option to license exclusive development and commercialization rights to product candidates from certain of our discovery programs on pre-determined terms and on an exclusive, worldwide basis. In 2005, GSK licensed our MABA program for the treatment of COPD, and in October 2011, we and GSK expanded the MABA program by adding six additional Innoviva-discovered preclinical MABA compounds (the "Additional MABAs"). The development program is fully funded by GSK and is still currently in early stages of Phase II trials. As a result of the transactions effected by the Spin-Off, we are only entitled to receive 15% of any contingent payments and royalties payable by GSK from sales of FF/UMEC/VI (and MABA, and MABA/FF) while Theravance Biopharma receives 85% of those same payments.

Purchases of Common Stock under the Company's Governance Agreement and Common Stock Purchase Agreements with GSK

In the year ended December 31, 2015, GSK purchased approximately 424,081 shares of our common stock pursuant to its periodic "top-up" rights under our Amended and Restated Governance Agreement, dated as of June 4, 2004, as amended, among us, GSK and certain GSK affiliates, for an aggregate purchase price of approximately $6.5 million.

GSK Contingent Payments and Revenue

The potential future contingent payments receivable related to the MABA program of $363.0 million are not deemed substantive milestones 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. The Company is entitled to 15% of any milestone payments.

Reimbursement of Research and Development Costs

Reimbursement of research and development costs from continuing operations is solely related to the GSK Agreements. Under the GSK Agreements, we are entitled to reimbursement of certain research and development costs. For the years ended December 31, 2015, 2014 and 2013, research and development costs reimbursed from GSK was zero, $0.1 million and $0.5 million. Reimbursement of research and development costs from other collaborative arrangements has been reflected as discontinued operations in the consolidated statements of operations. Refer to Notes 1, 11 and 12, "Description of Operations and Summary of Significant Accounting Policies," "Spin-Off of Theravance Biopharma, Inc." and "Discontinued Operations" for further information.

Available-for-Sale Securities and Fair Value Measurements

12 Months Ended

Dec. 31, 2015

Available-for-Sale Securities and Fair Value Measurements

Available-for-Sale Securities and Fair Value Measurements

4. Available-for-Sale Securities and Fair Value Measurements

Available-for Sale Securities

The classification of available-for-sale securities in the consolidated balance sheets is as follows (in thousands):

	December 31,
	2015		2014
Cash and cash equivalents	$	148,673	$	95,090
Short-term marketable securities		28,103		143,698
Marketable securities		—		42,856

Total	$	176,776	$	281,644

The estimated fair value of available-for-sale securities is based on quoted market prices for these or similar investments that were based on prices obtained from a commercial pricing service. Available-for-sale securities are summarized below (in thousands):

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Other Than Temporary Impairment Loss		Estimated Fair Value
U.S. government agencies	$	14,406	$	—	$	(1	)	$	—	$	14,405
U.S. corporate notes		2,702		—		(1	)		—		2,701
U.S. commercial paper		10,997		—		—			—		10,997
Money market funds		148,673		—		—			—		148,673

Total	$	176,778	$	—	$	(2	)	$	—	$	176,776

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Other Than Temporary Impairment Loss			Estimated Fair Value
U.S. government securities	$	30,019	$	24	$	—		$	—		$	30,043
U.S. government agencies		34,756		6		(12	)		—			34,750
U.S. corporate notes		80,880		5		(110	)		—			80,775
U.S. commercial paper		34,469		—		—			—			34,469
Ordinary shares of Theravance Biopharma		10,269		—		—			(3,752	)		6,517
Money market funds		95,090		—		—			—			95,090

Total	$	285,483	$	35	$	(122	)	$	(3,752	)	$	281,644

We determined that the unrealized loss on our Theravance Biopharma equity securities as of December 31, 2014 was other-than-temporary. Therefore, we recognized a loss of $3.8 million on these equity securities, which was charged to other income (expense), net on the consolidated statements of operations.

As of December 31, 2015, all of the available-for-sale debt securities had contractual maturities within one year and the average duration of debt securities was approximately one month. We do not intend to sell the investments in debt that are in an unrealized loss position, and it is unlikely that we will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. We have determined that the gross unrealized losses on our available-for-sale debt securities as of December 31, 2015 were temporary in nature. All available-for-sale debt securities with unrealized losses as of December 31, 2015 have been in a loss position for less than twelve months.

During the year ended December 31, 2015, we recognized a gain of $1.2 million from the sale of all of the ordinary shares of Theravance Biopharma that we held as of December 31, 2014, which is included in other income (expense), net in the condensed consolidated statement of operations. In addition, we sold other available-for-sale securities totaling $100.4 million, and the related realized gains and losses were not significant during year ended December 31, 2015

During the years ended December 31, 2014 and 2013, we sold marketable securities totaling $7.2 million and $22.6 million, and the related realized gains and losses were not significant in either of these periods.

Fair Value Measurements

Our available-for-sale securities are measured at fair value on a recurring basis and our debt is carried at the amortized cost basis. The estimated fair values were as follows:

	Estimated Fair Value Measurements as of December 31, 2015 Using:
	Quoted Price in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Types of Instruments (In thousands)	Level 1		Level 2		Level 3		Total
Assets
U.S. government agencies	$	—	$	14,405	$	—	$	14,405
Corporate notes		—		2,701		—		2,701
Commercial paper		—		10,997		—		10,997
Money market funds		148,673		—		—		148,673

Total assets measured as of estimated fair value	$	148,673	$	28,103	$	—	$	176,776


Liabilities
Convertible subordinated notes due 2023	$	—	$	189,100	$	—	$	189,100
Non-recourse notes due 2029		—		470,970		—		470,970

Total fair value of liabilities	$	—	$	660,070	$	—	$	660,070

	Estimated Fair Value Measurements as of December 31, 2014 Using:
	Quoted Price in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Types of Instruments (In thousands)	Level 1		Level 2		Level 3		Total
Assets
U.S. government securities	$	30,043	$	—	$	—	$	30,043
U.S. government agencies		—		34,750		—		34,750
Corporate notes		—		80,775		—		80,775
Commercial paper		—		34,469		—		34,469
Ordinary shares of Theravance Biopharma		6,517		—		—		6,517
Money market funds		95,090		—		—		95,090

Total assets measured as of estimated fair value	$	131,650	$	149,994	$	—	$	281,644


Liabilities
Convertible subordinated notes due 2023	$	—	$	197,095	$	—	$	197,095
Non-recourse notes due 2029		—		456,411		—		456,411

Total fair value of liabilities	$	—	$	653,506	$	—	$	653,506

The fair value of our marketable securities classified within Level 2 is based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.

The fair value of our convertible subordinated notes due 2023 and non-recourse notes due 2029 is based on actual trading prices of the instruments.

Capitalized Fees Paid to a Related Party

12 Months Ended

Dec. 31, 2015

Capitalized Fees Paid to a Related Party

Capitalized Fees Paid to a Related Party

5. Capitalized Fees paid to a Related Party

Capitalized fees paid to a related party, which consist of registrational and launch-related milestone fees paid to GSK, were as follows:

	December 31, 2015									December 31, 2014
(In thousands)	Weighted Average Remaining Amortization Period (Years)		Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Approval and launch related milestone payments under the LABA Collaboration		14.1	$	220,000	$	(25,632	)	$	194,368	$	220,000	$	(11,809	)	$	208,191

These milestone fees are being amortized over their estimated useful lives commencing upon the commercial launch of the product in their respective regions with the amortization expense recorded as a reduction in revenue from collaborative arrangements. Additional information regarding these milestone fees is included in Note 3, "Collaborative Arrangements." Amortization expense for the years ended December 31, 2015, 2014 and 2013 were $13.8 million, $11.1 million and $0.7 million. The remaining estimated amortization expense is $13.8 million for each of the years from 2016 to 2020 and $125.3 million thereafter.

Stock-Based Compensation

12 Months Ended

Dec. 31, 2015

Stock-Based Compensation

Stock-Based Compensation

6. Stock-Based Compensation

Equity Incentive Plans

In May 2012, we adopted the 2012 Equity Incentive Plan (the "2012 Plan"). The 2012 Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock awards, stock unit awards and SARs to employees, non-employee directors and consultants. As of December 31, 2015, total shares remaining available for issuance under the 2012 Plan were 3,466,041.

Employee Stock Purchase Plan

Under the 2004 Employee Stock Purchase Plan (the "ESPP"), our employees may purchase common stock through payroll deductions at a price equal to 85% of the lower of the fair market value of the stock at the beginning of the offering period or at the end of each applicable purchase period. The ESPP provides for consecutive and overlapping offering periods of 24 months in duration, with each offering period composed of four consecutive six-month purchase periods. The purchase periods end on either May 15 or November 15. ESPP contributions are limited to a maximum of 15% of an employee's eligible compensation. The maximum number of shares that an employee may purchase in any purchase period is 2,500. An employee may not purchase shares with a value greater than $25,000 in any calendar year.

As of December 31, 2015, total shares remaining available for issuance under the ESPP were 265,711.

Performance-Contingent RSAs

Since 2011, the Compensation Committee of our Board of Directors (the "Compensation Committee") have approved grants of performance-contingent RSAs to senior management and a non-executive officer. Generally, these awards have dual triggers of vesting based upon the achievement of certain performance goals by a pre-specified date, as well as a requirement for continued employment. Recognition of stock-based compensation expense begins when the performance goals are deemed probable of achievement.

Included in these performance-contingent RSAs is the grant of 1,290,000 special long-term retention and incentive performance-contingent RSAs to senior management in 2011. The awards have dual triggers of vesting based upon the achievement of certain performance conditions over a six-year timeframe from 2011 through December 31, 2016 and require continued employment. As of March 31, 2014, we determined that the achievement of the requisite performance conditions for vesting of the first tranche of these awards was probable and the total stock-based compensation expense of $7.0 million for the first tranche was fully recognized through May 2014. In connection with the Spin-Off, our Compensation Committee approved the modification of the remaining tranches related to these awards as the performance conditions associated with the remaining portions of these awards were unlikely to be consistent with the new strategies of each company following the Spin-Off. The remaining 63,000 RSAs for which service-based vesting was not triggered at the time of the Spin-Off remain subject to new performance conditions (as well as the original service conditions). In addition, the RSAs for which both the performance and service-based conditions were not achieved prior to the Spin-Off were entitled to the pro rata dividend distribution made by Theravance on June 2, 2014 of one ordinary share of Theravance Biopharma for every 3.5 shares of Theravance common stock subject to their awards, which will also be subject to the same new performance and service conditions as the original RSAs to which they relate. As of December 31, 2015 and 2014, we determined that the achievement of the requisite performance conditions was not probable and, as a result, no compensation cost was recognized for the remaining equity awards.

Performance-Contingent RSUs

Prior to 2015, the Compensation Committee had approved grants of performance-contingent RSUs to employees. These awards have dual triggers of vesting based upon the successful achievement of certain corporate operating milestones in specified timelines, as well as a requirement for continued employment. When the performance goals are deemed to be probable of achievement for these types of awards, time-based vesting and, as a result, recognition of stock-based compensation expense commences. There were no outstanding shares as of December 31, 2015.

Director Compensation Program

Our non-employee directors receive compensation for services provided as a director. Each member of our Board of Directors who is not an employee receives an annual cash retainer for services as a director, member of a committee of the Board of Directors, lead independent director and chairman, as applicable. In addition, prior to the Spin-Off, each non-employee director was entitled to a cash fee for each board and committee meeting attended.

Each of our independent directors receives periodic automatic grants of equity awards under a program implemented under the 2012 Plan. These grants are non-discretionary. Only our independent directors or affiliates of such directors are eligible to receive automatic grants under the 2012 Plan. Under the program, as amended following the Spin-Off, each individual who first becomes a non-employee director will, on the date such individual joins the Board of Directors, automatically be granted a one-time grant of RSUs covering a number of shares of our common stock calculated as $250,000 divided by our common stock closing share price on the date of grant as reported on The NASDAQ Global Market, rounded down to the nearest whole share (the "Initial RSUs"), plus a one-time grant of RSUs covering a number of shares of our common stock calculated as $250,000 divided by our common stock closing share price on the date of grant as reported on The NASDAQ Global Market, which would be pro-rated for the number of whole months remaining until the anniversary of the prior year's stockholders' meeting, rounded down to the nearest whole share (the "Pro Rata RSUs"). The Initial RSUs vest in two equal annual installments, while Pro-Rata RSUs vest in a single installment at the sooner of the next annual stockholder meeting or the one-year grant anniversary, in each case subject to the non-employee director's continuous service through the applicable vesting date.

Annually, upon his or her re-election to the Board at the Annual Meeting of Stockholders, each non-employee director is automatically granted an RSU covering a number of shares of our common stock calculated as $250,000 divided by our common stock closing share price on the date of grant as reported on The NASDAQ Global Market, rounded down to the nearest whole share. Annual RSUs will vest at the sooner of the next annual stockholder meeting or the one-year anniversary of grant, subject to the non-employee director's continuous service through the applicable vesting date.

These RSUs will vest in full upon the director's death or the occurrence of a Change in Control before the director's service terminates. All director RSUs will be settled in shares of our common stock on the vesting date. Director RSUs will carry dividend equivalent rights to be credited with an amount equal to all cash dividends paid on the underlying shares of common stock while unvested. Dividend equivalents will be subject to the same terms and conditions, including vesting, as the RSUs to which they attach and will be paid in cash upon vesting.

Stock-Based Compensation Expense

In connection with the Spin-Off of Theravance Biopharma, all outstanding shares of Theravance Biopharma were distributed to our stockholders as a pro-rata dividend distribution on June 2, 2014 by issuing one ordinary share of Theravance Biopharma for every 3.5 shares held of Innoviva common stock to stockholders of record on May 15, 2014. Outstanding stock options and RSUs that were not eligible for the dividend distribution were adjusted for the Spin-Off of Theravance Biopharma. The number of shares and exercise price for all outstanding stock options were adjusted and the number of shares for all outstanding RSUs was adjusted. All other terms of these grants remain the same; provided, however, that the vesting and expiration of these grants are based on the holder's continuing employment or service with us or Theravance Biopharma, as applicable.

Although the anti-dilution adjustments were required pursuant to the terms of each stock plan, the anti-dilution adjustments were calculated using a volume-weighted average stock price, rather than the stock price as of the date of the dividend distribution, which resulted in incremental compensation expense. The accounting impact of the adjustment to the outstanding stock options and RSUs that occurred in connection with the Spin-Off of Theravance Biopharma was measured by comparing of the fair values of the modified stock options and RSUs to our employees and directors immediately before and after the adjustment. As a result, we recognized incremental stock- based compensation expense of $1.2 million in the second quarter of 2014, of which $0.9 million is included in discontinued operations. All remaining unrecognized stock-based compensation expense associated with this adjustment will be recognized by Theravance Biopharma as it pertains to stock options and RSUs held by individuals now employed by Theravance Biopharma or one if its affiliates.

Stock-based compensation expense is included in the consolidated statements of operations as follows:

	Year Ended December 31,
(In thousands)	2015		2014		2013
Research and development	$	1,036	$	2,781	$	573
General and administrative		5,837		12,980		7,325

Stock-based compensation from continuing operations		6,873		15,761		7,898
Stock-based compensation from discontinued operations		—		11,629		17,789

Total stock-based compensation expense	$	6,873	$	27,390	$	25,687

Stock-based compensation expense included in the consolidated statements of operations by award type is as follows:

	Year Ended December 31,
(In thousands)	2015		2014		2013
Stock options	$	789	$	4,658	$	4,132
RSUs		2,492		4,564		10,174
RSAs		2,850		7,575		9,723
Performance RSUs		—		3		61
Performance RSAs		613		10,580		1,061
ESPP		129		10		536

Total stock-based compensation expense	$	6,873	$	27,390	$	25,687

As of December 31, 2015, the unrecognized stock-based compensation cost, net of expected forfeitures for awards expected to vest, including performance- contingent RSAs for which the performance milestones were determined to be probable of achievement, and the estimated weighted-average amortization period, using the straight-line attribution method, was as follows:

(In thousands, except amortization period)	Unrecognized Compensation Cost		Weighted- Average Amortization Period (Years)
Stock options	$	1,531		2.4
RSUs		1,446		1.1
RSAs		8,275		3.1
Performance RSAs		6		2.1

Total stock-based compensation expense	$	11,258

Compensation Awards

The following table summarizes equity award activity under the 2012 Plan and Prior Plans and related information:

(In thousands)	Number of Shares Subject to Outstanding Options			Weighted- Average Exercise Price of Outstanding Options		Number of Shares Subject to Outstanding RSUs			Weighted- Average Fair Value per Share at Grant		Number of Shares Outstanding Subject to Vesting or Performance Conditions with Vesting			Weighted- Average Fair Value per Share at Grant
Balance as of December 31, 2014		5,422			22.46		775			18.53		1,772			25.78
Granted		—			—		141			15.50		437			13.76
Exercised		(111	)		13.75		—			—		—			—
Released RSUs/RSAs		—			—		(327	)		17.66		(883	)		25.22
Forfeited		(1,049	)		21.19		(130	)		18.07		(21	)		20.33

Balance as of December 31, 2015		4,262		$	23.00		459		$	18.34		1,305		$	18.00

As of December 31, 2015, the aggregate intrinsic value of the options outstanding was $0.1 million and the aggregate intrinsic value of the options exercisable was $0.1 million.

The total intrinsic value of the options exercised was $0.5 million in the year ended December 31, 2015, $17.5 million in the year ended December 31, 2014 and $41.4 million in the year ended December 31, 2013. The total estimated fair value of options vested was $10.0 million in the year ended December 31, 2015, $5.7 million in the year ended December 31, 2014 and $3.7 million in the year ended December 31, 2013.

Valuation Assumptions

We based the range of weighted-average estimated values of employee stock option grants and rights granted under the ESPP, as well as the weighted-average assumptions used in calculating these values, on estimates as of the date of grant, as follows:

	Year Ended December 31,
	2015(1)			2014	2013
Employee stock options
Risk-free interest rate		—	%	1.6% - 2.1%	0.8% - 2.0%
Expected term (in years)		—		5 - 6	5 - 6
Volatility		—	%	52% - 60%	58% - 60%
Dividend yield		—	%	3% - 4%	—
Weighted-average estimated fair value of stock options granted	$	—		$15.63	$19.96


(1)	There were no stock options granted for the year ended December 31, 2015.

	Year Ended December 31,
	2015	2014	2013
Employee stock purchase plan issuances
Risk-free interest rate	0.1% - 0.9%	0.1% - 0.5%	0.1% - 0.3%
Expected term (in years)	0.5 - 2	0.5 - 2	0.5 - 2
Volatility	44% - 69%	43% - 55%	56% - 61%
Dividend yield	0% - 6%	8%	—
Weighted-average estimated fair value of ESPP shares granted	$4.52	$4.49	$16.44

Long-Term Debt

12 Months Ended

Dec. 31, 2015

Long-Term Debt.

Long-Term Debt

7. Long-Term Debt

Our long-term debt consists of:

	As of December 31,
(In thousands)	2015		2014
Convertible Subordinated Notes due 2023	$	255,109	$	255,109
Non-Recourse Notes Payable due 2029		493,162		470,527

Total Long-Term Debt	$	748,271	$	725,636

Convertible Subordinated Notes Due 2023

In January 2013, we completed an underwritten public offering of $287.5 million aggregate principal amount of unsecured convertible subordinated notes, which will mature on January 15, 2023 (the "2023 Notes"). The financing raised proceeds, net of issuance costs, of approximately $281.2 million, less $36.8 million to purchase two privately-negotiated capped call option transactions in connection with the issuance of the notes. The 2023 Notes bear interest at the rate of 2.125% per year that is payable semi-annually in arrears in cash on January 15 and July 15 of each year, beginning on July 15, 2013.

The 2023 Notes were convertible, at the option of the holder, into shares of our common stock at an initial conversion rate of 35.9903 shares per $1,000 principal amount of the 2023 Notes, subject to adjustment in certain circumstances, which represents an initial conversion price of approximately $27.79 per share. Following the Spin-Off of Theravance Biopharma, a number of adjustments to the initial conversion rate have been made as described below. Holders of the notes will be able to require us to repurchase some or all of their notes upon the occurrence of a fundamental change at 100% of the principal amount of the notes being repurchased plus accrued and unpaid interest. We may not redeem the notes prior to their stated maturity date.

In connection with the offering of the 2023 Notes, we entered into two privately-negotiated capped call option transactions with a single counterparty. The capped call option transaction is an integrated instrument consisting of a call option on our common stock purchased by us with a strike price equal to the initial conversion price of $27.79 per share for the underlying number of shares and a cap price of $38.00 per share, both of which are subject to adjustments consistent with the 2023 Notes. The cap component is economically equivalent to a call option sold by us for the underlying number of shares with an initial strike price of $38.00 per share. As an integrated instrument, the settlement of the capped call coincides with the due date of the convertible debt. Upon settlement, we would receive from our hedge counterparty a number of shares of our common shares that would range from zero, if the stock price was below $27.79 per share, to a maximum of 2,779,659 shares, if the stock price is above $38.00 per share. However, if the market price of our common stock, as measured under the terms of the capped call transactions, exceeds $38.00 per share, there is no incremental anti-dilutive benefit from the capped call.

In accordance with the agreement for the 2023 Notes, the conversion rate was adjusted as a result of the completion of the Spin-Off of Theravance Biopharma. The conversion rate was adjusted based on the conversion rate immediately prior to the record date for the Spin-Off and the average of the stock dividend distributed to our common stockholders and our stock prices. This resulted in an adjusted conversion rate of 46.9087 shares per $1,000 principal amount of the 2023 Notes, which represents an adjusted conversion price of approximately $21.32 per share. As a result of the conversion rate adjustment, the capped call strike price and cap price were also adjusted accordingly to $21.32 and $29.16, respectively. On July 15, 2014, certain holders of the 2023 Notes converted their notes into 1,519,402 shares of our common stock at the adjusted conversion price of $21.32 per share. In connection with the partial conversion of the 2023 Notes, we received 149,645 shares of our common stock from our capped call option counterparty and the shares of common stock received were recorded as treasury stock.

In connection with the payments of the cash dividends during the years ended December 31, 2015 and 2014, which is further discussed in Note 8, "Shareholders' Deficit", the adjusted conversion rate with respect to our 2023 Notes was further adjusted in total from 46.9087 shares of our common stock per $1,000 principal amount of the 2023 Notes to 50.5818 shares of our common stock per $1,000 principal amount of the 2023 Notes, which represents an adjusted conversion price of approximately $19.77 per share. As a result of the conversion rate adjustment, the capped call strike price and cap price were also adjusted accordingly to $19.77 and $27.04.

Non-Recourse Notes Due 2029

In April 2014, we entered into certain note purchase agreements relating to the private placement of $450.0 million aggregate principal amount of non-recourse fixed rate term notes due 2029 (the "2029 Notes") issued by our wholly-owned subsidiary.

The 2029 Notes are secured by a security interest in a segregated bank account established to receive 40% of royalties due to us under the LABA Collaboration with GSK commencing on April 1, 2014 and ending upon the earlier of full repayment of principal or May 15, 2029. The amounts in the segregated bank account can only be used to make interest and principal payments on the 2029 Notes. As of December 31, 2015 and 2014, the balance of the segregated bank account was not material.

The 2029 Notes bear an annual interest rate of 9%, with interest and principal paid quarterly beginning November 15, 2014. The 2029 Notes may be redeemed at any time prior to maturity, in whole or in part, at specified redemption premiums. Prior to May 15, 2016, in the event that the specified portion of royalties received in a quarter is less than the interest accrued for the quarter, the principal amount of the 2029 Notes will increase by the interest shortfall amount for that period, and considered as payment in kind ("PIK"). Since issuance, $43.2 million of interest expense has been added to the principal balance of the 2029 Note, of which $22.7 million and $20.5 million was added during the years ended December 31, 2015 and 2014, respectively. Since the principal and interest payments on the 2029 Notes are based on royalties from product sales recorded by GSK, which will vary from quarter to quarter and are unknown to us, the 2029 Notes may be repaid prior to the final maturity date in 2029. The 2029 Notes can be prepaid subject to a prepayment premium of 5% until April 17, 2016, 2.5% thereafter until April 17, 2017, and without premium afterwards.

In connection with the sale of the 2029 Notes, we incurred approximately $15.3 million in debt issuance costs, which are being amortized to interest expense over the estimated life of the 2029 Notes.

Shareholders' Deficit

12 Months Ended

Dec. 31, 2015

Shareholders' Deficit

Shareholders' Deficit

8. Shareholders' Deficit

Dividends

On February 20, 2015, our Board of Directors declared a quarterly dividend of $0.25 per share of common stock to stockholders of record as of the close of business on March 12, 2015. This dividend was paid on March 31, 2015. On April 24, 2015, our Board of Directors declared a quarterly dividend of $0.25 per share of common stock to stockholders of record as of the close of business on June 12, 2015. This dividend was paid on June 30, 2015. On July 24, 2015, our Board of Directors declared a quarterly dividend of $0.25 per share of common stock to stockholders of record as of the close of business on September 10, 2015. This dividend was paid to our stockholders on September 30, 2015. During the year ended December 31, 2015, we paid an aggregate of $87.3 million in dividends. Unvested RSAs and certain unvested RSUs as of the record date are also entitled to dividends, which will only be paid when the RSAs and such RSUs vest and are released. For further information on the impact of the cash dividend payments on the 2023 Notes, refer to Note 7, "Long-Term Debt".

On October 16, 2014, our Board of Directors declared a quarterly dividend of $0.25 per share of common stock to stockholders of record as of the close of business on November 25, 2014. This dividend was paid on December 31, 2014. On July 25, 2014, our Board of Directors declared a quarterly dividend of $0.25 per share of common stock to stockholders of record as of the close of business on August 28, 2014. This dividend was paid on September 18, 2014.

Share Repurchase Program

On October 28, 2015, we announced the acceleration of our capital return plan with a $150 million share repurchase program effective through the end of 2016 approved by our Board of Directors, replacing our quarterly dividend. As a component of the share repurchase plan, on October 30, 2015, we commenced a "modified Dutch auction" tender offer (the "October 2015 TO") to purchase up to $75 million of our common stock, at a price per share of not less than $8.50 and not greater than $9.25, which will be contingent upon satisfaction of customary conditions. The October 2015 TO expired on December 1, 2015. The following table shows the Company's share repurchase activity and related information on the October 2015 TO:

Purchase period end date		December 2015
Number of shares purchased and retired (in thousands)		2,576
Average repurchase price per share, including associated fees and expenses		$9.56
Share repurchase amount (in millions)		$24.6

Additionally, as part of its share repurchase program, during December 2015 we repurchased 100,000 shares of our common stock in the open market at an average price of $9.95 per share for a total of $1.0 million, which were also retired upon repurchase.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 4
-Section E

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
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+ Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies

Commitments and Contingencies

9. Commitments and Contingencies

Operating Lease and Lease Guarantee

Upon the Spin-Off, our facility leases in South San Francisco, California were assigned to Theravance Biopharma. However, if Theravance Biopharma were to default on its lease obligations, we have in substance guaranteed the lease payments for these facilities. We would also be responsible for lease-related payments including utilities, property taxes, and common area maintenance, which may be as much as the actual lease payments. As of December 31, 2015, the total remaining lease payments, which run through May 2020, were $27.6 million. The carrying value of this lease guarantee was $1.3 million as of December 31, 2015 and is reflected in other long-term liabilities in our consolidated balance sheet.

Following the Spin-Off, we entered into a Sublease Agreement with Theravance Biopharma to sublease 4,847 square feet of office space in South San Francisco, California, which expires in May 2020. We do not own or lease any other properties. Rent expenses associated with our operating leases for the years ended December 31, 2015, 2014 and 2013 were $0.2 million, $3.0 million, and $6.0 million, respectively. Future minimum lease payments under this lease as of December 31, 2015, were as follows:

(In thousands)
Years Ending December 31:
2016	$	192
2017		197
2018		203
2019		210
2020		89
Thereafter		—

Total	$	891

Guarantees and Indemnifications

We indemnify our officers and directors for certain events or occurrences, subject to certain limits. We believe the fair value of these indemnification agreements is minimal. Accordingly, we have not recognized any liabilities relating to these agreements as of December 31, 2015.

Income Taxes

12 Months Ended

Dec. 31, 2015

Income Taxes

Income Taxes

10. Income Taxes

Due to ongoing operating losses and the inability to recognize any income tax benefit, there is no provision for income taxes for any periods presented.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets are as follows:

	As of December 31,
(In thousands)	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	392,000		$	386,000
Deferred revenues		1,000			2,000
Research and development tax credit carryforwards		53,000			53,000
Other		17,000			18,000

Total deferred tax assets		463,000			459,000
Valuation allowance		(463,000	)		(459,000	)

Net deferred tax assets	$	—		$	—

The differences between the U.S. federal statutory income tax rate to our effective tax rate are as follows:

	Year Ended December 31,
	2015			2014			2013
U.S. federal statutory income tax rate		34.00	%		35.00	%		34.00	%
Non-deductible executive compensation		(1.94	)		(0.16	)		(0.07	)
Stock-based compensation		(0.23	)		(1.11	)		0.28
Federal and state research credits		—			12.66			3.63
Effect of Spin-Off Transaction		—			(203.2	)		—
Other		(0.56	)		(4.04	)		(2.51	)
Change in valuation allowance		(31.27	)		160.85			(35.33	)

Effective tax rate		(0.00	)%		(0.00	)%		(0.00	)%

Realization of deferred tax assets is dependent on future taxable income, if any, the timing and the amount of which are uncertain. Accordingly, the deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by $4.7 million in the year ended December 31, 2015, decreased by $103.8 million in the year ended December 31, 2014, and increased by $70.1 million in the year ended December 31, 2013.

The increase in the valuation allowance in the year ended December 31, 2015 was primarily a result of net operating loss carryforwards.

The decrease in the valuation allowance in the year ended December 31, 2014 was primarily a result of the tax impacts of the Spin-Off transaction. In the year ended December 31, 2014, the Company recorded a permanent difference related to the tax gain that was recognized in connection with the Spin-Off, which allowed the Company to utilize approximately $252.7 million of its federal net operating losses. Accordingly, the associated valuation allowance, of $88.6 million, was released. Additionally, as discussed in Note 11 in connection with the Spin-Off, approximately $9.2 million of deferred tax assets were transferred to Theravance Biopharma, Inc. Accordingly, the associated valuation allowance was also decreased.

As of December 31, 2015, we had federal net operating loss carryforwards of approximately $1,174.7 million, which will expire from 2024 through 2035, and federal research and development tax credit carryforwards of approximately $45.2 million, which will expire from 2018 through 2034. We also had state net operating loss carryforwards of approximately $676.5 million expiring in the years 2016 through 2035 and state research tax credits of approximately $32.3 million, which do not expire.

The net operating loss deferred tax asset balances as of December 31, 2015 and 2014 do not include excess tax benefits from stock option exercises. Stockholders' equity will be credited if and when such excess tax benefits are ultimately realized.

Utilization of net operating loss and tax credit carryforwards may be subject to a substantial annual limitation due to ownership change limitations provided by the Internal Revenue Code and similar state provisions. Annual limitations may result in expiration of net operating loss and tax credit carryforwards before some or all of such amounts have been utilized.

Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. As of December 31, 2015 and 2014, we had no accrued interest or penalties due to our net operating losses available to offset any tax adjustment.

We conducted an analysis through the year ended December 31, 2014 to determine whether an ownership change had occurred since inception. The analysis indicated that two ownership changes occurred in prior years. However, notwithstanding the applicable annual limitations, no portion of the net operating loss or credit carryforwards are expected to expire before becoming available to reduce federal and state income tax liabilities as a result of those identified ownership changes. If we undergo another ownership change, the utilization of the pre-ownership change net operating loss carryforwards or pre-ownership change tax attributes, such as research tax credits, to offset the post-ownership change income may be subject to an annual limitation, pursuant to Section 382 and 383 of the Internal Revenue Code of 1986, as amended. Similar rules may apply under state tax laws.

Uncertain Tax Positions

A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits are as follows (in thousands):

Unrecognized tax benefits as of December 31, 2012	$	52,500
Gross decrease for tax positions for prior years		(565	)
Gross increase in tax positions for current year		5,485

Unrecognized tax benefits as of December 31, 2013		57,420
Gross decrease for tax positions for prior years		(42,650	)
Gross increase in tax positions for current year		689

Unrecognized tax benefits as of December 31, 2014		15,459
Gross increase in tax positions for current year		29

Unrecognized tax benefits as of December 31, 2015	$	15,488

In the event that we are able to recognize these uncertain positions, most of the $15.5 million of the unrecognized benefit would reduce our effective tax rate. We currently have a full valuation allowance against our deferred tax assets, which would impact the timing of the effective tax rate benefit, should any of these uncertain positions be favorably settled in the future. We do not believe it is reasonably possible that our unrecognized tax benefits will significantly change within the next twelve months.

We are subject to taxation in the U.S. and various state jurisdictions. The tax years 1998 and forward remain open to examination by the federal and most state tax authorities due to net operating loss and overall credit carryforward positions.

Spin-Off of Theravance Biopharma, Inc.

12 Months Ended

Dec. 31, 2015

Spin-Off of Theravance Biopharma, Inc.

Spin-Off of Theravance Biopharma, Inc.

11. Spin-Off of Theravance Biopharma, Inc.

On June 1, 2014, we separated our late-stage partnered respiratory assets from our biopharmaceutical research and drug development operations. We contributed the assets and certain liabilities from the research and drug development operations and $393.0 million of cash, cash equivalents and marketable securities to Theravance Biopharma. All outstanding shares of Theravance Biopharma were then distributed to our stockholders of record on May 15, 2014 as a pro-rata dividend distribution of one ordinary share of Theravance Biopharma for every 3.5 shares held of our common stock.

On June 1, 2014, we entered into a Separation and Distribution Agreement with Theravance Biopharma that set forth the terms and conditions of the separation of Theravance Biopharma from us. The Separation and Distribution Agreement sets forth a framework for the relationship between us and Theravance Biopharma following the separation regarding principal transactions necessary to separate Theravance Biopharma from us. This agreement also sets forth other provisions that govern certain aspects of our relationship with Theravance Biopharma after the completion of the separation from us and provides for the allocation of assets, liabilities and obligations between Theravance Biopharma and us in connection with the Spin-Off.

In addition, we entered into other definitive agreements in connection with the Spin-Off, including (1) a Transition Services Agreement pursuant to which Theravance Biopharma and we will provide each other with a variety of administrative services, including financial, tax, accounting, information technology, legal and human resources services, for a period of time of up to 12 months following the Spin-Off, (2) a Tax Matters Agreement that generally governs the parties' respective rights, responsibilities and obligations after the separation with respect to taxes, (3) a Sublease Agreement that provides for the sublease from Theravance Biopharma to us for certain office space to be utilized in our operations and (4) an Employee Matters Agreement that allocates liabilities and responsibilities relating to employee compensation, benefit plans, programs and other related matters in connection with the separation, including the treatment of outstanding incentive awards and certain retirement and welfare benefit obligations. These arrangements contain the provisions related to the Spin-Off and the distribution of Theravance Biopharma's ordinary shares to our stockholders.

The total amount of the Theravance Biopharma share dividend of $402.9 million was based on the net book value of the net assets that were contributed to Theravance Biopharma in connection with the Spin-Off, as follows:

(In thousands)	June 2, 2014
Cash and cash equivalents	$	277,541
Marketable investment securities		115,129
Accounts receivable		125
Reimbursement of certain liabilities		16,983
Prepaid and other current assets		3,172
Inventories		14,328
Fixed assets, net		9,580
Accrued liabilities		(22,342	)
Deferred revenue		(6,694	)
Other liabilities		(4,944	)

Net book value of assets contributed	$	402,878

Due to the Spin-Off, the leases for the facilities in South San Francisco, California, which formerly served as our headquarters, were assigned to Theravance Biopharma. We would be held liable by the landlord if Theravance Biopharma defaults under its lease obligations, and thus, we have in substance guaranteed the payments under the lease agreements for these facilities. See Note 9, "Commitments and Contingencies" for further information on this lease guarantee.

Theravance Biopharma's historical results of operations have been presented as discontinued operations in our consolidated statement of operations for the years ended December 31, 2015 and 2014. See Note 12, "Discontinued Operations," for further information.

Discontinued Operations

12 Months Ended

Dec. 31, 2015

Discontinued Operations.

Discontinued Operations

12. Discontinued Operations

On June 1, 2014, we separated our research and drug development businesses from our late-stage partnered respiratory assets. For further information on the Spin-Off, refer to Notes 1 and 11, "Description of Operations and Summary of Significant Accounting Policies" and "Spin-Off of Theravance Biopharma, Inc.". The significant components of the research and drug development operations, which are presented as discontinued operations on the consolidated statements of operations, were as follows:

	Year Ended December 31,
(In thousands)	2015		2014			2013
Net revenues(1)	$	—	$	3,129		$	226
Income (loss) from discontinued operations(2)		—		(94,934	)		(140,068	)


(1)	Net revenues primarily consist of revenue from collaborative arrangements and product sales. Revenue from collaborative arrangements was recognized from our agreement with R-Pharm CJSC, which was transferred to Theravance Biopharma as a part of the Spin-Off. Product sales were generated from sales of VIBATIV in the U.S. through a limited number of distributors, and title and risk of loss transfer upon receipt by these distributors. Healthcare providers ordered VIBATIV through these distributors. Commencing in the first quarter of 2014, revenue on the sale of VIBATIV was recorded on a sell-through basis, once the distributors sold the product to healthcare providers. Product sales were recorded net of estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns and other deductions.
(2)	Loss from discontinued operations decreased in the year ended December 31, 2014 compared to the year ended December 31, 2013 primarily as there was no impact of discontinued operations after the Spin- Off occurring in June 2014. Included in the loss from discontinued operations for the year ended December 31, 2014 and the year ended December 31, 2013 are external legal and accounting fees in connection with our separation strategy which we started to incur in the year ended December 31, 2013 and the additional stock-based compensation and cash bonus expense recognized due to the achievement of performance conditions under a special long-term retention and incentive equity and cash bonus awarded to certain employees in the year ended December 31, 2011, which we started to incur in the year ended December 31, 2014.

There was no impact of the discontinued operations after the Spin-Off to our revenues and expenses for the year ended December 31, 2015.

In May 2013, we entered into a royalty participation agreement with Elan Corporation, plc ("Elan"). The closing of the transaction was subject to closing conditions, including the approval of the transaction by Elan's shareholders. Elan's shareholders did not approve the transaction at an Extraordinary General Meeting. Subsequently, we terminated the agreement and, as a result, Elan paid us a $10.0 million termination fee in June 2013, which is reflected in discontinued operations on the consolidated statements of operations.

- Definition

The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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+ Details

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2015
Subsequent Events
Subsequent Events	13. Subsequent Events In January 2016 and through the middle of February 2016, as part of our share repurchase program as discussed in Note 8—"Shareholders' Deficit", we repurchased 1,419,641 shares of our common stock in the open market at an average price of $9.53 per share for a total purchase price of $13.5 million, which were retired upon repurchase.

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Dec. 31, 2015

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)
(In thousands, except per share amounts)

The following table presents certain unaudited consolidated quarterly financial information for the eight quarters in the period ended December 31, 2015. This information has been prepared on the same basis as the audited consolidated financial statements and includes all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the unaudited quarterly results of operations set forth herein.

	For the Quarters Ended(1)
	March 31			June 30			September 30			December 31
2015
Net revenue	$	6,896		$	10,655		$	13,562		$	22,836
Total operating expenses(1)		(6,151	)		(5,547	)		(5,128	)		(5,543	)
Income from operations		745			5,108			8,434			17,293
Net income (loss)	$	(10,667	)	$	(7,810	)	$	(4,584	)	$	4,301
Basic and diluted net income (loss) per share	$	(0.09	)	$	(0.07	)	$	(0.04	)	$	0.04


Cash dividends declared per common share	$	0.25		$	0.25		$	0.25		$	—

	For the Quarters Ended(1)
	March 31			June 30			September 30			December 31
2014
Net revenue	$	(780	)	$	934		$	999		$	7,280
Total operating expenses(1)		(13,943	)		(10,728	)		(10,541	)		(7,150	)
Loss from continuing operations		(16,182	)		(20,151	)		(21,271	)		(15,926	)
Loss from discontinued operations(1)		(51,521	)		(43,413	)		—			—
Net loss	$	(67,703	)	$	(63,564	)	$	(21,271	)	$	(15,926	)
Basic and diluted net loss per share:
Continuing operations, net of tax	$	(0.15	)	$	(0.18	)	$	(0.19	)	$	(0.14	)
Discontinued operations		(0.47	)		(0.39	)		—			—

Total	$	(0.62	)	$	(0.57	)	$	(0.19	)	$	(0.14	)


Cash dividends declared per common share	$	—		$	—		$	0.25		$	0.25


(1)	Amounts were computed independently for each quarter, and the sum of the quarters may not total the annual amounts.

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

12 Months Ended

Dec. 31, 2015

Description of Operations and Summary of Significant Accounting Policies

Business Separation

Principles of Consolidation

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

Use of Management's Estimates

Certain Risks and Concentrations

Segment Reporting

Variable Interest Entities

Cash and Cash Equivalents

Investments in Marketable Securities

Fair Value of Financial Instruments

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

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

Property and Equipment

Property and equipment as of December 31, 2015 and 2014, which consisted of computer software, amounted to $0.2 million and $0.3 million, respectively.

Property, equipment and leasehold improvements are stated at cost and depreciated using the straight-line method as follows:

Leasehold improvements		Shorter of remaining lease terms or useful life
Equipment, furniture and fixtures		5 - 7 years
Software and computer equipment		3 years

Capitalized Software

We capitalize certain costs related to direct material and service costs for software obtained for internal use. Capitalized software costs are depreciated over three years.

Capitalized Fees Paid to a Related Party

Capitalized Fees paid to a Related Party

Revenue Recognition

Collaborative Arrangements and Multiple-Element Arrangements

Royalties

Product Revenues

We currently have no product revenues following the Spin-Off.

Allowance for Doubtful Accounts

Research and Development Costs

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 fair value of the common stock on the date of offering, less the purchase discount percentage provided for in the plan.

Amortization of Debt Issuance Costs from Non-recourse Notes Payable, due 2029

Income Taxes

The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available.

Comprehensive Loss

Related Parties

GSK owned 27.9% of our outstanding common stock as of December 31, 2015. Transactions with GSK are described in Note 3, "Collaborative Arrangements".

Recently Issued Accounting Pronouncements Not Yet Adopted

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

12 Months Ended

Dec. 31, 2015

Description of Operations and Summary of Significant Accounting Policies

Schedule of property and equipment useful lives

Leasehold improvements		Shorter of remaining lease terms or useful life
Equipment, furniture and fixtures		5 - 7 years
Software and computer equipment		3 years

Net Loss per Share (Tables)

12 Months Ended

Dec. 31, 2015

Net Loss per Share

Schedule of anti-dilutive securities

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

	Year Ended December 31,
	2015(1)		2014		2013
Outstanding options and awards granted under equity incentive plan and employee stock purchase plan		5,290		6,239		4,095
Unvested RSAs		1,644		1,772		2,364
Shares issuable upon conversion of convertible subordinated notes		12,904		12,329		2,780

Total		19,838		20,340		9,239

(1)

Collaborative Arrangements (Tables)

12 Months Ended

Dec. 31, 2015

Collaborative Arrangements

Schedule of net revenue recognized under GSK Agreements

Net revenue recognized under our GSK Agreements was as follows (in thousands):

	Year Ended December 31,
	2015			2014			2013
Royalties from a related party	$	66,887		$	18,417		$	1,945
Less: amortization of capitalized fees paid to a related party		(13,823	)		(11,066	)		(743	)

Royalty revenue		53,064			7,351			1,202
LABA collaboration(1)		—			—			1,815
Strategic alliance—MABA program		885			1,082			1,515

Total net revenue from GSK	$	53,949		$	8,433		$	4,532


(1)	Deferred revenue under this agreement was fully recognized in the year ended December 31, 2013.

Available-for-Sale Securities and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2015

Available-for-Sale Securities and Fair Value Measurements

Schedule of available-for-sale securities

The classification of available-for-sale securities in the consolidated balance sheets is as follows (in thousands):

	December 31,
	2015		2014
Cash and cash equivalents	$	148,673	$	95,090
Short-term marketable securities		28,103		143,698
Marketable securities		—		42,856

Total	$	176,776	$	281,644

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

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Other Than Temporary Impairment Loss		Estimated Fair Value
U.S. government agencies	$	14,406	$	—	$	(1	)	$	—	$	14,405
U.S. corporate notes		2,702		—		(1	)		—		2,701
U.S. commercial paper		10,997		—		—			—		10,997
Money market funds		148,673		—		—			—		148,673

Total	$	176,778	$	—	$	(2	)	$	—	$	176,776

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Other Than Temporary Impairment Loss			Estimated Fair Value
U.S. government securities	$	30,019	$	24	$	—		$	—		$	30,043
U.S. government agencies		34,756		6		(12	)		—			34,750
U.S. corporate notes		80,880		5		(110	)		—			80,775
U.S. commercial paper		34,469		—		—			—			34,469
Ordinary shares of Theravance Biopharma		10,269		—		—			(3,752	)		6,517
Money market funds		95,090		—		—			—			95,090

Total	$	285,483	$	35	$	(122	)	$	(3,752	)	$	281,644

Schedule of estimated fair values

	Estimated Fair Value Measurements as of December 31, 2015 Using:
	Quoted Price in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Types of Instruments (In thousands)	Level 1		Level 2		Level 3		Total
Assets
U.S. government agencies	$	—	$	14,405	$	—	$	14,405
Corporate notes		—		2,701		—		2,701
Commercial paper		—		10,997		—		10,997
Money market funds		148,673		—		—		148,673

Total assets measured as of estimated fair value	$	148,673	$	28,103	$	—	$	176,776


Liabilities
Convertible subordinated notes due 2023	$	—	$	189,100	$	—	$	189,100
Non-recourse notes due 2029		—		470,970		—		470,970

Total fair value of liabilities	$	—	$	660,070	$	—	$	660,070

	Estimated Fair Value Measurements as of December 31, 2014 Using:
	Quoted Price in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Types of Instruments (In thousands)	Level 1		Level 2		Level 3		Total
Assets
U.S. government securities	$	30,043	$	—	$	—	$	30,043
U.S. government agencies		—		34,750		—		34,750
Corporate notes		—		80,775		—		80,775
Commercial paper		—		34,469		—		34,469
Ordinary shares of Theravance Biopharma		6,517		—		—		6,517
Money market funds		95,090		—		—		95,090

Total assets measured as of estimated fair value	$	131,650	$	149,994	$	—	$	281,644


Liabilities
Convertible subordinated notes due 2023	$	—	$	197,095	$	—	$	197,095
Non-recourse notes due 2029		—		456,411		—		456,411

Total fair value of liabilities	$	—	$	653,506	$	—	$	653,506

- 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 + Details

Capitalized Fees Paid to a Related Party (Tables)

12 Months Ended

Dec. 31, 2015

Capitalized Fees Paid to a Related Party

Schedule of capitalized fees paid to a related party

	December 31, 2015									December 31, 2014
(In thousands)	Weighted Average Remaining Amortization Period (Years)		Gross Carrying Value		Accumulated Amortization			Net Carrying Value		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Approval and launch related milestone payments under the LABA Collaboration		14.1	$	220,000	$	(25,632	)	$	194,368	$	220,000	$	(11,809	)	$	208,191

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2015

Stock-Based Compensation

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

	Year Ended December 31,
(In thousands)	2015		2014		2013
Research and development	$	1,036	$	2,781	$	573
General and administrative		5,837		12,980		7,325

Stock-based compensation from continuing operations		6,873		15,761		7,898
Stock-based compensation from discontinued operations		—		11,629		17,789

Total stock-based compensation expense	$	6,873	$	27,390	$	25,687

Schedule of stock-based compensation expense by award type

	Year Ended December 31,
(In thousands)	2015		2014		2013
Stock options	$	789	$	4,658	$	4,132
RSUs		2,492		4,564		10,174
RSAs		2,850		7,575		9,723
Performance RSUs		—		3		61
Performance RSAs		613		10,580		1,061
ESPP		129		10		536

Total stock-based compensation expense	$	6,873	$	27,390	$	25,687

Schedule of unrecognized stock-based compensation cost, net of expected forfeitures for awards expected to vest, including performance-contingent RSAs for which the performance milestones were determined to be probable of achievement, and the estimated weighted-average amortization period, using the straight-line attribution method

(In thousands, except amortization period)	Unrecognized Compensation Cost		Weighted- Average Amortization Period (Years)
Stock options	$	1,531		2.4
RSUs		1,446		1.1
RSAs		8,275		3.1
Performance RSAs		6		2.1

Total stock-based compensation expense	$	11,258

Summary of equity award activity under the 2012 plan and prior plans

(In thousands)	Number of Shares Subject to Outstanding Options			Weighted- Average Exercise Price of Outstanding Options		Number of Shares Subject to Outstanding RSUs			Weighted- Average Fair Value per Share at Grant		Number of Shares Outstanding Subject to Vesting or Performance Conditions with Vesting			Weighted- Average Fair Value per Share at Grant
Balance as of December 31, 2014		5,422			22.46		775			18.53		1,772			25.78
Granted		—			—		141			15.50		437			13.76
Exercised		(111	)		13.75		—			—		—			—
Released RSUs/RSAs		—			—		(327	)		17.66		(883	)		25.22
Forfeited		(1,049	)		21.19		(130	)		18.07		(21	)		20.33

Balance as of December 31, 2015		4,262		$	23.00		459		$	18.34		1,305		$	18.00

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

	Year Ended December 31,
	2015(1)			2014	2013
Employee stock options
Risk-free interest rate		—	%	1.6% - 2.1%	0.8% - 2.0%
Expected term (in years)		—		5 - 6	5 - 6
Volatility		—	%	52% - 60%	58% - 60%
Dividend yield		—	%	3% - 4%	—
Weighted-average estimated fair value of stock options granted	$	—		$15.63	$19.96


(1)	There were no stock options granted for the year ended December 31, 2015.

	Year Ended December 31,
	2015	2014	2013
Employee stock purchase plan issuances
Risk-free interest rate	0.1% - 0.9%	0.1% - 0.5%	0.1% - 0.3%
Expected term (in years)	0.5 - 2	0.5 - 2	0.5 - 2
Volatility	44% - 69%	43% - 55%	56% - 61%
Dividend yield	0% - 6%	8%	—
Weighted-average estimated fair value of ESPP shares granted	$4.52	$4.49	$16.44

Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2015

Long-Term Debt.

Schedule of long-term debt

	As of December 31,
(In thousands)	2015		2014
Convertible Subordinated Notes due 2023	$	255,109	$	255,109
Non-Recourse Notes Payable due 2029		493,162		470,527

Total Long-Term Debt	$	748,271	$	725,636

- Definition

Tabular disclosure of long-debt instruments or arrangements, including identification, terms, features, collateral requirements and other information necessary to a fair presentation. These are debt arrangements that originally required repayment more than twelve months after issuance or greater than the normal operating cycle of the entity, if longer.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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+ Details

Shareholders' Deficit (Tables)

12 Months Ended

Dec. 31, 2015

Shareholders' Deficit

Schedule of share repurchase activity and related information on the October 2015 TO

Purchase period end date		December 2015
Number of shares purchased and retired (in thousands)		2,576
Average repurchase price per share, including associated fees and expenses		$9.56
Share repurchase amount (in millions)		$24.6

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2015

Commitments and Contingencies

Schedule of future minimum lease payments under non-cancelable operating lease

Future minimum lease payments under this lease as of December 31, 2015, were as follows:

(In thousands)
Years Ending December 31:
2016	$	192
2017		197
2018		203
2019		210
2020		89
Thereafter		—

Total	$	891

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Taxes

Schedule of significant components of the Company's deferred tax assets

	As of December 31,
(In thousands)	2015			2014
Deferred tax assets:
Net operating loss carryforwards	$	392,000		$	386,000
Deferred revenues		1,000			2,000
Research and development tax credit carryforwards		53,000			53,000
Other		17,000			18,000

Total deferred tax assets		463,000			459,000
Valuation allowance		(463,000	)		(459,000	)

Net deferred tax assets	$	—		$	—

Schedule of the differences between the U.S. federal statutory income tax rate to the Company's effective tax rate

The differences between the U.S. federal statutory income tax rate to our effective tax rate are as follows:

	Year Ended December 31,
	2015			2014			2013
U.S. federal statutory income tax rate		34.00	%		35.00	%		34.00	%
Non-deductible executive compensation		(1.94	)		(0.16	)		(0.07	)
Stock-based compensation		(0.23	)		(1.11	)		0.28
Federal and state research credits		—			12.66			3.63
Effect of Spin-Off Transaction		—			(203.2	)		—
Other		(0.56	)		(4.04	)		(2.51	)
Change in valuation allowance		(31.27	)		160.85			(35.33	)

Effective tax rate		(0.00	)%		(0.00	)%		(0.00	)%

Reconciliation of gross unrecognized tax benefits

A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits are as follows (in thousands):

Unrecognized tax benefits as of December 31, 2012	$	52,500
Gross decrease for tax positions for prior years		(565	)
Gross increase in tax positions for current year		5,485

Unrecognized tax benefits as of December 31, 2013		57,420
Gross decrease for tax positions for prior years		(42,650	)
Gross increase in tax positions for current year		689

Unrecognized tax benefits as of December 31, 2014		15,459
Gross increase in tax positions for current year		29

Unrecognized tax benefits as of December 31, 2015	$	15,488

Spin-Off of Theravance Biopharma, Inc. (Tables)

12 Months Ended

Dec. 31, 2015

Spin-Off of Theravance Biopharma, Inc.

Schedule of net book value of net assets that were contributed in connection with the Spin-Off

(In thousands)	June 2, 2014
Cash and cash equivalents	$	277,541
Marketable investment securities		115,129
Accounts receivable		125
Reimbursement of certain liabilities		16,983
Prepaid and other current assets		3,172
Inventories		14,328
Fixed assets, net		9,580
Accrued liabilities		(22,342	)
Deferred revenue		(6,694	)
Other liabilities		(4,944	)

Net book value of assets contributed	$	402,878

Discontinued Operations (Tables)

12 Months Ended

Dec. 31, 2015

Discontinued Operations.

Schedule of discontinued operations presented on the condensed consolidated statements of operations

	Year Ended December 31,
(In thousands)	2015		2014			2013
Net revenues(1)	$	—	$	3,129		$	226
Income (loss) from discontinued operations(2)		—		(94,934	)		(140,068	)


(1)	Net revenues primarily consist of revenue from collaborative arrangements and product sales. Revenue from collaborative arrangements was recognized from our agreement with R-Pharm CJSC, which was transferred to Theravance Biopharma as a part of the Spin-Off. Product sales were generated from sales of VIBATIV in the U.S. through a limited number of distributors, and title and risk of loss transfer upon receipt by these distributors. Healthcare providers ordered VIBATIV through these distributors. Commencing in the first quarter of 2014, revenue on the sale of VIBATIV was recorded on a sell-through basis, once the distributors sold the product to healthcare providers. Product sales were recorded net of estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns and other deductions.
(2)	Loss from discontinued operations decreased in the year ended December 31, 2014 compared to the year ended December 31, 2013 primarily as there was no impact of discontinued operations after the Spin- Off occurring in June 2014. Included in the loss from discontinued operations for the year ended December 31, 2014 and the year ended December 31, 2013 are external legal and accounting fees in connection with our separation strategy which we started to incur in the year ended December 31, 2013 and the additional stock-based compensation and cash bonus expense recognized due to the achievement of performance conditions under a special long-term retention and incentive equity and cash bonus awarded to certain employees in the year ended December 31, 2011, which we started to incur in the year ended December 31, 2014.

- Definition

Tabular disclosure of information related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=51716988&loc=SL51721533-107759

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 4B
-URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721665-107760

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1474-107760

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1361-107760

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721683-107760

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 50
-Paragraph 3A
-URI http://asc.fasb.org/extlink&oid=51719941&loc=SL51724579-110230

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5C
-URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721675-107760

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 4A
-URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721663-107760

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 360
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=51719941&loc=d3e2941-110230

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5B
-URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721673-107760

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 3A
-URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721659-107760

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5A
-URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721671-107760

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5D
-URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721677-107760

+ Details

Description of Operations and Summary of Significant Accounting Policies (Details) $ in Millions			12 Months Ended
	Jun. 02, 2014	Jun. 01, 2014 USD ($)	Dec. 31, 2015
Business Separation
Cash, cash equivalents and marketable securities contributed to Theravance Biopharma		$ 393.0
Number of ordinary shares of Theravance Biopharma issued for every share of Theravance	0.286
GSK \| LABA collaboration and Strategic Alliance agreements
Description of Operations and Summary of Significant Accounting Policies
Percentage of economic interest in any future payments made under the agreements			15.00%

Description of Operations and Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Description of Operations and Summary of Significant Accounting Policies
Property and equipment, net	$ 221	$ 324
Depreciation expense	$ 100	$ 1,100	$ 2,700
Capitalized Fees Paid to a Related Party
Capitalized fees paid to a related party, useful life	15 years
Equipment, furniture and fixtures \| Minimum
Description of Operations and Summary of Significant Accounting Policies
Estimated useful life	5 years
Equipment, furniture and fixtures \| Maximum
Description of Operations and Summary of Significant Accounting Policies
Estimated useful life	7 years
Software and computer equipment
Description of Operations and Summary of Significant Accounting Policies
Estimated useful life	3 years
Capitalized software
Description of Operations and Summary of Significant Accounting Policies
Estimated useful life	3 years

Description of Operations and Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2015	Apr. 30, 2014
Product Revenues
Revenue from product sales	$ 0.0
Revenue recognition
Allowance for doubtful accounts	0.0
Unrecognized tax benefits would affect our effective income tax rate if recognized	$ 0.0
9% fixed rate term notes due 2029
Revenue recognition
Loan amount		$ 450.0
Interest rate (as a percent)		9.00%
Debt issuance costs		$ 15.3

Description of Operations and Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2015
GSK
Related parties
Percentage of common stock owned			27.90%
Gunderson law firm
Related parties
Fees incurred related to related party	$ 1.3	$ 3.2

Net Loss per Share (Details) - shares shares in Thousands	12 Months Ended
Net Loss per Share (Details) - shares shares in Thousands	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Anti-dilutive securities
Anti-dilutive securities (in shares)	19,838	20,340	9,239
Stock options \| Former employees transferred to Theravance Biopharma in connection with Spin Off
Anti-dilutive securities
Anti-dilutive securities (in shares)	4,100
RSUs \| Former employees transferred to Theravance Biopharma in connection with Spin Off
Anti-dilutive securities
Anti-dilutive securities (in shares)	400
RSAs \| Former employees transferred to Theravance Biopharma in connection with Spin Off
Anti-dilutive securities
Anti-dilutive securities (in shares)	1,000
Equity incentive plans and ESPP
Anti-dilutive securities
Anti-dilutive securities (in shares)	5,290	6,239	4,095
RSAs
Anti-dilutive securities
Anti-dilutive securities (in shares)	1,644	1,772	2,364
Convertible subordinated notes
Anti-dilutive securities
Anti-dilutive securities (in shares)	12,904	12,329	2,780

Collaborative Arrangements (Details) $ in Thousands	1 Months Ended	3 Months Ended								12 Months Ended
Collaborative Arrangements (Details) $ in Thousands	Oct. 31, 2011 item	Dec. 31, 2015 USD ($)	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Mar. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2015 USD ($) shares	Dec. 31, 2014 USD ($) shares	Dec. 31, 2013 USD ($) shares
Information related to collaborative arrangements
Less: amortization of capitalized fees paid to a related party										$ (13,823)	$ (11,066)	$ (743)
Royalty revenue										53,064	7,351	1,202
Revenue from collaborative arrangements										885	1,082	3,330
Total net revenue		$ 22,836	$ 13,562	$ 10,655	$ 6,896	$ 7,280	$ 999	$ 934	$ (780)	53,949	8,433	4,532
Aggregate purchase price of common stock										$ 6,528	$ 38,095	$ 126,030
Common Stock
Information related to collaborative arrangements
Company's stock purchased by related party (in shares) \| shares										424,000	1,665,000	3,505,000
Aggregate purchase price of common stock										$ 4	$ 17	$ 35
GSK
Information related to collaborative arrangements
Royalties from a related party										66,887	18,417	1,945
Less: amortization of capitalized fees paid to a related party										(13,823)	(11,066)	(743)
Royalty revenue										53,064	7,351	1,202
Total net revenue										$ 53,949	8,433	4,532
Contingent payments and royalties receivable (as a percent)										15.00%
Reimbursement of certain research and development costs to the entity										$ 0	100	500
GSK \| Theravance Biopharma
Information related to collaborative arrangements
Contingent payments and royalties receivable (as a percent)										85.00%
GSK \| MABA
Information related to collaborative arrangements
Potential future contingent payments receivable		$ 363,000								$ 363,000
Percentage of milestone payment										15.00%
Long-acting beta agonist (LABA) collaboration \| GSK
Information related to collaborative arrangements
Revenue from collaborative arrangements										$ 0	0	1,815
Milestone fees paid											220,000
Royalty rate for first level of annual global net sales (as a percent)										15.00%
Annual global sales level used to determine royalty rate										$ 3,000,000
Royalty rate for sales above first level of annual global net sales (as a percent)										5.00%
Long-acting beta agonist (LABA) collaboration \| GSK \| Minimum
Information related to collaborative arrangements
Royalty rate for combination products (as a percent)										6.50%
Long-acting beta agonist (LABA) collaboration \| GSK \| Maximum
Information related to collaborative arrangements
Royalty rate for combination products (as a percent)										10.00%
2004 Strategic alliance \| GSK \| MABA
Information related to collaborative arrangements
Revenue from collaborative arrangements										$ 885	$ 1,082	$ 1,515
Number of preclinical MABA compounds discovered \| item	6
Governance agreement \| GSK \| Common Stock
Information related to collaborative arrangements
Company's stock purchased by related party (in shares) \| shares										424,081
Aggregate purchase price of common stock										$ 6,500

Available-for-Sale Securities and Fair Value Measurements (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Available-for-sale securities
Amortized Cost	$ 176,778	$ 285,483
Gross Unrealized Gains	0	35
Gross Unrealized Losses	(2)	(122)
Other Than Temporary Impairment Loss	0	(3,752)	$ 0
Estimated Fair Value	$ 176,776	281,644
Maturity period for marketable securities
Maximum contractual maturity period	1 year
Average duration	1 month
Proceeds from sale of available-for-sale securities	$ 108,077	7,211	$ 22,600
Theravance Biopharma
Maturity period for marketable securities
Gain on sales of the securities	1,200
Issuer of available-for-securities other than Theravance Biopharma
Maturity period for marketable securities
Proceeds from sale of available-for-sale securities	100,400
Cash and cash equivalents
Available-for-sale securities
Estimated Fair Value	148,673	95,090
Short-term investments
Available-for-sale securities
Estimated Fair Value	28,103	143,698
Marketable securities
Available-for-sale securities
Estimated Fair Value	0	42,856
U.S. government securities
Available-for-sale securities
Amortized Cost		30,019
Gross Unrealized Gains		24
Gross Unrealized Losses		0
Other Than Temporary Impairment Loss		0
Estimated Fair Value		30,043
U.S. government agency securities
Available-for-sale securities
Amortized Cost	14,406	34,756
Gross Unrealized Gains	0	6
Gross Unrealized Losses	(1)	(12)
Other Than Temporary Impairment Loss	0	0
Estimated Fair Value	14,405	34,750
Corporate notes
Available-for-sale securities
Amortized Cost	2,702	80,880
Gross Unrealized Gains	0	5
Gross Unrealized Losses	(1)	(110)
Other Than Temporary Impairment Loss	0	0
Estimated Fair Value	2,701	80,775
Commercial paper
Available-for-sale securities
Amortized Cost	10,997	34,469
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Other Than Temporary Impairment Loss	0	0
Estimated Fair Value	10,997	34,469
Equity securities \| Theravance Biopharma
Available-for-sale securities
Amortized Cost		10,269
Gross Unrealized Gains		0
Gross Unrealized Losses		0
Other Than Temporary Impairment Loss		(3,752)
Estimated Fair Value		6,517
Money market funds
Available-for-sale securities
Amortized Cost	148,673	95,090
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Other Than Temporary Impairment Loss	0	0
Estimated Fair Value	$ 148,673	$ 95,090

Available-for-Sale Securities and Fair Value Measurements (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2015
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	$ 281,644	$ 176,776
U.S. government securities
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	30,043
U.S. government agency securities
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	34,750	14,405
Corporate notes
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	80,775	2,701
Commercial paper
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	34,469	10,997
Equity securities \| Theravance Biopharma
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	6,517
Recognized losses	3,800
Money market funds
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	95,090	148,673
Recurring basis
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	281,644	176,776
Recurring basis \| U.S. government securities
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	30,043
Recurring basis \| U.S. government agency securities
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	34,750	14,405
Recurring basis \| Corporate notes
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	80,775	2,701
Recurring basis \| Commercial paper
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	34,469	10,997
Recurring basis \| Equity securities \| Theravance Biopharma
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	6,517
Recurring basis \| Money market funds
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	95,090	148,673
Recurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	131,650	148,673
Recurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1 \| U.S. government securities
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	30,043
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 and liabilities
Total assets measured at fair value	0	0
Recurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1 \| Corporate notes
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	0	0
Recurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1 \| Commercial paper
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	0	0
Recurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1 \| Equity securities \| Theravance Biopharma
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	6,517
Recurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1 \| Money market funds
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	95,090	148,673
Recurring basis \| Significant Other Observable Inputs, Level 2
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	149,994	28,103
Recurring basis \| Significant Other Observable Inputs, Level 2 \| U.S. government securities
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	0
Recurring basis \| Significant Other Observable Inputs, Level 2 \| U.S. government agency securities
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	34,750	14,405
Recurring basis \| Significant Other Observable Inputs, Level 2 \| Corporate notes
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	80,775	2,701
Recurring basis \| Significant Other Observable Inputs, Level 2 \| Commercial paper
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	34,469	10,997
Recurring basis \| Significant Other Observable Inputs, Level 2 \| Equity securities \| Theravance Biopharma
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	0
Recurring basis \| Significant Other Observable Inputs, Level 2 \| Money market funds
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	0	0
Recurring basis \| Significant Unobservable Inputs, Level 3
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	0	0
Recurring basis \| Significant Unobservable Inputs, Level 3 \| U.S. government securities
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	0
Recurring basis \| Significant Unobservable Inputs, Level 3 \| U.S. government agency securities
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	0	0
Recurring basis \| Significant Unobservable Inputs, Level 3 \| Corporate notes
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	0	0
Recurring basis \| Significant Unobservable Inputs, Level 3 \| Commercial paper
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	0	0
Recurring basis \| Significant Unobservable Inputs, Level 3 \| Equity securities \| Theravance Biopharma
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	0
Recurring basis \| Significant Unobservable Inputs, Level 3 \| Money market funds
Estimated fair values of entity's financial assets and liabilities
Total assets measured at fair value	0	0
Nonrecurring basis
Estimated fair values of entity's financial assets and liabilities
Total fair value of liabilities	653,506	660,070
Nonrecurring basis \| Convertible Subordinated Notes Due 2023
Estimated fair values of entity's financial assets and liabilities
Convertible subordinated notes due 2023	197,095	189,100
Nonrecurring basis \| 9% fixed rate term notes due 2029
Estimated fair values of entity's financial assets and liabilities
Non-recourse notes due 2029	456,411	470,970
Nonrecurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1
Estimated fair values of entity's financial assets and liabilities
Total fair value of liabilities	0	0
Nonrecurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1 \| Convertible Subordinated Notes Due 2023
Estimated fair values of entity's financial assets and liabilities
Convertible subordinated notes due 2023	0	0
Nonrecurring basis \| Quoted Prices in Active Markets for Identical Assets, Level 1 \| 9% fixed rate term notes due 2029
Estimated fair values of entity's financial assets and liabilities
Non-recourse notes due 2029	0	0
Nonrecurring basis \| Significant Other Observable Inputs, Level 2
Estimated fair values of entity's financial assets and liabilities
Total fair value of liabilities	653,506	660,070
Nonrecurring basis \| Significant Other Observable Inputs, Level 2 \| Convertible Subordinated Notes Due 2023
Estimated fair values of entity's financial assets and liabilities
Convertible subordinated notes due 2023	197,095	189,100
Nonrecurring basis \| Significant Other Observable Inputs, Level 2 \| 9% fixed rate term notes due 2029
Estimated fair values of entity's financial assets and liabilities
Non-recourse notes due 2029	456,411	470,970
Nonrecurring basis \| Significant Unobservable Inputs, Level 3
Estimated fair values of entity's financial assets and liabilities
Total fair value of liabilities	0	0
Nonrecurring basis \| Significant Unobservable Inputs, Level 3 \| Convertible Subordinated Notes Due 2023
Estimated fair values of entity's financial assets and liabilities
Convertible subordinated notes due 2023	0	0
Nonrecurring basis \| Significant Unobservable Inputs, Level 3 \| 9% fixed rate term notes due 2029
Estimated fair values of entity's financial assets and liabilities
Non-recourse notes due 2029	$ 0	$ 0

Capitalized Fees Paid to a Related Party (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Capitalized Fees paid to a Related Party
Net Carrying Value	$ 194,368	$ 208,191
Amortization of capitalized fees paid to a related party	13,823	11,066	$ 743
Estimated amortization expense for the year 2016	13,800
Estimated amortization expense for the year 2017	13,800
Estimated amortization expense for the year 2018	13,800
Estimated amortization expense for the year 2019	13,800
Estimated amortization expense for the year 2020	13,800
Estimated amortization expense thereafter	125,300
GSK
Capitalized Fees paid to a Related Party
Amortization of capitalized fees paid to a related party	$ 13,823	11,066	$ 743
GSK \| LABA Collaboration
Capitalized Fees paid to a Related Party
Weighted Average Remaining Amortization Period	14 years 1 month 6 days
Gross Carrying Value	$ 220,000	220,000
Accumulated Amortization	(25,632)	(11,809)
Net Carrying Value	$ 194,368	$ 208,191

Stock-Based Compensation (Details)		1 Months Ended	3 Months Ended	12 Months Ended
Stock-Based Compensation (Details)	Jun. 02, 2014	May 31, 2014 USD ($)	Jun. 30, 2014 USD ($)	Dec. 31, 2015 USD ($) installment item shares	Dec. 31, 2014 USD ($) shares	Dec. 31, 2013 USD ($)	Dec. 31, 2011 shares
Stock-based compensation
Stock-based compensation expense				$ 6,873,000	$ 27,390,000	$ 25,687,000
Number of shares of Theravance Biopharma issued for every share of Theravance	0.286
Performance-contingent
Stock-based compensation
Outstanding (in shares) \| shares				1,305,000	1,772,000
Employee Stock Purchase Plan
Stock-based compensation
Shares remaining available for issuance \| shares				265,711
Purchase price as a percentage of fair market value of stock				85.00%
Consecutive and overlapping offering periods				24 months
Number of offering periods \| item				4
Duration of purchase period				6 months
Maximum contributions as a percentage of employee's eligible compensation				15.00%
Maximum number of shares an employee may purchase during any purchase period \| shares				2,500
Maximum value of shares an employee may purchase				$ 25,000
Stock-based compensation expense				129,000	$ 10,000	536,000
RSAs
Stock-based compensation
Stock-based compensation expense				2,850,000	7,575,000	9,723,000
RSAs \| Performance-contingent
Stock-based compensation
Stock-based compensation expense				613,000	10,580,000	1,061,000
RSUs
Stock-based compensation
Stock-based compensation expense				$ 2,492,000	$ 4,564,000	10,174,000
Outstanding (in shares) \| shares				459,000	775,000
Additional disclosures
Incremental stock-based compensation expense arising out of spin-off			$ 1,200,000
Share based compensation expense included in discontinued operations			$ 900,000
RSUs \| Non-employee director
Additional disclosures
One time grant of shares value				$ 250,000
Pro rata shares grant value				$ 250,000
Number of annual installments \| installment				2
RSUs \| Performance-contingent
Stock-based compensation
Stock-based compensation expense				$ 0	$ 3,000	$ 61,000
Outstanding (in shares) \| shares				0
2012 Equity Incentive Plan
Stock-based compensation
Shares remaining available for issuance \| shares				3,466,041
Special Long-Term Retention and Incentive Cash Awards Program \| RSAs \| Performance-contingent
Stock-based compensation
Shares of common stock approved and authorized for issuance \| shares							1,290,000
Timeframe for achievement of performance conditions							6 years
Stock-based compensation expense		$ 7,000,000
Outstanding (in shares) \| shares				63,000

Stock-Based Compensation (Details 2) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Stock-based compensation
Stock-based compensation expense	$ 6,873	$ 27,390	$ 25,687
Total unrecognized compensation cost related to unvested stock-based compensation	11,258
Stock options
Stock-based compensation
Stock-based compensation expense	789	4,658	4,132
Total unrecognized compensation cost related to unvested stock-based compensation	$ 1,531
Weighted-average remaining service period of recognition of unrecognized compensation cost	2 years 4 months 24 days
RSUs
Stock-based compensation
Stock-based compensation expense	$ 2,492	4,564	10,174
Total unrecognized compensation cost related to unvested stock-based compensation	$ 1,446
Weighted-average remaining service period of recognition of unrecognized compensation cost	1 year 1 month 6 days
RSUs \| Performance-contingent
Stock-based compensation
Stock-based compensation expense	$ 0	3	61
RSAs
Stock-based compensation
Stock-based compensation expense	2,850	7,575	9,723
Total unrecognized compensation cost related to unvested stock-based compensation	$ 8,275
Weighted-average remaining service period of recognition of unrecognized compensation cost	3 years 1 month 6 days
RSAs \| Performance-contingent
Stock-based compensation
Stock-based compensation expense	$ 613	10,580	1,061
Total unrecognized compensation cost related to unvested stock-based compensation	$ 6
Weighted-average remaining service period of recognition of unrecognized compensation cost	2 years 1 month 6 days
Employee Stock Purchase Plan
Stock-based compensation
Stock-based compensation expense	$ 129	10	536
Continuing operations
Stock-based compensation
Stock-based compensation expense	6,873	15,761	7,898
Discontinued operation
Stock-based compensation
Stock-based compensation expense	0	11,629	17,789
Research and development \| Continuing operations
Stock-based compensation
Stock-based compensation expense	1,036	2,781	573
General and administrative \| Continuing operations
Stock-based compensation
Stock-based compensation expense	$ 5,837	$ 12,980	$ 7,325

Stock-Based Compensation (Details 3) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Performance-contingent
Number of shares outstanding subject to RSUs and vesting or performance conditions with vesting
Balance at the beginning of the period (in shares)	1,772,000
Granted (in shares)	437,000
Released RSUs and RSAs (in shares)	(883,000)
Forfeited (in shares)	(21,000)
Balance at the end of the period (in shares)	1,305,000	1,772,000
Weighted-average fair value per share at grant
Balance at the beginning of the period (in dollars per share)	$ 25.78
Granted (in dollars per share)	13.76
Released RSUs and RSAs (in dollars per share)	25.22
Forfeited (in dollars per share)	20.33
Balance at the end of the period (in dollars per share)	$ 18.00	$ 25.78
Stock options
Number of Shares Subject to Outstanding Options
Balance at the beginning of the period (in shares)	5,422,000
Exercised (in shares)	(111,000)
Forfeited (in shares)	(1,049,000)
Balance at the end of the period (in shares)	4,262,000	5,422,000
Weighted-average exercise price of outstanding options
Balance at the beginning of the period (in dollars per share)	$ 22.46
Exercised (in dollars per share)	13.75
Forfeited (in dollars per share)	21.19
Balance at the end of the period (in dollars per share)	$ 23.00	$ 22.46
Additional disclosures
Aggregate intrinsic value of options outstanding	$ 0.1
Aggregate intrinsic value of options exercisable	0.1
Total intrinsic value of options exercised	0.5	$ 17.5	$ 41.4
Total estimated fair value of options vested	$ 10.0	$ 5.7	$ 3.7
Weighted-average assumptions
Risk-free interest rate, minimum (as a percent)		1.60%	0.80%
Risk-free interest rate, maximum (as a percent)		2.10%	2.00%
Volatility, minimum (as a percent)		52.00%	58.00%
Volatility, maximum (as a percent)		60.00%	60.00%
Weighted-average estimated fair value of shares granted		$ 15.63	$ 19.96
Stock options \| Minimum
Weighted-average assumptions
Expected life (in years)		5 years	5 years
Dividend yield (as a percent)		3.00%
Stock options \| Maximum
Weighted-average assumptions
Expected life (in years)		6 years	6 years
Dividend yield (as a percent)		4.00%
RSUs
Number of shares outstanding subject to RSUs and vesting or performance conditions with vesting
Balance at the beginning of the period (in shares)	775,000
Granted (in shares)	141,000
Released RSUs and RSAs (in shares)	(327,000)
Forfeited (in shares)	(130,000)
Balance at the end of the period (in shares)	459,000	775,000
Weighted-average fair value per share at grant
Balance at the beginning of the period (in dollars per share)	$ 18.53
Granted (in dollars per share)	15.50
Released RSUs and RSAs (in dollars per share)	17.66
Forfeited (in dollars per share)	18.07
Balance at the end of the period (in dollars per share)	$ 18.34	$ 18.53
RSUs \| Performance-contingent
Number of shares outstanding subject to RSUs and vesting or performance conditions with vesting
Balance at the end of the period (in shares)	0
Employee Stock Purchase Plan
Weighted-average assumptions
Risk-free interest rate, minimum (as a percent)	0.10%	0.10%	0.10%
Risk-free interest rate, maximum (as a percent)	0.90%	0.50%	0.30%
Volatility, minimum (as a percent)	44.00%	43.00%	56.00%
Volatility, maximum (as a percent)	69.00%	55.00%	61.00%
Dividend yield (as a percent)		8.00%
Weighted-average estimated fair value of shares granted	$ 4.52	$ 4.49	$ 16.44
Employee Stock Purchase Plan \| Minimum
Weighted-average assumptions
Expected life (in years)	6 months	6 months	6 months
Dividend yield (as a percent)	0.00%
Employee Stock Purchase Plan \| Maximum
Weighted-average assumptions
Expected life (in years)	2 years	2 years	2 years
Dividend yield (as a percent)	6.00%

Long-Term Debt (Details) $ / shares in Units, $ in Thousands			1 Months Ended	12 Months Ended				16 Months Ended	21 Months Ended
	Jul. 15, 2014 $ / shares shares	Jun. 01, 2014 $ / shares $ / item	Jan. 31, 2013 USD ($) item $ / shares $ / item shares	Apr. 17, 2017	Dec. 31, 2015 USD ($) $ / shares $ / item	Dec. 31, 2014 USD ($) shares	Dec. 31, 2013 USD ($) shares	Apr. 17, 2016	Dec. 31, 2015 USD ($) $ / shares $ / item	Apr. 30, 2014 USD ($)
Debt disclosures
Convertible Subordinated Notes due 2023					$ 255,109	$ 255,109			$ 255,109
Non-Recourse Notes Payable due 2029					493,162	470,527			493,162
Total long term debt					748,271	725,636			748,271
Proceeds from issuances of note payable, net of debt issuance costs					0	434,677	$ 281,622
Interest amount added to principal balance					22,635	$ 20,527	$ 0
Common Stock
Debt disclosures
Number of common shares issued upon debt conversion \| shares						1,520,000	6,668,000
Convertible Subordinated Notes Due 2023
Debt disclosures
Convertible Subordinated Notes due 2023					$ 255,109	$ 255,109			$ 255,109
Loan amount			$ 287,500
Proceeds from issuances of note payable, net of debt issuance costs			$ 281,200
Interest rate (as a percent)					2.125%				2.125%
Conversion rate of shares		0.0469087	0.0359903		0.0505818
Conversion price of convertible notes into common stock (in dollars per share) \| $ / shares		$ 21.32	$ 27.79		$ 19.77				$ 19.77
Percentage of principal amount at which the entity may be forced to redeem some or all notes as a result of a fundamental change (as defined)			100.00%
Convertible Subordinated Notes Due 2023 \| Common Stock
Debt disclosures
Conversion price of convertible notes into common stock (in dollars per share) \| $ / shares	$ 21.32
Number of common shares issued upon debt conversion \| shares	1,519,402
Number of common stares received \| shares	149,645
Convertible Subordinated Notes Due 2023 \| Privately-negotiated capped call option
Debt disclosures
Payments for capped call options			$ 36,800
Number of derivative instruments purchased \| item			2
Strike price for the underlying number of shares (in dollars per share) \| $ / shares		$ 21.32	$ 27.79		$ 19.77
Cap price for the underlying number of shares (in dollars per share) \| $ / item		29.16	38.00		27.04				27.04
Convertible Subordinated Notes Due 2023 \| Stock prices below $27.79 per share \| Maximum
Debt disclosures
Net shares settlement payable to the entity \| shares			2,779,659
Convertible Subordinated Notes Due 2023 \| Stock prices below $27.79 per share \| Minimum
Debt disclosures
Net shares settlement payable to the entity \| shares			0
9% fixed rate term notes due 2029
Debt disclosures
Non-Recourse Notes Payable due 2029					$ 493,162	470,527			$ 493,162
Loan amount										$ 450,000
Interest rate (as a percent)										9.00%
Interest amount added to principal balance					$ 22,700	$ 20,500			$ 43,200
Debt issuance costs										$ 15,300
9% fixed rate term notes due 2029 \| GSK
Debt disclosures
Percentage of royalties from global net sales to secure debt										40.00%
9% fixed rate term notes due 2029 \| Future
Debt disclosures
Debt prepayment premium (as a percent)				2.50%				5.00%

Shareholders' Deficit (Details) - USD ($) $ / shares in Units, $ in Thousands							1 Months Ended		3 Months Ended								12 Months Ended
	Oct. 30, 2015	Jul. 24, 2015	Apr. 24, 2015	Feb. 20, 2015	Oct. 16, 2014	Jul. 25, 2014	Dec. 31, 2015	Nov. 30, 2015	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013	Oct. 28, 2015
Dividends
Cash dividend declared per common share (in dollars per share)		$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25			$ 0	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0	$ 0	$ 0.75	$ 0.50	$ 0.00
Dividends paid																	$ 87,331	$ 56,988	$ 0
$150 million share repurchase program
Dividends
Amount approved under share repurchase program																				$ 150,000
$150 million share repurchase program \| Common Stock
Dividends
Number of shares purchased and retired							100,000
Average repurchase price per share, including associated fees and expenses							$ 9.95
Share repurchase price							$ 1,000
October 2015 TO
Dividends
Amount approved under share repurchase program	$ 75,000
Number of shares purchased and retired								2,576,000
Average repurchase price per share, including associated fees and expenses								$ 9.56
Share repurchase price								$ 24,600
October 2015 TO \| Minimum
Dividends
Price per share under share repurchase program	$ 8.50
October 2015 TO \| Maximum
Dividends
Price per share under share repurchase program	$ 9.25

Commitments and Contingencies (Details) - Lease payments guarantee $ in Millions	Dec. 31, 2015 USD ($)
Operating Leases
Total lease payments	$ 27.6
Estimated fair value of the guarantee	$ 1.3

Commitments and Contingencies (Details 2) - Theravance Biopharma $ in Thousands	12 Months Ended
	Dec. 31, 2015 USD ($) ft²	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)
Operating Leases
Area of office space in South San Francisco, California (in square feet) \| ft²	4,847
Operating lease rent expenses	$ 200	$ 3,000	$ 6,000
Future minimum lease payments
2016	192
2017	197
2018	203
2019	210
2020	89
Thereafter	0
Total	$ 891

Income Taxes (Details) $ in Thousands	12 Months Ended
Income Taxes (Details) $ in Thousands	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($) item	Dec. 31, 2013 USD ($)
Income Taxes
Income tax expenses	$ 0	$ 0	$ 0
Deferred tax assets:
Net operating loss carryforwards	392,000	386,000
Deferred revenues	1,000	2,000
Research and development tax credit carryforwards	53,000	53,000
Other	17,000	18,000
Total deferred tax assets	463,000	459,000
Valuation allowance	(463,000)	(459,000)
Net deferred tax assets	0	0
Information related to valuation allowance
Increase (decrease) in valuation allowance	$ 4,700	(103,800)	$ 70,100
Federal net operating losses		252,700
Valuation Allowance		88,600
Deferred tax assets		$ 9,200
The differences between the U.S. federal statutory income tax rate to the Company's effective tax rate
U.S. federal statutory income tax rate (as a percent)	34.00%	35.00%	34.00%
Non-deductible executive compensation (as a percent)	(1.94%)	(0.16%)	(0.07%)
Stock-based compensation (as a percent)	(0.23%)	(1.11%)	0.28%
Federal and state research credits (as a percent)	(0.00%)	12.66%	3.63%
Effect of Spin-Off Transaction (as a percent)	0.00%	(203.20%)	0.00%
Other (as a percent)	(0.56%)	(4.04%)	(2.51%)
Change in valuation allowance (as a percent)	(31.27%)	160.85%	(35.33%)
Effective tax rate (as a percent)	0.00%	0.00%	0.00%
Gross unrecognized tax benefits
Gross unrecognized tax benefits at the beginning of the period	$ 15,459	$ 57,420	$ 52,500
Gross decrease for tax positions for prior years		(42,650)	(565)
Gross increase in tax positions for current year	29	689	5,485
Gross unrecognized tax benefits at the end of the period	15,488	15,459	$ 57,420
Accrued interest or penalties due to our net operating losses	0	$ 0
Number of ownership changes \| item		2
Federal
Operating Loss and Tax Credit Carryforward
Net operating loss carryforwards	1,174,700
Federal \| Research and Development
Operating Loss and Tax Credit Carryforward
Tax credit carryforward amount	45,200
State
Operating Loss and Tax Credit Carryforward
Net operating loss carryforwards	676,500
State \| Research
Operating Loss and Tax Credit Carryforward
Tax credit carryforward amount	$ 32,300

Spin-Off of Theravance Biopharma, Inc. (Details) $ in Thousands	Jun. 02, 2014 USD ($)	Jun. 01, 2014 USD ($)
Spin-Off of Theravance Biopharma, Inc.
Cash, cash equivalents and marketable securities		$ 393,000
Number of shares of Theravance Biopharma issued for every share of Theravance	0.286
Theravance Biopharma \| Discontinued operation
Allocation of net book value of assets transferred pursuant to spin-off
Cash and cash equivalents	$ 277,541
Marketable investment securities	115,129
Accounts receivable	125
Reimbursement of certain liabilities	16,983
Prepaid and other current assets	3,172
Inventories	14,328
Fixed assets, net	9,580
Accrued liabilities	(22,342)
Deferred revenue	(6,694)
Other liabilities	(4,944)
Net book value of assets contributed	$ 402,878

Discontinued Operations (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended				12 Months Ended
Discontinued Operations (Details) - USD ($) $ in Thousands	Jun. 30, 2013	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Components of research and drug development operations presented on the condensed consolidated statements of operations
Net revenues						$ 0	$ 3,129	$ 226
Income (loss) from discontinued operations		$ 0	$ 0	$ (43,413)	$ (51,521)	$ 0	$ (94,934)	$ (140,068)
Termination fee received recorded as discontinued operations	$ 10,000

- Definition

Amount after tax of income (loss) from a discontinued operation including the portion attributable to the noncontrolling interest. Includes, but is not limited to, the income (loss) from operations during the phase-out period, gain (loss) on disposal, gain (loss) for reversal of write-down (write-down) to fair value, less cost to sell, and adjustments to a prior period gain (loss) on disposal.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.12)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 5C
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=51717284&loc=SL51721675-107760

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 225
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03.14)
-URI http://asc.fasb.org/extlink&oid=26872669&loc=d3e20235-122688

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=51716988&loc=d3e1012-107759

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 3B
-URI http://asc.fasb.org/extlink&oid=51716988&loc=SL51721525-107759

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 3A
-URI http://asc.fasb.org/extlink&oid=51716988&loc=SL51721523-107759

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 45
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=51716988&loc=d3e957-107759

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=51717284&loc=d3e1361-107760

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph 13
-Article 7

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 03
-Paragraph 15
-Article 5

+ Details

Subsequent Events (Details) - Common Stock - Subsequent events $ / shares in Units, $ in Millions	2 Months Ended
	Feb. 15, 2016 USD ($) $ / shares shares
Subsequent Event
Number of shares purchased and retired \| shares	1,419,641
Average repurchase price (in dollars per share) \| $ / shares	$ 9.53
Share repurchase price \| $	$ 13.5

Supplementary Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands						3 Months Ended								12 Months Ended
	Jul. 24, 2015	Apr. 24, 2015	Feb. 20, 2015	Oct. 16, 2014	Jul. 25, 2014	Dec. 31, 2015	Sep. 30, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2013
Supplementary Financial Data
Net revenue						$ 22,836	$ 13,562	$ 10,655	$ 6,896	$ 7,280	$ 999	$ 934	$ (780)	$ 53,949	$ 8,433	$ 4,532
Total operating expenses						(5,543)	(5,128)	(5,547)	(6,151)	(7,150)	(10,541)	(10,728)	(13,943)	(22,369)	(42,362)	(33,327)
Income (loss) from operations						17,293	8,434	5,108	745					31,580	(33,929)	(28,795)
Loss from continuing operations										(15,926)	(21,271)	(20,151)	(16,182)	(18,760)	(73,530)	(30,633)
Income (loss) from discontinued operations										0	0	(43,413)	(51,521)	0	(94,934)	(140,068)
Net income (loss)						$ 4,301	$ (4,584)	$ (7,810)	$ (10,667)	$ (15,926)	$ (21,271)	$ (63,564)	$ (67,703)	$ (18,760)	$ (168,464)	$ (170,701)
Basic and diluted net loss per common share:
Continuing operations, net of tax										$ (0.14)	$ (0.19)	$ (0.18)	$ (0.15)	$ (0.16)	$ (0.66)	$ (0.30)
Discontinued operations (in dollars per share)										0.00	0.00	(0.39)	(0.47)	0.00	(0.84)	(1.37)
Basic and diluted net loss per share (in dollars per share)						$ 0.04	$ (0.04)	$ (0.07)	$ (0.09)	(0.14)	(0.19)	(0.57)	(0.62)	(0.16)	(1.50)	(1.67)
Cash dividend declared per common share (in dollars per share)	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0.25	$ 0	$ 0	$ 0.75	$ 0.50	$ 0.00