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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2011	Feb. 17, 2012	Jun. 30, 2011
Document and Entity Information
Entity Registrant Name	THERAVANCE INC
Entity Central Index Key	0001080014
Document Type	10-K
Document Period End Date	Dec. 31, 2011
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			$ 961,098,794
Entity Common Stock, Shares Outstanding		86,149,162
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 44,778	$ 163,333
Marketable securities	196,137	146,301
Receivable from related party	223	194
Notes receivable, current	100	531
Prepaid and other current assets	3,525	5,995
Total current assets	244,763	316,354
Restricted cash	893	893
Property and equipment, net	10,372	10,215
Notes receivable, non-current	240	400
Other assets, non-current	2,514	3,340
Total assets	258,782	331,202
Current liabilities:
Accounts payable	5,813	2,128
Accrued personnel related expenses	9,643	8,617
Accrued clinical and development expenses	6,956	2,801
Accrued interest on convertible subordinated notes	2,372	2,372
Other accrued liabilities	1,946	2,008
Note payable and capital lease, current	69	206
Deferred revenue, current	18,697	21,922
Total current liabilities	45,496	40,054
Convertible subordinated notes	172,500	172,500
Deferred rent	5,821	3,574
Note payable and capital lease, non-current		69
Deferred revenue, non-current	122,017	137,425
Commitments and contingencies (Notes 3 and 9)
Stockholders' net capital deficiency:
Preferred stock, $0.01 par value, 230 shares authorized, no shares issued and outstanding
Additional paid-in capital	1,228,037	1,177,359
Accumulated other comprehensive income	16	33
Accumulated deficit	(1,315,960)	(1,200,616)
Total stockholders' net capital deficiency	(87,052)	(22,420)
Total liabilities and stockholders' net capital deficiency	258,782	331,202
Common stock
Stockholders' net capital deficiency:
Common stock	$ 855	710
Class A common stock
Stockholders' net capital deficiency:
Common stock		$ 94

Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Dec. 31, 2011	Dec. 31, 2010
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	230	230
Common stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	200,000	200,000
Common stock, outstanding shares	85,543	70,950
Class A common stock
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	30,000	30,000
Common stock, outstanding shares	0	9,402

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Revenue (including amounts from a related party of $9,658 in 2011, $9,826 in 2010, and $15,073 in 2009)	$ 24,512	$ 24,223	$ 24,374
Operating expenses:
Research and development	103,568	75,070	77,524
General and administrative	30,681	27,476	27,066
Restructuring charges			1,145
Total operating expenses	134,249	102,546	105,735
Loss from operations	(109,737)	(78,323)	(81,361)
Interest and other income	415	505	2,111
Interest expense	(6,022)	(6,044)	(6,052)
Net loss	$ (115,344)	$ (83,862)	$ (85,302)
Basic and diluted net loss per share (in dollars per share)	$ (1.41)	$ (1.16)	$ (1.35)
Shares used in computing basic net loss per share (in shares)	82,051	72,070	63,027
Shares used in computing diluted net loss per share (in shares)	82,051	72,070	63,027

Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Consolidated Statements of Operations
Revenue from related party	$ 9,658	$ 9,826	$ 15,073

Consolidated Statements of Stockholders' Net Capital Deficiency (Equity) - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock Common Stock	Common Stock Class A Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Income	Accumulated Deficit	Comprehensive Income
Balance at Dec. 31, 2008	$ (134,949)	$ 525	$ 94	$ 895,383	$ 501	$ (1,031,452)
Balance (in shares) at Dec. 31, 2008		52,576	9,402
Increase (Decrease) in Stockholders' Equity
Exercise of stock options, and Issuance of common stock in settlement of restricted stock units, stock awards and purchase plan	11,723	$ 24		11,699
Exercise of stock options, and Issuance of common stock in settlement of restricted stock units, stock awards and purchase plan (in shares)		2,254
Stock-based compensation	20,000			20,000
Comprehensive loss:
Net loss	(85,302)					(85,302)	$ (85,302)
Net unrealized gain (loss) on marketable securities	(466)				(466)		(466)
Total comprehensive loss	(85,768)						(85,768)
Balance at Dec. 31, 2009	(188,994)	$ 549	$ 94	927,082	35	(1,116,754)
Balance (in shares) at Dec. 31, 2009		54,830	9,402
Increase (Decrease) in Stockholders' Equity
Exercise of stock options, and Issuance of common stock in settlement of restricted stock units, stock awards and purchase plan	8,761	$ 17		8,744
Exercise of stock options, and Issuance of common stock in settlement of restricted stock units, stock awards and purchase plan (in shares)		1,745
Issuance of common stock for cash in secondary stock offering, net of expenses of $5.7 million	93,478	$ 86		93,392
Issuance of common stock for cash in secondary stock offering, net of expenses of $5.7 million (in shares)		8,625
Issuance of common stock in private placement to a related party, net of expenses of $0.2 million in 2010	129,190	$ 58		129,132
Issuance of common stock in private placement to a related party, net of expenses of $0.2 million in 2010		5,750
Stock-based compensation	19,009			19,009
Comprehensive loss:
Net loss	(83,862)					(83,862)	(83,862)
Net unrealized gain (loss) on marketable securities	(2)				(2)		(2)
Total comprehensive loss	(83,864)						(83,864)
Balance at Dec. 31, 2010	(22,420)	$ 710	$ 94	1,177,359	33	(1,200,616)
Balance (in shares) at Dec. 31, 2010		70,950	9,402
Increase (Decrease) in Stockholders' Equity
Exercise of stock options, and Issuance of common stock in settlement of restricted stock units, stock awards and purchase plan	12,195	$ 21		12,174
Exercise of stock options, and Issuance of common stock in settlement of restricted stock units, stock awards and purchase plan (in shares)		2,134
Issuance of common stock in private placement to a related party, net of expenses of $0.2 million in 2010	13,618	$ 5		13,613
Issuance of common stock in private placement to a related party, net of expenses of $0.2 million in 2010		574
Conversion of Class A common stock (Note 3)		$ 94	$ (94)
Conversion of Class A common stock (Note 3) (in shares)		9,402	(9,402)
Stock-based compensation	24,916	$ 25		24,891
Stock-based compensation (in shares)		2,483
Comprehensive loss:
Net loss	(115,344)					(115,344)	(115,344)
Net unrealized gain (loss) on marketable securities	(17)				(17)		(17)
Total comprehensive loss	(115,361)						$ (115,361)
Balance at Dec. 31, 2011	$ (87,052)	$ 855	$ 0	$ 1,228,037	$ 16	$ (1,315,960)
Balance (in shares) at Dec. 31, 2011		85,543	0

Consolidated Statements of Stockholders' Net Capital Deficiency (Parenthetical) $ in Millions	12 Months Ended
	Dec. 31, 2010 USD ($)
Consolidated Statements of Stockholders' Net Capital Deficiency
Issuance of common stock for cash in secondary stock offering, expenses	$ 5.7
Issuance of common stock in private placement to a related party, expenses	$ 0.2

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Cash flows from operating activities
Net loss	$ (115,344)	$ (83,862)	$ (85,302)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	7,583	6,336	5,541
Stock-based compensation	24,916	19,009	20,000
Loss on sale of equipment		33
Forgiveness of notes receivable	16	8	(13)
Changes in operating assets and liabilities:
Receivables	(29)	81	14
Prepaid and other assets	2,288	649	2,741
Accounts payable	3,312	(236)	(1,625)
Accrued personnel related expenses, accrued interest on convertible subordinated notes and accrued liabilities	5,124	3,321	(3,689)
Deferred rent	2,429	1,446	(709)
Deferred revenue	(18,633)	(21,801)	4,589
Other long-term liabilities		(128)	389
Net cash used in operating activities	(88,338)	(75,144)	(58,064)
Cash flows from investing activities
Purchases of property and equipment	(3,628)	(861)	(744)
Purchases of marketable securities	(301,563)	(183,899)	(123,460)
Maturities of marketable securities	231,476	131,855	118,065
Sales of marketable securities	17,321	12,024	5,000
Sale of equipment		12
Release of restricted cash		417	2,500
Additions to notes receivable	(140)
Decrease in notes receivable	715	140	375
Net cash (used in) provided by investing activities	(55,819)	(40,312)	1,736
Cash flows from financing activities
Payments on notes payable and capital leases	(206)	(184)	(131)
Net proceeds from issuances of common stock	25,808	231,429	11,723
Net cash provided by financing activities	25,602	231,245	11,592
Net increase (decrease) in cash and cash equivalents	(118,555)	115,789	(44,736)
Cash and cash equivalents at beginning of period	163,333	47,544	92,280
Cash and cash equivalents at end of period	44,778	163,333	47,544
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$ 5,195	$ 5,217	5,229
Supplemental Disclosure of Non-Cash Investing Activity
Acquisition cost of property and equipment under capital lease			$ 154

Description of Operations and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Description of Operations and Summary of Significant Accounting Policies

Description of Operations and Summary of Significant Accounting Policies

1. Description of Operations and Summary of Significant Accounting Policies

Description of Operations

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

Principles of Consolidation

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

Use of Management's Estimates

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

Segment Reporting

The Company has determined that it operates in a single segment which is the research and development of human therapeutics. Revenues are generated primarily from the Company's collaborations with GlaxoSmithKline plc (GSK), located in the United Kingdom and, through 2011, Astellas Pharma Inc. (Astellas), located in Japan. All long-lived assets are maintained in the United States.

Cash and Cash Equivalents

The Company considers 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.

Under certain lease agreements and letters of credit, the Company has pledged cash and cash equivalents as collateral. Restricted cash related to such agreements was $0.9 million as of December 31, 2011 and December 31, 2010.

Marketable Securities

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

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

Fair Value of Financial Instruments

Financial instruments include cash equivalents, marketable securities, related party receivables, accounts payable, accrued liabilities and convertible subordinated notes. Marketable securities are carried at estimated fair value. The carrying value of cash equivalents, receivables from related party, accounts payable and accrued liabilities approximate their fair value due to the relatively short nature of these instruments. Convertible subordinated notes are described in Note 7.

Concentration of Credit Risks

The Company invests in a variety of financial instruments and, by its policy, limits 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.

Notes Receivable

The Company provided loans to certain employees to assist them primarily with the purchase of a primary residence, which collateralizes the resulting loans. There was no interest receivable related to the loans as of December 31, 2011 and December 31, 2010. The outstanding loans have maturity dates ranging from July 2012 through May 2014.

Inventory

Inventory is stated at the lower of cost or market value and is included in prepaid and other current assets in the accompanying consolidated balance sheets. Inventory is comprised of VIBATIV® active pharmaceutical ingredient. VIBATIV® has a limited shelf life. Astellas purchased VIBATIV® inventory from the Company at a cost of $1.2 million in 2011 and $2.0 million in 2010. The Company expensed inventory, on an average cost basis, that was no longer realizable of $0.5 million in 2011, $0.8 million in 2010 and $1.2 million in 2009. Inventory was valued at zero at December 31, 2011 and $1.7 million at December 31, 2010.

Property and Equipment

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

The Company capitalizes certain costs related to direct material and service costs for software obtained for internal use. Capitalized software costs are depreciated over 3 years.

Impairment of Long-Lived Assets

Long-lived assets include property and equipment. The carrying value of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the asset may not be recoverable. An impairment loss is recognized when the total of estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount.

Bonus Accruals

The Company has short-term bonus programs for eligible employees. Bonuses are determined based on various criteria, including the achievement of corporate, departmental and individual goals. Bonus accruals are estimated based on various factors, including target bonus percentages per level of employee and probability of achieving the goals upon which bonuses are based. The Company's management periodically reviews the progress made towards the goals under the bonus programs. As bonus accruals are dependent upon management's judgments of the likelihood of achieving the various goals, it is possible for bonus expense to vary significantly in future periods if changes occur in those management estimates.

Deferred Rent

Deferred rent consists of the difference between cash payments and the recognition of rent expense on a straight-line basis for the buildings the Company occupies. Rent expense is being recognized ratably over the life of the leases. Because the Company's facility operating leases provide for rent increases over the terms of the leases, average annual rent expense during the first 1.5 years of the leases exceeded the Company's actual cash rent payments. Also included in deferred rent are lease incentives of $2.6 million as of December 31, 2011, which is being recognized ratably over the life of the leases.

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (FASB) Subtopic ASC 605-25, "Revenue Recognition-Multiple-Element Arrangements." As of January 1, 2011, the Company adopted on a prospective basis the accounting updates to guidance ASC 605 "Revenue Recognition", subtopic ASC 605-25 "Revenue with Multiple Element Arrangements" and subtopic ASC 605-28 "Revenue Recognition-Milestone Method", which provides accounting guidance for revenue recognition for arrangements with multiple deliverables and guidance on defining the milestone and determining when the use of the milestone method of revenue recognition for research and development transactions is appropriate, respectively. The adoption of ASC 605-25 "Revenue with Multiple Element Arrangements" and the election of the milestone method under subtopic ASC 605-28 "Revenue Recognition-Milestone Method" did not have a material impact on the Company's consolidated financial statements. However, these updates will result in different accounting treatment for future new collaboration arrangements and substantive milestones earned after the dates of adoption.

The Company's revenues are related primarily to its collaboration arrangements with GSK and, through 2011, with Astellas (see Note 3, "Collaboration Arrangements" for more information). The Company's arrangements provide for various types of payments to the Company, including non-refundable upfront fees and milestone payments and royalty payments. The Company recognizes revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable, and collectability is reasonably assured.

For multiple-element arrangements entered into prior to January 1, 2011, the Company determined the deliverables under its collaboration agreements with GSK and Astellas did not meet the criteria required for separate accounting units for the purposes of revenue recognition. As a result, the Company recognized revenue from non-refundable, upfront fees and development milestone payments ratably over the term of its performance under the agreements. These upfront or milestone payments received, pending recognition as revenue, are recorded as deferred revenue and are classified as a short-term or long-term liability on the balance sheet to be amortized over the period of deferral. The Company periodically reviewed the estimated performance periods of its contracts based on the progress of its programs.

In accordance with ASC Subtopic 808-10, "Collaborative Arrangement," and pursuant to the Company's agreement with Astellas, the Company recognized as revenue the net impact of transactions with Astellas related to VIBATIV® inventory including revenue specifically attributable to any sales, and cost of inventory either transferred or expensed as unrealizable.

The Company recognizes royalty revenue on net sales in the period in which the royalties are earned based on net sales reporting provided by the Company's former collaboration partner, Astellas.

The Company has been reimbursed by GSK and Astellas for certain external development costs under their respective collaboration agreements. Such reimbursements have been reflected as a reduction of research and development expense and not as revenue.

For multiple-element arrangements entered into, or materially modified, subsequent to January 1, 2011, 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 the Company's control.

In addition, multiple deliverable revenue arrangement consideration is allocated at the inception of an arrangement to all deliverables using the relative selling price method. The Company also applies a selling price hierarchy for determining the selling price of a deliverable, which includes (1) vendor-specific objective evidence, if available, (2) third-party evidence, if vendor-specific objective evidence is not available, and (3) estimated selling price if neither vendor-specific nor third-party evidence is available.

Where a portion of non-refundable upfront license or other payments, or milestone payments received are allocated to continuing performance obligations under the terms of a collaborative agreement, it will be recorded as deferred revenue and recognized as revenue ratably over the term of its estimated performance period under the agreement. The Company determines the estimated performance periods and they are periodically reviewed based on the progress of the related program. The effect of a change made to an estimated performance period and therefore revenue recognized ratably would occur on a prospective basis in the period that the change was made.

Deferred revenue associated with a non-refundable payment received under a collaborative agreement that the performance obligations are terminated will result in an immediate recognition of any remaining deferred revenue in the period that termination occurred provided that all performance obligations have been satisfied.

For milestones earned after January 1, 2011, the Company recognizes 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) the Company does not have ongoing performance obligations related to the achievement of the milestone earned. Milestone payments are considered substantive if all of the following conditions are met: the milestone payment (a) is commensurate with either the Company's 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 the Company's 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. See Note 3, "Collaboration Arrangements," for analysis of each milestone event deemed to be substantive or non-substantive.

Research and Development Costs

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

Preclinical Study and Clinical Study Expenses

Most of the Company's preclinical studies and all of its clinical studies have been performed by third-party contract research organizations (CROs). Some CROs bill monthly for services performed, while others bill based upon milestones achieved. The Company reviews the activities performed under the significant contracts each quarter. For preclinical studies, the significant factors used in estimating accruals include the percentage of work completed to date and contract milestones achieved. For clinical study expenses, the significant factors used in estimating accruals include the number of patients enrolled and percentage of work completed to date. Vendor confirmations are obtained for contracts with longer duration when necessary to validate the Company's estimate of expenses. The Company's estimates are highly dependent upon the timeliness and accuracy of the data provided by its CROs regarding the status of each program and total program spending and adjustments are made when deemed necessary.

Fair Value of Stock-Based Compensation Awards

Stock-based compensation arrangements currently include the following awards granted under the 2004 Equity Incentive Plan (2004 Plan) and the 2008 New Employee Equity Incentive Plan (2008 Plan): stock options, restricted stock unit awards (RSUs), performance-contingent RSUs, restricted stock awards (RSAs), and performance-contingent RSAs. In addition, purchases of common stock by the Company's employees at a discount to the market price during offering periods under the Company's Employee Stock Purchase Plan (ESPP). Under the 2004 Plan and 2008 Plan, stock options may be granted with an exercise price not less than 100% of the fair market value of the common stock on the date of grant. Stock options are generally granted with terms of up to ten years and vest over a period of four years.

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

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

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

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

Income Taxes

The Company utilizes 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.

Comprehensive Loss

Comprehensive loss is comprised of net loss and other comprehensive income (loss). Other comprehensive income (loss) consists of changes in unrealized gains and losses on the Company's available-for-sale securities. Comprehensive income or loss for the years ended December 31, 2011, 2010 and 2009 has been presented in the Company's Consolidated Statements of Stockholders' Net Capital Deficiency.

Related Parties

Transactions with GSK are described in Note 3, "Collaboration Arrangements".

Robert V. Gunderson, Jr. is a director of the Company. The Company has engaged Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, of which Mr. Gunderson is a partner, as its primary legal counsel. Fees are incurred in the ordinary course of business were $0.3 million in 2011, $0.7 million in 2010, and $0.4 million in 2009.

Recent Accounting Update

In June 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-05, "Presentation of Comprehensive Income" an update to Accounting Standards Codification (ASC) Topic 220, "Comprehensive Income". This update requires that all nonowner changes in stockholders' equity be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This update is to be applied retrospectively and is effective for financial statements issued for fiscal years, and interim periods within those years, beginning after December 15, 2011, and interim and annual periods thereafter. This update will be effective for the Company January 1, 2012. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

- Definition

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

+ References + Details

Net Loss per Share

12 Months Ended

Dec. 31, 2011

Net Loss per Share

Net Loss per Share

2. Net Loss per Share

Basic net loss per share (basic EPS) is computed by dividing net loss by the weighted-average number of common shares outstanding during the period, less RSAs subject to forfeiture. Diluted net loss per share (diluted EPS) is computed by dividing net loss by the weighted-average number of common shares outstanding during the period, less RSAs subject to forfeiture, plus dilutive potential common shares. Diluted EPS is identical to basic EPS for all periods presented since potential common shares are excluded from the calculation, as their effect is anti-dilutive.

Weighted-Average Shares Outstanding

The following table sets forth the computation of basic and diluted net loss and the weighted-average number of shares used in computing basic and diluted net loss per share:

	Year Ended December 31,

	2011			2010			2009
	(in thousands, except for per share data)
Basic and diluted:
Net loss	$	(115,344	)	$	(83,862	)	$	(85,302	)

Weighted-average shares of common stock outstanding		84,493			72,103			63,084
Less: unvested RSAs		(2,442	)		(33	)		(57	)

Weighted-average shares used in computing basic and diluted net loss per common share		82,051			72,070			63,027

Basic and diluted net loss per common share	$	(1.41	)	$	(1.16	)	$	(1.35	)

Anti-dilutive securities

Securities that were not included in the computation of diluted EPS because their effect would have been anti-dilutive were as follows:

	Year Ended December 31,

(in thousands)	2011		2010		2009
Shares issuable upon the exercise of stock options		4,610		5,823		6,646
Shares issuable under RSUs and RSAs		854		813		444
Shares issuable upon the conversion of convertible debt		6,668		6,668		6,668

Total anti-dilutive securities		12,132		13,304		13,758

Collaboration Arrangements

12 Months Ended

Dec. 31, 2011

Collaboration Arrangements

Collaboration Arrangements

3. Collaboration Arrangements

GSK

LABA collaboration with GSK

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

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

In connection with the LABA collaboration, in 2002, Glaxo Group Limited, an affiliate of GSK, purchased shares of the Company's Series E preferred stock for an aggregate purchase price of $40.0 million.

2004 Strategic Alliance with GSK

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

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

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

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

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

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

	Through December 31, 2011

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

GSK Upfront License Fees, Milestone Payments and Revenue

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

	Through December 31, 2011

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

Total	$	41,000	$	69,000	$	110,000

(1): The Company does not currently expect to be eligible for any additional milestones under this collaboration.
(2): In August 2004, GSK exercised its right to license the Company's LAMA program pursuant to the terms of the strategic alliance. In 2009, GSK returned the program to the Company.

In August 2011, the Company received a $3.0 million milestone payment from GSK for the initiation of the Phase 1 combination study in the Company's MABA program.

In October 2011, the Company received an upfront license payment of $1.0 million from GSK related to the Additional MABAs, which is being accounted for as a new arrangement under the updated multiple element arrangement accounting guidance. The Company allocated revenue from this upfront license payment and will allocate any potential contingent payments related to the Additional MABAs under the MABA program, as discussed above in the section entitled Note 1, "Description of Operations and Summary of Significant Accounting Policies—Revenue Recognition," to each non-contingent element based upon the relative selling price of each element. The Company determined the license has standalone value because the license can be used for its intended purpose and may be developed, commercialized and manufactured for its intended purpose without any remaining participation from the Company's. As a result, the Company recognized $936,000 of the upfront license payment and the remaining amount was deferred and will be amortized over the estimated development period over which we will be performing services.

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

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

	Year Ended December 31,

(in thousands)	2011		2010		2009
LABA/RELOVAIR™ collaboration(1)	$	4,718	$	5,081	$	5,081
Strategic alliance agreement		1,858		2,738		2,738
Strategic alliance—LAMA license		—		—		4,240
Strategic alliance—MABA program license(2)		3,082		2,007		3,014

Total revenue	$	9,658	$	9,826	$	15,073

(1): In the fourth quarter of 2011, the Company revised the estimated performance period for the LABA program based on its progress. The Company does not expect that the revisions will have a material impact on future revenue recognized under this program.
(2): In the fourth quarter of 2011 and the first quarter of 2010, the Company revised the estimated performance period for the MABA program based on its progress. The Company does not expect that the revisions will have a material impact on future revenue recognized under this program.

Astellas

In November 2005, the Company entered into a global collaboration arrangement with Astellas for the development and commercialization of VIBATIV®. On January 6, 2012, Astellas exercised its right to terminate this agreement. The rights granted to Astellas ceased upon termination of the agreement and Astellas has stopped promotional sales efforts. Pursuant to the terms of the agreement, there are no termination payments required by either party and Astellas is entitled to a ten-year, 2% royalty on future net sales of VIBATIV®. To support the transition, Astellas will sell inventory to the Company, manage certain clinical and regulatory activities and respond to medical inquiries with respect to VIBATIV® until no later than March 31, 2012. The Company is evaluating global commercialization alternatives for VIBATIV® either alone or with partners.

Through December 31, 2011, the Company received $191.0 million in upfront license, milestone and other fees from Astellas. The Company recorded these payments as deferred revenue and is amortizing them ratably over its estimated performance period (development and commercialization period). As a result of the termination of the VIBATIV® collaboration agreement, the Company is no longer eligible to receive any further milestone payments.

Net revenue recognized under this collaboration agreement was as follows:

	December 31,

(in thousands)	2011			2010			2009
Amortization of deferred revenue	$	12,975		$	12,975		$	11,338
Royalties from net sales of VIBATIV®		2,422			1,123			766
Proceeds from VIBATIV® delivered to Astellas		1,171			2,058			—
Cost of VIBATIV® delivered to Astellas		(1,177	)		(938	)		(1,629	)
Cost of unrealizable VIBATIV® inventory		(537	)		(821	)		(1,175	)

Total net revenue	$	14,854		$	14,397		$	9,300

Marketable Securities

12 Months Ended

Dec. 31, 2011

Marketable Securities

Marketable Securities

4. Marketable Securities

The following table is a summary of available-for-sale debt securities and money market funds recorded in cash equivalents or marketable securities in the Company's Consolidated Balance Sheets. Estimated fair values of available-for-sale securities are generally based on prices obtained from commercial pricing services:

	December 31, 2011											December 31, 2010

(in thousands)	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value			Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government securities	$	66,150		$	24	$	—		$	66,174		$	25,966		$	10	$	—		$	25,976
U.S. government agencies		93,183			9		(17	)		93,175			54,625			30		(7	)		54,648
U.S. corporate notes		2,707			—		(2	)		2,705			34,695			9		(9	)		34,695
U.S. commercial paper		34,973			3		—			34,976			97,221			—		—			97,221
Money market funds		38,721			—		—			38,721			91,805			—		—			91,805

Total		235,734			36		(19	)		235,751			304,312			49		(16	)		304,345
Less amounts classified as cash equivalents		(38,721	)		—		—			(38,721	)		(157,151	)		—		—			(157,151	)
Less amounts classified as restricted cash		(893	)		—		—			(893	)		(893	)		—		—			(893	)

Amounts classified as marketable securities	$	196,120		$	36	$	(19	)	$	196,137		$	146,268		$	49	$	(16	)	$	146,301

The following table provides the net realized gains (losses) on marketable securities for the periods presented:

	Year Ended December 31,

(in thousands)	2011			2010		2009
Realized gains	$	—		$	3	$	—
Realized losses		(2	)		—		—

Net realized gains (losses)	$	(2	)	$	3	$	—

The Company realized no gains or losses in 2011 and 2010 that were previously classified as unrealized gains and losses in accumulated other comprehensive income at December 31, 2010 and 2009, respectively.

The following table provides the breakdown of the marketable securities with unrealized losses at December 31, 2011:

	In loss position for less than 12 months					In loss position for more than 12 months				Total

(in thousands)	Fair Value		Estimated Gross Unrealized Losses			Fair Value		Estimated Gross Unrealized Losses		Fair Value		Estimated Gross Unrealized Losses
U.S. government agencies	$	47,807	$	(17	)	$	—	$	—	$	47,807	$	(17	)
U.S. corporate notes		2,754		(2	)		—		—		2,754		(2	)

Total	$	50,561	$	(19	)	$	—	$	—	$	50,561	$	(19	)

At December 31, 2011, all of the available-for-sale debt securities had contractual maturities within twelve months and the average duration of marketable securities was approximately five months. The Company does not intend to sell the investments which are in an unrealized loss position and it is unlikely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. The Company has determined that the gross unrealized losses on its marketable securities at December 31, 2011 were temporary in nature.

Fair Value Measurements

12 Months Ended

Dec. 31, 2011

Fair Value Measurements

Fair Value Measurements

5. Fair Value Measurements

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

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

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

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

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

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

	Fair Value Measurements at Reporting Date Using

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

Total	$	163,501	$	72,250	$	—	$	235,751

	Fair Value Measurements at Reporting Date Using

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
December 31, 2010 (in thousands)	Level 1		Level 2		Level 3		Total
U.S. government securities	$	25,976	$	—	$	—	$	25,976
U.S. government agency securities		24,375		30,273		—		54,648
U.S. corporate notes		34,695		—		—		34,695
U.S. commercial paper		—		97,221		—		97,221
Money market funds		91,805		—		—		91,805

Total	$	176,851	$	127,494	$	—	$	304,345

- Definition

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

+ References

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

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

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13537-108611

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13433-108611

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13504-108611

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
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-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258

+ Details

Property and Equipment

12 Months Ended

Dec. 31, 2011

Property and Equipment

Property and Equipment

6. Property and Equipment

Property and equipment consists of the following:

	December 31,

(in thousands)	2011			2010
Computer equipment	$	3,158		$	2,473
Software		4,628			4,592
Furniture and fixtures		3,821			3,689
Laboratory equipment		28,894			27,006
Leasehold improvements		17,263			16,101

		57,764			53,861
Less accumulated depreciation and amortization		(47,392	)		(43,646	)

Property and equipment, net	$	10,372		$	10,215

Depreciation expense was $3.8 million in 2011, $3.9 million in 2010 and $4.3 million in 2009. The change in accumulated depreciation is net of asset retirements.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Long-Term Obligations

12 Months Ended

Dec. 31, 2011

Long-Term Obligations

Long-Term Obligations

7. Long-Term Obligations

Long-term obligations are as follows:

	December 31, 2011				December 31, 2010

(in thousands)	Carrying value		Estimated fair value		Carrying value		Estimated fair value
Convertible subordinated notes	$	172,500	$	189,588	$	172,500	$	202,391
Note payable to lessor		—		—		42		42

Convertible Subordinated Notes

In January 2008, the Company closed an underwritten public offering of $172.5 million aggregate principal amount of unsecured convertible subordinated notes which will mature on January 15, 2015. The financing raised proceeds, net of issuance costs, of $166.7 million. The notes bear interest at the rate of 3.0% per year, that is payable semi-annually in arrears in cash on January 15 and July 15 of each year, beginning on July 15, 2008. The fair value of debt was estimated based on the quoted price of the instrument on December 30, 2011.

The notes are convertible, at the option of the holder, into shares of the Company's common stock at an initial conversion rate of 38.6548 shares per $1,000 principal amount of the notes, subject to adjustment in certain circumstances, which represents an initial conversion price of approximately $25.87 per share. The debt issuance costs, which are included in other long-term assets, are being amortized on a straight-line basis over the life of the notes. Unamortized debt issuance costs totaled $2.5 million as of December 31, 2011. Amortization expense was $0.8 million in 2011, 2010 and 2009.

Holders of the notes will be able to require the Company to repurchase some or all of their notes upon the occurrence of a fundamental change (as defined) at 100% of the principal amount of the notes being repurchased plus accrued and unpaid interest. The Company may not redeem the notes prior to January 15, 2012. On or after January 15, 2012 and prior to the maturity date, the Company, upon notice of redemption, may redeem for cash all or part of the notes if the last reported sale price of its common stock has been greater than or equal to 130% of the conversion price then in effect for at least 20 trading days during any 30 consecutive trading day period prior to the date on which it provides notice of redemption. The redemption price will equal 100% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest up to but excluding the redemption date.

Note Payable

In connection with the Company's original lease agreement for its facility in South San Francisco, California (see Note 8, "Operating Leases and Subleases," for more information), the Company received approximately $0.9 million in July 2002 under a tenant improvement loan from the lessor, which is payable in monthly installments through 2012, bears interest at 14.5% per annum and is secured by the underlying leasehold improvements. The aggregate maturity of the note payable for the remaining year was $42,000 in 2012 and is included in note payable and capital lease, current in the accompanying consolidated balance sheets.

Capital Lease

The Company's capital lease agreement for communications equipment entered into in June 2009 is accounted for as follows:

	Year Ended December 31,

(in thousands)	2011			2010
Obligation of lease arrangement	$	79		$	130
Minimum lease payments less interest		(52	)		(51	)

Present value of future payments		27			79
Less current portion		(27	)		(52	)

Long-term portion	$	—		$	27

The equipment under the capital lease arrangement is included in property and equipment and the related amortization is included in depreciation and amortization expense in the consolidated statements of cash flows. The cost of equipment financed under capital leases was $0.2 million and the related accumulated amortization was $72,000 as of December 31, 2011 and $41,000 as of December 31, 2010.

Operating Leases and Subleases

12 Months Ended

Dec. 31, 2011

Operating Leases and Subleases

Operating Leases and Subleases

8. Operating Leases and Subleases

The Company entered into amendments to its South San Francisco, CA facility leases in June 2010. These amendments extend the lease terms through May 2020 and the Company may extend the terms for two additional five-year periods. The leases are for two buildings of approximately 110,000 and 40,000 square feet.

The Company leases its South San Francisco, California, facilities under a non-cancelable operating lease. Future minimum lease payments under this lease, exclusive of executory costs, at December 31, 2011, were as follows:

(in thousands)

Years ending December 31:
2012	$	5,429
2013		5,029
2014		4,859
2015		5,005
2016		5,156
Thereafter		18,806

Total	$	44,284

Expenses and income associated with operating leases were as follows:

	Year Ended December 31,

(in thousands)	2011			2010			2009
Rent expense	$	6,702		$	6,779		$	6,559
Sublease income, net		(637	)		(622	)		(580	)

As of December 31, 2011, the Company expects to receive up to $0.2 million of minimum rentals through the end of a non-cancelable sublease in March 2012.

- Definition

The entire disclosure for lessee entity's leasing arrangements including, but not limited to, all of the following: (a.) The basis on which contingent rental payments are determined, (b.) The existence and terms of renewal or purchase options and escalation clauses, (c.) Restrictions imposed by lease agreements, such as those concerning dividends, additional debt, and further leasing.

+ References + Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2011

Commitments and Contingencies

Commitments and Contingencies

9. Commitments and Contingencies

Guarantees and Indemnifications

The Company indemnifies its officers and directors for certain events or occurrences, subject to certain limits. The Company believes the fair value of these indemnification agreements is minimal. Accordingly, the Company has not recognized any liabilities relating to these agreements as of December 31, 2011.

Purchase Obligations

As of December 31, 2011, the Company had outstanding purchase obligations on commercially reasonable terms, primarily for services under contract research, development and clinical supply agreements totaling $1.0 million.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation

Stock-Based Compensation

10. Stock-Based Compensation

Equity Incentive Plans

The Company authorized 500,000 shares of common stock for issuance under the 2008 Plan upon its adoption in 2008 and authorized an additional 200,000 shares for issuance under the 2008 Plan in July 2009. The 2008 Plan provided for the granting of non-qualified stock options, restricted stock awards and RSUs to newly hired employees. Following the approval by stockholders of the amendment and restatement of the 2004 Plan on April 27, 2010, no additional awards have been made or will be made in the future under the 2008 Plan.

The 2004 Plan provides for the granting of stock options, restricted stock awards, stock appreciation rights and RSUs to employees, officers, directors and consultants of the Company. On April 27, 2010, an amendment and restatement of the 2004 Plan was approved by the Company's stockholders to, among other things, reserve additional shares of common stock for issuance thereunder. As of December 31, 2011, total shares remaining available for issuance under the 2004 Plan were 2,090,098.

Employee Stock Purchase Plan

Under the 2004 Employee Stock Purchase Plan (ESPP), the Company's non-officer employees may purchase common stock through payroll deductions at a price equal to 85 percent 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^th or November 15^th. ESPP contributions are limited to a maximum of 15 percent of an employee's eligible compensation.

The Company's ESPP plan also includes a feature that provides for a new offering period to begin when the fair market value of the Company's common stock on any purchase date during an offering period falls below the fair market value of the Company's common stock on the first day of such offering period. This feature is called a reset. The Company had resets for new twenty-four month offering periods starting on November 16, 2007, May 16, 2008, November 16, 2008, May 16, 2010, and November 16, 2011. The Company applied modification accounting to determine the incremental fair value associated with the ESPP resets and recognized the related incremental stock-based compensation expense.

As of December 31, 2011, a total of 2,025,000 shares of common stock were approved and authorized for issuance under the ESPP. Through December 31, 2011, the Company issued 1,468,454 shares under the ESPP at an average price of $10.15 per share. As of December 31, 2011, total shares remaining available for issuance under the ESPP were 556,546.

Restricted Stock Awards

The Compensation Committee of the Company's Board of Directors approved the grant of 1,168,000 in 2011 and 71,000 shares in 2007, of restricted stock to certain members of the Company's management. These restricted shares of common stock vest based on continued service, with pre-determined vesting percentages and anniversary dates. The Company valued the awards based on the closing market price of the Company's common stock on the date of the respective awards.

Performance-Contingent Restricted Stock Awards

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

In 2011, the Compensation Committee of the Company's Board of Directors approved the grant of 25,000 performance-contingent RSAs to a non-executive officer that has dual triggers of vesting based upon the achievement of a performance condition over a timeframe from 2012-2013 and continued employment through 2014, both of which must be satisfied in order for the award to vest in full. The maximum potential expense associated with this award is approximately $475,000, which would be recognized in increments based on the achievement of the performance condition. As of December 31, 2011, the Company had determined that the achievement of the requisite performance condition was not probable and, as a result, no compensation expense has been recognized. As the vesting of the RSAs is contingent upon the achievement of the performance condition, the expense associated with the RSAs may vary significantly from period to period.

Performance-Contingent Restricted Stock Units

In 2010, the Compensation Committee of the Company's Board of Directors approved the grant of 210,000 performance-contingent RSUs to senior management. These awards have dual triggers of vesting based upon the successful achievement of certain corporate operating milestones during 2010 and 2011, as well as a requirement for continued employment through early 2014. As of February 11, 2011, both performance milestones had been deemed achieved, and time-based vesting commenced with respect to all of the performance-contingent RSU shares.

Director Compensation Program

Non-employee directors of the Company receive compensation for services provided as a director. Each member of the Company's Board who is not an employee receives an annual retainer as well as a fee for each board and committee meeting attended. Commencing on April 27, 2011, chairpersons of the various committees of the Board, the Audit Committee, the Compensation Committee, Nominating/Corporate Governance Committee and the Science and Technology Advisory Committee receives a fixed retainer. The lead independent director also receives a fixed retainer.

Each of the Company's independent directors receives periodic automatic grants of equity awards under a program implemented under the 2004 Plan. These grants are non-discretionary. Only independent directors of the Company or affiliates of such directors are eligible to receive automatic grants under the 2004 Plan. Under the program, as amended in July 2010, each individual who first becomes an independent director will, on the date such individual joins the Board, automatically be granted (i) a one-time grant of RSUs covering 6,000 shares of the Company's common stock and (ii) a one-time nonstatutory stock option grant covering 6,000 shares of the Company's common stock.

These initial equity grants vest monthly over the director's first two years of service. In addition, on the date of joining the Board, the new director will also receive the standard annual equity awards (if joining on the date of the Company's Annual Meeting of Stockholders) or pro-rated annual equity awards (if joining on any other date). The pro-ration is based upon the number of months of service the new board member will provide during the 12-month period ending on the one-year anniversary of the most recent annual meeting of stockholders. Annually, upon his or her re-election to the Board at the Annual Meeting of Stockholders, each independent director is automatically granted both an RSU covering 6,000 shares of the Company's common stock and a nonstatutory stock option covering 6,000 shares of the Company's common stock. These standard annual equity awards vest monthly over the twelve month period of service following the date of grant. In addition, all automatic equity awards vest in full if the Company is subject to a change in control or the Board member dies while in service.

Stock-Based Compensation Expense

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

	Year Ended December 31,

(in thousands)	2011		2010		2009
Research and development	$	13,422	$	10,322	$	11,542
General and administrative		11,494		8,687		8,458

Total stock-based compensation expense	$	24,916	$	19,009	$	20,000

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

	Year Ended December 31,

(in thousands)	2011		2010		2009
Employee stock options	$	4,528	$	7,003	$	10,271
Employee RSUs		13,290		9,783		7,473
Employee RSAs		5,498		398		470
Non-employee options and RSUs		307		1,186		501
ESPP		1,293		639		1,285

Total stock-based compensation expense	$	24,916	$	19,009	$	20,000

In connection with the retirement of the Company's former chairman of the Board of Directors in April 2010, the Company entered into a consulting agreement that provided for, among other things, the acceleration of an RSU that was scheduled to vest through April 2012 and an extension of the period of time in which vested stock options may be exercised until to the stated expiration date of the stock options. As a result of the stock option modification, the Company recorded an expense of $0.9 million in June 2010.

As of December 31, 2011, the unrecognized compensation cost, net of expected forfeitures, and the estimated weighted-average amortization period, using the straight-line attribution method, was as follows:

(in thousands, except amortization period)	Unrecognized Compensation Cost

Stock options	$	7,293	2.8
RSUs	$	12,449	2.0
RSAs	$	5,389	4.5

Compensation Awards

The following table summarizes equity award activity under the 2008 Plan and the 2004 Plan, and related information:

(in thousands, except per share data)			Weighted- average Exercise Price of Outstanding Options				Weighted- average Fair Value per Share at Grant				Weighted- average Fair Value per Share at Grant

Balance at December 31, 2008	9,953		$	16.01	2,260		$	21.51	77		$	24.42
Granted	356			14.90	950			14.66	—			—
Exercised	(1,333	)		7.77	—			—	—			—
Released RSUs/RSAs	—			—	(603	)		14.62	(20	)		20.18
Forfeited	(562	)		25.43	(565	)		29.78	—			—

Balance at December 31, 2009	8,414			16.63	2,042			14.15	57			25.87
Granted	321			14.90	1,170			10.55	—			—
Exercised	(784	)		9.60	—			—	—			—
Released RSUs/RSAs	—			—	(657	)		13.20	(24	)		25.55
Forfeited	(297	)		26.17	(658	)		26.26	—			—

Balance at December 31, 2010	7,654			16.91	1,897			12.45	33			26.10
Granted	629			21.98	471			24.96	2,483			24.42
Exercised	(1,265	)		8.87	—			—	—			—
Released RSUs/RSAs	—			—	(797	)		13.89	(74	)		24.96
Forfeited	(127	)		29.15	(29	)		15.35	—			—

Balance at December 31, 2011	6,891			18.62	1,542			15.47	2,442			24.42

As of December 31, 2011, the aggregate intrinsic value of the options outstanding was $42.6 million and the aggregate intrinsic value of the options exercisable was $39.0 million.

The total intrinsic value of the options exercised was $17.1 million in 2011, $7.2 million in 2010, and $10.0 million in 2009. The total estimated fair value of options vested was $6.4 million in 2011, $8.2 million in 2010, and $15.7 million in 2009.

Valuation Assumptions

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

	Year Ended December 31,

	2011	2010	2009
*Employee stock options*
Risk-free interest rate	1.10% - 2.57%	1.11% - 2.82%	1.55% - 2.98%
Expected life (in years)	5 - 6	5 - 6	5 - 6
Volatility	0.49 - 0.55	0.48 - 0.52	0.48 - 0.57
Dividend yield	—%	—%	—%
Weighted-average estimated fair value of stock options granted	$11.11	$7.41	$7.48
*Employee stock purchase plan issuances*
Risk-free interest rate	0.05% - 0.54%	0.19% - 0.79%	0.17% - 0.88%
Expected life (in years)	0.5 - 2	0.5 - 2	0.5 - 2
Volatility	0.48 - 0.59	0.50 - 0.69	0.50 - 0.84
Dividend yield	—%	—%	—%
Weighted-average estimated fair value of ESPP issuances	$9.46	$7.63	$6.42

Range of Stock Option Exercise Prices

As of December 31, 2011, all outstanding options to purchase common stock of the Company are summarized in the following table (in thousands, except years and per share data):

	Options Outstanding						Options Exercisable

Range of Exercise Prices	Number Outstanding		Weighted- average Remaining Contractual Life in Years		Weighted- average Exercise Prices		Options Exercisable		Weighted- average Remaining Contractual Life in Years		Weighted- average Exercise Price
$3.10		557		1.3	$	3.10		557		1.3	$	3.10
$6.15 - $6.70		145		6.9		6.19		99		6.9		6.18
$8.53		218		0.4		8.53		218		0.4		8.53
$9.69		1,172		2.3		9.69		1,172		2.3		9.69
$9.70 - $16.00		924		5.1		14.69		749		4.5		15.00
$16.01 - $21.96		1,493		5.6		18.52		1,061		4.1		18.34
$21.97 - $29.70		1,385		5.5		27.34		1,136		4.7		28.00
$29.71 - $35.46		997		5.2		33.52		997		5.2		33.52

Total		6,891		4.4		18.62		5,989		3.7		18.61

- Definition

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

+ References

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

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

+ Details

Income Taxes

12 Months Ended

Dec. 31, 2011

Income Taxes

Income Taxes

11. 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 the Company's deferred tax assets are as follows:

	December 31,

(in thousands)	2011			2010
Deferred tax assets:
Net operating loss carryforwards	$	359,000		$	311,000
Deferred revenues		56,000			63,000
Capitalized research and development expenditures		35,000			34,000
Research and development tax credit carryforwards		37,000			34,000
Other		31,000			26,000
Valuation allowance		(518,000	)		(468,000	)

Net deferred tax assets	$	—		$	—

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 $50.0 million in 2011, $35.0 million in 2010, and $32.0 million in 2009.

As of December 31, 2011, the Company had federal net operating loss carryforwards of approximately $1,068.2 million, which will expire from 2012 through 2030, and federal research and development tax credit carryforwards of approximately $43.2 million, which will expire from 2018 through 2030. The Company also had state net operating loss carryforwards of approximately $425.0 million expiring in the years 2012 through 2030 and state research tax credits of approximately $46.9 million, which do not expire.

The net operating loss deferred tax asset balances as of December 31, 2011 and 2010 do not include excess tax benefits from stock option exercises. Stockholders' net capital deficiency 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 the ownership change limitations provided by the Internal Revenue Code and similar state provisions. The Company conducted an analysis through 2011 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. Annual limitations may result in expiration of net operating loss and tax credit carryforwards before some or all of such amounts have been utilized.

Uncertain Tax Positions

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


Gross unrecognized tax benefits as of January 1, 2009	$	36,200
Gross decrease for tax positions for prior years		(100	)
Gross increase in tax positions for current year		3,500

Unrecognized tax benefits as of December 31, 2009		39,600

Gross decrease for tax positions for prior years		—
Gross increase in tax positions for current year		3,000

Unrecognized tax benefits as of December 31, 2010		42,600

Gross decrease for tax positions for prior years		—
Gross increase in tax positions for current year		4,300

Unrecognized tax benefits as of December 31, 2011	$	46,900

If the Company eventually is able to recognize these uncertain positions, most of the $46.9 million of the unrecognized benefit would reduce the effective tax rate, except for excess tax benefits related to stock-based payments. The Company currently has a full valuation allowance against its deferred tax asset which would impact the timing of the effective tax rate benefit should any of these uncertain positions be favorably settled in the future. The Company does not believe it is reasonably possible that its unrecognized tax benefits will significantly change within the next twelve months.

The Company is subject to taxation in the U.S. and various state jurisdictions. The tax years 1996 and forward remain open to examination by the federal and most state tax authorities due to net operating loss and overall credit carryforward positions.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

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-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Subsequent Events

12 Months Ended

Dec. 31, 2011

Subsequent Events

Subsequent Events

12. Subsequent Events

Termination of Collaboration Arrangement

On January 6, 2012, Astellas exercised its right to terminate the global License, Development and Commercialization agreement for VIBATIV®. The Company is evaluating global commercialization alternatives for VIBATIV® either alone or with partners. The rights granted to Astellas ceased upon termination of the agreement and Astellas has stopped promotional sales efforts. Pursuant to the terms of the agreement, there are no termination payments required by either party and Astellas is entitled to a ten-year, 2% royalty on future net sales of VIBATIV®.

This is being accounted for as a nonrecognized subsequent event as the termination agreement was entered into after December 31, 2011. The Company is evaluating the financial impact of the termination. However, the Company expects to recognize in the first quarter of 2012 the remaining non-cash, deferred upfront license fees and milestone payments, net of any estimated termination obligations, of approximately $125.0 million and the Company may purchase certain VIBATIV® inventory from Astellas in 2012. The purchase is subject to release of the inventory by a third-party manufacturer and may cost up to $11.0 million.

Sale of Stock

On February 14, 2012, the Company and GSK entered into an agreement pursuant to which GSK agreed to purchase through an affiliate, in a private placement, 88,468 shares of the Company's common stock at $18.12 per share, for an aggregate purchase price of $1.6 million, on February 13, 2012 pursuant to its rights under the Company's governance agreement with GSK dated June 4, 2004, as amended.

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

12 Months Ended

Dec. 31, 2011

Description of Operations and Summary of Significant Accounting Policies

Principles of Consolidation

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

Use of Management's Estimates

Segment Reporting

Cash and Cash Equivalents

Marketable Securities

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

Fair Value of Financial Instruments

Concentration of Credit Risks

Notes Receivable

The Company provided loans to certain employees to assist them primarily with the purchase of a primary residence, which collateralizes the resulting loans.

Inventory

Inventory is stated at the lower of cost or market value and is included in prepaid and other current assets in the accompanying consolidated balance sheets.

Property and Equipment

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

The Company capitalizes certain costs related to direct material and service costs for software obtained for internal use. Capitalized software costs are depreciated over 3 years.

Impairment of Long-Lived Assets

Bonus Accruals

Deferred Rent

Revenue Recognition

The Company recognizes revenue in accordance with Financial Accounting Standards Board (FASB) Subtopic ASC 605-25, "Revenue Recognition—Multiple-Element Arrangements." As of January 1, 2011, the Company adopted on a prospective basis the accounting updates to guidance ASC 605 "Revenue Recognition", subtopic ASC 605-25 "Revenue with Multiple Element Arrangements" and subtopic ASC 605-28 "Revenue Recognition-Milestone Method", which provides accounting guidance for revenue recognition for arrangements with multiple deliverables and guidance on defining the milestone and determining when the use of the milestone method of revenue recognition for research and development transactions is appropriate, respectively. The adoption of ASC 605-25 "Revenue with Multiple Element Arrangements" and the election of the milestone method under subtopic ASC 605-28 "Revenue Recognition-Milestone Method" did not have a material impact on the Company's consolidated financial statements. However, these updates will result in different accounting treatment for future new collaboration arrangements and substantive milestones earned after the dates of adoption.

In accordance with ASC Subtopic 808-10, "Collaborative Arrangement," and pursuant to the Company's agreement with Astellas, the Company recognized as revenue the net impact of transactions with Astellas related to VIBATIV® inventory including revenue specifically attributable to any sales, and cost of inventory either transferred or expensed as unrealizable.

The Company recognizes royalty revenue on net sales in the period in which the royalties are earned based on net sales reporting provided by the Company's former collaboration partner, Astellas.

For milestones earned after January 1, 2011,the Company recognizes 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) the Company does not have ongoing performance obligations related to the achievement of the milestone earned. Milestone payments are considered substantive if all of the following conditions are met: the milestone payment (a) is commensurate with either the Company's 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 the Company's 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. See Note 3, "Collaboration Arrangements," for analysis of each milestone event deemed to be substantive or non-substantive.

Research and Development Costs

Preclinical Study and Clinical Study Expenses

Fair Value of Stock-Based Compensation Awards

Income Taxes

Comprehensive Loss

Related Parties

Transactions with GSK are described in Note 3, "Collaboration Arrangements".

Recent Accounting Update

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

12 Months Ended

Dec. 31, 2011

Description of Operations and Summary of Significant Accounting Policies

Property and Equipment


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, 2011

Net Loss per Share

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

	Year Ended December 31,

	2011			2010			2009
	(in thousands, except for per share data)
Basic and diluted:
Net loss	$	(115,344	)	$	(83,862	)	$	(85,302	)

Weighted-average shares of common stock outstanding		84,493			72,103			63,084
Less: unvested RSAs		(2,442	)		(33	)		(57	)

Weighted-average shares used in computing basic and diluted net loss per common share		82,051			72,070			63,027

Basic and diluted net loss per common share	$	(1.41	)	$	(1.16	)	$	(1.35	)

Schedule of anti-dilutive shares

	Year Ended December 31,

(in thousands)	2011		2010		2009
Shares issuable upon the exercise of stock options		4,610		5,823		6,646
Shares issuable under RSUs and RSAs		854		813		444
Shares issuable upon the conversion of convertible debt		6,668		6,668		6,668

Total anti-dilutive securities		12,132		13,304		13,758

Collaboration Arrangements (Tables)

12 Months Ended

Dec. 31, 2011

Collaboration Arrangements

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

	Through December 31, 2011

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

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

	Through December 31, 2011

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

Total	$	41,000	$	69,000	$	110,000

(1): The Company does not currently expect to be eligible for any additional milestones under this collaboration.
(2): In August 2004, GSK exercised its right to license the Company's LAMA program pursuant to the terms of the strategic alliance. In 2009, GSK returned the program to the Company.

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

	Year Ended December 31,

(in thousands)	2011		2010		2009
LABA/RELOVAIR™ collaboration(1)	$	4,718	$	5,081	$	5,081
Strategic alliance agreement		1,858		2,738		2,738
Strategic alliance—LAMA license		—		—		4,240
Strategic alliance—MABA program license(2)		3,082		2,007		3,014

Total revenue	$	9,658	$	9,826	$	15,073

(1): In the fourth quarter of 2011, the Company revised the estimated performance period for the LABA program based on its progress. The Company does not expect that the revisions will have a material impact on future revenue recognized under this program.
(2): In the fourth quarter of 2011 and the first quarter of 2010, the Company revised the estimated performance period for the MABA program based on its progress. The Company does not expect that the revisions will have a material impact on future revenue recognized under this program.

Schedule of revenue recognized under the Astellas collaboration agreement

	December 31,

(in thousands)	2011			2010			2009
Amortization of deferred revenue	$	12,975		$	12,975		$	11,338
Royalties from net sales of VIBATIV®		2,422			1,123			766
Proceeds from VIBATIV® delivered to Astellas		1,171			2,058			—
Cost of VIBATIV® delivered to Astellas		(1,177	)		(938	)		(1,629	)
Cost of unrealizable VIBATIV® inventory		(537	)		(821	)		(1,175	)

Total net revenue	$	14,854		$	14,397		$	9,300

Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2011

Marketable Securities

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

	December 31, 2011											December 31, 2010

(in thousands)	Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value			Amortized Cost			Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. government securities	$	66,150		$	24	$	—		$	66,174		$	25,966		$	10	$	—		$	25,976
U.S. government agencies		93,183			9		(17	)		93,175			54,625			30		(7	)		54,648
U.S. corporate notes		2,707			—		(2	)		2,705			34,695			9		(9	)		34,695
U.S. commercial paper		34,973			3		—			34,976			97,221			—		—			97,221
Money market funds		38,721			—		—			38,721			91,805			—		—			91,805

Total		235,734			36		(19	)		235,751			304,312			49		(16	)		304,345
Less amounts classified as cash equivalents		(38,721	)		—		—			(38,721	)		(157,151	)		—		—			(157,151	)
Less amounts classified as restricted cash		(893	)		—		—			(893	)		(893	)		—		—			(893	)

Amounts classified as marketable securities	$	196,120		$	36	$	(19	)	$	196,137		$	146,268		$	49	$	(16	)	$	146,301

Schedule of net realized gains (losses) on marketable securities

	Year Ended December 31,

(in thousands)	2011			2010		2009
Realized gains	$	—		$	3	$	—
Realized losses		(2	)		—		—

Net realized gains (losses)	$	(2	)	$	3	$	—

Summary of marketable securities with unrealized losses

	In loss position for less than 12 months					In loss position for more than 12 months				Total

(in thousands)	Fair Value		Estimated Gross Unrealized Losses			Fair Value		Estimated Gross Unrealized Losses		Fair Value		Estimated Gross Unrealized Losses
U.S. government agencies	$	47,807	$	(17	)	$	—	$	—	$	47,807	$	(17	)
U.S. corporate notes		2,754		(2	)		—		—		2,754		(2	)

Total	$	50,561	$	(19	)	$	—	$	—	$	50,561	$	(19	)

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2011

Fair Value Measurements

Estimated fair values of the financial assets

	Fair Value Measurements at Reporting Date Using

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

Total	$	163,501	$	72,250	$	—	$	235,751

	Fair Value Measurements at Reporting Date Using

	Quoted Prices in Active Markets for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
December 31, 2010 (in thousands)	Level 1		Level 2		Level 3		Total
U.S. government securities	$	25,976	$	—	$	—	$	25,976
U.S. government agency securities		24,375		30,273		—		54,648
U.S. corporate notes		34,695		—		—		34,695
U.S. commercial paper		—		97,221		—		97,221
Money market funds		91,805		—		—		91,805

Total	$	176,851	$	127,494	$	—	$	304,345

- Definition

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

+ References + Details

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2011

Property and Equipment

Schedule of property and equipment

	December 31,

(in thousands)	2011			2010
Computer equipment	$	3,158		$	2,473
Software		4,628			4,592
Furniture and fixtures		3,821			3,689
Laboratory equipment		28,894			27,006
Leasehold improvements		17,263			16,101

		57,764			53,861
Less accumulated depreciation and amortization		(47,392	)		(43,646	)

Property and equipment, net	$	10,372		$	10,215

Long-Term Obligations (Tables)

12 Months Ended

Dec. 31, 2011

Long-Term Obligations

Schedule of long-term obligations

	December 31, 2011				December 31, 2010

(in thousands)	Carrying value		Estimated fair value		Carrying value		Estimated fair value
Convertible subordinated notes	$	172,500	$	189,588	$	172,500	$	202,391
Note payable to lessor		—		—		42		42

Schedule of capital lease agreement

	Year Ended December 31,

(in thousands)	2011			2010
Obligation of lease arrangement	$	79		$	130
Minimum lease payments less interest		(52	)		(51	)

Present value of future payments		27			79
Less current portion		(27	)		(52	)

Long-term portion	$	—		$	27

- 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 SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 22
-Article 5

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6451184&loc=d3e28551-108399

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=6451184&loc=d3e28541-108399

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.22)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21506-112644

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21538-112644

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21521-112644

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 835
-SubTopic 30
-Section 55
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6584090&loc=d3e28878-108400

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 470
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6479336&loc=d3e64711-112823

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(e),(f))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

+ Details

Operating Leases and Subleases (Tables)

12 Months Ended

Dec. 31, 2011

Operating Leases and Subleases

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

(in thousands)

Years ending December 31:
2012	$	5,429
2013		5,029
2014		4,859
2015		5,005
2016		5,156
Thereafter		18,806

Total	$	44,284

Summary of expenses and income associated with operating leases

	Year Ended December 31,

(in thousands)	2011			2010			2009
Rent expense	$	6,702		$	6,779		$	6,559
Sublease income, net		(637	)		(622	)		(580	)

Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation

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

	Year Ended December 31,

(in thousands)	2011		2010		2009
Research and development	$	13,422	$	10,322	$	11,542
General and administrative		11,494		8,687		8,458

Total stock-based compensation expense	$	24,916	$	19,009	$	20,000

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

	Year Ended December 31,

(in thousands)	2011		2010		2009
Employee stock options	$	4,528	$	7,003	$	10,271
Employee RSUs		13,290		9,783		7,473
Employee RSAs		5,498		398		470
Non-employee options and RSUs		307		1,186		501
ESPP		1,293		639		1,285

Total stock-based compensation expense	$	24,916	$	19,009	$	20,000

Schedule of unrecognized compensation cost, net of expected forfeitures, and estimated weighted-average amortization period

(in thousands, except amortization period)	Unrecognized Compensation Cost

Stock options	$	7,293	2.8
RSUs	$	12,449	2.0
RSAs	$	5,389	4.5

Summary of equity award activity under the 2008 Plan and the 2004 Plan

(in thousands, except per share data)			Weighted- average Exercise Price of Outstanding Options				Weighted- average Fair Value per Share at Grant				Weighted- average Fair Value per Share at Grant

Balance at December 31, 2008	9,953		$	16.01	2,260		$	21.51	77		$	24.42
Granted	356			14.90	950			14.66	—			—
Exercised	(1,333	)		7.77	—			—	—			—
Released RSUs/RSAs	—			—	(603	)		14.62	(20	)		20.18
Forfeited	(562	)		25.43	(565	)		29.78	—			—

Balance at December 31, 2009	8,414			16.63	2,042			14.15	57			25.87
Granted	321			14.90	1,170			10.55	—			—
Exercised	(784	)		9.60	—			—	—			—
Released RSUs/RSAs	—			—	(657	)		13.20	(24	)		25.55
Forfeited	(297	)		26.17	(658	)		26.26	—			—

Balance at December 31, 2010	7,654			16.91	1,897			12.45	33			26.10
Granted	629			21.98	471			24.96	2,483			24.42
Exercised	(1,265	)		8.87	—			—	—			—
Released RSUs/RSAs	—			—	(797	)		13.89	(74	)		24.96
Forfeited	(127	)		29.15	(29	)		15.35	—			—

Balance at December 31, 2011	6,891			18.62	1,542			15.47	2,442			24.42

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

	Year Ended December 31,

	2011	2010	2009
*Employee stock options*
Risk-free interest rate	1.10% - 2.57%	1.11% - 2.82%	1.55% - 2.98%
Expected life (in years)	5 - 6	5 - 6	5 - 6
Volatility	0.49 - 0.55	0.48 - 0.52	0.48 - 0.57
Dividend yield	—%	—%	—%
Weighted-average estimated fair value of stock options granted	$11.11	$7.41	$7.48
*Employee stock purchase plan issuances*
Risk-free interest rate	0.05% - 0.54%	0.19% - 0.79%	0.17% - 0.88%
Expected life (in years)	0.5 - 2	0.5 - 2	0.5 - 2
Volatility	0.48 - 0.59	0.50 - 0.69	0.50 - 0.84
Dividend yield	—%	—%	—%
Weighted-average estimated fair value of ESPP issuances	$9.46	$7.63	$6.42

Schedule of outstanding options to purchase common stock based on range of stock option exercise prices

	Options Outstanding						Options Exercisable

Range of Exercise Prices	Number Outstanding		Weighted- average Remaining Contractual Life in Years		Weighted- average Exercise Prices		Options Exercisable		Weighted- average Remaining Contractual Life in Years		Weighted- average Exercise Price
$3.10		557		1.3	$	3.10		557		1.3	$	3.10
$6.15 - $6.70		145		6.9		6.19		99		6.9		6.18
$8.53		218		0.4		8.53		218		0.4		8.53
$9.69		1,172		2.3		9.69		1,172		2.3		9.69
$9.70 - $16.00		924		5.1		14.69		749		4.5		15.00
$16.01 - $21.96		1,493		5.6		18.52		1,061		4.1		18.34
$21.97 - $29.70		1,385		5.5		27.34		1,136		4.7		28.00
$29.71 - $35.46		997		5.2		33.52		997		5.2		33.52

Total		6,891		4.4		18.62		5,989		3.7		18.61

- Definition

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

+ References + Details

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income Taxes

Significant components of the Company's deferred tax assets

	December 31,

(in thousands)	2011			2010
Deferred tax assets:
Net operating loss carryforwards	$	359,000		$	311,000
Deferred revenues		56,000			63,000
Capitalized research and development expenditures		35,000			34,000
Research and development tax credit carryforwards		37,000			34,000
Other		31,000			26,000
Valuation allowance		(518,000	)		(468,000	)

Net deferred tax assets	$	—		$	—

Reconciliation of gross unrecognized tax benefits


Gross unrecognized tax benefits as of January 1, 2009	$	36,200
Gross decrease for tax positions for prior years		(100	)
Gross increase in tax positions for current year		3,500

Unrecognized tax benefits as of December 31, 2009		39,600

Gross decrease for tax positions for prior years		—
Gross increase in tax positions for current year		3,000

Unrecognized tax benefits as of December 31, 2010		42,600

Gross decrease for tax positions for prior years		—
Gross increase in tax positions for current year		4,300

Unrecognized tax benefits as of December 31, 2011	$	46,900

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

+ References + Details

Description of Operations and Summary of Significant Accounting Policies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2011 USD ($) M	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)
Cash, Cash Equivalents and Restricted Cash
Maximum term of original maturity to classify instruments as cash equivalents (in months) \| M	3
Restricted cash	$ 893	$ 893
Information related to collaboration arrangements
Inventory sold at cost	24,512	24,223	$ 24,374
License, Development and Commercialization Agreement With Astellas \| VIBATIV
Information related to collaboration arrangements
Inventory sold at cost	1,171	2,058
Cost of unrealizable VIBATIV inventory	537	821	$ 1,175
Astellas \| License, Development and Commercialization Agreement With Astellas \| VIBATIV
Information related to collaboration arrangements
Inventory sold at cost	1,171	2,058
Inventory of VIBATIV	$ 0	$ 1,700

Description of Operations and Summary of Significant Accounting Policies (Details 2) $ in Millions	12 Months Ended
	Dec. 31, 2011 USD ($) Y
Deferred rent
Period over which average annual rent expense exceeded actual cash rent payments (in years)	1.5
Lease incentives \| $	$ 2.6
Equipment, furniture and fixtures
Information related to useful life of property and equipment
Minimum estimated useful life (in years)	5
Maximum estimated useful life (in years)	7
Software and computer equipment
Information related to useful life of property and equipment
Estimated useful life (in years)	3
Capitalized software
Information related to useful life of property and equipment
Estimated useful life (in years)	3

Description of Operations and Summary of Significant Accounting Policies (Details 3)	12 Months Ended
	Dec. 31, 2011 Y
2004 Equity Incentive Plan
Information related to stock-based compensation
Exercise price as a percentage of fair market value of stock	100.00%
2008 Equity Incentive Plan
Information related to stock-based compensation
Exercise price as a percentage of fair market value of stock	100.00%
Stock options
Information related to stock-based compensation
Stock options, contractual term (in years)	10
Vesting period (in years)	4 years

Description of Operations and Summary of Significant Accounting Policies (Details 4) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Gunderson law firm
Related parties
Fees incurred related to related party	$ 0.3	$ 0.7	$ 0.4

Net Loss per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Basic and diluted
Net loss	$ (115,344)	$ (83,862)	$ (85,302)
Weighted-average shares of common stock outstanding	84,493	72,103	63,084
Less: unvested RSAs	(2,442)	(33)	(57)
Weighted-average shares used in computing basic net loss per common share	82,051	72,070	63,027
Weighted-average shares used in computing diluted net loss per common share	82,051	72,070	63,027
Basic and diluted net loss per common share (in dollars per share)	$ (1.41)	$ (1.16)	$ (1.35)
Securities that could potentially dilute basic EPS in the future
Anti-dilutive securities (in shares)	12,132	13,304	13,758
Stock options
Securities that could potentially dilute basic EPS in the future
Anti-dilutive securities (in shares)	4,610	5,823	6,646
RSUs AND RSAs
Securities that could potentially dilute basic EPS in the future
Anti-dilutive securities (in shares)	854	813	444
Convertible debt
Securities that could potentially dilute basic EPS in the future
Anti-dilutive securities (in shares)	6,668	6,668	6,668

Collaboration Arrangements (Details)	1 Months Ended								12 Months Ended
Collaboration Arrangements (Details)	Nov. 30, 2011 USD ($) shares	Aug. 31, 2011 USD ($) shares	Jul. 31, 2011 shares	May 31, 2011 USD ($) shares	Feb. 28, 2011 USD ($) shares	Nov. 30, 2010 USD ($) shares	Oct. 31, 2004 USD ($) shares	May 31, 2004 USD ($) shares	Dec. 31, 2011 USD ($) product Y shares	Dec. 31, 2010 USD ($) shares	Dec. 31, 2009 USD ($)	Dec. 31, 2002 USD ($)	Jan. 06, 2012 Y	Oct. 31, 2011 USD ($)
Entity's common stock information
Aggregate Amounts										$ 93,478,000
Issuance of common stock for cash in private placement to a related party									$ 13,618,000	129,190,000
Net revenue recognized under the collaboration
Proceeds from VIBATIV delivered to Astellas									24,512,000	24,223,000	$ 24,374,000
GSK
Net revenue recognized under the collaboration
Amortization of deferred revenue									9,658,000	$ 9,826,000	15,073,000
Astellas
License, Development and Commercialization Agreement with Astellas
Upfront license, milestone and other fees received									$ 191,000,000
Class A common stock \| GSK
Entity's common stock information
Issuance of common stock for cash in private placement to a related party (in shares) \| shares	58,411	102,466		261,299	152,278
Issuance of common stock for cash in private placement to a related party	$ 1,298,000	$ 2,020,000		$ 6,689,000	$ 3,609,000
Shares of Class A common stock converted into common stock \| shares			9,401,499
Number of shares of Class A stock convertible into one share of common stock \| shares			1
Number of shares of common stock into which one share of Class A stock can be converted \| shares			1
Common Stock \| Common stock
Entity's common stock information
Common Stock Shares Purchased \| shares										8,625,000
Aggregate Amounts										$ 86,000
Issuance of common stock for cash in private placement to a related party (in shares) \| shares									574,000	5,750,000
Issuance of common stock for cash in private placement to a related party									$ 5,000	$ 58,000
Long-acting beta agonist (LABA) collaboration \| Preferred stock \| Series E \| Glaxo Group Limited, an affiliate of GSK
Entity's common stock information
Purchase price of shares issued												$ 40,000,000
Long-acting beta agonist (LABA) collaboration \| LAMA/LABA \| Maximum
Information related to collaboration arrangements
Percentage of royalties receivable									10.00%
Long-acting beta agonist (LABA) collaboration \| LABA/RELOVAIR collaboration
Information related to collaboration arrangements
Maximum obligation for milestone payments to GSK									$ 220,000,000
Number of combination products \| product									2
If global regulatory authorities accept the applications for RELOVAIR, which the Company anticipates will be filed by GSK beginning in mid-2012, a portion of these potential milestone payments could be payable to GSK within the next two years. \| Y									2
Royalty rate for first level of annual global net sales (as a percent)									15.00%
Royalty rate for sales above first level of annual global net sales (as a percent)									5.00%
Annual global sales level used to determine royalty rate									$ 3,000,000,000
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees									10,000,000
Milestone Payments									50,000,000
Total									60,000,000
Net revenue recognized under the collaboration
Amortization of deferred revenue									4,718,000	5,081,000	5,081,000
Strategic alliance with GSK
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees									41,000,000
Milestone Payments									69,000,000
Total									110,000,000
Strategic alliance with GSK \| Class A common stock \| GlaxoSmithKline LLC, an affiliate of GSK
Entity's common stock information
Common Stock Shares Purchased \| shares							433,757	6,387,096
Aggregate Amounts							$ 6,900,000	$ 108,900,000
Strategic alliance with GSK \| Common Stock \| Glaxo Group Limited, an affiliate of GSK
Entity's common stock information
Common Stock Shares Purchased \| shares						5,750,000
Aggregate Amounts						$ 129,400,000
Strategic alliance with GSK \| LAMA
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees									5,000,000
Milestone Payments									3,000,000
Total									$ 8,000,000
Net revenue recognized under the collaboration
Amortization of deferred revenue											4,240,000
Strategic alliance with GSK \| MABA
Information related to collaboration arrangements
Number of combination products to be developed and commercialized \| product									1
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees									$ 6,000,000
Milestone Payments									16,000,000
Total									22,000,000
Net revenue recognized under the collaboration
Amortization of deferred revenue									3,082,000	2,007,000	3,014,000
Strategic alliance with GSK \| MABA containing '081
Information related to collaboration arrangements
Potential upfront license and milestone payments that Company could receive in respect of combination medicines									$ 250,000,000
GSK Upfront License Fees, Milestone Payments and Revenue
Milestone payment received		$ 3,000,000
Strategic alliance with GSK \| MABA containing '081 - single agent
Information related to collaboration arrangements
Royalty rate for sales above first level of annual global net sales (as a percent)									7.50%
Annual global sales level used to determine royalty rate									$ 3,500,000,000
Potential upfront license and milestone payments that Company could receive									$ 125,000,000
Strategic alliance with GSK \| MABA containing '081 - single agent \| Maximum
Information related to collaboration arrangements
Royalty rate for first level of annual global net sales (as a percent)									20.00%
Strategic alliance with GSK \| MABA containing '081 - single agent \| Minimum
Information related to collaboration arrangements
Royalty rate for first level of annual global net sales (as a percent)									10.00%
Strategic alliance with GSK \| MABA containing '081 - combination product
Information related to collaboration arrangements
Royalty rate for combination products as a percentage of the rate applied to single products									70.00%
Strategic alliance with GSK \| MABA containing additional MABA
Information related to collaboration arrangements
Number of products which Company is obligated to use diligent efforts to discover after license of a program \| product									6
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees														$ 1,000,000
Net revenue recognized under the collaboration
Amortization of deferred revenue									$ 936,000
Strategic alliance with GSK \| MABA containing additional MABA \| Maximum
Information related to collaboration arrangements
Milestone payments receivable									$ 129,000,000
Strategic alliance with GSK \| MABA containing additional MABA - single agent
Information related to collaboration arrangements
Royalty rate for sales above first level of annual global net sales (as a percent)									10.00%
Annual global sales level used to determine royalty rate									$ 3,500,000,000
Strategic alliance with GSK \| MABA containing additional MABA - single agent \| Maximum
Information related to collaboration arrangements
Royalty rate for first level of annual global net sales (as a percent)									15.00%
Strategic alliance with GSK \| MABA containing additional MABA - single agent \| Minimum
Information related to collaboration arrangements
Royalty rate for first level of annual global net sales (as a percent)									10.00%
Strategic alliance with GSK \| MABA containing additional MABA - combination product
Information related to collaboration arrangements
Royalty rate for combination products as a percentage of the rate applied to single products									50.00%
Strategic alliance with GSK \| Non-license specific
GSK Upfront License Fees, Milestone Payments and Revenue
Upfront License Fees									$ 20,000,000
Total									20,000,000
Net revenue recognized under the collaboration
Amortization of deferred revenue									$ 1,858,000	2,738,000	2,738,000
License, Development and Commercialization Agreement With Astellas
Information related to collaboration arrangements
Percentage of royalties payable to Astellas									2.00%
License, Development and Commercialization Agreement With Astellas \| VIBATIV
Information related to collaboration arrangements
Percentage of royalties payable to Astellas									2.00%
GSK Upfront License Fees, Milestone Payments and Revenue
Term of royalty payment (in years) \| Y													10
Net revenue recognized under the collaboration
Amortization of deferred revenue									$ 12,975,000	12,975,000	11,338,000
Royalties from net sales of VIBATIV									2,422,000	1,123,000	766,000
Proceeds from VIBATIV delivered to Astellas									1,171,000	2,058,000
Cost of VIBATIV delivered to Astellas									(1,177,000)	(938,000)	(1,629,000)
Cost of unrealizable VIBATIV inventory									(537,000)	(821,000)	(1,175,000)
Total net revenue									14,854,000	14,397,000	$ 9,300,000
License, Development and Commercialization Agreement With Astellas \| VIBATIV \| Astellas
Net revenue recognized under the collaboration
Proceeds from VIBATIV delivered to Astellas									$ 1,171,000	$ 2,058,000

Marketable Securities (Details) $ in Thousands	12 Months Ended
Marketable Securities (Details) $ in Thousands	Dec. 31, 2011 USD ($) M	Dec. 31, 2010 USD ($)
Available-for-sale securities
Less amounts classified as cash equivalents	$ (38,721)	$ (157,151)
Less amounts classified as restricted cash	(893)	(893)
Amortized Cost	196,120	146,268
Gross Unrealized Gains	36	49
Gross Unrealized Losses	(19)	(16)
Amounts classified as marketable securities	196,137	146,301
Net realized gains (losses) on marketable securities
Realized gains		3
Realized losses	(2)
Net realized gains (losses)	(2)	3
Fair Value
Fair Value, In loss position for less than 12 months	50,561
Fair Value, Total	50,561
Gross Unrealized Losses
Estimated Gross Unrealized Losses, In loss position for less than 12 months	(19)
Gross Unrealized Losses, Total	$ (19)
Maturity period for marketable securities
Maximum contractual maturity period (in months)	12 months
Average contractual maturity period (in months) \| M	5
Available-for-sale securities and restricted and unrestricted cash
Available-for-sale securities
Amortized Cost	$ 235,734	304,312
Gross Unrealized Gains	36	49
Gross Unrealized Losses	(19)	(16)
Estimated Fair Value	235,751	304,345
U.S. government securities \| Available-for-sale securities and restricted and unrestricted cash
Available-for-sale securities
Amortized Cost	66,150	25,966
Gross Unrealized Gains	24	10
Estimated Fair Value	66,174	25,976
U.S. government agencies
Fair Value
Fair Value, In loss position for less than 12 months	47,807
Fair Value, Total	47,807
Gross Unrealized Losses
Estimated Gross Unrealized Losses, In loss position for less than 12 months	(17)
Gross Unrealized Losses, Total	(17)
U.S. government agencies \| Available-for-sale securities and restricted and unrestricted cash
Available-for-sale securities
Amortized Cost	93,183	54,625
Gross Unrealized Gains	9	30
Gross Unrealized Losses	(17)	(7)
Estimated Fair Value	93,175	54,648
U.S. corporate notes
Fair Value
Fair Value, In loss position for less than 12 months	2,754
Fair Value, Total	2,754
Gross Unrealized Losses
Estimated Gross Unrealized Losses, In loss position for less than 12 months	(2)
Gross Unrealized Losses, Total	(2)
U.S. corporate notes \| Available-for-sale securities and restricted and unrestricted cash
Available-for-sale securities
Amortized Cost	2,707	34,695
Gross Unrealized Gains		9
Gross Unrealized Losses	(2)	(9)
Estimated Fair Value	2,705	34,695
U.S. commercial paper \| Available-for-sale securities and restricted and unrestricted cash
Available-for-sale securities
Amortized Cost	34,973	97,221
Gross Unrealized Gains	3
Estimated Fair Value	34,976	97,221
Cash and money market funds \| Available-for-sale securities and restricted and unrestricted cash
Available-for-sale securities
Amortized Cost	38,721	91,805
Estimated Fair Value	$ 38,721	$ 91,805

Fair Value Measurements (Details) - Recurring basis - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Quoted Prices in Active markets for Identical Assets, Level 1
Estimated fair values of entity's financial assets
Fair value of financial assets	$ 163,501	$ 176,851
Quoted Prices in Active markets for Identical Assets, Level 1 \| U.S. government securities
Estimated fair values of entity's financial assets
Fair value of financial assets	66,174	25,976
Quoted Prices in Active markets for Identical Assets, Level 1 \| U.S. government agency securities
Estimated fair values of entity's financial assets
Fair value of financial assets	55,901	24,375
Quoted Prices in Active markets for Identical Assets, Level 1 \| U.S. corporate notes
Estimated fair values of entity's financial assets
Fair value of financial assets	2,705	34,695
Quoted Prices in Active markets for Identical Assets, Level 1 \| Money market funds
Estimated fair values of entity's financial assets
Fair value of financial assets	38,721	91,805
Significant Other Observable Inputs, Level 2
Estimated fair values of entity's financial assets
Fair value of financial assets	72,250	127,494
Significant Other Observable Inputs, Level 2 \| U.S. government agency securities
Estimated fair values of entity's financial assets
Fair value of financial assets	37,274	30,273
Significant Other Observable Inputs, Level 2 \| U.S. commercial paper
Estimated fair values of entity's financial assets
Fair value of financial assets	34,976	97,221
Total
Estimated fair values of entity's financial assets
Fair value of financial assets	235,751	304,345
Total \| U.S. government securities
Estimated fair values of entity's financial assets
Fair value of financial assets	66,174	25,976
Total \| U.S. government agency securities
Estimated fair values of entity's financial assets
Fair value of financial assets	93,175	54,648
Total \| U.S. corporate notes
Estimated fair values of entity's financial assets
Fair value of financial assets	2,705	34,695
Total \| U.S. commercial paper
Estimated fair values of entity's financial assets
Fair value of financial assets	34,976	97,221
Total \| Money market funds
Estimated fair values of entity's financial assets
Fair value of financial assets	$ 38,721	$ 91,805

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Property and Equipment
Property and equipment, gross	$ 57,764	$ 53,861
Less accumulated depreciation and amortization	(47,392)	(43,646)
Property and equipment, net	10,372	10,215
Depreciation expense	3,800	3,900	$ 4,300
Computer equipment
Property and Equipment
Property and equipment, gross	3,158	2,473
Software
Property and Equipment
Property and equipment, gross	4,628	4,592
Furniture and fixtures
Property and Equipment
Property and equipment, gross	3,821	3,689
Laboratory equipment
Property and Equipment
Property and equipment, gross	28,894	27,006
Leasehold improvements
Property and Equipment
Property and equipment, gross	$ 17,263	$ 16,101

Long-Term Obligations (Details)	1 Months Ended		12 Months Ended
Long-Term Obligations (Details)	Jan. 31, 2008 USD ($)	Jul. 31, 2002 USD ($)	Dec. 31, 2011 USD ($) shares D $ / shares	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)
Information related to long-term obligations
Carrying value of convertible subordinated notes			$ 172,500,000	$ 172,500,000
Estimated fair value of convertible subordinated notes			$ 189,588,000	202,391,000
Carrying value of note payable to lessor				42,000
Estimated fair value of note payable to lessor				42,000
Convertible Subordinated Notes
Debt disclosures
Loan amount	$ 172,500,000
Proceeds from issuance of debt, net of issuance costs	$ 166,700,000
Interest rate (as a percent)			3.00%
Conversion rate, number of shares to be issued per $1000 of principal amount of notes \| shares			38.6548
Principal amount used for debt instrument conversion ratio			$ 1,000
Initial conversion price of convertible notes into common stock (in dollars per share) \| $ / shares			$ 25.87
Unamortized debt issuance costs			$ 2,500,000
Amortization expense			$ 800,000	800,000	$ 800,000
Percentage of principal amount at which the entity may redeem some or all notes			100.00%
Percentage of closing sales price of the entity's common stock the conversion price must exceed in order for the notes to be convertible			130.00%
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be redeemable \| D			20
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be redeemable \| D			30
Note Payable
Debt disclosures
Loan amount		$ 900,000
Interest rate (as a percent)			14.50%
Aggregate maturities of note payable			$ 42,000
Capital Lease
Capital lease agreement
Obligation of lease arrangement			79,000	130,000
Minimum lease payments less interest			(52,000)	(51,000)
Present value of future payments			27,000	79,000
Less current portion			(27,000)	(52,000)
Long-term portion				27,000
Cost of equipment financed under capital leases			200,000
Accumulated amortization			$ 72,000	$ 41,000

Operating Leases and Subleases (Details) $ in Thousands	12 Months Ended
Operating Leases and Subleases (Details) $ in Thousands	Dec. 31, 2011 USD ($) Y sqft building count	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)
Operating Leases and Subleases
Number of lease terms \| count	2
Additional lease period (in years) \| Y	5
Number of buildings \| building	2
Area of building one in South San Francisco, California (in square feet) \| sqft	110,000
Area of building two in South San Francisco, California (in square feet) \| sqft	40,000
Future minimum lease payments
2012	$ 5,429
2013	5,029
2014	4,859
2015	5,005
2016	5,156
Thereafter	18,806
Total	44,284
Expenses and income associated with operating leases
Rent expense	6,702	$ 6,779	$ 6,559
Sublease income, net	(637)	$ (622)	$ (580)
Future minimum rental receivable under non-cancelable sublease	$ 200

Commitments and Contingencies (Details) $ in Millions	Dec. 31, 2011 USD ($)
Research and Development Arrangement [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
Total purchase obligations for services, development and supply agreements	$ 1.0

Stock-Based Compensation (Details)	12 Months Ended	96 Months Ended
Stock-Based Compensation (Details)	Dec. 31, 2011 M period shares	Dec. 31, 2011 $ / shares shares	Jul. 31, 2009 shares	Dec. 31, 2008 shares	Dec. 31, 2007 shares
2004 Equity Incentive Plan
Information related to stock-based compensation
Shares remaining available for issuance	2,090,098	2,090,098
2008 Equity Incentive Plan
Information related to stock-based compensation
Additional number of shares of common stock approved and authorized for issuance			200,000
Shares of common stock approved and authorized for issuance (in shares)				500,000
RSAs, certain members of Company's management
Information related to stock-based compensation
Shares of common stock approved and authorized for issuance (in shares)	1,168,000	1,168,000			71,000
Employee stock purchase plan
Information related to stock-based compensation
Shares remaining available for issuance	556,546	556,546
Purchase price as a percentage of fair market value of stock	85.00%
Consecutive and overlapping offering periods (in months) \| M	24
Number of offering periods \| period	4
Duration of purchase period (in months) \| M	6
Maximum contributions as a percentage of employee's eligible compensation	15.00%
Common stock, shares issued since plan inception in 2004		1,468,454
Shares of common stock approved and authorized for issuance (in shares)	2,025,000	2,025,000
Cumulative average sale price per share as of the period end (in dollars per share) \| $ / shares		$ 10.15
Performance-Contingent Restricted Stock Awards \| Senior management
Information related to stock-based compensation
Shares of common stock approved and authorized for issuance (in shares)	1,290,000	1,290,000
Performance-Contingent Restricted Stock Awards \| Officer
Information related to stock-based compensation
Shares of common stock approved and authorized for issuance (in shares)	25,000	25,000
Performance-Contingent Restricted Stock Units \| Senior management
Information related to stock-based compensation
Shares of common stock approved and authorized for issuance (in shares)	210,000	210,000

Stock-Based Compensation (Details 2)	1 Months Ended	12 Months Ended
Stock-Based Compensation (Details 2)	Jun. 30, 2010 USD ($)	Dec. 31, 2011 USD ($) Y	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)
Allocation of stock-based compensation expense
Stock-based compensation expense		$ 24,916,000	$ 19,009,000	$ 20,000,000
Information related to share-based compensation
Expense recorded in connection with stock option modification	$ 900,000
Non-employee options and RSUs
Allocation of stock-based compensation expense
Stock-based compensation expense		307,000	1,186,000	501,000
RSAs
Allocation of stock-based compensation expense
Stock-based compensation expense		5,498,000	398,000	470,000
Information related to share-based compensation
Total unrecognized compensation cost related to unvested stock-based compensation		$ 5,389,000
Weighted-average remaining service period of recognition of unrecognized compensation cost (in years) \| Y		4.5
Stock options
Allocation of stock-based compensation expense
Stock-based compensation expense		$ 4,528,000	7,003,000	10,271,000
Information related to share-based compensation
Total unrecognized compensation cost related to unvested stock-based compensation		$ 7,293,000
Weighted-average remaining service period of recognition of unrecognized compensation cost (in years) \| Y		2.8
RSUs
Allocation of stock-based compensation expense
Stock-based compensation expense		$ 13,290,000	9,783,000	7,473,000
Information related to share-based compensation
Total unrecognized compensation cost related to unvested stock-based compensation		$ 12,449,000
Weighted-average remaining service period of recognition of unrecognized compensation cost (in years) \| Y		2.0
RSAs performance-contingent \| Senior management
Information related to share-based compensation
Maximum potential expenses associated with 2011 performance-contingent restricted stock grant		$ 31,900,000
RSAs performance-contingent \| Officer
Information related to share-based compensation
Maximum potential expenses associated with 2011 performance-contingent restricted stock grant		475,000
Employee stock purchase plan
Allocation of stock-based compensation expense
Stock-based compensation expense		1,293,000	639,000	1,285,000
Research and development
Allocation of stock-based compensation expense
Stock-based compensation expense		13,422,000	10,322,000	11,542,000
Research and development \| RSAs performance-contingent \| Senior management
Information related to share-based compensation
Maximum potential expenses associated with 2011 performance-contingent restricted stock grant		6,300,000
General and administrative
Allocation of stock-based compensation expense
Stock-based compensation expense		11,494,000	$ 8,687,000	$ 8,458,000
General and administrative \| RSAs performance-contingent \| Senior management
Information related to share-based compensation
Maximum potential expenses associated with 2011 performance-contingent restricted stock grant		$ 25,600,000

Stock-Based Compensation (Details 3) $ / shares in Units, shares in Thousands, $ in Millions	12 Months Ended
	Dec. 31, 2011 USD ($) Y $ / shares shares	Dec. 31, 2010 USD ($) Y $ / shares shares	Dec. 31, 2009 USD ($) Y $ / shares shares	Dec. 31, 2011 USD ($) $ / shares	Dec. 31, 2010 $ / shares	Dec. 31, 2009 $ / shares
Stock options
Compensation Awards
Stock-based compensation (in shares) \| shares	629	321	356
Weighted-Average Exercise Price (in dollars per share)				$ 21.98	$ 14.90	$ 14.90
Number of shares outstanding (in shares)
Balance at the beginning of the period (in shares) \| shares	7,654	8,414	9,953
Granted (in shares) \| shares	629	321	356
Exercised (in shares) \| shares	(1,265)	(784)	(1,333)
Forfeited (in shares) \| shares	(127)	(297)	(562)
Balance at the end of the period (in shares) \| shares	6,891	7,654	8,414
Weighted-Average Exercise Price of Outstanding Options (in dollars per share)
Balance at the beginning of the period, Weighted-Average Exercise Price of Outstanding Options (in dollars per share)	$ 16.91	$ 16.63	$ 16.01
Granted, Weighted-Average Exercise Price of Outstanding Options (in dollars per share)				21.98	14.90	14.90
Exercised, Weighted-Average Exercise Price of Outstanding Options (in dollars per share)				8.87	9.60	7.77
Forfeited, Weighted-Average Exercise Price of Outstanding Options (in dollars per share)				$ 29.15	26.17	25.43
Balance at the end of the period, Weighted-Average Exercise Price of Outstanding Options (in dollars per share)	$ 18.62	$ 16.91	$ 16.63
Weighted-average assumptions
Risk-free interest rate, minimum (as a percent)	1.10%	1.11%	1.55%
Risk-free interest rate, maximum (as a percent)	2.57%	2.82%	2.98%
Expected life, minimum (in years) \| Y	5	5	5
Expected life, maximum (in years) \| Y	6	6	6
Volatility rate, minimum (as a percent)	0.49%	0.48%	0.48%
Volatility rate, maximum (as a percent)	0.55%	0.52%	0.57%
Weighted-average estimated fair value of stock options granted (in dollars per share)	$ 11.11	$ 7.41	$ 7.48
Aggregate intrinsic value of options outstanding \| $				$ 42.6
Aggregate intrinsic value of options exercisable \| $				$ 39.0
Total intrinsic value of options exercised \| $	$ 17.1	$ 7.2	$ 10.0
Total estimated fair value of options vested \| $	$ 6.4	$ 8.2	$ 15.7
Employee stock purchase plan
Weighted-Average Exercise Price of Outstanding Awards (in dollars per share)
Weighted-Average Fair Value at Grant or Issuance (in dollars per share)	$ 9.46	$ 7.63	$ 6.42
Weighted-average assumptions
Risk-free interest rate, minimum (as a percent)	0.05%	0.19%	0.17%
Risk-free interest rate, maximum (as a percent)	0.54%	0.79%	0.88%
Expected life, minimum (in years) \| Y	0.5	0.5	0.5
Expected life, maximum (in years) \| Y	2	2	2
Volatility rate, minimum (as a percent)	0.48%	0.50%	0.50%
Volatility rate, maximum (as a percent)	0.59%	0.69%	0.84%
RSUs AND RSAs
Number of shares outstanding, RSUs and RSAs
Released RSUs and RSAs (in shares) \| shares	(797)	(657)	(603)
Forfeited (in shares) \| shares	(29)	(658)	(565)
Weighted-Average Exercise Price of Outstanding Awards (in dollars per share)
Released RSUs and RSAs (in dollars per share)	$ 13.89	$ 13.20	$ 14.62
Forfeited (in dollars per share)				$ 15.35	26.26	29.78
RSAs performance-contingent
Compensation Awards
Timeframe for performance targets (in years) \| Y	6
RSUs
Number of shares outstanding, RSUs and RSAs
Balance at the beginning of the period (in shares) \| shares	1,897	2,042	2,260
Granted (in shares) \| shares	471	1,170	950
Balance at the end of the period (in shares) \| shares	1,542	1,897	2,042
Weighted-Average Exercise Price of Outstanding Awards (in dollars per share)
Balance at the beginning of the period (in dollars per share)	$ 12.45	$ 14.15	$ 21.51
Weighted-Average Fair Value at Grant or Issuance (in dollars per share)	24.96	10.55	14.66
Weighted-Average Fair Value (in dollars per share)	12.45	14.15	21.51	15.47	12.45	14.15
Balance at the end of the period (in dollars per share)	15.47	12.45	14.15
Weighted-average assumptions
Weighted-average estimated fair value of issuances (in dollars per share)	$ 12.45	$ 14.15	$ 21.51	15.47	12.45	14.15
RSUs and RSAs performance-contingent
Number of shares outstanding, RSUs and RSAs
Balance at the beginning of the period (in shares) \| shares	33	57	77
Released RSUs and RSAs (in shares) \| shares	(74)	(24)	(20)
Balance at the end of the period (in shares) \| shares	2,442	33	57
Weighted-Average Exercise Price of Outstanding Awards (in dollars per share)
Balance at the beginning of the period (in dollars per share)	$ 26.10	$ 25.87	$ 24.42
Weighted-Average Fair Value (in dollars per share)	26.10	25.87	24.42	24.42	26.10	25.87
Released RSUs and RSAs (in dollars per share)	24.96	25.55	20.18
Balance at the end of the period (in dollars per share)	24.42	26.10	25.87
Weighted-average assumptions
Weighted-average estimated fair value of issuances (in dollars per share)	$ 26.10	$ 25.87	$ 24.42	$ 24.42	$ 26.10	$ 25.87

Stock-Based Compensation (Details 4)	12 Months Ended
Stock-Based Compensation (Details 4)	Dec. 31, 2011 Y $ / shares shares
Non-employee director
Options outstanding and exercisable
Vesting period of initial grant to newly appointed director (in years)	2 years
Vesting period of annual grant upon re-election as director (in months)	12 months
Proration vesting period of annual grant upon re-election as director (in months)	12 months
Stock options
Options outstanding and exercisable
Number Outstanding (in shares) \| shares	6,891,000
Weighted-average Exercise Price, Options Outstanding (in dollars per share) \| Y	4.4
Weighted-average Exercise Price, Options Outstanding (in dollars per share)	$ 18.62
Options Exercisable (in shares) \| shares	5,989,000
Weighted-average Remaining Contractual Life in Years, Options Exercisable (in years) \| Y	3.7
Weighted-average Exercise Price, Options Exercisable (in dollars per share)	$ 18.61
Stock options \| Non-employee director
Options outstanding and exercisable
One-time grant of shares \| shares	6,000
Annual grant of shares upon re-election to the Board \| shares	6,000
Stock options \| Exercise price, $3.10
Options outstanding and exercisable
Exercise price range, low end of range (in dollars per share)	$ 3.10
Number Outstanding (in shares) \| shares	557,000
Weighted-average Exercise Price, Options Outstanding (in dollars per share) \| Y	1.3
Weighted-average Exercise Price, Options Outstanding (in dollars per share)	$ 3.10
Options Exercisable (in shares) \| shares	557,000
Weighted-average Remaining Contractual Life in Years, Options Exercisable (in years) \| Y	1.3
Weighted-average Exercise Price, Options Exercisable (in dollars per share)	$ 3.10
Stock options \| Exercise price range, $6.15 - $6.70
Options outstanding and exercisable
Exercise price range, low end of range (in dollars per share)	6.15
Exercise price range, high end of range (in dollars per share)	$ 6.70
Number Outstanding (in shares) \| shares	145,000
Weighted-average Exercise Price, Options Outstanding (in dollars per share) \| Y	6.9
Weighted-average Exercise Price, Options Outstanding (in dollars per share)	$ 6.19
Options Exercisable (in shares) \| shares	99,000
Weighted-average Remaining Contractual Life in Years, Options Exercisable (in years) \| Y	6.9
Weighted-average Exercise Price, Options Exercisable (in dollars per share)	$ 6.18
Stock options \| Exercise price, $8.53
Options outstanding and exercisable
Exercise price range, low end of range (in dollars per share)	$ 8.53
Number Outstanding (in shares) \| shares	218,000
Weighted-average Exercise Price, Options Outstanding (in dollars per share) \| Y	0.4
Weighted-average Exercise Price, Options Outstanding (in dollars per share)	$ 8.53
Options Exercisable (in shares) \| shares	218,000
Weighted-average Remaining Contractual Life in Years, Options Exercisable (in years) \| Y	0.4
Weighted-average Exercise Price, Options Exercisable (in dollars per share)	$ 8.53
Stock options \| Exercise price, $9.69
Options outstanding and exercisable
Exercise price range, low end of range (in dollars per share)	$ 9.69
Number Outstanding (in shares) \| shares	1,172,000
Weighted-average Exercise Price, Options Outstanding (in dollars per share) \| Y	2.3
Weighted-average Exercise Price, Options Outstanding (in dollars per share)	$ 9.69
Options Exercisable (in shares) \| shares	1,172,000
Weighted-average Remaining Contractual Life in Years, Options Exercisable (in years) \| Y	2.3
Weighted-average Exercise Price, Options Exercisable (in dollars per share)	$ 9.69
Stock options \| Exercise price range, $9.70 - $16.00
Options outstanding and exercisable
Exercise price range, low end of range (in dollars per share)	9.70
Exercise price range, high end of range (in dollars per share)	$ 16.00
Number Outstanding (in shares) \| shares	924,000
Weighted-average Exercise Price, Options Outstanding (in dollars per share) \| Y	5.1
Weighted-average Exercise Price, Options Outstanding (in dollars per share)	$ 14.69
Options Exercisable (in shares) \| shares	749,000
Weighted-average Remaining Contractual Life in Years, Options Exercisable (in years) \| Y	4.5
Weighted-average Exercise Price, Options Exercisable (in dollars per share)	$ 15.00
Stock options \| Exercise price range, $16.01 - $21.96
Options outstanding and exercisable
Exercise price range, low end of range (in dollars per share)	16.01
Exercise price range, high end of range (in dollars per share)	$ 21.96
Number Outstanding (in shares) \| shares	1,493,000
Weighted-average Exercise Price, Options Outstanding (in dollars per share) \| Y	5.6
Weighted-average Exercise Price, Options Outstanding (in dollars per share)	$ 18.52
Options Exercisable (in shares) \| shares	1,061,000
Weighted-average Remaining Contractual Life in Years, Options Exercisable (in years) \| Y	4.1
Weighted-average Exercise Price, Options Exercisable (in dollars per share)	$ 18.34
Stock options \| Exercise price range, $21.97 - $29.70
Options outstanding and exercisable
Exercise price range, low end of range (in dollars per share)	21.97
Exercise price range, high end of range (in dollars per share)	$ 29.70
Number Outstanding (in shares) \| shares	1,385,000
Weighted-average Exercise Price, Options Outstanding (in dollars per share) \| Y	5.5
Weighted-average Exercise Price, Options Outstanding (in dollars per share)	$ 27.34
Options Exercisable (in shares) \| shares	1,136,000
Weighted-average Remaining Contractual Life in Years, Options Exercisable (in years) \| Y	4.7
Weighted-average Exercise Price, Options Exercisable (in dollars per share)	$ 28.00
Stock options \| Exercise price range, $29.71 - $35.46
Options outstanding and exercisable
Exercise price range, low end of range (in dollars per share)	29.71
Exercise price range, high end of range (in dollars per share)	$ 35.46
Number Outstanding (in shares) \| shares	997,000
Weighted-average Exercise Price, Options Outstanding (in dollars per share) \| Y	5.2
Weighted-average Exercise Price, Options Outstanding (in dollars per share)	$ 33.52
Options Exercisable (in shares) \| shares	997,000
Weighted-average Remaining Contractual Life in Years, Options Exercisable (in years) \| Y	5.2
Weighted-average Exercise Price, Options Exercisable (in dollars per share)	$ 33.52
RSUs \| Non-employee director
Options outstanding and exercisable
One-time grant of shares \| shares	6,000
Annual grant of shares upon re-election to the Board \| shares	6,000

Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Deferred tax assets:
Net operating loss carryforwards	$ 359,000	$ 311,000
Deferred revenues	56,000	63,000
Capitalized research and development expenditures	35,000	34,000
Research and development tax credit carryforwards	37,000	34,000
Other	31,000	26,000
Valuation allowance	(518,000)	(468,000)
Information related to valuation allowance
Increase in valuation allowance	50,000	35,000	$ 32,000
Gross unrecognized tax benefits
Gross unrecognized tax benefits at the beginning of the period	42,600	39,600	36,200
Gross decrease for tax positions for prior years			(100)
Gross increase in tax positions for current year	4,300	3,000	3,500
Gross unrecognized tax benefits at the end of the period	46,900	$ 42,600	$ 39,600
Federal
Operating Loss and Tax Credit Carryforward [Line Items]
Net operating loss carryfowards	1,068,200
Federal \| Research and Development
Operating Loss and Tax Credit Carryforward [Line Items]
Tax credit carryforward amount	43,200
State
Operating Loss and Tax Credit Carryforward [Line Items]
Net operating loss carryfowards	425,000
State \| Research
Operating Loss and Tax Credit Carryforward [Line Items]
Tax credit carryforward amount	$ 46,900

Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Feb. 29, 2012	Dec. 31, 2011	Dec. 31, 2010
Information related to subsequent events
Issuance of common stock for cash in private placement to a related party		$ 13,618	$ 129,190
License, Development and Commercialization Agreement With Astellas
Information related to subsequent events
Percentage of royalties payable to Astellas		2.00%
Future inventory cost		$ 11,000
Shares issued
Information related to subsequent events
Agreement to issue stock in private placement, number of shares	88,468
Agreement to issue stock in private placement, price per share (in dollars per share)	$ 18.12
Issuance of common stock for cash in private placement to a related party	$ 1,600
Contract termination \| License, Development and Commercialization Agreement With Astellas
Information related to subsequent events
Remaining non-cash deferred upfront license fees and milestone payments		$ 125,000