View Filing Data

Prepaid expenses and other current assets

3,304

3,338

6,297

5,416

Total current assets

467,950

469,001

Long-term investments

47,351

55,601

Long-term restricted cash and investments

4,150

Property and equipment, net

2,594

2,071

Goodwill

63,684

Other long-term assets

1,251

1,232

Total assets

586,980

595,739

Current liabilities:

Accounts payable

4,649

6,565

Accrued compensation and benefits

14,490

20,334

Accrued clinical trial liabilities

14,478

14,131

Convertible notes

113,349

109,122

Term loan payable

80,000

Other current liabilities

30,662

19,665

24,659

18,969

Total current liabilities

202,287

268,786

Other long-term liabilities

261,236

237,094

3,707

541

Total liabilities

467,230

506,421

Commitments

Stockholders’ equity

Preferred stock, $0.001 par value, 10,000,000 shares authorized and no shares issued

Common stock, $0.001 par value; 400,000,000 shares authorized; issued and outstanding: 292,302,330 and 289,923,798 at March 31, 2017 and December 31, 2016, respectively

292

290

Additional paid-in capital

2,086,483

2,072,591

Accumulated other comprehensive loss

(326)

(416)

Accumulated deficit

(1,966,699)

(1,983,147)

Total stockholders’ equity

119,750

89,318

Total liabilities and stockholders’ equity

$ 586,980

$ 595,739

[1]	The condensed consolidated balance sheet as of December 31, 2016 has been derived from the audited financial statements as of that date.

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	292,302,330	289,923,798
Common stock, shares outstanding	292,302,330	289,923,798

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues:
Net product revenues	$ 68,877	$ 9,099
Collaboration revenues	12,010	6,328
Total revenues	80,887	15,427
Operating expenses:
Cost of goods sold	3,203	685
Research and development	23,210	28,926
Selling, general and administrative	34,260	34,857
Restructuring charges	28	94
Total operating expenses	60,701	64,562
Income (loss) from operations	20,186	(49,135)
Other expense, net:
Interest income and other, net	1,068	202
Interest expense	(4,420)	(10,290)
Total other expense, net	(3,352)	(10,088)
Income (loss) before income taxes	16,834	(59,223)
Income tax expense	134	0
Net income (loss)	$ 16,700	$ (59,223)
Net income (loss) per share, basic (in dollars per share)	$ 0.06	$ (0.26)
Net income (loss) per share, diluted (in dollars per share)	$ 0.05	$ (0.26)
Shares used in computing net income (loss) per share, basic	290,870	228,304
Shares used in computing net income (loss) per share, diluted	309,535	228,304

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Statement of Comprehensive Income [Abstract]

Net income (loss)

$ 16,700

$ (59,223)

Other comprehensive income

^[1]

190

Comprehensive income (loss)

$ 16,790

$ (59,033)

[1]

Other comprehensive income consisted solely of unrealized gains or losses, net on available-for-sale securities arising during the periods presented. There were nominal or no reclassification adjustments to net income (loss) resulting from realized gains or losses on the sale of securities and there was no income tax expense related to other comprehensive income during those periods.

Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Reclassification adjustments to net income (loss) resulting from realized gains or losses on sale of securities	$ 0	$ 0
Other comprehensive income, tax	$ 0	$ 0

Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2017

Mar. 31, 2016

Statement of Cash Flows [Abstract]

Net income (loss)

$ 16,700

$ (59,223)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

281

229

Stock-based compensation expense

4,713

11,185

Amortization of debt discounts and debt issuance costs

3,161

Accrual of interest paid in kind

2,068

1,936

Other

680

440

Changes in assets and liabilities:

Trade and other receivables

6,541

(4,956)

Prepaid expenses and other current assets

144

(881)

(985)

Other long-term assets

(19)

241

Accounts payable

(1,916)

(744)

Accrued compensation and benefits

(5,844)

2,413

Accrued clinical trial liabilities

347

(1,936)

Accrued collaboration liability

3,736

Deferred revenue

35,139

198,802

Other current and long-term liabilities

10,926

2,367

Net cash provided by (used in) operating activities

68,858

156,810

Cash flows from investing activities:

Purchases of property and equipment

(808)

(682)

Proceeds from sale of property and equipment

107

Proceeds from maturities of restricted cash and investments

3,504

2,004

Purchase of restricted cash and investments

(3,504)

(2,004)

Proceeds from sale of investments

37,294

Proceeds from maturities of investments

122,507

30,108

Purchases of investments

(124,494)

(49,235)

Net cash provided by (used in) investing activities

34,503

(19,685)

Cash flows from financing activities:

Proceeds from exercise of stock options

9,675

(1,543)

(1,914)

Principal payments on debt

(80,000)

Net cash used in financing activities

(71,868)

(1,877)

Net increase in cash and cash equivalents

31,493

135,248

Cash and cash equivalents at beginning of year

151,686

^[1]

141,634

Cash and cash equivalents at end of year

$ 183,179

$ 276,882

[1]	The condensed consolidated balance sheet as of December 31, 2016 has been derived from the audited financial statements as of that date.

Organization and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Summary of Significant Accounting Policies

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

Exelixis, Inc. (“Exelixis,” “we,” “our” or “us”) is a biopharmaceutical company committed to the discovery, development and commercialization of new medicines to improve care and outcomes for people with cancer. Since our founding in 1994, three products discovered at Exelixis have progressed through clinical development, received regulatory approval, and entered the commercial marketplace. Two are derived from cabozantinib, an inhibitor of multiple tyrosine kinases including MET, AXL, and VEGF receptors: CABOMETYX™ tablets approved for previously treated advanced kidney cancer and COMETRIQ^® capsules approved for progressive, metastatic medullary thyroid cancer. The third product, COTELLIC^®, is a formulation of cobimetinib, a selective inhibitor of MEK, marketed under a collaboration with Genentech (a member of the Roche Group), and is approved as part of a combination regimen to treat advanced melanoma.

Basis of Consolidation

The condensed consolidated financial statements include the accounts of Exelixis and those of our wholly-owned subsidiaries. These entities’ functional currency is the U.S. dollar. All intercompany balances and transactions have been eliminated.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.”) for interim financial information and pursuant to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation of the results of operations and cash flows for the periods presented have been included.

We have adopted a 52- or 53-week fiscal year policy that generally ends on the Friday closest to December 31^st. Fiscal year 2017 will end on December 29, 2017 and fiscal year 2016 ended on December 30, 2016. For convenience, references in this report as of and for the fiscal periods ended March 31, 2017 and April 1, 2016, and as of and for the fiscal years ended December 29, 2017 and December 30, 2016, are indicated as being as of and for the periods ended March 31, 2017 and March 31, 2016, and the years ended December 31, 2017 and December 31, 2016, respectively.

Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017 or for any future period. These financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2016, included in our Annual Report on Form 10-K filed with the SEC on February 27, 2017.

Use of Estimates

The preparation of our condensed consolidated financial statements conforms to accounting principles generally accepted in the U.S. which requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses, and related disclosures. On an ongoing basis, management evaluates its estimates including, but not limited to, those related to revenue recognition, including deductions from revenues (such as rebates, chargebacks, sales returns and sales allowances), the period of performance, identification of deliverables and evaluation of milestones with respect to our collaborations, the amounts of revenues and expenses under our profit and loss sharing agreement, recoverability of inventory, certain accrued liabilities including accrued clinical trial liability, and stock-based compensation. We base our estimates on historical experience and on various other market-specific and other relevant assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ materially from those estimates.

Correction of an Immaterial Error

During the third quarter of 2016, we identified errors in the Consolidated Balance Sheets and Consolidated Statements of Operations, Comprehensive Loss and Cash Flows for 2015, 2014, 2013, and 2012, and in the unaudited interim Condensed Consolidated Balance Sheets and Condensed Consolidated Statements of Operations, Comprehensive Loss and Cash Flows for all prior interim fiscal periods from September 30, 2012 through June 30, 2016. Specifically, in 2012 we incorrectly calculated 1) the allocation between Additional paid-in capital and Convertible notes of the $287.5 million aggregate principal amount from our 4.25% Convertible Senior Subordinated Notes due 2019 (“2019 Notes”); and 2) the amortization of the debt discount associated with the 2019 Notes during 2012 and all subsequent periods.

Having evaluated the materiality of these errors from a quantitative and qualitative perspective, management has concluded that although the accumulation of these errors was significant to the three and nine months ended September 30, 2016, the correction of these errors would not be material to any individual prior period, and did not have an effect on the trend of financial results, taking into account the requirements of the SEC Staff Accounting Bulletin No. 99, Materiality and Staff Accounting Bulletin No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements. Because management has concluded that these errors are not material, we will correct them prospectively when the consolidated balance sheets, statements of operations, comprehensive loss and cash flows for such periods are included in future filings.

Following are the amounts (in thousands, except per share amounts) that should have been reported for the affected line items of the statement of operations, statement of comprehensive loss and statement of cash flows:



	Three Months Ended March 31, 2016
Statement of Operations:
Interest expense, overstated by $2,124 for the three months ended March 31, 2016	$	(10,290	)
Total other expense, net, overstated by $2,124 for the three months ended March 31, 2016	$	(10,088	)
Net loss, overstated by $2,124 for the three months ended March 31, 2016	$	(59,223	)
Net loss per share, basic and diluted, overstated by $0.01 for the three months ended March 31, 2016	$	(0.26	)
Statements of Comprehensive Loss:
Comprehensive loss, overstated by $2,124 for the three months ended March 31, 2016	$	(59,033	)
Statements of Cash Flows ⁽¹⁾:
Net loss, overstated by $2,124 for the three months ended March 31, 2016	$	(59,223	)
Accretion of debt discount and debt issuance costs, overstated by $2,124 for the three months ended March 31, 2016	$	3,161

____________________


(1)	The error did not impact our net cash provided by or used in operating activities, financing activities or investing activities for any of the periods presented.

These errors did not affect any other caption or total in our unaudited condensed or annual consolidated financial statements as of and for the three months ended March 31, 2016. See “Note 1 - Organization and Summary of Significant Accounting Policies” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 for the amounts of the corrections and the amounts that should have been reported for 2015, 2014, 2013, and 2012 in the affected line items of the statements of operations, statements of comprehensive loss and statements of cash flows.

Reclassifications

Certain prior period amounts in the condensed consolidated financial statements have been reclassified to conform to current period presentation. We reclassified $1.8 million in accrued product sales discounts payable to our customers as of December 31, 2016 from Other current liabilities to Trade and other receivables in the accompanying Condensed Consolidated Balance Sheets. We have also reclassified the related balances between the Changes in assets and liabilities line items in the accompanying Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 to conform the presentation of those line items to the corresponding presentation of assets and liabilities in our accompanying Condensed Consolidated Balance Sheets.

Segment Information

We operate as a single reportable segment.

Stock-Based Compensation

In January 2017, we adopted Accounting Standards Update (“ASU”) No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, (“ASU 2016-09”). ASU 2016-09 is aimed at the simplification of several aspects of the accounting for employee share-based payment transactions, including accounting for forfeitures, income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows.

Pursuant to the adoption of ASU 2016-09, we have made an election to record forfeitures when they occur. Previously, stock-based compensation was based on the number of awards expected to vest after considering estimated forfeitures. The change in accounting principle with regards to forfeitures was adopted using a modified retrospective approach, and no prior periods were restated as a result of this change in accounting principle, with a cumulative adjustment of $0.3 million to accumulated deficit and additional paid-in-capital as of January 1, 2017.

As a result of the adoption of ASU 2016-09, we also recorded an increase to the federal and state net operating losses of $56.9 million for excess tax benefits previously not included. The resulting increase to the deferred tax assets of approximately $21.2 million is offset by a corresponding increase to the valuation allowance, resulting in a net impact of zero on our income tax expense and our Condensed Consolidated Balance Sheets.

ASU 2016-09 also requires that cash paid to taxing authorities when directly withholding shares for tax withholding purposes should be classified as a financing activity. Previously, we classified such payments as operating cash flows. The change in accounting principle with regards to such cash flows was adopted using a retrospective approach. Accordingly, we reclassified $1.9 million in our Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2016 to reflect a $1.9 million increase in Cash provided by operating activities and a corresponding increase to Cash used in financing activities.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”). In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date, which delays the effective date of ASU 2014-09 by one year. ASU 2014-09, as amended, becomes effective for us in the first quarter of fiscal year 2018, but allows us to adopt the standard one year earlier. We will adopt ASU 2014-09 in the first quarter of fiscal year 2018. ASU 2014-09 also permits two methods of adoption: retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the modified retrospective method). We will adopt ASU 2014-09 using the modified retrospective method.

The core principle of ASU 2014-09 is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. generally accepted accounting pronouncements. We do not expect that ASU 2014-09 will have a material impact on the recognition of revenue from product sales. We are still in the process of evaluating the effect that this guidance will have on revenue recognition from our collaboration agreements such as our arrangements with Ipsen Pharma SAS (“Ipsen”), Takeda Pharmaceutical Company Ltd. (“Takeda”) and Genentech. We expect our evaluation to be completed by the end of the second quarter of 2017.

Collaboration Agreements

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaboration Agreements

COLLABORATION AGREEMENTS

Ipsen Collaboration

In February 2016, we entered into a collaboration and license agreement with Ipsen (the “Ipsen Collaboration Agreement”) for the commercialization and further development of cabozantinib. Pursuant to the terms of the Ipsen Collaboration Agreement, Ipsen received exclusive commercialization rights for current and potential future cabozantinib indications outside of the U.S., Canada and Japan (the “Ipsen Territory”). The Ipsen Collaboration Agreement was subsequently amended in December 2016 (the “Amendment”) to include commercialization rights in Canada in the Ipsen Territory. We have also agreed to collaborate with Ipsen on the development of cabozantinib for current and potential future indications.

In consideration for the exclusive license and other rights contained in the Ipsen Collaboration Agreement, Ipsen paid us an upfront nonrefundable payment of $200.0 million in March 2016. Additionally, as a result of the Amendment, we received a $10.0 million upfront nonrefundable payment from Ipsen in December 2016 and, as a result of the approval of cabozantinib in second-line renal cell carcinoma (“RCC”) by the European Commission (“EC”) in September 2016, we received a $60.0 million milestone in November 2016. We are receiving a 2% royalty on the initial $50.0 million of net sales by Ipsen, and are entitled to receive a 12% royalty on the next $100.0 million of net sales by Ipsen. After the initial $150.0 million of sales, we are entitled to receive a tiered royalty of 22% to 26% on annual net sales by Ipsen; these tiers will reset each calendar year. We are primarily responsible for funding cabozantinib-related development costs for those trials in existence at the time we entered into the Ipsen Collaboration Agreement; global development costs for additional trials will be shared between the parties, with Ipsen reimbursing us for 35% of such costs, provided Ipsen opts in to participate in such additional trials. Pursuant to the terms of the Ipsen Collaboration Agreement, we will remain responsible for the manufacture and supply of cabozantinib for all development and commercialization activities. As part of the collaboration agreement, we entered into a supply agreement pursuant to which we will supply finished, labeled product to Ipsen for distribution in the Ipsen Territories at our cost, as defined in the agreement, which excludes the 3% royalty we are required to pay GlaxoSmithKline on Ipsen’s Net Sales of any product incorporating cabozantinib.

The Ipsen Collaboration Agreement contains multiple deliverables consisting of intellectual property licenses, delivery of products and/or materials containing cabozantinib to Ipsen for all development and commercial activities, research and development services, and participation on the joint steering, development and commercialization committees (as defined in the Ipsen Collaboration Agreement). We determined that these deliverables do not have stand-alone value and accordingly, combined these deliverables into a single unit of accounting and allocated the entire arrangement consideration to that combined unit of accounting. As a result, the upfront payment of $200.0 million, received in the first quarter of 2016 and the $10.0 million upfront payment received in December 2016 in consideration for the development and commercialization rights in Canada are being recognized ratably over the term of the Ipsen Collaboration Agreement, through early 2030, which is the current estimated patent expiration of cabozantinib in the European Union. At the time we entered into the Ipsen Collaboration Agreement, we also determined that the $60.0 million milestone we achieved upon the approval of cabozantinib by the EC in second-line RCC was not substantive due to the relatively low degree of uncertainty and relatively low amount of effort required on our part to achieve the milestone as of the date of the collaboration agreement; the $60.0 million was deferred as of the date of the European Medicines Agency’s approval of cabozantinib in second-line RCC in September 2016 and is being recognized ratably over the term of the Ipsen Collaboration Agreement. The two $10.0 million milestones for the first commercial sales of CABOMETYX in Germany and the United Kingdom were determined to be substantive at the time we entered into the Ipsen Collaboration Agreement and were recognized as collaboration revenues in the fourth quarter of 2016. We determined that the remaining development and regulatory milestones are substantive and will be recognized as revenue in the periods in which they are achieved. We consider the contingent payments due to us upon the achievement of specified sales volumes to be similar to royalty payments. Reimbursements for development costs are classified as revenue as the development services represent our ongoing major or central operations.

During the quarter ended March 31, 2017, we reclassified $9.0 million of deferred revenue to Other current and long-term liabilities, and accordingly adjusted our amortization of the upfront payment of $200.0 million as a result of a change in operational responsibilities for certain clinical programs in the Ipsen Territory. As of March 31, 2017, we had paid $1.1 million toward the $9.0 million of reimbursements due to Ipsen for these clinical programs.

See “Note 2 - Collaboration Agreements” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 27, 2017 for additional description of our collaboration agreement with Ipsen.

During the three months ended March 31, 2017 and 2016, collaboration revenues under the Ipsen Collaboration Agreement were as follows (in thousands):



	Three Months Ended March 31,
	2017			2016
Amortization of upfront payments and deferred milestone	$	4,305		$	1,198
Royalty revenue	224			—
Development cost reimbursements	337			—
Product supply agreement revenue	991			—
Cost of supplied product	(991		)	—
Royalty payable to GlaxoSmithKline on net sales by Ipsen	(336		)	—
Collaboration revenues under the Ipsen Collaboration Agreement	$	4,530		$	1,198

As of March 31, 2017, short-term and long-term deferred revenue relating to the Ipsen Collaboration Agreement was $19.0 million and $224.4 million, respectively.

Genentech Collaboration

In December 2006, we out-licensed the development and commercialization of cobimetinib to Genentech pursuant to a worldwide collaboration agreement. Under the terms of our collaboration agreement with Genentech for cobimetinib, we are entitled to a share of U.S. profits and losses received in connection with the commercialization of cobimetinib. The profit and loss share has multiple tiers: we are entitled to 50% of profits and losses from the first $200.0 million of U.S. actual sales, decreasing to 30% of profits and losses from U.S. actual sales in excess of $400.0 million. In addition, we are entitled to low double-digit royalties on ex-U.S. net sales. In November 2013, we exercised an option under the collaboration agreement to co-promote in the U.S. In 2015, we began fielding 25% of the sales force promoting COTELLIC in combination with Zelboraf as a treatment for patients with BRAF V600E or V600K mutation-positive advanced melanoma.

In January 2017, we announced that Genentech had withdrawn its counterclaim against us in the ongoing JAMS arbitration concerning alleged breaches of the parties’ collaboration agreement. Genentech had asserted a counterclaim for breach of contract, which sought monetary damages and interest related to cost allocations under the collaboration agreement. When notifying the arbitral panel, and us, of this unilateral action, Genentech further stated that it is changing the manner in which it allocates promotional expenses of the COTELLICplus Zelboraf (vemurafenib) combination therapy. Genentech’s revised allocation applies retrospectively and prospectively and substantially reduces our exposure to costs associated with promotion of the COTELLICplus Zelboraf combination in the U.S. Notwithstanding Genentech’s change of approach, other significant issues remain in dispute between the parties. As a result, we will continue to press our position before the arbitral panel to obtain a just resolution of these claims. The ultimate outcome and timing of the arbitration is difficult to predict.

During the three months ended March 31, 2017 and 2016, ex-U.S. royalty revenues and U.S. losses under the collaboration agreement with Genentech were as follows (in thousands):



	Three Months Ended March 31,
	2017			2016
Royalty revenues on ex-U.S. sales of COTELLIC included in Collaboration revenues	$	2,298		$	130
U.S. losses included in Selling, general and administrative expenses	$	(626	)	$	(7,293	)

The U.S. losses under the collaboration agreement include personnel and other costs we have incurred to co-promote COTELLIC plus Zelboraf in the U.S.

Royalty revenues from the collaboration agreement with Genentech are based on amounts reported to us by our collaboration partner and are recorded when such information becomes available to us; for 2017 such information is expected to be available in the current quarter and for 2016 such information was not available until the following quarter, meaning that in 2016 we recorded royalty revenues on a one quarter lag. As a result of this change, during the three months ended March 31, 2017 we recorded royalty revenues earned for both the fourth quarter of 2016 and the first quarter of 2017 of $1.1 million and $1.2 million, respectively.

Takeda Collaboration

On January 30, 2017, we entered into a collaboration and license agreement (the “Takeda Collaboration Agreement”) with Takeda for the commercialization and further clinical development of cabozantinib in Japan. Pursuant to the terms of the Takeda Collaboration Agreement, Takeda will have exclusive commercialization rights for current and potential future cabozantinib indications in Japan. The companies have also agreed to collaborate on the clinical development of cabozantinib in Japan. The operation and strategic direction of the parties’ collaboration will be governed through a joint executive committee and appropriate subcommittees.

In consideration for the exclusive license and other rights contained in the Takeda Collaboration Agreement, Takeda paid us an upfront nonrefundable payment of $50.0 million in February 2017. We will be eligible to receive development, regulatory and first-sales milestones of up to $95.0 million related to second-line RCC, first-line RCC and second-line hepatocellular carcinoma (“HCC”), as well as additional development, regulatory and first-sales milestone payments for potential future indications. The Takeda Collaboration Agreement also provides that we will be eligible to receive pre-specified payments of up to $83.0 million associated with potential sales milestones. We will also receive royalties on net sales of cabozantinib in Japan at an initial tiered rate of 15% to 24% on net sales for the first $300.0 million of cumulative net sales. Thereafter, the royalty rate will be adjusted to 20% to 30% on annual net sales.

Takeda will be responsible for 20% of the costs associated with the global cabozantinib development plan’s current and future trials, provided Takeda opts to participate in such future trials, and 100% of costs associated with the cabozantinib development activities that are exclusively for the benefit of Japan. Pursuant to the terms of the Takeda Collaboration Agreement, we will remain responsible for the manufacture and supply of cabozantinib for all development and commercialization activities under the collaboration. As part of the collaboration, the parties will enter into clinical and commercial supply agreements covering the manufacture and supply of cabozantinib for Takeda and a quality agreement setting forth in detail the quality assurance arrangements and procedures for our manufacture of cabozantinib.

The Takeda Collaboration Agreement may be terminated for cause by either party based on uncured material breach by the other party, bankruptcy of the other party or for safety reasons. For clarity, Takeda’s failure to achieve specified levels of commercial performance, based upon sales volume and/or promotional effort, during the first six years of the collaboration shall constitute a material breach of the Takeda Collaboration Agreement. We may terminate the agreement if Takeda challenges or opposes any patent covered by the Takeda Collaboration Agreement. At any time prior to August 1, 2023, the parties may mutually agree to terminate the Takeda Collaboration Agreement if Japan’s Pharmaceuticals and Medical Devices Agency is unlikely to grant approval of the marketing authorization application in any cancer indication in Japan. After the commercial launch of cabozantinib in Japan, Takeda may terminate the Takeda Collaboration Agreement upon twelve months’ prior written notice following the third anniversary of the first commercial sale of cabozantinib in Japan. Upon termination by either party, all licenses granted by us to Takeda will automatically terminate, and the licenses granted by Takeda to us shall survive such termination and shall automatically become worldwide.

The Takeda Collaboration Agreement contains multiple deliverables consisting of intellectual property licenses, delivery of products and/or materials containing cabozantinib to Takeda for all development and commercial activities, research and development services, and participation on the joint executive, development and commercialization committees (as defined in the Takeda Collaboration Agreement). We determined that these deliverables, other than the commercial supply and joint commercialization committee participation, are non-contingent in nature. The commercial supply deliverable was deemed contingent, primarily due to the fact that there is uncertainty around approval in Japan, which is dependent on successful bridging study results. We also determined that the non-contingent deliverables do not have stand-alone value, because each one of them has value only if we meet our obligation as a whole to provide Takeda with research and development services, including clinical supply of cabozantinib under the Takeda Collaboration Agreement. Accordingly, we combined the non-contingent deliverables into a single unit of accounting and allocated the $50.0 million upfront fee to that combined unit of accounting. We also determined that the level of effort required of us to meet our obligations under the Takeda Collaboration Agreement is not expected to vary significantly over the development period of the Takeda Collaboration Agreement. As a result, the upfront payment of $50.0 million, received in the first quarter of 2017, will be recognized ratably over the development period of the Takeda Collaboration Agreement of approximately four years. We determined that the development and regulatory milestones are substantive and will be recognized as revenue in the periods in which they are achieved. We consider the contingent payments due to us upon the achievement of specified sales volumes to be similar to royalty payments. We will record reimbursements for development costs as revenue as the development services represent a part of our ongoing major or central operations.

During the three months ended March 31, 2017, collaboration revenues under the Takeda Collaboration Agreement were as follows (in thousands):



	Three Months Ended March 31, 2017
Amortization of upfront payment	$	1,887
Development cost reimbursements	795
Collaboration revenues under the Takeda Collaboration Agreement	$	2,682

As of March 31, 2017, short-term and long-term deferred revenue relating to the Takeda Collaboration Agreement was $11.3 million and $36.8 million, respectively.

Bristol-Myers Squibb Collaboration - First-Line Advanced RCC, Bladder Cancer and HCC Combination Studies

In February 2017, we entered into a clinical trial collaboration agreement with Bristol-Myers Squibb Company (“BMS Collaboration Agreement”) for the purpose of evaluating the combination of cabozantinib with nivolumab or of cabozantinib with nivolumab and ipilimumab in various tumor types, including, in a pivotal phase 3 trial in first-line advanced RCC, and in potential additional trials in bladder cancer and HCC. Pursuant to the terms of the BMS Collaboration Agreement, each party will grant to the other a non-exclusive, worldwide (within the collaboration territory as defined in the BMS Collaboration Agreement), non-transferable, royalty-free license to use the other party’s compounds in the conduct of each clinical trial. The parties’ efforts will be governed through a joint development committee established to guide and oversee the collaboration’s operation. Each trial will be conducted under a combination Investigational New Drug application, unless otherwise required by a regulatory authority. Each party will be responsible for supplying drug product for the applicable clinical trial and costs for each such trial will be shared equally between the parties, unless two Bristol-Myers Squibb Company (“BMS”) compounds will be utilized in such trial, in which case BMS will bear two-thirds of the costs for such study treatment arms and we will bear one-third of the costs. Unless earlier terminated, the BMS Collaboration Agreement will remain in effect until the completion of all clinical trials under the collaboration, all related trial data has been delivered to both parties and the completion of any then agreed upon analysis. Ipsen has opted in to participate in the phase 3 pivotal trial in first-line advanced RCC and will have access to the results to support potential future regulatory submissions. Ipsen may also participate in future studies at their choosing.

The Roche Group Collaboration

In February 2017, we entered into a clinical trial collaboration agreement with The Roche Group (“Roche”) for the purpose of evaluating the safety and tolerability of cabozantinib in combination with Roche’s atezolizumab in patients with locally advanced or metastatic solid tumors. Based on the dose-escalation results, the trial has the potential to enroll up to four expansion cohorts, including a cohort of patients with previously untreated advanced clear cell RCC and three cohorts of urothelial carcinoma, namely platinum eligible first-line patients, first or second-line platinum ineligible patients and patients previously treated with platinum-containing chemotherapy. Enrollment for this trial is scheduled to begin mid-year 2017. We will be the sponsor of the trial, and Roche will provide atezolizumab. Ipsen will participate in the study and have access to the results for potential future development in its territories.

GlaxoSmithKline Collaboration

In October 2002, we established a collaboration with GlaxoSmithKline to discover and develop novel therapeutics in the areas of vascular biology, inflammatory disease and oncology. Under the terms of the product development and commercialization agreement, GlaxoSmithKline had the right to choose cabozantinib for further development and commercialization, but notified us in October 2008 that it had waived its right to select the compound for such activities. As a result, we retained the rights to develop, commercialize, and license cabozantinib, subject to payment to GlaxoSmithKline of a 3% royalty on net sales of any product incorporating cabozantinib. The product development and commercialization agreement was terminated during 2014, although GlaxoSmithKline will continue to be entitled to a 3% royalty on net sales of any product incorporating cabozantinib, including COMETRIQ and CABOMETYX.

In connection with the sales of COMETRIQ and CABOMETYX, during the three months ended March 31, 2017 and 2016, we recorded $2.7 million and $0.3 million, respectively, in royalties payable to GlaxoSmithKline. Royalty expense is included in Cost of goods sold for sales by us and as a reduction of Collaboration revenue for sales by Ipsen in the accompanying Condensed Consolidated Statements of Operations.

Other Collaborations

During the three months ended March 31, 2017, we recognized $2.5 million in contract revenues from a contingent payment received from BMS related to its ROR gamma program, and during the three months ended March 31, 2016, we recognized $5.0 million in contract revenues from a contingent payment received from Merck related to its worldwide license of our phosphoinositide-3 kinase-delta program. See “Note 2 - Collaboration Agreements” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 27, 2017 for a description of our existing collaboration agreements.

Cash and Investments

3 Months Ended

Mar. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Cash and Investments

CASH AND INVESTMENTS

All of our cash equivalents and investments are classified as available-for-sale. The following tables summarize cash and cash equivalents, investments, and restricted cash and investments by balance sheet line item as of March 31, 2017 and December 31, 2016 (in thousands):



	March 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Cash and cash equivalents	$	183,179	$	—	$	—		$	183,179
Short-term investments	241,247		22		(175		)	241,094
Long-term investments	47,416		15		(80		)	47,351
Long-term restricted cash and investments	4,150		—		—			4,150
Total cash and investments	$	475,992	$	37	$	(255	)	$	475,774



	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Cash and cash equivalents	$	151,686	$	—	$	—		$	151,686
Short-term investments	268,234		13		(130		)	268,117
Long-term investments	55,792		1		(192		)	55,601
Long-term restricted cash and investments	4,150		—		—			4,150
Total cash and investments	$	479,862	$	14	$	(322	)	$	479,554

Under our loan and security agreement with Silicon Valley Bank, we were required to maintain compensating balances on deposit in one or more investment accounts with Silicon Valley Bank or one of its affiliates. The total collateral balance of $81.6 million as of December 31, 2016 is reflected in our Condensed Consolidated Balance Sheets in short-term investments; as a result of our repayment of the term-loan with Silicon Valley Bank, the compensating balance requirement was terminated as of March 29, 2017. See “Note 7 - Debt” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 27, 2017 for more information regarding the collateral balance requirements under our Silicon Valley Bank loan and security agreement.

The following tables summarize our cash equivalents and investments by security type as of March 31, 2017 and December 31, 2016. The amounts presented exclude cash, but include investments classified as cash equivalents (in thousands):



	March 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Money market funds	$	44,641	$	—	$	—		$	44,641
Commercial paper	193,968		—		—			193,968
Corporate bonds	175,244		37		(220		)	175,061
U.S. Treasury and government sponsored enterprises	43,321		—		(35		)	43,286
Total investments	$	457,174	$	37	$	(255	)	$	456,956



	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Money market funds	$	71,457	$	—	$	—		$	71,457
Commercial paper	165,375		—		—			165,375
Corporate bonds	152,712		3		(308		)	152,407
U.S. Treasury and government sponsored enterprises	70,730		11		(14		)	70,727
Total investments	$	460,274	$	14	$	(322	)	$	459,966

Gains and losses on the sales of investments available-for-sale were nominal or zero during the three months ended March 31, 2017 and 2016.

All of our investments are subject to a quarterly impairment review. During the three months ended March 31, 2017 and 2016 we did not record any other-than-temporary impairment charges on our available-for-sale securities. As of March 31, 2017, there were 96 investments in an unrealized loss position with gross unrealized losses of $0.3 million and an aggregate fair value of $184.4 million. The investments in an unrealized loss position comprise corporate bonds with an aggregate fair value of $142.2 million and the remainder comprises securities issued by U.S. Treasury and government sponsored enterprises. The unrealized losses were not attributed to credit risk, but rather associated with the changes in interest rates. Based on the scheduled maturities of our investments, we concluded that the unrealized losses in our investment securities are not other-than-temporary, as it is more likely than not that we will hold these investments for a period of time sufficient for a recovery of our cost basis.

The following table summarizes the fair value of securities classified as available-for-sale by contractual maturity as of March 31, 2017 (in thousands):



	Mature within One Year		After One Year through Two Years		Fair Value
Money market funds	$	44,641	$	—	$	44,641
Commercial paper	193,968		—		193,968
Corporate bonds	132,355		42,706		175,061
U.S. Treasury and government sponsored enterprises	40,639		2,647		43,286
Total investments	$	411,603	$	45,353	$	456,956

Cash is excluded from the table above. The classification of certain restricted investments is dependent upon the term of the underlying restriction on the asset and not the maturity date of the investment. Therefore, certain long-term restricted cash and investments have contractual maturities within one year.

Inventory

3 Months Ended

Mar. 31, 2017

Inventory Disclosure [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

INVENTORY

Inventory consists of the following (in thousands):



	March 31, 2017			December 31, 2016
Raw materials	$	692		$	863
Work in process	2,462			2,343
Finished goods	774			738
Total	3,928			3,944
Less: non-current portion included in Other assets	(624		)	(606		)
Inventory	$	3,304		$	3,338

We generally relieve inventory on a first-expiry, first-out basis. A portion of the manufacturing costs for inventory was incurred prior to regulatory approval of CABOMETYX and COMETRIQ and, therefore, was expensed as research and development costs when those costs were incurred, rather than capitalized as inventory. Write-downs related to excess and expiring inventory are charged to either Cost of goods sold or the cost of supplied product included in Collaboration revenues. Such write-downs were $0.5 million for the three months ended March 31, 2017; these amounts were nominal for the comparable period in 2016. The non-current portion of inventory consists of raw materials and a portion of active pharmaceutical ingredient which is included in work in process.

Debt

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Debt

DEBT

The amortized carrying amount of our debt consists of the following (in thousands):



	March 31, 2017		December 31, 2016
Secured Convertible Notes due 2018 (“Deerfield Notes”)	$	113,349	$	109,122
Term loan payable	—		80,000
Total debt	$	113,349	$	189,122

See “Note 7 - Debt” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 27, 2017 for additional information on the terms of our debt, including a description of the material features of the Deerfield Notes.

Deerfield Notes

As of March 31, 2017 and December 31, 2016, the outstanding principal balance on the Deerfield Notes was $113.9 million and $109.8 million, respectively, which, subject to certain limitations, is payable in cash or in stock at our discretion. The outstanding principal amount of the Deerfield Notes bears interest at the rate of 7.5% per annum to be paid in cash, quarterly in arrears, and 7.5% per annum to be paid in kind, quarterly in arrears, for a total interest rate of 15% per annum.

Under the note purchase agreement, we may at our sole discretion, prepay all of the principal amount of the Deerfield Notes at a prepayment price equal to 105% of the outstanding principal amount of the Deerfield Notes, plus all accrued and unpaid interest through the date of such prepayment, plus, if prepaid prior to July 1, 2017, all interest that would have accrued on the principal amount of the Deerfield Notes between the date of such prepayment and July 1, 2017, if the outstanding principal amount of the Deerfield Notes as of such prepayment date had remained outstanding through July 1, 2017, plus all other accrued and unpaid obligations, collectively referred to as the Prepayment Price.

The Deerfield Notes are classified as a current liability as of March 31, 2017 and December 31, 2016 because we intend to repay the Deerfield Notes on or about July 1, 2017 at the Prepayment Price. We expect that cash and cash equivalents and short-term investments held at March 31, 2017 will be used to repay the Deerfield Notes.

The following is a summary of interest expense for the Deerfield Notes (in thousands):



	Three Months Ended March 31,
	2017		2016
Stated coupon interest	$	2,068	$	1,936
Interest paid in kind	2,068		1,936
Amortization of debt discount and debt issuance costs	89		93
Total interest expense	$	4,225	$	3,965

The balance of unamortized fees and costs was $0.4 million as of both March 31, 2017 and December 31, 2016, which is recorded as a reduction of the carrying amount of the Deerfield Notes on the accompanying Condensed Consolidated Balance Sheets. We are amortizing the remaining unamortized debt discount and debt issuance costs through the July 1, 2018 maturity date using the effective interest method at an effective interest rate of 15.2%.

Although we currently intend to repay the Deerfield Notes on or about July 1, 2017, if we do not prepay the Deerfield Notes by December 31, 2017, we may be required to make an additional mandatory prepayment in January 2018 equal to 15% of certain revenues from collaborative arrangements, which we refer to as Development/Commercialization Revenue, received during the fiscal year ending December 31, 2017, subject to a maximum prepayment amount of $27.5 million. However, we will only be obligated to make any such annual mandatory prepayment if the holders of the Deerfield Notes provide notice to us of their election to receive the prepayment. The definition of “Development/Commercialization Revenue” expressly excludes any sale or distribution of drug or pharmaceutical products in the ordinary course of our business, and any proceeds from any sale of our intellectual property, subject to limited exceptions, but would include our share of the net profits from the commercialization of cobimetinib in the U.S. and the receipt of royalties from cobimetinib sales outside the U.S., if any. Pursuant to this requirement, if we do not prepay the Deerfield Notes by December 31, 2017, we may be required to make a mandatory prepayment of $8.2 million in January 2018.

Silicon Valley Bank Loan and Security Agreement

On March 29, 2017, we repaid all amounts outstanding under our term loan with Silicon Valley Bank which was initiated in June 2010 under our loan and security agreement with Silicon Valley Bank. The payment included $80.0 million in principal plus $0.1 million in accrued and unpaid interest. There was no gain or loss on the extinguishment of debt as a result of the repayment of the term loan. As of December 31, 2016, the outstanding principal balance due under the term loan was $80.0 million. Prior to our early repayment of the term loan, the principal amount outstanding under the term loan had accrued interest at 1.0% per annum, which was due and payable monthly.

In accordance with the terms of the loan and security agreement, we were required to maintain an amount equal to at least 100%, but not to exceed 107%, of the outstanding principal balance of the term loan on deposit in one or more investment accounts with Silicon Valley Bank or one of its affiliates as support for our obligations under the loan and security agreement. We were entitled to retain income earned or the amounts maintained in such accounts. The total collateral balance as of December 31, 2016 was $81.6 million and is reflected in our Condensed Consolidated Balance Sheet in Short-term investments as the amounts were not restricted as to withdrawal. As a result of our repayment of the term-loan, the compensating balance requirement was terminated as of March 29, 2017.

Fair Value Measurements

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

The following table sets forth the classification of our financial assets within the fair value hierarchy that were measured and recorded at fair value on a recurring basis as of March 31, 2017 and December 31, 2016. We did not have any financial liabilities measured and recorded at fair value on a recurring basis as of those dates. The amounts presented exclude cash, but include investments classified as cash equivalents (in thousands):



	March 31, 2017
	Level 1		Level 2		Total
Money market funds	$	44,641	$	—	$	44,641
Commercial paper	—		193,968		193,968
Corporate bonds	—		175,061		175,061
U.S. Treasury and government sponsored enterprises	—		43,286		43,286
Total financial assets	$	44,641	$	412,315	$	456,956



	December 31, 2016
	Level 1		Level 2		Total
Money market funds	$	71,457	$	—	$	71,457
Commercial paper	—		165,375		165,375
Corporate bonds	—		152,407		152,407
U.S. Treasury and government sponsored enterprises	—		70,727		70,727
Total financial assets	$	71,457	$	388,509	$	459,966

We did not have any financial assets classified as Level 3 in the fair value hierarchy as of March 31, 2017 or December 31, 2016 and there were no transfers of financial assets classified as Level 3 during the three months ended March 31, 2017 or the year ended December 31, 2016.

The estimated fair value of our financial instruments that are carried at amortized cost is as follows (in thousands):



	March 31, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Deerfield Notes	$	113,349	$	121,895	$	109,122	$	121,220
Term loan payable	$	—	$	—	$	80,000	$	79,784

The carrying amounts of cash, trade and other receivables, accounts payable, accrued clinical trial liabilities, accrued compensation and benefits, and other liabilities approximate their fair values and are excluded from the tables above.

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:


•	When available, we value investments based on quoted prices for those financial instruments, which is a Level 1 input. Our remaining investments are valued using third-party pricing sources, which use observable market prices, interest rates and yield curves observable at commonly quoted intervals of similar assets as observable inputs for pricing, which are Level 2 inputs.

•

We estimate the fair value of our debt instruments using the net present value of the payments. For the Deerfield Notes, we used a discount rate of 9.5%, which we estimate as our current borrowing rate for similar debt as of March 31, 2017, which is a Level 3 input. For the term loan payable, we used an interest rate that is consistent with money-market rates that would have been earned on our non-interest-bearing compensating balances as our discount rate, which is a Level 2 input.

- 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 + Details

Stock-Based Compensation

3 Months Ended

Mar. 31, 2017

Stock-Based Compensation

STOCK-BASED COMPENSATION

We recorded and allocated employee stock-based compensation expense for our equity incentive plans and our 2000 Employee Stock Purchase Plan (“ESPP”) as follows (in thousands):



	Three Months Ended March 31,
	2017		2016
Research and development expense	$	1,478	$	5,564
Selling, general and administrative expense	3,235		5,621
Total stock-based compensation expense	$	4,713	$	11,185

We use the Black-Scholes Merton option pricing model to value our stock options and ESPP purchases. The weighted average grant-date fair value of our stock options and ESPP purchases was as follows:



	Three Months Ended March 31,
	2017		2016
Stock options	$	9.92	$	2.51
ESPP	$	3.71	$	2.31

The fair value of stock options and ESPP purchases was estimated using the following assumptions:



	Stock Options
	Three Months Ended March 31,
	2017		2016
Risk-free interest rate	1.62	%	1.16	%
Dividend yield	—	%	—	%
Expected volatility	64	%	79	%
Expected life	4.0 years		4.3 years



	Employee Stock Purchase Plan
	Three Months Ended March 31,
	2017		2016
Risk-free interest rate	0.62	%	0.51	%
Dividend yield	—	%	—	%
Expected volatility	68	%	81	%
Expected life	6 months		6 months

We considered implied volatility as well as our historical volatility in developing our estimate of expected volatility. The expected life computation is based on historical exercise patterns and post-vesting termination behavior.

A summary of stock option activity for the three months ended March 31, 2017 is presented below (dollars in thousands, except per share amounts):



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding at December 31, 2016	24,999,665		$	4.91
Granted	288,120		$	20.16
Exercised	(2,297,358	)	$	4.29
Forfeited	(141,021	)	$	7.23
Options outstanding at March 31, 2017	22,849,406		$	5.15	4.46 years	$	377,392
Exercisable at March 31, 2017	16,456,810		$	4.02	3.94 years	$	290,400

As of March 31, 2017, a total of 1,548,149 shares were available for grant under our stock option plans

A summary of restricted stock unit (“RSU”) activity for the three months ended March 31, 2017 is presented below (dollars in thousands, except per share amounts):



	Shares		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Awards outstanding at December 31, 2016	2,469,791		$	8.69
Awarded	135,750		$	20.06
Vested and released	(178,898	)	$	4.42
Forfeited	(73,495	)	$	10.36
Awards outstanding at March 31, 2017	2,353,148		$	9.62	1.87 years	$	50,993

- 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 + Details

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2017
Income Tax Disclosure [Abstract]
Income Taxes	INCOME TAXES During the first quarter, we recorded income tax expense of $0.1 million, which is comprised of our computed income tax expense of $1.0 million reduced by $0.9 million of excess benefits associated with equity compensation. The income tax expense for the three months ended March 31, 2017 primarily relates to state taxes in jurisdictions outside of California, for which we have a limited operating history.

Net Income (Loss) Per Share

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

NET INCOME (LOSS) PER SHARE

The following table sets forth a reconciliation of basic and diluted net income (loss) per share (in thousands, except per share amounts):



	Three Months Ended March 31,
	2017			2016
Net income (loss)	$	16,700		$	(59,223	)
Net income allocated to participating securities - 2014 Warrants	(57		)	—
Net income allocable to common stock for basic net income (loss) per share	16,643			(59,223		)
Adjustment to net income allocated to participating securities	3			—
Net income allocable to common stock for diluted net income (loss) per share	$	16,646		$	(59,223	)

Weighted-average shares of common stock outstanding	290,870			228,304
Dilutive securities:
Outstanding stock options, unvested RSUs and ESPP contributions	18,665			—
Weighted-average shares of common stock outstanding and dilutive securities	309,535			228,304

Net income (loss) per share, basic	$	0.06		$	(0.26	)
Net income (loss) per share, diluted	$	0.05		$	(0.26	)

The 2014 Warrants are participating securities and the warrant holders do not have a contractual obligation to share in our losses. See “Note 8 - Common Stock and Warrants” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on February 27, 2017 for a description of the 2014 Warrants.

The following table sets forth potentially dilutive shares of common stock that are not included in the computation of diluted net income (loss) per share because to do so would be anti-dilutive (in thousands):



	March 31
	2017	2016
2019 Notes	—	54,118
Deerfield Notes	33,890	33,890
Outstanding stock options, unvested RSUs and ESPP contributions	1,396	31,364
Warrants	—	1,000
Total potentially dilutive shares	35,286	120,372

The 2019 Notes were converted and redeemed between August and November 2016.

Concentrations of Credit Risk

3 Months Ended

Mar. 31, 2017

Risks and Uncertainties [Abstract]

Concentrations of Credit Risk

CONCENTRATIONS OF CREDIT RISK

Financial instruments that potentially subject us to concentrations of credit risk are primarily trade and other receivables and investments. Investments consist of money market funds, commercial paper, corporate bonds with high credit quality, and U.S. Treasury and government sponsored enterprises. All investments are maintained with financial institutions that management believes are creditworthy.

Trade and other receivables are unsecured and are concentrated in the pharmaceutical and biotechnology industries. Accordingly, we may be exposed to credit risk generally associated with pharmaceutical and biotechnology companies. We have incurred no bad debt expense since inception. As of March 31, 2017, 21%, 18%, 16%, and 12% of our trade receivables are with Diplomat Specialty Pharmacy, Caremark L.L.C., affiliates of McKesson Corporation, and Accredo Health, Incorporated, respectively. All of these customers have historically paid promptly.

The following table sets forth the percentage of total revenues recognized by customer that represent 10% or more of total revenues:



	Three Months Ended March 31,
	2017		2016
Diplomat Specialty Pharmacy	25	%	55	%
Caremark L.L.C.	17	%	—	%
Affiliates of McKesson Corporation	14	%	—	%
Accredo Health, Incorporated	12	%	—	%
Merck	—	%	32	%

We have operations solely in the U.S., while some of our collaboration partners have headquarters outside of the U.S. and some of our clinical trials for cabozantinib are also conducted outside of the U.S. All of our long-lived assets are located in the U.S.

The following table shows the revenues earned by geographic region. Net product revenues are attributed to regions based on the delivery location. Collaboration revenues are attributed to regions based on where the collaboration partner is headquartered (dollars in thousands):



	Three Months Ended March 31,
	2017		2016
U.S.	$	73,675	$	13,594
Europe	4,530		1,833
Japan	2,682		—

We recorded losses of $0.1 million and $0.2 million relating to foreign exchange fluctuations for three months ended March 31, 2017 and 2016, respectively.

Organization and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Consolidation

Basis of Presentation

Fiscal Period

Use of Estimates

Correction of an Immaterial Error



	Three Months Ended March 31, 2016
Statement of Operations:
Interest expense, overstated by $2,124 for the three months ended March 31, 2016	$	(10,290	)
Total other expense, net, overstated by $2,124 for the three months ended March 31, 2016	$	(10,088	)
Net loss, overstated by $2,124 for the three months ended March 31, 2016	$	(59,223	)
Net loss per share, basic and diluted, overstated by $0.01 for the three months ended March 31, 2016	$	(0.26	)
Statements of Comprehensive Loss:
Comprehensive loss, overstated by $2,124 for the three months ended March 31, 2016	$	(59,033	)
Statements of Cash Flows ⁽¹⁾:
Net loss, overstated by $2,124 for the three months ended March 31, 2016	$	(59,223	)
Accretion of debt discount and debt issuance costs, overstated by $2,124 for the three months ended March 31, 2016	$	3,161

____________________


(1)	The error did not impact our net cash provided by or used in operating activities, financing activities or investing activities for any of the periods presented.

Reclassifications

Segment Information

We operate as a single reportable segment.

Stock-Based Compensation

Recent Accounting Pronouncements

Organization and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Error Corrections and Prior Period Adjustments



	Three Months Ended March 31, 2016
Statement of Operations:
Interest expense, overstated by $2,124 for the three months ended March 31, 2016	$	(10,290	)
Total other expense, net, overstated by $2,124 for the three months ended March 31, 2016	$	(10,088	)
Net loss, overstated by $2,124 for the three months ended March 31, 2016	$	(59,223	)
Net loss per share, basic and diluted, overstated by $0.01 for the three months ended March 31, 2016	$	(0.26	)
Statements of Comprehensive Loss:
Comprehensive loss, overstated by $2,124 for the three months ended March 31, 2016	$	(59,033	)
Statements of Cash Flows ⁽¹⁾:
Net loss, overstated by $2,124 for the three months ended March 31, 2016	$	(59,223	)
Accretion of debt discount and debt issuance costs, overstated by $2,124 for the three months ended March 31, 2016	$	3,161

____________________


(1)	The error did not impact our net cash provided by or used in operating activities, financing activities or investing activities for any of the periods presented.

Collaboration Agreements (Tables)

3 Months Ended

Mar. 31, 2017

Collaborative Arrangement with Ipsen [Member]

Revenue Recognition, Multiple-deliverable Arrangements [Line Items]

Schedule of Collaborative Revenues Under Collaboration Agreement

During the three months ended March 31, 2017 and 2016, collaboration revenues under the Ipsen Collaboration Agreement were as follows (in thousands):



	Three Months Ended March 31,
	2017			2016
Amortization of upfront payments and deferred milestone	$	4,305		$	1,198
Royalty revenue	224			—
Development cost reimbursements	337			—
Product supply agreement revenue	991			—
Cost of supplied product	(991		)	—
Royalty payable to GlaxoSmithKline on net sales by Ipsen	(336		)	—
Collaboration revenues under the Ipsen Collaboration Agreement	$	4,530		$	1,198

Collaborative Arrangement with Genentech [Member]

Revenue Recognition, Multiple-deliverable Arrangements [Line Items]

Schedule of Collaborative Revenues Under Collaboration Agreement

During the three months ended March 31, 2017 and 2016, ex-U.S. royalty revenues and U.S. losses under the collaboration agreement with Genentech were as follows (in thousands):



	Three Months Ended March 31,
	2017			2016
Royalty revenues on ex-U.S. sales of COTELLIC included in Collaboration revenues	$	2,298		$	130
U.S. losses included in Selling, general and administrative expenses	$	(626	)	$	(7,293	)

Collaborative Arrangement with Takeda [Member]

Revenue Recognition, Multiple-deliverable Arrangements [Line Items]

Schedule of Collaborative Revenues Under Collaboration Agreement

During the three months ended March 31, 2017, collaboration revenues under the Takeda Collaboration Agreement were as follows (in thousands):



	Three Months Ended March 31, 2017
Amortization of upfront payment	$	1,887
Development cost reimbursements	795
Collaboration revenues under the Takeda Collaboration Agreement	$	2,682

Cash and Investments (Tables)

3 Months Ended

Mar. 31, 2017

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-Sale Securities

The following tables summarize cash and cash equivalents, investments, and restricted cash and investments by balance sheet line item as of March 31, 2017 and December 31, 2016 (in thousands):



	March 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Cash and cash equivalents	$	183,179	$	—	$	—		$	183,179
Short-term investments	241,247		22		(175		)	241,094
Long-term investments	47,416		15		(80		)	47,351
Long-term restricted cash and investments	4,150		—		—			4,150
Total cash and investments	$	475,992	$	37	$	(255	)	$	475,774



	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Cash and cash equivalents	$	151,686	$	—	$	—		$	151,686
Short-term investments	268,234		13		(130		)	268,117
Long-term investments	55,792		1		(192		)	55,601
Long-term restricted cash and investments	4,150		—		—			4,150
Total cash and investments	$	479,862	$	14	$	(322	)	$	479,554

Summary of Cash Equivalents and Investments by Security Type

The amounts presented exclude cash, but include investments classified as cash equivalents (in thousands):



	March 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Money market funds	$	44,641	$	—	$	—		$	44,641
Commercial paper	193,968		—		—			193,968
Corporate bonds	175,244		37		(220		)	175,061
U.S. Treasury and government sponsored enterprises	43,321		—		(35		)	43,286
Total investments	$	457,174	$	37	$	(255	)	$	456,956



	December 31, 2016
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Money market funds	$	71,457	$	—	$	—		$	71,457
Commercial paper	165,375		—		—			165,375
Corporate bonds	152,712		3		(308		)	152,407
U.S. Treasury and government sponsored enterprises	70,730		11		(14		)	70,727
Total investments	$	460,274	$	14	$	(322	)	$	459,966

Summary of Available-for-Sale Securities by Contractual Maturity

The following table summarizes the fair value of securities classified as available-for-sale by contractual maturity as of March 31, 2017 (in thousands):



	Mature within One Year		After One Year through Two Years		Fair Value
Money market funds	$	44,641	$	—	$	44,641
Commercial paper	193,968		—		193,968
Corporate bonds	132,355		42,706		175,061
U.S. Treasury and government sponsored enterprises	40,639		2,647		43,286
Total investments	$	411,603	$	45,353	$	456,956

Inventory (Tables)

3 Months Ended

Mar. 31, 2017

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consists of the following (in thousands):



	March 31, 2017			December 31, 2016
Raw materials	$	692		$	863
Work in process	2,462			2,343
Finished goods	774			738
Total	3,928			3,944
Less: non-current portion included in Other assets	(624		)	(606		)
Inventory	$	3,304		$	3,338

Debt (Tables)

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Schedule of Debt

The amortized carrying amount of our debt consists of the following (in thousands):



	March 31, 2017		December 31, 2016
Secured Convertible Notes due 2018 (“Deerfield Notes”)	$	113,349	$	109,122
Term loan payable	—		80,000
Total debt	$	113,349	$	189,122

Summary of Interest Expense on Notes

The following is a summary of interest expense for the Deerfield Notes (in thousands):



	Three Months Ended March 31,
	2017		2016
Stated coupon interest	$	2,068	$	1,936
Interest paid in kind	2,068		1,936
Amortization of debt discount and debt issuance costs	89		93
Total interest expense	$	4,225	$	3,965

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-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 2: 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 3: 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 4: 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=26873400&loc=d3e23780-122690

Reference 5: 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=64930739&loc=d3e28878-108400

Reference 6: 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 7: 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 8: 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=64930785&loc=d3e28541-108399

Reference 9: 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=64930785&loc=d3e28551-108399

Reference 10: 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

+ Details

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value Disclosures [Abstract]

Schedule of Fair Value of Financial Assets Measured on a Recurring Basis

The amounts presented exclude cash, but include investments classified as cash equivalents (in thousands):



	March 31, 2017
	Level 1		Level 2		Total
Money market funds	$	44,641	$	—	$	44,641
Commercial paper	—		193,968		193,968
Corporate bonds	—		175,061		175,061
U.S. Treasury and government sponsored enterprises	—		43,286		43,286
Total financial assets	$	44,641	$	412,315	$	456,956



	December 31, 2016
	Level 1		Level 2		Total
Money market funds	$	71,457	$	—	$	71,457
Commercial paper	—		165,375		165,375
Corporate bonds	—		152,407		152,407
U.S. Treasury and government sponsored enterprises	—		70,727		70,727
Total financial assets	$	71,457	$	388,509	$	459,966

Schedule of Estimated Fair Value of Outstanding Debt

The estimated fair value of our financial instruments that are carried at amortized cost is as follows (in thousands):



	March 31, 2017				December 31, 2016
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Deerfield Notes	$	113,349	$	121,895	$	109,122	$	121,220
Term loan payable	$	—	$	—	$	80,000	$	79,784

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Allocated Employee Stock-Based Compensation Expenses

We recorded and allocated employee stock-based compensation expense for our equity incentive plans and our 2000 Employee Stock Purchase Plan (“ESPP”) as follows (in thousands):



	Three Months Ended March 31,
	2017		2016
Research and development expense	$	1,478	$	5,564
Selling, general and administrative expense	3,235		5,621
Total stock-based compensation expense	$	4,713	$	11,185

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value

We use the Black-Scholes Merton option pricing model to value our stock options and ESPP purchases. The weighted average grant-date fair value of our stock options and ESPP purchases was as follows:



	Three Months Ended March 31,
	2017		2016
Stock options	$	9.92	$	2.51
ESPP	$	3.71	$	2.31

Schedule of Fair Value of Employee Share-Based Payments Awards Estimated Using the Assumptions and Weighted Average Fair Values

The fair value of stock options and ESPP purchases was estimated using the following assumptions:



	Stock Options
	Three Months Ended March 31,
	2017		2016
Risk-free interest rate	1.62	%	1.16	%
Dividend yield	—	%	—	%
Expected volatility	64	%	79	%
Expected life	4.0 years		4.3 years



	Employee Stock Purchase Plan
	Three Months Ended March 31,
	2017		2016
Risk-free interest rate	0.62	%	0.51	%
Dividend yield	—	%	—	%
Expected volatility	68	%	81	%
Expected life	6 months		6 months

Summary of All Stock Option Activity

A summary of stock option activity for the three months ended March 31, 2017 is presented below (dollars in thousands, except per share amounts):



	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding at December 31, 2016	24,999,665		$	4.91
Granted	288,120		$	20.16
Exercised	(2,297,358	)	$	4.29
Forfeited	(141,021	)	$	7.23
Options outstanding at March 31, 2017	22,849,406		$	5.15	4.46 years	$	377,392
Exercisable at March 31, 2017	16,456,810		$	4.02	3.94 years	$	290,400

Summary of All RSU Activity

A summary of restricted stock unit (“RSU”) activity for the three months ended March 31, 2017 is presented below (dollars in thousands, except per share amounts):



	Shares		Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Awards outstanding at December 31, 2016	2,469,791		$	8.69
Awarded	135,750		$	20.06
Vested and released	(178,898	)	$	4.42
Forfeited	(73,495	)	$	10.36
Awards outstanding at March 31, 2017	2,353,148		$	9.62	1.87 years	$	50,993

Net Income (Loss) Per Share (Tables)

3 Months Ended

Mar. 31, 2017

Earnings Per Share [Abstract]

Schedule of Reconciliation of Basic and Diluted Net Income (Loss) Per Share

The following table sets forth a reconciliation of basic and diluted net income (loss) per share (in thousands, except per share amounts):



	Three Months Ended March 31,
	2017			2016
Net income (loss)	$	16,700		$	(59,223	)
Net income allocated to participating securities - 2014 Warrants	(57		)	—
Net income allocable to common stock for basic net income (loss) per share	16,643			(59,223		)
Adjustment to net income allocated to participating securities	3			—
Net income allocable to common stock for diluted net income (loss) per share	$	16,646		$	(59,223	)

Weighted-average shares of common stock outstanding	290,870			228,304
Dilutive securities:
Outstanding stock options, unvested RSUs and ESPP contributions	18,665			—
Weighted-average shares of common stock outstanding and dilutive securities	309,535			228,304

Net income (loss) per share, basic	$	0.06		$	(0.26	)
Net income (loss) per share, diluted	$	0.05		$	(0.26	)

Schedule of Potential Shares of Common Stock Not Included in Computation of Diluted Net Loss Per Share



	March 31
	2017	2016
2019 Notes	—	54,118
Deerfield Notes	33,890	33,890
Outstanding stock options, unvested RSUs and ESPP contributions	1,396	31,364
Warrants	—	1,000
Total potentially dilutive shares	35,286	120,372

Concentrations of Credit Risk (Tables)

3 Months Ended

Mar. 31, 2017

Risks and Uncertainties [Abstract]

Schedules of Concentration Risk

The following table sets forth the percentage of total revenues recognized by customer that represent 10% or more of total revenues:



	Three Months Ended March 31,
	2017		2016
Diplomat Specialty Pharmacy	25	%	55	%
Caremark L.L.C.	17	%	—	%
Affiliates of McKesson Corporation	14	%	—	%
Accredo Health, Incorporated	12	%	—	%
Merck	—	%	32	%



	Three Months Ended March 31,
	2017		2016
U.S.	$	73,675	$	13,594
Europe	4,530		1,833
Japan	2,682		—

Organization and Summary of Significant Accounting Policies (Organization) (Details)	3 Months Ended
	Mar. 31, 2017 product
Product Information [Line Items]
Number of products that entered in the commercial marketplace	3
Products Derived from Cabozantinib [Member]
Product Information [Line Items]
Number of products that entered in the commercial marketplace	2

Organization and Summary of Significant Accounting Policies (Error Correction, Narrative) (Details) - Senior Subordinated Notes [Member] - Convertible Senior Subordinated Notes due August 15, 2019, 4.25% [Member]	Dec. 31, 2012 USD ($)
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Aggregate principal amount	$ 287,500,000.0
Debt, interest rate (as a percent)	4.25%

Organization and Summary of Significant Accounting Policies (Error Correction) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Operations:
Interest expense	$ (4,420)	$ (10,290)
Total other expense, net	(3,352)	(10,088)
Net loss	16,700	$ (59,223)
Net loss per share, basic and diluted (in dollars per share)		$ (0.26)
Statements of Comprehensive Loss:
Comprehensive loss	16,790	$ (59,033)
Statements of Cash Flows:
Net loss	16,700	(59,223)
Accretion of debt discount and debt issuance costs	$ 89	3,161
Restatement Adjustment [Member] \| Correction of Amortization of Debt Discount Associated with the 2019 Notes [Member]
Statement of Operations:
Interest expense		2,124
Total other expense, net		2,124
Net loss		$ 2,124
Net loss per share, basic and diluted (in dollars per share)		$ 0.01
Statements of Comprehensive Loss:
Comprehensive loss		$ 2,124
Statements of Cash Flows:
Net loss		2,124
Accretion of debt discount and debt issuance costs		$ (2,124)

Organization and Summary of Significant Accounting Policies (Reclassifications) (Details) $ in Millions	Dec. 31, 2016 USD ($)
Restatement Adjustment [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Accrued product sales discounts, reclassified	$ 1.8
Retained Earnings [Member] \| Accounting Standards Update 2016-09, Forfeiture Rate Component [Member]
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Cumulative adjustment	$ 0.3

Organization and Summary of Significant Accounting Policies (Segment Information) (Details)	3 Months Ended
	Mar. 31, 2017 segment
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of reportable segments	1

Organization and Summary of Significant Accounting Policies (Stock-Based Compensation) (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
New Accounting Pronouncement, Early Adoption [Line Items]
Increase in cash provided by operating activities	$ 68,858,000	$ 156,810,000
Increase in cash used in financing activities	$ 71,868,000	1,877,000
Accounting Standards Update 2016-09, Forfeiture Rate Component [Member] \| Accumulated Deficit [Member]
New Accounting Pronouncement, Early Adoption [Line Items]
Cumulative adjustment			$ 300,000
New Accounting Pronouncement, Early Adoption, Effect [Member] \| Accounting Standards Update 2016-09, Excess Tax Benefit Component [Member] [Member]
New Accounting Pronouncement, Early Adoption [Line Items]
Increase in federal and state net operating losses			56,900,000
Increase in deferred tax assets			21,200,000
Increase in valuation allowance			21,200,000
Net impact on provision for income taxes			$ 0
Increase in cash provided by operating activities		1,900,000
Increase in cash used in financing activities		$ 1,900,000

Collaboration Agreements (Ipsen Collaboration) (Details)

3 Months Ended

Mar. 31, 2017

USD ($)

Dec. 31, 2016

USD ($)

milestone

Nov. 29, 2016

USD ($)

Feb. 28, 2016

USD ($)

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

$ 30,662,000

$ 19,665,000

^[1]

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

$ 261,236,000

237,094,000

^[1]

GlaxoSmithKline [Member]

Collaborative Arrangement with Ipsen [Member]

3.00%

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Non-substantive milestone payment

$ 200,000,000

$ 60,000,000

Research and development arrangement performed for others, reimbursement for costs incurred, percent

35.00%

Reimbursements of certain clinical programs paid

$ 1,100,000

19,000,000

Collaborative Arrangement with Ipsen [Member] | Restatement Adjustment [Member]

224,400,000

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Deferred revenue reclassified

$ 9,000,000

Collaborative Arrangement with Ipsen [Member] | Initial [Member]

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Collaborative Arrangement with Ipsen [Member] | Second [Member]

2.00%

Royalty tier

$ 50,000,000

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Collaborative Arrangement with Ipsen [Member] | Initial and Second [Member]

12.00%

Royalty tier

$ 100,000,000

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Royalty tier

$ 150,000,000

Collaborative Arrangement with Ipsen [Member] | Initial and Second [Member] | Minimum [Member]

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Collaborative Arrangement with Ipsen [Member] | Initial and Second [Member] | Maximum [Member]

22.00%

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Collaborative Arrangement with Ipsen [Member] | Canada [Member]

26.00%

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Collaborative Arrangement with Ipsen, First Commercial Sales of Product [Member] | CABOMETYX [Member]

$ 10,000,000

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Number of milestones achieved | milestone

Collaborative Arrangement with Ipsen, First Commercial Sales of Product [Member] | Germany [Member] | CABOMETYX [Member]

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Revenue recognized, milestones

$ 10,000,000

[1]	The condensed consolidated balance sheet as of December 31, 2016 has been derived from the audited financial statements as of that date.

Collaboration Agreements (Collaboration Revenues - Ipsen) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaboration revenues under the collaboration agreement	$ 12,010	$ 6,328
Collaborative Arrangement with Ipsen [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amortization of upfront payments and deferred milestone	4,305	1,198
Royalty revenue	224	0
Development cost reimbursements	337	0
Product supply agreement revenue	991	0
Cost of supplied product	(991)	0
Royalty payable to GlaxoSmithKline on net sales by Ipsen	(336)	0
Collaboration revenues under the collaboration agreement	$ 4,530	$ 1,198

Collaboration Agreements (Genentech Collaboration) (Details) - Genentech [Member] - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2015
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percentage of share of the Company in promotions		25.00%
Profit Sharing Tier One [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percent of profits	50.00%
Profit Sharing Agreement, Profit Threshold	$ 200.0
Profit Sharing Tier Three [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percent of profits	30.00%
Profit Sharing Agreement, Profit Threshold	$ 400.0
Q4 '16 [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Royalty revenue	1.1
Q1 '17 [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Royalty revenue	$ 1.2

Collaboration Agreements (Collaboration Revenues - Genentech) (Details) - Genentech [Member] - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Selling, general and administrative expense [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
U.S. losses included in Selling, general and administrative expenses	$ (626)	$ (7,293)
COTELLIC [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Royalty revenues on ex-U.S. sales of COTELLIC included in Collaboration revenues	$ 2,298	$ 130

Collaboration Agreements (Takeda Collaboration) (Details) - USD ($)

1 Months Ended

3 Months Ended

Feb. 28, 2017

Mar. 31, 2017

Dec. 31, 2016

^[1]

Feb. 28, 2016

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

$ 30,662,000

$ 19,665,000

Collaborative Arrangement with Ipsen [Member]

$ 261,236,000

$ 237,094,000

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Research and development arrangement performed for others, reimbursement for costs incurred, percent

$ 200,000,000

35.00%

$ 19,000,000

Collaborative Arrangement with Takeda [Member]

224,400,000

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Maximum amount eligible for development and regulatory milestones

$ 50,000,000

95,000,000

Maximum pre-specified payments

$ 83,000,000

Collaboration period to achieve specified levels of commercial performance

6 years

Deferred revenue, recognition period

4 years

$ 11,300,000

Collaborative Arrangement with Takeda [Member] | Takeda [Member]

$ 36,800,000

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Termination of collaboration agreement, period for written notice

12 months

Collaborative Arrangement with Takeda [Member] | Global [Member]

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Research and development arrangement performed for others, reimbursement for costs incurred, percent

20.00%

Collaborative Arrangement with Takeda [Member] | Japan [Member]

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Research and development arrangement performed for others, reimbursement for costs incurred, percent

100.00%

Final Tier [Member] | Collaborative Arrangement with Ipsen [Member]

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Cumulative net sales

$ 150,000,000

Final Tier [Member] | Collaborative Arrangement with Ipsen [Member] | Minimum [Member]

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Final Tier [Member] | Collaborative Arrangement with Ipsen [Member] | Maximum [Member]

22.00%

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Final Tier [Member] | Collaborative Arrangement with Takeda [Member] | Minimum [Member]

26.00%

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Final Tier [Member] | Collaborative Arrangement with Takeda [Member] | Maximum [Member]

20.00%

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Initial [Member] | Collaborative Arrangement with Ipsen [Member]

30.00%

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Initial [Member] | Collaborative Arrangement with Takeda [Member]

2.00%

Cumulative net sales

$ 50,000,000

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Cumulative net sales

$ 300,000,000.0

Initial [Member] | Collaborative Arrangement with Takeda [Member] | Minimum [Member]

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Initial [Member] | Collaborative Arrangement with Takeda [Member] | Maximum [Member]

15.00%

Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]

Less: non-current portion included in Other assets

24.00%

[1]	The condensed consolidated balance sheet as of December 31, 2016 has been derived from the audited financial statements as of that date.

Collaboration Agreements (Collaboration Revenues - Takeda) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaboration revenues under the collaboration agreement	$ 12,010	$ 6,328
Collaborative Arrangement with Takeda [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amortization of upfront payment	1,887
Development cost reimbursements	795
Collaboration revenues under the collaboration agreement	$ 2,682

Collaboration Agreements (Bristol-Myers Squibb Collaboration) (Details) - Collaborative Arrangement, 2 BMS Compound Utilized [Member] [Member]	3 Months Ended
	Mar. 31, 2017
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Share in costs, percentage	33.33%
BMS [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Share in costs, percentage	66.67%

Collaboration Agreements (GlaxoSmithKline Collaboration) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
GlaxoSmithKline [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Royalty expense	$ 2.7	$ 0.3

Collaboration Agreements (Other Collaborations) (Details) - USD ($) $ in Millions	1 Months Ended	3 Months Ended
	Feb. 28, 2017	Mar. 31, 2016
BMS [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recognized, milestones	$ 2.5
Merck [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Revenue recognized, milestones		$ 5.0

Cash and Investments (Summary by Balance Sheet Line Item) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Investment [Line Items]
Amortized Cost	$ 475,992	$ 479,862
Gross Unrealized Gains	37	14
Gross Unrealized Losses	(255)	(322)
Fair Value	475,774	479,554
Cash and cash equivalents [Member]
Investment [Line Items]
Amortized Cost	183,179	151,686
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	183,179	151,686
Short-term investments [Member]
Investment [Line Items]
Amortized Cost	241,247	268,234
Gross Unrealized Gains	22	13
Gross Unrealized Losses	(175)	(130)
Fair Value	241,094	268,117
Long-term investments [Member]
Investment [Line Items]
Amortized Cost	47,416	55,792
Gross Unrealized Gains	15	1
Gross Unrealized Losses	(80)	(192)
Fair Value	47,351	55,601
Long-term restricted cash and investments [Member]
Investment [Line Items]
Amortized Cost	4,150	4,150
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	$ 4,150	$ 4,150

Cash and Investments (Narrative) (Details)	3 Months Ended
Cash and Investments (Narrative) (Details)	Mar. 31, 2017 USD ($) account investment affiliate	Mar. 31, 2016 USD ($)	Dec. 31, 2016 USD ($)
Investment [Line Items]
Number of required investment accounts \| account	1
Number of affiliate banks \| affiliate	1
Gain (loss) on sale of available-for-sale securities	$ 0	$ 0
Other-than-temporary impairment charges on available-for-sale securities	$ 0	$ 0
Number of investments in unrealized loss position \| investment	96
Gross unrealized losses	$ (255,000)		$ (322,000)
Unrealized loss position, aggregate fair value	184,400,000
Corporate bonds [Member]
Investment [Line Items]
Gross unrealized losses	(220,000)		(308,000)
Unrealized loss position, aggregate fair value	$ 142,200,000
Silicon Valley Bank Term Loan and Line of Credit [Member]
Investment [Line Items]
Collateral balance			$ 81,600,000

Cash and Investments (Summary by Security Type) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Investment [Line Items]
Amortized Cost	$ 457,174	$ 460,274
Gross Unrealized Gains	37	14
Gross Unrealized Losses	(255)	(322)
Fair Value	456,956	459,966
Money market funds [Member]
Investment [Line Items]
Amortized Cost	44,641	71,457
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	44,641	71,457
Commercial paper [Member]
Investment [Line Items]
Amortized Cost	193,968	165,375
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	193,968	165,375
Corporate bonds [Member]
Investment [Line Items]
Amortized Cost	175,244	152,712
Gross Unrealized Gains	37	3
Gross Unrealized Losses	(220)	(308)
Fair Value	175,061	152,407
U.S. Treasury and government sponsored enterprises [Member]
Investment [Line Items]
Amortized Cost	43,321	70,730
Gross Unrealized Gains	0	11
Gross Unrealized Losses	(35)	(14)
Fair Value	$ 43,286	$ 70,727

Cash and Investments (Available for Sale by Contractual Maturity) (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Schedule of Available-for-sale Securities [Line Items]
Mature within One Year	$ 411,603
After One Year through Two Years	45,353
Fair Value	456,956	$ 459,966
Money market funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Mature within One Year	44,641
After One Year through Two Years	0
Fair Value	44,641	71,457
Commercial paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Mature within One Year	193,968
After One Year through Two Years	0
Fair Value	193,968	165,375
Corporate bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Mature within One Year	132,355
After One Year through Two Years	42,706
Fair Value	175,061	152,407
U.S. Treasury and government sponsored enterprises [Member]
Schedule of Available-for-sale Securities [Line Items]
Mature within One Year	40,639
After One Year through Two Years	2,647
Fair Value	$ 43,286	$ 70,727

Inventory (Details) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2017

Dec. 31, 2016

Inventory Disclosure [Abstract]

Raw materials

$ 692

$ 863

Work in process

2,462

2,343

Finished goods

774

738

Total

3,928

3,944

(624)

(606)