View Filing Data

Print Document View Excel Document

Document And Entity Information - shares	3 Months Ended
Document And Entity Information - shares	Mar. 29, 2019	Apr. 22, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 29, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1
Trading Symbol	exel
Entity Registrant Name	EXELIXIS, INC.
Entity Central Index Key	0000939767
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Current Fiscal Year End Date	--01-03
Entity Common Stock, Shares Outstanding		301,767,356

Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands

Mar. 29, 2019

Dec. 28, 2018

^[1]

Current assets:

Cash and cash equivalents

$ 373,937

$ 314,775

Short-term investments

425,713

378,559

Trade and other receivables

107,670

162,771

Other receivables

7,445

16,056

Inventory, net

10,143

9,838

Unbilled collaboration revenue

7,244

Prepaid expenses and other current assets

14,146

15,017

Total current assets

946,298

897,016

Long-term investments

218,619

157,187

Long-term restricted cash and investments

1,100

Property and equipment, net

50,553

50,897

Operating lease right-of-use assets

13,921

5,867

Deferred tax assets, net

243,717

244,111

Goodwill

63,684

Other long-term assets

3,902

2,424

Total assets

1,541,794

1,422,286

Current liabilities:

Accounts payable

9,748

10,901

Accrued clinical trial liabilities

23,055

18,231

Accrued compensation and benefits

22,550

32,142

Rebates and fees due to customers

19,708

14,954

Accrued collaboration liabilities

7,556

7,419

Current portion of deferred revenue

2,376

Other current liabilities

40,139

21,825

Total current liabilities

125,132

105,472

Long-term portion of lease liabilities

19,958

12,178

Long-term portion of deferred revenue

8,323

15,897

Other long-term liabilities

3,361

1,286

Total liabilities

156,774

134,833

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: 301,519,885 and 299,876,080 at March 31, 2019 and December 31, 2018, respectively

302

300

Additional paid-in capital

2,188,578

2,168,217

Accumulated other comprehensive income (loss)

728

(701)

Accumulated deficit

(804,588)

(880,363)

Total stockholders’ equity

1,385,020

1,287,453

Total liabilities and stockholders’ equity

$ 1,541,794

$ 1,422,286

[1]	The Condensed Consolidated Balance Sheet as of December 31, 2018 has been derived from the audited financial statements as of that date.

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares

Mar. 29, 2019

Dec. 28, 2018

^[1]

Preferred stock

Par value (in dollars per share)

$ 0.001

Shares authorized (in shares)

10,000,000

Shares issued (in shares)

Common stock

Par value (in dollars per share)

$ 0.001

Shares authorized (in shares)

400,000,000

Shares issued (in shares)

301,519,885

299,876,080

Shares outstanding (in shares)

301,519,885

299,876,080

[1]	The Condensed Consolidated Balance Sheet as of December 31, 2018 has been derived from the audited financial statements as of that date.

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Total revenues	$ 215,487	$ 213,719
Operating expenses:
Cost of goods sold	7,501	5,639
Research and development	63,289	37,757
Selling, general and administrative	60,138	54,016
Total operating expenses	130,928	97,412
Income from operations	84,559	116,307
Other income (expense), net:
Interest income	6,087	1,895
Other, net	25	169
Total other income (expense), net:	6,112	2,064
Income before income taxes	90,671	118,371
Provision for income taxes	(14,896)	(2,514)
Net income	$ 75,775	$ 115,857
Net income per share, basic (in dollars per share)	$ 0.25	$ 0.39
Net income per share, diluted (in dollars per share)	$ 0.24	$ 0.37
Shares used in computing net income per share, basic (in shares)	300,542	296,421
Shares used in computing net income per share, diluted (in shares)	314,644	313,691
Net product revenues
Total revenues	$ 179,581	$ 134,272
Collaboration revenue
Total revenues	$ 35,906	$ 79,447

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Statement of Comprehensive Income [Abstract]
Net income	$ 75,775	$ 115,857
Other comprehensive income (loss):
Net unrealized gains or losses on available-for-sale securities, net of tax impact of $394 and $0, respectively	1,429	(540)
Total other comprehensive income (loss)	1,429	(540)
Comprehensive income	$ 77,204	$ 115,317

- Definition

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

+ References + Details

Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Statement of Comprehensive Income [Abstract]
Unrealized gains or losses on available-for-sale securities, tax impact	$ 394	$ 0
Reclassification adjustments to net income resulting from realized gains or losses on sale of securities	$ 0	$ 0

Condensed Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands

Total

Common Stock

Additional Paid-in Capital

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

Balance (in shares) at Dec. 29, 2017

296,209,426

Balance at Dec. 29, 2017

$ 284,961

$ 296

$ 2,114,184

$ (347)

$ (1,829,172)

Net income

115,857

Other comprehensive income (loss)

(540)

Issuance of common stock under equity incentive and stock purchase plans (in shares)

484,904

Issuance of common stock under equity incentive and stock purchase plans

1,678

$ 1

1,677

Stock-based compensation

9,305

Balance (in shares) at Mar. 30, 2018

296,694,330

Balance at Mar. 30, 2018

$ 669,766

$ 297

2,125,166

(887)

(1,454,810)

Balance (in shares) at Dec. 28, 2018

299,876,080

^[1]

299,876,080

Balance at Dec. 28, 2018

$ 1,287,453

^[1]

$ 300

2,168,217

(701)

(880,363)

Net income

75,775

Other comprehensive income (loss)

1,429

Issuance of common stock under equity incentive and stock purchase plans (in shares)

1,643,805

Issuance of common stock under equity incentive and stock purchase plans

7,834

$ 2

7,832

Stock-based compensation

$ 12,529

12,529

Balance (in shares) at Mar. 29, 2019

301,519,885

Balance at Mar. 29, 2019

$ 1,385,020

$ 302

$ 2,188,578

$ 728

$ (804,588)

[1]	The Condensed Consolidated Balance Sheet as of December 31, 2018 has been derived from the audited financial statements as of that date.

- Definition

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

+ References + Details

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

3 Months Ended

Mar. 29, 2019

Mar. 30, 2018

Statement of Cash Flows [Abstract]

Net income

$ 75,775

$ 115,857

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

Depreciation and amortization

1,962

371

Stock-based compensation expense

12,529

9,305

401(k) matching contributions made in common stock

2,469

1,880

Amortization and other right-of-use assets

(7,730)

Gain on other equity investments

(209)

Other

(1,415)

(158)

Changes in assets and liabilities:

Trade receivables, net

55,101

(10,819)

Other receivables

8,741

Inventory, net

(305)

(906)

Unbilled collaboration revenue

(7,753)

(38,014)

Prepaid expenses and other current assets

871

1,900

Other long-term assets

(4,854)

(346)

Accounts payable

(1,294)

(183)

Accrued compensation and benefits

(9,592)

(317)

Accrued clinical trial liabilities

4,824

(4,498)

Rebates and fees due customers

4,754

4,424

Accrued collaboration liabilities

137

(1,000)

Current and long-term deferred revenue

(1,313)

(2,652)

Long-term portion of lease liabilities

7,517

(35)

Other current and long-term liabilities

21,169

(2,856)

Net cash provided by operating activities

161,593

71,808

Cash flows from investing activities:

Purchases of Property and equipment and other, net

(2,307)

(2,947)

Purchases of investments

(239,869)

(116,537)

Proceeds from maturities of investments

129,820

87,504

Proceeds from sale of investments

4,699

6,238

Proceeds from other equity investments

209

Net cash used in investing activities

(107,657)

(25,533)

Cash flows from financing activities:

Proceeds from exercise of stock options

6,817

1,875

(1,580)

(2,129)

Principal payments on financing lease obligation

(11)

Net cash provided by (used in) financing activities

5,226

(254)

Net increase in cash, cash equivalents and restricted cash

59,162

46,021

Cash, cash equivalents and restricted cash at beginning of period

315,875

188,314

Cash, cash equivalents and restricted cash at end of period

375,037

234,335

Supplemental cash flow disclosure

Right-of-use assets obtained in exchange for lease obligations

^[1]

8,170

17,180

Unpaid liabilities incurred to acquire Property and equipment

$ 141

$ 6,608

[1]	Amounts for the three months ended March 31, 2019 include receipt of a tenant inventive payment. Amounts for the three months ended March 31, 2018 include the transition adjustment for the adoption of Accounting Standards Codification (ASC) Topic 842, Leases.

Organization and Summary of Significant Accounting Policies	3 Months Ended
	Mar. 29, 2019
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 an oncology-focused biotechnology company that strives to accelerate the discovery, development and commercialization of new medicines for difficult-to-treat cancers. Since we were founded in 1994, four products resulting from our discovery efforts have progressed through clinical development and received regulatory approval; three have a growing commercial presence in markets worldwide, and we expect that the fourth will soon enter the marketplace in Japan. Two are derived from cabozantinib, an inhibitor of multiple tyrosine kinases including MET, AXL, VEGF receptors and RET. These are: CABOMETYX® (cabozantinib) tablets approved for advanced renal cell carcinoma and previously treated hepatocellular carcinoma and COMETRIQ® (cabozantinib) capsules approved for progressive, metastatic medullary thyroid cancer. The other two products resulting from our discovery efforts are: COTELLIC® (cobimetinib), an inhibitor of MEK, approved as part of a combination regimen to treat a specific form of advanced melanoma and marketed under a collaboration with Genentech, Inc. (a member of the Roche Group) (Genentech); and MINNEBRO™ (esaxerenone), an oral, non-steroidal, selective blocker of the mineralocorticoid receptor, recently approved for the treatment of hypertension in Japan and licensed to Daiichi Sankyo Company, Limited (Daiichi Sankyo). Basis of Consolidation The accompanying 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 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 our financial statements 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 2019 will end on January 3, 2020 and fiscal year 2018 ended on December 28, 2018. For convenience, references in this report as of and for the fiscal periods ended March 29, 2019 and March 30, 2018, and as of and for the fiscal years ending January 3, 2020 and ended December 28, 2018, are indicated as being as of and for the periods ended March 31, 2019 and March 31, 2018, and the years ending December 31, 2019 and ended December 31, 2018, respectively. Similarly, references in this report to the first day of the fiscal year ended January 3, 2020 are indicated as being as of January 1, 2019. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 or for any future period. The accompanying Condensed Consolidated Financial Statements and Notes thereto should be read in conjunction with our Consolidated Financial Statements and Notes thereto for the year ended December 31, 2018, included in our Annual Report on Form 10-K filed with the SEC on February 22, 2019. Segment Information We operate in one business segment that focuses on the discovery, development and commercialization of new medicines for difficult-to-treat cancers. Our Chief Executive Officer, as the chief operating decision-maker, manages and allocates resources to our operations on a total consolidated basis. Consistent with this decision-making process, our Chief Executive Officer uses consolidated, single-segment financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets. All of our long-lived assets are located in the U.S. See “Note 2. Revenues” for enterprise-wide disclosures about product sales, revenues from major customers and revenues by geographic region. Use of Estimates The preparation of the accompanying 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, equity, revenues and expenses, and related disclosures. On an ongoing basis, management evaluates its estimates including, but not limited to: those related to revenue recognition, including determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price of performance obligations, and variable consideration such as rebates, chargebacks, sales returns, sales allowances, and milestone payments included in collaboration arrangements; the amounts of revenues and expenses under our profit and loss sharing agreement; the recoverability of inventory; the amounts of operating lease right-of-use assets and lease liabilities; the amounts of deferred tax assets and liabilities including the related valuation allowance; the accrual for certain liabilities including accrued clinical trial liabilities; and valuations of equity awards used to determine stock-based compensation, including certain awards with vesting subject to market or performance conditions. 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. Reclassifications Certain prior period amounts in the accompanying Condensed Consolidated Financial Statements have been reclassified to conform to current period presentation. Total revenues and Selling, general and administrative expenses for the three months ended March 31, 2018 have been adjusted to reflect the reclassification of the $1.4 million profit related to the profit-sharing arrangement with Genentech for the commercialization of COTELLIC. In our Condensed Consolidated Financial Statements included in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2018, the net profit had been classified as Selling, general and administrative expenses as we expected an overall loss under the agreement for the year ended December 31, 2018. Subsequent to March 31, 2018, we determined that the U.S. commercialization of COTELLIC would result in a profit for the year ended December 31, 2018 and therefore, we had reclassified the profit for the three months ended March 31, 2018 from Selling, general and administrative expenses to Collaboration revenues in our financial statements issued after March 31, 2018. Accordingly, we have also reclassified the profit for the three months ended March 31, 2018 in the accompanying Condensed Consolidated Financial Statements to be consistent with our presentation for the year ended December 31, 2018. For more information on our collaboration agreement with Genentech, see “Note 3. Collaboration Agreements” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2018. Recently Adopted Accounting Pronouncements On January 1, 2019, we adopted ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220) (ASU 2018-02). There was no financial impact from the adoption of ASU 2018-02 and we did not make an election to reclassify the income tax effects of the Tax Cuts and Jobs Act of 2017 from Accumulated other comprehensive income (loss) to Accumulated deficit. In connection with the adoption of ASU 2018-02, we have adopted the individual unit of account approach for releasing income tax effects from Accumulated other comprehensive income (loss). On January 1, 2019, we also adopted ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) (ASU 2017-08). ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium. Specifically, ASU 2017-08 requires the premium to be amortized to the earliest call date. ASU 2017-08 does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The financial impact from the adoption of ASU 2017-08 was nominal. Recent Accounting Pronouncements Not Yet Adopted In November 2018, the Financial Accounting Standards Board (the FASB) issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (ASU 2018-18). ASU 2018-18 clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the counterparty is a customer for a distinct good or service (i.e. a unit of account). For units of account that are in the scope of Topic 606, all of the guidance in Topic 606 should be applied, including the guidance on recognition, measurement, presentation and disclosure. ASU 2018-18 also adds a reference in Topic 808 to the unit of account guidance in ASC 606 and requires that it be applied only to assess whether transactions in a collaborative arrangement are in the scope of Topic 606. ASU 2018-18 will preclude entities from presenting amounts related to transactions with a counterparty in a collaborative arrangement that is not a customer as revenue from contracts with customers. ASU 2018-18 is effective for us for all interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We are in the process of assessing the impact of ASU 2018-18 on our Condensed Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, ASU 2018-15 requires a customer in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU 2018-15 also requires us to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. ASU 2018-15 is effective for us for all interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We are in the process of assessing the impact of ASU 2018-15 on our Condensed Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). ASU 2017-04 eliminated Step 2 from the goodwill impairment test. Instead, under the amendments in ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for all interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We do not expect the adoption of ASU 2017-04 to have a material impact on our Condensed Consolidated Financial Statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) (ASU 2016-13). ASU 2016-13 implements an impairment model, known as the current expected credit loss model, that is based on expected losses rather than incurred losses. Under the new guidance, an entity will recognize as an allowance its estimate of expected credit losses. 2016-13 is effective for all interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We do not expect the adoption of ASU 2016-13 to have a material impact on our Condensed Consolidated Financial Statements.

Revenues

3 Months Ended

Mar. 29, 2019

Revenue from Contract with Customer [Abstract]

REVENUES

Revenues by disaggregated category were as follows (in thousands):



	Three Months Ended March 31,
	2019			2018
Product revenues:
Gross product revenues	$	223,750		$	159,436
Discounts and allowances	(44,169		)	(25,164		)
Net product revenues	179,581			134,272
Collaboration revenues:
License revenues⁽¹⁾	24,509			69,030
Research and development service revenues⁽²⁾	11,928			10,099
Other collaboration revenues⁽³⁾	(531		)	318
Total collaboration revenues	35,906			79,447
Total revenues	$	215,487		$	213,719

____________________


(1)	License revenues included the immediate recognition of the portion of milestones allocated to the transfer of intellectual property licenses for which it had become probable in the current period that the milestone would be achieved and a significant revenue reversal would not occur, as well as royalty revenues from Ipsen Pharma SAS (Ipsen) and Genentech.


(2)	Research and development service revenues included the recognition of deferred revenue for the portion of upfront and milestone payments that have been allocated to research and development service performance obligations, as well as development cost reimbursements earned on our collaboration agreements.


(3)	Other collaboration revenues included the profit on the U.S. commercialization of COTELLIC from Genentech and revenues on product supply services provided to Ipsen and Takeda Pharmaceutical Company Ltd. (Takeda), which were partially offset by the 3% royalty we are required to pay GlaxoSmithKline (GSK) on the net sales by Ipsen of any product incorporating cabozantinib.

Net product revenues, License revenues and Research and development services revenues were recorded in accordance with Topic 606 for all periods presented. Net product revenues and License revenues related to goods and intellectual property licenses transferred at a point in time and Research and development services revenues related to services performed over time. Other collaboration revenues, which included the profit on the U.S. commercialization of COTELLIC and net losses on product supply services, were recorded in accordance with ASC Topic 808, Collaborative Arrangements for all periods presented.

Net product revenues disaggregated by product were as follows (in thousands):



	Three Months Ended March 31,
	2019		2018
CABOMETYX	$	175,890	$	128,934
COMETRIQ	3,691		5,338
Net product revenues	$	179,581	$	134,272

Total revenues disaggregated by significant customer were as follows (dollars in thousands):



	Three Months Ended March 31,
	2019				2018
	Dollars		Percent of total		Dollars		Percent of total
Caremark L.L.C.	$	32,698	15	%	$	26,388	12	%
Affiliates of McKesson Corporation	25,311		12	%	21,331		10	%
Accredo Health, Incorporated	22,495		10	%	18,286		9	%
Affiliates of AmerisourceBergen Corporation	21,902		10	%	15,736		7	%
Ipsen	21,868		10	%	53,809		25	%
Others, individually less than 10% of Total revenues for all periods presented	91,213		43	%	78,169		37	%
Total revenues	$	215,487	100	%	$	213,719	100	%

Total revenues disaggregated by geographic region were as follows (in thousands):



	Three Months Ended March 31,
	2019		2018
U.S.	$	182,126	$	136,993
Europe	21,868		53,809
Rest of the world	11,493		22,917
Total revenues	$	215,487	$	213,719

Net product revenues are attributed to geographic region based on the ship-to location. Collaboration revenues are attributed to geographic region based on the location of our collaboration partners’ headquarters.

Product Sales Discounts and Allowances

The activities and ending reserve balances for each significant category of discounts and allowances (which constitute variable consideration) were as follows (in thousands):



	Chargebacks and Discounts for Prompt Payment			Other Customer Credits/Fees and Co-pay Assistance			Rebates			Returns		Total
Balance at December 31, 2018	$	2,322		$	3,038		$	11,916		$	—	$	17,276
Provision related to sales made in:
Current period	27,153			3,875			12,905			—		43,933
Prior periods	—			9			227			—		236
Payments and customer credits issued	(27,367		)	(4,189		)	(8,073		)	—		(39,629		)
Balance at March 31, 2019	$	2,108		$	2,733		$	16,975		$	—	$	21,816

Chargebacks and discounts for prompt payment are recorded as a reduction of trade receivables and the remaining reserve balances are classified as Other current liabilities in the accompanying Condensed Consolidated Balance Sheets.

Contract Assets and Liabilities

We receive payments from our licensees based on billing schedules established in each contract. Amounts are recorded as accounts receivable when our right to consideration is unconditional. Upfront and milestone payments may require deferral of revenue recognition to a future period until we perform our obligations under these arrangements and are recorded as deferred revenue upon receipt or when due. We may also recognize revenue in advance of the contractual billing schedule and such amounts are recorded as unbilled collaboration revenue when recognized. Changes in our contract assets and liabilities under Topic 606 were as follows (in thousands):



	Contract Assets: Unbilled Collaboration Revenue						Contract Liabilities: Deferred Revenue
	Current Portion			Long-term Portion			Current Portion			Long-term Portion
Balance at December 31, 2018	$	—		$	—		$	—		$	15,897
Increases as a result of a change in transaction price and recognition of revenues as services are performed	10,222			1,450			—			—
Transfer to receivables from contract assets recognized at the beginning of the period	(543		)	—			—			—
Increases as a result of the deferral of milestones achieved in period, excluding amounts recognized as revenue	—			—			—			—
Revenue recognized that was included in the contract liability balance at the beginning of the period	—			—			(1,313		)	—
Other adjustments ⁽¹⁾	(2,435		)	(1,450		)	3,689			(7,574		)
Balance at March 31, 2019	$	7,244		$	—		$	2,376		$	8,323

____________________


(1)	Includes reclassification of deferred revenue from long-term to current and adjustments made due to netting of contract assets and liabilities by collaboration agreement.

During the three months ended March 31, 2019 and 2018, we recognized $25.3 million and $71.3 million, respectively, in revenues under Topic 606 for performance obligations satisfied in previous periods. Such revenues primarily related to milestone and royalty payments allocated to our license performance obligations of our collaborations with Ipsen, Takeda and Bristol-Myers Squibb Company (BMS).

Collaboration Agreements

3 Months Ended

Mar. 29, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

COLLABORATION AGREEMENTS

We have established multiple collaborations with leading pharmaceutical companies for the commercialization and further development of cabozantinib, as well as with smaller, discovery-focused biotechnology companies to expand our product pipeline. Additionally, in line with our business strategy prior to the commercialization of our first product, COMETRIQ, we entered into other collaborations with leading pharmaceutical companies including Genentech, Daiichi Sankyo and BMS for other compounds and programs in our portfolio. See “Note 3. Collaboration Agreements” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 for a description of each of our collaboration agreements.

Under these collaborations, we are generally entitled to receive milestone and royalty payments, and for certain collaborations, payments for product supply services, development cost reimbursements, and/or profit-sharing payments. See “Note 2. Revenues” for information on collaboration revenues recognized during the three months ended March 31, 2019 and 2018.

Cabozantinib Commercial Collaborations

Ipsen Collaboration

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



	Three Months Ended March 31,
	2019		2018
Ipsen collaboration revenues	$	21,868	$	53,809

As of March 31, 2019, $46.8 million of the transaction price allocated to our research and development services performance obligation had not been satisfied. As of March 31, 2019, the net contract liability for the collaboration agreement with Ipsen was $10.7 million, of which 2.4 million was included in the Current portion of deferred revenue and $8.3 million was included in the Long-term portion of deferred revenue in the accompanying Condensed Consolidated Balance Sheets.

Takeda Collaboration

In January 2017, we entered into a collaboration and license agreement with Takeda. See “Note 11. Subsequent Events - Amendment to Collaboration Agreement with Takeda” for information regarding an amendment to our collaboration agreement with Takeda. Pursuant to this collaboration agreement, Takeda has exclusive commercialization rights for current and potential future cabozantinib indications in Japan, and the parties have agreed to collaborate on the clinical development of cabozantinib in Japan. Collaboration revenues under the collaboration agreement with Takeda were as follows (in thousands):



	Three Months Ended March 31,
	2019		2018
Takeda collaboration revenues	$	11,493	$	2,917

As of March 31, 2019, $25.2 million of the transaction price allocated to our research and development services performance obligation had not been satisfied. As of March 31, 2019, the net contract asset for the collaboration agreement with Takeda was $7.2 million, which was included in Unbilled collaboration revenue in the accompanying Condensed Consolidated Balance Sheets.

GlaxoSmithKline (GSK)

In October 2002, we established a product development and commercialization collaboration agreement with GSK. Under the terms of the collaboration agreement, GSK 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. Although the collaboration agreement was terminated in December 2014, GSK continues to be entitled to a 3% royalty we are required to pay on all net sales of any product incorporating cabozantinib by us and our collaboration partners. Royalties accruing to GSK in connection with the sales of cabozantinib are included in Cost of goods sold for sales by us and as a reduction of Collaboration revenues for sales by Ipsen. Such royalties accruing to GSK were as follows (in thousands):



	Three Months Ended March 31,
	2019		2018
Royalties accruing to GSK	$	7,282	$	5,125

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 the collaboration agreement, we developed cobimetinib through the determination of the maximum tolerated dose in a phase 1 clinical trial, and Genentech had the option to co-develop cobimetinib, an option that Genentech exercised, and in March 2009, we granted to Genentech an exclusive worldwide revenue-bearing license to cobimetinib, at which point Genentech became responsible for completing the phase 1 clinical trial and the subsequent clinical development.

In November 2015, the U.S. Food and Drug Administration approved cobimetinib, under the brand name COTELLIC, in combination with Genentech’s Zelboraf (vemurafenib) as a treatment for patients with BRAF V600E or V600K mutation-positive advanced melanoma. COTELLIC in combination with Zelboraf has also been approved in the European Union and multiple additional countries for use in the same indication. Profits on U.S. commercialization and Royalty revenues on ex-U.S. sales were as follows (in thousands):



	Three Months Ended March 31,
	2019		2018
Profits on U.S. commercialization	$	1,055	$	1,373
Royalty revenues on ex-U.S. sales	$	1,490	$	1,349

Cash and Investments

3 Months Ended

Mar. 29, 2019

Investments, Debt and Equity Securities [Abstract]

CASH AND INVESTMENTS

Cash, Cash Equivalents and Restricted Cash

A reconciliation of Cash, cash equivalents, and restricted cash reported within our Condensed Consolidated Balance Sheets to the amount reported within the accompanying Condensed Consolidated Statements of Cash Flows was as follows (in thousands):



	March 31, 2019		December 31, 2018		March 31, 2018		December 31, 2017
Cash and cash equivalents	$	373,937	$	314,775	$	232,331	$	183,164
Restricted cash included in short-term restricted cash and investments	—		—		504		504
Restricted cash included in long-term restricted cash and investments	1,100		1,100		1,500		4,646
Cash, cash equivalents, and restricted cash as reported within the accompanying Condensed Consolidated Statements of Cash Flows	$	375,037	$	315,875	$	234,335	$	188,314

Restricted cash includes certificates of deposit used to collateralize letters of credit and, in prior periods, a purchasing card program.

Cash and Investments

Cash and investments by security type were as follows (in thousands):



	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Investments available-for-sale:
Money market funds	$	75,171	$	—	$	—		$	75,171
Commercial paper	414,317		—		—			414,317
Corporate bonds	417,303		1,257		(175		)	418,385
U.S. Treasury and government sponsored enterprises	84,448		41		(2		)	84,487
Total investments available-for-sale	991,239		1,298		(177		)	992,360
Cash and restricted cash	1,019		—		—			1,019
Certificates of deposit	25,990		—		—			25,990
Total cash and investments	$	1,018,248	$	1,298	$	(177	)	$	1,019,369



	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Investments available-for-sale:
Money market funds	$	47,744	$	—	$	—		$	47,744
Commercial paper	381,134		—		(1		)	381,133
Corporate bonds	344,741		180		(857		)	344,064
U.S. Treasury and government sponsored enterprises	55,224		2		(25		)	55,201
Total investments available-for-sale	828,843		182		(883		)	828,142
Cash and restricted cash	6,883		—		—			6,883
Certificates of deposit	16,596		—		—			16,596
Total cash and investments	$	852,322	$	182	$	(883	)	$	851,621

Gains and losses on the sales of investments available-for-sale were nominal during the three months ended March 31, 2019 and 2018.

The fair value and gross unrealized losses on investments available-for-sale in an unrealized loss position were as follows (in thousands):



	March 31, 2019
	In an Unrealized Loss Position Less than 12 Months					In an Unrealized Loss Position 12 Months or Greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Corporate bonds	$	49,233	$	(39	)	$	45,010	$	(136	)	$	94,243	$	(175	)
U.S. Treasury and government sponsored enterprises	—		—			7,990		(2		)	7,990		(2		)
Total	$	49,233	$	(39	)	$	53,000	$	(138	)	$	102,233	$	(177	)



	December 31, 2018
	In an Unrealized Loss Position Less than 12 Months					In an Unrealized Loss Position 12 Months or Greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Corporate bonds	$	236,162	$	(606	)	$	39,627	$	(251	)	$	275,789	$	(857	)
U.S. Treasury and government sponsored enterprises	28,105		(16		)	9,182		(9		)	37,287		(25		)
Commercial paper	7,091		(1		)	—		—			7,091		(1		)
Total	$	271,358	$	(623	)	$	48,809	$	(260	)	$	320,167	$	(883	)

There were 69 and 199 investments in an unrealized loss position as of March 31, 2019 and December 31, 2018, respectively. During the three months ended March 31, 2019 and 2018 we did not record any other-than-temporary impairment charges on our available-for-sale securities. Based upon our quarterly impairment review, we determined that the unrealized losses were not attributed to credit risk, but were primarily associated with changes in interest rates. Based on the scheduled maturities of our investments and our determination that it was more likely than not that we will hold these investments for a period of time sufficient for a recovery of our cost basis, we concluded that the unrealized losses in our investment securities were not other-than-temporary.

The fair value of investments available-for-sale by contractual maturity were as follows (in thousands):



	March 31, 2019		December 31, 2018
Maturing in one year or less	$	784,432	$	674,455
Maturing after one year through five years	207,928		153,687
Total investments available-for-sale	$	992,360	$	828,142

Related Party Transactions

BlackRock, Inc. (BlackRock), a global provider of investment, advisory and risk management solutions, reported that as of December 31, 2018, the most recent date for which they reported ownership data, their beneficial ownership was more than 10% of our outstanding common stock. BlackRock manages a portion of our cash and investments portfolio. As of March 31, 2019 and December 31, 2018, respectively, the fair value of cash and investments managed by BlackRock was $356.0 million and $298.5 million, which included $0.8 million and $3.0 million invested in the BlackRock Liquidity Money Market Fund. We incurred $0.1 million in fees for BlackRock advisory services performed during the three months ended March 31, 2019.

Inventory

3 Months Ended

Mar. 29, 2019

Inventory Disclosure [Abstract]

INVENTORY

Inventory consisted of the following (in thousands):



	March 31, 2019		December 31, 2018
Raw materials	$	2,245	$	1,922
Work in process	6,514		6,170
Finished goods	4,862		3,836
Total	$	13,621	$	11,928

Balance Sheet classification:
Current portion included in Inventory	$	10,143	$	9,838
Long-term portion included in Other long-term assets	3,478		2,090
Total	$	13,621	$	11,928

Write-downs related to excess and expiring inventory are charged to Cost of goods sold or the cost of supplied product included in Collaboration revenues. Such write-downs were $0.2 million for the three months ended March 31, 2019. There were no such write-downs for the three months ended and March 31, 2018.

Inventory not expected to be used in production or sold in the next 12 months is classified as Other long-term assets in the accompanying Condensed Consolidated Balance Sheets. As of both March 31, 2019 and December 31, 2018, the long-term portion of inventory consisted of portions of our raw materials and finished goods, and as March 31, 2019, also a portion of our work in process.

Property and Equipment

3 Months Ended

Mar. 29, 2019

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

Property and equipment consisted of the following (in thousands):



	March 31, 2019			December 31, 2018
Leasehold improvements	$	33,811		$	33,941
Computer equipment and software	15,110			15,022
Furniture and fixtures	12,908			12,709
Laboratory equipment	6,764			5,668
Construction in progress	1,231			866
	69,824			68,206
Less: accumulated depreciation and amortization	(19,271		)	(17,309		)
Property and equipment, net	$	50,553		$	50,897

Depreciation expense was $2.0 million and $0.4 million for the three months ended March 31, 2019 and 2018, respectively.

Stock-Based Compensation

3 Months Ended

Mar. 29, 2019

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

STOCK-BASED COMPENSATION

We allocated the 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,
	2019		2018
Research and development	$	4,306	$	3,033
Selling, general and administrative	8,223		6,272
Total stock-based compensation	$	12,529	$	9,305

We have several equity incentive plans under which we have granted stock options and restricted stock units (RSUs) to employees and directors. At March 31, 2019, 14,586,459 shares were available for grant under our equity incentive plans.

We used a Monte Carlo simulation pricing model to value stock options that include market vesting conditions and a Black-Scholes Merton option pricing model to value other stock options and ESPP purchases. The weighted average grant-date fair value per share of stock options and ESPP purchases were as follows:



	Three Months Ended March 31,
	2019		2018
Stock options	$	9.21	$	11.52
ESPP	$	4.67	$	7.39

The grant-date fair value of stock option grants and ESPP purchases was estimated using the following assumptions:



	Three Months Ended March 31,
	2019		2018
Stock options:
Risk-free interest rate	2.22	%	2.40	%
Dividend yield	—	%	—	%
Volatility	49	%	54	%
Expected life	4.0 years		4.0 years
ESPP:
Risk-free interest rate	2.48	%	1.53	%
Dividend yield	—	%	—	%
Volatility	57	%	53	%
Expected life	6 months		6 months

We considered our implied volatility and our historical volatility in developing our estimates of expected volatility. The assumptions for the expected life of stock options were based on historical exercise patterns and post-vesting termination behavior. The risk-free interest rate is based on U.S. Treasury rates with the same or similar term as the underlying award. Our dividend rate is based on historical experience and our investors’ current expectations.

The fair value of RSUs was based on the closing price of the underlying common stock on the date of grant.

Activity for stock options during the three months ended March 31, 2019 was as follows (dollars in thousands, except per share amounts):



	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding at December 31, 2018	22,674,062		$	8.71
Granted	246,820		$	22.94
Exercised	(1,413,766	)	$	4.91
Forfeited	(44,200	)	$	14.32
Expired	(22,925	)	$	22.12
Options outstanding at March 31, 2019	21,439,991		$	9.10	3.6 years	$	317,143
Exercisable at March 31, 2019	15,714,721		$	6.01	2.9 years	$	280,307

As of March 31, 2019, there was $44.1 million of unrecognized compensation expense related to our unvested stock options. The compensation expense for the unvested stock options will be recognized over a weighted-average period of 2.5 years.

Activity for RSUs during the three months ended March 31, 2019 was as follows (dollars in thousands, except per share amounts):



	Shares		Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
RSUs outstanding at December 31, 2018	4,857,334		$	18.42
Awarded	123,410		$	22.94
Vested and released	(194,296	)	$	7.83
Forfeited	(100,630	)	$	18.13
RSUs outstanding at March 31, 2019	4,685,818		$	18.98	2.0 years	$	111,522

During 2018, in connection with our long-term incentive compensation program, we awarded 693,131 RSUs that will vest upon the achievement of certain product revenue, late-stage clinical development and pipeline expansion performance targets (PSUs). The PSUs were designed to drive the performance of our management team toward the achievement of key corporate objectives and will be forfeited if the performance targets are not met by December 31, 2021. Expense recognition for PSUs commences when it is determined that attainment of the performance goal is probable. As of March 31, 2019, we have not recognized any compensation expense related to these PSUs and the total unrecognized compensation expense was $12.7 million.

As of March 31, 2019, there was $77.0 million of unrecognized compensation expense related to our unvested RSUs, including the PSUs described above. The compensation expense for the unvested RSUs will be recognized over a weighted-average period of 2.9 years.

Income Taxes	3 Months Ended
Income Taxes	Mar. 29, 2019
Income Tax Disclosure [Abstract]
INCOME TAXES	INCOME TAXES Our effective income tax rate was 16.4% during the three months ended March 31, 2019 as compared to 2.1% for the three months ended March 31, 2018. The Provision for income taxes relating to our pre-tax income for the three months ended March 31, 2018 was largely offset by a valuation allowance against our net operating loss carryforwards and other deferred tax assets. At December 31, 2018, we released substantially all of our valuation allowance against our deferred tax assets, after we determined that it was more likely than not that these deferred tax assets would be realized. The effective tax rate for the three months ended March 31, 2019 differed from the U.S. federal statutory rate of 21% primarily was due to excess tax benefits related to the exercise of certain stock options during the quarter.

Net Income Per Share

3 Months Ended

Mar. 29, 2019

Earnings Per Share [Abstract]

NET INCOME PER SHARE

The computation of basic and diluted net income per share was as follows (in thousands, except per share amounts):



	Three Months Ended March 31,
	2019		2018
Numerator:
Net income	$	75,775	$	115,857
Denominator:
Weighted-average shares of common stock outstanding used in computing basic net income per share	300,542		296,421
Dilutive securities	14,102		17,270
Weighted-average shares of common stock outstanding and dilutive securities used in computing diluted net income per share	314,644		313,691

Net income per share, basic	$	0.25	$	0.39
Net income per share, diluted	$	0.24	$	0.37

Dilutive securities include outstanding stock options, unvested RSUs and ESPP contributions. Potential shares of common stock not included in the computation of diluted net income per share because to do so would be anti-dilutive was as follows (in thousands):



	Three Months Ended March 31,
	2019	2018
Potentially dilutive securities	5,089	1,907

Fair Value Measurements

3 Months Ended

Mar. 29, 2019

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

The classification within the fair value hierarchy of our financial assets that were measured and recorded at fair value on a recurring basis was as follows (in thousands):



	March 31, 2019
	Level 1		Level 2		Total
Money market funds	$	75,171	$	—	$	75,171
Commercial paper	—		414,317		414,317
Corporate bonds	—		418,385		418,385
U.S. Treasury and government sponsored enterprises	—		84,487		84,487
Total investments available-for-sale	75,171		917,189		992,360
Certificates of deposit	—		25,990		25,990
Total financial assets carried at fair value	$	75,171	$	943,179	$	1,018,350



	December 31, 2018
	Level 1		Level 2		Total
Money market funds	$	47,744	$	—	$	47,744
Commercial paper	—		381,133		381,133
Corporate bonds	—		344,064		344,064
U.S. Treasury and government sponsored enterprises	—		55,201		55,201
Total investments available-for-sale	47,744		780,398		828,142
Certificates of deposit	—		16,596		16,596
Total financial assets carried at fair value	$	47,744	$	796,994	$	844,738

We did not have any financial liabilities measured and recorded at fair value on a recurring basis as of March 31, 2019 or December 31, 2018. We did not have any financial assets or liabilities classified as Level 3 in the fair value hierarchy as of March 31, 2019 or December 31, 2018. There were no transfers of financial assets or liabilities between Levels 1, 2 and 3 during the three months ended March 31, 2019 or 2018.

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 for similar assets as observable inputs for pricing, which is a Level 2 input.

See “Note 11. Commitments” to our Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 for a description of the determination of the amount of our operating lease liabilities. Our remaining financial assets and liabilities include cash and restricted cash, Trade receivables, net, Other receivables, Accounts payable, Accrued compensation and benefits, Accrued clinical trial liabilities, Accrued collaboration liabilities, Rebates and fees due to customers and other current and long-term liabilities. Those financial assets and liabilities are carried at cost which approximates their fair values.

- 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

Subsequent Event	3 Months Ended
Subsequent Event	Mar. 29, 2019
Subsequent Events [Abstract]
SUBSEQUENT EVENT	SUBSEQUENT EVENTS Lease Amendment On April 1, 2019, we entered into an amendment to the existing Lease Agreement (the Lease) relating to our corporate headquarters located at 1851, 1801, and 1751 Harbor Bay Parkway, Alameda, California (the Premises). The Lease Amendment provides, among other things, for the (i) expansion of the Premises by 37,544 square feet of office facilities located at 1601 Harbor Bay Parkway, Alameda, California (the 1601 Expansion Space) and (ii) surrender of 2,703 square feet of office facilities located at 1751 Harbor Bay Parkway, Alameda, California (the 1751 Space). We surrendered the 1751 Space on April 15, 2019 and the term for the 1601 Expansion Space will begin ninety days after the landlord’s delivery of the entire 1601 Expansion Space (the 1601 Expansion Space Commencement Date). The term for the 1601 Expansion Space is expected to commence on December 1, 2019, and will run coterminous with the term of the Lease for the existing space, which ends on January 31, 2028. We have been provided an allowance of $1.7 million for tenant improvements to the 1601 Expansion Space. Following April 15, 2019, the monthly base rent for the Premises, other than the 1601 Expansion Space, is $224,505 through January 31, 2020, increasing throughout the remainder of the term to $283,933 at the end of the term. Following the 1601 Expansion Space Commencement Date, the monthly base rent for the 1601 Expansion Space will be $71,334 through November 30, 2020, increasing throughout the remainder of the term to $90,481 at the end of the term. The aggregate contractual base rent for the entire 169,606 square feet of the Premises from April 15, 2019, through the remainder of the Lease term will be approximately $34.6 million. In addition, we are required to pay the landlord for certain operating expenses and taxes they incur related to the Premises. Amendment to Collaboration Agreement with Takeda On April 29, 2019, we executed an amendment to our January 2017 collaboration agreement with Takeda (the Amendment), which will become effective on May 7, 2019. The Amendment, among other things, reduces the amount of reimbursements we will receive from Takeda for costs associated with our required global pharmacovigilance activities and limits those reimbursements to $1.0 million per year. It also increases the total potential development, regulatory and first-sale milestone payments to be paid to us by Takeda for second-line renal cell carcinoma (RCC), first-line RCC and second-line hepatocellular carcinoma by an aggregate of $12.0 million to $102.0 million, including an increase from $10.0 million to $16.0 million for the milestone we expect to receive for the April 2019 submission of a regulatory application for cabozantinib as a treatment for patients with advanced RCC to the Japanese Ministry of Health, Labour and Welfare. We continue to be eligible to receive additional development, regulatory and first-sale milestone payments for other potential future indications. The Amendment also increases the amount of Takeda’s potential sales-based milestones by an aggregate of $3.0 million to $86.0 million. We continue to be eligible to receive royalties on net sales of cabozantinib in Japan.

Organization and Summary of Significant Accounting Policies (Policies)	3 Months Ended
	Mar. 29, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Consolidation	Basis of Consolidation The accompanying 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	Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the 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 our financial statements for the periods presented have been included.
Fiscal Period	We have adopted a 52- or 53-week fiscal year policy that generally ends on the Friday closest to December 31^st. Fiscal year 2019 will end on January 3, 2020 and fiscal year 2018 ended on December 28, 2018. For convenience, references in this report as of and for the fiscal periods ended March 29, 2019 and March 30, 2018, and as of and for the fiscal years ending January 3, 2020 and ended December 28, 2018, are indicated as being as of and for the periods ended March 31, 2019 and March 31, 2018, and the years ending December 31, 2019 and ended December 31, 2018, respectively.
Segment Information	Segment Information We operate in one business segment that focuses on the discovery, development and commercialization of new medicines for difficult-to-treat cancers. Our Chief Executive Officer, as the chief operating decision-maker, manages and allocates resources to our operations on a total consolidated basis. Consistent with this decision-making process, our Chief Executive Officer uses consolidated, single-segment financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets. All of our long-lived assets are located in the U.S.
Use of Estimates	Use of Estimates The preparation of the accompanying 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, equity, revenues and expenses, and related disclosures. On an ongoing basis, management evaluates its estimates including, but not limited to: those related to revenue recognition, including determining the nature and timing of satisfaction of performance obligations, and determining the standalone selling price of performance obligations, and variable consideration such as rebates, chargebacks, sales returns, sales allowances, and milestone payments included in collaboration arrangements; the amounts of revenues and expenses under our profit and loss sharing agreement; the recoverability of inventory; the amounts of operating lease right-of-use assets and lease liabilities; the amounts of deferred tax assets and liabilities including the related valuation allowance; the accrual for certain liabilities including accrued clinical trial liabilities; and valuations of equity awards used to determine stock-based compensation, including certain awards with vesting subject to market or performance conditions. 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.
Reclassifications	Reclassifications Certain prior period amounts in the accompanying Condensed Consolidated Financial Statements have been reclassified to conform to current period presentation.
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted	Recently Adopted Accounting Pronouncements On January 1, 2019, we adopted ASU 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220) (ASU 2018-02). There was no financial impact from the adoption of ASU 2018-02 and we did not make an election to reclassify the income tax effects of the Tax Cuts and Jobs Act of 2017 from Accumulated other comprehensive income (loss) to Accumulated deficit. In connection with the adoption of ASU 2018-02, we have adopted the individual unit of account approach for releasing income tax effects from Accumulated other comprehensive income (loss). On January 1, 2019, we also adopted ASU 2017-08, Receivables—Nonrefundable Fees and Other Costs (Subtopic 310-20) (ASU 2017-08). ASU 2017-08 shortens the amortization period for certain callable debt securities held at a premium. Specifically, ASU 2017-08 requires the premium to be amortized to the earliest call date. ASU 2017-08 does not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. The financial impact from the adoption of ASU 2017-08 was nominal. Recent Accounting Pronouncements Not Yet Adopted In November 2018, the Financial Accounting Standards Board (the FASB) issued ASU No. 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 (ASU 2018-18). ASU 2018-18 clarifies that certain transactions between collaborative arrangement participants should be accounted for as revenue under Topic 606 when the counterparty is a customer for a distinct good or service (i.e. a unit of account). For units of account that are in the scope of Topic 606, all of the guidance in Topic 606 should be applied, including the guidance on recognition, measurement, presentation and disclosure. ASU 2018-18 also adds a reference in Topic 808 to the unit of account guidance in ASC 606 and requires that it be applied only to assess whether transactions in a collaborative arrangement are in the scope of Topic 606. ASU 2018-18 will preclude entities from presenting amounts related to transactions with a counterparty in a collaborative arrangement that is not a customer as revenue from contracts with customers. ASU 2018-18 is effective for us for all interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We are in the process of assessing the impact of ASU 2018-18 on our Condensed Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (ASU 2018-15). ASU 2018-15 aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, ASU 2018-15 requires a customer in a hosting arrangement that is a service contract to follow the guidance in Subtopic 350-40 to determine which implementation costs to capitalize as an asset related to the service contract and which costs to expense. ASU 2018-15 also requires us to expense the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement, which includes reasonably certain renewals. ASU 2018-15 is effective for us for all interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We are in the process of assessing the impact of ASU 2018-15 on our Condensed Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). ASU 2017-04 eliminated Step 2 from the goodwill impairment test. Instead, under the amendments in ASU 2017-04, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Additionally, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if applicable. ASU 2017-04 is effective for all interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We do not expect the adoption of ASU 2017-04 to have a material impact on our Condensed Consolidated Financial Statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326) (ASU 2016-13). ASU 2016-13 implements an impairment model, known as the current expected credit loss model, that is based on expected losses rather than incurred losses. Under the new guidance, an entity will recognize as an allowance its estimate of expected credit losses. 2016-13 is effective for all interim and annual reporting periods beginning after December 15, 2019. Early adoption is permitted. We do not expect the adoption of ASU 2016-13 to have a material impact on our Condensed Consolidated Financial Statements.
Revenue	Chargebacks and discounts for prompt payment are recorded as a reduction of trade receivables and the remaining reserve balances are classified as Other current liabilities in the accompanying Condensed Consolidated Balance Sheets. Contract Assets and Liabilities We receive payments from our licensees based on billing schedules established in each contract. Amounts are recorded as accounts receivable when our right to consideration is unconditional. Upfront and milestone payments may require deferral of revenue recognition to a future period until we perform our obligations under these arrangements and are recorded as deferred revenue upon receipt or when due. We may also recognize revenue in advance of the contractual billing schedule and such amounts are recorded as unbilled collaboration revenue when recognized. Net product revenues, License revenues and Research and development services revenues were recorded in accordance with Topic 606 for all periods presented. Net product revenues and License revenues related to goods and intellectual property licenses transferred at a point in time and Research and development services revenues related to services performed over time. Other collaboration revenues, which included the profit on the U.S. commercialization of COTELLIC and net losses on product supply services, were recorded in accordance with ASC Topic 808, Collaborative Arrangements for all periods presented. Net product revenues are attributed to geographic region based on the ship-to location. Collaboration revenues are attributed to geographic region based on the location of our collaboration partners’ headquarters.

Revenues (Tables)

3 Months Ended

Mar. 29, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

Revenues by disaggregated category were as follows (in thousands):



	Three Months Ended March 31,
	2019			2018
Product revenues:
Gross product revenues	$	223,750		$	159,436
Discounts and allowances	(44,169		)	(25,164		)
Net product revenues	179,581			134,272
Collaboration revenues:
License revenues⁽¹⁾	24,509			69,030
Research and development service revenues⁽²⁾	11,928			10,099
Other collaboration revenues⁽³⁾	(531		)	318
Total collaboration revenues	35,906			79,447
Total revenues	$	215,487		$	213,719

____________________


(1)	License revenues included the immediate recognition of the portion of milestones allocated to the transfer of intellectual property licenses for which it had become probable in the current period that the milestone would be achieved and a significant revenue reversal would not occur, as well as royalty revenues from Ipsen Pharma SAS (Ipsen) and Genentech.


(2)	Research and development service revenues included the recognition of deferred revenue for the portion of upfront and milestone payments that have been allocated to research and development service performance obligations, as well as development cost reimbursements earned on our collaboration agreements.


(3)	Other collaboration revenues included the profit on the U.S. commercialization of COTELLIC from Genentech and revenues on product supply services provided to Ipsen and Takeda Pharmaceutical Company Ltd. (Takeda), which were partially offset by the 3% royalty we are required to pay GlaxoSmithKline (GSK) on the net sales by Ipsen of any product incorporating cabozantinib.

Net product revenues disaggregated by product were as follows (in thousands):



	Three Months Ended March 31,
	2019		2018
CABOMETYX	$	175,890	$	128,934
COMETRIQ	3,691		5,338
Net product revenues	$	179,581	$	134,272

Total revenues disaggregated by significant customer were as follows (dollars in thousands):



	Three Months Ended March 31,
	2019				2018
	Dollars		Percent of total		Dollars		Percent of total
Caremark L.L.C.	$	32,698	15	%	$	26,388	12	%
Affiliates of McKesson Corporation	25,311		12	%	21,331		10	%
Accredo Health, Incorporated	22,495		10	%	18,286		9	%
Affiliates of AmerisourceBergen Corporation	21,902		10	%	15,736		7	%
Ipsen	21,868		10	%	53,809		25	%
Others, individually less than 10% of Total revenues for all periods presented	91,213		43	%	78,169		37	%
Total revenues	$	215,487	100	%	$	213,719	100	%

Total revenues disaggregated by geographic region were as follows (in thousands):



	Three Months Ended March 31,
	2019		2018
U.S.	$	182,126	$	136,993
Europe	21,868		53,809
Rest of the world	11,493		22,917
Total revenues	$	215,487	$	213,719

Activities and Ending Reserve Balances for Significant Categories of Discounts and Allowances

The activities and ending reserve balances for each significant category of discounts and allowances (which constitute variable consideration) were as follows (in thousands):



	Chargebacks and Discounts for Prompt Payment			Other Customer Credits/Fees and Co-pay Assistance			Rebates			Returns		Total
Balance at December 31, 2018	$	2,322		$	3,038		$	11,916		$	—	$	17,276
Provision related to sales made in:
Current period	27,153			3,875			12,905			—		43,933
Prior periods	—			9			227			—		236
Payments and customer credits issued	(27,367		)	(4,189		)	(8,073		)	—		(39,629		)
Balance at March 31, 2019	$	2,108		$	2,733		$	16,975		$	—	$	21,816

Contract Assets and Liabilities under Topic 606

Changes in our contract assets and liabilities under Topic 606 were as follows (in thousands):



	Contract Assets: Unbilled Collaboration Revenue						Contract Liabilities: Deferred Revenue
	Current Portion			Long-term Portion			Current Portion			Long-term Portion
Balance at December 31, 2018	$	—		$	—		$	—		$	15,897
Increases as a result of a change in transaction price and recognition of revenues as services are performed	10,222			1,450			—			—
Transfer to receivables from contract assets recognized at the beginning of the period	(543		)	—			—			—
Increases as a result of the deferral of milestones achieved in period, excluding amounts recognized as revenue	—			—			—			—
Revenue recognized that was included in the contract liability balance at the beginning of the period	—			—			(1,313		)	—
Other adjustments ⁽¹⁾	(2,435		)	(1,450		)	3,689			(7,574		)
Balance at March 31, 2019	$	7,244		$	—		$	2,376		$	8,323

____________________


(1)	Includes reclassification of deferred revenue from long-term to current and adjustments made due to netting of contract assets and liabilities by collaboration agreement.

Collaboration Agreements (Tables)

3 Months Ended

Mar. 29, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Collaborative Revenues Under Collaboration Agreement

Profits on U.S. commercialization and Royalty revenues on ex-U.S. sales were as follows (in thousands):



	Three Months Ended March 31,
	2019		2018
Profits on U.S. commercialization	$	1,055	$	1,373
Royalty revenues on ex-U.S. sales	$	1,490	$	1,349

Collaboration revenues under the collaboration agreement with Ipsen were as follows (in thousands):



	Three Months Ended March 31,
	2019		2018
Ipsen collaboration revenues	$	21,868	$	53,809

Collaboration revenues under the collaboration agreement with Takeda were as follows (in thousands):



	Three Months Ended March 31,
	2019		2018
Takeda collaboration revenues	$	11,493	$	2,917

Cash and Investments (Tables)

3 Months Ended

Mar. 29, 2019

Investments, Debt and Equity Securities [Abstract]

Reconciliation of Cash, Cash Equivalents, and Restricted Cash



	March 31, 2019		December 31, 2018		March 31, 2018		December 31, 2017
Cash and cash equivalents	$	373,937	$	314,775	$	232,331	$	183,164
Restricted cash included in short-term restricted cash and investments	—		—		504		504
Restricted cash included in long-term restricted cash and investments	1,100		1,100		1,500		4,646
Cash, cash equivalents, and restricted cash as reported within the accompanying Condensed Consolidated Statements of Cash Flows	$	375,037	$	315,875	$	234,335	$	188,314

Reconciliation of Cash, Cash Equivalents, and Restricted Cash



	March 31, 2019		December 31, 2018		March 31, 2018		December 31, 2017
Cash and cash equivalents	$	373,937	$	314,775	$	232,331	$	183,164
Restricted cash included in short-term restricted cash and investments	—		—		504		504
Restricted cash included in long-term restricted cash and investments	1,100		1,100		1,500		4,646
Cash, cash equivalents, and restricted cash as reported within the accompanying Condensed Consolidated Statements of Cash Flows	$	375,037	$	315,875	$	234,335	$	188,314

Investments by Security Type

Cash and investments by security type were as follows (in thousands):



	March 31, 2019
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Investments available-for-sale:
Money market funds	$	75,171	$	—	$	—		$	75,171
Commercial paper	414,317		—		—			414,317
Corporate bonds	417,303		1,257		(175		)	418,385
U.S. Treasury and government sponsored enterprises	84,448		41		(2		)	84,487
Total investments available-for-sale	991,239		1,298		(177		)	992,360
Cash and restricted cash	1,019		—		—			1,019
Certificates of deposit	25,990		—		—			25,990
Total cash and investments	$	1,018,248	$	1,298	$	(177	)	$	1,019,369



	December 31, 2018
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Investments available-for-sale:
Money market funds	$	47,744	$	—	$	—		$	47,744
Commercial paper	381,134		—		(1		)	381,133
Corporate bonds	344,741		180		(857		)	344,064
U.S. Treasury and government sponsored enterprises	55,224		2		(25		)	55,201
Total investments available-for-sale	828,843		182		(883		)	828,142
Cash and restricted cash	6,883		—		—			6,883
Certificates of deposit	16,596		—		—			16,596
Total cash and investments	$	852,322	$	182	$	(883	)	$	851,621

Fair Value and Gross Unrealized Losses of Investments Available-for-Sale in an Unrealized Loss Position

The fair value and gross unrealized losses on investments available-for-sale in an unrealized loss position were as follows (in thousands):



	March 31, 2019
	In an Unrealized Loss Position Less than 12 Months					In an Unrealized Loss Position 12 Months or Greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Corporate bonds	$	49,233	$	(39	)	$	45,010	$	(136	)	$	94,243	$	(175	)
U.S. Treasury and government sponsored enterprises	—		—			7,990		(2		)	7,990		(2		)
Total	$	49,233	$	(39	)	$	53,000	$	(138	)	$	102,233	$	(177	)



	December 31, 2018
	In an Unrealized Loss Position Less than 12 Months					In an Unrealized Loss Position 12 Months or Greater					Total
	Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses			Fair Value		Gross Unrealized Losses
Corporate bonds	$	236,162	$	(606	)	$	39,627	$	(251	)	$	275,789	$	(857	)
U.S. Treasury and government sponsored enterprises	28,105		(16		)	9,182		(9		)	37,287		(25		)
Commercial paper	7,091		(1		)	—		—			7,091		(1		)
Total	$	271,358	$	(623	)	$	48,809	$	(260	)	$	320,167	$	(883	)

Fair Value of Cash Equivalents and Investments by Contractual Maturity

The fair value of investments available-for-sale by contractual maturity were as follows (in thousands):



	March 31, 2019		December 31, 2018
Maturing in one year or less	$	784,432	$	674,455
Maturing after one year through five years	207,928		153,687
Total investments available-for-sale	$	992,360	$	828,142

Inventory (Tables)

3 Months Ended

Mar. 29, 2019

Inventory Disclosure [Abstract]

Inventory

Inventory consisted of the following (in thousands):



	March 31, 2019		December 31, 2018
Raw materials	$	2,245	$	1,922
Work in process	6,514		6,170
Finished goods	4,862		3,836
Total	$	13,621	$	11,928

Balance Sheet classification:
Current portion included in Inventory	$	10,143	$	9,838
Long-term portion included in Other long-term assets	3,478		2,090
Total	$	13,621	$	11,928

Property and Equipment (Tables)

3 Months Ended

Mar. 29, 2019

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consisted of the following (in thousands):



	March 31, 2019			December 31, 2018
Leasehold improvements	$	33,811		$	33,941
Computer equipment and software	15,110			15,022
Furniture and fixtures	12,908			12,709
Laboratory equipment	6,764			5,668
Construction in progress	1,231			866
	69,824			68,206
Less: accumulated depreciation and amortization	(19,271		)	(17,309		)
Property and equipment, net	$	50,553		$	50,897

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 29, 2019

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

Allocated Employee Stock-Based Compensation Expense

We allocated the 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,
	2019		2018
Research and development	$	4,306	$	3,033
Selling, general and administrative	8,223		6,272
Total stock-based compensation	$	12,529	$	9,305

Weighted Average Grant-Date Fair Value of Stock Options and ESPP Purchases

The weighted average grant-date fair value per share of stock options and ESPP purchases were as follows:



	Three Months Ended March 31,
	2019		2018
Stock options	$	9.21	$	11.52
ESPP	$	4.67	$	7.39

Valuation Assumptions Used to Estimate Grant-Date Fair Value

The grant-date fair value of stock option grants and ESPP purchases was estimated using the following assumptions:



	Three Months Ended March 31,
	2019		2018
Stock options:
Risk-free interest rate	2.22	%	2.40	%
Dividend yield	—	%	—	%
Volatility	49	%	54	%
Expected life	4.0 years		4.0 years
ESPP:
Risk-free interest rate	2.48	%	1.53	%
Dividend yield	—	%	—	%
Volatility	57	%	53	%
Expected life	6 months		6 months

Stock Option Activity

Activity for stock options during the three months ended March 31, 2019 was as follows (dollars in thousands, except per share amounts):



	Shares		Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding at December 31, 2018	22,674,062		$	8.71
Granted	246,820		$	22.94
Exercised	(1,413,766	)	$	4.91
Forfeited	(44,200	)	$	14.32
Expired	(22,925	)	$	22.12
Options outstanding at March 31, 2019	21,439,991		$	9.10	3.6 years	$	317,143
Exercisable at March 31, 2019	15,714,721		$	6.01	2.9 years	$	280,307

RSU Activity

Activity for RSUs during the three months ended March 31, 2019 was as follows (dollars in thousands, except per share amounts):



	Shares		Weighted Average Grant Date Fair Value Per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
RSUs outstanding at December 31, 2018	4,857,334		$	18.42
Awarded	123,410		$	22.94
Vested and released	(194,296	)	$	7.83
Forfeited	(100,630	)	$	18.13
RSUs outstanding at March 31, 2019	4,685,818		$	18.98	2.0 years	$	111,522

Net Income Per Share (Tables)

3 Months Ended

Mar. 29, 2019

Earnings Per Share [Abstract]

Computation of Basic and Diluted Net Income Per Share

The computation of basic and diluted net income per share was as follows (in thousands, except per share amounts):



	Three Months Ended March 31,
	2019		2018
Numerator:
Net income	$	75,775	$	115,857
Denominator:
Weighted-average shares of common stock outstanding used in computing basic net income per share	300,542		296,421
Dilutive securities	14,102		17,270
Weighted-average shares of common stock outstanding and dilutive securities used in computing diluted net income per share	314,644		313,691

Net income per share, basic	$	0.25	$	0.39
Net income per share, diluted	$	0.24	$	0.37

Potential Shares of Common Stock Not Included in the Computation of Diluted Net Income (Loss) Per Share

Potential shares of common stock not included in the computation of diluted net income per share because to do so would be anti-dilutive was as follows (in thousands):



	Three Months Ended March 31,
	2019	2018
Potentially dilutive securities	5,089	1,907

Fair Value Measurements (Tables)

3 Months Ended

Mar. 29, 2019

Fair Value Disclosures [Abstract]

Classification of Financial Assets Measured and Recorded at Fair Value on a Recurring Basis

The classification within the fair value hierarchy of our financial assets that were measured and recorded at fair value on a recurring basis was as follows (in thousands):



	March 31, 2019
	Level 1		Level 2		Total
Money market funds	$	75,171	$	—	$	75,171
Commercial paper	—		414,317		414,317
Corporate bonds	—		418,385		418,385
U.S. Treasury and government sponsored enterprises	—		84,487		84,487
Total investments available-for-sale	75,171		917,189		992,360
Certificates of deposit	—		25,990		25,990
Total financial assets carried at fair value	$	75,171	$	943,179	$	1,018,350



	December 31, 2018
	Level 1		Level 2		Total
Money market funds	$	47,744	$	—	$	47,744
Commercial paper	—		381,133		381,133
Corporate bonds	—		344,064		344,064
U.S. Treasury and government sponsored enterprises	—		55,201		55,201
Total investments available-for-sale	47,744		780,398		828,142
Certificates of deposit	—		16,596		16,596
Total financial assets carried at fair value	$	47,744	$	796,994	$	844,738

Organization and Summary of Significant Accounting Policies (Details) $ in Thousands	3 Months Ended
	Mar. 29, 2019 USD ($) segment product	Mar. 30, 2018 USD ($)
Organization And Summary Of Significant Policies [Line Items]
Number of products that entered in the commercial marketplace	4
Number of business segments \| segment	1
Selling, general and administrative \| $	$ 60,138	$ 54,016
Restatement Adjustment
Organization And Summary Of Significant Policies [Line Items]
Selling, general and administrative \| $		$ (1,400)
Commercial Presence in Markets Worldwide
Organization And Summary Of Significant Policies [Line Items]
Number of products that entered in the commercial marketplace	3
Products Derived from Cabozantinib
Organization And Summary Of Significant Policies [Line Items]
Number of products that entered in the commercial marketplace	2

Revenues - Revenues by Disaggregated Category (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Disaggregation of Revenue [Line Items]
Total revenues	$ 215,487	$ 213,719
Collaborative Arrangement with Ipsen
Disaggregation of Revenue [Line Items]
Total revenues	$ 21,868	53,809
GSK \| Collaborative Arrangement with Ipsen
Disaggregation of Revenue [Line Items]
Percent of royalty on net sale	3.00%
Net product revenues
Disaggregation of Revenue [Line Items]
Total revenues	$ 179,581	134,272
Gross product revenues
Disaggregation of Revenue [Line Items]
Total revenues	223,750	159,436
Discounts and allowances
Disaggregation of Revenue [Line Items]
Total revenues	44,169	25,164
Total collaboration revenues
Disaggregation of Revenue [Line Items]
Total revenues	35,906	79,447
License revenues
Disaggregation of Revenue [Line Items]
Total revenues	24,509	69,030
Research and development services revenues
Disaggregation of Revenue [Line Items]
Total revenues	11,928	10,099
Other collaboration revenues
Disaggregation of Revenue [Line Items]
Total revenues	$ (531)	$ 318

Revenues - Net Product Revenues Disaggregated by Product (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Disaggregation of Revenue [Line Items]
Net product revenues	$ 215,487	$ 213,719
Net product revenues
Disaggregation of Revenue [Line Items]
Net product revenues	179,581	134,272
CABOMETYX
Disaggregation of Revenue [Line Items]
Net product revenues	175,890	128,934
COMETRIQ
Disaggregation of Revenue [Line Items]
Net product revenues	$ 3,691	$ 5,338

Revenues - Revenues Disaggregated by Significant Customer (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total revenues	$ 215,487	$ 213,719
Revenue \| Customer Concentration Risk
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	100.00%	100.00%
Caremark L.L.C.
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total revenues	$ 32,698	$ 26,388
Caremark L.L.C. \| Revenue \| Customer Concentration Risk
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	15.00%	12.00%
Affiliates of McKesson Corporation
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total revenues	$ 25,311	$ 21,331
Affiliates of McKesson Corporation \| Revenue \| Customer Concentration Risk
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	12.00%	10.00%
Accredo Health, Incorporated
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total revenues	$ 22,495	$ 18,286
Accredo Health, Incorporated \| Revenue \| Customer Concentration Risk
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	10.00%	9.00%
Affiliates of AmerisourceBergen Corporation
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total revenues	$ 21,902	$ 15,736
Affiliates of AmerisourceBergen Corporation \| Revenue \| Customer Concentration Risk
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	10.00%	7.00%
Ipsen
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total revenues	$ 21,868	$ 53,809
Ipsen \| Revenue \| Customer Concentration Risk
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	10.00%	25.00%
Others, individually less than 10% of Total revenues for all periods presented
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Total revenues	$ 91,213	$ 78,169
Others, individually less than 10% of Total revenues for all periods presented \| Revenue \| Customer Concentration Risk
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	43.00%	37.00%

Revenues - Revenues Disaggregated by Geographic Region (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Disaggregation of Revenue [Line Items]
Total revenues	$ 215,487	$ 213,719
U.S.
Disaggregation of Revenue [Line Items]
Total revenues	182,126	136,993
Europe
Disaggregation of Revenue [Line Items]
Total revenues	21,868	53,809
Rest of the world
Disaggregation of Revenue [Line Items]
Total revenues	$ 11,493	$ 22,917

Revenues - Activities and Ending Reserve Balances for Significant Categories of Discounts and Allowances (Details) $ in Thousands	3 Months Ended
	Mar. 29, 2019 USD ($)
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at December 31, 2018	$ 17,276
Provision related to sales made in:
Current period	43,933
Prior periods	236
Payments and customer credits issued	(39,629)
Balance at March 31, 2019	21,816
Chargebacks and Discounts for Prompt Payment
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at December 31, 2018	2,322
Provision related to sales made in:
Current period	27,153
Prior periods	0
Payments and customer credits issued	(27,367)
Balance at March 31, 2019	2,108
Other Customer Credits/Fees and Co-pay Assistance
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at December 31, 2018	3,038
Provision related to sales made in:
Current period	3,875
Prior periods	9
Payments and customer credits issued	(4,189)
Balance at March 31, 2019	2,733
Rebates
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at December 31, 2018	11,916
Provision related to sales made in:
Current period	12,905
Prior periods	227
Payments and customer credits issued	(8,073)
Balance at March 31, 2019	16,975
Returns
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at December 31, 2018	0
Provision related to sales made in:
Current period	0
Prior periods	0
Payments and customer credits issued	0
Balance at March 31, 2019	$ 0

Revenues - Changes in Contract Assets and Liabilities under Topic 606 (Details) - USD ($)
$ in Thousands

3 Months Ended

Mar. 29, 2019

Mar. 30, 2018

Contract Assets - Current Portion

Balance

^[1]

$ 0

Increases as a result of a change in transaction price and recognition of revenues as services are performed

10,222

Transfer to receivables from contract assets recognized at the beginning of the period

(543)

Other

(2,435)

Balance

7,244

Contract Assets - Long-term Portion

Increases as a result of a change in transaction price and recognition of revenues as services are performed

1,450

Other

(1,450)

Balance

Contract Liabilities - Current Portion

Balance

^[1]

Increases as a result of the deferral of milestones achieved in period, excluding amounts recognized as revenue

Revenue recognized that was included in the contract liability balance at the beginning of the period

(1,313)

Other

3,689

Balance

2,376

Contract Liabilities - Long-term Portion

Balance

^[1]

15,897

Increases as a result of the deferral of milestones achieved in period, excluding amounts recognized as revenue

Other

(7,574)

Balance

8,323

Revenues recognized for performance obligations satisfied in previous periods

25,300

$ 71,300

Balances Without the Adoption of Topic 606

Contract Assets - Current Portion

Balance

Contract Assets - Long-term Portion

Balance

Contract Liabilities - Current Portion

Balance

Contract Liabilities - Long-term Portion

Balance

$ 15,897

[1]	The Condensed Consolidated Balance Sheet as of December 31, 2018 has been derived from the audited financial statements as of that date.

Collaboration Agreements - Collaboration Revenues under the Collaboration Agreement with Ipsen (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues	$ 215,487	$ 213,719
Collaborative Arrangement with Ipsen
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues	$ 21,868	$ 53,809

Collaboration Agreements - Ipsen Collaboration (Details) - USD ($)
$ in Thousands

Mar. 29, 2019

Dec. 28, 2018

^[1]

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

Net contract liability, current portion of deferred revenue

$ 2,376

$ 0

Net contract liability, long-term portion of deferred revenue

8,323

$ 15,897

Collaborative Arrangement with Ipsen

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

Remaining performance obligation

46,800

Net contract liability

10,700

Net contract liability, current portion of deferred revenue

2,400

Net contract liability, long-term portion of deferred revenue

$ 8,300

[1]	The Condensed Consolidated Balance Sheet as of December 31, 2018 has been derived from the audited financial statements as of that date.

Collaboration Agreements - Collaboration Revenues under the Collaboration Agreement with Takeda (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues	$ 215,487	$ 213,719
Collaborative Arrangement with Takeda
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Total revenues	$ 11,493	$ 2,917

Collaboration Agreements - Takeda Collaboration (Details) - Collaborative Arrangement with Takeda $ in Millions	Mar. 29, 2019 USD ($)
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Remaining performance obligation	$ 25.2
Net contract liability	$ 7.2

Collaboration Agreements - Royalty Revenues under the Collaboration Agreement with GSK (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Collaboration Agreement with GlaxoSmithKline
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Royalties accruing to GSK	$ 7,282	$ 5,125
GSK \| Collaborative Arrangement with Ipsen
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Percent of royalty on net sale	3.00%

Collaboration Agreements - Royalty Revenues under the Collaboration Agreement with Genentech (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Royalty revenues on ex-U.S. sales	$ 215,487	$ 213,719
COTELLIC \| Collaborative Arrangement with Genentech
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Royalty revenues on ex-U.S. sales	1,490	1,349
Profits and losses on U.S. commercialization	$ 1,055	$ 1,373

Cash and Investments - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($)
$ in Thousands

Mar. 29, 2019

Dec. 28, 2018

Mar. 30, 2018

Dec. 29, 2017

Cash and Cash Equivalents [Abstract]

Cash and cash equivalents

$ 373,937

$ 314,775

^[1]

$ 232,331

$ 183,164

Restricted cash included in short-term restricted cash and investments

^[1]

504

Restricted cash included in long-term restricted cash and investments

1,100

^[1]

1,500

4,646

Cash, cash equivalents, and restricted cash as reported within the accompanying Condensed Consolidated Statements of Cash Flows

$ 375,037

$ 315,875

$ 234,335

$ 188,314

[1]	The Condensed Consolidated Balance Sheet as of December 31, 2018 has been derived from the audited financial statements as of that date.

Cash and Investments - Investments by Security Type (Details) - USD ($) $ in Thousands	Mar. 29, 2019	Dec. 28, 2018	Mar. 30, 2018	Dec. 29, 2017
Investment [Line Items]
Amortized Cost	$ 991,239	$ 828,843
Amortized Cost	375,037	315,875	$ 234,335	$ 188,314
Gross Unrealized Gains	1,298	182
Gross Unrealized Losses	(177)	(883)
Fair Value	992,360	828,142
Total cash and investments, amortized cost	1,018,248	852,322
Total cash and investments, fair value	1,019,369	851,621
Money market funds
Investment [Line Items]
Amortized Cost	75,171	47,744
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	75,171	47,744
Commercial paper
Investment [Line Items]
Amortized Cost	414,317	381,134
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	(1)
Fair Value	414,317	381,133
Corporate bonds
Investment [Line Items]
Amortized Cost	417,303	344,741
Gross Unrealized Gains	1,257	180
Gross Unrealized Losses	(175)	(857)
Fair Value	418,385	344,064
U.S. Treasury and government sponsored enterprises
Investment [Line Items]
Amortized Cost	84,448	55,224
Gross Unrealized Gains	41	2
Gross Unrealized Losses	(2)	(25)
Fair Value	84,487	55,201
Cash and restricted cash
Investment [Line Items]
Amortized Cost	1,019	6,883
Fair Value	1,019	6,883
Certificates of deposit
Investment [Line Items]
Amortized Cost	25,990	16,596
Fair Value	$ 25,990	$ 16,596

Cash and Investments - Fair Value and Gross Unrealized Losses of Investments Available-for-Sale in an Unrealized Loss Position (Details) - USD ($) $ in Thousands	Mar. 29, 2019	Dec. 28, 2018
Fair Value
In an Unrealized Loss Position Less than 12 Months	$ 49,233	$ 271,358
In an Unrealized Loss Position 12 Months or Greater	53,000	48,809
Total	102,233	320,167
Gross Unrealized Losses
In an Unrealized Loss Position Less than 12 Months	(39)	(623)
In an Unrealized Loss Position 12 Months or Greater	(138)	(260)
Total	(177)	(883)
U.S. Treasury and government sponsored enterprises
Fair Value
In an Unrealized Loss Position Less than 12 Months	0	28,105
In an Unrealized Loss Position 12 Months or Greater	7,990	9,182
Total	7,990	37,287
Gross Unrealized Losses
In an Unrealized Loss Position Less than 12 Months	0	(16)
In an Unrealized Loss Position 12 Months or Greater	(2)	(9)
Total	(2)	(25)
Corporate bonds
Fair Value
In an Unrealized Loss Position Less than 12 Months	49,233	236,162
In an Unrealized Loss Position 12 Months or Greater	45,010	39,627
Total	94,243	275,789
Gross Unrealized Losses
In an Unrealized Loss Position Less than 12 Months	(39)	(606)
In an Unrealized Loss Position 12 Months or Greater	(136)	(251)
Total	$ (175)	(857)
Commercial paper
Fair Value
In an Unrealized Loss Position Less than 12 Months		7,091
In an Unrealized Loss Position 12 Months or Greater		0
Total		7,091
Gross Unrealized Losses
In an Unrealized Loss Position Less than 12 Months		(1)
In an Unrealized Loss Position 12 Months or Greater		0
Total		$ (1)

Cash and Investments - Narrative (Details)	3 Months Ended		9 Months Ended
Cash and Investments - Narrative (Details)	Mar. 29, 2019 USD ($) investment	Mar. 30, 2018 USD ($)	Sep. 28, 2018 USD ($)	Dec. 28, 2018 USD ($) investment
Investments, Debt and Equity Securities [Abstract]
Gain (loss) on sales of investments available-for-sale	$ 0	$ 0
Number of investments in an unrealized loss position \| investment	69			199
Other-than-temporary impairment charges on available-for-sale securities	$ 0	$ 0
Beneficial ownership interest by BlackRock (more than)	10.00%
Fair value of cash and investments managed by BlackRock	$ 356,000,000			$ 298,500,000
Fair value of cash and investments managed by BlackRock in the BlackRock Liquidity Money Market Fund	$ 800,000			$ 3,000,000
Fees for advisory services paid to BlackRock			$ 100,000

Cash and Investments - Fair Value of Cash Equivalents and Investments by Contractual Maturity (Details) - USD ($) $ in Thousands	Mar. 29, 2019	Dec. 28, 2018
Investments, Debt and Equity Securities [Abstract]
Maturing in one year or less	$ 784,432	$ 674,455
Maturing after one year through five years	207,928	153,687
Total	$ 992,360	$ 828,142

Inventory (Details) - USD ($)	3 Months Ended
Inventory (Details) - USD ($)	Mar. 29, 2019	Mar. 30, 2018	Dec. 28, 2018
Inventory [Line Items]
Raw materials	$ 2,245,000		$ 1,922,000
Work in process	6,514,000		6,170,000
Finished goods	4,862,000		3,836,000
Total	13,621,000		11,928,000
Write-downs on inventory	200,000	$ 0
Current portion included in Inventory
Inventory [Line Items]
Total	10,143,000		9,838,000
Long-term portion included in Other long-term assets
Inventory [Line Items]
Total	$ 3,478,000		$ 2,090,000

Property and Equipment (Details) - USD ($)
$ in Thousands

Mar. 29, 2019

Dec. 28, 2018

Property, Plant and Equipment [Line Items]

Property and equipment, gross

$ 69,824

$ 68,206

Less: accumulated depreciation and amortization

(19,271)

(17,309)

Property and equipment, net

50,553

50,897

^[1]

Leasehold improvements

Property, Plant and Equipment [Line Items]

Property and equipment, gross

33,811

33,941

Computer equipment and software

Property, Plant and Equipment [Line Items]

Property and equipment, gross

15,110

15,022

Furniture and fixtures

Property, Plant and Equipment [Line Items]

Property and equipment, gross

12,908

12,709

Laboratory equipment

Property, Plant and Equipment [Line Items]

Property and equipment, gross

6,764

5,668

Construction in progress

Property, Plant and Equipment [Line Items]

Property and equipment, gross

$ 1,231

$ 866

[1]	The Condensed Consolidated Balance Sheet as of December 31, 2018 has been derived from the audited financial statements as of that date.

Property and Equipment - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 2.0	$ 0.4

Stock-Based Compensation - Allocated Employee Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 12,529	$ 9,305
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	4,306	3,033
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation	$ 8,223	$ 6,272

Stock-Based Compensation - Narrative (Details) $ in Millions	3 Months Ended
	Mar. 29, 2019 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for grant (in shares) \| shares	14,586,459
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense \| $	$ 44.1
Weighted-average cost recognition period	2 years 5 months 26 days
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense \| $	$ 12.7
RSUs awarded (in shares) \| shares	693,131
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense \| $	$ 77.0
Weighted-average cost recognition period	2 years 11 months 1 day
RSUs awarded (in shares) \| shares	123,410

Stock-Based Compensation - Weighted Average Grant-Date Fair Value of Stock Options and ESPP Purchases (Details) - $ / shares	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant-date fair value (in dollars per share)	$ 9.21	$ 11.52
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant-date fair value (in dollars per share)	$ 4.67	$ 7.39

Stock-Based Compensation - Valuation Assumptions Used to Estimate Grant-Date Fair Value (Details)	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	2.22%	2.40%
Dividend yield	0.00%	0.00%
Expected volatility	49.00%	54.00%
Expected life	3 years 11 months 19 days	3 years 11 months 23 days
ESPP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	2.48%	1.53%
Dividend yield	0.00%	0.00%
Expected volatility	57.00%	53.00%
Expected life	6 months	6 months

Stock-Based Compensation - Stock Option Activity (Details) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 29, 2019 USD ($) $ / shares shares
Shares
Options outstanding at beginning of period (in shares) \| shares	22,674,062
Granted (in shares) \| shares	246,820
Exercised (in shares) \| shares	(1,413,766)
Forfeited (in shares) \| shares	(44,200)
Expired (in shares) \| shares	(22,925)
Options outstanding at end of period (in shares) \| shares	21,439,991
Exercisable at end of period (in shares) \| shares	15,714,721
Weighted Average Exercise Price Per Share
Options outstanding at beginning of period (in dollars per share) \| $ / shares	$ 8.71
Granted (in dollars per share) \| $ / shares	22.94
Exercised (in dollars per share) \| $ / shares	4.91
Forfeited (in dollars per share) \| $ / shares	14.32
Expired (in dollars per share) \| $ / shares	22.12
Options outstanding at end of period (in dollars per share) \| $ / shares	9.10
Exercisable at end of period (in dollars per share) \| $ / shares	$ 6.01
Weighted Average Remaining Contractual Term
Options outstanding at end of period	3 years 7 months 13 days
Exercisable at end of period	2 years 10 months 24 days
Aggregate Intrinsic Value
Options outstanding at end of period \| $	$ 317,143
Exercisable at end of period \| $	$ 280,307

Stock-Based Compensation - RSU Activity (Details) - RSUs $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 29, 2019 USD ($) $ / shares shares
Shares
RSUs outstanding at beginning of period (in shares) \| shares	4,857,334
Awarded (in shares) \| shares	123,410
Vested and released (in shares) \| shares	(194,296)
Forfeited (in shares) \| shares	(100,630)
RSUs outstanding at end of period (in shares) \| shares	4,685,818
Weighted Average Grant Date Fair Value Per Share
RSUs outstanding at beginning of period (in dollars per share) \| $ / shares	$ 18.42
Awarded (in dollars per share) \| $ / shares	22.94
Vested and released (in dollars per share) \| $ / shares	7.83
Forfeited (in dollars per share) \| $ / shares	18.13
RSUs outstanding at end of period (in dollars per share) \| $ / shares	$ 18.98
Weighted Average Remaining Contractual Term
RSUs outstanding at end of period	2 years
Aggregate Intrinsic Value
RSUs outstanding at end of period \| $	$ 111,522

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Mar. 29, 2019	Mar. 30, 2018
Income Tax Disclosure [Abstract]
Effective Income Tax Rate Reconciliation, Percent	16.40%	2.10%
Provision for income taxes	$ 14,896	$ 2,514

Net Income Per Share - Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Numerator:
Net income	$ 75,775	$ 115,857
Denominator:
Weighted-average shares of common stock outstanding used in computing basic net income per share (in shares)	300,542	296,421
Dilutive securities (in shares)	14,102	17,270
Weighted-average shares of common stock outstanding and dilutive securities used in computing diluted net income per share (in shares)	314,644	313,691
Net income per share, basic (in dollars per share)	$ 0.25	$ 0.39
Net income per share, diluted (in dollars per share)	$ 0.24	$ 0.37

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(19))
-URI http://asc.fasb.org/extlink&oid=114873790&loc=SL114874131-224263

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1337-109256

Reference 3: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 52
-URI http://asc.fasb.org/extlink&oid=109256448&loc=d3e4984-109258

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(21))
-URI http://asc.fasb.org/extlink&oid=115205541&loc=SL114868664-224227

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1252-109256

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(23))
-URI http://asc.fasb.org/extlink&oid=114873765&loc=SL114874048-224260

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=109260490&loc=SL5780133-109256

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 52
-URI http://asc.fasb.org/extlink&oid=109256448&loc=d3e4984-109258

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1252-109256

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(23))
-URI http://asc.fasb.org/extlink&oid=114873765&loc=SL114874048-224260

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1337-109256

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(21))
-URI http://asc.fasb.org/extlink&oid=115205541&loc=SL114868664-224227

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=109260490&loc=SL5780133-109256

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(19))
-URI http://asc.fasb.org/extlink&oid=114873790&loc=SL114874131-224263

+ Details

- Definition

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

+ References + Details

Net Income Per Share - Potential Shares of Common Stock Not Included in the Computation of Diluted Net Income (Loss) Per Share (Details) - shares shares in Thousands	3 Months Ended
	Mar. 29, 2019	Mar. 30, 2018
Potentially dilutive securities
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares (in shares)	5,089	1,907

Subsequent Event (Details)			12 Months Ended
Subsequent Event (Details)	Apr. 29, 2019 USD ($)	Apr. 15, 2019 USD ($) ft²	Dec. 28, 2018 USD ($)	Apr. 01, 2019 USD ($) ft²
Collaborative Arrangement with Takeda
Subsequent Event [Line Items]
Milestone payments earned			$ 10,000,000
Subsequent Event \| Collaborative Arrangement with Takeda
Subsequent Event [Line Items]
Limit on reimbursement per year	$ 1,000,000
Increase in maximum amount eligible for development and regulatory milestones	12,000,000
Maximum amount eligible for development and regulatory milestones	102,000,000
Milestone payments earned	16,000,000
Increase in maximum amount eligible for commercial milestones under collaborations agreement	3,000,000
Maximum amount eligible for commercial milestones under collaborations agreement	$ 86,000,000
Subsequent Event \| Corporate Headquarters, Alameda, California
Subsequent Event [Line Items]
Operating lease, expansion (in square feet) \| ft²				37,544
Operating lease, surrendered (in square feet) \| ft²				2,703
Tenant improvement allowance				$ 1,700,000
Area of lease property (in square feet) \| ft²		169,606
Aggregate contractual base rent		$ 34,600,000
Subsequent Event \| Corporate Headquarters, Alameda, California \| Minimum
Subsequent Event [Line Items]
Monthly base rent		224,505
Operating lease, not yet commenced, monthly base rent		71,334
Subsequent Event \| Corporate Headquarters, Alameda, California \| Maximum
Subsequent Event [Line Items]
Monthly base rent		283,933
Operating lease, not yet commenced, monthly base rent		$ 90,481

Label	Element	Value
Accounting Standards Update 2016-09 [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 258,505,000
Accounting Standards Update 2016-09 [Member] \| Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 258,505,000

Fair Value Measurements (Details) - USD ($) $ in Thousands	Mar. 29, 2019	Dec. 28, 2018
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	$ 992,360	$ 828,142
Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	992,360	828,142
Financial assets	1,018,350	844,738
Level 1 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	75,171	47,744
Financial assets	75,171	47,744
Level 2 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	917,189	780,398
Financial assets	943,179	796,994
Money market funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	75,171	47,744
Money market funds \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	75,171	47,744
Money market funds \| Level 1 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	75,171	47,744
Money market funds \| Level 2 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	0	0
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	414,317	381,133
Commercial paper \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	414,317	381,133
Commercial paper \| Level 1 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	0	0
Commercial paper \| Level 2 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	414,317	381,133
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	418,385	344,064
Corporate bonds \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	418,385	344,064
Corporate bonds \| Level 1 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	0	0
Corporate bonds \| Level 2 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	418,385	344,064
U.S. Treasury and government sponsored enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	84,487	55,201
U.S. Treasury and government sponsored enterprises \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	84,487	55,201
U.S. Treasury and government sponsored enterprises \| Level 1 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	0	0
U.S. Treasury and government sponsored enterprises \| Level 2 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total investments available-for-sale	84,487	55,201
Certificates of deposit
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Certificates of deposit	25,990	16,596
Certificates of deposit \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Certificates of deposit	25,990	16,596
Certificates of deposit \| Level 1 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Certificates of deposit	0	0
Certificates of deposit \| Level 2 \| Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Certificates of deposit	$ 25,990	$ 16,596