0000939767-22-000026 | 10-K | XBRL Viewer

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Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2021	Jan. 01, 2021
Current assets:
Cash and cash equivalents	$ 647,169	$ 319,217
Short-term investments	819,905	887,319
Trade receivables, net	282,650	160,875
Inventory	27,493	20,973
Prepaid expenses and other current assets	57,530	57,011
Total current assets	1,834,747	1,445,395
Long-term investments	371,112	330,751
Property and equipment, net	104,031	67,384
Deferred tax assets, net	111,663	156,711
Goodwill	63,684	63,684
Other long-term assets	131,002	73,408
Total assets	2,616,239	2,137,333
Current liabilities:
Accounts payable	24,258	23,632
Accrued compensation and benefits	61,969	51,189
Accrued clinical trial liabilities	77,544	52,251
Rebates and fees due to customers	33,700	20,683
Accrued collaboration liabilities	86,753	12,456
Other current liabilities	53,366	44,447
Total current liabilities	337,590	204,658
Long-term portion of deferred revenue	8,739	3,755
Long-term portion of operating lease liabilities	51,272	49,086
Other long-term liabilities	8,023	721
Total liabilities	405,624	258,220
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000 shares authorized and no shares issued	0	0
Common stock, $0.001 par value; 400,000 shares authorized; issued and outstanding: 318,842 and 311,627 at December 31, 2021 and 2020, respectively	319	312
Additional paid-in capital	2,427,561	2,321,895
Accumulated other comprehensive income	(758)	4,476
Accumulated deficit	(216,507)	(447,570)
Total stockholders’ equity	2,210,615	1,879,113
Total liabilities and stockholders’ equity	$ 2,616,239	$ 2,137,333

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2021	Jan. 01, 2021
Preferred stock
Par value (in dollars per share)	$ 0.001	$ 0.001
Shares authorized (in shares)	10,000,000	10,000,000
Shares issued (in shares)	0	0
Common stock
Par value (in dollars per share)	$ 0.001	$ 0.001
Shares authorized (in shares)	400,000,000	400,000,000
Shares issued (in shares)	318,842,000	311,627,000
Shares outstanding (in shares)	318,842,000	311,627,000

Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Revenues:
Total revenues	$ 1,434,970	$ 987,538	$ 967,775
Operating expenses:
Cost of goods sold	52,873	36,272	33,097
Research and development	693,716	547,851	336,964
Selling, general and administrative	401,715	293,355	228,244
Total operating expenses	1,148,304	877,478	598,305
Income from operations	286,666	110,060	369,470
Interest income	7,672	19,865	27,959
Other income (expense), net	(184)	912	680
Income before income taxes	294,154	130,837	398,109
Provision for income taxes	63,091	19,056	77,097
Net income	$ 231,063	$ 111,781	$ 321,012
Net income per share:
Basic (in dollars per share)	$ 0.73	$ 0.36	$ 1.06
Diluted (in dollars per share)	$ 0.72	$ 0.35	$ 1.02
Denominator:
Basic (in shares)	314,884	308,271	302,584
Diluted (in shares)	322,359	318,001	315,009
Net product revenues
Revenues:
Total revenues	$ 1,077,256	$ 741,550	$ 759,950
License revenues
Revenues:
Total revenues	249,956	167,295	165,914
Collaboration services revenues
Revenues:
Total revenues	$ 107,758	$ 78,693	$ 41,911

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Statement of Comprehensive Income [Abstract]
Net income	$ 231,063	$ 111,781	$ 321,012
Other comprehensive income (loss):
Net unrealized gains (losses) on available-for-sale debt securities, net of tax impact of $1,481, $(394), and $(1,049), respectively	(5,234)	1,407	3,770
Comprehensive income	$ 225,829	$ 113,188	$ 324,782

- Definition

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

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Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Jan. 01, 2021	Dec. 31, 2021	Jan. 03, 2020
Statement of Comprehensive Income [Abstract]
Tax impact of available-for-sale, unrealized holding gain (loss)	$ (394)	$ 1,481	$ (1,049)

Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit
Beginning balance (in shares) at Dec. 28, 2018		299,876
Beginning balance at Dec. 28, 2018	$ 1,287,453	$ 300	$ 2,168,217	$ (701)	$ (880,363)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	321,012				321,012
Other comprehensive income	3,770			3,770
Issuance of common stock under equity incentive and stock purchase plans (in shares)		4,955
Issuance of common stock under equity incentive and stock purchase plans	27,037	$ 5	27,032
Stock transactions associated with taxes withheld on equity awards	(9,904)		(9,904)
Stock-based compensation	56,602		56,602
Ending balance (in shares) at Jan. 03, 2020		304,831
Ending balance at Jan. 03, 2020	1,685,970	$ 305	2,241,947	3,069	(559,351)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	111,781				111,781
Other comprehensive income	1,407			1,407
Issuance of common stock under equity incentive and stock purchase plans (in shares)		6,796
Issuance of common stock under equity incentive and stock purchase plans	24,903	$ 7	24,896
Stock transactions associated with taxes withheld on equity awards	(50,018)		(50,018)
Stock-based compensation	$ 105,070		105,070
Ending balance (in shares) at Jan. 01, 2021	311,627	311,627
Ending balance at Jan. 01, 2021	$ 1,879,113	$ 312	2,321,895	4,476	(447,570)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	231,063				231,063
Other comprehensive income	(5,234)			(5,234)
Issuance of common stock under equity incentive and stock purchase plans (in shares)		7,215
Issuance of common stock under equity incentive and stock purchase plans	24,367	$ 7	24,360
Stock transactions associated with taxes withheld on equity awards	(39,142)		(39,142)
Stock-based compensation	$ 120,448		120,448
Ending balance (in shares) at Dec. 31, 2021	318,842	318,842
Ending balance at Dec. 31, 2021	$ 2,210,615	$ 319	$ 2,427,561	$ (758)	$ (216,507)

- Definition

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

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+ Details

- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Cash flows from operating activities:
Net income	$ 231,063	$ 111,781	$ 321,012
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	13,630	9,141	8,348
Stock-based compensation	119,820	105,070	56,602
Non-cash lease expense	5,332	4,830	2,819
Deferred taxes	46,529	15,265	71,002
Other, net	23,443	3,035	88
Changes in operating assets and liabilities:
Trade receivables, net	(122,324)	(42,470)	43,716
Inventory	(13,209)	(21,897)	(5,731)
Prepaid expenses and other assets	(39,875)	(25,831)	(5,723)
Deferred revenue	11,008	(1,051)	(9,301)
Accrued collaboration liabilities	70,297	600	4,437
Accounts payable and other liabilities	55,090	50,509	39,687
Net cash provided by operating activities	400,804	208,982	526,956
Cash flows from investing activities:
Purchases of property, equipment and other	(64,225)	(30,345)	(12,834)
Purchases of investments	(1,357,168)	(1,070,269)	(1,182,682)
Proceeds from maturities and sales of investments	1,378,509	969,399	608,269
Net cash used in investing activities	(42,884)	(131,215)	(587,247)
Cash flows from financing activities:
Proceeds from issuance of common stock under equity incentive and stock purchase plans	24,307	24,886	22,499
Taxes paid related to net share settlement of equity awards	(39,108)	(50,018)	(9,904)
Other, net	0	0	(42)
Net cash (used in) provided by financing activities	(14,801)	(25,132)	12,553
Net increase (decrease) in cash, cash equivalents and restricted cash equivalents	343,119	52,635	(47,738)
Cash, cash equivalents and restricted cash equivalents at beginning of period	320,772	268,137	315,875
Cash, cash equivalents and restricted cash equivalents at end of period	663,891	320,772	268,137
Supplemental cash flow disclosures:
Cash paid for taxes	12,960	4,115	7,873
Non-cash operating activities:
Right-of-use assets obtained in exchange for lease obligations	4,893	4,017	29,562
Non-cash investing activities:
Unpaid liabilities incurred in asset acquisition	4,000	0	0
Unpaid liabilities incurred for purchases of property and equipment	2,739	842	26
Unpaid liabilities incurred for unsettled investment purchases	0	1,615	0
Accounts receivable for unsettled investment sales	$ 0	$ 6,180	$ 0

Organization and Summary of Significant Accounting Policies	12 Months Ended
	Dec. 31, 2021
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. Using our considerable drug discovery, development and commercialization resources and capabilities, we have invented and brought to market innovative therapies that appropriately balance patient benefits and risks; we will continue to build on this foundation as we strive to provide cancer patients with new treatment options that improve upon current standards of care. Today, four products that originated in Exelixis laboratories are available to be prescribed to patients. Sales related to our flagship molecule, cabozantinib, account for the large majority of our revenues. Cabozantinib is an inhibitor of multiple tyrosine kinases including MET, AXL, VEGF receptors and RET and has been approved by the U.S. Food and Drug Administration (FDA) and in 61 other countries as: CABOMETYX® (cabozantinib) tablets approved for advanced renal cell carcinoma (RCC), both alone and in combination with Bristol-Myers Squibb Company’s (BMS) OPDIVO® (nivolumab), for previously treated hepatocellular carcinoma (HCC) and, currently by the FDA, for previously treated, radioactive iodine (RAI)-refractory differentiated thyroid cancer (DTC); and COMETRIQ® (cabozantinib) capsules approved for progressive, metastatic medullary thyroid cancer (MTC). For physicians treating these types of cancer, cabozantinib has become or is becoming an important drug in their selection of effective therapies. The other two products resulting from our discovery efforts are: COTELLIC® (cobimetinib), an inhibitor of MEK approved as part of multiple combination regimens to treat specific forms 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 (MR) approved for the treatment of hypertension in Japan and licensed to Daiichi Sankyo Company, Limited (Daiichi Sankyo). Our plan is to utilize our operating cash flows and cash and investments to expand the cabozantinib franchise by potentially adding new indications in areas of unmet medical need. We will also leverage our operating cash flows to continue advancing our diverse small molecule and biotherapeutics programs, exploring multiple modalities and mechanisms of action to discover new oncology drugs. Basis of Presentation The accompanying 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. We have adopted a 52- or 53-week fiscal year policy that ends on the Friday closest to December 31st. Fiscal year 2021, which was a 52-week fiscal year, ended on December 31, 2021, fiscal year 2020, which was a 52-week fiscal year, ended on January 1, 2021 and fiscal year 2019, which was a 53-week fiscal year, ended on January 3, 2020. For convenience, references in this report as of and for the fiscal years ended January 1, 2021 and January 3, 2020 are indicated as being as of and for the years ended December 31, 2020 and 2019, respectively. We have made reclassifications to our prior years’ Consolidated Financial Statements to conform to the current year’s presentation. These reclassifications did not impact previously reported total revenues, income from operations, net income, total assets, total liabilities, total operating, investing or financing cash flows or total stockholders’ equity. 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 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, we evaluate our significant estimates. 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. Recently Adopted Accounting Pronouncements On January 1, 2021, we adopted the Accounting Standards Board’s (FASB) Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740)-Simplifying the Accounting for Income Taxes (ASU 2019-12). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standards Codification (ASC) Topic 740, Income Taxes and clarifying and amending existing guidance. Our adoption of ASU 2019-12 did not have a significant impact on the accompanying Consolidated Financial Statements. Cash, Cash Equivalents, Restricted Cash Equivalents and Investments We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents include high-grade, short-term investments in money market funds, certificates of deposit and marketable debt securities which are subject to minimal credit and market risk. We designate all investments in marketable debt securities as available-for-sale and therefore, report such investments at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income. For securities sold prior to maturity, the cost of securities sold is based on the specific identification method. We include realized gains and losses on the sale of investments in other income, net in the accompanying Consolidated Statements of Income. We classify those investments that we do not require for use in current operations and that mature in more than 12 months as long-term investments in the accompanying Consolidated Balance Sheets. The classification of restricted cash equivalents as short-term or long-term is dependent upon the longer of the remaining term to maturity of the investment or the remaining term of the related restriction. Investment Impairment Quarterly, we assess each of our investments in available-for-sale debt securities whose fair value is below its cost basis to determine if the investment’s impairment is due to credit-related factors or noncredit-related factors. Factors considered in determining whether an impairment is credit-related include the extent to which the investment’s fair value is less than its cost basis, declines in published credit ratings, issuer default on interest or principal payments, and declines in the financial condition and near-term prospects of the issuer. If we determine a credit-related impairment exists, we will measure the credit loss based on a discounted cash flows model. Credit-related impairments on available-for-sale debt securities are recognized as an allowance for credit losses with a corresponding adjustment to other income, net in the accompanying Consolidated Statements of Income. The portion of the impairment that is not credit-related is recorded as a reduction of other comprehensive income (loss), net of applicable taxes. We have elected to exclude accrued interest from both the fair value and the amortized cost basis of the available-for-sale debt securities for the purposes of identifying and measuring an impairment. We write-off accrued interest as a reduction of interest income when an issuer has defaulted on interest payments due on a security. Fair Value Measurements We define fair value as the amounts that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risks. Forward Foreign Currency Contracts In January 2021, we initiated an operational hedging program and entered into forward contracts to hedge certain operational exposures for the changes in foreign currency exchange rates associated with assets or liabilities denominated in foreign currencies, primarily the Euro. As of December 31, 2021, we had one forward contract outstanding to sell €9.8 million. The forward contract with a maturity of three months is recorded at fair value and is included in prepaid expenses and other current assets in the Consolidated Balance Sheets. The unrealized loss on the forward contract is not material as of December 31, 2021. The forward contract is considered a Level 2 in the fair value hierarchy of our fair value measurements. For the year ended December 31, 2021, we recognized $0.8 million of net gains on the maturity of our forward contracts, which is included in other income (expense), net on our Consolidated Statements of Income. Foreign Currency Remeasurement Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured using exchange rates in effect at the end of the period and related gains or losses are recorded in other income, net in the accompanying Consolidated Statements of Income. Net foreign currency gains or losses were immaterial for the years ended December 31, 2021, 2020 and 2019, respectively. Accounts Receivable Trade receivables, net, contain amounts billed to our customers for product sales, and amounts billed to our collaboration partners for development, regulatory and sales-based milestone payments, royalties on the sale of licensed products, profit-sharing arrangements, development cost reimbursements, and payments for product supply services. Our customers are primarily pharmaceutical and biotechnology companies that are located in the U.S., and collaboration partners that are located in Europe and Japan. We record trade receivables net of allowances for credit losses and chargebacks, and cash discounts for prompt payment. We apply an aging method to estimate credit losses and consider our historical loss information, adjusted to account for current economic conditions, and reasonable and supportable forecasts of future economic conditions affecting our customers. We write off trade receivables and related allowances for credit losses when it becomes probable we will not collect the amount receivable. Write-offs for the years ended December 31, 2021 and 2020 have been insignificant. Inventory We value inventory at the lower of cost or net realizable value. We determine the cost of inventory using the standard-cost method, which approximates actual cost based on a first-in, first-out method. We analyze our inventory levels quarterly and write down inventory subject to expiry in excess of expected requirements, or that has a cost basis in excess of its expected net realizable value. These write downs are charged to either cost of goods sold or the cost of supplied product included in collaboration services revenues in the accompanying Consolidated Statements of Income. On a quarterly basis, we analyze our estimated production levels for the following twelve-month period, which is our normal operating cycle, and reclassify inventory we expect to use or sell in periods beyond the next twelve months into other long-term assets in the accompanying Consolidated Balance Sheets. Property and Equipment We record property and equipment at cost, net of depreciation. We compute depreciation using the straight-line method based on estimated useful lives of the assets, which ranges up to 15 years and depreciate leasehold improvements over the lesser of their estimated useful lives or the remainder of the lease term. We charge repairs and maintenance costs to expense as incurred. We periodically review property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We did not recognize impairment charges in any of the periods presented. Goodwill We recorded goodwill amounts as the excess of purchase price over identifiable net assets acquired based on their estimated fair value. We review the carrying amount of goodwill for impairment annually and whenever events or changes in circumstance indicate that the carrying value may not be recoverable. We perform our annual assessment of the recoverability of our goodwill as of the first day of our fourth quarter. The assessment of recoverability may first consider qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. We perform a quantitative assessment if the qualitative assessment results in a more-likely-than-not determination or if a qualitative assessment is not performed. The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded for the amount by which the carrying amount of a reporting unit exceeds its fair value, limited to the goodwill balance. We operate in one business segment, which is also considered to be our sole reporting unit and therefore, goodwill is tested for impairment at the enterprise level. We did not recognize any impairment charges in any of the periods presented. Long-Lived Assets The carrying value of our long-lived assets, which includes property and equipment, right-of-use assets and leasehold improvements, is reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Should there be an indication of impairment, we test for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset to the carrying amount of the asset or asset group. If the asset or asset group is determined to be impaired, any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss. Revenue We account for revenues under the guidance of ASU Topic 606, Revenues from Contracts with Customers (Topic 606). Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration to which the entity is entitled to in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of Topic 606, we perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. Net Product Revenues We sell our products principally to specialty distributors and specialty pharmacy providers, or collectively, our Customers. These Customers subsequently resell our products to health care providers and patients. In addition to distribution agreements with Customers, we enter into arrangements with health care providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of our products. Revenues from product sales are recognized when the Customer obtains control of our product, which occurs at a point in time, typically upon delivery to the Customer. Product Sales Discounts and Allowances We record revenues from product sales at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established primarily from discounts, chargebacks, rebates, co-pay assistance, returns and other allowances that are offered within contracts between us and our Customers, health care providers, payors and other indirect customers relating to the sales of our products. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the Customer) or a current liability (if the amount is payable to a party other than a Customer). Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted Customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of our contracts. The amount of variable consideration that is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenues and earnings in the period such variances become known. Chargebacks: Chargebacks are discounts that occur when contracted Customers purchase directly from a specialty distributor. Contracted Customers, which currently consist primarily of Public Health Service institutions, Federal government entities purchasing via the Federal Supply Schedule, Group Purchasing Organizations, and health maintenance organizations, generally purchase the product at a discounted price. The specialty distributor, in turn, charges back to us the difference between the price initially paid by the specialty distributor and the discounted price paid to the specialty distributor by the Customer. The allowance for chargebacks is based on actual chargebacks received and an estimate of sales to contracted Customers. Discounts for Prompt Payment: Our Customers in the U.S. receive a discount of 2% for prompt payment. We expect our Customers will earn 100% of their prompt payment discounts and, therefore, we deduct the full amount of these discounts from total product sales when revenues are recognized. Rebates: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program, other government programs and commercial contracts. Rebate amounts owed after the final dispensing of the product to a benefit plan participant are based upon contractual agreements or legal requirements with public sector benefit providers, such as Medicaid. The allowance for rebates is based on statutory or contractual discount rates and expected utilization. Our estimates for the expected utilization of rebates are based on Customer and payer data received from the specialty pharmacies and distributors and historical utilization rates. Rebates are generally invoiced by the payer and paid in arrears, such that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s shipments to our Customers, plus an accrual balance for known prior quarters’ unpaid rebates. If actual future rebates vary from estimates, we may need to adjust our accruals, which would affect net product revenues in the period of adjustment. Allowances for rebates also include amounts related to the Medicare Part D Coverage Gap Discount Program. In the U.S. during 2020, the Medicare Part D prescription drug benefit mandated participating manufacturers to fund 70% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients. Our estimates for expected Medicare Part D coverage gap amounts are based on Customer and payer data received from specialty pharmacies and distributors and historical utilization rates. Funding of the coverage gap is invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s shipments to Customer, plus an accrual balance for known prior quarters’ unpaid claims. If actual future funding varies from estimates, we may need to adjust our accruals, which would affect net product revenues in the period of adjustment. Co-payment Assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. We accrue a liability for co-payment assistance based on actual program participation and estimates of program redemption using Customer data provided by the specialty distributor that administers the copay program. Other Customer Credits: We pay fees to our Customers for account management, data management and other administrative services. To the extent the services received are distinct from the sale of products to the Customer, we classify these payments in selling, general and administrative expenses in our Consolidated Statements of Income. Collaboration Revenues We assess whether our collaboration agreements are subject to ASC Topic 808, Collaborative Arrangements (Topic 808) based on whether they involve joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards. To the extent that the arrangement falls within the scope of Topic 808, we apply by analogy the unit of account guidance under Topic 606 to identify distinct performance obligations, and then determine whether a customer relationship exists for each distinct performance obligation. If we determine a performance obligation within the arrangement is with a customer, we apply the guidance in Topic 606. If a portion of a distinct bundle of goods or services within an arrangement is not with a customer, then the unit of account is not within the scope of Topic 606, and the recognition and measurement of that unit of account shall be based on analogy to authoritative accounting literature or, if there is no appropriate analogy, a reasonable, rational, and consistently applied accounting policy election. We enter into collaboration arrangements, under which we license certain rights to our intellectual property to third parties. The terms of these arrangements typically include payments to us for one or more of the following: nonrefundable up-front license fees; development, regulatory and sales-based milestone payments; product supply services; development cost reimbursements; profit-sharing arrangements; and royalties on net sales of licensed products. As part of the accounting for these arrangements, we develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. These key assumptions may include forecasted revenues, clinical development timelines and costs, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. Up-front License Fees: If the license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from nonrefundable up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license, which generally occurs at or near the inception of the contract. For licenses that are bundled with other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenues from nonrefundable up-front fees. We evaluate the measure of progress at the end of each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. Regulatory and Development Milestone Payments: At the inception of each arrangement that includes development milestone payments, we evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until uncertainty associated with the approvals has been resolved. The transaction price is then allocated to each performance obligation, on a relative standalone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, we re-evaluate the probability of achieving such development and regulatory milestones and any related variable consideration constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis. Product Supply Services: Arrangements that include a promise for the future supply of drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as options. We assess if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. Development Cost Reimbursements: Our collaboration arrangements may include promises of future clinical development and drug safety services, as well as participation on certain joint committees. When such services are provided to a customer, and they are distinct from the licenses provided to our collaboration partners, these promises are accounted for as a separate performance obligation, which we estimate using internal development costs incurred and projections through the term of the arrangements. We record revenues for these services as the performance obligations are satisfied over time based on measure of progress. However, if we conclude that our collaboration partner is not a customer for those collaborative research and development activities, we present such payments as a reduction of research and development expenses. Profit-sharing Arrangements: Under the terms of our collaboration agreement with Genentech for cobimetinib, we are entitled to a share of U.S. profits and losses received in connection with the commercialization of cobimetinib. We account for this arrangement in accordance with Topic 606. We have determined that we are an agent under the agreement and therefore revenues are recorded net of costs incurred. We record revenues for the variable consideration associated with the profits and losses under the collaboration agreement when it is probable that a significant reversal in the amount of cumulative revenues recognized will not occur. Royalty and Sales-based Milestone Payments: For arrangements that include royalties and sales-based milestone payments, including milestone payments earned for the first commercial sale of a product, the license is deemed to be the predominant item to which such payments relate and we recognize revenues at the later of when the related sales occur or when the performance obligation to which the royalty has been allocated has been satisfied. Cost of Goods Sold Cost of goods sold is related to our product revenues and consists primarily of a 3% royalty we are required to pay on all net sales of any product incorporating cabozantinib, the cost of manufacturing, indirect labor costs, write-downs related to expiring and excess inventory, shipping and other third-party logistics and distribution costs for our product. We consider regulatory approval of product candidates to be uncertain and product manufactured prior to regulatory approval may not be sold unless regulatory approval is obtained. As such, the manufacturing costs for product candidates incurred prior to regulatory approval were not capitalized as inventory but are expensed as research and development costs. Research and Development Expenses Research and development expenses consist of (1) direct and indirect internal costs for drug discovery; (2) upfront license and project initiation fees, license option fees and option exercise fees, funded research and milestone payments incurred or probable to be incurred for our in-licensing arrangements with our collaboration partners for research programs in development and prior to regulatory approval; and (3) development costs associated with our clinical trial projects, which include fees paid to Contract Research Organizations (CRO) performing work on our behalf. Our clinical trial projects have been executed with support from third-party CROs, who specialize in conducting and managing global clinical trials. We accrue expenses for clinical trial activities performed by the CROs based upon the estimated amount of work completed on each trial. For clinical trial expenses, the significant factors used in estimating accruals include direct CRO costs, the number of patients enrolled, the number of active clinical sites involved, the duration for which the patients will be enrolled in the trial and patient out of pocket costs. We monitor patient enrollment levels and related activities to the extent possible through CRO meetings and correspondence, internal reviews and review of contractual terms. We base our estimates on the best information available at the time. However, additional information may become available to us which may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. As described further above, certain payments made to us from our collaboration partners may be presented as a reduction of research and development expense. Leases We determine if an arrangement includes a lease at the inception of the agreement. For each of our lease arrangements, we record a right-of-use asset representing our right to use an underlying asset for the lease term and a lease liability representing our obligation to make lease payments. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the net present value of lease payments over the lease term. In determining the discount rate used to calculate the net present value of lease payments, we use our incremental borrowing rate based on the information available at the lease commencement date. Our leases may include options to extend or terminate the lease which are included in the lease term when it is reasonably certain that we will exercise any such options. Lease expense for our operating leases is recognized on a straight-line basis over the lease term. We have elected not to apply the recognition requirements of ASU 2016-02, Leases (Topic 842) for short-term leases. Advertising Advertising expenses were $31.8 million, $25.1 million and $17.9 million for the years ended December 31, 2021, 2020 and 2019, respectively. We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses are recorded in selling, general and administrative expenses. Stock-Based Compensation We account for stock-based payments to employees, including grants of service-based restricted stock units (RSUs), performance-based restricted stock units (PSUs), service-based stock options and purchases under our 2000 Employee Stock Purchase Plan (ESPP) in accordance with ASC 718, Compensation-Stock Compensation, which requires that stock-based payments (to the extent they are compensatory) be recognized in our Consolidated Statements of Income based on their fair values. We account for forfeitures of stock-based awards as they occur. The expense for stock-based compensation is based on the grant date fair value of the award. The grant date fair value of RSUs and PSUs are estimated as the value of the underlying shares of our common stock. The grant date fair values are estimated using a Monte Carlo simulation pricing model for certain PSUs with market vesting conditions and a Black-Scholes Merton option pricing model for other stock options. Both option pricing models require the input of subjective assumptions. These variables include, but are not limited to, the expected volatility of our stock price and the expected term of the awards. We consider both implied and historical volatility when developing an estimate of expected volatility. We estimate the term using historical data. We recognize compensation expense over the requisite service period on an accelerated basis for awards with a market or performance condition and on a straight-line basis for service-based stock options and awards. Compensation expense related to PSUs is recognized when we determine that it is probable that the performance goals will be achieved, which we assess on a quarterly basis. Provision for Income Taxes Our provision for income taxes is computed under the asset and liability method. Significant estimates are required in determining our provision for income taxes. Some of these estimates are based on interpretations of existing tax laws or regulations. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (temporary differences) at enacted tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is established for deferred tax assets for which it is more likely than not that some portion or all of the deferred tax assets, including net operating losses and tax credits, will not be realized. We periodically re-assess the need for a valuation allowance against our deferred tax assets based on various factors including our historical earnings experience by taxing jurisdiction, and forecasts of future operating results and utilization of net operating losses and tax credits prior to their expiration. Significant judgment is required in making this assessment and, to the extent that a reversal of any portion of our valuation allowance against our deferred tax assets is deemed appropriate, a tax benefit will be recognized against our provision for income taxes in the period of such reversal. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination by the tax authorities based on the technical merits of the position. An adverse resolution of one or more of these uncertain tax positions in any period could have a material impact on the results of operations for that period. Recent Accounting Pronouncements Not Yet Adopted There were no new accounting pronouncements issued since our filing of the Annual Report on Form 10-K for the year ended December 31, 2020, which could have a significant effect on our Consolidated Financial Statements.

Revenues

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenues

REVENUES

Revenues consisted of the following (in thousands):


	Year Ended December 31,
		2021		2020		2019
Product revenues:
Gross product revenues		$	1,452,913	$	962,591	$	957,621
Discounts and allowances		(375,657)		(221,041)		(197,671)
Net product revenues		1,077,256		741,550		759,950
Collaboration revenues:
License revenues		249,956		167,295		165,914
Collaboration services revenues		107,758		78,693		41,911

Total collaboration revenues		357,714		245,988		207,825
Total revenues		$	1,434,970	$	987,538	$	967,775

Net product revenues and license revenues are recorded in accordance with ASC Topic 606, Revenue from Contracts with Customers (Topic 606). License revenues include the recognition of the portion of milestone payments 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 reversal of revenues would not occur, as well as royalty revenues and our share of profits under our collaboration agreement with Genentech. Collaboration services revenues were recorded in accordance with ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 and by analogy to Topic 606. Collaboration services revenues include the recognition of deferred revenues for the portion of upfront and milestone payments allocated to our research and development services performance obligations, development cost reimbursements earned under our collaboration agreements, product supply revenues, net of product supply costs, and the royalties we paid on sales of products containing cabozantinib by our collaboration partners. We received notification that, effective January 1, 2021, Royalty Pharma plc (Royalty Pharma) acquired from GlaxoSmithKline (GSK) all rights, title and interest in royalties on total net sales of any product containing cabozantinib for non-U.S. markets

for the full term of the royalty and for the U.S. market through September 2026, after which time U.S. royalties will revert back to GSK.

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


	Year Ended December 31,
		2021		2020		2019
CABOMETYX		$	1,054,050	$	718,687	$	733,421
COMETRIQ		23,206		22,863		26,529
Net product revenues		$	1,077,256	$	741,550	$	759,950

The percentage of total revenues by customer who individually accounted for 10% or more of our total revenues were as follows:


	Year Ended December 31,
	2021		2020		2019
Ipsen Pharma SAS	21	%	15	%	16	%
Affiliates of CVS Health Corporation	14	%	14	%	15	%
Affiliates of McKesson Corporation	14	%	12	%	12	%
Affiliates of AmerisourceBergen Corporation	14	%	11	%	11	%
Affiliates of Optum Specialty Pharmacy	8	%	11	%	13	%

As of December 31, 2021 and 2020, the percentage of trade receivables by customer who individually accounted for 10% or more of our trade receivables were as follows:


	December 31,
	2021		2020

Ipsen Pharma SAS	50	%	23	%
Affiliates of AmerisourceBergen Corporation	11	%	11	%

Affiliates of McKesson Corporation	10	%	12	%
Affiliates of CVS Health Corporation	9	%	11	%
Takeda Pharmaceutical Company Limited	2	%	10	%

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


	Year Ended December 31,
		2021		2020		2019
U.S.		$	1,089,396	$	752,890	$	770,244
Europe		302,073		151,631		152,771
Japan		43,501		83,017		44,760
Total revenues		$	1,434,970	$	987,538	$	967,775

Total revenues include net product revenues attributed to geographic regions based on ship-to location and license and collaboration services revenues attributed to geographic regions 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, Discounts for Prompt Payment and Other		Other Customer Credits/Fees and Co-pay Assistance		Rebates		Total
Balance at December 31, 2019	$	7,514	$	3,497	$	15,222	$	26,233
Provision related to sales made in:
Current period	146,537		16,162		58,049		220,748
Prior periods	33		(352)		612		293
Payments and customer credits issued	(144,231)		(16,028)		(56,479)		(216,738)
Balance at December 31, 2020	9,853		3,279		17,404		30,536
Provision related to sales made in:
Current period	243,119		30,728		100,361		374,208
Prior periods	(64)		(111)		1,624		1,449
Payments and customer credits issued	(238,283)		(25,021)		(94,564)		(357,868)
Balance at December 31, 2021	$	14,625	$	8,875	$	24,825	$	48,325

The allowance for chargebacks, discounts for prompt payment and other are recorded as a reduction of trade receivables, net, and the remaining reserves are recorded as rebates and fees due to customers in the accompanying Consolidated Balance Sheets.

Contract Assets and Liabilities

We receive payments from our collaboration partners based on billing schedules established in each contract. Amounts are recorded as accounts receivable when our right to consideration is unconditional. We may also recognize revenue in advance of the contractual billing schedule and such amounts are recorded as a contract asset when recognized. We may be required to defer recognition of revenue for upfront and milestone payments until we perform our obligations under these arrangements, and such amounts are recorded as deferred revenue upon receipt or when due. For those contracts that have multiple performance obligations, contract assets and liabilities are reported on a net basis at the contract level. Contract assets as of December 31, 2021 are primarily related to contract assets from Ipsen Pharma SAS (Ipsen) and contract liabilities as of December 31, 2021 are primarily related to deferred revenues from Takeda Pharmaceutical Company Limited (Takeda).

Contract assets and liabilities were as follows (in thousands):


	December 31,
	2021		2020
Contract assets(1)	$	1,665	$	—

Contract liabilities:
Current portion(2)	$	7,814	$	1,790
Long-term portion(3)	8,739		3,755
Total contract liabilities	$	16,553	$	5,545

____________________

(1) Presented in other long-term assets in the accompanying Consolidated Balance Sheets.

(2) Presented in other current liabilities in the accompanying Consolidated Balance Sheets.

(3) Presented in the long-term portion of deferred revenues in the accompanying Consolidated Balance Sheets.

During the years ended December 31, 2021, 2020 and 2019, we recognized $8.5 million, $9.2 million and $6.5 million, respectively, in revenues that were included in the beginning deferred revenues balance for those years.

During the years ended December 31, 2021, 2020 and 2019, we recognized $148.7 million, $169.7 million and $161.2 million, respectively, in revenues for performance obligations satisfied in previous periods. Such revenues were primarily related to milestone and royalty payments allocated to our license performance obligations for our collaborations with Ipsen Pharma SAS (Ipsen), Takeda, Daiichi Sankyo and Genentech.

As of December 31, 2021, $87.5 million of the combined transaction prices for our Ipsen and Takeda collaborations were allocated to performance obligations that had not yet been satisfied. See “Note 3. Collaboration Agreements— Cabozantinib Collaborations —Performance Obligations and Transaction Prices for our Ipsen and Takeda Collaborations” for additional information about the expected timing to satisfy these performance obligations.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

Collaboration Agreements And Business Development Activities

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaboration Agreements And Business Development Activities

COLLABORATION AGREEMENTS AND BUSINESS DEVELOPMENT ACTIVITIES

We have established multiple collaborations with leading biopharmaceutical companies for the commercialization and further development of our cabozantinib franchise. Additionally, we have made considerable progress under our existing research collaboration and in-licensing arrangements to further enhance our early-stage pipeline and expand our ability to discover, develop and commercialize novel therapies with the goal of providing new treatment options for cancer patients and their physicians. Historically, we also entered into other collaborations with leading biopharmaceutical companies pursuant to which we out-licensed other compounds and programs in our portfolio.

Under these collaborations, we are generally entitled to receive milestone and royalty payments, and for certain collaborations, to receive payments for product supply services, development cost reimbursements, and/or profit-sharing payments. See “Note 2. Revenues” for additional information on revenues recognized under our collaboration agreements during the years ended December 31, 2021, 2020 and 2019.

Cabozantinib Commercial Collaborations

Ipsen Collaboration

Description of the Collaboration

In February 2016, we entered into a collaboration agreement with Ipsen for the commercialization and further development of cabozantinib. Under the collaboration agreement, as amended, Ipsen received exclusive commercialization rights for current and potential future cabozantinib indications outside of the U.S. and Japan. We have also agreed to collaborate with Ipsen on the development of cabozantinib for current and potential future indications. The parties’ efforts are governed through a joint steering committee and appropriate subcommittees established to guide and oversee the collaboration’s operation and strategic direction; provided, however, that we retain final decision-making authority with respect to cabozantinib’s ongoing development.

During the second quarter of 2021, Ipsen opted into and is now co-funding the development costs for COSMIC-311, our phase 3 pivotal trial evaluating cabozantinib versus placebo in patients with RAI-refractory DTC who have progressed after up to two VEGF receptor-targeted therapies. Under the collaboration agreement, Ipsen is now obligated to reimburse us for their share of COSMIC-311 global development costs, as well as an additional payment calculated as a percentage of such costs, triggered by the timing of the exercise of its option. We determined that the decision to opt in and co-fund the development costs for COSMIC-311 represented a contract modification for additional distinct services at their standalone selling price and therefore was treated as a separate contract under Topic 606. Accordingly, collaboration services revenues for the year ended December 31, 2021, includes a cumulative catch-up of $43.2 million for Ipsen’s share of global development costs incurred since the beginning of the study and through the opt-in date.

Unless earlier terminated, the collaboration agreement has a term that continues, on a product-by-product and country-by-country basis, until the latter of (1) the expiration of patent claims related to cabozantinib, (2) the expiration of regulatory exclusivity covering cabozantinib or (3) ten years after the first commercial sale of cabozantinib, other than COMETRIQ. A related supply agreement will continue in effect until expiration or termination of the collaboration agreement. The collaboration agreement may be terminated for cause by either party based on uncured material breach of either the collaboration agreement or the supply agreement by the other party, bankruptcy of the other party or for safety

reasons. We may terminate the collaboration agreement if Ipsen challenges or opposes any patent covered by the collaboration agreement. Ipsen may terminate the collaboration agreement if the FDA or European Medicines Agency (EMA) orders or requires substantially all cabozantinib clinical trials to be terminated. Ipsen also has the right to terminate the collaboration agreement on a region-by-region basis after the first commercial sale of cabozantinib in advanced RCC in the given region. Upon termination by either party, all licenses granted by us to Ipsen will automatically terminate, and, except in the event of a termination by Ipsen for our material breach, the licenses granted by Ipsen to us shall survive such termination and shall automatically become worldwide, or, if Ipsen were to terminate only for a particular region, then for the terminated region. Following termination by us for Ipsen’s material breach, or termination by Ipsen without cause or because we undergo a change of control by a party engaged in a competing program, Ipsen is prohibited from competing with us for a period of time.

Consideration under the Collaboration

In consideration for the exclusive license and other rights contained in the collaboration agreement, including commercialization rights in Canada, we received aggregate upfront payments of $210.0 million from Ipsen in 2016. As of December 31, 2021, we have achieved aggregate milestones of $462.5 million related to regulatory, development and sales-based threshold by Ipsen since the inception of the collaboration agreement, including $112.5 million, $20.0 million and $55.0 million in milestones achieved during the years ended December 31, 2021, 2020 and 2019, respectively.

As of December 31, 2021, we are eligible to receive additional regulatory and development milestone payments from Ipsen totaling an aggregate of $46.5 million, as well as sales-based milestones, including milestone payments earned for the first commercial sale of a product, of up to $350.0 million and CAD$26.5 million. We excluded these milestones from the transaction price as of December 31, 2021 because we determined such payments to be fully constrained under Topic 606 due to the fact that it was not probable that a significant reversal of cumulative revenue would not occur, given the inherent uncertainty of success with these milestones. We will adjust the constraint applied to the variable consideration at each reporting period as uncertain events are resolved or other changes in circumstances occur. As of December 31, 2021, $44.2 million of the transaction price allocated to our research and development services performance obligation had not been satisfied. See “—Performance Obligations and Transaction Prices for our Ipsen and Takeda Collaborations”, below, for additional information related to the revenue recognition for this collaboration.

We also receive royalty revenues on the net sales of cabozantinib by Ipsen outside of the U.S. and Japan. During the year ended December 31, 2021 and going forward, we are entitled to receive a tiered royalty of 22% to 26% on annual net sales, with separate tiers for Canada; these royalty tiers reset each calendar year.

Any variable consideration related to royalties and sales-based milestones will be recognized when the related sales occur as these amounts have been determined to relate to the relevant transferred license and therefore are recognized as the related sales occur.

We are required to pay a 3% royalty on all net sales of any product incorporating cabozantinib, including net sales by Ipsen.

We are responsible for funding cabozantinib-related development costs for those trials in existence at the time we entered into the collaboration agreement with Ipsen; global development costs for additional trials are shared between the parties, with Ipsen reimbursing us for 35% of such costs, provided Ipsen chooses to opt into such trials. Ipsen has opted into and is co-funding certain clinical trials, including: CheckMate -9ER, COSMIC-021, COSMIC-311, COSMIC-312, CONTACT-01 and CONTACT-02.

We remain responsible for manufacturing and supply of cabozantinib for all development and commercialization activities under the collaboration agreement. Relatedly, we entered into a supply agreement with Ipsen to supply finished, labeled drug product to Ipsen for distribution in the territories outside of the U.S. and Japan for the term of the collaboration agreement. The product is supplied at our cost, as defined in the agreement.

Revenues from the Collaboration

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


	Year Ended December 31,
		2021		2020		2019
License revenues		$	207,982	$	93,495	$	117,360
Collaboration services revenues		94,091		58,136		35,411
Total		$	302,073	$	151,631	$	152,771

Milestone revenues for the year ended December 31, 2021 included $100.0 million related to a commercial sales milestone from Ipsen upon their achievement of $400.0 million of net sales of cabozantinib in the related Ipsen license territory over four consecutive quarters and a $12.5 million regulatory milestone achieved upon submission of a variation application to the EMA for CABOMETYX as a treatment for patients with previously treated RAI-refractory DTC.

Takeda Collaboration

Description of the Collaboration

In January 2017, we entered into a collaboration and license agreement with Takeda, which was subsequently amended effective March 2018, May 2019 and September 2020, to, among other things, modify the amount of reimbursements we receive, for costs associated with our required pharmacovigilance activities and milestones we are eligible to receive, as well as modify certain cost-sharing obligations related to the Japan-specific development costs associated with CONTACT-01 and CONTACT-02. We determined the amendment in September 2020 represented a contract modification that was treated as a termination of an existing contract and the creation of a new contract under Topic 606. As a result, we allocated the remaining transaction price to the performance obligations identified in the contract. The two remaining performance obligations are the research and development services associated with committed studies and the research and development services associated with CONTACT-01, CONTACT-02, and certain cohorts of COSMIC-021 studies. In allocating the transaction price for the modified contract we estimated the standalone selling price for the performance obligations. We utilized development costs incurred for these obligations in process and the projections of costs through the term of the arrangement. Revenue is recognized when, or as, we satisfy our performance obligations by transferring the promised services to Takeda. Revenue is being recognized using the cost proportional performance method, based on costs incurred to perform the research and development services, since the level of costs incurred over time is thought to best reflect the transfer of services to Takeda.

Takeda is responsible for a portion of the costs associated with the cabozantinib development plan’s current and future trials, provided Takeda opts into such trials, and 100% of costs associated with the cabozantinib development activities that are exclusively for the benefit of Japan. Takeda has opted into and is co-funding CheckMate -9ER, certain cohorts of COSMIC-021, CONTACT-01 and CONTACT-02. Under the collaboration agreement, as amended, 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. The operation and strategic direction of the parties’ collaboration is governed through a joint executive committee and appropriate subcommittees.

Unless earlier terminated, the collaboration agreement has a term that continues, on a product-by-product basis, until the earlier of (1) two years after first generic entry with respect to such product in Japan or (2) the later of (A) the expiration of patent claims related to cabozantinib and (B) the expiration of regulatory exclusivity covering cabozantinib in Japan. The collaboration agreement may be terminated for cause by either party based on uncured material breach by the other party, bankruptcy of the other party or for safety reasons. For clarity, Takeda’s failure to achieve specified levels of commercial performance, based upon sales volume and/or promotional effort, during the first six years of the collaboration will constitute a material breach of the collaboration agreement. We may terminate the agreement if Takeda challenges or opposes any patent covered by the collaboration agreement. After the commercial launch of cabozantinib in Japan, Takeda may terminate the collaboration agreement upon twelve months’ prior written notice following the third anniversary of the first commercial sale of cabozantinib in Japan. Upon termination by either party, all licenses granted by us to Takeda will automatically terminate, and the licenses granted by Takeda to us shall survive such termination and shall automatically become worldwide.

Consideration under the Collaboration

In consideration for the exclusive license and other rights contained in the collaboration agreement, we received an upfront payment of $50.0 million from Takeda in 2017. As of December 31, 2021, we have also achieved regulatory and development milestones in the aggregate of $127.0 million since the inception of the collaboration agreement, including $35.0 million, $66.0 million and $16.0 million in milestones achieved during the years ended December 31, 2021, 2020 and 2019, respectively.

Under the collaboration agreement, as amended in 2020, we are eligible to receive additional regulatory and development milestone payments, without contractual limit, for additional potential future indications. We are further eligible to receive commercial milestones, including milestone payments earned for the first commercial sale of a product, of up to $119.0 million. We excluded these milestones from the transaction price as of December 31, 2021 because we determined such payments to be fully constrained under Topic 606 due to the fact that it was not probable that a significant reversal of cumulative revenue would not occur, given the inherent uncertainty of success with these milestones. We will adjust the constraint applied to the variable consideration at each reporting period as uncertain events are resolved or other changes in circumstances occur.

We also receive royalty revenues on the net sales of cabozantinib in Japan. We are entitled to receive a tiered royalty of 15% to 24% on the initial $300.0 million of net sales, and following this initial $300.0 million of net sales, we are then entitled to receive a tiered royalty of 20% to 30% on annual net sales thereafter; these 20% to 30% royalty tiers reset each calendar year. Any variable consideration related to royalties and sales-based milestones will be recognized when the related sales occur as these amounts have been determined to relate to the relevant transferred license and therefore are recognized as the related sales occur.

We are required to pay a 3% royalty on all net sales of any product incorporating cabozantinib, including net sales by Takeda.

Under the collaboration agreement, we are responsible for the manufacturing and supply of cabozantinib for all development and commercialization activities under the collaboration agreement. Additionally, we entered into a clinical supply agreement covering the supply of cabozantinib to Takeda for the term of the collaboration agreement, as well as a quality agreement that provides respective quality responsibilities for the aforementioned supply. Furthermore, at the time we entered into the collaboration agreement, the parties also entered into a safety data exchange agreement, which defines each partner’s responsibility for safety reporting. This agreement also requires us to maintain the global safety database for cabozantinib. To meet our obligations to regulatory authorities for the reporting of safety data from Japan from sources other than our sponsored global clinical development trials, we rely on data collected and reported to us by Takeda.

Revenues from the Collaboration

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


	Year Ended December 31,
		2021		2020		2019
License revenues		$	26,058	$	61,115	$	18,112
Collaboration services revenues		13,667		20,557		6,510
Total collaboration revenues		$	39,725	$	81,672	$	24,622

Milestone revenues for the year ended December 31, 2021 included $18.9 million recognized in connection with a $20.0 million milestone we achieved upon Takeda’s first commercial sale in Japan of CABOMETYX in combination with OPDIVO for the treatment of patients with unresectable, advanced or metastatic RCC.

As of December 31, 2021, $43.3 million of the transaction price was allocated to our research and development services performance obligations that have not yet been satisfied.

Performance Obligations and Transaction Prices for our Ipsen and Takeda Collaborations

We identified two performance obligations for the Ipsen collaboration agreement: (1) the transfer of an exclusive license for the commercialization and further development of cabozantinib; and (2) research and development services,

which includes certain committed studies for the development of cabozantinib, pharmacovigilance services and participation on various joint committees (as defined in the specific collaboration agreements).

We identified two remaining performance obligations for the Takeda collaboration agreement due to the amendment in September 2020: (1) research and development services, which includes certain committed studies for the development of cabozantinib, pharmacovigilance services and participation on various joint committees (as defined in the specific collaboration agreements) and (2) the research and development services associated with CONTACT-01, CONTACT-02, and certain cohorts of COSMIC-021 studies. As part of the original contract, we had a performance obligation associated with the exclusive license for the commercialization and further development of cabozantinib, which was transferred in 2017.

We have allocated the transaction price for each of these collaborations to the identified performance obligations based on our best estimate of their relative standalone selling price. For the licenses, the estimate of the relative standalone selling price was determined using a discounted cash flow valuation utilizing forecasted revenues and costs. For research and development services the estimate of the relative standalone selling price was determined using an adjusted market assessment approach that relies on internal and external costs and market factors.

The portion of the transaction price allocated to our license performance obligation is recorded immediately as our license represents functional intellectual property that was transferred at a point in time. The portion of the transaction price allocated to our research and development services performance obligation is being recognized as revenue using the inputs method based on our internal development projected cost estimates through the current estimated patent expiration of cabozantinib in the European Union for the Ipsen Collaboration and Japan for the Takeda Collaboration, both of which are early 2030.

We adjust the constraint applied to the variable consideration for the collaboration agreements in each reporting period as uncertain events are resolved or other changes in circumstances occur and we allocate those changes in the transaction price between our performance obligations. During the years ended December 31, 2021, 2020 and 2019, the transaction price of the Ipsen and Takeda collaboration agreements increased as a result of the achievement of various milestones, and the reimbursements of research and development services related to committed and opt-in studies. We further updated the transaction price based upon the actual research and development services performed during the period and changes in our estimated reimbursements for our future research and development services. The portion of the increase in transaction price that was allocated to the previously satisfied performance obligations for the transfer of an intellectual property license was recognized during the period and the portion allocated to research and development services will be recognized in future periods as those services are delivered through early 2030. As of December 31, 2021, variable consideration related to the remaining unearned regulatory and development milestones for both agreements remained constrained due to the fact that it was not probable that a significant reversal of cumulative revenue would not occur.

Cabozantinib Development Collaborations

BMS

In February 2017, we entered into a clinical trial collaboration agreement with BMS for the purpose of exploring the therapeutic potential of cabozantinib in combination with BMS’s immune checkpoint inhibitors (ICIs), nivolumab and/or ipilimumab, to treat a variety of types of cancer. As part of the collaboration, we are evaluating the triplet combination of cabozantinib, nivolumab and ipilimumab as a treatment option for RCC in the COSMIC-313 trial. Under the collaboration agreement with BMS, we may also evaluate these combinations in other phase 3 pivotal trials in various other tumor types.

Under the collaboration agreement with BMS, as subsequently amended effective March 2019, May 2019 and November 2019, each party granted to the other a non-exclusive, worldwide (within the collaboration territory as defined in the collaboration agreement and its supplemental agreements), non-transferable, royalty-free license to use the other party’s compounds in the conduct of each clinical trial. The parties’ efforts are governed through a joint development committee established to guide and oversee the collaboration’s operation. Each trial is conducted under a combination Investigational New Drug application, unless otherwise required by a regulatory authority. Each party is responsible for supplying finished drug product for the applicable clinical trial, and responsibility for the payment of costs for each such trial will be determined on a trial-by-trial basis. Unless earlier terminated, the collaboration agreement will remain in effect until the completion of all clinical trials under the collaboration, all related trial data has been delivered to both parties and the completion of any then agreed upon analysis. The collaboration agreement may be terminated for cause by either party

based on uncured material breach by the other party, bankruptcy of the other party or for safety reasons. Upon termination by either party, the licenses granted to each party to conduct a combined therapy trial will terminate.

F. Hoffmann-La Roche Ltd. (Roche) Collaboration

In February 2017, we entered into a master clinical supply agreement with Roche for the purpose of evaluating cabozantinib and Roche’s ICI, atezolizumab, in locally advanced or metastatic solid tumors. Under this agreement with Roche, in June 2017, we initiated COSMIC-021, a phase 1b dose escalation study that is evaluating the safety and tolerability of cabozantinib in combination with Roche’s atezolizumab in patients with locally advanced or metastatic solid tumors, and in December 2018, we initiated COSMIC-312, a multicenter, randomized, controlled phase 3 pivotal trial evaluating cabozantinib in combination with atezolizumab versus sorafenib in previously untreated advanced HCC. We are the sponsor of both trials, and Roche is providing atezolizumab free of charge.

In December 2019, we entered into a joint clinical research agreement with Roche for the purpose of further evaluating the combination of cabozantinib with atezolizumab in patients with locally advanced or metastatic solid tumors, including in the phase 3 pivotal clinical trials in advanced non-small cell lung cancer (CONTACT-01), metastatic castration-resistant prostate cancer (CONTACT-02) and RCC (CONTACT-03). If a party to the joint clinical research agreement proposes any additional combined therapy trials beyond these phase 3 pivotal trials, the joint clinical research agreement provides that such proposing party must notify the other party and that if agreed to, any such additional combined therapy trial will become part of the collaboration, or if not agreed to, the proposing party may conduct such additional combined therapy trial independently, subject to specified restrictions set forth in the joint clinical research agreement.

In July 2020, a supplement to the joint clinical research agreement was signed amongst us, Roche and Takeda due to Takeda opting into fund the combined therapy trial of CONTACT-01 sponsored by Roche. Chugai was added as an affiliate of Roche. All parties including Chugai conduct combined therapy trials in Japan upon the terms of the joint clinical research agreement.

Under the joint clinical research agreement, each party granted to the other a non-exclusive, worldwide (excluding, in our case, territory already the subject of a license by us to Takeda), non-transferable, royalty-free license, with a right to sublicense (subject to limitations), to use the other party’s intellectual property and compounds solely as necessary for the party to perform its obligations under the joint clinical research agreement. The parties’ efforts will be governed through a joint steering committee established to guide and oversee the collaboration and the conduct of the combined therapy trials. Each party will be responsible for providing clinical supply of their drug for all combined therapy trials, and the cost of the supply will be borne by such party. The clinical trial expenses for each combined therapy trial agreed to be conducted jointly under the joint clinical research agreement will be shared equally between the parties, and the clinical trial expenses for each additional combined therapy trial not agreed to be conducted jointly under the joint clinical research agreement will be borne by the proposing party, except that the cost of clinical supply for all combined therapy trials will be borne by the party that owns the applicable product.

We determined the contract is within the scope of Topic 808 as it involves joint operating activities where both parties have active participation in the arrangement and are exposed to significant risks and rewards. Payments between us and Roche under this arrangement are not subject to other accounting literature. Payments due to Roche for our share of clinical trial costs incurred by Roche will be recorded as research and development expense and payments due from Roche for their share of clinical trial costs incurred by us will be recorded as a reduction of research and development expense.

Unless earlier terminated, the joint clinical research agreement provides that it will remain in effect until the completion of all combined therapy trials under the collaboration, the delivery of all related trial data to both parties, and the completion of any then agreed-upon additional analyses. The joint clinical research agreement may be terminated for cause by either party based on any uncured material breach by the other party, bankruptcy of the other party or for safety reasons. Upon termination by either party, the licenses granted to each party will terminate upon completion of any ongoing activities under the joint clinical research agreement.

GSK and Royalty Pharma

In October 2002, we established a product development and commercialization collaboration agreement with GSK, that required us to pay a 3% royalty to GSK on the total worldwide net sales of any product incorporating cabozantinib by us and our collaboration partners. As disclosed in Note 2, we received notification that, effective January 1, 2021, Royalty Pharma acquired from GSK all rights, title and interest in royalties on total net sales of any product containing cabozantinib for non-U.S. markets for the full term of the royalty and for U.S. market through September 2026, after which time U.S. royalties will revert back to GSK. Royalty revenues earned by GSK and Royalty Pharma in connection with our sales of cabozantinib are included in cost of goods sold and as a reduction of collaboration services revenues for sales by our collaboration partners. Such royalty revenues were $46.6 million, $32.7 million and $31.3 million during the years ended December 31, 2021, 2020 and 2019, respectively.

Other Collaborations

Genentech Collaboration

We have out-licensed to Genentech under a worldwide collaboration agreement, the development and commercialization of cobimetinib, under the brand name COTELLIC. The terms of the collaboration agreement require that we share in the profits and losses received or incurred in connection with the commercialization of COTELLIC in the U.S. In addition to our profit share in the U.S., we are entitled to low double-digit royalties on net sales of COTELLIC outside the U.S.

During the years ended December 31, 2021, 2020, and 2019, we recognized $12.1 million, $11.3 million, and $10.3 million, in revenues from profits and losses on U.S commercialization and royalties on ex-U.S. sales under the collaboration agreement with Genentech and are included within license revenues on our Consolidated Statements of Income.

Daiichi Sankyo

We have granted to Daiichi Sankyo an exclusive, worldwide license to certain intellectual property primarily relating to compounds that modulate MR, including esaxerenone, an oral, non-steroidal, selective MR antagonist. In January 2019, the Japanese Ministry of Health, Labour and Welfare approved esaxerenone, under the brand name MINNEBRO, as a treatment for patients with hypertension.

We have achieved milestones of $20.0 million for the year ended December 31, 2019 for the first commercial sale of MINNEBRO and are eligible to receive additional sales-based milestone payments of up to $90.0 million under this collaboration agreement. In addition, we are entitled to receive low double-digit royalties on sales of MINNEBRO.

License revenue under the collaboration agreement with Daiichi Sankyo was $3.8 million, $1.3 million and $20.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Research Collaborations, In-Licensing Arrangements and Other Business Development Activities

We entered into collaborative arrangements with other pharmaceutical or biotechnology companies to develop and commercialize drug candidates or intellectual property. Our research collaborations and in-licensing arrangements are intended to enhance our early-stage pipeline and expand our ability to discover, develop and commercialize novel therapies with the goal of providing new treatment options for cancer patients and their physicians. Our research collaborations, in-licensing arrangements and other strategic transactions include upfront payments, development, regulatory, commercial milestone payments and royalty payments, contingent upon the occurrence of certain future events linked to the success of the asset in development. Certain of our research collaborations provide us exclusive options that give us the right to license programs developed under the research collaborations for further discovery and development. When we decide to exercise the options, we are required to pay an exercise fee and then assume the responsibilities for all subsequent clinical development, manufacturing and commercialization. In conjunction with each of these collaborative in-licensing arrangements, we were subject to upfront payments and will make payments for potential future development milestones of up to $254.3 million, regulatory milestones of up to $426.5 million and commercial milestones of up to $1,911.5 million, each in the aggregate per product or target, as well as royalties on future net product sales. In conjunction with an asset purchase agreement, we made payments of $10.0 million for the initial technology transfer, and subject to certain conditions, will make a $4.0 million payment upon the completion of the technology transfer of certain materials and documents specified in the asset purchase agreement. We will also make payments for potential future development milestones of up to $42.0 million and regulatory milestones of up to $22.5 million, per product.

In December 2021, we amended our collaboration agreement with Iconic to acquire broad rights to use the anti-TF antibody used in XB002 for any application, including conjugated to other payloads, as well as rights within oncology to a number of other anti-TF antibodies developed by Iconic, including for use in ADCs and multispecific biotherapeutics. Under the amended agreement, we agreed to pay a final one-time payment to Iconic of $55.0 million and will not owe any further payments, but we will continue to be responsible for milestone payments and royalties owed to other companies pursuant to prior agreements between Iconic and those companies. Upon signing the amendment, we recognized $55.0 million in research and development expense, which amount was payable as of December 31, 2021 and presented in accrued collaboration liabilities in our Consolidated Balance Sheets.

During the years ended December 31, 2021, 2020, and 2019, we recognized $176.1 million, $96.4 million and $47.7 million, respectively, relating to upfront license payments, research and development funding, development milestones, option fees and other fees within research and development expenses on the Consolidated Statements of Income.

Cash and Investments

12 Months Ended

Dec. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Cash and Investments

CASH AND INVESTMENTS

Cash, Cash Equivalents and Restricted Cash Equivalents

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


	December 31,
	2021		2020
Cash and cash equivalents	$	647,169	$	319,217

Restricted cash equivalents included in other long-term assets	16,722		1,555
Cash, cash equivalents, and restricted cash equivalents as reported within the accompanying Consolidated Statements of Cash Flows	$	663,891	$	320,772

Restricted cash equivalents are used to collateralize letters of credit and consist of money-market funds and certificates of deposit with original maturities of 90 days or less. The restricted cash equivalents are classified as other long-term assets based upon the remaining term of the underlying restriction. As of December 31, 2021, restricted cash equivalents included $15.2 million of short-term investments, which is collateral under our January 2021 standby letter of credit to guarantee our obligation to fund a portion of the total tenant improvements related to our build-to-suit lease at our corporate campus. As we fund these tenant improvements, our restricted cash becomes available for operations.

Cash, cash equivalents, restricted cash equivalents and investment

Cash, cash equivalents, restricted cash equivalents and investments consisted of the following (in thousands):


	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Debt securities available-for-sale:
Commercial paper	$	945,801	$	42	$	(2)	$	945,841
Corporate bonds	541,774		876		(1,672)		540,978
U.S. Treasury and government-sponsored enterprises	33,965		1		(21)		33,945
Municipal bonds	12,924		15		(35)		12,904
Total debt securities available-for-sale	1,534,464		934		(1,730)		1,533,668
Cash	135,653		—		—		135,653
Money market funds	66,531		—		—		66,531
Certificates of deposit	119,056		—		—		119,056
Total cash, cash equivalents, restricted cash equivalents and investments	$	1,855,704	$	934	$	(1,730)	$	1,854,908


	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Debt securities available-for-sale:
Commercial paper	$	569,456	$	372	$	—	$	569,828
Corporate bonds	543,520		5,244		(7)		548,757
U.S. Treasury and government-sponsored enterprises	208,326		232		(4)		208,554
Municipal Bonds	28,680		83		(1)		28,762
Total debt securities available-for-sale	1,349,982		5,931		(12)		1,355,901
Cash	82,176		—		—		82,176
Money market funds	40,761		—		—		40,761
Certificates of deposit	60,004		—		—		60,004
Total cash, cash equivalents, restricted cash equivalents and investments	$	1,532,923	$	5,931	$	(12)	$	1,538,842

Interest receivable was $2.9 million and $4.5 million as of December 31, 2021 and 2020, respectively, and is included in prepaid and other current assets in the accompanying Consolidated Balance Sheets.

Realized gains and losses on the sales of investments were insignificant during the years ended December 31, 2021, 2020 and 2019.

We manage credit risk associated with our investment portfolio through our investment policy, which limits purchases to high-quality issuers and limits the amount of our portfolio that can be invested in a single issuer. The fair value and gross unrealized losses on debt securities available-for-sale in an unrealized loss position were as follows (in thousands):


	December 31, 2021
	Fair Value		Gross Unrealized Losses
Corporate bonds	$	385,053	$	(1,672)
Commercial paper	43,290		(2)
U.S. Treasury and government-sponsored enterprises	18,962		(21)
Municipal bonds	7,475		(35)
Total	$	454,780	$	(1,730)


	December 31, 2020

	Fair Value		Gross Unrealized Losses
Corporate bonds	$	28,445	$	(7)
U.S. Treasury and government-sponsored enterprises	21,989		(4)
Municipal bonds	5,865		(1)

Total	$	56,299	$	(12)

All securities presented have been in an unrealized loss position for less than 12 months. There were 133 and 14 debt securities in an unrealized loss position as of December 31, 2021 and 2020, respectively. During the years ended December 31, 2021 and 2020, we did not record an allowance for credit losses or other impairment charges on our investment 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 and market liquidity. Based on the scheduled maturities of our investments, we determined 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.

The fair value of debt securities available-for-sale by contractual maturity was as follows (in thousands):


	December 31,
	2021		2020
Maturing in one year or less	$	1,168,256	$	1,034,150
Maturing after one year through five years	365,412		321,751
Total debt securities available-for-sale	$	1,533,668	$	1,355,901

Fair Value Measurements

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

Fair value reflects the amounts that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy has the following three levels:

•Level 1 - quoted prices (unadjusted) in active markets for identical assets and liabilities;

•Level 2 - inputs other than level 1 that are observable either directly or indirectly, such as quoted prices in active markets for similar instruments or on industry models using data inputs, such as interest rates and prices that can be directly observed or corroborated in active markets; and

•Level 3 - unobservable inputs that are supported by little or no market activity that are significant to the fair value measurement.

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


	December 31, 2021
	Level 1		Level 2		Total
Commercial paper	$	—	$	945,841	$	945,841
Corporate bonds	—		540,978		540,978
U.S. Treasury and government-sponsored enterprises	—		33,945		33,945
Municipal bonds	—		12,904		12,904
Total debt securities available-for-sale	—		1,533,668		1,533,668
Money market funds	66,531		—		66,531
Certificates of deposit	—		119,056		119,056
Total financial assets carried at fair value	$	66,531	$	1,652,724	$	1,719,255


	December 31, 2020
	Level 1		Level 2		Total
Commercial paper	$	—	$	569,828	$	569,828
Corporate bonds	—		548,757		548,757
U.S. Treasury and government-sponsored enterprises	—		208,554		208,554
Municipal bonds	—		28,762		28,762
Total debt securities available-for-sale	—		1,355,901		1,355,901
Money market funds	40,761		—		40,761
Certificates of deposit	—		60,004		60,004
Total financial assets carried at fair value	$	40,761	$	1,415,905	$	1,456,666

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.

The carrying amount of our remaining financial assets and liabilities, which include cash, receivables and payables, approximate their fair values due to their short-term nature.

- 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

Inventory

12 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

Inventory

INVENTORY

Inventory consisted of the following (in thousands):


	December 31,
	2021		2020
Raw materials	$	8,867	$	7,773
Work in process	27,717		20,610
Finished goods	12,927		7,291
Total	$	49,511	$	35,674

Balance Sheet classification:
Current portion included in inventory	$	27,493	$	20,973
Long-term portion included in other long-term assets	22,018		14,701
Total	$	49,511	$	35,674

Property and Equipment

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Property and Equipment

PROPERTY AND EQUIPMENT

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


	Estimated Useful Lives	December 31,
		2021		2020
Leasehold improvements	up to 15 years	$	73,589	$	40,694
Computer equipment and software	3 years	14,877		18,376

Furniture and fixtures	7 years	15,780		14,931
Laboratory equipment	5 years	23,744		11,707
Construction in progress		16,872		16,360
Total property and equipment		144,862		102,068
Less: accumulated depreciation		(40,831)		(34,684)
Total property and equipment, net		$	104,031	$	67,384

Depreciation expense was $13.6 million, $9.1 million and $8.3 million during the years ended December 31, 2021, 2020 and 2019, respectively.

Employee Benefit Plans

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Employee Benefit Plans

EMPLOYEE BENEFIT PLANS

Equity Incentive Plans and ESPP

We allocated the stock-based compensation expense for our equity incentive plans and our ESPP as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
Research and development	$	46,654	$	37,198	$	19,374
Selling, general and administrative	73,166		67,872		37,228
Total stock-based compensation expense	$	119,820	$	105,070	$	56,602


	Year Ended December 31,
	2021		2020		2019
Stock options	$	19,048	$	19,863	$	23,422
Restricted stock units	53,629		35,675		26,056
Performance stock units	43,428		47,106		4,878
ESPP	3,715		2,426		2,246
Total stock-based compensation expense	$	119,820	$	105,070	$	56,602

We have several equity incentive plans under which we granted stock options and RSUs, including PSUs, to employees and directors. At December 31, 2021, 11,004,584 shares were available for grant under the Exelixis, Inc. 2017 Equity Incentive Plan (as amended and restated, the 2017 Plan). The share reserve is reduced by 1 share for each share issued pursuant to a stock option award and 1.5 shares for full value awards granted in the form of RSUs or PSUs. On May 20, 2020, at our 2020 Annual Meeting of Stockholders, our stockholders approved the amendment and restatement of the 2017 Plan. The amendment and restatement increased the share reserve under the 2017 Plan by 21,000,000 shares, subject to adjustment for certain changes in our capitalization, which became effective immediately upon stockholder approval.

The Board of Directors delegated responsibility for administration of our equity incentive plans to the Compensation Committee of our Board of Directors, including the authority to determine the term, exercise price and vesting requirements of each grant. Stock options granted to our employees and directors generally have a four-year vesting term and a one-year vesting term, respectively, an exercise price equal to the fair market value on the date of grant, and a seven-year life from the date of grant. RSUs granted to our employees and directors generally have a four-year vesting term and a one-year vesting term, respectively. PSUs granted pursuant to our equity incentive plans vest upon specified service conditions and the achievement of a performance target or market condition.

We have adopted a Change in Control and Severance Benefit Plan for certain executive officers. Eligible Change in Control and Severance Benefit Plan participants include employees with the title of vice president and above. If a participant’s employment is terminated without cause during a period commencing one month before and ending thirteen months following a change in control, as defined in the plan document, then the Change in Control and Severance Benefit Plan participant is entitled to have the vesting of all their outstanding equity awards accelerated and the exercise period for their stock options extended to no more than one year.

We have an ESPP that allows for qualified employees (as defined in the ESPP) to purchase shares of our common stock at a price equal to the lower of 85% of the closing price at the beginning of the offering period or 85% of the closing price at the end of each six-month purchase period. As of December 31, 2021, we had 3,168,354 shares available for issuance under our ESPP. Pursuant to the ESPP, we issued 536,226, 534,419 and 483,009 shares of common stock at an average price per share of $17.76, $14.55 and $12.60 during the years ended December 31, 2021, 2020 and 2019, respectively. Cash received from purchases under the ESPP for the years ended December 31, 2021, 2020 and 2019 was $9.5 million, $7.8 million and $6.1 million, respectively.

We used a Black-Scholes Merton option pricing model to value stock options and ESPP purchases. The weighted average grant-date fair value per share of stock options and ESPP purchases were as follows:


	Year Ended December 31,
	2021		2020		2019
Stock options	$	9.04	$	9.44	$	8.19
ESPP	$	6.12	$	6.12	$	4.85

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


	Year Ended December 31,
	2021		2020		2019
Stock options:
Risk-free interest rate	0.74	%	0.30	%	1.77	%
Dividend yield	—	%	—	%	—	%
Volatility	51	%	54	%	48	%
Expected life	4.6 years		4.4 years		4.3 years
ESPP:
Risk-free interest rate	0.08	%	0.79	%	2.16	%
Dividend yield	—	%	—	%	—	%
Volatility	47	%	52	%	50	%
Expected life	6 months		6 months		6 months

We considered both implied and historical volatility in developing our estimate of expected volatility. The assumption for the expected life of stock options is 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, including PSUs, was based on the closing price of the underlying common stock on the date of grant.

Activity for stock options during the year ended December 31, 2021 was as follows (in thousands, except per share amounts):


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Stock options outstanding at December 31, 2020	16,129	$	12.72
Granted	2,573	$	21.33
Exercised	(4,486)	$	4.23
Cancelled	(545)	$	21.15
Stock options outstanding at December 31, 2021	13,671	$	16.79	3.3 years	$	48,860
Stock options exercisable at December 31, 2021	9,962	$	15.23	2.4 years	$	48,171

As of December 31, 2021, there was $27.8 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 2.7 years.

The aggregate intrinsic value in the table above represents the total intrinsic value (the difference between our closing stock price on the last trading day of fiscal 2021 and the exercise prices, multiplied by the number of in-the-money stock options) that would have been received by the stock option holders had all stock option holders exercised their stock options on December 31, 2021. The total intrinsic value of stock options exercised during the years ended December 31, 2021, 2020 and 2019 was $76.0 million, $106.5 million and $54.1 million, respectively. Cash received from stock option exercises during the years ended December 31, 2021, 2020 and 2019 was $14.8 million, $26.9 million and $16.4 million, respectively.

Activity for RSUs during the year ended December 31, 2021 was as follows (in thousands, except per share amounts):


	Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
RSUs outstanding at December 31, 2020	5,378	$	21.96
Awarded	4,220	$	21.34
Vested and released	(2,020)	$	22.03
Forfeited	(750)	$	21.69
RSUs outstanding at December 31, 2021	6,828	$	21.58	1.7 years	$	124,824

As of December 31, 2021, there was $123.6 million of unrecognized compensation expense related to our unvested RSUs which will be recognized over a weighted-average period of 2.9 years.

Activity for PSUs, during the year ended December 31, 2021 was as follows (in thousands, except per share amounts):


	Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
PSUs outstanding at December 31, 2020	7,378	$	21.70
Awarded	2,056	$	24.54
Vested and released	(2,388)	$	19.76
Forfeited	(736)	$	22.57
PSUs outstanding at December 31, 2021	6,310	$	23.00	3.0 years	$	98,121

In March 2021, in connection with our long-term incentive compensation program, we awarded certain employees 1,027,650 (the 2021 target amount) PSUs, subject to a performance and a market condition (the 2021 PSUs). Pursuant to the terms of 2021 PSUs, the holders of the awards may earn up to 200% of the 2021 target amount, or up to 2,055,300 total shares, depending on the level of achievement of the performance condition related to certain net product revenues and a total shareholder return (TSR) market condition. The TSR market condition is based on our relative TSR percentile rank compared to companies in the Nasdaq Biotechnology Index during the performance period, which is January 2, 2021 through December 29, 2023. Fifty percent of the shares earned subject to the performance and market conditions will vest at the end of the performance period and the remainder will vest approximately one year later subject to an employee’s continuous service. The 2021 PSUs will be forfeited if the performance condition at or above a threshold level is not achieved by December 29, 2023. The performance condition for a threshold of net product revenues relative to the 2021 PSUs was deemed probable of achievement in the fourth quarter of 2021.

A Monte Carlo simulation model was used to determine the grant date fair value of $24.54 for the 2021 PSUs based on the following assumptions:


Fair value of the Company’s common stock on grant date	$	21.31
Expected volatility	49		%
Risk-free interest rate	0.29		%
Dividend yield	—		%

During the year ended December 31, 2020, in connection with our long-term incentive compensation program, we awarded 2,327,840 PSUs (the 2020 target amount) that will vest upon the achievement of performance targets related to clinical trial positive top-line results and product approvals by the FDA (the 2020 PSUs). Pursuant to the terms of the 2020 PSUs, employees may earn up to 200% of the 2020 target amount, or 4,655,680 total shares, depending on the volume and timing of achievement of the performance targets. The 2020 PSUs will be forfeited if the performance targets are not met by December 31, 2024. The performance condition for threshold achievement of a product approval by the FDA relative to the 2020 PSUs occurred in the third quarter of 2021 representing 25% of the 2020 target amount.

During the year ended December 31, 2019, in connection with our long-term incentive compensation program, we awarded 1,926,605 PSUs (the 2019 target amount) that vest upon the achievement of performance targets related to product approvals by the FDA (the 2019 PSUs). Pursuant to the terms of the 2019 PSUs, employees may earn up to 200% of the 2019 target amount, or 3,853,210 total shares, depending on the volume and timing of achievement of the performance targets. The performance condition for early achievement of the 2019 PSUs occurred during 2020 representing 150% of the 2019 target amount. The performance condition for earning the remaining 50% of the 2019 target amount occurred in early 2021.

During the year ended December 31, 2018, we awarded 693,131 PSUs that vest upon the achievement of certain product revenue, late-stage clinical development programs and discovery pipeline expansion performance targets (the 2018 PSUs). The performance targets for 167,726 remaining 2018 PSUs were achieved in 2021.

Expense recognition for PSUs commences when it is determined that attainment of the performance target is probable. Of the aggregate outstanding PSUs, 4,853,112 relate to awards for which we achieved the performance target. As of December 31, 2021, the remaining unrecognized compensation expense for the PSUs achieved or deemed probable of achievement related to the PSUs was $12.1 million, which will be recognized over a weighted-average period of 3.0 years. The total unrecognized compensation expense for the PSUs for which we have not yet determined that attainment of the performance target is probable was $121.6 million as of December 31, 2021.

Exelixis, Inc. 401(k) Plan (the 401(k) Plan)

We sponsor the 401(k) Plan under which we have historically made matching contributions to our employees’ 401(k) accounts in the form of our common stock. Beginning in 2020, our matching contributions are in the form of cash. We recorded compensation expense of $9.5 million, $6.7 million and $4.6 million for the years ended December 31, 2021, 2020 and 2019, respectively, for matching contributions to our employees 401(k) accounts.

Provision For Income Taxes

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Provision For Income Taxes

PROVISION FOR INCOME TAXES

Our income before income taxes is derived solely from within the U.S. Our provision for income taxes was as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
Current:
Federal	$	11,338	$	—	$	—
State	5,224		3,791		6,095
Total current tax expense	$	16,562	$	3,791	$	6,095
Deferred:
Federal	$	46,416	$	14,886	$	71,580
State	113		379		(578)
Total deferred tax expense	46,529		15,265		71,002
Provision for income taxes	$	63,091	$	19,056	$	77,097

The provision for income taxes for the years ended December 31, 2021, 2020, and 2019 primarily relates to the utilization of federal tax attributes and state taxes in jurisdictions outside of California, for which we do not have net operating loss carryforwards due to a limited operating history. Our historical net operating losses were sufficient to fully offset any federal taxable income for the years ended December 31, 2020 and 2019 but were not sufficient to fully offset federal taxable income for the year ended December 31, 2021.

The reconciliation of the U.S. federal income tax provision at the statutory federal income tax rate of 21% for each of the years ended December 31, 2021, 2020 and 2019, respectively, to our provision for income taxes was as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
U.S. federal income tax provision at statutory rate	$	61,772	$	27,476	$	83,603
State tax (benefit) expense	1,336		(2,232)		1,148
Change in valuation allowance	2,883		5,525		3,208
Research credits	(6,263)		(11,356)		(8,299)
Stock-based compensation	(11,831)		(20,399)		(9,177)
Non-deductible executive compensation	11,182		18,067		4,228
Branded prescription drug fee	2,897		2,537		1,099
Other	1,115		(562)		1,287
Provision for income taxes	$	63,091	$	19,056	$	77,097

Deferred tax assets and liabilities reflect the net tax effects of net operating loss and tax credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting and the amounts used for income tax purposes.

Our deferred tax assets and liabilities were as follows (in thousands):


	December 31,
	2021		2020
Deferred tax assets:
Net operating loss carryforwards	$	17,993	$	37,454
Tax credit carryforwards	101,460		126,625
Depreciation and amortization	7,764		18,414
Stock-based compensation	23,162		19,818
Lease liabilities	12,385		11,908
Accruals and reserves not currently deductible	19,531		12,207
Deferred revenue	8,040		7,637
Other assets	1,303		—
Total deferred tax assets	191,638		234,063
Valuation allowance	(70,068)		(67,185)
Net deferred tax assets	121,570		166,878
Deferred tax liabilities:
Lease right-of-use assets	(9,907)		(9,510)
Other liabilities	—		(657)
Total deferred tax liabilities	(9,907)		(10,167)
Net deferred taxes	$	111,663	$	156,711

ASC Topic 740: Income Taxes (Topic 740) requires that the tax benefit of net operating losses, temporary differences and credit carry forwards be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on our ability to generate sufficient taxable income within the carry forward period. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. As of December 31, 2021, based on the evaluation and weighting of both positive and negative evidence, including our achievement of a cumulative three-year income position as of December 31, 2021 and forecasts of future operating results, as well as considering the utilization of net operating losses and tax credits prior to their expiration, management determined that there is sufficient positive evidence to conclude that it is more likely than not the deferred tax assets are realizable. As of December 31, 2021 and 2020, we continue to carry a valuation allowance of $70.1 million and $67.2 million, respectively, against our California state deferred tax assets. The valuation allowance increased by $2.9 million and $5.5 million during the years ended December 31, 2021 and 2020, respectively.

At December 31, 2021, we had federal business tax credits of approximately $101.0 million which expire in the years 2025 through 2041. We also had state net operating loss carryforwards of approximately $426.0 million, which expire in the years 2022 through 2036, California research and development tax credits of approximately $45.0 million, which do not expire, and California Competes Tax Credits of approximately $2.0 million, which expire in 2026.

Under the Internal Revenue Code and similar state provisions, certain substantial changes in our ownership could result in an annual limitation on the amount of net operating loss and credit carryforwards that can be utilized in future years to offset future taxable income. The annual limitation may result in the expiration of net operating losses and credit carryforwards before utilization. We completed a Section 382 analysis through December 31, 2021, and concluded that an ownership change, as defined under Section 382, had not occurred.

The following table summarizes the activity related to our unrecognized tax benefits (in thousands):


	Year Ended December 31,
	2021		2020		2019
Beginning balance	$	80,941	$	79,078	$	76,060
Change relating to prior year provision	728		591		589
Change relating to current year provision	2,215		3,305		2,429
Reductions based on the lapse of the applicable statutes of limitations	(301)		(2,033)		—
Ending balance	$	83,583	$	80,941	$	79,078

We do not anticipate that the amount of unrecognized tax benefits existing as of December 31, 2021 will significantly change over the next 12 months. As of December 31, 2021, we had $83.6 million in unrecognized tax benefits, of which $52.6 million would reduce our provision for income taxes and the effective tax rate, if recognized. Interest and penalties were nominal or zero for all periods presented. We have elected to record interest and penalties in the accompanying Consolidated Statements of Income as a component of income taxes.

We file U.S. and state income tax returns in jurisdictions with varying statues of limitations during which such tax returns may be audited and adjusted by the relevant tax authorities. The 2001 through 2021 tax years generally remain subject to examination by federal and most state tax authorities to the extent net operating losses and credits generated during these periods are being utilized in the open tax periods.

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 17
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB TOPIC 6.I.5.Q1)
-URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 270
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-URI http://asc.fasb.org/topic&trid=2144680

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 30
-Section 50
-Paragraph 2
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

+ Details

Net Income Per Share

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Net Income Per Share

NET INCOME PER SHARE

Net income per share - basic and diluted, were computed as follows (in thousands, except per share amounts):


	Year Ended December 31,
		2021		2020		2019
Numerator:
Net income		$	231,063	$	111,781	$	321,012
Denominator:
Weighted-average common shares outstanding - basic		314,884		308,271		302,584
Dilutive securities		7,475		9,730		12,425
Weighted-average common shares outstanding - diluted		322,359		318,001		315,009

Net income per share - basic		$	0.73	$	0.36	$	1.06
Net income per share - diluted		$	0.72	$	0.35	$	1.02

Dilutive securities included outstanding stock options, unvested RSUs and PSUs and ESPP contributions. Certain potential common shares were excluded from our calculation of weighted-average common shares outstanding - diluted because either they would have had an anti-dilutive effect on net income per share or they were related to shares from PSUs that were contingently issuable and the contingency had not been satisfied at the end of the reporting period. See “Note 8. Employee Benefit Plans” for a further description of our equity awards. The weighted-average potential common shares excluded from our calculation were as follows (in thousands):


	Year Ended December 31,
		2021	2020	2019
Anti-dilutive securities and contingently issuable shares excluded		14,305	10,959	9,111

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

COMMITMENTS AND CONTINGENCIES

Leases

Headquarters Lease

In May 2017, we entered into a Lease Agreement (the Lease) for our corporate headquarters located in Alameda, California (the Initial Premises). The Lease was subsequently amended in October 2017, June 2018, April 2019, August 2019, January 2020 and December 2020, resulting in, among other things, an increase to the amount of space leased and changes to the lease term. Our right-of-use asset, lease liability and the related lease costs reflect the 254,690 square feet of space we have taken possession of as of December 31, 2021 (the Current Premises) under the amended Lease, including 25,749 square feet of space we took possession of in 2021.

The term of the Lease continues through October 31, 2031 (the Lease Term). We have two five-year options to extend the Lease; these optional periods have not been considered in the determination of the right-of-use asset or the lease liability for the Lease as we did not consider it reasonably certain that we would exercise any such options.

We have made certain tenant improvements on the Initial Premises, for which we received $8.2 million in reimbursements in January 2019. During 2020, we also made certain tenant improvements for which we have received $1.7 million in reimbursements in 2021 related to the additional space we obtained under the April 2019 amendment. We were also provided an allowance of up to $1.4 million in 2021 for certain planned tenant improvements to the additional space obtained under the December 2020 amendment.

The balance sheet classification of our operating lease assets and liabilities were as follows (in thousands):


	December 31,
	2021		2020
Assets:
Right-of-use assets included in other long-term assets	$	45,122	$	43,010
Liabilities:
Current portion included in other current liabilities	$	5,137	$	3,025
Long-term portion of operating lease liabilities	51,272		49,086
Total operating lease liabilities	$	56,409	$	52,111

The components of operating lease costs, which are included in selling, general and administrative expenses in our Consolidated Statements of Income, were as follows (in thousands):


	Year Ended December 31,
		2021		2020		2019
Operating lease cost		$	5,332	$	4,825	$	2,844
Variable lease cost		2,685		2,830		1,024

Total operating lease costs		$	8,017	$	7,655	$	3,868

Cash paid for amounts included in the measurement of lease liabilities for the years ended December 31, 2021, 2020 and 2019 was $5.0 million, $4.6 million and $2.9 million, respectively, and was included in net cash provided by operating activities in our Consolidated Statements of Cash Flows.

As of December 31, 2021, the maturities of our operating lease liabilities were as follows (in thousands):


Year Ended December 31,	Amount
2022	$	5,638
2023	5,995
2024	6,283
2025	6,478
2026	6,675
Thereafter	35,170
Total lease payments	66,239
Less:
Imputed interest	(9,404)
Future tenant improvement reimbursements	(426)
Operating lease liabilities	$	56,409

As of December 31, 2021, the weighted average discount rate used to determine the operating lease liability was 3.1% and the weighted average remaining lease term was 9.8 years.

Build-to-Suit Lease

In October 2019, we entered into a build-to-suit Lease Agreement (the Build-to-Suit Lease) for approximately 220,000 square feet of office space located in Alameda, California (the New Premises), adjacent to the Current Premises.

The term of the Build-to-Suit Lease is for a period of 242 months (the Term), which will begin upon the substantial completion of the building and tenant improvements by the lessor. We currently anticipate that the Term will begin in the first quarter of 2022 (which date will be the Lease Commencement Date). The monthly base rent under the Build-to-Suit Lease will equal a percentage of the total development costs incurred in connection with the development of the New Premises (excluding the cost of the tenant improvements in excess of the allowance provided by the lessor and any development costs we pay) and is currently estimated to be about $0.7 million, subject to an annual increase of 3% during the Term. We will also be responsible for paying operating expenses related to the New Premises. The rent payments will begin sixty days following commencement of the Term. We have been provided a tenant improvement allowance for the New Premises of approximately $16.5 million. To the extent that the total development costs of the New Premises exceeds $525 per square foot, we will also pay 50% of such excess costs prior to the commencement of the Term, and we are required to secure such amount by providing a letter of credit or depositing such amounts in an account with the lessor’s lender.

The Build-to-Suit Lease includes two five-year options to extend the term of the Build-to-Suit Lease, exercisable under certain conditions and at a market rate determined in accordance with the Build-to-Suit Lease. We have a one-time option to terminate the Build-to-Suit Lease without cause after the 180th month of the Term, exercisable under certain conditions as described in the Build-to-Suit Lease and subject to a termination payment calculated in accordance with the Build-to-Suit Lease. In addition, we have a right of first offer to purchase the New Premises, subject to certain procedures and exclusions set forth in the Build-to-Suit Lease.

We have determined that, under the guidance provided in Topic 842, we do not have control of the New Premises during the construction period. Therefore, we will not record a right-of-use asset or lease liability for the Build-to-Suit Lease until the Lease Commencement Date. We will evaluate the classification of the Build-to-Suit Lease as an operating lease or financing lease at the Lease Commencement Date. We determined the cost of tenant improvements during the construction period are lessor assets and considered a prepayment of lease under Topic 842. The costs incurred as of December 31, 2021 of $36.8 million are recorded as other long-term assets in the Consolidated Balance Sheets.

Letters of Credit

We have obtained standby letters of credit related to our lease obligations and certain other obligations with combined credit limits of $16.7 million and $1.6 million as of December 31, 2021 and 2020, respectively.

In January 2021, we entered into a standby letter of credit as guarantee of our obligation to fund our portion of the tenant improvements related to our build-to-suit lease at our corporate campus. The letter of credit is secured by our short-term investments, which are recorded as restricted cash equivalents and presented in Other long-term assets in our Consolidated Balance Sheets and is reduced as we fund our portion of the tenant improvements. As of December 31, 2021, restricted cash equivalents included $15.2 million of short-term investments as collateral under our standby letter of credit for our portion of the tenant improvements.

Legal Proceedings

In September 2019, we received a notice letter regarding an Abbreviated New Drug Application (ANDA) submitted to the FDA by MSN Pharmaceuticals, Inc. (MSN), requesting approval to market a generic version of CABOMETYX tablets. MSN’s initial notice letter included a Paragraph IV certification with respect to our U.S. Patent Nos. 8,877,776 (salt and polymorphic forms), 9,724,342 (formulations), 10,034,873 (methods of treatment) and 10,039,757 (methods of treatment), which are listed in the Approved Drug Products with Therapeutic Equivalence Evaluations, also referred to as the Orange Book, for CABOMETYX. MSN’s initial notice letter did not provide a Paragraph IV certification against U.S. Patent No. 7,579,473 (composition of matter) or U.S. Patent No. 8,497,284 (methods of treatment), each of which is listed in the Orange Book. On October 29, 2019, we filed a complaint in the United States District Court for the District of Delaware (the Delaware District Court) for patent infringement against MSN asserting infringement of U.S. Patent No. 8,877,776 arising from MSN’s ANDA filing with the FDA. On November 20, 2019, MSN filed its response to the complaint, alleging that the asserted claims of U.S. Patent No. 8,877,776 are invalid and not infringed. On May 5, 2020, we received notice from MSN that it had amended its ANDA to include additional Paragraph IV certifications. In particular, the ANDA requested approval to market a generic version of CABOMETYX tablets prior to expiration of two previously unasserted CABOMETYX patents: U.S. Patent Nos. 7,579,473 and 8,497,284. On May 11, 2020, we filed a complaint in the Delaware District Court for patent infringement against MSN asserting infringement of U.S. Patent Nos. 7,579,473 and 8,497,284 arising from MSN’s amended ANDA filing with the FDA. Neither of our complaints have alleged infringement of U.S. Patent Nos. 9,724,342, 10,034,873 and 10,039,757. On May 22, 2020, MSN filed its response to the complaint, alleging that the asserted claims of U.S. Patent Nos. 7,579,473 and 8,497,284 are invalid and not infringed. On March 23, 2021, MSN filed its First Amended Answer and Counterclaims (amending its prior filing from May 22, 2020), seeking, among other things, a declaratory judgment that U.S. Patent No. 9,809,549 is invalid and would not be infringed by MSN if its generic version of CABOMETYX tablets were approved by the FDA. U.S. Patent No. 9,809,549 is not listed in the Orange Book. On April 7, 2021, we filed our response to MSN’s First Amended Answer and Counterclaims, denying, among other things, that U.S. Patent No. 9,809,549 is invalid or would not be infringed.

On October 1, 2021, pursuant to a stipulation between us and MSN, the Delaware District Court entered an order that (i) MSN’s submission of its ANDA constitutes infringement of certain claims relating to U.S. Patent Nos. 7,579,473 and 8,497,284, if those claims are not found to be invalid, and (ii) upon approval, MSN’s commercial manufacture, use, sale or offer for sale within the U.S., and importation into the U.S., of MSN’s ANDA product prior to the expiration of U.S. Patent Nos. 7,579,473 and 8,497,284 would also infringe certain claims of each patent, if those claims are not found to be invalid. Then, on October 12, 2021, pursuant to a separate stipulation between us and MSN, the Delaware District Court entered an order dismissing MSN’s counterclaims with respect to U.S. Patent No. 9,809,549. In our complaints, we are seeking, among other relief, an order that the effective date of any FDA approval of MSN’s ANDA be a date no earlier than the expiration of all of U.S. Patent Nos. 7,579,473, 8,497,284 and 8,877,776, the latest of which expires on October 8, 2030, and equitable relief enjoining MSN from infringing these patents. A bench trial has been scheduled for May 2022.

On January 11, 2022, we received notice from MSN that it had further amended its ANDA to assert additional Paragraph IV certifications. The ANDA now requests approval to market a generic version of CABOMETYX tablets prior to expiration of four previously-unasserted CABOMETYX patents that are now listed in the Orange Book: U.S. Patent Nos. 11,091,439 (salt and polymorphic forms) 11,091,440 (formulations) and 11,098,015 (methods of treatment). We have 45 days from receipt of the January 11, 2022 notice to file a patent infringement claim against MSN relating to the newly challenged patents.

In May 2021, we received notice letters from Teva Pharmaceuticals Development, Inc. and Teva Pharmaceuticals USA, Inc. (individually and collectively referred to as Teva) regarding an ANDA Teva submitted to the FDA, requesting

approval to market a generic version of CABOMETYX tablets. Teva’s notice letters included a Paragraph IV certification with respect to our U.S. Patent Nos. 9,724,342 (formulations), 10,034,873 (methods of treatment) and 10,039,757 (methods of treatment), which are listed in the Orange Book and expire in 2033, 2031 and 2031, respectively. Teva’s notice letters did not provide a Paragraph IV certification against any additional CABOMETYX patents. On June 17, 2021, we filed a complaint in the Delaware District Court for patent infringement against Teva, along with Teva Pharmaceutical Industries Limited (Teva Parent), asserting infringement of U.S. Patent Nos. 9,724,342, 10,034,873 and 10,039,757 arising from Teva’s ANDA filing with the FDA. On August 27, 2021, Teva filed its answer and counterclaims to the complaint, alleging that the asserted claims of U.S. Patent Nos. 9,724,342, 10,034,873 and 10,039,757 are invalid and not infringed, and on August 23, 2021, we and Teva entered into a stipulation wherein Teva Parent was dismissed without prejudice from this lawsuit and agreed to be bound by any stipulation, judgment, order or decision rendered as to Teva, including any appeals and any order granting preliminary or permanent injunctive relief against Teva. On September 17, 2021, we filed an answer to Teva’s counterclaims. We are seeking, among other relief, an order that the effective date of any FDA approval of Teva’s ANDA be a date no earlier than the expiration of all of U.S. Patent Nos. 9,724,342, 10,034,873 and 10,039,757, the latest of which expires on July 9, 2033, and equitable relief enjoining Teva from infringing these patents. On February 8, 2022, the parties filed a stipulation to stay all proceedings, which was granted by the Delaware District Court on February 9, 2022. The stipulation and order were filed under seal.

The sale of any generic version of CABOMETYX earlier than its patent expiration could significantly decrease our revenues derived from the U.S. sales of CABOMETYX and thereby materially harm our business, financial condition and results of operations. It is not possible at this time to determine the likelihood of an unfavorable outcome or estimate of the amount or range of any potential loss.

We may also from time to time become a party or subject to various other legal proceedings and claims, either asserted or unasserted, which arise in the ordinary course of business. Some of these proceedings have involved, and may involve in the future, claims that are subject to substantial uncertainties and unascertainable damages.

Organization and Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	The accompanying 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.
Fiscal Period	We have adopted a 52- or 53-week fiscal year policy that ends on the Friday closest to December 31st. Fiscal year 2021, which was a 52-week fiscal year, ended on December 31, 2021, fiscal year 2020, which was a 52-week fiscal year, ended on January 1, 2021 and fiscal year 2019, which was a 53-week fiscal year, ended on January 3, 2020. For convenience, references in this report as of and for the fiscal years ended January 1, 2021 and January 3, 2020 are indicated as being as of and for the years ended December 31, 2020 and 2019, respectively. We have made reclassifications to our prior years’ Consolidated Financial Statements to conform to the current year’s presentation. These reclassifications did not impact previously reported total revenues, income from operations, net income, total assets, total liabilities, total operating, investing or financing cash flows or total stockholders’ equity.
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.
Use of Estimates	The preparation of the accompanying 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, we evaluate our significant estimates. 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.
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted	Recently Adopted Accounting Pronouncements On January 1, 2021, we adopted the Accounting Standards Board’s (FASB) Accounting Standards Update (ASU) 2019-12, Income Taxes (Topic 740)-Simplifying the Accounting for Income Taxes (ASU 2019-12). ASU 2019-12 simplifies the accounting for income taxes by removing certain exceptions to the general principles in Accounting Standards Codification (ASC) Topic 740, Income Taxes and clarifying and amending existing guidance. Our adoption of ASU 2019-12 did not have a significant impact on the accompanying Consolidated Financial Statements. Recent Accounting Pronouncements Not Yet Adopted There were no new accounting pronouncements issued since our filing of the Annual Report on Form 10-K for the year ended December 31, 2020, which could have a significant effect on our Consolidated Financial Statements.
Cash and Cash Equivalents	We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents include high-grade, short-term investments in money market funds, certificates of deposit and marketable debt securities which are subject to minimal credit and market risk.
Investments and Investment Impairment	We designate all investments in marketable debt securities as available-for-sale and therefore, report such investments at fair value, with unrealized gains and losses recorded in accumulated other comprehensive income. For securities sold prior to maturity, the cost of securities sold is based on the specific identification method. We include realized gains and losses on the sale of investments in other income, net in the accompanying Consolidated Statements of Income. We classify those investments that we do not require for use in current operations and that mature in more than 12 months as long-term investments in the accompanying Consolidated Balance Sheets. The classification of restricted cash equivalents as short-term or long-term is dependent upon the longer of the remaining term to maturity of the investment or the remaining term of the related restriction. Investment Impairment Quarterly, we assess each of our investments in available-for-sale debt securities whose fair value is below its cost basis to determine if the investment’s impairment is due to credit-related factors or noncredit-related factors. Factors considered in determining whether an impairment is credit-related include the extent to which the investment’s fair value is less than its cost basis, declines in published credit ratings, issuer default on interest or principal payments, and declines in the financial condition and near-term prospects of the issuer. If we determine a credit-related impairment exists, we will measure the credit loss based on a discounted cash flows model. Credit-related impairments on available-for-sale debt securities are recognized as an allowance for credit losses with a corresponding adjustment to other income, net in the accompanying Consolidated Statements of Income. The portion of the impairment that is not credit-related is recorded as a reduction of other comprehensive income (loss), net of applicable taxes. We have elected to exclude accrued interest from both the fair value and the amortized cost basis of the available-for-sale debt securities for the purposes of identifying and measuring an impairment. We write-off accrued interest as a reduction of interest income when an issuer has defaulted on interest payments due on a security.
Fair Value Measurements	We define fair value as the amounts that would be received upon sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risks.
Forward Foreign Currency Contracts	In January 2021, we initiated an operational hedging program and entered into forward contracts to hedge certain operational exposures for the changes in foreign currency exchange rates associated with assets or liabilities denominated in foreign currencies, primarily the Euro.
Foreign Currency Remeasurement	Monetary assets and liabilities denominated in currencies other than the functional currency are remeasured using exchange rates in effect at the end of the period and related gains or losses are recorded in other income, net in the accompanying Consolidated Statements of Income.
Accounts Receivable	Trade receivables, net, contain amounts billed to our customers for product sales, and amounts billed to our collaboration partners for development, regulatory and sales-based milestone payments, royalties on the sale of licensed products, profit-sharing arrangements, development cost reimbursements, and payments for product supply services. Our customers are primarily pharmaceutical and biotechnology companies that are located in the U.S., and collaboration partners that are located in Europe and Japan. We record trade receivables net of allowances for credit losses and chargebacks, and cash discounts for prompt payment. We apply an aging method to estimate credit losses and consider our historical loss information, adjusted to account for current economic conditions, and reasonable and supportable forecasts of future economic conditions affecting our customers. We write off trade receivables and related allowances for credit losses when it becomes probable we will not collect the amount receivable. Write-offs for the years ended December 31, 2021 and 2020 have been insignificant.
Inventory	We value inventory at the lower of cost or net realizable value. We determine the cost of inventory using the standard-cost method, which approximates actual cost based on a first-in, first-out method. We analyze our inventory levels quarterly and write down inventory subject to expiry in excess of expected requirements, or that has a cost basis in excess of its expected net realizable value. These write downs are charged to either cost of goods sold or the cost of supplied product included in collaboration services revenues in the accompanying Consolidated Statements of Income. On a quarterly basis, we analyze our estimated production levels for the following twelve-month period, which is our normal operating cycle, and reclassify inventory we expect to use or sell in periods beyond the next twelve months into other long-term assets in the accompanying Consolidated Balance Sheets.
Property and Equipment	We record property and equipment at cost, net of depreciation. We compute depreciation using the straight-line method based on estimated useful lives of the assets, which ranges up to 15 years and depreciate leasehold improvements over the lesser of their estimated useful lives or the remainder of the lease term. We charge repairs and maintenance costs to expense as incurred. We periodically review property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We did not recognize impairment charges in any of the periods presented.
Goodwill	We recorded goodwill amounts as the excess of purchase price over identifiable net assets acquired based on their estimated fair value. We review the carrying amount of goodwill for impairment annually and whenever events or changes in circumstance indicate that the carrying value may not be recoverable. We perform our annual assessment of the recoverability of our goodwill as of the first day of our fourth quarter. The assessment of recoverability may first consider qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount. We perform a quantitative assessment if the qualitative assessment results in a more-likely-than-not determination or if a qualitative assessment is not performed. The quantitative assessment considers whether the carrying amount of a reporting unit exceeds its fair value, in which case an impairment charge is recorded for the amount by which the carrying amount of a reporting unit exceeds its fair value, limited to the goodwill balance. We operate in one business segment, which is also considered to be our sole reporting unit and therefore, goodwill is tested for impairment at the enterprise level.
Long-Lived Assets	The carrying value of our long-lived assets, which includes property and equipment, right-of-use assets and leasehold improvements, is reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. Should there be an indication of impairment, we test for recoverability by comparing the estimated undiscounted future cash flows expected to result from the use of the asset to the carrying amount of the asset or asset group. If the asset or asset group is determined to be impaired, any excess of the carrying value of the asset or asset group over its estimated fair value is recognized as an impairment loss.
Revenue	We account for revenues under the guidance of ASU Topic 606, Revenues from Contracts with Customers (Topic 606). Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services, in an amount that reflects the consideration to which the entity is entitled to in exchange for those goods or services. To determine revenue recognition for arrangements that are within the scope of Topic 606, we perform the following five steps: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) we satisfy a performance obligation. We only apply the five-step model to contracts when it is probable that we will collect the consideration we are entitled to in exchange for the goods or services we transfer to the customer. Net Product Revenues We sell our products principally to specialty distributors and specialty pharmacy providers, or collectively, our Customers. These Customers subsequently resell our products to health care providers and patients. In addition to distribution agreements with Customers, we enter into arrangements with health care providers and payors that provide for government-mandated and/or privately-negotiated rebates, chargebacks and discounts with respect to the purchase of our products. Revenues from product sales are recognized when the Customer obtains control of our product, which occurs at a point in time, typically upon delivery to the Customer. Product Sales Discounts and Allowances We record revenues from product sales at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established primarily from discounts, chargebacks, rebates, co-pay assistance, returns and other allowances that are offered within contracts between us and our Customers, health care providers, payors and other indirect customers relating to the sales of our products. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the Customer) or a current liability (if the amount is payable to a party other than a Customer). Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted Customer buying and payment patterns. Overall, these reserves reflect our best estimates of the amount of consideration to which we are entitled based on the terms of our contracts. The amount of variable consideration that is included in the transaction price may be constrained, and is included in the net sales price only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenues and earnings in the period such variances become known. Chargebacks: Chargebacks are discounts that occur when contracted Customers purchase directly from a specialty distributor. Contracted Customers, which currently consist primarily of Public Health Service institutions, Federal government entities purchasing via the Federal Supply Schedule, Group Purchasing Organizations, and health maintenance organizations, generally purchase the product at a discounted price. The specialty distributor, in turn, charges back to us the difference between the price initially paid by the specialty distributor and the discounted price paid to the specialty distributor by the Customer. The allowance for chargebacks is based on actual chargebacks received and an estimate of sales to contracted Customers. Discounts for Prompt Payment: Our Customers in the U.S. receive a discount of 2% for prompt payment. We expect our Customers will earn 100% of their prompt payment discounts and, therefore, we deduct the full amount of these discounts from total product sales when revenues are recognized. Rebates: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program, other government programs and commercial contracts. Rebate amounts owed after the final dispensing of the product to a benefit plan participant are based upon contractual agreements or legal requirements with public sector benefit providers, such as Medicaid. The allowance for rebates is based on statutory or contractual discount rates and expected utilization. Our estimates for the expected utilization of rebates are based on Customer and payer data received from the specialty pharmacies and distributors and historical utilization rates. Rebates are generally invoiced by the payer and paid in arrears, such that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s shipments to our Customers, plus an accrual balance for known prior quarters’ unpaid rebates. If actual future rebates vary from estimates, we may need to adjust our accruals, which would affect net product revenues in the period of adjustment. Allowances for rebates also include amounts related to the Medicare Part D Coverage Gap Discount Program. In the U.S. during 2020, the Medicare Part D prescription drug benefit mandated participating manufacturers to fund 70% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients. Our estimates for expected Medicare Part D coverage gap amounts are based on Customer and payer data received from specialty pharmacies and distributors and historical utilization rates. Funding of the coverage gap is invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s shipments to Customer, plus an accrual balance for known prior quarters’ unpaid claims. If actual future funding varies from estimates, we may need to adjust our accruals, which would affect net product revenues in the period of adjustment. Co-payment Assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. We accrue a liability for co-payment assistance based on actual program participation and estimates of program redemption using Customer data provided by the specialty distributor that administers the copay program. Other Customer Credits: We pay fees to our Customers for account management, data management and other administrative services. To the extent the services received are distinct from the sale of products to the Customer, we classify these payments in selling, general and administrative expenses in our Consolidated Statements of Income. Collaboration Revenues We assess whether our collaboration agreements are subject to ASC Topic 808, Collaborative Arrangements (Topic 808) based on whether they involve joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards. To the extent that the arrangement falls within the scope of Topic 808, we apply by analogy the unit of account guidance under Topic 606 to identify distinct performance obligations, and then determine whether a customer relationship exists for each distinct performance obligation. If we determine a performance obligation within the arrangement is with a customer, we apply the guidance in Topic 606. If a portion of a distinct bundle of goods or services within an arrangement is not with a customer, then the unit of account is not within the scope of Topic 606, and the recognition and measurement of that unit of account shall be based on analogy to authoritative accounting literature or, if there is no appropriate analogy, a reasonable, rational, and consistently applied accounting policy election. We enter into collaboration arrangements, under which we license certain rights to our intellectual property to third parties. The terms of these arrangements typically include payments to us for one or more of the following: nonrefundable up-front license fees; development, regulatory and sales-based milestone payments; product supply services; development cost reimbursements; profit-sharing arrangements; and royalties on net sales of licensed products. As part of the accounting for these arrangements, we develop assumptions that require judgment to determine the standalone selling price for each performance obligation identified in the contract. These key assumptions may include forecasted revenues, clinical development timelines and costs, reimbursement rates for personnel costs, discount rates and probabilities of technical and regulatory success. Up-front License Fees: If the license to our intellectual property is determined to be distinct from the other performance obligations identified in the arrangement, we recognize revenues from nonrefundable up-front fees allocated to the license when the license is transferred to the licensee and the licensee is able to use and benefit from the license, which generally occurs at or near the inception of the contract. For licenses that are bundled with other promises, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenues from nonrefundable up-front fees. We evaluate the measure of progress at the end of each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. Regulatory and Development Milestone Payments: At the inception of each arrangement that includes development milestone payments, we evaluate whether the milestones are considered probable of being reached and estimate the amount to be included in the transaction price using the most likely amount method. If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price. Milestone payments that are not within our or the licensee’s control, such as regulatory approvals, are not considered probable of being achieved until uncertainty associated with the approvals has been resolved. The transaction price is then allocated to each performance obligation, on a relative standalone selling price basis, for which we recognize revenue as or when the performance obligations under the contract are satisfied. At the end of each subsequent reporting period, we re-evaluate the probability of achieving such development and regulatory milestones and any related variable consideration constraint, and if necessary, adjust our estimate of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis. Product Supply Services: Arrangements that include a promise for the future supply of drug product for either clinical development or commercial supply at the licensee’s discretion are generally considered as options. We assess if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. Development Cost Reimbursements: Our collaboration arrangements may include promises of future clinical development and drug safety services, as well as participation on certain joint committees. When such services are provided to a customer, and they are distinct from the licenses provided to our collaboration partners, these promises are accounted for as a separate performance obligation, which we estimate using internal development costs incurred and projections through the term of the arrangements. We record revenues for these services as the performance obligations are satisfied over time based on measure of progress. However, if we conclude that our collaboration partner is not a customer for those collaborative research and development activities, we present such payments as a reduction of research and development expenses. Profit-sharing Arrangements: Under the terms of our collaboration agreement with Genentech for cobimetinib, we are entitled to a share of U.S. profits and losses received in connection with the commercialization of cobimetinib. We account for this arrangement in accordance with Topic 606. We have determined that we are an agent under the agreement and therefore revenues are recorded net of costs incurred. We record revenues for the variable consideration associated with the profits and losses under the collaboration agreement when it is probable that a significant reversal in the amount of cumulative revenues recognized will not occur. Royalty and Sales-based Milestone Payments: For arrangements that include royalties and sales-based milestone payments, including milestone payments earned for the first commercial sale of a product, the license is deemed to be the predominant item to which such payments relate and we recognize revenues at the later of when the related sales occur or when the performance obligation to which the royalty has been allocated has been satisfied. Cost of Goods Sold Cost of goods sold is related to our product revenues and consists primarily of a 3% royalty we are required to pay on all net sales of any product incorporating cabozantinib, the cost of manufacturing, indirect labor costs, write-downs related to expiring and excess inventory, shipping and other third-party logistics and distribution costs for our product. We consider regulatory approval of product candidates to be uncertain and product manufactured prior to regulatory approval may not be sold unless regulatory approval is obtained. As such, the manufacturing costs for product candidates incurred prior to regulatory approval were not capitalized as inventory but are expensed as research and development costs.
Research and Development Expenses	Research and development expenses consist of (1) direct and indirect internal costs for drug discovery; (2) upfront license and project initiation fees, license option fees and option exercise fees, funded research and milestone payments incurred or probable to be incurred for our in-licensing arrangements with our collaboration partners for research programs in development and prior to regulatory approval; and (3) development costs associated with our clinical trial projects, which include fees paid to Contract Research Organizations (CRO) performing work on our behalf. Our clinical trial projects have been executed with support from third-party CROs, who specialize in conducting and managing global clinical trials. We accrue expenses for clinical trial activities performed by the CROs based upon the estimated amount of work completed on each trial. For clinical trial expenses, the significant factors used in estimating accruals include direct CRO costs, the number of patients enrolled, the number of active clinical sites involved, the duration for which the patients will be enrolled in the trial and patient out of pocket costs. We monitor patient enrollment levels and related activities to the extent possible through CRO meetings and correspondence, internal reviews and review of contractual terms. We base our estimates on the best information available at the time. However, additional information may become available to us which may allow us to make a more accurate estimate in future periods. In this event, we may be required to record adjustments to research and development expenses in future periods when the actual level of activity becomes more certain. As described further above, certain payments made to us from our collaboration partners may be presented as a reduction of research and development expense.
Leases	We determine if an arrangement includes a lease at the inception of the agreement. For each of our lease arrangements, we record a right-of-use asset representing our right to use an underlying asset for the lease term and a lease liability representing our obligation to make lease payments. Operating lease right-of-use assets and liabilities are recognized at the lease commencement date based on the net present value of lease payments over the lease term. In determining the discount rate used to calculate the net present value of lease payments, we use our incremental borrowing rate based on the information available at the lease commencement date. Our leases may include options to extend or terminate the lease which are included in the lease term when it is reasonably certain that we will exercise any such options. Lease expense for our operating leases is recognized on a straight-line basis over the lease term. We have elected not to apply the recognition requirements of ASU 2016-02, Leases (Topic 842) for short-term leases.
Advertising	We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses are recorded in selling, general and administrative expenses.
Stock-Based Compensation	We account for stock-based payments to employees, including grants of service-based restricted stock units (RSUs), performance-based restricted stock units (PSUs), service-based stock options and purchases under our 2000 Employee Stock Purchase Plan (ESPP) in accordance with ASC 718, Compensation-Stock Compensation, which requires that stock-based payments (to the extent they are compensatory) be recognized in our Consolidated Statements of Income based on their fair values. We account for forfeitures of stock-based awards as they occur. The expense for stock-based compensation is based on the grant date fair value of the award. The grant date fair value of RSUs and PSUs are estimated as the value of the underlying shares of our common stock. The grant date fair values are estimated using a Monte Carlo simulation pricing model for certain PSUs with market vesting conditions and a Black-Scholes Merton option pricing model for other stock options. Both option pricing models require the input of subjective assumptions. These variables include, but are not limited to, the expected volatility of our stock price and the expected term of the awards. We consider both implied and historical volatility when developing an estimate of expected volatility. We estimate the term using historical data. We recognize compensation expense over the requisite service period on an accelerated basis for awards with a market or performance condition and on a straight-line basis for service-based stock options and awards. Compensation expense related to PSUs is recognized when we determine that it is probable that the performance goals will be achieved, which we assess on a quarterly basis.
Provision for Income Taxes	Our provision for income taxes is computed under the asset and liability method. Significant estimates are required in determining our provision for income taxes. Some of these estimates are based on interpretations of existing tax laws or regulations. We recognize deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined on the basis of the difference between the tax basis of assets and liabilities and their respective financial reporting amounts (temporary differences) at enacted tax rates in effect for the years in which the differences are expected to reverse. A valuation allowance is established for deferred tax assets for which it is more likely than not that some portion or all of the deferred tax assets, including net operating losses and tax credits, will not be realized. We periodically re-assess the need for a valuation allowance against our deferred tax assets based on various factors including our historical earnings experience by taxing jurisdiction, and forecasts of future operating results and utilization of net operating losses and tax credits prior to their expiration. Significant judgment is required in making this assessment and, to the extent that a reversal of any portion of our valuation allowance against our deferred tax assets is deemed appropriate, a tax benefit will be recognized against our provision for income taxes in the period of such reversal. We recognize tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination by the tax authorities based on the technical merits of the position. An adverse resolution of one or more of these uncertain tax positions in any period could have a material impact on the results of operations for that period.

Revenues (Tables)

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregation of Revenue

Revenues consisted of the following (in thousands):


	Year Ended December 31,
		2021		2020		2019
Product revenues:
Gross product revenues		$	1,452,913	$	962,591	$	957,621
Discounts and allowances		(375,657)		(221,041)		(197,671)
Net product revenues		1,077,256		741,550		759,950
Collaboration revenues:
License revenues		249,956		167,295		165,914
Collaboration services revenues		107,758		78,693		41,911

Total collaboration revenues		357,714		245,988		207,825
Total revenues		$	1,434,970	$	987,538	$	967,775

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


	Year Ended December 31,
		2021		2020		2019
CABOMETYX		$	1,054,050	$	718,687	$	733,421
COMETRIQ		23,206		22,863		26,529
Net product revenues		$	1,077,256	$	741,550	$	759,950

Schedule of Concentration Risks

The percentage of total revenues by customer who individually accounted for 10% or more of our total revenues were as follows:


	Year Ended December 31,
	2021		2020		2019
Ipsen Pharma SAS	21	%	15	%	16	%
Affiliates of CVS Health Corporation	14	%	14	%	15	%
Affiliates of McKesson Corporation	14	%	12	%	12	%
Affiliates of AmerisourceBergen Corporation	14	%	11	%	11	%
Affiliates of Optum Specialty Pharmacy	8	%	11	%	13	%

As of December 31, 2021 and 2020, the percentage of trade receivables by customer who individually accounted for 10% or more of our trade receivables were as follows:


	December 31,
	2021		2020

Ipsen Pharma SAS	50	%	23	%
Affiliates of AmerisourceBergen Corporation	11	%	11	%

Affiliates of McKesson Corporation	10	%	12	%
Affiliates of CVS Health Corporation	9	%	11	%
Takeda Pharmaceutical Company Limited	2	%	10	%

Schedule of Revenues Disaggregated by Geographic Region

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


	Year Ended December 31,
		2021		2020		2019
U.S.		$	1,089,396	$	752,890	$	770,244
Europe		302,073		151,631		152,771
Japan		43,501		83,017		44,760
Total revenues		$	1,434,970	$	987,538	$	967,775

Schedule of 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, Discounts for Prompt Payment and Other		Other Customer Credits/Fees and Co-pay Assistance		Rebates		Total
Balance at December 31, 2019	$	7,514	$	3,497	$	15,222	$	26,233
Provision related to sales made in:
Current period	146,537		16,162		58,049		220,748
Prior periods	33		(352)		612		293
Payments and customer credits issued	(144,231)		(16,028)		(56,479)		(216,738)
Balance at December 31, 2020	9,853		3,279		17,404		30,536
Provision related to sales made in:
Current period	243,119		30,728		100,361		374,208
Prior periods	(64)		(111)		1,624		1,449
Payments and customer credits issued	(238,283)		(25,021)		(94,564)		(357,868)
Balance at December 31, 2021	$	14,625	$	8,875	$	24,825	$	48,325

Schedule of Other Assets and Other Liabilities

Contract assets and liabilities were as follows (in thousands):


	December 31,
	2021		2020
Contract assets(1)	$	1,665	$	—

Contract liabilities:
Current portion(2)	$	7,814	$	1,790
Long-term portion(3)	8,739		3,755
Total contract liabilities	$	16,553	$	5,545

____________________

(1) Presented in other long-term assets in the accompanying Consolidated Balance Sheets.

(2) Presented in other current liabilities in the accompanying Consolidated Balance Sheets.

(3) Presented in the long-term portion of deferred revenues in the accompanying Consolidated Balance Sheets.

Collaboration Agreements And Business Development Activities (Tables)

12 Months Ended

Dec. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Collaborative Revenues Under Collaboration Agreement

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


	Year Ended December 31,
		2021		2020		2019
License revenues		$	207,982	$	93,495	$	117,360
Collaboration services revenues		94,091		58,136		35,411
Total		$	302,073	$	151,631	$	152,771

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


	Year Ended December 31,
		2021		2020		2019
License revenues		$	26,058	$	61,115	$	18,112
Collaboration services revenues		13,667		20,557		6,510
Total collaboration revenues		$	39,725	$	81,672	$	24,622

Cash and Investments (Tables)

12 Months Ended

Dec. 31, 2021

Investments, Debt and Equity Securities [Abstract]

Reconciliation of Cash, Cash Equivalents, and Restricted Cash


	December 31,
	2021		2020
Cash and cash equivalents	$	647,169	$	319,217

Restricted cash equivalents included in other long-term assets	16,722		1,555
Cash, cash equivalents, and restricted cash equivalents as reported within the accompanying Consolidated Statements of Cash Flows	$	663,891	$	320,772

Reconciliation of Cash, Cash Equivalents, and Restricted Cash


	December 31,
	2021		2020
Cash and cash equivalents	$	647,169	$	319,217

Restricted cash equivalents included in other long-term assets	16,722		1,555
Cash, cash equivalents, and restricted cash equivalents as reported within the accompanying Consolidated Statements of Cash Flows	$	663,891	$	320,772

Schedule of Investments by Security Type

Cash, cash equivalents, restricted cash equivalents and investments consisted of the following (in thousands):


	December 31, 2021
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Debt securities available-for-sale:
Commercial paper	$	945,801	$	42	$	(2)	$	945,841
Corporate bonds	541,774		876		(1,672)		540,978
U.S. Treasury and government-sponsored enterprises	33,965		1		(21)		33,945
Municipal bonds	12,924		15		(35)		12,904
Total debt securities available-for-sale	1,534,464		934		(1,730)		1,533,668
Cash	135,653		—		—		135,653
Money market funds	66,531		—		—		66,531
Certificates of deposit	119,056		—		—		119,056
Total cash, cash equivalents, restricted cash equivalents and investments	$	1,855,704	$	934	$	(1,730)	$	1,854,908


	December 31, 2020
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Debt securities available-for-sale:
Commercial paper	$	569,456	$	372	$	—	$	569,828
Corporate bonds	543,520		5,244		(7)		548,757
U.S. Treasury and government-sponsored enterprises	208,326		232		(4)		208,554
Municipal Bonds	28,680		83		(1)		28,762
Total debt securities available-for-sale	1,349,982		5,931		(12)		1,355,901
Cash	82,176		—		—		82,176
Money market funds	40,761		—		—		40,761
Certificates of deposit	60,004		—		—		60,004
Total cash, cash equivalents, restricted cash equivalents and investments	$	1,532,923	$	5,931	$	(12)	$	1,538,842

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

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


	December 31, 2021
	Fair Value		Gross Unrealized Losses
Corporate bonds	$	385,053	$	(1,672)
Commercial paper	43,290		(2)
U.S. Treasury and government-sponsored enterprises	18,962		(21)
Municipal bonds	7,475		(35)
Total	$	454,780	$	(1,730)


	December 31, 2020

	Fair Value		Gross Unrealized Losses
Corporate bonds	$	28,445	$	(7)
U.S. Treasury and government-sponsored enterprises	21,989		(4)
Municipal bonds	5,865		(1)

Total	$	56,299	$	(12)

Schedule of Fair Value of Cash Equivalents and Investments by Contractual Maturity

The fair value of debt securities available-for-sale by contractual maturity was as follows (in thousands):


	December 31,
	2021		2020
Maturing in one year or less	$	1,168,256	$	1,034,150
Maturing after one year through five years	365,412		321,751
Total debt securities available-for-sale	$	1,533,668	$	1,355,901

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value Disclosures [Abstract]

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

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


	December 31, 2021
	Level 1		Level 2		Total
Commercial paper	$	—	$	945,841	$	945,841
Corporate bonds	—		540,978		540,978
U.S. Treasury and government-sponsored enterprises	—		33,945		33,945
Municipal bonds	—		12,904		12,904
Total debt securities available-for-sale	—		1,533,668		1,533,668
Money market funds	66,531		—		66,531
Certificates of deposit	—		119,056		119,056
Total financial assets carried at fair value	$	66,531	$	1,652,724	$	1,719,255


	December 31, 2020
	Level 1		Level 2		Total
Commercial paper	$	—	$	569,828	$	569,828
Corporate bonds	—		548,757		548,757
U.S. Treasury and government-sponsored enterprises	—		208,554		208,554
Municipal bonds	—		28,762		28,762
Total debt securities available-for-sale	—		1,355,901		1,355,901
Money market funds	40,761		—		40,761
Certificates of deposit	—		60,004		60,004
Total financial assets carried at fair value	$	40,761	$	1,415,905	$	1,456,666

Inventory (Tables)

12 Months Ended

Dec. 31, 2021

Inventory Disclosure [Abstract]

Schedule of Inventory

Inventory consisted of the following (in thousands):


	December 31,
	2021		2020
Raw materials	$	8,867	$	7,773
Work in process	27,717		20,610
Finished goods	12,927		7,291
Total	$	49,511	$	35,674

Balance Sheet classification:
Current portion included in inventory	$	27,493	$	20,973
Long-term portion included in other long-term assets	22,018		14,701
Total	$	49,511	$	35,674

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment

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


	Estimated Useful Lives	December 31,
		2021		2020
Leasehold improvements	up to 15 years	$	73,589	$	40,694
Computer equipment and software	3 years	14,877		18,376

Furniture and fixtures	7 years	15,780		14,931
Laboratory equipment	5 years	23,744		11,707
Construction in progress		16,872		16,360
Total property and equipment		144,862		102,068
Less: accumulated depreciation		(40,831)		(34,684)
Total property and equipment, net		$	104,031	$	67,384

Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

Schedule of Allocated Employee Stock-Based Compensation Expense

We allocated the stock-based compensation expense for our equity incentive plans and our ESPP as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
Research and development	$	46,654	$	37,198	$	19,374
Selling, general and administrative	73,166		67,872		37,228
Total stock-based compensation expense	$	119,820	$	105,070	$	56,602


	Year Ended December 31,
	2021		2020		2019
Stock options	$	19,048	$	19,863	$	23,422
Restricted stock units	53,629		35,675		26,056
Performance stock units	43,428		47,106		4,878
ESPP	3,715		2,426		2,246
Total stock-based compensation expense	$	119,820	$	105,070	$	56,602

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

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


	Year Ended December 31,
	2021		2020		2019
Stock options	$	9.04	$	9.44	$	8.19
ESPP	$	6.12	$	6.12	$	4.85

Schedule of Fair Value of Employee Share-Based Payments Awards Stock Option Assumptions and Weighted Average Fair Values

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


	Year Ended December 31,
	2021		2020		2019
Stock options:
Risk-free interest rate	0.74	%	0.30	%	1.77	%
Dividend yield	—	%	—	%	—	%
Volatility	51	%	54	%	48	%
Expected life	4.6 years		4.4 years		4.3 years
ESPP:
Risk-free interest rate	0.08	%	0.79	%	2.16	%
Dividend yield	—	%	—	%	—	%
Volatility	47	%	52	%	50	%
Expected life	6 months		6 months		6 months

Schedule of Fair Value of Employee Share-Based Payments Awards ESPP Assumptions and Weighted Average Fair Values

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


	Year Ended December 31,
	2021		2020		2019
Stock options:
Risk-free interest rate	0.74	%	0.30	%	1.77	%
Dividend yield	—	%	—	%	—	%
Volatility	51	%	54	%	48	%
Expected life	4.6 years		4.4 years		4.3 years
ESPP:
Risk-free interest rate	0.08	%	0.79	%	2.16	%
Dividend yield	—	%	—	%	—	%
Volatility	47	%	52	%	50	%
Expected life	6 months		6 months		6 months

Schedule of All Stock Option Activity

Activity for stock options during the year ended December 31, 2021 was as follows (in thousands, except per share amounts):


	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Stock options outstanding at December 31, 2020	16,129	$	12.72
Granted	2,573	$	21.33
Exercised	(4,486)	$	4.23
Cancelled	(545)	$	21.15
Stock options outstanding at December 31, 2021	13,671	$	16.79	3.3 years	$	48,860
Stock options exercisable at December 31, 2021	9,962	$	15.23	2.4 years	$	48,171

Schedule of All RSU Activity

Activity for RSUs during the year ended December 31, 2021 was as follows (in thousands, except per share amounts):


	Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
RSUs outstanding at December 31, 2020	5,378	$	21.96
Awarded	4,220	$	21.34
Vested and released	(2,020)	$	22.03
Forfeited	(750)	$	21.69
RSUs outstanding at December 31, 2021	6,828	$	21.58	1.7 years	$	124,824

Activity for PSUs, during the year ended December 31, 2021 was as follows (in thousands, except per share amounts):


	Shares	Weighted Average Grant Date Fair Value		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
PSUs outstanding at December 31, 2020	7,378	$	21.70
Awarded	2,056	$	24.54
Vested and released	(2,388)	$	19.76
Forfeited	(736)	$	22.57
PSUs outstanding at December 31, 2021	6,310	$	23.00	3.0 years	$	98,121

Schedule of Share-Based Payment Award, Equity Instruments Other Than Options, Valuation Assumptions

A Monte Carlo simulation model was used to determine the grant date fair value of $24.54 for the 2021 PSUs based on the following assumptions:


Fair value of the Company’s common stock on grant date	$	21.31
Expected volatility	49		%
Risk-free interest rate	0.29		%
Dividend yield	—		%

Provision For Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

Our income before income taxes is derived solely from within the U.S. Our provision for income taxes was as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
Current:
Federal	$	11,338	$	—	$	—
State	5,224		3,791		6,095
Total current tax expense	$	16,562	$	3,791	$	6,095
Deferred:
Federal	$	46,416	$	14,886	$	71,580
State	113		379		(578)
Total deferred tax expense	46,529		15,265		71,002
Provision for income taxes	$	63,091	$	19,056	$	77,097

Schedule of Reconciliation of Income Taxes At The Statutory Federal Income Tax Rate to Net Income Taxes


	Year Ended December 31,
	2021		2020		2019
U.S. federal income tax provision at statutory rate	$	61,772	$	27,476	$	83,603
State tax (benefit) expense	1,336		(2,232)		1,148
Change in valuation allowance	2,883		5,525		3,208
Research credits	(6,263)		(11,356)		(8,299)
Stock-based compensation	(11,831)		(20,399)		(9,177)
Non-deductible executive compensation	11,182		18,067		4,228
Branded prescription drug fee	2,897		2,537		1,099
Other	1,115		(562)		1,287
Provision for income taxes	$	63,091	$	19,056	$	77,097

Schedule of Deferred Assets and Liabilities

Our deferred tax assets and liabilities were as follows (in thousands):


	December 31,
	2021		2020
Deferred tax assets:
Net operating loss carryforwards	$	17,993	$	37,454
Tax credit carryforwards	101,460		126,625
Depreciation and amortization	7,764		18,414
Stock-based compensation	23,162		19,818
Lease liabilities	12,385		11,908
Accruals and reserves not currently deductible	19,531		12,207
Deferred revenue	8,040		7,637
Other assets	1,303		—
Total deferred tax assets	191,638		234,063
Valuation allowance	(70,068)		(67,185)
Net deferred tax assets	121,570		166,878
Deferred tax liabilities:
Lease right-of-use assets	(9,907)		(9,510)
Other liabilities	—		(657)
Total deferred tax liabilities	(9,907)		(10,167)
Net deferred taxes	$	111,663	$	156,711

Schedule of Unrecognized Tax Benefits

The following table summarizes the activity related to our unrecognized tax benefits (in thousands):


	Year Ended December 31,
	2021		2020		2019
Beginning balance	$	80,941	$	79,078	$	76,060
Change relating to prior year provision	728		591		589
Change relating to current year provision	2,215		3,305		2,429
Reductions based on the lapse of the applicable statutes of limitations	(301)		(2,033)		—
Ending balance	$	83,583	$	80,941	$	79,078

Net Income Per Share (Tables)

12 Months Ended

Dec. 31, 2021

Earnings Per Share [Abstract]

Schedule of Reconciliation of Basic and Diluted Net Loss Per Share

Net income per share - basic and diluted, were computed as follows (in thousands, except per share amounts):


	Year Ended December 31,
		2021		2020		2019
Numerator:
Net income		$	231,063	$	111,781	$	321,012
Denominator:
Weighted-average common shares outstanding - basic		314,884		308,271		302,584
Dilutive securities		7,475		9,730		12,425
Weighted-average common shares outstanding - diluted		322,359		318,001		315,009

Net income per share - basic		$	0.73	$	0.36	$	1.06
Net income per share - diluted		$	0.72	$	0.35	$	1.02

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

The weighted-average potential common shares excluded from our calculation were as follows (in thousands):


	Year Ended December 31,
		2021	2020	2019
Anti-dilutive securities and contingently issuable shares excluded		14,305	10,959	9,111

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Schedule of Balance Sheet Classification of Lease Liabilities

The balance sheet classification of our operating lease assets and liabilities were as follows (in thousands):


	December 31,
	2021		2020
Assets:
Right-of-use assets included in other long-term assets	$	45,122	$	43,010
Liabilities:
Current portion included in other current liabilities	$	5,137	$	3,025
Long-term portion of operating lease liabilities	51,272		49,086
Total operating lease liabilities	$	56,409	$	52,111

Schedule of Components of Lease Expense

The components of operating lease costs, which are included in selling, general and administrative expenses in our Consolidated Statements of Income, were as follows (in thousands):


	Year Ended December 31,
		2021		2020		2019
Operating lease cost		$	5,332	$	4,825	$	2,844
Variable lease cost		2,685		2,830		1,024

Total operating lease costs		$	8,017	$	7,655	$	3,868

Schedule of Maturities of Operating Lease Liabilities

As of December 31, 2021, the maturities of our operating lease liabilities were as follows (in thousands):


Year Ended December 31,	Amount
2022	$	5,638
2023	5,995
2024	6,283
2025	6,478
2026	6,675
Thereafter	35,170
Total lease payments	66,239
Less:
Imputed interest	(9,404)
Future tenant improvement reimbursements	(426)
Operating lease liabilities	$	56,409

Organization and Summary of Significant Accounting Policies - Narrative (Details) € in Millions	12 Months Ended
	Dec. 31, 2021 USD ($) product country segment	Jan. 01, 2021 USD ($)	Jan. 03, 2020 USD ($)	Dec. 31, 2021 EUR (€) derivative_instrument
Organization And Summary Of Significant Policies [Line Items]
Number of countries with FDA approval, excluding the U.S. \| country	61
Number of operating segments \| segment	1
Impairment charge on goodwill	$ 0	$ 0	$ 0
Percent discount for prompt payment	2.00%
Discount expected to be earned	100.00%
Medicare Part D funding mandate	70.00%
Cost of goods sold is related to product	3.00%
Advertising expense	$ 31,800,000	$ 25,100,000	$ 17,900,000
Foreign Exchange Forward
Organization And Summary Of Significant Policies [Line Items]
Number of forward contract outstanding \| derivative_instrument				1
Forward contract outstanding, amount \| €				€ 9.8
Forward contract maturity (in months)	3 months
Net gain on maturity of forward contracts	$ 800,000
Maximum
Organization And Summary Of Significant Policies [Line Items]
Estimated useful lives	15 years
Resulting From Discovery Efforts
Organization And Summary Of Significant Policies [Line Items]
Number of products that entered in the commercial marketplace \| product	4
Products Derived From Other Compounds
Organization And Summary Of Significant Policies [Line Items]
Number of products that entered in the commercial marketplace \| product	2

Revenues - Revenues by Disaggregated Category (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Disaggregation of Revenue [Line Items]
Total revenues	$ 1,434,970	$ 987,538	$ 967,775
Gross product revenues
Disaggregation of Revenue [Line Items]
Total revenues	1,452,913	962,591	957,621
Discounts and allowances
Disaggregation of Revenue [Line Items]
Total revenues	(375,657)	(221,041)	(197,671)
Net product revenues
Disaggregation of Revenue [Line Items]
Total revenues	1,077,256	741,550	759,950
License revenues
Disaggregation of Revenue [Line Items]
Total revenues	249,956	167,295	165,914
Collaboration services revenues
Disaggregation of Revenue [Line Items]
Total revenues	107,758	78,693	41,911
Total collaboration revenues
Disaggregation of Revenue [Line Items]
Total revenues	$ 357,714	$ 245,988	$ 207,825

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 40
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
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-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
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-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
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-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
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-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Revenues - Net Product Revenues Disaggregated by Product (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Disaggregation of Revenue [Line Items]
Net product revenues	$ 1,434,970	$ 987,538	$ 967,775
CABOMETYX
Disaggregation of Revenue [Line Items]
Net product revenues	1,054,050	718,687	733,421
COMETRIQ
Disaggregation of Revenue [Line Items]
Net product revenues	23,206	22,863	26,529
Net product revenues
Disaggregation of Revenue [Line Items]
Net product revenues	$ 1,077,256	$ 741,550	$ 759,950

- Definition

+ References

+ Details

Revenues - Revenues Disaggregated by Significant Customer (Details) - Customer concentration risk	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Ipsen Pharma SAS \| Sales revenue, net
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	21.00%	15.00%	16.00%
Ipsen Pharma SAS \| Accounts Receivable
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	50.00%	23.00%
Affiliates of CVS Health Corporation \| Sales revenue, net
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	14.00%	14.00%	15.00%
Affiliates of CVS Health Corporation \| Accounts Receivable
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	9.00%	11.00%
Affiliates of McKesson Corporation \| Sales revenue, net
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	14.00%	12.00%	12.00%
Affiliates of McKesson Corporation \| Accounts Receivable
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	10.00%	12.00%
Affiliates of AmerisourceBergen Corporation \| Sales revenue, net
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	14.00%	11.00%	11.00%
Affiliates of AmerisourceBergen Corporation \| Accounts Receivable
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	11.00%	11.00%
Affiliates of Optum Specialty Pharmacy \| Sales revenue, net
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	8.00%	11.00%	13.00%
Takeda Pharmaceutical Company Limited \| Accounts Receivable
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Percent of total revenues	2.00%	10.00%

Revenues - Revenues Disaggregated by Geographic Region (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Disaggregation of Revenue [Line Items]
Total revenues	$ 1,434,970	$ 987,538	$ 967,775
U.S.
Disaggregation of Revenue [Line Items]
Total revenues	1,089,396	752,890	770,244
Europe
Disaggregation of Revenue [Line Items]
Total revenues	302,073	151,631	152,771
Japan
Disaggregation of Revenue [Line Items]
Total revenues	$ 43,501	$ 83,017	$ 44,760

- Definition

+ References

+ Details

Revenues - Activities and Ending Reserve Balances for Significant Categories of Discounts and Allowances (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	$ 30,536	$ 26,233
Provision related to sales made in:
Current period	374,208	220,748
Prior periods	1,449	293
Payments and customer credits issued	(357,868)	(216,738)
Balance at end of period	48,325	30,536
Chargebacks, Discounts for Prompt Payment and Other
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	9,853	7,514
Provision related to sales made in:
Current period	243,119	146,537
Prior periods	(64)	33
Payments and customer credits issued	(238,283)	(144,231)
Balance at end of period	14,625	9,853
Other Customer Credits/Fees and Co-pay Assistance
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	3,279	3,497
Provision related to sales made in:
Current period	30,728	16,162
Prior periods	(111)	(352)
Payments and customer credits issued	(25,021)	(16,028)
Balance at end of period	8,875	3,279
Rebates
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of period	17,404	15,222
Provision related to sales made in:
Current period	100,361	58,049
Prior periods	1,624	612
Payments and customer credits issued	(94,564)	(56,479)
Balance at end of period	$ 24,825	$ 17,404

Revenues - Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Revenue from Contract with Customer [Abstract]
Contract other long-term assets	$ 1,665	$ 0
Contract liabilities:
Current portion	7,814	1,790
Long-term portion	8,739	3,755
Total contract liabilities	16,553	5,545
Contract revenue recognized, including revenue from deferred revenue beginning balance	8,500	9,200	$ 6,500
Revenues recognized for performance obligations satisfied in previous periods	148,700	$ 169,700	$ 161,200
Transaction price allocated to our performance obligations	$ 87,500

Collaboration Agreements And Business Development Activities - Ipsen Collaboration Narrative (Details) $ in Millions, $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($)	Jan. 01, 2021 USD ($)	Jan. 03, 2020 USD ($)	Dec. 31, 2016 USD ($)	Dec. 31, 2021 CAD ($)
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Milestone payments earned to date	$ 462.5
Remaining performance obligation	$ 87.5
Collaboration agreement percent of royalty on net sale	3.00%
Collaborative arrangement with Ipsen
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaboration period to achieve specified levels of commercial performance	10 years
Upfront payments				$ 210.0
Milestone payments earned	$ 112.5	$ 20.0	$ 55.0
Eligible payment from collaboration for development and regulatory milestone achievement under collaborations agreement	46.5
Maximum amount eligible for commercial milestones under collaborations agreement	350.0				$ 26.5
Remaining performance obligation	$ 44.2
Research and development arrangement performed for others, reimbursement for costs incurred, percent	35.00%
Commercial sales milestone	$ 100.0
Commercial sales milestone, net sales threshold	400.0
Regulatory milestone	12.5
Collaborative arrangement with Ipsen \| Collaboration services revenues
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Cumulative catch-up revenue recognized	$ 43.2
Collaborative arrangement with Ipsen \| Minimum \| Final tier
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percent of royalty on net sale	22.00%
Collaborative arrangement with Ipsen \| Maximum \| Final tier
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percent of royalty on net sale	26.00%

Collaboration Agreements And Business Development Activities - Collaboration Revenues under the Collaboration Agreement with Ipsen (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	$ 1,434,970	$ 987,538	$ 967,775
Collaborative Arrangement with Ipsen
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	302,073	151,631	152,771
License revenues
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	249,956	167,295	165,914
License revenues \| Collaborative Arrangement with Ipsen
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	207,982	93,495	117,360
Collaboration services revenues
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	107,758	78,693	41,911
Collaboration services revenues \| Collaborative Arrangement with Ipsen
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	$ 94,091	$ 58,136	$ 35,411

- Definition

+ References

+ Details

Collaboration Agreements And Business Development Activities - Takeda Collaboration Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020	Dec. 31, 2017
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Milestone payments earned to date	$ 462.5
Collaboration agreement percent of royalty on net sale	3.00%
Remaining performance obligation	$ 87.5
Collaborative arrangement with Takeda
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Sales volume period	6 years
Upfront payments				$ 50.0
Milestone payments earned to date	$ 127.0
Milestone payments earned	35.0	$ 66.0	$ 16.0
Maximum amount eligible for commercial milestones under collaborations agreement	119.0
Amount of revenues recognized included in the beginning contract liability balance	18.9
Commercial sales milestone	20.0
Remaining performance obligation	43.3
Collaborative arrangement with Takeda \| Initial
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Royalty tier	$ 300.0
Collaborative arrangement with Takeda \| Initial \| Minimum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percent of royalty on net sale	15.00%
Collaborative arrangement with Takeda \| Initial \| Maximum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percent of royalty on net sale	24.00%
Collaborative arrangement with Takeda \| Final tier \| Minimum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percent of royalty on net sale	20.00%
Collaborative arrangement with Takeda \| Final tier \| Maximum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percent of royalty on net sale	30.00%
Collaborative arrangement with Takeda \| Japan
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research and development arrangement performed for others, reimbursement for costs incurred, percent	100.00%
Collaboration period to achieve specified levels of commercial performance	2 years

Collaboration Agreements And Business Development Activities - Collaboration Revenues under the Collaboration Agreement with Takeda (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	$ 1,434,970	$ 987,538	$ 967,775
Collaborative arrangement with Takeda
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	39,725	81,672	24,622
License revenues
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	249,956	167,295	165,914
License revenues \| Collaborative arrangement with Takeda
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	26,058	61,115	18,112
Collaboration services revenues
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	107,758	78,693	41,911
Collaboration services revenues \| Collaborative arrangement with Takeda
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	$ 13,667	$ 20,557	$ 6,510

- Definition

+ References

+ Details

Collaboration Agreements And Business Development Activities - GSK (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaboration agreement percent of royalty on net sale	3.00%
Collaborative Arrangements with Glaxo Smith Kline
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Royalty expense	$ 46.6	$ 32.7	$ 31.3

Collaboration Agreements And Business Development Activities - Other Collaborations Narrative (Details) - USD ($)	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	$ 1,434,970,000	$ 987,538,000	$ 967,775,000
Collaborative Arrangement with Genentech \| Cotellic
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	12,100,000	11,300,000	10,300,000
Collaboration Agreement with Daiichi Sankyo
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Total revenues	3,800,000	$ 1,300,000	20,100,000
Achieved milestone amount			$ 20,000,000
Maximum amount eligible for development and regulatory milestones	$ 90,000,000

- Definition

+ References

+ Details

Collaboration Agreements And Business Development Activities - Research Collaborations and In-Licensing Arrangements (Details) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended
	Dec. 31, 2021	May 31, 2021	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Research and development			$ 693,716	$ 547,851	$ 336,964
Collaborative Agreement With Gama Mabs Pharma S A
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payments to acquire assets		$ 10,000
Payment upon closing of transaction		4,000
Asset acquisition, maximum aggregate development milestone payments		42,000
Asset acquisition, maximum aggregate regulatory milestone payments		$ 22,500
Research Collaborations, In-Licensing Arrangements and Other Business Development Activities
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Potential future development milestone payments	$ 254,300		254,300
Potential regulatory milestone payments	426,500		426,500
Collaborative arrangement, rights and obligations, maximum aggregate commercial milestone payments	1,911,500		1,911,500
Research and development			$ 176,100	$ 96,400	$ 47,700
Collaboration Agreement With Iconic Therapeutics Inc
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaboration agreement, final payment	55,000
Research and development	$ 55,000

Cash and Investments - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020	Dec. 28, 2018
Investments, Debt and Equity Securities [Abstract]
Cash and cash equivalents	$ 647,169	$ 319,217
Restricted cash equivalents included in other long-term assets	16,722	1,555
Cash, cash equivalents, and restricted cash equivalents as reported within the accompanying Consolidated Statements of Cash Flows	$ 663,891	$ 320,772	$ 268,137	$ 315,875

Cash and Investments - Narrative (Details)	Dec. 31, 2021 USD ($) investment	Jan. 01, 2021 USD ($) investment
Investments, Debt and Equity Securities [Abstract]
Restricted cash equivalents	$ 15,200,000
Interest receivable	$ 2,900,000	$ 4,500,000
Number of investments in an unrealized loss position \| investment	133	14
Allowance for credit losses	$ 0	$ 0

Cash and Investments - Investments by Security Type (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Jan. 01, 2021
Debt securities available-for-sale:
Amortized Cost	$ 1,534,464	$ 1,349,982
Gross Unrealized Gains	934	5,931
Gross Unrealized Losses	(1,730)	(12)
Fair Value	1,533,668	1,355,901
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents
Amortized Cost	1,855,704	1,532,923
Gross Unrealized Gains	934	5,931
Gross Unrealized Losses	(1,730)	(12)
Fair Value	1,854,908	1,538,842
Commercial paper
Debt securities available-for-sale:
Amortized Cost	945,801	569,456
Gross Unrealized Gains	42	372
Gross Unrealized Losses	(2)	0
Fair Value	945,841	569,828
Corporate bonds
Debt securities available-for-sale:
Amortized Cost	541,774	543,520
Gross Unrealized Gains	876	5,244
Gross Unrealized Losses	(1,672)	(7)
Fair Value	540,978	548,757
U.S. Treasury and government-sponsored enterprises
Debt securities available-for-sale:
Amortized Cost	33,965	208,326
Gross Unrealized Gains	1	232
Gross Unrealized Losses	(21)	(4)
Fair Value	33,945	208,554
Municipal bonds
Debt securities available-for-sale:
Amortized Cost	12,924	28,680
Gross Unrealized Gains	15	83
Gross Unrealized Losses	(35)	(1)
Fair Value	12,904	28,762
Cash
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents
Amortized Cost	135,653	82,176
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	135,653	82,176
Money market funds
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents
Amortized Cost	66,531	40,761
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	66,531	40,761
Certificates of deposit
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents
Amortized Cost	119,056	60,004
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	$ 119,056	$ 60,004

Cash and Investments - Fair Value and Gross Unrealized Losses of Investments Available-for-Sale in an Unrealized Loss Position (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Jan. 01, 2021
Debt Securities, Available-for-sale [Line Items]
Fair Value	$ 454,780	$ 56,299
Gross Unrealized Losses	(1,730)	(12)
Corporate bonds
Debt Securities, Available-for-sale [Line Items]
Fair Value	385,053	28,445
Gross Unrealized Losses	(1,672)	(7)
Commercial paper
Debt Securities, Available-for-sale [Line Items]
Fair Value	43,290
Gross Unrealized Losses	(2)
U.S. Treasury and government-sponsored enterprises
Debt Securities, Available-for-sale [Line Items]
Fair Value	18,962	21,989
Gross Unrealized Losses	(21)	(4)
Municipal bonds
Debt Securities, Available-for-sale [Line Items]
Fair Value	7,475	5,865
Gross Unrealized Losses	$ (35)	$ (1)

Cash and Investments - Fair Value of Cash Equivalents and Investments by Contractual Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Jan. 01, 2021
Investments, Debt and Equity Securities [Abstract]
Maturing in one year or less	$ 1,168,256	$ 1,034,150
Maturing after one year through five years	365,412	321,751
Total debt securities available-for-sale	$ 1,533,668	$ 1,355,901

Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Jan. 01, 2021
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	$ 1,533,668	$ 1,355,901
Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	1,533,668	1,355,901
Total financial assets carried at fair value	1,719,255	1,456,666
Level 1 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	0	0
Total financial assets carried at fair value	66,531	40,761
Level 2 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	1,533,668	1,355,901
Total financial assets carried at fair value	1,652,724	1,415,905
Commercial paper
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	945,841	569,828
Commercial paper \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	945,841	569,828
Commercial paper \| Level 1 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	0	0
Commercial paper \| Level 2 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	945,841	569,828
Corporate bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	540,978	548,757
Corporate bonds \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	540,978	548,757
Corporate bonds \| Level 1 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	0	0
Corporate bonds \| Level 2 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	540,978	548,757
U.S. Treasury and government-sponsored enterprises
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	33,945	208,554
U.S. Treasury and government-sponsored enterprises \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	33,945	208,554
U.S. Treasury and government-sponsored enterprises \| Level 1 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	0	0
U.S. Treasury and government-sponsored enterprises \| Level 2 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	33,945	208,554
Municipal bonds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	12,904	28,762
Municipal bonds \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	12,904	28,762
Municipal bonds \| Level 1 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	0	0
Municipal bonds \| Level 2 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total debt securities available-for-sale	12,904	28,762
Money market funds \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	66,531	40,761
Money market funds \| Level 1 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	66,531	40,761
Money market funds \| Level 2 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Certificates of deposit \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	119,056	60,004
Certificates of deposit \| Level 1 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	0	0
Certificates of deposit \| Level 2 \| Fair Value, Recurring
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 119,056	$ 60,004

Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Jan. 01, 2021
Inventory [Line Items]
Raw materials	$ 8,867	$ 7,773
Work in process	27,717	20,610
Finished goods	12,927	7,291
Total	49,511	35,674
Current portion included in inventory
Inventory [Line Items]
Total	27,493	20,973
Long-term portion included in other long-term assets
Inventory [Line Items]
Total	$ 22,018	$ 14,701

Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 144,862	$ 102,068
Less: accumulated depreciation	(40,831)	(34,684)
Total property and equipment, net	$ 104,031	67,384
Leasehold improvements
Property, Plant and Equipment [Line Items]
Estimated useful lives	15 years
Total property and equipment	$ 73,589	40,694
Computer equipment and software
Property, Plant and Equipment [Line Items]
Estimated useful lives	3 years
Total property and equipment	$ 14,877	18,376
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Estimated useful lives	7 years
Total property and equipment	$ 15,780	14,931
Laboratory equipment
Property, Plant and Equipment [Line Items]
Estimated useful lives	5 years
Total property and equipment	$ 23,744	11,707
Construction in progress
Property, Plant and Equipment [Line Items]
Total property and equipment	$ 16,872	$ 16,360

Property and Equipment - Narrative (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 13.6	$ 9.1	$ 8.3

Employee Benefit Plans - Schedule of Allocated Employee Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 119,820	$ 105,070	$ 56,602
Research and development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	46,654	37,198	19,374
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation expense	$ 73,166	$ 67,872	$ 37,228

Employee Benefit Plans - Schedule of Employee Service Share - Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
ESPP
Total stock-based compensation expense	$ 119,820	$ 105,070	$ 56,602
Stock options
ESPP
Total stock-based compensation expense	19,048	19,863	23,422
Restricted stock units
ESPP
Total stock-based compensation expense	53,629	35,675	26,056
Performance stock units
ESPP
Total stock-based compensation expense	43,428	47,106	4,878
ESPP
ESPP
Total stock-based compensation expense	$ 3,715	$ 2,426	$ 2,246

Employee Benefit Plans - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended	12 Months Ended
	May 20, 2020	Mar. 31, 2021	Oct. 01, 2021	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020	Dec. 28, 2018
ESPP
Number of shares available for grant				11,004,584
Reduction in share reserve after stock option or stock appreciation award (in shares)				1
Reduction in share reserve after all other awards (in shares)				1.5
Increase in share reserve under 2017 plan (in shares)	21,000,000
Stock options granted (in shares)				2,573,000
Maximum potential to vest			25.00%
Stock-based compensation expense				$ 119,820	$ 105,070	$ 56,602
Expenses relating to stock match				$ 9,500	6,700	4,600
Minimum
ESPP
Number of months following change in control in which an employee was terminated				1 month
Maximum
ESPP
Number of months following change in control in which an employee was terminated				13 months
Stock options
ESPP
Expiration period				7 years
Total unrecognized compensation expense				$ 27,800
Unrecognized compensation expense weighted-average period for recognition				2 years 8 months 12 days
Intrinsic value of options exercised				$ 76,000	106,500	54,100
Cash received from option exercises and purchases under the ESPP				14,800	26,900	16,400
Stock-based compensation expense				$ 19,048	$ 19,863	23,422
Stock options \| Share-based Payment Arrangement, Employee
ESPP
Award vesting period				4 years
Stock options \| Share-based Payment Arrangement, Nonemployee
ESPP
Award vesting period				1 year
Restricted stock units
ESPP
Total unrecognized compensation expense				$ 123,600
Unrecognized compensation expense weighted-average period for recognition				2 years 10 months 24 days
Number of awards granted (in shares)				4,220,000
Number of awards (in shares)				6,828,000	5,378,000
Stock-based compensation expense				$ 53,629	$ 35,675	$ 26,056
Restricted stock units \| Share-based Payment Arrangement, Employee
ESPP
Award vesting period				4 years
Restricted stock units \| Share-based Payment Arrangement, Nonemployee
ESPP
Award vesting period				1 year
ESPP
ESPP
Number of shares available for grant				3,168,354
Discount rate from market value on purchase date (as a percent)				85.00%
Discount rate from market value on offering date (as a percent)				85.00%
Common stock issued (in shares)				536,226	534,419	483,009
Average price per share (in dollars per share)				$ 17.76	$ 14.55	$ 12.60
Proceeds from employee stock purchase plan				$ 9,500	$ 7,800	$ 6,100
Purchase period				6 months
Stock-based compensation expense				$ 3,715	$ 2,426	$ 2,246
Performance stock units
ESPP
Unrecognized compensation expense weighted-average period for recognition				3 years
Number of awards granted (in shares)		1,027,650		2,056,000		3,853,210	693,131
Maximum potential to vest		200.00%			200.00%	200.00%
Additional shares to be earned (in shares)		2,055,300			4,655,680
Number of awards (in shares)				6,310,000	7,378,000
Stock-based compensation expense				$ 43,428	$ 47,106	$ 4,878
Performance stock units \| Share-based Payment Arrangement, Tranche One
ESPP
Vesting award percentage		50.00%
Performance stock units \| Share-based Payment Arrangement, Tranche Two
ESPP
Award vesting period		1 year
Performance stock units \| Achieved
ESPP
Number of awards (in shares)				4,853,112
Performance stock units \| Probable
ESPP
Total unrecognized compensation expense				$ 12,100
Performance stock units \| Not Probable
ESPP
Total unrecognized compensation expense				$ 121,600
Performance Shares, Clinical Trial Results
ESPP
Number of awards granted (in shares)					2,327,840	1,926,605
Performance Shares, Achieved Before December 31, 2020
ESPP
Maximum potential to vest					150.00%
Performance Shares, Achieved Before December 31, 2021
ESPP
Maximum potential to vest				50.00%
2018 Performance Stock Units
ESPP
Number of awards vested in period (in shares)					167,726

Employee Benefit Plans - Weighted Average Grant Date Fair Value (Details) - $ / shares	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Stock options
ESPP
Weighted average grant-date fair value (in dollars per share)	$ 9.04	$ 9.44	$ 8.19
ESPP
ESPP
Weighted average grant-date fair value (in dollars per share)	$ 6.12	$ 6.12	$ 4.85

Employee Benefit Plans - Schedule of Fair Value of Employee Share-Based Payments Awards ESPP Assumptions and Weighted Average Fair Values (Details)	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Stock options
ESPP
Risk-free interest rate	0.74%	0.30%	1.77%
Dividend yield	0.00%	0.00%	0.00%
Volatility	51.00%	54.00%	48.00%
Expected life	4 years 7 months 6 days	4 years 4 months 24 days	4 years 3 months 18 days
ESPP
ESPP
Risk-free interest rate	0.08%	0.79%	2.16%
Dividend yield	0.00%	0.00%	0.00%
Volatility	47.00%	52.00%	50.00%
Expected life	6 months	6 months	6 months

Employee Benefit Plans - Summary of All Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) $ / shares shares
Shares
Options outstanding at beginning of the year (in shares) \| shares	16,129
Granted (in shares) \| shares	2,573
Exercised (in shares) \| shares	(4,486)
Cancelled (in shares) \| shares	(545)
Options outstanding at ending of the year (in shares) \| shares	13,671
Exercisable at end of the year (in shares) \| shares	9,962
Weighted Average Exercise Price
Options outstanding at beginning of the year (in dollars per share) \| $ / shares	$ 12.72
Granted (in dollars per share) \| $ / shares	21.33
Exercised (in dollars per share) \| $ / shares	4.23
Cancelled (in dollars per share) \| $ / shares	21.15
Options outstanding at ending of the year (in dollars per share) \| $ / shares	16.79
Exercisable at end of the year (in dollars per share) \| $ / shares	$ 15.23
Weighted average remaining contractual term, options outstanding	3 years 3 months 18 days
Weighted average remaining contractual term, exercisable at end of the year	2 years 4 months 24 days
Aggregate intrinsic value, options outstanding \| $	$ 48,860,000
Aggregate intrinsic value, exercisable at end of the year \| $	$ 48,171,000

Employee Benefit Plans - Summary of All RSU & PSU Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2021	Jan. 03, 2020	Dec. 28, 2018
Restricted stock units
Shares
Awards outstanding at beginning of period (in shares)		5,378,000
Awarded (in shares)		4,220,000
Vested and released (in shares)		(2,020,000)
Forfeited (in shares)		(750,000)
Awards outstanding at end of period (in shares)		6,828,000
Weighted Average Grant Date Fair Value
Awards outstanding at beginning of period (in dollars per share)		$ 21.96
Awarded (in dollars per share)		21.34
Vested and released (in dollars per share)		22.03
Forfeited (in dollars per share)		21.69
Awards outstanding at end of period (in dollars per share)		$ 21.58
Weighted Average Remaining Contractual Term		1 year 8 months 12 days
Aggregate Intrinsic Value		$ 124,824,000
Performance stock units
Shares
Awards outstanding at beginning of period (in shares)		7,378,000
Awarded (in shares)	1,027,650	2,056,000	3,853,210	693,131
Vested and released (in shares)		(2,388,000)
Forfeited (in shares)		(736,000)
Awards outstanding at end of period (in shares)		6,310,000
Weighted Average Grant Date Fair Value
Awards outstanding at beginning of period (in dollars per share)		$ 21.70
Awarded (in dollars per share)		24.54
Vested and released (in dollars per share)		19.76
Forfeited (in dollars per share)		22.57
Awards outstanding at end of period (in dollars per share)		$ 23.00
Weighted Average Remaining Contractual Term		3 years
Aggregate Intrinsic Value		$ 98,121,000

Employee Benefit Plans - Estimate Grant-Date Fair Value (Details) - Performance stock units	12 Months Ended
	Dec. 31, 2021 $ / shares
ESPP
Weighted average grant date fair value, awarded (in dollars per share)	$ 24.54
Fair value of the Company's common stock on grant date (in dollars per share)	$ 21.31
Expected volatility	49.00%
Risk-free interest rate	0.29%
Dividend yield	0.00%

Provision For Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Current:
Federal	$ 11,338	$ 0	$ 0
State	5,224	3,791	6,095
Total current tax expense	16,562	3,791	6,095
Deferred:
Federal	46,416	14,886	71,580
State	113	379	(578)
Total deferred tax expense	46,529	15,265	71,002
Provision for income taxes	$ 63,091	$ 19,056	$ 77,097

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Provision For Income Taxes - Schedule of Reconciliation of Income Taxes at the Statutory Federal Income Tax Rate to Net Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Income Tax Disclosure [Abstract]
U.S. federal income tax provision at statutory rate	$ 61,772	$ 27,476	$ 83,603
State tax (benefit) expense	1,336	(2,232)	1,148
Change in valuation allowance	2,883	5,525	3,208
Research credits	(6,263)	(11,356)	(8,299)
Stock-based compensation	(11,831)	(20,399)	(9,177)
Non-deductible executive compensation	11,182	18,067	4,228
Branded prescription drug fee	2,897	2,537	1,099
Other	1,115	(562)	1,287
Provision for income taxes	$ 63,091	$ 19,056	$ 77,097

Provision For Income Taxes - Schedule of Deferred Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Jan. 01, 2021
Deferred tax assets:
Net operating loss carryforwards	$ 17,993	$ 37,454
Tax credit carryforwards	101,460	126,625
Depreciation and amortization	7,764	18,414
Stock-based compensation	23,162	19,818
Lease liabilities	12,385	11,908
Accruals and reserves not currently deductible	19,531	12,207
Deferred revenue	8,040	7,637
Other assets	1,303	0
Total deferred tax assets	191,638	234,063
Valuation allowance	(70,068)	(67,185)
Net deferred tax assets	121,570	166,878
Deferred tax liabilities:
Lease right-of-use assets	(9,907)	(9,510)
Other liabilities	0	(657)
Total deferred tax liabilities	(9,907)	(10,167)
Net deferred taxes	$ 111,663	$ 156,711

Provision For Income Taxes - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020	Dec. 28, 2018
Income Tax Examination [Line Items]
Valuation allowance	$ 70,068	$ 67,185
Valuation allowance increase (decrease)	2,900	5,500
Unrecognized tax benefits	83,583	$ 80,941	$ 79,078	$ 76,060
Unrecognized tax benefits that would reduce income tax provision and effective tax rate	52,600
Federal
Income Tax Examination [Line Items]
Research and development tax credits	101,000
State and Local Jurisdiction
Income Tax Examination [Line Items]
Net operating loss carryforwards	426,000
State and Local Jurisdiction \| Research Tax Credit Carryforward
Income Tax Examination [Line Items]
Research and development tax credits	45,000
Tax credit carryforward amount with expiration dates	$ 2,000

Provision For Income Taxes - Schedule of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward]
Beginning balance	$ 80,941	$ 79,078	$ 76,060
Change relating to prior year provision	728	591	589
Change relating to current year provision	2,215	3,305	2,429
Reductions based on the lapse of the applicable statutes of limitations	(301)	(2,033)	0
Ending balance	$ 83,583	$ 80,941	$ 79,078

Net Income Per Share - Computation of Basic and Diluted Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Numerator:
Net income	$ 231,063	$ 111,781	$ 321,012
Denominator:
Weighted-average common shares outstanding - basic (in shares)	314,884	308,271	302,584
Dilutive securities (in shares)	7,475	9,730	12,425
Weighted-average common shares outstanding - diluted (in shares)	322,359	318,001	315,009
Net income per share, basic (in dollars per share)	$ 0.73	$ 0.36	$ 1.06
Net income per share, diluted (in dollars per share)	$ 0.72	$ 0.35	$ 1.02

- Definition

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

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- 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.

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- 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 - Potentially Dilutive Shares of Common Stock (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Share-based Payment Arrangement
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities and contingently issuable shares excluded (in shares)	14,305	10,959	9,111

Commitments and Contingencies - Narrative (Details)	1 Months Ended	12 Months Ended
Commitments and Contingencies - Narrative (Details)	Oct. 31, 2019 USD ($) ft² renewal_options $ / ft²	Dec. 31, 2021 USD ($) ft² renewal_options	Jan. 01, 2021 USD ($)	Jan. 03, 2020 USD ($)	Jan. 31, 2019 USD ($)
Lessee, Lease, Description [Line Items]
Cash paid for amounts included in the measurement of lease liabilities		$ 5,000,000	$ 4,600,000	$ 2,900,000
Weighted average operating discount rate used to determine the operating lease liability		3.10%
Weighted average remaining lease term for operating lease		9 years 9 months 18 days
Future tenant improvement reimbursements		$ 426,000
Other long-term assets		36,800,000
Restricted cash equivalents		15,200,000
Standby Letters of Credit
Lessee, Lease, Description [Line Items]
Line of credit borrowing capacity		$ 16,700,000	$ 1,600,000
Headquarters Lease
Lessee, Lease, Description [Line Items]
Area of leased property (in sqft) \| ft²		254,690
Number of options to extend the lease \| renewal_options		2
Renewal term		5 years
Tenant lease improvements allowance					$ 8,200,000
Headquarters Lease, April 2019 Amendment
Lessee, Lease, Description [Line Items]
Tenant lease improvements allowance		$ 1,700,000
Headquarters Lease, December 2020 Amendment
Lessee, Lease, Description [Line Items]
Tenant lease improvements allowance		$ 1,400,000
Headquarters Lease, 2021 Amendment
Lessee, Lease, Description [Line Items]
Area of leased property (in sqft) \| ft²		25,749
Built-To-Suit Lease
Lessee, Lease, Description [Line Items]
Area of leased property (in sqft) \| ft²	220,000
Number of options to extend the lease \| renewal_options	2
Renewal term	5 years
Build-to-suit lease period	242 months
Currently estimated amount	$ 700,000
Annual increase percentage	3.00%
Payment commencement period	60 days
Future tenant improvement reimbursements	$ 16,500,000
Area of property available for lease (in squire feet) \| $ / ft²	525
Percentage of excess costs	50.00%
Option to terminate lease (after period)	180 months

Commitments and Contingencies - Balance Sheet Classification of Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Jan. 01, 2021
Assets:
Right-of-use assets included in other long-term assets	$ 45,122	$ 43,010
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other long-term assets	Other long-term assets
Liabilities:
Current portion included in other current liabilities	$ 5,137	$ 3,025
Long-term portion of operating lease liabilities	51,272	49,086
Total operating lease liabilities	$ 56,409	$ 52,111
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Other current liabilities	Other current liabilities

Commitments And Contingencies - Components of Lease Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Jan. 01, 2021	Jan. 03, 2020
Commitments and Contingencies Disclosure [Abstract]
Operating lease cost	$ 5,332	$ 4,825	$ 2,844
Variable lease cost	2,685	2,830	1,024
Total operating lease costs	$ 8,017	$ 7,655	$ 3,868

Commitments and Contingencies - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Jan. 01, 2021
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2022	$ 5,638
2023	5,995
2024	6,283
2025	6,478
2026	6,675
Thereafter	35,170
Total lease payments	66,239
Less:
Imputed interest	(9,404)
Future tenant improvement reimbursements	(426)
Operating lease liabilities	$ 56,409	$ 52,111