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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2013	Apr. 26, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	VERTEX PHARMACEUTICALS INC / MA
Entity Central Index Key	0000875320
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		221,400,864

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Revenues:
Product revenues, net	$ 267,381	$ 375,375
Royalty revenues	43,573	38,981
Collaborative revenues	17,414	24,381
Total revenues	328,368	438,737
Costs and expenses:
Cost of product revenues	30,955	25,918
Royalty expenses	11,788	13,293
Research and development expenses	218,095	196,371
Sales, general and administrative expenses	92,879	111,146
Restructuring expense	39	360
Intangible asset impairment charge (Note I)	412,900	0
Total costs and expenses	766,656	347,088
Income (loss) from operations	(438,288)	91,649
Other income (expense), net	(4,652)	(3,741)
Income (loss) before provision for (benefit from) income taxes	(442,940)	87,908
Provision for (benefit from) income taxes	(130,313)	32
Net income (loss)	(312,627)	87,876
Net loss (income) attributable to noncontrolling Interest (Alios)	4,611	3,714
Net income (loss) attributable to Vertex	$ (308,016)	$ 91,590
Net income (loss) per share attributable to Vertex common shareholders:
Basic (usd per share)	$ (1.43)	$ 0.44
Diluted (usd per share)	$ (1.43)	$ 0.43
Shares used in per share calculations:
Basic (shares)	215,421	208,018
Diluted (shares)	215,421	219,264

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract]
Net income (loss)	$ (312,627)	$ 87,876
Changes in other comprehensive income (loss):
Unrealized holding gains (losses) on marketable securities, net of tax	11	150
Foreign currency translation adjustment	(610)	275
Total changes in other comprehensive income (loss)	(599)	425
Comprehensive income (loss)	(313,226)	88,301
Comprehensive loss (income) attributable to noncontrolling interest (Alios)	4,611	3,714
Comprehensive income (loss) attributable to Vertex	$ (308,615)	$ 92,015

- Definition

The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the reporting entity. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, but excludes any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent.

+ References + Details

- Definition

The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to noncontrolling interests. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent.

+ References + Details

- Definition

The change in equity [net assets] of a business enterprise during a period from transactions and other events and circumstances from non-owner sources which are attributable to the economic entity, including both controlling (parent) and noncontrolling interests. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners, including any and all transactions which are directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent.

+ References + Details

- Definition

Net of tax amount of unrealized holding gain (loss) before reclassification adjustments and transfers on available-for-sale securities.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 10A
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=20435746&loc=SL7669646-108580

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
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-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e637-108580

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 115
-Paragraph 13
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 130
-Paragraph 17, 22
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 130
-Paragraph 24
-Subparagraph b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph c(3)
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 45
-Paragraph 19
-URI http://asc.fasb.org/extlink&oid=7656940&loc=SL4569616-111683

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 55
-Paragraph 4K
-URI http://asc.fasb.org/extlink&oid=18733213&loc=SL4591552-111686

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 50
-Paragraph 1A
-Subparagraph (a),(c)
-URI http://asc.fasb.org/extlink&oid=18733093&loc=SL4573702-111684

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
-SubTopic 10
-Section 55
-Paragraph 4J
-URI http://asc.fasb.org/extlink&oid=18733213&loc=SL4591551-111686

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 29
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph c(1)
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 5
-Subparagraph b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph A1, A4, A5
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

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

Mar. 31, 2013

Dec. 31, 2012

Current assets:

Cash and cash equivalents

^[1]

$ 379,099

$ 489,407

Marketable securities, available for sale

^[1]

860,255

831,808

Restricted cash and cash equivalents (Alios)

^[1]

63,008

69,983

Accounts receivable, net

^[1]

194,054

143,250

Inventories

^[1]

21,532

30,464

Prepaid expenses and other current assets

^[1]

47,835

24,673

Total current assets

^[1]

1,565,783

1,589,585

Restricted cash

^[1]

31,934

Property and equipment, net

^[1]

504,232

433,609

Intangible assets

^[1]

250,600

663,500

Goodwill

^[1]

30,992

Other assets

^[1]

8,693

9,668

Total assets

^[1]

2,392,234

2,759,288

Current liabilities:

Accounts payable

^[1]

59,627

101,292

Accrued expenses

^[1]

274,061

264,884

Deferred revenues, current portion

^[1]

35,533

27,566

Accrued restructuring expense, current portion

^[1]

4,911

4,758

Capital lease obligations, current portion

^[1]

8,302

13,707

Other liabilities, current portion

^[1]

25,205

20,417

Total current liabilities

^[1]

407,639

432,624

Deferred revenues, excluding current portion

^[1]

90,297

96,242

Accrued restructuring expense, excluding current portion

^[1]

17,548

18,570

Capital lease obligations, excluding current portion

^[1]

14,755

15,170

Convertible senior subordinated notes (due 2015)

^[1]

400,000

Deferred tax liability

^[1]

151,664

280,367

Construction financing lease obligation

^[1]

316,821

268,031

Other liabilities, excluding current portion

^[1]

16,678

13,902

Total liabilities

^[1]

1,415,402

1,524,906

Commitments and contingencies

^[1]

Redeemable noncontrolling interest (Alios)

^[1]

38,872

38,530

Shareholders’ equity:

Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding at March 31, 2013 and December 31, 2012

^[1]

Common stock, $0.01 par value; 300,000,000 shares authorized at March 31, 2013 and December 31, 2012; 218,651,704 and 217,286,868 shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively

^[1]

2,160

2,149

Additional paid-in capital

^[1]

4,574,987

4,519,448

Accumulated other comprehensive loss

^[1]

(1,149)

(550)

Accumulated deficit

^[1]

(3,829,883)

(3,521,867)

Total Vertex shareholders’ equity

^[1]

746,115

999,180

Noncontrolling interest (Alios)

^[1]

191,845

196,672

Total shareholders’ equity

^[1]

937,960

1,195,852

Total liabilities and shareholders’ equity

^[1]

$ 2,392,234

$ 2,759,288

[1]

Amounts include the assets and liabilities of Vertex’s variable interest entity (“VIE”), Alios BioPharma, Inc. (“Alios”). Vertex’s interests and obligations with respect to the VIE’s assets and liabilities are limited to those accorded to Vertex in its agreement with Alios. See Note C, "Collaborative Arrangements," to these condensed consolidated financial statements for amounts.

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	218,651,704	217,286,868
Common stock, shares outstanding	218,651,704	217,286,868

Condensed Consolidated Statements of Shareholders' Equity and Noncontrolling Interest - USD ($)
shares in Thousands, $ in Thousands

Total

Total Vertex Shareholders' Equity

Common Stock

Additional Paid-in Capital

Accumulated Other Comprehensive Income (Loss)

Accumulated Deficit

Noncontrolling Interest (Alios)

Redeemable Noncontrolling Interest (Alios)

Balance (shares) at Dec. 31, 2011

209,304

Balance at Dec. 31, 2011

$ 928,476

$ 786,843

$ 2,072

$ 4,200,659

$ (1,053)

$ (3,414,835)

$ 141,633

$ 37,036

Increase (Decrease) in Stockholders' Equity

Unrealized holding gains (losses) on marketable securities, net of tax

150

Foreign currency translation adjustment

275

Net income (loss) attributable to Vertex common shareholders

91,590

Net income (loss)

87,876

91,590

(3,714)

Issuances of common stock:

Benefit plans (shares)

1,559

Benefit plans

23,599

23,536

$ 15

23,521

Stock-based compensation expense

27,938

27,877

Tax benefit from equity compensation

227

Change in liquidation value of noncontrolling interest

(460)

460

Balance (shares) at Mar. 31, 2012

210,863

Balance at Mar. 31, 2012

1,068,081

930,498

$ 2,087

4,252,284

(628)

(3,323,245)

137,583

37,496

Balance (shares) at Dec. 31, 2012

217,287

Balance at Dec. 31, 2012

1,195,852

^[1]

999,180

$ 2,149

4,519,448

(550)

(3,521,867)

196,672

38,530

Increase (Decrease) in Stockholders' Equity

Unrealized holding gains (losses) on marketable securities, net of tax

Foreign currency translation adjustment

(610)

Net income (loss) attributable to Vertex common shareholders

(308,016)

Net income (loss)

(312,627)

(308,016)

(4,611)

Issuances of common stock:

Benefit plans (shares)

1,365

Benefit plans

24,102

24,099

$ 11

24,088

Stock-based compensation expense

31,574

31,451

123

Change in liquidation value of noncontrolling interest

(342)

342

Balance (shares) at Mar. 31, 2013

218,652

Balance at Mar. 31, 2013

$ 937,960

^[1]

$ 746,115

$ 2,160

$ 4,574,987

$ (1,149)

$ (3,829,883)

$ 191,845

$ 38,872

[1]

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

3 Months Ended

Mar. 31, 2013

Mar. 31, 2012

Cash flows from operating activities:

Net income (loss)

$ (312,627)

$ 87,876

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

Depreciation and amortization expense

10,691

8,560

Stock-based compensation expense

31,275

27,688

Other non-cash based compensation expense

2,432

2,292

Intangible asset impairment charge

412,900

Deferred income taxes

(128,703)

(2,281)

Loss on disposal of property and equipment

Other non-cash items, net

(998)

Changes in operating assets and liabilities:

Accounts receivable, net

(48,834)

(49,093)

Inventories

9,231

(16,915)

Prepaid expenses and other current assets

(24,986)

(20,541)

Accounts payable

(40,571)

(1,400)

Accrued expenses and other liabilities

23,236

(15,769)

Excess tax benefit from share-based payment arrangements

(227)

Accrued restructuring expense

(869)

(840)

Deferred revenues

2,022

(16,452)

Net cash provided by (used in) operating activities

(65,778)

2,916

Cash flows from investing activities:

Purchases of marketable securities

(458,971)

(403,179)

Sales and maturities of marketable securities

430,535

183,987

Expenditures for property and equipment

(16,607)

(6,155)

Decrease (increase) in restricted cash and cash equivalents (Alios)

6,975

(6,139)

Decrease (increase) in other assets

472

(216)

Net cash used in investing activities

(37,596)

(231,702)

Cash flows from financing activities:

Excess tax benefit from share-based payment arrangements

227

Issuances of common stock from employee benefit plans

21,670

21,298

Payments on capital lease obligations

(10,096)

Payments on construction financing lease obligation

(17,709)

Net cash provided by (used in) financing activities

(6,135)

21,525

Effect of changes in exchange rates on cash

(799)

(136)

Net increase (decrease) in cash and cash equivalents

(110,308)

(207,397)

Cash and cash equivalents—beginning of period

489,407

^[1]

475,320

Cash and cash equivalents—end of period

379,099

^[1]

267,923

Supplemental disclosure of cash flow information:

Cash paid for income taxes

1,541

Capitalization of construction in-process related to construction financing lease obligation

$ 66,052

$ 38,229

[1]

Basis of Presentation and Accounting Policies	3 Months Ended
Basis of Presentation and Accounting Policies	Mar. 31, 2013
Accounting Policies [Abstract]
Basis of Presentation and Accounting Policies	Basis of Presentation and Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared by Vertex Pharmaceuticals Incorporated ("Vertex" or the "Company") in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The condensed consolidated financial statements reflect the operations of (i) the Company, (ii) its wholly-owned subsidiaries and (iii) Alios BioPharma, Inc. (“Alios”), a collaborator that is a variable interest entity (a “VIE”) for which the Company is deemed under applicable accounting guidance to be the primary beneficiary. All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. Certain information and footnote disclosures normally included in the Company's annual financial statements have been condensed or omitted. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments (including accruals) necessary for a fair presentation of the financial position and results of operations for the interim periods ended March 31, 2013 and 2012. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full fiscal year. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2012, which are contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 that was filed with the Securities and Exchange Commission (the "SEC") on March 1, 2013 (the "2012 Annual Report on Form 10-K"). Use of Estimates and Summary of Significant Accounting Policies The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. Significant estimates in these condensed consolidated financial statements have been made in connection with the calculation of revenues, inventories, research and development expenses, stock-based compensation expense, restructuring expense, the fair value of intangible assets, noncontrolling interest (Alios) and the income tax provision. The Company bases its estimates on historical experience and various other assumptions, including in certain circumstances future projections, that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known. The Company's significant accounting policies are described in Note A, "Nature of Business and Accounting Policies," in the 2012 Annual Report on Form 10-K. Recent Accounting Pronouncements For a discussion of recent accounting pronouncements please refer to Note A, "Nature of Business and Accounting Policies—Recent Accounting Pronouncements," in the 2012 Annual Report on Form 10-K. The Company did not adopt any new accounting pronouncements during the three months ended March 31, 2013 that had a material effect on the Company's condensed consolidated financial statements.

Product Revenues, Net

3 Months Ended

Mar. 31, 2013

Product Revenues [Abstract]

Product Revenues, Net

The Company sells its products principally to a limited number of major and selected regional wholesalers and specialty pharmacy providers in North America that subsequently resell the products to patients and health care providers, as well as government-owned and supported customers in Europe (collectively, its “Customers”). The Company recognizes net revenues from product sales upon delivery as long as (i) there is persuasive evidence that an arrangement exists between the Company and the Customer, (ii) collectibility is reasonably assured and (iii) the price is fixed or determinable.

The Company has written contracts with its Customers and delivery occurs when a Customer receives a shipment of a product. The Company evaluates the creditworthiness of each of its Customers to determine whether revenues can be recognized upon delivery, subject to satisfaction of the other requirements, or whether recognition is required to be delayed until receipt of payment. In order to conclude that the price is fixed or determinable, the Company must be able to (i) calculate its gross product revenues from sales to Customers and (ii) reasonably estimate its net product revenues. The Company calculates gross product revenues based on the price that the Company charges its Customers. The Company estimates its net product revenues by deducting from its gross product revenues (a) trade allowances, such as invoice discounts for prompt payment and customer fees, (b) estimated government and private payor rebates, chargebacks and discounts, (c) estimated reserves for expected product returns and (d) estimated costs of incentives offered to certain indirect customers, including patients.

The following table summarizes activity in each of the product revenue allowance and reserve categories for the three months ended March 31, 2013:



	Trade Allowances			Rebates, Chargebacks and Discounts			Product Returns			Other Incentives			Total
	(in thousands)
Balance at December 31, 2012	$	5,416		$	63,560		$	2,852		$	3,565		$	75,393
Provision related to current period sales	11,226			52,334			872			3,720			68,152
Adjustments related to prior period sales	107			1,644			8,209			(138		)	9,822
Credits/payments made	(11,728		)	(51,132		)	(1,009		)	(3,883		)	(67,752		)
Balance at March 31, 2013	$	5,021		$	66,406		$	10,924		$	3,264		$	85,615

Collaborative Arrangements

3 Months Ended

Mar. 31, 2013

Collaborative Arrangements

Collaborative Arrangements

Janssen Pharmaceutica, N.V.

In 2006, the Company entered into a collaboration agreement with Janssen Pharmaceutica, N.V. ("Janssen") for the development, manufacture and commercialization of telaprevir, which Janssen began marketing under the brand name INCIVO in certain of its territories in September 2011. Under the collaboration agreement, Janssen agreed to be responsible for 50% of the drug development costs incurred under the development program for the parties’ territories (North America for the Company, and the rest of the world, other than specified countries in Asia, for Janssen) and has exclusive rights to commercialize telaprevir in its territories including Europe, South America, the Middle East, Africa and Australia.

Janssen pays the Company a tiered royalty averaging in the mid-20% range as a percentage of net sales of INCIVO in Janssen’s territories. Janssen is required under the agreement to use diligent efforts to maximize net sales of INCIVO in its territories through its commercial marketing, pricing and contracting strategies. Janssen is responsible for certain third-party royalties on net sales of INCIVO in its territories.

Janssen made a $165.0 million up-front license payment to the Company in 2006. The up-front license payment is being amortized over the Company’s estimated period of performance under the collaboration agreement. As of March 31, 2013, there were $40.4 million in deferred revenues related to this up-front license payment that the Company expects to recognize over the remaining estimated period of performance.

Under the collaboration agreement, Janssen agreed to make contingent milestone payments for successful development, approval and launch of telaprevir as a product in its territories. At the inception of the agreement, the Company determined that all of these contingent milestones were substantive and would result in revenues in the period in which the milestone was achieved. The Company has earned $350.0 million of these contingent milestone payments and does not expect to receive any further milestone payments under this agreement.

Under the Janssen collaboration agreement, each party incurs internal and external reimbursable expenses related to the telaprevir development program and is reimbursed by the other party for 50% of these expenses. The Company recognizes the full amount of the reimbursable costs it incurs as research and development expenses on its condensed consolidated statements of operations. The Company recognizes the amounts that Janssen is obligated to pay the Company with respect to reimbursable expenses, net of reimbursable expenses incurred by Janssen, as collaborative revenues. In the three months ended March 31, 2013 and 2012, Janssen incurred more reimbursable costs than the Company, and the net amounts payable by the Company to reimburse Janssen were recorded as a reduction of collaborative revenues.

Each of the parties is responsible for drug supply in its territories. During the three months ended March 31, 2013 and 2012, the Company provided Janssen certain services through the Company’s third-party manufacturing network for telaprevir. Reimbursements from Janssen for these manufacturing services were recorded as collaborative revenues.

Janssen may terminate the collaboration agreement upon the later of (i) one year’s advance notice and (ii) such period as may be required to assign and transfer to the Company specified filings and approvals. The agreement also may be terminated by either party for a material breach by the other, subject to notice and cure provisions. Unless earlier terminated, the agreement will continue in effect until the expiration of Janssen’s royalty obligations, which expire on a country-by-country basis on the later of (a) the last-to-expire patent covering INCIVO or (b) ten years after the first commercial sale in the country. In the European Union, the Company has a patent covering the composition-of-matter of INCIVO that expires in 2026.

During the three months ended March 31, 2013 and 2012, the Company recognized the following revenues attributable to the Janssen collaboration:



	Three Months Ended March 31,
	2013			2012
	(in thousands)
Royalty revenues	$	39,044		$	32,884
Collaborative revenues:
Amortized portion of up-front payment	$	3,107		$	3,107
Net reimbursement (payment) for telaprevir development costs	(27		)	(1,139		)
Reimbursement for manufacturing services	10,299			4,449
Total collaborative revenues attributable to the Janssen collaboration	$	13,379		$	6,417
Total revenues attributable to the Janssen collaboration	$	52,423		$	39,301

Mitsubishi Tanabe Pharma Corporation

The Company has a collaboration agreement (the “MTPC Agreement”) with Mitsubishi Tanabe Pharma Corporation ("Mitsubishi Tanabe") pursuant to which Mitsubishi Tanabe has a fully-paid license to manufacture and commercialize TELAVIC (the brand name under which Mitsubishi Tanabe is marketing telaprevir) in Japan and other specified countries in Asia.

The parties entered into the MTPC Agreement in 2004 and amended it in 2009. Pursuant to the MTPC Agreement, Mitsubishi Tanabe provided financial and other support for the development and commercialization of telaprevir, made a $105.0 million payment in connection with the 2009 amendment of the collaboration agreement and made a $65.0 million commercial milestone payment recognized as collaborative revenues in 2011. There are no further payments under this collaboration agreement. Mitsubishi Tanabe is responsible for its own development and manufacturing costs in its territory.

Mitsubishi Tanabe may terminate the MTPC Agreement at any time without cause upon 60 days’ prior written notice to the Company. The MTPC Agreement also may be terminated by either party for a material breach by the other, subject to notice and cure provisions. Unless earlier terminated, the MTPC Agreement will continue in effect until the expiration of the last-to-expire patent covering telaprevir in Mitsubishi Tanabe's territories. In Japan, the Company has a patent covering the composition-of-matter of telaprevir that expires in 2021.

The $105.0 million payment that the Company received in 2009 in connection with the amendment to the MTPC Agreement was a nonrefundable, up-front license fee, and revenues related to the 2009 payment were recognized on a straight-line basis over the period of performance of the Company’s obligations under the amended agreement. The final deferred revenues related to the 2009 up-front license payment were recognized in April 2012. In connection with the amendment to the MTPC Agreement, the Company supplied manufacturing services to Mitsubishi Tanabe, until April 2012, through the Company’s third-party manufacturing network for telaprevir.

The Company recognized no collaborative revenues attributable to the Mitsubishi Tanabe collaboration in the first quarter of 2013 and $14.0 million in collaborative revenues attributable to the Mitsubishi Tanabe collaboration in the first quarter of 2012.

Cystic Fibrosis Foundation Therapeutics Incorporated

In April 2011, the Company entered into an amendment (the “April 2011 Amendment”) to its existing collaboration agreement with Cystic Fibrosis Foundation Therapeutics Incorporated (“CFFT”) pursuant to which CFFT agreed to provide financial support for (i) development activities for VX-661, a corrector compound discovered under the collaboration, and (ii) additional research and development activities directed at discovering new corrector compounds.

The Company entered into the original collaboration agreement with CFFT in 2004 and amended it several times prior to 2011 to, among other things, provide partial funding for its cystic fibrosis drug discovery and development efforts. In 2006, the Company received a $1.5 million milestone payment from CFFT. There are no additional milestones payable by CFFT to the Company pursuant to the collaboration agreement, as amended. Under the April 2011 Amendment, CFFT agreed to provide the Company with up to $75.0 million in funding over approximately five years for corrector-compound research and development activities. The Company retains the right to develop and commercialize KALYDECO (ivacaftor), VX-809, VX-661 and any other compounds discovered during the course of the research collaboration with CFFT. The Company recognized collaborative revenues from this collaboration of $3.6 million and $3.9 million in the three months ended March 31, 2013 and 2012, respectively.

In the original agreement, as amended prior to the April 2011 Amendment, the Company agreed to pay CFFT tiered royalties calculated as a percentage, ranging from single digits to sub-teens, of annual net sales of any approved drugs discovered during the research term that ended in 2008, including KALYDECO, VX-809 and VX-661. The April 2011 Amendment provides for a tiered royalty in the same range on net sales of corrector compounds discovered during the research term that began in 2011. In each of the third quarter of 2012 and first quarter of 2013, CFFT earned a commercial milestone payment of $9.3 million from the Company upon achievement of certain sales levels for KALYDECO. These milestones were reflected in the Company's cost of product revenues. There are no additional commercial milestone payments payable by the Company to CFFT related to sales levels for KALYDECO. The Company also is obligated to make up to two one-time commercial milestone payments to CFFT upon achievement of certain sales levels for corrector compounds such as VX-809 or VX-661.

The Company began marketing KALYDECO in the United States in the first quarter of 2012 and began marketing KALYDECO in certain countries in the European Union in the third quarter of 2012. The Company has royalty obligations to CFFT for each compound commercialized pursuant to this collaboration until the expiration of patents covering that compound. The Company has patents in the United States and European Union covering the composition-of-matter of ivacaftor that expire in 2027 and 2025, respectively, subject to potential patent life extensions. CFFT may terminate its funding obligations under the collaboration, as amended, in certain circumstances, in which case there will be a proportional adjustment to the royalty rates and commercial milestone payments for certain corrector compounds. The collaboration also may be terminated by either party for a material breach by the other, subject to notice and cure provisions.

Alios BioPharma, Inc.

License and Collaboration Agreement

In June 2011, the Company entered into a license and collaboration agreement (the “Alios Agreement”) with Alios, a privately-held biotechnology company. The Company and Alios are collaborating on the research, development and commercialization of an HCV nucleotide analogue discovered by Alios, ALS-2200 (now formulated as VX-135), which is designed to act on the HCV polymerase.

Under the terms of the Alios Agreement, the Company received exclusive worldwide rights to ALS-2200 (VX-135) and ALS-2158, a second HCV nucleotide analogue discovered by Alios that was only developed pursuant to the Alios Agreement through the third quarter of 2012. The Company has the option to select additional compounds discovered in the research program. Upon entering into the Alios Agreement, the Company paid Alios a $60.0 million up-front payment. As of March 31, 2013, Alios had earned an aggregate of $60.0 million in development milestone payments pursuant to the Alios Agreement, including a $25.0 million milestone payment in 2012. The Alios Agreement provides for development milestone payments to Alios of up to an additional $312.5 million if VX-135 is approved and commercialized. The Alios Agreement also provides for additional development milestone payments to Alios if a second HCV nucleotide analogue is approved and commercialized. In addition, Alios is eligible to receive commercial milestone payments of up to $750.0 million, as well as tiered royalties on net sales of approved drugs.

Alios and the Company began clinical development of ALS-2200 (VX-135) in December 2011. The Company is responsible for all costs related to development, commercialization and manufacturing of compounds licensed to the Company pursuant to the Alios Agreement, provided funding to Alios to conduct the Phase 1 clinical trials associated with the Alios Agreement and is providing funding for a research program directed to the discovery of additional HCV nucleotide analogues that act on the HCV polymerase.

The Company may terminate the Alios Agreement (i) upon 30 days’ notice to Alios if the Company ceases development after VX-135 has experienced a technical failure and/or (ii) upon 60 days’ notice to Alios at any time after the Company completes specified Phase 2a clinical trials. The Alios Agreement also may be terminated by either party for a material breach by the other, and by Alios for the Company’s inactivity or if the Company challenges certain Alios patents, in each case subject to notice and cure provisions. Unless earlier terminated, the Alios Agreement will continue in effect until the expiration of the Company’s royalty obligations, which expire on a country-by-country basis on the later of (a) the date the last-to-expire patent covering a licensed product expires or (b) ten years after the first commercial sale in the country.

Alios is continuing to operate as a separate entity, is engaged in other programs directed at developing novel drugs that are not covered by the Alios Agreement and maintains ownership of the underlying patent rights that are licensed to the Company pursuant to the Alios Agreement. Under applicable accounting guidance, the Company has determined that Alios is a VIE, that Alios is a business and that the Company is Alios’ primary beneficiary. The Company based these determinations on, among other factors, the significance to Alios of the licensed compounds and on the Company’s power, through the joint steering committee for the licensed compounds established under the Alios Agreement, to direct the activities that most significantly affect the economic performance of Alios.

Accordingly, the Company consolidated Alios’ statements of operations and balance sheet with the Company’s consolidated financial statements beginning on June 13, 2011. However, the Company’s interests in Alios are limited to those accorded to the Company in the Alios Agreement. In particular, the Company did not acquire any equity interest in Alios, any interest in Alios’ cash and cash equivalents or any control over Alios’ activities that do not relate to the Alios Agreement. Alios does not have any rights to the Company’s assets except as provided in the Alios Agreement.

Noncontrolling Interest (Alios)

The Company records noncontrolling interest (Alios) on two lines on its condensed consolidated balance sheets. The noncontrolling interest (Alios) is reflected on two separate lines because Alios has both common shareholders and preferred shareholders that are entitled to redemption rights in certain circumstances. The Company records net loss (income) attributable to noncontrolling interest (Alios) on its condensed consolidated statements of operations, reflecting Alios' net loss (income) for the reporting period, adjusted for changes in the fair value of contingent milestone and royalty payments, which is evaluated each reporting period. A summary of net loss (income) attributable to noncontrolling interest (Alios) for the three months ended March 31, 2013 and 2012, is as follows:



	Three Months Ended March 31,
	2013			2012
	(in thousands)
Loss (income) before provision for (benefit from) income taxes	$	5,297		$	5,024
Decrease (increase) in fair value of contingent milestone and royalty payments	2,740			970
Provision for (benefit from) income taxes	(3,426		)	(2,280		)
Net loss (income) attributable to noncontrolling interest (Alios)	$	4,611		$	3,714

The Company uses present-value models to determine the estimated fair value of the contingent milestone and royalty payments, based on assumptions regarding the probability of achieving the relevant milestones, estimates regarding the time to develop drug candidates, estimates of future product sales and the appropriate discount rates. The Company bases its estimate of the probability of achieving the relevant milestones on industry data for similar assets and its own experience. The discount rates used in the valuation model represent a measure of credit risk and market risk associated with settling the liability. Significant judgment is used in determining the appropriateness of these assumptions at each reporting period. Changes in these assumptions could have a material effect on the fair value of the contingent milestone and royalty payments.

In the three months ended March 31, 2013 and 2012, the fair value of the contingent milestone payments and royalties payable by Vertex to Alios related to the HCV nucleotide analogue program decreased by $2.7 million and $1.0 million, respectively, which decreased net loss attributable to Vertex in the first quarter of 2013 and increased net income attributable to Vertex in the first quarter of 2012. If VX-135 continues to advance in clinical development, the Company expects it will record increases in the fair value of the contingent milestone and royalty payments in future periods. Changes in the fair value of these contingent milestone and royalty payments, and the effects of these changes on net income (loss) attributable to Vertex, may be material in future periods.

Alios Balance Sheet Information

The following table summarizes items related to Alios included in the Company’s condensed consolidated balance sheets:



	As of March 31, 2013		As of December 31, 2012
	(in thousands)
Restricted cash and cash equivalents (Alios)	$	63,008	$	69,983
Prepaid expenses and other current assets	3,776		672
Property and equipment, net	1,623		1,728
Intangible assets	250,600		250,600
Goodwill	4,890		4,890
Other assets	990		861
Accounts payable	1,975		1,054
Accrued expenses	5,019		6,099
Deferred tax liability	151,664		152,781
Other liabilities, excluding current portion	648		1,625
Redeemable noncontrolling interest (Alios)	38,872		38,530
Noncontrolling interest (Alios)	191,845		196,672

The Company has recorded Alios’ cash and cash equivalents as restricted cash and cash equivalents (Alios) because (i) the Company does not have any interest in or control over Alios’ cash and cash equivalents and (ii) the Alios Agreement does not provide for these assets to be used for the development of the assets that the Company licensed from Alios pursuant to the Alios Agreement. Assets recorded as a result of consolidating Alios’ financial condition into the Company’s condensed consolidated balance sheets do not represent additional assets that could be used to satisfy claims against the Company’s general assets.

Net Income (Loss) Per Share Attributable to Vertex Common Shareholders

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Net Income (Loss) Per Share Attributable to Vertex Common Stockholders

Net Income (Loss) Per Share Attributable to Vertex Common Shareholders

The following table sets forth the computation of basic and diluted net income (loss) attributable to Vertex per common share in conformity with the two-class method for the three months ended March 31, 2013 and 2012:



	Three Months Ended March 31,
	2013			2012
	(in thousands, except per share amounts)
Basic net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$	(308,016	)	$	91,590
Less: Undistributed earnings allocated to participating securities	—			(906		)
Net income (loss) attributable to Vertex common shareholders—basic	$	(308,016	)	$	90,684
Basic weighted-average common shares outstanding	215,421			208,018
Basic net income (loss) attributable to Vertex per common share	$	(1.43	)	$	0.44
Diluted net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$	(308,016	)	$	91,590
Less: Undistributed earnings allocated to participating securities	—			(860		)
Plus: Interest expense and amortization of deferred issuance costs related to convertible senior subordinated notes	—			3,749
Net income (loss) attributable to Vertex common shareholders—diluted	$	(308,016	)	$	94,479
Weighted-average shares used to compute basic net income (loss) per common share	215,421			208,018
Effect of potentially dilutive securities:
Convertible senior subordinated notes	—			8,891
Stock options	—			2,289
Other	—			66
Weighted-average shares used to compute diluted net income (loss) per common share	215,421			219,264
Diluted net income (loss) attributable to Vertex per common share	$	(1.43	)	$	0.43

The Company did not include the securities described in the following table in the computation of the diluted net income (loss) attributable to Vertex per common share calculations because the effect would have been anti-dilutive during each such period:



	Three Months Ended March 31,
	2013	2012
	(in thousands)
Stock options	21,848	13,768
Convertible senior subordinated notes	8,192	—
Unvested restricted stock and restricted stock units	2,682	16

Fair Value Measurements

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value Measurements

The fair value of the Company’s financial assets and liabilities reflects the Company’s estimate of amounts that it would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from sources independent from the Company) and to minimize the use of unobservable inputs (the Company’s assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:



Level 1:	Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2:	Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.
Level 3:	Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.

The Company’s investment strategy is focused on capital preservation. The Company invests in instruments that meet the credit quality standards outlined in the Company’s investment policy. This policy also limits the amount of credit exposure to any one issue or type of instrument. As of March 31, 2013, the Company’s investments were in a money market fund, short-term U.S. Treasury securities, short-term government-sponsored enterprise securities, corporate debt securities and commercial paper.

As of March 31, 2013, all of the Company’s financial assets that were subject to fair value measurements were valued using observable inputs. The Company’s financial assets valued based on Level 1 inputs consisted of a money market fund, U.S. Treasury securities and government-sponsored enterprise securities. The Company’s financial assets valued based on Level 2 inputs consisted of corporate debt securities and commercial paper, which consist of investments in highly-rated investment-grade corporations. During the three months ended March 31, 2013 and 2012, the Company did not record an other-than-temporary impairment charge related to its financial assets. The Company’s noncontrolling interest (Alios) includes the fair value of the contingent milestone and royalty payments, which is valued based on Level 3 inputs. Please refer to Note C, "Collaborative Arrangements," for further information.

The following table sets forth the Company’s financial assets (excluding Alios’ cash equivalents) subject to fair value measurements:



	Fair Value Measurements as of March 31, 2013
			Fair Value Hierarchy
	Total		Level 1		Level 2		Level 3
	(in thousands)
Financial assets carried at fair value:
Cash equivalents:
Money market funds	$	201,831	$	201,831	$	—	$	—
Government-sponsored enterprise securities	38,588		38,588		—		—
Marketable securities:
U.S. Treasury securities	13,205		13,205		—		—
Government-sponsored enterprise securities	550,478		550,478		—		—
Commercial paper	216,942		—		216,942		—
Corporate debt securities	79,630		—		79,630		—
Restricted cash	31,934		31,934		—		—
Total	$	1,132,608	$	836,036	$	296,572	$	—

Alios’ cash equivalents of $60.1 million as of March 31, 2013 consisted of money market funds, which were valued based on Level 1 inputs.

As of March 31, 2013, the Company had $400.0 million in aggregate principal amount of 3.35% convertible senior subordinated notes due 2015 (the “2015 Notes”) on its condensed consolidated balance sheet. As of March 31, 2013, these 2015 Notes had a fair value of approximately $483 million based on Level 2 inputs.

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=7578670&loc=d3e19207-110258

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 30
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13537-108611

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14064-108612

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13433-108611

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

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

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Marketable Securities

3 Months Ended

Mar. 31, 2013

Cash and Cash Equivalents [Abstract]

Marketable Securities

A summary of the Company’s cash, cash equivalents and marketable securities is shown below:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
As of March 31, 2013
Cash and cash equivalents:
Cash and money market funds	$	340,511	$	—	$	—		$	340,511
Government-sponsored enterprise securities	38,584		4		—			38,588
Total cash and cash equivalents	$	379,095	$	4	$	—		$	379,099
Marketable securities:
U.S. Treasury securities (due within 1 year)	$	13,204	$	1	$	—		$	13,205
Government-sponsored enterprise securities (due within 1 year)	550,418		72		(12		)	550,478
Commercial paper (due within 1 year)	216,776		166		—			216,942
Corporate debt securities (due within 1 year)	59,666		3		(19		)	59,650
Corporate debt securities (due after 1 year through 5 years)	19,988		1		(9		)	19,980
Total marketable securities	$	860,052	$	243	$	(40	)	$	860,255
Total cash, cash equivalents and marketable securities	$	1,239,147	$	247	$	(40	)	$	1,239,354

As of December 31, 2012
Cash and cash equivalents:
Cash and money market funds	$	489,407	$	—	$	—		$	489,407
Total cash and cash equivalents	$	489,407	$	—	$	—		$	489,407
Marketable securities:
U.S. Treasury securities (due within 1 year)	$	111,350	$	2	$	(2	)	$	111,350
Government-sponsored enterprise securities (due within 1 year)	440,181		49		(5		)	440,225
Commercial paper (due within 1 year)	225,294		155		—			225,449
Corporate debt securities (due within 1 year)	15,429		1		(1		)	15,429
Corporate debt securities (due after 1 year through 5 years)	39,358		10		(13		)	39,355
Total marketable securities	$	831,612	$	217	$	(21	)	$	831,808
Total cash, cash equivalents and marketable securities	$	1,321,019	$	217	$	(21	)	$	1,321,215

Alios’ $63.0 million and $70.0 million, respectively, of cash and money market funds as of March 31, 2013 and December 31, 2012, recorded on the Company’s condensed consolidated balance sheets in “Restricted cash and cash equivalents (Alios),” are not included in the above table.

Inventories

3 Months Ended

Mar. 31, 2013

Inventory Disclosure [Abstract]

Inventories

The following table sets forth the Company's inventories by product:



	As of March 31, 2013		As of December 31, 2012
	(in thousands)
INCIVEK	$	12,754	$	22,792
KALYDECO	8,778		7,672
Total	$	21,532	$	30,464

The following table sets forth the Company’s inventories by type:



	As of March 31, 2013		As of December 31, 2012
	(in thousands)
Raw materials	$	4,796	$	3,754
Work-in-process	2,930		11,317
Finished goods	13,806		15,393
Total	$	21,532	$	30,464

Fan Pier Leases	3 Months Ended
Fan Pier Leases	Mar. 31, 2013
Fan Pier Leases [Abstract]
Fan Pier Leases	Fan Pier Leases In 2011, the Company entered into two leases, pursuant to which the Company agreed to lease approximately 1.1 million square feet of office and laboratory space in two buildings (the "Buildings") that the landlord is building at Fan Pier in Boston, Massachusetts (the “Fan Pier Leases”). The Company expects to commence lease payments in December 2013 and to make payments for the period ending 15 years from the commencement date. The Company has an option to extend the term of the Fan Pier Leases for an additional ten years. Because the Company is involved in the construction project, including having responsibility to pay for a portion of the costs of finish work and structural elements of the Buildings, the Company is deemed for accounting purposes to be the owner of the Buildings during the construction period. Accordingly, the Company has recorded project construction costs incurred by the landlord as an asset and a related financing obligation in “Property and equipment, net” and “Construction financing lease obligation,” respectively, on the Company’s condensed consolidated balance sheets. The Company bifurcates its future lease payments pursuant to the Fan Pier Leases into (i) a portion that is allocated to the Buildings and (ii) a portion that is allocated to the land on which the Buildings are being constructed, which is recorded as rental expense. Although the Company will not begin making lease payments pursuant to the Fan Pier Leases until the commencement date, the portion of the lease obligations allocated to the land is treated for accounting purposes as an operating lease that commenced in 2011. Property and equipment, net, included $356.9 million and $290.7 million as of March 31, 2013 and December 31, 2012, respectively, related to construction costs for the Buildings at Fan Pier in Boston, Massachusetts. The construction financing lease obligation related to the Buildings at Fan Pier was $316.8 million and $268.0 million as of March 31, 2013 and December 31, 2012, respectively. As of March 31, 2013 and December 31, 2012, the primary difference between the amounts recorded in property and equipment, net and the construction financing lease obligation represented the cost of finish work and structural elements of the Buildings that the Company was responsible for paying to date. Once the landlord completes the construction of the Buildings, the Company will evaluate the Fan Pier Leases in order to determine whether or not the Fan Pier Leases meet the criteria for “sale-leaseback” treatment. If the Fan Pier Leases meet the “sale-leaseback” criteria, the Company will remove the asset and the related liability from its consolidated balance sheet and treat the Fan Pier Leases as either operating or capital leases based on the Company’s assessment of the accounting guidance. The Company expects that upon completion of construction of the Buildings the Fan Pier Leases will not meet the “sale-leaseback” criteria. If the Fan Pier Leases do not meet “sale-leaseback” criteria, the Company will treat the Fan Pier Leases as a financing obligation and will depreciate the asset over its estimated useful life.

Intangible Assets and Goodwill	3 Months Ended
Intangible Assets and Goodwill	Mar. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets and Goodwill	Intangible Assets and Goodwill Intangible Assets As of December 31, 2012, the Company's intangible assets consisted of indefinite-lived in-process research and development assets of (i) $250.6 million related to its HCV nucleotide analogue program, which includes the HCV nucleotide analogue VX-135 and (ii) $412.9 million related to VX-222, which also was being developed for the treatment of HCV infection. The Company acquired VX-222 when it acquired ViroChem Pharma Inc. ("ViroChem") in March 2009. The Company tests intangible assets for impairment on an annual basis as of October 1, and more frequently if indicators are present or changes in circumstance suggest that impairment may exist. In connection with each annual impairment assessment and any interim impairment assessment in which indicators of impairment have been identified, the Company compares the fair value of the asset as of the date of the assessment with the carrying value of the asset on the Company's condensed consolidated balance sheet. In connection with its preparation of its financial statements for the three months ended March 31, 2013, the Company determined that there were indicators that the value of the VX-222 intangible asset had become impaired. This determination was based on (A) preliminary safety, tolerability and efficacy data from a Phase 2 clinical trial of VX-222, telaprevir and ribavirin, which was received in March 2013 and analyzed through April 2013 and (B) a review of the existing and emerging data regarding all-oral regimens for HCV infection being developed by the Company's competitors that appear to be generally well tolerated with high sustained viral response ("SVR") rates for treatment-naïve patients with genotype 1 HCV infection. After evaluating the data from this Phase 2 clinical trial, the Company determined that regimens containing VX-222 were unlikely to be competitive with the treatment regimens being developed by the Company's competitors. The Company evaluated the fair value of VX-222 from the perspective of a market participant and based on this analysis determined that the fair value of VX-222 was zero as of March 31, 2013. Accordingly, the Company recorded a $412.9 million impairment charge in three months ended March 31, 2013. The Company continues to monitor the development of competitive all-oral regimens and other direct antivirals and does not plan to initiate any new clinical trials of VX-222. In connection with this impairment charge, the Company recorded a credit of $127.6 million in its provision for income taxes. In the first quarter of 2013, the increase to the Company's net loss attributable to Vertex related to this impairment charge, net of the tax credit, was $285.3 million, and the net increase to the Company's net loss per share attributable to Vertex common shareholders was $1.32 per share. No impairment has been found with respect to the HCV nucleotide analogue program since the acquisition date. However, the field of HCV infection treatment is highly competitive and characterized by rapid technological advances. Two of the Company's competitors have filed applications seeking approval for potentially competitive treatment regimens that include pegylated-interferon and ribavirin, and several of the Company's competitors are conducting Phase 3 clinical trials evaluating all-oral combinations of their drug candidates for the treatment of genotype 1 HCV infection. There can be no assurance that the Company will be able to successfully develop VX-135. If the fair value of the HCV nucleotide analogue program becomes impaired as the result of unfavorable safety or efficacy data from any ongoing or future clinical trial or because of any other information regarding the prospects of successfully developing or commercializing VX-135, the Company would incur significant charges in the period in which the impairment occurs. Goodwill As of March 31, 2013 and December 31, 2012, goodwill of $31.0 million was recorded on the Company's condensed consolidated balance sheets. There was no change to goodwill recorded during the three months ended March 31, 2013 or 2012.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Convertible Senior Subordinated Notes	3 Months Ended
Convertible Senior Subordinated Notes	Mar. 31, 2013
Debt Disclosure [Abstract]
Convertible Senior Subordinated Notes	Convertible Senior Subordinated Notes In September 2010, the Company completed an offering of $400.0 million in aggregate principal amount of 2015 Notes. This offering resulted in $391.6 million of net proceeds to the Company. The underwriting discount of $8.0 million and other expenses of $0.4 million were recorded as debt issuance costs and are included in other assets on the Company’s condensed consolidated balance sheets. The 2015 Notes were issued pursuant to and are governed by the terms of an indenture (as supplemented, the “Indenture”). The 2015 Notes are convertible at any time, at the option of the holder, into common stock at a price equal to approximately $48.83 per share, or 20.4794 shares of common stock per $1,000 principal amount of the 2015 Notes, subject to adjustment. The 2015 Notes bear interest at the rate of 3.35% per annum, and the Company is required to make semi-annual interest payments on the outstanding principal balance of the 2015 Notes on April 1 and October 1 of each year. The 2015 Notes mature on October 1, 2015. Prior to October 1, 2013, if the closing price of the Company’s common stock has exceeded 130% of the then applicable conversion price for at least 20 trading days within a period of 30 consecutive trading days, the Company may redeem the 2015 Notes at its option, in whole or in part, at a redemption price equal to 100% of the principal amount of the 2015 Notes to be redeemed. If the Company elects to redeem the 2015 Notes prior to October 1, 2013, or the holder elects to convert the 2015 Notes into shares of the Company's common stock after receiving notice of such redemption, the Company will be obligated to make an additional payment, payable in cash or, subject to certain conditions, shares of the Company’s common stock, so that the Company’s total interest payments on the 2015 Notes being redeemed and such additional payment shall equal three years of interest. On or after October 1, 2013, the Company may redeem the 2015 Notes at its option, in whole or in part, at the redemption prices stated in the Indenture plus accrued and unpaid interest, if any, to, but excluding, the redemption date. Holders may require the Company to repurchase some or all of their 2015 Notes upon the occurrence of certain fundamental changes of Vertex, as set forth in the Indenture, at 100% of the principal amount of the 2015 Notes to be repurchased, plus any accrued and unpaid interest, if any, to, but excluding, the repurchase date. If a fundamental change occurs that is also a specific type of change of control under the Indenture, the Company will pay a make-whole premium upon the conversion of the 2015 Notes in connection with any such transaction by increasing the applicable conversion rate on such 2015 Notes. The make-whole premium will be in addition to, and not in substitution for, any cash, securities or other assets otherwise due to holders of the 2015 Notes upon conversion. The make-whole premium will be determined by reference to the Indenture and is based on the date on which the fundamental change becomes effective and the price paid, or deemed to be paid, per share of the Company’s common stock in the transaction constituting the fundamental change, subject to adjustment. Based on the Company’s evaluation of the 2015 Notes, the Company determined that the 2015 Notes contain a single embedded derivative. This embedded derivative relates to potential penalty interest payments that could be imposed on the Company for a failure to comply with its securities reporting obligations pursuant to the 2015 Notes. This embedded derivative required bifurcation because it was not clearly and closely related to the host instrument. The Company has determined that the value of this embedded derivative was nominal as of September 28, 2010, the issue date of the 2015 Notes, December 31, 2012 and March 31, 2013.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

Stock-based Compensation Expense

3 Months Ended

Mar. 31, 2013

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

Stock-based Compensation Expense

The Company issues stock options, restricted stock and restricted stock units with service conditions, which are generally the vesting periods of the awards. The Company also has issued, to certain members of senior management, restricted stock and restricted stock units that vest upon the earlier of the satisfaction of (i) a performance condition or (ii) a service condition, and stock options that vest upon the earlier of the satisfaction of (a) performance conditions or (b) a service condition. In addition, the Company issues shares pursuant to an employee stock purchase plan ("ESPP").

The effect of stock-based compensation expense during the three months ended March 31, 2013 and 2012 was as follows:



	Three Months Ended March 31,
	2013			2012
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	19,674		$	18,222
Restricted stock and restricted stock units	9,378			7,286
ESPP share issuances	2,522			2,430
Less stock-based compensation expense capitalized to inventories	(299		)	(250		)
Total stock-based compensation expense included in costs and expenses	$	31,275		$	27,688

Stock-based compensation expense by line item:
Research and development expenses	$	19,349		$	17,204
Sales, general and administrative expenses	11,926			10,484
Total stock-based compensation expense included in costs and expenses	$	31,275		$	27,688

The following table sets forth the Company's unrecognized stock-based compensation expense, net of estimated forfeitures, as of March 31, 2013 by type of award and the weighted-average period over which that expense is expected to be recognized:



	As of March 31, 2013
	Unrecognized Expense, Net of Estimated Forfeitures	Weighted-average Recognition Period
	(in thousands)	(in years)
Type of award:
Stock options	$187,456	2.90
Restricted stock and restricted stock units	86,795	2.58
ESPP share issuances	3,091	0.49

The following table summarizes information about stock options outstanding and exercisable at March 31, 2013:



	Options Outstanding			Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted-average Remaining Contractual Life	Weighted-average Exercise Price	Number Exercisable	Weighted-average Exercise Price
	(in thousands)	(in years)	(per share)	(in thousands)	(per share)
$ 9.07–$20.00	887	3.05	$15.33	887	$15.33
$20.01–$30.00	1,394	6.13	$29.32	1,052	$29.14
$30.01–$40.00	11,913	6.61	$36.11	7,905	$35.41
$40.01–$50.00	5,333	9.53	$46.34	341	$47.41
$50.01–$60.00	2,268	8.46	$53.44	926	$54.03
$60.01–$64.30	53	8.92	$63.31	11	$63.23

- Definition

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

+ References

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

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Sale of HIV Protease Inhibitor Royalty Stream	3 Months Ended
Sale of HIV Protease Inhibitor Royalty Stream	Mar. 31, 2013
Sale of HIV Protease Inhibitor Royalty Stream
Sale of HIV Protease Inhibitor Royalty Stream	Sale of HIV Protease Inhibitor Royalty Stream In 2008, the Company sold to a third party its rights to receive royalty payments from GlaxoSmithKline plc, net of royalty amounts to be earned by and due to a third party, for a one-time cash payment of $160.0 million. These royalty payments relate to net sales of HIV protease inhibitors, which had been developed pursuant to a collaboration agreement between the Company and GlaxoSmithKline plc. As of March 31, 2013, the Company had $77.8 million in deferred revenues related to the one-time cash payment, which it is recognizing over the life of the collaboration agreement with GlaxoSmithKline plc based on the units-of-revenue method. In addition, the Company continues to recognize royalty revenues equal to the amount of the third-party subroyalty and an offsetting royalty expense for the third-party subroyalty payment.

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2013
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes For the three months ended March 31, 2013, the Company recorded a benefit from income taxes of $130.3 million. This benefit from income taxes was due to a benefit of $126.9 million attributable to Vertex and a benefit from income taxes of $3.4 million attributable to noncontrolling interest (Alios). In the first quarter of 2013, the Company determined that the fair value of VX-222 was zero, which resulted in an impairment charge of $412.9 million. In connection with this impairment charge, in the first quarter of 2013 the Company wrote-off the associated deferred tax liability of $127.6 million as a benefit in its condensed consolidated statements of operations. Please refer to Note I, "Intangible Assets and Goodwill," for further information regarding the impairment charge. For the three months ended March 31, 2012, the Company recorded a provision for income taxes attributable to Vertex of $2.3 million offset by a benefit from income taxes attributable to noncontrolling interest (Alios) of $2.3 million. The Company has no liability for taxes payable by Alios. As such, the portion of the income tax provision (benefit) related to Alios has been allocated to noncontrolling interest (Alios). As of March 31, 2013 and December 31, 2012, Alios had a deferred tax liability of $151.7 million and $152.8 million reflected on the Company's condensed consolidated balance sheets, respectively. As of March 31, 2013 and December 31, 2012, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. The Company does not expect that its unrecognized tax benefits will materially increase within the next twelve months. The Company did not recognize any material interest or penalties related to uncertain tax positions as of March 31, 2013 and December 31, 2012. The Company maintains a valuation allowance on its net operating losses and other deferred tax assets because of its extended history of annual losses. As of December 31, 2012, the Company had U.S. federal net operating loss carryforwards of approximately $2.6 billion and tax credits of $98.0 million, which may be used to offset future federal income tax liability. For state income tax purposes, the Company had net operating loss carryforwards of approximately $1.5 billion and tax credits of $60.3 million at December 31, 2012, which may be used to offset future state income tax liability. On a quarterly basis, the Company reassesses the valuation allowance for deferred income tax assets. In future periods, if management determines that it is more likely than not that the deferred tax asset will be realized, (i) the valuation allowance would be decreased, (ii) a portion or all of the deferred tax asset would be reflected on the Company’s consolidated balance sheet and (iii) the Company would record non-cash benefits in its consolidated statements of operations related to the reflection of the deferred tax asset on its consolidated balance sheet. The Company files U.S. federal income tax returns and income tax returns in various state, local and foreign jurisdictions. The Company is no longer subject to any tax assessment from an income tax examination in the United States before 2007 and any other major taxing jurisdiction for years before 2005, except where the Company has net operating losses or tax credit carryforwards that originated before 2005. The Company is currently under examination by Revenue Quebec for the year ended March 11, 2009 and the year ended December 31, 2007. No adjustments have been reported. The Company is not under examination by any other jurisdictions for any tax year. The Company currently intends to reinvest the total amount of its unremitted earnings, which have not been significant to date, in the local international jurisdiction or to repatriate the earnings only when tax-effective. As a result, the Company has not provided for U.S. federal income taxes on the unremitted earnings of its international subsidiaries. Upon repatriation of those earnings, in the form of dividends or otherwise, the Company would be subject to U.S. federal income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to the various foreign countries. At March 31, 2013, foreign earnings, which were not significant, have been retained indefinitely by foreign subsidiary companies for reinvestment; therefore, no provision has been made for income taxes that would be payable upon the distribution of such earnings and it would not be practicable to determine the amount of the related unrecognized deferred income tax liability.

- Definition

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

+ References

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

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Section 50
-Paragraph 3
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-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

+ Details

Restructuring Liability

3 Months Ended

Mar. 31, 2013

Restructuring and Related Activities [Abstract]

Restructuring Expense


	Restructuring Liability

In 2003, Vertex adopted a plan to restructure its operations to coincide with its increasing internal emphasis on advancing drug candidates through clinical development to commercialization. The restructuring liability relates to specialized laboratory and office space that is leased to the Company pursuant to a 15-year lease that terminates in 2018, and that the Company has not used since it adopted the plan to restructure its operations in 2003. This laboratory and office space currently is subleased to third parties.

In estimating the expense and liability under its lease obligations, the Company estimated (i) the costs to be incurred to satisfy rental and build-out commitments under the lease (including operating costs), (ii) the lead-time necessary to sublease the space, (iii) the projected sublease rental rates and (iv) the anticipated durations of subleases. The Company uses a credit-adjusted risk-free rate of approximately 10% to discount the estimated cash flows. The Company reviews its estimates and assumptions on at least a quarterly basis, intends to continue such reviews until the termination of the applicable lease, and will make whatever modifications the Company believes necessary, based on the Company’s best judgment, to reflect any changed circumstances.

The activities related to the restructuring liability for the three months ended March 31, 2013 and 2012 were as follows:



	Three Months Ended March 31,
	2013			2012
	(in thousands)
Liability, beginning of the period	$	23,328		$	26,313
Cash payments	(3,573		)	(3,686		)
Cash received from subleases	2,665			2,486
Restructuring expense	39			360
Liability, end of the period	$	22,459		$	25,473

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References + Details

Legal Proceedings

3 Months Ended

Mar. 31, 2013

Legal Proceedings [Abstract]

Legal Proceedings


	Legal Proceedings

On September 6, 2012, a purported shareholder class action, City of Bristol Pension Fund v. Vertex Pharmaceuticals Incorporated, et al., was filed in the United States District Court for the District of Massachusetts, naming the Company and certain of the Company's current and former officers and directors as defendants. The lawsuit alleges that the Company made material misrepresentations and/or omissions of material fact in the Company's disclosures during the period from May 7, 2012 through June 28, 2012, all in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. By order dated December 12, 2012, the court appointed the City of Bristol lead plaintiff and appointed the City of Bristol's attorneys lead counsel. The plaintiffs filed an amended complaint on February 11, 2013. The Company filed a motion to dismiss the complaint on April 12, 2013. The plaintiffs seek unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including attorney's fees, as well as disgorgement of the proceeds from certain individual defendants' sales of the Company's common stock. The Company believes that this action is without merit and intends to defend it vigorously. As of March 31, 2013, the Company has not recorded any reserves for this purported class action.

Contingencies	3 Months Ended
Contingencies	Mar. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Contingencies	Contingencies The Company has certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a reserve for contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There were no material contingent liabilities accrued as of March 31, 2013 or December 31, 2012.

Guarantees	3 Months Ended
Guarantees	Mar. 31, 2013
Guarantees [Abstract]
Guarantees	Guarantees As permitted under Massachusetts law, the Company’s Articles of Organization and By-laws provide that the Company will indemnify certain of its officers and directors for certain claims asserted against them in connection with their service as an officer or director. The maximum potential amount of future payments that the Company could be required to make under these indemnification provisions is unlimited. However, the Company has purchased directors’ and officers’ liability insurance policies that could reduce its monetary exposure and enable it to recover a portion of any future amounts paid. No indemnification claims currently are outstanding, and the Company believes the estimated fair value of these indemnification arrangements is minimal. The Company customarily agrees in the ordinary course of its business to indemnification provisions in agreements with clinical trial investigators and sites in its drug development programs, sponsored research agreements with academic and not-for-profit institutions, various comparable agreements involving parties performing services for the Company, and its real estate leases. The Company also customarily agrees to certain indemnification provisions in its drug discovery, development and commercialization collaboration agreements. With respect to the Company’s clinical trials and sponsored research agreements, these indemnification provisions typically apply to any claim asserted against the investigator or the investigator’s institution relating to personal injury or property damage, violations of law or certain breaches of the Company’s contractual obligations arising out of the research or clinical testing of the Company’s compounds or drug candidates. With respect to lease agreements, the indemnification provisions typically apply to claims asserted against the landlord relating to personal injury or property damage caused by the Company, to violations of law by the Company or to certain breaches of the Company’s contractual obligations. The indemnification provisions appearing in the Company’s collaboration agreements are similar to those for the other agreements discussed above, but in addition provide some limited indemnification for its collaborator in the event of third-party claims alleging infringement of intellectual property rights. In each of the cases above, the indemnification obligation generally survives the termination of the agreement for some extended period, although the Company believes the obligation typically has the most relevance during the contract term and for a short period of time thereafter. The maximum potential amount of future payments that the Company could be required to make under these provisions is generally unlimited. The Company has purchased insurance policies covering personal injury, property damage and general liability that reduce its exposure for indemnification and would enable it in many cases to recover all or a portion of any future amounts paid. The Company has never paid any material amounts to defend lawsuits or settle claims related to these indemnification provisions. Accordingly, the Company believes the estimated fair value of these indemnification arrangements is minimal. The Company entered into an underwriting agreement with Merrill Lynch, Pierce, Fenner & Smith Incorporated dated September 23, 2010 (the “Underwriting Agreement”), relating to the public offering and sale of the 2015 Notes. The Underwriting Agreement requires the Company to indemnify the underwriter against any loss it may suffer by reason of the Company’s breach of any representation or warranty relating to the public offering, the Company’s failure to perform certain covenants in the Underwriting Agreement, the inclusion of any untrue statement of material fact in the prospectus used in connection with the offering, the omission of any material fact needed to make those materials not misleading, and any actions taken by the Company or its representatives in connection with the offering. The representations, warranties, covenants and indemnification provisions in the Underwriting Agreement are of a type customary in agreements of this sort. The Company believes the estimated fair value of this indemnification arrangement is minimal.

Basis of Presentation and Accounting Policies (Policies)	3 Months Ended
	Mar. 31, 2013
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying condensed consolidated financial statements are unaudited and have been prepared by Vertex Pharmaceuticals Incorporated ("Vertex" or the "Company") in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The condensed consolidated financial statements reflect the operations of (i) the Company, (ii) its wholly-owned subsidiaries and (iii) Alios BioPharma, Inc. (“Alios”), a collaborator that is a variable interest entity (a “VIE”) for which the Company is deemed under applicable accounting guidance to be the primary beneficiary. All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. Certain information and footnote disclosures normally included in the Company's annual financial statements have been condensed or omitted. These interim financial statements, in the opinion of management, reflect all normal recurring adjustments (including accruals) necessary for a fair presentation of the financial position and results of operations for the interim periods ended March 31, 2013 and 2012. The results of operations for the interim periods are not necessarily indicative of the results of operations to be expected for the full fiscal year. These interim financial statements should be read in conjunction with the audited financial statements for the year ended December 31, 2012, which are contained in the Company's Annual Report on Form 10-K for the year ended December 31, 2012 that was filed with the Securities and Exchange Commission (the "SEC") on March 1, 2013 (the "2012 Annual Report on Form 10-K")
Use of Estimates	Use of Estimates and Summary of Significant Accounting Policies The preparation of condensed consolidated financial statements in accordance with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the amounts of revenues and expenses during the reported periods. Significant estimates in these condensed consolidated financial statements have been made in connection with the calculation of revenues, inventories, research and development expenses, stock-based compensation expense, restructuring expense, the fair value of intangible assets, noncontrolling interest (Alios) and the income tax provision. The Company bases its estimates on historical experience and various other assumptions, including in certain circumstances future projections, that management believes to be reasonable under the circumstances. Actual results could differ from those estimates. Changes in estimates are reflected in reported results in the period in which they become known. The Company's significant accounting policies are described in Note A, "Nature of Business and Accounting Policies," in the 2012 Annual Report on Form 10-K.
Recent Accounting Pronouncements	Recent Accounting Pronouncements For a discussion of recent accounting pronouncements please refer to Note A, "Nature of Business and Accounting Policies—Recent Accounting Pronouncements," in the 2012 Annual Report on Form 10-K. The Company did not adopt any new accounting pronouncements during the three months ended March 31, 2013 that had a material effect on the Company's condensed consolidated financial statements.

Product Revenues, Net (Tables)

3 Months Ended

Mar. 31, 2013

Product Revenues [Abstract]

Schedule of product revenues and allowances and reserve categories

The following table summarizes activity in each of the product revenue allowance and reserve categories for the three months ended March 31, 2013:



	Trade Allowances			Rebates, Chargebacks and Discounts			Product Returns			Other Incentives			Total
	(in thousands)
Balance at December 31, 2012	$	5,416		$	63,560		$	2,852		$	3,565		$	75,393
Provision related to current period sales	11,226			52,334			872			3,720			68,152
Adjustments related to prior period sales	107			1,644			8,209			(138		)	9,822
Credits/payments made	(11,728		)	(51,132		)	(1,009		)	(3,883		)	(67,752		)
Balance at March 31, 2013	$	5,021		$	66,406		$	10,924		$	3,264		$	85,615

Collaborative Arrangements (Tables)

3 Months Ended

Mar. 31, 2013

Collaborative Arrangements

Collaborator revenues

During the three months ended March 31, 2013 and 2012, the Company recognized the following revenues attributable to the Janssen collaboration:



	Three Months Ended March 31,
	2013			2012
	(in thousands)
Royalty revenues	$	39,044		$	32,884
Collaborative revenues:
Amortized portion of up-front payment	$	3,107		$	3,107
Net reimbursement (payment) for telaprevir development costs	(27		)	(1,139		)
Reimbursement for manufacturing services	10,299			4,449
Total collaborative revenues attributable to the Janssen collaboration	$	13,379		$	6,417
Total revenues attributable to the Janssen collaboration	$	52,423		$	39,301

Summary of activity related to net loss (income) attributable to noncontrolling interest (Alios)

A summary of net loss (income) attributable to noncontrolling interest (Alios) for the three months ended March 31, 2013 and 2012, is as follows:



	Three Months Ended March 31,
	2013			2012
	(in thousands)
Loss (income) before provision for (benefit from) income taxes	$	5,297		$	5,024
Decrease (increase) in fair value of contingent milestone and royalty payments	2,740			970
Provision for (benefit from) income taxes	(3,426		)	(2,280		)
Net loss (income) attributable to noncontrolling interest (Alios)	$	4,611		$	3,714

Summary of Alios' items included in the Company's consolidated balance sheets

The following table summarizes items related to Alios included in the Company’s condensed consolidated balance sheets:



	As of March 31, 2013		As of December 31, 2012
	(in thousands)
Restricted cash and cash equivalents (Alios)	$	63,008	$	69,983
Prepaid expenses and other current assets	3,776		672
Property and equipment, net	1,623		1,728
Intangible assets	250,600		250,600
Goodwill	4,890		4,890
Other assets	990		861
Accounts payable	1,975		1,054
Accrued expenses	5,019		6,099
Deferred tax liability	151,664		152,781
Other liabilities, excluding current portion	648		1,625
Redeemable noncontrolling interest (Alios)	38,872		38,530
Noncontrolling interest (Alios)	191,845		196,672

Net Income (Loss) Per Share Attributable to Vertex Common Shareholders (Tables)

3 Months Ended

Mar. 31, 2013

Earnings Per Share [Abstract]

Calculation of net income (loss) per basic and diluted share



	Three Months Ended March 31,
	2013			2012
	(in thousands, except per share amounts)
Basic net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$	(308,016	)	$	91,590
Less: Undistributed earnings allocated to participating securities	—			(906		)
Net income (loss) attributable to Vertex common shareholders—basic	$	(308,016	)	$	90,684
Basic weighted-average common shares outstanding	215,421			208,018
Basic net income (loss) attributable to Vertex per common share	$	(1.43	)	$	0.44
Diluted net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$	(308,016	)	$	91,590
Less: Undistributed earnings allocated to participating securities	—			(860		)
Plus: Interest expense and amortization of deferred issuance costs related to convertible senior subordinated notes	—			3,749
Net income (loss) attributable to Vertex common shareholders—diluted	$	(308,016	)	$	94,479
Weighted-average shares used to compute basic net income (loss) per common share	215,421			208,018
Effect of potentially dilutive securities:
Convertible senior subordinated notes	—			8,891
Stock options	—			2,289
Other	—			66
Weighted-average shares used to compute diluted net income (loss) per common share	215,421			219,264
Diluted net income (loss) attributable to Vertex per common share	$	(1.43	)	$	0.43

Potential gross common equivalent shares



	Three Months Ended March 31,
	2013	2012
	(in thousands)
Stock options	21,848	13,768
Convertible senior subordinated notes	8,192	—
Unvested restricted stock and restricted stock units	2,682	16

Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2013

Fair Value Disclosures [Abstract]

Financial assets subject to fair value measurements (excluding restricted cash and cash equivalents (Alios))

The following table sets forth the Company’s financial assets (excluding Alios’ cash equivalents) subject to fair value measurements:



	Fair Value Measurements as of March 31, 2013
			Fair Value Hierarchy
	Total		Level 1		Level 2		Level 3
	(in thousands)
Financial assets carried at fair value:
Cash equivalents:
Money market funds	$	201,831	$	201,831	$	—	$	—
Government-sponsored enterprise securities	38,588		38,588		—		—
Marketable securities:
U.S. Treasury securities	13,205		13,205		—		—
Government-sponsored enterprise securities	550,478		550,478		—		—
Commercial paper	216,942		—		216,942		—
Corporate debt securities	79,630		—		79,630		—
Restricted cash	31,934		31,934		—		—
Total	$	1,132,608	$	836,036	$	296,572	$	—

Marketable Securities (Tables)

3 Months Ended

Mar. 31, 2013

Cash and Cash Equivalents [Abstract]

Summary of cash, cash equivalents and marketable securities

A summary of the Company’s cash, cash equivalents and marketable securities is shown below:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
As of March 31, 2013
Cash and cash equivalents:
Cash and money market funds	$	340,511	$	—	$	—		$	340,511
Government-sponsored enterprise securities	38,584		4		—			38,588
Total cash and cash equivalents	$	379,095	$	4	$	—		$	379,099
Marketable securities:
U.S. Treasury securities (due within 1 year)	$	13,204	$	1	$	—		$	13,205
Government-sponsored enterprise securities (due within 1 year)	550,418		72		(12		)	550,478
Commercial paper (due within 1 year)	216,776		166		—			216,942
Corporate debt securities (due within 1 year)	59,666		3		(19		)	59,650
Corporate debt securities (due after 1 year through 5 years)	19,988		1		(9		)	19,980
Total marketable securities	$	860,052	$	243	$	(40	)	$	860,255
Total cash, cash equivalents and marketable securities	$	1,239,147	$	247	$	(40	)	$	1,239,354

As of December 31, 2012
Cash and cash equivalents:
Cash and money market funds	$	489,407	$	—	$	—		$	489,407
Total cash and cash equivalents	$	489,407	$	—	$	—		$	489,407
Marketable securities:
U.S. Treasury securities (due within 1 year)	$	111,350	$	2	$	(2	)	$	111,350
Government-sponsored enterprise securities (due within 1 year)	440,181		49		(5		)	440,225
Commercial paper (due within 1 year)	225,294		155		—			225,449
Corporate debt securities (due within 1 year)	15,429		1		(1		)	15,429
Corporate debt securities (due after 1 year through 5 years)	39,358		10		(13		)	39,355
Total marketable securities	$	831,612	$	217	$	(21	)	$	831,808
Total cash, cash equivalents and marketable securities	$	1,321,019	$	217	$	(21	)	$	1,321,215

Inventories (Tables)

3 Months Ended

Mar. 31, 2013

Inventory Disclosure [Abstract]

Schedule of Inventories by Product

The following table sets forth the Company's inventories by product:



	As of March 31, 2013		As of December 31, 2012
	(in thousands)
INCIVEK	$	12,754	$	22,792
KALYDECO	8,778		7,672
Total	$	21,532	$	30,464

Schedule of Inventories by Type

The following table sets forth the Company’s inventories by type:



	As of March 31, 2013		As of December 31, 2012
	(in thousands)
Raw materials	$	4,796	$	3,754
Work-in-process	2,930		11,317
Finished goods	13,806		15,393
Total	$	21,532	$	30,464

Stock-based Compensation Expense (Tables)

3 Months Ended

Mar. 31, 2013

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

Stock-based compensation expense by line item

The effect of stock-based compensation expense during the three months ended March 31, 2013 and 2012 was as follows:



	Three Months Ended March 31,
	2013			2012
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	19,674		$	18,222
Restricted stock and restricted stock units	9,378			7,286
ESPP share issuances	2,522			2,430
Less stock-based compensation expense capitalized to inventories	(299		)	(250		)
Total stock-based compensation expense included in costs and expenses	$	31,275		$	27,688

Stock-based compensation expense by line item:
Research and development expenses	$	19,349		$	17,204
Sales, general and administrative expenses	11,926			10,484
Total stock-based compensation expense included in costs and expenses	$	31,275		$	27,688

Unrecognized stock-based compensation expense, net of estimated forfeitures



	As of March 31, 2013
	Unrecognized Expense, Net of Estimated Forfeitures	Weighted-average Recognition Period
	(in thousands)	(in years)
Type of award:
Stock options	$187,456	2.90
Restricted stock and restricted stock units	86,795	2.58
ESPP share issuances	3,091	0.49

Stock options outstanding and exercisable

The following table summarizes information about stock options outstanding and exercisable at March 31, 2013:



	Options Outstanding			Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted-average Remaining Contractual Life	Weighted-average Exercise Price	Number Exercisable	Weighted-average Exercise Price
	(in thousands)	(in years)	(per share)	(in thousands)	(per share)
$ 9.07–$20.00	887	3.05	$15.33	887	$15.33
$20.01–$30.00	1,394	6.13	$29.32	1,052	$29.14
$30.01–$40.00	11,913	6.61	$36.11	7,905	$35.41
$40.01–$50.00	5,333	9.53	$46.34	341	$47.41
$50.01–$60.00	2,268	8.46	$53.44	926	$54.03
$60.01–$64.30	53	8.92	$63.31	11	$63.23

- Definition

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

+ References + Details

Restructuring Liability (Tables)

3 Months Ended

Mar. 31, 2013

Restructuring and Related Activities [Abstract]

The activities related to the restructuring liability for the three months ended March 31, 2013 and 2012 were as follows:



	Three Months Ended March 31,
	2013			2012
	(in thousands)
Liability, beginning of the period	$	23,328		$	26,313
Cash payments	(3,573		)	(3,686		)
Cash received from subleases	2,665			2,486
Restructuring expense	39			360
Liability, end of the period	$	22,459		$	25,473

Basis of Presentation and Accounting Policies (Details)	3 Months Ended
Basis of Presentation and Accounting Policies (Details)	Mar. 31, 2013 segment
Accounting Policies [Abstract]
Number of operating segments	1

Product Revenues, Net (Details) $ in Thousands	3 Months Ended
Product Revenues, Net (Details) $ in Thousands	Mar. 31, 2013 USD ($)
Product Revenue Allowance and Reserve [Roll Forward]
Product revenue allowance and reserve, beginning balance	$ 75,393
Provision related to current period sales	68,152
Adjustments related to prior period sales	9,822
Credits/payments made	(67,752)
Product revenue allowance and reserve, ending balance	85,615
Trade Allowances [Member]
Product Revenue Allowance and Reserve [Roll Forward]
Product revenue allowance and reserve, beginning balance	5,416
Provision related to current period sales	11,226
Adjustments related to prior period sales	107
Credits/payments made	(11,728)
Product revenue allowance and reserve, ending balance	5,021
Rebates Chargebacks and Discounts [Member]
Product Revenue Allowance and Reserve [Roll Forward]
Product revenue allowance and reserve, beginning balance	63,560
Provision related to current period sales	52,334
Adjustments related to prior period sales	1,644
Credits/payments made	(51,132)
Product revenue allowance and reserve, ending balance	66,406
Product Returns [Member]
Product Revenue Allowance and Reserve [Roll Forward]
Product revenue allowance and reserve, beginning balance	2,852
Provision related to current period sales	872
Adjustments related to prior period sales	8,209
Credits/payments made	(1,009)
Product revenue allowance and reserve, ending balance	10,924
Other Incentives [Member]
Product Revenue Allowance and Reserve [Roll Forward]
Product revenue allowance and reserve, beginning balance	3,565
Provision related to current period sales	3,720
Adjustments related to prior period sales	(138)
Credits/payments made	(3,883)
Product revenue allowance and reserve, ending balance	$ 3,264

Collaborative Arrangements (Details)
$ in Thousands

1 Months Ended

3 Months Ended

12 Months Ended

22 Months Ended

Apr. 30, 2011

USD ($)

Mar. 31, 2013

USD ($)

lines

payment

Sep. 30, 2012

USD ($)

Mar. 31, 2012

USD ($)

Dec. 31, 2012

USD ($)

Dec. 31, 2011

USD ($)

Dec. 31, 2009

USD ($)

Dec. 31, 2006

USD ($)

Mar. 31, 2013

USD ($)

lines

Jun. 13, 2011

USD ($)

Collaborative revenues recognized

Royalty revenues

$ 43,573

$ 38,981

Collaborative revenues

17,414

24,381

Total revenues

328,368

438,737

Noncontrolling Interest (Alios)

Provision for (benefit from) income taxes

(130,313)

Net loss (income) attributable to noncontrolling interest (Alios)

(4,611)

(3,714)

Restricted cash and cash equivalents (Alios)

^[1]

63,008

$ 69,983

$ 63,008

Prepaid expenses and other current assets

^[1]

47,835

24,673

47,835

Property and equipment, net

^[1]

504,232

433,609

504,232

Goodwill

^[1]

30,992

Other assets

^[1]

8,693

9,668

8,693

Accounts payable

^[1]

59,627

101,292

59,627

Accrued expenses

^[1]

274,061

264,884

274,061

Deferred tax liability

^[1]

151,664

280,367

151,664

Other liabilities, excluding current portion

^[1]

16,678

13,902

16,678

Redeemable noncontrolling interest (Alios)

^[1]

38,872

38,530

38,872

Noncontrolling interest (Alios)

^[1]

$ 191,845

196,672

191,845

Janssen Pharmaceutica, N.V.

Schedule of Collaborative Arrangements

Drug development costs to be paid by collaborator (as a percent)

50.00%

Up-front license payment

$ 165,000

Deferred revenue related to up-front license payment

$ 40,400

40,400

Total contingent milestone payments earned

$ 350,000

Notice period required to terminate without cause (in years)

1 year

Notice period required for termination after first commercial sale ( in years)

10 years

Collaborative revenues recognized

Royalty revenues

$ 39,044

32,884

Amortized portion of up-front payment

3,107

Net reimbursement (payment) for telaprevir development costs

(27)

(1,139)

Reimbursement for manufacturing services

10,299

4,449

Collaborative revenues

13,379

6,417

Total revenues

52,423

39,301

Mitsubishi Tanabe Pharma Corporation

Collaborative revenues recognized

Collaborative revenues

$ 0

14,000

License fee paid upon amendment of agreement

$ 105,000

Milestone payment received

$ 65,000

Notice period required to terminate without cause (in days)

60 days

Cystic Fibrosis Foundation Therapeutics Incorporated

Collaborative revenues recognized

Collaborative revenues

$ 3,600

3,900

Milestone payment received

$ 9,300

$ 1,500

Collaborative funding

$ 75,000

Number of years over which funding will be made (in years)

5 years

Number of commercial milestone payments for achievement of certain sales levels for corrector compound such as VX-809 or VX-661 (in payments) | payment

Alios Bio Pharma Inc

Collaborative revenues recognized

Up-front payment

$ 60,000

Milestone payments

25,000

60,000

Development milestone payments, maximum

$ 312,500

Commercial milestone payments, maximum

$ 750,000

Notice period for termination of contract due to technical failure (in days)

30 days

Notice period for termination of contract after completion of clinical trials (in days)

60 days

Latest expiration period for royalty obligation after first commercial sale in country unless contract is terminated earlier (in years)

10 years

Noncontrolling Interest (Alios)

Number of lines on balance sheet where noncontrolling interest is reported | lines

Loss (income) before provision for (benefit from) income taxes

$ 5,297

5,024

Decrease (increase) in fair value of contingent milestone and royalty payments

2,740

970

Provision for (benefit from) income taxes

(3,426)

(2,280)

Net loss (income) attributable to noncontrolling interest (Alios)

4,611

$ 3,714

Restricted cash and cash equivalents (Alios)

63,008

69,983

$ 63,008

Prepaid expenses and other current assets

3,776

672

3,776

Property and equipment, net

1,623

1,728

1,623

Intangible assets

250,600

Goodwill

4,890

Other assets

990

861

990

Accounts payable

1,975

1,054

1,975

Accrued expenses

5,019

6,099

5,019

Deferred tax liability

151,664

152,781

151,664

Other liabilities, excluding current portion

648

1,625

648

Redeemable noncontrolling interest (Alios)

38,872

38,530

38,872

Noncontrolling interest (Alios)

$ 191,845

$ 196,672

$ 191,845

Minimum [Member] | Janssen Pharmaceutica, N.V.

Noncontrolling Interest (Alios)

Tiered Royalty Average Percent of Net Sales

20.00%

Maximum [Member] | Janssen Pharmaceutica, N.V.

Noncontrolling Interest (Alios)

Tiered Royalty Average Percent of Net Sales

30.00%

[1]

Net Income (Loss) Per Share Attributable to Vertex Common Shareholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Basic net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$ (308,016)	$ 91,590
Less: Undistributed earnings allocated to participating securities	0	(906)
Net income (loss) attributable to Vertex common shareholders—basic	$ (308,016)	$ 90,684
Weighted-average shares used to compute basic net income (loss) per common share (shares)	215,421	208,018
Basic net income (loss) attributable to Vertex per common share (usd per share)	$ (1.43)	$ 0.44
Diluted net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$ (308,016)	$ 91,590
Less: Undistributed earnings allocated to participating securities	0	(860)
Plus: Interest expense and amortization of deferred issuance costs related to convertible senior subordinated notes	0	3,749
Net income (loss) attributable to Vertex common shareholders—diluted	$ (308,016)	$ 94,479
Weighted-average shares used to compute basic net income (loss) per common share (shares)	215,421	208,018
Effect of potentially dilutive securities:
Convertible senior subordinated notes (shares)	0	8,891
Stock options (shares)	0	2,289
Other (shares)	0	66
Weighted-average shares used to compute diluted net income (loss) per common share (shares)	215,421	219,264
Diluted net income (loss) attributable to Vertex per common share (usd per share)	$ (1.43)	$ 0.43
Stock options
Effect of potentially dilutive securities:
Antidilutive securities excluded from computation of earnings per share (in shares)	21,848	13,768
Convertible senior subordinated notes
Effect of potentially dilutive securities:
Antidilutive securities excluded from computation of earnings per share (in shares)	8,192	0
Unvested restricted stock and restricted stock units
Effect of potentially dilutive securities:
Antidilutive securities excluded from computation of earnings per share (in shares)	2,682	16

Fair Value Measurements (Details) $ in Thousands	Mar. 31, 2013 USD ($)
Financial assets carried at fair value:
Cash equivalents (Alios)	$ 60,100
Recurring basis \| Total
Financial assets carried at fair value:
Restricted cash	31,934
Total	1,132,608
Recurring basis \| Total \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	201,831
Recurring basis \| Total \| U.S. Treasury securities
Financial assets carried at fair value:
Marketable securities:	13,205
Recurring basis \| Total \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Cash equivalents:	38,588
Marketable securities:	550,478
Recurring basis \| Total \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	216,942
Recurring basis \| Total \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	79,630
Recurring basis \| Level 1
Financial assets carried at fair value:
Restricted cash	31,934
Total	836,036
Recurring basis \| Level 1 \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	201,831
Recurring basis \| Level 1 \| U.S. Treasury securities
Financial assets carried at fair value:
Marketable securities:	13,205
Recurring basis \| Level 1 \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Cash equivalents:	38,588
Marketable securities:	550,478
Recurring basis \| Level 1 \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	0
Recurring basis \| Level 1 \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	0
Recurring basis \| Level 2
Financial assets carried at fair value:
Restricted cash	0
Total	296,572
Recurring basis \| Level 2 \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	0
Recurring basis \| Level 2 \| U.S. Treasury securities
Financial assets carried at fair value:
Marketable securities:	0
Recurring basis \| Level 2 \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Cash equivalents:	0
Marketable securities:	0
Recurring basis \| Level 2 \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	216,942
Recurring basis \| Level 2 \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	79,630
Recurring basis \| Level 3
Financial assets carried at fair value:
Restricted cash	0
Total	0
Recurring basis \| Level 3 \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	0
Recurring basis \| Level 3 \| U.S. Treasury securities
Financial assets carried at fair value:
Marketable securities:	0
Recurring basis \| Level 3 \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Cash equivalents:	0
Marketable securities:	0
Recurring basis \| Level 3 \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	0
Recurring basis \| Level 3 \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	$ 0

Fair Value Measurements (Details 2) - USD ($)
$ in Thousands

1 Months Ended

3 Months Ended

Sep. 30, 2010

Mar. 31, 2013

Dec. 31, 2012

Debt Offerings, Fair Value Disclosure

Convertible senior subordinated notes (due 2015)

^[1]

$ 400,000

Convertible Senior Subordinated Notes 3.35 Percent Due 2015

Debt Offerings, Fair Value Disclosure

Convertible senior subordinated notes (due 2015)

$ 400,000

Interest rate (as a percent)

3.35%

Fair value of convertible senior subordinated notes

$ 483,000

[1]

Marketable Securities (Details) - USD ($) $ in Thousands	Mar. 31, 2013	Dec. 31, 2012
Summary of cash, cash equivalents and marketable securities
Amortized Cost	$ 1,239,147	$ 1,321,019
Gross Unrealized Gains	247	217
Gross Unrealized Losses	(40)	(21)
Fair Value	1,239,354	1,321,215
Total cash and cash equivalents
Summary of cash, cash equivalents and marketable securities
Amortized Cost	379,095	489,407
Gross Unrealized Gains	4	0
Gross Unrealized Losses	0	0
Fair Value	379,099	489,407
Cash and money market funds
Summary of cash, cash equivalents and marketable securities
Amortized Cost	340,511	489,407
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	340,511	489,407
Government-sponsored enterprise securities
Summary of cash, cash equivalents and marketable securities
Amortized Cost	38,584
Gross Unrealized Gains	4
Gross Unrealized Losses	0
Fair Value	38,588
Available-for-sale Securities, Amortized Cost Basis	550,418	440,181
Available-for-sale Securities, Gross Unrealized Gains	72	49
Available-for-sale Securities, Gross Unrealized Losses	(12)	(5)
Available-for-sale Securities, Fair Value Disclosure	550,478	440,225
Available-for-sale Securities [Member]
Summary of cash, cash equivalents and marketable securities
Available-for-sale Securities, Amortized Cost Basis	860,052	831,612
Available-for-sale Securities, Gross Unrealized Gains	243	217
Available-for-sale Securities, Gross Unrealized Losses	(40)	(21)
Available-for-sale Securities, Fair Value Disclosure	860,255	831,808
U.S. Treasury securities
Summary of cash, cash equivalents and marketable securities
Available-for-sale Securities, Amortized Cost Basis	13,204	111,350
Available-for-sale Securities, Gross Unrealized Gains	1	2
Available-for-sale Securities, Gross Unrealized Losses	0	(2)
Available-for-sale Securities, Fair Value Disclosure	13,205	111,350
Commercial paper
Summary of cash, cash equivalents and marketable securities
Available-for-sale Securities, Amortized Cost Basis	216,776	225,294
Available-for-sale Securities, Gross Unrealized Gains	166	155
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available-for-sale Securities, Fair Value Disclosure	216,942	225,449
Corporate debt securities (due within 1 year)
Summary of cash, cash equivalents and marketable securities
Available-for-sale Securities, Amortized Cost Basis	59,666	15,429
Available-for-sale Securities, Gross Unrealized Gains	3	1
Available-for-sale Securities, Gross Unrealized Losses	(19)	(1)
Available-for-sale Securities, Fair Value Disclosure	59,650	15,429
Corporate debt securities (due after 1 year through 5 years)
Summary of cash, cash equivalents and marketable securities
Available-for-sale Securities, Amortized Cost Basis	19,988	39,358
Available-for-sale Securities, Gross Unrealized Gains	1	10
Available-for-sale Securities, Gross Unrealized Losses	(9)	(13)
Available-for-sale Securities, Fair Value Disclosure	$ 19,980	$ 39,355

Marketable Securities (Details 2) - USD ($)
$ in Thousands

Mar. 31, 2013

Dec. 31, 2012

Cash and Cash Equivalents [Abstract]

Cash equivalents (Alios)

^[1]

$ 63,008

$ 69,983

[1]

Inventories-By Product (Details) - USD ($)
$ in Thousands

Mar. 31, 2013

Dec. 31, 2012

Product Information [Line Items]

Inventories

^[1]

$ 21,532

$ 30,464

INCIVEK

Product Information [Line Items]

Inventories

12,754

22,792

KALYDECO

Product Information [Line Items]

Inventories

$ 8,778

$ 7,672

[1]

Inventories Inventories- Schedule of Inventories (Details) - USD ($)
$ in Thousands

Mar. 31, 2013

Dec. 31, 2012

Inventory Disclosure [Abstract]

Raw materials

$ 4,796

$ 3,754

Work-in-process

2,930

11,317

Finished goods

13,806

15,393

Total

^[1]

$ 21,532

$ 30,464

[1]

Fan Pier Leases (Details)
$ in Thousands, squarefeet in Millions

3 Months Ended

Jun. 30, 2011

leases

squarefeet

building

Mar. 31, 2013

USD ($)

Dec. 31, 2012

USD ($)

Fan Pier Leases [Abstract]

Number of leases (leases) | leases

Area of leased property (in square feet) | squarefeet

1.1

Number of buildings under lease agreement (buildings) | building

Initial term of lease agreement (in years)

15 years

Optional term of lease agreement (in years)

10 years

Construction in progress

$ 356,900

$ 290,700

Construction financing lease obligation

^[1]

$ 316,821

$ 268,031

[1]

Intangible Assets and Goodwill (Details) - USD ($)

3 Months Ended

Mar. 31, 2013

Mar. 31, 2012

Dec. 31, 2012

Indefinite-Lived Intangible Assets [Line Items]

Intangible assets

^[1]

$ 250,600,000

$ 663,500,000

Intangible asset impairment charge

412,900,000

$ 0

Deferred federal income tax expense (benefit)

127,600,000

Asset impairment charges

$ 285,300,000

Extraordinary Item, Earnings Per Share Impact, Net

$ 1.32

Goodwill

^[1]

$ 30,992,000

30,992,000

Goodwill, period increase (decrease)

$ 0

Research and Development Arrangement | VX-222Asset [Member]

Indefinite-Lived Intangible Assets [Line Items]

Intangible assets

412,900,000

Alios Bio Pharma Inc

Indefinite-Lived Intangible Assets [Line Items]

Goodwill

$ 4,890,000

4,890,000

Alios Bio Pharma Inc | Research and Development Arrangement

Indefinite-Lived Intangible Assets [Line Items]

Intangible assets

$ 250,600,000

[1]

Convertible Senior Subordinated Notes (Details)

1 Months Ended

3 Months Ended

Sep. 30, 2010

USD ($)

$ / shares

Mar. 31, 2013

USD ($)

Dec. 31, 2012

USD ($)

Convertible Senior Subordinated Notes

Convertible senior subordinated notes

^[1]

$ 400,000,000

Convertible Senior Subordinated Notes 3.35 Percent Due 2015

Convertible Senior Subordinated Notes

Convertible senior subordinated notes

$ 400,000,000

Net proceeds from convertible debt offering

391,600,000

Underwriting discount

8,000,000

Debt issuance costs

$ 400,000

Conversion price (in dollars per share) | $ / shares

$ 48.83

Original conversion rate, number of shares to be issued per $1000 of principal (in shares) | shares

20.4794

Convertible debt principal amount, basis for exchange

$ 1,000

Interest rate (as a percent)

3.35%

Percent closing price needs to exceed the conversion price for at least 20 trading days within 30 consecutive trading days for provisional redemption (as a percent)

130.00%

Minimum number of days within 30 consecutive trading days the closing price needs to exceed the conversion price for provisional redemption (in days)

20 days

Total consecutive trading days during which the closing price must exceed the conversion price for at least 20 trading days for provisional redemption (in days)

30 days

Percentage of principal amount used in computation of provisional redemption price (as a percent)

100.00%

Total interest payments on notes being provisionally redeemed equal to interest for specified number of years (in years)

3 years

[1]

Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Stock-based compensation expense:
Less stock-based compensation expense capitalized to inventories	$ (299)	$ (250)
Total stock-based compensation expense included in costs and expenses	31,275	27,688
Stock options
Stock-based compensation expense:
Stock-based compensation expense by type of award	19,674	18,222
Type of award:
Unrecognized Expense, Net of Estimated Forfeitures	$ 187,456
Weighted-average Recognition Period (in years)	2 years 10 months 24 days
Restricted stock and restricted stock units
Stock-based compensation expense:
Stock-based compensation expense by type of award	$ 9,378	7,286
Type of award:
Unrecognized Expense, Net of Estimated Forfeitures	$ 86,795
Weighted-average Recognition Period (in years)	2 years 6 months 29 days
ESPP share issuances
Stock-based compensation expense:
Stock-based compensation expense by type of award	$ 2,522	2,430
Type of award:
Unrecognized Expense, Net of Estimated Forfeitures	$ 3,091
Weighted-average Recognition Period (in years)	5 months 27 days
Research and development expenses
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	$ 19,349	17,204
Sales, general and administrative expenses
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	$ 11,926	$ 10,484

Stock-based Compensation Expense (Details 2) shares in Thousands	3 Months Ended
	Mar. 31, 2013 $ / shares shares
Exercise Price Range from Dollars 9.07 to Dollars 20.00 [Member]
Share-based Compensation Arrangement by Share-based Payment Award
Exercise price, low end of range (usd per share)	$ 9.07
Exercise price, high end of range (usd per share)	$ 20.00
Exercise price range, options outstanding (in shares) \| shares	887
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	3 years 18 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 15.33
Exercise price range, options exercisable (in shares) \| shares	887
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 15.33
Exercise Price Range from Dollars 20.01 to Dollars 30.00 [Member]
Share-based Compensation Arrangement by Share-based Payment Award
Exercise price, low end of range (usd per share)	20.01
Exercise price, high end of range (usd per share)	$ 30.00
Exercise price range, options outstanding (in shares) \| shares	1,394
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	6 years 1 month 17 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 29.32
Exercise price range, options exercisable (in shares) \| shares	1,052
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 29.14
Exercise Price Range from Dollars 30.01 to Dollars 40.00 [Member]
Share-based Compensation Arrangement by Share-based Payment Award
Exercise price, low end of range (usd per share)	30.01
Exercise price, high end of range (usd per share)	$ 40.00
Exercise price range, options outstanding (in shares) \| shares	11,913
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	6 years 7 months 10 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 36.11
Exercise price range, options exercisable (in shares) \| shares	7,905
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 35.41
Exercise Price Range from Dollars 40.01 to Dollars 50.00 [Member]
Share-based Compensation Arrangement by Share-based Payment Award
Exercise price, low end of range (usd per share)	40.01
Exercise price, high end of range (usd per share)	$ 50.00
Exercise price range, options outstanding (in shares) \| shares	5,333
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	9 years 6 months 11 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 46.34
Exercise price range, options exercisable (in shares) \| shares	341
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 47.41
Exercise Price Range from Dollars 50.01 to Dollars 60.00 [Member]
Share-based Compensation Arrangement by Share-based Payment Award
Exercise price, low end of range (usd per share)	50.01
Exercise price, high end of range (usd per share)	$ 60.00
Exercise price range, options outstanding (in shares) \| shares	2,268
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	8 years 5 months 16 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 53.44
Exercise price range, options exercisable (in shares) \| shares	926
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 54.03
Exercise Price Range From Dollars 60.01 to 64.30 [Member]
Share-based Compensation Arrangement by Share-based Payment Award
Exercise price, low end of range (usd per share)	60.01
Exercise price, high end of range (usd per share)	$ 64.30
Exercise price range, options outstanding (in shares) \| shares	53
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	8 years 11 months 1 day
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 63.31
Exercise price range, options exercisable (in shares) \| shares	11
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 63.23

Sale of HIV Protease Inhibitor Royalty Stream (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2008	Mar. 31, 2013
Sale of HIV Protease Inhibitor Royalty Stream
Gross proceeds from sale of royalty rights receivable from GlaxoSmithKline	$ 160.0
Deferred revenues related to the one-time cash payment agreement with GlaxoSmithKline		$ 77.8

Income Taxes (Details) - USD ($)

3 Months Ended

Mar. 31, 2013

Mar. 31, 2012

Dec. 31, 2012

Tax Carryforwards

Provision for (benefit from) income taxes

$ (130,313,000)

$ 32,000

Intangible asset impairment charge

412,900,000

Deferred federal income tax expense (benefit)

127,600,000

Deferred tax liability

^[1]

151,664,000

$ 280,367,000

Federal income tax net operating loss carryfowards

2,600,000,000

State income tax net operating loss carryforwards

1,500,000,000

Federal

Tax Carryforwards

Tax credits

98,000,000

State

Tax Carryforwards

Provision for (benefit from) income taxes

(126,900,000)

Tax credits

60,300,000

Total Vertex Shareholders' Equity

Tax Carryforwards

Provision for (benefit from) income taxes

2,300,000

Noncontrolling Interest (Alios)

Tax Carryforwards

Provision for (benefit from) income taxes

(3,400,000)

(2,300,000)

Alios Bio Pharma Inc

Tax Carryforwards

Provision for (benefit from) income taxes

(3,426,000)

$ (2,280,000)

Deferred tax liability

151,664,000

$ 152,781,000

Income taxes payable

$ 0

[1]

Restructuring Liability (Details)	1 Months Ended
Restructuring Liability (Details)	Jan. 31, 2010	Dec. 31, 2003
Kendall Square Lease
Lease term (in years)	15 years
Kendall Square Facility
Kendall Square Lease
Discount rate, lease restructuring liability (as a percent)		10.00%

Restructuring Liability (Details 2) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Restructuring activities
Liability, beginning of the period	$ 23,328	$ 26,313
Cash payments	(3,573)	(3,686)
Cash received from subleases	2,665	2,486
Restructuring expense	39	360
Liability, end of the period	$ 22,459	$ 25,473

Contingencies Contingencies (Details) - USD ($)	Mar. 31, 2013	Dec. 31, 2012
Commitments and Contingencies Disclosure [Abstract]
Material contingent liabilities accrued	$ 0	$ 0