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Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Jun. 30, 2013	Jul. 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	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		232,812,301

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Revenues:
Product revenues, net	$ 254,789	$ 373,273	$ 522,170	$ 748,648
Royalty revenues	49,120	33,480	92,693	72,461
Collaborative revenues	6,841	11,552	24,255	35,933
Total revenues	310,750	418,305	639,118	857,042
Costs and expenses:
Cost of product revenues (Note H)	24,695	104,549	55,650	130,467
Royalty expenses	13,236	9,874	25,024	23,167
Research and development expenses	222,455	196,544	440,550	392,915
Sales, general and administrative expenses	106,521	117,514	199,400	228,660
Restructuring expense	776	594	815	954
Intangible asset impairment charge (Note I)	0	0	412,900	0
Total costs and expenses	367,683	429,075	1,134,339	776,163
Income (loss) from operations	(56,933)	(10,770)	(495,221)	80,879
Other income (expense), net	(6,578)	(3,635)	(11,230)	(7,376)
Income (loss) before provision for (benefit from) income taxes	(63,511)	(14,405)	(506,451)	73,503
Provision for (benefit from) income taxes	(1,799)	20,063	(132,112)	20,095
Net income (loss)	(61,712)	(34,468)	(374,339)	53,408
Net loss (income) attributable to noncontrolling Interest (Alios)	4,547	(30,463)	9,158	(26,749)
Net income (loss) attributable to Vertex	$ (57,165)	$ (64,931)	$ (365,181)	$ 26,659
Net income (loss) per share attributable to Vertex common shareholders:
Basic (usd per share)	$ (0.26)	$ (0.31)	$ (1.67)	$ 0.13
Diluted (usd per share)	$ (0.26)	$ (0.31)	$ (1.67)	$ 0.12
Shares used in per share calculations:
Basic (shares)	222,053	211,344	218,795	209,681
Diluted (shares)	222,053	211,344	218,795	212,957

Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract]
Net income (loss)	$ (61,712)	$ (34,468)	$ (374,339)	$ 53,408
Changes in other comprehensive income (loss):
Unrealized holding gains (losses) on marketable securities, net of tax	(170)	105	(159)	255
Foreign currency translation adjustment	89	(150)	(521)	125
Total changes in other comprehensive income (loss)	(81)	(45)	(680)	380
Comprehensive income (loss)	(61,793)	(34,513)	(375,019)	53,788
Comprehensive loss (income) attributable to noncontrolling interest (Alios)	4,547	(30,463)	9,158	(26,749)
Comprehensive income (loss) attributable to Vertex	$ (57,246)	$ (64,976)	$ (365,861)	$ 27,039

- 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
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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)
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-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

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-Publisher FASB
-Name Accounting Standards Codification
-Topic 810
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-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
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-Paragraph 1A
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-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
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-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)
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-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)
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-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

Jun. 30, 2013

Dec. 31, 2012

Current assets:

Cash and cash equivalents

^[1]

$ 531,247

$ 489,407

Marketable securities, available for sale

^[1]

899,449

831,808

Restricted cash and cash equivalents (Alios)

^[1]

58,288

69,983

Accounts receivable, net

^[1]

164,866

143,250

Inventories

^[1]

19,509

30,464

Prepaid expenses and other current assets

^[1]

43,231

24,673

Total current assets

^[1]

1,716,590

1,589,585

Restricted cash

^[1]

122

31,934

Property and equipment, net

^[1]

581,738

433,609

Intangible assets

^[1]

250,600

663,500

Goodwill

^[1]

30,992

Other assets

^[1]

4,287

9,668

Total assets

^[1]

2,584,329

2,759,288

Current liabilities:

Accounts payable

^[1]

48,570

101,292

Accrued expenses

^[1]

260,849

264,884

Deferred revenues, current portion

^[1]

32,900

27,566

Accrued restructuring expense, current portion

^[1]

5,047

4,758

Capital lease obligations, current portion

^[1]

10,664

13,707

Other liabilities, current portion

^[1]

23,622

20,417

Total current liabilities

^[1]

381,652

432,624

Deferred revenues, excluding current portion

^[1]

84,066

96,242

Accrued restructuring expense, excluding current portion

^[1]

17,005

18,570

Capital lease obligations, excluding current portion

^[1]

28,088

15,170

Convertible senior subordinated notes (due 2015)

^[1]

400,000

Deferred tax liability

^[1]

149,706

280,367

Construction financing lease obligation

^[1]

359,100

268,031

Other liabilities, excluding current portion

^[1]

16,049

13,902

Total liabilities

^[1]

1,035,666

1,524,906

Commitments and contingencies

^[1]

Redeemable noncontrolling interest (Alios)

^[1]

39,214

38,530

Shareholders’ equity:

Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding at June 30, 2013 and December 31, 2012

^[1]

Common stock, $0.01 par value; 300,000,000 shares authorized at June 30, 2013 and December 31, 2012; 232,176,564 and 217,286,868 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively

^[1]

2,300

2,149

Additional paid-in capital

^[1]

5,208,431

4,519,448

Accumulated other comprehensive loss

^[1]

(1,230)

(550)

Accumulated deficit

^[1]

(3,887,048)

(3,521,867)

Total Vertex shareholders’ equity

^[1]

1,322,453

999,180

Noncontrolling interest (Alios)

^[1]

186,996

196,672

Total shareholders’ equity

^[1]

1,509,449

1,195,852

Total liabilities and shareholders’ equity

^[1]

$ 2,584,329

$ 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	Jun. 30, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)		$ 0.01
Preferred stock, shares authorized		1,000,000
Preferred stock, shares issued		0
Preferred stock, shares outstanding		0
Common stock, par value (usd per share)		$ 0.01
Common stock, shares authorized		300,000,000
Common stock, shares issued		217,286,868
Common stock, shares outstanding		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

255

Foreign currency translation adjustment

125

Net income (loss) attributable to Vertex common shareholders

26,659

Net income (loss)

53,408

26,659

26,749

Issuances of common stock:

Benefit plans (shares)

6,131

Benefit plans

163,477

163,332

$ 61

163,271

145

Stock-based compensation expense

59,616

59,345

271

Tax benefit from equity compensation

1,214

Change in liquidation value of noncontrolling interest

(878)

878

Balance (shares) at Jun. 30, 2012

215,435

Balance at Jun. 30, 2012

1,205,693

1,037,773

$ 2,133

4,424,489

(673)

(3,388,176)

167,920

37,914

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

(159)

Foreign currency translation adjustment

(521)

Net income (loss) attributable to Vertex common shareholders

(365,181)

Net income (loss)

(374,339)

(365,181)

(9,158)

Issuances of common stock:

Benefit plans (shares)

6,614

Benefit plans

213,729

213,801

$ 68

213,733

(72)

Convertible senior subordinated notes (due 2015) conversion

8,276

Stock Issued During Period, Value, Conversion of Convertible Securities

402,265

$ 83

402,182

Stock-based compensation expense

73,306

73,068

238

Change in liquidation value of noncontrolling interest

(684)

684

Balance (shares) at Jun. 30, 2013

232,177

Balance at Jun. 30, 2013

$ 1,509,449

^[1]

$ 1,322,453

$ 2,300

$ 5,208,431

$ (1,230)

$ (3,887,048)

$ 186,996

$ 39,214

[1]

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

6 Months Ended

Jun. 30, 2013

Jun. 30, 2012

Cash flows from operating activities:

Net income (loss)

$ (374,339)

$ 53,408

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

Depreciation and amortization expense

21,245

17,225

Stock-based compensation expense

72,625

59,067

Other non-cash based compensation expense

5,857

5,469

Intangible asset impairment charge

412,900

Deferred income taxes

(130,661)

19,310

Write-down of inventories to net realizable value

5,083

78,000

Other non-cash items, net

755

130

Changes in operating assets and liabilities:

Accounts receivable, net

(18,462)

(2,483)

Inventories

(6,620)

34,288

Prepaid expenses and other current assets

(18,152)

(40,053)

Accounts payable

(53,374)

(15,313)

Accrued expenses and other liabilities

11,316

9,310

Excess tax benefit from share-based payment arrangements

1,214

Accrued restructuring expense

(1,276)

(1,483)

Deferred revenues

(6,842)

(25,764)

Net cash provided by (used in) operating activities

(66,705)

121,321

Cash flows from investing activities:

Purchases of marketable securities

(898,706)

(777,604)

Sales and maturities of marketable securities

830,906

502,188

Expenditures for property and equipment

(18,408)

(21,698)

Decrease (increase) in restricted cash

31,812

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

11,695

(4,146)

Decrease (increase) in other assets

(414)

485

Net cash used in investing activities

(42,287)

(301,745)

Cash flows from financing activities:

Excess tax benefit from share-based payment arrangements

1,214

Issuances of common stock from employee benefit plans

207,872

158,003

Payments to redeem secured notes (due 2015)

(158)

Payments on capital lease obligations

(12,246)

Payments on construction financing lease obligation

(44,115)

Net cash provided by (used in) financing activities

151,353

159,217

Effect of changes in exchange rates on cash

(521)

(52)

Net increase (decrease) in cash and cash equivalents

41,840

(21,259)

Cash and cash equivalents—beginning of period

489,407

^[1]

475,320

Cash and cash equivalents—end of period

^[1]

531,247

Supplemental disclosure of cash flow information:

Cash paid for interest

6,700

Conversion of convertible senior subordinated notes (due 2015) for common stock

399,842

Interest on converted convertible senior subordinated notes (due 2015) offset to additional paid-in capital

6,700

Unamortized debt issuance costs of converted convertible subordinated notes (due 2015) offset to additional paid-in capital

4,230

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

130,222

104,341

Assets acquired under capital lease

$ 21,576

$ 29,072

[1]

Basis of Presentation and Accounting Policies	3 Months Ended
Basis of Presentation and Accounting Policies	Jun. 30, 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 June 30, 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 six months ended June 30, 2013 that had a material effect on the Company's condensed consolidated financial statements.

Product Revenues, Net

3 Months Ended

Jun. 30, 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.

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 upon delivery to its Customer's locations. 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 six months ended June 30, 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	19,880			99,540			2,029			6,394			127,843
Adjustments related to prior period sales	348			3,380			8,247			(136		)	11,839
Credits/payments made	(22,404		)	(103,142		)	(2,116		)	(6,831		)	(134,493		)
Balance at June 30, 2013	$	3,240		$	63,338		$	11,012		$	2,992		$	80,582

Collaborative Arrangements

3 Months Ended

Jun. 30, 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 June 30, 2013, there were $37.3 million in deferred revenues related to this up-front license payment that the Company expects to recognize over the remaining estimated period of performance. The Company's estimates regarding the period of performance under the Janssen agreement have changed in the past, and due to the evolving nature of the landscape for treatments for HCV infection, the estimated period of performance may change in the future.

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 and six months ended June 30, 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 six months ended June 30, 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 and six months ended June 30, 2013 and 2012, the Company recognized the following revenues attributable to the Janssen collaboration:



	Three Months Ended June 30,					Six Months Ended June 30,
	2013		2012			2013		2012
	(in thousands)					(in thousands)
Royalty revenues (INCIVO)	$	44,070	$	27,970		$	83,114	$	60,854
Collaborative revenues:
Amortized portion of up-front payment	$	3,107	$	3,107		$	6,214	$	6,214
Net reimbursement (payment) for telaprevir development costs	37		(927		)	9		(2,066		)
Reimbursement for manufacturing services	—		—			10,299		4,449
Total collaborative revenues attributable to the Janssen collaboration	$	3,144	$	2,180		$	16,522	$	8,597
Total revenues attributable to the Janssen collaboration	$	47,214	$	30,150		$	99,636	$	69,451

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 2013 and $4.8 million and $18.9 million in collaborative revenues attributable to the Mitsubishi Tanabe collaboration in the three and six months ended June 30, 2012, respectively.

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.

During the three and six months ended June 30, 2013 and 2012, the Company recognized the following revenues attributable to the CFFT collaboration:



	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(in thousands)				(in thousands)
Collaborative revenues attributable to the CFFT collaboration	$	4,244	$	4,527	$	7,803	$	8,457

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. Upon entering into the Alios Agreement, the Company paid Alios a $60.0 million up-front payment. As of June 30, 2013, Alios had earned an aggregate of $60.0 million in development milestone payments pursuant to the Alios Agreement. 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. 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 provided funding for a research program that was 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 and six months ended June 30, 2013 and 2012 is as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)						(in thousands)
Loss (income) before provision for (benefit from) income taxes	$	6,824		$	4,467		$	12,121		$	9,491
Decrease (increase) in fair value of contingent milestone and royalty payments	80			(56,170		)	2,820			(55,200		)
Provision for (benefit from) income taxes	(2,357		)	21,240			(5,783		)	18,960
Net loss (income) attributable to noncontrolling interest (Alios)	$	4,547		$	(30,463	)	$	9,158		$	(26,749	)

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 and six months ended June 30, 2013, the fair value of the contingent milestone payments and royalties payable by the Company to Alios related to the HCV nucleotide analogue program decreased by $0.1 million and $2.8 million, respectively, which decreased net loss attributable to Vertex by a corresponding amount.

In the three and six months ended June 30, 2012, the fair value of contingent milestone and royalty payments increased by $56.2 million and $55.2 million, respectively, primarily because the Company received positive clinical data from a Phase 1 clinical trial evaluating ALS-2200 (VX-135), which increased the probability that Alios would earn future payments from the Company under the Alios Agreement.

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 June 30, 2013		As of December 31, 2012
	(in thousands)
Restricted cash and cash equivalents (Alios)	$	58,288	$	69,983
Prepaid expenses and other current assets	4,115		672
Property and equipment, net	1,478		1,728
Intangible assets	250,600		250,600
Goodwill	4,890		4,890
Other assets	861		861
Accounts payable	1,666		1,054
Accrued expenses	5,294		6,099
Deferred tax liability	149,706		152,781
Other liabilities, excluding current portion	1,078		1,625
Redeemable noncontrolling interest (Alios)	39,214		38,530
Noncontrolling interest (Alios)	186,996		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

Jun. 30, 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 and six months ended June 30, 2013 and 2012:



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			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	$	(57,165	)	$	(64,931	)	$	(365,181	)	$	26,659
Less: Undistributed earnings allocated to participating securities	—			—			—			(260		)
Net income (loss) attributable to Vertex common shareholders—basic	$	(57,165	)	$	(64,931	)	$	(365,181	)	$	26,399
Basic weighted-average common shares outstanding	222,053			211,344			218,795			209,681
Basic net income (loss) attributable to Vertex per common share	$	(0.26	)	$	(0.31	)	$	(1.67	)	$	0.13

Diluted net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$	(57,165	)	$	(64,931	)	$	(365,181	)	$	26,659
Less: Undistributed earnings allocated to participating securities	—			—			—			(256		)
Net income (loss) attributable to Vertex common shareholders—diluted	$	(57,165	)	$	(64,931	)	$	(365,181	)	$	26,403
Weighted-average shares used to compute basic net income (loss) per common share	222,053			211,344			218,795			209,681
Effect of potentially dilutive securities:
Stock options	—			—			—			3,188
Other	—			—			—			88
Weighted-average shares used to compute diluted net income (loss) per common share	222,053			211,344			218,795			212,957
Diluted net income (loss) attributable to Vertex per common share	$	(0.26	)	$	(0.31	)	$	(1.67	)	$	0.12

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 June 30,		Six Months Ended June 30,
	2013	2012	2013	2012
	(in thousands)		(in thousands)
Stock options	16,802	18,771	16,802	10,624
Convertible senior subordinated notes	—	8,192	—	8,192
Unvested restricted stock and restricted stock units	2,600	2,087	2,600	8

Fair Value Measurements

3 Months Ended

Jun. 30, 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 June 30, 2013, the Company’s investments were in money market funds, short-term U.S. Treasury securities, short-term government-sponsored enterprise securities, corporate debt securities and commercial paper.

As of June 30, 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 money market funds, 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 and six months ended June 30, 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 June 30, 2013
			Fair Value Hierarchy
	Total		Level 1		Level 2		Level 3
	(in thousands)
Financial assets carried at fair value:
Cash equivalents:
Money market funds	$	300,472	$	300,472	$	—	$	—
U.S. Treasury securities	680		680		—		—
Marketable securities:
U.S. Treasury securities	3,050		3,050		—		—
Government-sponsored enterprise securities	598,411		598,411		—		—
Commercial paper	192,878		—		192,878		—
Corporate debt securities	105,110		—		105,110		—
Total	$	1,200,601	$	902,613	$	297,988	$	—

Alios’ cash equivalents of $56.5 million as of June 30, 2013 consisted of money market funds, which were valued based on Level 1 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

Jun. 30, 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 June 30, 2013
Cash and cash equivalents:
Cash and money market funds	$	530,567	$	—	$	—		$	530,567
U.S. Treasury securities	680		—		—			680
Total cash and cash equivalents	$	531,247	$	—	$	—		$	531,247
Marketable securities:
U.S. Treasury securities (due within 1 year)	$	3,050	$	—	$	—		$	3,050
Government-sponsored enterprise securities (due within 1 year)	598,440		17		(46		)	598,411
Commercial paper (due within 1 year)	192,702		176		—			192,878
Corporate debt securities (due within 1 year)	105,220		—		(110		)	105,110
Total marketable securities	$	899,412	$	193	$	(156	)	$	899,449
Total cash, cash equivalents and marketable securities	$	1,430,659	$	193	$	(156	)	$	1,430,696

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’ $58.3 million and $70.0 million, respectively, of cash and money market funds as of June 30, 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.

Accumulated Other Comprehensive Income (Loss) (Notes)

6 Months Ended

Jun. 30, 2013

Accumulated Other Comprehensive Income (Loss) [Abstract]

Comprehensive Income (Loss) Note

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in accumulated other comprehensive income (loss) by component, net of tax:



	Foreign Currency Translation Adjustment			Unrealized Holding Gains (Losses) on Marketable Securities, Net of Tax			Total
	(in thousands)
Balance at December 31, 2012	$	(746	)	$	196		$	(550	)
Other comprehensive income (loss) before reclassifications	(521		)	(159		)	(680		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			—			—
Net current period other comprehensive income (loss)	(521		)	(159		)	(680		)
Balance at June 30, 2013	$	(1,267	)	$	37		$	(1,230	)

For the six months ended June 30, 2013, amounts reclassified from accumulated other comprehensive income (loss) were not significant. Amounts reclassified for unrealized gains (losses) on available-for-sale securities are recorded as part of other income (expense), net on the Company's condensed consolidated statements of income.

- Definition

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e689-108580

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=20435746&loc=SL7669619-108580

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e716-108580

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e640-108580

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 16
-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e709-108580

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e637-108580

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.3-04)
-URI http://asc.fasb.org/extlink&oid=6959260&loc=d3e187085-122770

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Reclassification Adjustments
-URI http://asc.fasb.org/extlink&oid=6522872

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e681-108580

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 130
-Paragraph 14-26
-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

Inventories

3 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

Inventories

entories

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



	As of June 30, 2013		As of December 31, 2012
	(in thousands)
Raw materials	$	3,103	$	3,754
Work-in-process	4,655		11,317
Finished goods	11,751		15,393
Total	$	19,509	$	30,464

In the three months ended June 30, 2013 and 2012, the Company recorded within cost of product revenues $5.1 million and $78.0 million, respectively, of write-offs for excess and obsolete inventories.

Intangible Assets and Goodwill	3 Months Ended
Intangible Assets and Goodwill	Jun. 30, 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 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 the six months ended June 30, 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 six months ended June 30, 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 $1.30 per share. The field of HCV infection treatment is highly competitive and characterized by rapid technological advances and the development of drug candidates for the treatment of HCV infection is subject to numerous risks. 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. In July 2013, U.S. Food and Drug Administration ("FDA") placed a partial clinical hold on the Company's Phase 2 clinical trial evaluating VX-135 in combination with ribavirin. The partial clinical hold prevents the Company from evaluating a 200 mg dose of VX-135 in the United States following observation of reversible elevated liver enzymes in patients who received 400 mg of VX-135 in combination with ribavirin in a Phase 2 clinical trial in Europe. Evaluation of a 100 mg dose of VX-135 in combination with ribavirin as part of the 12-week Phase 2 clinical trial in the United States is continuing as planned. The Company recently completed dosing of 100 mg and 200 mg of VX-135 in combination with ribavirin as part of the 12-week Phase 2 clinical trial in Europe, and both doses were well tolerated with no discontinuations. No serious adverse events have been reported and no liver or cardiac safety issues have been identified in the 100 mg or 200 mg dose arms of this clinical trial in Europe. Vertex also recently initiated dosing of 100 mg and 200 mg of VX-135 in combination with daclatasvir, an NS5A replication complex inhibitor being developed by Bristol-Myers Squibb, in a Phase 2 clinical trial in New Zealand. The Company evaluated this data and the related partial clinical hold and has concluded that it does not represent an indicator of impairment. The Company will continue to evaluate VX-135 for impairment each reporting period. 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 June 30, 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 and six months ended June 30, 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	Jun. 30, 2013
Debt Disclosure [Abstract]
Convertible Senior Subordinated Notes	Convertible Senior Subordinated Notes In 2010, the Company completed an offering of $400.0 million in aggregate principal amount of 3.35% convertible senior subordinated notes due 2015 (the "2015 Notes"). This offering resulted in $391.6 million of net proceeds to the Company. The underwriting discount and other expenses of $8.4 million were recorded as debt issuance costs and were included in other assets on the Company’s condensed consolidated balance sheets. The 2015 Notes were 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. If the closing price of the Company’s common stock exceeded 130% of the conversion price for at least 20 trading days within a period of 30 consecutive trading days, the Company had the right to redeem the 2015 Notes at its option at a redemption price equal to 100% of the principal amount of the 2015 Notes to be redeemed. In the second quarter of 2013, the Company's common stock exceeded 130% of the conversion price of the 2015 Notes for at least 20 trading days within a period of 30 consecutive trading days, and the Company notified the holders of the 2015 Notes that it would redeem the 2015 Notes on June 17, 2013. In response to the Company's call of the 2015 Notes for redemption, in accordance with the provisions of the 2015 Notes, the holders of $399.8 million in aggregate principal amount of 2015 Notes elected to convert their 2015 Notes into the Company's common stock at the conversion price of approximately $48.83 per share. As a result of these conversions, the Company issued 8,188,448 shares of common stock. The remaining $0.2 million in aggregate principal amount of 2015 Notes was redeemed on June 17, 2013. Pursuant to the terms of the 2015 Notes, the Company made an additional payment of $16.75 per $1,000 principal amount, payable in shares of the Company’s common stock, to the holders of the 2015 Notes that converted or redeemed their 2015 Notes after the Company called the 2015 Notes for redemption. These payments resulted in the issuance of an additional 87,109 shares of the Company's common stock. In the second quarter of 2013, the Company recognized an aggregate of $6.7 million in interest expense related to the 2015 Notes. Unamortized debt issuance costs for the 2015 Notes of $4.2 million were recorded as an offset to additional paid-in capital.

- 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

Long-term Obligations

3 Months Ended

Jun. 30, 2013

Long-term Debt and Capital Lease Obligations [Abstract]

Long-term Obligations

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 $421.3 million and $290.7 million as of June 30, 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 $359.1 million and $268.0 million as of June 30, 2013 and December 31, 2012, respectively. As of June 30, 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.

Capital Leases

The Company has outstanding capital leases for equipment, leasehold improvements and software licenses with terms through 2018. The capital leases bear interest at rates ranging from 4% to 7% per year. The following table sets forth the Company’s future minimum payments due under capital leases as of June 30, 2013:



Year	(in thousands)
2013	$	3,468
2014	14,053
2015	11,585
2016	5,048
2017	5,048
2018	4,627
Total payments	43,829
Less: amount representing interest	(5,077		)
Present value of payments	$	38,752

Financing Arrangements

In the first half of 2013, the Company began supporting $31.9 million in irrevocable stand-by letters of credit issued in support of property leases and other similar agreements with an unsecured credit facility with a one-year term. The Company previously had cash-collateralized these stand-by letters of credit. As a result of this credit facility, the restricted cash reflected on the Company's condensed consolidated balance sheets decreased by $31.8 million net of other activity recorded during the period and the Company's cash and cash equivalents increased by a corresponding amount.

Stock-based Compensation Expense

3 Months Ended

Jun. 30, 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 and six months ended June 30, 2013 and 2012 was as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)						(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	29,949		$	22,683		$	49,623		$	40,905
Restricted stock and restricted stock units	9,732			7,253			19,110			14,539
ESPP share issuances	2,051			1,742			4,573			4,172
Less stock-based compensation expense capitalized to inventories	(382		)	(299		)	(681		)	(549		)
Total stock-based compensation expense included in costs and expenses	$	41,350		$	31,379		$	72,625		$	59,067

Stock-based compensation expense by line item:
Research and development expenses	$	25,740		$	19,777		$	45,089		$	36,981
Sales, general and administrative expenses	15,610			11,602			27,536			22,086
Total stock-based compensation expense included in costs and expenses	$	41,350		$	31,379		$	72,625		$	59,067

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



	As of June 30, 2013
	Unrecognized Expense, Net of Estimated Forfeitures		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Stock options	$	162,669	2.75
Restricted stock and restricted stock units	78,790		2.44
ESPP share issuances	2,298		0.48

The following table summarizes information about stock options outstanding and exercisable at June 30, 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	547	2.91	$15.39	547	$15.39
$20.01–$30.00	1,149	6.18	$29.38	839	$29.21
$30.01–$40.00	8,026	5.87	$36.48	4,684	$35.71
$40.01–$50.00	4,860	9.18	$46.32	361	$47.01
$50.01–$60.00	1,916	7.82	$53.68	733	$54.65
$60.01–$70.00	47	8.86	$63.29	9	$63.23
$70.01-$80.00	72	9.88	$77.73	—	$—
$80.01-$84.18	186	9.92	$81.55	165	$81.54

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

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 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	Jun. 30, 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 June 30, 2013, the Company had $75.2 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	Jun. 30, 2013
Income Tax Disclosure [Abstract]
Income Taxes	Income Taxes For the three months ended June 30, 2013, the Company recorded a net benefit from income taxes of $1.8 million. This benefit from income taxes was due to a benefit from income taxes of $2.4 million attributable to noncontrolling interest (Alios) offset by a provision for income taxes of $0.6 million attributable to Vertex. 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 the six months ended June 30, 2013. In connection with this impairment charge, the Company wrote-off the associated deferred tax liability of $127.6 million resulting in a benefit from income in its condensed consolidated statements of operations for the six months ended June 30, 2013. Please refer to Note I, "Intangible Assets and Goodwill," for further information regarding the impairment charge. For the three months ended June 30, 2012, the Company recorded a benefit from income taxes attributable to Vertex of $1.2 million. For the six months ended June 30, 2012, the Company recorded a provision for income taxes attributable to Vertex of $1.1 million. These were due to state income taxes. For the three and six months ended June 30, 2012, the Company recorded a provision for income taxes attributable to noncontrolling interest (Alios) of $21.2 million and $19.0 million, respectively. 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 June 30, 2013 and December 31, 2012, Alios had a deferred tax liability of $149.7 million and $152.8 million reflected on the Company's condensed consolidated balance sheets, respectively. As of June 30, 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 June 30, 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 June 30, 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

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-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
-SubTopic 10
-Section 50
-Paragraph 2
-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

Jun. 30, 2013

Restructuring and Related Activities [Abstract]

Restructuring Liability


	Restructuring Liability

In 2003, the Company 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 and six months ended June 30, 2013 and 2012 were as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)
Liability, beginning of the period	$	22,459		$	25,473		$	23,328		$	26,313
Cash payments	(3,849		)	(3,725		)	(7,422		)	(7,411		)
Cash received from subleases	2,666			2,488			5,331			4,974
Restructuring expense	776			594			815			954
Liability, end of the period	$	22,052		$	24,830		$	22,052		$	24,830

- 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

Jun. 30, 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. On May 28, 2013, the plaintiffs filed an opposition to the Company's motion to dismiss the complaint. On June 27, 2013, the Company filed a reply in further support of the Company's motion to dismiss the plaintiffs' complaint. 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 June 30, 2013, the Company has not recorded any reserves for this purported class action.

Contingencies	3 Months Ended
Contingencies	Jun. 30, 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 June 30, 2013 or December 31, 2012.

Guarantees	3 Months Ended
Guarantees	Jun. 30, 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
	Jun. 30, 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 June 30, 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 six months ended June 30, 2013 that had a material effect on the Company's condensed consolidated financial statements.

Product Revenues, Net (Tables)

3 Months Ended

Jun. 30, 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 six months ended June 30, 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	19,880			99,540			2,029			6,394			127,843
Adjustments related to prior period sales	348			3,380			8,247			(136		)	11,839
Credits/payments made	(22,404		)	(103,142		)	(2,116		)	(6,831		)	(134,493		)
Balance at June 30, 2013	$	3,240		$	63,338		$	11,012		$	2,992		$	80,582

Collaborative Arrangements (Tables)

3 Months Ended

Jun. 30, 2013

Collaborative Arrangements

Collaborator revenues

During the three and six months ended June 30, 2013 and 2012, the Company recognized the following revenues attributable to the CFFT collaboration:



	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(in thousands)				(in thousands)
Collaborative revenues attributable to the CFFT collaboration	$	4,244	$	4,527	$	7,803	$	8,457

During the three and six months ended June 30, 2013 and 2012, the Company recognized the following revenues attributable to the Janssen collaboration:



	Three Months Ended June 30,					Six Months Ended June 30,
	2013		2012			2013		2012
	(in thousands)					(in thousands)
Royalty revenues (INCIVO)	$	44,070	$	27,970		$	83,114	$	60,854
Collaborative revenues:
Amortized portion of up-front payment	$	3,107	$	3,107		$	6,214	$	6,214
Net reimbursement (payment) for telaprevir development costs	37		(927		)	9		(2,066		)
Reimbursement for manufacturing services	—		—			10,299		4,449
Total collaborative revenues attributable to the Janssen collaboration	$	3,144	$	2,180		$	16,522	$	8,597
Total revenues attributable to the Janssen collaboration	$	47,214	$	30,150		$	99,636	$	69,451

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 and six months ended June 30, 2013 and 2012 is as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)						(in thousands)
Loss (income) before provision for (benefit from) income taxes	$	6,824		$	4,467		$	12,121		$	9,491
Decrease (increase) in fair value of contingent milestone and royalty payments	80			(56,170		)	2,820			(55,200		)
Provision for (benefit from) income taxes	(2,357		)	21,240			(5,783		)	18,960
Net loss (income) attributable to noncontrolling interest (Alios)	$	4,547		$	(30,463	)	$	9,158		$	(26,749	)

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 June 30, 2013		As of December 31, 2012
	(in thousands)
Restricted cash and cash equivalents (Alios)	$	58,288	$	69,983
Prepaid expenses and other current assets	4,115		672
Property and equipment, net	1,478		1,728
Intangible assets	250,600		250,600
Goodwill	4,890		4,890
Other assets	861		861
Accounts payable	1,666		1,054
Accrued expenses	5,294		6,099
Deferred tax liability	149,706		152,781
Other liabilities, excluding current portion	1,078		1,625
Redeemable noncontrolling interest (Alios)	39,214		38,530
Noncontrolling interest (Alios)	186,996		196,672

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

3 Months Ended

Jun. 30, 2013

Earnings Per Share [Abstract]

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



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			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	$	(57,165	)	$	(64,931	)	$	(365,181	)	$	26,659
Less: Undistributed earnings allocated to participating securities	—			—			—			(260		)
Net income (loss) attributable to Vertex common shareholders—basic	$	(57,165	)	$	(64,931	)	$	(365,181	)	$	26,399
Basic weighted-average common shares outstanding	222,053			211,344			218,795			209,681
Basic net income (loss) attributable to Vertex per common share	$	(0.26	)	$	(0.31	)	$	(1.67	)	$	0.13

Diluted net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$	(57,165	)	$	(64,931	)	$	(365,181	)	$	26,659
Less: Undistributed earnings allocated to participating securities	—			—			—			(256		)
Net income (loss) attributable to Vertex common shareholders—diluted	$	(57,165	)	$	(64,931	)	$	(365,181	)	$	26,403
Weighted-average shares used to compute basic net income (loss) per common share	222,053			211,344			218,795			209,681
Effect of potentially dilutive securities:
Stock options	—			—			—			3,188
Other	—			—			—			88
Weighted-average shares used to compute diluted net income (loss) per common share	222,053			211,344			218,795			212,957
Diluted net income (loss) attributable to Vertex per common share	$	(0.26	)	$	(0.31	)	$	(1.67	)	$	0.12

Potential gross common equivalent shares



	Three Months Ended June 30,		Six Months Ended June 30,
	2013	2012	2013	2012
	(in thousands)		(in thousands)
Stock options	16,802	18,771	16,802	10,624
Convertible senior subordinated notes	—	8,192	—	8,192
Unvested restricted stock and restricted stock units	2,600	2,087	2,600	8

Fair Value Measurements (Tables)

3 Months Ended

Jun. 30, 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 June 30, 2013
			Fair Value Hierarchy
	Total		Level 1		Level 2		Level 3
	(in thousands)
Financial assets carried at fair value:
Cash equivalents:
Money market funds	$	300,472	$	300,472	$	—	$	—
U.S. Treasury securities	680		680		—		—
Marketable securities:
U.S. Treasury securities	3,050		3,050		—		—
Government-sponsored enterprise securities	598,411		598,411		—		—
Commercial paper	192,878		—		192,878		—
Corporate debt securities	105,110		—		105,110		—
Total	$	1,200,601	$	902,613	$	297,988	$	—

Marketable Securities (Tables)

3 Months Ended

Jun. 30, 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 June 30, 2013
Cash and cash equivalents:
Cash and money market funds	$	530,567	$	—	$	—		$	530,567
U.S. Treasury securities	680		—		—			680
Total cash and cash equivalents	$	531,247	$	—	$	—		$	531,247
Marketable securities:
U.S. Treasury securities (due within 1 year)	$	3,050	$	—	$	—		$	3,050
Government-sponsored enterprise securities (due within 1 year)	598,440		17		(46		)	598,411
Commercial paper (due within 1 year)	192,702		176		—			192,878
Corporate debt securities (due within 1 year)	105,220		—		(110		)	105,110
Total marketable securities	$	899,412	$	193	$	(156	)	$	899,449
Total cash, cash equivalents and marketable securities	$	1,430,659	$	193	$	(156	)	$	1,430,696

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

Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2013

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in accumulated other comprehensive income (loss) by component, net of tax:



	Foreign Currency Translation Adjustment			Unrealized Holding Gains (Losses) on Marketable Securities, Net of Tax			Total
	(in thousands)
Balance at December 31, 2012	$	(746	)	$	196		$	(550	)
Other comprehensive income (loss) before reclassifications	(521		)	(159		)	(680		)
Amounts reclassified from accumulated other comprehensive income (loss)	—			—			—
Net current period other comprehensive income (loss)	(521		)	(159		)	(680		)
Balance at June 30, 2013	$	(1,267	)	$	37		$	(1,230	)

Inventories (Tables)

3 Months Ended

Jun. 30, 2013

Inventory Disclosure [Abstract]

Schedule of Inventories by Type

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



	As of June 30, 2013		As of December 31, 2012
	(in thousands)
Raw materials	$	3,103	$	3,754
Work-in-process	4,655		11,317
Finished goods	11,751		15,393
Total	$	19,509	$	30,464

Long-term Obligations Schedule of Capital Lease Obligations (Tables)

3 Months Ended

Jun. 30, 2013

Captital Lease Obligations [Abstract]

Schedule of Future Minimum Lease Payments for Capital Lease



Year	(in thousands)
2013	$	3,468
2014	14,053
2015	11,585
2016	5,048
2017	5,048
2018	4,627
Total payments	43,829
Less: amount representing interest	(5,077		)
Present value of payments	$	38,752

Stock-based Compensation Expense (Tables)

3 Months Ended

Jun. 30, 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 and six months ended June 30, 2013 and 2012 was as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)						(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	29,949		$	22,683		$	49,623		$	40,905
Restricted stock and restricted stock units	9,732			7,253			19,110			14,539
ESPP share issuances	2,051			1,742			4,573			4,172
Less stock-based compensation expense capitalized to inventories	(382		)	(299		)	(681		)	(549		)
Total stock-based compensation expense included in costs and expenses	$	41,350		$	31,379		$	72,625		$	59,067

Stock-based compensation expense by line item:
Research and development expenses	$	25,740		$	19,777		$	45,089		$	36,981
Sales, general and administrative expenses	15,610			11,602			27,536			22,086
Total stock-based compensation expense included in costs and expenses	$	41,350		$	31,379		$	72,625		$	59,067

Unrecognized stock-based compensation expense, net of estimated forfeitures



	As of June 30, 2013
	Unrecognized Expense, Net of Estimated Forfeitures		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Stock options	$	162,669	2.75
Restricted stock and restricted stock units	78,790		2.44
ESPP share issuances	2,298		0.48

Stock options outstanding and exercisable

The following table summarizes information about stock options outstanding and exercisable at June 30, 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	547	2.91	$15.39	547	$15.39
$20.01–$30.00	1,149	6.18	$29.38	839	$29.21
$30.01–$40.00	8,026	5.87	$36.48	4,684	$35.71
$40.01–$50.00	4,860	9.18	$46.32	361	$47.01
$50.01–$60.00	1,916	7.82	$53.68	733	$54.65
$60.01–$70.00	47	8.86	$63.29	9	$63.23
$70.01-$80.00	72	9.88	$77.73	—	$—
$80.01-$84.18	186	9.92	$81.55	165	$81.54

- 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

Jun. 30, 2013

Restructuring and Related Activities [Abstract]

The activities related to the restructuring liability for the three and six months ended June 30, 2013 and 2012 were as follows:



	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
	(in thousands)
Liability, beginning of the period	$	22,459		$	25,473		$	23,328		$	26,313
Cash payments	(3,849		)	(3,725		)	(7,422		)	(7,411		)
Cash received from subleases	2,666			2,488			5,331			4,974
Restructuring expense	776			594			815			954
Liability, end of the period	$	22,052		$	24,830		$	22,052		$	24,830

Basis of Presentation and Accounting Policies (Details)	3 Months Ended
Basis of Presentation and Accounting Policies (Details)	Jun. 30, 2013 segment
Accounting Policies [Abstract]
Number of operating segments	1

Product Revenues, Net (Details) $ in Thousands	6 Months Ended
Product Revenues, Net (Details) $ in Thousands	Jun. 30, 2013 USD ($)
Product Revenue Allowance and Reserve [Roll Forward]
Product revenue allowance and reserve, beginning balance	$ 75,393
Provision related to current period sales	127,843
Adjustments related to prior period sales	11,839
Credits/payments made	(134,493)
Product revenue allowance and reserve, ending balance	80,582
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	19,880
Adjustments related to prior period sales	348
Credits/payments made	(22,404)
Product revenue allowance and reserve, ending balance	3,240
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	99,540
Adjustments related to prior period sales	3,380
Credits/payments made	(103,142)
Product revenue allowance and reserve, ending balance	63,338
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	2,029
Adjustments related to prior period sales	8,247
Credits/payments made	(2,116)
Product revenue allowance and reserve, ending balance	11,012
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	6,394
Adjustments related to prior period sales	(136)
Credits/payments made	(6,831)
Product revenue allowance and reserve, ending balance	$ 2,992

Collaborative Arrangements (Details)
$ in Thousands

1 Months Ended

3 Months Ended

6 Months Ended

12 Months Ended

22 Months Ended

Apr. 30, 2011

USD ($)

Jun. 30, 2013

USD ($)

lines

payment

Sep. 30, 2012

USD ($)

Jun. 30, 2012

USD ($)

Jun. 30, 2013

USD ($)

lines

Jun. 30, 2012

USD ($)

Dec. 31, 2011

USD ($)

Dec. 31, 2009

USD ($)

Dec. 31, 2006

USD ($)

Mar. 31, 2013

USD ($)

Dec. 31, 2012

USD ($)

Jun. 13, 2011

USD ($)

Collaborative revenues recognized

Royalty revenues

$ 49,120

$ 33,480

$ 92,693

$ 72,461

Collaborative revenues

6,841

11,552

24,255

35,933

Total revenues

310,750

418,305

639,118

857,042

Noncontrolling Interest (Alios)

Provision for (benefit from) income taxes

(1,799)

20,063

(132,112)

20,095

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

(4,547)

30,463

(9,158)

26,749

Restricted cash and cash equivalents (Alios)

^[1]

58,288

$ 69,983

Prepaid expenses and other current assets

^[1]

43,231

24,673

Property and equipment, net

^[1]

581,738

433,609

Goodwill

^[1]

30,992

Other assets

^[1]

4,287

9,668

Accounts payable

^[1]

48,570

101,292

Accrued expenses

^[1]

260,849

264,884

Deferred tax liability

^[1]

149,706

280,367

Other liabilities, excluding current portion

^[1]

16,049

13,902

Redeemable noncontrolling interest (Alios)

^[1]

39,214

38,530

Noncontrolling interest (Alios)

^[1]

$ 186,996

186,996

196,672

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

$ 37,300

37,300

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

$ 44,070

27,970

83,114

60,854

Amortized portion of up-front payment

3,107

6,214

Net reimbursement (payment) for telaprevir development costs

(927)

(2,066)

Reimbursement for manufacturing services

10,299

4,449

Collaborative revenues

3,144

2,180

16,522

8,597

Total revenues

47,214

30,150

99,636

69,451

Mitsubishi Tanabe Pharma Corporation

Collaborative revenues recognized

Collaborative revenues

$ 0

4,800

18,900

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

$ 4,244

4,527

$ 7,803

8,457

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

$ 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

$ 6,824

4,467

$ 12,121

9,491

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

(56,170)

2,820

(55,200)

Provision for (benefit from) income taxes

(2,357)

21,240

(5,783)

18,960

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

4,547

$ (30,463)

9,158

$ (26,749)

Restricted cash and cash equivalents (Alios)

58,288

69,983

Prepaid expenses and other current assets

4,115

672

Property and equipment, net

1,478

1,728

250,600

4,890

861

1,666

1,054

Accrued expenses

5,294

6,099

Deferred tax liability

149,706

152,781

Other liabilities, excluding current portion

1,078

1,625

Redeemable noncontrolling interest (Alios)

39,214

38,530

Noncontrolling interest (Alios)

$ 186,996

$ 196,672

[1]

Net Income (Loss) Per Share Attributable to Vertex Common Shareholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Basic net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$ (57,165)	$ (64,931)	$ (365,181)	$ 26,659
Less: Undistributed earnings allocated to participating securities	0	0	0	(260)
Net income (loss) attributable to Vertex common shareholders—basic	$ (57,165)	$ (64,931)	$ (365,181)	$ 26,399
Weighted-average shares used to compute basic net income (loss) per common share (shares)	222,053	211,344	218,795	209,681
Basic net income (loss) attributable to Vertex per common share (usd per share)	$ (0.26)	$ (0.31)	$ (1.67)	$ 0.13
Diluted net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$ (57,165)	$ (64,931)	$ (365,181)	$ 26,659
Less: Undistributed earnings allocated to participating securities	0	0	0	(256)
Net income (loss) attributable to Vertex common shareholders—diluted	$ (57,165)	$ (64,931)	$ (365,181)	$ 26,403
Weighted-average shares used to compute basic net income (loss) per common share (shares)	222,053	211,344	218,795	209,681
Effect of potentially dilutive securities:
Stock options (shares)	0	0	0	3,188
Other (shares)	0	0	0	88
Weighted-average shares used to compute diluted net income (loss) per common share (shares)	222,053	211,344	218,795	212,957
Diluted net income (loss) attributable to Vertex per common share (usd per share)	$ (0.26)	$ (0.31)	$ (1.67)	$ 0.12
Stock options
Effect of potentially dilutive securities:
Antidilutive securities excluded from computation of earnings per share (in shares)	16,802	18,771	16,802	10,624
Convertible senior subordinated notes
Effect of potentially dilutive securities:
Antidilutive securities excluded from computation of earnings per share (in shares)	0	8,192	0	8,192
Unvested restricted stock and restricted stock units
Effect of potentially dilutive securities:
Antidilutive securities excluded from computation of earnings per share (in shares)	2,600	2,087	2,600	8

Fair Value Measurements (Details) $ in Thousands	Jun. 30, 2013 USD ($)
Financial assets carried at fair value:
Cash equivalents (Alios)	$ 56,500
Recurring basis \| Total
Financial assets carried at fair value:
Total	1,200,601
Recurring basis \| Total \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	300,472
Recurring basis \| Total \| U.S. Treasury securities
Financial assets carried at fair value:
Cash equivalents:	680
Marketable securities:	3,050
Recurring basis \| Total \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Marketable securities:	598,411
Recurring basis \| Total \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	192,878
Recurring basis \| Total \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	105,110
Recurring basis \| Level 1
Financial assets carried at fair value:
Total	902,613
Recurring basis \| Level 1 \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	300,472
Recurring basis \| Level 1 \| U.S. Treasury securities
Financial assets carried at fair value:
Cash equivalents:	680
Marketable securities:	3,050
Recurring basis \| Level 1 \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Marketable securities:	598,411
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:
Total	297,988
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:
Cash equivalents:	0
Marketable securities:	0
Recurring basis \| Level 2 \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Marketable securities:	0
Recurring basis \| Level 2 \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	192,878
Recurring basis \| Level 2 \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	105,110
Recurring basis \| Level 3
Financial assets carried at fair value:
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:
Cash equivalents:	0
Marketable securities:	0
Recurring basis \| Level 3 \| Government-sponsored enterprise securities
Financial assets carried at fair value:
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

Marketable Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2013	Dec. 31, 2012
Summary of cash, cash equivalents and marketable securities
Amortized Cost	$ 1,430,659	$ 1,321,019
Gross Unrealized Gains	193	217
Gross Unrealized Losses	(156)	(21)
Fair Value	1,430,696	1,321,215
Total cash and cash equivalents
Summary of cash, cash equivalents and marketable securities
Amortized Cost	531,247	489,407
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	531,247	489,407
Cash and money market funds
Summary of cash, cash equivalents and marketable securities
Amortized Cost	530,567	489,407
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	530,567	489,407
Government-sponsored enterprise securities
Summary of cash, cash equivalents and marketable securities
Available-for-sale Securities, Amortized Cost Basis	598,440	440,181
Available-for-sale Securities, Gross Unrealized Gains	17	49
Available-for-sale Securities, Gross Unrealized Losses	(46)	(5)
Available-for-sale Securities, Fair Value Disclosure	598,411	440,225
Available-for-sale Securities [Member]
Summary of cash, cash equivalents and marketable securities
Available-for-sale Securities, Amortized Cost Basis	899,412	831,612
Available-for-sale Securities, Gross Unrealized Gains	193	217
Available-for-sale Securities, Gross Unrealized Losses	(156)	(21)
Available-for-sale Securities, Fair Value Disclosure	899,449	831,808
U.S. Treasury securities
Summary of cash, cash equivalents and marketable securities
Amortized Cost	680
Gross Unrealized Gains	0
Gross Unrealized Losses	0
Fair Value	680
Available-for-sale Securities, Amortized Cost Basis	3,050	111,350
Available-for-sale Securities, Gross Unrealized Gains	0	2
Available-for-sale Securities, Gross Unrealized Losses	0	(2)
Available-for-sale Securities, Fair Value Disclosure	3,050	111,350
Commercial paper
Summary of cash, cash equivalents and marketable securities
Available-for-sale Securities, Amortized Cost Basis	192,702	225,294
Available-for-sale Securities, Gross Unrealized Gains	176	155
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available-for-sale Securities, Fair Value Disclosure	192,878	225,449
Corporate debt securities (due within 1 year)
Summary of cash, cash equivalents and marketable securities
Available-for-sale Securities, Amortized Cost Basis	105,220	15,429
Available-for-sale Securities, Gross Unrealized Gains	0	1
Available-for-sale Securities, Gross Unrealized Losses	(110)	(1)
Available-for-sale Securities, Fair Value Disclosure	$ 105,110	15,429
Corporate Debt Securities, Due After One Year Through Five Years [Member]
Summary of cash, cash equivalents and marketable securities
Available-for-sale Securities, Amortized Cost Basis		39,358
Available-for-sale Securities, Gross Unrealized Gains		10
Available-for-sale Securities, Gross Unrealized Losses		(13)
Available-for-sale Securities, Fair Value Disclosure		$ 39,355

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

Jun. 30, 2013

Dec. 31, 2012

Cash and Cash Equivalents [Abstract]

Cash equivalents (Alios)

^[1]

$ 58,288

$ 69,983

[1]

Accumulated Other Comprehensive Income (Loss) (Details) - USD ($)
$ in Thousands

3 Months Ended

6 Months Ended

Jun. 30, 2013

Jun. 30, 2012

Jun. 30, 2013

Jun. 30, 2012

Dec. 31, 2012

Balance at balance sheet date

^[1]

$ (1,230)

$ (550)

Other comprehensive income (loss) before reclassifications

(680)

Amounts reclassified from accumulated other comprehensive income (loss)

Net current period other comprehensive income (loss)

(81)

$ (45)

(680)

$ 380

Unrealized Holding Gains (Losses) on Marketable Securities, Net of Tax

Balance at balance sheet date

196

Other comprehensive income (loss) before reclassifications

(159)

Amounts reclassified from accumulated other comprehensive income (loss)

Net current period other comprehensive income (loss)

(159)

Foreign Currency Translation Adjustment

Balance at balance sheet date

$ (1,267)

(1,267)

$ (746)

Other comprehensive income (loss) before reclassifications

(521)

Amounts reclassified from accumulated other comprehensive income (loss)

Net current period other comprehensive income (loss)

$ (521)

[1]

- Definition

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 11
-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e637-108580

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 14
-URI http://asc.fasb.org/extlink&oid=20435746&loc=d3e681-108580

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 14A
-URI http://asc.fasb.org/extlink&oid=20435746&loc=SL7669686-108580

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 02
-Paragraph 31
-Article 5

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS115-1/124-1
-Paragraph 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 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 12
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 130
-Paragraph 14, 17, 26
-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 SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Article 3

+ Details

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

3 Months Ended

6 Months Ended

Jun. 30, 2013

Jun. 30, 2012

Jun. 30, 2013

Jun. 30, 2012

Dec. 31, 2012

Inventory Disclosure [Abstract]

Write-down of inventories to net realizable value

$ 5,100

$ 78,000

$ 5,083

$ 78,000

Raw materials

3,103

$ 3,754

Work-in-process

4,655

11,317

Finished goods

11,751

15,393

Total

^[1]

$ 19,509

$ 30,464

[1]

- Definition

Charge to cost of goods sold that represents the reduction of the carrying amount of inventory, generally attributable to obsolescence or market conditions.

+ References + Details

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

3 Months Ended

6 Months Ended

Jun. 30, 2013

Jun. 30, 2012

Jun. 30, 2013

Jun. 30, 2012

Dec. 31, 2012

Indefinite-Lived Intangible Assets [Line Items]

Intangible assets

^[1]

$ 250,600,000

$ 663,500,000

Intangible asset impairment charge

$ 0

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

$ 1.30

Goodwill

^[1]

30,992,000

$ 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

VX-222Asset [Member]

Indefinite-Lived Intangible Assets [Line Items]

Intangible asset impairment charge

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

Jun. 30, 2013

USD ($)

Dec. 31, 2012

USD ($)

Convertible Senior Subordinated Notes

Convertible senior subordinated notes

^[1]

$ 0

$ 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

$ 8,400,000

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

$ 48.83

Convertible senior subordinated notes (due 2015) conversion | shares

(8,188,448)

Stock Redeemed or Called During Period, Value

$ 200,000

Redemption Premium

16.75

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

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

Debt Conversion, Converted Instrument, Amount

$ 399,800,000

Debt Conversion, Converted Instrument, Shares Issued | shares

87,109

Interest Expense, Debt

$ 6,700,000

Adjustments to Additional Paid in Capital, Convertible Debt with Conversion Feature

$ 4,200,000

[1]

Long-term Obligations (Details)
$ in Thousands, squarefeet in Millions

3 Months Ended

6 Months Ended

Jun. 30, 2011

leases

squarefeet

building

Jun. 30, 2013

USD ($)

Dec. 31, 2012

USD ($)

Long-term Debt and Capital Lease Obligations [Abstract]

Line of Credit Facility, Current Borrowing Capacity

$ 31,900

Debt Instrument, Interest Rate, Low of Range

4.00%

Debt Instrument, Interest Rate, High of Range

7.00%

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

$ 421,300

$ 290,700

Construction financing lease obligation

^[1]

359,100

$ 268,031

Change in Restricted Cash Balance as Result of Transactions

$ 31,800

[1]

Long-term Debt Obligations (Details) $ in Thousands	Jun. 30, 2013 USD ($)
Debt Disclosure [Abstract]
2013	$ 3,468
2014	14,053
2015	11,585
2016	5,048
2017	5,048
2018	4,627
Total payments	43,829
Less: amount representing interest	(5,077)
Present value of payments	$ 38,752

Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Stock-based compensation expense:
Less stock-based compensation expense capitalized to inventories	$ (382)	$ (299)	$ (681)	$ (549)
Total stock-based compensation expense included in costs and expenses	41,350	31,379	72,625	59,067
Stock options
Stock-based compensation expense:
Stock-based compensation expense by type of award	29,949	22,683	49,623	40,905
Type of award:
Unrecognized Expense, Net of Estimated Forfeitures	$ 162,669		162,669
Weighted-average Recognition Period (in years)	2 years 9 months
Restricted stock and restricted stock units
Stock-based compensation expense:
Stock-based compensation expense by type of award	$ 9,732	7,253	19,110	14,539
Type of award:
Unrecognized Expense, Net of Estimated Forfeitures	$ 78,790		78,790
Weighted-average Recognition Period (in years)	2 years 5 months 9 days
ESPP share issuances
Stock-based compensation expense:
Stock-based compensation expense by type of award	$ 2,051	1,742	4,573	4,172
Type of award:
Unrecognized Expense, Net of Estimated Forfeitures	$ 2,298		2,298
Weighted-average Recognition Period (in years)	5 months 23 days
Research and development expenses
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	$ 25,740	19,777	45,089	36,981
Sales, general and administrative expenses
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	$ 15,610	$ 11,602	$ 27,536	$ 22,086

Stock-based Compensation Expense (Details 2) shares in Thousands	3 Months Ended
	Jun. 30, 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	547
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	2 years 10 months 28 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 15.39
Exercise price range, options exercisable (in shares) \| shares	547
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 15.39
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	1,149
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	6 years 2 months 5 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 29.38
Exercise price range, options exercisable (in shares) \| shares	839
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 29.21
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	8,026
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	5 years 10 months 13 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 36.48
Exercise price range, options exercisable (in shares) \| shares	4,684
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 35.71
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	4,860
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	9 years 2 months 5 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 46.32
Exercise price range, options exercisable (in shares) \| shares	361
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 47.01
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	1,916
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	7 years 9 months 26 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 53.68
Exercise price range, options exercisable (in shares) \| shares	733
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 54.65
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	47
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	8 years 10 months 10 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 63.29
Exercise price range, options exercisable (in shares) \| shares	9
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 63.23
Exercise Price Range From Dollars 70.01 to 80.00 [Member] [Domain]
Share-based Compensation Arrangement by Share-based Payment Award
Exercise price range, options outstanding (in shares) \| shares	72
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	9 years 10 months 17 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 77.73
Exercise price range, options exercisable (in shares) \| shares	0
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 0.00
Exercise Price Range From Dollars 80.01 to 84.18 [Member] [Domain] [Domain]
Share-based Compensation Arrangement by Share-based Payment Award
Exercise price range, options outstanding (in shares) \| shares	186
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	9 years 11 months 1 day
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)	$ 81.55
Exercise price range, options exercisable (in shares) \| shares	165
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)	$ 81.54

Sale of HIV Protease Inhibitor Royalty Stream (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2008	Jun. 30, 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		$ 75.2

Income Taxes (Details) - USD ($)

3 Months Ended

6 Months Ended

Jun. 30, 2013

Jun. 30, 2012

Jun. 30, 2013

Jun. 30, 2012

Dec. 31, 2012

Tax Carryforwards

Provision for (benefit from) income taxes

$ (1,799,000)

$ 20,063,000

$ (132,112,000)

$ 20,095,000

Current State and Local Tax Expense (Benefit)

1,100,000

Intangible asset impairment charge

412,900,000

Deferred federal income tax expense (benefit)

127,600,000

Deferred tax liability

^[1]

149,706,000

$ 280,367,000

Federal income tax net operating loss carryfowards

2,600,000,000

Federal income tax credit carryforwards

98,000,000

State income tax net operating loss carryforwards

1,500,000,000

State income tax credit credit carryforwards

60,300,000

Total Vertex Shareholders' Equity

Tax Carryforwards

Provision for (benefit from) income taxes

600,000

1,200,000

Noncontrolling Interest (Alios)

Tax Carryforwards

Provision for (benefit from) income taxes

(2,400,000)

21,200,000

19,000,000

Alios Bio Pharma Inc

Tax Carryforwards

Provision for (benefit from) income taxes

(2,357,000)

$ 21,240,000

(5,783,000)

$ 18,960,000

Deferred tax liability

149,706,000

$ 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		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Restructuring activities
Liability, beginning of the period		$ 24,830	$ 22,459	$ 25,473
Cash payments	$ (3,849)	(3,725)	(7,422)	(7,411)
Cash received from subleases	2,666	2,488	5,331	4,974
Restructuring expense	$ 776	$ 594	$ 815	$ 954

Contingencies Contingencies (Details) - USD ($)	Jun. 30, 2013	Dec. 31, 2012
Commitments and Contingencies Disclosure [Abstract]
Material contingent liabilities accrued	$ 0	$ 0