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^[1]

14,147

30,464

^[1]

23,836

24,673

Total current assets

^[1]

1,588,576

1,589,585

Restricted cash

^[1]

130

31,934

^[1]

696,911

433,609

^[1]

663,500

^[1]

30,992

Other assets

^[1]

2,432

9,668

Total assets

^[1]

2,319,041

2,759,288

Current liabilities:

Deferred revenues, current portion

^[1]

49,327

101,292

Accrued expenses

^[1]

271,077

264,884

^[1]

21,510

27,566

Accrued restructuring expense, current portion

^[1]

14,286

4,758

Capital lease obligations, current portion

16,893

13,707

Income taxes payable (Alios)

^[1]

715

Other liabilities, current portion

^[1]

24,736

19,702

Total current liabilities

^[1]

397,829

432,624

Deferred revenues, excluding current portion

^[1]

49,459

96,242

Accrued restructuring expense, excluding current portion

^[1]

14,067

18,570

Capital lease obligations, excluding current portion

48,754

15,170

Convertible senior subordinated notes (due 2015)

^[1]

400,000

Deferred tax liability

^[1]

280,367

Construction financing lease obligation

^[1]

440,937

268,031

Other liabilities, excluding current portion

^[1]

11,590

13,902

Total liabilities

^[1]

962,636

1,524,906

Commitments and contingencies (Note T and Note V)

^[1]

Redeemable noncontrolling interest (Alios)

^[1]

38,530

Shareholders’ equity:

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

^[1]

Common stock, $0.01 par value; 300,000,000 shares authorized at December 31, 2013 and 2012; 233,788,852 and 217,286,868 shares issued and outstanding at December 31, 2013 and 2012, respectively

^[1]

2,320

2,149

Additional paid-in capital

^[1]

5,321,286

4,519,448

Accumulated other comprehensive loss

^[1]

(306)

(550)

Accumulated deficit

^[1]

(3,966,895)

(3,521,867)

Total Vertex shareholders’ equity

^[1]

1,356,405

999,180

Noncontrolling interest (Alios)

^[1]

196,672

Total shareholders’ equity

^[1]

1,356,405

1,195,852

Total liabilities and shareholders’ equity

^[1]

$ 2,319,041

$ 2,759,288

[1]

Amounts as of December 31, 2012 include the assets and liabilities of Vertex’s variable interest entity (“VIE”), Alios BioPharma, Inc. (“Alios”). The Company deconsolidated Alios as of December 31, 2013. 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 B, "Collaborative Arrangements," to these consolidated financial statements for amounts.

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2013	Dec. 31, 2012
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (shares)	1,000,000	1,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (shares)	300,000,000	300,000,000
Common stock, shares issued (shares)	233,788,852	217,286,868
Common stock, shares outstanding (shares)	233,788,852	217,286,868

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 Loss

Accumulated Deficit

Noncontrolling Interest (Alios)

Redeemable Noncontrolling Interest (Alios)

Balance (shares) at Dec. 31, 2010

203,523

Balance at Dec. 31, 2010

$ 503,973

$ 2,016

$ 3,947,433

$ (1,067)

$ (3,444,409)

$ 0

Increase (Decrease) in Stockholders' Equity

Unrealized holding losses on marketable securities

(119)

Unrealized losses on foreign currency forward contracts

Net income (loss) attributable to Vertex common shareholders

133

29,574

Issuance of common stock under benefit plans

$ 41,179

29,574

11,605

Issuances of common stock:

Benefit plans (shares)

183

5,781

$ 133,393

133,418

$ 56

133,362

(25)

Tax benefit from equity compensation

119,268

118,964

304

900

Alios noncontrolling interest upon consolidation

130,486

36,299

Change in liquidation value of noncontrolling interest

(737)

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 losses on marketable securities

305

Unrealized losses on foreign currency forward contracts

Net income (loss) attributable to Vertex common shareholders

198

(107,032)

Issuance of common stock under benefit plans

$ (51,135)

(107,032)

55,897

Issuances of common stock:

Benefit plans (shares)

242

7,983

$ 201,992

201,837

$ 77

201,760

155

Tax benefit from equity compensation

115,539

115,058

481

1,971

Change in liquidation value of noncontrolling interest

(1,494)

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 losses on marketable securities

(154)

Unrealized losses on foreign currency forward contracts

(23)

Net income (loss) attributable to Vertex common shareholders

421

(445,028)

Issuance of common stock under benefit plans

$ (687,550)

(445,028)

(242,522)

Issuances of common stock:

Benefit plans (shares)

8,226

$ 271,738

271,801

$ 88

271,713

(63)

Convertible senior subordinated notes (due 2015) conversion (shares)

8,276

Convertible senior subordinated notes (due 2015) conversion

402,265

$ 83

402,182

Employee Service Share-Based Compensation, Restructuring Expenses

128,351

127,883

468

1,312

Tax benefit from equity compensation

(1,252)

Alios noncontrolling interest upon deconsolidation

45,445

38,530

Balance (shares) at Dec. 31, 2013

233,789

Balance at Dec. 31, 2013

$ 1,356,405

^[1]

$ 1,356,405

$ 2,320

$ 5,321,286

$ (306)

$ (3,966,895)

$ 0

[1]

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

12 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Cash flows from operating activities:

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

$ (687,550)

$ (51,135)

$ 41,179

Depreciation and amortization expense

48,365

38,191

35,041

Other non-cash based compensation expense

127,303

114,285

118,226

5,860

10,261

8,525

Secured notes (due 2012) discount amortization expense

663,500

105,800

18,409

Change in fair value of free-standing derivatives related to the sale of milestone payments

16,801

Deferred income taxes

(285,053)

36,660

(7,501)

Non-cash Expense

7,594

Deconsolidation of variable interest entity (Alios)

55,110

Write-downs of inventories to net realizable value

10,358

133,189

Excess tax benefit from share-based payment arrangements

1,252

(1,971)

(900)

Other non-cash items, net

6,742

178

319

Changes in operating assets and liabilities, excluding the effects of the acquisition and deconsolidation of a variable interest entity (Alios):

Accounts receivable, net

53,363

39,912

(170,606)

7,142

(29,925)

(111,388)

(12,061)

(23,619)

10,358

Accrued expenses and other liabilities

(49,234)

14,892

37,468

43,725

29,232

116,822

Accrued restructuring expense

5,025

(2,985)

(3,282)

Deferred revenues

(53,011)

(39,324)

(71,536)

Net cash provided by (used in) operating activities

(51,570)

267,841

143,735

Cash flows from investing activities:

Purchases of marketable securities

(2,412,418)

(1,705,829)

(721,545)

Sales and maturities of marketable securities

2,348,295

1,367,927

1,016,040

Payment for acquisition of variable interest entity (Alios)

(60,000)

Expenditures for property and equipment

(51,393)

(71,140)

(34,595)

Decrease in restricted cash and cash equivalents

31,804

2,156

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

27,884

(18,105)

12,695

Decrease (increase) in other assets

1,698

(826)

(183)

Net cash provided by (used in) investing activities

(54,130)

(425,817)

212,412

Cash flows from financing activities:

Excess tax benefit from share-based payment arrangements

(1,252)

1,971

900

Issuances of common stock under benefit plans

265,878

191,721

124,862

Payments to redeem secured notes

(158)

(155,000)

Settlement of milestone derivatives

(95,000)

Payments on capital lease obligations

(16,057)

(2,615)

Payments on construction financing lease obligation

(67,527)

(18,873)

Net cash provided by (used in) financing activities

180,884

172,204

(124,238)

Effect of changes in exchange rates on cash

4,708

(141)

214

Net increase in cash and cash equivalents

79,892

14,087

232,123

Cash and cash equivalents—beginning of period

489,407

^[1]

475,320

243,197

Cash and cash equivalents—end of period

569,299

^[1]

489,407

^[1]

475,320

Supplemental disclosure of cash flow information:

Cash paid for interest

11,015

13,400

13,512

Cash paid for income taxes

2,840

9,318

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

399,842

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

215,013

235,594

54,655

Assets acquired under capital lease obligations

50,972

30,101

Unamortized deferred debt issuance costs exchanged

$ 4,230

$ 0

[1]

Nature of Business and Accounting Policies

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Nature of Business and Accounting Policies

Business

Vertex Pharmaceuticals Incorporated (“Vertex” or the “Company”) is in the business of discovering, developing, manufacturing and commercializing small molecule drugs for patients with serious diseases in specialty markets. The Company's two products are: KALYDECO (ivacaftor), which the Company markets in the United States and international markets for the treatment of patients six years of age and older with cystic fibrosis (“CF”), who have the G551D mutation in their cystic fibrosis transmembrane conductance regulator (“CFTR”) gene, and INCIVEK (telaprevir), which is approved in the United States and Canada for the treatment of adults with genotype 1 hepatitis C virus (“HCV”) infection.

The Company began recognizing net product revenues from sales of INCIVEK and KALYDECO in the second quarter of 2011 and first quarter of 2012, respectively. The Company’s collaborator, Janssen Pharmaceutica NV (“Janssen”), began marketing telaprevir in its territories under the brand name INCIVO in September 2011. The Company’s net loss attributable to Vertex for 2013 was $445.0 million, or $1.98 per share. As of December 31, 2013, the Company had cash, cash equivalents and marketable securities of approximately $1.47 billion. The Company expects that cash flows from the sales of its products, together with the Company’s cash, cash equivalents and marketable securities, will be sufficient to fund its operations for at least the next twelve months.

Vertex is subject to risks common to companies in its industry including, but not limited to, the dependence on revenues from KALYDECO, competition, uncertainty about clinical trial outcomes and regulatory approvals, uncertainties relating to pharmaceutical pricing and reimbursement, rapid technological change, uncertain protection of proprietary technology, the need to comply with government regulations, share price volatility, dependence on collaborative relationships and potential product liability.

Basis of Presentation

The consolidated financial statements reflect the operations of (i) the Company and (ii) its wholly-owned subsidiaries. In addition, the consolidated financial statements for the period from June 13, 2011 through December 31, 2013, reflect the operations of Alios BioPharma, Inc. (“Alios”), a collaborator that is a variable interest entity (a “VIE”) for which the Company was deemed under applicable accounting guidance to have a variable interest and be the primary beneficiary. As of December 31, 2013, the Company deconsolidated Alios, and the Company's consolidated balance sheet as of December 31, 2013 excludes Alios. All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. Please refer to Note X, "Segment Information," for enterprise-wide disclosures regarding the Company’s revenues, major customers and long-lived assets by geographic area.

Use of Estimates

The preparation of consolidated financial statements in accordance with accounting principles generally accepted in the United States of America (“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 consolidated financial statements, and the amounts of revenues and expenses during the reported periods. Significant estimates in these 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), the consolidation and deconsolidation of a VIE, leases 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.

Revenue Recognition

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 as well as government-owned and supported customers in Europe (collectively, its “Customers”). The Company's Customers in North America subsequently resell the products to patients and health care providers. 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 Company makes significant estimates and judgments that materially affect the Company’s recognition of net product revenues. In certain instances, the Company may be unable to reasonably conclude that the price is fixed or determinable at the time of delivery, in which case it defers the recognition of revenues. Once the Company is able to determine that the price is fixed or determinable, it recognizes the revenues associated with the units in which revenue recognition was deferred.

Trade Allowances: The Company generally provides invoice discounts on product sales to its Customers for prompt payment and pays fees for distribution services, such as fees for certain data that Customers provide to the Company. The payment terms for sales to Customers in the United States generally include a 2% discount for payment within 30 days. The Company expects that, based on its experience, its Customers will earn these discounts and fees, and deducts the full amount of these discounts and fees from its gross product revenues and accounts receivable at the time such revenues are recognized.

Rebates, Chargebacks and Discounts: The Company contracts with government agencies and various private organizations (collectively, its “Third-party Payors”) so that products will be eligible for purchase by, or partial or full reimbursement from, such Third-party Payors. The Company estimates the rebates, chargebacks and discounts it will provide to Third-party Payors and deducts these estimated amounts from its gross product revenues at the time the revenues are recognized. For each product, the Company estimates the aggregate rebates, chargebacks and discounts that it will provide to Third-party Payors based upon (i) the Company’s contracts with these Third-party Payors, (ii) the government-mandated discounts applicable to government-funded programs, (iii) information obtained from the Company’s Customers regarding the payor mix for such product and (iv) historical experience.

Product Returns: The Company estimates the amount of each product that will be returned and deducts these estimated amounts from its gross revenues at the time the revenues are recognized. The Company’s Customers have the right to return unopened unprescribed packages, subject to contractual limitations. To date product returns have been minimal and, based on inventory levels held by its Customers and its distribution model, the Company believes that returns of its products will continue to be minimal.

Other Incentives: Other incentives that the Company offers include co-pay mitigation rebates provided by the Company to commercially insured patients who have coverage and who reside in states that permit co-pay mitigation programs. The Company’s co-pay mitigation programs are intended to reduce each participating patient’s portion of the financial responsibility for a product’s purchase price to a specified dollar amount. Based upon the terms of the Company's co-pay mitigation programs, the Company estimates average co-pay mitigation amounts for each of its products in order to establish its accruals for co-pay mitigation rebates and deducts these estimated amounts from its gross product revenues at the later of the date (i) the revenues are recognized or (ii) the incentive is offered. The Company’s co-pay mitigation rebates are subject to expiration.

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



	Trade Allowances			Rebates, Chargebacks and Discounts			Product Returns			Other Incentives			Total
	(in thousands)
2013
Beginning Balance	$	5,416		$	63,560		$	2,852		$	3,565		$	75,393
Provision related to current period sales	31,395			204,459			5,795			9,295			250,944
Adjustments related to prior period sales	343			4,474			15,149			(228		)	19,738
Credits/payments made	(35,619		)	(204,249		)	(7,997		)	(11,077		)	(258,942		)
Ending Balance	$	1,535		$	68,244		$	15,799		$	1,555		$	87,133

2012
Beginning Balance	$	11,162		$	52,659		$	340		$	5,202		$	69,363
Provision related to current period sales	55,913			216,942			2,067			19,103			294,025
Adjustments related to prior period sales	29			3,883			1,498			72			5,482
Credits/payments made	(61,688		)	(209,924		)	(1,053		)	(20,812		)	(293,477		)
Ending Balance	$	5,416		$	63,560		$	2,852		$	3,565		$	75,393

2011
Beginning Balance	$	—		$	—		$	—		$	—		$	—
Provision related to current period sales	38,228			75,145			553			9,692			123,618
Credits/payments made	(27,066		)	(22,486		)	(213		)	(4,490		)	(54,255		)
Ending Balance	$	11,162		$	52,659		$	340		$	5,202		$	69,363

Based on the current information available to the Company, cumulative adjustments related to prior period sales represent 0.7% and 1.3%, respectively, of the gross product revenues that were recorded in the years ended December 31, 2012 and 2011.

Royalty Revenues

The Company’s royalty revenues on commercial sales of INCIVO (telaprevir) by Janssen are based on net sales of licensed products in licensed territories as provided by Janssen. The Company recognizes royalty revenues in the period the sales occur.

The Company has sold its rights to receive certain royalties on sales of an HIV protease inhibitor (fosamprenavir) and recognizes the revenues related to this sale as royalty revenues. In the circumstance where the Company has sold its rights to future royalties under a license agreement and also maintains continuing involvement in the royalty arrangement (but not significant continuing involvement in the generation of the cash flows payable to the purchaser of the future royalty rights), the Company defers recognition of the proceeds it receives for the royalty stream and recognizes these deferred revenues over the life of the license agreement pursuant to the units-of-revenue method. The Company’s estimates regarding the estimated remaining royalty payments due to the purchaser have changed in the past and may change in the future.

Collaborative Revenues

The Company recognizes revenues generated through collaborative research, development and/or commercialization agreements. The terms of these agreements typically include payment to the Company of one or more of the following: nonrefundable, up-front license fees; development and commercial milestone payments; funding of research and/or development activities; payments for services the Company provides through its third-party manufacturing network; and royalties on net sales of licensed products. Each of these types of payments results in collaborative revenues, except for revenues from royalties on net sales of licensed products, which are classified as royalty revenues.

For each collaborative research, development and/or commercialization agreement that result in revenues, the Company determines (i) whether multiple deliverables exist, (ii) whether the undelivered elements have value to the customer on a stand-alone basis, (iii) how the deliverables should be separated and (iv) how the consideration should be allocated to the deliverables. For arrangements entered into or materially modified after January 1, 2011, the Company allocates consideration in an arrangement using the relative selling price method based on management’s best estimate of selling price of deliverables if it does not have vendor-specific objective evidence or third-party evidence. As part of the accounting for these agreements, the Company must develop assumptions that require judgment to determine the best estimate of selling price. Key assumptions utilized by the Company to determine the best estimate of selling price may include patient enrollment requirements from regulatory authorities, development timelines, reimbursement rates for personnel costs, discount rates, and estimated third-party development costs.

The Company evaluates amendments to its existing arrangements to determine whether they have been materially modified. In making its determination that an arrangement has been materially modified, the Company considers whether there have been significant changes to the consideration under the arrangement, the deliverables under the arrangement, the timing of deliverables and the period of the arrangement. If the arrangement is determined to have been materially modified, the Company allocates fixed consideration under the arrangement using its best estimate of selling price to the remaining undelivered elements at the date of material modification. Any consideration remaining after the allocation is recognized as revenue.

Collaborative research, development and/or commercialization agreements entered into prior to January 1, 2011 that contained multiple elements of revenue were divided into separate units of accounting if certain criteria were met, including whether the delivered element had stand-alone value to the collaborator and whether there was objective and reliable evidence of the fair value of the undelivered obligation(s). The Company allocated consideration it received among the separate units either on the basis of each unit’s fair value or using the residual method, and applied the revenue recognition criteria to each of the separate units.

Up-front License Fees: If the license to the Company's intellectual property was determined to have stand-alone value from the other deliverables identified in the arrangement, the Company recognized revenues from nonrefundable, up-front license fees upon delivery. If these licenses did not have stand-alone value, the Company recognized revenues from nonrefundable, up-front license fees on a straight-line basis over the contracted or estimated period of performance. The Company evaluated the period of performance each reporting period and adjusted the period of performance on a prospective basis if there were changes to be made.

Milestone Payments: At the inception of each agreement that included research and development milestone payments, the Company evaluated whether each milestone was substantive. The Company recognized revenues related to substantive milestones in full in the period in which the substantive milestone was achieved if payment was reasonably assured. If a milestone was not considered substantive, the Company recognized the applicable milestone payment over the period of performance.

Research and Development Activities/Manufacturing Services: If the Company was entitled to reimbursement from its collaborators for specified research and development expenses and/or was entitled to payments for specified manufacturing services that the Company provided through its third-party manufacturing network, the Company determined whether the research and development funding would result in collaborative revenues or an offset to research and development expenses.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of money market funds and marketable securities. The Company places these investments with highly rated financial institutions, and, by policy, limits the amounts of credit exposure to any one financial institution. These amounts at times may exceed federally insured limits. The Company has not experienced any credit losses in these accounts and does not believe it is exposed to any significant credit risk on these funds. The Company implemented a foreign exchange hedging program in December 2013. As of December 31, 2013, the notional amount and fair value of these hedges was not significant.

The Company also is subject to credit risk from its accounts receivable related to its product sales and collaborators. The Company evaluates the creditworthiness of each of its customers and has determined that all of its material customers are creditworthy. To date, the Company has not experienced significant losses with respect to the collection of its accounts receivable. The Company's receivables from Greece and Italy were not material in 2013, and the Company had no receivables from Spain or Portugal in 2013. The Company believes that its allowance for doubtful accounts was adequate at December 31, 2013. Please refer to Note X, "Segment Information," for further information.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Restricted Cash

Restricted cash consists of balances held in deposit with certain banks to collateralize conditional stand-by letters of credit in the names of the Company’s landlords pursuant to certain operating lease agreements. The Company also separately disclosed on its consolidated balance sheet restricted cash and cash equivalents (Alios) as of December 31, 2012. The Company deconsolidated Alios as of December 31, 2013. Please refer to Note B, "Collaborative Arrangements," for further information.

Marketable Securities

The Company's marketable securities consist of investments in government-sponsored enterprise securities, corporate debt securities and commercial paper that are classified as available-for-sale. The Company classifies marketable securities available to fund current operations as current assets on its consolidated balance sheets. Marketable securities are classified as long-term assets on the consolidated balance sheets if (i) they have been in an unrealized loss position for longer than one year and (ii) the Company has the ability and intent to hold them (a) until the carrying value is recovered and (b) such holding period may be longer than one year. The Company's marketable securities are stated at fair value with their unrealized gains and losses included as a component of accumulated other comprehensive loss, which is a separate component of shareholders’ equity, until such gains and losses are realized. The fair value of these securities is based on quoted prices for identical or similar assets.

The Company reviews investments in marketable securities for other-than-temporary impairment whenever the fair value of an investment is less than the amortized cost and evidence indicates that an investment’s carrying amount is not recoverable within a reasonable period of time. To determine whether an impairment is other-than-temporary, the Company considers whether it has an intent to sell, or whether it is more likely than not that the Company will be required to sell, the investment before recovery of the investment’s amortized cost basis. Evidence considered in this assessment includes reasons for the impairment, compliance with the Company’s investment policy, the severity and the duration of the impairment and changes in value subsequent to year-end. If a decline in the fair value is considered other-than-temporary, based on available evidence, the unrealized loss is transferred from other comprehensive income (loss) to the consolidated statements of operations.

There were no charges recorded for other-than-temporary declines in fair value of marketable securities in 2013, 2012 or 2011. Realized gains and losses are determined using the specific identification method and are included in other income (expense), net in the consolidated statements of operations. There were no gross realized gains or losses recognized in 2013, 2012 or 2011.

Stock-based Compensation Expense

The Company expenses the fair value of employee stock options and other forms of stock-based employee compensation over the associated employee service period on a straight-line basis. For awards with performance conditions, the Company estimates the likelihood of satisfaction of the performance conditions, which affects the period over which the expense is recognized, and recognizes the expense using the accelerated attribution model. Stock-based compensation expense is determined based on the fair value of the award at the grant date, including estimated forfeitures, and is adjusted each period to reflect actual forfeitures and the outcomes of certain performance conditions.

Research and Development Expenses

The Company expenses as incurred all research and development expenses, including amounts funded by research and development collaborations. The Company capitalizes nonrefundable advance payments made by the Company for research and development activities and expenses the payments as the related goods are delivered or the related services are performed.

Research and development expenses are comprised of costs incurred by the Company in performing research and development activities, including salary and benefits; stock-based compensation expense; laboratory supplies and other direct expenses; contractual services costs, including clinical trial and pharmaceutical development costs; expenses associated with drug supplies that are not being capitalized; and infrastructure costs, including facilities costs and depreciation expense.

Advertising Expenses

The Company expenses the costs of advertising, including promotional expenses, as incurred. Advertising expenses, recorded in sales, general and administrative expenses, were $19.6 million, $58.6 million and $30.8 million in 2013, 2012 and 2011, respectively.

Inventories

The Company values its inventories at the lower-of-cost or market. The Company determines the cost of its inventories, which includes amounts related to materials and manufacturing overhead, on a first-in, first-out basis. The Company performs an assessment of the recoverability of capitalized inventory during each reporting period, and writes down any excess and obsolete inventories to their realizable value in the period in which the impairment is first identified. Shipping and handling costs incurred for inventory purchases are capitalized and recorded upon sale in cost of product revenues in the consolidated statements of operations. Shipping and handling costs incurred for product shipments are recorded as incurred in cost of product revenues in the consolidated statements of operations.

The Company capitalizes inventories produced in preparation for initiating sales of a drug candidate when the related drug candidate is considered to have a high likelihood of regulatory approval and the related costs are expected to be recoverable through sales of the inventories. In determining whether or not to capitalize such inventories, the Company evaluates, among other factors, information regarding the drug candidate’s safety and efficacy, the status of regulatory submissions and communications with regulatory authorities and the outlook for commercial sales, including the existence of current or anticipated competitive drugs and the availability of reimbursement. In addition, the Company evaluates risks associated with manufacturing the drug candidate and the remaining shelf-life of the inventories.

Property and Equipment

Property and equipment are recorded at cost. Depreciation expense is recorded using the straight-line method over the estimated useful life of the related asset, generally seven to ten years for furniture and equipment, three to five years for computers and software, 40 years for buildings and for leasehold improvements, the useful life of the improvements or the estimated remaining life of the associated lease. Maintenance and repairs to an asset that do not improve or extend its life are charged to operations. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are eliminated from the accounts and any resulting gain or loss is reflected in the Company’s consolidated statements of operations. The Company performs an assessment of the fair value of the assets if indicators of impairment are identified during a reporting period and records the assets at the lower of the net book value or the fair value of the assets.

The Company capitalizes internal costs incurred to develop software for internal use during the application development stage. The Company expenses costs related to the planning and post-implementation phases of development of software for internal use as these costs are incurred. Maintenance and enhancement costs (including costs in the post-implementation stages) are expensed as incurred, unless such costs relate to substantial upgrades and enhancements to the software resulting in added functionality, in which case the costs are capitalized. Amortization of capitalized internally developed software costs is recorded in depreciation expense over the useful life of the related asset.

The Company records certain construction costs incurred by a landlord as an asset and corresponding financing obligation on the Company's consolidated balance sheets as the owner of the buildings for accounting purposes.

Capital Leases

The assets and liabilities associated with capital lease agreements are recorded at the present value of the minimum lease payments at the inception of the lease agreement. The assets are amortized using the straight-line method over the estimated useful life of the related asset or the remaining life of the associated lease. Amortization of assets that the Company leases pursuant to a capital lease is included in depreciation expense. The Company performs an assessment of the fair value of the assets if indicators of impairment are identified during a reporting period and records the assets at the lower of the net book value or the fair value of the assets. Assets recorded under capital leases are recorded within "Property and equipment, net" and liabilities related to those assets are recorded within "Capital lease obligations, current portion" and "Capital lease obligations, excluding current portion," on the Company's consolidated balance sheets.

Income Taxes

Deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the income tax bases of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company records liabilities related to uncertain tax positions by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The Company does not believe any such uncertain tax positions currently pending will have a material adverse effect on its consolidated financial statements.

Variable Interest Entities

The Company reviews each collaboration agreement pursuant to which the Company licenses assets owned by a collaborator in order to determine whether or not the collaborator is a VIE. If the collaborator is a VIE, the Company assesses whether or not the Company is the primary beneficiary of that VIE based on a number of factors, including (i) which party has the power to direct the activities that most significantly affect the VIE’s economic performance, (ii) the parties’ contractual rights and responsibilities pursuant to the collaboration agreement and (iii) which party has the obligation to absorb losses or the right to receive benefits from the VIE. If the Company determines it is the primary beneficiary of a VIE at the onset of the collaboration agreement, the collaboration is treated as a business combination and the Company consolidates the financial statements of the VIE into the Company’s consolidated financial statements. The Company evaluates whether it continues to be the primary beneficiary of any consolidated VIEs on a quarterly basis. If the Company determines that it is no longer the primary beneficiary of a consolidated VIE, or no longer has a variable interest in the VIE, it deconsolidates the VIE in the period that the determination is made.

Business Combinations

The Company assigns the value of consideration, including contingent consideration, transferred in business combinations to the appropriate accounts on the Company's consolidated balance sheet based on their fair value as of the effective date of the transaction. If a collaboration has been treated as a business combination and there are contingent payments, increases in the fair value of the contingent payments pursuant to collaborations accounted for as business combinations result in a decrease in net income attributable to Vertex (or an increase in net loss attributable to Vertex) on a dollar-for-dollar basis. Transaction costs and any restructuring costs associated with these transactions are expensed as incurred.

Fair Value of In-process Research and Development Assets and Contingent Payments in Business Combinations

The present-value models used to estimate the fair values of research and development assets and contingent payments pursuant to collaborations incorporate significant assumptions, including: assumptions regarding the probability of obtaining marketing approval and/or achieving relevant development milestones for a drug candidate; estimates regarding the timing of and the expected costs to develop a drug candidate; estimates of future cash flows from potential product sales and/or the potential to achieve certain commercial milestones with respect to a drug candidate; and the appropriate discount and tax rates.

In-process Research and Development Assets

The Company records the fair value of in-process research and development assets as of the transaction date of a business combination. Each of these assets is accounted for as an indefinite-lived intangible asset and is maintained on the Company’s consolidated balance sheet until either the project underlying it is completed or the asset becomes impaired. If the asset becomes impaired or is abandoned, the carrying value of the related intangible asset is written down to its fair value, and an impairment charge is recorded in the period in which the impairment occurs. If a project is completed, the carrying value of the related intangible asset is amortized as a part of cost of product revenues over the remaining estimated life of the asset beginning in the period in which the project is completed. In-process research and development assets are tested for impairment on an annual basis as of October 1, and more frequently if indicators are present or changes in circumstances suggest that impairment may exist.

Goodwill

The difference between the purchase price and the fair value of assets acquired and liabilities assumed in a business combination is allocated to goodwill. Goodwill is evaluated for impairment on an annual basis as of October 1, and more frequently if indicators are present or changes in circumstances suggest that impairment may exist.

Deconsolidation and Discontinued Operations

Upon the occurrence of certain events and on a regular basis, the Company evaluates whether it no longer has a controlling financial interest in its subsidiaries, including deemed subsidiaries such as consolidated VIEs. If it is determined that the Company no longer has a controlling interest, the subsidiary is deconsolidated. The Company records a gain or loss on deconsolidation based on the difference on the deconsolidation date between (i) the aggregate of (a) the fair value of any consideration received, (b) the fair value of any retained noncontrolling investment in the former subsidiary and (c) the carrying amount of any noncontrolling interest in the subsidiary being deconsolidated, less (ii) the carrying amount of the former subsidiary’s assets and liabilities.

The Company assesses whether a deconsolidation is required to be presented as discontinued operations in its consolidated financial statements on the deconsolidation date. This assessment is based on whether or not (i) the operations and cash flows to the former subsidiary have been or will be eliminated from the Company's ongoing operations as a result of the deconsolidation event and (ii) the Company will have any significant continuing involvement in the operations of the former subsidiary after the deconsolidation event. If the Company determines that a deconsolidation requires presentation as a discontinued operation on the deconsolidation date, or at any point during the one year period following such date, it will present the former subsidiary as a discontinued operation in current and comparative period financial statements.

Derivative Instruments, Embedded Derivatives and Hedging Activities

The Company has entered into financial transactions involving free-standing derivative instruments and embedded derivatives in the past. Embedded derivatives are required to be bifurcated from the host instruments because the derivatives are not clearly and closely related to the host instruments. The Company determines the fair value of each derivative instrument or embedded derivative that is identified on the date of issuance and at the end of each quarterly period. The estimates of the fair value of these derivatives, particularly with respect to derivatives related to the achievement of milestones in the development of telaprevir, included significant assumptions regarding the estimates market participants would make in order to evaluate these derivatives.

The Company recognizes the fair value of hedging instruments that are designated and qualify as hedging instruments pursuant to GAAP, primarily foreign currency forward contracts, as either assets or liabilities on the consolidated balance sheets. Changes in the fair value of hedging instruments are recorded each period in accumulated other comprehensive loss until the date of settlement, at which point the cumulative change in the fair value since the inception of the hedge is recognized in "Product revenues, net," in its consolidated statements of operations. The Company classifies the cash flows from hedging instruments in the same category as the cash flows from the hedged items.

The Company assesses, both at inception and on an ongoing basis, whether the foreign currency forward contracts used in hedging transactions are highly effective in offsetting the changes in cash flows of the hedged items. The Company also assesses hedge ineffectiveness quarterly and, if determined to be ineffective, records the gain or loss related to the ineffective portion to earnings in "Other income (expense), net" in the consolidated statements of operations.

Restructuring Expenses

The Company records costs and liabilities associated with exit and disposal activities based on estimates of fair value in the period the liabilities are incurred. In periods subsequent to the initial measurement, the Company measures changes to the liability using the credit-adjusted risk-free discount rate applied in the initial period. The Company evaluates and adjusts these liabilities as appropriate for changes in circumstances at least on a quarterly basis.

Comprehensive Income (Loss)

Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss), which includes foreign currency translation adjustments and unrealized gains and losses on foreign currency forward contracts and certain marketable securities. For purposes of comprehensive income (loss) disclosures, the Company does not record tax provisions or benefits, as the Company intends to permanently reinvest undistributed earnings in its foreign subsidiaries.

Foreign Currency Translation and Transactions

All material consolidated entities have the U.S. dollar as their functional currency. Non-U.S. dollar functional currency subsidiaries have assets and liabilities translated into U.S. dollars at rates of exchange in effect at the end of the year. Revenue and expense amounts are translated using the average exchange rates for the period. Net unrealized gains and losses resulting from foreign currency translation are included in accumulated other comprehensive loss, which is a separate component of shareholders’ equity. Included in accumulated other comprehensive loss are net unrealized losses related to foreign currency translation of $0.3 million, $0.7 million and $0.9 million at December 31, 2013, 2012, and 2011, respectively. Net foreign currency exchange transaction gains or losses are included in "Net income (loss)" on the Company’s consolidated statement of operations. Net transaction gains were $5.1 million and $0.7 million for 2013 and 2011, respectively, and net transaction losses were $0.4 million in 2012.

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

Basic and diluted net income per share attributable to Vertex common shareholders are presented in conformity with the two-class method required for participating securities. Under the two-class method, earnings are allocated to (i) Vertex common shares, excluding unvested restricted stock, and (ii) participating securities, based on their respective weighted-average shares outstanding for the period. Shares of unvested restricted stock granted under the Company's Amended and Restated 2006 Stock and Option Plan have the non-forfeitable right to receive dividends on an equal basis with other outstanding common stock. As a result, these unvested shares of restricted stock are considered participating securities under the two-class method. Potentially dilutive shares result from the assumed exercise of outstanding stock options (the proceeds of which are then assumed to have been used to repurchase outstanding stock using the treasury stock method) and the assumed conversion of convertible notes.

Basic net loss per share attributable to Vertex common shareholders is based upon the weighted-average number of common shares outstanding during the period, excluding restricted stock that has been issued but is not yet vested. Diluted net loss per share attributable to Vertex common shareholders is based upon the weighted-average number of common shares outstanding during the period plus additional weighted-average common equivalent shares outstanding during the period when the effect is dilutive.

Recent Accounting Pronouncements

The Company did not adopt any new accounting pronouncements during 2013 that had a material effect on the Company’s consolidated financial statements.

Collaborative Arrangements

12 Months Ended

Dec. 31, 2013

Collaborative Arrangements

Collaborative Arrangements

Janssen Pharmaceutica NV

In 2006, the Company entered into a collaboration agreement with Janssen (the "2006 Janssen Agreement") 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 has exclusive rights to commercialize telaprevir in its territories including Europe, South America, the Middle East, Africa and Australia. In November 2013, the Company and Janssen amended the collaboration agreement (the "2013 Janssen Amendment," as amended the "Janssen Agreement").

Janssen made a $165.0 million up-front license payment to the Company in 2006. The Company amortized the up-front license payment over the Company’s estimated period of performance under the Janssen Agreement through November 2013. As of November 2013, the effective date of the 2013 Janssen Amendment, there was $32.1 million remaining in deferred revenues related to this up-front license payment.

In addition to the up-front license payment, Janssen made contingent milestone payments for successful development, approval and launch of telaprevir as a product in its territories. At the inception of the 2006 Janssen Agreement, the Company determined that all of the contingent milestones were substantive and would result in revenues in the period in which the milestone was achieved. The Company earned $350.0 million of these contingent milestone payments, including a $50.0 million milestone payment earned in the first quarter of 2011 in connection with the European Medicines Agency’s acceptance of the marketing authorization application for INCIVO and an aggregate of $200.0 million in milestone payments earned in the third quarter of 2011 related to the approval of INCIVO by the European Commission and the launch of INCIVO in the European Union. The Company will not receive any further milestone payments under the Janssen Agreement.

Under the Janssen Agreement, each party incurs internal and external reimbursable expenses and is reimbursed by the other party for 50% of these expenses. The Company recognized the full amount of the reimbursable costs it incurred as research and development expenses on its consolidated statements of operations. The Company recognized, including in 2013, the amounts Janssen was obligated to pay the Company with respect to reimbursable expenses, net of reimbursable expenses incurred by Janssen, as collaborative revenues. During 2012 and 2011, 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 were responsible for drug supply in its territories. Until December 31, 2013, the Company provided Janssen certain services through the Company’s third-party manufacturing network for telaprevir.

Janssen paid the Company a tiered royalty averaging in the mid-20% range as a percentage of net sales of INCIVO in Janssen’s territories through the fourth quarter of 2013. In addition, Janssen is responsible for certain third-party royalties on net sales of INCIVO in its territories.

Pursuant to the 2013 Janssen Amendment, (i) Janssen made a payment of $152.0 million to the Company in the fourth quarter of 2013; (ii) Janssen's obligations to pay the Company royalties on net sales of INCIVO (telaprevir) terminated after the fourth quarter of 2013; and (iii) Janssen received a fully-paid license to commercialize INCIVO in its territories, subject to the continued payment of certain third-party royalties on its net sales of INCIVO. The Company and Janssen continue to perform activities related to the telaprevir development program.

The Company determined the 2013 Janssen Amendment was a material modification to the 2006 Janssen Agreement because there was a material change to the consideration and deliverables under the agreement and determined that there is one undelivered element under the agreement, as amended, which is the continuation of certain telaprevir development activities. The Company recognized $182.4 million of collaborative revenues pursuant to the Janssen Agreement in the fourth quarter of 2013. This amount was primarily attributable to (i) the residual consideration received from Janssen, including the $152.0 million fourth quarter 2013 payment and the remaining deferred revenues related to the 2006 up-front payment less (ii) the best estimate of selling price for the remaining telaprevir development activities. As of December 31, 2013, the remaining deferred revenue balance related to the Janssen collaboration was $5.0 million and will be recognized as collaborative revenues as telaprevir development program activities are completed.

The agreement will continue in effect until the expiration of Janssen’s third-party royalty obligations, which expire on a country-by-country basis on the later of (a) the last-to-expire patent covering INCIVO or (b) the last required payment by Janssen to the Company pursuant to the agreement. In the European Union, the Company has a patent covering the composition-of-matter of INCIVO that expires in 2026.

During the three years ended December 31, 2013, the Company recognized the following revenues attributable to the Janssen collaboration:



	2013		2012			2011
	(in thousands)
Royalty revenues	$	130,724	$	117,592		$	20,289
Collaborative revenues:
Up-front and amendment payments revenues	$	190,345	$	12,428		$	12,428
Milestone revenues	—		—			250,000
Net reimbursement (payment) for telaprevir development costs	2,793		(3,507		)	(8,418		)
Reimbursement for manufacturing services	10,299		7,257			20,383
Total collaborative revenues attributable to the Janssen collaboration	$	203,437	$	16,178		$	274,393
Total revenues attributable to the Janssen collaboration	$	334,161	$	133,770		$	294,682

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. In September 2011, Mitsubishi Tanabe obtained approval to market TELAVIC in Japan.

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 the fourth quarter of 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 the third quarter of 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 did not record any collaborative revenues attributable to the MTPC Agreement in 2013. The table below sets forth the total collaborative revenues attributable to the MTPC Agreement for 2012 or 2011:



	2012		2011
	(in thousands)
Amortized portion of up-front payments	$	12,744	$	38,232
Milestone revenues	485		68,515
Payments for manufacturing services	5,650		14,928
Total collaborative revenues attributable to the Mitsubishi Tanabe collaboration	$	18,879	$	121,675

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 5 years for corrector-compound research and development activities. The Company retains the right to develop and commercialize KALYDECO (ivacaftor), VX-809, VX-661 and any other compounds discovered during the course of the research collaboration with CFFT. The Company recognized collaborative revenues from this collaboration of $14.3 million, $17.0 million and $13.7 million, respectively, in 2013, 2012 and 2011.

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, lumacaftor 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 the 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 a total of two one-time commercial milestone payments upon achievement of certain sales levels for corrector compounds such as lumacaftor 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. The Company has patent applications in the United States and European Union covering the composition-of-matter of lumacaftor that expire in 2026, 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 developed pursuant to the Alios agreement through the third quarter of 2012. Alios and the Company began clinical development of ALS-2200 (VX-135) and ALS-2158 in December 2011. The Company is responsible for all costs related to development, commercialization and manufacturing of each compound licensed to the Company pursuant to the Alios Agreement and provided funding to Alios to conduct the Phase 1 clinical trials for ALS-2200 and ALS-2158. In addition, the Company provided funding for a research program, which ended in 2013, directed to the discovery of additional HCV nucleotide analogues that act on the HCV polymerase.

Upon entering into the Alios Agreement, the Company paid Alios a $60.0 million up-front payment. As of December 31, 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 VX-135.

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 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) 10 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 determined that Alios was a VIE, its license to VX-135 and ALS-2158 was a variable interest in Alios, that Alios was a business and that the Company was Alios’ primary beneficiary for the period from June 13, 2011 through December 31, 2013. 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’ financial statements with the Company’s consolidated financial statements from June 13, 2011 through December 31, 2013. However, the Company’s interests in Alios were 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 right to the Company’s assets except as provided in the Alios Agreement.

As of December 31, 2013, the Company determined that it no longer had a variable interest in Alios as a whole and did not possess the power to direct the activities that most significantly affect the economic performance of Alios based on, among other factors, the decline in significance to Alios of the licensed HCV nucleotide analogue program. A full impairment charge of $250.6 million related to the Alios collaboration and a benefit for income taxes of $102.1 million was recorded attributable to Alios. The Company deconsolidated Alios based on this conclusion as of December 31, 2013. The deconsolidation resulted in a gain of $68.2 million recorded in other income (expense), net attributable to Vertex in the consolidated statement of operations for the year ended December 31, 2013. The gain of $68.2 million was approximately the difference between (i) losses the Company recorded in 2011 and 2012 based on increases in the fair value of contingent milestone and royalty payments payable by the Company to Alios and (ii) the aggregate of $120.0 million in up-front and milestone payments that the Company has made to Alios to date pursuant to the Alios Agreement.

The Company continues to have significant continuing involvement with Alios due to the Alios Agreement; therefore, the deconsolidation of Alios is not presented as discontinued operations in the Company's consolidated financial statements as of December 31, 2013. The Company will evaluate whether it continues to have significant continuing involvement with Alios for a period of one year from the December 31, 2013 deconsolidation date.

Please refer to Note J, "Intangible Assets and Goodwill," for further information regarding the impairment of the HCV nucleotide analogue program.

Noncontrolling Interest (Alios)

Prior to the deconsolidation, the Company recorded noncontrolling interest (Alios) on two lines on its consolidated balance sheets. The noncontrolling interest (Alios) was 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 recorded net loss (income) attributable to noncontrolling interest (Alios) on its consolidated statements of operations, reflecting Alios' net loss (income) for the reporting period, adjusted for changes in the fair value of contingent milestone payments and royalties payable by the Company to Alios, which was evaluated each reporting period. A summary of net loss (income) attributable to noncontrolling interest (Alios) for the three years ended December 31, 2013 is as follows:



	2013			2012			2011
	(in thousands)
Loss before provision for (benefit from) income taxes	$	283,747		$	20,044		$	9,536
Decrease (increase) in fair value of contingent milestone and royalty payments	124,920			(114,970		)	(69,950		)
Provision for (benefit from) income taxes	(166,145		)	39,029			48,809
Net loss (income) attributable to noncontrolling interest (Alios)	$	242,522		$	(55,897	)	$	(11,605	)

In 2012 and 2011, the fair value of the contingent milestone payments and royalties payable by Vertex to Alios related to the in-licensed HCV nucleotide analogue program increased by $115.0 million and $70.0 million, respectively, due to the advancement of the Company's HCV nucleotide program, including the positive data the Company received in 2012 from a Phase 1 clinical trial that evaluated ALS-2200. As of December 31, 2013, the Company concluded that the fair value of the contingent milestone and royalty payments was zero. This determination was based on, among other factors, (a) safety, tolerability and efficacy data from a Phase 2a clinical trial of VX-135 in combination with daclatasvir that the Company received in late December 2013 and analyzed and announced in January 2014, (b) the continuing partial clinical hold on VX-135 by the U.S. Food and Drug Administration ("FDA"), (c) a review of the existing and emerging data regarding all-oral regimens for HCV infection being developed by the Company's competitors, and (d) the risks associated with establishing collaborations for the potential late-stage development of a combination regimen containing VX-135 and drug candidates controlled by third parties.

The Company used present-value models to determine the estimated fair value of the contingent milestone and royalty payments until it deconsolidated Alios, 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 and tax rates. The Company based 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 represented a measure of credit risk associated with settling the liability. Significant judgment was used in determining the appropriateness of these assumptions at each reporting period.

Alios Balance Sheet Information

The Company included items related to Alios on the Company's consolidated balance sheet as of December 31, 2012. Due to the deconsolidation of Alios as of December 31, 2013, these items were not included on the Company's consolidated balance sheet as of December 31, 2013. The following table summaries items related to the Alios included on the Company's consolidated balance sheet as of December 31, 2012.



	As of December 31, 2012
		(in thousands)
Restricted cash and cash equivalents (Alios)		$	69,983
Prepaid expenses and other current assets		$	672
Property and equipment, net		$	1,728
Intangible assets		$	250,600
Other assets		$	861
Accounts payable		$	1,054
Accrued expenses		$	6,099
Income taxes payable (Alios)		$	715
Deferred tax liability		$	152,781
Other liabilities, excluding current portion		$	910
Redeemable noncontrolling interest (Alios)		$	38,530
Noncontrolling interest (Alios)		$	196,672

As of December 31, 2012, the Company recorded Alios’ cash and cash equivalents as restricted cash and cash equivalents (Alios) because (i) the Company did not have any interest in or control over Alios’ cash and cash equivalents and (ii) the Alios Agreement did not provide for these assets to be used for the development of the assets that the Company licenses from Alios pursuant to the Alios Agreement. Assets recorded as a result of consolidating Alios’ financial condition into the Company’s consolidated balance sheet did not represent additional assets that could have been used to satisfy claims against the Company’s general assets.

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

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

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

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

The following table sets forth the computation of basic and diluted net income (loss) per share for the three years ended December 31, 2013:



	2013			2012			2011
	(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	$	(445,028	)	$	(107,032	)	$	29,574
Less: Undistributed earnings allocated to participating securities	—			—			(291		)
Net income (loss) attributable to Vertex common shareholders—basic	$	(445,028	)	$	(107,032	)	$	29,283
Basic weighted-average common shares outstanding	224,906			211,946			204,891
Basic net income (loss) attributable to Vertex per common share	$	(1.98	)	$	(0.50	)	$	0.14
Diluted net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$	(445,028	)	$	(107,032	)	$	29,574
Less: Undistributed earnings allocated to participating securities	—			—			(285		)
Net income (loss) attributable to Vertex common shareholders—diluted	$	(445,028	)	$	(107,032	)	$	29,289
Weighted-average shares used to compute basic net income (loss) per common share	224,906			211,946			204,891
Effect of potentially dilutive securities:
Stock options	—			—			3,863
Other	—			—			53
Weighted-average shares used to compute diluted net income (loss) per common share	224,906			211,946			208,807
Diluted net income (loss) attributable to Vertex per common share	$	(1.98	)	$	(0.50	)	$	0.14

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:



	2013	2012	2011
	(in thousands)
Stock options	15,729	19,726	9,626
Convertible senior subordinated notes	—	8,192	8,192
Unvested restricted stock and restricted stock units	2,165	2,350	8

Fair Value Measurements

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

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 December 31, 2013, the Company’s investments were in money market funds, short-term government-sponsored enterprise securities, corporate debt securities and commercial paper.

As of December 31, 2013, all of the Company’s financial assets that were subject to fair value measurements were valued using observable inputs. The Company’s financial assets valued based on Level 1 inputs consisted of a money market funds 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 consisted of investments in highly-rated investment-grade corporations. During 2013, 2012 and 2011, the Company did not record an other-than-temporary impairment charge related to its financial assets.

The following table sets forth the Company’s financial assets subject to fair value measurements:



	Fair Value Measurements as of December 31, 2013
			Fair Value Hierarchy
	Total		Level 1		Level 2		Level 3
	(in thousands)
Financial assets carried at fair value:
Cash equivalents:
Money market funds	$	255,689	$	255,689	$	—	$	—
Marketable securities:
Government-sponsored enterprise securities	600,450		600,450		—		—
Commercial paper	83,493		—		83,493		—
Corporate debt securities	211,834		—		211,834		—
Total	$	1,151,466	$	856,139	$	295,327	$	—

Cash and Cash Equivalents [Abstract]

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

+ References + Details

Marketable Securities

12 Months Ended

Dec. 31, 2013

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)
December 31, 2013
Cash and cash equivalents:
Cash and money market funds	$	569,299	$	—	$	—		$	569,299
Total cash and cash equivalents	$	569,299	$	—	$	—		$	569,299
Marketable securities:
Government-sponsored enterprise securities (due within 1 year)	$	600,496	$	7	$	(53	)	$	600,450
Commercial paper (due within 1 year)	83,384		109		—			83,493
Corporate debt securities (due within 1 year)	189,674		14		(34		)	189,654
Corporate debt securities (due after 1 year through 5 years)	22,181		6		(7		)	22,180
Total marketable securities	$	895,735	$	136	$	(94	)	$	895,777
Total cash, cash equivalents and marketable securities	$	1,465,034	$	136	$	(94	)	$	1,465,076

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

In December 2013, the Company initiated a hedging program intended to mitigate the changes in foreign exchange rates for a portion of the Company’s product revenues denominated in Euros, which included foreign currency forward contracts that were designated as cash flow hedges. The notional amount of Euro denominated foreign currency forward contracts as of December 31, 2013 was $17.5 million. The changes in fair value of these foreign currency forward contracts included in accumulated other comprehensive loss and the gross fair value of foreign currency forward assets and liabilities included on the consolidated balance sheet as of December 31, 2013 were not material.

Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2013

Equity [Abstract]

Accumulated Other Comprehensive Loss

The following table summarizes the changes in accumulated other comprehensive loss by component:



	Foreign currency translation adjustment			Unrealized holding gains on marketable securities			Unrealized losses on foreign currency forward contracts			Total
	(in thousands)
Balance at December 31, 2012	$	(746	)	$	196		$	—		$	(550	)
Other comprehensive income (loss) before reclassifications	421			(154		)	(23		)	244
Amounts reclassified from accumulated other comprehensive loss	—			—			—			—
Net current period other comprehensive income (loss)	421			(154		)	(23		)	244
Balance at December 31, 2013	$	(325	)	$	42		$	(23	)	$	(306	)

For the year ended December 31, 2013, there were no amounts reclassified from accumulated other comprehensive loss.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-Paragraph 1
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 9: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
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-Paragraph d
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
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Reference 17: http://www.xbrl.org/2003/role/presentationRef
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Reference 18: http://www.xbrl.org/2003/role/presentationRef
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Reference 19: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Inventories

12 Months Ended

Dec. 31, 2013

Inventory Disclosure [Abstract]

Property, Plant and Equipment [Abstract]

Inventories consisted of the following:



	As of December 31,
	2013		2012
	(in thousands)
Raw materials	$	489	$	3,754
Work-in-process	9,981		11,317
Finished goods	3,677		15,393
Total	$	14,147	$	30,464

In 2013, the Company recorded within cost of product revenues $10.4 million of write-offs for excess and obsolete inventories. In 2012, the Company recorded within cost of product revenues $133.2 million of write-offs for excess and obsolete INCIVEK inventories related to declining sales. The write-offs for excess and obsolete inventories of $10.4 million and $133.2 million in 2013 and 2012, respectively, affected the net loss attributable to Vertex per share, net of tax, by $0.05 and $0.61 in 2013 and 2012, respectively.

Property and Equipment

12 Months Ended

Dec. 31, 2013

Property and Equipment

Property and equipment, net consisted of the following:



	As of December 31,
	2013			2012
	(in thousands)
Buildings	$	506,056		$	—
Furniture and equipment	190,555			173,766
Leasehold improvements	163,019			123,770
Software	102,520			101,276
Computers	43,096			40,779
Construction-in-process	—			290,703
Total property and equipment, gross	1,005,246			730,294
Less: accumulated depreciation	(308,335		)	(296,685		)
Total property and equipment, net	$	696,911		$	433,609

Buildings as of December 31, 2013 and construction-in-process as of December 31, 2012, related to construction costs for the buildings at Fan Pier, which were placed in service in 2013. Please refer to Note I, "Fan Pier Leases," for further information.

Total property and equipment, gross, as of December 31, 2013 and 2012, included $76.4 million and $30.1 million, respectively, for property and equipment recorded under capital leases. Accumulated depreciation, as of December 31, 2013 and 2012, included $3.8 million and $1.1 million, respectively, for property and equipment recorded under capital leases. Included in property and equipment, net as of December 31, 2013 were $5.5 million and $0.5 million in capitalized internally developed software costs and related amortization, respectively. There were no such costs included in property and equipment, net as of December 31, 2012.

The Company recorded depreciation expense of $47.3 million, $35.7 million and $28.9 million, respectively, in 2013, 2012 and 2011.

Fan Pier Leases	12 Months Ended
Fan Pier Leases	Dec. 31, 2013
Fan Pier Leases [Abstract]
Fan Pier Leases	Fan Pier Leases In 2011, the Company entered into two lease agreements, pursuant to which the Company leases approximately 1.1 million square feet of office and laboratory space in two buildings (the "Buildings") at Fan Pier in Boston, Massachusetts (the “Fan Pier Leases”). The Company commenced lease payments in December 2013, and will make lease payments pursuant to the Fan Pier Leases through December 2028. The Company has an option to extend the term of the Fan Pier Leases for an additional 10 years. Because the Company was 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 was deemed for accounting purposes to be the owner of the Buildings during the construction period. Therefore, the Company recorded project construction costs incurred by the landlord as an asset and a related financing obligation during the construction period. The Company evaluated the Fan Pier Leases in the fourth quarter of 2013 and determined that the Fan Pier Leases did not meet the criteria for “sale-leaseback” treatment. This determination was based on, among other things, the Company's continuing involvement with the property in the form of non-recourse financing to the lessor. Accordingly, the Company began depreciating the asset and incurring interest expense related to the financing obligation during the fourth quarter of 2013. The Company bifurcates its 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 were constructed. The portion of the lease obligations allocated to the land is treated as an operating lease that commenced in 2011. Property and equipment, net, included $506.1 million and $290.7 million as of December 31, 2013 and 2012, respectively, related to construction costs for the Buildings. The construction financing lease obligations related to the Buildings on the Company's consolidated balance sheets were $440.9 million and $268.0 million, respectively, as of December 31, 2013 and 2012.

Intangible Assets and Goodwill	12 Months Ended
Intangible Assets and Goodwill	Dec. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets and Goodwill	Intangible Assets and Goodwill Intangible Assets As of December 31, 2013, the Company had no intangible assets recorded on its consolidated balance sheet. The intangible assets that were previously reflected on the Company's consolidated balance sheets related to drug candidates for the treatment of HCV infection. 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 received approval in the fourth quarter of 2013 for new treatment regimens for HCV infection 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 HCV infection. ViroChem Acquisition As of December 31, 2010, the intangible assets acquired from ViroChem that were reflected on the Company's consolidated balance sheet related to two drug candidates, VX-222 and VX-759. VX-222 and VX-759 had estimated fair values on December 31, 2010 of $412.9 million and $105.8 million, respectively. In the third quarter of 2011, the Company determined that the fair value of VX-759 had become impaired and that its fair value was zero. As a result, the Company recorded an impairment charge in 2011 of $105.8 million that was reflected as an intangible asset impairment charge on the Company's consolidated statement of operations. In connection with this impairment charge, the Company recorded a benefit from income taxes of $32.7 million. In 2011, the decrease to the Company's net income attributable to Vertex related to this impairment charge, net of tax credit, was $73.1 million, and the net decrease to the Company's net income per share attributable to Vertex common shareholders was $0.35 per diluted share. In 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 appeared to be generally well tolerated with high sustained viral response 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 2013. In connection with this impairment charge, the Company recorded a credit of $127.6 million in its provision for income taxes. In 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 $1.27 per share. Alios Collaboration In June 2011, the Company recorded $250.6 million of intangible assets on its consolidated balance sheet based on the Company's estimate of the fair value of Alios' HCV nucleotide analogue program, including the intellectual property related to ALS-2200 and ALS-2158. In the third quarter of 2012, after the Company discontinued the development of ALS-2158, the Company evaluated the Alios HCV nucleotide analogue program for impairment. The Company determined that there was no impairment to the program in the third quarter of 2012 because of the advancement of ALS-2200 (now formulated as VX-135). In July 2013, the FDA placed a partial clinical hold on VX-135, which is being evaluated in Phase 2 clinical development. The partial clinical hold, which prevents the Company from further evaluation of VX-135 in the United States, remains in place as of the date of this filing. In connection with preparing its financial statements for 2013, the Company determined that there were indicators that the value of the HCV nucleotide analogue program intangible asset had become impaired. This determination was based on, among other factors, (a) safety, tolerability and efficacy data from a Phase 2a clinical trial of VX-135 in combination with daclatasvir that the Company received in late December 2013 and analyzed and announced in January 2014, (b) the continuing partial clinical hold on VX-135 by the FDA, (c) a review of the existing and emerging data regarding all-oral regimens for HCV infection being developed by the Company's competitors, and (d) the risks associated with establishing collaborations for the potential late-stage development of a combination regimen containing VX-135 and drug candidates controlled by third parties. Based on these revised estimates, the Company evaluated the fair value of VX-135 from the perspective of a market participant and determined that the fair value of VX-135 was zero as of December 31, 2013. Accordingly, a $250.6 million impairment charge and a benefit from income taxes of $102.1 million was recorded in the fourth quarter of 2013. Goodwill As of December 31, 2013 and 2012, goodwill of $31.0 million was recorded on the Company's consolidated balance sheets. There was no change to goodwill during the year ended December 31, 2013.

Accrued Expenses and Other Liabilities, Current Portion

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

Accrued Expenses and Other Liabilities, Current Portion

12 Months Ended

Dec. 31, 2013

Payables and Accruals [Abstract]

Accrued expenses consisted of the following:



	As of December 31,
	2013		2012
	(in thousands)
Product revenue allowances	$	85,510	$	69,936
Payroll and benefits	76,785		62,140
Research, development and commercial contract costs	52,468		63,960
Royalty payable	18,334		29,007
Other	16,241		18,932
Professional fees	10,593		11,226
Taxes payable	8,362		2,182
Unrecognized tax benefits	2,784		4,106
Interest	—		3,395
Total	$	271,077	$	264,884

Other liabilities, current portion consisted of the following:



	As of December 31,
	2013		2012
	(in thousands)
Deferred rent	$	16,652	$	14,302
Customer deposits	7,692		—
Other	392		5,400
Total	$	24,736	$	19,702

Convertible Senior Subordinated Notes Convertible Senior Subordinated Notes	12 Months Ended
	Dec. 31, 2013
Debt Disclosure [Abstract]
Convertible Senior Subordinated Notes	Convertible Senior Subordinated Notes In September 2010, the Company completed an offering of $400.0 million in aggregate principal amount of 3.35% convertible senior subordinated notes due 2015 Notes (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 consolidated balance sheets. The 2015 Notes bore interest at the rate of 3.35% per annum, and the Company was required to make semi-annual interest payments on the outstanding principal balance of the 2015 Notes on April 1 and October 1 of each year. The 2015 Notes 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, subject to adjustment. 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.

Common Stock, Preferred Stock and Equity Plans

12 Months Ended

Dec. 31, 2013

Common Stock, Preferred Stock and Equity Plans

Common Stock, Preferred Stock and Equity Plans

The Company is authorized to issue 300,000,000 shares of common stock. Holders of common stock are entitled to one vote per share. Holders of common stock are entitled to receive dividends, if and when declared by the Company’s Board of Directors, and to share ratably in the Company’s assets legally available for distribution to the Company’s shareholders in the event of liquidation. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The holders of common stock do not have cumulative voting rights.

The Company is authorized to issue 1,000,000 shares of preferred stock in one or more series and to fix the powers, designations, preferences and relative participating, option or other rights thereof, including dividend rights, conversion rights, voting rights, redemption terms, liquidation preferences and the number of shares constituting any series, without any further vote or action by the Company's shareholders. As of December 31, 2013 and 2012, the Company had no shares of preferred stock issued or outstanding.

Stock and Option Plans

The purpose of each of the Company’s stock and option plans is to attract, retain and motivate its employees, consultants and directors. Awards granted under these plans can be incentive stock options (“ISOs”), nonstatutory stock options (“NSOs”), restricted stock (“RSs”), restricted stock units (“RSUs”) or other equity-based awards, as specified in the individual plans.

Shares issued under all of the Company’s plans are funded through the issuance of new shares. The following table contains information about the Company’s equity plans:



			As of December 31, 2013
Title of Plan	Group Eligible	Type of Award Granted	Awards Outstanding	Additional Awards Authorized for Grant
2013 Stock and Option Plan	Employees, Non-employee Directors and Consultants	NSO, ISO, RS and RSU	1,170,827	2,129,173
2006 Stock and Option Plan	Employees, Non-employee Directors and Consultants	NSO, ISO, RS and RSU	15,748,949	3,282,178
1996 Stock and Option Plan	Employees, Non-employee Directors, Advisors and Consultants	NSO, ISO and RS	974,303	—
Total			17,894,079	5,411,351

All options granted under the Company’s 2013 Stock and Option Plan ("2013 Plan"), 2006 Stock and Option Plan (“2006 Plan”) and 1996 Stock and Option Plan were granted with an exercise price equal to the fair value of the underlying common stock on the date of grant. As of December 31, 2013, the stock and option plans under which the Company makes new equity awards are the Company’s 2006 Plan and 2013 Plan. Under the 2006 Plan and the 2013 Plan, no stock options can be awarded with an exercise price less than the fair market value on the date of grant. The Company’s shareholders authorized 3,300,000 shares for issuance pursuant to the 2013 Plan in 2013 and approved an increase in the number of shares authorized for issuance pursuant to the 2006 Plan of 3,000,000 shares in 2012.

During the three years ended December 31, 2013, grants to current employees and directors had a grant date that was the same as the date the award was approved by the Company’s Board of Directors. During the three years ended December 31, 2013, for grants to new employees and directors, the date of grant for awards was the employee’s first day of employment or the date the director was elected to the Company’s Board of Directors. All options awarded under the Company’s stock and option plans expire not more than ten years from the grant date.

During the three years ended December 31, 2013, all shares of outstanding restricted stock and restricted stock units have been granted at a price equal to $0.01, the par value of the Company’s common stock. Vesting of options, restricted stock and restricted stock units generally is ratable over specified periods, usually four years, and is determined by the Company’s Board of Directors.

The following table summarizes information related to the outstanding and exercisable options during the year ended December 31, 2013:



	Stock Options		Weighted-average Exercise Price		Weighted-average Remaining Contractual Life	Aggregate Intrinsic Value
	(in thousands)		(per share)		(in years)	(in thousands)
Outstanding at December 31, 2012	19,726		$	38.09
Granted	4,840		$	57.87
Exercised	(6,995	)	$	35.28
Forfeited	(1,822	)	$	46.89
Expired	(20	)	$	46.64
Outstanding at December 31, 2013	15,729		$	44.40	6.67	$	481,311
Exercisable at December 31, 2013	7,950		$	38.84	5.13	$	283,146
Exercisable and Expected to Vest at December 31, 2013	14,967		$	43.95	6.56	$	463,885

The aggregate intrinsic value in the table above represents the total pre-tax amount, net of exercise price, that would have been received by option holders if all option holders had exercised all options with an exercise price lower than the market price on December 31, 2013, which was $74.21 based on the average of the high and low price of the Company’s common stock on that date.

The total intrinsic value (the amount by which the fair market value exceeded the exercise price) of stock options exercised during 2013, 2012 and 2011 was $291.6 million, $148.7 million and $90.5 million, respectively. The total cash received by the Company as a result of employee stock option exercises during 2013, 2012 and 2011 was $246.8 million, $172.8 million and $109.6 million, respectively.

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



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted-average Remaining Contractual Life	Weighted-average Exercise Price		Number Exercisable	Weighted-average Exercise Price
	(in thousands)	(in years)	(per share)		(in thousands)	(per share)
$ 9.09–$20.00	432	2.37	$	15.37	432	$	15.37
$20.01–$30.00	1,055	5.74	$	29.38	812	$	29.23
$30.01–$40.00	6,842	5.07	$	36.55	4,773	$	36.06
$40.01–$50.00	4,136	8.74	$	46.32	787	$	46.62
$50.01–$60.00	1,713	7.16	$	53.78	874	$	54.35
$60.01–$70.00	80	9.08	$	65.54	14	$	63.20
$70.01-$80.00	87	9.31	$	77.55	9	$	77.73
$80.01–$88.18	1,384	9.50	$	83.11	249	$	82.13
Total	15,729	6.67	$	44.40	7,950	$	38.84

The following table summarizes the restricted stock activity of the Company during the year ended December 31, 2013:



	Restricted Stock		Weighted-average Grant-date Fair Value
	(in thousands)		(per share)
Unvested at December 31, 2012	2,270		$	42.92
Granted	1,356		$	62.16
Vested	(800	)	$	42.27
Cancelled	(780	)	$	51.47
Unvested at December 31, 2013	2,046		$	52.66

The total fair value of restricted stock that vested during 2013, 2012 and 2011 (measured on the date of vesting) was $50.9 million, $41.1 million and $34.6 million, respectively.

Employee Stock Purchase Plan

The Company has an employee stock purchase plan (the “ESPP”). The ESPP permits eligible employees to enroll in a twelve-month offering period comprising two six-month purchase periods. Participants may purchase shares of the Company’s common stock, through payroll deductions, at a price equal to 85% of the fair market value of the common stock on the first day of the applicable twelve-month offering period, or the last day of the applicable six-month purchase period, whichever is lower. Purchase dates under the ESPP occur on or about May 14 and November 14 of each year. In 2012, the Company's shareholders approved an increase in the number of shares of common stock authorized for issuance pursuant to the ESPP. As of December 31, 2013, there were 1,753,381 shares of common stock authorized for issuance pursuant to the ESPP.

In 2013, the following shares were issued to employees under the ESPP:



	Year Ended December 31, 2013
	(in thousands, except per share amount)
Number of shares	527
Average price paid per share	$	36.21

Stock-based Compensation Expense

12 Months Ended

Dec. 31, 2013

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

Stock-based Compensation Expense

The Company recognizes share-based payments to employees as compensation expense using the fair value method. The fair value of stock options and shares purchased pursuant to the ESPP is calculated using the Black-Scholes option pricing model. The fair value of restricted stock and restricted stock units typically is based on the intrinsic value on the date of grant. Stock-based compensation, measured at the grant date based on the fair value of the award, is typically recognized as expense ratably over the service period. The expense recognized over the service period includes an estimate of awards that will be forfeited.

The effect of stock-based compensation expense during the three years ended December 31, 2013 was as follows:



	2013		2012		2011
	(in thousands)
Stock-based compensation expense by line item:
Research and development expenses	$	81,467	$	71,533	$	75,574
Sales, general and administrative expenses	45,836		42,752		42,652
Total stock-based compensation expense included in costs and expenses	$	127,303	$	114,285	$	118,226

The stock-based compensation expense by type of award during the three years ended December 31, 2013 was as follows:



	2013			2012			2011
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	85,067		$	79,047		$	83,098
Restricted stock and restricted stock units	36,479			29,194			30,708
ESPP share issuances	6,805			7,298			5,462
Less: stock-based compensation expense capitalized to inventories	(1,048		)	(1,254		)	(1,042		)
Total stock-based compensation expense included in costs and expenses	$	127,303		$	114,285		$	118,226

The Company capitalizes stock-based compensation expense to inventories, all of which is attributable to employees who supported the Company’s manufacturing operations for the Company's products.

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



	As of December 31, 2013
	Unrecognized Expense Net of Estimated Forfeitures		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Stock options	$	141,283	2.56
Restricted stock and restricted stock units	$	73,490	2.47
ESPP share issuances	$	5,956	0.67

Stock Options

The Company issues stock options with service conditions, which are generally the vesting periods of the awards. In 2009, the Company also issued, to certain members of senior management, stock options with performance conditions that vested upon the satisfaction of the performance conditions by the end of the first quarter of 2012. The Company uses the Black-Scholes option pricing model to estimate the fair value of stock options at the grant date. The Black-Scholes option pricing model uses the option exercise price as well as estimates and assumptions related to the expected price volatility of the Company’s stock, the rate of return on risk-free investments, the expected period during which the options will be outstanding, and the expected dividend yield for the Company’s stock to estimate the fair value of a stock option on the grant date. The options granted during 2013, 2012 and 2011 had a weighted-average grant-date fair value per share of $25.79, $19.72 and $20.88, respectively.

The fair value of each option granted during 2013, 2012 and 2011 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:



	2013		2012		2011
Expected stock price volatility	46.20	%	47.93	%	49.53	%
Risk-free interest rate	1.25	%	0.95	%	2.09	%
Expected term of options (in years)	5.81		5.78		5.74
Expected annual dividends	—		—		—

The weighted-average valuation assumptions were determined as follows:


•	Expected stock price volatility: Options to purchase the Company’s stock with remaining terms of greater than one year are regularly traded in the market. Expected stock price volatility is calculated using the trailing one month average of daily implied volatilities prior to grant date.


•	Risk-free interest rate: The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected option term.

•

Expected term of options: The expected term of options represents the period of time options are expected to be outstanding. The Company uses historical data to estimate employee exercise and post-vest termination behavior. The Company believes that all groups of employees exhibit similar exercise and post-vest termination behavior and therefore does not stratify employees into multiple groups in determining the expected term of options.


•	Expected annual dividends: The estimate for annual dividends is $0.00 because the Company has not historically paid, and does not intend for the foreseeable future to pay, a dividend.

Restricted Stock and Restricted Stock Units

The Company issues restricted stock and restricted stock units with service conditions, which are generally the vesting periods of the awards. The Company also issues, 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.

Employee Stock Purchase Plan

The weighted-average fair value of each purchase right granted during 2013, 2012 and 2011 was $21.08, $12.90 and $9.80, respectively. The following table reflects the weighted-average assumptions used in the Black-Scholes option pricing model for 2013, 2012 and 2011:



	2013		2012		2011
Expected stock price volatility	54.69	%	46.90	%	51.32	%
Risk-free interest rate	0.08	%	0.16	%	0.08	%
Expected term (in years)	0.74		0.74		0.72
Expected annual dividends	—		—		—

The expected stock price volatility for ESPP offerings is based on implied volatility. The Company bases the risk-free interest rate on the interest rate payable on U.S. Treasury securities in effect at the time of grant for a period that is commensurate with the assumed expected term. The expected term represents purchases and purchase periods that take place within the offering period. The expected annual dividends estimate is $0.00 because the Company has not historically paid, and does not for the foreseeable future intend to pay, a dividend.

September 2009 Financial Transactions

12 Months Ended

Dec. 31, 2013

September 2009 Financial Transactions

September 2009 Financial Transactions

2012 Notes

In September 2009, the Company sold $155.0 million in aggregate of secured notes due 2012 (the “2012 Notes”) for an aggregate of $122.2 million pursuant to a note purchase agreement with Olmsted Park S.A. (the “Purchaser”). The 2012 Notes were issued at a discount and did not pay current interest prior to maturity. The 2012 Notes were scheduled to mature on October 31, 2012, subject to earlier mandatory redemption to the extent that specified milestone events set forth in the Company’s collaboration with Janssen occurred prior to October 31, 2012. In February 2011, the Company received a milestone payment of $50.0 million and subsequently redeemed $50.0 million of 2012 Notes pursuant to their terms. The remaining $105.0 million of 2012 Notes were redeemed on October 31, 2011, with the proceeds of milestone payments received from Janssen in October 2011. The 2012 Notes contained an embedded derivative related to the potential mandatory redemption or early repayment of the 2012 Notes at the face amount prior to their maturity date. The fair value of this embedded derivative was evaluated quarterly, with changes in the fair value of the embedded derivative resulting in a corresponding gain or loss. The Company recorded quarterly interest expense related to the 2012 Notes using the effective interest rate method.

Sale of Contingent Milestone Payments

In September 2009, the Company entered into two purchase agreements with the Purchaser pursuant to which the Company sold its rights to an aggregate of $95.0 million in contingent milestone payments under the Janssen agreement related to the launch of telaprevir in the European Union, for nonrefundable payments totaling $32.8 million. The Purchaser received the $95.0 million in milestone payments from Janssen in the fourth quarter of 2011. The Company determined that this sale of a future revenue stream should be accounted for as a liability. The fair value of the rights sold to the Purchaser pursuant to the purchase agreements was evaluated each reporting period until the payments were received in the fourth quarter of 2011, with changes in the fair value of the derivative instruments based on the probability of achieving the milestones, the timing of achieving the milestones or discount rates resulting in a corresponding gain or loss.

Expenses Related to September 2009 Financial Transactions

The Company had no expenses related to these transactions in 2013 or 2012. The table below sets forth the total expenses related to the September 2009 financial transactions for 2011:



	2011
	(in thousands)
Expenses and Losses (Gains):
Interest expense related to 2012 Notes	$	21,687
Change in fair value of embedded derivative related to 2012 Notes	(400		)
Change in fair value of free-standing derivatives related to the sale of milestone payments	17,201
Total September 2009 financial transaction expenses	$	38,488

Sale of HIV Protease Inhibitor Royalty Stream	12 Months Ended
Sale of HIV Protease Inhibitor Royalty Stream	Dec. 31, 2013
Sale of HIV Protease Inhibitor Royalty Stream
Sale of HIV Protease Inhibitor Royalty Stream	Sale of HIV Protease Inhibitor Royalty Stream In 2008, the Company sold to a third party its rights to receive royalty payments from GlaxoSmithKline plc, net of royalty amounts to be earned by and due to a third party, for a one-time cash payment of $160.0 million. These royalty payments relate to net sales of HIV protease inhibitors, which had been developed pursuant to a collaboration agreement between the Company and GlaxoSmithKline plc. As of December 31, 2013, the Company had $63.5 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

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Taxes

The components of income (loss) before provision for (benefit from) income taxes during the three years ended December 31, 2013 consisted of the following:



	2013			2012			2011
	(in thousands)
United States	$	(390,009	)	$	256,816		$	343,515
Foreign	(586,108		)	(269,197		)	(283,070		)
Income (loss) before provision for (benefit from) income taxes	$	(976,117	)	$	(12,381	)	$	60,445

The components of the provision for (benefit from) income taxes during the three years ended December 31, 2013 consisted of the following:



	2013			2012			2011
	(in thousands)
Current taxes:
United States	$	(11,420	)	$	2,057		$	22,275
Foreign	1,084			(1,865		)	(561		)
State	2,136			1,902			8,655
Total current taxes	$	(8,200	)	$	2,094		$	30,369
Deferred taxes:
United States	$	(131,281	)	$	31,308		$	19,629
Foreign	(127,587		)	—			(32,692		)
State	(21,499		)	5,352			1,960
Total deferred taxes	$	(280,367	)	$	36,660		$	(11,103	)
Provision for (benefit from) income taxes	$	(288,567	)	$	38,754		$	19,266

The difference between the Company’s “expected” tax provision (benefit), as computed by applying the U.S. federal corporate tax rate of 35% to income (loss) before provision for (benefit from) income taxes, and actual tax is reconciled as follows:



	2013			2012			2011
	(in thousands)
Income (loss) before provision for (benefit from) income taxes	$	(976,117	)	$	(12,381	)	$	60,445
Expected tax provision (benefit)	(341,641		)	(4,333		)	21,156
State taxes, net of federal benefit	(19,268		)	7,075			10,624
Foreign rate differential	72,961			62,425			43,629
Tax credits	(16,775		)	(1,980		)	(51,086		)
Unbenefited operating losses	(43,570		)	(30,364		)	(6,286		)
Non-deductible expenses	9,614			3,198			1,953
Rate change	50,076			3,275			—
Other	36			(542		)	(724		)
Provision for (benefit from) income taxes	$	(288,567	)	$	38,754		$	19,266

Deferred tax assets and liabilities are determined based on the difference between financial statement and tax bases using enacted tax rates in effect for the year in which the differences are expected to reverse. The components of the deferred taxes were as follows:



	As of December 31,
	2013			2012
	(in thousands)
Deferred tax assets:
Net operating loss	$	850,946		$	777,687
Tax credit carryforwards	180,380			147,074
Property and equipment	—			10,701
Intangible assets	26,105			63,353
Deferred revenues	25,158			44,867
Stock-based compensation	63,521			83,979
Inventories	26,278			56,564
Accrued expenses	52,470			27,945
Currency translation adjustment	217			—
Construction financing lease obligation	152,688			—
Gross deferred tax assets	1,377,763			1,212,170
Valuation allowance	(1,243,664		)	(1,211,561		)
Total deferred tax assets	134,099			609
Deferred tax liabilities:
Property and equipment	(134,099		)	—
Unrealized gain	—			(376		)
Contingent milestone and royalty payment obligation	—			(50,904		)
Acquired intangibles	—			(229,696		)
Net deferred tax liabilities	$	—		$	(280,367	)

For federal income tax purposes, as of December 31, 2013, the Company has net operating loss carryforwards of approximately $2.7 billion and tax credits of $120.1 million, which may be used to offset future federal income and tax liability, respectively. Approximately $694.8 million of the federal net operating loss carryforward will result in an increase to additional paid-in capital if and when these carryforwards are used to reduce income taxes payable.

For state income tax purposes, the Company has net operating loss carryforwards of approximately $966.8 million and tax credits of $66.9 million, which may be used to offset future state income and tax liability, respectively. Approximately $204.5 million of the state net operating loss carryforward will result in an increase to additional paid-in capital if and when these carryforwards are used to reduce state income taxes payable.

These federal and state operating loss carryforwards and tax credits expire at various dates through 2033. After consideration of all the evidence, both positive and negative, the Company continues to maintain a valuation allowance for the full amount of the 2013 deferred tax asset because it is more likely than not that the deferred tax asset will not be realized. 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 sheets.

The valuation allowance increased by $32.1 million from December 31, 2012 to December 31, 2013 primarily due to an increase in net operating losses and credits.

Unrecognized tax benefits during the two years ended December 31, 2013 consisted of the following:



	2013			2012
	(in thousands)
Unrecognized tax benefits beginning of year	$	4,106		$	4,360
Gross change for current year positions	1,325			598
Increase for prior period positions	—			—
Decrease for prior period positions	(290		)	—
Decrease due to settlements and payments	—			—
Decrease due to statute limitations	(185		)	(852		)
Deconsolidation of Alios	(2,932		)	—
Unrecognized tax benefits end of year	$	2,024		$	4,106

The Company had gross unrecognized tax benefits of $2.0 million and $4.1 million, respectively, as of December 31, 2013 and 2012. At December 31, 2013, $2.0 million represented the amount of unrecognized tax benefits that, if recognized, would result in a reduction of the Company’s effective tax rate. The Company recognizes interest and penalties related to income taxes as a component of income tax expense. As of December 31, 2013, no interest and penalties have been accrued. In 2014, it is reasonably possible that the Company will reduce the balance of its unrecognized tax benefits by approximately $0.5 million due to the application of statute of limitations and settlements with taxing authorities, all of which would reduce the Company’s effective tax rate.

The Company files United States 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 2008 or any other major taxing jurisdiction for years before 2006, except where the Company has net operating losses or tax credit carryforwards that originate before 2006. The Company is currently under examination by Revenue Quebec and the Canada Revenue Agency for the year ended December 31, 2011. No adjustments have been reported. The Company is not under examination by any other jurisdictions for any tax year.

At December 31, 2013, foreign earnings, which were not significant, have been retained indefinitely by foreign subsidiary companies for reinvestment; therefore, no provision has been made for income taxes that would be payable upon the distribution of such earnings, and it would not be practicable to determine the amount of the related unrecognized deferred income tax liability. 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.

Restructuring Expense

12 Months Ended

Dec. 31, 2013

Restructuring and Related Activities [Abstract]

Restructuring Expense


	Restructuring Expenses

2003 Restructuring

In June 2003, Vertex adopted a plan to restructure its operations to coincide with its increasing internal emphasis on advancing drug candidates through clinical development to commercialization. The restructuring was designed to re-balance the Company’s relative investments in research and development to better support the Company’s long-term strategy. At that time, the restructuring plan included a workforce reduction, write-offs of certain assets and a decision not to occupy approximately 290,000 square feet of specialized laboratory and office space in Cambridge, Massachusetts under lease to Vertex (the “Kendall Square Lease”). The Kendall Square Lease commenced in January 2003 and has a 15-year term. In the second quarter of 2005, the Company revised its assessment of its real estate requirements and decided to use approximately 120,000 square feet of the facility subject to the Kendall Square Lease (the “Kendall Square Facility”) for its operations, beginning in 2006. The remaining rentable square footage of the Kendall Square Facility currently is subleased to third parties.

The Company’s initial estimate of its liability for net ongoing costs associated with the Kendall Square Lease obligation was recorded in the second quarter of 2003 at fair value. The restructuring expense incurred from the second quarter of 2003 through the end of the first quarter of 2005 (i.e., immediately prior to the Company’s decision to use a portion of the Kendall Square Facility for its operations) relates to the estimated incremental net ongoing lease obligations associated with the entire Kendall Square Facility, together with imputed interest costs relating to the restructuring liability. The restructuring expense incurred in the period beginning in the second quarter of 2005 relates only to the portion of the Kendall Square Facility that the Company was not occupying and did not intend to occupy for its operations. The remaining lease obligations, which are associated with the portion of the Kendall Square Facility that the Company occupies and uses for its operations, are recorded as rental expense in the period incurred. In 2014, the Company expects to cease using this portion of the Kendall Square Facility for its operations, and to incur related cease use charges. The Company reviews its assumptions and estimates quarterly and updates its estimates of this liability as changes in circumstances require. The expense and liability recorded is calculated using probability-weighted discounted cash-flows of the Company’s estimated ongoing lease obligations, including contractual rental and build-out commitments, net of estimated sublease rentals, offset by related sublease costs.

In estimating the expense and liability under its Kendall Square Lease obligation, 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 Kendall Square Lease, and will make whatever modifications the Company believes necessary, based on the Company’s best judgment, to reflect any changed circumstances. The Company’s estimates have changed in the past, and may change in the future, resulting in additional adjustments to the estimate of the liability. Changes to the Company’s estimate of the liability are recorded as additional restructuring expenses (credits). In addition, because the Company’s estimate of the liability includes the application of a discount rate to reflect the time-value of money, the Company records imputed interest costs related to the liability each quarter. These costs are included in restructuring expenses on the Company’s consolidated statements of operations.

The activity related to restructuring and other liability for 2003 was as follows:



	Restructuring Expense		Cash Payments			Non-cash Expense			Liability as of December 31, 2003
	(in thousands)
Lease restructuring and other operating lease expense	$	84,726	$	(15,200	)	$	—		$	69,526
Employee severance, benefits and related costs	2,616		(2,616		)	—			—
Leasehold improvements and asset impairments	4,482		—			(4,482		)	—
Total	$	91,824	$	(17,816	)	$	(4,482	)	$	69,526

In 2003, the lease restructuring and other operating lease expense included $78.7 million of lease restructuring expense and $6.0 million of lease operating expense incurred prior to the decision not to occupy the Kendall Square Facility. The restructuring accrual as of December 31, 2003 related only to the lease restructuring expense.

The activity related to 2003 restructuring for 2004 through 2013 was as follows:



	2013			2012			2011			2004-2013
	(in thousands)
Liability, beginning of the period	$	23,328		$	26,313		$	29,595		$	69,526
Cash payments	(15,255		)	(14,853		)	(14,904		)	(178,952		)
Cash received from subleases	10,670			10,024			9,548			75,708
Credit for portion of facility Vertex decided to occupy in 2005	—			—			—			(10,018		)
Restructuring expense	372			1,844			2,074			62,851
Liability, end of the period	$	19,115		$	23,328		$	26,313		$	19,115

In each period, the Company records lease restructuring expense attributable to imputed interest related to the restructuring liability. In certain periods, the restructuring expense also reflects the revision of certain key estimates and assumptions about building operating expenses and sublease income.

Fan Pier Move Restructuring

In connection with the relocation of its Massachusetts operations to Fan Pier in Boston, Massachusetts, the Company expects to incur restructuring charges related to its remaining lease obligations at its facilities in Cambridge, Massachusetts, including lease obligations related to the 120,000 square feet of the facility subject to the Kendall Square lease that the Company began using for its operations in 2006. The Company started incurring these charges in the fourth quarter of 2013 and expects them to continue through April 2018. Most of these restructuring charges will relate to cease use charges that will be incurred during the first half of 2014. The Company incurred $1.2 million of charges related to this restructuring during 2013. The continuing charges will relate to the difference between the Company’s estimated future cash flows related to its lease obligations and the actual cash flows that it incurs.

2013 Strategic Restructuring

In October 2013, the Company adopted a restructuring plan. The restructuring plan included (i) a workforce reduction primarily related to the commercial support of INCIVEK following the continued and rapid decline in the number of patients being treated with INCIVEK as new medicines for the treatment of HCV infection neared approval and (ii) the write-off of certain assets. This action resulted from the Company's decision to focus its investment on future opportunities in cystic fibrosis and other research and development programs.

The restructuring charges recorded during 2013 for each major type of cost associated with this restructuring plan were as follows:



	Restructuring Expense		Cash Payments			Non-cash Expense			Liability as of December 31, 2013
	(in thousands)
Employee severance, benefits and related costs	$	25,060	$	(21,458	)	$	(1,312	)	$	2,290
Asset impairments	6,282		—			(6,282		)	—
Contract termination and other associated costs	7,609		(1,458		)	—			6,151
Total	$	38,951	$	(22,916	)	$	(7,594	)	$	8,441

The Company estimates that it will incur aggregate restructuring charges of approximately $2.0 million to $2.5 million in 2014 and 2015 related to this restructuring plan. The Company anticipates cash payments of $7.9 million and $0.5 million will be made in 2014 and 2015, respectively, related to the restructuring liability as of December 31, 2013.

Employee Benefits

12 Months Ended

Dec. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Employee Benefits

The Company has a 401(k) retirement plan (the “Vertex 401(k) Plan”) in which substantially all of its permanent U.S. employees are eligible to participate. Participants may contribute up to 60% of their annual compensation to the Vertex 401(k) Plan, subject to statutory limitations. The Company may declare discretionary matching contributions to the Vertex 401(k) Plan. Employees have the ability to transfer funds from the stock fund invested in Vertex common stock, subject to certain restrictions. As of December 31, 2013, 755,000 shares of common stock remained available for grant under the Vertex 401(k) Plan. Through mid-2013, the Company paid matching contributions in Vertex common stock in the form of fully-vested interests in a Vertex common stock fund. Beginning in mid-2013, the Company began paying matching contributions in the form of cash.

The Company declared matching contributions paid in fully-vested interests in the Vertex common stock fund to the Vertex 401(k) Plan as follows:



	2013		2012		2011
	(in thousands)
Discretionary matching contributions during the year ended December 31,	$	5,930	$	10,261	$	8,619
Shares issued during the year ended December 31,	99		242		183
Shares issuable as of the year ended December 31,	0		53		62

In 2013, the Company declared matching contributions paid in fully-vested interests in the Vertex common stock fund of $5.9 million, paid matching contributions in the form of cash of $5.0 million and accrued $2.4 million related to matching contributions for the fourth quarter of 2013, which will be paid in the first quarter of 2014.

Commitments

12 Months Ended

Dec. 31, 2013

Commitments

Commitments

The Company moved into its new corporate headquarters in January 2014. Please refer to Note I, "Fan Pier Leases," for additional information regarding this commitment. The leases for the Company’s former headquarters expire in December 2015.

The term of the Kendall Square Lease began in January 2003. The Company occupies and uses for its operations approximately 120,000 square feet of the Kendall Square Facility and plans to cease using for its operations this portion of the Kendall Square Facility in 2014. The Company has sublease arrangements in place for the remaining rentable square footage of the Kendall Square Facility, with terms that expire in April 2015 and August 2015. The Kendall Square Lease will expire in 2018. Please refer to Note R, "Restructuring Expenses," for further information.

As of December 31, 2013, future minimum commitments under the Fan Pier Leases, facility operating leases with terms of more than one year and contractual sublease income under the Company’s subleases for the Kendall Square Facility were as follows:



Year	Fan Pier Leases		Kendall Square Lease		Kendall Sublease Income			Other Operating Leases		Total Lease Commitments (Net of Sublease Income)
	(in thousands)
2014	$	67,206	$	19,879	$	(8,546	)	$	40,762	$	119,301
2015	67,206		19,879		(3,996		)	33,398		116,487
2016	67,206		19,879		—			14,434		101,519
2017	67,206		19,879		—			12,995		100,080
2018	67,206		6,626		—			12,841		86,673
Thereafter	752,798		—		—			75,344		828,142
Total minimum lease payments	$	1,088,828	$	86,142	$	(12,542	)	$	189,774	$	1,352,202

During 2013, 2012 and 2011, rental expense was $57.7 million, $57.1 million and $49.4 million, respectively.

The Company has outstanding capital leases for equipment, leasehold improvements and software licenses with terms through 2019. The leases were accounted for as capital leases. The capital leases bear interest at rates ranging from 2% to 7% per year. The following table sets forth the Company’s future minimum payments due under capital leases as of December 31, 2013:



Year	(in thousands)
2014	$	19,957
2015	18,346
2016	11,809
2017	10,714
2018	10,612
Thereafter	2,121
Total payments	73,559
Less: amount representing interest	(7,912		)
Present value of payments	$	65,647

In addition, the Company has committed to make potential future milestone and royalty payments pursuant to certain collaboration agreements. Payments generally become due and payable upon the achievement of certain developmental, regulatory and/or commercial milestones. Please refer to Note B, "Collaborative Arrangements," for further information.

In the second quarter 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 consolidated balance sheets decreased by $31.8 million net of other activity during 2013, and the Company's cash and cash equivalents increased by a corresponding amount during 2013.

Legal Proceedings	12 Months Ended
Legal Proceedings	Dec. 31, 2013
Legal Proceedings [Abstract]
Legal Proceedings	Legal Proceedings On September 6, 2012, a purported shareholder class action, City of Bristol Pension Fund v. Vertex Pharmaceuticals Incorporated, et al., was filed in the United States District Court for the District of Massachusetts, naming the Company and certain of the Company's current and former officers and directors as defendants. The lawsuit alleges that the Company made material misrepresentations and/or omissions of material fact in the Company's disclosures during the period from May 7, 2012 through June 28, 2012, all in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. By order dated December 12, 2012, the court appointed the City of Bristol lead plaintiff and appointed the City of Bristol's attorneys lead counsel. The plaintiffs filed an amended complaint on February 11, 2013. The Company filed a motion to dismiss the complaint on April 12, 2013. 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 court conducted a hearing on the Company's motion to dismiss on November 25, 2013. The plaintiffs seek unspecified monetary damages on behalf of the putative class and an award of costs and expenses, including attorney's fees, as well as disgorgement of the proceeds from certain individual defendants' sales of the Company's common stock. The Company believes that this action is without merit and intends to defend it vigorously. As of December 31, 2013, the Company has not recorded any reserves for this purported class action.

Contingencies	12 Months Ended
Contingencies	Dec. 31, 2013
Commitments and Contingencies Disclosure [Abstract]
Contingencies	Contingencies The Company has certain contingent liabilities that arise in the ordinary course of its business activities. The Company accrues a reserve for contingent liabilities when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There were no material contingent liabilities accrued as of December 31, 2013 or 2012.

Guarantees	12 Months Ended
Guarantees	Dec. 31, 2013
Guarantees [Abstract]
Guarantees	Guarantees As permitted under Massachusetts law, the Company’s Articles of Organization and By-laws provide that the Company will indemnify certain of its officers and directors for certain claims asserted against them in connection with their service as an officer or director. The maximum potential amount of future payments that the Company could be required to make under these indemnification provisions is unlimited. However, the Company has purchased directors’ and officers’ liability insurance policies that could reduce its monetary exposure and enable it to recover a portion of any future amounts paid. No indemnification claims currently are outstanding, and the Company believes the estimated fair value of these indemnification arrangements is minimal. The Company customarily agrees in the ordinary course of its business to indemnification provisions in agreements with clinical trial investigators and sites in its drug development programs, sponsored research agreements with academic and not-for-profit institutions, various comparable agreements involving parties performing services for the Company, and its real estate leases. The Company also customarily agrees to certain indemnification provisions in its drug discovery, development and commercialization collaboration agreements. With respect to the Company’s clinical trials and sponsored research agreements, these indemnification provisions typically apply to any claim asserted against the investigator or the investigator’s institution relating to personal injury or property damage, violations of law or certain breaches of the Company’s contractual obligations arising out of the research or clinical testing of the Company’s compounds or drug candidates. With respect to lease agreements, the indemnification provisions typically apply to claims asserted against the landlord relating to personal injury or property damage caused by the Company, to violations of law by the Company or to certain breaches of the Company’s contractual obligations. The indemnification provisions appearing in the Company’s collaboration agreements are similar to those for the other agreements discussed above, but in addition provide some limited indemnification for its collaborator in the event of third-party claims alleging infringement of intellectual property rights. In each of the cases above, the indemnification obligation generally survives the termination of the agreement for some extended period, although the Company believes the obligation typically has the most relevance during the contract term and for a short period of time thereafter. The maximum potential amount of future payments that the Company could be required to make under these provisions is generally unlimited. The Company has purchased insurance policies covering personal injury, property damage and general liability that reduce its exposure for indemnification and would enable it in many cases to recover all or a portion of any future amounts paid. The Company has never paid any material amounts to defend lawsuits or settle claims related to these indemnification provisions. Accordingly, the Company believes the estimated fair value of these indemnification arrangements is minimal.

Segment Information

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Segment Information

The Company operates in one segment, pharmaceuticals. Enterprise-wide disclosures about revenues, significant customers, and property and equipment, net by location are presented below.

Revenues by Product

Product revenues, net consisted of the following:



	2013		2012		2011
	(in thousands)
INCIVEK	$	466,360	$	1,161,813	$	950,889
KALYDECO	371,285		171,645		—
Total product revenues, net	$	837,645	$	1,333,458	$	950,889

Revenues by Geographic Location

Total revenues from external customers and collaborators by geographic region consisted of the following. Product revenues are attributed to countries based on the location of the customer. Collaborative revenues are attributed to the operations of the Company in the United States. Royalty revenues are attributed to countries based on the location of the collaborator.



	2013		2012		2011
	(in thousands)
United States	$	896,952	$	1,373,516	$	1,389,568
Outside of the United States
Europe	279,557		129,786		20,289
Other	35,466		23,740		769
Total revenues outside of the United States	315,023		153,526		21,058
Total revenues	$	1,211,975	$	1,527,042	$	1,410,626

Significant Customers

Gross revenues and accounts receivable from each of the Company’s customers who individually accounted for 10% or more of total gross revenues and/or 10% or more of total gross accounts receivable consisted of the following:



	Percent of Total Gross Revenues						Percent of Gross Accounts Receivable
	Year Ended December 31,						As of December 31,
	2013		2012		2011		2013		2012
Janssen	22	%	<10	%	19	%	28	%	26	%
AmerisourceBergen Drug Corporation	21	%	32	%	25	%	<10	%	22	%
McKesson Corporation	21	%	29	%	24	%	<10	%	26	%
Cardinal Health Incorporated	<10	%	15	%	15	%	<10	%	<10	%
Bupa Home Healthcare Limited	<10	%	N/A		N/A		14	%	N/A

Property and Equipment, Net by Location

Property and equipment, net by location consisted of the following:



	As of December 31,
	2013		2012
	(in thousands)
United States	$	657,587	$	400,102
Outside of the United States
United Kingdom	29,970		30,622
Other	9,354		2,885
Total property and equipment, net outside of the United States	39,324		33,507
Total property and equipment, net	$	696,911	$	433,609

Quarterly Financial Information Disclosure [Abstract]

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Quarterly Financial Data (unaudited)

12 Months Ended

Dec. 31, 2013

Quarterly Financial Data (unaudited)



	Three Months Ended
	March 31, 2013			June 30, 2013			September 30, 2013			December 31, 2013
	(in thousands, except per share amounts)
Revenues:
Product revenues, net	$	267,381		$	254,789		$	186,653		$	128,822
Royalty revenues	43,573			49,120			27,012			36,887
Collaborative revenues (1)	17,414			6,841			8,035			185,448
Total revenues	328,368			310,750			221,700			351,157
Costs and expenses:
Cost of product revenues (2)	30,955			24,695			20,048			13,281
Royalty expenses	11,788			13,236			7,291			8,983
Research and development expenses	218,095			222,455			228,624			249,609
Sales, general and administrative expenses	92,879			106,521			87,754			75,188
Restructuring expenses	39			776			12,048			27,658
Intangible asset impairment charges (3)(4)	412,900			—			—			250,600
Total costs and expenses	766,656			367,683			355,765			625,319
Loss from operations	(438,288		)	(56,933		)	(134,065		)	(274,162		)
Interest expense, net	(3,465		)	(6,551		)	(95		)	(12,619		)
Other income (expense), net (4)	(1,187		)	(27		)	4,747			(53,472		)
Loss before benefit from income taxes	(442,940		)	(63,511		)	(129,413		)	(340,253		)
Benefit from income taxes (3)(4)	(130,313		)	(1,799		)	(751		)	(155,704		)
Net loss	(312,627		)	(61,712		)	(128,662		)	(184,549		)
Net loss attributable to noncontrolling interest (Alios)	4,611			4,547			4,530			228,834
Net income (loss) attributable to Vertex	$	(308,016	)	$	(57,165	)	$	(124,132	)	$	44,285
Net income (loss) per share attributable to Vertex common shareholders:
Basic	$	(1.43	)	$	(0.26	)	$	(0.54	)	$	0.19
Diluted	$	(1.43	)	$	(0.26	)	$	(0.54	)	$	0.19
Shares used in per share calculations:
Basic	215,421			222,053			230,505			231,264
Diluted	215,421			222,053			230,505			235,717



	Three Months Ended
	March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012
	(in thousands, except per share amounts)
Revenues:
Product revenues, net	$	375,375		$	373,273		$	303,501		$	281,309
Royalty revenues	38,981			33,480			25,586			43,451
Collaborative revenues	24,381			11,552			6,919			9,234
Total revenues	438,737			418,305			336,006			333,994
Costs and expenses:
Cost of product revenues (2)	25,918			104,549			30,680			75,595
Royalty expenses	13,293			9,874			7,856			12,120
Research and development expenses	196,371			196,544			200,161			213,109
Sales, general and administrative expenses	111,146			117,514			97,684			110,452
Restructuring expenses	360			594			696			194
Intangible asset impairment charge	—			—			—			—
Total costs and expenses	347,088			429,075			337,077			411,470
Income (loss) from operations	91,649			(10,770		)	(1,071		)	(77,476		)
Interest expense, net	(3,891		)	(3,814		)	(4,054		)	(3,263		)
Other income (expense), net	150			179			13			(33		)
Income (loss) before provision for (benefit from) income taxes	87,908			(14,405		)	(5,112		)	(80,772		)
Provision for (benefit from) income taxes	32			20,063			21,355			(2,696		)
Net income (loss)	87,876			(34,468		)	(26,467		)	(78,076		)
Net loss (income) attributable to noncontrolling interest (Alios)	3,714			(30,463		)	(31,076		)	1,928
Net income (loss) attributable to Vertex	$	91,590		$	(64,931	)	$	(57,543	)	$	(76,148	)
Net income (loss) per share attributable to Vertex common shareholders:
Basic	$	0.44		$	(0.31	)	$	(0.27	)	$	(0.35	)
Diluted	$	0.43		$	(0.31	)	$	(0.27	)	$	(0.35	)
Shares used in per share calculations:
Basic	208,018			211,344			213,767			214,607
Diluted	219,264			211,344			213,767			214,607


1.	During the fourth quarter of 2013, the Company recorded $182.4 million of collaborative revenue related to its Janssen collaboration, which was primarily attributable to an amendment to its collaboration agreement with Janssen. See Note B, "Collaborative Arrangements," for further information.


2.	During 2013 and 2012, the Company recorded within cost of product revenues lower-of-cost or market charges for excess or obsolete inventories. See Note G, "Inventories," for further information.


3.	During the first quarter of 2013, the Company recorded a $412.9 million intangible asset impairment charge related to its VX-222 indefinite-lived in-process research and development asset. In connection with this impairment charge, the Company recorded a credit of $127.6 million in its provision for income taxes. See Note J, "Intangible Assets and Goodwill," for further information.

During the fourth quarter of 2013, the Company deconsolidated Alios, which included certain charges related to deconsolidation recorded in other income (expense), net, and was preceded by a $250.6 million intangible asset impairment charge related to the HCV nucleotide analogue program indefinite-lived in-process research and development asset. In connection with this impairment charge, a credit of $102.1 million was recorded to the provision for income taxes attributable to Alios. See Note B, "Collaborative Arrangements," and Note J, "Intangible Assets and Goodwill," for further information.

Nature of Business and Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Basis of Presentation

Use of Estimates

Revenue Recognition

Product Revenues, Net

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



	Trade Allowances			Rebates, Chargebacks and Discounts			Product Returns			Other Incentives			Total
	(in thousands)
2013
Beginning Balance	$	5,416		$	63,560		$	2,852		$	3,565		$	75,393
Provision related to current period sales	31,395			204,459			5,795			9,295			250,944
Adjustments related to prior period sales	343			4,474			15,149			(228		)	19,738
Credits/payments made	(35,619		)	(204,249		)	(7,997		)	(11,077		)	(258,942		)
Ending Balance	$	1,535		$	68,244		$	15,799		$	1,555		$	87,133

2012
Beginning Balance	$	11,162		$	52,659		$	340		$	5,202		$	69,363
Provision related to current period sales	55,913			216,942			2,067			19,103			294,025
Adjustments related to prior period sales	29			3,883			1,498			72			5,482
Credits/payments made	(61,688		)	(209,924		)	(1,053		)	(20,812		)	(293,477		)
Ending Balance	$	5,416		$	63,560		$	2,852		$	3,565		$	75,393

2011
Beginning Balance	$	—		$	—		$	—		$	—		$	—
Provision related to current period sales	38,228			75,145			553			9,692			123,618
Credits/payments made	(27,066		)	(22,486		)	(213		)	(4,490		)	(54,255		)
Ending Balance	$	11,162		$	52,659		$	340		$	5,202		$	69,363

Royalty Revenues

Collaborative Revenues

Concentration of Credit Risk

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Restricted Cash

Marketable Securities

Stock-based Compensation Expense

Research and Development Expenses

Advertising Expenses

The Company expenses the costs of advertising, including promotional expenses, as incurred.

Variable Interest Entities

Property and Equipment

Capital Leases

Income Taxes

Business Combinations

Fair Value of In-Process Research and Development Asset and Contingent payments in Business Combinations

Fair Value of In-process Research and Development Assets and Contingent Payments in Business Combinations

In-process Research and Development Assets

Deconsolidation and Discounted Operations

Deconsolidation and Discontinued Operations

Derivative Instruments, Embedded Derivatives and Hedging Activities

Restructuring Expense

Restructuring Expenses

Comprehensive Income (Loss)

Foreign Currency Translation and Transactions

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

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

Recent Accounting Pronouncements

The Company did not adopt any new accounting pronouncements during 2013 that had a material effect on the Company’s consolidated financial statements.

Nature of Business and Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2013

Accounting Policies [Abstract]

Schedule of product revenues allowances and reserve categories

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



	Trade Allowances			Rebates, Chargebacks and Discounts			Product Returns			Other Incentives			Total
	(in thousands)
2013
Beginning Balance	$	5,416		$	63,560		$	2,852		$	3,565		$	75,393
Provision related to current period sales	31,395			204,459			5,795			9,295			250,944
Adjustments related to prior period sales	343			4,474			15,149			(228		)	19,738
Credits/payments made	(35,619		)	(204,249		)	(7,997		)	(11,077		)	(258,942		)
Ending Balance	$	1,535		$	68,244		$	15,799		$	1,555		$	87,133

2012
Beginning Balance	$	11,162		$	52,659		$	340		$	5,202		$	69,363
Provision related to current period sales	55,913			216,942			2,067			19,103			294,025
Adjustments related to prior period sales	29			3,883			1,498			72			5,482
Credits/payments made	(61,688		)	(209,924		)	(1,053		)	(20,812		)	(293,477		)
Ending Balance	$	5,416		$	63,560		$	2,852		$	3,565		$	75,393

2011
Beginning Balance	$	—		$	—		$	—		$	—		$	—
Provision related to current period sales	38,228			75,145			553			9,692			123,618
Credits/payments made	(27,066		)	(22,486		)	(213		)	(4,490		)	(54,255		)
Ending Balance	$	11,162		$	52,659		$	340		$	5,202		$	69,363

Collaborative Arrangements (Tables)

12 Months Ended

Dec. 31, 2013

Collaborative Arrangements

Collaborator revenues

MTPC Agreement for 2012 or 2011:



	2012		2011
	(in thousands)
Amortized portion of up-front payments	$	12,744	$	38,232
Milestone revenues	485		68,515
Payments for manufacturing services	5,650		14,928
Total collaborative revenues attributable to the Mitsubishi Tanabe collaboration	$	18,879	$	121,675

During the three years ended December 31, 2013, the Company recognized the following revenues attributable to the Janssen collaboration:



	2013		2012			2011
	(in thousands)
Royalty revenues	$	130,724	$	117,592		$	20,289
Collaborative revenues:
Up-front and amendment payments revenues	$	190,345	$	12,428		$	12,428
Milestone revenues	—		—			250,000
Net reimbursement (payment) for telaprevir development costs	2,793		(3,507		)	(8,418		)
Reimbursement for manufacturing services	10,299		7,257			20,383
Total collaborative revenues attributable to the Janssen collaboration	$	203,437	$	16,178		$	274,393
Total revenues attributable to the Janssen collaboration	$	334,161	$	133,770		$	294,682

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 years ended December 31, 2013 is as follows:



	2013			2012			2011
	(in thousands)
Loss before provision for (benefit from) income taxes	$	283,747		$	20,044		$	9,536
Decrease (increase) in fair value of contingent milestone and royalty payments	124,920			(114,970		)	(69,950		)
Provision for (benefit from) income taxes	(166,145		)	39,029			48,809
Net loss (income) attributable to noncontrolling interest (Alios)	$	242,522		$	(55,897	)	$	(11,605	)

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

Alios Balance Sheet Information



	As of December 31, 2012
		(in thousands)
Restricted cash and cash equivalents (Alios)		$	69,983
Prepaid expenses and other current assets		$	672
Property and equipment, net		$	1,728
Intangible assets		$	250,600
Other assets		$	861
Accounts payable		$	1,054
Accrued expenses		$	6,099
Income taxes payable (Alios)		$	715
Deferred tax liability		$	152,781
Other liabilities, excluding current portion		$	910
Redeemable noncontrolling interest (Alios)		$	38,530
Noncontrolling interest (Alios)		$	196,672

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

12 Months Ended

Dec. 31, 2013

Earnings Per Share [Abstract]

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

The following table sets forth the computation of basic and diluted net income (loss) per share for the three years ended December 31, 2013:



	2013			2012			2011
	(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	$	(445,028	)	$	(107,032	)	$	29,574
Less: Undistributed earnings allocated to participating securities	—			—			(291		)
Net income (loss) attributable to Vertex common shareholders—basic	$	(445,028	)	$	(107,032	)	$	29,283
Basic weighted-average common shares outstanding	224,906			211,946			204,891
Basic net income (loss) attributable to Vertex per common share	$	(1.98	)	$	(0.50	)	$	0.14
Diluted net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$	(445,028	)	$	(107,032	)	$	29,574
Less: Undistributed earnings allocated to participating securities	—			—			(285		)
Net income (loss) attributable to Vertex common shareholders—diluted	$	(445,028	)	$	(107,032	)	$	29,289
Weighted-average shares used to compute basic net income (loss) per common share	224,906			211,946			204,891
Effect of potentially dilutive securities:
Stock options	—			—			3,863
Other	—			—			53
Weighted-average shares used to compute diluted net income (loss) per common share	224,906			211,946			208,807
Diluted net income (loss) attributable to Vertex per common share	$	(1.98	)	$	(0.50	)	$	0.14

Potential gross common equivalent shares



	2013	2012	2011
	(in thousands)
Stock options	15,729	19,726	9,626
Convertible senior subordinated notes	—	8,192	8,192
Unvested restricted stock and restricted stock units	2,165	2,350	8

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

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

The following table sets forth the Company’s financial assets subject to fair value measurements:



	Fair Value Measurements as of December 31, 2013
			Fair Value Hierarchy
	Total		Level 1		Level 2		Level 3
	(in thousands)
Financial assets carried at fair value:
Cash equivalents:
Money market funds	$	255,689	$	255,689	$	—	$	—
Marketable securities:
Government-sponsored enterprise securities	600,450		600,450		—		—
Commercial paper	83,493		—		83,493		—
Corporate debt securities	211,834		—		211,834		—
Total	$	1,151,466	$	856,139	$	295,327	$	—

Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2013

Cash and Cash Equivalents [Abstract]

Summary of cash, cash equivalents and marketable securities

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



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
December 31, 2013
Cash and cash equivalents:
Cash and money market funds	$	569,299	$	—	$	—		$	569,299
Total cash and cash equivalents	$	569,299	$	—	$	—		$	569,299
Marketable securities:
Government-sponsored enterprise securities (due within 1 year)	$	600,496	$	7	$	(53	)	$	600,450
Commercial paper (due within 1 year)	83,384		109		—			83,493
Corporate debt securities (due within 1 year)	189,674		14		(34		)	189,654
Corporate debt securities (due after 1 year through 5 years)	22,181		6		(7		)	22,180
Total marketable securities	$	895,735	$	136	$	(94	)	$	895,777
Total cash, cash equivalents and marketable securities	$	1,465,034	$	136	$	(94	)	$	1,465,076

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 Loss (Tables)

12 Months Ended

Dec. 31, 2013

Equity [Abstract]

Reclassifications out of Accumulated Other Comprehensive Income

The following table summarizes the changes in accumulated other comprehensive loss by component:



	Foreign currency translation adjustment			Unrealized holding gains on marketable securities			Unrealized losses on foreign currency forward contracts			Total
	(in thousands)
Balance at December 31, 2012	$	(746	)	$	196		$	—		$	(550	)
Other comprehensive income (loss) before reclassifications	421			(154		)	(23		)	244
Amounts reclassified from accumulated other comprehensive loss	—			—			—			—
Net current period other comprehensive income (loss)	421			(154		)	(23		)	244
Balance at December 31, 2013	$	(325	)	$	42		$	(23	)	$	(306	)

Inventories (Tables)

12 Months Ended

Dec. 31, 2013

Inventory Disclosure [Abstract]

Schedule of Inventories by Type

Inventories consisted of the following:



	As of December 31,
	2013		2012
	(in thousands)
Raw materials	$	489	$	3,754
Work-in-process	9,981		11,317
Finished goods	3,677		15,393
Total	$	14,147	$	30,464

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2013

Property, Plant and Equipment [Abstract]

Schedule of Property and equipment

Property and equipment, net consisted of the following:



	As of December 31,
	2013			2012
	(in thousands)
Buildings	$	506,056		$	—
Furniture and equipment	190,555			173,766
Leasehold improvements	163,019			123,770
Software	102,520			101,276
Computers	43,096			40,779
Construction-in-process	—			290,703
Total property and equipment, gross	1,005,246			730,294
Less: accumulated depreciation	(308,335		)	(296,685		)
Total property and equipment, net	$	696,911		$	433,609

Accrued Expenses and Other Liabilities, Current Portion (Tables)

12 Months Ended

Dec. 31, 2013

Payables and Accruals [Abstract]

Accrued expenses and other current liabilities

Accrued expenses consisted of the following:



	As of December 31,
	2013		2012
	(in thousands)
Product revenue allowances	$	85,510	$	69,936
Payroll and benefits	76,785		62,140
Research, development and commercial contract costs	52,468		63,960
Royalty payable	18,334		29,007
Other	16,241		18,932
Professional fees	10,593		11,226
Taxes payable	8,362		2,182
Unrecognized tax benefits	2,784		4,106
Interest	—		3,395
Total	$	271,077	$	264,884

Common Stock, Preferred Stock and Equity Plans (Tables)

12 Months Ended

Dec. 31, 2013

Common Stock, Preferred Stock and Equity Plans

Stock and Stock Option Equity Plans

The following table contains information about the Company’s equity plans:



			As of December 31, 2013
Title of Plan	Group Eligible	Type of Award Granted	Awards Outstanding	Additional Awards Authorized for Grant
2013 Stock and Option Plan	Employees, Non-employee Directors and Consultants	NSO, ISO, RS and RSU	1,170,827	2,129,173
2006 Stock and Option Plan	Employees, Non-employee Directors and Consultants	NSO, ISO, RS and RSU	15,748,949	3,282,178
1996 Stock and Option Plan	Employees, Non-employee Directors, Advisors and Consultants	NSO, ISO and RS	974,303	—
Total			17,894,079	5,411,351

Outstanding and vested options

The following table summarizes information related to the outstanding and exercisable options during the year ended December 31, 2013:



	Stock Options		Weighted-average Exercise Price		Weighted-average Remaining Contractual Life	Aggregate Intrinsic Value
	(in thousands)		(per share)		(in years)	(in thousands)
Outstanding at December 31, 2012	19,726		$	38.09
Granted	4,840		$	57.87
Exercised	(6,995	)	$	35.28
Forfeited	(1,822	)	$	46.89
Expired	(20	)	$	46.64
Outstanding at December 31, 2013	15,729		$	44.40	6.67	$	481,311
Exercisable at December 31, 2013	7,950		$	38.84	5.13	$	283,146
Exercisable and Expected to Vest at December 31, 2013	14,967		$	43.95	6.56	$	463,885

Stock options outstanding and exercisable

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



	Options Outstanding				Options Exercisable
Range of Exercise Prices	Number Outstanding	Weighted-average Remaining Contractual Life	Weighted-average Exercise Price		Number Exercisable	Weighted-average Exercise Price
	(in thousands)	(in years)	(per share)		(in thousands)	(per share)
$ 9.09–$20.00	432	2.37	$	15.37	432	$	15.37
$20.01–$30.00	1,055	5.74	$	29.38	812	$	29.23
$30.01–$40.00	6,842	5.07	$	36.55	4,773	$	36.06
$40.01–$50.00	4,136	8.74	$	46.32	787	$	46.62
$50.01–$60.00	1,713	7.16	$	53.78	874	$	54.35
$60.01–$70.00	80	9.08	$	65.54	14	$	63.20
$70.01-$80.00	87	9.31	$	77.55	9	$	77.73
$80.01–$88.18	1,384	9.50	$	83.11	249	$	82.13
Total	15,729	6.67	$	44.40	7,950	$	38.84

Restricted stock activity

The following table summarizes the restricted stock activity of the Company during the year ended December 31, 2013:



	Restricted Stock		Weighted-average Grant-date Fair Value
	(in thousands)		(per share)
Unvested at December 31, 2012	2,270		$	42.92
Granted	1,356		$	62.16
Vested	(800	)	$	42.27
Cancelled	(780	)	$	51.47
Unvested at December 31, 2013	2,046		$	52.66

Shares issued under Employee Stock Purchase Plan

In 2013, the following shares were issued to employees under the ESPP:



	Year Ended December 31, 2013
	(in thousands, except per share amount)
Number of shares	527
Average price paid per share	$	36.21

Stock-based Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2013

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

Stock-based compensation expense by line item

The effect of stock-based compensation expense during the three years ended December 31, 2013 was as follows:



	2013		2012		2011
	(in thousands)
Stock-based compensation expense by line item:
Research and development expenses	$	81,467	$	71,533	$	75,574
Sales, general and administrative expenses	45,836		42,752		42,652
Total stock-based compensation expense included in costs and expenses	$	127,303	$	114,285	$	118,226

Stock-based compensation expense by type of award

The stock-based compensation expense by type of award during the three years ended December 31, 2013 was as follows:



	2013			2012			2011
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	85,067		$	79,047		$	83,098
Restricted stock and restricted stock units	36,479			29,194			30,708
ESPP share issuances	6,805			7,298			5,462
Less: stock-based compensation expense capitalized to inventories	(1,048		)	(1,254		)	(1,042		)
Total stock-based compensation expense included in costs and expenses	$	127,303		$	114,285		$	118,226

Unrecognized stock-based compensation expense, net of estimated forfeitures



	As of December 31, 2013
	Unrecognized Expense Net of Estimated Forfeitures		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Stock options	$	141,283	2.56
Restricted stock and restricted stock units	$	73,490	2.47
ESPP share issuances	$	5,956	0.67

Schedule of assumptions used to estimate the grant date fair value of options

The fair value of each option granted during 2013, 2012 and 2011 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:



	2013		2012		2011
Expected stock price volatility	46.20	%	47.93	%	49.53	%
Risk-free interest rate	1.25	%	0.95	%	2.09	%
Expected term of options (in years)	5.81		5.78		5.74
Expected annual dividends	—		—		—

Schedule of assumptions used to estimate the grant date fair value employee stock purchase plan

The following table reflects the weighted-average assumptions used in the Black-Scholes option pricing model for 2013, 2012 and 2011:



	2013		2012		2011
Expected stock price volatility	54.69	%	46.90	%	51.32	%
Risk-free interest rate	0.08	%	0.16	%	0.08	%
Expected term (in years)	0.74		0.74		0.72
Expected annual dividends	—		—		—

September 2009 Financial Transactions (Tables)

12 Months Ended

Dec. 31, 2013

September 2009 Financial Transactions

Expenses and Losses (Gains) Related to September 2009 Financial Transactions

The table below sets forth the total expenses related to the September 2009 financial transactions for 2011:



	2011
	(in thousands)
Expenses and Losses (Gains):
Interest expense related to 2012 Notes	$	21,687
Change in fair value of embedded derivative related to 2012 Notes	(400		)
Change in fair value of free-standing derivatives related to the sale of milestone payments	17,201
Total September 2009 financial transaction expenses	$	38,488

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Schedule of components of income (loss) before provision for (benefit from) income taxes

The components of income (loss) before provision for (benefit from) income taxes during the three years ended December 31, 2013 consisted of the following:



	2013			2012			2011
	(in thousands)
United States	$	(390,009	)	$	256,816		$	343,515
Foreign	(586,108		)	(269,197		)	(283,070		)
Income (loss) before provision for (benefit from) income taxes	$	(976,117	)	$	(12,381	)	$	60,445

Schedule of components of provision for (benefit from) income taxes

The components of the provision for (benefit from) income taxes during the three years ended December 31, 2013 consisted of the following:



	2013			2012			2011
	(in thousands)
Current taxes:
United States	$	(11,420	)	$	2,057		$	22,275
Foreign	1,084			(1,865		)	(561		)
State	2,136			1,902			8,655
Total current taxes	$	(8,200	)	$	2,094		$	30,369
Deferred taxes:
United States	$	(131,281	)	$	31,308		$	19,629
Foreign	(127,587		)	—			(32,692		)
State	(21,499		)	5,352			1,960
Total deferred taxes	$	(280,367	)	$	36,660		$	(11,103	)
Provision for (benefit from) income taxes	$	(288,567	)	$	38,754		$	19,266

Reconciliation of the provision for (benefit from) income taxes



	2013			2012			2011
	(in thousands)
Income (loss) before provision for (benefit from) income taxes	$	(976,117	)	$	(12,381	)	$	60,445
Expected tax provision (benefit)	(341,641		)	(4,333		)	21,156
State taxes, net of federal benefit	(19,268		)	7,075			10,624
Foreign rate differential	72,961			62,425			43,629
Tax credits	(16,775		)	(1,980		)	(51,086		)
Unbenefited operating losses	(43,570		)	(30,364		)	(6,286		)
Non-deductible expenses	9,614			3,198			1,953
Rate change	50,076			3,275			—
Other	36			(542		)	(724		)
Provision for (benefit from) income taxes	$	(288,567	)	$	38,754		$	19,266

Schedule of unrecognized tax benefits

Unrecognized tax benefits during the two years ended December 31, 2013 consisted of the following:



	2013			2012
	(in thousands)
Unrecognized tax benefits beginning of year	$	4,106		$	4,360
Gross change for current year positions	1,325			598
Increase for prior period positions	—			—
Decrease for prior period positions	(290		)	—
Decrease due to settlements and payments	—			—
Decrease due to statute limitations	(185		)	(852		)
Deconsolidation of Alios	(2,932		)	—
Unrecognized tax benefits end of year	$	2,024		$	4,106

Schedule of deferred tax assets and liabilities



	As of December 31,
	2013			2012
	(in thousands)
Deferred tax assets:
Net operating loss	$	850,946		$	777,687
Tax credit carryforwards	180,380			147,074
Property and equipment	—			10,701
Intangible assets	26,105			63,353
Deferred revenues	25,158			44,867
Stock-based compensation	63,521			83,979
Inventories	26,278			56,564
Accrued expenses	52,470			27,945
Currency translation adjustment	217			—
Construction financing lease obligation	152,688			—
Gross deferred tax assets	1,377,763			1,212,170
Valuation allowance	(1,243,664		)	(1,211,561		)
Total deferred tax assets	134,099			609
Deferred tax liabilities:
Property and equipment	(134,099		)	—
Unrealized gain	—			(376		)
Contingent milestone and royalty payment obligation	—			(50,904		)
Acquired intangibles	—			(229,696		)
Net deferred tax liabilities	$	—		$	(280,367	)

Restructuring Expense (Tables)

12 Months Ended

Dec. 31, 2013

Restructuring and Related Activities [Abstract]

Restructuring and other liabilities

The activity related to restructuring and other liability for 2003 was as follows:



	Restructuring Expense		Cash Payments			Non-cash Expense			Liability as of December 31, 2003
	(in thousands)
Lease restructuring and other operating lease expense	$	84,726	$	(15,200	)	$	—		$	69,526
Employee severance, benefits and related costs	2,616		(2,616		)	—			—
Leasehold improvements and asset impairments	4,482		—			(4,482		)	—
Total	$	91,824	$	(17,816	)	$	(4,482	)	$	69,526

The activity related to 2003 restructuring for 2004 through 2013 was as follows:



	2013			2012			2011			2004-2013
	(in thousands)
Liability, beginning of the period	$	23,328		$	26,313		$	29,595		$	69,526
Cash payments	(15,255		)	(14,853		)	(14,904		)	(178,952		)
Cash received from subleases	10,670			10,024			9,548			75,708
Credit for portion of facility Vertex decided to occupy in 2005	—			—			—			(10,018		)
Restructuring expense	372			1,844			2,074			62,851
Liability, end of the period	$	19,115		$	23,328		$	26,313		$	19,115

Restructuring and related costs

The restructuring charges recorded during 2013 for each major type of cost associated with this restructuring plan were as follows:



	Restructuring Expense		Cash Payments			Non-cash Expense			Liability as of December 31, 2013
	(in thousands)
Employee severance, benefits and related costs	$	25,060	$	(21,458	)	$	(1,312	)	$	2,290
Asset impairments	6,282		—			(6,282		)	—
Contract termination and other associated costs	7,609		(1,458		)	—			6,151
Total	$	38,951	$	(22,916	)	$	(7,594	)	$	8,441

Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2013

Compensation and Retirement Disclosure [Abstract]

Matching contributions to the Vertex 401(k) Plan

The Company declared matching contributions paid in fully-vested interests in the Vertex common stock fund to the Vertex 401(k) Plan as follows:



	2013		2012		2011
	(in thousands)
Discretionary matching contributions during the year ended December 31,	$	5,930	$	10,261	$	8,619
Shares issued during the year ended December 31,	99		242		183
Shares issuable as of the year ended December 31,	0		53		62

Commitments (Tables)

12 Months Ended

Dec. 31, 2013

Commitments

Future minimum commitments under Fan Pier Leases and facilitiy operating leases with terms of more than one year, net of estimated sublease income



Year	Fan Pier Leases		Kendall Square Lease		Kendall Sublease Income			Other Operating Leases		Total Lease Commitments (Net of Sublease Income)
	(in thousands)
2014	$	67,206	$	19,879	$	(8,546	)	$	40,762	$	119,301
2015	67,206		19,879		(3,996		)	33,398		116,487
2016	67,206		19,879		—			14,434		101,519
2017	67,206		19,879		—			12,995		100,080
2018	67,206		6,626		—			12,841		86,673
Thereafter	752,798		—		—			75,344		828,142
Total minimum lease payments	$	1,088,828	$	86,142	$	(12,542	)	$	189,774	$	1,352,202

Schedule of future minimum lease payments for capital leases

The following table sets forth the Company’s future minimum payments due under capital leases as of December 31, 2013:



Year	(in thousands)
2014	$	19,957
2015	18,346
2016	11,809
2017	10,714
2018	10,612
Thereafter	2,121
Total payments	73,559
Less: amount representing interest	(7,912		)
Present value of payments	$	65,647

Segment Information (Tables)

12 Months Ended

Dec. 31, 2013

Segment Reporting [Abstract]

Revenues by Product

Product revenues, net consisted of the following:



	2013		2012		2011
	(in thousands)
INCIVEK	$	466,360	$	1,161,813	$	950,889
KALYDECO	371,285		171,645		—
Total product revenues, net	$	837,645	$	1,333,458	$	950,889

Revenues and Property and Equipment by Location

Property and equipment, net by location consisted of the following:



	As of December 31,
	2013		2012
	(in thousands)
United States	$	657,587	$	400,102
Outside of the United States
United Kingdom	29,970		30,622
Other	9,354		2,885
Total property and equipment, net outside of the United States	39,324		33,507
Total property and equipment, net	$	696,911	$	433,609



	2013		2012		2011
	(in thousands)
United States	$	896,952	$	1,373,516	$	1,389,568
Outside of the United States
Europe	279,557		129,786		20,289
Other	35,466		23,740		769
Total revenues outside of the United States	315,023		153,526		21,058
Total revenues	$	1,211,975	$	1,527,042	$	1,410,626

Significant Customers



	Percent of Total Gross Revenues						Percent of Gross Accounts Receivable
	Year Ended December 31,						As of December 31,
	2013		2012		2011		2013		2012
Janssen	22	%	<10	%	19	%	28	%	26	%
AmerisourceBergen Drug Corporation	21	%	32	%	25	%	<10	%	22	%
McKesson Corporation	21	%	29	%	24	%	<10	%	26	%
Cardinal Health Incorporated	<10	%	15	%	15	%	<10	%	<10	%
Bupa Home Healthcare Limited	<10	%	N/A		N/A		14	%	N/A

Quarterly Financial Data (unaudited) (Tables)

12 Months Ended

Dec. 31, 2013

Quarterly Financial Information Disclosure [Abstract]

Schedule of quarterly financial data



	Three Months Ended
	March 31, 2013			June 30, 2013			September 30, 2013			December 31, 2013
	(in thousands, except per share amounts)
Revenues:
Product revenues, net	$	267,381		$	254,789		$	186,653		$	128,822
Royalty revenues	43,573			49,120			27,012			36,887
Collaborative revenues (1)	17,414			6,841			8,035			185,448
Total revenues	328,368			310,750			221,700			351,157
Costs and expenses:
Cost of product revenues (2)	30,955			24,695			20,048			13,281
Royalty expenses	11,788			13,236			7,291			8,983
Research and development expenses	218,095			222,455			228,624			249,609
Sales, general and administrative expenses	92,879			106,521			87,754			75,188
Restructuring expenses	39			776			12,048			27,658
Intangible asset impairment charges (3)(4)	412,900			—			—			250,600
Total costs and expenses	766,656			367,683			355,765			625,319
Loss from operations	(438,288		)	(56,933		)	(134,065		)	(274,162		)
Interest expense, net	(3,465		)	(6,551		)	(95		)	(12,619		)
Other income (expense), net (4)	(1,187		)	(27		)	4,747			(53,472		)
Loss before benefit from income taxes	(442,940		)	(63,511		)	(129,413		)	(340,253		)
Benefit from income taxes (3)(4)	(130,313		)	(1,799		)	(751		)	(155,704		)
Net loss	(312,627		)	(61,712		)	(128,662		)	(184,549		)
Net loss attributable to noncontrolling interest (Alios)	4,611			4,547			4,530			228,834
Net income (loss) attributable to Vertex	$	(308,016	)	$	(57,165	)	$	(124,132	)	$	44,285
Net income (loss) per share attributable to Vertex common shareholders:
Basic	$	(1.43	)	$	(0.26	)	$	(0.54	)	$	0.19
Diluted	$	(1.43	)	$	(0.26	)	$	(0.54	)	$	0.19
Shares used in per share calculations:
Basic	215,421			222,053			230,505			231,264
Diluted	215,421			222,053			230,505			235,717



	Three Months Ended
	March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012
	(in thousands, except per share amounts)
Revenues:
Product revenues, net	$	375,375		$	373,273		$	303,501		$	281,309
Royalty revenues	38,981			33,480			25,586			43,451
Collaborative revenues	24,381			11,552			6,919			9,234
Total revenues	438,737			418,305			336,006			333,994
Costs and expenses:
Cost of product revenues (2)	25,918			104,549			30,680			75,595
Royalty expenses	13,293			9,874			7,856			12,120
Research and development expenses	196,371			196,544			200,161			213,109
Sales, general and administrative expenses	111,146			117,514			97,684			110,452
Restructuring expenses	360			594			696			194
Intangible asset impairment charge	—			—			—			—
Total costs and expenses	347,088			429,075			337,077			411,470
Income (loss) from operations	91,649			(10,770		)	(1,071		)	(77,476		)
Interest expense, net	(3,891		)	(3,814		)	(4,054		)	(3,263		)
Other income (expense), net	150			179			13			(33		)
Income (loss) before provision for (benefit from) income taxes	87,908			(14,405		)	(5,112		)	(80,772		)
Provision for (benefit from) income taxes	32			20,063			21,355			(2,696		)
Net income (loss)	87,876			(34,468		)	(26,467		)	(78,076		)
Net loss (income) attributable to noncontrolling interest (Alios)	3,714			(30,463		)	(31,076		)	1,928
Net income (loss) attributable to Vertex	$	91,590		$	(64,931	)	$	(57,543	)	$	(76,148	)
Net income (loss) per share attributable to Vertex common shareholders:
Basic	$	0.44		$	(0.31	)	$	(0.27	)	$	(0.35	)
Diluted	$	0.43		$	(0.31	)	$	(0.27	)	$	(0.35	)
Shares used in per share calculations:
Basic	208,018			211,344			213,767			214,607
Diluted	219,264			211,344			213,767			214,607


1.	During the fourth quarter of 2013, the Company recorded $182.4 million of collaborative revenue related to its Janssen collaboration, which was primarily attributable to an amendment to its collaboration agreement with Janssen. See Note B, "Collaborative Arrangements," for further information.


2.	During 2013 and 2012, the Company recorded within cost of product revenues lower-of-cost or market charges for excess or obsolete inventories. See Note G, "Inventories," for further information.


3.	During the first quarter of 2013, the Company recorded a $412.9 million intangible asset impairment charge related to its VX-222 indefinite-lived in-process research and development asset. In connection with this impairment charge, the Company recorded a credit of $127.6 million in its provision for income taxes. See Note J, "Intangible Assets and Goodwill," for further information.

Nature of Business and Accounting Policies (Details) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2013 USD ($) $ / shares	Sep. 30, 2013 USD ($) $ / shares	Jun. 30, 2013 USD ($) $ / shares	Mar. 31, 2013 USD ($) $ / shares	Dec. 31, 2012 USD ($) $ / shares	Sep. 30, 2012 USD ($) $ / shares	Jun. 30, 2012 USD ($) $ / shares	Mar. 31, 2012 USD ($) $ / shares	Dec. 31, 2013 USD ($) product $ / shares	Dec. 31, 2012 USD ($) $ / shares	Dec. 31, 2011 USD ($) $ / shares
Product revenues allowances and reserve categories
Gross product sales adjusted, related to prior period sales (percent)										0.70%	1.30%
Number of products (products) \| product									2
Net income (loss) attributable to Vertex common shareholders	$ 44,285	$ (124,132)	$ (57,165)	$ (308,016)	$ (76,148)	$ (57,543)	$ (64,931)	$ 91,590	$ (445,028)	$ (107,032)	$ 29,574
Basic EPS (usd per share) \| $ / shares	$ (0.19)	$ 0.54	$ 0.26	$ 1.43	$ 0.35	$ 0.27	$ 0.31	$ (0.44)	$ 1.98	$ 0.50	$ (0.14)
Cash, cash equivalents and marketable securities	$ 1,470,000								$ 1,470,000
Product revenues, net
Discount rate for payments made within 30 days (percent)									2.00%
Activity related to product revenues allowances and reserve categories
Beginning Balance				$ 75,393				$ 69,363	$ 75,393	$ 69,363	$ 0
Provision related to current period sales									250,944	294,025	123,618
Adjustments related to prior period sales									19,738	5,482
Credits/payments made									(258,942)	(293,477)	(54,255)
Ending Balance	87,133				$ 75,393				87,133	75,393	69,363
Trade Allowances
Activity related to product revenues allowances and reserve categories
Beginning Balance				5,416				11,162	5,416	11,162	0
Provision related to current period sales									31,395	55,913	38,228
Adjustments related to prior period sales									343	29
Credits/payments made									(35,619)	(61,688)	(27,066)
Ending Balance	1,535				5,416				1,535	5,416	11,162
Rebates, Chargebacks and Discounts
Activity related to product revenues allowances and reserve categories
Beginning Balance				63,560				52,659	63,560	52,659	0
Provision related to current period sales									204,459	216,942	75,145
Adjustments related to prior period sales									4,474	3,883
Credits/payments made									(204,249)	(209,924)	(22,486)
Ending Balance	68,244				63,560				68,244	63,560	52,659
Product Returns
Activity related to product revenues allowances and reserve categories
Beginning Balance				2,852				340	2,852	340	0
Provision related to current period sales									5,795	2,067	553
Adjustments related to prior period sales									15,149	1,498
Credits/payments made									(7,997)	(1,053)	(213)
Ending Balance	15,799				2,852				15,799	2,852	340
Other Incentives
Activity related to product revenues allowances and reserve categories
Beginning Balance				$ 3,565				$ 5,202	3,565	5,202	0
Provision related to current period sales									9,295	19,103	9,692
Adjustments related to prior period sales									(228)	72
Credits/payments made									(11,077)	(20,812)	(4,490)
Ending Balance	$ 1,555				$ 3,565				$ 1,555	$ 3,565	$ 5,202

Nature of Business and Accounting Policies (Details 2) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Sales, General and Administrative Expenses
Advertising Expenses	$ 19.6	$ 58.6	$ 30.8

Nature of Business and Accounting Policies (Details 3) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Foreign Currency Translation
Foreign currency translation adjustment, net of tax	$ (0.3)	$ (0.7)	$ (0.9)
Foreign currency transaction gain (loss), before tax	$ 5.1	$ (0.4)	$ 0.7
Building
Property and Equipment
Property and equipment useful life	40 years
Minimum \| Furniture and equipment
Property and Equipment
Property and equipment useful life	7 years
Minimum \| Computers and software
Property and Equipment
Property and equipment useful life	3 years
Maximum \| Furniture and equipment
Property and Equipment
Property and equipment useful life	10 years
Maximum \| Computers and software
Property and Equipment
Property and equipment useful life	5 years

Collaborative Arrangements (Details)
$ in Thousands

1 Months Ended

3 Months Ended

12 Months Ended

Jun. 30, 2011

USD ($)

Apr. 30, 2011

USD ($)

Dec. 31, 2013

USD ($)

lines

Sep. 30, 2013

USD ($)

Jun. 30, 2013

USD ($)

Mar. 31, 2013

USD ($)

Dec. 31, 2012

USD ($)

Sep. 30, 2012

USD ($)

Jun. 30, 2012

USD ($)

Mar. 31, 2012

USD ($)

Dec. 31, 2011

USD ($)

Sep. 30, 2011

USD ($)

Mar. 31, 2011

USD ($)

Sep. 30, 2009

USD ($)

Dec. 31, 2013

USD ($)

lines

payment

Dec. 31, 2012

USD ($)

Dec. 31, 2011

USD ($)

Dec. 31, 2006

USD ($)

Schedule of Collaborative Arrangements

$ 36,887

$ 27,012

$ 49,120

$ 43,573

$ 43,451

$ 25,586

$ 33,480

$ 38,981

$ 156,592

$ 141,498

$ 50,015

185,448

8,035

6,841

17,414

9,234

6,919

11,552

24,381

217,738

52,086

409,722

351,157

221,700

310,750

328,368

333,994

336,006

418,305

438,737

1,211,975

1,527,042

1,410,626

250,600

412,900

663,500

105,800

Provision for (benefit from) income taxes

(155,704)

(751)

(1,799)

(130,313)

(2,696)

21,355

20,063

(288,567)

38,754

19,266

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

(228,834)

(4,530)

(4,547)

(4,611)

(1,928)

31,076

30,463

(3,714)

(242,522)

55,897

11,605

Restricted cash and cash equivalents (Alios)

^[1]

69,983

^[1]

23,836

24,673

23,836

24,673

^[1]

696,911

433,609

696,911

433,609

Other assets

^[1]

2,432

9,668

2,432

9,668

Income taxes payable (Alios)

^[1]

49,327

101,292

49,327

101,292

Accrued expenses

^[1]

271,077

264,884

271,077

264,884

^[1]

715

Deferred tax liability

^[1]

280,367

Other liabilities, excluding current portion

^[1]

11,590

13,902

11,590

13,902

Redeemable noncontrolling interest (Alios)

^[1]

38,530

Noncontrolling interest (Alios)

^[1]

196,672

Schedule of Collaborative Arrangements

185,448

$ 8,035

$ 6,841

$ 17,414

9,234

$ 6,919

$ 11,552

$ 24,381

$ 217,738

52,086

409,722

Janssen

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

50.00%

Tiered royalty average range, as a percentage of net sales in the Janssen territories

20.00%

Up-front license payment

$ 165,000

Deferred revenue related to up-front license payment

5,000

32,100

$ 5,000

32,100

Total contingent milestone payments earned

350,000

Milestone payment earned pursuant to the collaborative agreement

$ 200,000

$ 50,000

130,724

117,592

20,289

Up-front and amendment payments revenues

190,345

12,428

Net reimbursement (payment) for telaprevir development costs

250,000

2,793

(3,507)

(8,418)

Reimbursement for manufacturing services

10,299

7,257

20,383

182,400

203,437

16,178

274,393

License fee paid upon amendment of agreement

334,161

133,770

294,682

152,000

Deferred revenue related to up-front license payment

5,000

32,100

5,000

32,100

250,000

Bupa Home Healthcare Limited

$ 182,400

203,437

16,178

274,393

Up-front and amendment payments revenues

12,744

38,232

Reimbursement for manufacturing services

485

68,515

5,650

14,928

License fee paid upon amendment of agreement

18,879

121,675

$ 105,000

Milestone payment received

$ 65,000

485

68,515

Cystic Fibrosis Foundation Therapeutics Incorporated

18,879

121,675

9,300

Milestone payment received

$ 14,300

17,000

13,700

$ 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

$ 9,300

14,300

17,000

13,700

Alios BioPharma, Inc

60,000

Up-front payment

$ 60,000

Development milestone payments, maximum

60,000

$ 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

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

Loss before provision for (benefit from) income taxes

$ 283,747

20,044

9,536

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

124,920

(114,970)

(69,950)

Provision for (benefit from) income taxes

(166,145)

39,029

48,809

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

242,522

(55,897)

(11,605)

Restricted cash and cash equivalents (Alios)

69,983

672

1,728

250,600

$ 250,600

250,600

$ 250,600

Other assets

861

Income taxes payable (Alios)

1,054

Accrued expenses

6,099

715

Deferred tax liability

152,781

Other liabilities, excluding current portion

910

Redeemable noncontrolling interest (Alios)

38,530

Noncontrolling interest (Alios)

$ 196,672

Research and Development Arrangement | Alios BioPharma, Inc

$ 250,600

250,600

Deconsolidation, Gain (Loss), Amount

102,100

68,200

Collaborative Arrangements, Upfront License Fees and Milestone Payments

$ 120,000

[1]

Net Income (Loss) Per Share Attributable to Vertex Common Shareholders (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Basic net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$ 44,285	$ (124,132)	$ (57,165)	$ (308,016)	$ (76,148)	$ (57,543)	$ (64,931)	$ 91,590	$ (445,028)	$ (107,032)	$ 29,574
Less: Undistributed earnings allocated to participating securities									0	0	(291)
Net income (loss) attributable to Vertex common shareholders—basic									$ (445,028)	$ (107,032)	$ 29,283
Weighted-average shares used to compute basic net income (loss) per common share (shares)	231,264	230,505	222,053	215,421	214,607	213,767	211,344	208,018	224,906	211,946	204,891
Basic net income (loss) attributable to Vertex per common share (usd per share)	$ 0.19	$ (0.54)	$ (0.26)	$ (1.43)	$ (0.35)	$ (0.27)	$ (0.31)	$ 0.44	$ (1.98)	$ (0.50)	$ 0.14
Diluted net income (loss) attributable to Vertex per common share calculation:
Net income (loss) attributable to Vertex common shareholders	$ 44,285	$ (124,132)	$ (57,165)	$ (308,016)	$ (76,148)	$ (57,543)	$ (64,931)	$ 91,590	$ (445,028)	$ (107,032)	$ 29,574
Less: Undistributed earnings allocated to participating securities									0	0	(285)
Net income (loss) attributable to Vertex common shareholders—diluted									$ (445,028)	$ (107,032)	$ 29,289
Weighted-average shares used to compute basic net income (loss) per common share (shares)	231,264	230,505	222,053	215,421	214,607	213,767	211,344	208,018	224,906	211,946	204,891
Effect of potentially dilutive securities:
Stock options (shares)									0	0	3,863
Other (shares)									0	0	53
Weighted-average shares used to compute diluted net income (loss) per common share (shares)	235,717	230,505	222,053	215,421	214,607	213,767	211,344	219,264	224,906	211,946	208,807
Diluted net income (loss) attributable to Vertex per common share (usd per share)	$ 0.19	$ (0.54)	$ (0.26)	$ (1.43)	$ (0.35)	$ (0.27)	$ (0.31)	$ 0.43	$ (1.98)	$ (0.50)	$ 0.14
Stock options
Effect of potentially dilutive securities:
Antidilutive securities excluded from computation of earnings per share (in shares)									15,729	19,726	9,626
Convertible senior subordinated notes
Effect of potentially dilutive securities:
Antidilutive securities excluded from computation of earnings per share (in shares)									0	8,192	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)									2,165	2,350	8

Fair Value Measurements (Details) - Recurring basis $ in Thousands	Dec. 31, 2013 USD ($)
Total
Financial assets carried at fair value:
Total	$ 1,151,466
Total \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	255,689
Total \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Marketable securities:	600,450
Total \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	83,493
Total \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	211,834
Level 1
Financial assets carried at fair value:
Total	856,139
Level 1 \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	255,689
Level 1 \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Marketable securities:	600,450
Level 1 \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	0
Level 1 \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	0
Level 2
Financial assets carried at fair value:
Total	295,327
Level 2 \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	0
Level 2 \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Marketable securities:	0
Level 2 \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	83,493
Level 2 \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	211,834
Level 3
Financial assets carried at fair value:
Total	0
Level 3 \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	0
Level 3 \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Marketable securities:	0
Level 3 \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	0
Level 3 \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	$ 0

Marketable Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012
Summary of cash, cash equivalents and marketable securities
Amortized Cost	$ 1,465,034	$ 1,321,019
Gross Unrealized Gains	136	217
Gross Unrealized Losses	(94)	(21)
Fair Value	1,465,076	1,321,215
Total cash and cash equivalents
Summary of cash, cash equivalents and marketable securities
Amortized Cost	569,299	489,407
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	569,299	489,407
Cash and money market funds
Summary of cash, cash equivalents and marketable securities
Amortized Cost	569,299	489,407
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	569,299	489,407
Total marketable securities
Summary of cash, cash equivalents and marketable securities
Amortized Cost	895,735	831,612
Gross Unrealized Gains	136	217
Gross Unrealized Losses	(94)	(21)
Fair Value	895,777	831,808
U.S. Treasury securities
Summary of cash, cash equivalents and marketable securities
Amortized Cost		111,350
Gross Unrealized Gains		2
Gross Unrealized Losses		(2)
Fair Value		111,350
Government-sponsored enterprise securities
Summary of cash, cash equivalents and marketable securities
Amortized Cost	600,496	440,181
Gross Unrealized Gains	7	49
Gross Unrealized Losses	(53)	(5)
Fair Value	600,450	440,225
Commercial paper (due within 1 year)
Summary of cash, cash equivalents and marketable securities
Amortized Cost	83,384	225,294
Gross Unrealized Gains	109	155
Gross Unrealized Losses	0	0
Fair Value	83,493	225,449
Corporate debt securities (due within 1 year)
Summary of cash, cash equivalents and marketable securities
Amortized Cost	189,674	15,429
Gross Unrealized Gains	14	1
Gross Unrealized Losses	(34)	(1)
Fair Value	189,654	15,429
Corporate debt securities (due after 1 year through 5 years)
Summary of cash, cash equivalents and marketable securities
Amortized Cost	22,181	39,358
Gross Unrealized Gains	6	10
Gross Unrealized Losses	(7)	(13)
Fair Value	$ 22,180	$ 39,355

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

Dec. 31, 2013

Dec. 31, 2012

Schedule of Available-for-sale Securities [Line Items]

Cash equivalents (Alios)

^[1]

$ 0

$ 69,983

Alios BioPharma, Inc

Schedule of Available-for-sale Securities [Line Items]

Cash equivalents (Alios)

^[1]

$ 70,000

Foreign currency forward contract

Schedule of Available-for-sale Securities [Line Items]

Derivative, Notional Amount

$ 17,500

[1]

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

12 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Accumulated Other Comprehensive Income (Loss) [Line Items]

Other comprehensive income (loss) before reclassifications

^[1]

$ (550)

244

Amounts reclassified from accumulated other comprehensive loss

Net current period other comprehensive income (loss)

244

$ 503

$ 14

^[1]

(306)

(550)

Accumulated Other Comprehensive Income (Loss) [Line Items]

Other comprehensive income (loss) before reclassifications

(746)

421

Amounts reclassified from accumulated other comprehensive loss

Net current period other comprehensive income (loss)

421

Unrealized holding gains on marketable securities

(325)

(746)

Accumulated Other Comprehensive Income (Loss) [Line Items]

Other comprehensive income (loss) before reclassifications

196

(154)

Amounts reclassified from accumulated other comprehensive loss

Net current period other comprehensive income (loss)

(154)

Unrealized losses on foreign currency forward contracts

196

Accumulated Other Comprehensive Income (Loss) [Line Items]

Other comprehensive income (loss) before reclassifications

(23)

Amounts reclassified from accumulated other comprehensive loss

Net current period other comprehensive income (loss)

(23)

$ (23)

$ 0

[1]

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 + Details

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

Dec. 31, 2013

Dec. 31, 2012

Inventory Disclosure [Abstract]

Raw materials

$ 489

$ 3,754

Work-in-process

9,981

11,317

Finished goods

3,677

15,393

Total

^[1]

$ 14,147

$ 30,464

[1]

Inventories-By Product (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Inventory Disclosure [Abstract]
Write-downs of inventories to net realizable value	$ 10,358	$ 133,189	$ 0
Write-down of inventories effect on net income (loss) per share (usd per share)	$ (0.05)	$ (0.61)

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

12 Months Ended

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Less: accumulated depreciation

$ 1,005,246

$ 730,294

(308,335)

(296,685)

Total property and equipment, net

^[1]

696,911

433,609

Capital leased assets, gross

76,400

30,100

Capital leases accumulated depreciation

3,800

1,100

Depreciation and amortization expense

47,300

35,700

$ 28,900

Building

506,056

Furniture and equipment

190,555

173,766

Leasehold improvements

163,019

123,770

Software

Less: accumulated depreciation

102,520

101,276

(500)

Total property and equipment, net

5,500

Computers

43,096

40,779

Construction-in-process

Total property and equipment, net

290,703

$ 506,100

$ 290,700

[1]

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

12 Months Ended

Dec. 31, 2011

leases

squarefeet

building

Dec. 31, 2013

USD ($)

Dec. 31, 2012

USD ($)

Number of leases (leases) | leases

Area of leased property (in square feet) | squarefeet

1.1

Number of buildings under lease agreement (buildings) | building

Construction financing lease obligation

^[1]

$ 696,911

$ 433,609

^[1]

440,937

268,031

Construction costs for Buildings at Gan Pier

$ 506,100

$ 290,700

Kendall Square Lease

Optional term of lease agreement (in years)

10 years

[1]

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

3 Months Ended

12 Months Ended

Dec. 31, 2013

Sep. 30, 2013

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2012

Sep. 30, 2012

Jun. 30, 2012

Mar. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Sep. 30, 2011

Dec. 31, 2010

Indefinite-Lived Intangible Assets [Line Items]

Deferred Tax Liabilities, Intangible Assets

^[1]

$ 0

$ 663,500,000

$ 0

$ 663,500,000

229,696,000

250,600,000

$ 0

$ 412,900,000

$ 0

663,500,000

$ 105,800,000

Indefinite-Lived Intangible Assets [Line Items]

^[1]

30,992,000

VX-222Asset

Deferred Tax Liabilities, Intangible Assets

127,600,000

412,900,000

Net increase to the Company's net loss per share related to the impairment charge (usd per share)

$ 127,600,000

$ 1.27

fair value of intangible asset

$ 0

Increase in net loss related to impairment charge

$ 285,300,000

Research and Development Arrangement | VX-222Asset

Indefinite-Lived Intangible Assets [Line Items]

Research and Development Arrangement | VX759Asset [Member]

412,900,000

$ 412,900,000

Indefinite-Lived Intangible Assets [Line Items]

$ 0

$ 105,800,000

105,800,000

Net increase to the Company's net loss per share related to the impairment charge (usd per share)

$ 32,700,000

$ 0.35

Increase in net loss related to impairment charge

$ 73,100,000

Alios Bio Pharma Inc

Indefinite-Lived Intangible Assets [Line Items]

Alios Bio Pharma Inc | Research and Development Arrangement

4,900,000

Indefinite-Lived Intangible Assets [Line Items]

$ 250,600,000

$ 250,600,000

250,600,000

Product revenue allowances

$ 102,100,000

[1]

Accrued Expenses and Other Liabilities, Current Portion (Details) - USD ($)
$ in Thousands

Dec. 31, 2013

Dec. 31, 2012

Accrued expenses

$ 85,510

$ 69,936

Payroll and benefits

76,785

62,140

Research, development and commercial contract costs

52,468

63,960

Royalty payable

18,334

29,007

Other

16,241

18,932

Professional fees

10,593

11,226

Taxes payable

8,362

2,182

Unrecognized tax benefits

2,784

4,106

Interest

3,395

Total

^[1]

271,077

264,884

Deferred rent

16,652

14,302

Customer deposits

7,692

Other

392

5,400

Total

^[1]

$ 24,736

$ 19,702

[1]

Convertible Senior Subordinated Notes (Details) - USD ($)

1 Months Ended

3 Months Ended

12 Months Ended

Sep. 30, 2010

Jun. 30, 2013

Dec. 31, 2013

Dec. 31, 2012

Convertible Senior Subordinated Notes

Convertible senior subordinated notes

^[1]

$ 0

$ 400,000,000

Additional shares issued (shares)

87,109

Convertible Senior Subordinated Notes 3.35 Percent Due 2015

Convertible Senior Subordinated Notes

Convertible senior subordinated notes

$ 400,000,000

Interest rate (as a percent)

3.35%

Net proceeds from convertible debt offering

$ 391,600,000

Underwriting discount

$ 8,400,000

Conversion price (in dollars per share)

$ 48.83

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

20.4794

Convertible debt principal amount, basis for exchange

$ 1,000

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

Redemption price (percent)

100.00%

Debt Conversion, Converted Instrument, Amount

$ 399,800,000

Stock Issued During Period, Shares, Conversion of Convertible Securities (shares)

8,188,448

Stock Redeemed or Called During Period, Value

$ 200,000

Redemption premium (in usd per share)

16.75

Interest expense

6,700,000

Offset to additional paid-in capital

$ 4,200,000

[1]

Common Stock, Preferred Stock and Equity Plans (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2013 USD ($) vote $ / shares shares	Dec. 31, 2012 USD ($) $ / shares shares	Dec. 31, 2011 USD ($) $ / shares
Share-based Compensation Arrangement by Share-based Payment Award
Common stock, shares authorized (shares)	300,000,000	300,000,000
Common stock, votes per share (votes per share) \| vote	1
Preferred stock, shares authorized (shares)	1,000,000	1,000,000
Awards Outstanding (shares)	17,894,079
Additional awards authorized for grant (in shares)	5,411,351
Grant price of outstanding restricted stock and restricted stock units (in dollars per share) \| $ / shares	$ 0.01	$ 0.01	$ 0.01
Outstanding and exercisable options
Stock options outstanding at beginning of period (in shares)	19,726,000
Stock options granted (in shares)	4,840,000
Stock options exercised (in shares)	(6,995,000)
Stock options forfeited (in shares)	(1,822,000)
Stock options expired (in shares)	(20,000)
Stock options outstanding at end of period (in shares)	15,729,000	19,726,000
Stock options exercisable at end of period (in shares)	7,950,000
Total exercisable or expected to vest, stock options (in shares)	14,967,000
Weighted average Exercise Price
Weighted-average exercise price outstanding at beginning of period (usd per share) \| $ / shares	$ 38.09
Weighted average exercise price, granted (usd per share) \| $ / shares	57.87
Weighted average exercise price, exercised (usd per share) \| $ / shares	35.28
Weighted average exercise price, forfeited (usd per share) \| $ / shares	46.89
Weighted average exercise price, expired (usd per share) \| $ / shares	46.64
Weighted-average exercise price outstanding at end of period (usd per share) \| $ / shares	44.40	$ 38.09
Weighted average exercise price exercisable at the end of the period (usd per share) \| $ / shares	38.84
Total exercisable or expected to vest, weighted average exercise price (usd per share) \| $ / shares	$ 43.95
Weighted-average Remaining Contractual Life
Weighted-average Remaining Contractual Life, outstanding (in years)	6 years 8 months 1 day
Weighted-average Remaining Contractual Life, exercisable (in years)	5 years 1 month 17 days
Weighted-average Remaining Contractual Life, total exercisable or expected to vest (in years)	6 years 6 months 22 days
Aggregate Intrinsic Value
Aggregate intrinsic value, outstanding \| $	$ 481,311
Aggregate intrinsic value, exercisable \| $	283,146
Aggregate intrinsic value, total exercisable or expected to vest \| $	$ 463,885
Total Intrinsic Value and Cash Received
Market price \| $ / shares	$ 74.21
Total intrinsic value of stock options exercised \| $	$ 291,600	$ 148,700	$ 90,500
Total cash received from employees as a result of employee stock option exercises \| $	$ 246,800	$ 172,800	$ 109,600
2013 Stock and Option Plan
Share-based Compensation Arrangement by Share-based Payment Award
Common stock, shares authorized (shares)	3,300,000
Awards Outstanding (shares)	1,170,827
Additional awards authorized for grant (in shares)	2,129,173
2006 Stock and Option Plan
Share-based Compensation Arrangement by Share-based Payment Award
Awards Outstanding (shares)	15,748,949
Additional awards authorized for grant (in shares)	3,282,178	3,000,000
1996 Stock and Option Plan
Share-based Compensation Arrangement by Share-based Payment Award
Awards Outstanding (shares)	974,303
Additional awards authorized for grant (in shares)	0
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award
Restricted stock, vested (in shares)	4 years

Common Stock, Preferred Stock and Equity Plans (Details 2) $ / shares in Units, $ in Millions	1 Months Ended	12 Months Ended
	Dec. 31, 2012 USD ($) $ / shares shares	Dec. 31, 2013 purchase_period $ / shares shares	Dec. 31, 2012 USD ($) $ / shares shares	Dec. 31, 2011 USD ($)
Stock options outstanding and exercisable
Exercise price range, options outstanding (in shares) \| shares		15,729,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)		6 years 8 months 1 day
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)		$ 44.40
Exercise price range, options exercisable (in shares) \| shares		7,950,000
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)		$ 38.84
Restricted stock
Restricted stock, as of the beginning of the period (in shares) \| shares		2,270,000
Restricted stock, granted (in shares) \| shares		1,356,000
Restricted stock, vested (in shares) \| shares		(800,000)
Restricted stock, cancelled (in shares) \| shares		(780,000)
Restricted stock, as of the end of the period (in shares) \| shares	2,270,000	2,046,000	2,270,000
Restricted stock, weighted-average grant-date fair value
Weighted-average grant-date fair value, as of the beginning of the period (in dollars per share)		$ 42.92
Weighted-average grant-date fair value, granted (in dollars per share)		62.16
Weighted-average grant-date fair value, vested (in dollars per share)		42.27
Weighted-average grant-date fair value, cancelled (in dollars per share)		51.47
Weighted-average grant-date fair value, as of the end of the period (in dollars per share)	$ 42.92	52.66	$ 42.92
Vested in period, total fair value \| $	$ 50.9		$ 41.1	$ 34.6
Range of Exercise Prices, $9.07-$20.00
Stock options outstanding and exercisable
Exercise price, low end of range (usd per share)		9.09
Exercise price, high end of range (usd per share)		$ 20.00
Exercise price range, options outstanding (in shares) \| shares		432,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)		2 years 4 months 13 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)		$ 15.37
Exercise price range, options exercisable (in shares) \| shares		432,000
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)		$ 15.37
Range of Exercise Prices, $20.01-$30.00
Stock options outstanding and exercisable
Exercise price, low end of range (usd per share)		20.01
Exercise price, high end of range (usd per share)		$ 30
Exercise price range, options outstanding (in shares) \| shares		1,055,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)		5 years 8 months 27 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)		$ 29.38
Exercise price range, options exercisable (in shares) \| shares		812,000
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)		$ 29.23
Range of Exercise Prices, $30.01-$40.00
Stock options outstanding and exercisable
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		6,842,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)		5 years 26 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)		$ 36.55
Exercise price range, options exercisable (in shares) \| shares		4,773,000
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)		$ 36.06
Range of Exercise Prices, $40.01-$50.00
Stock options outstanding and exercisable
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		4,136,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)		8 years 8 months 27 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)		$ 46.32
Exercise price range, options exercisable (in shares) \| shares		787,000
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)		$ 46.62
Range of Exercise Prices, $50.01-$60.00
Stock options outstanding and exercisable
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		1,713,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)		7 years 1 month 28 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)		$ 53.78
Exercise price range, options exercisable (in shares) \| shares		874,000
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)		$ 54.35
Price Range From Dollars $60.01-$70.00
Stock options outstanding and exercisable
Exercise price, low end of range (usd per share)		60.01
Exercise price, high end of range (usd per share)		$ 70.00
Exercise price range, options outstanding (in shares) \| shares		80,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)		9 years 29 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)		$ 65.54
Exercise price range, options exercisable (in shares) \| shares		14,000
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)		$ 63.20
Price Range From Dollars $70.01 to $80.00
Stock options outstanding and exercisable
Exercise price, low end of range (usd per share)		70.01
Exercise price, high end of range (usd per share)		$ 80.00
Exercise price range, options outstanding (in shares) \| shares		87,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)		9 years 3 months 22 days
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)		$ 77.55
Exercise price range, options exercisable (in shares) \| shares		9,000
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)		$ 77.73
Price Range From Dollars $80.01 to $88.18
Stock options outstanding and exercisable
Exercise price, low end of range (usd per share)		80.01
Exercise price, high end of range (usd per share)		$ 88.18
Exercise price range, options outstanding (in shares) \| shares		1,384,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)		9 years 6 months
Exercise price range, options outstanding, weighted-average exercise price (in dollars per share)		$ 83.11
Exercise price range, options exercisable (in shares) \| shares		249,000
Exercise price range, options exercisable, weighted-average exercise price (in dollars per share)		$ 82.13
Employee Stock Purchase Plan
Employee Stock Purchase Plan
Offering period		12 months
Number of purchase periods (purchase periods) \| purchase_period		2
Duration of purchase period		6 months
Eligible employee purchase price percentage of fair value		85.00%
Number of shares authorized (shares) \| shares		1,753,381
Number of shares (shares) \| shares		527,000
Average price paid per share (usd per share)		$ 36.21

Stock-based Compensation Expense (Details) - USD ($)	12 Months Ended
Stock-based Compensation Expense (Details) - USD ($)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	$ 127,303,000	$ 114,285,000	$ 118,226,000
Less: stock-based compensation expense capitalized to inventories	$ (1,048,000)	$ (1,254,000)	$ (1,042,000)
Weighted-average assumptions for options and ESPP subscriptions granted
Weighted average fair value (in dollars per share)	$ 62.16
Stock Options
Weighted-average assumptions for options and ESPP subscriptions granted
Expected annual dividends	$ 0
Employee Stock Purchase Plan
Weighted-average assumptions for options and ESPP subscriptions granted
Expected stock price volatility (as a percent)	54.69%	46.90%	51.32%
Risk-free interest rate (as a percent)	0.08%	0.16%	0.08%
Expected term of options (in years)	8 months 27 days	8 months 27 days	8 months 19 days
Expected annual dividends	$ 0	$ 0	$ 0
Weighted average fair value (in dollars per share)	$ 21.08	$ 12.90	$ 9.80
Stock options
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	$ 85,067,000	$ 79,047,000	$ 83,098,000
Type of award:
Unrecognized Expense Net of Estimated Forfeitures	$ 141,283,000
Weighted-average Recognition Period (in years)	2 years 6 months 22 days
Weighted-average grant-date fair value, granted (in dollars per share)	$ 25.79	$ 19.72	$ 20.88
Weighted-average assumptions for options and ESPP subscriptions granted
Expected stock price volatility (as a percent)	46.20%	47.93%	49.53%
Risk-free interest rate (as a percent)	1.25%	0.95%	2.09%
Expected term of options (in years)	5 years 9 months 22 days	5 years 9 months 11 days	5 years 8 months 27 days
Expected annual dividends	$ 0	$ 0	$ 0
Restricted stock and restricted stock units
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	36,479,000	29,194,000	30,708,000
Type of award:
Unrecognized Expense Net of Estimated Forfeitures	$ 73,490,000
Weighted-average Recognition Period (in years)	2 years 5 months 19 days
ESPP share issuances
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	$ 6,805,000	7,298,000	5,462,000
Type of award:
Unrecognized Expense Net of Estimated Forfeitures	$ 5,956,000
Weighted-average Recognition Period (in years)	8 months 1 day
Research and development expenses
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	$ 81,467,000	71,533,000	75,574,000
Sales, general and administrative expenses
Stock-based compensation expense:
Total stock-based compensation expense included in costs and expenses	$ 45,836,000	$ 42,752,000	$ 42,652,000

September 2009 Financial Transactions (Details) $ in Thousands	1 Months Ended		12 Months Ended
	Feb. 28, 2011 USD ($)	Sep. 30, 2009 USD ($) agreements	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Oct. 31, 2011 USD ($)
Expenses and Losses (Gains):
Change in fair value of free-standing derivatives related to the sale of milestone payments			$ 0	$ 0	$ 16,801
Olmsted Park S.A. [Member]
2012 Notes
Face amount of 2012 Notes		$ 155,000
Proceeds from issuance of 2012 Notes		$ 122,200
Proceeds from milestone payment related to the acceptance of Janssen's MAA	$ 50,000
Portion of 2012 Notes redeemed upon achievement of certain approval milestone pursuant to the Janssen collaboration	$ 50,000
Earned remaining milestone payment to be received in the fourth quarter of 2011						$ 105,000
Sale of Contingent Milestone Payments
Number of purchase agreements entered into related to sale of contingent launch milestone payments pursuant to the Janssen collaboration (agreements) \| agreements		2
Value of potential contingent launch milestone payments sold pursuant to the Janssen collaboration		$ 95,000
Proceeds from sale of potential contingent launch milestone payments pursuant to the Janssen collaboration		$ 32,800
Expenses and Losses (Gains):
Interest expense related to 2012 Notes					21,687
Change in fair value of embedded derivative related to 2012 Notes					(400)
Change in fair value of free-standing derivatives related to the sale of milestone payments					17,201
Total September 2009 financial transaction expenses					$ 38,488

Sale of HIV Protease Inhibitor Royalty Stream (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2008	Dec. 31, 2013
Sale of HIV Protease Inhibitor Royalty Stream
Gross proceeds from sale of royalty rights receivable from GlaxoSmithKline	$ 160.0
Deferred revenues related to the one-time cash payment agreement with GlaxoSmithKline		$ 63.5

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Components of income (loss) before provision for (benefit from) income taxes
United States									$ (390,009)	$ 256,816	$ 343,515
Foreign									(586,108)	(269,197)	(283,070)
Income (loss) before provision for (benefit from) income taxes	$ (340,253)	$ (129,413)	$ (63,511)	$ (442,940)	$ (80,772)	$ (5,112)	$ (14,405)	$ 87,908	(976,117)	(12,381)	60,445
Current taxes:
United States									(11,420)	2,057	22,275
Foreign									1,084	(1,865)	(561)
State									2,136	1,902	8,655
Total current taxes									(8,200)	2,094	30,369
Deferred taxes:
United States									(131,281)	31,308	19,629
Foreign									(127,587)	0	(32,692)
State									(21,499)	5,352	1,960
Total deferred taxes									(280,367)	36,660	(11,103)
Provision for (benefit from) income taxes	$ (155,704)	$ (751)	$ (1,799)	$ (130,313)	$ (2,696)	$ 21,355	$ 20,063	$ 32	$ (288,567)	$ 38,754	$ 19,266

Income Taxes (Details 2) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
Income Taxes (Details 2) - USD ($) $ in Thousands	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Tax Carryforwards
Unrecognized Tax Benefits, Reduction Resulting from Lapse of Applicable Statute of Limitations and Settlements with Taxing Authorities, Estimated in Next Fiscal Year	$ 500								$ 500
Federal statutory income tax rate (percent)									35.00%	35.00%	35.00%
Reconciliation of Income Tax Expense:
Income (loss) before provision for (benefit from) income taxes	(340,253)	$ (129,413)	$ (63,511)	$ (442,940)	$ (80,772)	$ (5,112)	$ (14,405)	$ 87,908	$ (976,117)	$ (12,381)	$ 60,445
Expected tax provision (benefit)									(341,641)	(4,333)	21,156
State taxes, net of federal benefit									(19,268)	7,075	10,624
Foreign rate differential									72,961	62,425	43,629
Tax credits									(16,775)	(1,980)	(51,086)
Unbenefited operating losses									(43,570)	(30,364)	(6,286)
Non-deductible expenses									9,614	3,198	1,953
Rate change									50,076	3,275	0
Other									36	(542)	(724)
Provision for (benefit from) income taxes	(155,704)	$ (751)	$ (1,799)	(130,313)	(2,696)	$ 21,355	$ 20,063	32	(288,567)	38,754	19,266
Federal net operating loss carryforward	694,800								694,800
Reconciliation of unrecognized tax benefits
Unrecognized tax benefits beginning of year				$ 4,106				$ 4,360	4,106	4,360
Gross change for current year positions									1,325	598
Increase for prior period positions									0	0
Decrease for prior period positions									(290)	0
Decrease due to settlements and payments									0	0
Decrease due to statute limitations									(185)	(852)
Deconsolidation of Alios									(2,932)	0
Unrecognized tax benefits end of year	2,024				4,106				2,024	4,106	$ 4,360
Deferred tax assets:
Net operating loss	850,946				777,687				850,946	777,687
Tax credit carryforwards	180,380				147,074				180,380	147,074
Property and equipment	0				10,701				0	10,701
Intangible assets	26,105				63,353				26,105	63,353
Deferred revenues	25,158				44,867				25,158	44,867
Stock-based compensation	63,521				83,979				63,521	83,979
Inventories	26,278				56,564				26,278	56,564
Accrued expenses	52,470				27,945				52,470	27,945
Currency translation adjustment	217				0				217	0
Construction financing lease obligation	152,688				0				152,688	0
Gross deferred tax assets	1,377,763				1,212,170				1,377,763	1,212,170
Valuation allowance	(1,243,664)				(1,211,561)				(1,243,664)	(1,211,561)
Total deferred tax assets	134,099				609				134,099	609
Property and equipment	(134,099)				0				(134,099)	0
Deferred tax liabilities:
Unrealized gain	0				(376)				0	(376)
Contingent milestone and royalty payment obligation	0				(50,904)				0	(50,904)
Acquired intangibles	0				(229,696)				0	(229,696)
Net deferred tax liabilities	0				$ (280,367)				0	$ (280,367)
Decreased in valuation allowance									(32,100)
Federal
Reconciliation of Income Tax Expense:
Operating Loss	2,700,000								2,700,000
Tax Credit	120,100								120,100
State
Reconciliation of Income Tax Expense:
Operating Loss	966,800								966,800
Tax Credit	66,900								66,900
Federal net operating loss carryforward	$ 204,500								$ 204,500

Restructuring Expense (Details) $ in Thousands	1 Months Ended		3 Months Ended								12 Months Ended					108 Months Ended
Restructuring Expense (Details) $ in Thousands	Jun. 30, 2003 squarefeet	Jan. 31, 2003	Dec. 31, 2013 USD ($)	Sep. 30, 2013 USD ($)	Jun. 30, 2013 USD ($)	Mar. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Sep. 30, 2012 USD ($)	Jun. 30, 2012 USD ($)	Mar. 31, 2012 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2006 squarefeet	Dec. 31, 2003 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2010 USD ($)
Kendall Square Lease
Restructuring Expense			$ 27,658	$ 12,048	$ 776	$ 39	$ 194	$ 696	$ 594	$ 360	$ 40,521	$ 1,844	$ 2,074		$ 91,824
Cash Payments															(17,816)
Non-cash Expense															(4,482)
Restructuring Liability															69,526
Lease restructuring expense															78,700
Lease operating expense															6,000
Lease restructuring and other operating lease expense
Kendall Square Lease
Restructuring Expense															84,726
Cash Payments															(15,200)
Non-cash Expense															0
Restructuring Liability															69,526
Employee severance, benefits and related costs
Kendall Square Lease
Restructuring Expense															2,616
Cash Payments															(2,616)
Non-cash Expense															0
Restructuring Liability															0
Leasehold improvements and asset impairments
Kendall Square Lease
Restructuring Expense															4,482
Cash Payments															0
Non-cash Expense															(4,482)
Restructuring Liability															$ 0
Kendall Square Facility
Kendall Square Lease
Leased area (in square feet) \| squarefeet	290,000
Lease term (in years)		15 years
Occupied leased area (in square feet) \| squarefeet														120,000
Discount rate, lease restructuring liability (as a percent)															10.00%
Fan Pier Move
Kendall Square Lease
Restructuring Expense											1,200
2003 Restructuring
Kendall Square Lease
Restructuring Expense											372	1,844	2,074			$ 62,851
Cash Payments											(15,255)	(14,853)	(14,904)			(178,952)
Restructuring Liability			$ 19,115				$ 23,328				$ 19,115	$ 23,328	$ 26,313		$ 69,526	$ 23,328	$ 29,595

Restructuring Expense (Details 2) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended				108 Months Ended
Restructuring Expense (Details 2) - USD ($) $ in Thousands	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2003	Dec. 31, 2012
Restructuring activities
Liability, beginning of the period													$ 69,526
Cash Payments												$ (17,816)
Restructuring Expense	$ 27,658	$ 12,048	$ 776	$ 39	$ 194	$ 696	$ 594	$ 360	$ 40,521	$ 1,844	$ 2,074	91,824
Liability, end of the period												69,526
2003 Restructuring
Restructuring activities
Liability, beginning of the period				$ 23,328				$ 26,313	23,328	26,313	29,595		69,526
Cash Payments									(15,255)	(14,853)	(14,904)		(178,952)
Cash received from subleases									10,670	10,024	9,548		75,708
Credit for portion of facility Vertex decided to occupy in 2005									0	0	0		(10,018)
Restructuring Expense									372	1,844	2,074		62,851
Liability, end of the period	$ 19,115				$ 23,328				$ 19,115	$ 23,328	$ 26,313	$ 69,526	$ 23,328

Restructuring Expense-Strategic Restructuring (Details) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2013 USD ($) ft²	Sep. 30, 2013 USD ($)	Jun. 30, 2013 USD ($)	Mar. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Sep. 30, 2012 USD ($)	Jun. 30, 2012 USD ($)	Mar. 31, 2012 USD ($)	Dec. 31, 2015 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($) ft²	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($)	Dec. 31, 2003 USD ($)
Restructuring Cost and Reserve [Line Items]
Expected restructuring charges									$ 500	$ 7,900
Restructuring Expense	$ 27,658	$ 12,048	$ 776	$ 39	$ 194	$ 696	$ 594	$ 360			$ 40,521	$ 1,844	$ 2,074	$ 91,824
Cash Payments														(17,816)
Non-cash Expense											$ 7,594	$ 0	$ 0
Restructuring Liability														$ 69,526
Area of Real Estate Property \| ft²	120,000										120,000
Minimum
Restructuring Cost and Reserve [Line Items]
Expected restructuring charges											$ 2,000
Maximum
Restructuring Cost and Reserve [Line Items]
Expected restructuring charges											2,500
2013 Restructuring Plan
Restructuring Cost and Reserve [Line Items]
Restructuring Expense											38,951
Cash Payments											(22,916)
Non-cash Expense											(7,594)
Restructuring Liability	$ 8,441										8,441
2013 Restructuring Plan \| Employee severance, benefits and related costs
Restructuring Cost and Reserve [Line Items]
Restructuring Expense											25,060
Cash Payments											(21,458)
Non-cash Expense											(1,312)
Restructuring Liability	2,290										2,290
2013 Restructuring Plan \| Asset impairments
Restructuring Cost and Reserve [Line Items]
Restructuring Expense											6,282
Cash Payments											0
Non-cash Expense											(6,282)
Restructuring Liability	0										0
2013 Restructuring Plan \| Contract termination and other associated costs
Restructuring Cost and Reserve [Line Items]
Restructuring Expense											7,609
Cash Payments											(1,458)
Non-cash Expense											0
Restructuring Liability	$ 6,151										$ 6,151

Employee Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
Employee Benefits (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Compensation and Retirement Disclosure [Abstract]
Compensation and Employee Benefit Plans [Text Block]	$ 2,400
Maximum percentage of annual compensation contributed by the participant (as a percent)	60.00%
Common stock shares remained available for grant (shares)	755,000
Matching contributions to the Vertex 401(k) Plan:
Discretionary matching contributions during the year ended December 31,	$ 5,930	$ 10,261	$ 8,619
Shares issued during the year ended December 31 (shares)	99,000	242,000	183,000
Shares issuable as of the year ended December 31 (shares)	0	53,000	62,000
Contributions by employer	$ 5,000

Commitments (Details) $ in Thousands	12 Months Ended
Commitments (Details) $ in Thousands	Dec. 31, 2013 USD ($) squarefeet	Dec. 31, 2012 USD ($)	Dec. 31, 2011 USD ($) leases
Operating lease
Number of leases (leases) \| leases			2
Future minimum commitments under facility leases commitments with terms of more than one year
2014	$ 119,301
2015	116,487
2016	101,519
2017	100,080
2018	86,673
Thereafter	828,142
Total minimum lease payments	1,352,202
Future minimum sublease income
2014	(8,546)
2015	(3,996)
2016	0
2017	0
2018	0
Thereafter	0
Total minimum lease payments	(12,542)
Rental expense	57,700	$ 57,100	$ 49,400
Fan Pier Leases
Future minimum commitments under facility leases commitments with terms of more than one year
2014	67,206
2015	67,206
2016	67,206
2017	67,206
2018	67,206
Thereafter	752,798
Total minimum lease payments	$ 1,088,828
Kendall Square Lease
Operating lease
Optional term of lease agreement (in years)			10 years
Office space used for operation (in square feet) \| squarefeet	120,000
Future minimum commitments under facility leases commitments with terms of more than one year
2014	$ 19,879
2015	19,879
2016	19,879
2017	19,879
2018	6,626
Thereafter	0
Total minimum lease payments	86,142
Other Operating Leases
Future minimum commitments under facility leases commitments with terms of more than one year
2014	40,762
2015	33,398
2016	14,434
2017	12,995
2018	12,841
Thereafter	75,344
Total minimum lease payments	$ 189,774
Minimum
Future minimum sublease income
Effective interest rate (percentage)	2.00%
Maximum
Future minimum sublease income
Effective interest rate (percentage)	7.00%

Commitments Capital Lease Financing Obligations (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Jun. 30, 2013
Capital Leases, Future Minimum Payments Due [Abstract]
2014	$ 19,957
2015	18,346
2016	11,809
2017	10,714
2018	10,612
Thereafter	2,121
Total payments	73,559
Less: amount representing interest	(7,912)
Present value of payments	$ 65,647
Letter of credit, amount outstanding				$ 31,900
Term of letter of credit	1 year
Decrease in restricted cash	$ (31,804)	$ (2,156)	$ 0

Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
Segment Information (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Revenues from external customers
Product revenues, net	$ 128,822	$ 186,653	$ 254,789	$ 267,381	$ 281,309	$ 303,501	$ 373,273	$ 375,375	$ 837,645	$ 1,333,458	$ 950,889
Total revenues	351,157	$ 221,700	$ 310,750	$ 328,368	333,994	$ 336,006	$ 418,305	$ 438,737	1,211,975	1,527,042	1,410,626
Property and equipment, net	696,911				433,609				696,911	433,609
United States
Revenues from external customers
Total revenues									896,952	1,373,516	1,389,568
Property and equipment, net	657,587				400,102				657,587	400,102
Europe [Member]
Revenues from external customers
Total revenues									279,557	129,786	20,289
Outside of the United States
Revenues from external customers
Total revenues									315,023	153,526	21,058
Property and equipment, net	39,324				33,507				39,324	33,507
United Kingdom
Revenues from external customers
Property and equipment, net	29,970				30,622				29,970	30,622
Other
Revenues from external customers
Total revenues									35,466	23,740	$ 769
Property and equipment, net	$ 9,354				$ 2,885				$ 9,354	$ 2,885
Minimum \| Revenues, Net
Revenues from external customers
Concentration risk (less than 10% for Cardinal health, Janssen and Mitsubishi Tanabe) (percentage)									10.00%	10.00%
Minimum \| Accounts Receivable
Revenues from external customers
Threshold for disclosure percentage	10.00%				10.00%				10.00%	10.00%
Credit Concentration Risk \| Janssen \| Revenues, Net
Revenues from external customers
Concentration risk (less than 10% for Cardinal health, Janssen and Mitsubishi Tanabe) (percentage)									22.00%	10.00%	19.00%
Credit Concentration Risk \| Janssen \| Accounts Receivable
Revenues from external customers
Concentration risk (less than 10% for Cardinal health, Janssen and Mitsubishi Tanabe) (percentage)									28.00%	26.00%
Credit Concentration Risk \| AmerisourceBergen Drug Corporation \| Revenues, Net
Revenues from external customers
Concentration risk (less than 10% for Cardinal health, Janssen and Mitsubishi Tanabe) (percentage)									21.00%	32.00%	25.00%
Credit Concentration Risk \| AmerisourceBergen Drug Corporation \| Accounts Receivable
Revenues from external customers
Concentration risk (less than 10% for Cardinal health, Janssen and Mitsubishi Tanabe) (percentage)									10.00%	22.00%
Credit Concentration Risk \| McKesson Corporation \| Revenues, Net
Revenues from external customers
Concentration risk (less than 10% for Cardinal health, Janssen and Mitsubishi Tanabe) (percentage)									21.00%	29.00%	24.00%
Credit Concentration Risk \| McKesson Corporation \| Accounts Receivable
Revenues from external customers
Concentration risk (less than 10% for Cardinal health, Janssen and Mitsubishi Tanabe) (percentage)									10.00%	26.00%
Credit Concentration Risk \| Cardinal Health Incorporated \| Revenues, Net
Revenues from external customers
Concentration risk (less than 10% for Cardinal health, Janssen and Mitsubishi Tanabe) (percentage)									10.00%	15.00%	15.00%
Credit Concentration Risk \| Cardinal Health Incorporated \| Accounts Receivable
Revenues from external customers
Concentration risk (less than 10% for Cardinal health, Janssen and Mitsubishi Tanabe) (percentage)									10.00%	10.00%
Credit Concentration Risk \| Bupa Home Healthcare Limited \| Revenues, Net
Revenues from external customers
Concentration risk (less than 10% for Cardinal health, Janssen and Mitsubishi Tanabe) (percentage)									10.00%	10.00%
Credit Concentration Risk \| Bupa Home Healthcare Limited \| Accounts Receivable
Revenues from external customers
Concentration risk (less than 10% for Cardinal health, Janssen and Mitsubishi Tanabe) (percentage)									14.00%
INCIVEK
Revenues from external customers
Product revenues, net									$ 466,360	$ 1,161,813	$ 950,889
KALYDECO
Revenues from external customers
Product revenues, net									$ 371,285	$ 171,645	$ 0

Quarterly Financial Data (unaudited) (Details) - USD ($)
$ / shares in Units, shares in Thousands, $ in Thousands

3 Months Ended

12 Months Ended

Dec. 31, 2013

Sep. 30, 2013

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2012

Sep. 30, 2012

Jun. 30, 2012

Mar. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Dec. 31, 2003

Revenues:

Product revenues, net

$ 128,822

$ 186,653

$ 254,789

$ 267,381

$ 281,309

$ 303,501

$ 373,273

$ 375,375

$ 837,645

$ 1,333,458

$ 950,889

Collaborative revenues (1)

36,887

27,012

49,120

43,573

43,451

25,586

33,480

38,981

156,592

141,498

50,015

185,448

8,035

6,841

17,414

9,234

6,919

11,552

24,381

217,738

52,086

409,722

Cost of product revenues (2)

351,157

221,700

310,750

328,368

333,994

336,006

418,305

438,737

1,211,975

1,527,042

1,410,626

Costs and expenses:

13,281

20,048

24,695

30,955

75,595

30,680

104,549

25,918

88,979

236,742

63,625

Royalty expenses

8,983

7,291

13,236

11,788

12,120

7,856

9,874

13,293

41,298

43,143

16,880

Research and development expenses

249,609

228,624

222,455

218,095

213,109

200,161

196,544

196,371

918,783

806,185

707,706

Sales, general and administrative expenses

75,188

87,754

106,521

92,879

110,452

97,684

117,514

111,146

362,342

436,796

400,721

Restructuring expenses

27,658

12,048

776

194

696

594

360

40,521

1,844

2,074

$ 91,824

Income (loss) from operations

250,600

412,900

663,500

105,800

Total costs and expenses

625,319

355,765

367,683

766,656

411,470

337,077

429,075

347,088

2,115,423

1,524,710

1,296,806

(274,162)

(134,065)

(56,933)

(438,288)

(77,476)

(1,071)

(10,770)

91,649

(903,448)

2,332

113,820

Interest expense, net

(12,619)

(95)

(6,551)

(3,465)

(3,263)

(4,054)

(3,814)

(3,891)

(22,730)

(15,022)

(37,681)

Interest expense

(33)

179

150

Other income (expense), net

53,472

(4,747)

1,187

Income (loss) before provision for (benefit from) income taxes

(340,253)

(129,413)

(63,511)

(442,940)

(80,772)

(5,112)

(14,405)

87,908

(976,117)

(12,381)

60,445

Benefit from income taxes (3)(4)

(155,704)

(751)

(1,799)

(130,313)

(2,696)

21,355

20,063

(288,567)

38,754

19,266

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

(184,549)

(128,662)

(61,712)

(312,627)

(78,076)

(26,467)

(34,468)

87,876

(687,550)

(51,135)

41,179

228,834

4,530

4,547

4,611

1,928

(31,076)

(30,463)

3,714

242,522

(55,897)

(11,605)

Net income (loss) attributable to Vertex

$ 44,285

$ (124,132)

$ (57,165)

$ (308,016)

$ (76,148)

$ (57,543)

$ (64,931)

$ 91,590

$ (445,028)

$ (107,032)

$ 29,574

Net income (loss) per share attributable to Vertex common shareholders:

Basic (usd per share)

$ 0.19

$ (0.54)

$ (0.26)

$ (1.43)

$ (0.35)

$ (0.27)

$ (0.31)

$ 0.44

$ (1.98)

$ (0.50)

$ 0.14

Diluted (usd per share)

$ 0.19

$ (0.54)

$ (0.26)

$ (1.43)

$ (0.35)

$ (0.27)

$ (0.31)

$ 0.43

$ (1.98)

$ (0.50)

$ 0.14

Shares used in per share calculations:

Basic (shares)

231,264

230,505

222,053

215,421

214,607

213,767

211,344

208,018

224,906

211,946

204,891

Diluted (shares)

235,717

230,505

222,053

215,421

214,607

213,767

211,344

219,264

224,906

211,946

208,807

Write-downs of inventories to net realizable value

$ 10,358

$ 133,189

$ 0

Write-down of inventories effect on net income (loss) per share (usd per share)

$ (0.05)

$ (0.61)

^[1]

$ 0

$ 663,500

$ 0

$ 663,500

Janssen

Revenues:

Collaborative revenues (1)

130,724

117,592

20,289

182,400

203,437

16,178

274,393

Benefit from income taxes (3)(4)

334,161

133,770

294,682

Alios Bio Pharma Inc

Costs and expenses:

(166,145)

39,029

48,809

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

(242,522)

55,897

11,605

Research and Development Arrangement | Alios Bio Pharma Inc

Costs and expenses:

Shares used in per share calculations:

$ 250,600