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Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Dec. 31, 2014	Jan. 31, 2015	Jun. 30, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	VERTEX PHARMACEUTICALS INC / MA
Entity Central Index Key	0000875320
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Public Float			$ 22.4
Entity Common Stock, Shares Outstanding (shares)		242,088,884
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenues:
Product revenues, net	$ 487,821	$ 837,645	$ 1,333,458
Royalty revenues	40,919	156,592	141,498
Collaborative revenues	51,675	217,738	52,086
Total revenues	580,415	1,211,975	1,527,042
Costs and expenses:
Cost of product revenues	39,725	88,979	236,742
Royalty expenses	21,262	41,298	43,143
Research and development expenses	855,506	882,097	765,905
Sales, general and administrative expenses	305,409	356,188	432,681
Restructuring expenses	50,925	40,521	1,844
Intangible asset impairment charges	0	412,900	0
Total costs and expenses	1,272,827	1,821,983	1,480,315
(Loss) income from operations	(692,412)	(610,008)	46,727
Interest expense, net	(72,863)	(22,926)	(15,040)
Other income, net	30,400	6,890	309
(Loss) income from continuing operations before provision for (benefit from) income taxes	(734,875)	(626,044)	31,996
Provision for (benefit from) income taxes	6,958	(122,422)	(275)
(Loss) income from continuing operations	(741,833)	(503,622)	32,271
Loss from discontinued operations, net of tax (benefit) provision of $0, $(166,145) and $39,029, respectively	(912)	(183,928)	(83,406)
Net loss	(742,745)	(687,550)	(51,135)
Loss (income) from discontinued operations attributable to noncontrolling interest	0	242,522	(55,897)
Loss attributable to noncontrolling interest	4,190	0	0
Net loss attributable to Vertex	(738,555)	(445,028)	(107,032)
(Loss) income from continuing operations	(737,643)	(503,622)	32,271
(Loss) income from discontinued operations	$ (912)	$ 58,594	$ (139,303)
Net (loss) income from continuing operations:
Net (loss) income from continuing operations, basic (usd per share)	$ (3.14)	$ (2.24)	$ 0.15
Net (loss) income from continuing operations, diluted (usd per share)	(3.14)	(2.24)	0.15
Net income (loss) from discontinued operations:
Net (loss) income from discontinuing operations, basic (usd per share)	0.00	0.26	(0.65)
Net (loss) income from discontinuing operations, diluted (usd per share)	0.00	0.26	(0.65)
Net loss:
Basic (usd per share)	(3.14)	(1.98)	(0.50)
Diluted (usd per share)	$ (3.14)	$ (1.98)	$ (0.50)
Shares used in per share calculations:
Basic (in shares)	235,307	224,906	211,946
Diluted (in shares)	235,307	224,906	215,262

Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Statement [Abstract]
Tax effect of discontinued operations	$ 0	$ (166,145)	$ 39,029

Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest [Abstract]
Net loss	$ (742,745)	$ (687,550)	$ (51,135)
Changes in other comprehensive loss:
Unrealized holding (losses) gains on marketable securities	(165)	(154)	305
Unrealized gains (losses) on foreign currency forward contracts	2,034	(23)	0
Foreign currency translation adjustment	(646)	421	198
Net current period other comprehensive (loss) income	1,223	244	503
Comprehensive loss	(741,522)	(687,306)	(50,632)
Comprehensive loss attributable to noncontrolling interest	4,190	0	0
Comprehensive loss attributable to Vertex	$ (737,332)	$ (687,306)	$ (50,632)

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 625,259	$ 569,299
Marketable securities, available for sale	761,847	895,777
Accounts receivable, net	75,964	85,517
Inventories	30,848	14,147
Prepaid expenses and other current assets	52,593	23,836
Total current assets	1,546,511	1,588,576
Property and equipment, net	715,812	696,911
Intangible assets	29,000	0
Goodwill	39,915	30,992
Other assets	3,441	2,562
Total assets	2,334,679	2,319,041
Current liabilities:
Accounts payable	71,194	49,327
Accrued expenses	209,676	271,077
Deferred revenues, current portion	17,468	21,510
Accrued restructuring expense, current portion	33,107	14,286
Capital lease obligations, current portion	17,806	16,893
Senior secured term loan, current portion	14,206	0
Other liabilities, current portion	4,797	24,736
Total current liabilities	368,254	397,829
Deferred revenues, excluding current portion	27,808	49,459
Accrued restructuring expense, excluding current portion	12,748	14,067
Capital lease obligations, excluding current portion	39,293	48,754
Deferred tax liability	15,044	0
Construction financing lease obligation, excluding current portion	473,073	440,937
Senior secured term loan, excluding current portion	280,569	0
Other liabilities, excluding current portion	21,707	11,590
Total liabilities	1,238,496	962,636
Commitments and contingencies
Shareholders’ equity:
Preferred stock, $0.01 par value; 1,000,000 shares authorized; none issued and outstanding at December 31, 2014 and 2013	0	0
Common stock, $0.01 par value; 300,000,000 shares authorized at December 31, 2014 and 2013; 241,764,398 and 233,788,852 shares issued and outstanding at December 31, 2014 and 2013, respectively	2,385	2,320
Additional paid-in capital	5,777,154	5,321,286
Accumulated other comprehensive income (loss)	917	(306)
Accumulated deficit	(4,705,450)	(3,966,895)
Total Vertex shareholders’ equity	1,075,006	1,356,405
Noncontrolling interest	21,177	0
Total shareholders’ equity	1,096,183	1,356,405
Total liabilities and shareholders’ equity	$ 2,334,679	$ 2,319,041

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	241,764,398	233,788,852
Common stock, shares outstanding	241,764,398	233,788,852

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	Redeemable Noncontrolling Interest
Balance (shares) at Dec. 31, 2011			209,304
Balance at Dec. 31, 2011	$ 928,476	$ 786,843	$ 2,072	$ 4,200,659	$ (1,053)	$ (3,414,835)	$ 141,633	$ 37,036
Increase (Decrease) in Stockholders' Equity
Unrealized holding gains on marketable securities	305	305			305
Unrealized gains (losses) on foreign currency forward contracts	0
Foreign currency translation adjustment	198	198			198
Net income (loss) attributable to Vertex common shareholders	(107,032)					(107,032)
Net income (loss)	$ (51,135)	(107,032)					55,897
Issuances of common stock:
Benefit plans (shares)	242		7,983
Issuance of common stock under benefit plans	$ 201,992	201,837	$ 77	201,760			155
Stock-based compensation expense	115,539	115,058		115,058			481
Tax benefit from equity compensation	1,971	1,971		1,971
Change in liquidation value of noncontrolling interest	1,494						1,494	1,494
Balance at Dec. 31, 2012	1,195,852	999,180	$ 2,149	4,519,448	(550)	(3,521,867)	196,672	38,530
Balance (shares) at Dec. 31, 2012			217,287
Increase (Decrease) in Stockholders' Equity
Unrealized holding gains on marketable securities	(154)	(154)			(154)
Unrealized gains (losses) on foreign currency forward contracts	(23)	(23)			(23)
Foreign currency translation adjustment	421	421			421
Net income (loss) attributable to Vertex common shareholders	(445,028)					(445,028)
Net income (loss)	$ (687,550)	(445,028)					(242,522)
Issuances of common stock:
Benefit plans (shares)	99		8,226
Issuance of common stock under benefit plans	$ 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	402,265	$ 83	402,182
Stock-based compensation expense	128,351	127,883		127,883			468
Restructuring expense related to benefit plans	1,312	1,312		1,312
Tax benefit from equity compensation	(1,252)	(1,252)		(1,252)
Noncontrolling interest upon deconsolidation	45,445						45,445	(38,530)
Balance at Dec. 31, 2013	1,356,405	1,356,405	$ 2,320	5,321,286	(306)	(3,966,895)	0	0
Balance (shares) at Dec. 31, 2013			233,789
Increase (Decrease) in Stockholders' Equity
Unrealized holding gains on marketable securities	(165)	(165)			(165)
Unrealized gains (losses) on foreign currency forward contracts	2,034	2,034			2,034
Foreign currency translation adjustment	(646)	(646)			(646)
Net income (loss) attributable to Vertex common shareholders	(738,555)					(738,555)
Net income (loss)	(742,745)	(738,555)					(4,190)
Issuances of common stock:
Benefit plans (shares)			7,975
Issuance of common stock under benefit plans	274,808	274,808	$ 65	274,743
Stock-based compensation expense	178,965	178,965		178,965
Tax benefit from equity compensation	2,160	2,160		2,160
Noncontrolling interest upon consolidation	25,367						25,367
Balance at Dec. 31, 2014	$ 1,096,183	$ 1,075,006	$ 2,385	$ 5,777,154	$ 917	$ (4,705,450)	$ 21,177	$ 0
Balance (shares) at Dec. 31, 2014			241,764

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities:
Net loss	$ (742,745)	$ (687,550)	$ (51,135)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization expense	63,257	48,365	38,191
Stock-based compensation expense	177,542	127,303	114,285
Other non-cash based compensation expense	0	5,860	10,261
Intangible asset impairment charges	0	663,500	0
Deferred income taxes	281	(285,053)	36,660
Impairment of property and equipment	1,689	7,594	0
Deconsolidation of variable interest entity	0	55,110	0
Write-downs of inventories to net realizable value	0	10,358	133,189
Excess tax benefit from share-based payment arrangements	(2,160)	1,252	(1,971)
Other non-cash items, net	0	6,742	178
Changes in operating assets and liabilities, excluding the effects of the acquisition and deconsolidation of variable interest entities:
Accounts receivable, net	7,428	53,363	39,912
Inventories	(16,469)	7,142	(29,925)
Prepaid expenses and other assets	(15,771)	(12,061)	(23,619)
Accounts payable	25,048	(49,234)	14,892
Accrued expenses and other liabilities	(3,270)	43,725	29,232
Accrued restructuring expense	17,502	5,025	(2,985)
Deferred revenues	(25,531)	(53,011)	(39,324)
Net cash (used in) provided by operating activities	(513,199)	(51,570)	267,841
Cash flows from investing activities:
Purchases of marketable securities	(1,424,172)	(2,412,418)	(1,705,829)
Sales and maturities of marketable securities	1,557,938	2,348,295	1,367,927
Payment for acquisition of variable interest entity	(10,000)	0	0
Expenditures for property and equipment	(51,201)	(51,393)	(71,140)
Decrease in restricted cash and cash equivalents	0	31,804	2,156
Decrease (increase) in restricted cash and cash equivalents (VIE)	1,638	27,884	(18,105)
(Increase) decrease in other assets	(244)	1,698	(826)
Net cash provided by (used in) investing activities	73,959	(54,130)	(425,817)
Cash flows from financing activities:
Excess tax benefit from share-based payment arrangements	2,160	(1,252)	1,971
Issuances of common stock under benefit plans	274,615	265,878	191,721
Payments to redeem secured notes	0	(158)	0
Payments on capital lease obligations	(21,443)	(16,057)	(2,615)
Payments on construction financing lease obligation	(60,249)	(67,527)	(18,873)
Proceeds from senior secured term loan	294,243	0	0
Payments returned related to construction financing lease obligation	8,050	0	0
Net cash provided by financing activities	497,376	180,884	172,204
Effect of changes in exchange rates on cash	(2,176)	4,708	(141)
Net increase in cash and cash equivalents	55,960	79,892	14,087
Cash and cash equivalents—beginning of period	569,299	489,407	475,320
Cash and cash equivalents—end of period	625,259	569,299	489,407
Supplemental disclosure of cash flow information:
Cash paid for interest	8,714	11,015	13,400
Cash paid for income taxes	1,210	2,840	9,318
Conversion of convertible senior subordinated notes (due 2015) for common stock	0	399,842	0
Unamortized deferred debt issuance costs exchanged	0	4,230	0
Capitalization of construction in-process related to construction financing lease obligation	25,564	215,013	235,594
Assets acquired under capital lease obligations	9,188	50,972	31,101
Issuances of common stock exercises from employee benefit plans receivable	$ 637	$ 0	$ 0

Nature of Business and Accounting Policies

12 Months Ended

Dec. 31, 2014

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 is focused on developing and commercializing therapies for the treatment of cystic fibrosis (“CF”) and advancing its research and early-stage development programs. The Company has marketed KALYDECO (ivacaftor) since it was approved in 2012 for the treatment of certain patients with CF and is seeking approval to market lumacaftor in combination with ivacaftor in order to increase the number of patients with CF who would be eligible for treatment with the Company’s drugs. In addition, in 2011, the Company obtained approval in the United States for INCIVEK (telaprevir) for the treatment of adults with genotype 1 hepatitis C virus (“HCV”) infection and actively marketed INCIVEK from 2011 through 2013. In the fourth quarter of 2013, the Company reduced its focus on marketing INCIVEK and in 2015 expects to complete the wind-down of any remaining activities related to HCV. The Company’s collaborator, Janssen Pharmaceutica NV (“Janssen NV”), has marketed telaprevir in its territories under the brand name INCIVO since 2011.

The Company’s net loss attributable to Vertex for 2014 was $738.6 million, or $3.14 per share. As of December 31, 2014, the Company had cash, cash equivalents and marketable securities of $1.39 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, the dependence on obtaining approval and reimbursement of lumacaftor in combination with ivacaftor, 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, (ii) its wholly-owned subsidiaries and (iii) consolidated variable interest entities (VIEs). In addition, the consolidated financial statements reflect the operations of Alios BioPharma, Inc. (“Alios”), as well as direct expenses Vertex incurred as a result of the Alios Agreement, as discontinued operations. All material intercompany balances and transactions have been eliminated. The Company operates in one segment, pharmaceuticals. Please refer to Note T, “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, the consolidation of VIEs and deconsolidation of a VIE, leases and the provision for or benefit from income taxes. 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 specialty pharmacy providers and selected regional wholesalers in North America as well as government-owned and supported customers in international markets (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 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, 2014:



	Trade Allowances			Rebates, Chargebacks and Discounts			Product Returns			Other Incentives			Total
	(in thousands)
2014
Beginning Balance	$	1,535		$	68,244		$	15,799		$	1,555		$	87,133
Provision related to current period sales	8,468			35,713			2,478			1,347			48,006
Adjustments related to prior period sales	(43		)	329			3,056			(72		)	3,270
Credits/payments made	(8,497		)	(75,184		)	(16,620		)	(2,085		)	(102,386		)
Ending Balance	$	1,463		$	29,102		$	4,713		$	745		$	36,023

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

The Company adjusts its estimated rebates, chargebacks and discounts based on new information, including information regarding actual rebates, chargebacks and discounts for its products, as it becomes available. Claims by third-party payors for rebates, chargebacks and discounts frequently are submitted to the Company significantly after the related sales, potentially resulting in adjustments in the period in which the new information becomes known. During the fourth quarter of 2014, the Company withdrew INCIVEK from the market in the United States and maintained an accrual of $16.2 million for government rebates for INCIVEK. If an adjustment to this reserve is required, the Company expects it would be reflected as either an increase or decrease to net product revenues in the period in which the adjustment is made. Based on the current information available to the Company, cumulative adjustments related to prior period sales represent 0.3%, 0.7% and 1.3%, respectively, of the gross product revenues that were recorded in the years ended December 31, 2013, 2012 and 2011, respectively.

During the fourth quarter of 2014, the Company provided notice that it would accept final returns of INCIVEK from its customers in the United States until December 31, 2014. As a result, the Company’s accrual for INCIVEK returns was not significant as of December 31, 2014.

Royalty Revenues

The Company’s royalty revenues on commercial sales of INCIVO (telaprevir) by Janssen NV are based on net sales of licensed products in licensed territories as provided by Janssen NV. 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 forecasted revenues, 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 also maintains a foreign currency hedging program which includes foreign currency forward contracts with several counterparties. The Company has not experienced any credit losses related to these financial instruments and does not believe it is exposed to any significant credit risk related to these instruments.

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, Italy and Spain were not material in 2014, and the Company had no receivables from Portugal in 2014. The Company believes that its allowance for doubtful accounts was adequate at December 31, 2014. Please refer to Note T, “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.

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.

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.

Accounts Receivable

The Company deducts trade allowances for prompt payment and fees for distribution services from its accounts receivable based on its experience that the Company’s customers will earn these discounts and fees. The Company’s estimates for its allowance for doubtful accounts, which have not been significant to date, are determined based on existing contractual payment terms and historical payment patterns.

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. 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.

For awards with performance conditions that accelerate vesting of the award, 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. For awards with performance conditions in which the award does not vest unless the performance condition is met, the Company recognizes expense only if the Company estimates that achievement of the performance condition is probable. If the Company concludes that vesting is probable it recognizes expense from the date it reaches this conclusion through the estimated vesting date.

Effective for equity awards granted on or after February 5, 2014, the Company provides to employees who have rendered a certain number of years’ to the Company and meet certain age requirements, partial or full acceleration of vesting of these equity awards, subject to certain conditions, upon a termination of employment other than for cause. Less than 5% of the Company’s employees were eligible for partial or full acceleration of any of their equity awards as of December 31, 2014. The Company recognizes stock-based compensation expense related to these awards over a service period reflecting qualified employees eligibility for partial or full acceleration of vesting.

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; outsourced services, 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 $16.2 million, $19.6 million and $58.6 million in 2014, 2013 and 2012, 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 recorded 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.

Assets recorded as a result of consolidating VIEs’ financial condition into the Company’s consolidated balance sheet do not represent additional assets that could be used to satisfy claims against the Company’s general assets. The Company records the cash and cash equivalents of consolidated VIEs, if any, as prepaid expenses and other current assets because the Company does not have control over the VIEs’ cash and cash equivalents.

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.

Noncontrolling Interest

The Company records noncontrolling interest, which has historically related to consolidated VIEs, on its consolidated balance sheets. Noncontrolling interest is reflected on two separate lines if the consolidated VIE has both common shareholders and preferred shareholders that are entitled to redemption rights in certain circumstances. The Company records net loss (income) attributable to noncontrolling interest on its consolidated statements of operations, reflecting the VIEs’ 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 the consolidated VIEs, which is evaluated each reporting period.

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 the Company determines it 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 the derivatives include 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 as unrealized gains and losses until the forecasted underlying transaction occurs. Unrealized gains and losses on these foreign currency forward contracts are included in (i) “Prepaid expenses and other current assets” and (ii) “Other liabilities, current portion,” respectively, on the Company’s consolidated balance sheets. Realized gains and losses for the effective portion of such contracts are recognized in “Product revenues, net” in the consolidated statement of operations when the contract is settled with the counterparty. The Company classifies the cash flows from hedging instruments in the same category as the cash flows from the hedged items.

Certain of the Company’s hedging instruments are subject to master netting arrangements to reduce the risk arising from such transactions with its counterparties. The Company presents unrealized gains and losses on its foreign currency forward contracts on a gross basis within its consolidated balance sheets.

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 its 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

The Company primarily operates with entities that 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 $1.0 million, $0.3 million and $0.7 million at December 31, 2014, 2013, and 2012, respectively. Net foreign currency exchange transaction gains or losses are included in “net loss” on the Company’s consolidated statement of operations. Net transaction losses were $6.4 million and $0.4 million for 2014 and 2012, respectively, and net transaction gains were $5.1 million in 2013.

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

Basic and diluted net income (loss) 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 income (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 income (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.

The Company utilizes income (loss) from continuing operations attributable to Vertex to determine whether potentially outstanding stock options and the assumed conversion of convertible notes are dilutive.

Recent Accounting Pronouncements

In 2014, the Financial Accounting Standards Board (“FASB”) issued amended guidance applicable to revenue recognition that will be effective for the year ending December 31, 2017. Early adoption is not permitted. The new guidance applies a more principle based approach to recognizing revenue. The new guidance must be adopted using either a full retrospective approach for all periods presented or a modified retrospective approach. The Company is in the process of evaluating the new guidance and determining the expected effect on its consolidated financial statements.

In 2014, the FASB issued amended requirements for reporting discontinued operations and requires additional disclosures about discontinued operations. Under the new guidance, only disposals representing a strategic shift in operations or that have a major effect on the Company’s operations and financial results should be presented as discontinued operations. This new accounting guidance is effective for annual periods beginning after December 15, 2014 for only those operations that have not previously been reported as discontinued operations. Early adoption is permitted. The Company does not expect the new guidance to have a significant effect on its consolidated financial statements.

In 2014, the FASB issued new guidance on management’s responsibility in evaluating whether or not there is substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued each reporting period. This new accounting guidance is effective for annual periods ending after December 15, 2016. Early adoption is permitted. The Company does not expect the new guidance to have a significant effect on its consolidated financial statements.

The Company did not adopt any new accounting pronouncements during 2014 that had a material effect on its consolidated financial statements.

Collaborative Arrangements

12 Months Ended

Dec. 31, 2014

Collaborative Arrangements

Collaborative Arrangements

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.

Under the April 2011 Amendment, CFFT agreed to provide the Company with up to $75.0 million in funding over approximately five years for corrector-compound research and development activities. The Company retains the right to develop and commercialize KALYDECO (ivacaftor), lumacaftor, 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 $6.5 million, $14.3 million and $17.0 million in 2014, 2013 and 2012, respectively.

In the original agreement, as amended prior to the April 2011 Amendment, the Company agreed to pay CFFT tiered royalties calculated as a percentage, ranging from single digits to sub-teens, of annual net sales of any approved drugs discovered during the research term that ended in 2008, including KALYDECO, 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 ended in February 2014. In each of 2012 and 2013, CFFT earned a commercial milestone payment of $9.3 million from the Company upon achievement of certain sales levels for KALYDECO. These milestones were reflected in the Company’s cost of product revenues. There are no additional commercial milestone payments payable by the Company to CFFT related to sales levels for KALYDECO. The Company also is obligated to make up to two one-time commercial milestone payments to CFFT upon achievement of certain sales levels for corrector compounds such as lumacaftor or VX-661.

The Company began marketing KALYDECO in the United States and certain countries in the European Union in 2012 and is seeking approval to market lumacaftor in combination with ivacaftor in the United States and European Union. 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 extensions. The Company has patent applications in the United States covering the composition-of-matter of lumacaftor that would, if granted, expire in 2026, subject to potential extension. The Company has a patent in the European Union covering the composition-of-matter of lumacaftor that expires in 2026, subject to potential extension. The collaboration also may be terminated by either party for a material breach by the other, subject to notice and cure provisions.

Janssen Pharmaceutica NV

In 2006, the Company entered into a collaboration agreement (the “Janssen HCV Agreement”) with Janssen Pharmaceutica NV (“Janssen NV”) for the development, manufacture and commercialization of telaprevir, which Janssen NV began marketing under the brand name INCIVO in certain of its territories in September 2011. Under the Janssen HCV Agreement, Janssen NV agreed to be responsible for 50% of the drug development costs incurred under the development program for the parties’ territories (North America for the Company, and the rest of the world, other than specified countries in Asia, for Janssen NV) and 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 NV amended the collaboration agreement (the “2013 Janssen HCV Amendment”).

Janssen NV 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 HCV Agreement through November 2013. As of November 2013, the effective date of the 2013 Janssen HCV Amendment, there was $32.1 million remaining in deferred revenues related to this up-front license payment.

Janssen NV paid the Company a tiered royalty averaging in the mid-20% range as a percentage of net sales of INCIVO in Janssen NV’s territories through 2013. Janssen NV was, and continues to be, responsible for certain third-party royalties on net sales of INCIVO in its territories.

Pursuant to the 2013 Janssen HCV Amendment, (i) Janssen NV made a payment of $152.0 million to the Company in the fourth quarter of 2013; (ii) Janssen NV’s obligations to pay the Company royalties on net sales of INCIVO (telaprevir) terminated after the fourth quarter of 2013; and (iii) Janssen NV 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 determined that the 2013 Janssen HCV Amendment was a material modification to the Janssen HCV Agreement because there was a material change to the consideration and deliverables under the agreement and determined that there was one undelivered element under the Janssen HCV Agreement, as amended, which was the continuation of certain telaprevir development activities. The Company recognized $182.4 million of collaborative revenues pursuant to the Janssen HCV Agreement in the fourth quarter of 2013. This amount was primarily attributable to (i) the residual consideration received from Janssen NV, 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, 2014, the remaining deferred revenue balance related to the Janssen NV collaboration was not material. In addition to the collaborative revenues, the Company will continue to record royalty revenues and corresponding royalty expenses related to third-party royalties that Janssen NV remains responsible for based on INCIVO net sales.

The Janssen HCV Agreement will continue in effect until the expiration of Janssen NV’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 NV 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, 2014, the Company recognized the following revenues attributable to the Janssen HCV collaboration:



	2014		2013		2012
	(in thousands)
Royalty revenues	$	13,481	$	130,724	$	117,592
Collaborative revenues:
Up-front and amendment payments revenues	$	—	$	190,345	$	12,428
Net reimbursement (payment) for telaprevir development costs	7,104		2,793		(3,507		)
Reimbursement for manufacturing services	—		10,299		7,257
Total collaborative revenues attributable to the Janssen HCV collaboration	$	7,104	$	203,437	$	16,178
Total revenues attributable to the Janssen HCV collaboration	$	20,585	$	334,161	$	133,770

Mitsubishi Tanabe Pharma Corporation

The Company has a collaboration agreement with Mitsubishi Tanabe Pharma Corporation (“Mitsubishi Tanabe”) pursuant to which Mitsubishi Tanabe has a fully-paid license to manufacture and commercialize TELAVIC (the brand name under which Mitsubishi Tanabe is marketing telaprevir) in Japan and other specified countries in Asia. The Company did not recognize collaborative revenues from this collaboration in 2014 or 2013. In 2012, the Company recognized collaborative revenues from this collaboration of $18.9 million.

Alios BioPharma, Inc.

In June 2011, the Company entered into a license and collaboration agreement (the “Alios Agreement”) with Alios, a privately-held biotechnology company. Pursuant to the Alios Agreement, the Company and Alios collaborated on the research, development and commercialization of HCV nucleotide analogues discovered by Alios through April 2014. In April 2014, Vertex and Alios amended the Alios Agreement to eliminate the Company’s obligations to conduct further development activities with respect to VX-135. The Agreement terminated in accordance with its terms in December 2014.

Under applicable accounting guidance, the Company consolidated Alios as a VIE for the period from June 13, 2011 through December 31, 2013. The Company deconsolidated Alios as of December 31, 2013 because the Company 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. As a result, in the fourth quarter of 2013, the Company recorded a full impairment charge of $250.6 million related to the HCV nucleotide analogue program and a benefit for income taxes of $102.1 million was recorded attributable to Alios. The deconsolidation resulted in a gain of $68.2 million recorded in loss from discontinued operations, net of tax, 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 made to Alios pursuant to the Alios Agreement.

As of December 31, 2013, the Company determined that it continued to have significant continuing involvement with Alios due to the Alios Agreement; therefore, in 2013 the deconsolidation of Alios was not presented as discontinued operations in the Company’s consolidated financial statements. However, the Company determined that it would evaluate whether it continued to have significant continuing involvement with Alios for a period of one year from the December 31, 2013 deconsolidation date. As of September 30, 2014, the Company concluded that it no longer had significant continuing involvement with Alios due to its intent and ability to terminate the Alios Agreement; therefore, the operations of Alios, including collaboration expenses reimbursed by Vertex are presented as discontinued operations for the periods presented in these consolidated financial statements.

Prior to the deconsolidation, the Company recorded net loss (income) attributable to noncontrolling interest on its consolidated statements of operations. A summary of Alios’ net loss (income) attributable to noncontrolling interest for 2012 and 2013 is as follows:



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

In 2013, 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 $124.9 million due to the advancement of the Company’s HCV nucleotide program. As of December 31, 2013, the Company concluded that the fair value of the contingent milestone and royalty payments was zero based on, among other things, additional data regarding VX-135 and compounds being developed by other competitors.

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.

BioAxone Biosciences, Inc.

In October 2014, the Company entered into a license and collaboration agreement (the “BioAxone Agreement”) with BioAxone Biosciences, Inc. (“BioAxone”), a privately-held biotechnology company. The Company has determined that BioAxone is a VIE. Accordingly, the Company consolidated BioAxone’s financial statements with the Company’s consolidated financial statements beginning on October 1, 2014 as a business combination. The Company paid BioAxone initial payments of $10.0 million in the fourth quarter of 2014.

BioAxone has the potential to receive up to $90.0 million in milestones and fees, including development, regulatory and milestone payments and a license continuation fee. In addition, BioAxone would receive royalties and commercial milestones on future net product sales, if any. On the date of the business combination, the fair value of the contingent payments payable by the Company pursuant to the BioAxone Agreement was $26.6 million. The Company recorded an in-process research and development intangible asset of $29.0 million for VX-210 and a corresponding deferred tax liability of $11.3 million attributable to BioAxone. As of December 31, 2014, there were no significant changes to the amounts included in the Company’s consolidated balance sheet other than $8.4 million of cash and cash equivalents, which is included in prepaid and other current assets. Vertex has no rights to BioAxone’s cash and accordingly this cash does not affect Vertex’s liquidity or cash position. Noncontrolling interest was $25.4 million as of the date of the business combination. Net loss attributable to noncontrolling interest related to BioAxone was $4.2 million for the year ended December 31, 2014, which included a $0.5 million increase to contingent consideration for the fourth quarter of 2014 and resulted in noncontrolling interest of $21.2 million as of December 31, 2014.

Vertex holds an option to purchase BioAxone at a predetermined price. The option expires at the earliest of (a) the day the FDA accepts the Biologics License Application submission for VX-210, (b) the day the Company elects to continue the license instead of exercising the options to purchase BioAxone and (c) March 15, 2018, subject to the Company’s option to extend this date by one year.

Outlicense Arrangements

In the ordinary course of the Company’s business, the Company has entered into various agreements pursuant to which it has outlicensed rights to certain drug candidates to third-party collaborators. Although, the Company does not consider any of these outlicense arrangements to be material, the most notable of these outlicense arrangements is described below. Pursuant to these outlicense arrangements, our collaborators become responsible for all costs related to the continued development of such drug candidates. Depending on the terms of the arrangements, the Company’s collaborators may be required to make upfront payments, milestone payments upon the achievement of certain product research and development objectives and/or pay royalties on future sales, if any, of commercial products resulting from the collaboration.

Janssen Pharmaceuticals, Inc.

In June 2014, the Company entered into an agreement (the “Janssen Influenza Agreement”) with Janssen Pharmaceuticals, Inc. (“Janssen Inc.”), which was amended in October 2014 to clarify certain roles and responsibilities of the parties. Pursuant to the Janssen Influenza Agreement, Janssen Inc. has an exclusive worldwide license to develop and commercialize certain drug candidates for the treatment of influenza, including VX-787. The Company received a non-refundable up-front payment of $30.0 million from Janssen Inc. in the third quarter of 2014 upon expiration of the waiting period under the Hart–Scott–Rodino Antitrust Improvements Act of 1976. Pursuant to the amendment to the Janssen Influenza Agreement, the Company received an additional non-refundable payment of $5.0 million in the fourth quarter of 2014 and has the potential to receive development, regulatory and commercial milestone payments as well as royalties on future product sales, if any. Janssen Inc. is responsible for costs related to the development and commercialization of the compounds. Janssen Inc. may terminate the Janssen Influenza Agreement, subject to certain exceptions, upon six months’ notice.

The Company evaluated the deliverables, consisting of licenses to intellectual property and the obligation to complete certain fully-reimbursable research and development activities as directed by Janssen Inc., pursuant to the Janssen Influenza Agreement under multiple element arrangement guidance for collaborative arrangements. The Company concluded that the license has stand-alone value from the research and development activities and determined the relative selling price of these deliverables based on the Company’s best estimate of selling price. The Company utilized a discounted cash flow model to determine its best estimate of selling price for the licenses to intellectual property and determined the best estimate of selling price for the research and development activities to be the estimated cost to complete the activities plus a commercially reasonable margin. The Company determined the license had stand-alone value based on the resources and know-how possessed by Janssen Inc. The Company concluded that the Janssen Influenza Agreement and the amendment to the Janssen Influenza Agreement should be accounted for as separate contracts due to the fact that the amendment did not impact the Company’s obligations under the original agreement. Based on this analysis, the Company recognized $30.0 million in collaborative revenues related to the up-front payment upon delivery of the license and $5.0 million upon execution of the amendment. The Company recorded the reimbursement for the research and development activities of $9.1 million as a reduction to development expense in the Company’s consolidated statements of operations primarily due to the fact that Janssen Inc. directs the activities and selects the suppliers associated with these activities.

Earnings Per Share

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share

The following table sets forth the computation of basic and diluted (loss) income from continuing operations per share attributable to Vertex common shareholders for the three years ended December 31, 2014:



	2014			2013			2012
	(in thousands, except per share amounts)
Basic (loss) income from continuing operations per share attributable to Vertex common shareholder calculation:
(Loss) income from continuing operations attributable to Vertex common shareholders	$	(737,643	)	$	(503,622	)	$	32,271
Less: Undistributed earnings allocated to participating securities	—			—			(322		)
(Loss) income from continuing operations attributable to Vertex common shareholders—basic	$	(737,643	)	$	(503,622	)	$	31,949
Basic weighted-average common shares outstanding	235,307			224,906			211,946
Basic (loss) income from continuing operations per common share attributable to Vertex	$	(3.14	)	$	(2.24	)	$	0.15
Diluted (loss) income from continuing operations per share attributable to Vertex common shareholder calculation:
(Loss) income from continuing operations attributable to Vertex common shareholders	$	(737,643	)	$	(503,622	)	$	32,271
Less: Undistributed earnings allocated to participating securities	—			—			(317		)
(Loss) income from continuing operations attributable to Vertex common shareholders—diluted	$	(737,643	)	$	(503,622	)	$	31,954
Basic weighted-average common shares outstanding	235,307			224,906			211,946
Effect of potentially dilutive securities:
Stock options	—			—			3,219
Other	—			—			97
Diluted weighted-average common shares outstanding	235,307			224,906			215,262
Diluted (loss) income from continuing operations per common share attributable to Vertex	$	(3.14	)	$	(2.24	)	$	0.15

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



	2014	2013	2012
	(in thousands)
Stock options	12,003	15,729	16,507
Convertible senior subordinated notes	—	—	8,192
Unvested restricted stock and restricted stock units	3,091	2,165	2,253

Fair Value Measurements

12 Months Ended

Dec. 31, 2014

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, 2014, 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, 2014, 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. The fair value of the Company’s foreign currency forward contracts was based on Level 2 inputs using third party pricing services. During 2014, 2013 and 2012, 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 (excluding VIE cash and cash equivalents) subject to fair value measurements:



	Fair Value Measurements as of December 31, 2014
			Fair Value Hierarchy
	Total		Level 1		Level 2		Level 3
	(in thousands)
Financial assets carried at fair value:
Cash equivalents:
Money market funds	$	290,531	$	290,531	$	—	$	—
Marketable securities:
Government-sponsored enterprise securities	463,750		463,750		—		—
Commercial paper	51,746		—		51,746		—
Corporate debt securities	246,351		—		246,351		—
Prepaid and other current assets:
Foreign currency forward contracts	2,011		—		2,011		—
Total	$	1,054,389	$	754,281	$	300,108	$	—

BioAxone’s cash equivalents of $8.4 million as of December 31, 2014 consisted of money market funds, which are valued based on Level 1 inputs. The Company’s noncontrolling interest includes the fair value of the contingent payments, which are valued based on Level 3 inputs. Please refer to Note B, “Collaborative Arrangements,” for further information.

As of December 31, 2014, the fair value and carrying value of the Company’s Term Loan was $294.8 million, which was recorded on its consolidated balance sheet based on Level 3 inputs computed using the effective interest rate of the Term Loan. The effective interest rate considers the timing and amount of estimated future interest payments and the discount on the Term Loan. The Level 3 inputs related to the Term Loan are the amounts of the estimated future interest payments. Please refer to Note L, “Long Term Obligations,” for further information regarding the Company’s Term Loan.

- Definition

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

+ References + Details

Marketable Securities

12 Months Ended

Dec. 31, 2014

Cash and Cash Equivalents [Abstract]

Marketable Securities

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



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
December 31, 2014
Cash and cash equivalents:
Cash and money market funds	$	625,259	$	—	$	—		$	625,259
Total cash and cash equivalents	$	625,259	$	—	$	—		$	625,259
Marketable securities:
Government-sponsored enterprise securities (due within 1 year)	$	463,788	$	14	$	(52	)	$	463,750
Commercial paper (due within 1 year)	51,674		72		—			51,746
Corporate debt securities (due within 1 year)	196,065		2		(66		)	196,001
Corporate debt securities (due after 1 year through 5 years)	50,443		—		(93		)	50,350
Total marketable securities	$	761,970	$	88	$	(211	)	$	761,847
Total cash, cash equivalents and marketable securities	$	1,387,229	$	88	$	(211	)	$	1,387,106

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

Cash and cash equivalents of $8.4 million related to the Company’s VIE as of December 31, 2014 is recorded on the Company’s consolidated balance sheet in “Prepaid expenses and other current assets,” and is not included in the above table. The Company did not have any VIEs recorded in its consolidated financial statements as of December 31, 2013.

The Company has a limited number of marketable securities in insignificant loss positions as of December 31, 2014, which the Company does not intend to sell and has concluded it will not be required to sell before recovery of the amortized costs for the investment at maturity.

There were no charges recorded for other-than-temporary declines in fair value of marketable securities nor gross realized gains or losses recognized in 2014, 2013 or 2012.

Accumulated Other Comprehensive Loss

12 Months Ended

Dec. 31, 2014

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 (losses) on marketable securities			Unrealized (losses) gains on foreign currency forward contracts			Total
	(in thousands)
Balance at December 31, 2013	$	(325	)	$	42		$	(23	)	$	(306	)
Other comprehensive (loss) income before reclassifications	(646		)	(165		)	3,591			2,780
Amounts reclassified from accumulated other comprehensive loss	—			—			(1,557		)	(1,557		)
Net current period other comprehensive (loss) income	(646		)	(165		)	2,034			1,223
Balance at December 31, 2014	$	(971	)	$	(123	)	$	2,011		$	917

- Definition

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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(d),(e))
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 210
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-Paragraph 1
-Subparagraph (SX 210.5-02.29-31)
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: 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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Reference 10: http://www.xbrl.org/2003/role/presentationRef
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6521494

Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
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Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
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-Number 210
-Section 08
-Paragraph d
-Article 4

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
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-Number Topic 4
-Section E

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

Hedging

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Hedging

In 2013, the Company initiated a hedging program intended to mitigate the effect of changes in exchange rates for a portion of the Company’s forecasted product revenues denominated in certain foreign currencies. The program includes foreign currency forward contracts that are designated as cash flow hedges under GAAP having contractual durations from one to twelve months. To date, the existence of operational sites in markets outside the United States has generally minimized the degree to which the Company seeks to hedge its revenues in certain foreign currencies.

The Company formally documents the relationship between foreign currency forward contracts (hedging instruments) and forecasted product revenues (hedged items), as well as the Company’s risk management objective and strategy for undertaking various hedging activities, which includes matching all foreign currency forward contracts that are designated as cash flow hedges to forecasted transactions. The Company also formally assesses, both at the hedge’s inception and on an ongoing basis, whether the foreign currency forward contracts are highly effective in offsetting changes in cash flows of hedged items on a prospective and retrospective basis. If the Company determines that (i) a foreign currency forward contract is not highly effective as a cash flow hedge, (ii) it has ceased to be a highly effective hedge or (iii) a forecasted transaction is no longer probable of occurring, the Company would discontinue hedge accounting treatment prospectively. The Company measures effectiveness based on the change in fair value of the forward contracts and the fair value of the hypothetical foreign currency forward contracts with terms that match the critical terms of the risk being hedged. As of December 31, 2014, all hedges were determined to be highly effective and the Company has not recorded any ineffectiveness related to the hedging program.

The following table summarizes the notional amount of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges:



	As of December 31, 2014		As of December 31, 2013
Foreign Currency	(in thousands)
Euro	$	20,209	$	17,468
British pound sterling	13,515		—
Total foreign currency forward contracts	$	33,724	$	17,468

The following table summarizes the fair value of the Company’s outstanding foreign currency forward contracts included on the Company’s consolidated balance sheets:



	As of December 31, 2014		As of December 31, 2013
	(in thousands)
Fair value - assets	$	2,011	$	—
Fair value - liabilities	—		(23		)
Net carrying value	$	2,011	$	(23	)

- Definition

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/presentationRef
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Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Publisher FASB
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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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Reference 16: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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Reference 17: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
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-Subparagraph (SX 210.4-08.(n))
-URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690

+ Details

Inventories

12 Months Ended

Dec. 31, 2014

Inventory Disclosure [Abstract]

Inventories

Inventories consisted of the following:



	As of December 31,
	2014		2013
	(in thousands)
Raw materials	$	8,506	$	489
Work-in-process	20,508		9,981
Finished goods	1,834		3,677
Total	$	30,848	$	14,147

As of December 31, 2014, the Company has capitalized $11.8 million of inventory costs for lumacaftor manufactured in preparation for its planned product launch in 2015 based on its evaluation of, among other factors, information regarding lumacaftor’s safety and efficacy. In periods prior to July 1, 2014, the Company expensed costs associated with lumacaftor’s raw materials and work-in-process as a development expense. In November 2014, the Company submitted a New Drug Application to the United States Food and Drug Administration and a Marketing Authorization Application to the European Medicines Agency for lumacaftor in combination with ivacaftor. The FDA has granted the Company priority review of the NDA and the European Committee for Medicinal Products for Human Use has granted the Company’s request for Accelerated Assessment of the MAA. The target date for the FDA to complete its review of the NDA for the combination under the Prescription Drug User Fee Act, or PDUFA, is July 5, 2015. The Company plans to continue to monitor the status of these regulatory processes and the other factors used to determine whether or not to capitalize the lumacaftor inventory and, if there are significant negative developments regarding lumacaftor in combination with ivacaftor, the Company could be required to impair previously capitalized costs.

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. The Company did not record any write-offs for excess and obsolete inventories during the year ended December 31, 2014.

Property and Equipment

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment, net consisted of the following:



	As of December 31,
	2014			2013
	(in thousands)
Buildings	$	531,642		$	506,056
Furniture and equipment	202,846			190,555
Software	113,875			102,520
Leasehold improvements	99,942			163,019
Computers	45,893			43,096
Total property and equipment, gross	994,198			1,005,246
Less: accumulated depreciation	(278,386		)	(308,335		)
Total property and equipment, net	$	715,812		$	696,911

Total property and equipment, gross, as of December 31, 2014 and 2013, included $85.6 million and $76.4 million, respectively, for property and equipment recorded under capital leases. Accumulated depreciation, as of December 31, 2014 and 2013, included $13.1 million and $3.8 million, respectively, for property and equipment recorded under capital leases.

Included in property and equipment, net as of December 31, 2014 were $11.2 million and $1.2 million in capitalized internally developed software costs and related amortization, respectively. 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.

The Company recorded depreciation expense of $62.3 million, $47.3 million and $35.7 million in 2014, 2013 and 2012, respectively.

In 2014, in connection with the relocation of the Company’s headquarters in Massachusetts from Cambridge to Boston, the Company wrote off certain leasehold improvements that were fully depreciated and no longer utilized. There was no effect on the Company's net property and equipment at the time of the write off because the Company had previously adjusted the useful lives of these assets to coincide with its relocation when it concluded that the relocation was probable.

Intangible Assets and Goodwill	12 Months Ended
Intangible Assets and Goodwill	Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible Assets and Goodwill	Intangible Assets and Goodwill Intangible Assets As of December 31, 2014, the Company had $29.0 million of intangible assets recorded on its consolidated balance sheet related to the consolidation of a VIE, BioAxone. BioAxone Collaboration In October 2014, the Company recorded $29.0 million of an in-process research and development intangible asset on its consolidated balance sheet based on the Company’s estimate of the fair value of VX-210, a drug candidate for patients with spinal cord injuries that is licensed from BioAxone by the Company. The Company used a 7.5% discount rate in the present-value models used to estimate the fair value of the in-process research and development asset. The Company also conducted an evaluation of BioAxone’s other programs and determined that market participants would not have ascribed value to those assets because of the stage of development of those assets. ViroChem Acquisition In 2013, the Company determined that there were indicators that the value of the VX-222 intangible asset acquired from ViroChem in 2010 of $412.9 million reflected on its consolidated balance sheet had become impaired. 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 based on, among other things, additional data regarding VX-222 and compounds being developed by other competitors. 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. Goodwill As of December 31, 2014, goodwill of $39.9 million was recorded on the Company’s consolidated balance sheet. The Company allocated $8.9 million to goodwill related to the BioAxone collaboration during the year ended December 31, 2014. None of the goodwill related to the BioAxone collaboration is expected to be deductible for income tax purposes. As of December 31, 2013, $31.0 million was recorded on the Company’s consolidated balance sheet.

- Definition

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

+ References + Details

Additional Balance Sheet Detail

12 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

Additional Balance Sheet Detail

Prepaid and other current assets consisted of the following:



	As of December 31,
	2014		2013
	(in thousands)
Prepaid expenses	$	17,569	$	15,353
Taxes receivable	14,093		7,959
Restricted Cash (VIE)	8,418		—
Deferred tax asset	3,500		—
Fair value foreign currency forward contracts	2,011		—
Other	7,002		524
Total	$	52,593	$	23,836

Accrued expenses consisted of the following:



	As of December 31,
	2014		2013
	(in thousands)
Payroll and benefits	$	91,175	$	76,785
Research, development and commercial contract costs	38,143		52,468
Product revenue allowances	34,554		85,510
Royalty payable	12,218		18,334
Taxes payable and reserves (including VIE taxes payable)	10,038		11,146
Professional fees	7,004		10,593
Interest	5,444		—
Other	11,100		16,241
Total	$	209,676	$	271,077

Other liabilities, current portion consisted of the following:



	As of December 31,
	2014		2013
	(in thousands)
Deferred rent	$	4,015	$	16,652
Customer deposits	—		7,692
Other	782		392
Total	$	4,797	$	24,736

Long Term Obligations	12 Months Ended
Long Term Obligations	Dec. 31, 2014
Debt Disclosure [Abstract]
Long Term Obligations	Long Term Obligations 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, the Company was deemed for accounting purposes to be the owner of the Buildings during the construction period and recorded project construction costs incurred by the landlord. Upon completion of the Buildings, the Company evaluated the Fan Pier Leases and determined that the Fan Pier Leases did not meet the criteria for “sale-leaseback” treatment. Accordingly, the Company began depreciating the asset and incurring interest expense related to the financing obligation in 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. In 2014, the Company recorded $60.2 million in interest expense, $13.4 million in depreciation expense and $6.5 million in rent expense related to the Buildings. Property and equipment, net, included $515.0 million and $503.4 million as of December 31, 2014 and 2013, respectively, related to construction costs for the Buildings. The carrying value of the construction financing lease obligation related to the Buildings, which excludes interest that will be imputed over the course of the Company’s lease agreement for the Buildings, was $473.4 million and $440.9 million, as of December 31, 2014 and 2013, respectively. Term Loan On July 9, 2014, the Company entered into a credit agreement with the lenders party thereto, and Macquarie US Trading LLC (“Macquarie”), as administrative agent. The credit agreement provides for a $300.0 million senior secured term loan (“Term Loan”). The credit agreement also provides that, subject to satisfaction of certain conditions, the Company may request that the lenders establish an incremental senior secured term loan facility in an aggregate amount not to exceed $200.0 million. The Term Loan initially bears interest at a rate of 7.2% per annum but shall be reduced to 6.2% per annum on the later to occur of (i) FDA approval in the United States of a product with a label claim for treating patients with cystic fibrosis 12 years of age and older who are homozygous with the F508del mutation (“FDA Approval”), and (ii) the one year anniversary of the closing, in each case, until the second anniversary of the closing. On and after the second anniversary of the closing, the Term Loan will bear interest at a rate per annum equal to LIBOR plus 5.0% to 7.5% depending on the receipt of FDA Approval. The maturity date of all loans under the facilities is July 9, 2017. Interest is payable quarterly and on the maturity date. The Company is required to repay principal on the Term Loan in installments of $15.0 million per quarter from October 1, 2015 through July 1, 2016 and in installments of $60.0 million per quarter from October 1, 2016 through the maturity date. The Company may prepay the Term Loan, in whole or in part, at any time; provided that prepayments prior to the second anniversary of the closing are subject to a make-whole premium to ensure Macquarie receives approximately the present value of two years of interest payments over the life of the loan. The Company’s obligations under the Term Loan are unconditionally guaranteed by certain of its domestic subsidiaries. All obligations under the Term Loan, and the guarantees of those obligations, are secured, subject to certain exceptions, by substantially all of the Company’s assets and the assets of all guarantors, including the pledge of all or a portion of the equity interests of certain of its subsidiaries. The credit agreement requires that the Company maintain, on a quarterly basis, a minimum level of KALYDECO net revenues. Further, the credit agreement includes negative covenants, subject to exceptions, restricting or limiting the Company’s ability and the ability of its subsidiaries to, among other things, incur additional indebtedness, grant liens, engage in certain investment, acquisition and disposition transactions, pay dividends, repurchase capital stock and enter into transactions with affiliates. The credit agreement also contains customary representations and warranties, affirmative covenants and events of default, including payment defaults, breach of representations and warranties, covenant defaults and cross defaults. If an event of default occurs, the administrative agent would be entitled to take various actions, including the acceleration of amounts due under outstanding loans. There have been no events of default as of or during the period ended December 31, 2014. Based on the Company’s evaluation of the Term Loan, the Company determined that the Term Loan contains several embedded derivatives. These embedded derivatives are clearly and closely related to the host instrument because they relate to the Company’s credit risk; therefore, they do not require bifurcation from the host instrument, the Term Loan. The Company incurred $5.3 million in fees paid to Macquarie that were recorded as a discount on the Term Loan and that are being recorded as additional interest expense using the effective interest method over the term of the loan in the Company’s consolidated statements of operations. As of December 31, 2014, the unamortized discount associated with the Term Loan that was embedded in the senior secured term loan caption on the Company’s consolidated balance sheet was $5.2 million. 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, 2014

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, 2014 and 2013, 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, 2014
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, RS and RSU	2,857,275	9,362,898
2006 Stock and Option Plan	Employees, Non-employee Directors and Consultants	NSO, RS and RSU	11,428,741	1,189,473
1996 Stock and Option Plan	Employees, Non-employee Directors, Advisors and Consultants	NSO, ISO and RS	623,789	—
		Total	14,909,805	10,552,371

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, 2014, 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 (i) approved an increase in the number of shares authorized for issuance pursuant to the 2013 Plan of 9,500,000 shares in 2014, (ii) authorized 3,300,000 shares for issuance pursuant to the 2013 Plan in 2013 and (iii) 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, 2014, grants to current employees and directors primarily 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, 2014, 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 10 years from the grant date.

During the three years ended December 31, 2014, 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, 2014:



	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, 2013	15,729		$	44.40
Granted	3,614		$	84.33
Exercised	(6,153	)	$	41.53
Forfeited	(1,173	)	$	55.28
Expired	(14	)	$	66.43
Outstanding at December 31, 2014	12,003		$	56.81	6.94	$	761,274
Exercisable at December 31, 2014	5,553		$	45.61	5.43	$	414,345
Exercisable and Expected to Vest at December 31, 2014	11,380		$	55.94	6.85	$	731,677

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, 2014, which was $120.23 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 2014, 2013 and 2012 was $316.5 million, $291.6 million and $148.7 million, respectively. The total cash received by the Company as a result of employee stock option exercises during 2014, 2013 and 2012 was $255.5 million, $246.8 million and $172.8 million, respectively.

The following table summarizes information about stock options outstanding and exercisable at December 31, 2014:



	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)
$10.41–$20.00	214	2.25	$	17.66	214	$	17.66
$20.01–$40.00	3,702	4.40	$	35.07	2,989	$	34.73
$40.01–$60.00	3,690	7.46	$	48.52	1,435	$	50.48
$60.01–$80.00	1,980	8.85	$	76.13	442	$	74.76
$80.01–$100.00	2,401	8.87	$	90.23	473	$	84.9
$100.01–$112.48	16	9.83	$	110.58	—	$	—
Total	12,003	6.94	$	56.81	5,553	$	45.61

The following table summarizes the restricted stock activity of the Company during the year ended December 31, 2014:



	Restricted Stock		Weighted-average Grant-date Fair Value
	(in thousands)		(per share)
Unvested at December 31, 2013	2,046		$	52.66
Granted	1,897		$	92.00
Vested	(595	)	$	50.65
Cancelled	(441	)	$	56.36
Unvested at December 31, 2014	2,907		$	78.18

The total fair value of restricted stock that vested during 2014, 2013 and 2012 (measured on the date of vesting) was $54.5 million, $50.9 million and $41.1 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. As of December 31, 2014, there were 1,396,227 shares of common stock authorized for issuance pursuant to the ESPP.

In 2014, the following shares were issued to employees under the ESPP:



	Year Ended December 31, 2014
	(in thousands, except per share amount)
Number of shares	357
Average price paid per share	$	53.65

Stock-based Compensation Expense

12 Months Ended

Dec. 31, 2014

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, 2014 was as follows:



	2014		2013		2012
	(in thousands)
Stock-based compensation expense by line item:
Research and development expenses	$	116,998	$	81,183	$	71,243
Sales, general and administrative expenses	60,544		45,652		42,561
Total stock-based compensation expense included in costs and expenses	$	177,542	$	126,835	$	113,804

The stock-based compensation expense by type of award during the three years ended December 31, 2014 was as follows:



	2014			2013			2012
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	99,961		$	84,599		$	78,566
Restricted stock and restricted stock units	70,678			36,479			29,194
ESPP share issuances	8,326			6,805			7,298
Less: stock-based compensation expense capitalized to inventories	(1,423		)	(1,048		)	(1,254		)
Total stock-based compensation expense included in costs and expenses	$	177,542		$	126,835		$	113,804

In 2013 and 2012, the Company also recognized stock-based compensation expense recorded to noncontrolling interest (Alios), which is reflected in the Company’s consolidated statements of shareholders equity and noncontrolling interest on the consolidated balance sheet and in discontinued operations attributable to noncontrolling interest as of December 31, 2014.

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, 2014, by type of award and the weighted-average period over which that expense is expected to be recognized:



	As of December 31, 2014
	Unrecognized Expense Net of Estimated Forfeitures		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Stock options	$	156,969	2.13
Restricted stock and restricted stock units	$	148,037	2.79
ESPP share issuances	$	4,262	0.61

Stock Options

The Company issues stock options with service conditions, which are generally the vesting periods of the awards. 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 2014, 2013 and 2012 had a weighted-average grant-date fair value per share of $39.95, $25.79 and $19.72, respectively.

The fair value of each option granted during 2014, 2013 and 2012 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:



	2014		2013		2012
Expected stock price volatility	50.86	%	46.20	%	47.93	%
Risk-free interest rate	1.77	%	1.25	%	0.95	%
Expected term of options (in years)	5.47		5.81		5.78
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, on an annual basis restricted stock and restricted stock units that vest upon the earlier of the satisfaction of (i) a performance condition or (ii) a service condition. In addition, in 2014, the Company issued pursuant to a retention program restricted stock awards to certain members of senior management that will vest upon the satisfaction of both (i) a performance condition and (ii) a service condition.

Employee Stock Purchase Plan

The weighted-average fair value of each purchase right granted during 2014, 2013 and 2012 was $29.59, $21.08 and $12.90, respectively. The following table reflects the weighted-average assumptions used in the Black-Scholes option pricing model for 2014, 2013 and 2012:



	2014		2013		2012
Expected stock price volatility	60.32	%	54.69	%	46.90	%
Risk-free interest rate	0.09	%	0.08	%	0.16	%
Expected term (in years)	0.75		0.74		0.74
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.

Other Arrangements	12 Months Ended
Other Arrangements	Dec. 31, 2014
Other Income and Expenses [Abstract]
Other Arrangements	Other Arrangements 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, 2014, the Company had $43.2 million in deferred revenues related to the one-time cash payment, which it is recognizing over the life of the collaboration agreement with GlaxoSmithKline plc based on the units-of-revenue method. In addition, the Company continues to recognize royalty revenues equal to the amount of the third-party subroyalty and an offsetting royalty expense for the third-party subroyalty payment. Other income (expense), net In April 2014, the Company received a one-time cash payment of $36.7 million from its landlord pursuant to the Fan Pier Leases. This payment related to bonds issued pursuant to an Infrastructure Development Assistance Agreement between The Commonwealth of Massachusetts and the Company’s landlord. The bonds were issued in connection with the landlord’s contribution to infrastructure improvements and also were dependent upon employment levels at the Company through the bond issuance date. The Company accounted for the cash payment as a government grant as it was provided in part related to the Company’s employment level in Massachusetts. Such grants are recognized in income in the period in which the conditions of the grant are met and there is reasonable assurance that the grant will be received, provided it is not subject to refund. In the second quarter of 2014, the Company recorded $36.7 million as a credit to other income (expense), net in its consolidated statements of operations because the Company’s employment obligations related to these funds were satisfied as of the date of issuance of the bonds and the payment received is not subject to refund.

Income Taxes

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income Taxes

The components of loss from continuing operations before provision for (benefit from) income taxes during the three years ended December 31, 2014 consisted of the following:



	2014			2013			2012
	(in thousands)
United States	$	(645,465	)	$	(10,638	)	$	231,542
Foreign	(89,410		)	(615,406		)	(199,546		)
(Loss) income from continuing operations before provision for (benefit from) income taxes	$	(734,875	)	$	(626,044	)	$	31,996

The components of the provision for (benefit from) income taxes from continuing operations during the three years ended December 31, 2014 consisted of the following:



	2014		2013			2012
	(in thousands)
Current taxes:
United States	$	2,853	$	—		$	—
Foreign	2,457		1,085			(1,865		)
State	1,366		4,080			1,590
Total current taxes	$	6,676	$	5,165		$	(275	)
Deferred taxes:
United States	$	244	$	—		$	—
Foreign	—		(127,587		)	—
State	38		—			—
Total deferred taxes	$	282	$	(127,587	)	$	—
Provision for (benefit from) income taxes	$	6,958	$	(122,422	)	$	(275	)

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



	2014			2013			2012
	(in thousands)
(Loss) income from continuing operations before provision for (benefit from) income taxes	$	(734,875	)	$	(626,044	)	$	31,996
Expected tax provision (benefit)	(257,206		)	(219,115		)	11,199
State taxes, net of federal benefit	1,124			3,844			1,693
Foreign rate differential	39,335			79,799			46,168
Tax credits	(33,788		)	(16,775		)	(1,791		)
Unbenefitted operating losses	241,037			(29,900		)	(63,189		)
Non-deductible expenses	18,756			9,614			3,084
Rate change	(1,826		)	50,076			3,275
Other	(474		)	35			(714		)
Provision for (benefit from) income taxes	$	6,958		$	(122,422	)	$	(275	)

The foreign rate differential in the tax rate reconciliation table reflects the effect of operations in jurisdictions with tax rates that are different from the United States. As set forth in the components of loss before provision for (benefit from) income taxes, the Company had losses in foreign jurisdictions in each year presented. Due to lower foreign tax rates, particularly in the Cayman Islands, Ireland and Switzerland, the Company’s tax benefit in foreign loss jurisdictions is less than the “expected” tax benefit that would have resulted from losses in these jurisdictions at corporate tax rates in the United States. The difference between the tax benefit at foreign corporate tax rates and the “expected” benefit based on corporate tax rates in the United States is reflected in the tax reconciliation table under the caption “foreign rate differential.”

The unbenefitted operating losses in the tax rate reconciliation table primarily reflect a change in the valuation allowance on deferred tax assets related to the United States, Canada, Ireland and Switzerland. In 2014, the valuation allowance increased primarily due to an increase in the net operating loss in the United States with no benefit due to the uncertainty in the Company’s ability to use them in future periods. In 2013 and 2012, there was a favorable effect on the tax provision (benefit) in the tax rate reconciliation table due to a reduction of the valuation allowance in the United States resulting from the utilization of U.S. federal net operating losses. In Canada, Ireland and Switzerland losses have been incurred that cannot be benefitted due to uncertainty in the Company’s ability to use them in future periods resulting in an unfavorable effect on the tax provision.

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,
	2014			2013
	(in thousands)
Deferred tax assets:
Net operating loss	$	996,172		$	850,946
Tax credit carryforwards	265,339			180,380
Intangible assets	3,174			26,105
Deferred revenues	15,771			25,158
Stock-based compensation	61,527			63,521
Inventories	13,395			26,278
Accrued expenses	37,699			52,470
Currency translation adjustment	—			217
Construction financing lease obligation	175,853			152,688
Gross deferred tax assets	1,568,930			1,377,763
Valuation allowance	(1,409,936		)	(1,243,664		)
Total deferred tax assets	158,994			134,099
Deferred tax liabilities:
Property and equipment	(158,994		)	(134,099		)
Acquired intangibles	(11,544		)	—
Net deferred tax liabilities	$	(11,544	)	$	—

The Company presents its deferred tax assets and deferred tax liabilities gross on its consolidated balance sheets. As of December 31, 2014, the Company recorded $3.5 million of deferred tax assets and $15.0 million of deferred tax liabilities, in its prepaid expenses and other current assets and other liabilities, excluding current portion balance sheet accounts, respectively. As of December 31, 2014, $11.5 million of the deferred tax liabilities are attributable to the Company’s collaboration with BioAxone

For federal income tax purposes, as of December 31, 2014, the Company has net operating loss carryforwards of approximately $3.6 billion and tax credits of $172.4 million, which may be used to offset future federal income and tax liability, respectively. Approximately $908.5 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 $750.8 million and tax credits of $95.9 million, which may be used to offset future state income and tax liability, respectively. Approximately $98.4 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 2034. After consideration of all the evidence, both positive and negative, the Company continues to maintain a valuation allowance for the full amount of the 2014 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 $166.3 million from December 31, 2013 to December 31, 2014 primarily due to an increase in net operating losses and credits.

Unrecognized tax benefits during the two years ended December 31, 2014 consisted of the following:



	2014			2013
	(in thousands)
Unrecognized tax benefits beginning of year	$	2,024		$	4,106
Gross change for current year positions	—			1,325
Decrease for prior period positions	(27		)	(290		)
Decrease due to settlements and payments	(1,117		)	—
Decrease due to statute limitations	—			(185		)
Deconsolidation of Alios	—			(2,932		)
Unrecognized tax benefits end of year	$	880		$	2,024

The Company had gross unrecognized tax benefits of $0.9 million and $2.0 million, respectively, as of December 31, 2014 and 2013. At December 31, 2014, $0.9 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, 2014, no interest and penalties have been accrued. In 2015, 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 2010 or any other major taxing jurisdiction for years before 2009, except where the Company has net operating losses or tax credit carryforwards that originate before 2009. The Company is currently under examination by Revenue Quebec for the year ended December 31, 2013 and the Internal Revenue Service, Massachusetts and Pennsylvania 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. The Company concluded audits with the Canada Revenue Agency and Revenue Quebec during 2014 with no material adjustments.

At December 31, 2014, 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, 2014

Restructuring and Related Activities [Abstract]

Restructuring Expense


	Restructuring Expenses

Facility Lease Obligations

The Company has adopted several plans to restructure its facility operations for which it has incurred restructuring expenses in the three years ended December 31, 2014. The Company’s initial estimate of its liabilities for net ongoing costs associated with these facility obligations are recorded at fair value on the cease use date. In estimating the expenses and liabilities related to these facilities, the Company utilizes a probability-weighted discounted cash-flows of the Company’s ongoing lease obligations. In estimating the expense and liability under its lease obligations, the Company estimated (i) the costs to be incurred to satisfy rental and build-out commitments under the lease (including operating costs), (ii) the lead-time necessary to sublease the space, (iii) the projected sublease rental rates and (iv) the anticipated durations of subleases. The Company uses a credit-adjusted risk-free rate 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 these facility lease obligations, 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 these liabilities. Changes to the Company’s estimate of these liabilities are recorded as additional restructuring expenses (credits). In addition, because the Company’s estimate of these liabilities includes the application of a discount rate to reflect the time-value of money, the Company records imputed interest costs related to these liabilities each quarter. These costs are included in restructuring expenses on the Company’s consolidated statements of operations.

2003 Kendall Restructuring

In 2003, the Company adopted a plan to restructure its operations (the “2003 Kendall Restructuring”) 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 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 rentable square footage of the Kendall Square Facility related to the 2003 Kendall Restructuring currently is subleased to third parties.

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 Company uses a discount rate of 10% related to this restructuring activity.

The remaining lease obligations, which are associated with the 120,000 square foot portion of the Kendall Square Facility that the Company occupied and used for its operations, were recorded as rental expense in the period incurred until the Company incurred a cease use charge related to this portion of the Kendall Square Facility in the third quarter of 2014 in connection with transitioning its Massachusetts operations to Fan Pier in Boston, Massachusetts (the “Fan Pier Move Restructuring”).

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 activities related to 2003 restructuring liability for 2004 through 2014 were as follows:



	2014			2013			2012			2004-2014
	(in thousands)
Liability, beginning of the period	$	19,115		$	23,328		$	26,313		$	69,526
Cash payments	(17,494		)	(15,255		)	(14,853		)	(196,446		)
Cash received from subleases	12,912			10,670			10,024			88,620
Credit for portion of facility Vertex decided to occupy in 2005	—			—			—			(10,018		)
Restructuring expense	(2,937		)	372			1,844			59,914
Liability, end of the period	$	11,596		$	19,115		$	23,328		$	11,596

Fan Pier Move Restructuring

In connection with the relocation of its Massachusetts operations to Fan Pier in Boston, Massachusetts, which commenced in 2013, the Company is incurring restructuring charges related to its remaining lease obligations at its facilities in Cambridge, Massachusetts. The majority of these restructuring charges were recorded in the third quarter of 2014 upon decommissioning three facilities in Cambridge. The Company discounted the estimated cash flows related to the facilities at a discount rate of 9%. The Company will continue to incur charges through April 2018 related to the difference between the Company’s estimated future cash flows related to its lease obligations, which include an estimate for sublease income to be received if applicable, and its actual cash flows. The Fan Pier Move Restructuring included lease obligations related to the 120,000 square feet of the Kendall Square Facility that the Company continued to use for its operations following its 2013 Kendall Restructuring. The remaining rentable square footage of the Kendall Square Facility related to the Fan Pier Move Restructuring was subleased to a third party in February 2015.

The activities related to the Fan Pier relocation restructuring liability for the years ended December 31, 2013 and 2014 were as follows:



	2014			2013
	(in thousands)
Liability, beginning of the period	$	797		$	—
Cash payments	(18,271		)	(401		)
Restructuring expense	50,864			1,198
Liability, end of the period	$	33,390		$	797

Other Restructuring Activities

The Company has incurred several other restructuring activities that are unrelated to its 2003 Kendall Restructuring and the Fan Pier Move Restructuring. The most significant activity commenced in October 2013 when the Company adopted a restructuring plan that 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 activities related to the Company’s other restructuring liabilities for the years ended December 31, 2013 and 2014 were as follows:



	2014			2013
	(in thousands)
Liability, beginning of the period	$	8,441		$	—
Cash payments	(10,570		)	(22,916		)
Asset impairments and other non-cash expense	—			(7,594		)
Restructuring expense	2,998			38,951
Liability, end of the period	$	869		$	8,441

Employee Benefits

12 Months Ended

Dec. 31, 2014

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. 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. For the years ended December 31, 2014, 2013 and 2012, the Company contributed approximately $12.0 million, $12.6 million and $12.0 million to the plan, respectively. As of December 31, 2014, 755,000 shares of common stock remained available for grant under the Vertex 401(k) Plan. In 2012 and 2013, 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
	(in thousands)
Discretionary matching contributions during the year ended December 31,	$	5,930	$	10,261
Shares issued during the year ended December 31,	99		242
Shares issuable as of the year ended December 31,	—		53

Commitments and Contingencies

12 Months Ended

Dec. 31, 2014

Commitments

Commitments and Contingencies

Lease Obligations

The Company moved into its corporate headquarters in January 2014. Please refer to Note L, “Long Term Obligations,” for additional information regarding this commitment. The leases for the Company’s former headquarters expire in December 2015.

The Kendall Square Lease began in January 2003 and will expire in April 2018. The Company occupied and used for its operations approximately 120,000 square feet of the Kendall Square Facility until 2014 when it moved its operations to Fan Pier. The Company has sublease arrangements in place for the remaining rentable square footage of the Kendall Square Facility, with terms that expire concurrently with the Kendall Square Lease. Please refer to Note Q, “Restructuring Expenses,” for further information.

As of December 31, 2014, 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 as adjusted for a sublease executed in February 2015 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)
2015	$	67,206	$	19,879	$	(11,405	)	$	28,710	$	104,390
2016	67,206		19,879		(15,355		)	12,953		84,683
2017	67,206		19,879		(15,355		)	12,792		84,522
2018	67,206		6,626		(5,118		)	12,582		81,296
2019	72,589		—		—			9,330		81,919
Thereafter	680,209		—		—			78,612		758,821
Total minimum lease payments	$	1,021,622	$	66,263	$	(47,233	)	$	154,979	$	1,195,631

During 2014, 2013 and 2012, rental expense was $38.9 million, $57.7 million and $57.1 million, respectively. The majority of the Company’s lease payments related to the Fan Pier Leases are recorded as interest expense because the Company was deemed for accounting purposes to be the owner of the Buildings. Please refer to Note L, “Long Term Obligations,” for further information.

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 less than 1% to 9% per year. The following table sets forth the Company’s future minimum payments due under capital leases as of December 31, 2014:



Year	(in thousands)
2015	$	20,792
2016	14,254
2017	13,129
2018	13,027
2019	3,047
Thereafter	—
Total payments	64,249
Less: amount representing interest	(7,150		)
Present value of payments	$	57,099

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.

Financing Arrangements

The Company has outstanding $32.3 million in irrevocable stand-by letters of credit issued in connection with property leases and other similar agreements that currently are supported by an unsecured credit facility that expires in April 2015. The credit facility provides the Company’s creditor the ability to subjectively cash collateralize the letters of credit at the conclusion of any month, which is a contingency that the Company considers to have a remote possibility of occurring.

Litigation

On May 28, 2014, a purported shareholder class action Local No. 8 IBEW Retirement Plan & Trust 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 alleged 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 May 29, 2012, all in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The purported class consists of all persons (excluding defendants) who purchased the Company’s common stock between May 7, 2012 and May 29, 2012. The plaintiffs seek unspecified monetary damages, costs and attorneys’ fees as well as disgorgement of the proceeds from certain individual defendants’ sales of the Company’s stock. On October 8, 2014, the Court approved Local No. 8 IBEW Retirement Fund as lead plaintiff, and Scott and Scott LLP as lead counsel for the plaintiff and the putative class. The Company filed a motion to dismiss the complaint on December 8, 2014 and the plaintiffs filed their opposition to our motion to dismiss on January 22, 2015. The Company believes the claims to be without merit and intends to vigorously defend the litigation. As of December 31, 2014, the Company has not recorded any reserves for this purported class action.

Guaranties and Indemnifications

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.

Other 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, 2014 or 2013.

Segment Information

12 Months Ended

Dec. 31, 2014

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:



	2014		2013		2012
	(in thousands)
KALYDECO	$	463,750	$	371,285	$	171,645
INCIVEK	24,071		466,360		1,161,813
Total product revenues, net	$	487,821	$	837,645	$	1,333,458

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.



	2014		2013		2012
	(in thousands)
United States	$	361,074	$	896,952	$	1,373,516
Outside of the United States
Europe	197,611		279,557		129,786
Other	21,730		35,466		23,740
Total revenues outside of the United States	219,341		315,023		153,526
Total revenues	$	580,415	$	1,211,975	$	1,527,042

In 2014, revenues attributable to the United Kingdom were the majority of the Company’s European revenues.

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,
	2014		2013		2012		2014		2013
Walgreen Co.	12	%	<10	%	<10	%	11	%	<10	%
Bupa Home Healthcare Limited	<10	%	<10	%	N/A		20	%	14	%
Janssen Inc.	<10	%	N/A		N/A		12	%	N/A
Janssen NV	<10	%	22	%	<10	%	<10	%	28	%
AmerisourceBergen Drug Corporation	<10	%	21	%	32	%	<10	%	<10	%
McKesson Corporation	<10	%	21	%	29	%	<10	%	<10	%
Cardinal Health Incorporated	<10	%	<10	%	15	%	<10	%	<10	%

Property and Equipment, Net by Location

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



	As of December 31,
	2014		2013
	(in thousands)
United States	$	676,968	$	657,587
Outside of the United States
United Kingdom	33,628		29,970
Other	5,216		9,354
Total property and equipment, net outside of the United States	38,844		39,324
Total property and equipment, net	$	715,812	$	696,911

- Definition

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

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 5: http://www.xbrl.org/2003/role/presentationRef
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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Reference 7: 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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Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 12: http://www.xbrl.org/2003/role/presentationRef
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Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599

+ Details

Quarterly Financial Data (unaudited)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Quarterly Financial Data (unaudited)

The following table sets forth our quarterly financial data for the two years ended December 31, 2014 and have been revised to reflect discontinued operations for quarterly periods prior to the three months ended September 30, 2014.



	Three Months Ended
	March 31, 2014			June 30, 2014			September 30, 2014			December 31, 2014
	(in thousands, except per share amounts)
Revenues:
Product revenues, net	$	103,461		$	122,319		$	137,099		$	124,942
Royalty revenues	10,733			13,015			8,386			8,785
Collaborative revenues (1)	4,257			3,087			33,502			10,829
Total revenues	118,451			138,421			178,987			144,556
Costs and expenses:
Cost of product revenues	8,572			9,655			10,208			11,290
Royalty expenses	6,904			7,645			3,976			2,737
Research and development expenses	238,617			224,487			190,939			201,463
Sales, general and administrative expenses	74,212			77,446			75,224			78,527
Restructuring expenses (2)	6,188			(270		)	40,843			4,164
Total costs and expenses	334,493			318,963			321,190			298,181
Loss from operations	(216,042		)	(180,542		)	(142,203		)	(153,625		)
Interest expense, net	(15,717		)	(15,585		)	(20,384		)	(21,177		)
Other income (expense), net (3)	451			37,731			(3,990		)	(3,792		)
Loss from continuing operations before provision for income taxes	(231,308		)	(158,396		)	(166,577		)	(178,594		)
Provision for income taxes	803			693			3,419			2,043
Loss from continuing operations	(232,111		)	(159,089		)	(169,996		)	(180,637		)
Loss from discontinued operations (4)	(346		)	(293		)	(64		)	(209		)
Net loss	(232,457		)	(159,382		)	(170,060		)	(180,846		)
Loss attributable to noncontrolling interest	—			—			—			4,190
Net loss attributable to Vertex	$	(232,457	)	$	(159,382	)	$	(170,060	)	$	(176,656	)

Amounts attributable to Vertex:
Loss from continuing operations attributable to Vertex	$	(232,111	)	$	(159,089	)	$	(169,996	)	$	(176,447	)
Loss from discontinued operations (4)	(346		)	(293		)	(64		)	(209		)
Net loss attributable to Vertex	$	(232,457	)	$	(159,382	)	$	(170,060	)	$	(176,656	)

Amounts per share attributable to Vertex common shareholders:
Net loss from continuing operations:
Basic and diluted	$	(1.00	)	$	(0.68	)	$	(0.72	)	$	(0.74	)
Net loss from discontinued operations:
Basic and diluted	$	—		$	—		$	—		$	—
Net loss:
Basic and diluted	$	(1.00	)	$	(0.68	)	$	(0.72	)	$	(0.74	)
Shares used in per share calculations:
Basic and diluted	232,887			233,808			236,137			238,272



	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 (5)	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	30,955			24,695			20,048			13,281
Royalty expenses	11,788			13,236			7,291			8,983
Research and development expenses	210,200			213,994			219,442			238,461
Sales, general and administrative expenses	91,625			105,081			86,427			73,055
Restructuring expenses	39			776			12,048			27,658
Intangible asset impairment charge (4)	412,900			—			—			—
Total costs and expenses	757,507			357,782			345,256			361,438
Loss from operations	(429,139		)	(47,032		)	(123,556		)	(10,281		)
Interest expense, net	(3,469		)	(6,727		)	(104		)	(12,626		)
Other (expense) income, net	(1,175		)	(34		)	4,760			3,339
Loss from continuing operations before (benefit from) provision for income taxes	(433,783		)	(53,793		)	(118,900		)	(19,568		)
(Benefit from) provision for income taxes (6)	(126,887		)	558			2,555			1,352
Loss from continuing operations	(306,896		)	(54,351		)	(121,455		)	(20,920		)
Loss from discontinued operations, net of tax benefit (4)	(5,731		)	(7,361		)	(7,207		)	(163,629		)
Net loss	(312,627		)	(61,712		)	(128,662		)	(184,549		)
Loss from discontinued operations attributable to noncontrolling interest (4)	4,611			4,547			4,530			228,834
Net (loss) income attributable to Vertex	$	(308,016	)	$	(57,165	)	$	(124,132	)	$	44,285

Amounts attributable to Vertex:
Loss from continuing operations attributable to Vertex	$	(306,896	)	$	(54,351	)	$	(121,455	)	$	(20,920	)
(Loss) income from discontinued operations (4)	(1,120		)	(2,814		)	(2,677		)	65,205
Net (loss) income attributable to Vertex	$	(308,016	)	$	(57,165	)	$	(124,132	)	$	44,285

Amounts per share attributable to Vertex common shareholders:
Net loss from continuing operations:
Basic and diluted	$	(1.42	)	$	(0.25	)	$	(0.53	)	$	(0.09	)
Net (loss) income from discontinued operations:
Basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	0.28
Net (loss) income:
Basic and diluted	$	(1.43	)	$	(0.26	)	$	(0.54	)	$	0.19
Shares used in per share calculations:
Basic and diluted	215,421			222,053			230,505			231,264


1.	During the third quarter of 2014, the Company received a non-refundable up-front payment of $30.0 million from Janssen Inc., which was recorded as collaborative revenue in the third quarter. See Note B, “Collaborative Arrangements,” for further information.


2.	During the third quarter of 2014, the Company recorded $40.8 million of restructuring expenses primarily related to the relocation of its corporate headquarters to Boston from Cambridge. See Note Q, “Restructuring Expenses,” for further information.


3.	During the second quarter of 2014, the Company received a one-time cash payment of $36.7 million from its landlord pursuant to the Fan Pier Leases, which was recorded as other income in the second quarter. See Note O, “Other Arrangements,” for further information.

During the fourth quarter of 2013, the Company deconsolidated Alios, which included certain charges attributable to Vertex related to the 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. As of September 30, 2014, the Company concluded that it no longer had significant continuing involvement with Alios due to its intent and ability to terminate the Alios Agreement; therefore, the operations of Alios, including collaboration expenses reimbursed by Vertex are presented as discontinued operations for the periods presented in these consolidated financial statements.


5.	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.


6.	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 (Policies)

12 Months Ended

Dec. 31, 2014

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, 2014:



	Trade Allowances			Rebates, Chargebacks and Discounts			Product Returns			Other Incentives			Total
	(in thousands)
2014
Beginning Balance	$	1,535		$	68,244		$	15,799		$	1,555		$	87,133
Provision related to current period sales	8,468			35,713			2,478			1,347			48,006
Adjustments related to prior period sales	(43		)	329			3,056			(72		)	3,270
Credits/payments made	(8,497		)	(75,184		)	(16,620		)	(2,085		)	(102,386		)
Ending Balance	$	1,463		$	29,102		$	4,713		$	745		$	36,023

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

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.

Marketable Securities

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.

Accounts Receivable

Stock-based Compensation Expense

Research and Development Expenses

Advertising Expenses

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

Inventories

Property and Equipment

Capital Leases

Income Taxes

Variable Interest Entities

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

Goodwill

Noncontrolling Interest

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 2014 that had a material effect on its consolidated financial statements.

Nature of Business and Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2014

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, 2014:



	Trade Allowances			Rebates, Chargebacks and Discounts			Product Returns			Other Incentives			Total
	(in thousands)
2014
Beginning Balance	$	1,535		$	68,244		$	15,799		$	1,555		$	87,133
Provision related to current period sales	8,468			35,713			2,478			1,347			48,006
Adjustments related to prior period sales	(43		)	329			3,056			(72		)	3,270
Credits/payments made	(8,497		)	(75,184		)	(16,620		)	(2,085		)	(102,386		)
Ending Balance	$	1,463		$	29,102		$	4,713		$	745		$	36,023

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

Collaborative Arrangements (Tables)

12 Months Ended

Dec. 31, 2014

Collaborative Arrangements

Collaborator revenues

During the three years ended December 31, 2014, the Company recognized the following revenues attributable to the Janssen HCV collaboration:



	2014		2013		2012
	(in thousands)
Royalty revenues	$	13,481	$	130,724	$	117,592
Collaborative revenues:
Up-front and amendment payments revenues	$	—	$	190,345	$	12,428
Net reimbursement (payment) for telaprevir development costs	7,104		2,793		(3,507		)
Reimbursement for manufacturing services	—		10,299		7,257
Total collaborative revenues attributable to the Janssen HCV collaboration	$	7,104	$	203,437	$	16,178
Total revenues attributable to the Janssen HCV collaboration	$	20,585	$	334,161	$	133,770

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

A summary of Alios’ net loss (income) attributable to noncontrolling interest for 2012 and 2013 is as follows:



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

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2014

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted



	2014			2013			2012
	(in thousands, except per share amounts)
Basic (loss) income from continuing operations per share attributable to Vertex common shareholder calculation:
(Loss) income from continuing operations attributable to Vertex common shareholders	$	(737,643	)	$	(503,622	)	$	32,271
Less: Undistributed earnings allocated to participating securities	—			—			(322		)
(Loss) income from continuing operations attributable to Vertex common shareholders—basic	$	(737,643	)	$	(503,622	)	$	31,949
Basic weighted-average common shares outstanding	235,307			224,906			211,946
Basic (loss) income from continuing operations per common share attributable to Vertex	$	(3.14	)	$	(2.24	)	$	0.15
Diluted (loss) income from continuing operations per share attributable to Vertex common shareholder calculation:
(Loss) income from continuing operations attributable to Vertex common shareholders	$	(737,643	)	$	(503,622	)	$	32,271
Less: Undistributed earnings allocated to participating securities	—			—			(317		)
(Loss) income from continuing operations attributable to Vertex common shareholders—diluted	$	(737,643	)	$	(503,622	)	$	31,954
Basic weighted-average common shares outstanding	235,307			224,906			211,946
Effect of potentially dilutive securities:
Stock options	—			—			3,219
Other	—			—			97
Diluted weighted-average common shares outstanding	235,307			224,906			215,262
Diluted (loss) income from continuing operations per common share attributable to Vertex	$	(3.14	)	$	(2.24	)	$	0.15

Potential gross common equivalent shares



	2014	2013	2012
	(in thousands)
Stock options	12,003	15,729	16,507
Convertible senior subordinated notes	—	—	8,192
Unvested restricted stock and restricted stock units	3,091	2,165	2,253

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2014

Fair Value Disclosures [Abstract]

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

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



	Fair Value Measurements as of December 31, 2014
			Fair Value Hierarchy
	Total		Level 1		Level 2		Level 3
	(in thousands)
Financial assets carried at fair value:
Cash equivalents:
Money market funds	$	290,531	$	290,531	$	—	$	—
Marketable securities:
Government-sponsored enterprise securities	463,750		463,750		—		—
Commercial paper	51,746		—		51,746		—
Corporate debt securities	246,351		—		246,351		—
Prepaid and other current assets:
Foreign currency forward contracts	2,011		—		2,011		—
Total	$	1,054,389	$	754,281	$	300,108	$	—

Marketable Securities (Tables)

12 Months Ended

Dec. 31, 2014

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, 2014
Cash and cash equivalents:
Cash and money market funds	$	625,259	$	—	$	—		$	625,259
Total cash and cash equivalents	$	625,259	$	—	$	—		$	625,259
Marketable securities:
Government-sponsored enterprise securities (due within 1 year)	$	463,788	$	14	$	(52	)	$	463,750
Commercial paper (due within 1 year)	51,674		72		—			51,746
Corporate debt securities (due within 1 year)	196,065		2		(66		)	196,001
Corporate debt securities (due after 1 year through 5 years)	50,443		—		(93		)	50,350
Total marketable securities	$	761,970	$	88	$	(211	)	$	761,847
Total cash, cash equivalents and marketable securities	$	1,387,229	$	88	$	(211	)	$	1,387,106

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

Accumulated Other Comprehensive Loss (Tables)

12 Months Ended

Dec. 31, 2014

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 (losses) on marketable securities			Unrealized (losses) gains on foreign currency forward contracts			Total
	(in thousands)
Balance at December 31, 2013	$	(325	)	$	42		$	(23	)	$	(306	)
Other comprehensive (loss) income before reclassifications	(646		)	(165		)	3,591			2,780
Amounts reclassified from accumulated other comprehensive loss	—			—			(1,557		)	(1,557		)
Net current period other comprehensive (loss) income	(646		)	(165		)	2,034			1,223
Balance at December 31, 2014	$	(971	)	$	(123	)	$	2,011		$	917

Hedging (Tables)

12 Months Ended

Dec. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Cash Flow Hedging Instruments

The following table summarizes the notional amount of the Company’s outstanding foreign currency forward contracts designated as cash flow hedges:



	As of December 31, 2014		As of December 31, 2013
Foreign Currency	(in thousands)
Euro	$	20,209	$	17,468
British pound sterling	13,515		—
Total foreign currency forward contracts	$	33,724	$	17,468

Schedule of Foreign Exchange Contracts

The following table summarizes the fair value of the Company’s outstanding foreign currency forward contracts included on the Company’s consolidated balance sheets:



	As of December 31, 2014		As of December 31, 2013
	(in thousands)
Fair value - assets	$	2,011	$	—
Fair value - liabilities	—		(23		)
Net carrying value	$	2,011	$	(23	)

Inventories (Tables)

12 Months Ended

Dec. 31, 2014

Inventory Disclosure [Abstract]

Schedule of Inventories by Type

Inventories consisted of the following:



	As of December 31,
	2014		2013
	(in thousands)
Raw materials	$	8,506	$	489
Work-in-process	20,508		9,981
Finished goods	1,834		3,677
Total	$	30,848	$	14,147

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2014

Property, Plant and Equipment [Abstract]

Schedule of Property and equipment

Property and equipment, net consisted of the following:



	As of December 31,
	2014			2013
	(in thousands)
Buildings	$	531,642		$	506,056
Furniture and equipment	202,846			190,555
Software	113,875			102,520
Leasehold improvements	99,942			163,019
Computers	45,893			43,096
Total property and equipment, gross	994,198			1,005,246
Less: accumulated depreciation	(278,386		)	(308,335		)
Total property and equipment, net	$	715,812		$	696,911

Additional Balance Sheet Detail (Tables)

12 Months Ended

Dec. 31, 2014

Payables and Accruals [Abstract]

Prepaid and other current assets

Prepaid and other current assets consisted of the following:



	As of December 31,
	2014		2013
	(in thousands)
Prepaid expenses	$	17,569	$	15,353
Taxes receivable	14,093		7,959
Restricted Cash (VIE)	8,418		—
Deferred tax asset	3,500		—
Fair value foreign currency forward contracts	2,011		—
Other	7,002		524
Total	$	52,593	$	23,836

Accrued expenses and other current liabilities

Accrued expenses consisted of the following:



	As of December 31,
	2014		2013
	(in thousands)
Payroll and benefits	$	91,175	$	76,785
Research, development and commercial contract costs	38,143		52,468
Product revenue allowances	34,554		85,510
Royalty payable	12,218		18,334
Taxes payable and reserves (including VIE taxes payable)	10,038		11,146
Professional fees	7,004		10,593
Interest	5,444		—
Other	11,100		16,241
Total	$	209,676	$	271,077

Other liabilities, current portion consisted of the following:



	As of December 31,
	2014		2013
	(in thousands)
Deferred rent	$	4,015	$	16,652
Customer deposits	—		7,692
Other	782		392
Total	$	4,797	$	24,736

Common Stock, Preferred Stock and Equity Plans (Tables)

12 Months Ended

Dec. 31, 2014

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, 2014
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, RS and RSU	2,857,275	9,362,898
2006 Stock and Option Plan	Employees, Non-employee Directors and Consultants	NSO, RS and RSU	11,428,741	1,189,473
1996 Stock and Option Plan	Employees, Non-employee Directors, Advisors and Consultants	NSO, ISO and RS	623,789	—
		Total	14,909,805	10,552,371

Outstanding and vested options

The following table summarizes information related to the outstanding and exercisable options during the year ended December 31, 2014:



	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, 2013	15,729		$	44.40
Granted	3,614		$	84.33
Exercised	(6,153	)	$	41.53
Forfeited	(1,173	)	$	55.28
Expired	(14	)	$	66.43
Outstanding at December 31, 2014	12,003		$	56.81	6.94	$	761,274
Exercisable at December 31, 2014	5,553		$	45.61	5.43	$	414,345
Exercisable and Expected to Vest at December 31, 2014	11,380		$	55.94	6.85	$	731,677

Stock options outstanding and exercisable

The following table summarizes information about stock options outstanding and exercisable at December 31, 2014:



	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)
$10.41–$20.00	214	2.25	$	17.66	214	$	17.66
$20.01–$40.00	3,702	4.40	$	35.07	2,989	$	34.73
$40.01–$60.00	3,690	7.46	$	48.52	1,435	$	50.48
$60.01–$80.00	1,980	8.85	$	76.13	442	$	74.76
$80.01–$100.00	2,401	8.87	$	90.23	473	$	84.9
$100.01–$112.48	16	9.83	$	110.58	—	$	—
Total	12,003	6.94	$	56.81	5,553	$	45.61

Restricted stock activity

The following table summarizes the restricted stock activity of the Company during the year ended December 31, 2014:



	Restricted Stock		Weighted-average Grant-date Fair Value
	(in thousands)		(per share)
Unvested at December 31, 2013	2,046		$	52.66
Granted	1,897		$	92.00
Vested	(595	)	$	50.65
Cancelled	(441	)	$	56.36
Unvested at December 31, 2014	2,907		$	78.18

Shares issued under Employee Stock Purchase Plan

In 2014, the following shares were issued to employees under the ESPP:



	Year Ended December 31, 2014
	(in thousands, except per share amount)
Number of shares	357
Average price paid per share	$	53.65

Stock-based Compensation Expense (Tables)

12 Months Ended

Dec. 31, 2014

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, 2014 was as follows:



	2014		2013		2012
	(in thousands)
Stock-based compensation expense by line item:
Research and development expenses	$	116,998	$	81,183	$	71,243
Sales, general and administrative expenses	60,544		45,652		42,561
Total stock-based compensation expense included in costs and expenses	$	177,542	$	126,835	$	113,804

Stock-based compensation expense by type of award

The stock-based compensation expense by type of award during the three years ended December 31, 2014 was as follows:



	2014			2013			2012
	(in thousands)
Stock-based compensation expense by type of award:
Stock options	$	99,961		$	84,599		$	78,566
Restricted stock and restricted stock units	70,678			36,479			29,194
ESPP share issuances	8,326			6,805			7,298
Less: stock-based compensation expense capitalized to inventories	(1,423		)	(1,048		)	(1,254		)
Total stock-based compensation expense included in costs and expenses	$	177,542		$	126,835		$	113,804

Unrecognized stock-based compensation expense, net of estimated forfeitures



	As of December 31, 2014
	Unrecognized Expense Net of Estimated Forfeitures		Weighted-average Recognition Period
	(in thousands)		(in years)
Type of award:
Stock options	$	156,969	2.13
Restricted stock and restricted stock units	$	148,037	2.79
ESPP share issuances	$	4,262	0.61

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

The fair value of each option granted during 2014, 2013 and 2012 was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions:



	2014		2013		2012
Expected stock price volatility	50.86	%	46.20	%	47.93	%
Risk-free interest rate	1.77	%	1.25	%	0.95	%
Expected term of options (in years)	5.47		5.81		5.78
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 2014, 2013 and 2012:



	2014		2013		2012
Expected stock price volatility	60.32	%	54.69	%	46.90	%
Risk-free interest rate	0.09	%	0.08	%	0.16	%
Expected term (in years)	0.75		0.74		0.74
Expected annual dividends	—		—		—

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

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

The components of loss from continuing operations before provision for (benefit from) income taxes during the three years ended December 31, 2014 consisted of the following:



	2014			2013			2012
	(in thousands)
United States	$	(645,465	)	$	(10,638	)	$	231,542
Foreign	(89,410		)	(615,406		)	(199,546		)
(Loss) income from continuing operations before provision for (benefit from) income taxes	$	(734,875	)	$	(626,044	)	$	31,996

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

The components of the provision for (benefit from) income taxes from continuing operations during the three years ended December 31, 2014 consisted of the following:



	2014		2013			2012
	(in thousands)
Current taxes:
United States	$	2,853	$	—		$	—
Foreign	2,457		1,085			(1,865		)
State	1,366		4,080			1,590
Total current taxes	$	6,676	$	5,165		$	(275	)
Deferred taxes:
United States	$	244	$	—		$	—
Foreign	—		(127,587		)	—
State	38		—			—
Total deferred taxes	$	282	$	(127,587	)	$	—
Provision for (benefit from) income taxes	$	6,958	$	(122,422	)	$	(275	)

Reconciliation of the provision for (benefit from) income taxes



	2014			2013			2012
	(in thousands)
(Loss) income from continuing operations before provision for (benefit from) income taxes	$	(734,875	)	$	(626,044	)	$	31,996
Expected tax provision (benefit)	(257,206		)	(219,115		)	11,199
State taxes, net of federal benefit	1,124			3,844			1,693
Foreign rate differential	39,335			79,799			46,168
Tax credits	(33,788		)	(16,775		)	(1,791		)
Unbenefitted operating losses	241,037			(29,900		)	(63,189		)
Non-deductible expenses	18,756			9,614			3,084
Rate change	(1,826		)	50,076			3,275
Other	(474		)	35			(714		)
Provision for (benefit from) income taxes	$	6,958		$	(122,422	)	$	(275	)

Schedule of deferred tax assets and liabilities

The components of the deferred taxes were as follows:



	As of December 31,
	2014			2013
	(in thousands)
Deferred tax assets:
Net operating loss	$	996,172		$	850,946
Tax credit carryforwards	265,339			180,380
Intangible assets	3,174			26,105
Deferred revenues	15,771			25,158
Stock-based compensation	61,527			63,521
Inventories	13,395			26,278
Accrued expenses	37,699			52,470
Currency translation adjustment	—			217
Construction financing lease obligation	175,853			152,688
Gross deferred tax assets	1,568,930			1,377,763
Valuation allowance	(1,409,936		)	(1,243,664		)
Total deferred tax assets	158,994			134,099
Deferred tax liabilities:
Property and equipment	(158,994		)	(134,099		)
Acquired intangibles	(11,544		)	—
Net deferred tax liabilities	$	(11,544	)	$	—

Schedule of unrecognized tax benefits

Unrecognized tax benefits during the two years ended December 31, 2014 consisted of the following:



	2014			2013
	(in thousands)
Unrecognized tax benefits beginning of year	$	2,024		$	4,106
Gross change for current year positions	—			1,325
Decrease for prior period positions	(27		)	(290		)
Decrease due to settlements and payments	(1,117		)	—
Decrease due to statute limitations	—			(185		)
Deconsolidation of Alios	—			(2,932		)
Unrecognized tax benefits end of year	$	880		$	2,024

Restructuring Expense (Tables)

12 Months Ended

Dec. 31, 2014

2003 Restructuring

Restructuring Cost and Reserve [Line Items]

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 activities related to 2003 restructuring liability for 2004 through 2014 were as follows:



	2014			2013			2012			2004-2014
	(in thousands)
Liability, beginning of the period	$	19,115		$	23,328		$	26,313		$	69,526
Cash payments	(17,494		)	(15,255		)	(14,853		)	(196,446		)
Cash received from subleases	12,912			10,670			10,024			88,620
Credit for portion of facility Vertex decided to occupy in 2005	—			—			—			(10,018		)
Restructuring expense	(2,937		)	372			1,844			59,914
Liability, end of the period	$	11,596		$	19,115		$	23,328		$	11,596

Fan Pier Move Restructuring

Restructuring Cost and Reserve [Line Items]

Restructuring and related liability

The activities related to the Fan Pier relocation restructuring liability for the years ended December 31, 2013 and 2014 were as follows:



	2014			2013
	(in thousands)
Liability, beginning of the period	$	797		$	—
Cash payments	(18,271		)	(401		)
Restructuring expense	50,864			1,198
Liability, end of the period	$	33,390		$	797

Other Restructuring

Restructuring Cost and Reserve [Line Items]

Restructuring and related liability

The activities related to the Company’s other restructuring liabilities for the years ended December 31, 2013 and 2014 were as follows:



	2014			2013
	(in thousands)
Liability, beginning of the period	$	8,441		$	—
Cash payments	(10,570		)	(22,916		)
Asset impairments and other non-cash expense	—			(7,594		)
Restructuring expense	2,998			38,951
Liability, end of the period	$	869		$	8,441

Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2014

Compensation and Retirement Disclosure [Abstract]

Matching contributions to the Vertex 401(k) Plan

In 2012 and 2013, 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
	(in thousands)
Discretionary matching contributions during the year ended December 31,	$	5,930	$	10,261
Shares issued during the year ended December 31,	99		242
Shares issuable as of the year ended December 31,	—		53

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2014

Commitments

Future minimum commitments under Fan Pier Leases and facility 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)
2015	$	67,206	$	19,879	$	(11,405	)	$	28,710	$	104,390
2016	67,206		19,879		(15,355		)	12,953		84,683
2017	67,206		19,879		(15,355		)	12,792		84,522
2018	67,206		6,626		(5,118		)	12,582		81,296
2019	72,589		—		—			9,330		81,919
Thereafter	680,209		—		—			78,612		758,821
Total minimum lease payments	$	1,021,622	$	66,263	$	(47,233	)	$	154,979	$	1,195,631

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, 2014:



Year	(in thousands)
2015	$	20,792
2016	14,254
2017	13,129
2018	13,027
2019	3,047
Thereafter	—
Total payments	64,249
Less: amount representing interest	(7,150		)
Present value of payments	$	57,099

Segment Information (Tables)

12 Months Ended

Dec. 31, 2014

Segment Reporting [Abstract]

Revenues by Product

Product revenues, net consisted of the following:



	2014		2013		2012
	(in thousands)
KALYDECO	$	463,750	$	371,285	$	171,645
INCIVEK	24,071		466,360		1,161,813
Total product revenues, net	$	487,821	$	837,645	$	1,333,458

Revenues and Property and Equipment by Location

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



	As of December 31,
	2014		2013
	(in thousands)
United States	$	676,968	$	657,587
Outside of the United States
United Kingdom	33,628		29,970
Other	5,216		9,354
Total property and equipment, net outside of the United States	38,844		39,324
Total property and equipment, net	$	715,812	$	696,911



	2014		2013		2012
	(in thousands)
United States	$	361,074	$	896,952	$	1,373,516
Outside of the United States
Europe	197,611		279,557		129,786
Other	21,730		35,466		23,740
Total revenues outside of the United States	219,341		315,023		153,526
Total revenues	$	580,415	$	1,211,975	$	1,527,042

Significant Customers



	Percent of Total Gross Revenues						Percent of Gross Accounts Receivable
	Year Ended December 31,						As of December 31,
	2014		2013		2012		2014		2013
Walgreen Co.	12	%	<10	%	<10	%	11	%	<10	%
Bupa Home Healthcare Limited	<10	%	<10	%	N/A		20	%	14	%
Janssen Inc.	<10	%	N/A		N/A		12	%	N/A
Janssen NV	<10	%	22	%	<10	%	<10	%	28	%
AmerisourceBergen Drug Corporation	<10	%	21	%	32	%	<10	%	<10	%
McKesson Corporation	<10	%	21	%	29	%	<10	%	<10	%
Cardinal Health Incorporated	<10	%	<10	%	15	%	<10	%	<10	%

Quarterly Financial Data (unaudited) (Tables)

12 Months Ended

Dec. 31, 2014

Quarterly Financial Information Disclosure [Abstract]

Schedule of quarterly financial data



	Three Months Ended
	March 31, 2014			June 30, 2014			September 30, 2014			December 31, 2014
	(in thousands, except per share amounts)
Revenues:
Product revenues, net	$	103,461		$	122,319		$	137,099		$	124,942
Royalty revenues	10,733			13,015			8,386			8,785
Collaborative revenues (1)	4,257			3,087			33,502			10,829
Total revenues	118,451			138,421			178,987			144,556
Costs and expenses:
Cost of product revenues	8,572			9,655			10,208			11,290
Royalty expenses	6,904			7,645			3,976			2,737
Research and development expenses	238,617			224,487			190,939			201,463
Sales, general and administrative expenses	74,212			77,446			75,224			78,527
Restructuring expenses (2)	6,188			(270		)	40,843			4,164
Total costs and expenses	334,493			318,963			321,190			298,181
Loss from operations	(216,042		)	(180,542		)	(142,203		)	(153,625		)
Interest expense, net	(15,717		)	(15,585		)	(20,384		)	(21,177		)
Other income (expense), net (3)	451			37,731			(3,990		)	(3,792		)
Loss from continuing operations before provision for income taxes	(231,308		)	(158,396		)	(166,577		)	(178,594		)
Provision for income taxes	803			693			3,419			2,043
Loss from continuing operations	(232,111		)	(159,089		)	(169,996		)	(180,637		)
Loss from discontinued operations (4)	(346		)	(293		)	(64		)	(209		)
Net loss	(232,457		)	(159,382		)	(170,060		)	(180,846		)
Loss attributable to noncontrolling interest	—			—			—			4,190
Net loss attributable to Vertex	$	(232,457	)	$	(159,382	)	$	(170,060	)	$	(176,656	)

Amounts attributable to Vertex:
Loss from continuing operations attributable to Vertex	$	(232,111	)	$	(159,089	)	$	(169,996	)	$	(176,447	)
Loss from discontinued operations (4)	(346		)	(293		)	(64		)	(209		)
Net loss attributable to Vertex	$	(232,457	)	$	(159,382	)	$	(170,060	)	$	(176,656	)

Amounts per share attributable to Vertex common shareholders:
Net loss from continuing operations:
Basic and diluted	$	(1.00	)	$	(0.68	)	$	(0.72	)	$	(0.74	)
Net loss from discontinued operations:
Basic and diluted	$	—		$	—		$	—		$	—
Net loss:
Basic and diluted	$	(1.00	)	$	(0.68	)	$	(0.72	)	$	(0.74	)
Shares used in per share calculations:
Basic and diluted	232,887			233,808			236,137			238,272



	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 (5)	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	30,955			24,695			20,048			13,281
Royalty expenses	11,788			13,236			7,291			8,983
Research and development expenses	210,200			213,994			219,442			238,461
Sales, general and administrative expenses	91,625			105,081			86,427			73,055
Restructuring expenses	39			776			12,048			27,658
Intangible asset impairment charge (4)	412,900			—			—			—
Total costs and expenses	757,507			357,782			345,256			361,438
Loss from operations	(429,139		)	(47,032		)	(123,556		)	(10,281		)
Interest expense, net	(3,469		)	(6,727		)	(104		)	(12,626		)
Other (expense) income, net	(1,175		)	(34		)	4,760			3,339
Loss from continuing operations before (benefit from) provision for income taxes	(433,783		)	(53,793		)	(118,900		)	(19,568		)
(Benefit from) provision for income taxes (6)	(126,887		)	558			2,555			1,352
Loss from continuing operations	(306,896		)	(54,351		)	(121,455		)	(20,920		)
Loss from discontinued operations, net of tax benefit (4)	(5,731		)	(7,361		)	(7,207		)	(163,629		)
Net loss	(312,627		)	(61,712		)	(128,662		)	(184,549		)
Loss from discontinued operations attributable to noncontrolling interest (4)	4,611			4,547			4,530			228,834
Net (loss) income attributable to Vertex	$	(308,016	)	$	(57,165	)	$	(124,132	)	$	44,285

Amounts attributable to Vertex:
Loss from continuing operations attributable to Vertex	$	(306,896	)	$	(54,351	)	$	(121,455	)	$	(20,920	)
(Loss) income from discontinued operations (4)	(1,120		)	(2,814		)	(2,677		)	65,205
Net (loss) income attributable to Vertex	$	(308,016	)	$	(57,165	)	$	(124,132	)	$	44,285

Amounts per share attributable to Vertex common shareholders:
Net loss from continuing operations:
Basic and diluted	$	(1.42	)	$	(0.25	)	$	(0.53	)	$	(0.09	)
Net (loss) income from discontinued operations:
Basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.01	)	$	0.28
Net (loss) income:
Basic and diluted	$	(1.43	)	$	(0.26	)	$	(0.54	)	$	0.19
Shares used in per share calculations:
Basic and diluted	215,421			222,053			230,505			231,264


1.	During the third quarter of 2014, the Company received a non-refundable up-front payment of $30.0 million from Janssen Inc., which was recorded as collaborative revenue in the third quarter. See Note B, “Collaborative Arrangements,” for further information.


2.	During the third quarter of 2014, the Company recorded $40.8 million of restructuring expenses primarily related to the relocation of its corporate headquarters to Boston from Cambridge. See Note Q, “Restructuring Expenses,” for further information.


3.	During the second quarter of 2014, the Company received a one-time cash payment of $36.7 million from its landlord pursuant to the Fan Pier Leases, which was recorded as other income in the second quarter. See Note O, “Other Arrangements,” for further information.


5.	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.


6.	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) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Activity related to product revenues allowances and reserve categories
Beginning Balance				$ 87,133				$ 75,393	$ 87,133	$ 75,393	$ 69,363
Provision related to current period sales									48,006	250,944	294,025
Adjustments related to prior period sales									3,270	19,738	5,482
Credits/payments made									(102,386)	(258,942)	(293,477)
Ending Balance	$ 36,023				$ 87,133				36,023	87,133	75,393	$ 69,363
(Loss) income from continuing operations attributable to Vertex common shareholders	(176,656)	$ (170,060)	$ (159,382)	(232,457)	44,285	$ (124,132)	$ (57,165)	(308,016)	$ (738,555)	$ (445,028)	$ (107,032)
Basic EPS (usd per share)									$ (3.14)	$ (1.98)	$ (0.50)
Cash, cash equivalents and marketable securities	1,390,000								$ 1,390,000
Gross product sales adjusted, related to prior period sales (percent)										0.30%	0.70%	1.30%
Percentage of employees eligible for acceleration of equity awards (percent)									5.00%
Trade Allowances
Activity related to product revenues allowances and reserve categories
Beginning Balance				1,535				5,416	$ 1,535	$ 5,416	$ 11,162
Provision related to current period sales									8,468	31,395	55,913
Adjustments related to prior period sales									(43)	343	29
Credits/payments made									(8,497)	(35,619)	(61,688)
Ending Balance	1,463				1,535				1,463	1,535	5,416	$ 11,162
Rebates, Chargebacks and Discounts
Activity related to product revenues allowances and reserve categories
Beginning Balance				68,244				63,560	68,244	63,560	52,659
Provision related to current period sales									35,713	204,459	216,942
Adjustments related to prior period sales									329	4,474	3,883
Credits/payments made									(75,184)	(204,249)	(209,924)
Ending Balance	29,102				68,244				29,102	68,244	63,560	52,659
Product Returns
Activity related to product revenues allowances and reserve categories
Beginning Balance				15,799				2,852	15,799	2,852	340
Provision related to current period sales									2,478	5,795	2,067
Adjustments related to prior period sales									3,056	15,149	1,498
Credits/payments made									(16,620)	(7,997)	(1,053)
Ending Balance	4,713				15,799				4,713	15,799	2,852	340
Other Incentives
Activity related to product revenues allowances and reserve categories
Beginning Balance				$ 1,555				$ 3,565	1,555	3,565	5,202
Provision related to current period sales									1,347	9,295	19,103
Adjustments related to prior period sales									(72)	(228)	72
Credits/payments made									(2,085)	(11,077)	(20,812)
Ending Balance	745				$ 1,555				$ 745	$ 1,555	$ 3,565	$ 5,202
INCIVEK
Activity related to product revenues allowances and reserve categories
Revenue Recognition, Sales Rebates, Accrual for Rebates	$ 16,200

Nature of Business and Accounting Policies (Details 2) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Sales, General and Administrative Expenses
Advertising Expenses	$ 16.2	$ 19.6	$ 58.6

Nature of Business and Accounting Policies (Details 3) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Foreign Currency Translation
Foreign currency translation gain (loss), net of tax	$ (1.0)	$ (0.3)	$ (0.7)
Foreign currency transaction gain (loss), before tax	$ (6.4)	$ 5.1	$ (0.4)
Buildings
Property, Plant and Equipment [Line Items]
Property and equipment useful life	40 years
Minimum \| Furniture and equipment
Property, Plant and Equipment [Line Items]
Property and equipment useful life	7 years
Minimum \| Computers and software
Property, Plant and Equipment [Line Items]
Property and equipment useful life	3 years
Maximum \| Furniture and equipment
Property, Plant and Equipment [Line Items]
Property and equipment useful life	10 years
Maximum \| Computers and software
Property, Plant and Equipment [Line Items]
Property and equipment useful life	5 years

Collaborative Arrangements (Details) $ in Thousands	1 Months Ended		3 Months Ended								12 Months Ended
Collaborative Arrangements (Details) $ in Thousands	Oct. 31, 2014 USD ($)	Apr. 30, 2011 USD ($)	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Sep. 30, 2013 USD ($)	Jun. 30, 2013 USD ($)	Mar. 31, 2013 USD ($)	Dec. 31, 2014 USD ($) payment	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2006 USD ($)	Nov. 30, 2013 USD ($)
Collaborative revenues:
Royalty revenues			$ 8,785	$ 8,386	$ 13,015	$ 10,733	$ 36,887	$ 27,012	$ 49,120	$ 43,573	$ 40,919	$ 156,592	$ 141,498
Collaborative revenues			10,829	33,502	3,087	4,257	185,448	8,035	6,841	17,414	51,675	217,738	52,086
Total revenues			144,556	178,987	138,421	118,451	351,157	221,700	310,750	328,368	580,415	1,211,975	1,527,042
Intangible asset impairment charges							0	0	0	412,900	0	412,900	0
Noncontrolling Interest (Alios)
Provision for (benefit from) income taxes			2,043	3,419	693	803	1,352	2,555	558	(126,887)	6,958	(122,422)	(275)
Net loss (income) attributable to noncontrolling interest (Alios)			(4,190)	0	0	0
Income (Loss) from Continuing Operations Attributable to Noncontrolling Interest											(4,190)	0	0
Noncontrolling interest			21,177				0				21,177	0
Collaborative revenues			10,829	33,502	$ 3,087	$ 4,257	185,448	$ 8,035	$ 6,841	$ 17,414	$ 51,675	217,738	52,086
Cystic Fibrosis Foundation Therapeutics Incorporated
Schedule of Collaborative Arrangements
Collaborative funding		$ 75,000
Number of years over which funding will be made (in years)		5 years
Milestone payments												9,300	9,300
Number of commercial milestone payments for achievement of certain sales levels for corrector compound such as VX-809 or VX-661 (in payments) \| payment											2
Collaborative revenues:
Collaborative revenues											$ 6,500	14,300	17,000
Noncontrolling Interest (Alios)
Collaborative revenues											$ 6,500	14,300	17,000
Janssen
Schedule of Collaborative Arrangements
Drug development costs to be paid by collaborator (percent)														50.00%
Up-front license payment			5,000	$ 30,000										$ 165,000
Deferred revenue related to up-front license payment															$ 32,100
Tiered royalty average range, as a percentage of net sales in the Janssen territories											20.00%
License fee paid upon amendment of agreement							152,000
Collaborative revenues:
Royalty revenues											$ 13,481	130,724	117,592
Up-front and amendment payments revenues											0	190,345	12,428
Net reimbursement (payment) for telaprevir development costs											7,104	2,793	(3,507)
Reimbursement for manufacturing services											0	10,299	7,257
Collaborative revenues							182,400				7,104	203,437	16,178
Total revenues											20,585	334,161	133,770
Noncontrolling Interest (Alios)
Collaborative revenues							182,400				7,104	203,437	16,178
Reimbursement for research and development activities											9,100
Mitsubishi Tanabe
Collaborative revenues:
Collaborative revenues											0	0	18,900
Noncontrolling Interest (Alios)
Collaborative revenues											0	0	18,900
Alios BioPharma, Inc
Noncontrolling Interest (Alios)
Loss before provision for (benefit from) income taxes												283,747	20,044
Decrease (increase) in fair value of contingent milestone and royalty payments												124,920	(114,970)
Provision for (benefit from) income taxes												(166,145)	39,029
Net loss (income) attributable to noncontrolling interest (Alios)												242,522	$ (55,897)
Contingent consideration payable							0					0
BioAxone Biosciences, Inc
Schedule of Collaborative Arrangements
Up-front license payment			10,000
Noncontrolling Interest (Alios)
Maximum license fees and milestone payments	$ 90,000
Contingent consideration payable	26,600
Noncontrolling interest at date of business combination, fair value	$ 25,400
Income (Loss) from Continuing Operations Attributable to Noncontrolling Interest											(4,200)
Increase in contingent consideration			500
Noncontrolling interest			21,200								21,200
Research and Development Arrangement \| Alios BioPharma, Inc
Collaborative revenues:
Intangible asset impairment charges							250,600
Change in deferred income taxes							$ 102,100
Deconsolidation, Gain (Loss), Amount												68,200
Upfront license fees and milestone payments												$ 120,000
Variable Interest Entity, Primary Beneficiary \| BioAxone Biosciences, Inc
Noncontrolling Interest (Alios)
In-process research and development intangible asset			29,000								29,000
Deferred tax liability			11,300								11,300
Cash and cash equivalents			$ 8,400								$ 8,400

Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Basic (loss) income from continuing operations per share attributable to Vertex common shareholder calculation:
(Loss) income from continuing operations	$ (176,447)	$ (169,996)	$ (159,089)	$ (232,111)	$ (20,920)	$ (121,455)	$ (54,351)	$ (306,896)	$ (737,643)	$ (503,622)	$ 32,271
Less: Undistributed earnings allocated to participating securities									0	0	(322)
(Loss) income from continuing operations attributable to Vertex common shareholders—basic									$ (737,643)	$ (503,622)	$ 31,949
Basic weighted-average common shares outstanding									235,307	224,906	211,946
Basic (loss) income from continuing operations per common share attributable to Vertex (usd per share)									$ (3.14)	$ (2.24)	$ 0.15
Diluted (loss) income from continuing operations per share attributable to Vertex common shareholder calculation:
Less: Undistributed earnings allocated to participating securities									$ 0	$ 0	$ (317)
(Loss) income from continuing operations attributable to Vertex common shareholders—diluted									$ (737,643)	$ (503,622)	$ 31,954
Effect of potentially dilutive securities:
Stock options (shares)									0	0	3,219
Other (shares)									0	0	97
Diluted weighted-average common shares outstanding									235,307	224,906	215,262
Diluted (loss) income from continuing operations per common share attributable to Vertex (usd per share)									$ (3.14)	$ (2.24)	$ 0.15
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities excluded from computation of earnings per share (in shares)									12,003	15,729	16,507
Convertible senior subordinated notes
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities excluded from computation of earnings per share (in shares)									0	0	8,192
Unvested restricted stock and restricted stock units
Antidilutive Securities Excluded from Computation of Earnings Per Share
Antidilutive securities excluded from computation of earnings per share (in shares)									3,091	2,165	2,253

Fair Value Measurements (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013
Financial assets carried at fair value:
Fair value foreign currency forward contracts	$ 2,011	$ 0
Level 3
Financial assets carried at fair value:
Fair value of the Term Loan	294,800
Recurring basis
Financial assets carried at fair value:
Total	1,054,389
Recurring basis \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	290,531
Recurring basis \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Marketable securities:	463,750
Recurring basis \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	51,746
Recurring basis \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	246,351
Recurring basis \| Level 1
Financial assets carried at fair value:
Total	754,281
Recurring basis \| Level 1 \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	290,531
Recurring basis \| Level 1 \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Marketable securities:	463,750
Recurring basis \| Level 1 \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	0
Recurring basis \| Level 1 \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	0
Recurring basis \| Level 2
Financial assets carried at fair value:
Total	300,108
Recurring basis \| Level 2 \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	0
Recurring basis \| Level 2 \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Marketable securities:	0
Recurring basis \| Level 2 \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	51,746
Recurring basis \| Level 2 \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	246,351
Recurring basis \| Level 3
Financial assets carried at fair value:
Total	0
Recurring basis \| Level 3 \| Money market funds
Financial assets carried at fair value:
Cash equivalents:	0
Recurring basis \| Level 3 \| Government-sponsored enterprise securities
Financial assets carried at fair value:
Marketable securities:	0
Recurring basis \| Level 3 \| Commercial paper
Financial assets carried at fair value:
Marketable securities:	0
Recurring basis \| Level 3 \| Corporate debt securities
Financial assets carried at fair value:
Marketable securities:	0
Foreign currency forward contracts
Financial assets carried at fair value:
Fair value foreign currency forward contracts	2,011	$ (23)
Foreign currency forward contracts \| Recurring basis
Financial assets carried at fair value:
Fair value foreign currency forward contracts	2,011
Foreign currency forward contracts \| Recurring basis \| Level 1
Financial assets carried at fair value:
Fair value foreign currency forward contracts	0
Foreign currency forward contracts \| Recurring basis \| Level 2
Financial assets carried at fair value:
Fair value foreign currency forward contracts	2,011
Foreign currency forward contracts \| Recurring basis \| Level 3
Financial assets carried at fair value:
Fair value foreign currency forward contracts	0
Variable Interest Entity, Primary Beneficiary \| BioAxone Biosciences, Inc
Financial assets carried at fair value:
Cash and cash equivalents	8,400
Variable Interest Entity, Primary Beneficiary \| BioAxone Biosciences, Inc \| Level 1
Financial assets carried at fair value:
Cash and cash equivalents	$ 8,400

Marketable Securities (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013
Summary of cash, cash equivalents and marketable securities
Amortized Cost	$ 1,387,229	$ 1,465,034
Gross Unrealized Gains	88	136
Gross Unrealized Losses	(211)	(94)
Fair Value	1,387,106	1,465,076
Total cash and cash equivalents
Summary of cash, cash equivalents and marketable securities
Amortized Cost	625,259	569,299
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	625,259	569,299
Cash and money market funds
Summary of cash, cash equivalents and marketable securities
Amortized Cost	625,259	569,299
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	625,259	569,299
Total marketable securities
Summary of cash, cash equivalents and marketable securities
Amortized Cost	761,970	895,735
Gross Unrealized Gains	88	136
Gross Unrealized Losses	(211)	(94)
Fair Value	761,847	895,777
Government-sponsored enterprise securities
Summary of cash, cash equivalents and marketable securities
Amortized Cost	463,788	600,496
Gross Unrealized Gains	14	7
Gross Unrealized Losses	(52)	(53)
Fair Value	463,750	600,450
Commercial paper (due within 1 year)
Summary of cash, cash equivalents and marketable securities
Amortized Cost	51,674	83,384
Gross Unrealized Gains	72	109
Gross Unrealized Losses	0	0
Fair Value	51,746	83,493
Corporate debt securities (due within 1 year)
Summary of cash, cash equivalents and marketable securities
Amortized Cost	196,065	189,674
Gross Unrealized Gains	2	14
Gross Unrealized Losses	(66)	(34)
Fair Value	196,001	189,654
Corporate debt securities (due after 1 year through 5 years)
Summary of cash, cash equivalents and marketable securities
Amortized Cost	50,443	22,181
Gross Unrealized Gains	0	6
Gross Unrealized Losses	(93)	(7)
Fair Value	50,350	$ 22,180
BioAxone Biosciences, Inc \| Variable Interest Entity, Primary Beneficiary
Summary of cash, cash equivalents and marketable securities
Cash and cash equivalents	$ 8,400

Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at December 31, 2013	$ (306)
Other comprehensive (loss) income before reclassifications	2,780
Amounts reclassified from accumulated other comprehensive loss	(1,557)
Net current period other comprehensive (loss) income	1,223	$ 244	$ 503
Balance at December 31, 2014	917	(306)
Foreign currency translation adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at December 31, 2013	(325)
Other comprehensive (loss) income before reclassifications	(646)
Amounts reclassified from accumulated other comprehensive loss	0
Net current period other comprehensive (loss) income	(646)
Balance at December 31, 2014	(971)	(325)
Unrealized holding gains (losses) on marketable securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at December 31, 2013	42
Other comprehensive (loss) income before reclassifications	(165)
Amounts reclassified from accumulated other comprehensive loss	0
Net current period other comprehensive (loss) income	(165)
Balance at December 31, 2014	(123)	42
Unrealized (losses) gains on foreign currency forward contracts
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at December 31, 2013	(23)
Other comprehensive (loss) income before reclassifications	3,591
Amounts reclassified from accumulated other comprehensive loss	(1,557)
Net current period other comprehensive (loss) income	2,034
Balance at December 31, 2014	$ 2,011	$ (23)

- Definition

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

+ References + Details

Hedging (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract]
Net carrying value	$ 2,011	$ 0
Foreign currency forward contracts
Foreign Currency Cash Flow Hedge Derivative at Fair Value [Abstract]
Fair value - assets	2,011	0
Fair value - liabilities	0	(23)
Net carrying value	2,011	(23)
Foreign currency forward contracts \| Cash Flow Hedging
Derivative [Line Items]
Notional amount of foreign currency forward contract	33,724	17,468
Foreign currency forward contracts \| Euro \| Cash Flow Hedging
Derivative [Line Items]
Notional amount of foreign currency forward contract	20,209	17,468
Foreign currency forward contracts \| British Pound Sterling \| Cash Flow Hedging
Derivative [Line Items]
Notional amount of foreign currency forward contract	$ 13,515	$ 0

Inventories- Schedule of Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013
Inventory Disclosure [Abstract]
Raw materials	$ 8,506	$ 489
Work-in-process	20,508	9,981
Finished goods	1,834	3,677
Total	$ 30,848	$ 14,147

Inventories-By Product (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Inventory [Line Items]
Write-downs of inventories to net realizable value	$ 0	$ 10,358	$ 133,189
Write-down of inventories effect on net income (loss) per share (usd per share)	$ 0.00	$ (0.05)	$ (0.61)
Lumacaftor
Inventory [Line Items]
Research and development expense capitalized	$ 11,800

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 994,198	$ 1,005,246
Less: accumulated depreciation	(278,386)	(308,335)
Total property and equipment, net	715,812	696,911
Capital leased assets, gross	85,600	76,400
Capital leases accumulated depreciation	13,100	3,800
Depreciation and amortization expense	62,300	47,300	$ 35,700
Buildings
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	531,642	506,056
Depreciation and amortization expense	13,400
Furniture and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	202,846	190,555
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	99,942	163,019
Software
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	113,875	102,520
Less: accumulated depreciation	(1,200)	(500)
Total property and equipment, net	11,200	5,500
Computers
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 45,893	$ 43,096

Intangible Assets and Goodwill (Details) - USD ($)	1 Months Ended	3 Months Ended				12 Months Ended
Intangible Assets and Goodwill (Details) - USD ($)	Oct. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Indefinite-Lived Intangible Assets [Line Items]
Intangible assets		$ 0				$ 29,000,000	$ 0
Intangible asset impairment charges		0	$ 0	$ 0	$ 412,900,000	0	412,900,000	$ 0
Goodwill		$ 30,992,000				39,915,000	30,992,000
VX-222Asset
Indefinite-Lived Intangible Assets [Line Items]
Fair value of intangible asset					0
Intangible asset impairment charges							412,900,000
Increase in net loss related to impairment charge							$ 285,300,000
Net increase to the Company's net loss per share related to the impairment charge (usd per share)							$ 1.27
Research and Development Arrangement \| VX-222Asset
Indefinite-Lived Intangible Assets [Line Items]
Intangible assets					$ 412,900,000
Change in deferred income taxes							$ 127,600,000
BioAxone Biosciences, Inc
Indefinite-Lived Intangible Assets [Line Items]
Goodwill acquired during period						8,900,000
Goodwill expected to be tax deductible						0
Variable Interest Entity, Primary Beneficiary \| BioAxone Biosciences, Inc
Indefinite-Lived Intangible Assets [Line Items]
In-process research and development intangible asset						$ 29,000,000
Indefinite-lived Intangible Assets \| Variable Interest Entity, Primary Beneficiary \| BioAxone Biosciences, Inc
Indefinite-Lived Intangible Assets [Line Items]
Discount rate used to estimate fair value (percent)	7.50%

Additional Balance Sheet Detail (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Dec. 31, 2013
Prepaid Expense and Other Assets, Current
Prepaid expenses	$ 17,569	$ 15,353
Taxes receivable	14,093	7,959
Restricted Cash (VIE)	8,418	0
Deferred tax asset	3,500	0
Fair value foreign currency forward contracts	2,011	0
Other	7,002	524
Prepaid expenses and other current assets	52,593	23,836
Accrued expenses
Payroll and benefits	91,175	76,785
Research, development and commercial contract costs	38,143	52,468
Product revenue allowances	34,554	85,510
Royalty payable	12,218	18,334
Taxes payable and reserves (including VIE taxes payable)	10,038	11,146
Professional fees	7,004	10,593
Interest	5,444	0
Other	11,100	16,241
Total	209,676	271,077
Other Liabilities, Current
Deferred rent	4,015	16,652
Customer deposits	0	7,692
Other	782	392
Total	$ 4,797	$ 24,736

Long Term Obligations Fan Pier Leases (Details) $ in Thousands, ft² in Millions	12 Months Ended
	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 ft² building leases
Property, Plant and Equipment [Line Items]
Number of leases \| leases				2
Area of real estate property (in square feet) \| ft²				1.1
Lease Agreements Number of Buildings \| building				2
Optional term of lease agreement (in years)				10 years
Depreciation expense	$ 62,300	$ 47,300	$ 35,700
Rental expense	38,900	57,700	$ 57,100
Property and equipment, net	715,812	696,911
Construction financing lease obligation, current and noncurrent	473,400	440,900
Buildings
Property, Plant and Equipment [Line Items]
Interest expense	60,200
Depreciation expense	13,400
Rental expense	6,500
Construction-in-process
Property, Plant and Equipment [Line Items]
Property and equipment, net	$ 515,000	$ 503,400

Long Term Obligations Term Loan (Details) - USD ($)	Jul. 09, 2014	Dec. 31, 2014
Senior Secured Term Loan
Debt Instrument [Line Items]
Face amount of term loan	$ 300,000,000.0
Interest rate (percent)	7.20%
Contingent interest rate (percent)	6.20%
Minimum age of patients (in years)	12 years
Amount of principal payment on quarterly installment payments through July 2016	$ 15,000,000.0
Amount of principal repayment on quarterly installment payments from October 2016	60,000,000.0
Unamortized discount on term loan	5,300,000	$ 5,200,000
Senior Secured Term Loan Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 200,000,000.0
Minimum \| Senior Secured Term Loan \| LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate (percent)	5.00%
Maximum \| Senior Secured Term Loan \| LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate (percent)	7.50%

Convertible Senior Subordinated Notes (Details) - Convertible Senior Subordinated Notes 3.35 Percent Due 2015 - USD ($)	1 Months Ended	3 Months Ended
	Sep. 30, 2010	Jun. 30, 2013
Convertible Senior Subordinated Notes
Convertible senior subordinated notes	$ 400,000,000.0
Interest rate (percent)	3.35%
Net proceeds from convertible debt offering	$ 391,600,000
Underwriting discount	$ 8,400,000
Conversion price (usd 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%
Amount of converted instrument		$ 399,800,000
Convertible senior subordinated notes (due 2015) conversion (shares)		8,188,448
Value of redeemed or called stock during period		$ 200,000
Redemption premium		$ 16.75
Converted instrument, shares issued		87,109
Interest expense		$ 6,700,000
Offset to additional paid-in capital		$ 4,200,000

Common Stock, Preferred Stock and Equity Plans (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2014 USD ($) vote $ / shares shares	Dec. 31, 2013 USD ($) $ / shares shares	Dec. 31, 2012 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award
Common stock, shares authorized	300,000,000	300,000,000
Common stock, votes per share (votes per share) \| vote	1
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Awards Outstanding (shares)	14,909,805
Additional awards authorized for grant (shares)	10,552,371
Grant price of outstanding restricted stock and restricted stock units (usd per share) \| $ / shares		$ 0.01	$ 0.01
Stock Options
Stock options outstanding at beginning of period (in shares)	15,729,000
Stock options granted (in shares)	3,614,000
Stock options exercised (in shares)	(6,153,000)
Stock options forfeited (in shares)	(1,173,000)
Stock options expired (in shares)	(14,000)
Stock options outstanding at end of period (in shares)	12,003,000	15,729,000
Stock options exercisable at end of period (in shares)	5,553,000
Total exercisable or expected to vest, stock options (in shares)	11,380,000
Weighted-average Exercise Price
Weighted-average exercise price outstanding at beginning of period (usd per share) \| $ / shares	$ 44.40
Weighted average exercise price, granted (usd per share) \| $ / shares	84.33
Weighted average exercise price, exercised (usd per share) \| $ / shares	41.53
Weighted average exercise price, forfeited (usd per share) \| $ / shares	55.28
Weighted average exercise price, expired (usd per share) \| $ / shares	66.43
Weighted-average exercise price outstanding at end of period (usd per share) \| $ / shares	56.81	$ 44.40
Weighted average exercise price exercisable at the end of the period (usd per share) \| $ / shares	45.61
Total exercisable or expected to vest, weighted average exercise price (usd per share) \| $ / shares	$ 55.94
Weighted-average Remaining Contractual Life
Weighted-average Remaining Contractual Life, outstanding (in years)	6 years 11 months 8 days
Weighted-average Remaining Contractual Life, exercisable (in years)	5 years 5 months 5 days
Weighted-average Remaining Contractual Life, total exercisable or expected to vest (in years)	6 years 10 months 6 days
Aggregate Intrinsic Value
Aggregate intrinsic value, outstanding \| $	$ 761,274
Aggregate intrinsic value, exercisable \| $	414,345
Aggregate intrinsic value, total exercisable or expected to vest \| $	$ 731,677
Total Intrinsic Value and Cash Received
Market price (usd per share) \| $ / shares	$ 120.23
Total intrinsic value of stock options exercised \| $	$ 316,500	$ 291,600	$ 148,700
Total cash received from employees as a result of employee stock option exercises \| $	$ 255,500	$ 246,800	$ 172,800
Maximum
Share-based Compensation Arrangement by Share-based Payment Award
Expiration period (years)	10 years
2013 Stock and Option Plan
Share-based Compensation Arrangement by Share-based Payment Award
Awards Outstanding (shares)	2,857,275
Additional awards authorized for grant (shares)	9,362,898
Additional shares authorized	9,500,000
Number of shares authorized		3,300,000
2006 Stock and Option Plan
Share-based Compensation Arrangement by Share-based Payment Award
Awards Outstanding (shares)	11,428,741
Additional awards authorized for grant (shares)	1,189,473
Additional shares authorized			3,000,000
1996 Stock and Option Plan
Share-based Compensation Arrangement by Share-based Payment Award
Awards Outstanding (shares)	623,789
Additional awards authorized for grant (shares)	0
Restricted stock
Share-based Compensation Arrangement by Share-based Payment Award
Grant price of outstanding restricted stock and restricted stock units (usd per share) \| $ / shares	$ 0.01
Restricted stock vesting period	4 years

Common Stock, Preferred Stock and Equity Plans (Details 2) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2014 USD ($) purchase_period $ / shares shares	Dec. 31, 2013 USD ($) $ / shares shares	Dec. 31, 2012 USD ($)
Stock options outstanding and exercisable
Exercise price range, options outstanding (in shares) \| shares	12,003,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	6 years 11 months 8 days
Exercise price range, options outstanding, weighted-average exercise price (usd per share)	$ 56.81
Exercise price range, options exercisable (in shares) \| shares	5,553,000
Exercise price range, options exercisable, weighted-average exercise price (usd per share)	$ 45.61
Restricted stock
Restricted stock, as of the beginning of the period (in shares) \| shares	2,046,000
Restricted stock, granted (in shares) \| shares	1,897,000
Restricted stock, vested (in shares) \| shares	(595,000)
Restricted stock, cancelled (in shares) \| shares	(441,000)
Restricted stock, as of the end of the period (in shares) \| shares	2,907,000	2,046,000
Restricted stock, weighted-average grant-date fair value
Weighted-average grant-date fair value, as of the beginning of the period (usd per share)	$ 52.66
Weighted-average grant-date fair value, granted (usd per share)	92.00
Weighted-average grant-date fair value, vested (usd per share)	50.65
Weighted-average grant-date fair value, cancelled (usd per share)	56.36
Weighted-average grant-date fair value, as of the end of the period (usd per share)	$ 78.18	$ 52.66
Vested in period, total fair value \| $	$ 54.5	$ 50.9	$ 41.1
$10.41–$20.00
Stock options outstanding and exercisable
Exercise price, low end of range (usd per share)	$ 10.41
Exercise price, high end of range (usd per share)	$ 20.00
Exercise price range, options outstanding (in shares) \| shares	214,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	2 years 3 months
Exercise price range, options outstanding, weighted-average exercise price (usd per share)	$ 17.66
Exercise price range, options exercisable (in shares) \| shares	214,000
Exercise price range, options exercisable, weighted-average exercise price (usd per share)	$ 17.66
$20.01–$40.00
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)	$ 40
Exercise price range, options outstanding (in shares) \| shares	3,702,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	4 years 4 months 24 days
Exercise price range, options outstanding, weighted-average exercise price (usd per share)	$ 35.07
Exercise price range, options exercisable (in shares) \| shares	2,989,000
Exercise price range, options exercisable, weighted-average exercise price (usd per share)	$ 34.73
$40.01–$60.00
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)	$ 60
Exercise price range, options outstanding (in shares) \| shares	3,690,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	7 years 5 months 16 days
Exercise price range, options outstanding, weighted-average exercise price (usd per share)	$ 48.52
Exercise price range, options exercisable (in shares) \| shares	1,435,000
Exercise price range, options exercisable, weighted-average exercise price (usd per share)	$ 50.48
$60.01–$80.00
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)	$ 80
Exercise price range, options outstanding (in shares) \| shares	1,980,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	8 years 10 months 6 days
Exercise price range, options outstanding, weighted-average exercise price (usd per share)	$ 76.13
Exercise price range, options exercisable (in shares) \| shares	442,000
Exercise price range, options exercisable, weighted-average exercise price (usd per share)	$ 74.76
$80.01–$100.00
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)	$ 100
Exercise price range, options outstanding (in shares) \| shares	2,401,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	8 years 10 months 13 days
Exercise price range, options outstanding, weighted-average exercise price (usd per share)	$ 90.23
Exercise price range, options exercisable (in shares) \| shares	473,000
Exercise price range, options exercisable, weighted-average exercise price (usd per share)	$ 84.90
$100.01–$112.48
Stock options outstanding and exercisable
Exercise price, low end of range (usd per share)	100.01
Exercise price, high end of range (usd per share)	$ 112.48
Exercise price range, options outstanding (in shares) \| shares	16,000
Exercise price range, options outstanding, weighted-average remaining contractual life (in years)	9 years 9 months 29 days
Exercise price range, options outstanding, weighted-average exercise price (usd per share)	$ 110.58
Exercise price range, options exercisable (in shares) \| shares	0
Exercise price range, options exercisable, weighted-average exercise price (usd per share)	$ 0.00
Employee Stock Purchase Plan
Employee Stock Purchase Plan
Offering period (in months)	12 months
Number of 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	1,396,227
Number of shares \| shares	357,000
Average price paid per share (usd per share)	$ 53.65

Stock-based Compensation Expense (Details) - USD ($)	12 Months Ended
Stock-based Compensation Expense (Details) - USD ($)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Stock-based compensation expense:
Stock-based compensation expense	$ 177,542,000	$ 126,835,000	$ 113,804,000
Less: stock-based compensation expense capitalized to inventories	(1,423,000)	(1,048,000)	(1,254,000)
Allocated stock-based compensation expense	$ 177,542,000	$ 126,835,000	$ 113,804,000
Weighted-average assumptions for options and ESPP subscriptions granted
Weighted average fair value (usd per share)	$ 92.00
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
Weighted average fair value (usd per share)	$ 29.59	$ 21.08	$ 12.90
Expected stock price volatility (percent)	60.32%	54.69%	46.90%
Risk-free interest rate (percent)	0.09%	0.08%	0.16%
Expected term of options (in years)	9 months	8 months 26 days	8 months 26 days
Expected annual dividends	$ 0	$ 0	$ 0
Stock options
Stock-based compensation expense:
Stock-based compensation expense	99,961,000	$ 84,599,000	$ 78,566,000
Type of award:
Unrecognized Expense Net of Estimated Forfeitures	$ 156,969,000
Weighted-average Recognition Period (in years)	2 years 1 month 17 days
Weighted-average grant-date fair value, granted (in dollars per share)	$ 39.95	$ 25.79	$ 19.72
Weighted-average assumptions for options and ESPP subscriptions granted
Expected stock price volatility (percent)	50.86%	46.20%	47.93%
Risk-free interest rate (percent)	1.77%	1.25%	0.95%
Expected term of options (in years)	5 years 5 months 19 days	5 years 9 months 22 days	5 years 9 months 11 days
Expected annual dividends	$ 0	$ 0	$ 0
Restricted stock and restricted stock units
Stock-based compensation expense:
Stock-based compensation expense	70,678,000	36,479,000	29,194,000
Type of award:
Unrecognized Expense Net of Estimated Forfeitures	$ 148,037,000
Weighted-average Recognition Period (in years)	2 years 9 months 14 days
ESPP share issuances
Stock-based compensation expense:
Stock-based compensation expense	$ 8,326,000	6,805,000	7,298,000
Type of award:
Unrecognized Expense Net of Estimated Forfeitures	$ 4,262,000
Weighted-average Recognition Period (in years)	7 months 10 days
Research and development expenses
Stock-based compensation expense:
Stock-based compensation expense	$ 116,998,000	81,183,000	71,243,000
Sales, general and administrative expenses
Stock-based compensation expense:
Stock-based compensation expense	$ 60,544,000	$ 45,652,000	$ 42,561,000

Other Arrangements (Details) - USD ($) $ in Millions	1 Months Ended	12 Months Ended
Other Arrangements (Details) - USD ($) $ in Millions	Apr. 30, 2014	Dec. 31, 2008	Dec. 31, 2014
Sale of HIV Protease Inhibitor Royalty Stream
Gross proceeds from sale of royalty rights receivable from GlaxoSmithKline		$ 160.0
Royalty purchase agreement deferred revenue			$ 43.2
Other nonoperating Income	$ 36.7

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Components of income (loss) before provision for (benefit from) income taxes
United States									$ (645,465)	$ (10,638)	$ 231,542
Foreign									(89,410)	(615,406)	(199,546)
(Loss) income from continuing operations before provision for (benefit from) income taxes	$ (178,594)	$ (166,577)	$ (158,396)	$ (231,308)	$ (19,568)	$ (118,900)	$ (53,793)	$ (433,783)	(734,875)	(626,044)	31,996
Current taxes:
United States									2,853	0	0
Foreign									2,457	1,085	(1,865)
State									1,366	4,080	1,590
Total current taxes									6,676	5,165	(275)
Deferred taxes:
United States									244	0	0
Foreign									0	(127,587)	0
State									38	0	0
Total deferred taxes									282	(127,587)	0
Provision for (benefit from) income taxes	$ 2,043	$ 3,419	$ 693	$ 803	$ 1,352	$ 2,555	$ 558	$ (126,887)	$ 6,958	$ (122,422)	$ (275)

Income Taxes (Details 2) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
Income Taxes (Details 2) - USD ($) $ in Thousands	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Tax Carryforwards
Federal statutory income tax rate (percent)									35.00%	35.00%	35.00%
Reconciliation of Income Tax Expense:
(Loss) income from continuing operations before provision for (benefit from) income taxes	$ (178,594)	$ (166,577)	$ (158,396)	$ (231,308)	$ (19,568)	$ (118,900)	$ (53,793)	$ (433,783)	$ (734,875)	$ (626,044)	$ 31,996
Expected tax provision (benefit)									(257,206)	(219,115)	11,199
State taxes, net of federal benefit									1,124	3,844	1,693
Foreign rate differential									39,335	79,799	46,168
Tax credits									(33,788)	(16,775)	(1,791)
Unbenefitted operating losses									241,037	(29,900)	(63,189)
Non-deductible expenses									18,756	9,614	3,084
Rate change									(1,826)	50,076	3,275
Other									(474)	35	(714)
Provision for (benefit from) income taxes	2,043	$ 3,419	$ 693	803	1,352	$ 2,555	$ 558	(126,887)	6,958	(122,422)	(275)
Deferred tax assets:
Net operating loss	996,172				850,946				996,172	850,946
Tax credit carryforwards	265,339				180,380				265,339	180,380
Intangible assets	3,174				26,105				3,174	26,105
Deferred revenues	15,771				25,158				15,771	25,158
Stock-based compensation	61,527				63,521				61,527	63,521
Inventories	13,395				26,278				13,395	26,278
Accrued expenses	37,699				52,470				37,699	52,470
Currency translation adjustment	0				217				0	217
Construction financing lease obligation	175,853				152,688				175,853	152,688
Gross deferred tax assets	1,568,930				1,377,763				1,568,930	1,377,763
Valuation allowance	(1,409,936)				(1,243,664)				(1,409,936)	(1,243,664)
Total deferred tax assets	158,994				134,099				158,994	134,099
Deferred tax liabilities:
Property and equipment	(158,994)				(134,099)				(158,994)	(134,099)
Acquired intangibles	(11,544)				0				(11,544)	0
Net deferred tax liabilities	(11,544)				0				(11,544)	0
Deferred tax assets recognized in prepaid expenses and other current assets	3,500				0				3,500	0
Deferred tax liabilities recognized in other liabilities, excluding current portion	15,044				0				15,044	0
Reconciliation of unrecognized tax benefits
Unrecognized tax benefits beginning of year				$ 2,024				$ 4,106	2,024	4,106
Gross change for current year positions									0	1,325
Decrease for prior period positions									(27)	(290)
Decrease due to settlements and payments									(1,117)	0
Decrease due to statute limitations									0	(185)
Deconsolidation of Alios									0	(2,932)
Unrecognized tax benefits end of year	880				$ 2,024				880	$ 2,024	$ 4,106
Decreased in valuation allowance									(166,300)
Estimated reduction in unrecognized tax benefits in next fiscal year	500								500
Federal
Deferred tax liabilities:
Operating loss carryforwards	3,600,000								3,600,000
Tax credit carryforwards	172,400								172,400
Operating loss carryforwards that will increase APIC when used to reduce income taxes payable	908,500								908,500
State
Deferred tax liabilities:
Operating loss carryforwards	750,800								750,800
Tax credit carryforwards	95,900								95,900
Reconciliation of unrecognized tax benefits
Unrecognized tax benefits end of year	98,400								98,400
BioAxone Biosciences, Inc
Deferred tax liabilities:
Deferred tax liabilities recognized in other liabilities, excluding current portion	$ 11,500								$ 11,500

Restructuring Expense (Details) $ in Thousands	1 Months Ended	3 Months Ended								12 Months Ended				132 Months Ended
Restructuring Expense (Details) $ in Thousands	Jan. 31, 2003	Dec. 31, 2014 USD ($)	Sep. 30, 2014 USD ($)	Jun. 30, 2014 USD ($)	Mar. 31, 2014 USD ($)	Dec. 31, 2013 USD ($) ft²	Sep. 30, 2013 USD ($)	Jun. 30, 2013 USD ($)	Mar. 31, 2013 USD ($)	Dec. 31, 2014 USD ($)	Dec. 31, 2013 USD ($) ft²	Dec. 31, 2012 USD ($)	Dec. 31, 2003 USD ($) ft²	Dec. 31, 2014 USD ($)	Dec. 31, 2011 USD ($) ft²	Jan. 01, 2006 ft²
Kendall Square Lease
Area of real estate property (in square feet) \| ft²															1,100,000
Restructuring Expense		$ 4,164	$ 40,843	$ (270)	$ 6,188	$ 27,658	$ 12,048	$ 776	$ 39	$ 50,925	$ 40,521	$ 1,844	$ 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
Kendall Square Facility
Kendall Square Lease
Leased area (in square feet) \| ft²													290,000
Lease term (in years)	15 years
Area of real estate property (in square feet) \| ft²																120,000
Discount rate, lease restructuring liability (percent)													10.00%
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
2003 Restructuring
Kendall Square Lease
Restructuring Expense										(2,937)	372	1,844		$ 59,914
Cash Payments										(17,494)	(15,255)	(14,853)		(196,446)
Restructuring Liability		11,596				$ 19,115				11,596	$ 19,115	23,328	$ 69,526	11,596	$ 26,313
Fan Pier Move Restructuring
Kendall Square Lease
Area of real estate property (in square feet) \| ft²						120,000					120,000
Discount rate, lease restructuring liability (percent)			9.00%
Restructuring Expense										50,864	$ 1,198
Cash Payments										(18,271)	(401)
Restructuring Liability		$ 33,390				$ 797	$ 797			$ 33,390	$ 797	$ 0		$ 33,390

Restructuring Expense (Details 2) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended				132 Months Ended
Restructuring Expense (Details 2) - USD ($) $ in Thousands	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2003	Dec. 31, 2014
Restructuring activities
Liability, beginning of the period													$ 69,526
Cash Payments												$ (17,816)
Restructuring Expense	$ 4,164	$ 40,843	$ (270)	$ 6,188	$ 27,658	$ 12,048	$ 776	$ 39	$ 50,925	$ 40,521	$ 1,844	91,824
Liability, end of the period												69,526
2003 Restructuring
Restructuring activities
Liability, beginning of the period				19,115				23,328	19,115	23,328	26,313		69,526
Cash Payments									(17,494)	(15,255)	(14,853)		(196,446)
Cash received from subleases									12,912	10,670	10,024		88,620
Credit for portion of facility Vertex decided to occupy in 2005									0	0	0		(10,018)
Restructuring Expense									(2,937)	372	1,844		59,914
Liability, end of the period	11,596				19,115				11,596	19,115	23,328	$ 69,526	11,596
Fan Pier Move Restructuring
Restructuring activities
Liability, beginning of the period				797	797			$ 0	797	0
Cash Payments									(18,271)	(401)
Restructuring Expense									50,864	1,198
Liability, end of the period	33,390				797	797			33,390	797	$ 0		33,390
Other Restructuring
Restructuring activities
Liability, beginning of the period				$ 8,441	8,441	0			8,441
Cash Payments									(10,570)	(22,916)
Asset impairments and other non-cash expense									0	(7,594)
Restructuring Expense									2,998	38,951
Liability, end of the period	$ 869				$ 8,441	$ 8,441	$ 0		$ 869	$ 8,441			$ 869

Employee Benefits (Details) - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Compensation and Retirement Disclosure [Abstract]
Maximum percentage of annual compensation contributed by the participant (percent)	60.00%
Accrued employee benefits	$ 12,000	$ 12,600	$ 12,000
Common stock shares remained available for grant (shares)	755
Matching contributions to the Vertex 401(k) Plan:
Discretionary matching contributions during the year ended December 31,		$ 5,930	$ 10,261
Shares issued during the year ended December 31		99	242
Shares issuable as of the year ended December 31		0	53

Commitments and Contingencies (Details) ft² in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2014 USD ($) ft²	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2011 ft²
Operating lease
Office space used for operation (in square feet) \| ft²				1,100
Future minimum commitments under facility leases commitments with terms of more than one year
2015	$ 104,390
2016	84,683
2017	84,522
2018	81,296
2019	81,919
Thereafter	758,821
Total minimum lease payments	1,195,631
Future minimum sublease income
2015	(11,405)
2016	(15,355)
2017	(15,355)
2018	(5,118)
2019	0
Thereafter	0
Total minimum lease payments	(47,233)
Rental expense	38,900	$ 57,700	$ 57,100
Fan Pier Leases
Future minimum commitments under facility leases commitments with terms of more than one year
2015	67,206
2016	67,206
2017	67,206
2018	67,206
2019	72,589
Thereafter	680,209
Total minimum lease payments	$ 1,021,622
Kendall Square Lease
Operating lease
Office space used for operation (in square feet) \| ft²	120
Future minimum commitments under facility leases commitments with terms of more than one year
2015	$ 19,879
2016	19,879
2017	19,879
2018	6,626
2019	0
Thereafter	0
Total minimum lease payments	66,263
Other Operating Leases
Future minimum commitments under facility leases commitments with terms of more than one year
2015	28,710
2016	12,953
2017	12,792
2018	12,582
2019	9,330
Thereafter	78,612
Total minimum lease payments	$ 154,979

Commitments and Contingencies Capital Lease Financing Obligations (Details) $ in Thousands	Dec. 31, 2014 USD ($)
Capital Leases, Future Minimum Payments Due [Abstract]
2015	$ 20,792
2016	14,254
2017	13,129
2018	13,027
2019	3,047
Thereafter	0
Total payments	64,249
Less: amount representing interest	(7,150)
Present value of payments	57,099
Letter of credit, amount outstanding	$ 32,300
Minimum
Capital Leased Assets
Effective interest rate (percentage)	1.00%
Maximum
Capital Leased Assets
Effective interest rate (percentage)	9.00%

Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
Segment Information (Details) - USD ($) $ in Thousands	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Revenues from external customers
Product revenues, net	$ 124,942	$ 137,099	$ 122,319	$ 103,461	$ 128,822	$ 186,653	$ 254,789	$ 267,381	$ 487,821	$ 837,645	$ 1,333,458
Total revenues	144,556	$ 178,987	$ 138,421	$ 118,451	351,157	$ 221,700	$ 310,750	$ 328,368	580,415	1,211,975	1,527,042
Property and equipment, net	715,812				696,911				715,812	696,911
United States
Revenues from external customers
Total revenues									361,074	896,952	1,373,516
Property and equipment, net	676,968				657,587				676,968	657,587
Outside of the United States
Revenues from external customers
Total revenues									219,341	315,023	153,526
Property and equipment, net	38,844				39,324				38,844	39,324
Europe
Revenues from external customers
Total revenues									197,611	279,557	129,786
United Kingdom
Revenues from external customers
Property and equipment, net	33,628				29,970				33,628	29,970
Other
Revenues from external customers
Total revenues									21,730	35,466	$ 23,740
Property and equipment, net	$ 5,216				$ 9,354				$ 5,216	$ 9,354
Minimum \| Revenues, Net
Revenues from external customers
Concentration risk (percent)									10.00%	10.00%	10.00%
Minimum \| Accounts Receivable
Revenues from external customers
Threshold for disclosure (percent)	10.00%				10.00%				10.00%	10.00%
Credit Concentration Risk \| Walgreen Co. \| Revenues, Net
Revenues from external customers
Concentration risk (percent)									12.00%
Credit Concentration Risk \| Walgreen Co. \| Accounts Receivable
Revenues from external customers
Concentration risk (percent)									11.00%
Credit Concentration Risk \| Bupa Home Healthcare Limited \| Accounts Receivable
Revenues from external customers
Concentration risk (percent)									20.00%	14.00%
Credit Concentration Risk \| Janssen Inc. \| Accounts Receivable
Revenues from external customers
Concentration risk (percent)									12.00%
Credit Concentration Risk \| Janssen NV \| Revenues, Net
Revenues from external customers
Concentration risk (percent)										22.00%
Credit Concentration Risk \| Janssen NV \| Accounts Receivable
Revenues from external customers
Concentration risk (percent)										28.00%
Credit Concentration Risk \| AmerisourceBergen Drug Corporation \| Revenues, Net
Revenues from external customers
Concentration risk (percent)										21.00%	32.00%
Credit Concentration Risk \| McKesson Corporation \| Revenues, Net
Revenues from external customers
Concentration risk (percent)										21.00%	29.00%
Credit Concentration Risk \| Cardinal Health Incorporated \| Revenues, Net
Revenues from external customers
Concentration risk (percent)											15.00%
KALYDECO
Revenues from external customers
Product revenues, net									$ 463,750	$ 371,285	$ 171,645
INCIVEK
Revenues from external customers
Product revenues, net									$ 24,071	$ 466,360	$ 1,161,813

Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	1 Months Ended	3 Months Ended								12 Months Ended
	Apr. 30, 2014	Dec. 31, 2014	Sep. 30, 2014	Jun. 30, 2014	Mar. 31, 2014	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2006	Dec. 31, 2003
Revenues:
Product revenues, net		$ 124,942	$ 137,099	$ 122,319	$ 103,461	$ 128,822	$ 186,653	$ 254,789	$ 267,381	$ 487,821	$ 837,645	$ 1,333,458
Royalty revenues		8,785	8,386	13,015	10,733	36,887	27,012	49,120	43,573	40,919	156,592	141,498
Collaborative revenues		10,829	33,502	3,087	4,257	185,448	8,035	6,841	17,414	51,675	217,738	52,086
Total revenues		144,556	178,987	138,421	118,451	351,157	221,700	310,750	328,368	580,415	1,211,975	1,527,042
Costs and expenses:
Cost of product revenues		11,290	10,208	9,655	8,572	13,281	20,048	24,695	30,955	39,725	88,979	236,742
Royalty expenses		2,737	3,976	7,645	6,904	8,983	7,291	13,236	11,788	21,262	41,298	43,143
Research and development expenses		201,463	190,939	224,487	238,617	238,461	219,442	213,994	210,200	855,506	882,097	765,905
Sales, general and administrative expenses		78,527	75,224	77,446	74,212	73,055	86,427	105,081	91,625	305,409	356,188	432,681
Restructuring expenses		4,164	40,843	(270)	6,188	27,658	12,048	776	39	50,925	40,521	1,844		$ 91,824
Intangible asset impairment charges						0	0	0	412,900	0	412,900	0
Total costs and expenses		298,181	321,190	318,963	334,493	361,438	345,256	357,782	757,507	1,272,827	1,821,983	1,480,315
(Loss) income from operations		(153,625)	(142,203)	(180,542)	(216,042)	(10,281)	(123,556)	(47,032)	(429,139)	(692,412)	(610,008)	46,727
Interest expense, net		(21,177)	(20,384)	(15,585)	(15,717)	(12,626)	(104)	(6,727)	(3,469)	(72,863)	(22,926)	(15,040)
Other income, net		(3,792)	(3,990)	37,731	451	3,339	4,760	(34)	(1,175)	30,400	6,890	309
(Loss) income from continuing operations before provision for (benefit from) income taxes		(178,594)	(166,577)	(158,396)	(231,308)	(19,568)	(118,900)	(53,793)	(433,783)	(734,875)	(626,044)	31,996
Provision for income taxes		2,043	3,419	693	803	1,352	2,555	558	(126,887)	6,958	(122,422)	(275)
(Loss) income from continuing operations		(180,637)	(169,996)	(159,089)	(232,111)	(20,920)	(121,455)	(54,351)	(306,896)	(741,833)	(503,622)	32,271
Loss from discontinued operations		(209)	(64)	(293)	(346)	(163,629)	(7,207)	(7,361)	(5,731)	(912)	(183,928)	(83,406)
Net loss		(180,846)	(170,060)	(159,382)	(232,457)	(184,549)	(128,662)	(61,712)	(312,627)	(742,745)	(687,550)	(51,135)
Loss attributable to noncontrolling interest		4,190	0	0	0
Loss (income) from discontinued operations attributable to noncontrolling interest						228,834	4,530	4,547	4,611	0	242,522	(55,897)
Net loss attributable to Vertex		(176,656)	(170,060)	(159,382)	(232,457)	44,285	(124,132)	(57,165)	(308,016)	(738,555)	(445,028)	(107,032)
(Loss) income from continuing operations		(176,447)	(169,996)	(159,089)	(232,111)	(20,920)	(121,455)	(54,351)	(306,896)	(737,643)	(503,622)	32,271
(Loss) income from discontinued operations		$ (209)	$ (64)	$ (293)	$ (346)	$ 65,205	$ (2,677)	$ (2,814)	$ (1,120)	(912)	58,594	(139,303)
Net (loss) income from continuing operations:
Basic and diluted (usd per share)		$ (0.74)	$ (0.72)	$ (0.68)	$ (1.00)	$ (0.09)	$ (0.53)	$ (0.25)	$ (1.42)
Net income (loss) from discontinued operations:
Basic and diluted (usd per share)		0.00	0.00	0.00	0.00	0.28	(0.01)	(0.01)	(0.01)
Earnings Per Share [Abstract]
Basic and diluted (usd per share)		$ (0.74)	$ (0.72)	$ (0.68)	$ (1.00)	$ 0.19	$ (0.54)	$ (0.26)	$ (1.43)
Shares used in per share calculations:
Basic and diluted (in shares)		238,272	236,137	233,808	232,887	231,264	230,505	222,053	215,421
Other nonoperating Income	$ 36,700
Intangible assets		$ 29,000				$ 0				29,000	0
Janssen
Revenues:
Royalty revenues										13,481	130,724	117,592
Collaborative revenues						182,400				7,104	203,437	16,178
Total revenues										$ 20,585	334,161	133,770
Shares used in per share calculations:
Up-front license payment		$ 5,000	$ 30,000										$ 165,000
Alios Bio Pharma Inc
Costs and expenses:
Provision for income taxes											(166,145)	39,029
Loss attributable to noncontrolling interest											(242,522)	$ 55,897
Research and Development Arrangement \| Alios Bio Pharma Inc
Costs and expenses:
Intangible asset impairment charges						250,600
Shares used in per share calculations:
Change in deferred income taxes						$ 102,100
VX-222Asset
Costs and expenses:
Intangible asset impairment charges											412,900
VX-222Asset \| Research and Development Arrangement
Shares used in per share calculations:
Intangible assets									$ 412,900
Change in deferred income taxes											$ 127,600