VIIV Healthcare Company and Glaxosmithkline Collaboration	9 Months Ended
Sep. 30, 2012
VIIV Healthcare Company and Glaxosmithkline Collaboration [Abstract]
VIIV HEALTHCARE COMPANY AND GLAXOSMITHKLINE COLLABORATION	5. VIIV HEALTHCARE COMPANY AND GLAXOSMITHKLINE COLLABORATION In February 2009, we entered into the ViiV license agreement which granted ViiV an exclusive worldwide license to develop, manufacture and commercialize our NNRTI compounds, including IDX899, now known as ‘761, for the treatment of human diseases, including HIV/AIDS. We also entered into a stock purchase agreement with GSK in February 2009, which we refer to as the GSK stock purchase agreement. Under this agreement, GSK purchased approximately 2.5 million shares of our common stock at an aggregate purchase price of $17.0 million, or a per share price of $6.87. These agreements became effective in March 2009. In March 2009, we received $34.0 million related to this collaboration, which consisted of a $17.0 million license fee payment under the ViiV license agreement and $17.0 million under the GSK stock purchase agreement described above. In 2010, we received a $6.5 million milestone payment related to the achievement of a preclinical operational milestone and a $20.0 million milestone payment for the initiation of a phase IIb clinical study of ‘761. Pursuant to the ViiV license agreement, we were eligible to receive up to $390.0 million in additional milestone payments as well as double-digit tiered royalties on worldwide product sales. The ViiV license agreement had performance obligations, including joint committee participation and ViiV’s right to license other NNRTI compounds that we may develop in the future, that we have assessed under the FASB guidance related to multiple element arrangements, prior to the implementation of ASU No. 2009-13. We concluded that this arrangement should be accounted for as a single unit of accounting and recognized as revenue using the contingency adjusted performance method. The milestone payments did not meet our revenue recognition criteria for immediate recognition and were recognized over the life of the agreement, which was estimated to be 17 years. A cumulative catch-up was recognized for the period from the execution of the license agreement in March 2009 through the period in which the milestone payments were received. The parties had agreed that if ViiV, its affiliates or its sublicenses desired to develop ‘761 for an indication other than HIV, or if ViiV intended to develop any other licensed compound for any indication, the parties would mutually agree on a separate schedule of milestone and royalty payments prior to the start of development. In February 2011, ViiV informed us that the FDA placed ‘761 on clinical hold and subsequently, the ViiV license agreement was terminated on March 15, 2012. Upon termination, ViiV relinquished all rights it had in the intellectual property licensed from us and granted us an exclusive, perpetual and irrevocable license to any intellectual property relating to the licensed products it may have developed during the term of the license agreement. We will not receive any additional milestone or royalty payments under the ViiV license agreement. During the first quarter of 2012, as a result of the termination, we recognized the deferred revenue balance of $36.1 million as other collaboration revenue which was included in the condensed consolidated statement of operations for the nine months ended September 30, 2012.

VIIV Healthcare Company and Glaxosmithkline Collaboration

9 Months Ended

Sep. 30, 2012

VIIV Healthcare Company and Glaxosmithkline Collaboration [Abstract]

VIIV HEALTHCARE COMPANY AND GLAXOSMITHKLINE COLLABORATION

5. VIIV HEALTHCARE COMPANY AND GLAXOSMITHKLINE COLLABORATION

In February 2009, we entered into the ViiV license agreement which granted ViiV an exclusive worldwide license to develop, manufacture and commercialize our NNRTI compounds, including IDX899, now known as ‘761, for the treatment of human diseases, including HIV/AIDS. We also entered into a stock purchase agreement with GSK in February 2009, which we refer to as the GSK stock purchase agreement. Under this agreement, GSK purchased approximately 2.5 million shares of our common stock at an aggregate purchase price of $17.0 million, or a per share price of $6.87. These agreements became effective in March 2009.

In March 2009, we received $34.0 million related to this collaboration, which consisted of a $17.0 million license fee payment under the ViiV license agreement and $17.0 million under the GSK stock purchase agreement described above. In 2010, we received a $6.5 million milestone payment related to the achievement of a preclinical operational milestone and a $20.0 million milestone payment for the initiation of a phase IIb clinical study of ‘761. Pursuant to the ViiV license agreement, we were eligible to receive up to $390.0 million in additional milestone payments as well as double-digit tiered royalties on worldwide product sales.

The ViiV license agreement had performance obligations, including joint committee participation and ViiV’s right to license other NNRTI compounds that we may develop in the future, that we have assessed under the FASB guidance related to multiple element arrangements, prior to the implementation of ASU No. 2009-13. We concluded that this arrangement should be accounted for as a single unit of accounting and recognized as revenue using the contingency adjusted performance method. The milestone payments did not meet our revenue recognition criteria for immediate recognition and were recognized over the life of the agreement, which was estimated to be 17 years. A cumulative catch-up was recognized for the period from the execution of the license agreement in March 2009 through the period in which the milestone payments were received. The parties had agreed that if ViiV, its affiliates or its sublicenses desired to develop ‘761 for an indication other than HIV, or if ViiV intended to develop any other licensed compound for any indication, the parties would mutually agree on a separate schedule of milestone and royalty payments prior to the start of development.

In February 2011, ViiV informed us that the FDA placed ‘761 on clinical hold and subsequently, the ViiV license agreement was terminated on March 15, 2012. Upon termination, ViiV relinquished all rights it had in the intellectual property licensed from us and granted us an exclusive, perpetual and irrevocable license to any intellectual property relating to the licensed products it may have developed during the term of the license agreement. We will not receive any additional milestone or royalty payments under the ViiV license agreement. During the first quarter of 2012, as a result of the termination, we recognized the deferred revenue balance of $36.1 million as other collaboration revenue which was included in the condensed consolidated statement of operations for the nine months ended September 30, 2012.