Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2016

Share-Based Compensation

Schedule of share-based compensation expense included in the condensed consolidated statements of operations

	Year Ended December 31,
(In thousands)	2016		2015		2014
Research and development	$	20,202	$	25,770	$	21,191
Selling, general and administrative		20,967		28,280		22,043
Total share-based compensation expense	$	41,169	$	54,050	$	43,234

Schedule of share-based compensation expense by award type included in the consolidated statements of operations

	Year Ended December 31,
(In thousands)	2016		2015		2014
Transferred from parent	$	—	$	—	$	17,043
Innoviva equity:
Options		3,973		5,199		4,378
RSUs		1,547		3,292		3,169
RSAs		2,597		7,590		3,796
Performance RSAs		1,005		11,166		4,490
Theravance Biopharma equity:
Options		7,591		14,063		9,404
RSUs		20,946		10,471		—
Performance RSAs and RSUs		1,808		—		—
ESPP		1,702		2,269		954
Total share-based compensation expense	$	41,169	$	54,050	$	43,234

Schedule of unrecognized compensation cost, net of expected forfeitures, and the estimated weighted-average amortization period, using the straight-line attribution method

(In thousands, except amortization period)	Unrecognized Compensation Cost		Weighted-Average Amortization Period (Years)
Innoviva equity:
Options	$	3,310		1.1
RSUs		215		0.2
RSAs		1,287		1.5
Performance RSAs		1		0.1
Theravance Biopharma equity:
Options		14,596		2.5
RSUs		48,731		2.9
Performance RSAs and RSUs(1)		4,865		3.5
ESPP		1,102		1.0
	$	74,107

(1)           Represents unrecognized share-based compensation cost associated with tranche 1 of the Theravance Biopharma performance-contingent awards described above.

Summary of option activity under the 2013 EIP and 2014 NEEIP

	Number of Shares Subject to Outstanding Options			Weighted-Average Exercise Price of Outstanding Options
Balance at June 2, 2014		—		$	—
Granted		4,235,059			24.75
Forfeited		(272,633	)		25.01
Outstanding at December 31, 2014		3,962,426		$	24.73
Granted		750,775			14.26
Forfeited		(2,402,037	)		23.05
Outstanding at December 31, 2015		2,311,164		$	23.07
Granted		474,675			24.06
Exercised		(197,328	)		22.18
Forfeited		(357,716	)		19.83
Outstanding at December 31, 2016		2,230,795		$	23.88

Schedule of RSU and RSA activity

	Number of Shares Subject to Outstanding RSUs			Number of Shares Outstanding Subject to Performance Conditions (RSAs)
Outstanding at December 31, 2014		—			—
Granted		3,399,924			—
Forfeited		(411,883	)		—
Outstanding at December 31, 2015		2,988,041			—
Granted		2,344,034			1,575,000
Released		(1,185,905	)		—
Forfeited		(537,052	)		(135,000	)
Outstanding at December 31, 2016		3,609,118			1,440,000

Schedule of range of assumptions used to estimate the fair value of share options granted

	Year Ended December 31,
	2016	2015	2014
Options
Risk-free interest rate	1.1% - 1.9%	1.4% - 1.9%	1.7% - 2.0%
Expected term (in years)	6	6	5 - 6
Volatility	53% - 73%	71% - 78%	64% - 70%
Dividend yield	—	—	—
Weighted-average estimated fair value	$13.28	$9.16	$15.55
2013 ESPP
Risk-free interest rate	0.4% - 1.0%	0.1% - 0.9%	0.1% - 0.7%
Expected term (in years)	0.5 - 2.0	0.5 - 2.0	0.6 - 2.2
Volatility	54% - 65%	46% - 62%	58% - 66%
Dividend yield	—	—	—
Weighted-average estimated fair value	$9.63	$5.91	$10.95

Innoviva

Share-Based Compensation

Schedule of range of assumptions used to estimate the fair value of share options granted

	Year Ended December 31, 2014
Options
Risk-free interest rate	1.6% - 2.1%
Expected term (in years)	5 - 6
Volatility	52% - 61%
Dividend yield	—
Weighted-average estimated fair value	$16.14