0001558370-22-000902 | 10-K | XBRL Viewer

Employee Benefit Plans

12 Months Ended

Dec. 31, 2021

Note 14. Employee Benefit Plans

Defined Contribution Plans

We have a defined contribution plan qualified under Section 401(k) of the Internal Revenue Code covering all U.S. employees and defined contribution plans for other Incyte employees in Europe and Japan. Employees may contribute a portion of their compensation, which is then matched by us, subject to certain limitations. Defined contribution expense was $16.7 million, $13.4 million and $11.7 million for the years ended December 31, 2021, 2020 and 2019, respectively. Included in the 2021, 2020 and 2019 defined contribution expense was $2.4 million, $1.7 million and $1.6 million, respectively, of expense related to matching contributions under the non-U.S. defined contribution plans.

Defined Benefit Pension Plans

We have defined benefit pension plans for our employees in Europe which provide benefits to employees upon retirement, death or disability. The assets of the pension plans are held in collective investment accounts represented by the cash surrender value of an insurance policy and are classified as Level 2 within the fair value hierarchy.

The pension plans assumptions reflect the expected investment return and discount rate on plan assets and disability rate probabilities. The benefit obligation at December 31, 2021 for the plans was determined using a discount rate of 0.20% and rate of compensation increase of 2.00%. The 2021 net periodic benefit cost for the plans was determined using discount rates of 0.10%, rates of compensation increase of 2.00% and long-term expected return on plan assets of 0.10%. The benefit obligation at December 31, 2020 for the plans was determined using a discount rate of 0.10% and rate of compensation increase of 2.00%. The 2020 net periodic benefit cost for the plans was determined using discount rates of 0.30%, rates of compensation increase of 2.25% and long-term expected return on plan assets of 0.30%.

Summarized information regarding changes in the obligations and plan assets, the funded status and the amounts recorded were as follows (in thousands):


	Year Ended December 31,
	2021		2020
Benefit obligation, beginning of year	$	97,959	$	62,770
Employer service cost		7,977		6,047
Interest cost		92		193
Plan participants' contributions		2,795		2,237
Actuarial loss		7,618		9,372
Plan change		5,595		—
Transfer of benefits net of payments from fund		12,834		11,057
Expenses paid from assets		(117)		(88)
Translation (gain) loss		(2,787)		6,371
Benefit obligation, end of year		131,966		97,959

Fair value of plan assets, beginning of year		61,265		38,662
Actual return on plan assets		12,396		260
Employer contributions		6,858		5,413
Plan participants' contributions		2,795		2,237
Transfer of benefits net of payments from fund		12,834		11,057
Expenses paid from assets		(117)		(88)
Translation gain		(2,036)		3,724
Fair value of plan assets, end of year		93,995		61,265

Unfunded liability, end of year	$	37,971	$	36,694

The unfunded liability is reported in other liabilities on the consolidated balance sheets as of December 31, 2021 and 2020. The accumulated benefit obligation is $120.9 million and $83.2 million as of December 31, 2021 and 2020, respectively.

The net periodic benefit cost was as follows (in thousands):



	Year Ended December 31,
	2021		2020		2019
Service cost	$	7,977	$	6,047	$	5,195
Interest cost		92		193		345
Expected return on plan assets		(60)		(126)		(241)
Amortization of prior service cost		217		216		214
Amortization of actuarial losses		1,154		667		247
Net periodic benefit cost	$	9,380	$	6,997	$	5,760

The components of net periodic benefit cost other than the service cost component are included in other income (expense), net on the consolidated statements of operations.

Other changes in the plans assets and the benefit obligation that is recognized in accumulated other comprehensive loss were as follows, net of tax (in thousands):


	Year Ended December 31,
	2021		2020		2019
Pension liability, beginning of year	$	23,831	$	15,468	$	9,146
Plan amendment		6,017		—		—
Net prior service costs		(217)		(216)		(214)
Net (gain) loss		(5,954)		8,579		6,536
Pension liability, end of year	$	23,677	$	23,831	$	15,468

We expect to contribute a total of $6.4 million to the pension plans in 2022. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands):


2022	$	4,582
2023		4,688
2024		4,760
2025		5,308
2026		5,107
2027-2031		33,815
Total	$	58,260

- Definition

The entire disclosure for retirement benefits.

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+ Details

Employee Benefit Plans - Defined Contribution Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Defined Contribution Plan
Defined contribution expense	$ 16.7	$ 13.4	$ 11.7
European And Japanese Defined Contribution Plans
Defined Contribution Plan
Defined contribution expense	$ 2.4	$ 1.7	$ 1.6

Accrued and Other Current Liabilities

12 Months Ended

Dec. 31, 2021

Accrued and Other Current Liabilities

Accrued and Other Current Liabilities

Note 9. Accrued and Other Current Liabilities

Accrued and other current liabilities consisted of the following (in thousands):


	December 31,
	2021		2020
Royalties	$	168,412	$	106,011
Clinical related costs		109,486		115,897
Sales allowances		136,541		73,204
Sales and marketing		35,750		12,699
Construction in progress		27,098		22,807
Operating lease liabilities		10,554		12,674
Other current liabilities		45,754		35,112
Total accrued and other current liabilities	$	533,595	$	378,404

Stockholders' Equity - Shares available for grant (Details)	12 Months Ended
	Dec. 31, 2021 shares
Shares Available For Grant
Outstanding at the beginning of the period (in shares)	5,515,182
Additional authorization (in shares)	9,500,000
Options, RSUs and PSUs granted (in shares)	(7,174,371)
Options, RSUs and PSUs cancelled (in shares)	2,272,487
Outstanding at the end of the period (in shares)	10,113,298

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2021

Stockholders' Equity

Schedule of option activity under the 2010 Stock Plan

Option activity under the 2010 Stock Plan was as follows:


	Shares Subject to
	Outstanding Options
		Weighted Average
	Shares	Exercise Price
Balance at December 31, 2020	12,115,288	$	88.31
Options granted	2,540,313	$	84.92
Options exercised	(622,944)	$	66.44
Options cancelled	(1,269,197)	$	91.44
Balance at December 31, 2021	12,763,460	$	88.39

Schedule of stock options outstanding and exercisable by exercise price range

The following table summarizes information about stock options outstanding as of December 31, 2021 under the 2010 Stock Plan:


	Options Outstanding				Options Exercisable
		Weighted Average	Weighted			Weighted
		Remaining	Average			Average
	Number	Contractual Life	Exercise		Number	Exercise
Range of Exercise Prices	Outstanding	(in years)	Price		Exercisable	Price
$22.05 - $68.62	1,304,595	6.05	$	64.71	1,048,050	$	64.04
$68.82 - $69.35	89,030	8.35		69.15	31,252		68.95
$72.27 - $72.27	1,470,150	6.88		72.27	770,726		72.27
$72.58 - $80.50	1,614,398	5.77		77.49	1,131,015		76.77
$80.56 - $83.58	1,338,974	9.26		83.34	72,885		81.68
$83.83 - $85.01	1,371,805	6.14		84.52	1,008,722		84.42
$85.34 - $94.63	1,655,056	7.63		91.18	927,332		92.12
$95.34 - $101.79	1,293,897	3.88		96.28	876,609		96.33
$102.65 - $113.64	1,853,430	6.11		109.99	1,386,235		111.21
$115.19 - $138.52	772,125	4.93		128.71	772,125		128.71
	12,763,460				8,024,951

Schedule of activity summarized under all stock plans other than options

RSU and PSU award activity under the 2010 Stock Plan was as follows:


	Shares Subject to
	Outstanding Awards
	Shares	Grant Date Value
Balance at December 31, 2020	3,284,583	$	87.42
RSUs granted	2,102,386	$	82.39
PSUs granted	214,449	$	74.26
RSUs released	(857,367)	$	87.82
PSUs released	(200,353)	$	68.08
RSUs cancelled	(409,333)	$	89.17
PSUs cancelled	(167,477)	$	72.48
Balance at December 31, 2021	3,966,888	$	84.91

Schedule of share activity

The following table summarizes our shares available for grant under the 2010 Plan. Each RSU and PSU grant reduces the available share pool by 2 shares.


		Shares Available
		for Grant
Balance at December 31, 2020		5,515,182
Additional authorization		9,500,000
Options, RSUs and PSUs granted		(7,174,371)
Options, RSUs and PSUs cancelled		2,272,487
Balance at December 31, 2021		10,113,298

Accrued and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2021

Accrued and Other Current Liabilities

Schedule of accrued and other current liabilities

Accrued and other current liabilities consisted of the following (in thousands):


	December 31,
	2021		2020
Royalties	$	168,412	$	106,011
Clinical related costs		109,486		115,897
Sales allowances		136,541		73,204
Sales and marketing		35,750		12,699
Construction in progress		27,098		22,807
Operating lease liabilities		10,554		12,674
Other current liabilities		45,754		35,112
Total accrued and other current liabilities	$	533,595	$	378,404

Segment Information (Details) $ in Thousands	12 Months Ended
Segment Information (Details) $ in Thousands	Dec. 31, 2021 USD ($) segment	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of operating segments \| segment	1
Total revenues	$ 2,986,267	$ 2,666,702	$ 2,158,759
Property and equipment, net	723,920	559,625
U.S.
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	2,900,000	2,600,000	2,100,000
Property and equipment, net	434,200	336,900
Europe
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	124,100	105,000	$ 90,000
Property and equipment, net	286,800	218,000
Japan
Revenues from External Customers and Long-Lived Assets [Line Items]
Property and equipment, net	$ 2,900	$ 4,700

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

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+ Details

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenues:
Total revenues	$ 2,986,267	$ 2,666,702	$ 2,158,759
Costs and expenses:
Cost of product revenues (including definite-lived intangible amortization)	150,991	131,328	114,249
Research and development	1,458,179	2,215,942	1,154,111
Selling, general and administrative	739,560	516,922	468,711
Change in fair value of acquisition-related contingent consideration	14,741	23,385	19,682
Collaboration loss sharing	37,019	42,801
Total costs and expenses	2,400,490	2,930,378	1,756,753
Income (loss) from operations	585,777	(263,676)	402,006
Other income (expense), net	10,647	23,206	52,182
Interest expense	(1,908)	(2,174)	(1,855)
Unrealized (loss) gain on long term investments	(24,072)	10,426	34,458
Income (loss) before (benefit) provision for income taxes	570,444	(232,218)	486,791
(Benefit) provision for income taxes	(378,137)	63,479	39,885
Net income (loss)	$ 948,581	$ (295,697)	$ 446,906
Net income (loss) per share:
Basic	$ 4.30	$ (1.36)	$ 2.08
Diluted	$ 4.27	$ (1.36)	$ 2.05
Shares used in computing net income (loss) per share:
Basic	220,428	218,073	214,913
Diluted	222,074	218,073	217,657
Product revenues, net
Revenues:
Total revenues	$ 2,322,012	$ 2,068,736	$ 1,774,922
Product royalty revenues
Revenues:
Total revenues	569,255	392,966	306,337
Milestone and contract revenues
Revenues:
Total revenues	$ 95,000	$ 205,000	$ 77,500

Organization and Summary of Significant Accounting Policies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2021 USD ($) item segment	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Concentrations of Credit Risk
Number of operating segments \| segment	1
Accounts Receivable
Allowance for doubtful accounts	$ 0	$ 0
Inventory
Period of lower average per unit cost of materials	36 months
Shelf life for finished goods inventory, maximum	36 months
Variable Interest Entities
Number of entities in which variable interest held \| item	0
Percentage of MediCare Part D Insurance Coverage Gap Required to be Funded by Manufacturers	70.00%
Medicare Part D Insurance Coverage Gap, Increase in Eligible Patient Spending, Percentage	30.00%
Advertising Expenses
Advertising expenses	$ 66,000	$ 28,900	$ 15,300
MorphoSys AG
Variable Interest Entities
Collaboration Agreement Profit Loss Sharing Ratio	50.00%	50.00%
ICLUSIG
Variable Interest Entities
Amortization period	12 years 6 months

Commitments and contingencies - Contingencies (Details) $ in Millions	12 Months Ended
	Dec. 31, 2021 USD ($)
US Department of Justice
Contingencies
Settlement amount	$ 12.6

Summary of significant accounting policies (Policies)	12 Months Ended
Summary of significant accounting policies (Policies)	Dec. 31, 2021
Organization and Summary of Significant Accounting Policies
Principles of Consolidation	Principles of Consolidation. The consolidated financial statements include the accounts of Incyte Corporation and our wholly owned subsidiaries. All inter-company accounts, transactions, and profits have been eliminated in consolidation.
Foreign Currency Translation	Foreign Currency Translation. Operations in non-U.S. entities are recorded in the functional currency of each entity. For financial reporting purposes, the functional currency of an entity is determined by a review of the source of an entity's most predominant cash flows. The results of operations for any non-U.S. dollar functional currency entities are translated from functional currencies into U.S. dollars using the average currency rate during each month. Assets and liabilities are translated using currency rates at the end of the period. Adjustments resulting from translating the financial statements of our foreign entities that use their local currency as the functional currency into U.S. dollars are reflected as a component of other comprehensive income (loss). Transaction gains and losses are recorded in other income (expense), net, in the consolidated statements of operations.
Use of Estimates	Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Concentrations of Credit Risk	Concentrations of Credit Risk. Cash, cash equivalents, marketable securities, and trade receivables are financial instruments which potentially subject us to concentrations of credit risk. The estimated fair value of financial instruments approximates the carrying value based on available market information. By policy, we invest our excess available funds primarily in U.S. government debt securities which are securities issued or guaranteed by the U.S. government and money market funds that meet certain guidelines, which limits exposure to potential credit losses. Our receivables mainly relate to our product sales and collaborative agreements with pharmaceutical companies. We have not experienced any significant credit losses on cash, cash equivalents, marketable securities, or trade receivables to date and do not require collateral on receivables.
Current Expected Credit Losses	Current Expected Credit Losses. Financial assets measured at amortized cost are assessed for future expected credit losses under guidance within ASC 326, Financial Instruments – Credit Losses, to determine if application of an expected credit losses reserve is necessary. On a quarterly basis, receivables that resulted from revenue transactions within the scope of ASC 606, Revenue from Contracts with Customers, and recognized on an amortized cost basis are reviewed on a customer-level basis to analyze expectations of future collections based upon past history of collections, payment, aging of receivables and viability of the customer to continue payment, as well as estimates of future economic conditions. Receivables generally consist of two types: receivables from collaborative agreements, including milestones, reimbursements for agreed-upon activities and sales royalties; and receivables from customer product sales. Collaborative agreement receivables are closely monitored relationships with select, reputable industry peers. Collection of receivables is assessed within each collaborative partnership on a quarterly basis, including evaluation of each entity’s credit quality, financial health and past history of payment. Customer product sales receivables are independently evaluated on a monthly basis, on which unusual items or aged receivables are closely monitored for signs of credit deterioration, or indications of payment refusal. Customer product sales are with specialty pharmaceutical distributors, wholesalers, and certain public and private institutions, some of which whose financial obligations are funded by various government agencies.
Cash and Cash Equivalents	Cash and Cash Equivalents. Cash and cash equivalents are held in banks or in custodial accounts with banks. Cash equivalents are defined as all liquid investments and money market funds with maturity from date of purchase of 90 days or less that are readily convertible into cash.
Marketable Securities-Available-for-Sale	Marketable Securities—Available-for-Sale. Our marketable securities consist of investments in U.S. government debt securities that are classified as available-for-sale. Available-for-sale securities are carried at fair value, based on quoted market prices and observable inputs, with unrealized gains and losses, net of tax, reported as a separate component of stockholders’ equity. We classify marketable securities that are available for use in current operations as current assets on the consolidated balance sheets. Realized gains and losses and declines in value judged to be other than temporary for available-for-sale securities are included in other income (expense), net on the consolidated statements of operations. The cost of securities sold is based on the specific identification method.
Accounts Receivable	Accounts Receivable. As of December 31, 2021 and 2020, we had no allowance for doubtful accounts. We provide an allowance for doubtful accounts based on management’s assessment of the collectability of specific customer accounts, which includes consideration of the credit worthiness and financial condition of those customers, aging of such receivables, history of collectability with the customer and the general economic environment. We record an allowance to reduce the receivables to the amount that is expected to be collected.
Inventory	Inventory. Inventories are determined at the lower of cost and net realizable value with cost determined under the specific identification method and may consist of raw materials, work in process and finished goods. We capitalize inventory after FDA approval as the related costs are expected to be recoverable through the commercialization of the product. Costs incurred prior to FDA approval are recorded as research and development expense in our statements of operations. Raw materials and work-in-process inventory are not subject to expiration and the shelf life of finished goods inventory is approximately 36 months from the start of manufacturing of the finished goods. We evaluate for potential excess inventory by analyzing current and future product demand relative to the remaining product shelf life. We build demand forecasts by considering factors such as, but not limited to, overall market potential, market share, market acceptance and patient usage. We classify inventory as current on the consolidated balance sheets when we expect inventory to be consumed for commercial use within the next twelve months.
Variable Interest Entities	Variable Interest Entities. We perform an initial and ongoing evaluation of the entities with which we have variable interests, such as equity ownership, in order to identify entities (i) that do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support or (ii) in which the equity investors lack an essential characteristic of a controlling financial interest as variable interest entities (“VIE” or “VIEs”). If an entity is identified as a VIE, we perform an assessment to determine whether we have both (i) the power to direct activities that most significantly impact the VIE’s economic performance and (ii) have the obligation to absorb losses from or the right to receive benefits of the VIE that could potentially be significant to the VIE. If both of these criteria are satisfied, we are identified as the primary beneficiary of the VIE. As of December 31, 2021, there were no entities in which we held a variable interest which we determined to be VIEs.
Long Term Investments	Long Term Investments. Our long term investments consist of equity investments in common stock of publicly-held companies with whom we have entered into collaboration and license agreements. We classify all of our equity investments in common stock of publicly-held companies as long term investments on the consolidated balance sheets. Our equity investments are accounted for at fair value using readily determinable pricing available on a securities exchange on the consolidated balance sheets. All changes in fair value are reported in the consolidated statements of operations as an unrealized gain (loss) on long term investments. In assessing whether we exercise significant influence over any of the companies in which we hold equity investments, we consider the nature and magnitude of our investment, any voting and protective rights we hold, any participation in the governance of the other company, and other relevant factors such as the presence of a collaboration or other business relationship. Currently, none of our equity investments in publicly-held companies are considered relationships in which we are able to assert control.
Property and Equipment, net	Property and Equipment, net. Property and equipment, net is stated at cost, less accumulated depreciation and amortization. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over the shorter of the estimated useful life of the assets or lease term.
Lease Accounting	Lease Accounting. All leases with a lease term greater than 12 months, regardless of lease type classification, are recorded as an obligation on the balance sheet with a corresponding right-of-use asset. Both finance and operating leases are reflected as liabilities on the commencement date of the lease based on the present value of the lease payments to be made over the lease term. Current operating lease liabilities are reflected in accrued and other current liabilities and noncurrent operating lease liabilities are reflected in other liabilities on the consolidated balance sheet. Right-of-use assets are valued at the initial measurement of the lease liability, plus any initial direct costs or rent prepayments, minus lease incentives and any deferred lease payments. Operating lease right-of-use assets are recorded in property and equipment, net on the consolidated balance sheet and lease cost is recognized on a straight-line basis. For finance leases, expense is recognized as separate amortization and interest expense, with higher interest expense in the earlier periods of a lease. Leases with an initial term of 12 months or less are not recorded on the balance sheet and we recognize lease expense for these leases on a straight-line basis over the term of the lease. In determining whether a contract contains a lease, asset and service agreements are assessed at onset and upon modification for criteria of specifically identified assets, control and economic benefit.
Other Intangible Assets, net	Other Intangible Assets, net. Other intangible assets, net consist of licensed intellectual property rights acquired in business combinations, which are reported at acquisition date fair value, less accumulated amortization. Intangible assets with finite lives are amortized over their estimated useful lives using the straight-line method.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets. Long-lived assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If indicators of impairment are present, the asset is tested for recoverability by comparing the carrying value of the asset to the related estimated undiscounted future cash flows expected to be derived from the asset. If the expected cash flows are less than the carrying value of the asset, then the asset is considered to be impaired and its carrying value is written down to fair value, based on the related estimated discounted future cash flows.
Goodwill	Goodwill. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. Goodwill is not amortized but is tested for impairment at the reporting unit level at least annually as of October 1 or when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more-likely-than-not that the fair value of net assets are below their carrying amounts. A reporting unit is the same as, or one level below, an operating segment. Our operations are currently comprised of a single, entity wide reporting unit. We completed our most recent annual impairment assessment as of October 1, 2021 and determined that the carrying value of our goodwill was not impaired.
Income Taxes	Income Taxes. We account for income taxes using the asset and liability approach which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts reportable for income tax purposes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The primary factors used to assess the likelihood of realization are our recent history of cumulative earnings or losses, expected reversals of taxable temporary timing differences, forecasts of future taxable income and available tax planning strategies that could be implemented to realize the deferred tax assets. Upon evaluating and weighting both positive and negative evidence, we concluded that we should release the valuation allowance on the majority of our U.S. deferred tax assets as of December 31, 2021. We recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the position will be sustained upon examination by the taxing authorities, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded for these positions is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. We adjust the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. Any interest and penalties on uncertain tax positions are included within the tax provision. The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in March 2020 to provide an estimated $2.2 trillion designed to stimulate the U.S. economy during the COVID-19 pandemic. The Act includes tax relief, government loans, grants and investments for entities in affected industries, which has related accounting and financial reporting impacts. Disclosure for certain income tax accounting measures are required in the period of enactment and disclosure for government loans, investments, grants, and revenue recognition are required in future periods as federal agencies establish rules and procedures to implement the CARES Act. During 2020, we delayed the payment of certain employer payroll tax amounts to future periods as allowed under the Act. We do not expect the CARES Act to have a material impact on our overall financial results, our income tax provision or our liquidity. We have further described the impact and risks of the COVID-19 pandemic on our business in Item 1A. Risk Factors.
Net Income (Loss) Per Share	Net Income (Loss) Per Share. Our basic and diluted net income (loss) per share is calculated by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during all periods presented. Options to purchase stock, restricted stock units and performance stock units are included in diluted earnings per share calculations, unless the effects are anti-dilutive.
Accumulated Other Comprehensive Income (Loss)	Accumulated Other Comprehensive Income (Loss). Accumulated other comprehensive income (loss) consists of unrealized gains or losses on our marketable debt securities that are classified as available-for-sale, foreign currency translation gains or losses and defined benefit pension obligations.
Revenue Recognition	Revenue Recognition. Revenue-generating contracts are assessed under ASC 606, Revenue from contracts with customers, to identify distinct performance obligations, determine the transaction price of the contract and allocate the transaction price to each of the distinct performance obligations. Revenue is recognized when we have satisfied a performance obligation through transferring control of the promised good or service to a customer. Control, in this instance, may mean the ability to prevent other entities from directing the use of, and receiving benefit from, a good or service. We apply the following five-step model in order to determine this amount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation, which for the Company is generally at a point in time. We also assess collectability based primarily on the customer’s payment history and on the creditworthiness of the customer. Product Revenues Our product revenues consist of sales of JAKAFI, OPZELURA and PEMAZYRE in the U.S., sales of MINJUVI, PEMAZYRE and ICLUSIG in Europe, and sales of PEMAZYRE in Japan. Product revenues are recognized once we satisfy the performance obligation at a point in time under the revenue recognition criteria as described above. We sell JAKAFI, OPZELURA and PEMAZYRE to our customers in the U.S., which include specialty pharmacies, specialty distributors and wholesalers. We sell MINJUVI, PEMAZYRE and ICLUSIG to our customers in the European Union and certain other jurisdictions, which include retail pharmacies, hospital pharmacies and distributors. We sell PEMAZYRE in Japan to an exclusive wholesaler. We recognize revenues for product received by our customers net of allowances for customer credits, including estimated rebates, chargebacks, discounts, returns, distribution service fees, patient assistance programs, and government rebates, such as Medicare Part D coverage gap reimbursements in the U.S. Product shipping and handling costs are included in cost of product revenues. Customer Credits: Our customers are offered various forms of consideration, including allowances, service fees and prompt payment discounts. We expect our customers will earn prompt payment discounts and, therefore, we deduct the full amount of these discounts from total product sales when revenues are recognized. Service fees are also deducted from total product sales as they are earned. Rebates and Discounts: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program in the U.S. and mandated discounts in Europe in markets where government-sponsored healthcare systems are the primary payers for healthcare. Rebates are amounts owed after the final dispensing of the product to a benefit plan participant and are based upon contractual agreements or legal requirements with public sector benefit providers. The accrual for rebates is based on statutory discount rates and expected utilization as well as historical data we have accumulated since product launches. Our estimates for expected utilization of rebates are based on data received from our customers. Rebates are generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarters’ unpaid rebates. If actual future rebates vary from estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. Chargebacks: Chargebacks are discounts that occur when certain contracted customers, which currently consist primarily of group purchasing organizations, Public Health Service institutions, non-profit clinics, and Federal government entities purchasing via the Federal Supply Schedule, purchase directly from our wholesalers. Contracted customers generally purchase the product at a discounted price. The wholesalers, in turn, charges back to us the difference between the price initially paid by the wholesalers and the discounted price paid by the contracted customers. In addition to actual chargebacks received we maintain an accrual for chargebacks based on the estimated contractual discounts on the inventory levels on hand in our distribution channel. If actual future chargebacks vary from these estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. Medicare Part D Coverage Gap: Medicare Part D prescription drug benefit mandates manufacturers to fund 70% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients. Our estimates for the expected Medicare Part D coverage gap are based on historical invoices received and in part from data received from our customers. Funding of the coverage gap is generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarters. If actual future funding varies from estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. Additionally, beginning in January 2020, the amount of spending required by eligible patients in the Medicare Part D insurance coverage gap increased 30% due to the expiration of a provision in the Patient Protection and Affordable Care Act, which now results in a change in the True Out of Pocket (TrOOP) calculation methodology. The methodological change has resulted in an increase in required spending by patients and, in turn, an increase in manufacturers’ contributions on behalf of patients in the Medicare Part D insurance coverage gap. Co-payment Assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. We accrue a liability for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators. Product Royalty Revenues Royalty revenues on commercial sales for ruxolitinib (marketed as JAKAVI® outside the United States) by Novartis Pharmaceutical International Ltd. (“Novartis”) are based on net sales of licensed products in licensed territories as provided by Novartis. Royalty revenues on commercial sales for baricitinib (marketed as OLUMIANT) by Eli Lilly and Company (“Lilly”) are based on net sales of licensed products in licensed territories as provided by Lilly. Royalty revenues on commercial sales for capmatinib (marketed as TABRECTA®) by Novartis are based on net sales of licensed products in the licensed territories as provided by Novartis. We recognize royalty revenues in the period the sales occur. Milestone and Contract Revenues For each collaborative research, development and/or commercialization agreement that results in revenue under the guidance of ASC 606 we identify all material performance obligations, which may include the license to intellectual property and know-how, research and development activities and/or other activities. In order to determine the transaction price, in addition to any upfront payment, we estimate the amount of variable consideration, including milestone payments, at the outset of the contract utilizing the most likely amount method. The most likely amount method is used since the milestone payments have a binary outcome (i.e., we receive all or none of the milestone payment). We constrain the estimate of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur. When determining if variable consideration should be constrained, management considers whether there are factors outside the Company’s control that could result in a significant reversal of revenue. In making these assessments, management considers the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required. Once the estimated transaction price is established, amounts are allocated to the performance obligations that have been identified. The transaction price is generally allocated to each separate performance obligation on a relative standalone selling price basis. Out-licensing arrangements contain the right to use functional intellectual property, which is the underlying performance obligation of these collaborative arrangements. If the license of our intellectual property is determined to be distinct from other performance obligations in the arrangement, the functional intellectual property that is transferred to the collaborative partner at the onset of the arrangement is concluded to have significant standalone functionality and value at the point in time at which the intellectual property is made available to the collaborative partner. For licenses that are not distinct from other obligations identified in the arrangement, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, we apply an appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront license fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. For each of the three years ended December 31, 2021, we had no revenues from intellectual property licenses recognized over time. For milestone revenues related to sales-based achievements, we recognize the milestone revenues in the corresponding period of the product sale, in accordance with the guidance of ASC 606-10-55-65 for contracts that include a license to intellectual property and the license is the predominant item to which the product sale relates. Subsequent to the transfer of the intellectual property, we may earn milestones through achievement of pre-specified developmental or regulatory events and, as such, milestones are accounted for as variable consideration. We include developmental or regulatory milestones in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the milestone is subsequently resolved. Under the agreements currently in place, we do not consider these events to be within our control, but rather dependent upon the development activities of our collaborative partners and the decisions made by regulatory agencies. Accordingly, these milestones are not included in the transaction price until the counterparty, or third-party in the event of a regulatory submission, confirms the satisfaction or completion of the milestone triggering event. Given the high level of uncertainty of achievement, variable consideration associated with milestones are fully constrained until confirmation of the satisfaction or completion of the milestone by the third-party. Generally, the milestone events contained in our collaboration agreements coincide with the progression of our drugs from development, to regulatory approval and then to commercialization. The value of these milestones is dictated within the contract and is fixed upon achievement and reflects the amount of consideration which we expect to be entitled to in exchange for the satisfaction of that milestone. The process of successfully discovering a new development candidate, having it approved and successfully commercialized is highly uncertain. As such, the milestone payments we may earn from our partners involve a significant degree of risk to achieve and therefore, subsequent milestone payments due to Incyte are recognized as revenue at the point in time when such milestones are achieved. Our collaboration agreements may also include an option for the collaborative partner to elect to participate in research and development activities, such as shared participation in additional clinical trials using the compound. The presence of additional options for future participatory activities are assessed to determine if they represent material rights offered by us to the collaborative partner. We also determine whether the reimbursement of research and development expenses should be accounted for as collaborative revenues or an offset to research and development expenses in accordance with the provisions of gross or net revenue presentation and recognize the corresponding revenues or records the corresponding offset to research and development expenses as incurred. Our collaborative agreements may also include provisions for additional future collaborative efforts, such as options for shared commercialization staffing or licensing of additional molecules, involvement in joint committees, or options for inclusion in negotiations of future supply rights, which at the time of each collaborative agreement’s inception, are assessed to determine if these meet the definition of a performance obligation under ASC 606. Cost of Product Revenues Cost of product revenues includes all product related costs. In addition, cost of product revenues include low single-digit royalties under our collaboration and license agreement to Novartis on all future sales of JAKAFI in the United States and the amortization of our licensed intellectual property for ICLUSIG using the straight-line method over the estimated useful life of 12.5 years from the date of acquisition on June 1, 2016 of all of the outstanding shares of ARIAD Pharmaceuticals (Luxembourg) S.à.r.l. (since renamed Incyte Biosciences Luxembourg S.à.r.l.) from ARIAD Pharmaceuticals, Inc. (“ARIAD”). Cost of product revenues also includes employee personnel costs, including stock compensation, for those employees dedicated to the production of our commercial products.
Research and Development Costs	Research and Development Costs. Our policy is to expense research and development costs as incurred, including amounts funded by research and development collaborations. Research and development expenses are comprised of costs we incur in performing research and development activities, including salary and benefits; stock-based compensation expense; outsourced services and other direct expenses, including clinical trial and pharmaceutical development costs; collaboration payments; expenses associated with drug supplies that are not being capitalized; and infrastructure costs, including facilities costs and depreciation expense. If a collaboration is a cost-sharing arrangement in which both we and our collaborator perform development work and share costs, we also recognize, as research and development expense in the period when our collaborator incurs development expenses, our portion of the co-development expenses that we are obligated to reimburse. Costs incurred under the collaboration arrangement that are reimbursable to us are recorded net against the related research and development expenses. We often contract with contract research organizations (“CROs”) to facilitate, coordinate and perform agreed upon research and development of a new drug. To ensure that research and development costs are expensed as incurred, we record monthly accruals for clinical trials and preclinical testing costs based on the work performed under the contract. These CRO contracts typically call for the payment of fees for services at the initiation of the contract and/or upon the achievement of certain clinical trial milestones. In the event that we prepay CRO fees, we record the prepayment as a prepaid asset and amortize the asset into research and development expense over the period of time the contracted research and development services are performed. Most professional fees, including project and clinical management, data management, monitoring, and medical writing fees are incurred throughout the contract period. These professional fees are expensed based on their percentage of completion at a particular date. Our CRO contracts generally include pass through fees. Pass through fees include, but are not limited to, regulatory expenses, investigator fees, travel costs, and other miscellaneous costs, including shipping and printing fees. We expense the costs of pass through fees under our CRO contracts as they are incurred, based on the best information available to us at the time. The estimates of the pass through fees incurred are based on the amount of work completed for the clinical trial and are monitored through correspondence with the CROs, internal reviews and a review of contractual terms. The factors utilized to derive the estimates include the number of patients enrolled, duration of the clinical trial, estimated patient attrition, screening rate and length of the dosing regimen. CRO fees incurred to set up the clinical trial are expensed during the setup period. Under our clinical trial collaboration agreements we may be reimbursed for certain development costs incurred. Such costs are recorded as a reduction of research and development expense in the period in which the related expense is incurred.
Stock Compensation and Long-term Incentive Plans	Stock Compensation. Share-based payment transactions with employees, which include stock options, restricted stock units (“RSUs”) and performance shares (“PSUs”), are recognized as compensation expense over the requisite service period based on their estimated fair values as well as expected forfeiture rates. The stock compensation process requires significant judgment and the use of estimates, particularly surrounding Black-Scholes assumptions such as stock price volatility over the option term and expected option lives, as well as expected forfeiture rates and the probability of PSUs vesting. The fair value of stock options, which are subject to graded vesting, are recognized as compensation expense over the requisite service period using the accelerated attribution method. The fair value of RSUs that are subject to cliff vesting are recognized as compensation expense over the requisite service period using the straight-line attribution method, and the fair value of RSUs that are subject to graded vesting are recognized as compensation expense over the requisite service period using the accelerated attribution method. The fair value of PSUs are recognized as compensation expense beginning at the time in which the performance conditions are deemed probable of achievement, which we assess as of the end of each reporting period. Once a performance condition is considered probable, we record compensation expense based on the portion of the service period elapsed to date with respect to that award, with a cumulative catch-up, net of estimated forfeitures, and recognize any remaining compensation expense, if any, over the remaining requisite service period using the straight-line attribution method for PSUs that are subject to cliff vesting and using the accelerated attribution method for PSUs that are subject to graded vesting. Compensation expense for PSUs with market performance conditions is calculated using a Monte Carlo simulation model as of the date of grant and recorded over the requisite service period. Long Term Incentive Plans. We have long term incentive plans which provide eligible employees with the opportunity to receive performance and service-based incentive compensation, which may be comprised of cash, stock options, restricted stock units and/or performance shares. The payment of cash and the grant or vesting of equity may be contingent upon the achievement of pre-determined regulatory, sales and internal performance milestones.
Advertising Expenses	Advertising Expenses. Advertising expenses, comprised primarily of television, radio, print media and Internet advertising, are expensed as incurred and are included in selling, general, and administrative expenses. For the years ended December 31, 2021, 2020, and 2019, advertising expenses were approximately $66.0 million, $28.9 million, and $15.3 million, respectively.
Acquisition-Related Contingent Consideration	Acquisition-Related Contingent Consideration. Acquisition-related contingent consideration consists of our future royalty obligations on future net revenues of ICLUSIG owed to Takeda Pharmaceutical Company Limited, which acquired ARIAD (“Takeda”). Acquisition-related contingent consideration was recorded on the acquisition date of June 1, 2016 at the estimated fair value of the obligation, in accordance with the acquisition method of accounting. The fair value measurement is based on significant inputs that are unobservable in the market and thus represents a Level 3 measurement. The fair value of the acquisition-related contingent consideration is remeasured each reporting period, with changes in fair value recorded in the consolidated statements of operations.
Collaboration loss sharing	Collaboration loss sharing. For the year ended December 31, 2021 and 2020, collaboration loss sharing represents our 50% share of the United States loss for commercialization of MONJUVI (tafasitamab-cxix) under our agreement with MorphoSys, which is described in Note 6 below.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This guidance applies to all entities and aims to reduce the complexity of tax accounting standards while enhancing reporting disclosures. This guidance is effective for fiscal years beginning after December 15, 2020 and interim periods therein. We adopted this guidance for the period beginning January 1, 2021. Upon adoption, ASU No. 2019-12 had an immaterial impact on the consolidated financial statements. As of December 31, 2021, there were no other recently issued accounting standards that may have a material impact on the Company's financial position, results of operations, or cash flows upon their adoption.

Revenues (Tables)

12 Months Ended

Dec. 31, 2021

Revenues

Schedule of disaggregated revenue

As discussed in Note 1, revenues are recognized under guidance within ASC 606. The following table presents our disaggregated revenue for the periods presented (in thousands):


	For the Years Ended,
	December 31,
	2021		2020		2019
JAKAFI revenues, net	$	2,134,508	$	1,937,850	$	1,684,968
ICLUSIG revenues, net		109,395		105,002		89,954
PEMAZYRE revenues, net		68,531		25,884		—
MINJUVI revenues, net		4,910		—		—
OPZELURA revenues, net		4,668		—		—
Total product revenues, net		2,322,012		2,068,736		1,774,922
JAKAVI product royalty revenues		337,991		277,902		225,913
OLUMIANT product royalty revenues		220,875		110,920		80,424
TABRECTA product royalty revenues		10,389		4,144		—
Total product royalty revenues		569,255		392,966		306,337
Milestone and contract revenues		95,000		205,000		77,500
Total revenues	$	2,986,267	$	2,666,702	$	2,158,759

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings [Member] Adoption of ASU	Retained Earnings [Member]	Adoption of ASU	Total
Balances (ASU 2016-02) at Dec. 31, 2018				$ 95		$ 95
Balances at Dec. 31, 2018	$ 213	$ 3,813,678	$ (10,165)		$ (1,877,759)		$ 1,925,967
Increase (Decrease) in Stockholders' Equity
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares, net of shares withheld for taxes and shares of Common Stock under the ESPP	3	63,296					63,299
Issuance of shares of Common Stock for services rendered		487					487
Stock compensation		167,029					167,029
Other comprehensive income (loss)			(5,377)				(5,377)
Net income (loss)					446,906		446,906
Balances at Dec. 31, 2019	216	4,044,490	(15,542)		(1,430,758)		2,598,406
Increase (Decrease) in Stockholders' Equity
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares, net of shares withheld for taxes and shares of Common Stock under the ESPP	3	110,302					110,305
Issuance of shares of Common Stock for services rendered		546					546
Issuance of shares of Common Stock upon conversion of Convertible Senior Notes		18,999					18,999
Stock compensation		178,527					178,527
Other comprehensive income (loss)			182				182
Net income (loss)					(295,697)		(295,697)
Balances at Dec. 31, 2020	219	4,352,864	(15,360)		(1,726,455)		2,611,268
Increase (Decrease) in Stockholders' Equity
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares, net of shares withheld for taxes and shares of Common Stock under the ESPP	2	28,684					28,686
Issuance of shares of Common Stock for services rendered		434					434
Stock compensation		185,129					185,129
Other comprehensive income (loss)			(4,094)				(4,094)
Net income (loss)					948,581		948,581
Balances at Dec. 31, 2021	$ 221	$ 4,567,111	$ (19,454)		$ (777,874)		$ 3,770,004

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(22))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=124431687&loc=d3e22595-107794

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(18))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 40
-Section 65
-Paragraph 1
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123482062&loc=SL123482106-238011

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
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- Definition

Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity.

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+ Details

Employee Benefit Plans - Other changes in the plan assets and benefit obligation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Other changes recognized in accumulated other comprehensive income (loss)
Pension liability, beginning of year	$ 23,831	$ 15,468	$ 9,146
Plan amendment	6,017
Net prior service cost	(217)	(216)	(214)
Net (gain) loss	(5,954)	8,579	6,536
Pension liability, end of year	$ 23,677	$ 23,831	$ 15,468

Inventory

12 Months Ended

Dec. 31, 2021

Inventory

Inventory

Note 5. Inventory

Our inventory balance consists of the following (in thousands):


	December 31,
	2021		2020
Raw materials	$	1,275	$	1,275
Work-in-process		39,895		21,242
Finished goods		15,768		13,456
Total inventory	$	56,938	$	35,973

Inventories, stated at the lower of cost and net realizable value, consist of raw materials, work-in-process and finished goods. At December 31, 2021, $27.9 million of inventory was classified as current on the consolidated balance sheet as we expect this inventory to be consumed for commercial use within the next twelve months. At December 31, 2021, $29.0 million of inventory was classified as non-current on the consolidated balance sheet as we did not expect this inventory to be consumed for commercial use within the next twelve months. We obtain some inventory components from a limited number of suppliers due to technology, availability, price, quality or other considerations. The loss of a supplier, the deterioration of our relationship with a supplier, or any unilateral violation of the contractual terms under which we are supplied components by a supplier could adversely affect our total revenues and gross margins.

We capitalize inventory after FDA approval as the related costs are expected to be recoverable through the commercialization of the product. Costs incurred prior to FDA approval are recorded as research and development expense in our statements of operations. At December 31, 2021, inventory with approximately $71.9 million of product costs incurred prior to FDA approval had not yet been sold. We expect to sell the pre commercialization inventory over the next 36 months and, as a result, cost of product revenues will reflect a lower average per unit cost of materials.

Concentrations of Credit Risk and Current Expected Credit Losses (Details)	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Sales Revenue Goods Services Net [Member] \| Customer Concentration Risk [Member] \| Customer A [Member]
Concentration of risk
Percentage of concentration risk	18.00%	20.00%	20.00%
Sales Revenue Goods Services Net [Member] \| Customer Concentration Risk [Member] \| Customer B [Member]
Concentration of risk
Percentage of concentration risk	12.00%	13.00%	13.00%
Sales Revenue Goods Services Net [Member] \| Customer Concentration Risk [Member] \| Customer C [Member]
Concentration of risk
Percentage of concentration risk	18.00%	17.00%	16.00%
Sales Revenue Goods Services Net [Member] \| Customer Concentration Risk [Member] \| Customer D [Member]
Concentration of risk
Percentage of concentration risk	11.00%	10.00%	8.00%
Accounts Receivable [Member] \| Credit Concentration Risk [Member] \| Collaboration Partner A, B, C and D
Concentration of risk
Percentage of concentration risk	36.00%	42.00%
Accounts Receivable [Member] \| Credit Concentration Risk [Member] \| Customer A, B, C D, and E
Concentration of risk
Percentage of concentration risk	31.00%	33.00%

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)	Dec. 31, 2020
Convertible Senior Notes 1.25 Percent Due 2020
Interest rate of debt (as a percent)	1.25%

Property and Equipment, net

12 Months Ended

Dec. 31, 2021

Property and Equipment, net

Property and Equipment, net

Note 7. Property and Equipment, net

Property and equipment, net consists of the following (in thousands):


	December 31,
	2021		2020
Office equipment	$	22,554	$	17,880
Laboratory equipment		105,040		86,021
Computer equipment		79,871		66,640
Land		10,494		10,671
Building and leasehold improvements		434,321		238,042
Operating lease right-of-use assets		27,308		26,816
Construction in progress		220,052		257,929
		899,640		703,999
Less accumulated depreciation and amortization		(175,720)		(144,374)
Property and equipment, net	$	723,920	$	559,625

Depreciation expense, including amortization expense of leasehold improvements, was $36.3 million, $29.6 million and $32.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.

In March 2017, we acquired additional adjacent buildings to our global headquarters in Wilmington, Delaware and in 2019, began demolition of these buildings and construction of a new laboratory and office building totaling approximately 200,000 square feet. The certificate of occupancy was received in December 2021 and we capitalized approximately $158.2 million in building and office equipment that was previously included in construction in progress as of December 31, 2021.

In February 2018, we signed an agreement to rent a building in Morges, Switzerland for an initial term of 15 years plus one year of free rent, with multiple options to extend for an additional 20 years. The building serves as our new European headquarters and consists of approximately 100,000 square feet of office space. This building allowed for consolidation of our European operations that were located in Geneva and Lausanne, Switzerland. In June 2019, we obtained control of the Morges building to begin our construction activity, which was completed in 2020. At that time, we determined the lease to be a finance lease and recorded a lease liability of $31.1 million and a finance lease right-of-use asset of $29.1 million, net of a lease incentive from our landlord of $2.0 million. We have capitalized approximately $19.5 million in leasehold improvements as of December 31, 2021 relating to Morges.

In July 2018, we signed an agreement to purchase land located in Yverdon, Switzerland. The land was purchased, in cash, for approximately $4.8 million. Upon this parcel, we are constructing a large molecule production facility. Construction activity commenced in July 2018, and as of December 31, 2021, we have capitalized approximately $197.4 million in costs for construction, ground preparation and architectural and engineering studies. We currently expect the facility will be operational in the second half of 2022.

We are the lessee of several contracts, including those to secure fleet vehicles, buildings and equipment. Our lease agreements do not contain any material residual value guarantees or restrictive covenants. Some of our building leases include options to renew and the exercise of these options is at our discretion.

Our current operating lease liabilities are reflected in accrued and other current liabilities and our noncurrent operating lease liabilities are reflected in other liabilities on the consolidated balance sheets and are as follows (in thousands):


	December 31,
	2021		2020
Current
Operating lease liabilities	$	10,554	$	12,674
Finance lease liabilities		2,635		2,284
Noncurrent
Operating lease liabilities		15,608		14,188
Finance lease liabilities		31,632		32,573
Total lease liabilities	$	60,429	$	61,719

The maturity of our lease liabilities are as follows (in thousands):


	Operating		Finance
2022	$	11,887	$	4,020
2023		8,664		3,908
2024		4,599		3,291
2025		1,418		3,020
2026		953		2,828
After 2026		5,814		26,492
Total lease cash payments	$	33,335	$	43,559
Less: discount		7,173		9,292
Present value of lease liabilities	$	26,162	$	34,267

The cash paid for amounts included in the measurement of our operating lease liabilities for the years ended December 31, 2021 and 2020 was $14.3 million and $12.1 million, respectively, in operating cash flows. The cash paid for amounts included in the measurement of our finance lease liabilities for the years ended December 31, 2021 and 2020 was $2.4 million and $0.8 million, respectively, in financing cash flows.

As of December 31, 2021, our finance and operating leases had a weighted average lease term of approximately 13.4 and 4.9 years, respectively. The discount rate of our leases is an approximation of an estimated incremental borrowing rate and is dependent upon the term and economics of each agreement. The weighted average discount rate of our finance and operating leases is approximately 4.1% and 4.8%, respectively. As of December 31, 2020, our finance and operating leases had a weighted average lease term of approximately 14.2 and 4.7 years, respectively. The weighted average discount rate of our finance and operating leases is approximately 3.7% and 4.7%, respectively.

For the year ended December 31, 2021, we incurred approximately $14.2 million of expense related to our operating leases, approximately $2.7 million of amortization on our finance lease right-of-use assets and approximately $1.3 million of interest expense on our finance lease liabilities. For the year ended December 31, 2020, we incurred approximately $12.5 million of expense related to our operating leases, approximately $2.6 million of amortization on our finance lease right-of-use assets and approximately $1.2 million of interest expense on our finance lease liabilities. For the years ended December 31, 2021 and 2020, the cost of our short term leases with a term less than 12 months was approximately $0.8 million and $1.9 million, respectively.

Employee Benefit Plans - Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Net periodic benefit cost
Service cost	$ 7,977	$ 6,047	$ 5,195
Interest cost	92	193	345
Expected return on plan assets	(60)	(126)	(241)
Amortization of prior service cost	217	216	214
Amortization of actuarial losses	1,154	667	247
Net periodic benefit cost	$ 9,380	$ 6,997	$ 5,760
Location of costs excluding the service component	Other income (expense), net	Other income (expense), net	Other income (expense), net

Stockholders' Equity - Stock options outstanding (Details)	12 Months Ended
	Dec. 31, 2021 $ / shares shares
Options Outstanding
Number Outstanding (in shares) \| shares	12,763,460
Options Exercisable
Number Exercisable (in shares) \| shares	8,024,951
Range of Exercise Prices $22.05 - $68.62
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	$ 22.05
Exercise price, upper range limit (in dollars per share)	$ 68.62
Options Outstanding
Number Outstanding (in shares) \| shares	1,304,595
Weighted Average Remaining Contractual Life	6 years 18 days
Weighted Average Exercise Price (in dollars per share)	$ 64.71
Options Exercisable
Number Exercisable (in shares) \| shares	1,048,050
Weighted Average Exercise Price (in dollars per share)	$ 64.04
Range of Exercise Prices $68.82 - $69.35
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	68.82
Exercise price, upper range limit (in dollars per share)	$ 69.35
Options Outstanding
Number Outstanding (in shares) \| shares	89,030
Weighted Average Remaining Contractual Life	8 years 4 months 6 days
Weighted Average Exercise Price (in dollars per share)	$ 69.15
Options Exercisable
Number Exercisable (in shares) \| shares	31,252
Weighted Average Exercise Price (in dollars per share)	$ 68.95
Range of Exercise Prices $72.27 - $72.27
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	72.27
Exercise price, upper range limit (in dollars per share)	$ 72.27
Options Outstanding
Number Outstanding (in shares) \| shares	1,470,150
Weighted Average Remaining Contractual Life	6 years 10 months 17 days
Weighted Average Exercise Price (in dollars per share)	$ 72.27
Options Exercisable
Number Exercisable (in shares) \| shares	770,726
Weighted Average Exercise Price (in dollars per share)	$ 72.27
Range of Exercise Prices $72.58 - $80.50
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	72.58
Exercise price, upper range limit (in dollars per share)	$ 80.50
Options Outstanding
Number Outstanding (in shares) \| shares	1,614,398
Weighted Average Remaining Contractual Life	5 years 9 months 7 days
Weighted Average Exercise Price (in dollars per share)	$ 77.49
Options Exercisable
Number Exercisable (in shares) \| shares	1,131,015
Weighted Average Exercise Price (in dollars per share)	$ 76.77
Range of Exercise Prices $80.56 - $83.58
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	80.56
Exercise price, upper range limit (in dollars per share)	$ 83.58
Options Outstanding
Number Outstanding (in shares) \| shares	1,338,974
Weighted Average Remaining Contractual Life	9 years 3 months 3 days
Weighted Average Exercise Price (in dollars per share)	$ 83.34
Options Exercisable
Number Exercisable (in shares) \| shares	72,885
Weighted Average Exercise Price (in dollars per share)	$ 81.68
Range of Exercise Prices $83.83 - $85.01
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	83.83
Exercise price, upper range limit (in dollars per share)	$ 85.01
Options Outstanding
Number Outstanding (in shares) \| shares	1,371,805
Weighted Average Remaining Contractual Life	6 years 1 month 20 days
Weighted Average Exercise Price (in dollars per share)	$ 84.52
Options Exercisable
Number Exercisable (in shares) \| shares	1,008,722
Weighted Average Exercise Price (in dollars per share)	$ 84.42
Range of Exercise Prices $85.34 - $94.63
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	85.34
Exercise price, upper range limit (in dollars per share)	$ 94.63
Options Outstanding
Number Outstanding (in shares) \| shares	1,655,056
Weighted Average Remaining Contractual Life	7 years 7 months 17 days
Weighted Average Exercise Price (in dollars per share)	$ 91.18
Options Exercisable
Number Exercisable (in shares) \| shares	927,332
Weighted Average Exercise Price (in dollars per share)	$ 92.12
Range of Exercise Prices $95.34 - $101.79
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	95.34
Exercise price, upper range limit (in dollars per share)	$ 101.79
Options Outstanding
Number Outstanding (in shares) \| shares	1,293,897
Weighted Average Remaining Contractual Life	3 years 10 months 17 days
Weighted Average Exercise Price (in dollars per share)	$ 96.28
Options Exercisable
Number Exercisable (in shares) \| shares	876,609
Weighted Average Exercise Price (in dollars per share)	$ 96.33
Range of Exercise Prices $102.65 - $113.64
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	102.65
Exercise price, upper range limit (in dollars per share)	$ 113.64
Options Outstanding
Number Outstanding (in shares) \| shares	1,853,430
Weighted Average Remaining Contractual Life	6 years 1 month 9 days
Weighted Average Exercise Price (in dollars per share)	$ 109.99
Options Exercisable
Number Exercisable (in shares) \| shares	1,386,235
Weighted Average Exercise Price (in dollars per share)	$ 111.21
Range of Exercise Prices $115.19 - $138.52
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	115.19
Exercise price, upper range limit (in dollars per share)	$ 138.52
Options Outstanding
Number Outstanding (in shares) \| shares	772,125
Weighted Average Remaining Contractual Life	4 years 11 months 4 days
Weighted Average Exercise Price (in dollars per share)	$ 128.71
Options Exercisable
Number Exercisable (in shares) \| shares	772,125
Weighted Average Exercise Price (in dollars per share)	$ 128.71

License Agreements - InnoCare (Details) - InnoCare - tafasitamab $ in Millions	1 Months Ended
	Sep. 30, 2021 USD ($)
Upfront payment received under license agreement	$ 35.0
Development and Regulatory Milestones \| Maximum
Upfront and immediate milestone payment to be received under license agreement	45.0
Commercialization Milestones \| Maximum
Upfront and immediate milestone payment to be received under license agreement	$ 37.5

Employee Benefit Plans - Expected benefit payments (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Expected employer contributions
Expected contributions	$ 6,400
Expected benefit payments
2022	4,582
2023	4,688
2024	4,760
2025	5,308
2026	5,107
2027-2031	33,815
Total	$ 58,260

Inventory (Details) - USD ($) $ in Thousands	12 Months Ended
Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Inventory
Raw materials	$ 1,275	$ 1,275
Work-in-process	39,895	21,242
Finished goods	15,768	13,456
Total inventories	56,938	35,973
Inventories - current	27,904	16,425
Inventories-noncurrent	29,034	$ 19,548
Inventory incurred prior to FDA approval	$ 71,900
Period of lower average per unit cost of materials	36 months

Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2021

Fair Value of Financial Instruments

Summary of marketable securities portfolio

The following is a summary of our marketable security portfolio for the periods presented (in thousands):


			Net		Net
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
December 31, 2021
Debt securities (government)	$	291,871	$	—	$	(1,119)	$	290,752

December 31, 2020
Debt securities (government)	$	288,199	$	170	$	—	$	288,369

Schedule of fair value of assets measured on recurring basis

The following fair value hierarchy table presents information about each major category of our financial assets measured at fair value on a recurring basis (in thousands):


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Balance as of
	(Level 1)		(Level 2)		(Level 3)		December 31, 2021
Cash and cash equivalents	$	2,057,440	$	—	$	—	$	2,057,440
Debt securities (government)		—		290,752		—		290,752
Long term investments (Note 6)		221,266		—		—		221,266
Total assets	$	2,278,706	$	290,752	$	—	$	2,569,458


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Balance as of
	(Level 1)		(Level 2)		(Level 3)		December 31, 2020
Cash and cash equivalents	$	1,513,008	$	—	$	—	$	1,513,008
Debt securities (government)		—		288,369		—		288,369
Long term investments (Note 6)		222,301		—		—		222,301
Total assets	$	1,735,309	$	288,369	$	—	$	2,023,678

Schedule of fair value of liabilities measured on recurring basis

The following fair value hierarchy table presents information about each major category of our financial liabilities measured at fair value on a recurring basis (in thousands):


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Liabilities		Inputs		Inputs		Balance as of
	(Level 1)		(Level 2)		(Level 3)		December 31, 2021
Acquisition-related contingent consideration	$	—	$	—	$	244,000	$	244,000
Total liabilities	$	—	$	—	$	244,000	$	244,000


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Liabilities		Inputs		Inputs		Balance as of
	(Level 1)		(Level 2)		(Level 3)		December 31, 2020
Acquisition-related contingent consideration	$	—	$	—	$	266,000	$	266,000
Total liabilities	$	—	$	—	$	266,000	$	266,000

Schedule of roll forward of Level 3 liabilities

The following is a roll forward of our Level 3 liabilities (in thousands):


	2021		2020
Balance at January 1,	$	266,000	$	277,000
Contingent consideration earned during the period but not yet paid		(19,583)		(9,595)
Payments made during the period		(17,158)		(24,790)
Change in fair value of contingent consideration		14,741		23,385
Balance at December 31,	$	244,000	$	266,000

Property and Equipment, net - Property and equipment, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Property and equipment, net
Property and Equipment, gross	$ 899,640	$ 703,999
Less accumulated depreciation and amortization	(175,720)	(144,374)
Property and Equipment, net	723,920	559,625
Depreciation expense including amortization expense of leasehold improvements	36,300	29,600	$ 32,100
Office equipment
Property and equipment, net
Property and Equipment, gross	22,554	17,880
Laboratory equipment
Property and equipment, net
Property and Equipment, gross	105,040	86,021
Computer equipment
Property and equipment, net
Property and Equipment, gross	79,871	66,640
Land
Property and equipment, net
Property and Equipment, gross	10,494	10,671
Building and leasehold improvements
Property and equipment, net
Property and Equipment, gross	434,321	238,042
Operating lease right-of-use assets
Property and equipment, net
Property and Equipment, gross	27,308	26,816
Construction in Progress
Property and equipment, net
Property and Equipment, gross	$ 220,052	$ 257,929

License Agreements - Lilly (Details) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended			145 Months Ended
	May 31, 2019	Dec. 31, 2009	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2021	Mar. 31, 2016
License agreements
Research and Development Expense			$ 1,458,179	$ 2,215,942	$ 1,154,111
Revenues			2,986,267	2,666,702	2,158,759
Europe
License agreements
Revenues			124,100	105,000	90,000
Product royalty revenues
License agreements
Revenues			569,255	392,966	306,337
Eli Lilly
License agreements
Revenues			50,000	30,000	0
Eli Lilly \| Non-U.S.
License agreements
Revenues			220,900	$ 110,900	$ 80,400
Eli Lilly \| Development Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone						$ 149,000
Eli Lilly \| Development Milestones \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement		$ 150,000
Eli Lilly \| Regulatory Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone						265,000
Eli Lilly \| Regulatory Milestones \| Japan
License agreements
Amount recognized and received for the achievement of a predefined milestone			10,000
Eli Lilly \| Regulatory Milestones \| Europe
License agreements
Amount recognized and received for the achievement of a predefined milestone			20,000
Eli Lilly \| Regulatory Milestones \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement		365,000
Eli Lilly \| Commercialization Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone			50,000			$ 50,000
Annual net sales of a licensed product for the achievement of a predefined milestone			$ 1,000,000
Eli Lilly \| Commercialization Milestones \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement		$ 150,000
Eli Lilly \| GVHD
License agreements
Additional milestone payments under the license agreement							$ 40,000
Eli Lilly \| GVHD \| Regulatory Milestones
License agreements
Milestone payment made under license agreement	$ 20,000

License Agreements - Novartis (Details) - USD ($) $ in Thousands	1 Months Ended		12 Months Ended			146 Months Ended
	Apr. 30, 2016	Nov. 30, 2009	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2021
License agreements
Revenues			$ 2,986,267	$ 2,666,702	$ 2,158,759
U.S.
License agreements
Revenues			2,900,000	2,600,000	2,100,000
Europe
License agreements
Revenues			124,100	105,000	90,000
JAKAFI
License agreements
Revenues			2,134,508	1,937,850	1,684,968
Novartis
License agreements
Revenues			0	170,000	0
Novartis \| Development Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone						$ 157,000
Novartis \| Development Milestones \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement		$ 174,000
Novartis \| Regulatory Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone						280,000
Novartis \| Regulatory Milestones \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement		495,000
Novartis \| Commercialization Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone						200,000
Novartis \| Commercialization Milestones \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement		$ 500,000
Novartis \| TABRECTA
License agreements
Revenues			10,400	4,100
Novartis \| TABRECTA \| Development Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone				25,000
Novartis \| TABRECTA \| Regulatory Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone				45,000
Novartis \| TABRECTA \| Regulatory Milestones \| Japan
License agreements
Amount recognized and received for the achievement of a predefined milestone				20,000
Novartis \| GVHD \| Development and Regulatory Milestones \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement	$ 75,000
Novartis \| JAKAFI \| U.S.
License agreements
Revenues			99,600	89,900	77,600
Royalties payable			148,100	96,400		$ 148,100
Novartis \| JAKAVI
License agreements
Revenues			$ 338,000	$ 277,900	$ 225,900
Novartis \| JAKAVI \| Minimum
License agreements
Royalty payments on future global net sales (as a percent)			12.00%
Novartis \| JAKAVI \| Maximum
License agreements
Royalty payments on future global net sales (as a percent)			14.00%
Novartis \| JAKAVI \| Commercialization Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone			$ 80,000
Revenues			$ 1,200,000

Property and Equipment, net - Lease and maturity of lease liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Lease liabilities
Operating lease liabilities, current	$ 10,554	$ 12,674
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued Liabilities, Current	Accrued Liabilities, Current
Finance lease liabilities, current	$ 2,635	$ 2,284
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Finance lease liabilities, current	Finance lease liabilities, current
Operating lease liabilities, noncurrent	$ 15,608	$ 14,188
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other Liabilities, Noncurrent	Other Liabilities, Noncurrent
Finance lease liabilities, noncurrent	$ 31,632	$ 32,573
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Finance lease liabilities, noncurrent	Finance lease liabilities, noncurrent
Total lease liabilities	$ 60,429	$ 61,719
Cash paid for operating lease liabilities	14,300	12,100
Cash paid for financing lease liabilities in financing cash flows	2,417	$ 836	$ 822
Maturity of our operating lease liabilities
2022	11,887
2023	8,664
2024	4,599
2025	1,418
2026	953
After 2026	5,814
Total lease cash payments	33,335
Less: discount	7,173
Present value of lease liabilities	26,162
Maturity of our finance lease liabilities
2022	4,020
2023	3,908
2024	3,291
2025	3,020
2026	2,828
After 2026	26,492
Total lease cash payments	43,559
Less: discount	9,292
Present value of lease liabilities	$ 34,267
Weighted average lease term, finance leases	13 years 4 months 24 days	14 years 2 months 12 days
Weighted average lease term, operating leases	4 years 10 months 24 days	4 years 8 months 12 days
Weighted average discount rate, finance leases	4.10%	3.70%
Weighted average discount rate, operating leases	4.80%	4.70%
Expense related to our operating leases	$ 14,200	$ 12,500
Amortization on our finance lease right-of-use assets	2,700	2,600
Interest expense on finance lease liabilities	1,300	1,200
Cost of short term leases	$ 800	$ 1,900

Income Taxes - Provision for income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Current:
Federal	$ 50,565	$ 43,595	$ 23,526
State	32,505	18,881	11,553
Foreign	4,397	1,353	5,183
Current provision for income taxes	87,467	63,829	40,262
Deferred:
Federal	(407,852)
State	(57,677)		(205)
Foreign	(75)	(350)	(172)
Deferred provision for income taxes	(465,604)	(350)	(377)
(Benefit) provision for income taxes	$ (378,137)	$ 63,479	$ 39,885

Income Taxes - NOL (Details) $ in Thousands	Dec. 31, 2021 USD ($)
State
Operating Loss Carryforwards
Net operating loss carryforwards	$ 296,112
Foreign
Operating Loss Carryforwards
Net operating loss carryforwards	$ 1,422,407

Property and Equipment, net - Buildings and construction (Details) $ in Thousands	1 Months Ended	12 Months Ended
	Jul. 31, 2018 USD ($)	Dec. 31, 2021 USD ($) ft²	Dec. 31, 2020 USD ($)	Jun. 30, 2019 USD ($)	Feb. 28, 2018 ft²
Property and equipment, net
Property and Equipment, gross		$ 899,640	$ 703,999
Financing lease liabilities		34,267
Finance lease right-of-use assets, net		27,548	28,451
Building and leasehold improvements
Property and equipment, net
Property and Equipment, gross		$ 434,321	$ 238,042
Office Building in Wilmington, Delaware
Property and equipment, net
Square footage \| ft²		200,000
Office Building in Wilmington, Delaware \| Building and office equipment
Property and equipment, net
Property and Equipment, gross		$ 158,200
Office Building in Morges, Switzerland
Property and equipment, net
Initial lease term					15 years
Options to extend		true
Renewal term of agreement to rent					20 years
Square footage \| ft²					100,000
Financing lease liabilities				$ 31,100
Finance lease right-of-use assets, net				29,100
Finance Lease, Lease Incentive Receivable				$ 2,000
Office Building in Morges, Switzerland \| Building and leasehold improvements
Property and equipment, net
Property and Equipment, gross		$ 19,500
Land in Y-PARC, Switzerland's largest technology park, Yverdon
Property and equipment, net
Capitalized construction costs		$ 197,400
Purchase price	$ 4,800

Stockholders' Equity - Employee Stock Purchase Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Stock Compensation Plans
Number of shares issued	264,503	258,453	239,590
Stock compensation expense	$ 183.0	$ 177.9	$ 166.6
Remaining shares available	10,113,298	5,515,182
Employee Stock [Member]
Stock Compensation Plans
Employment period for eligibility to participate in the plan	1 month
Number of shares issued	264,503	258,453	239,590
Stock compensation expense	$ 4.6	$ 4.6	$ 3.4
Remaining shares available	680,975
Employee Stock [Member] \| Minimum
Stock Compensation Plans
Number of employee working hours per week for eligibility to participate in the plan	20 hours

Employee Benefit Plans - Defined Benefit Pension Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Benefit obligation assumptions
Discount rate ( as a percentage)	0.20%	0.10%
Rate of compensation increase ( as a percentage)	2.00%	2.00%
Periodic benefit cost assumptions
Discount rate ( as a percentage)	0.10%	0.30%
Rate of compensation increase ( as a percentage)	2.00%	2.25%
Expected return on plan assets (as a percentage)	0.10%	0.30%
Changes in the obligations
Benefit obligation, beginning of the year	$ 97,959	$ 62,770
Employer service cost	7,977	6,047	$ 5,195
Interest cost	92	193	345
Plan participants contributions	2,795	2,237
Actuarial loss	7,618	9,372
Plan change	5,595
Transfer of benefits net of payments from fund	12,834	11,057
Expenses paid from assets	117	88
Translation (gain) loss	(2,787)	6,371
Benefit obligation, end of the year	131,966	97,959	62,770
Changes in plan assets
Fair value of plan assets, beginning of year	61,265	38,662
Actual return on plan assets	12,396	260
Employer contributions	6,858	5,413
Plan participants contributions	2,795	2,237
Transfer of benefits net of payments from fund	12,834	11,057
Expenses paid from assets	117	88
Translation gain	(2,036)	3,724
Fair value of plan assets, end of year	93,995	61,265	$ 38,662
Unfunded liability, end of year	37,971	36,694
Accumulated benefit obligation	$ 120,900	$ 83,200

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 2,057,440	$ 1,513,008
Marketable securities-available-for-sale (amortized cost $291,871 and $288,199 as of December 31, 2021 and 2020, respectively; allowance for credit losses $0 as of December 31, 2021 and 2020)	290,752	288,369
Accounts receivable	616,300	481,994
Inventory	27,904	16,425
Prepaid expenses and other current assets	126,278	60,098
Total current assets	3,118,674	2,359,894
Restricted cash and investments	1,720	1,757
Long term investments	221,266	222,301
Inventory	29,034	19,548
Property and equipment, net	723,920	559,625
Finance lease right-of-use assets, net	27,548	28,451
Other intangible assets, net	150,755	172,291
Goodwill	155,593	155,593
Deferred income tax asset	467,538	2,054
Other assets, net	37,304	39,404
Total assets	4,933,352	3,560,918
Current liabilities:
Accounts payable	172,110	98,767
Accrued compensation	108,962	113,340
Accrued and other current liabilities	533,595	378,404
Finance lease liabilities	2,635	2,284
Acquisition-related contingent consideration	37,006	38,400
Total current liabilities	854,308	631,195
Acquisition-related contingent consideration	206,994	227,600
Finance lease liabilities	31,632	32,573
Other liabilities	70,414	58,282
Total liabilities	1,163,348	949,650
Commitments and contingencies (Note 15)
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued or outstanding as of December 31, 2021 and 2020
Common stock, $0.001 par value; 400,000,000 shares authorized; 221,084,433 and 219,489,329 shares issued and outstanding as of December 31, 2021 and 2020, respectively	221	219
Additional paid-in capital	4,567,111	4,352,864
Accumulated other comprehensive loss	(19,454)	(15,360)
Accumulated deficit	(777,874)	(1,726,455)
Total stockholders' equity	3,770,004	2,611,268
Total liabilities and stockholders' equity	$ 4,933,352	$ 3,560,918

Fair Value of Financial Instruments - Fair value on a recurring basis (Details) $ in Thousands		12 Months Ended
	Jun. 01, 2016	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Fair value of financial instruments
Long term investments (Note 6)		$ 221,266	$ 222,301
ARIAD \| Contingent Consideration
Roll forward of Level 3 liabilities
Projected cash flows period	18 years
ARIAD \| Discount rate \| Contingent Consideration
Roll forward of Level 3 liabilities
Valuation input (as a percent)	0.10
ARIAD \| Average Cost of Capital \| Contingent Consideration
Roll forward of Level 3 liabilities
Valuation input (as a percent)		0.10
ARIAD \| Accrued and other current liabilities
Roll forward of Level 3 liabilities
Contingent consideration earned during the period but not yet paid		$ (19,600)	(9,600)
Level 3 \| Estimate of Fair Value Measurement [Member]
Roll forward of Level 3 liabilities
Balance at the beginning of the period		266,000	277,000
Contingent consideration earned during the period but not yet paid		(19,583)	(9,595)
Payments made during the period		(17,158)	(24,790)
Change in fair value of contingent consideration		14,741	23,385
Balance at the end of the period		244,000	266,000
Fair Value, Measurements, Recurring [Member] \| Estimate of Fair Value Measurement [Member]
Fair value of financial instruments
Cash and cash equivalents		2,057,440	1,513,008
Debt securities (government)		290,752	288,369
Long term investments (Note 6)		221,266	222,301
Total assets		2,569,458	2,023,678
Acquisition-related contingent consideration		244,000	266,000
Total liabilities		244,000	266,000
Fair Value, Measurements, Recurring [Member] \| Fair Value, Inputs, Level 1 [Member]
Fair value of financial instruments
Cash and cash equivalents		2,057,440	1,513,008
Long term investments (Note 6)		221,266	222,301
Total assets		2,278,706	1,735,309
Fair Value, Measurements, Recurring [Member] \| Fair Value, Inputs, Level 2 [Member]
Fair value of financial instruments
Debt securities (government)		290,752	288,369
Total assets		290,752	288,369
Fair Value, Measurements, Recurring [Member] \| Level 3
Fair value of financial instruments
Acquisition-related contingent consideration		244,000	266,000
Total liabilities		$ 244,000	$ 266,000

Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Basic Net Income (Loss) Per Share
Basic net income (loss) per share	$ 948,581	$ (295,697)	$ 446,906
Weighted average common shares outstanding	220,428,000	218,073,000	214,913,000
Basic net income (loss) per share	$ 4.30	$ (1.36)	$ 2.08
Diluted Net Income (Loss) Per Share
Diluted net income (loss)	$ 948,581	$ (295,697)	$ 446,906
Weighted average common shares outstanding	220,428,000	218,073,000	214,913,000
Dilutive stock options and awards	1,646,000		2,744,000
Weighted average shares used to compute diluted net income (loss) per share	222,074,000	218,073,000	217,657,000
Diluted net income (loss) per share	$ 4.27	$ (1.36)	$ 2.05
Anti-dilutive securities
Potential common shares excluded from diluted net income (loss) per share computation	10,106,837	15,274,871	9,718,828
Convertible Senior Notes 1.25 Percent Due 2020
Net income per share
Interest rate of debt (as a percent)		1.25%
Employee Stock Option
Anti-dilutive securities
Potential common shares excluded from diluted net income (loss) per share computation	10,106,837	15,274,871	9,349,889
Convertible Senior Notes 1.25 Percent Due 2020
Anti-dilutive securities
Potential common shares excluded from diluted net income (loss) per share computation			368,939

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Taxes

Income (loss) from operations before income taxes

The (benefit) provision for income taxes is based on income (loss) before (benefit) provision for income taxes as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
U.S.	$	991,873	$	(16,609)	$	712,486
Non-U.S.		(421,429)		(215,609)		(225,695)
Income (loss) before (benefit) provision for income taxes	$	570,444	$	(232,218)	$	486,791

Schedule of (benefit) provision for income taxes

Our (benefit) provision for income taxes consists of the following (in thousands):


	Year Ended December 31,
	2021		2020		2019
Current:
Federal	$	50,565	$	43,595	$	23,526
State		32,505		18,881		11,553
Foreign		4,397		1,353		5,183
		87,467		63,829		40,262
Deferred:
Federal		(407,852)		—		—
State		(57,677)		—		(205)
Foreign		(75)		(350)		(172)
		(465,604)		(350)		(377)
Total (benefit) provision for income taxes	$	(378,137)	$	63,479	$	39,885

Schedule of reconciliation of income taxes at the U.S. federal statutory rate to the (benefit) provision for income taxes

A reconciliation of income taxes at the U.S. federal statutory rate to the (benefit) provision for income taxes is as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
Provision (benefit) at U.S. federal statutory rate	$	119,793	$	(48,766)	$	102,226
State and local income taxes		34,461		(21,637)		15,109
Foreign tax rate differential		55,171		30,839		57,351
Income tax credits		(55,139)		(38,221)		(60,072)
Change in valuation allowance		(523,279)		158,815		(70,264)
Foreign-derived intangible income		(28,259)		(22,830)		(9,153)
Stock based compensation		15,497		2,802		(414)
Other		3,618		2,477		5,102
(Benefit) provision for income taxes	$	(378,137)	$	63,479	$	39,885

Schedule of significant components of deferred tax assets and liabilities

Significant components of our deferred tax assets and liabilities are as follows (in thousands):


	December 31,
	2021		2020
Deferred tax assets:
Net operating loss carry forwards	$	137,935	$	128,088
Federal and state research credits		206,184		305,099
Capitalized research and development		59,247		43,806
Deferred revenue and accruals		42,326		27,467
Non-cash compensation		83,002		75,867
Acquisition-related contingent consideration		31,450		32,658
Intangibles, net		305,228		289,848
Long term investments		34,733		25,968
Other		15,991		26,422
Total gross deferred tax assets		916,096		955,223
Less valuation allowance for deferred tax assets		(408,180)		(930,209)
Net deferred tax assets	$	507,916	$	25,014

Deferred tax liabilities:
Property and equipment	$	(33,259)	$	(19,880)
Other		(7,119)		(3,080)
Total gross deferred tax liabilities		(40,378)		(22,960)
Net deferred tax assets	$	467,538	$	2,054

Schedule of operating loss and tax credit carryforwards

As of December 31, 2021, we had net operating loss (“NOL”) carryforwards, research and development credit carryforwards and orphan drug tax credit carryforwards as follows (in thousands):


	Amount		Expiring if not utilized
Net operating loss carryforwards
State	$	296,112	2022 through 2041; indefinite
Foreign		1,422,407	2022 through 2028
Research and development credit carryforwards
Federal		114,595	2037 through 2041
State		21,062	2021 through 2040; indefinite
Orphan drug tax credit carryforwards		121,389	2036 through 2041

Unrecognized tax benefits

The following table summarizes the gross amounts of unrecognized tax benefits (in thousands):


	Year Ended December 31,
	2021		2020
Balance at beginning of year	$	31,597	$	24,251
Additions related to prior periods tax positions		28,488		3,953
Reductions related to prior periods tax positions		(311)		(216)
Additions related to current period tax positions		3,042		4,119
Settlements		(95)		(201)
Reductions due to lapse of applicable statute of limitations		(288)		(397)
Currency translation adjustment		(74)		88
Balance at end of year	$	62,359	$	31,597

Commitments and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies

Commitments and Contingencies

Note 15. Commitments and Contingencies

Commitments

In August 2021, we entered into a revolving credit and guaranty agreement (the “Credit Agreement”) among the Incyte Corporation, as borrower, subsidiary Incyte Holdings Corporation, as a guarantor, a group of lenders (the “Lenders”), and J.P. Morgan Chase Bank, N.A. as administrative agent. Under the Credit Agreement, the Lenders have committed to provide an unsecured three-year revolving credit facility in an aggregate principal amount of up to $500.0 million. We may increase the maximum revolving commitments or add one or more incremental term loan facilities to the Credit Agreement, subject to obtaining commitments from any participating lenders and certain other conditions, in an amount not to exceed (1) $250.0 million plus (2) an additional amount, so long as after giving effect to the incurrence of such additional amount, the Company’s pro forma consolidated leverage ratio would not exceed 0.25 above its consolidated leverage ratio in effect immediately prior to giving effect to such increase.

Loans under the Credit Agreement will bear interest, at our option, at a per annum rate equal to either (a) a base rate plus an applicable rate per annum varying from 0.125% to 0.875% depending on the consolidated leverage ratio or (b) a Eurodollar rate plus an applicable rate per annum varying from 1.125% to 1.875% depending on the consolidated leverage ratio. Commitment fees payable on the undrawn amount range from 0.150% per annum to 0.225% per annum, based on our consolidated leverage ratio.

As of December 31, 2021, we are in compliance with all financial and operational covenants under the terms of the Credit Agreement and there were no outstanding borrowings or letters of credit outstanding. We capitalized approximately $1.3 million in debt issuance costs related to the execution of the Credit Agreement. The debt issuance costs are being amortized over the term of the facility.

Contingencies

In December 2018, we received a civil investigative demand from the U.S. Department of Justice (“DOJ”) for documents and information relating to our speaker programs and patient assistance programs, including our support of non-profit organizations that provide financial assistance to eligible patients. In November 2019, the qui tam complaint underlying the DOJ inquiry was unsealed (“Complaint”), at which time we learned that a former employee whom we had terminated had made certain allegations relating to the programs described above. We filed an Answer to the Complaint

on January 22, 2020 and on November 12, 2020 we filed a Motion for Summary Judgment (“Motion”). All briefing on the Motion was completed on December 22, 2020. While we deny that any improper claims were submitted to government payers, we agreed on May 4, 2021 to settle the matter with the DOJ Civil Division for $12.6 million, plus certain statutory fees, which was recorded in selling, general and administrative expense during the year ended December 31, 2021.

In the ordinary course of our business, we may become involved in lawsuits, proceedings, and other disputes, including commercial, intellectual property, regulatory, employment, and other matters. We record a reserve for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

We have entered into the collaboration agreements described in Note 6, as well as various other collaboration agreements that are not individually, or in the aggregate, significant to our operating results or financial condition at this time. We may in the future seek to license additional rights relating to technologies or drug development candidates in connection with our drug discovery and development programs. Under these agreements, we may be required to pay upfront fees, milestone payments, and royalties on sales of future products.

License Agreements - Innovent (Details) - Innovent $ in Millions	1 Months Ended		12 Months Ended
	Jan. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2021 USD ($) item	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
License agreements
Upfront and immediate milestone payment to be received under license agreement	$ 40.0
Product candidates \| item			3
Development and Regulatory Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone					$ 20.0
Development and Regulatory Milestones \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement		$ 94.0
Development and Regulatory Milestones \| PEMAZYRE
License agreements
Amount recognized and received for the achievement of a predefined milestone			$ 10.0	$ 5.0
Commercialization Milestones \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement						$ 202.5

Concentrations of Credit Risk and Current Expected Credit Losses (Tables)

12 Months Ended

Dec. 31, 2021

Concentrations of Credit Risk and Current Expected Credit Losses

Schedule of concentration of credit risk related to specialty pharmacy customers


	Percentage of Total Net
	Product Revenues for the
	Years Ended,
	December 31,
	2021		2020		2019
Customer A	18	%	20	%	20	%
Customer B	12	%	13	%	13	%
Customer C	18	%	17	%	16	%
Customer D	9	%	11	%	11	%
Customer E	11	%	10	%	8	%

Stockholders' Equity - RSU and PSU Narrative (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended	12 Months Ended
	Jul. 31, 2016	Jun. 30, 2016	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Stock Compensation Plans
Stock compensation expense			$ 183.0	$ 177.9	$ 166.6
Employee Stock Option
Stock Compensation Plans
Vesting period	4 years	3 years
Employee Stock Option \| Tranche One
Stock Compensation Plans
Percentage of units vesting at the end of each calendar year (as a percent)	25.00%	33.00%
Vesting period	1 year	1 year
Employee Stock Option \| Tranche Two
Stock Compensation Plans
Vesting period	36 months	24 months
Restricted Stock Units (RSUs) [Member]
Stock Compensation Plans
Number of shares awarded for each RSU (in shares)			1
Percentage of units vesting at the end of each calendar year (as a percent)			25.00%
Vesting period			4 years
Granted (in shares)			2,102,386
Performance Stock Units (PSUs)
Stock Compensation Plans
Vesting period			4 years
Stock compensation expense			$ 8.3	$ 13.9	$ 9.9
Granted (in shares)			214,449
Performance Stock Units (PSUs) \| Minimum
Stock Compensation Plans
Vesting period			3 years
Performance Stock Units (PSUs) \| Maximum
Stock Compensation Plans
Vesting period			4 years

License Agreements - Agenus (Details) $ / shares in Units, $ in Thousands, shares in Millions		1 Months Ended	12 Months Ended			84 Months Ended
	Feb. 01, 2017 USD ($) $ / shares shares	Jan. 31, 2015 item	Dec. 31, 2021 USD ($) shares	Dec. 31, 2020 USD ($) shares	Dec. 31, 2019 USD ($)	Dec. 31, 2021 USD ($)
License agreements
Long term investments			$ 221,266	$ 222,301		$ 221,266
Unrealized gain (loss) on long term investments			(24,072)	10,426	$ 34,458
Research and development expense			1,458,179	2,215,942	1,154,111
Agenus
License agreements
Long term investments			$ 38,900	$ 44,700		$ 38,900
Shares divested (in shares) \| shares			2.0	3.7
Gross proceeds from sale of stock			$ 10,500	$ 17,200
Ownership percentage (as a percent)			5.00%			5.00%
Unrealized gain (loss) on long term investments			$ 4,600	$ (10,300)	$ 30,000
Stock purchase agreement \| Agenus
License agreements
Purchase of common stock under Stock Purchase Agreement (in shares ) \| shares	10.0
Purchase price of common stock	$ 60,000
Per share price \| $ / shares	$ 6.00
Agenus
License agreements
Number of program targets \| item		4
Royalty payments on future global net sales (as a percent)			15.00%
Milestone payment made under license agreement						$ 30,000
Agenus \| Development, Regulatory and Commercialization Milestones
License agreements
Additional milestone payments under the license agreement			$ 500,000			$ 500,000
Agenus \| Development, Regulatory and Commercialization Milestones \| Minimum
License agreements
Royalty payments on future global net sales (as a percent)			6.00%
Agenus \| Development, Regulatory and Commercialization Milestones \| Maximum
License agreements
Royalty payments on future global net sales (as a percent)			12.00%

Income Taxes - Reconciliation of income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Reconciliation of income taxes at the U.S. federal statutory rate to the provision for income taxes
Provision (benefit) at U.S. federal statutory rate	$ 119,793	$ (48,766)	$ 102,226
State and local income taxes	34,461	(21,637)	15,109
Foreign tax rate differential	55,171	30,839	57,351
Income tax credits	(55,139)	(38,221)	(60,072)
Change in valuation allowance	(523,279)	158,815	(70,264)
Foreign-derived intangible income	(28,259)	(22,830)	(9,153)
Stock based compensation	15,497	2,802	(414)
Other	3,618	2,477	5,102
(Benefit) provision for income taxes	$ (378,137)	$ 63,479	$ 39,885
Federal corporate tax rate (as a percent)	21.00%	21.00%	21.00%
Deferred tax assets:
Net operating loss carry forwards	$ 137,935	$ 128,088
Federal and state research credits	206,184	305,099
Capitalized research and development	59,247	43,806
Deferred revenue and accruals	42,326	27,467
Non-cash compensation	83,002	75,867
Acquisition-related contingent consideration	31,450	32,658
Intangibles, net	305,228	289,848
Long term investments	34,733	25,968
Other	15,991	26,422
Total gross deferred tax assets	916,096	955,223
Less valuation allowance for deferred tax assets	(408,180)	(930,209)
Net deferred tax assets	507,916	25,014
Deferred tax liabilities:
Property and equipment	(33,259)	(19,880)
Other	(7,119)	(3,080)
Total gross deferred tax liabilities	(40,378)	(22,960)
Net deferred tax assets	467,538	2,054
Deferred tax assets valuation allowance
Increase (decrease) in valuation allowance	$ (522,000)	$ 159,700	$ (66,500)

Stockholders' Equity - Preferred stock and common stock (Details) - shares	Dec. 31, 2021	Dec. 31, 2020
Stockholders' Equity
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares outstanding	0	0
Common stock, shares authorized	400,000,000	400,000,000

License Agreements - Nimble (Details) - Nimble - Maximum $ in Millions	Sep. 30, 2020 USD ($)
Future contingent discovery milestones
Additional milestone payments under the license agreement	$ 8.0
Development and Regulatory Milestones
Additional milestone payments under the license agreement	127.0
Commercialization Milestones
Additional milestone payments under the license agreement	$ 130.0

Commitments and contingencies - Commitments (Details) - Credit Agreement $ in Millions	1 Months Ended
	Aug. 31, 2021 USD ($)	Dec. 31, 2021 USD ($)
Commitments
Aggregate Principal amount	$ 500.0
Increase in maximum revolving commitments	$ 250.0
Consolidated leverage ratio	0.25
Capitalized debt issuance costs		$ 1.3
Minimum
Commitments
Commitment fee (as a percent)	0.15%
Maximum
Commitments
Commitment fee (as a percent)	0.225%
Base Rate \| Minimum
Commitments
Interest rate margin (as a percent)	0.125%
Base Rate \| Maximum
Commitments
Interest rate margin (as a percent)	0.875%
Eurodollar Rate \| Minimum
Commitments
Interest rate margin (as a percent)	1.125%
Eurodollar Rate \| Maximum
Commitments
Interest rate margin (as a percent)	1.875%

Stock Compensation (Tables)

12 Months Ended

Dec. 31, 2021

Stock Compensation

Schedule of valuation assumptions used for valuation of fair value of stock compensation granted

We utilized the Black-Scholes valuation model for estimating the fair value of the stock options granted, with the following weighted-average assumptions:


	Employee Stock Options						Employee Stock Purchase Plan
	For the year ended December 31,						For the year ended December 31,
	2021		2020		2019		2021		2020		2019
Average risk-free interest rates	0.62	%	0.80	%	2.27	%	0.40	%	0.17	%	1.82	%
Average expected life (in years)	5.01		4.98		5.27		0.50		0.50		0.50
Volatility	39	%	40	%	45	%	33	%	45	%	31	%
Weighted-average fair value (in dollars)	29.03		32.65		32.38		18.02		19.13		14.04

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Cash flows from operating activities:
Net income (loss)	$ 948,581	$ (295,697)	$ 446,906
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	57,844	51,807	54,533
Stock-based compensation	183,006	177,877	166,589
Deferred income taxes (including benefit from valuation allowance release)	(465,604)	(350)	(377)
Other, net	1,417	546	486
Unrealized loss (gain) on long term investments	24,072	(10,426)	(34,458)
Change in fair value of acquisition-related contingent consideration	14,741	23,385	19,682
Changes in operating assets and liabilities:
Accounts receivable	(134,306)	(173,185)	(1,211)
Prepaid expenses and other assets	(64,080)	(8,050)	5,744
Inventory	(20,965)	(19,468)	(6,100)
Accounts payable	73,343	15,120	(20,180)
Accrued and other liabilities	131,439	113,842	79,042
Net cash provided by (used in) operating activities	749,488	(124,599)	710,656
Cash flows from investing activities:
Purchase of long term investments	(33,510)	(95,468)
Sale of long term investments	10,473	17,250
Capital expenditures	(181,006)	(187,379)	(78,064)
Purchases of marketable securities	(235,167)	(516,874)	(374,809)
Sale and maturities of marketable securities	231,511	513,470	365,419
Net cash used in investing activities	(207,699)	(269,001)	(87,454)
Cash flows from financing activities:
Proceeds from issuance of common stock under stock plans	58,626	133,064	80,050
Tax withholdings related to restricted and performance share vesting	(29,940)	(22,759)	(16,751)
Payment of finance lease liabilities	(2,417)	(836)	(822)
Payment of contingent consideration	(20,093)	(37,760)	(16,766)
Net cash provided by financing activities	6,176	71,709	45,711
Effect of exchange rates on cash, cash equivalents, restricted cash and investments	(3,570)	2,949	(192)
Net increase (decrease) in cash, cash equivalents, restricted cash and investments	544,395	(318,942)	668,721
Cash, cash equivalents, restricted cash and investments at beginning of period	1,514,765	1,833,707	1,164,986
Cash, cash equivalents, restricted cash and investments at end of period	2,059,160	1,514,765	1,833,707
Supplemental Schedule of Cash Flow Information
Interest paid	396	194	239
Income taxes paid	67,731	70,712	33,553
Unpaid purchases of property and equipment	27,098	22,807	12,732
Leased assets obtained in exchange for new operating lease liabilities	14,416	19,908	7,607
Leased assets obtained in exchange for new finance lease liabilities	$ 1,513	2,160	$ 29,889
Convertible Senior Notes 1.25 Percent Due 2020
Supplemental Schedule of Cash Flow Information
Reclassification to common stock and additional paid in capital in connection with conversion/exchange of debt instruments		$ 18,999

Stock Compensation

12 Months Ended

Dec. 31, 2021

Stock Compensation

Stock Compensation

Note 11. Stock Compensation

We recorded $183.0 million, $177.9 million and $166.6 million, respectively, of stock compensation expense for the years ended December 31, 2021, 2020 and 2019. Stock compensation expense within the consolidated statements of operations included research and development expense for the years ended December 31, 2021, 2020 and 2019 of $114.3 million, $120.4 million and $114.0 million, respectively. Stock compensation expense within the consolidated statements of operations also included selling, general and administrative expense for the years ended December 31, 2021, 2020 and 2019 of $67.0 million, $56.6 million and $51.9 million, respectively. Stock compensation expense within the consolidated statements of operations also included cost of product revenues for the years ended December 31, 2021, 2020 and 2019 of $1.7 million, $1.0 million and $0.7 million, respectively. For the years ended December 31, 2021, 2020 and 2019, we capitalized $2.1 million, $0.6 million and $0.4 million, respectively, of stock compensation expense as part of the cost of assets.

We utilized the Black-Scholes valuation model for estimating the fair value of the stock options granted, with the following weighted-average assumptions:


	Employee Stock Options						Employee Stock Purchase Plan
	For the year ended December 31,						For the year ended December 31,
	2021		2020		2019		2021		2020		2019
Average risk-free interest rates	0.62	%	0.80	%	2.27	%	0.40	%	0.17	%	1.82	%
Average expected life (in years)	5.01		4.98		5.27		0.50		0.50		0.50
Volatility	39	%	40	%	45	%	33	%	45	%	31	%
Weighted-average fair value (in dollars)	29.03		32.65		32.38		18.02		19.13		14.04

The risk-free interest rate is derived from the U.S. Federal Reserve rate in effect at the time of grant. The expected life calculation is based on the observed and expected time to the exercise of options by our employees based on historical exercise patterns for similar type options. Expected volatility is based on the historical volatility of our common stock over the period commensurate with the expected life of the options. A dividend yield of zero is assumed based on the fact that we have never paid cash dividends and have no present intention to pay cash dividends. Nonemployee awards are measured on the grant date by estimating the fair value of the equity instruments to be issued using the expected term, similar to our employee awards.

Based on our historical experience of employee turnover, we have assumed an annualized forfeiture rate of 5% for our options, PSUs and RSUs. Under the true-up provisions of the stock compensation guidance, we will record additional expense as the awards vest if the actual forfeiture rate is lower than we estimated, and will record a recovery of

prior expense if the actual forfeiture is higher than we estimated.

Total compensation cost of options granted but not yet vested as of December 31, 2021, was $62.2 million, which is expected to be recognized over the weighted average period of 1.1 years. Total compensation cost of RSUs granted but not yet vested, as of December 31, 2021, was $162.9 million, which is expected to be recognized over the weighted average period of 1.9 years. Total compensation cost of PSUs granted but not yet vested, as of December 31, 2021, was $24.3 million, which is expected to be recognized over the weighted average period of 1.9 years, should the underlying performance conditions be deemed probable of achievement.

Inventory (Tables)

12 Months Ended

Dec. 31, 2021

Inventory

Schedule of inventory

Our inventory balance consists of the following (in thousands):


	December 31,
	2021		2020
Raw materials	$	1,275	$	1,275
Work-in-process		39,895		21,242
Finished goods		15,768		13,456
Total inventory	$	56,938	$	35,973

License agreements

12 Months Ended

Dec. 31, 2021

License Agreements

License agreements

Note 6. License Agreements

Novartis

In November 2009, we entered into a Collaboration and License Agreement with Novartis. Under the terms of the agreement, Novartis received exclusive development and commercialization rights outside of the United States to our JAK inhibitor ruxolitinib and certain back-up compounds for hematologic and oncology indications, including all hematological malignancies, solid tumors and myeloproliferative diseases. We retained exclusive development and

commercialization rights to JAKAFI (ruxolitinib) in the United States and in certain other indications. Novartis also received worldwide exclusive development and commercialization rights to our MET inhibitor compound capmatinib and certain back-up compounds in all indications.

Under this agreement, we were initially eligible to receive up to $174.0 million for the achievement of development milestones, up to $495.0 million for the achievement of regulatory milestones and up to $500.0 million for the achievement of sales milestones. In addition, we are eligible to receive up to $75.0 million of additional potential development and regulatory milestones relating to GVHD. We have recognized and received, in the aggregate, $157.0 million for the achievement of development milestones, $280.0 million for the achievement of regulatory milestones and $200.0 million for the achievement of sales milestones through December 31, 2021.

We recognize development and regulatory milestones upon confirmation of achievement of the event, as development and regulatory approvals are events not controllable by us but rather development activities of Novartis and decisions made by regulatory agencies. We recognize sales milestones in the corresponding period of the product sale upon confirmation of net sales milestone threshold achievement by Novartis.

In 2020, we recognized a $25.0 million development milestone and a $45.0 million regulatory milestone for the FDA approval of capmatinib as TABRECTA for the treatment of adult patients with metastatic non-small cell lung cancer (NSCLC) whose tumors have a mutation that leads to MET exon 14 skipping (METex14) as detected by an FDA-approved test, a $20.0 million regulatory milestone for the Japanese Ministry of Health, Labour and Welfare approval of TABRECTA for METex14 mutation-positive advanced and/or recurrent unresectable non-small cell lung cancer and a $80.0 million sales milestone for Novartis achieving annual net sales of a JAK licensed product of $1.2 billion.

We also are eligible to receive tiered, double-digit royalties ranging from the upper-teens to the mid-twenties on future JAKAVI net sales outside of the United States, and tiered, worldwide royalties on TABRECTA net sales that range from 12% to 14%. We are obligated to pay to Novartis tiered royalties in the low single-digits on future JAKAFI net sales within the United States. During the years ended December 31, 2021, 2020 and 2019, such royalties payable to Novartis on net sales within the United States totaled $99.6 million, $89.9 million and $77.6 million, respectively, and were reflected in cost of product revenues on the consolidated statements of operations. At December 31, 2021 and 2020, $148.1 million and $96.4 million, respectively, of accrued royalties payable to Novartis were included in accrued and other current liabilities on the consolidated balance sheets. Each company is responsible for costs relating to the development and commercialization of ruxolitinib in its respective territories, with costs of collaborative studies shared equally. Novartis is also responsible for all costs relating to the development and commercialization of capmatinib.

The Novartis agreement will continue on a program-by-program basis until Novartis has no royalty payment obligations with respect to such program or, if earlier, the termination of the agreement or any program in accordance with the terms of the agreement. Royalties are payable by Novartis on a product-by-product and country-by-country basis until the latest to occur of (i) the expiration of the last valid claim of the licensed patent rights covering the licensed product in the relevant country, (ii) the expiration of regulatory exclusivity for the licensed product in such country and (iii) a specified period from first commercial sale in such country of the licensed product by Novartis or its affiliates or sublicensees. The agreement may be terminated in its entirety or on a program-by-program basis by Novartis for convenience. The agreement may also be terminated by either party under certain other circumstances, including material breach.

Milestone and contract revenue under the Novartis agreement was $0.0 million, $170.0 million and $0.0 million for the years ended December 31, 2021, 2020 and 2019, respectively. In addition, for the years ended December 31, 2021, 2020 and 2019, we recorded $338.0 million, $277.9 million and $225.9 million, respectively, of product royalty revenues related to Novartis net sales of JAKAVI outside the United States. For the years ended December 31, 2021 and 2020 we recorded $10.4 million and $4.1 million, respectively, of product royalty revenues related to Novartis net sales of TABRECTA worldwide.

Lilly - Baricitinib

In December 2009, we entered into a License, Development and Commercialization Agreement with Lilly. Under the terms of the agreement, Lilly received exclusive worldwide development and commercialization rights to our JAK inhibitor baricitinib, and certain back-up compounds for inflammatory and autoimmune diseases.

Under this agreement, we were initially eligible to receive up to $150.0 million for the achievement of development milestones, up to $365.0 million for the achievement of regulatory milestones and up to $150.0 million for the achievement of sales milestones. We have recognized and received, in aggregate, $149.0 million for the achievement of development milestones, $265.0 million for the achievement of regulatory milestones and $50.0 million for the achievement of sales milestones through December 31, 2021.

We recognize development and regulatory milestones upon confirmation of achievement of the event, as development and regulatory approvals are events not controllable by us but rather development activities of Lilly and decisions made by regulatory agencies. We recognize sales milestones in the corresponding period of the product sale upon confirmation of net sales milestone threshold achievement by Lilly.

In 2021, we recognized a $50.0 million sales milestone for Lilly achieving annual net sales of a licensed product of $1.0 billion. In 2020, we recognized a $20.0 million regulatory milestone for the European Commission approval of OLUMIANT and a $10.0 million regulatory milestone for the MHLW approval of OLUMIANT for the treatment of moderate-to-severe atopic dermatitis in adult patients who are candidates for systemic therapy.

In May 2020, we amended our agreement with Lilly to enable Lilly to develop and commercialize baricitinib for the treatment of COVID-19. As part of the amended agreement, in addition to the royalties described above, we will be entitled to receive additional royalty payments with rates in the low teens on global net sales of baricitinib for the treatment of COVID-19 that exceed a specified aggregate global net sales threshold.

The Lilly agreement will continue until Lilly no longer has any royalty payment obligations or, if earlier, the termination of the agreement in accordance with its terms. Royalties are payable by Lilly on a product-by-product and country-by-country basis until the latest to occur of (i) the expiration of the last valid claim of the licensed patent rights covering the licensed product in the relevant country, (ii) the expiration of regulatory exclusivity for the licensed product in such country and (iii) a specified period from first commercial sale in such country of the licensed product by Lilly or its affiliates or sublicensees. The agreement may be terminated by Lilly for convenience, and may also be terminated under certain other circumstances, including material breach.

Milestone and contract revenue under the Lilly agreement was $50.0 million, $30.0 million and $0.0 million, respectively, for the years ended December 31, 2021, 2020 and 2019. In addition, for the years ended December 31, 2021, 2020 and 2019, we recorded $220.9 million, $110.9 million and $80.4 million, respectively, of product royalty revenues related to Lilly net sales of OLUMIANT outside the United States.

Lilly – Ruxolitinib

In March 2016, we entered into an amendment to the agreement with Lilly that amended the non-compete provision of the agreement to allow us to engage in the development and commercialization of ruxolitinib in the GVHD field. Lilly is eligible to receive up to $40.0 million in regulatory milestone payments relating to ruxolitinib in the GVHD field. In May 2019, the approval of JAKAFI in steroid-refractory acute GVHD triggered a $20.0 million milestone payment to Lilly.

Agenus

In January 2015, we entered into a License, Development and Commercialization Agreement with Agenus Inc. and its wholly-owned subsidiary, 4-Antibody AG (now known as Agenus Switzerland Inc.), which we collectively refer to as Agenus. Under this agreement, which was amended in February 2017, the parties have agreed to collaborate on the discovery of novel immuno-therapeutics using Agenus’ antibody discovery platforms. Under the terms of the amended

agreement, we received exclusive worldwide development and commercialization rights to four checkpoint modulators directed against GITR, OX40, LAG-3 and TIM-3 as well as two undisclosed targets. Targets may be designated profit-share programs, where all costs and profits are shared equally by us and Agenus, or royalty-bearing programs, where we are responsible for all costs associated with discovery, preclinical, clinical development and commercialization activities. There are currently no profit-share programs. For each royalty-bearing product other than GITR, OX40 and one undisclosed target, Agenus will be eligible to receive tiered royalties on global net sales ranging from 6% to 12%. For GITR, OX40 and one undisclosed target, Agenus will be eligible to receive 15% royalties on global net sales. The agreement may be terminated by us for convenience upon 12 months’ notice and may also be terminated under certain other circumstances, including material breach.

As of December 31, 2021, we have paid Agenus milestones totaling $30.0 million and Agenus is eligible to receive up to an additional $500.0 million in future contingent development, regulatory and commercialization milestones across all programs in the collaboration.

In addition, in 2017 we also agreed to purchase 10.0 million shares of Agenus common stock for an aggregate purchase price of $60.0 million in cash, or $6.00 per share. The fair market value of our long term investment in Agenus as of December 31, 2021 and 2020 was $38.9 million and $44.7 million, respectively. In 2020, we sold an aggregate of approximately 3.7 million shares of Agenus common stock resulting in gross proceeds of approximately $17.2 million. In 2021, we sold an aggregate of approximately 2.0 million shares of Agenus common stock resulting in gross proceeds of approximately $10.5 million. As of December 31, 2021, we owned less than 5% of the outstanding shares of Agenus common stock.

We intend to hold the investment in Agenus for the foreseeable future and therefore, are accounting for our shares held in Agenus at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying consolidated balance sheets. For the years ended December 31, 2021, 2020 and 2019, we recorded an unrealized gain of $4.6 million, an unrealized loss of $10.3 million and an unrealized gain of $30.0 million, respectively, based on the change in fair value of Agenus Inc.’s common stock during the respective periods.

Merus

In December 2016, we entered into a Collaboration and License Agreement with Merus N.V. (“Merus”). Under this agreement, the parties have agreed to collaborate with respect to the research, discovery and development of bispecific antibodies utilizing Merus’ technology platform. The collaboration encompasses up to ten independent programs.

In January 2022, we decided to opt-out of the continued development of MCLA-145, a bispecific antibody targeting PD-L1 and CD137. We continue to collaborate with Merus and leverage the Merus platform to develop a pipeline of novel agents, as we continue to hold worldwide exclusive development and commercialization rights to up to ten additional programs. Of these ten additional programs, Merus retained the option, subject to certain conditions, to co-fund development of up to two such programs. If Merus exercises its co-funding option for a program, Merus would be responsible for funding 35% of the associated future global development costs and, for certain of such programs, would be responsible for reimbursing us for certain development costs incurred prior to the option exercise. Merus will also have the right to participate in a specified proportion of detailing activities in the United States for one of those co-developed programs. All costs related to the co-funded collaboration programs are subject to joint research and development plans and overseen by a joint development committee, but we will have final determination as to such plans in cases of dispute. We will be responsible for all research, development and commercialization costs relating to all other programs.

For each program as to which Merus does not have commercialization or development co-funding rights, Merus is eligible to receive up to $100.0 million in future contingent development and regulatory milestones, and up to $250.0 million in commercialization milestones as well as tiered royalties ranging from 6% to 10% of global net sales. For each program as to which Merus exercises its option to co-fund development, Merus is eligible to receive a 50% share of profits (or sustain 50% of any losses) in the United States and be eligible to receive tiered royalties ranging from 6% to 10% of net sales of products outside of the United States. If Merus opts to cease co-funding a program as to which it exercised its co-development option, then Merus will no longer receive a share of profits in the United States but will be eligible to

receive the same milestones from the co-funding termination date and the same tiered royalties described above with respect to programs where Merus does not have a right to co-fund development and, depending on the stage at which Merus chose to cease co-funding development costs, Merus will be eligible to receive additional royalties ranging up to 4% of net sales in the United States. As of December 31, 2021, we have paid Merus milestones totaling $2.0 million.

The Merus agreement will continue on a program-by-program basis until we have no royalty payment obligations with respect to such program or, if earlier, the termination of the agreement or any program in accordance with the terms of the agreement. The agreement may be terminated in its entirety or on a program-by-program basis by us for convenience. The agreement may also be terminated by either party under certain other circumstances, including material breach, as set forth in the agreement. If the agreement is terminated with respect to one or more programs, all rights in the terminated programs revert to Merus, subject to payment to us of a reverse royalty of up to 4% on sales of future products, if Merus elects to pursue development and commercialization of products arising from the terminated programs.

In addition, in 2016 we entered into a Share Subscription Agreement with Merus, pursuant to which we agreed to purchase 3.2 million common shares of Merus for an aggregate purchase price of $80.0 million in cash, or $25.00 per share. The fair market value of our total long term investment in Merus as of December 31, 2021 and 2020 was $112.9 million and $56.1 million, respectively. In January 2021, we purchased 350,000 common shares in Merus’ underwritten public offering of 4,848,485 common shares at the public offering price of $24.75 per share, or an aggregate purchase price of $8.7 million. As of December 31, 2021, we owned approximately 8% of the outstanding common shares of Merus.

We have concluded that we have the ability to exercise significant influence, but not control, over Merus based primarily on our ownership interest, the level of intra-entity transactions between us and Merus related to development expenses, as well as other qualitative factors. We have elected the fair value option to account for our long term investment in Merus whereby the investment is marked to market through earnings in each reporting period. We believe the fair value option to be the most appropriate accounting method to account for securities in publicly held collaborators for which we have significant influence. For the years ended December 31, 2021, 2020 and 2019, we recorded an unrealized gain of $48.1 million, $11.0 million, and $0.3 million, respectively, based on the change in fair value of Merus’ common shares during the respective periods.

Calithera

In January 2017, we entered into a Collaboration and License Agreement with Calithera Biosciences, Inc. (“Calithera”). Under this agreement, we received an exclusive, worldwide license to develop and commercialize small molecule arginase inhibitors, including INCB01158. We have agreed to co-fund 70% of the global development costs for the development of the licensed products for hematology and oncology indications. Calithera will have the right to conduct certain clinical development under the collaboration, including combination studies of a licensed product with a proprietary compound of Calithera. We will be entitled to 60% of the profits and losses from net sales of licensed product in the United States, and Calithera will have the right to co-detail licensed products in the United States, and we have agreed to pay Calithera tiered royalties ranging from the low to mid-double digits on net sales of licensed products outside the United States.

As of December 31, 2021, we have paid Calithera milestones totaling $12.0 million. Calithera delivered notice of its decision to opt out of its co-funding obligation, effective on September 30, 2020. As a result, the U.S. profit sharing will no longer be in effect, we will be responsible for funding all of the development costs of INCB01158 and any other licensed products, and the agreement provides that we will pay Calithera tiered royalties ranging from the low to mid-double digits on net sales of licensed products both in the United States and outside the United States and additional royalties to reimburse Calithera for previously incurred development costs. Calithera is eligible to receive $720.0 million in potential future development, regulatory and sales milestone payments and will have no further rights to research, develop or co-detail INCB001158. We will have the right to take over the conduct of all activities related to the research, development and commercialization of INCB001158 for all indications in the hematology/oncology field.

The Calithera agreement will continue on a product-by-product and country-by-country basis for so long as we are developing or commercializing products in the United States (if the parties are sharing profits in the United States) and until we have no further royalty payment obligations, unless earlier terminated according to the terms of the agreement.

The agreement may be terminated in its entirety or on a product-by-product and/or a country-by-country basis by us for convenience. The agreement may also be terminated by us for Calithera’s uncured material breach, by Calithera for our uncured material breach and by either party for bankruptcy or patent challenge. If the agreement is terminated early with respect to one or more products or countries, all rights in the terminated products and countries revert to Calithera.

In addition, in 2017, we entered into a Stock Purchase Agreement with Calithera for the purchase of 1.7 million common shares of Calithera for an aggregate purchase price of $8.0 million in cash, or $4.65 per share. The fair market value of our long term investment in Calithera as of December 31, 2021 and 2020 was $1.1 million and $8.4 million, respectively. As of December 31, 2021, we owned approximately 2% of the outstanding shares of Calithera common stock.

We intend to hold the investment in Calithera for the foreseeable future and therefore, are accounting for our shares held in Calithera at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying consolidated balance sheets. For the years ended December 31, 2021, 2020 and 2019, we recorded an unrealized loss of $7.3 million, an unrealized loss of $1.4 million, and an unrealized gain of $2.9 million, respectively, based on the change in fair value of Calithera’s common stock during the respective periods.

MacroGenics

In October 2017, we entered into a Global Collaboration and License Agreement with MacroGenics, Inc. (“MacroGenics”). Under this agreement, we received exclusive development and commercialization rights worldwide to MacroGenics’ INCMGA0012 (formerly MGA012), an investigational monoclonal antibody that inhibits PD-1. Except as set forth in the succeeding sentence, we have sole authority over and bear all costs and expenses in connection with the development and commercialization of INCMGA0012 in all indications, whether as a monotherapy or as part of a combination regimen. MacroGenics has retained the right to develop and commercialize, at its cost and expense, its pipeline assets in combination with INCMGA0012. In addition, MacroGenics has the right to manufacture a portion of both companies’ global clinical and commercial supply needs of INCMGA0012.

As of December 31, 2021, we have paid MacroGenics developmental milestones totaling $70.0 million. MacroGenics is eligible to receive up to an additional $350.0 million in future contingent development and regulatory milestones, and up to $330.0 million in sales milestones as well as tiered royalties ranging from 15% to 24% of global net sales.

The MacroGenics agreement will continue until we are no longer commercializing, developing or manufacturing INCMGA0012 or, if earlier, the termination of the agreement in accordance with its terms. The agreement may be terminated in its entirety or on a licensed product by licensed product basis by us for convenience. The agreement may also be terminated by either party under certain other circumstances, including material breach, as set forth in the agreement.

Research and development expenses for the years ended December 31, 2021, 2020 and 2019, also included $72.3 million, $59.0 million and $51.1 million, respectively, of additional development costs incurred pursuant to the MacroGenics agreement. At December 31, 2021 and 2020, a total of $0.7 million and $0.1 million, respectively, of such costs were included in accrued and other liabilities on the consolidated balance sheets.

Syros

In January 2018, we entered into a Target Discovery, Research Collaboration and Option Agreement with Syros Pharmaceuticals, Inc. (“Syros”). Under this agreement, Syros will use its proprietary gene control platform to identify novel therapeutic targets with a focus in myeloproliferative neoplasms and we have received options to obtain exclusive worldwide rights to intellectual property resulting from the collaboration for up to seven validated targets. We will have exclusive worldwide rights to develop and commercialize any therapies under the collaboration that modulate those validated targets. We have agreed to pay Syros up to $54.0 million in target selection and option exercise fees should we decide to exercise all of our options under the agreement. For products resulting from the collaboration against each of the

seven selected and validated targets, we have agreed to pay up to $50.0 million in potential development and regulatory milestones and up to $65.0 million in potential sales milestones. Syros is also eligible to receive low single-digit royalties on net sales of products resulting from the collaboration.

In addition, in 2018, we entered into a Stock Purchase Agreement with Syros for the purchase of 0.8 million shares of common stock of Syros for an aggregate purchase price of $10.0 million in cash, or $12.61 per share. Subsequently in 2018, we entered into an Amended Stock Purchase Agreement with Syros for the purchase of an additional 0.1 million common shares of Syros for an aggregate purchase price of $1.4 million in cash, or $9.55 per share. The fair market value of our long term investment in Syros as of December 31, 2021 and 2020 was $3.1 million and $10.2 million, respectively. As of December 31, 2021, we owned approximately 2% of the outstanding shares of Syros common stock.

We intend to hold the investment in Syros for the foreseeable future and therefore, are accounting for our shares held in Syros at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying consolidated balance sheets. For the years ended December 31, 2021, 2020 and 2019, we recorded an unrealized loss of $7.1 million, an unrealized gain of $3.7 million and an unrealized gain of $1.3 million, respectively, based on the change in fair value of Syros’ common stock during the respective periods.

Innovent

In December 2018, we entered into a Research Collaboration and Licensing Agreement with Innovent. Under the terms of this agreement, Innovent received exclusive development and commercialization rights to our clinical-stage product candidates pemigatinib, itacitinib and parsaclisib in hematology and oncology in mainland China, Hong Kong, Macau and Taiwan. In January 2019, we recognized an upfront payment under this agreement of $40.0 million upon our transfer of the functional intellectual property related to the clinical-stage product candidates to Innovent, which was recorded in milestone and contract revenues on the consolidated statement of operations for the year ended December 31, 2019. The upfront milestone was recognized as revenue at a point in time upon our transfer of the licenses to Innovent for the right to use the functional intellectual property. In addition, we are eligible to receive up to an additional $94.0 million in potential development and regulatory milestones.

In 2021, we recognized a $10.0 million milestone for approval of PEMAZYRE (pemigatinib) in Taiwan. In 2020, we recognized a $5.0 million milestone for the FDA approval of PEMAZYRE. In 2019, we recognized a $20.0 million milestone for the first related IND filing in China.

In the event of commercialization of the licensed molecule, we are eligible to receive up to $202.5 million in potential sales milestones from Innovent. We will recognize sales milestones in the corresponding period of the product sale upon confirmation of net sales milestone threshold achievement by Innovent. We are also eligible to receive tiered royalties from the high-teens to the low-twenties on future sales of products resulting from the collaboration. We retain an option to assist in the promotion of the three product candidates in the Innovent territories.

Zai Lab

In July 2019, we entered into a Collaboration and License Agreement with Zai Lab. Under the terms of this agreement, Zai Lab received development and exclusive commercialization rights to INCMGA0012 in hematology and oncology in mainland China, Hong Kong, Macau and Taiwan. In 2019, we recognized an upfront payment under this agreement of $17.5 million upon our transfer of the functional intellectual property related to the clinical-stage product candidates to Zai Lab, which was recorded in milestone and contract revenues on the consolidated statement of operations for the year ended December 31, 2019.

The agreement allows for Zai Lab to continue development of the licensed molecule and to submit the licensed molecule to authorities for regulatory approval within the agreement territory, upon which we are eligible for up to $22.5 million in potential development and regulatory milestones. We recognize development and regulatory milestones upon confirmation of achievement of the event, as development and regulatory approvals are events not controllable by us but rather development activities of Zai Lab and decisions made by regulatory agencies.

In the event of commercialization of the licensed molecule, we are eligible to receive up to $37.5 million in potential sales milestones from Zai Lab. We will recognize sales milestones in the corresponding period of the product sale upon confirmation of net sales milestone threshold achievement by Zai Lab. We are also eligible to receive tiered royalties from the low to mid-twenties on future product sales resulting from the collaboration. We also retain an option to assist in the promotion of INCMGA0012 in Zai Lab’s licensed territories.

MorphoSys

In January 2020, we entered into a Collaboration and License Agreement with MorphoSys AG and MorphoSys US Inc., a wholly-owned subsidiary of MorphoSys AG (together with MorphoSys AG, “MorphoSys”), covering the worldwide development and commercialization of MOR208 (tafasitamab), an investigational Fc engineered monoclonal antibody directed against the target molecule CD19 that is currently in clinical development by MorphoSys. MorphoSys has exclusive worldwide development and commercialization rights to tafasitamab under a June 2010 collaboration and license agreement with Xencor, Inc.

Under the terms of the agreement, we received exclusive commercialization rights outside of the United States, and MorphoSys and we have co-commercialization rights in the United States, with respect to tafasitamab. MorphoSys is responsible for leading the commercialization strategy and booking all revenue from sales of tafasitamab in the United States, and we and MorphoSys are both responsible for commercialization efforts in the United States and will share equally the profits and losses from the co-commercialization efforts. We will lead the commercialization strategy outside of the United States, and will be responsible for commercialization efforts and book all revenue from sales of tafasitamab outside of the United States, subject to our royalty payment obligations set forth below. We and MorphoSys have agreed to co-develop tafasitamab and to share development costs associated with global and U.S.-specific clinical trials, with Incyte responsible for 55% of such costs and MorphoSys responsible for 45% of such costs. Each company is responsible for funding any independent development activities, and we are responsible for funding development activities specific to territories outside of the United States. All development costs related to the collaboration are subject to a joint development plan.

In 2020, we paid MorphoSys an upfront non-refundable payment of $750.0 million. MorphoSys is eligible to receive up to $740.0 million in future contingent development and regulatory milestones and up to $315.0 million in commercialization milestones as well as tiered royalties ranging from the mid-teens to mid-twenties of net sales outside of the United States. MorphoSys’ right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of patent rights in that particular country, (b) a specified period of time after the first post-marketing authorization sale of a licensed product comprising tafasitamab in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country.

In addition, under the terms of the agreement and pursuant to a related purchase agreement, we agreed to purchase American Depositary Shares (“ADSs”), each representing 0.25 of an ordinary share of MorphoSys AG, for an aggregate purchase price of $150.0 million or $41.33 per ADS (such ADSs to be purchased, the “New ADSs”). The fair market value of our long term investment in MorphoSys as of December 31, 2021 and 2020 was $34.2 million and $102.9 million, respectively. As of December 31, 2021, we owned approximately 3% of the outstanding shares of MorphoSys common stock.

We intend to hold the investment in MorphoSys for the foreseeable future and therefore, are accounting for our shares held in MorphoSys at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying consolidated balance sheets. For the year ended December 31, 2021 and 2020, we

recorded an unrealized loss of $68.7 million and an unrealized gain of $7.4 million, respectively, based on the change in fair value of MorphoSys’ common stock during the respective periods.

Our 50% share of the United States loss for the commercialization of tafasitamab for the years ended December 31, 2021 and 2020 was $37.0 million and $42.8 million, respectively, and is recorded as collaboration loss sharing on the consolidated statement of operations. Research and development expenses for the year ended December 31, 2021 and 2020, included $77.0 million and $88.2 million, respectively, related to our 55% share of the co-development costs for tafasitamab. At December 31, 2021 and 2020, $21.5 million and $54.2 million, respectively, was included in accrued and other liabilities on the consolidated balance sheet for amounts due to MorphoSys under the agreement.

Nimble

In September 2020, we entered into a Collaboration and License Agreement with Nimble Therapeutics, Inc. (“Nimble”). Under the terms of this agreement, Nimble will utilize their peptide synthesis, screening and optimization platform for discovery and validation of peptides against specified targets. Under the agreement, Nimble is eligible to receive up to $8.0 million in future contingent discovery milestones and up to $127.0 million in future contingent development and regulatory milestones. Additionally, in the event of successful commercialization, Nimble is eligible to receive up to $130.0 million in future contingent sales milestones and tiered royalties on net sales in the low single digits.

InnoCare

In August 2021, we entered into a Collaboration and License Agreement with Sunny Investments Limited, a wholly-owned subsidiary of InnoCare Pharma Limited (“InnoCare”). InnoCare received development and exclusive commercialization rights to tafasitamab in hematology and oncology in mainland China, Hong Kong, Macau and Taiwan. In September 2021, we recognized an upfront payment under this agreement of $35.0 million upon our transfer of technology related to the licensed product candidate to InnoCare, which was recorded in milestone and contract revenues on the consolidated statement of operations for the year ended December 31, 2021. Under the terms of this agreement, we are eligible to receive up to an additional $45.0 million in potential development and regulatory milestones. We recognize development and regulatory milestones upon confirmation of achievement of the event, as development and regulatory approvals are events not controllable by us but rather development activities of InnoCare and decisions made by regulatory agencies. In the event of commercialization, we are eligible to receive up to $37.5 million in potential sales milestones from InnoCare. We will recognize sales milestones in the corresponding period of the product sale upon confirmation of net sales milestone threshold achievement by InnoCare. We are also eligible to receive tiered royalties from the low to mid-twenties on future product sales resulting from the collaboration.

Syndax

In September 2021, we entered into a Collaboration and License Agreement with Syndax Pharmaceuticals, Inc. (“Syndax”), covering the worldwide development and commercialization of SNDX-6352 (“axatilimab”). Axatilimab, currently in clinical development by Syndax, is a monoclonal antibody that blocks the colony stimulating factor-1 (CSF-1) receptor. Syndax has exclusive worldwide development and commercialization rights to axatilimab under a June 2016 license agreement with UCB Biopharma Sprl. The agreement became effective in December 2021 with the expiration of the initial waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Under the terms of the agreement, we received exclusive commercialization rights outside of the United States, and Syndax and we have co-commercialization rights in the United States, with respect to axatilimab. We will be responsible for leading the commercialization strategy and booking all revenue from sales of tafasitamab globally, and Syndax will have the option to co-commercialization axatilimab with Incyte in the United States. Incyte and Syndax will share equally the profits and losses from the co-commercialization efforts in the United States. Sales of axatilimab outside the United States will be subject to our royalty payment obligations to Syndax, as set forth below. We and Syndax have agreed to co-develop axatilimab and to share development costs associated with global and U.S.-specific clinical trials, with Incyte responsible for 55% of such costs and Syndax responsible for 45% of such costs. Each company is responsible for funding any independent development activities. All development costs related to the collaboration are subject to a

joint development plan.

In December 2021, we paid Syndax an upfront, non-refundable (except in the event of termination of the agreement as described below) payment of $117.0 million, which was recorded in research and development expense on the consolidated statement of operations for the year ended December 31, 2021. Syndax is eligible to receive up to $220.0 million in future contingent development and regulatory milestones and up to $230.0 million in sales milestones as well as tiered royalties ranging in the mid-teens on net sales in Europe and Japan and low double digit percentage on net sales in the rest of the world outside of the United States. Syndax’ right to receive royalties in any particular country will expire upon the last to occur of (a) the expiration of patent rights in that particular country, (b) a specified period of time after the first post-marketing authorization sale of a licensed product comprising tafasitamab in that country, and (c) the expiration of any regulatory exclusivity for that licensed product in that country.

We have the sole right to terminate the agreement beginning March 23, 2022 in the event of any formal action by a relevant governmental authority to challenge the transactions under this agreement that occurs prior to that date. If triggered, our right to terminate will expire on September 23, 2022. Exercise of this termination right would require Syndax to refund all payments under the agreement, including the $117.0 million upfront payment and any payments for development costs.

In addition, under the terms of the agreement and pursuant to a related stock purchase agreement, we agreed to purchase approximately 1.4 million shares of common stock of Syndax for an aggregate purchase price of $35.0 million, or $24.62 per share. We agreed, subject to limited exceptions, not to sell or otherwise transfer any of the shares for a six month period after the closing date of the sale. We completed the purchase of the shares on December 9, 2021 when the closing price on The Nasdaq Stock Market was $17.48 per share. Of the $35.0 million aggregate purchase price paid, $24.8 million was allocated to our stock purchase and was recorded within long term investments and $10.2 million, representing premium paid on the purchase, was allocated to research and development expense on the consolidated statement of operations for the year ended December 31, 2021. The fair market value of our long term investment in Syndax as of December 31, 2021 was $31.1 million. As of December 31, 2021, we owned approximately 3% of the outstanding shares of Syndax common stock.

We intend to hold the investment in Syndax for the foreseeable future and therefore, are accounting for our shares held in Syndax at fair value whereby the investment is marked to market through earnings in each reporting period. Given our intent to hold the investment for the foreseeable future, we have classified the investment within long term investments on the accompanying consolidated balance sheets. For the year ended December 31, 2021, we recorded an unrealized gain of $6.3 million based on the change in fair value of Syndax’s common stock during the period.

Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
Accrued and Other Current Liabilities
Royalties	$ 168,412	$ 106,011
Clinical related costs	109,486	115,897
Sales allowances	136,541	73,204
Sales and marketing	35,750	12,699
Construction in progress	27,098	22,807
Operating lease liabilities	10,554	12,674
Other current liabilities	45,754	35,112
Total accrued and other current liabilities	$ 533,595	$ 378,404

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2021

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Note 3. Fair Value of Financial Instruments

The following is a summary of our marketable security portfolio for the periods presented (in thousands):


			Net		Net
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value
December 31, 2021
Debt securities (government)	$	291,871	$	—	$	(1,119)	$	290,752

December 31, 2020
Debt securities (government)	$	288,199	$	170	$	—	$	288,369

Our available-for-sale debt securities generally have contractual maturity dates of between 12 to 18 months. Debt security assets were assessed for risk of expected credit losses per our accounting policy as described in Note 1. As of December 31, 2021 and 2020, the available-for-sale debt securities were held in U.S.-government backed securities and in Treasury bonds and were assessed on an individual security basis to have a de minimis risk of credit loss.

Fair Value Measurements

FASB accounting guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability (“the exit price”) in an orderly transaction between market participants at the measurement date. The standard outlines a valuation framework and creates a fair value hierarchy in order to increase the consistency and comparability of fair value measurements and the related disclosures. In determining fair value we use quoted prices and observable inputs. Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of us. The fair value hierarchy is broken down into three levels based on the source of inputs as follows:

Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Valuations based on observable inputs and quoted prices in active markets for similar assets and liabilities.

Level 3—Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement.

Recurring Fair Value Measurements

Our marketable securities consist of investments in U.S. government debt securities that are classified as available-for-sale.

At December 31, 2021 and 2020, our Level 2 U.S. government debt securities were valued using readily available pricing sources which utilize market observable inputs, including the current interest rate and other characteristics for similar types of investments. Our long term investments classified as Level 1 were valued using their respective closing stock prices on The Nasdaq Stock Market. We did not experience any transfers of financial instruments between the fair value hierarchy levels during the years ended December 31, 2021 and 2020.

The following fair value hierarchy table presents information about each major category of our financial assets measured at fair value on a recurring basis (in thousands):


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Balance as of
	(Level 1)		(Level 2)		(Level 3)		December 31, 2021
Cash and cash equivalents	$	2,057,440	$	—	$	—	$	2,057,440
Debt securities (government)		—		290,752		—		290,752
Long term investments (Note 6)		221,266		—		—		221,266
Total assets	$	2,278,706	$	290,752	$	—	$	2,569,458


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs		Balance as of
	(Level 1)		(Level 2)		(Level 3)		December 31, 2020
Cash and cash equivalents	$	1,513,008	$	—	$	—	$	1,513,008
Debt securities (government)		—		288,369		—		288,369
Long term investments (Note 6)		222,301		—		—		222,301
Total assets	$	1,735,309	$	288,369	$	—	$	2,023,678

The following fair value hierarchy table presents information about each major category of our financial liabilities measured at fair value on a recurring basis (in thousands):


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Liabilities		Inputs		Inputs		Balance as of
	(Level 1)		(Level 2)		(Level 3)		December 31, 2021
Acquisition-related contingent consideration	$	—	$	—	$	244,000	$	244,000
Total liabilities	$	—	$	—	$	244,000	$	244,000


	Fair Value Measurement at Reporting Date Using:
	Quoted Prices in		Significant Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Liabilities		Inputs		Inputs		Balance as of
	(Level 1)		(Level 2)		(Level 3)		December 31, 2020
Acquisition-related contingent consideration	$	—	$	—	$	266,000	$	266,000
Total liabilities	$	—	$	—	$	266,000	$	266,000

The following is a roll forward of our Level 3 liabilities (in thousands):


	2021		2020
Balance at January 1,	$	266,000	$	277,000
Contingent consideration earned during the period but not yet paid		(19,583)		(9,595)
Payments made during the period		(17,158)		(24,790)
Change in fair value of contingent consideration		14,741		23,385
Balance at December 31,	$	244,000	$	266,000

The fair value of the contingent consideration was determined on the date of acquisition, June 1, 2016, using an income approach based on projected future net revenues of ICLUSIG in the European Union and other countries for the approved third line treatment over 18 years, and discounted to present value at a rate of 10%. The fair value of the contingent consideration is remeasured each reporting period, with changes in fair value recorded in the consolidated statements of operations. The valuation inputs utilized to estimate the fair value of the contingent consideration as of December 31, 2021 and 2020 included a discount rate of 10% and updated projections of future net revenues of ICLUSIG in the European Union and other countries for the approved third line treatment. The change in fair value of the contingent consideration during the year ended December 31, 2021 was due primarily to the impact of updated projections of future net revenues of ICLUSIG in the European Union and the passage of time. The change in fair value of the contingent consideration during the year ended December 31, 2020 was due primarily to the passage of time as there were no other significant changes in the key assumptions.

We make payments to Takeda quarterly based on the royalties or any additional milestone payments earned in the previous quarter. As of December 31, 2021 and 2020, contingent consideration earned but not yet paid was $19.6 million and $9.6 million, respectively, and was included in accrued and other current liabilities.

Non-Recurring Fair Value Measurements

During the years ended December 31, 2021 and 2020, there were no measurements required for any assets or liabilities at fair value on a non-recurring basis.

- 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

License Agreements - Syndax (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions		1 Months Ended	12 Months Ended
	Dec. 09, 2021	Sep. 30, 2021	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Long term investments			$ 221,266	$ 222,301
Research and Development Expense			1,458,179	2,215,942	$ 1,154,111
Unrealized (loss) gain on long term investments			(24,072)	$ 10,426	$ 34,458
Investment in Syndax
Purchase of common stock under Stock Purchase Agreement (in shares )		1.4
Equity Method Investment, Aggregate Cost	$ 35,000	$ 35,000
Per share price	$ 17.48	$ 24.62
Lock-up period		6 months
Long term investments	$ 24,800		$ 31,100
Research and Development Expense	$ 10,200
Ownership percentage (as a percent)			3.00%
Unrealized (loss) gain on long term investments			$ 6,300
Syndax
Upfront payment under license agreement		$ 117,000
Syndax \| Development and Regulatory Milestones \| Maximum
Additional milestone payments under the license agreement		220,000
Syndax \| Commercialization Milestones \| Maximum
Additional milestone payments under the license agreement		$ 230,000
Syndax \| U.S.
Funding of future development costs (as a percent)		55.00%
Syndax \| Syndax \| U.S.
Funding of future development costs (as a percent)		45.00%

Segment Information

12 Months Ended

Dec. 31, 2021

Segment Information

Segment Information

Note 16. Segment Information

We currently operate in one operating business segment focused on the global discovery, development and commercialization of proprietary therapeutics. Our determination that we operate as a single segment is consistent with the financial information regularly reviewed by the chief operating decision maker for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting for future periods. We do not operate in any material separate lines of business or separate business entities with respect to our products or product development.

During the year ended December 31, 2021, total revenues generated by subsidiaries in the United States was approximately $2.9 billion and total revenues generated from subsidiaries in Europe was approximately $124.1 million. During the year ended December 31, 2020, total revenues generated by subsidiaries in the United States was approximately $2.6 billion and total revenues generated from subsidiaries in Europe was approximately $105.0 million. During the year ended December 31, 2019, total revenues generated by subsidiaries in the United States was approximately $2.1 billion and total revenues generated from subsidiaries in Europe was approximately $90.0 million.

As of December 31, 2021, property and equipment, net was approximately $434.2 million in the United States, approximately $286.8 million in Europe and approximately $2.9 million in Japan. As of December 31, 2020, property and equipment, net was approximately $336.9 million in the United States and approximately $218.0 million in Europe and approximately $4.7 million in Japan.

- 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/disclosureRef
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+ Details

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - shares	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and performance shares	1,324,926	2,677,810	2,657,892
Issuance of shares of Common Stock under the ESPP	264,503	258,453	239,590
Issuance of shares of Common Stock for services rendered	5,675	6,350	5,688
Convertible Senior Notes 1.25 Percent Due 2020
Issuance of shares of Common Stock upon conversion of convertible senior notes		368,886

Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2021

Intangible Assets and Goodwill

Intangible Assets and Goodwill

Note 8. Intangible Assets and Goodwill

Intangible Assets, Net

The components of intangible assets were as follows (in thousands, except for useful life):

Balance at December 31, 2021

Balance at December 31, 2020

Weighted-

Gross

Net

Gross

Net

Average Useful

Carrying

Accumulated

Carrying

Accumulated

Carrying

Lives (Years)

Amount

Amortization

Amount

Amortization

Amount

Finite-lived intangible assets:

Licensed IP

12.5

271,000

120,245

150,755

271,000

98,709

172,291

Amortization expense was $21.5 million for the years ended December 31, 2021, 2020 and 2019 and is recorded in cost of product revenues on the consolidated statement of operations. Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets will be as follows for the years ending December 31 (in thousands):


		2022		2023		2024		2025		2026		Thereafter
Amortization expense	$	21,536	$	21,536	$	21,536	$	21,536	$	21,536	$	43,075

Goodwill

There were no changes to the carrying amount of goodwill for the years ended December 31, 2021 and 2020.

Revenues (Details) - USD ($) $ in Thousands	12 Months Ended
Revenues (Details) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Revenues
Total revenues	$ 2,986,267	$ 2,666,702	$ 2,158,759
Product revenues, net
Revenues
Total revenues	2,322,012	2,068,736	1,774,922
JAKAFI
Revenues
Total revenues	2,134,508	1,937,850	1,684,968
ICLUSIG
Revenues
Total revenues	4,668
PEMAZYRE
Revenues
Total revenues	109,395	105,002	89,954
MINJUVI
Revenues
Total revenues	68,531	25,884
OPZELURA
Revenues
Total revenues	4,910
Product royalty revenues
Revenues
Total revenues	569,255	392,966	306,337
JAKAVI Royalty Revenues
Revenues
Total revenues	337,991	277,902	225,913
OLUMIANT Royalty Revenues
Revenues
Total revenues	220,875	110,920	80,424
TABRECTA Royalty Revenues
Revenues
Total revenues	10,389	4,144
Milestone and contract revenues
Revenues
Total revenues	$ 95,000	$ 205,000	$ 77,500

Income Taxes

12 Months Ended

Dec. 31, 2021

Income Taxes

Income Taxes

Note 12. Income Taxes

We are subject to U.S. federal, state and foreign corporate income taxes. The (benefit) provision for income taxes is based on income (loss) before (benefit) provision for income taxes as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
U.S.	$	991,873	$	(16,609)	$	712,486
Non-U.S.		(421,429)		(215,609)		(225,695)
Income (loss) before (benefit) provision for income taxes	$	570,444	$	(232,218)	$	486,791

On a periodic basis, we reassess the valuation allowance on our deferred income tax assets. Valuation allowances require an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are recoverable. Such assessment is required on a jurisdiction-by-jurisdiction basis. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

In the fourth quarter of 2021, we assessed the valuation allowance and considered positive evidence, including significant cumulative consolidated and U.S. income over the three years ended December 31, 2021, consistent growth in product revenues, and expectations regarding future profitability. We also assessed negative evidence, including the potential impact of competition, clinical failures and patent expirations on our projections. After assessing both the positive evidence and negative evidence, we determined it was more likely than not that the majority of our U.S. deferred tax assets would be realized in the future and released the associated valuation allowance as of December 31, 2021. This resulted in a benefit of $569.0 million. As of December 31, 2021, we maintained a valuation allowance of $408.2 million against a portion of our remaining U.S. deferred tax assets as well as select state and foreign deferred tax assets.

Our (benefit) provision for income taxes consists of the following (in thousands):


	Year Ended December 31,
	2021		2020		2019
Current:
Federal	$	50,565	$	43,595	$	23,526
State		32,505		18,881		11,553
Foreign		4,397		1,353		5,183
		87,467		63,829		40,262
Deferred:
Federal		(407,852)		—		—
State		(57,677)		—		(205)
Foreign		(75)		(350)		(172)
		(465,604)		(350)		(377)
Total (benefit) provision for income taxes	$	(378,137)	$	63,479	$	39,885

A reconciliation of income taxes at the U.S. federal statutory rate to the (benefit) provision for income taxes is as follows (in thousands):


	Year Ended December 31,
	2021		2020		2019
Provision (benefit) at U.S. federal statutory rate	$	119,793	$	(48,766)	$	102,226
State and local income taxes		34,461		(21,637)		15,109
Foreign tax rate differential		55,171		30,839		57,351
Income tax credits		(55,139)		(38,221)		(60,072)
Change in valuation allowance		(523,279)		158,815		(70,264)
Foreign-derived intangible income		(28,259)		(22,830)		(9,153)
Stock based compensation		15,497		2,802		(414)
Other		3,618		2,477		5,102
(Benefit) provision for income taxes	$	(378,137)	$	63,479	$	39,885

The foreign tax rate differential in the table above reflects the impact of operations in jurisdictions with tax rates that differ from the U.S. federal statutory rate of 21%.

Significant components of our deferred tax assets and liabilities are as follows (in thousands):


	December 31,
	2021		2020
Deferred tax assets:
Net operating loss carry forwards	$	137,935	$	128,088
Federal and state research credits		206,184		305,099
Capitalized research and development		59,247		43,806
Deferred revenue and accruals		42,326		27,467
Non-cash compensation		83,002		75,867
Acquisition-related contingent consideration		31,450		32,658
Intangibles, net		305,228		289,848
Long term investments		34,733		25,968
Other		15,991		26,422
Total gross deferred tax assets		916,096		955,223
Less valuation allowance for deferred tax assets		(408,180)		(930,209)
Net deferred tax assets	$	507,916	$	25,014

Deferred tax liabilities:
Property and equipment	$	(33,259)	$	(19,880)
Other		(7,119)		(3,080)
Total gross deferred tax liabilities		(40,378)		(22,960)
Net deferred tax assets	$	467,538	$	2,054

The valuation allowance for deferred tax assets decreased by approximately $522.0 million during the year ended December 31, 2021, increased by approximately $159.7 million during the year ended December 31, 2020 and decreased by approximately $66.5 million during the year ended December 31, 2019. The net valuation allowance decrease during 2021 was primarily due to the valuation allowance release on the majority of our U.S. deferred tax assets mentioned above.

As of December 31, 2021, we had net operating loss (“NOL”) carryforwards, research and development credit carryforwards and orphan drug tax credit carryforwards as follows (in thousands):


	Amount		Expiring if not utilized
Net operating loss carryforwards
State	$	296,112	2022 through 2041; indefinite
Foreign		1,422,407	2022 through 2028
Research and development credit carryforwards
Federal		114,595	2037 through 2041
State		21,062	2021 through 2040; indefinite
Orphan drug tax credit carryforwards		121,389	2036 through 2041

The financial statement recognition of the benefit for a tax position is dependent upon the benefit being more likely than not to be sustainable upon audit by the applicable taxing authority. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. If such unrecognized tax benefits were realized, we would recognize a tax benefit of $50.1 million. The following table summarizes the gross amounts of unrecognized tax benefits (in thousands):


	Year Ended December 31,
	2021		2020
Balance at beginning of year	$	31,597	$	24,251
Additions related to prior periods tax positions		28,488		3,953
Reductions related to prior periods tax positions		(311)		(216)
Additions related to current period tax positions		3,042		4,119
Settlements		(95)		(201)
Reductions due to lapse of applicable statute of limitations		(288)		(397)
Currency translation adjustment		(74)		88
Balance at end of year	$	62,359	$	31,597

Our policy is to recognize interest and penalties related to uncertain tax positions, if any, as a component of income tax expense. During the year ending December 31, 2021, we recorded interest and penalties as a component of income tax expense of $0.6 million and during the year ended December 31, 2020, we recorded a negligible reduction to interest and penalties as a component of income tax expense. We do not anticipate any significant changes to our unrecognized tax benefits during the next twelve months.

We file U.S. federal, state and local income tax returns and income tax returns in various foreign jurisdictions, with statutes of limitation generally ranging from three to five years during which such tax returns may be audited by the relevant tax authorities. Those statutes could be extended due to NOL or tax credit carryforwards generated during these periods that are subsequently utilized in open tax periods. In general, tax authorities have the ability to adjust the NOL carryforward or tax credits for three years after utilization of that year’s tax attribute carryforward.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

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+ Details

Concentrations of Credit Risk and Current Expected Credit Losses

12 Months Ended

Dec. 31, 2021

Concentrations of Credit Risk and Current Expected Credit Losses

Concentrations of Credit Risk and Current Expected Credit Losses

Note 4. Concentrations of Credit Risk and Current Expected Credit Losses

In November 2009, we entered into a collaboration and license agreement with Novartis. In December 2009, we entered into a license, development and commercialization agreement with Lilly. In December 2018, we entered into a research collaboration and licensing agreement with Innovent Biologics, Inc. (“Innovent”). In July 2019, we entered into a collaboration and license agreement with Zai Lab (Shanghai) Co., Ltd., a subsidiary of Zai Lab Limited (collectively, “Zai Lab”). The above collaboration partners comprised, in aggregate, 36% and 42% of the accounts receivable balance as of December 31, 2021 and 2020, respectively. For further information relating to these collaboration and license agreements, refer to Note 6.

In November 2011, we began commercialization and distribution of JAKAFI, in April 2020, we began commercialization and distribution of PEMAZYRE and in October 2021, we began commercialization and distribution of OPZELURA to a number of customers. Our product revenues are concentrated in a number of these customers. The concentration of credit risk related to our JAKAFI, PEMAZYRE and OPZELURA product revenues is as follows:


	Percentage of Total Net
	Product Revenues for the
	Years Ended,
	December 31,
	2021		2020		2019
Customer A	18	%	20	%	20	%
Customer B	12	%	13	%	13	%
Customer C	18	%	17	%	16	%
Customer D	9	%	11	%	11	%
Customer E	11	%	10	%	8	%

We are exposed to risks associated with extending credit to customers related to the sale of products. Customers A, B, C, D and E comprised, in the aggregate, 31% and 33% of the accounts receivable balance as of December 31, 2021 and 2020, respectively. The concentration of credit risk relating to our other product revenues or accounts receivable is not significant.

We assessed our collaborative and customer receivable assets as of December 31, 2021 according to our accounting policy for applying reserves for expected credit losses, noting minimal history of uncollectible receivables and the continued perceived creditworthiness of our third party sales relationships, upon which the expected credit losses were considered de minimis.

Fair Value of Financial Instruments - Marketable securities portfolio (Details) - Debt securities (government) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Summary of marketable security portfolio
Amortized Cost	$ 291,871	$ 288,199
Net Unrealized Gains		170
Net Unrealized Losses	(1,119)
Estimated Fair Value	$ 290,752	$ 288,369
Minimum
Summary of marketable security portfolio
Contractual maturity dates	12 months
Maximum
Summary of marketable security portfolio
Contractual maturity dates	18 months

Revenues

12 Months Ended

Dec. 31, 2021

Revenues

Revenues

Note 2. Revenues

As discussed in Note 1, revenues are recognized under guidance within ASC 606. The following table presents our disaggregated revenue for the periods presented (in thousands):


	For the Years Ended,
	December 31,
	2021		2020		2019
JAKAFI revenues, net	$	2,134,508	$	1,937,850	$	1,684,968
ICLUSIG revenues, net		109,395		105,002		89,954
PEMAZYRE revenues, net		68,531		25,884		—
MINJUVI revenues, net		4,910		—		—
OPZELURA revenues, net		4,668		—		—
Total product revenues, net		2,322,012		2,068,736		1,774,922
JAKAVI product royalty revenues		337,991		277,902		225,913
OLUMIANT product royalty revenues		220,875		110,920		80,424
TABRECTA product royalty revenues		10,389		4,144		—
Total product royalty revenues		569,255		392,966		306,337
Milestone and contract revenues		95,000		205,000		77,500
Total revenues	$	2,986,267	$	2,666,702	$	2,158,759

For further information on our revenue-generating contracts, refer to Note 6.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-URI http://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045

+ Details

License Agreements - Calithera (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions	1 Months Ended	12 Months Ended
	Jan. 31, 2017	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2017	Jan. 01, 2017
License agreements
Long term investments		$ 221,266	$ 222,301
Research and development expense		1,458,179	2,215,942	$ 1,154,111
Unrealized gain (loss) on long term investments		(24,072)	10,426	34,458
Calithera
License agreements
Funding of future development costs (as a percent)	70.00%
Potential milestone payments to be made with profit sharing terminated	$ 720,000
Milestone payment made under license agreement					$ 12,000
Calithera \| U.S.
License agreements
Percentage of profit (losses)	60.00%
Calithera
License agreements
Long term investments		$ 1,100	8,400
Ownership percentage (as a percent)		2.00%
Calithera \| Other Comprehensive Income
License agreements
Unrealized gain (loss) on long term investments		$ (7,300)	$ (1,400)	$ 2,900
Calithera \| Stock purchase agreement
License agreements
Purchase of common stock under Stock Purchase Agreement (in shares )	1.7
Purchase price of common stock						$ 8,000
Per share price						$ 4.65

Organization and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2021

Organization and Summary of Significant Accounting Policies

Organization and Summary of Significant Accounting Policies

Note 1. Organization and Summary of Significant Accounting Policies

Organization and Business. Incyte Corporation (including its subsidiaries, “Incyte,” “we,” “us,” or “our”) is a biopharmaceutical company focused on developing and commercializing proprietary therapeutics. Our portfolio includes compounds in various stages, ranging from preclinical to late stage development, and commercialized products JAKAFI® (ruxolitinib), ICLUSIG® (ponatinib), PEMAZYRE® (pemigatinib), OPZELURA™ (ruxolitinib cream), MINJUVI® (tafasitamab) and MONJUVI® (tafasitamab-cxix), which is co-commercialized. Our operations are treated as one operating segment.

Principles of Consolidation. The consolidated financial statements include the accounts of Incyte Corporation and our wholly owned subsidiaries. All inter-company accounts, transactions, and profits have been eliminated in consolidation.

Foreign Currency Translation. Operations in non-U.S. entities are recorded in the functional currency of each entity. For financial reporting purposes, the functional currency of an entity is determined by a review of the source of an entity's most predominant cash flows. The results of operations for any non-U.S. dollar functional currency entities are translated from functional currencies into U.S. dollars using the average currency rate during each month. Assets and liabilities are translated using currency rates at the end of the period. Adjustments resulting from translating the financial statements of our foreign entities that use their local currency as the functional currency into U.S. dollars are reflected as a component of other comprehensive income (loss). Transaction gains and losses are recorded in other income (expense), net, in the consolidated statements of operations.

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Concentrations of Credit Risk. Cash, cash equivalents, marketable securities, and trade receivables are financial instruments which potentially subject us to concentrations of credit risk. The estimated fair value of financial instruments approximates the carrying value based on available market information. By policy, we invest our excess available funds primarily in U.S. government debt securities which are securities issued or guaranteed by the U.S. government and money market funds that meet certain guidelines, which limits exposure to potential credit losses. Our receivables mainly relate to our product sales and collaborative agreements with pharmaceutical companies. We have not experienced any significant credit losses on cash, cash equivalents, marketable securities, or trade receivables to date and do not require collateral on receivables.

Current Expected Credit Losses. Financial assets measured at amortized cost are assessed for future expected credit losses under guidance within ASC 326, Financial Instruments – Credit Losses, to determine if application of an expected credit losses reserve is necessary. On a quarterly basis, receivables that resulted from revenue transactions within the scope of ASC 606, Revenue from Contracts with Customers, and recognized on an amortized cost basis are reviewed on a customer-level basis to analyze expectations of future collections based upon past history of collections, payment, aging of receivables and viability of the customer to continue payment, as well as estimates of future economic conditions. Receivables generally consist of two types: receivables from collaborative agreements, including milestones, reimbursements for agreed-upon activities and sales royalties; and receivables from customer product sales. Collaborative agreement receivables are closely monitored relationships with select, reputable industry peers. Collection of receivables is assessed within each collaborative partnership on a quarterly basis, including evaluation of each entity’s credit quality, financial health and past history of payment. Customer product sales receivables are independently evaluated on a monthly basis, on which unusual items or aged receivables are closely monitored for signs of credit deterioration, or indications of payment refusal. Customer product sales are with specialty pharmaceutical distributors, wholesalers, and certain public and private institutions, some of which whose financial obligations are funded by various government agencies.

Cash and Cash Equivalents. Cash and cash equivalents are held in banks or in custodial accounts with banks. Cash equivalents are defined as all liquid investments and money market funds with maturity from date of purchase of 90 days or less that are readily convertible into cash.

Marketable Securities—Available-for-Sale. Our marketable securities consist of investments in U.S. government debt securities that are classified as available-for-sale. Available-for-sale securities are carried at fair value, based on quoted market prices and observable inputs, with unrealized gains and losses, net of tax, reported as a separate component of stockholders’ equity. We classify marketable securities that are available for use in current operations as current assets on the consolidated balance sheets. Realized gains and losses and declines in value judged to be other than temporary for available-for-sale securities are included in other income (expense), net on the consolidated statements of operations. The cost of securities sold is based on the specific identification method.

Accounts Receivable. As of December 31, 2021 and 2020, we had no allowance for doubtful accounts. We provide an allowance for doubtful accounts based on management’s assessment of the collectability of specific customer accounts, which includes consideration of the credit worthiness and financial condition of those customers, aging of such receivables, history of collectability with the customer and the general economic environment. We record an allowance to reduce the receivables to the amount that is expected to be collected.

Inventory. Inventories are determined at the lower of cost and net realizable value with cost determined under the specific identification method and may consist of raw materials, work in process and finished goods. We capitalize inventory after FDA approval as the related costs are expected to be recoverable through the commercialization of the product. Costs incurred prior to FDA approval are recorded as research and development expense in our statements of operations.

Raw materials and work-in-process inventory are not subject to expiration and the shelf life of finished goods inventory is approximately 36 months from the start of manufacturing of the finished goods. We evaluate for potential excess inventory by analyzing current and future product demand relative to the remaining product shelf life. We build demand forecasts by considering factors such as, but not limited to, overall market potential, market share, market acceptance and patient usage. We classify inventory as current on the consolidated balance sheets when we expect inventory to be consumed for commercial use within the next twelve months.

Variable Interest Entities. We perform an initial and ongoing evaluation of the entities with which we have variable interests, such as equity ownership, in order to identify entities (i) that do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support or (ii) in which the equity investors lack an essential characteristic of a controlling financial interest as variable interest entities (“VIE” or “VIEs”). If an entity is identified as a VIE, we perform an assessment to determine whether we have both (i) the power to direct activities that most significantly impact the VIE’s economic performance and (ii) have the obligation to absorb losses from or the right to receive benefits of the VIE that could potentially be significant to the VIE. If both of these criteria are satisfied, we are identified as the primary beneficiary of the VIE. As of December 31, 2021, there were no entities in which we held a variable interest which we determined to be VIEs.

Long Term Investments. Our long term investments consist of equity investments in common stock of publicly-held companies with whom we have entered into collaboration and license agreements. We classify all of our equity investments in common stock of publicly-held companies as long term investments on the consolidated balance sheets. Our equity investments are accounted for at fair value using readily determinable pricing available on a securities exchange on the consolidated balance sheets. All changes in fair value are reported in the consolidated statements of operations as an unrealized gain (loss) on long term investments.

In assessing whether we exercise significant influence over any of the companies in which we hold equity investments, we consider the nature and magnitude of our investment, any voting and protective rights we hold, any participation in the governance of the other company, and other relevant factors such as the presence of a collaboration or other business relationship. Currently, none of our equity investments in publicly-held companies are considered relationships in which we are able to assert control.

Property and Equipment, net. Property and equipment, net is stated at cost, less accumulated depreciation and amortization. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets. Leasehold improvements are amortized over the shorter of the estimated useful life of the assets or lease term.

Lease Accounting. All leases with a lease term greater than 12 months, regardless of lease type classification, are recorded as an obligation on the balance sheet with a corresponding right-of-use asset. Both finance and operating leases are reflected as liabilities on the commencement date of the lease based on the present value of the lease payments to be made over the lease term. Current operating lease liabilities are reflected in accrued and other current liabilities and noncurrent operating lease liabilities are reflected in other liabilities on the consolidated balance sheet. Right-of-use assets are valued at the initial measurement of the lease liability, plus any initial direct costs or rent prepayments, minus lease incentives and any deferred lease payments. Operating lease right-of-use assets are recorded in property and equipment, net on the consolidated balance sheet and lease cost is recognized on a straight-line basis. For finance leases, expense is recognized as separate amortization and interest expense, with higher interest expense in the earlier periods of a lease. Leases with an initial term of 12 months or less are not recorded on the balance sheet and we recognize lease expense for these leases on a straight-line basis over the term of the lease. In determining whether a contract contains a lease, asset and service agreements are assessed at onset and upon modification for criteria of specifically identified assets, control and economic benefit.

Other Intangible Assets, net. Other intangible assets, net consist of licensed intellectual property rights acquired in business combinations, which are reported at acquisition date fair value, less accumulated amortization. Intangible assets with finite lives are amortized over their estimated useful lives using the straight-line method.

Impairment of Long-Lived Assets. Long-lived assets with finite lives are tested for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If indicators of impairment are present, the asset is tested for recoverability by comparing the carrying value of the asset to the related estimated undiscounted future cash flows expected to be derived from the asset. If the expected cash flows are less than the carrying value of the asset, then the asset is considered to be impaired and its carrying value is written down to fair value, based on the related estimated discounted future cash flows.

Goodwill. Goodwill is calculated as the difference between the acquisition date fair value of the consideration transferred and the values assigned to the assets acquired and liabilities assumed. Goodwill is not amortized but is tested for impairment at the reporting unit level at least annually as of October 1 or when a triggering event occurs that could indicate a potential impairment by assessing qualitative factors or performing a quantitative analysis in determining whether it is more-likely-than-not that the fair value of net assets are below their carrying amounts. A reporting unit is the same as, or one level below, an operating segment. Our operations are currently comprised of a single, entity wide reporting unit. We completed our most recent annual impairment assessment as of October 1, 2021 and determined that the carrying value of our goodwill was not impaired.

Income Taxes. We account for income taxes using the asset and liability approach which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and amounts reportable for income tax purposes. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The primary factors used to assess the likelihood of realization are our recent history of cumulative earnings or losses, expected reversals of taxable temporary timing differences, forecasts of future taxable income and available tax planning strategies that could be implemented to realize the deferred tax assets. Upon evaluating and weighting both positive and negative evidence, we concluded that we should release the valuation allowance on the majority of our U.S. deferred tax assets as of December 31, 2021.

We recognize the tax benefit from an uncertain tax position only if it is more-likely-than-not that the position will be sustained upon examination by the taxing authorities, including resolutions of any related appeals or litigation processes, based on the technical merits of the position. The tax benefit that is recorded for these positions is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. We adjust the level of the liability to reflect any subsequent changes in the relevant facts surrounding the uncertain positions. Any interest and penalties on uncertain tax positions are included within the tax provision.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in March 2020 to provide an estimated $2.2 trillion designed to stimulate the U.S. economy during the COVID-19 pandemic. The Act includes tax relief, government loans, grants and investments for entities in affected industries, which has related accounting and financial reporting impacts. Disclosure for certain income tax accounting measures are required in the period of enactment and disclosure for government loans, investments, grants, and revenue recognition are required in future periods as federal agencies establish rules and procedures to implement the CARES Act. During 2020, we delayed the payment of certain employer payroll tax amounts to future periods as allowed under the Act. We do not expect the CARES Act to have a material impact on our overall financial results, our income tax provision or our liquidity. We have further described the impact and risks of the COVID-19 pandemic on our business in Item 1A. Risk Factors.

Net Income (Loss) Per Share. Our basic and diluted net income (loss) per share is calculated by dividing the net income (loss) by the weighted average number of shares of common stock outstanding during all periods presented. Options to purchase stock, restricted stock units and performance stock units are included in diluted earnings per share calculations, unless the effects are anti-dilutive.

Accumulated Other Comprehensive Income (Loss). Accumulated other comprehensive income (loss) consists of unrealized gains or losses on our marketable debt securities that are classified as available-for-sale, foreign currency translation gains or losses and defined benefit pension obligations.

Revenue Recognition. Revenue-generating contracts are assessed under ASC 606, Revenue from contracts with customers, to identify distinct performance obligations, determine the transaction price of the contract and allocate the transaction price to each of the distinct performance obligations. Revenue is recognized when we have satisfied a performance obligation through transferring control of the promised good or service to a customer. Control, in this instance, may mean the ability to prevent other entities from directing the use of, and receiving benefit from, a good or service. We apply the following five-step model in order to determine this amount: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation, which for the Company is generally at a point in time. We also assess collectability based primarily on the customer’s payment history and on the creditworthiness of the customer.

Product Revenues

Our product revenues consist of sales of JAKAFI, OPZELURA and PEMAZYRE in the U.S., sales of MINJUVI, PEMAZYRE and ICLUSIG in Europe, and sales of PEMAZYRE in Japan. Product revenues are recognized once we satisfy the performance obligation at a point in time under the revenue recognition criteria as described above. We sell JAKAFI, OPZELURA and PEMAZYRE to our customers in the U.S., which include specialty pharmacies, specialty distributors and wholesalers. We sell MINJUVI, PEMAZYRE and ICLUSIG to our customers in the European Union and certain other jurisdictions, which include retail pharmacies, hospital pharmacies and distributors. We sell PEMAZYRE in Japan to an exclusive wholesaler.

We recognize revenues for product received by our customers net of allowances for customer credits, including estimated rebates, chargebacks, discounts, returns, distribution service fees, patient assistance programs, and government rebates, such as Medicare Part D coverage gap reimbursements in the U.S. Product shipping and handling costs are included in cost of product revenues.

Customer Credits: Our customers are offered various forms of consideration, including allowances, service fees and prompt payment discounts. We expect our customers will earn prompt payment discounts and, therefore, we deduct the full amount of these discounts from total product sales when revenues are recognized. Service fees are also deducted from total product sales as they are earned.

Rebates and Discounts: Allowances for rebates include mandated discounts under the Medicaid Drug Rebate Program in the U.S. and mandated discounts in Europe in markets where government-sponsored healthcare systems are

the primary payers for healthcare. Rebates are amounts owed after the final dispensing of the product to a benefit plan participant and are based upon contractual agreements or legal requirements with public sector benefit providers. The accrual for rebates is based on statutory discount rates and expected utilization as well as historical data we have accumulated since product launches. Our estimates for expected utilization of rebates are based on data received from our customers. Rebates are generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarters’ unpaid rebates. If actual future rebates vary from estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment.

Chargebacks: Chargebacks are discounts that occur when certain contracted customers, which currently consist primarily of group purchasing organizations, Public Health Service institutions, non-profit clinics, and Federal government entities purchasing via the Federal Supply Schedule, purchase directly from our wholesalers. Contracted customers generally purchase the product at a discounted price. The wholesalers, in turn, charges back to us the difference between the price initially paid by the wholesalers and the discounted price paid by the contracted customers. In addition to actual chargebacks received we maintain an accrual for chargebacks based on the estimated contractual discounts on the inventory levels on hand in our distribution channel. If actual future chargebacks vary from these estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment.

Medicare Part D Coverage Gap: Medicare Part D prescription drug benefit mandates manufacturers to fund 70% of the Medicare Part D insurance coverage gap for prescription drugs sold to eligible patients. Our estimates for the expected Medicare Part D coverage gap are based on historical invoices received and in part from data received from our customers. Funding of the coverage gap is generally invoiced and paid in arrears so that the accrual balance consists of an estimate of the amount expected to be incurred for the current quarter’s activity, plus an accrual balance for known prior quarters. If actual future funding varies from estimates, we may need to adjust prior period accruals, which would affect revenue in the period of adjustment. Additionally, beginning in January 2020, the amount of spending required by eligible patients in the Medicare Part D insurance coverage gap increased 30% due to the expiration of a provision in the Patient Protection and Affordable Care Act, which now results in a change in the True Out of Pocket (TrOOP) calculation methodology. The methodological change has resulted in an increase in required spending by patients and, in turn, an increase in manufacturers’ contributions on behalf of patients in the Medicare Part D insurance coverage gap.

Co-payment Assistance: Patients who have commercial insurance and meet certain eligibility requirements may receive co-payment assistance. We accrue a liability for co-payment assistance based on actual program participation and estimates of program redemption using data provided by third-party administrators.

Product Royalty Revenues

Royalty revenues on commercial sales for ruxolitinib (marketed as JAKAVI® outside the United States) by Novartis Pharmaceutical International Ltd. (“Novartis”) are based on net sales of licensed products in licensed territories as provided by Novartis. Royalty revenues on commercial sales for baricitinib (marketed as OLUMIANT) by Eli Lilly and Company (“Lilly”) are based on net sales of licensed products in licensed territories as provided by Lilly. Royalty revenues on commercial sales for capmatinib (marketed as TABRECTA®) by Novartis are based on net sales of licensed products in the licensed territories as provided by Novartis. We recognize royalty revenues in the period the sales occur.

Milestone and Contract Revenues

For each collaborative research, development and/or commercialization agreement that results in revenue under the guidance of ASC 606 we identify all material performance obligations, which may include the license to intellectual property and know-how, research and development activities and/or other activities. In order to determine the transaction price, in addition to any upfront payment, we estimate the amount of variable consideration, including milestone payments, at the outset of the contract utilizing the most likely amount method. The most likely amount method is used since the milestone payments have a binary outcome (i.e., we receive all or none of the milestone payment). We constrain the estimate of variable consideration such that it is probable that a significant reversal of previously recognized revenue will not occur. When determining if variable consideration should be constrained, management considers whether there are factors outside the Company’s control that could result in a significant reversal of revenue. In making these assessments,

management considers the likelihood and magnitude of a potential reversal of revenue. These estimates are re-assessed each reporting period as required. Once the estimated transaction price is established, amounts are allocated to the performance obligations that have been identified. The transaction price is generally allocated to each separate performance obligation on a relative standalone selling price basis.

Out-licensing arrangements contain the right to use functional intellectual property, which is the underlying performance obligation of these collaborative arrangements. If the license of our intellectual property is determined to be distinct from other performance obligations in the arrangement, the functional intellectual property that is transferred to the collaborative partner at the onset of the arrangement is concluded to have significant standalone functionality and value at the point in time at which the intellectual property is made available to the collaborative partner. For licenses that are not distinct from other obligations identified in the arrangement, we utilize judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time. If the combined performance obligation is satisfied over time, we apply an appropriate method of measuring progress for purposes of recognizing revenue from nonrefundable, upfront license fees. We evaluate the measure of progress each reporting period and, if necessary, adjust the measure of performance and related revenue recognition. For each of the three years ended December 31, 2021, we had no revenues from intellectual property licenses recognized over time.

For milestone revenues related to sales-based achievements, we recognize the milestone revenues in the corresponding period of the product sale, in accordance with the guidance of ASC 606-10-55-65 for contracts that include a license to intellectual property and the license is the predominant item to which the product sale relates.

Subsequent to the transfer of the intellectual property, we may earn milestones through achievement of pre-specified developmental or regulatory events and, as such, milestones are accounted for as variable consideration. We include developmental or regulatory milestones in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the milestone is subsequently resolved. Under the agreements currently in place, we do not consider these events to be within our control, but rather dependent upon the development activities of our collaborative partners and the decisions made by regulatory agencies. Accordingly, these milestones are not included in the transaction price until the counterparty, or third-party in the event of a regulatory submission, confirms the satisfaction or completion of the milestone triggering event. Given the high level of uncertainty of achievement, variable consideration associated with milestones are fully constrained until confirmation of the satisfaction or completion of the milestone by the third-party.

Generally, the milestone events contained in our collaboration agreements coincide with the progression of our drugs from development, to regulatory approval and then to commercialization. The value of these milestones is dictated within the contract and is fixed upon achievement and reflects the amount of consideration which we expect to be entitled to in exchange for the satisfaction of that milestone. The process of successfully discovering a new development candidate, having it approved and successfully commercialized is highly uncertain. As such, the milestone payments we may earn from our partners involve a significant degree of risk to achieve and therefore, subsequent milestone payments due to Incyte are recognized as revenue at the point in time when such milestones are achieved.

Our collaboration agreements may also include an option for the collaborative partner to elect to participate in research and development activities, such as shared participation in additional clinical trials using the compound. The presence of additional options for future participatory activities are assessed to determine if they represent material rights offered by us to the collaborative partner. We also determine whether the reimbursement of research and development expenses should be accounted for as collaborative revenues or an offset to research and development expenses in accordance with the provisions of gross or net revenue presentation and recognize the corresponding revenues or records the corresponding offset to research and development expenses as incurred.

Our collaborative agreements may also include provisions for additional future collaborative efforts, such as options for shared commercialization staffing or licensing of additional molecules, involvement in joint committees, or options for inclusion in negotiations of future supply rights, which at the time of each collaborative agreement’s inception, are assessed to determine if these meet the definition of a performance obligation under ASC 606.

Cost of Product Revenues

Cost of product revenues includes all product related costs. In addition, cost of product revenues include low single-digit royalties under our collaboration and license agreement to Novartis on all future sales of JAKAFI in the United States and the amortization of our licensed intellectual property for ICLUSIG using the straight-line method over the estimated useful life of 12.5 years from the date of acquisition on June 1, 2016 of all of the outstanding shares of ARIAD Pharmaceuticals (Luxembourg) S.à.r.l. (since renamed Incyte Biosciences Luxembourg S.à.r.l.) from ARIAD Pharmaceuticals, Inc. (“ARIAD”). Cost of product revenues also includes employee personnel costs, including stock compensation, for those employees dedicated to the production of our commercial products.

Research and Development Costs. Our policy is to expense research and development costs as incurred, including amounts funded by research and development collaborations. Research and development expenses are comprised of costs we incur in performing research and development activities, including salary and benefits; stock-based compensation expense; outsourced services and other direct expenses, including clinical trial and pharmaceutical development costs; collaboration payments; expenses associated with drug supplies that are not being capitalized; and infrastructure costs, including facilities costs and depreciation expense. If a collaboration is a cost-sharing arrangement in which both we and our collaborator perform development work and share costs, we also recognize, as research and development expense in the period when our collaborator incurs development expenses, our portion of the co-development expenses that we are obligated to reimburse. Costs incurred under the collaboration arrangement that are reimbursable to us are recorded net against the related research and development expenses.

We often contract with contract research organizations (“CROs”) to facilitate, coordinate and perform agreed upon research and development of a new drug. To ensure that research and development costs are expensed as incurred, we record monthly accruals for clinical trials and preclinical testing costs based on the work performed under the contract. These CRO contracts typically call for the payment of fees for services at the initiation of the contract and/or upon the achievement of certain clinical trial milestones. In the event that we prepay CRO fees, we record the prepayment as a prepaid asset and amortize the asset into research and development expense over the period of time the contracted research and development services are performed. Most professional fees, including project and clinical management, data management, monitoring, and medical writing fees are incurred throughout the contract period. These professional fees are expensed based on their percentage of completion at a particular date. Our CRO contracts generally include pass through fees. Pass through fees include, but are not limited to, regulatory expenses, investigator fees, travel costs, and other miscellaneous costs, including shipping and printing fees. We expense the costs of pass through fees under our CRO contracts as they are incurred, based on the best information available to us at the time. The estimates of the pass through fees incurred are based on the amount of work completed for the clinical trial and are monitored through correspondence with the CROs, internal reviews and a review of contractual terms. The factors utilized to derive the estimates include the number of patients enrolled, duration of the clinical trial, estimated patient attrition, screening rate and length of the dosing regimen. CRO fees incurred to set up the clinical trial are expensed during the setup period. Under our clinical trial collaboration agreements we may be reimbursed for certain development costs incurred. Such costs are recorded as a reduction of research and development expense in the period in which the related expense is incurred.

Stock Compensation. Share-based payment transactions with employees, which include stock options, restricted stock units (“RSUs”) and performance shares (“PSUs”), are recognized as compensation expense over the requisite service period based on their estimated fair values as well as expected forfeiture rates. The stock compensation process requires significant judgment and the use of estimates, particularly surrounding Black-Scholes assumptions such as stock price volatility over the option term and expected option lives, as well as expected forfeiture rates and the probability of PSUs vesting. The fair value of stock options, which are subject to graded vesting, are recognized as compensation expense over the requisite service period using the accelerated attribution method. The fair value of RSUs that are subject to cliff vesting are recognized as compensation expense over the requisite service period using the straight-line attribution method, and the fair value of RSUs that are subject to graded vesting are recognized as compensation expense over the requisite service period using the accelerated attribution method. The fair value of PSUs are recognized as compensation expense beginning at the time in which the performance conditions are deemed probable of achievement, which we assess as of the end of each reporting period. Once a performance condition is considered probable, we record compensation expense based on the portion of the service period elapsed to date with respect to that award, with a cumulative catch-up, net of estimated forfeitures, and recognize any remaining compensation expense, if any, over the remaining requisite service period using

the straight-line attribution method for PSUs that are subject to cliff vesting and using the accelerated attribution method for PSUs that are subject to graded vesting. Compensation expense for PSUs with market performance conditions is calculated using a Monte Carlo simulation model as of the date of grant and recorded over the requisite service period.

Advertising Expenses. Advertising expenses, comprised primarily of television, radio, print media and Internet advertising, are expensed as incurred and are included in selling, general, and administrative expenses. For the years ended December 31, 2021, 2020, and 2019, advertising expenses were approximately $66.0 million, $28.9 million, and $15.3 million, respectively.

Long Term Incentive Plans. We have long term incentive plans which provide eligible employees with the opportunity to receive performance and service-based incentive compensation, which may be comprised of cash, stock options, restricted stock units and/or performance shares. The payment of cash and the grant or vesting of equity may be contingent upon the achievement of pre-determined regulatory, sales and internal performance milestones.

Acquisition-Related Contingent Consideration. Acquisition-related contingent consideration consists of our future royalty obligations on future net revenues of ICLUSIG owed to Takeda Pharmaceutical Company Limited, which acquired ARIAD (“Takeda”). Acquisition-related contingent consideration was recorded on the acquisition date of June 1, 2016 at the estimated fair value of the obligation, in accordance with the acquisition method of accounting. The fair value measurement is based on significant inputs that are unobservable in the market and thus represents a Level 3 measurement. The fair value of the acquisition-related contingent consideration is remeasured each reporting period, with changes in fair value recorded in the consolidated statements of operations.

Collaboration loss sharing. For the year ended December 31, 2021 and 2020, collaboration loss sharing represents our 50% share of the United States loss for commercialization of MONJUVI (tafasitamab-cxix) under our agreement with MorphoSys, which is described in Note 6 below.

Recent Accounting Pronouncements

In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” This guidance applies to all entities and aims to reduce the complexity of tax accounting standards while enhancing reporting disclosures. This guidance is effective for fiscal years beginning after December 15, 2020 and interim periods therein. We adopted this guidance for the period beginning January 1, 2021. Upon adoption, ASU No. 2019-12 had an immaterial impact on the consolidated financial statements.

As of December 31, 2021, there were no other recently issued accounting standards that may have a material impact on the Company's financial position, results of operations, or cash flows upon their adoption.

License Agreements - MorphoSys (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019	Jan. 31, 2020
Long term investments		$ 221,266	$ 222,301
Research and development expense		1,458,179	2,215,942	$ 1,154,111
Unrealized (loss) gain on long term investments		(24,072)	10,426	$ 34,458
Collaboration loss sharing		37,019	42,801
ADSs
Ownership percentage (as a percent)					0.25%
Equity Method Investment, Aggregate Cost					$ 150,000
Per share price					$ 41.33
Long term investments		$ 34,200	102,900
MorphoSys AG
Funding of future development costs (as a percent)		0.55%
Upfront payment under license agreement	$ 750,000
Ownership percentage (as a percent)		0.03%
Research and development expense		$ 77,000	88,200
Unrealized (loss) gain on long term investments		$ (68,700)	$ 7,400
Profit (loss) sharing ratio		50.00%	50.00%
Collaboration loss sharing		$ 37,000	$ 42,800
Associated future global development costs from the initiation of a Phase IIb trial, if elected to co-develop (as a percentage)		0.55%
Accrued and other liabilities		$ 21,500	$ 54,200
MorphoSys AG \| Development and Regulatory Milestones \| Maximum
Additional milestone payments under the license agreement					$ 740,000
MorphoSys AG \| Commercialization Milestones \| Maximum
Additional milestone payments under the license agreement					$ 315,000
MorphoSys AG \| MorphoSys AG
Funding of future development costs (as a percent)		0.45%

License Agreements - Merus (Details) $ / shares in Units, $ in Thousands	1 Months Ended				12 Months Ended			61 Months Ended
	Jan. 31, 2022 item	Jan. 31, 2021 USD ($) $ / shares shares	Jan. 31, 2017 USD ($) item	Dec. 31, 2016 USD ($) $ / shares shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2021 USD ($)
License agreements
Long term investments					$ 221,266	$ 222,301		$ 221,266
Research and development expense					1,458,179	2,215,942	$ 1,154,111
Unrealized gain (loss) on long term investments					(24,072)	10,426	34,458
Total revenues					2,986,267	2,666,702	2,158,759
Net income (loss)					948,581	(295,697)	446,906
Current assets					3,118,674	2,359,894		3,118,674
Current liabilities					854,308	631,195		854,308
Merus
License agreements
Number of independent programs \| item			10
Number of additional preclinical discovery programs \| item	10
Number of programs under the resulting products are co-funded for development \| item	2
Associated future global development costs , if elected to co-develop (as a percent)	35.00%
Milestone payment made under license agreement								2,000
Merus \| U.S.
License agreements
Profit sharing (as a percent)			50.00%
Percentage of profit (losses)			50.00%
Merus \| Minimum
License agreements
Royalty payments on future global net sales (as a percent)			6.00%
Merus \| Minimum \| U.S.
License agreements
Royalty payments on future global net sales (as a percent)			6.00%
Merus \| Maximum
License agreements
Royalty payments on future global net sales (as a percent)			10.00%
Percentage of reverse royalty			4.00%
Merus \| Maximum \| U.S.
License agreements
Royalty payments on future global net sales (as a percent)			10.00%
Percentage of additional royalties			4.00%
Merus \| Maximum \| Development and Regulatory Milestones
License agreements
Additional milestone payments under the license agreement			$ 100,000
Merus \| Maximum \| Commercialization Milestones
License agreements
Additional milestone payments under the license agreement			$ 250,000
Merus
License agreements
Fair market value of our long term investments					$ 112,900	56,100		$ 112,900
Ownership percentage (as a percent)					8.00%			8.00%
Unrealized gain (loss) on long term investments					$ 48,100	$ 11,000	$ 300
Merus \| IPO
License agreements
Common shares purchased (in shares) \| shares		350,000
Number of shares in underwritten public offering (in shares) \| shares		4,848,485
Per share price \| $ / shares		$ 24.75
Value of shares acquired		$ 8,700
Merus \| Stock purchase agreement
License agreements
Purchase of common stock under Stock Purchase Agreement (in shares ) \| shares				3,200,000
Purchase price of common stock				$ 80,000
Per share price \| $ / shares				$ 25.00

Income Taxes - Narrative and Unrecognised Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020
Income Taxes
Tax benefit if unrecognized tax benefits were realized	$ 50,100
Reconciliation of the beginning and ending amount of unrecognized tax benefits
Balance at beginning of period	31,597	$ 24,251
Additions related to prior periods tax positions	28,488	3,953
Reductions related to prior periods tax positions	(311)	(216)
Additions related to current period tax positions	3,042	4,119
Settlements	(95)	(201)
Reductions due to lapse of applicable statute of limitations	(288)	(397)
Currency translation adjustment		88
Currency translation adjustment	(74)
Balance at end of period	62,359	$ 31,597
Interest and penalties as a component of income tax expense	$ 600

License Agreements - Zai Lab (Details) - Zai Lab Ltd $ in Millions	1 Months Ended
	Aug. 31, 2019 USD ($)
Upfront and immediate milestone payment to be received under license agreement	$ 17.5
Development and Regulatory Milestones \| Maximum
Upfront payment under license agreement	22.5
Commercialization Milestones \| Maximum
Upfront payment under license agreement	$ 37.5

Stockholders' Equity - Stock compensation plans (Details) - shares	1 Months Ended	6 Months Ended	12 Months Ended
	Jul. 31, 2016	Jun. 30, 2016	Dec. 31, 2021	May 31, 2021	Apr. 30, 2021
Stock Compensation Plans
Shares reserved for future issuance related to stock plans			10,794,273
Stock Incentive Plan 2010
Stock Compensation Plans
Shares reserved for future issuance related to stock plans				53,953,475	44,453,475
Employee Stock Option
Stock Compensation Plans
Expiration period	10 years	7 years
Employee Stock Option \| Stock Incentive Plan 2010 \| Non-employee Director
Stock Compensation Plans
Expiration period			10 years

Intangible Assets and Goodwill (Tables)

12 Months Ended

Dec. 31, 2021

Intangible Assets and Goodwill

Schedule of finite-lived intangible assets, net

The components of intangible assets were as follows (in thousands, except for useful life):

Balance at December 31, 2021

Balance at December 31, 2020

Weighted-

Gross

Net

Gross

Net

Average Useful

Carrying

Accumulated

Carrying

Accumulated

Carrying

Lives (Years)

Amount

Amortization

Amount

Amortization

Amount

Finite-lived intangible assets:

Licensed IP

12.5

271,000

120,245

150,755

271,000

98,709

172,291

Schedule of estimated aggregate amortization expense

Estimated aggregate amortization expense based on the current carrying value of amortizable intangible assets will be as follows for the years ending December 31 (in thousands):


		2022		2023		2024		2025		2026		Thereafter
Amortization expense	$	21,536	$	21,536	$	21,536	$	21,536	$	21,536	$	43,075

Stockholders' Equity - Option activity (Details) - Employee Stock Option - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	6 Months Ended	12 Months Ended
	Jul. 31, 2016	Jun. 30, 2016	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Shares Subject to Outstanding Options, Shares
Outstanding at the beginning of the period (in shares)			12,115,288
Options granted (in shares)			2,540,313
Options exercised (in shares)			(622,944)
Options cancelled (in shares)			(1,269,197)
Outstanding at the end of the period (in shares)			12,763,460	12,115,288
Shares Subject to Outstanding Options, Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)			$ 88.31
Options granted (in dollars per share)			84.92
Options exercised (in dollars per share)			66.44
Options cancelled (in dollars per share)			91.44
Outstanding at the end of the period (in dollars per share)			$ 88.39	$ 88.31
Termination period	10 years	7 years
Vesting period	4 years	3 years
Stock option, other disclosures
Options exercisable and vested (in shares)			8,024,951	6,732,942	6,896,492
Intrinsic value of options exercised			$ 12.7	$ 87.5	$ 113.8
Intrinsic value of options outstanding			13.5
Intrinsic value of vested options			$ 13.4
Tranche One
Shares Subject to Outstanding Options, Weighted Average Exercise Price
Vesting period	1 year	1 year
Vesting Percentage	25.00%	33.00%
Tranche Two
Shares Subject to Outstanding Options, Weighted Average Exercise Price
Vesting period	36 months	24 months

License Agreements - Syros (Details) $ / shares in Units, $ in Thousands, shares in Millions	1 Months Ended	12 Months Ended
	Jan. 31, 2018 USD ($) item $ / shares shares	Dec. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
License agreements
Long term investments		$ 221,266	$ 222,301
Research and development expense		1,458,179	2,215,942	$ 1,154,111
Unrealized gain (loss) on long term investments		(24,072)	10,426	34,458
Syros Pharmaceuticals, Inc.
License agreements
Number of program targets \| item	7
Fair value of shares on the issuance date		$ 3,100	10,200
Ownership percentage (as a percent)		2.00%
Unrealized gain (loss) on long term investments		$ (7,100)	$ 3,700	$ 1,300
Syros Pharmaceuticals, Inc. \| Stock purchase agreement
License agreements
Purchase of common stock under Stock Purchase Agreement (in shares ) \| shares	0.8
Purchase price of common stock	$ 10,000
Per share price \| $ / shares	$ 12.61
Syros Pharmaceuticals, Inc. \| Amended stock purchase agreement
License agreements
Purchase of common stock under Stock Purchase Agreement (in shares ) \| shares	0.1
Purchase price of common stock	$ 1,400
Per share price \| $ / shares	$ 9.55
Syros Pharmaceuticals, Inc. \| Maximum
License agreements
Target selection and option exercise fee payment	$ 54,000
Syros Pharmaceuticals, Inc. \| Development and Regulatory Milestones \| Maximum
License agreements
Additional milestone payments under the license agreement	50,000
Syros Pharmaceuticals, Inc. \| Commercialization Milestones \| Maximum
License agreements
Additional milestone payments under the license agreement	$ 65,000

Stock Compensation - RSU and PSU award activity (Details)	12 Months Ended
	Dec. 31, 2021 $ / shares shares
Shares Subject to Outstanding Options, Shares
Outstanding at the beginning of the period (in shares) \| shares	3,284,583
Outstanding at the end of the period (in shares) \| shares	3,966,888
Shares Subject to Outstanding Options, Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share) \| $ / shares	$ 87.42
Outstanding at the end of the period (in dollars per share) \| $ / shares	$ 84.91
Restricted Stock Units (RSUs) [Member]
Shares Subject to Outstanding Options, Shares
Granted (in shares) \| shares	2,102,386
Released (in shares) \| shares	(857,367)
Cancelled (in shares) \| shares	(409,333)
Shares Subject to Outstanding Options, Weighted Average Exercise Price
Granted (in dollars per share) \| $ / shares	$ 82.39
Released (in dollars per share) \| $ / shares	87.82
Cancelled (in dollars per share) \| $ / shares	$ 89.17
Performance Stock Units (PSUs)
Shares Subject to Outstanding Options, Shares
Granted (in shares) \| shares	214,449
Released (in shares) \| shares	(200,353)
Cancelled (in shares) \| shares	(167,477)
Shares Subject to Outstanding Options, Weighted Average Exercise Price
Granted (in dollars per share) \| $ / shares	$ 74.26
Released (in dollars per share) \| $ / shares	68.08
Cancelled (in dollars per share) \| $ / shares	$ 72.48

Income Taxes - Income before provision (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Income (loss) from operations before income taxes
Income (loss) before (benefit) provision for income taxes	$ 570,444	$ (232,218)	$ 486,791
Deferred tax assets valuation allowance
One-time benefit from associated valuation allowance	569,000
Valuation allowance	408,180	930,209
U.S.
Income (loss) from operations before income taxes
Income (loss) before (benefit) provision for income taxes	991,873	(16,609)	712,486
Non-U.S.
Income (loss) from operations before income taxes
Income (loss) before (benefit) provision for income taxes	$ (421,429)	$ (215,609)	$ (225,695)

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8906-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8933-108599

Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 940
-SubTopic 20
-Section 25
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=123384075&loc=d3e41242-110953

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8736-108599

Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(10))
-URI http://asc.fasb.org/extlink&oid=123367319&loc=SL114868664-224227

Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(8))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
-URI http://asc.fasb.org/extlink&oid=120399901&loc=d3e537907-122884

Reference 9: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=123359005&loc=d3e8924-108599

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(15))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

+ Details

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2021	Dec. 31, 2020
CONSOLIDATED BALANCE SHEETS
Marketable securities-amortized cost	$ 291,871	$ 288,199
Marketable securities-allowance for credit losses	$ 0	$ 0
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized	400,000,000	400,000,000
Common stock, shares issued	221,084,433	219,489,329
Common stock, shares outstanding	221,084,433	219,489,329

Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Intangible Assets, Net
Amortization expense	$ 21,500	$ 21,500	$ 21,500
Amortization Expense
2022	21,536
2023	21,536
2024	21,536
2025	21,536
2026	21,536
Thereafter	43,075
Changes to carrying amount of goodwill
Changes to the carry amount of goodwill	$ 0	0
Licensed IP
Intangible assets
Weighted Average Useful Lives (Years)	12 years 6 months
Finite-lived intangible assets:
Gross Carrying Amount	$ 271,000	271,000
Accumulated Amortization	120,245	98,709
Net Carrying Amount	$ 150,755	$ 172,291

Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2021

Employee Benefit Plans

Schedule of changes in the obligations and plan assets, the funded status and the amounts recorded

Summarized information regarding changes in the obligations and plan assets, the funded status and the amounts recorded were as follows (in thousands):


	Year Ended December 31,
	2021		2020
Benefit obligation, beginning of year	$	97,959	$	62,770
Employer service cost		7,977		6,047
Interest cost		92		193
Plan participants' contributions		2,795		2,237
Actuarial loss		7,618		9,372
Plan change		5,595		—
Transfer of benefits net of payments from fund		12,834		11,057
Expenses paid from assets		(117)		(88)
Translation (gain) loss		(2,787)		6,371
Benefit obligation, end of year		131,966		97,959

Fair value of plan assets, beginning of year		61,265		38,662
Actual return on plan assets		12,396		260
Employer contributions		6,858		5,413
Plan participants' contributions		2,795		2,237
Transfer of benefits net of payments from fund		12,834		11,057
Expenses paid from assets		(117)		(88)
Translation gain		(2,036)		3,724
Fair value of plan assets, end of year		93,995		61,265

Unfunded liability, end of year	$	37,971	$	36,694

Schedule of net periodic benefit cost

The net periodic benefit cost was as follows (in thousands):



	Year Ended December 31,
	2021		2020		2019
Service cost	$	7,977	$	6,047	$	5,195
Interest cost		92		193		345
Expected return on plan assets		(60)		(126)		(241)
Amortization of prior service cost		217		216		214
Amortization of actuarial losses		1,154		667		247
Net periodic benefit cost	$	9,380	$	6,997	$	5,760

Schedule of changes recognized in other comprehensive income (loss)

Other changes in the plans assets and the benefit obligation that is recognized in accumulated other comprehensive loss were as follows, net of tax (in thousands):


	Year Ended December 31,
	2021		2020		2019
Pension liability, beginning of year	$	23,831	$	15,468	$	9,146
Plan amendment		6,017		—		—
Net prior service costs		(217)		(216)		(214)
Net (gain) loss		(5,954)		8,579		6,536
Pension liability, end of year	$	23,677	$	23,831	$	15,468

Schedule of expected benefit payments

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands):


2022	$	4,582
2023		4,688
2024		4,760
2025		5,308
2026		5,107
2027-2031		33,815
Total	$	58,260

Income Taxes - Tax Credit Carryforwards (Details) $ in Thousands	Dec. 31, 2021 USD ($)
Orphan drug tax credit carryforwards
Tax Credit Carryforward
Tax credit carryforward	$ 121,389
Federal \| Research and development
Tax Credit Carryforward
Tax credit carryforward	114,595
State \| Research and development
Tax Credit Carryforward
Tax credit carryforward	$ 21,062

Net Income (Loss) Per Share

12 Months Ended

Dec. 31, 2021

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Note 13. Net Income (Loss) Per Share

Our basic net income (loss) per share is computed by dividing the net income (loss) by the number of weighted average common shares outstanding during the period. Our diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average common shares outstanding during the period assuming potentially dilutive common shares of stock options, RSUs, PSUs and common shares issuable upon conversion of the 1.25% convertible senior notes that matured in November 2020 (the “2020 Notes”) using the if-converted method. Common shares issuable upon conversion of the 2020 Notes were excluded from the diluted net income (loss) per share computation for 2019 as their share effect was anti-dilutive.

Net income (loss) per share was calculated as follows for the periods indicated below:


	Year Ended December 31,
(in thousands, except per share data)	2021		2020		2019
Basic Net Income (Loss) Per Share
Basic net income (loss)	$	948,581	$	(295,697)	$	446,906
Weighted average common shares outstanding		220,428		218,073		214,913

Basic net income (loss) per share	$	4.30	$	(1.36)	$	2.08

Diluted Net Income (Loss) Per Share
Diluted net income (loss)	$	948,581	$	(295,697)	$	446,906
Weighted average common shares outstanding		220,428		218,073		214,913

Dilutive stock options and awards		1,646		—		2,744

Weighted average shares used to compute diluted net income (loss) per share		222,074		218,073		217,657

Diluted net income (loss) per share	$	4.27	$	(1.36)	$	2.05

The potential common shares that were excluded from the diluted net income (loss) per share computation are as follows:


	2021	2020	2019
Outstanding stock options and awards	10,106,837	15,274,871	9,349,889
Common shares issuable upon conversion of the 1.25% Convertible Senior Notes due 2020	—	—	368,939
Total potential common shares excluded from diluted net income (loss) per share computation	10,106,837	15,274,871	9,718,828

Property and Equipment, net (Tables)

12 Months Ended

Dec. 31, 2021

Property and Equipment, net

Schedule of property and equipment, net

Property and equipment, net consists of the following (in thousands):


	December 31,
	2021		2020
Office equipment	$	22,554	$	17,880
Laboratory equipment		105,040		86,021
Computer equipment		79,871		66,640
Land		10,494		10,671
Building and leasehold improvements		434,321		238,042
Operating lease right-of-use assets		27,308		26,816
Construction in progress		220,052		257,929
		899,640		703,999
Less accumulated depreciation and amortization		(175,720)		(144,374)
Property and equipment, net	$	723,920	$	559,625

Summary of lease liability


	December 31,
	2021		2020
Current
Operating lease liabilities	$	10,554	$	12,674
Finance lease liabilities		2,635		2,284
Noncurrent
Operating lease liabilities		15,608		14,188
Finance lease liabilities		31,632		32,573
Total lease liabilities	$	60,429	$	61,719

Summary of maturity of our lease liabilities


	December 31,
	2021		2020
Current
Operating lease liabilities	$	10,554	$	12,674
Finance lease liabilities		2,635		2,284
Noncurrent
Operating lease liabilities		15,608		14,188
Finance lease liabilities		31,632		32,573
Total lease liabilities	$	60,429	$	61,719

Net Income (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2021

Net Income (Loss) Per Share

Schedule of calculation of net income (loss) per share

Net income (loss) per share was calculated as follows for the periods indicated below:


	Year Ended December 31,
(in thousands, except per share data)	2021		2020		2019
Basic Net Income (Loss) Per Share
Basic net income (loss)	$	948,581	$	(295,697)	$	446,906
Weighted average common shares outstanding		220,428		218,073		214,913

Basic net income (loss) per share	$	4.30	$	(1.36)	$	2.08

Diluted Net Income (Loss) Per Share
Diluted net income (loss)	$	948,581	$	(295,697)	$	446,906
Weighted average common shares outstanding		220,428		218,073		214,913

Dilutive stock options and awards		1,646		—		2,744

Weighted average shares used to compute diluted net income (loss) per share		222,074		218,073		217,657

Diluted net income (loss) per share	$	4.27	$	(1.36)	$	2.05

Schedule of antidilutive securities excluded from the computation of earnings per share

The potential common shares that were excluded from the diluted net income (loss) per share computation are as follows:


	2021	2020	2019
Outstanding stock options and awards	10,106,837	15,274,871	9,349,889
Common shares issuable upon conversion of the 1.25% Convertible Senior Notes due 2020	—	—	368,939
Total potential common shares excluded from diluted net income (loss) per share computation	10,106,837	15,274,871	9,718,828

License Agreements - MacroGenics (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
License agreements
Research and development		$ 1,458,179	$ 2,215,942	$ 1,154,111
MacroGenics
License agreements
Research and development		72,300	59,000	$ 51,100
MacroGenics \| Accrued and other liabilities
License agreements
Accrued and other liabilities		$ 700	$ 100
Minimum \| MacroGenics
License agreements
Royalty payments on future global net sales (as a percent)	15.00%
Maximum \| MacroGenics
License agreements
Royalty payments on future global net sales (as a percent)	24.00%
Development and Regulatory Milestones \| Maximum \| MacroGenics
License agreements
Additional milestone payments under the license agreement	$ 350,000
Commercialization Milestones \| Maximum \| MacroGenics
License agreements
Additional milestone payments under the license agreement	$ 330,000

Stockholders' Equity

12 Months Ended

Dec. 31, 2021

Stockholders' Equity

Stockholders' Equity

Note 10. Stockholders’ Equity

Preferred Stock. We are authorized to issue 5,000,000 shares of preferred stock, none of which was outstanding as of December 31, 2021 and 2020. The Board of Directors may determine the rights, preferences and privileges of any preferred stock issued in the future.

Common Stock. We are authorized to issue 400,000,000 shares of common stock.

Stock Compensation Plans. As of December 31, 2021, we had a total of 10,794,273 shares of our common stock available for future issuance related to our stock plans as described below.

2010 Stock Incentive Plan. In May 2010 the Board of Directors adopted the 2010 Stock Incentive Plan (the “2010 Stock Plan”), which was most recently amended and restated in May 2021, for issuance of common stock to employees, non-employee directors, consultants, and scientific advisors. Options are granted to employees, consultants, and scientific advisors under the 2010 Stock Plan, pursuant to a formula determined by our Board of Directors. All options are exercisable at the fair market value of the stock on the date of grant. Non-employee director options expire after ten years.

In May 2021, our stockholders approved an increase in the number of shares of common stock reserved for issuance under the 2010 Stock Plan from 44,453,475 to 53,953,475.

Option activity under the 2010 Stock Plan was as follows:


	Shares Subject to
	Outstanding Options
		Weighted Average
	Shares	Exercise Price
Balance at December 31, 2020	12,115,288	$	88.31
Options granted	2,540,313	$	84.92
Options exercised	(622,944)	$	66.44
Options cancelled	(1,269,197)	$	91.44
Balance at December 31, 2021	12,763,460	$	88.39

In July 2016, we revised the terms of our annual stock option grants to provide that new option grants would generally have a 10-year term and vest over four years, with 25% vesting after one year and the remainder vesting in 36 equal monthly installments. Previously, our option grants generally had 7-year terms and vested over three years, with 33% vesting after one year and the remainder vesting in 24 equal monthly installments.

Options to purchase a total of 8,024,951, 6,732,942 and 6,896,492 shares as of December 31, 2021, 2020 and 2019, respectively, were exercisable. The aggregate intrinsic value of options exercised for the years ended December 31,

2021, 2020 and 2019 were $12.7 million, $87.5 million and $113.8 million, respectively. At December 31, 2021, the aggregate intrinsic value of options outstanding and vested options are $13.5 million and $13.4 million, respectively.

The following table summarizes information about stock options outstanding as of December 31, 2021 under the 2010 Stock Plan:


	Options Outstanding				Options Exercisable
		Weighted Average	Weighted			Weighted
		Remaining	Average			Average
	Number	Contractual Life	Exercise		Number	Exercise
Range of Exercise Prices	Outstanding	(in years)	Price		Exercisable	Price
$22.05 - $68.62	1,304,595	6.05	$	64.71	1,048,050	$	64.04
$68.82 - $69.35	89,030	8.35		69.15	31,252		68.95
$72.27 - $72.27	1,470,150	6.88		72.27	770,726		72.27
$72.58 - $80.50	1,614,398	5.77		77.49	1,131,015		76.77
$80.56 - $83.58	1,338,974	9.26		83.34	72,885		81.68
$83.83 - $85.01	1,371,805	6.14		84.52	1,008,722		84.42
$85.34 - $94.63	1,655,056	7.63		91.18	927,332		92.12
$95.34 - $101.79	1,293,897	3.88		96.28	876,609		96.33
$102.65 - $113.64	1,853,430	6.11		109.99	1,386,235		111.21
$115.19 - $138.52	772,125	4.93		128.71	772,125		128.71
	12,763,460				8,024,951

Restricted Stock Units and Performance Shares

In 2014, we began granting restricted stock units (“RSUs”) and performance shares (“PSUs”) to our employees at the share price on the date of grant. Each RSU represents the right to acquire one share of our common stock. Each RSU granted in connection with our annual equity awards will vest 25% annually over four years, while each RSU granted as outstanding merit awards or as part of retention award programs will vest in a single installment at the end of four years.

We grant PSUs with performance and/or service-based milestones with graded and/or cliff vesting over three to four years. The shares of our common stock into which each PSU may convert is subject to a multiplier based on the level at which the financial, developmental and market performance conditions are achieved over the service period. Compensation expense for PSUs with financial and developmental performance conditions is recorded over the estimated service period for each milestone when the performance conditions are deemed probable of achievement. For PSUs containing performance conditions which were not deemed probable of achievement, no stock compensation expense is recorded. Compensation expense for PSUs with market performance conditions is calculated using a Monte Carlo simulation model as of the date of grant and recorded over the requisite service period. For the years ended December 31, 2021, 2020 and 2019, we recorded $8.3 million, $13.9 million and $9.9 million, respectively, of stock compensation expense for PSUs on our consolidated statements of operations.

RSU and PSU award activity under the 2010 Stock Plan was as follows:


	Shares Subject to
	Outstanding Awards
	Shares	Grant Date Value
Balance at December 31, 2020	3,284,583	$	87.42
RSUs granted	2,102,386	$	82.39
PSUs granted	214,449	$	74.26
RSUs released	(857,367)	$	87.82
PSUs released	(200,353)	$	68.08
RSUs cancelled	(409,333)	$	89.17
PSUs cancelled	(167,477)	$	72.48
Balance at December 31, 2021	3,966,888	$	84.91

The following table summarizes our shares available for grant under the 2010 Plan. Each RSU and PSU grant reduces the available share pool by 2 shares.


		Shares Available
		for Grant
Balance at December 31, 2020		5,515,182
Additional authorization		9,500,000
Options, RSUs and PSUs granted		(7,174,371)
Options, RSUs and PSUs cancelled		2,272,487
Balance at December 31, 2021		10,113,298

Employee Stock Purchase Plan. On May 21, 1997, our stockholders adopted the 1997 Employee Stock Purchase Plan, which was most recently amended in April 2020 (the “ESPP”). Each regular full-time and part-time employee working 20 hours or more per week is eligible to participate after one month of employment. We issued 264,503, 258,453 and 239,590 shares under the ESPP in 2021, 2020 and 2019, respectively. For the years ended December 31, 2021, 2020 and 2019, we recorded stock compensation expense of $4.6 million, $4.6 million and $3.4 million, respectively, as the ESPP is considered compensatory under the FASB stock compensation rules. As of December 31, 2021, 680,975 shares remain available for issuance under the ESPP.

- 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

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+ Details

Stock Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
Stock compensation
Stock compensation expense	$ 183.0	$ 177.9	$ 166.6
Stock Compensation Expense Capitalized	$ 2.1	0.6	0.4
Weighted-average fair value assumptions
Valuation method	Black-Scholes valuation model
Dividend yield (as a percent)	0.00%
Research and Development Expense [Member]
Stock compensation
Stock compensation expense	$ 114.3	120.4	114.0
Selling, General and Administrative Expenses [Member]
Stock compensation
Stock compensation expense	67.0	56.6	51.9
Cost of product revenues
Stock compensation
Stock compensation expense	1.7	1.0	0.7
Employee Stock [Member]
Stock compensation
Stock compensation expense	$ 4.6	$ 4.6	$ 3.4
Weighted-average fair value assumptions
Average risk-free interest rates (as a percent)	0.40%	0.17%	1.82%
Average expected life (in years)	6 months	6 months	6 months
Volatility (as a percent)	33.00%	45.00%	31.00%
Weighted-average fair value (in dollars per share)	$ 18.02	$ 19.13	$ 14.04
Employee Stock Option
Stock compensation
Assumed annualized forfeiture rate (as a percent)	5.00%
Weighted-average fair value assumptions
Average risk-free interest rates (as a percent)	0.62%	0.80%	2.27%
Average expected life (in years)	5 years 3 days	4 years 11 months 23 days	5 years 3 months 7 days
Volatility (as a percent)	39.00%	40.00%	45.00%
Weighted-average fair value (in dollars per share)	$ 29.03	$ 32.65	$ 32.38
Unrecognized compensation
Unrecognized compensation cost for nonvested option (in dollars)	$ 62.2
Vesting period of recognition of the unrecognized compensation cost of nonvested awards	1 year 1 month 6 days
Restricted Stock Units (RSUs) [Member]
Stock compensation
Assumed annualized forfeiture rate (as a percent)	5.00%
Unrecognized compensation
Unrecognized compensation cost for nonvested option (in dollars)	$ 162.9
Vesting period of recognition of the unrecognized compensation cost of nonvested awards	1 year 10 months 24 days
Performance Stock Units (PSUs)
Stock compensation
Stock compensation expense	$ 8.3	$ 13.9	$ 9.9
Assumed annualized forfeiture rate (as a percent)	5.00%
Unrecognized compensation
Unrecognized compensation cost for nonvested option (in dollars)	$ 24.3
Vesting period of recognition of the unrecognized compensation cost of nonvested awards	1 year 10 months 24 days

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2021	Dec. 31, 2020	Dec. 31, 2019
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income (loss)	$ 948,581	$ (295,697)	$ 446,906
Other comprehensive Income (loss):
Foreign currency translation (loss) gain	(2,959)	8,450	(192)
Unrealized (loss) gain on marketable securities, net of tax	(1,289)	95	1,137
Defined benefit pension obligations, net of tax	154	(8,363)	(6,322)
Other comprehensive income (loss)	(4,094)	182	(5,377)
Comprehensive income (loss)	$ 944,487	$ (295,515)	$ 441,529

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details