0001558370-21-000825 | 10-K | XBRL Viewer

Print Document View Excel Document

Document and Entity Information - USD ($) $ in Billions	12 Months Ended
Document and Entity Information - USD ($) $ in Billions	Dec. 31, 2020	Feb. 02, 2021	Jun. 30, 2020
Document and Entity Information
Document Type	10-K
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2020
Entity File Number	001-12400
Entity Registrant Name	INCYTE CORPORATION
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	94-3136539
Entity Address, Address Line One	1801 Augustine Cut-Off
Entity Address, City or Town	Wilmington
Entity Address, State or Province	DE
Entity Address, Postal Zip Code	19803
City Area Code	302
Local Phone Number	498-6700
Title of 12(b) Security	Common Stock, $.001 par value per share
Trading Symbol	INCY
Security Exchange Name	NASDAQ
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
ICFR Auditor Attestation Flag	true
Entity Shell Company	false
Entity Public Float			$ 19.1
Entity Common Stock, Shares Outstanding		219,843,497
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	FY
Entity Central Index Key	0000879169
Amendment Flag	false

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 1,513,008	$ 1,832,684
Marketable securities-available-for-sale (amortized cost $288,199; allowance for credit losses $0)	288,369	284,870
Accounts receivable	481,994	308,809
Inventory	16,425	11,400
Prepaid expenses and other current assets	60,098	43,725
Total current assets	2,359,894	2,481,488
Restricted cash and investments	1,757	1,023
Long term investments	222,301	133,657
Inventory	19,548	5,105
Property and equipment, net	559,625	377,567
Finance lease right-of-use assets, net	28,451	29,058
Other intangible assets, net	172,291	193,828
Goodwill	155,593	155,593
Other assets, net	41,458	49,431
Total assets	3,560,918	3,426,750
Current liabilities:
Accounts payable	98,767	83,647
Accrued compensation	113,340	90,706
Accrued and other current liabilities	378,404	285,979
Finance lease liabilities	2,284	664
Convertible senior notes		18,300
Acquisition-related contingent consideration	38,400	34,044
Total current liabilities	631,195	513,340
Acquisition-related contingent consideration	227,600	242,956
Finance lease liabilities	32,573	31,918
Other liabilities	58,282	40,130
Total liabilities	949,650	828,344
Commitments and contingencies (Note 16)
Stockholders' equity:
Preferred stock, $0.001 par value; 5,000,000 shares authorized; none issued or outstanding as of December 31, 2020 and December 31, 2019
Common stock, $0.001 par value; 400,000,000 shares authorized; 219,489,329 and 216,177,830 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively	219	216
Additional paid-in capital	4,352,864	4,044,490
Accumulated other comprehensive loss	(15,360)	(15,542)
Accumulated deficit	(1,726,455)	(1,430,758)
Total stockholders' equity	2,611,268	2,598,406
Total liabilities and stockholders' equity	$ 3,560,918	$ 3,426,750

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
CONSOLIDATED BALANCE SHEETS
Marketable securities-amortized cost	$ 288,199
Marketable securities-allowance for credit losses	$ 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	219,489,329	216,177,830
Common stock, shares outstanding	219,489,329	216,177,830

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues:
Total revenues	$ 2,666,702	$ 2,158,759	$ 1,881,883
Costs and expenses:
Cost of product revenues (including definite-lived intangible amortization)	131,328	114,249	94,123
Research and development	2,215,942	1,154,111	1,197,957
Selling, general and administrative	516,922	468,711	434,407
Change in fair value of acquisition-related contingent consideration	23,385	19,682	26,173
Collaboration loss sharing	42,801
Total costs and expenses	2,930,378	1,756,753	1,752,660
Income (loss) from operations	(263,676)	402,006	129,223
Other income (expense), net	23,206	52,182	31,760
Interest expense	(2,174)	(1,855)	(1,543)
Unrealized gain (loss) on long term investments	10,426	34,458	(44,093)
Income (loss) before provision for income taxes	(232,218)	486,791	115,347
Provision for income taxes	63,479	39,885	5,854
Net (loss) income	$ (295,697)	$ 446,906	$ 109,493
Net income (loss) per share:
Basic	$ (1.36)	$ 2.08	$ 0.52
Diluted	$ (1.36)	$ 2.05	$ 0.51
Shares used in computing net income (loss) per share:
Basic	218,073	214,913	212,383
Diluted	218,073	217,657	215,635
Product revenues, net
Revenues:
Total revenues	$ 2,068,736	$ 1,774,922	$ 1,466,900
Product royalty revenues
Revenues:
Total revenues	392,966	306,337	234,780
Milestone and contract revenues
Revenues:
Total revenues	$ 205,000	$ 77,500	180,000
Other revenues
Revenues:
Total revenues			$ 203

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income (loss)	$ (295,697)	$ 446,906	$ 109,493
Other comprehensive Income (loss):
Foreign currency translation	8,450	(192)	91
Unrealized gain on marketable securities, net of tax	95	1,137	203
Defined benefit pension obligations, net of tax	(8,363)	(6,322)	(696)
Other comprehensive income (loss)	182	(5,377)	(402)
Comprehensive income (loss)	$ (295,515)	$ 441,529	$ 109,091

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1A
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121641772&loc=SL7669619-108580

Reference 2: 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=120311839&loc=d3e8924-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 4: 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 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: 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=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 205
-SubTopic 20
-Section 50
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=109222650&loc=SL51721683-107760

Reference 8: 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=109234566&loc=d3e22595-107794

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 1B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121641772&loc=SL7669625-108580

Reference 10: 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=120311839&loc=d3e8736-108599

Reference 11: 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 12: 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(20))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

Reference 13: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=121586364&loc=d3e3602-108585

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (b)(2)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22499-107794

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22663-107794

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 28
-Subparagraph (f)
-URI http://asc.fasb.org/extlink&oid=75031198&loc=d3e14064-108612

Reference 17: 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=120311839&loc=d3e8906-108599

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22583-107794

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121326447&loc=SL5780133-109256

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 323
-SubTopic 10
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=114001798&loc=d3e33918-111571

Reference 22: 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=120311839&loc=d3e8933-108599

Reference 23: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22658-107794

+ Details

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Additional Paid-in Capital	Accumulated Other Comprehensive Loss Adoption of ASU	Accumulated Other Comprehensive Loss	Accumulated Deficit Adoption of ASU	Accumulated Deficit	Adoption of ASU	Total
Balances (ASU 2016-01) at Dec. 31, 2017			$ (2,753)		$ 2,753
Balances at Dec. 31, 2017	$ 211	$ 3,627,433		$ (7,010)		$ (1,990,005)		$ 1,630,629
Increase (Decrease) in Stockholders' Equity
Issuance of shares of Common Stock upon exercise of stock options and settlement of employee restricted stock units and shares of Common Stock under the ESPP	2	29,940						29,942
Issuance of shares of Common Stock for services rendered		344						344
Issuance of shares of Common Stock upon conversion of Convertible Senior Notes		7,695						7,695
Stock compensation		148,266						148,266
Other comprehensive income (loss)				(402)				(402)
Net income (loss)						109,493		109,493
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 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 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

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - shares	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Issuance of shares of Common Stock upon exercise of stock options and restricted stock units and performance shares	2,677,810	2,657,892	1,624,376
Issuance of shares of Common Stock under the ESPP	258,453	239,590	233,712
Issuance of shares of Common Stock for services rendered	6,350	5,688	4,905
Convertible Senior Notes 0.375 Percent Due 2018
Issuance of shares of Common Stock upon conversion of convertible senior notes			148,761
Convertible Senior Notes 1.25 Percent Due 2020
Issuance of shares of Common Stock upon conversion of convertible senior notes	368,886

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Cash flows from operating activities:
Net income (loss)	$ (295,697)	$ 446,906	$ 109,493
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	51,807	54,533	54,969
Stock-based compensation	177,877	166,589	148,153
Deferred income taxes	(350)	(377)	(459)
Other, net	546	486	344
Unrealized gain (loss) on long term investments	(10,426)	(34,458)	44,093
Change in fair value of acquisition-related contingent consideration	23,385	19,682	26,173
Changes in operating assets and liabilities:
Accounts receivable	(173,185)	(1,211)	(41,299)
Prepaid expenses and other assets	(8,050)	5,744	(33,412)
Inventory	(19,468)	(6,100)	4,043
Accounts payable	15,120	(20,180)	36,156
Accrued and other liabilities	113,842	79,042	(12,027)
Net cash (used in) provided by operating activities	(124,599)	710,656	336,227
Cash flows from investing activities:
Purchase of long term investments	(95,468)		(8,936)
Sale of long term investment	17,250
Capital expenditures	(187,379)	(78,064)	(73,483)
Purchases of marketable securities	(516,874)	(374,809)	(159,932)
Sale and maturities of marketable securities	513,470	365,419	155,928
Net cash used in investing activities	(269,001)	(87,454)	(86,423)
Cash flows from financing activities:
Proceeds from issuance of common stock under stock plans	110,305	63,299	29,942
Payment of finance lease liabilities	(836)	(822)
Payment of contingent consideration	(37,760)	(16,766)	(15,285)
Net cash provided by financing activities	71,709	45,711	14,657
Effect of exchange rates on cash, cash equivalents, restricted cash and investments	2,949	(192)	91
Net (decrease) increase in cash, cash equivalents, restricted cash and investments	(318,942)	668,721	264,552
Cash, cash equivalents, restricted cash and investments at beginning of period	1,833,707	1,164,986	900,434
Cash, cash equivalents, restricted cash and investments at end of period	1,514,765	1,833,707	1,164,986
Supplemental Schedule of Cash Flow Information
Interest paid	194	239	268
Income taxes paid	70,712	33,553	5,417
Unpaid purchases of property and equipment	22,807	12,732	7,673
Leased assets obtained in exchange for new operating lease liabilities	19,908	7,607
Leased assets obtained in exchange for new finance lease liabilities	2,160	$ 29,889
Convertible Senior Notes 0.375 Percent Due 2018
Supplemental Schedule of Cash Flow Information
Reclassification to common stock and additional paid in capital in connection with conversion/exchange of debt instruments			$ 7,695
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

CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)	Dec. 31, 2018
Convertible Senior Notes 0.375 Percent Due 2018
Interest rate of debt (as a percent)	0.375%

Organization and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2020

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) 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. Effective January 1, 2020, 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 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, 2020 and 2019, 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 and 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 reasonably believed to be collectible.

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 began capitalizing PEMAZYRE inventory after FDA approval in April 2020 as the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to FDA approval have been recorded as research and development expense in our statements of operations. As a result, cost of product revenues for the next 48 months will reflect a lower average per unit cost of materials.

JAKAFI, ICLUSIG and PEMAZYRE raw materials and work-in-process inventory are not subject to expiration and the shelf life of finished goods inventory is 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, 2020, 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 our consolidated balance sheets. Our equity investments are accounted for at fair value using readily determinable pricing available on a securities exchange on our 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. Accounting Standard Codification (“ASC”) 842, Leases, was adopted for the fiscal year beginning on January 1, 2019 using the modified retrospective method. 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, 2020 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 continue to maintain the valuation allowance on the majority of our deferred tax assets as of December 31, 2020.

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 the year ended December 31, 2020, we have delayed the payment of certain employer payroll tax amounts to future periods as allowed under the Act. However, 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 expected impact and risks of COVID-19 on our business in Item 1. Business and 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, performance stock units and shares issuable upon the conversion of convertible debt 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 marketable 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 U.S. sales of JAKAFI and PEMAZYRE and European sales of ICLUSIG. 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 and PEMAZYRE to our customers in the U.S., which include specialty pharmacies and wholesalers. We sell ICLUSIG to our customers in the European Union and certain other jurisdictions, which include retail pharmacies, hospital pharmacies and distributors.

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, Revenue from Contracts with Customers, 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, 2020, we had no revenues from intellectual 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 JAKAFI, ICLUSIG and PEMAZYRE related product 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.

We often contract with clinical 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.

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, 2020, 2019, and 2018, advertising expenses were approximately $28.9 million, $15.3 million, and $10.6 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 sales of ICLUSIG 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. Under collaboration and license agreements with shared commercialization efforts, we record our share of the losses from the co-commercialization efforts in collaboration loss sharing on the consolidated statement of operations. For the year ended December 31, 2020, collaboration loss sharing represents our 50% share of the United States loss for commercialization of MONJUVI (tafasitamab) under our agreement with MorphoSys, which is described in Note 6 below.

Recent Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance applies to all entities and impacts how entities account for credit losses for financial assets measured at amortized cost and available for sale debt securities. ASU 2016-13 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. For trade receivables, loans and held-to-maturity debt securities, entities are required to estimate expected credit losses over the lifetime of the asset. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than an other-than-temporary impairment that reduces the cost basis of the investment. Further, an entity recognizes any improvements in estimated credit losses on its available-for-sale debt securities immediately in earnings.

Upon adoption, we assessed each financial asset measured at amortized cost and each available-for-sale debt security held for the impact of the guidance as of January 1, 2020 and noted an insignificant impact due to the minimal credit risk associated with our financial assets subject to ASC 326. As such, it was concluded that a reserve for credit losses was de minimis on the adoption date. Financial assets will continue to be assessed on a quarterly basis in future periods.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” which eliminates the required disclosure of the amount of and reason for transfers between Level 1 and Level 2 of the fair value hierarchy. The guidance also eliminates the required disclosure of the entity’s valuation process for Level 3 fair value measurements, however public entities are required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. This guidance is effective for fiscal years beginning after December 15, 2019. We adopted this guidance for the period beginning January 1, 2020 and enhanced our disclosures in Note 3 to the consolidated

financial statements to comply with the standard.

In August 2018, the FASB issued ASU No. 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General,” an update to Subtopic ASC 715-20. The guidance amended year-end disclosure requirements related to defined benefit pension plans, and does not affect interim disclosures. The guidance is effective for fiscal years ending after December 15, 2020 and is permitted for early adoption. The standard is to be applied on a retrospective basis. Incyte sponsors defined benefit plans for employees located in Europe and have adopted this guidance for the period ending December 31, 2020 as reflected in our disclosures in Note 15.

In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software,” an update to Subtopic ASC 350-40. The guidance directs accounting for service contracts for cloud computing arrangements to follow guidance within ASC 350-40 to determine capitalization of implementation costs. The guidance is effective for fiscal years beginning after December 15, 2019 and may be applied on either a retrospective or prospective basis. We adopted this guidance for the period beginning January 1, 2020 on a prospective basis. New contracts for development of internal-use software were assessed and no qualifying contracts were identified during the period. We will continue to assess contracts and will disclose material, qualifying contracts if identified in future periods.

In November 2018, the FASB issued ASU No. 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606.” The guidance clarifies the interactions between Topic 808 and Topic 606, including clarifications on revenue recognition, unit of account, and reporting disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2019. We adopted this guidance for the period beginning January 1, 2020 retrospectively to the date of our initial application of ASC 606, and noted that in assessment of our collaborative agreements, there was no material financial statement impact. Our collaborative arrangements and their associated accounting conclusions are described in detail within Note 6 to the consolidated financial statements.

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. Early adoption is permitted for any annual periods for which financial statements have not been issued and interim periods therein. We are currently analyzing the impact of ASU No. 2019-12 on the consolidated financial statements.

Revenues

12 Months Ended

Dec. 31, 2020

Revenues

Revenues

Note 2. Revenues

As discussed in Note 1, revenues are recognized under guidance within ASC 606 and ASC 808. The following table presents our disaggregated revenue for the periods presented (in thousands):


	For the Years Ended,
	December 31,
	2020		2019		2018
JAKAFI revenues, net	$	1,937,850	$	1,684,968	$	1,386,964
ICLUSIG revenues, net		105,002		89,954		79,936
PEMAZYRE revenues, net		25,884		—		—
Total product revenues, net		2,068,736		1,774,922		1,466,900
JAKAVI product royalty revenues		277,902		225,913		194,694
OLUMIANT product royalty revenues		110,920		80,424		40,086
TABRECTA product royalty revenues		4,144		—		—
Total product royalty revenues		392,966		306,337		234,780
Milestone and contract revenues		205,000		77,500		180,000
Other revenues		—		—		203
Total revenues	$	2,666,702	$	2,158,759	$	1,881,883

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=121604090&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=121604090&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=121604090&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=121604090&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=121604090&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=121604090&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=121604090&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=121604090&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=121604090&loc=SL49130554-203045

+ Details

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2020

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
	Amortized		Unrealized		Estimated
	Cost		Gains		Fair Value
December 31, 2020
Debt securities (government)	$	288,199	$	170	$	288,369

December 31, 2019
Debt securities (government)	$	284,795	$	75	$	284,870

Our 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, 2020 and 2019, the available-for-sale debt securities were held in U.S. government debt securities and Treasury assets 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, 2020 and 2019, 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, 2020 and 2019.

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, 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


	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, 2019
Cash and cash equivalents	$	1,832,684	$	—	$	—	$	1,832,684
Debt securities (government)		—		284,870		—		284,870
Long term investments (Note 6)		133,657		—		—		133,657
Total assets	$	1,966,341	$	284,870	$	—	$	2,251,211

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, 2020
Acquisition-related contingent consideration	$	—	$	—	$	266,000	$	266,000
Total liabilities	$	—	$	—	$	266,000	$	266,000


	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, 2019
Acquisition-related contingent consideration	$	—	$	—	$	277,000	$	277,000
Total liabilities	$	—	$	—	$	277,000	$	277,000

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


	2020		2019
Balance at January 1,	$	277,000	$	287,001
Contingent consideration earned during the period but not yet paid		(9,595)		(23,012)
Payments made during the period		(24,790)		(6,671)
Change in fair value of contingent consideration		23,385		19,682
Balance at December 31,	$	266,000	$	277,000

The fair value of the contingent consideration was determined on the date of acquisition, June 1, 2016, using an income approach based on estimated ICLUSIG revenues 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, 2020 included a weighted average cost of capital of 10% and updated projections of future ICLUSIG revenues in the European Union and other countries for the approved third line treatment. The change in fair value of the contingent consideration during the years ended December 31, 2020 and 2019 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, 2020 and 2019, contingent consideration earned but not yet paid was $9.6 million and $23.0 million, respectively, and was included in accrued and other current liabilities.

Non-Recurring Fair Value Measurements

During the years ended December 31, 2020 and 2019, 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

Concentrations of Credit Risk and Current Expected Credit Losses

12 Months Ended

Dec. 31, 2020

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, 42% and 30% of the accounts receivable balance as of December 31, 2020 and 2019, 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 and in April 2020, we began commercialization and distribution of PEMAZYRE 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 and PEMAZYRE product revenues is as follows:


	Percentage of Total Net
	Product Revenues for the
	Years Ended,
	December 31,
	2020		2019		2018
Customer A	20	%	20	%	20	%
Customer B	13	%	13	%	14	%
Customer C	17	%	16	%	15	%
Customer D	11	%	11	%	11	%

We are exposed to risks associated with extending credit to customers related to the sale of products. Customers A, B, C and D comprised, in the aggregate, 29% and 39% of the accounts receivable balance as of December 31, 2020 and 2019, respectively. The concentration of credit risk relating to ICLUSIG product revenues or accounts receivable is not significant.

We assessed our collaborative and customer receivable assets as of December 31, 2020 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.

Inventory

12 Months Ended

Dec. 31, 2020

Inventory

Inventory

Note 5. Inventory

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


	December 31,
	2020		2019
Raw materials	$	1,275	$	1,275
Work-in-process		21,242		8,634
Finished goods		13,456		6,596
		35,973		16,505
Inventories-current		16,425		11,400
Inventories-noncurrent	$	19,548	$	5,105

Inventories, stated at the lower of cost and net realizable value, consist of raw materials, work-in-process and finished goods. At December 31, 2020, $16.4 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, 2020, $19.5 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.

License agreements

12 Months Ended

Dec. 31, 2020

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 received an upfront payment and immediate milestone payment totaling $210.0 million and were initially eligible to receive up to $1.2 billion in milestone payments across multiple indications upon the achievement of pre-specified events, including 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 April 2016, we amended this agreement to provide that Novartis has exclusive research, development and commercialization rights outside of the United States to ruxolitinib (excluding topical formulations) in the graft-versus-host-disease (“GVHD”) field. We became eligible to receive up to $75.0 million of additional potential development and regulatory milestones relating to GVHD.

Exclusive of the upfront payment of $150.0 million received in 2009 and the immediate milestone of $60.0 million earned in 2010, 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, 2020.

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. In 2018, we recognized a $60.0 million sales milestone for Novartis achieving annual net sales of a JAK licensed product of $900.0 million.

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 future TABRECTA net sales that range from 12% to 14%. Since the achievement of the $60.0 million regulatory milestone related to reimbursement of JAKAVI in Europe in September 2014, 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, 2020, 2019 and 2018, such royalties payable to Novartis on net sales within the United States totaled $89.9 million, $77.6 million and $63.0 million, respectively, and were reflected in cost of product revenues on the consolidated statements of operations. At December 31, 2020 and 2019, $96.4 million and $50.2 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.

Reimbursable costs incurred after the effective date of the agreement with Novartis are recorded net against the related research and development expenses. Research and development expenses for the years ended December 31, 2020, 2019 and 2018 were net of $0.3 million, $1.5 million, and $3.2 million, respectively, of costs reimbursed by Novartis. At December 31, 2020 and 2019, $0.2 million and $0.4 million, respectively, of reimbursable costs were included in accounts receivable on the consolidated balance sheets.

Milestone and contract revenue under the Novartis agreement was $170.0 million, $0.0 million and $60.0 million for the years ended December 31, 2020, 2019 and 2018, respectively. In addition, for the years ended December 31, 2020, 2019 and 2018, we recorded $277.9 million, $225.9 million and $194.7 million, respectively, of product royalty revenues related to Novartis net sales of JAKAVI outside the United States. For the year ended December 31, 2020 we recorded $4.1 million 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. We received an upfront payment of $90.0 million, and were initially eligible to receive up to $665.0 million in substantive milestone payments across multiple indications upon the achievement of pre-specified events, including 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. Exclusive of the upfront payment of $90.0 million received in 2009, we have recognized and received, in aggregate, $149.0 million for the achievement of development milestones and $265.0 million for the achievement of regulatory milestones through December 31, 2020.

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 January 2016, Lilly submitted an NDA to the FDA and a Marketing Authorization Application (MAA) to the European Medicines Agency for baricitinib as treatment for rheumatoid arthritis. In February 2017, we and Lilly announced that the European Commission approved baricitinib as OLUMIANT for the treatment of moderate-to-severe rheumatoid arthritis in adult patients who have responded inadequately to, or who are intolerant to, one or more disease-modifying antirheumatic drugs. In July 2017, Japan's Ministry of Health, Labor and Welfare granted marketing approval for OLUMIANTfor the treatment of rheumatoid arthritis in patients with inadequate response to standard-of-care therapies. In June 2018, the FDA approved the 2mg dose of OLUMIANT for the treatment of adults with moderately-to-severely active rheumatoid arthritis who have had an inadequate response to one or more tumor necrosis factor inhibitor therapies. In October 2020, Lilly announced that the European Commission approved baricitinib as OLUMIANT for the treatment of moderate-to-severe atopic dermatitis in adult patients who are candidates for systemic therapy.

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 2018, we recognized a $20.0 million development milestone for the first patient treated in the systemic lupus erythematosus Phase III program for baricitinib and a $100.0 million regulatory milestone for the FDA approval of the 2mg dose of OLUMIANT for the treatment of adults with moderately-to-severely active rheumatoid arthritis.

We retained options to co-develop our JAK1/JAK2 inhibitors with Lilly on a compound-by-compound and indication-by-indication basis. Lilly is responsible for all costs relating to the development and commercialization of the compounds unless we elect to co-develop any compounds or indications. If we elect to co-develop any compounds and/or indications, we would be responsible for funding 30% of the associated future global development costs from the initiation of a Phase IIb trial through regulatory approval, including post-launch studies required by a regulatory authority. We would receive an incremental royalty rate increase across all tiers resulting in effective royalty rates ranging up to the high twenties on potential future global net sales for compounds and/or indications that we elect to co-develop. For indications that we elect not to co-develop, we would receive tiered, double-digit royalty payments on future global net sales with rates ranging up to 20% if the product is successfully commercialized. If we have started co-development funding for any indication, we can at any time opt out and stop future co-development cost sharing. If we elect to do this we would still be eligible for our base royalties plus an incremental pro-rated royalty commensurate with our contribution to the total co-development cost for those indications for which we co-funded. We previously had retained an option to co-promote products in the United States but, in March 2016, we waived our co-promotion option as part of an amendment to the agreement.

In July 2010, we elected to co-develop baricitinib with Lilly in rheumatoid arthritis and became responsible for funding 30% of the associated future global development costs for this indication from the initiation of the Phase IIb trial through regulatory approval, including post-launch studies required by a regulatory authority. We subsequently elected to co-develop baricitinib with Lilly in psoriatic arthritis, atopic dermatitis, alopecia areata, systemic lupus erythematosus and axial spondyloarthritis and were responsible for funding 30% of future global development costs for those indications through regulatory approval, including post-launch studies required by a regulatory authority. In April 2019, we elected to end additional co-funding of the development of baricitinib effective as of January 1, 2019. We will continue to receive royalties on global net sales of OLUMIANT, pursuant to the terms in the Lilly agreement, as described above.

We recorded no research and development expense under the Lilly agreement for co-funding the development of baricitinib for the years ended December 31, 2020 and 2019. Research and development expenses recorded under the Lilly agreement representing 30% of the global development costs for baricitinib for the treatment of rheumatoid arthritis, psoriatic arthritis, atopic dermatitis, alopecia areata, systemic lupus erythematosus and axial spondyloarthritis for the year ended December 31, 2018 was $68.6 million.

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 $30.0 million, $0.0 million and $120.0 million, respectively, for the years ended December 31, 2020, 2019 and 2018. In addition, for the years ended December 31, 2020, 2019 and 2018, we recorded $110.9 million, $80.4 million and $40.1 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. Upon execution of the amendment, we paid Lilly an upfront payment of $35.0 million and 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, the parties have agreed to collaborate on the discovery of novel immuno-therapeutics using Agenus’ antibody discovery platforms. The agreement became effective on February 18, 2015, upon the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Upon closing of the agreement, we paid Agenus total consideration of $60.0 million.

In February 2017, we and Agenus amended this agreement (the “Amended Agreement”). 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. In addition to the initial four program targets, we and Agenus have the option to jointly nominate and pursue additional targets within the framework of the collaboration, and in

November 2015, three more targets were added. 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. The programs relating to GITR and OX40 and two of the undisclosed targets were profit-share programs until February 2017, while the other targets currently under collaboration are royalty-bearing programs. The Amended Agreement converted the programs relating to GITR and OX40 to royalty-bearing programs and removed from the collaboration the profit-share programs relating to the two undisclosed targets, with one reverting to us and one reverting to Agenus. Should any of those removed programs be successfully developed by a party, the other party will be eligible to receive the same milestone payments as the royalty-bearing programs and royalties at a 15% rate on global net sales. There are currently no profit-share programs. For each royalty-bearing product other than GITR and OX40, Agenus will be eligible to receive tiered royalties on global net sales ranging from 6% to 12%. For GITR and OX40, Agenus will be eligible to receive 15% royalties on global net sales.

In 2017 under the Amended Agreement, we paid Agenus $20.0 million in accelerated milestones relating to the clinical development of the GITR and OX40 programs, which was recorded in research and development expense. Agenus was initially eligible to receive up to an additional $510.0 million in future contingent development, regulatory and commercialization milestones across all programs in the collaboration. 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. In 2018, we paid Agenus a $5.0 million development milestone for the LAG-3 program and a $5.0 million development milestone for the TIM-3 program, which were recorded in research and development expense on the consolidated statement of operations for the year ended December 31, 2018.

In connection with the Amended Agreement, we also agreed to purchase 10.0 million shares of Agenus Inc. common stock for an aggregate purchase price of $60.0 million in cash, or $6.00 per share. We completed the purchase of the shares on February 14, 2017, when the closing price on The Nasdaq Stock Market for Agenus Inc. shares was $4.40 per share. The shares we acquired were not registered under the Securities Act of 1933 on the purchase date and were subject to certain security specific restrictions for a period of time, and accordingly, we estimated a discount for lack of marketability on the shares on the issuance date of $4.5 million, which resulted in a net fair value of the shares on the issuance date of $39.5 million. Therefore, of the total consideration paid of $60.0 million, $39.5 million was allocated to our stock purchase in Agenus Inc. and was recorded within long term investments and $20.5 million was allocated to research and development expense.

We concluded Agenus Inc. is not a VIE because it has sufficient equity to finance its activities without additional subordinated financial support and its at-risk equity holders have the characteristics of a controlling financial interest. After completion of our stock purchases from Agenus Inc., we held an approximate ownership interest of 18% and, under circumstances present at that time, concluded that we had the ability to exercise significant influence, but not control, over Agenus Inc., primarily due to the level of intra-entity transactions between us and Agenus related to development expenses, as well as other qualitative factors. In the second quarter of 2020, we sold an aggregate of approximately 1.2 million shares of Agenus Inc. common stock, reducing our ownership interest to approximately 9.8% as of June 30, 2020. The sales transactions were priced at market, with per share pricing ranging from $3.57 to $4.21, resulting in gross proceeds of approximately $4.5 million. In the third quarter of 2020, we sold an aggregate of approximately 2.5 million shares of Agenus Inc. common stock, reducing our ownership interest to approximately 7% as of December 31, 2020. The sales transactions were priced at market, with per share pricing ranging from $4.28 to $5.25, resulting in gross proceeds of approximately $12.7 million. As a result of having a less than 10% ownership interest and the recent diversification of Agenus Inc.’s development pipeline with other collaboration partners, we concluded that we no longer have significant influence over Agenus Inc. As such, we no longer account for our equity investment in Agenus Inc. as an equity method investment previously accounted for under the fair value option. We account for our investment in Agenus Inc. at fair value, whereby the investment is marked to market through earnings in each reporting period. For the years ended December 31, 2020, 2019 and 2018, we recorded an unrealized loss of $10.3 million, an unrealized gain of $30.0 million and an unrealized loss of $15.6 million, respectively, based on the change in fair market value of Agenus Inc.’s common stock during these periods. The fair market value of our long term investment in Agenus Inc. as of December 31, 2020 and 2019 was $44.7 million and $72.3 million, respectively.

Research and development expenses for the years ended December 31, 2020, 2019 and 2018, also included $0.0 million, $1.5 million and $4.6 million, respectively, of development costs incurred pursuant to the Agenus arrangement.

At December 31, 2020 and 2019, a total of $0.5 million and $1.6 million, respectively, of such costs were included in accrued and other liabilities on the consolidated balance sheets.

Merus

In December 2016, we entered into a Collaboration and License Agreement with Merus N.V. (“Merus”). Under this agreement, which became effective in January 2017, 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 eleven independent programs.

The most advanced collaboration program is MCLA-145, a bispecific antibody targeting PD-L1 and CD137, for which we received exclusive development and commercialization rights outside of the United States. Merus retained exclusive development and commercialization rights in the United States to MCLA-145. Each party will share equally the costs of mutually agreed global development activities for MCLA-145, and fund itself any independent development activities in its territory. Merus will be responsible for commercializing MCLA-145 in the United States and we will be responsible for commercializing it outside of the United States.

In addition to receiving rights to MCLA-145 outside of the United States, we received 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.

In February 2017, we paid Merus an upfront non-refundable payment of $120.0 million. For each program as to which Merus does not have commercialization or development co-funding rights, Merus will be 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 will be 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. For MCLA-145, we and Merus will each be eligible to receive tiered royalties on net sales in the other party’s territory at rates ranging from 6% to 10%.

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 December 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. We completed the purchase of the shares on January 23, 2017 when the closing price on The Nasdaq Stock Market for Merus shares was $24.50 per share. The shares we acquired were not registered under the Securities Act

of 1933 on the purchase date and were subject to certain security specific restrictions for a period of time, and accordingly, we estimated a discount for lack of marketability on the shares on the issuance date of $5.6 million, which resulted in a net fair value of the shares on the issuance date of $72.8 million. Of the total consideration paid of $80.0 million, $72.8 million was allocated to our stock purchase in Merus and was recorded as a long term investment and $7.2 million was allocated to research and development expense. The fair market value of our total long term investment in Merus as of December 31, 2020 and 2019 was $56.1 million and $45.1 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.

We concluded Merus is not a VIE because it has sufficient equity to finance its activities without additional subordinated financial support and its at-risk equity holders have the characteristics of a controlling financial interest. As of December 31, 2020, we owned approximately 11% of the outstanding common shares of Merus and conclude 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, 2020, 2019 and 2018, we recorded an unrealized gain of $11.0 million, an unrealized gain of $0.3 million, and an unrealized loss of $17.3 million, respectively, based on the change in fair market value of Merus’ common shares during these periods.

Research and development expenses for the years ended December 31, 2020, 2019 and 2018 included $8.9 million, $7.2 million and $10.3 million, respectively, of additional development costs incurred pursuant to the Merus agreement. At December 31, 2020 and 2019, a total of $1.6 million and $1.6 million, respectively, of such costs were included in accrued and other liabilities on the consolidated balance sheets.

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.

In January 2017, we paid Calithera an upfront license fee of $45.0 million and have agreed to pay potential development, regulatory and sales milestone payments of over $430.0 million if the profit share is in effect, or $750.0 million if the profit share terminates. In 2017, Calithera earned a $12.0 million milestone payment from us for the achievement of pharmacokinetic and pharmacodynamics goals for CB-1158 which was recorded in research and development expense.

In August 2020, 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. In addition, the total remaining potential development, regulatory and sales milestone payments will be $738.0 million and Calithera will have no further rights to research, develop or co-detail INCB001158 and 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 January 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. We completed the purchase of the shares on January 30, 2017 when the closing price on The Nasdaq Stock Market was $6.75 per share. The shares we acquired were registered under the Securities Act of 1933 on the purchase date and there were no security specific restrictions for these shares, and therefore the value of the 1.7 million shares acquired by us was $11.6 million. We paid total consideration of $53.0 million to Calithera, composed of the $45.0 million upfront license fee and the $8.0 million stock purchase price. Of the $53.0 million, $11.6 million was allocated to our stock purchase in Calithera and was recorded within long term investments and $41.4 million was allocated to research and development expense. The fair market value of our long term investment in Calithera as of December 31, 2020 and 2019 was $8.4 million and $9.8 million, respectively.

We concluded Calithera is not a VIE because it has sufficient equity to finance its activities without additional subordinated financial support and its at-risk equity holders have the characteristics of a controlling financial interest. As of December 31, 2020, we owned approximately 2% of the outstanding shares of Calithera common stock and there are several other stockholders who hold larger positions of Calithera. As we do not hold a significant position of the voting shares of Calithera and lack the qualitative characteristics associated with the ability to exercise significant influence, our ownership interest does not meet the criteria to be accounted for as an equity method investment. 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, and 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, 2020, 2019 and 2018, we recorded an unrealized loss of $1.4 million, an unrealized gain of $2.9 million, and an unrealized loss of $7.5 million, respectively, based on the change in fair market value of Calithera’s common stock during these periods.

Research and development expenses for the years ended December 31, 2020, 2019 and 2018 also included $8.9 million, $17.9 million and $12.0 million, respectively, of additional development costs incurred pursuant to the Calithera agreement. At December 31, 2020 and 2019, a total of $0.6 million and $1.1 million, respectively, of such costs were included in accrued and other liabilities on the consolidated balance sheets.

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 will 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. In 2017, we paid MacroGenics an upfront payment of $150.0 million, which was recorded in research and development expense. MacroGenics was initially eligible to receive up to $420.0 million in future contingent development and regulatory milestones and up to $330.0 million in commercial milestones as well as tiered royalties ranging from 15% to 24% of global net sales.

In 2020, we paid MacroGenics $40.0 million in milestones for the achievement of certain clinical milestones as part of our collaboration and license agreement, which were recorded in research and development expense on our consolidated statement of operations for the year ended December 31, 2020. In 2018, we paid MacroGenics a $10.0 million

and a $5.0 million milestone for the achievement of certain clinical milestones as part of our collaboration and license agreement, which were recorded in research and development expense on our consolidated statement of operations for the year ended December 31, 2018.

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, 2020, 2019 and 2018, also included $59.0 million, $51.1 million and $35.4 million, respectively, of additional development costs incurred pursuant to the MacroGenics agreement. At December 31, 2020 and 2019, a total of $0.1 million and $1.0 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 January 2018, we paid Syros an upfront non-refundable (except in the event of a material breach of the agreement by Syros) payment of $10.0 million, which was recorded in research and development expense on our consolidated statement of operations for the year ended December 31, 2018.

In addition, in January 2018, we entered into a Stock Purchase Agreement with Syros for the purchase of 0.8 million common shares of Syros for an aggregate purchase price of $10.0 million in cash, or $12.61 per share. We agreed to not sell or otherwise transfer any of our Syros shares for a period, referred to as the Lock-Up Period, of 12 months after the closing date of the sale. We completed the purchase of the shares on January 8, 2018 when the closing price on The Nasdaq Stock Market was $9.77 per share. The shares we acquired were not registered on the purchase date, and accordingly, we estimated a discount for lack of marketability on the shares of $0.1 million, which resulted in a net fair value of the shares on the issuance date of $7.6 million. Of the $10.0 million aggregate purchase price paid, $7.6 million was allocated to our stock purchase in Syros and was recorded within long term investments and $2.4 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, 2018. Also in January 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 shares were acquired in February 2018 and the $1.4 million aggregate purchase price was recorded within long term investments on the consolidated balance sheets. All acquired shares were subsequently registered under the Securities Act of 1933 in February 2018. The fair market value of our long term investment in Syros as of December 31, 2020 and 2019 was $10.2 million and $6.5 million, respectively.

We concluded Syros is not a VIE because it has sufficient equity to finance its activities without additional subordinated financial support and its at-risk equity holders have the characteristics of a controlling financial interest. As of December 31, 2020, we owned approximately 2% of the outstanding shares of Syros common stock and there are several other stockholders who hold larger positions of Syros. As we do not hold a significant position of the voting shares of Syros and lack the qualitative characteristics associated with the ability to exercise significant influence, our ownership interest does not meet the criteria to be accounted for as an equity method investment. 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, and 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, 2020, 2019 and 2018, we recorded an unrealized gain of $3.7 million, an unrealized gain of $1.3 million and an unrealized loss of $3.7 million, respectively, based on the change in fair market value of Syros’ common stock during these 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 were initially eligible to receive up to an additional $129.0 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 Innovent and decisions made by regulatory agencies. In 2020, we recognized a $5.0 million milestone for the FDA approval of pemigatinib as PEMAZYRE. In 2019, we recognized the $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.

Research and development expenses for the years ended December 31, 2020 and 2019 were net of $5.4 million and $6.2 million, respectively, of costs reimbursed by Innovent. At December 31, 2020 and 2019, $1.2 million and $3.0 million, respectively, of reimbursable costs were included in accounts receivable on the consolidated balance sheets.

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 August 2019, we recognized an upfront payment under this agreement of $17.5 million upon our transfer of the functional intellectual property related to the licensed product candidate 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 upfront milestone was recognized as revenue at a point in time upon our transfer of the license to Zai Lab for the right to use the functional intellectual property.

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.

Research and development expenses for the year ended December 31, 2020 were net of $0.2 million of costs reimbursed by Zai Lab. At December 31, 2020 and 2019, $0.6 million and $0.5 million, respectively, of reimbursable costs were included in accounts receivable on the condensed consolidated balance sheets.

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. In December 2019, MorphoSys submitted a Biologics License Application to the FDA for tafasitamab for the treatment of relapsed or refractory diffuse large B cell lymphoma. The agreement became effective in March 2020 after clearance by the German and Austrian antitrust authorities and expiration of the waiting period under the Hart-Scott Rodino Antitrust Improvements Act of 1976.

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 March 2020, we paid MorphoSys an upfront non-refundable payment of $750.0 million which was recorded in research and development expense on the consolidated statement of operations for the year ended December 31, 2020. 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 July 2020, we and MorphoSys announced that the FDA approved MONJUVI® (tafasitamab-cxix) in combination with lenalidomide for the treatment of adult patients with relapsed or refractory diffuse large B-cell lymphoma (DLBCL) not otherwise specified, including DLBCL arising from low grade lymphoma, and who are not eligible for autologous stem cell transplant. MONJUVI was approved under accelerated approval based on overall response rate.

In addition, under the collaboration 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”). We agreed, subject to limited exceptions, not to sell or otherwise transfer any of the New ADSs for an 18-month period after the closing date of the sale. We completed the purchase of the ADSs on March 3, 2020 when the closing price on The Nasdaq Stock Market was $27.65 per ADS. The New ADSs were not registered under the Securities Act of 1933 on the purchase date, and accordingly, we estimated a discount for lack of marketability on the shares of $4.9 million, which resulted in a net fair value of the shares on the issuance date of $95.5 million. Of the $150.0 million aggregate purchase price paid, $95.5 million was allocated to our stock purchase in MorphoSys and was recorded within long term investments and $54.5 million, representing the premium paid on the purchase, was allocated to research and development expense. The fair market value of our long term investment in MorphoSys as of December 31, 2020 was $102.9 million.

We concluded MorphoSys is not a VIE because it has sufficient equity to finance its activities without additional subordinated financial support and its at-risk equity holders have the characteristics of a controlling financial interest. As of December 31, 2020, we owned approximately 3% of the outstanding shares of MorphoSys common stock and there are several other stockholders who hold larger positions of MorphoSys. As we do not hold a significant position of the voting shares of MorphoSys and lack the qualitative characteristics associated with the ability to exercise significant influence, our ownership interest does not meet the criteria to be accounted for as an equity method investment. 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, and 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, 2020, we recorded an unrealized gain of $7.4 million based on the change in fair market value of MorphoSys’ common stock during the period.

Our 50% share of the United States loss for the commercialization of tafasitamab was $42.8 million for the year ended December 31, 2020 and is recorded as collaboration loss sharing on the consolidated statement of operations. Research and development expenses for the year ended December 31, 2020, included $88.2 million related to our 55% share of the co-development costs for tafasitamab. At December 31, 2020, $54.2 million 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.

Property and Equipment, net

12 Months Ended

Dec. 31, 2020

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,
	2020		2019
Office equipment	$	17,880	$	15,303
Laboratory equipment		86,021		70,510
Computer equipment		66,640		59,069
Land		10,671		10,203
Building and leasehold improvements		238,042		208,293
Operating lease right-of-use assets		26,816		19,672
Construction in progress		257,929		116,387
		703,999		499,437
Less accumulated depreciation and amortization		(144,374)		(121,870)
Property and equipment, net	$	559,625	$	377,567

Depreciation expense, including amortization expense of leasehold improvements, was $29.6 million, $32.1 million and $32.3 million for the years ended December 31, 2020, 2019 and 2018, 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. As of December 31, 2020, we have capitalized approximately $79.5 million in on site preparation, design and construction costs and currently expect the building to be completed in the second half of 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. As of December 31, 2020, we have capitalized approximately $17.9 million in leasehold improvements.

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, 2020, we have capitalized approximately $167.4 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 2021.

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,		December 31,
	2020		2019
Current
Operating lease liabilities	$	12,674	$	9,343
Finance lease liabilities		2,284		664
Noncurrent
Operating lease liabilities		14,188		11,854
Finance lease liabilities		32,573		31,918
Total lease liabilities	$	61,719	$	53,779

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


	Operating		Finance
2021	$	14,091	$	3,652
2022		6,948		3,448
2023		3,714		3,341
2024		906		2,756
2025		761		2,772
After 2025		4,118		29,292
Total lease cash payments	$	30,538	$	45,261
Less: discount		3,676		10,404
Present value of lease liabilities	$	26,862	$	34,857

The cash paid for amounts included in the measurement of our operating lease liabilities for the years ended December 31, 2020 and 2019 was $12.1 million and $11.9 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, 2020 and 2019 was $0.8 million in financing cash flows.

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 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 3.7% and 4.7%, respectively. As of December 31, 2019, our finance and operating leases had a weighted average lease term of approximately 15.8 and 3.0 years, respectively, and the weighted average discount rate of our finance and operating leases was approximately 3.6% and 4.5%, respectively.

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 year ended December 31, 2019, we incurred approximately $12.7 million of expense related to our operating leases, approximately $1.7 million of amortization on our finance lease right-of-use assets and approximately $0.6 million of interest expense on our finance lease liabilities. For the years ended December 31, 2020 and 2019, the cost of our short term leases with a term less than 12 months was approximately $1.9 million and $1.1 million, respectively.

Intangible Assets and Goodwill

12 Months Ended

Dec. 31, 2020

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, 2020

Balance at December 31, 2019

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

98,709

172,291

271,000

77,172

193,828

Amortization expense was $21.5 million for the years ended December 31, 2020, 2019 and 2018 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):


		2021		2022		2023		2024		2025		Thereafter
Amortization expense	$	21,536	$	21,536	$	21,536	$	21,536	$	21,536	$	64,611

Goodwill

There were no changes to the carrying amount of goodwill for the years ended December 31, 2020 and 2019.

Accrued and Other Current Liabilities

12 Months Ended

Dec. 31, 2020

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,
	2020		2019
Royalties	$	106,011	$	73,221
Clinical related costs		115,897		88,710
Sales allowances		73,204		59,924
Construction in progress		22,807		12,732
Operating lease liabilities		12,674		9,343
Other current liabilities		47,811		42,049
Total accrued and other current liabilities	$	378,404	$	285,979

Convertible Notes

12 Months Ended

Dec. 31, 2020

Convertible Notes

Convertible Notes

Note 10. Convertible Notes

The carrying amount and fair value of our convertible notes were as follows (in thousands):


	December 31,
	2020				2019
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
1.25% Convertible Senior Notes due 2020	$	—	$	—	$	18,300	$	32,511

The fair value as of December 31, 2019 of the 1.25% Convertible Senior Notes that matured on November 15, 2020 (the “2020 Notes”) was based on data from readily available pricing sources which utilize market observable inputs and other characteristics for similar types of instruments, and, therefore, is classified within Level 2 in the fair value hierarchy.

Prior to May 14, 2014, the 2020 Notes were not convertible except in connection with a make-whole fundamental change, as defined in the indenture. Beginning on, and including, May 15, 2014, the 2020 Notes were convertible prior to the close of business on the business day immediately preceding May 15, 2020 only under the following circumstances: (i) during any calendar quarter commencing after the calendar quarter ending on March 31, 2014 (and only during such calendar quarter), if the last reported sale price of our common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price for the 2020 Notes on each applicable trading day; (ii) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the trading price per $1,000 principal amount of the 2020 Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of our common stock and the conversion rate for the 2020 Notes on each such trading day; or (iii) upon the occurrence of specified corporate events. On or after May 15, 2020 until the close of business on the second scheduled trading day immediately preceding the maturity date, the 2020 Notes were convertible at any time, regardless of the foregoing circumstances. Upon conversion we had the option to pay or deliver, as the case may be, cash, shares of common stock or a combination of cash and shares of common stock.

The initial conversion rate for the 2020 Notes was 19.3207 shares of common stock per $1,000 principal amount, equivalent to an initial conversion price of approximately $51.76 per share.

Prior to maturity on November 15, 2020, we settled, upon conversion, the remaining 2020 Notes principal balance in shares of common stock.

Stockholders' Equity

12 Months Ended

Dec. 31, 2020

Stockholders' Equity

Stockholders' Equity

Note 11. 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, 2020 and 2019. 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, 2020, we had a total of 6,460,660 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 March 2019, 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 April 2019, our stockholders approved an increase in the number of shares of common stock reserved for issuance under the 2010 Stock Plan from 36,753,475 to 44,453,475.

Option activity under the 2010 Stock Plan was as follows:


	Shares Subject to
	Outstanding Options
		Weighted Average
	Shares	Exercise Price
Balance at December 31, 2019	12,632,657	$	81.42
Options granted	2,256,146	$	92.82
Options exercised	(2,230,588)	$	52.78
Options cancelled	(542,927)	$	92.66
Balance at December 31, 2020	12,115,288	$	88.31

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 6,732,942, 6,896,492 and 7,194,171 shares as of December 31, 2020, 2019 and 2018, respectively, were exercisable. The aggregate intrinsic value of options exercised for the years ended December 31, 2020, 2019 and 2018 were $87.5 million, $113.8 million and $73.9 million, respectively. At December 31, 2020, the aggregate intrinsic value of options outstanding and vested options are $86.3 million and $84.3 million, respectively.

The following table summarizes information about stock options outstanding as of December 31, 2020 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
$18.97 - $68.62	1,659,221	5.97	$	63.57	1,106,486	$	61.34
$68.82 - $68.97	48,657	7.78		68.95	21,816		68.95
$72.27 - $72.27	1,714,370	7.96		72.27	597,888		72.27
$72.58 - $80.50	1,745,853	6.34		77.24	1,041,346		75.79
$80.56 - $85.01	1,586,213	7.21		84.35	951,572		84.15
$85.34 - $95.34	1,376,900	7.24		93.20	597,552		92.96
$95.54 - $106.47	1,985,715	6.48		101.14	926,623		96.69
$107.69 - $124.00	1,219,175	5.68		113.55	801,950		113.45
$124.03 - $134.38	753,912	6.13		129.23	664,552		129.35
$138.52 - $138.52	25,272	6.25		138.52	23,157		138.52
	12,115,288				6,732,942

Restricted Stock Units and Performance Shares

In January 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 prior to July 2016 was subject to cliff vesting after three years. In July 2016, we revised the terms of our RSU grants to provide that the awards will vest 25% annually over four years.

In June 2018, we granted 190,000 RSUs and 446,500 PSUs under long term incentive plans with performance and/or service-based milestones with graded and/or cliff vesting over three to four years. In April 2019, we granted an additional 100,000 PSUs under one of the existing long term incentive plans with performance based milestones and cliff vesting. For one of the existing long term incentive plans, under which 106,500 PSUs were granted, the actual number of shares of our common stock into which each PSU may convert was subject to a multiplier of up to 267% based on the level at which the performance conditions were achieved. The actual number of shares of our common stock into which each PSU will convert is at a multiplier of 142% based on the performance conditions being achieved as of March 31, 2019 and

will continue to vest through June 2022. For an existing long term incentive plan, under which 150,000 PSUs were granted, the actual number of shares of our common stock into which each PSU may convert was subject to a multiplier of up to 100% if all performance conditions were achieved or 0% if no performance conditions were achieved. The actual number of shares of our common stock into which each PSU will convert is at a multiplier of 100% based on the performance conditions being achieved as of December 31, 2019 and will cliff vest in June 2021. Compensation expense for the performance-based awards is recorded over the estimated service period for each milestone when the performance conditions are deemed probable of achievement. For the period ended December 31, 2020, the stock compensation expense recorded during the period was for service-based awards and performance conditions deemed probable of achievement and/or achieved. For PSUs containing performance conditions which were not deemed probable of achievement at December 31, 2020, no stock compensation expense was recognized.

In July 2018, we granted 77,243 PSUs to executives with performance milestones and graded vesting over four years. The shares of our common stock into which each PSU may convert is subject to a multiplier up to 150% based on the level at which the performance condition is achieved. Compensation expense for the performance-based awards is recorded over the estimated service period when the performance condition is deemed probable of achievement. The actual number of shares of our common stock into which each PSU converted was at a multiplier of 83% based on the performance condition being achieved as of December 31, 2018. These PSUs will continue to vest through July 2022.

In July 2019, we granted 86,975 PSUs to executives with a performance milestone and graded vesting over four years. The shares of our common stock into which each PSU may convert is subject to a multiplier up to 125% based on the level at which the performance condition is achieved. Compensation expense for the performance-based awards is recorded over the estimated service period when the performance condition is deemed probable of achievement. The actual number of shares of our common stock into which each PSU will convert is at a multiplier of 101.8% based on the performance condition being achieved as of December 31, 2019. These PSUs will continue to vest through July 2023.

In July 2020, we granted 92,347 PSUs to executives with performance milestones and cliff vesting on the third anniversary from date of grant. The shares of our common stock into which each PSU may convert is subject to a multiplier up to 200% based on the level at which the financial and developmental performance conditions are achieved over the service period which ends December 31, 2022. Compensation expense for the performance-based awards is recorded over the estimated service period for each milestone when the performance conditions are deemed probable of achievement. For the period ended December 31, 2020, the stock compensation expense recorded during the period was for service-based awards and performance conditions deemed probable of achievement and/or achieved. For PSUs containing performance conditions which were not deemed probable of achievement at December 31, 2020, no stock compensation expense was recognized.

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, 2019	2,602,376	$	79.69
RSUs granted	1,356,377	$	98.11
PSUs granted	92,347	$	106.47
RSUs released	(572,810)	$	86.21
PSUs released	(35,455)	$	78.85
RSUs cancelled	(141,002)	$	86.03
PSUs cancelled	(17,250)	$	68.79
Balance at December 31, 2020	3,284,583	$	87.42

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, 2019		9,882,122
Options, RSUs and PSUs granted		(5,153,982)
Options, RSUs and PSUs cancelled		787,042
Balance at December 31, 2020		5,515,182

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 258,453, 239,590 and 233,712 shares under the ESPP in 2020, 2019 and 2018, respectively. For the years ended December 31, 2020, 2019 and 2018, we recorded stock compensation expense of $4.6 million, $3.4 million and $3.7 million, respectively, as the ESPP is considered compensatory under the FASB stock compensation rules. As of December 31, 2020, 945,478 shares remain available for issuance under the ESPP.

Stock Compensation

12 Months Ended

Dec. 31, 2020

Stock Compensation

Stock Compensation

Note 12. Stock Compensation

We recorded $177.9 million, $166.6 million and $148.2 million, respectively, of stock compensation expense for the years ended December 31, 2020, 2019 and 2018. Stock compensation expense within our consolidated statements of operations included research and development expense for the years ended December 31, 2020, 2019 and 2018 of $120.4 million, $114.0 million and $101.1 million, respectively. Stock compensation expense within our consolidated statements of operations also included selling, general and administrative expense for the years ended December 31, 2020, 2019 and 2018 of $56.6 million, $51.9 million and $47.1 million, respectively. Stock compensation expense within our consolidated statements of operations also included cost of product revenues for the years ended December 31, 2020 and 2019 of $1.0 million and $0.7 million respectively. For the years ended December 31, 2020, 2019 and 2018, we capitalized $0.6 million, $0.4 million and $0.1 million, respectively, of stock compensation expense as part of the cost of an asset.

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,
	2020		2019		2018		2020		2019		2018
Average risk-free interest rates	0.80	%	2.27	%	2.61	%	0.17	%	1.82	%	2.62	%
Average expected life (in years)	4.98		5.27		5.26		0.50		0.50		0.50
Volatility	40	%	45	%	45	%	45	%	31	%	46	%
Weighted-average fair value (in dollars)	32.65		32.38		34.20		19.13		14.04		15.80

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, 2020, was $75.0 million, which is expected to be recognized over the weighted average period of 1.2 years. Total compensation cost of RSUs granted but not yet vested, as of December 31, 2020, was $119.0 million, which is expected to be recognized over the weighted average period of 1.7 years. Total compensation cost of PSUs granted but not yet vested, as of December 31, 2020, was $25.7 million, which is expected to be recognized over the weighted average period of 1.3 years, should the underlying performance conditions be deemed probable of achievement.

Income Taxes

12 Months Ended

Dec. 31, 2020

Income Taxes

Income Taxes

Note 13. Income Taxes

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


	Year Ended December 31,
	2020		2019		2018
U.S.	$	(16,609)	$	712,486	$	478,050
Non-U.S.		(215,609)		(225,695)		(362,703)
Income (loss) before provision for income taxes	$	(232,218)	$	486,791	$	115,347

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


	Year Ended December 31,
	2020		2019		2018
Current:
Federal	$	43,595	$	23,526	$	—
State		18,881		11,553		5,010
Foreign		1,353		5,183		1,303
		63,829		40,262		6,313
Deferred:
State		—		(205)		111
Foreign		(350)		(172)		(570)
		(350)		(377)		(459)
Total provision for income taxes	$	63,479	$	39,885	$	5,854

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


	Year Ended December 31,
	2020		2019		2018
Provision (benefit) at U.S. federal statutory rate	$	(48,766)	$	102,226	$	24,223
Unbenefited future tax deductions and tax credits		105,923		(73,666)		(51,861)
Excess tax benefits related to share-based compensation		(9,750)		(13,418)		(8,233)
Foreign tax rate differential		30,412		25,419		37,061
Non-deductible officer compensation		7,418		5,213		4,114
Foreign-derived intangible income		(22,830)		(9,153)		—
Other		1,072		3,264		550
Provision for income taxes	$	63,479	$	39,885	$	5,854

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.

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


	December 31,
	2020		2019
Deferred tax assets:
Net operating loss carry forwards	$	128,088	$	102,001
Federal and state research credits		305,099		400,550
Capitalized research and development		43,806		46,188
Deferred revenue and accruals		27,467		13,609
Non-cash compensation		75,867		67,345
Acquisition-related contingent consideration		32,658		31,956
Intangibles, net		289,848		92,806
Long term investments		25,968		14,899
Other		26,303		21,885
Total gross deferred tax assets		955,104		791,239
Less valuation allowance for deferred tax assets		(930,209)		(770,497)
Net deferred tax assets	$	24,895	$	20,742

Deferred tax liabilities:
Property and equipment	$	(22,841)	$	(19,095)
Total gross deferred tax liabilities		(22,841)		(19,095)
Net deferred tax assets	$	2,054	$	1,647

The net deferred tax asset balance is reported in other assets, net on the consolidated balance sheets as of December 31, 2020 and 2019.

As of December 31, 2020, the Company has 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	$	361,890	2021 through 2039; indefinite
Foreign		1,250,048	2021 through 2027
Research and development credit carryforwards
Federal		150,598	2036 through 2040
State		23,986	2021 through 2039; indefinite
Orphan drug tax credit carryforwards		162,653	2035 through 2040

The valuation allowance for deferred tax assets increased by approximately $159.7 million during the year ended December 31, 2020, decreased by approximately $66.5 million during the year ended December 31, 2019 and increased by approximately $2.2 million during the year ended December 31, 2018. The net valuation allowance increase during 2020 was primarily due to the generation of future deductible temporary differences and foreign NOLs offset by a net utilization of research and development (“R&D”) and orphan drug credits in the U.S.

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.

Based upon our analysis of our historical operating results, as well as projections of our future taxable income (losses) during the periods in which the temporary differences will be recoverable, management believes the uncertainty regarding the realization of our U.S. and Swiss net deferred tax assets requires a full valuation allowance against such net assets as of December 31, 2020. When performing our assessment on projections of future taxable income (losses), we

consider factors such as the likelihood of regulatory approval and commercial success of products currently under development, among other factors.

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 and not subject to valuation allowances, we would recognize a tax benefit of $31.6 million. The following table summarizes the gross amounts of unrecognized tax benefits (in thousands):


	Year Ended December 31,
	2020		2019
Balance at beginning of year	$	24,251	$	22,395
Additions related to prior periods tax positions		3,953		726
Reductions related to prior periods tax positions		(216)		(82)
Additions related to current period tax positions		4,119		1,835
Settlements		(201)		—
Reductions due to lapse of applicable statute of limitations		(397)		(557)
Currency translation adjustment		88		(66)
Balance at end of year	$	31,597	$	24,251

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 ended December 31, 2020, we recorded a negligible reduction to interest and penalties as a component of income tax expense. During the years ending December 31, 2019 and 2018, we recorded interest and penalties as a component of income tax expense of $0.2 million and $0.1 million, respectively. We do not anticipate any significant changes to our unrecognized tax benefits during the next twelve months.

The Company files 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 + Details

Net Income (Loss) Per Share

12 Months Ended

Dec. 31, 2020

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Note 14. 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 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 all periods presented 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)	2020		2019		2018
Basic Net Income (Loss) Per Share
Basic net income (loss)	$	(295,697)	$	446,906	$	109,493
Weighted average common shares outstanding		218,073		214,913		212,383

Basic net income (loss) per share	$	(1.36)	$	2.08	$	0.52

Diluted Net Income (Loss) Per Share
Diluted net income (loss)	$	(295,697)	$	446,906	$	109,493
Weighted average common shares outstanding		218,073		214,913		212,383

Dilutive stock options and awards		—		2,744		3,252

Weighted average shares used to compute diluted net income (loss) per share		218,073		217,657		215,635

Diluted net income (loss) per share	$	(1.36)	$	2.05	$	0.51

The following potential common shares were excluded from the calculation as their effect would be anti-dilutive:


	2020	2019	2018
Outstanding stock options and awards	15,274,871	9,349,889	8,255,992
Common shares issuable upon conversion of the 2020 Notes	—	368,939	368,939
Total potential common shares excluded from diluted net income (loss) per share computation	15,274,871	9,718,828	8,624,931

Employee Benefit Plans

12 Months Ended

Dec. 31, 2020

Employee Benefit Plans

Employee Benefit Plans

Note 15. 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 $13.4 million, $11.7 million and $10.5 million for the years ended December 31, 2020, 2019 and 2018, respectively. Included in the 2020, 2019 and 2018 defined contribution expense was $1.7 million, $1.6 million and $1.4 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, 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%. The benefit obligation at December 31, 2019 for the plans was determined using a discount rate of 0.30% and rate of compensation increase of 2.25%. The 2019 net periodic benefit cost for the plans was determined using discount rates of 0.75%, rates of compensation increase of 2.25% and long-term expected return on plan assets of 0.75%.

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,
	2020		2019
Benefit obligation, beginning of year	$	62,770	$	46,038
Employer service cost		6,047		5,195
Interest cost		193		345
Plan participants' contributions		2,237		1,613
Actuarial loss		9,372		6,672
Transfer of benefits net of payments from fund		11,057		2,184
Expenses paid from assets		(88)		(61)
Translation loss		6,371		784
Benefit obligation, end of year		97,959		62,770

Fair value of plan assets, beginning of year		38,662		30,368
Actual return on plan assets		260		132
Employer contributions		5,413		3,910
Plan participants' contributions		2,237		1,613
Transfer of benefits net of payments from fund		11,057		2,184
Expenses paid from assets		(88)		(61)
Translation gain		3,724		516
Fair value of plan assets, end of year		61,265		38,662

Unfunded liability, end of year	$	36,694	$	24,108

The unfunded liability is reported in other liabilities on the consolidated balance sheets as of December 31, 2020 and 2019. The accumulated benefit obligation is $83.2 million and $52.9 million as of December 31, 2020 and 2019, respectively.

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


	Year Ended December 31,
	2020		2019		2018
Service cost	$	6,047	$	5,195	$	4,450
Interest cost		193		345		278
Expected return on plan assets		(126)		(241)		(195)
Amortization of prior service cost		216		214		179
Amortization of actuarial losses		667		247		265
Net periodic benefit cost	$	6,997	$	5,760	$	4,977

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,
	2020		2019		2018
Pension liability, beginning of year	$	15,468	$	9,146	$	8,450
Net prior service costs		(216)		(214)		(179)
Net loss		8,579		6,536		875
Pension liability, end of year	$	23,831	$	15,468	$	9,146

We expect to contribute a total of $6.0 million to the pension plans in 2021. The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid (in thousands):


2021	$	3,315
2022		3,413
2023		3,474
2024		3,506
2025		3,972
2026-2030		22,498
Total	$	40,178

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 55
-Paragraph 17
-URI http://asc.fasb.org/extlink&oid=118257860&loc=d3e4179-114921

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section S99
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=21916913&loc=d3e273930-122802

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (o)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (p)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 70
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=49170846&loc=d3e28014-114942

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-URI http://asc.fasb.org/topic&trid=2235017

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 60
-Section 50
-Paragraph 3
-Subparagraph (c)
-URI http://asc.fasb.org/extlink&oid=6414203&loc=d3e39689-114964

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (q)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (l)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-SubTopic 20
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-URI http://asc.fasb.org/extlink&oid=118255775&loc=d3e1928-114920

+ Details

Commitments and Contingencies

12 Months Ended

Dec. 31, 2020

Commitments and Contingencies

Commitments and Contingencies

Note 16. Commitments and Contingencies

In October 2019, we entered into an agreement with Wilmington Friends School Inc., to purchase property for $50.0 million to expand our global headquarters. Under that agreement, closing of the purchase is subject to certain standard closing conditions, including an initial diligence period and a subsequent approval period. Information on our future lease obligations are described in Note 7.

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.

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. We have cooperated with this inquiry. 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 (“Relator”). The DOJ has not intervened to date. 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 and the Judge will rule on the Motion based on these filings in due course. A trial date has not been set. We intend to continue defending ourselves vigorously against these allegations. We cannot predict the outcome or the timing of the ultimate resolution of the investigation or qui tam action, or reasonably estimate the possible range of loss, if any, that may result from these matters. Accordingly, no reserve has been made with respect to these matters as of December 31, 2020.

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.

Segment Information

12 Months Ended

Dec. 31, 2020

Segment Information

Segment Information

Note 17. Segment Information

We currently operate in one operating business segment focused on the discovery, development and commercialization of proprietary therapeutics. Our chief operating decision-maker manages the operations of our company as a single operating segment. 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, 2020, total revenues generated by subsidiaries in the United States was $2.6 billion and total revenues generated from subsidiaries in Europe was $105.0 million. During the year ended December 31, 2019, total revenues generated by subsidiaries in the United States was $2.1 billion and total revenues generated from subsidiaries in Europe was $90.0 million. During the year ended December 31, 2018, total revenues generated by subsidiaries in the United States was $1.8 billion and total revenues generated from subsidiaries in Europe was $79.9 million. As of December 31, 2020, property and equipment, net was approximately $336.9 million in the United States, approximately $218.0 million in Europe and approximately $4.7 million in Japan. As of December 31, 2019, property and equipment, net was approximately $261.7 million in the United States and approximately $109.9 million in Europe.

- 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
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 31
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 5: 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=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (e)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 26
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 10: 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=120311839&loc=d3e8736-108599

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-URI http://asc.fasb.org/topic&trid=2134510

+ Details

Interim Consolidated Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2020

Interim Consolidated Financial Information (Unaudited)

Interim Consolidated Financial Information (Unaudited)

Note 18. Interim Consolidated Financial Information (Unaudited)


	Fiscal 2020 Quarter Ended
(in thousands, except per share data)	March 31,		June 30,		September 30,		December 31,
Revenues⁽¹⁾	$	568,507	$	688,043	$	620,643	$	789,509
Net income (loss)	$	(720,642)	$	290,298	$	(15,203)	$	149,850
Basic net income (loss) per share	$	(3.33)	$	1.33	$	(0.07)	$	0.68
Diluted net income (loss) per share	$	(3.33)	$	1.32	$	(0.07)	$	0.68
Shares used in computation of basic net income (loss) per share		216,721		217,549		218,784		219,239
Shares used in computation of diluted net income (loss) per share		216,721		220,434		218,784		221,228


	Fiscal 2019 Quarter Ended
(in thousands, except per share data)	March 31,		June 30,		September 30,		December 31,
Revenues⁽²⁾	$	497,857	$	529,932	$	551,581	$	579,389
Net income	$	102,312	$	105,318	$	128,271	$	111,005
Basic net income per share	$	0.48	$	0.49	$	0.60	$	0.51
Diluted net income per share	$	0.47	$	0.48	$	0.59	$	0.51
Shares used in computation of basic net income per share		214,065		214,620		215,199		215,770
Shares used in computation of diluted net income per share		217,061		217,483		217,791		218,542

(1)

The quarters ended March 31, 2020, June 30, 2020, September 30, 2020 and December 31, 2020 include $486.7 million, $500.3 million, $522.3 million, and $559.5 million, respectively, of product revenues, net, relating to JAKAFI, ICLUSIG and PEMAZYRE. The quarters ended March 31, 2020, June 30, 2020, September 30, 2020 and December 31, 2020 include $81.8 million, $92.8 million, $98.4 million and $119.9 million, respectively, of product royalty revenues related to the sale of JAKAVI and OLUMIANT outside the United States and TABRECTA worldwide. The quarters ended March 31, 2020, June 30, 2020, September 30, 2020 and December 31, 2020 include $0.0 million, $95.0 million, $0.0 million and $110.0 million, respectively, of milestone and contract revenues relating to the Innovent, Lilly and Novartis agreements.

(2)

The quarters ended March 31, 2019, June 30, 2019, September 30, 2019 and December 31, 2019 include $396.2 million, $433.9 million, $454.0 million, and $490.8 million, respectively, of product revenues, net, relating to JAKAFI and ICLUSIG. The quarters ended March 31, 2019, June 30, 2019, September 30, 2019 and December 31, 2019 include $61.6 million, $76.0 million, $80.1 million and $88.6 million, respectively, of product royalty revenues related to the sale of JAKAVI and OLUMIANT outside the United States. In December 2018 and July 2019, we entered into collaborative research and license agreements with Innovent and Zai Lab, respectively. The quarters ended March 31, 2019, June 30, 2019, September 30, 2019 and December 31, 2019 include $40.0 million,

$20.0 million, $17.5 million and $0.0 million, respectively, of milestone and contract revenues relating to these agreements.

Organization and Summary of Significant Accounting Policies (Policies)	12 Months Ended
	Dec. 31, 2020
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. Effective January 1, 2020, 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 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, 2020 and 2019, 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 and 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 reasonably believed to be collectible.
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 began capitalizing PEMAZYRE inventory after FDA approval in April 2020 as the related costs were expected to be recoverable through the commercialization of the product. Costs incurred prior to FDA approval have been recorded as research and development expense in our statements of operations. As a result, cost of product revenues for the next 48 months will reflect a lower average per unit cost of materials. JAKAFI, ICLUSIG and PEMAZYRE raw materials and work-in-process inventory are not subject to expiration and the shelf life of finished goods inventory is 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, 2020, 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 our consolidated balance sheets. Our equity investments are accounted for at fair value using readily determinable pricing available on a securities exchange on our 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. Accounting Standard Codification (“ASC”) 842, Leases, was adopted for the fiscal year beginning on January 1, 2019 using the modified retrospective method. 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, 2020 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 continue to maintain the valuation allowance on the majority of our deferred tax assets as of December 31, 2020. 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 the year ended December 31, 2020, we have delayed the payment of certain employer payroll tax amounts to future periods as allowed under the Act. However, 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 expected impact and risks of COVID-19 on our business in Item 1. Business and 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, performance stock units and shares issuable upon the conversion of convertible debt 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 marketable 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 U.S. sales of JAKAFI and PEMAZYRE and European sales of ICLUSIG. 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 and PEMAZYRE to our customers in the U.S., which include specialty pharmacies and wholesalers. We sell ICLUSIG to our customers in the European Union and certain other jurisdictions, which include retail pharmacies, hospital pharmacies and distributors. 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, Revenue from Contracts with Customers, 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, 2020, we had no revenues from intellectual 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 JAKAFI, ICLUSIG and PEMAZYRE related product 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. We often contract with clinical 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. 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, 2020, 2019, and 2018, advertising expenses were approximately $28.9 million, $15.3 million, and $10.6 million, respectively.
Acquisition-Related Contingent Consideration	Acquisition-Related Contingent Consideration. Acquisition-related contingent consideration consists of our future royalty obligations on future net sales of ICLUSIG 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. Under collaboration and license agreements with shared commercialization efforts, we record our share of the losses from the co-commercialization efforts in collaboration loss sharing on the consolidated statement of operations. For the year ended December 31, 2020, collaboration loss sharing represents our 50% share of the United States loss for commercialization of MONJUVI (tafasitamab) under our agreement with MorphoSys, which is described in Note 6 below.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This guidance applies to all entities and impacts how entities account for credit losses for financial assets measured at amortized cost and available for sale debt securities. ASU 2016-13 requires financial assets measured at amortized cost to be presented at the net amount expected to be collected. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amounts. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. For trade receivables, loans and held-to-maturity debt securities, entities are required to estimate expected credit losses over the lifetime of the asset. For available-for-sale debt securities, entities will be required to recognize an allowance for credit losses rather than an other-than-temporary impairment that reduces the cost basis of the investment. Further, an entity recognizes any improvements in estimated credit losses on its available-for-sale debt securities immediately in earnings. Upon adoption, we assessed each financial asset measured at amortized cost and each available-for-sale debt security held for the impact of the guidance as of January 1, 2020 and noted an insignificant impact due to the minimal credit risk associated with our financial assets subject to ASC 326. As such, it was concluded that a reserve for credit losses was de minimis on the adoption date. Financial assets will continue to be assessed on a quarterly basis in future periods. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement,” which eliminates the required disclosure of the amount of and reason for transfers between Level 1 and Level 2 of the fair value hierarchy. The guidance also eliminates the required disclosure of the entity’s valuation process for Level 3 fair value measurements, however public entities are required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. This guidance is effective for fiscal years beginning after December 15, 2019. We adopted this guidance for the period beginning January 1, 2020 and enhanced our disclosures in Note 3 to the consolidated financial statements to comply with the standard. In August 2018, the FASB issued ASU No. 2018-14, “Compensation – Retirement Benefits – Defined Benefit Plans – General,” an update to Subtopic ASC 715-20. The guidance amended year-end disclosure requirements related to defined benefit pension plans, and does not affect interim disclosures. The guidance is effective for fiscal years ending after December 15, 2020 and is permitted for early adoption. The standard is to be applied on a retrospective basis. Incyte sponsors defined benefit plans for employees located in Europe and have adopted this guidance for the period ending December 31, 2020 as reflected in our disclosures in Note 15. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other – Internal-Use Software,” an update to Subtopic ASC 350-40. The guidance directs accounting for service contracts for cloud computing arrangements to follow guidance within ASC 350-40 to determine capitalization of implementation costs. The guidance is effective for fiscal years beginning after December 15, 2019 and may be applied on either a retrospective or prospective basis. We adopted this guidance for the period beginning January 1, 2020 on a prospective basis. New contracts for development of internal-use software were assessed and no qualifying contracts were identified during the period. We will continue to assess contracts and will disclose material, qualifying contracts if identified in future periods. In November 2018, the FASB issued ASU No. 2018-18, “Collaborative Arrangements (Topic 808): Clarifying the Interaction Between Topic 808 and Topic 606.” The guidance clarifies the interactions between Topic 808 and Topic 606, including clarifications on revenue recognition, unit of account, and reporting disclosure requirements. The guidance is effective for fiscal years beginning after December 15, 2019. We adopted this guidance for the period beginning January 1, 2020 retrospectively to the date of our initial application of ASC 606, and noted that in assessment of our collaborative agreements, there was no material financial statement impact. Our collaborative arrangements and their associated accounting conclusions are described in detail within Note 6 to the consolidated financial statements. 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. Early adoption is permitted for any annual periods for which financial statements have not been issued and interim periods therein. We are currently analyzing the impact of ASU No. 2019-12 on the consolidated financial statements.

Revenues (Tables)

12 Months Ended

Dec. 31, 2020

Revenues

Schedule of disaggregated revenue

As discussed in Note 1, revenues are recognized under guidance within ASC 606 and ASC 808. The following table presents our disaggregated revenue for the periods presented (in thousands):


	For the Years Ended,
	December 31,
	2020		2019		2018
JAKAFI revenues, net	$	1,937,850	$	1,684,968	$	1,386,964
ICLUSIG revenues, net		105,002		89,954		79,936
PEMAZYRE revenues, net		25,884		—		—
Total product revenues, net		2,068,736		1,774,922		1,466,900
JAKAVI product royalty revenues		277,902		225,913		194,694
OLUMIANT product royalty revenues		110,920		80,424		40,086
TABRECTA product royalty revenues		4,144		—		—
Total product royalty revenues		392,966		306,337		234,780
Milestone and contract revenues		205,000		77,500		180,000
Other revenues		—		—		203
Total revenues	$	2,666,702	$	2,158,759	$	1,881,883

Fair value of financial instruments (Tables)

12 Months Ended

Dec. 31, 2020

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
	Amortized		Unrealized		Estimated
	Cost		Gains		Fair Value
December 31, 2020
Debt securities (government)	$	288,199	$	170	$	288,369

December 31, 2019
Debt securities (government)	$	284,795	$	75	$	284,870

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, 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


	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, 2019
Cash and cash equivalents	$	1,832,684	$	—	$	—	$	1,832,684
Debt securities (government)		—		284,870		—		284,870
Long term investments (Note 6)		133,657		—		—		133,657
Total assets	$	1,966,341	$	284,870	$	—	$	2,251,211

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, 2020
Acquisition-related contingent consideration	$	—	$	—	$	266,000	$	266,000
Total liabilities	$	—	$	—	$	266,000	$	266,000


	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, 2019
Acquisition-related contingent consideration	$	—	$	—	$	277,000	$	277,000
Total liabilities	$	—	$	—	$	277,000	$	277,000

Schedule of roll forward of Level 3 liabilities

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


	2020		2019
Balance at January 1,	$	277,000	$	287,001
Contingent consideration earned during the period but not yet paid		(9,595)		(23,012)
Payments made during the period		(24,790)		(6,671)
Change in fair value of contingent consideration		23,385		19,682
Balance at December 31,	$	266,000	$	277,000

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

12 Months Ended

Dec. 31, 2020

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,
	2020		2019		2018
Customer A	20	%	20	%	20	%
Customer B	13	%	13	%	14	%
Customer C	17	%	16	%	15	%
Customer D	11	%	11	%	11	%

Inventory (Tables)

12 Months Ended

Dec. 31, 2020

Inventory

Schedule of inventory

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


	December 31,
	2020		2019
Raw materials	$	1,275	$	1,275
Work-in-process		21,242		8,634
Finished goods		13,456		6,596
		35,973		16,505
Inventories-current		16,425		11,400
Inventories-noncurrent	$	19,548	$	5,105

Property and Equipment, net (Tables)

12 Months Ended

Dec. 31, 2020

Property and Equipment, net

Schedule of property and equipment, net

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


	December 31,
	2020		2019
Office equipment	$	17,880	$	15,303
Laboratory equipment		86,021		70,510
Computer equipment		66,640		59,069
Land		10,671		10,203
Building and leasehold improvements		238,042		208,293
Operating lease right-of-use assets		26,816		19,672
Construction in progress		257,929		116,387
		703,999		499,437
Less accumulated depreciation and amortization		(144,374)		(121,870)
Property and equipment, net	$	559,625	$	377,567

Summary of lease liability


	December 31,		December 31,
	2020		2019
Current
Operating lease liabilities	$	12,674	$	9,343
Finance lease liabilities		2,284		664
Noncurrent
Operating lease liabilities		14,188		11,854
Finance lease liabilities		32,573		31,918
Total lease liabilities	$	61,719	$	53,779

Summary of maturity of our lease liabilities


	December 31,		December 31,
	2020		2019
Current
Operating lease liabilities	$	12,674	$	9,343
Finance lease liabilities		2,284		664
Noncurrent
Operating lease liabilities		14,188		11,854
Finance lease liabilities		32,573		31,918
Total lease liabilities	$	61,719	$	53,779

Intangible Assets and Goodwill (Tables)

12 Months Ended

Dec. 31, 2020

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, 2020

Balance at December 31, 2019

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

98,709

172,291

271,000

77,172

193,828

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):


		2021		2022		2023		2024		2025		Thereafter
Amortization expense	$	21,536	$	21,536	$	21,536	$	21,536	$	21,536	$	64,611

Accrued and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2020

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,
	2020		2019
Royalties	$	106,011	$	73,221
Clinical related costs		115,897		88,710
Sales allowances		73,204		59,924
Construction in progress		22,807		12,732
Operating lease liabilities		12,674		9,343
Other current liabilities		47,811		42,049
Total accrued and other current liabilities	$	378,404	$	285,979

Convertible Notes (Tables)

12 Months Ended

Dec. 31, 2020

Convertible Notes

Schedule of carrying amount and fair value of convertible notes

The carrying amount and fair value of our convertible notes were as follows (in thousands):


	December 31,
	2020				2019
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
1.25% Convertible Senior Notes due 2020	$	—	$	—	$	18,300	$	32,511

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2020

Stockholders' Equity

Schedule of option activity under the 2010 Stock Plan


	Shares Subject to
	Outstanding Options
		Weighted Average
	Shares	Exercise Price
Balance at December 31, 2019	12,632,657	$	81.42
Options granted	2,256,146	$	92.82
Options exercised	(2,230,588)	$	52.78
Options cancelled	(542,927)	$	92.66
Balance at December 31, 2020	12,115,288	$	88.31

Schedule of stock options outstanding and exercisable by exercise price range


	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
$18.97 - $68.62	1,659,221	5.97	$	63.57	1,106,486	$	61.34
$68.82 - $68.97	48,657	7.78		68.95	21,816		68.95
$72.27 - $72.27	1,714,370	7.96		72.27	597,888		72.27
$72.58 - $80.50	1,745,853	6.34		77.24	1,041,346		75.79
$80.56 - $85.01	1,586,213	7.21		84.35	951,572		84.15
$85.34 - $95.34	1,376,900	7.24		93.20	597,552		92.96
$95.54 - $106.47	1,985,715	6.48		101.14	926,623		96.69
$107.69 - $124.00	1,219,175	5.68		113.55	801,950		113.45
$124.03 - $134.38	753,912	6.13		129.23	664,552		129.35
$138.52 - $138.52	25,272	6.25		138.52	23,157		138.52
	12,115,288				6,732,942

Schedule of activity summarized under all stock plans other than options


	Shares Subject to
	Outstanding Awards
	Shares	Grant Date Value
Balance at December 31, 2019	2,602,376	$	79.69
RSUs granted	1,356,377	$	98.11
PSUs granted	92,347	$	106.47
RSUs released	(572,810)	$	86.21
PSUs released	(35,455)	$	78.85
RSUs cancelled	(141,002)	$	86.03
PSUs cancelled	(17,250)	$	68.79
Balance at December 31, 2020	3,284,583	$	87.42

Schedule of share activity


		Shares Available
		for Grant
Balance at December 31, 2019		9,882,122
Options, RSUs and PSUs granted		(5,153,982)
Options, RSUs and PSUs cancelled		787,042
Balance at December 31, 2020		5,515,182

Stock Compensation (Tables)

12 Months Ended

Dec. 31, 2020

Stock Compensation

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


	Employee Stock Options						Employee Stock Purchase Plan
	For the year ended December 31,						For the year ended December 31,
	2020		2019		2018		2020		2019		2018
Average risk-free interest rates	0.80	%	2.27	%	2.61	%	0.17	%	1.82	%	2.62	%
Average expected life (in years)	4.98		5.27		5.26		0.50		0.50		0.50
Volatility	40	%	45	%	45	%	45	%	31	%	46	%
Weighted-average fair value (in dollars)	32.65		32.38		34.20		19.13		14.04		15.80

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes

Income (loss) from operations before income taxes

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


	Year Ended December 31,
	2020		2019		2018
U.S.	$	(16,609)	$	712,486	$	478,050
Non-U.S.		(215,609)		(225,695)		(362,703)
Income (loss) before provision for income taxes	$	(232,218)	$	486,791	$	115,347

Schedule of provision for income taxes

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


	Year Ended December 31,
	2020		2019		2018
Current:
Federal	$	43,595	$	23,526	$	—
State		18,881		11,553		5,010
Foreign		1,353		5,183		1,303
		63,829		40,262		6,313
Deferred:
State		—		(205)		111
Foreign		(350)		(172)		(570)
		(350)		(377)		(459)
Total provision for income taxes	$	63,479	$	39,885	$	5,854

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

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


	Year Ended December 31,
	2020		2019		2018
Provision (benefit) at U.S. federal statutory rate	$	(48,766)	$	102,226	$	24,223
Unbenefited future tax deductions and tax credits		105,923		(73,666)		(51,861)
Excess tax benefits related to share-based compensation		(9,750)		(13,418)		(8,233)
Foreign tax rate differential		30,412		25,419		37,061
Non-deductible officer compensation		7,418		5,213		4,114
Foreign-derived intangible income		(22,830)		(9,153)		—
Other		1,072		3,264		550
Provision for income taxes	$	63,479	$	39,885	$	5,854

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,
	2020		2019
Deferred tax assets:
Net operating loss carry forwards	$	128,088	$	102,001
Federal and state research credits		305,099		400,550
Capitalized research and development		43,806		46,188
Deferred revenue and accruals		27,467		13,609
Non-cash compensation		75,867		67,345
Acquisition-related contingent consideration		32,658		31,956
Intangibles, net		289,848		92,806
Long term investments		25,968		14,899
Other		26,303		21,885
Total gross deferred tax assets		955,104		791,239
Less valuation allowance for deferred tax assets		(930,209)		(770,497)
Net deferred tax assets	$	24,895	$	20,742

Deferred tax liabilities:
Property and equipment	$	(22,841)	$	(19,095)
Total gross deferred tax liabilities		(22,841)		(19,095)
Net deferred tax assets	$	2,054	$	1,647

Schedule of operating loss and tax credit carryforwards


	Amount		Expiring if not utilized
Net operating loss carryforwards
State	$	361,890	2021 through 2039; indefinite
Foreign		1,250,048	2021 through 2027
Research and development credit carryforwards
Federal		150,598	2036 through 2040
State		23,986	2021 through 2039; indefinite
Orphan drug tax credit carryforwards		162,653	2035 through 2040

Unrecognized tax benefits

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


	Year Ended December 31,
	2020		2019
Balance at beginning of year	$	24,251	$	22,395
Additions related to prior periods tax positions		3,953		726
Reductions related to prior periods tax positions		(216)		(82)
Additions related to current period tax positions		4,119		1,835
Settlements		(201)		—
Reductions due to lapse of applicable statute of limitations		(397)		(557)
Currency translation adjustment		88		(66)
Balance at end of year	$	31,597	$	24,251

Net Income (Loss) Per Share (Tables)

12 Months Ended

Dec. 31, 2020

Net Income (Loss) Per Share

Schedule of calculation of net income (loss) per share


	Year Ended December 31,
(in thousands, except per share data)	2020		2019		2018
Basic Net Income (Loss) Per Share
Basic net income (loss)	$	(295,697)	$	446,906	$	109,493
Weighted average common shares outstanding		218,073		214,913		212,383

Basic net income (loss) per share	$	(1.36)	$	2.08	$	0.52

Diluted Net Income (Loss) Per Share
Diluted net income (loss)	$	(295,697)	$	446,906	$	109,493
Weighted average common shares outstanding		218,073		214,913		212,383

Dilutive stock options and awards		—		2,744		3,252

Weighted average shares used to compute diluted net income (loss) per share		218,073		217,657		215,635

Diluted net income (loss) per share	$	(1.36)	$	2.05	$	0.51

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

The following potential common shares were excluded from the calculation as their effect would be anti-dilutive:


	2020	2019	2018
Outstanding stock options and awards	15,274,871	9,349,889	8,255,992
Common shares issuable upon conversion of the 2020 Notes	—	368,939	368,939
Total potential common shares excluded from diluted net income (loss) per share computation	15,274,871	9,718,828	8,624,931

Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2020

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,
	2020		2019
Benefit obligation, beginning of year	$	62,770	$	46,038
Employer service cost		6,047		5,195
Interest cost		193		345
Plan participants' contributions		2,237		1,613
Actuarial loss		9,372		6,672
Transfer of benefits net of payments from fund		11,057		2,184
Expenses paid from assets		(88)		(61)
Translation loss		6,371		784
Benefit obligation, end of year		97,959		62,770

Fair value of plan assets, beginning of year		38,662		30,368
Actual return on plan assets		260		132
Employer contributions		5,413		3,910
Plan participants' contributions		2,237		1,613
Transfer of benefits net of payments from fund		11,057		2,184
Expenses paid from assets		(88)		(61)
Translation gain		3,724		516
Fair value of plan assets, end of year		61,265		38,662

Unfunded liability, end of year	$	36,694	$	24,108

Schedule of net periodic benefit cost

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


	Year Ended December 31,
	2020		2019		2018
Service cost	$	6,047	$	5,195	$	4,450
Interest cost		193		345		278
Expected return on plan assets		(126)		(241)		(195)
Amortization of prior service cost		216		214		179
Amortization of actuarial losses		667		247		265
Net periodic benefit cost	$	6,997	$	5,760	$	4,977

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,
	2020		2019		2018
Pension liability, beginning of year	$	15,468	$	9,146	$	8,450
Net prior service costs		(216)		(214)		(179)
Net loss		8,579		6,536		875
Pension liability, end of year	$	23,831	$	15,468	$	9,146

Schedule of expected benefit payments

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


2021	$	3,315
2022		3,413
2023		3,474
2024		3,506
2025		3,972
2026-2030		22,498
Total	$	40,178

Interim Consolidated Financial Information (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2020

Interim Consolidated Financial Information (Unaudited)

Schedule of Interim Consolidated Financial Information


	Fiscal 2020 Quarter Ended
(in thousands, except per share data)	March 31,		June 30,		September 30,		December 31,
Revenues⁽¹⁾	$	568,507	$	688,043	$	620,643	$	789,509
Net income (loss)	$	(720,642)	$	290,298	$	(15,203)	$	149,850
Basic net income (loss) per share	$	(3.33)	$	1.33	$	(0.07)	$	0.68
Diluted net income (loss) per share	$	(3.33)	$	1.32	$	(0.07)	$	0.68
Shares used in computation of basic net income (loss) per share		216,721		217,549		218,784		219,239
Shares used in computation of diluted net income (loss) per share		216,721		220,434		218,784		221,228


	Fiscal 2019 Quarter Ended
(in thousands, except per share data)	March 31,		June 30,		September 30,		December 31,
Revenues⁽²⁾	$	497,857	$	529,932	$	551,581	$	579,389
Net income	$	102,312	$	105,318	$	128,271	$	111,005
Basic net income per share	$	0.48	$	0.49	$	0.60	$	0.51
Diluted net income per share	$	0.47	$	0.48	$	0.59	$	0.51
Shares used in computation of basic net income per share		214,065		214,620		215,199		215,770
Shares used in computation of diluted net income per share		217,061		217,483		217,791		218,542

(1)

(2)

$20.0 million, $17.5 million and $0.0 million, respectively, of milestone and contract revenues relating to these agreements.

Organization and Summary of Significant Accounting Policies (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2020 USD ($) item segment	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Concentrations of Credit Risk
Number of Operating Segments \| segment	1
Accounts Receivable
Allowance for doubtful accounts	$ 0	$ 0
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	$ 28,900	$ 15,300	$ 10,600
MorphoSys AG
Variable Interest Entities
Collaboration Agreement Profit Loss Sharing Ratio	50.00%
JAKAFI
Inventory
Shelf life for finished goods inventory, maximum	36 months
ICLUSIG
Inventory
Shelf life for finished goods inventory, maximum	36 months
Variable Interest Entities
Amortization period	12 years 6 months
PEMAZYRE
Inventory
Period of lower average per unit cost of materials	48 months
Shelf life for finished goods inventory, maximum	36 months

Revenues (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
Revenues (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Revenues
Total revenues	$ 789,509	$ 620,643	$ 688,043	$ 568,507	$ 579,389	$ 551,581	$ 529,932	$ 497,857	$ 2,666,702	$ 2,158,759	$ 1,881,883
Product revenues, net
Revenues
Total revenues	559,500	522,300	500,300	486,700	490,800	454,000	433,900	396,200	2,068,736	1,774,922	1,466,900
JAKAFI
Revenues
Total revenues									1,937,850	1,684,968	1,386,964
ICLUSIG
Revenues
Total revenues									105,002	89,954	79,936
PEMAZYRE
Revenues
Total revenues									25,884
Product royalty revenues
Revenues
Total revenues	119,900	98,400	92,800	81,800	88,600	80,100	76,000	61,600	392,966	306,337	234,780
JAKAVI Royalty Revenues
Revenues
Total revenues									277,902	225,913	194,694
OLUMIANT Royalty Revenues
Revenues
Total revenues									110,920	80,424	40,086
TABRECTA Royalty Revenues
Revenues
Total revenues									4,144
Milestone and contract revenues
Revenues
Total revenues	$ 110,000	$ 0	$ 95,000	$ 0	$ 0	$ 17,500	$ 20,000	$ 40,000	$ 205,000	$ 77,500	180,000
Other revenues
Revenues
Total revenues											$ 203

Fair Value of Financial Instruments - Marketable securities portfolio (Details) - Debt securities (government) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Summary of marketable security portfolio
Amortized Cost	$ 288,199	$ 284,795
Net Unrealized Gains	170	75
Estimated Fair Value	$ 288,369	$ 284,870
Minimum
Summary of marketable security portfolio
Contractual maturity dates	12 months
Maximum
Summary of marketable security portfolio
Contractual maturity dates	18 months

Fair Value of Financial Instruments - Fair value on a recurring basis (Details) $ in Thousands		12 Months Ended
	Jun. 01, 2016	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Fair value of financial instruments
Long term investments (Note 6)		$ 222,301	$ 133,657
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		$ 9,600	23,000
Level 3 \| Fair Value
Roll forward of Level 3 liabilities
Balance at the beginning of the period		277,000	287,001
Contingent consideration earned during the period but not yet paid		(9,595)	(23,012)
Payments made during the period		(24,790)	(6,671)
Change in fair value of contingent consideration		23,385	19,682
Balance at the end of the period		266,000	277,000
Recurring \| Fair Value
Fair value of financial instruments
Cash and cash equivalents		1,513,008	1,832,684
Debt securities (government)		288,369	284,870
Long term investments (Note 6)		222,301	133,657
Total assets		2,023,678	2,251,211
Acquisition-related contingent consideration		266,000	277,000
Total liabilities		266,000	277,000
Recurring \| Level 1
Fair value of financial instruments
Cash and cash equivalents		1,513,008	1,832,684
Long term investments (Note 6)		222,301	133,657
Total assets		1,735,309	1,966,341
Recurring \| Level 2
Fair value of financial instruments
Debt securities (government)		288,369	284,870
Total assets		288,369	284,870
Recurring \| Level 3
Fair value of financial instruments
Acquisition-related contingent consideration		266,000	277,000
Total liabilities		$ 266,000	$ 277,000

Concentrations of Credit Risk and Current Expected Credit Losses (Details)	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net Product Revenues \| Customer Concentration Risk \| Customer A
Concentration of risk
Percentage of concentration risk	20.00%	20.00%	20.00%
Net Product Revenues \| Customer Concentration Risk \| Customer B
Concentration of risk
Percentage of concentration risk	13.00%	13.00%	14.00%
Net Product Revenues \| Customer Concentration Risk \| Customer C
Concentration of risk
Percentage of concentration risk	17.00%	16.00%	15.00%
Net Product Revenues \| Customer Concentration Risk \| Customer D
Concentration of risk
Percentage of concentration risk	11.00%	11.00%	11.00%
Accounts Receivable \| Credit Concentration Risk \| Collaboration Partner A, B, C and D
Concentration of risk
Percentage of concentration risk	42.00%	30.00%
Accounts Receivable \| Credit Concentration Risk \| Customer A, B, C and D
Concentration of risk
Percentage of concentration risk	29.00%	39.00%

Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Inventory
Raw materials	$ 1,275	$ 1,275
Work-in-process	21,242	8,634
Finished goods	13,456	6,596
Total inventories	35,973	16,505
Inventories - current	16,425	11,400
Inventories-noncurrent	$ 19,548	$ 5,105

License Agreements - Novartis (Details) - USD ($) $ in Thousands	1 Months Ended					3 Months Ended								12 Months Ended			134 Months Ended
	Apr. 30, 2016	Sep. 30, 2014	Jan. 31, 2010	Dec. 31, 2009	Nov. 30, 2009	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2020
License agreements
Revenues						$ 789,509	$ 620,643	$ 688,043	$ 568,507	$ 579,389	$ 551,581	$ 529,932	$ 497,857	$ 2,666,702	$ 2,158,759	$ 1,881,883
U.S.
License agreements
Revenues														2,600,000	2,100,000	1,800,000
Europe
License agreements
Revenues														105,000	90,000	79,900
JAKAFI
License agreements
Revenues														1,937,850	1,684,968	1,386,964
Novartis
License agreements
Upfront and immediate milestone payment to be received under license agreement					$ 210,000
Upfront payment received under license agreement				$ 150,000
Immediate milestone payment received under license agreement			$ 60,000
Revenues														170,000	0	60,000
Reimbursable costs included in accounts receivable						200				400				200	400		$ 200
Research and development expenses reimbursed														300	1,500	3,200
Novartis \| Pre-specified Events \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement					1,200,000
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 \| Sales and Commercial Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone																	200,000
Novartis \| Sales and Commercial Milestones \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement					$ 500,000
Novartis \| TABRECTA
License agreements
Revenues														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														89,900	77,600	63,000
Royalties payable						$ 96,400				$ 50,200				96,400	50,200		$ 96,400
Novartis \| JAKAVI
License agreements
Revenues														$ 277,900	$ 225,900	194,700
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 \| Regulatory Milestones \| Europe
License agreements
Amount recognized and received for the achievement of a predefined milestone		$ 60,000
Novartis \| JAKAVI \| Sales and Commercial Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone														$ 80,000		60,000
Revenues														$ 1,200,000		$ 900,000

License Agreements - Lilly (Details) - USD ($) $ in Thousands	1 Months Ended				3 Months Ended								12 Months Ended			133 Months Ended
	May 31, 2019	Mar. 31, 2016	Jul. 31, 2010	Dec. 31, 2009	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2020
License agreements
Research and Development Expense													$ 2,215,942	$ 1,154,111	$ 1,197,957
Revenues					$ 789,509	$ 620,643	$ 688,043	$ 568,507	$ 579,389	$ 551,581	$ 529,932	$ 497,857	2,666,702	2,158,759	1,881,883
Europe
License agreements
Revenues													105,000	90,000	79,900
Product royalty revenues
License agreements
Revenues					$ 119,900	$ 98,400	$ 92,800	$ 81,800	$ 88,600	$ 80,100	$ 76,000	$ 61,600	392,966	306,337	234,780
Eli Lilly
License agreements
Upfront payment received under license agreement				$ 90,000
Revenues													30,000	0	120,000
Eli Lilly \| Non-U.S.
License agreements
Revenues													$ 110,900	80,400	40,100
Eli Lilly \| Phase IIB
License agreements
Associated future global development costs from the initiation of a Phase IIb trial, if elected to co-develop (as a percentage)			30.00%	30.00%									30.00%
Research and Development Expense													$ 0	$ 0	68,600
Eli Lilly \| Pre-specified Events \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement				$ 665,000
Eli Lilly \| Development Milestones
License agreements
Amount recognized and received for the achievement of a predefined milestone															20,000	$ 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															$ 100,000	$ 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 \| Sales and Commercial Milestones \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement				$ 150,000
Royalty payments on future global net sales (as a percent)													20.00%
Eli Lilly \| GVHD
License agreements
Upfront payment under license agreement		$ 35,000
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 - Agenus (Details) $ / shares in Units, $ in Thousands, shares in Millions			1 Months Ended			3 Months Ended	6 Months Ended	12 Months Ended
	Feb. 14, 2017 USD ($) $ / shares	Feb. 01, 2017 USD ($) $ / shares shares	Feb. 28, 2017 USD ($) item	Nov. 30, 2015 item	Jan. 31, 2015 USD ($) item	Sep. 30, 2020 USD ($) $ / shares shares	Jun. 30, 2020 USD ($) $ / shares shares	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
License agreements
Long term investments								$ 222,301	$ 133,657
Unrealized gain (loss) on long term investments								10,426	34,458	$ (44,093)
Research and development expense								$ 2,215,942	1,154,111	1,197,957
Agenus
License agreements
Number of program targets \| item			4	3	4
Royalty payments on future global net sales (as a percent)								15.00%
Research and development expense								$ 0	1,500	4,600
Agenus \| Accrued and other liabilities
License agreements
Accrued and other liabilities								$ 500	1,600
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%
Additional milestone payments under the license agreement			$ 510,000
Agenus \| Development Milestones
License agreements
Upfront payment under license agreement										5,000	$ 20,000
Agenus
License agreements
Total consideration paid					$ 60,000
Long term investments								$ 44,700	72,300
Ownership percentage (as a percent)	0.18%					0.07%	0.098%
Shares divested (in shares) \| shares						2.5	1.2
Gross proceeds from sale of stock						$ 12,700	$ 4,500
Unrealized gain (loss) on long term investments								$ 10,300	$ 30,000	(15,600)
Agenus \| Minimum
License agreements
Share price (per share) \| $ / shares						$ 4.28	$ 3.57
Agenus \| Maximum
License agreements
Share price (per share) \| $ / shares						$ 5.25	$ 4.21
Agenus \| Stock purchase agreement
License agreements
Total consideration paid	$ 60,000
Purchase of common stock under Stock Purchase Agreement (in shares ) \| shares		10.0
Purchase price of common stock		$ 60,000
Per share price \| $ / shares	$ 4.40	$ 6.00
Discount for lack of marketability	$ 4,500
Fair value of shares on the issuance date	$ 39,500
Long term investments										$ 39,500
Research and development expense											$ 20,500

License Agreements - Merus (Details) $ / shares in Units, $ in Thousands		1 Months Ended				12 Months Ended
	Jan. 23, 2017 USD ($) $ / shares	Jan. 31, 2021 USD ($) $ / shares shares	Feb. 28, 2017 USD ($)	Jan. 31, 2017 USD ($) item	Dec. 31, 2016 USD ($) $ / shares shares	Dec. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)
License agreements
Long term investments						$ 222,301	$ 133,657
Research and development expense						2,215,942	1,154,111	$ 1,197,957
Unrealized gain (loss) on long term investments						10,426	34,458	(44,093)
Total revenues						2,666,702	2,158,759	1,881,883
Net income (loss)						(295,697)	446,906	109,493
Current assets						2,359,894	2,481,488
Current liabilities						631,195	513,340
Merus
License agreements
Number of independent programs \| item				11
Upfront payment under license agreement			$ 120,000
Research and development expense						8,900	7,200	10,300
Merus \| Accrued and other liabilities
License agreements
Accrued and other liabilities						1,600	1,600
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 \| Minimum \| Non-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 \| Non-U.S.
License agreements
Royalty payments on future global net sales (as a percent)				10.00%
Merus \| Maximum \| Development and Regulatory Milestones
License agreements
Additional milestone payments under the license agreement				$ 100,000
Merus \| Maximum \| Sales and Commercial Milestones
License agreements
Additional milestone payments under the license agreement				$ 250,000
Merus
License agreements
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%
Fair market value of our long term investments						$ 56,100	45,100
Ownership percentage (as a percent)						11.00%
Unrealized gain (loss) on long term investments						$ 11,000	$ 300	$ (17,300)
Merus \| IPO \| Subsequent Event
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	$ 24.50				$ 25.00
Discount for lack of marketability	$ 5,600
Fair value of shares on the issuance date	72,800
Total consideration paid	$ 80,000
Long term investments									$ 72,800
Research and development expense									$ 7,200

License Agreements - Calithera (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions		1 Months Ended	12 Months Ended
	Jan. 30, 2017	Jan. 31, 2017	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2020	Jan. 01, 2017
License agreements
Long term investments			$ 222,301	$ 133,657
Research and development expense			2,215,942	1,154,111	$ 1,197,957
Unrealized gain (loss) on long term investments			10,426	34,458	(44,093)
Calithera
License agreements
Funding of future development costs (as a percent)		70.00%
Upfront payment made under license agreement		$ 45,000
Potential milestone payments to be made with profit sharing in effect		430,000
Potential milestone payments to be made with profit sharing terminated		$ 750,000					$ 738,000
Milestone payment made under license agreement						$ 12,000
Research and development expense			8,900	17,900	12,000
Calithera \| Accrued and other liabilities
License agreements
Accrued and other liabilities			600	1,100
Calithera \| U.S.
License agreements
Percentage of profit (losses)		60.00%
Calithera
License agreements
Total consideration paid	$ 53,000	$ 53,000
Long term investments			$ 8,400	9,800
Ownership percentage (as a percent)			2.00%
Calithera \| Other Comprehensive Income
License agreements
Unrealized gain (loss) on long term investments			$ 1,400	$ 2,900	$ (7,500)
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	$ 6.75							$ 4.65
Fair market value of our long term investments	$ 11,600
Stock purchase price		$ 8,000
Long term investments						11,600
Research and development expense						$ 41,400
Calithera \| Collaboration and license agreement
License agreements
Upfront license fees		$ 45,000

License Agreements - MacroGenics (Details) - USD ($) $ in Thousands	1 Months Ended			12 Months Ended
	Nov. 30, 2018	Sep. 30, 2018	Dec. 31, 2017	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
License agreements
Research and development				$ 2,215,942	$ 1,154,111	$ 1,197,957
MacroGenics
License agreements
Upfront payment under license agreement			$ 150,000
Research and development				59,000	51,100	$ 35,400
Milestone payment made under license agreement	$ 5,000	$ 10,000		40,000
MacroGenics \| Accrued and other liabilities
License agreements
Accrued and other liabilities				$ 100	$ 1,000
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			$ 420,000
Sales and Commercial Milestones \| Maximum \| MacroGenics
License agreements
Additional milestone payments under the license agreement			$ 330,000

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, 2020 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Feb. 28, 2018 USD ($)	Jan. 08, 2018 $ / shares
License agreements
Long term investments		$ 222,301	$ 133,657
Research and development expense		2,215,942	1,154,111	$ 1,197,957
Unrealized gain (loss) on long term investments		10,426	34,458	(44,093)
Syros Pharmaceuticals, Inc.
License agreements
Number of program targets \| item	7
Upfront payment under license agreement	$ 10,000
Fair value of shares on the issuance date		$ 10,200	6,500
Ownership percentage (as a percent)		2.00%
Unrealized gain (loss) on long term investments		$ 3,700	$ 1,300	$ (3,700)
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					$ 9.77
Lock-up period	12 months
Discount for lack of marketability	$ 100
Fair value of shares on the issuance date	7,600
Long term investments	7,600
Research and development expense	$ 2,400
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
Long term investments					$ 1,400
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. \| Sales and Commercial Milestones \| Maximum
License agreements
Additional milestone payments under the license agreement	$ 65,000

License Agreements - Innovent (Details) - Innovent - USD ($) $ in Millions	1 Months Ended		12 Months Ended
	Jan. 31, 2019	Dec. 31, 2018	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
License agreements
Upfront and immediate milestone payment to be received under license agreement	$ 40.0
Research and development expenses reimbursed			$ 5.4	$ 6.2
Reimbursable costs included in accounts receivable			1.2	3.0
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		$ 129.0
Development and Regulatory Milestones \| PEMAZYRE
License agreements
Amount recognized and received for the achievement of a predefined milestone			$ 5.0
Sales and Commercial Milestones \| Maximum
License agreements
Upfront and immediate milestone payment to be received under license agreement					$ 202.5

License Agreements - Zai Lab (Details) - Zai Lab Ltd - USD ($) $ in Millions	1 Months Ended	12 Months Ended
	Aug. 31, 2019	Dec. 31, 2020	Dec. 31, 2019
Upfront and immediate milestone payment to be received under license agreement	$ 17.5
Research and development expenses reimbursed		$ 0.2
Reimbursable costs included in accounts receivable		$ 0.6	$ 0.5
Development and Regulatory Milestones \| Maximum
Upfront payment under license agreement	22.5
Sales and Commercial Milestones \| Maximum
Upfront payment under license agreement	$ 37.5

License Agreements - MorphoSys (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended		12 Months Ended
	Mar. 03, 2020	Jan. 31, 2020	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Long term investments				$ 222,301	$ 133,657
Research and development expense				2,215,942	1,154,111	$ 1,197,957
Unrealized gain (loss) on long term investments				10,426	$ 34,458	$ (44,093)
Collaboration loss sharing				42,801
ADSs
Equity Method Investment, Ownership Percentage		0.25%
Equity Method Investment, Aggregate Cost	$ 150,000	$ 150,000
Per share price	$ 27.65	$ 41.33
Lock-up period		18 months
Discount for lack of marketability	$ 4,900
Fair value of shares	95,500
Long term investments	95,500			$ 102,900
Research and development expense	$ 54,500
MorphoSys AG
Upfront payment under license agreement			$ 750,000
Equity Method Investment, Ownership Percentage				0.03%
Research and development expense				$ 88,200
Unrealized gain (loss) on long term investments				$ 7,400
Profit (loss) sharing ratio				50.00%
Collaboration loss sharing				$ 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				$ 54,200
MorphoSys AG \| Development and Regulatory Milestones \| Maximum
Additional milestone payments under the license agreement		$ 740,000
MorphoSys AG \| Sales and Commercial 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%
MorphoSys AG \| Incyte
Funding of future development costs (as a percent)				0.55%

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
Sales and Commercial Milestones
Additional milestone payments under the license agreement	$ 130.0

Property and Equipment, net - Property and equipment, net (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Property and equipment, net
Property and Equipment, gross	$ 703,999	$ 499,437
Less accumulated depreciation and amortization	(144,374)	(121,870)
Property and Equipment, net	559,625	377,567
Depreciation expense including amortization expense of leasehold improvements	29,600	32,100	$ 32,300
Office equipment
Property and equipment, net
Property and Equipment, gross	17,880	15,303
Laboratory equipment
Property and equipment, net
Property and Equipment, gross	86,021	70,510
Computer equipment
Property and equipment, net
Property and Equipment, gross	66,640	59,069
Land
Property and equipment, net
Property and Equipment, gross	10,671	10,203
Building and leasehold improvements
Property and equipment, net
Property and Equipment, gross	238,042	208,293
Operating lease right-of-use assets
Property and equipment, net
Property and Equipment, gross	26,816	19,672
Construction in Progress
Property and equipment, net
Property and Equipment, gross	$ 257,929	$ 116,387

Property and Equipment, net - Buildings and construction (Details) $ in Thousands	1 Months Ended	12 Months Ended
	Jul. 31, 2018 USD ($)	Dec. 31, 2020 USD ($) ft²	Dec. 31, 2019 USD ($)	Jun. 30, 2019 USD ($)	Feb. 28, 2018 ft²
Property and equipment, net
Financing lease liabilities		$ 34,857
Finance lease right-of-use assets, net		28,451	$ 29,058
Costs for architectural and engineering studies and initial ground preparation		$ 703,999	$ 499,437
Office Building in Wilmington, Delaware
Property and equipment, net
Square footage \| ft²		200,000
Capitalized construction costs		$ 79,500
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
Capitalized construction costs		$ 17,900
Land in Y-PARC, Switzerland's largest technology park, Yverdon
Property and equipment, net
Capitalized construction costs		$ 167,400
Purchase price	$ 4,800

Property and Equipment, net - Lease and maturity of lease liabilities (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019
Lease liabilities
Operating lease liabilities, current	$ 12,674	$ 9,343
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	Accrued Liabilities, Current	Accrued Liabilities, Current
Finance lease liabilities, current	$ 2,284	$ 664
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List]	Finance lease liabilities, current	Finance lease liabilities, current
Operating lease liabilities, noncurrent	$ 14,188	$ 11,854
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Other Liabilities, Noncurrent	Other Liabilities, Noncurrent
Finance lease liabilities, noncurrent	$ 32,573	$ 31,918
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	Finance lease liabilities, noncurrent	Finance lease liabilities, noncurrent
Total lease liabilities	$ 61,719	$ 53,779
Cash paid for operating lease liabilities	12,100	11,900
Cash paid for financing lease liabilities in financing cash flows	836	$ 822
Maturity of our operating lease liabilities
2020	14,091
2021	6,948
2022	3,714
2023	906
2024	761
After 2024	4,118
Total lease cash payments	30,538
Less: discount	3,676
Present value of lease liabilities	26,862
Maturity of our finance lease liabilities
2020	3,652
2021	3,448
2022	3,341
2023	2,756
2024	2,772
After 2024	29,292
Total lease cash payments	45,261
Less: discount	10,404
Present value of lease liabilities	$ 34,857
Weighted average lease term, finance leases	14 years 2 months 12 days	15 years 9 months 18 days
Weighted average lease term, operating leases	4 years 8 months 12 days	3 years
Weighted average discount rate, finance leases	3.70%	4.50%
Weighted average discount rate, operating leases	4.70%	3.60%
Expense related to our operating leases	$ 12,500	$ 12,700
Amortization on our finance lease right-of-use assets	2,600	1,700
Interest expense on finance lease liabilities	1,200	600
Cost of short term leases	$ 1,900	$ 1,100

Intangible Assets and Goodwill (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Intangible Assets, Net
Amortization expense	$ 21,500	$ 21,500	$ 21,500
Amortization Expense
2021	21,536
2022	21,536
2023	21,536
2024	21,536
2025	21,536
Thereafter	64,611
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	98,709	77,172
Net Carrying Amount	$ 172,291	$ 193,828

Accrued and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Accrued and Other Current Liabilities
Royalties	$ 106,011	$ 73,221
Clinical related costs	115,897	88,710
Sales allowances	73,204	59,924
Construction in progress	22,807	12,732
Operating lease liabilities	12,674	9,343
Other current liabilities	47,811	42,049
Total accrued and other current liabilities	$ 378,404	$ 285,979

Convertible Notes - Carrying Amount and Fair Value (Details) - Convertible Senior Notes 1.25 Percent Due 2020 - USD ($) $ in Thousands	Dec. 31, 2020	Dec. 31, 2019
Convertible Notes
Interest rate of debt (as a percent)	1.25%	1.25%
Carrying Amount
Convertible Notes
Convertible senior notes		$ 18,300
Fair Value
Convertible Notes
Convertible senior notes		$ 32,511

Convertible Notes - Narrative (Details) - Convertible Senior Notes 1.25 Percent Due 2020	12 Months Ended
	Dec. 31, 2020 item $ / shares	Dec. 31, 2019
Convertible Notes
Interest rate of debt (as a percent)	1.25%	1.25%
Number of days within 30 consecutive trading days in which the price of the entity's common stock must exceed the conversion price for the notes to be converted	20 days
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be convertible	30 days
Percentage of the closing sales price of common stock that the conversion price must exceed in order for the notes to be convertible (as a percent)	130.00%
Number of consecutive business days immediately after any five consecutive trading day period during the note measurement period	5
Number of consecutive trading days before five consecutive business days during the note measurement period	5
Conversion ratio, principal amount of note	0.193207
Conversion ratio, principal amount, denominator	1,000
Percentage of the trading price to the product of the last reported sale price of the common stock and the conversion rate, maximum (as a percent)	98.00%
Conversion price per share (in dollars per share) \| $ / shares	$ 51.76

Stockholders' Equity - Preferred stock and common stock (Details) - shares	Dec. 31, 2020	Dec. 31, 2019
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

Stockholders' Equity - Stock compensation plans (Details) - shares	1 Months Ended	6 Months Ended	12 Months Ended
	Jul. 31, 2016	Jun. 30, 2016	Dec. 31, 2020	Apr. 30, 2019	May 31, 2018
Stock Compensation Plans
Shares reserved for future issuance related to stock plans			6,460,660
2010 Stock Plan
Stock Compensation Plans
Shares reserved for future issuance related to stock plans				44,453,475	36,753,475
Stock Options
Stock Compensation Plans
Expiration period	10 years	7 years
Stock Options \| 2010 Stock Plan \| Non-employee Director
Stock Compensation Plans
Expiration period			10 years

Stockholders' Equity - Option activity (Details) - Stock Options - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	6 Months Ended	12 Months Ended
	Jul. 31, 2016	Jun. 30, 2016	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Shares Subject to Outstanding Options, Shares
Outstanding at the beginning of the period (in shares)			12,632,657
Options granted (in shares)			2,256,146
Options exercised (in shares)			(2,230,588)
Options cancelled (in shares)			(542,927)
Outstanding at the end of the period (in shares)			12,115,288	12,632,657
Shares Subject to Outstanding Options, Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)			$ 81.42
Options granted (in dollars per share)			92.82
Options exercised (in dollars per share)			52.78
Options cancelled (in dollars per share)			92.66
Outstanding at the end of the period (in dollars per share)			$ 88.31	$ 81.42
Termination period	10 years	7 years
Vesting period	4 years	3 years
Stock option, other disclosures
Options exercisable and vested (in shares)			6,732,942	6,896,492	7,194,171
Intrinsic value of options exercised			$ 87.5	$ 113.8	$ 73.9
Intrinsic value of options outstanding			86.3
Intrinsic value of vested options			$ 84.3
Vesting after one year
Shares Subject to Outstanding Options, Weighted Average Exercise Price
Vesting period	1 year	1 year
Vesting Percentage	25.00%	33.00%
Remainder vesting
Shares Subject to Outstanding Options, Weighted Average Exercise Price
Vesting period	36 months	24 months

Stockholders' Equity - Stock options outstanding (Details)	12 Months Ended
	Dec. 31, 2020 $ / shares shares
Options Outstanding
Number Outstanding (in shares) \| shares	12,115,288
Options Exercisable
Number Exercisable (in shares) \| shares	6,732,942
Range of Exercise Prices $18.97 - $68.62
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	$ 18.97
Exercise price, upper range limit (in dollars per share)	$ 68.62
Options Outstanding
Number Outstanding (in shares) \| shares	1,659,221
Weighted Average Remaining Contractual Life	5 years 11 months 19 days
Weighted Average Exercise Price (in dollars per share)	$ 63.57
Options Exercisable
Number Exercisable (in shares) \| shares	1,106,486
Weighted Average Exercise Price (in dollars per share)	$ 61.34
Range of Exercise Prices $68.82 - $68.97
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	68.82
Exercise price, upper range limit (in dollars per share)	$ 68.97
Options Outstanding
Number Outstanding (in shares) \| shares	48,657
Weighted Average Remaining Contractual Life	7 years 9 months 10 days
Weighted Average Exercise Price (in dollars per share)	$ 68.95
Options Exercisable
Number Exercisable (in shares) \| shares	21,816
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	1,714,370
Weighted Average Remaining Contractual Life	7 years 11 months 15 days
Weighted Average Exercise Price (in dollars per share)	$ 72.27
Options Exercisable
Number Exercisable (in shares) \| shares	597,888
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	1,745,853
Weighted Average Remaining Contractual Life	6 years 4 months 2 days
Weighted Average Exercise Price (in dollars per share)	$ 77.24
Options Exercisable
Number Exercisable (in shares) \| shares	1,041,346
Weighted Average Exercise Price (in dollars per share)	$ 75.79
Range of Exercise Prices $80.56 - $85.01
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	80.56
Exercise price, upper range limit (in dollars per share)	$ 85.01
Options Outstanding
Number Outstanding (in shares) \| shares	1,586,213
Weighted Average Remaining Contractual Life	7 years 2 months 15 days
Weighted Average Exercise Price (in dollars per share)	$ 84.35
Options Exercisable
Number Exercisable (in shares) \| shares	951,572
Weighted Average Exercise Price (in dollars per share)	$ 84.15
Range of Exercise Prices $85.34 - $95.34
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	85.34
Exercise price, upper range limit (in dollars per share)	$ 95.34
Options Outstanding
Number Outstanding (in shares) \| shares	1,376,900
Weighted Average Remaining Contractual Life	7 years 2 months 26 days
Weighted Average Exercise Price (in dollars per share)	$ 93.20
Options Exercisable
Number Exercisable (in shares) \| shares	597,552
Weighted Average Exercise Price (in dollars per share)	$ 92.96
Range of Exercise Prices $95.54 - $106.47
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	95.54
Exercise price, upper range limit (in dollars per share)	$ 106.47
Options Outstanding
Number Outstanding (in shares) \| shares	1,985,715
Weighted Average Remaining Contractual Life	6 years 5 months 23 days
Weighted Average Exercise Price (in dollars per share)	$ 101.14
Options Exercisable
Number Exercisable (in shares) \| shares	926,623
Weighted Average Exercise Price (in dollars per share)	$ 96.69
Range of Exercise Prices $107.69 - $124.00
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	107.69
Exercise price, upper range limit (in dollars per share)	$ 124.00
Options Outstanding
Number Outstanding (in shares) \| shares	1,219,175
Weighted Average Remaining Contractual Life	5 years 8 months 4 days
Weighted Average Exercise Price (in dollars per share)	$ 113.55
Options Exercisable
Number Exercisable (in shares) \| shares	801,950
Weighted Average Exercise Price (in dollars per share)	$ 113.45
Range of Exercise Prices $124.03 - $134.38
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	124.03
Exercise price, upper range limit (in dollars per share)	$ 134.38
Options Outstanding
Number Outstanding (in shares) \| shares	753,912
Weighted Average Remaining Contractual Life	6 years 1 month 17 days
Weighted Average Exercise Price (in dollars per share)	$ 129.23
Options Exercisable
Number Exercisable (in shares) \| shares	664,552
Weighted Average Exercise Price (in dollars per share)	$ 129.35
Range of Exercise Prices $138.52 - $138.52
Stock options outstanding
Exercise price, lower range limit (in dollars per share)	138.52
Exercise price, upper range limit (in dollars per share)	$ 138.52
Options Outstanding
Number Outstanding (in shares) \| shares	25,272
Weighted Average Remaining Contractual Life	6 years 3 months
Weighted Average Exercise Price (in dollars per share)	$ 138.52
Options Exercisable
Number Exercisable (in shares) \| shares	23,157
Weighted Average Exercise Price (in dollars per share)	$ 138.52

Stockholders' Equity - RSU and PSU Narrative (Details) - USD ($) $ in Millions	1 Months Ended							6 Months Ended	12 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Apr. 30, 2019	Mar. 31, 2019	Jul. 31, 2018	Jun. 30, 2018	Jul. 31, 2016	Jun. 30, 2016	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock Compensation Plans
Allocated Share-based Compensation Expense									$ 177.9	$ 166.6	$ 148.2
Stock Options
Stock Compensation Plans
Vesting period							4 years	3 years
Restricted Stock Units (RSUs)
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								3 years	4 years
Granted (in shares)						190,000			1,356,377
Performance Stock Units (PSUs)
Stock Compensation Plans
Vesting period	3 years	4 years			4 years
Granted (in shares)	92,347	86,975	100,000		77,243	446,500			92,347
Multiplying factor										101.80%	83.00%
Performance Stock Units (PSUs) \| Minimum
Stock Compensation Plans
Vesting period						3 years
Performance Stock Units (PSUs) \| Maximum
Stock Compensation Plans
Vesting period						4 years
Multiplier conversion rate of units into common stock (as a percent)	200.00%	125.00%			150.00%
Performance Stock Units (PSUs) \| Long term incentive plan - 1
Stock Compensation Plans
Granted (in shares)						106,500
Multiplying factor				142.00%
Performance Stock Units (PSUs) \| Long term incentive plan - 1 \| Maximum
Stock Compensation Plans
Multiplying factor						267.00%
Performance Stock Units (PSUs) \| Long term incentive plan - 2
Stock Compensation Plans
Granted (in shares)						150,000
Multiplying factor										100.00%
Performance Stock Units (PSUs) \| Long term incentive plan - 2 \| Minimum
Stock Compensation Plans
Multiplying factor						0.00%
Performance Stock Units (PSUs) \| Long term incentive plan - 2 \| Maximum
Stock Compensation Plans
Multiplying factor						100.00%

Stockholders' Equity - RSU and PSU award activity (Details) - $ / shares	1 Months Ended					12 Months Ended
	Jul. 31, 2020	Jul. 31, 2019	Apr. 30, 2019	Jul. 31, 2018	Jun. 30, 2018	Dec. 31, 2020
Shares Subject to Outstanding Options, Shares
Outstanding at the beginning of the period (in shares)						2,602,376
Outstanding at the end of the period (in shares)						3,284,583
Shares Subject to Outstanding Options, Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)						$ 79.69
Outstanding at the end of the period (in dollars per share)						$ 87.42
Restricted Stock Units (RSUs)
Shares Subject to Outstanding Options, Shares
Granted (in shares)					190,000	1,356,377
Released (in shares)						(572,810)
Cancelled (in shares)						(141,002)
Shares Subject to Outstanding Options, Weighted Average Exercise Price
Granted (in dollars per share)						$ 98.11
Released (in dollars per share)						86.21
Cancelled (in dollars per share)						$ 86.03
Performance Stock Units (PSUs)
Shares Subject to Outstanding Options, Shares
Granted (in shares)	92,347	86,975	100,000	77,243	446,500	92,347
Released (in shares)						(35,455)
Cancelled (in shares)						(17,250)
Shares Subject to Outstanding Options, Weighted Average Exercise Price
Granted (in dollars per share)						$ 106.47
Released (in dollars per share)						78.85
Cancelled (in dollars per share)						$ 68.79

Stockholders' Equity - Shares available for grant (Details)	12 Months Ended
	Dec. 31, 2020 shares
Shares Available For Grant
Outstanding at the beginning of the period (in shares)	9,882,122
Options, RSUs and PSUs granted (in shares)	(5,153,982)
Options, RSUs and PSUs cancelled (in shares)	787,042
Outstanding at the end of the period (in shares)	5,515,182

Stockholders' Equity - Employee Stock Purchase Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock Compensation Plans
Number of shares issued	258,453	239,590	233,712
Stock compensation expense	$ 177.9	$ 166.6	$ 148.2
Remaining shares available	5,515,182	9,882,122
Employee Stock
Stock Compensation Plans
Employment period for eligibility to participate in the plan	1 month
Number of shares issued	258,453	239,590	233,712
Stock compensation expense	$ 4.6	$ 3.4	$ 3.7
Remaining shares available	945,478
Employee Stock \| Minimum
Stock Compensation Plans
Number of employee working hours per week for eligibility to participate in the plan	20 hours

Stock Compensation (Details) - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Stock compensation
Stock compensation expense	$ 177.9	$ 166.6	$ 148.2
Stock Compensation Expense Capitalized	$ 0.6	0.4	0.1
Weighted-average fair value assumptions
Valuation method	Black-Scholes valuation model
Dividend yield (as a percent)	0.00%
Research and Development Expense
Stock compensation
Stock compensation expense	$ 120.4	114.0	101.1
Selling, General and Administrative Expenses
Stock compensation
Stock compensation expense	56.6	51.9	47.1
Cost of product revenues
Stock compensation
Stock compensation expense	1.0	0.7
Employee Stock
Stock compensation
Stock compensation expense	$ 4.6	$ 3.4	$ 3.7
Weighted-average fair value assumptions
Average risk-free interest rates (as a percent)	0.17%	1.82%	2.62%
Average expected life (in years)	6 months	6 months	6 months
Volatility (as a percent)	45.00%	31.00%	46.00%
Weighted-average fair value (in dollars per share)	$ 19.13	$ 14.04	$ 15.80
Stock Options
Stock compensation
Assumed annualized forfeiture rate (as a percent)	5.00%
Weighted-average fair value assumptions
Average risk-free interest rates (as a percent)	0.80%	2.27%	2.61%
Average expected life (in years)	4 years 11 months 23 days	5 years 3 months 7 days	5 years 3 months 3 days
Volatility (as a percent)	40.00%	45.00%	45.00%
Weighted-average fair value (in dollars per share)	$ 32.65	$ 32.38	$ 34.20
Unrecognized compensation
Unrecognized compensation cost for nonvested option (in dollars)	$ 75.0
Vesting period of recognition of the unrecognized compensation cost of nonvested awards	1 year 2 months 12 days
Restricted Stock Units (RSUs)
Stock compensation
Assumed annualized forfeiture rate (as a percent)	5.00%
Unrecognized compensation
Unrecognized compensation cost for nonvested option (in dollars)	$ 119.0
Vesting period of recognition of the unrecognized compensation cost of nonvested awards	1 year 8 months 12 days
Performance Stock Units (PSUs)
Stock compensation
Assumed annualized forfeiture rate (as a percent)	5.00%
Unrecognized compensation
Unrecognized compensation cost for nonvested option (in dollars)	$ 25.7
Vesting period of recognition of the unrecognized compensation cost of nonvested awards	1 year 3 months 18 days

Income Taxes - Income before provision (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income (loss) from operations before income taxes
Income (loss) before provision for income taxes	$ (232,218)	$ 486,791	$ 115,347
U.S.
Income (loss) from operations before income taxes
Income (loss) before provision for income taxes	(16,609)	712,486	478,050
Non-U.S.
Income (loss) from operations before income taxes
Income (loss) before provision for income taxes	$ (215,609)	$ (225,695)	$ (362,703)

Income Taxes - Provision for income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Current:
Federal	$ 43,595	$ 23,526
State	18,881	11,553	$ 5,010
Foreign	1,353	5,183	1,303
Current provision for income taxes	63,829	40,262	6,313
Deferred:
State		(205)	111
Foreign	(350)	(172)	(570)
Deferred provision for income taxes	(350)	(377)	(459)
Provision for income taxes	$ 63,479	$ 39,885	$ 5,854

Income Taxes - Reconciliation of income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
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	$ (48,766)	$ 102,226	$ 24,223
Unbenefited net operating losses and tax credits	105,923	(73,666)	(51,861)
Excess tax benefits related to share-based compensation	(9,750)	(13,418)	(8,233)
Foreign tax rate differential	30,412	25,419	37,061
Non-deductible officer compensation	7,418	5,213	4,114
Foreign-derived intangible income	(22,830)	(9,153)
Other	1,072	3,264	550
Provision for income taxes	63,479	39,885	$ 5,854
Deferred tax assets:
Net operating loss carry forwards	128,088	102,001
Federal and state research credits	305,099	400,550
Capitalized research and development	43,806	46,188
Deferred revenue and accruals	27,467	13,609
Non-cash compensation	75,867	67,345
Acquisition-related contingent consideration	32,658	31,956
Intangibles, net	289,848	92,806
Long term investments	25,968	14,899
Other	26,303	21,885
Total gross deferred tax assets	955,104	791,239
Less valuation allowance for deferred tax assets	(930,209)	(770,497)
Net deferred tax assets	24,895	20,742
Deferred tax liabilities:
Property and equipment	(22,841)	(19,095)
Total gross deferred tax liabilities	(22,841)	(19,095)
Net deferred tax assets	$ 2,054	$ 1,647

Income Taxes - NOL (Details) $ in Thousands	Dec. 31, 2020 USD ($)
State
Operating Loss Carryforwards
Net operating loss carryforwards	$ 361,890
Foreign
Operating Loss Carryforwards
Net operating loss carryforwards	$ 1,250,048

Income Taxes - Tax Credit Carryforwards (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Orphan drug tax credit carryforwards
Tax Credit Carryforward
Tax credit carryforward	$ 162,653
Federal \| Research and development
Tax Credit Carryforward
Tax credit carryforward	150,598
State \| Research and development
Tax Credit Carryforward
Tax credit carryforward	$ 23,986

Income Taxes - Narrative and Unrecognised Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Income Taxes
Increase (decrease) in valuation allowance	$ 159,700	$ (66,500)	$ 2,200
Reconciliation of the beginning and ending amount of unrecognized tax benefits
Balance at beginning of period	24,251	22,395
Additions related to prior periods tax positions	3,953	726
Reductions related to prior periods tax positions	(216)	(82)
Additions related to current period tax positions	4,119	1,835
Settlements	(201)
Reductions due to lapse of applicable statute of limitations	(397)	(557)
Currency translation adjustment	88
Currency translation adjustment		(66)
Balance at end of period	$ 31,597	24,251	22,395
Interest and penalties as a component of income tax expense		$ 200	$ 100

Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Basic Net Income (Loss) Per Share
Basic net income (loss) per share									$ (295,697)	$ 446,906	$ 109,493
Weighted average common shares outstanding	219,239,000	218,784,000	217,549,000	216,721,000	215,770,000	215,199,000	214,620,000	214,065,000	218,073,000	214,913,000	212,383,000
Basic net income (loss) per share	$ 0.68	$ (0.07)	$ 1.33	$ (3.33)	$ 0.51	$ 0.60	$ 0.49	$ 0.48	$ (1.36)	$ 2.08	$ 0.52
Diluted Net Income (Loss) Per Share
Diluted net income (loss)									$ (295,697)	$ 446,906	$ 109,493
Weighted average common shares outstanding	219,239,000	218,784,000	217,549,000	216,721,000	215,770,000	215,199,000	214,620,000	214,065,000	218,073,000	214,913,000	212,383,000
Dilutive stock options and awards										2,744,000	3,252,000
Weighted average shares used to compute diluted net income (loss) per share	221,228,000	218,784,000	220,434,000	216,721,000	218,542,000	217,791,000	217,483,000	217,061,000	218,073,000	217,657,000	215,635,000
Diluted net income (loss) per share	$ 0.68	$ (0.07)	$ 1.32	$ (3.33)	$ 0.51	$ 0.59	$ 0.48	$ 0.47	$ (1.36)	$ 2.05	$ 0.51
Anti-dilutive securities
Potential common shares excluded from diluted net income (loss) per share computation									15,274,871	9,718,828	8,624,931
Stock Options
Anti-dilutive securities
Potential common shares excluded from diluted net income (loss) per share computation									15,274,871	9,349,889	8,255,992
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	368,939

Employee Benefit Plans - Defined Contribution Plan (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Defined Contribution Plan
Defined contribution expense	$ 13.4	$ 11.7	$ 10.5
European And Japanese Defined Contribution Plans
Defined Contribution Plan
Defined contribution expense	$ 1.7	$ 1.6	$ 1.4

Employee Benefit Plans - Defined Benefit Pension Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Benefit obligation assumptions
Discount rate ( as a percentage)	0.10%	0.30%
Rate of compensation increase ( as a percentage)	2.00%	2.25%
Periodic benefit cost assumptions
Discount rate ( as a percentage)	0.30%	0.75%
Rate of compensation increase ( as a percentage)	2.25%	2.25%
Expected return on plan assets (as a percentage)	0.30%	0.75%
Changes in the obligations
Benefit obligation, beginning of the year	$ 62,770	$ 46,038
Employer Service cost	6,047	5,195	$ 4,450
Interest cost	193	345	278
Plan participants contributions	2,237	1,613
Actuarial loss	9,372	6,672
Transfer of benefits net of payments from fund	11,057	2,184
Expenses paid from assets	88	61
Translation loss (gain)	6,371	784
Benefit obligation, end of the year	97,959	62,770	46,038
Changes in plan assets
Fair value of plan assets, beginning of year	38,662	30,368
Actual return on plan assets	260	132
Employer contributions	5,413	3,910
Plan participants contributions	2,237	1,613
Transfer of benefits net of payments from fund	11,057	2,184
Expenses paid from assets	88	61
Translation loss (gain)	3,724	516
Fair value of plan assets, end of year	61,265	38,662	$ 30,368
Unfunded liability, end of year	36,694	24,108
Accumulated benefit obligation	$ 83,200	$ 52,900

Employee Benefit Plans - Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Net periodic benefit cost
Service cost	$ 6,047	$ 5,195	$ 4,450
Interest cost	193	345	278
Expected return on plan assets	(126)	(241)	(195)
Amortization of prior service cost	216	214	179
Amortization of actuarial losses	667	247	265
Net periodic benefit cost	$ 6,997	$ 5,760	$ 4,977
Location of costs excluding the service component	us-gaap:OtherNonoperatingIncomeExpense	us-gaap:OtherNonoperatingIncomeExpense	us-gaap:OtherNonoperatingIncomeExpense

Employee Benefit Plans - Other changes in the plan assets and benefit obligation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Other changes recognized in accumulated other comprehensive income (loss)
Pension liability, beginning of year	$ 15,468	$ 9,146	$ 8,450
Net prior service cost	(216)	(214)	(179)
Net loss	8,579	6,536	875
Pension liability, end of year	$ 23,831	$ 15,468	$ 9,146

Employee Benefit Plans - Expected benefit payments (Details) $ in Thousands	Dec. 31, 2020 USD ($)
Expected employer contributions
Expected contributions	$ 6,000
Expected benefit payments
2021	3,315
2022	3,413
2023	3,474
2024	3,506
2025	3,972
2026-2030	22,498
Total	$ 40,178

Commitments and Contingencies (Details) $ in Millions	Oct. 31, 2019 USD ($)
Wilmington Friends School Inc \| Property purchase
Property	$ 50.0

Segment Information (Details) $ in Thousands	3 Months Ended								12 Months Ended
Segment Information (Details) $ in Thousands	Dec. 31, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2020 USD ($) segment	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Revenues from External Customers and Long-Lived Assets [Line Items]
Number of operating segments \| segment									1
Total revenues	$ 789,509	$ 620,643	$ 688,043	$ 568,507	$ 579,389	$ 551,581	$ 529,932	$ 497,857	$ 2,666,702	$ 2,158,759	$ 1,881,883
Property and equipment, net	559,625				377,567				559,625	377,567
U.S.
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues									2,600,000	2,100,000	1,800,000
Property and equipment, net	336,900				261,700				336,900	261,700
Europe
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues									105,000	90,000	$ 79,900
Property and equipment, net	$ 218,000				$ 109,900				$ 218,000	$ 109,900

- 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.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8906-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 41
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 4
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130543-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 22
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 42
-URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=121604090&loc=SL49130545-203045

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 924
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 11.L)
-URI http://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Interim Consolidated Financial Information (Unaudited) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Interim Consolidated Financial Information (Unaudited)
Revenues	$ 789,509	$ 620,643	$ 688,043	$ 568,507	$ 579,389	$ 551,581	$ 529,932	$ 497,857	$ 2,666,702	$ 2,158,759	$ 1,881,883
Net income (loss)	$ 149,850	$ (15,203)	$ 290,298	$ (720,642)	$ 111,005	$ 128,271	$ 105,318	$ 102,312	$ (295,697)	$ 446,906	$ 109,493
Basic net income (loss) per share	$ 0.68	$ (0.07)	$ 1.33	$ (3.33)	$ 0.51	$ 0.60	$ 0.49	$ 0.48	$ (1.36)	$ 2.08	$ 0.52
Diluted net income (loss) per share	$ 0.68	$ (0.07)	$ 1.32	$ (3.33)	$ 0.51	$ 0.59	$ 0.48	$ 0.47	$ (1.36)	$ 2.05	$ 0.51
Shares used in computation of basic net income (loss) per share	219,239	218,784	217,549	216,721	215,770	215,199	214,620	214,065	218,073	214,913	212,383
Shares used in computation of diluted net income (loss) per share	221,228	218,784	220,434	216,721	218,542	217,791	217,483	217,061	218,073	217,657	215,635

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22583-107794

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1448-109256

Reference 4: 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=109234566&loc=d3e22595-107794

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1337-109256

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 52
-URI http://asc.fasb.org/extlink&oid=120380238&loc=d3e4984-109258

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(23))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=120380238&loc=d3e3842-109258

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 7
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22644-107794

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(25))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1252-109256

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121326447&loc=SL5780133-109256

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(27))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 52
-URI http://asc.fasb.org/extlink&oid=120380238&loc=d3e4984-109258

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 7
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22644-107794

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 55
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=120380238&loc=d3e3842-109258

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1252-109256

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (b)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 6: 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=109234566&loc=d3e22595-107794

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22583-107794

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 60B
-Subparagraph (d)
-URI http://asc.fasb.org/extlink&oid=121326447&loc=SL5780133-109256

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-04(27))
-URI http://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 50
-Paragraph 1
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 220
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04(23))
-URI http://asc.fasb.org/extlink&oid=120400993&loc=SL114874131-224263

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 250
-SubTopic 10
-Section 50
-Paragraph 11
-Subparagraph (a)
-URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22694-107794

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 260
-SubTopic 10
-Section 45
-Paragraph 7
-URI http://asc.fasb.org/extlink&oid=121326447&loc=d3e1337-109256

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03(25))
-URI http://asc.fasb.org/extlink&oid=120395209&loc=SL114868664-224227

+ Details

- Definition

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

Interim Consolidated Financial Information (Unaudited) - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2020	Sep. 30, 2020	Jun. 30, 2020	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Jun. 30, 2019	Mar. 31, 2019	Dec. 31, 2020	Dec. 31, 2019	Dec. 31, 2018
Interim Consolidated Financial Information (Unaudited)
Revenues	$ 789,509	$ 620,643	$ 688,043	$ 568,507	$ 579,389	$ 551,581	$ 529,932	$ 497,857	$ 2,666,702	$ 2,158,759	$ 1,881,883
Product revenues, net
Interim Consolidated Financial Information (Unaudited)
Revenues	559,500	522,300	500,300	486,700	490,800	454,000	433,900	396,200	2,068,736	1,774,922	1,466,900
Product royalty revenues
Interim Consolidated Financial Information (Unaudited)
Revenues	119,900	98,400	92,800	81,800	88,600	80,100	76,000	61,600	392,966	306,337	234,780
Milestone and contract revenues
Interim Consolidated Financial Information (Unaudited)
Revenues	$ 110,000	$ 0	$ 95,000	$ 0	$ 0	$ 17,500	$ 20,000	$ 40,000	$ 205,000	$ 77,500	$ 180,000

- Definition

+ References

+ Details