Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 31, 2017	Jan. 31, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	Theravance Biopharma, Inc.
Entity Central Index Key	0001583107
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 1,710,630,797
Entity Common Stock, Shares Outstanding		54,380,851
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 88,980	$ 344,709
Short-term marketable securities	259,586	156,387
Accounts receivable, net of allowances of $992 and $779 at December 31, 2017 and 2016, respectively	2,253	646
Receivables from collaborative arrangements	7,109	9,076
Prepaid taxes	291	3,060
Other prepaid and current assets	3,700	2,405
Inventories	16,830	12,220
Total current assets	378,749	528,503
Property and equipment, net	10,157	8,460
Long-term marketable securities	41,587	91,565
Other investments	0	8,000
Tax receivable	8,191	0
Restricted cash	833	833
Other assets	1,883	1,893
Total assets	441,400	639,254
Current liabilities:
Accounts payable	5,924	1,733
Accrued personnel-related expenses	24,136	14,021
Accrued clinical and development expenses	20,657	25,064
Other accrued liabilities	11,710	8,298
Deferred revenue	125	152
Total current liabilities	62,552	49,268
Convertible senior notes, net	223,746	222,676
Deferred rent	3,668	3,966
Other long-term liabilities	36,256	13,113
Commitments and contingencies (Note 2,9 and 11)
Shareholders' equity
Preferred shares, $0.00001 par value: 230 shares authorized, no shares issued or outstanding at December 31, 2017 and 2016, respectively
Ordinary shares, $0.00001 par value: 200,000 shares authorized at December 31, 2017 and 2016, respectively; 54,381 and 52,833 shares issued and outstanding at December 31, 2017 and 2016, respectively	1	1
Additional paid-in capital	913,650	862,708
Accumulated other comprehensive loss	(733)	(253)
Accumulated deficit	(797,740)	(512,225)
Total shareholders' equity	115,178	350,231
Total liabilities and shareholders' equity	$ 441,400	$ 639,254

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
CONSOLIDATED BALANCE SHEETS
Account receivable, allowance	$ 992	$ 779
Preferred shares, par value (in dollars per share)	$ 0.00001	$ 0.00001
Preferred shares, shares authorized	230	230
Preferred shares, shares issued	0	0
Preferred shares, outstanding shares	0	0
Ordinary shares, par value (in dollars per share)	$ 0.00001	$ 0.00001
Ordinary shares, authorized shares	200,000	200,000
Ordinary shares, shares issued	54,381	52,833
Ordinary shares, outstanding shares	54,381	52,833

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Revenue:
Product sales	$ 14,788	$ 17,603	$ 9,408
Revenue from collaborative arrangements	598	31,045	32,718
Total revenue	15,386	48,648	42,126
Costs and expenses:
Cost of goods sold	6,030	2,894	4,657
Research and development	173,887	141,712	129,165
Selling, general and administrative	95,592	84,509	90,203
Total costs and expenses	275,509	229,115	224,025
Loss from operations	(260,123)	(180,467)	(181,899)
Interest expense	(8,547)	(1,404)	0
Other-than-temporary impairment loss	(8,000)	0	0
Interest and other income, net	4,959	1,312	631
Loss before income taxes	(271,711)	(180,559)	(181,268)
Provision for income taxes	13,694	10,110	951
Net loss	(285,405)	(190,669)	(182,219)
Share-based compensation expense	$ 49,145	$ 41,169	$ 54,050
Net loss per share:
Basic and diluted net loss per share (in dollars per share)	$ (5.45)	$ (4.26)	$ (5.34)
Shares used to compute basic and diluted net loss per share (in shares)	52,352	44,711	34,150
Research and development
Costs and expenses:
Share-based compensation expense	$ 22,691	$ 20,202	$ 25,770
Selling, general and administrative
Costs and expenses:
Share-based compensation expense	$ 26,454	$ 20,967	$ 28,280

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net loss	$ (285,405)	$ (190,669)	$ (182,219)
Other comprehensive income (loss):
Net unrealized gain (loss) on available-for-sale investments, net of tax	(480)	(183)	12
Comprehensive loss	$ (285,885)	$ (190,852)	$ (182,207)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($)	Ordinary Shares	Additional Paid-in Capital	Accumulated Other Comprehensive Income (Loss)	Accumulated Deficit	Total
Balance at Dec. 31, 2014	$ 0	$ 429,206,000	$ (82,000)	$ (139,337,000)	$ 289,787,000
Balance (in shares) at Dec. 31, 2014	32,221,083
Increase (Decrease) in Stockholders' Equity
Net proceeds from sale of ordinary shares	$ 0	79,017,000	0	0	79,017,000
Net proceeds from sale of ordinary shares (in shares)	5,490,013
Proceeds from ESPP purchases	$ 0	3,124,000	0	0	3,124,000
Proceeds from ESPP purchases (in shares)	250,209
Employee shared-based compensation expense	$ 0	54,175,000	0	0	54,175,000
Issuance of restricted shares	$ 0	0	0	0	0
Issuance of restricted shares (in shares)	71,365
Repurchase of shares to satisfy tax withholding	$ 0	(756,000)	0	0	(756,000)
Repurchase of shares to satisfy tax withholding (in shares)	(51,534)
Excess tax benefit of share-based compensation	$ 0	(75,000)	0	0	(75,000)
Net unrealized gain (loss) on marketable securities	0	0	12,000	0	12,000
Net loss	0	0	0	(182,219,000)	(182,219,000)
Balance at Dec. 31, 2015	$ 0	564,691,000	(70,000)	(321,556,000)	243,065,000
Balance (in shares) at Dec. 31, 2015	37,981,136
Increase (Decrease) in Stockholders' Equity
Net proceeds from sale of ordinary shares	$ 1,000	253,027,000	0	0	253,028,000
Net proceeds from sale of ordinary shares (in shares)	11,978,261
Proceeds from ESPP purchases	$ 0	3,172,000	0	0	3,172,000
Proceeds from ESPP purchases (in shares)	244,587
Employee shared-based compensation expense	$ 0	41,290,000	0	0	41,290,000
Issuance of restricted shares	$ 0	0	0	0	0
Issuance of restricted shares (in shares)	2,465,713
Option exercises	$ 0	4,378,000	0	0	4,378,000
Option exercises (in shares)	197,328
Repurchase of shares to satisfy tax withholding	$ 0	(3,871,000)	0	0	(3,871,000)
Repurchase of shares to satisfy tax withholding (in shares)	(34,182)
Excess tax benefit of share-based compensation	$ 0	21,000	0	0	21,000
Net unrealized gain (loss) on marketable securities	0	0	(183,000)	0	(183,000)
Net loss	0	0	0	(190,669,000)	(190,669,000)
Balance at Dec. 31, 2016	$ 1,000	862,708,000	(253,000)	(512,225,000)	$ 350,231,000
Balance (in shares) at Dec. 31, 2016	52,832,843				52,833,000
Increase (Decrease) in Stockholders' Equity
Net proceeds from sale of ordinary shares	$ 0	1,000	0	0	$ 1,000
Net proceeds from sale of ordinary shares (in shares)	0
Proceeds from ESPP purchases	$ 0	3,980,000	0	0	3,980,000
Proceeds from ESPP purchases (in shares)	250,356
Employee shared-based compensation expense	$ 0	49,175,000	0	0	49,175,000
Issuance of restricted shares	$ 0	0	0	0	0
Issuance of restricted shares (in shares)	1,024,442
Option exercises	$ 0	6,236,000	0	0	6,236,000
Option exercises (in shares)	275,776
Cumulative effect upon the adoption of ASU 2016-09	$ 0	110,000	0	(110,000)	0
Repurchase of shares to satisfy tax withholding	$ 0	(8,560,000)	0	0	(8,560,000)
Repurchase of shares to satisfy tax withholding (in shares)	(2,566)
Net unrealized gain (loss) on marketable securities	$ 0	0	(480,000)	0	(480,000)
Net loss	0	0	0	(285,405,000)	(285,405,000)
Balance at Dec. 31, 2017	$ 1,000	$ 913,650,000	$ (733,000)	$ (797,740,000)	$ 115,178,000
Balance (in shares) at Dec. 31, 2017	54,380,851				54,381,000

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating activities
Net loss	$ (285,405)	$ (190,669)	$ (182,219)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	4,027	3,119	2,989
Share-based compensation	49,145	41,169	54,050
Other-than-temporary impairment loss	8,000	0	0
Inventory write-down	740	303	2,096
Excess tax benefits from share-based compensation	0	(21)	75
Non-cash revenue from collaboration arrangements	0	0	(8,000)
Other	10	182	(65)
Changes in operating assets and liabilities:
Accounts receivable	(1,607)	1,276	(1,633)
Receivables from collaborative arrangements	1,967	26,156	(33,392)
Prepaid taxes	2,788	9,522	(12,764)
Other prepaid and current assets	(1,489)	2,710	963
Inventories	(7,301)	(3,182)	1,030
Tax receivable	(7,890)	0	0
Other assets	(354)	184	(572)
Accounts payable	3,796	(16,436)	8,717
Accrued personnel-related expenses, accrued clinical and development expenses, and other accrued liabilities	8,353	17,192	(1,039)
Deferred rent	(298)	(632)	(552)
Deferred revenue	17	448	295
Other long-term liabilities	24,449	9,690	1,164
Net cash used in operating activities	(201,052)	(98,989)	(168,857)
Investing activities
Purchases of property and equipment	(2,406)	(2,135)	(2,647)
Purchases of marketable securities	(288,791)	(237,567)	(73,011)
Maturities of marketable securities	234,864	91,467	186,697
Net cash (used in) provided by investing activities	(56,333)	(148,235)	111,039
Financing activities
Proceeds from sale of ordinary shares, net	0	253,028	79,017
Proceeds from issuance of 3.250% convertible senior notes, net	0	222,498	0
Proceeds from ESPP purchases	3,980	3,172	3,124
Proceeds from option exercises	6,236	4,378	0
Excess tax benefits from share-based compensation	0	21	(75)
Repurchase of shares to satisfy tax withholding	(8,560)	(3,871)	(756)
Net cash provided by financing activities	1,656	479,226	81,310
Net (decrease) increase in cash and cash equivalents	(255,729)	232,002	23,492
Cash and cash equivalents at beginning of period	344,709	112,707	89,215
Cash and cash equivalents at end of period	88,980	344,709	112,707
Supplemental disclosure of cash flow information
Cash paid for interest	7,454	0	0
Cash paid (received) for income taxes, net	$ 4,929	$ (9,488)	$ 13,389

Organization and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Organization and Summary of Significant Accounting Policies

Organization and Summary of Significant Accounting Policies

1. Organization and Summary of Significant Accounting Policies

Theravance Biopharma, Inc. ("Theravance Biopharma") is a diversified biopharmaceutical company with the core purpose of creating medicines that help improve the lives of patients suffering from serious illness.

In our relentless pursuit of this objective, we strive to apply insight and innovation at each stage of our business, including research, development and commercialization, and utilize both internal capabilities and those of partners around the world. Our research efforts are focused in the areas of inflammation and immunology. Our research goal is to design localized medicines that target diseased tissues, without systemic exposure, in order to maximize patient benefit and minimize risk. These efforts leverage years of experience in developing localized medicines for the lungs to treat respiratory disease. The first potential medicine to emerge from our research focus on immunology and localized treatments is an oral, intestinally restricted pan-Janus kinase (JAK) inhibitor, currently in development to treat a range of inflammatory intestinal diseases. Our pipeline of internally discovered product candidates will continue to evolve with the goal of creating transformational medicines to address the significant needs of patients.

In addition, we have an economic interest in future payments that may be made by Glaxo Group or one of its affiliates (GSK) pursuant to its agreements with Innoviva, Inc. relating to certain programs, including Trelegy Ellipta.

Basis of Presentation

Our consolidated financial statements have been prepared in conformity with US Generally Accepted Accounting Principles ("GAAP").

On January 1, 2017, we adopted ASU 2016-09, Compensation—Stock Compensation (Topic 718) ("ASU 2016-09"). Under ASU 2016-09, excess tax benefits from share-based compensation are now included on the Consolidated Statements of Cash Flows as an operating activity rather than a financing activity. This change has been applied prospectively as allowed under ASU 2016-09 and prior periods have not been adjusted on the Consolidated Statements of Cash Flows. Under ASU 2016-09, we also elected to account for share-based award forfeitures as they occur, rather than estimate expected forfeitures. This accounting change for forfeitures was applied on a modified retrospective basis, and the cumulative effect adjustment recorded to retained earnings, as of January 1, 2017, was $0.1 million.

Principles of Consolidation

The consolidated financial statements include the accounts of Theravance Biopharma and its wholly-owned subsidiaries, all of which are denominated in US dollars. All intercompany balances and transactions have been eliminated in consolidation.

Use of Management's Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ materially from those estimates. On an ongoing basis, management evaluates its significant accounting policies or estimates. We base our estimates on historical experience and other relevant assumptions that we believe to be reasonable under the circumstances. These estimates also form the basis for making judgments about the carrying values of assets and liabilities when these values are not readily apparent from other sources.

Segment Reporting

We operate in a single segment, which is the discovery (research), development and commercialization of human therapeutics. Our business offerings have similar economics and other characteristics, including the nature of products and manufacturing processes, types of customers, distribution methods and regulatory environment. We are comprehensively managed as one business segment by our Chief Executive Officer and the management team. Product sales are attributed to regions based on ship-to location and revenue from collaborative arrangements, including royalty revenue, are attributed to regions based on the location of the collaboration partner.

All capitalized property and equipment is located in the US and Ireland.

Cash and Cash Equivalents

We consider all highly liquid investments purchased with a maturity of three months or less on the date of purchase to be cash equivalents. Cash equivalents are carried at fair value.

Restricted Cash

Under certain lease agreements and letters of credit, we have pledged cash and cash equivalents as collateral. As of December 31, 2017 and 2016, restricted cash related to such agreements was $0.8 million.

Investments in Marketable Securities

We invest in marketable securities, primarily corporate notes, government, government agency, and municipal bonds. We classify our marketable securities as available-for-sale securities and report them at fair value in cash equivalents or marketable securities on the consolidated balance sheets with related unrealized gains and losses included as a component of shareholders' equity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income on the consolidated statements of operations. Realized gains and losses and declines in value judged to be other-than-temporary, if any, on available-for-sale securities are included in interest and other income (loss). The cost of securities sold is based on the specific identification method. Interest and dividends on securities classified as available-for-sale are included in interest income.

We regularly review all of our investments for other-than-temporary declines in estimated fair value. Our review includes the consideration of the cause of the impairment, including the creditworthiness of the security issuers, the number of securities in an unrealized loss position, the severity and duration of the unrealized losses, whether we have the intent to sell the securities and whether it is more likely than not that we will be required to sell the securities before the recovery of their amortized cost basis. When we determine that the decline in estimated fair value of an investment is below the amortized cost basis and the decline is other-than-temporary, we reduce the carrying value of the security and record a loss for the amount of such decline.

Investments in Non-Marketable Equity Securities

Non-marketable equity securities are recorded at cost in long-term assets, and we periodically review our non-marketable equity securities for impairment by determining whether impairment indicators are present. Common impairment indicators include a significant adverse change in the regulatory or economic environment in which the investee entity operates, inadequacies in the ability of the investee to raise cash to fund operating activities, or other working capital deficiencies.

If we conclude that a non-marketable equity security is impaired, we determine whether such impairment is other-than-temporary. The term "other-than-temporary" is not intended to indicate that the decline in value is permanent, but indicates that the prospect for a near-term recovery of value is not necessarily favorable and that there is a lack of evidence to support a realizable value equal to or greater than the carrying value of the investment. Factors we consider to make such determination include the duration and severity of the impairment, the reason for the decline in value and the potential recovery period and our intent to sell. If any impairment is considered other-than-temporary, we will write-down the asset to its estimated fair value and record the corresponding charge as "Other-than-temporary impairment loss".

Fair Value of Financial Instruments

We define fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Our valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect our market assumptions. We classify these inputs into the following hierarchy:

Level 1—Quoted prices for identical instruments in active markets.

Level 2—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3—Unobservable inputs and little, if any, market activity for the assets.

Financial instruments include cash equivalents, marketable securities, non-marketable securities, accounts receivable, accounts payable, accrued liabilities, and convertible debt. Our cash equivalents and marketable securities are carried at estimated fair value and remeasured on a recurring basis. The carrying value of accounts receivable, receivables from collaborative arrangements, accounts payable, and accrued liabilities approximate their estimated fair value due to the relatively short-term nature of these instruments.

Accounts Receivable

Trade accounts receivable are recorded net of allowances for wholesaler chargebacks related to government rebate programs, cash discounts for prompt payment, distribution fees, and sales discounts. Estimates for wholesaler chargebacks for government rebates and cash discounts are based on contractual terms, historical trends and our expectations regarding the utilization rates for these programs. When appropriate, we provide for an allowance for doubtful accounts by reserving for specifically identified doubtful accounts. For the periods presented, we did not have any write-offs of accounts receivable. We perform ongoing credit evaluations of our customers and generally do not require collateral.

Concentration of Credit Risks

We invest in a variety of financial instruments and, by our policy, limit the amount of credit exposure with any one issuer, industry or geographic area for investments other than instruments backed by the US federal government.

We depend on a single-source supplier of the active pharmaceutical ingredient ("API") in VIBATIV and one supplier to provide fill-finish services related to the manufacturing of VIBATIV. If any of our suppliers were to limit or terminate production or otherwise fail to meet the quality or delivery requirements needed to supply VIBATIV at levels to meet market demand, we could experience a loss of revenue, which could materially and adversely impact our results of operations.

Inventories

Inventories consist of raw materials, work-in-process and finished goods related to the production of VIBATIV. Raw materials include VIBATIV active pharmaceutical ingredient ("API") and other raw materials. Work-in-process and finished goods include third-party manufacturing costs and labor and indirect costs we incur in the production process. Included in inventories are raw materials and work-in-process that may be used as clinical products, which are charged to research and development ("R&D") expense when consumed. In addition, under certain commercialization agreements, we may sell VIBATIV packaged in unlabeled vials that are recorded in work-in-process. Inventories are stated at the lower of cost or net realizable value. We determine the cost of inventory using the average-cost method for each manufacturing batch.

We assess our inventory levels each reporting period and write-down inventory that is expected to be at risk for expiration, that has a cost basis in excess of its expected net realizable value and inventory quantities in excess of expected requirements. In evaluating the sufficiency of our inventory reserves or liabilities for firm purchase commitments, we also take into consideration our firm purchase commitments for future inventory production. If we were to decide to cancel our manufacturing commitment, such cancellation would trigger the payment of a cancellation fee. If we project to have excess inventories and that it would be more cost-efficient to pay the cancellation fee, we may accrue the cancellation fee as a liability. Our assessment of excess inventories, including future firm purchase commitments, requires management to utilize judgement in formulating estimates and assumptions that we believe to be reasonable under the circumstances. Actual results may differ from those estimates and assumptions. As of December 31, 2017, we accrued a $2.3 million liability related to excess inventory purchase commitments.

When we recognize a loss on such inventory or firm purchase commitments, it establishes a new, lower cost basis for that inventory, and subsequent changes in facts and circumstances will not result in the restoration or increase in that newly established cost basis. If inventory with a lower cost basis is subsequently sold, it will result in higher gross margin for those sales. In 2017, 2016, and 2015, we recognized charges of $3.0 million, $0.3 million, and $1.9 million, respectively, arising from excess inventory. The portion of our inventory that is most at risk for product dating issues is the finished goods inventory and the carrying value of our finished goods inventory was $5.0 million as of December 31, 2017. Refer to Note 7, "Inventories," to the consolidated financial statements appearing in this Annual Report on Form 10-K for further information regarding the components of our inventories.

Property and Equipment

Property, equipment and leasehold improvements are stated at cost, net of accumulated depreciation and depreciated using the straight-line method as follows:

Leasehold improvements		Shorter of remaining lease terms or useful life
Equipment, furniture and fixtures		5 - 7 years
Software and computer equipment		3 - 5 years

Capitalized Software

We capitalize certain costs related to direct material and service costs for software obtained for internal use. For the year ended December 31, 2017, we capitalized costs for the implementation of our new procurement software system of $0.5 million, and for the year ended December 31, 2016, we capitalized costs related to the implementation of our enterprise resource planning software system of $0.8 million. Upon being placed in service, these costs and other future capitalizable costs related to the internal use software system integration will be depreciated over five years.

Impairment of Long-Lived Assets

Long-lived assets include property and equipment. The carrying value of long-lived assets is reviewed for impairment whenever events or changes in circumstances indicate that the asset may not be recoverable. An impairment loss is recognized when the total of estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount.

Deferred Rent

Deferred rent consists of the difference between cash payments and the recognition of rent expense on a straight-line basis for the buildings we occupy. Rent expense is being recognized ratably over the life of the leases. Because our facility operating leases provide for rent increases over the terms of the leases, average annual rent expense during the initial years of the leases exceeded our actual cash rent payments. Also included in deferred rent are lease incentives which are being recognized ratably over the life of the leases.

Revenue Recognition

Revenue is recognized when the four basic criteria of revenue recognition are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the fee is fixed or determinable; and (4) collectability is reasonably assured. Where the revenue recognition criteria are not met, we defer the recognition of revenue by recording deferred revenue until such time that all criteria are met.

Product Sales

We sell VIBATIV in the US market by making the drug product available through a limited number of distributors, who sell VIBATIV to healthcare providers. Title and risk of loss transfer upon receipt by these distributors. We recognize VIBATIV product sales and related cost of product sales at the time title transfers to the distributors.

Product sales are recorded net of estimated government-mandated rebates and chargebacks, distribution fees, estimated product returns and other deductions. We reflect such reductions in revenue as either an allowance to the related account receivable from the distributor, or as an accrued liability, depending on the nature of the sales deduction. Sales deductions are based on management's estimates that consider payor mix in target markets, industry benchmarks and experience to date. We monitor inventory levels in the distribution channel, as well as sales of VIBATIV by distributors to healthcare providers, using product-specific data provided by the distributors. Product return allowances are based on amounts owed or to be claimed on related sales. These estimates take into consideration the terms of our agreements with customers, historical product returns of VIBATIV, rebates or discounts taken, estimated levels of inventory in the distribution channel, the shelf life of the product, and specific known market events, such as competitive pricing and new product introductions. We update our estimates and assumptions each quarter and if actual future results vary from our estimates, we may adjust these estimates, which could have an effect on product sales and earnings in the period of adjustment.

Sales Discounts: We offer cash discounts to certain customers as an incentive for prompt payment. We expect our customers to comply with the prompt payment terms to earn the cash discount. In addition, we offer contract discounts to certain direct customers. We estimate sales discounts based on contractual terms, historical utilization rates, as available, and our expectations regarding future utilization rates. We account for sales discounts by reducing accounts receivable by the full amount and recognizing the discount as a reduction of revenue in the same period the related revenue is recognized.

Chargebacks and Government Rebates: For VIBATIV sales in the US, we estimate reductions to product sales for qualifying federal and state government programs including discounted pricing offered to Public Health Service ("PHS") as well as government-managed Medicaid programs. Our reduction for PHS is based on actual chargebacks that distributors have claimed for reduced pricing offered to such healthcare providers and our expectation about future utilization rates. Our accrual for Medicaid is based upon statutorily-defined discounts, estimated payor mix, expected sales to qualified healthcare providers, and our expectation about future utilization. The Medicaid accrual and government rebates that are invoiced directly to us are recorded in other accrued liabilities on the consolidated balance sheets. For qualified programs that can purchase our products through distributors at a lower contractual government price, the distributors charge back to us the difference between their acquisition cost and the lower contractual government price, which we record as an allowance against accounts receivable.

Distribution Fees: We have contracts with our distributors in the US that include terms for distribution-related fees. We determine distribution-related fees based on a percentage of the product sales price, and we record the distribution fees as an allowance against accounts receivable.

Product Returns: We offer our distributors a right to return product purchased directly from us, which is principally based upon the product's expiration date. Our policy is to accept product returns during the six months prior to and twelve months after the product expiration date on product that had been sold to our distributors. Product return allowances are based on amounts owed or to be claimed on related sales. These estimates take into consideration the terms of our agreements with customers, historical product returns of VIBATIV, rebates or discounts taken, estimated levels of inventory in the distribution channel, the shelf life of the product, and specific known market events, such as competitive pricing and new product introductions. We record our product return reserves as accrued other liabilities.

Allowance for Doubtful Accounts: We maintain a policy to record allowances for potentially doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. As of December 31, 2017 and 2016, there was no allowance for doubtful accounts related to customer payments.

Our reserve activity for sales allowances, discounts and chargebacks is summarized as follows:

(In thousands)	Balance at Beginning of Period		Charges		Deductions			Balance at End of Period
Year ended December 31, 2017:
Sales allowances, discounts and chargebacks	$	779	$	5,066	$	(4,853	)	$	992
Year ended December 31, 2016:
Sales allowances, discounts and chargebacks	$	758	$	6,337	$	(6,316	)	$	779
Year ended December 31, 2015:
Sales allowances, discounts and chargebacks	$	160	$	3,049	$	(2,451	)	$	758

Collaborative Arrangements and Multiple-Element Arrangements

Revenue from non-refundable, up-front license or technology access payments under license and collaborative arrangements that are not dependent on any future performance by us is recognized when such amounts are earned. If we have continuing obligations to perform under the arrangement, such fees are recognized over the estimated period of continuing performance obligation.

We account for multiple element arrangements, such as license and development agreements in which we may provide several deliverables, in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Subtopic 605-25, Multiple Element Arrangements. For new or materially amended multiple element arrangements, we identify the deliverables at the inception of the arrangement and each deliverable within a multiple deliverable revenue arrangement is accounted for as a separate unit of accounting if both of the following criteria are met: (1) the delivered item or items have value to the customer on a standalone basis and (2) for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. We allocate revenue to each non-contingent element based on the relative selling price of each element. When applying the relative selling price method, we determine the selling price for each deliverable using vendor-specific objective evidence ("VSOE") of selling price, if it exists, or third-party evidence ("TPE") of selling price, if it exists. If neither VSOE nor TPE of selling price exist for a deliverable, we use the best estimated selling price for that deliverable. Revenue allocated to each element is then recognized based on when the basic four revenue recognition criteria are met for each element.

Where a portion of non-refundable upfront fees or other payments received are allocated to continuing performance obligations under the terms of a collaborative arrangement, they are recorded as deferred revenue and recognized as revenue ratably over the term of our estimated performance period under the agreement. We determine the estimated performance periods, and they are periodically reviewed based on the progress of the related program. The effect of any change made to an estimated performance period and, therefore revenue recognized, would occur on a prospective basis in the period that the change was made.

Under certain collaborative arrangements, we have been reimbursed for a portion of our R&D expenses. These reimbursements have been reflected as a reduction of R&D expense in our consolidated statements of operations, as we do not consider performing research and development services to be a customer relationship in the context of those collaborative arrangements. Therefore, the reimbursement of research and development services are recorded as a reduction of R&D expense.

We recognize revenue from milestone payments when (i) the milestone event is substantive and its achievability was not reasonably assured at the inception of the agreement and (ii) we do not have ongoing performance obligations related to the achievement of the milestone. Milestone payments are considered substantive if all of the following conditions are met: the milestone payment (a) is commensurate with either our performance to achieve the milestone or the enhancement of the value of the delivered item or items as a result of a specific outcome resulting from our performance to achieve the milestone, (b) relates solely to past performance, and (c) is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement.

Research and Development Expenses

Research and development expenses are recorded in the period that services are rendered or goods are received. Research and development expenses consist of salaries and benefits, laboratory supplies and facility costs, as well as fees paid to third parties that conduct certain research and development activities on behalf of us, net of certain external research and development expenses reimbursed under our collaborative arrangements.

As part of the process of preparing financial statements, we are required to estimate and accrue research and development expenses. This process involves the following:


	•	identifying services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost;
	•	estimating and accruing expenses in our financial statements as of each balance sheet date based on facts and circumstances known to us at the time; and
	•	periodically confirming the accuracy of our estimates with selected service providers and making adjustments, if necessary.

Examples of estimated research and development expenses that we accrue include:


	•	fees paid to clinical research organizations ("CROs") in connection with preclinical and toxicology studies and clinical studies;
	•	fees paid to investigative sites in connection with clinical studies;
	•	fees paid to contract manufacturing organizations ("CMOs") in connection with the production of product and clinical study materials; and
	•	professional service fees for consulting and related services.

We base our expense accruals related to clinical studies on our estimates of the services received and efforts expended pursuant to contracts with multiple research institutions and CROs that conduct and manage clinical studies on our behalf. The financial terms of these agreements vary from contract to contract and may result in uneven payment flows. Payments under some of these contracts depend on factors, such as the successful enrollment of patients and the completion of clinical study milestones. Our service providers invoice us monthly in arrears for services performed. In accruing service fees, we estimate the time period over which services will be performed and the level of effort to be expended in each period. If we do not identify costs that we have begun to incur or if we underestimate or overestimate the level of services performed or the costs of these services, our actual expenses could differ from our estimates.

To date, we have not experienced significant changes in our estimates of accrued research and development expenses after a reporting period. Such changes in estimates recorded after a reporting period have been less than 1% of our annual research and development expenses and have not been material. However, due to the nature of estimates, there is no assurance that we will not make changes to our estimates in the future as we become aware of additional information about the status or conduct of our clinical studies and other research activities.

Advertising Expenses

We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses were $3.2 million, $2.5 million and $4.0 million for the years ended December 31, 2017, 2016 and 2015, respectively.

Fair Value of Share-Based Compensation Awards

We use the Black-Scholes-Merton option pricing model to estimate the fair value of options granted under our equity incentive plans and rights to acquire shares granted under our employee share purchase plan ("ESPP"). The Black-Scholes-Merton option valuation model requires the use of assumptions, including the expected term of the award and the expected share price volatility. We use the "simplified" method as described in Staff Accounting Bulletin No. 107, Share-Based Payment, to estimate the expected option term.

Share-based compensation expense is calculated based on awards ultimately expected to vest and is reduced for actual forfeitures as they occur, as allowed under ASU 2016-09. Prior to the adoption of ASU 2016-09 on January 1, 2017, forfeitures were estimated at the time of grant and revised, if necessary, in subsequent periods if the actual forfeitures differed from those estimates.

Compensation expense for purchases under the ESPP is recognized based on the fair value of the award on the date of offering.

Net Loss per Share

Basic net loss per share is computed by dividing net loss by the weighted-average number of shares of outstanding, less ordinary shares subject to forfeiture. Diluted net loss per share is computed by dividing net loss by the weighted-average number of shares outstanding, less ordinary shares subject to forfeiture, plus all additional ordinary shares that would have been outstanding, assuming dilutive potential ordinary shares had been issued for other dilutive securities.

For the years ended December 31, 2017, 2016 and 2015, diluted and basic net loss per share was identical since potential ordinary shares were excluded from the calculation, as their effect was anti-dilutive.

Anti-dilutive Securities

The following ordinary equivalent shares were not included in the computation of diluted net loss per share because their effect was anti-dilutive:

	Year Ended December 31,
(In thousands)	2017		2016		2015
Share issuances under equity incentive plans and ESPP		3,369		3,709		4,537
Restricted shares		6		33		202
Share issuances upon the conversion of convertible senior notes		6,676		6,676		—

		10,051		10,418		4,739

In addition, there were 1,305,000 and 1,440,000 shares that are subject to performance-based vesting criteria which have been excluded from the ordinary equivalent shares table above for the years ended December 31, 2017 and 2016, respectively.

Amortization of Debt Issuance Costs from Convertible Senior Notes due 2023

On November 2, 2016, we issued $230.0 million aggregate principal amount of 3.250% convertible senior notes due 2023 for net proceeds of approximately $222.5 million, after deducting underwriting discounts and commissions and other estimated transaction expenses. We incurred approximately $7.5 million in transaction costs, which are being amortized to interest expense over the estimated life of the notes based on the effective interest method.

Income Taxes

We utilize the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities and are measured using enacted tax rates and laws that are anticipated to be in effect when the differences are expected to reverse. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized.

Our unrecognized tax benefits would reduce our effective income tax rate if recognized. As of December 31, 2017 and 2016, we had total US federal, state and foreign unrecognized tax benefits of $41.8 million and $23.3 million, respectively, and we do not anticipate the total amount of unrecognized income tax benefits relating to uncertain tax positions existing at December 31, 2017 to significantly decrease in the next twelve months.

We assess all material positions, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position's sustainability and is measured at the largest amount of benefit that is greater than 50% likely to be realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and we will determine whether the factors underlying the sustainability assertion have changed and whether the amount of the recognized tax benefit is still appropriate.

The recognition and measurement of tax benefits requires significant judgment. We have taken certain positions where we believe that our position is greater than 50% likely to be realized upon ultimate settlement and for which no reserve for uncertain tax positions has been recorded. If we do not ultimately realize the expected benefit of these positions, we will record additional income tax expenses in future periods. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available.

Comprehensive Loss

Comprehensive loss is comprised of net loss and changes in unrealized gains and losses on our available-for-sale investments.

Related Parties

GSK owned 17.7% of our ordinary shares outstanding as of December 31, 2017. On March 17, 2016, GSK purchased from us 1,301,015 of our ordinary shares for an aggregate purchase price of approximately $23.0 million pursuant to a Share Purchase Agreement between GSK and us dated March 14, 2016. The Share Purchase Agreement was entered into pursuant to Section 2.1(d)(ii) of the Governance Agreement between GSK and us dated March 3, 2014 (the "Governance Agreement"), which until December 31, 2017 afforded GSK, on a quarterly basis, the opportunity to purchase from us ordinary shares sufficient to maintain GSK's Percentage Interest (as defined in the Governance Agreement) at the same level as prior to any exercise of share options and vesting of restricted shares that occurred during the prior quarter, and pursuant to our approval to GSK to make additional purchases, which approval was required by Section 2.1(a) of the Governance Agreement. The Governance Agreement expired on December 31, 2017.

Robert V. Gunderson, Jr. is a member of our board of directors. We have engaged Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, LLP, of which Mr. Gunderson is a partner, as our primary legal counsel. Fees incurred were $0.3 million for the year ended December 31, 2017, and $1.1 million in each of the years ended December 31, 2016 and 2015.

Recently Issued Accounting Pronouncements Not Yet Adopted

Effective January 1, 2018, we will adopt Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASU 2014-09" or "Topic 606"). ASU 2014-09's core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, companies may need to use more judgment and make more estimates than under the currently effective guidance. These may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price, and allocating the transaction price to each separate performance obligation. Since ASU 2014-09 was issued, several additional ASUs have been issued and incorporated within Topic 606 to clarify various elements of the guidance.

Our revenues are derived from collaborative arrangements and product sales. The consideration we are eligible to receive under collaborative arrangements includes upfront payments, research and development funding, milestone payments, and royalties. As part of our adoption efforts, we have completed the assessment of our collaboration agreements under Topic 606. We will adopt Topic 606 in the first quarter of 2018 using the modified retrospective method which consists of applying and recognizing the cumulative effect of Topic 606 at the date of initial application and providing certain additional disclosures as defined per Topic 606. We currently anticipate that we will record a cumulative adjustment to decrease accumulated deficit by approximately $1.1 million, as of January 1, 2018, to reflect the impact of the adoption of Topic 606. This cumulative adjustment is the result of the recognition of previously deferred revenue related to a deliverable and a transaction price component revision under two of our collaboration arrangements.

In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"). ASU 2016-02 is aimed at making leasing activities more transparent and comparable, and requires substantially all leases be recognized by lessees on their balance sheet as a right-of-use asset and corresponding lease liability, including leases currently accounted for as operating leases. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018 with early adoption permitted. Based on our initial assessment of ASU 2016-02, we believe that the largest impact to our balance sheet will be from recognizing a right-of-use asset and corresponding lease liability related to our property leases in South San Francisco and Dublin, Ireland. The current operating lease payments for these two properties are disclosed in Note 11 of these consolidated financial statements. We expect to adopt ASU 2016-02 in the first quarter of 2019, and we are continuing to evaluate the full impact that the adoption of ASU 2016-02 will have on our consolidated financial statements and related disclosures.

In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) ("ASU 2016-16"). ASU 2016-16 requires immediate recognition of income tax consequences of intra-company asset transfers, other than inventory transfers. Existing GAAP prohibits recognition of income tax consequences of intra-company asset transfers whereby the seller defers any net tax effect and the buyer is prohibited from recognizing a deferred tax asset on the difference between the newly created tax basis of the asset in its tax jurisdiction and its financial statement carrying amount as reported in the consolidated financial statements. ASU 2016-16 specifically excludes from its scope intra-company inventory transfers whereby the recognition of tax consequences will take place when the inventory is sold to third parties. An example of an inter-company asset transfers included in ASU 2016-16's scope is intellectual property. ASU 2016-16 is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years with early adoption permitted. We expect to adopt ASU 2016-16 in the first quarter of 2018 using the modified retrospective method. Upon adoption, we do not anticipate a material impact on our balance sheet or statement of operations as our deferred tax assets are fully offset by a valuation allowance.

We have evaluated other recently issued accounting pronouncements and do not believe that any of these pronouncements will have a material impact on our consolidated financial statements and related disclosures.

Collaborative Arrangements

12 Months Ended

Dec. 31, 2017

Collaborative Arrangements

Collaborative Arrangements

2. Collaborative Arrangements

Revenues from Collaborative Arrangements

We recognized revenue from our collaborative arrangements as follows:

	Year Ended December 31,
(In thousands)	2017		2016		2015
Mylan	$	102	$	15,102	$	19,175
R-Pharm		491		109		2,049
Takeda Pharmaceuticals		—		15,075		—
Trek Therapeutics		—		—		8,216
Various VIBATIV collaborative partners		5		259		3,278
Other		—		500		—

Total revenue from collaborative arrangements	$	598	$	31,045	$	32,718

Mylan

Development and Commercialization Agreement

In January 2015, Mylan and we established a strategic collaboration for the development and, subject to regulatory approval, commercialization of revefenacin (TD-4208), our investigational LAMA in development for the treatment of COPD. We entered into this collaboration to expand the breadth of our revefenacin development program and extend our commercial reach beyond the acute care setting where we currently market VIBATIV.

Under the Mylan Agreement, Mylan paid us an initial payment of $15.0 million in cash in the second quarter of 2015. Also, pursuant to an ordinary share purchase agreement entered into on January 30, 2015, Mylan Inc., a subsidiary of Mylan N.V., made a $30.0 million equity investment in us, buying 1,585,790 ordinary shares from us in early February 2015 in a private placement transaction at a price of approximately $18.918 per share, which represented a 10% premium over the volume weighted average price per share of our ordinary shares for the five trading days ending on January 30, 2015.

The Mylan Agreement is considered to be under the scope of FASB Topic 808, Collaborative Arrangements. We concluded that the R&D cost reimbursement activities were not representative of a customer relationship and this unit of account is accounted for as a reduction of our R&D expenses, rather than as revenue. Under the Mylan Agreement, the significant deliverables were determined to be the license and committee participation. We determined that the license represents a separate unit of accounting as the license, which includes rights to our underlying technologies for revefenacin, has standalone value because the rights conveyed permit Mylan to perform all efforts necessary to use our technologies to bring the compounds through development and, upon regulatory approval, commercialization. We based the best estimate of selling price for the license using a discounted cash flow approach. To the extent that the committee participation is an undelivered service, we have recorded deferred revenue related to this undelivered service.

Collaborative arrangement consideration, other than R&D reimbursement, is allocated to the units of accounting based on the relative selling price method. Amounts allocated to the license are recognized as collaborative revenue immediately as the license was delivered at the inception of the collaboration. Amounts allocated to committee participation are recognized ratably over the estimated performance periods as revenue from collaborative arrangements.

For the year ended December 31, 2015, we recognized $19.2 million in revenue from Mylan consisting of the initial payment of $15.0 million in cash and the $4.2 million premium related to the equity investment, which represented the difference between the closing price on January 30, 2015 and the issued price of $18.918 per share. We recorded reductions to R&D expense of $52.6 million representing reimbursements for our development responsibilities for the year-end December 31, 2015.

For the year ended December 31, 2016, we recognized $15.1 million in revenue from Mylan, primarily related to the $15.0 million milestone payment received from Mylan for the achievement of 50% enrollment in the Phase 3 twelve-month safety study, and we recorded reductions to R&D expense of $83.5 million representing reimbursements for our continuing development responsibilities.

For the year ended December 31, 2017, we recognized $0.1 million in revenue from Mylan from the committee participation services, and we recorded reductions to R&D expense of $23.4 million representing reimbursements for our continuing development responsibilities.

As of December 31, 2017, we are eligible to receive from Mylan additional potential development, regulatory and sales milestone payments totaling up to $205.0 million in the aggregate, with $160.0 million associated with revefenacin monotherapy and $45.0 million for future potential combination products. Of the $160.0 million associated with monotherapy, $150.0 million relates to commercialization and $10.0 million relates to regulatory actions in the European Union ("EU"). Development and regulatory milestones are deemed to be substantive milestones and will be recognized as revenue in the period upon achievement of each respective milestone. Sales milestones are considered contingent payments and are not deemed to be substantive milestones due to the fact that the achievement of the event underlying the payment predominantly relates to Mylan's performance of future commercial activities. We do not expect to earn any milestone payments from Mylan in 2018.

Takeda Pharmaceuticals

License and Collaboration Agreement

In June 2016, we entered into a License and Collaboration Agreement with Millennium Pharmaceuticals, Inc., a Delaware corporation ("Millennium") (the "Takeda Agreement"), in order to establish a collaboration for the development and commercialization of TD-8954 (TAK-954), a selective 5-HT4 receptor agonist. Millennium is an indirect wholly-owned subsidiary of Takeda Pharmaceutical Company Limited (TSE: 4502), a publicly-traded Japanese corporation listed on the Tokyo Stock Exchange (collectively with Millennium, "Takeda"). Prior to the Takeda Agreement, the Company has developed TD-8954 for potential use in the treatment of gastrointestinal motility disorders, including short-term intravenous use for enteral feeding intolerance ("EFI") to achieve early nutritional adequacy in critically ill patients at high nutritional risk, an indication for which the compound received US Food and Drug Administration ("FDA") Fast Track Designation. Under the terms of the Takeda Agreement, Takeda is responsible for worldwide development and commercialization of TD-8954. We received an upfront cash payment of $15.0 million and will be eligible to receive success based development, regulatory and sales milestone payments by Takeda. The first $110.0 million of potential milestones are associated with the development, regulatory and commercial launch milestones for EFI or other intravenously dosed indications. We will also be eligible to receive a tiered royalty on worldwide net sales by Takeda at percentage royalty rates ranging from low double-digits to mid-teens. The Takeda Agreement was finalized in the third quarter of 2016, and we recognized $15.1 million in revenue for the year ended December 31, 2016.

Alfasigma (formerly Alfa Wassermann)

Development and Collaboration Agreement

Under an October 2012 development and collaboration agreement for velusetrag, we and Alfasigma S.p.A ("Alfasigma") (formerly Alfa Wassermann S.p.A.) agreed to collaborate in the execution of a two-part Phase 2 program to test the efficacy, safety and tolerability of velusetrag in the treatment of patients with gastroparesis (a medical condition consisting of a paresis (partial paralysis) of the stomach, resulting in food remaining in the stomach for a longer time than normal). Alfasigma has an exclusive option to develop and commercialize velusetrag in the EU, Russia, China, Mexico and certain other countries, while we retain full rights to velusetrag in the United States, Canada, Japan and certain other countries. As part of this agreement, Alfasigma funded the majority of the costs associated with the Phase 2 gastroparesis program, which consisted of a Phase 2 study focused on gastric emptying and a Phase 2 study focused on symptoms. The Alfasigma agreement is considered to be under the scope of FASB Topic 808, Collaborative Arrangements. We concluded that the R&D cost reimbursement activities were not representative of a customer relationship and this unit of account is accounted for as a reduction of our R&D expenses, rather than as revenue. Now that these studies are complete, Alfasigma has the right to exercise its license option, and if it does so, we would receive a $10 million option fee, as well as potential development, regulatory and sales milestone payments and royalties.

Reimbursement of R&D Costs

Under certain collaborative arrangements, we are entitled to reimbursement of certain R&D costs. The following table summarizes the reductions to R&D expenses related to the reimbursement payments:

	Year Ended December 31,
(In thousands)	2017		2016		2015
Mylan	$	23,427	$	83,490	$	52,551
Alfasigma		—		7,113		2,122
Other		113		134		483

Total reduction to R&D expense	$	23,540	$	90,737	$	55,156

Segment Information

12 Months Ended

Dec. 31, 2017

Segment Information

Segment Information

3. Segment Information

We operate in a single segment, which is the discovery (research), development and commercialization of human therapeutics. The following table summarizes total revenue by geographic region:

	Year Ended December 31,
(In thousands)	2017		2016		2015
US	$	14,272	$	33,179	$	16,981
Europe		1,109		15,211		21,354
Asia		5		254		2,902
Other		—		4		889

Total revenue	$	15,386	$	48,648	$	42,126

The following table summarizes total revenue from each of our customers or collaboration partners who individually accounted for 10% or more of our total revenue (as a percentage of total revenues) during the most recent three years:

	Year Ended December 31,
(% of total revenue)	2017			2016			2015
Cardinal Health		28	%		—			—
AmerisourceBergen Drug Corp		25	%		—			—
McKesson Corp		23	%		—			—
Besse Medical		13	%		—			—
Mylan		—			31	%		46	%
Takeda		—			31	%		—
Trek Therapeutics		—			—			20	%

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/presentationRef
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Reference 3: http://www.xbrl.org/2003/role/presentationRef
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Reference 4: http://www.xbrl.org/2003/role/presentationRef
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-Publisher FASB
-Name Accounting Standards Codification
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-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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+ Details

Available-for-Sale Securities and Fair Value Measurements

12 Months Ended

Dec. 31, 2017

Available-for-Sale Securities and Fair Value Measurements

Available-for-Sale Securities and Fair Value Measurements

4. Available-for-Sale Securities and Fair Value Measurements

Available-for-Sale Securities

The estimated fair value of marketable securities is based on quoted market prices for these or similar investments that were based on prices obtained from a commercial pricing service. The fair value of our marketable securities classified within Level 2 is based upon observable inputs that may include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data including market research publications.

Available-for-sale securities are summarized below:

		December 31, 2017
(In thousands)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
US government securities	Level 1	$	89,896	$	—	$	(342	)	$	89,554
US government agency securities	Level 2		50,891		—		(113	)		50,778
Corporate notes	Level 2		141,226		2		(280	)		140,948
Commercial paper	Level 2		19,893		—		—			19,893

Marketable securities			301,906		2		(735	)		301,173
Money market funds	Level 1		69,055		—		—			69,055

Total		$	370,961	$	2	$	(735	)	$	370,228

		December 31, 2016
(In thousands)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
US government securities	Level 1	$	69,963	$	39	$	(47	)	$	69,955
US government agency securities	Level 2		60,783		9		(45	)		60,747
Corporate notes	Level 2		98,522		4		(213	)		98,313
Commercial paper	Level 2		18,937		—		—			18,937

Marketable securities			248,205		52		(305	)		247,952
Money market funds	Level 1		323,602		—		—			323,602

Total		$	571,807	$	52	$	(305	)	$	571,554

At December 31, 2017, all of the available-for-sale securities had contractual maturities within two years and the weighted average maturity of marketable securities was approximately seven months. There were no transfers between Level 1 and Level 2 during the periods presented.

We do not intend to sell the investments that are in an unrealized loss position, and it is unlikely that we will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. We have determined that the gross unrealized losses on our marketable securities at December 31, 2017 were temporary in nature. There were no material unrealized losses on investments which have been in a loss position for more than twelve months, and there were no sales of marketable securities in 2017, 2016 and 2015.

Non-Marketable Equity Securities and Other-Than-Temporary Impairment

In September 2015, Trek Therapeutics, PBC ("TREKtx") and we entered into a licensing agreement (the "TREKtx Agreement") granting TREKtx an exclusive worldwide license for the development, manufacturing, use, marketing and sale of our NS5A inhibitor known as TD-6450 as a component in combination hepatitis C virus ("HCV") products (the "HCV Products"). Pursuant to the TREKtx Agreement, we received an upfront payment of $8.0 million in the form of TREKtx's Series A preferred stock and would be eligible to receive future royalties based on net sales of the HCV Products. TREKtx is solely responsible for all future costs associated with the supply, manufacture, development, sale and marketing of the licensed compound.

At the date of the acquisition of the investment, we estimated the fair value of the consideration received to be $8.0 million based upon the price of similar Series A preferred stock that TREKtx sold to an independent third party for cash consideration. We also accounted for this investment using the cost method of accounting and recorded it in other investments on our consolidated balance sheets. We are not considered to be the primary beneficiary of TREKtx and therefore, do not consolidate the financial results of the company into our financial statements. Each of our equity investments is reviewed at least annually for impairment or whenever events or changes in circumstances indicate that the carrying value of the investment might not be recoverable.

During 2017, we identified indicators of impairment were present for our investment in TREKtx. We concluded that the impairment of this investment was other-than-temporary due to TREKtx's challenges in securing additional funding and, as a result, we recorded an impairment charge. Due to the uncertainty in the recovery of the investment, we recorded an impairment charge for the full carrying value of the investment. The $8.0 million other-than-temporary impairment charge is reported as "Other-than-temporary impairment loss" on the Consolidated Statements of Operations for the year ended December 31, 2017. As the inputs utilized for the assessment are not based on observable market data, the determination of fair value of this cost-method investment is classified within Level 3 of the fair value hierarchy. To determine the fair value of this investment, we used all available financial information related to the investee, including liquidity, rate of cash use, and ability to secure additional funding.

Theravance Respiratory Company, LLC	12 Months Ended
Theravance Respiratory Company, LLC	Dec. 31, 2017
Theravance Respiratory Company, LLC
Theravance Respiratory Company, LLC	5. Theravance Respiratory Company, LLC Prior to the spin-off from Innoviva, our former parent company, (the "Spin-Off") Innoviva assigned to Theravance Respiratory Company, LLC ("TRC"), a Delaware limited liability company formed by Innoviva, its strategic alliance agreement with GSK and all of its rights and obligations under its collaboration agreement with GSK other than with respect to RELVAR® ELLIPTA®/BREO® ELLIPTA®, ANORO® ELLIPTA® and vilanterol monotherapy. Through our 85% equity interests in TRC, we are entitled to receive an 85% economic interest in any future payments made by GSK under the strategic alliance agreement and under the portion of the collaboration agreement assigned to TRC. The drug programs assigned to TRC include Trelegy Ellipta (the combination of fluticasone furoate, umeclidinium, and vilanterol in a single ELLIPTA® inhaler, previously referred to as the Closed Triple) and the MABA program, as monotherapy and in combination with other therapeutically active components, such as an inhaled corticosteroid ("ICS"), and any other product or combination of products that may be discovered and developed in the future under the GSK agreements. On May 31, 2014, we entered into the TRC LLC Agreement with Innoviva that governs the operation of TRC. Under the TRC LLC Agreement, Innoviva is the manager of TRC, and the business and affairs of TRC are managed exclusively by the manager, including (i) day to day management of the drug programs in accordance with the existing GSK agreements, (ii) preparing an annual operating plan for TRC and (iii) taking all actions necessary to ensure that the formation, structure and operation of TRC complies with applicable law and partner agreements. We analyzed our ownership, contractual and other interests in TRC to determine if it is a variable-interest entity ("VIE"), whether we have a variable interest in TRC and the nature and extent of that interest. We determined that TRC is a VIE. The party with the controlling financial interest, the primary beneficiary, is required to consolidate the entity determined to be a VIE. Therefore, we also assessed whether we are the primary beneficiary of TRC based on the power to direct its activities that most significantly impact its economic performance and our obligation to absorb its losses or the right to receive benefits from it that could potentially be significant to TRC. Based on our assessment, we determined that we are not the primary beneficiary of TRC, and, as a result, we do not consolidate TRC in our consolidated financial statements. TRC is recognized on our consolidated financial statements under the equity method of accounting, and the value of our equity investment in TRC was not material for the periods presented. Commencing in the fourth quarter of 2017, we recognized $0.2 million in Interest and other income, net on our Consolidated Statements of Operations for the year ended December 31, 2017 which represented our share in the net income of TRC which was generated by royalty payments from GSK to TRC arising from the net sales of Trelegy Ellipta.

Long-Term Debt	12 Months Ended
Long-Term Debt	Dec. 31, 2017
Long-Term Debt
Long-Term Debt	6. Long-Term Debt In November 2016, we completed an underwritten public offering of $230.0 million of 3.250% convertible senior notes, due 2023 (the "Notes") for net proceeds of approximately $222.5 million. We incurred approximately $7.5 million in debt issuance costs, which are being amortized to interest expense over the estimated life of the Notes. The Notes bear an annual interest rate of 3.250%, payable semi-annually in arrears, on November 1 and May 1 of each year, which commenced on May 1, 2017. The Notes are our senior unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of our indebtedness that is not so subordinated; effectively junior in right of payment to any of our secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of our subsidiaries. The Notes will mature on November 1, 2023 (the "Maturity Date"), unless earlier redeemed or repurchased by us or converted. Holders may convert their Notes into ordinary shares at an initial conversion rate of 29.0276 shares for each $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $34.45 per share, subject to adjustment, in certain circumstances (including upon the occurrence of a fundamental change), at any time prior to the close of business on the second business day immediately preceding the Maturity Date. Upon the occurrence of a fundamental change involving the Company, holders of the Notes may require the Company to repurchase all or a portion of their Notes for cash at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In addition, in some circumstances, the conversion rate of the Notes will increase with a make whole premium for conversions in connection with certain fundamental changes. The debt issuance costs related to the Notes offering were capitalized as deferred financing costs and deducted from the carrying value of the financial liability on our consolidated balance sheets at December 31, 2017 and 2016. The estimated fair value of the Notes was $251.0 million and $266.2 million at December 31, 2017 and 2016, respectively. The estimated fair value was primarily based upon the underlying price of Theravance Biopharma's publicly traded shares and other observable inputs as of December 31, 2017. The inputs to determine fair value of the Notes are categorized as Level 2 inputs. Level 2 inputs include quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Inventories

12 Months Ended

Dec. 31, 2017

Inventories

Inventories

7. Inventories

Inventory consists of the following:

	December 31,
(In thousands)	2017		2016
Raw materials	$	11,729	$	6,067
Work-in-process		66		2,627
Finished goods		5,035		3,526

Total inventories	$	16,830	$	12,220

Property and Equipment

12 Months Ended

Dec. 31, 2017

Property and Equipment

Property and Equipment

8. Property and Equipment

Property and equipment are held in the US and Ireland and consists of the following:

	December 31,
(In thousands)	2017			2016
Computer equipment	$	1,866		$	1,434
Software		3,432			3,432
Furniture and fixtures		3,759			3,657
Laboratory equipment		28,371			26,315
Leasehold improvements		19,444			17,866

Subtotal		56,872			52,704
Less: accumulated depreciation		(46,715	)		(44,244	)

Property and equipment, net	$	10,157		$	8,460

For the years ended December 31, 2017, 2016 and 2015, depreciation expense for property and equipment was $2.5 million, $2.2 million and $2.5 million, respectively.

Share-Based Compensation

12 Months Ended

Dec. 31, 2017

Share-Based Compensation

Share-Based Compensation

9. Share-Based Compensation

Theravance Biopharma Equity Plans

We have three equity compensation plans—our 2013 Equity Incentive Plan (the "2013 EIP"), our 2013 Employee Share Purchase Plan (the "2013 ESPP") and our 2014 New Employee Equity Incentive Plan (the "2014 NEEIP"). At inception, we were authorized to issue 5,428,571 ordinary shares under the 2013 EIP, 857,142 ordinary shares under the 2013 ESPP, and 750,000 ordinary shares under the 2014 NEEIP.

The 2013 EIP provides for the issuance of share-based awards, including restricted shares, restricted share units, options, share appreciation rights ("SARs") and other equity-based awards, to our employees, officers, directors and consultants. As of January 1 of each year, commencing on January 1, 2015 and ending on (and including) January 1, 2023, the aggregate number of ordinary shares that may be issued under the 2013 EIP shall automatically increase by a number equal to the least of 5% of the total number of ordinary shares outstanding on December 31 of the prior year, 3,428,571 ordinary shares, or a number of ordinary shares determined by our board of directors. Options may be granted with an exercise price not less than the fair market value of the ordinary shares on the grant date. Under the terms of our 2013 EIP, options granted to employees generally have a maximum term of 10 years and vest over a four-year period from the date of grant; 25% vest at the end of one year, and 75% vest monthly over the remaining three years. We may grant options with different vesting terms from time to time. Unless an employee's termination of service is due to disability or death, upon termination of service, any unexercised vested options will generally be forfeited at the end of three months or the expiration of the option, whichever is earlier.

Under the 2013 ESPP, our officers and employees may purchase ordinary shares through payroll deductions at a price equal to 85% of the lower of the fair market value of the ordinary share at the beginning of the offering period or at the end of each applicable purchase period. As of January 1 of each year, commencing on January 1, 2015 and ending on (and including) January 1, 2033, the aggregate number of ordinary shares that may be issued under the 2013 ESPP shall automatically increase by a number equal to the least of 1% of the total number of ordinary shares outstanding on December 31 of the prior year, 571,428 ordinary shares or a number of ordinary shares determined by our board of directors. The ESPP generally provides for consecutive and overlapping offering periods of 24 months in duration, with each offering period generally composed of four consecutive six-month purchase periods. The purchase periods end on either May 15 or November 15. ESPP contributions are limited to a maximum of 15% of an employee's eligible compensation.

Our 2013 ESPP also includes a feature that provides for the existing offering period to terminate and for participants in that offering period to automatically be enrolled in a new offering period when the fair market value of an ordinary share at the beginning of a subsequent offering period falls below the fair market value of an ordinary share on the first day of such offering period.

The 2014 NEEIP provides for the issuance of share-based awards, including restricted shares, restricted share units, non-qualified options and SARs, to our employees. Options may be granted with an exercise price not less than the fair market value of the ordinary shares on the grant date. Under the terms of our 2014 NEEIP, options granted to employees generally have a maximum term of 10 years and vest over a four-year period from the date of grant; 25% vest at the end of one year, and 75% vest monthly over the remaining three years. We may grant options with different vesting terms from time to time. Unless an employee's termination of service is due to disability or death, upon termination of service, any unexercised vested options will generally be forfeited at the end of three months or the expiration of the option, whichever is earlier.

Innoviva's Equity Plans

Prior to the Spin-Off, our employees may have received Innoviva stock-based compensation awards, and, therefore, the following disclosures include information regarding stock-based compensation expense allocated to Theravance Biopharma that relates to Innoviva stock-based equity awards.

At the time of the Spin-Off, Innoviva had one active stock-based incentive plan under which it granted stock-based awards to employees, officers and consultants, the 2012 Equity Incentive Plan. All outstanding stock options and restricted stock units ("RSUs") held by (1) Innoviva employees who became our employees, and (2) members of the board of directors of Innoviva who became members of our board of directors, in connection with the Spin-Off were adjusted for the Spin-Off. Such awards, along with outstanding restricted stock awards ("RSAs") held by Innoviva employees who became our employees in connection with the Spin-Off, will continue to vest and remain outstanding based on continuing employment or service with us.

The 2012 Equity Incentive Plan provides for the grant of incentive stock options, non-statutory stock options, restricted stock awards, stock unit awards and SARs to employees, non-employee directors and consultants. Stock options were granted with an exercise price not less than the fair market value of the common stock on the grant date. Stock options granted to employees generally have a maximum term of 10 years and vest over a four year period from the date of grant; 25% vest at the end of one year, and 75% vest monthly over the remaining three years. However, Innoviva granted options with different vesting terms from time to time. Unless an employee's termination of service is due to disability or death, upon termination of service, any unexercised vested options will be forfeited at the end of three months or the expiration of the option, whichever is earlier.

Innoviva Performance-Contingent Restricted Stock Awards

In connection with performance-contingent RSAs granted to members of our senior management by Innoviva's board of directors prior to the Spin-Off in 2014, we recognized $1.0 million and $7.1 million in share-based compensation expense for the years ended December 31, 2016 and 2015, respectively. The expense recognition pertaining to these RSAs was completed in 2016.

Employee Share Option Exchange Program

On August 28, 2015, we gave eligible share option holders of the Company and its subsidiaries the opportunity to exchange some or all of their outstanding options granted under our 2013 EIP or our 2014 NEEIP before August 4, 2015, whether vested or unvested, for RSUs (the "Exchange Program"). The Exchange Program was designed to restore the intended employee retention and incentive value of our equity awards.

In accordance with the terms of the Exchange Program, employees who held options that had an exercise price above the market price of our ordinary shares at the offer expiration date were eligible to exchange two shares subject to eligible options for one RSU granted under the terms of our 2013 EIP. The RSUs granted under the Exchange Program will vest over a three or four year service period depending on the grant date of the original option exchanged. Our executive officers and members of our board of directors were not eligible to participate in the Exchange Program.

The Exchange Program closed on September 25, 2015, and we exchanged 1,975,009 outstanding options for 987,496 RSUs with a fair value of $12.43 per share. The exchange of options for RSUs is considered a modification to the terms of the original equity award. As such, the Exchange Program resulted in an incremental share-based compensation costs of $1.4 million to be recognized, concurrently with the unamortized original compensation costs of the exchanged option awards, ratably over the new vesting period of three years. For the years ended December 31, 2017, 2016, and 2015, we recognized $0.5 million, $0.5 million, and $0.1 million, respectively, of the $1.4 million in incremental share-based compensation costs.

Performance-Contingent Awards

In the first quarter of 2016, the Compensation Committee of our Board of Directors ("Compensation Committee") approved the grant of 1,575,000 performance-contingent RSAs and 135,000 performance-contingent RSUs to senior management. The vesting of such awards is dependent on the Company meeting its critical operating goals and objectives during a five-year period from 2016 to December 31, 2020. The goals that must be met in order for the performance-contingent RSAs and RSUs to vest are strategically important for the Company, and the Compensation Committee believes the goals, if achieved, will increase shareholder value. The awards have dual triggers of vesting based upon the achievement of these goals and continued employment. As of December 31, 2017, there were 1,305,000 of these performance-contingent RSAs and 135,000 of these performance-contingent RSUs outstanding, and as of December 31, 2016, there were 1,440,000 performance-contingent RSAs and 135,000 performance-contingent RSUs outstanding.

Expense associated with these awards is broken into three separate tranches and may be recognized during the years 2016 to 2020 depending on the probability of meeting the performance conditions. Compensation expense relating to awards subject to performance conditions is recognized if it is considered probable that the performance goals will be achieved. The probability of achievement is reassessed at each quarter-end reporting period.

In August 2016, the Compensation Committee determined not to award credit for a performance condition that occurred in the second quarter of 2016, which for accounting purposes was treated as a modification of the vesting conditions of all outstanding awards. As a result of the modification, the vesting of the first tranche of the awards changed from probable of achievement to improbable. The vesting of the second and third tranches of the awards were still considered improbable of achievement. As a result of the modification, there was a new measurement date for the second and third tranches of the awards as of the modification date. While the total number of shares under the awards did not change, the remeasurement of the awards resulted in a higher potential compensation charge for the awards because our share price had increased since the original measurement date. The revised maximum potential expense associated with the awards could be up to $35.5 million (allocated as $13.3 million for research and development expense and $22.2 million for selling, general and administrative expense) if all of the performance conditions are achieved. For the years ended December 31, 2017 and 2016, we recognized $2.6 million and $1.8 million, respectively, in share-based compensation expense related to our assessment of the probability that the performance conditions associated with the first tranche of these awards was considered to be probable of vesting. As of December 31, 2017, we assessed the probability that the performance conditions associated with the second tranche was probable of vesting and, as a result, $6.3 million was recognized for the year ended December 31, 2017 for the second tranche. We determined that the remaining third tranche was not probable of vesting at this time and, as a result, no compensation expense related to the third tranche has been recognized to date.

In 2017, the Compensation Committee approved the grant of 50,000 performance contingent RSUs to a newly appointed member of senior management. The RSUs have dual triggers of vesting based upon the achievement of certain corporate operating milestones in specified timelines, as well as a requirement for continued employment. When the performance goals are deemed to be probable of achievement, the recognition of the RSUs' share-based compensation expense will commence. As of December 31, 2017, we assessed the probability that the performance conditions associated with the first tranche of this award was probable of vesting and, as a result, $0.4 million in share-based compensation expense was recognized for the year ended December 31, 2017. The maximum potential expense associated with the first tranche is $0.8 million. We have determined that the remaining second tranche was not probable of vesting as of December 31, 2017 and, as a result, no compensation expense related to the second tranche has been recognized to date.

Share-Based Compensation Expense

The allocation of share-based compensation expense included in the consolidated statements of operations was as follows:

	Year Ended December 31,
(In thousands)	2017		2016		2015
Research and development	$	22,691	$	20,202	$	25,770
Selling, general and administrative		26,454		20,967		28,280

Total share-based compensation expense	$	49,145	$	41,169	$	54,050

Share-based compensation expense included in the consolidated statements of operations by award type was as follows:

	Year Ended December 31,
(In thousands)	2017		2016		2015
Innoviva equity:
Options	$	2,973	$	3,973	$	5,199
RSUs		224		1,547		3,292
RSAs		660		2,597		7,590
Performance RSAs		1		1,005		11,166
Theravance Biopharma equity:
Options		7,969		7,591		14,063
RSUs		25,959		20,946		10,471
Performance RSAs and RSUs		9,224		1,808		—
ESPP		2,135		1,702		2,269

Total share-based compensation expense	$	49,145	$	41,169	$	54,050

Total share-based compensation expense capitalized to inventory was not material for any of the periods presented.

As of December 31, 2017, the unrecognized share-based compensation cost, net of actual forfeitures, and the estimated weighted-average amortization period, using the straight-line attribution method, was as follows:

(In thousands, except amortization period)	Unrecognized Compensation Cost		Weighted-Average Amortization Period (Years)
Innoviva equity:
Options	$	293		0.3
RSAs		521		1.2
Theravance Biopharma equity:
Options		17,405		2.84
RSUs		52,238		2.44
Performance RSAs and RSUs(1)		9,600		1.40
ESPP		3,066		1.15

Total	$	83,123


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

Compensation Awards

The following table summarizes option activity under the 2013 EIP and 2014 NEEIP for the years ended December 31, 2017, 2016 and 2015:

	Number of Shares Subject to Outstanding Options			Weighted-Average Exercise Price of Outstanding Options
Outstanding at December 31, 2014		3,962,426		$	24.73
Granted		750,775			14.26
Forfeited		(2,402,037	)		23.05

Outstanding at December 31, 2015		2,311,164		$	23.07


Granted		474,675			24.06
Exercised		(197,328	)		22.18
Forfeited		(357,716	)		19.83

Outstanding at December 31, 2016		2,230,795		$	23.88


Granted		720,350			32.60
Exercised		(275,776	)		22.61
Forfeited		(166,800	)		25.70

Outstanding at December 31, 2017		2,508,569		$	26.40

As of December 31, 2017, 2016, and 2015, the aggregate intrinsic value of the options outstanding was $8.0 million, $18.1 million and $1.4 million, respectively. As of December 31, 2017, the aggregate intrinsic value of the options exercisable was $4.9 million. The total estimated fair value of options vested (excluding vested options that have expired) was $8.2 million, $7.7 million, and $10.7 million in 2017, 2016, and 2015, respectively.

The following table summarizes total RSU and RSA activity (including performance RSUs and RSAs) for the years ended December 31, 2017, 2016 and 2015:

	Number of Shares Subject to Outstanding RSUs			Number of Shares Outstanding Subject to Performance Conditions (RSAs)
Outstanding at December 31, 2014		—			—
Granted		3,399,924			—
Forfeited		(411,883	)		—

Outstanding at December 31, 2015		2,988,041			—


Granted		2,344,034			1,575,000
Released		(1,185,905	)		—
Forfeited		(537,052	)		(135,000	)

Outstanding at December 31, 2016		3,609,118			1,440,000


Granted		1,165,578			—
Released		(1,420,485	)		—
Forfeited		(456,453	)		(135,000	)

Outstanding at December 31, 2017		2,897,758			1,305,000

As of December 31, 2017, the aggregate intrinsic value of the RSUs and RSAs outstanding was $80.8 million and $36.4 million, respectively. The total estimated fair value of RSUs vested was $25.1 million, $21.4 million, and $1.6 million in 2017, 2016, and 2015, respectively.

Valuation Assumptions

The range of assumptions we used to estimate the fair value of options granted and rights granted under the 2013 ESPP was as follows:

	Year Ended December 31,
	2017	2016	2015
Options
Risk-free interest rate	2.0% - 2.1%	1.1% - 1.9%	1.4% - 1.9%
Expected term (in years)	6	6	6
Volatility	54% - 56%	53% - 73%	71% - 78%
Dividend yield	—	—	—
Weighted-average estimated fair value	$17.29	$13.28	$9.16
2013 ESPP
Risk-free interest rate	0.9% - 1.7%	0.4% - 1.0%	0.1% - 0.9%
Expected term (in years)	0.5 - 2.0	0.5 - 2.0	0.5 - 2.0
Volatility	41% - 56%	54% - 65%	46% - 62%
Dividend yield	—	—	—
Weighted-average estimated fair value	$7.09	$9.63	$5.91

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References + Details

Income Taxes

12 Months Ended

Dec. 31, 2017

Income Taxes

Income Taxes

10. Income Taxes

Theravance Biopharma was incorporated in the Cayman Islands in July 2013 under the name Theravance Biopharma, Inc. as a wholly-owned subsidiary of Innoviva and began operations subsequent to the Spin-Off with wholly-owned subsidiaries in the Cayman Islands, US, United Kingdom, and Ireland. Effective July 1, 2015, Theravance Biopharma became an Irish tax resident, therefore, the loss before income taxes of Theravance Biopharma, the parent company, are included in Ireland in the tables below.

The components of the loss before income taxes were as follows:

	December 31,
(In thousands)	2017			2016			2015
Income (loss) before provision for income taxes:
Cayman Islands	$	(163,770	)	$	(185,099	)	$	(107,074	)
United States		(33,374	)		(18,441	)		(45,960	)
Ireland		(74,472	)		23,323			(27,013	)
United Kingdom		(95	)		(342	)		(1,221	)

Total	$	(271,711	)	$	(180,559	)	$	(181,268	)

The components of provision for income taxes were as follows:

	December 31,
(In thousands)	2017			2016			2015
Provision for income taxes:
Current:
Cayman Islands	$	—		$	—		$	—
United States		13,091			9,859			883
Ireland		566			219			45
United Kingdom		37			32			23

Subtotal		13,694			10,110			951

Deferred		—			—			—

Total	$	13,694		$	10,110		$	951

Effective tax rate		(5.04	)%		(5.60	)%		(0.52	)%

The provision for income taxes was $13.7 million, $10.1 million, and $1.0 million in 2017, 2016, and 2015, respectively, although we incurred operating losses on a consolidated basis. In general, the provision for 2017, 2016, and 2015 resulted from recording contingent tax liabilities pertaining primarily to uncertain tax positions taken with respect to transfer pricing and tax credits.

No provision for income taxes has been recognized on undistributed earnings of our foreign subsidiaries because we consider such earnings to be indefinitely reinvested. In the event of a distribution of these earnings in the form of dividends or otherwise, we may be liable for income taxes, subject to an adjustment, if any, for foreign tax credits and foreign withholdings taxes payable to certain foreign tax authorities. As of December 31, 2017, there were no undistributed earnings.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were as follows:

	December 31,
(In thousands)	2017			2016
Deferred tax assets:
Net operating loss carryforwards	$	15,834		$	2,239
Research and development tax credit carryforwards		6,504			3,955
Fixed assets and acquired intangibles		3,746			6,839
Share-based compensation		11,140			13,208
Accruals		5,293			2,109
Other		248			476

Subtotal		42,765			28,826
Valuation allowance		(42,613	)		(28,465	)

Total deferred tax assets		152			361

Deferred tax liabilities:
Prepaid assets		(152	)		(361	)
Total deferred tax liabilities		(152	)		(361	)

Net deferred tax assets/liabilities	$	—		$	—

For 2017 and 2016, as a result of the Company becoming an Irish tax resident effective July 1, 2015, the tax rates reflect the Irish statutory rate of 25%. The differences between the Irish statutory income tax rate and our effective tax rates were as follows:

	Year Ended December 31,
	2017			2016			2015
Provision at statutory income tax rate		25.00	%		25.00	%		25.00	%
Foreign rate differential		(18.17	)		(23.11	)		(14.62	)
Change in valuation allowance		(5.15	)		(0.89	)		(4.42	)
Share-based compensation		1.52			(0.27	)		(4.15	)
Non-deductible executive compensation		(1.03	)		(1.07	)		(1.09	)
Uncertain tax positions		(6.55	)		(8.55	)		(3.88	)
Research and development tax credit carryforwards		1.21			1.93			2.05
Federal tax reform—Tax rate change		(4.66	)		—			—
Other		2.79			1.36			0.59

Effective tax rate		(5.04	)%		(5.60	)%		(0.52	)%

Realization of deferred tax assets is dependent upon future taxable income in the respective jurisdictions, if any, the timing and the amount of which are uncertain. Accordingly, the deferred tax assets have been fully offset by a valuation allowance.

The valuation allowance as of December 31, 2017 increased from $28.5 million (the valuation allowance as of December 31, 2016) to $42.6 million, primarily as a result of additional tax loss generated in Ireland during the current year, and partially offset by the reduction of the US deferred tax balance due to the enactment of the Tax Cuts and Jobs Acts on December 22, 2017 which saw the federal corporate tax rate decrease from 35% to 21%, effective January 1, 2018. Valuation allowances require an assessment of both positive and negative evidence when determining whether it is more likely than not that the deferred tax assets are recoverable. As required, we prepare our assessment of the realizability of deferred tax assets on a jurisdiction-by-jurisdiction basis.

As of December 31, 2017, we had $22.8 million of US federal net operating loss carryforwards and $7.5 million of federal research and development tax credit carryforwards which expire beginning in 2035. We had state net operating loss carryforwards of $31.0 million which generally begin to expire in 2034 and state research and development credit carryforwards of $10.1 million to be carried forward indefinitely.

On January 1, 2017, we adopted ASU 2016-09 that simplifies the accounting for certain aspects of share-based payments to employees. As a result of adoption, the previously unrecognized US excess tax benefits were recorded as a deferred tax asset, which was fully offset by a valuation allowance resulting in no impact to our accumulated deficit.

Utilization of net operating loss and tax credit carryforwards may be subject to an annual limitation due to ownership change limitations provided by the Internal Revenue Code and similar state provisions. Annual limitations may result in expiration of net operating loss and tax credit carryforwards before some or all of such amounts have been utilized.

Our policy is to recognize interest and/or penalties related to income tax matters in income tax expense. The amount of tax expense related to interest or penalties was immaterial for the years ended December 31, 2017 and 2016.

Uncertain Tax Positions

A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits were as follows:

(In thousands)
Unrecognized tax benefits as of December 31, 2015		9,198
Gross increase in tax positions for prior years		157
Gross increase in tax positions for current year		13,899

Unrecognized tax benefits as of December 31, 2016		23,254

Gross decrease in tax positions for prior years		(51	)
Gross increase in tax positions for current year		18,591

Unrecognized tax benefits as of December 31, 2017	$	41,794

The total unrecognized tax benefits of $41.8 million and $23.3 million, at December 31, 2017 and December 31, 2016, respectively, would reduce the effective tax rate in the period of recognition. As of December 31, 2017, we do not believe that it is reasonably possible that our unrecognized tax benefit will significantly decrease in the next twelve months. We currently have a full valuation allowance against our deferred tax assets, which would impact the timing of the effective tax rate benefit should any of these uncertain positions be favorably settled in the future.

We are subject to taxation in Ireland, the US, and various other jurisdictions. The tax years 2015 and forward remain open to examination in Ireland, tax years 2014 and forward remain open to examination in the US, and the tax years 2012 and forward remain open to examination in other jurisdictions.

Our future income tax expense may be affected by such factors as changes in tax laws, our business, regulations, tax rates, interpretation of existing laws or regulations, the impact of accounting for share-based compensation, the impact of accounting for business combinations, our international organization, shifts in the amount of income before tax earned in the US as compared with other regions in the world, and changes in overall levels of income before tax.

US Tax Reform

On December 22, 2017, the US government enacted the Tax Cuts and Jobs Acts (the "Tax Act"). The Tax Act significantly revises the US corporate income tax laws by, amongst other things, reducing the corporate income tax rate from 35% to 21% and implementing a modified territorial tax system that includes a one-time repatriation tax on accumulated undistributed foreign earnings.

Based on provisions of the Tax Act, we remeasured the deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The estimated amount of the remeasurement of our federal deferred tax balance was $12.4 million. However, as we recognize a valuation allowance on deferred tax assets, if it is more likely than not that the assets will not be realized in future years, there is no impact to effective tax rate, as any change to deferred taxes would be offset by valuation allowances.

The changes included in the Tax Act are broad and complex. The final transition impact of the Tax Act may differ from the above estimate, possibly materially, due to, among other things, changes in interpretations of the Tax Act, any legislative action to address questions that arise because of the Tax Act, any changes in accounting standards for income taxes or related interpretations in response to the Tax Act, or any updates or changes to estimates the Company has utilized to calculate the transition impact, including impact from changes to current year earnings estimates and foreign exchange rates of foreign subsidiaries. For example, one area where we are waiting on further guidance before finalizing our conclusion as to the impact of the Tax Act on our deferred tax assets and liabilities is the transition rules with respect to the tax deductibility of executive compensation. The Securities Exchange Commission has issued rules that would allow for a measurement period of up to one year after the enactment date of the Tax Act to finalize the recording of the related tax impacts. We currently anticipate finalizing and recording any resulting adjustments by December 22, 2018.

Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies

Commitments and Contingencies

11. Commitments and Contingencies

Operating Leases and Subleases

We lease approximately 170,000 square feet of office and laboratory space in two buildings in South San Francisco, California, under a non-cancelable operating lease that ends in May 2030. In addition, our Irish subsidiary leases approximately 6,100 square feet of office space in Dublin, Ireland. Future minimum lease payments under the leases, exclusive of executory costs, at December 31, 2017, are as follows:

(In thousands)
Years ending December 31:
2018	$	6,785
2019		6,974
2020		6,201
2021		9,522
Thereafter		90,162

Total	$	119,644

Rent expenses (net of sublease income) and sublease income associated with operating leases were as follows:

	Year Ended December 31,
(In thousands)	2017		2016		2015
Rent expense, net	$	7,740	$	6,865	$	6,522
Sublease income	$	209	$	244	$	186

Performance-Contingent Awards

In 2016, we granted long-term retention and incentive cash bonus awards to certain employees, in addition to RSAs and RSUs to members of senior management. The vesting and payout of such cash bonus awards is dependent on the Company meeting its critical operating goals and objectives during a five-year period from 2016 to December 31, 2020. These goals are strategically important for the Company, and we believe the goals, if achieved, will increase shareholder value. The cash bonus awards have dual triggers of vesting based upon the achievement of these goals and continued employment, and they are broken into three separate tranches. The maximum potential expense associated with all three tranches of the cash bonus awards is $52.9 million, which would be recognized in increments based on achievement of the performance conditions. The maximum potential expense associated with the first and second tranche of the cash bonus awards is $31.8 million. We have determined that achievement of the requisite performance conditions for the first and second tranches are probable due to achievement of certain performance conditions and multiple advancements of programs within our development pipeline and, as a result, we have recognized $18.2 million in cash bonus expense for the year ended December 31, 2017. We determined that the remaining third tranche was not probable of vesting and, as a result, no compensation expense related to this tranche has been recognized.

Guarantees and Indemnifications

We indemnify our officers and directors for certain events or occurrences, subject to certain limits. We believe the fair value of these indemnification agreements is minimal. Accordingly, we have not recognized any liabilities relating to these agreements as of December 31, 2017.

Subsequent Events	12 Months Ended
Subsequent Events	Dec. 31, 2017
Subsequent Events
Subsequent Events	12. Subsequent Events Janssen Collaboration Agreement On February 7, 2018, we announced a global co-development and commercialization agreement with Janssen Biotech, Inc. ("Janssen") for TD-1473 and related back-up compounds for inflammatory intestinal diseases, including ulcerative colitis and Crohn's disease. Under the terms of the agreement, we received an upfront payment of $100 million and will be eligible to receive up to an additional $900 million in potential payments, if Janssen elects to remain in the collaboration following the completion of certain Phase 2 activities. We and Janssen will jointly develop and commercialize TD-1473 in inflammatory intestinal diseases and share profits in the US and expenses related to a potential Phase 3 program (67% to Janssen; 33% to Theravance Biopharma). We would receive royalties on ex-US sales at double-digit tiered percentage royalty rates.

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

12 Months Ended

Dec. 31, 2017

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)

(In thousands, except per share data)

The following table presents certain unaudited consolidated quarterly financial information for the eight quarters in the periods ended December 31, 2017 and 2016. This information has been prepared on the same basis as the audited consolidated financial statements and includes all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the unaudited quarterly results of operations set forth herein.

	For the Quarters Ended
	March 31			June 30			September 30			December 31
2017
Total revenue	$	3,087		$	3,509		$	4,275		$	4,515
Costs and expenses		61,916			68,630			61,272			83,691
Loss from operations		(58,829	)		(65,121	)		(56,997	)		(79,176	)
Net loss		(65,319	)		(66,287	)		(66,877	)		(86,922	)
Basic and diluted net loss per share	$	(1.27	)	$	(1.27	)	$	(1.27	)	$	(1.64	)
2016
Total revenue	$	18,410		$	5,471		$	19,075		$	5,692
Costs and expenses		60,052			52,968			52,569			63,526
Loss from operations		(41,642	)		(47,497	)		(33,494	)		(57,834	)
Net loss		(42,150	)		(47,225	)		(33,962	)		(67,332	)
Basic and diluted net loss per share	$	(1.10	)	$	(1.06	)	$	(0.73	)	$	(1.36	)

Organization and Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Organization and Summary of Significant Accounting Policies

Basis of Presentation

Our consolidated financial statements have been prepared in conformity with US Generally Accepted Accounting Principles ("GAAP").

Principles of Consolidation

Use of Management's Estimates

Segment Reporting

All capitalized property and equipment is located in the US and Ireland.

Cash and Cash Equivalents

We consider all highly liquid investments purchased with a maturity of three months or less on the date of purchase to be cash equivalents. Cash equivalents are carried at fair value.

Restricted Cash

Investments Marketable Securities

Investments in Marketable Securities

Investments in Non-Marketable Equity Securities

Fair Value of Financial Instruments

Level 1—Quoted prices for identical instruments in active markets.

Level 3—Unobservable inputs and little, if any, market activity for the assets.

Accounts Receivable

Concentration of Credit Risks

Inventories

Property and Equipment

Property, equipment and leasehold improvements are stated at cost, net of accumulated depreciation and depreciated using the straight-line method as follows:

Leasehold improvements		Shorter of remaining lease terms or useful life
Equipment, furniture and fixtures		5 - 7 years
Software and computer equipment		3 - 5 years

Capitalized Software

Impairment of Long-Lived Assets

Deferred Rent

Revenue Recognition

Product Sales

Our reserve activity for sales allowances, discounts and chargebacks is summarized as follows:

(In thousands)	Balance at Beginning of Period		Charges		Deductions			Balance at End of Period
Year ended December 31, 2017:
Sales allowances, discounts and chargebacks	$	779	$	5,066	$	(4,853	)	$	992
Year ended December 31, 2016:
Sales allowances, discounts and chargebacks	$	758	$	6,337	$	(6,316	)	$	779
Year ended December 31, 2015:
Sales allowances, discounts and chargebacks	$	160	$	3,049	$	(2,451	)	$	758

Collaborative Arrangements and Multiple-Element Arrangements

Research and Development Expenses

As part of the process of preparing financial statements, we are required to estimate and accrue research and development expenses. This process involves the following:


	•	identifying services that have been performed on our behalf and estimating the level of service performed and the associated cost incurred for the service when we have not yet been invoiced or otherwise notified of actual cost;
	•	estimating and accruing expenses in our financial statements as of each balance sheet date based on facts and circumstances known to us at the time; and
	•	periodically confirming the accuracy of our estimates with selected service providers and making adjustments, if necessary.

Examples of estimated research and development expenses that we accrue include:


	•	fees paid to clinical research organizations ("CROs") in connection with preclinical and toxicology studies and clinical studies;
	•	fees paid to investigative sites in connection with clinical studies;
	•	fees paid to contract manufacturing organizations ("CMOs") in connection with the production of product and clinical study materials; and
	•	professional service fees for consulting and related services.

Advertising Expenses

Fair Value of Share-Based Compensation Awards

Compensation expense for purchases under the ESPP is recognized based on the fair value of the award on the date of offering.

Net Loss per Share

Anti-dilutive Securities

The following ordinary equivalent shares were not included in the computation of diluted net loss per share because their effect was anti-dilutive:

	Year Ended December 31,
(In thousands)	2017		2016		2015
Share issuances under equity incentive plans and ESPP		3,369		3,709		4,537
Restricted shares		6		33		202
Share issuances upon the conversion of convertible senior notes		6,676		6,676		—

		10,051		10,418		4,739

Amortization of Debt Issuance Costs from Convertible Senior Notes due 2023

Income Taxes

Comprehensive Loss

Comprehensive loss is comprised of net loss and changes in unrealized gains and losses on our available-for-sale investments.

Organization and Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Organization and Summary of Significant Accounting Policies

Schedule of property and equipment useful lives

Leasehold improvements		Shorter of remaining lease terms or useful life
Equipment, furniture and fixtures		5 - 7 years
Software and computer equipment		3 - 5 years

Schedule of reserve activity for sales allowances, discounts and chargebacks

(In thousands)	Balance at Beginning of Period		Charges		Deductions			Balance at End of Period
Year ended December 31, 2017:
Sales allowances, discounts and chargebacks	$	779	$	5,066	$	(4,853	)	$	992
Year ended December 31, 2016:
Sales allowances, discounts and chargebacks	$	758	$	6,337	$	(6,316	)	$	779
Year ended December 31, 2015:
Sales allowances, discounts and chargebacks	$	160	$	3,049	$	(2,451	)	$	758

Schedule of anti-dilutive securities

	Year Ended December 31,
(In thousands)	2017		2016		2015
Share issuances under equity incentive plans and ESPP		3,369		3,709		4,537
Restricted shares		6		33		202
Share issuances upon the conversion of convertible senior notes		6,676		6,676		—

		10,051		10,418		4,739

Collaborative Arrangements (Tables)

12 Months Ended

Dec. 31, 2017

Collaborative Arrangements

Schedule of revenue recognized from collaborative arrangements

	Year Ended December 31,
(In thousands)	2017		2016		2015
Mylan	$	102	$	15,102	$	19,175
R-Pharm		491		109		2,049
Takeda Pharmaceuticals		—		15,075		—
Trek Therapeutics		—		—		8,216
Various VIBATIV collaborative partners		5		259		3,278
Other		—		500		—

Total revenue from collaborative arrangements	$	598	$	31,045	$	32,718

Summary of reductions to R&D costs related to the reimbursement payments

	Year Ended December 31,
(In thousands)	2017		2016		2015
Mylan	$	23,427	$	83,490	$	52,551
Alfasigma		—		7,113		2,122
Other		113		134		483

Total reduction to R&D expense	$	23,540	$	90,737	$	55,156

Segment Information (Tables)

12 Months Ended

Dec. 31, 2017

Segment Information

Schedule of total revenue by geographic region

	Year Ended December 31,
(In thousands)	2017		2016		2015
US	$	14,272	$	33,179	$	16,981
Europe		1,109		15,211		21,354
Asia		5		254		2,902
Other		—		4		889

Total revenue	$	15,386	$	48,648	$	42,126

Schedule of total revenue from customers or collaboration partners who individually accounted for 10% or more of total revenue

	Year Ended December 31,
(% of total revenue)	2017			2016			2015
Cardinal Health		28	%		—			—
AmerisourceBergen Drug Corp		25	%		—			—
McKesson Corp		23	%		—			—
Besse Medical		13	%		—			—
Mylan		—			31	%		46	%
Takeda		—			31	%		—
Trek Therapeutics		—			—			20	%

Available-for-Sale Securities and Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

Available-for-Sale Securities and Fair Value Measurements

Schedule of available-for-sale securities

		December 31, 2017
(In thousands)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
US government securities	Level 1	$	89,896	$	—	$	(342	)	$	89,554
US government agency securities	Level 2		50,891		—		(113	)		50,778
Corporate notes	Level 2		141,226		2		(280	)		140,948
Commercial paper	Level 2		19,893		—		—			19,893

Marketable securities			301,906		2		(735	)		301,173
Money market funds	Level 1		69,055		—		—			69,055

Total		$	370,961	$	2	$	(735	)	$	370,228

		December 31, 2016
(In thousands)		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
US government securities	Level 1	$	69,963	$	39	$	(47	)	$	69,955
US government agency securities	Level 2		60,783		9		(45	)		60,747
Corporate notes	Level 2		98,522		4		(213	)		98,313
Commercial paper	Level 2		18,937		—		—			18,937

Marketable securities			248,205		52		(305	)		247,952
Money market funds	Level 1		323,602		—		—			323,602

Total		$	571,807	$	52	$	(305	)	$	571,554

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

+ References + Details

Inventories (Tables)

12 Months Ended

Dec. 31, 2017

Inventories

Schedule of inventories

	December 31,
(In thousands)	2017		2016
Raw materials	$	11,729	$	6,067
Work-in-process		66		2,627
Finished goods		5,035		3,526

Total inventories	$	16,830	$	12,220

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Property and Equipment

Schedule of property and equipment

	December 31,
(In thousands)	2017			2016
Computer equipment	$	1,866		$	1,434
Software		3,432			3,432
Furniture and fixtures		3,759			3,657
Laboratory equipment		28,371			26,315
Leasehold improvements		19,444			17,866

Subtotal		56,872			52,704
Less: accumulated depreciation		(46,715	)		(44,244	)

Property and equipment, net	$	10,157		$	8,460

Share-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2017

Share-Based Compensation

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

	Year Ended December 31,
(In thousands)	2017		2016		2015
Research and development	$	22,691	$	20,202	$	25,770
Selling, general and administrative		26,454		20,967		28,280

Total share-based compensation expense	$	49,145	$	41,169	$	54,050

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

	Year Ended December 31,
(In thousands)	2017		2016		2015
Innoviva equity:
Options	$	2,973	$	3,973	$	5,199
RSUs		224		1,547		3,292
RSAs		660		2,597		7,590
Performance RSAs		1		1,005		11,166
Theravance Biopharma equity:
Options		7,969		7,591		14,063
RSUs		25,959		20,946		10,471
Performance RSAs and RSUs		9,224		1,808		—
ESPP		2,135		1,702		2,269

Total share-based compensation expense	$	49,145	$	41,169	$	54,050

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

(In thousands, except amortization period)	Unrecognized Compensation Cost		Weighted-Average Amortization Period (Years)
Innoviva equity:
Options	$	293		0.3
RSAs		521		1.2
Theravance Biopharma equity:
Options		17,405		2.84
RSUs		52,238		2.44
Performance RSAs and RSUs(1)		9,600		1.40
ESPP		3,066		1.15

Total	$	83,123


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

Summary of option activity under the 2013 EIP and 2014 NEEIP

	Number of Shares Subject to Outstanding Options			Weighted-Average Exercise Price of Outstanding Options
Outstanding at December 31, 2014		3,962,426		$	24.73
Granted		750,775			14.26
Forfeited		(2,402,037	)		23.05

Outstanding at December 31, 2015		2,311,164		$	23.07


Granted		474,675			24.06
Exercised		(197,328	)		22.18
Forfeited		(357,716	)		19.83

Outstanding at December 31, 2016		2,230,795		$	23.88


Granted		720,350			32.60
Exercised		(275,776	)		22.61
Forfeited		(166,800	)		25.70

Outstanding at December 31, 2017		2,508,569		$	26.40

Schedule of RSU and RSA activity (including performance RSUs and RSAs)

	Number of Shares Subject to Outstanding RSUs			Number of Shares Outstanding Subject to Performance Conditions (RSAs)
Outstanding at December 31, 2014		—			—
Granted		3,399,924			—
Forfeited		(411,883	)		—

Outstanding at December 31, 2015		2,988,041			—


Granted		2,344,034			1,575,000
Released		(1,185,905	)		—
Forfeited		(537,052	)		(135,000	)

Outstanding at December 31, 2016		3,609,118			1,440,000


Granted		1,165,578			—
Released		(1,420,485	)		—
Forfeited		(456,453	)		(135,000	)

Outstanding at December 31, 2017		2,897,758			1,305,000

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

	Year Ended December 31,
	2017	2016	2015
Options
Risk-free interest rate	2.0% - 2.1%	1.1% - 1.9%	1.4% - 1.9%
Expected term (in years)	6	6	6
Volatility	54% - 56%	53% - 73%	71% - 78%
Dividend yield	—	—	—
Weighted-average estimated fair value	$17.29	$13.28	$9.16
2013 ESPP
Risk-free interest rate	0.9% - 1.7%	0.4% - 1.0%	0.1% - 0.9%
Expected term (in years)	0.5 - 2.0	0.5 - 2.0	0.5 - 2.0
Volatility	41% - 56%	54% - 65%	46% - 62%
Dividend yield	—	—	—
Weighted-average estimated fair value	$7.09	$9.63	$5.91

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Taxes

Schedule of components of the loss before income taxes

	December 31,
(In thousands)	2017			2016			2015
Income (loss) before provision for income taxes:
Cayman Islands	$	(163,770	)	$	(185,099	)	$	(107,074	)
United States		(33,374	)		(18,441	)		(45,960	)
Ireland		(74,472	)		23,323			(27,013	)
United Kingdom		(95	)		(342	)		(1,221	)

Total	$	(271,711	)	$	(180,559	)	$	(181,268	)

Schedule of the components of the provision for income taxes

	December 31,
(In thousands)	2017			2016			2015
Provision for income taxes:
Current:
Cayman Islands	$	—		$	—		$	—
United States		13,091			9,859			883
Ireland		566			219			45
United Kingdom		37			32			23

Subtotal		13,694			10,110			951

Deferred		—			—			—

Total	$	13,694		$	10,110		$	951

Effective tax rate		(5.04	)%		(5.60	)%		(0.52	)%

Significant components of the Company's deferred tax assets and liabilities

	December 31,
(In thousands)	2017			2016
Deferred tax assets:
Net operating loss carryforwards	$	15,834		$	2,239
Research and development tax credit carryforwards		6,504			3,955
Fixed assets and acquired intangibles		3,746			6,839
Share-based compensation		11,140			13,208
Accruals		5,293			2,109
Other		248			476

Subtotal		42,765			28,826
Valuation allowance		(42,613	)		(28,465	)

Total deferred tax assets		152			361

Deferred tax liabilities:
Prepaid assets		(152	)		(361	)
Total deferred tax liabilities		(152	)		(361	)

Net deferred tax assets/liabilities	$	—		$	—

Schedule of the differences between the Irish statutory income tax rate and the Company's effective tax rates

	Year Ended December 31,
	2017			2016			2015
Provision at statutory income tax rate		25.00	%		25.00	%		25.00	%
Foreign rate differential		(18.17	)		(23.11	)		(14.62	)
Change in valuation allowance		(5.15	)		(0.89	)		(4.42	)
Share-based compensation		1.52			(0.27	)		(4.15	)
Non-deductible executive compensation		(1.03	)		(1.07	)		(1.09	)
Uncertain tax positions		(6.55	)		(8.55	)		(3.88	)
Research and development tax credit carryforwards		1.21			1.93			2.05
Federal tax reform—Tax rate change		(4.66	)		—			—
Other		2.79			1.36			0.59

Effective tax rate		(5.04	)%		(5.60	)%		(0.52	)%

Reconciliation of unrecognized tax benefits

(In thousands)
Unrecognized tax benefits as of December 31, 2015		9,198
Gross increase in tax positions for prior years		157
Gross increase in tax positions for current year		13,899

Unrecognized tax benefits as of December 31, 2016		23,254

Gross decrease in tax positions for prior years		(51	)
Gross increase in tax positions for current year		18,591

Unrecognized tax benefits as of December 31, 2017	$	41,794

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies

Schedule of future minimum lease payments under the leases, exclusive of executory costs

Future minimum lease payments under the leases, exclusive of executory costs, at December 31, 2017, are as follows:

(In thousands)
Years ending December 31:
2018	$	6,785
2019		6,974
2020		6,201
2021		9,522
Thereafter		90,162

Total	$	119,644

Schedule of rent expenses (net of sublease income) and sublease income associated with operating leases

	Year Ended December 31,
(In thousands)	2017		2016		2015
Rent expense, net	$	7,740	$	6,865	$	6,522
Sublease income	$	209	$	244	$	186

Organization and Summary of Significant Accounting Policies - Basis of Presentation (Details) $ in Millions	Jan. 01, 2017 USD ($)
Accounting Standards Update 2016-09
New Accounting Pronouncements or Change in Accounting Principle
Excess tax benefits cumulative effect adjustment recorded to retained earnings	$ 0.1

- Definition

Amount of cumulative effect of the change in accounting principle or new accounting pronouncement on retained earnings or other components of equity or net assets in the statement of financial position as of the beginning of the earliest period presented.

+ References + Details

Organization and Summary of Significant Accounting Policies - Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Organization and Summary of Significant Accounting Policies
Excess inventory purchase commitments	$ 2,300
Excess inventory charge	3,000	$ 300	$ 1,900
Carrying value, finished goods inventory	$ 5,035	$ 3,526

Organization and Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2017
Equipment, furniture and fixtures \| Minimum
Property and Equipment
Estimated useful life	5 years
Equipment, furniture and fixtures \| Maximum
Property and Equipment
Estimated useful life	7 years
Software and computer equipment \| Minimum
Property and Equipment
Estimated useful life	3 years
Software and computer equipment \| Maximum
Property and Equipment
Estimated useful life	5 years

Organization and Summary of Significant Accounting Policies - Capitalized Software (Details) - Capitalized Software - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Property and Equipment
Capitalized costs software implementation	$ 0.5	$ 0.8
Estimated useful life	5 years	5 years

Organization and Summary of Significant Accounting Policies - Revenue Recognition, Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Allowance for Doubtful Accounts
Allowance for doubtful accounts	$ 0	$ 0
Sales allowances, discounts and chargebacks
Reserve activity
Balance at Beginning of Period	779	758	$ 160
Charges	5,066	6,337	3,049
Deductions	(4,853)	(6,316)	(2,451)
Balance at End of Period	$ 992	$ 779	$ 758

Organization and Summary of Significant Accounting Policies - Net Loss per Share (Details) - shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	10,051,000	10,418,000	4,739,000
Share issuances under equity incentive plan and ESPP
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	3,369,000	3,709,000	4,537,000
RSAs
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	6,000	33,000	202,000
Shares issuances upon the conversion of convertible senior notes
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	6,676,000	6,676,000	0
Performance-based vesting
Anti-Dilutive Securities
Anti-dilutive securities (in shares)	1,305,000	1,440,000

Organization and Summary of Significant Accounting Policies - Amortization of Debt Issuance Costs from Convertible Senior Notes due 2023 (Details) - USD ($) $ in Thousands		12 Months Ended
	Nov. 02, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Amortization of Debt Issuance Costs from Convertible Senior Notes
Net proceeds		$ 0	$ 222,498	$ 0
Convertible senior notes due 2023
Amortization of Debt Issuance Costs from Convertible Senior Notes
Aggregate principal amount	$ 230,000
Interest rate (as a percent)	3.25%
Net proceeds	$ 222,500
Transaction costs	$ 7,500

Organization and Summary of Significant Accounting Policies - Related Parties (Details) - USD ($) $ in Thousands		12 Months Ended
	Mar. 17, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Related party transactions
Proceeds from sale of ordinary shares, net		$ 0	$ 253,028	$ 79,017
GSK
Related party transactions
Ordinary shares held (in percent)		17.70%
Number of shares purchased	1,301,015
Proceeds from sale of ordinary shares, net	$ 23,000
Member board of directors
Related party transactions
Fees incurred related to related party		$ 300	$ 1,100	$ 1,100

Organization and Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements Not Yet Adopted (Details) $ in Millions	Mar. 31, 2019 property	Dec. 31, 2018 USD ($)
Accounting Standards Update 2016-02
New Accounting Pronouncements or Change in Accounting Principle
Number of properties \| property	2
Scenario, Adjustment \| Accounting Standards Update 2014-09
New Accounting Pronouncements or Change in Accounting Principle
Cumulative adjustment to decrease accumulated deficit \| $		$ 1.1

Collaborative Arrangements - Revenue from Collaborative Arrangements (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Collaborative Arrangements
Total revenue from collaborative arrangements		$ 598	$ 31,045	$ 32,718
Mylan
Collaborative Arrangements
Total revenue from collaborative arrangements		102	15,102	19,175
R-Pharm
Collaborative Arrangements
Total revenue from collaborative arrangements		491	109	2,049
Takeda
Collaborative Arrangements
Total revenue from collaborative arrangements	$ 15,000	0	15,075	0
Trek Therapeutics
Collaborative Arrangements
Total revenue from collaborative arrangements		0	0	8,216
Various VIBATIV collaborative partners
Collaborative Arrangements
Total revenue from collaborative arrangements		5	259	3,278
Other
Collaborative Arrangements
Total revenue from collaborative arrangements		$ 0	$ 500	$ 0

Collaborative Arrangements - Development and Commercialization Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended	12 Months Ended
	Jan. 30, 2015	Feb. 28, 2015	Jun. 30, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Collaborative Arrangements
Equity investments made in the entity				$ 1	$ 253,028	$ 79,017
Revenue from collaborative arrangements				598	31,045	32,718
Total reduction to R&D expense				23,540	90,737	55,156
Mylan
Collaborative Arrangements
Revenue from collaborative arrangements				102	15,102	19,175
Total reduction to R&D expense				23,427	83,490	52,551
Potential milestone or contingent payments				205,000
Mylan \| Purchase Agreement
Collaborative Arrangements
Equity investments made in the entity		$ 30,000
Number of shares purchased		1,585,790
Share Price		$ 18.918
Price per share premium (as a percent)		10.00%
Trading days	5 days
Premium proceeds from sale of ordinary shares						4,200
Mylan \| Development and Commercialization Agreement
Collaborative Arrangements
Initial cash payment			$ 15,000			$ 15,000
Mylan \| Revefenacin Monotherapy (TD-4208)
Collaborative Arrangements
Potential milestone or contingent payments				160,000
Mylan \| Future potential combination products
Collaborative Arrangements
Potential milestone or contingent payments				45,000
Mylan \| Milestone - 50% enrollment in Phase 3 twelve-month safety study
Collaborative Arrangements
Milestone payment					$ 15,000
Mylan \| Commercialization \| Revefenacin Monotherapy (TD-4208)
Collaborative Arrangements
Potential milestone or contingent payments				150,000
Mylan \| Regulatory actions \| Revefenacin Monotherapy (TD-4208) \| European Union
Collaborative Arrangements
Potential milestone or contingent payments				$ 10,000

Collaborative Arrangements - Takeda and Wassermann Agreement (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Jun. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Collaborative Arrangements
Revenue from collaborative arrangements		$ 598	$ 31,045	$ 32,718
Takeda
Collaborative Arrangements
Revenue from collaborative arrangements	$ 15,000	0	$ 15,075	$ 0
Takeda \| Success Based Development Regulatory And Sales Milestones
Collaborative Arrangements
Potential milestone or contingent payments	$ 110,000
Alfasigma (formerly Alfa Wassermann) \| Alfasigma license option
Collaborative Arrangements
Potential milestone or contingent payments		$ 10,000

Collaborative Arrangements - Reimbursement of R&D Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Research and Development Reimbursement
Total reduction to R&D expense	$ 23,540	$ 90,737	$ 55,156
Mylan
Research and Development Reimbursement
Total reduction to R&D expense	23,427	83,490	52,551
Alfasigma (formerly Alfa Wassermann)
Research and Development Reimbursement
Total reduction to R&D expense	0	7,113	2,122
Other
Research and Development Reimbursement
Total reduction to R&D expense	$ 113	$ 134	$ 483

Segment Information - Geographic region (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Segment Information
Total revenue	$ 4,515	$ 4,275	$ 3,509	$ 3,087	$ 5,692	$ 19,075	$ 5,471	$ 18,410	$ 15,386	$ 48,648	$ 42,126
United States
Segment Information
Total revenue									14,272	33,179	16,981
Europe
Segment Information
Total revenue									1,109	15,211	21,354
Asia
Segment Information
Total revenue									5	254	2,902
Other
Segment Information
Total revenue									$ 0	$ 4	$ 889

Segment Information - Percentage of Revenue (Details) - Total revenue - Customer concentration risk	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cardinal Health
Segment Information
Percentage of total revenues	28.00%
AmerisourceBergen Drug Corp
Segment Information
Percentage of total revenues	25.00%
McKesson Corp
Segment Information
Percentage of total revenues	23.00%
Besse Medical
Segment Information
Percentage of total revenues	13.00%
Mylan
Segment Information
Percentage of total revenues	0.00%	31.00%	46.00%
Takeda
Segment Information
Percentage of total revenues	0.00%	31.00%
Trek Therapeutics
Segment Information
Percentage of total revenues	0.00%		20.00%

Available-for-Sale Securities and Fair Value Measurements - Available for sale securities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Available for sale securities:
Amortized Cost	$ 370,961	$ 571,807
Gross Unrealized Gains	2	52
Gross Unrealized Losses	(735)	(305)
Estimated Fair Value	370,228	571,554
Marketable securities
Available for sale securities:
Amortized Cost	301,906	248,205
Gross Unrealized Gains	2	52
Gross Unrealized Losses	(735)	(305)
Estimated Fair Value	301,173	247,952
U.S. government securities \| Level 1
Available for sale securities:
Amortized Cost	89,896	69,963
Gross Unrealized Gains	0	39
Gross Unrealized Losses	(342)	(47)
Estimated Fair Value	89,554	69,955
U.S. government agency securities \| Level 2
Available for sale securities:
Amortized Cost	50,891	60,783
Gross Unrealized Gains	0	9
Gross Unrealized Losses	(113)	(45)
Estimated Fair Value	50,778	60,747
Corporate notes \| Level 2
Available for sale securities:
Amortized Cost	141,226	98,522
Gross Unrealized Gains	2	4
Gross Unrealized Losses	(280)	(213)
Estimated Fair Value	140,948	98,313
Commercial paper \| Level 2
Available for sale securities:
Amortized Cost	19,893	18,937
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair Value	19,893	18,937
Money market funds \| Level 1
Available for sale securities:
Amortized Cost	69,055	323,602
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Estimated Fair Value	$ 69,055	$ 323,602

Available-for-Sale Securities and Fair Value Measurements - Transfers (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Available-for-Sale Securities and Fair Value Measurements
Maximum contractual maturity period	2 years
Weighted average contractual maturity period	7 months
Net unrealized losses	$ 0
Available-for-sale securities sold	0	$ 0	$ 0
Fair value transfers
Fair value of assets transferred from Level 1 to Level 2	0
Fair value of assets transferred from Level 2 to Level 1	0
Fair value of liabilities transferred from Level 1 to Level 2	0
Fair value of liabilities transferred from Level 2 to Level 1	$ 0

Available-for-Sale Securities and Fair Value Measurements - Non-Marketable Equity Securities and Other-Than-Temporary Impairment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Sep. 30, 2015
Available-for-Sale Securities and Fair Value Measurements
Consideration received, fair value				$ 8,000
Other-than-temporary impairment loss	$ 8,000	$ 0	$ 0

Theravance Respiratory Company, LLC (Details) - TRC $ in Millions	12 Months Ended
	Dec. 31, 2017 USD ($)
Theravance Respiratory Company, LLC
Equity interest	85.00%
Interest and Other Income	$ 0.2

Long-Term Debt (Details) - USD ($)		12 Months Ended
Long-Term Debt (Details) - USD ($)	Nov. 02, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Long-Term Debt
Net proceeds		$ 0	$ 222,498,000	$ 0
Convertible senior notes due 2023
Long-Term Debt
Proceeds from issuance of debt	$ 230,000,000
Interest rate (as a percent)	3.25%
Net proceeds	$ 222,500,000
Transaction costs	$ 7,500,000
Conversion rate, in shares		29.0276
Principal amount for conversion rate		$ 1,000
Conversion price (in dollars per share)		$ 34.45
Redemption price to principal amount, in percent		100.00%
Convertible senior notes due 2023 \| Level 2
Long-Term Debt
Notes fair value		$ 251,000,000	$ 266,200,000

Inventories (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Inventories
Raw materials	$ 11,729	$ 6,067
Work-in-process	66	2,627
Finished goods	5,035	3,526
Total inventories	$ 16,830	$ 12,220

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
Property and Equipment (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property and Equipment
Property and equipment, gross	$ 56,872	$ 52,704
Less: accumulated depreciation	(46,715)	(44,244)
Property and equipment, net	10,157	8,460
Depreciation expense	2,500	2,200	$ 2,500
Computer equipment
Property and Equipment
Property and equipment, gross	1,866	1,434
Software
Property and Equipment
Property and equipment, gross	3,432	3,432
Equipment, furniture and fixtures
Property and Equipment
Property and equipment, gross	3,759	3,657
Laboratory equipment
Property and Equipment
Property and equipment, gross	28,371	26,315
Leasehold improvements
Property and Equipment
Property and equipment, gross	$ 19,444	$ 17,866

Share-Based Compensation - Theravance Biopharma Equity Plans (Details)			12 Months Ended
	Sep. 25, 2015	Jun. 02, 2014 plan	Dec. 31, 2014 shares	Dec. 31, 2013 item shares
Share-Based Compensation
Number of plans \| plan		3
Vesting period	3 years
2013 EIP
Share-Based Compensation
Shares approved for grant (in shares)				5,428,571
2013 EIP \| Maximum
Share-Based Compensation
Shares that may be issued as percent of prior year outstanding shares				5.00%
Automatic increase in number of shares that may be issued				3,428,571
2013 EIP \| Options
Share-Based Compensation
Term (in years)				10 years
Vesting period				4 years
Period of forfeiture of unvested option upon termination of service				3 months
2013 EIP \| Options \| Vesting after one year
Share-Based Compensation
Portion vesting (as a percent)				25.00%
2013 EIP \| Options \| Monthly vesting over the remaining three years
Share-Based Compensation
Portion vesting (as a percent)				75.00%
2013 ESPP
Share-Based Compensation
Shares approved for grant (in shares)				857,142
Purchase price as a percentage of fair market value of stock				85.00%
Consecutive and overlapping offering periods				24 months
Number of purchase periods \| item				4
Duration of purchase period				6 months
Maximum contribution as percent of compensation				15.00%
2013 ESPP \| Maximum
Share-Based Compensation
Shares that may be issued as percent of prior year outstanding shares				1.00%
Automatic increase in number of shares that may be issued				571,428
2014 NEEIP
Share-Based Compensation
Shares approved for grant (in shares)			750,000
2014 NEEIP \| Options
Share-Based Compensation
Term (in years)			10 years
Vesting period			4 years
Period of forfeiture of unvested option upon termination of service			3 months
2014 NEEIP \| Options \| Vesting after one year
Share-Based Compensation
Portion vesting (as a percent)			25.00%
2014 NEEIP \| Options \| Monthly vesting over the remaining three years
Share-Based Compensation
Portion vesting (as a percent)			75.00%

Share-Based Compensation - Innoviva's Equity Plans (Details) - plan	Sep. 25, 2015	Jun. 02, 2014
Share-Based Compensation
Number of plans		3
Vesting period	3 years
2012 Equity Incentive Plan
Share-Based Compensation
Number of plans		1
2012 Equity Incentive Plan \| Options
Share-Based Compensation
Term (in years)		10 years
Vesting period		4 years
Period of forfeiture of unvested option upon termination of service		3 months
Vesting after one year \| 2012 Equity Incentive Plan \| Options
Share-Based Compensation
Portion vesting (as a percent)		25.00%
Monthly vesting over the remaining three years \| 2012 Equity Incentive Plan \| Options
Share-Based Compensation
Portion vesting (as a percent)		75.00%

Share-Based Compensation - Innoviva Performance Contingent Restricted Stock Awards (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-Based Compensation
Share-based compensation expense	$ 49,145	$ 41,169	$ 54,050
Senior management \| Performance-Contingent Awards - RSAs
Share-Based Compensation
Share-based compensation expense		$ 1,000	$ 7,100

Share-Based Compensation - Employee Share Option Exchange Program (Details) $ / shares in Units, $ in Thousands			12 Months Ended
	Sep. 25, 2015 USD ($) $ / shares shares	Aug. 28, 2015	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($) shares	Dec. 31, 2015 USD ($) shares
Share-Based Compensation
Vesting period	3 years
Total incremental stock-based compensation expense recognized	$ 1,400
Share-based compensation expense			$ 49,145	$ 41,169	$ 54,050
Options
Share-Based Compensation
Options exchanged (in shares) \| shares	1,975,009
Share-based compensation expense			$ 7,969	$ 7,591	$ 14,063
RSUs
Share-Based Compensation
Exchange ratio		2
RSUs issued (in shares) \| shares	987,496		1,165,578	2,344,034	3,399,924
Fair value (USD per share) \| $ / shares	$ 12.43
Share-based compensation expense			$ 25,959	$ 20,946	$ 10,471
Minimum \| RSUs
Share-Based Compensation
Vesting period		3 years
Maximum \| RSUs
Share-Based Compensation
Vesting period		4 years
Employer Share Option Exchange Program
Share-Based Compensation
Share-based compensation expense			$ 500	$ 500	$ 100

Share-Based Compensation - Performance Contingent Awards (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Aug. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Mar. 31, 2016	Dec. 31, 2014
Share-Based Compensation
Share-based compensation expense		$ 49,145	$ 41,169	$ 54,050
Research and development
Share-Based Compensation
Share-based compensation expense		22,691	20,202	25,770
Selling, general and administrative
Share-Based Compensation
Share-based compensation expense		$ 26,454	$ 20,967	$ 28,280
Performance-Contingent Awards - RSUs
Share-Based Compensation
Shares approved for grant (in shares)		50,000			135,000
Awards outstanding (in shares)		135,000	135,000
Performance-Contingent Awards - RSAs
Share-Based Compensation
Shares approved for grant (in shares)					1,575,000
Awards outstanding (in shares)		1,305,000	1,440,000	0		0
Performance-Contingent Awards - RSAs \| Senior management
Share-Based Compensation
Share-based compensation expense			$ 1,000	$ 7,100
Maximum potential expense
Share-Based Compensation
Share-based compensation expense	$ 35,500
Maximum potential expense \| Research and development
Share-Based Compensation
Share-based compensation expense	13,300
Maximum potential expense \| Selling, general and administrative
Share-Based Compensation
Share-based compensation expense	$ 22,200
First tranche
Share-Based Compensation
Share-based compensation expense		$ 2,600	$ 1,800
First tranche \| Performance-Contingent Awards - RSUs
Share-Based Compensation
Share-based compensation expense		400
First tranche \| Maximum potential expense \| Performance-Contingent Awards - RSUs
Share-Based Compensation
Share-based compensation expense		800
Second tranche
Share-Based Compensation
Share-based compensation expense		6,300
Second tranche \| Maximum potential expense \| Performance-Contingent Awards - RSUs
Share-Based Compensation
Share-based compensation expense		0
Third tranche
Share-Based Compensation
Share-based compensation expense		$ 0

Share-Based Compensation - Share Based Compensation Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-Based Compensation
Share-based compensation expense	$ 49,145	$ 41,169	$ 54,050
Research and development
Share-Based Compensation
Share-based compensation expense	22,691	20,202	25,770
Selling, general and administrative
Share-Based Compensation
Share-based compensation expense	$ 26,454	$ 20,967	$ 28,280

Share-Based Compensation - Share Based Compensation Expense By Type (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-Based Compensation
Share-based compensation expense	$ 49,145	$ 41,169	$ 54,050
Unrecognized compensation cost	83,123
Options
Share-Based Compensation
Share-based compensation expense	7,969	7,591	14,063
Unrecognized compensation cost	$ 17,405
Weighted-average amortization period - years	2 years 10 months 2 days
RSUs
Share-Based Compensation
Share-based compensation expense	$ 25,959	20,946	10,471
Unrecognized compensation cost	$ 52,238
Weighted-average amortization period - years	2 years 5 months 9 days
Performance-Contingent Awards - RSAs and RSUs
Share-Based Compensation
Share-based compensation expense	$ 9,224	1,808	0
Unrecognized compensation cost	$ 9,600
Weighted-average amortization period - years	1 year 4 months 24 days
ESPP
Share-Based Compensation
Share-based compensation expense	$ 2,135	1,702	2,269
Unrecognized compensation cost	$ 3,066
Weighted-average amortization period - years	1 year 1 month 24 days
Innoviva \| Options
Share-Based Compensation
Share-based compensation expense	$ 2,973	3,973	5,199
Unrecognized compensation cost	$ 293
Weighted-average amortization period - years	3 months 18 days
Innoviva \| RSUs
Share-Based Compensation
Share-based compensation expense	$ 224	1,547	3,292
Innoviva \| RSAs
Share-Based Compensation
Share-based compensation expense	660	2,597	7,590
Unrecognized compensation cost	$ 521
Weighted-average amortization period - years	1 year 2 months 12 days
Innoviva \| Performance-Contingent Awards - RSAs
Share-Based Compensation
Share-based compensation expense	$ 1	$ 1,005	$ 11,166

Share-Based Compensation - Compensation Awards (Details) - 2013 EIP and 2014 NEEIP - USD ($) $ / shares in Units, $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Number of Shares Subject To Outstanding Options
Balance at the beginning of period	2,230,795	2,311,164	3,962,426
Granted ( in shares)	720,350	474,675	750,775
Exercised (in shares)	(275,776)	(197,328)
Forfeited (in shares)	(166,800)	(357,716)	(2,402,037)
Balance at the end of period	2,508,569	2,230,795	2,311,164
Weighted-Average Exercise Price of Outstanding Options
Balance at the beginning of the period (in dollars per share)	$ 23.88	$ 23.07	$ 24.73
Granted (in dollars per share)	32.60	24.06	14.26
Exercised (in dollars per share)	22.61	22.18
Forfeited (in dollars per share)	25.70	19.83	23.05
Balance at the end of the period (in dollars per share)	$ 26.40	$ 23.88	$ 23.07
Additional disclosures
Aggregate intrinsic value of options outstanding	$ 8.0	$ 18.1	$ 1.4
Aggregate intrinsic value of options exercisable	4.9
Total estimated fair value of options vested	$ 8.2	$ 7.7	$ 10.7

Share-Based Compensation - RSU and RSA activity (Details) - USD ($) $ in Millions		12 Months Ended
	Sep. 25, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
RSUs
RSU and RSA activity ( including Performance RSUs and RSAs)
Outstanding at beginning of year		3,609,118	2,988,041	0
Granted (in shares)	987,496	1,165,578	2,344,034	3,399,924
Released (in shares)		(1,420,485)	(1,185,905)
Forfeited (in shares)		(456,453)	(537,052)	(411,883)
Outstanding at end of year		2,897,758	3,609,118	2,988,041
Additional disclosures
Aggregate intrinsic value outstanding		$ 80.8
Total estimated fair value of RSUs vested		25.1	$ 21.4	$ 1.6
RSAs
Additional disclosures
Aggregate intrinsic value outstanding		$ 36.4
Performance-Contingent Awards - RSAs
RSU and RSA activity ( including Performance RSUs and RSAs)
Outstanding at beginning of year		1,440,000	0	0
Granted (in shares)		0	1,575,000	0
Released (in shares)		0	0
Forfeited (in shares)		(135,000)	(135,000)	0
Outstanding at end of year		1,305,000	1,440,000	0

Share-Based Compensation - Valuation Assumptions (Details) - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Options
Weighted-average assumptions
Risk-free interest rate, minimum (as a percent)	2.00%	1.10%	1.40%
Risk-free interest rate, maximum (as a percent)	2.10%	1.90%	1.90%
Expected term (in years)		6 years
Expected volatility, minimum (as a percent)	54.00%	53.00%	71.00%
Expected volatility, maximum (as a percent)	56.00%	73.00%	78.00%
Dividend yield (as a percent)	0.00%	0.00%	0.00%
Weighted-average estimated fair value (in dollars per share)	$ 17.29	$ 13.28	$ 9.16
Maximum \| Options
Weighted-average assumptions
Expected term (in years)			6 years
2013 ESPP
Weighted-average assumptions
Risk-free interest rate, minimum (as a percent)	0.90%	0.40%	0.10%
Risk-free interest rate, maximum (as a percent)	1.70%	1.00%	0.90%
Expected volatility, minimum (as a percent)	41.00%	54.00%	46.00%
Expected volatility, maximum (as a percent)	56.00%	65.00%	62.00%
Dividend yield (as a percent)	0.00%	0.00%	0.00%
Weighted-average estimated fair value (in dollars per share)	$ 7.09	$ 9.63	$ 5.91
2013 ESPP \| Minimum
Weighted-average assumptions
Expected term (in years)	6 months	6 months	6 months
2013 ESPP \| Maximum
Weighted-average assumptions
Expected term (in years)	2 years	2 years	2 years

Income Taxes - Components of loss before income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Taxes
Loss before income taxes	$ (271,711)	$ (180,559)	$ (181,268)
Cayman Islands
Income Taxes
Loss before income taxes	(163,770)	(185,099)	(107,074)
United States
Income Taxes
Loss before income taxes	(33,374)	(18,441)	(45,960)
Ireland
Income Taxes
Loss before income taxes	(74,472)	23,323	(27,013)
United Kingdom
Income Taxes
Loss before income taxes	$ (95)	$ (342)	$ (1,221)

Income Taxes - Components of provision for income taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Provision for income taxes
Current	$ 13,694	$ 10,110	$ 951
Deferred	0	0	0
Total	$ 13,694	$ 10,110	$ 951
Effective tax rate (as a percent)	(5.04%)	(5.60%)	(0.52%)
Provision for income taxes on undistributed earnings of foreign subsidiaries	$ 0
Undistributed earnings	0
Cayman Islands
Provision for income taxes
Current	0	$ 0	$ 0
United States
Provision for income taxes
Current	13,091	9,859	883
Ireland
Provision for income taxes
Current	566	219	45
United Kingdom
Provision for income taxes
Current	$ 37	$ 32	$ 23

Income Taxes - Deferred income taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Income Taxes
Net deferred tax assets/liabilities	$ 0	$ 0
Deferred tax assets:
Net operating loss carryforwards	15,834	2,239
Research and development tax credit carryforwards	6,504	3,955
Fixed assets and acquired intangibles	3,746	6,839
Share-based compensation	11,140	13,208
Accruals	5,293	2,109
Other	248	476
Subtotal	42,765	28,826
Valuation allowance	(42,613)	(28,465)
Total deferred tax assets	152	361
Deferred tax liabilities:
Prepaid assets	(152)	(361)
Total deferred tax liabilities	$ (152)	$ (361)

Income Taxes - Irish statutory rate reconciliation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
The differences between the U.S. federal statutory income tax rate to the Company's effective tax rate
Provision at statutory income tax rate (as a percent)		35.00%
Foreign rate differential (as a percent)		(18.17%)	(23.11%)	(14.62%)
Change in valuation allowance (as a percent)		(5.15%)	(0.89%)	(4.42%)
Share-based compensation (as a percent)		1.52%	(0.27%)	(4.15%)
Non-deductible executive compensation (as a percent)		(1.03%)	(1.07%)	(1.09%)
Uncertain tax positions (as a percent)		(6.55%)	(8.55%)	(3.88%)
Research and development tax credit carryforwards (as a percent)		1.21%	1.93%	2.05%
Federal tax reforms - Tax rate change		(4.66%)	0.00%	0.00%
Other (as a percent)		2.79%	1.36%	0.59%
Effective tax rate (as a percent)		(5.04%)	(5.60%)	(0.52%)
Information related to valuation allowance
Valuation allowance		$ 42,613	$ 28,465
Ireland
The differences between the U.S. federal statutory income tax rate to the Company's effective tax rate
Provision at statutory income tax rate (as a percent)		25.00%	25.00%	25.00%
Forecast
The differences between the U.S. federal statutory income tax rate to the Company's effective tax rate
Provision at statutory income tax rate (as a percent)	21.00%
Federal
Information related to valuation allowance
Net operating loss carryforwards		$ 22,800
Federal \| Research and Development
Information related to valuation allowance
Tax credit carryforward amount		7,500
State
Information related to valuation allowance
Net operating loss carryforwards		31,000
State \| Research and Development
Information related to valuation allowance
Net operating loss carryforwards		$ 10,100

Income Taxes - Uncertain Tax Positions (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Gross unrecognized tax benefits
Unrecognized tax benefits at the beginning of the period	$ 23,254	$ 9,198
Gross increase in tax positions for prior year		157
Gross increase in tax positions for current year	18,591	13,899
Gross decrease in tax positions for prior years	(51)
Unrecognized tax benefits at the end of the period	$ 41,794	$ 23,254

Income Taxes - US Tax Reform (Details) - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Income Taxes
Provision at statutory income tax rate (as a percent)		35.00%
Forecast
Income Taxes
Provision at statutory income tax rate (as a percent)	21.00%
Federal deferred tax	$ 12.4

Commitments and Contingencies - Operating Leases and Subleases (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) ft² item	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Future minimum lease payments
2018	$ 6,785
2019	6,974
2020	6,201
2021	9,522
Thereafter	90,162
Total	$ 119,644
United States
Operating Leases and Subleases
Square feet of office and laboratory space \| ft²	170,000
Number of buildings \| item	2
Ireland
Operating Leases and Subleases
Square feet of office and laboratory space \| ft²	6,100
Operating Leases
Future minimum lease payments
Rent expense, net	$ 7,740	$ 6,865	$ 6,522
Sublease income	$ 209	$ 244	$ 186

Commitments and Contingencies - Performance-Contingent Awards (Details) - Long-Term Retention and Incentive Cash Bonus Awards - Employees - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Commitments and Contingencies
Service-based vesting period		5 years
Maximum potential of compensation expenses		$ 52.9
First and Second tranches
Commitments and Contingencies
Share-based compensation expense recognized	$ 18.2
Maximum potential of compensation expenses		$ 31.8
Third tranche
Commitments and Contingencies
Share-based compensation expense recognized	$ 0.0

Subsequent Events (Details) - Co-development and commercialization - Subsequent Event $ in Millions	Feb. 07, 2018 USD ($)
Subsequent Events
Percentage of profit share	33.00%
Janssen
Subsequent Events
Upfront payment receivable	$ 100
Maximum potential payments receivable	$ 900
Percentage of profit share	67.00%

SUPPLEMENTARY FINANCIAL DATA (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
SUPPLEMENTARY FINANCIAL DATA (UNAUDITED)
Total revenue	$ 4,515	$ 4,275	$ 3,509	$ 3,087	$ 5,692	$ 19,075	$ 5,471	$ 18,410	$ 15,386	$ 48,648	$ 42,126
Costs and expenses	83,691	61,272	68,630	61,916	63,526	52,569	52,968	60,052	275,509	229,115	224,025
Loss from operations	(79,176)	(56,997)	(65,121)	(58,829)	(57,834)	(33,494)	(47,497)	(41,642)	(260,123)	(180,467)	(181,899)
Net loss	$ (86,922)	$ (66,877)	$ (66,287)	$ (65,319)	$ (67,332)	$ (33,962)	$ (47,225)	$ (42,150)	$ (285,405)	$ (190,669)	$ (182,219)
Basic and diluted net loss per share (in dollars per share)	$ (1.64)	$ (1.27)	$ (1.27)	$ (1.27)	$ (1.36)	$ (0.73)	$ (1.06)	$ (1.10)	$ (5.45)	$ (4.26)	$ (5.34)

Organization and Summary of Significant Accounting Policies (Details)	12 Months Ended
	Dec. 31, 2017 item
Organization and Summary of Significant Accounting Policies
Economic interest in future payments, number of affiliates	1

Organization and Summary of Significant Accounting Policies - Segment Reporting (Details)	12 Months Ended
	Dec. 31, 2017 segment
Organization and Summary of Significant Accounting Policies
Number of business segments	1

Organization and Summary of Significant Accounting Policies - Concentration of Credit Risks (Details)	12 Months Ended
	Dec. 31, 2017 item
Organization and Summary of Significant Accounting Policies
Number of suppliers providing fill-finish services related to the manufacturing of the product	1

Organization and Summary of Significant Accounting Policies - Restricted Cash (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Organization and Summary of Significant Accounting Policies
Restricted cash	$ 833	$ 833

Organization and Summary of Significant Accounting Policies - Research and Development Expenses (Details)	12 Months Ended
	Dec. 31, 2017
Organization and Summary of Significant Accounting Policies
Change in estimate of accrued research as a percent of annual expense	1.00%

Organization and Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Organization and Summary of Significant Accounting Policies
US federal, state and foreign unrecognized tax benefits	$ 41,794	$ 23,254	$ 9,198