10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

COMMISSION FILE NUMBER: 001-32836

MEDIVATION, INC.

(Exact name of registrant as specified in its charter)

Delaware	13-3863260
(State or other jurisdiction of incorporation or organization)	(IRS Employer identification No.)

525 Market Street, 36th floor

San Francisco, California 94105

(Address of principal executive offices) (Zip Code)

(415) 543-3470

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of August 2, 2016, 165,928,674 shares of the registrant’s Common Stock, $0.01 par value per share, were outstanding.

MEDIVATION, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2016

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION	3
ITEM 1. FINANCIAL STATEMENTS	3
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)	3
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)	4
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (unaudited)	5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)	6
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)	7
ITEM  2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	25
ITEM  3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	34
ITEM 4. CONTROLS AND PROCEDURES	35
PART II — OTHER INFORMATION	35
ITEM 1. LEGAL PROCEEDINGS	35
ITEM 1A. RISK FACTORS	36
ITEM 6. EXHIBITS	60

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

MEDIVATION, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(unaudited)

	June 30, 2016			December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	267,761		$	225,853
Short-term investments		59,432			—
Receivable from collaboration partner		227,310			391,558
Prepaid expenses and other current assets		49,653			15,877
Restricted cash		1,449			930
Total current assets		605,605			634,218
Property and equipment, net		60,994			58,142
Long-term investments		21,515			—
Intangible assets		648,799			644,299
Deferred income tax assets		284,933			57,011
Restricted cash, net of current		11,687			12,206
Goodwill		18,643			18,643
Other non-current assets		7,331			7,072
Total assets	$	1,659,507		$	1,431,591
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable, accrued expenses and other current liabilities	$	135,026		$	186,203
Borrowings under Revolving Credit Facility		—			75,000
Contingent consideration		4,951			4,900
Current portion of build-to-suit lease obligation		127			—
Total current liabilities		140,104			266,103
Contingent consideration		952,604			262,368
Build-to-suit lease obligation, excluding current portion		17,244			17,406
Other non-current liabilities		15,881			13,035
Total liabilities		1,125,833			558,912
Commitments and contingencies (Note 11)
Stockholders’ equity:
Preferred stock, $0.01 par value per share; 1,000,000 shares authorized; no shares issued and outstanding		—			—
Common stock, $0.01 par value per share; 340,000,000 shares authorized; 165,555,633 and 163,905,342 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively		1,656			1,639
Additional paid-in capital		745,475			684,841
Accumulated other comprehensive loss		(550	)		—
Retained earnings (accumulated deficit)		(212,907	)		186,199
Total stockholders’ equity		533,674			872,679
Total liabilities and stockholders’ equity	$	1,659,507		$	1,431,591

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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MEDIVATION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Collaboration revenue	$	206,165		$	175,657		$	388,662		$	304,845
Operating expenses:
Research and development expenses		73,375			47,294			150,962			91,970
Selling, general and administrative expenses		758,431			74,708			855,258			158,647
Total operating expenses		831,806			122,002			1,006,220			250,617
Income (loss) from operations		(625,641	)		53,655			(617,558	)		54,228
Other income (expense), net:
Loss on extinguishment of Convertible Notes		—			(7,868	)		—			(7,871	)
Interest expense		(475	)		(5,309	)		(1,155	)		(10,917	)
Other, net		(23	)		(52	)		(232	)		88
Total other income (expense), net		(498	)		(13,229	)		(1,387	)		(18,700	)
Income (loss) before income tax (expense) benefit		(626,139	)		40,426			(618,945	)		35,528
Income tax (expense) benefit		222,217			(14,600	)		219,839			(12,820	)
Net income (loss)	$	(403,922	)	$	25,826		$	(399,106	)	$	22,708
Basic net income (loss) per common share	$	(2.45	)	$	0.16		$	(2.42	)	$	0.14
Diluted net income (loss) per common share	$	(2.45	)	$	0.15		$	(2.42	)	$	0.14
Weighted average common shares used in the calculation of basic net income (loss) per common share		164,926			158,505			164,586			157,576
Weighted average common shares used in the calculation of diluted net income (loss) per common share		164,926			168,690			164,586			162,995

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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MEDIVATION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Net income (loss)	$	(403,922	)	$	25,826		$	(399,106	)	$	22,708
Other comprehensive loss:
Cash flow hedges:
Unrealized losses, net of tax impact of ($204), $—, ($379) and $—		(370	)		—			(687	)		—
Reclassifications to net income, net of tax impact of $79, $—, $79 and $—		143			—			143			—
Net change		(227	)		—			(544	)		—
Available-for-sale securities:
Unrealized losses, net of tax impact of ($4), $—, ($4) and $—		(6	)		(34	)		(6	)		(34	)
Other comprehensive loss		(233	)		(34	)		(550	)		(34	)
Comprehensive income (loss)	$	(404,155	)	$	25,792		$	(399,656	)	$	22,674

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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MEDIVATION, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)

	Six Months Ended June 30,
	2016			2015
Cash flows from operating activities:
Net income (loss)	$	(399,106	)	$	22,708
Adjustments for non-cash operating items:
Change in fair value of contingent consideration		690,287			5,013
Stock-based compensation		28,905			27,450
Depreciation on property and equipment		5,115			3,085
Amortization of debt discount and debt issuance costs		170			7,827
Change in deferred income taxes		(229,169	)		(773	)
Excess tax benefits from stock-based compensation		(13,444	)		(13,572	)
Loss on extinguishment of Convertible Notes		—			7,871
Amortization of deferred revenue		—			(2,257	)
Other non-cash items		(4,111	)		(60	)
Changes in operating assets and liabilities:
Receivable from collaboration partner		164,248			(12,420	)
Prepaid expenses and other current assets		(19,964	)		(6,085	)
Other non-current assets		(394	)		2,689
Accounts payable, accrued expenses and other current liabilities		(14,273	)		27,153
Current taxes payable		(32,565	)		(2,106	)
Other non-current liabilities		2,846			718
Net cash provided by operating activities		178,545			67,241
Cash flows from investing activities:
Purchases of available-for-sale securities		(80,967	)		(76,397	)
Purchases of property and equipment		(13,932	)		(6,478	)
Change in restricted cash		—			(1,574	)
Net cash used in investing activities		(94,899	)		(84,449	)
Cash flows from financing activities:
Principal repayment of borrowings under Revolving Credit Facility		(75,000	)		—
Proceeds from issuance of common stock under equity incentive and stock purchase plans		19,853			14,699
Excess tax benefits from stock-based compensation		13,444			13,572
Reduction of build-to-suit lease obligation		(35	)		(470	)
Principal repayment of Convertible Notes		—			(90,994	)
Cash settlement of Convertible Notes conversion premium		—			(1,126	)
Net cash used in financing activities		(41,738	)		(64,319	)
Net change in cash and cash equivalents		41,908			(81,527	)
Cash and cash equivalents at beginning of period		225,853			502,677
Cash and cash equivalents at end of period	$	267,761		$	421,150
Supplemental disclosures of cash flow information:
Non-cash investing and financing activities:
Property and equipment expenditures incurred but not yet paid	$	361		$	1,650
Reacquisition of Convertible Note equity component upon conversion		—		$	135,988
Fair value of common stock issued for conversion of Convertible Notes		—		$	131,084
Derecognition of build-to-suit lease asset		—		$	3,241
Derecognition of build-to-suit lease liability		—		$	3,176
Interest capitalized during construction period for build-to-suit lease transactions		—		$	1,070
Accrued interest payable forfeited upon conversion of Convertible Notes		—		$	292
Amounts capitalized under build-to-suit lease transactions		—		$	283

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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MEDIVATION, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

(unaudited)

NOTE 1. DESCRIPTION OF BUSINESS

Medivation, Inc. (the “Company” or “Medivation”) is a biopharmaceutical company focused on the development and commercialization of medically innovative therapies to treat serious diseases for which there are limited treatment options. It has one commercial product, XTANDI^® (enzalutamide) capsules, or XTANDI, through the Company’s collaboration with Astellas Pharma, Inc., or Astellas. XTANDI has received marketing approval in the United States, Europe and numerous other countries worldwide for the treatment of patients with metastatic castration-resistant prostate cancer, or mCRPC, and in Japan for the treatment of patients with castration-resistant prostate cancer, or CRPC. The Company and Astellas are also conducting investigational studies of enzalutamide in prostate cancer, advanced breast cancer, and hepatocellular carcinoma. Under the Company’s collaboration agreement with Astellas, it shares equally with Astellas all profits (losses) related to U.S. net sales of XTANDI. The Company also receives royalties ranging from the low teens to the low twenties as a percentage of ex-U.S. XTANDI net sales.

The Company seeks to become a more fully-integrated biopharmaceutical company through the continued commercialization of XTANDI, the acquisition or in-license and development and commercialization of other product opportunities, and through the advancement of its own proprietary research and development programs. The Company expects that its future growth may come from both its internal research efforts, focused in oncology, neurology and other areas, and third-party business development activities, such as its acquisition of all worldwide rights to talazoparib (which is referred to as MDV3800) from BioMarin Pharmaceutical Inc., or BioMarin, in the fourth quarter of 2015 and its license of exclusive worldwide rights to pidilizumab (which is referred to as MDV9300) from CureTech, Ltd., or CureTech, in the fourth quarter of 2014.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of the Company’s financial condition, results of operations and cash flows for the periods presented, have been included. The results of operations for any interim period are not necessarily indicative of the results of operations for the full year or any other interim period.

The unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim unaudited condensed consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding year. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2015, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, or the Annual Report, filed with the U.S. Securities and Exchange Commission, or SEC, on February 26, 2016. The consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements at that date.

The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Company operates in one business segment.

All tabular disclosures of dollar and share amounts are presented in thousands unless otherwise indicated. All per share amounts are presented at their actual amounts. The number of shares issuable under the Amended and Restated 2004 Equity Incentive Award Plan, or the Medivation Equity Incentive Plan, and the Medivation, Inc. 2013 Employee Stock Purchase Plan, or ESPP, disclosed in Note 12, “Stockholders’ Equity,” are presented at their actual amounts unless otherwise indicated. Amounts presented herein may not calculate or sum precisely due to rounding.

(b) Use of Estimates

The preparation of unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires that management make estimates and assumptions in certain circumstances that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and

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expenses during the reporting period. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Although management believes that these estimates are reasonable, actual future results could differ materially from those estimates. In addition, had different estimates and assumptions been used, the unaudited condensed consolidated financial statements could have differed materially from what is presented.

Significant estimates and assumptions used by management principally relate to revenue recognition, including reliance on third-party information, estimating the performance periods of the Company’s deliverables under collaboration agreements, and estimating the various deductions from gross sales to calculate net sales of XTANDI. Additionally, significant estimates and assumptions used by management include those related to contingent consideration, intangible assets, goodwill, convertible notes, determining whether the Company is the primary beneficiary of any variable interest entities, leases, taxes, research and development and other accruals, share-based compensation, derivatives and hedging, and the calculation of diluted net income per common share.

(c) Significant Accounting Policies

Reference is made to Note 2, “Summary of Significant Accounting Policies,” included in the notes to the Company’s audited consolidated financial statements included in its Annual Report. As of the date of the filing of this Quarterly Report on Form 10-Q, or Quarterly Report, there were no significant changes to the significant accounting policies described in the Company’s Annual Report, except for the addition of the Company’s accounting policies with respect to derivative instruments related to its cash flow hedging program, which commenced during the first quarter of 2016 as discussed in Note 4, “Derivative Financial Instruments,” and performance share units.

(d) Derivative Financial Instruments

The Company uses forward foreign currency exchange contracts to hedge a portion of its gross collaboration revenue exposure from royalties related to the Euro and the Japanese Yen. These derivative instruments are designated as cash flow hedges and are recognized as either assets or liabilities at fair value in the Company’s unaudited condensed consolidated balance sheets. The effective portion of changes in the fair value of these instruments is initially recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity, and subsequently reclassified into earnings when the underlying exposure is reflected in earnings. Ineffectiveness, if any, is recorded immediately in earnings as other income (expense), net. The Company classifies the cash flows from these instruments in the same category as the cash flows from the hedged items, within net cash provided by operating activities in the unaudited condensed consolidated statement of cash flows.

The Company assesses, both at inception and on an ongoing basis, whether its cash flow hedge derivative instruments are highly effective in offsetting the changes in cash flows of the hedged items. At inception and on a quarterly basis, the Company documents and asserts that the critical terms of its derivatives (i.e. notional amounts, currency rate mechanisms, and timing) match the critical terms of the hedged items for the risk being hedged. As such, the Company will assume no ineffectiveness in the hedge relationship because all of the critical terms of the hedge and hedged item are matched. If the Company determines that a forecasted transaction is no longer probable of occurring, hedge accounting will be discontinued for the affected portion of the hedge instrument. If the hedged item becomes probable of not occurring, any related gain or loss on the contract will be recognized immediately in earnings as other income (expense), net.

In assessing hedge effectiveness, the Company also considers the risk of counterparty default under the hedge contract. The Company seeks to limit its counterparty credit risk by working only with counterparties that have certain financial credit ratings. The Company does not enter into derivative contracts for speculative or trading purposes.

(e) Stock-Based Compensation

Performance Share Units

During 2016, the Company granted performance share units, or PSUs, to certain officers of the Company pursuant to the terms of the Medivation Equity Incentive Plan. The terms of the PSUs provide for target and maximum numbers of shares eligible to be earned based on the level of achievement of certain pre-determined revenue goals and clinical development milestones. For the PSUs tied to revenue goals, the actual number of shares of common stock that may ultimately be issued upon vest is calculated by multiplying the number of PSUs by a payout percentage ranging from 50% to 150%. For the PSUs tied to clinical development milestones, the actual number of shares of common stock that may ultimately be issued upon vest is calculated by multiplying the number of PSUs by a payout percentage of 100%. The PSUs will vest, if at all, upon certification by the Compensation Committee of the Company’s Board of Directors of the actual achievement of the performance objectives, subject to specified change of control exceptions.

8

Stock-based compensation expense associated with PSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date. The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest.

(f) New Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326). ASU 2016-13 prescribes an approach based on expected losses to estimate credit losses on certain financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The amended guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that reporting period, and early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. The amended guidance is to be applied using a modified retrospective approach, which requires application of the guidance at the beginning of the earliest comparative period presented in the year of adoption. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies several aspects of the accounting for share-based payment award transactions. Changes that may impact public companies include changes in the accounting for income taxes, specifically excess tax benefits and tax deficiencies; the classification of excess tax benefits on the statement of cash flows as an operating activity; the option for companies to make an entity-wide accounting policy election to either estimate the number of share-based payment awards that are expected to vest (current GAAP) or account for forfeitures when they occur; and the classification of employee taxes paid when an employer withholds shares for tax withholding purposes as a financing activity on the statement of cash flows. Depending on the specific item to be changed, ASU 2016-09 requires certain changes to be applied either prospectively, retrospectively, or under a modified retrospective transition method to all periods presented. The amended guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, and early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” ASU 2016-05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The amended guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, with the option to apply the amended guidance on either a prospective basis or a modified retrospective basis, and early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 includes a lessee accounting model that recognizes two types of leases - finance leases and operating leases. The standard requires that a lessee recognize on the balance sheet a right-to-use asset and a lease liability for all leases with lease terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as either a finance or operating lease. ASU 2016-02 also requires new qualitative and quantitative disclosures for the amount, timing, and uncertainty of cash flows arising from leases. The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period, and early adoption is permitted. ASU 2016-02 requires modified retrospective transition, which requires application of the guidance at the beginning of the earliest comparative period presented in the year of adoption; however, for all leases that commenced before the effective date, companies can elect not to reassess certain elements, including their lease classification or whether contracts are or contain embedded leases. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, a comprehensive new revenue recognition standard that will supersede the existing revenue recognition guidance. The new accounting guidance creates a framework by which an entity will allocate the transaction price to separate performance obligations and recognize revenue when (or as) each performance obligation is satisfied. Under the new standard, entities will be required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for either “full retrospective” adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch-up as of the earliest period presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch-up as of the current period. In August 2015, the effective date of the new revenue standard was delayed by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also agreed to permit early adoption of the standard, but not before the original effective date of December 15, 2016. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers

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(Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” to clarify ASU 2014-09 implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” to clarify ASU 2014-09 implementation guidance on identifying performance obligations and licensing arrangements. In April 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients” to clarify that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required to disclose the effect of the accounting change for the period of adoption. However, an entity is still required to disclose the effect of the changes on any prior periods retrospectively adjusted. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

NOTE 3. COLLABORATION AGREEMENT

(a) Collaboration Agreement with Astellas

In October 2009, the Company entered into a collaboration agreement with Astellas, or the Astellas Collaboration Agreement, pursuant to which it is collaborating with Astellas to develop and commercialize XTANDI globally for all indications, dosages, and formulations of enzalutamide. Under the agreement, decision making and economic participation differs between the U.S. market and the ex-U.S. market. In the United States, decisions are generally made by consensus, pre-tax profits and losses are shared equally, and, subject to certain exceptions, development and commercialization costs (including cost of goods sold and the royalty on net sales payable to The Regents of the University of California (“UCLA” or “the Regents”) under the Company’s license agreement with UCLA) are also shared equally. The primary exceptions to equal cost sharing in the U.S. market are that each party is responsible for its own commercial full-time equivalent, or FTE, costs, and that development costs supporting marketing approvals in both the United States and either Europe or Japan are borne one-third by the Company and two-thirds by Astellas. The Company and Astellas are co-promoting XTANDI in the U.S. market, with each company providing half of the sales and medical affairs effort in support of the product. Both the Company and Astellas are entitled to receive a fee for each qualifying detail made by its respective sales representatives. Outside of the United States, decisions are generally made by Astellas and all development and commercialization costs (including cost of goods sold and the royalty on net sales payable to UCLA) are borne by Astellas. Astellas retains all ex-U.S. profits and losses, and pays the Company a tiered royalty ranging from the low teens to the low twenties as a percentage of the aggregate net sales of XTANDI outside of the United States, or ex-U.S. XTANDI net sales. Astellas has sole responsibility for promoting XTANDI outside of the United States and for recording all XTANDI net sales both inside and outside of the United States. Both the Company and Astellas have agreed not to commercialize certain other products having a similar mechanism of action (as defined by the Astellas Collaboration Agreement) as XTANDI for the treatment of prostate cancer for a specified time period, subject to certain exceptions.

Under the Astellas Collaboration Agreement, Astellas paid the Company a non-refundable, upfront cash payment of $110.0 million in the fourth quarter of 2009. The Company was also eligible to receive up to $335.0 million in development milestone payments and up to $320.0 million in sales milestone payments under the Astellas Collaboration Agreement. As of the fourth quarter of 2015, the Company had earned all of the development and sales milestone payments under the Astellas Collaboration Agreement.

The Company and Astellas are each permitted to terminate the Astellas Collaboration Agreement for an uncured material breach by the other party or for the insolvency of the other party. Astellas has a right to terminate the Astellas Collaboration Agreement unilaterally by advance written notice to the Company. Following any termination of the Astellas Collaboration Agreement in its entirety, all rights to develop and commercialize XTANDI will revert to the Company, and Astellas will grant a license to the Company to enable it to continue such development and commercialization. In addition, except in the case of a termination by Astellas for the Company’s material breach, Astellas will supply XTANDI to the Company during a specified transition period.

Unless terminated earlier by the Company or Astellas pursuant to the terms thereof, the Astellas Collaboration Agreement will remain in effect: (a) in the United States, until such time as Astellas notifies the Company that Astellas has permanently stopped selling products covered by the Astellas Collaboration Agreement in the United States; and (b) in each other country of the world, on a country-by-country basis, until such time as (i) products covered by the Astellas Collaboration Agreement cease to be protected by patents or regulatory exclusivity in such country and (ii) commercial sales of generic equivalent products have commenced in such country.

The Astellas Collaboration Agreement further provides for a standstill period during which Astellas and its Affiliates, as defined in the Astellas Collaboration Agreement, agreed to certain restrictive covenants, including that they would not, directly or indirectly (subject to certain exceptions), unless invited to do so by the Company, acquire (a) all or substantially all of the Company’s consolidated assets or (b) beneficial ownership of more than five percent of any voting securities of the Company or any subsidiary or Affiliate of the Company. The standstill period will expire in September 2016.

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(b) Collaboration Revenue

Collaboration revenue was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Collaboration revenue:
Related to U.S. XTANDI net sales	$	165,129	$	149,220	$	318,922	$	261,230
Related to ex-U.S. XTANDI net sales		41,036		25,591		69,740		41,358
Related to upfront and milestone payments		—		846		—		2,257
Total	$	206,165	$	175,657	$	388,662	$	304,845

The Company is currently involved in litigation with UCLA regarding certain terms of its license agreement and other matters, which are discussed in Note 11, “Commitments and Contingencies.”

Collaboration Revenue Related to U.S. XTANDI Net Sales

Under the Astellas Collaboration Agreement, Astellas records all U.S. XTANDI net sales. The Company and Astellas share equally all pre-tax profits and losses from U.S. XTANDI net sales. Subject to certain exceptions, the Company and Astellas also share equally all XTANDI development and commercialization costs attributable to the U.S. market, including cost of goods sold and the royalty on net sales payable to UCLA under the Company’s license agreement with UCLA. The primary exceptions to 50/50 cost sharing are that each party is responsible for its own commercial FTE costs and that development costs supporting marketing approvals in both the United States and either Europe or Japan are borne one-third by the Company and two-thirds by Astellas. The Company recognizes collaboration revenue related to U.S. XTANDI net sales in the period in which such sales occur. Collaboration revenue related to U.S. XTANDI net sales consists of the Company’s share of pre-tax profits and losses from U.S. XTANDI net sales, plus reimbursement of the Company’s share of reimbursable U.S. development and commercialization costs. The Company’s collaboration revenue related to U.S. XTANDI net sales in any given period is equal to 50% of U.S. XTANDI net sales as reported by Astellas for the applicable period.

Collaboration revenue related to U.S. XTANDI net sales was as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
U.S. XTANDI net sales (as reported by Astellas)	$	330,257		$	298,440		$	637,843		$	522,460
Shared U.S. development and commercialization costs		(95,055	)		(84,947	)		(225,639	)		(195,260	)
Pre-tax U.S. profit	$	235,202		$	213,493		$	412,204		$	327,200
Medivation’s share of pre-tax U.S. profit	$	117,601		$	106,747		$	206,102		$	163,600
Reimbursement of Medivation’s share of shared U.S. costs		47,528			42,473			112,820			97,630
Collaboration revenue related to U.S. XTANDI net sales	$	165,129		$	149,220		$	318,922		$	261,230

Collaboration Revenue Related to Ex-U.S. XTANDI Net Sales

Under the Astellas Collaboration Agreement, Astellas records all ex-U.S. XTANDI net sales. Astellas is responsible for all development and commercialization costs for XTANDI outside of the United States, including cost of goods sold and the royalty on net sales payable to UCLA under the Company’s license agreement with UCLA, and pays the Company a tiered royalty ranging from the low teens to the low twenties as a percentage of ex-U.S. XTANDI net sales. The Company recognizes collaboration revenue related to ex-U.S. XTANDI net sales in the period in which such sales occur. Collaboration revenue related to ex-U.S. XTANDI net sales consists of royalties from Astellas on those sales.

Collaboration Revenue Related to Upfront and Milestone Payments

As of the fourth quarter of 2015, the Company had earned all development and sales milestone payments under the Astellas Collaboration Agreement. Collaboration revenue related to upfront and milestone payments from Astellas for the three and six months ended June 30, 2015 was $0.8 million and $2.3 million, respectively, which comprised amortization of deferred upfront and development milestones.

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(c) Cost-Sharing Payments

Under the Astellas Collaboration Agreement, the Company and Astellas share certain development and commercialization costs (including cost of goods sold and the royalty on net sales payable to UCLA under the Company’s license agreement with UCLA) in the United States. For the three and six months ended June 30, 2016, development cost-sharing payments from Astellas were $15.1 million and $28.4 million, respectively. For the three and six months ended June 30, 2015, development cost-sharing payments from Astellas were $17.6 million and $31.4 million, respectively. For the three and six months ended June 30, 2016, commercialization cost-sharing payments to Astellas were $4.5 million and $23.3 million, respectively. For the three and six months ended June 30, 2015, commercialization cost-sharing payments to Astellas were $2.7 million and $22.8 million, respectively. Development cost-sharing payments from Astellas are recorded as reductions in research and development, or R&D, expenses. Commercialization cost-sharing payments to Astellas are recorded as increases in selling, general, and administrative, or SG&A, expenses.

NOTE 4. DERIVATIVE FINANCIAL INSTRUMENTS

The Company receives royalties from Astellas on net sales of XTANDI outside of the United States, which are paid to the Company in U.S. dollars and calculated by converting the respective countries’ XTANDI net sales in local currency to U.S. dollars. Because a significant portion of ex-U.S. sales of XTANDI have been generated in the European Union and in Japan, the royalties received from Astellas related to such sales are dependent on the value of the U.S. dollar versus the Euro and Japanese Yen. The Company also conducts certain R&D activities outside of the United States, with expenses incurred in various currencies, including the Euro and Japanese Yen, and these expenses partially offset the currency exposure related to its collaboration revenue from royalties.

In the first quarter of 2016, the Company began using forward foreign currency exchange contracts to hedge a portion of its gross collaboration revenue exposure from royalties related to the Euro and the Japanese Yen. These derivative instruments are designated as cash flow hedges and have maturity dates of 15 months or less. The Company assesses, both at inception and on an ongoing basis, whether its cash flow hedge derivative instruments are highly effective in offsetting the changes in cash flows of the hedged items. At inception and on a quarterly basis, the Company documents and asserts that the critical terms of its derivatives (i.e. notional amounts, currency rate mechanisms, and timing) match the critical terms of the hedged items for the risk being hedged. As such, the Company will assume no ineffectiveness in the hedge relationship because all of the critical terms of the hedge and hedged items are matched. If the Company determines that a forecasted transaction is no longer probable of occurring, hedge accounting will be discontinued for the affected portion of the hedge instrument. If the hedged item becomes probable of not occurring, any related gain or loss on the contract will be recognized immediately in earnings as other income (expense), net.

The effective portion of changes in the fair value of these instruments is initially recorded as a component of accumulated other comprehensive income (loss), or OCI, in stockholders’ equity, and subsequently reclassified into earnings as collaboration revenue when the underlying exposure is reflected in collaboration revenue. All of the gains and losses related to the hedged forecasted transactions reported in accumulated OCI at June 30, 2016 are expected to be reclassified to collaboration revenue within the next 12 months. There were no amounts related to ineffectiveness for the six months ended June 30, 2016. Additionally, the Company did not discontinue any of its cash flow hedges during the six months ended June 30, 2016.

As of June 30, 2016, the Company had an average derivative USD equivalent notional amount on its open contracts of $4.8 million. The Company plans to enter into approximately eight foreign currency forward contracts per quarter covering a rolling four-quarter period.

The obligations of the Company under its foreign exchange contracts are secured obligations under the terms of the Company’s senior secured credit facility. In addition, the Company‘s foreign exchange contracts are subject to standard International Swaps and Derivatives Association (ISDA) master agreements which provide for various events of default, including a cross default to the Company’s senior secured credit facility. If an event of default or termination event where the Company is the defaulting party occurs, the counterparties to these contracts could request immediate payment on the derivatives. The aggregate fair value of all foreign exchange contracts with credit-risk-related contingent features that are in a liability position as of June 30, 2016, is $1.5 million. In addition, the agreements governing such contracts permit the Company, subject to applicable requirements, to net settle transactions of the same currency with a single net amount payable by one party to the other.

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While all of the Company’s derivative contracts allow the right to offset assets or liabilities, it is the Company’s policy to present its derivatives on a gross basis in the unaudited condensed consolidated balance sheets. The following table summarizes the classification and fair values of derivative instruments on the Company’s unaudited condensed consolidated balance sheet:

	June 30, 2016
	Asset Derivatives				Liability Derivatives
	Classification		Fair Value		Classification		Fair Value
Derivatives designated as hedges:
Foreign currency exchange contracts		Other current assets	$	368		Other current liabilities	$	(1,247	)
Foreign currency exchange contracts		Other non-current assets		35		Other non-current liabilities		—
Total derivatives designated as hedges				403				(1,247	)
Derivatives not designated as hedges:
Foreign currency exchange contracts		Other current assets		—		Other current liabilities		(222	)
Total derivatives not designated as hedges				—				(222	)
Total derivatives			$	403			$	(1,469	)

The following table summarizes the effect of the Company’s foreign currency exchange contracts on its unaudited condensed consolidated financial statements:

	Three Months Ended			Six Months Ended
	June 30, 2016			June 30, 2016
Derivatives designated as hedges:
Gains (losses) recognized in accumulated OCI (effective portion)	$	(574	)	$	(1,066	)
Gains (losses) reclassified from accumulated OCI into collaboration revenue (effective portion)		(222	)		(222	)
Gains (losses) recognized in other income (expense), net		—			—

As of June 30, 2016, the Company held one type of financial instrument – derivative contracts related to foreign currency exchange contracts. The following table summarizes the potential effect of offsetting derivatives by type of financial instrument on the Company’s unaudited condensed consolidated balance sheet:

June 30, 2016
Offsetting of Derivative Assets/Liabilities
									Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
Description	Gross Amounts of Recognized Assets/Liabilities			Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Amounts of Assets/Liabilities Presented in the Condensed Consolidated Balance  Sheet			Derivative Financial Instruments		Cash Collateral Received/Pledged		Net Amount (Legal Offset)
Derivative assets	$	403			—	$	403			—		—	$	403
Derivative liabilities	$	(1,469	)		—	$	(1,469	)		—		—	$	(1,469	)

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NOTE 5. FAIR VALUE DISCLOSURES

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:

			Fair Value Measurements Using:
	Fair Value		Level 1		Level 2		Level 3
June 30, 2016:
Short-term investments:
Corporate debt securities	$	43,465		—	$	43,465		—
Certificates of deposit	$	10,000		—	$	10,000		—
Commercial paper	$	3,965		—	$	3,965		—
U.S. Government securities	$	2,002		—	$	2,002		—
Current assets:
Foreign currency derivative contracts	$	368		—	$	368		—
Long-term investments
Corporate debt securities	$	21,515		—	$	21,515		—
Non-current assets:
Foreign currency derivative contracts	$	35		—	$	35		—
Current liabilities:
Foreign currency derivative contracts	$	1,469		—	$	1,469		—
Contingent consideration	$	4,951		—		—	$	4,951
Non-current liabilities:
Contingent consideration	$	952,604		—		—	$	952,604
December 31, 2015:
Current liabilities:
Contingent consideration	$	4,900		—		—	$	4,900
Non-current liabilities:
Contingent consideration	$	262,368		—		—	$	262,368

The Company estimates the fair values of Level 2 assets or liabilities, including foreign currency derivative contracts, by taking into consideration valuations obtained from third-party pricing or valuation sources. These sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly, or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar assets, issuer credit spreads, benchmark yields, foreign currency rates, London Interbank Offered Rates (LIBOR), and other observable inputs. The Company validates the prices provided by its third-party pricing sources by obtaining market values from other pricing sources and/or analyzing pricing data in certain instances. For additional information regarding the Company’s foreign currency derivative transactions, see Note 4, “Derivative Financial Instruments.”

In connection with the acquisitions of MDV3800 and MDV9300, the Company recorded contingent consideration liabilities pertaining to amounts potentially payable to BioMarin and CureTech, respectively. The fair value of contingent consideration is considered a Level 3 liability and was estimated utilizing a model with key assumptions that included estimated revenues and completion of certain development, regulatory and sales milestone targets during the earn-out period, volatility, and estimated discount rates corresponding to the periods of expected payments. The estimated fair value of the contingent consideration liability is measured at each reporting date based on significant inputs not observable in the market. The Company assesses these estimates on an ongoing basis as additional data impacting the assumptions is obtained. Changes in the estimated fair value of contingent consideration are reflected as non-cash adjustments to operating expenses in the unaudited condensed consolidated statements of operations.

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The following table presents fair value adjustments related to contingent consideration liabilities recorded by the Company for the periods presented:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016		2015			2016		2015
Fair value adjustments:
BioMarin contingent consideration liability:
Increase to R&D expense	$	8,632	$	—		$	9,124	$	—
Increase to SG&A expense		673,983		—			676,468		—
Total BioMarin fair value adjustments		682,615		—			685,592		—
CureTech contingent consideration liability:
Increase (decrease) to R&D expense		365		(70	)		1,013		930
Increase to SG&A expense		1,348		1,083			3,682		4,083
Total CureTech fair value adjustments		1,713		1,013			4,695		5,013
Total fair value adjustments, net	$	684,328	$	1,013		$	690,287	$	5,013

During the three and six months ended June 30, 2016, the fair value of the contingent consideration liability related to BioMarin increased significantly due to changes in the estimated probabilities of success of the development programs and the range and scope of indications currently planned for development. These changes resulted from various market and development-specific events that occurred during the second quarter of 2016, including: the announcement of positive data from a Phase 3 competitor trial of a PARP inhibitor, validating the clinical and commercial potential for MDV3800 and the overall PARP class; positive feedback received from regulatory authorities regarding study protocols and approval pathways for MDV3800 in various tumor types, including alignment on two registrational trials for tumor types in which MDV3800 has the potential to be the first PARP inhibitor to market; data from three abstracts for MDV3800 presented at recent and upcoming medical conferences in several different tumor types; and data from a Phase 1 trial of MDV3800 in several advanced cancers in combination with low-dose chemotherapy. The majority of the fair value adjustment for the three and six months ended June 30, 2016 is classified as SG&A expense because changes in the key measurement assumptions noted above had the largest impact on the value of the sales-based milestone and royalties on annual net sales of MDV3800 products that BioMarin would be entitled to under the terms of the related purchase agreement.

Increases in the fair value of the contingent consideration liability related to CureTech for the three and six months ended June 30, 2016 and 2015 were primarily due to the time value of money.

BioMarin is entitled to contingent payments totaling up to $160.0 million upon the achievement of defined regulatory and sales-based milestones, and mid-single digit royalties on net sales of products that contain MDV3800 during the royalty term specified in the related purchase agreement. CureTech is entitled to contingent payments totaling up to $85.0 million upon attainment of certain development and regulatory milestones, up to $245.0 million upon the achievement of certain annual worldwide net sales thresholds, and tiered royalties ranging from 5% to 11% on annual worldwide net sales. CureTech is also entitled to a $5.0 million milestone payment upon completion of the Manufacturing Technology Transfer as described in Note 11, “Commitments and Contingencies.”

Contingent consideration may change significantly as development progresses and additional data is obtained that will affect the Company’s assumptions regarding probabilities of successful achievement of related milestones used to estimate the fair value of the liability and the timing in which they are expected to be achieved. Updates to these assumptions could have a significant impact on the Company’s results of operations. For example, a significant increase in the probability of achieving a milestone would result in a significantly higher fair value measurement, while a significant increase in the expected timing of achieving a milestone would result in a significantly lower fair value measurement. Considerable judgment is required to interpret the market data used to develop the assumptions. The estimates of fair value may not be indicative of amounts that could be realized in a current market exchange. Accordingly, the use of different market assumptions and/or different valuation techniques could result in materially different fair value estimates.

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There were no transfers between Level 1 and Level 2 financial instruments during the three and six months ended June 30, 2016. The following table includes a roll-forward of the fair value of Level 3 financial instruments for the periods presented:

	Three Months Ended		Six Months Ended
	June 30, 2016		June 30, 2016
Contingent consideration (current and non-current):
Balance at beginning of period	$	273,227	$	267,268
Amounts acquired or issued		—		—
Net change in fair value		684,328		690,287
Settlements		—		—
Transfers in and/or out of Level 3		—		—
Balance at end of period	$	957,555	$	957,555

The following table presents the total balance of the Company’s other financial instruments that are not measured at fair value on a recurring basis:

			Fair Value Measurements Using:
	Total Balance		Level 1		Level 2		Level 3
June 30, 2016:
Assets:
Bank deposits (included in “Cash and cash equivalents”)	$	267,761	$	267,761		—		—
December 31, 2015:
Assets:
Bank deposits (included in “Cash and cash equivalents”)	$	225,853	$	225,853		—		—
Liabilities:
Borrowings under Revolving Credit Facility	$	75,000	$	75,000		—		—

Due to their short-term maturities, the Company believes that the fair value of its bank deposits, receivable from collaboration partner, accounts payable and accrued expenses, short-term borrowings under the Revolving Credit Facility, and other current assets and liabilities approximate their carrying value.

NOTE 6. AVAILABLE-FOR-SALE SECURITIES

The Company considers all highly liquid investments with a remaining maturity of three months or less at the time of purchase to be cash equivalents. The Company considers all highly liquid investments with a remaining maturity at the time of purchase of more than three months but no longer than 12 months to be short-term investments, and those with a remaining maturity at the time of purchase of longer than 12 months to be long-term investments. The Company classifies its investments as available-for-sale securities and reports them at fair value with related unrealized gains and losses included as a component of comprehensive income. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in other income (expense), net, 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 other income (expense), net. 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 other income (expense), net.

The following table summarizes the Company’s available-for-sale securities at June 30, 2016:

	June 30, 2016
	Amortized		Gross Unrealized					Fair
	Cost		Gains		Losses			Value
Short-term investments:
Corporate debt securities	$	43,455	$	21	$	(11	)	$	43,465
Certificates of deposit		10,000		—		—			10,000
Commercial paper		3,965		—		—			3,965
U.S. Government securities		2,001		1		—			2,002
Total short-term investments		59,421		22		(11	)		59,432
Long-term investments:
Corporate debt securities		21,536		10		(31	)		21,515
Total long-term investments		21,536		10		(31	)		21,515
Total available-for-sale securities	$	80,957	$	32	$	(42	)	$	80,947

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The Company did not hold any available-for-sale securities as of December 31, 2015.

The following table summarizes the Company’s portfolio of available-for-sale securities by contractual maturity:

	June 30, 2016
	Amortized Cost		Fair Value
Less than one year	$	59,421	$	59,432
Greater than one year but less than five years		21,536		21,515
Total	$	80,957	$	80,947

At June 30, 2016, the Company had 23 available-for-sale securities with a fair value of $26.2 million in a gross unrealized loss position, all of which had been in such a position for less than twelve months. The Company does not intend to sell the securities that are in an unrealized loss position, and it is unlikely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity.

NOTE 7. INTANGIBLE ASSETS AND GOODWILL

Intangible assets consist of in-process research and development, or IPR&D, acquired from business acquisitions. The Company accounts for IPR&D as indefinite-lived intangible assets until regulatory approval or discontinuation of the related R&D efforts. Upon obtaining regulatory approval, the Company reclassifies the IPR&D as a definite-lived intangible asset and determines the economic life for amortization purposes. The Company assesses the impairment of indefinite-lived intangible assets and goodwill on an annual basis or more frequently whenever events or changes in circumstances may indicate that the carrying value might not be recoverable.

The following table summarizes the Company’s indefinite-lived intangible assets:

	June 30,		December 31,
	2016		2015
Indefinite-lived intangible asset – MDV3800	$	573,299	$	573,299
Indefinite-lived intangible asset – MDV9300		75,500		71,000
Total	$	648,799	$	644,299

In the second quarter of 2016, the Company recorded an out-of-period correcting adjustment related to its impairment charge from the fourth quarter of 2015 that increased the IPR&D asset related to MDV9300 by $4.5 million and decreased R&D expenses by $4.5 million. Management concluded that the adjustment is not material to the expected full year 2016 results or any previously reported financial statements.

The carrying amount of goodwill was $18.6 million as of June 30, 2016 and December 31, 2015.

NOTE 8. BUILD-TO-SUIT LEASE OBLIGATION

In the fourth quarter of 2013, the Company entered into a property lease for approximately 52,000 square feet of space located in San Francisco, California. In the second quarter of 2015, the Company entered into an amended lease agreement to reduce the amount of leased space at this property to approximately 44,000 square feet. The lease agreement expires in August 2024, and the Company has an option to extend the lease term for up to an additional five years.

The Company was deemed, for accounting purposes only, to be the owner of the entire project including the building shell, even though it was not the legal owner. In connection with the Company’s accounting for this transaction, the Company capitalized $14.5 million as a build-to-suit property within property and equipment, net, and recognized a corresponding build-to-suit lease obligation for the same amount. The Company also recognized, as an additional build-to-suit lease property and obligation, structural tenant improvements totaling $3.6 million for amounts paid by the landlord and $3.5 million for capitalized interest during the construction period through 2015. As a result of the amended agreement, the Company surrendered a portion of the property totaling approximately 8,000 square feet to the lessor. Accordingly, the Company derecognized a portion of the build-to-suit asset totaling $3.2 million and a portion of the build-to-suit lease obligation totaling $3.2 million during 2015 related to the portion of the property that was surrendered to the lessor.

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During the first quarter of 2016, construction on the property was substantially completed and the property was placed in service. As such, the Company evaluated its lease to determine whether it had met the requirements for sale-leaseback accounting, including evaluating whether all risks of ownership have been transferred back to the landlord, as evidenced by a lack of continuing involvement in the leased property. The Company determined that the construction project did not qualify for sale-leaseback accounting and will instead be accounted for as a financing lease, given the Company’s expected continuing involvement after the conclusion of the construction period. As a result, the building asset remains on the Company’s unaudited condensed consolidated balance sheets at its historical cost of $18.4 million and the Company began depreciating the asset over its estimated useful life in the first quarter of 2016. Additionally, the Company is allocating its monthly lease payments between land rent, which is recorded as an operating lease expense, interest expense, and reduction of the related lease obligation. As of June 30, 2016, the total amount of the build-to-suit lease obligation was $17.4 million, of which $17.2 million was classified as a non-current liability on the unaudited condensed consolidated balance sheets. The Company expects to derecognize the build-to-suit lease asset and lease obligation at the end of the lease term.

Expected future lease payments under the build-to-suit lease as of June 30, 2016 are included in Note 11, “Commitments and Contingencies.”

NOTE 9. OTHER BALANCE SHEET ITEMS

(a) Property and Equipment, Net

Property and equipment, net, consisted of the following:

	June 30, 2016			December 31, 2015
Leasehold improvements	$	26,658		$	19,074
Computer equipment and software		20,194			16,083
Build-to-suit property		18,371			18,371
Construction in progress		6,446			14,440
Furniture and fixtures		6,014			5,714
Laboratory equipment		4,472			748
		82,155			74,430
Less: Accumulated depreciation		(21,161	)		(16,288	)
Total	$	60,994		$	58,142

(b) Accounts Payable, Accrued Expenses and Other Current Liabilities

Accounts payable, accrued expenses and other current liabilities consisted of the following:

	June 30, 2016		December 31, 2015
Clinical and preclinical	$	44,749	$	48,975
Accrued professional services and other current liabilities		24,893		14,282
Payroll and payroll-related		22,980		29,215
Royalties payable		22,740		20,665
Accounts payable		19,664		22,696
Taxes payable		—		32,565
Other payable to licensor		—		17,500
Interest payable		—		305
Total	$	135,026	$	186,203

Accounts payable represents short-term liabilities for which the Company has received and processed a vendor invoice prior to the end of the reporting period. Accrued expenses and other current liabilities represent, among other things, compensation and related benefits to employees, royalties due to licensors of technologies, estimated amounts due to third-party vendors for services rendered prior to the end of the reporting period, invoices received from third-party vendors that have not yet been processed, taxes payable, interest payable and other accrued items.

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NOTE 10. DEBT

(a) Revolving Credit Facility

In October 2015, the Company entered into an amendment and restatement of its original credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto (the “Lenders”), providing for: (i) a five-year $300 million revolving loan facility (the “Revolving Credit Facility”); and (ii) an uncommitted accordion facility subject to the satisfaction of certain conditions (collectively, the “Senior Secured Credit Facility”). The Revolving Credit Facility includes a $50 million multicurrency sub-facility, a $20 million letter of credit sub-facility and a $10 million swing line loan sub-facility.

Loans under the Revolving Credit Facility bear interest, at the Company’s option, at a rate equal to either (a) the LIBOR rate, plus an applicable margin ranging from 1.75% to 2.50% per annum, based upon the secured leverage ratio (as defined in the Credit Agreement) or (b) the prime lending rate, plus an applicable margin ranging from 0.75% to 1.50% per annum, based upon the senior secured net leverage ratio (as defined in the Credit Agreement). In October 2015, the Company borrowed $75.0 million under the Revolving Credit Facility, which the Company repaid in January 2016. The interest rate for this borrowing was 2.1250% and was applied on an actual/360 day basis. There were no balances outstanding under the Revolving Credit Facility at June 30, 2016.

The obligations under the Credit Agreement and any swap obligations and banking services obligations owing to a lender (or an affiliate of a lender) thereunder are and will be guaranteed by the Company and each of the Company’s existing and subsequently acquired or organized direct and indirect domestic subsidiaries (other than certain immaterial domestic subsidiaries, certain Domestic Foreign Holding Companies, and certain domestic subsidiaries whose equity interests are owned directly or indirectly by certain foreign subsidiaries) (collectively, the “Loan Parties”). The obligations under the Credit Agreement and any such swap and banking services obligations are secured, subject to customary permitted liens and other agreed upon exceptions, by a perfected security interest in (i) all tangible and intangible assets of the Loan Parties, except for certain customary excluded assets, and (ii) all of the capital stock owned by the Loan Parties thereunder (limited, in the case of the stock of certain non-U.S. subsidiaries of the Company and Domestic Foreign Holding Companies, to 65% of the capital stock of such subsidiaries).

The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions. Under the terms of the Credit Agreement, the Company is required to comply with a maximum senior secured net leverage ratio and minimum interest coverage ratio covenants. At June 30, 2016, the Company was in compliance with these covenants.

In accordance with ASU 2015-15, the Company deferred $1.7 million of debt issuance costs associated with the Revolving Credit Facility, including underwriting, legal and accounting fees, and is amortizing this amount ratably over the five-year access period of the facility. Amortization of the debt issuance costs is recorded as non-cash interest expense on the unaudited condensed consolidated statements of operations.

(b) Convertible Notes Due 2017

In March 2012, the Company issued $258.8 million aggregate principal amount of 2.625% convertible senior notes due April 1, 2017, or the Convertible Notes. The Company was required to pay interest semi-annually in arrears on April 1 and October 1 of each year. The Convertible Notes were convertible upon the occurrence of certain conditions into shares of the Company’s common stock.

During 2015, the Company settled all of the Convertible Notes. During the second quarter of 2015, the Company settled a total of $91.0 million aggregate principal amount of the Convertible Notes through a combination of $92.1 million in cash and 2,099,358 shares of its common stock. During the third quarter of 2015, the Company settled a total of $167.8 million aggregate principal amount of the Convertible Notes through a combination of $167.8 million in cash and 3,539,218 shares of its common stock. The Company recorded a non-cash loss on extinguishment of the Convertible Notes of $7.9 million and $13.2 million in the second and third quarters of 2015, respectively, which was included in other income (expense), net, on the condensed consolidated statements of operations. Forfeited accrued interest payable totaling $1.7 million was reclassified to additional paid-in capital during 2015. Upon settlement, the Convertible Notes were no longer outstanding, interest ceased to accrue thereon, and all rights of the holders of the Convertible Notes ceased to exist.

NOTE 11. COMMITMENTS AND CONTINGENCIES

(a) Lease Obligations

The Company leases approximately 158,000 square feet of office space, including approximately 143,000 square feet of office space at its corporate headquarters, pursuant to operating lease agreements expiring at various dates through December 2019. The Company has the option to extend the lease term of its corporate headquarters, which expires in June 2019, for an additional five years.

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Future operating lease obligations as of June 30, 2016 are as follows:

Years Ending December 31,	Operating Leases
Remainder of 2016	$	4,707
2017		9,542
2018		9,743
2019		5,065
2020		—
2021 and thereafter		—
Total minimum lease payments	$	29,057

The Company is considered the “accounting owner” for a build-to-suit property and has recorded a build-to-suit lease obligation on its unaudited condensed consolidated balance sheets. Additional information regarding the build-to-suit lease obligation is included in Note 8, “Build-To-Suit Lease Obligation.”

Expected future lease payments under the build-to-suit lease as of June 30, 2016 are as follows:

Years Ending December 31,	Expected Cash Payments Under Build- To-Suit Lease Obligation
Remainder of 2016	$	1,100
2017		2,244
2018		2,311
2019		2,380
2020		2,452
2021 and thereafter		9,627
Total minimum lease payments	$	20,114

(b) License Agreement with UCLA

Under an August 2005 license agreement with UCLA, the Company’s subsidiary Medivation Prostate Therapeutics, Inc., or MPT, holds an exclusive worldwide license under several UCLA patents and patent applications covering XTANDI and related compounds. Under the Astellas Collaboration Agreement, the Company granted Astellas a sublicense under the patent rights licensed to it by UCLA.

The Company is required to pay UCLA (a) an annual maintenance fee, (b) $2.8 million in aggregate milestone payments upon achievement of certain development and regulatory milestone events with respect to XTANDI (all of which has been paid as of March 31, 2016), (c) ten percent of all Sublicensing Income, as defined in the agreement, which the Company earns under the Astellas Collaboration Agreement, and (d) a four percent royalty on global net sales of XTANDI, as defined. Under the terms of the Astellas Collaboration Agreement, the Company shares this royalty obligation equally with Astellas with respect to sales in the United States, and Astellas is responsible for this entire royalty obligation with respect to sales outside of the United States. The Company is currently involved in litigation with UCLA, which is discussed in the section titled “Litigation” below.

UCLA may terminate the agreement if the Company does not meet a general obligation to diligently proceed with the development, manufacturing and sale of licensed products, or if it commits any other uncured material breach of the agreement. The Company may terminate the agreement at any time upon advance written notice to UCLA. If neither party terminates the agreement early, the agreement will continue in force until the expiration of the last-to-expire patent on a country-by-country basis.

(c) Clinical Manufacturing Agreements

Manufacturing Services and Supply Agreement

Contemporaneous with the execution of the License Agreement with CureTech, the Company entered into a Manufacturing Services and Supply Agreement, or MSA, with CureTech pursuant to which CureTech will provide clinical trial supply of MDV9300

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over a three-year period. In accordance with the terms of the MSA, as amended, the Company paid CureTech upfront and setup fees of $3.0 million during the fourth quarter of 2014, $0.2 million during the second quarter of 2015 and $0.1 million during the third quarter of 2015. The Company is required to pay CureTech a one-time milestone payment of $5.0 million upon the completion of the Manufacturing Technology Transfer, as defined. This potential milestone payment is included in the Company’s contingent consideration liability related to CureTech in connection with the acquisition of MDV9300, as described in Note 5, “Fair Value Disclosures.” In accordance with the terms of the MSA, as amended, the Company is also responsible for providing funding totaling up to $18.3 million for clinical trial materials of MDV9300 over the three-year term of the MSA as well as for certain developmental and analytical services, of which $12.0 million has been paid through June 30, 2016.

Development and Manufacturing Services Agreement

During the fourth quarter of 2014, the Company entered into a Development and Manufacturing Services Agreement with a third-party clinical manufacturing organization. The term of the agreement is for the longer of (i) a period of five years or (ii) through the completion of the Services, as defined. Under the current statement of work under this agreement, as amended, the Company intends to transfer the current manufacturing process of MDV9300 from CureTech to this third party, further scale up and production of Phase 3 clinical trial material of MDV9300 from this entity’s manufacturing facility. The estimated total consideration payable under the current statement of work, as amended, is approximately $15.2 million, of which approximately $7.6 million has been paid through June 30, 2016.

(d) Litigation

The Company is party to legal proceedings, investigations, and claims in the ordinary course of its business, including the matters described below. The Company records accruals for outstanding legal matters when it believes that it is both probable that a liability has been incurred and the amount of such liability can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in significant legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. To the extent new information is obtained and the Company’s views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company’s accrued liabilities would be recorded in the period in which such determination is made. In addition, in accordance with the relevant authoritative guidance, for matters for which the likelihood of material loss is at least reasonably possible, the Company provides disclosure of the possible loss or range of loss; however, if a reasonable estimate cannot be made, the Company will provide disclosure to that effect. Gain contingencies, if any, are recorded when they are realized.

In May 2011, the Company filed a lawsuit in San Francisco Superior Court against the Regents of the University of California, or the Regents, and one of its professors, alleging breach of contract and fraud claims, among others. The Company’s allegations in this lawsuit include that it has exclusive commercial rights to apalutamide, an investigational drug originally known as ARN-509 (previously also referred to as JNJ-56021927, or JNJ-927), which is currently being developed by Aragon Pharmaceuticals, or Aragon. In August 2013, Johnson & Johnson and Aragon completed a transaction in which Johnson & Johnson acquired all apalutamide assets owned by Aragon. The Company sought remedies including a declaration that it is the proper licensee of apalutamide, contractual remedies conferring to it exclusive patent license rights regarding apalutamide, and other equitable and monetary relief. On August 7, 2012, the Regents filed a cross-complaint against the Company seeking declaratory relief that the Regents are entitled to ten percent of any sales milestone payments under the Astellas Collaboration Agreement.

On December 20, 2012, and January 25, 2013, the Court granted summary judgment motions filed by defendants Regents and Aragon, resulting in dismissal of all claims against Regents and Aragon, but denied such motions filed by the remaining Regents professor. On April 15, 2013, the Company filed a Notice of Appeal seeking appeal of the judgment in favor of Aragon, which is now wholly-owned by Johnson & Johnson. The bench trial of the Regent’s cross-complaint against the Company was conducted in July 2013, and on January 15, 2014, the Court entered a judgment in the cross-complaint in favor of Regents. The Company appealed this judgment on February 13, 2014 along with the December 2012 summary judgment order in favor of Regents. The jury trial of the Company’s breach of contract and fraud claims against the remaining Regents professor was conducted in October and November 2013. On November 15, 2013, the jury rendered a verdict in the case, finding in favor of the Company on one of the breach of contract claims, and in favor of the Regents professor on the fraud claims. The Company appealed the resulting judgment on the fraud claims. All appeals from this matter were consolidated, oral arguments were heard on February 23, 2016, and the matter was submitted. A decision of the appellate court is required to be rendered within 90 days of when the matter is submitted. On March 8, 2016, the Court’s submission was vacated, on its own order, stating that “further consideration of the merits of the issues raised on appeal is required.” The Court has set tentative trial dates for the first half of 2017.

On April 11, 2014, the Regents filed a complaint against the Company in which the Regents allege that the “Operating Profits” the Company has received (and will continue to receive) from Astellas, as a result of the Astellas Collaboration Agreement, constitute Sublicensing Income under the license agreement between the Company and the Regents and that the Company and its subsidiary, MPT, have failed to pay the Regents ten percent of such Operating Profits. The Company denies the Regents’ allegations and is vigorously defending the litigation. The Company is currently awaiting a trial date to be set by the Courts.

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While the Company believes it has meritorious positions with respect to the claims above and intends to advance its positions in these lawsuits vigorously, including on appeal, the process of resolving matters through litigation or other means is inherently uncertain, and it is not possible to predict the ultimate resolution of any such proceeding. The actual costs of defending the Company’s position may be significant, and the Company may not prevail.

NOTE 12. STOCKHOLDERS’ EQUITY

(a) Stock Purchase Rights

All shares of the Company’s common stock, if issued prior to the termination by the Company of its rights agreement, dated as of December 4, 2006, include stock purchase rights. The rights are exercisable only if a person or group acquires twenty percent or more of the Company’s common stock or announces a tender or exchange offer which would result in ownership of twenty percent or more of the Company’s common stock. Following the acquisition of twenty percent or more of the Company’s common stock, the holders of the rights, other than the acquiring person or group, may purchase Medivation common stock at half of its fair market value. In the event of a merger or other acquisition of the Company, the holders of the rights, other than the acquiring person or group, may purchase shares of the acquiring entity at half of their fair market value. The rights were not exercisable at June 30, 2016.

(b) Medivation Equity Incentive Plan

The Medivation Equity Incentive Plan provides for the issuance of options and other stock-based awards, including stock appreciation rights, restricted stock awards, restricted stock units and performance share units. The vesting of all outstanding awards under the Medivation Equity Incentive Plan will accelerate, and all such awards will become immediately exercisable, upon a “change of control” of Medivation, as defined in the Medivation Equity Incentive Plan.

During the second quarter of 2016, the Company’s stockholders approved an amendment and restatement of the Medivation Equity Incentive Plan to increase the aggregate number of shares of common stock authorized for issuance under the Medivation Equity Incentive Plan from 47,700,000 to 49,300,000. As of June 30, 2016, approximately 7.4 million shares were available for issuance under the Medivation Equity Incentive Plan.

Performance Share Units

The Company granted 159,121 target number of PSUs during the first and second quarters of 2016 to certain officers of the Company pursuant to the terms of the Medivation Equity Incentive Plan. The terms of the PSUs provide for target and maximum numbers of shares eligible to be earned based on the level of achievement of certain pre-determined revenue goals and clinical development milestones. For the PSUs tied to revenue goals, the actual number of shares of common stock that may ultimately be issued upon vest is calculated by multiplying the number of PSUs by a payout percentage ranging from 50% to 150%. For the PSUs tied to clinical development milestones, the actual number of shares of common stock that may ultimately be issued upon vest is calculated by multiplying the number of PSUs by a payout percentage of 100%.

The PSUs will vest, if at all, upon certification by the Compensation Committee of the Company’s Board of Directors, or the Committee, of the actual achievement of the performance objectives, subject to specified change of control exceptions. Each recipient of a PSU must remain an employee of the Company through the date the Committee determines actual performance has been achieved in order to earn the shares eligible under the award. For a portion of the PSUs tied to revenue goals, each recipient must remain an employee of the Company for one year after the initial date the Committee determined actual performance was achieved in order to earn that particular portion of the shares eligible under the award. Stock-based compensation expense associated with PSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date. The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest.

(c) ESPP

The Company’s ESPP permits eligible employees to purchase shares of the Company’s common stock through payroll deductions at the lower of 85% of the fair market value of the common stock at the beginning or end of a purchase period. Eligible employee purchases are limited on an annual basis to $25,000 in accordance with Section 423 of the Internal Revenue Code. The number of shares of common stock authorized for issuance under the ESPP is 6,000,000 shares. As of June 30, 2016, a total of 397,536 shares have been issued under the ESPP.

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(d) Stock-Based Compensation

Stock-based compensation expense was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Stock-based compensation expense recognized as:
R&D expense	$	5,858	$	6,109	$	11,895	$	11,920
SG&A expense		8,836		7,969		17,010		15,530
Total	$	14,694	$	14,078	$	28,905	$	27,450

(e) Accumulated Other Comprehensive Loss

The following table summarizes the changes in accumulated other comprehensive loss by component, net of tax:

	Unrealized Gains and Losses on Cash Flow Hedges			Unrealized Gains and Losses on Available-for-Sale Securities			Total
Balance at December 31, 2015		—			—			—
Other comprehensive loss before reclassifications	$	(687	)	$	(6	)	$	(693	)
Amounts reclassified from other comprehensive loss		143			—			143
Net current period other comprehensive loss		(544	)		(6	)		(550	)
Balance at June 30, 2016	$	(544	)	$	(6	)	$	(550	)

Amounts reclassified for gains and losses on cash flow hedges are recorded as part of collaboration revenue on the Company’s condensed consolidated statements of operations. Amounts reclassified for gains and losses on available-for-sale securities are recorded as part of other income (expense), net on the Company’s condensed consolidated statements of operations.

NOTE 13. NET INCOME (LOSS) PER COMMON SHARE

The computation of basic net income (loss) per common share is based on the weighted-average number of common shares outstanding during each period. The computation of diluted net income (loss) per common share is based on the weighted-average number of common shares outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, restricted stock units, performance share units, stock appreciation rights, ESPP shares, warrants, and shares issuable upon conversion of convertible debt.

In periods where the Company reports a net loss, all common stock equivalents are deemed anti-dilutive such that basic net loss per common share and diluted net loss per common share are equal.

For both the three and six months ended June 30, 2016, approximately 13.4 million potentially dilutive common shares of the Company’s common stock were excluded from the computation of diluted net loss per common share due to the Company’s net loss for these periods. For the three and six months ended June 30, 2015, employee stock-based awards to purchase approximately 1.3 million and 1.0 million shares of the Company’s common stock, respectively, were excluded from the computation of diluted net income per common share because their effect would have been anti-dilutive.

The following table reconciles the numerator and denominator used to calculate diluted net income (loss) per common share:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016			2015		2016			2015
Numerator:
Net income (loss)	$	(403,922	)	$	25,826	$	(399,106	)	$	22,708
Denominator:
Weighted-average common shares, basic		164,926			158,505		164,586			157,576
Dilutive effect of common stock equivalents		—			10,185		—			5,419
Weighted-average common shares, diluted		164,926			168,690		164,586			162,995

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At June 30, 2015, the Company had $167.8 million aggregate principal amount of the Convertible Notes outstanding, for which the Company controlled the settlement method. During the second quarter of 2015, the Company asserted its intent and ability to settle the outstanding Convertible Notes for a combination of cash and common stock. Under the “cash settlement” method, interest is not added back to the numerator, and only the contingently issuable shares related to the conversion spread are included in the denominator, if dilutive. Under such method, the settlement of the conversion spread had a dilutive effect when the average share price of the Company’s common stock during the period exceeded the conversion price of approximately $25.62 per share of common stock. The calculation of diluted net income per common share for the three months ended June 30, 2015 includes the effect of approximately 4.8 million common shares related to the conversion spread of the Convertible Notes.

The computation of diluted net income per common share for the six months ended June 30, 2015 reflects the application of the “if-converted” method for the first quarter of 2015 and the “cash settlement” method for the second quarter of 2015 given the demonstrated and asserted redemption for the outstanding debt. Under the “if-converted” method, interest expense, net of tax, related to the Convertible Notes, is added back to net income, and the Convertible Notes are assumed to have been converted into common shares at the beginning of the period during periods in which there would have been a dilutive effect. For the six months ended June 30, 2015, the impact of the Convertible Notes has been excluded from the calculation of diluted net income per common share because the effect of their inclusion would have been anti-dilutive (approximately 7.4 million contingently issuable shares have been excluded).

The Company completed the settlement of the Convertible Notes during the third quarter of 2015 as discussed further in Note 10, “Debt.”

NOTE 14. INCOME TAXES

The Company calculates its quarterly income tax provision in accordance with the guidance provided by ASC 740-270, “Interim Income Tax Accounting,” whereby the Company forecasts its estimated annual effective tax rate and then applies that rate to its year-to-date pre-tax book income (loss). Income tax benefit for the three and six months ended June 30, 2016 was $222.2 million and $219.8 million, respectively. The benefit for income taxes was higher than the tax computed at the U.S. federal statutory rate due primarily to the Federal research and development credit and tax benefit from stock-based compensation, partially offset by state income taxes and non-deductible officers’ compensation. The benefit for income taxes for the three and six months ended June 30, 2016 included discrete tax benefits of $236.4 million and $2.2 million related to non-recurring charges for contingent consideration and advisory mergers and acquisitions fees, respectively. In addition, the Company recorded a discrete tax expense of $1.6 million related to a non-recurring IPR&D asset impairment adjustment. Income tax expense for the three and six months ended June 30, 2015 was $14.6 million and $12.8 million, respectively. A discrete tax benefit of $2.8 million related to the loss on extinguishment of the Convertible Notes was included in the provision for income taxes for the three and six months ended June 30, 2015.

The effective tax rate was 35.5% for both the three and six months ended June 30, 2016. The effective tax rate was 36.1% for both the three and six months ended June 30, 2015. The decrease in the effective tax rate for the three and six months ended June 30, 2016 as compared to the prior year periods was due to the Federal research and development tax credit which was permanently reinstated in the fourth quarter of 2015 and greater tax benefits from stock-based compensation in the second quarter of 2016.

For the six months ended June 30, 2016, the Company reduced its current Federal and state taxes payable by $13.4 million related to excess tax benefits from stock-based compensation, increasing additional paid-in capital.

The Company records a valuation allowance to reduce deferred tax assets to reflect the net amount that is more likely than not to be realized. Based upon the weight of available evidence at December 31, 2014, the Company determined that it was more likely than not that a portion of its deferred tax assets would be realizable and consequently released the valuation allowance against Federal and certain state net deferred tax assets during the fourth quarter of 2014. The decision to reverse a portion of the valuation allowance was made after management considered all available evidence, both positive and negative, including but not limited to the historical operating results, income or loss in recent periods, cumulative income in recent years, forecasted earnings, forecasted future taxable income, and significant risk and uncertainty related to forecasts. The release of the valuation allowance resulted in the recognition of certain deferred net tax assets and a decrease to income tax expense.

The future effective tax rate is subject to volatility and may be materially impacted by various internal and external factors. These factors may include, but are not limited to, the amount of income tax benefits and charges from: interpretations of existing tax laws; changes in tax laws and rates; future levels of research and development expenditures; changes in the mix of earnings in countries with differing statutory tax rates in which the Company may conduct business; changes in the valuation of deferred tax assets and liabilities; state income taxes; the tax impact of stock-based compensation; accounting for uncertain tax positions; closure of statute of limitations or settlement of tax audits; changes in estimates of prior years’ items; tax costs for acquisition-related items; changes in accounting standards; non-deductible officers’ compensation; limitations on the utilization of net operating losses and tax credits due to changes in ownership; and overall levels of income before taxes.

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NOTE 15. SUBSEQUENT EVENT

In July 2016, the Company entered into the Seventh Amendment to its lease agreement, as amended, for its corporate headquarters, pursuant to which it leased approximately 29,000 square feet of additional office space that it expects to occupy in early 2017. In connection with the execution of the Seventh Amendment, the Company will be delivering to the lessor an irrevocable standby letter of credit totaling $1.0 million in November 2016. The Seventh Amendment to the lease agreement expires in 2024, and the Company has an option to extend the lease term for an additional five years. As of July 2016, the Company leased a total of approximately 172,000 square feet of office space at its corporate headquarters pursuant to its lease agreement, as amended.

The future operating lease obligations from this amendment are as follows:

Years Ending December 31,	Operating Lease
Remainder of 2016	$	—
2017		1,938
2018		2,383
2019		2,455
2020		2,528
2021 and thereafter		9,465
Total minimum lease payments	$	18,769

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion and analysis should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2015, included in our Annual Report on Form 10-K for the year ended December 31, 2015, or Annual Report. The following discussion and analysis contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We intend that these forward-looking statements be subject to the safe harbors created by those provisions. Forward-looking statements are generally written in the future tense and/or are preceded by words such as “may,” “should,” “could,” “expect,” “suggest,” “believe,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” or similar words, or negatives of such terms or other variations on such terms of comparable terminology. These forward-looking statements include, but are not limited to, statements regarding the commercialization of XTANDI^® (enzalutamide) capsules, or XTANDI, the continuation and success of our collaboration with Astellas Pharma, Inc., or Astellas, the timing, progress and results of our clinical trials, and our future drug development activities, including those with respect to talazoparib (which is referred to as MDV3800) and pidilizumab (which is referred to as MDV9300). The forward-looking statements contained in this Quarterly Report on Form 10-Q, or Quarterly Report, involve a number of risks, uncertainties and assumptions, many of which are outside of our control. Factors that could cause actual results to differ materially from projected results include, but are not limited to, those discussed in “Risk Factors” in Item 1A of Part II below. Readers are expressly advised to review and consider those Risk Factors. Although we believe that the assumptions underlying the forward-looking statements contained in this Quarterly Report are reasonable, any of the assumptions could be inaccurate, and therefore there can be no assurance that the results anticipated by such statements will occur. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. Furthermore, past financial or operations performance is not necessarily indicative of future performance. We disclaim any intention or obligation to update, supplement or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a biopharmaceutical company focused on the development and commercialization of medically innovative therapies to treat serious diseases for which there are limited treatment options. We have one commercial product, XTANDI^® (enzalutamide) capsules, or XTANDI, through our collaboration with Astellas Pharma, Inc., or Astellas. XTANDI has received marketing approval in the United States, Europe and numerous other countries worldwide for the treatment of patients with metastatic castration-resistant prostate cancer, or mCRPC, and in Japan for the treatment of patients with castration-resistant prostate cancer, or CRPC. We and Astellas are also conducting investigational studies of enzalutamide in prostate cancer, advanced breast cancer, and hepatocellular carcinoma. Under our collaboration agreement with Astellas, we share equally with Astellas all profits (losses) related to U.S. net sales of XTANDI. We also receive royalties ranging from the low teens to the low twenties as a percentage of ex-U.S. XTANDI net sales.

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We seek to become a more fully-integrated biopharmaceutical company through the continued commercialization of XTANDI, the acquisition or in-license and development and commercialization of other product opportunities, and through the advancement of our own proprietary research and development programs. We expect that our future growth may come from both our internal research efforts, focused in oncology, neurology and other areas, and third-party business development activities, such as our acquisition of all worldwide rights to talazoparib (which we refer to as MDV3800) from BioMarin Pharmaceutical Inc., or BioMarin, in the fourth quarter of 2015 and our license of exclusive worldwide rights to pidilizumab (which we refer to as MDV9300) from CureTech, Ltd., or CureTech, in the fourth quarter of 2014. In July 2016, we announced that we had entered into confidentiality agreements with a number of parties that have expressed interest in exploring a potential business combination or similar transaction.

2016 Clinical and Business Highlights

The following summarizes our recent clinical and business highlights:

• In June 2016, we announced that results from a Phase 1/2 study of pidilizumab in pediatric patients with diffuse intrinsic pontine glioma, or DIPG, were presented at an oral symposium at the International Symposium on Pediatric Neuro-Oncology by the study’s lead investigator Iris Fried, M.D., Attending Physician, Pediatric Hemato-oncology, Hadassah Medical Center. Preliminary data from nine pediatric patients, who were treated with pidilizumab following completion of standard radiation therapy, demonstrated the potential clinical benefit of pidilizumab in DIPG. The study, which was exploratory in nature, was designed to assess the safety and tolerability of pidilizumab, as well as key clinical outcomes, such as event-free and overall survival, in pediatric patients with DIPG. The reported mean event-free and overall survival estimates were 12 and 15.6 months, respectively. Three patients with DIPG remained progression-free at 16.3, 22, and 24 months following diagnosis, with one patient experiencing a partial response. Adverse events of any grade reported in at least one treatment cycle include neutropenia, fatigue, loss of appetite, hypertension, nausea, and lymphopenia; only neutropenia and hypertension were reported as grade 3 adverse events. The study continues to enroll patients.

• In June 2016, we and Astellas announced plans to commence a Phase 3 clinical trial to investigate the use of enzalutamide for the treatment of triple negative breast cancer, or TNBC. The ENDEAR (A Phase III, Randomized, International Study Comparing the Efficacy and Safety of ENzalutamiDe in Combination With PaclitaxEl Chemotherapy or as Monotherapy Versus Placebo With Paclitaxel in Patients With Advanced, Diagnostic-Positive, Triple-Negative BReast Cancer) trial will evaluate the efficacy and safety of enzalutamide in combination with paclitaxel chemotherapy or as monotherapy versus placebo with paclitaxel in patients with locally advanced or metastatic TNBC whose tumors test positive for a novel gene expression profile. The trial, which will be led by Medivation, is expected to begin patient enrollment in the fourth quarter of 2016.

• In May 2016, we announced that the talazoparib-containing arm of the I-SPY2 TRIAL (Investigation of Serial Studies to Predict Your Therapeutic Response with Imaging And moLecular Analysis 2), sponsored by the QuantumLeap Healthcare Collaborative, was activated. The I-SPY 2 TRIAL is a Phase II, randomized, controlled, multi-center trial for women with newly diagnosed, locally advanced breast cancer (Stage II/III). The trial employs an adaptive design, matching experimental therapies with patients based on the use of biomarkers, investigating whether new therapies can be added to standard chemotherapy or whether they may replace certain components of standard chemotherapy in the neoadjuvant setting. The talazoparib arm of the I-SPY 2 TRIAL will enroll up to 75 patients with HER-2 negative breast cancer. Patients will be treated initially with talazoparib daily and irinotecan every two weeks for 12 weeks followed by treatment with doxorubicin and cyclophosphamide. Patients in the comparator arm will receive standard paclitaxel therapy followed by doxorubicin and cyclophosphamide treatment. The primary endpoint of the trial is pathologic complete response, defined as the absence of clinical and pathological evidence of invasive tumor in breast or lymph nodes.

• In April 2016, we announced that data from a Phase 2 investigator-sponsored study of enzalutamide was presented at the American Association for Cancer Research Annual Meeting 2016, or AACR, by the study’s lead investigator Ravi Madan, M.D., Clinical Director, Genitourinary Malignancies Branch at the National Cancer Institute. The primary objective of the study was to evaluate the effect of a short-course of enzalutamide (three months) alone or in combination with a therapeutic cancer vaccine (PROSTVAC^®) on prostate specific antigen kinetics four months after completing enzalutamide. Preliminary data from a 12-patient subset demonstrated that treatment with enzalutamide alone resulted in potential immune-activating properties in patients with non-metastatic castration sensitive prostate cancer.

• In April 2016, we announced that Phase 1 data from an investigator-sponsored study of talazoparib in combination with low-dose chemotherapy was presented during a Clinical Trials Mini-Symposium at AACR by the study’s lead investigator Zev A. Wainberg, M.D., Associate Professor of Medicine at UCLA and Co-Director of the UCLA GI Oncology Program. Data from the 40 patient trial demonstrated that combination treatment with talazoparib and low-dose chemotherapy resulted in stable disease or an objective response in 23 of 40 heavily pretreated patients with a variety of advanced cancers (clinical benefit rate of 58%). Most notably, objective responses were seen in

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four of seven (57%) heavily pretreated non-BRCA-mutated ovarian cancer patients when talazoparib was used in combination with either low-dose temozolomide or low-dose irinotecan. Six of seven individuals (86%) with non-BRCA ovarian cancer had clinical benefit (four partial responses and two stable disease through the first 16 weeks of study) and had a reduction in CA 125 levels by 50% or greater.

The Phase 1 investigator-sponsored study evaluated escalating doses of talazoparib (³ 0.5 mg given orally once daily) with either temozolomide (³ 25 mg/m2 given orally on days 1-5; Arm A) or irinotecan (³ 25 mg/m2 given by intravenous infusion every two weeks; Arm B) every 28 days in patients with advanced malignancies. Study participants ranged in age from 21 to 77 years (median: 57 years) and had received one to fifteen prior chemotherapy regimens (median: 6). The primary endpoint of the study was the determination of the maximum tolerated dose. Secondary endpoints included pharmacokinetics, tumor response and biomarkers. The most common grade 3/4 adverse events (³ 5%) observed in patients treated with talazoparib plus temozolomide were neutropenia (28%), anemia (33%), and thrombocytopenia (33%). Among those treated with talazoparib plus irinotecan, the most common adverse events were thrombocytopenia (13%), anemia (27%) and neutropenia (31%). No significant pharmacokinetic interactions were observed between talazoparib and either temozolomide or irinotecan.

• In April 2016, we announced that the Committee for Medicinal Products for Human Use, or CHMP, of the European Medicines Agency, or EMA, had issued a positive opinion recommending approval of a type II variation to include data from the head-to-head TERRAIN trial of enzalutamide versus bicalutamide in the European label for XTANDI. The CHMP’s positive recommendation does not change indications or contraindications, and the update to the Summary of Product Characteristics, or SmPC, took effect immediately and is applicable in all of the 28 member states of the European Union.

• In March 2016, the first patient was enrolled in the Phase 3 ARCHES trial to evaluate the efficacy and safety of enzalutamide with androgen deprivation therapy versus placebo with androgen deprivation therapy in metastatic hormone sensitive prostate cancer, or mHSPC, patients. The global, randomized, double-blind, placebo-controlled study aims to enroll approximately 1,100 patients with mHSPC at approximately 250 centers globally. The primary endpoint of the trial is radiographic progression-free survival, or rPFS, defined as the time from randomization to the first objective evidence of radiographic disease progression as assessed by central review or death, whichever occurs first.

• In February 2016, the U.S. Food and Drug Administration, or FDA, accepted for review a supplemental New Drug Application, or sNDA, for XTANDI in mCRPC, which includes findings from the Phase 2 TERRAIN and STRIVE studies, to update the relevant clinical sections within the current indication. XTANDI is approved by the FDA for the treatment of patients with mCRPC. The Prescription Drug User Fee Act, or PDUFA, goal date for a decision by the FDA is October 22, 2016.

• Results from the Phase 2 STRIVE trial of enzalutamide compared to bicalutamide in men with CRPC were published in the Journal of Clinical Oncology.

• Results from the Phase 2 TERRAIN trial of enzalutamide compared to bicalutamide in metastatic CRPC were published in Lancet Oncology.

• In January 2016, we entered into a collaboration agreement with NanoString Technologies, Inc., or NanoString, and our partner Astellas to translate our gene expression profile into a companion diagnostic assay using NanoString’s nCounter^® Dx Analysis System for potential use as a companion diagnostic test for enzalutamide for triple negative breast cancer, or TNBC.

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2016 Financial Highlights

• Net sales of XTANDI as reported by Astellas and collaboration revenue related to net sales of XTANDI are summarized in the table below (dollars in millions; amounts may not calculate or sum precisely due to rounding):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016			2015		2016			2015
Worldwide net sales of XTANDI (as reported by Astellas)	$	595		$	487	$	1,142		$	844
Increase year-over-year	$	108				$	298
Percentage change		22	%				35	%
U.S. XTANDI net sales (as reported by Astellas)	$	330		$	298	$	638		$	522
Increase year-over-year	$	32				$	115
Percentage change		11	%				22	%
Ex-U.S. XTANDI net sales (as reported by Astellas)	$	265		$	188	$	504		$	321
Increase year-over-year	$	76				$	183
Percentage change		41	%				57	%
Collaboration revenue	$	206		$	176	$	389		$	305
Increase year-over-year	$	30				$	84
Percentage change		17	%				28	%

• Total operating expenses for the three months ended June 30, 2016 were $831.8 million, an increase of $709.8 million from the three months ended June 30, 2015. Total operating expenses for the six months ended June 30, 2016 were $1.01 billion, an increase of $755.6 million from the six months ended June 30, 2015. Operating expenses included non-cash expense related to fair value adjustments for contingent consideration of $684.3 million and $1.0 million for the three months ended June 30, 2016 and 2015, respectively, and $690.3 million and $5.0 million for the six months ended June 30, 2016 and 2015, respectively. Operating expenses also included non-cash stock-based compensation expense of $14.7 million and $14.1 million for the three months ended June 30, 2016 and 2015, respectively, and $28.9 million and $27.5 million for the six months ended June 30, 2016 and 2015, respectively. See “Selling, General and Administrative Expenses” below for further discussion of the contingent consideration adjustments for the second quarter of 2016.

• Cash, cash equivalents and investments were $348.7 million at June 30, 2016, an increase of $122.9 million, or 54%, from $225.9 million at December 31, 2015. During the first quarter of 2016, we collected the 2015 collaboration receivable balance from Astellas, which included a $175.0 million sales milestone payment, and utilized $75.0 million of cash to repay our borrowing under our five-year $300.0 million revolving loan facility (the “Revolving Credit Facility”).

Critical Accounting Policies and the Use of Estimates

The preparation of our consolidated financial statements and related footnotes requires us to make estimates, assumptions and judgments in certain circumstances that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We have based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. We have discussed the development, selection and disclosure of these estimates with the Audit Committee of our Board of Directors. Actual results could differ materially from these estimates under different assumptions or conditions. A detailed description of our significant accounting policies is included in the footnotes to our audited consolidated financial statements included in our Annual Report.

We have identified our most critical accounting policies and estimates upon which our financial statements depend as those relating to: revenue recognition, including reliance on third-party information, estimating the various deductions from gross sales used to calculate net sales of XTANDI, and estimating the performance periods of our deliverables under collaboration agreements; business combinations, including estimates related to goodwill, intangible assets and contingent consideration; stock-based compensation; research and development expenses and accruals; litigation; convertible notes; leases, including build-to-suit lease arrangements; the calculation of diluted net income (loss) per common share; and income taxes. As of June 30, 2016, there have been no significant or material changes to our critical accounting policies or estimates from that disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our Annual Report.

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Results of Operations

Collaboration Revenue

We have a collaboration agreement with Astellas pursuant to which we are collaborating with Astellas to develop and commercialize XTANDI globally. The terms of the collaboration agreement are described in Note 3, “Collaboration Agreement,” to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report. Collaboration revenue consists of three components: (a) collaboration revenue related to U.S. XTANDI net sales; (b) collaboration revenue related to ex-U.S. XTANDI net sales; and (c) collaboration revenue related to upfront and milestone payments.

Collaboration revenue was as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Collaboration revenue:
Related to U.S. XTANDI net sales	$	165,129	$	149,220	$	318,922	$	261,230
Related to ex-U.S. XTANDI net sales		41,036		25,591		69,740		41,358
Related to upfront and milestone payments		—		846		—		2,257
Total	$	206,165	$	175,657	$	388,662	$	304,845

We are currently involved in litigation with UCLA regarding certain terms of our license agreement and other matters, which are discussed in Part II, Item 1, “Legal Proceedings.”

Collaboration Revenue Related to U.S. XTANDI Net Sales

Collaboration revenue related to U.S. XTANDI net sales was as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
U.S. XTANDI net sales (as reported by Astellas)	$	330,257		$	298,440		$	637,843		$	522,460
Shared U.S. development and commercialization costs		(95,055	)		(84,947	)		(225,639	)		(195,260	)
Pre-tax U.S. profit	$	235,202		$	213,493		$	412,204		$	327,200
Medivation’s share of pre-tax U.S. profit	$	117,601		$	106,747		$	206,102		$	163,600
Reimbursement of Medivation’s share of shared U.S. costs		47,528			42,473			112,820			97,630
Collaboration revenue related to U.S. XTANDI net sales	$	165,129		$	149,220		$	318,922		$	261,230

U.S. net sales of XTANDI (as reported by Astellas) for the three months ended June 30, 2016 were $330.3 million, an increase of $31.8 million, or 11%, compared with net sales for the prior year period. The majority of the increase was due to higher sales volumes, partially offset by a lower net selling price resulting from an increase in the estimated gross-to-net rate. The higher gross-to-net rate in the second quarter of 2016 was primarily due to a slight shift in payor mix towards more discounted segments, as well as an increase in fees to a specialty distributor. The gross-to-net rate in the second quarter of 2015 was also lower than usual due to certain one-time benefits.

U.S. net sales of XTANDI (as reported by Astellas) for the six months ended June 30, 2016 were $637.8 million, an increase of $115.4 million, or 22%, compared with net sales for the prior year period. The majority of the increase was due to higher sales volumes, partially offset by a higher estimated gross-to-net rate as discussed above.

Collaboration revenue related to U.S. XTANDI net sales for the three months ended June 30, 2016 was $165.1 million, an increase of $15.9 million, or 11%, from the prior year. The increase in the second quarter of 2016 was the result of an increase in our share of pre-tax U.S. profit in the collaboration with Astellas as well as an increase in their reimbursement of our shared U.S. costs.

Collaboration revenue related to U.S. XTANDI net sales for the six months ended June 30, 2016 was $318.9 million, an increase of $57.7 million, or 22%, from the prior year. The increase in the first six months of 2016 was the result of an increase in our share of pre-tax U.S. profit in the collaboration with Astellas as well as an increase in their reimbursement of our shared U.S. costs.

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Collaboration Revenue Related to Ex-U.S. XTANDI Net Sales

Net sales of XTANDI outside of the United States (as reported by Astellas) were approximately $265 million and approximately $188 million for the three months ended June 30, 2016 and 2015, respectively, reflecting an increase of approximately 41%. Changes in foreign currency exchange rates increased the U.S. dollar equivalent of such net sales (as reported by Astellas) by approximately 6% compared to the prior year. Collaboration revenue attributable to ex-U.S. XTANDI net sales was $41.0 million and $25.6 million for the three months ended June 30, 2016 and 2015, respectively.

Net sales of XTANDI outside of the United States (as reported by Astellas) were approximately $504 million and approximately $321 million for the six months ended June 30, 2016 and 2015, respectively, reflecting an increase of approximately 57%. Changes in foreign currency exchange rates increased the U.S. dollar equivalent of such net sales (as reported by Astellas) by approximately 3% compared to the prior year. Collaboration revenue attributable to ex-U.S. XTANDI net sales was $69.7 million and $41.4 million for the six months ended June 30, 2016 and 2015, respectively.

Collaboration Revenue Related to Upfront and Milestone Payments

As of the fourth quarter of 2015, we had earned all development and sales milestone payments under the Astellas Collaboration Agreement. Collaboration revenue related to upfront and milestone payments from Astellas for the three and six months ended June 30, 2015 was $0.8 million and $2.3 million, respectively, which comprised amortization of deferred upfront and development milestones.    

Research and Development Expenses

Research and development, or R&D, expenses were as follows (dollars in thousands):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016			2015		2016			2015
Research and development expenses	$	73,375		$	47,294	$	150,962		$	91,970
Percentage change		55	%				64	%

R&D expenses increased by $26.1 million, or 55%, to $73.4 million for the three months ended June 30, 2016, from $47.3 million for the prior year period. The increase was primarily due to a $21.8 million increase in third-party clinical and preclinical development costs, a $3.2 million increase in personnel-related costs and a $1.1 million increase in facilities and information technology costs. The increase in third-party clinical and preclinical development costs included a non-cash fair value adjustment of $9.0 million for contingent consideration related to our BioMarin and CureTech acquisitions, as well as higher MDV3800 expenses due primarily to the ongoing Phase 3 EMBRACA trial and the planned initiation of additional clinical studies in multiple tumor types. These increases were partially offset by an out-of-period correcting adjustment related to an impairment charge from the fourth quarter of 2015 that increased the in-process research and development, or IPR&D, asset related to MDV9300 and decreased R&D expenses by $4.5 million.

R&D expenses increased by $59.0 million, or 64%, to $151.0 million for the six months ended June 30, 2016, from $92.0 million for the prior year period. The increase was primarily due to a $45.3 million increase in third-party clinical and preclinical development costs, a $9.6 million increase in personnel-related costs and a $4.0 million increase in facilities and information technology costs. The increase in third-party clinical and preclinical development costs included a non-cash fair value adjustment of $10.1 million for contingent consideration related to our BioMarin and CureTech acquisitions, as well as higher MDV3800 expenses due primarily to the ongoing Phase 3 EMBRACA trial and the planned initiation of additional clinical studies in multiple tumor types. These increases were partially offset by the out-of-period correcting adjustment discussed above.

Under the Astellas Collaboration Agreement, we and Astellas share certain development costs in the United States. Development cost-sharing payments from Astellas were $15.1 million and $17.6 million for the three months ended June 30, 2016 and 2015, respectively, and $28.4 million and $31.4 million for the six months ended June 30, 2016 and 2015, respectively. Development cost-sharing payments from Astellas are recorded as reductions in R&D expenses.

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We were engaged in four R&D programs during the periods presented: (1) the development of enzalutamide for the treatment of prostate cancer, advanced breast cancer, and hepatocellular carcinoma; (2) the development of MDV3800; (3) the development of MDV9300; and (4) multiple proprietary research and drug discovery projects. R&D costs are identified as either directly allocable to one of our R&D programs or indirect costs, with only direct costs being tracked by specific program. Direct costs consist primarily of clinical, preclinical, and drug discovery costs, cost of supplying drug substance and drug product for use in clinical and preclinical studies, including clinical manufacturing costs, upfront and development milestone payments under license agreements, non-cash fair value adjustments related to contingent consideration, non-cash IPR&D impairment charges, personnel costs, contract research organization fees, and other contracted services pertaining to specific clinical and preclinical studies. Indirect costs consist of corporate overhead costs and other administrative and support costs. The following table summarizes the direct costs attributable to each program and total indirect costs (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Direct costs:
XTANDI (enzalutamide) program	$	18,152	$	17,876	$	42,704	$	37,261
MDV3800 program(1)		35,126		—		50,553		—
MDV9300 program(2)		210		6,909		8,951		12,610
Early-stage programs		10,783		14,494		30,816		28,259
Total direct costs		64,271		39,279		133,024		78,130
Indirect costs		9,104		8,015		17,938		13,840
Total	$	73,375	$	47,294	$	150,962	$	91,970

(1) Direct costs for the MDV3800 program include $8.6 million and $9.1 million for the three and six months ended June 30, 2016, respectively, of non-cash fair value adjustments for contingent consideration related to our BioMarin acquisition.

(2) Direct costs for the MDV9300 program include the out-of-period correcting adjustment discussed above, which reduced direct costs by $4.5 million for the three and six months ended June 30, 2016, and also include $0.4 million and $1.0 million for the three and six months ended June 30, 2016, respectively, of non-cash fair value adjustments for contingent consideration related to our CureTech acquisition.

Our R&D programs may be subject to change from time to time as we evaluate our priorities and available resources.

For a detailed discussion of the risks and uncertainties associated with the timing and cost of completing a product development plan, see Part II, Item 1A, “Risk Factors—Risks Related to Our Future Product Development Candidates” of this Quarterly Report.

Selling, General and Administrative Expenses

Selling, general and administrative, or SG&A, expenses were as follows (dollars in thousands):

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016			2015		2016			2015
Selling, general and administrative expenses	$	758,431		$	74,708	$	855,258		$	158,647
Percentage change		915	%				439	%

SG&A expenses increased by $683.7 million, or 915%, to $758.4 million for the three months ended June 30, 2016, from $74.7 million for the prior year period. The increase was primarily due to a non-cash fair value adjustment of $674.0 million for contingent consideration related to our BioMarin acquisition. During the second quarter of 2016, the fair value of the contingent consideration liability related to BioMarin increased significantly due to changes in the estimated probabilities of success of the development programs and the range and scope of indications currently planned for development. These changes resulted from various market and development-specific events that occurred during the second quarter of 2016, including: the announcement of highly positive data from a Phase 3 competitor trial of a PARP inhibitor, validating the clinical and commercial potential for MDV3800 and the overall PARP class; positive feedback received from regulatory authorities regarding study protocols and approval pathways for MDV3800 in various tumor types, including alignment on two registrational trials for tumor types where MDV3800 has the potential to be the first PARP inhibitor to market; data from three abstracts for MDV3800 presented at recent and upcoming medical conferences in several different tumor types; and promising data from a Phase 1 trial of MDV3800 in several advanced cancers in combination with low-dose chemotherapy. The majority of the second quarter 2016 fair value adjustment is classified as SG&A expense because changes in the key measurement assumptions noted above had the largest impact on the value of the sales-based milestone and royalties on annual net sales of MDV3800 products that BioMarin would be entitled to under the terms of the related purchase agreement.

SG&A expenses increased by $696.6 million, or 439%, to $855.3 million for the six months ended June 30, 2016, from $158.6 million for the prior year period. The increase was primarily due to a non-cash fair value adjustment of $676.5 million for contingent consideration related to our BioMarin acquisition, due to the reasons discussed above.

Under our collaboration with Astellas, we are responsible for fifty percent of the cost of goods sold and the royalty payable to UCLA on U.S. net sales of XTANDI. Our share of these items is included in SG&A expenses in our unaudited condensed consolidated statements of operations. As such, those components of our reported SG&A expenses will fluctuate in correlation with net sales of XTANDI in the United States.

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Under the Astellas Collaboration Agreement, we and Astellas share certain commercialization costs in the United States. Commercialization cost-sharing payments to Astellas were $4.5 million and $2.7 million for the three months ended June 30, 2016 and 2015, respectively, and $23.3 million and $22.8 million for the six months ended June 30, 2016 and 2015, respectively. Commercialization cost-sharing payments to Astellas are recorded as increases in SG&A expenses.

Other Income (Expense), Net

The components of other income (expense), net were as follows (in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Other income (expense), net:
Cash interest expense	$	(390	)	$	(1,392	)	$	(985	)	$	(3,090	)
Non-cash amortization of debt discount and issuance costs		(85	)		(3,917	)		(170	)		(7,827	)
Non-cash loss on extinguishment of Convertible Notes		—			(7,868	)		—			(7,871	)
Other, net		(23	)		(52	)		(232	)		88
Total	$	(498	)	$	(13,229	)	$	(1,387	)	$	(18,700	)

Other income (expense), net consists primarily of cash interest expense and non-cash interest expense, and the impact of changes in foreign exchange rates on our foreign currency-denominated payables, which were not significant. For the three and six months ended June 30, 2015, other income (expense), net also includes non-cash losses on extinguishment of the Convertible Notes.

Income Tax (Benefit) Expense

Income tax (benefit) expense and the effective income tax rate were as follows (dollars in thousands):

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
Income tax (benefit) expense	$	(222,217	)	$	14,600		$	(219,839	)	$	12,820
Effective income tax rate		35.5	%		36.1	%		35.5	%		36.1	%

Income tax benefit for the three and six months ended June 30, 2016 was $222.2 million and $219.8 million, respectively. The benefit for income taxes was higher than the tax computed at the U.S. federal statutory rate for the 2016 periods due primarily to the Federal research and development credit and tax benefit from stock-based compensation, partially offset by state income taxes and non-deductible officers’ compensation. The benefit for income taxes for the three and six months ended June 30, 2016 included discrete tax benefits of $236.4 million and $2.2 million related to non-recurring charges for contingent consideration and advisory mergers and acquisitions fees, respectively. In addition, we recorded a discrete tax expense of $1.6 million related to a non-recurring IPR&D asset impairment adjustment. Income tax expense for the three and six months ended June 30, 2015 was $14.6 million and $12.8 million, respectively. The provision for income taxes was higher than the tax computed at the U.S. federal statutory rate for the 2015 periods due primarily to state income taxes and non-deductible stock-based compensation.

Our effective tax rate for both the three and six months ended June 30, 2016 was 35.5%. Our effective tax rate for both the three and six months ended June 30, 2015 was 36.1%. The decrease in the effective tax rate for the three and six months ended June 30, 2016 as compared to the prior year periods was primarily due to the Federal research and development tax credit that was permanently reinstated in the fourth quarter of 2015 and greater tax benefits from stock-based compensation in the second quarter of 2016.

During the six months ended June 30, 2016, we reduced our current Federal and state taxes payable by $13.4 million related to excess tax benefits from stock-based compensation, offsetting additional paid-in capital.

The future effective tax rate is subject to volatility and may be materially impacted by various internal and external factors. These factors may include, but are not limited to, the amount of income tax benefits and charges from: interpretations of existing tax laws; changes in tax laws and rates; future levels of research and development expenditures; changes in the mix of earnings in countries with differing statutory tax rates in which we may conduct business; changes in the valuation of deferred tax assets and liabilities; state income taxes; the tax impact of stock-based compensation; accounting for uncertain tax positions; closure of statute of

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limitations or settlement of tax audits; changes in estimates of prior years’ items; tax costs for acquisition-related items; changes in accounting standards; non-deductible officers’ compensation; limitations on the utilization of net operating losses and tax credits due to changes in ownership; and overall levels of income before taxes.

Liquidity and Capital Resources

Our principal source of liquidity is cash generated from our collaboration agreement with Astellas, which is described elsewhere in this Quarterly Report.

At June 30, 2016, we had cash, cash equivalents and investments of $348.7 million, compared with $225.9 million at December 31, 2015. At June 30, 2016, our collaboration receivable from Astellas was $227.3 million, compared with $391.6 million at December 31, 2015. Based on our current expectations, we believe our net current assets, amounts that are available under our Revolving Credit Facility, and our projected cash flows will be sufficient to fund our currently planned operations for at least the next twelve months. This estimate is based on a number of assumptions that may prove to be wrong. In addition, we may choose to raise additional funds in the form of equity, debt, or otherwise due to market conditions or strategic considerations even if we believe we have sufficient funds for our current and future operating plans. For example, we may choose to raise additional capital to fund business development activities, and for other general corporate purposes. For a detailed discussion of the risks and uncertainties associated with our sources of liquidity and access to capital, see Part II, Item 1A, “Risk Factors—Risks Related to the Operation of Our Business.”

In October 2015, we entered into an amendment and restatement of our original credit agreement (the “Credit Agreement”) described elsewhere in this Quarterly Report. The Credit Agreement provides for (i) a five-year $300.0 million Revolving Credit Facility; and (ii) an uncommitted accordion facility subject to the satisfaction of certain conditions (collectively, the “Senior Secured Credit Facility”). The Revolving Credit Facility includes a $50.0 million multicurrency sub-facility, a $20.0 million letter of credit sub-facility, and a $10.0 million swing line loan sub-facility. In October 2015, we borrowed $75.0 million under the Revolving Credit Facility, which we repaid in January 2016. There were no balances outstanding under the Revolving Credit Facility at June 30, 2016.

Cash Flow Analysis

The following table summarizes our cash flows (in thousands):

	Six Months Ended June 30,
	2016			2015
Net cash provided by (used in):
Operating activities	$	178,545		$	67,241
Investing activities		(94,899	)		(84,449	)
Financing activities		(41,738	)		(64,319	)
Net change in cash and cash equivalents	$	41,908		$	(81,527	)

Net cash provided by operating activities totaled $178.5 million for the six months ended June 30, 2016, which consisted of our net loss of $399.1 million offset by non-cash items of $477.8 million primarily consisting of a non-cash fair value adjustment of $690.3 million for contingent consideration related to our BioMarin and CureTech acquisitions, and positive changes in our operating assets and liabilities of $99.9 million. The changes in our operating assets and liabilities included the collection of a $175.0 million sales milestone payment from Astellas during the first quarter of 2016, partially offset by cash utilized in operations that arose in the ordinary course of business.

Net cash provided by operating activities totaled $67.2 million for the six months ended June 30, 2015, which consisted of our net income of $22.7 million, positive changes in our operating assets and liabilities of $9.9 million and non-cash items of $34.6 million. Net cash provided by operating activities was primarily driven by collaboration revenue related to U.S. XTANDI net sales and royalties on ex-U.S. XTANDI net sales, partially offset by cash utilized in operations that arose in the ordinary course of business.

Net cash used in investing activities totaled $94.9 million for the six months ended June 30, 2016, and consisted of purchases of available-for-sale securities of $81.0 million and capital expenditures of $13.9 million. Net cash used in investing activities totaled $84.4 million for the six months ended June 30, 2015, and consisted of purchases of available-for-sale securities of $76.4 million, capital expenditures of $6.5 million, and an increase in letters of credit collateralized by restricted cash to secure various leases of $1.6 million.

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Net cash used in financing activities totaled $41.7 million for the six months ended June 30, 2016, and consisted primarily of the repayment of our borrowing under the Revolving Credit Facility of $75.0 million, partially offset by proceeds from the issuance of common stock under equity incentive and stock purchase plans of $19.9 million and excess tax benefits from stock-based compensation of $13.4 million. Net cash used in financing activities totaled $64.3 million for the six months ended June 30, 2015, and consisted primarily of the repayment of Convertible Notes principal and conversion premium of $92.1 million, partially offset by proceeds from the issuance of common stock under equity incentive and stock purchase plans of $14.7 million and excess tax benefits from stock-based compensation of $13.6 million.

Commitments and Contingencies

There have been no significant changes in our contractual cash obligations, commercial commitments and contingencies since December 31, 2015, as disclosed in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” included in our Annual Report.

Off-Balance Sheet Arrangements

We are involved with a variable interest entity, or VIE, that performs contract research for us. We have not consolidated this entity because we do not have the power to direct the activities that most significantly impact the VIE’s economic performance and, thus, we are not considered the primary beneficiary of the VIE.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk is the exposure to loss resulting from changes in interest rates, foreign currency exchange rates, commodity prices and equity prices.

Interest Rate Risk

Our investment policy emphasizes the safety and preservation of principal while maximizing the income we receive from our investments without assuming significant risk of loss. Specifically, our investment objectives in order of priority are (1) the safety and preservation of principal, (2) maintain liquidity sufficient to meet the requirements of our operations and strategic initiatives, and (3) deliver competitive after-tax returns relative to stated objectives and market conditions. The securities permitted under our investment policy may be subject to market risk related to changes in interest rates and other market factors. We manage our sensitivity to these risks by investing in investment grade marketable securities. Currently, we are exposed to minimal market risks associated with interest rate changes because of the relatively short maturities of our investments and we do not expect interest rate fluctuations to materially affect the aggregate value of our financial instruments. Our results of operations would not be significantly impacted by either a 10% increase or a 10% decrease in interest rates.

Our cash equivalents are exposed to the impact of interest rate changes and our interest income fluctuates as interest rates change. Due to the short-term, highly liquid nature of our cash equivalents, we do not believe that we are subject to any material market risk exposure related to interest rates.

Foreign Currency Exchange Risk

Under the Astellas Collaboration Agreement, Astellas records all ex-U.S. XTANDI sales and pays us a tiered royalty ranging from the low teens to the low twenties as a percentage of such sales. The royalties we receive from Astellas on net sales of XTANDI outside of the United States are calculated by converting the respective countries’ XTANDI net sales in local currency to U.S. dollars. The royalties are paid to us in U.S. dollars on a quarterly basis. To date, a significant portion of ex-U.S. sales of XTANDI have been generated in the European Union and in Japan. Therefore, the royalties we receive from Astellas related to ex-U.S. sales of XTANDI are dependent on the value of the U.S. dollar versus the Euro and Japanese Yen. A strengthening of the U.S. dollar compared to current exchange rates would likely result in lower collaboration revenue related to ex-U.S. XTANDI sales. We also conduct certain R&D activities outside of the United States, with expenses incurred in various currencies, including the Euro and Japanese Yen, and these expenses partially offset the currency exposure related to our collaboration revenue from royalties.

In the first quarter of 2016, we began using forward foreign currency exchange contracts to hedge a portion of our gross collaboration revenue exposure from royalties related to the Euro and the Japanese Yen. As of June 30, 2016, we had open foreign currency forward contracts with notional amounts of $76.2 million. A hypothetical 10% adverse movement in foreign currency exchange rates compared with the U.S. dollar relative to exchange rates at June 30, 2016 would have resulted in a reduction in fair value of these contracts of approximately $6.0 million on this date and, if realized, would negatively affect earnings over the remaining life of the contracts. We did not have any forward foreign currency exchange contracts as of December 31, 2015.

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Foreign exchange gains and losses recorded in our unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2016 and 2015 were not significant.

ITEM 4. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that such information is communicated to our management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), as appropriate to allow timely decisions regarding required disclosure. In designing and evaluating our disclosure controls and procedures, management recognizes that disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that the objectives of the disclosure controls and procedures are met. Our disclosure controls and procedures have been designed to meet the reasonable assurance standards. Additionally, in designing disclosure controls and procedures, our management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

As required by Rule 13a-15(b) or Rule 15d-15(b) of the Exchange Act, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2016. Based on the foregoing, our Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer) concluded that our disclosure controls and procedures were effective as of June 30, 2016 at the reasonable assurance level.

Changes in Internal Controls

There were no changes in our internal control over financial reporting during the three months ended June 30, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in legal proceedings, investigations, and claims in the ordinary course of our business, including the matters described below.

In May 2011, we filed a lawsuit in San Francisco Superior Court against the Regents of the University of California, and one of its professors, alleging breach of contract and fraud claims, among others. Our allegations in this lawsuit include that we have exclusive commercial rights to apalutamide, an investigational drug originally known as ARN-509 (previously also referred to as JNJ-56021927, or JNJ-927), which is currently being developed by Aragon Pharmaceuticals, or Aragon. In August 2013, Johnson & Johnson and Aragon completed a transaction in which Johnson & Johnson acquired all apalutamide assets owned by Aragon. We sought remedies including a declaration that we are the proper licensee of apalutamide, contractual remedies conferring to us exclusive patent license rights regarding apalutamide, and other equitable and monetary relief. On August 7, 2012, the Regents filed a cross-complaint against us seeking declaratory relief that the Regents are entitled to ten percent of any sales milestone payments under the Astellas Collaboration Agreement.

On December 20, 2012, and January 25, 2013, the Court granted summary judgment motions filed by defendants Regents and Aragon, resulting in dismissal of all claims against Regents and Aragon, but denied such motions filed by the remaining Regents professor. On April 15, 2013, we filed a Notice of Appeal seeking appeal of the judgment in favor of Aragon, which is now wholly-owned by Johnson & Johnson. The bench trial of the Regent’s cross-complaint against us was conducted in July 2013, and on January 15, 2014, the Court entered a judgment in the cross-complaint in favor of Regents. We appealed this judgment on February 13, 2014 along with the December 2012 summary judgment order in favor of Regents. The jury trial of our breach of contract and fraud claims against the remaining Regents professor was conducted in October and November 2013. On November 15, 2013, the jury rendered a verdict in the case, finding in our favor on one of the breach of contract claims, and in favor of the Regents professor on the fraud claims. We appealed the resulting judgment on the fraud claims. All appeals from this matter were consolidated, oral arguments were heard on February 23, 2016, and the matter was submitted. A decision of the appellate court is required to be rendered within 90 days of when the matter is submitted. On March 8, 2016, the Court’s submission was vacated, on its own order, stating that “further consideration of the merits of the issues raised on appeal is required.” We await further instructions from the Court.

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On April 11, 2014, the Regents filed a complaint against us in which the Regents allege that the “Operating Profits” we have received (and will continue to receive) from Astellas, as a result of the Astellas Collaboration Agreement, constitute Sublicensing Income under the license agreement between us and the Regents and that we and our subsidiary, Medivation Prostate Therapeutics, Inc., have failed to pay the Regents ten percent of such Operating Profits. We deny the Regents’ allegations and are vigorously defending the litigation. The Court has set tentative trial dates for the first half of 2017.

While we believe we have meritorious positions with respect to the claims above and intend to advance our positions in these lawsuits vigorously, including on appeal, the process of resolving matters through litigation or other means is inherently uncertain, and it is not possible to predict the ultimate resolution of any such proceeding. The actual costs of defending our position may be significant, and we may not prevail.

ITEM 1A. RISK FACTORS

Risks facing our business have not changed substantively from those discussed in our Annual Report on Form 10-K for the year ended December 31, 2015, except for those risk factors below designated by an asterisk (*). Our business faces significant risks, some of which are set forth below to enable readers to assess, and be appropriately apprised of, many of the risks and uncertainties applicable to the forward-looking statements made in this Quarterly Report. You should carefully consider these risk factors as each of these risks could adversely affect our business, operating results, cash flows and financial condition. If any of the events or circumstances described in the following risk factors actually occurs, our business may suffer and the trading price of our common stock could decline and our financial condition or results of operations could be harmed. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. These risks should be read in conjunction with the other information set forth in this Quarterly Report. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not currently known to us, or that we currently believe to be immaterial, may also adversely affect our business.

Risks Related to XTANDI® (enzalutamide) capsules

*We and Astellas may not be able to further commercialize XTANDI in the United States, and may fail to continue to generate significant revenue from the sale of XTANDI in the United States. XTANDI may fail to obtain regulatory approval and reimbursement, to be successfully commercialized and to generate significant revenue outside the United States.

We only have one commercial product, XTANDI® (enzalutamide) capsules, or XTANDI, which is approved in the United States to treat men with metastatic castration-resistant prostate cancer, or mCRPC. However, the further commercialization of XTANDI in the United States for the treatment of mCRPC and any other patient populations for which XTANDI is being developed and may subsequently be approved, may not be successful for a number of reasons, including:

• we and our collaboration partner, Astellas Pharma, Inc., or Astellas, may not be able to establish or demonstrate in the medical community the safety and efficacy of XTANDI and its potential advantages over, and side effects compared to, competing therapeutics and products currently in clinical development for each applicable patient population;

• our limited experience in marketing XTANDI to urologists;

• reimbursement and coverage policies of government and private payors such as Medicare, Medicaid, insurance companies, health maintenance organizations and other plan administrators;

• the price of XTANDI as compared to alternative treatment options, including its overall affordability for patients after taking into consideration any insurance coverage and their co-payment responsibilities;

• changes or increases in regulatory restrictions;

• changes to the label for XTANDI that further restrict how we and Astellas market XTANDI, including as a result of routine pharmacovigilance activities and/or data collected from the safety study in patients with known risk factor(s) for seizure that the FDA required us to undertake as a post-marketing requirement or from any other ongoing or future studies;

• we and Astellas may not have adequate financial or other resources to successfully commercialize XTANDI; and

• we and Astellas may not be able to obtain adequate commercial supplies of XTANDI to meet demand or at an acceptable cost.

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If the further commercialization of XTANDI in the United States is unsuccessful, our ability to generate revenue from product sales and maintain profitability would be adversely affected and our business could be severely negatively impacted.

XTANDI has received marketing approval in the European Union (or Europe, or EU) for the treatment of patients with mCRPC and in Japan for the treatment of patients with castration-resistant prostate cancer, and numerous other countries worldwide for the treatment of patients with mCRPC. Additional marketing applications for the mCRPC indication are under review in numerous other countries. Unless we and Astellas can obtain additional regulatory approval and reimbursement of XTANDI outside the United States, Japan and the EU, Astellas’ ability to successfully commercialize XTANDI further and our ability to generate additional revenue from XTANDI worldwide, could be significantly limited.

XTANDI may fail to effectively compete commercially with other approved products and other products in development.

There are a number of currently marketed therapies for advanced prostate cancer that compete directly with XTANDI. In addition, several companies are currently developing products or are expected to be marketing products in the near future that compete or may compete directly with XTANDI in its currently approved indication for mCRPC and any other indication for which enzalutamide may be subsequently approved. Our current and future competitors are generally large pharmaceutical companies with considerably greater financial, human, and development and commercialization resources and experiences than ours, including Johnson & Johnson, Sanofi, and Bayer Pharma AG. Some competitive drugs already have acquired substantial shares in these markets or are generic which may make it more difficult for us to compete successfully in these markets notwithstanding any positive results that we may generate from our current or potential future clinical trials for enzalutamide. Also, intense competition from products and compounds in development could impact our ability to successfully conduct upstream clinical trials, as trials may become more difficult to enroll, or complete successfully, as patients may have more treatment options with demonstrated efficacy and safety. Factors upon which XTANDI would have to compete successfully include efficacy, safety, price and cost effectiveness. We cannot guarantee that we and Astellas will be able to compete successfully in the context of any of these factors.

*Pricing pressure from third parties and price competition could substantially impact Astellas’ or our ability to generate revenue from XTANDI and, therefore, negatively impact our business.

The realized price of XTANDI could be subject to pricing pressure from aggressive competitive pricing activity and managed care organizations and institutional purchasers, who use cost considerations to restrict the sale of preferred drugs that their physicians may prescribe. To the extent that payors believe similar lower-priced, branded or generic competitor products may be suitable alternatives for patients, we and our partner Astellas may be unable to increase the price of XTANDI in response to increases in our costs of manufacturing and commercialization of XTANDI or for other reasons, which will reduce our ability to profitably sell XTANDI. We may also consider reducing the price of XTANDI or be subject to formulary restrictions, which could result in a loss of sales revenue and/or market share. Additionally, XTANDI currently competes against products and could compete in the future with products marketed by some of the world’s largest and most experienced pharmaceutical companies, such as Johnson & Johnson, who have more resources and greater flexibility to engage in aggressive price competition in order to gain revenues and market share. It is uncertain whether we and Astellas could successfully compete with such competition and our failure to compete or a decision not to increase the price or to reduce the price of XTANDI in order to compete could severely impact our business and our financial condition.

Moreover, in January 2016, non-profit groups petitioned the U.S. federal government to exercise their “march-in” rights under the Bayh-Dole Act due to the difference in price of XTANDI in the U.S. versus abroad since certain patents which cover XTANDI were allegedly developed with federal funding. In June 2016, the Director of the Department of Health and Human Services, or HHS, declined to initiate a march-in investigation or utilize the government’s license, noting that XTANDI is broadly available as a prescription drug and no information was identified by the petitioners to suggest that XTANDI is or will be in short supply. One of the non-profit consumer advocacy groups has stated its intent to appeal the decision to the Secretary of HHS and, if such appeal is declined, to refile its request after a new president takes office.

Competition from other approved products, including those that mechanistically operate similarly to XTANDI, could negatively impact the expected use or duration of therapy of XTANDI, and impact our ability to generate revenue.

We are competing and will continue to compete against drugs that operate similarly to XTANDI. If XTANDI is unable to successfully compete for a position in the prostate cancer treatment paradigm ahead of drugs like Zytiga and/or potentially apalutamide (formerly JNJ-56021927, or JNJ-927, and ARN-509), which are now being investigated in Phase 3 clinical studies in earlier stage prostate cancer, sales of XTANDI may be negatively impacted. In addition, the availability of multiple other approved agents to treat the same patients being treated with XTANDI could cause treating physicians to switch patients off of XTANDI and onto competing therapies more quickly than would otherwise be the case, which could also negatively impact XTANDI net sales.

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Competition from generic products could potentially harm our business and result in a decrease in our revenue.

Like other branded pharmaceutical companies, we face competition from generic products that could potentially harm our business and result in a decrease in our revenue. Such competition may arise from the loss or expiration of intellectual property rights on enzalutamide or a competitor product, or the approval by the FDA of a generic of our product or a competitor product, such as Zytiga, any of which could adversely affect our business by putting downward pressure on the price and market share of XTANDI. Generic products for the treatment of prostate cancer that have already been approved by the FDA, e.g., Casodex, are generally sold at a lower price than branded drugs. Furthermore, Abbreviated New Drug Applications (ANDAs) requesting approval for generic versions of Zytiga were submitted to the FDA on April 28, 2015. See the risk factor below entitled, “Risks Related to the Pharmaceutical Industry, Including the Activities of Medivation, Inc.— If the FDA or other applicable regulatory authorities approve generic products that compete with any of our products or product candidates, the sales of our products or product candidates may be adversely affected,” for additional information regarding general risks related to generic and biosimilar competition in our industry.

*We have recently increased our promotional efforts and focus in the United States to include urologists as well as oncologists. If we are not successful in marketing XTANDI to these physician audiences, the commercial potential of XTANDI may not be realized.

We have recently increased promotional efforts in the United States to include urologists as well as oncologists as a result of the expanded label of XTANDI in the United States to treat mCRPC patients who have not yet received chemotherapy (September 2014). Our efforts included the expansion and bifurcation of our sales force into urology- and oncology-focused teams. If we fail to successfully market XTANDI to urologists, who typically treat patients earlier in their disease than oncologists, we may be unable to gain increases in the duration of use of XTANDI, which is an important driver of the growth of XTANDI revenues. Oncologists still account for a majority of our business, so failure to successfully commercialize XTANDI to urologists and oncologists would have a negative impact on our business and future prospects.

We are dependent upon our collaborative relationship with Astellas to further develop, fund, manufacture and commercialize XTANDI, and if such relationship is unsuccessful, or if Astellas terminates our collaboration agreement with them, it could negatively impact our ability to conduct our business and generate revenue from XTANDI.

Under our collaboration agreement with Astellas, Astellas is responsible for developing, seeking regulatory approval for, and commercializing XTANDI outside the United States and is responsible globally for all manufacture of product for both clinical and commercial purposes. We and Astellas are jointly responsible for commercializing XTANDI in the United States. We and Astellas share equally the costs (subject to certain exceptions), profits and losses arising from development and commercialization of XTANDI in the United States. For clinical trials useful both in the United States and in Europe or Japan, we are responsible for one-third of the total costs and Astellas is responsible for the remaining two-thirds. We are subject to a number of risks associated with our dependence on our collaborative relationship with Astellas, including:

• Astellas’ right to terminate the collaboration agreement with us on limited notice for convenience (subject to certain limitations), or for other reasons specified in the collaboration agreement;

• the need for us to identify and secure on commercially reasonable terms the services of third parties to perform key activities currently performed by Astellas in the event that Astellas were to terminate its collaboration with us, including development and commercialization activities outside of the United States and manufacturing activities globally;

• adverse decisions by Astellas regarding the amount and timing of resource expenditures for the commercialization of XTANDI;

• adverse decisions by Astellas regarding whether or not to initiate claims or litigation against third parties for infringement of proprietary rights protecting XTANDI or to determine the scope and validity of proprietary rights covering XTANDI or proprietary rights held by competitors;

• failure by Astellas to negotiate favorable coverage determinations and adequate reimbursement rates with third-party payors;

• decisions by Astellas to prioritize other of its present or future products more highly than XTANDI for either development and/or commercial purposes;

• possible disagreements with Astellas as to the timing, nature and extent of our development plans, including clinical trials or regulatory approval strategy, which if we disagree could significantly delay or halt development of XTANDI; and

• the financial returns to us, if any, under our collaboration agreement with Astellas, depend in large part on the generation of product sales, and if Astellas fails to perform or satisfy its obligations to us, the development or commercialization of XTANDI would be delayed or may not occur and our business and prospects could be materially and adversely affected.

Due to these factors and other possible disagreements with Astellas, we may be delayed or prevented from further developing, manufacturing or commercializing XTANDI or we may become involved in litigation or arbitration, which would be time consuming and expensive.

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If Astellas were to terminate our collaborative relationship unilaterally, we would need to undertake development and commercialization activities for XTANDI solely at our own expense and/or seek one or more other partners for some or all of these activities, worldwide. If we pursued these activities on our own, it would significantly increase our capital and infrastructure requirements, might limit the indications we are able to pursue for XTANDI, and could prevent us from effectively commercializing XTANDI. If we sought to find one or more other pharmaceutical company partners for some or all of these activities, we may not be successful in such efforts, or they may result in collaborations that have us expending greater funds and efforts than our current relationship with Astellas.

*We are dependent on third-party manufacturers for commercial supply of XTANDI and for clinical trial materials and if we fail to receive such adequate supplies, global sales of XTANDI could be limited and clinical trials could be delayed.

We require adequate supplies of enzalutamide for commercial supply of XTANDI, and for use in clinical trials. Under our collaboration agreement, Astellas has the responsibility to manufacture commercial supplies of XTANDI for all markets and provide material for clinical studies. Astellas fulfills its manufacturing and supply obligations largely through third-party contract manufacturers. Consequently, we are, and expect to remain, dependent on Astellas and its contract manufacturers for commercial and clinical trial materials. If Astellas cannot provide the materials on a timely basis due to, for example, raw materials availability, quality issues or failure of the contracting facilities to perform or comply with current good manufacturing practices, or cGMP, it could result in decreased sales or put at risk ongoing clinical studies, such as the phase 3 ARCHES clinical trial which was temporarily suspended by Astellas after an inspection at one of the contract manufacturers for the tablet formulation of enzalutamide led to the loss of the contract manufacturer’s GMP certificate in the EU, even though the inspection was not for enzalutamide. If Astellas or its contract manufacturers do not perform, we may be forced to incur additional expenses, delays, or both, to arrange or take responsibility for contract manufacturers to manufacture or package XTANDI or enzalutamide on our behalf, as we do not have any internal manufacturing or packaging capabilities. While we and Astellas have taken steps to mitigate the risk of non-performance by our existing contract manufacturers and other suppliers, there can be no assurance that we will be able to prevent shortages or delays.

We also rely on our own third-party vendors for clinical supplies. If clinical supplies cannot be provided on a timely basis it could put at risk our sponsored clinical studies with XTANDI or enzalutamide.

In some instances, we and Astellas are dependent on third-party suppliers of raw materials, intermediates or finished goods of commercial supplies of XTANDI and clinical trial materials. If any of these suppliers or subcontractors fails to meet our or Astellas’ needs, we may not have readily available alternatives. If we or Astellas experience a material supplier or subcontractor inability to supply, and we are unable to mitigate such supply failure through a second source or backup supplier, our ability to satisfactorily and timely complete our clinical trial or delivery obligations could be negatively impacted which could result in reduced sales, termination of contracts and damages to our relationships with clinical trial sites and the medical community. We could also incur additional costs to address and resolve such an issue. Any of these events could have a negative impact on our results of operations and financial condition.

We are dependent on Astellas to distribute and sell XTANDI, and if Astellas fails to adequately perform these activities, our business would be negatively impacted.

Under our collaboration agreement with Astellas, we and Astellas have the right to jointly promote XTANDI to customers in the United States. However, Astellas has the sole right to distribute and sell XTANDI to customers in the United States and the sole right to promote, distribute and sell XTANDI to customers outside the United States. We are thus partially dependent on Astellas to successfully promote XTANDI in the United States, and solely dependent on Astellas to successfully distribute and sell XTANDI in the United States and to promote, distribute and sell XTANDI outside of the United States. In the United States, we depend on customer support from specialty pharmaceutical distributors and wholesalers in Astellas’ network. Astellas has contracted with a limited number of specialty pharmaceutical distributors and wholesalers to deliver XTANDI to end users. The use of specialty pharmacies and wholesalers requires significant coordination with Astellas’ sales and marketing, medical affairs, regulatory affairs, legal and finance organizations and involves risks, including but not limited to risks that these specialty pharmacies and wholesalers will:

• not provide Astellas accurate or timely information regarding their inventories, patient- or account-level data or safety complaints regarding XTANDI;

• not effectively sell or support XTANDI;

• not devote the resources necessary to sell XTANDI in the volumes and within the timeframes that we expect; or

• cease operations.

We generally do not have control over the resource or degree of effort that any of the specialty pharmacies and distributors may devote to XTANDI, and if their performance is substandard, this will adversely affect sales of XTANDI. If Astellas’ network of specialty pharmacies and distributors fails to adequately perform, it could negatively impact sales of XTANDI, which would negatively impact our business, results of our operations, cash flows and liquidity.

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XTANDI may not be commercially successful if not widely covered and appropriately reimbursed by third-party payors, and we are dependent upon Astellas for the execution of third-party payor access and reimbursement strategies for XTANDI.

Our ability to successfully commercialize XTANDI for its approved indications depends, in part, on the extent to which coverage and adequate reimbursement for XTANDI is available from government and health administration authorities, private health insurers, managed care programs and other third-party payors, both in the United States and globally.

In addition, even if third-party payors ultimately elect to cover and reimburse XTANDI, most payors will not reimburse 100% of the cost, but rather require patients to pay a portion of the cost through a co-payment. Thus, even if reimbursement is available, the percentage of drug cost required to be borne by patients may make use of XTANDI financially difficult or impossible for certain patients, which would have a negative impact on sales of XTANDI. For example, in the United States there exists a coverage gap, or “donut hole”, in the Medicare Part D coverage for prescription medications for participants, which renews annually each January 1st. While in the donut hole, Medicare Part D participants, including many patients in XTANDI’s approved indication, may have to pay out-of-pocket a substantial portion of their prescription drug costs, which may discourage physicians from prescribing or patients from accessing XTANDI. It is increasingly difficult to obtain coverage and adequate reimbursement levels from third-party payors, and we may be unable to achieve these objectives. Moreover, our commercial prospects would be further weakened if payors approve coverage for XTANDI only as second- or later-line treatments, or if they place XTANDI in tiers requiring unacceptably high patient co-payments. Since launch, several third-party payors have included in their coverage criteria use of XTANDI after patient treatment on Zytiga plus prednisone or if there is a contra-indication to prednisone or Zytiga. These coverage situations may persist even with expanded indications for XTANDI. Because XTANDI works via a similar molecular signaling pathway as Zytiga does, patients who have already failed treatment with Zytiga may not have as strong a response on XTANDI as would patients who are Zytiga-naïve. Failure to overturn coverage decisions or stop additional coverage decisions could materially harm our (or our partner’s) ability to successfully market XTANDI in the United States. Achieving coverage and acceptable reimbursement levels typically involves negotiating with individual payors and is a time-consuming and costly process. Therefore, obtaining acceptable coverage and reimbursement from one payor does not guarantee similar acceptable coverage or reimbursement from another payor. Additionally, even if favorable coverage and adequate reimbursement levels are achieved, the payor may change its decision in the future. We are dependent upon Astellas globally for the achievement of such coverage and acceptable reimbursement, and for negotiation with individual payors.

*We and Astellas are required to undertake certain studies to comply with post-marketing requirements or commitments in the EU and the United States, which could result in adverse modifications to XTANDI’s existing labeling, and risk XTANDI’s ability to obtain additional regulatory approvals for additional patient populations.

In the EU, we and Astellas are required to collect efficacy data on mCRPC patients previously treated with Zytiga to determine XTANDI’s efficacy response in such patients, which we do not expect to be as good as in patients naïve to Zytiga, and anticipate that these results may be available as early as 2016. In the United States, we and Astellas are required to conduct an open-label safety study of XTANDI in patients with known risk factor(s) for seizure and to report the results of that study to the FDA in 2019, although we now anticipate that we may be able to submit these results in 2017. If the results of this study reveal or are perceived to reveal unacceptable safety risks, this could result in decreased commercial utilization of XTANDI for mCRPC patients in the United States and in the EU, failure to obtain approval in other indications, and modifications to the existing label for XTANDI, including potentially a boxed warning, or additional clinical testing. Any one or more of these outcomes would seriously harm our business. Additionally, we could receive additional post-marketing requirements as we seek approval of XTANDI in additional patient populations. Failure to conduct the post-marketing requirements or commitments in a timely manner may result in withdrawal of approval for XTANDI and substantial civil and/or criminal penalties.

*If significant patient safety issues were to arise for XTANDI or our other product candidates, our future sales may be reduced, adversely affecting our results of operations.

The data supporting the marketing approvals for our products and forming the basis for the safety warnings in our product labels were obtained in controlled clinical trials of limited duration and, in some cases, from post-approval use. As our products are used over longer periods of time by many patients with underlying health problems, taking numerous other medicines, we expect to continue to find new issues such as safety, resistance or drug interactions of XTANDI or in other products, which may require us to provide additional warnings or contraindications on our labels or narrow our approved indications, each of which could reduce the market acceptance of these products. For example, in 2015, based upon routine pharmacovigilance review and signal detection, we and Astellas submitted a label change to the FDA after identifying two post-marketing reports of posterior reversible encephalopathy syndrome, or PRES, in patients receiving XTANDI. PRES is a neurological disorder which can present with rapidly evolving symptoms including seizure, headache, lethargy, confusion, blindness, and other visual and neurological disturbances, with or without

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associated hypertension. A diagnosis of PRES requires confirmation by brain imaging, preferably magnetic resonance imaging, or MRI. Because PRES was reported voluntarily from a post-marketing population of uncertain size, it is not possible to reliably estimate the frequency or establish a causal relationship to XTANDI. Discontinue XTANDI in patients who develop PRES.

Regulatory authorities have been moving towards heightened pharmacovigilance, including requests for additional post-approval analyses to detect possible safety signals, and more transparent pharmacovigilance, such as making additional stand-alone safety information directly available to the public through websites and other means, e.g., periodic safety update report summaries, risk management plan summaries and various adverse event data. Safety information, without the appropriate context and expertise, may be misinterpreted and lead to misperception or legal action which may potentially cause our product sales or stock price to decline.

Further, if serious safety, resistance or drug interaction issues arise with XTANDI, product sales could be limited or halted by us or by regulatory authorities and our results of operations would be adversely affected.

XTANDI and any other product candidates that may receive regulatory approval in the future will be subject to ongoing regulatory obligations and continued regulatory review, which may result in significant additional expense as well as significant penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our products and product candidates.

We are required to monitor the safety and efficacy of XTANDI and any other products candidates that are approved by the FDA. In addition, the manufacturing processes, labeling, packaging, distribution, adverse event reporting, storage, advertising, promotion, import, export and recordkeeping for any approved products, such as XTANDI, will be subject to extensive and ongoing regulatory requirements. These requirements include submissions of safety and other post-marketing information and reports, registration and listing, as well as continued compliance with current good clinical practices, or cGCP, for any clinical trials that we conduct post-approval. We and our contract manufacturers will be subject to periodic unannounced inspections by the FDA to monitor and ensure compliance with cGMP. We must also comply with requirements concerning advertising and promotion for XTANDI and any other product candidates for which we obtain marketing approval in the future. Promotional communications with respect to prescription drugs, including biologics, are subject to a variety of legal and regulatory restrictions and must be consistent with the information in the product’s approved labeling. Thus, we will not be able to promote XTANDI or any other products candidates for which we might obtain approval in the future for indications or uses for which they are not approved. Later discovery of previously unknown problems with XTANDI or any other product candidate for which we might obtain approval in the future, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers or manufacturing processes, or failure to comply with regulatory requirements, may result in, among other things:

• restrictions on our ability to conduct clinical trials, including full or partial clinical holds on ongoing or planned trials;

• restrictions on such products’ manufacturing processes;

• restrictions on the marketing of a product;

• restrictions on product distribution;

• requirements to conduct post-marketing clinical trials;

• untitled or warning letters;

• withdrawal of the products from the market;

• refusal to approve pending applications or supplements to approved applications that we submit;

• recall of products;

• fines, restitution or disgorgement of profits or revenue;

• suspension or withdrawal of regulatory approvals;

• refusal to permit the import or export of our products;

• product seizure;

• injunctions;

• imposition of civil penalties; or

• criminal prosecution.

The FDA’s and other regulatory authorities’ policies may change and additional government regulations may be enacted that could affect the marketing of XTANDI or prevent, limit or delay regulatory approval of our other product candidates. We cannot

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predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative action, either in the United States or abroad. If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained and we may not sustain profitability.

*If we are unable to successfully develop enzalutamide for breast cancer with a suitable diagnostic, we may not be able to obtain regulatory approval for enzalutamide for breast cancer or realize the full potential for enzalutamide.

We are commencing a Phase 3 clinical trial evaluating enzalutamide in triple negative breast cancer, or TNBC. A key element of our strategy to develop enzalutamide in TNBC is the use of a companion diagnostic to identify patients with TNBC appropriate for treatment with enzalutamide. Patients whose tumors test positive for a gene expression profile may be more likely to respond to treatment with enzalutamide; patients whose tumors test negative may not be responsive to treatment with enzalutamide. Both regulatory approval and, if approval is obtained, successful commercialization of enzalutamide in TNBC will, therefore, likely depend on our successful development of such a companion diagnostic.

We and Astellas have entered into a collaboration with NanoString Technologies, Inc. to translate our gene expression signature algorithm into a companion diagnostic assay using NanoString’s nCounter Dx Analysis System. However, we may encounter difficulties in developing enzalutamide for TNBC and/or developing the companion diagnostic for clinical, regulatory and/or commercial reasons including issues related to analytical validation, reproducibility or clinical validation.

Companion diagnostics are subject to regulation by the FDA as a medical device and require separate regulatory clearance prior to commercialization. Companion diagnostics are also subject to regulation by foreign regulatory authorities and such regulations may change or new regulations may be enacted during our development of the companion diagnostic. We may be unable to alter our development program in time to comply with the revised or new regulations, or we may only be able to do so by expending greater funds and efforts, and any delay or failure to obtain regulatory approval could delay or prevent the approval of enzalutamide for TNBC.

Risks Related to our License and Manufacturing and Supply Agreement with CureTech, Ltd.

The clinical molecule MDV9300 we licensed from CureTech is a biologic molecule, and we do not have long-standing experience or expertise in the development, manufacture, or commercialization of biologic molecules.

Under the license agreement, we are responsible for all development, manufacturing, and commercialization activities for MDV9300 for all indications, including in oncology. We have limited history, experience, or expertise in the development, manufacturing and commercialization, including regulatory interactions, commercial manufacturing, and distribution of biologic molecules, like MDV9300.

The successful development, testing, manufacturing and commercialization of biologics involves a long, expensive, and uncertain process. There are unique risks and uncertainties with biologics, including:

• The development, manufacturing and marketing of biologics are subject to regulation by the FDA, the European Medicines Agency or EMA, and other regulatory bodies. These regulations are often more complex and extensive than the regulations applicable to other pharmaceutical products;

• Manufacturing biologics, especially in large quantities, is often complex and may require the use of innovative technologies to handle living cells. Each lot of an approved biologic must undergo thorough testing for identity, strength, quality, purity and potency. Manufacturing biologics requires facilities specifically designed for and validated for this purpose, and sophisticated quality assurance and quality control procedures are necessary. Slight deviations anywhere in the manufacturing process, including filling, labeling, packaging, storage and shipping and quality control and testing, may result in lot failures, product recalls or spoilage. When changes are made to the manufacturing process, we may be required to provide preclinical and clinical data showing the comparable identity, strength, quality, purity or potency of the products before and after such changes. For MDV9300, we plan to implement changes in manufacturing site and to improve the manufacturing process to provide for larger manufacturing lot sizes, as well as the critical analytical assays. Comparability data will be required to support these changes; and

• The use of biologically derived ingredients can lead to allegations of harm, including infections or allergic reactions, or closure of product facilities due to possible contamination. Any of these events could result in substantial costs.

We are currently dependent on CureTech to produce clinical supply of MDV9300 that meets global regulatory standards and CureTech is dependent on its suppliers for sufficient quantities of raw materials, starting materials, and supplies. If CureTech fails to manufacture clinical supply of MDV9300 in sufficient quantities or fails to source raw or starting materials or supplies in sufficient quantities, our ability to conduct clinical trials could be further delayed or otherwise negatively impacted.

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Our failure to successfully develop, manufacture, or commercialize MDV9300 could significantly impact our ability to generate value from the License Agreement with CureTech.

*Our Phase 2 clinical trial of MDV9300 in DLBCL has been delayed, which could result in increased cost and could delay, prevent or limit our ability to generate value from and realize the commercial potential of MDV9300.

In early January 2016, we advised the FDA of our conclusion that MDV9300 does not bind PD-1 (Programmed Death-1), and the agency placed the investigational new drug applications, or INDs, on clinical hold and requested that we revise our characterization of MDV9300 in the related investigator brochure, protocols and informed consent documents. We submitted the revised documents in early February 2016, and the FDA lifted the clinical hold in March 2016. In May 2016, we submitted an amendment to our INDs for MDV9300 to modify the production process to better support our planned clinical activities, including our Phase 2 DLBCL trial which we intend to resume in the second half of 2016. These circumstances contributed to a delay in the DLBCL trial and to a partial impairment charge recorded in the fourth quarter of 2015, and any further delays or increased costs could prevent or limit our ability to generate value from and realize the commercial potential of MDV9300.

*If we are unable to determine the binding target for MDV9300, we may fail to successfully develop MDV9300 for DLBCL, multiple myeloma or any other indication, and we may not be able to obtain regulatory approval or realize the full potential for MDV9300.

Although the molecule was originally understood to work primarily via PD-1 binding, our work as well as that of others has also suggested other potential binding activity. During 2015, we conducted testing and characterization work to better identify the binding target and, in late December 2015, we concluded that MDV9300 does not bind PD-1. While we intend to continue work to identify the binding target and thereafter develop a target-specific release assay, these activities are time consuming, expensive and there is no assurance that we will be successful since the binding mechanism is currently unknown. Furthermore, there can be no assurance that we will not experience additional development issues in the future which may cause further delays or unanticipated costs, or that we will be able to solve such development issues. Our failure to identify the binding target for MDV9300 or to develop a target-specific release assay would significantly impact our ability to obtain regulatory approval and could materially harm our business.

The development and commercialization of MDV9300 may face strong competition from other immuno-oncology agents that have already received marketing approval and are being developed for additional indications by larger companies with substantial resources and relatively more experience developing, manufacturing, and commercializing biologic molecules.

The immuno-oncology field is competitively crowded with more than 100 immuno-oncology agents, including biologic molecules, vaccines, modified T-cells, and adjuvants, currently approved and on the market or in development for various tumor types and patient populations by larger more experienced companies than ours, such as Bristol Myers Squibb, Roche, AstraZeneca, Pfizer and Merck. This competitive environment could compromise our ability to develop MDV9300 by limiting the availability of clinical trial investigators, sites, and/or appropriate clinical patients, which could slow, delay or limit the progress of MDV9300’s development. Even if we are able to successfully develop MDV9300 and obtain regulatory approval for it in an oncology indication, the competition from already approved immuno-oncology molecules and other agents in the same or similar oncology indications could significantly limit our ability to generate revenue from MDV9300. While we have some experience developing and in certain aspects of the commercialization of small molecule products, we may be required to hire additional qualified employees with experience developing, manufacturing, and commercializing, including regulatory interactions, commercial manufacturing, and distributing biological molecules, like MDV9300. Many of our competitors are large, multinational pharmaceutical and biotechnology companies with considerably more resources and experience with biological molecules than us.

Risks Related to Our Future Product Development Candidates

Our business strategy depends on our ability to identify and acquire additional product candidates. We may never acquire or identify such product candidates for reasons that may not be in our control, or are otherwise unforeseen or unforeseeable to us.

A key component of our business strategy is to diversify our product development risk by identifying and acquiring new product opportunities for development. However, we may not be able to identify promising new technologies. In addition, the competition to acquire promising biomedical technologies is fierce, and many of our competitors are large, multinational pharmaceutical, biotechnology and medical device companies with considerably more financial, development and commercialization resources and experience than we have. Thus, even if we succeed in identifying promising technologies, we may not be able to compete against our larger competitors with considerably more financial resources or we may not be able to acquire rights to them on acceptable terms or at all. If we are unable to identify and acquire new technologies, we will be unable to diversify our product risk. We believe that any such failure would have a significant negative impact on our prospects.

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*Pharmaceutical and biological product candidates require extensive, time-consuming and expensive preclinical and clinical testing to establish safety and efficacy, and to obtain regulatory approval. If we are unable to successfully develop and test our product candidates, we will not be successful.

The research and development of pharmaceuticals and biological products is an extremely risky industry. Only a small percentage of product candidates that enter the development process ever receive regulatory approval. The process of conducting the preclinical and clinical testing required to establish safety and efficacy and obtain regulatory approval is expensive and uncertain and takes many years. If we are unable to complete preclinical or clinical trials of current or future product candidates, due to safety concerns with a product candidate, or if the results of these trials are not satisfactory to convince regulatory authorities of their safety or efficacy, we will not be able to obtain regulatory approval for commercialization. As more product candidates within a particular class of drugs proceed through clinical development to regulatory review and approval, the amount and type of clinical data that may be required by regulatory authorities may increase or change.

We cannot be certain if any of our product candidates will be approved by regulatory authorities. Furthermore, even if we are able to obtain regulatory approvals for any of our product candidates, those approvals may be for indications that are not as broad as desired or may contain other limitations that would adversely affect our ability to generate revenue from sales of those products. Moreover, if we are not able to differentiate our product against other approved products within the same class of drugs, or if any of the other circumstances described above occur, our business would be materially harmed and our ability to generate revenue from that class of drugs would be severely impaired.

Enrollment and retention of patients in clinical trials of enzalutamide and other product candidates are expensive and time-consuming processes, could be made more difficult or rendered impossible by competing treatments or clinical trials of competing drugs in the same or other indications, and could result in significant delays, cost overruns, or both, in our product development activities, or in the failure of such activities.

We may encounter delays in enrolling, or be unable to enroll, a sufficient number of patients to complete any of our clinical trials, and even once enrolled we may be unable to retain a sufficient number of patients to complete any of our trials. Patient enrollment and retention in clinical trials depends on many factors, including the size of the patient population, the nature of the trial protocol, the existing body of safety and efficacy data with respect to the study drug, the number and nature of competing treatments and ongoing clinical trials of competing drugs for the same indication, the proximity of patients to clinical sites and the eligibility criteria for the study. Furthermore, any negative results we may report in clinical trials of enzalutamide or any potential future product candidates may make it difficult or impossible to recruit and retain patients in other clinical studies of that same product candidate. Delays or failures in planned patient enrollment and/or retention may result in increased costs, program delays or both, which could have a harmful effect on our ability to develop enzalutamide or any product candidates, or could render further development impossible.

Our reliance on third parties for the operation of our business may result in material delays, cost overruns and/or quality deficiencies in our development programs.

We currently rely on third parties to perform key product development tasks, such as laboratories to conduct preclinical testing, clinical research organizations to help us manage our clinical studies, investigators and investigative sites who conduct the clinical trials, and contract manufacturing organizations to manufacture our product candidates at appropriate scale for preclinical and clinical trials. In addition, we currently rely on Astellas and its third party vendors to supply commercial quantities of XTANDI. To manage our business successfully, we will need to identify, engage and properly manage qualified third parties that will perform these development and manufacturing activities. For example, we need to monitor the activities of our vendors closely to ensure that they are performing their tasks correctly, on time, on budget and in compliance with strictly enforced regulatory standards. We need to monitor investigators who participate in our clinical trials to ensure that they are conducting the trial in compliance with the protocol, cGCP and all applicable laws. Our ability to identify and retain key vendors, investigators and investigative sites with the requisite knowledge is critical to our business and the failure to do so could negatively impact our business. Because all of our key vendors perform services for other clients in addition to us, we also need to ensure that they are appropriately prioritizing our projects. If we fail to manage our key vendors well, we could incur material delays, cost overruns or quality deficiencies in our development and commercialization programs, as well as other material disruptions to our business.

Patient safety issues may arise from investigator-sponsored research with our product candidates, which may adversely affect our development program for such product candidates.

We are committed to improving patient care through research that advances the medical and scientific knowledge of XTANDI and our product candidates. In support of this commitment, we, in collaboration with our partner Astellas, have established an investigator-sponsored research program as a mechanism for independent researchers to seek support for preclinical and clinical research studies with enzalutamide. We also provide support for investigator-sponsored research with MDV3800 and MDV9300. However, because we are not the sponsor of investigator-sponsored research studies, we cannot control how such studies are conducted. If new patient safety issues arise from use of our product candidates in these investigator-sponsored research studies, our development programs may be adversely affected which could impact our business and the results of our operations.

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Risks Related to the Operation of our Business

We may incur substantial costs in the foreseeable future as we continue our development and commercialization activities and may not maintain or increase profitability on a quarterly or annual basis.

We have incurred significant costs principally from funding our research and development activities, from general and administrative expenses and from our XTANDI commercialization activities. We may incur substantial costs in the foreseeable future as we continue to finance the commercialization of XTANDI in the U.S. market, preclinical and clinical studies of enzalutamide, MDV3800, MDV9300 and early stage programs, potential business development activities, and our corporate overhead costs, which could impact our ability to maintain or increase profitability on a quarterly or annual basis. Our ability to generate revenue sufficient to offset these costs in order to maintain or increase profitability on a quarterly or annual basis is dependent on our ability, alone or with collaboration partners, to successfully commercialize products for which we receive marketing approval.

*Our operating results are unpredictable and may fluctuate. If our operating results are below the expectations of securities analysts or investors, the market value of our common stock could decline.

Our operating results are difficult to predict and will likely fluctuate from quarter to quarter and year to year. Due to the competitive market for mCRPC therapies, XTANDI net sales will be difficult to predict from period to period. As a result, you should not rely on XTANDI net sales results in any period as being indicative of future performance and sales of XTANDI may be below the expectation of securities analysts or investors in the future. Additionally, you should not place undue reliance on the forward-looking statements about expectations for future XTANDI net sales from our partner Astellas, as we may not agree with such statements, or from us, as XTANDI net sales results are difficult to predict. We believe that our quarterly and annual results of operations may be affected by a variety of factors, including:

• the price and level of demand for XTANDI;

• the extent to which coverage and reimbursement for XTANDI is available from government and health administration authorities, private health insurers, managed care programs and other third-party payors;

• the timing, cost and level of investment in our and Astellas’ sales and marketing efforts to support XTANDI sales;

• the timing, cost and level of investment in our research and development activities involving XTANDI and our product candidates;

• the cost of manufacturing XTANDI, and the amount of legally mandated discounts to government entities, other discounts and rebates, product returns and other gross-to-net deductions;

• the risk/benefit profile, cost and reimbursement of existing and potential future branded and generic drugs which compete with XTANDI;

• the timeliness and accuracy of financial information we receive from Astellas regarding XTANDI net sales globally, and shared U.S. development and commercialization costs for XTANDI incurred by Astellas, including the accuracy of the estimates Astellas uses in calculating any such financial information including for gross-to-net revenue adjustments;

• inventory levels at pharmaceutical wholesalers and distributors;

• expenditures that we will or may incur to acquire or develop additional technologies, product candidates and products; and

• the impact of fluctuations in foreign currency exchange rates.

In addition, we measure compensation cost for stock-based awards made to employees at the grant date of the award, based on the fair value of the award, and recognize the cost as a non-cash operating expense over the employee’s requisite service period. As the variables that we use as a basis for valuing these awards change over time, including our underlying stock price and stock price volatility, the magnitude of the non-cash expense that we must recognize may vary significantly.

We are required to evaluate the fair value of intangible assets, including in-process research and development, or IPR&D, for impairment at least annually or more frequently if impairment indicators exist. These assets are initially measured at fair value and therefore any change to our assumptions used in the valuations could potentially lead to impairment. Some of the more common potential risks leading to impairment include competition, earlier than expected loss of exclusivity, pricing pressures, adverse regulatory changes or clinical trial results, delay or failure to obtain regulatory approval and additional development costs, inability to achieve expected synergies, higher operating costs, changes in tax laws and other macro-economic changes. If any of these or similar issues arise during development, we may need to re-evaluate our IPR&D and incur a non-cash impairment charge, adversely affecting our consolidated results of operations.

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Additionally, each reporting period, we revalue contingent consideration obligations associated with business acquisitions to their fair value and record increases in fair value as non-cash contingent consideration expense and decreases in fair value as non-cash contingent consideration income. Changes in contingent consideration result from changes in assumptions regarding the probability of successful achievement of related milestones, the estimated timing in which the milestones may be achieved and the discount rates used to estimate the fair value of the liability. Contingent consideration may change significantly as our development programs progress, revenue estimates evolve and additional data is obtained, impacting our estimates. For example, we recorded a non-cash accounting charge of approximately $683 million for the quarter ended June 30, 2016 in connection with our re-evaluation of the contingent consideration liability to BioMarin.

For these and other reasons, it is difficult for us to accurately forecast future profits or losses. As a result, it is possible that in some quarters our operating results could be below the expectations of securities analysts or investors.

Sales fluctuations of XTANDI as a result of inventory levels at Astellas’ customers (such as pharmaceutical wholesalers and distributors) may cause our revenue to fluctuate, which could adversely affect our financial results and the market value of our common stock.

The pharmaceutical wholesalers and distributors with whom Astellas has entered into inventory management agreements make estimates to determine end user demand and may not always be effective in matching their inventory levels to actual end user demand. As a result, changes in inventory levels held by those wholesalers and distributors can cause our operating results to fluctuate unexpectedly if sales of XTANDI to these wholesalers do not match end user demand. Adverse changes in economic conditions or other factors may cause wholesalers and distributors to reduce their inventories of XTANDI. As inventory of XTANDI in the distribution channel fluctuates from quarter to quarter, we may see corresponding fluctuations in reported collaboration revenue from XTANDI net sales.

*A significant and growing amount of the collaboration revenue we generate is in currency other than U.S. dollars, primarily the Euro and the Japanese yen, thereby exposing us to foreign currency exchange rate risk.

A significant and growing amount of our collaboration revenue is generated from royalties on ex-U.S. net sales of XTANDI. The royalties we receive from Astellas on net sales of XTANDI outside of the United States are calculated by converting the respective countries’ XTANDI net sales in local currency to U.S. dollars for payment to us on a quarterly basis. A strengthening of the U.S. dollar relative to current currency exchange rates would result in lower collaboration revenue related to ex-U.S. XTANDI net sales than otherwise would have been reported by us and paid to us.

Beginning in the first quarter of 2016, we implemented a policy to hedge a portion of our exposure to fluctuating currency rates for the Euro and the Japanese yen in order to mitigate unexpected short-term volatility of such rates. Depending on the size of the exposures and the relative movements of exchange rates, if we fail to effectively hedge our exposures, we could experience adverse effects on our reported financial results.

*If we fail to attract and keep senior management personnel, we may be unable to successfully develop our product candidates, identify and acquire promising new technologies, conduct our clinical trials, and commercialize our products, and our business could be harmed.

Our future success depends upon the continued services of our executive officers and our ability to attract, retain, and motivate highly qualified management to oversee our business. None of our executive officers is bound by an employment agreement for any specific term, and they may terminate their employment at any time. We are particularly dependent on the continued services of David Hung, M.D., our president and chief executive officer and a member of our board of directors. Dr. Hung identified enzalutamide for acquisition and has primary responsibility for identifying and evaluating other potential product candidates. We believe that Dr. Hung’s services in this capacity would be difficult to replace.

Although we have not historically experienced unique difficulties attracting and retaining qualified employees, we could experience such problems in the future. Competition for qualified personnel in the biotechnology and pharmaceutical fields is intense, especially in the San Francisco Bay Area. Recent acquisition interest in the company from third parties, as well as our announcement that we have entered into confidentiality agreements with a number of parties that have expressed interest in exploring a potential acquisition of our company, may make it harder for us to effectively compete for such talent because of perceived uncertainty regarding the company’s future. If we are unable to attract and retain qualified personnel on acceptable terms, or there is a significant turnover in our senior management or among our employees as a result of the uncertainty created by the acquisition interest, we may face challenges to our inability to recruit and hire additional personnel which could impair the successful commercialization of

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XTANDI, delay or prevent continued development activities for enzalutamide, MDV3800, MDV9300 and other product candidates, delay or prevent the transfer and integration of MDV3800 into our business and adversely affect or preclude the identification and acquisition of new product candidates, any of which events could harm our business.

*We may encounter difficulty managing our growth and expanding our operations successfully.

Our business has experienced significant growth, which we expect will continue as we expand our commercialization efforts for XTANDI, seek to advance our product candidates through clinical trials, and integrate the acquisition of MDV3800 and other potential business development activities. We expect that we will need to expand our development, regulatory, manufacturing, and commercial capabilities in concert with contracting with third parties to provide certain of these activities for us. To that end, we must be able to hire, train and integrate additional personnel effectively in order to manage our commercialization and development activities, which may be difficult if we are impeded from doing so because of acquisition interest in the company from third parties and uncertainty regarding the company’s future.

Our failure to accomplish any of these tasks could prevent us from successfully growing our company. Our management may need to divert a disproportionate amount of its attention away from our day-to-day activities and devote a substantial amount of time to managing these growth activities. If we are not able to effectively manage the expansion of our operations, it may result in weaknesses in our infrastructure, operational mistakes, loss of business opportunities, loss of employees and reduced productivity among remaining employees. In addition, our expenses may increase more than expected, our ability to generate and/or grow revenues could be reduced, and we may not be able to implement our business strategy. Thus, our future financial performance and our ability to develop and commercialize our product candidates and to compete effectively will depend, in part, on our ability to manage any future growth effectively.

We will need to expand our organization to successfully commercialize our un-partnered product candidates outside of the United States in some degree, and we may experience difficulties, which could disrupt our operations and harm our business.

We have no experience marketing or selling outside of the United States. To successfully commercialize MDV3800, MDV9300, or any other products that emerge from our development programs, we will need to build or otherwise secure these capabilities from third parties. Developing a commercial infrastructure outside the United States is a significant undertaking that requires substantial financial and managerial resources. We may need to establish internal marketing and sales capabilities for several major ex-U.S. geographies to reach the commercial potential of MDV3800, MDV9300, or any other products that result from our development programs. Such expansion would require attracting, retaining and motivating the necessary skilled personnel and, in addition, it may require significant capital and operating expenditures. As a result, such activity may divert human and financial resources from other projects, such as the development or acquisition of additional product candidates. If we encounter unexpected or unforeseen delays in establishing a commercial infrastructure outside the United States, for example, it may negatively impact our ability to launch a commercial product or it may increase the cost and number of resources required for successful commercialization. In addition, it may negatively impact the future financial performance of our business and our ability to generate sufficient revenue to sustain our business. In the future, as a result of these financial and execution risks of expanding geographically ourselves, we may choose to partner with others who have existing capability to commercialize these products.

Debt and lease obligations could adversely affect our financial condition. In addition, we may not have sufficient funds to service our debt and lease obligations when payments are due.

At June 30, 2016, we had approximately $49.2 million of minimum lease commitments. We have incurred in the past, and may incur in the future, additional indebtedness to meet our financing needs, including for example in connection with business development activities and for other general corporate purposes. Substantial indebtedness could have significant effects on our business, results of operations and financial condition. For example, it could:

• make it more difficult for us to satisfy our financial obligations, including with respect to our debt and lease obligations;

• increase our vulnerability to general adverse economic, industry and competitive conditions;

• reduce the availability of our cash resources to fund our operations because we will be required to dedicate a substantial portion of our cash resources to the payment of principal and interest on our indebtedness and lease payments;

• limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

• place us at a competitive disadvantage compared to our competitors that are less highly leveraged and that, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploring; and

• limit our ability to obtain financing.

Each of these factors may have a material and adverse effect on our financial condition and viability.

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With the acquisition of new product candidates in recent periods, we may need additional funds to support our operations, and such funding may not be available to us on acceptable terms, or at all, which would force us to delay, scale back or eliminate some or all of our currently-planned development programs and other operations, to restructure or refinance our indebtedness, or to determine to do any combination of the foregoing. Raising additional capital may subject us to unfavorable terms or conditions, may cause dilution to our existing stockholders, or may restrict our operations or require us to relinquish rights to our product candidates and technologies.

We require significant capital to fund our operations. We have historically funded our operations primarily through public offerings of our common stock, the issuance of the Convertible Notes (which we redeemed in July 2015 and are no longer outstanding), and from the upfront, milestone, and cost-sharing payments under agreements with our current and former collaboration partners, from collaboration revenue related to XTANDI net sales and, more recently and to a lesser extent, from short-term borrowings under a Revolving Credit Facility. At June 30, 2016, we had cash, cash equivalents and investments totaling $348.7 million available to fund our operations. We expect to devote substantial financial resources to our future operations. Based on our current expectations, we believe our current capital resources, amounts available to us under our Revolving Credit Facility, and projected operating and other cash flows will be sufficient to fund our currently planned operations for at least the next twelve months. This estimate is based on a number of assumptions that may prove to be wrong, including assumptions regarding the amount and timing of net sales of XTANDI, potential XTANDI approvals in new markets and for other indications, and potential receipt of profit sharing and royalty payments under our Astellas Collaboration Agreement, causing us to exhaust our available cash, cash equivalents and investments sooner than anticipated. For example, we may be required or choose to seek additional funds for the commercialization of XTANDI in the United States, to expand our preclinical and clinical development activities for enzalutamide, MDV3800, MDV9300 and other existing or potential future product candidates, to fund business acquisitions, investments or to in-license technologies, particularly if we face challenges or delays in connection with our clinical trials, and to maintain minimum cash balances that we deem reasonable and prudent. Our ability to raise additional funds on acceptable terms will be dependent on the climate of worldwide capital markets, which could be challenging for companies such as ours.

We may be constrained by our obligations under the Revolving Credit Facility to operate our business to its full potential.

The terms of our Revolving Credit Facility contain customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions. Furthermore, under the terms of the Revolving Credit Facility, we are required to comply with a maximum senior secured net leverage ratio and minimum interest coverage ratio covenants. These terms may restrict our ability to operate our business in the manner we deem most effective or desirable, and may restrict our ability to fund our operations through new public offerings of our common stock or strengthen our candidate development pipeline through acquisitions or in-licenses which cause us to exceed our maximum senior secured net leverage ratio.

Failure to comply with the representations and warranties or affirmative and negative covenants could constitute an event of default which, if continued beyond the cure period, would allow the Administrative Agent (as defined in the Revolving Credit Facility), at the request of or with the consent of the Lenders holding a majority of the loans and commitments under the facility, to terminate the commitments of the Lenders to make further loans and declare all the obligations of the Loan Parties under the Revolving Credit Facility to be immediately due and payable, either of which would harm our business.

We may have additional tax liabilities.

We are subject to income taxes in various jurisdictions. Significant judgment is required in determining our provision for income taxes and other tax liabilities. Our effective income tax rate in the future is subject to volatility and could be adversely affected by a number of factors, including interpretations of existing tax laws, changes in tax laws and rates, future levels of research and development expenditures, changes in the mix of earnings in countries with differing statutory tax rates in which we may conduct business, changes in the valuation of deferred tax assets and liabilities, state income taxes, the tax impact of stock-based compensation, changes in estimates of prior years’ items, tax costs for acquisition-related items, changes in accounting standards, non-deductible officers’ compensation, limitations on the utilization of net operating losses and tax credits due to changes in ownership, and overall levels of income before taxes. The impact of our income tax provision resulting from these items may be significant and could have a negative impact on our net income.

We are also subject to non-income based taxes, such as payroll, sales, use, net worth, property, and goods and services taxes in the United States. We may have additional exposure to non-income based tax liabilities.

We are regularly subject to audits by tax authorities in the jurisdictions in which we conduct business. Although we believe our tax positions are reasonable, the final outcome of tax audits and related litigation could be materially different than that reflected in our historical income tax provisions and accruals, and we could be subject to assessments of additional taxes and/or substantial fines or penalties. The resolution of any audits or litigation could have an adverse effect on our financial position and results of operations.

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We and our subsidiaries are engaged in a number of intercompany transactions. Although we believe that these transactions reflect arm’s length terms and that proper transfer pricing documentation is in place, which should be respected for tax purposes, the transfer prices and terms and conditions of such transactions may be scrutinized by tax authorities, which could result in additional tax and/or penalties becoming due.

Intellectual property protection for our product candidates is crucial to our business, and is subject to a significant degree of legal risk, particularly in the life sciences industry.

The success of our business will depend in part on our ability to obtain and maintain intellectual property protection, primarily patent protection for the XTANDI product and any potential future product candidates, as well as successfully asserting and defending these patents against third-party challenges. We and/or our collaborators will only be able to protect the XTANDI product and our potential future product candidates from unauthorized commercialization by third parties to the extent that valid and enforceable patents or trade secrets cover them. Furthermore, future protection of our proprietary rights is uncertain because legal means may afford only limited protection and may not adequately protect our rights or permit us or our potential future collaborators to gain or keep our competitive advantage.

The patent positions of life sciences companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain unresolved. Further, changes in either the patent laws or in interpretations of patent laws in the United States or other countries may diminish the value of our intellectual property rights. Accordingly, we cannot predict the breadth of claims that may be granted or enforced for our patents or for third-party patents that we have licensed. For example:

• we or our licensors might not have been the first to make the inventions covered by each of our pending patent applications and issued patents;

• we or our licensors might not have been the first to file patent applications for these inventions;

• others may independently develop similar or alternative technologies or duplicate any of our technologies;

• it is possible that none of our pending patent applications or the pending patent applications of our licensors will result in issued patents;

• our issued patents and future issued patents, or those of our licensors, may not provide a basis for protecting commercially viable products, may not provide us with any competitive advantages, or may be challenged by third parties and invalidated or rendered unenforceable; and

• we may not develop additional proprietary technologies or product candidates that are patentable.

Further, even if we can obtain protection for and defend the intellectual property position of the XTANDI product or any potential future product candidates, we or any of our potential future collaborators still may not be able to exclude competitors from developing or marketing competing drugs. Should this occur, we and our potential future collaborators may not generate any revenues or profits from the XTANDI product or any potential future product candidates or our revenue or profits would be significantly decreased.

We could become subject to litigation or other challenges regarding intellectual property rights, which could divert management attention, cause us to incur significant costs, prevent us from selling or using the challenged technology and/or subject us to competition by lower priced generic products.

During the course of obtaining patent protection, we may receive rejections from national patent offices or be subject to pre-grant opposition proceedings instituted by third parties. Even after a patent is granted and issued by the national patent office, many countries allow post-grant opposition proceedings. In the U.S., these post-grant opposition proceedings include inter partes review whereby a third party can seek to challenge and invalidate an issued patent in an administrative proceeding before the U.S. Patent and Trademark Office, rather than through litigation in court, which is often lengthier and costlier. Our patents and patent applications, or those of our licensors, could face other challenges, such as interference proceedings, opposition proceedings, re-examination proceedings, derivation proceedings and pre-grant submissions. Any such challenge, if successful, could result in the invalidation of, or in a narrowing of the scope of, any of our patents and patent applications subject to the challenge. Any such challenges, regardless of their success, would likely be time-consuming and expensive to defend and resolve and would divert our management’s time and attention.

Generic and other pharmaceutical manufacturers are and have been very aggressive in challenging the validity of patents held by proprietary pharmaceutical companies, especially if these patents are commercially significant. Pursuant to the provisions of the Hatch-Waxman Act, the XTANDI patents listed in the FDA “Orange Book” could be challenged by generic manufacturers as early as four years from the initial approval of the XTANDI product in the United States, which occurred on August 31, 2012. Companies seeking approval to market a generic version of a reference drug may also seek to challenge the validity of patents listed in the Orange

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Book or other patents covering such reference drug by filing petitions for inter partes review with the U.S. Patent and Trademark Office. If a generic pharmaceutical company or other third party were able to successfully invalidate any of our present or future patents, the XTANDI product and any potential future product candidates that may ultimately receive marketing approval could face additional competition from lower-priced generic products that would result in significant price and revenue erosion and have a significantly negative impact on the commercial viability of the affected product candidate(s).

In addition, we may be a party to litigation to protect our intellectual property or to defend our activities in response to alleged infringement of a third party’s intellectual property. These claims and any resulting lawsuit, if successful, could subject us to significant liability for damages and invalidation, or a narrowing of the scope, of our proprietary rights. These lawsuits, regardless of their success, would likely be time-consuming and expensive to litigate and resolve and would divert management time and attention. Any potential intellectual property litigation also could force us or our potential licensees to do one or more of the following:

• discontinue our products that use or are covered by the challenged intellectual property; or

• obtain from the owner of the allegedly infringed intellectual property right a license to sell or use the relevant technology, which license may not be available on reasonable terms, or at all.

If we or our potential licensees are forced to take any of these actions, our business may be seriously harmed. Although we carry general liability insurance, our insurance does not cover potential claims of this type.

We may in the future initiate claims or litigation against third parties for infringement to protect our proprietary rights or to determine the scope and validity of our proprietary rights or the proprietary rights of competitors. These claims could result in costly litigation and the diversion of our technical and management personnel and we may not prevail in making these claims.

We rely on license agreements for certain aspects of our product candidates and our technology, and failure to meet our obligations under those agreements could severely negatively impact our business, and ability to generate revenue.

We have entered into agreements with third-party commercial and academic institutions to license intellectual property rights and technology. For example, we have a license agreement with UCLA pursuant to which we were granted exclusive worldwide rights to certain UCLA patents related to XTANDI and a family of related compounds. Some of these license agreements, including our license agreement with UCLA, contain diligence and milestone-based termination provisions, in which case our failure to meet any agreed upon diligence requirements or milestones may allow the licensor to terminate the agreement. If our licensors terminate our license agreements or if we are unable to maintain the exclusivity of our exclusive license agreements, we may be unable to continue to develop and commercialize XTANDI or any potential future product candidates based on licensed intellectual property rights and technology.

In the future, we may need to obtain additional licenses of third-party technology that may not be available to us or are available only on commercially unreasonable terms, and which may cause us to operate our business in a more costly or otherwise adverse manner that was not anticipated.

From time to time we may be required to license technology from additional third parties to further develop XTANDI and any future product candidates. Should we be required to obtain licenses to any third-party technology, including any such patents based on biological activities or required to manufacture our product candidates, such licenses may not be available to us on commercially reasonable terms, or at all. The inability to obtain any third-party license required to develop any of our product candidates could cause us to abandon any related development efforts, which could seriously harm our business and operations.

We may become involved in disputes with Astellas, NanoString or any potential future collaborators over intellectual property ownership, and publications by our research collaborators and scientific advisors could impair our ability to obtain patent protection or protect our proprietary information, which, in either case, could have a significant impact on our business.

Inventions discovered under research, material transfer or other such collaboration agreements, including the Astellas Collaboration Agreement or NanoString collaboration agreement, may become jointly owned by us and the other party(ies) to such agreements in some cases and the exclusive property of one of the parties in other cases. Under some circumstances, it may be difficult to determine who owns a particular invention, or whether it is jointly owned, and disputes could arise regarding ownership of those inventions. These disputes could be costly and time consuming and an unfavorable outcome could have a significant adverse effect on our business if we were not able to protect or license rights to these inventions. In addition, our research collaborators and scientific advisors generally have contractual rights to publish our data and other proprietary information, subject to our prior review. Publications by our research collaborators and scientific advisors containing such information, either with our permission or in contravention of the terms of their agreements with us, may impair our ability to obtain patent protection or protect our proprietary information, which could significantly harm our business.

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Trade secrets may not provide adequate protection for our business and technology.

We also rely on trade secrets to protect our technology, especially where we believe patent protection is not appropriate or obtainable. However, trade secrets are difficult to protect. While we use reasonable efforts to protect our trade secrets, our or any potential collaborators’ employees, consultants, contractors or scientific and other advisors may unintentionally or willfully disclose our information to competitors. If we were to enforce a claim that a third party had illegally obtained and was using our trade secrets, our enforcement efforts would be expensive and time consuming, and the outcome would be unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets. Moreover, if our competitors independently develop equivalent knowledge, methods or know-how, it will be more difficult or impossible for us to enforce our rights and our business could be harmed.

Significant disruptions of information technology systems or breaches of data security could adversely affect our business.

Our business is increasingly dependent on critical, complex and interdependent information technology systems to record and maintain financial, clinical trial, safety, laboratory and other corporate records. The size and complexity of our computerized information systems make them vulnerable to breakdown, malicious intrusion, catastrophic events, computer viruses, and human error. We have experienced at least one successful intrusion into our computer systems, and although it did not have a material adverse effect on our operations, there can be no assurance of a similar result in the future as cyberattacks are increasing in their frequency, sophistication and intensity.

We have developed systems and processes that are designed to protect our information and prevent data loss and other security breaches, including systems and processes designed to reduce the impact of a security breach; however, such measures cannot provide absolute security, and we have taken and are continually taking additional security measures to protect against any future intrusion, including employee training. Moreover, the prevalent use of mobile devices that access our systems and confidential information and our relationships with third-party vendors, who may or could have access to our confidential information, increases the risk of data security breaches.

A data or security breach of our systems, or that of our third-party vendors, such as third-party clinical research organizations, third-party clinical manufacturing organization, clinical trial sites, and administrators of our corporate employee benefit plans or of our current and potential future collaboration partners, could lead to public exposure of personal information of our employees, clinical trial patients, customers and other business partners, modification of or prevent us from accessing our clinical trial databases, or the loss of trade secrets or other intellectual property.

If we or our third-party vendors or business partners experience significant data security breaches, we could suffer harm to our reputation, be compelled to comply with federal and/or state breach notification laws and foreign law equivalents, be subjected to liability under laws and regulations that protect personal data, be subjected to mandatory corrective action or government enforcement action, need to verify the correctness of clinical trial database contents, or be exposed to litigation claims. In addition, because these breaches and other inappropriate access can be difficult to detect, any delay in identifying them may lead to increased harm of the type described above. Prolonged disruption would divert management’s attention and could result in a delay to the development of our product candidate.

While we do carry some insurance for these types of claims, our insurance may not be sufficient in type or amount.

*Our productivity, the effectiveness of our internal controls over financial reporting or our results of operations may be adversely affected by our recently completed implementation of a company-wide enterprise resource planning (ERP) system.

We recently completed implementation of a company-wide ERP system to upgrade certain business, operational, and financial processes. ERP implementations are typically complex and time-consuming projects and post-implementation will continue to require significant resources and refinement to fully realize the expected benefits of the system. Our productivity and/or our ability to maintain effective internal control over financial reporting could be adversely affected if the ERP system or associated process changes do not give rise to the benefits that we expect or do not perform as anticipated.

Furthermore, our ERP system stores critical accounting and financial information. Although we have disaster recovery plans, failure or disruption of our ERP system could disrupt our business, result in decreased performance and productivity, transaction errors, loss of data and significant remediation costs. A significant disruption or failure could also have a material adverse effect on our business operations, financial performance and financial condition.

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Risks Related to the Pharmaceutical Industry, Including the Activities of Medivation, Inc.

*Our industry is highly regulated by the FDA and comparable foreign regulatory agencies. We must comply with extensive, strictly enforced regulatory requirements to develop, obtain, and maintain marketing approval for any of our product candidates.

Securing FDA approval requires the submission of extensive preclinical and clinical data and supporting information for each therapeutic indication to establish the product candidate’s safety and efficacy for its intended use. It takes years to complete the testing of a new drug, biologic or medical device and development delays and/or failure can occur at any stage of testing. Any of our present and future clinical trials may be delayed, halted or approval of any of our products may be delayed or may not be obtained due to any of the following:

• any preclinical test or clinical trial may fail to produce safety and efficacy results satisfactory to the FDA or foreign regulatory authorities;

• preclinical and clinical data can be interpreted in different ways, which could delay, limit or prevent regulatory approval;

• negative or inconclusive results from a preclinical test or clinical trial could cause a preclinical study or clinical trial to be repeated, even if other studies or trials relating to the program are ongoing or have been completed and were successful;

• adverse medical events during a clinical trial could cause a program to be terminated. For example, we recently terminated our development of MDV4463 following a serious adverse event which met the criteria for drug-induced liver injury per the FDA’s 2009 Guidance for Industry. While we will continue to monitor subjects who received MDV4463, we have suspended our clinical studies of MDV4463 and do not intend to further investigate it.

• the FDA or foreign regulatory authorities can place a clinical hold on a trial if, among other reasons, it finds that patients enrolled in the trial are or would be exposed to an unreasonable and significant risk of illness or injury;

• the facilities that we utilize, or the processes or facilities of third-party vendors, including without limitation the contract manufacturers who will be manufacturing drug substance and drug product for us or any potential collaborators, may not complete successful inspections by the FDA or foreign regulatory authorities; and

• we may encounter delays or rejections based on changes in FDA policies or the policies of foreign regulatory authorities during the period in which we develop a product candidate or the period required for review of any final regulatory approval before we are able to market any product candidate.

In addition, information generated during the clinical trial process is susceptible to varying interpretations that could delay, limit, or prevent regulatory approval at any stage of the approval process. Moreover, early positive preclinical or clinical trial results may not be replicated in later clinical trials. Failure to demonstrate adequately the quality, safety and efficacy of any of our product candidates would delay or prevent regulatory approval of the applicable product candidate. There can be no assurance that if clinical trials are completed, including our ongoing PROSPER and/or EMBARK clinical trials, that either we or our collaborative partners will submit marketing or supplemental applications for required authorizations to manufacture or market potential products. Similarly, there can be no assurance that any such application will be reviewed and approved by appropriate regulatory authorities in a timely manner, if at all, including, for example, our supplemental New Drug Application for XTANDI to incorporate head-to-head data of enzalutamide versus bicalutamide.

*We may be subject, directly or indirectly, to federal and state healthcare fraud and abuse and false claims laws and regulations. Prosecutions under such laws have increased in recent years and we may become subject to such litigation. If we are unable to comply, or have not fully complied, with such laws, we could face substantial penalties.

Commercialization of drugs and biologics that receive FDA approval are subject, directly or indirectly, to various state and federal fraud and abuse laws, including, without limitation, the federal Anti-Kickback Statute and federal False Claims Act and the state law equivalents of such laws. These laws may impact, among other things, our sales, marketing, and education programs.

The federal Anti-Kickback Statute prohibits persons and entities from knowingly and willingly soliciting, offering, receiving or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing or arranging for a good or service, for which payment may be made under a federal healthcare program such as the Medicare and Medicaid programs. The Anti-Kickback Statute is broad, and despite a series of narrow regulatory safe harbors and statutory exceptions, prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry. A focus of the Office of Inspector General, or OIG, of the U.S. Department of Health and Human Services has been financial assistance programs which provide financial assistance to patients who cannot afford their cost-sharing obligations for life saving prescription drugs. Grants made by pharmaceutical companies, including by us through our partner Astellas, to independent charities and non-profit organizations may be subsequently determined by the OIG to be an indirect remuneration to induce the recommendation or to arrange for the purchase of the pharmaceutical company’s product. Penalties for violations of the federal Anti-Kickback Statute include, among other things, criminal and administrative penalties and civil sanctions such as fines, imprisonment and possible exclusion from Medicare, Medicaid and other federal healthcare programs. Many states have adopted laws similar to the federal Anti-Kickback Statute, some of which apply to the referral of patients for healthcare items or services reimbursed by any source, including private insurance programs.

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The federal False Claims Act prohibits persons and entities from knowingly filing, or causing to be filed, a false claim, or the knowing use of false statements, to obtain payment from the federal government. Suits filed under the False Claims Act, known as “qui tam” actions, can be brought by any individual on behalf of the government, and such individuals, commonly known as “whistleblowers,” may share in a proportion of any amounts paid by the entity to the government in fines or settlement. The frequency of filing qui tam actions has increased significantly in recent years, causing greater numbers of biotechnology and pharmaceutical companies to have to defend False Claims Act actions. When it is determined that an entity has violated the False Claims Act, the entity may be required to pay up to three times the actual damages sustained by the government, plus civil penalties for each separate false claim. Various states have also enacted laws modeled after the federal False Claims Act. Although we have developed, implemented, and continue to improve a program for compliance with all federal and state laws, we cannot guarantee that our compliance program will be sufficient or effective, that our employees will comply with our policies and that our employees will notify us of any violation of our policies, that we will have the ability to take appropriate and timely corrective action in response to any such violation, or that we will make decisions and take actions that will necessarily limit or avoid liability for whistleblower claims that individuals, such as employees or former employees, may bring against us or that governmental authorities may prosecute against us based on information provided by individuals. If one or more individuals bring a whistleblower claim against us or if a governmental authority prosecutes a claim against us on the basis of information provided by one or more individuals, and if we are found liable and a fine, injunction, Corporate Integrity Agreement and/or similar government oversight program is imposed on us or we agree to pay a fine or accept an injunction, Corporate Integrity Agreement and/or similar government oversight program in settlement of the claim, they could have a material adverse effect on our financial condition and impair or prevent us from conducting our business. In addition, the costs and fees associated with defending a whistleblower claim would be significant.

We may also be subject to federal criminal healthcare fraud statutes that were created by the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009, or HITECH. The HIPAA health care fraud statute prohibits, among other things, knowingly and willfully executing, or attempting to execute a scheme to defraud any healthcare benefit program, including private payors. A violation of this statute is a felony and may result in fines, imprisonment, and/or exclusion from government sponsored programs. The HIPAA false statements statute prohibits, among other things, knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement or representation in connection with the delivery of or payment for healthcare benefits, items or services. A violation of this statute is a felony and may result in fines and/or imprisonment.

We, and our business activities, are also subject to the federal Physician Payments Sunshine Act, which is within the Patient Protection and Affordable Care Act, as amended by the Health Care Education and Reconciliation Act, (collectively, “PPACA”). The federal Physician Payments Sunshine Act, and its implementing regulations, require certain manufacturers of drugs, devices, biological, and medical supplies for which payment is available under Medicare, Medicaid, or the Children’s Health Insurance Program (with certain exceptions) to report annually information related to certain payments or other transfers of value provided to physicians and teaching hospitals and other healthcare providers. In addition, there has been a recent trend of increased federal and state regulation on payments made to physicians. Certain states mandate implementation of commercial compliance programs, impose restrictions on drug manufacturer marketing practices, and/or the tracking and reporting of gifts, compensation and remuneration to physicians.

We are unable to predict whether we could be subject to actions under any of these or other fraud and abuse laws, or the impact of such actions. If we are found to be in violation of any of the laws described above and other applicable state and federal fraud and abuse laws, we may be subject to penalties, including civil and criminal penalties, damages, fines, exclusion from government healthcare reimbursement programs and the curtailment or restructuring of our operations, any of which could have a material adverse effect on our business and results of operations.

We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and other worldwide anti-bribery laws.

We are subject to the U.S. Foreign Corrupt Practices Act, or FCPA, which generally prohibits companies and their intermediaries from making payments to non-U.S. government officials for purpose of obtaining or retaining business or securing any other improper advantage. We are also subject to similar anti-bribery laws in the jurisdictions in which we operate. Failure to comply with the FCPA or related laws governing the conduct of business with foreign government entities could disrupt our business and lead to severe criminal and civil penalties, including criminal and civil fines, denial of government reimbursement for our products and exclusion from participation in government healthcare programs. Other remedial measures could include further changes or enhancements to our procedures, policies, and controls and potential personnel changes and/or disciplinary actions, any of which could have a material adverse impact on our business, financial condition, results of operations and liquidity. We could also be affected by any allegation that we, or any third-party vendors that we rely on to perform key product development tasks, violated such laws.

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If the FDA or other applicable regulatory authorities approve generic products that compete with any of our products or product candidates, the sales of our products or product candidates may be adversely affected.

Once an NDA is approved, the product covered thereby becomes a “listed drug” which, in turn can be relied upon by potential competitors in support of an approval of an ANDA or 505(b)(2) application. U.S. laws and other applicable policies provide incentives to manufacturers to create modified, non-infringing versions of a drug to facilitate the approval of an ANDA or other application for a generic substitute. These manufacturers might only be required to conduct a relatively inexpensive study to show that their product has the same active ingredient(s), dosage form, strength, route of administration, and conditions of use, or labeling, as our product or product candidate and that the generic product is bioequivalent to ours, meaning it is absorbed in the body at the same rate and to the same extent as our product or product candidate. These generic equivalents, which must meet the same quality standards as branded pharmaceuticals, would be significantly less costly than ours to bring to market and companies that produce generic equivalents are generally able to offer their products at lower prices. Thus, after the introduction of a generic competitor, a significant percentage of sales of any branded product is typically lost to the generic product. Accordingly, competition from generic equivalents to our products or product candidates would materially adversely impact our revenues, profitability and cash flows and substantially limit our ability to obtain a return on the investments that we have made in our product candidates.

To the extent that we receive regulatory approval to market biological products in the future, we will face competition from biosimilar products. A growing number of companies have announced their intention to develop biosimilar products, some of which could potentially compete with our product candidates. Because of the abbreviated pathway for approval of biosimilars in the United State and abroad, we may in the future face greater competition from biosimilar products. This additional competition could have a material adverse effect on our business and results of operations.

Healthcare reform initiatives and other third party cost-containment pressures could cause us to sell our products at lower prices, resulting in decreased revenues.

The United States and some foreign jurisdictions have enacted or are considering enacting a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to profitably sell XTANDI and other product candidates should they receive marketing approval. Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality and/or expanding access. In the United States, the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

In March 2010, the PPACA became law in the United States. PPACA substantially changed and will continue to change the way healthcare is financed by both governmental and private insurers and significantly affects the pharmaceutical industry. The provisions of PPACA most relevant to the pharmaceutical industry include:

• an annual, nondeductible fee on any entity that manufactures or imports certain branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain governmental health care programs, not including orphan drug sales;

• an increase in the rebates a manufacturer must pay under the Medicaid Drug Rebate Program to 23.1% and 13% of the average manufacturer price for branded and generic drugs, respectively;

• Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices of applicable brand drugs to eligible beneficiaries during their coverage gap period, as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D;

• extension of manufacturers’ Medicaid rebate liability to covered drugs dispensed to individuals who are enrolled in Medicaid managed care organizations;

• expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to additional individuals with income at or below 133% of the Federal Poverty Level beginning in 2014, thereby potentially increasing manufacturers’ Medicaid rebate liability;

• expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;

• a new requirement to report certain financial arrangements with physicians and teaching hospitals, as defined in PPACA and its implementing regulations, including reporting any payment or “transfers of value” made or distributed to physicians and teaching hospitals, and reporting any ownership and investment interests held by physicians and their immediate family members and applicable group purchasing organizations;

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• expansion of health care fraud and abuse laws, including the federal False Claims Act and Anti-Kickback Statute, new government investigative powers, and enhanced penalties for noncompliance;

• a licensure framework for follow-on biologic products; and

• a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.

We anticipate that the PPACA, as well as other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria or maximum monthly out-of-pocket costs for patients, either of which could put additional downward pressure on the price that we receive for any approved product, and could seriously harm our business. Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors. If we fail to successfully secure and maintain adequate coverage and reimbursement of our products or are significantly delayed in doing so, we will have difficulty achieving market acceptance of our products and expected revenue and profitability which would have a material adverse effect on our business, results of operations and financial condition. In addition, we will face competition from other approved drugs against which we compete, and the marketers of such other drugs are likely to be significantly larger than us and therefore enjoy significantly more negotiating leverage with respect to the individual payors than we may have.

*We could experience adverse outcomes under existing litigation or become subject to product liability or other litigation, which could harm our ability to efficiently and effectively conduct our business, and, if successful, could materially and adversely harm our business and financial condition as a result of the costs of liabilities that may be imposed thereby.

Our business exposes us to the risk of product liability claims that is inherent in the development, manufacturing, distribution and sale of pharmaceutical products. If XTANDI, MDV3800, MDV9300 or any other potential future product candidate harms people, or is alleged to be harmful, we may be subject to costly and damaging product liability claims brought against us by clinical trial participants, consumers, health care providers, corporate partners or others. We have product liability insurance covering commercial sales of XTANDI and our ongoing clinical trials. However, the amount of insurance we maintain may not be adequate to cover all liabilities that we may incur. If we are unable to obtain insurance at an acceptable cost or otherwise protect against potential product liability claims, we may be exposed to significant litigation costs and liabilities, which may materially and adversely affect our business and financial position. If we are sued for injuries allegedly caused by XTANDI, MDV3800, MDV9300 or any other of our current or future product candidates, our litigation costs and liability could exceed our total assets and our ability to pay. Regardless of merit or eventual outcome, liability claims may result in:

• decreased demand for XTANDI and any potential future product candidate that we may develop;

• injury to our reputation;

• withdrawal of clinical trial participants;

• significant costs to defend the related litigation;

• substantial monetary awards to trial participants or patients;

• loss of revenue; and

• the inability to commercialize any other products that we may develop.

In addition, we may from time to time become involved in various lawsuits and legal proceedings which arise in the ordinary course of our business, such as our litigation with the Regents of the University of California, or Regents. See Part II, Item 1, “Legal Proceedings” for additional information on this litigation. Any litigation to which we are subject could require significant involvement of our senior management and may divert management’s attention from our business and operations. An adverse result in any existing litigation, including our litigation with the Regents, or litigation costs associated with any existing or new litigation that may arise from time to time, such as from our rejection of the unsolicited proposals from Sanofi, the consummation of any business combination or the failure to conclude a business combination, may adversely impact our operating results or financial condition.

Risks Related to Business Acquisitions, Licenses, Investments and Strategic Alliances

We may not be able to successfully integrate MDV3800, MDV9300 or any other potential future product candidates we may acquire or we may otherwise fail to realize their full potential.

A key component of our business strategy is to diversify our product development risk by identifying and acquiring new product opportunities for development such as our recent acquisition of MDV3800 from BioMarin and our earlier license of MDV9300 from CureTech. However, we cannot ensure that we will be able to manage the risks associated with the transfer of development, regulatory and manufacturing activities for the ongoing clinical trials of MDV3800 from BioMarin to us or manage the risks associated with integrating MDV3800 and MDV9300 into our existing business and infrastructure. We may encounter unexpected difficulties during

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the transfer, integration or further development of MDV3800 or MDV9300, any of which may cause us to expend greater funds and efforts or may slow, delay or limit the progress of MDV3800’s or MDV9300’s development. Unexpected difficulties may further be disruptive to our ongoing development efforts, put a strain on our existing personnel, infrastructure and business and divert management’s time and attention.

For MDV3800, other companies, such as AstraZeneca, Clovis Oncology, AbbVie, and Tesaro are developing PARP inhibitors for various oncology indications, some of which have already been approved and on the market and others which are further along in development than MDV3800, both of which could limit our development opportunities for MDV3800. The competitive environment could further compromise our ability to successfully enroll the ongoing clinical trial by limiting the availability of clinical trial investigators, sites and/or patients which could slow, delay or limit the progress of MDV3800’s development.

As a result of these or other problems and risks, we may never receive regulatory approval for MDV3800 or MDV9300, we may not realize the full potential or we may never generate significant value or revenues from these assets.

Business acquisitions, licenses, investments and strategic alliances could disrupt our operations and may expose us to increased costs and unexpected liabilities.

We may acquire or make investments in other companies, enter into other strategic relationships, or in-license technologies, such as our acquisition of MDV3800 and license of MDV9300. To do so, we may use cash, issue equity that could dilute our current stockholders, or incur debt or assume indebtedness. These transactions involve numerous risks, including but not limited to:

• difficulty integrating acquired technologies, products, operations, and personnel with our existing business;

• diversion of management’s attention in connection with both negotiating the acquisition or license and integrating the business;

• strain on managerial and operational resources;

• difficulty implementing and maintaining effective internal control over financial reporting at businesses that we acquire, particularly if they are not located near our existing operations;

• exposure to unforeseen liabilities of acquired companies or companies in which we invest;

• potential costly and time-consuming litigation, including stockholder lawsuits;

• potential issuance of securities to equity holders of the company being acquired which may have a dilutive effect on our stockholders;

• the need to incur additional debt or use our existing cash balances; and

• the requirement to record potentially significant additional future non-cash operating costs for the amortization of intangible assets and potential future impairment or write-down of intangible assets and/or goodwill as well as potentially significant non-cash adjustments to contingent consideration liabilities which would be recorded within operating expenses.

As a result of these or other problems and risks, businesses we acquire or invest in may not produce the revenues, earnings or business synergies that we anticipated, acquired or licensed technologies may not result in regulatory approvals, and acquired or licensed commercial products may not perform as expected. As a result, we may incur higher costs and realize lower revenues than we had anticipated. We cannot assure you that any acquisitions or investments we have made or may make in the future will be successfully identified and completed or that, if completed, the acquired business, licenses, investments, products, or technologies will generate sufficient revenue to offset the negative costs or other negative effects on our business. Failure to manage effectively our growth through acquisition or in-licensing transactions could adversely affect our growth prospects, business, results of operations, financial condition, and cash flow.

Funding may not be available for us to make acquisitions, investments, strategic alliances or in-license technologies in order to grow our business.

We have made and anticipate that we may continue to engage in strategic transactions to grow our business through acquisitions, investments, strategic alliances or in-licensing of technologies. In particular, we may choose to partner in certain geographies to commercialize our successful product candidates. Our growth plans rely, in part, on the successful identification and completion of these various strategic transactions. At any particular time, we may need to raise substantial additional cash or issue additional equity to finance such transactions, in addition to any amounts available from operations or under our Revolving Credit Facility. There is no assurance that we will be able to secure additional funding on acceptable terms, or at all, or obtain stockholder approvals necessary to issue additional equity to finance such transactions. If we are unsuccessful in obtaining financing, our business would be adversely affected.

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*Our consolidated financial statements may be impacted in future periods based on the accounting for our acquired businesses and other agreements.

Certain of our asset acquisition or license agreements may be accounted for as a business combination. Accounting for business combinations may involve complex and subjective valuations of the assets and liabilities recorded, and in some instances contingent consideration, which is recorded in our consolidated financial statements pursuant to the standards applicable for business combinations in accordance with accounting principles generally accepted in the United States, or GAAP. Under GAAP, we are required to review the assumptions underlying our valuations quarterly based on any new information or developments and potentially revise our estimates of future contingent consideration payments, with any differences being recorded in the current period. Therefore, future revisions of estimates may also result in current period charges. Differences between the inputs and assumptions used in the valuations and reassessment of these assumptions and valuations based upon new information could have a material effect on our consolidated financial statements in future periods. For example, we recorded a non-cash accounting charge of approximately $683 million for the quarter ended June 30, 2016, in connection with our re-evaluation of the contingent consideration liability to BioMarin.

We have substantial intangible assets and goodwill as a result of the acquisition of MDV3800 from BioMarin and the license of MDV9300 from CureTech. A significant impairment or write-down of intangible assets and/or goodwill would have a material adverse effect on our consolidated financial statements.

We are required to perform an annual, or in certain situations a more frequent, assessment of intangible assets and goodwill for possible impairment for accounting purposes. We recorded significant intangible assets and goodwill as a result of the CureTech and BioMarin transactions during the years ended December 31, 2014 and 2015, respectively. At June 30, 2016, we had intangible assets and goodwill of approximately $667.4 million, or approximately 40% of our total assets. As of June 30, 2016, we have recognized impairment charges totaling $25.5 million related to our IPR&D asset for MDV9300. If our development activities with respect to IPR&D for acquired product candidates are not successful in future periods, we may be required to incur further non-cash impairment charges that could materially adversely affect our consolidated results of operations or our recorded assets and liabilities.

Risks Related to Ownership of Our Common Stock

*While Sanofi has terminated its consent solicitation, we have entered into confidentiality agreements with a number of parties that have expressed interest in exploring a potential transaction, which activities have been and may continue to be disruptive to our business and increase short-term speculation in our common stock.

In June 2016, Sanofi launched a consent solicitation to remove and replace each member of our board with Sanofi’s hand-picked nominees. We have subsequently entered into confidentiality agreements with a number of parties that have expressed interest in exploring a potential transaction, including Sanofi, and Sanofi has terminated its consent solicitation. However, there can be no assurance that any transaction or business combination will be consummated or, if we determine that it is not in the best interest of our stockholders to continue to pursue a potential transaction, that Sanofi will not refile its consent solicitation after the expiration of the applicable standstill period. Responding to Sanofi’s consent solicitation and exploring a potential transaction with a number of parties has diverted and will continue to divert a disproportionate amount of our management’s time and attention away from day-to-day activities. Such activities may further disrupt our business by causing uncertainty among current and potential employees and with clinical research organizations, investigators and other key vendors important to our success, which could negatively impact our business, future prospects and financial results.

*Our stock price has been and may continue to be volatile and our stockholders’ investment in our common stock could decline in value.

The market prices for our securities and those of other life sciences companies have been highly volatile and often unrelated or disproportionate to the operating performance of those companies, and may continue to be highly volatile in the future. There has been particular volatility in the market prices of securities of life sciences companies because of problems or successes in a given market segment or because investor interest has shifted to other segments. These broad market and industry factors may cause the market price of our common stock to decline, regardless of our operating performance. We have no control over this volatility and can only focus our efforts on our own operations, and even these may be affected due to the state of the capital markets.

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The following factors, in addition to other risk factors described herein, may have a significant impact on the market price of our common stock:

• comments made by securities analysts, including changes in their recommendations;

• speculation in the press or by securities market participants about a potential business combination, the possibility of an unsolicited hostile tender offer or other strategic transactions affecting us or other companies in our industry;

• selling by existing stockholders and short-sellers;

• sales of our common stock by our directors, officers or significant stockholders, including sales effected pursuant to predetermined trading plans adopted under the safe-harbor afforded by Rule 10b5-1;

• negative opinions that are misleading and/or inaccurate regarding our business, management or future prospects published by certain market participants intent on putting downward pressure on the price of our common stock;

• lack of volume of stock trading leading to low liquidity;

• announcements by us of financing transactions and/or future sales of equity or debt securities;

• the recruitment or departure of key management personnel;

• our ability to meet the expectations of investors and securities analysts related to collaboration revenue generated from net sales of XTANDI, including the timing and amount thereof, and other financial metrics;

• changes in our financial guidance or financial estimates by any securities analysts who might cover our company, or our failure to meet our financial guidance or estimates made by securities analysts;

• variations in our quarterly financial results or those of companies that are perceived to be similar to us;

• new products, product candidates or uses for existing products or technologies introduced or announced by our competitors and the timing of these introductions and announcements;

• the progress and results of preclinical studies and clinical trials of our product candidates conducted by us, Astellas or any future collaborative partners or licensees, if any, and any delays in enrolling a sufficient number of patients to complete clinical trials of our product candidates;

• developments concerning our collaboration with Astellas or any future collaborations;

• our dependence on third parties, including Astellas, clinical manufacturing organizations and clinical research organizations, clinical trial sponsors and clinical investigators;

• legislative or regulatory developments in the United States or other countries affecting XTANDI or product candidates, including those of our competitors, including the passage of laws, rules or regulations relating to healthcare and reimbursement or the public announcement of inquiries or lobbying relating to these subjects;

• developments or disputes concerning patent applications, issued patents or other proprietary rights;

• the receipt or failure to receive funding necessary to conduct our business;

• changes in the market valuations of other companies in our industry;

• litigation; and

• general economic, industry and market conditions and other factors that may be unrelated to our operating performance, including market conditions in the pharmaceutical and biotechnology sectors.

These factors and fluctuations, as well as political and other market conditions, may adversely affect the market price of our common stock. Securities-related class action litigation is often brought against a company following periods of volatility in the market price of its securities or offers by third parties to acquire the outstanding shares of a company, including following a decision by the company not to accept such offers. Securities-related litigation, whether with or without merit, could result in substantial costs and divert management’s attention and financial resources, which could harm our business and financial condition, as well as the market price of our common stock. Additionally, volatility or lack of positive performance in our stock price may adversely affect our ability to retain or recruit key employees, all of whom have been or will be granted equity awards as a part of their compensation.

If our operating results are below the expectations of securities analysts, the market price of our common stock could decline.

Various securities analysts follow our financial results and issue reports on us. These reports include information about our historical financial results, our projected development expenses, as well as the analysts’ estimates of our future performance. The

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analysts’ estimates are based upon their own opinions and are often different from our estimates or expectations. We expect our projected development expenses to increase as we advance our product pipeline and grow our infrastructure. While management believes these expenses are an investment in the company’s long-term prospects, such expenses could substantially reduce our near-term earnings below the expectations of security analysts. If our operating results are below their expectations, the market value of our common stock could decline, perhaps substantially.

We do not intend to pay cash dividends on our common stock for the foreseeable future.

We do not expect for the foreseeable future to pay cash dividends on our common stock. Any future determination to pay cash dividends on or repurchase shares of our common stock will be at the discretion of our board of directors and will depend upon, among other factors, our success in completing sales or partnerships of our programs, our results of operations, financial condition, capital requirements, contractual restrictions (such as our Revolving Credit Facility) and applicable law.

*Provisions of our corporate charter documents, our stockholder rights plan and Delaware law could make it more difficult for a third party to acquire us, even if the offer may be considered beneficial by our stockholders.

Provisions of the Delaware General Corporation Law could discourage potential acquisition proposals and could delay, deter or prevent a change in control. The anti-takeover provisions of the Delaware General Corporation Law impose various impediments to the ability of a third party to acquire control of us, even if a change in control would be beneficial to our existing stockholders. Specifically, Section 203 of the Delaware General Corporation Law, unless its application has been waived, provides certain default anti-takeover protections in connection with transactions between us and an “interested stockholder.” Generally, Section 203 prohibits stockholders who, alone or together with their affiliates and associates, own more than 15% of the subject company from engaging in certain business combinations for a period of three years following the date that the stockholder became an interested stockholder of such subject company without approval of the board or the vote of two-thirds of the shares held by the independent stockholders. Our board of directors has also adopted a stockholder rights plan, or “poison pill,” which would significantly dilute the ownership of a hostile acquirer. Additionally, provisions of our amended and restated certificate of incorporation and bylaws could deter, delay or prevent a third party from acquiring us. For instance, our board also has the authority to issue, in certain circumstances, without stockholder approval, preferred stock with such terms as the board of directors may determine. We believe that these provisions benefit our stockholders, although they may in certain circumstances make it more difficult or time consuming for an acquirer to effect a change of control or an acquisition of the company.

We may issue additional shares of our common stock or instruments convertible into shares of our common stock, which could cause our stock price to fall and cause dilution to existing stockholders. In addition, a sale of a substantial number of shares of our common stock in the public market could cause the market price of our common stock to decline significantly.

We may from time to time issue additional shares of common stock or other instruments convertible into, or exchangeable or exercisable for, shares of our common stock, including in connection with potential in-licensing and acquisition transactions. The issuance of additional shares of our common stock would dilute the ownership interests of existing holders of our common stock.

The issuance of a substantial number of shares of our common stock, the sale of a substantial number of shares of our common stock that were previously restricted from sale in the public market, or the perception that these issuances or sales might occur, could depress the market price of our common stock. As a result, investors may not be able to sell their shares of our securities at a price equal to or above the price they paid to acquire them.

Furthermore, the issuance of additional shares of our common stock, or the perception that such issuances might occur, could impair our ability to raise capital through the sale of additional equity securities.

We rely on Astellas to timely deliver important financial information relating to net sales of XTANDI. In the event that this information is inaccurate, incomplete, or not timely, we may not be able to timely or fully meet our financial reporting obligations as required by the SEC.

Under the Astellas Collaboration Agreement, Astellas has exclusive control over the flow of information relating to net sales of XTANDI that we are dependent upon to meet our SEC reporting obligations. Astellas is required under the Astellas Collaboration Agreement to provide us with timely and accurate financial data related to net sales of XTANDI so that we may meet our reporting obligations under federal securities laws. In the event that Astellas fails to provide us with timely and accurate information, we may incur significant liability with respect to federal securities laws, our internal controls and procedures under the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, may be inadequate, and we could be required to record adjustments in future periods, any of which could adversely affect the market price of our common stock and subject us to securities litigation.

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To the extent that we create any joint ventures or have any variable interest entities for which we are required to consolidate, we would need to rely on those entities to timely deliver important financial information to us. In the event that the financial information is inaccurate, incomplete, or not timely, we would not be able to meet our financial reporting obligations as required by the SEC.

While we currently do not have any joint ventures or variable interest entities that we are required to consolidate, to the extent we create such joint ventures or variable interest entities for which we would be required to consolidate and the financial statements of such entities are not prepared by us, we will not have direct control over their financial statement preparation. As a result, we will, for our financial reporting, depend on what these entities report to us, which could result in us adding monitoring and audit processes, which could increase the difficulty of implementing and maintaining adequate controls over our financial processes and reporting in the future. This may be particularly true when such entities do not have sophisticated financial accounting processes in place, or where we are entering into new relationships at a rapid pace, straining our integration capacity. Additionally, if we do not receive the information from the joint venture or variable interest entity on a timely basis, this could cause delays in our external reporting obligations as required by the SEC.

Changes in, or interpretations of, accounting principles could have a significant impact on our financial position and results of operations.

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP. These principles are subject to interpretation by the SEC and various other bodies formed to interpret and create appropriate accounting principles. A change in these principles can have a significant effect on our reported results and may even retroactively affect previously reported transactions.

For example, the Financial Accounting Standards Board, or FASB, is currently working together with the International Accounting Standards Board, or IASB, on several projects to further align accounting principles and facilitate more comparable financial reporting between companies who are required to follow U.S. GAAP under SEC regulations and those who are required to follow International Financial Reporting Standards outside of the United States. These efforts by the FASB and the IASB may result in different accounting principles under U.S. GAAP that may result in materially different financial results for us in areas including, but not limited to, principles for recognizing revenue and lease accounting.

Failure to maintain effective internal control over financial reporting in accordance with the Sarbanes-Oxley Act could have a material adverse effect on our stock price.

Section 404 of the Sarbanes-Oxley Act and the related rules and regulations of the SEC require an annual management assessment of the effectiveness of our internal control over financial reporting and a report by our independent registered public accounting firm attesting to the effectiveness of our internal control over financial reporting at the end of the fiscal year. If we fail to maintain the adequacy of our internal control over financial reporting, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective control over financial reporting in accordance with the Sarbanes-Oxley Act and the related rules and regulations of the SEC. If we cannot in the future favorably assess, or our independent registered public accounting firm is unable to provide an unqualified attestation report on, the effectiveness of our internal control over financial reporting, investor confidence in the reliability of our financial reports may be adversely affected, which could have a material adverse effect on our stock price.

ITEM 6. EXHIBITS.

See the Exhibit List which follows the signature page of this Quarterly Report on Form 10-Q, which is incorporated by reference here.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: August 9, 2016	MEDIVATION, INC.
	By:	/s/    Jennifer Jarrett
	Name:	Jennifer Jarrett
	Title:	Chief Financial Officer
		(Duly Authorized and Principal Financial Officer)

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		Incorporated By Reference
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed Herewith
2.1**	Asset Purchase Agreement, dated August 21, 2015, by and between Medivation, Inc. and BioMarin Pharmaceutical, Inc.	8-K	001-32836	2.1	10/7/2015
2.2**	License Agreement between Medivation, Inc. and CureTech Ltd., dated as of October 23, 2014	8-K	001-32836	2.1	11/6/2015
3.1	Restated Certificate of Incorporation.	8-K	001-32836	3.4	10/17/2013
3.2	Certificate of Amendment to Amended and Restated Certificate of Designation of Series C Junior Participating Preferred Stock of Medivation, Inc.	8-K	001-32836	3.1	2/13/2015
3.3	Certificate of Amendment of Restated Certificate of Incorporation	8-K	001-32836	3.1	6/19/2015
3.4	Amended and Restated Bylaws of Medivation, Inc.	8-K	001-32836	3.1	5/02/2016
4.1	Common Stock Certificate.	10-Q	001-32836	4.1	5/9/2012
4.2	Rights Agreement, dated as of December 4, 2006, between Medivation, Inc. and American Stock Transfer & Trust Company, as Rights Agent, which includes the form of Certificate of Designations of the Series C Junior Participating Preferred Stock of Medivation, Inc. as Exhibit A, the form of Right Certificate as Exhibit B and the Summary of Rights to Purchase Preferred Shares as Exhibit C.	8-K	001-32836	4.1	12/4/2006
10.1	Amended and Restated 2004 Equity Incentive Award Plan	DEF 14A (Am. No. 1)	001-32836	Annex A	4/29/2016
10.2	Form of Change of Control Severance Benefits Agreement between Medivation and Executive Officers					X
31.1	Certification pursuant to Rule 13a-14(a)/15d-14(a).					X
31.2	Certification pursuant to Rule 13a-14(a)/15d-14(a).					X
32.1†	Certifications of Chief Executive Officer and Chief Financial Officer.					X
101.INS	XBRL Instance Document.					X
101.SCH	XBRL Taxonomy Extension Schema Document.					X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.					X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.					X
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document.					X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.					X

† The certifications attached as Exhibit 32.1 accompanying this Quarterly Report on Form 10-Q are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of Medivation, Inc., under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Quarterly Report on Form 10-Q, irrespective of any general incorporation language contained in such filing.

** Confidential treatment has been requested with respect to certain portions of this exhibit.

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EX-10.2

Exhibit 10.2

CHANGE OF CONTROL SEVERANCE BENEFITS AGREEMENT

This CHANGE OF CONTROL SEVERANCE BENEFITS AGREEMENT (this “Agreement”) is made as of the      day of                     ,              by and between Medivation, Inc., a Delaware Corporation (the “Company”) and [Name] (“Employee”). To the extent that the Employee is employed by a subsidiary of the Company, such subsidiary entity shall be referred to herein as the “Employing Subsidiary,” and such Employing Subsidiary (if applicable at the time this Agreement is entered into), is identified below and also is a party to this Agreement.

Background

WHEREAS, this Agreement provides the terms and conditions for the severance benefits that will be provided to Employee due to Employee’s Qualifying Termination (as defined below) with the Company and/or the Employing Subsidiary (to the extent applicable) on or within twelve (12) months following a Change of Control (as defined below).

NOW, THEREFORE, in consideration of the premises and the mutual agreements contained herein and intended to be legally bound hereby, the parties hereto agree as follows:

Agreement

1. Definitions. The following words and phrases shall have the meanings set forth below for the purposes of this Agreement (unless the context clearly indicates otherwise):

(a) “Base Salary” shall mean Employee’s base salary or regular wage rate in effect immediately prior to the Qualifying Termination (not giving effect to any decrease in base salary providing Employee with Good Reason for termination of his or her employment). Base Salary does not include variable forms of compensation such as but not limited to overtime, lead premiums, shift differentials, bonuses, incentive compensation, commissions, expenses or expense allowances.

(b) “Board” shall mean the Board of Directors of the Company, or any successor thereto.

(c) “Cause,” as determined by the Board (and/or the Board of Directors of the Employing Subsidiary, to the extent applicable) in good faith, shall mean Employee has:

(1) failed to perform his or her stated duties in all material respects, which failure continues for fifteen (15) days after Employee’s receipt of written notice of the failure from the Company and/or any Employing Subsidiary;

(2) intentionally and materially breached any provision of this Agreement or any other written agreement with the Company and/or any Employing Subsidiary, and has not cured such breach within fifteen (15) days after Employee’s receipt of written notice of the breach from the Company and/or any Employing Subsidiary (provided that, the Company’s and/or the Employing Subsidiary’s written notice is not required if Employee’s breach is not reasonably capable of cure);

(3) demonstrated Employee’s personal dishonesty in connection with Employee’s employment with the Company and/or any Subsidiary;

(4) engaged in willful misconduct in connection with Employee’s employment with the Company or any Subsidiary;

(5) engaged in a breach of fiduciary duty in connection with Employee’s employment with the Company or any Subsidiary; or

(6) willfully violated any material law, rule or regulation, or final cease-and-desist order (other than minor traffic violations or similar offenses), been convicted or pled guilty (including a no contest plea) to any felony, or engaged in other serious misconduct of such a nature that Employee’s continued employment may reasonably be expected to cause the Company or any of its Subsidiaries substantial economic or reputational injury.

(d) “Change of Control” shall mean a Change of Control of Medivation, Inc., as defined in the Company’s Amended and Restated 2004 Equity Incentive Award Plan (the “2004 Equity Plan”).

(e) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(f) “Company” shall mean Medivation, Inc. or its successor.

(g) “Disability” shall have the same definition as in the 2004 Equity Plan.

(h) “Good Reason” shall mean: (1) a material breach of this Agreement by the Company and/or the Employing Subsidiary; (2) the Company fails to obtain the assumption of this Agreement by any successor to the Company; or (3) the Company or the Employing Subsidiary, without Employee’s express written consent: (i) materially reduces Employee’s Base Salary or the aggregate fringe benefits provided to Employee (except to the extent the decrease is pursuant to a general compensation or benefits reduction applicable to all, or substantially all, employees of the Company and its Subsidiaries at the same position level as Employee); (ii) materially diminishes Employee’s authority, duties or responsibilities; or (iii) relocates Employee’s principal place of employment to a place that increases Employee’s one-way commute from Employee’s residence by at least thirty-five (35) miles as compared to Employee’s then-current principal place of employment immediately prior to such relocation (except for required travel on the business of the Company or any Subsidiary to an extent substantially consistent with Employee’s business travel obligations of the date of this Agreement); provided, however, that Employee complies with the procedures set forth in Section 3(c).

(i) “Qualifying Termination” shall mean the occurrence, on or within twelve (12) months following the consummation of a Change of Control, of either (y) a termination of Employee’s employment by the Company and its Subsidiaries without Cause (and for reasons other than death or Disability), or (z) a termination of Employee’s employment by Employee for Good Reason, and in either case such termination is a “separation from service” as defined in Treasury Regulations Section 1.409A-1(h)(1)(ii). The following events shall not constitute a Qualifying Termination: (i) Employee resigns his or her employment with the Company and its Subsidiaries for any reason that does not qualify as Good Reason at any time, including but not limited to Employee’s Retirement; or (ii) Employee’s employment is terminated for Cause, or due to death or Disability.

(j) “Retirement” shall mean the termination of Employee’s employment with the Company and its Subsidiaries in accordance with the retirement policies, including early retirement policies, generally applicable to salaried employees of the Company and its Subsidiaries, if any.

(k) “Subsidiary” means Medivation Services Inc., Medivation Field Services Inc., and any other corporation, partnership or entity owned directly or indirectly, by the Company.

(l) “Termination Notice” shall mean a dated notice which: (i) indicates the specific termination provision in this Agreement relied upon (if any); (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for the termination of Employee’s employment under such provision;

(iii) specifies the anticipated date that termination of Employee’s employment shall become effective; and (iv) is given in the manner specified in Section 11(j).

2. Term and Termination of Agreement. The term of this Agreement shall commence on the date hereof as first written above and shall continue through December 31, 2016; provided, that commencing on January 1, 2017 and each January 1st thereafter, the term of this Agreement shall automatically be extended for one additional year unless not later than December 31 of the preceding year, the Company and/or the Employing Subsidiary shall have given written notice to Employee that this Agreement will not be extended. In addition, this Agreement will terminate immediately if Employee’s employment terminates at any time (at the Company’s and/or the Employing Subsidiary’s request, or Employee’s request) if such termination is not a Qualifying Termination.

3. Termination of Employment.

(a) At-Will Employment Relationship. During the term of this Agreement, Employee’s employment relationship is at-will and each of the Company, any Employing Subsidiary, and Employee can terminate employment at any time, with or without advance notice, and with or without Cause.

(b) Termination By Company For Cause. During the term of this Agreement, the Company and/or the Employing Subsidiary shall have the right to terminate Employee’s employment for Cause by providing written notice to Employee specifying the particulars of the conduct of Employee forming the basis for Cause to terminate Employee’s employment. The Company and/or the Employing Subsidiary also must comply with any applicable advance notice and cure period requirement as specified in the definition of Cause hereunder.

(c) Termination By Employee For Good Reason. During the term of this Agreement, Employee may terminate his or her employment for Good Reason by written notice to the Company and/or the Employing Subsidiary given within sixty (60) days after the date of the first occurrence of any event that Employee knows or should reasonably have known constitutes Good Reason for termination. Such notice must identify Employee and set forth in reasonable detail the facts and circumstances claimed by Employee to constitute Good Reason and identify Employee’s planned termination date (which must be at least thirty (30) days from the date that the written notice is provided to the Company and/or the Employing Subsidiary). Employee may terminate his or her employment for Good Reason thereafter only if the Company and/or the Employing Subsidiary fails to cure the circumstances identified in Employee’s notice as giving rise to Good Reason within thirty (30) days after its receipt of Employee’s notice, and Employee’s termination must become effective no later than sixty (60) days after the date that the Company and/or the Employing Subsidiary received Employee’s notice provided hereunder.

4. Severance Benefits.

(a) Severance Benefits For Qualifying Terminations. Subject to the terms and conditions of this Agreement (including but not limited to the execution and return of an effective release agreement as described in Section 6 below), if Employee suffers a Qualifying Termination, the Company or an Employing Subsidiary will provide the following as Employee’s sole severance benefits (the “Severance Benefits”):

(i) Cash Severance Benefit. The Company or an Employing Subsidiary shall pay in a lump sum an amount equal to eighteen (18) months of Employee’s Base Salary, to be paid on the first regularly scheduled payroll date to occur within ten (10) business days following the Release Effective Date (as defined in Section 6); provided, however, that to the extent required to comply with Section 409A of the Code, if the Release Period (as defined below) spans two calendar years, such payment shall be made in the second calendar year.

(ii) COBRA Premium Benefit. If Employee was enrolled in a group health plan (i.e., medical, dental, or vision plan) sponsored by the Company or any Subsidiary immediately prior to termination, Employee may be eligible to continue coverage under such group health plan (or to convert to an individual policy) following his or her last day of employment under the Consolidated Omnibus Budget Reconciliation Act of 1985 (together with any state law of similar effect, “COBRA”). If Employee is eligible for continued coverage under COBRA and timely elects such continued coverage, the Company or an Employing Subsidiary shall pay the full amount of the COBRA premiums for Employee and his or her eligible dependents for the first eighteen (18) months of such coverage or until such earlier date as either (A) Employee and/or his or her eligible dependents cease to be eligible for COBRA coverage or (B) Employee becomes eligible for the group health plan coverage of a subsequent employer. Following such period of paid COBRA coverage, Employee will be responsible for the timely payment of the full amount of premiums required under COBRA for the duration of the COBRA period (if any). Employee must notify the Company and, if applicable, the Employing Subsidiary immediately if he or she becomes eligible for coverage by a group health plan of a subsequent employer. Notwithstanding the foregoing, if at any time the Company and/or the Employing Subsidiary, as applicable, determines, in its or their sole discretion, that such payment of the COBRA premiums would result in a violation of the nondiscrimination rules of Section 105(h)(2) of the Code or any statute or regulation of similar effect (including, without limitation, the 2010 Patient Protection and Affordable Care Act, as amended by the 2010 Health Care and Education Reconciliation Act and any other subsequent amendments), then in lieu of such payments by the Company or an Employing Subsidiary to the COBRA carrier on behalf of Employee, the Company or an Employing Subsidiary shall instead pay Employee, within ten (10) business days following the date such determination is made, a fully taxable cash payment equal to the COBRA premiums for up to eighteen (18) months following termination (or any lesser period, if such determination is made after any benefits are provided pursuant to the preceding sentences), subject to applicable tax withholdings and deductions; provided, that such payment shall not be made prior to the Release Effective Date; and provided, further that, to the extent required to comply with Section 409A of the Code, if the Release Period spans two calendar years, such payment shall not be made until the second calendar year.

(b) Other Terminations. In the event Employee’s employment terminates other than due to a Qualifying Termination, Employee’s rights upon termination shall be governed by applicable law and by the standard employment termination policy of the Company and/or its Subsidiaries applicable to Employee in effect at the time of termination or, if applicable, any written employment agreement between the Company or any of its Subsidiaries and Employee other than this Agreement, in effect at the time of termination.

(c) Certain Reductions. The Company or the Employing Subsidiary, if applicable, shall reduce the Severance Benefits by any other severance benefits, pay in lieu of notice, or other similar benefits payable to Employee by the Company or any Subsidiary that become payable in connection with the Qualifying Termination or termination of employment pursuant to (i) any applicable legal requirement, including, without limitation, the Worker Adjustment and Retraining Notification Act, the California Plant Closing Act, or any other similar state law (collectively, “WARN”), (ii) a written employment or severance agreement with the Company or any Subsidiary, or (iii) any policy or practice of the Company or any Subsidiary providing for severance, termination pay, or otherwise allowing Employee to remain on the payroll for a limited period of time after being given notice of the termination of employment. In the Company’s and/or, if applicable, the Employing Subsidiary’s sole discretion, such reductions may be applied on a retroactive basis, with severance benefits previously paid being re-characterized as payments pursuant to the Company’s or any of its Subsidiary’s statutory or contractual obligations.

5. Deductions and Withholdings. All payments under this Agreement will be subject to applicable withholding for federal, state and local taxes. If Employee is indebted to the Company or any Subsidiary as of his or her last day of employment, the Company or any Subsidiary reserves the right to offset the Severance Benefits by the amount of such indebtedness. Additionally, if Employee is subject to withholding for taxes related to any payments or benefits, including but not limited to any imputed income related to perquisites or withholding taxes due in connection with the vesting or exercise of equity awards, the Company and/or the Employing Subsidiary may offset against the Severance Benefits the amount of such

withholding taxes. However, Severance Benefits payments will not be subject to any deductions for other benefit plan purposes such as 401(k) plan contributions and/or 401(k) loan repayments or other employee benefit plan contributions.

6. Release of Claims. In order to be eligible to receive the Severance Benefits, Employee must execute, return, and allow to become effective a general waiver and release in substantially the form attached hereto as Exhibits A, B or C (as applicable) within the time frame set forth therein, but in no event may such release be effective later than sixty (60) days following the date of Employee’s Qualifying Termination (such sixty-day period, the “Release Period”). The date Employee’s release agreement becomes effective, as further described in the applicable release form, is referred to herein as the “Release Effective Date”. The Company and/or the Employing Subsidiary, in their sole discretion, may modify the form of the required release including to comply with applicable law and shall determine the form of the required release, which may be incorporated into a termination agreement or other agreement with Employee.

7. Additional Eligibility and Transition Matters.

(a) Return of Company Property. Employee will not be entitled to the Severance Benefits unless and until Employee returns all Company Property upon or promptly following his or her termination (or earlier if so requested by the Company and/or the Employing Subsidiary). For this purpose, “Company Property” means all paper and electronic documents (and all copies thereof) of the Company or any Subsidiary created and/or received by Employee during his or her period of employment with the Company and its Subsidiaries and other Company information, materials and property which Employee had in his or her possession or control including, but not limited to, files, notes, lab notebooks, drawings, records, plans, forecasts, reports, studies, analyses, proposals, agreements, financial information, research and development information, sales and marketing information, operational and personnel information, specifications, code, software, databases, computer-recorded information, tangible property and equipment (including, but not limited to, leased vehicles, computers, computer equipment, software programs, facsimile machines, mobile telephones, servers), credit and calling cards, entry cards, identification badges and keys; and any materials of any kind which contain or embody any proprietary or confidential information of the Company or any of its Subsidiaries (and all reproductions thereof in whole or in part). As a condition to receiving the Severance Benefits, Employee must undertake a diligent search to locate any such Company Property, and Employee must not make or retain copies, reproductions or summaries of any such Company Property. Employee’s diligent search to locate and return any Company Property includes, but is not limited to, any Company Property that was received, stored, prepared or transmitted by Employee on any personally owned computer, server, e-mail system, mobile phone, or portable electronic device (collectively, “Personal Systems”), and Employee must provide the Company (and/or the Employing Subsidiary) with a computer-useable copy of all Company Property from such Personal Systems and then permanently delete and expunge all such information from the Personal Systems without retaining any copy or reproduction in any form. Notwithstanding the foregoing, Employee is not required to return his or her personal copies of documents evidencing Employee’s hire, termination, compensation, benefits and stock options and any other documentation received as a shareholder of the Company or any Subsidiary.

(b) Prepayment of Advanced Amounts. Employee will not be entitled to the Severance Benefits if he or she previously received an advance(s) for business travel and entertainment expenses unless and until Employee (i) properly completes and submits an expense reimbursement form(s) and supporting receipts to his or her manager no later than the effective date of the Qualifying Termination and (ii) repays any amounts advanced but not used and approved for reimbursement.

(c) Transition of Work. Employee will not be entitled to any Severance Benefits unless and until he or she (i) has satisfactorily transitioned his or her work and information concerning his or her work to the Company and its Subsidiaries to the extent requested by the Company and/or any Subsidiary (including but not limited to completion of exit checklists and properly signed and witnessed lab notebooks), and (ii) has provided the Company and any Subsidiary with all logins, passwords, passcodes and similar information created by Employee for documents, email and electronic files that Employee created or used on systems of the Company and its Subsidiaries.

(d) Proprietary Information Obligations. Employee is not eligible for the Severance Benefits if he or she has not signed the standard form of confidential information and inventions assignment agreement (“Proprietary Agreement”) covering Employee’s entire period of employment with the Company and its Subsidiaries (and with any predecessor) and/or if Employee does not confirm in writing that he or she is and shall remain subject to the terms of the Proprietary Agreement.

(e) Resignation From Board. If Employee is a member of the Board (and/or any Board of Directors of a Subsidiary) as of the Qualifying Termination, Employee will not be eligible for the Severance Benefits unless he or she promptly resigns from the Board (and/or from the Board of Directors of any Subsidiary, if applicable) if requested to do so by a majority of the Board.

8. Death of Employee. Any amounts due Employee under this Agreement (not including any Base Salary not yet earned by Employee) unpaid as of the date of Employee’s death shall be paid in a single sum as soon as practicable after Employee’s death to Employee’s surviving spouse, or if none, to the duly appointed personal representative of Employee’s estate, provided that all conditions for receipt of such amounts have been satisfied.

9. Treatment of Parachute Payments.

(a) In the event that it shall be determined (as hereafter provided) that any payment by the Company to or for the benefit of Employee, whether paid or payable pursuant to the terms of this Agreement or otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement, including without limitation any stock option, or the lapse or termination of any restriction on or the vesting or exercisability of any of the foregoing (collectively, a “Payment”), would be subject to the excise tax imposed by Section 4999 of the Code (or any successor provision thereto) by reason of being considered “contingent on a change in ownership or control” of the Company, within the meaning of Section 280G of the Code (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then such Payment shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Employee’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, reduction shall occur in the manner that results in the greatest economic benefit for the Employee. If more than one method of reduction will result in the same economic benefit, the items so reduced will be reduced pro rata.

(b) All determinations required to be made under this Section 9, including whether an Excise Tax is payable by Employee and the amount of such Excise Tax, shall be made in good faith by a nationally recognized accounting firm (the “Accounting Firm”) selected by the Company. For purposes of the computations required by this Section 9 to the extent not otherwise specified here, reasonable assumptions and approximations may be made with respect to applicable taxes and reasonable, good faith interpretations of the Code may be relied upon and Employee shall be deemed to pay federal, state and local income and payroll taxes at the highest marginal rate of taxation. The Company and Employee shall each provide the Accounting Firm access to and copies of any books, records and documents in the possession of the Company, any of its Subsidiaries or Employee, as the case may be, reasonably requested by the Accounting Firm, and otherwise cooperate with the Accounting Firm in connection with the preparation and issuance of the determination and calculations contemplated by this Section. Any final determination by the Accounting Firm shall be binding upon the Company and its Subsidiaries and Employee. The Company shall pay all fees and expenses of the Accounting Firm.

10. Code Section 409A. It is intended that all Severance Benefits satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulations Sections 1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9)(iii), and the Severance Benefits consisting of premiums paid under COBRA also satisfy, to the greatest extent possible, the exemptions from the application of Section 409A provided under Treasury Regulation Section 1.409A-1(b)(9)(v). Notwithstanding the foregoing, if the Company (or, if applicable, the successor entity thereto) or the Employing Subsidiary (if applicable) determines that the Severance Benefits constitute “deferred compensation” under Section 409A of the Code (Section 409A, together, with any state law of similar effect, “Section 409A”) and Employee is deemed by the Company or the Employing Subsidiary, at the time of the separation from service, to be a “specified employee” as such term is defined in Section 409A(a)(2)(B)(i) (a “Specified Employee”), then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Section 409A, the timing of the Severance Benefits shall be delayed as follows: on the earlier to occur of (i) the date that is six months and one day after Employee’s separation from service and (ii) the date of Employee’s death (such earlier date, the “Delayed Initial Payment Date”), the Company (or the successor entity thereto, as applicable) or the Employing Subsidiary shall (A) pay to Employee a lump sum amount equal to the sum of the Severance Benefits that Employee would otherwise have received through the Delayed Initial Payment Date if the commencement of the payment of the Severance Benefits had not been delayed pursuant to this Section 10 and (B) commence paying the balance of the Severance Benefits in accordance with the original payment schedules set forth above. To the extent required to comply with Section 409A, it is intended that: (1) the right to receive any installment payments pursuant to this Agreement will be treated as a right to receive a series of separate and distinct payments; (2) (a) any expenses or other reimbursements as provided herein will be payable in accordance with the policies in effect from time to time, but in any event will be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by Employee; (b) no such reimbursement or expenses eligible for reimbursement in any taxable year will in any way affect the expenses eligible for reimbursement in any other taxable year; and (c) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchanged for another benefit; and (3) (a) a termination of employment shall not be deemed to have occurred for purposes of this Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment, unless such termination is also a “separation from service” within the meaning of Section 409A and the payment thereof prior to a “separation from service” would violate Section 409A; and (b) for purposes of any provision of this Agreement relating to any such payments or benefits, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”

11. Miscellaneous.

(a) Amendment. No provision of this Agreement may be amended unless such amendment is signed by Employee and such officer as may be specifically designated by the Board to sign on the Company’s behalf, and, to the extent that an Employing Subsidiary is a party to this Agreement, such officer as may be specifically designated by the Board of Directors of such Employing Subsidiary to sign on the Employing Subsidiary’s behalf.

(b) Transfer and Assignment. The rights and obligations of Employee under this Agreement may not be transferred or assigned without the prior written consent of the Company and, to the extent applicable, the Employing Subsidiary. This Agreement shall be binding upon any person who is a successor by merger, acquisition, consolidation or otherwise to the business formerly carried on by the Company and its Subsidiaries without regard to whether or not such person or entity actively assumes the obligations hereunder.

(c) Counterparts. This Agreement and any amendment or supplement to this Agreement may be executed in two or more counterparts, each of which will constitute an original but all of which will together constitute a single instrument. Transmission by facsimile or PDF of an executed counterpart signature page hereof by a party hereto shall constitute due execution and delivery of this Agreement by such party.

(d) Nature of Obligations. Nothing contained herein shall create or require the Company or any Subsidiary to create a trust of any kind to fund any benefits which may be payable hereunder, and to the extent that Employee acquires a right to receive benefits from the Company or any Subsidiary hereunder, such right shall be no greater than the right of any unsecured general creditor of the Company and its Subsidiaries.

(e) ERISA. For purposes of the Employee Retirement Income Security Act of 1974, this Agreement is intended to be a severance pay employee welfare benefit plan, and not an employee pension plan, and shall be construed and administered with that intention.

(f) Prior Employment. Employee represents and warrants that acceptance of employment with the Company and any of its Subsidiaries has not breached, and the performance of his or her employment duties to the Company and any of its Subsidiaries will not breach, any duty owed by Employee to any prior employer or other person.

(g) Headings. The Section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. In the event of a conflict between a heading and the content of a Section, the content of the Section shall control.

(h) Severability. If any provision of this Agreement or the application thereof to any person or circumstance shall be invalid or unenforceable under any applicable law, such event shall not affect or render invalid or unenforceable any other provision of this Agreement and shall not affect the application of any provision to other persons or circumstances, and, if possible, the invalid or unenforceable provision shall be modified to become valid and enforceable to the greatest extent consistent with the general intent of the parties hereunder.

(i) Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, permitted assigns, heirs, executors and administrators.

(j) Notices. For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given (A) on the delivery date if hand-delivered or sent by facsimile transmittal, (B) on the following business day if sent by documented overnight delivery service, and (C) within five (5) business days if sent by certified or registered mail, return receipt requested, postage prepaid, in each case addressed to the respective addresses set forth below or any other address as may be designated in writing by the affected party:

To the Company:

Medivation, Inc.

525 Market Street, 36th Floor

San Francisco, CA 94105

Attention: David Hung, President and Chief Executive Officer

To the Employing Subsidiary (if any):

[NAME of Employing Subsidiary]

525 Market Street, 36th Floor

San Francisco, CA 94105

To Employee:

NAME

ADDRESS

CITY, STATE, ZIP

(k) Entire Agreement. This Agreement, including its exhibits, sets forth the entire understanding of the parties and supersedes all prior agreements, arrangements and communications, whether oral or written, pertaining to the subject matter of hereof. This Agreement provides the exclusive benefits that Employee may become eligible to receive upon a Qualifying Termination, and shall supersede any other severance plan, severance agreement (or such portion of any other agreement with Employee that provides severance pay or severance benefits), policy or practice, whether formal or informal, written or unwritten, previously announced or maintained by the Company and its Subsidiaries (with the exception of any provisions contained in any equity incentive plan or award agreement providing for accelerated vesting of option shares or other equity awards upon or following a Qualifying Termination).

(l) No Implied Employment Contract. This Agreement shall not be deemed (i) to give Employee or any other person any right to be retained in the employ of the Company or any Subsidiary or (ii) to interfere with the right of the Company or any Subsidiary to discharge Employee or any other person at any time, with or without Cause, amd with or without advance notice, which right is hereby reserved.

(m) Waiver. Any party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of any such provision or provisions, nor prevent any party from thereafter enforcing each and every other provision of this Agreement. The rights granted the parties herein are cumulative and shall not constitute a waiver of any party’s right to assert all other legal remedies available to it under the circumstances.

(n) Circular 230 Disclaimer. The following disclaimer is provided in accordance with the Internal Revenue Service’s Circular 230 (21 CFR Part 10). Any advice in this Agreement is not intended or written to be used, and it cannot be used, by Employee for the purpose of avoiding any penalties that may be imposed on Employee. Any advice in this Agreement was written to support the promotion or marketing of participation in this Agreement. Employee should seek advice based on his or her particular circumstances from an independent tax advisor.

(o) Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the United States where applicable and otherwise by the laws of the State of California without regard to conflict of laws principles.

* * *

IN WITNESS WHEREOF, this Agreement has been executed as of the date first above written.

MEDIVATION, INC.		EMPLOYEE
By:
Its:	President and Chief Executive Officer	NAME

[Name of Employing Subsidiary]
By:
Its:	Senior Vice President, General Counsel & Corporate Secretary

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, David T. Hung, M.D., certify that:

1. I have reviewed this Form 10-Q of Medivation, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2016

/s/ David T. Hung, M.D.

Name: David T. Hung, M.D.

Title:   President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Jennifer Jarrett, certify that:

1. I have reviewed this Form 10-Q of Medivation, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2016

/s/ Jennifer Jarrett

Name: Jennifer Jarrett

Title:   Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION

Pursuant to the requirement set forth in Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. § 1350), David T. Hung, M.D., President and Chief Executive Officer of Medivation, Inc. (the “Company”), and Jennifer Jarrett, Chief Financial Officer of the Company, each hereby certifies that, to the best of his or her knowledge:

(1) The Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2016, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Exchange Act; and

(2) The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

In Witness Whereof, each of the undersigned has set his or her hand hereto as of the 9th day of August, 2016.

/s/ David T. Hung, M.D.	/s/ Jennifer Jarrett
Name: David T. Hung, M.D.   Title:   President and Chief Executive Officer	Name: Jennifer Jarrett Title:   Chief Financial Officer

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Medivation, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Aug. 02, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2016
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Trading Symbol	MDVN
Entity Registrant Name	MEDIVATION, INC.
Entity Central Index Key	0001011835
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		165,928,674

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 267,761	$ 225,853
Short-term investments	59,432
Receivable from collaboration partner	227,310	391,558
Prepaid expenses and other current assets	49,653	15,877
Restricted cash	1,449	930
Total current assets	605,605	634,218
Property and equipment, net	60,994	58,142
Long-term investments	21,515
Intangible assets	648,799	644,299
Deferred income tax assets	284,933	57,011
Restricted cash, net of current	11,687	12,206
Goodwill	18,643	18,643
Other non-current assets	7,331	7,072
Total assets	1,659,507	1,431,591
Current liabilities:
Accounts payable, accrued expenses and other current liabilities	135,026	186,203
Contingent consideration	4,951	4,900
Current portion of build-to-suit lease obligation	127
Total current liabilities	140,104	266,103
Contingent consideration	952,604	262,368
Build-to-suit lease obligation, excluding current portion	17,244	17,406
Other non-current liabilities	15,881	13,035
Total liabilities	1,125,833	558,912
Commitments and contingencies (Note 11)
Stockholders' equity:
Preferred stock, $0.01 par value per share; 1,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.01 par value per share; 340,000,000 shares authorized; 165,555,633 and 163,905,342 shares issued and outstanding at June 30, 2016 and December 31, 2015, respectively	1,656	1,639
Additional paid-in capital	745,475	684,841
Accumulated other comprehensive loss	(550)
Retained earnings (accumulated deficit)	(212,907)	186,199
Total stockholders' equity	533,674	872,679
Total liabilities and stockholders' equity	$ 1,659,507	1,431,591
Revolving Credit Facility [Member]
Current liabilities:
Borrowings under Credit Facility		$ 75,000

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Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	1,000,000	1,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	340,000,000	340,000,000
Common stock, shares issued	165,555,633	163,905,342
Common stock, shares outstanding	165,555,633	163,905,342

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Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Statement [Abstract]
Collaboration revenue	$ 206,165	$ 175,657	$ 388,662	$ 304,845
Operating expenses:
Research and development expenses	73,375	47,294	150,962	91,970
Selling, general and administrative expenses	758,431	74,708	855,258	158,647
Total operating expenses	831,806	122,002	1,006,220	250,617
Income (loss) from operations	(625,641)	53,655	(617,558)	54,228
Other income (expense), net:
Loss on extinguishment of Convertible Notes		(7,868)		(7,871)
Interest expense	(475)	(5,309)	(1,155)	(10,917)
Other, net	(23)	(52)	(232)	88
Total other income (expense), net	(498)	(13,229)	(1,387)	(18,700)
Income (loss) before income tax (expense) benefit	(626,139)	40,426	(618,945)	35,528
Income tax (expense) benefit	222,217	(14,600)	219,839	(12,820)
Net income (loss)	$ (403,922)	$ 25,826	$ (399,106)	$ 22,708
Basic net income (loss) per common share	$ (2.45)	$ 0.16	$ (2.42)	$ 0.14
Diluted net income (loss) per common share	$ (2.45)	$ 0.15	$ (2.42)	$ 0.14
Weighted average common shares used in the calculation of basic net income (loss) per common share	164,926	158,505	164,586	157,576
Weighted average common shares used in the calculation of diluted net income (loss) per common share	164,926	168,690	164,586	162,995

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Condensed Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income (loss)	$ (403,922)	$ 25,826	$ (399,106)	$ 22,708
Other comprehensive loss:
Unrealized losses, net of tax impact of ($204), $-, ($379) and $-	(370)		(687)
Reclassifications to net income, net of tax impact of $79, $-, $79 and $-	143		143
Net change	(227)		(544)
Available-for-sale securities:
Unrealized losses, net of tax impact of ($4), $-, ($4) and $-	(6)	(34)	(6)	(34)
Other comprehensive loss	(233)	(34)	(550)	(34)
Comprehensive income (loss)	$ (404,155)	$ 25,792	$ (399,656)	$ 22,674

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016
Statement of Comprehensive Income [Abstract]
Unrealized losses on cash flow hedges, tax	$ (204)	$ (379)
Reclassifications to net income on cash flow hedges, tax	79	79
Unrealized losses on cash flow hedges, tax	$ (4)	$ (4)

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income (loss)	$ (399,106)	$ 22,708
Adjustments for non-cash operating items:
Change in fair value of contingent consideration	690,287	5,013
Stock-based compensation	28,905	27,450
Depreciation on property and equipment	5,115	3,085
Amortization of debt discount and debt issuance costs	170	7,827
Change in deferred income taxes	(229,169)	(773)
Excess tax benefits from stock-based compensation	(13,444)	(13,572)
Loss on extinguishment of Convertible Notes		7,871
Amortization of deferred revenue		(2,257)
Other non-cash items	(4,111)	(60)
Changes in operating assets and liabilities:
Receivable from collaboration partner	164,248	(12,420)
Prepaid expenses and other current assets	(19,964)	(6,085)
Other non-current assets	(394)	2,689
Accounts payable, accrued expenses and other current liabilities	(14,273)	27,153
Current taxes payable	(32,565)	(2,106)
Other non-current liabilities	2,846	718
Net cash provided by operating activities	178,545	67,241
Cash flows from investing activities:
Purchases of available-for-sale securities	(80,967)	(76,397)
Purchases of property and equipment	(13,932)	(6,478)
Change in restricted cash		(1,574)
Net cash used in investing activities	(94,899)	(84,449)
Cash flows from financing activities:
Principal repayment of borrowings under Revolving Credit Facility	(75,000)
Proceeds from issuance of common stock under equity incentive and stock purchase plans	19,853	14,699
Excess tax benefits from stock-based compensation	13,444	13,572
Reduction of build-to-suit lease obligation	(35)	(470)
Principal repayment of Convertible Notes		(90,994)
Cash settlement of Convertible Notes conversion premium		(1,126)
Net cash used in financing activities	(41,738)	(64,319)
Net change in cash and cash equivalents	41,908	(81,527)
Cash and cash equivalents at beginning of period	225,853	502,677
Cash and cash equivalents at end of period	267,761	421,150
Non-cash investing and financing activities:
Property and equipment expenditures incurred but not yet paid	$ 361	1,650
Reacquisition of Convertible Note equity component upon conversion		135,988
Fair value of common stock issued for conversion of Convertible Notes		131,084
Derecognition of build-to-suit lease asset		3,241
Derecognition of build-to-suit lease liability		3,176
Interest capitalized during construction period for build-to-suit lease transactions		1,070
Accrued interest payable forfeited upon conversion of Convertible Notes		292
Amounts capitalized under build-to-suit lease transactions		$ 283

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Description of Business

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

NOTE 1. DESCRIPTION OF BUSINESS

Medivation, Inc. (the “Company” or “Medivation”) is a biopharmaceutical company focused on the development and commercialization of medically innovative therapies to treat serious diseases for which there are limited treatment options. It has one commercial product, XTANDI^® (enzalutamide) capsules, or XTANDI, through the Company’s collaboration with Astellas Pharma, Inc., or Astellas. XTANDI has received marketing approval in the United States, Europe and numerous other countries worldwide for the treatment of patients with metastatic castration-resistant prostate cancer, or mCRPC, and in Japan for the treatment of patients with castration-resistant prostate cancer, or CRPC. The Company and Astellas are also conducting investigational studies of enzalutamide in prostate cancer, advanced breast cancer, and hepatocellular carcinoma. Under the Company’s collaboration agreement with Astellas, it shares equally with Astellas all profits (losses) related to U.S. net sales of XTANDI. The Company also receives royalties ranging from the low teens to the low twenties as a percentage of ex-U.S. XTANDI net sales.

The Company seeks to become a more fully-integrated biopharmaceutical company through the continued commercialization of XTANDI, the acquisition or in-license and development and commercialization of other product opportunities, and through the advancement of its own proprietary research and development programs. The Company expects that its future growth may come from both its internal research efforts, focused in oncology, neurology and other areas, and third-party business development activities, such as its acquisition of all worldwide rights to talazoparib (which is referred to as MDV3800) from BioMarin Pharmaceutical Inc., or BioMarin, in the fourth quarter of 2015 and its license of exclusive worldwide rights to pidilizumab (which is referred to as MDV9300) from CureTech, Ltd., or CureTech, in the fourth quarter of 2014.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Significant Accounting Policies

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of the Company’s financial condition, results of operations and cash flows for the periods presented, have been included. The results of operations for any interim period are not necessarily indicative of the results of operations for the full year or any other interim period.

The unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim unaudited condensed consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding year. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2015, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, or the Annual Report, filed with the U.S. Securities and Exchange Commission, or SEC, on February 26, 2016. The consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements at that date.

The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Company operates in one business segment.

All tabular disclosures of dollar and share amounts are presented in thousands unless otherwise indicated. All per share amounts are presented at their actual amounts. The number of shares issuable under the Amended and Restated 2004 Equity Incentive Award Plan, or the Medivation Equity Incentive Plan, and the Medivation, Inc. 2013 Employee Stock Purchase Plan, or ESPP, disclosed in Note 12, “Stockholders’ Equity,” are presented at their actual amounts unless otherwise indicated. Amounts presented herein may not calculate or sum precisely due to rounding.

(b) Use of Estimates

The preparation of unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires that management make estimates and assumptions in certain circumstances that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Although management believes that these estimates are reasonable, actual future results could differ materially from those estimates. In addition, had different estimates and assumptions been used, the unaudited condensed consolidated financial statements could have differed materially from what is presented.

Significant estimates and assumptions used by management principally relate to revenue recognition, including reliance on third-party information, estimating the performance periods of the Company’s deliverables under collaboration agreements, and estimating the various deductions from gross sales to calculate net sales of XTANDI. Additionally, significant estimates and assumptions used by management include those related to contingent consideration, intangible assets, goodwill, convertible notes, determining whether the Company is the primary beneficiary of any variable interest entities, leases, taxes, research and development and other accruals, share-based compensation, derivatives and hedging, and the calculation of diluted net income per common share.

(c) Significant Accounting Policies

Reference is made to Note 2, “Summary of Significant Accounting Policies,” included in the notes to the Company’s audited consolidated financial statements included in its Annual Report. As of the date of the filing of this Quarterly Report on Form 10-Q, or Quarterly Report, there were no significant changes to the significant accounting policies described in the Company’s Annual Report, except for the addition of the Company’s accounting policies with respect to derivative instruments related to its cash flow hedging program, which commenced during the first quarter of 2016 as discussed in Note 4, “Derivative Financial Instruments,” and performance share units.

(d) Derivative Financial Instruments

The Company uses forward foreign currency exchange contracts to hedge a portion of its gross collaboration revenue exposure from royalties related to the Euro and the Japanese Yen. These derivative instruments are designated as cash flow hedges and are recognized as either assets or liabilities at fair value in the Company’s unaudited condensed consolidated balance sheets. The effective portion of changes in the fair value of these instruments is initially recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity, and subsequently reclassified into earnings when the underlying exposure is reflected in earnings. Ineffectiveness, if any, is recorded immediately in earnings as other income (expense), net. The Company classifies the cash flows from these instruments in the same category as the cash flows from the hedged items, within net cash provided by operating activities in the unaudited condensed consolidated statement of cash flows.

The Company assesses, both at inception and on an ongoing basis, whether its cash flow hedge derivative instruments are highly effective in offsetting the changes in cash flows of the hedged items. At inception and on a quarterly basis, the Company documents and asserts that the critical terms of its derivatives (i.e. notional amounts, currency rate mechanisms, and timing) match the critical terms of the hedged items for the risk being hedged. As such, the Company will assume no ineffectiveness in the hedge relationship because all of the critical terms of the hedge and hedged item are matched. If the Company determines that a forecasted transaction is no longer probable of occurring, hedge accounting will be discontinued for the affected portion of the hedge instrument. If the hedged item becomes probable of not occurring, any related gain or loss on the contract will be recognized immediately in earnings as other income (expense), net.

In assessing hedge effectiveness, the Company also considers the risk of counterparty default under the hedge contract. The Company seeks to limit its counterparty credit risk by working only with counterparties that have certain financial credit ratings. The Company does not enter into derivative contracts for speculative or trading purposes.

(e) Stock-Based Compensation

Performance Share Units

During 2016, the Company granted performance share units, or PSUs, to certain officers of the Company pursuant to the terms of the Medivation Equity Incentive Plan. The terms of the PSUs provide for target and maximum numbers of shares eligible to be earned based on the level of achievement of certain pre-determined revenue goals and clinical development milestones. For the PSUs tied to revenue goals, the actual number of shares of common stock that may ultimately be issued upon vest is calculated by multiplying the number of PSUs by a payout percentage ranging from 50% to 150%. For the PSUs tied to clinical development milestones, the actual number of shares of common stock that may ultimately be issued upon vest is calculated by multiplying the number of PSUs by a payout percentage of 100%. The PSUs will vest, if at all, upon certification by the Compensation Committee of the Company’s Board of Directors of the actual achievement of the performance objectives, subject to specified change of control exceptions.

Stock-based compensation expense associated with PSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date. The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest.

(f) New Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326). ASU 2016-13 prescribes an approach based on expected losses to estimate credit losses on certain financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The amended guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that reporting period, and early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. The amended guidance is to be applied using a modified retrospective approach, which requires application of the guidance at the beginning of the earliest comparative period presented in the year of adoption. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies several aspects of the accounting for share-based payment award transactions. Changes that may impact public companies include changes in the accounting for income taxes, specifically excess tax benefits and tax deficiencies; the classification of excess tax benefits on the statement of cash flows as an operating activity; the option for companies to make an entity-wide accounting policy election to either estimate the number of share-based payment awards that are expected to vest (current GAAP) or account for forfeitures when they occur; and the classification of employee taxes paid when an employer withholds shares for tax withholding purposes as a financing activity on the statement of cash flows. Depending on the specific item to be changed, ASU 2016-09 requires certain changes to be applied either prospectively, retrospectively, or under a modified retrospective transition method to all periods presented. The amended guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, and early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” ASU 2016-05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The amended guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, with the option to apply the amended guidance on either a prospective basis or a modified retrospective basis, and early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 includes a lessee accounting model that recognizes two types of leases - finance leases and operating leases. The standard requires that a lessee recognize on the balance sheet a right-to-use asset and a lease liability for all leases with lease terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as either a finance or operating lease. ASU 2016-02 also requires new qualitative and quantitative disclosures for the amount, timing, and uncertainty of cash flows arising from leases. The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period, and early adoption is permitted. ASU 2016-02 requires modified retrospective transition, which requires application of the guidance at the beginning of the earliest comparative period presented in the year of adoption; however, for all leases that commenced before the effective date, companies can elect not to reassess certain elements, including their lease classification or whether contracts are or contain embedded leases. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, a comprehensive new revenue recognition standard that will supersede the existing revenue recognition guidance. The new accounting guidance creates a framework by which an entity will allocate the transaction price to separate performance obligations and recognize revenue when (or as) each performance obligation is satisfied. Under the new standard, entities will be required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for either “full retrospective” adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch-up as of the earliest period presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch-up as of the current period. In August 2015, the effective date of the new revenue standard was delayed by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also agreed to permit early adoption of the standard, but not before the original effective date of December 15, 2016. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” to clarify ASU 2014-09 implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” to clarify ASU 2014-09 implementation guidance on identifying performance obligations and licensing arrangements. In April 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients” to clarify that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required to disclose the effect of the accounting change for the period of adoption. However, an entity is still required to disclose the effect of the changes on any prior periods retrospectively adjusted. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

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Collaboration Agreement

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Collaboration Agreement

NOTE 3. COLLABORATION AGREEMENT

(a) Collaboration Agreement with Astellas

In October 2009, the Company entered into a collaboration agreement with Astellas, or the Astellas Collaboration Agreement, pursuant to which it is collaborating with Astellas to develop and commercialize XTANDI globally for all indications, dosages, and formulations of enzalutamide. Under the agreement, decision making and economic participation differs between the U.S. market and the ex-U.S. market. In the United States, decisions are generally made by consensus, pre-tax profits and losses are shared equally, and, subject to certain exceptions, development and commercialization costs (including cost of goods sold and the royalty on net sales payable to The Regents of the University of California (“UCLA” or “the Regents”) under the Company’s license agreement with UCLA) are also shared equally. The primary exceptions to equal cost sharing in the U.S. market are that each party is responsible for its own commercial full-time equivalent, or FTE, costs, and that development costs supporting marketing approvals in both the United States and either Europe or Japan are borne one-third by the Company and two-thirds by Astellas. The Company and Astellas are co-promoting XTANDI in the U.S. market, with each company providing half of the sales and medical affairs effort in support of the product. Both the Company and Astellas are entitled to receive a fee for each qualifying detail made by its respective sales representatives. Outside of the United States, decisions are generally made by Astellas and all development and commercialization costs (including cost of goods sold and the royalty on net sales payable to UCLA) are borne by Astellas. Astellas retains all ex-U.S. profits and losses, and pays the Company a tiered royalty ranging from the low teens to the low twenties as a percentage of the aggregate net sales of XTANDI outside of the United States, or ex-U.S. XTANDI net sales. Astellas has sole responsibility for promoting XTANDI outside of the United States and for recording all XTANDI net sales both inside and outside of the United States. Both the Company and Astellas have agreed not to commercialize certain other products having a similar mechanism of action (as defined by the Astellas Collaboration Agreement) as XTANDI for the treatment of prostate cancer for a specified time period, subject to certain exceptions.

Under the Astellas Collaboration Agreement, Astellas paid the Company a non-refundable, upfront cash payment of $110.0 million in the fourth quarter of 2009. The Company was also eligible to receive up to $335.0 million in development milestone payments and up to $320.0 million in sales milestone payments under the Astellas Collaboration Agreement. As of the fourth quarter of 2015, the Company had earned all of the development and sales milestone payments under the Astellas Collaboration Agreement.

The Company and Astellas are each permitted to terminate the Astellas Collaboration Agreement for an uncured material breach by the other party or for the insolvency of the other party. Astellas has a right to terminate the Astellas Collaboration Agreement unilaterally by advance written notice to the Company. Following any termination of the Astellas Collaboration Agreement in its entirety, all rights to develop and commercialize XTANDI will revert to the Company, and Astellas will grant a license to the Company to enable it to continue such development and commercialization. In addition, except in the case of a termination by Astellas for the Company’s material breach, Astellas will supply XTANDI to the Company during a specified transition period.

Unless terminated earlier by the Company or Astellas pursuant to the terms thereof, the Astellas Collaboration Agreement will remain in effect: (a) in the United States, until such time as Astellas notifies the Company that Astellas has permanently stopped selling products covered by the Astellas Collaboration Agreement in the United States; and (b) in each other country of the world, on a country-by-country basis, until such time as (i) products covered by the Astellas Collaboration Agreement cease to be protected by patents or regulatory exclusivity in such country and (ii) commercial sales of generic equivalent products have commenced in such country.

The Astellas Collaboration Agreement further provides for a standstill period during which Astellas and its Affiliates, as defined in the Astellas Collaboration Agreement, agreed to certain restrictive covenants, including that they would not, directly or indirectly (subject to certain exceptions), unless invited to do so by the Company, acquire (a) all or substantially all of the Company’s consolidated assets or (b) beneficial ownership of more than five percent of any voting securities of the Company or any subsidiary or Affiliate of the Company. The standstill period will expire in September 2016.

(b) Collaboration Revenue

Collaboration revenue was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Collaboration revenue:
Related to U.S. XTANDI net sales	$	165,129	$	149,220	$	318,922	$	261,230
Related to ex-U.S. XTANDI net sales		41,036		25,591		69,740		41,358
Related to upfront and milestone payments		—		846		—		2,257
Total	$	206,165	$	175,657	$	388,662	$	304,845

The Company is currently involved in litigation with UCLA regarding certain terms of its license agreement and other matters, which are discussed in Note 11, “Commitments and Contingencies.”

Collaboration Revenue Related to U.S. XTANDI Net Sales

Under the Astellas Collaboration Agreement, Astellas records all U.S. XTANDI net sales. The Company and Astellas share equally all pre-tax profits and losses from U.S. XTANDI net sales. Subject to certain exceptions, the Company and Astellas also share equally all XTANDI development and commercialization costs attributable to the U.S. market, including cost of goods sold and the royalty on net sales payable to UCLA under the Company’s license agreement with UCLA. The primary exceptions to 50/50 cost sharing are that each party is responsible for its own commercial FTE costs and that development costs supporting marketing approvals in both the United States and either Europe or Japan are borne one-third by the Company and two-thirds by Astellas. The Company recognizes collaboration revenue related to U.S. XTANDI net sales in the period in which such sales occur. Collaboration revenue related to U.S. XTANDI net sales consists of the Company’s share of pre-tax profits and losses from U.S. XTANDI net sales, plus reimbursement of the Company’s share of reimbursable U.S. development and commercialization costs. The Company’s collaboration revenue related to U.S. XTANDI net sales in any given period is equal to 50% of U.S. XTANDI net sales as reported by Astellas for the applicable period.

Collaboration revenue related to U.S. XTANDI net sales was as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
U.S. XTANDI net sales (as reported by Astellas)	$	330,257		$	298,440		$	637,843		$	522,460
Shared U.S. development and commercialization costs		(95,055	)		(84,947	)		(225,639	)		(195,260	)
Pre-tax U.S. profit	$	235,202		$	213,493		$	412,204		$	327,200
Medivation’s share of pre-tax U.S. profit	$	117,601		$	106,747		$	206,102		$	163,600
Reimbursement of Medivation’s share of shared U.S. costs		47,528			42,473			112,820			97,630
Collaboration revenue related to U.S. XTANDI net sales	$	165,129		$	149,220		$	318,922		$	261,230

Collaboration Revenue Related to Ex-U.S. XTANDI Net Sales

Under the Astellas Collaboration Agreement, Astellas records all ex-U.S. XTANDI net sales. Astellas is responsible for all development and commercialization costs for XTANDI outside of the United States, including cost of goods sold and the royalty on net sales payable to UCLA under the Company’s license agreement with UCLA, and pays the Company a tiered royalty ranging from the low teens to the low twenties as a percentage of ex-U.S. XTANDI net sales. The Company recognizes collaboration revenue related to ex-U.S. XTANDI net sales in the period in which such sales occur. Collaboration revenue related to ex-U.S. XTANDI net sales consists of royalties from Astellas on those sales.

Collaboration Revenue Related to Upfront and Milestone Payments

As of the fourth quarter of 2015, the Company had earned all development and sales milestone payments under the Astellas Collaboration Agreement. Collaboration revenue related to upfront and milestone payments from Astellas for the three and six months ended June 30, 2015 was $0.8 million and $2.3 million, respectively, which comprised amortization of deferred upfront and development milestones.

(c) Cost-Sharing Payments

Under the Astellas Collaboration Agreement, the Company and Astellas share certain development and commercialization costs (including cost of goods sold and the royalty on net sales payable to UCLA under the Company’s license agreement with UCLA) in the United States. For the three and six months ended June 30, 2016, development cost-sharing payments from Astellas were $15.1 million and $28.4 million, respectively. For the three and six months ended June 30, 2015, development cost-sharing payments from Astellas were $17.6 million and $31.4 million, respectively. For the three and six months ended June 30, 2016, commercialization cost-sharing payments to Astellas were $4.5 million and $23.3 million, respectively. For the three and six months ended June 30, 2015, commercialization cost-sharing payments to Astellas were $2.7 million and $22.8 million, respectively. Development cost-sharing payments from Astellas are recorded as reductions in research and development, or R&D, expenses. Commercialization cost-sharing payments to Astellas are recorded as increases in selling, general, and administrative, or SG&A, expenses.

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

NOTE 4. DERIVATIVE FINANCIAL INSTRUMENTS

The Company receives royalties from Astellas on net sales of XTANDI outside of the United States, which are paid to the Company in U.S. dollars and calculated by converting the respective countries’ XTANDI net sales in local currency to U.S. dollars. Because a significant portion of ex-U.S. sales of XTANDI have been generated in the European Union and in Japan, the royalties received from Astellas related to such sales are dependent on the value of the U.S. dollar versus the Euro and Japanese Yen. The Company also conducts certain R&D activities outside of the United States, with expenses incurred in various currencies, including the Euro and Japanese Yen, and these expenses partially offset the currency exposure related to its collaboration revenue from royalties.

In the first quarter of 2016, the Company began using forward foreign currency exchange contracts to hedge a portion of its gross collaboration revenue exposure from royalties related to the Euro and the Japanese Yen. These derivative instruments are designated as cash flow hedges and have maturity dates of 15 months or less. The Company assesses, both at inception and on an ongoing basis, whether its cash flow hedge derivative instruments are highly effective in offsetting the changes in cash flows of the hedged items. At inception and on a quarterly basis, the Company documents and asserts that the critical terms of its derivatives (i.e. notional amounts, currency rate mechanisms, and timing) match the critical terms of the hedged items for the risk being hedged. As such, the Company will assume no ineffectiveness in the hedge relationship because all of the critical terms of the hedge and hedged items are matched. If the Company determines that a forecasted transaction is no longer probable of occurring, hedge accounting will be discontinued for the affected portion of the hedge instrument. If the hedged item becomes probable of not occurring, any related gain or loss on the contract will be recognized immediately in earnings as other income (expense), net.

The effective portion of changes in the fair value of these instruments is initially recorded as a component of accumulated other comprehensive income (loss), or OCI, in stockholders’ equity, and subsequently reclassified into earnings as collaboration revenue when the underlying exposure is reflected in collaboration revenue. All of the gains and losses related to the hedged forecasted transactions reported in accumulated OCI at June 30, 2016 are expected to be reclassified to collaboration revenue within the next 12 months. There were no amounts related to ineffectiveness for the six months ended June 30, 2016. Additionally, the Company did not discontinue any of its cash flow hedges during the six months ended June 30, 2016.

As of June 30, 2016, the Company had an average derivative USD equivalent notional amount on its open contracts of $4.8 million. The Company plans to enter into approximately eight foreign currency forward contracts per quarter covering a rolling four-quarter period.

The obligations of the Company under its foreign exchange contracts are secured obligations under the terms of the Company’s senior secured credit facility. In addition, the Company‘s foreign exchange contracts are subject to standard International Swaps and Derivatives Association (ISDA) master agreements which provide for various events of default, including a cross default to the Company’s senior secured credit facility. If an event of default or termination event where the Company is the defaulting party occurs, the counterparties to these contracts could request immediate payment on the derivatives. The aggregate fair value of all foreign exchange contracts with credit-risk-related contingent features that are in a liability position as of June 30, 2016, is $1.5 million. In addition, the agreements governing such contracts permit the Company, subject to applicable requirements, to net settle transactions of the same currency with a single net amount payable by one party to the other.

While all of the Company’s derivative contracts allow the right to offset assets or liabilities, it is the Company’s policy to present its derivatives on a gross basis in the unaudited condensed consolidated balance sheets. The following table summarizes the classification and fair values of derivative instruments on the Company’s unaudited condensed consolidated balance sheet:

	June 30, 2016
	Asset Derivatives				Liability Derivatives
	Classification		Fair Value		Classification		Fair Value
Derivatives designated as hedges:
Foreign currency exchange contracts		Other current assets	$	368		Other current liabilities	$	(1,247	)
Foreign currency exchange contracts		Other non-current assets		35		Other non-current liabilities		—
Total derivatives designated as hedges				403				(1,247	)
Derivatives not designated as hedges:
Foreign currency exchange contracts		Other current assets		—		Other current liabilities		(222	)
Total derivatives not designated as hedges				—				(222	)
Total derivatives			$	403			$	(1,469	)

The following table summarizes the effect of the Company’s foreign currency exchange contracts on its unaudited condensed consolidated financial statements:

	Three Months Ended			Six Months Ended
	June 30, 2016			June 30, 2016
Derivatives designated as hedges:
Gains (losses) recognized in accumulated OCI (effective portion)	$	(574	)	$	(1,066	)
Gains (losses) reclassified from accumulated OCI into collaboration revenue (effective portion)		(222	)		(222	)
Gains (losses) recognized in other income (expense), net		—			—

As of June 30, 2016, the Company held one type of financial instrument – derivative contracts related to foreign currency exchange contracts. The following table summarizes the potential effect of offsetting derivatives by type of financial instrument on the Company’s unaudited condensed consolidated balance sheet:

June 30, 2016
Offsetting of Derivative Assets/Liabilities
									Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
Description	Gross Amounts of Recognized Assets/Liabilities			Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Amounts of Assets/Liabilities Presented in the Condensed Consolidated Balance  Sheet			Derivative Financial Instruments		Cash Collateral Received/Pledged		Net Amount (Legal Offset)
Derivative assets	$	403			—	$	403			—		—	$	403
Derivative liabilities	$	(1,469	)		—	$	(1,469	)		—		—	$	(1,469	)

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Fair Value Disclosures

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value Disclosures

NOTE 5. FAIR VALUE DISCLOSURES

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:

			Fair Value Measurements Using:
	Fair Value		Level 1		Level 2		Level 3
June 30, 2016:
Short-term investments:
Corporate debt securities	$	43,465		—	$	43,465		—
Certificates of deposit	$	10,000		—	$	10,000		—
Commercial paper	$	3,965		—	$	3,965		—
U.S. Government securities	$	2,002		—	$	2,002		—
Current assets:
Foreign currency derivative contracts	$	368		—	$	368		—
Long-term investments
Corporate debt securities	$	21,515		—	$	21,515		—
Non-current assets:
Foreign currency derivative contracts	$	35		—	$	35		—
Current liabilities:
Foreign currency derivative contracts	$	1,469		—	$	1,469		—
Contingent consideration	$	4,951		—		—	$	4,951
Non-current liabilities:
Contingent consideration	$	952,604		—		—	$	952,604
December 31, 2015:
Current liabilities:
Contingent consideration	$	4,900		—		—	$	4,900
Non-current liabilities:
Contingent consideration	$	262,368		—		—	$	262,368

The Company estimates the fair values of Level 2 assets or liabilities, including foreign currency derivative contracts, by taking into consideration valuations obtained from third-party pricing or valuation sources. These sources utilize industry standard valuation models, including both income and market-based approaches, for which all significant inputs are observable, either directly, or indirectly, to estimate fair value. These inputs include market pricing based on real-time trade data for the same or similar assets, issuer credit spreads, benchmark yields, foreign currency rates, London Interbank Offered Rates (LIBOR), and other observable inputs. The Company validates the prices provided by its third-party pricing sources by obtaining market values from other pricing sources and/or analyzing pricing data in certain instances. For additional information regarding the Company’s foreign currency derivative transactions, see Note 4, “Derivative Financial Instruments.”

In connection with the acquisitions of MDV3800 and MDV9300, the Company recorded contingent consideration liabilities pertaining to amounts potentially payable to BioMarin and CureTech, respectively. The fair value of contingent consideration is considered a Level 3 liability and was estimated utilizing a model with key assumptions that included estimated revenues and completion of certain development, regulatory and sales milestone targets during the earn-out period, volatility, and estimated discount rates corresponding to the periods of expected payments. The estimated fair value of the contingent consideration liability is measured at each reporting date based on significant inputs not observable in the market. The Company assesses these estimates on an ongoing basis as additional data impacting the assumptions is obtained. Changes in the estimated fair value of contingent consideration are reflected as non-cash adjustments to operating expenses in the unaudited condensed consolidated statements of operations.

The following table presents fair value adjustments related to contingent consideration liabilities recorded by the Company for the periods presented:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016		2015			2016		2015
Fair value adjustments:
BioMarin contingent consideration liability:
Increase to R&D expense	$	8,632	$	—		$	9,124	$	—
Increase to SG&A expense		673,983		—			676,468		—
Total BioMarin fair value adjustments		682,615		—			685,592		—
CureTech contingent consideration liability:
Increase (decrease) to R&D expense		365		(70	)		1,013		930
Increase to SG&A expense		1,348		1,083			3,682		4,083
Total CureTech fair value adjustments		1,713		1,013			4,695		5,013
Total fair value adjustments, net	$	684,328	$	1,013		$	690,287	$	5,013

During the three and six months ended June 30, 2016, the fair value of the contingent consideration liability related to BioMarin increased significantly due to changes in the estimated probabilities of success of the development programs and the range and scope of indications currently planned for development. These changes resulted from various market and development-specific events that occurred during the second quarter of 2016, including: the announcement of positive data from a Phase 3 competitor trial of a PARP inhibitor, validating the clinical and commercial potential for MDV3800 and the overall PARP class; positive feedback received from regulatory authorities regarding study protocols and approval pathways for MDV3800 in various tumor types, including alignment on two registrational trials for tumor types in which MDV3800 has the potential to be the first PARP inhibitor to market; data from three abstracts for MDV3800 presented at recent and upcoming medical conferences in several different tumor types; and data from a Phase 1 trial of MDV3800 in several advanced cancers in combination with low-dose chemotherapy. The majority of the fair value adjustment for the three and six months ended June 30, 2016 is classified as SG&A expense because changes in the key measurement assumptions noted above had the largest impact on the value of the sales-based milestone and royalties on annual net sales of MDV3800 products that BioMarin would be entitled to under the terms of the related purchase agreement.

Increases in the fair value of the contingent consideration liability related to CureTech for the three and six months ended June 30, 2016 and 2015 were primarily due to the time value of money.

BioMarin is entitled to contingent payments totaling up to $160.0 million upon the achievement of defined regulatory and sales-based milestones, and mid-single digit royalties on net sales of products that contain MDV3800 during the royalty term specified in the related purchase agreement. CureTech is entitled to contingent payments totaling up to $85.0 million upon attainment of certain development and regulatory milestones, up to $245.0 million upon the achievement of certain annual worldwide net sales thresholds, and tiered royalties ranging from 5% to 11% on annual worldwide net sales. CureTech is also entitled to a $5.0 million milestone payment upon completion of the Manufacturing Technology Transfer as described in Note 11, “Commitments and Contingencies.”

Contingent consideration may change significantly as development progresses and additional data is obtained that will affect the Company’s assumptions regarding probabilities of successful achievement of related milestones used to estimate the fair value of the liability and the timing in which they are expected to be achieved. Updates to these assumptions could have a significant impact on the Company’s results of operations. For example, a significant increase in the probability of achieving a milestone would result in a significantly higher fair value measurement, while a significant increase in the expected timing of achieving a milestone would result in a significantly lower fair value measurement. Considerable judgment is required to interpret the market data used to develop the assumptions. The estimates of fair value may not be indicative of amounts that could be realized in a current market exchange. Accordingly, the use of different market assumptions and/or different valuation techniques could result in materially different fair value estimates.

There were no transfers between Level 1 and Level 2 financial instruments during the three and six months ended June 30, 2016. The following table includes a roll-forward of the fair value of Level 3 financial instruments for the periods presented:

	Three Months Ended		Six Months Ended
	June 30, 2016		June 30, 2016
Contingent consideration (current and non-current):
Balance at beginning of period	$	273,227	$	267,268
Amounts acquired or issued		—		—
Net change in fair value		684,328		690,287
Settlements		—		—
Transfers in and/or out of Level 3		—		—
Balance at end of period	$	957,555	$	957,555

The following table presents the total balance of the Company’s other financial instruments that are not measured at fair value on a recurring basis:

			Fair Value Measurements Using:
	Total Balance		Level 1		Level 2		Level 3
June 30, 2016:
Assets:
Bank deposits (included in “Cash and cash equivalents”)	$	267,761	$	267,761		—		—
December 31, 2015:
Assets:
Bank deposits (included in “Cash and cash equivalents”)	$	225,853	$	225,853		—		—
Liabilities:
Borrowings under Revolving Credit Facility	$	75,000	$	75,000		—		—

Due to their short-term maturities, the Company believes that the fair value of its bank deposits, receivable from collaboration partner, accounts payable and accrued expenses, short-term borrowings under the Revolving Credit Facility, and other current assets and liabilities approximate their carrying value.

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Available-For-Sale Securities

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Available-For-Sale Securities

NOTE 6. AVAILABLE-FOR-SALE SECURITIES

The Company considers all highly liquid investments with a remaining maturity of three months or less at the time of purchase to be cash equivalents. The Company considers all highly liquid investments with a remaining maturity at the time of purchase of more than three months but no longer than 12 months to be short-term investments, and those with a remaining maturity at the time of purchase of longer than 12 months to be long-term investments. The Company classifies its investments as available-for-sale securities and reports them at fair value with related unrealized gains and losses included as a component of comprehensive income. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in other income (expense), net, 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 other income (expense), net. 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 other income (expense), net.

The following table summarizes the Company’s available-for-sale securities at June 30, 2016:

	June 30, 2016
	Amortized		Gross Unrealized					Fair
	Cost		Gains		Losses			Value
Short-term investments:
Corporate debt securities	$	43,455	$	21	$	(11	)	$	43,465
Certificates of deposit		10,000		—		—			10,000
Commercial paper		3,965		—		—			3,965
U.S. Government securities		2,001		1		—			2,002
Total short-term investments		59,421		22		(11	)		59,432
Long-term investments:
Corporate debt securities		21,536		10		(31	)		21,515
Total long-term investments		21,536		10		(31	)		21,515
Total available-for-sale securities	$	80,957	$	32	$	(42	)	$	80,947

The Company did not hold any available-for-sale securities as of December 31, 2015.

The following table summarizes the Company’s portfolio of available-for-sale securities by contractual maturity:

	June 30, 2016
	Amortized Cost		Fair Value
Less than one year	$	59,421	$	59,432
Greater than one year but less than five years		21,536		21,515
Total	$	80,957	$	80,947

At June 30, 2016, the Company had 23 available-for-sale securities with a fair value of $26.2 million in a gross unrealized loss position, all of which had been in such a position for less than twelve months. The Company does not intend to sell the securities that are in an unrealized loss position, and it is unlikely that the Company will be required to sell the investments before recovery of their amortized cost basis, which may be at maturity.

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Intangible Assets and Goodwill

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Goodwill

NOTE 7. INTANGIBLE ASSETS AND GOODWILL

Intangible assets consist of in-process research and development, or IPR&D, acquired from business acquisitions. The Company accounts for IPR&D as indefinite-lived intangible assets until regulatory approval or discontinuation of the related R&D efforts. Upon obtaining regulatory approval, the Company reclassifies the IPR&D as a definite-lived intangible asset and determines the economic life for amortization purposes. The Company assesses the impairment of indefinite-lived intangible assets and goodwill on an annual basis or more frequently whenever events or changes in circumstances may indicate that the carrying value might not be recoverable.

The following table summarizes the Company’s indefinite-lived intangible assets:

	June 30,		December 31,
	2016		2015
Indefinite-lived intangible asset – MDV3800	$	573,299	$	573,299
Indefinite-lived intangible asset – MDV9300		75,500		71,000
Total	$	648,799	$	644,299

In the second quarter of 2016, the Company recorded an out-of-period correcting adjustment related to its impairment charge from the fourth quarter of 2015 that increased the IPR&D asset related to MDV9300 by $4.5 million and decreased R&D expenses by $4.5 million. Management concluded that the adjustment is not material to the expected full year 2016 results or any previously reported financial statements.

The carrying amount of goodwill was $18.6 million as of June 30, 2016 and December 31, 2015.

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Build-To-Suit Lease Obligation

6 Months Ended

Jun. 30, 2016

Leases [Abstract]

Build-To-Suit Lease Obligation

NOTE 8. BUILD-TO-SUIT LEASE OBLIGATION

In the fourth quarter of 2013, the Company entered into a property lease for approximately 52,000 square feet of space located in San Francisco, California. In the second quarter of 2015, the Company entered into an amended lease agreement to reduce the amount of leased space at this property to approximately 44,000 square feet. The lease agreement expires in August 2024, and the Company has an option to extend the lease term for up to an additional five years.

The Company was deemed, for accounting purposes only, to be the owner of the entire project including the building shell, even though it was not the legal owner. In connection with the Company’s accounting for this transaction, the Company capitalized $14.5 million as a build-to-suit property within property and equipment, net, and recognized a corresponding build-to-suit lease obligation for the same amount. The Company also recognized, as an additional build-to-suit lease property and obligation, structural tenant improvements totaling $3.6 million for amounts paid by the landlord and $3.5 million for capitalized interest during the construction period through 2015. As a result of the amended agreement, the Company surrendered a portion of the property totaling approximately 8,000 square feet to the lessor. Accordingly, the Company derecognized a portion of the build-to-suit asset totaling $3.2 million and a portion of the build-to-suit lease obligation totaling $3.2 million during 2015 related to the portion of the property that was surrendered to the lessor.

During the first quarter of 2016, construction on the property was substantially completed and the property was placed in service. As such, the Company evaluated its lease to determine whether it had met the requirements for sale-leaseback accounting, including evaluating whether all risks of ownership have been transferred back to the landlord, as evidenced by a lack of continuing involvement in the leased property. The Company determined that the construction project did not qualify for sale-leaseback accounting and will instead be accounted for as a financing lease, given the Company’s expected continuing involvement after the conclusion of the construction period. As a result, the building asset remains on the Company’s unaudited condensed consolidated balance sheets at its historical cost of $18.4 million and the Company began depreciating the asset over its estimated useful life in the first quarter of 2016. Additionally, the Company is allocating its monthly lease payments between land rent, which is recorded as an operating lease expense, interest expense, and reduction of the related lease obligation. As of June 30, 2016, the total amount of the build-to-suit lease obligation was $17.4 million, of which $17.2 million was classified as a non-current liability on the unaudited condensed consolidated balance sheets. The Company expects to derecognize the build-to-suit lease asset and lease obligation at the end of the lease term.

Expected future lease payments under the build-to-suit lease as of June 30, 2016 are included in Note 11, “Commitments and Contingencies.”

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Other Balance Sheet Items

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Other Balance Sheet Items

NOTE 9. OTHER BALANCE SHEET ITEMS

(a) Property and Equipment, Net

Property and equipment, net, consisted of the following:

	June 30, 2016			December 31, 2015
Leasehold improvements	$	26,658		$	19,074
Computer equipment and software		20,194			16,083
Build-to-suit property		18,371			18,371
Construction in progress		6,446			14,440
Furniture and fixtures		6,014			5,714
Laboratory equipment		4,472			748
		82,155			74,430
Less: Accumulated depreciation		(21,161	)		(16,288	)
Total	$	60,994		$	58,142

(b) Accounts Payable, Accrued Expenses and Other Current Liabilities

Accounts payable, accrued expenses and other current liabilities consisted of the following:

	June 30, 2016		December 31, 2015
Clinical and preclinical	$	44,749	$	48,975
Accrued professional services and other current liabilities		24,893		14,282
Payroll and payroll-related		22,980		29,215
Royalties payable		22,740		20,665
Accounts payable		19,664		22,696
Taxes payable		—		32,565
Other payable to licensor		—		17,500
Interest payable		—		305
Total	$	135,026	$	186,203

Accounts payable represents short-term liabilities for which the Company has received and processed a vendor invoice prior to the end of the reporting period. Accrued expenses and other current liabilities represent, among other things, compensation and related benefits to employees, royalties due to licensors of technologies, estimated amounts due to third-party vendors for services rendered prior to the end of the reporting period, invoices received from third-party vendors that have not yet been processed, taxes payable, interest payable and other accrued items.

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Debt

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Debt

NOTE 10. DEBT

(a) Revolving Credit Facility

In October 2015, the Company entered into an amendment and restatement of its original credit agreement (the “Credit Agreement”) with JPMorgan Chase Bank, N.A., as administrative agent, and the lenders from time to time party thereto (the “Lenders”), providing for: (i) a five-year $300 million revolving loan facility (the “Revolving Credit Facility”); and (ii) an uncommitted accordion facility subject to the satisfaction of certain conditions (collectively, the “Senior Secured Credit Facility”). The Revolving Credit Facility includes a $50 million multicurrency sub-facility, a $20 million letter of credit sub-facility and a $10 million swing line loan sub-facility.

Loans under the Revolving Credit Facility bear interest, at the Company’s option, at a rate equal to either (a) the LIBOR rate, plus an applicable margin ranging from 1.75% to 2.50% per annum, based upon the secured leverage ratio (as defined in the Credit Agreement) or (b) the prime lending rate, plus an applicable margin ranging from 0.75% to 1.50% per annum, based upon the senior secured net leverage ratio (as defined in the Credit Agreement). In October 2015, the Company borrowed $75.0 million under the Revolving Credit Facility, which the Company repaid in January 2016. The interest rate for this borrowing was 2.1250% and was applied on an actual/360 day basis. There were no balances outstanding under the Revolving Credit Facility at June 30, 2016.

The obligations under the Credit Agreement and any swap obligations and banking services obligations owing to a lender (or an affiliate of a lender) thereunder are and will be guaranteed by the Company and each of the Company’s existing and subsequently acquired or organized direct and indirect domestic subsidiaries (other than certain immaterial domestic subsidiaries, certain Domestic Foreign Holding Companies, and certain domestic subsidiaries whose equity interests are owned directly or indirectly by certain foreign subsidiaries) (collectively, the “Loan Parties”). The obligations under the Credit Agreement and any such swap and banking services obligations are secured, subject to customary permitted liens and other agreed upon exceptions, by a perfected security interest in (i) all tangible and intangible assets of the Loan Parties, except for certain customary excluded assets, and (ii) all of the capital stock owned by the Loan Parties thereunder (limited, in the case of the stock of certain non-U.S. subsidiaries of the Company and Domestic Foreign Holding Companies, to 65% of the capital stock of such subsidiaries).

The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants, including, among other things, restrictions on indebtedness, liens, investments, mergers, dispositions, prepayment of other indebtedness and dividends and other distributions. Under the terms of the Credit Agreement, the Company is required to comply with a maximum senior secured net leverage ratio and minimum interest coverage ratio covenants. At June 30, 2016, the Company was in compliance with these covenants.

In accordance with ASU 2015-15, the Company deferred $1.7 million of debt issuance costs associated with the Revolving Credit Facility, including underwriting, legal and accounting fees, and is amortizing this amount ratably over the five-year access period of the facility. Amortization of the debt issuance costs is recorded as non-cash interest expense on the unaudited condensed consolidated statements of operations.

(b) Convertible Notes Due 2017

In March 2012, the Company issued $258.8 million aggregate principal amount of 2.625% convertible senior notes due April 1, 2017, or the Convertible Notes. The Company was required to pay interest semi-annually in arrears on April 1 and October 1 of each year. The Convertible Notes were convertible upon the occurrence of certain conditions into shares of the Company’s common stock.

During 2015, the Company settled all of the Convertible Notes. During the second quarter of 2015, the Company settled a total of $91.0 million aggregate principal amount of the Convertible Notes through a combination of $92.1 million in cash and 2,099,358 shares of its common stock. During the third quarter of 2015, the Company settled a total of $167.8 million aggregate principal amount of the Convertible Notes through a combination of $167.8 million in cash and 3,539,218 shares of its common stock. The Company recorded a non-cash loss on extinguishment of the Convertible Notes of $7.9 million and $13.2 million in the second and third quarters of 2015, respectively, which was included in other income (expense), net, on the condensed consolidated statements of operations. Forfeited accrued interest payable totaling $1.7 million was reclassified to additional paid-in capital during 2015. Upon settlement, the Convertible Notes were no longer outstanding, interest ceased to accrue thereon, and all rights of the holders of the Convertible Notes ceased to exist.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

NOTE 11. COMMITMENTS AND CONTINGENCIES

(a) Lease Obligations

The Company leases approximately 158,000 square feet of office space, including approximately 143,000 square feet of office space at its corporate headquarters, pursuant to operating lease agreements expiring at various dates through December 2019. The Company has the option to extend the lease term of its corporate headquarters, which expires in June 2019, for an additional five years.

Future operating lease obligations as of June 30, 2016 are as follows:

Years Ending December 31,	Operating Leases
Remainder of 2016	$	4,707
2017		9,542
2018		9,743
2019		5,065
2020		—
2021 and thereafter		—
Total minimum lease payments	$	29,057

The Company is considered the “accounting owner” for a build-to-suit property and has recorded a build-to-suit lease obligation on its unaudited condensed consolidated balance sheets. Additional information regarding the build-to-suit lease obligation is included in Note 8, “Build-To-Suit Lease Obligation.”

Expected future lease payments under the build-to-suit lease as of June 30, 2016 are as follows:

Years Ending December 31,	Expected Cash Payments Under Build- To-Suit Lease Obligation
Remainder of 2016	$	1,100
2017		2,244
2018		2,311
2019		2,380
2020		2,452
2021 and thereafter		9,627
Total minimum lease payments	$	20,114

(b) License Agreement with UCLA

Under an August 2005 license agreement with UCLA, the Company’s subsidiary Medivation Prostate Therapeutics, Inc., or MPT, holds an exclusive worldwide license under several UCLA patents and patent applications covering XTANDI and related compounds. Under the Astellas Collaboration Agreement, the Company granted Astellas a sublicense under the patent rights licensed to it by UCLA.

The Company is required to pay UCLA (a) an annual maintenance fee, (b) $2.8 million in aggregate milestone payments upon achievement of certain development and regulatory milestone events with respect to XTANDI (all of which has been paid as of March 31, 2016), (c) ten percent of all Sublicensing Income, as defined in the agreement, which the Company earns under the Astellas Collaboration Agreement, and (d) a four percent royalty on global net sales of XTANDI, as defined. Under the terms of the Astellas Collaboration Agreement, the Company shares this royalty obligation equally with Astellas with respect to sales in the United States, and Astellas is responsible for this entire royalty obligation with respect to sales outside of the United States. The Company is currently involved in litigation with UCLA, which is discussed in the section titled “Litigation” below.

UCLA may terminate the agreement if the Company does not meet a general obligation to diligently proceed with the development, manufacturing and sale of licensed products, or if it commits any other uncured material breach of the agreement. The Company may terminate the agreement at any time upon advance written notice to UCLA. If neither party terminates the agreement early, the agreement will continue in force until the expiration of the last-to-expire patent on a country-by-country basis.

(c) Clinical Manufacturing Agreements

Manufacturing Services and Supply Agreement

Contemporaneous with the execution of the License Agreement with CureTech, the Company entered into a Manufacturing Services and Supply Agreement, or MSA, with CureTech pursuant to which CureTech will provide clinical trial supply of MDV9300 over a three-year period. In accordance with the terms of the MSA, as amended, the Company paid CureTech upfront and setup fees of $3.0 million during the fourth quarter of 2014, $0.2 million during the second quarter of 2015 and $0.1 million during the third quarter of 2015. The Company is required to pay CureTech a one-time milestone payment of $5.0 million upon the completion of the Manufacturing Technology Transfer, as defined. This potential milestone payment is included in the Company’s contingent consideration liability related to CureTech in connection with the acquisition of MDV9300, as described in Note 5, “Fair Value Disclosures.” In accordance with the terms of the MSA, as amended, the Company is also responsible for providing funding totaling up to $18.3 million for clinical trial materials of MDV9300 over the three-year term of the MSA as well as for certain developmental and analytical services, of which $12.0 million has been paid through June 30, 2016.

Development and Manufacturing Services Agreement

During the fourth quarter of 2014, the Company entered into a Development and Manufacturing Services Agreement with a third-party clinical manufacturing organization. The term of the agreement is for the longer of (i) a period of five years or (ii) through the completion of the Services, as defined. Under the current statement of work under this agreement, as amended, the Company intends to transfer the current manufacturing process of MDV9300 from CureTech to this third party, further scale up and production of Phase 3 clinical trial material of MDV9300 from this entity’s manufacturing facility. The estimated total consideration payable under the current statement of work, as amended, is approximately $15.2 million, of which approximately $7.6 million has been paid through June 30, 2016.

(d) Litigation

The Company is party to legal proceedings, investigations, and claims in the ordinary course of its business, including the matters described below. The Company records accruals for outstanding legal matters when it believes that it is both probable that a liability has been incurred and the amount of such liability can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in significant legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. To the extent new information is obtained and the Company’s views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company’s accrued liabilities would be recorded in the period in which such determination is made. In addition, in accordance with the relevant authoritative guidance, for matters for which the likelihood of material loss is at least reasonably possible, the Company provides disclosure of the possible loss or range of loss; however, if a reasonable estimate cannot be made, the Company will provide disclosure to that effect. Gain contingencies, if any, are recorded when they are realized.

In May 2011, the Company filed a lawsuit in San Francisco Superior Court against the Regents of the University of California, or the Regents, and one of its professors, alleging breach of contract and fraud claims, among others. The Company’s allegations in this lawsuit include that it has exclusive commercial rights to apalutamide, an investigational drug originally known as ARN-509 (previously also referred to as JNJ-56021927, or JNJ-927), which is currently being developed by Aragon Pharmaceuticals, or Aragon. In August 2013, Johnson & Johnson and Aragon completed a transaction in which Johnson & Johnson acquired all apalutamide assets owned by Aragon. The Company sought remedies including a declaration that it is the proper licensee of apalutamide, contractual remedies conferring to it exclusive patent license rights regarding apalutamide, and other equitable and monetary relief. On August 7, 2012, the Regents filed a cross-complaint against the Company seeking declaratory relief that the Regents are entitled to ten percent of any sales milestone payments under the Astellas Collaboration Agreement.

On December 20, 2012, and January 25, 2013, the Court granted summary judgment motions filed by defendants Regents and Aragon, resulting in dismissal of all claims against Regents and Aragon, but denied such motions filed by the remaining Regents professor. On April 15, 2013, the Company filed a Notice of Appeal seeking appeal of the judgment in favor of Aragon, which is now wholly-owned by Johnson & Johnson. The bench trial of the Regent’s cross-complaint against the Company was conducted in July 2013, and on January 15, 2014, the Court entered a judgment in the cross-complaint in favor of Regents. The Company appealed this judgment on February 13, 2014 along with the December 2012 summary judgment order in favor of Regents. The jury trial of the Company’s breach of contract and fraud claims against the remaining Regents professor was conducted in October and November 2013. On November 15, 2013, the jury rendered a verdict in the case, finding in favor of the Company on one of the breach of contract claims, and in favor of the Regents professor on the fraud claims. The Company appealed the resulting judgment on the fraud claims. All appeals from this matter were consolidated, oral arguments were heard on February 23, 2016, and the matter was submitted. A decision of the appellate court is required to be rendered within 90 days of when the matter is submitted. On March 8, 2016, the Court’s submission was vacated, on its own order, stating that “further consideration of the merits of the issues raised on appeal is required.” The Court has set tentative trial dates for the first half of 2017.

On April 11, 2014, the Regents filed a complaint against the Company in which the Regents allege that the “Operating Profits” the Company has received (and will continue to receive) from Astellas, as a result of the Astellas Collaboration Agreement, constitute Sublicensing Income under the license agreement between the Company and the Regents and that the Company and its subsidiary, MPT, have failed to pay the Regents ten percent of such Operating Profits. The Company denies the Regents’ allegations and is vigorously defending the litigation. The Company is currently awaiting a trial date to be set by the Courts.

While the Company believes it has meritorious positions with respect to the claims above and intends to advance its positions in these lawsuits vigorously, including on appeal, the process of resolving matters through litigation or other means is inherently uncertain, and it is not possible to predict the ultimate resolution of any such proceeding. The actual costs of defending the Company’s position may be significant, and the Company may not prevail.

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Stockholders' Equity

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Stockholders' Equity

NOTE 12. STOCKHOLDERS’ EQUITY

(a) Stock Purchase Rights

All shares of the Company’s common stock, if issued prior to the termination by the Company of its rights agreement, dated as of December 4, 2006, include stock purchase rights. The rights are exercisable only if a person or group acquires twenty percent or more of the Company’s common stock or announces a tender or exchange offer which would result in ownership of twenty percent or more of the Company’s common stock. Following the acquisition of twenty percent or more of the Company’s common stock, the holders of the rights, other than the acquiring person or group, may purchase Medivation common stock at half of its fair market value. In the event of a merger or other acquisition of the Company, the holders of the rights, other than the acquiring person or group, may purchase shares of the acquiring entity at half of their fair market value. The rights were not exercisable at June 30, 2016.

(b) Medivation Equity Incentive Plan

The Medivation Equity Incentive Plan provides for the issuance of options and other stock-based awards, including stock appreciation rights, restricted stock awards, restricted stock units and performance share units. The vesting of all outstanding awards under the Medivation Equity Incentive Plan will accelerate, and all such awards will become immediately exercisable, upon a “change of control” of Medivation, as defined in the Medivation Equity Incentive Plan.

During the second quarter of 2016, the Company’s stockholders approved an amendment and restatement of the Medivation Equity Incentive Plan to increase the aggregate number of shares of common stock authorized for issuance under the Medivation Equity Incentive Plan from 47,700,000 to 49,300,000. As of June 30, 2016, approximately 7.4 million shares were available for issuance under the Medivation Equity Incentive Plan.

Performance Share Units

The Company granted 159,121 target number of PSUs during the first and second quarters of 2016 to certain officers of the Company pursuant to the terms of the Medivation Equity Incentive Plan. The terms of the PSUs provide for target and maximum numbers of shares eligible to be earned based on the level of achievement of certain pre-determined revenue goals and clinical development milestones. For the PSUs tied to revenue goals, the actual number of shares of common stock that may ultimately be issued upon vest is calculated by multiplying the number of PSUs by a payout percentage ranging from 50% to 150%. For the PSUs tied to clinical development milestones, the actual number of shares of common stock that may ultimately be issued upon vest is calculated by multiplying the number of PSUs by a payout percentage of 100%.

The PSUs will vest, if at all, upon certification by the Compensation Committee of the Company’s Board of Directors, or the Committee, of the actual achievement of the performance objectives, subject to specified change of control exceptions. Each recipient of a PSU must remain an employee of the Company through the date the Committee determines actual performance has been achieved in order to earn the shares eligible under the award. For a portion of the PSUs tied to revenue goals, each recipient must remain an employee of the Company for one year after the initial date the Committee determined actual performance was achieved in order to earn that particular portion of the shares eligible under the award. Stock-based compensation expense associated with PSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date. The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest.

(c) ESPP

The Company’s ESPP permits eligible employees to purchase shares of the Company’s common stock through payroll deductions at the lower of 85% of the fair market value of the common stock at the beginning or end of a purchase period. Eligible employee purchases are limited on an annual basis to $25,000 in accordance with Section 423 of the Internal Revenue Code. The number of shares of common stock authorized for issuance under the ESPP is 6,000,000 shares. As of June 30, 2016, a total of 397,536 shares have been issued under the ESPP.

(d) Stock-Based Compensation

Stock-based compensation expense was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Stock-based compensation expense recognized as:
R&D expense	$	5,858	$	6,109	$	11,895	$	11,920
SG&A expense		8,836		7,969		17,010		15,530
Total	$	14,694	$	14,078	$	28,905	$	27,450

(e) Accumulated Other Comprehensive Loss

The following table summarizes the changes in accumulated other comprehensive loss by component, net of tax:

	Unrealized Gains and Losses on Cash Flow Hedges			Unrealized Gains and Losses on Available-for-Sale Securities			Total
Balance at December 31, 2015		—			—			—
Other comprehensive loss before reclassifications	$	(687	)	$	(6	)	$	(693	)
Amounts reclassified from other comprehensive loss		143			—			143
Net current period other comprehensive loss		(544	)		(6	)		(550	)
Balance at June 30, 2016	$	(544	)	$	(6	)	$	(550	)

Amounts reclassified for gains and losses on cash flow hedges are recorded as part of collaboration revenue on the Company’s condensed consolidated statements of operations. Amounts reclassified for gains and losses on available-for-sale securities are recorded as part of other income (expense), net on the Company’s condensed consolidated statements of operations.

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Net Income (Loss) Per Common Share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Net Income (Loss) Per Common Share

NOTE 13. NET INCOME (LOSS) PER COMMON SHARE

The computation of basic net income (loss) per common share is based on the weighted-average number of common shares outstanding during each period. The computation of diluted net income (loss) per common share is based on the weighted-average number of common shares outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, restricted stock units, performance share units, stock appreciation rights, ESPP shares, warrants, and shares issuable upon conversion of convertible debt.

In periods where the Company reports a net loss, all common stock equivalents are deemed anti-dilutive such that basic net loss per common share and diluted net loss per common share are equal.

For both the three and six months ended June 30, 2016, approximately 13.4 million potentially dilutive common shares of the Company’s common stock were excluded from the computation of diluted net loss per common share due to the Company’s net loss for these periods. For the three and six months ended June 30, 2015, employee stock-based awards to purchase approximately 1.3 million and 1.0 million shares of the Company’s common stock, respectively, were excluded from the computation of diluted net income per common share because their effect would have been anti-dilutive.

The following table reconciles the numerator and denominator used to calculate diluted net income (loss) per common share:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016			2015		2016			2015
Numerator:
Net income (loss)	$	(403,922	)	$	25,826	$	(399,106	)	$	22,708
Denominator:
Weighted-average common shares, basic		164,926			158,505		164,586			157,576
Dilutive effect of common stock equivalents		—			10,185		—			5,419
Weighted-average common shares, diluted		164,926			168,690		164,586			162,995

At June 30, 2015, the Company had $167.8 million aggregate principal amount of the Convertible Notes outstanding, for which the Company controlled the settlement method. During the second quarter of 2015, the Company asserted its intent and ability to settle the outstanding Convertible Notes for a combination of cash and common stock. Under the “cash settlement” method, interest is not added back to the numerator, and only the contingently issuable shares related to the conversion spread are included in the denominator, if dilutive. Under such method, the settlement of the conversion spread had a dilutive effect when the average share price of the Company’s common stock during the period exceeded the conversion price of approximately $25.62 per share of common stock. The calculation of diluted net income per common share for the three months ended June 30, 2015 includes the effect of approximately 4.8 million common shares related to the conversion spread of the Convertible Notes.

The computation of diluted net income per common share for the six months ended June 30, 2015 reflects the application of the “if-converted” method for the first quarter of 2015 and the “cash settlement” method for the second quarter of 2015 given the demonstrated and asserted redemption for the outstanding debt. Under the “if-converted” method, interest expense, net of tax, related to the Convertible Notes, is added back to net income, and the Convertible Notes are assumed to have been converted into common shares at the beginning of the period during periods in which there would have been a dilutive effect. For the six months ended June 30, 2015, the impact of the Convertible Notes has been excluded from the calculation of diluted net income per common share because the effect of their inclusion would have been anti-dilutive (approximately 7.4 million contingently issuable shares have been excluded).

The Company completed the settlement of the Convertible Notes during the third quarter of 2015 as discussed further in Note 10, “Debt.”

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Income Taxes

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 14. INCOME TAXES

The Company calculates its quarterly income tax provision in accordance with the guidance provided by ASC 740-270, “Interim Income Tax Accounting,” whereby the Company forecasts its estimated annual effective tax rate and then applies that rate to its year-to-date pre-tax book income (loss). Income tax benefit for the three and six months ended June 30, 2016 was $222.2 million and $219.8 million, respectively. The benefit for income taxes was higher than the tax computed at the U.S. federal statutory rate due primarily to the Federal research and development credit and tax benefit from stock-based compensation, partially offset by state income taxes and non-deductible officers’ compensation. The benefit for income taxes for the three and six months ended June 30, 2016 included discrete tax benefits of $236.4 million and $2.2 million related to non-recurring charges for contingent consideration and advisory mergers and acquisitions fees, respectively. In addition, the Company recorded a discrete tax expense of $1.6 million related to a non-recurring IPR&D asset impairment adjustment. Income tax expense for the three and six months ended June 30, 2015 was $14.6 million and $12.8 million, respectively. A discrete tax benefit of $2.8 million related to the loss on extinguishment of the Convertible Notes was included in the provision for income taxes for the three and six months ended June 30, 2015.

The effective tax rate was 35.5% for both the three and six months ended June 30, 2016. The effective tax rate was 36.1% for both the three and six months ended June 30, 2015. The decrease in the effective tax rate for the three and six months ended June 30, 2016 as compared to the prior year periods was due to the Federal research and development tax credit which was permanently reinstated in the fourth quarter of 2015 and greater tax benefits from stock-based compensation in the second quarter of 2016.

For the six months ended June 30, 2016, the Company reduced its current Federal and state taxes payable by $13.4 million related to excess tax benefits from stock-based compensation, increasing additional paid-in capital.

The Company records a valuation allowance to reduce deferred tax assets to reflect the net amount that is more likely than not to be realized. Based upon the weight of available evidence at December 31, 2014, the Company determined that it was more likely than not that a portion of its deferred tax assets would be realizable and consequently released the valuation allowance against Federal and certain state net deferred tax assets during the fourth quarter of 2014. The decision to reverse a portion of the valuation allowance was made after management considered all available evidence, both positive and negative, including but not limited to the historical operating results, income or loss in recent periods, cumulative income in recent years, forecasted earnings, forecasted future taxable income, and significant risk and uncertainty related to forecasts. The release of the valuation allowance resulted in the recognition of certain deferred net tax assets and a decrease to income tax expense.

The future effective tax rate is subject to volatility and may be materially impacted by various internal and external factors. These factors may include, but are not limited to, the amount of income tax benefits and charges from: interpretations of existing tax laws; changes in tax laws and rates; future levels of research and development expenditures; changes in the mix of earnings in countries with differing statutory tax rates in which the Company may conduct business; changes in the valuation of deferred tax assets and liabilities; state income taxes; the tax impact of stock-based compensation; accounting for uncertain tax positions; closure of statute of limitations or settlement of tax audits; changes in estimates of prior years’ items; tax costs for acquisition-related items; changes in accounting standards; non-deductible officers’ compensation; limitations on the utilization of net operating losses and tax credits due to changes in ownership; and overall levels of income before taxes.

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Subsequent Event

6 Months Ended

Jun. 30, 2016

Subsequent Events [Abstract]

Subsequent Event

NOTE 15. SUBSEQUENT EVENT

In July 2016, the Company entered into the Seventh Amendment to its lease agreement, as amended, for its corporate headquarters, pursuant to which it leased approximately 29,000 square feet of additional office space that it expects to occupy in early 2017. In connection with the execution of the Seventh Amendment, the Company will be delivering to the lessor an irrevocable standby letter of credit totaling $1.0 million in November 2016. The Seventh Amendment to the lease agreement expires in 2024, and the Company has an option to extend the lease term for an additional five years. As of July 2016, the Company leased a total of approximately 172,000 square feet of office space at its corporate headquarters pursuant to its lease agreement, as amended.

The future operating lease obligations from this amendment are as follows:

Years Ending December 31,	Operating Lease
Remainder of 2016	$	—
2017		1,938
2018		2,383
2019		2,455
2020		2,528
2021 and thereafter		9,465
Total minimum lease payments	$	18,769

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Principles of Consolidation

(a) Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual audited consolidated financial statements. In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary for the fair statement of the Company’s financial condition, results of operations and cash flows for the periods presented, have been included. The results of operations for any interim period are not necessarily indicative of the results of operations for the full year or any other interim period.

The unaudited condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the interim unaudited condensed consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding year. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2015, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, or the Annual Report, filed with the U.S. Securities and Exchange Commission, or SEC, on February 26, 2016. The consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements at that date.

The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Company operates in one business segment.

All tabular disclosures of dollar and share amounts are presented in thousands unless otherwise indicated. All per share amounts are presented at their actual amounts. The number of shares issuable under the Amended and Restated 2004 Equity Incentive Award Plan, or the Medivation Equity Incentive Plan, and the Medivation, Inc. 2013 Employee Stock Purchase Plan, or ESPP, disclosed in Note 12, “Stockholders’ Equity,” are presented at their actual amounts unless otherwise indicated. Amounts presented herein may not calculate or sum precisely due to rounding.

Use of Estimates

(b) Use of Estimates

The preparation of unaudited condensed consolidated financial statements in accordance with U.S. GAAP requires that management make estimates and assumptions in certain circumstances that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Although management believes that these estimates are reasonable, actual future results could differ materially from those estimates. In addition, had different estimates and assumptions been used, the unaudited condensed consolidated financial statements could have differed materially from what is presented.

Significant estimates and assumptions used by management principally relate to revenue recognition, including reliance on third-party information, estimating the performance periods of the Company’s deliverables under collaboration agreements, and estimating the various deductions from gross sales to calculate net sales of XTANDI. Additionally, significant estimates and assumptions used by management include those related to contingent consideration, intangible assets, goodwill, convertible notes, determining whether the Company is the primary beneficiary of any variable interest entities, leases, taxes, research and development and other accruals, share-based compensation, derivatives and hedging, and the calculation of diluted net income per common share.

Derivative Financial Instruments

(d) Derivative Financial Instruments

The Company uses forward foreign currency exchange contracts to hedge a portion of its gross collaboration revenue exposure from royalties related to the Euro and the Japanese Yen. These derivative instruments are designated as cash flow hedges and are recognized as either assets or liabilities at fair value in the Company’s unaudited condensed consolidated balance sheets. The effective portion of changes in the fair value of these instruments is initially recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity, and subsequently reclassified into earnings when the underlying exposure is reflected in earnings. Ineffectiveness, if any, is recorded immediately in earnings as other income (expense), net. The Company classifies the cash flows from these instruments in the same category as the cash flows from the hedged items, within net cash provided by operating activities in the unaudited condensed consolidated statement of cash flows.

The Company assesses, both at inception and on an ongoing basis, whether its cash flow hedge derivative instruments are highly effective in offsetting the changes in cash flows of the hedged items. At inception and on a quarterly basis, the Company documents and asserts that the critical terms of its derivatives (i.e. notional amounts, currency rate mechanisms, and timing) match the critical terms of the hedged items for the risk being hedged. As such, the Company will assume no ineffectiveness in the hedge relationship because all of the critical terms of the hedge and hedged item are matched. If the Company determines that a forecasted transaction is no longer probable of occurring, hedge accounting will be discontinued for the affected portion of the hedge instrument. If the hedged item becomes probable of not occurring, any related gain or loss on the contract will be recognized immediately in earnings as other income (expense), net.

In assessing hedge effectiveness, the Company also considers the risk of counterparty default under the hedge contract. The Company seeks to limit its counterparty credit risk by working only with counterparties that have certain financial credit ratings. The Company does not enter into derivative contracts for speculative or trading purposes.

Stock-Based Compensation

(e) Stock-Based Compensation

Performance Share Units

During 2016, the Company granted performance share units, or PSUs, to certain officers of the Company pursuant to the terms of the Medivation Equity Incentive Plan. The terms of the PSUs provide for target and maximum numbers of shares eligible to be earned based on the level of achievement of certain pre-determined revenue goals and clinical development milestones. For the PSUs tied to revenue goals, the actual number of shares of common stock that may ultimately be issued upon vest is calculated by multiplying the number of PSUs by a payout percentage ranging from 50% to 150%. For the PSUs tied to clinical development milestones, the actual number of shares of common stock that may ultimately be issued upon vest is calculated by multiplying the number of PSUs by a payout percentage of 100%. The PSUs will vest, if at all, upon certification by the Compensation Committee of the Company’s Board of Directors of the actual achievement of the performance objectives, subject to specified change of control exceptions.

Stock-based compensation expense associated with PSUs is based on the fair value of the Company’s common stock on the grant date, which equals the closing market price of the Company’s common stock on the grant date. The Company recognizes compensation expense over the vesting period of the awards that are ultimately expected to vest.

New Accounting Pronouncements

(f) New Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU 2016-13, “Financial Instruments – Credit Losses (Topic 326). ASU 2016-13 prescribes an approach based on expected losses to estimate credit losses on certain financial instruments. It also modifies the impairment model for available-for-sale debt securities and provides for a simplified accounting model for purchased financial assets with credit deterioration since their origination. The amended guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within that reporting period, and early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within that reporting period. The amended guidance is to be applied using a modified retrospective approach, which requires application of the guidance at the beginning of the earliest comparative period presented in the year of adoption. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 simplifies several aspects of the accounting for share-based payment award transactions. Changes that may impact public companies include changes in the accounting for income taxes, specifically excess tax benefits and tax deficiencies; the classification of excess tax benefits on the statement of cash flows as an operating activity; the option for companies to make an entity-wide accounting policy election to either estimate the number of share-based payment awards that are expected to vest (current GAAP) or account for forfeitures when they occur; and the classification of employee taxes paid when an employer withholds shares for tax withholding purposes as a financing activity on the statement of cash flows. Depending on the specific item to be changed, ASU 2016-09 requires certain changes to be applied either prospectively, retrospectively, or under a modified retrospective transition method to all periods presented. The amended guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, and early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-05, “Derivatives and Hedging (Topic 815): Effect of Derivative Contract Novations on Existing Hedge Accounting Relationships.” ASU 2016-05 clarifies that a change in the counterparty to a derivative instrument that has been designated as the hedging instrument under Topic 815 does not, in and of itself, require dedesignation of that hedging relationship provided that all other hedge accounting criteria continue to be met. The amended guidance is effective for fiscal years beginning after December 15, 2016, including interim periods within that reporting period, with the option to apply the amended guidance on either a prospective basis or a modified retrospective basis, and early adoption is permitted. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” ASU 2016-02 includes a lessee accounting model that recognizes two types of leases - finance leases and operating leases. The standard requires that a lessee recognize on the balance sheet a right-to-use asset and a lease liability for all leases with lease terms of more than 12 months. The recognition, measurement, and presentation of expenses and cash flows arising from a lease by a lessee will depend on its classification as either a finance or operating lease. ASU 2016-02 also requires new qualitative and quantitative disclosures for the amount, timing, and uncertainty of cash flows arising from leases. The amended guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within that reporting period, and early adoption is permitted. ASU 2016-02 requires modified retrospective transition, which requires application of the guidance at the beginning of the earliest comparative period presented in the year of adoption; however, for all leases that commenced before the effective date, companies can elect not to reassess certain elements, including their lease classification or whether contracts are or contain embedded leases. The Company is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, a comprehensive new revenue recognition standard that will supersede the existing revenue recognition guidance. The new accounting guidance creates a framework by which an entity will allocate the transaction price to separate performance obligations and recognize revenue when (or as) each performance obligation is satisfied. Under the new standard, entities will be required to use judgment and make estimates, including identifying performance obligations in a contract, estimating the amount of variable consideration to include in the transaction price, allocating the transaction price to each separate performance obligation and determining when an entity satisfies its performance obligations. The standard allows for either “full retrospective” adoption, meaning that the standard is applied to all of the periods presented with a cumulative catch-up as of the earliest period presented, or “modified retrospective” adoption, meaning the standard is applied only to the most current period presented in the financial statements with a cumulative catch-up as of the current period. In August 2015, the effective date of the new revenue standard was delayed by one year to December 15, 2017 for annual reporting periods beginning after that date. The FASB also agreed to permit early adoption of the standard, but not before the original effective date of December 15, 2016. In March 2016, the FASB issued ASU 2016-08, “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” to clarify ASU 2014-09 implementation guidance on principal versus agent considerations. In April 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing” to clarify ASU 2014-09 implementation guidance on identifying performance obligations and licensing arrangements. In April 2016, the FASB issued ASU 2016-12, “Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients” to clarify that an entity that retrospectively applies the guidance in Topic 606 to each prior reporting period is not required to disclose the effect of the accounting change for the period of adoption. However, an entity is still required to disclose the effect of the changes on any prior periods retrospectively adjusted. The Company has not yet selected a transition method and is currently evaluating the effect that the updated standard will have on its consolidated financial statements and related disclosures.

Available for Sale Securities Policy

The Company considers all highly liquid investments with a remaining maturity of three months or less at the time of purchase to be cash equivalents. The Company considers all highly liquid investments with a remaining maturity at the time of purchase of more than three months but no longer than 12 months to be short-term investments, and those with a remaining maturity at the time of purchase of longer than 12 months to be long-term investments. The Company classifies its investments as available-for-sale securities and reports them at fair value with related unrealized gains and losses included as a component of comprehensive income. The amortized cost of debt securities in this category is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in other income (expense), net, 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 other income (expense), net. 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 other income (expense), net.

Intangible Assets and Goodwill Policy

Intangible assets consist of in-process research and development, or IPR&D, acquired from business acquisitions. The Company accounts for IPR&D as indefinite-lived intangible assets until regulatory approval or discontinuation of the related R&D efforts. Upon obtaining regulatory approval, the Company reclassifies the IPR&D as a definite-lived intangible asset and determines the economic life for amortization purposes. The Company assesses the impairment of indefinite-lived intangible assets and goodwill on an annual basis or more frequently whenever events or changes in circumstances may indicate that the carrying value might not be recoverable.

Litigation

The Company is party to legal proceedings, investigations, and claims in the ordinary course of its business, including the matters described below. The Company records accruals for outstanding legal matters when it believes that it is both probable that a liability has been incurred and the amount of such liability can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in significant legal matters that could affect the amount of any accrual and developments that would make a loss contingency both probable and reasonably estimable. To the extent new information is obtained and the Company’s views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company’s accrued liabilities would be recorded in the period in which such determination is made. In addition, in accordance with the relevant authoritative guidance, for matters for which the likelihood of material loss is at least reasonably possible, the Company provides disclosure of the possible loss or range of loss; however, if a reasonable estimate cannot be made, the Company will provide disclosure to that effect. Gain contingencies, if any, are recorded when they are realized.

Net Income (Loss) Per Share Policy

The computation of basic net income (loss) per common share is based on the weighted-average number of common shares outstanding during each period. The computation of diluted net income (loss) per common share is based on the weighted-average number of common shares outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, restricted stock units, performance share units, stock appreciation rights, ESPP shares, warrants, and shares issuable upon conversion of convertible debt.

In periods where the Company reports a net loss, all common stock equivalents are deemed anti-dilutive such that basic net loss per common share and diluted net loss per common share are equal.

Income Taxes Policy

The Company records a valuation allowance to reduce deferred tax assets to reflect the net amount that is more likely than not to be realized. Based upon the weight of available evidence at December 31, 2014, the Company determined that it was more likely than not that a portion of its deferred tax assets would be realizable and consequently released the valuation allowance against Federal and certain state net deferred tax assets during the fourth quarter of 2014. The decision to reverse a portion of the valuation allowance was made after management considered all available evidence, both positive and negative, including but not limited to the historical operating results, income or loss in recent periods, cumulative income in recent years, forecasted earnings, forecasted future taxable income, and significant risk and uncertainty related to forecasts. The release of the valuation allowance resulted in the recognition of certain deferred net tax assets and a decrease to income tax expense.

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Collaboration Agreement (Tables)

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Collaboration Revenue

(b) Collaboration Revenue

Collaboration revenue was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Collaboration revenue:
Related to U.S. XTANDI net sales	$	165,129	$	149,220	$	318,922	$	261,230
Related to ex-U.S. XTANDI net sales		41,036		25,591		69,740		41,358
Related to upfront and milestone payments		—		846		—		2,257
Total	$	206,165	$	175,657	$	388,662	$	304,845

Schedule of Collaboration Revenue Related to U.S. XTANDI Net Sales

Collaboration revenue related to U.S. XTANDI net sales was as follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2016			2015			2016			2015
U.S. XTANDI net sales (as reported by Astellas)	$	330,257		$	298,440		$	637,843		$	522,460
Shared U.S. development and commercialization costs		(95,055	)		(84,947	)		(225,639	)		(195,260	)
Pre-tax U.S. profit	$	235,202		$	213,493		$	412,204		$	327,200
Medivation’s share of pre-tax U.S. profit	$	117,601		$	106,747		$	206,102		$	163,600
Reimbursement of Medivation’s share of shared U.S. costs		47,528			42,473			112,820			97,630
Collaboration revenue related to U.S. XTANDI net sales	$	165,129		$	149,220		$	318,922		$	261,230

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of Classification and Fair values of Derivative Instruments on Unaudited Condensed Consolidated Balance Sheet

The following table summarizes the classification and fair values of derivative instruments on the Company’s unaudited condensed consolidated balance sheet:

	June 30, 2016
	Asset Derivatives				Liability Derivatives
	Classification		Fair Value		Classification		Fair Value
Derivatives designated as hedges:
Foreign currency exchange contracts		Other current assets	$	368		Other current liabilities	$	(1,247	)
Foreign currency exchange contracts		Other non-current assets		35		Other non-current liabilities		—
Total derivatives designated as hedges				403				(1,247	)
Derivatives not designated as hedges:
Foreign currency exchange contracts		Other current assets		—		Other current liabilities		(222	)
Total derivatives not designated as hedges				—				(222	)
Total derivatives			$	403			$	(1,469	)

Summary of the Effect of Foreign Currency Exchange Contracts on Unaudited Condensed Consolidated Financial Statements

The following table summarizes the effect of the Company’s foreign currency exchange contracts on its unaudited condensed consolidated financial statements:

	Three Months Ended			Six Months Ended
	June 30, 2016			June 30, 2016
Derivatives designated as hedges:
Gains (losses) recognized in accumulated OCI (effective portion)	$	(574	)	$	(1,066	)
Gains (losses) reclassified from accumulated OCI into collaboration revenue (effective portion)		(222	)		(222	)
Gains (losses) recognized in other income (expense), net		—			—

Summary of Potential Effect of Offsetting Derivatives by Type of Financial Instrument on Unaudited Condensed Consolidated Balance Sheets

The following table summarizes the potential effect of offsetting derivatives by type of financial instrument on the Company’s unaudited condensed consolidated balance sheet:

June 30, 2016
Offsetting of Derivative Assets/Liabilities
									Gross Amounts Not Offset in the Condensed Consolidated Balance Sheet
Description	Gross Amounts of Recognized Assets/Liabilities			Gross Amounts Offset in the Condensed Consolidated Balance Sheet		Amounts of Assets/Liabilities Presented in the Condensed Consolidated Balance  Sheet			Derivative Financial Instruments		Cash Collateral Received/Pledged		Net Amount (Legal Offset)
Derivative assets	$	403			—	$	403			—		—	$	403
Derivative liabilities	$	(1,469	)		—	$	(1,469	)		—		—	$	(1,469	)

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Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Financial Assets and Liabilities Measured at Fair Value on Recurring Basis

The following table presents the Company’s financial assets and liabilities that are measured at fair value on a recurring basis:

			Fair Value Measurements Using:
	Fair Value		Level 1		Level 2		Level 3
June 30, 2016:
Short-term investments:
Corporate debt securities	$	43,465		—	$	43,465		—
Certificates of deposit	$	10,000		—	$	10,000		—
Commercial paper	$	3,965		—	$	3,965		—
U.S. Government securities	$	2,002		—	$	2,002		—
Current assets:
Foreign currency derivative contracts	$	368		—	$	368		—
Long-term investments
Corporate debt securities	$	21,515		—	$	21,515		—
Non-current assets:
Foreign currency derivative contracts	$	35		—	$	35		—
Current liabilities:
Foreign currency derivative contracts	$	1,469		—	$	1,469		—
Contingent consideration	$	4,951		—		—	$	4,951
Non-current liabilities:
Contingent consideration	$	952,604		—		—	$	952,604
December 31, 2015:
Current liabilities:
Contingent consideration	$	4,900		—		—	$	4,900
Non-current liabilities:
Contingent consideration	$	262,368		—		—	$	262,368

Fair Value Adjustments Related to Contingent Consideration Liabilities

The following table presents fair value adjustments related to contingent consideration liabilities recorded by the Company for the periods presented:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016		2015			2016		2015
Fair value adjustments:
BioMarin contingent consideration liability:
Increase to R&D expense	$	8,632	$	—		$	9,124	$	—
Increase to SG&A expense		673,983		—			676,468		—
Total BioMarin fair value adjustments		682,615		—			685,592		—
CureTech contingent consideration liability:
Increase (decrease) to R&D expense		365		(70	)		1,013		930
Increase to SG&A expense		1,348		1,083			3,682		4,083
Total CureTech fair value adjustments		1,713		1,013			4,695		5,013
Total fair value adjustments, net	$	684,328	$	1,013		$	690,287	$	5,013

Schedule of Roll-forward of Fair Value of Level 3 Instruments

The following table includes a roll-forward of the fair value of Level 3 financial instruments for the periods presented:

	Three Months Ended		Six Months Ended
	June 30, 2016		June 30, 2016
Contingent consideration (current and non-current):
Balance at beginning of period	$	273,227	$	267,268
Amounts acquired or issued		—		—
Net change in fair value		684,328		690,287
Settlements		—		—
Transfers in and/or out of Level 3		—		—
Balance at end of period	$	957,555	$	957,555

Fair Value of Other Financial Instruments Not Measured on Recurring Basis

The following table presents the total balance of the Company’s other financial instruments that are not measured at fair value on a recurring basis:

			Fair Value Measurements Using:
	Total Balance		Level 1		Level 2		Level 3
June 30, 2016:
Assets:
Bank deposits (included in “Cash and cash equivalents”)	$	267,761	$	267,761		—		—
December 31, 2015:
Assets:
Bank deposits (included in “Cash and cash equivalents”)	$	225,853	$	225,853		—		—
Liabilities:
Borrowings under Revolving Credit Facility	$	75,000	$	75,000		—		—

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Available-For-Sale Securities (Tables)

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Summarizes Available-for-Sale Securities

The following table summarizes the Company’s available-for-sale securities at June 30, 2016:

	June 30, 2016
	Amortized		Gross Unrealized					Fair
	Cost		Gains		Losses			Value
Short-term investments:
Corporate debt securities	$	43,455	$	21	$	(11	)	$	43,465
Certificates of deposit		10,000		—		—			10,000
Commercial paper		3,965		—		—			3,965
U.S. Government securities		2,001		1		—			2,002
Total short-term investments		59,421		22		(11	)		59,432
Long-term investments:
Corporate debt securities		21,536		10		(31	)		21,515
Total long-term investments		21,536		10		(31	)		21,515
Total available-for-sale securities	$	80,957	$	32	$	(42	)	$	80,947

Summarizes of Available-for-Sale Securities by Contractual Maturity

The following table summarizes the Company’s portfolio of available-for-sale securities by contractual maturity:

	June 30, 2016
	Amortized Cost		Fair Value
Less than one year	$	59,421	$	59,432
Greater than one year but less than five years		21,536		21,515
Total	$	80,957	$	80,947

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Intangible Assets and Goodwill (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Summary of Indefinite-lived Intangible Assets

The following table summarizes the Company’s indefinite-lived intangible assets:

	June 30,		December 31,
	2016		2015
Indefinite-lived intangible asset – MDV3800	$	573,299	$	573,299
Indefinite-lived intangible asset – MDV9300		75,500		71,000
Total	$	648,799	$	644,299

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Other Balance Sheet Items (Tables)

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net, consisted of the following:

	June 30, 2016			December 31, 2015
Leasehold improvements	$	26,658		$	19,074
Computer equipment and software		20,194			16,083
Build-to-suit property		18,371			18,371
Construction in progress		6,446			14,440
Furniture and fixtures		6,014			5,714
Laboratory equipment		4,472			748
		82,155			74,430
Less: Accumulated depreciation		(21,161	)		(16,288	)
Total	$	60,994		$	58,142

Accounts Payable, Accrued Expenses and Other Current Liabilities

Accounts payable, accrued expenses and other current liabilities consisted of the following:

	June 30, 2016		December 31, 2015
Clinical and preclinical	$	44,749	$	48,975
Accrued professional services and other current liabilities		24,893		14,282
Payroll and payroll-related		22,980		29,215
Royalties payable		22,740		20,665
Accounts payable		19,664		22,696
Taxes payable		—		32,565
Other payable to licensor		—		17,500
Interest payable		—		305
Total	$	135,026	$	186,203

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Subsequent Event (Tables)

6 Months Ended

Jun. 30, 2016

Schedule of Future Operating Lease Obligations

Future operating lease obligations as of June 30, 2016 are as follows:

Years Ending December 31,	Operating Leases
Remainder of 2016	$	4,707
2017		9,542
2018		9,743
2019		5,065
2020		—
2021 and thereafter		—
Total minimum lease payments	$	29,057

Seventh Amendment To Lease Agreement [Member]

Schedule of Future Operating Lease Obligations

The future operating lease obligations from this amendment are as follows:

Years Ending December 31,	Operating Lease
Remainder of 2016	$	—
2017		1,938
2018		2,383
2019		2,455
2020		2,528
2021 and thereafter		9,465
Total minimum lease payments	$	18,769

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Lease Cash Payments under Build to Suit Lease

Expected future lease payments under the build-to-suit lease as of June 30, 2016 are as follows:

Years Ending December 31,	Expected Cash Payments Under Build- To-Suit Lease Obligation
Remainder of 2016	$	1,100
2017		2,244
2018		2,311
2019		2,380
2020		2,452
2021 and thereafter		9,627
Total minimum lease payments	$	20,114

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Stockholders' Equity (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Schedule of Stock-Based Compensation Expense

Stock-based compensation expense was as follows:

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2016		2015		2016		2015
Stock-based compensation expense recognized as:
R&D expense	$	5,858	$	6,109	$	11,895	$	11,920
SG&A expense		8,836		7,969		17,010		15,530
Total	$	14,694	$	14,078	$	28,905	$	27,450

Summary of Changes in Accumulated Other Comprehensive Income (Loss)

The following table summarizes the changes in accumulated other comprehensive loss by component, net of tax:

	Unrealized Gains and Losses on Cash Flow Hedges			Unrealized Gains and Losses on Available-for-Sale Securities			Total
Balance at December 31, 2015		—			—			—
Other comprehensive loss before reclassifications	$	(687	)	$	(6	)	$	(693	)
Amounts reclassified from other comprehensive loss		143			—			143
Net current period other comprehensive loss		(544	)		(6	)		(550	)
Balance at June 30, 2016	$	(544	)	$	(6	)	$	(550	)

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Net Income (Loss) Per Common Share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Calculation of Diluted Net Income Per Common Share

The following table reconciles the numerator and denominator used to calculate diluted net income (loss) per common share:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2016			2015		2016			2015
Numerator:
Net income (loss)	$	(403,922	)	$	25,826	$	(399,106	)	$	22,708
Denominator:
Weighted-average common shares, basic		164,926			158,505		164,586			157,576
Dilutive effect of common stock equivalents		—			10,185		—			5,419
Weighted-average common shares, diluted		164,926			168,690		164,586			162,995

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Description of Business - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2016 Product
XTANDI [Member]
Organization And Description Of Business [Line Items]
Number of commercial products	1
Collaborative agreement [Member] | Astellas Pharma Inc. [Member]
Organization And Description Of Business [Line Items]
Range of percentage rates for royalties received on ex-U.S. net sales, as defined by collaboration agreement	Low teens to the low twenties

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Summary of Significant Accounting Policies - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2016 Segment
Schedule Of Summary Of Significant Accounting Policies [Line Items]
Number of operating business segment	1
Revenue Goals [Member] | Performance Share Units [Member] | Minimum [Member]
Schedule Of Summary Of Significant Accounting Policies [Line Items]
Payout percentage of PSUs	50.00%
Revenue Goals [Member] | Performance Share Units [Member] | Maximum [Member]
Schedule Of Summary Of Significant Accounting Policies [Line Items]
Payout percentage of PSUs	150.00%
Clinical Development Milestones [Member] | Performance Share Units [Member]
Schedule Of Summary Of Significant Accounting Policies [Line Items]
Payout percentage of PSUs	100.00%

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Collaboration Agreement - Collaboration Agreements with Astellas - Additional Information (Detail) - Astellas Pharma Inc. [Member] - USD ($)	3 Months Ended	6 Months Ended
	Dec. 31, 2009	Jun. 30, 2016
Up-front cash payment arrangement [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Non-refundable, upfront cash payment	$ 110,000,000
Development milestone payments [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Eligible to receive milestone payments		$ 335,000,000
Sales milestone payments [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Eligible to receive milestone payments		$ 320,000,000
Collaborative agreement [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Range of percentage rates for royalties received on ex-U.S. net sales, as defined by collaboration agreement		Low teens to the low twenties
Collaborative agreement [Member] | Minimum [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Beneficial ownership percentage of voting securities		5.00%

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Collaboration Agreement - Schedule of Collaboration Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Related to XTANDI net sales	$ 165,129	$ 149,220	$ 318,922	$ 261,230
Related to upfront and milestone payments		846		2,257
Collaboration revenue	206,165	175,657	388,662	304,845
Collaborative agreement [Member] | XTANDI [Member] | U.S. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Related to XTANDI net sales	165,129	149,220	318,922	261,230
Collaborative agreement [Member] | XTANDI [Member] | ex-U.S. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Related to XTANDI net sales	$ 41,036	$ 25,591	$ 69,740	$ 41,358

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Collaboration Agreement - Collaboration Revenue and Collaboration Receivables - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaboration revenue percentage of U.S. XTANDI net sales	50.00%	50.00%	50.00%	50.00%
Amortization of deferred upfront and development milestones		$ 846		$ 2,257
Astellas Pharma Inc. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Development cost-sharing payments	$ 15,100	17,600	$ 28,400	31,400
Commercialization cost-sharing payments	$ 4,500	2,700	$ 23,300	22,800
Astellas Pharma Inc. [Member] | Amortization of deferred upfront and development milestones [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Amortization of deferred upfront and development milestones		$ 846		$ 2,257
Development cost-sharing payments [Member] | Collaborative agreement [Member] | Medivation Inc [Member] | U.S. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Share of XTANDI development and commercialization costs			50.00%
Development cost-sharing payments [Member] | Collaborative agreement [Member] | Medivation Inc [Member] | ex-U.S. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Share of XTANDI development and commercialization costs			33.33%
Commercial cost sharing-payments [Member] | Astellas Pharma Inc. [Member] | Collaborative agreement [Member] | U.S. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Share of XTANDI development and commercialization costs			50.00%
Commercial cost sharing-payments [Member] | Astellas Pharma Inc. [Member] | Collaborative agreement [Member] | ex-U.S. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Share of XTANDI development and commercialization costs			66.67%

XML

Collaboration Agreement - Schedule of Collaboration Revenue Related to U.S. XTANDI Net Sales (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaboration revenue related to U.S. XTANDI net sales	$ 165,129	$ 149,220	$ 318,922	$ 261,230
U.S. [Member] | XTANDI [Member] | Collaborative agreement [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Collaboration revenue related to U.S. XTANDI net sales	165,129	149,220	318,922	261,230
U.S. [Member] | XTANDI [Member] | Collaborative agreement [Member] | Astellas Pharma Inc. [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
U.S. XTANDI net sales (as reported by Astellas)	330,257	298,440	637,843	522,460
Shared U.S. development and commercialization costs	(95,055)	(84,947)	(225,639)	(195,260)
Pre-tax U.S. profit	235,202	213,493	412,204	327,200
U.S. [Member] | XTANDI [Member] | Collaborative agreement [Member] | Medivation [Member]
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]
Medivation's share of pre-tax U.S. profit	117,601	106,747	206,102	163,600
Reimbursement of Medivation's share of shared U.S. costs	$ 47,528	$ 42,473	$ 112,820	$ 97,630

XML

Derivative Financial Instruments - Additional Information (Detail) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2016 USD ($) Derivative	Jun. 30, 2016 USD ($) Derivative
Derivatives Fair Value [Line Items]
Gains (losses) recognized in other income (expense) ineffectiveness	$ 0	$ 0
Foreign currency exchange contracts [Member]
Derivatives Fair Value [Line Items]
Notional amounts	4,800	4,800
Credit risk derivative liabilities, at fair value	$ 1,500	$ 1,500
Number of financial instrument | Derivative	1	1
Foreign currency exchange contracts [Member] | Derivatives designated as hedges [Member]
Derivatives Fair Value [Line Items]
Derivative instrument maturity		have maturity dates of 15 months or less
Foreign currency forward contracts [Member]
Derivatives Fair Value [Line Items]
Number of contract per quarter | Derivative	8	8

XML

Derivative Financial Instruments - Summary of Classification and Fair values of Derivative Instruments on Unaudited Condensed Consolidated Balance Sheet (Detail) $ in Thousands	Jun. 30, 2016 USD ($)
Derivatives Fair Value [Line Items]
Asset Derivatives, Fair Value	$ 403
Liability Derivatives, Fair Value	(1,469)
Derivatives designated as hedges [Member]
Derivatives Fair Value [Line Items]
Asset Derivatives, Fair Value	403
Liability Derivatives, Fair Value	(1,247)
Derivatives designated as hedges [Member] | Foreign currency exchange contracts [Member] | Other current liabilities [Member]
Derivatives Fair Value [Line Items]
Liability Derivatives, Fair Value	(1,247)
Derivatives designated as hedges [Member] | Foreign currency exchange contracts [Member] | Other Current Assets [Member]
Derivatives Fair Value [Line Items]
Asset Derivatives, Fair Value	368
Derivatives designated as hedges [Member] | Foreign currency exchange contracts [Member] | Other Noncurrent Assets [Member]
Derivatives Fair Value [Line Items]
Asset Derivatives, Fair Value	35
Not Designated as Hedging Instrument [Member]
Derivatives Fair Value [Line Items]
Liability Derivatives, Fair Value	(222)
Not Designated as Hedging Instrument [Member] | Foreign currency exchange contracts [Member] | Other current liabilities [Member]
Derivatives Fair Value [Line Items]
Liability Derivatives, Fair Value	$ (222)

XML

Derivative Financial Instruments - Summary of the Effect of Foreign Currency Exchange Contracts on Condensed Consolidated Financial Statements (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Gains (losses) recognized in accumulated OCI (effective portion)	$ (574)	$ (1,066)
Gains (losses) reclassified from accumulated OCI into collaboration revenue (effective portion)	(222)	(222)
Gains (losses) recognized in other income (expense), net	$ 0	$ 0

XML

Derivative Financial Instruments - Summary of Potential Effect of Offsetting Derivatives by Type of Financial Instrument on Unaudited Condensed Consolidated Balance Sheets (Detail) $ in Thousands	Jun. 30, 2016 USD ($)
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Gross Amounts of Recognized Assets	$ 403
Gross Amounts offset	0
Amount of Assets	403
Derivative Financial Instruments	0
Cash Collateral Received/Pledged	0
Net Amounts	403
Gross Amounts of Recognized Liabilities	(1,469)
Gross Amounts offset	0
Amount of Liabilities	(1,469)
Derivative Financial Instruments	0
Cash Collateral Received/Pledged	0
Net Amounts	$ (1,469)

XML

Fair Value Disclosures - Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration, current liabilities	$ 4,951	$ 4,900
Contingent consideration, long-term liabilities	952,604	262,368
Level 2 [Member] | Corporate Debt Securities [Member] | Short-term Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	43,465
Level 2 [Member] | Corporate Debt Securities [Member] | Long Term Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	21,515
Level 2 [Member] | Commercial Paper [Member] | Short-term Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	3,965
Level 2 [Member] | Certificates of Deposit [Member] | Short-term Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	10,000
Level 2 [Member] | US Treasury Securities [Member] | Short-term Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	2,002
Level 2 [Member] | Other Current Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivative contracts	368
Level 2 [Member] | Other Noncurrent Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivative contracts	35
Level 2 [Member] | Other current liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivative contracts	1,469
Level 3 [Member] | Other current liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration, current liabilities	4,951	4,900
Level 3 [Member] | Other non-current liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration, long-term liabilities	952,604	262,368
Fair Value [Member] | Corporate Debt Securities [Member] | Short-term Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	43,465
Fair Value [Member] | Corporate Debt Securities [Member] | Long Term Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	21,515
Fair Value [Member] | Commercial Paper [Member] | Short-term Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	3,965
Fair Value [Member] | Certificates of Deposit [Member] | Short-term Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	10,000
Fair Value [Member] | US Treasury Securities [Member] | Short-term Investments [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Investments	2,002
Fair Value [Member] | Other Current Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivative contracts	368
Fair Value [Member] | Other Noncurrent Assets [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivative contracts	35
Fair Value [Member] | Other current liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Foreign currency derivative contracts	1,469
Contingent consideration, current liabilities	4,951	4,900
Fair Value [Member] | Other non-current liabilities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration, long-term liabilities	$ 952,604	$ 262,368

XML

Fair Value Disclosures - Fair Value Adjustments Related to Contingent Consideration Liabilities (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Business Acquisition Contingent Consideration [Line Items]
Change in fair value of contingent purchase consideration	$ 684,328	$ 1,013	$ 690,287	$ 5,013
MDV3800 [Member]
Business Acquisition Contingent Consideration [Line Items]
Change in fair value of contingent purchase consideration	682,615		685,592
MDV3800 [Member] | R&D expense [Member]
Business Acquisition Contingent Consideration [Line Items]
Change in fair value of contingent purchase consideration	8,632		9,124
MDV3800 [Member] | SG&A expense [Member]
Business Acquisition Contingent Consideration [Line Items]
Change in fair value of contingent purchase consideration	673,983		676,468
MDV9300 [Member]
Business Acquisition Contingent Consideration [Line Items]
Change in fair value of contingent purchase consideration	1,713	1,013	4,695	5,013
MDV9300 [Member] | R&D expense [Member]
Business Acquisition Contingent Consideration [Line Items]
Change in fair value of contingent purchase consideration	365	(70)	1,013	930
MDV9300 [Member] | SG&A expense [Member]
Business Acquisition Contingent Consideration [Line Items]
Change in fair value of contingent purchase consideration	$ 1,348	$ 1,083	$ 3,682	$ 4,083

XML

Fair Value Disclosures - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2016 USD ($)
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Fair value of liabilities transferred from Level 1 to Level 2	$ 0
Fair value of liabilities transferred from Level 2 to Level 1	0
Fair value of assets transferred from Level 1 to Level 2	0
Fair value of assets transferred from Level 2 to Level 1	0
MDV9300 [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Milestone payment	$ 5,000,000
MDV9300 [Member] | Minimum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Percentage of royalty	5.00%
MDV9300 [Member] | Maximum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Percentage of royalty	11.00%
MDV9300 [Member] | Development Milestones [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Business acquisition maximum contingent consideration	$ 85,000,000
MDV9300 [Member] | Sales Milestones [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Business acquisition maximum contingent consideration	245,000,000
MDV3800 [Member] | Defined Regulatory and Sales-Based Milestones [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Business acquisition maximum contingent consideration	$ 160,000,000

XML

Fair Value Disclosures - Schedule of Roll-forward of Fair Value of Level 3 Instruments (Detail) - Level 3 [Member] - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2016
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance at beginning of period	$ 273,227	$ 267,268
Amounts acquired or issued	0	0
Net change in fair value	684,328	690,287
Settlements	0	0
Transfers in and/or out of Level 3	0	0
Balance at end of period	$ 957,555	$ 957,555

XML

Fair Value Disclosures - Fair Value of Other Financial Instruments Not Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Fair Value, Measurements, Nonrecurring [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Bank deposits (included in "Cash and cash equivalents")	$ 267,761	$ 225,853
Fair Value, Measurements, Nonrecurring [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Bank deposits (included in "Cash and cash equivalents")	$ 267,761	225,853
Revolving Credit Facility [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Borrowings under Revolving Credit Facility		75,000
Revolving Credit Facility [Member] | Fair Value, Measurements, Nonrecurring [Member] | Fair Value [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Borrowings under Revolving Credit Facility		75,000
Revolving Credit Facility [Member] | Fair Value, Measurements, Nonrecurring [Member] | Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Borrowings under Revolving Credit Facility		$ 75,000

XML

Available-For-Sale Securities - Summarizes Available for Sale Securities (Detail) $ in Thousands	Jun. 30, 2016 USD ($)
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	$ 80,957
Available-for-sale Securities, Gross Unrealized Gains	32
Available-for-sale Securities, Gross Unrealized Losses	(42)
Available-for-sale Securities, Fair Value	80,947
Short-term Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	59,421
Available-for-sale Securities, Gross Unrealized Gains	22
Available-for-sale Securities, Gross Unrealized Losses	(11)
Available-for-sale Securities, Fair Value	59,432
Short-term Investments [Member] | Commercial Paper [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	3,965
Available-for-sale Securities, Fair Value	3,965
Short-term Investments [Member] | Certificates of Deposit [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	10,000
Available-for-sale Securities, Fair Value	10,000
Short-term Investments [Member] | Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	43,455
Available-for-sale Securities, Gross Unrealized Gains	21
Available-for-sale Securities, Gross Unrealized Losses	(11)
Available-for-sale Securities, Fair Value	43,465
Short-term Investments [Member] | U.S. Government Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	2,001
Available-for-sale Securities, Gross Unrealized Gains	1
Available-for-sale Securities, Fair Value	2,002
Long Term Investments [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	21,536
Available-for-sale Securities, Gross Unrealized Gains	10
Available-for-sale Securities, Gross Unrealized Losses	(31)
Available-for-sale Securities, Fair Value	21,515
Long Term Investments [Member] | Corporate Debt Securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Available-for-sale Securities, Amortized Cost	21,536
Available-for-sale Securities, Gross Unrealized Gains	10
Available-for-sale Securities, Gross Unrealized Losses	(31)
Available-for-sale Securities, Fair Value	$ 21,515

XML

Available-For-Sale Securities - Additional Information (Detail) $ in Millions	Jun. 30, 2016 USD ($) Securities	Dec. 31, 2015 USD ($)
Amortized Cost and Fair Value Debt Securities [Abstract]
Available-for-sale securities		$ 0.0
Number of positions, available-for-sale securities in a gross unrealized loss position for less than twelve months | Securities	23
Available-for-sale securities in a gross unrealized loss position for less than twelve months, fair value	$ 26.2

XML

Available-For-Sale Securities - Summarizes of Available for Sale Securities by Contractual Maturity (Detail) $ in Thousands	Jun. 30, 2016 USD ($)
Amortized Cost and Fair Value Debt Securities [Abstract]
Due within one year, Available-for-sale Securities, Amortized Cost Basis	$ 59,421
Due after one year through five years, Available-for-sale Securities, Amortized Cost Basis	21,536
Available-for-sale Securities, Amortized Cost Basis	80,957
Due within one year, Available-for-sale Securities, Fair Value	59,432
Due after one year through five years, Available-for-sale Securities, Fair Value	21,515
Available-for-sale Securities, Fair Value	$ 80,947

XML

Intangible Assets and Goodwill - Summary of Indefinite-lived Intangible Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Acquired Indefinite Lived Intangible Assets [Line Items]
Indefinite-lived intangible asset, Carrying Amount	$ 648,799	$ 644,299
MDV3800 [Member]
Acquired Indefinite Lived Intangible Assets [Line Items]
Indefinite-lived intangible asset, Carrying Amount	573,299	573,299
MDV9300 [Member]
Acquired Indefinite Lived Intangible Assets [Line Items]
Indefinite-lived intangible asset, Carrying Amount	$ 75,500	$ 71,000

XML

Intangible Assets and Goodwill - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2016	Dec. 31, 2015
Goodwill And Intangible Assets Disclosure [Abstract]
Carrying amount of goodwill	$ 18,643	$ 18,643
In Process Research and Development [Member]
Goodwill And Intangible Assets Disclosure [Abstract]
Out-of-period adjustment	4,500
R&D expense [Member]
Goodwill And Intangible Assets Disclosure [Abstract]
Out-of-period adjustment	$ (4,500)

XML

Build-to-Suit Lease Obligation - Additional Information (Detail) $ in Thousands	3 Months Ended	6 Months Ended		12 Months Ended
	Jun. 30, 2015 ft²	Jun. 30, 2016 USD ($) ft²	Jun. 30, 2015 USD ($) ft²	Dec. 31, 2015 USD ($) ft²	Mar. 31, 2016 USD ($)	Dec. 31, 2013 ft²
Build To Suit Lease Obligation [Line Items]
Operating lease | ft²		158,000
Amounts capitalized under build-to-suit lease transactions			$ 283
Area of property surrendered | ft²				8,000
Derecognized portion of build-to-suit asset			$ 3,241	$ 3,200
Derecognized portion of build-to-suit lease obligation				3,200
Build-to-suit building, historical cost					$ 18,400
Total build-to-suit lease obligation, including current and non-current portions		$ 17,400
Build-to-suit lease obligation, excluding current portion		$ 17,244		17,406
Laboratory Space [Member]
Build To Suit Lease Obligation [Line Items]
Operating lease | ft²	44,000		44,000			52,000
Lease expiry period		August 2024
Build to suit lease extension term	5 years
Build-to-suit Lease Property and Equipment [Member]
Build To Suit Lease Obligation [Line Items]
Amounts capitalized under build-to-suit lease transactions				14,500
Tenant Improvements [Member]
Build To Suit Lease Obligation [Line Items]
Amounts capitalized under build-to-suit lease transactions				3,600
Capitalized Interest Cost [Member]
Build To Suit Lease Obligation [Line Items]
Amounts capitalized under build-to-suit lease transactions				$ 3,500

XML

Other Balance Sheet Items - Schedule of Property and Equipment, Net (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 82,155	$ 74,430
Less: Accumulated depreciation	(21,161)	(16,288)
Total	60,994	58,142
Leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	26,658	19,074
Build-to-suit property [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	18,371	18,371
Computer equipment and software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	20,194	16,083
Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	6,014	5,714
Construction in progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	6,446	14,440
Laboratory equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 4,472	$ 748

XML

Other Balance Sheet Items - Components of Accounts Payable, Accrued Expenses and Other Current Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2016	Dec. 31, 2015
Payables and Accruals [Abstract]
Clinical and preclinical	$ 44,749	$ 48,975
Accrued professional services and other current liabilities	24,893	14,282
Payroll and payroll-related	22,980	29,215
Royalties payable	22,740	20,665
Accounts payable	19,664	22,696
Taxes payable		32,565
Other payable to licensor		17,500
Interest payable		305
Total	$ 135,026	$ 186,203

XML

Debt - Additional Information (Detail) - USD ($)	1 Months Ended			3 Months Ended		6 Months Ended		12 Months Ended
	Jan. 31, 2016	Oct. 31, 2015	Mar. 31, 2012	Sep. 30, 2015	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Debt Instrument [Line Items]
Repayment of outstanding credit facility						$ 75,000,000
Line of credit facility, interest rate description						The interest rate for this borrowing was 2.1250% and was applied on an actual/360 day basis.
Debt issuance costs						$ 1,700,000
Aggregate principal amount of convertible notes settled					$ 167,800,000		$ 167,800,000
Principal settlement amount							90,994,000
Non-cash loss on extinguishment of Convertible Notes					7,868,000		7,871,000
Senior Notes [Member] | Convertible Notes Due 2017 [Member]
Debt Instrument [Line Items]
Convertible Notes, payment terms						The Company was required to pay interest semi-annually in arrears on April 1 and October 1 of each year.
Convertible Notes, aggregate principal amount			$ 258,800,000
Convertible Notes, interest rate			2.625%
Convertible Notes, maturity date			Apr. 01, 2017
Aggregate principal amount of convertible notes settled				$ 167,800,000	91,000,000		$ 91,000,000
Principal settlement amount				$ 167,800,000	$ 92,100,000
Common stock, shares issued on redemption of convertible notes				3,539,218	2,099,358
Non-cash loss on extinguishment of Convertible Notes				$ 13,200,000	$ 7,900,000
Forfeited accrued interest payable reclassified to additional paid-in capital								$ 1,700,000
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument term		5 years
Line of credit facility, maximum borrowing capacity		$ 300,000,000
Proceeds from borrowings under Revolving Credit Facility		$ 75,000,000
Line of credit facility, interest rate		2.125%
Repayment of outstanding credit facility	$ 75,000,000
Interest rate spread on base rate, description						(a) the LIBOR rate, plus an applicable margin ranging from 1.75% to 2.50% per annum, based upon the secured leverage ratio (as defined in the Credit Agreement) or (b) the prime lending rate, plus an applicable margin ranging from 0.75% to 1.50% per annum, based upon the senior secured net leverage ratio (as defined in the Credit Agreement).
Amount outstanding under Revolving Credit Facility						$ 0
Revolving Credit Facility [Member] | LIBOR [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest rate spread on base rate		1.75%
Revolving Credit Facility [Member] | LIBOR [Member] | Maximum [Member]
Debt Instrument [Line Items]
Interest rate spread on base rate		2.50%
Revolving Credit Facility [Member] | Prime Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Interest rate spread on base rate		0.75%
Revolving Credit Facility [Member] | Prime Rate [Member] | Maximum [Member]
Debt Instrument [Line Items]
Interest rate spread on base rate		1.50%
Revolving Credit Facility [Member] | Multicurrency Sub-facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 50,000,000
Revolving Credit Facility [Member] | Letter of Credit Sub-Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		20,000,000
Revolving Credit Facility [Member] | Swing Line Loan Sub-facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity		$ 10,000,000
Credit Agreement [Member]
Debt Instrument [Line Items]
Obligations under credit agreement, description						(i) all tangible and intangible assets of the Loan Parties, except for certain customary excluded assets, and (ii) all of the capital stock owned by the Loan Parties thereunder (limited, in the case of the stock of certain non-U.S. subsidiaries of the Company and Domestic Foreign Holding Companies, to 65% of the capital stock of such subsidiaries).
Percentage of capital stock						65.00%

XML

Commitments and Contingencies - Additional Information (Detail)	3 Months Ended			6 Months Ended
	Sep. 30, 2015 USD ($)	Jun. 30, 2015 USD ($)	Dec. 31, 2014 USD ($)	Jun. 30, 2016 USD ($) ft²
Commitments And Contingencies [Line Items]
Operating lease office space, in square feet | ft²				158,000
Lease expiry period				2019-12
Total consideration under current statement of work			$ 15,200,000
Partial payment consideration under current statement of work				$ 7,600,000
MDV9300 [Member]
Commitments And Contingencies [Line Items]
Manufacturing services and supply agreement period				3 years
Other research and development upfront and set up fees	$ 100,000	$ 200,000	$ 3,000,000
Potential payment upon completion of Manufacturing Technology Transfer				$ 5,000,000
Funding for clinical trial materials				$ 18,300,000
Funding period for clinical materials				3 years
Clinical trial materials amount paid				$ 12,000,000
Development milestone payments [Member]
Commitments And Contingencies [Line Items]
Aggregate milestone payments upon achievement of certain development and regulatory milestone events				$ 2,800,000
Percentage of sublicensing income				10.00%
Royalty percentage on sales				4.00%
Corporate Headquarters [Member]
Commitments And Contingencies [Line Items]
Operating lease office space, in square feet | ft²				143,000
Optional lease extension term				5 years

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Commitments and Contingencies - Schedule of Future Operating Lease Obligations (Detail) $ in Thousands	Jun. 30, 2016 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Operating Leases, Remainder of 2016	$ 4,707
Operating Leases, 2017	9,542
Operating Leases, 2018	9,743
Operating Leases, 2019	5,065
Operating Leases, 2020	0
Operating Leases, 2021 and thereafter	0
Total minimum lease payments	$ 29,057

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Commitments and Contingencies - Schedule of Future Lease Cash Payments under the Build to Suit Lease (Detail) $ in Thousands	Jun. 30, 2016 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Build-To-Suit Lease, Remainder of 2016	$ 1,100
Build-To-Suit Lease, 2017	2,244
Build-To-Suit Lease, 2018	2,311
Build-To-Suit Lease, 2019	2,380
Build-To-Suit Lease, 2020	2,452
Build-To-Suit Lease, 2021 and thereafter	9,627
Build-To-Suit Lease, Future Minimum Payments	$ 20,114

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Stockholders' Equity - Additional Information (Detail) - USD ($)	6 Months Ended	27 Months Ended
	Jun. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 04, 2006
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum percentage before exercise				20.00%
Number of shares available for issuance	7,400,000	7,400,000
Employee share purchase plan, percentage of fair market value of common stock at beginning of offering period	85.00%
Employee share purchase plan, percentage of fair market value of common stock on purchase date	85.00%
Eligible employee contributions	$ 25,000
Shares issued in period		397,536
Performance Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of PSU's granted	159,121
Period after performance is achieved to earn portion of eligible shares under award	1 year
Revenue Goals [Member] | Performance Share Units [Member] | Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Payout percentage of PSUs	50.00%	50.00%
Revenue Goals [Member] | Performance Share Units [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Payout percentage of PSUs	150.00%	150.00%
Clinical Development Milestones [Member] | Performance Share Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Payout percentage of PSUs	100.00%	100.00%
Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for issuance	49,300,000	49,300,000	47,700,000
ESPP [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for issuance	6,000,000	6,000,000

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Stockholders' Equity - Schedule of Stock-Based Compensation Expense (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation	$ 14,694	$ 14,078	$ 28,905	$ 27,450
R&D expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation	5,858	6,109	11,895	11,920
SG&A expense [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation	$ 8,836	$ 7,969	$ 17,010	$ 15,530

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Stockholders' Equity - Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Accumulated Other Comprehensive Income Loss [Line Items]
Balance at December 31, 2015			$ 872,679
Net current period other comprehensive loss	$ (233)	$ (34)	(550)	$ (34)
Balance at June 30, 2016	533,674		533,674
Unrealized Gains and Losses on Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Other comprehensive loss before reclassifications			(687)
Amounts reclassified from other comprehensive loss			143
Net current period other comprehensive loss			(544)
Balance at June 30, 2016	(544)		(544)
Accumulated Unrealized Gains (Losses) on Securities Available For Sale [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Other comprehensive loss before reclassifications			(6)
Net current period other comprehensive loss			(6)
Balance at June 30, 2016	(6)		(6)
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Other comprehensive loss before reclassifications			(693)
Amounts reclassified from other comprehensive loss			143
Net current period other comprehensive loss			(550)
Balance at June 30, 2016	$ (550)		$ (550)

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Net Income Per Common Share - Additional Information (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Disclosure - Net Income Per Common Share - Additional Information (Detail) [Line Items]
Aggregate principal amount of convertible notes settled		$ 167.8		$ 167.8
Conversion price, per share of common stock		$ 25.62		$ 25.62
Calculation of diluted net income per common share includes, effect of shares related to conversion spread of Convertible Notes		4.8
Convertible Debt Securities
Disclosure - Net Income Per Common Share - Additional Information (Detail) [Line Items]
Dilutive common shares excluded from net loss per common share computations				7.4
Net Loss [Member]
Disclosure - Net Income Per Common Share - Additional Information (Detail) [Line Items]
Dilutive common shares excluded from net loss per common share computations	13.4		13.4
Employee stock-based awards [Member]
Disclosure - Net Income Per Common Share - Additional Information (Detail) [Line Items]
Dilutive common shares excluded from net loss per common share computations		1.3		1.0

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Net Income Per Common Share - Calculation of Diluted Net Income Per Common Share (Detail) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Numerator:
Net income (loss)	$ (403,922)	$ 25,826	$ (399,106)	$ 22,708
Denominator:
Weighted-average common shares, basic	164,926	158,505	164,586	157,576
Dilutive effect of common stock equivalents	0	10,185	0	5,419
Weighted-average common shares, diluted	164,926	168,690	164,586	162,995

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Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Taxes [Line Items]
Income tax (expense) benefit	$ 222,217	$ (14,600)	$ 219,839	$ (12,820)
Loss on extinguishment of Convertible Notes, tax benefit		$ 2,800		$ 2,800
Effective tax rate	35.50%	36.10%	35.50%	36.10%
Excess tax benefits from stock-based compensation			$ 13,444	$ 13,572
Contingent Consideration, Advisory Mergers and Acquisitions Fees [Member]
Income Taxes [Line Items]
Other tax expense (benefit)	$ (236,400)		(2,200)
Asset Impairment Adjustment [Member]
Income Taxes [Line Items]
Other tax expense (benefit)			$ 1,600

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Subsequent Event - Additional Information (Detail) $ in Millions	1 Months Ended
	Jul. 31, 2016 USD ($) ft²	Jun. 30, 2016 ft²
Subsequent Event [Line Items]
Operating lease		158,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Operating lease	172,000
Lease expiry period	2024
Optional lease extension term	5 years
Subsequent Event [Member] | Seventh Amendment To Lease Agreement [Member]
Subsequent Event [Line Items]
Operating lease	29,000
Irrevocable standby letters of credit | $	$ 1.0

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Subsequent Event - Schedule of Future Minimum Rental Payments (Detail) - USD ($) $ in Thousands	Jul. 31, 2016	Jun. 30, 2016
Subsequent Event [Line Items]
Operating Leases, Remainder of 2016		$ 4,707
Operating Leases, 2017		9,542
Operating Leases, 2018		9,743
Operating Leases, 2019		5,065
Operating Leases, 2020		0
Operating Leases, Future Minimum Lease Payments		$ 29,057
Subsequent Event [Member] | Seventh Amendment To Lease Agreement [Member]
Subsequent Event [Line Items]
Operating Leases, Remainder of 2016	$ 0
Operating Leases, 2017	1,938
Operating Leases, 2018	2,383
Operating Leases, 2019	2,455
Operating Leases, 2020	2,528
Operating Leases, 2021 and thereafter	9,465
Operating Leases, Future Minimum Lease Payments	$ 18,769