Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Loss Before Provision for Income Taxes

Loss before provision for income taxes includes the following components (in thousands):

	Year Ended December 31,
	2012			2011			2010
Domestic	$	(174,258	)	$	(135,880	)	$	(39,321	)
Foreign		2,809			2,920			2,264
Loss before provision for income taxes	$	(171,449	)	$	(132,960	)	$	(37,057	)

Provision (Benefit) for Income Taxes

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

	Year Ended December 31,
	2012			2011		2010
Current:
Federal	$	(137	)	$	—	$	1
State		1			1		2
Foreign		1,029			921		698
Total Current		893			922		701
Deferred:
Federal		(422	)		—		—
State		(49	)		—		—
Foreign		(16	)		96		180
Total Deferred		(487	)		96		180
Provision for income taxes	$	406		$	1,018	$	881

Income Tax Provision Related to Continuing Operations

Income tax provision related to continuing operations differs from the amount computed by applying the statutory income tax rate of 35% to pretax loss as follows (in thousands):

	Year Ended December 31,
	2012			2011			2010
U.S. federal provision (benefit)
At statutory rate	$	(60,007	)	$	(46,536	)	$	(12,970	)
State taxes		(48	)		1			2
Change in valuation allowance		47,349			48,959			15,123
Foreign tax inclusion		6,510			—			—
Non-cash interest expense on liability related to sale of future royalties		6,320			—			—
Foreign tax differential		(227	)		(129	)		86
Unrecognized tax credits		(591	)		(893	)		(1,833	)
Other		1,100			(384	)		473
Provision for income taxes	$	406		$	1,018		$	881

Significant Components of Deferred Tax Assets and Liabilities

Significant components of our deferred tax assets for federal and state income taxes are as follows (in thousands):

	December 31,
	2012			2011
Deferred tax assets:
Net operating loss carryforwards	$	351,354		$	342,128
Research and other credits		52,769			51,125
Sale of future royalties		39,750			—
Deferred revenue		39,521			48,732
Stock-based compensation		23,746			19,268
Capitalized research expenses		7,192			9,514
Property and equipment		8,482			8,081
Reserves and accruals		8,776			8,083
Other		2,773			3,895
Deferred tax assets before valuation allowance		534,363			490,826
Valuation allowance for deferred tax assets		(534,268	)		(490,689	)
Total deferred tax assets		95			137
Deferred tax liabilities:
Property and equipment		—			(75	)
Total deferred tax liabilities		—			(75	)
Net deferred tax assets	$	95		$	62

Unrecognized Tax Benefits

We have the following activity relating to unrecognized tax benefits (in thousands):

	December 31,
	2012			2011		2010
Beginning balance	$	13,576		$	13,058	$	13,084
Tax positions related to current year
Additions:
Federal		289			297		259
State		302			221		208
Reductions		—			—		—
Tax positions related to prior year
Additions:
Federal		37			—		—
State		—			—		—
Reductions		—			—		(493	)
Settlements		—			—		—
Lapses in statute of limitations		(137	)		—		—
Ending balance	$	14,067		$	13,576	$	13,058