Document And Entity Information (USD $)	12 Months Ended
Document And Entity Information (USD $)	Dec. 31, 2011	Feb. 21, 2012	Jun. 30, 2011
Document And Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2011
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Entity Registrant Name	Jazz Pharmaceuticals plc
Entity Central Index Key	0001232524
Trading Symbol	jazz
Entity Filer Category	Large Accelerated Filer
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		56,243,783
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Well-known Seasoned Issuer	Yes
Entity Public Float			$ 769,138,777

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
ASSETS
Cash and cash equivalents	$ 82,076	$ 44,794
Marketable securities	75,822
Restricted cash		400
Accounts receivable, net of allowances of $366 and $482 at December 31, 2011 and 2010, respectively	34,374	22,081
Inventories	3,909	5,046
Prepaid expenses	1,690	1,858
Other current assets	1,260	279
Total current assets	199,131	74,458
Property and equipment, net	1,557	690
Intangible assets, net	14,585	22,033
Goodwill	38,213	38,213
Other long-term assets	87	335
Total assets	253,573	135,729
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	5,129	3,049
Accrued liabilities	34,783	23,572
Liability under government settlement	7,320	4,128
Purchased product rights liability	4,500	4,500
Revolving credit facility		7,350
Current portion of long-term debt		16,064
Deferred revenue, current	1,138	1,273
Total current liabilities	52,870	59,936
Purchased product rights liability, non-current		4,500
Liability under government settlement, non-current		6,978
Long-term debt, less current portion		24,629
Deferred rent		82
Deferred revenue, non-current	7,915	9,053
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, $0.0001 par value; 20,000 shares authorized; none outstanding
Common stock, $0.0001 par value; 150,000 shares authorized; 42,468 and 39,959 shares issued and outstanding at December 31, 2011 and 2010, respectively	4	4
Additional paid-in capital	542,697	505,413
Accumulated other comprehensive loss	(31)
Accumulated deficit	(349,882)	(474,866)
Total stockholders' equity	192,788	30,551
Total liabilities and stockholders' equity	$ 253,573	$ 135,729

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Per Share data, unless otherwise specified	Dec. 31, 2011	Dec. 31, 2010
Consolidated Balance Sheets [Abstract]
Accounts receivable, allowances	$ 366	$ 482
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	20,000	20,000
Preferred stock, shares outstanding	0	0
Common stock, par value per share	$ 0.0001	$ 0.0001
Common stock, shares authorized	150,000	150,000
Common stock, shares issued	42,468	39,959
Common stock, shares outstanding	42,468	39,959

Total number of shares of common stock held by shareholders. May be all or portion of the number of common shares authorized. These shares represent the ownership interest of the common shareholders. Shares outstanding equals shares issued minus shares held in treasury and other adjustments, if any.

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- Definition

Face amount or stated value per share of nonredeemable preferred stock (or preferred stock redeemable solely at the option of the issuer); generally not indicative of the fair market value per share.

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Consolidated Statements Of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Revenues:
Product sales, net	$ 266,518	$ 170,006	$ 115,108
Royalties and contract revenues	5,759	3,775	13,341
Total revenues	272,277	173,781	128,449
Operating expenses:
Cost of product sales (excluding amortization of acquired developed technology)	13,942	13,559	9,638
Selling, general and administrative	108,936	68,996	58,652
Research and development	14,120	25,612	36,561
Intangible asset amortization	7,448	7,825	7,668
Total operating expenses	144,446	115,992	112,519
Income from operations	127,831	57,789	15,930
Interest income and other, net	75	4	30
Interest expense (including $570 and $1,183 for the years ended December 31, 2010 and 2009, respectively, pertaining to a related party)	(1,675)	(12,728)	(22,796)
Loss on extinguishment of debt (including $701 for the year ended December 31, 2010 pertaining to a related party)	(1,247)	(12,287)
Net income (loss)	$ 124,984	$ 32,778	$ (6,836)
Net income (loss) per share:
Basic	$ 3.01	$ 0.90	$ (0.23)
Diluted	$ 2.67	$ 0.83	$ (0.23)
Weighted-average common shares used in computing net income (loss) per share:
Basic	41,499	36,343	30,018
Diluted	46,798	39,411	30,018

Consolidated Statements Of Stockholders' Equity (Deficit) (USD $) In Thousands, except Share data, unless otherwise specified	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Income [Member]	Accumulated Deficit [Member]	Total
Balance at Dec. 31, 2008	$ 3	$ 407,923	$ 4	$ (500,808)	$ (92,878)
Balance, shares at Dec. 31, 2008	28,925,000
Lapse of repurchase rights to shares issued under employment agreements		12,492			12,492
Modification of warrants to purchase common stock issued in conjunction with amended long-term debt		1,254			1,254
Stock issued/issuable under directors deferred compensation plan		243			243
Stock issued/issuable under directors deferred compensation plan, shares	4,000
Issuance of common stock in conjunction with exercise of stock options for cash and restricted stock units		40			40
Issuance of common stock in conjunction with exercise of stock options for cash and restricted stock units, shares	20,000
Issuance of common stock under employee stock purchase plan		348			348
Issuance of common stock under employee stock purchase plan, shares	410,000
Issuance of common stock in conjunction with offering, net of issuance costs		6,782			6,782
Issuance of common stock in conjunction with offering, net of issuance costs, shares	1,896,000				1,895,734
Stock-based compensation		5,729			5,729
Comprehensive income:
Net income (loss)				(6,836)	(6,836)
Unrealized loss on available-for-sale securities			(4)		(4)
Comprehensive income (loss)					(6,840)
Balance at Dec. 31, 2009	3	434,811		(507,644)	(72,830)
Balance, shares at Dec. 31, 2009	31,255,000
Stock issued/issuable under directors deferred compensation plan		198			198
Issuance of common stock in conjunction with exercise of stock options		3,682			3,682
Issuance of common stock in conjunction with exercise of stock options, shares	955,000
Issuance of common stock in conjunction with vesting of restricted stock units, shares	13,000
Issuance of common stock under employee stock purchase plan		529			529
Issuance of common stock under employee stock purchase plan, shares	520,000
Issuance of common stock in conjunction with offering, net of issuance costs	1	56,816			56,817
Issuance of common stock in conjunction with offering, net of issuance costs, shares	7,000,000				7,000,000
Issuance of common stock in conjunction with exercise of warrants		1,380			1,380
Issuance of common stock in conjunction with exercise of warrants, shares	216,000
Stock-based compensation		7,997			7,997
Comprehensive income:
Net income (loss)					32,778
Comprehensive income (loss)				32,778	32,778
Balance at Dec. 31, 2010	4	505,413		(474,866)	30,551
Balance, shares at Dec. 31, 2010	39,959,000				39,959,000
Stock issued/issuable under directors deferred compensation plan		368			368
Stock issued/issuable under directors deferred compensation plan, shares	13,000
Issuance of common stock in conjunction with exercise of stock options		12,214			12,214
Issuance of common stock in conjunction with exercise of stock options, shares	1,400,000
Issuance of common stock in conjunction with vesting of restricted stock units, shares	13,000
Issuance of common stock under employee stock purchase plan		1,546			1,546
Issuance of common stock under employee stock purchase plan, shares	359,000
Issuance of common stock in conjunction with exercise of warrants		2,659			2,659
Issuance of common stock in conjunction with exercise of warrants, shares	724,000
Stock-based compensation		20,497			20,497
Comprehensive income:
Net income (loss)				124,984	124,984
Unrealized loss on available-for-sale securities			(31)		(31)
Comprehensive income (loss)					124,953
Balance at Dec. 31, 2011	$ 4	$ 542,697	$ (31)	$ (349,882)	$ 192,788
Balance, shares at Dec. 31, 2011	42,468,000				42,468,000

Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009
Operating activities
Net income (loss)	$ 124,984	$ 32,778	$ (6,836)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation	379	886	1,429
Amortization of intangible assets	7,448	7,825	7,668
Loss on disposal of property and equipment	33	279	14
Stock-based compensation expense	20,704	8,219	5,957
Long-term debt, non-cash interest expense	394	2,406	2,810
Loss on extinguishment of debt	1,247	12,287
Changes in assets and liabilities:
Accounts receivable	(12,293)	(9,768)	(5,670)
Inventories	1,298	(1,644)	883
Prepaid expenses and other current assets	(934)	426	2,610
Other assets	186		(1,748)
Accounts payable	2,080	891	(3,578)
Accrued liabilities	11,211	9,276	(6,676)
Deferred revenue	(1,273)	(2,540)	(10,786)
Deferred rent	(82)	53	29
Liability under government settlement	(3,786)	(2,506)	(1,984)
Net cash provided by (used in) operating activities	151,596	58,868	(15,878)
Investing activities
Purchases of property and equipment	(1,279)	(731)	(53)
Purchase of product rights	(4,500)	(4,000)	(6,000)
Decrease (increase) in restricted cash	400	2,588	(1,075)
Purchases of marketable securities	(79,886)
Proceeds from maturities of marketable securities	4,033		1,004
Net cash used in investing activities	(81,232)	(2,143)	(6,124)
Financing activities
Repayment of long-term debt (including $6,816 for the year ended December 31, 2010 paid to a related party)	(41,668)	(127,828)
Payments of debt extinguishment costs (including $484 for the year ended December 31, 2010 paid to a related party)	(483)	(8,484)
Proceeds from offerings of common stock, net of issuance costs		56,817	6,782
Proceeds from issuance of long-term debt, net		48,427
Proceeds from employee stock purchases, exercise of stock options and warrants	16,419	5,591	388
Net (repayments under) proceeds from revolving credit facilities	(7,350)	(2,049)	5,524
Net cash (used in) provided by financing activities	(33,082)	(27,526)	12,694
Net increase (decrease) in cash and cash equivalents	37,282	29,199	(9,308)
Cash and cash equivalents, at beginning of period	44,794	15,595	24,903
Cash and cash equivalents, at end of period	82,076	44,794	15,595
Supplemental disclosure of cash flow information:
Cash paid for interest (including $461 and $1,349 for the years ended December 31, 2010 and 2009, respectively, paid to a related party)	1,621	10,234	24,488
Supplemental disclosure of non-cash investing and financing activities:
Liability for purchase of product rights			5,000
Warrants to purchase common stock			2,700
Modification to warrants to purchase common stock issued in conjunction with long-term debt			$ 1,254

Consolidated Statements Of Cash Flows (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
Repayment of long-term debt paid to a related party	$ 6,816
Cash paid for interest to related party	461	1,349
KKR [Member]
Debt extinguishment costs paid to a related party	$ 484

- Definition

The cash outflow for the payment of a long-term borrowing made from a related party where one party can exercise control or significant influence over another party; including affiliates, owners or officers and their immediate families, pension trusts, and so forth. Alternate caption: Payments for Advances from Affiliates.

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Organization And Description Of Business	12 Months Ended
Organization And Description Of Business	Dec. 31, 2011
Organization And Description Of Business [Abstract]
Organization And Description Of Business	1. Organization and Description of Business Jazz Pharmaceuticals, Inc. was incorporated in California in March 2003 and reincorporated in Delaware in January 2004. On January 18, 2012, the merger contemplated by the Agreement and Plan of Merger and Reorganization dated as of September 19, 2011, as amended, was consummated in connection with which Jazz Pharmaceuticals, Inc. became a wholly-owned subsidiary of Jazz Pharmaceuticals plc (previously known as Azur Pharma Public Limited Company, or Azur Pharma). Jazz Pharmaceuticals, Inc. is treated as the acquiring company in the merger for accounting purposes, and the merger is being accounted for as a reverse acquisition under the acquisition method of accounting for business combinations. For additional information regarding the merger see Note 15. Prior to the merger, Jazz Pharmaceuticals, Inc. was a specialty biopharmaceutical company focused on the identification, development and commercialization of pharmaceutical products to meet important unmet medical needs in focused therapeutic areas. Marketed products of Jazz Pharmaceuticals, Inc. consisted of Xyrem (sodium oxybate), which is the only product approved by the United States Food and Drug Administration, or FDA, for the treatment of both cataplexy and excessive daytime sleepiness in patients with narcolepsy, and Luvox CR (fluvoxamine maleate) marketed for the treatment of obsessive compulsive disorder. Except where specifically noted or the context otherwise requires, the use of terms such as "Jazz Pharmaceuticals", "we", "our" and "us" in these Notes to Consolidated Financial Statements refers to Jazz Pharmaceuticals, Inc.

Summary Of Significant Accounting Policies

12 Months Ended

Dec. 31, 2011

Summary Of Significant Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the accounts of Jazz Pharmaceuticals, Inc. (a wholly-owned subsidiary of Jazz Pharmaceuticals plc) and its wholly-owned subsidiaries, Orphan Medical, LLC, formerly Orphan Medical, Inc., or Orphan Medical, and JPI Commercial, LLC after elimination of intercompany transactions and balances. Our consolidated financial statements include the operations of an acquired business after the completion of the acquisition; accordingly these consolidated financial statements only include the accounts of Jazz Pharmaceuticals, Inc. for all periods presented because the merger was not effective until January 18, 2012.

Significant Risks and Uncertainties

We are subject to risks common to companies in the pharmaceutical industry with development and commercial operations including, but not limited to, risks and uncertainties related to commercial success and acceptance of our products by patients, physicians and payors, competition from branded and generic products, regulatory approvals, regulatory requirements, including those of the United States Food and Drug Administration, or FDA, and the United States Drug Enforcement Administration dependence on key customers and sole source suppliers and protection of intellectual property rights. In addition, most of our revenues are derived from sales of one product, Xyrem. During 2010, an abbreviated new drug application, or ANDA, was filed with the FDA by a third party seeking to market a generic form of Xyrem. We have sued that third party for infringement of our patents, and the litigation is ongoing. We cannot predict the timing or outcome of this litigation. If an ANDA for Xyrem is approved and a generic version of Xyrem is introduced, our sales of Xyrem would be adversely affected.

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts and disclosures reported in the consolidated financial statements and accompanying notes. Management bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

Concentrations of Risk

Financial instruments that potentially subject us to concentrations of credit risk consist of cash equivalents and marketable securities. Our investment policy permits investments in debt securities issued by the U.S. government or its agencies, corporate bonds or commercial paper issued by U.S. corporations, certain money market mutual funds, certain repurchase agreements, and tax-exempt obligations of states, agencies and municipalities and places restrictions on credit ratings, maturities, and concentration by type and issuer. We are exposed to credit risk in the event of a default by the financial institutions holding our cash, cash equivalents and marketable securities and issuers of investments to the extent recorded on the balance sheet.

We are also subject to credit risk from our accounts receivable related to our product sales. We monitor our exposure within accounts receivable and record a reserve against uncollectible accounts receivable as necessary. We extend credit to pharmaceutical wholesale distributors and a specialty pharmaceutical distribution company, primarily in the United States, and to international distributors. Customer creditworthiness is monitored and collateral is not required. Historically, we have not experienced significant credit losses on our accounts receivable. One customer, Express Scripts Specialty Distribution Services, Inc. and its affiliate CuraScript, Inc., or Express Scripts, accounted for 79% of gross accounts receivable as of both December 31, 2011 and December 31, 2010.

We rely on certain sole suppliers for drug substance and certain sole manufacturing partners for each of our marketed products and product candidates.

Cash Equivalents and Marketable Securities

We consider all highly liquid investments, readily convertible to cash, that mature within three months or less from date of purchase to be cash equivalents.

Marketable securities are investments in debt securities with maturities of less than one year from the balance sheet date, or securities with maturities of greater than one year that are specifically identified to fund current operations. Collectively, cash equivalents, restricted cash and marketable securities are considered available-for-sale and are recorded at fair value. Unrealized gains and losses, net of tax, are recorded in other comprehensive income and included as a separate component of stockholders' equity. We use the specific-identification method for calculating realized gains and losses on securities sold. Realized gains and losses and declines in value judged to be other than temporary on marketable securities are included in interest income in the statement of operations. Realized gains and losses on sales of marketable securities have not been significant.

Inventories

Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out method for all inventories. Our policy is to write down inventory that has become obsolete, inventory that has a cost basis in excess of its expected net realizable value and inventory in excess of expected requirements. The estimate of excess quantities is subjective and primarily dependent on our estimates of future demand for a particular product. If the estimate of future demand is too high, we may have to increase the reserve for excess inventory for that product and record a charge to cost of product sales. For product candidates that have not been approved by the FDA, inventory used in clinical trials is expensed at the time of production and recorded as research and development expense. For products that have been approved by the FDA, inventory used in clinical trials is expensed at the time the inventory is packaged for the clinical trial. Prior to receiving FDA approval costs related to purchases of the active pharmaceutical ingredient and the manufacturing of the product candidate are recorded as research and development expense. All direct manufacturing costs incurred after approval are capitalized into inventory.

Property and Equipment

Property and equipment are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which are three to five years. Leasehold improvements are amortized over the shorter of the noncancelable term of our operating lease or their economic useful lives. Maintenance and repairs are charged to operations as incurred.

Goodwill and Intangible Assets

Goodwill

Goodwill represents the excess of the purchase price over the fair value of assets acquired and liabilities assumed. We have determined that we operate in a single segment and have a single reporting unit associated with the development and commercialization of pharmaceutical products. The annual test for goodwill impairment is a two-step process. The first step is a comparison of the fair value of the reporting unit with its carrying amount, including goodwill. If this step indicates impairment, then in the second step, the loss is measured as the excess of recorded goodwill over its implied fair value. Implied fair value is the excess of the fair value of the reporting unit over the fair value of all identified assets and liabilities. Management tests goodwill for impairment annually in October and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

Intangible Assets

Intangible assets consist primarily of purchased developed technology and trademarks. Intangible assets are amortized on a straight-line basis over their estimated useful lives, which range from three to ten years. The estimated useful lives associated with intangible assets are consistent with the estimated lives of the associated products and may be modified when circumstances warrant. Once an intangible asset is fully amortized, the gross costs and accumulated amortization are removed from the consolidated balance sheet. We evaluate purchased intangibles and other long-lived assets, other than goodwill, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. The amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset.

Revenue Recognition

Revenues are recognized when there is persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed and determinable and collection is reasonably assured. Revenue from sales transactions where the buyer has the right to return the product is recognized at the time of sale only if (i) the seller's price to the buyer is substantially fixed or determinable at the date of sale, (ii) the buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product, (iii) the buyer's obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product, (iv) the buyer acquiring the product for resale has economic substance apart from that provided by the seller, (v) the seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer, and (vi) the amount of future returns can be reasonably estimated.

In evaluating arrangements with multiple elements we consider whether components of the arrangement represent separate units of accounting based upon whether certain criteria are met, including whether the delivered element has stand-alone value to the customer and whether there is objective and reliable evidence of the fair value of the undelivered items. This evaluation requires subjective determinations and requires management to make judgments about the fair value of individual elements and whether such elements are separable from other aspects of the contractual relationship. The consideration received in such arrangements is allocated among the separate units of accounting based on the relative selling price method under which the selling price for each deliverable is determined using vendor-specific objective evidence of selling price, if it exists; otherwise, third-party evidence of selling price. If vendor-specific objective evidence and third-party evidence of selling price are not available for a deliverable, we will use our best estimate of the selling price for that deliverable when applying the relative selling price method. The applicable revenue recognition criteria are applied to each of the separate units.

Payments received in advance of work performed or milestones achieved are recorded as deferred revenues and recognized when the service is provided or the milestone is achieved, as applicable.

Product Sales, Net

We sell Xyrem in the United States to a single central pharmacy, Express Scripts. We recognize revenues from sales of Xyrem within the United States upon transfer of title, which occurs when Express Scripts removes product from our consigned inventory location at its facility for shipment directly to a patient. We accept returns from Express Scripts of any product returned by patients to Express Scripts with defects that were not reasonably discoverable upon receipt of the consigned product by Express Scripts. Based on our experience over the past six years since we acquired the rights to Xyrem, product returns to Express Scripts from patients are rare. We provide Express Scripts with a credit for product returned by patients. During 2011, we issued credits totaling $0.2 million for returned product.

We sell limited quantities of Xyrem to UCB Pharma Limited, or UCB, for sale in territories outside of North America, and to Valeant Canada Limited, for sale in Canada, under license and distribution agreements. The agreements provide our international licensees with a fixed period of time, typically 30 to 60 days, after delivery to inspect and reject shipments for failure to meet specifications. We do not recognize revenue on the sales to our international licensees until the right of return has lapsed, which occurs when we are notified of their acceptance, or when the time for them to inspect or reject a shipment has lapsed, if earlier.

We grant rights to our wholesaler customers to return product six months prior to and up to twelve months after product expiration and issue credits which may be applied against existing or future invoices. In October 2010, we started recognizing revenue from sales of Luvox CR upon shipment to our wholesaler customers and recorded an estimated amount of product returns. Our liability for estimated future returns as of December 31, 2011 and 2010 was $4.3 million and $3.5 million, respectively.

Revenues from sales of products within the United States are recorded net of estimated allowances for returns, specialty distributor fees, wholesaler fees, prompt payment discounts, government rebates, government chargebacks, coupon programs and rebates under managed care plans. Calculating certain of these items involves estimates and judgments based on sales or invoice data and historical experience. Adjustments to estimates for these allowances have not been material.

Royalties and Contract Revenues

We receive royalties from third parties based on sales of our products under licensing and distribution arrangements. For those arrangements where royalties are reasonably estimable, we recognize revenues based on estimates of royalties earned during the applicable period, and adjust for differences between the estimated and actual royalties in the following quarter. Historically, these adjustments have not been significant.

Our contract revenues consist of fees and milestone payments. Nonrefundable fees where we have no continuing performance obligations are recognized as revenues when there is persuasive evidence of an arrangement and collection is reasonably assured. In situations where we have continuing performance obligations, nonrefundable fees are deferred and are recognized ratably over our projected performance period. We recognize at-risk milestone payments, which are typically related to regulatory, commercial or other achievements by us or our licensees and distributors, as revenues when the milestone is accomplished and collection is reasonably assured. Sales-based milestone payments are typically payments made to us that are triggered when aggregate net sales of a product by a collaborator for a specified period (for example, an annual period) reach an agreed upon threshold amount. We recognize sales-based milestone payments from a collaborator when the event which triggers the obligation of payment has occurred, there is no further obligation on our part in connection with the payment, and collection is reasonably assured. Refundable fees are deferred and recognized as revenues upon the later of when they become nonrefundable or when our performance obligations are completed.

Cost of Product Sales

Cost of product sales includes third party manufacturing and distribution costs, the cost of drug substance, royalties due to third parties on product sales, product liability and cargo insurance, FDA user fees, freight, shipping, handling and storage costs and salaries and related costs of employees involved with production. Excluded from cost of product sales, as shown on the consolidated statements of operations, is amortization of acquired developed technology of $7.2 million, $7.2 million and $6.6 million for 2011, 2010 and 2009, respectively.

Research and Development

Research and development expenses consist of expenses incurred in identifying, developing and testing our product candidates. These expenses consist primarily of fees paid to contract research organizations and other third parties to assist us in managing, monitoring and analyzing results from our clinical trials, clinical trial costs paid to sites and investigators' fees, costs of non-clinical studies, including toxicity studies in animals, costs of contract manufacturing services, costs of materials used in clinical trials and non-clinical studies, fees paid to third parties for development candidates or drug delivery or formulation technologies that we have licensed, allocated expenses, such as facilities and information technology that support our research and development activities, and related personnel expenses, including stock-based compensation. Research and development costs are expensed as incurred, including payments made under license agreements. For product candidates that have not been approved by the FDA, inventory used in clinical trials is expensed at the time of production and recorded as research and development expense. For products that have been approved by the FDA, inventory used in clinical trials is expensed at the time the inventory is packaged for the trial and therefore is not included in inventory.

Advertising Expenses

We expense the costs of advertising, including promotional expenses, as incurred. Advertising expenses for 2011, 2010 and 2009 were $1.0 million, $1.6 million and $0.4 million, respectively.

Income Taxes

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

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss) and all changes in stockholders' equity (deficit) during a period, except for those changes resulting from investments by stockholders or distributions to stockholders. Comprehensive income (loss) was as follows (in thousands):


	December 31,
	2011			2010		2009
Net income (loss)	$	124,984		$	32,778	$	(6,836	)
Unrealized loss on available-for-sale investments		(31	)		—		(4	)

Comprehensive income (loss)	$	124,953		$	32,778	$	(6,840	)

Net Income (Loss) Per Common Share

Basic and diluted net income (loss) per common share is computed using the weighted-average number of shares of common stock outstanding as follows (in thousands, except per share amounts):


	Year Ended December 31,
	2011		2010		2009
Numerator:
Net income (loss)	$	124,984	$	32,778	$	(6,836	)

Denominator:
Weighted-average common shares outstanding—basic		41,499		36,343		30,018
Dilutive effect of employee equity incentive and purchase plans		2,715		1,720		—
Dilutive effect of warrants		2,584		1,348		—

Weighted-average common shares outstanding—diluted		46,798		39,411		30,018

Net income (loss) per share:
Basic	$	3.01	$	0.90	$	(0.23	)

Diluted	$	2.67	$	0.83	$	(0.23	)

Potentially dilutive common shares from employee stock plans and warrants were not included in the diluted net loss per share for 2009 because the inclusion of such shares would have had an anti-dilutive effect.

Potentially dilutive common shares from employee stock plans and warrants are determined by applying the treasury stock method to the assumed exercise of warrants and stock options, the assumed vesting of outstanding restricted stock units, and the assumed issuance of common stock under our employee stock purchase plan. The following table represents the weighted-average shares of our common stock that were excluded from the computation of diluted net income (loss) per share for the periods presented because including them would have an anti-dilutive effect (in thousands):


	Year Ended December 31,
	2011		2010		2009
Warrants to purchase common stock		—		—		3,759
Options to purchase common stock		1,038		3,211		2,843
Restricted stock units		—		—		38

Total		1,038		3,211		6,640

Stock-Based Compensation

We account for compensation cost for all stock-based awards at fair value on the date of grant. The fair value is recognized as expense over the service period, net of estimated forfeitures, using the straight-line method for stock options and restricted stock units and using the ratable method for awards under our employee stock purchase program. The estimation of stock awards that will ultimately vest requires judgment, and to the extent actual results or updated estimates differ from current estimates, such amounts will be recorded as a cumulative adjustment in the period estimates are revised. We primarily consider historical experience when estimating expected forfeitures.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board, or the FASB, issued guidance which changes certain fair value measurement principles and increases disclosure requirements, particularly for fair value measurements subject to significant judgment and is effective for fiscal years beginning after December 15, 2011. The adoption of this amendment will not have a material impact on our results of operations or financial position.

In June and December 2011, the FASB issued amended guidance on the presentation of comprehensive income in financial statements. The amendment provides companies the option to present the components of net income and other comprehensive income either as one continuous statement of comprehensive income or as two separate but consecutive statements. The amendment eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity and is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The adoption of this amendment will not have a material impact on our results of operations or financial position.

In September 2011, the FASB issued amended guidance related to the goodwill impairment test which allows companies to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative goodwill impairment test. The amendment is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of this amendment will not have a material impact on our results of operations or financial position.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

Fair Value Measurement

12 Months Ended

Dec. 31, 2011

Fair Value Measurement [Abstract]

Fair Value Measurement

3. Fair Value Measurement

Available-for-sale securities consisted of the following (in thousands):


	December 31, 2011									December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
Money market funds	$	48,518	$	—	$	—		$	48,518	$	25,046	$	—	$	—	$	25,046
Certificates of deposit		7,300		—		(6	)		7,294		—		—		—		—
Corporate debt securities		50,371		7		(34	)		50,344		—		—		—		—
Obligations of U.S. government agencies		18,433		3		(1	)		18,435		—		—		—		—

Total available-for-sale securities	$	124,622	$	10	$	(41	)	$	124,591	$	25,046	$	—	$	—	$	25,046


								December 31, 2011								December 31, 2010
Available-for-sale securities								$	124,591							$	25,046
Cash									33,307								19,748
Restricted cash									—								400

Totals								$	157,898							$	45,194


Reported as								December 31, 2011								December 31, 2010
Amounts classified as cash and cash equivalents								$	82,076							$	44,794
Amounts classified as restricted cash									—								400
Amounts classified as marketable securities									75,822								—

Totals								$	157,898							$	45,194

All available-for-sale securities held as of December 31, 2011 had contractual maturities of less than one year, and no securities were sold in 2011. No available-for-sale securities held as of December 31, 2011 had been in a continuous loss position for more than 12 months. The aggregate fair value of available-for-sale securities which had unrealized losses as of December 31, 2011 was $43.6 million.

Gross unrealized losses on investments as of December 31, 2011, related to the available-for-sale securities were insignificant and we believe the impairment was temporary. In determining that the decline in fair value of these securities was temporary, we considered the length of time each security was in an unrealized loss position and the extent to which fair value was less than cost. In addition, we do not intend to sell these securities and it is not more likely than not that we will be required to sell these securities before the recovery of their amortized cost basis.

The following table summarizes, by major security type, our available-for-sale securities that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy (in thousands):


	December 31, 2011						December 31, 2010
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total Estimated Fair Value		Quoted Prices in Active Markets for Identical Assets (Level 1)		Total Estimated Fair Value
Money market funds	$	48,518	$	—	$	48,518	$	25,046	$	25,046
Certificates of deposit		—		7,294		7,294		—		—
Corporate debt securities		—		50,344		50,344		—		—
Obligations of U.S. government agencies		—		18,435		18,435		—		—

Total available-for-sale securities	$	48,518	$	76,073	$	124,591	$	25,046	$	25,046

Available-for-sale securities consist of corporate debt securities, obligations of U.S. government agencies and certificates of deposit and were measured at fair value using Level 2 inputs. We review trading activity and pricing for these investments as of the measurement date. Level 2 inputs, obtained from various third party data providers, represent quoted prices for similar assets in active markets, or these inputs were derived from observable market data, or if not directly observable, were derived from or corroborated by other observable market data. Level 1 inputs are quoted prices in active markets for identical assets or liabilities.

There were no transfers between Level 1 and Level 2 of the fair value hierarchy in 2011.

In 2011, we repaid in full our long-term debt (see Note 6). Prior to the extinguishment of our long-term debt, we estimated the fair value of our long-term debt using a discounted cash flow analysis based on our incremental borrowing rates for similar types of borrowing arrangements. The carrying amount and the estimated fair value of our long-term debt were as follows (in thousands):


	December 31, 2011				December 31, 2010
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Long-term debt	$	—	$	—	$	40,693	$	40,864

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 825

-SubTopic 10

-Section 50

-Paragraph 16

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-Name Accounting Standards Codification

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-Name Statement of Financial Accounting Standard (FAS)

-Number 133

-Paragraph 44A, 44B

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-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15C, 15D

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Reference 7: http://www.xbrl.org/2003/role/presentationRef

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-Name Statement of Financial Accounting Standard (FAS)

-Number 107

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-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 15B

-Subparagraph a, b

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-Publisher FASB

-Name Statement of Financial Accounting Standard (FAS)

-Number 107

-Paragraph 3, 10, 14, 15

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-Name Statement of Financial Accounting Standard (FAS)

-Number 157

-Paragraph 32, 33, 34

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-Number 159

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-Topic 820

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+ Details

Certain Balance Sheet Items

12 Months Ended

Dec. 31, 2011

Certain Balance Sheet Items [Abstract]

Certain Balance Sheet Items

4. Certain Balance Sheet Items

Inventories consisted of the following (in thousands):


	December 31,
	2011		2010
Raw materials	$	1,937	$	2,986
Work in process		524		705
Finished goods		1,448		1,355

Total inventories	$	3,909	$	5,046

Property and equipment consisted of the following (in thousands):


	December 31,
	2011			2010
Leasehold improvements	$	763		$	763
Computer equipment		2,046			1,483
Computer software		4,010			4,010
Furniture and fixtures		556			593
Machinery and equipment		76			—
Construction-in-progress		689			73

Subtotal		8,140			6,922
Less accumulated depreciation and amortization		(6,583	)		(6,232	)

Property and equipment, net	$	1,557		$	690

Accrued liabilities consisted of the following (in thousands):


	December 31,
	2011		2010
Accrued personnel expense	$	11,643	$	8,060
Government rebates reserve		10,631		6,588
Sales returns reserves		4,302		3,539
Accrued transaction and integration costs		2,409		—
Accrued gross to net items		1,747		1,376
Accrued professional fees and services		1,612		2,170
Accrued inventory and cost of sales		846		804
Other		1,593		1,035

Total accrued liabilities	$	34,783	$	23,572

Goodwill And Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill And Intangible Assets [Abstract]

Goodwill And Intangible Assets

5. Goodwill and Intangible Assets

The gross carrying amount of goodwill was as follows (in thousands):


	December 31,
	2011		2010
Goodwill	$	38,213	$	38,213

The gross carrying amounts and net book values of our intangible assets were as follows (in thousands):


	December 31, 2011						December 31, 2010
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value
Developed technology —Xyrem	$	39,700	$	27,185	$	12,515	$	39,700	$	23,014	$	16,686
Developed technology —Luvox CR		9,700		8,449		1,251		9,700		5,446		4,254
Trademarks		2,600		1,781		819		2,600		1,507		1,093

Total	$	52,000	$	37,415	$	14,585	$	52,000	$	29,967	$	22,033

Based on intangible assets recorded as of December 31, 2011, and assuming the underlying assets of Jazz Pharmaceuticals, Inc. will not be impaired in the future and that we will not change the expected lives of the assets, future amortization costs were estimated as follows (in thousands):


Year Ending December 31,	Estimated Amortization Expense
2012	$	5,696
2013		4,445
2014		4,444

Total	$	14,585

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References+ Details

Debt And Financing Obligations	12 Months Ended
Debt And Financing Obligations	Dec. 31, 2011
Debt And Financing Obligations [Abstract]
Debt And Financing Obligations	6. Debt and Financing Obligations *Term Loan and Revolving Credit Facility* In December 2011, we terminated a credit agreement we entered into in June 2010, which was scheduled to mature in June 2013. The credit agreement included a $15.0 million revolving credit facility and a $50.0 million three-year term loan which provided for quarterly principal payments of $4.2 million. In July 2011, we repaid all amounts due under the term loan. In 2011, as a result of the early repayment of the term loan and the termination of the credit agreement, we recorded a loss on extinguishment of debt of $1.2 million, which consisted of a $0.8 million non-cash charge related to the write-off of unamortized debt issuance costs and a debt discount and the remainder related to a prepayment penalty and a termination fee. In 2010, we repaid $119.5 million principal amount due under a previous debt agreement. As a result of the repayment of amounts due under the previous debt agreement, we recorded a loss on extinguishment of debt of $12.3 million in 2010, which consisted of a $3.8 million non-cash charge related to the write-off of unamortized debt issuance costs and a debt discount and an $8.5 million prepayment penalty. As of December 31, 2010, the $41.7 million principal amount of the term loan was recorded net of a debt discount of $1.0 million related to fees paid under the credit agreement. Borrowings under the term loan and the revolving credit facility bore interest at a variable rate which was 5.75% in 2010 and 3.75% for most of the period in 2011 in which there were borrowings outstanding.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References+ Details

Other Long Term Liabilities	12 Months Ended
Other Long Term Liabilities	Dec. 31, 2011
Other Long Term Liabilities [Abstract]
Other Long Term Liabilities	7. Other Long Term Liabilities *Deferred Revenue* We have an agreement with UCB under which UCB has the right to market Xyrem for certain indications in various countries outside the United States. We recognized contract revenues of $1.1 million during each of 2011, 2010, and 2009 related to two upfront payments received from UCB in 2006 totaling $15.0 million. In 2009, we recognized a $10.0 million milestone payment which was received from UCB in 2008. As of December 31, 2011, $9.1 million was recorded as deferred revenues related to this agreement, of which $1.1 million is a current liability. The deferred revenue balance is being recognized ratably through 2019. *Purchased Product Rights Liability* In 2007, we entered into a product license agreement with Solvay Pharmaceuticals, Inc., which was subsequently acquired by Abbott Laboratories, for the rights to market Luvox CR and Luvox in the United States which agreement was subsequently amended. Under the amended agreement we paid $4.5 million, $4.0 million and $6.0 million in 2011, 2010 and 2009, respectively, and will make our final payments totaling $4.5 million in 2012. *Liability Under Government Litigation Settlement* In 2007, we and Orphan Medical entered into agreements with a number of government entities to settle various matters associated with an investigation relating to the sale and marketing of Xyrem by Orphan Medical, which we acquired in June 2005. Under these agreements we paid $4.2 million, $3.0 million and $2.5 million in 2011, 2010 and 2009, respectively. We paid our remaining obligation of $7.3 million in January 2012.

Commitments And Contingencies

12 Months Ended

Dec. 31, 2011

Commitments And Contingencies [Abstract]

Commitments And Contingencies

8. Commitments and Contingencies

Indemnification

In the normal course of business, we enter into agreements that contain a variety of representations and warranties and provide for general indemnification, including indemnification associated with product liability or infringement of intellectual property rights. Our exposure under these agreements is unknown because it involves future claims that may be made but have not yet been made against us. To date, we have not paid any claims or been required to defend any action related to these indemnification obligations.

We have agreed to indemnify our officers, directors and certain other employees for losses and costs incurred in connection with certain events or occurrences, including advancing money to cover certain costs, subject to certain limitations. The maximum potential amount of future payments we could be required to make under the indemnification obligations is unlimited; however, we maintain insurance policies that may limit our exposure and may enable us to recover a portion of any future amounts paid. Assuming the applicability of coverage, the willingness of the insurer to assume coverage, and subject to certain retention, loss limits and other policy provisions, we believe the fair value of these indemnification obligations is not significant. Accordingly, we have not recognized any liabilities relating to these obligations as of December 31, 2011 and December 31, 2010. No assurances can be given that the covering insurers will not attempt to dispute the validity, applicability, or amount of coverage without expensive litigation against these insurers, in which case we may incur substantial liabilities as a result of these indemnification obligations.

Lease and Other Commitments

We have a noncancelable operating lease for our office building located in Palo Alto, California which expires in August 2017, is renewable through 2019 and is subject to an annual rent escalation clause. We are also obligated to make payments under noncancelable operating leases for automobiles used by our sales force. Rent expense under all operating leases was as follows (in thousands):


	Year Ended December 31,
	2011		2010		2009
Rent expense	$	2,593	$	2,323	$	2,738

Future minimum lease payments under our noncancelable operating leases at December 31, 2011, were as follows (in thousands):


Year ending December 31,	Lease Payments
2012	$	1,898
2013		1,169
2014		366
2015		1
2016		—

Total	$	3,434

In February 2012, we renewed the operating lease for our Palo Alto office building and as a result, we are obligated to make additional payments of $0.5 million, $2.1 million, $2.2 million, $2.2 million, $2.3 million and $1.6 million in 2012, 2013, 2014, 2015, 2016 and 2017.

As of December 31, 2011 and 2010, we had $5.7 million and $2.1 million, respectively, of noncancelable purchase commitments under agreements with contract manufacturers, all of which were due within one year.

As of December 31, 2011, we were required to pay our investment banker a fee of $1.5 million contingent upon the completion of the merger with Azur Pharma.

Legal Proceedings

On October 18, 2010, we received a Paragraph IV Patent Certification notice, or Paragraph IV Certification, from Roxane Laboratories, Inc., or Roxane, that it filed an abbreviated new drug application, or ANDA, with the U.S. Food and Drug Administration, or FDA, requesting approval to market a generic version of Xyrem. Roxane's Paragraph IV Certification alleges that all five patents listed for Xyrem in the FDA's approved drug products with therapeutic equivalence evaluation documents, or Orange Book, on the date of the Paragraph IV Certification are invalid, unenforceable or not infringed by Roxane's proposed generic product. On November 22, 2010, we filed a lawsuit against Roxane in response to Roxane's Paragraph IV Certification in the United States District Court for the District of New Jersey. We are seeking a permanent injunction to prevent Roxane from introducing a generic version of Xyrem. In accordance with the Hatch-Waxman Act, as a result of having filed a timely lawsuit against Roxane, FDA approval of Roxane's ANDA will be stayed until the earlier of (i) 30 months from our October 18, 2010 receipt of Roxane's Paragraph IV certification notice or (ii) a District Court decision finding that the identified patents are invalid, unenforceable or not infringed. An additional method of use patent covering the distribution system for Xyrem issued in December 2010 and is listed in the Orange Book, and we amended our lawsuit against Roxane on February 4, 2011 to include the additional patent in the litigation in response to Roxane's Paragraph IV Certification against this patent. An additional method of use patent covering the distribution system for Xyrem issued in February 2011 and is listed in the Orange Book, and we amended our lawsuit on May 2, 2011 to include this additional patent in response to Roxane's Paragraph IV Certification against it. We cannot predict the outcome of this matter.

In August 2009, we received a Paragraph IV Certification from Actavis Elizabeth, LLC, or Actavis, advising that Actavis had filed an ANDA with the FDA seeking approval to market a generic version of Luvox CR. In September 2009, we received a Paragraph IV Certification notice from Anchen Pharmaceuticals, Inc., now owned by Par Pharmaceutical Companies, Inc., or Anchen, advising that Anchen had filed an ANDA with the FDA seeking approval to market a generic version of Luvox CR. Actavis' Paragraph IV Certification alleged that the United States patent covering Luvox CR, which is owned by Elan Pharma International Limited, or Elan, which has subsequently transferred its rights to Alkermes Pharma Ireland Limited, or Alkermes, and licensed to us, is invalid on the basis that the inventions claimed therein were obvious. Anchen's Paragraph IV Certification alleged that the Alkermes patent will not be infringed by Anchen's manufacture, use or sale of the generic product for which the ANDA was submitted and that the Alkermes patent is invalid on the basis that the inventions claimed therein were obvious. On October 6, 2009, we and Elan, as plaintiffs, filed a lawsuit against Actavis, Anchen, and Anchen Incorporated, the parent of Anchen, in the United States District Court for the District of Delaware claiming infringement of the Alkermes patent by the defendants in response to the Paragraph IV Certifications filed by Actavis and Anchen. On October 14, 2009, we and Elan, as plaintiffs, also filed a lawsuit in the United States District Court for the Central District of California against Anchen claiming infringement of the Alkermes patent based upon Anchen's Paragraph IV Certification. In both cases, the plaintiffs were seeking a permanent injunction that prevented Actavis and Anchen from introducing a generic version of Luvox CR prior to the expiration of the Alkermes patent. On August 25, 2010, we and Elan entered into settlement agreements with Anchen. Under the agreements, we, Elan and Anchen agreed to dismiss all of the claims brought in the litigation without prejudice, Anchen agreed not to contest the validity or enforceability of the Alkermes patent in the United States, and we, Elan and Anchen agreed to release each other from all claims arising in the litigation or relating to the product Anchen intends to market under its ANDA. In addition, we granted a sublicense to Anchen of our rights to have manufactured, market and sell a generic version of Luvox CR in the United States. The sublicense is non-transferable, non-sublicensable and royalty-free and is exclusive even as to us and Alkermes (except with respect to Luvox CR) for a period of time. The sublicense will commence on February 15, 2013 or earlier upon the occurrence of certain events. On October 5, 2010, the United States District Court for the Central District of California dismissed the case against Elan without prejudice. On the same date, the United States District Court for the District of Delaware also dismissed the case against Anchen without prejudice. The lawsuit against Actavis is pending in the United States District Court for the District of Delaware. The court has scheduled a Markman hearing for July 24, 2012 and a pretrial conference for March 5, 2013. We cannot predict or determine the outcome of this matter. On September 10, 2011, we received a Paragraph IV Certification from Torrent Pharma Limited, or Torrent, advising us that it had filed an ANDA with the FDA requesting approval to market a generic version of Luvox CR. Torrent's Paragraph IV Certification alleges that the Alkermes patent will not be infringed by the manufacture, use, sale or offer for sale of the generic product for which the ANDA was submitted and that the Alkermes patent is invalid. On October 21, 2011, we and Alkermes, as plaintiffs, filed a lawsuit against Torrent in the United States District Court for the District of Delaware asserting infringement of the Alkermes patent by Torrent in response to Torrent's Paragraph IV Certification. We are seeking a permanent injunction that prevents Torrent from introducing a generic version of Luvox CR prior to the expiration of the 462 patent. We cannot predict the outcome of this litigation.

From time to time we are involved in legal proceedings arising in the ordinary course of business. We believe there is no other litigation pending that could have, individually or in the aggregate, a material adverse effect on our results of operations or financial condition.

- Definition

The entire disclosure for commitments and contingencies.

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+ Details

Common Stock

12 Months Ended

Dec. 31, 2011

Common Stock [Abstract]

Common Stock

9. Common Stock

Unregistered Sales of Equity Securities

In 2009, we completed a private placement of units consisting of 1,895,734 shares of common stock and warrants to purchase 947,867 shares of our common stock at a price of $3.6925 per unit for net proceeds of $6.8 million. The warrants are exercisable at any time through July 2016, subject to certain restrictions. The $2.7 million fair value of the warrants was recorded in stockholders' deficit and was estimated using the Black-Scholes option pricing model with the following assumptions: a risk free rate of 3.1%, volatility of 92%, a term of 7.0 years and a dividend yield of 0%.

Authorized But Unissued Common Stock

We had reserved the following shares of authorized but unissued common stock (in thousands):


	As of December 31, 2011
2007 Equity Incentive Plan		7,529
2007 Employee Stock Purchase Plan		92
Amended and Restated 2007 Non-Employee Directors Stock Option Plan		591
Amended and Restated Directors Deferred Compensation Plan		197
Exercise of warrants		3,109

Total		11,518

Warrants

As of December 31, 2011, we had shares of common stock issuable under the following warrants (in thousands):


Warrants Issued	Expiration Date		Shares of Common Stock		Exercise Price
Warrants issued in 2005 in conjunction with long-term debt		June 24, 2012		550	$	9.34
Warrants issued in 2008 in conjunction with long-term debt		March 16, 2013		471	$	9.34
Warrants issued in 2008 in conjunction with registered direct public offering		July 20, 2014		1,140	$	7.37
Warrants issued in 2009 in conjunction with private placement		July 5, 2016		948	$	4.00

				3,109

The fair values of these warrants were recorded in stockholder's equity (deficit) when they were originally issued.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

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+ Details

Stock-Based Compensation

12 Months Ended

Dec. 31, 2011

Stock-Based Compensation [Abstract]

Stock-Based Compensation

10. Stock-Based Compensation

2007 Equity Incentive Plan

In 2007, our board of directors adopted, and our stockholders approved, the 2007 Equity Incentive Plan, or the 2007 Plan, which provided for the grant of incentive stock options, nonstatutory stock options, restricted stock awards, restricted stock unit awards, or RSUs, stock appreciation rights, performance stock awards and other forms of equity compensation to employees, including officers, non-employee directors and consultants. All of the grants under the 2007 Plan were granted to employees and vest ratably over service periods of three to five years and expire no more than ten years after the date of grant. As of December 31, 2011, a total of 10,022,014 shares of our common stock had been authorized for issuance under the 2007 Plan.

2007 Employee Stock Purchase Plan

In 2007, employees became eligible to participate in the ESPP. The ESPP allowed eligible employee participants to purchase shares of our common stock at a discount of 15% through payroll deductions. The ESPP consisted of a fixed offering period of 24 months with four purchase periods within each offering period. The number of shares available for issuance under our ESPP during any six month purchase period was 175,000 shares. As of December 31, 2011, a total of 1,750,000 shares of our common stock had been authorized for issuance under the ESPP.

Amended and Restated 2007 Non-Employee Directors Stock Option Plan

In 2007, our board of directors adopted, and our stockholders approved, the 2007 Non-Employee Directors Stock Option Plan, or the 2007 Directors Option Plan. The 2007 Directors Option Plan provided for the automatic grant of nonstatutory stock options to purchase shares of our common stock to our non-employee directors which vest over a period of one to three years. In addition, the 2007 Directors Option Plan provides the source of shares to fund distributions made prior to August 15, 2010 under the Directors Deferred Compensation Plan described below. As of December 31, 2011, a total of 671,463 shares of our common stock had been authorized for issuance under the 2007 Directors Option Plan.

Amended and Restated Directors Deferred Compensation Plan

In 2007, our board of directors adopted the Directors Deferred Compensation Plan, the Directors Plan. The Directors Plan allowed each non-employee director to elect to defer receipt of his or her retainer fee to a future date or dates. Amounts deferred were credited as shares of common stock to a phantom stock account the number of which were based on the amount of the retainer fees deferred divided by the market value of our common stock on the first trading day of the first open window period following the date the retainer fees were deemed earned. We recorded expense of $0.4 million, $0.2 million and $0.2 million related to retainer fees earned and deferred in 2011, 2010 and 2009, respectively. Upon termination of a director's service, the deferred shares are issued. As of December 31, 2011, 99,980 shares of common stock were unissued related to retainer fees deferred.

Stock Based Compensation

The table below shows, for all stock option grants, the weighted-average assumptions used in the Black-Scholes option pricing model and the resulting weighted-average grant date fair value of stock options granted in each of the past three years:


	Year Ended December 31,
	2011			2010		2009
Grant date fair value	$	17.38		$	7.84	$	1.34
Volatility		72	%

Consolidated Statements Of Operations (Parenthetical) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2010	Dec. 31, 2009
Consolidated Statements Of Operations [Abstract]
Interest expense pertaining to a related party	$ 570	$ 1,183
Loss on extinguishment of debt pertaining to a related party	$ 701