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Document and Entity Information - USD ($) $ in Thousands	12 Months Ended
Document and Entity Information - USD ($) $ in Thousands	Dec. 31, 2011	Mar. 02, 2012	Jun. 30, 2010
Document and Entity Information [Abstract]
Entity Registrant Name	MANNKIND CORP
Entity Central Index Key	0000899460
Document Type	10-K
Document Period End Date	Dec. 31, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	FY
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Public Float			$ 197,471,688
Entity Common Stock, Shares Outstanding		167,465,888

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 2,681	$ 66,061
Marketable securities	515	4,370
State research and development credit exchange receivable - current	0	674
Prepaid expenses and other current assets	2,625	2,849
Total current assets	5,821	73,954
Property and equipment - net	193,029	202,356
State research and development credit exchange receivable - net of current portion	473	629
Other assets	230	317
Total	199,553	277,256
Current liabilities:
Accounts payable	4,624	3,294
Accrued expenses and other current liabilities	20,736	14,840
Total current liabilities	25,360	18,134
Senior convertible notes	210,642	209,335
Note payable to related party	277,203	235,319
Total liabilities	513,205	462,788
Commitments and contingencies
Stockholders' deficit:
Undesignated preferred stock, $0.01 par value - 10,000,000 shares authorized; no shares issued or outstanding at December 31, 2010 and 2011
Common stock, $0.01 par value -200,000,000 and 250,000,000 shares authorized at December 31, 2010 and 2011, respectively; 127,793,178 and 131,522,945 shares issued and outstanding at December 31, 2010 and 2011, respectively	1,315	1,278
Additional paid-in capital	1,620,535	1,587,858
Accumulated other comprehensive income (loss)	44	74
Deficit accumulated during the development stage	(1,935,546)	(1,774,742)
Total stockholders' deficit	(313,652)	(185,532)
Total	$ 199,553	$ 277,256

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 2011	Dec. 31, 2010
Consolidated Balance Sheets [Abstract]
Undesignated preferred stock, par value	$ 0.01	$ 0.01
Undesignated preferred stock, shares authorized	10,000,000	10,000,000
Undesignated preferred stock, shares issued
Undesignated preferred stock, shares outstanding
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	250,000,000	200,000,000
Common stock, shares issued	131,522,945	127,793,178
Common stock, shares outstanding	131,522,945	127,793,178

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended			251 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2011
Consolidated Statements of Operations [Abstract]
Revenue	$ 50	$ 93		$ 3,131
Operating expenses:
Research and development	99,959	112,279	$ 156,331	1,366,051
General and administrative	40,630	40,312	53,447	380,231
In-process research and development				19,726
Goodwill impairment				151,428
Total operating expenses	140,589	152,591	209,778	1,917,436
Loss from operations	(140,539)	(152,498)	(209,778)	(1,914,305)
Other income (expense)	1,541	(725)	51	(1,076)
Interest expense on note payable to related party	(10,883)	(10,249)	(5,679)	(28,334)
Interest expense on senior convertible notes	(10,941)	(7,128)	(4,768)	(28,794)
Interest income	18	40	70	36,989
Loss before provision for income taxes	(160,804)	(170,560)	(220,104)	(1,935,520)
Income taxes				(26)
Net loss	(160,804)	(170,560)	(220,104)	(1,935,546)
Deemed dividend related to beneficial conversion feature of convertible preferred stock				(22,260)
Accretion on redeemable preferred stock				(952)
Net loss applicable to common stockholders	$ (160,804)	$ (170,560)	$ (220,104)	$ (1,958,758)
Net loss per share applicable to common stockholders - basic and diluted	$ (1.32)	$ (1.50)	$ (2.07)
Shares used to compute basic and diluted net loss per share applicable to common stockholders	121,817	113,672	106,534

Consolidated Statements of Stockholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands	Total	Series B Convertible Preferred Stock	Series C Convertible Preferred Stock	Series C Convertible Preferred Stock Issuable	Series C Convertible Preferred Stock Subscriptions Receivable	Common Stock	Additional Paid-In Capital	Notes Receivable from Stockholders	Notes Receivable from Officers	Other Comprehensive Income (Loss)	Deficit Accumulated During the Development Stage
Beginning balance at Feb. 29, 1992	$ (11)	$ 0	$ 0	$ 0	$ 0	$ 10	$ 890	$ 0	$ 0	$ 0	$ (911)
Beginning balance, shares at Feb. 29, 1992		0	0			998
Issuance of common stock	888					$ 1	887
Issuance of common stock, shares						73
Capital contribution	20						20
Comprehensive loss:
Net loss	(1,175)										(1,175)
Ending balance at Feb. 28, 1993	(278)	$ 0	$ 0	0	0	$ 11	1,797	0	0	0	(2,086)
Ending balance, shares at Feb. 28, 1993		0	0			1,071
Issuance of common stock	526						526
Issuance of common stock, shares						11
Issuance of stock for notes receivable							400	(400)
Issuance of stock for notes receivable, shares						8
Comprehensive loss:
Net loss	(1,156)										(1,156)
Ending balance at Feb. 28, 1994	(908)	$ 0	$ 0	0	0	$ 11	2,723	(400)	0	0	(3,242)
Ending balance, shares at Feb. 28, 1994		0	0			1,090
Issuance of common stock	1,805						1,805
Issuance of common stock, shares						36
Collection of stock subscription	400							400
Comprehensive loss:
Net loss	(2,004)										(2,004)
Ending balance at Dec. 31, 1994	(707)	$ 0	$ 0	0	0	$ 11	4,528	0	0	0	(5,246)
Ending balance, shares at Dec. 31, 1994		0	0			1,126
Exercise of stock options	22						22
Exercise of stock options, shares						1
Issuance of common stock for services	8						8
Stock-based compensation	384						384
Comprehensive loss:
Net loss	(2,815)										(2,815)
Ending balance at Dec. 31, 1995	(3,108)	$ 0	$ 0	0	0	$ 11	4,942	0	0	0	(8,061)
Ending balance, shares at Dec. 31, 1995		0	0			1,127
Exercise of stock options	12						12
Exercise of stock options, shares						3
Issuance of common stock	59						59
Issuance of common stock, shares						1
Stock-based compensation	126						126
Comprehensive loss:
Net loss	(2,570)										(2,570)
Ending balance at Dec. 31, 1996	(5,481)	$ 0	$ 0	0	0	$ 11	5,139	0	0	0	(10,631)
Ending balance, shares at Dec. 31, 1996		0	0			1,131
Exercise of stock options	135						135
Exercise of stock options, shares						27
Issuance of common stock	196					$ 6	190
Issuance of common stock, shares						548
Conversion of notes payable	60						60
Conversion of notes payable, shares						12
Stock-based compensation	2						2
Comprehensive loss:
Net loss	(2,280)										(2,280)
Ending balance at Dec. 31, 1997	(7,368)	$ 0	$ 0	0	0	$ 17	5,526	0	0	0	(12,911)
Ending balance, shares at Dec. 31, 1997		0	0			1,718
Exercise of stock options	25					$ 1	24
Exercise of stock options, shares						68
Issuance of common stock	12,726					$ 23	12,703
Issuance of common stock, shares						2,253
Conversion of notes payable	1,202					$ 2	1,200
Conversion of notes payable, shares						215
Stock-based compensation	150						150
Comprehensive loss:
Net loss	(3,331)										(3,331)
Ending balance at Dec. 31, 1998	3,404	$ 0	$ 0	0	0	$ 43	19,603	0	0	0	(16,242)
Ending balance, shares at Dec. 31, 1998		0	0			4,254
Issuance of common stock	534					$ 2	532
Issuance of common stock, shares						162
Conversion of notes payable	995					$ 1	994
Conversion of notes payable, shares						80
Comprehensive loss:
Net loss	(5,679)										(5,679)
Ending balance at Dec. 31, 1999	(746)	$ 0	$ 0	0	0	$ 46	21,129	0	0	0	(21,921)
Ending balance, shares at Dec. 31, 1999		0	0			4,496
Issuance of common stock	31,633					$ 46	33,945	(2,358)
Issuance of common stock, shares						4,690
Issuance of Series B preferred stock for cash	15,000	$ 15,000
Issuance of Series B preferred stock for cash, shares		193
Conversion of notes payable	1,074					$ 1	1,073
Conversion of notes payable, shares						63
Discount on notes below market rate	241							241
Beneficial conversion feature of Series A/B convertible preferred stock	(993)						(993)
Accrued interest on notes	(117)							(117)
Amount in excess of redemption obligation	999						999
Accretion to redemption value on Series A redeemable convertible preferred stock	(149)						(149)
Stock-based compensation	9,609						9,609
Comprehensive loss:
Net loss	(24,661)										(24,661)
Ending balance at Dec. 31, 2000	31,890	$ 15,000	$ 0	0	0	$ 93	65,613	(2,234)	0	0	(46,582)
Ending balance, shares at Dec. 31, 2000		193	0			9,249
Cash received for common stock issuable	3,900						3,900
Exercise of stock options	13						13
Exercise of stock options, shares						1
Issuance of common stock	78,030					$ 30	78,000
Issuance of common stock, shares						3,052
Issuance of common stock for services	60						60
Issuance of common stock for services, shares						3
Record merger of entities	171,154						171,154
Accrued interest on notes	(189)							(189)
Payments on notes receivable	28							28
Accretion to redemption value on Series A redeemable convertible preferred stock	(239)						(239)
Stock-based compensation	1,565						1,565
Issuance of put option by stockholder	(2,949)						(2,949)
Comprehensive loss:
Net loss	(48,245)										(48,245)
Ending balance at Dec. 31, 2001	235,018	$ 15,000	$ 0	0	0	$ 123	317,117	(2,395)	0	0	(94,827)
Ending balance, shares at Dec. 31, 2001		193	0			12,305
Issuance of stock award to employee/consultants	84						84
Issuance of stock award to employee/consultants, shares						3
Cash received for common stock issuable	98						98
Issuance of common stock	58,815					$ 40	58,775
Issuance of common stock, shares						3,922
Beneficial conversion feature of Series A/B convertible preferred stock	1,421						1,421
Accrued interest on notes	(229)							(229)
Issuance of common stock for cash already received						$ 2	(2)
Issuance of common stock for cash already received, shares						234
Payments on notes receivable	1,314							1,314
Deemed dividend related to beneficial conversion feature of Series B convertible preferred stock	(1,421)						(1,421)
Accretion to redemption value on Series A redeemable convertible preferred stock	(251)						(251)
Stock-based compensation	268						268
Put option redemption by stockholder	1,921						1,921
Comprehensive loss:
Net loss	(206,265)										(206,265)
Ending balance at Dec. 31, 2002	90,773	$ 15,000	$ 0	0	0	$ 165	378,010	(1,310)	0	0	(301,092)
Ending balance, shares at Dec. 31, 2002		193	0			16,464
Issuance of common stock	50,000					$ 35	49,965
Issuance of common stock, shares						3,494
Conversion of notes payable				50,000	(50,000)
Notes receivable by stockholder issued to officers							225		(225)
Non-cash compensation expense of officer resulting from stockholder contribution	70						70
Beneficial conversion feature of Series A/B convertible preferred stock	1,017						1,017
Accrued interest on notes	(105)							(102)	(3)
Issuance of common stock for cash already received	31,847				31,847
Issuance of common stock for cash already received, shares						17
Deemed dividend related to beneficial conversion feature of Series B convertible preferred stock	(1,017)						(1,017)
Accretion to redemption value on Series A redeemable convertible preferred stock	(253)						(253)
Stock-based compensation	4,501						4,501
Put shares sold to majority stockholder	623						623
Comprehensive loss:
Net loss	(65,879)										(65,879)
Ending balance at Dec. 31, 2003	111,577	$ 15,000	$ 0	50,000	(18,153)	$ 200	433,141	(1,412)	(228)	0	(366,971)
Ending balance, shares at Dec. 31, 2003		193	0			19,975
Exercise of warrants	46						46
Exercise of warrants, shares						4
Issuance of common shares under Employee Stock Purchase Plan	430						430
Issuance of common shares under Employee Stock Purchase Plan, shares						36
Exercise of stock options	1,079						1,079
Exercise of stock options, shares						86
Issuance of common stock	83,176					$ 66	83,110
Issuance of common stock, shares						6,557
Conversion of notes payable	18,153		$ 18,153	(18,153)	18,153
Conversion of notes payable, shares			356
Repayment of notes receivable by stockholder issued to officers	3						(225)		228
Issuance of common shares in exchange for warrants						22
Repayment of stock note receivable						$ (1)	(1,518)	1,519
Repayment of stock note receivable, shares						(90)
Beneficial conversion feature of Series A/B convertible preferred stock	19,822						19,822
Accrued interest on notes	(107)							(107)
Conversion of Series A convertible preferred stock to common stock	5,248					$ 9	5,239
Conversion of Series A convertible preferred stock to common stock, shares						891
Conversion of Series B convertible preferred stock to common stock		$ (15,000)				$ 8	14,992
Conversion of Series B convertible preferred stock to common stock, shares		(193)				811
Conversion of Series C convertible preferred stock to common stock			$ (50,000)			$ 45	49,955
Conversion of Series C convertible preferred stock to common stock, shares			(980)			4,464
Issuance of common stock for cash already received			$ 31,847	(31,847)
Issuance of common stock for cash already received, shares			624
Deemed dividend related to beneficial conversion feature of Series B convertible preferred stock	(19,822)						(19,822)
Accretion to redemption value on Series A redeemable convertible preferred stock	(60)						(60)
Stock-based compensation	6,810						6,810
Comprehensive loss:
Net loss	(75,992)										(75,992)
Ending balance at Dec. 31, 2004	150,363	$ 0	$ 0	0	0	$ 327	592,999	0	0	0	(442,963)
Ending balance, shares at Dec. 31, 2004		0	0			32,756
Issuance of common shares under Employee Stock Purchase Plan	495					$ 1	494
Issuance of common shares under Employee Stock Purchase Plan, shares						58
Issuance of stock award to employee/consultants	(145)					$ 1	(146)
Issuance of stock award to employee/consultants, shares						40
Exercise of stock options	1,951					$ 3	1,948
Exercise of stock options, shares						304
Issuance of common stock	170,234					$ 171	170,063
Issuance of common stock, shares						17,132
Issuance of common shares in exchange for warrants	245						245
Issuance of common shares in exchange for warrants						24
Stock-based compensation	(1,828)						(1,828)
Comprehensive loss:
Net loss	(114,338)										(114,338)
Ending balance at Dec. 31, 2005	206,977	$ 0	$ 0	0	0	$ 503	763,775	0	0	0	(557,301)
Ending balance, shares at Dec. 31, 2005		0	0			50,314
Exercise of warrants	2,694					$ 3	2,691
Exercise of warrants, shares						339
Issuance of common shares under Employee Stock Purchase Plan	981					$ 1	980
Issuance of common shares under Employee Stock Purchase Plan, shares						86
Issuance of common shares from the release of restricted stock units	(340)					$ 1	(341)
Issuance of common shares from the release of restricted stock units, shares						102
Issuance of common shares pursuant to research agreement	2,074					$ 1	2,073
Issuance of common shares pursuant to research agreement, shares						100
Exercise of stock options	2,312					$ 3	2,309
Exercise of stock options, shares						263
Cancellation of common shares for stock notes receivable						$ (8)	8
Cancellation of common shares for stock notes receivable, shares						(844)
Issuance of common stock	384,670					$ 230	384,440
Issuance of common stock, shares						23,000
Stock-based compensation	14,667						14,667
Comprehensive loss:
Net loss	(230,548)										(230,548)
Ending balance at Dec. 31, 2006	383,487	$ 0	$ 0	0	0	$ 734	1,170,602	0	0	0	(787,849)
Ending balance, shares at Dec. 31, 2006		0	0			73,360
Issuance of common shares under Employee Stock Purchase Plan	1,065					$ 1	1,064
Issuance of common shares under Employee Stock Purchase Plan, shares						124
Issuance of stock award to employee/consultants	123						123
Issuance of stock award to employee/consultants, shares						30
Issuance of common shares from the release of restricted stock units	(524)					$ 2	(526)
Issuance of common shares from the release of restricted stock units, shares						146
Issuance of common shares pursuant to research agreement	944					$ 1	943
Issuance of common shares pursuant to research agreement, shares						100
Exercise of stock options	4,923					$ 6	4,917
Exercise of stock options, shares						607
Issuance of common stock	249,750					$ 270	249,480
Issuance of common stock, shares						27,014
Stock-based compensation	17,522						17,522
Comprehensive loss:
Net loss	(293,190)										(293,190)
Ending balance at Dec. 31, 2007	364,100	$ 0	$ 0	0	0	$ 1,014	1,444,125	0	0	0	(1,081,039)
Ending balance, shares at Dec. 31, 2007		0	0			101,381
Issuance of common shares under Employee Stock Purchase Plan	900					$ 4	896
Issuance of common shares under Employee Stock Purchase Plan, shares						349
Issuance of stock award to employee/consultants	(18)						(18)
Issuance of stock award to employee/consultants, shares						30
Issuance of common shares from the release of restricted stock units	(315)					$ 2	(317)
Issuance of common shares from the release of restricted stock units, shares						248
Stock-based compensation	24,811						24,811
Comprehensive loss:
Net loss	(303,039)										(303,039)
Unrealized gain on available-for-sale securities	295									295
Comprehensive loss	(302,744)
Ending balance at Dec. 31, 2008	86,734	$ 0	$ 0	0	0	$ 1,020	1,469,497	0	0	295	(1,384,078)
Ending balance, shares at Dec. 31, 2008		0	0			102,008
Issuance of common shares under Employee Stock Purchase Plan	1,400					$ 3	1,397
Issuance of common shares under Employee Stock Purchase Plan, shares						323
Issuance of common shares from the release of restricted stock units	(7,001)					$ 22	(7,023)
Issuance of common shares from the release of restricted stock units, shares						2,240
Exercise of stock options	383					$ 1	382
Exercise of stock options, shares						94
Issuance of common stock	59,724					$ 84	59,640
Issuance of common stock, shares						8,360
Stock-based compensation	20,219						20,219
Comprehensive loss:
Net loss	(220,104)										(220,104)
Unrealized gain on available-for-sale securities	(581)									(581)
Unrealized loss on foreign currency translation	5									5
Comprehensive loss	(220,680)
Ending balance at Dec. 31, 2009	(59,221)	$ 0	$ 0	0	0	$ 1,130	1,544,112	0	0	(281)	(1,604,182)
Ending balance, shares at Dec. 31, 2009		0	0			113,025
Issuance of common shares under Employee Stock Purchase Plan	1,605					$ 3	1,602
Issuance of common shares under Employee Stock Purchase Plan, shares						288
Issuance of common shares from the release of restricted stock units	(3,392)					$ 10	(3,402)
Issuance of common shares from the release of restricted stock units, shares						962
Issuance of stock under share lending agreement	161					$ 90	71
Issuance of stock under share lending agreement, shares						9,000
Exercise of stock options	924					$ 3	921
Exercise of stock options, shares						318
Issuance of common stock	14,335					$ 21	14,314
Issuance of common stock, shares						2,100
Conversion of notes payable	16,681					$ 21	16,660
Conversion of notes payable, shares						2,100
Stock-based compensation	13,580						13,580
Comprehensive loss:
Net loss	(170,560)										(170,560)
Unrealized gain on available-for-sale securities	361									361
Unrealized loss on foreign currency translation	(6)									(6)
Comprehensive loss	(170,205)
Ending balance at Dec. 31, 2010	(185,532)	$ 0	$ 0	0	0	$ 1,278	1,587,858	0	0	74	(1,774,742)
Ending balance, shares at Dec. 31, 2010		0	0			127,793
Issuance of common shares under Employee Stock Purchase Plan	769					$ 3	766
Issuance of common shares under Employee Stock Purchase Plan, shares						283
Issuance of common shares from the release of restricted stock units	(543)					$ 4	(547)
Issuance of common shares from the release of restricted stock units, shares						433
Exercise of stock options	628					$ 2	626
Exercise of stock options, shares						214
Issuance of common stock	9,540					$ 14	9,526
Issuance of common stock, shares						1,400
Conversion of notes payable	11,116					$ 14	11,102
Conversion of notes payable, shares						1,400
Stock-based compensation	11,204						11,204
Comprehensive loss:
Net loss	(160,804)										(160,804)
Unrealized gain on available-for-sale securities	(27)									(27)
Unrealized loss on foreign currency translation	(3)									(3)
Comprehensive loss	(160,834)
Ending balance at Dec. 31, 2011	$ (313,652)	$ 0	$ 0	$ 0	$ 0	$ 1,315	$ 1,620,535	$ 0	$ 0	$ 44	$ (1,935,546)
Ending balance, shares at Dec. 31, 2011		0	0			131,523

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended			251 Months Ended
	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2009	Dec. 31, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (160,804)	$ (170,560)	$ (220,104)	$ (1,935,546)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	15,912	17,324	18,725	112,375
Stock-based compensation expense	11,204	13,580	20,219	124,626
Stock expense for shares issued pursuant to research agreement				3,018
Loss (gain) on sale, abandonment/disposal or impairment of property and equipment	(4)		12,869	23,571
Accrued interest on investments, net of amortization of premiums (discounts)			(12)	(191)
In-process research and development				19,726
Goodwill impairment				151,428
Loss on available-for-sale securities		644		873
Other, net	(3)	(6)	5	1,101
Changes in assets and liabilities:
State research and development credit exchange receivable	830	1,115	582	(473)
Prepaid expenses and other current assets	224	823	2,311	(1,025)
Other assets	87	267	(36)	(230)
Accounts payable	2,672	(4,287)	(6,371)	4,374
Accrued expenses and other current liabilities	6,045	(7,554)	(12,271)	19,974
Other liabilities				(2)
Net cash used in operating activities	(123,837)	(148,654)	(184,083)	(1,476,401)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities		(4,178)	(2,000)	(796,779)
Sales and maturities of marketable securities	3,828	2,000	17,800	796,393
Purchase of property and equipment	(6,858)	(9,542)	(18,852)	(327,109)
Proceeds from sale of property and equipment	93			377
Net cash used in investing activities	(2,937)	(11,720)	(3,052)	(327,118)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock and warrants	10,941	17,025	61,507	1,230,021
Collection of Series C convertible preferred stock subscriptions receivable				50,000
Issuance of Series B convertible preferred stock for cash				15,000
Cash received for common stock to be issued				3,900
Repurchase of common stock				(1,028)
Put shares sold to majority stockholder				623
Borrowings under lines of credit				4,220
Proceeds from notes receivables				1,742
Borrowings on notes payable from related party	53,000	87,000	135,000	375,000
Principal payments on notes payable to principal stockholder				(70,000)
Borrowings on notes payable				3,460
Principal payments on notes payable				(1,667)
Proceeds from senior convertible notes		95,783		207,050
Payment of employment taxes related to vested restricted stock units	(547)	(3,392)	(7,001)	(12,121)
Net cash provided by financing activities	63,394	196,416	189,506	1,806,200
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(63,380)	36,042	2,371	2,681
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	66,061	30,019	27,648
CASH AND CASH EQUIVALENTS, END OF PERIOD	2,681	66,061	30,019	2,681
SUPPLEMENTAL CASH FLOWS DISCLOSURES:
Cash paid for income taxes				26
Interest paid in cash, net of amounts capitalized	17,248	13,662	8,131	49,397
Accretion on redeemable preferred stock				(952)
Issuance of common stock upon conversion of notes payable				3,331
Increase in additional paid-in capital resulting from merger				171,154
Issuance of common stock for notes receivable				2,758
Issuance of put option by stockholder				(2,949)
Put option redemption by stockholder				1,921
Issuance of Series C convertible preferred stock subscriptions				50,000
Issuance of Series A redeemable convertible preferred stock				4,296
Conversion of Series A redeemable convertible preferred stock				(5,248)
Non-cash construction in progress and property and equipment	250	1,742	$ 620	250
Cancellation of principal on note payable to related party	$ 11,116	$ 16,681		$ 27,797

Consolidated Statements of Cash Flows (Parenthetical) $ in Millions	1 Months Ended
	Aug. 31, 2004 USD ($)
Series B Convertible Preferred Stock
Converted to Common Stock	$ 15.0
Series C Convertible Preferred Stock
Converted to Common Stock	$ 50.0

Description of business and basis of presentation

12 Months Ended

Dec. 31, 2011

Description of business and basis of presentation [Abstract]

Description of business and basis of presentation

1. Description of business and basis of presentation

Business — MannKind Corporation and subsidiaries (the “Company”) is a biopharmaceutical company focused on the discovery and development of therapeutic products for diseases such as diabetes and cancer. The Company’s lead product candidate, AFREZZA, (insulin human [rDNA origin]) inhalation powder, is an ultra rapid-acting insulin therapy in late-stage clinical investigation for the treatment of adults with type 1 or type 2 diabetes for the control of hyperglycemia.

AFREZZA consists of the Company’s proprietary Technosphere particles onto which insulin molecules are loaded. These loaded particles are then aerosolized and inhaled deep into the lung using the Company’s AFREZZA inhaler.

Basis of Presentation — The Company is considered to be in the development stage as its primary activities since incorporation have been establishing its facilities, recruiting personnel, conducting research and development, business development, business and financial planning, and raising capital. Since its inception through December 31, 2011 the Company has reported accumulated net losses of $1.9 billion, which include a goodwill impairment charge of $151.4 million (see Note 2), and cumulative negative cash flow from operations of $1.5 billion. At December 31, 2011 the Company’s capital resources consisted of cash, cash equivalents, and marketable securities of $3.2 million and $45.0 million of available borrowings under the loan agreement with an entity controlled by the Company’s principal stockholder (see Note 7). On February 8, 2012, the Company sold $86.3 million worth of units in an underwritten public offering, with each unit consisting of one share of common stock and a warrant to purchase 0.6 of a share of common stock, and reflects the full exercise of an over-allotment option granted to the underwriters. Net proceeds from this offering were approximately $80.6 million, excluding any warrant exercises. Based upon the Company’s current expectations, management believes the Company’s existing capital resources will enable it to continue planned operations into the fourth quarter of 2012. However, the Company cannot provide assurances that its plans will not change or that changed circumstances will not result in the depletion of its capital resources more rapidly than it currently anticipates. The Company will need to raise additional capital, whether through the sale of equity or debt securities, a strategic business collaboration with a pharmaceutical company, the establishment of other funding facilities, licensing arrangements, asset sales or other means, or an increase in the borrowings available under the loan arrangement with its related party, in order to continue the development and commercialization of AFREZZA and other product candidates and to support its other ongoing activities. This raises substantial doubt about the Company’s ability to continue as a going concern.

On December 12, 2001, the stockholders of AlleCure Corp. (“AlleCure”) and CTL ImmunoTherapies Corp. (“CTL”) voted to exchange their shares for shares of Pharmaceutical Discovery Corporation (“PDC”). Upon approval of the merger, PDC then changed its name to MannKind Corporation. PDC was incorporated in the State of Delaware on February 14, 1991. The stockholders of PDC did not vote on the merger. At the date of the merger, Mr. Alfred Mann owned 76% of PDC, 59% of AlleCure and 69% of CTL. Accordingly, only the minority interest of AlleCure and CTL was stepped up to fair value using the purchase method of accounting. As a result of this purchase accounting, in-process research and development of $19.7 million and goodwill of $151.4 million were recorded at the entity level. The historical basis of PDC and the historical basis relating to the ownership interests of Mr. Mann in AlleCure and CTL have been reflected in the financial statements. For periods prior to December 12, 2001, the results of operations have been presented on a combined basis. All references in the accompanying financial statements and notes to the financial statements to number of shares, sales price and per share amounts of the Company’s capital stock have been retroactively restated to reflect the share exchange ratios for each of the entities that participated in the merger.

For periods subsequent to December 12, 2001, the accompanying financial statements have been presented on a consolidated basis and include the wholly-owned subsidiaries, AlleCure and CTL. On December 31, 2002, AlleCure and CTL merged with and into MannKind and ceased to be separate entities.

Principles of Consolidation — The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Intercompany balances and transactions have been eliminated.

Segment Information — In accordance with Accounting Standards Codification (“ASC”) 280-10-50 Segment Reporting previously Financial Accounting Standards Board (“FASB”) Statement No. 131, Disclosures about Segments of an Enterprise and Related Information, operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker in making decisions regarding resource allocation and assessing performance. To date, the Company has viewed its operations and manages its business as one segment operating primarily in the United States of America.

- Definition

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 2-6
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Name Statement of Position (SOP)
-Publisher AICPA
-Number 94-6
-Paragraph 10
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
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-Publisher FASB
-Number 46R
-Paragraph 4, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
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Reference 15: http://www.xbrl.org/2003/role/presentationRef
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Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
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+ Details

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

Financial Statement Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents — The Company considers all highly liquid investments with a purchased maturity date of three months or less to be cash equivalents.

Concentration of Credit Risk — Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents and marketable securities. Cash and cash equivalents consist primarily of interest-bearing accounts and are regularly monitored by management and held in high credit quality institutions. Marketable securities consist of $350,000 of certificates of deposit held as collateral for commercial credit card programs and a common stock investment.

Marketable Securities — The Company accounts for marketable securities as available-for-sale, in accordance with ASC 320-10 Investments- Debt and Equity Securities, previously FASB Statement No. 115, Accounting for Certain Debt and Equity Securities. Unrealized holding gains and losses for available-for-sale securities are reported as a separate component of stockholders’ equity until realized. The Company reviews the portfolio for other than temporary impairment in accordance with ASC 320-10-35 Investment- Debt and Equity Securities, previously Emerging Issues Task Force (“EITF”) Issue No. 03-01, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments and FASB Staff Position No. 115-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments. Investments in marketable securities are recorded at fair value.

State Research and Development Credit Exchange Receivable — The State of Connecticut provides certain companies with the opportunity to exchange certain research and development income tax credit carryforwards for cash in exchange for foregoing the carryforward of the research and development credits. The program provides for an exchange of research and development income tax credits for cash equal to 65% of the value of corporation tax credit available for exchange. Estimated amounts receivable under the program are recorded as a reduction of research and development expenses.

Fair Value of Financial Instruments — The Company utilizes fair value measurement guidance prescribed by GAAP to value its financial instruments. The guidance includes a definition of fair value, prescribes methods for measuring fair value, establishes a fair value hierarchy based on the inputs used to measure fair value and expands disclosures about the use of fair value measurements. The valuation techniques utilized are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy:

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

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

Level 3 – Significant inputs to the valuation model are unobservable.

Goodwill and Identifiable Intangibles — As a result of the merger with AlleCure and CTL on December 12, 2001, as described in Note 1, goodwill of $151.4 million was recorded at the entity level in 2001. Upon adoption of FASB Statement No. 142, Goodwill and Other Intangible Assets, now codified as ASC 350-10 Intangibles- Goodwill and Other, the Company adopted a policy of testing goodwill and intangible assets with indefinite lives for impairment at least annually, as of December 31, with any related impairment losses being recognized in earnings when identified. In December 2002 the Company concluded that the major AlleCure product development program should be terminated and that the clinical trials of the CTL product should be halted and returned to the research stage. As a result of this determination, the Company closed the CTL facility and reduced headcount for AlleCure and CTL by approximately 50%. In connection with the annual test for impairment of goodwill as of December 31, 2002, the Company determined that on the basis of the internal study, the goodwill recorded for the AlleCure and CTL units was potentially impaired. The Company performed the second step of the annual impairment test as of December 31, 2002 for each of the potentially impaired reporting units and estimated the fair value of the AlleCure and CTL programs using the expected present value of future cash flows which were expected to be negligible. Accordingly, the goodwill balance of $151.4 million was determined to be fully impaired and an impairment loss was recorded in 2002. Subsequent to December 31, 2002, the Company had no goodwill or intangibles with indefinite lives included on its balance sheets.

Property and Equipment — Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized over the term of the lease or the service lives of the improvements, whichever is shorter. Assets under construction are not depreciated until placed into service.

Impairment of Long-Lived Assets — The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable in accordance with ASC 360-10-35 Property Plant and Equipment, previously FASB Statement No. 144, Accounting for the Impairment or Disposal of Long Lived-Assets. Assets are considered to be impaired if the carrying value may not be recoverable based upon management’s assessment of the following events or changes in circumstances:

•

significant changes in the Company’s strategic business objectives and utilization of the assets;

•

a determination that the carrying value of such assets can not be recovered through undiscounted cash flows;

•

loss of legal ownership or title to the assets;

•

a significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (asset group), including an adverse action or assessment by a regulator; or

•

the impact of significant negative industry or economic trends.

If the Company believes an asset to be impaired, the impairment recognized is the amount by which the carrying value of the assets exceeds the fair value of the assets. Any write-downs would be treated as permanent reductions in the carrying amount of the asset and an operating loss would be recognized. No asset impairment was recognized during the years ended December 31, 2009, 2010 and 2011, respectively.

Accounts Payable and Accrued Expenses — All liabilities, including accounts payable and accrued expenses, are recorded consistent with the definition of liabilities and accrual accounting.

Income Taxes — Provisions for federal, foreign, state, and local income taxes are calculated on pre-tax income based on current tax law and include the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Deferred income tax assets and liabilities are recorded for the expected future tax consequences of temporary differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. A valuation allowance is recorded to reduce net deferred income tax assets to amounts that are more likely than not to be realized (see Note 16). If a tax position does not meet the minimum statutory threshold to avoid payment of penalties, the Company recognizes an expense for the amount of the penalty in the period the tax position is claimed in the tax return of the company. The Company recognizes interest accrued related to unrecognized tax benefits in income tax expense, if any. Penalties, if probable and reasonably estimable, are recognized as a component of income tax expense.

Income tax positions are considered for uncertainty in accordance with ASC 740-10-25 Income Taxes, previously FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109 (“FIN 48”). The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. Therefore, no liabilities for uncertain income tax positions have been recorded.

Significant management judgment is involved in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against net deferred tax assets. Due to uncertainties related to deferred tax assets as a result of the history of operating losses, a valuation allowance has been established against the gross deferred tax asset balance. The valuation allowance is based on management’s estimates of taxable income by jurisdiction in which the Company operates and the period over which deferred tax assets will be recoverable. In the event that actual results differ from these estimates or the Company adjusts these estimates in future periods, a change in the valuation allowance may be needed, which could materially impact the Company’s financial position and results of operations.

Contingencies — Contingencies are recorded in accordance with ASC 450 Contingencies, previously FASB Statement No. 5, Accounting for Contingencies. Accordingly, the Company records a loss contingency for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

Stock-Based Compensation — As of December 31, 2011, the Company had three active stock-based compensation plans, which are described more fully in Note 13. The Company accounts for all share-based payments to employees, including grants of stock awards and the compensatory elements of the employee stock purchase plan in accordance with ASC 718 Compensation- Stock Compensation (“ASC 718”), previously FASB Statement No. 123R Share-based Payment. ASC 718 requires all share-based payments to employees, including grants of stock options, restricted stock units, performance-based awards and the compensatory elements of employee stock purchase plans, to be recognized in the income statement based upon the fair value of the awards at the grant date. The Company uses the Black-Scholes option valuation model to estimate the grant date fair value of employee stock options and the compensatory elements of employee stock purchase plans. Restricted stock units are valued based on the market price on the grant date. The Company evaluates stock awards with performance conditions as to the probability that the performance conditions will be met and estimate the date at which the performance conditions will be met in order to properly recognize stock-based compensation expense over the requisite service period.

Nonemployee Stock-Based Compensation — Stock-based compensation expense related to stock options granted and common stock issued to nonemployees is recognized as the stock options are earned. The Company believes that the estimated fair value of the stock options is more readily measurable than the fair value of the services received. The fair value of stock options granted to nonemployees is calculated at each grant date and remeasured at each reporting date. The stock-based compensation expense related to a grant will fluctuate as the fair value of our common stock fluctuates over the period from the grant date to the vesting date.

Warrants — The Company has issued warrants to purchase shares of its common stock. Warrants have been accounted for as equity in accordance with the provisions of ASC 815-40 Derivatives and Hedging, Contracts in an Entity’s Own Stock, previously EITF Issue No. 00-19: Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock. No warrants were outstanding as of December 31, 2010 and 2011, respectively. See Note 19 – Subsequent events for discussion of warrants issued subsequent to December 31, 2011.

Comprehensive Income (Loss) — Other comprehensive income (loss) (OCI) is recorded in accordance with ASC 220-10-45 Comprehensive Income, previously FASB Statement No. 130, Reporting Comprehensive Income, which requires that all components of comprehensive income (loss) be reported in the financial statements in the period in which they are recognized. OCI includes certain changes in stockholders’ equity that are excluded from net income. Specifically, the Company includes in OCI unrealized gains and losses on its available-for-sale securities and cumulative translation gains and losses.

Research and Development Expenses — Research and development expenses consist primarily of costs associated with the clinical trials of the Company’s product candidates, manufacturing supplies and other development materials, including raw material purchases of insulin, compensation and other expenses for research and development personnel, costs for consultants and related contract research, facility costs, and depreciation. Research and development costs, which are net of any tax credit exchange recognized for the Connecticut state research and development credit exchange program, are expensed as incurred consistent with ASC 730-10 Research and Development, previously FASB Statement No. 2, Accounting for Research and Development Costs.

Clinical Trial Expenses — Clinical trial expenses, which are reflected in research and development expenses in the accompanying statements of operations, result from obligations under contracts with vendors, consultants, and clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The appropriate level of trial expenses are reflected in the Company’s financial statements by matching period expenses with period services and efforts expended. These expenses are recorded according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. Clinical trial accrual estimates are determined through discussions with internal clinical personnel and outside service providers as to the progress or state of completion of trials, or the services completed. Service provider status is then compared to the contractually obligated fee to be paid for such services. During the course of a clinical trial, the Company may adjust the rate of clinical expense recognized if actual results differ from management’s estimates. The date on which certain services commence, the level of services performed on or before a given date and the cost of the services are often judgmental.

Interest Expense — Interest costs are expensed as incurred, except to the extent such interest is related to construction in progress, in which case interest is capitalized. Interest expense, net of interest capitalized, for the years ended December 31, 2009, 2010 and 2011 was $10.4 million, $17.4 million and $21.8 million, respectively. Interest costs capitalized were not significant for the years ended December 31, 2009 and 2010 and were $0.4 million for the year ended December 31, 2011.

Net Loss Per Share of Common Stock — Basic net loss per share excludes dilution for potentially dilutive securities and is computed by dividing loss applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Potentially dilutive securities are excluded from the computation of diluted net loss per share for all of the periods presented in the accompanying statements of operations because the reported net loss in each of these periods results in their inclusion being antidilutive.

Potentially dilutive securities outstanding are summarized as follows:


	December 31,
	2009		2010		2011
Exercise of common stock options		6,403,498		7,760,833		10,082,351
Conversion of senior convertible notes into common stock		5,117,523		19,826,113		19,826,113
Exercise of common stock warrants		2,882,873		—		—
Vesting of restricted stock units		3,419,533		3,271,644		4,140,388

Exit or Disposal Activities — The obligations related to exit or disposal obligations, including reductions in force, are accounted for in accordance with ASC 420-10-30 Exit or Disposal Cost Obligations, (“ASC 420-10-30”), previously FASB Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities and EITF Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Costs to Exit and Disposal Activity (Including Certain Costs Incurred in a Restructuring). In accordance with ASC 420-10-30, a liability for costs associated with an exit or disposal activity is recognized when the liability is incurred and establishes that fair value is the objective for initial measurements of the liability.

Recently Issued Accounting Standards — In June 2011, the FASB issued Accounting Standards Update No. 2011-05 for Comprehensive Income (Topic 220): “Presentation of Comprehensive Income”. This update improves the comparability, consistency and transparency of financial reporting and increases the prominence of items reported in other comprehensive income. This update is effective for interim and annual periods beginning after December 15, 2011. The adoption of this update will have an impact on the disclosure of comprehensive income on the Company’s consolidated financial statements.

In May 2011, the FASB issued Accounting Standards Update No. 2011-04 for Fair Value Measurement (Topic 820): “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs”. This update addresses how to measure fair value and requires new disclosures about fair value measurements. The amendments in this update are effective for interim and annual periods beginning after December 15, 2011. The adoption of this update will have an impact on the disclosure of fair value measurements on the Company’s consolidated financial statements.

Investment in securities

12 Months Ended

Dec. 31, 2011

Investment in securities [Abstract]

Investment in securities

3. Investment in securities

The following is a summary of the available-for-sale securities classified as current assets (in thousands).


	December 31, 2010						December 31, 2011
	Cost Basis		Gross Unrealized Gain		Fair Value		Cost Basis		Gross Unrealized Gain		Fair Value
Available-for-sale securities	$	4,295	$	75	$	4,370	$	467	$	48	$	515

The Company’s available-for-sale securities at December 31, 2010 consist principally of $4.2 million certificates of deposit with a maturity greater than 90 days, held as collateral for foreign exchange hedging instruments, and a common stock investment. The Company’s available-for-sale securities at December 31, 2011 consist principally of a $350,000 certificate of deposit with a maturity greater than 90 days, held as collateral for commercial credit card programs, and a common stock investment. During the year ended December 31, 2010, the Company recognized a $0.6 million other-than-temporary impairment loss on its common stock investment due to the length of time and the extent to which the fair value has been less than the amortized cost basis. The Company’s policy is to maintain a highly liquid short-term investment portfolio. Proceeds from the sales and maturities of available-for-sale securities amounted to approximately $17.8 million, $2.0 million and $3.8 million for the years ended December 31, 2009, 2010 and 2011, respectively. Gross realized gains and losses for available-for-sale securities were insignificant for the years ended December 31, 2009, 2010 and 2011. Gross realized gains and losses for available-for-sale securities are recorded as other income (expense). The cost of securities sold is based on the specific identification method. Unrealized gains and losses for available-for-sale securities were a gain of $361,000 and $27,000 for the years ended December 31, 2010 and 2011, respectively. Unrealized gains and losses are included in other comprehensive income (loss).

- Definition

Tabular disclosure of investments in certain debt and equity securities (and certain other trading assets) which include all debt and equity securities (other than those equity securities accounted for under the equity or cost methods of accounting) with readily determinable fair values. Other trading assets include assets that are carried on the balance sheet at fair value and held for trading purposes. A debt security represents a creditor relationship with an enterprise that is in the form of a security. Debt securities include, among other items, US Treasury securities, US government securities, municipal securities, corporate bonds, convertible debt, commercial paper, and all securitized debt instruments. An equity security represents an ownership interest in an enterprise or the right to acquire or dispose of an ownership interest in an enterprise at fixed or determinable prices. Equity securities include, among other things, common stock, certain preferred stock, warrant rights, call options, and put options, but do not include convertible debt. An entity may opt to provide the reader with additional narrative text to better understand the nature of investments in debt and equity securities (and other trading assets).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 115
-Paragraph 3, 19, 20, 21, 22, 137
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-Name Accounting Standards Codification
-Topic 320
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6872113&loc=d3e27232-111563

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Debt Security
-URI http://asc.fasb.org/extlink&oid=6509901
-Topic 320

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Equity Security
-URI http://asc.fasb.org/extlink&oid=6511694
-Topic 320

+ Details

State research and development credit exchange receivable

12 Months Ended

Dec. 31, 2011

State research and development credit exchange receivable [Abstract]

State research and development credit exchange receivable

4. State research and development credit exchange receivable

The State of Connecticut provides certain companies with the opportunity to exchange certain research and development income tax credit carryforwards for cash in exchange for forgoing the carryforward of the research and development income tax credits. The program provides for an exchange of research and development income tax credits for cash equal to 65% of the value of corporation tax credit available for exchange. Estimated amounts receivable under the program are recorded as a reduction of research and development expenses. During the years ended December 31, 2009, 2010 and 2011, research and development expenses were offset by $1.3 million, $385,000 and $609,000, respectively, in connection with the program.

Property and equipment

12 Months Ended

Dec. 31, 2011

Property and equipment [Abstract]

Property and equipment

5. Property and equipment

Property and equipment consist of the following (dollar amounts in thousands):


	Estimated Useful Life (Years)		December 31,
	Estimated Useful Life (Years)		2010			2011
Land		—	$	5,273		$	5,273
Buildings		39-40		54,948			54,948
Building improvements		5-40		113,489			114,247
Machinery and equipment		3-15		73,812			83,476
Furniture, fixtures and office equipment		5-10		5,369			5,249
Computer equipment and software		3		16,306			13,049
Leasehold improvements				53			53
Construction in progress				14,496			8,498

				283,746			284,793
Less accumulated depreciation and amortization				(81,390	)		(91,764	)

Property and equipment — net			$	202,356		$	193,029

Leasehold improvements are amortized over four years which is the shorter of the term of the lease or the service lives of the improvements. Depreciation and amortization expense related to property and equipment for the years ended December 31, 2009, 2010 and 2011, and the cumulative period from February 14, 1991 (date of inception) to December 31, 2011 was $18.2 million, $16.5 million, $14.6 million and $108.8 million respectively.

No asset impairment was recognized during the years ended December 31, 2009, 2010 and 2011, respectively.

In December 2009, the Company recognized a loss on disposal of approximately $12.8 million in research and development expense related to the abandonment of first-generation inhaler specific assets which would no longer be used as the Company pursued the commercialization of the next-generation device.

- Definition

The entire disclosure for long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale. Examples include land, buildings, machinery and equipment, and other types of furniture and equipment including, but not limited to, office equipment, furniture and fixtures, and computer equipment and software. This disclosure may include property plant and equipment accounting policies and methodology, a schedule of property, plant and equipment gross, additions, deletions, transfers and other changes, depreciation, depletion and amortization expense, net, accumulated depreciation, depletion and amortization expense and useful lives, income statement disclosures, assets held for sale and public utility disclosures.

+ References + Details

Accrued expenses and other current liabilities

12 Months Ended

Dec. 31, 2011

Accrued expenses and other current liabilities [Abstract]

Accrued expenses and other current liabilities

6. Accrued expenses and other current liabilities

Accrued expenses and other current liabilities are comprised of the following (in thousands):


	December 31,
	2010		2011
Salary and related expenses	$	5,624	$	8,997
Research and clinical trial costs		668		2,383
Accrued interest		4,993		8,262
Construction in progress		149		—
Other		3,406		1,094

Accrued expenses and other current liabilities	$	14,840	$	20,736

Related-party loan arrangement

12 Months Ended

Dec. 31, 2011

Related-party loan arrangement

7. Related-party loan arrangement

In October 2007, the Company entered into a $350.0 million loan arrangement with its principal stockholder, pursuant to which the Company can borrow up to a total of $350.0 million. On February 26, 2009, the promissory note underlying the loan arrangement was revised as a result of the principal stockholder being licensed as a finance lender under the California Finance Lenders Law. Accordingly, the lender was revised to The Mann Group LLC, an entity controlled by the Company’s principal stockholder. Interest will accrue on each outstanding advance at a fixed rate equal to the one-year LIBOR rate as reported by the Wall Street Journal on the date of such advance plus 3% per annum and will be payable quarterly in arrears. The borrowing rate was 4.7% and 4.6% at December 31, 2010 and 2011, respectively. In August 2010, the Company amended and restated the existing promissory note evidencing the loan arrangement with The Mann Group to extend the maturity date from December 31, 2011 to December 31, 2012. In January, 2012, the Company amended the note with The Mann Group to extend the maturity date of the $350.0 million loan arrangement from December 31, 2012 to March 31, 2013. The Company can continue to borrow under the amended terms of the note until June 30, 2012 (see Note 19 — Subsequent events). Under the amended and restated promissory note, The Mann Group can require the Company to prepay up to $200.0 million in advances that have been outstanding for at least 12 months. If The Mann Group exercises this right, the Company will have 90 days after The Mann Group provides written notice (or the number of days to maturity of the note if less than 90 days) to prepay such advances. In August 2010, the Company entered into a letter agreement confirming a previous commitment by The Mann Group to not require the Company to prepay amounts outstanding under the amended and restated promissory note if the prepayment would require the Company to use its working capital resources, including the proceeds from the sale of its 5.75% Senior Convertible Notes due 2015 (see Note 8). In the event of a default, all unpaid principal and interest either becomes immediately due and payable or may be accelerated at The Mann Group’s option, and the interest rate will increase to the one-year LIBOR rate calculated on the date of the initial advance or in effect on the date of default, whichever is greater, plus 5% per annum. All borrowings under the loan arrangement are unsecured. The loan arrangement contains no financial covenants.

On August 10, 2010, the Company entered into a common stock purchase agreement with The Mann Group. Under this common stock purchase agreement, the Company was required to issue and sell, and The Mann Group was obligated to purchase, the same number of shares of the Company’s common stock that Seaside 88, LP (“Seaside”) purchased on each closing date under its agreement with the Company. The price of the shares that the Company sold to The Mann Group under the agreement was equal to the greater of $7.15 per share (the closing bid price of the Company’s common stock on August 10, 2010) and the closing bid price of the Company’s common stock on the trading day immediately preceding the applicable closing date. The aggregate purchase price for the shares of common stock the Company issued and sold to The Mann Group was paid by canceling an equal amount of the outstanding principal under the $350.0 million loan arrangement provided by The Mann Group. The August 2010 amendment and restatement of the Company’s promissory note issued to The Mann Group in connection with the loan arrangement also provided for the cancellation of indebtedness under the note as described above and the elimination of the Company’s ability to reborrow under the note the amount of any indebtedness that was cancelled. The common stock purchase agreement with The Mann Group terminated upon termination of the Seaside agreement in the quarter ended September 30, 2011.

In the fourth quarter of 2010, the Company issued and sold a total of 2,100,000 shares of common stock to Seaside for net proceeds of $14.1 million in accordance with the Company’s common stock purchase agreement with Seaside. During the quarter ended March 31, 2011, the Company issued and sold a total of 1,400,000 shares of common stock to Seaside for net proceeds of $9.7 million. No additional shares of common stock were sold to Seaside under this agreement subsequent to the quarter ended March 31, 2011. As of December 31, 2011, the Company had issued and sold a total of 3,500,000 shares of common stock to Seaside for net proceeds of $23.8 million in accordance with the agreement. The agreement with Seaside terminated during the quarter ended September 30, 2011. Concurrently, with the sales to Seaside, the Company issued and sold a total of 2,100,000 and 1,400,000 shares of common stock to The Mann Group, an entity controlled by the Company’s principal stockholder, in 2010 and 2011, respectively, for a total purchase price of $16.7 million and $11.1 million, respectively, which was paid by the cancellation of outstanding principal under the Company’s amended and restated promissory note with The Mann Group.

The amount outstanding under the arrangement was $235.3 million and $277.2 million at December 31, 2010 and 2011, respectively. As of December 31, 2011, the Company had accrued interest of $5.9 million related to the amount outstanding and had $45.0 million of available borrowings under the loan agreement. Interest expense on the Company’s note payable to a related party for the years ended December 31, 2009, 2010 and 2011 was $5.7 million, $10.2 million and $10.9 million, respectively. Since December 31, 2011, the Company borrowed $6.3 million under the loan agreement and $38.8 million remains available to borrow.

- Definition

The entire disclosure for related party transactions, including the nature of the relationship(s), a description of the transactions, the amount of the transactions, the effects of any change in the method of establishing the terms of the transaction from the previous period, stated interest rate, expiration date, terms and manner of settlement per the agreement with the related party, and amounts due to or from related parties. If the entity and one or more other entities are under common ownership or management control and this control affects the operating results or financial position, disclosure includes the nature of the control relationship even if there are no transactions between the entities. Disclosure may also include the aggregate amount of current and deferred tax expense for each statement of earnings presented where the entity is a member of a group that files a consolidated tax return, the amount of any tax related balances due to or from affiliates as of the date of each statement of financial position presented, the principal provisions of the method by which the consolidated amount of current and deferred tax expense is allocated to the members of the group and the nature and effect of any changes in that method. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 4
-Section 08
-Paragraph k

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 3A
-Section 04
-Paragraph b

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 57
-Paragraph 1-4
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39622-107864

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39549-107864

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39603-107864

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(k))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39691-107864

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 850
-SubTopic 10
-Section 50
-Paragraph 5
-URI http://asc.fasb.org/extlink&oid=6457730&loc=d3e39678-107864

+ Details

Senior convertible notes

12 Months Ended

Dec. 31, 2011

Senior convertible notes [Abstract]

Senior convertible notes

8. Senior convertible notes

Senior convertible notes consist of the following (in thousands):


	December 31,
	2010			2011
Notes due 2013
Principal amount	$	115,000		$	115,000
Unaccreted debt issuance expense		(1,699	)		(1,140	)

Net carrying amount		113,301			113,860

Notes due 2015
Principal amount	$	100,000		$	100,000
Unaccreted debt issuance expense		(3,966	)		(3,218	)

Net carrying amount		96,034			96,782

Senior convertible notes	$	209,335		$	210,642

On August 18, 2010, the Company completed a Rule 144A offering of $100.0 million aggregate principal amount of 5.75% Senior Convertible Notes due 2015. The Notes due 2015 are governed by the terms of an indenture dated as of August 24, 2010 (the “2015 Note Indenture”). The Notes due 2015 bear interest at the rate of 5.75% per year on the principal amount, payable in cash semi-annually in arrears on February 15 and August 15 of each year, beginning February 15, 2011. As of December 31, 2010 and 2011, the Company had accrued interest of $2.0 million and $2.2 million, respectively related to the Notes due 2015. The Notes due 2015 are general, unsecured, senior obligations of the Company and effectively rank junior in right of payment to all of the Company’s secured debt, to the extent of the value of the assets securing such debt, and to the debt and all other liabilities of the Company’s subsidiaries. The maturity date of the Notes due 2015 is August 15, 2015 and payment is due in full on that date for unconverted securities. Holders of the Notes due 2015 may convert, at any time prior to the close of business on the business day immediately preceding the stated maturity date, any outstanding principal into shares of the Company’s common stock at an initial conversion rate of 147.0859 shares per $1,000 principal amount, which is equal to a conversion price of approximately $6.80 per share, subject to adjustment. Except in certain circumstances, if the Company undergoes a fundamental change: (1) the Company will pay a make-whole premium on the Notes due 2015 converted in connection with a fundamental change by increasing the conversion rate on such Notes, which amount, if any, will be based on the Company’s common stock price and the effective date of the fundamental change, and (2) each holder of Notes due 2015 will have the option to require the Company to repurchase all or any portion of such holder’s Notes at a repurchase price of 100% of the principal amount of the Notes to be repurchased plus accrued and unpaid interest, if any. The Company may elect to redeem some or all of the Notes due 2015 if the closing stock price has equaled 150% of the conversion price for at least 20 of the 30 consecutive trading days ending on the trading day before the Company’s redemption notice. The redemption price will equal 100% of the principal amount of the Notes due 2015 to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date, plus a make-whole payment equal to the sum of the present values of the remaining scheduled interest payments through and including August 15, 2015 (other than interest accrued up to, but excluding, the redemption date). The Company will be obligated to make the make-whole payment on all the Notes due 2015 called for redemption and converted during the period from the date the Company mailed the notice of redemption to and including the redemption date. The Company may elect to make the make-whole payment in cash or shares of its common stock, subject to certain limitations. Under the terms of the 2015 Note Indenture, the conversion option can be net-share settled and the maximum number of shares that could be required to be delivered under the contract, including the make-whole shares, is fixed and less than the number of authorized and unissued shares less the maximum number of shares that could be required to be delivered during the contract period under existing commitments. The Company performed an analysis at the time of the offering of the Notes due 2015 and each reporting date since and has concluded that the number of available authorized shares at the time of the offering and each subsequent reporting date was in excess of the maximum number of shares that could be required to be delivered during the contract period under existing commitments, including the outstanding convertible notes, stock options, restricted stock units, warrants and other potential common stock issuances.

The Company incurred approximately $4.2 million in issuance costs which are recorded as an offset to the Notes due 2015 in the accompanying condensed consolidated balance sheets. These costs are being charged to interest expense using the effective interest method over the term of the Notes due 2015.

On December 12, 2006, the Company completed an offering of $115.0 million aggregate principal amount of 3.75% Senior Convertible Notes due 2013, including $15.0 million aggregate principal amount of the Notes due 2013 sold pursuant to the underwriters’ over-allotment option that was exercised in full. The Notes due 2013 are governed by the terms of an indenture dated as of November 1, 2006 and a First Supplemental Indenture, dated as of December 12, 2006 (the “2013 Note Indenture”). The Notes due 2013 bear interest at the rate of 3.75% per year on the principal amount, payable in cash semi-annually in arrears on June 15 and December 15 of each year, beginning June 15, 2007. The Company had accrued interest of $192,000 and $192,000 related to the Notes due 2013 for the years ended December 31, 2010 and 2011, respectively. The Notes due 2013 are general, unsecured, senior obligations of the Company and effectively rank junior in right of payment to all of the Company’s secured debt, to the extent of the value of the assets securing such debt, and to the debt and all other liabilities of the Company. The maturity date of the Notes due 2013 is December 15, 2013 and payment is due in full on that date for unconverted securities. Holders may convert, at any time prior to the close of business on the business day immediately preceding the stated maturity date, any outstanding Notes due 2013 into shares of the Company’s common stock at an initial conversion rate of 44.5002 shares per $1,000 principal amount of Notes due 2013, which is equal to a conversion price of approximately $22.47 per share, subject to adjustment. Except in certain circumstances, if the Company undergoes a fundamental change: (1) the Company will pay a make-whole premium on the Notes due 2013 converted in connection with a fundamental change by increasing the conversion rate on such Notes due 2013, which amount, if any, will be based on the Company’s common stock price and the effective date of the fundamental change, and (2) each holder of the Notes due 2013 will have the option to require the Company to repurchase all or any portion of such holder’s Notes due 2013 at a repurchase price of 100% of the principal amount of the Notes due 2013 to be repurchased plus accrued and unpaid interest, if any. Under the terms of the 2013 Note Indenture, the conversion option can be net-share settled and the maximum number of shares that could be required to be delivered under the contract, including the make-whole shares, is fixed and less than the number of authorized and unissued shares less the maximum number of shares that could be required to be delivered during the contract period under existing commitments. The Company performed an analysis at the time of the offering of the Notes due 2013 and each reporting date since and has concluded that the number of available authorized shares at the time of the offering and each subsequent reporting date was in excess of the maximum number of shares that could be required to be delivered during the contract period under existing commitments, including the outstanding convertible notes, stock options, restricted stock units, warrants and other potential common stock issuances.

The Company incurred approximately $3.7 million in debt issuance costs which are recorded as an offset to the debt in the accompanying balance sheet. These costs are being charged to interest expense using the effective interest method over the term of the Notes due 2013.

Accretion of debt issuance expense in connection with the Notes offerings during the years ended December 31, 2009, 2010 and 2011 were $513,000, $787,000 and $1.3 million, respectively.

Restructuring charges

12 Months Ended

Dec. 31, 2011

Restructuring charges [Abstract]

Restructuring charges

9. Restructuring charges

On February 10, 2011, the Company announced that following receipt of the Complete Response letter from the United States Food and Drug Administration (“FDA”) regarding the new drug application (“NDA”) for AFREZZA, it implemented a restructuring to streamline operations, reduce operating expenses, extend the cash runway and focus its resources on securing the FDA’s approval of the NDA for AFREZZA. In connection with the restructuring, the Company reduced its total workforce by approximately 41% to 257 employees. The

Company recorded charges of approximately $6.7 million for employee severance and other related termination benefits and recognized an initial liability of $6.7 million in February, which approximated fair value.


	Workforce Reduction
Restructuring Balance, February 11, 2011	$	6,659
Cash payments		(6,189	)
Adjustment		(403	)

Restructuring Balance, December 31, 2011	$	67

During the year ended December 31, 2011, the Company adjusted the restructuring balance based on the election of certain termination benefits by a portion of the terminated employees.

The remaining restructuring balance as of December 31, 2011 consists of severance and related termination benefits for employees still to be terminated.

The net $6.3 million of costs associated with the restructuring are included in “Research and development” and “General and administrative” operating expenses in the condensed consolidated statements of operations as $4.7 million and $1.6 million, respectively, for the year ended December 31, 2011.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References + Details

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2011

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

10. Fair Value of Financial Instruments

The carrying amounts of financial instruments, which include cash equivalents, marketable securities and accounts payable, approximate their fair values due to their relatively short maturities. The fair value of the note payable to related party cannot be reasonably estimated as the Company would not be able to obtain a similar credit arrangement in the current economic environment.

Cash equivalents consist of highly liquid investments with original or remaining maturities of 90 days or less at the time of purchase that are readily convertible into cash. As of December 31, 2010, the Company held $52.8 million of cash equivalents, consisting of money market funds, U.S. Treasury notes, and commercial paper. As of December 31, 2011 the Company held $55,000 of cash equivalents, consisting of money market funds. The fair value of these investments was determined by using quoted prices for identical investments in an active market (Level 1 in the fair value hierarchy).

The Company’s marketable securities consist principally of certificates of deposit with a maturity greater than 90 days, held as collateral primarily for foreign exchange hedging instruments, and a common stock investment that are classified as available-for-sale securities. The certificates of deposit are stated at fair value based on quoted prices for similar instruments in an active market (Level 2 in the fair value hierarchy) and the common stock investment is stated at fair value based on quoted prices in an active market (Level 1 in the fair value hierarchy). As of December 31, 2010, and 2011, there were marketable securities of $4.4 million and $515,000, respectively.

The senior convertible notes due 2013 had a carrying value of $113.3 million and $113.9 million, as of December 31, 2010 and 2011, respectively. The senior convertible notes due 2013 had an estimated fair value of $69.1 million and $61.0 million as of December 31, 2010, and 2011, respectively, calculated based on quoted prices in an active market. The senior convertible notes due 2015 had a carrying value of $96.0 million and $96.8 million as of December 31, 2010 and 2011, respectively. The senior convertible notes due 2015 had an estimated fair value of $134.1 million and $60.8 million as of December 31, 2010 and 2011, respectively, calculated based on model-derived valuations whose inputs are observable.

As there is no current observable market for the senior convertible notes due 2015, we determined value using a convertible bond valuation model within a lattice framework. The convertible bond valuation model combined expected cash outflows with market-based assumptions regarding risk-adjusted yields, stock price volatility and recent price quotes and trading information regarding Company issued debt instruments and shares of our common stock into which the notes are convertible.

Derivative financial instruments are recognized as other assets or other current liabilities in the financial statements and measured at fair value. The fair value of foreign exchange hedging contracts equals the carrying value at each balance sheet date. The fair value of these contracts are determined using methodologies based on market observable inputs (Level 2 in the fair value hierarchy), including foreign currency spot rates. The Company used derivative financial instruments to manage its exposure to foreign currency exchange risks related to quarterly purchases on insulin. The Company does not use derivative financial instruments for trading or speculative purposes, nor does it use leveraged financial instruments. Credit risk related to derivative financial instruments was considered minimal and was managed by requiring high credit standards for counterparties and through periodic settlements of positions.

The Company’s derivative financial instruments are not designated as hedging instruments, and gains or losses resulting from changes in the fair value are reported in other income (expense), in the consolidated statements of operations. The Company entered into foreign exchange hedging contracts with notional amounts totaling $25.5 million and zero at December 31, 2010 and 2011, respectively. The Company recorded an unrealized loss on the foreign exchange hedging contracts of $0.2 million at December 31, 2010. The Company recorded a realized loss of $1.6 million and a realized gain of $1.3 million for the years ended December 31, 2010 and 2011, respectively, on the execution of quarterly foreign exchange hedging contracts. The Company terminated these contracts during the quarter ended March 31, 2011.

- 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 Statement of Financial Accounting Standard (FAS)
-Number 133
-Paragraph 44A, 44B
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15C, 15D
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15A
-Subparagraph a-d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 15B
-Subparagraph a, b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 107
-Paragraph 3, 10, 14, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 157
-Paragraph 32, 33, 34
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 159
-Paragraph 17-22, 27, 28
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 10
-Section 50
-Paragraph 21
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13537-108611

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Reference 11: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
-Topic 825
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-Section 50
-Paragraph 10
-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13433-108611

Reference 12: http://www.xbrl.org/2003/role/presentationRef
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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13504-108611

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 820
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-Section 50
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-URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19296-110258

+ Details

Common and preferred stock

12 Months Ended

Dec. 31, 2011

Common and preferred stock [Abstract]

Common and preferred stock

11. Common and preferred stock

Private Placements — On August 5, 2005, the Company closed a $175.0 million private placement of common stock and the concurrent issuance of warrants for the purchase of additional shares of common stock to accredited investors including the Company’s principal stockholder who purchased $87.3 million of the private placement. The Company sold 17,132,000 shares of common stock in the private placement, together with warrants to purchase up to 3,426,000 shares of common stock at an exercise price of $12.228 per share which became exercisable on February 1, 2006 and expired on August 5, 2010. In connection with this private placement, the Company paid $4.5 million in commissions to the placement agents and incurred $300,000 in other offering expenses which resulted in net proceeds of approximately $170.2 million.

Public Equity Offering — On August 5, 2009, the Company sold 8,360,000 shares of its common stock, including 960,000 shares sold pursuant to the full exercise of an over-allotment option granted to the underwriters of the offering, at a public offering price of $7.35 per share. The Company’s principal stockholder purchased 1,000,000 of these shares from the underwriters at a price per share of $8.11. The sale of common stock resulted in aggregate net proceeds to the Company of approximately $59.7 million after deducting offering expenses.

Common Stock —In June 2011, the Company’s stockholders approved an increase in the Company’s authorized shares of common stock from 200,000,000 to 250,000,000. As of December 31, 2011, 131,522,945 shares of common stock were issued and outstanding.

Included in the common stock outstanding as of December 31, 2010 and 2011 are 9,000,000 shares of common stock loaned to Bank of America under a share lending agreement in connection with the offering of the $100 million aggregate principal amount of 5.75% Senior Convertible Notes due 2015 (see Note 8). Bank of America is obligated to return the borrowed shares (or, in certain circumstances, the cash value thereof) to the Company on or about the 45^th business day following the date as of which the entire principal amount of the notes ceases to be outstanding, subject to extension or acceleration in certain circumstances or early termination at Bank of America’s option. The Company did not receive any proceeds from the sale of the borrowed shares by Bank of America, but the Company did receive a nominal lending fee of $0.01 per share from Bank of America for the use of borrowed shares.

On August 10, 2010, the Company entered into an agreement with Seaside for the sale of up to 18,200,000 shares of common stock in increments of 700,000 shares on a bi-weekly basis with the first closing date scheduled for September 22, 2010 provided that certain conditions are met, including for a particular closing to take place, the ten-day volume weighted average trading price for the Company’s common stock immediately prior to such closing must be at least $6.50 per share. If the ten-day volume weighted average trading price for a particular closing was below $6.50 per share, then that closing did not occur and the aggregate number of shares to be purchased was reduced by 700,000 shares. The purchase price per share at each closing was equal to 92% of that 10-day volume weighted average price. During the years ended December 31, 2010 and 2011, the Company issued and sold a total of 2,100,000 and 1,400,000 shares of common stock, respectively, to Seaside for net proceeds of $14.1 million and $9.7 million, respectively, in accordance with the agreement. The agreement with Seaside terminated during the quarter ended September 30, 2011. During the agreement, the Company issued and sold a total of 3,500,000 shares of common stock to Seaside for net proceeds of $23.8 million. In conjunction with the Seaside agreement, on August 10, 2010, the Company entered into a common stock purchase agreement with The Mann Group. Under this common stock purchase agreement, the Company was required to issue and sell, and The Mann Group was obligated to purchase at a price equal to the greater of $7.15 per share (the closing bid price of the Company’s common stock on August 10, 2010) and the closing bid price of common stock on the trading day immediately preceding the applicable closing date, the same number of shares of the Company’s common stock that Seaside purchased on each closing date under its agreement with the Company (see Note 7). Concurrently with the Seaside closing, the Company issued and sold 2,100,000 and 1,400,000 shares to The Mann Group as of December 31, 2010 and 2011, respectively, for a total purchase price of $16.7 million and $11.1 million, respectively, which was paid by the cancellation of outstanding principal under the Company’s loan agreement with The Mann Group. The agreement with The Mann Group terminated during the quarter ended September 30, 2011. During the agreement, the Company issued and sold a total of 3,500,000 shares of common stock to The Mann Group that had resulted in total reduction in the note payable to related party of $27.8 million.

The Company had reserved shares of common stock for issuance as follows:


	December 31, 2010		December 31, 2011
Exercise of common stock options		7,760,833		10,082,351
Conversion of senior convertible notes into common stock		19,826,113		19,826,113
Exercise of common stock warrants		—		—
Vesting of restricted stock units		3,271,644		4,140,388

		30,858,590		34,048,852

Preferred Stock — The Company is authorized to issue 10,000,000 shares of preferred stock. As of December 31, 2011, no shares of preferred stock were issued and outstanding.

Net loss per common share

12 Months Ended

Dec. 31, 2011

Net loss per common share [Abstract]

Net loss per common share

12. Net loss per common share

Basic net loss per share excludes dilution for potentially dilutive securities and is computed by dividing loss applicable to common stockholders by the weighted average number of common shares outstanding during the period excluding the shares loaned under the share lending arrangement (see Note 11). As of December 31, 2010 and 2011, 9,000,000 shares of the Company’s common stock, which were loaned to a share borrower pursuant to the terms of a share lending agreement, as described in Note 11, were issued and are outstanding, and holders of the borrowed shares have all the rights of a holder of the Company’s common stock. However, because the share borrower must return all borrowed shares to the Company (or, in certain circumstances, the cash value thereof), the borrowed shares are not considered outstanding for the purpose of computing and reporting basic or diluted earnings (loss) per share. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Potentially dilutive securities are excluded from the computation of diluted net loss per share for all of the periods presented in the accompanying statements of operations because the reported net loss in each of these periods results in their inclusion being antidilutive. Antidilutive securities, which consist of stock options, restricted stock units, warrants, and shares that could be issued upon conversion of the senior convertible notes, that are not included in the diluted net loss per share calculation consisted of an aggregate of 17,823,427, 30,858,590 shares and 34,048,852 shares of the Company’s common stock as of December 31 2009, 2010 and 2011, respectively, and exclude the 9,000,000 shares of the Company’s common stock loaned under the share lending arrangement as of December 31, 2010 and 2011.

Stock award plans

12 Months Ended

Dec. 31, 2011

Stock award plans [Abstract]

Stock award plans

13. Stock award plans

As of December 31, 2011, the Company has three active stock-based compensation plans— the 2004 Equity Incentive Plan (the “Plan”), the 2004 Non-Employee Directors’ Stock Option Plan (the “NED Plan”), and the 2004 Employee Stock Purchase Plan (the “ESPP”). The Plan provides for the granting of stock awards including stock options and restricted stock units, to employees, directors and consultants. The NED Plan provides for the automatic, non-discretionary grant of options to the Company’s non-employee directors. There are also options outstanding to the Company’s principal stockholder at December 31, 2011 that were not granted under any plan; these options were granted during the year ended December 31, 2002, vested over four years, have an exercise price of $25.23 per share, and will expire ten years from the date of grant. The following table summarizes information about the Company’s stock-based award plans as of December 31, 2011:


	Outstanding Options		Outstanding Restricted Stock Units		Shares Available for Future Issuance
2004 Equity Incentive Plan		9,173,880		4,140,388		5,841,141
2004 Non-Employee Directors’ Stock Option Plan		667,500				132,500
Options outside of any plan granted to principal stockholder		240,971

Total		10,082,351		4,140,388		5,973,641

The Company’s board of directors determines eligibility, vesting schedules and exercise prices for stock awards granted under the Plan. The NED Plan provides for automatic, non-discretionary grant of options to the Company’s non-employee directors. Options and other stock awards under the Plan and the NED Plan expire not more than ten years from the date of the grant and are exercisable upon vesting. Stock options generally vest over four years. Current stock option grants vest and become exercisable at the rate of 25% after one year and ratably on a monthly basis over a period of 36 months thereafter. Restricted stock units generally vest at a rate of 25% per year over four years with consideration satisfied by service to the Company. Certain performance-based awards vest upon achieving either two or three pre-determined performance milestones which are expected to occur over periods ranging from 5 months to 84 months from the date of grant. All but one of the milestones is considered probable as of December 31, 2011. The Plan provides for full acceleration of vesting if an employee is terminated within thirteen months of a change in control, as defined in the Plan.

On March 3, 2011, the Compensation Committee approved a management proposal designed to encourage employee retention. The proposal involved the issuance of restricted stock units and stock options to the majority of employees and executive officers of the Company. A total of 1,177,300 restricted stock units and 1,467,500 stock options were granted under the Plan. These units vest 50% annually for two years and will be fully vested on March 3, 2013. Stock compensation expense associated with these grants will be recorded on a straight line basis from March 3, 2011 through March 3, 2013 and will be approximately $8.2 million over the award period.

On May 21, 2009 and June 2, 2011, the Company’s stockholders approved amendments to the Plan to increase the number of shares of common stock available for issuance under the plan by 5,000,000 and 6,000,000 shares, respectively.

On July 9, 2008, the Company announced an Offer to Exchange Outstanding Options to Purchase Common Stock (the “Offer”) under which the Company offered eligible employees the opportunity to exchange out-of-the money stock options covering up to an aggregate of 5,417,840 shares on a grant by grant basis for a reduced number of restricted stock units. The Offer expired on August 6, 2008. Pursuant to the Offer, the Company accepted for exchange options to purchase an aggregate of 4,493,509 shares of the Company’s common stock and issued restricted stock units covering an aggregate of 2,246,781 shares of the Company’s common stock. For the restricted stock units issued pursuant to the offer, both the remaining estimated unamortized stock compensation expense related to the exchanged options of approximately $13.9 million and the estimated incremental stock compensation expense resulting from the exchange of approximately $3.7 million was amortized over the vesting period ending on August 1, 2010.

In March 2004, the Company’s board of directors approved the ESPP, which became effective upon the closing of the Company’s initial public offering. Initially, the aggregate number of shares that could be sold under the plan was 2,000,000 shares of common stock. On January 1 of each year, for a period of ten years beginning January 1, 2005, the share reserve automatically increases by the lesser of: 700,000 shares, 1% of the total number of shares of common stock outstanding on that date, or an amount as may be determined by the board of directors. However, under no event can the annual increase cause the total number of shares reserved under the ESPP to exceed 10% of the total number of shares of capital stock outstanding on December 31 of the prior year. On January 1, 2009, 2010 and 2011 the ESPP share reserve was increased by 700,000, 700,000 and 700,000 shares, respectively. In November 2006, the Company’s board of directors approved a temporary decrease of 2.6 million shares to the reserve in order to make additional shares available for the Company’s December 2006 offerings. In May 2007, the reserve was reinstated after a decrease of 2.6 million shares. As of December 31, 2011, 2,184,557 shares were available for issuance under the ESPP. For the years ended December 31, 2009, 2010 and 2011 the Company sold 322,518, 287,597 and 282,816 shares, respectively, of its common stock to employees participating in the ESPP.

In accordance with ASC 718, share-based payment transactions are recognized as compensation cost based on the fair value of the instrument on the date of grant. The Company accounts for non-employee stock-based compensation expense based on the estimated fair value of the options, determined using the Black-Scholes option valuation model and amortizes such expense on a straight-line basis over the service period for the entire award. These awards are subject to re-measurement until service is complete. As of December 31, 2011, there were options to purchase 143,033 shares of common stock outstanding to consultants.

During the years ended December 31, 2009, 2010 and 2011 the Company recorded stock-based compensation expense related to its stock award plans and the ESPP of $20.2 million, $13.6 million and $11.2 million, respectively.

Total stock-based compensation expense recognized in the accompanying statements of operations is as follows (in thousands):


	Year Ended December 31,
	2009		2010		2011
Employee-related	$	19,653	$	13,478	$	11,202
Consultant-related		566		102		2

Total	$	20,219	$	13,580	$	11,204

Total stock-based compensation expense recognized in the accompanying statements of operations is included in the following categories (in thousands):


	Year Ended December 31,
	2009		2010		2011
Research and development	$	12,115	$	7,926	$	5,366
General and administrative		8,104		5,654		5,838

Total	$	20,219	$	13,580	$	11,204

The Company uses the Black-Scholes option valuation model to estimate the grant date fair value of employee stock options. The expected term of an option granted is based on combining historical exercise data with expected weighted time outstanding. Expected weighted time outstanding is calculated by assuming the settlement of outstanding awards is at the midpoint between the remaining weighted average vesting date and the expiration date. Separate groups of employees that have similar historical exercise behavior are considered separately for valuation purposes. Previously, the expected life of the option was estimated using the “simplified” method as provided in ASC 718, previously SEC Staff Accounting Bulletin No. 107. Under this method, the expected life equals the arithmetic average of the vesting term and the original contractual term of the options. The Company has used the simplified method as it did not have sufficient historical exercise data to provide a reasonable basis upon which to estimate an expected term. The Company estimates volatility using the historical volatility of its stock. The Company has selected risk-free interest rates based on U.S. Treasury securities with an equivalent expected term in effect on the date the options were granted. Additionally, the Company uses historical data and management judgment to estimate stock option exercise behavior and employee turnover rates to estimate the number of stock option awards that will eventually vest. The Company calculated the fair value of employee stock options for the years ended December 31, 2009, 2010 and 2011 using the following assumptions:


	Year Ended December 31,
	2009		2010		2011
Risk-free interest rate		2.16% —3.07%		0.74% —3.14%		0.10% —2.43%
Expected lives		5.8 — 6.1 years		2.6 — 6.1 years		1.1 — 6.1 years
Volatility		78% — 80%		78% — 102%		76% — 83%
Dividends		—		—		—

The following table summarizes information about stock options outstanding:


	Number of Shares			Weighted Average Exercise Price per Share		Aggregate Intrinsic Value ($000)
Outstanding at January 1, 2011		7,760,833			6.91	$	19,229
Granted		3,538,100			3.06
Exercised		(213,845	)		2.93
Forfeit		(623,369	)		5.09
Expired		(379,368	)		9.22

Outstanding at December 31, 2011		10,082,351			5.67	$	168

Vested or expected to vest at December 31, 2011		7,334,208			6.27	$	152
Exercisable at December 31, 2011		4,557,227			7.61	$	5

The weighted average grant date fair value of the stock options granted during the years ended December 31, 2009, 2010 and 2011 was $5.15, $4.06, and $2.04 per option, respectively. The total intrinsic value of options exercised during the years ended December 31, 2009, 2010 and 2011 was $389,000, $1.6 million and $443,000, respectively. Intrinsic value is measured using the fair market value at the date of exercise (for options exercised) or at December 31 (for outstanding options), less the applicable exercise price.

Cash received from the exercise of options during the years ended December 31, 2009, 2010 and 2011 was approximately $383,000, $924,000 and $625,000, respectively. The weighted-average remaining contractual terms for options outstanding, vested or expected to vest, and exercisable at December 31, 2011 was 7.6 years, 7.1 years and 6.0 years, respectively.

A summary of restricted stock unit activity for the year ended December 31, 2011 is presented below:


	Number of Shares			Weighted Average Grant Date Fair Value per Share
Outstanding at January 1, 2011		3,270,144		$	6.28
Granted		2,516,290		$	3.12
Vested		(626,278	)	$	6.38
Forfeited		(1,019,768	)	$	5.79

Outstanding at December 31, 2011		4,140,388		$	4.47

The total restricted stock units expected to vest as of December 31, 2011 was 3,762,752 with a weighted average grant date fair value of $4.47. The total intrinsic value of restricted stock units expected to vest as of December 31, 2011 was $9.4 million. Intrinsic value of restricted stock units expected to vest is measured using the closing share price at December 31, 2011.

Total intrinsic value of restricted stock units vested during the years ended December 31, 2009, 2010 and 2011 was $23.6 million, $10.5 million and $1.7 million, respectively. Intrinsic value of restricted stock units vested is measured using the closing share price on the day prior to the vest date. The total fair value of restricted stock units vested during the years ended December 31, 2009, 2010 and 2011 was $27.6 million, $11.4 million and $1.6 million, respectively.

As of December 31, 2011, there was $12.5 million and $11.6 million of unrecognized compensation expense related to options and restricted stock units, respectively, which is expected to be recognized over the weighted average vesting period of 2.4 years. As of December 31, 2011, there was $368,000 and $3.9M of unrecognized expense related to performance options and restricted stock units, respectively, for milestones not considered probable as of the reporting date.

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 123R
-Paragraph 64, 65, A240
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Statement of Position (SOP)
-Number 93-6
-Paragraph 53
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Staff Accounting Bulletin (SAB)
-Number Topic 14

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 505
-SubTopic 50
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 10
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 718
-SubTopic 40
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929

+ Details

Commitments and contingencies

12 Months Ended

Dec. 31, 2011

Commitments and contingencies [Abstract]

Commitments and contingencies

14. Commitments and contingencies

Operating Leases — The Company leases certain facilities and equipment under various operating leases, which expire at various dates through 2013. Future minimum rental payments required under operating leases are as follows at December 31, 2011 (in thousands):


Year Ending December 31,
2012	$	269
2013		16
Total minimum lease payments	$	285

Rent expense under all operating leases for the years ended December 31, 2009, 2010 and 2011 was approximately $2.1 million, $1.2 million and $766,000, respectively.

Capital Leases — The Company’s capital leases were not material for the years ended December 31, 2009, 2010 and 2011.

Supply Agreement — In November 2007, the Company entered into a long-term supply agreement (the “Supply Agreement”) with N.V. Organon (“Organon”), now a subsidiary of Merck & Co., Inc., pursuant to which Organon manufactured and supplied specified quantities of recombinant human insulin to the Company. In June 2011, the Company entered into a letter agreement (the “Letter Agreement”) with Organon to settle a dispute that arose between the Company and Organon in connection with the termination by the Company of the Supply Agreement. Under the terms of the Letter Agreement, the Company paid Organon an aggregate of $16.0 million in two installments, each of which was paid after the Company received certain quantities of recombinant human insulin manufactured and supplied by Organon. The Letter Agreement is in full and final settlement of, and the Company and Organon agreed to release each other from, any and all actions and claims that the Company and Organon had or may have against each other in connection with the dispute regarding the Supply Agreement and related matters. The Company has concluded that the Letter Agreement represents a multiple element arrangement consisting of two elements representing the purchase of insulin and a contract cancellation fee. The Company has allocated the $16.0 million settlement in the following manner: first to the fair value of the insulin received, which was recorded as expense of $8.4 million and the remaining $7.6 million to the contract cancellation fee. These charges were recorded to “Research and development” operating expenses in the consolidated statements of operations.

Guarantees and Indemnifications — In the ordinary course of its business, the Company makes certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. The Company, as permitted under Delaware law and in accordance with its Bylaws, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director is or was serving at the Company’s request in such capacity. The term of the indemnification period is for the officer’s or director’s lifetime. The maximum amount of potential future indemnification is unlimited; however, the Company has a director and officer insurance policy that may enable it to recover a portion of any future amounts paid. The Company believes the fair value of these indemnification agreements is minimal. The Company has not recorded any liability for these indemnities in the accompanying consolidated balance sheets. However, the Company accrues for losses for any known contingent liability, including those that may arise from indemnification provisions, when future payment is probable. No such losses have been recorded to date.

Litigation — The Company is involved in various legal proceedings and other matters. In accordance with ASC 450 Contingencies, previously FASB Statement No. 5, Accounting for Contingencies, the Company would record a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated.

On December 13, 2011, the Company announced that the Company reached a final resolution of the arbitration proceedings initiated by John Arditi, a former Senior Director — GCP — Regulatory Affairs of the Company. In connection with the resolution of the matter, Mr. Arditi withdrew his wrongful discharge and related claims against the Company. In return, the Company withdrew claims against Mr. Arditi. Neither party paid any monetary consideration to the other party in connection with the resolution of the arbitration proceedings.

Following the receipt of the Complete Response letter from the FDA regarding the NDA for AFREZZA in January 2011 and the subsequent decline of the price of the Company’s common stock, several complaints were filed in the U.S. District Court for the Central District of California against the Company and certain of its officers and directors on behalf of certain purchasers of the Company’s common stock. The complaints include claims asserted under Sections 10(b) and 20(a) of the Securities Exchange Act 1934, as amended, and have been brought as purported shareholder class actions. In general, the complaints allege that the Company and certain of its officers and directors violated federal securities laws by making materially false and misleading statements regarding the Company’s business and prospects for AFREZZA, thereby artificially inflating the price of its common stock. The plaintiffs are seeking unspecified monetary damages and other relief. The complaints have been transferred to a single court and consolidated for all purposes. The court has appointed a lead plaintiff and lead counsel and a consolidated complaint was filed on June 27, 2011. On August 12, 2011, we filed a motion to dismiss the consolidated complaint. On December 16, 2011, the court denied both motions. On January 27, 2012, defendants filed a motion to stay the action and certify the court’s December 16 order for interlocutory appeal, or in the alternative to reconsider. On March 2, 2012, the court denied both motions. Discovery has commenced, and the Company plans to continue vigorously defending against the claims advanced. The parties have also agreed to mediation, which is set for April 30, 2012. Based on the early stage of the claim and evaluation of the facts available at this time, the amount or range of reasonably possible losses to which the Company is exposed cannot be estimated and the ultimate resolution of this matter and the associated financial impact to the Company, if any, remains uncertain at this time.

Starting in February 2011, shareholder derivative complaints were filed in the Superior Court of California for the County of Los Angeles and in the U.S. District Court for the Central District of California against the Company’s directors and certain of its officers. The complaints in the shareholder derivative actions allege breaches of fiduciary duties by the defendants and other violations of law. In general, the complaints allege that the Company’s directors and certain of its officers caused or allowed for the dissemination of materially false and misleading statements regarding the Company’s business and prospects for AFREZZA, thereby artificially inflating the price of its common stock. The plaintiffs are seeking unspecified monetary damages and other relief, including reforms to the Company’s corporate governance and internal procedures.

The Superior Court of California for the County of Los Angeles has consolidated the actions pending before it and appointed lead counsel. The Superior Court of California for the County of Los Angeles has stayed the litigation until September 5, 2012, consistent with the parties’ stipulation. A status conference is set for September 5, 2012. Based on the early stage of the claim and evaluation of the facts available at this time, the amount or range of reasonably possible losses to which the Company is exposed cannot be estimated and the ultimate resolution of this matter and the associated financial impact to the Company, if any, remains uncertain at this time.

Likewise, the U.S. District Court for the Central District of California has consolidated the actions pending before it. The U.S. District Court for the Central District of California has also appointed lead plaintiffs and lead counsel and a consolidated complaint was filed on August 12, 2011. On September 26, 2011, the Company and the individual defendants filed a motion to dismiss the consolidated complaint, and the parties subsequently stipulated to stay the litigation. That stay expired on January 10, 2012, and on January 20, 2012, the Court issued a minute order setting a briefing schedule regarding the defendants’ motion to dismiss. Plaintiff opposed the motion on February 6, and defendants filed a reply on February 13. On February 14, 2012, the Court granted defendants’ motion to dismiss without prejudice. Plaintiff filed an amended complaint on March 5, 2012. The Court has stayed the litigation pending the outcome of mediation, consistent with the parties’ stipulation. Based on the early stage of the claim and evaluation of the facts available at this time, the amount or range of reasonably possible losses to which the Company is exposed cannot be estimated and the ultimate resolution of this matter and the associated financial impact to the Company, if any, remains uncertain at this time.

- Definition

The entire disclosure for commitments and contingencies.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Interpretation (FIN)
-Number 14
-Paragraph 3
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 5
-Paragraph 9, 10, 11, 12
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 210
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02.25)
-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 450
-SubTopic 20
-Section 50
-Paragraph 4
-URI http://asc.fasb.org/extlink&oid=6952336&loc=d3e14435-108349

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 460
-SubTopic 10
-Section 50
-Paragraph 8
-URI http://asc.fasb.org/extlink&oid=6398077&loc=d3e12565-110249

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 440
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6394976&loc=d3e25287-109308

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 825
-SubTopic 20
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6449706&loc=d3e16207-108621

+ Details

Employee benefit plans

12 Months Ended

Dec. 31, 2011

Employee benefit plans [Abstract]

Employee benefit plans

15. Employee benefit plans

The Company administers a 401(k) Savings Retirement Plan (the “MannKind Retirement Plan”) for its employees. For the years ended December 31, 2009, 2010 and 2011, the Company contributed $824,000, $752,000 and $777,000 respectively, to the MannKind Retirement Plan.

- Definition

The entire disclosure for pension and other postretirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph b
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph h
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5
-Subparagraph q
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 8
-Subparagraph m
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 106
-Paragraph 518
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 87
-Paragraph 264
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 03-2
-Paragraph 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Principles Board Opinion (APB)
-Number 30
-Paragraph 26
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 10: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name FASB Staff Position (FSP)
-Number FAS106-2
-Paragraph 20, 21, 22
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 158
-Paragraph 7, 21, 22
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 132R
-Paragraph 5, 6, 7, 8
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Implementation Guide (Q and A)
-Number FAS88
-Paragraph 63
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 715
-URI http://asc.fasb.org/topic&trid=2235017

+ Details

Income taxes

12 Months Ended

Dec. 31, 2011

Income taxes [Abstract]

Income taxes

16. Income taxes

Deferred income taxes reflect the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. A valuation allowance is established when uncertainty exists as to whether all or a portion of the net deferred tax assets will be realized. Components of the net deferred tax asset as of December 31, 2010 and 2011 are approximately as follows (in thousands):


	December 31,
	2010			2011
Deferred tax assets:
Net operating loss carryforwards	$	508,272		$	557,427
Research and development credits		54,949			59,848
Capitalized research		33,597			32,440
Accrued expenses		1,600			2,827
Non-qualified stock option expense		24,435			27,964
Depreciation		9,333			8,906

Total net deferred tax assets		632,186			689,412
Valuation allowance		(632,186	)		(689,412	)

Net deferred tax assets	$	—		$	—

The Company’s net deferred tax assets as of December 31, 2010, consist of $655.0 million of gross deferred tax assets and $22.8 million of gross deferred tax liabilities. The Company’s net deferred tax assets as of December 31, 2011, consist of $718.2 million of gross deferred tax assets and $28.8 million of gross deferred tax liabilities.

The Company’s effective income tax rate differs from the statutory federal income tax rate as follows for the years ended December 31, 2009, 2010 and 2011:


	December 31,
	2009			2010			2011
Federal tax benefit rate		35.0	%		35.0	%		35.0	%
State tax benefit, net of federal benefit		—			—			—
Permanent items		—			—			—
Intercompany transfer of intellectual property		(18.0	)		(5.0	)		(5.0	)
Valuation allowance		(17.0	)		(30.0	)		(30.0	)

Effective income tax rate		0.0	%		0.0	%		0.0	%

As required by ASC 740 Income Taxes (“ASC 740”), formerly FASB Statement No. 109 Accounting for Income Taxes, management of the Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Management has concluded, in accordance with the applicable accounting standards, that it is more likely than not that the Company may not realize the benefit of its deferred tax assets. Accordingly, the net deferred tax assets have been fully reserved. Management reevaluates the positive and negative evidence on an annual basis. During the years ended December 31, 2009, 2010 and 2011, the change in the valuation allowance was $50.2 million, $56.5 million and $57.2 million, respectively, for income taxes.

At December 31, 2011, the Company had federal and state net operating loss carryforwards of approximately $1.4 billion and $976.0 million available, respectively, to reduce future taxable income and which will expire at various dates beginning in 2012 and 2013, respectively. As a result of the Company’s initial public offering, an ownership change within the meaning of Internal Revenue Code Section 382 occurred in August 2004. As a result, federal net operating loss and credit carry forwards of approximately $216.0 million are subject to an annual use limitation of approximately $13.0 million. The annual limitation is cumulative and therefore, if not fully utilized in a year can be utilized in future years in addition to the Section 382 limitation for those years. The federal net operating losses generated subsequent to the Company’s initial public offering in August 2004 are currently not subject to any such limitation as there have been no ownership changes since August 2004 within the meaning of Internal Revenue Code Section 382. At December 31, 2011, the Company had research and development credits of $70.9 million that expire at various dates through 2032.

The Company has evaluated the impact of ASC 740, previously FIN 48 Accounting for Uncertainty in Income Taxes, on its financial statements, which was effective beginning January 1, 2007. The evaluation of a tax position in accordance with this guidance is a two-step process. The first step is recognition: the enterprise determines whether it is more-likely-than-not that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. In evaluating whether a tax position has met the more-likely-than-not recognition threshold, the enterprise should presume that the position will be examined by the appropriate taxing authority that would have full knowledge of all relevant information. The second step is measurement: a tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent financial reporting period in which that threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not recognition threshold should be derecognized in the first subsequent financial reporting period in which that threshold is no longer met. The Company believes that its income tax filing positions and deductions will be sustained on audit and does not anticipate any adjustments that will result in a material change to its financial position. Therefore, no liabilities for uncertain income tax positions have been recorded. Tax years since 1993 remain subject to examination by the major tax jurisdictions in which the Company is subject to tax.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319

+ Details

Related party transactions

12 Months Ended

Dec. 31, 2011

Related party transactions

17. Related party transactions

On October 2, 2007, the Company entered into a loan arrangement with its principal stockholder to borrow up to a total of $350.0 million. On February 26, 2009, the promissory note underlying the loan arrangement was revised as a result of the principal stockholder being licensed as a finance lender under the California Finance Lenders Law. Accordingly, the lender was revised to The Mann Group LLC, an entity controlled by the Company’s principal stockholder. On August 10, 2010, the Company amended and restated the promissory note to extend the maturity date from December 31, 2011 to December 31, 2012, to provide for the cancellation of indebtedness under the note as described below, to provide that The Mann Group may require the Company to prepay the note in an amount not to exceed $200.0 million (less the amount of cancelled indebtedness) upon 90 days’ prior written notice or on December 31, 2012, whichever is earlier, and to limit the Company’s ability to borrow and reborrow under the note through December 31, 2011 to an amount equal to $350.0 million less the amount of cancelled indebtedness. On August 18, 2010, the Company entered into a letter agreement confirming a previous commitment by The Mann Group to not require the Company to prepay amounts outstanding under the amended and restated promissory note if the prepayment would require the Company to use its working capital resources, including the proceeds from the sale of its 5.75% Senior Convertible Notes due 2015 (see Note 8). The Company had borrowed $277.2 million under this agreement as of December 31, 2011. As of December 31, 2011, the Company had accrued interest of $5.9 million related to the amount outstanding and had $45.0 million of available borrowings under the loan agreement (see Note 7).

On August 5, 2009, the Company closed the sale of 8,360,000 shares of its common stock, including 960,000 shares sold pursuant to the full exercise of an over-allotment option previously granted to the underwriters of the offering, at a public offering price of $7.35 per share. The Company’s principal stockholder purchased 1,000,000 of these shares from the underwriters at a price per share of $8.11. The sale of common stock resulted in aggregate net proceeds to the Company of approximately $59.7 million after deducting offering expenses.

On August 10, 2010, the Company entered into a common stock purchase agreement with The Mann Group. Under this common stock purchase agreement, the Company is required to issue and sell, and The Mann Group is obligated to purchase, the same number of shares of the Company’s common stock that Seaside purchases on each closing date under its agreement with the Company. The price of the shares that the Company sells to The Mann Group under the agreement will be equal to the greater of $7.15 per share (the closing bid price of the Company’s common stock on August 10, 2010) and the closing bid price of the Company’s common stock on the trading day immediately preceding the applicable closing date. The aggregate purchase price for the shares of common stock the Company issues and sells to The Mann Group will be paid by cancelling an equal amount of the outstanding principal under the $350.0 million loan arrangement provided by The Mann Group. To the extent that the outstanding principal amount owed under the loan arrangement is insufficient to pay the full purchase price for the shares of common stock to be acquired, The Mann Group will be obligated to pay cash for the balance of the shares of common stock it is obligated to purchase under the common stock purchase agreement. The common stock purchase agreement with The Mann Group will terminate on the day following the final closing under the Company’s common stock purchase agreement with Seaside or upon termination of the Seaside agreement. In the first quarter of 2011, and concurrently with sales of common stock to Seaside, the Company issued and sold a total of 1,400,000 shares of common stock to The Mann Group for a total purchase price of $11.1 million, which was paid by the cancellation of outstanding principal under the Company’s loan agreement with The Mann Group. The agreement with The Mann Group terminated during the quarter ended September 30, 2011. During the agreement, the Company issued and sold a total of 3,500,000 shares of common stock to The Mann Group that had resulted in total reduction in the note payable to related party of $27.8 million.

In connection with certain meetings of the Company’s board of directors and on other occasions when the Company’s business necessitated air travel for the Company’s principal stockholder and other Company employees, the Company utilized the principal stockholder’s private aircraft, and the Company paid the charter company that manages the aircraft on behalf of the Company’s majority stockholder approximately $137,000, $230,000 and $111,000, respectively, for the years ended December 31, 2009, 2010 and 2011 on the basis of the corresponding cost of commercial airfare. These payments were approved by the audit committee of the board of directors.

The Company has entered into indemnification agreements with each of its directors and executive officers, in addition to the indemnification provided for in its amended and restated certificate of incorporation and amended and restated bylaws (see Note 14).

Selected quarterly financial data (unaudited)

12 Months Ended

Dec. 31, 2011

Selected quarterly financial data (unaudited) [Abstract]

Selected quarterly financial data (unaudited)

18. Selected quarterly financial data (unaudited)

The following unaudited selected quarterly financial data has been prepared on the same basis as the audited information and includes all adjustments necessary to present fairly the information set forth in the Company’s consolidated financial statements and notes herein. As a development stage enterprise, the Company has experienced fluctuations in its quarterly results related to the development of its lead product candidate, AFREZZA, and in its expansion of the product candidate portfolio. The Company expects these fluctuations to continue in the future. Due to these and other factors, the quarterly operating results are not indicative of the Company’s future performance.


	March 31			June 30			September 30			December 31
	(In thousands, except per share data)
2010
Net loss	$	(44,700	)	$	(42,251	)	$	(45,303	)	$	(38,306	)

Net loss applicable to common stockholders	$	(44,700	)	$	(42,251	)	$	(45,303	)	$	(38,306	)

Net loss per share applicable to common stockholders — basic and diluted	$	(0.40	)	$	(0.37	)	$	(0.40	)	$	(0.33	)

Weighted average common shares used to compute basic and diluted net loss per share applicable to common stockholders		113,095			113,116			113,528			114,932


	March 31			June 30			September 30			December 31
	(In thousands, except per share data)
2011
Net loss	$	(41,525	)	$	(44,480	)	$	(38,402	)	$	(36,397	)

Net loss applicable to common stockholders	$	(41,525	)	$	(44,480	)	$	(38,402	)	$	(36,397	)

Net loss per share applicable to common stockholders — basic and diluted	$	(0.34	)	$	(0.37	)	$	(0.31	)	$	(0.30	)

Weighted average common shares used to compute basic and diluted net loss per share applicable to common stockholders		121,057			121,708			122,130			122,357

- Definition

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References + Details

Subsequent events

12 Months Ended

Dec. 31, 2011

Subsequent Events [Abstract]

Subsequent events

19. Subsequent events

On January 16, 2012, the Company amended its note with The Mann Group LLC, an entity controlled by the Company’s principal stockholder. The amendment extends the maturity date of the $350.0 million loan arrangement from December 31, 2012 to March 31, 2013. The Company can continue to borrow under the amended terms of the note until June 30, 2012. Since December 31, 2011, the Company borrowed $6.3 million under the loan agreement and $38.8 million remains available to borrow.

On February 8, 2012, the Company sold $86.3 million worth of units in an underwritten public offering, with each unit consisting of one share of common stock and a warrant to purchase 0.6 of a share of common stock, and reflects the full exercise of an over-allotment option granted to the underwriters. Net proceeds from this offering were approximately $80.6 million, excluding any warrant exercises. Concurrent with this public offering, The Mann Group LLC purchased $77.2 million worth of restricted shares of common stock which will be paid by cancellation of principal indebtedness under the amended loan arrangement, subject to stockholder approval to increase the Company’s number of authorized shares.

Label	Element	Value
Stock Issued During Period, Value, New Issues	us-gaap_StockIssuedDuringPeriodValueNewIssues	$ 900,000
Deficit Accumulated During The Development Stage Member
Net Income (Loss) Attributable to Parent	us-gaap_NetIncomeLoss	(911,000)
Common Stock
Stock Issued During Period, Value, New Issues	us-gaap_StockIssuedDuringPeriodValueNewIssues	$ 10,000
Stock Issued During Period, Shares, New Issues	us-gaap_StockIssuedDuringPeriodSharesNewIssues	998,000
Additional Paid In Capital Member
Stock Issued During Period, Value, New Issues	us-gaap_StockIssuedDuringPeriodValueNewIssues	$ 890,000

- Definition

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

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Emerging Issues Task Force (EITF)
-Number 87-21
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph a
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 130
-Paragraph 10, 15
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 95
-Paragraph 28, 29, 30
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Article 5
-Section 03
-Paragraph 19

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 04
-Paragraph 20
-Article 9

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 230
-SubTopic 10
-Section 45
-Paragraph 28
-URI http://asc.fasb.org/extlink&oid=6943989&loc=d3e3602-108585

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Net Income
-URI http://asc.fasb.org/extlink&oid=6518256

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Glossary Other Comprehensive Income
-URI http://asc.fasb.org/extlink&oid=6519514

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

Reference 11: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 225
-SubTopic 10
-Section S99
-Paragraph 2
-Subparagraph (SX 210.5-03.18)
-URI http://asc.fasb.org/extlink&oid=6880815&loc=d3e20235-122688

Reference 12: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.19)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 13: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 220
-SubTopic 10
-Section 45
-Paragraph 6
-URI http://asc.fasb.org/extlink&oid=6920043&loc=d3e565-108580

Reference 14: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 944
-SubTopic 225
-Section S99
-Paragraph 1
-Subparagraph (SX 210.7-04.22)
-URI http://asc.fasb.org/extlink&oid=6879464&loc=d3e573970-122913

Reference 15: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph 38
-Subparagraph d
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.

Reference 16: http://www.xbrl.org/2003/role/presentationRef
-Publisher AICPA
-Name Accounting Research Bulletin (ARB)
-Number 51
-Paragraph A7
-Appendix A

+ Details