we plan to continue investing in our research programs and supporting scientific innovation in order to identify and develop transformative medicines . we believe that pursuing research in diverse areas allows us to balance the risks inherent in drug development and may provide the drug candidates that will form our pipeline in future years . we have later-stage research programs in the areas of cystic fibrosis , huntington 's disease , multiple sclerosis and cancer . discovery and development of a new pharmaceutical product is a difficult and lengthy process that requires significant financial resources along with extensive technical and regulatory expertise and can take 10 to 15 years or more . potential drug candidates are subjected to rigorous evaluations , driven in part by stringent regulatory considerations , designed to 54 generate information concerning efficacy , side-effects , proper dosage levels and a variety of other physical and chemical characteristics that are important in determining whether a drug candidate should be approved for marketing as a pharmaceutical product . most chemical compounds that are investigated as potential drug candidates never progress into development , and most drug candidates that do advance into development never receive marketing approval . because our investments in drug candidates are subject to considerable risks , we closely monitor the results of our discovery research , clinical trials and nonclinical studies , and frequently evaluate our drug development programs in light of new data and scientific , business and commercial insights , with the objective of balancing risk and potential . this process can result in relatively abrupt changes in focus and priority as new information becomes available and we gain additional understanding of our ongoing programs and potential new programs as well as those of our competitors . if we believe the data from a completed registration program support approval of a drug candidate , we submit a new drug application , or nda , to the united states food and drug administration , or fda , requesting approval to market the drug candidate in the united states and seek analogous approvals from comparable regulatory authorities in foreign jurisdictions . to obtain approval , we must , among other things , demonstrate with evidence gathered in nonclinical studies and well-controlled clinical trials that the drug candidate is safe and effective for the disease it is intended to treat and that the manufacturing facilities , processes and controls for the manufacture of the drug candidate are adequate . the fda and foreign regulatory authorities have substantial discretion in deciding whether or not a drug candidate should be granted approval based on the benefits and risks of the drug candidate in the treatment of a particular disease , and could delay , limit or deny regulatory approval . if regulatory delays are significant or regulatory approval is limited or denied altogether , our financial results and the commercial prospects for the drug candidate involved will be harmed . cf kalydeco ( ivacaftor ) is approved in the united states , canada and the european union for the treatment of patients with cf six years of age and older who have the g551d mutation on at least one allele of the cftr gene . we are continuing our work in cf to identify and develop treatment regimens that will provide benefits to as many patients with cf as possible and to maximize those benefits . we have multiple ongoing clinical development programs to evaluate our cf treatment regimens , and our research group is working to identify additional corrector compounds that could be included in future dual- and or triple-combination treatment regimens that have the potential to provide additional benefits to patients with cf . ivacaftor ( monotherapy ) we are conducting three phase 3 label-expansion clinical trials and a phase 2 clinical trial of ivacaftor monotherapy : we have completed enrollment in a phase 3 clinical trial evaluating ivacaftor in patients six years of age and older with cf with gating mutations other than the g551d mutation . we are continuing enrollment in a phase 3 clinical trial evaluating ivacaftor in patients six years of age and older with cf with the r117h mutation in the cftr gene on at least one allele . we have begun dosing patients in a phase 3 clinical trial in which we are evaluating a pediatric formulation of ivacaftor as a treatment for children two to five years of age with gating mutations in the cftr gene , including the g551d mutation . we are enrolling patients in a phase 2 clinical trial in which we are evaluating ivacaftor in patients with cf who have clinical evidence of residual cftr function . if we are able to establish that these additional patient groups will benefit from ivacaftor monotherapy , there is the potential to increase the number of patients eligible for treatment with ivacaftor monotherapy to more than 10 % of patients with cf . we expect to obtain data from the phase 3 clinical trials evaluating patients six years of age and older in 2013 . 55 vx-809 in combination with ivacaftor in february 2013 , we initiated an international pivotal phase 3 clinical program to evaluate combinations of vx-809 and ivacaftor in patients with cf who have two copies of the f508del mutation in their cftr gene ( homozygous ) . we plan to conduct two 24-week phase 3 clinical trials that are designed to support approval of the combination of vx-809 and ivacaftor for patients 12 years of age and older . each phase 3 clinical trial will enroll approximately 500 patients with cf who are homozygous for the f508del mutation , for a total of approximately 1,000 patients . the two clinical trials have the same design and together will be conducted at approximately 200 clinical trial sites in north america , europe and australia . story_separator_special_tag we did not recognize any collaborative revenues from mitsubishi tanabe in the second half of 2012 and will not recognize any future collaborative revenues pursuant to our collaboration agreement with mitsubishi tanabe . operating costs and expenses replace_table_token_13_th cost of product revenues our cost of product revenues in 2012 and 2011 included the cost of producing inventories that corresponded to product revenues for the reporting period , plus the third-party royalties payable on our net sales of incivek and kalydeco . in addition , cost of product revenues in 2012 included an aggregate of $ 133.2 million in charges for excess and obsolete incivek inventories . most of the manufacturing costs of incivek and kalydeco sold in the periods presented were expensed as research and development expenses in prior periods . 60 our cost of product revenues increased in 2012 compared to 2011 due to our increased net product revenues and the charges for excess and obsolete incivek inventories that we incurred in 2012. as of december 31 , 2012 , we had $ 22.8 million in remaining incivek inventories . we evaluate our incivek inventories on a quarterly basis , and future changes in the commercial outlook for incivek could result in additional charges for excess and obsolete incivek inventories in future periods . royalty expenses royalty expenses include third-party royalties payable upon net sales of telaprevir by our collaborators and royalty expenses related to a subroyalty payable to a third party on net sales of an hiv protease inhibitor sold by glaxosmithkline . royalty expenses in 2012 increased compared to 2011 primarily due to increased third-party royalties payable on net sales of incivo by janssen . our royalty expenses in future periods will be dependent on our collaborators ' net sales of telaprevir in their territories . royalty expenses in 2010 and in 2011 prior to the launch of incivo by janssen primarily related to a subroyalty payable to a third party on net sales of an hiv protease inhibitor sold by glaxosmithkline . the subroyalty expense offsets a corresponding amount of hiv royalty revenues . we expect to continue to recognize this subroyalty as an expense in future periods . research and development expenses replace_table_token_14_th our research and development expenses include internal and external costs incurred for research and development of our drugs and drug candidates . we do not assign our internal costs , such as salary and benefits , stock-based compensation expense , laboratory supplies and infrastructure costs , to individual drugs or drug candidates , because the employees within our research and development groups typically are deployed across multiple research and development programs . these internal costs are significantly greater than our external costs , such as the costs of services provided to us by clinical research organizations and other outsourced research , which we do allocate by individual program . all research and development costs for our drugs and drug candidates are expensed as incurred . to date , we have incurred in excess of $ 5.5 billion in research and development expenses associated with drug discovery and development . the successful development of our drug candidates is highly uncertain and subject to a number of risks . in addition , the duration of clinical trials may vary substantially according to the type , complexity and novelty of the drug candidate and the disease indication being targeted . the fda and comparable agencies in foreign countries impose substantial requirements on the introduction of therapeutic pharmaceutical products , typically requiring lengthy and detailed laboratory and clinical testing procedures , sampling activities and other costly and time-consuming procedures . data obtained from nonclinical and clinical activities at any step in the testing process may be adverse and lead to discontinuation or redirection of development activities . data obtained from these activities also are susceptible to varying interpretations , which could delay , limit or prevent regulatory approval . the duration and cost of discovery , nonclinical studies and clinical trials may vary significantly over the life of a project and are difficult to predict . therefore , accurate and meaningful estimates of the ultimate costs to bring our drug candidates to market are not available . over the three year period ended december 31 , 2012 , costs related to our hcv and cf programs have represented the largest portion of our development costs . any estimates regarding development and regulatory timelines for our drug candidates are highly subjective and subject to change . in the first quarter of 2013 , we initiated a pivotal phase 3 clinical program to evaluate vx-809 in combination with ivacaftor . we expect to obtain final safety and efficacy data from two phase 3 clinical trials in this program in 2014. if these clinical trials are successful , we plan to submit an nda to the fda in 2014. we can not make a meaningful estimate when , if ever , our other clinical development programs will generate revenues and cash flows . 61 research expenses replace_table_token_15_th over the past three years we have maintained a substantial investment in research activities resulting in a 9 % increase in research expenses in 2012 as compared to 2011 and a 15 % increase in research expenses in 2011 as compared to 2010 . we expect to continue to invest in our research programs with a focus on identifying drug candidates for specialty markets . development expenses replace_table_token_16_th our development expenses increased by $ 79.8 million , or 16 % , in 2012 as compared to 2011 and by $ 42.7 million , or 10 % , in 2011 as compared to 2010 , principally due to increases in headcount and the expansion of our development efforts as we completed the registration programs for telaprevir and ivacaftor , prepared the regulatory filings needed to obtain approval for these products and continued the development of our other drug candidates . we expect our development expenses to increase in 2013 as compared to 2012

liquidity and capital resources as of december 31 , 2012 , we had cash , cash equivalents and marketable securities , excluding alios ' cash and cash equivalents , of $ 1.3 billion , which was an increase of $ 352.3 million from $ 968.9 million as of december 31 , 2011 . this increase was due to cash receipts from product sales and royalties and $ 191.7 million in cash we received from issuances of common stock pursuant to employee benefit plans . these cash receipts were partially offset by cash expenditures we made related to , among other things , research and development expenses , sales , general and administrative expenses and milestone payments to alios , as well as $ 92.6 million for capital expenditures for property and equipment . sources of liquidity we intend to rely on cash flows from product sales as our primary source of liquidity and cash flows from royalties as a secondary source of liquidity . we also generate proceeds from the issuance of common stock under our employee benefit plans . other possible sources of liquidity include commercial debt , public and private offerings of our equity and debt securities , strategic collaborative agreements that include research and or development funding , development milestones and royalties on the sales of products , software and equipment leases , strategic sales of assets or businesses and financial transactions . future capital requirements we are incurring substantial expenses to commercialize incivek and kalydeco , while at the same time continuing focused investment in our research and development programs .


 Write a concise suspicious activity report of the following text delimited by triple backquotes. Return your response as a formal report which covers the key points highlighting the location,dates,entity names and account holder information in chronological order of the text.
     ```liquidity and capital resources as of december 31 , 2012 , we had cash , cash equivalents and marketable securities , excluding alios ' cash and cash equivalents , of $ 1.3 billion , which was an increase of $ 352.3 million from $ 968.9 million as of december 31 , 2011 . this increase was due to cash receipts from product sales and royalties and $ 191.7 million in cash we received from issuances of common stock pursuant to employee benefit plans . these cash receipts were partially offset by cash expenditures we made related to , among other things , research and development expenses , sales , general and administrative expenses and milestone payments to alios , as well as $ 92.6 million for capital expenditures for property and equipment . sources of liquidity we intend to rely on cash flows from product sales as our primary source of liquidity and cash flows from royalties as a secondary source of liquidity . we also generate proceeds from the issuance of common stock under our employee benefit plans . other possible sources of liquidity include commercial debt , public and private offerings of our equity and debt securities , strategic collaborative agreements that include research and or development funding , development milestones and royalties on the sales of products , software and equipment leases , strategic sales of assets or businesses and financial transactions . future capital requirements we are incurring substantial expenses to commercialize incivek and kalydeco , while at the same time continuing focused investment in our research and development programs .
```    
 Suspicious Activity Report : we plan to continue investing in our research programs and supporting scientific innovation in order to identify and develop transformative medicines . we believe that pursuing research in diverse areas allows us to balance the risks inherent in drug development and may provide the drug candidates that will form our pipeline in future years . we have later-stage research programs in the areas of cystic fibrosis , huntington 's disease , multiple sclerosis and cancer . discovery and development of a new pharmaceutical product is a difficult and lengthy process that requires significant financial resources along with extensive technical and regulatory expertise and can take 10 to 15 years or more . potential drug candidates are subjected to rigorous evaluations , driven in part by stringent regulatory considerations , designed to 54 generate information concerning efficacy , side-effects , proper dosage levels and a variety of other physical and chemical characteristics that are important in determining whether a drug candidate should be approved for marketing as a pharmaceutical product . most chemical compounds that are investigated as potential drug candidates never progress into development , and most drug candidates that do advance into development never receive marketing approval . because our investments in drug candidates are subject to considerable risks , we closely monitor the results of our discovery research , clinical trials and nonclinical studies , and frequently evaluate our drug development programs in light of new data and scientific , business and commercial insights , with the objective of balancing risk and potential . this process can result in relatively abrupt changes in focus and priority as new information becomes available and we gain additional understanding of our ongoing programs and potential new programs as well as those of our competitors . if we believe the data from a completed registration program support approval of a drug candidate , we submit a new drug application , or nda , to the united states food and drug administration , or fda , requesting approval to market the drug candidate in the united states and seek analogous approvals from comparable regulatory authorities in foreign jurisdictions . to obtain approval , we must , among other things , demonstrate with evidence gathered in nonclinical studies and well-controlled clinical trials that the drug candidate is safe and effective for the disease it is intended to treat and that the manufacturing facilities , processes and controls for the manufacture of the drug candidate are adequate . the fda and foreign regulatory authorities have substantial discretion in deciding whether or not a drug candidate should be granted approval based on the benefits and risks of the drug candidate in the treatment of a particular disease , and could delay , limit or deny regulatory approval . if regulatory delays are significant or regulatory approval is limited or denied altogether , our financial results and the commercial prospects for the drug candidate involved will be harmed . cf kalydeco ( ivacaftor ) is approved in the united states , canada and the european union for the treatment of patients with cf six years of age and older who have the g551d mutation on at least one allele of the cftr gene . we are continuing our work in cf to identify and develop treatment regimens that will provide benefits to as many patients with cf as possible and to maximize those benefits . we have multiple ongoing clinical development programs to evaluate our cf treatment regimens , and our research group is working to identify additional corrector compounds that could be included in future dual- and or triple-combination treatment regimens that have the potential to provide additional benefits to patients with cf . ivacaftor ( monotherapy ) we are conducting three phase 3 label-expansion clinical trials and a phase 2 clinical trial of ivacaftor monotherapy : we have completed enrollment in a phase 3 clinical trial evaluating ivacaftor in patients six years of age and older with cf with gating mutations other than the g551d mutation . we are continuing enrollment in a phase 3 clinical trial evaluating ivacaftor in patients six years of age and older with cf with the r117h mutation in the cftr gene on at least one allele . we have begun dosing patients in a phase 3 clinical trial in which we are evaluating a pediatric formulation of ivacaftor as a treatment for children two to five years of age with gating mutations in the cftr gene , including the g551d mutation . we are enrolling patients in a phase 2 clinical trial in which we are evaluating ivacaftor in patients with cf who have clinical evidence of residual cftr function . if we are able to establish that these additional patient groups will benefit from ivacaftor monotherapy , there is the potential to increase the number of patients eligible for treatment with ivacaftor monotherapy to more than 10 % of patients with cf . we expect to obtain data from the phase 3 clinical trials evaluating patients six years of age and older in 2013 . 55 vx-809 in combination with ivacaftor in february 2013 , we initiated an international pivotal phase 3 clinical program to evaluate combinations of vx-809 and ivacaftor in patients with cf who have two copies of the f508del mutation in their cftr gene ( homozygous ) . we plan to conduct two 24-week phase 3 clinical trials that are designed to support approval of the combination of vx-809 and ivacaftor for patients 12 years of age and older . each phase 3 clinical trial will enroll approximately 500 patients with cf who are homozygous for the f508del mutation , for a total of approximately 1,000 patients . the two clinical trials have the same design and together will be conducted at approximately 200 clinical trial sites in north america , europe and australia . story_separator_special_tag we did not recognize any collaborative revenues from mitsubishi tanabe in the second half of 2012 and will not recognize any future collaborative revenues pursuant to our collaboration agreement with mitsubishi tanabe . operating costs and expenses replace_table_token_13_th cost of product revenues our cost of product revenues in 2012 and 2011 included the cost of producing inventories that corresponded to product revenues for the reporting period , plus the third-party royalties payable on our net sales of incivek and kalydeco . in addition , cost of product revenues in 2012 included an aggregate of $ 133.2 million in charges for excess and obsolete incivek inventories . most of the manufacturing costs of incivek and kalydeco sold in the periods presented were expensed as research and development expenses in prior periods . 60 our cost of product revenues increased in 2012 compared to 2011 due to our increased net product revenues and the charges for excess and obsolete incivek inventories that we incurred in 2012. as of december 31 , 2012 , we had $ 22.8 million in remaining incivek inventories . we evaluate our incivek inventories on a quarterly basis , and future changes in the commercial outlook for incivek could result in additional charges for excess and obsolete incivek inventories in future periods . royalty expenses royalty expenses include third-party royalties payable upon net sales of telaprevir by our collaborators and royalty expenses related to a subroyalty payable to a third party on net sales of an hiv protease inhibitor sold by glaxosmithkline . royalty expenses in 2012 increased compared to 2011 primarily due to increased third-party royalties payable on net sales of incivo by janssen . our royalty expenses in future periods will be dependent on our collaborators ' net sales of telaprevir in their territories . royalty expenses in 2010 and in 2011 prior to the launch of incivo by janssen primarily related to a subroyalty payable to a third party on net sales of an hiv protease inhibitor sold by glaxosmithkline . the subroyalty expense offsets a corresponding amount of hiv royalty revenues . we expect to continue to recognize this subroyalty as an expense in future periods . research and development expenses replace_table_token_14_th our research and development expenses include internal and external costs incurred for research and development of our drugs and drug candidates . we do not assign our internal costs , such as salary and benefits , stock-based compensation expense , laboratory supplies and infrastructure costs , to individual drugs or drug candidates , because the employees within our research and development groups typically are deployed across multiple research and development programs . these internal costs are significantly greater than our external costs , such as the costs of services provided to us by clinical research organizations and other outsourced research , which we do allocate by individual program . all research and development costs for our drugs and drug candidates are expensed as incurred . to date , we have incurred in excess of $ 5.5 billion in research and development expenses associated with drug discovery and development . the successful development of our drug candidates is highly uncertain and subject to a number of risks . in addition , the duration of clinical trials may vary substantially according to the type , complexity and novelty of the drug candidate and the disease indication being targeted . the fda and comparable agencies in foreign countries impose substantial requirements on the introduction of therapeutic pharmaceutical products , typically requiring lengthy and detailed laboratory and clinical testing procedures , sampling activities and other costly and time-consuming procedures . data obtained from nonclinical and clinical activities at any step in the testing process may be adverse and lead to discontinuation or redirection of development activities . data obtained from these activities also are susceptible to varying interpretations , which could delay , limit or prevent regulatory approval . the duration and cost of discovery , nonclinical studies and clinical trials may vary significantly over the life of a project and are difficult to predict . therefore , accurate and meaningful estimates of the ultimate costs to bring our drug candidates to market are not available . over the three year period ended december 31 , 2012 , costs related to our hcv and cf programs have represented the largest portion of our development costs . any estimates regarding development and regulatory timelines for our drug candidates are highly subjective and subject to change . in the first quarter of 2013 , we initiated a pivotal phase 3 clinical program to evaluate vx-809 in combination with ivacaftor . we expect to obtain final safety and efficacy data from two phase 3 clinical trials in this program in 2014. if these clinical trials are successful , we plan to submit an nda to the fda in 2014. we can not make a meaningful estimate when , if ever , our other clinical development programs will generate revenues and cash flows . 61 research expenses replace_table_token_15_th over the past three years we have maintained a substantial investment in research activities resulting in a 9 % increase in research expenses in 2012 as compared to 2011 and a 15 % increase in research expenses in 2011 as compared to 2010 . we expect to continue to invest in our research programs with a focus on identifying drug candidates for specialty markets . development expenses replace_table_token_16_th our development expenses increased by $ 79.8 million , or 16 % , in 2012 as compared to 2011 and by $ 42.7 million , or 10 % , in 2011 as compared to 2010 , principally due to increases in headcount and the expansion of our development efforts as we completed the registration programs for telaprevir and ivacaftor , prepared the regulatory filings needed to obtain approval for these products and continued the development of our other drug candidates . we expect our development expenses to increase in 2013 as compared to 2012

