Delaware
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|
33
-
0336973
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(State or other jurisdiction of
incorporation or organization) |
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(IRS Employer Identification No.)
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Large accelerated filer
|
|
Accelerated filer
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|
|
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Non-accelerated filer
(Do not check if a smaller reporting company) |
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Smaller reporting company
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* | Excludes 19,785,891 shares of common stock held by directors and officers and by stockholders whose beneficial ownership is known by the Registrant to exceed 10 percent of the common stock outstanding at June 30, 2015. Exclusion of shares held by any person should not be construed to indicate that such person possesses the power, direct or indirect, to direct or cause the direction of the management or policies of the Registrant, or that such person is controlled by or under common control with the Registrant. |
PART I
|
||
Page
|
||
Item 1.
|
Business
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3
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Item 1A.
|
Risk Factors
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35
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Item 1B.
|
Unresolved Staff Comments
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41
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Item 2.
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Properties
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41
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Item 3.
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Legal Proceedings
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41
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Item 4.
|
Mine Safety Disclosures
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41
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PART II
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||
Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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41
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Item 6.
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Selected Financial Data
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43
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations
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43
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Item 7A.
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Quantitative and Qualitative Disclosures About Market Risk
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61
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Item 8.
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Financial Statements and Supplementary Data
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61
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Item 9.
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Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
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61
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Item 9A.
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Controls and Procedures
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61
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Item 9B.
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Other Information
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64
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PART III
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||
Item 10.
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Directors, Executive Officers and Corporate Governance
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64
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Item 11.
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Executive Compensation
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64
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Item 12.
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Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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64
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Item 13.
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Certain Relationships and Related Transactions, and Director Independence
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65
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Item 14.
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Principal Accounting Fees and Services
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65
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PART IV
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||
Item 15.
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Exhibits, Financial Statement Schedules
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66
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Signatures
|
● | We formed a wholly owned subsidiary, Akcea Therapeutics, to develop and commercialize our lipid drugs, volanesorsen, IONIS-APOCIII-L Rx , IONIS-APO(a)-L Rx and IONIS-ANGPTL3-L Rx . |
● | We licensed IONIS-FXI Rx to Bayer to develop and commercialize IONIS-FXI Rx for the prevention of thrombosis. |
● | We and AstraZeneca formed a strategic collaboration to discover and develop antisense therapies for treating cardiovascular and metabolic diseases, primarily focused on targets in the kidney, and renal diseases. |
● | We formed an alliance with Janssen to discover and develop antisense drugs to treat autoimmune disorders of the gastrointestinal tract. |
● | We received more than $320 million in payments from our partners in 2015. |
● | We changed our name to Ionis Pharmaceuticals, Inc. in December 2015 and our stock now trades under the ticker symbol “IONS”. |
● | We continued to make significant advances in our pipeline and completed target enrollment for three pivotal phase 3 studies, including: |
● | CHERISH, a Phase 3 study evaluating nusinersen in children with SMA. |
● | NEURO-TTR, a Phase 3 study evaluating IONIS-TTR Rx in patients with FAP. |
● | APROACH, a Phase 3 study evaluating volanesorsen in patients with FCS. |
● | We and our partners reported positive data from 13 clinical studies. These data exemplify the broad applicability and potential for antisense drugs to provide therapeutic benefit for many different diseases. These data include: |
● | Phase 2 data from two ongoing open-label studies in which infants and children with SMA treated with nusinersen experienced increases in muscle function scores. Additionally, there were no events of death or permanent ventilation reported in 2015 in nusinersen-treated infants in the ongoing Phase 2 clinical study. |
● | Data from the ongoing open-label extension study of NEURO-TTR in which patients with FAP treated with IONIS-TTR Rx for at least three months experienced reductions in TTR protein of up to 92 percent with a mean maximum (nadir) reduction of 76 percent compared to baseline. |
● | Phase 2 data from an ongoing open-label, investigator-initiated study in patients with FAC and patients with wt-TTR treated with IONIS-TTR Rx for 12 months preliminarily evidencing disease stabilization and sustained TTR reductions. |
● | Phase 2 data in which patients with high lipoprotein(a), or Lp(a), treated with IONIS-APO(a) Rx experienced reductions in Lp(a) of up to 94 percent. |
● | Phase 1/2 data in which patients with high Lp(a) treated with IONIS-APO(a)-L Rx experienced a greater than 30-fold increase in potency over IONIS-APO(a) Rx , the non-LICA Lp(a) drug. Patients also experienced dose-dependent reductions in Lp(a) of up to 97 percent and 99 percent after a single dose and multiple doses of IONIS-APO(a)-L Rx , respectively. |
● | Clinical and preclinical data in patients with cancer, including advanced/metastatic hepatocellular carcinoma and diffuse large B cell lymphoma, treated with IONIS-STAT3-2.5 Rx evidencing antitumor activity. |
● | Phase 2 data in which patients with type 2 diabetes treated with IONIS-PTP1B Rx experienced statistically significant mean reductions in body weight and HbA1c (0.7 percentage point). |
● | Phase 1 results in which healthy volunteers dosed with IONIS-ANGPTL3 Rx experienced significant reductions of up to 93 percent in angiopoietin-like 3 protein, up to 63 percent in triglycerides and up to 46 percent in total cholesterol. |
● | Phase 1 results in which healthy volunteers dosed with IONIS-PKK Rx experienced significant, dose-dependent reductions of prekallikrein of up to 95 percent. |
● | Phase 3 data from the FOCUS FH study evaluating Kynamro in patients with severe heterozygous familial hypercholesterolemia. This study met its primary endpoint with a statistically significant reduction of LDL-Cholesterol, or LDL-C. |
● | We published clinical data from our novel lipid drugs, volanesorsen and IONIS-APO(a) Rx , in the New England Journal of Medicine and The Lancet, respectively. |
● | The U.S. Food and Drug Administration, or FDA, granted volanesorsen orphan drug designation for the treatment of patients with FCS. |
● | The European Medicines Agency, or EMA, granted IONIS-HTT Rx orphan drug designation for the treatment of patients with Huntington’s Disease. |
● | We, together with our partners, continued to advance our pipeline of drugs, initiating 11 clinical studies, including one Phase 3 study and six Phase 2 studies. |
●
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Increasing the understanding of the patients and treating physicians who take care of these patients;
|
●
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Increasing awareness of FCS;
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●
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Enhancing the speed and quality of diagnosis; and
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●
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Understanding the burden of disease.
|
● | Direct application to diseases at the genetic level by targeting RNA: antisense technology represents a direct route from gene to drug. The explosion in genomic information has led to the discovery of many new disease-causing proteins and RNAs, and has created new opportunities accessible to antisense technology. |
● | Precise specificity: we design antisense drugs to target a single RNA, which minimizes or eliminates the possibility our drugs will bind to unintended targets which can cause unwanted side effects. |
● | Good drug properties: antisense drugs distribute well throughout the body without the need for special formulations or vehicles. They also have a relatively long half-life of approximately two to four weeks, which means patients and/or healthcare providers can dose our drugs once a week. Antisense drugs using our more advanced technology also have the potential for patients and/or their healthcare providers to dose our drugs once a month, once a quarter or even less frequently. |
● | Ability to combine with other drugs: because antisense drugs do not interact with the enzymes that metabolize or break down other drugs, physicians can use our drugs in combination with other drugs. |
● | Broad applications to multiple disease targets, multiple tissues and multiple mechanisms: there are virtually no “undruggable” targets with antisense technology. |
● | Efficient discovery and early development: because of the efficiency of our antisense technology, our drug discovery and early development costs and success rates compare favorably to small molecule or antibody drug discovery and development. |
● | We form strategic partnerships through which we can broadly expand our drug discovery efforts to new disease targets in specific therapeutic areas in which our partners can provide tools and resources to complement our drug discovery efforts. For instance, we established a broad strategic alliance with Biogen that pairs Biogen’s extensive resources and expertise in neurological diseases with our antisense technology. Together we are creating a franchise of novel potential drugs for neurological diseases that we believe will expand both our pipeline and Biogen’s pipeline with promising new drugs. |
● | We form early stage research and development partnerships that allow us to expand the application of our technology to new therapeutic areas. For example, we established a collaboration with Janssen, which brings together our RNA-targeted technology platform and Janssen’s expertise in autoimmune disorders and therapeutic formulation to discover and develop antisense drugs to treat autoimmune disorders in the gastrointestinal, or GI, tract. |
● | We form late stage development and commercialization partnerships that enable us to leverage our partner’s global expertise and resources needed to support large commercial opportunities. For example, we licensed IONIS-FXI Rx to Bayer to develop and commercialize IONIS-FXI Rx for the prevention of thrombosis. As a leader in the antithrombotic market, Bayer has the expertise, resources and commitment to broadly develop IONIS-FXI Rx . |
● | We also work with a consortium of companies that can exploit our drugs and technologies outside our primary areas of focus. We refer to these companies as satellite companies. Through our satellite company collaborations, we expand the reach and potential of RNA-targeting therapeutics into disease areas that are outside of our core focus. |
Type of Patent Claim
|
Description
|
||
1. Chemically Modified Nucleosides and Oligonucleotides
1. Antisense Drug Design Motifs
2. Therapeutic Methods
3. Antisense Sequence
4. Drug Composition
|
|
1. Target and sequence independent
2. Sequence independent
3. Chemistry independent
4. Specific claim to drug candidates
|
|
Jurisdiction
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|
Patent No.
|
|
Title
|
|
Expiration
|
|
Description of Claims
|
|
|
|
|
|
|
|
|
|
United States
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|
7,101,993
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|
OLIGONUCLEOTIDES CONTAINING 2’O-MODIFIED PURINES
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|
2023
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|
Covers certain MOE nucleosides and oligonucleotides containing these nucleotides.
|
United States
|
|
7,399,845
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|
6-MODIFIED BICYCLIC NUCLEIC ACID ANALOGS
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|
2027
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|
Covers our cEt nucleosides and oligonucleotides containing these nucleoside analogs.
|
United States
|
|
7,741,457
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|
6-MODIFIED BICYCLIC NUCLEIC ACID ANALOGS
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|
2027
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|
Covers our cEt nucleosides and oligonucleotides containing these nucleoside analogs.
|
United States
|
|
8,022,193
|
|
6-MODIFIED BICYCLIC NUCLEIC ACID ANALOGS
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|
2027
|
|
Covers our cEt nucleosides and oligonucleotides containing these nucleoside analogs.
|
United States
|
7,569,686
|
COMPOUNDS AND METHODS FOR SYNTHESIS OF BICYCLIC NUCLEIC ACID ANALOGS
|
2027
|
Covers methods of synthesizing our cEt nucleosides.
|
||||
Europe
|
EP1984381
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6-MODIFIED BICYCLIC NUCLEIC ACID ANALOGS
|
2027
|
Covers our cEt nucleosides and oligonucleotides containing these nucleoside analogs.
|
Jurisdiction
|
|
Patent/
Application No. |
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
7,015,315
|
|
GAPPED OLIGONUCLEOTIDES
|
|
2023
|
|
Covers 2’-O-alkyl-O-alkyl gapmer oligonucleotides.
|
Jurisdiction
|
|
Patent/
Application No. |
|
Title
|
|
Expiration
|
|
Description of Claims
|
Europe
|
|
EP2021472
|
|
COMPOUNDS AND METHODS FOR MODULATING GENE EXPRESSION
|
|
2027
|
|
Short gapmer oligonucleotides, 10 to 14 nucleotides in length, with bicyclic nucleosides, which includes cEt locked nucleic acids, in the wings for the treatment of cardiovascular or metabolic disorders
|
United States
|
|
7,750,131
|
|
6-MODIFIED BICYCLIC NUCLEIC ACID ANALOGS
|
|
2027
|
|
Covers cEt containing gapmer compounds
|
Europe
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|
EP2092065
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|
ANTISENSE COMPOUNDS
|
|
2027
|
|
Gapmer compounds having wings comprised of 2’-MOE and bicyclic nucleosides
|
Europe
|
EP2410053
|
ANTISENSE COMPOUNDS
|
2027
|
Gapmer compounds having wings comprised of 2’-MOE and bicyclic nucleosides
|
Jurisdiction
|
|
Patent/
Application No. |
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
9,127,276
|
|
CONJUGATED ANTISENSE COMPOUNDS AND THEIR USE
|
|
2034
|
|
Covers our primary THA LICA conjugate having any type of linker and conjugated to any group of nucleosides, including gapmers, double-stranded siRNA compounds, and fully modified oligonucleotides
|
United States
|
|
9,181,549
|
|
CONJUGATED ANTISENSE COMPOUNDS AND THEIR USE
|
|
2034
|
|
Covers our primary THA conjugate having our preferred linker and cleavable moiety conjugated to any oligomeric compound or any nucleoside having a 2’-MOE modification or a cEt modification
|
Jurisdiction
|
|
Patent No.
|
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
6,210,892
|
|
ALTERATION OF CELLULAR BEHAVIOR BY MODULATION OF MRNA PROCESSING
|
|
2018
|
|
Broad claims of altering mRNA processing with a fully modified 2’MOE oligonucleotide.
|
United States
|
|
8,361,977
|
|
COMPOSITIONS AND METHODS FOR MODULATION OF SMN2 SPLICING
|
|
2030
|
|
Sequence and chemistry (full 2’-MOE) of nusinersen
|
Europe
|
|
1910395
|
|
COMPOSITIONS AND METHODS FOR MODULATION OF SMN2 SPLICING
|
|
2026
|
|
Sequence and chemistry (full 2’-MOE) of nusinersen
|
United States
|
|
7,838,657
|
|
SPINAL MUSCULAR ATROPHY (SMA) TREATMENT VIA TARGETING OF SMN2 SPLICE SITE INHIBITORY SEQUENCES
|
|
2027
|
|
Oligonucleotides having sequence of nusinersen (chemistry independent)
|
United States
|
|
8,110,560
|
|
SPINAL MUSCULAR ATROPHY (SMA) TREATMENT VIA TARGETING OF SMN2 SPLICE SITE INHIBITORY SEQUENCES
|
|
2025
|
|
Methods of using antisense oligonucleotides having sequence of nusinersen to alter splicing of SMN2 and/or to treat SMA
|
United States
|
8,980,853
|
COMPOSITIONS AND METHODS FOR MODULATION OF SMN2 SPLICING IN A SUBJECT
|
2030
|
Methods of administering nusinersen
|
Jurisdiction
|
|
Patent No.
|
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
8,101,743
|
|
MODULATION OF TRANSTHYRETIN EXPRESSION
|
|
2025
|
|
Antisense sequence and chemistry of IONIS-TTR
Rx
|
United States
|
|
8,697,860
|
|
DIAGNOSIS AND TREATMENT OF DISEASE
|
|
2031
|
|
Composition of IONIS-TTR
Rx
|
United States
|
9,061,044
|
MODULATION OF TRANSTHYRETIN EXPRESSION
|
2031
|
Sodium salt composition of IONIS-TTR
Rx
|
Jurisdiction
|
|
Patent No.
|
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
7,598,227
|
|
MODULATION OF APOLIPOPROTEIN C-III EXPRESSION
|
|
2023
|
|
Methods of treating hyperlipidemia, lowering cholesterol levels and lowering triglyceride levels with an antisense compound comprising an antisense oligonucleotide 15-30 linked nucleosides specifically hybridizable within a nucleotide region of apoCIII targeted by volanesorsen
|
United States
|
|
7,750,141
|
|
MODULATION OF APOLIPOPROTEIN C-III EXPRESSION
|
|
2023
|
|
Antisense sequence and chemistry of volanesorsen
|
Europe
|
|
EP1622597
|
|
MODULATION OF APOLIPOPROTEIN C-III EXPRESSION
|
|
2023
|
|
Antisense sequence and chemistry of volanesorsen
|
Australia
|
|
2004231550
|
|
MODULATION OF APOLIPOPROTEIN C-III EXPRESSION
|
|
2023
|
|
Compounds 12-50 nucleobases in length specifically hybridizable with SEQ ID 4 (apoCIII), the antisense sequence and chemistry of volanesorsen and methods of their use in treating hyperlipidemia, lowering cholesterol levels and lowering triglyceride levels
|
United States
|
9,157,082
|
MODULATION OF APOLIPOPROTEIN CIII (APOCIII) EXPRESSION
|
2032
|
Methods of using APOCIII antisense oligonucleotides for reducing pancreatitis and chylomicronemia and increasing HDL
|
Jurisdiction
|
|
Patent No.
|
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
7,407,943
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2021
|
|
Methods of inhibiting expression of apoB, decreasing serum cholesterol, decreasing lipoprotein levels, decreasing serum triglycerides in a human with an antisense compound 12 to 30 nucleotide in length and 100% complementary to human apoB wherein the compound is not a ribozyme.
|
Australia
|
|
2002-326481
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2022
|
|
An isolated oligonucleotide compound 12 to 30 nucleobases in length 100% complementary to at least a 12-nucleobase portion of a nucleic acid molecule having nucleotides 151-12820 of SEQ ID 3 (apoB) which is not a ribozyme and use of such compound in therapy
|
Japan
|
|
4471650
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2022
|
|
Use of an antisense oligonucleotide 12 to 30 nucleobases in length and 100% complementary to human apoB having one or more modifications and inhibiting expression of apoB by at least 90% in primary hepatocytes when present at a concentration of 300 nM for preparation of a medicament for decreasing serum cholesterol, and decreasing lipoprotein levels in a human
|
Europe
|
EP2174945
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
2022
|
Use of an antisense oligonucleotide 20 nucleobases in length and 100% complementary to human apoB having a 5-10-5 MOE motif for treating conditions associated with ApoB
|
||||
United States
|
|
7,511,131
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2025
|
|
Antisense sequence and composition of matter of Kynamro
|
Europe
|
|
EP1569695
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2023
|
|
Antisense sequence and composition of matter of Kynamro
|
Europe
|
|
EP2336318
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2023
|
|
Antisense sequence and composition of matter of Kynamro
|
India
|
|
219847
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2023
|
|
Antisense sequence and composition of matter of Kynamro
|
Australia
|
|
2003294281
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2023
|
|
Antisense sequence and composition of matter of Kynamro
|
South Africa
|
|
2005/03690
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2023
|
|
Antisense sequence and composition of matter of Kynamro
|
Japan
|
4986109
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
2023
|
Antisense sequence and composition of matter of Kynamro
|
||||
Europe
|
EP2409713
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
2025
|
Kynamro for use in treating a human with hypercholesterolemia, wherein the oligonucleotide is administered at 200mg once per week by subcutaneous injection
|
Jurisdiction
|
|
Patent No.
|
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
6,900,187
|
|
TRPM-2 ANTISENSE THERAPY USING AN OLIOGNUCLEOTIDE HAVING 2’-O-(2-METHOXY)ETHYL MODIFICATIONS
|
|
2021
|
|
Antisense sequence and composition of custirsen
|
Jurisdiction
|
|
Patent No.
|
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
5,898,031
|
|
OLIGORIBONUCLEOTIDES FOR CLEAVING RNA
|
|
2016
|
|
Oligonucleotides comprising regions of RNA nucleosides and regions of nucleosides having stabilizing chemical modifications. Such oligonucleotides are suitable for use in single- and double-stranded applications.
|
United States
|
|
6,107,094
|
|
OLIGORIBONUCLEOTIDES AND RIBONUCLEASES FOR CLEAVING RNA
|
|
2016
|
|
Compounds and methods that use oligonucleotides having both RNA nucleosides and chemically modified nucleosides, including methods that rely on a dsRNase to reduce target RNA and compounds having nucleosides with improved affinity and/or stability.
|
United States
|
|
7,432,249
|
|
OLIGORIBONUCLEOTIDES AND RIBONUCLEASES FOR CLEAVING RNA
|
|
2016
|
|
Pharmaceutical compositions comprising a diluent or carrier and a single-stranded antisense oligonucleotide having a plurality of RNA nucleosides and at least one sugar modification.
|
United States
|
|
7,432,250
|
|
OLIGORIBONUCLEOTIDES AND RIBONUCLEASES FOR CLEAVING RNA
|
|
2016
|
|
Methods for treating a patient by administering an antisense compound having a plurality of RNA nucleosides and at least one sugar modification.
|
United States
|
|
7,629,321
|
|
OLIGORIBONUCLEOTIDES AND RIBONUCLEASES FOR CLEAVING RNA
|
|
2016
|
|
Methods for cleaving a target RNA in a cell by contacting the cell with a single-stranded antisense compound having a plurality of RNA nucleosides and at least one sugar modification.
|
United States
|
|
7,695,902
|
|
OLIGORIBONUCLEOTIDES AND RIBONUCLEASES FOR CLEAVING RNA
|
|
2016
|
|
Methods of activating a dsRNase by contacting the dsRNase with a double-stranded antisense oligonucleotide where at least one strand has a plurality of RNA nucleosides and at least one sugar modification. The methods may be performed inside a cell.
|
Drug
|
Company
|
Drug Description
|
Phase
|
Admin/Dosing
|
Efficacy(1)
|
Safety(1)
|
AVXS-101
|
AveXis
|
Gene therapy that corrects the SMN1 gene using the
AAV9 Vector
|
1
|
Infusion
|
All 15 patients enrolled in the study were event free as of Dec 31, 2015. All patients experienced either improvement or stabilization in motor skills relative to their baseline measurement
|
Well tolerated to date
|
RG7800
|
PTC Therapeutics/ Roche/ SMA Foundation
|
A small molecule drug that modulates splicing of the
SMN2 gene
|
2
|
Oral
|
Up to three-fold increases in the ratio of full length SMN2 mRNA to SMN2Δ7 mRNA and up to two-fold increases in SMN protein were observed in plasma versus baseline in SMA patients
|
RG7800 on clinical hold due to non-clinical safety finding
|
RG7916
|
PTC Therapeutics/ Roche/ SMA Foundation
|
A small molecule drug that modulates splicing of the
SMN2 gene
|
1
|
Oral
|
None reported
|
None reported
|
LMI070
|
Novartis
|
A small molecule drug that modulates splicing of the
SMN2 gene
|
1/2
|
Oral
|
None reported
|
None reported
|
(1)
|
Taken from public documents including respective company press releases, company presentations, and scientific presentations.
|
Drug
|
Company
|
Drug Description
|
Phase
|
Admin/Dosing
|
Efficacy*
|
Safety*
|
Patisiran
|
Alnylam
|
An RNAi drug formulated with lipid nanoparticles to inhibit TTR mRNA
|
3
|
Infusion every 3 weeks with pre-treatment with steroids
|
~90% mean maximum reduction in TTR
|
Mild flushing (25.9%) and infusion-related reactions (18.5%) in Phase 2 OLE
|
Revusiran
|
Alnylam
|
An RNAi drug conjugated with GalNAC to inhibit TTR mRNA in liver cells
|
3
|
Weekly large volume subcutaneous injection
|
~87% mean maximum reduction in TTR
|
Injection site reactions (ISRs) reported in 44% of patients in the Phase 2 OLE, 3 patients discontinued OLE due to ISRs or diffuse rash
|
Tafamidis
|
Pfizer
|
A small molecule drug to stabilize TTR Protein
|
3, Approved in the EU
|
Daily oral capsule
|
In 45% of patients taking Tafamidis, nerve function either improved or stabilized, compared with 30% of patients taking placebo
|
Urinary tract infection, vaginal infection, upper abdominal pain and diarrhea
|
Diflunisal
|
N/A Generic
|
A non-steroid anti-inflammatory agent
|
Approved
|
Daily oral capsule/doses
|
Improved nerve function as shown by lower Neuropathy Impairment Score plus 7 nerve tests, or NIS+7. The NIS+7 score increased by 25.0 points in the placebo group versus 8.7 points in the diflunisal group
|
In two studies repurposing diflunisal for use in TTR amyloidosis, drug-related adverse events that led to discontinuation were: gastrointestinal bleeding, low platelets, deterioration of renal function, congestive heart failure, glaucoma and nausea.
|
Tolcapone
|
SOM Biotech
|
Small molecule repurposed generic drug
|
1/2
|
Daily oral dose
|
Shows binding and stabilization of TTR in humans
|
No drug related adverse events reported
|
ALN-TTRsc02
|
Alnylam
|
An RNAi drug conjugated with GalNAC to inhibit TTR mRNA in liver cells
|
Preclinical
|
Monthly or quarterly
|
No data in humans
|
No data in humans
|
(1)
|
Taken from public documents including respective company press releases, company presentations, and scientific presentations. Diflunisal efficacy and safety came from the published papers of two investigator sponsored studies, Berk JL, Suhr OB, Obici L, et al. Repurposing Diflunisal for Familial Amyloid Polyneuropathy: A Randomized Clinical Trial. JAMA. 2013;310(24):2658-2667 and Sekijima YS, Toja K, Morita H, et al. Safety and efficacy of long-term diflunisal administration in hereditary transthyretin (ATTR) amyloidosis. Amyloid. 2015;22(2):79-83.
|
Drug
|
Company
|
Drug Description
|
Phase
|
Admin/Dosing
|
Efficacy(1)
|
Safety(1)
|
Glybera
|
uniQure NV
|
Adeno-associated Virus Gene therapy
|
Approved in EU, Suspended development in the US
|
A single treatment involving multiple injections
|
Showed a reduction in blood fat levels after meals in some patients. There was also a reduction in the number of pancreatitis attacks in some patients.
|
Common side effects include: leg pain following injection, headache, tiredness, high body temperature, bruising and potential damage to muscle tissue
|
Metreleptin
|
Aegerion
|
A synthetic form of the hormone leptin
|
2
|
Reconstituted subcutaneous injection
|
44.4% mean reduction in triglycerides at 4 months in patients with abnormal triglyceride levels
|
Anti-metreleptin antibodies, hypoglycemia, hypersensitivity, risk of T-cell lymphoma
|
(1)
|
Taken from public documents including respective company press releases, company presentations, and scientific presentations.
|
Drug
|
Company
|
Drug Description
|
Phase
|
Admin/Dosing
|
Efficacy(1)
|
Safety(1)
|
Lomitapide
|
Aegerion
|
A small molecule drug that inhibits microsomal triglyceride transfer protein
|
Approved
|
Titrate up, 5-60 mg oral daily
|
40% reduction in LDL-C from baseline (change from mean 336 mg/dL LDL-C to 190 mg/dL LDL-C) at week 26 in Phase 3 study
|
Hepatic steatosis, risk of steatohepatitis, transaminase abnormalities, risk for drug-induced liver injury, risk for deficiencies in fat-soluble vitamins and essential fatty acids
|
Evolocumab
|
Amgen
|
A monoclonal antibody drug that inhibits PCSK9 protein
|
Approved
|
Monthly sub-q
|
TESLA (phase 2/3 in HOFH): 31% mean reduction in LDL-C from baseline
|
nasopharyngitis, upper respiratory tract infections, influenza, arthralgia, and back pain
|
(1)
|
Taken from public documents including respective company press releases, company presentations, and scientific presentations
|
Name
|
|
Age
|
|
Position
|
Stanley T. Crooke, M.D., Ph.D.
|
|
70
|
|
Chairman, Chief Executive Officer and President
|
B. Lynne Parshall, J.D.
|
|
61
|
|
Director, Chief Operating Officer
|
C. Frank Bennett, Ph.D.
|
|
59
|
|
Senior Vice President, Antisense Research
|
Sarah Boyce
|
44
|
Chief Business Officer
|
||
Richard S. Geary, Ph.D.
|
|
58
|
|
Senior Vice President, Development
|
Elizabeth L. Hougen
|
|
54
|
|
Senior Vice President, Finance and Chief Financial Officer
|
Brett P. Monia, Ph.D.
|
|
54
|
|
Senior Vice President, Drug Discovery and Corporate Development
|
Patrick R. O’Neil, Esq.
|
|
42
|
|
Senior Vice President, Legal, General Counsel and Corporate Secretary
|
| receipt and scope of marketing authorizations; |
| establishment and demonstration in the medical and patient community of the efficacy and safety of our drugs and their potential advantages over competing products; |
| cost and effectiveness of our drugs compared to other available therapies; |
| patient convenience of the dosing regimen for our drugs; and |
| reimbursement policies of government and third-party payors. |
| priced lower than our drugs; |
| safer than our drugs; |
| more effective than our drugs; or |
| more convenient to use than our drugs. |
| the clinical study may produce negative or inconclusive results; |
| regulators may require that we hold, suspend or terminate clinical research for noncompliance with regulatory requirements; |
| we, our partners, the FDA or foreign regulatory authorities could suspend or terminate a clinical study due to adverse side effects of a drug on subjects in the trial; |
| we may decide, or regulators may require us, to conduct additional preclinical testing or clinical studies; |
| enrollment in our clinical studies may be slower than we anticipate; |
| the cost of our clinical studies may be greater than we anticipate; and |
| the supply or quality of our drugs or other materials necessary to conduct our clinical studies may be insufficient, inadequate or delayed. |
| conduct clinical studies; |
| seek and obtain marketing authorization; and |
| manufacture, market and sell our drugs. |
| pursue alternative technologies or develop alternative products that may be competitive with the drug that is part of the collaboration with us; |
| pursue higher-priority programs or change the focus of its own development programs; or |
| choose to devote fewer resources to our drugs than it does for its own drugs. |
| changes in existing collaborative relationships and our ability to establish and maintain additional collaborative arrangements; |
| continued scientific progress in our research, drug discovery and development programs; |
| the size of our programs and progress with preclinical and clinical studies; |
| the time and costs involved in obtaining marketing authorizations; |
| competing technological and market developments, including the introduction by others of new therapies that address our markets; and |
| the profile and launch timing of our drugs, including nusinersen, IONIS-TTR Rx and volanesorsen. |
| interruption of our research, development and manufacturing efforts; |
| injury to our employees and others; |
| environmental damage resulting in costly clean up; and |
| liabilities under federal, state and local laws and regulations governing health and human safety, as well as the use, storage, handling and disposal of these materials and resultant waste products. |
Item 1B. | Unresolved Staff Comments |
Property Description
|
Location
|
Square Footage
|
Initial Lease Term
End Date
|
Lease Extension Options
|
||||||
Ionis laboratory and office space facility
|
Carlsbad, CA
|
176,000
|
2031
|
Four, five-year options to extend
|
||||||
Ionis manufacturing facility
|
Carlsbad, CA
|
28,700
|
2031
|
Four, five-year options to extend
|
||||||
Ionis adjacent manufacturing facility
|
Carlsbad, CA
|
25,800
|
2021
|
Two, five-year options to extend
|
||||||
Akcea office space facility
|
Cambridge, MA
|
6,100
|
2018
|
None
|
||||||
236,600
|
Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
|
HIGH
|
LOW
|
||||||
2015
|
|
|
||||||
First Quarter
|
$
|
77.80
|
$
|
57.60
|
||||
Second Quarter
|
$
|
71.50
|
$
|
55.62
|
||||
Third Quarter
|
$
|
58.73
|
$
|
37.38
|
||||
Fourth Quarter
|
$
|
65.34
|
$
|
38.30
|
||||
2014
|
||||||||
First Quarter
|
$
|
62.66
|
$
|
38.04
|
||||
Second Quarter
|
$
|
45.04
|
$
|
22.25
|
||||
Third Quarter
|
$
|
43.42
|
$
|
27.37
|
||||
Fourth Quarter
|
$
|
67.12
|
$
|
35.26
|
|
Dec-10
|
Dec-11
|
Dec-12
|
Dec-13
|
Dec-14
|
Dec-15
|
||||||||||||||||||
Ionis Pharmaceuticals, Inc.
|
$
|
100.00
|
$
|
71.25
|
$
|
103.16
|
$
|
393.68
|
$
|
610.08
|
$
|
611.96
|
||||||||||||
NASDAQ Composite Index
|
$
|
100.00
|
$
|
100.53
|
$
|
116.92
|
$
|
166.19
|
$
|
188.78
|
$
|
199.95
|
||||||||||||
NASDAQ Biotechnology Index
|
$
|
100.00
|
$
|
113.92
|
$
|
153.97
|
$
|
263.29
|
$
|
348.49
|
$
|
369.06
|
(1) | This section is not “soliciting material,” is not deemed “filed” with the SEC, is not subject to the liabilities of Section 18 of the Exchange Act and is not to be incorporated by reference in any of our filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing. |
|
Years Ended December 31,
|
|||||||||||||||||||
|
2015
|
2014
|
2013
|
2012
|
2011
|
|||||||||||||||
Consolidated Statement of Operations Data:
|
|
|
|
|
|
|||||||||||||||
Revenue
|
$
|
283,703
|
$
|
214,161
|
$
|
147,285
|
$
|
102,049
|
$
|
99,086
|
||||||||||
Research, development and patent expenses
|
$
|
322,292
|
$
|
241,751
|
$
|
184,033
|
$
|
158,458
|
$
|
157,397
|
||||||||||
Net loss attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(88,278
|
)
|
$
|
(38,984
|
)
|
$
|
(60,644
|
)
|
$
|
(65,478
|
)
|
$
|
(84,801
|
)
|
|||||
Basic and diluted net loss per share attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(0.74
|
)
|
$
|
(0.33
|
)
|
$
|
(0.55
|
)
|
$
|
(0.65
|
)
|
$
|
(0.85
|
)
|
|||||
Shares used in computing basic and diluted net loss per share
|
119,719
|
117,691
|
110,502
|
100,576
|
99,656
|
|
As of December 31,
|
|||||||||||||||||||
|
2015
|
2014
|
2013
|
2012
|
2011
|
|||||||||||||||
Consolidated Balance Sheet:
|
|
|
|
|
|
|||||||||||||||
Cash, cash equivalents and short-term investments
|
$
|
779,183
|
$
|
728,832
|
$
|
656,761
|
$
|
374,446
|
$
|
343,664
|
||||||||||
Working capital
|
$
|
688,127
|
$
|
721,265
|
$
|
637,698
|
$
|
349,116
|
$
|
284,027
|
||||||||||
Investment in Regulus Therapeutics Inc.(1)
|
$
|
24,792
|
$
|
81,881
|
$
|
52,096
|
$
|
33,622
|
$
|
4,424
|
||||||||||
Total assets
|
$
|
956,105
|
$
|
955,809
|
$
|
847,156
|
$
|
545,686
|
$
|
484,894
|
||||||||||
Long-term debt and other obligations, less current portion
|
$
|
606,439
|
$
|
582,697
|
$
|
370,954
|
$
|
288,598
|
$
|
232,924
|
||||||||||
Accumulated deficit
|
$
|
(1,094,872
|
)
|
$
|
(1,006,594
|
)
|
$
|
(967,610
|
)
|
$
|
(906,966
|
)
|
$
|
(841,488
|
)
|
|||||
Stockholders’ equity
|
$
|
200,790
|
$
|
257,780
|
$
|
378,390
|
$
|
182,766
|
$
|
171,434
|
||||||||||
(1) | In October 2012, Regulus completed an IPO and we changed to accounting for our investment in Regulus at fair value from the equity method because our ownership in Regulus dropped below 20 percent and we no longer had significant influence over Regulus’ operating and financial policies. Our investment in Regulus is further described in Note 2, Investments, in the Notes to the Consolidated Financial Statements. |
2015
|
2014
|
2013
|
||||||||||
Total revenue
|
$
|
283,703
|
$
|
214,161
|
$
|
147,285
|
||||||
Total operating expenses
|
$
|
359,465
|
$
|
261,891
|
$
|
198,951
|
||||||
Loss from operations
|
$
|
(75,762
|
)
|
$
|
(47,730
|
)
|
$
|
(51,666
|
)
|
|||
Net loss
|
$
|
(88,278
|
)
|
$
|
(38,984
|
)
|
$
|
(60,644
|
)
|
|||
Cash, cash equivalents and short-term investments
|
$
|
779,183
|
$
|
728,832
|
$
|
656,761
|
| Assessing the propriety of revenue recognition and associated deferred revenue; |
| Determining the proper valuation of investments in marketable securities and other equity investments; |
| Determining the appropriate cost estimates for unbilled preclinical studies and clinical development activities; and |
| Estimating our net deferred income tax asset valuation allowance. |
| The exclusive license we granted to Bayer to develop and commercialize IONIS-FXI Rx for the treatment of thrombosis; |
| The development services we agreed to perform for IONIS-FXI Rx ; and |
| The initial supply of API. |
| Estimated future product sales; |
| Estimated royalties on future product sales; |
| Contractual milestone payments; |
| Expenses we expect to incur; |
| Income taxes; and |
| An appropriate discount rate. |
| The number of internal hours we will spend performing these services; |
| The estimated cost of work we will perform; |
| The estimated cost of work that we will contract with third parties to perform; and |
| The estimated cost of drug product we will use. |
| $91.2 million to the IONIS-FXI Rx exclusive license; |
| $4.3 million for ongoing development services; and |
| $4.5 million for the delivery of API. |
| We recognized the portion of the consideration attributed to the IONIS-FXI Rx license immediately because we delivered the license and earned the revenue; |
| We will recognize the amount attributed to the API supply when we deliver it to Bayer. |
| In January 2012, we entered into a collaboration agreement with Biogen to develop and commercialize nusinersen for SMA. As part of the collaboration, we received a $29 million upfront payment and we are responsible for global development of nusinersen through completion of Phase 2/3 clinical trials. |
| In June 2012, we entered into a second and separate collaboration agreement with Biogen to develop and commercialize a novel antisense drug targeting DMPK. As part of the collaboration, we received a $12 million upfront payment and we are responsible for global development of the drug through the completion of a Phase 2 clinical trial. |
| In December 2012, we entered into a third and separate collaboration agreement with Biogen to discover and develop antisense drugs against three targets to treat neurological or neuromuscular disorders. As part of the collaboration, we received a $30 million upfront payment and we are responsible for the discovery of a lead antisense drug for each of three targets. |
| In September 2013, we entered into a fourth and separate collaboration agreement with Biogen to leverage antisense technology to advance the treatment of neurological diseases. We granted Biogen exclusive rights to the use of our antisense technology to develop therapies for neurological diseases as part of this broad collaboration. We received a $100 million upfront payment and we are responsible for discovery and early development through the completion of a Phase 2 clinical trial for each antisense drug identified during the six-year term of this collaboration, while Biogen is responsible for the creation and development of small molecule treatments and biologics. |
| Designation of a development candidate. Following the designation of a development candidate, IND-enabling animal studies for a new development candidate generally take 12 to 18 months to complete; |
| Initiation of a Phase 1 clinical trial. Generally, Phase 1 clinical trials take one to two years to complete; |
| Initiation or completion of a Phase 2 clinical trial. Generally, Phase 2 clinical trials take one to three years to complete; |
| Initiation or completion of a Phase 3 clinical trial. Generally, Phase 3 clinical trials take two to four years to complete. |
| Filing of regulatory applications for marketing authorization such as a New Drug Application, or NDA, in the United States or a Marketing Authorization Application, or MAA, in Europe. Generally, it takes six to twelve months to prepare and submit regulatory filings. |
| Marketing authorization in a major market, such as the United States, Europe or Japan. Generally it takes one to two years after an application is submitted to obtain authorization from the applicable regulatory agency. |
| First commercial sale in a particular market, such as in the United States or Europe. |
| Product sales in excess of a pre-specified threshold, such as annual sales exceeding $1 billion. The amount of time to achieve this type of milestone depends on several factors including but not limited to the dollar amount of the threshold, the pricing of the product and the pace at which customers begin using the product. |
| Substantive uncertainty exists as to the achievement of the milestone event at the inception of the arrangement; |
| The achievement of the milestone involves substantive effort and can only be achieved based in whole or in part on our performance or the occurrence of a specific outcome resulting from our performance; |
| The amount of the milestone payment appears reasonable either in relation to the effort expended or to the enhancement of the value of the delivered items; |
| There is no future performance required to earn the milestone; and |
| The consideration is reasonable relative to all deliverables and payment terms in the arrangement. |
● | $91.2 million from Bayer in connection with our exclusive license agreement for IONIS-FXI Rx ; |
● | $72.6 million from Biogen for advancing the Phase 3 program for nusinersen, advancing IONIS-DMPK-2.5 Rx and IONIS-BIIB4 Rx , and validating three new targets for neurological disorders; |
● | $22 million from Roche for initiating a Phase 1/2 study of IONIS-HTT Rx ; |
● | $20 million from GSK for advancing the Phase 3 study of IONIS-TTR Rx and initiating a Phase 1 study of IONIS-GSK4-L Rx ; and |
● | $75.6 million primarily from the amortization of upfront fees and manufacturing services we performed for our partners. |
● | We are conducting more later-stage clinical trials in 2015 than we did in 2014, including the continuation of our Phase 3 programs for nusinersen, IONIS-TTR Rx and volanesorsen. As drugs move forward to more advanced stages of development, including into larger, longer clinical studies, the cost of development increases. As our Phase 3 programs continue to progress in 2016, we expect the costs associated with these programs to continue to increase modestly. |
● | Akcea operating expenses increased in 2015 as it began building its commercial infrastructure and advanced the pre-commercialization activities necessary to successfully launch volanesorsen within the next few years. Akcea’s operating expenses for 2016 will increase as it expands these activities. |
● | Since we grant the majority of our stock-options in January, we had an increase in stock compensation expense because our stock price was higher in January 2015 compared to January 2014. |
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Ionis Core
|
$
|
256,512
|
$
|
208,811
|
||||
Akcea Therapeutics
|
47,887
|
21,697
|
||||||
Elimination of intercompany activity
|
(4,248
|
)
|
—
|
|||||
Subtotal
|
300,151
|
230,508
|
||||||
Non-cash compensation expense related to equity awards
|
59,314
|
31,383
|
||||||
Total operating expenses
|
$
|
359,465
|
$
|
261,891
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Research, development and patent expenses
|
$
|
278,654
|
$
|
215,908
|
||||
Non-cash compensation expense related to equity awards
|
43,638
|
25,843
|
||||||
Total research, development and patent expenses
|
$
|
322,292
|
$
|
241,751
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Ionis Core
|
$
|
240,006
|
$
|
195,007
|
||||
Akcea Therapeutics
|
42,896
|
20,901
|
||||||
Elimination of intercompany activity
|
(4,248
|
)
|
—
|
|||||
Subtotal
|
278,654
|
215,908
|
||||||
Non-cash compensation expense related to equity awards
|
43,638
|
25,843
|
||||||
Total research, development and patent expenses
|
$
|
322,292
|
$
|
241,751
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Antisense drug discovery expenses
|
$
|
49,331
|
$
|
43,620
|
||||
Non-cash compensation expense related to equity awards
|
11,914
|
7,290
|
||||||
Total antisense drug discovery expenses
|
$
|
61,245
|
$
|
50,910
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Nusinersen
|
$
|
35,164
|
$
|
19,064
|
||||
Volanesorsen
|
21,348
|
9,337
|
||||||
IONIS-TTR
Rx
|
19,560
|
10,927
|
||||||
Other antisense development projects
|
60,028
|
50,272
|
||||||
Development overhead expenses
|
36,117
|
31,318
|
||||||
Total antisense drug development, excluding non-cash compensation expense related to equity awards
|
172,217
|
120,918
|
||||||
Non-cash compensation expense related to equity awards
|
16,208
|
9,640
|
||||||
Total antisense drug development expenses
|
$
|
188,425
|
$
|
130,558
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Ionis Core
|
$
|
137,092
|
$
|
102,862
|
||||
Akcea Therapeutics
|
35,125
|
18,056
|
||||||
Non-cash compensation expense related to equity awards
|
16,208
|
9,640
|
||||||
Total antisense drug development expenses
|
$
|
188,425
|
$
|
130,558
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Manufacturing and operations expenses
|
$
|
28,588
|
$
|
24,763
|
||||
Non-cash compensation expense related to equity awards
|
4,563
|
2,934
|
||||||
Total manufacturing and operations expenses
|
$
|
33,151
|
$
|
27,697
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Ionis Core
|
$
|
25,633
|
$
|
22,425
|
||||
Akcea Therapeutics
|
7,203
|
2,338
|
||||||
Elimination of intercompany activity
|
(4,248
|
)
|
—
|
|||||
Subtotal
|
28,588
|
24,763
|
||||||
Non-cash compensation expense related to equity awards
|
4,563
|
2,934
|
||||||
Total manufacturing and operations expenses
|
$
|
33,151
|
$
|
27,697
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Personnel costs
|
$
|
10,210
|
$
|
9,875
|
||||
Occupancy
|
7,854
|
7,357
|
||||||
Patent expenses
|
2,785
|
2,933
|
||||||
Depreciation and amortization
|
2,911
|
2,243
|
||||||
Insurance
|
1,320
|
1,197
|
||||||
Other
|
3,438
|
3,002
|
||||||
Total R&D support expenses, excluding non-cash compensation expense related to equity awards
|
28,518
|
26,607
|
||||||
Non-cash compensation expense related to equity awards
|
10,953
|
5,979
|
||||||
Total R&D support expenses
|
$
|
39,471
|
$
|
32,586
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Ionis Core
|
$
|
27,950
|
$
|
26,100
|
||||
Akcea Therapeutics
|
568
|
507
|
||||||
Non-cash compensation expense related to equity awards
|
10,953
|
5,979
|
||||||
Total R&D support expenses
|
$
|
39,471
|
$
|
32,586
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
General and administrative expenses
|
$
|
21,497
|
$
|
14,600
|
||||
Non-cash compensation expense related to equity awards
|
15,676
|
5,540
|
||||||
Total general and administrative expenses
|
$
|
37,173
|
$
|
20,140
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Ionis Core
|
$
|
16,506
|
$
|
13,804
|
||||
Akcea Therapeutics
|
4,991
|
796
|
||||||
Non-cash compensation expense related to equity awards
|
15,676
|
5,540
|
||||||
Total general and administrative expenses
|
$
|
37,173
|
$
|
20,140
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Development and patent expenses
|
$
|
42,896
|
$
|
20,901
|
||||
General and administrative expenses
|
4,991
|
796
|
||||||
Total operating expenses, excluding non-cash compensation expense related to equity awards
|
47,887
|
21,697
|
||||||
Non-cash compensation expense related to equity awards
|
6,496
|
—
|
||||||
Total Akcea Therapeutics operating expenses
|
$
|
54,383
|
$
|
21,697
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
2¾ percent notes:
|
||||||||
Non-cash amortization of the debt discount and debt issuance costs
|
$
|
2,530
|
$
|
7,210
|
||||
Interest expense payable in cash
|
1,684
|
5,074
|
||||||
1 percent notes:
|
||||||||
Non-cash amortization of the debt discount and debt issuance costs
|
20,678
|
2,364
|
||||||
Interest expense payable in cash
|
4,999
|
597
|
||||||
Non-cash interest expense for long-term financing liability
|
6,665
|
6,622
|
||||||
Other
|
176
|
342
|
||||||
Total interest expense
|
$
|
36,732
|
$
|
22,209
|
| $80.0 million from Biogen, for advancing nusinersen, initiating a Phase 1 study of IONIS-DMPK-2.5 Rx , validating two targets to treat neurological disorders, and advancing a third drug into development; |
| $28.5 million from GSK related to advancing IONIS-TTR Rx , IONIS-HBV Rx , IONIS-GSK4-L Rx , and IONIS-RHO-2.5 Rx ; |
| $22.1 million from AstraZeneca related to the initiation of a Phase 1 clinical study of IONIS-AR-2.5 Rx and advancing IONIS-STAT3-2.5 Rx ; and |
| $4.0 million from Achaogen when Achaogen initiated a Phase 3 study of plazomicin. |
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
Ionis Core
|
$
|
208,811
|
$
|
174,631
|
||||
Akcea Therapeutics
|
21,697
|
12,902
|
||||||
Subtotal
|
230,508
|
187,533
|
||||||
Non-cash compensation expense related to equity awards
|
31,383
|
11,418
|
||||||
Total operating expenses
|
$
|
261,891
|
$
|
198,951
|
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
Research, development and patent expenses
|
$
|
215,908
|
$
|
174,360
|
||||
Non-cash compensation expense related to equity awards
|
25,843
|
9,673
|
||||||
Total research, development and patent expenses
|
$
|
241,751
|
$
|
184,033
|
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
Ionis Core
|
$
|
195,007
|
$
|
162,228
|
||||
Akcea Therapeutics
|
20,901
|
12,132
|
||||||
Subtotal
|
215,908
|
174,360
|
||||||
Non-cash compensation expense related to equity awards
|
25,843
|
9,673
|
||||||
Total research, development and patent expenses
|
$
|
241,751
|
$
|
184,033
|
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
Antisense drug discovery expenses
|
$
|
43,620
|
$
|
42,402
|
||||
Non-cash compensation expense related to equity awards
|
7,290
|
2,878
|
||||||
Total antisense drug discovery expenses
|
$
|
50,910
|
$
|
45,280
|
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
Nusinersen
|
$
|
19,064
|
$
|
6,938
|
||||
IONIS-TTR
Rx
|
10,927
|
4,174
|
||||||
Volanesorsen
|
9,337
|
5,730
|
||||||
Other antisense development products
|
50,272
|
36,782
|
||||||
Development overhead expenses
|
31,318
|
24,171
|
||||||
Total antisense drug development, excluding non-cash compensation expense related to equity awards
|
120,918
|
77,795
|
||||||
Non-cash compensation expense related to equity awards
|
9,640
|
3,202
|
||||||
Total antisense drug development expenses
|
$
|
130,558
|
$
|
80,997
|
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
Ionis Core
|
$
|
102,862
|
$
|
67,006
|
||||
Akcea Therapeutics
|
18,056
|
10,789
|
||||||
Non-cash compensation expense related to equity awards
|
9,640
|
3,202
|
||||||
Total antisense drug development expenses
|
$
|
130,558
|
$
|
80,997
|
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
Manufacturing and operations expenses
|
$
|
24,763
|
$
|
20,509
|
||||
Non-cash compensation expense related to equity awards
|
2,934
|
1,295
|
||||||
Total manufacturing and operations expenses
|
$
|
27,697
|
$
|
21,804
|
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
Ionis Core
|
$
|
22,425
|
$
|
19,614
|
||||
Akcea Therapeutics
|
2,338
|
895
|
||||||
Subtotal
|
24,763
|
20,509
|
||||||
Non-cash compensation expense related to equity awards
|
2,934
|
1,295
|
||||||
Total manufacturing and operations expenses
|
$
|
27,697
|
$
|
21,804
|
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
Personnel costs
|
$
|
9,875
|
$
|
9,571
|
||||
Occupancy
|
7,357
|
6,897
|
||||||
Patent expenses
|
2,933
|
10,321
|
||||||
Depreciation and amortization
|
2,243
|
2,464
|
||||||
Insurance
|
1,197
|
1,108
|
||||||
Other
|
3,002
|
3,293
|
||||||
Total R&D support expenses, excluding non-cash compensation expense related to equity awards
|
26,607
|
33,654
|
||||||
Non-cash compensation expense related to equity awards
|
5,979
|
2,298
|
||||||
Total R&D support expenses
|
$
|
32,586
|
$
|
35,952
|
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
Ionis Core
|
$
|
26,100
|
$
|
33,206
|
||||
Akcea Therapeutics
|
507
|
448
|
||||||
Non-cash compensation expense related to equity awards
|
5,979
|
2,298
|
||||||
Total R&D support expenses
|
$
|
32,586
|
$
|
35,952
|
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
General and administrative expenses
|
$
|
14,600
|
$
|
13,173
|
||||
Non-cash compensation expense related to equity awards
|
5,540
|
1,745
|
||||||
Total general and administrative expenses
|
$
|
20,140
|
$
|
14,918
|
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
Ionis Core
|
$
|
13,804
|
$
|
12,403
|
||||
Akcea Therapeutics
|
796
|
770
|
||||||
Non-cash compensation expense related to equity awards
|
5,540
|
1,745
|
||||||
Total general and administrative expenses
|
$
|
20,140
|
$
|
14,918
|
Year Ended
December 31,
|
||||||||
2014
|
2013
|
|||||||
Development and patent expenses
|
$
|
20,901
|
$
|
12,132
|
||||
General and administrative expenses
|
796
|
770
|
||||||
Total Akcea Therapeutics operating expenses
|
$
|
21,697
|
$
|
12,902
|
Year Ended,
December 31
|
||||||||
2014
|
2013
|
|||||||
2¾ percent notes:
|
||||||||
Non-cash amortization of the debt discount and debt issuance costs
|
$
|
7,210
|
$
|
6,759
|
||||
Interest expense payable in cash
|
5,074
|
5,534
|
||||||
1 percent notes:
|
||||||||
Non-cash amortization of the debt discount and debt issuance costs
|
2,364
|
—
|
||||||
Interest expense payable in cash
|
597
|
—
|
||||||
Non-cash interest expense for long-term financing liability
|
6,622
|
6,568
|
||||||
Other
|
342
|
494
|
||||||
Total interest expense
|
$
|
22,209
|
$
|
19,355
|
|
Payments Due by Period (in millions)
|
|||||||||||||||||||
Contractual Obligations
(selected balances described below)
|
Total
|
Less than
1 year
|
1-3 years
|
3-5 years
|
After
5 years
|
|||||||||||||||
1 percent convertible senior notes (principal and interest payable)
|
$
|
530.0
|
$
|
5.0
|
$
|
10.0
|
$
|
10.0
|
$
|
505.0
|
||||||||||
2¾
percent convertible senior notes (principal and interest payable)
|
$
|
68.0
|
$
|
1.7
|
$
|
3.4
|
$
|
62.9
|
$
|
—
|
||||||||||
Financing arrangements (principal and interest payable)
|
$
|
9.0
|
$
|
9.0
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||
Facility rent payments
|
$
|
125.6
|
$
|
6.5
|
$
|
13.5
|
$
|
14.3
|
$
|
91.3
|
||||||||||
Other obligations (principal and interest payable)
|
$
|
1.3
|
$
|
0.1
|
$
|
0.1
|
$
|
0.1
|
$
|
1.0
|
||||||||||
Operating leases
|
$
|
24.6
|
$
|
2.0
|
$
|
3.5
|
$
|
3.0
|
$
|
16.1
|
||||||||||
Total
|
$
|
758.5
|
$
|
24.3
|
$
|
30.5
|
$
|
90.3
|
$
|
613.4
|
1 Percent Convertible
Senior Notes
|
2¾ Percent Convertible
Senior Notes
|
|||||||
Outstanding principal balance
|
$
|
500.0
|
$
|
61.2
|
||||
Issue date
|
November 2014
|
August 2012
|
||||||
Maturity date
|
November 2021
|
October 2019
|
||||||
Interest rate
|
1 percent
|
2¾ percent
|
||||||
Conversion price per share
|
$
|
66.81
|
$
|
16.63
|
||||
Total shares of common stock subject to conversion
|
7.5
|
3.7
|
(i)
|
a floating rate equal to the one-month London Interbank Offered Rate, or LIBOR, in effect plus 1.25 percent per annum;
|
(ii)
|
a fixed rate equal to LIBOR plus 1.25 percent for a period of one, two, three, four, six, or twelve months as elected by us; or
|
(iii)
|
a fixed rate equal to the LIBOR swap rate during the period of the loan.
|
|
/s/ ERNST & YOUNG LLP
|
|
|
San Diego, California
|
|
February 25, 2016
|
|
(1)
|
Any information that is included on or linked to our website is not part of this Form 10-K.
|
Plan Category
|
Number of Shares
to be Issued Upon Exercise of Outstanding Options |
Weighted Average
Exercise Price of Outstanding Options |
Number of Shares
Remaining Available for Future Issuance |
|
|||||||||
Equity compensation plans approved by stockholders(a)
|
7,996,753
|
$
|
33.31
|
6,863,085
|
(c)
|
||||||||
Equity compensation plans not approved by stockholders(b)
|
44,025
|
$
|
14.66
|
-
|
|
||||||||
Total
|
8,040,778
|
$
|
33.21
|
6,863,085
|
|
(a) | Consists of four Ionis plans: 1989 Stock Option Plan, Amended and Restated 2002 Non-Employee Directors’ Stock Option Plan, 2011 Equity Incentive Plan and Employee Stock Purchase Plan, or ESPP. |
(b) | Consists of the 2000 Broad-Based Equity Incentive Plan, more fully described below. The 2000 Broad-Based Equity Incentive Plan expired on January 5, 2010. |
(c) | Of these shares, 481,764 remained available for purchase under the ESPP as of December 31, 2015. The ESPP incorporates an evergreen formula pursuant to which on January 1 of each year, we automatically increase the aggregate number of shares reserved for issuance under the plan by 150,000 shares. |
| a sale, lease or other disposition of all or substantially all of our assets; |
| a merger or consolidation in which we are not the surviving corporation; or |
| reverse merger in which we are the surviving corporation but the shares of common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise; |
|
IONIS PHARMACEUTICALS, INC.
|
|
|
|
|
|
By:
|
/s/ STANLEY T. CROOKE
|
|
|
Stanley T. Crooke, M.D., Ph.D.
|
|
|
Chairman of the Board, President and Chief Executive Officer (Principal executive officer)
|
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ STANLEY T. CROOKE
|
|
Chairman of the Board, President, and Chief Executive Officer
|
|
February 25, 2016
|
Stanley T. Crooke, M.D., Ph.D.
|
|
(Principal executive officer)
|
|
|
|
|
|
|
|
/s/ B. LYNNE PARSHALL
|
|
Director, Chief Operating Officer and Secretary
|
|
February 25, 2016
|
B. Lynne Parshall, J.D.
|
|
|
|
|
|
|
|
|
|
/s/ ELIZABETH L. HOUGEN
|
|
Senior Vice President, Finance and Chief Financial Officer
|
|
February 25, 2016
|
Elizabeth L. Hougen
|
|
(Principal financial and accounting officer)
|
|
|
|
|
|
|
|
/s/ SPENCER R. BERTHELSEN
|
|
Director
|
|
February 25, 2016
|
Spencer R. Berthelsen, M.D.
|
|
|
|
|
|
|
|
|
|
/s/ BREAUX CASTLEMAN
|
|
Director
|
|
February 25, 2016
|
Breaux Castleman
|
|
|
|
|
|
|
|
|
|
/s/ JOSEPH KLEIN
|
|
Director
|
|
February 25, 2016
|
Joseph Klein, III
|
|
|
|
|
|
|
|
|
|
/s/ JOSEPH LOSCALZO
|
|
Director
|
|
February 25, 2016
|
Joseph Loscalzo, M.D., Ph.D.
|
|
|
|
|
|
|
|
|
|
/s/ FREDERICK T. MUTO
|
|
Director
|
|
February 25, 2016
|
Frederick T. Muto, Esq.
|
|
|
|
|
|
|
|
|
|
/s/ JOSEPH H. WENDER
|
|
Director
|
|
February 25, 2016
|
Joseph H. Wender
|
|
|
|
|
Exhibit
Number |
|
Description of Document
|
3.1
|
|
Amended and Restated Certificate of Incorporation filed June 19, 1991. (1)
|
|
|
|
3.2
|
|
Certificate of Amendment to Restated Certificate of Incorporation filed June 17, 2014. (35)
|
3.3
|
Certificate of Amendment to Restated Certificate of Incorporation filed December 18, 2015. (41)
|
|
|
|
|
3.4
|
|
Amended and Restated Bylaws. (41)
|
|
|
|
4.1
|
|
Certificate of Designation of the Series C Junior Participating Preferred Stock. (9)
|
|
|
|
4.2
|
|
Specimen Common Stock Certificate. (1)
|
|
|
|
4.3
|
|
Indenture, dated as of August 13, 2012, between the Registrant and Wells Fargo Bank, National Association, as trustee, including Form of 2¾ percent Convertible Senior Note due 2019. (24)
|
4.4
|
Indenture, dated as of November 17, 2014, between the Registrant and Wells Fargo Bank, National Association, as trustee, including Form of 1.00 percent Convertible Senior Note due 2021. (34)
|
|
|
|
|
10.1
|
|
Form of Indemnity Agreement entered into between the Registrant and its Directors and Officers with related schedule. (30)
|
|
|
|
10.2*
|
|
Registrant’s 1989 Stock Option Plan, as amended. (21)
|
|
|
|
10.3*
|
|
Registrant’s Amended and Restated 2000 Employee Stock Purchase Plan. (11)
|
|
|
|
10.4
|
|
Form of Employee Assignment of Patent Rights. (1)
|
|
|
|
10.5*
|
|
Registrant’s 2000 Broad-Based Equity Incentive Stock Option Plan and related form of option agreement. (5)
|
|
|
|
10.6
|
|
Patent Rights Purchase Agreement between the Registrant and Gilead Sciences, Inc., dated December 18, 1998. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (4)
|
|
|
|
10.7
|
|
Collaboration and License Agreement between the Registrant and Hybridon, Inc., dated May 24, 2001. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (10)
|
|
|
|
10.8
|
|
License and Co-Development Agreement between the Registrant and Genzyme Corporation dated June 24, 2008. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (6)
|
|
|
|
10.9
|
|
Amendment #1 to the Research, Development and License Agreement dated May 11, 2011 by and between the Registrant and Glaxo Group Limited. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (7)
|
|
|
|
10.10
|
|
Amended and Restated Collaboration and License Agreement between the Registrant and Antisense Therapeutics Ltd dated February 8, 2008. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (3)
|
|
|
|
10.11
|
|
Amended and Restated License Agreement between the Registrant and Atlantic Pharmaceuticals Limited dated November 30, 2009. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (19)
|
10.12
|
|
Amended and Restated License Agreement dated July 2, 2008 between the Registrant and OncoGenex Technologies Inc. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (13)
|
|
|
|
10.13
|
|
Lease Agreement between the Registrant and BMR-Gazelle Court LLC dated March 30, 2010. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (20)
|
|
|
|
10.14
|
|
Second Amendment to Lease Agreement dated May 15, 2011 between the Registrant and BMR-Gazelle Court LLC, with First Amendment to Lease Agreement included. (7)
|
|
|
|
10.15
|
|
Registrant’s Amended and Restated 10b5-1 Trading Plan dated September 12, 2013. (27)
|
|
|
|
10.16*
|
|
Registrant’s Amended and Restated 2002 Non-Employee Directors’ Stock Option Plan, as amended. (35)
|
|
|
|
10.17*
|
|
Registrant’s Form of 2002 Non-Employee Directors’ Stock Option Agreement. (16)
|
|
|
|
10.18*
|
|
Form of Restricted Stock Unit Agreement for Restricted Stock Units granted under the Ionis Pharmaceuticals, Inc. Amended and Restated 2002 Non-Employee Directors’ Stock Option Plan. (26)
|
|
|
|
10.19*
|
|
Amended and Restated Severance Agreement dated December 3, 2008 between the Registrant and Stanley T. Crooke. (12)
|
|
|
|
10.20*
|
|
Amended and Restated Severance Agreement dated December 3, 2008 between the Registrant and B. Lynne Parshall. (12)
|
10.21*
|
|
Ionis Pharmaceuticals, Inc. 2011 Equity Incentive Plan (15)
|
|
|
|
10.22
|
|
Loan Agreement dated October 15, 2008 between the Registrant and RBS Asset Finance, Inc. (18)
|
|
|
|
10.23*
|
|
Form of Option Agreement under the 2011 Equity Incentive Plan. (37)
|
|
|
|
10.24*
|
|
Form of Restricted Stock Unit Agreement for Restricted Stock Units granted under the 2011 Equity Incentive Plan. (23)
|
|
|
|
10.25
|
|
Second Amendment to Lease Agreement between the Registrant and BMR-2282 Faraday Avenue LLC dated March 30, 2010. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (20)
|
|
|
|
10.26*
|
|
Form of Option Agreement under the 1989 Stock Option Plan. (37)
|
|
|
|
10.27*
|
|
Form of Option Agreement for Options Granted after March 8, 2005 under the 2000 Broad-Based Equity Incentive Plan. (8)
|
|
|
|
10.28*
|
|
Form of Option Agreement for Options Granted after March 8, 2005 under the 2002 Non-Employee Director’s Stock Option Plan. (8)
|
|
|
|
10.29
|
|
Research, Development and License Agreement between the Registrant and Glaxo Group Limited dated March 30, 2010. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (20)
|
|
|
|
10.30
|
|
First Amendment to Loan Agreement between the Registrant and RBS Asset Finance, Inc. dated September 30, 2009. (19)
|
|
|
|
10.31
|
|
Lease Agreement dated September 6, 2005 between the Registrant and BMR-2282 Faraday Avenue LLC. (14)
|
10.32
|
|
Stock Purchase Agreement dated December 17, 2008, among the Registrant, Ibis Biosciences, Inc. and Abbott Molecular Inc. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (18)
|
|
|
|
10.33
|
|
Research Agreement dated August 10, 2011 between the Registrant and CHDI Foundation, Inc. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (2)
|
|
|
|
10.34
|
|
Amendment No. 1 to Amended and Restated License Agreement between the Registrant and OncoGenex Technologies Inc. dated December 18, 2009. (19)
|
|
|
|
10.35
|
|
Second Amendment to Loan Agreement dated November 15, 2010 between the Registrant and RBS Asset Finance, Inc. (17)
|
|
|
|
10.36
|
|
Development, Option and License Agreement between the Registrant and Biogen Idec International Holding Ltd. dated January 3, 2012. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (25)
|
|
|
|
10.37
|
|
Third Amendment to Loan Agreement dated June 24, 2012 between the Registrant and RBS Asset Finance, Inc. (26)
|
|
|
|
10.38
|
|
DMPK Research, Development, Option and License Agreement between the Registrant and Biogen Idec MA Inc. dated June 27, 2012. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (26)
|
|
|
|
10.39
|
|
Amendment #2 to Research, Development and License Agreement between the Registrant and Glaxo Group Limited dated October 30, 2012. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (30)
|
|
|
|
10.40
|
|
Collaboration, License and Development Agreement between the Registrant and AstraZeneca AB dated December 7, 2012. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (30)
|
|
|
|
10.41
|
|
Neurology Drug Discovery and Development Collaboration, Option and License Agreement between the Registrant and Biogen Idec MA Inc. dated December 10, 2012. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (30)
|
|
|
|
10.42
|
|
HTT Research, Development, Option and License Agreement among the Registrant, F. Hoffmann-La Roche Ltd and Hoffman-La Roche Inc. dated April 8, 2013. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (28)
|
|
|
|
10.43
|
|
Letter Agreement between the Registrant and CHDI Foundation, Inc. dated April 8, 2013. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (28)
|
|
|
|
10.44
|
|
Strategic Neurology Drug Discovery and Development Collaboration, Option and License Agreement between the Registrant and Biogen Idec MA Inc. dated September 5, 2013. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (27)
|
10.45
|
|
Amendment #1 to Collaboration, License and Development Agreement between the Registrant and AstraZeneca AB dated August 13, 2013. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (27)
|
10.46
|
Letter Agreement Amendment between the Registrant and Biogen Idec International Holding Ltd dated January 27, 2014. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (31)
|
|
10.47
|
Amendment No. 3 to the Research, Development and License Agreement between the Registrant and Glaxo Group Limited dated July 10, 2013. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (32)
|
|
10.48
|
Amendment #4 to the Research, Development and License Agreement between the Registrant and Glaxo Group Limited dated April 10, 2014. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (32)
|
|
10.49
|
Amendment #5 to the Research, Development and License Agreement among the Registrant, Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Limited dated June 27, 2014. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (32)
|
|
10.50
|
Exclusive License Agreement between the Registrant and the University of Massachusetts dated January 14, 2010. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (33)
|
|
10.51
|
Amended and Restated Collaboration and License Agreement between the Registrant and Cold Spring Harbor Laboratory dated October 26, 2011. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (33)
|
|
10.52
|
Amendment to Amended and Restated Collaboration and License Agreement between the Registrant and Cold Spring Harbor Laboratory dated March 14, 2014. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (33)
|
|
10.53
|
Amendment #1 to the Development, Option and License Agreement between the Registrant and Biogen Idec International Holding Ltd. dated December 15, 2014. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (36)
|
|
10.54
|
Research Collaboration, Option and License Agreement between the Registrant and Janssen Biotech Inc. dated December 22, 2014. Portions of this exhibit have been omitted and separately filed with the SEC. (36)
|
|
10.55
|
Amendment No.2 to the Collaboration, License and Development Agreement between the Registrant and AstraZeneca AB dated October 15, 2014. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. (36)
|
|
10.56
|
Strategic Collaboration Agreement between the Registrant and AstraZeneca AB dated July 31, 2015. Portions of this exhibit have been omitted and separately filed with the SEC. (37)
|
|
10.57
|
Amendment #6 to Research, Development and License Agreement between the Registrant, Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Limited dated September 2, 2015. Portions of this exhibit have been omitted and separately filed with the SEC. (37)
|
|
10.58
|
Amendment Number One to the Second Amended and Restated Strategic Collaboration and License Agreement between the Registrant and Alnylam Pharmaceuticals, Inc. dated July 13, 2015. Portions of this exhibit have been omitted and separately filed with the SEC. (37)
|
|
10.59
|
License Agreement between the Registrant and Bayer Pharma AG dated May 1, 2015. Portions of this exhibit have been omitted and separately filed with the SEC. (38)
|
10.60
|
Line of Credit Agreement between the Registrant and Morgan Stanley Private Bank, National Association dated June 16, 2015. (38)
|
|
10.61
|
Second Amended and Restated Strategic Collaboration and License Agreement between the Registrant and Alnylam Pharmaceuticals, Inc. dated January 8, 2015. Portions of this exhibit have been omitted and separately filed with the SEC. (39)
|
|
10.62
|
Amendment #1 to HTT Research, Development, Option and License Agreement between the Registrant, F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. dated January 9, 2015. Portions of this exhibit have been omitted and separately filed with the SEC. (39)
|
|
10.63
|
Amendment No.1 to Loan Documents between the Registrant and Morgan Stanley Private Bank, National Association dated December 30, 2015. (40)
|
|
10.64
|
Amendment No.2 to Line of Credit Agreement between the Registrant and Morgan Stanley Private Bank, National Association dated February 24, 2016.
|
|
|
|
|
14.1
|
|
Registrant’s Code of Ethics and Business Conduct. (29)
|
|
|
|
21.1
|
|
List of Subsidiaries for the Registrant.
|
|
|
|
23.1
|
|
Consent of Independent Registered Public Accounting Firm.
|
|
|
|
24.1
|
|
Power of Attorney (22)
|
|
|
|
31.1
|
|
Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
The following financial statements from the Ionis Pharmaceuticals, Inc. Annual Report on Form 10-K for the year ended December 31, 2015, formatted in Extensive Business Reporting Language (XBRL): (i) consolidated balance sheets, (ii) consolidated statements of operations, (iii) consolidated statements of stockholders’ equity, (iv) consolidated statements of cash flows, and (v) notes to consolidated financial statements (detail tagged).
|
(1)
|
|
Filed as an exhibit to the Registrant’s Registration Statement on Form S-1 (No. 33-39640) or amendments thereto and incorporated herein by reference.
|
|
|
|
(2)
|
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 and incorporated herein by reference.
|
|
|
|
(3)
|
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and incorporated herein by reference.
|
|
|
|
(4)
|
|
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference.
|
|
|
|
(5)
|
|
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1999 and incorporated herein by reference.
|
|
|
|
(6)
|
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2008 and incorporated herein by reference.
|
(7)
|
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 and incorporated herein by reference.
|
|
|
|
(8)
|
|
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004 and incorporated herein by reference.
|
|
|
|
(9)
|
|
Filed as an exhibit to Registrant’s Report on Form 8-K dated filed December 13, 2000 and incorporated herein by reference.
|
|
|
|
(10)
|
|
Filed as an exhibit to the Registrant’s report on Form 10-Q as amended for the quarter ended June 30, 2001 and incorporated herein by reference.
|
|
|
|
(11)
|
|
Filed as an exhibit to Registrant’s Notice of Annual Meeting and Proxy Statement for the 2009 Annual Meeting of Stockholders, filed with the SEC on April 20, 2009, and incorporated herein by reference.
|
|
|
|
(12)
|
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed December 5, 2008 and incorporated herein by reference.
|
|
|
|
(13)
|
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and incorporated herein by reference.
|
|
|
|
(14)
|
|
Filed as an exhibit to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 and incorporated herein by reference.
|
|
|
|
(15)
|
|
Filed as an exhibit to the Registrant’s Notice of 2011 Annual Meeting of Stockholders and Proxy Statement filed with the SEC on April 28, 2011, and incorporated herein by reference.
|
|
|
|
(16)
|
|
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference.
|
|
|
|
(17)
|
|
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2010 and incorporated herein by reference.
|
|
|
|
(18)
|
|
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference.
|
|
|
|
(19)
|
|
Filed as an exhibit to the Registrant’s Annual Report as Form 10-K for the year ended December 31, 2009 and incorporated herein by reference.
|
|
|
|
(20)
|
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 and incorporated herein by reference.
|
|
|
|
(21)
|
|
Filed as an exhibit to Registrant’s Notice of Annual Meeting and Proxy Statement for the 2012 Annual Meeting of Stockholders, filed with the SEC on April 16, 2012, and incorporated herein by reference.
|
|
|
|
(22)
|
|
Filed as part of the Annual Report on Form 10-K for the year ended December 31, 2013, and incorporated herein by reference.
|
|
|
|
(23)
|
|
Filed as an exhibit to the Registrant’s Registration Statement on Form S-8 filed with the SEC on August 8, 2011, and incorporated herein by reference.
|
|
|
|
(24)
|
|
Filed as an exhibit to the Registrant’s Report on Form 8-K filed August 13, 2012 and incorporated herein by reference.
|
(25)
|
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 and incorporated herein by reference.
|
|
|
|
(26)
|
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 and incorporated herein by reference.
|
|
|
|
(27)
|
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 and incorporated herein by reference.
|
|
|
|
(28)
|
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 and incorporated herein by reference.
|
|
|
|
(29)
|
|
Filed as an exhibit to the Registrant’s Report on Form 8-K filed on December 9, 2013 and incorporated herein by reference.
|
|
|
|
(30)
|
|
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated herein by reference.
|
(31)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 and incorporated herein by reference.
|
|
(32)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 and incorporated herein by reference.
|
|
(33)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 and incorporated herein by reference.
|
|
(34)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed November 21, 2014 and incorporated herein by reference.
|
|
(35)
|
Filed as an exhibit to the Registrant’s Notice of Annual Meeting and Proxy Statement, for the 2014 Annual Meeting of Stockholders, filed with the SEC on April 25, 2014, and incorporated herein by reference.
|
(36)
|
Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014 and incorporated herein by reference.
|
|
(37)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 and incorporated herein by reference.
|
|
(38)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 and incorporated herein by reference.
|
|
(39)
|
Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 and incorporated herein by reference.
|
|
(40)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed January 5, 2016 and incorporated herein by reference.
|
|
(41)
|
Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed December 18, 2015 and incorporated herein by reference.
|
|
*
|
|
Indicates management compensatory plans and arrangements as required to be filed as exhibits to this Report pursuant to Item 14(c).
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets at December 31, 2015 and 2014
|
F-3
|
Consolidated Statements of Operations for the years ended December 31, 2015, 2014 and 2013
|
F-4
|
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2015, 2014 and 2013
|
F-5
|
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2015, 2014 and 2013
|
F-6
|
Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014 and 2013
|
F-7
|
Notes to Consolidated Financial Statements
|
F-9
|
|
/s/ ERNST & YOUNG LLP
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
128,797
|
$
|
142,998
|
||||
Short-term investments
|
650,386
|
585,834
|
||||||
Contracts receivable
|
11,356
|
3,903
|
||||||
Inventories
|
6,899
|
6,290
|
||||||
Investment in Regulus Therapeutics Inc.
|
24,792
|
81,881
|
||||||
Other current assets
|
14,773
|
15,691
|
||||||
Total current assets
|
837,003
|
836,597
|
||||||
Property, plant and equipment, net
|
90,233
|
88,958
|
||||||
Patents, net
|
19,316
|
17,186
|
||||||
Deposits and other assets
|
9,553
|
13,068
|
||||||
Total assets
|
$
|
956,105
|
$
|
955,809
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
28,355
|
$
|
17,984
|
||||
Accrued compensation
|
16,065
|
12,302
|
||||||
Accrued liabilities
|
28,105
|
30,451
|
||||||
Current portion of long-term obligations
|
9,029
|
2,882
|
||||||
Current portion of deferred contract revenue
|
67,322
|
51,713
|
||||||
Total current liabilities
|
148,876
|
115,332
|
||||||
Long-term deferred contract revenue
|
134,306
|
127,797
|
||||||
1 percent convertible senior notes
|
347,214
|
327,486
|
||||||
2¾ percent convertible senior notes
|
50,361
|
48,014
|
||||||
Long-term obligations, less current portion
|
2,341
|
7,669
|
||||||
Long-term financing liability for leased facility
|
72,217
|
71,731
|
||||||
Total liabilities
|
755,315
|
698,029
|
||||||
Stockholders’ equity:
|
||||||||
Common stock, $0.001 par value; 300,000,000 shares authorized, 120,351,480 and 118,442,726 shares issued and outstanding at December 31, 2015 and December 31, 2014, respectively
|
120
|
118
|
||||||
Additional paid-in capital
|
1,309,107
|
1,224,509
|
||||||
Accumulated other comprehensive income (loss)
|
(13,565
|
)
|
39,747
|
|||||
Accumulated deficit
|
(1,094,872
|
)
|
(1,006,594
|
)
|
||||
Total stockholders’ equity
|
200,790
|
257,780
|
||||||
Total liabilities and stockholders’ equity
|
$
|
956,105
|
$
|
955,809
|
Years Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Revenue:
|
||||||||||||
Research and development revenue under collaborative agreements
|
$
|
281,360
|
$
|
202,514
|
$
|
144,194
|
||||||
Licensing and royalty revenue
|
2,343
|
11,647
|
3,091
|
|||||||||
Total revenue
|
283,703
|
214,161
|
147,285
|
|||||||||
Expenses:
|
||||||||||||
Research, development and patent expenses
|
322,292
|
241,751
|
184,033
|
|||||||||
General and administrative
|
37,173
|
20,140
|
14,918
|
|||||||||
Total operating expenses
|
359,465
|
261,891
|
198,951
|
|||||||||
Loss from operations
|
(75,762
|
)
|
(47,730
|
)
|
(51,666
|
)
|
||||||
Other income (expense):
|
||||||||||||
Investment income
|
4,302
|
2,682
|
2,085
|
|||||||||
Interest expense
|
(36,732
|
)
|
(22,209
|
)
|
(19,355
|
)
|
||||||
Gain on investments, net
|
75
|
1,256
|
2,378
|
|||||||||
Gain on investment in Regulus Therapeutics Inc.
|
20,211
|
19,902
|
—
|
|||||||||
Loss on early retirement of debt
|
—
|
(8,292
|
)
|
—
|
||||||||
Loss before income tax (expense) benefit
|
(87,906
|
)
|
(54,391
|
)
|
(66,558
|
)
|
||||||
Income tax (expense) benefit
|
(372
|
)
|
15,407
|
5,914
|
||||||||
Net loss
|
$
|
(88,278
|
)
|
$
|
(38,984
|
)
|
$
|
(60,644
|
)
|
|||
Basic and diluted net loss per share
|
$
|
(0.74
|
)
|
$
|
(0.33
|
)
|
$
|
(0.55
|
)
|
|||
Shares used in computing basic and diluted net loss per share
|
119,719
|
117,691
|
110,502
|
Years Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Net loss
|
$
|
(88,278
|
)
|
$
|
(38,984
|
)
|
$
|
(60,644
|
)
|
|||
Unrealized (losses) gains on investments, net of tax
|
(33,101
|
)
|
40,079
|
10,253
|
||||||||
Reclassification adjustment for realized gains included in net loss
|
(20,211
|
)
|
(21,412
|
)
|
(1,653
|
)
|
||||||
Comprehensive loss
|
$
|
(141,590
|
)
|
$
|
(20,317
|
)
|
$
|
(52,044
|
)
|
Common stock
|
Additional Paid
In Capital
|
Accumulated Other
Comprehensive
Income (Loss)
|
Accumulated Deficit
|
Total Stockholders’
Equity
|
||||||||||||||||||||
Description
|
Shares
|
Amount
|
||||||||||||||||||||||
Balance at December 31, 2012
|
101,481
|
$
|
102
|
$
|
1,077,150
|
$
|
12,480
|
$
|
(906,966
|
)
|
$
|
182,766
|
||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
(60,644
|
)
|
(60,644
|
)
|
||||||||||||||||
Change in unrealized gains (losses), net of tax
|
—
|
—
|
—
|
8,600
|
—
|
8,600
|
||||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
5,372
|
5
|
62,953
|
—
|
—
|
62,958
|
||||||||||||||||||
Issuance of public common stock
|
9,618
|
9
|
173,283
|
—
|
—
|
173,292
|
||||||||||||||||||
Share-based compensation expense
|
—
|
—
|
11,418
|
—
|
—
|
11,418
|
||||||||||||||||||
Balance at December 31, 2013
|
116,471
|
$
|
116
|
$
|
1,324,804
|
$
|
21,080
|
$
|
(967,610
|
)
|
$
|
378,390
|
||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
(38,984
|
)
|
(38,984
|
)
|
||||||||||||||||
Change in unrealized gains (losses), net of tax
|
—
|
—
|
—
|
18,667
|
—
|
18,667
|
||||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
1,972
|
2
|
23,071
|
—
|
—
|
23,073
|
||||||||||||||||||
2¾ percent convertible senior notes redemption, equity portion
|
—
|
—
|
(326,444
|
)
|
—
|
—
|
(326,444
|
)
|
||||||||||||||||
1 percent convertible senior notes, equity portion, net of issuance costs
|
—
|
—
|
170,232
|
—
|
—
|
170,232
|
||||||||||||||||||
Share-based compensation expense
|
—
|
—
|
31,383
|
—
|
—
|
31,383
|
||||||||||||||||||
Excess tax benefits from share-based compensation awards
|
—
|
—
|
1,463
|
—
|
—
|
1,463
|
||||||||||||||||||
Balance at December 31, 2014
|
118,443
|
$
|
118
|
$
|
1,224,509
|
$
|
39,747
|
$
|
(1,006,594
|
)
|
$
|
257,780
|
||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
(88,278
|
)
|
(88,278
|
)
|
||||||||||||||||
Change in unrealized gains (losses), net of tax
|
—
|
—
|
—
|
(53,312
|
)
|
—
|
(53,312
|
)
|
||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
1,908
|
2
|
24,888
|
—
|
—
|
24,890
|
||||||||||||||||||
Share-based compensation expense
|
—
|
—
|
59,314
|
—
|
—
|
59,314
|
||||||||||||||||||
Excess tax benefits from share-based compensation awards
|
—
|
—
|
396
|
—
|
—
|
396
|
||||||||||||||||||
Balance at December 31, 2015
|
120,351
|
$
|
120
|
$
|
1,309,107
|
$
|
(13,565
|
)
|
$
|
(1,094,872
|
)
|
$
|
200,790
|
Years Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Operating activities:
|
||||||||||||
Net loss
|
$
|
(88,278
|
)
|
$
|
(38,984
|
)
|
$
|
(60,644
|
)
|
|||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||||||
Depreciation
|
6,984
|
6,380
|
6,591
|
|||||||||
Amortization of patents
|
1,381
|
1,142
|
1,184
|
|||||||||
Amortization of licenses
|
1,873
|
1,882
|
2,007
|
|||||||||
Amortization of premium on investments, net
|
7,812
|
7,470
|
5,572
|
|||||||||
Amortization of debt issuance costs
|
1,133
|
595
|
415
|
|||||||||
Amortization of 2¾ convertible senior notes discount
|
2,347
|
6,723
|
6,344
|
|||||||||
Amortization of 1 percent convertible senior notes discount
|
19,728
|
2,256
|
—
|
|||||||||
Amortization of long-term financing liability for leased facility
|
6,665
|
6,622
|
6,567
|
|||||||||
Share-based compensation expense
|
59,314
|
31,383
|
11,418
|
|||||||||
Gain on investment in Regulus Therapeutics Inc.
|
(20,211
|
)
|
(19,902
|
)
|
—
|
|||||||
Loss on early retirement of debt
|
—
|
8,292
|
—
|
|||||||||
Gain on investments, net
|
(75
|
)
|
(1,256
|
)
|
(2,378
|
)
|
||||||
Non-cash losses related to patents, licensing and property, plant and equipment
|
1,881
|
1,305
|
6,306
|
|||||||||
Tax benefit from other unrealized gains on securities
|
—
|
(12,835
|
)
|
(5,914
|
)
|
|||||||
Changes in operating assets and liabilities:
|
||||||||||||
Contracts receivable
|
(7,453
|
)
|
7,199
|
(10,580
|
)
|
|||||||
Inventories
|
(609
|
)
|
1,743
|
(1,912
|
)
|
|||||||
Other current and long-term assets
|
(4,319
|
)
|
(1,750
|
)
|
(1,091
|
)
|
||||||
Accounts payable
|
9,211
|
4,824
|
66
|
|||||||||
Income taxes
|
—
|
(4,034
|
)
|
—
|
||||||||
Accrued compensation
|
3,763
|
134
|
4,290
|
|||||||||
Deferred rent
|
205
|
153
|
217
|
|||||||||
Accrued liabilities
|
(2,345
|
)
|
8,358
|
6,691
|
||||||||
Deferred contract revenue
|
22,118
|
(11,415
|
)
|
88,344
|
||||||||
Net cash provided by operating activities
|
21,125
|
6,285
|
63,493
|
|||||||||
Investing activities:
|
||||||||||||
Purchases of short-term investments
|
(493,467
|
)
|
(391,883
|
)
|
(425,554
|
)
|
||||||
Proceeds from the sale of short-term investments
|
419,584
|
294,727
|
172,762
|
|||||||||
Purchases of property, plant and equipment
|
(7,692
|
)
|
(7,518
|
)
|
(1,552
|
)
|
||||||
Acquisition of licenses and other assets, net
|
(4,056
|
)
|
(3,586
|
)
|
(3,810
|
)
|
||||||
Proceeds from the sale of Regulus Therapeutics, Inc.
|
25,527
|
22,949
|
—
|
|||||||||
Proceeds from the sale of strategic investments
|
52
|
2,463
|
2,428
|
|||||||||
Net cash used in investing activities
|
(60,052
|
)
|
(82,848
|
)
|
(255,726
|
)
|
||||||
Financing activities:
|
||||||||||||
Proceeds from equity awards
|
24,888
|
23,071
|
62,958
|
|||||||||
Proceeds from issuance of 1 percent convertible senior notes, net of issuance costs
|
—
|
487,035
|
—
|
|||||||||
Repurchase of $140 million principal amount of the 2¾
percent convertible senior notes
|
—
|
(441,394
|
)
|
—
|
||||||||
Proceeds from borrowing on line of credit facility
|
8,500
|
—
|
—
|
|||||||||
Proceeds from public common stock offering
|
—
|
—
|
173,292
|
|||||||||
Proceeds from equipment financing arrangement
|
—
|
—
|
2,513
|
|||||||||
Excess tax benefits from share-based compensation awards
|
396
|
1,463
|
—
|
|||||||||
Principal payments on debt and capital lease obligations
|
(9,058
|
)
|
(10,587
|
)
|
(11,039
|
)
|
||||||
Net cash provided by financing activities
|
24,726
|
59,588
|
227,724
|
|||||||||
Net (decrease) increase in cash and cash equivalents
|
(14,201
|
)
|
(16,975
|
)
|
35,491
|
|||||||
Cash and cash equivalents at beginning of year
|
142,998
|
159,973
|
124,482
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
128,797
|
$
|
142,998
|
$
|
159,973
|
Supplemental disclosures of cash flow information:
|
||||||||||||
Interest paid
|
$
|
6,800
|
$
|
6,353
|
$
|
6,000
|
||||||
Supplemental disclosures of non-cash investing and financing activities:
|
||||||||||||
Amounts accrued for capital and patent expenditures
|
$
|
1,162
|
$
|
2,151
|
$
|
704
|
| percent convertible senior notes (for 2014 and 2015); |
| 2¾ percent convertible senior notes; |
| Dilutive stock options; |
| Unvested restricted stock units; and |
| Employee Stock Purchase Plan, or ESPP. |
| The exclusive license we granted to Bayer to develop and commercialize IONIS-FXI Rx for the treatment of thrombosis; |
| The development services we agreed to perform for IONIS-FXI Rx ; and |
| The initial supply of API. |
| Estimated future product sales; |
| Estimated royalties on future product sales; |
| Contractual milestone payments; |
| Expenses we expect to incur; |
| Income taxes; and |
| An appropriate discount rate. |
| The number of internal hours we will spend performing these services; |
| The estimated cost of work we will perform; |
| The estimated cost of work that we will contract with third parties to perform; and |
| The estimated cost of drug product we will use. |
| $91.2 million to the IONIS-FXI Rx exclusive license; |
| $4.3 million for ongoing development services; and |
| $4.5 million for the delivery of API. |
| We recognized the portion of the consideration attributed to the IONIS-FXI Rx license immediately because we delivered the license and earned the revenue; |
| We are recognizing the amount attributed to the ongoing development services for IONIS-FXI Rx over the period of time we are performing the services; and |
| We will recognize the amount attributed to the API supply when we deliver it to Bayer. |
| In January 2012, we entered into a collaboration agreement with Biogen to develop and commercialize nusinersen for spinal muscular atrophy, or SMA. As part of the collaboration, we received a $29 million upfront payment and we are responsible for global development of nusinersen through completion of Phase 2/3 clinical trials. |
| In June 2012, we entered into a second and separate collaboration agreement with Biogen to develop and commercialize a novel antisense drug targeting DMPK, or dystrophia myotonica-protein kinase. As part of the collaboration, we received a $12 million upfront payment and we are responsible for global development of the drug through the completion of a Phase 2 clinical trial. |
| In December 2012, we entered into a third and separate collaboration agreement with Biogen to discover and develop antisense drugs against three targets to treat neurological or neuromuscular disorders. As part of the collaboration, we received a $30 million upfront payment and we are responsible for the discovery of a lead antisense drug for each of three targets. |
| In September 2013, we entered into a fourth and separate collaboration agreement with Biogen to leverage antisense technology to advance the treatment of neurological diseases. We granted Biogen exclusive rights to the use of our antisense technology to develop therapies for neurological diseases as part of this broad collaboration. We received a $100 million upfront payment and we are responsible for discovery and early development through the completion of a Phase 2 clinical trial for each antisense drug identified during the six-year term of this collaboration, while Biogen is responsible for the creation and development of small molecule treatments and biologics. |
| Designation of a development candidate. Following the designation of a development candidate, IND-enabling animal studies for a new development candidate generally take 12 to 18 months to complete; |
| Initiation of a Phase 1 clinical trial. Generally, Phase 1 clinical trials take one to two years to complete; |
| Initiation or completion of a Phase 2 clinical trial. Generally, Phase 2 clinical trials take one to three years to complete; |
| Initiation or completion of a Phase 3 clinical trial. Generally, Phase 3 clinical trials take two to four years to complete. |
| Filing of regulatory applications for marketing authorization such as a New Drug Application, or NDA, in the United States or a Marketing Authorization Application, or MAA, in Europe. Generally, it takes six to twelve months to prepare and submit regulatory filings. |
| Marketing authorization in a major market, such as the United States, Europe or Japan. Generally it takes one to two years after an application is submitted to obtain authorization from the applicable regulatory agency. |
| First commercial sale in a particular market, such as in the United States or Europe. |
| Product sales in excess of a pre-specified threshold, such as annual sales exceeding $1 billion. The amount of time to achieve this type of milestone depends on several factors including but not limited to the dollar amount of the threshold, the pricing of the product and the pace at which customers begin using the product. |
| Substantive uncertainty exists as to the achievement of the milestone event at the inception of the arrangement; |
| The achievement of the milestone involves substantive effort and can only be achieved based in whole or in part on our performance or the occurrence of a specific outcome resulting from our performance; |
| The amount of the milestone payment appears reasonable either in relation to the effort expended or to the enhancement of the value of the delivered items; |
| There is no future performance required to earn the milestone; and |
| The consideration is reasonable relative to all deliverables and payment terms in the arrangement. |
Years Ending December 31,
|
Amortization
(in millions)
|
|||
2016
|
$
|
1.4
|
||
2017
|
$
|
1.3
|
||
2018
|
$
|
1.2
|
||
2019
|
$
|
1.1
|
||
2020
|
$
|
1.0
|
Estimated Useful Lives |
December 31,
|
|||||||||||
(in years)
|
2015
|
2014
|
||||||||||
Computer software, laboratory, manufacturing and other equipment
|
3 to 10
|
$
|
56,822
|
$
|
49,772
|
|||||||
Building and building systems
|
25 to 40
|
48,163
|
48,521
|
|||||||||
Land improvements
|
20
|
2,853
|
2,853
|
|||||||||
Leasehold improvements
|
5 to 20
|
39,061
|
37,935
|
|||||||||
Furniture and fixtures
|
5 to 10
|
5,842
|
5,732
|
|||||||||
152,741
|
144,813
|
|||||||||||
Less accumulated depreciation
|
(72,706
|
)
|
(66,053
|
)
|
||||||||
80,035
|
78,760
|
|||||||||||
Land
|
10,198
|
10,198
|
||||||||||
Total
|
$
|
90,233
|
$
|
88,958
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Beginning balance accumulated other comprehensive income
|
$
|
39,747
|
$
|
21,080
|
$
|
12,480
|
||||||
Unrealized (losses) gains on securities, net of tax (1)
|
(33,101
|
)
|
40,079
|
10,253
|
||||||||
Amounts reclassified from accumulated other comprehensive (loss) income (2)
|
(20,211
|
)
|
(21,412
|
)
|
(1,653
|
)
|
||||||
Net other comprehensive (loss) income for the period
|
(53,312
|
)
|
18,667
|
8,600
|
||||||||
Ending balance accumulated other comprehensive (loss) income
|
$
|
(13,565
|
)
|
$
|
39,747
|
$
|
21,080
|
(1) | Other comprehensive income includes income tax expense of $12.8 million and $5.9 million for the years ended December 31, 2014 and 2013, respectively. There was no tax expense for other comprehensive income for the year ended December 31, 2015. |
(2) | Amounts for 2015 are included in the separate line called “Gain on investment in Regulus Therapeutics Inc.” on our Consolidated Statement of Operations. For 2014, $19.9 million is included in a separate line called “Gain on investment in Regulus Therapeutics Inc.”, with the remaining amount included in a separate line called “Gain on investments, net” on our Consolidated Statement of Operations. Amounts for 2013 are included in a separate line called “Gain on investments, net” on our Consolidated Statement of Operations. |
At
December 31, 2015
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
Cash equivalents (1)
|
$
|
88,902
|
$
|
88,902
|
$
|
—
|
$
|
—
|
||||||||
Corporate debt securities (2)
|
438,426
|
—
|
438,426
|
—
|
||||||||||||
Debt securities issued by U.S. government agencies (2)
|
89,253
|
—
|
89,253
|
—
|
||||||||||||
Debt securities issued by the U.S. Treasury (2)
|
2,601
|
2,601
|
—
|
—
|
||||||||||||
Debt securities issued by states of the United States and political subdivisions of the states (3)
|
127,656
|
—
|
127,656
|
—
|
||||||||||||
Investment in Regulus Therapeutics Inc.
|
24,792
|
24,792
|
—
|
—
|
||||||||||||
Total
|
$
|
771,630
|
$
|
116,295
|
$
|
655,335
|
$
|
—
|
At
December 31, 2014
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
Significant
Unobservable
Inputs
(Level 3)
|
|||||||||||||
Cash equivalents (1)
|
$
|
104,680
|
$
|
104,680
|
$
|
—
|
$
|
—
|
||||||||
Corporate debt securities (4)
|
372,002
|
—
|
372,002
|
—
|
||||||||||||
Debt securities issued by U.S. government agencies (2)
|
109,855
|
—
|
109,855
|
—
|
||||||||||||
Debt securities issued by the U.S. Treasury (5)
|
19,017
|
19,017
|
—
|
—
|
||||||||||||
Debt securities issued by states of the United States and political subdivisions of the states (6)
|
105,033
|
—
|
105,033
|
—
|
||||||||||||
Investment in Regulus Therapeutics Inc.
|
81,881
|
—
|
—
|
81,881
|
||||||||||||
Total
|
$
|
792,468
|
$
|
123,697
|
$
|
586,890
|
$
|
81,881
|
(1) | Included in cash and cash equivalents on our consolidated balance sheet. |
(2) | Included in short-term investments on our consolidated balance sheet. |
(3) | $7.5 million included in cash and cash equivalents on our consolidated balance sheet, with the difference included in short-term investments on our consolidated balance sheet. |
(4) | $0.8 million included in cash and cash equivalents on our consolidated balance sheet, with the difference included in short-term investments on our consolidated balance sheet. |
(5) | $10 million included in cash and cash equivalents on our consolidated balance sheet, with the difference included in short-term investments on our consolidated balance sheet. |
(6) | $9.3 million included in cash and cash equivalents on our consolidated balance sheet, with the difference included in short-term investments on our consolidated balance sheet. |
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Beginning balance of Level 3 investments
|
$
|
81,881
|
$
|
—
|
||||
Transfers into Level 3 investments
|
—
|
108,009
|
||||||
Total gains (losses) included in accumulated other comprehensive income (loss)
|
22,377
|
(24,897
|
)
|
|||||
Transfers out of Level 3 investments
|
(104,258
|
)
|
(1,231
|
)
|
||||
Ending balance of Level 3 investments
|
$
|
—
|
$
|
81,881
|
One year or less
|
49 %
|
|
After one year but within two years
|
27 %
|
|
After two years but within three and a half years
|
24 %
|
|
Total
|
100 %
|
Gross Unrealized
|
||||||||||||||||
December 31, 2015
|
Cost
|
Gains
|
Losses
|
Estimated
Fair Value
|
||||||||||||
Available-for-sale securities (1):
|
||||||||||||||||
Corporate debt securities
|
$
|
181,670
|
$
|
5
|
$
|
(250
|
)
|
$
|
181,425
|
|||||||
Debt securities issued by U.S. government agencies
|
50,559
|
1
|
(19
|
)
|
50,541
|
|||||||||||
Debt securities issued by the U.S. Treasury
|
2,604
|
—
|
(3
|
)
|
2,601
|
|||||||||||
Debt securities issued by states of the United States and political subdivisions of the states (2)
|
79,414
|
18
|
(88
|
)
|
79,344
|
|||||||||||
Total securities with a maturity of one year or less
|
314,247
|
24
|
(360
|
)
|
313,911
|
|||||||||||
Corporate debt securities
|
258,703
|
3
|
(1,705
|
)
|
257,001
|
|||||||||||
Debt securities issued by U.S. government agencies
|
38,956
|
—
|
(244
|
)
|
38,712
|
|||||||||||
Debt securities issued by states of the United States and political subdivisions of the states
|
48,552
|
3
|
(243
|
)
|
48,312
|
|||||||||||
Total securities with a maturity of more than one year
|
346,211
|
6
|
(2,192
|
)
|
344,025
|
|||||||||||
Total available-for-sale securities
|
$
|
660,458
|
$
|
30
|
$
|
(2,552
|
)
|
$
|
657,936
|
|||||||
Equity securities:
|
||||||||||||||||
Regulus Therapeutics Inc.
|
$
|
7,162
|
$
|
17,630
|
$
|
—
|
$
|
24,792
|
||||||||
Total equity securities
|
$
|
7,162
|
$
|
17,630
|
$
|
—
|
$
|
24,792
|
||||||||
Total available-for-sale and equity securities
|
$
|
667,620
|
$
|
17,660
|
$
|
(2,552
|
)
|
$
|
682,728
|
Gross Unrealized
|
||||||||||||||||
December 31, 2014
|
Cost
|
Gains
|
Losses
|
Estimated
Fair Value
|
||||||||||||
Available-for-sale securities (1):
|
||||||||||||||||
Corporate debt securities (2)
|
$
|
219,856
|
$
|
89
|
$
|
(89
|
)
|
$
|
219,856
|
|||||||
Debt securities issued by U.S. government agencies
|
47,496
|
7
|
(27
|
)
|
47,476
|
|||||||||||
Debt securities issued by the U.S. Treasury (2)
|
19,008
|
9
|
—
|
19,017
|
||||||||||||
Debt securities issued by states of the United States and political subdivisions of the states (2)
|
45,196
|
19
|
(53
|
)
|
45,162
|
|||||||||||
Total securities with a maturity of one year or less
|
331,556
|
124
|
(169
|
)
|
331,511
|
|||||||||||
Corporate debt securities
|
152,730
|
16
|
(600
|
)
|
152,146
|
|||||||||||
Debt securities issued by U.S. government agencies
|
62,530
|
—
|
(151
|
)
|
62,379
|
|||||||||||
Debt securities issued by states of the United States and political subdivisions of the states
|
60,073
|
32
|
(234
|
)
|
59,871
|
|||||||||||
Total securities with a maturity of more than one year
|
275,333
|
48
|
(985
|
)
|
274,396
|
|||||||||||
Total available-for-sale securities
|
$
|
606,889
|
$
|
172
|
$
|
(1,154
|
)
|
$
|
605,907
|
|||||||
Equity securities:
|
||||||||||||||||
Regulus Therapeutics Inc.
|
$
|
12,477
|
$
|
69,404
|
$
|
—
|
$
|
81,881
|
||||||||
Total equity securities
|
$
|
12,477
|
$
|
69,404
|
$
|
—
|
$
|
81,881
|
||||||||
Total available-for-sale and equity securities
|
$
|
619,366
|
$
|
69,576
|
$
|
(1,154
|
)
|
$
|
687,788
|
(1) | Our available-for-sale securities are held at amortized cost. |
(2) | Includes investments classified as cash equivalents on our consolidated balance sheet. |
Less than 12 months of
Temporary Impairment
|
More than 12 months of
Temporary Impairment
|
Total Temporary
Impairment
|
||||||||||||||||||||||||||
Number of
Investments
|
Estimated
Fair Value
|
Unrealized
Losses
|
Estimated
Fair Value
|
Unrealized
Losses
|
Estimated
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||||||
Corporate debt securities
|
397
|
$
|
406,098
|
$
|
(1,908
|
)
|
$
|
16,066
|
$
|
(47
|
)
|
$
|
422,164
|
$
|
(1,955
|
)
|
||||||||||||
Debt securities issued by U.S. government agencies
|
19
|
71,842
|
(262
|
)
|
1,001
|
(1
|
)
|
72,843
|
(263
|
)
|
||||||||||||||||||
Debt securities issued by the U.S. Treasury
|
2
|
2,601
|
(3
|
)
|
—
|
—
|
2,601
|
(3
|
)
|
|||||||||||||||||||
Debt securities issued by states of the United States and political subdivisions of the states
|
230
|
59,882
|
(173
|
)
|
29,634
|
(158
|
)
|
89,516
|
(331
|
)
|
||||||||||||||||||
Total temporarily impaired securities
|
648
|
$
|
540,423
|
$
|
(2,346
|
)
|
$
|
46,701
|
$
|
(206
|
)
|
$
|
587,124
|
$
|
(2,552
|
)
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
1 percent convertible senior notes
|
$
|
347,214
|
$
|
327,486
|
||||
2¾ percent convertible senior notes
|
50,361
|
48,014
|
||||||
Long-term financing liability for leased facility
|
72,217
|
71,731
|
||||||
Equipment financing arrangement
|
515
|
3,226
|
||||||
Leases and other obligations
|
2,341
|
7,325
|
||||||
Total
|
$
|
472,648
|
$
|
457,782
|
||||
Less: current portion
|
(515
|
)
|
(2,882
|
)
|
||||
Total Long-Term Obligations
|
$
|
472,133
|
$
|
454,900
|
1 Percent
Convertible Senior Notes
|
2¾ Percent
Convertible Senior Notes
|
|||||||
Outstanding balance
|
$
|
500
|
$
|
61
|
||||
Issue date
|
November 2014
|
August 2012
|
||||||
Maturity date
|
November 2021
|
October 2019
|
||||||
Interest rate
|
1 percent
|
2¾ percent
|
||||||
Conversion price per share
|
$
|
66.81
|
$
|
16.63
|
||||
Total shares of common stock subject to conversion
|
7.5
|
3.7
|
1 Percent
Convertible Senior Notes
|
2¾ Percent
Convertible Senior Notes
|
|
Nonconvertible debt borrowing rate
|
7.4 percent
|
8.0 percent
|
Effective interest rate
|
7.8 percent
|
8.8 percent
|
Amortization period of debt discount
|
7 years
|
7 years
|
December 31,
|
||||||||
2015
|
2014
|
|||||||
2¾ Percent Convertible Senior Notes
|
||||||||
Fair value of outstanding notes
|
$
|
215,320
|
$
|
223,900
|
||||
Principal amount of convertible notes outstanding
|
$
|
61,247
|
$
|
61,247
|
||||
Unamortized portion of debt discount
|
$
|
10,886
|
$
|
13,233
|
||||
Long-term debt
|
$
|
50,361
|
$
|
48,014
|
||||
Carrying value of equity component
|
$
|
18,714
|
$
|
18,714
|
||||
1 Percent Convertible Senior Notes
|
||||||||
Fair value of outstanding notes
|
$
|
555,000
|
$
|
568,000
|
||||
Principal amount of convertible notes outstanding
|
$
|
500,000
|
$
|
500,000
|
||||
Unamortized portion of debt discount
|
$
|
152,786
|
$
|
172,514
|
||||
Long-term debt
|
$
|
347,214
|
$
|
327,486
|
||||
Carrying value of equity component
|
$
|
174,770
|
$
|
174,770
|
(i)
|
a floating rate equal to the one-month London Interbank Offered Rate, or LIBOR, in effect plus 1.25 percent per annum;
|
(ii)
|
a fixed rate equal to LIBOR plus 1.25 percent for a period of one, two, three, four, six, or twelve months as elected by us; or
|
(iii)
|
a fixed rate equal to the LIBOR swap rate during the period of the loan.
|
2016
|
$
|
15,767
|
||
2017
|
6,744
|
|||
2018
|
6,744
|
|||
2019
|
6,744
|
|||
2020
|
66,304
|
|||
Thereafter
|
505,960
|
|||
Subtotal
|
$
|
608,263
|
||
Less: current portion
|
(9,029
|
)
|
||
Less: fixed and determinable interest
|
(37,655
|
)
|
||
Less: unamortized portion of debt discount
|
(163,672
|
)
|
||
Plus: Deferred rent
|
2,006
|
|||
Total
|
$
|
399,913
|
Operating
Leases
|
||||
2016
|
$
|
1,879
|
||
2017
|
1,878
|
|||
2018
|
1,597
|
|||
2019
|
1,474
|
|||
2020
|
1,527
|
|||
Thereafter
|
16,125
|
|||
Total minimum payments
|
$
|
24,480
|
Future Rent
Payments
|
||||
2016
|
$
|
6,550
|
||
2017
|
6,550
|
|||
2018
|
6,943
|
|||
2019
|
6,943
|
|||
2020
|
7,359
|
|||
Thereafter
|
91,205
|
|||
Total minimum payments
|
$
|
125,550
|
| a sale, lease or other disposition of all or substantially all of our assets; |
| a merger or consolidation in which we are not the surviving corporation; or |
| reverse merger in which we are the surviving corporation but the shares of common stock outstanding immediately preceding the merger are converted by virtue of the merger into other property, whether in the form of securities, cash or otherwise, |
| arrange for assumption, continuation, or substitution of a stock award by a surviving or acquiring entity (or its parent company); |
| arrange for the assignment of any reacquisition or repurchase rights applicable to any shares of our common stock issued pursuant to a stock award to the surviving or acquiring corporation (or its parent company); |
| accelerate the vesting and exercisability of a stock award followed by the termination of the stock award; |
| arrange for the lapse of any reacquisition or repurchase rights applicable to any shares of our common stock issued pursuant to a stock award; |
| cancel or arrange for the cancellation of a stock award, to the extent not vested or not exercised prior to the effective date of the corporate transaction, in exchange for cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; and |
| arrange for the surrender of a stock award in exchange for a payment equal to the excess of (a) the value of the property the holder of the stock award would have received upon the exercise of the stock award, over (b) any exercise price payable by such holder in connection with such exercise. |
Number of
Shares
|
Weighted
Average Exercise
Price
Per Share
|
Average
Remaining
Contractual Term
(Years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding at December 31, 2014
|
7,379
|
$
|
19.52
|
|||||||||||||
Granted
|
2,550
|
$
|
61.02
|
|||||||||||||
Exercised
|
(1,674
|
)
|
$
|
14.07
|
||||||||||||
Cancelled/forfeited/expired
|
(214
|
)
|
$
|
42.43
|
||||||||||||
Outstanding at December 31, 2015
|
8,041
|
$
|
33.21
|
4.57
|
$
|
232,581
|
||||||||||
Exercisable at December 31, 2015
|
3,940
|
$
|
16.43
|
3.32
|
$
|
179,273
|
Number of
Shares
|
Weighted
Average
Grant Date
Fair Value
Per Share
|
|||||||
Non-vested at December 31, 2014
|
638
|
$
|
30.52
|
|||||
Granted
|
348
|
$
|
65.69
|
|||||
Vested
|
(196
|
)
|
$
|
27.40
|
||||
Cancelled/forfeited
|
(39
|
)
|
$
|
42.87
|
||||
Non-vested at December 31, 2015
|
751
|
$
|
47.47
|
Year Ended
December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Research, development and patents
|
$
|
43,638
|
$
|
25,843
|
$
|
9,673
|
||||||
General and administrative
|
15,676
|
5,540
|
1,745
|
|||||||||
Total
|
$
|
59,314
|
$
|
31,383
|
$
|
11,418
|
December 31,
|
|||||
2015
|
2014
|
2013
|
|||
Risk-free interest rate
|
1.5 %
|
1.7 %
|
1.1 %
|
||
Dividend yield
|
0.0 %
|
0.0 %
|
0.0 %
|
||
Volatility
|
53.8 %
|
50.1 %
|
51.1 %
|
||
Expected life
|
4.5 years
|
4.7 years
|
5.1 years
|
December 31,
|
|||||
2015
|
2014
|
2013
|
|||
Risk-free interest rate
|
2.1 %
|
2.2 %
|
2.2 %
|
||
Dividend yield
|
0.0 %
|
0.0 %
|
0.0 %
|
||
Volatility
|
52.2 %
|
54.2 %
|
52.7 %
|
||
Expected life
|
6.9 years
|
6.9 years
|
7.2 years
|
December 31,
|
|||||
2015
|
2014
|
2013
|
|||
Risk-free interest rate
|
0.1 %
|
0.1 %
|
0.1 %
|
||
Dividend yield
|
0.0 %
|
0.0 %
|
0.0 %
|
||
Volatility
|
51.7 %
|
60.1 %
|
62.9 %
|
||
Expected life
|
6 months
|
6 months
|
6 months
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Current:
|
||||||||||||
Federal
|
$
|
379
|
$
|
263
|
$
|
—
|
||||||
State
|
(7
|
)
|
(4,295
|
)
|
2
|
|||||||
Total current
|
372
|
(4,032
|
)
|
2
|
||||||||
Deferred:
|
||||||||||||
Federal
|
—
|
(8,948
|
)
|
(5,082
|
)
|
|||||||
State
|
—
|
(2,427
|
)
|
(834
|
)
|
|||||||
Total deferred
|
—
|
(11,375
|
)
|
(5,916
|
)
|
|||||||
Income tax expense (benefit)
|
$
|
372
|
$
|
(15,407
|
)
|
$
|
(5,914
|
)
|
Year Ended December 31,
|
||||||||||||||||||||||||
2015
|
2014
|
2013
|
||||||||||||||||||||||
Pre-tax loss
|
$
|
(87,906
|
)
|
$
|
(54,391
|
)
|
$
|
(66,558
|
)
|
|||||||||||||||
Statutory rate
|
(30,767
|
)
|
35.0
|
%
|
(19,035
|
)
|
35.0
|
%
|
(23,295
|
)
|
35.0
|
%
|
||||||||||||
State income tax net of federal benefit
|
1
|
0.0
|
%
|
(3,125
|
)
|
5.7
|
%
|
(3,823
|
)
|
5.7
|
%
|
|||||||||||||
Net change in valuation allowance
|
69,499
|
(79.1
|
)%
|
29,547
|
(54.3
|
)%
|
28,850
|
(43.3
|
)%
|
|||||||||||||||
Loss on debt extinguishment
|
—
|
0.0
|
%
|
2,406
|
(4.4
|
)%
|
—
|
0.0
|
%
|
|||||||||||||||
Tax credits
|
(41,284
|
)
|
47.0
|
%
|
(23,628
|
)
|
43.4
|
%
|
(15,839
|
)
|
23.8
|
%
|
||||||||||||
California franchise tax refund
|
—
|
0.0
|
%
|
(2,795
|
)
|
5.1
|
%
|
—
|
0.0
|
%
|
||||||||||||||
Deferred tax true-up
|
1,496
|
(1.7
|
)%
|
977
|
(1.8
|
)%
|
8,023
|
(12.1
|
)%
|
|||||||||||||||
Other
|
1,427
|
(1.6
|
)%
|
246
|
(0.5
|
)%
|
170
|
(0.2
|
)%
|
|||||||||||||||
Effective rate
|
$
|
372
|
(0.4
|
)%
|
$
|
(15,407
|
)
|
28.2
|
%
|
$
|
(5,914
|
)
|
8.9
|
%
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Deferred Tax Assets:
|
||||||||
Net operating loss carryovers
|
$
|
218,493
|
$
|
231,654
|
||||
R&D credits
|
153,601
|
93,594
|
||||||
Deferred revenue
|
45,110
|
58,836
|
||||||
Stock-based compensation
|
31,093
|
21,553
|
||||||
Other
|
19,655
|
15,549
|
||||||
Total deferred tax assets
|
$
|
467,952
|
$
|
421,186
|
||||
Deferred Tax Liabilities:
|
||||||||
Convertible debt
|
$
|
(55,928
|
)
|
$
|
(73,733
|
)
|
||
Unrealized gain in other comprehensive income
|
(5,288
|
)
|
(27,878
|
)
|
||||
Intangible and capital assets
|
(2,643
|
)
|
(3,641
|
)
|
||||
Net deferred tax asset
|
$
|
404,093
|
$
|
315,934
|
||||
Valuation allowance
|
(404,093
|
)
|
(315,934
|
)
|
||||
Net deferreds
|
$
|
—
|
$
|
—
|
Year Ended December 31,
|
||||||||||||
2015
|
2014
|
2013
|
||||||||||
Beginning balance of unrecognized tax benefits
|
$
|
27,365
|
$
|
23,964
|
$
|
10,872
|
||||||
Decrease for prior period tax positions
|
—
|
(1,653
|
)
|
—
|
||||||||
Increase for prior period tax positions
|
215
|
—
|
9,821
|
|||||||||
Increase for current period tax positions
|
23,677
|
5,054
|
3,271
|
|||||||||
Ending balance of unrecognized tax benefits
|
$
|
51,257
|
$
|
27,365
|
$
|
23,964
|
● | AstraZeneca may terminate the agreement or any program at any time by providing written notice to us; |
● | AstraZeneca may terminate the agreement or any program by providing written notice if we undergo a change of control with a third party; and |
● | Either we or AstraZeneca may terminate the agreement or any program by providing written notice to the other party upon the other party's uncured failure to perform a material obligation under the agreement, or the entire agreement if the other party becomes insolvent. |
● | Biogen may terminate the agreement or any program at any time by providing written notice to us; |
● | Under specific circumstances, if we are acquired by a third party with a product that directly competes with a compound being developed under the agreement, Biogen may terminate the affected program by providing written notice to us; |
● | If, within a specified period of time, any required clearance of a transaction contemplated by an agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, is not received, then either we or Biogen may terminate the affected program by providing written notice to the other party; and |
● | Either we or Biogen may terminate any program by providing written notice to the other party upon the other party's uncured failure to perform a material obligation under the agreement with respect to the affected program, or the entire agreement if the other party becomes insolvent. |
● | Bayer may terminate the agreement or any program at any time by providing written notice to us; |
● | Either we or Bayer may terminate the agreement or any program by providing written notice to the other party upon the other party’s uncured failure to perform a material obligation under the agreement, or the entire agreement if the other party becomes insolvent. |
● | GSK may terminate any program, other than the IONIS-TTR Rx program, at any time by providing written notice to us; |
● | GSK may terminate the IONIS-TTR Rx program by providing written notice to us after reviewing specific data from the Phase 3 study for the program; and |
● | Either we or GSK may terminate any program by providing written notice to the other party upon the other party's uncured failure to perform a material obligation under the agreement with respect to the affected program, or the entire agreement if the other party becomes insolvent. |
● | Janssen may terminate the agreement or any program at any time by providing written notice to us; and |
● | Either we or Janssen may terminate any program by providing written notice to the other party upon the other party’s uncured failure to perform a material obligation under the agreement, or the entire agreement if the other party becomes insolvent. |
● | Roche may terminate the agreement at any time by providing written notice to us; |
● | Either we or Roche may terminate the agreement by providing written notice to the other party upon the other party's uncured failure to perform a material obligation under the agreement or if the other party becomes insolvent; and |
● | Either we or Roche may terminate the brain shuttle program if at least one development candidate is not designated under such program by a mutually agreed deadline. |
2015
|
Ionis Core
|
Akcea Therapeutics
|
Elimination of Intercompany Activity
|
Total
|
||||||||||||
Revenue:
|
||||||||||||||||
Research and development
|
$
|
285,608
|
$
|
—
|
$
|
(4,248
|
)
|
$
|
281,360
|
|||||||
Licensing and royalty
|
2,343
|
—
|
—
|
2,343
|
||||||||||||
Total segment revenue
|
$
|
287,951
|
$
|
—
|
$
|
(4,248
|
)
|
$
|
283,703
|
|||||||
Loss from operations
|
$
|
(21,378
|
)
|
$
|
(54,384
|
)
|
$
|
—
|
$
|
(75,762
|
)
|
|||||
Total assets
|
$
|
1,004,150
|
$
|
55,354
|
$
|
(103,399
|
)
|
$
|
956,105
|
2014
|
Ionis Core
|
Akcea Therapeutics
|
Total
|
|||||||||
Revenue:
|
||||||||||||
Research and development
|
$
|
202,514
|
$
|
—
|
$
|
202,514
|
||||||
Licensing and royalty
|
11,647
|
—
|
11,647
|
|||||||||
Total segment revenue
|
$
|
214,161
|
$
|
—
|
$
|
214,161
|
||||||
Loss from operations
|
$
|
(26,033
|
)
|
$
|
(21,697
|
)
|
$
|
(47,730
|
)
|
2013
|
Ionis Core
|
Akcea Therapeutics
|
Total
|
|||||||||
Revenue:
|
||||||||||||
Research and development
|
$
|
147,380
|
$
|
—
|
$
|
144,194
|
||||||
Licensing and royalty
|
3,091
|
—
|
3,091
|
|||||||||
Total segment revenue
|
$
|
150,471
|
$
|
—
|
$
|
147,285
|
||||||
Loss from operations
|
$
|
(38,764
|
)
|
$
|
(12,902
|
)
|
$
|
(51,666
|
)
|
2015
|
2014
|
2013
|
||||||
Partner A
|
37 %
|
58 %
|
25 %
|
|||||
Partner B
|
33 %
|
0 %
|
0 %
|
|||||
Partner C
|
12 %
|
17 %
|
24 %
|
|||||
Partner D
|
11 %
|
4 %
|
3 %
|
|||||
Partner E
|
2 %
|
13 %
|
20 %
|
|||||
Partner F
|
0 %
|
0 %
|
22 %
|
2015 Quarters
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
||||||||||||
Revenue
|
$
|
62,583
|
$
|
120,428
|
$
|
49,121
|
$
|
51,571
|
||||||||
Operating expenses
|
$
|
71,913
|
$
|
75,782
|
$
|
97,259
|
$
|
114,511
|
||||||||
Income (loss) from operations
|
$
|
(9,330
|
)
|
$
|
44,646
|
$
|
(48,138
|
)
|
$
|
(62,940
|
)
|
|||||
Net income (loss)
|
$
|
(16,717
|
)
|
$
|
35,648
|
$
|
(35,776
|
)
|
$
|
(71,433
|
)
|
|||||
Basic net income (loss) per share (1)
|
$
|
(0.14
|
)
|
$
|
0.30
|
$
|
(0.30
|
)
|
$
|
(0.59
|
)
|
|||||
Diluted net income (loss) per share (1) (2)
|
$
|
(0.14
|
)
|
$
|
0.29
|
$
|
(0.30
|
)
|
$
|
(0.59
|
)
|
2014 Quarters
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
||||||||||||
Revenue
|
$
|
28,161
|
$
|
57,076
|
$
|
44,063
|
$
|
84,861
|
||||||||
Operating expenses
|
$
|
57,828
|
$
|
63,726
|
$
|
65,556
|
$
|
74,781
|
||||||||
Income (loss) from operations
|
$
|
(29,667
|
)
|
$
|
(6,650
|
)
|
$
|
(21,493
|
)
|
$
|
10,080
|
|||||
Net income (loss)
|
$
|
(31,280
|
)
|
$
|
(12,081
|
)
|
$
|
(26,676
|
)
|
$
|
31,053
|
|||||
Basic net income (loss) per share (1)
|
$
|
(0.27
|
)
|
$
|
(0.10
|
)
|
$
|
(0.23
|
)
|
$
|
0.26
|
|||||
Diluted net income (loss) per share (1) (3)
|
$
|
(0.27
|
)
|
$
|
(0.10
|
)
|
$
|
(0.23
|
)
|
$
|
0.25
|
(1)
|
We computed net income (loss) per share independently for each of the quarters presented. Therefore, the sum of the quarterly net income (loss) per share will not necessarily equal the total for the year.
|
(2)
|
For the three months ended June 30, 2015, we had net income. As a result, we computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during the period. Diluted common equivalent shares for the three months ended June 30, 2015 consisted of the following (in thousands):
|
Three Months Ended June 30, 2015
|
Income
(Numerator)
|
Shares
(Denominator)
|
Per-Share Amount
|
|||||||||
|
||||||||||||
Income available to common shareholders
|
$
|
35,648
|
119,742
|
$
|
0.30
|
|||||||
Effect of diluted securities:
|
||||||||||||
Shares issuable upon exercise of stock options
|
3,974
|
|||||||||||
Shares issuable upon restricted stock award issuance
|
376
|
|||||||||||
Shares issuable related to our ESPP
|
4
|
|||||||||||
Shares issuable related to our 2¾ percent notes
|
1,047
|
3,683
|
||||||||||
Income available to common shareholders, plus assumed conversions
|
$
|
36,695
|
127,779
|
$
|
0.29
|
(3)
|
For the three months ended December 31, 2014, we had net income. As a result, we computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during the period. Diluted common equivalent shares for the three months ended December 31, 2014 consisted of the following (in thousands):
|
Three Months Ended December 31, 2014
|
Income
(Numerator)
|
Shares
(Denominator)
|
Per-Share Amount
|
|||||||||
|
||||||||||||
Income available to common shareholders
|
$
|
31,053
|
118,223
|
$
|
0.26
|
|||||||
Effect of diluted securities:
|
||||||||||||
Shares issuable upon exercise of stock options
|
4,189
|
|||||||||||
Shares issuable upon restricted stock award issuance
|
418
|
|||||||||||
Shares issuable related to our ESPP
|
9
|
|||||||||||
Income available to common shareholders, plus assumed conversions
|
$
|
31,053
|
122,839
|
$
|
0.25
|
(a) | The Line of Credit Commitment section in the Basic Terms of the Agreement is hereby amended and restated as follows: |
(b) | Section 5.03(a) of the Agreement is hereby amended and restated as follows: |
(c) | Section 5.03(c) of the Agreement is hereby amended and restated as follows: |
(d) | The defined term “Commitment” in Schedule I of the Agreement is hereby amended and restated as follows: |
(e) | The defined term “Total Unsubordinated Liabilities” is deleted in its entirety from Schedule I of the Agreement. |
(f) | The following defined term is added to Schedule I of the Agreement in the appropriate alphabetical order: |
LENDER:
|
BORROWER:
|
||||
MORGAN STANLEY PRIVATE BANK, NATIONAL ASSOCIATION
|
IONIS PHARMACEUTICALS, INC.
|
||||
By:
|
/s/ Mark Reardon |
By:
|
/s/ Elizabeth L. Hougen | ||
Name: Mark Reardon
|
Name: Elizabeth L. Hougen
|
||||
Title: Authorized Signatory
|
Title: SVP, Finance and CFO
|
|
/s/ ERNST & YOUNG LLP
|
|
|
San Diego, California
|
|
February 25, 2016
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Ionis Pharmaceuticals, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the consolidated financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, consolidated results of operations and consolidated cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: February 25, 2016
|
|
|
|
/s/ STANLEY T. CROOKE
|
|
Stanley T. Crooke, M.D., Ph.D.
|
|
Chief Executive Officer
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Ionis Pharmaceuticals, Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the consolidated financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, consolidated results of operations and consolidated cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: February 25, 2016
|
|
|
|
/s/ ELIZABETH L. HOUGEN
|
|
Elizabeth L. Hougen
|
|
Chief Financial Officer
|
|
1.
|
The Company's Annual Report on Form 10-K for the year ended December 31, 2015, to which this Certification is attached as Exhibit 32.1 (the "Annual Report"), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Annual Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Annual Report and the results of operations of the Company for the period covered by the Annual Report.
|
|
|
|
|
|
|
/s/ STANLEY T. CROOKE
|
|
/s/ ELIZABETH L. HOUGEN
|
Stanley T. Crooke, M.D., Ph.D.
|
|
Elizabeth L. Hougen
|
Chief Executive Officer
|
|
Chief Financial Officer
|