|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
33-0336973
|
|
(State or other jurisdiction of
incorporation or organization) |
(IRS Employer Identification No.)
|
2855 Gazelle Court, Carlsbad, CA
|
92010
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Title of each class
|
Name of each exchange on which registered
|
|
Common Stock, $.001 Par Value
|
The Nasdaq Stock Market, LLC
|
Large accelerated filer
|
Accelerated filer
|
Non-accelerated filer
|
Smaller reporting company
|
(Do not check if a smaller reporting company)
|
|
Emerging growth company
|
September 30,
2018
|
December 31,
2017
|
|||||||
(as revised*)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
479,891
|
$
|
129,630
|
||||
Short-term investments
|
1,479,098
|
893,085
|
||||||
Contracts receivable
|
14,732
|
62,955
|
||||||
Inventories
|
8,378
|
9,982
|
||||||
Other current assets
|
97,125
|
73,082
|
||||||
Total current assets
|
2,079,224
|
1,168,734
|
||||||
Property, plant and equipment, net
|
132,003
|
121,907
|
||||||
Patents, net
|
24,027
|
22,004
|
||||||
Deposits and other assets
|
12,659
|
10,129
|
||||||
Total assets
|
$
|
2,247,913
|
$
|
1,322,774
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
13,576
|
$
|
24,886
|
||||
Accrued compensation
|
24,259
|
25,151
|
||||||
Accrued liabilities
|
50,786
|
66,618
|
||||||
Current portion of long-term obligations
|
14,472
|
1,621
|
||||||
Current portion of deferred contract revenue
|
157,145
|
125,336
|
||||||
Total current liabilities
|
260,238
|
243,612
|
||||||
Long-term deferred contract revenue
|
523,384
|
108,026
|
||||||
1 percent convertible senior notes
|
559,184
|
533,111
|
||||||
Long-term obligations, less current portion
|
5,138
|
12,974
|
||||||
Long-term mortgage debt
|
59,825
|
59,771
|
||||||
Total liabilities
|
1,407,769
|
957,494
|
||||||
Stockholders’ equity:
|
||||||||
Common stock, $0.001 par value; 300,000,000 shares authorized, 137,506,203 and 124,976,373 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively
|
138
|
125
|
||||||
Additional paid-in capital
|
2,030,313
|
1,553,681
|
||||||
Accumulated other comprehensive loss
|
(32,532
|
)
|
(31,759
|
)
|
||||
Accumulated deficit
|
(1,287,369
|
)
|
(1,241,034
|
)
|
||||
Total Ionis stockholders’ equity
|
710,550
|
281,013
|
||||||
Noncontrolling interest in Akcea Therapeutics, Inc.
|
129,594
|
84,267
|
||||||
Total stockholders’ equity
|
840,144
|
365,280
|
||||||
Total liabilities and stockholders’ equity
|
$
|
2,247,913
|
$
|
1,322,774
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Revenue:
|
(as revised*)
|
(as revised*)
|
||||||||||||||
Commercial revenue:
|
||||||||||||||||
SPINRAZA royalties
|
$
|
70,010
|
$
|
32,890
|
$
|
167,743
|
$
|
60,467
|
||||||||
Licensing and other royalty revenue
|
12,746
|
1,727
|
14,232
|
5,639
|
||||||||||||
Total commercial revenue
|
82,756
|
34,617
|
181,975
|
66,106
|
||||||||||||
Research and development revenue under collaborative agreements
|
62,639
|
83,697
|
225,584
|
280,281
|
||||||||||||
Total revenue
|
145,395
|
118,314
|
407,559
|
346,387
|
||||||||||||
|
||||||||||||||||
Expenses:
|
||||||||||||||||
Research, development and patent
|
95,255
|
80,214
|
301,153
|
246,358
|
||||||||||||
Selling, general and administrative
|
68,712
|
26,788
|
178,563
|
62,782
|
||||||||||||
Total operating expenses
|
163,967
|
107,002
|
479,716
|
309,140
|
||||||||||||
|
||||||||||||||||
Income (loss) from operations
|
(18,572
|
)
|
11,312
|
(72,157
|
)
|
37,247
|
||||||||||
|
||||||||||||||||
Other income (expense):
|
||||||||||||||||
Investment income
|
9,963
|
2,811
|
18,711
|
7,504
|
||||||||||||
Interest expense
|
(11,282
|
)
|
(10,825
|
)
|
(33,332
|
)
|
(33,966
|
)
|
||||||||
Loss on extinguishment
of financing liability for leased facility
|
—
|
(7,689
|
)
|
—
|
(7,689
|
)
|
||||||||||
Other income (expenses)
|
(22
|
)
|
(2,141
|
)
|
(145
|
)
|
(3,528
|
)
|
||||||||
|
||||||||||||||||
Loss before income tax expense
|
(19,913
|
)
|
(6,532
|
)
|
(86,923
|
)
|
(432
|
)
|
||||||||
|
||||||||||||||||
Income tax expense
|
(452
|
)
|
(961
|
)
|
(824
|
)
|
(1,184
|
)
|
||||||||
|
||||||||||||||||
Net loss
|
(20,365
|
)
|
(7,493
|
)
|
(87,747
|
)
|
(1,616
|
)
|
||||||||
Net loss attributable to noncontrolling interest in Akcea Therapeutics, Inc.
|
15,806
|
4,882
|
41,412
|
4,882
|
||||||||||||
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(4,559
|
)
|
$
|
(2,611
|
)
|
$
|
(46,335
|
)
|
$
|
3,266
|
|||||
Basic net income (loss) per share
|
$
|
(0.03
|
)
|
$
|
(0.02
|
)
|
$
|
(0.33
|
)
|
$
|
0.13
|
|||||
Shares used in computing basic net income (loss) per share
|
143,314
|
124,370
|
132,518
|
123,746
|
||||||||||||
Diluted net income (loss) per share
|
$
|
(0.03
|
)
|
$
|
(0.02
|
)
|
$
|
(0.33
|
)
|
$
|
0.13
|
|||||
Shares used in computing diluted net income (loss) per share
|
143,314
|
124,370
|
132,518
|
125,858
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
(as revised*)
|
(as revised*)
|
|||||||||||||||
Net loss
|
$
|
(20,365
|
)
|
$
|
(7,493
|
)
|
$
|
(87,747
|
)
|
$
|
(1,616
|
)
|
||||
Unrealized gains (losses) on debt securities, net of tax
|
133
|
215
|
(834
|
)
|
610
|
|||||||||||
Reclassification adjustment for realized gains included in net income (loss)
|
—
|
—
|
—
|
(374
|
)
|
|||||||||||
Currency translation adjustment
|
(28
|
)
|
(42
|
)
|
61
|
(77
|
)
|
|||||||||
|
||||||||||||||||
Comprehensive loss
|
(20,260
|
)
|
(7,320
|
)
|
(88,520
|
)
|
(1,457
|
)
|
||||||||
Comprehensive loss attributable to noncontrolling interests
|
15,797
|
3,952
|
41,455
|
3,952
|
||||||||||||
Comprehensive income (loss) attributable to Ionis Pharmaceuticals, Inc. stockholders
|
$
|
(4,463
|
)
|
$
|
(3,368
|
)
|
$
|
(47,065
|
)
|
$
|
2,495
|
Nine Months Ended
September 30,
|
||||||||
2018
|
2017
|
|||||||
Operating activities:
|
(as revised*)
|
|||||||
Net loss
|
$
|
(87,747
|
)
|
$
|
(1,616
|
)
|
||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||
Depreciation
|
7,650
|
6,138
|
||||||
Amortization of patents
|
1,356
|
1,216
|
||||||
Amortization of premium on investments, net
|
791
|
5,227
|
||||||
Amortization of debt issuance costs
|
1,343
|
1,202
|
||||||
Amortization of convertible senior notes discount
|
24,781
|
22,963
|
||||||
Amortization of long-term financing liability for leased facility
|
—
|
3,659
|
||||||
Stock-based compensation expense
|
97,210
|
63,642
|
||||||
Gain on investment in Regulus Therapeutics, Inc.
|
—
|
(374
|
)
|
|||||
Loss on extinguishment of financing liability for leased facility
|
—
|
7,689
|
||||||
Non-cash losses related to patents, licensing and property, plant and equipment
|
482
|
(403
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Contracts receivable
|
48,223
|
65,119
|
||||||
Inventories
|
1,604
|
(962
|
)
|
|||||
Other current and long-term assets
|
(26,573
|
)
|
(34,866
|
)
|
||||
Accounts payable
|
(13,606
|
)
|
(1,707
|
)
|
||||
Accrued compensation
|
(892
|
)
|
(8,999
|
)
|
||||
Accrued liabilities and deferred rent
|
(14,392
|
)
|
(5,251
|
)
|
||||
Deferred contract revenue
|
447,168
|
31,071
|
||||||
Net cash provided by operating activities
|
487,398
|
153,748
|
||||||
Investing activities:
|
||||||||
Purchases of short-term investments
|
(1,156,335
|
)
|
(589,655
|
)
|
||||
Proceeds from the sale of short-term investments
|
568,517
|
313,860
|
||||||
Purchases of property, plant and equipment
|
(12,221
|
)
|
(26,502
|
)
|
||||
Acquisition of licenses and other assets, net
|
(3,317
|
)
|
(4,289
|
)
|
||||
Proceeds from the sale of Regulus Therapeutics stock
|
—
|
2,507
|
||||||
Net cash used in investing activities
|
(603,356
|
)
|
(304,079
|
)
|
||||
Financing activities:
|
||||||||
Proceeds from equity awards
|
18,254
|
17,672
|
||||||
Proceeds from the issuance of common stock from Akcea Therapeutics, Inc.’s initial public offering, net of underwriters’ discount
|
—
|
110,438
|
||||||
Proceeds from building mortgage debt, net of issuance costs
|
—
|
59,750
|
||||||
Proceeds from the issuance of common stock to Novartis
|
—
|
71,737
|
||||||
Proceeds from the issuance of common stock to Biogen
|
447,965
|
—
|
||||||
Offering costs paid
|
—
|
(1,057
|
)
|
|||||
Proceeds from the sale of Akcea Therapeutics, Inc. common stock to Novartis in a private placement
|
—
|
50,000
|
||||||
Payment to settle financing liability for leased facility
|
—
|
(80,133
|
)
|
|||||
Principal payments on debt and capital lease obligations
|
—
|
(3,577
|
)
|
|||||
Net cash provided by financing activities
|
466,219
|
224,830
|
||||||
Net increase in cash and cash equivalents
|
350,261
|
74,499
|
||||||
Cash and cash equivalents at beginning of period
|
129,630
|
84,685
|
||||||
Cash and cash equivalents at end of period
|
$
|
479,891
|
$
|
159,184
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Interest paid
|
$
|
5,434
|
$
|
4,020
|
||||
Supplemental disclosures of non-cash investing and financing activities:
|
||||||||
Amounts accrued for capital and patent expenditures
|
$
|
2,296
|
$
|
3,475
|
||||
Purchases of property, plant and equipment included in long-term obligations
|
$
|
3,596
|
$
|
—
|
||||
Unpaid deferred offering costs
|
$
|
—
|
$
|
638
|
At December 31, 2017
|
||||||||||||
As Previously
Reported under
Topic 605
|
Topic 606
Adjustment
|
As Revised
|
||||||||||
Current portion of deferred revenue
|
$
|
106,465
|
$
|
18,871
|
$
|
125,336
|
||||||
Long-term portion of deferred revenue
|
$
|
72,708
|
$
|
35,318
|
$
|
108,026
|
||||||
Accumulated deficit
|
$
|
(1,187,398
|
)
|
$
|
(53,636
|
)
|
$
|
(1,241,034
|
)
|
|||
Noncontrolling interest in Akcea Therapeutics, Inc.
|
$
|
87,847
|
$
|
(3,580
|
)
|
$
|
84,267
|
|||||
Total stockholders’ equity
|
$
|
418,719
|
$
|
(53,439
|
)
|
$
|
365,280
|
Three Months Ended September 30, 2017
|
||||||||||||
As Previously
Reported under
Topic 605
|
Topic 606
Adjustment
|
As Revised
|
||||||||||
Revenue:
|
||||||||||||
Commercial revenue:
|
||||||||||||
SPINRAZA royalties
|
$
|
32,890
|
$
|
—
|
$
|
32,890
|
||||||
Licensing and other royalty revenue
|
879
|
848
|
1,727
|
|||||||||
Total commercial revenue
|
33,769
|
848
|
34,617
|
|||||||||
Research and development revenue under collaborative agreements
|
87,142
|
(3,445
|
)
|
83,697
|
||||||||
Total revenue
|
$
|
120,911
|
$
|
(2,597
|
)
|
$
|
118,314
|
|||||
Income (loss) from operations
|
$
|
13,909
|
$
|
(2,597
|
)
|
$
|
11,312
|
|||||
Net income (loss)
|
$
|
(4,896
|
)
|
$
|
(2,597
|
)
|
$
|
(7,493
|
)
|
|||
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(976
|
)
|
$
|
(1,635
|
)
|
$
|
(2,611
|
)
|
|||
Net income (loss) per share, basic and diluted
|
$
|
0.00
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
Nine Months Ended September 30, 2017
|
||||||||||||
As Previously
Reported under
Topic 605
|
Topic 606
Adjustment
|
As Revised
|
||||||||||
Revenue:
|
||||||||||||
Commercial revenue:
|
||||||||||||
SPINRAZA royalties
|
$
|
60,467
|
$
|
—
|
$
|
60,467
|
||||||
Licensing and other royalty revenue
|
4,983
|
656
|
5,639
|
|||||||||
Total commercial revenue
|
65,450
|
656
|
66,106
|
|||||||||
Research and development revenue under collaborative agreements
|
269,917
|
10,364
|
280,281
|
|||||||||
Total revenue
|
$
|
335,367
|
$
|
11,020
|
$
|
346,387
|
||||||
Income from operations
|
$
|
26,227
|
$
|
11,020
|
$
|
37,247
|
||||||
Net income (loss)
|
$
|
(12,636
|
)
|
$
|
11,020
|
$
|
(1,616
|
)
|
||||
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(8,716
|
)
|
$
|
11,982
|
$
|
3,266
|
|||||
Net income (loss) per share, basic
|
$
|
0.02
|
$
|
0.11
|
$
|
0.13
|
||||||
Net income (loss) per share, diluted
|
$
|
0.02
|
$
|
0.11
|
$
|
0.13
|
Nine Months Ended September 30, 2017
|
||||||||||||
As Previously
Reported under
Topic 605
|
Topic 606
Adjustment
|
As Revised
|
||||||||||
Net income (loss)
|
$
|
(12,636
|
)
|
$
|
11,020
|
$
|
(1,616
|
)
|
||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||||||
Deferred contract revenue
|
$
|
42,091
|
$
|
(11,020
|
)
|
$
|
31,071
|
|||||
Cash and cash equivalents at beginning of period
|
$
|
84,685
|
$
|
—
|
$
|
84,685
|
||||||
Cash and cash equivalents at end of period
|
$
|
159,184
|
$
|
—
|
$
|
159,184
|
● |
A change in how we recognize milestone payments:
Topic 606 requires us to amortize more of the milestone payments we achieve, rather than recognizing the milestone payments in full in the period in which we achieved the milestone event as we did under Topic 605. This change resulted in an increase of $0.5 million and $27.9 million for the three and nine months ended September 30, 2017, respectively.
|
● |
A change in how we calculate revenue for payments we are recognizing into revenue over time:
Under Topic 605, we amortized payments into revenue evenly over the period of our obligations. When we made a change to our estimated completion period, we recognized that change on a prospective basis. Under Topic 606, we are required to use an input method to determine the amount we amortize each reporting period. Each period, we review our “inputs” such as our level of effort expended, including the time we estimate it will take us to complete the activities, or costs incurred relative to the total expected inputs to satisfy the performance obligation. For certain collaborations, such as Bayer, Janssen and Novartis, the input method resulted in a change to the revenue we had previously recognized using a straight-line amortization method.
This change resulted in a decrease of $4.0 million and $17.5 million for the three and nine months ended September 30, 2017, respectively.
|
1. |
Identify the contract
|
● |
We and our partner approved the contract and we are both committed to perform our obligations;
|
● |
We have identified our rights, our partner’s rights and the payment terms;
|
● |
We have concluded that the contract has commercial substance, meaning that the risk, timing, or amount of our future cash flows is expected to change as a result of the contract; and
|
● |
We believe collectability is probable.
|
2. |
Identify the performance obligations
|
3. |
Determine the transaction price
|
4. |
Allocate the transaction price
|
● |
Estimated future product sales;
|
● |
Estimated royalties on future product sales;
|
● |
Contractual milestone payments;
|
● |
Expenses we expect to incur;
|
● |
Income taxes; and
|
● |
A discount rate.
|
● |
The number of internal hours we estimate 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 API we will use.
|
5. |
Recognize revenue
|
1) |
If the additional goods and/or services are distinct from the other performance obligations in the original agreement; and
|
2) |
If the goods and/or services are at a stand-alone selling price.
|
● |
Whether the agreements were negotiated together with a single objective;
|
● |
Whether the amount of consideration in one contract depends on the price or performance of the other agreement; or
|
● |
Whether the goods and/or services promised under the agreements are a single performance obligation.
|
At December 31, 2017
|
||||||||||||
As Previously
Reported under
Topic 605
|
Topic 606
Adjustment
|
As Revised
|
||||||||||
Current portion of deferred revenue
|
$
|
106,465
|
$
|
18,871
|
$
|
125,336
|
||||||
Long-term portion of deferred revenue
|
72,708
|
35,318
|
108,026
|
|||||||||
Total deferred revenue
|
$
|
179,173
|
$
|
54,189
|
$
|
233,362
|
● |
$24.2 million from Biogen;
|
● |
$15.9 million from AstraZeneca;
|
● |
$11.8 from Novartis; and
|
● |
$2.3 million from other partners.
|
Three months ended September 30, 2018
|
Weighted
Average Shares
Owned in Akcea
|
Akcea’s
Net Income (Loss)
Per Share
|
Ionis’ Portion of
Akcea’s Net Loss
|
|||||||||
Common shares
|
65,538
|
$
|
(0.73
|
)
|
$
|
(47,843
|
)
|
|||||
Akcea’s net loss attributable to our ownership
|
$
|
(47,843
|
)
|
|||||||||
Ionis’ stand-alone net income
|
43,226
|
|||||||||||
Net loss available to Ionis common stockholders
|
$
|
(4,616
|
)
|
|||||||||
Weighted average shares outstanding
|
143,314
|
|||||||||||
Basic net loss per share
|
$
|
(0.03
|
)
|
Nine months ended September 30, 2018
|
Weighted
Average Shares
Owned in Akcea
|
Akcea’s
Net Loss
Per Share
|
Ionis’ Portion of
Akcea’s Net Loss
|
|||||||||
Common shares
|
57,347
|
$
|
(1.93
|
)
|
$
|
(110,680
|
)
|
|||||
Akcea’s net loss attributable to our ownership
|
$
|
(110,680
|
)
|
|||||||||
Ionis’ stand-alone net income
|
67,517
|
|||||||||||
Net income available to Ionis common stockholders
|
$
|
(43,162
|
)
|
|||||||||
Weighted average shares outstanding
|
132,518
|
|||||||||||
Basic net loss per share
|
$
|
(0.33
|
)
|
Three months ended September 30, 2017
|
Weighted
Average Shares
Owned in Akcea
|
Akcea’s
Net Loss
Per Share
|
Ionis’ Portion of
Akcea’s Net Loss
|
|||||||||
Common shares
|
36,556
|
$
|
(0.33
|
)
|
$
|
(12,063
|
)
|
|||||
Preferred shares
|
5,651
|
(0.01
|
)
|
(57
|
)
|
|||||||
Akcea’s net loss attributable to our ownership
|
$
|
(12,120
|
)
|
|||||||||
Ionis’ stand-alone net income
|
10,144
|
|||||||||||
Net loss available to Ionis common stockholders
|
$
|
(1,976
|
)
|
|||||||||
Weighted average shares outstanding
|
124,370
|
|||||||||||
Basic net income per share
|
$
|
(0.02
|
)
|
Nine months ended September 30, 2017
|
Weighted
Average Shares
Owned in Akcea
|
Akcea’s
Net Loss
Per Share
|
Ionis’ Portion of
Akcea’s Net Loss
|
|||||||||
Common shares
|
12,319
|
$
|
(3.12
|
)
|
$
|
(38,435
|
)
|
|||||
Preferred shares
|
21,055
|
(2.16
|
)
|
(45,479
|
)
|
|||||||
Akcea’s net loss attributable to our ownership
|
$
|
(83,914
|
)
|
|||||||||
Ionis’ stand-alone net income
|
100,235
|
|||||||||||
Net income available to Ionis common stockholders
|
$
|
16,321
|
||||||||||
Weighted average shares outstanding
|
123,746
|
|||||||||||
Basic net income per share
|
$
|
0.13
|
● |
1 percent convertible senior notes;
|
● |
2¾ percent convertible senior notes;
|
● |
Dilutive stock options;
|
● |
Unvested restricted stock units; and
|
● |
Employee Stock Purchase Plan, or ESPP.
|
Nine months ended September 30, 2017
|
Income
(Numerator)
|
Shares
(Denominator)
|
Per-Share
Amount
|
|||||||||
Net income available to Ionis common stockholders
|
$
|
16,321
|
123,746
|
$
|
0.13
|
|||||||
Effect of dilutive securities:
|
||||||||||||
Shares issuable upon exercise of stock options
|
—
|
1,658
|
||||||||||
Shares issuable upon restricted stock award issuance
|
—
|
430
|
||||||||||
Shares issuable related to our ESPP
|
—
|
24
|
||||||||||
Income available to Ionis common stockholders, plus assumed conversions
|
$
|
16,321
|
125,858
|
$
|
0.13
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Beginning balance accumulated other comprehensive loss
|
$
|
(32,637
|
)
|
$
|
(30,372
|
)
|
$
|
(31,759
|
)
|
$
|
(30,358
|
)
|
||||
Unrealized gains (losses) on securities (1)
|
133
|
215
|
(834
|
)
|
610
|
|||||||||||
Amounts reclassified from accumulated other comprehensive loss
|
—
|
—
|
—
|
(374
|
)
|
|||||||||||
Currency translation adjustment
|
(28
|
)
|
(42
|
)
|
61
|
(77
|
)
|
|||||||||
Net current period other comprehensive income (loss)
|
105
|
173
|
(773
|
)
|
159
|
|||||||||||
Ending balance accumulated other comprehensive loss
|
$
|
(32,532
|
)
|
$
|
(30,199
|
)
|
$
|
(32,532
|
)
|
$
|
(30,199
|
)
|
(1) |
There was no income tax expense or benefit related to elements of other comprehensive income (loss) for the three and nine months ended September 30, 2018 and 2017.
|
Nine Months Ended
September 30,
|
|||||
2018
|
2017
|
||||
Risk-free interest rate
|
2.3%
|
1.8%
|
|||
Dividend yield
|
0.0%
|
0.0%
|
|||
Volatility
|
63.1%
|
66.1%
|
|||
Expected life
|
4.6 years
|
4.5 years
|
Nine Months Ended
September 30,
|
|||||
2018
|
2017
|
||||
Risk-free interest rate
|
2.8 %
|
2.2 %
|
|||
Dividend yield
|
0.0 %
|
0.0 %
|
|||
Volatility
|
61.5 %
|
61.2 %
|
|||
Expected life
|
6.6 years
|
6.6 years
|
Nine Months Ended
September 30,
|
|||||
2018
|
2017
|
||||
Risk-free interest rate
|
1.8%
|
0.8%
|
|||
Dividend yield
|
0.0%
|
0.0%
|
|||
Volatility
|
47.3%
|
59.9%
|
|||
Expected life
|
6 months
|
6 months
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Research, development and patent
|
$
|
18,780
|
$
|
16,181
|
$
|
57,698
|
$
|
48,443
|
||||||||
Selling, general and administrative
|
16,103
|
5,291
|
39,512
|
15,199
|
||||||||||||
Total non-cash stock-based compensation expense
|
$
|
34,883
|
$
|
21,472
|
$
|
97,210
|
$
|
63,642
|
One year or less
|
80%
|
After one year but within two years
|
15%
|
After two years but within three years
|
5%
|
Total
|
100%
|
Gross Unrealized
|
||||||||||||||||
September 30, 2018
|
Cost
(1)
|
Gains
|
Losses
|
Estimated Fair Value
|
||||||||||||
Available-for-sale securities:
|
||||||||||||||||
Corporate debt securities (2)
|
$
|
841,397
|
$
|
23
|
$
|
(1,264
|
)
|
$
|
840,156
|
|||||||
Debt securities issued by U.S. government agencies
|
143,008
|
2
|
(169
|
)
|
142,841
|
|||||||||||
Debt securities issued by the U.S. Treasury (2)
|
154,280
|
—
|
(89
|
)
|
154,191
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (2)
|
49,873
|
—
|
(330
|
)
|
49,543
|
|||||||||||
Total securities with a maturity of one year or less
|
1,188,558
|
25
|
(1,852
|
)
|
1,186,731
|
|||||||||||
Corporate debt securities
|
240,208
|
16
|
(1,420
|
)
|
238,804
|
|||||||||||
Debt securities issued by U.S. government agencies
|
32,435
|
—
|
(109
|
)
|
32,326
|
|||||||||||
Debt securities issued by the U.S. Treasury
|
9,872
|
—
|
(10
|
)
|
9,862
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
31,666
|
—
|
(551
|
)
|
31,115
|
|||||||||||
Total securities with a maturity of more than one year
|
314,181
|
16
|
(2,090
|
)
|
312,107
|
|||||||||||
Total available-for-sale securities
|
$
|
1,502,739
|
$
|
41
|
$
|
(3,942
|
)
|
$
|
1,498,838
|
Gross Unrealized
|
||||||||||||||||
December 31, 2017
|
Cost
(1)
|
Gains
|
Losses
|
Estimated Fair Value
|
||||||||||||
Available-for-sale securities:
|
||||||||||||||||
Corporate debt securities
|
$
|
500,599
|
$
|
2
|
$
|
(752
|
)
|
$
|
499,849
|
|||||||
Debt securities issued by U.S. government agencies
|
83,926
|
—
|
(212
|
)
|
83,714
|
|||||||||||
Debt securities issued by the U.S. Treasury
|
29,428
|
—
|
(17
|
)
|
29,411
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (2)
|
29,240
|
4
|
(122
|
)
|
29,122
|
|||||||||||
Total securities with a maturity of one year or less
|
643,193
|
6
|
(1,103
|
)
|
642,096
|
|||||||||||
Corporate debt securities
|
148,663
|
8
|
(1,059
|
)
|
147,612
|
|||||||||||
Debt securities issued by U.S. government agencies
|
52,779
|
—
|
(168
|
)
|
52,611
|
|||||||||||
Debt securities issued by the U.S. Treasury
|
1,409
|
—
|
(2
|
)
|
1,407
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
65,550
|
—
|
(740
|
)
|
64,810
|
|||||||||||
Total securities with a maturity of more than one year
|
268,401
|
8
|
(1,969
|
)
|
266,440
|
|||||||||||
Total available-for-sale securities
|
$
|
911,594
|
$
|
14
|
$
|
(3,072
|
)
|
$
|
908,536
|
(1) |
Our available-for-sale securities are held at amortized cost.
|
(2) |
Includes investments classified as cash equivalents on our condensed consolidated balance sheet.
|
Less than 12 Months of
Temporary Impairment
|
More than 12 Months of
Temporary Impairment
|
Total Temporary
Impairment
|
||||||||||||||||||||||||||
(In thousands)
|
Number of
Investments
|
Estimated
Fair Value
|
Unrealized
Losses
|
Estimated
Fair Value
|
Unrealized
Losses
|
Estimated
Fair Value
|
Unrealized
Losses
|
|||||||||||||||||||||
Corporate debt securities
|
495
|
$
|
889,172
|
$
|
(1,687
|
)
|
$
|
83,706
|
$
|
(997
|
)
|
$
|
972,878
|
$
|
(2,684
|
)
|
||||||||||||
Debt securities issued by U.S. government agencies
|
51
|
132,231
|
(139
|
)
|
26,862
|
(139
|
)
|
159,093
|
(278
|
)
|
||||||||||||||||||
Debt securities issued by the U.S. Treasury
|
32
|
164,053
|
(99
|
)
|
—
|
—
|
164,053
|
(99
|
)
|
|||||||||||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
48
|
25,687
|
(191
|
)
|
51,747
|
(690
|
)
|
77,434
|
(881
|
)
|
||||||||||||||||||
Total temporarily impaired securities
|
626
|
$
|
1,211,143
|
$
|
(2,116
|
)
|
$
|
162,315
|
$
|
(1,826
|
)
|
$
|
1,373,458
|
$
|
(3,942
|
)
|
At
September 30, 2018
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
||||||||||
Cash equivalents (1)
|
$
|
395,649
|
$
|
395,649
|
$
|
—
|
||||||
Corporate debt securities (2)
|
1,078,960
|
—
|
1,078,960
|
|||||||||
Debt securities issued by U.S. government agencies (3)
|
175,167
|
—
|
175,167
|
|||||||||
Debt securities issued by the U.S. Treasury (3)
|
164,053
|
164,053
|
—
|
|||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (3)
|
80,658
|
—
|
80,658
|
|||||||||
Total
|
$
|
1,894,487
|
$
|
559,702
|
$
|
1,334,785
|
At
December 31, 2017
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
||||||||||
Cash equivalents (1)
|
$
|
86,262
|
$
|
86,262
|
$
|
—
|
||||||
Corporate debt securities (3)
|
647,461
|
—
|
647,461
|
|||||||||
Debt securities issued by U.S. government agencies (3)
|
136,325
|
—
|
136,325
|
|||||||||
Debt securities issued by the U.S. Treasury (3)
|
30,818
|
30,818
|
—
|
|||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (4)
|
93,932
|
—
|
93,932
|
|||||||||
Total
|
$
|
994,798
|
$
|
117,080
|
$
|
877,718
|
(1) |
Included in cash and cash equivalents on our condensed consolidated balance sheet.
|
(2) |
At September 30, 2018, $19.7 million was included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet.
|
(3) |
Included in short-term investments on our condensed consolidated balance sheet.
|
(4) |
At December 31, 2017, $3.5 million was included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet.
|
Beginning balance of Level 3 instruments at January 1, 2017
|
$
|
—
|
||
Value of the potential premium we would have received from Novartis at inception of the SPA (January 2017)
|
5,035
|
|||
Recurring fair value adjustment during the nine months ended September 30, 2017
|
(5,035
|
)
|
||
Ending balance of Level 3 instruments at September 30, 2017
|
$
|
—
|
(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.
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
SPINRAZA royalties (commercial revenue)
|
$
|
70.0
|
$
|
32.9
|
$
|
167.7
|
$
|
60.5
|
||||||||
R&D revenue
|
34.8
|
54.9
|
66.9
|
137.1
|
||||||||||||
Total revenue from our relationship with Biogen
|
104.8
|
87.8
|
234.6
|
197.6
|
||||||||||||
Percentage of total revenue
|
72
|
%
|
74
|
%
|
58
|
%
|
57
|
%
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
R&D revenue
|
$
|
14.2
|
$
|
4.8
|
$
|
86.5
|
$
|
14.8
|
||||||||
Percentage of total revenue
|
10
|
%
|
4
|
%
|
21
|
%
|
4
|
%
|
● |
We recognized $91.2 million for the exclusive license of IONIS-FXI
Rx
in May 2015 because Bayer
had full use of the license without any continuing involvement from us
.
|
● |
We recognized $4.3 million for the R&D services for IONIS-FXI
Rx
over the period of our performance, which ended in November 2016.
|
● |
We allocated $4.5 million for API, which we are recognizing into revenue as we deliver the API.
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
R&D revenue
|
$
|
1.9
|
$
|
0.4
|
$
|
3.3
|
$
|
66.0
|
||||||||
Percentage of total revenue
|
1
|
%
|
0
|
%
|
1
|
%
|
19
|
%
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
R&D revenue
|
$
|
0.9
|
$
|
3.4
|
$
|
6.6
|
$
|
18.1
|
||||||||
Percentage of total revenue
|
1
|
%
|
3
|
%
|
2
|
%
|
5
|
%
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
R&D revenue
|
$
|
1.8
|
$
|
4.5
|
$
|
5.4
|
$
|
5.9
|
||||||||
Percentage of total revenue
|
1
|
%
|
4
|
%
|
1
|
%
|
2
|
%
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
R&D revenue
|
$
|
0.1
|
$
|
4.6
|
$
|
1.5
|
$
|
14.4
|
||||||||
Percentage of total revenue
|
0
|
%
|
4
|
%
|
0
|
%
|
4
|
%
|
● |
R&D services for AKCEA-APO(a)-L
Rx
;
|
● |
R&D services for AKCEA-APOCIII-L
Rx
;
|
● |
API for AKCEA-APO(a)-L
Rx
; and
|
● |
API for AKCEA-APOCIII-L
Rx
.
|
● |
$75 million from the upfront payment;
|
● |
$28.4 million for the premium paid by Novartis for its purchase of our common stock at a premium in the first quarter of 2017; and
|
● |
$5.0 million for the potential premium Novartis would have paid if they purchased our common stock in the future.
|
● |
$64.0 million for the R&D services for
AKCEA-APO(a)-L
Rx
;
|
● |
$40.1 million for the R&D services for
AKCEA-APOCIII-L
Rx
;
|
● |
$1.5
million for the delivery of AKCEA-APO(a)-L
Rx
API; and
|
● |
$2.8
million for the delivery of AKCEA-APOCIII-L
Rx
API.
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
R&D revenue
|
$
|
7.2
|
$
|
9.9
|
$
|
42.7
|
$
|
21.7
|
||||||||
Percentage of total revenue
|
5
|
%
|
8
|
%
|
10
|
%
|
6
|
%
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
R&D revenue
|
$
|
12.0
|
$
|
0.0
|
$
|
12.0
|
$
|
0.0
|
||||||||
Percentage of total revenue
|
8
|
%
|
—
|
3
|
%
|
—
|
Three Months Ended September 30, 2018
|
Ionis Core
|
Akcea Therapeutics
|
Elimination of
Intercompany Activity
|
Total
|
||||||||||||
Revenue:
|
||||||||||||||||
Commercial revenue:
|
||||||||||||||||
SPINRAZA royalties
|
$
|
70,010
|
$
|
—
|
$
|
—
|
$
|
70,010
|
||||||||
Licensing and other royalty revenue
|
7,946
|
12,000
|
(7,200
|
)
|
12,746
|
|||||||||||
Total commercial revenue
|
77,956
|
12,000
|
(7,200
|
)
|
82,756
|
|||||||||||
R&D revenue under collaborative agreements
|
100,105
|
7,241
|
(44,707
|
)
|
62,639
|
|||||||||||
Total segment revenue
|
$
|
178,061
|
$
|
19,241
|
$
|
(51,907
|
)
|
$
|
145,395
|
|||||||
Total operating expenses
|
$
|
87,664
|
$
|
84,249
|
$
|
(7,946
|
)
|
$
|
163,967
|
|||||||
Income (loss) from operations
|
$
|
90,397
|
$
|
(65,008
|
)
|
$
|
(43,961
|
)
|
$
|
(18,572
|
)
|
Three Months Ended September 30, 2017 (as revised)
|
Ionis Core
|
Akcea Therapeutics
|
Elimination of
Intercompany Activity
|
Total
|
||||||||||||
Revenue:
|
||||||||||||||||
Commercial revenue:
|
||||||||||||||||
SPINRAZA royalties
|
$
|
32,890
|
$
|
—
|
$
|
—
|
$
|
32,890
|
||||||||
Licensing and other royalty revenue
|
1,727
|
—
|
—
|
1,727
|
||||||||||||
Total commercial revenue
|
34,617
|
—
|
—
|
34,617
|
||||||||||||
R&D revenue under collaborative agreements
|
73,791
|
9,906
|
—
|
83,697
|
||||||||||||
Total segment revenue
|
$
|
108,408
|
$
|
9,906
|
$
|
—
|
$
|
118,314
|
||||||||
Total operating expenses
|
$
|
81,019
|
$
|
26,013
|
$
|
(30
|
)
|
$
|
107,002
|
|||||||
Income (loss) from operations
|
$
|
27,389
|
$
|
(16,107
|
)
|
$
|
30
|
$
|
11,312
|
Nine Months Ended September 30, 2018
|
Ionis Core
|
Akcea Therapeutics
|
Elimination of
Intercompany Activity
|
Total
|
||||||||||||
Revenue:
|
||||||||||||||||
Commercial revenue:
|
||||||||||||||||
SPINRAZA royalties
|
$
|
167,743
|
$
|
—
|
$
|
—
|
$
|
167,743
|
||||||||
Licensing and other royalty revenue
|
9,432
|
12,000
|
(7,200
|
)
|
14,232
|
|||||||||||
Total commercial revenue
|
177,175
|
12,000
|
(7,200
|
)
|
181,975
|
|||||||||||
R&D revenue under collaborative agreements
|
232,850
|
42,670
|
(49,936
|
)
|
225,584
|
|||||||||||
Total segment revenue
|
$
|
410,025
|
$
|
54,670
|
$
|
(57,136
|
)
|
$
|
407,559
|
|||||||
Total operating expenses
|
$
|
279,084
|
$
|
213,428
|
$
|
(12,796
|
)
|
$
|
479,716
|
|||||||
Income (loss) from operations
|
$
|
130,941
|
$
|
(158,758
|
)
|
$
|
(44,340
|
)
|
$
|
(72,157
|
)
|
Nine Months Ended September 30, 2017 (as revised)
|
Ionis Core
|
Akcea Therapeutics
|
Elimination of
Intercompany Activity
|
Total
|
||||||||||||
Revenue:
|
||||||||||||||||
Commercial revenue:
|
||||||||||||||||
SPINRAZA royalties
|
$
|
60,467
|
$
|
—
|
$
|
—
|
$
|
60,467
|
||||||||
Licensing and other royalty revenue
|
5,639
|
—
|
—
|
5,639
|
||||||||||||
Total commercial revenue
|
66,106
|
—
|
—
|
66,106
|
||||||||||||
R&D revenue under collaborative agreements
|
312,976
|
21,712
|
(54,407
|
)
|
280,281
|
|||||||||||
Total segment revenue
|
$
|
379,082
|
$
|
21,712
|
$
|
(54,407
|
)
|
$
|
346,387
|
|||||||
Total operating expenses
|
$
|
242,753
|
$
|
120,884
|
$
|
(54,497
|
)
|
$
|
309,140
|
|||||||
Income (loss) from operations
|
$
|
136,329
|
$
|
(99,172
|
)
|
$
|
90
|
$
|
37,247
|
Total Assets
|
Ionis Core
|
Akcea Therapeutics
|
Elimination of
Intercompany Activity
|
Total
|
||||||||||||
September 30, 2018
|
$
|
2,446,425
|
$
|
379,128
|
$
|
(577,641
|
)
|
$
|
2,247,913
|
|||||||
December 31, 2017 (as revised)
|
$
|
1,342,578
|
$
|
268,804
|
$
|
(288,608
|
)
|
$
|
1,322,774
|
ITEM 2 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
September 30,
|
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Total revenue
|
$
|
145,395
|
$
|
118,314
|
$
|
407,559
|
$
|
346,387
|
||||||||
Total operating expenses
|
$
|
163,967
|
$
|
107,002
|
$
|
479,716
|
$
|
309,140
|
||||||||
Income (loss) from operations
|
$
|
(18,572
|
)
|
$
|
11,312
|
$
|
(72,157
|
)
|
$
|
37,247
|
||||||
Net loss
|
$
|
(20,365
|
)
|
$
|
(7,493
|
)
|
$
|
(87,747
|
)
|
$
|
(1,616
|
)
|
||||
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(4,559
|
)
|
$
|
(2,611
|
)
|
$
|
(46,335
|
)
|
$
|
3,266
|
|
SPINRAZA
–
the first and only approved treatment for people with spinal muscular atrophy
|
o |
SPINRAZA sales continued to grow in the third quarter, both in the U.S. and ex-U.S., with global sales of more than $1 billion for year-to-date 2018, as reported by Biogen
|
o |
Nearly 6,000 SMA patients were on SPINRAZA as of the third quarter
|
o |
In the U.S., the number of adult patients on therapy grew by over 20 percent compared to the second quarter. Adult SMA patients, which represent the largest and most undertreated patient segment, accounted for more than 50 percent of start forms in the third quarter
|
o |
Access outside the U.S. expanded with formal reimbursement in 28 markets and continued revenue growth in the EU, Asia Pacific and Latin America
|
|
TEGSEDI (inotersen) – launched in multiple markets for the treatment of polyneuropathy of hATTR in adult patients
|
o |
TEGSEDI approved in the U.S., EU and Canada
|
o |
Commercial patients in Germany on TEGSEDI
|
o |
TEGSEDI prescriptions received in the U.S.
|
|
WAYLIVRA (volanesorsen) – under regulatory review for the treatment of people living with FCS
|
o |
Preparing for launch in the EU following approval
|
o |
Planning to confirm a path forward in the U.S. and Canada
|
|
We and Akcea reported positive top-line data from a Phase 2 study of AKCEA-APO(a)-L
Rx
in people with high levels of Lp(a) and established cardiovascular disease demonstrating robust target reductions and a favorable safety and tolerability profile
|
|
We and Roche entered a new collaboration to develop IONIS-FB-L
Rx
for the treatment of people with complement-mediated diseases. We received a $75 million upfront payment and will be eligible for development, regulatory and sales milestone payments and license fees of up to $684 million plus royalties of up to 20 percent on commercial sales
|
|
Positive Phase 1b/2 data for danvatirsen, in combination with durvalumab was presented at the European Society for Medical Oncology, or ESMO, 2018 Congress, demonstrating a response rate approximately double that of durvalumab alone, based on previous studies in patients with refractory head and neck cancer. We earned a $17.5 million milestone payment because AstraZeneca is advancing the program
|
|
We completed enrollment in a Phase 2b study of IONIS-FXI
Rx
in patients with end-stage renal disease on dialysis, with data planned for mid-2019
|
|
We or our partners initiated clinical studies with IONIS-GHR-L
Rx
(Phase 2), IONIS-C9
Rx
(Phase 1/2), IONIS-FXI-L
Rx
and IONIS-AZ4-2.5-L
Rx
(Phase 1)
|
|
We earned a $10 million milestone payment from AstraZeneca for advancing an undisclosed oncology program into development
|
|
We appointed Dr. Michael Hayden and Mr. Peter N. Reikes to our Board of Directors
|
|
Assessing the propriety of revenue recognition and associated deferred revenue;
|
|
Determining the proper valuation of investments in marketable securities;
|
|
Determining the appropriate cost estimates for unbilled preclinical studies and clinical development activities;
|
|
Estimating the impact of the Tax Act and our net deferred income tax asset valuation allowance;
|
|
Determining the fair value of convertible debt without the conversion feature; and
|
|
Valuing premiums received under our collaborations
|
|
Assessing the propriety of revenue recognition and associated deferred revenue.
|
At December 31, 2017
|
||||||||||||
As Previously
Reported under
Topic 605
|
Topic 606
Adjustment
|
As Revised
|
||||||||||
Current portion of deferred revenue
|
$
|
106,465
|
$
|
18,871
|
$
|
125,336
|
||||||
Long-term portion of deferred revenue
|
$
|
72,708
|
$
|
35,318
|
$
|
108,026
|
||||||
Accumulated deficit
|
$
|
(1,187,398
|
)
|
$
|
(53,636
|
)
|
$
|
(1,241,034
|
)
|
|||
Noncontrolling interest in Akcea Therapeutics, Inc.
|
$
|
87,847
|
$
|
(3,580
|
)
|
$
|
84,267
|
|||||
Total stockholders’ equity
|
$
|
418,719
|
$
|
(53,439
|
)
|
$
|
365,280
|
Three Months Ended September 30, 2017
|
||||||||||||
As Previously
Reported under
Topic 605
|
Topic 606
Adjustment
|
As Revised
|
||||||||||
Revenue:
|
||||||||||||
Commercial revenue:
|
||||||||||||
SPINRAZA royalties
|
$
|
32,890
|
$
|
—
|
$
|
32,890
|
||||||
Licensing and other royalty revenue
|
879
|
848
|
1,727
|
|||||||||
Total commercial revenue
|
33,769
|
848
|
34,617
|
|||||||||
Research and development revenue under collaborative agreements
|
87,142
|
(3,445
|
)
|
83,697
|
||||||||
Total revenue
|
$
|
120,911
|
$
|
(2,597
|
)
|
$
|
118,314
|
|||||
Income (loss) from operations
|
$
|
13,909
|
$
|
(2,597
|
)
|
$
|
11,312
|
|||||
Net income (loss)
|
$
|
(4,896
|
)
|
$
|
(2,597
|
)
|
$
|
(7,493
|
)
|
|||
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(976
|
)
|
$
|
(1,635
|
)
|
$
|
(2,611
|
)
|
|||
Net income (loss) per share, basic and diluted
|
$
|
0.00
|
$
|
(0.02
|
)
|
$
|
(0.02
|
)
|
Nine Months Ended September 30, 2017
|
||||||||||||
As Previously
Reported under
Topic 605
|
Topic 606
Adjustment
|
As Revised
|
||||||||||
Revenue:
|
||||||||||||
Commercial revenue:
|
||||||||||||
SPINRAZA royalties
|
$
|
60,467
|
$
|
—
|
$
|
60,467
|
||||||
Licensing and other royalty revenue
|
4,983
|
656
|
5,639
|
|||||||||
Total commercial revenue
|
65,450
|
656
|
66,106
|
|||||||||
Research and development revenue under collaborative agreements
|
269,917
|
10,364
|
280,281
|
|||||||||
Total revenue
|
$
|
335,367
|
$
|
11,020
|
$
|
346,387
|
||||||
Income from operations
|
$
|
26,227
|
$
|
11,020
|
$
|
37,247
|
||||||
Net income (loss)
|
$
|
(12,636
|
)
|
$
|
11,020
|
$
|
(1,616
|
)
|
||||
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(8,716
|
)
|
$
|
11,982
|
$
|
3,266
|
|||||
Net income (loss) per share, basic
|
$
|
0.02
|
$
|
0.11
|
$
|
0.13
|
||||||
Net income (loss) per share, diluted
|
$
|
0.02
|
$
|
0.11
|
$
|
0.13
|
Nine Months Ended September 30, 2017
|
||||||||||||
As Previously
Reported under
Topic 605
|
Topic 606
Adjustment
|
As Revised
|
||||||||||
Net income (loss)
|
$
|
(12,636
|
)
|
$
|
11,020
|
$
|
(1,616
|
)
|
||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
||||||||||||
Deferred contract revenue
|
$
|
42,091
|
$
|
(11,020
|
)
|
$
|
31,071
|
|||||
Cash and cash equivalents at beginning of period
|
$
|
84,685
|
$
|
—
|
$
|
84,685
|
||||||
Cash and cash equivalents at end of period
|
$
|
159,184
|
$
|
—
|
$
|
159,184
|
● |
A change in how we recognize milestone payments:
Topic 606 requires us to amortize more of the milestone payments we achieve, rather than recognizing the milestone payments in full in the period in which we achieved the milestone event as we did under Topic 605. This change resulted in an increase of $0.5 million and $27.9 million for the three and nine months ended September 30, 2017, respectively.
|
● |
A change in how we calculate revenue for payments we are recognizing into revenue over time:
Under Topic 605, we amortized payments into revenue evenly over the period of our obligations. When we made a change to our estimated completion period, we recognized that change on a prospective basis. Under Topic 606, we are required to use an input method to determine the amount we amortize each reporting period. Each period, we review our “inputs” such as our level of effort expended, including the time we estimate it will take us to complete the activities, or costs incurred relative to the total expected inputs to satisfy the performance obligation. For certain collaborations, such as Bayer, Janssen and Novartis, the input method resulted in a change to the revenue we had previously recognized using a straight-line amortization method.
This change resulted in a decrease of $4.0 million and $17.5 million for the three and nine months ended September 30, 2017, respectively.
|
1. |
Identify the contract
|
● |
We and our partner approved the contract and we are both committed to perform our obligations;
|
● |
We have identified our rights, our partner’s rights and the payment terms;
|
● |
We have concluded that the contract has commercial substance, meaning that the risk, timing, or amount of our future cash flows is expected to change as a result of the contract; and
|
● |
We believe collectability is probable.
|
2. |
Identify the performance obligations
|
3. |
Determine the transaction price
|
4. |
Allocate the transaction price
|
● |
Estimated future product sales;
|
● |
Estimated royalties on future product sales;
|
● |
Contractual milestone payments;
|
● |
Expenses we expect to incur;
|
● |
Income taxes; and
|
● |
A discount rate.
|
● |
The number of internal hours we estimate 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 API we will use.
|
5. |
Recognize revenue
|
1) |
If the additional goods and/or services are distinct from the other performance obligations in the original agreement; and
|
2) |
If the goods and/or services are at a stand-alone selling price.
|
● |
Whether the agreements were negotiated together with a single objective;
|
● |
Whether the amount of consideration in one contract depends on the price or performance of the other agreement; or
|
● |
Whether the goods and/or services promised under the agreements are a single performance obligation.
|
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
||||||||||||||
|
2018
|
2017
|
2018
|
2017
|
||||||||||||
Revenue:
|
(as revised)
|
(as revised)
|
||||||||||||||
Commercial revenue:
|
||||||||||||||||
SPINRAZA royalties
|
$
|
70,010
|
$
|
32,890
|
$
|
167,743
|
$
|
60,467
|
||||||||
Licensing and other royalty revenue
|
12,746
|
1,727
|
14,232
|
5,639
|
||||||||||||
Total commercial revenue
|
82,756
|
34,617
|
181,975
|
66,106
|
||||||||||||
R&D revenue:
|
||||||||||||||||
Amortization from upfront payments
|
31,066
|
22,892
|
92,185
|
70,145
|
||||||||||||
Milestone payments
|
26,194
|
56,409
|
44,583
|
135,129
|
||||||||||||
License fees
|
1,649
|
424
|
64,227
|
64,942
|
||||||||||||
Other services
|
3,730
|
3,972
|
24,589
|
10,065
|
||||||||||||
Total R&D revenue
|
62,639
|
83,697
|
225,584
|
280,281
|
||||||||||||
Total revenue
|
$
|
145,395
|
$
|
118,314
|
$
|
407,559
|
$
|
346,387
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Ionis Core
|
$
|
65,512
|
$
|
64,239
|
$
|
213,114
|
$
|
190,924
|
||||||||
Akcea Therapeutics
|
71,518
|
21,321
|
182,188
|
109,071
|
||||||||||||
Elimination of intercompany activity
|
(7,946
|
)
|
(30
|
)
|
(12,796
|
)
|
(54,497
|
)
|
||||||||
Subtotal
|
129,084
|
85,530
|
382,506
|
245,498
|
||||||||||||
Non-cash compensation expense related to equity awards
|
34,883
|
21,472
|
97,210
|
63,642
|
||||||||||||
Total operating expenses
|
$
|
163,967
|
$
|
107,002
|
$
|
479,716
|
$
|
309,140
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Research, development and patent expenses
|
$
|
76,475
|
$
|
64,033
|
$
|
243,455
|
$
|
197,915
|
||||||||
Non-cash compensation expense related to equity awards
|
18,780
|
16,181
|
57,698
|
48,443
|
||||||||||||
Total research, development and patent expenses
|
$
|
95,255
|
$
|
80,214
|
$
|
301,153
|
$
|
246,358
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Ionis Core
|
$
|
49,452
|
$
|
48,776
|
$
|
158,860
|
$
|
157,363
|
||||||||
Akcea Therapeutics
|
27,068
|
15,287
|
89,940
|
95,049
|
||||||||||||
Elimination of intercompany activity
|
(45
|
)
|
(30
|
)
|
(5,345
|
)
|
(54,497
|
)
|
||||||||
Subtotal
|
76,475
|
64,033
|
243,455
|
197,915
|
||||||||||||
Non-cash compensation expense related to equity awards
|
18,780
|
16,181
|
57,698
|
48,443
|
||||||||||||
Total research, development and patent expenses
|
$
|
95,255
|
$
|
80,214
|
$
|
301,153
|
$
|
246,358
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Antisense drug discovery expenses, excluding non-cash compensation expense related to equity awards
|
$
|
14,475
|
$
|
14,071
|
$
|
41,970
|
$
|
39,831
|
||||||||
Non-cash compensation expense related to equity awards
|
4,379
|
3,935
|
13,204
|
11,644
|
||||||||||||
Total antisense drug discovery expenses
|
$
|
18,854
|
$
|
18,006
|
$
|
55,174
|
$
|
51,475
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
SPINRAZA
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
10,561
|
||||||||
WAYLIVRA
|
3,469
|
4,401
|
15,919
|
14,603
|
||||||||||||
TEGSEDI
|
3,373
|
4,230
|
14,404
|
16,340
|
||||||||||||
Other antisense development projects
|
21,413
|
11,183
|
62,580
|
32,852
|
||||||||||||
Development overhead expenses
|
17,648
|
13,796
|
55,286
|
36,635
|
||||||||||||
Total antisense drug development, excluding non-cash compensation expense related to equity awards
|
45,903
|
33,610
|
148,189
|
110,991
|
||||||||||||
Non-cash compensation expense related to equity awards
|
8,434
|
6,968
|
25,922
|
20,980
|
||||||||||||
Total antisense drug development expenses
|
$
|
54,337
|
$
|
40,578
|
$
|
174,111
|
$
|
131,971
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Ionis Core
|
$
|
20,821
|
$
|
20,521
|
$
|
71,767
|
$
|
74,655
|
||||||||
Akcea Therapeutics
|
25,082
|
13,089
|
76,422
|
84,730
|
||||||||||||
Elimination of intercompany activity
|
—
|
—
|
—
|
(48,394
|
)
|
|||||||||||
Subtotal
|
45,903
|
33,610
|
148,189
|
110,991
|
||||||||||||
Non-cash compensation expense related to equity awards
|
8,434
|
6,968
|
25,922
|
20,980
|
||||||||||||
Total antisense drug development expenses
|
$
|
54,337
|
$
|
40,578
|
$
|
174,111
|
$
|
131,971
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Manufacturing and operations expenses, excluding non-cash compensation expense related to equity awards
|
$
|
8,085
|
$
|
9,167
|
$
|
30,083
|
$
|
26,260
|
||||||||
Non-cash compensation expense related to equity awards
|
2,236
|
1,693
|
7,024
|
5,143
|
||||||||||||
Total manufacturing and operations expenses
|
$
|
10,321
|
$
|
10,860
|
$
|
37,107
|
$
|
31,403
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Ionis Core
|
$
|
6,931
|
$
|
7,743
|
$
|
24,659
|
$
|
23,575
|
||||||||
Akcea Therapeutics
|
1,154
|
1,424
|
10,653
|
8,698
|
||||||||||||
Elimination of intercompany activity
|
—
|
—
|
(5,229
|
)
|
(6,013
|
)
|
||||||||||
Subtotal
|
8,085
|
9,167
|
30,083
|
26,260
|
||||||||||||
Non-cash compensation expense related to equity awards
|
2,236
|
1,693
|
7,024
|
5,143
|
||||||||||||
Total manufacturing and operations expenses
|
$
|
10,321
|
$
|
10,860
|
$
|
37,107
|
$
|
31,403
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Personnel costs
|
$
|
3,259
|
$
|
2,608
|
$
|
9,456
|
$
|
8,174
|
||||||||
Occupancy
|
2,379
|
2,132
|
6,281
|
6,086
|
||||||||||||
Patent expenses
|
513
|
465
|
1,745
|
1,459
|
||||||||||||
Depreciation and amortization
|
115
|
51
|
315
|
175
|
||||||||||||
Insurance
|
364
|
480
|
1,991
|
1,153
|
||||||||||||
Other
|
1,382
|
1,449
|
3,425
|
3,786
|
||||||||||||
Total R&D support expenses, excluding non-cash compensation expense related to equity awards
|
8,012
|
7,185
|
23,213
|
20,833
|
||||||||||||
Non-cash compensation expense related to equity awards
|
3,731
|
3,585
|
11,548
|
10,676
|
||||||||||||
Total R&D support expenses
|
$
|
11,743
|
$
|
10,770
|
$
|
34,761
|
$
|
31,509
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Ionis Core
|
$
|
7,225
|
$
|
6,441
|
$
|
20,464
|
$
|
19,303
|
||||||||
Akcea Therapeutics
|
832
|
774
|
2,865
|
1,620
|
||||||||||||
Elimination of intercompany activity
|
(45
|
)
|
(30
|
)
|
(116
|
)
|
(90
|
)
|
||||||||
Subtotal
|
8,012
|
7,185
|
23,213
|
20,833
|
||||||||||||
Non-cash compensation expense related to equity awards
|
3,731
|
3,585
|
11,548
|
10,676
|
||||||||||||
Total R&D support expenses
|
$
|
11,743
|
$
|
10,770
|
$
|
34,761
|
$
|
31,509
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Selling, general and administrative expenses, excluding non-cash compensation expense related to equity awards
|
$
|
52,609
|
$
|
21,497
|
$
|
139,051
|
$
|
47,583
|
||||||||
Non-cash compensation expense related to equity awards
|
16,103
|
5,291
|
39,512
|
15,199
|
||||||||||||
Total selling, general and administrative expenses
|
$
|
68,712
|
$
|
26,788
|
$
|
178,563
|
$
|
62,782
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Ionis Core
|
$
|
16,060
|
$
|
15,463
|
$
|
54,254
|
$
|
33,561
|
||||||||
Akcea Therapeutics
|
44,450
|
6,034
|
92,248
|
14,022
|
||||||||||||
Elimination of intercompany activity
|
(7,901
|
)
|
—
|
(7,451
|
)
|
—
|
||||||||||
Subtotal
|
52,609
|
21,497
|
139,051
|
—
|
||||||||||||
Non-cash compensation expense related to equity awards
|
16,103
|
5,291
|
39,512
|
15,199
|
||||||||||||
Total selling, general and administrative expenses
|
$
|
68,712
|
$
|
26,788
|
$
|
178,563
|
$
|
62,782
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Development and patent expenses
|
$
|
27,068
|
$
|
15,287
|
$
|
89,940
|
$
|
95,049
|
||||||||
Selling, general and administrative expenses
|
44,450
|
6,034
|
92,248
|
14,022
|
||||||||||||
Total operating expenses, excluding non-cash compensation expense related to equity awards
|
71,518
|
21,321
|
182,188
|
109,071
|
||||||||||||
Non-cash compensation expense related to equity awards
|
12,731
|
4,692
|
31,240
|
11,814
|
||||||||||||
Total Akcea Therapeutics operating expenses
|
$
|
84,249
|
$
|
26,013
|
$
|
213,428
|
$
|
120,885
|
Three Months Ended
September 30,
|
Nine Months Ended
September 30,
|
|||||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||||
Convertible notes:
|
||||||||||||||||
Non-cash amortization of the debt discount and debt issuance costs
|
$
|
8,856
|
$
|
8,208
|
$
|
26,072
|
$
|
24,165
|
||||||||
Interest expense payable in cash
|
1,714
|
1,714
|
5,141
|
5,373
|
||||||||||||
Non-cash interest expense for long-term financing liability
|
—
|
308
|
—
|
3,660
|
||||||||||||
Interest on mortgage for primary R&D and manufacturing facilities
|
607
|
505
|
1,802
|
505
|
||||||||||||
Other
|
105
|
90
|
317
|
263
|
||||||||||||
Total interest expense
|
$
|
11,282
|
$
|
10,825
|
$
|
33,332
|
$
|
33,966
|
|
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
|
|||||||||||||||
Convertible senior notes (principal and interest payable)
|
$
|
709.4
|
$
|
6.9
|
$
|
13.7
|
$
|
688.8
|
$
|
—
|
||||||||||
Building mortgage payments
|
$
|
81.4
|
$
|
2.4
|
$
|
4.8
|
$
|
5.9
|
$
|
68.3
|
||||||||||
Financing arrangements (principal and interest payable)
|
$
|
12.8
|
$
|
12.8
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||||||
Other obligations (principal and interest payable)
|
$
|
1.1
|
$
|
0.1
|
$
|
0.1
|
$
|
0.1
|
$
|
0.8
|
||||||||||
Operating leases
|
$
|
26.6
|
$
|
3.1
|
$
|
5.9
|
$
|
5.2
|
$
|
12.4
|
||||||||||
Total
|
$
|
831.3
|
$
|
25.3
|
$
|
24.5
|
$
|
700.0
|
$
|
81.5
|
1 Percent Convertible
Senior Notes
|
||||
Outstanding principal balance
|
$
|
685.5
|
||
Original issue date ($500 million of principal)
|
November 2014
|
|||
Additional issue date ($185.5 million of principal)
|
December 2016
|
|||
Maturity date
|
November 2021
|
|||
Interest rate
|
1 percent
|
|||
Conversion price per share
|
$
|
66.81
|
||
Total shares of common stock subject to conversion
|
10.3
|
(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.
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4. |
CONTROLS AND PROCEDURES
|
ITEM 1. |
LEGAL PROCEEDINGS
|
ITEM 1A. |
RISK FACTORS
|
● |
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;
|
● |
reimbursed more favorably by government and other third-party payors than our drugs;
|
● |
safer than our drugs;
|
● |
more effective than our drugs; or
|
● |
more convenient to use than our drugs.
|
● |
In the United States, TEGSEDI’s label contains a boxed warning for thrombocytopenia and glomerulonephritis,
|
● |
TEGSEDI requires periodic blood and urine monitoring, and
|
● |
in the United States TEGSEDI is available only through a Risk Evaluation and Mitigation Strategy, or REMS, program.
|
● |
fund our development activities for SPINRAZA;
|
● |
seek and obtain regulatory approvals for SPINRAZA; and
|
● |
successfully commercialize SPINRAZA.
|
● |
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;
|
● |
people who enroll in the clinical study may later drop out due to adverse events, a perception they are not benefiting from participating in the study, fatigue with the clinical study process or personal issues;
|
● |
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.
|
● |
successful commercialization for SPINRAZA and TEGSEDI;
|
● |
marketing approvals for WAYLIVRA;
|
● |
the profile and launch timing of our drugs, including WAYLIVRA and TEGSEDI;
|
● |
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; and
|
● |
competing technological and market developments, including the introduction by others of new therapies that address our markets.
|
● |
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 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
ITEM 3. |
DEFAULT UPON SENIOR SECURITIES
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
OTHER INFORMATION
|
ITEM 6. |
EXHIBITS
|
a. |
Exhibits
|
Exhibit Number
|
Description of Document
|
|
Second Amendment to Research Collaboration, Option and License Agreement of December 22, 2014, by and between Ionis Pharmaceuticals, Inc. and Janssen Biotech Inc. Portions of this exhibit have been omitted and separately filed with the SEC.
|
||
Certification by Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
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Certification by Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
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Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101
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The following financial statements from the Ionis Pharmaceuticals, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, formatted in Extensive Business Reporting Language (XBRL): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of operations, (iii) condensed consolidated statements of comprehensive income (loss), (iv) condensed consolidated statements of cash flows and (v) notes to condensed consolidated financial statements (detail tagged).
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* |
This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
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Signatures
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Title
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Date
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/s/ STANLEY T. CROOKE
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Chairman of the Board, President, and Chief Executive Officer
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Stanley T. Crooke, M.D., Ph.D.
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(Principal executive officer)
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November 6, 2018
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/s/ ELIZABETH L. HOUGEN
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Senior Vice President, Finance and Chief Financial Officer
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Elizabeth L. Hougen
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(Principal financial and accounting officer)
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November 6, 2018
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Ionis Pharmaceuticals, Inc.
2855 Gazelle Court
Carlsbad, CA 92010
Attention: Chief Operating Officer
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Ionis Pharmaceuticals, Inc.
2855 Gazelle Court
Carlsbad, CA 92010
Attention: General Counsel
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Re: |
Second Amendment to Research Collaboration, Option and License Agreement of December 22, 2014
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Very truly yours,
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/s/ Catherine Owen
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Catherine Owen
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||
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President, JBI Biotech, Inc.
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AGREED & ACCEPTED:
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/s/ Brett Monia
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Name:
Brett Monia
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Title:
Chief Operating Officer
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Date: August 13, 2018
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Ionis Pharmaceuticals, Inc.
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1. |
I have reviewed this Quarterly Report on Form 10-Q of Ionis Pharmaceuticals, Inc.;
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2. |
Based on my knowledge, this quarterly 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 quarterly report;
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3. |
Based on my knowledge, the condensed consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, condensed consolidated results of operations and condensed consolidated cash flows of the registrant as of, and for, the periods presented in this quarterly report;
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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:
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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;
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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;
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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
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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
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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):
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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
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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.
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Dated: November 6, 2018
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/s/ STANLEY T. CROOKE
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|
Stanley T. Crooke, M.D., Ph.D.
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|
Chief Executive Officer
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|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Ionis Pharmaceuticals, Inc.;
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2. |
Based on my knowledge, this quarterly 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 quarterly report;
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3. |
Based on my knowledge, the condensed consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, condensed consolidated results of operations and condensed consolidated cash flows of the registrant as of, and for, the periods presented in this quarterly 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;
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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;
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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
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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
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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
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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.
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Dated: November 6, 2018
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/s/ ELIZABETH L. HOUGEN
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Elizabeth L. Hougen
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Chief Financial Officer
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1. |
The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2018, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
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2. |
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Periodic Report and the results of operations of the Company for the period covered by the Periodic Report.
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Dated: November 6, 2018
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/s/ STANLEY T. CROOKE
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/s/ ELIZABETH L. HOUGEN
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Stanley T. Crooke, M.D., Ph.D.
|
|
Elizabeth L. Hougen
|
Chief Executive Officer
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|
Chief Financial Officer
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