☒ |
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, California
|
92010
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Title of each class
|
Trading symbol
|
Name of each exchange on which registered
|
||
Common Stock, $.001 Par Value
|
“IONS”
|
The Nasdaq Stock Market LLC
|
Large Accelerated Filer ☒
|
Accelerated Filer ☐
|
Non-accelerated Filer ☐
|
Smaller Reporting Company ☐
|
Emerging Growth Company ☐
|
PART I
|
FINANCIAL INFORMATION
|
|
ITEM 1:
|
Financial Statements:
|
|
Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020 (unaudited) (as revised)
|
3
|
|
Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020 (unaudited) (as revised)
|
4
|
|
Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2021 and 2020 (unaudited) (as revised)
|
5
|
|
Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2021 and 2020 (unaudited) (as revised)
|
6
|
|
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (unaudited) (as revised)
|
7
|
|
Notes to Condensed Consolidated Financial Statements (unaudited)
|
8
|
|
ITEM 2:
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations:
|
|
Overview
|
28
|
|
Results of Operations
|
31
|
|
Liquidity and Capital Resources
|
36
|
|
ITEM 3:
|
Quantitative and Qualitative Disclosures about Market Risk
|
38
|
ITEM 4:
|
Controls and Procedures
|
38
|
PART II
|
OTHER INFORMATION
|
38
|
ITEM 1:
|
Legal Proceedings
|
38
|
ITEM 1A:
|
Risk Factors
|
39
|
ITEM 2:
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
56
|
ITEM 3:
|
Default upon Senior Securities
|
56
|
ITEM 4:
|
Mine Safety Disclosures
|
56
|
ITEM 5:
|
Other Information
|
56
|
ITEM 6:
|
Exhibits
|
56
|
SIGNATURES
|
58
|
March 31,
2021
|
December 31,
2020
|
|||||||
(as revised*)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
414,155
|
$
|
397,664
|
||||
Short-term investments
|
1,405,840
|
1,494,711
|
||||||
Contracts receivable
|
23,397
|
76,204
|
||||||
Inventories
|
22,199
|
21,965
|
||||||
Other current assets
|
123,827
|
140,163
|
||||||
Total current assets
|
1,989,418
|
2,130,707
|
||||||
Property, plant and equipment, net
|
180,413
|
181,077
|
||||||
Patents, net
|
28,795
|
27,937
|
||||||
Deposits and other assets
|
49,925
|
50,034
|
||||||
Total assets
|
$
|
2,248,551
|
$
|
2,389,755
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
9,506
|
$
|
17,199
|
||||
Accrued compensation
|
29,263
|
65,728
|
||||||
Accrued liabilities
|
78,766
|
90,161
|
||||||
Income taxes payable
|
1,326
|
1,324
|
||||||
Current portion of 1 percent convertible senior notes, net
|
61,816
|
308,809
|
||||||
Current portion of long-term obligations
|
7,688
|
7,301
|
||||||
Current portion of deferred contract revenue
|
106,740
|
108,376
|
||||||
Total current liabilities
|
295,105
|
598,898
|
||||||
Long-term deferred contract revenue
|
401,966
|
424,046
|
||||||
0.125 percent convertible senior notes, net
|
540,679
|
540,136
|
||||||
1 percent convertible senior notes, net
|
247,292
|
–
|
||||||
Long-term obligations, less current portion
|
22,943
|
23,409
|
||||||
Long-term mortgage debt
|
60,002
|
59,984
|
||||||
Total liabilities
|
1,567,987
|
1,646,473
|
||||||
Stockholders’ equity:
|
||||||||
Common stock, $0.001 par value; 300,000,000 shares authorized, 140,924,356 and 140,365,594 shares issued and outstanding at March 31, 2021 (unaudited) and December 31, 2020, respectively
|
141
|
140
|
||||||
Additional paid-in capital
|
1,925,801
|
1,895,519
|
||||||
Accumulated other comprehensive loss
|
(24,203
|
)
|
(21,071
|
)
|
||||
Accumulated deficit
|
(1,221,175
|
)
|
(1,131,306
|
)
|
||||
Total stockholders’ equity
|
680,564
|
743,282
|
||||||
Total liabilities and stockholders’ equity
|
$
|
2,248,551
|
$
|
2,389,755
|
* |
We revised our 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted retrospectively. Refer to Note 2, Significant Accounting Policies, for further information.
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
(as revised*)
|
||||||||
Revenue:
|
||||||||
Commercial revenue:
|
||||||||
SPINRAZA royalties
|
$
|
59,986
|
$
|
66,008
|
||||
TEGSEDI and WAYLIVRA revenue, net
|
19,838
|
15,159
|
||||||
Licensing and other royalty revenue
|
4,624
|
2,794
|
||||||
Total commercial revenue
|
84,448
|
83,961
|
||||||
Research and development revenue under collaborative agreements
|
27,159
|
49,406
|
||||||
Total revenue
|
111,607
|
133,367
|
||||||
Expenses:
|
||||||||
Cost of sales
|
2,578
|
2,548
|
||||||
Research, development and patent
|
139,801
|
116,952
|
||||||
Selling, general and administrative
|
61,199
|
74,994
|
||||||
Total operating expenses
|
203,578
|
194,494
|
||||||
Loss from operations
|
(91,971
|
)
|
(61,127
|
)
|
||||
Other income (expense):
|
||||||||
Investment income
|
4,643
|
10,479
|
||||||
Interest expense
|
(2,414
|
)
|
(2,207
|
)
|
||||
Other income (expenses)
|
3
|
(99
|
)
|
|||||
Loss before income tax (expense) benefit
|
(89,739
|
)
|
(52,954
|
)
|
||||
Income tax (expense) benefit
|
(130
|
)
|
3,072
|
|||||
Net loss
|
(89,869
|
)
|
(49,882
|
)
|
||||
Net loss attributable to noncontrolling interest in Akcea Therapeutics, Inc.
|
—
|
10,254
|
||||||
Net loss attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(89,869
|
)
|
$
|
(39,628
|
)
|
||
Basic and diluted net loss per share
|
$
|
(0.64
|
)
|
$
|
(0.28
|
)
|
||
Shares used in computing basic and diluted net loss per share
|
140,770
|
139,429
|
* |
We revised our 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted retrospectively. Refer to Note 2, Significant Accounting Policies, for further information.
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
(as revised*)
|
||||||||
Net loss
|
$
|
(89,869
|
)
|
$
|
(49,882
|
)
|
||
Unrealized losses on debt securities, net of tax
|
(3,006
|
)
|
(1,954
|
)
|
||||
Currency translation adjustment
|
(126
|
)
|
9
|
|||||
Comprehensive loss
|
(93,001
|
)
|
(51,827
|
)
|
||||
Comprehensive loss attributable to noncontrolling interest in Akcea Therapeutics, Inc.
|
—
|
(10,254
|
)
|
|||||
Comprehensive loss attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(93,001
|
)
|
$
|
(41,573
|
)
|
* |
We revised our 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted retrospectively. Refer to Note 2, Significant Accounting Policies, for further information.
|
Common Stock
|
Additional
|
Accumulated Other
|
Accumulated
|
Total Ionis
Stockholders’
|
Noncontrolling
Interest in Akcea
|
Total
Stockholders’
|
||||||||||||||||||||||||||
Description
|
Shares
|
Amount
|
Paid in Capital
|
Comprehensive Loss
|
Deficit
|
Equity
|
Therapeutics, Inc.
|
Equity
|
||||||||||||||||||||||||
Balance at December 31, 2019 (as revised*)
|
140,340
|
$
|
140
|
$
|
1,985,650
|
$
|
(25,290
|
)
|
$
|
(596,495
|
)
|
$
|
1,364,005
|
$
|
213,453
|
$
|
1,577,458
|
|||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
(39,628
|
)
|
(39,628
|
)
|
—
|
(39,628
|
)
|
|||||||||||||||||||||
Change in unrealized losses, net of tax
|
—
|
—
|
—
|
(1,954
|
)
|
—
|
(1,954
|
)
|
—
|
(1,954
|
)
|
|||||||||||||||||||||
Foreign currency translation
|
—
|
—
|
—
|
9
|
—
|
9
|
—
|
9
|
||||||||||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
606
|
—
|
7,652
|
—
|
—
|
7,652
|
—
|
7,652
|
||||||||||||||||||||||||
Repurchases and retirements of common stock
|
(1,478
|
)
|
(1
|
)
|
—
|
—
|
(90,549
|
)
|
(90,550
|
)
|
—
|
(90,550
|
)
|
|||||||||||||||||||
Stock-based compensation expense
|
—
|
—
|
40,790
|
—
|
—
|
40,790
|
—
|
40,790
|
||||||||||||||||||||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options
|
(186
|
)
|
—
|
(11,603
|
)
|
—
|
—
|
(11,603
|
)
|
—
|
(11,603
|
)
|
||||||||||||||||||||
Noncontrolling interest in Akcea Therapeutics, Inc
|
—
|
—
|
(6,973
|
)
|
—
|
—
|
(6,973
|
)
|
(3,281
|
)
|
(10,254
|
)
|
||||||||||||||||||||
Balance at March 31, 2020 (as revised*)
|
139,282
|
$
|
139
|
$
|
2,015,516
|
$
|
(27,235
|
)
|
$
|
(726,672
|
)
|
$
|
1,261,748
|
$
|
210,172
|
$
|
1,471,920
|
|||||||||||||||
Balance at December 31, 2020 (as revised*)
|
140,366
|
$
|
140
|
$
|
1,895,519
|
$
|
(21,071
|
)
|
$
|
(1,131,306
|
)
|
$
|
743,282
|
$
|
—
|
$
|
743,282
|
|||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
(89,869
|
)
|
(89,869
|
)
|
—
|
(89,869
|
)
|
|||||||||||||||||||||
Change in unrealized loss, net of tax
|
—
|
—
|
—
|
(3,006
|
)
|
—
|
(3,006
|
)
|
—
|
(3,006
|
)
|
|||||||||||||||||||||
Foreign currency translation
|
—
|
—
|
—
|
(126
|
)
|
—
|
(126
|
)
|
—
|
(126
|
)
|
|||||||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
809
|
1
|
7,758
|
—
|
—
|
7,759
|
—
|
7,759
|
||||||||||||||||||||||||
Stock-based compensation expense
|
—
|
—
|
37,861
|
—
|
—
|
37,861
|
—
|
37,861
|
||||||||||||||||||||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options
|
(251
|
)
|
—
|
(15,337
|
)
|
—
|
—
|
(15,337
|
)
|
—
|
(15,337
|
)
|
||||||||||||||||||||
Balance at March 31, 2021
|
140,924
|
$
|
141
|
$
|
1,925,801
|
$
|
(24,203
|
)
|
$
|
(1,221,175
|
)
|
$
|
680,564
|
$
|
—
|
$
|
680,564
|
* |
We revised our 2019 and 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted retrospectively. Refer to Note 2, Significant Accounting Policies, for further information.
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
(as revised*)
|
||||||||
Operating activities:
|
||||||||
Net loss
|
$
|
(89,869
|
)
|
$
|
(49,882
|
)
|
||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation
|
3,917
|
3,233
|
||||||
Amortization of right-of-use operating lease assets
|
394
|
393
|
||||||
Amortization of patents
|
544
|
486
|
||||||
Amortization of premium (discount) on investments, net
|
4,023
|
1,062
|
||||||
Amortization of debt issuance costs
|
860
|
647
|
||||||
Stock-based compensation expense
|
37,861
|
40,790
|
||||||
Gain on investments
|
(13
|
)
|
(246
|
)
|
||||
Non-cash losses related to patents
|
221
|
159
|
||||||
Provision for deferred income taxes
|
—
|
(2,288
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Contracts receivable
|
52,807
|
34,429
|
||||||
Inventories
|
(234
|
)
|
(2,181
|
)
|
||||
Other current and long-term assets
|
16,481
|
9,532
|
||||||
Income taxes payable
|
2
|
(532
|
)
|
|||||
Accounts payable
|
(9,569
|
)
|
411
|
|||||
Accrued compensation
|
(36,465
|
)
|
(20,920
|
)
|
||||
Accrued liabilities and other current liabilities
|
(11,905
|
)
|
(3,006
|
)
|
||||
Deferred contract revenue
|
(23,717
|
)
|
(19,679
|
)
|
||||
Net cash used in operating activities
|
(54,662
|
)
|
(7,592
|
)
|
||||
Investing activities:
|
||||||||
Purchases of short-term investments
|
(330,051
|
)
|
(544,375
|
)
|
||||
Proceeds from sale of short-term investments
|
411,907
|
459,352
|
||||||
Purchases of property, plant and equipment
|
(1,772
|
)
|
(9,080
|
)
|
||||
Acquisition of licenses and other assets, net
|
(1,228
|
)
|
(904
|
)
|
||||
Net cash provided by (used in) investing activities
|
78,856
|
(95,007
|
)
|
|||||
Financing activities:
|
||||||||
Proceeds from equity, net
|
7,760
|
7,652
|
||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options
|
(15,337
|
)
|
(11,603
|
)
|
||||
Repurchases and retirements of common stock
|
—
|
(90,550
|
)
|
|||||
Net cash used in financing activities
|
(7,577
|
)
|
(94,501
|
)
|
||||
Effects of exchange rates on cash
|
(126
|
)
|
8
|
|||||
Net increase (decrease) in cash and cash equivalents
|
16,491
|
(197,092
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
397,664
|
683,287
|
||||||
Cash and cash equivalents at end of period
|
$
|
414,155
|
$
|
486,195
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Interest paid
|
$
|
594
|
$
|
601
|
||||
Income taxes paid
|
$
|
2
|
$
|
3
|
||||
Supplemental disclosures of non-cash investing and financing activities:
|
||||||||
Amounts accrued for capital and patent expenditures
|
$
|
1,876
|
$
|
4,903
|
* |
We revised our 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted retrospectively. Refer to Note 2, Significant Accounting Policies, for further information.
|
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 of the consideration is probable.
|
2. |
Identify the performance obligations
|
3. |
Determine the transaction price
|
4. |
Allocate the transaction price
|
● |
Estimated future product sales;
|
● |
Estimated royalties we may receive from future product sales;
|
● |
Estimated contractual milestone payments we may receive;
|
● |
Expenses we expect to incur;
|
● |
Estimated 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 sold 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.
|
March 31, 2021
|
December 31, 2020
|
|||||||
Raw materials:
|
||||||||
Raw materials- clinical
|
$
|
10,695
|
$
|
9,206
|
||||
Raw materials- commercial
|
7,502
|
7,502
|
||||||
Total raw materials
|
18,197
|
16,708
|
||||||
Work in process
|
2,096
|
2,252
|
||||||
Finished goods
|
1,906
|
3,005
|
||||||
Total inventory
|
$
|
22,199
|
$
|
21,965
|
Three months ended March 31, 2020
|
Weighted
Average Shares
Owned in Akcea
|
Akcea’s
Net Loss
Per Share
|
Basic
Net Loss Per
Share Calculation
(as revised*)
|
|||||||||
Ionis’ portion of Akcea’s net loss
|
77,095
|
$
|
(0.42
|
)
|
$
|
(32,674
|
)
|
|||||
Akcea’s net loss attributable to our ownership
|
$
|
(32,674
|
)
|
|||||||||
Ionis’ stand-alone net loss
|
(7,032
|
)
|
||||||||||
Net loss available to Ionis common stockholders
|
$
|
(39,706
|
)
|
|||||||||
Weighted average shares outstanding
|
139,429
|
|||||||||||
Basic net loss per share
|
$
|
(0.28
|
)
|
* |
We revised our 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted retrospectively. Refer to Note 2, Significant Accounting Policies, for further information.
|
● |
0.125 percent convertible senior notes;
|
● |
Note hedges related to the 0.125 percent convertible senior notes;
|
● |
1 percent convertible senior notes;
|
● |
Dilutive stock options;
|
● |
Unvested restricted stock units, or RSUs;
|
● |
Unvested performance restricted stock units, or PRSUs; and
|
● |
Employee Stock Purchase Plan, or ESPP.
|
|
December 31, 2020
|
|||||||||||
As Previously
Reported
|
ASU 2020-06
Adjustment
|
As Revised
|
||||||||||
1 percent convertible senior notes
|
$
|
293,161
|
$
|
15,648
|
$
|
308,809
|
||||||
0.125 percent convertible senior notes
|
$
|
455,719
|
$
|
84,417
|
$
|
540,136
|
||||||
Additional paid-in-capital
|
$
|
2,113,646
|
$
|
(218,127
|
)
|
$
|
1,895,519
|
|||||
Accumulated deficit
|
$
|
(1,249,368
|
)
|
$
|
118,062
|
$
|
(1,131,306
|
)
|
|
Three Months Ended March 31, 2020
|
|||||||||||
As Previously
Reported
|
ASU 2020-06
Adjustment
|
As Revised
|
||||||||||
Interest expense
|
$
|
(10,990
|
)
|
$
|
8,783
|
$
|
(2,207
|
)
|
||||
Loss before income tax benefit
|
$
|
(61,737
|
)
|
$
|
8,783
|
$
|
(52,954
|
)
|
||||
Income tax benefit
|
$
|
3,257
|
$
|
(185
|
)
|
$
|
3,072
|
|||||
Net loss
|
$
|
(58,480
|
)
|
$
|
8,598
|
$
|
(49,882
|
)
|
||||
Net loss attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(48,226
|
)
|
$
|
8,598
|
$
|
(39,628
|
)
|
||||
Basic and diluted net loss per share
|
$
|
(0.35
|
)
|
$
|
0.07
|
$
|
(0.28
|
)
|
|
December 31, 2020
|
|||||||||||
As Previously
Reported
|
ASU 2020-06
Adjustment
|
As Revised
|
||||||||||
Additional paid-in-capital
|
$
|
2,113,646
|
$
|
(218,127
|
)
|
$
|
1,895,519
|
|||||
Accumulated deficit
|
$
|
(1,249,368
|
)
|
$
|
118,062
|
$
|
(1,131,306
|
)
|
||||
Total stockholders' equity
|
$
|
843,347
|
$
|
(100,065
|
)
|
$
|
743,282
|
|
December 31, 2019
|
|||||||||||
As Previously
Reported
|
ASU 2020-06
Adjustment
|
As Revised
|
||||||||||
Additional paid-in-capital
|
$
|
2,203,778
|
$
|
(218,128
|
)
|
$
|
1,985,650
|
|||||
Accumulated deficit
|
$
|
(707,534
|
)
|
$
|
111,039
|
$
|
(596,495
|
)
|
||||
Total stockholders' equity
|
$
|
1,684,547
|
$
|
(107,089
|
)
|
$
|
1,577,458
|
|
Three Months Ended
March 31,
|
|||||||
2021
|
2020
|
|||||||
Risk-free interest rate
|
0.5
|
%
|
1.6
|
%
|
||||
Dividend yield
|
0.0
|
%
|
0.0
|
%
|
||||
Volatility
|
55.1
|
%
|
58.9
|
%
|
||||
Expected life
|
4.9 years
|
4.7 years
|
|
Three Months Ended
March 31,
|
|||||||
2021
|
2020
|
|||||||
Risk-free interest rate
|
0.1
|
%
|
1.1
|
%
|
||||
Dividend yield
|
0.0
|
%
|
0.0
|
%
|
||||
Volatility
|
39.1
|
%
|
47.2
|
%
|
||||
Expected life
|
6 months
|
6 months
|
|
Three Months Ended
March 31,
|
|||||||
2021
|
2020
|
|||||||
Cost of sales
|
$
|
182
|
$
|
237
|
||||
Research, development and patent expense
|
25,899
|
25,556
|
||||||
Selling, general and administrative expense
|
11,780
|
14,997
|
||||||
Total
|
$
|
37,861
|
$
|
40,790
|
One year or less
|
67
|
%
|
||
After one year but within two years
|
20
|
%
|
||
After two years but within three and a half years
|
13
|
%
|
||
Total
|
100
|
%
|
|
Gross Unrealized
|
Estimated
|
||||||||||||||
March 31, 2021
|
Cost (1)
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
Available-for-sale securities:
|
||||||||||||||||
Corporate debt securities (2)
|
$
|
446,816
|
$
|
1,838
|
$
|
(76
|
)
|
$
|
448,578
|
|||||||
Debt securities issued by U.S. government agencies
|
80,703
|
292
|
(2
|
)
|
80,993
|
|||||||||||
Debt securities issued by the U.S. Treasury (2)
|
234,164
|
126
|
—
|
234,290
|
||||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
121,776
|
220
|
(22
|
)
|
121,974
|
|||||||||||
Other municipal debt securities
|
5,137
|
—
|
(7
|
)
|
5,130
|
|||||||||||
Total securities with a maturity of one year or less
|
888,596
|
2,476
|
(107
|
)
|
890,965
|
|||||||||||
Corporate debt securities
|
325,335
|
3,108
|
(245
|
)
|
328,198
|
|||||||||||
Debt securities issued by U.S. government agencies
|
96,698
|
36
|
(164
|
)
|
96,570
|
|||||||||||
Debt securities issued by the U.S. Treasury
|
59,030
|
326
|
(35
|
)
|
59,321
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
34,515
|
81
|
(25
|
)
|
34,571
|
|||||||||||
Other municipal debt
|
6,233
|
—
|
(20
|
)
|
6,213
|
|||||||||||
Total securities with a maturity of more than one year
|
521,811
|
3,551
|
(489
|
)
|
524,873
|
|||||||||||
Total available-for-sale securities
|
$
|
1,410,407
|
$
|
6,027
|
$
|
(596
|
)
|
$
|
1,415,838
|
|||||||
Equity securities:
|
||||||||||||||||
Total equity securities included in other current assets (3)
|
$
|
4,712
|
$
|
—
|
$
|
(1,514
|
)
|
$
|
3,198
|
|||||||
Total equity securities included in deposits and other assets (4)
|
15,062
|
15,938
|
—
|
31,000
|
||||||||||||
Total equity securities
|
19,774
|
15,938
|
(1,514
|
)
|
34,198
|
|||||||||||
Total available-for-sale and equity securities
|
$
|
1,430,181
|
$
|
21,965
|
$
|
(2,110
|
)
|
$
|
1,450,036
|
|
Gross Unrealized
|
Estimated
|
||||||||||||||
December 31, 2020
|
Cost (1)
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
Available-for-sale securities:
|
||||||||||||||||
Corporate debt securities (2)
|
$
|
514,182
|
$
|
2,194
|
$
|
(41
|
)
|
$
|
516,335
|
|||||||
Debt securities issued by U.S. government agencies
|
94,234
|
354
|
(2
|
)
|
94,586
|
|||||||||||
Debt securities issued by the U.S. Treasury (2)
|
307,576
|
233
|
(9
|
)
|
307,800
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
104,271
|
196
|
(12
|
)
|
104,455
|
|||||||||||
Other municipal debt securities
|
5,191
|
—
|
(7
|
)
|
5,184
|
|||||||||||
Total securities with a maturity of one year or less
|
1,025,454
|
2,977
|
(71
|
)
|
1,028,360
|
|||||||||||
Corporate debt securities
|
325,079
|
4,941
|
(40
|
)
|
329,980
|
|||||||||||
Debt securities issued by U.S. government agencies
|
80,099
|
185
|
(9
|
)
|
80,275
|
|||||||||||
Debt securities issued by the U.S. Treasury
|
50,318
|
383
|
(4
|
)
|
50,697
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
31,779
|
91
|
(16
|
)
|
31,854
|
|||||||||||
Other municipal debt securities
|
1,041
|
—
|
—
|
1,041
|
||||||||||||
Total securities with a maturity of more than one year
|
488,316
|
5,600
|
(69
|
)
|
493,847
|
|||||||||||
Total available-for-sale securities
|
$
|
1,513,770
|
$
|
8,577
|
$
|
(140
|
)
|
$
|
1,522,207
|
|||||||
Equity securities:
|
||||||||||||||||
Total equity securities included in other current assets (3)
|
$
|
4,712
|
$
|
—
|
$
|
(2,681
|
)
|
$
|
2,031
|
|||||||
Total equity securities included in deposits and other assets (4)
|
15,062
|
15,938
|
—
|
31,000
|
||||||||||||
Total equity securities
|
19,774
|
15,938
|
(2,681
|
)
|
33,031
|
|||||||||||
Total available-for-sale and equity securities
|
$
|
1,533,544
|
$
|
24,515
|
$
|
(2,821
|
)
|
$
|
1,555,238
|
(1) |
We hold our available-for-sale securities at amortized cost.
|
(2) |
Includes investments classified as cash equivalents on our condensed consolidated balance sheet.
|
(3) |
Our equity securities included in other current assets consisted of our investments in publicly traded companies. We recognize publicly traded equity securities at fair value.
|
(4) |
Our equity securities included in deposits and other assets consisted of our investments in privately held companies. We recognize our private company equity securities at cost minus impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer.
|
|
Number of
Investments
|
Estimated
Fair Value
|
Unrealized
Losses
|
|||||||||
Corporate debt securities
|
101
|
$
|
233,665
|
$
|
(321
|
)
|
||||||
Debt securities issued by U.S. government agencies
|
7
|
60,681
|
(166
|
)
|
||||||||
Debt securities issued by the U.S. Treasury
|
6
|
52,838
|
(35
|
)
|
||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
297
|
76,712
|
(47
|
)
|
||||||||
Other municipal debt securities
|
3
|
11,343
|
(27
|
)
|
||||||||
Total temporarily impaired securities
|
414
|
$
|
435,239
|
$
|
(596
|
)
|
|
At
March 31, 2021
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
|||||||||
Cash equivalents (1)
|
$
|
372,050
|
$
|
372,050
|
$
|
—
|
||||||
Corporate debt securities (2)
|
776,776
|
—
|
776,776
|
|||||||||
Debt securities issued by U.S. government agencies (3)
|
177,563
|
—
|
177,563
|
|||||||||
Debt securities issued by the U.S. Treasury (3)
|
293,611
|
293,611
|
—
|
|||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (3)
|
156,545
|
—
|
156,545
|
|||||||||
Other municipal debt securities (3)
|
11,343
|
—
|
11,343
|
|||||||||
Investment in ProQR Therapeutics N.V. (4)
|
3,198
|
3,198
|
—
|
|||||||||
Total
|
$
|
1,791,086
|
$
|
668,859
|
$
|
1,122,227
|
|
At
December 31, 2020
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
|||||||||
Cash equivalents (1)
|
$
|
221,125
|
$
|
221,125
|
$
|
—
|
||||||
Corporate debt securities (2)
|
846,315
|
—
|
846,315
|
|||||||||
Debt securities issued by U.S. government agencies (3)
|
174,861
|
—
|
174,861
|
|||||||||
Debt securities issued by the U.S. Treasury (5)
|
358,497
|
358,497
|
—
|
|||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (3)
|
136,309
|
—
|
136,309
|
|||||||||
Other municipal debt securities (3)
|
6,225
|
—
|
6,225
|
|||||||||
Investment in ProQR Therapeutics N.V. (4)
|
2,031
|
2,031
|
—
|
|||||||||
Total
|
$
|
1,745,363
|
$
|
581,653
|
$
|
1,163,710
|
(1) |
Included in cash and cash equivalents on our condensed consolidated balance sheet.
|
(2) |
$10.0 million was included in cash and cash equivalents, with the difference included in short-term investments.
|
(3) |
Included in short-term investments.
|
(4) |
Included in other current assets on our condensed consolidated balance sheet.
|
(5) |
$17.5 million 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.
|
|
Three Months Ended
March 31,
|
|||||||
2021
|
2020
|
|||||||
SPINRAZA royalties (commercial revenue)
|
$
|
60.0
|
$
|
66.0
|
||||
R&D revenue
|
18.1
|
21.4
|
||||||
Total revenue from our relationship with Biogen
|
$
|
78.1
|
$
|
87.4
|
||||
Percentage of total revenue
|
70
|
%
|
66
|
%
|
|
0% Notes
|
|||
Outstanding principal balance
|
$
|
632.5
|
||
Maturity date
|
April 2026
|
|||
Interest rate
|
0 percent
|
|||
Conversion price per share
|
$
|
57.84
|
||
Effective conversion price per share with call spread
|
$
|
76.39
|
||
Total shares of common stock subject to conversion
|
10.9
|
|
0.125% Notes
|
|||
Outstanding principal balance
|
$
|
548.8
|
||
Maturity date
|
December 2024
|
|||
Interest rate
|
0.125 percent
|
|||
Conversion price per share
|
$
|
83.28
|
||
Effective conversion price per share with call spread
|
$
|
123.38
|
||
Total shares of common stock subject to conversion
|
6.6
|
|||
Unamortized debt issuance costs
|
$
|
8.1
|
1% Notes
|
||||
Outstanding principal balance
|
$
|
309.9
|
||
Maturity date
|
November 2021
|
|||
Interest rate
|
1 percent
|
|||
Conversion price per share
|
$
|
66.81
|
||
Total shares of common stock subject to conversion
|
4.6
|
|||
Unamortized debt issuance costs
|
$
|
0.8
|
Severance and Retention Expenses
|
||||
Total estimated expenses
|
$
|
28.5
|
||
Expenses incurred in the three months ended December 31, 2020
|
15.3
|
|||
Expenses incurred in the three months ended March 31, 2021
|
5.4
|
|||
Remaining estimated expenses to be recognized through October 2021
|
$
|
7.8
|
Three Months Ended
March 31, 2021
|
||||
Research, development and patent expenses
|
$
|
2.5
|
||
Selling, general and administrative expenses
|
2.9
|
|||
Total
|
$
|
5.4
|
Three Months Ended
March 31, 2021
|
||||
Beginning balance
|
$
|
14.7
|
||
Amounts expensed during the period
|
6.1
|
|||
Reserve adjustments during the period
|
(0.7
|
)
|
||
Net amount expensed during the period
|
5.4
|
|||
Amounts paid during the period
|
(9.0
|
)
|
||
Ending balance
|
$
|
11.1
|
Severance and Retention Expenses
|
||||
Total estimated expenses
|
$
|
13.6
|
||
Expenses incurred in the three months ended December 31, 2020
|
12.5
|
|||
Expenses incurred in the three months ended March 31, 2021
|
0.7
|
|||
Remaining estimated expenses through October 2021
|
$
|
0.4
|
Three Months Ended
March 31, 2021
|
||||
Research, development and patent expenses
|
$
|
0.1
|
||
Selling, general and administrative expenses
|
0.6
|
|||
Total
|
$
|
0.7
|
Three Months Ended
March 31, 2021
|
||||
Beginning balance
|
$
|
12.4
|
||
Amounts expensed during the period
|
2.2
|
|||
Reserve adjustments during the period
|
(1.5
|
)
|
||
Net amount expensed during the period
|
0.7
|
|||
Amounts paid during the period
|
(11.9
|
)
|
||
Ending balance
|
$
|
1.2
|
ITEM 2 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
● |
Tofersen: Biogen completed enrollment in the VALOR Phase 3 study in patients with SOD1-ALS in December 2020
|
● |
IONIS-TTR-LRx: Enrollment is ongoing in both the NEURO-TTRansform and the CARDIO-TTRansform Phase 3 studies
|
● |
IONIS-APOCIII-LRx: Enrollment is ongoing in the BALANCE Phase 3 study in patients with FCS
|
● |
Pelacarsen: Enrollment is ongoing in Novartis Pharma AG’s Lp(a)HORIZON Phase 3 cardiovascular outcome study
|
● |
ION363: We recently initiated a Phase 3 study in patients with FUS-ALS, the most common cause of juvenile-onset ALS
|
Three Months Ended March 31,
|
||||||||
2021
|
2020
|
|||||||
(as revised*)
|
||||||||
Total revenue
|
$
|
111.6
|
$
|
133.4
|
||||
Total operating expenses
|
$
|
203.6
|
$
|
194.5
|
||||
Loss from operations
|
$
|
(92.0
|
)
|
$
|
(61.1
|
)
|
||
Net loss
|
$
|
(89.9
|
)
|
$
|
(49.9
|
)
|
* |
We revised our 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted retrospectively. Refer to Note 2, Significant Accounting Policies, for further information.
|
● |
SPINRAZA: a global foundation-of-care for the treatment of SMA patients of all ages
|
o |
$521 million in worldwide sales in the first quarter
|
o |
More than 11,000 patients worldwide were on therapy at the end of the first quarter across post-marketing, expanded access and clinical trial settings
|
o |
Higher-dose SPINRAZA demonstrated safety and tolerability consistent with the currently approved dose in the open-label safety cohort of the DEVOTE study, enabling enrollment in the blinded, pivotal cohort to get underway
|
● |
TEGSEDI and WAYLIVRA: important medicines approved for the treatment of patients with severe rare diseases
|
o |
Completed the transition of European operations to Sobi and expanded the distribution agreement to include North American TEGSEDI operations
|
● |
Phase 3 Pipeline: growing and positioned for 12 or more products on the market in 2026
|
o |
Advanced ION363 into a Phase 3 study in patients with FUS-ALS
|
o |
Advanced tofersen into the Phase 3 ATLAS study in presymptomatic SOD1-ALS patients
|
o |
Roche reported tominersen data related to the dosing halt in the Phase 3 program
|
● |
Mid-stage Pipeline: advancing multiple medicines with potential to change the standard of care for patients with severe diseases
|
o |
Reported positive topline IONIS-PKK-LRx results in patients with hereditary angioedema
|
o |
Advanced ION373 into the Phase 2 portion of a pivotal study in patients with Alexander disease
|
o |
Advanced the IONIS-AGT-LRx development program:
|
◾ |
Reported positive Phase 2 data in JACC: Basic to Translational Science
|
◾ |
Advanced into a Phase 2b study in patients with hypertension uncontrolled with three or more antihypertensive medications
|
◾ |
Advanced into a Phase 2 study in patients with chronic heart failure with reduced injection fraction
|
o |
Advanced the ongoing Phase 2 study of ION541 in patients with ALS regardless of family history, resulting in a $10 million payment from Biogen
|
● |
Assessing the propriety of revenue recognition and associated deferred revenue;
|
● |
Determining the appropriate cost estimates for unbilled preclinical studies and clinical development activities; and
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Revenue:
|
||||||||
Commercial revenue:
|
||||||||
SPINRAZA royalties
|
$
|
60.0
|
$
|
66.0
|
||||
TEGSEDI and WAYLIVRA revenue, net
|
19.8
|
15.2
|
||||||
Licensing and other royalty revenue
|
4.6
|
2.8
|
||||||
Total commercial revenue
|
84.4
|
84.0
|
||||||
R&D revenue:
|
||||||||
Amortization from upfront payments
|
20.1
|
21.1
|
||||||
Milestone payments
|
5.2
|
23.1
|
||||||
Other services
|
1.9
|
5.2
|
||||||
Total R&D revenue
|
27.2
|
49.4
|
||||||
Total revenue
|
$
|
111.6
|
$
|
133.4
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Operating expenses, excluding non-cash compensation expense related to equity awards
|
$
|
159.0
|
$
|
153.7
|
||||
Restructuring expenses
|
6.7
|
—
|
||||||
Non-cash compensation expense related to equity awards
|
37.9
|
40.8
|
||||||
Total operating expenses
|
$
|
203.6
|
$
|
194.5
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Cost of sales, excluding non-cash compensation expense related to equity awards
|
$
|
2.4
|
$
|
2.3
|
||||
Non-cash compensation expense related to equity awards
|
0.2
|
0.2
|
||||||
Total cost of sales
|
$
|
2.6
|
$
|
2.5
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Research, development and patent expenses, excluding non-cash compensation expense related to equity awards
|
$
|
111.3
|
$
|
91.4
|
||||
Restructuring expenses
|
2.6
|
—
|
||||||
Non-cash compensation expense related to equity awards
|
25.9
|
25.6
|
||||||
Total research, development and patent expenses
|
$
|
139.8
|
$
|
117.0
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Antisense drug discovery expenses, excluding non-cash compensation expense related to equity awards
|
$
|
26.6
|
$
|
18.4
|
||||
Non-cash compensation expense related to equity awards
|
6.3
|
6.3
|
||||||
Total antisense drug discovery expenses
|
$
|
32.9
|
$
|
24.7
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
TEGSEDI
|
$
|
1.8
|
$
|
4.3
|
||||
WAYLIVRA
|
0.6
|
1.0
|
||||||
IONIS-TTR-LRx
|
13.3
|
5.9
|
||||||
IONIS-APOCIII-LRx
|
1.4
|
0.8
|
||||||
ION363
|
2.1
|
—
|
||||||
Other antisense development projects
|
20.3
|
21.0
|
||||||
Development overhead expenses
|
22.5
|
17.9
|
||||||
Restructuring expenses
|
2.3
|
—
|
||||||
Total antisense drug development, excluding non-cash compensation expense related to equity awards
|
64.3
|
50.9
|
||||||
Non-cash compensation expense related to equity awards
|
12.4
|
11.8
|
||||||
Total antisense drug development expenses
|
$
|
76.7
|
$
|
62.7
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Manufacturing and development chemistry expenses, excluding non-cash compensation expense related to equity awards
|
$
|
11.8
|
$
|
12.0
|
||||
Restructuring expenses
|
0.3
|
—
|
||||||
Non-cash compensation expense related to equity awards
|
3.1
|
2.8
|
||||||
Total manufacturing and development chemistry expenses
|
$
|
15.2
|
$
|
14.8
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Personnel costs
|
$
|
4.3
|
$
|
3.8
|
||||
Occupancy
|
3.2
|
2.4
|
||||||
Patent expenses
|
0.8
|
0.7
|
||||||
Insurance
|
0.8
|
0.6
|
||||||
Computer software and licenses
|
0.5
|
0.6
|
||||||
Other
|
1.3
|
2.0
|
||||||
Total R&D support expenses, excluding non-cash compensation expense related to equity awards
|
10.9
|
10.1
|
||||||
Non-cash compensation expense related to equity awards
|
4.1
|
4.6
|
||||||
Total R&D support expenses
|
$
|
15.0
|
$
|
14.7
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
Selling, general and administrative expenses, excluding non-cash compensation expense related to equity awards
|
$
|
45.3
|
$
|
60.0
|
||||
Restructuring expenses
|
4.1
|
—
|
||||||
Total selling, general and administrative expenses, excluding non-cash compensation related to equity awards
|
49.4
|
60.0
|
||||||
Non-cash compensation expense related to equity awards
|
11.8
|
15.0
|
||||||
Total selling, general and administrative expenses
|
$
|
61.2
|
$
|
75.0
|
Three Months Ended
March 31,
|
||||||||
2021
|
2020
|
|||||||
(as revised*)
|
||||||||
Convertible notes:
|
||||||||
Non-cash amortization of debt issuance costs
|
$
|
0.9
|
$
|
0.7
|
||||
Interest expense payable in cash
|
0.9
|
0.9
|
||||||
Interest on mortgage for primary R&D and manufacturing facilities
|
0.6
|
0.6
|
||||||
Total interest expense
|
$
|
2.4
|
$
|
2.2
|
* |
We revised our 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted retrospectively. Refer to Note 2, Significant Accounting Policies, for further information.
|
Contractual Obligations
|
Payments Due by Period (in millions)
|
|||||||||||
(selected balances described below)
|
Total
|
Less than 1 year
|
More than 1 year
|
|||||||||
0.125% Notes (principal and interest payable)
|
$
|
551.6
|
$
|
0.7
|
$
|
550.9
|
||||||
1% Notes (principal and interest payable)*
|
313.0
|
313.0
|
—
|
|||||||||
Building mortgage payments
|
75.5
|
2.4
|
73.1
|
|||||||||
Operating leases
|
22.4
|
3.3
|
19.1
|
|||||||||
Other obligations (principal and interest payable)
|
0.9
|
0.1
|
0.8
|
|||||||||
Total
|
$
|
963.4
|
$
|
319.5
|
$
|
643.9
|
* |
In April 2021, we repurchased $247.9 million in aggregate principal amount of our 1% Notes in privately negotiated transactions. As a result, in April 2021, the remaining principal outstanding for our 1% Notes was $62.0 million. As a result of the repurchase, we reclassified the repurchased portion of our 1% Notes from current to non-current liabilities on our condensed consolidated balance sheet as of March 31, 2021 because we replaced this portion of our outstanding debt with long-term debt.
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4. |
CONTROLS AND PROCEDURES
|
ITEM 1. |
LEGAL PROCEEDINGS
|
ITEM 1A. |
RISK FACTORS
|
● |
the impact on our operations and financial condition from the effects of the current COVID-19 pandemic;
|
● |
our ability to generate substantial revenue from the sale of our medicines;
|
● |
our and our partners’ ability to compete effectively;
|
● |
the availability of adequate coverage and payment rates for our medicines;
|
● |
our ability to successfully manufacture our medicines;
|
● |
our ability to successfully develop and obtain marketing approvals for our medicines;
|
● |
our ability to secure and maintain effective corporate partnerships;
|
● |
our ability to sustain cash flows and achieve consistent profitability;
|
● |
our ability to protect our intellectual property;
|
● |
our ability to maintain the effectiveness of our personnel; and
|
● |
the other factors set forth below.
|
● |
we have experienced some impact on clinical site initiation and patient enrollment due to restrictions imposed as a result of the COVID-19 Pandemic;
|
o |
For example, in March 2020, we instituted a temporary suspension of enrollment for new subjects in our Phase 3 studies of IONIS-TTR-LRx based on advice from our trial advisory committee; however, enrollment has resumed.
|
● |
some patients have not been able to meet protocol requirements, as quarantines have impeded patient movement and interrupted healthcare services;
|
● |
we have experienced some delays in site initiations due to principle investigators and site staff focusing on
|
● |
we have experienced some delays in necessary interactions with regulators, ethics committees and other
|
● |
receipt and scope of marketing authorizations;
|
● |
establishment and demonstration in the medical and patient community of the efficacy and safety of our medicines and their potential advantages over competing products;
|
● |
cost and effectiveness of our medicines compared to other available therapies;
|
● |
patient convenience of the dosing regimen for our medicines; and
|
● |
reimbursement policies of government and third-party payers.
|
● |
priced lower than our medicines;
|
● |
reimbursed more favorably by government and other third-party payers than our medicines;
|
● |
safer than our medicines;
|
● |
more effective than our medicines; or
|
● |
more convenient to use than our medicines.
|
● |
Onasemnogene abeparvovec and risdiplam compete with SPINRAZA;
|
● |
Patisiran, tafamidis and tafamidis meglumine compete with TEGSEDI;
|
● |
Vutrisiran and acoramidis could compete with TEGSEDI and IONIS-TTR-LRx;
|
● |
ARO-APOC3, lomitapide and gemcabene could compete with WAYLIVRA and IONIS-APOCIII-LRx; and
|
● |
Arimoclomol, ultomiris, mastinib and trehalose could compete with tofersen and ION363.
|
● |
in the U.S., TEGSEDI’s label contains a boxed warning for thrombocytopenia and glomerulonephritis;
|
● |
TEGSEDI requires periodic blood and urine monitoring; and
|
● |
in the U.S., TEGSEDI is available only through a REMS program.
|
● |
fund our development activities for SPINRAZA;
|
● |
seek and obtain regulatory approvals for SPINRAZA; and
|
● |
successfully commercialize SPINRAZA.
|
● |
In April 2021, we entered into a distribution agreement with Sobi to commercialize TEGSEDI in the U.S. and Canada;
|
● |
In December 2020, we entered into a distribution agreement with Sobi to commercialize TEGSEDI and WAYLIVRA in Europe; and
|
● |
In August 2018, we granted PTC the exclusive right to commercialize TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries.
|
● |
such authorities may disagree with the design or implementation of our clinical studies;
|
● |
we or our partners may be unable to demonstrate to the satisfaction of the FDA or other regulatory authorities that a medicine is safe and effective for any indication;
|
● |
such authorities may not accept clinical data from studies conducted at clinical facilities that have deficient clinical practices or that are in countries where the standard of care is potentially different from the U.S.;
|
● |
we or our partners may be unable to demonstrate that our medicine’s clinical and other benefits outweigh its safety risks to support approval;
|
● |
such authorities may disagree with the interpretation of data from preclinical or clinical studies;
|
● |
such authorities may find deficiencies in the manufacturing processes or facilities of third-party manufacturers who manufacture clinical and commercial supplies for our medicines, or may delay the inspection of such facilities due to restrictions related to the COVID-19 Pandemic; and
|
● |
the approval policies or regulations of such authorities or their prior guidance to us or our partners during clinical development may significantly change in a manner rendering our clinical data insufficient for approval.
|
● |
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 medicine on subjects or lack of efficacy in the trial;
|
● |
we, or our partners, 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;
|
● |
we or our partners, including our independent clinical investigators, contract research organizations and other third-party service providers on which we rely, may not identify, recruit and train suitable clinical investigators at a sufficient number of study sites or timely enroll a sufficient number of study subjects in the clinical study;
|
● |
the institutional review board for a prospective site might withhold or delay its approval for the study;
|
● |
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;
|
● |
a clinical study site may deviate from the protocol for the study;
|
● |
the cost of our clinical studies may be greater than we anticipate;
|
● |
our partners may decide not to exercise any existing options to license and conduct additional clinical studies for our medicines; and
|
● |
the supply or quality of our medicines or other materials necessary to conduct our clinical studies may be insufficient, inadequate or delayed.
|
● |
Roche for development and funding of tominersen;
|
● |
Novartis for development and funding of pelacarsen; and
|
● |
Biogen for development and funding of tofersen.
|
● |
conduct clinical studies;
|
● |
seek and obtain marketing authorizations; and
|
● |
manufacture, market and sell our medicines.
|
● |
pursue alternative technologies or develop alternative products that may be competitive with the medicine 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 medicines than it does for its own medicines.
|
● |
successful commercialization of SPINRAZA, TEGSEDI and WAYLIVRA;
|
● |
additional marketing approvals for WAYLIVRA and TEGSEDI;
|
● |
the profile and launch timing of our medicines, including TEGSEDI and WAYLIVRA;
|
● |
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.
|
● |
failure to successfully manage relationships with partners, customers, distributors and suppliers;
|
● |
disruptions to Akcea’s commercial operations;
|
● |
potential incompatibility of technologies and systems;
|
● |
failure to leverage the capabilities of the combined company quickly and effectively;
|
● |
potential difficulties integrating and harmonizing business systems and processes;
|
● |
tax benefits of the combined structure may not be available or in the expected amounts; and
|
● |
the loss of key employees.
|
● |
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.
|
● |
compliance with differing or unexpected regulatory requirements for our medicines and foreign employees;
|
● |
complexities associated with managing multiple payer reimbursement regimes, government payers or patient self-pay systems;
|
● |
difficulties in staffing and managing foreign operations;
|
● |
in certain circumstances, increased dependence on the commercialization efforts and regulatory compliance of third-party distributors or strategic partners;
|
● |
foreign government taxes, regulations and permit requirements;
|
● |
U.S. and foreign government tariffs, trade restrictions, price and exchange controls and other regulatory requirements;
|
● |
anti-corruption laws, including the Foreign Corrupt Practices Act, or the FCPA, and its equivalent in foreign jurisdictions;
|
● |
economic weakness, including inflation, natural disasters, war, events of terrorism, political instability or public health issues or pandemics, such as the current COVID-19 Pandemic, in particular foreign countries or globally;
|
● |
fluctuations in currency exchange rates, which could result in increased operating expenses and reduced revenue, and other obligations related to doing business in another country;
|
● |
compliance with tax, employment, privacy, immigration and labor laws, regulations and restrictions for employees living or traveling abroad;
|
● |
workforce uncertainty in countries where labor unrest is more common than in the U.S.; and
|
● |
changes in diplomatic and trade relationships.
|
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
|
|
Amended and Restated Bylaws, filed as an exhibit to Registrant’s Form 8-K filed with the SEC on March 29, 2021 and incorporated herein by reference.
|
||
10.1
|
Letter agreement dated October 21, 2020 to the License Agreement by and among Akcea Therapeutics, Inc. and Pfizer Inc. dated October 4, 2019. Portions of this exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed.
|
|
10.2
|
Board Compensation Policy.
|
|
Code of Ethics, filed as an exhibit to Registrant’s Form 8-K filed with the SEC on March 29, 2021 and incorporated herein by reference.
|
||
31.1
|
Certification by Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
31.2
|
Certification by Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
|
|
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. Quarterly Report on Form 10-Q for the quarter ended March 31, 2021, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of operations, (iii) condensed consolidated statements of comprehensive income (loss), (iv) condensed consolidated statements of stockholders’ equity, (v) condensed consolidated statements of cash flows and (vi) notes to condensed consolidated financial statements (detail tagged).
|
|
104
|
Cover Page Interactive Data File (formatted in iXBRL and included in exhibit 101).
|
* |
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.
|
Signatures
|
Title
|
Date
|
||
/s/ BRETT P. MONIA
|
Director and Chief Executive Officer
|
|||
Brett P. Monia, Ph.D.
|
(Principal executive officer)
|
May 5, 2021
|
||
/s/ ELIZABETH L. HOUGEN
|
Executive Vice President, Finance and Chief Financial Officer
|
|||
Elizabeth L. Hougen
|
(Principal financial and accounting officer)
|
May 5, 2021
|
|
Re: |
AKCEA-ANGPTL3-LRx License Agreement
|
Cash Compensation
|
|
Board Member (base retainer)
|
$60,000(1)
|
Non-Executive Chairman of the Board (additional)
|
$40,000
|
Independent Lead Director (additional)
|
$40,000
|
Committee Chair (additional):
|
|
-Audit
|
$24,000 |
-Commercial Compliance
|
$10,000 |
-Compensation
|
$20,000
|
-Finance
|
$20,000 |
-Nominating, Governance and Review
|
$20,000 |
-Science/Medical
|
$20,000 |
Committee Member (additional):
|
|
-Audit
|
$12,000 |
-Commercial Compliance
|
$5,000 |
-Compensation
|
$10,000 |
-Finance
|
$10,000 |
-Nominating, Governance and Review
|
$10,000 |
-Science/Medical
|
$10,000 |
|
(1) |
Before March 31, 2024 this annual base cash retainer for each non-employee Director (not including fees for Non-Executive Chair, Independent Lead Director, Committee Chair or Committee Member) is limited to a
maximum of $70,000 per year.
|
Type of Grant
|
Number of Shares*
|
Initial Stock Option Grant
|
24,000
|
Initial Restricted Stock Unit Grant
|
10,667
|
Annual Stock Option Grant
|
12,000
|
Annual Restricted Stock Unit Grant
|
5,333
|
1. |
I have reviewed this Quarterly Report on Form 10-Q of Ionis Pharmaceuticals, Inc.;
|
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;
|
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):
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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: May 5, 2021
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/s/ BRETT P. MONIA
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Brett P. Monia, 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;
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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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/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 March 31, 2021, 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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/s/ BRETT P. MONIA
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/s/ ELIZABETH L. HOUGEN
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Brett P. Monia, Ph.D.
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Elizabeth L. Hougen
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Chief Executive Officer
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Chief Financial Officer
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