☒ | 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: |
|
3 |
||
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022 and 2021 (unaudited) |
4 |
|
Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2022 and 2021 (unaudited) |
5 |
|
Condensed Consolidated Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021 (unaudited) |
6 |
|
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2022 and 2021 (unaudited) |
8 |
|
9 |
||
ITEM 2: |
||
29 |
||
33 |
||
39 |
||
ITEM 3: |
41 |
|
ITEM 4: |
41 |
|
PART II |
41 |
|
ITEM 1: |
41 |
|
ITEM 1A: |
42 |
|
ITEM 2: |
60 |
|
ITEM 3: |
60 |
|
ITEM 4: |
60 |
|
ITEM 5: |
60 |
|
ITEM 6: |
61 |
|
62 |
September 30, 2022 |
December 31, 2021 |
|||||||
(unaudited) |
||||||||
ASSETS |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ |
314,993 |
$ |
869,191 |
||||
Short-term investments |
1,666,670 |
1,245,782 |
||||||
Contracts receivable |
6,645 |
61,896 |
||||||
Inventories |
20,645 |
24,806 |
||||||
Other current assets |
143,173 |
143,374 |
||||||
Total current assets |
2,152,126 |
2,345,049 |
||||||
Property, plant and equipment, net |
180,806 |
178,069 |
||||||
Patents, net |
29,605 |
29,005 |
||||||
Deposits and other assets |
59,434 |
59,567 |
||||||
Total assets |
$ |
2,421,971 |
$ |
2,611,690 |
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ |
20,545 |
$ |
11,904 |
||||
Accrued compensation |
30,410 |
38,810 |
||||||
Accrued liabilities |
128,002 |
88,560 |
||||||
Income taxes payable |
16 |
36 |
||||||
Current portion of long-term obligations |
4,970 |
3,526 |
||||||
Current portion of deferred contract revenue |
99,511 |
97,714 |
||||||
Total current liabilities |
283,454 |
240,550 |
||||||
Long-term deferred contract revenue |
294,656 |
351,879 |
||||||
0 percent convertible senior notes, net |
621,460 |
619,119 |
||||||
0.125 percent convertible senior notes, net |
543,955 |
542,314 |
||||||
Long-term obligations, less current portion |
25,107 |
26,378 |
||||||
Long-term mortgage debt |
58,978 |
59,713 |
||||||
Total liabilities |
1,827,610 |
1,839,953 |
||||||
Stockholders’ equity: |
||||||||
Common stock, $0.001 par value; 300,000,000 shares authorized, 142,017,411 and 141,210,015 shares issued and outstanding at September 30, 2022 (unaudited) and December 31, 2021, respectively |
142 |
141 |
||||||
Additional paid-in capital |
2,034,554 |
1,964,167 |
||||||
Accumulated other comprehensive loss |
(63,140 |
) |
(32,668 |
) |
||||
Accumulated deficit |
(1,377,195 |
) |
(1,159,903 |
) |
||||
Total stockholders’ equity |
594,361 |
771,737 |
||||||
Total liabilities and stockholders’ equity |
$ |
2,421,971 |
$ |
2,611,690 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Revenue: |
||||||||||||||||
Commercial revenue: |
||||||||||||||||
SPINRAZA royalties |
$ |
61,647 |
$ |
66,572 |
$ |
175,092 |
$ |
198,726 |
||||||||
TEGSEDI and WAYLIVRA revenue, net |
5,920 |
15,519 |
22,467 |
46,901 |
||||||||||||
Licensing and other royalty revenue |
4,843 |
2,729 |
25,320 |
9,502 |
||||||||||||
Total commercial revenue |
72,410 |
84,820 |
222,879 |
255,129 |
||||||||||||
Research and development revenue: |
||||||||||||||||
Collaborative agreement revenue |
69,250 |
48,273 |
157,282 |
115,321 |
||||||||||||
Eplontersen joint development revenue |
18,107 |
— |
55,317 |
— |
||||||||||||
Total research and development revenue |
87,357 |
48,273 |
212,599 |
115,321 |
||||||||||||
Total revenue |
159,767 |
133,093 |
435,478 |
370,450 |
||||||||||||
Expenses: |
||||||||||||||||
Cost of sales |
1,515 |
3,079 |
10,430 |
8,616 |
||||||||||||
Research, development and patent |
182,990 |
184,770 |
524,875 |
463,878 |
||||||||||||
Selling, general and administrative |
34,416 |
31,093 |
102,345 |
148,747 |
||||||||||||
Total operating expenses |
218,921 |
218,942 |
637,650 |
621,241 |
||||||||||||
Loss from operations |
(59,154 |
) |
(85,849 |
) |
(202,172 |
) |
(250,791 |
) |
||||||||
Other income (expense): |
||||||||||||||||
Investment income, net |
7,524 |
872 |
13,447 |
8,236 |
||||||||||||
Interest expense |
(2,139 |
) |
(2,340 |
) |
(6,391 |
) |
(7,111 |
) |
||||||||
Gain (loss) on investments |
2,347 |
4,013 |
(10,616 |
) |
4,885 |
|||||||||||
Other income (expense) |
4,713 |
(469 |
) |
(7,923 |
) |
(9,283 |
) |
|||||||||
Loss before income tax (expense) benefit |
(46,709 |
) |
(83,773 |
) |
(213,655 |
) |
(254,064 |
) |
||||||||
Income tax (expense) benefit |
(283 |
) |
1,307 |
(3,637 |
) |
854 |
||||||||||
Net loss |
$ |
(46,992 |
) |
$ |
(82,466 |
) |
$ |
(217,292 |
) |
$ |
(253,210 |
) |
||||
Basic and diluted net loss per share |
$ |
(0.33 |
) |
$ |
(0.58 |
) |
$ |
(1.53 |
) |
$ |
(1.80 |
) |
||||
Shares used in computing basic and diluted net loss per share |
141,950 |
141,139 |
141,782 |
140,958 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Net loss |
$ |
(46,992 |
) |
$ |
(82,466 |
) |
$ |
(217,292 |
) |
$ |
(253,210 |
) |
||||
Unrealized losses on debt securities, net of tax |
(8,734 |
) |
(1,618 |
) |
(29,508 |
) |
(6,321 |
) |
||||||||
Currency translation adjustment |
(399 |
) |
(23 |
) |
(964 |
) |
(45 |
) |
||||||||
Comprehensive loss |
$ |
(56,125 |
) |
$ |
(84,107 |
) |
$ |
(247,764 |
) |
$ |
(259,576 |
) |
Common Stock |
Additional |
Accumulated Other |
Accumulated |
Total Stockholders’ |
||||||||||||||||||||
Description |
Shares |
Amount |
Paid in Capital |
Comprehensive Loss |
Deficit |
Equity |
||||||||||||||||||
Balance at June 30, 2021 |
141,022 |
$ |
141 |
$ |
1,910,379 |
$ |
(25,796 |
) |
$ |
(1,302,050 |
) |
$ |
582,674 |
|||||||||||
Net loss |
— |
— |
— |
— |
(82,466 |
) |
(82,466 |
) |
||||||||||||||||
Change in unrealized losses, net of tax |
— |
— |
— |
(1,618 |
) |
— |
(1,618 |
) |
||||||||||||||||
Foreign currency translation |
— |
— |
— |
(23 |
) |
— |
(23 |
) |
||||||||||||||||
Issuance of common stock in connection with employee stock plans |
176 |
— |
1,922 |
— |
— |
1,922 |
||||||||||||||||||
Issuance of warrants |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Purchase of note hedges |
— |
— |
— |
— |
— |
— |
||||||||||||||||||
Stock-based compensation expense |
— |
— |
30,537 |
— |
— |
30,537 |
||||||||||||||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options |
(14 |
) |
— |
(490 |
) |
— |
— |
(490 |
) |
|||||||||||||||
Balance at September 30, 2021 |
141,184 |
$ |
141 |
$ |
1,942,348 |
$ |
(27,437 |
) |
$ |
(1,384,516 |
) |
$ |
530,536 |
|||||||||||
Balance at June 30, 2022 |
141,831 |
$ |
142 |
$ |
2,008,794 |
$ |
(54,007 |
) |
$ |
(1,330,203 |
) |
$ |
624,726 |
|||||||||||
Net loss |
— |
— |
— |
— |
(46,992 |
) |
(46,992 |
) |
||||||||||||||||
Change in unrealized losses, net of tax |
— |
— |
— |
(8,734 |
) |
— |
(8,734 |
) |
||||||||||||||||
Foreign currency translation |
— |
— |
— |
(399 |
) |
— |
(399 |
) |
||||||||||||||||
Issuance of common stock in connection with employee stock plans |
203 |
— |
2,567 |
— |
— |
2,567 |
||||||||||||||||||
Stock-based compensation expense |
— |
— |
23,837 |
— |
— |
23,837 |
||||||||||||||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options |
(17 |
) |
— |
(644 |
) |
— |
— |
(644 |
) |
|||||||||||||||
Balance at September 30, 2022 |
142,017 |
$ |
142 |
$ |
2,034,554 |
$ |
(63,140 |
) |
$ |
(1,377,195 |
) |
$ |
594,361 |
Common Stock |
Additional |
Accumulated Other |
Accumulated |
Total Ionis Stockholders’ |
||||||||||||||||||||
Description |
Shares |
Amount |
Paid in Capital |
Comprehensive Loss |
Deficit |
Equity |
||||||||||||||||||
Balance at December 31, 2020 |
140,366 |
$ |
140 |
$ |
1,895,519 |
$ |
(21,071 |
) |
$ |
(1,131,306 |
) |
$ |
743,282 |
|||||||||||
Net loss |
— |
— |
— |
— |
(253,210 |
) |
(253,210 |
) |
||||||||||||||||
Change in unrealized losses, net of tax |
— |
— |
— |
(6,321 |
) |
— |
(6,321 |
) |
||||||||||||||||
Foreign currency translation |
— |
— |
— |
(45 |
) |
— |
(45 |
) |
||||||||||||||||
Issuance of common stock in connection with employee stock plans |
1,094 |
1 |
11,563 |
— |
— |
11,564 |
||||||||||||||||||
Issuance of warrants |
— |
— |
89,752 |
— |
— |
89,752 |
||||||||||||||||||
Purchase of note hedges |
— |
— |
(136,620 |
) |
— |
— |
(136,620 |
) |
||||||||||||||||
Stock-based compensation expense |
— |
— |
98,419 |
— |
— |
98,419 |
||||||||||||||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options |
(276 |
) |
— |
(16,285 |
) |
— |
— |
(16,285 |
) |
|||||||||||||||
Balance at September 30, 2021 |
141,184 |
$ |
141 |
$ |
1,942,348 |
$ |
(27,437 |
) |
$ |
(1,384,516 |
) |
$ |
530,536 |
|||||||||||
Balance at December 31, 2021 |
141,210 |
$ |
141 |
$ |
1,964,167 |
$ |
(32,668 |
) |
$ |
(1,159,903 |
) |
$ |
771,737 |
|||||||||||
Net loss |
— |
— |
— |
— |
(217,292 |
) |
(217,292 |
) |
||||||||||||||||
Change in unrealized losses, net of tax |
— |
— |
— |
(29,508 |
) |
— |
(29,508 |
) |
||||||||||||||||
Foreign currency translation |
— |
— |
— |
(964 |
) |
— |
(964 |
) |
||||||||||||||||
Issuance of common stock in connection with employee stock plans |
1,138 |
1 |
6,029 |
— |
— |
6,030 |
||||||||||||||||||
Stock-based compensation expense |
— |
— |
74,575 |
— |
— |
74,575 |
||||||||||||||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options |
(331 |
) |
— |
(10,217 |
) |
— |
— |
(10,217 |
) |
|||||||||||||||
Balance at September 30, 2022 |
142,017 |
$ |
142 |
$ |
2,034,554 |
$ |
(63,140 |
) |
$ |
(1,377,195 |
) |
$ |
594,361 |
Nine Months Ended September 30, |
||||||||
2022 |
2021 |
|||||||
Operating activities: |
||||||||
Net loss |
$ |
(217,292 |
) |
$ |
(253,210 |
) |
||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation |
11,301 |
11,665 |
||||||
Amortization of right-of-use operating lease assets |
1,970 |
1,171 |
||||||
Amortization of patents |
1,805 |
1,740 |
||||||
Amortization of premium on investments, net |
9,072 |
13,515 |
||||||
Amortization of debt issuance costs |
4,035 |
3,586 |
||||||
Stock-based compensation expense |
74,575 |
98,419 |
||||||
Loss (gain) on investments |
228 |
(933 |
) |
|||||
Loss on early retirement of debt |
— |
8,627 |
||||||
Non-cash losses related to disposal of property, plant and equipment |
528 |
— |
||||||
Non-cash losses related to patents |
1,155 |
1,150 |
||||||
Changes in operating assets and liabilities: |
||||||||
Contracts receivable |
55,251 |
67,136 |
||||||
Inventories |
4,161 |
(965 |
) |
|||||
Other current and long-term assets |
(988 |
) |
10,358 |
|||||
Income taxes payable |
(20 |
) |
134 |
|||||
Accounts payable |
5,607 |
(10,737 |
) |
|||||
Accrued compensation |
(8,400 |
) |
(33,408 |
) |
||||
Accrued liabilities and other current liabilities |
38,263 |
(19,526 |
) |
|||||
Deferred contract revenue |
(55,426 |
) |
(71,610 |
) |
||||
Net cash used in operating activities |
(74,175 |
) |
(172,888 |
) |
||||
Investing activities: |
||||||||
Purchases of short-term investments |
(1,223,791 |
) |
(930,963 |
) |
||||
Proceeds from sale of short-term investments |
764,101 |
1,051,857 |
||||||
Purchases of property, plant and equipment |
(11,582 |
) |
(9,453 |
) |
||||
Acquisition of licenses and other assets, net |
(3,511 |
) |
(4,459 |
) |
||||
Purchase of Bicycle Therapeutics plc common stock |
— |
(7,185 |
) |
|||||
Net cash (used in) provided by investing activities |
(474,783 |
) |
99,797 |
|||||
Financing activities: |
||||||||
Proceeds from equity, net |
6,030 |
11,564 |
||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options |
(10,217 |
) |
(16,285 |
) |
||||
Proceeds from the issuance of 0 percent convertible notes |
— |
632,500 |
||||||
0 percent convertible senior notes issuance costs |
— |
(15,525 |
) |
|||||
Repurchase of $247.9 million principal amount of the 1 percent convertible senior notes |
— |
(256,963 |
) |
|||||
Proceeds from issuance of warrants |
— |
89,752 |
||||||
Purchase of note hedges |
— |
(136,620 |
) |
|||||
Principal payments on mortgage debt |
(89 |
) |
— |
|||||
Net cash (used in) provided by financing activities |
(4,276 |
) |
308,423 |
|||||
Effects of exchange rates on cash |
(964 |
) |
(43 |
) |
||||
Net (decrease) increase in cash and cash equivalents |
(554,198 |
) |
235,289 |
|||||
Cash and cash equivalents at beginning of period |
869,191 |
397,664 |
||||||
Cash and cash equivalents at end of period |
$ |
314,993 |
$ |
632,953 |
||||
Supplemental disclosures of cash flow information: |
||||||||
Interest paid |
$ |
2,204 |
$ |
3,527 |
||||
Income taxes paid |
$ |
2 |
$ |
3 |
||||
Supplemental disclosures of non-cash investing and financing activities: |
||||||||
Amounts accrued for capital and patent expenditures |
$ |
3,032 |
$ |
1,811 |
||||
Right-of-use assets obtained in exchange for lease liabilities |
$ |
657 |
$ |
— |
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; |
● | Estimated expenses we may incur; |
● | Estimated income taxes; and |
● | A discount rate. |
● | The estimated number of internal hours we will spend performing these services; |
● | The estimated cost of work we will perform; |
● | The estimated cost of work that we will contract with third parties to perform; and |
● | The estimated cost of 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. |
September 30, 2022 |
December 31, 2021 |
|||||||
Clinical development expenses |
$ |
103,635 |
$ |
65,730 |
||||
In-licensing expenses |
7,130 |
8,044 |
||||||
Commercial expenses |
4,188 |
2,471 |
||||||
Other miscellaneous expenses |
13,049 |
12,315 |
||||||
Total accrued liabilities |
$ |
128,002 |
$ |
88,560 |
September 30, 2022 |
December 31, 2021 |
|||||||
Raw materials: |
||||||||
Raw materials- clinical |
$ |
15,598 |
$ |
14,507 |
||||
Raw materials- commercial |
1,019 |
4,139 |
||||||
Total raw materials |
16,617 |
18,646 |
||||||
Work in process |
3,740 |
5,770 |
||||||
Finished goods |
288 |
390 |
||||||
Total inventory |
$ |
20,645 |
$ |
24,806 |
● | 0 percent convertible senior notes, or 0% Notes; |
● | Note hedges related to the 0% Notes; |
● | 0.125 percent convertible senior notes, or 0.125% Notes; |
● | Note hedges related to the 0.125% Notes; |
● | Dilutive stock options; |
● | Unvested restricted stock units, or RSUs; |
● | Unvested performance restricted stock units, or PRSUs; and |
● | Employee Stock Purchase Plan, or ESPP. |
Nine Months Ended September 30, |
||||||||
2022 |
2021 |
|||||||
Risk-free interest rate |
1.9 |
% |
0.5 |
% |
||||
Dividend yield |
0.0 |
% |
0.0 |
% |
||||
Volatility |
54.9 |
% |
54.3 |
% |
||||
Expected life* |
6.3 years |
4.9 years |
* | In 2021, our Compensation Committee approved an amendment to the 2011 Equity Incentive Plan, or 2011 Plan, and 2020 Plan, that increased the contractual term of stock options granted under these plans from seven years to ten years for stock options granted on January 1, 2022 and thereafter. We determined that we are unable to rely on our historical exercise data as a basis for estimating the expected life of stock options granted to employees following this change because the contractual term changed and we have no other means to reasonably estimate future exercise behavior. We therefore used the simplified method for determining the expected life of stock options granted to employees in the nine months ended September 30, 2022. Under the simplified method, we calculate the expected term as the average of the time-to-vesting and the contractual life of the options. As we gain additional historical information, we will transition to calculating our expected term based on our historical exercise patterns. |
Nine Months Ended September 30, |
||||||||
2022 |
2021 |
|||||||
Risk-free interest rate |
2.9 |
% |
1.2 |
% |
||||
Dividend yield |
0.0 |
% |
0.0 |
% |
||||
Volatility |
56.2 |
% |
55.9 |
% |
||||
Expected life |
7.4 years |
7.3 years |
Nine Months Ended September 30, |
||||||||
2022 |
2021 |
|||||||
Risk-free interest rate |
1.2 |
% |
0.1 |
% |
||||
Dividend yield |
0.0 |
% |
0.0 |
% |
||||
Volatility |
50.1 |
% |
42.4 |
% |
||||
Expected life |
6 months |
6 months |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Cost of sales |
$ |
163 |
$ |
111 |
$ |
376 |
$ |
293 |
||||||||
Research, development and patent expense |
17,733 |
23,332 |
55,315 |
71,979 |
||||||||||||
Selling, general and administrative expense |
5,941 |
7,094 |
18,884 |
26,147 |
||||||||||||
Total stock-based compensation expense |
$ |
23,837 |
$ |
30,537 |
$ |
74,575 |
$ |
98,419 |
One year or less |
66 |
% |
||
After one year but within two years |
31 |
% |
||
After two years but within |
3 |
% |
||
Total |
100 |
% |
Amortized |
Gross Unrealized |
Estimated |
||||||||||||||
September 30, 2022 |
Cost |
Gains |
Losses |
Fair Value |
||||||||||||
Available-for-sale securities: |
||||||||||||||||
Corporate debt securities (1) |
$ |
487,666 |
$ |
1 |
$ |
(5,327 |
) |
$ |
482,340 |
|||||||
Debt securities issued by U.S. government agencies |
104,987 |
12 |
(1,686 |
) |
103,313 |
|||||||||||
Debt securities issued by the U.S. Treasury (1) |
462,475 |
22 |
(3,761 |
) |
458,736 |
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states |
72,059 |
— |
(797 |
) |
71,262 |
|||||||||||
Other municipal debt securities |
6,040 |
— |
(76 |
) |
5,964 |
|||||||||||
Total securities with a maturity of one year or less |
1,133,227 |
35 |
(11,647 |
) |
1,121,615 |
|||||||||||
Corporate debt securities |
258,362 |
6 |
(12,654 |
) |
245,714 |
|||||||||||
Debt securities issued by U.S. government agencies |
28,987 |
8 |
(1,541 |
) |
27,454 |
|||||||||||
Debt securities issued by the U.S. Treasury |
298,431 |
13 |
(6,247 |
) |
292,197 |
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states |
14,591 |
2 |
(540 |
) |
14,053 |
|||||||||||
Total securities with a maturity of more than one year |
600,371 |
29 |
(20,982 |
) |
579,418 |
|||||||||||
Total available-for-sale securities |
$ |
1,733,598 |
$ |
64 |
$ |
(32,629 |
) |
$ |
1,701,033 |
|||||||
Equity securities: |
||||||||||||||||
Publicly traded equity securities included in other current assets (2) |
$ |
15,097 |
$ |
— |
$ |
(7,841 |
) |
$ |
7,256 |
|||||||
Privately held equity securities included in deposits and other assets (3) |
23,115 |
17,257 |
— |
40,372 |
||||||||||||
Total equity securities |
38,212 |
17,257 |
(7,841 |
) |
47,628 |
|||||||||||
Total available-for-sale and equity securities |
$ |
1,771,810 |
$ |
17,321 |
$ |
(40,470 |
) |
$ |
1,748,661 |
Amortized |
Gross Unrealized |
Estimated |
||||||||||||||
December 31, 2021 |
Cost |
Gains |
Losses |
Fair Value |
||||||||||||
Available-for-sale securities: |
||||||||||||||||
Corporate debt securities (1) |
$ |
383,870 |
$ |
728 |
$ |
(226 |
) |
$ |
384,372 |
|||||||
Debt securities issued by U.S. government agencies |
48,493 |
19 |
(18 |
) |
48,494 |
|||||||||||
Debt securities issued by the U.S. Treasury (1) |
45,424 |
— |
(64 |
) |
45,360 |
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states |
134,770 |
45 |
(37 |
) |
134,778 |
|||||||||||
Total securities with a maturity of one year or less |
612,557 |
792 |
(345 |
) |
613,004 |
|||||||||||
Corporate debt securities |
382,000 |
331 |
(2,644 |
) |
379,687 |
|||||||||||
Debt securities issued by U.S. government agencies |
72,935 |
— |
(561 |
) |
72,374 |
|||||||||||
Debt securities issued by the U.S. Treasury |
137,635 |
139 |
(500 |
) |
137,274 |
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states |
39,909 |
1 |
(224 |
) |
39,686 |
|||||||||||
Other municipal debt securities |
6,136 |
— |
(37 |
) |
6,099 |
|||||||||||
Total securities with a maturity of more than one year |
638,615 |
471 |
(3,966 |
) |
635,120 |
|||||||||||
Total available-for-sale securities |
$ |
1,251,172 |
$ |
1,263 |
$ |
(4,311 |
) |
$ |
1,248,124 |
|||||||
Equity securities: |
||||||||||||||||
Publicly traded equity securities included in other current assets (2) |
$ |
11,897 |
$ |
7,145 |
$ |
(837 |
) |
$ |
18,205 |
|||||||
Privately held equity securities included in deposits and other assets (3) |
15,615 |
16,707 |
— |
32,322 |
||||||||||||
Total equity securities |
27,512 |
23,852 |
(837 |
) |
50,527 |
|||||||||||
Total available-for-sale and equity securities |
$ |
1,278,684 |
$ |
25,115 |
$ |
(5,148 |
) |
$ |
1,298,651 |
(1) | Includes investments classified as cash equivalents in our condensed consolidated balance sheet. |
(2) | 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. In the nine months ended September 30, 2022, we recognized a $10.9 million unrealized non-cash loss in our condensed consolidated statement of operations related to a decrease in the fair value of our investments in publicly traded companies. |
(3) | 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. |
Less than 12 Months of Temporary Impairment |
More than 12 Months of Temporary Impairment |
Total Temporary Impairment |
||||||||||||||||||||||||||
Number of Investments |
Estimated Fair Value |
Unrealized Losses |
Estimated Fair Value |
Unrealized Losses |
Estimated Fair Value |
Unrealized Losses |
||||||||||||||||||||||
Corporate debt securities |
397 |
$ |
591,245 |
$ |
(10,897 |
) |
$ |
133,763 |
$ |
(7,084 |
) |
$ |
725,008 |
$ |
(17,981 |
) |
||||||||||||
Debt securities issued by U.S. government agencies |
31 |
69,640 |
(875 |
) |
53,299 |
(2,352 |
) |
122,939 |
(3,227 |
) |
||||||||||||||||||
Debt securities issued by the U.S. Treasury |
74 |
643,231 |
(8,327 |
) |
52,767 |
(1,681 |
) |
695,998 |
(10,008 |
) |
||||||||||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states |
140 |
40,160 |
(658 |
) |
21,769 |
(679 |
) |
61,929 |
(1,337 |
) |
||||||||||||||||||
Other municipal debt securities |
2 |
994 |
(12 |
) |
4,970 |
(64 |
) |
5,964 |
(76 |
) |
||||||||||||||||||
Total temporarily impaired securities |
644 |
$ |
1,345,270 |
$ |
(20,769 |
) |
$ |
266,568 |
$ |
(11,860 |
) |
$ |
1,611,838 |
$ |
(32,629 |
) |
At September 30, 2022 |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
Cash equivalents (1) |
$ |
231,960 |
$ |
231,960 |
$ |
— |
$ |
— |
||||||||
Corporate debt securities (2) |
728,054 |
— |
728,054 |
— |
||||||||||||
Debt securities issued by U.S. government agencies (2) |
130,767 |
— |
130,767 |
— |
||||||||||||
Debt securities issued by the U.S. Treasury (3) |
750,933 |
750,933 |
— |
— |
||||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (4) |
85,315 |
— |
85,315 |
— |
||||||||||||
Other municipal debt securities (3) |
5,964 |
— |
5,964 |
— |
||||||||||||
Publicly traded equity securities included in other current assets |
7,256 |
7,256 |
— |
— |
||||||||||||
Total |
$ |
1,940,249 |
$ |
990,149 |
$ |
950,100 |
$ |
— |
At December 31, 2021 |
Quoted Prices in Active Markets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
Cash equivalents (1) |
$ |
541,199 |
$ |
541,199 |
$ |
— |
$ |
— |
||||||||
Corporate debt securities (3) |
764,059 |
— |
764,059 |
— |
||||||||||||
Debt securities issued by U.S. government agencies (3) |
120,868 |
— |
120,868 |
— |
||||||||||||
Debt securities issued by the U.S. Treasury (3) |
182,634 |
182,634 |
— |
— |
||||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (5) |
174,464 |
— |
174,464 |
— |
||||||||||||
Other municipal debt securities (3) |
6,099 |
— |
6,099 |
— |
||||||||||||
Publicly traded equity securities included in other current assets |
18,205 |
3,875 |
— |
14,330 |
||||||||||||
Total |
$ |
1,807,528 |
$ |
727,708 |
$ |
1,065,490 |
$ |
14,330 |
(1) | Included in cash and cash equivalents in our condensed consolidated balance sheet. |
(2) | $23.5 million was included in cash and cash equivalents in our condensed consolidated balance sheet, with the difference included in short-term investments in our condensed consolidated balance sheet. |
(3) | Included in short-term investments. |
(4) | $10.0 million was included in cash and cash equivalents in our condensed consolidated balance sheet, with the difference included in short-term investments in our condensed consolidated balance sheet. |
(5) | $2.3 million was included in cash and cash equivalents in our condensed consolidated balance sheet, with the difference included in short-term investments in our condensed consolidated balance sheet. |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
SPINRAZA royalties (commercial revenue) |
$ |
61.6 |
$ |
66.6 |
$ |
175.1 |
$ |
198.7 |
||||||||
R&D revenue |
27.4 |
17.4 |
84.6 |
63.4 |
||||||||||||
Total revenue from our relationship with Biogen |
$ |
89.0 |
$ |
84.0 |
$ |
259.7 |
$ |
262.1 |
||||||||
Percentage of total revenue |
56 |
% |
63 |
% |
60 |
% |
71 |
% |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
R&D revenue |
$ |
41.5 |
$ |
3.9 |
$ |
65.4 |
$ |
11.4 |
||||||||
Percentage of total revenue |
26 |
% |
3 |
% |
15 |
% |
3 |
% |
0% Notes |
||||
Outstanding principal balance |
$ |
632.5 |
||
Unamortized debt issuance costs |
$ |
11.0 |
||
Maturity date |
||||
Interest rate |
0 percent |
|||
Effective interest rate |
0.5 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 |
||
Unamortized debt issuance costs |
$ |
4.9 |
||
Maturity date |
||||
Interest rate |
0.125 percent |
|||
Effective interest rate |
0.5 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 |
● | Eplontersen: our medicine in development for transthyretin amyloidosis, or ATTR |
o | We are currently conducting the Phase 3 NEURO-TTransform study in patients with ATTRv-PN, the Phase 3 CARDIO-TTransform study in patients with ATTR cardiomyopathy, or ATTR-CM, and additional studies supporting our ATTR development program |
● | In September 2022, we presented positive results from an interim analysis of the Phase 3 NEURO-TTRansform study of eplontersen in patients with ATTRv-PN at the International Symposium on Amyloidosis |
● | In the fourth quarter of 2022, we expanded enrollment in the Phase 3 CARDIO-TTRansform study of eplontersen in patients with ATTR cardiomyopathy, or ATTR-CM |
● | Eplontersen was granted orphan drug designation by the FDA for the treatment of patients with ATTR |
● | Tofersen: our medicine in development for SOD1-ALS |
o | Biogen is developing tofersen for the treatment of SOD-1 ALS, including conducting the ongoing Phase 3 VALOR open label extension, or OLE, study in patients with SOD1-ALS and the ongoing Phase 3 ATLAS study in presymptomatic SOD-1 patients |
● | Tofersen is currently under priority review with the FDA and has a PDUFA action date of April 25, 2023 |
● | In June 2022, Biogen presented new data from the ongoing VALOR OLE study at the European Network to Cure ALS meeting. These data were included in the NDA filing |
● | Olezarsen: our medicine in development for FCS and severe hypertriglyceridemia, or SHTG |
o | We are currently conducting a broad development program for olezarsen that includes the BALANCE study in patients with FCS and three Phase 3 studies supporting development for the treatment of SHTG, CORE, CORE2 and ESSENCE |
● | In July 2022, we achieved full enrollment in the BALANCE Phase 3 study in patients with FCS supporting data readout mid-year 2023 |
● | In the third quarter of 2022, we initiated CORE2, a confirmatory Phase 3 study of olezarsen in patients with SHTG |
● | In the fourth quarter of 2022, we initiated ESSENCE, a supporting Phase 3 study of olezarsen in patients with SHTG or hypertriglyceridemia and atherosclerotic cardiovascular disease |
● | Pelacarsen: our medicine in development for lipoprotein(a), or Lp(a), driven cardiovascular disease |
o | Novartis is developing pelacarsen, including conducting the ongoing Lp(a) HORIZON Phase 3 cardiovascular outcome study in patients with established cardiovascular disease and elevated Lp(a) |
● | In July 2022, Novartis achieved full enrollment in the Lp(a) HORIZON Phase 3 cardiovascular outcome study |
● | Donidalorsen: our medicine in development for hereditary angioedema, or HAE |
o | We are currently conducting the OASIS study in patients with HAE and OASIS Plus supportive study for HAE patients previously treated with other prophylactic therapies |
● | We plan to present new efficacy and safety results from the Phase 2 OLE study of donidalorsen in HAE patients treated for one year at the American College of Allergy, Asthma and Immunology Annual Scientific Meeting in November 2022 |
● | ION363: our medicine in development for amyotrophic lateral sclerosis, or ALS, with mutations in the fused in sarcoma gene, or FUS. FUS-ALS is the most common cause of juvenile-onset ALS |
o | We are currently conducting a Phase 3 study of ION363 in juvenile and adult patients with FUS-ALS and enrollment is ongoing |
● | GSK presented positive end of study data from the Phase 2b B-Clear study of bepirovirsen demonstrating potential for functional cures in patients with chronic hepatitis B; GSK plans to advance bepirovirsen into Phase 3 development in the first half of 2023 |
● | We presented positive data from the Phase 2 study of IONIS-FB-LRx in patients with IgAN; Roche plans to advance IONIS-FB-LRx into Phase 3 development in the first half of 2023 |
● | Bayer presented positive data from the Phase 2b study of fesomersen in patients with end-stage renal disease; we regained rights to fesomersen from Bayer and are assessing next steps |
● | Roche presented the Phase 2 GENERATION HD2 study design of tominersen in Huntington’s disease, or HD, patients; Roche plans to begin enrollment in early 2023 |
● | We reported ION449 (AZD8233) targeting PCSK9 met the primary endpoint in Phase 2b SOLANO study in patients with hypercholesterolemia; based on pre-specified efficacy criteria, AstraZeneca is not advancing ION449 |
Three Months Ended |
Nine Months Ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Total revenue |
$ |
159.8 |
$ |
133.1 |
$ |
435.5 |
$ |
370.5 |
||||||||
Total operating expenses |
$ |
218.9 |
$ |
218.9 |
$ |
637.7 |
$ |
621.2 |
||||||||
Loss from operations |
$ |
(59.2 |
) |
$ |
(85.8 |
) |
$ |
(202.2 |
) |
$ |
(250.8 |
) |
||||
Net loss |
$ |
(47.0 |
) |
$ |
(82.5 |
) |
$ |
(217.3 |
) |
$ |
(253.2 |
) |
● | Revenue increased 20 percent for the third quarter of 2022 and 18 percent on a year-to-date basis compared to the same periods in 2021 driven by significant partner payments earned across multiple programs |
● | Operating expenses were flat for the three months ended September 30, 2022 compared to the same period in 2021 and increased 3 percent for the nine months ended September 30, 2022. Refer to the Results of Operations section for discussions on period-over-period changes for the various components of operating expenses |
● | As of September 30, 2022, we had $2.0 billion in cash and short-term investments. Subsequent to September 30, 2022, we entered into several real-estate transactions, which increased our cash balance. Refer to the section titled, Liquidity and Capital Resources, for further details on these real-estate transactions. |
Collaboration Activities |
Financial Statement Line |
Impact of Cost-Sharing Provisions on our Statement of Operations |
||||
Phase 3 Development: Ionis leads and conducts |
Eplontersen Joint Development Revenue (R&D Revenue) |
$55M |
55% of Ionis’ Phase 3 development expenses, including internal+external costs & CMC costs, net of our share of AstraZeneca’s Phase 3 development expenses |
|||
Development Expenses (R&D expenses) |
$107M |
100% of Ionis’ Phase 3 development expenses |
● | Assessing the propriety of revenue recognition and associated deferred revenue; and |
● | Determining the appropriate cost estimates for unbilled preclinical studies and clinical development activities. |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Revenue: |
||||||||||||||||
Commercial revenue: |
||||||||||||||||
SPINRAZA royalties |
$ |
61.6 |
$ |
66.6 |
$ |
175.1 |
$ |
198.7 |
||||||||
TEGSEDI and WAYLIVRA revenue, net |
5.9 |
15.5 |
22.5 |
46.9 |
||||||||||||
Licensing and other royalty revenue |
4.9 |
2.7 |
25.3 |
9.5 |
||||||||||||
Total commercial revenue |
72.4 |
84.8 |
222.9 |
255.1 |
||||||||||||
R&D revenue: |
||||||||||||||||
Amortization from upfront payments |
18.1 |
16.7 |
54.0 |
56.8 |
||||||||||||
Milestone payments |
14.9 |
28.4 |
59.7 |
48.5 |
||||||||||||
License fees |
35.0 |
— |
37.0 |
— |
||||||||||||
Other services |
1.3 |
3.2 |
6.6 |
10.1 |
||||||||||||
Collaborative agreement revenue |
69.3 |
48.3 |
157.3 |
115.4 |
||||||||||||
Eplontersen joint development revenue |
18.1 |
— |
55.3 |
— |
||||||||||||
Total R&D revenue |
87.4 |
48.3 |
212.6 |
115.4 |
||||||||||||
Total revenue |
$ |
159.8 |
$ |
133.1 |
$ |
435.5 |
$ |
370.5 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Operating expenses, excluding non-cash compensation expense related to equity awards |
$ |
195.1 |
$ |
185.5 |
$ |
563.1 |
$ |
498.3 |
||||||||
Restructuring expenses |
— |
2.8 |
— |
24.4 |
||||||||||||
Total operating expenses, excluding non-cash compensation expense related to equity awards |
195.1 |
188.3 |
563.1 |
522.7 |
||||||||||||
Non-cash compensation expense related to equity awards |
23.8 |
30.6 |
74.6 |
98.5 |
||||||||||||
Total operating expenses |
$ |
218.9 |
$ |
218.9 |
$ |
637.7 |
$ |
621.2 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Cost of sales, excluding non-cash compensation expense related to equity awards |
$ |
1.3 |
$ |
3.0 |
$ |
9.9 |
$ |
8.3 |
||||||||
Non-cash compensation expense related to equity awards |
0.2 |
0.1 |
0.5 |
0.3 |
||||||||||||
Total cost of sales |
$ |
1.5 |
$ |
3.1 |
$ |
10.4 |
$ |
8.6 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Research, development and patent expenses, excluding non-cash compensation expense related to equity awards |
$ |
165.3 |
$ |
159.6 |
$ |
469.6 |
$ |
383.9 |
||||||||
Restructuring expenses |
— |
1.8 |
— |
8.0 |
||||||||||||
Total research, development and patent expenses, excluding non-cash compensation expense related to equity awards |
165.3 |
161.4 |
469.6 |
391.9 |
||||||||||||
Non-cash compensation expense related to equity awards |
17.7 |
23.4 |
55.3 |
72.0 |
||||||||||||
Total research, development and patent expenses |
$ |
183.0 |
$ |
184.8 |
$ |
524.9 |
$ |
463.9 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Antisense drug discovery expenses, excluding non-cash compensation expense related to equity awards |
$ |
25.0 |
$ |
55.9 |
$ |
68.6 |
$ |
105.7 |
||||||||
Non-cash compensation expense related to equity awards |
4.2 |
5.9 |
12.8 |
17.5 |
||||||||||||
Total antisense drug discovery expenses |
$ |
29.2 |
$ |
61.8 |
$ |
81.4 |
$ |
123.2 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
TEGSEDI and WAYLIVRA |
$ |
3.9 |
$ |
3.3 |
$ |
9.4 |
$ |
4.7 |
||||||||
Eplontersen |
24.5 |
23.0 |
75.8 |
52.2 |
||||||||||||
Olezarsen |
18.3 |
4.9 |
39.7 |
10.4 |
||||||||||||
Donidalorsen |
5.5 |
2.0 |
9.1 |
4.6 |
||||||||||||
ION363 |
2.3 |
1.8 |
5.8 |
5.5 |
||||||||||||
Other antisense development projects |
31.6 |
25.1 |
91.7 |
70.9 |
||||||||||||
Development overhead expenses |
22.5 |
18.6 |
63.3 |
55.1 |
||||||||||||
Restructuring expenses |
— |
1.5 |
— |
7.2 |
||||||||||||
Total antisense drug development, excluding non-cash compensation expense related to equity awards |
108.6 |
80.2 |
294.8 |
210.6 |
||||||||||||
Non-cash compensation expense related to equity awards |
7.6 |
9.7 |
15.6 |
31.3 |
||||||||||||
Total antisense drug development expenses |
$ |
116.2 |
$ |
89.9 |
$ |
310.4 |
$ |
241.9 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Medical affairs expenses, excluding non-cash compensation expense related to equity awards |
$ |
3.8 |
$ |
2.5 |
$ |
11.4 |
$ |
8.9 |
||||||||
Non-cash compensation expense related to equity awards |
0.6 |
0.5 |
1.3 |
1.1 |
||||||||||||
Total medical affairs expenses |
$ |
4.4 |
$ |
3.0 |
$ |
12.7 |
$ |
10.0 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Manufacturing and development chemistry expenses, excluding non-cash compensation expense related to equity awards |
$ |
14.0 |
$ |
10.9 |
$ |
53.4 |
$ |
31.3 |
||||||||
Restructuring expenses |
— |
0.2 |
— |
0.8 |
||||||||||||
Total manufacturing and development chemistry expenses, excluding non-cash compensation expense related to equity awards |
14.0 |
11.1 |
53.4 |
32.1 |
||||||||||||
Non-cash compensation expense related to equity awards |
2.3 |
2.9 |
7.6 |
9.1 |
||||||||||||
Total manufacturing and development chemistry expenses |
$ |
16.3 |
$ |
14.0 |
$ |
61.0 |
$ |
41.2 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Personnel costs |
$ |
5.3 |
$ |
4.7 |
$ |
15.4 |
$ |
13.2 |
||||||||
Occupancy |
4.1 |
3.2 |
12.3 |
9.6 |
||||||||||||
Patent expenses |
0.9 |
1.0 |
3.1 |
3.1 |
||||||||||||
Insurance |
1.0 |
0.8 |
2.8 |
2.4 |
||||||||||||
Computer software and licenses |
0.1 |
0.3 |
1.1 |
1.4 |
||||||||||||
Other |
2.5 |
1.6 |
6.7 |
4.8 |
||||||||||||
Restructuring expenses |
— |
0.1 |
— |
0.1 |
||||||||||||
Total R&D support expenses, excluding non-cash compensation expense related to equity awards |
13.9 |
11.7 |
41.4 |
34.6 |
||||||||||||
Non-cash compensation expense related to equity awards |
3.0 |
4.4 |
10.4 |
13.0 |
||||||||||||
Total R&D support expenses |
$ |
16.9 |
$ |
16.1 |
$ |
51.8 |
$ |
47.6 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Selling, general and administrative expenses, excluding non-cash compensation expense related to equity awards |
$ |
28.5 |
$ |
23.0 |
$ |
83.6 |
$ |
106.1 |
||||||||
Restructuring expenses |
— |
1.0 |
— |
16.4 |
||||||||||||
Total selling, general and administrative expenses, excluding non-cash compensation related to equity awards |
28.5 |
24.0 |
83.6 |
122.5 |
||||||||||||
Non-cash compensation expense related to equity awards |
5.9 |
7.1 |
18.8 |
26.2 |
||||||||||||
Total selling, general and administrative expenses |
$ |
34.4 |
$ |
31.1 |
$ |
102.4 |
$ |
148.7 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Investment income |
$ |
7.5 |
$ |
0.9 |
$ |
13.4 |
$ |
8.2 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Convertible notes: |
||||||||||||||||
Non-cash amortization of debt issuance costs |
$ |
1.3 |
$ |
1.4 |
$ |
4.0 |
$ |
3.5 |
||||||||
Interest expense payable in cash |
0.2 |
0.3 |
0.5 |
1.7 |
||||||||||||
Interest on mortgages for primary R&D and manufacturing facilities |
0.6 |
0.6 |
1.9 |
1.9 |
||||||||||||
Total interest expense |
$ |
2.1 |
$ |
2.3 |
$ |
6.4 |
$ |
7.1 |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
Gain (loss) on investments |
$ |
2.3 |
$ |
4.0 |
$ |
(10.6 |
) |
$ |
4.9 |
Payments Due by Period (in millions) |
||||||||||||
(selected balances described below) |
Total |
Less than 1 year |
More than 1 year |
|||||||||
0% Notes (principal payable) |
$ |
632.5 |
$ |
— |
$ |
632.5 |
||||||
0.125% Notes (principal and interest payable) |
550.6 |
0.7 |
549.9 |
|||||||||
Building mortgage payments (principal and interest payable) |
71.5 |
3.4 |
68.1 |
|||||||||
Operating leases |
25.3 |
4.4 |
20.9 |
|||||||||
Other obligations (principal and interest payable) |
0.8 |
0.1 |
0.7 |
|||||||||
Total |
$ |
1,280.7 |
$ |
8.6 |
$ |
1,272.1 |
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 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. |
● | delays in clinical site initiation, site monitoring 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 eplontersen 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; |
● | delays in site initiations due to principle investigators and site staff focusing on and prioritizing COVID-19 patient care; and |
● | delays in necessary interactions with regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government or contractor personnel. |
● | 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, tafamidis meglumine and vutrisiran compete with TEGSEDI and could compete with eplontersen; |
● | Acoramidis could compete with TEGSEDI and eplontersen; |
● | ARO-APOC3, lomitapide, evinacumab, BIO89-100, and gemcabene could compete with WAYLIVRA and olezarsen; |
● | AMG890 could compete with pelacarsen; |
● | Arimoclomol, ultomiris, mastinib and trehalose could compete with tofersen; and |
● | Lanadelumab-flyo, C1 esterase inhibitor, berotralstat, C1 esterase inhibitor subcutaneous, garadacimab, KVD824, and NTLA-2002 could compete with donidalorsen. |
● | 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; |
● | 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. |
● | AstraZeneca for the joint development and funding of eplontersen; |
● | Novartis for development and funding of pelacarsen; |
● | Biogen for development and funding of tofersen; and |
● | Roche for development and funding of tominersen. |
● | 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 eplontersen, olezarsen, donidalorsen, ION363, pelacarsen and tofersen; |
● | changes in existing collaborative relationships and our ability to establish and maintain additional collaborative arrangements; |
● | continued scientific progress in our research, drug discovery and development programs; |
● | the size of our programs and progress with preclinical and clinical studies; |
● | the time and costs involved in obtaining marketing authorizations; |
● | competing technological and market developments, including the introduction by others of new therapies that address our markets; and |
● | our manufacturing requirements and capacity to fulfill such requirements. |
● | 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 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 |
a. | Exhibits |
Exhibit Number |
Description of Document |
|
Amendment No. 2 dated July 28, 2022 to the Collaboration and License Agreement by and between the Registrant and BicycleTx Limited dated July 9, 2021. 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 |
First Amendment dated July 8, 2022 to the Factor B Development, Collaboration, Option and License Agreement by and between the Registrant, F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., dated October 9, 2018. Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2022 and incorporated herein by reference. Portions of this exhibit have been omitted because they are both (i) not material and (ii) would be competitively harmful if publicly disclosed. |
|
Certification by Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended. |
||
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 September 30, 2022, 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) |
November 9, 2022 |
||
/s/ ELIZABETH L. HOUGEN |
Executive Vice President, Finance and Chief Financial Officer |
|||
Elizabeth L. Hougen |
(Principal financial and accounting officer) |
November 9, 2022 |
CONFIDENTIAL
|
Execution Version
|
1.1 |
Capitalized Terms. Capitalized terms used in this Second Amendment shall have the meanings set forth in the Agreement and First Amendment, unless otherwise defined in this Second Amendment. Section
references set forth in this Second Amendment shall refer to section references in this Second Amendment, unless expressly stated to refer to sections of the Agreement or the First Amendment.
|
2.1 |
Additional Activities. The Parties desire to extend the Additional Research Period by [***]. Accordingly, Section 2.1 of Article 2 of the First Amendment shall be deleted in its entirety and replaced
with:
|
2.2 |
Initial Period. The Parties wish to extend the Initial Period by three months. Accordingly, Section 2.4.1 of Article 2 of the First Amendment shall be deleted in its entirety and replaced with:
|
3.1 |
No Waiver. Nothing in this Second Amendment is intended to operate as a waiver of any claims either Party may have against the other Party arising prior to the date of this Second Amendment under the
Agreement. Any term or condition of this Second Amendment may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless it is in writing and signed by the Party waiving such term
or condition. The waiver by either Party hereto of any right hereunder or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach by such other Party whether of a similar nature or
otherwise.
|
3.2 |
Miscellaneous. This Second Amendment and the performance, enforcement, breach, and termination hereof shall be interpreted, governed by, and construed in accordance with the laws of the State of New
York, United States excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Second Amendment to the substantive law of another jurisdiction. Any dispute arising from or
relating to this Second Amendment will be subject to resolution in accordance with Section 12.2 of the Agreement. Except as specifically amended by this Second Amendment, the terms and conditions of the Agreement (as amended by the First
Amendment) shall remain in full force and effect. Except to the extent expressly provided herein, the Agreement, as amended by the First Amendment and this Second Amendment, including all appendices, exhibits and schedules to each of the
foregoing, sets forth the entire agreement and understanding between the Parties with respect to the subject matter of the Agreement (as amended) and all prior agreements, understandings, promises, and representations, whether written or
oral, with respect thereto are superseded hereby. This Second Amendment may be executed in two or more counterparts in original, facsimile, PDF, or other electronic format, each of which shall be an original, and all of which together shall
constitute one instrument.
|
BICYCLETX LIMITED
|
IONIS PHARMACEUTICALS, INC.
|
By:
|
/s/ Michael Skynner |
By:
|
/s/ Brett Monia |
Name:
|
Michael Skynner |
Name:
|
Brett Monia |
Title:
|
Chief Technology Officer |
Title:
|
CEO |
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; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Dated: November 9, 2022 | |
/s/ BRETT P. MONIA | |
Brett P. Monia, Ph.D. | |
Chief Executive Officer |
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; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ ELIZABETH L. HOUGEN | |
Elizabeth L. Hougen | |
Chief Financial Officer |
1. | The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2022, 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 |
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. |
/s/ BRETT P. MONIA | /s/ ELIZABETH L. HOUGEN | ||
Brett P. Monia, Ph.D. | Elizabeth L. Hougen | ||
Chief Executive Officer | Chief Financial Officer |