Delaware
|
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33
-
0336973
|
(State or other jurisdiction of
incorporation or organization) |
|
(IRS Employer Identification No.)
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Large accelerated filer
|
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Accelerated filer
|
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|
Non-accelerated filer
(Do not check if a smaller reporting company) |
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Smaller reporting company
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* |
Excludes 20,485,236 shares of common stock held by directors and officers and by stockholders whose beneficial ownership is known by the Registrant to exceed 10 percent of the common stock outstanding at June 30, 2016. Exclusion of shares held by any person should not be construed to indicate that such person possesses the power, direct or indirect, to direct or cause the direction of the management or policies of the Registrant, or that such person is controlled by or under common control with the Registrant.
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PART I
|
||
Page
|
||
Item 1.
|
Business
|
3
|
Item 1A.
|
Risk Factors
|
37
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Item 1B.
|
Unresolved Staff Comments
|
44
|
Item 2.
|
Properties
|
44
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Item 3.
|
Legal Proceedings
|
44
|
Item 4.
|
Mine Safety Disclosures
|
45
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PART II
|
||
Item 5.
|
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
45
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Item 6.
|
Selected Financial Data
|
47
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Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
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47
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Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
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67
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Item 8.
|
Financial Statements and Supplementary Data
|
67
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Item 9.
|
Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
|
67
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Item 9A.
|
Controls and Procedures
|
67
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Item 9B.
|
Other Information
|
69
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PART III
|
||
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
69
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Item 11.
|
Executive Compensation
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69
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Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
69
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
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69
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Item 14.
|
Principal Accounting Fees and Services
|
69
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PART IV
|
||
Item 15.
|
Exhibits, Financial Statement Schedules
|
70
|
Signatures
|
● |
We and Biogen achieved FDA approval of SPINRAZA in three months under Priority Review for the treatment of SMA in pediatric and adult patients.
|
● |
Biogen filed for marketing authorization in the EU and was granted Accelerated Assessment.
|
● |
Biogen filed for marketing authorization in Canada, Japan, and Australia.
|
● |
Biogen reported positive data from an end of study analysis of the ENDEAR Phase 3 study in patients with infantile-onset (consistent with type 1) SMA at the British Pediatric Neurology Association annual conference. We previously reported data from an interim analysis of ENDEAR, which along with several other studies, formed the basis for the marketing application for SPINRAZA in the U.S.
|
● |
We and Biogen reported positive data from an interim analysis of the Phase 3 CHERISH study in patients with later-onset (consistent with Type 2) SMA.
|
● |
We and Biogen presented new positive clinical data with SPINRAZA at the World Muscle Society Congress supporting the companies' efforts to rapidly make SPINRAZA available to patients with SMA, including:
|
o
|
Safety results from the interim analysis of the Phase 3 ENDEAR study in patients with infantile-onset (consistent with Type 1) SMA;
|
o
|
Encouraging preliminary results from NURTURE, a Phase 2 open-label study in pre-symptomatic infants; and
|
o
|
A recent analysis of the ongoing Phase 2 open-label study in patients with later-onset SMA.
|
● |
We and Biogen reported positive data from an interim analysis of the ENDEAR Phase 3 study in patients with infantile-onset (consistent with Type 1) SMA. Biogen paid us $75 million to license the drug.
|
● |
We earned more than $200 million from Biogen in 2016, including payments related to SPINRAZA.
|
● |
We and Akcea formed a strategic collaboration with Novartis to develop and co-commercialize AKCEA-APO(a)-L
Rx
and AKCEA-APOCIII-L
Rx
for the treatment of lipid disorders, for which Ionis and Akcea are eligible to receive $225 million in near-term payments, including $100 million we have received and $75 million we expect to receive in the first quarter of 2017. The transaction has a potential value of up to over $1 billion.
|
● |
We earned $75 million from Bayer to advance both IONIS-FXI
Rx
and its LICA follow on, IONIS-FXI-L
Rx
.
|
● |
We sold the global rights to develop and commercialize Kynamro to Kastle Therapeutics and earned a $15 million upfront payment.
|
● |
We and MD Anderson Cancer Center formed a strategic alliance to advance novel cancer therapies.
|
● |
We added to our pipeline our first oral locally acting drug for gastrointestinal autoimmune diseases for which Ionis earned a $10 million license fee from Janssen.
|
● |
We advanced IONIS-KRAS-2.5
Rx
into development and earned $28 million from AstraZeneca.
|
● |
We advanced IONIS-AZ4-2.5-L
Rx
, our first Generation 2.5 LICA drug, into development and earned $25 million from AstraZeneca.
|
● |
Our CEO, Dr. Stanley Crooke, received two awards, the E. B. Hershberg Award from the American Chemical Society and the Lifetime Achievement Award from the Oligonucleotide Therapeutics Society, recognizing his achievements in the field of oligonucleotide therapeutics.
|
● |
We continued to advance our pipeline of innovative first-in-class or best-in-class drugs, reported positive data from 11 clinical studies with six drugs. These data and clinical advancements represent the broad applicability of our technology to address unmet medical needs across multiple disease targets.
|
● |
The FDA and EMA granted orphan drug designation to IONIS-HTT
Rx
for the treatment of patients with Huntington's disease.
|
● |
Akcea launched IN-FOCUS, a research study to assess the impact of FCS.
|
● |
Akcea published positive clinical data from a Phase 2 study of volanesorsen in patients with high plasma triglyceride levels and type 2 diabetes in
Diabetes Care
.
|
● |
We published a paper in
Nature Biotechnology
on the novel mechanism of action for antisense drugs that significantly expands therapeutic opportunities for the technology.
|
·
|
We published a paper in
Nucleic Acid Therapeutics
on the analysis of its Integrated Safety Database, which demonstrated no class generic effect of 2’-O-methoxyethyl (2’MOE)-modified antisense oligonucleotides (ASOs) on platelet numbers and function.
|
● |
Direct application to diseases at the genetic level by targeting RNA: antisense technology represents a direct route from gene to drug. The explosion in genomic information has led to the discovery of many new disease-causing proteins and RNAs, and has created new opportunities accessible to antisense technology.
|
● |
Precise specificity: we design antisense drugs to target a single RNA, which minimizes or eliminates the possibility our drugs will bind to unintended targets which can cause unwanted side effects.
|
● |
Good drug properties: antisense drugs distribute well throughout the body without the need for special formulations or vehicles. They also have a relatively long half-life of approximately two to four weeks, which means patients and/or healthcare providers can dose our drugs once a week. Antisense drugs using our more advanced technology also have the potential for patients and/or their healthcare providers to dose our drugs once a month, once a quarter or even less frequently.
|
● |
Ability to combine with other drugs: because antisense drugs do not interact with the enzymes that metabolize or break down other drugs, physicians can use our drugs in combination with other drugs.
|
● |
Broad applications to multiple disease targets, multiple tissues and multiple mechanisms: there are virtually no “undruggable” targets with antisense technology.
|
● |
Efficient discovery and early development: because of the efficiency of our antisense technology, our drug discovery and early development costs and success rates compare favorably to small molecule or antibody drug discovery and development.
|
● |
We have strategic partnerships through which we can broadly expand our drug discovery efforts to new disease targets in specific therapeutic areas. Our partners provide expertise, tools and resources to complement our drug discovery efforts. For instance, we established a broad strategic alliance with Biogen that pairs Biogen’s extensive resources and expertise in neurodegenerative diseases with our antisense technology. Together we are creating a franchise of novel potential drugs for neurodegenerative diseases that we believe will expand both our pipeline and Biogen’s pipeline with promising new drugs. Most recently, we licensed SPINRAZA to Biogen and began receiving commercial revenue from SPINRAZA royalties in December 2016 after SPINRAZA’s approval by the FDA.
|
● |
We have partnerships with companies that bring significant expertise and global resources to develop and potentially commercialize drugs for a particular therapeutic area. In January 2017, we and Akcea initiated a collaboration with Novartis to develop and commercialize AKCEA-APO(a)-L
Rx
and AKCEA-APOCIII-L
Rx
. As a leader in the cardiovascular disease space, Novartis brings significant resources and expertise that should support the development and commercialization of these two drugs for significant high-risk patient populations. The collaboration with Novartis should enable us to accelerate the development of these drugs for broader patient populations as Novartis plans to conduct a cardiovascular outcomes study for each of these drugs.
|
● |
We also form early stage research and development partnerships that allow us to expand the application of our technology to new therapeutic areas. For example, we established a collaboration with Janssen, which brings together our RNA-targeted technology platform and Janssen’s expertise in autoimmune disorders and therapeutic formulation to discover and develop antisense drugs to treat autoimmune disorders in the gastrointestinal, or GI, tract.
|
● |
We also work with a consortium of companies that can exploit our drugs and technologies outside our primary areas of focus. We refer to these companies as satellite companies. Through our satellite company collaborations, we expand the reach and potential of RNA-targeting therapeutics into disease areas that are outside of our core focus.
|
Type of Patent Claim
|
Description
|
||
1. Chemically Modified Nucleosides and Oligonucleotides
1. Antisense Drug Design Motifs
2. Therapeutic Methods
3. Antisense Sequence
4. Drug Composition
|
|
1. Target and sequence independent
2. Sequence independent
3. Chemistry independent
4. Specific claim to drug candidates
|
|
Jurisdiction
|
|
Patent No.
|
|
Title
|
|
Expiration
|
|
Description of Claims
|
|
|
|
|
|
|
|
|
|
United States
|
|
7,101,993
|
|
OLIGONUCLEOTIDES CONTAINING 2’O-MODIFIED PURINES
|
|
2023
|
|
Covers certain MOE nucleosides and oligonucleotides containing these nucleotides.
|
United States
|
|
7,399,845
|
|
6-MODIFIED BICYCLIC NUCLEIC ACID ANALOGS
|
|
2027
|
|
Covers our cEt nucleosides and oligonucleotides containing these nucleoside analogs.
|
United States
|
|
7,741,457
|
|
6-MODIFIED BICYCLIC NUCLEIC ACID ANALOGS
|
|
2027
|
|
Covers our cEt nucleosides and oligonucleotides containing these nucleoside analogs.
|
United States
|
|
8,022,193
|
|
6-MODIFIED BICYCLIC NUCLEIC ACID ANALOGS
|
|
2027
|
|
Covers our cEt nucleosides and oligonucleotides containing these nucleoside analogs.
|
United States
|
7,569,686
|
COMPOUNDS AND METHODS FOR SYNTHESIS OF BICYCLIC NUCLEIC ACID ANALOGS
|
2027
|
Covers methods of synthesizing our cEt nucleosides.
|
||||
Europe
|
EP1984381
|
6-MODIFIED BICYCLIC NUCLEIC ACID ANALOGS
|
2027
|
Covers our cEt nucleosides and oligonucleotides containing these nucleoside analogs.
|
||||
Europe
|
EP2314594
|
6-MODIFIED BICYCLIC NUCLEIC ACID ANALOGS
|
2027
|
Covers our cEt oligonucleotides and methods of use.
|
||||
Japan
|
JP5342881
|
6-MODIFIED BICYCLIC NUCLEIC ACID ANALOGS
|
2027
|
Covers our cEt nucleosides and oligonucleotides containing these nucleoside analogs.
|
Jurisdiction
|
|
Patent/
Application No. |
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
7,015,315
|
|
GAPPED OLIGONUCLEOTIDES
|
|
2023
|
|
Covers 2’-O-alkyl-O-alkyl gapmer oligonucleotides.
|
Europe
|
|
EP2021472
|
|
COMPOUNDS AND METHODS FOR MODULATING GENE EXPRESSION
|
|
2027
|
|
Short gapmer oligonucleotides, 10 to 14 nucleotides in length, with bicyclic nucleosides, which includes cEt locked nucleic acids, in the wings for the treatment of cardiovascular or metabolic disorders
|
United States
|
|
7,750,131
|
|
5’-MODIFIED BICYCLIC NUCLEIC ACID ANALOGS
|
|
2027
|
|
Covers 5’-Methy BNA containing gapmer compounds
|
Europe
|
|
EP2092065
|
|
ANTISENSE COMPOUNDS
|
|
2027
|
|
Gapmer compounds having wings comprised of 2’-MOE and bicyclic nucleosides
|
Europe
|
EP2410053
|
ANTISENSE COMPOUNDS
|
2027
|
Gapmer compounds having wings comprised of 2’-MOE and bicyclic nucleosides
|
||||
Japan
|
JP 5665317
|
ANTISENSE COMPOUNDS
|
2027
|
Gapmer compounds having wings comprised of 2’-MOE and bicyclic nucleosides
|
||||
Europe
|
EP2673361
|
OLIGOMERIC COMPOUNDS COMPRISING BICYCLIC NUCLEOTIDES AND USES THEREOF
|
2032
|
Gapmer having at least one bicyclic nucleoside, 2’-modified nucleoside, and 2’-deoxynucleoside in either the 5’- or 3’-wing.
|
Jurisdiction
|
|
Patent/
Application No. |
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
9,127,276
|
|
CONJUGATED ANTISENSE COMPOUNDS AND THEIR USE
|
|
2034
|
|
Covers our primary THA LICA conjugate having any type of linker and conjugated to any group of nucleosides, including gapmers, double-stranded siRNA compounds, and fully modified oligonucleotides
|
United States
|
|
9,181,549
|
|
CONJUGATED ANTISENSE COMPOUNDS AND THEIR USE
|
|
2034
|
|
Covers our primary THA conjugate having our preferred linker and cleavable moiety conjugated to any oligomeric compound or any nucleoside having a 2’-MOE modification or a cEt modification
|
Jurisdiction
|
|
Patent No.
|
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
6,210,892
|
|
ALTERATION OF CELLULAR BEHAVIOR BY MODULATION OF MRNA PROCESSING
|
|
2018
|
|
Broad claims of altering mRNA processing with a fully modified 2’MOE oligonucleotide.
|
United States
|
|
8,361,977
|
|
COMPOSITIONS AND METHODS FOR MODULATION OF SMN2 SPLICING
|
|
2030
|
|
Sequence and chemistry (full 2’-MOE) of SPINRAZA
|
Europe
|
|
1910395
|
|
COMPOSITIONS AND METHODS FOR MODULATION OF SMN2 SPLICING
|
|
2026
|
|
Sequence and chemistry (full 2’-MOE) of SPINRAZA
|
United States
|
|
7,838,657
|
|
SPINAL MUSCULAR ATROPHY (SMA) TREATMENT VIA TARGETING OF SMN2 SPLICE SITE INHIBITORY SEQUENCES
|
|
2027
|
|
Oligonucleotides having sequence of SPINRAZA (chemistry independent)
|
United States
|
|
8,110,560
|
|
SPINAL MUSCULAR ATROPHY (SMA) TREATMENT VIA TARGETING OF SMN2 SPLICE SITE INHIBITORY SEQUENCES
|
|
2025
|
|
Methods of using antisense oligonucleotides having sequence of SPINRAZA to alter splicing of SMN2 and/or to treat SMA
|
United States
|
8,980,853
|
COMPOSITIONS AND METHODS FOR MODULATION OF SMN2 SPLICING IN A SUBJECT
|
2030
|
Methods of administering SPINRAZA
|
Jurisdiction
|
|
Patent No.
|
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
7,598,227
|
|
MODULATION OF APOLIPOPROTEIN C-III EXPRESSION
|
|
2023
|
|
Methods of treating hyperlipidemia, lowering cholesterol levels and lowering triglyceride levels with an antisense compound comprising an antisense oligonucleotide 15-30 linked nucleosides specifically hybridizable within a nucleotide region of apoCIII targeted by volanesorsen
|
United States
|
|
7,750,141
|
|
MODULATION OF APOLIPOPROTEIN C-III EXPRESSION
|
|
2023
|
|
Antisense sequence and chemistry of volanesorsen
|
Europe
|
|
EP1622597
|
|
MODULATION OF APOLIPOPROTEIN C-III EXPRESSION
|
|
2023
|
|
Antisense sequence and chemistry of volanesorsen
|
United States
|
9,157,082
|
MODULATION OF APOLIPOPROTEIN CIII (APOCIII) EXPRESSION
|
2032
|
Methods of using APOCIII antisense oligonucleotides for reducing pancreatitis and chylomicronemia and increasing HDL
|
Jurisdiction
|
|
Patent No.
|
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
8,101,743
|
|
MODULATION OF TRANSTHYRETIN EXPRESSION
|
|
2025
|
|
Antisense sequence and chemistry of IONIS-TTR
Rx
|
United States
|
|
8,697,860
|
|
DIAGNOSIS AND TREATMENT OF DISEASE
|
|
2031
|
|
Composition of IONIS-TTR
Rx
|
United States
|
9,061,044
|
MODULATION OF TRANSTHYRETIN EXPRESSION
|
2031
|
Sodium salt composition of IONIS-TTR
Rx
|
||||
United States
|
9,399,774
|
MODULATION OF TRANSTHYRETIN EXPRESSION
|
2031
|
Methods of treating transthyretin amyloidosis by administering IONIS-TTR
Rx
|
||||
Japan
|
JP5896175
|
MODULATION OF TRANSTHYRETIN EXPRESSION
|
2031
|
Composition of IONIS-TTR
Rx
|
Jurisdiction
|
|
Patent No.
|
|
Title
|
|
Expiration
|
|
Description of Claims
|
United States
|
|
7,407,943
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2021
|
|
Methods of inhibiting expression of apoB, decreasing serum cholesterol, decreasing lipoprotein levels, decreasing serum triglycerides in a human with an antisense compound 12 to 30 nucleotide in length and 100% complementary to human apoB wherein the compound is not a ribozyme.
|
Japan
|
|
4471650
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2022
|
|
Use of an antisense oligonucleotide 12 to 30 nucleobases in length and 100% complementary to human apoB having one or more modifications and inhibiting expression of apoB by at least 90% in primary hepatocytes when present at a concentration of 300 nM for preparation of a medicament for decreasing serum cholesterol, and decreasing lipoprotein levels in a human
|
Europe
|
EP2174945
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
2022
|
Use of an antisense oligonucleotide 20 nucleobases in length and 100% complementary to human apoB having a 5-10-5 MOE motif for treating conditions associated with ApoB
|
||||
United States
|
|
7,511,131
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2025
|
|
Antisense sequence and composition of matter of Kynamro
|
Europe
|
|
EP1569695
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2023
|
|
Antisense sequence and composition of matter of Kynamro
|
Europe
|
|
EP2336318
|
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
|
2023
|
|
Antisense sequence and composition of matter of Kynamro
|
Japan
|
4986109
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
2023
|
Antisense sequence and composition of matter of Kynamro
|
||||
Europe
|
EP2409713
|
ANTISENSE MODULATION OF APOLIPOPROTEIN B EXPRESSION
|
2025
|
Kynamro for use in treating a human with hypercholesterolemia, wherein the oligonucleotide is administered at 200mg once per week by subcutaneous injection
|
Drug
|
Company
|
Drug Description
|
Phase
|
Admin/Dosing
|
Efficacy(1)
|
Safety(1)
|
AVXS-101
|
AveXis
|
Gene therapy that corrects the SMN1 gene using the
AAV9 Vector
|
1
|
Infusion
|
As of September 15, 2016, the 12 patients taking the proposed therapeutic dose of AVXS-101 were event free and were a median age of 17.3 months at their last follow up appointment. Additionally, two-thirds of these patients had achieved the ability to sit unassisted, including one patient whose achievement of this milestone was confirmed after September 15.
|
Well tolerated to date
|
RG7916
|
PTC Therapeutics/ Roche/ SMA Foundation
|
A small molecule drug that modulates splicing of the
SMN2 gene
|
2
|
Oral
|
None reported
|
None reported
|
LMI070
|
Novartis
|
A small molecule drug that modulates splicing of the
SMN2 gene
|
1/2
|
Oral
|
None reported
|
Study was placed on clinical hold in May 2016 due to safety findings reported in animal studies. The clinical hold was subsequently removed.
|
(1)
|
Taken from public documents including respective company press releases, company presentations, and scientific presentations.
|
Drug
|
Company
|
Drug Description
|
Phase
|
Admin/Dosing
|
Efficacy(1)
|
Safety(1)
|
Glybera
|
uniQure NV
|
Adeno-associated Virus Gene therapy
|
Approved in EU, not pursing in the U.S.
|
A single treatment involving multiple injections
|
Showed a reduction in blood fat levels after meals in some patients. There was also a reduction in the number of pancreatitis attacks in some patients.
|
Common side effects include: leg pain following injection, headache, tiredness, high body temperature, bruising and potential damage to muscle tissue
|
Metreleptin
|
Novelion Therapeutics
|
A synthetic form of the hormone leptin
|
3
|
Reconstituted subcutaneous injection
|
44.4% mean reduction in triglycerides at four months in patients with abnormal triglyceride levels
|
Anti-metreleptin antibodies, hypoglycemia, hypersensitivity, risk of T-cell lymphoma
|
Gemcabene
|
Gemphire Therapeutics
|
Monocalcium salt of a dialkyl ether dicarboxylic acid
|
2
|
Oral, once-daily
|
In a post hoc analysis (n=9) of patients with triglycerides >500 mg/dl, reductions of 59% and 60% from 150mg and 300mg doses, respectively, were observed
|
In a recent study, in the gemcabene-treatment group, the
most frequently occurring adverse events were headache and infection
|
(1)
|
Taken from public documents including respective company press releases, company presentations, and scientific presentations.
|
Drug
|
Company
|
Drug Description
|
Phase
|
Admin/Dosing
|
Efficacy*
|
Safety*
|
Patisiran
|
Alnylam
|
An RNAi drug formulated with lipid nanoparticles to inhibit TTR mRNA
|
3
|
Infusion every 3 weeks with pre-treatment with steroids
|
~90% mean maximum reduction in TTR
|
Mild flushing (25.9%) and infusion-related reactions (18.5%) in Phase 2 OLE
|
Tafamidis
|
Pfizer
|
A small molecule drug to stabilize TTR Protein
|
3, Approved in the EU
|
Daily oral capsule
|
In 45% of patients taking Tafamidis, nerve function either improved or stabilized, compared with 30% of patients taking placebo
|
Urinary tract infection, vaginal infection, upper abdominal pain and diarrhea
|
Diflunisal
|
N/A Generic
|
A non-steroid anti-inflammatory agent
|
Approved
|
Daily oral capsule/doses
|
Improved nerve function as shown by lower Neuropathy Impairment Score plus 7 nerve tests, or NIS+7. The NIS+7 score increased by 25.0 points in the placebo group versus 8.7 points in the diflunisal group
|
In two studies repurposing diflunisal for use in TTR amyloidosis, drug-related adverse events that led to discontinuation were: gastrointestinal bleeding, low platelets, deterioration of renal function, congestive heart failure, glaucoma and nausea.
|
Tolcapone
|
SOM Biotech
|
Small molecule repurposed generic drug
|
1/2
|
Daily oral dose
|
Shows binding and stabilization of TTR in humans
|
No drug related adverse events reported
|
ALN-TTRsc02
|
Alnylam
|
An RNAi drug conjugated with GalNAC to inhibit TTR mRNA in liver cells
|
1
|
Monthly or quarterly
|
In healthy volunteers, a single dose showed mean max TTR knockdown of 97%, up to 98%
|
Injection site reactions were reported
|
(1)
|
Taken from public documents including respective company press releases, company presentations, and scientific presentations. Diflunisal efficacy and safety came from the published papers of two investigator sponsored studies, Berk JL, Suhr OB, Obici L, et al. Repurposing Diflunisal for Familial Amyloid Polyneuropathy: A Randomized Clinical Trial. JAMA. 2013;310(24):2658-2667 and Sekijima YS, Toja K, Morita H, et al. Safety and efficacy of long-term diflunisal administration in hereditary transthyretin (ATTR) amyloidosis. Amyloid. 2015;22(2):79-83.
|
Drug
|
Company
|
Drug Description
|
Phase
|
Admin/Dosing
|
Efficacy(1)
|
Safety(1)
|
Lomitapide
|
Novelion Therapeutics
|
A small molecule drug that inhibits microsomal triglyceride transfer protein
|
Approved
|
Titrate up, 5-60 mg oral daily
|
40% reduction in LDL-C from baseline (change from mean 336 mg/dL LDL-C to 190 mg/dL LDL-C) at week 26 in Phase 3 study
|
Hepatic steatosis, risk of steatohepatitis, transaminase abnormalities, risk for drug-induced liver injury, risk for deficiencies in fat-soluble vitamins and essential fatty acids
|
Evolocumab
|
Amgen
|
A monoclonal antibody drug that inhibits PCSK9 protein
|
Approved
|
Monthly sub-q
|
TESLA (phase 2/3 in HOFH): 31% mean reduction in LDL-C from baseline
|
nasopharyngitis, upper respiratory tract infections, influenza, arthralgia, and back pain
|
(1)
|
Taken from public documents including respective company press releases, company presentations, and scientific presentations
|
Name
|
|
Age
|
|
Position
|
Stanley T. Crooke, M.D., Ph.D.
|
|
71
|
|
Chairman, Chief Executive Officer and President
|
B. Lynne Parshall, J.D.
|
|
62
|
|
Director, Chief Operating Officer
|
C. Frank Bennett, Ph.D.
|
|
60
|
|
Senior Vice President, Antisense Research
|
Sarah Boyce
|
45
|
Chief Business Officer
|
||
Richard S. Geary, Ph.D.
|
|
59
|
|
Senior Vice President, Development
|
Elizabeth L. Hougen
|
|
55
|
|
Senior Vice President, Finance and Chief Financial Officer
|
Brett P. Monia, Ph.D.
|
|
55
|
|
Senior Vice President, Drug Discovery and Corporate Development
|
Patrick R. O’Neil, Esq.
|
|
43
|
|
Senior Vice President, Legal, General Counsel, Chief Compliance Officer and Corporate Secretary
|
|
receipt and scope of marketing authorizations;
|
|
establishment and demonstration in the medical and patient community of the efficacy and safety of our drugs and their potential advantages over competing products;
|
|
cost and effectiveness of our drugs compared to other available therapies;
|
|
patient convenience of the dosing regimen for our drugs; and
|
|
reimbursement policies of government and third-party payors.
|
|
priced lower than our drugs;
|
|
reimbursed more favorably by government and other third-party payors than our drugs;
|
|
safer than our drugs;
|
|
more effective than our drugs; or
|
|
more convenient to use than our drugs.
|
|
fund our development activities for SPINRAZA;
|
|
seek and obtain regulatory approvals for SPINRAZA; and
|
|
successfully commercialize SPINRAZA.
|
|
the clinical study may produce negative or inconclusive results;
|
|
regulators may require that we hold, suspend or terminate clinical research for noncompliance with regulatory requirements;
|
|
we, our partners, the FDA or foreign regulatory authorities could suspend or terminate a clinical study due to adverse side effects of a drug on subjects in the trial;
|
|
we may decide, or regulators may require us, to conduct additional preclinical testing or clinical studies;
|
|
enrollment in our clinical studies may be slower than we anticipate;
|
|
patients who enroll in the clinical study may later drop out due to adverse events, a perception they are not benefiting from participating in the study, fatigue with the clinical study process or personal issues;
|
|
the cost of our clinical studies may be greater than we anticipate; and
|
|
the supply or quality of our drugs or other materials necessary to conduct our clinical studies may be insufficient, inadequate or delayed.
|
|
conduct clinical studies;
|
|
seek and obtain marketing authorization; and
|
|
manufacture, market and sell our drugs.
|
|
pursue alternative technologies or develop alternative products that may be competitive with the drug that is part of the collaboration with us;
|
|
pursue higher-priority programs or change the focus of its own development programs; or
|
|
choose to devote fewer resources to our drugs than it does for its own drugs.
|
|
marketing approvals and successful commercial launch for SPINRAZA;
|
|
changes in existing collaborative relationships and our ability to establish and maintain additional collaborative arrangements;
|
|
continued scientific progress in our research, drug discovery and development programs;
|
|
the size of our programs and progress with preclinical and clinical studies;
|
|
the time and costs involved in obtaining marketing authorizations;
|
|
competing technological and market developments, including the introduction by others of new therapies that address our markets; and
|
|
the profile and launch timing of our drugs, including volanesorsen and IONIS-TTR
Rx
.
|
|
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.
|
Property Description
|
Location
|
Square Footage
|
Initial Lease Term End Date
|
Lease Extension Options
|
||||
Ionis laboratory and office space facility
|
Carlsbad, CA
|
176,000
|
2031
|
Four, five-year options to extend
|
||||
Ionis manufacturing facility
|
Carlsbad, CA
|
28,700
|
2031
|
Four, five-year options to extend
|
||||
Ionis adjacent manufacturing facility
|
Carlsbad, CA
|
25,800
|
2021
|
Two, five-year options to extend
|
||||
Akcea office space facility
|
Cambridge, MA
|
6,100
|
2018
|
None
|
||||
236,600
|
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
|
|
HIGH
|
LOW
|
||||||
2016
|
||||||||
First Quarter
|
$
|
62.68
|
$
|
30.93
|
||||
Second Quarter
|
$
|
46.75
|
$
|
19.59
|
||||
Third Quarter
|
$
|
40.82
|
$
|
23.26
|
||||
Fourth Quarter
|
$
|
57.00
|
$
|
24.58
|
||||
2015
|
||||||||
First Quarter
|
$
|
77.80
|
$
|
57.60
|
||||
Second Quarter
|
$
|
71.50
|
$
|
55.62
|
||||
Third Quarter
|
$
|
58.73
|
$
|
37.38
|
||||
Fourth Quarter
|
$
|
65.34
|
$
|
38.30
|
|
Dec-11
|
Dec-12
|
Dec-13
|
Dec-14
|
Dec-15
|
Dec-16
|
||||||||||||||||||
Ionis Pharmaceuticals, Inc.
|
$
|
100.00
|
$
|
144.80
|
$
|
552.57
|
$
|
856.31
|
$
|
858.95
|
$
|
663.38
|
||||||||||||
NASDAQ Composite Index
|
$
|
100.00
|
$
|
116.41
|
$
|
165.47
|
$
|
188.69
|
$
|
200.32
|
$
|
216.54
|
||||||||||||
NASDAQ Biotechnology Index
|
$
|
100.00
|
$
|
134.68
|
$
|
232.37
|
$
|
307.67
|
$
|
328.76
|
$
|
262.08
|
(1) |
This section is not “soliciting material,” is not deemed “filed” with the SEC, is not subject to the liabilities of Section 18 of the Exchange Act and is not to be incorporated by reference in any of our filings under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
|
|
Years Ended December 31,
|
|||||||||||||||||||
|
2016
|
2015
|
2014
|
2013
|
2012
|
|||||||||||||||
Consolidated Statement of Operations Data:
|
||||||||||||||||||||
Revenue
|
$
|
346,620
|
$
|
283,703
|
$
|
214,161
|
$
|
147,285
|
$
|
102,049
|
||||||||||
Research, development and patent expenses
|
$
|
344,320
|
$
|
322,292
|
$
|
241,751
|
$
|
184,033
|
$
|
158,458
|
||||||||||
Net loss attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(86,556
|
)
|
$
|
(88,278
|
)
|
$
|
(38,984
|
)
|
$
|
(60,644
|
)
|
$
|
(65,478
|
)
|
|||||
Basic and diluted net loss per share attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(0.72
|
)
|
$
|
(0.74
|
)
|
$
|
(0.33
|
)
|
$
|
(0.55
|
)
|
$
|
(0.65
|
)
|
|||||
Shares used in computing basic and diluted net loss per share
|
120,933
|
119,719
|
117,691
|
110,502
|
100,576
|
|
As of December 31,
|
|||||||||||||||||||
|
2016
|
2015
|
2014
|
2013
|
2012
|
|||||||||||||||
Consolidated Balance Sheet:
|
||||||||||||||||||||
Cash, cash equivalents and short-term investments
|
$
|
665,223
|
$
|
779,183
|
$
|
728,832
|
$
|
656,761
|
$
|
374,446
|
||||||||||
Working capital
|
$
|
664,148
|
$
|
688,127
|
$
|
721,265
|
$
|
637,698
|
$
|
349,116
|
||||||||||
Investment in Regulus Therapeutics Inc.
|
$
|
2,414
|
$
|
24,792
|
$
|
81,881
|
$
|
52,096
|
$
|
33,622
|
||||||||||
Total assets
|
$
|
912,467
|
$
|
947,900
|
$
|
946,471
|
$
|
843,267
|
$
|
541,382
|
||||||||||
Long-term debt and other obligations, less current portion
|
$
|
679,118
|
$
|
598,234
|
$
|
588,896
|
$
|
367,065
|
$
|
284,294
|
||||||||||
Accumulated deficit
|
$
|
(1,181,428
|
)
|
$
|
(1,094,872
|
)
|
$
|
(1,006,594
|
)
|
$
|
(967,610
|
)
|
$
|
(906,966
|
)
|
|||||
Stockholders’ equity
|
$
|
99,565
|
$
|
200,790
|
$
|
257,780
|
$
|
378,390
|
$
|
182,766
|
||||||||||
2016
|
2015
|
2014
|
||||||||||
Total revenue
|
$
|
346,620
|
$
|
283,703
|
$
|
214,161
|
||||||
Total operating expenses
|
$
|
392,936
|
$
|
359,465
|
$
|
261,891
|
||||||
Loss from operations
|
$
|
(46,316
|
)
|
$
|
(75,762
|
)
|
$
|
(47,730
|
)
|
|||
Net loss
|
$
|
(86,556
|
)
|
$
|
(88,278
|
)
|
$
|
(38,984
|
)
|
|||
Cash, cash equivalents and short-term investments
|
$
|
665,223
|
$
|
779,183
|
$
|
728,832
|
|
Assessing the propriety of revenue recognition and associated deferred revenue;
|
|
Determining the proper valuation of investments in marketable securities and other equity investments;
|
|
Determining the appropriate cost estimates for unbilled preclinical studies and clinical development activities;
|
|
Estimating our net deferred income tax asset valuation allowance; and
|
|
Determining the fair value of convertible debt without the conversion feature.
|
|
The exclusive license we granted to Bayer to develop and commercialize IONIS-FXI
Rx
for the treatment of thrombosis;
|
|
The development services we agreed to perform for IONIS-FXI
Rx
; and
|
|
The initial supply of API.
|
|
Estimated future product sales;
|
|
Estimated royalties on future product sales;
|
|
Contractual milestone payments;
|
|
Expenses we expect to incur;
|
|
Income taxes; and
|
|
An appropriate discount rate.
|
|
The number of internal hours we will spend performing these services;
|
|
The estimated cost of work we will perform;
|
|
The estimated cost of work that we will contract with third parties to perform; and
|
|
The estimated cost of drug product we will use.
|
|
$91.2 million to the IONIS-FXI
Rx
exclusive license;
|
|
$4.3 million for development services; and
|
|
$4.5
million for the delivery of API.
|
|
We recognized the portion of the consideration attributed to the IONIS-FXI
Rx
license immediately in the second quarter of 2015 because we delivered the license and earned the revenue;
|
|
We recognized the amount attributed to the development services for IONIS-FXI
Rx
over the period of time we performed the services; and
|
|
We are recognizing the amount attributed to the API supply as we deliver it to Bayer.
|
|
In January 2012, we entered into a collaboration agreement with Biogen to develop and commercialize SPINRAZA (nusinersen) for SMA. As part of the collaboration, we received a $29 million upfront payment and were responsible for global development of SPINRAZA through completion of Phase 2/3 clinical trials.
|
|
In June 2012, we entered into a second and separate collaboration agreement with Biogen to develop and commercialize a novel antisense drug targeting DMPK. As part of the collaboration, we received a $12 million upfront payment and we are responsible for global development of the drug through the completion of a Phase 2 clinical trial.
|
|
In December 2012, we entered into a third and separate collaboration agreement with Biogen to discover and develop antisense drugs against three targets to treat neurological or neuromuscular disorders. As part of the collaboration, we received a $30 million upfront payment and we are responsible for the discovery of a lead antisense drug for each of three targets.
|
|
In September 2013, we entered into a fourth and separate collaboration agreement with Biogen to leverage antisense technology to advance the treatment of neurodegenerative diseases. We granted Biogen exclusive rights to the use of our antisense technology to develop therapies for neurological diseases as part of this broad collaboration. We received a $100 million upfront payment and we are responsible for discovery and early development through the completion of a Phase 2 clinical trial for each antisense drug identified during the six-year term of this collaboration, while Biogen is responsible for the creation and development of small molecule treatments and biologics.
|
|
Designation of a development candidate. Following the designation of a development candidate, IND-enabling animal studies for a new development candidate generally take 12 to 18 months to complete;
|
|
Initiation of a Phase 1 clinical trial. Generally, Phase 1 clinical trials take one to two years to complete;
|
|
Initiation or completion of a Phase 2 clinical trial. Generally, Phase 2 clinical trials take one to three years to complete;
|
|
Initiation or completion of a Phase 3 clinical trial. Generally, Phase 3 clinical trials take two to four years to complete.
|
|
Filing of regulatory applications for marketing authorization such as a New Drug Application, or NDA, in the United States or a Marketing Authorization Application, or MAA, in Europe. Generally, it takes six to twelve months to prepare and submit regulatory filings.
|
|
Marketing authorization in a major market, such as the United States, Europe or Japan. Generally it takes one to two years after an application is submitted to obtain authorization from the applicable regulatory agency.
|
|
First commercial sale in a particular market, such as in the United States or Europe.
|
|
Product sales in excess of a pre-specified threshold, such as annual sales exceeding $1 billion. The amount of time to achieve this type of milestone depends on several factors including but not limited to the dollar amount of the threshold, the pricing of the product and the pace at which customers begin using the product.
|
|
Substantive uncertainty exists as to the achievement of the milestone event at the inception of the arrangement;
|
|
The achievement of the milestone involves substantive effort and can only be achieved based in whole or in part on our performance or the occurrence of a specific outcome resulting from our performance;
|
|
The amount of the milestone payment appears reasonable either in relation to the effort expended or to the enhancement of the value of the delivered items;
|
|
There is no future performance required to earn the milestone; and
|
|
The consideration is reasonable relative to all deliverables and payment terms in the arrangement.
|
|
$170 million from Biogen for FDA approval, licensing and advancing the Phase 3 program for SPINRAZA;
|
|
$53 million from AstraZeneca for advancing and licensing IONIS-KRAS-2.5
Rx
and selecting IONIS-AZ4-2.5-L
Rx
to move into development;
|
|
$15 million from Janssen for licensing IONIS-JBI1-2.5
Rx
and selecting an additional development candidate;
|
|
$15 million from Kastle Therapeutics for acquiring Kynamro;
|
|
$7.5 million from Biogen for advancing IONIS-SOD1
Rx
. IONIS-BIIB4
Rx
and IONIS-BIIB6
Rx;
|
|
$61 million from the amortization of upfront fees; and
|
|
$25.1 million primarily from the manufacturing services Ionis performed for its partners.
|
|
During 2016, we were conducting five Phase 3 studies and three open-label extension studies for SPINRAZA, IONIS-TTR
Rx
and volanesorsen. We completed target enrollment in four of these Phase 3 studies at the end of 2015, and as a result, these studies were in their most expensive stage during 2016.
|
|
Akcea’s operating expenses increased as it continued to build its commercial infrastructure and advance the pre-commercialization activities necessary to successfully launch volanesorsen, if approved for marketing.
|
|
Our non-cash compensation expense related to equity awards increased due to an increase in the exercise price of the stock options we have granted over the past several years.
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
Ionis Core
|
$
|
260,233
|
$
|
256,674
|
||||
Akcea Therapeutics
|
73,363
|
46,252
|
||||||
Elimination of intercompany activity
|
(12,768
|
)
|
(2,775
|
)
|
||||
Subtotal
|
320,828
|
300,151
|
||||||
Non-cash compensation expense related to equity awards
|
72,108
|
59,314
|
||||||
Total operating expenses
|
$
|
392,936
|
$
|
359,465
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
Research, development and patent expenses
|
$
|
289,221
|
$
|
278,654
|
||||
Non-cash compensation expense related to equity awards
|
55,099
|
43,638
|
||||||
Total research, development and patent expenses
|
$
|
344,320
|
$
|
322,292
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
Ionis Core
|
$
|
238,106
|
$
|
240,061
|
||||
Akcea Therapeutics
|
63,883
|
41,368
|
||||||
Elimination of intercompany activity
|
(12,768
|
)
|
(2,775
|
)
|
||||
Subtotal
|
289,221
|
278,654
|
||||||
Non-cash compensation expense related to equity awards
|
55,099
|
43,638
|
||||||
Total research, development and patent expenses
|
$
|
344,320
|
$
|
322,292
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
Antisense drug discovery expenses
|
$
|
51,028
|
$
|
49,331
|
||||
Non-cash compensation expense related to equity awards
|
13,589
|
11,914
|
||||||
Total antisense drug discovery expenses
|
$
|
64,617
|
$
|
61,245
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
SPINRAZA
|
$
|
43,868
|
$
|
35,164
|
||||
Volanesorsen
|
26,285
|
21,348
|
||||||
IONIS-TTR
Rx
|
22,939
|
19,560
|
||||||
Other antisense development projects
|
42,999
|
60,028
|
||||||
Development overhead expenses
|
42,966
|
36,117
|
||||||
Total antisense drug development, excluding non-cash compensation expense related to equity awards
|
179,057
|
172,217
|
||||||
Non-cash compensation expense related to equity awards
|
21,380
|
16,208
|
||||||
Total antisense drug development expenses
|
$
|
200,437
|
$
|
188,425
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
Ionis Core
|
$
|
132,418
|
$
|
137,092
|
||||
Akcea Therapeutics
|
46,639
|
35,125
|
||||||
Non-cash compensation expense related to equity awards
|
21,380
|
16,208
|
||||||
Total antisense drug development expenses
|
$
|
200,437
|
$
|
188,425
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
Manufacturing and operations expenses
|
$
|
30,148
|
$
|
28,588
|
||||
Non-cash compensation expense related to equity awards
|
6,113
|
4,563
|
||||||
Total manufacturing and operations expenses
|
$
|
36,261
|
$
|
33,151
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
Ionis Core
|
$
|
27,341
|
$
|
25,632
|
||||
Akcea Therapeutics
|
15,455
|
5,611
|
||||||
Elimination of intercompany activity
|
(12,648
|
)
|
(2,655
|
)
|
||||
Subtotal
|
30,148
|
28,588
|
||||||
Non-cash compensation expense related to equity awards
|
6,113
|
4,563
|
||||||
Total manufacturing and operations expenses
|
$
|
36,261
|
$
|
33,151
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
Personnel costs
|
$
|
11,560
|
$
|
10,210
|
||||
Occupancy
|
7,891
|
7,854
|
||||||
Patent expenses
|
3,945
|
2,785
|
||||||
Depreciation and amortization
|
245
|
2,911
|
||||||
Insurance
|
1,344
|
1,320
|
||||||
Other
|
4,003
|
3,438
|
||||||
Total R&D support expenses, excluding non-cash compensation expense related to equity awards
|
28,988
|
28,518
|
||||||
Non-cash compensation expense related to equity awards
|
14,017
|
10,953
|
||||||
Total R&D support expenses
|
$
|
43,005
|
$
|
39,471
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
Ionis Core
|
$
|
27,319
|
$
|
28,005
|
||||
Akcea Therapeutics
|
1,789
|
633
|
||||||
Elimination of intercompany activity
|
(120
|
)
|
(120
|
)
|
||||
Subtotal
|
28,988
|
28,518
|
||||||
Non-cash compensation expense related to equity awards
|
14,017
|
10,953
|
||||||
Total R&D support expenses
|
$
|
43,005
|
$
|
39,471
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
General and administrative expenses
|
$
|
31,607
|
$
|
21,497
|
||||
Non-cash compensation expense related to equity awards
|
17,009
|
15,676
|
||||||
Total general and administrative expenses
|
$
|
48,616
|
$
|
37,173
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
Ionis Core
|
$
|
22,127
|
$
|
16,613
|
||||
Akcea Therapeutics
|
9,480
|
4,884
|
||||||
Non-cash compensation expense related to equity awards
|
17,009
|
15,676
|
||||||
Total general and administrative expenses
|
$
|
48,616
|
$
|
37,173
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
Development and patent expenses
|
$
|
63,883
|
$
|
41,368
|
||||
General and administrative expenses
|
9,480
|
4,884
|
||||||
Total operating expenses, excluding non-cash compensation expense related to equity awards
|
73,363
|
46,252
|
||||||
Non-cash compensation expense related to equity awards
|
10,149
|
6,496
|
||||||
Total Akcea Therapeutics operating expenses
|
$
|
83,512
|
$
|
52,748
|
Year Ended
December 31,
|
||||||||
2016
|
2015
|
|||||||
2¾ percent notes:
|
||||||||
Non-cash amortization of the debt discount and debt issuance costs
|
$
|
2,761
|
$
|
2,530
|
||||
Interest expense payable in cash
|
1,684
|
1,684
|
||||||
1 percent notes:
|
||||||||
Non-cash amortization of the debt discount and debt issuance costs
|
22,354
|
20,678
|
||||||
Interest expense payable in cash
|
5,000
|
4,999
|
||||||
Non-cash interest expense for long-term financing liability
|
6,693
|
6,665
|
||||||
Other
|
303
|
176
|
||||||
Total interest expense
|
$
|
38,795
|
$
|
36,732
|
|
$91.2 million from Bayer in connection with our exclusive license agreement for IONIS-FXI
Rx
;
|
|
$72.6 million from Biogen for advancing the Phase 3 program for SPINRAZA, advancing IONIS-DMPK-2.5
Rx
and IONIS-BIIB4
Rx
, and validating three new targets for neurological disorders;
|
|
$22 million from Roche for initiating a Phase 1/2 study of IONIS-HTT
Rx
;
|
|
$20 million from GSK for advancing the Phase 3 study of IONIS-TTR
Rx
and initiating a Phase 1 study of IONIS-GSK4-L
Rx
; and
|
|
$75.6 million primarily from the amortization of upfront fees and manufacturing services we performed for our partners.
|
● |
We incurred higher costs associated with our Phase 3 programs for SPINRAZA, volanesorsen and IONIS-TTR
Rx
,
|
● |
Akcea’s operating expenses increased as it began building its commercial infrastructure and advanced the
|
● |
Our stock compensation expense increased due to the increase in our stock price in January 2015 compared to January 2014 since we grant the majority of our stock options in January.
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Ionis Core
|
$
|
256,674
|
$
|
208,811
|
||||
Akcea Therapeutics
|
46,252
|
21,697
|
||||||
Elimination of intercompany activity
|
(2,775
|
)
|
—
|
|||||
Subtotal
|
300,151
|
230,508
|
||||||
Non-cash compensation expense related to equity awards
|
59,314
|
31,383
|
||||||
Total operating expenses
|
$
|
359,465
|
$
|
261,891
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Research, development and patent expenses
|
$
|
278,654
|
$
|
215,908
|
||||
Non-cash compensation expense related to equity awards
|
43,638
|
25,843
|
||||||
Total research, development and patent expenses
|
$
|
322,292
|
$
|
241,751
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Ionis Core
|
$
|
240,061
|
$
|
195,007
|
||||
Akcea Therapeutics
|
41,368
|
20,901
|
||||||
Elimination of intercompany activity
|
(2,775
|
)
|
—
|
|||||
Subtotal
|
278,654
|
215,908
|
||||||
Non-cash compensation expense related to equity awards
|
43,638
|
25,843
|
||||||
Total research, development and patent expenses
|
$
|
322,292
|
$
|
241,751
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Antisense drug discovery expenses
|
$
|
49,331
|
$
|
43,620
|
||||
Non-cash compensation expense related to equity awards
|
11,914
|
7,290
|
||||||
Total antisense drug discovery expenses
|
$
|
61,245
|
$
|
50,910
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
SPINRAZA
|
$
|
35,164
|
$
|
19,064
|
||||
Volanesorsen
|
21,348
|
9,337
|
||||||
IONIS-TTR
Rx
|
19,560
|
10,927
|
||||||
Other antisense development products
|
60,028
|
50,272
|
||||||
Development overhead expenses
|
36,117
|
31,318
|
||||||
Total antisense drug development, excluding non-cash compensation expense related to equity awards
|
172,217
|
120,918
|
||||||
Non-cash compensation expense related to equity awards
|
16,208
|
9,640
|
||||||
Total antisense drug development expenses
|
$
|
188,425
|
$
|
130,558
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Ionis Core
|
$
|
137,092
|
$
|
102,862
|
||||
Akcea Therapeutics
|
35,125
|
18,056
|
||||||
Non-cash compensation expense related to equity awards
|
16,208
|
9,640
|
||||||
Total antisense drug development expenses
|
$
|
188,425
|
$
|
130,558
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Manufacturing and operations expenses
|
$
|
28,588
|
$
|
24,763
|
||||
Non-cash compensation expense related to equity awards
|
4,563
|
2,934
|
||||||
Total manufacturing and operations expenses
|
$
|
33,151
|
$
|
27,697
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Ionis Core
|
$
|
25,632
|
$
|
22,425
|
||||
Akcea Therapeutics
|
5,611
|
2,338
|
||||||
Elimination of intercompany activity
|
(2,655
|
)
|
—
|
|||||
Subtotal
|
28,588
|
24,763
|
||||||
Non-cash compensation expense related to equity awards
|
4,563
|
2,934
|
||||||
Total manufacturing and operations expenses
|
$
|
33,151
|
$
|
27,697
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Personnel costs
|
$
|
10,210
|
$
|
9,875
|
||||
Occupancy
|
7,854
|
7,357
|
||||||
Patent expenses
|
2,785
|
2,933
|
||||||
Depreciation and amortization
|
2,911
|
2,243
|
||||||
Insurance
|
1,320
|
1,197
|
||||||
Other
|
3,438
|
3,002
|
||||||
Total R&D support expenses, excluding non-cash compensation expense related to equity awards
|
28,518
|
26,607
|
||||||
Non-cash compensation expense related to equity awards
|
10,953
|
5,979
|
||||||
Total R&D support expenses
|
$
|
39,471
|
$
|
32,586
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Ionis Core
|
$
|
28,005
|
$
|
26,100
|
||||
Akcea Therapeutics
|
633
|
507
|
||||||
Elimination of intercompany activity
|
(120
|
)
|
—
|
|||||
Subtotal
|
28,518
|
26,607
|
||||||
Non-cash compensation expense related to equity awards
|
10,953
|
5,979
|
||||||
Total R&D support expenses
|
$
|
39,471
|
$
|
32,586
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
General and administrative expenses
|
$
|
21,497
|
$
|
14,600
|
||||
Non-cash compensation expense related to equity awards
|
15,676
|
5,540
|
||||||
Total general and administrative expenses
|
$
|
37,173
|
$
|
20,140
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Ionis Core
|
$
|
16,613
|
$
|
13,804
|
||||
Akcea Therapeutics
|
4,884
|
796
|
||||||
Non-cash compensation expense related to equity awards
|
15,676
|
5,540
|
||||||
Total general and administrative expenses
|
$
|
37,173
|
$
|
20,140
|
Year Ended
December 31,
|
||||||||
2015
|
2014
|
|||||||
Development and patent expenses
|
$
|
41,368
|
$
|
20,901
|
||||
General and administrative expenses
|
4,884
|
796
|
||||||
Total operating expenses, excluding non-cash compensation expense related to equity awards
|
46,252
|
21,697
|
||||||
Non-cash compensation expense related to equity awards
|
6,496
|
—
|
||||||
Total Akcea Therapeutics operating expenses
|
$
|
52,748
|
$
|
21,697
|
Year Ended,
December 31
|
||||||||
2015
|
2014
|
|||||||
2¾ percent notes:
|
||||||||
Non-cash amortization of the debt discount and debt issuance costs
|
$
|
2,530
|
$
|
7,210
|
||||
Interest expense payable in cash
|
1,684
|
5,074
|
||||||
1 percent notes:
|
||||||||
Non-cash amortization of the debt discount and debt issuance costs
|
20,678
|
2,364
|
||||||
Interest expense payable in cash
|
4,999
|
597
|
||||||
Non-cash interest expense for long-term financing liability
|
6,665
|
6,622
|
||||||
Other
|
176
|
342
|
||||||
Total interest expense
|
$
|
36,732
|
$
|
22,209
|
|
Payments Due by Period (in millions)
|
|||||||||||||||||||
Contractual Obligations
(selected balances described below)
|
Total
|
Less than
1 year
|
1-3 years
|
3-5 years
|
After
5 years
|
|||||||||||||||
1 percent convertible senior notes (principal and interest payable)
|
$
|
719.8
|
$
|
6.9
|
$
|
13.7
|
$
|
699.2
|
$
|
—
|
||||||||||
Financing arrangements (principal and interest payable)
|
$
|
13.4
|
$
|
0.3
|
$
|
13.1
|
$
|
—
|
$
|
—
|
||||||||||
Facility rent payments
|
$
|
119.0
|
$
|
6.5
|
$
|
13.9
|
$
|
14.7
|
$
|
83.9
|
||||||||||
Other obligations (principal and interest payable)
|
$
|
1.2
|
$
|
0.1
|
$
|
0.1
|
$
|
0.1
|
$
|
0.9
|
||||||||||
Operating leases
|
$
|
22.9
|
$
|
2.1
|
$
|
3.2
|
$
|
2.9
|
$
|
14.7
|
||||||||||
Total
|
$
|
876.3
|
$
|
15.9
|
$
|
44.0
|
$
|
716.9
|
$
|
99.5
|
1 Percent Convertible
Senior Notes
|
||||
Outstanding principal balance
|
$
|
685.5
|
||
Original issue date ($500 million of principal)
|
November 2014
|
|||
Additional issue date ($185.5 million of principal)
|
December 2016
|
|||
Maturity date
|
November 2021
|
|||
Interest rate
|
1 percent
|
|||
Conversion price per share
|
$
|
66.81
|
||
Total shares of common stock subject to conversion
|
10.3
|
(i)
|
a floating rate equal to the one-month London Interbank Offered Rate, or LIBOR, in effect plus 1.25 percent per annum;
|
(ii)
|
a fixed rate equal to LIBOR plus 1.25 percent for a period of one, two, three, four, six, or twelve months as elected by us; or
|
(iii)
|
a fixed rate equal to the LIBOR swap rate during the period of the loan.
|
|
/s/ ERNST & YOUNG LLP
|
|
|
San Diego, California
|
|
March 1, 2017
|
|
(1)
|
Any information that is included on or linked to our website is not part of this Form 10-K.
|
Plan Category
|
Number of Shares
to be Issued Upon Exercise of Outstanding Options |
Weighted Average
Exercise Price of Outstanding Options |
Number of Shares
Remaining Available for Future Issuance |
|
|||||||||
Equity compensation plans approved by stockholders(a)
|
9,177,979
|
$
|
40.48
|
4,434,959
|
(b)
|
||||||||
Total
|
9,177,979
|
$
|
40.48
|
4,434,959
|
|
(a) |
Consists of four Ionis plans: 1989 Stock Option Plan, Amended and Restated 2002 Non-Employee Directors’ Stock Option Plan, 2011 Equity Incentive Plan and Employee Stock Purchase Plan, or ESPP.
|
(b) |
Of these shares, 585,713 remained available for purchase under the ESPP as of December 31, 2016. The ESPP incorporates an evergreen formula pursuant to which on January 1 of each year, we automatically increase the aggregate number of shares reserved for issuance under the plan by 150,000 shares.
|
|
IONIS PHARMACEUTICALS, INC.
|
|
|
|
|
|
By:
|
/s/ STANLEY T. CROOKE
|
|
|
Stanley T. Crooke, M.D., Ph.D.
|
|
|
Chairman of the Board, President and Chief Executive Officer (Principal executive officer)
|
Signatures
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ STANLEY T. CROOKE
|
|
Chairman of the Board, President, and Chief Executive Officer
|
|
March 1, 2017
|
Stanley T. Crooke, M.D., Ph.D.
|
|
(Principal executive officer)
|
|
|
|
|
|
|
|
/s/ B. LYNNE PARSHALL
|
|
Director, Chief Operating Officer and Secretary
|
|
March 1, 2017
|
B. Lynne Parshall, J.D.
|
|
|
|
|
|
|
|
|
|
/s/ ELIZABETH L. HOUGEN
|
|
Senior Vice President, Finance and Chief Financial Officer
|
|
March 1, 2017
|
Elizabeth L. Hougen
|
|
(Principal financial and accounting officer)
|
|
|
|
|
|
|
|
/s/ SPENCER R. BERTHELSEN
|
|
Director
|
|
March 1, 2017
|
Spencer R. Berthelsen, M.D.
|
|
|
|
|
|
|
|
|
|
/s/ BREAUX CASTLEMAN
|
|
Director
|
|
March 1, 2017
|
Breaux Castleman
|
|
|
|
|
|
|
|
|
|
/s/ JOSEPH KLEIN
|
|
Director
|
|
March 1, 2017
|
Joseph Klein, III
|
|
|
|
|
|
|
|
|
|
/s/ JOSEPH LOSCALZO
|
|
Director
|
|
March 1, 2017
|
Joseph Loscalzo, M.D., Ph.D.
|
|
|
|
|
|
|
|
|
|
/s/ FREDERICK T. MUTO
|
|
Director
|
|
March 1, 2017
|
Frederick T. Muto, Esq.
|
|
|
|
|
|
|
|
|
|
/s/ JOSEPH H. WENDER
|
|
Director
|
|
March 1, 2017
|
Joseph H. Wender
|
|
|
|
|
Exhibit
Number |
|
Description of Document
|
3.1
|
|
Amended and Restated Certificate of Incorporation filed June 19, 1991. - Filed as an exhibit to the Registrant’s Registration Statement on Form S-1 (No. 33-39640) or amendments thereto and incorporated herein by reference.
|
|
|
|
3.2
|
|
Certificate of Amendment to Restated Certificate of Incorporation filed June 17, 2014. - Filed as an exhibit to the Registrant’s Notice of Annual Meeting and Proxy Statement, for the 2014 Annual Meeting of Stockholders, filed with the SEC on April 25, 2014, and incorporated herein by reference.
|
3.3
|
Certificate of Amendment to Restated Certificate of Incorporation filed December 18, 2015. - Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed December 18, 2015 and incorporated herein by reference.
|
|
|
|
|
3.4
|
|
Amended and Restated Bylaws. - Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed December 18, 2015 and incorporated herein by reference.
|
|
|
|
4.1
|
|
Certificate of Designation of the Series C Junior Participating Preferred Stock. - Filed as an exhibit to Registrant’s Report on Form 8-K dated filed December 13, 2000 and incorporated herein by reference.
|
|
|
|
4.2
|
|
Specimen Common Stock Certificate. - Filed as an exhibit to the Registrant’s Registration Statement on Form S-1 (No. 33-39640) or amendments thereto and incorporated herein by reference.
|
|
|
|
4.3
|
|
Indenture, dated as of August 13, 2012, between the Registrant and Wells Fargo Bank, National Association, as trustee, including Form of 2¾ percent Convertible Senior Note due 2019. - Filed as an exhibit to the Registrant’s Report on Form 8-K filed August 13, 2012 and incorporated herein by reference.
|
4.4
|
Indenture, dated as of November 17, 2014, between the Registrant and Wells Fargo Bank, National Association, as trustee, including Form of 1.00 percent Convertible Senior Note due 2021. - Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed November 21, 2014 and incorporated herein by reference.
|
|
|
|
|
10.1
|
|
Form of Indemnity Agreement entered into between the Registrant and its Directors and Officers with related schedule. - Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated herein by reference.
|
|
|
|
10.2*
|
|
Registrant’s 1989 Stock Option Plan, as amended. - Filed as an exhibit to Registrant’s Notice of Annual Meeting and Proxy Statement for the 2012 Annual Meeting of Stockholders, filed with the SEC on April 16, 2012, and incorporated herein by reference.
|
|
|
|
10.3*
|
|
Registrant’s Amended and Restated 2000 Employee Stock Purchase Plan. - Filed as an exhibit to Registrant’s Notice of Annual Meeting and Proxy Statement for the 2009 Annual Meeting of Stockholders, filed with the SEC on April 20, 2009, and incorporated herein by reference.
|
|
|
|
10.4
|
|
Form of Employee Assignment of Patent Rights. - Filed as an exhibit to the Registrant’s Registration Statement on Form S-1 (No. 33-39640) or amendments thereto and incorporated herein by reference.
|
|
|
|
10.5
|
|
Patent Rights Purchase Agreement between the Registrant and Gilead Sciences, Inc., dated December 18, 1998. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 1998 and incorporated herein by reference.
|
|
|
|
10.6
|
|
Collaboration and License Agreement between the Registrant and Hybridon, Inc., dated May 24, 2001. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s report on Form 10-Q as amended for the quarter ended June 30, 2001 and incorporated herein by reference.
|
10.7
|
|
Amendment #1 to the Research, Development and License Agreement dated May 11, 2011 by and between the Registrant and Glaxo Group Limited. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 and incorporated herein by reference.
|
|
|
|
10.8
|
|
Amended and Restated Collaboration and License Agreement between the Registrant and Antisense Therapeutics Ltd dated February 8, 2008. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2008 and incorporated herein by reference.
|
|
|
|
10.9
|
|
Amended and Restated License Agreement between the Registrant and Atlantic Pharmaceuticals Limited dated November 30, 2009. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Annual Report as Form 10-K for the year ended December 31, 2009 and incorporated herein by reference.
|
10.10
|
|
Amended and Restated License Agreement dated July 2, 2008 between the Registrant and OncoGenex Technologies Inc. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2008 and incorporated herein by reference.
|
|
|
|
10.11
|
|
Lease Agreement between the Registrant and BMR-Gazelle Court LLC dated March 30, 2010. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 and incorporated herein by reference.
|
|
|
|
10.12
|
|
Second Amendment to Lease Agreement dated May 15, 2011 between the Registrant and BMR-Gazelle Court LLC, with First Amendment to Lease Agreement included. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 and incorporated herein by reference.
|
|
|
|
10.13
|
|
Registrant’s Amended and Restated 10b5-1 Trading Plan dated September 12, 2013. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 and incorporated herein by reference.
|
|
|
|
10.14*
|
|
Registrant’s Amended and Restated 2002 Non-Employee Directors’ Stock Option Plan, as amended. - Filed as an exhibit to the Registrant’s Notice of Annual Meeting and Proxy Statement, for the 2014 Annual Meeting of Stockholders, filed with the SEC on April 25, 2014, and incorporated herein by reference.
|
|
|
|
10.15*
|
|
Registrant’s Form of 2002 Non-Employee Directors’ Stock Option Agreement. - Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2001 and incorporated herein by reference.
|
10.16*
|
|
Form of Restricted Stock Unit Agreement for Restricted Stock Units granted under the Ionis Pharmaceuticals, Inc. Amended and Restated 2002 Non-Employee Directors’ Stock Option Plan. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 and incorporated herein by reference.
|
|
|
|
10.17*
|
|
Amended and Restated Severance Agreement dated December 3, 2008 between the Registrant and Stanley T. Crooke. - Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed December 5, 2008 and incorporated herein by reference.
|
|
|
|
10.18*
|
|
Amended and Restated Severance Agreement dated December 3, 2008 between the Registrant and B. Lynne Parshall. - Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed December 5, 2008 and incorporated herein by reference.
|
10.19*
|
|
Ionis Pharmaceuticals, Inc. 2011 Equity Incentive Plan - Filed as an exhibit to the Registrant’s Notice of 2011 Annual Meeting of Stockholders and Proxy Statement filed with the SEC on April 28, 2011, and incorporated herein by reference.
|
|
|
|
10.20*
|
|
Form of Option Agreement under the 2011 Equity Incentive Plan. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 and incorporated herein by reference.
|
|
|
|
10.21*
|
|
Form of Restricted Stock Unit Agreement for Restricted Stock Units granted under the 2011 Equity Incentive Plan. - Filed as an exhibit to the Registrant’s Registration Statement on Form S-8 filed with the SEC on August 8, 2011, and incorporated herein by reference.
|
|
|
|
10.22
|
|
Second Amendment to Lease Agreement between the Registrant and BMR-2282 Faraday Avenue LLC dated March 30, 2010. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 and incorporated herein by reference.
|
|
|
|
10.23*
|
|
Form of Option Agreement under the 1989 Stock Option Plan. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 and incorporated herein by reference.
|
|
|
|
10.24*
|
|
Form of Option Agreement for Options Granted after March 8, 2005 under the 2002 Non-Employee Director’s Stock Option Plan. - Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2004 and incorporated herein by reference.
|
|
|
|
10.25
|
|
Research, Development and License Agreement between the Registrant and Glaxo Group Limited dated March 30, 2010. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2010 and incorporated herein by reference.
|
|
|
|
10.26
|
|
Lease Agreement dated September 6, 2005 between the Registrant and BMR-2282 Faraday Avenue LLC. - Filed as an exhibit to Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2005 and incorporated herein by reference.
|
10.27
|
|
Stock Purchase Agreement dated December 17, 2008, among the Registrant, Ibis Biosciences, Inc. and Abbott Molecular Inc. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 and incorporated herein by reference.
|
|
|
|
10.28
|
|
Research Agreement dated August 10, 2011 between the Registrant and CHDI Foundation, Inc. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011 and incorporated herein by reference.
|
|
|
|
10.29
|
|
Amendment No. 1 to Amended and Restated License Agreement between the Registrant and OncoGenex Technologies Inc. dated December 18, 2009. - Filed as an exhibit to the Registrant’s Annual Report as Form 10-K for the year ended December 31, 2009 and incorporated herein by reference.
|
|
|
|
10.30
|
|
Development, Option and License Agreement between the Registrant and Biogen Idec International Holding Ltd. dated January 3, 2012. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 and incorporated herein by reference.
|
|
|
|
10.31
|
|
DMPK Research, Development, Option and License Agreement between the Registrant and Biogen Idec MA Inc. dated June 27, 2012. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2012 and incorporated herein by reference.
|
|
|
|
10.32
|
|
Amendment #2 to Research, Development and License Agreement between the Registrant and Glaxo Group Limited dated October 30, 2012. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated herein by reference.
|
|
|
|
10.33
|
|
Collaboration, License and Development Agreement between the Registrant and AstraZeneca AB dated December 7, 2012. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated herein by reference.
|
10.34
|
|
Neurology Drug Discovery and Development Collaboration, Option and License Agreement between the Registrant and Biogen Idec MA Inc. dated December 10, 2012. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2012 and incorporated herein by reference.
|
|
|
|
10.35
|
|
HTT Research, Development, Option and License Agreement among the Registrant, F. Hoffmann-La Roche Ltd and Hoffman-La Roche Inc. dated April 8, 2013. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 and incorporated herein by reference.
|
|
|
|
10.36
|
|
Letter Agreement between the Registrant and CHDI Foundation, Inc. dated April 8, 2013. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2013 and incorporated herein by reference.
|
|
|
|
10.37
|
|
Strategic Neurology Drug Discovery and Development Collaboration, Option and License Agreement between the Registrant and Biogen Idec MA Inc. dated September 5, 2013. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 and incorporated herein by reference.
|
10.38
|
|
Amendment #1 to Collaboration, License and Development Agreement between the Registrant and AstraZeneca AB dated August 13, 2013. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 and incorporated herein by reference.
|
10.39
|
Letter Agreement Amendment between the Registrant and Biogen Idec International Holding Ltd dated January 27, 2014. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2014 and incorporated herein by reference.
|
|
10.40
|
Amendment No. 3 to the Research, Development and License Agreement between the Registrant and Glaxo Group Limited dated July 10, 2013. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 and incorporated herein by reference.
|
|
10.41
|
Amendment #4 to the Research, Development and License Agreement between the Registrant and Glaxo Group Limited dated April 10, 2014. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 and incorporated herein by reference.
|
|
10.42
|
Amendment #5 to the Research, Development and License Agreement among the Registrant, Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Limited dated June 27, 2014. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2014 and incorporated herein by reference.
|
|
10.43
|
Exclusive License Agreement between the Registrant and the University of Massachusetts dated January 14, 2010. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 and incorporated herein by reference.
|
|
10.44
|
Amended and Restated Collaboration and License Agreement between the Registrant and Cold Spring Harbor Laboratory dated October 26, 2011. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 and incorporated herein by reference.
|
|
10.45
|
Amendment to Amended and Restated Collaboration and License Agreement between the Registrant and Cold Spring Harbor Laboratory dated March 14, 2014. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2014 and incorporated herein by reference.
|
|
10.46
|
Amendment #1 to the Development, Option and License Agreement between the Registrant and Biogen Idec International Holding Ltd. dated December 15, 2014. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014 and incorporated herein by reference.
|
|
10.47
|
Research Collaboration, Option and License Agreement between the Registrant and Janssen Biotech Inc. dated December 22, 2014. Portions of this exhibit have been omitted and separately filed with the SEC. - Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014 and incorporated herein by reference.
|
|
10.48
|
Amendment No.2 to the Collaboration, License and Development Agreement between the Registrant and AstraZeneca AB dated October 15, 2014. Portions of this exhibit have been omitted and separately filed with the SEC with a request for confidential treatment. - Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014 and incorporated herein by reference.
|
|
10.49
|
Strategic Collaboration Agreement between the Registrant and AstraZeneca AB dated July 31, 2015. Portions of this exhibit have been omitted and separately filed with the SEC. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 and incorporated herein by reference.
|
|
10.50
|
Amendment #6 to Research, Development and License Agreement between the Registrant, Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Limited dated September 2, 2015. Portions of this exhibit have been omitted and separately filed with the SEC. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 and incorporated herein by reference.
|
|
10.51
|
Amendment Number One to the Second Amended and Restated Strategic Collaboration and License Agreement between the Registrant and Alnylam Pharmaceuticals, Inc. dated July 13, 2015. Portions of this exhibit have been omitted and separately filed with the SEC. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2015 and incorporated herein by reference.
|
|
10.52
|
License Agreement between the Registrant and Bayer Pharma AG dated May 1, 2015. Portions of this exhibit have been omitted and separately filed with the SEC. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 and incorporated herein by reference.
|
10.53
|
Line of Credit Agreement between the Registrant and Morgan Stanley Private Bank, National Association dated June 16, 2015. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 and incorporated herein by reference.
|
|||
10.54
|
Second Amended and Restated Strategic Collaboration and License Agreement between the Registrant and Alnylam Pharmaceuticals, Inc. dated January 8, 2015. Portions of this exhibit have been omitted and separately filed with the SEC. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 and incorporated herein by reference.
|
|||
10.55
|
Amendment #1 to HTT Research, Development, Option and License Agreement between the Registrant, F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. dated January 9, 2015. Portions of this exhibit have been omitted and separately filed with the SEC. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015 and incorporated herein by reference.
|
|||
10.56
|
Amendment No.1 to Loan Documents between the Registrant and Morgan Stanley Private Bank, National Association dated December 30, 2015. - Filed as an exhibit to the Registrant’s Current Report on Form 8-K filed January 5, 2016 and incorporated herein by reference.
|
|||
10.57
|
Amendment No.2 to Line of Credit Agreement between the Registrant and Morgan Stanley Private Bank, National Association dated February 24, 2016. Filed as an exhibit to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2015 and incorporated herein by reference.
|
|||
|
|
|
||
10.58
|
Amendment No.3 to the Collaboration, License and Development Agreement between the Registrant and AstraZeneca AB dated January 18, 2016. Portions of this exhibit have been omitted and separately filed with the SEC. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 and incorporated herein by reference.
|
|||
10.59
|
Amendment #7 to the Research, Development and License Agreement among the Registrant, Glaxo Group Limited and GlaxoSmithKline Intellectual Property Development Limited dated March 4, 2016. Portions of this exhibit have been omitted and separately filed with the SEC. - Filed as an exhibit to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2016 and incorporated herein by reference.
|
|||
10.60
|
First Amendment to Research Collaboration, Option and License Agreement between the Registrant and Janssen Biotech Inc. dated December 21, 2016. Portions of this exhibit have been omitted and separately filed with the SEC.
|
|||
10.61
|
Letter Agreement between the Registrant and Biogen MA Inc. dated October 28, 2016. Portions of this exhibit have been omitted and separately filed with the SEC. Portions of this exhibit have been omitted and separately filed with the SEC.
|
|||
14.1
|
|
Registrant’s Code of Ethics and Business Conduct.
|
||
|
|
|
||
21.1
|
|
List of Subsidiaries for the Registrant.
|
||
|
|
|
||
23.1
|
|
Consent of Independent Registered Public Accounting Firm.
|
||
|
|
|
||
24.1
|
|
Power of Attorney - Filed as part of the Annual Report on Form 10-K for the year ended December 31, 2013, and incorporated herein by reference.
|
||
|
|
|
||
31.1
|
|
Certification by Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
|
|
|
||
31.2
|
|
Certification by Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
||
|
|
|
||
32.1
|
|
Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
||
|
|
|
||
101
|
|
The following financial statements from the Ionis Pharmaceuticals, Inc. Annual Report on Form 10-K for the year ended December 31, 2016, formatted in Extensive Business Reporting Language (XBRL): (i) consolidated balance sheets, (ii) consolidated statements of operations, (iii) consolidated statements of stockholders’ equity, (iv) consolidated statements of cash flows, and (v) notes to consolidated financial statements (detail tagged).
|
||
*
|
|
Indicates management compensatory plans and arrangements as required to be filed as exhibits to this Report pursuant to Item 14(c).
|
|
Page
|
Report of Independent Registered Public Accounting Firm
|
F-2
|
Consolidated Balance Sheets at December 31, 2016 and 2015
|
F-3
|
Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014
|
F-4
|
Consolidated Statements of Comprehensive Loss for the years ended December 31, 2016, 2015 and 2014
|
F-5
|
Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2016, 2015 and 2014
|
F-6
|
Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014
|
F-7
|
Notes to Consolidated Financial Statements
|
F-9
|
|
/s/ ERNST & YOUNG LLP
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
84,685
|
$
|
128,797
|
||||
Short-term investments
|
580,538
|
650,386
|
||||||
Contracts receivable
|
108,043
|
11,356
|
||||||
Inventories
|
7,489
|
6,899
|
||||||
Investment in Regulus Therapeutics Inc.
|
2,414
|
24,792
|
||||||
Other current assets
|
14,763
|
14,773
|
||||||
Total current assets
|
797,932
|
837,003
|
||||||
Property, plant and equipment, net
|
92,845
|
90,233
|
||||||
Patents, net
|
20,365
|
19,316
|
||||||
Deposits and other assets
|
1,325
|
1,348
|
||||||
Total assets
|
$
|
912,467
|
$
|
947,900
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
21,120
|
$
|
28,355
|
||||
Accrued compensation
|
24,186
|
16,065
|
||||||
Accrued liabilities
|
36,013
|
28,105
|
||||||
Current portion of long-term obligations
|
1,185
|
9,029
|
||||||
Current portion of deferred contract revenue
|
51,280
|
67,322
|
||||||
Total current liabilities
|
133,784
|
148,876
|
||||||
Long-term deferred contract revenue
|
91,198
|
134,306
|
||||||
1 percent convertible senior notes
|
500,511
|
339,847
|
||||||
2¾ percent convertible senior notes
|
124
|
49,523
|
||||||
Long-term obligations, less current portion
|
14,926
|
2,341
|
||||||
Long-term financing liability for leased facility
|
72,359
|
72,217
|
||||||
Total liabilities
|
812,902
|
747,110
|
||||||
Stockholders’ equity:
|
||||||||
Common stock, $0.001 par value; 300,000,000 shares authorized, 121,636,273 and 120,351,480 shares issued and outstanding at December 31, 2016 and December 31, 2015, respectively
|
122
|
120
|
||||||
Additional paid-in capital
|
1,311,229
|
1,309,107
|
||||||
Accumulated other comprehensive income (loss)
|
(30,358
|
)
|
(13,565
|
)
|
||||
Accumulated deficit
|
(1,181,428
|
)
|
(1,094,872
|
)
|
||||
Total stockholders’ equity
|
99,565
|
200,790
|
||||||
Total liabilities and stockholders’ equity
|
$
|
912,467
|
$
|
947,900
|
Years Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Revenue:
|
||||||||||||
Research and development revenue under collaborative agreements
|
$
|
325,898
|
$
|
281,360
|
$
|
202,514
|
||||||
Licensing and royalty revenue
|
20,722
|
2,343
|
11,647
|
|||||||||
Total revenue
|
346,620
|
283,703
|
214,161
|
|||||||||
Expenses:
|
||||||||||||
Research, development and patent expenses
|
344,320
|
322,292
|
241,751
|
|||||||||
General and administrative
|
48,616
|
37,173
|
20,140
|
|||||||||
Total operating expenses
|
392,936
|
359,465
|
261,891
|
|||||||||
Loss from operations
|
(46,316
|
)
|
(75,762
|
)
|
(47,730
|
)
|
||||||
Other income (expense):
|
||||||||||||
Investment income
|
5,416
|
4,302
|
2,682
|
|||||||||
Interest expense
|
(38,795
|
)
|
(36,732
|
)
|
(22,209
|
)
|
||||||
Gain on investments, net
|
56
|
75
|
1,256
|
|||||||||
Gain on investment in Regulus Therapeutics Inc.
|
—
|
20,211
|
19,902
|
|||||||||
Loss on early retirement of debt
|
(3,983
|
)
|
—
|
(8,292
|
)
|
|||||||
Loss before income tax (expense) benefit
|
(83,622
|
)
|
(87,906
|
)
|
(54,391
|
)
|
||||||
Income tax (expense) benefit
|
(2,934
|
)
|
(372
|
)
|
15,407
|
|||||||
Net loss
|
$
|
(86,556
|
)
|
$
|
(88,278
|
)
|
$
|
(38,984
|
)
|
|||
Basic and diluted net loss per share
|
$
|
(0.72
|
)
|
$
|
(0.74
|
)
|
$
|
(0.33
|
)
|
|||
Shares used in computing basic and diluted net loss per share
|
120,933
|
119,719
|
117,691
|
Years Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Net loss
|
$
|
(86,556
|
)
|
$
|
(88,278
|
)
|
$
|
(38,984
|
)
|
|||
Unrealized (losses) gains on investments, net of tax
|
(17,219
|
)
|
(33,101
|
)
|
40,079
|
|||||||
Reclassification adjustment for realized gains (losses) included in net loss
|
447
|
(20,211
|
)
|
(21,412
|
)
|
|||||||
Currency translation adjustment
|
(21
|
)
|
—
|
—
|
||||||||
Comprehensive loss
|
$
|
(103,349
|
)
|
$
|
(141,590
|
)
|
$
|
(20,317
|
)
|
Common Stock
|
||||||||||||||||||||||||
Description
|
Shares
|
Amount
|
Additional
Paid In
Capital
|
Accumulated
Other
Comprehensive
Income (Loss)
|
Accumulated
Deficit
|
Total
Stockholders’
Equity
|
||||||||||||||||||
Balance at December 31, 2013
|
116,471
|
$
|
116
|
$
|
1,324,804
|
$
|
21,080
|
$
|
(967,610
|
)
|
$
|
378,390
|
||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
(38,984
|
)
|
(38,984
|
)
|
||||||||||||||||
Change in unrealized gains (losses), net of tax
|
—
|
—
|
—
|
18,667
|
—
|
18,667
|
||||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
1,972
|
2
|
23,071
|
—
|
—
|
23,073
|
||||||||||||||||||
2¾ percent convertible senior notes redemption, equity portion
|
—
|
—
|
(326,444
|
)
|
—
|
—
|
(326,444
|
)
|
||||||||||||||||
1 percent convertible senior notes, equity portion, net of issuance costs
|
—
|
—
|
170,232
|
—
|
—
|
170,232
|
||||||||||||||||||
Share-based compensation expense
|
—
|
—
|
31,383
|
—
|
—
|
31,383
|
||||||||||||||||||
Excess tax benefits from share-based compensation awards
|
—
|
—
|
1,463
|
—
|
—
|
1,463
|
||||||||||||||||||
Balance at December 31, 2014
|
118,443
|
$
|
118
|
$
|
1,224,509
|
$
|
39,747
|
$
|
(1,006,594
|
)
|
$
|
257,780
|
||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
(88,278
|
)
|
(88,278
|
)
|
||||||||||||||||
Change in unrealized gains (losses), net of tax
|
—
|
—
|
—
|
(53,312
|
)
|
—
|
(53,312
|
)
|
||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
1,908
|
2
|
24,888
|
—
|
—
|
24,890
|
||||||||||||||||||
Share-based compensation expense
|
—
|
—
|
59,314
|
—
|
—
|
59,314
|
||||||||||||||||||
Excess tax benefits from share-based compensation awards
|
—
|
—
|
396
|
—
|
—
|
396
|
||||||||||||||||||
Balance at December 31, 2015
|
120,351
|
$
|
120
|
$
|
1,309,107
|
$
|
(13,565
|
)
|
$
|
(1,094,872
|
)
|
$
|
200,790
|
|||||||||||
Net loss
|
—
|
—
|
—
|
—
|
(86,556
|
)
|
(86,556
|
)
|
||||||||||||||||
Change in unrealized gains (losses), net of tax
|
—
|
—
|
—
|
(16,772
|
)
|
—
|
(16,772
|
)
|
||||||||||||||||
Foreign currency translation
|
—
|
—
|
—
|
(21
|
)
|
—
|
(21
|
)
|
||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
1,285
|
2
|
13,706
|
—
|
—
|
13,708
|
||||||||||||||||||
2¾ percent convertible senior notes redemption, equity portion
|
—
|
—
|
(128,888
|
)
|
—
|
—
|
(128,888
|
)
|
||||||||||||||||
1 percent convertible senior notes, equity portion, net of issuance costs
|
—
|
—
|
43,335
|
—
|
—
|
43,335
|
||||||||||||||||||
Share-based compensation expense
|
—
|
—
|
72,108
|
—
|
—
|
72,108
|
||||||||||||||||||
Excess tax benefits from share-based compensation awards
|
—
|
—
|
1,861
|
—
|
—
|
1,861
|
||||||||||||||||||
Balance at December 31, 2016
|
121,636
|
122
|
1,311,229
|
(30,358
|
)
|
(1,181,428
|
)
|
99,565
|
Years Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Operating activities:
|
||||||||||||
Net loss
|
$
|
(86,556
|
)
|
$
|
(88,278
|
)
|
$
|
(38,984
|
)
|
|||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||||||
Depreciation
|
7,481
|
6,984
|
6,380
|
|||||||||
Amortization of patents
|
1,552
|
1,381
|
1,142
|
|||||||||
Amortization of licenses
|
—
|
1,873
|
1,882
|
|||||||||
Amortization of premium on investments, net
|
6,813
|
7,812
|
7,470
|
|||||||||
Amortization of debt issuance costs
|
1,225
|
1,133
|
595
|
|||||||||
Amortization of 2¾ convertible senior notes discount
|
2,564
|
2,347
|
6,723
|
|||||||||
Amortization of 1 percent convertible senior notes discount
|
21,326
|
19,728
|
2,256
|
|||||||||
Amortization of long-term financing liability for leased facility
|
6,693
|
6,665
|
6,622
|
|||||||||
Share-based compensation expense
|
72,108
|
59,314
|
31,383
|
|||||||||
Gain on investment in Regulus Therapeutics Inc.
|
—
|
(20,211
|
)
|
(19,902
|
)
|
|||||||
Loss on early retirement of debt
|
3,983
|
—
|
8,292
|
|||||||||
Gain on investments, net
|
(56
|
)
|
(75
|
)
|
(1,256
|
)
|
||||||
Non-cash losses related to patents, licensing and property, plant and equipment
|
2,297
|
1,881
|
1,305
|
|||||||||
Tax benefit from other unrealized gains on securities
|
—
|
—
|
(12,835
|
)
|
||||||||
Changes in operating assets and liabilities:
|
||||||||||||
Contracts receivable
|
(96,687
|
)
|
(7,453
|
)
|
7,199
|
|||||||
Inventories
|
(590
|
)
|
(609
|
)
|
1,743
|
|||||||
Other current and long-term assets
|
1,659
|
(4,319
|
)
|
(1,750
|
)
|
|||||||
Accounts payable
|
(10,677
|
)
|
9,211
|
4,824
|
||||||||
Income taxes
|
1,069
|
—
|
(4,034
|
)
|
||||||||
Accrued compensation
|
8,121
|
3,763
|
134
|
|||||||||
Deferred rent
|
125
|
205
|
153
|
|||||||||
Accrued liabilities
|
4,595
|
(2,345
|
)
|
8,358
|
||||||||
Deferred contract revenue
|
(59,150
|
)
|
22,118
|
(11,415
|
)
|
|||||||
Net cash provided by (used in) operating activities
|
(112,105
|
)
|
21,125
|
6,285
|
||||||||
Investing activities:
|
||||||||||||
Purchases of short-term investments
|
(300,912
|
)
|
(493,467
|
)
|
(391,883
|
)
|
||||||
Proceeds from the sale of short-term investments
|
364,572
|
419,584
|
294,727
|
|||||||||
Purchases of property, plant and equipment
|
(7,107
|
)
|
(7,692
|
)
|
(7,518
|
)
|
||||||
Acquisition of licenses and other assets, net
|
(4,421
|
)
|
(4,056
|
)
|
(3,586
|
)
|
||||||
Proceeds from the sale of Regulus Therapeutics, Inc.
|
4,467
|
25,527
|
22,949
|
|||||||||
Proceeds from the sale of strategic investments
|
—
|
52
|
2,463
|
|||||||||
Net cash provided by (used in) investing activities
|
56,599
|
(60,052
|
)
|
(82,848
|
)
|
|||||||
Financing activities:
|
||||||||||||
Proceeds from equity, net
|
12,599
|
24,888
|
23,071
|
|||||||||
Proceeds from issuance of 1 percent convertible senior notes, net of issuance costs
|
—
|
—
|
487,035
|
|||||||||
Repurchase of $140 million of the principal amount of the 2¾
percent convertible senior notes
|
—
|
—
|
(441,394
|
)
|
||||||||
Proceeds from borrowing on line of credit facility
|
4,000
|
8,500
|
—
|
|||||||||
Excess tax benefits from share-based compensation awards
|
1,861
|
396
|
1,463
|
|||||||||
Principal payments on debt and capital lease obligations
|
(7,066
|
)
|
(9,058
|
)
|
(10,587
|
)
|
||||||
Net cash provided by financing activities
|
11,394
|
24,726
|
59,588
|
|||||||||
Net decrease in cash and cash equivalents
|
(44,112
|
)
|
(14,201
|
)
|
(16,975
|
)
|
||||||
Cash and cash equivalents at beginning of year
|
128,797
|
142,998
|
159,973
|
|||||||||
Cash and cash equivalents at end of year
|
$
|
84,685
|
$
|
128,797
|
$
|
142,998
|
Supplemental disclosures of cash flow information:
|
||||||||||||
Interest paid
|
$
|
7,313
|
$
|
6,800
|
$
|
6,353
|
||||||
Supplemental disclosures of non-cash investing and financing activities:
|
||||||||||||
Amounts accrued for capital and patent expenditures
|
$
|
3,439
|
$
|
1,162
|
$
|
2,151
|
||||||
1 percent convertible senior notes principal issued related to our December 2016 debt exchange
|
$
|
185,450
|
$
|
—
|
$
|
—
|
||||||
2¾
percent convertible senior notes principal extinguished related to our December 2016 debt exchange
|
$
|
61,099
|
$
|
—
|
$
|
—
|
|
percent convertible senior notes;
|
|
2¾ percent convertible senior notes;
|
|
Dilutive stock options;
|
|
Unvested restricted stock units; and
|
|
Employee Stock Purchase Plan, or ESPP.
|
|
The exclusive license we granted to Bayer to develop and commercialize IONIS-FXI
Rx
for the treatment of thrombosis;
|
|
The development services we agreed to perform for IONIS-FXI
Rx
; and
|
|
The initial supply of API.
|
|
Estimated future product sales;
|
|
Estimated royalties on future product sales;
|
|
Contractual milestone payments;
|
|
Expenses we expect to incur;
|
|
Income taxes; and
|
|
An appropriate discount rate.
|
|
The number of internal hours we will spend performing these services;
|
|
The estimated cost of work we will perform;
|
|
The estimated cost of work that we will contract with third parties to perform; and
|
|
The estimated cost of drug product we will use.
|
|
$91.2 million to the IONIS-FXI
Rx
exclusive license;
|
|
$4.3 million for development services; and
|
|
$4.5
million for the delivery of API.
|
|
We recognized the portion of the consideration attributed to the IONIS-FXI
Rx
license immediately in the second quarter of 2015 because we delivered the license and earned the revenue;
|
|
We recognized the amount attributed to the development services for IONIS-FXI
Rx
over the period of time we performed the services; and
|
|
We are recognizing the amount attributed to the API supply as we deliver it to Bayer.
|
|
In January 2012, we entered into a collaboration agreement with Biogen to develop and commercialize SPINRAZA (nusinersen) for spinal muscular atrophy, or SMA. As part of the collaboration, we received a $29 million upfront payment and we were responsible for global development of SPINRAZA through completion of Phase 2/3 clinical trials.
|
|
In June 2012, we entered into a second and separate collaboration agreement with Biogen to develop and commercialize a novel antisense drug targeting DMPK, or dystrophia myotonica-protein kinase. As part of the collaboration, we received a $12 million upfront payment and we are responsible for global development of the drug through the completion of a Phase 2 clinical trial.
|
|
In December 2012, we entered into a third and separate collaboration agreement with Biogen to discover and develop antisense drugs against three targets to treat neurological or neuromuscular disorders. As part of the collaboration, we received a $30 million upfront payment and we are responsible for the discovery of a lead antisense drug for each of three targets.
|
|
In September 2013, we entered into a fourth and separate collaboration agreement with Biogen to leverage antisense technology to advance the treatment of neurodegenerative diseases. We granted Biogen exclusive rights to the use of our antisense technology to develop therapies for neurological diseases as part of this broad collaboration. We received a $100 million upfront payment and we are responsible for discovery and early development through the completion of a Phase 2 clinical trial for each antisense drug identified during the six-year term of this collaboration, while Biogen is responsible for the creation and development of small molecule treatments and biologics.
|
|
Designation of a development candidate. Following the designation of a development candidate, IND-enabling animal studies for a new development candidate generally take 12 to 18 months to complete;
|
|
Initiation of a Phase 1 clinical trial. Generally, Phase 1 clinical trials take one to two years to complete;
|
|
Initiation or completion of a Phase 2 clinical trial. Generally, Phase 2 clinical trials take one to three years to complete;
|
|
Initiation or completion of a Phase 3 clinical trial. Generally, Phase 3 clinical trials take two to four years to complete.
|
|
Filing of regulatory applications for marketing authorization such as a New Drug Application, or NDA, in the United States or a Marketing Authorization Application, or MAA, in Europe. Generally, it takes six to twelve months to prepare and submit regulatory filings.
|
|
Marketing authorization in a major market, such as the United States, Europe or Japan. Generally it takes one to two years after an application is submitted to obtain authorization from the applicable regulatory agency.
|
|
First commercial sale in a particular market, such as in the United States or Europe.
|
|
Product sales in excess of a pre-specified threshold, such as annual sales exceeding $1 billion. The amount of time to achieve this type of milestone depends on several factors including but not limited to the dollar amount of the threshold, the pricing of the product and the pace at which customers begin using the product.
|
|
Substantive uncertainty exists as to the achievement of the milestone event at the inception of the arrangement;
|
|
The achievement of the milestone involves substantive effort and can only be achieved based in whole or in part on our performance or the occurrence of a specific outcome resulting from our performance;
|
|
The amount of the milestone payment appears reasonable either in relation to the effort expended or to the enhancement of the value of the delivered items;
|
|
There is no future performance required to earn the milestone; and
|
|
The consideration is reasonable relative to all deliverables and payment terms in the arrangement.
|
Years Ending December 31,
|
Amortization
(in millions)
|
|||
2017
|
$
|
1.4
|
||
2018
|
$
|
1.3
|
||
2019
|
$
|
1.2
|
||
2020
|
$
|
1.1
|
||
2021
|
$
|
1.0
|
December 31,
|
||||||||||||
Estimated Useful Lives
(in years)
|
2016
|
2015
|
||||||||||
Computer software, laboratory, manufacturing and other equipment
|
3 to 10
|
$
|
63,287
|
$
|
56,822
|
|||||||
Building and building systems
|
25 to 40
|
48,909
|
48,163
|
|||||||||
Land improvements
|
20
|
2,853
|
2,853
|
|||||||||
Leasehold improvements
|
5 to 20
|
41,736
|
39,061
|
|||||||||
Furniture and fixtures
|
5 to 10
|
5,937
|
5,842
|
|||||||||
162,722
|
152,741
|
|||||||||||
Less accumulated depreciation
|
(80,075
|
)
|
(72,706
|
)
|
||||||||
82,647
|
80,035
|
|||||||||||
Land
|
10,198
|
10,198
|
||||||||||
Total
|
$
|
92,845
|
$
|
90,233
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Beginning balance accumulated other comprehensive (loss) income
|
$
|
(13,565
|
)
|
$
|
39,747
|
$
|
21,080
|
|||||
Unrealized (losses) gains on securities, net of tax (1)
|
(17,219
|
)
|
(33,101
|
)
|
40,079
|
|||||||
Amounts reclassified from accumulated other comprehensive (loss) income (2)
|
447
|
(20,211
|
)
|
(21,412
|
)
|
|||||||
Currency translation adjustment
|
(21
|
)
|
—
|
—
|
||||||||
Net other comprehensive (loss) income for the period
|
(16,793
|
)
|
(53,312
|
)
|
18,667
|
|||||||
Ending balance accumulated other comprehensive (loss) income
|
$
|
(30,358
|
)
|
$
|
(13,565
|
)
|
$
|
39,747
|
(1) |
Other comprehensive income includes income tax expense of $12.8 million for the year ended December 31, 2014. There was no tax expense for other comprehensive income for the years ended December 31, 2016 or 2015.
|
(2) |
Amounts for 2015 are included in the separate line called “Gain on investment in Regulus Therapeutics Inc.” on our Consolidated Statement of Operations. For 2014, $19.9 million is included in a separate line called “Gain on investment in Regulus Therapeutics Inc.”, with the remaining amount included in a separate line called “Gain on investments, net” on our Consolidated Statement of Operations.
|
At
December 31, 2016
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
||||||||||
Cash equivalents (1)
|
$
|
54,137
|
$
|
54,137
|
$
|
—
|
||||||
Corporate debt securities (2)
|
396,221
|
—
|
396,221
|
|||||||||
Debt securities issued by U.S. government agencies (2)
|
55,179
|
—
|
55,179
|
|||||||||
Debt securities issued by the U.S. Treasury (2)
|
29,286
|
29,286
|
—
|
|||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (3)
|
109,111
|
—
|
109,111
|
|||||||||
Investment in Regulus Therapeutics Inc.
|
2,414
|
2,414
|
—
|
|||||||||
Total
|
$
|
646,348
|
$
|
85,837
|
$
|
560,511
|
At
December 31, 2015
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable
Inputs
(Level 2)
|
||||||||||
Cash equivalents (1)
|
$
|
88,902
|
$
|
88,902
|
$
|
—
|
||||||
Corporate debt securities (2)
|
438,426
|
—
|
438,426
|
|||||||||
Debt securities issued by U.S. government agencies (2)
|
89,253
|
—
|
89,253
|
|||||||||
Debt securities issued by the U.S. Treasury (2)
|
2,601
|
2,601
|
—
|
|||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (4)
|
127,656
|
—
|
127,656
|
|||||||||
Investment in Regulus Therapeutics Inc.
|
24,792
|
24,792
|
—
|
|||||||||
Total
|
$
|
771,630
|
$
|
116,295
|
$
|
655,335
|
(1) |
Included in cash and cash equivalents on our consolidated balance sheet.
|
(2) |
Included in short-term investments on our consolidated balance sheet.
|
Year Ended
December 31,
|
||||
2015
|
||||
Beginning balance of Level 3 investments
|
$
|
81,881
|
||
Transfers into Level 3 investments
|
—
|
|||
Total gains (losses) included in accumulated other comprehensive income (loss)
|
22,377
|
|||
Transfers out of Level 3 investments
|
(104,258
|
)
|
||
Ending balance of Level 3 investments
|
$
|
—
|
One year or less
|
55 %
|
|
After one year but within two years
|
32 %
|
|
After two years but within three and a half years
|
13 %
|
|
Total
|
100 %
|
Gross Unrealized
|
||||||||||||||||
December 31, 2016
|
Cost
(1)
|
Gains
|
Losses
|
Estimated Fair Value
|
||||||||||||
Available-for-sale securities:
|
||||||||||||||||
Corporate debt securities
|
$
|
195,087
|
$
|
25
|
$
|
(161
|
)
|
$
|
194,951
|
|||||||
Debt securities issued by U.S. government agencies
|
26,548
|
—
|
(10
|
)
|
26,538
|
|||||||||||
Debt securities issued by the U.S. Treasury
|
29,298
|
2
|
(14
|
)
|
29,286
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (2)
|
72,775
|
2
|
(134
|
)
|
72,643
|
|||||||||||
Total securities with a maturity of one year or less
|
323,708
|
29
|
(319
|
)
|
323,418
|
|||||||||||
Corporate debt securities
|
202,408
|
36
|
(1,174
|
)
|
201,270
|
|||||||||||
Debt securities issued by U.S. government agencies
|
28,807
|
1
|
(167
|
)
|
28,641
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
36,816
|
1
|
(349
|
)
|
36,468
|
|||||||||||
Total securities with a maturity of more than one year
|
268,031
|
38
|
(1,690
|
)
|
266,379
|
|||||||||||
Total available-for-sale securities
|
$
|
591,739
|
$
|
67
|
$
|
(2,009
|
)
|
$
|
589,797
|
|||||||
Equity securities:
|
||||||||||||||||
Regulus Therapeutics Inc.
|
$
|
2,133
|
$
|
281
|
$
|
—
|
$
|
2,414
|
||||||||
Total equity securities
|
$
|
2,133
|
$
|
281
|
$
|
—
|
$
|
2,414
|
||||||||
Total available-for-sale and equity securities
|
$
|
593,872
|
$
|
348
|
$
|
(2,009
|
)
|
$
|
592,211
|
Gross Unrealized
|
||||||||||||||||
December 31, 2015
|
Cost
(1)
|
Gains
|
Losses
|
Estimated
Fair Value
|
||||||||||||
Available-for-sale securities:
|
||||||||||||||||
Corporate debt securities
|
$
|
181,670
|
$
|
5
|
$
|
(250
|
)
|
$
|
181,425
|
|||||||
Debt securities issued by U.S. government agencies
|
50,559
|
1
|
(19
|
)
|
50,541
|
|||||||||||
Debt securities issued by the U.S. Treasury
|
2,604
|
—
|
(3
|
)
|
2,601
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (2)
|
79,414
|
18
|
(88
|
)
|
79,344
|
|||||||||||
Total securities with a maturity of one year or less
|
314,247
|
24
|
(360
|
)
|
313,911
|
|||||||||||
Corporate debt securities
|
258,703
|
3
|
(1,705
|
)
|
257,001
|
|||||||||||
Debt securities issued by U.S. government agencies
|
38,956
|
—
|
(244
|
)
|
38,712
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
48,552
|
3
|
(243
|
)
|
48,312
|
|||||||||||
Total securities with a maturity of more than one year
|
346,211
|
6
|
(2,192
|
)
|
344,025
|
|||||||||||
Total available-for-sale securities
|
$
|
660,458
|
$
|
30
|
$
|
(2,552
|
)
|
$
|
657,936
|
|||||||
Equity securities:
|
||||||||||||||||
Regulus Therapeutics Inc.
|
$
|
7,162
|
$
|
17,630
|
$
|
—
|
$
|
24,792
|
||||||||
Total equity securities
|
$
|
7,162
|
$
|
17,630
|
$
|
—
|
$
|
24,792
|
||||||||
Total available-for-sale and equity securities
|
$
|
667,620
|
$
|
17,660
|
$
|
(2,552
|
)
|
$
|
682,728
|
(1) |
Our available-for-sale securities are held at amortized cost.
|
(2) |
Includes investments classified as cash equivalents on our consolidated balance sheet.
|
Less than 12 months of
Temporary Impairment
|
More than 12 months of
Temporary Impairment
|
Total Temporary
Impairment
|
||||||||||||||||||||||||||
Number of
Investments
|
Estimated
Fair Value
|
Unrealized
Losses
|
Estimated
Fair Value
|
Unrealized
Losses
|
Estimated
Fair Value
|
Unrealized
Losses
|
||||||||||||||||||||||
Corporate debt securities
|
255
|
$
|
280,393
|
$
|
(1,197
|
)
|
$
|
32,753
|
$
|
(138
|
)
|
$
|
313,146
|
$
|
(1,335
|
)
|
||||||||||||
Debt securities issued by U.S. government agencies
|
29
|
43,851
|
(177
|
)
|
—
|
—
|
43,851
|
(177
|
)
|
|||||||||||||||||||
Debt securities issued by the U.S. Treasury
|
2
|
18,782
|
(14
|
)
|
—
|
—
|
18,782
|
(14
|
)
|
|||||||||||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
135
|
80,896
|
(398
|
)
|
6,934
|
(85
|
)
|
87,830
|
(483
|
)
|
||||||||||||||||||
Total temporarily impaired securities
|
421
|
$
|
423,922
|
$
|
(1,786
|
)
|
$
|
39,687
|
$
|
(223
|
)
|
$
|
463,609
|
$
|
(2,009
|
)
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
1 percent convertible senior notes
|
$
|
500,511
|
$
|
339,847
|
||||
2¾ percent convertible senior notes
|
124
|
49,523
|
||||||
Long-term financing liability for leased facility
|
72,359
|
72,217
|
||||||
Fixed rate note with Morgan Stanley
|
12,500
|
—
|
||||||
Leases and other obligations
|
3,611
|
2,856
|
||||||
Total
|
$
|
589,105
|
$
|
464,443
|
||||
Less: current portion
|
(1,185
|
)
|
(515
|
)
|
||||
Total Long-Term Obligations
|
$
|
587,920
|
$
|
463,928
|
1 Percent
Convertible Senior Notes
|
||||
Outstanding balance
|
$
|
685.5
|
||
Original issue date ($500 million of principal)
|
November 2014
|
|||
Additional issue date ($185.5 million of principal)
|
December 2016
|
|||
Maturity date
|
November 2021
|
|||
Interest rate
|
1 percent
|
|||
Conversion price per share
|
$
|
66.81
|
||
Total shares of common stock subject to conversion
|
10.3
|
1 Percent
Convertible Senior Notes Issued in November 2014
|
1 Percent
Convertible Senior Notes Issued in December 2016
|
||
Nonconvertible debt borrowing rate
|
7.4 percent
|
6.8 percent
|
|
Effective interest rate
|
7.8 percent
|
7.2 percent
|
|
Amortization period of debt discount
|
7 years
|
5 years
|
December 31,
|
||||||||
2016
|
2015
|
|||||||
Fair value of outstanding notes
|
$
|
700,969
|
$
|
555,000
|
||||
Principal amount of convertible notes outstanding
|
$
|
685,450
|
$
|
500,000
|
||||
Unamortized portion of debt discount
|
$
|
175,699
|
$
|
152,786
|
||||
Long-term debt
|
$
|
500,511
|
$
|
339,847
|
||||
Carrying value of equity component
|
$
|
219,011
|
$
|
174,770
|
(i)
|
a floating rate equal to the one-month London Interbank Offered Rate, or LIBOR, in effect plus 1.25 percent per annum;
|
(ii)
|
a fixed rate equal to LIBOR plus 1.25 percent for a period of one, two, three, four, six, or twelve months as elected by us; or
|
(iii)
|
a fixed rate equal to the LIBOR swap rate during the period of the loan.
|
2017
|
$
|
7,271
|
||
2018
|
7,211
|
|||
2019
|
19,801
|
|||
2020
|
6,915
|
|||
2021
|
692,365
|
|||
Thereafter
|
840
|
|||
Subtotal
|
$
|
734,403
|
||
Less: current portion
|
(52
|
)
|
||
Less: fixed and determinable interest
|
(35,959
|
)
|
||
Less: unamortized portion of debt discount
|
(175,721
|
)
|
||
Plus: Deferred rent
|
2,130
|
|||
Total
|
$
|
524,801
|
Operating
Leases
|
||||
2017
|
$
|
1,954
|
||
2018
|
1,690
|
|||
2019
|
1,474
|
|||
2020
|
1,527
|
|||
2021
|
1,411
|
|||
Thereafter
|
14,714
|
|||
Total minimum payments
|
$
|
22,770
|
Future Rent
Payments
|
||||
2017
|
$
|
6,550
|
||
2018
|
6,943
|
|||
2019
|
6,943
|
|||
2020
|
7,359
|
|||
2021
|
7,359
|
|||
Thereafter
|
83,846
|
|||
Total minimum payments
|
$
|
119,000
|
|
arrange for assumption, continuation, or substitution of a stock award by a surviving or acquiring entity (or its parent company);
|
|
arrange for the assignment of any reacquisition or repurchase rights applicable to any shares of our common stock issued pursuant to a stock award to the surviving or acquiring corporation (or its parent company);
|
|
accelerate the vesting and exercisability of a stock award followed by the termination of the stock award;
|
|
arrange for the lapse of any reacquisition or repurchase rights applicable to any shares of our common stock issued pursuant to a stock award;
|
|
cancel or arrange for the cancellation of a stock award, to the extent not vested or not exercised prior to the effective date of the corporate transaction, in exchange for cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; and
|
|
arrange for the surrender of a stock award in exchange for a payment equal to the excess of (a) the value of the property the holder of the stock award would have received upon the exercise of the stock award, over (b) any exercise price payable by such holder in connection with such exercise.
|
Number of
Shares
|
Weighted
Average Exercise
Price
Per Share
|
Average
Remaining
Contractual Term
(Years)
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Outstanding at December 31, 2015
|
8,041
|
$
|
33.21
|
|||||||||||||
Granted
|
2,428
|
$
|
54.79
|
|||||||||||||
Exercised
|
(994
|
)
|
$
|
12.63
|
||||||||||||
Cancelled/forfeited/expired
|
(297
|
)
|
$
|
53.65
|
||||||||||||
Outstanding at December 31, 2016
|
9,178
|
$
|
40.48
|
4.46
|
$
|
122,738
|
||||||||||
Exercisable at December 31, 2016
|
4,898
|
$
|
28.73
|
3.40
|
$
|
107,969
|
Number of
Shares
|
Weighted
Average
Grant Date
Fair Value
Per Share
|
|||||||
Non-vested at December 31, 2015
|
751
|
$
|
47.47
|
|||||
Granted
|
346
|
$
|
41.79
|
|||||
Vested
|
(270
|
)
|
$
|
39.22
|
||||
Cancelled/forfeited
|
(49
|
)
|
$
|
49.38
|
||||
Non-vested at December 31, 2016
|
778
|
$
|
47.68
|
Year Ended
December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Research, development and patents
|
$
|
55,099
|
$
|
43,638
|
$
|
25,843
|
||||||
General and administrative
|
17,009
|
15,676
|
5,540
|
|||||||||
Total
|
$
|
72,108
|
$
|
59,314
|
$
|
31,383
|
December 31,
|
|||||
2016
|
2015
|
2014
|
|||
Risk-free interest rate
|
1.5 %
|
1.5 %
|
1.7 %
|
||
Dividend yield
|
0.0 %
|
0.0 %
|
0.0 %
|
||
Volatility
|
58.7 %
|
53.8 %
|
50.1 %
|
||
Expected life
|
4.5 years
|
4.5 years
|
4.7 years
|
December 31,
|
|||||
2016
|
2015
|
2014
|
|||
Risk-free interest rate
|
1.3 %
|
2.1 %
|
2.2 %
|
||
Dividend yield
|
0.0 %
|
0.0 %
|
0.0 %
|
||
Volatility
|
53.1 %
|
52.2 %
|
54.2 %
|
||
Expected life
|
6.5 years
|
6.9 years
|
6.9 years
|
December 31,
|
|||||
2016
|
2015
|
2014
|
|||
Risk-free interest rate
|
0.4 %
|
0.1 %
|
0.1 %
|
||
Dividend yield
|
0.0 %
|
0.0 %
|
0.0 %
|
||
Volatility
|
86.4 %
|
51.7 %
|
60.1 %
|
||
Expected life
|
6 months
|
6 months
|
6 months
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Current:
|
||||||||||||
Federal
|
$
|
1,067
|
$
|
379
|
$
|
263
|
||||||
State
|
1,867
|
(7
|
)
|
(4,295
|
)
|
|||||||
Total current
|
2,934
|
372
|
(4,032
|
)
|
||||||||
Deferred:
|
||||||||||||
Federal
|
—
|
—
|
(8,948
|
)
|
||||||||
State
|
—
|
—
|
(2,427
|
)
|
||||||||
Total deferred
|
—
|
—
|
(11,375
|
)
|
||||||||
Income tax expense (benefit)
|
$
|
2,934
|
$
|
372
|
$
|
(15,407
|
)
|
Year Ended December 31,
|
||||||||||||||||||||||||
2016
|
2015
|
2014
|
||||||||||||||||||||||
Pre-tax loss
|
$
|
(83,622
|
)
|
$
|
(87,906
|
)
|
$
|
(54,391
|
)
|
|||||||||||||||
Statutory rate
|
(29,268
|
)
|
35.0
|
%
|
(30,767
|
)
|
35.0
|
%
|
(19,035
|
)
|
35.0
|
%
|
||||||||||||
State income tax net of federal benefit
|
(276
|
)
|
0.3
|
%
|
1
|
0.0
|
%
|
(3,125
|
)
|
5.7
|
%
|
|||||||||||||
Net change in valuation allowance
|
55,927
|
(66.9
|
)%
|
69,499
|
(79.1
|
)%
|
29,547
|
(54.3
|
)%
|
|||||||||||||||
Loss on debt extinguishment
|
—
|
0.0
|
%
|
—
|
0.0
|
%
|
2,406
|
(4.4
|
)%
|
|||||||||||||||
Tax credits
|
(26,954
|
)
|
32.2
|
%
|
(41,284
|
)
|
47.0
|
%
|
(23,628
|
)
|
43.4
|
%
|
||||||||||||
California franchise tax refund
|
—
|
0.0
|
%
|
—
|
0.0
|
%
|
(2,795
|
)
|
5.1
|
%
|
||||||||||||||
Deferred tax true-up
|
2,591
|
(3.1
|
)%
|
1,496
|
(1.7
|
)%
|
977
|
(1.8
|
)%
|
|||||||||||||||
Other
|
914
|
(1.1
|
)%
|
1,427
|
(1.6
|
)%
|
246
|
(0.5
|
)%
|
|||||||||||||||
Effective rate
|
$
|
2,934
|
(3.5
|
)%
|
$
|
372
|
(0.4
|
)%
|
$
|
(15,407
|
)
|
28.2
|
%
|
Year Ended December 31,
|
||||||||
2016
|
2015
|
|||||||
Deferred Tax Assets:
|
||||||||
Net operating loss carryovers
|
$
|
194,372
|
$
|
218,493
|
||||
R&D credits
|
193,845
|
153,601
|
||||||
Deferred revenue
|
54,203
|
45,110
|
||||||
Stock-based compensation
|
48,209
|
31,093
|
||||||
Other
|
26,228
|
19,655
|
||||||
Total deferred tax assets
|
$
|
516,857
|
$
|
467,952
|
||||
Deferred Tax Liabilities:
|
||||||||
Convertible debt
|
$
|
(62,669
|
)
|
$
|
(55,928
|
)
|
||
Unrealized gain in other comprehensive income
|
-
|
(5,288
|
)
|
|||||
Intangible and capital assets
|
(2,030
|
)
|
(2,643
|
)
|
||||
Net deferred tax asset
|
$
|
452,158
|
$
|
404,093
|
||||
Valuation allowance
|
(452,158
|
)
|
(404,093
|
)
|
||||
Net deferreds
|
$
|
—
|
$
|
—
|
Year Ended December 31,
|
||||||||||||
2016
|
2015
|
2014
|
||||||||||
Beginning balance of unrecognized tax benefits
|
$
|
51,257
|
$
|
27,365
|
$
|
23,964
|
||||||
Settlement of prior period tax positions
|
(4,033
|
)
|
—
|
—
|
||||||||
Decrease for prior period tax positions
|
—
|
—
|
(1,653
|
)
|
||||||||
Increase for prior period tax positions
|
7,928
|
215
|
—
|
|||||||||
Increase for current period tax positions
|
11,847
|
23,677
|
5,054
|
|||||||||
Ending balance of unrecognized tax benefits
|
$
|
66,999
|
$
|
51,257
|
$
|
27,365
|
● |
AstraZeneca may terminate the agreement or any program at any time by providing written notice to us;
|
● |
AstraZeneca may terminate the agreement or any program by providing written notice if we undergo a change of control with a third party; and
|
● |
Either we or AstraZeneca may terminate the agreement or any program by providing written notice to the other party upon the other party's uncured failure to perform a material obligation under the agreement, or the entire agreement if the other party becomes insolvent.
|
● |
Biogen may terminate the agreement or any program at any time by providing written notice to us;
|
● |
Under specific circumstances, if we are acquired by a third party with a product that directly competes with a compound being developed under the agreement, Biogen may terminate the affected program by providing written notice to us;
|
● |
If, within a specified period of time, any required clearance of a transaction contemplated by an agreement under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, is not received, then either we or Biogen may terminate the affected program by providing written notice to the other party; and
|
● |
Either we or Biogen may terminate any program by providing written notice to the other party upon the other party's uncured failure to perform a material obligation under the agreement with respect to the affected program, or the entire agreement if the other party becomes insolvent.
|
● |
Bayer may terminate the agreement or any program at any time by providing written notice to us;
|
● |
Either we or Bayer may terminate the agreement or any program by providing written notice to the other party upon the other party’s uncured failure to perform a material obligation under the agreement, or the entire agreement if the other party becomes insolvent.
|
● |
GSK may terminate any program, other than the IONIS-TTR
Rx
program, at any time by providing written notice to us;
|
● |
GSK may terminate the IONIS-TTR
Rx
program by providing written notice to us after reviewing specific data from the Phase 3 study for the program; and
|
● |
Either we or GSK may terminate any program by providing written notice to the other party upon the other party's uncured failure to perform a material obligation under the agreement with respect to the affected program, or the entire agreement if the other party becomes insolvent.
|
● |
Janssen may terminate the agreement or any program at any time by providing written notice to us; and
|
● |
Either we or Janssen may terminate any program by providing written notice to the other party upon the other party’s uncured failure to perform a material obligation under the agreement, or the entire agreement if the other party becomes insolvent.
|
● |
Novartis may terminate the agreement as a whole or with respect to any drug at any time by providing written notice to us;
|
● |
Either we or Novartis may terminate the agreement with respect to any drug by providing written notice to the other party in good faith that we or Novartis has determined that the continued development or commercialization of the drug presents safety concerns that pose an unacceptable risk or threat of harm in humans or would violate any applicable law, ethical principles, or principles of scientific integrity;
|
● |
Either we or Novartis may terminate the agreement for a drug by providing written notice to the other party upon the other party’s uncured failure to perform a material obligation related to the drug under the agreement, or the entire agreement if the other party becomes insolvent; and
|
● |
We may terminate the agreement if Novartis disputes or assists a third party to dispute the validity of any or our patents.
|
● |
Roche may terminate the agreement at any time by providing written notice to us; and
|
● |
Either we or Roche may terminate the agreement by providing written notice to the other party upon the other party's uncured failure to perform a material obligation under the agreement or if the other party becomes insolvent.
|
2016
|
Ionis Core
|
Akcea Therapeutics
|
Elimination of Intercompany Activity
|
Total
|
||||||||||||
Revenue:
|
||||||||||||||||
Research and development
|
$
|
338,546
|
$
|
—
|
$
|
(12,648
|
)
|
$
|
325,898
|
|||||||
Licensing and royalty
|
20,722
|
—
|
—
|
20,722
|
||||||||||||
Total segment revenue
|
$
|
359,268
|
$
|
—
|
$
|
(12,648
|
)
|
$
|
346,620
|
|||||||
Income (loss) from operations
|
$
|
37,196
|
$
|
(83,512
|
)
|
$
|
—
|
$
|
(46,316
|
)
|
2015
|
Ionis Core
|
Akcea Therapeutics
|
Elimination of Intercompany Activity
|
Total
|
||||||||||||
Revenue:
|
||||||||||||||||
Research and development
|
$
|
284,135
|
$
|
—
|
$
|
(2,775
|
)
|
$
|
281,360
|
|||||||
Licensing and royalty
|
2,343
|
—
|
—
|
2,343
|
||||||||||||
Total segment revenue
|
$
|
286,478
|
$
|
—
|
$
|
(2,775
|
)
|
$
|
283,703
|
|||||||
Loss from operations
|
$
|
(23,014
|
)
|
$
|
(52,748
|
)
|
$
|
—
|
$
|
(75,762
|
)
|
2014
|
Ionis Core
|
Akcea Therapeutics
|
Total
|
|||||||||
Revenue:
|
||||||||||||
Research and development
|
$
|
202,514
|
$
|
—
|
$
|
202,514
|
||||||
Licensing and royalty
|
11,647
|
—
|
11,647
|
|||||||||
Total segment revenue
|
$
|
214,161
|
$
|
—
|
$
|
214,161
|
||||||
Loss from operations
|
$
|
(26,033
|
)
|
$
|
(21,697
|
)
|
$
|
(47,730
|
)
|
Total Assets
|
Ionis Core
|
Akcea Therapeutics
|
Elimination of
Intercompany Activity
|
Total
|
||||||||||||
December 31, 2016
|
$
|
1,067,770
|
$
|
10,684
|
$
|
(165,987
|
)
|
$
|
912,467
|
|||||||
December 31, 2015
|
$
|
994,191
|
$
|
66,068
|
$
|
(112,359
|
)
|
$
|
947,900
|
2016
|
2015
|
2014
|
||||||
Partner A
|
60 %
|
37 %
|
58 %
|
|||||
Partner B
|
19 %
|
2 %
|
13 %
|
|||||
Partner C
|
4 %
|
12 %
|
17 %
|
|||||
Partner D
|
2 %
|
33 %
|
0 %
|
|||||
Partner E
|
2 %
|
11 %
|
4 %
|
2016 Quarters
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
||||||||||||
Revenue
|
$
|
36,874
|
$
|
38,470
|
$
|
110,927
|
$
|
160,349
|
||||||||
Operating expenses
|
$
|
91,526
|
$
|
87,397
|
$
|
94,819
|
$
|
119,194
|
||||||||
Income (loss) from operations
|
$
|
(54,652
|
)
|
$
|
(48,927
|
)
|
$
|
16,108
|
$
|
41,155
|
||||||
Net income (loss)
|
$
|
(62,917
|
)
|
$
|
(56,855
|
)
|
$
|
7,351
|
$
|
25,865
|
||||||
Basic net income (loss) per share (1)
|
$
|
(0.52
|
)
|
$
|
(0.47
|
)
|
$
|
0.06
|
$
|
0.21
|
||||||
Diluted net income (loss) per share (1) (2) (3)
|
$
|
(0.52
|
)
|
$
|
(0.47
|
)
|
$
|
0.06
|
$
|
0.21
|
2015 Quarters
|
First
Quarter
|
Second
Quarter
|
Third
Quarter
|
Fourth
Quarter
|
||||||||||||
Revenue
|
$
|
62,583
|
$
|
120,428
|
$
|
49,121
|
$
|
51,571
|
||||||||
Operating expenses
|
$
|
71,913
|
$
|
75,782
|
$
|
97,259
|
$
|
114,511
|
||||||||
Income (loss) from operations
|
$
|
(9,330
|
)
|
$
|
44,646
|
$
|
(48,138
|
)
|
$
|
(62,940
|
)
|
|||||
Net income (loss)
|
$
|
(16,717
|
)
|
$
|
35,648
|
$
|
(35,776
|
)
|
$
|
(71,433
|
)
|
|||||
Basic net income (loss) per share (1)
|
$
|
(0.14
|
)
|
$
|
0.30
|
$
|
(0.30
|
)
|
$
|
(0.59
|
)
|
|||||
Diluted net income (loss) per share (1) (4)
|
$
|
(0.14
|
)
|
$
|
0.29
|
$
|
(0.30
|
)
|
$
|
(0.59
|
)
|
(1)
|
We computed net income (loss) per share independently for each of the quarters presented. Therefore, the sum of the quarterly net income (loss) per share will not necessarily equal the total for the year.
|
(2)
|
For the three months ended December 31, 2016, we had net income. As a result, we computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during the period. Diluted common equivalent shares for the three months ended December 31, 2016 consisted of the following (in thousands):
|
Three Months Ended December 31, 2016
|
Income
(Numerator)
|
Shares
(Denominator)
|
Per-Share Amount
|
|||||||||
|
||||||||||||
Income available to common shareholders
|
$
|
25,865
|
121,340
|
$
|
0.21
|
|||||||
Effect of diluted securities:
|
||||||||||||
Shares issuable upon exercise of stock options
|
—
|
2,189
|
||||||||||
Shares issuable upon restricted stock award issuance
|
—
|
403
|
||||||||||
Shares issuable related to our ESPP
|
—
|
21
|
||||||||||
Income available to common shareholders, plus assumed conversions
|
$
|
25,865
|
123,953
|
$
|
0.21
|
(3)
|
For the three months ended September 30, 2016, we had net income. As a result, we computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during the period. Diluted common equivalent shares for the three months ended September 30, 2016 consisted of the following (in thousands):
|
Three Months Ended September 30, 2016
|
Income
(Numerator)
|
Shares
(Denominator)
|
Per-Share Amount
|
|||||||||
|
||||||||||||
Income available to common shareholders
|
$
|
7,351
|
120,989
|
$
|
0.06
|
|||||||
Effect of diluted securities:
|
||||||||||||
Shares issuable upon exercise of stock options
|
—
|
2,129
|
||||||||||
Shares issuable upon restricted stock award issuance
|
—
|
202
|
||||||||||
Shares issuable related to our ESPP
|
—
|
58
|
||||||||||
Income available to common shareholders, plus assumed conversions
|
$
|
7,351
|
123,378
|
$
|
0.06
|
(4)
|
For the three months ended June 30, 2015, we had net income. As a result, we computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during the period. Diluted common equivalent shares for the three months ended June 30, 2015 consisted of the following (in thousands):
|
Three Months Ended June 30, 2015
|
Income
(Numerator)
|
Shares
(Denominator)
|
Per-Share Amount
|
|||||||||
|
||||||||||||
Income available to common shareholders
|
$
|
35,648
|
119,742
|
$
|
0.30
|
|||||||
Effect of diluted securities:
|
||||||||||||
Shares issuable upon exercise of stock options
|
—
|
3,974
|
||||||||||
Shares issuable upon restricted stock award issuance
|
—
|
376
|
||||||||||
Shares issuable related to our ESPP
|
—
|
4
|
||||||||||
Shares issuable related to our 2¾ percent notes
|
1,047
|
3,683
|
||||||||||
Income available to common shareholders, plus assumed conversions
|
$
|
36,695
|
127,779
|
$
|
0.29
|
Ionis Pharmaceuticals, Inc.
2855 Gazelle Court
Carlsbad, CA 92010
Attention: Chief Operating Officer
|
Ionis Pharmaceuticals, Inc.
2855 Gazelle Court
Carlsbad, CA 92010
Attention: General Counsel
|
Re: |
First Amendment To Research Collaboration, Option and License Agreement of December 22, 2014
|
a) |
In the case where JBI selected IONIS-[***]
Rx
as the JBI [***] Development Candidate and, as of the date the JRC receives such election notice, Ionis has [***], then JBI’s rights under this
Section 4.1.6
shall be limited to a right to negotiate with Ionis in good faith regarding both (i) [***] and (ii) [***]; or
|
b) |
In the case where (x) JBI selected IONIS-[***]
Rx
as the JBI [***] Development Candidate but, as of the date the JRC receives such election notice, Ionis
has not
[***], or (y) JBI did not select IONIS-[***]
Rx
as the JBI [***] Development Candidate, the Parties shall negotiate in good faith both (i) [***] and (ii) [***].
|
i) | [***] | $[***]; and |
ii) | [***] | $[***] |
Very truly yours,
|
||
/s/ Austin Clayton
|
||
Austin Clayton
|
||
Corporate Secretary
|
||
Janssen Biotech, Inc.
|
AGREED & ACCEPTED:
|
||
/s/ B. Lynne Parshall
|
||
Name:
|
B. Lynne Parshall
|
|
Title:
|
Chief Operating Officer
|
|
Date:
|
December 21, 2016
|
|
Ionis Pharmaceuticals, Inc.
|
October 28, 2016
|
Exhibit 10.61
|
1. |
Purpose
. The Parties desire to conduct certain additional research activities under the Neurology II Agreement with the goal of using ASOs to target ALS. The Parties acknowledge and agree that the provisions of the Neurology II Agreement applicable to ALS Targets do not address the additional activities contemplated by the Parties. Therefore, the Parties agree that the Neurology II Agreement is hereby amended as, and to the extent necessary to give effect to the provisions, set forth in this letter agreement.
|
2. |
Designation of ALS Targets
. Notwithstanding anything to the contrary in
Section 1.2.3(a)
of the Neurology II Agreement, Biogen may designate up to [***] ([***]) ALS Targets as High Interest Targets in each consecutive [***] period, or portion thereof, starting on the date of this letter agreement and ending on [***];
provided
, Biogen will only designate the number of such High Interest Targets as Biogen reasonably anticipates to have the resources to conduct the work for such targets as contemplated by this letter agreement over the applicable [***] period, or portion thereof. The Parties agree that, notwithstanding the provisions of clause (a)(i)(B) of
Section 1.2.1
of the Neurology II Agreement, the Research Term with respect to ALS Targets shall be extended until [***], but no later than [***] unless otherwise agreed by the Parties.
|
3. |
Target Validation for ALS Targets
. Notwithstanding anything to the contrary in
Section 1.2.3(c)
of the Neurology II Agreement and in addition to the activities contemplated by
Section 1.2.3(c)
of the Neurology II Agreement, Ionis shall provide [***] to Biogen in amounts sufficient for Biogen to conduct [***] as set forth in the Neurological Disease Research Plan with respect to each ALS Target designated as a High Interest Target pursuant to paragraph 2 of this letter agreement, and Biogen shall [***], to conduct the research using such [***] as set forth in the Neurological Disease Research Plan for each such ALS Target. If, with respect to any ALS Target, Biogen notifies Ionis that it has elected to convert such ALS Target to a Neurology Target that is not an ALS Target under paragraph 5 of this letter agreement, then Biogen shall promptly following such notification return all [***] with respect to such ALS Target to Ionis. If Biogen has not commenced [***] in at least [***] of the [***] as set forth in the Neurological Disease Research Plan for a particular ALS Target by the [***] year anniversary of the date Ionis provided Biogen the [***] for such ALS Target under this Section 3, then such ALS Target will no longer be a High Interest Target and Biogen will return to Ionis all [***] for such ALS Target.
|
4. |
License Grant to Biogen
. In accordance with
Section 4.4.1
of the Neurology II Agreement, subject to the terms and conditions of the Neurology II Agreement (including Biogen’s exclusivity covenants under
Section 2.1.1
thereof), Ionis hereby grants to Biogen a non-exclusive, royalty-free license under any Licensed Technology solely to the extent necessary to conduct the activities as set forth in the Neurological Disease Research Plan with respect to each ALS Target. Biogen will pay to Ionis any and all costs arising under any Third Party agreement directly resulting from the license under this paragraph 4.
|
5. |
Designation of Collaboration Targets
. With respect to each ALS Target designated as a High Interest Target under paragraph 2 of this letter agreement, Biogen may at any time during the Research Term, by written notice to Ionis, either (i) designate such ALS Target as a Collaboration Target pursuant to
Section 1.5
of the Neurology II Agreement or (ii) elect to convert such ALS Target to a Neurology Target that is not an ALS Target under the Neurology II Agreement, as further set forth in paragraph 6 below. Notwithstanding the final sentence of
Section 1.5
of the Neurology II Agreement, there shall be no limit on the number of ALS Targets that Biogen may designate as Collaboration Targets pursuant to
Section 1.5
of the Neurology II Agreement,
provided that
, if Biogen has designated more than [***] ALS Targets as Collaboration Targets pursuant to
Section 1.5
of the Neurology II Agreement in any rolling [***] period, such excess targets will be treated the same as “
Deferred Targets
” under the Neurology II Agreement until the earlier of (a) [***] or (b) [***] and, notwithstanding the provisions of [***] of the Neurology II Agreement, Biogen will [***] of the Neurology II Agreement with respect to such target until such time. [***] will be [***] under [***] of the Neurology II Agreement with respect to any Collaboration Target that is treated the same as a Deferred Target pursuant to this paragraph 5. Ionis shall conduct discovery, research and optimization activities for each Collaboration Target designated under this paragraph 5 in accordance with the Neurology II Agreement.
|
6. |
Effect of Decision not to Designate ALS Target as Collaboration Target
. If Biogen elects to convert an ALS Target to a Neurology Target that is not an ALS Target pursuant to clause (ii) of the first sentence of paragraph 5 above, then (a) such Neurology Target shall be deemed removed from the High Interest Target List and (b) the provisions of the Neurology II Agreement applicable to Neurology Targets shall apply. Accordingly, Biogen may thereafter add such Neurology Target to the High Interest Target List in accordance with
Section 1.2.3(a)
of the Neurology II Agreement and, in such event, the provisions of the Neurology II Agreement applicable to High Interest Targets that are not ALS Targets shall apply. If Biogen does not add such Neurology Target to the High Interest Target List, Ionis may, with prior written notice to Biogen, advance such Neurology Target for ALS or for another indication in accordance with the Neurology II Agreement,
provided that
the provisions of the Neurology II Agreement applicable to Isis Neurology Targets, including without limitation
Section 1.4
and
Section 2.1.1(b)
, shall apply to such Neurology Target. Notwithstanding the foregoing, if Ionis presents to Biogen Target Sanction Data Packages with respect to more than [***] Isis Neurology Targets that were formerly ALS Targets under this letter agreement within any rolling [***] period, and Biogen wishes to designate more than [***] of such Isis Neurology Targets as Collaboration Targets pursuant to
Section 1.4
of the Neurology II Agreement, then such excess targets will be treated the same as “
Deferred Targets
” under the Neurology II Agreement until the earlier of (a) [***] or (b) [***] and, notwithstanding the provisions of [***] of the Neurology II Agreement, Biogen will [***] of the Neurology II Agreement with respect to such target until such time. [***] will be [***] under [***] of the Neurology II Agreement with respect to any Collaboration Target that is treated the same as a Deferred Target pursuant to this paragraph 6.
|
7. |
Ionis FTEs
. In addition to the [***] ([***]) Ionis FTEs dedicated to the activities under the Core Research Plan, the Neurological Disease Research Plan and the target validation activities under
Section 1.11
of the Neurology II Agreement, Ionis shall dedicate an additional [***] ([***]) FTEs to conduct the activities contemplated by this letter agreement, the funding for which FTEs shall be in accordance with paragraph 8 below.
|
8. |
Funding of Ionis Activities for ALS Targets
. During the period starting on the date of this letter agreement and ending on the termination of the Research Term, for each consecutive [***] ([***])-[***] period (or portion thereof) in which Biogen designates ALS Targets as High Interest Targets pursuant to paragraph 2 of this letter agreement, Biogen will pay Ionis [***] amount of [***] U.S. Dollars ($[***]) in consideration of the activities to be conducted by Ionis for such ALS Targets as set forth in this letter agreement. Ionis will invoice Biogen directly for such amount promptly after Biogen designates the first (1
st
) such ALS Target as a High Interest Target pursuant to paragraph 2 of this letter agreement for each such consecutive [***] ([***])-[***] period (or portion thereof), and Biogen shall pay each such invoice within forty-five (45) days of receipt thereof.
|
9. |
Adjustments to ALS Pre-Licensing Milestone Event Payments for ALS Collaboration Programs under this Letter Agreement
. Solely with respect to ALS Collaboration Programs arising from High Interest Targets designated pursuant to this letter agreement, the ALS Pre-Licensing Milestone Event payments as set forth in
Table 2
of
Section 6.5
of the Neurology II Agreement shall be amended and replaced with the following in
Table X
:
|
Sincerely,
|
||
Biogen MA Inc.
|
||
By:
/s/ Chris Henderson
|
||
Name: Chris Henderson
|
||
Title: VP, Neurodegeneration & Repair
|
AGREED AND CONFIRMED ON BEHALF OF IONIS PHARMACEUTICALS, INC.:
|
||
By:
|
/s/ B. Lynne Parshall
|
|
Name:
|
B. Lynne Parshall
|
|
Title:
|
Chief Operating Officer
|
|
Date:
|
Cc:
|
Ionis Pharmaceuticals, Inc.
|
· |
Know and comply with the Ionis Code of Ethics and Company policies that apply to business activities.
|
· |
Be honest, fair and trustworthy in all business activities and relationships.
|
· |
Provide and support a culture that values integrity and ethical conduct.
|
· |
Avoid all conflicts of interest between work and personal affairs.
|
· |
Report suspected violations of law, the Ionis Code of Ethics or Company Policies.
|
· |
Cooperate in any investigation into possible violations of law, the Ionis Code of Ethics or Company Policies.
|
· |
All books, records and accounts must be kept in reasonable detail and must accurately and fairly reflect all transactions and dispositions of the Company’s assets.
|
· |
All disbursements of funds and all receipts must be properly and promptly recorded.
|
· |
No undisclosed or unrecorded fund or account may be established for any purposes.
|
· |
False or artificial entries must never be made in any of the books or records of the Company, or in any public record for any reason, nor should the Company’s records be falsely altered in any way.
|
· |
Working in the food service or hospitality industry after normal business hours;
|
· |
Owning rental property (unless Ionis rents the property);
|
· |
Philanthropic or pro bono activities;
|
· |
Farming;
|
· |
Home-based retail (e.g. Amway, Tupperware, cosmetics), provided you do not solicit sales during Ionis business hours or at the Ionis workplace; and
|
· |
Fitness instructor.
|
· |
Engage in fraud or embezzlement affecting Company property, funds, securities or other assets; or
|
· |
Willfully damage or destroy property or materials belonging to the Company, its employees or customers.
|
· |
Remove property, material or money from the Company, its employees, or its customers for personal gain, personal use, resale or to give to another party;
|
· |
Receive property, materials or money belonging to the Company, its employees or its customers for personal gain, personal use, resale or to give to another party;
|
· |
Access, remove, publish, destroy or alter private or confidential information existing in physical Company records or electronically stored information;
|
· |
Remove, publish, destroy or alter other physical Company records or electronically stored information affecting the Company, its employees or corporate partners; or
|
· |
Copy, reprint, duplicate, or recreate in whole or in part, computer programs or related systems developed or modified by Ionis personnel, or acquired from outside vendors.
|
1. |
The employee should immediately communicate his/her concern to the General Counsel, the COO or the CEO. To ensure the highest quality response, employees should communicate directly with one of these designated Ionis officials. However, any concern may be made anonymously and will be taken seriously.
|
2. |
Any officer receiving such a complaint will immediately communicate the complaint to the Audit Committee or you may directly report a suspected violation to the Chairman of the Audit Committee.
|
3. |
The Audit Committee together with management will conduct, if appropriate, a confidential, but not anonymous investigation which will involve talking to the complainant (if known), the accused, and as circumstances warrant, any witnesses, and anyone who may have similar complaints.
|
4. |
All parties involved in the investigation will be required to cooperate fully, maintain complete confidentiality and take no action which might be considered retaliatory.
|
5. |
Once the investigation is complete, the Audit Committee will make a determination as to what happened, the level of severity and the appropriate remedial action, and will take such action.
|
1. |
Authorizing, paying, promising or delivering any payment, gift or favor intended to influence any foreign official on a matter within that person’s responsibilities. For example, any payment to any foreign official for the purposes of obtaining or retaining sales of products or services to Ionis, sales by Ionis of Ionis products or services, to win a bid or contract, or to obtain more favorable tax treatment is prohibited.
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Any indirect payment to a third party if the payor knows that the third party may make a prohibited payment. For example, any payment to an Ionis agent or consultant where the payor is aware or has a firm belief that such agent or consultant may make an improper payment to a foreign official is prohibited. The Ionis payor may not avoid this prohibition by deliberately ignoring or purposefully avoiding knowledge that a bribe may be paid.
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Establishing any undisclosed or unrecorded “slush” funds or assets; making any false or artificial entries in company books or records; failing to keep books, records and accounts in reasonable detail to reflect accurately the handling of money and other assets; and failing to maintain internal accounting controls sufficient to verify that no improper payments have been made.
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Payments to a foreign official for the purpose of expediting or securing the performance of a routine governmental action. Payments for the following routine governmental actions are permissible: obtaining permits, licenses or other official documents to qualify to do business in a foreign country; processing governmental papers, such as visas and work orders; assuring police protection, mail pickup and delivery, or scheduling inspections associated with contract performance or inspections related to the transit of goods across country; and providing phone service, power and water supply, loading and unloading cargo or protecting perishable products or commodities from deterioration. Routine governmental action does not include any decision by a foreign official to encourage, to award, to continue or to modify the terms relating to any business with any Ionis entity.
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2. |
Any payment that is lawful under the written laws and regulations of the foreign country.
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3. |
Any reasonable expenditure directly related to the promotion, demonstration or explanation of Ionis products or services or the execution or performance of a contract with a foreign government or agency, such as the travel and lodging expenses of a foreign official on a trip for such purposes.
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/s/ ERNST & YOUNG LLP
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San Diego, California
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March 1, 2017
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1.
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I have reviewed this Annual Report on Form 10-K of Ionis Pharmaceuticals, Inc.;
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2.
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Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
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3.
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Based on my knowledge, the consolidated financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, consolidated results of operations and consolidated cash flows of the registrant as of, and for, the periods presented in this annual report;
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4.
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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)
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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)
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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)
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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)
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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.
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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)
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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)
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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: March 1, 2017
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/s/ STANLEY T. CROOKE
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Stanley T. Crooke, M.D., Ph.D.
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Chief Executive Officer
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1.
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I have reviewed this Annual Report on Form 10-K of Ionis Pharmaceuticals, Inc.;
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2.
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Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
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3.
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Based on my knowledge, the consolidated financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, consolidated results of operations and consolidated cash flows of the registrant as of, and for, the periods presented in this annual report;
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4.
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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)
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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)
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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)
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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)
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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.
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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)
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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)
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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: March 1, 2017
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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.
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The Company’s Annual Report on Form 10-K for the year ended December 31, 2016, to which this Certification is attached as Exhibit 32.1 (the “Annual Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
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2.
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The information contained in the Annual Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Annual Report and the results of operations of the Company for the period covered by the Annual Report.
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Dated: March 1, 2017
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/s/ STANLEY T. CROOKE
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/s/ ELIZABETH L. HOUGEN
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Stanley T. Crooke, M.D., Ph.D.
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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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