☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
33-0336973
|
|
(State or other jurisdiction of incorporation or organization)
|
(IRS Employer Identification No.)
|
2855 Gazelle Court, Carlsbad, California
|
92010
|
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
Title of each class
|
Name of each exchange on which registered
|
Trading symbol
|
||
Common Stock, $.001 Par Value
|
The Nasdaq Stock Market LLC
|
“IONS”
|
Large Accelerated Filer ☒
|
Accelerated Filer ☐
|
Non-accelerated Filer ☐
|
Smaller Reporting Company ☐
|
Emerging Growth Company ☐
|
PART I
|
FINANCIAL INFORMATION
|
|
ITEM 1:
|
Financial Statements:
|
|
Condensed Consolidated Balance Sheets as of March 31, 2020 (unaudited) and December 31, 2019
|
3
|
|
Condensed Consolidated Statements of Operations for the three months ended March 31, 2020 and 2019 (unaudited)
|
4
|
|
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2020 and 2019 (unaudited)
|
5
|
|
Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2020 and 2019 (unaudited)
|
6
|
|
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019 (unaudited)
|
7
|
|
Notes to Condensed Consolidated Financial Statements (unaudited)
|
8
|
|
ITEM 2:
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations:
|
|
Overview
|
25
|
|
Results of Operations
|
28
|
|
Liquidity and Capital Resources
|
34
|
|
ITEM 3:
|
Quantitative and Qualitative Disclosures about Market Risk
|
36
|
ITEM 4:
|
Controls and Procedures
|
36
|
PART II
|
OTHER INFORMATION
|
37
|
ITEM 1:
|
Legal Proceedings
|
37
|
ITEM 1A:
|
Risk Factors
|
37
|
ITEM 2:
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
51
|
ITEM 3:
|
Default upon Senior Securities
|
51
|
ITEM 4:
|
Mine Safety Disclosures
|
51
|
ITEM 5:
|
Other Information
|
51
|
ITEM 6:
|
Exhibits
|
51
|
SIGNATURES
|
53
|
March 31,
2020
|
December 31,
2019
|
|||||||
(Unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
486,195
|
$
|
683,287
|
||||
Short-term investments
|
1,897,892
|
1,816,257
|
||||||
Contracts receivable
|
28,605
|
63,034
|
||||||
Inventories
|
22,885
|
18,180
|
||||||
Other current assets
|
122,468
|
139,839
|
||||||
Total current assets
|
2,558,045
|
2,720,597
|
||||||
Property, plant and equipment, net
|
163,952
|
153,651
|
||||||
Patents, net
|
26,750
|
25,674
|
||||||
Long-term deferred tax assets
|
309,614
|
305,557
|
||||||
Deposits and other assets
|
32,552
|
27,633
|
||||||
Total assets
|
$
|
3,090,913
|
$
|
3,233,112
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
21,174
|
$
|
16,067
|
||||
Accrued compensation
|
16,437
|
37,357
|
||||||
Accrued liabilities
|
62,507
|
66,769
|
||||||
Income taxes payable
|
32,946
|
32,514
|
||||||
Current portion of long-term obligations and other current liabilities
|
4,150
|
2,026
|
||||||
Current portion of deferred contract revenue
|
120,811
|
118,272
|
||||||
Total current liabilities
|
258,025
|
273,005
|
||||||
Long-term deferred contract revenue
|
467,842
|
490,060
|
||||||
0.125 percent convertible senior notes
|
439,996
|
434,711
|
||||||
1 percent convertible senior notes
|
279,666
|
275,333
|
||||||
Long-term obligations, less current portion
|
15,043
|
15,543
|
||||||
Long-term mortgage debt
|
59,930
|
59,913
|
||||||
Total liabilities
|
1,520,502
|
1,548,565
|
||||||
Stockholders’ equity:
|
||||||||
Common stock, $0.001 par value; 300,000,000 shares authorized, 139,282,168 and 140,339,615 shares issued and outstanding at March 31, 2020 (unaudited) and December 31, 2019, respectively
|
139
|
140
|
||||||
Additional paid-in capital
|
2,233,644
|
2,203,778
|
||||||
Accumulated other comprehensive loss
|
(27,235
|
)
|
(25,290
|
)
|
||||
Accumulated deficit
|
(846,309
|
)
|
(707,534
|
)
|
||||
Total Ionis stockholders’ equity
|
1,360,239
|
1,471,094
|
||||||
Noncontrolling interest in Akcea Therapeutics, Inc.
|
210,172
|
213,453
|
||||||
Total stockholders’ equity
|
1,570,411
|
1,684,547
|
||||||
Total liabilities and stockholders’ equity
|
$
|
3,090,913
|
$
|
3,233,112
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Revenue:
|
||||||||
Commercial revenue:
|
||||||||
SPINRAZA royalties
|
$
|
66,008
|
$
|
59,711
|
||||
Product sales, net
|
15,159
|
6,754
|
||||||
Licensing and other royalty revenue
|
2,794
|
1,623
|
||||||
Total commercial revenue
|
83,961
|
68,088
|
||||||
Research and development revenue under collaborative agreements
|
49,406
|
229,126
|
||||||
Total revenue
|
133,367
|
297,214
|
||||||
Expenses:
|
||||||||
Cost of products sold
|
2,548
|
1,041
|
||||||
Research, development and patent
|
116,952
|
106,417
|
||||||
Selling, general and administrative
|
74,994
|
68,221
|
||||||
Total operating expenses
|
194,494
|
175,679
|
||||||
Income (loss) from operations
|
(61,127
|
)
|
121,535
|
|||||
Other income (expense):
|
||||||||
Investment income
|
10,479
|
12,142
|
||||||
Interest expense
|
(10,990
|
)
|
(11,599
|
)
|
||||
Other expenses
|
(99
|
)
|
(147
|
)
|
||||
Income (loss) before income tax benefit (expense)
|
(61,737
|
)
|
121,931
|
|||||
Income tax benefit (expense)
|
3,257
|
(31,047
|
)
|
|||||
Net income (loss)
|
(58,480
|
)
|
90,884
|
|||||
Net (income) loss attributable to noncontrolling interest in Akcea Therapeutics, Inc.
|
10,254
|
(6,441
|
)
|
|||||
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(48,226
|
)
|
$
|
84,443
|
|||
Basic net income (loss) per share
|
$
|
(0.35
|
)
|
$
|
0.63
|
|||
Shares used in computing basic net income (loss) per share
|
139,429
|
138,582
|
||||||
Diluted net income (loss) per share
|
$
|
(0.35
|
)
|
$
|
0.62
|
|||
Shares used in computing diluted net income (loss) per share
|
139,429
|
141,537
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Net income (loss)
|
$
|
(58,480
|
)
|
$
|
90,884
|
|||
Unrealized gains (losses) on debt securities, net of tax
|
(1,954
|
)
|
4,324
|
|||||
Currency translation adjustment
|
9
|
84
|
||||||
Comprehensive income (loss)
|
(60,425
|
)
|
95,292
|
|||||
Comprehensive (income) loss attributable to noncontrolling interests
|
(10,254
|
)
|
6,441
|
|||||
Comprehensive income (loss) attributable to Ionis Pharmaceuticals, Inc. stockholders
|
$
|
(50,171
|
)
|
$
|
88,851
|
Common Stock
|
Additional
|
Accumulated Other
|
Accumulated
|
Total Ionis
Stockholders’
|
Noncontrolling
Interest in Akcea
|
Total
Stockholders’
|
||||||||||||||||||||||||||
Description
|
Shares
|
Amount
|
Paid in Capital
|
Comprehensive Loss
|
Deficit
|
Equity
|
Therapeutics, Inc.
|
Equity
|
||||||||||||||||||||||||
Balance at December 31, 2018
|
137,929
|
$
|
138
|
$
|
2,047,250
|
$
|
(32,016
|
)
|
$
|
(967,293
|
)
|
$
|
1,048,079
|
$
|
139,081
|
$
|
1,187,160
|
|||||||||||||||
Net income
|
—
|
—
|
—
|
—
|
84,443
|
84,443
|
—
|
84,443
|
||||||||||||||||||||||||
Change in unrealized gains, net of tax
|
—
|
—
|
—
|
4,324
|
—
|
4,324
|
—
|
4,324
|
||||||||||||||||||||||||
Foreign currency translation
|
—
|
—
|
—
|
84
|
—
|
84
|
—
|
84
|
||||||||||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
1,825
|
2
|
67,057
|
—
|
—
|
67,059
|
—
|
67,059
|
||||||||||||||||||||||||
Stock-based compensation expense
|
—
|
—
|
45,505
|
—
|
—
|
45,505
|
—
|
45,505
|
||||||||||||||||||||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options
|
(130
|
)
|
—
|
(7,597
|
)
|
—
|
—
|
(7,597
|
)
|
—
|
(7,597
|
)
|
||||||||||||||||||||
Noncontrolling interest in Akcea Therapeutics, Inc
|
—
|
—
|
(34,246
|
)
|
—
|
—
|
(34,246
|
)
|
40,688
|
6,442
|
||||||||||||||||||||||
Balance at March 31, 2019
|
139,624
|
$
|
140
|
$
|
2,117,969
|
$
|
(27,608
|
)
|
$
|
(882,850
|
)
|
$
|
1,207,651
|
$
|
179,769
|
$
|
1,387,420
|
|||||||||||||||
Balance at December 31, 2019
|
140,340
|
$
|
140
|
$
|
2,203,778
|
$
|
(25,290
|
)
|
$
|
(707,534
|
)
|
$
|
1,471,094
|
$
|
213,453
|
$
|
1,684,547
|
|||||||||||||||
Net loss
|
—
|
—
|
—
|
—
|
(48,226
|
)
|
(48,226
|
)
|
—
|
(48,226
|
)
|
|||||||||||||||||||||
Change in unrealized gains, net of tax
|
—
|
—
|
—
|
(1,954
|
)
|
—
|
(1,954
|
)
|
—
|
(1,954
|
)
|
|||||||||||||||||||||
Foreign currency translation
|
—
|
—
|
—
|
9
|
—
|
9
|
—
|
9
|
||||||||||||||||||||||||
Issuance of common stock in connection with employee stock plans
|
606
|
—
|
7,652
|
—
|
—
|
7,652
|
—
|
7,652
|
||||||||||||||||||||||||
Repurchases and retirements of common stock
|
(1,478
|
)
|
(1
|
)
|
—
|
—
|
(90,549
|
)
|
(90,550
|
)
|
—
|
(90,550
|
)
|
|||||||||||||||||||
Stock-based compensation expense
|
—
|
—
|
40,790
|
—
|
—
|
40,790
|
—
|
40,790
|
||||||||||||||||||||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options
|
(186
|
)
|
—
|
(11,603
|
)
|
—
|
—
|
(11,603
|
)
|
—
|
(11,603
|
)
|
||||||||||||||||||||
Noncontrolling interest in Akcea Therapeutics, Inc.
|
—
|
—
|
(6,973
|
)
|
—
|
—
|
(6,973
|
)
|
(3,281
|
)
|
(10,254
|
)
|
||||||||||||||||||||
Balance at March 31, 2020
|
139,282
|
$
|
139
|
$
|
2,233,644
|
$
|
(27,235
|
)
|
$
|
(846,309
|
)
|
$
|
1,360,239
|
$
|
210,172
|
$
|
1,570,411
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Operating activities:
|
||||||||
Net income (loss)
|
$
|
(58,480
|
)
|
$
|
90,884
|
|||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
||||||||
Depreciation
|
3,233
|
3,073
|
||||||
Amortization of right-of-use operating lease assets
|
393
|
476
|
||||||
Amortization of patents
|
486
|
470
|
||||||
Amortization of premium (discount) on investments, net
|
1,062
|
(2,433
|
)
|
|||||
Amortization of debt issuance costs
|
595
|
474
|
||||||
Amortization of convertible senior notes discount
|
8,834
|
8,726
|
||||||
Stock-based compensation expense
|
40,790
|
45,505
|
||||||
Non-cash losses related to patents, licensing and property, plant and equipment and investments
|
(87
|
)
|
14
|
|||||
Provision for deferred income taxes
|
(3,437
|
)
|
13,549
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Contracts receivable
|
34,429
|
4,908
|
||||||
Inventories
|
(2,181
|
)
|
(2,475
|
)
|
||||
Other current and long-term assets
|
9,532
|
1,326
|
||||||
Accounts payable
|
411
|
(17,191
|
)
|
|||||
Accrued compensation
|
(20,920
|
)
|
(13,004
|
)
|
||||
Other current liabilities
|
(2,565
|
)
|
13,756
|
|||||
Deferred contract revenue
|
(19,679
|
)
|
(40,353
|
)
|
||||
Net cash provided by (used in) operating activities
|
(7,584
|
)
|
107,705
|
|||||
Investing activities:
|
||||||||
Purchases of short-term investments
|
(544,375
|
)
|
(492,781
|
)
|
||||
Proceeds from sale of short-term investments
|
459,352
|
426,868
|
||||||
Purchases of property, plant and equipment
|
(9,080
|
)
|
(3,229
|
)
|
||||
Acquisition of licenses and other assets, net
|
(904
|
)
|
(1,032
|
)
|
||||
Net cash used in investing activities
|
(95,007
|
)
|
(70,174
|
)
|
||||
Financing activities:
|
||||||||
Proceeds from issuance of equity, net
|
7,652
|
67,057
|
||||||
Payments of tax withholdings related to vesting of employee stock awards and exercise of
employee stock options
|
(11,603
|
)
|
(7,597
|
)
|
||||
Repurchases and retirements of common stock
|
(90,550
|
)
|
—
|
|||||
Net cash provided by financing activities
|
(94,501
|
)
|
59,460
|
|||||
Net increase in cash and cash equivalents
|
(197,092
|
)
|
96,991
|
|||||
Cash and cash equivalents at beginning of period
|
683,287
|
278,820
|
||||||
Cash and cash equivalents at end of period
|
$
|
486,195
|
$
|
375,811
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Interest paid
|
$
|
601
|
$
|
667
|
||||
Income taxes paid
|
$
|
3
|
$
|
—
|
||||
Supplemental disclosures of non-cash investing and financing activities:
|
||||||||
Right-of-use assets obtained in exchange for lease liabilities
|
$
|
—
|
$
|
13,557
|
||||
Amounts accrued for capital and patent expenditures
|
$
|
4,903
|
$
|
1,864
|
1. |
Identify the contract
|
● |
We and our partner approved the contract and we are both committed to perform our obligations;
|
● |
We have identified our rights, our partner’s rights and the payment terms;
|
● |
We have concluded that the contract has commercial substance, meaning that the risk, timing, or amount of our future cash flows is expected to change as a result of the contract; and
|
● |
We believe collectability of the consideration is probable.
|
2. |
Identify the performance obligations
|
3. |
Determine the transaction price
|
4. |
Allocate the transaction price
|
● |
Estimated future product sales;
|
● |
Estimated royalties we may receive from future product sales;
|
● |
Estimated contractual milestone payments we may receive;
|
● |
Expenses we expect to incur;
|
● |
Income taxes; and
|
● |
A discount rate.
|
● |
The number of internal hours we estimate we will spend performing these services;
|
● |
The estimated cost of work we will perform;
|
● |
The estimated cost of work that we will contract with third parties to perform; and
|
● |
The estimated cost of API we will use.
|
5. |
Recognize revenue
|
1) |
If the additional goods and/or services are distinct from the other performance obligations in the original agreement; and
|
2) |
If the goods and/or services are at a stand-alone selling price.
|
● |
Whether the agreements were negotiated together with a single objective;
|
● |
Whether the amount of consideration in one contract depends on the price or performance of the other agreement; or
|
● |
Whether the goods and/or services promised under the agreements are a single performance obligation.
|
● |
2.8 million shares in the first quarter of 2019 as payment for the sublicense fee Akcea owed us for Novartis’s license of AKCEA-APO(a)-LRx, and
|
● |
6.9 million shares in the fourth quarter of 2019 as payment for the sublicense fee Akcea owed us for Pfizer’s license of vupanorsen.
|
|
March 31, 2020
|
December 31, 2019
|
||||||
Raw materials:
|
||||||||
Raw materials- clinical
|
$
|
9,162
|
$
|
9,363
|
||||
Raw materials- commercial
|
10,476
|
6,520
|
||||||
Total raw materials
|
19,638
|
15,883
|
||||||
Work in process
|
2,645
|
2,039
|
||||||
Finished goods
|
602
|
258
|
||||||
Total inventory
|
$
|
22,885
|
$
|
18,180
|
Three months ended March 31, 2020
|
Weighted
Average Shares
Owned in Akcea
|
Akcea’s
Net Loss
Per Share
|
Ionis’ Portion of
Akcea’s Net Loss
|
|||||||||
Common shares
|
77,095
|
$
|
(0.42
|
)
|
$
|
(32,674
|
)
|
|||||
Akcea’s net loss attributable to our ownership
|
$
|
(32,674
|
)
|
|||||||||
Ionis’ stand-alone net loss
|
(15,630
|
)
|
||||||||||
Net loss available to Ionis common stockholders
|
$
|
(48,304
|
)
|
|||||||||
Weighted average shares outstanding
|
139,429
|
|||||||||||
Basic net loss per share
|
$
|
(0.35
|
)
|
Three months ended March 31, 2019
|
Weighted
Average Shares
Owned in Akcea
|
Akcea’s
Net Income
Per Share
|
Ionis’ Portion of
Akcea’s Net Income
|
|||||||||
Common shares
|
68,582
|
$
|
0.35
|
$
|
23,846
|
|||||||
Akcea’s net income attributable to our ownership
|
$
|
23,846
|
||||||||||
Ionis’ stand-alone net income
|
63,697
|
|||||||||||
Net income available to Ionis common stockholders
|
$
|
87,543
|
||||||||||
Weighted average shares outstanding
|
138,582
|
|||||||||||
Basic net income per share
|
$
|
0.63
|
● |
0.125 percent convertible senior notes;
|
● |
1 percent convertible senior notes;
|
● |
Dilutive stock options;
|
● |
Unvested restricted stock units; and
|
● |
Employee Stock Purchase Plan, or ESPP.
|
Three months ended March 31, 2019
|
Income
(Numerator)
|
Shares
(Denominator)
|
Per-Share
Amount
|
|||||||||
Net income available to Ionis common stockholders
|
$
|
87,543
|
138,582
|
$
|
0.63
|
|||||||
Effect of dilutive securities:
|
||||||||||||
Shares issuable upon exercise of stock options
|
—
|
2,252
|
||||||||||
Shares issuable upon restricted stock award issuance
|
—
|
665
|
||||||||||
Shares issuable related to our Employee Stock Purchase Plan
|
—
|
38
|
||||||||||
Income available to Ionis common stockholders
|
$
|
87,543
|
141,537
|
$
|
0.62
|
|
Three Months Ended
March 31,
|
|||||||
2020
|
2019
|
|||||||
Risk-free interest rate
|
1.6
|
%
|
2.4
|
%
|
||||
Dividend yield
|
0.0
|
%
|
0.0
|
%
|
||||
Volatility
|
58.9
|
%
|
60.3
|
%
|
||||
Expected life
|
4.7 years
|
4.6 years
|
|
Three Months Ended
March 31,
|
|||||||
2020
|
2019
|
|||||||
Risk-free interest rate
|
1.1
|
%
|
2.5
|
%
|
||||
Dividend yield
|
0.0
|
%
|
0.0
|
%
|
||||
Volatility
|
47.2
|
%
|
45.5
|
%
|
||||
Expected life
|
6 months
|
6 months
|
|
Three Months Ended
March 31,
|
|||||||
2020
|
2019
|
|||||||
Risk-free interest rate
|
1.5
|
%
|
2.5
|
%
|
||||
Dividend yield
|
0.0
|
%
|
0.0
|
%
|
||||
Volatility
|
73.6
|
%
|
76.4
|
%
|
||||
Expected life
|
6.1 years
|
6.1 years
|
|
Three Months Ended
March 31,
|
|||
2020
|
||||
Risk-free interest rate
|
1.5
|
%
|
||
Dividend yield
|
0.0
|
%
|
||
Volatility
|
73.3
|
%
|
||
Expected life
|
6.3 years
|
|
Three Months Ended
March 31,
|
|||||||
2020
|
2019
|
|||||||
Risk-free interest rate
|
1.0
|
%
|
2.5
|
%
|
||||
Dividend yield
|
0.0
|
%
|
0.0
|
%
|
||||
Volatility
|
71.9
|
%
|
64.1
|
%
|
||||
Expected life
|
6 months
|
6 months
|
|
Three Months Ended
March 31,
|
|||||||
2020
|
2019
|
|||||||
Cost of products sold
|
$
|
237
|
$
|
118
|
||||
Research, development and patent
|
25,556
|
24,435
|
||||||
Selling, general and administrative
|
14,997
|
20,952
|
||||||
Total
|
$
|
40,790
|
$
|
45,505
|
1) |
When a participant is considered a customer in a collaborative arrangement, all of the associated accounting under Topic 606 should be applied
|
● |
We are applying all of the associated accounting under Topic 606 when we determine a participant in a collaborative arrangement is a customer
|
2) |
Adds “unit of account” concept to collaboration accounting guidance to align with Topic 606. The “unit of account” concept is used to determine if revenue is recognized or if a contra expense is recognized from consideration received under a collaboration
|
● |
We use the “unit of account” concept when we receive consideration under a collaborative arrangement to determine when we recognize revenue or a contra expense
|
3) |
The clarifying guidance precludes us from recognizing revenue under Topic 606 when we determine a transaction with a collaborative partner is not a customer and is not directly related to the sales to third parties
|
● |
When we conclude a collaboration partner is not a customer and is not directly related to the sales to third parties, we do not recognize revenue for the transaction
|
One year or less
|
70
|
%
|
||
After one year but within two years
|
22
|
%
|
||
After two years but within three years
|
8
|
%
|
||
Total
|
100
|
%
|
|
Gross Unrealized
|
Estimated
|
||||||||||||||
March 31, 2020
|
Cost (1)
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
Available-for-sale securities:
|
||||||||||||||||
Corporate debt securities (2)
|
$
|
717,739
|
$
|
545
|
$
|
(1,890
|
)
|
$
|
716,394
|
|||||||
Debt securities issued by U.S. government agencies
|
167,333
|
572
|
(28
|
)
|
167,877
|
|||||||||||
Debt securities issued by the U.S. Treasury (2)
|
355,634
|
1,621
|
(2
|
)
|
357,253
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
15,746
|
43
|
(2
|
)
|
15,787
|
|||||||||||
Total securities with a maturity of one year or less
|
1,256,452
|
2,781
|
(1,922
|
)
|
1,257,311
|
|||||||||||
Corporate debt securities
|
500,378
|
2,318
|
(2,903
|
)
|
499,793
|
|||||||||||
Debt securities issued by U.S. government agencies
|
165,369
|
994
|
(15
|
)
|
166,348
|
|||||||||||
Debt securities issued by the U.S. Treasury
|
62,382
|
810
|
—
|
63,192
|
||||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
18,687
|
100
|
—
|
18,787
|
||||||||||||
Other municipal debt securities
|
903
|
4
|
—
|
907
|
||||||||||||
Total securities with a maturity of more than one year
|
747,719
|
4,226
|
(2,918
|
)
|
749,027
|
|||||||||||
Total available-for-sale securities
|
$
|
2,004,171
|
$
|
7,007
|
$
|
(4,840
|
)
|
$
|
2,006,338
|
|||||||
Equity securities:
|
||||||||||||||||
Total equity securities included in other current assets (3)
|
$
|
4,712
|
$
|
—
|
$
|
(2,623
|
)
|
$
|
2,089
|
|||||||
Total equity securities included in deposits and other assets (4)
|
15,019
|
—
|
—
|
15,019
|
||||||||||||
Total equity securities
|
19,731
|
—
|
(2,623
|
)
|
17,108
|
|||||||||||
Total available-for-sale and equity securities
|
$
|
2,023,902
|
$
|
7,007
|
$
|
(7,463
|
)
|
$
|
2,023,446
|
|
Gross Unrealized
|
Estimated
|
||||||||||||||
December 31, 2019
|
Cost (1)
|
Gains
|
Losses
|
Fair Value
|
||||||||||||
Available-for-sale securities:
|
||||||||||||||||
Corporate debt securities (2)
|
$
|
669,665
|
$
|
1,451
|
$
|
(43
|
)
|
$
|
671,073
|
|||||||
Debt securities issued by U.S. government agencies
|
188,216
|
303
|
(43
|
)
|
188,476
|
|||||||||||
Debt securities issued by the U.S. Treasury (2)
|
327,670
|
232
|
(27
|
)
|
327,875
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (2)
|
21,065
|
26
|
(5
|
)
|
21,086
|
|||||||||||
Total securities with a maturity of one year or less
|
1,206,616
|
2,012
|
(118
|
)
|
1,208,510
|
|||||||||||
Corporate debt securities
|
428,627
|
2,911
|
(43
|
)
|
431,495
|
|||||||||||
Debt securities issued by U.S. government agencies
|
140,988
|
57
|
(117
|
)
|
140,928
|
|||||||||||
Debt securities issued by the U.S. Treasury
|
35,822
|
9
|
(12
|
)
|
35,819
|
|||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
19,309
|
18
|
(6
|
)
|
19,321
|
|||||||||||
Total securities with a maturity of more than one year
|
624,746
|
2,995
|
(178
|
)
|
627,563
|
|||||||||||
Total available-for-sale securities
|
$
|
1,831,362
|
$
|
5,007
|
$
|
(296
|
)
|
$
|
1,836,073
|
|||||||
Equity securities:
|
||||||||||||||||
Total equity securities included in other current assets (3)
|
4,712
|
—
|
(870
|
)
|
3,842
|
|||||||||||
Total equity securities included in deposits and other assets (4)
|
10,000
|
—
|
—
|
10,000
|
||||||||||||
Total equity securities
|
14,712
|
—
|
(870
|
)
|
13,842
|
|||||||||||
Total available-for-sale and equity securities
|
$
|
1,846,074
|
$
|
5,007
|
$
|
(1,166
|
)
|
$
|
1,849,915
|
(1) |
We hold our available-for-sale securities at amortized cost.
|
(2) |
Includes investments classified as cash equivalents on our condensed consolidated balance sheet.
|
(3) |
Our equity securities included in other current assets consisted of our investment in ProQR, which is a public company. We recognize our public company equity securities at fair value.
|
(4) |
Our equity securities included in deposits and other assets consisted of our investments in Empirico and Dynacure SAS, which are private companies. We recognize our private company equity securities at cost minus impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer on our condensed 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
|
305
|
$
|
750,404
|
$
|
(4,793
|
)
|
$
|
—
|
$
|
—
|
$
|
750,404
|
$
|
(4,793
|
)
|
|||||||||||||
Debt securities issued by U.S. government agencies
|
11
|
47,473
|
(32
|
)
|
34,053
|
(11
|
)
|
81,526
|
(43
|
)
|
||||||||||||||||||
Debt securities issued by the U.S. Treasury
|
1
|
15,598
|
(2
|
)
|
—
|
—
|
15,598
|
(2
|
)
|
|||||||||||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states
|
3
|
3,634
|
(2
|
)
|
—
|
—
|
3,634
|
(2
|
)
|
|||||||||||||||||||
Total temporarily impaired securities
|
320
|
$
|
817,109
|
$
|
(4,829
|
)
|
$
|
34,053
|
$
|
(11
|
)
|
$
|
851,162
|
$
|
(4,840
|
)
|
|
At
March 31, 2020
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||||||
Cash equivalents (1)
|
$
|
336,371
|
$
|
336,371
|
$
|
—
|
$
|
—
|
||||||||
Corporate debt securities (2)
|
1,216,187
|
—
|
1,216,187
|
—
|
||||||||||||
Debt securities issued by U.S. government agencies (3)
|
334,225
|
—
|
334,225
|
—
|
||||||||||||
Debt securities issued by the U.S. Treasury (4)
|
420,445
|
420,445
|
—
|
—
|
||||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (5)
|
34,574
|
—
|
34,574
|
—
|
||||||||||||
Other municipal debt securities (5)
|
907
|
—
|
907
|
—
|
||||||||||||
Investment in ProQR Therapeutics N.V. (6)
|
2,089
|
617
|
—
|
1,472
|
||||||||||||
Total
|
$
|
2,344,798
|
$
|
757,433
|
$
|
1,585,893
|
$
|
1,472
|
|
At
December 31, 2019
|
Quoted Prices in
Active Markets
(Level 1)
|
Significant Other
Observable Inputs
(Level 2)
|
Significant
Unobservable Inputs
(Level 3)
|
||||||||||||
Cash equivalents (1)
|
$
|
418,406
|
$
|
418,406
|
$
|
—
|
$
|
—
|
||||||||
Corporate debt securities (7)
|
1,102,568
|
—
|
1,102,568
|
—
|
||||||||||||
Debt securities issued by U.S. government agencies (8)
|
329,404
|
—
|
329,404
|
—
|
||||||||||||
Debt securities issued by the U.S. Treasury (5)
|
363,694
|
363,694
|
—
|
—
|
||||||||||||
Debt securities issued by states of the U.S. and political subdivisions of the states (5)
|
40,407
|
—
|
40,407
|
—
|
||||||||||||
Investment in ProQR Therapeutics N.V. (6)
|
4,506
|
—
|
—
|
4,506
|
||||||||||||
Total
|
$
|
2,258,985
|
$
|
782,100
|
$
|
1,472,379
|
$
|
4,506
|
(1) |
Included in cash and cash equivalents.
|
(2) |
$21.0 million was included in cash and cash equivalents, with the difference included in short-term investments.
|
(3) |
$6.5 million was included in cash and cash equivalents, with the difference included in short-term investments.
|
(4) |
$81 million was included in cash and cash equivalents, with the difference included in short-term investments.
|
(5) |
Included in short-term investments.
|
(6) |
Included in other current assets.
|
(7) |
$19.0 million was included in cash and cash equivalents, with the difference included in short-term investments.
|
(8) |
$0.8 million was included in cash and cash equivalents, with the difference included in short-term investments.
|
|
Three Months Ended
March 31,
|
|||||||
2020
|
2019
|
|||||||
SPINRAZA royalties (commercial revenue)
|
$
|
66.0
|
$
|
59.7
|
||||
R&D revenue
|
21.4
|
24.5
|
||||||
Total revenue from our relationship with Biogen
|
$
|
87.4
|
$
|
84.2
|
||||
Percentage of total revenue
|
66
|
%
|
28
|
%
|
|
Three Months Ended
March 31,
|
|||||||
2020
|
2019
|
|||||||
R&D revenue
|
$
|
13.8
|
$
|
4.0
|
||||
Percentage of total revenue
|
10
|
%
|
1
|
%
|
Three Months Ended March 31, 2020
|
Ionis Core
|
Akcea Therapeutics
|
Elimination of
Intercompany Activity
|
Total
|
||||||||||||
Revenue:
|
||||||||||||||||
Commercial revenue:
|
||||||||||||||||
SPINRAZA royalties
|
$
|
66,008
|
$
|
—
|
$
|
—
|
$
|
66,008
|
||||||||
Product sales, net
|
—
|
15,159
|
—
|
15,159
|
||||||||||||
Licensing and other royalty revenue
|
3,598
|
—
|
(804
|
)
|
2,794
|
|||||||||||
Total commercial revenue
|
$
|
69,606
|
$
|
15,159
|
$
|
(804
|
)
|
$
|
83,961
|
|||||||
R&D revenue under collaborative agreements
|
$
|
48,491
|
$
|
915
|
$
|
—
|
$
|
49,406
|
||||||||
Total segment revenue
|
$
|
118,097
|
$
|
16,074
|
$
|
(804
|
)
|
$
|
133,367
|
|||||||
Total operating expenses
|
$
|
135,426
|
$
|
61,334
|
$
|
(2,266
|
)
|
$
|
194,494
|
|||||||
Loss from operations
|
$
|
(17,329
|
)
|
$
|
(45,260
|
)
|
$
|
1,462
|
$
|
(61,127
|
)
|
Three Months Ended March 31, 2019
|
Ionis Core
|
Akcea Therapeutics
|
Elimination of
Intercompany Activity
|
Total
|
||||||||||||
Revenue:
|
||||||||||||||||
Commercial revenue:
|
||||||||||||||||
SPINRAZA royalties
|
$
|
59,711
|
$
|
—
|
$
|
—
|
$
|
59,711
|
||||||||
Product sales, net
|
—
|
6,754
|
—
|
6,754
|
||||||||||||
Licensing and other royalty revenue
|
1,623
|
—
|
—
|
1,623
|
||||||||||||
Total commercial revenue
|
$
|
61,334
|
$
|
6,754
|
$
|
—
|
$
|
68,088
|
||||||||
R&D revenue under collaborative agreements
|
$
|
160,556
|
$
|
157,062
|
$
|
(88,492
|
)
|
$
|
229,126
|
|||||||
Total segment revenue
|
$
|
221,890
|
$
|
163,816
|
$
|
(88,492
|
)
|
$
|
297,214
|
|||||||
Total operating expense
|
$
|
114,515
|
$
|
137,610
|
$
|
(76,446
|
)
|
$
|
175,679
|
|||||||
Income from operations
|
$
|
107,375
|
$
|
26,206
|
$
|
(12,046
|
)
|
$
|
121,535
|
Total Assets
|
Ionis Core
|
Akcea Therapeutics
|
Elimination of
Intercompany Activity
|
Total
|
||||||||||||
March 31, 2020
|
$
|
3,376,169
|
$
|
559,921
|
$
|
(845,177
|
)
|
$
|
3,090,913
|
|||||||
December 31, 2019
|
$
|
3,478,081
|
$
|
599,250
|
$
|
(844,219
|
)
|
$
|
3,233,112
|
ITEM 2 |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
Three Months Ended March 31,
|
||||||||
2020
|
2019
|
|||||||
Total revenue
|
$
|
133,367
|
$
|
297,214
|
||||
Total operating expenses
|
$
|
194,494
|
$
|
175,679
|
||||
Income (loss) from operations
|
$
|
(61,127
|
)
|
$
|
121,535
|
|||
Net income (loss)
|
$
|
(58,480
|
)
|
$
|
90,884
|
|||
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders
|
$
|
(48,226
|
)
|
$
|
84,443
|
● |
SPINRAZA: a global foundation-of-care for the treatment of SMA patients of all ages
|
o |
Worldwide sales increased to $565 million in the first quarter, a 9 percent increase compared to the first quarter of 2019
|
o |
Worldwide patients on treatment increased to approximately 10,800 at the end of the first quarter, including patients across commercial, expanded access and clinical trial settings
|
o |
Patient treatment is underway in the Phase 2/3 DEVOTE study evaluating the safety, tolerability and potential to achieve even greater efficacy with a higher dose of SPINRAZA
|
o |
Data from an independent study published in Lancet Neurology demonstrated statistically significant improvement in motor function with SPINRAZA treatment in teens and adults
|
● |
TEGSEDI: launched in multiple markets for the treatment of hATTR with polyneuropathy in adult patients
|
o |
Commercially available in 12 countries
|
o |
Launching in additional EU countries this year and expanding in Latin America through PTC Therapeutics
|
o |
Results from the NEURO-TTR Phase 3 open-label extension study were published in the European Journal of Neurology.
|
● |
WAYLIVRA: launched in the EU as the only approved treatment for adults with genetically confirmed FCS at high risk for pancreatitis
|
o |
Launch progressing in Germany, Austria and through the ATU in France
|
o |
Launching in additional EU countries this year
|
● |
Roche completed enrollment in the global, GENERATION HD1 Phase 3 study in patients with Huntington’s disease
|
● |
Initiated the CARDIO-TTRansform Phase 3 clinical trial for AKCEA-TTR-LRx in patients with TTR-mediated amyloid cardiomyopathy
|
● |
Two medicines granted Fast Track Designation by the U.S. FDA
|
o |
AKCEA-APO(a)-LRx for the treatment of cardiovascular disease due to elevated Lp(a) levels
|
o |
IONIS-C9Rx for the treatment of C9orf72-ALS
|
● |
We generated more than $20 million as numerous partnered medicines advanced
|
o |
$10 million from AstraZeneca for ION532 targeting APOL1 for the treatment of kidney disease
|
o |
$7.5 million from Biogen for IONIS-MAPTRx for the treatment of Alzheimer’s disease
|
o |
$5 million from Dynacure for IONIS-DNM2-2.5Rx for the treatment of centronuclear myopathies
|
● |
We and Akcea reported positive topline results for AKCEA-APOCIII-LRx and vupanorsen
|
● |
Results from the Phase 2 study of AKCEA-APO(a)-LRx in patients with Lp(a)-driven cardiovascular disease, highlighting the favorable safety and tolerability profile and the potential to address a major area of unmet need, were published in the New England Journal of Medicine
|
● |
Initiated a Phase 1 study of ION224, an Ionis-owned medicine in development for the treatment of NASH
|
● |
Assessing the propriety of revenue recognition and associated deferred revenue;
|
● |
Determining the appropriate cost estimates for unbilled preclinical studies and clinical development activities; and
|
● |
Estimating our income taxes
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Revenue:
|
||||||||
Commercial revenue:
|
||||||||
SPINRAZA royalties
|
$
|
66,008
|
$
|
59,711
|
||||
Product sales, net
|
15,159
|
6,754
|
||||||
Licensing and other royalty revenue
|
2,794
|
1,623
|
||||||
Total commercial revenue
|
83,961
|
68,088
|
||||||
R&D revenue:
|
||||||||
Amortization from upfront payments
|
21,146
|
35,851
|
||||||
Milestone payments
|
23,119
|
40,017
|
||||||
License fees
|
—
|
150,000
|
||||||
Other services
|
5,141
|
3,258
|
||||||
Total R&D revenue
|
49,406
|
229,126
|
||||||
Total revenue
|
$
|
133,367
|
$
|
297,214
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Ionis Core
|
$
|
95,020
|
$
|
78,514
|
||||
Akcea Therapeutics
|
60,950
|
128,106
|
||||||
Elimination of intercompany activity
|
(2,266
|
)
|
(76,446
|
)
|
||||
Subtotal
|
153,704
|
130,174
|
||||||
Non-cash compensation expense related to equity awards
|
40,790
|
45,505
|
||||||
Total operating expenses
|
$
|
194,494
|
$
|
175,679
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Ionis Core
|
$
|
—
|
$
|
—
|
||||
Akcea Therapeutics
|
4,534
|
2,326
|
||||||
Elimination of intercompany activity
|
(2,223
|
)
|
(1,403
|
)
|
||||
Subtotal
|
2,311
|
923
|
||||||
Non-cash compensation expense related to equity awards
|
237
|
118
|
||||||
Total cost of products sold
|
$
|
2,548
|
$
|
1,041
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Research, development and patent expenses, excluding non-cash compensation expense related to equity awards
|
$
|
91,396
|
$
|
81,982
|
||||
Non-cash compensation expense related to equity awards
|
25,556
|
24,435
|
||||||
Total research, development and patent expenses
|
$
|
116,952
|
$
|
106,417
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Ionis Core
|
$
|
75,433
|
$
|
61,327
|
||||
Akcea Therapeutics
|
16,006
|
95,698
|
||||||
Elimination of intercompany activity
|
(43
|
)
|
(75,043
|
)
|
||||
Subtotal
|
91,396
|
81,982
|
||||||
Non-cash compensation expense related to equity awards
|
25,556
|
24,435
|
||||||
Total research, development and patent expenses
|
$
|
116,952
|
$
|
106,417
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Antisense drug discovery expenses, excluding non-cash compensation expense related to equity awards
|
$
|
18,366
|
$
|
14,632
|
||||
Non-cash compensation expense related to equity awards
|
6,306
|
5,493
|
||||||
Total antisense drug discovery expenses
|
$
|
24,672
|
$
|
20,125
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
AKCEA-TTR-LRx
|
$
|
5,851
|
$
|
940
|
||||
WAYLIVRA
|
978
|
1,971
|
||||||
TEGSEDI
|
4,346
|
4,691
|
||||||
Other antisense development projects
|
21,840
|
21,370
|
||||||
Development overhead expenses
|
17,932
|
18,944
|
||||||
Total antisense drug development, excluding non-cash compensation expense related to equity awards
|
50,947
|
47,916
|
||||||
Non-cash compensation expense related to equity awards
|
11,787
|
12,234
|
||||||
Total antisense drug development expenses
|
$
|
62,734
|
$
|
60,150
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Ionis Core
|
$
|
39,102
|
$
|
29,070
|
||||
Akcea Therapeutics
|
11,845
|
93,846
|
||||||
Elimination of intercompany activity
|
—
|
(75,000
|
)
|
|||||
Subtotal
|
50,947
|
47,916
|
||||||
Non-cash compensation expense related to equity awards
|
11,787
|
12,234
|
||||||
Total antisense drug development expenses
|
$
|
62,734
|
$
|
60,150
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Manufacturing and development chemistry expenses, excluding non-cash compensation expense related to equity awards
|
$
|
11,983
|
$
|
10,154
|
||||
Non-cash compensation expense related to equity awards
|
2,832
|
2,057
|
||||||
Total manufacturing and development chemistry expenses
|
$
|
14,815
|
$
|
12,211
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Ionis Core
|
$
|
10,311
|
$
|
8,799
|
||||
Akcea Therapeutics
|
1,672
|
1,355
|
||||||
Subtotal
|
11,983
|
10,154
|
||||||
Non-cash compensation expense related to equity awards
|
2,832
|
2,057
|
||||||
Total manufacturing and development chemistry expenses
|
$
|
14,815
|
$
|
12,211
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Personnel costs
|
$
|
3,838
|
$
|
3,910
|
||||
Occupancy
|
2,442
|
2,177
|
||||||
Patent expenses
|
672
|
523
|
||||||
Depreciation and amortization
|
162
|
121
|
||||||
Insurance
|
610
|
411
|
||||||
Other
|
2,376
|
2,138
|
||||||
Total R&D support expenses, excluding non-cash compensation expense related to equity awards
|
10,100
|
9,280
|
||||||
Non-cash compensation expense related to equity awards
|
4,632
|
4,651
|
||||||
Total R&D support expenses
|
$
|
14,732
|
$
|
13,931
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Ionis Core
|
$
|
7,654
|
$
|
8,826
|
||||
Akcea Therapeutics
|
2,489
|
497
|
||||||
Elimination of intercompany activity
|
(43
|
)
|
(43
|
)
|
||||
Subtotal
|
10,100
|
9,280
|
||||||
Non-cash compensation expense related to equity awards
|
4,632
|
4,651
|
||||||
Total R&D support expenses
|
$
|
14,732
|
$
|
13,931
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Selling, general and administrative expenses, excluding non-cash compensation expense related to equity awards
|
$
|
59,997
|
$
|
47,270
|
||||
Non-cash compensation expense related to equity awards
|
14,997
|
20,951
|
||||||
Total selling, general and administrative expenses
|
$
|
74,994
|
$
|
68,221
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Ionis Core
|
$
|
19,587
|
$
|
17,187
|
||||
Akcea Therapeutics
|
40,410
|
30,082
|
||||||
Subtotal
|
59,997
|
47,269
|
||||||
Non-cash compensation expense related to equity awards
|
14,997
|
20,952
|
||||||
Total selling, general and administrative expenses
|
$
|
74,994
|
$
|
68,221
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Cost of products sold
|
$
|
4,534
|
$
|
2,326
|
||||
Development and patent expenses
|
16,006
|
20,698
|
||||||
Sublicense fees to Ionis
|
—
|
75,000
|
||||||
Selling, general and administrative expenses
|
40,410
|
30,082
|
||||||
Profit (loss) share for TEGSEDI commercialization activities
|
(6,898
|
)
|
(9,056
|
)
|
||||
Total operating expenses, excluding non-cash compensation expense related to equity awards
|
54,052
|
119,050
|
||||||
Non-cash compensation expense related to equity awards
|
7,282
|
18,560
|
||||||
Total Akcea Therapeutics operating expenses
|
$
|
61,334
|
$
|
137,610
|
Three Months Ended
March 31,
|
||||||||
2020
|
2019
|
|||||||
Convertible notes:
|
||||||||
Non-cash amortization of the debt discount and debt issuance costs
|
$
|
9,412
|
$
|
9,200
|
||||
Interest expense payable in cash
|
946
|
1,714
|
||||||
Interest on mortgage for primary R&D and manufacturing facilities
|
601
|
582
|
||||||
Other
|
31
|
103
|
||||||
Total interest expense
|
$
|
10,990
|
$
|
11,599
|
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
|
|||||||||||||||
0.125% Notes (principal and interest payable)
|
$
|
552.3
|
$
|
0.7
|
$
|
1.4
|
$
|
550.2
|
$
|
—
|
||||||||||
1% Notes (principal and interest payable)
|
316.1
|
3.1
|
313.0
|
—
|
—
|
|||||||||||||||
Building mortgage payments
|
77.6
|
2.4
|
5.5
|
6.9
|
62.8
|
|||||||||||||||
Operating leases
|
22.6
|
3.3
|
5.7
|
4.8
|
8.8
|
|||||||||||||||
Other obligations (principal and interest payable)
|
1.0
|
0.1
|
0.1
|
0.1
|
0.7
|
|||||||||||||||
Total
|
$
|
969.6
|
$
|
9.6
|
$
|
325.7
|
$
|
562.0
|
$
|
72.3
|
|
0.125% Notes
|
|||
Outstanding principal balance
|
$
|
548.8
|
||
Maturity date
|
December 2024
|
|||
Interest rate
|
0.125 percent
|
|||
Conversion price per share
|
$
|
83.28
|
||
Total shares of common stock subject to conversion
|
6.6
|
1% Notes
|
||||
Outstanding principal balance
|
$
|
309.9
|
||
Maturity date
|
November 2021
|
|||
Interest rate
|
1 percent
|
|||
Conversion price per share
|
$
|
66.81
|
||
Total shares of common stock subject to conversion
|
4.6
|
ITEM 3. |
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4. |
CONTROLS AND PROCEDURES
|
ITEM 1. |
LEGAL PROCEEDINGS
|
ITEM 1A. |
RISK FACTORS
|
● |
receipt and scope of marketing authorizations;
|
● |
establishment and demonstration in the medical and patient community of the efficacy and safety of our medicines and their potential advantages over competing products;
|
● |
cost and effectiveness of our medicines compared to other available therapies;
|
● |
patient convenience of the dosing regimen for our medicines; and
|
● |
reimbursement policies of government and third-party payers.
|
● |
priced lower than our medicines;
|
● |
reimbursed more favorably by government and other third-party payers than our medicines;
|
● |
safer than our medicines;
|
● |
more effective than our medicines; or
|
● |
more convenient to use than our medicines.
|
● |
ZOLGENSMA could compete with SPINRAZA;
|
● |
ONPATTRO, VYNDAQEL and VYNDAMAX, AG10 and vutrisiran could compete with TEGSEDI;
|
● |
ARO-APOC3, Myalept and gemcabene could compete with WAYLIVRA;
|
● |
WVE-120101/WVE-120102, Selistat and VX15 could compete with tominersen;
|
● |
Arimoclomol could compete with tofersen; and
|
● |
ONPATTRO, VYNDAQEL and VYNDAMAX, vutrisiran and AG10 could complete with AKCEA-TTR-LRx;.
|
● |
in the U.S., TEGSEDI’s label contains a boxed warning for thrombocytopenia and glomerulonephritis;
|
● |
TEGSEDI requires periodic blood and urine monitoring;
|
● |
in the U.S., TEGSEDI is available only through a Risk Evaluation and Mitigation Strategy, or REMS, program; and
|
● |
we expect WAYLIVRA will require periodic blood monitoring if approved in the U.S.
|
● |
fund our development activities for SPINRAZA;
|
● |
seek and obtain regulatory approvals for SPINRAZA; and
|
● |
successfully commercialize SPINRAZA.
|
● |
such authorities may disagree with the design or implementation of our clinical studies;
|
● |
we or our partners may be unable to demonstrate to the satisfaction of the FDA or other regulatory authorities that a medicine is safe and effective for any indication;
|
● |
such authorities may not accept clinical data from studies conducted at clinical facilities that have deficient clinical practices or that are in countries where the standard of care is potentially different from the U.S.;
|
● |
we or our partners may be unable to demonstrate that our medicine's clinical and other benefits outweigh its safety risks to support approval;
|
● |
such authorities may disagree with the interpretation of data from preclinical or clinical studies;
|
● |
such authorities may find deficiencies in the manufacturing processes or facilities of third-party manufacturers who manufacture clinical and commercial supplies for our medicines; and
|
● |
the approval policies or regulations of such authorities or their prior guidance to us or our partners during clinical development may significantly change in a manner rendering our clinical data insufficient for approval.
|
● |
the clinical study may produce negative or inconclusive results;
|
● |
regulators may require that we hold, suspend or terminate clinical research for noncompliance with regulatory requirements;
|
● |
we, our partners, the FDA or foreign regulatory authorities could suspend or terminate a clinical study due to adverse side effects of a medicine on subjects in the trial;
|
● |
we, or our partners, may decide, or regulators may require us, to conduct additional preclinical testing or clinical studies;
|
● |
enrollment in our clinical studies may be slower than we anticipate;
|
● |
we or our partners, including our independent clinical investigators, contract research organizations and other third-party service providers on which we rely, may not identify, recruit and train suitable clinical investigators at a sufficient number of study sites or timely enroll a sufficient number of study subjects in the clinical study;
|
● |
the institutional review board for a prospective site might withhold or delay its approval for the study;
|
● |
enrollment in our clinical studies may be slower than we anticipate;
|
● |
people who enroll in the clinical study may later drop out due to adverse events, a perception they are not benefiting from participating in the study, fatigue with the clinical study process or personal issues;
|
● |
a clinical study site may deviate from the protocol for the study;
|
● |
the cost of our clinical studies may be greater than we anticipate;
|
● |
our partners may decide not to exercise any existing options to license and conduct additional clinical studies for our medicines; and
|
● |
the supply or quality of our medicines or other materials necessary to conduct our clinical studies may be insufficient, inadequate or delayed.
|
● |
Roche for development and funding of tominersen;
|
● |
Novartis for development and funding of AKCEA-APO(a)-LRx; and
|
● |
Biogen for development and funding of tofersen.
|
● |
conduct clinical studies;
|
● |
seek and obtain marketing authorization; and
|
● |
manufacture, market and sell our medicines.
|
● |
pursue alternative technologies or develop alternative products that may be competitive with the medicine that is part of the collaboration with us;
|
● |
pursue higher-priority programs or change the focus of its own development programs; or
|
● |
choose to devote fewer resources to our medicines than it does for its own medicines.
|
● |
successful commercialization of SPINRAZA, TEGSEDI and WAYLIVRA;
|
● |
additional marketing approvals for WAYLIVRA and TEGSEDI;
|
● |
the profile and launch timing of our medicines, including TEGSEDI and WAYLIVRA;
|
● |
changes in existing collaborative relationships and our ability to establish and maintain additional collaborative arrangements;
|
● |
continued scientific progress in our research, drug discovery and development programs;
|
● |
the size of our programs and progress with preclinical and clinical studies;
|
● |
the time and costs involved in obtaining marketing authorizations; and
|
● |
competing technological and market developments, including the introduction by others of new therapies that address our markets.
|
● |
interruption of our research, development and manufacturing efforts;
|
● |
injury to our employees and others;
|
● |
environmental damage resulting in costly clean up; and
|
● |
liabilities under federal, state and local laws and regulations governing health and human safety, as well as the use, storage, handling and disposal of these materials and resultant waste products.
|
ITEM 2. |
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
|
|
Total
Number of
Shares Purchased
|
Average
Price Paid
Per Share (1)
|
||||||
January 2020
|
1,478
|
$
|
61.27
|
|||||
Total
|
1,478
|
(1)
|
Average Price Paid Per Share excludes cash paid for commissions.
|
ITEM 3. |
DEFAULT UPON SENIOR SECURITIES
|
ITEM 4. |
MINE SAFETY DISCLOSURES
|
ITEM 5. |
OTHER INFORMATION
|
ITEM 6. |
EXHIBITS
|
a. |
Exhibits
|
Exhibit Number
|
Description of Document
|
|
Certification by Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
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Certification by Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended.
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32.1*
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Certification Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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101
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The following financial statements from the Ionis Pharmaceuticals, Inc. Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, formatted in Inline Extensible Business Reporting Language (iXBRL): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of operations, (iii) condensed consolidated statements of comprehensive income (loss), (iv) condensed consolidated statements of stockholders' equity, (v) condensed consolidated statements of cash flows and (vi) notes to condensed consolidated financial statements (detail tagged).
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104
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Cover Page Interactive Data File (formatted in iXBRL and included in exhibit 101).
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* |
This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
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Signatures
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Title
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Date
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/s/ BRETT P. MONIA
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Director and Chief Executive Officer
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Brett P. Monia, Ph.D.
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(Principal executive officer)
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May 6, 2020
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/s/ ELIZABETH L. HOUGEN
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Executive Vice President, Finance and Chief Financial Officer
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Elizabeth L. Hougen
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(Principal financial and accounting officer)
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May 6, 2020
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1. |
I have reviewed this Quarterly Report on Form 10-Q of Ionis Pharmaceuticals, Inc.;
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2. |
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
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3. |
Based on my knowledge, the condensed consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, condensed consolidated results of operations and condensed consolidated cash flows of the registrant as of, and for, the periods presented in this quarterly report;
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4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
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a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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Dated: May 6, 2020
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/s/ BRETT P. MONIA
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Brett P. Monia, Ph.D.
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|
Chief Executive Officer
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1. |
I have reviewed this Quarterly Report on Form 10-Q of Ionis Pharmaceuticals, Inc.;
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2. |
Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
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3. |
Based on my knowledge, the condensed consolidated financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, condensed consolidated results of operations and condensed consolidated cash flows of the registrant as of, and for, the periods presented in this quarterly report;
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4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c) |
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d) |
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
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a) |
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b) |
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ ELIZABETH L. HOUGEN
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Elizabeth L. Hougen
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Chief Financial Officer
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1. |
The Company’s Quarterly Report on Form 10-Q for the period ended March 31, 2020, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and
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2. |
The information contained in the Periodic Report fairly presents, in all material respects, the financial condition of the Company at the end of the period covered by the Periodic Report and the results of operations of the Company for the period covered by the Periodic Report.
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/s/ BRETT P. MONIA
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/s/ ELIZABETH L. HOUGEN
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Brett P. Monia, Ph.D.
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|
Elizabeth L. Hougen
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Chief Executive Officer
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Chief Financial Officer
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