Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Jul. 30, 2015 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ISIS PHARMACEUTICALS INC | |
Entity Central Index Key | 874,015 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 119,962,306 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 119,487 | $ 142,998 |
Short-term investments | 635,447 | 585,834 |
Contracts receivable | 3,264 | 3,903 |
Inventories | 6,782 | 6,290 |
Investment in Regulus Therapeutics Inc. | 60,604 | 81,881 |
Other current assets | 29,868 | 15,691 |
Total current assets | 855,452 | 836,597 |
Property, plant and equipment, net | 89,692 | 88,958 |
Licenses, net | 1,753 | 2,690 |
Patents, net | 19,060 | 17,186 |
Deposits and other assets | 10,301 | 10,378 |
Total assets | 976,258 | 955,809 |
Current liabilities: | ||
Accounts payable | 10,954 | 17,984 |
Accrued compensation | 7,915 | 12,302 |
Accrued liabilities | 23,753 | 30,451 |
Current portion of long-term obligations | 1,225 | 2,882 |
Current portion of deferred contract revenue | 58,285 | 51,713 |
Total current liabilities | 102,132 | 115,332 |
Long-term deferred contract revenue | 108,128 | 127,797 |
Long-term obligations, less current portion | 7,392 | 7,669 |
Long-term financing liability for leased facility | 71,968 | 71,731 |
Total liabilities | 675,938 | 698,029 |
Stockholders' equity: | ||
Common stock, $0.001 par value; 300,000,000 shares authorized, 119,881,615 and 118,442,726 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | 120 | 118 |
Additional paid-in capital | 1,269,452 | 1,224,509 |
Accumulated other comprehensive income | 18,411 | 39,747 |
Accumulated deficit | (987,663) | (1,006,594) |
Total stockholders' equity | 300,320 | 257,780 |
Total liabilities and stockholders' equity | 976,258 | 955,809 |
1 Percent Convertible Senior Notes [Member] | ||
Current liabilities: | ||
Convertible senior notes | 337,158 | 327,486 |
2 3/4 Percent Convertible Senior Notes [Member] | ||
Current liabilities: | ||
Convertible senior notes | $ 49,160 | $ 48,014 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 |
Common stock, shares issued (in shares) | 119,881,615 | 118,442,726 |
Common stock, shares outstanding (in shares) | 119,881,615 | 118,442,726 |
1 Percent Convertible Senior Notes [Member] | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Interest rate on convertible senior notes | 1.00% | 1.00% |
2 3/4 Percent Convertible Senior Notes [Member] | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Interest rate on convertible senior notes | 2.75% | 2.75% |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Revenue: | ||||
Research and development revenue under collaborative agreements | $ 119,658 | $ 56,628 | $ 181,551 | $ 76,177 |
Licensing and royalty revenue | 770 | 448 | 1,461 | 9,060 |
Total revenue | 120,428 | 57,076 | 183,012 | 85,237 |
Expenses: | ||||
Research, development and patent expenses | 68,007 | 59,264 | 132,454 | 112,712 |
General and administrative | 7,775 | 4,462 | 15,241 | 8,842 |
Total operating expenses | 75,782 | 63,726 | 147,695 | 121,554 |
Income (loss) from operations | 44,646 | (6,650) | 35,317 | (36,317) |
Other income (expense): | ||||
Investment income | 917 | 671 | 1,761 | 1,328 |
Interest expense | (9,127) | (4,961) | (18,148) | (9,904) |
Gain (loss) on investments, net | 1 | (260) | 1 | 137 |
Income (loss) before income tax (expense) benefit | 36,437 | (11,200) | 18,931 | (44,756) |
Income tax (expense) benefit | (789) | (881) | 0 | 1,395 |
Net income (loss) | $ 35,648 | $ (12,081) | $ 18,931 | $ (43,361) |
Basic net income (loss) per share (in dollars per share) | $ 0.30 | $ (0.10) | $ 0.16 | $ (0.37) |
Diluted net income (loss) per share (in dollars per share) | $ 0.29 | $ (0.10) | $ 0.15 | $ (0.37) |
Shares used in computing basic net income (loss) per share (in shares) | 119,742 | 117,588 | 119,348 | 117,359 |
Shares used in computing diluted net income (loss) per share (in shares) | 127,779 | 117,588 | 124,061 | 117,359 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) [Abstract] | ||||
Net income (loss) | $ 35,648 | $ (12,081) | $ 18,931 | $ (43,361) |
Unrealized (losses) gains on securities, net of tax | (28,703) | (4,456) | (21,336) | 3,806 |
Reclassification adjustment for realized losses (gains) included in net income (loss) | 0 | 175 | 0 | (167) |
Comprehensive income (loss) | $ 6,945 | $ (16,362) | $ (2,405) | $ (39,722) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Operating activities: | ||
Net income (loss) | $ 18,931 | $ (43,361) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation | 3,406 | 3,141 |
Amortization of patents | 648 | 543 |
Amortization of licenses | 937 | 941 |
Amortization of premium on investments, net | 3,377 | 3,847 |
Amortization of debt issuance costs | 555 | 272 |
Amortization of long-term financing liability for leased facility | 3,327 | 3,306 |
Stock-based compensation expense | 26,910 | 14,777 |
Gain on investments, net | (1) | (137) |
Non-cash losses related to patents, licensing and property, plant and equipment | 166 | 325 |
Tax benefit from other unrealized gains on securities | 0 | (1,395) |
Changes in operating assets and liabilities: | ||
Contracts receivable | 639 | (30,839) |
Inventories | (492) | 257 |
Other current and long-term assets | (14,628) | (695) |
Accounts payable | (8,197) | 1,991 |
Accrued compensation | (4,387) | (5,738) |
Deferred rent | 167 | 69 |
Accrued liabilities | (6,698) | 1,965 |
Deferred contract revenue | (13,097) | (18,978) |
Net cash provided by (used in) operating activities | 22,381 | (66,343) |
Investing activities: | ||
Purchases of short-term investments | (240,570) | (179,196) |
Proceeds from the sale of short-term investments | 187,522 | 175,777 |
Purchases of property, plant and equipment | (3,940) | (3,100) |
Acquisition of licenses and other assets, net | (1,749) | (1,791) |
Proceeds from the sale of strategic investments | 0 | 737 |
Net cash used in investing activities | (58,737) | (7,573) |
Financing activities: | ||
Proceeds from equity awards | 18,035 | 13,416 |
Principal payments on debt and capital lease obligations | (5,190) | (5,392) |
Net cash provided by financing activities | 12,845 | 8,024 |
Net decrease in cash and cash equivalents | (23,511) | (65,892) |
Cash and cash equivalents at beginning of period | 142,998 | 159,973 |
Cash and cash equivalents at end of period | 119,487 | 94,081 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 3,377 | 2,920 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Amounts accrued for capital and patent expenditures | 1,166 | 453 |
2 3/4 Percent Convertible Senior Notes [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Amortization of convertible notes discount | 1,146 | 3,366 |
1 Percent Convertible Senior Notes [Member] | ||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Amortization of convertible notes discount | $ 9,672 | $ 0 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Parenthetical) | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 |
1 Percent Convertible Senior Notes [Member] | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Interest rate on convertible senior notes | 1.00% | 1.00% | |
2 3/4 Percent Convertible Senior Notes [Member] | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Interest rate on convertible senior notes | 2.75% | 2.75% | 2.75% |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2015 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation The unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2015 and 2014 have been prepared on the same basis as the audited financial statements for the year ended December 31, 2014. The financial statements include all normal recurring adjustments, which we consider necessary for a fair presentation of our financial position at such dates and our operating results and cash flows for those periods. Results for the interim periods are not necessarily indicative of the results for the entire year. For more complete financial information, these financial statements, and notes thereto, should be read in conjunction with the audited financial statements for the year ended December 31, 2014 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC. The condensed consolidated financial statements include the accounts of Isis Pharmaceuticals, Inc. ("we", "us" or "our") and our wholly owned subsidiary, Akcea Therapeutics, Inc., which we formed in December 2014. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Revenue Recognition We generally recognize revenue when we have satisfied all contractual obligations and are reasonably assured of collecting the resulting receivable. We are often entitled to bill our customers and receive payment from our customers in advance of recognizing the revenue. In the instances in which we have received payment from our customers in advance of recognizing revenue, we include the amounts in deferred revenue on our consolidated condensed balance sheet. Arrangements with multiple deliverables Our collaboration agreements typically contain multiple elements, or deliverables, including technology licenses or options to obtain technology licenses, research and development services, and in certain cases manufacturing services, and we allocate the consideration to each unit of accounting based on the relative selling price of each deliverable. Identifying deliverables and units of accounting We evaluate the deliverables in our collaboration agreements to determine whether they meet the criteria to be accounted for as separate units of accounting or whether they should be combined with other deliverables and accounted for as a single unit of accounting. When the delivered items in an arrangement have "stand-alone value" to our customer, we account for the deliverables as separate units of accounting. For example, in May 2015, we entered into an exclusive license agreement with Bayer to develop and commercialize ISIS-FXI Rx Rx Rx Rx The exclusive license we granted to Bayer to develop and commercialize ISIS-FXI Rx The development services we agreed to perform for ISIS-FXI Rx The initial supply of API. We determined that each of these three units of accounting have stand-alone value. The exclusive license we granted to Bayer has stand-alone value because it is an exclusive license that gives Bayer the right to develop ISIS-FXI Rx Measurement and allocation of arrangement consideration Our collaborations may provide for various types of payments to us including upfront payments, funding of research and development, milestone payments, licensing fees, profit sharing and royalties on product sales. We initially allocate the amount of consideration that is fixed and determinable at the time the agreement is entered into and exclude contingent consideration. We allocate the consideration to each unit of accounting based on the relative selling price of each deliverable. Delivered items have stand-alone value if they are sold separately by any vendor or the customer could resell the delivered items on a stand-alone basis. We use the following hierarchy of values to estimate the selling price of each deliverable: (i) vendor-specific objective evidence of fair value; (ii) third-party evidence of selling price; and (iii) best estimate of selling price, or BESP. The BESP reflects our best estimate of what the selling price would be if we regularly sold the deliverable on a stand-alone basis. We recognize the revenue allocated to each unit of accounting as we deliver the related goods or services. If we determine that we should treat certain deliverables as a single unit of accounting, then we recognize the revenue ratably over our estimated period of performance. We determined that the allocable arrangement consideration for the Bayer collaboration was $100 million and we allocated it based on the relative BESP of each unit of accounting. We engaged a third party, independent valuation expert to assist us with determining BESP. We estimated the selling price of the license granted for ISIS-FXI Rx Rx Estimated future product sales; Estimated royalties on future product sales; Contractual milestone payments; Expenses we expect to incur; Income taxes; and We estimated the selling price of the ongoing development services by using our internal estimates of the cost to perform the specific services and estimates of expected cash outflows to third parties for services and supplies over the expected period that we will perform the development services. The significant inputs we used to determine the selling price of the ongoing development services included: 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. We determine the selling price of our API consistently for all of our partnerships. On an annual basis, we calculate our fully absorbed cost to manufacture API. We then determine the unit price we will charge our partners by dividing our fully absorbed costs by the quantity of API we expect to produce during the year. For purposes of determining the BESP of the services we will perform and the API in our Bayer transaction, we were required to include a markup for a reasonable profit margin. Based on the units of accounting under the agreement, we allocated the $100 million upfront payment from Bayer as follows: $91.2 million to the ISIS-FXI Rx $4.3 million for ongoing development services; and $4.5 Assuming a constant selling price for the other elements in the arrangement, if there was an assumed ten percent increase or decrease in the estimated selling price of the ISIS-FXI Rx Rx Timing of revenue recognition We recognize revenue as we deliver each item under the arrangement and the related revenue is realizable and earned. We recognize revenue as we deliver each item under the arrangement. For example, we recognized revenue for the exclusive license we granted Bayer for ISIS-FXI Rx The following are the periods over which we are recognizing revenue for each of our units of accounting under our Bayer agreement: We recognized the portion of the consideration attributed to the ISIS-FXI Rx Rx We will recognize the amount attributed to the API supply when we deliver it to Bayer. Multiple agreements From time to time, we may enter into separate agreements at or near the same time with the same customer. We evaluate such agreements to determine whether they should be accounted for individually as distinct arrangements or whether the separate agreements are, in substance, a single multiple element arrangement. We evaluate whether the negotiations are conducted jointly as part of a single negotiation, whether the deliverables are interrelated or interdependent, whether fees in one arrangement are tied to performance in another arrangement, and whether elements in one arrangement are essential to another arrangement. Our evaluation involves significant judgment to determine whether a group of agreements might be so closely related that they are, in effect, part of a single arrangement. For example, since early 2012, we have entered into four collaboration agreements with Biogen: In January 2012, we entered into a collaboration agreement with Biogen to develop and commercialize ISIS-SMN Rx Rx 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 $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 neurological 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. All four of these collaboration agreements give Biogen the option to license one or more drugs resulting from the specific collaboration. If Biogen exercises an option, it will pay us a license fee and will assume future development, regulatory and commercialization responsibilities for the licensed drug. We are also eligible to receive milestone payments associated with the research and/or development of the drugs prior to licensing, milestone payments if Biogen achieves pre-specified regulatory milestones, and royalties on any product sales of drugs resulting from these collaborations. We evaluated all four of the Biogen agreements to determine whether we should account for them as separate agreements. We determined that we should account for the agreements separately because we conducted the negotiations independently of one another, each agreement focuses on different drugs, there are no interrelated or interdependent deliverables, there are no provisions in any of these agreements that are essential to the other agreement, and the payment terms and fees under each agreement are independent of each other. We also evaluated the deliverables in each of these agreements to determine whether they met the criteria to be accounted for as separate units of accounting or whether they should be combined with other deliverables and accounted for as a single unit of accounting. For all four of these agreements, we determined that the options did not have stand-alone value because Biogen cannot pursue the development or commercialization of the drugs resulting from these collaborations until it exercises the respective option or options. As such, for each agreement we considered the deliverables to be a single unit of accounting and we are recognizing the upfront payment for each of the agreements over the respective estimated period of our performance. Milestone payments Our collaborations often include contractual milestones, which typically relate to the achievement of pre-specified development, regulatory and commercialization events. These three categories of milestone events reflect the three stages of the life-cycle of our drugs, which we describe in more detail in the following paragraph. Prior to the first stage in the life-cycle of our drugs, we perform a significant amount of work using our proprietary antisense technology to design chemical compounds that interact with specific genes that are good targets for drug discovery. From these research efforts, we hope to identify a development candidate. The designation of a development candidate is the first stage in the life-cycle of our drugs. A development candidate is a chemical compound that has demonstrated the necessary safety and efficacy in preclinical animal studies to warrant further study in humans. During the first step of the development stage, we or our partners study our drugs in IND-enabling studies, which are animal studies intended to support an Investigational New Drug, or IND, application and/or the foreign equivalent. An approved IND allows us or our partners to study our development candidate in humans. If the regulatory agency approves the IND, we or our partners initiate Phase 1 clinical trials in which we typically enroll a small number of healthy volunteers to ensure the development candidate is safe for use in patients. If we or our partners determine that a development candidate is safe based on the Phase 1 data, we or our partners initiate Phase 2 studies that are generally larger scale studies in patients with the primary intent of determining the efficacy of the development candidate. The final step in the development stage is Phase 3 studies to gather the necessary safety and efficacy data to request marketing approval from the Food and Drug Administration, or FDA, and/or foreign equivalents. The Phase 3 studies typically involve large numbers of patients and can take up to several years to complete. If the data gathered during the trials demonstrates acceptable safety and efficacy results, we or our partner will submit an application to the FDA and/or its foreign equivalents for marketing approval. This stage of the drug’s life-cycle is the regulatory stage. If a drug achieves marketing approval, it moves into the commercialization stage, during which our partner will market and sell the drug to patients. Although our partner will ultimately be responsible for marketing and selling the partnered drug, our efforts to discover and develop a drug that is safe, effective and reliable contributes significantly to our partner’s ability to successfully sell the drug. The FDA and its foreign equivalents have the authority to impose significant restrictions on an approved drug through the product label and on advertising, promotional and distribution activities. Therefore, our efforts designing and executing the necessary animal and human studies are critical to obtaining claims in the product label from the regulatory agencies that would allow us or our partner to successfully commercialize our drug. Further, the patent protection afforded our drugs as a result of our initial patent applications and related prosecution activities in the United States and foreign jurisdictions are critical to our partner’s ability to sell our drugs without competition from generic drugs. The potential sales volume of an approved drug is dependent on several factors including the size of the patient population, market penetration of the drug, and the price charged for the drug. Generally, the milestone events contained in our partnership agreements coincide with the progression of our drugs from development, to regulatory approval and then to commercialization. The process of successfully discovering a new development candidate, having it approved and ultimately sold for a profit is highly uncertain. As such, the milestone payments we may earn from our partners involve a significant degree of risk to achieve. Therefore, as a drug progresses through the stages of its life-cycle, the value of the drug generally increases. Development milestones in our partnerships may include the following types of events: 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. Regulatory milestones in our partnerships may include the following types of events: Filing of regulatory applications for marketing approval 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 approval 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 approval from the applicable regulatory agency. Commercialization milestones in our partnerships may include the following types of events: 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. We assess whether a substantive milestone exists at the inception of our agreements. When a substantive milestone is achieved, we recognize revenue related to the milestone payment immediately. For our existing licensing and collaboration agreements in which we are involved in the discovery and/or development of the related drug or provide the partner with access to new technologies we discover, we have determined that the majority of future development, regulatory and commercialization milestones are substantive. For example, we consider most of the milestones associated with our strategic alliance with Biogen substantive because we are using our antisense drug discovery platform to discover and develop new drugs against targets for neurological diseases. We also consider milestones associated with our strategic alliance with Alnylam Pharmaceuticals, Inc. substantive because we provide Alnylam ongoing access to our technology to develop and commercialize RNA interference, or RNAi, therapeutics. In evaluating if a milestone is substantive we consider whether: 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. If any of these conditions are not met, we do not consider the milestone to be substantive and we defer recognition of the milestone payment and recognize it as revenue over our estimated period of performance, if any. Further information about our collaborative arrangements can be found in Note 6, Collaborative Arrangements and Licensing Agreements Licensing and royalty revenue We often enter into agreements to license our proprietary patent rights on an exclusive or non-exclusive basis in exchange for license fees and/or royalties. We generally recognize as revenue immediately those licensing fees and royalties for which we have no significant future performance obligations and are reasonably assured of collecting the resulting receivable. For example, in the first quarter of 2014, we recognized $7.7 million in revenue from Alnylam related to its license of our technology to one of its partners because we had no performance obligations and collectability was reasonably assured. Cash, cash equivalents and short-term investments We consider all liquid investments with maturities of three months or less when we purchase them to be cash equivalents. Our short-term investments have initial maturities of greater than three months from date of purchase. We classify our short-term investments as “available-for-sale” and carry them at fair market value based upon prices for identical or similar items on the last day of the fiscal period. We record unrealized gains and losses as a separate component of comprehensive income (loss) and include net realized gains and losses in gain (loss) on investments. We use the specific identification method to determine the cost of securities sold. We have equity investments in privately- and publicly-held biotechnology companies that we have received as part of a technology license or collaboration agreement. At June 30, 2015 we held ownership interests of less than 20 percent in each of the respective companies. We account for our equity investments in publicly-held companies at fair value and record unrealized gains and losses related to temporary increases and decreases in the stock of these publicly-held companies as a separate component of comprehensive income (loss). We account for equity investments in privately-held companies under the cost method of accounting because we own less than 20 percent and do not have significant influence over their operations. We hold one cost method investment in Atlantic Pharmaceuticals Limited. Realization of our equity position in this company is uncertain. When realization of our investment is uncertain, we record a full valuation allowance. In determining if and when a decrease in market value below our cost in our equity positions is temporary or other-than-temporary, we examine historical trends in the stock price, the financial condition of the company, near term prospects of the company and our current need for cash. If we determine that a decline in value in either a public or private investment is other-than-temporary, we recognize an impairment loss in the period in which the other-than-temporary decline occurs. Inventory valuation We capitalize the costs of raw materials that we purchase for use in producing our drugs because until we use these raw materials they have alternative future uses. We include in inventory raw material costs for drugs that we manufacture for our partners under contractual terms and that we use primarily in our clinical development activities and drug products. We can use each of our raw materials in multiple products and, as a result, each raw material has future economic value independent of the development status of any single drug. For example, if one of our drugs failed, we could use the raw materials for that drug to manufacture our other drugs. We expense these costs when we deliver the drugs to our partners, or as we provide these drugs for our own clinical trials. We reflect our inventory on the balance sheet at the lower of cost or market value under the first-in, first-out method. We review inventory periodically and reduce the carrying value of items we consider to be slow moving or obsolete to their estimated net realizable value. We consider several factors in estimating the net realizable value, including shelf life of raw materials, alternative uses for our drugs and clinical trial materials, and historical write-offs. We did not record any inventory write-offs for the six months ended June 30, 2015 and 2014. Total inventory, which consisted of raw materials, was $6.8 million and $6.3 million as of June 30, 2015 and December 31, 2014, respectively. Research, development and patent expenses Our research and development expenses include wages, benefits, facilities, supplies, external services, clinical trial and manufacturing costs and other expenses that are directly related to our research and development operations. We expense research and development costs as we incur them. When we make payments for research and development services prior to the services being rendered, we record those amounts as prepaid assets on our condensed consolidated balance sheet and we expense them as the services are provided. We capitalize costs consisting principally of outside legal costs and filing fees related to obtaining patents. We amortize patent costs over the useful life of the patent, beginning with the date the United States Patent and Trademark Office, or foreign equivalent, issues the patent. We review our capitalized patent costs regularly to ensure that they include costs for patents and patent applications that have future value. We evaluate patents and patent applications that we are not actively pursuing and write off any associated costs. Long-lived assets We evaluate long-lived assets, which include property, plant and equipment, patent costs, and exclusive licenses acquired from third parties, for impairment on at least a quarterly basis and whenever events or changes in circumstances indicate that we may not be able to recover the carrying amount of such assets. Use of estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Basic and diluted net income (loss) per share We compute basic net income (loss) per share by dividing the net income or loss by the weighted-average number of common shares outstanding during the period. Common stock from the following items impact our common equivalent shares: Dilutive stock options; Unvested restricted stock units; Employee Stock Purchase Plan, or ESPP; 2¾ percent convertible senior notes; and 1 percent convertible senior notes. For the three and six 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 those periods. Diluted common equivalent shares for the three and six 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 Six Months Ended June 30, 2015 Income (Numerator) Shares (Denominator) Per-Share Amount Income available to common shareholders $ 18,931 119,348 $ 0.16 Effect of diluted securities: Shares issuable upon exercise of stock options 4,310 Shares issuable upon restricted stock award issuance 399 Shares issuable related to our ESPP 4 Shares issuable related to our 2¾ percent notes — — Income available to common shareholders, plus assumed conversions $ 18,931 124,061 $ 0.15 For the three and six months ended June 30, 2015, the calculation excludes the 1 percent notes because the effect on diluted earnings per share would be anti-dilutive. For the six months ended June 30, 2015, the calculation excludes the 2¾ percent notes because the effect on diluted earnings per share would be anti-dilutive. For the three and six months ended June 30, 2014 we incurred a net loss, therefore we did not include dilutive common equivalent shares in the computation of diluted net loss per share because the effect would have been anti-dilutive. Consolidation of variable interest entities We identify entities as variable interest entities either: (1) that do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) in which the equity investors lack an essential characteristic of a controlling financial interest. We perform ongoing qualitative assessments of our variable interest entities to determine whether we have a controlling financial interest in the variable interest entity and therefore are the primary beneficiary. As of June 30, 2015 and December 31, 2014, we had collaborative arrangements with two entities, Regulus and Antisense Therapeutics Limited, that we considered to be variable interest entities. We are not the primary beneficiary for any of these entities as we do not have the power to direct the activities that most significantly impact the economic performance of our variable interest entities, the obligation to absorb losses, or the right to receive benefits from our variable interest entities that could potentially be significant to the variable interest entities. As of June 30, 2015, the total carrying value of our investments in variable interest entities was $60.6 million, and was related to our investment in Regulus. Our maximum exposure to loss related to our variable interest entities is limited to the carrying value of our investments. Accumulated other comprehensive income Accumulated other comprehensive income is comprised of unrealized gains and losses on investments, net of taxes, and adjustments we made to reclassify realized gains and losses on investments from other accumulated comprehensive income to our condensed consolidated statement of operations. The following table summarizes changes in accumulated other comprehensive income for the three and six months ended June 30, 2015 and 2014 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Beginning balance accumulated other comprehensive income $ 47,114 $ 29,000 $ 39,747 $ 21,080 Unrealized (losses) gains on securities, net of tax (1) (28,703 ) (4,456 ) (21,336 ) 3,806 Amounts reclassified from accumulated other comprehensive income (2) — 175 — (167 ) Net current period other comprehensive (loss) income (28,703 ) (4,281 ) (21,336 ) 3,639 Ending balance accumulated other comprehensive income $ 18,411 $ 24,719 $ 18,411 $ 24,719 (1) Other comprehensive loss for the three months ended June 30, 2015 includes income tax benefit of $5.1 million, compared to $2.9 million for the same period in 2014. For the six months ended June 30, 2014 other comprehensive income includes income tax expense of $2.5 million. There was no tax expense or benefit for the six months ended June 30, 2015. (2) Included in gain on investments, net on our condensed consolidated statement of operations. Convertible debt We account for convertible debt instruments, including our 1 percent and 2¾ percent notes, that may be settled in cash upon conversion (including partial cash settlement) by separating the liability and equity components of the instruments in a manner that reflects our nonconvertible debt borrowing rate. We determine the carrying amount of the liability component by measuring the fair value of similar debt instruments that do not have the conversion feature. If no similar debt instrument exists, we estimate fair value by using assumptions that market participants would use in pricing a debt instrument, including market interest rates, credit standing, yield curves and volatilities. Determining the fair value of the debt component requires the use of accounting estimates and assumptions. These estimates and assumptions are judgmental in nature and could have a significant impact on the determination of the debt component, and the associated non-cash interest expense. We assign a value to the debt component of our convertible notes equal to the estimated fair value of similar debt instruments without the conversion feature, which resulted in us recording our debt at a discount. We are amortizing the debt discount over the life of the convertible notes as additional non-cash interest expense utilizing the effective interest method. Segment information In 2015, we began operating as two segments, our Isis Core segment, previously referred to as Drug Discovery and Development, and our new segment, Akcea Therapeutics, which includes the operations of our newly-formed and wholly-owned subsidiary, Akcea Therapeutics, Inc. We formed Akcea to develop and commercialize the drugs from our lipid franchise. We provide segment financial information and results for our Isis Core segment and our Akcea Therapeutics segment based on the segregation of revenues and expenses that our chief decision maker reviews to assess operating performance and to make operating decisions. We use judgments and estimates in determining the allocation of shared expenses to the two segments. Stock-based compensation expense We use the Black-Scholes model to estimate the fair value of stock options granted and stock purchase rights under our ESPP. The expected term of stock options granted represents the period of time that we expect them to be outstanding. We estimate the expected term of options granted based on historical exercise patterns. For the six months ended June 30, 2015 and 2014, we used the following weighted-average assumptions in our Black-Scholes calculations: Employee Stock Options: Six Months Ended June 30, 2015 2014 Risk-free interest rate 1.5% 1.6% Dividend yield 0.0% 0.0% Volatility 53.6% 50.6% Expected life 4.5 years 4.6 years ESPP: Six Months Ended June 30, 2015 2014 Risk-free interest rate 0.1% 0.1% Dividend yield 0.0% 0.0% Volatility 56.2% 59.0% Expected life 6 months 6 months We did not grant any stock options or RSUs to the Board of Directors for the six months ended June 30, 2015. The fair value of RSUs is based on the market price of ou |
Investments
Investments | 6 Months Ended |
Jun. 30, 2015 | |
Investments [Abstract] | |
Investments | 3. Investments As of June 30, 2015, we have primarily invested our excess cash in debt instruments of the U.S. Treasury, financial institutions, corporations, and U.S. government agencies with strong credit ratings and an investment grade rating at or above A-1, P-1 or F-1 by Moody’s, Standard & Poor’s, or S&P, or Fitch, respectively. We have established guidelines relative to diversification and maturities that maintain safety and liquidity. We periodically review and modify these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity. The following table summarizes the contract maturity of the available-for-sale securities we held as of June 30, 2015: One year or less 54% After one year but within two years 29% After two years but within three and a half years 17% Total 100% As illustrated above, at June 30, 2015, 83 percent of our available-for-sale securities had a maturity of less than two years. All of our available-for-sale securities are available to us for use in our current operations. As a result, we categorize all of these securities as current assets even though the stated maturity of some individual securities may be one year or more beyond the balance sheet date. At June 30, 2015, we had an ownership interest of less than 20 percent in one private company and two public companies with which we conduct business. The privately-held company is Atlantic Pharmaceuticals Limited and the publicly-traded companies are Antisense Therapeutics Limited and Regulus. We account for equity investments in the privately-held company under the cost method of accounting and we account for equity investments in the publicly-traded companies at fair value. We record unrealized gains and losses as a separate component of comprehensive income (loss) and include net realized gains and losses in gain (loss) on investments. The following is a summary of our investments (in thousands): Gross Unrealized Other- Than- Temporary Impairment Estimated June 30, 2015 Cost Gains Losses Loss Fair Value Available-for-sale securities (1): Corporate debt securities $ 189,487 $ 37 $ (90 ) $ — $ 189,434 Debt securities issued by U.S. government agencies 81,639 5 (11 ) — 81,633 Debt securities issued by states of the United States and political subdivisions of the states (2) 59,835 22 (58 ) — 59,799 Total securities with a maturity of one year or less 330,961 64 (159 ) — 330,866 Corporate debt securities 234,088 52 (848 ) — 233,292 Debt securities issued by U.S. government agencies 28,002 10 (3 ) — 28,009 Debt securities issued by states of the United States and political subdivisions of the states 62,203 32 (189 ) — 62,046 Total securities with a maturity of more than one year 324,293 94 (1,040 ) — 323,347 Total available-for-sale securities $ 655,254 $ 158 $ (1,199 ) $ — $ 654,213 Equity securities: Regulus Therapeutics Inc. $ 12,477 $ 48,127 $ — $ — $ 60,604 Securities included in other current assets 880 — — (880 ) — Total equity securities $ 13,357 $ 48,127 $ — $ (880 ) $ 60,604 Total available-for-sale and equity securities $ 668,611 $ 48,285 $ (1,199 ) $ (880 ) $ 714,817 Gross Unrealized Other- Than- Temporary Impairment Estimated December 31, 2014 Cost Gains Losses Loss Fair Value Available-for-sale securities (1): Corporate debt securities (2) $ 219,856 $ 89 $ (89 ) $ — $ 219,856 Debt securities issued by U.S. government agencies 47,496 7 (27 ) — 47,476 Debt securities issued by the U.S. Treasury (2) 19,008 9 — — 19,017 Debt securities issued by states of the United States and political subdivisions of the states (2) 45,196 19 (53 ) — 45,162 Total securities with a maturity of one year or less 331,556 124 (169 ) — 331,511 Corporate debt securities 152,730 16 (600 ) — 152,146 Debt securities issued by U.S. government agencies 62,530 — (151 ) — 62,379 Debt securities issued by states of the United States and political subdivisions of the states 60,073 32 (234 ) — 59,871 Total securities with a maturity of more than one year 275,333 48 (985 ) — 274,396 Total available-for-sale securities $ 606,889 $ 172 $ (1,154 ) $ — $ 605,907 Equity securities: Regulus Therapeutics Inc. $ 12,477 $ 69,404 $ — $ — $ 81,881 Securities included in other current assets 880 — — (880 ) — Total equity securities $ 13,357 $ 69,404 $ — $ (880 ) $ 81,881 Total available-for-sale and equity securities $ 620,246 $ 69,576 $ (1,154 ) $ (880 ) $ 687,788 (1) Our available-for-sale securities are held at amortized cost. (2) Includes investments classified as cash equivalents on our condensed consolidated balance sheet. Investments we considered to be temporarily impaired at June 30, 2015 were as follows (in thousands): 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 254 $ 296,493 $ (894 ) $ 9,263 $ (44 ) $ 305,756 $ (938 ) Debt securities issued by U.S. government agencies 12 62,116 (14 ) — — 62,116 (14 ) Debt securities issued by states of the United States and political subdivisions of the states 49 51,616 (178 ) 6,229 (69 ) 57,845 (247 ) Total temporarily impaired securities 315 $ 410,225 $ (1,086 ) $ 15,492 $ (113 ) $ 425,717 $ (1,199 ) We believe that the decline in value of these securities is temporary and primarily related to the change in market interest rates since purchase. We believe it is more likely than not that we will be able to hold these securities to maturity. Therefore we anticipate full recovery of their amortized cost basis at maturity. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements We use a three-tier fair value hierarchy to prioritize the inputs used in our fair value measurements. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets, which includes our money market funds and treasury securities classified as available-for-sale securities and our investment in equity securities in publicly-held biotechnology companies; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable, which includes our fixed income securities and commercial paper classified as available-for-sale securities; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions. Our Level 3 investments include our investments in the equity securities of publicly-held biotechnology companies for which we calculated a lack of marketability discount because there were restrictions on when we could trade the securities. We determine the lack of marketability discount by using a Black-Scholes model to value a hypothetical put option to approximate the cost of hedging the stock until the restriction ends. The majority of our securities have been classified as Level 2. We obtain the fair value of our Level 2 investments from our custodian bank or from a professional pricing service. We validate the fair value of our Level 2 investments by understanding the pricing model used by the custodian banks or professional pricing service provider and comparing that fair value to the fair value based on observable market prices. During the six months ended June 30, 2015, there were no transfers between our Level 1 and Level 2 investments. We recognize transfers between levels of the fair value hierarchy on the date of the event or change in circumstances that caused the transfer. We measure the following major security types at fair value on a recurring basis. The following summary breaks down the fair-value hierarchy that we used to value each security at June 30, 2015 and December 31, 2014 (in thousands): At June 30, 2015 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents (1) $ 89,072 $ 89,072 $ — $ — Corporate debt securities (2) 422,726 — 422,726 — Debt securities issued by U.S. government agencies (2) 109,642 — 109,642 — Debt securities issued by states of the United States and political subdivisions of the states (3) 121,845 — 121,845 — Investment in Regulus Therapeutics Inc. 60,604 60,604 — — Total $ 803,889 $ 149,676 $ 654,213 $ — At December 31, 2014 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents (1) $ 104,680 $ 104,680 $ — $ — Corporate debt securities (4) 372,002 — 372,002 — Debt securities issued by U.S. government agencies (2) 109,855 — 109,855 — Debt securities issued by the U.S. Treasury (5) 19,017 19,017 — — Debt securities issued by states of the United States and political subdivisions of the states (6) 105,033 — 105,033 — Investment in Regulus Therapeutics Inc. 81,881 — — 81,881 Total $ 792,468 $ 123,697 $ 586,890 $ 81,881 (1) Included in cash and cash equivalents on our condensed consolidated balance sheet. (2) Included in short-term investments on our condensed consolidated balance sheet. (3) $18.8 million included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. (4) $0.8 million included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. (5) $10 million included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. (6) $9.3 million included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. In November 2014, Regulus completed a public offering. As part of the offering, we sold shares of Regulus' common stock and became subject to trading restrictions on our remaining shares through January 2015. Therefore, at December 31, 2014, we recorded a lack of marketability discount on our investment in Regulus and classified it as a Level 3 investment. At the end of January 2015, we reclassified our investment in Regulus to a Level 1 investment because the contractual trading restrictions on the shares we own ended. The following is a reconciliation of our investments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2015 (in thousands): Beginning balance of Level 3 investments (at December 31, 2014) $ 81,881 Total gain included in accumulated other comprehensive income (loss) 22,377 Transfers out of Level 3 investments (104,258 ) Ending balance of Level 3 investments (at June 30, 2015) $ — Other Fair Value Disclosures Our 1 percent and 2¾ percent notes had a fair value of $538.4 million and $229.9 million, respectively at June 30, 2015. We determine the fair value of our notes based on quoted market prices for these notes, which are Level 2 measurements. |
Line of Credit Arrangement
Line of Credit Arrangement | 6 Months Ended |
Jun. 30, 2015 | |
Line of Credit Arrangement [Abstract] | |
Line of Credit Arrangement | 5. Line of Credit Arrangement In June 2015, we entered into a five-year revolving line of credit agreement with Morgan Stanley Private Bank, National Association, or Morgan Stanley. Under the credit agreement, we can borrow up to a maximum of $20 million of revolving credit for general working capital purposes. Under the credit agreement interest is payable monthly in arrears on the outstanding principal at a rate based on our option of: (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 (iii) a fixed rate equal to the LIBOR swap rate during the period of the loan. Additionally, we will pay 0.25 percent per annum, payable quarterly in arrears, for any amount unused under the credit facility beginning after June 2016. We did not have any outstanding borrowings under the credit facility as of June 30, 2015. The credit agreement includes customary affirmative and negative covenants and restrictions. We were in compliance with all covenants of the credit agreement as of June 30, 2015. |
Collaborative Arrangements and
Collaborative Arrangements and Licensing Agreements | 6 Months Ended |
Jun. 30, 2015 | |
Collaborative Arrangements and Licensing Agreements [Abstract] | |
Collaborative Arrangements and Licensing Agreements | 6. Collaborative Arrangements and Licensing Agreements Traditional Pharmaceutical Alliances and Licensing AstraZeneca Oncology Collaboration In December 2012, we entered into a collaboration agreement with AstraZeneca to discover and develop antisense drugs against five cancer targets. As part of the agreement, we granted AstraZeneca an exclusive license to develop and commercialize ISIS-STAT3-2.5 Rx Rx Rx Rx Rx Rx Rx Rx Rx Rx Under the terms of the agreement, we received $31 million comprised of a $25 million upfront payment we received in December 2012 and a $6 million payment we received in June 2013. We recorded revenue of $11.5 million upon receipt of these payments and we have amortized $11.9 million into revenue as we have performed development activities under this collaboration. We are recognizing the remaining $7.6 million related to the option to license three drugs under the research program through December 2016. In October 2014, we and AstraZeneca amended our agreement for ISIS-STAT3-2.5 Rx Rx We are eligible to receive milestone payments and license fees from AstraZeneca as programs advance in development. In addition, we are eligible to receive tiered royalties up to the low to mid-teens on any product sales of drugs resulting from these programs. If AstraZeneca successfully develops ISIS-STAT3-2.5 Rx Rx In August 2013, we added another collaboration program with AstraZeneca to discover and develop an antisense drug against an undisclosed target. AstraZeneca has the option to license a drug resulting from this collaboration program. If AstraZeneca exercises its option, it will be responsible for all further global development, regulatory and commercialization activities for such drug. We received a $0.8 million upfront payment, which we are amortizing through December 2016. We are eligible to receive license fees and substantive milestone payments of $163.2 million, including up to $45.3 million for the achievement of research and development milestones and up to $105 million for regulatory milestones. From inception through June 2015, we have received $0.8 million in payments under this collaboration program. Cardiometabolic and Renal Diseases Collaboration In July 2015, we and AstraZeneca entered into a separate collaboration agreement to discover and develop antisense therapies for cardiovascular, metabolic and renal diseases. We and AstraZeneca will also conduct research to optimize the use of our antisense technology in the kidney and other tissues. AstraZeneca has the option to license a drug for each target advanced under this research collaboration. If AstraZeneca exercises its option, it will be responsible for all further global development, regulatory and commercialization activities for such drug. Under the terms of the agreement, we will receive a $65 million upfront payment, which we expect to amortize through July 2021 beginning in the third quarter of 2015. We are eligible to receive license fees and substantive milestone payments of up to more than $4 billion, including up to $1.1 billion for the achievement of development milestones and up to $2.9 billion for regulatory milestones. We will earn the next milestone payment of up to $25 million if we and AstraZeneca advance our first drug under this collaboration. In addition, we are eligible to receive tiered royalties up to the low teens on sales from any product that AstraZeneca successfully commercializes under this collaboration agreement. This transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvement Act. Each of our agreements with AstraZeneca will continue until the expiration of all payment obligations under the applicable agreement. In addition, the agreement, or any program under the applicable agreement, may terminate early under the following situations: 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. During the three and six months ended June 30, 2015, we earned revenue of $0.7 million and $1.5 million, respectively, from our relationship with AstraZeneca. In comparison, we earned $15.6 million and $19.1 million for the same periods in 2014. Our condensed consolidated balance sheet at June 30, 2015 included deferred revenue of $3.2 million related to our relationship with AstraZeneca. Bayer In May 2015, we entered into an exclusive license agreement with Bayer to develop and commercialize ISIS-FXI Rx Rx Under the terms of the agreement, we are eligible to receive $155 million in near-term payments, including a $100 million upfront payment we received in the second quarter of 2015 and a $55 million milestone payment that we are eligible to receive upon advancement of the program following a Phase 2 study in patients with compromised kidney function. We recorded revenue of $91.2 million related to the license for ISIS-FXI Rx Rx Over the term of the agreement, we are eligible to receive up to $375 million in license fees, substantive milestone payments and other payments, including up to $120 million for the achievement of development milestones and up to $110 million for the achievement of commercialization milestones. In addition, we are eligible to receive tiered royalties in the low to high 20 percent range on gross margins of ISIS-FXI Rx Rx Our agreement with Bayer will continue until the expiration of all payment obligations under the agreement. In addition, the agreement, or any program under the agreement, may terminate early under the following situations: 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. During the three and six months ended June 30, 2015, we earned revenue of $91.5 million from our relationship with Bayer, which represented 76 percent and 50 percent, respectively, of our total revenue for those periods. Our condensed consolidated balance sheet at June 30, 2015 included deferred revenue of $8.5 million related to our relationship with Bayer. Biogen We have established four strategic collaborations with Biogen that broaden and expand our severe and rare disease franchise for neurological disorders. ISIS-SMN Rx In January 2012, we entered into a collaboration agreement with Biogen to develop and commercialize ISIS-SMN Rx Rx Rx Rx Rx Rx Rx We received an upfront payment of $29 million, which we are amortizing through February 2017. We are also eligible to receive a license fee, milestone payments and tiered royalties up to the mid-teens on any product sales of ISIS-SMN Rx Rx Rx Rx Rx Rx ISIS-DMPK-2.5 Rx In June 2012, we and Biogen entered into a second and separate collaboration agreement to develop and commercialize a novel antisense drug, ISIS-DMPK-2.5 Rx, Rx Rx Rx Rx Rx Neurology In December 2012, we and Biogen entered into a third and separate collaboration agreement to develop and commercialize novel antisense drugs to three targets to treat neurological or neuromuscular diseases. We are responsible for the development of each of the drugs through the completion of the initial Phase 2 clinical study for such drug. Biogen has the option to license a drug from each of the three programs through the completion of the first Phase 2 study for each program. If Biogen exercises its option for a drug, it will assume all further global development, regulatory and commercialization responsibilities for that drug. Under the terms of the agreement, we received an upfront payment of $30 million, which we are amortizing through December 2020. Over the term of the collaboration, we are eligible to receive up to $259 million in a license fee and substantive milestone payments per program. We are eligible to receive up to $59 million in development milestone payments to support research and development of each program, including amounts related to the cost of clinical trials. We are also eligible to receive up to $130 million in milestone payments per program if Biogen achieves pre-specified regulatory milestones. In addition, we are eligible to receive tiered royalties up to the mid-teens on any product sales of drugs resulting from each of the three programs. In February 2015, we earned a $10 million milestone payment when we initiated an IND-enabling toxicology study of ISIS-BIIB4 Rx, Strategic Neurology In September 2013, we and Biogen entered into a fourth and separate collaboration agreement, which is a long-term strategic relationship focused on applying antisense technology to advance the treatment of neurological diseases. As part of the collaboration, Biogen gained exclusive rights to the use of our antisense technology to develop therapies for neurological diseases and has the option to license drugs resulting from this collaboration. The exclusivity for neurological diseases will last through September 2019, and may be extended for any drug development programs being pursued under the collaboration. We will usually be responsible for drug discovery and early development of antisense drugs and Biogen will have the option to license antisense drugs after Phase 2 proof of concept. If Biogen exercises its option for a drug, it will assume all further global development, regulatory and commercialization responsibilities for that drug. Biogen will be responsible for all of the drug discovery and development activities for drugs using other modalities. Under the terms of the agreement, we received an upfront payment of $100 million and are eligible to receive milestone payments, license fees and royalty payments for all drugs developed through this collaboration, with the specific amounts dependent upon the modality of the molecule advanced by Biogen. If we have a change of control during the first six years of the collaboration, we may be required to refund Biogen a portion of the $100 million upfront payment, with the amount of the potential refund decreasing ratably as we progress through the initial six year term of the collaboration. We are amortizing the $100 million upfront payment through September 2019. Because the amortization period for the upfront payment will never be less than the initial six year term of the collaboration, the amount of revenue we recognize from the upfront payment will never exceed the amount that Biogen could potentially require us to refund. For each antisense molecule that is chosen for drug discovery and development under this collaboration, we are eligible to receive up to approximately $260 million in a license fee and substantive milestone payments. We are eligible to receive up to approximately $60 million for the achievement of research and development milestones, including amounts related to the cost of clinical trials, and up to $130 million for the achievement of regulatory milestones. In addition, we are eligible to receive tiered royalties up to the mid-teens on any product sales of antisense drugs developed under this collaboration. If other modalities are chosen, such as small molecules or monoclonal antibodies, we are eligible to receive up to $90 million in substantive milestone payments, including up to $35 million for the achievement of research and development milestones and up to $55 million for the achievement of regulatory milestones. In addition, we are eligible to receive tiered single-digit royalties on any product sales of drugs using non-antisense modalities developed under this collaboration. From inception through June 2015, we have received $135 million in payments under this collaboration. In April 2015, we earned a $10 million milestone payment for validating a fourth target under this collaboration. We will earn the next milestone payment of up to $10 million if we choose another target to advance under this collaboration. Each of our agreements with Biogen will continue until the earlier of the date all of Biogen's options to obtain the exclusive licenses under the applicable agreement expire unexercised or, if Biogen exercises its option, until the expiration of all payment obligations under the applicable agreement. In addition, each agreement, or any program under an agreement, may terminate early under the following situations: 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. During the three and six months ended June 30, 2015, we earned revenue of $17.8 million and $57.0 million, respectively, from our relationship with Biogen, which represented 15 percent and 31 percent, respectively, of our total revenue for those periods. In comparison, we earned revenue of $34.5 million and $44.7 million for the same periods in 2014. Our condensed consolidated balance sheet at June 30, 2015 included deferred revenue of $105.0 million related to our relationship with Biogen. GSK In March 2010, we entered into a strategic alliance with GSK using our antisense drug discovery platform to seek out and develop new drugs against targets for rare and serious diseases, including infectious diseases and some conditions causing blindness. Our strategic alliance currently includes five drugs in development. GSK has the exclusive option to license drugs resulting from this alliance at Phase 2 proof-of-concept for a license fee. If GSK exercises its exclusive option for any drugs resulting from this alliance, it will be responsible for all further global development, regulatory and commercialization activities for such drug. Under the terms of the agreement, we received a $35 million upfront payment and in May 2011 we received a $3 million payment when we and GSK expanded the collaboration. In October 2012, we and GSK amended the original agreement to reflect an accelerated clinical development plan for ISIS-TTR Rx. Rx Rx Rx In addition to ISIS-TTR Rx Rx , Rx Rx, Rx Under our agreement, if GSK successfully develops all five drugs for one or more indications and achieves pre-agreed sales targets, we could receive license fees and substantive milestone payments of more than $1.3 billion, including up to $220.5 million for the achievement of development milestones, up to $483.5 million for the achievement of regulatory milestones and up to $428 million for the achievement of commercialization milestones. Through June 2015, we have received $129.5 million in payments under this strategic alliance with GSK. We will earn the next milestone payment of $5 million if we further advance ISIS-GSK4 Rx Our alliance with GSK will continue until the earlier of the date that all of GSK's options to obtain the exclusive licenses under the agreement expire unexercised or, if GSK exercises its option, until the expiration of all payment obligations under the agreement. In addition, the agreement, or any program under the agreement, may terminate early under the following situations: GSK may terminate any program, other than the ISIS-TTR Rx GSK may terminate the ISIS-TTR Rx 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. During the three and six months ended June 30, 2015, we earned revenue of $4.3 million and $20.8 million, respectively, from our relationship with GSK, which represented four percent and 11 percent, respectively, of our total revenue for those periods. In comparison, we earned revenue of $3.5 million and $6.8 million for the same periods in 2014. Our condensed consolidated balance sheet at June 30, 2015 included deferred revenue of $6.2 million related to our relationship with GSK. Roche In April 2013, we formed an alliance with Hoffman-La Roche Inc. and F. Hoffmann-La Roche Ltd., collectively Roche, to develop treatments for Huntington's disease based on our antisense technology. Roche has the option to license the drugs from us through the completion of the first Phase 1 trial. Prior to option exercise, we are responsible for the discovery and development of an antisense drug targeting huntingtin, or HTT, protein. If Roche exercises its option, it will be responsible for global development, regulatory and commercialization activities for any drug arising out of the collaboration. We are also working collaboratively with Roche on the discovery of an antisense drug utilizing Roche's "brain shuttle" program. Under the terms of the agreement, we received an upfront payment of $30 million in April 2013, which we are amortizing through April 2017. We are eligible to receive up to $362 million in a license fee and substantive milestone payments including up to $67 million for the achievement of development milestones, up to $170 million for the achievement of regulatory milestones and up to $80 million for the achievement of commercialization milestone payments. In addition, we are eligible to receive up to $136.5 million in milestone payments for each additional drug successfully developed and up to $50 million in commercial milestones if a drug using Roche's proprietary brain shuttle technology is successfully commercialized. We are also eligible to receive tiered royalties up to the mid-teens on any product sales of drugs resulting from this alliance. Through June 2015, we have received $30 million in payments under this strategic alliance with Roche, not including the $22 million milestone payment we earned in July 2015 when we initiated a Phase 1 trial for ISIS-HTT Rx Rx Our alliance with Roche will continue until the earlier of the date Roche's option to obtain the exclusive license under the agreement expires unexercised or, if Roche exercises its option, until the expiration of all payment obligations under the agreement. In addition, the agreement may terminate early under the following situations: Roche may terminate the agreement at any time by providing written notice to us; 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; and Either we or Roche may terminate the brain shuttle program if at least one development candidate is not designated under such program by a mutually agreed deadline. During the three and six months ended June 30, 2015, we earned revenue of $2.4 million and $4.8 million, respectively, from our relationship with Roche. In comparison, we earned $2.4 million and $4.4 million for the same periods in 2014. Our condensed consolidated balance sheet at June 30, 2015 included deferred revenue of $12.9 million related to our relationship with Roche. |
Segment Information and Concent
Segment Information and Concentration of Business Risk | 6 Months Ended |
Jun. 30, 2015 | |
Segment Information and Concentration of Business Risk [Abstract] | |
Segment Information and Concentration of Business Risk | 7. Segment Information and Concentration of Business Risk In 2015, we began reporting our financial results in two reportable segments, Isis Core, previously referred to as Drug Discovery and Development, and Akcea Therapeutics, our new wholly owned subsidiary. Segment income (loss) from operations includes revenue less operating expenses attributable to each segment. In our Isis Core segment we are exploiting a novel drug discovery platform we created to generate a broad pipeline of first-in-class or best-in-class drugs for us and our partners. Our Isis Core segment generates revenue from a multifaceted partnering strategy. We established Akcea to develop and commercialize the drugs from our lipid franchise. Moving our lipid drugs into a company that we own and control ensures that our core focus at Isis remains on innovation while allowing us to maintain control over and retain more value from our lipid drugs. To date, Akcea has not earned any revenue. The following is our segment information for the three and six months ended June 30, 2015 (in thousands). Three Months Ended June 30, 2015 Isis Core Akcea Therapeutics Total Revenue: Research and development $ 119,658 $ — $ 119,658 Licensing and royalty 770 — 770 Total segment revenue $ 120,428 $ — $ 120,428 Income (loss) from operations $ 53,588 $ (8,942 ) $ 44,646 Six Months Ended June 30, 2015 Isis Core Akcea Therapeutics Total Revenue: Research and development $ 181,551 $ — $ 181,551 Licensing and royalty 1,461 — 1,461 Total segment revenue $ 183,012 $ — $ 183,012 Income (loss) from operations $ 51,357 $ (16,040 ) $ 35,317 The following is our segment information for the three and six months ended June 30, 2014 (in thousands) revised for comparative purposes to show operating costs for Akcea-related projects in 2014: Three Months Ended June 30, 2014 Isis Core Akcea Therapeutics Total Revenue: Research and development $ 56,628 $ — $ 56,628 Licensing and royalty 448 — 448 Total segment revenue $ 57,076 $ — $ 57,076 Loss from operations $ (1,042 ) $ (5,608 ) $ (6,650 ) Six Months Ended June 30, 2014 Isis Core Akcea Therapeutics Total Revenue: Research and development $ 76,177 $ — $ 76,177 Licensing and royalty 9,060 — 9,060 Total segment revenue $ 85,237 $ — $ 85,237 Loss from operations $ (26,653 ) $ (9,664 ) $ (36,317 ) We have historically funded our operations from collaborations with corporate partners and a relatively small number of partners have accounted for a significant percentage of our revenue. Revenue from significant partners, which is defined as ten percent or more of our total revenue, was as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Partner A 76 % 0 % 50 % 0 % Partner B 15 % 60 % 31 % 52 % Partner C 4 % 6 % 11 % 8 % Partner D 1 % 27 % 1 % 22 % Contracts receivable from three significant partners comprised approximately 100 percent and 99 percent of our contract receivables at June 30, 2015 and December 31, 2014, respectively. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Event | |
Subsequent Event | 8. Subsequent Event In July 2015, we sold approximately 2.7 million shares of Regulus’ common stock for total proceeds of $25.5 million, resulting in a $20.2 million gain, which we will recognize in the third quarter of 2015. We remain a significant shareholder of Regulus’ common stock. |
Significant Accounting Polici16
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Significant Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition We generally recognize revenue when we have satisfied all contractual obligations and are reasonably assured of collecting the resulting receivable. We are often entitled to bill our customers and receive payment from our customers in advance of recognizing the revenue. In the instances in which we have received payment from our customers in advance of recognizing revenue, we include the amounts in deferred revenue on our consolidated condensed balance sheet. Arrangements with multiple deliverables Our collaboration agreements typically contain multiple elements, or deliverables, including technology licenses or options to obtain technology licenses, research and development services, and in certain cases manufacturing services, and we allocate the consideration to each unit of accounting based on the relative selling price of each deliverable. Identifying deliverables and units of accounting We evaluate the deliverables in our collaboration agreements to determine whether they meet the criteria to be accounted for as separate units of accounting or whether they should be combined with other deliverables and accounted for as a single unit of accounting. When the delivered items in an arrangement have "stand-alone value" to our customer, we account for the deliverables as separate units of accounting. For example, in May 2015, we entered into an exclusive license agreement with Bayer to develop and commercialize ISIS-FXI Rx Rx Rx Rx The exclusive license we granted to Bayer to develop and commercialize ISIS-FXI Rx The development services we agreed to perform for ISIS-FXI Rx The initial supply of API. We determined that each of these three units of accounting have stand-alone value. The exclusive license we granted to Bayer has stand-alone value because it is an exclusive license that gives Bayer the right to develop ISIS-FXI Rx Measurement and allocation of arrangement consideration Our collaborations may provide for various types of payments to us including upfront payments, funding of research and development, milestone payments, licensing fees, profit sharing and royalties on product sales. We initially allocate the amount of consideration that is fixed and determinable at the time the agreement is entered into and exclude contingent consideration. We allocate the consideration to each unit of accounting based on the relative selling price of each deliverable. Delivered items have stand-alone value if they are sold separately by any vendor or the customer could resell the delivered items on a stand-alone basis. We use the following hierarchy of values to estimate the selling price of each deliverable: (i) vendor-specific objective evidence of fair value; (ii) third-party evidence of selling price; and (iii) best estimate of selling price, or BESP. The BESP reflects our best estimate of what the selling price would be if we regularly sold the deliverable on a stand-alone basis. We recognize the revenue allocated to each unit of accounting as we deliver the related goods or services. If we determine that we should treat certain deliverables as a single unit of accounting, then we recognize the revenue ratably over our estimated period of performance. We determined that the allocable arrangement consideration for the Bayer collaboration was $100 million and we allocated it based on the relative BESP of each unit of accounting. We engaged a third party, independent valuation expert to assist us with determining BESP. We estimated the selling price of the license granted for ISIS-FXI Rx Rx Estimated future product sales; Estimated royalties on future product sales; Contractual milestone payments; Expenses we expect to incur; Income taxes; and We estimated the selling price of the ongoing development services by using our internal estimates of the cost to perform the specific services and estimates of expected cash outflows to third parties for services and supplies over the expected period that we will perform the development services. The significant inputs we used to determine the selling price of the ongoing development services included: 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. We determine the selling price of our API consistently for all of our partnerships. On an annual basis, we calculate our fully absorbed cost to manufacture API. We then determine the unit price we will charge our partners by dividing our fully absorbed costs by the quantity of API we expect to produce during the year. For purposes of determining the BESP of the services we will perform and the API in our Bayer transaction, we were required to include a markup for a reasonable profit margin. Based on the units of accounting under the agreement, we allocated the $100 million upfront payment from Bayer as follows: $91.2 million to the ISIS-FXI Rx $4.3 million for ongoing development services; and $4.5 Assuming a constant selling price for the other elements in the arrangement, if there was an assumed ten percent increase or decrease in the estimated selling price of the ISIS-FXI Rx Rx Timing of revenue recognition We recognize revenue as we deliver each item under the arrangement and the related revenue is realizable and earned. We recognize revenue as we deliver each item under the arrangement. For example, we recognized revenue for the exclusive license we granted Bayer for ISIS-FXI Rx The following are the periods over which we are recognizing revenue for each of our units of accounting under our Bayer agreement: We recognized the portion of the consideration attributed to the ISIS-FXI Rx Rx We will recognize the amount attributed to the API supply when we deliver it to Bayer. Multiple agreements From time to time, we may enter into separate agreements at or near the same time with the same customer. We evaluate such agreements to determine whether they should be accounted for individually as distinct arrangements or whether the separate agreements are, in substance, a single multiple element arrangement. We evaluate whether the negotiations are conducted jointly as part of a single negotiation, whether the deliverables are interrelated or interdependent, whether fees in one arrangement are tied to performance in another arrangement, and whether elements in one arrangement are essential to another arrangement. Our evaluation involves significant judgment to determine whether a group of agreements might be so closely related that they are, in effect, part of a single arrangement. For example, since early 2012, we have entered into four collaboration agreements with Biogen: In January 2012, we entered into a collaboration agreement with Biogen to develop and commercialize ISIS-SMN Rx Rx 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 $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 neurological 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. All four of these collaboration agreements give Biogen the option to license one or more drugs resulting from the specific collaboration. If Biogen exercises an option, it will pay us a license fee and will assume future development, regulatory and commercialization responsibilities for the licensed drug. We are also eligible to receive milestone payments associated with the research and/or development of the drugs prior to licensing, milestone payments if Biogen achieves pre-specified regulatory milestones, and royalties on any product sales of drugs resulting from these collaborations. We evaluated all four of the Biogen agreements to determine whether we should account for them as separate agreements. We determined that we should account for the agreements separately because we conducted the negotiations independently of one another, each agreement focuses on different drugs, there are no interrelated or interdependent deliverables, there are no provisions in any of these agreements that are essential to the other agreement, and the payment terms and fees under each agreement are independent of each other. We also evaluated the deliverables in each of these agreements to determine whether they met the criteria to be accounted for as separate units of accounting or whether they should be combined with other deliverables and accounted for as a single unit of accounting. For all four of these agreements, we determined that the options did not have stand-alone value because Biogen cannot pursue the development or commercialization of the drugs resulting from these collaborations until it exercises the respective option or options. As such, for each agreement we considered the deliverables to be a single unit of accounting and we are recognizing the upfront payment for each of the agreements over the respective estimated period of our performance. Milestone payments Our collaborations often include contractual milestones, which typically relate to the achievement of pre-specified development, regulatory and commercialization events. These three categories of milestone events reflect the three stages of the life-cycle of our drugs, which we describe in more detail in the following paragraph. Prior to the first stage in the life-cycle of our drugs, we perform a significant amount of work using our proprietary antisense technology to design chemical compounds that interact with specific genes that are good targets for drug discovery. From these research efforts, we hope to identify a development candidate. The designation of a development candidate is the first stage in the life-cycle of our drugs. A development candidate is a chemical compound that has demonstrated the necessary safety and efficacy in preclinical animal studies to warrant further study in humans. During the first step of the development stage, we or our partners study our drugs in IND-enabling studies, which are animal studies intended to support an Investigational New Drug, or IND, application and/or the foreign equivalent. An approved IND allows us or our partners to study our development candidate in humans. If the regulatory agency approves the IND, we or our partners initiate Phase 1 clinical trials in which we typically enroll a small number of healthy volunteers to ensure the development candidate is safe for use in patients. If we or our partners determine that a development candidate is safe based on the Phase 1 data, we or our partners initiate Phase 2 studies that are generally larger scale studies in patients with the primary intent of determining the efficacy of the development candidate. The final step in the development stage is Phase 3 studies to gather the necessary safety and efficacy data to request marketing approval from the Food and Drug Administration, or FDA, and/or foreign equivalents. The Phase 3 studies typically involve large numbers of patients and can take up to several years to complete. If the data gathered during the trials demonstrates acceptable safety and efficacy results, we or our partner will submit an application to the FDA and/or its foreign equivalents for marketing approval. This stage of the drug’s life-cycle is the regulatory stage. If a drug achieves marketing approval, it moves into the commercialization stage, during which our partner will market and sell the drug to patients. Although our partner will ultimately be responsible for marketing and selling the partnered drug, our efforts to discover and develop a drug that is safe, effective and reliable contributes significantly to our partner’s ability to successfully sell the drug. The FDA and its foreign equivalents have the authority to impose significant restrictions on an approved drug through the product label and on advertising, promotional and distribution activities. Therefore, our efforts designing and executing the necessary animal and human studies are critical to obtaining claims in the product label from the regulatory agencies that would allow us or our partner to successfully commercialize our drug. Further, the patent protection afforded our drugs as a result of our initial patent applications and related prosecution activities in the United States and foreign jurisdictions are critical to our partner’s ability to sell our drugs without competition from generic drugs. The potential sales volume of an approved drug is dependent on several factors including the size of the patient population, market penetration of the drug, and the price charged for the drug. Generally, the milestone events contained in our partnership agreements coincide with the progression of our drugs from development, to regulatory approval and then to commercialization. The process of successfully discovering a new development candidate, having it approved and ultimately sold for a profit is highly uncertain. As such, the milestone payments we may earn from our partners involve a significant degree of risk to achieve. Therefore, as a drug progresses through the stages of its life-cycle, the value of the drug generally increases. Development milestones in our partnerships may include the following types of events: 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. Regulatory milestones in our partnerships may include the following types of events: Filing of regulatory applications for marketing approval 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 approval 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 approval from the applicable regulatory agency. Commercialization milestones in our partnerships may include the following types of events: 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. We assess whether a substantive milestone exists at the inception of our agreements. When a substantive milestone is achieved, we recognize revenue related to the milestone payment immediately. For our existing licensing and collaboration agreements in which we are involved in the discovery and/or development of the related drug or provide the partner with access to new technologies we discover, we have determined that the majority of future development, regulatory and commercialization milestones are substantive. For example, we consider most of the milestones associated with our strategic alliance with Biogen substantive because we are using our antisense drug discovery platform to discover and develop new drugs against targets for neurological diseases. We also consider milestones associated with our strategic alliance with Alnylam Pharmaceuticals, Inc. substantive because we provide Alnylam ongoing access to our technology to develop and commercialize RNA interference, or RNAi, therapeutics. In evaluating if a milestone is substantive we consider whether: 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. If any of these conditions are not met, we do not consider the milestone to be substantive and we defer recognition of the milestone payment and recognize it as revenue over our estimated period of performance, if any. Further information about our collaborative arrangements can be found in Note 6, Collaborative Arrangements and Licensing Agreements Licensing and royalty revenue We often enter into agreements to license our proprietary patent rights on an exclusive or non-exclusive basis in exchange for license fees and/or royalties. We generally recognize as revenue immediately those licensing fees and royalties for which we have no significant future performance obligations and are reasonably assured of collecting the resulting receivable. For example, in the first quarter of 2014, we recognized $7.7 million in revenue from Alnylam related to its license of our technology to one of its partners because we had no performance obligations and collectability was reasonably assured. |
Cash, cash equivalents and short-term investments | Cash, cash equivalents and short-term investments We consider all liquid investments with maturities of three months or less when we purchase them to be cash equivalents. Our short-term investments have initial maturities of greater than three months from date of purchase. We classify our short-term investments as “available-for-sale” and carry them at fair market value based upon prices for identical or similar items on the last day of the fiscal period. We record unrealized gains and losses as a separate component of comprehensive income (loss) and include net realized gains and losses in gain (loss) on investments. We use the specific identification method to determine the cost of securities sold. We have equity investments in privately- and publicly-held biotechnology companies that we have received as part of a technology license or collaboration agreement. At June 30, 2015 we held ownership interests of less than 20 percent in each of the respective companies. We account for our equity investments in publicly-held companies at fair value and record unrealized gains and losses related to temporary increases and decreases in the stock of these publicly-held companies as a separate component of comprehensive income (loss). We account for equity investments in privately-held companies under the cost method of accounting because we own less than 20 percent and do not have significant influence over their operations. We hold one cost method investment in Atlantic Pharmaceuticals Limited. Realization of our equity position in this company is uncertain. When realization of our investment is uncertain, we record a full valuation allowance. In determining if and when a decrease in market value below our cost in our equity positions is temporary or other-than-temporary, we examine historical trends in the stock price, the financial condition of the company, near term prospects of the company and our current need for cash. If we determine that a decline in value in either a public or private investment is other-than-temporary, we recognize an impairment loss in the period in which the other-than-temporary decline occurs. |
Inventory valuation | Inventory valuation We capitalize the costs of raw materials that we purchase for use in producing our drugs because until we use these raw materials they have alternative future uses. We include in inventory raw material costs for drugs that we manufacture for our partners under contractual terms and that we use primarily in our clinical development activities and drug products. We can use each of our raw materials in multiple products and, as a result, each raw material has future economic value independent of the development status of any single drug. For example, if one of our drugs failed, we could use the raw materials for that drug to manufacture our other drugs. We expense these costs when we deliver the drugs to our partners, or as we provide these drugs for our own clinical trials. We reflect our inventory on the balance sheet at the lower of cost or market value under the first-in, first-out method. We review inventory periodically and reduce the carrying value of items we consider to be slow moving or obsolete to their estimated net realizable value. We consider several factors in estimating the net realizable value, including shelf life of raw materials, alternative uses for our drugs and clinical trial materials, and historical write-offs. We did not record any inventory write-offs for the six months ended June 30, 2015 and 2014. Total inventory, which consisted of raw materials, was $6.8 million and $6.3 million as of June 30, 2015 and December 31, 2014, respectively. |
Research, development and patent expenses | Research, development and patent expenses Our research and development expenses include wages, benefits, facilities, supplies, external services, clinical trial and manufacturing costs and other expenses that are directly related to our research and development operations. We expense research and development costs as we incur them. When we make payments for research and development services prior to the services being rendered, we record those amounts as prepaid assets on our condensed consolidated balance sheet and we expense them as the services are provided. We capitalize costs consisting principally of outside legal costs and filing fees related to obtaining patents. We amortize patent costs over the useful life of the patent, beginning with the date the United States Patent and Trademark Office, or foreign equivalent, issues the patent. We review our capitalized patent costs regularly to ensure that they include costs for patents and patent applications that have future value. We evaluate patents and patent applications that we are not actively pursuing and write off any associated costs. |
Long-lived assets | Long-lived assets We evaluate long-lived assets, which include property, plant and equipment, patent costs, and exclusive licenses acquired from third parties, for impairment on at least a quarterly basis and whenever events or changes in circumstances indicate that we may not be able to recover the carrying amount of such assets. |
Use of estimates | Use of estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates. |
Basic and diluted net income (loss) per share | Basic and diluted net income (loss) per share We compute basic net income (loss) per share by dividing the net income or loss by the weighted-average number of common shares outstanding during the period. Common stock from the following items impact our common equivalent shares: Dilutive stock options; Unvested restricted stock units; Employee Stock Purchase Plan, or ESPP; 2¾ percent convertible senior notes; and 1 percent convertible senior notes. For the three and six months ended June 30, 2015, the calculation excludes the 1 percent notes because the effect on diluted earnings per share would be anti-dilutive. For the six months ended June 30, 2015, the calculation excludes the 2¾ percent notes because the effect on diluted earnings per share would be anti-dilutive. For the three and six months ended June 30, 2014 we incurred a net loss, therefore we did not include dilutive common equivalent shares in the computation of diluted net loss per share because the effect would have been anti-dilutive. |
Consolidation of variable interest entities | Consolidation of variable interest entities We identify entities as variable interest entities either: (1) that do not have sufficient equity investment at risk to permit the entity to finance its activities without additional subordinated financial support, or (2) in which the equity investors lack an essential characteristic of a controlling financial interest. We perform ongoing qualitative assessments of our variable interest entities to determine whether we have a controlling financial interest in the variable interest entity and therefore are the primary beneficiary. As of June 30, 2015 and December 31, 2014, we had collaborative arrangements with two entities, Regulus and Antisense Therapeutics Limited, that we considered to be variable interest entities. We are not the primary beneficiary for any of these entities as we do not have the power to direct the activities that most significantly impact the economic performance of our variable interest entities, the obligation to absorb losses, or the right to receive benefits from our variable interest entities that could potentially be significant to the variable interest entities. As of June 30, 2015, the total carrying value of our investments in variable interest entities was $60.6 million, and was related to our investment in Regulus. Our maximum exposure to loss related to our variable interest entities is limited to the carrying value of our investments. |
Accumulated other comprehensive income | Accumulated other comprehensive income Accumulated other comprehensive income is comprised of unrealized gains and losses on investments, net of taxes, and adjustments we made to reclassify realized gains and losses on investments from other accumulated comprehensive income to our condensed consolidated statement of operations. The following table summarizes changes in accumulated other comprehensive income for the three and six months ended June 30, 2015 and 2014 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Beginning balance accumulated other comprehensive income $ 47,114 $ 29,000 $ 39,747 $ 21,080 Unrealized (losses) gains on securities, net of tax (1) (28,703 ) (4,456 ) (21,336 ) 3,806 Amounts reclassified from accumulated other comprehensive income (2) — 175 — (167 ) Net current period other comprehensive (loss) income (28,703 ) (4,281 ) (21,336 ) 3,639 Ending balance accumulated other comprehensive income $ 18,411 $ 24,719 $ 18,411 $ 24,719 (1) Other comprehensive loss for the three months ended June 30, 2015 includes income tax benefit of $5.1 million, compared to $2.9 million for the same period in 2014. For the six months ended June 30, 2014 other comprehensive income includes income tax expense of $2.5 million. There was no tax expense or benefit for the six months ended June 30, 2015. (2) Included in gain on investments, net on our condensed consolidated statement of operations. |
Convertible debt | Convertible debt We account for convertible debt instruments, including our 1 percent and 2¾ percent notes, that may be settled in cash upon conversion (including partial cash settlement) by separating the liability and equity components of the instruments in a manner that reflects our nonconvertible debt borrowing rate. We determine the carrying amount of the liability component by measuring the fair value of similar debt instruments that do not have the conversion feature. If no similar debt instrument exists, we estimate fair value by using assumptions that market participants would use in pricing a debt instrument, including market interest rates, credit standing, yield curves and volatilities. Determining the fair value of the debt component requires the use of accounting estimates and assumptions. These estimates and assumptions are judgmental in nature and could have a significant impact on the determination of the debt component, and the associated non-cash interest expense. We assign a value to the debt component of our convertible notes equal to the estimated fair value of similar debt instruments without the conversion feature, which resulted in us recording our debt at a discount. We are amortizing the debt discount over the life of the convertible notes as additional non-cash interest expense utilizing the effective interest method. |
Segment information | Segment information In 2015, we began operating as two segments, our Isis Core segment, previously referred to as Drug Discovery and Development, and our new segment, Akcea Therapeutics, which includes the operations of our newly-formed and wholly-owned subsidiary, Akcea Therapeutics, Inc. We formed Akcea to develop and commercialize the drugs from our lipid franchise. We provide segment financial information and results for our Isis Core segment and our Akcea Therapeutics segment based on the segregation of revenues and expenses that our chief decision maker reviews to assess operating performance and to make operating decisions. We use judgments and estimates in determining the allocation of shared expenses to the two segments. |
Stock-based compensation expense | Stock-based compensation expense We use the Black-Scholes model to estimate the fair value of stock options granted and stock purchase rights under our ESPP. The expected term of stock options granted represents the period of time that we expect them to be outstanding. We estimate the expected term of options granted based on historical exercise patterns. For the six months ended June 30, 2015 and 2014, we used the following weighted-average assumptions in our Black-Scholes calculations: Employee Stock Options: Six Months Ended June 30, 2015 2014 Risk-free interest rate 1.5% 1.6% Dividend yield 0.0% 0.0% Volatility 53.6% 50.6% Expected life 4.5 years 4.6 years ESPP: Six Months Ended June 30, 2015 2014 Risk-free interest rate 0.1% 0.1% Dividend yield 0.0% 0.0% Volatility 56.2% 59.0% Expected life 6 months 6 months The fair value of RSUs is based on the market price of our common stock on the date of grant. RSUs vest annually over a four year period. The weighted-average grant date fair value of RSUs granted to employees for the six months ended June 30, 2015 was $68.73 per share. The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2015 and 2014 (in thousands), which was allocated as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Research, development and patent expenses $ 10,465 $ 6,401 $ 20,951 $ 12,274 General and administrative 3,140 1,307 5,959 2,503 Total $ 13,605 $ 7,708 $ 26,910 $ 14,777 Non-cash stock-based compensation expense was $13.6 million and $26.9 million for the three and six months ended June 30, 2015, respectively, and increased compared to $7.7 million and $14.8 million for the same periods in 2014 primarily due to the increase in our stock price during the first quarter of 2015 compared to the same period in 2014. As of June 30, 2015, total unrecognized estimated non-cash stock-based compensation expense related to non-vested stock options and RSUs was $57.5 million and $21.3 million, respectively. We will adjust total unrecognized compensation cost for future changes in estimated forfeitures. We expect to recognize the cost of non-cash, stock-based compensation expense related to non-vested stock options and RSUs over a weighted average amortization period of 1.4 years and 1.6 years, respectively. Amendments to equity plans In June 2015, after receiving approval from our stockholders, we amended our 2011 Equity Incentive Plan and our 2002 Non-Employee Directors Stock Option Plan to increase the total number of shares reserved for issuance under each plan. We increased the shares available under our 2011 Equity Incentive Plan from 5.5 million to 11 million and we increased our 2002 Non-Employee Directors Stock Option Plan from 1.2 million to 2 million. |
Impact of recently issued accounting standards | Impact of recently issued accounting standards In May 2014, the FASB issued accounting guidance on the recognition of revenue from customers. Under this guidance, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what the entity expects in exchange for the goods or services. This guidance also requires more detailed disclosures to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The guidance as originally issued is effective for fiscal years, and interim periods within that year, beginning after December 15, 2016. In July 2015, the FASB issued updated accounting guidance to allow for an optional one year deferral from the original effective date. As a result, we can choose to adopt this guidance beginning January 1, 2017 or on January 1, 2018. The guidance allows us to select one of two methods of adoption, either the full retrospective approach, meaning the guidance would be applied to all periods presented, or modified retrospective, meaning the cumulative effect of applying the guidance would be recognized as an adjustment to our opening retained earnings balance. We are currently determining the adoption method and timing as well as the effects the adoption will have on our consolidated financial statements and disclosures. In August 2014, the FASB issued accounting guidance on how and when to disclose going-concern uncertainties in the financial statements. This guidance will require us to perform interim and annual assessments to determine our ability to continue as a going concern within one year from the date that we issue our financial statements. The guidance is effective for fiscal years, and interim periods within that year, beginning after December 15, 2016. We will adopt this guidance in our fiscal year beginning January 1, 2017. We do not expect this guidance to have any effect on our financial statements. In February 2015, the FASB issued accounting guidance which amends existing consolidation guidance for entities that are required to evaluate whether they should consolidate certain legal entities. The guidance is effective for fiscal years, and interim periods within that year, beginning after December 15, 2015. We will adopt this guidance in our fiscal year beginning January 1, 2016. We do not expect this guidance to have any effect on our financial statements. In April 2015, the FASB issued accounting guidance to simplify the presentation of debt issuance costs. The amended guidance requires us to present debt issuance costs as a direct deduction from the carrying amount of the related debt liability rather than as an asset. The guidance does not require us to change how we recognize and measure our debt issuance costs. The guidance is effective for fiscal years, and interim periods within that year, beginning after December 15, 2015. We will adopt this guidance in our fiscal year beginning January 1, 2016. We do not expect this guidance to have a material impact on our financial statements. In April 2015, the FASB issued accounting guidance to clarify the accounting for fees paid in cloud computing arrangements. The amendment provides guidance to customers about whether a cloud computing arrangement includes a software license element consistent with the acquisition of other software licenses or if the arrangement excludes a software license and should be accounted for as a service contract. The guidance does not change the accounting for service contracts. The guidance is effective for fiscal years, and interim periods within that year, beginning after December 15, 2015. We can choose to adopt it either prospectively or retrospectively. We will adopt this guidance in our fiscal year beginning January 1, 2016. We are currently evaluating the impact, if any, of the adoption of this newly issued guidance to our condensed consolidated financial statements. |
Significant Accounting Polici17
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Significant Accounting Policies [Abstract] | |
Diluted common equivalent shares | For the three and six 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 those periods. Diluted common equivalent shares for the three and six 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 Six Months Ended June 30, 2015 Income (Numerator) Shares (Denominator) Per-Share Amount Income available to common shareholders $ 18,931 119,348 $ 0.16 Effect of diluted securities: Shares issuable upon exercise of stock options 4,310 Shares issuable upon restricted stock award issuance 399 Shares issuable related to our ESPP 4 Shares issuable related to our 2¾ percent notes — — Income available to common shareholders, plus assumed conversions $ 18,931 124,061 $ 0.15 |
Changes in accumulated other comprehensive income | Accumulated other comprehensive income is comprised of unrealized gains and losses on investments, net of taxes, and adjustments we made to reclassify realized gains and losses on investments from other accumulated comprehensive income to our condensed consolidated statement of operations. The following table summarizes changes in accumulated other comprehensive income for the three and six months ended June 30, 2015 and 2014 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Beginning balance accumulated other comprehensive income $ 47,114 $ 29,000 $ 39,747 $ 21,080 Unrealized (losses) gains on securities, net of tax (1) (28,703 ) (4,456 ) (21,336 ) 3,806 Amounts reclassified from accumulated other comprehensive income (2) — 175 — (167 ) Net current period other comprehensive (loss) income (28,703 ) (4,281 ) (21,336 ) 3,639 Ending balance accumulated other comprehensive income $ 18,411 $ 24,719 $ 18,411 $ 24,719 (1) Other comprehensive loss for the three months ended June 30, 2015 includes income tax benefit of $5.1 million, compared to $2.9 million for the same period in 2014. For the six months ended June 30, 2014 other comprehensive income includes income tax expense of $2.5 million. There was no tax expense or benefit for the six months ended June 30, 2015. (2) Included in gain on investments, net on our condensed consolidated statement of operations. |
Weighted-average assumptions - Employee stock options | We use the Black-Scholes model to estimate the fair value of stock options granted and stock purchase rights under our ESPP. The expected term of stock options granted represents the period of time that we expect them to be outstanding. We estimate the expected term of options granted based on historical exercise patterns. For the six months ended June 30, 2015 and 2014, we used the following weighted-average assumptions in our Black-Scholes calculations: Employee Stock Options: Six Months Ended June 30, 2015 2014 Risk-free interest rate 1.5% 1.6% Dividend yield 0.0% 0.0% Volatility 53.6% 50.6% Expected life 4.5 years 4.6 years |
Weighted-average assumptions - ESPP | ESPP: Six Months Ended June 30, 2015 2014 Risk-free interest rate 0.1% 0.1% Dividend yield 0.0% 0.0% Volatility 56.2% 59.0% Expected life 6 months 6 months |
Stock-based compensation expense | The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2015 and 2014 (in thousands), which was allocated as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Research, development and patent expenses $ 10,465 $ 6,401 $ 20,951 $ 12,274 General and administrative 3,140 1,307 5,959 2,503 Total $ 13,605 $ 7,708 $ 26,910 $ 14,777 |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Investments [Abstract] | |
Contract maturity of available-for-sale securities | The following table summarizes the contract maturity of the available-for-sale securities we held as of June 30, 2015: One year or less 54% After one year but within two years 29% After two years but within three and a half years 17% Total 100% |
Summary of investments | The following is a summary of our investments (in thousands): Gross Unrealized Other- Than- Temporary Impairment Estimated June 30, 2015 Cost Gains Losses Loss Fair Value Available-for-sale securities (1): Corporate debt securities $ 189,487 $ 37 $ (90 ) $ — $ 189,434 Debt securities issued by U.S. government agencies 81,639 5 (11 ) — 81,633 Debt securities issued by states of the United States and political subdivisions of the states (2) 59,835 22 (58 ) — 59,799 Total securities with a maturity of one year or less 330,961 64 (159 ) — 330,866 Corporate debt securities 234,088 52 (848 ) — 233,292 Debt securities issued by U.S. government agencies 28,002 10 (3 ) — 28,009 Debt securities issued by states of the United States and political subdivisions of the states 62,203 32 (189 ) — 62,046 Total securities with a maturity of more than one year 324,293 94 (1,040 ) — 323,347 Total available-for-sale securities $ 655,254 $ 158 $ (1,199 ) $ — $ 654,213 Equity securities: Regulus Therapeutics Inc. $ 12,477 $ 48,127 $ — $ — $ 60,604 Securities included in other current assets 880 — — (880 ) — Total equity securities $ 13,357 $ 48,127 $ — $ (880 ) $ 60,604 Total available-for-sale and equity securities $ 668,611 $ 48,285 $ (1,199 ) $ (880 ) $ 714,817 Gross Unrealized Other- Than- Temporary Impairment Estimated December 31, 2014 Cost Gains Losses Loss Fair Value Available-for-sale securities (1): Corporate debt securities (2) $ 219,856 $ 89 $ (89 ) $ — $ 219,856 Debt securities issued by U.S. government agencies 47,496 7 (27 ) — 47,476 Debt securities issued by the U.S. Treasury (2) 19,008 9 — — 19,017 Debt securities issued by states of the United States and political subdivisions of the states (2) 45,196 19 (53 ) — 45,162 Total securities with a maturity of one year or less 331,556 124 (169 ) — 331,511 Corporate debt securities 152,730 16 (600 ) — 152,146 Debt securities issued by U.S. government agencies 62,530 — (151 ) — 62,379 Debt securities issued by states of the United States and political subdivisions of the states 60,073 32 (234 ) — 59,871 Total securities with a maturity of more than one year 275,333 48 (985 ) — 274,396 Total available-for-sale securities $ 606,889 $ 172 $ (1,154 ) $ — $ 605,907 Equity securities: Regulus Therapeutics Inc. $ 12,477 $ 69,404 $ — $ — $ 81,881 Securities included in other current assets 880 — — (880 ) — Total equity securities $ 13,357 $ 69,404 $ — $ (880 ) $ 81,881 Total available-for-sale and equity securities $ 620,246 $ 69,576 $ (1,154 ) $ (880 ) $ 687,788 (1) Our available-for-sale securities are held at amortized cost. (2) Includes investments classified as cash equivalents on our condensed consolidated balance sheet. |
Investments temporarily impaired | Investments we considered to be temporarily impaired at June 30, 2015 were as follows (in thousands): 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 254 $ 296,493 $ (894 ) $ 9,263 $ (44 ) $ 305,756 $ (938 ) Debt securities issued by U.S. government agencies 12 62,116 (14 ) — — 62,116 (14 ) Debt securities issued by states of the United States and political subdivisions of the states 49 51,616 (178 ) 6,229 (69 ) 57,845 (247 ) Total temporarily impaired securities 315 $ 410,225 $ (1,086 ) $ 15,492 $ (113 ) $ 425,717 $ (1,199 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Measurements [Abstract] | |
Assets measured at fair value on a recurring basis | We measure the following major security types at fair value on a recurring basis. The following summary breaks down the fair-value hierarchy that we used to value each security at June 30, 2015 and December 31, 2014 (in thousands): At June 30, 2015 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents (1) $ 89,072 $ 89,072 $ — $ — Corporate debt securities (2) 422,726 — 422,726 — Debt securities issued by U.S. government agencies (2) 109,642 — 109,642 — Debt securities issued by states of the United States and political subdivisions of the states (3) 121,845 — 121,845 — Investment in Regulus Therapeutics Inc. 60,604 60,604 — — Total $ 803,889 $ 149,676 $ 654,213 $ — At December 31, 2014 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents (1) $ 104,680 $ 104,680 $ — $ — Corporate debt securities (4) 372,002 — 372,002 — Debt securities issued by U.S. government agencies (2) 109,855 — 109,855 — Debt securities issued by the U.S. Treasury (5) 19,017 19,017 — — Debt securities issued by states of the United States and political subdivisions of the states (6) 105,033 — 105,033 — Investment in Regulus Therapeutics Inc. 81,881 — — 81,881 Total $ 792,468 $ 123,697 $ 586,890 $ 81,881 (1) Included in cash and cash equivalents on our condensed consolidated balance sheet. (2) Included in short-term investments on our condensed consolidated balance sheet. (3) $18.8 million included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. (4) $0.8 million included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. (5) $10 million included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. (6) $9.3 million included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. |
Summary of investments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | The following is a reconciliation of our investments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the six months ended June 30, 2015 (in thousands): Beginning balance of Level 3 investments (at December 31, 2014) $ 81,881 Total gain included in accumulated other comprehensive income (loss) 22,377 Transfers out of Level 3 investments (104,258 ) Ending balance of Level 3 investments (at June 30, 2015) $ — |
Segment Information and Conce20
Segment Information and Concentration of Business Risk (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Segment Information and Concentration of Business Risk [Abstract] | |
Segment information | The following is our segment information for the three and six months ended June 30, 2015 (in thousands). Three Months Ended June 30, 2015 Isis Core Akcea Therapeutics Total Revenue: Research and development $ 119,658 $ — $ 119,658 Licensing and royalty 770 — 770 Total segment revenue $ 120,428 $ — $ 120,428 Income (loss) from operations $ 53,588 $ (8,942 ) $ 44,646 Six Months Ended June 30, 2015 Isis Core Akcea Therapeutics Total Revenue: Research and development $ 181,551 $ — $ 181,551 Licensing and royalty 1,461 — 1,461 Total segment revenue $ 183,012 $ — $ 183,012 Income (loss) from operations $ 51,357 $ (16,040 ) $ 35,317 The following is our segment information for the three and six months ended June 30, 2014 (in thousands) revised for comparative purposes to show operating costs for Akcea-related projects in 2014: Three Months Ended June 30, 2014 Isis Core Akcea Therapeutics Total Revenue: Research and development $ 56,628 $ — $ 56,628 Licensing and royalty 448 — 448 Total segment revenue $ 57,076 $ — $ 57,076 Loss from operations $ (1,042 ) $ (5,608 ) $ (6,650 ) Six Months Ended June 30, 2014 Isis Core Akcea Therapeutics Total Revenue: Research and development $ 76,177 $ — $ 76,177 Licensing and royalty 9,060 — 9,060 Total segment revenue $ 85,237 $ — $ 85,237 Loss from operations $ (26,653 ) $ (9,664 ) $ (36,317 ) |
Revenue from significant partners | We have historically funded our operations from collaborations with corporate partners and a relatively small number of partners have accounted for a significant percentage of our revenue. Revenue from significant partners, which is defined as ten percent or more of our total revenue, was as follows: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Partner A 76 % 0 % 50 % 0 % Partner B 15 % 60 % 31 % 52 % Partner C 4 % 6 % 11 % 8 % Partner D 1 % 27 % 1 % 22 % |
Significant Accounting Polici21
Significant Accounting Policies, Revenue Recognition (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||||
Sep. 30, 2013USD ($) | Dec. 31, 2012USD ($)AccountingUnitTarget | Jun. 30, 2012USD ($) | Jan. 31, 2012USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Jun. 30, 2015USD ($)AgreementCategoryStage | Jun. 30, 2014USD ($) | |
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Licensing and royalty revenue | $ 770,000 | $ 448,000 | $ 1,461,000 | $ 9,060,000 | |||||
Collaborations and Licensing Agreements [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Number of categories of milestone events | Category | 3 | ||||||||
Number of stages of life-cycle of drugs | Stage | 3 | ||||||||
Collaborations and Licensing Agreements [Member] | Development Milestones - New Development Candidate [Member] | Minimum [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Completion period | 12 months | ||||||||
Collaborations and Licensing Agreements [Member] | Development Milestones - New Development Candidate [Member] | Maximum [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Completion period | 18 months | ||||||||
Collaborations and Licensing Agreements [Member] | Development Milestones - Phase 1 [Member] | Minimum [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Completion period | 1 year | ||||||||
Collaborations and Licensing Agreements [Member] | Development Milestones - Phase 1 [Member] | Maximum [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Completion period | 2 years | ||||||||
Collaborations and Licensing Agreements [Member] | Development Milestones - Phase 2 [Member] | Minimum [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Completion period | 1 year | ||||||||
Collaborations and Licensing Agreements [Member] | Development Milestones - Phase 2 [Member] | Maximum [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Completion period | 3 years | ||||||||
Collaborations and Licensing Agreements [Member] | Development Milestones - Phase 3 [Member] | Minimum [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Completion period | 2 years | ||||||||
Collaborations and Licensing Agreements [Member] | Development Milestones - Phase 3 [Member] | Maximum [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Completion period | 4 years | ||||||||
Collaborations and Licensing Agreements [Member] | Regulatory Milestones [Member] | Minimum [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Time to prepare and submit regulatory filings | 6 months | ||||||||
Time to obtain approval | 1 year | ||||||||
Collaborations and Licensing Agreements [Member] | Regulatory Milestones [Member] | Maximum [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Time to prepare and submit regulatory filings | 12 months | ||||||||
Time to obtain approval | 2 years | ||||||||
Collaborations and Licensing Agreements [Member] | Commercialization Milestones [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Pre-specified sales threshold | $ 1,000,000,000 | ||||||||
Bayer HealthCare [Member] | Agreement Entered into in May 2015 [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Upfront fee received | 100,000,000 | ||||||||
Number of units of accounting | AccountingUnit | 3 | ||||||||
Bayer HealthCare [Member] | Agreement Entered into in May 2015 [Member] | ISIS-FXI [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Upfront fee recognized | $ 91,200,000 | ||||||||
Assumed percentage change in estimated selling price | 10.00% | ||||||||
Percentage change in earned revenue based on assumed change in estimated selling price | 1.00% | ||||||||
Change in earned revenue based on assumed change in estimated selling price | $ 900,000 | ||||||||
Bayer HealthCare [Member] | Agreement Entered into in May 2015 [Member] | ISIS-FXI Development Services [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Upfront fee recorded as deferred revenue | 4,300,000 | ||||||||
Bayer HealthCare [Member] | Agreement Entered into in May 2015 [Member] | ISIS-FXI API [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Upfront fee recorded as deferred revenue | $ 4,500,000 | ||||||||
Biogen Idec [Member] | Collaborations and Licensing Agreements [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Number of collaborative agreements | Agreement | 4 | ||||||||
Biogen Idec [Member] | Agreement Entered into in January 2012 [Member] | ISIS-SMN [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Upfront fee recorded as deferred revenue | $ 29,000,000 | ||||||||
Biogen Idec [Member] | Agreement Entered into in June 2012 [Member] | ISIS-DMPK [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Upfront fee recorded as deferred revenue | $ 12,000,000 | ||||||||
Biogen Idec [Member] | Agreement Entered into in December 2012 [Member] | Neurology [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Upfront fee recorded as deferred revenue | $ 30,000,000 | ||||||||
Number of targets | Target | 3 | ||||||||
Biogen Idec [Member] | Agreement Entered into in September 2013 [Member] | Strategic Neurology [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Upfront fee recorded as deferred revenue | $ 100,000,000 | ||||||||
Term of collaboration agreement | 6 years | ||||||||
Alnylam [Member] | |||||||||
Collaborative Arrangements and Licensing Agreements [Line Items] | |||||||||
Licensing and royalty revenue | $ 7,700,000 |
Significant Accounting Polici22
Significant Accounting Policies, Cash, Cash Equivalents and Short-term Investments, Inventory Valuation, and Research, Development and Patent Expenses (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Inventory valuation [Abstract] | ||
Raw materials | $ 6,782 | $ 6,290 |
Maximum [Member] | Privately- and Publicly-Held Biotechnology Companies [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership percentage in equity investments | 20.00% |
Significant Accounting Polici23
Significant Accounting Policies, Basic and Diluted Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Income (Numerator) [Abstract] | |||||
Income available to common shareholders | $ 35,648 | $ 18,931 | |||
Dilutive effect of 2 3/4 percent notes | 1,047 | 0 | |||
Income available to common shareholders, plus assumed conversions | $ 36,695 | $ 18,931 | |||
Shares (Denominator) [Abstract] | |||||
Shares used in computing basic net income per share (in shares) | 119,742 | 117,588 | 119,348 | 117,359 | |
Effect of Diluted Securities [Abstract] | |||||
Shares issuable upon exercise of stock options (in shares) | 3,974 | 4,310 | |||
Shares issuable upon restricted stock award issuance (in shares) | 376 | 399 | |||
Shares issuable related to our ESPP (in shares) | 4 | 4 | |||
Shares issuable related to our 2 3/4 percent notes (in shares) | 3,683 | 0 | |||
Shares used in computing diluted net income per share (in shares) | 127,779 | 117,588 | 124,061 | 117,359 | |
Per-Share Amount [Abstract] | |||||
Basic net income per share (in dollars per share) | $ 0.30 | $ (0.10) | $ 0.16 | $ (0.37) | |
Diluted net income per share (in dollars per share) | $ 0.29 | $ (0.10) | $ 0.15 | $ (0.37) | |
2 3/4 Percent Convertible Senior Notes [Member] | |||||
Basic and Diluted Net Income (Loss) per Share [Abstract] | |||||
Interest rate on convertible senior notes | 2.75% | 2.75% | 2.75% | 2.75% | 2.75% |
1 Percent Convertible Senior Notes [Member] | |||||
Basic and Diluted Net Income (Loss) per Share [Abstract] | |||||
Interest rate on convertible senior notes | 1.00% | 1.00% | 1.00% |
Significant Accounting Polici24
Significant Accounting Policies, Consolidation of Variable Interest Entities (Details) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015USD ($)Entity | Dec. 31, 2014Entity | |
Consolidation of variable interest entities [Abstract] | ||
Number of variable interest entities in which the entity is not primary beneficiary | 2 | 2 |
Carrying value of investments in variable interest entities | $ | $ 60.6 |
Significant Accounting Polici25
Significant Accounting Policies, Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | ||
Accumulated other comprehensive income [Roll Forward] | |||||
Beginning balance | $ 257,780 | ||||
Ending balance | $ 300,320 | 300,320 | |||
Unrealized (Losses) Gains on Investments [Member] | |||||
Accumulated other comprehensive income [Roll Forward] | |||||
Beginning balance | 47,114 | $ 29,000 | 39,747 | $ 21,080 | |
Other comprehensive income before reclassifications, net of tax | [1] | (28,703) | (4,456) | (21,336) | 3,806 |
Amounts reclassified from accumulated other comprehensive income | [2] | 0 | 175 | 0 | (167) |
Net current period other comprehensive (loss) income | (28,703) | (4,281) | (21,336) | 3,639 | |
Ending balance | 18,411 | 24,719 | 18,411 | 24,719 | |
Income tax expense (benefit) included in other comprehensive income | $ (5,100) | $ 2,900 | $ 0 | $ 2,500 | |
[1] | Other comprehensive loss for the three months ended June 30, 2015 includes income tax benefit of $5.1 million, compared to $2.9 million for the same period in 2014. For the six months ended June 30, 2014 other comprehensive income includes income tax expense of $2.5 million. There was no tax expense or benefit for the six months ended June 30, 2015. | ||||
[2] | Included in gain on investments, net on our condensed consolidated statement of operations. |
Significant Accounting Polici26
Significant Accounting Policies, Convertible Debt and Segment Information (Details) - Segment | 6 Months Ended | ||
Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | |
Segment Information [Abstract] | |||
Number of operating segments | 2 | ||
1 Percent Convertible Senior Notes [Member] | |||
Convertible Debt [Abstract] | |||
Interest rate on convertible senior notes | 1.00% | 1.00% | |
2 3/4 Percent Convertible Senior Notes [Member] | |||
Convertible Debt [Abstract] | |||
Interest rate on convertible senior notes | 2.75% | 2.75% | 2.75% |
Significant Accounting Polici27
Significant Accounting Policies, Stock-Based Compensation Expense - Weighted-Average Assumptions (Details) - shares | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Board of Directors [Member] | ||
Weighted-average assumptions [Abstract] | ||
Options granted (in shares) | 0 | |
Employee Stock Options [Member] | ||
Weighted-average assumptions [Abstract] | ||
Risk-free interest rate | 1.50% | 1.60% |
Dividend yield | 0.00% | 0.00% |
Volatility | 53.60% | 50.60% |
Expected life | 4 years 6 months | 4 years 7 months 6 days |
ESPP [Member] | ||
Weighted-average assumptions [Abstract] | ||
Risk-free interest rate | 0.10% | 0.10% |
Dividend yield | 0.00% | 0.00% |
Volatility | 56.20% | 59.00% |
Expected life | 6 months | 6 months |
RSUs [Member] | Board of Directors [Member] | ||
Weighted-average assumptions [Abstract] | ||
Units granted (in shares) | 0 |
Significant Accounting Polici28
Significant Accounting Policies, Stock-Based Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | May. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | $ 13,605 | $ 7,708 | $ 26,910 | $ 14,777 | |
Stock Option [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Unrecognized estimated non-cash stock-based compensation expense | 57,500 | $ 57,500 | |||
Weighted average period of amortization | 1 year 4 months 24 days | ||||
RSUs [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Vesting period | 4 years | ||||
Unrecognized estimated non-cash stock-based compensation expense | $ 21,300 | $ 21,300 | |||
Weighted average period of amortization | 1 year 7 months 6 days | ||||
RSUs [Member] | Employees [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Weighted-average grant date fair value (in dollars per share) | $ 68.73 | ||||
2011 Equity Incentive Plan [Member] | |||||
Amendments to Equity Plans [Abstract] | |||||
Number of shares authorized (in shares) | 11 | 11 | 5.5 | ||
2002 Nonemployee Directors Stock Option Plan [Member] | |||||
Amendments to Equity Plans [Abstract] | |||||
Number of shares authorized (in shares) | 2 | 2 | 1.2 | ||
Research, Development and Patent Expenses [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | $ 10,465 | 6,401 | $ 20,951 | 12,274 | |
General and Administrative [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||||
Stock-based compensation expense | $ 3,140 | $ 1,307 | $ 5,959 | $ 2,503 |
Investments, Contract Maturity
Investments, Contract Maturity of Available-for-Sale Securities (Details) - Jun. 30, 2015 - Range [Domain] - Company | Total |
Contract maturity of available-for-sale securities [Abstract] | |
One year or less | 54.00% |
After one year but within two years | 29.00% |
After two years but within three and a half years | 17.00% |
Total | 100.00% |
Percentage of available-for-sale securities with a maturity of less than two years | 83.00% |
Ownership interests in private and public companies [Abstract] | |
Number of privately-held companies in which the entity has an equity ownership interest of less than 20% | 1 |
Number of publicly-held companies in which the entity has an equity ownership interest of less than 20% | 2 |
Investments, Summary of Investm
Investments, Summary of Investments and Investments Temporarily Impaired (Details) $ in Thousands | Jun. 30, 2015USD ($)Investment | Dec. 31, 2014USD ($) | ||
Summary of investments [Abstract] | ||||
Cost | $ 668,611 | $ 620,246 | ||
Gross unrealized gains | 48,285 | 69,576 | ||
Gross unrealized losses | (1,199) | (1,154) | ||
Other-than-temporary impairment loss | (880) | (880) | ||
Estimated fair value | $ 714,817 | 687,788 | ||
Temporarily impaired investments [Abstract] | ||||
Temporarily impaired securities, Number of Investments | Investment | 315 | |||
Temporarily impaired securities, Less than 12 months of temporary impairment, Estimated fair value | $ 410,225 | |||
Temporarily impaired securities, Less than 12 months of temporary impairment, Unrealized losses | (1,086) | |||
Temporarily impaired securities, More than 12 months of temporary impairment, Estimated fair value | 15,492 | |||
Temporarily impaired securities, More than 12 months of temporary impairment, Unrealized losses | (113) | |||
Total temporary impairment, Estimated fair value | 425,717 | |||
Total temporary impairment, Unrealized losses | (1,199) | |||
Available-for-sale securities [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | [1] | 655,254 | 606,889 | |
Gross unrealized gains | 158 | 172 | ||
Gross unrealized losses | (1,199) | (1,154) | ||
Other-than-temporary impairment loss | 0 | 0 | ||
Estimated fair value | 654,213 | 605,907 | ||
Available-for-sale securities [Member] | Debt maturities of one year or less [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | [1] | 330,961 | 331,556 | |
Gross unrealized gains | 64 | 124 | ||
Gross unrealized losses | (159) | (169) | ||
Other-than-temporary impairment loss | 0 | 0 | ||
Estimated fair value | 330,866 | 331,511 | ||
Available-for-sale securities [Member] | Debt maturities of more than one year [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | [1] | 324,293 | 275,333 | |
Gross unrealized gains | 94 | 48 | ||
Gross unrealized losses | (1,040) | (985) | ||
Other-than-temporary impairment loss | 0 | 0 | ||
Estimated fair value | $ 323,347 | 274,396 | ||
Corporate Debt Securities [Member] | ||||
Temporarily impaired investments [Abstract] | ||||
Temporarily impaired securities, Number of Investments | Investment | 254 | |||
Temporarily impaired securities, Less than 12 months of temporary impairment, Estimated fair value | $ 296,493 | |||
Temporarily impaired securities, Less than 12 months of temporary impairment, Unrealized losses | (894) | |||
Temporarily impaired securities, More than 12 months of temporary impairment, Estimated fair value | 9,263 | |||
Temporarily impaired securities, More than 12 months of temporary impairment, Unrealized losses | (44) | |||
Total temporary impairment, Estimated fair value | 305,756 | |||
Total temporary impairment, Unrealized losses | (938) | |||
Corporate Debt Securities [Member] | Debt maturities of one year or less [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | [1] | 189,487 | 219,856 | [2] |
Gross unrealized gains | 37 | 89 | [2] | |
Gross unrealized losses | (90) | (89) | [2] | |
Other-than-temporary impairment loss | 0 | 0 | [2] | |
Estimated fair value | 189,434 | 219,856 | [2] | |
Corporate Debt Securities [Member] | Debt maturities of more than one year [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | [1] | 234,088 | 152,730 | |
Gross unrealized gains | 52 | 16 | ||
Gross unrealized losses | (848) | (600) | ||
Other-than-temporary impairment loss | 0 | 0 | ||
Estimated fair value | $ 233,292 | 152,146 | ||
Debt Securities issued by U.S. Government Agencies [Member] | ||||
Temporarily impaired investments [Abstract] | ||||
Temporarily impaired securities, Number of Investments | Investment | 12 | |||
Temporarily impaired securities, Less than 12 months of temporary impairment, Estimated fair value | $ 62,116 | |||
Temporarily impaired securities, Less than 12 months of temporary impairment, Unrealized losses | (14) | |||
Temporarily impaired securities, More than 12 months of temporary impairment, Estimated fair value | 0 | |||
Temporarily impaired securities, More than 12 months of temporary impairment, Unrealized losses | 0 | |||
Total temporary impairment, Estimated fair value | 62,116 | |||
Total temporary impairment, Unrealized losses | (14) | |||
Debt Securities issued by U.S. Government Agencies [Member] | Debt maturities of one year or less [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | [1] | 81,639 | 47,496 | |
Gross unrealized gains | 5 | 7 | ||
Gross unrealized losses | (11) | (27) | ||
Other-than-temporary impairment loss | 0 | 0 | ||
Estimated fair value | 81,633 | 47,476 | ||
Debt Securities issued by U.S. Government Agencies [Member] | Debt maturities of more than one year [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | [1] | 28,002 | 62,530 | |
Gross unrealized gains | 10 | 0 | ||
Gross unrealized losses | (3) | (151) | ||
Other-than-temporary impairment loss | 0 | 0 | ||
Estimated fair value | $ 28,009 | 62,379 | ||
Debt Securities issued by the U.S. Treasury [Member] | Debt maturities of one year or less [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | [1],[2] | 19,008 | ||
Gross unrealized gains | [2] | 9 | ||
Gross unrealized losses | [2] | 0 | ||
Other-than-temporary impairment loss | [2] | 0 | ||
Estimated fair value | [2] | 19,017 | ||
Debt Securities issued by States of the United States and Political Subdivisions of the States [Member] | ||||
Temporarily impaired investments [Abstract] | ||||
Temporarily impaired securities, Number of Investments | Investment | 49 | |||
Temporarily impaired securities, Less than 12 months of temporary impairment, Estimated fair value | $ 51,616 | |||
Temporarily impaired securities, Less than 12 months of temporary impairment, Unrealized losses | (178) | |||
Temporarily impaired securities, More than 12 months of temporary impairment, Estimated fair value | 6,229 | |||
Temporarily impaired securities, More than 12 months of temporary impairment, Unrealized losses | (69) | |||
Total temporary impairment, Estimated fair value | 57,845 | |||
Total temporary impairment, Unrealized losses | (247) | |||
Debt Securities issued by States of the United States and Political Subdivisions of the States [Member] | Debt maturities of one year or less [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | [1],[2] | 59,835 | 45,196 | |
Gross unrealized gains | [2] | 22 | 19 | |
Gross unrealized losses | [2] | (58) | (53) | |
Other-than-temporary impairment loss | [2] | 0 | 0 | |
Estimated fair value | [2] | 59,799 | 45,162 | |
Debt Securities issued by States of the United States and Political Subdivisions of the States [Member] | Debt maturities of more than one year [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | [1] | 62,203 | 60,073 | |
Gross unrealized gains | 32 | 32 | ||
Gross unrealized losses | (189) | (234) | ||
Other-than-temporary impairment loss | 0 | 0 | ||
Estimated fair value | 62,046 | 59,871 | ||
Equity Securities [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | 13,357 | 13,357 | ||
Gross unrealized gains | 48,127 | 69,404 | ||
Gross unrealized losses | 0 | 0 | ||
Other-than-temporary impairment loss | (880) | (880) | ||
Estimated fair value | 60,604 | 81,881 | ||
Equity Securities [Member] | Securities included in other current assets [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | 880 | 880 | ||
Gross unrealized gains | 0 | 0 | ||
Gross unrealized losses | 0 | 0 | ||
Other-than-temporary impairment loss | (880) | (880) | ||
Estimated fair value | 0 | 0 | ||
Equity Securities [Member] | Regulus Therapeutics Inc. [Member] | ||||
Summary of investments [Abstract] | ||||
Cost | 12,477 | 12,477 | ||
Gross unrealized gains | 48,127 | 69,404 | ||
Gross unrealized losses | 0 | 0 | ||
Other-than-temporary impairment loss | 0 | 0 | ||
Estimated fair value | $ 60,604 | $ 81,881 | ||
[1] | Our available-for-sale securities are held at amortized cost. | |||
[2] | Includes investments classified as cash equivalents on our condensed consolidated balance sheet. |
Fair Value Measurements, Assets
Fair Value Measurements, Assets Measured at Fair Value on a Recurring Basis (Details) - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2014 | |||
Fair Value Measurements [Abstract] | ||||||
Amount of transfer between Level 1 and Level 2 investments | $ 0 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Investment in Regulus Therapeutics Inc. | $ 60,604,000 | $ 81,881,000 | ||||
2 3/4 Percent Convertible Senior Notes [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest rate on convertible senior notes | 2.75% | 2.75% | 2.75% | |||
Fair value of convertible notes | $ 229,900,000 | |||||
1 Percent Convertible Senior Notes [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest rate on convertible senior notes | 1.00% | 1.00% | ||||
Fair value of convertible notes | $ 538,400,000 | |||||
Recurring Basis [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash equivalents | [1] | 89,072,000 | $ 104,680,000 | |||
Investment in Regulus Therapeutics Inc. | 60,604,000 | 81,881,000 | ||||
Total assets | 803,889,000 | 792,468,000 | ||||
Recurring Basis [Member] | Corporate Debt Securities [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | 422,726,000 | [2] | 372,002,000 | [3] | ||
Recurring Basis [Member] | Corporate Debt Securities [Member] | Cash and Cash Equivalents [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | 800,000 | |||||
Recurring Basis [Member] | Debt Securities issued by U.S. Government Agencies [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | [2] | 109,642,000 | 109,855,000 | |||
Recurring Basis [Member] | Debt Securities issued by the U.S. Treasury [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | [4] | 19,017,000 | ||||
Recurring Basis [Member] | Debt Securities issued by the U.S. Treasury [Member] | Cash and Cash Equivalents [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | 10,000,000 | |||||
Recurring Basis [Member] | Debt Securities issued by States of the United States and Political Subdivisions of the States [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | 121,845,000 | [5] | 105,033,000 | [6] | ||
Recurring Basis [Member] | Debt Securities issued by States of the United States and Political Subdivisions of the States [Member] | Cash and Cash Equivalents [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | 18,800,000 | 9,300,000 | ||||
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash equivalents | [1] | 89,072,000 | 104,680,000 | |||
Investment in Regulus Therapeutics Inc. | 60,604,000 | 0 | ||||
Total assets | 149,676,000 | 123,697,000 | ||||
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | Corporate Debt Securities [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | 0 | [2] | 0 | [3] | ||
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | Debt Securities issued by U.S. Government Agencies [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | [2] | 0 | 0 | |||
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | Debt Securities issued by the U.S. Treasury [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | [4] | 19,017,000 | ||||
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | Debt Securities issued by States of the United States and Political Subdivisions of the States [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | 0 | [5] | 0 | [6] | ||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash equivalents | [1] | 0 | 0 | |||
Investment in Regulus Therapeutics Inc. | 0 | 0 | ||||
Total assets | 654,213,000 | 586,890,000 | ||||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate Debt Securities [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | 422,726,000 | [2] | 372,002,000 | [3] | ||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Debt Securities issued by U.S. Government Agencies [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | [2] | 109,642,000 | 109,855,000 | |||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Debt Securities issued by the U.S. Treasury [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | [4] | 0 | ||||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Debt Securities issued by States of the United States and Political Subdivisions of the States [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | 121,845,000 | [5] | 105,033,000 | [6] | ||
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Cash equivalents | [1] | 0 | 0 | |||
Investment in Regulus Therapeutics Inc. | 0 | 81,881,000 | ||||
Total assets | 0 | 81,881,000 | ||||
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Corporate Debt Securities [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | 0 | [2] | 0 | [3] | ||
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Debt Securities issued by U.S. Government Agencies [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | [2] | 0 | 0 | |||
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Debt Securities issued by the U.S. Treasury [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | [4] | 0 | ||||
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Debt Securities issued by States of the United States and Political Subdivisions of the States [Member] | ||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Available-for-sale securities | $ 0 | [5] | $ 0 | [6] | ||
[1] | Included in cash and cash equivalents on our condensed consolidated balance sheet. | |||||
[2] | Included in short-term investments on our condensed consolidated balance sheet. | |||||
[3] | $0.8 million included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. | |||||
[4] | $10 million included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. | |||||
[5] | $18.8 million included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. | |||||
[6] | $9.3 million included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. |
Fair Value Measurements, Invest
Fair Value Measurements, Investments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Details) - Investments Valued Using Level 3 Inputs [Member] $ in Thousands | 6 Months Ended |
Jun. 30, 2015USD ($) | |
Investments measured at fair value on a recurring basis using significant unobservable inputs (Level 3) [Roll Forward] | |
Beginning balance of Level 3 investments | $ 81,881 |
Total gain included in accumulated other comprehensive income (loss) | 22,377 |
Transfers out of Level 3 investments | (104,258) |
Ending balance of Level 3 investments | $ 0 |
Line of Credit Arrangement (Det
Line of Credit Arrangement (Details) - Jun. 30, 2015 - Morgan Stanley [Member] - Revolving Line of Credit [Member] - USD ($) $ in Millions | Total |
Line of Credit Arrangement [Abstract] | |
Term of agreement | 5 years |
Maximum borrowing capacity | $ 20 |
Commitment fee percentage on unused capacity beginning after June 2016 | 0.25% |
Outstanding borrowings | $ 0 |
LIBOR [Member] | |
Line of Credit Arrangement [Abstract] | |
Term of variable rate | 1 month |
Basis spread on variable rate | 1.25% |
Term of fixed rate elected | one, two, three, four, six, or twelve months |
Collaborative Arrangements an34
Collaborative Arrangements and Licensing Agreements, Traditional Pharmaceutical Alliances and Licensing - AstraZeneca (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | 7 Months Ended | ||||||
Jul. 31, 2015USD ($) | Nov. 30, 2014USD ($) | Aug. 31, 2013USD ($) | Jun. 30, 2013USD ($) | Dec. 31, 2012USD ($)TargetDrug | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2013USD ($)Drug | |
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Revenue earned | $ 120,428 | $ 57,076 | $ 183,012 | $ 85,237 | ||||||
AstraZeneca [Member] | Collaborations and Licensing Agreements [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Revenue earned | 700 | $ 15,600 | 1,500 | $ 19,100 | ||||||
Deferred revenue | 3,200 | 3,200 | ||||||||
AstraZeneca [Member] | Collaborations and Licensing Agreements [Member] | ISIS-STAT3-2.5 [Member] | Phase 2 Study [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Milestone payments to be earned | 17,500 | 17,500 | ||||||||
AstraZeneca [Member] | Agreement Entered into in December 2012 [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Number of targets | Target | 5 | |||||||||
Number of drugs the collaborative partner may license under a separate research program | Drug | 3 | |||||||||
Upfront fee received | $ 6,000 | $ 25,000 | $ 31,000 | |||||||
Revenue earned | $ 11,500 | |||||||||
Cumulative payments received | 63,500 | 63,500 | ||||||||
Next prospective milestone | 10,000 | 10,000 | ||||||||
AstraZeneca [Member] | Agreement Entered into in December 2012 [Member] | Pre-specified Events [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Maximum amount of payments receivable | 858,000 | 858,000 | ||||||||
AstraZeneca [Member] | Agreement Entered into in December 2012 [Member] | Development Milestones [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Maximum amount of payments receivable | 238,000 | 238,000 | ||||||||
AstraZeneca [Member] | Agreement Entered into in December 2012 [Member] | Regulatory Milestones [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Maximum amount of payments receivable | 620,000 | 620,000 | ||||||||
AstraZeneca [Member] | Agreement Entered into in December 2012 [Member] | Three Drugs [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Number of drugs the collaborative partner may license under a separate research program | Drug | 3 | |||||||||
Deferred revenue | 7,600 | $ 7,600 | ||||||||
AstraZeneca [Member] | Agreement Entered into in December 2012 [Member] | ISIS-STAT3-2.5 [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Deferred revenue | $ 11,900 | $ 11,900 | ||||||||
AstraZeneca [Member] | Amended Agreement Entered into in October 2014 [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Milestone payment received | $ 7,500 | |||||||||
AstraZeneca [Member] | Agreement Entered into in August 2013 [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Cumulative payments received | 800 | 800 | ||||||||
Next prospective milestone | 3,300 | 3,300 | ||||||||
Upfront fee recorded as deferred revenue | $ 800 | |||||||||
AstraZeneca [Member] | Agreement Entered into in August 2013 [Member] | License Fee and Substantive Milestones [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Maximum amount of payments receivable | 163,200 | 163,200 | ||||||||
AstraZeneca [Member] | Agreement Entered into in August 2013 [Member] | Research and Development Milestones [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Maximum amount of payments receivable | 45,300 | 45,300 | ||||||||
AstraZeneca [Member] | Agreement Entered into in August 2013 [Member] | Regulatory Milestones [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Maximum amount of payments receivable | $ 105,000 | $ 105,000 | ||||||||
AstraZeneca [Member] | Agreement Entered into in July 2015 [Member] | Subsequent Event [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Near-term payments | $ 65,000 | |||||||||
AstraZeneca [Member] | Agreement Entered into in July 2015 [Member] | Maximum [Member] | Subsequent Event [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Next prospective milestone | 25,000 | |||||||||
AstraZeneca [Member] | Agreement Entered into in July 2015 [Member] | License Fee and Substantive Milestones [Member] | Subsequent Event [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Minimum amount of payments receivable | 4,000,000 | |||||||||
AstraZeneca [Member] | Agreement Entered into in July 2015 [Member] | Development Milestones [Member] | Subsequent Event [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Maximum amount of payments receivable | 1,100,000 | |||||||||
AstraZeneca [Member] | Agreement Entered into in July 2015 [Member] | Regulatory Milestones [Member] | Subsequent Event [Member] | ||||||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||||||
Maximum amount of payments receivable | $ 2,900,000 |
Collaborative Arrangements an35
Collaborative Arrangements and Licensing Agreements, Traditional Pharmaceutical Alliances and Licensing - Bayer HealthCare (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
May. 31, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Revenue earned | $ 120,428 | $ 57,076 | $ 183,012 | $ 85,237 | |
Bayer HealthCare [Member] | Collaborations and Licensing Agreements [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Revenue earned | 91,500 | 91,500 | |||
Deferred revenue | $ 8,500 | $ 8,500 | |||
Bayer HealthCare [Member] | Collaborations and Licensing Agreements [Member] | Revenue [Member] | Strategic Partner [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Concentration percentage | 76.00% | 50.00% | |||
Bayer HealthCare [Member] | Agreement Entered into in May 2015 [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Near-term payments | $ 155,000 | ||||
Upfront fee received | $ 100,000 | ||||
Next prospective milestone | 55,000 | $ 55,000 | |||
Bayer HealthCare [Member] | Agreement Entered into in May 2015 [Member] | Minimum [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Percentage of gross margins of sales received as royalties | 20.00% | ||||
Bayer HealthCare [Member] | Agreement Entered into in May 2015 [Member] | License Fees, Substantive Milestone Payments and Other Payments [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Maximum amount of payments receivable | 375,000 | 375,000 | |||
Bayer HealthCare [Member] | Agreement Entered into in May 2015 [Member] | Development Milestones [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Maximum amount of payments receivable | 120,000 | 120,000 | |||
Bayer HealthCare [Member] | Agreement Entered into in May 2015 [Member] | Commercialization Milestones [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Maximum amount of payments receivable | 110,000 | $ 110,000 | |||
Bayer HealthCare [Member] | Agreement Entered into in May 2015 [Member] | ISIS-FXI [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Upfront fee recognized | 91,200 | ||||
Bayer HealthCare [Member] | Agreement Entered into in May 2015 [Member] | ISIS-FXI Development Activities [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Upfront fee recorded as deferred revenue | $ 8,800 |
Collaborative Arrangements an36
Collaborative Arrangements and Licensing Agreements, Traditional Pharmaceutical Alliances and Licensing - Biogen Idec (ISIS-SMN) (Details) - Biogen Idec [Member] $ in Millions | 1 Months Ended | 6 Months Ended | |
Jul. 31, 2015USD ($) | Jan. 31, 2012USD ($) | Jun. 30, 2015USD ($)Agreement | |
ISIS-SMN [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Cumulative payments received | $ 110 | ||
Next prospective milestone | 11 | ||
ISIS-SMN [Member] | Phase 3 Study in Infants with SMA [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Milestone payment earned | 9 | ||
ISIS-SMN [Member] | Open-Label Extension Study in Children with SMA [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Milestone payment earned | 7 | ||
ISIS-SMN [Member] | Phase 3 Study in Infants and Phase 2 Study in Children with SMA [Member] | Subsequent Event [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Milestone payment earned | $ 10.7 | ||
ISIS-SMN [Member] | License Fee and Substantive Milestones [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Maximum amount of payments receivable | 346 | ||
ISIS-SMN [Member] | Development Milestones [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Maximum amount of payments receivable | 121 | ||
ISIS-SMN [Member] | Regulatory Milestones [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Maximum amount of payments receivable | $ 150 | ||
Collaborations and Licensing Agreements [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Number of collaborative agreements | Agreement | 4 | ||
Agreement Entered into in January 2012 [Member] | ISIS-SMN [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Upfront fee recorded as deferred revenue | $ 29 |
Collaborative Arrangements an37
Collaborative Arrangements and Licensing Agreements, Traditional Pharmaceutical Alliances and Licensing - Biogen Idec (ISIS-DMPK) (Details) - Biogen Idec [Member] - ISIS-DMPK [Member] - USD ($) $ in Millions | 1 Months Ended | |
Jun. 30, 2012 | Jun. 30, 2015 | |
Agreement Entered into in June 2012 [Member] | ||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||
Upfront fee recorded as deferred revenue | $ 12 | |
Cumulative payments received | $ 36 | |
Agreement Entered into in June 2012 [Member] | Phase 1 Study [Member] | ||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||
Next prospective milestone | 2.8 | |
Agreement Entered into in June 2012 [Member] | Phase 2 Study [Member] | ||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||
Next prospective milestone | 35 | |
Agreement Entered into in June 2012 [Member] | License Fee and Substantive Milestones [Member] | ||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||
Maximum amount of payments receivable | 263 | |
Agreement Entered into in June 2012 [Member] | Development Milestones [Member] | ||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||
Maximum amount of payments receivable | 63 | |
Agreement Entered into in June 2012 [Member] | Regulatory Milestones [Member] | ||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||
Maximum amount of payments receivable | 130 | |
Agreement Amended in June 2015 [Member] | Phase 1 Study [Member] | ||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||
Maximum amount of payments receivable | $ 4.2 |
Collaborative Arrangements an38
Collaborative Arrangements and Licensing Agreements, Traditional Pharmaceutical Alliances and Licensing - Biogen Idec (Neurology) (Details) - Biogen Idec [Member] - Agreement Entered into in December 2012 [Member] - Neurology [Member] $ in Millions | 1 Months Ended | ||
Feb. 28, 2015USD ($) | Dec. 31, 2012USD ($)TargetProgram | Jun. 30, 2015USD ($) | |
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Number of targets | Target | 3 | ||
Number of programs under which drugs are to be developed and commercialized | Program | 3 | ||
Upfront fee recorded as deferred revenue | $ 30 | ||
Milestone payment earned | $ 10 | ||
Cumulative payments received | $ 40 | ||
Maximum [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Next prospective milestone | 10 | ||
License Fee and Substantive Milestones [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Maximum amount of payment receivable per program | 259 | ||
Development Milestones [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Maximum amount of payment receivable per program | 59 | ||
Regulatory Milestones [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Maximum amount of payment receivable per program | $ 130 |
Collaborative Arrangements an39
Collaborative Arrangements and Licensing Agreements, Traditional Pharmaceutical Alliances and Licensing - Biogen Idec (Strategic Neurology) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2015 | Sep. 30, 2013 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Revenue earned | $ 120,428 | $ 57,076 | $ 183,012 | $ 85,237 | ||
Biogen Idec [Member] | Collaborations and Licensing Agreements [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Revenue earned | 17,800 | $ 34,500 | 57,000 | $ 44,700 | ||
Deferred revenue | $ 105,000 | $ 105,000 | ||||
Biogen Idec [Member] | Collaborations and Licensing Agreements [Member] | Revenue [Member] | Strategic Partner [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Concentration percentage | 15.00% | 31.00% | ||||
Biogen Idec [Member] | Agreement Entered into in September 2013 [Member] | Strategic Neurology [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Upfront fee recorded as deferred revenue | $ 100,000 | |||||
Period during which a change in control could result in requirement to refund upfront payment | 6 years | |||||
Cumulative payments received | $ 135,000 | $ 135,000 | ||||
Milestone payment earned | $ 10,000 | |||||
Biogen Idec [Member] | Agreement Entered into in September 2013 [Member] | Strategic Neurology [Member] | Maximum [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Next prospective milestone | 10,000 | 10,000 | ||||
Biogen Idec [Member] | Agreement Entered into in September 2013 [Member] | Strategic Neurology [Member] | Antisense Drug for Neurological Disease [Member] | License Fee and Substantive Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payment receivable per drug | 260,000 | 260,000 | ||||
Biogen Idec [Member] | Agreement Entered into in September 2013 [Member] | Strategic Neurology [Member] | Antisense Drug for Neurological Disease [Member] | Research and Development Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payment receivable per drug | 60,000 | 60,000 | ||||
Biogen Idec [Member] | Agreement Entered into in September 2013 [Member] | Strategic Neurology [Member] | Antisense Drug for Neurological Disease [Member] | Regulatory Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payment receivable per drug | 130,000 | 130,000 | ||||
Biogen Idec [Member] | Agreement Entered into in September 2013 [Member] | Strategic Neurology [Member] | Other Modalities [Member] | Pre-specified Events [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payment receivable per drug | 90,000 | 90,000 | ||||
Biogen Idec [Member] | Agreement Entered into in September 2013 [Member] | Strategic Neurology [Member] | Other Modalities [Member] | Research and Development Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payment receivable per drug | 35,000 | 35,000 | ||||
Biogen Idec [Member] | Agreement Entered into in September 2013 [Member] | Strategic Neurology [Member] | Other Modalities [Member] | Regulatory Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payment receivable per drug | $ 55,000 | $ 55,000 |
Collaborative Arrangements an40
Collaborative Arrangements and Licensing Agreements, Traditional Pharmaceutical Alliances and Licensing - GlaxoSmithKline (Details) - Range [Domain] - Subsequent Event Type [Domain] $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May. 31, 2011USD ($) | Mar. 31, 2010USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)Drug | Jun. 30, 2014USD ($) | |
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Revenue earned | $ 120,428 | $ 57,076 | $ 183,012 | $ 85,237 | ||
Glaxo Smith Kline [Member] | Collaborations and Licensing Agreements [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Number of drugs currently in development | Drug | 5 | |||||
Upfront fee received | $ 3,000 | $ 35,000 | ||||
Cumulative payments received | 129,500 | $ 129,500 | ||||
Revenue earned | 4,300 | $ 3,500 | 20,800 | $ 6,800 | ||
Deferred revenue | $ 6,200 | $ 6,200 | ||||
Glaxo Smith Kline [Member] | Collaborations and Licensing Agreements [Member] | Revenue [Member] | Strategic Partner [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Concentration percentage | 4.00% | 11.00% | ||||
Glaxo Smith Kline [Member] | Collaborations and Licensing Agreements [Member] | Pre-specified Events [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Minimum amount of payments receivable | $ 1,300,000 | $ 1,300,000 | ||||
Glaxo Smith Kline [Member] | Collaborations and Licensing Agreements [Member] | Development Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payments receivable | 220,500 | 220,500 | ||||
Glaxo Smith Kline [Member] | Collaborations and Licensing Agreements [Member] | Regulatory Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payments receivable | 483,500 | 483,500 | ||||
Glaxo Smith Kline [Member] | Collaborations and Licensing Agreements [Member] | Commercialization Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payments receivable | 428,000 | 428,000 | ||||
Glaxo Smith Kline [Member] | Collaborations and Licensing Agreements [Member] | ISIS-TTR [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Cumulative milestone payments earned | 60,000 | 60,000 | ||||
Glaxo Smith Kline [Member] | Collaborations and Licensing Agreements [Member] | ISIS-TTR [Member] | Development Milestones [Member] | Phase 2/3 Study [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Next prospective milestone | 10,000 | 10,000 | ||||
Glaxo Smith Kline [Member] | Collaborations and Licensing Agreements [Member] | ISIS-GSK4 [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Next prospective milestone | $ 5,000 | $ 5,000 | ||||
Glaxo Smith Kline [Member] | Collaborations and Licensing Agreements [Member] | ISIS-HBV, ISIS-GSK4-L, ISIS-RHO-2.5, and ISIS-GSK6-L [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Number of drugs currently in development | Drug | 4 |
Collaborative Arrangements an41
Collaborative Arrangements and Licensing Agreements, Traditional Pharmaceutical Alliances and Licensing - Roche (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2015USD ($) | Apr. 30, 2013USD ($) | Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)Candidate | Jun. 30, 2014USD ($) | |
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Revenue earned | $ 120,428 | $ 57,076 | $ 183,012 | $ 85,237 | ||
Roche [Member] | Collaborations and Licensing Agreements [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Revenue earned | 2,400 | $ 2,400 | 4,800 | $ 4,400 | ||
Deferred revenue | 12,900 | 12,900 | ||||
Roche [Member] | Agreement Entered into in April 2013 [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Upfront fee recorded as deferred revenue | $ 30,000 | |||||
Cumulative payments received | 30,000 | 30,000 | ||||
Next prospective milestone | 10,000 | 10,000 | ||||
Roche [Member] | Agreement Entered into in April 2013 [Member] | Subsequent Event [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Milestone payment earned | $ 22,000 | |||||
Roche [Member] | Agreement Entered into in April 2013 [Member] | Development, Regulatory and Commercial Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payment receivable per drug | 136,500 | 136,500 | ||||
Roche [Member] | Agreement Entered into in April 2013 [Member] | HTT [Member] | License Fee and Substantive Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payments receivable | 362,000 | 362,000 | ||||
Roche [Member] | Agreement Entered into in April 2013 [Member] | HTT [Member] | Development Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payments receivable | 67,000 | 67,000 | ||||
Roche [Member] | Agreement Entered into in April 2013 [Member] | HTT [Member] | Regulatory Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payments receivable | 170,000 | 170,000 | ||||
Roche [Member] | Agreement Entered into in April 2013 [Member] | HTT [Member] | Commercialization Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payments receivable | 80,000 | $ 80,000 | ||||
Roche [Member] | Agreement Entered into in April 2013 [Member] | Brain Shuttle [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Number of development candidates that must be generated for brain shuttle program | Candidate | 1 | |||||
Roche [Member] | Agreement Entered into in April 2013 [Member] | Brain Shuttle [Member] | Commercialization Milestones [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Maximum amount of payments receivable | $ 50,000 | $ 50,000 |
Segment Information and Conce42
Segment Information and Concentration of Business Risk (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015USD ($) | Jun. 30, 2014USD ($) | Jun. 30, 2015USD ($)SegmentPartner | Jun. 30, 2014USD ($) | Dec. 31, 2014Partner | |
Segment Information and Concentration of Business Risk [Abstract] | |||||
Number of reportable segments | Segment | 2 | ||||
Revenues [Abstract] | |||||
Research and development revenue | $ 119,658 | $ 56,628 | $ 181,551 | $ 76,177 | |
Licensing and royalty | 770 | 448 | 1,461 | 9,060 | |
Total revenue | 120,428 | 57,076 | 183,012 | 85,237 | |
Income (loss) from operations | 44,646 | (6,650) | 35,317 | (36,317) | |
Operating Segments [Member] | Isis Core [Member] | |||||
Revenues [Abstract] | |||||
Research and development revenue | 119,658 | 56,628 | 181,551 | 76,177 | |
Licensing and royalty | 770 | 448 | 1,461 | 9,060 | |
Total revenue | 120,428 | 57,076 | 183,012 | 85,237 | |
Income (loss) from operations | 53,588 | (1,042) | 51,357 | (26,653) | |
Operating Segments [Member] | Akcea Therapeutics [Member] | |||||
Revenues [Abstract] | |||||
Research and development revenue | 0 | 0 | 0 | 0 | |
Licensing and royalty | 0 | 0 | 0 | 0 | |
Total revenue | 0 | 0 | 0 | 0 | |
Income (loss) from operations | $ (8,942) | $ (5,608) | $ (16,040) | $ (9,664) | |
Revenue [Member] | Partner A [Member] | |||||
Significant Partners [Abstract] | |||||
Concentration percentage | 76.00% | 0.00% | 50.00% | 0.00% | |
Revenue [Member] | Partner B [Member] | |||||
Significant Partners [Abstract] | |||||
Concentration percentage | 15.00% | 60.00% | 31.00% | 52.00% | |
Revenue [Member] | Partner C [Member] | |||||
Significant Partners [Abstract] | |||||
Concentration percentage | 4.00% | 6.00% | 11.00% | 8.00% | |
Revenue [Member] | Partner D [Member] | |||||
Significant Partners [Abstract] | |||||
Concentration percentage | 1.00% | 27.00% | 1.00% | 22.00% | |
Contracts Receivable [Member] | Significant Partners [Member] | |||||
Significant Partners [Abstract] | |||||
Concentration percentage | 100.00% | 99.00% | |||
Number of significant partners | Partner | 3 | 3 |
Subsequent Event (Details)
Subsequent Event (Details) - 1 months ended Jul. 31, 2015 - Subsequent Event [Member] - Regulus [Member] - USD ($) shares in Millions, $ in Millions | Total |
Sale of Regulus' Common Stock [Abstract] | |
Number of shares of common stock sold (in shares) | 2.7 |
Total proceeds from sale of common stock | $ 25.5 |
Gain from sale of common stock | $ 20.2 |