Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 02, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | IONIS PHARMACEUTICALS INC | |
Entity Central Index Key | 874,015 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
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 | 123,965,560 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 114,221 | $ 84,685 |
Short-term investments | 746,060 | 580,538 |
Contracts receivable | 69,357 | 108,043 |
Inventories | 6,801 | 7,489 |
Other current assets | 25,933 | 17,177 |
Total current assets | 962,372 | 797,932 |
Property, plant and equipment, net | 95,439 | 92,845 |
Patents, net | 21,175 | 20,365 |
Deposits and other assets | 5,010 | 1,325 |
Total assets | 1,083,996 | 912,467 |
Current liabilities: | ||
Accounts payable | 23,237 | 21,120 |
Accrued compensation | 8,267 | 24,186 |
Accrued liabilities | 30,870 | 36,013 |
Current portion of long-term obligations | 56 | 1,185 |
Current portion of deferred contract revenue | 108,150 | 51,280 |
Total current liabilities | 170,580 | 133,784 |
Long-term deferred contract revenue | 115,759 | 91,198 |
1 percent convertible senior notes | 508,411 | 500,511 |
Long-term obligations, less current portion | 15,043 | 15,050 |
Long-term financing liability for leased facility | 72,397 | 72,359 |
Total liabilities | 882,190 | 812,902 |
Stockholders' equity: | ||
Common stock, $0.001 par value; 300,000,000 shares authorized, 123,880,559 and 120,351,480 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively | 124 | 122 |
Additional paid-in capital | 1,410,102 | 1,311,229 |
Accumulated other comprehensive loss | (30,460) | (30,358) |
Accumulated deficit | (1,177,960) | (1,181,428) |
Total stockholders' equity | 201,806 | 99,565 |
Total liabilities and stockholders' equity | $ 1,083,996 | $ 912,467 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
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) | 123,880,559 | 120,351,480 |
Common stock, shares outstanding (in shares) | 123,880,559 | 120,351,480 |
1 Percent Convertible Senior Notes [Member] | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Interest rate on convertible senior notes | 1.00% | 1.00% |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Commercial Revenue: | ||
SPINRAZA royalties | $ 5,211 | $ 0 |
Licensing and other royalty revenue | 3,547 | 1,660 |
Total commercial revenue | 8,758 | 1,660 |
Research and development revenue under collaborative agreements | 101,546 | 35,214 |
Total revenue | 110,304 | 36,874 |
Expenses: | ||
Research, development and patent | 82,638 | 80,964 |
Selling, general and administrative | 13,677 | 10,562 |
Total operating expenses | 96,315 | 91,526 |
Income (loss) from operations | 13,989 | (54,652) |
Other income (expense): | ||
Investment income | 2,280 | 1,457 |
Interest expense | (11,363) | (9,490) |
Other expense | (1,438) | 0 |
Income (loss) before income tax expense | 3,468 | (62,685) |
Income tax expense | 0 | (232) |
Net income (loss) | $ 3,468 | $ (62,917) |
Basic net income (loss) per share (in dollars per share) | $ 0.03 | $ (0.52) |
Shares used in computing basic net income (loss) per share (in shares) | 122,861 | 120,598 |
Diluted net income (loss) per share (in dollars per share) | $ 0.03 | $ (0.52) |
Shares used in computing diluted net income (loss) per share (in shares) | 124,972 | 120,598 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) [Abstract] | ||
Net income (loss) | $ 3,468 | $ (62,917) |
Unrealized gains (losses) on securities, net of tax | 266 | (2,550) |
Reclassification adjustment for realized gains included in net income (loss) | (374) | 0 |
Currency translation adjustment | (6) | 0 |
Comprehensive income (loss) | $ 3,354 | $ (65,467) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Operating activities: | ||
Net income (loss) | $ 3,468 | $ (62,917) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation | 1,980 | 1,841 |
Amortization of patents | 393 | 377 |
Amortization of premium on investments, net | 1,608 | 2,039 |
Amortization of debt issuance costs | 396 | 298 |
Amortization of convertible senior notes discount | 7,506 | 5,795 |
Amortization of long-term financing liability for leased facility | 1,675 | 1,672 |
Stock-based compensation expense | 20,912 | 20,103 |
Gain on investment in Regulus Therapeutics, Inc. | (374) | 0 |
Non-cash losses related to patents, licensing and property, plant and equipment | 93 | 396 |
Changes in operating assets and liabilities: | ||
Contracts receivable | 38,686 | (5,124) |
Inventories | 688 | 379 |
Other current and long-term assets | (14,077) | (2,747) |
Accounts payable | 472 | (11,417) |
Accrued compensation | (15,919) | (9,728) |
Accrued liabilities and deferred rent | (6,273) | (1,886) |
Deferred contract revenue | 81,431 | (14,849) |
Net cash provided by (used in) operating activities | 122,665 | (75,768) |
Investing activities: | ||
Purchases of short-term investments | (266,185) | (41,366) |
Proceeds from the sale of short-term investments | 99,223 | 81,805 |
Purchases of property, plant and equipment | (3,237) | (628) |
Acquisition of licenses and other assets, net | (983) | (382) |
Proceeds from the sale of Regulus Therapeutics | 2,507 | 0 |
Net cash (used in) provided by investing activities | (168,675) | 39,429 |
Financing activities: | ||
Proceeds from equity awards | 6,324 | 2,736 |
Proceeds from sale of stock to Novartis | 71,640 | 0 |
Offering costs paid | (778) | 0 |
Principal payments on debt and capital lease obligations | (1,640) | (1,857) |
Net cash provided by financing activities | 75,546 | 879 |
Net increase (decrease) in cash and cash equivalents | 29,536 | (35,460) |
Cash and cash equivalents at beginning of period | 84,685 | 128,797 |
Cash and cash equivalents at end of period | 114,221 | 93,337 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 106 | 31 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Amounts accrued for capital and patent expenditures | 1,648 | 2,524 |
Unpaid deferred offering costs | $ 319 | $ 0 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation We prepared the unaudited interim condensed consolidated financial statements for the three months ended March 31, 2017 and 2016 on the same basis as the audited financial statements for the year ended December 31, 2016. We included all normal recurring adjustments in the financial statements, which we considered 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, 2016 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC. In the condensed consolidated financial statements we included the accounts of Ionis Pharmaceuticals, Inc. and our wholly owned subsidiary, Akcea Therapeutics, Inc., which we formed in December 2014 and its wholly owned subsidiaries, Akcea Therapeutics UK Ltd, which Akcea formed in August 2016 and Akcea Intl Ltd., which Akcea formed in February 2017. Unless the context requires otherwise, “Ionis”, “Company,” “we,” “our,” and “us” refers to Ionis Pharmaceuticals, Inc. and its wholly owned subsidiary, Akcea Therapeutics, Inc. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
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. Commercial Revenue: SPINRAZA royalties and Licensing and other royalty revenue We often enter into agreements to license and sell our proprietary patent rights on an exclusive or non-exclusive basis in exchange for upfront fees, milestone payments and/or royalties. We generally recognize as revenue immediately license payments with stand-alone value when the license is delivered and for which we are reasonably assured of collecting the resulting receivable. We recognize royalty revenue in the period in which the counterparty sells the related product, unless we are unable to obtain information to estimate the royalty. For example, for the first quarter of 2017 we recorded SPINRAZA royalty revenue of $5.2 million. Research and development revenue under collaborative agreements 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. Amendments to agreements From time to time we amend our collaboration agreements. For these agreements, before we identify our deliverables and allocate consideration to each unit of accounting, we must determine if the amendment should be accounted for as a separate agreement, or if the amendment and any undelivered elements for the original agreement should be accounted for as a single new arrangement. For example, in May 2015, we entered into an exclusive license agreement with Bayer to develop and commercialize IONIS-FXI Rx Rx Rx Rx Rx Rx We concluded that the February 2017 amendment should be evaluated with the undelivered elements of the original agreement as a single new arrangement. Under the amendment, there was a substantial increase in the consideration we are eligible to receive and it included a significant change in the deliverables we will provide. As a result, we evaluated our original and 2017 amended agreements with Bayer together to determine our deliverables. We concluded that the 2017 amendment did not impact the items we already delivered to Bayer. 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. 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. For example, our 2017 amended agreement with Bayer has multiple elements. We evaluated the deliverables in this arrangement when we entered into the 2017 amended agreement and determined that certain deliverables have stand-alone value. Below is a list of the three units of accounting under our 2017 amended agreement: ● The exclusive license we granted to Bayer to develop and commercialize IONIS-FXI-L Rx ● The development services we agreed to perform for IONIS-FXI-L Rx Rx ● The remaining undelivered IONIS-FXI Rx We determined that each of these three units of accounting have stand-alone value. The license we granted to Bayer has stand-alone value because it gives Bayer the exclusive right to develop IONIS-FXI-L 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 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. 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. 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 2017 amended Bayer collaboration was $76.3 million, comprised of the $75 million we received as part of the amendment and the remaining amount of the $100 million upfront payment we had not yet recognized into revenue, related to the undelivered API. We allocated the consideration based on the relative BESP of each unit of accounting. We engaged a third party, independent valuation specialist to assist us with determining BESP. We estimated the selling price of the license granted for IONIS-FXI-L Rx Rx ● Estimated future product sales; ● Estimated royalties on future product sales; ● Contractual milestone payments; ● Expenses we expect to incur; ● Income taxes; and ● An appropriate discount rate. We estimated the selling price of the 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 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 API we will use. For purposes of determining BESP of the services we will perform and the API we will deliver in our 2017 amended Bayer transaction, accounting guidance required us to include a markup for a reasonable profit margin. Based on the units of accounting under the 2017 amended agreement, we allocated the $76.3 million of allocable consideration as follows: ● $64.9 million to the IONIS-FXI-L Rx ● $11.0 million for development services for IONIS-FXI-L Rx Rx ● $0.4 IONIS-FXI Rx 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 IONIS-FXI-L 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. For example, we recognized revenue for the exclusive license we granted Bayer for IONIS-FX-L Rx The following are the periods over which we are recognizing revenue for each of our units of accounting under our 2017 amended Bayer agreement: ● We recognized the portion of the consideration attributed to the IONIS-FXI-L Rx ● We are recognizing the amount attributed to the development services for IONIS-FXI-L Rx Rx ● We are recognizing the amount attributed to the remaining API supply as 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 partner. 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, in the first quarter of 2017, we and our wholly owned subsidiary, Akcea, entered into two separate agreements with Novartis at the same time: a collaboration agreement and a stock purchase agreement, or SPA. Akcea entered into a collaboration agreement with Novartis to develop and commercialize AKCEA-APO(a)-L Rx Rx Rx Rx Under the SPA, Novartis purchased 1.6 million shares of Ionis’ common stock for $100 million in the first quarter of 2017 and paid a premium over the weighted average trading price at the time of purchase. Additionally, the SPA requires Novartis to purchase an additional $50 million of common stock in the future. We evaluated the Novartis agreements to determine whether we should treat the agreements separately or as a single arrangement. We considered that the agreements were negotiated concurrently and in contemplation of one another. Additionally, the same individuals were involved in the negotiations of both agreements. Based on these facts and circumstances, we concluded that we should treat both agreements as a single arrangement and evaluate the provisions of the agreements on a combined basis. Refer to Note 6, Collaborative Arrangements and Licensing Agreements Milestone payments Our collaborations often include contractual milestones, which typically relate to the achievement of pre-specified development, regulatory and/ or 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 paragraphs. 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 Investigational New Drug, or IND,-enabling studies, which are animal studies intended to support an 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 authorization from the Food and Drug Administration, or FDA, and/or foreign equivalents. The Phase 3 studies typically involve larger 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 authorization. This stage of the drug’s life-cycle is the regulatory stage. If a drug achieves marketing authorization, 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 marketing authorization 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 authorization such as a New Drug Application, or NDA, in the United States or a Marketing Authorization Application, or MAA, in Europe. Generally, it takes six to twelve months to prepare and submit regulatory filings. ● Marketing authorization in a major market, such as the United States, Europe or Japan. Generally it takes one to two years after an application is submitted to obtain authorization from the applicable regulatory agency. 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. 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 Option to license In several of our collaboration agreements, we provide our partner with an option to obtain a license to one or more of our drugs. When we have a multiple element arrangement that includes an option to obtain a license, we evaluate if the option is a deliverable at the inception of the arrangement. We do not consider the option to be a deliverable if we conclude that it is substantive and not priced at a significant and incremental discount. We consider an option substantive if, at the inception of the arrangement, we are at risk as to whether our collaborative partner will choose to exercise its option to obtain the license. In those circumstances, we do not include the associated license fee in the allocable consideration at the inception of the agreement. Rather, we account for the license fee when our partner exercises its option. For example, during 2016, we earned license fee revenue when three of our partners, AstraZeneca, Biogen and Janssen, exercised their option to license three of our drugs, which under the respective agreements we concluded to be substantive options at inception. As a result, in 2016 we recognized the related revenue immediately in research and development revenue under collaborative agreements on our statement of operations as these amounts relate to drugs in development under research and collaboration arrangements. 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 partner agreement. At March 31, 2017, 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). At March 31, 2017, we held equity investments in one publicly held company, Antisense Therapeutics Limited. 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. At March 31, 2017, we held cost method investments in three companies, Atlantic Pharmaceuticals Limited, Kastle Therapeutics and Dynacure SAS. Realization of our equity position in these private companies 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, or FIFO. 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 three months ended March 31, 2017 and 2016. Total inventory was $6.8 million and $7.5 million as of March 31, 2017 and December 31, 2016, 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 and patent costs 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. For the three months ended March 31, 2017, 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 months ended March 31, 2017, consisted of the following (in thousands except per share amounts): Three months ended March 31, 2017 Income (Numerator) Shares (Denominator) Per-Share Amount Income available to common shareholders $ 3,468 122,861 $ 0.03 Effect of dilutive securities: Shares issuable upon exercise of stock options — 1,674 Shares issuable upon restricted stock award issuance — 377 Shares issuable related to our ESPP — 60 Income available to common shareholders, plus assumed conversions $ 3,468 124,972 $ 0.03 For the three months ended March 31, 2017, the calculation excludes the 1 percent and 2¾ percent notes because the effect on diluted earnings per share was anti-dilutive. For the three months ended March 31, 2016, 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. Common stock from the following would have had an anti-dilutive effect on net loss per share: ● 1 percent convertible senior notes; ● 2¾ percent convertible senior notes; ● Dilutive stock options; ● Unvested restricted stock units; and ● Employee Stock Purchase Plan, or ESPP. Accumulated other comprehensive loss Accumulated other comprehensive loss is primarily 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 (loss) to our condensed consolidated statement of operations. The following table summarizes changes in accumulated other comprehensive income (loss) for the three months ended March 31, 2017 and 2016 (in thousands): Three Months Ended March 31, 2017 2016 Beginning balance accumulated other comprehensive loss $ (30,358 ) $ (13,565 ) Unrealized losses on securities, net of tax (1) 266 (2,550 ) Amounts reclassified from accumulated other comprehensive income (2) (374 ) — Currency translation adjustment 6 — Net current period other comprehensive loss (102 ) (2,550 ) Ending balance accumulated other comprehensive loss $ (30,460 ) $ (16,115 ) (1) There was no tax benefit for other comprehensive loss for the three months ended March 31, 2017 and 2016. (2) Amounts are included in investment income 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 assigned 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 our debt issuance costs and debt discount over the life of the convertible notes as additional non-cash interest expense utilizing the effective interest method. Segment information We have two operating segments, our Ionis Core segment and Akcea Therapeutics, which includes the operations of our wholly owned subsidiary, Akcea Therapeutics, Inc. We formed Akcea to develop and commercialize drugs for patients with serious cardiometabolic diseases caused by lipid disorders. We provide segment financial information and results for our Ionis 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 measure stock-based compensation expense for equity-classified awards, principally related to stock options, restricted stock units, or RSUs, and stock purchase rights under our ESPP, based on the estimated fair value of the award on the date of grant. We recognize the value of the portion of the award that we ultimately expect to vest as stock-based compensation expense over the requisite service period in our condensed consolidated statements of operations. We reduce stock-based compensation expense for estimated forfeitures at the time of grant and revise in subsequent periods if actual forfeitures differ from those estimates. 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 three months ended March 31, 2017 and 2016, we used the following weighted-average assumptions in our Black-Scholes calculations: Employee Stock Options: Three Months Ended March 31, 2017 2016 Risk-free interest rate 1.8% 1.5% Dividend yield 0.0% 0.0% Volatility 66.3% 57.9% Expected life 4.5 years 4.5 years ESPP: Three Months Ended March 31, 2017 2016 Risk-free interest rate 0.7% 0.5% Dividend yield 0.0% 0.0% Volatility 66.5% 69.4% 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 three months ended March 31, 2017 was $48.09 per share. We did not grant stock options or RSUs to our Board of Directors during the three months ended March 31, 2017 and 2016. The following table summarizes stock-based compensation expense for the three months ended March 31, 2017 and 2016 (in thousands). Our consolidated non-cash stock-based compensation expense includes $3.2 million of stock-based compensation expense for Akcea employees for each of the three months ended March 31, 2017 and 2016. Three Months Ended March 31, 2017 2016 Research, development and patent $ 16,122 $ 14,770 Selling, general and administrative 4,790 5,333 Total $ 20,912 $ 20,103 As of March 31, 2017, total unrecognized estimated non-cash stock-based compensation expense related to non-vested stock options and RSUs was $91.8 million and $25.6 million, respectively. We will adjust total unrecognized compensation cost for future 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 1.5 years and 1.8 years, respectively. Impact of recently issued accounting standards In May 2014, the FASB issued accounting guidance on the recognition of revenue from custome |
Investments
Investments | 3 Months Ended |
Mar. 31, 2017 | |
Investments [Abstract] | |
Investments | 3. Investments As of March 31, 2017, we had 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 March 31, 2017: One year or less 64% After one year but within two years 24% After two years but within three and a half years 12% Total 100% As illustrated above, at March 31, 2017, 88 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 March 31, 2017, we had an ownership interest of less than 20 percent in three private companies and one public company with which we conduct business. The privately-held companies are Atlantic Pharmaceuticals Limited, Kastle and Dynacure and the publicly-traded company is Antisense Therapeutics Limited. We account for equity investments in the privately-held companies under the cost method of accounting and we account for equity investments in the publicly-traded company 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 March 31, 2017 Cost Gains Losses Estimated Fair Value Available-for-sale securities: Corporate debt securities (2) $ 341,043 $ 18 $ (405 ) $ 340,656 Debt securities issued by U.S. government agencies 64,784 2 (72 ) 64,714 Debt securities issued by the U.S. Treasury (2) 23,297 — (19 ) 23,278 Debt securities issued by states of the U.S. and political subdivisions of the states (2) 55,828 2 (116 ) 55,714 Total securities with a maturity of one year or less 484,952 22 (612 ) 484,362 Corporate debt securities 189,152 49 (833 ) 188,368 Debt securities issued by U.S. government agencies 25,670 — (124 ) 25,546 Debt securities issued by the U.S. Treasury 3,497 — (1 ) 3,496 Debt securities issued by states of the U.S. and political subdivisions of the states 55,101 16 (291 ) 54,826 Total securities with a maturity of more than one year 273,420 65 (1,249 ) 272,236 Total available-for-sale securities $ 758,372 $ 87 $ (1,861 ) $ 756,598 Gross Unrealized December 31, 2016 Cost Gains Losses Estimated Fair Value Available-for-sale securities: Corporate debt securities $ 195,087 $ 25 $ (161 ) $ 194,951 Debt securities issued by U.S. government agencies 26,548 — (10 ) 26,538 Debt securities issued by the U.S. Treasury 29,298 2 (14 ) 29,286 Debt securities issued by states of the U.S. and political subdivisions of the states (2) 72,775 2 (134 ) 72,643 Total securities with a maturity of one year or less 323,708 29 (319 ) 323,418 Corporate debt securities 202,408 36 (1,174 ) 201,270 Debt securities issued by U.S. government agencies 28,807 1 (167 ) 28,641 Debt securities issued by states of the U.S. and political subdivisions of the states 36,816 1 (349 ) 36,468 Total securities with a maturity of more than one year 268,031 38 (1,690 ) 266,379 Total available-for-sale securities $ 591,739 $ 67 $ (2,009 ) $ 589,797 Equity securities: Regulus Therapeutics Inc. $ 2,133 $ 281 $ — $ 2,414 Total equity securities $ 2,133 $ 281 $ — $ 2,414 Total available-for-sale and equity securities $ 593,872 $ 348 $ (2,009 ) $ 592,211 (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 consider to be temporarily impaired at March 31, 2017 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 354 $ 421,288 $ (1,180 ) $ 22,387 $ (58 ) $ 443,675 $ (1,238 ) Debt securities issued by U.S. government agencies 41 84,017 (196 ) — — 84,017 (196 ) Debt securities issued by the U.S. Treasury 4 25,773 (20 ) — — 25,773 (20 ) Debt securities issued by states of the U.S. and political subdivisions of the states 97 90,816 (336 ) 4,916 (71 ) 95,732 (407 ) Total temporarily impaired securities 496 $ 621,894 $ (1,732 ) $ 27,303 $ (129 ) $ 649,197 $ (1,861 ) We believe that the decline in value of these securities is temporary and is 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 our debt securities to maturity. Therefore, we anticipate full recovery of our debt securities’ amortized cost basis at maturity. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
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. We classify the majority of our securities 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 three months ended March 31, 2017, there were no transfers between our Level 1 and Level 2 investments. When we recognize transfers between levels of the fair value hierarchy, we recognize the transfer on the date the event or change in circumstances that caused the transfer occurs. The following tables present the major security types we held at March 31, 2017 and December 31, 2016 that are regularly measured and carried at fair value. The tables segregate each security type by the level within the fair value hierarchy of the valuation techniques we utilized to determine the respective securities’ fair value (in thousands): At March 31, 2017 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Cash equivalents (1) $ 100,318 $ 100,318 $ — Corporate debt securities (2) 529,024 — 529,024 Debt securities issued by U.S. government agencies (3) 90,260 — 90,260 Debt securities issued by the U.S. Treasury (4) 26,774 26,774 — Debt securities issued by states of the U.S. and political subdivisions of the states (5) 110,540 — 110,540 Total $ 856,916 $ 127,092 $ 729,824 At December 31, 2016 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Cash equivalents (1) $ 54,137 $ 54,137 $ — Corporate debt securities (3) 396,221 — 396,221 Debt securities issued by U.S. government agencies (3) 55,179 — 55,179 Debt securities issued by the U.S. Treasury (3) 29,286 29,286 — Debt securities issued by states of the U.S. and political subdivisions of the states (5) 109,111 — 109,111 Investment in Regulus Therapeutics Inc. 2,414 2,414 — Total $ 646,348 $ 85,837 $ 560,511 (1) Included in cash and cash equivalents on our condensed consolidated balance sheet. (2) At March 31, 2017, $6.8 million was 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. (3) Included in short-term investments on our condensed consolidated balance sheet. (4) At March 31, 2017, $1.0 million was 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) At March 31, 2017 and December 31, 2016, $2.7 million and $9.3 million, respectively, were 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. Other Fair Value Disclosures Novartis Future Stock Purchase In January 2017, we and Akcea entered into a SPA with Novartis. As part of the SPA, Novartis is required to purchase $50 million of common stock in the future. Novartis will make this purchase either in Akcea’s common stock at the IPO price if an IPO occurs under certain conditions, in our common stock at a premium if an IPO does not occur by April 2018, or in a combination of both of these under certain conditions. If an IPO does not occur within the required timeframe, Novartis is required to purchase our common stock at a premium calculated in the same manner as Novartis’ initial investment. Therefore, at the inception of the SPA, we recorded a $5.0 million asset representing the fair value of the potential future premium we will receive if Novartis purchases our common stock. We determined the fair value of the future premium by calculating the value based on the stated premium in the SPA and estimating the probability of an Akcea IPO. We also included a lack of marketability discount when we determined the fair value of the premium because we will issue unregistered shares to Novartis if they purchase our common stock. We measured this asset using Level 3 inputs and recorded it in other assets on our condensed consolidated balance sheet. At the end of each period prior to an Akcea IPO or the purchase by Novartis of our common stock, we will remeasure the fair value of this asset and record an adjustment to other income/expense change in value. The following is a reconciliation of the potential premium we may receive measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2017 (in thousands): Beginning balance of Level 3 asset (at December 31, 2016) $ — Value of the potential premium we will receive from Novartis at inception of the SPA (January 2017) 5,035 Recurring fair value adjustment at March 31, 2017 (1,438 ) Ending balance of Level 3 asset (at March 31, 2017) $ 3,597 At December 31, 2016 we did not have any financial instruments that were valued using Level 3 inputs. Convertible Notes Our 1 percent notes had a fair value of $661.9 million at March 31, 2017. We determine the fair value of our notes based on quoted market prices for these notes, which are Level 2 measurements because the notes do not trade regularly. |
Line of Credit Arrangement
Line of Credit Arrangement | 3 Months Ended |
Mar. 31, 2017 | |
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. We amended the credit agreement in February 2016 to increase the amount available for us to borrow. Under the amended credit agreement, we can borrow up to a maximum of $30 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 borrowing 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 percent for a period of one, two, three, four, six, or twelve months as elected by us; or (iii) a fixed rate equal to the LIBOR swap rate during the period of the loan. Additionally, we pay 0.25 percent per annum, payable quarterly in arrears, for any amount unused under the credit facility. As of March 31, 2017 we had $12.5 million in outstanding borrowings under the credit facility with a 2.31 percent fixed interest rate and a maturity date of September 2019, which we used to fund our capital equipment needs consistent with our historical practice to finance these costs. The credit agreement includes customary affirmative and negative covenants and restrictions. We are in compliance with all covenants of the credit agreement. |
Collaborative Arrangements and
Collaborative Arrangements and Licensing Agreements | 3 Months Ended |
Mar. 31, 2017 | |
Collaborative Arrangements and Licensing Agreements [Abstract] | |
Collaborative Arrangements and Licensing Agreements | 6. Collaborative Arrangements and Licensing Agreements Below, we have included our collaborations with substantive changes during the first three months of 2017 from those included in Note 6 of our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016. Strategic Partnership Biogen We have several strategic collaborations with Biogen focused on using antisense technology to advance the treatment of neurological disorders. These collaborations combine our expertise in creating antisense drugs with Biogen's expertise in developing therapies for neurological disorders. We developed and licensed to Biogen SPINRAZA, our approved drug to treat pediatric and adult patients with SMA. Additionally, we and Biogen are currently developing four other drugs to treat neurodegenerative diseases under these collaborations, including IONIS-SOD1 Rx Rx Rx Rx Rx During the three months ended March 31, 2017, we earned revenue of $20.4 million from our relationship with Biogen, including $5 million we earned in the first quarter of 2017 for validation of an undisclosed neurological disease target and SPINRAZA royalties. Our revenue from Biogen represented 18 percent of our total revenue for the three months ended March 31, 2017. In comparison, we earned revenue of $21.3 million for the same period in 2016, which represented 58 percent of our total revenue for that period. Our condensed consolidated balance sheet at March 31, 2017 included deferred revenue of $57.7 million related to our relationship with Biogen. Research, Development and Commercialization Partners Bayer In May 2015, we entered into an exclusive license agreement with Bayer to develop and commercialize IONIS-FXI Rx Rx Rx Rx In February 2017, we amended our agreement with Bayer to advance IONIS-FXI Rx Rx Rx Rx Rx Rx Rx During the three months ended March 31, 2017, we earned revenue of $65.5 million from our relationship with Bayer, which represented 59 percent of our total revenue for that period. In comparison, we earned revenue of $1.3 million for the same period in 2016, which represented three percent of our total revenue for that period. Our condensed consolidated balance sheet at March 31, 2017 included no deferred revenue related to our relationship with Bayer because we received the $75 million payment in April 2017. Novartis In January 2017, we and Akcea initiated a collaboration with Novartis to develop and commercialize AKCEA-APO(a)-L Rx Rx Rx Rx Akcea received a $75 million upfront payment in the first quarter of 2017, of which it will retain $60 million and will pay us $15 million as a sublicense fee. If Novartis exercises its option for a drug, Novartis will pay Akcea a license fee equal to $150 million for each drug it licenses. In addition, for AKCEA-APO(a)-L Rx Rx Rx Rx The agreement with Novartis will continue until the earlier of the date that all of Novartis’ options to obtain the exclusive licenses under the agreement expire unexercised or, if Novartis exercises its options, until the expiration of all payment obligations under the agreement. In addition, the agreement as a whole or with respect to any drug under the agreement, may terminate early under the following situations: ● Novartis may terminate the agreement as a whole or with respect to any drug at any time by providing written notice to us; ● Either we or Novartis may terminate the agreement with respect to any drug by providing written notice to the other party in good faith that we or Novartis has determined that the continued development or commercialization of the drug presents safety concerns that pose an unacceptable risk or threat of harm in humans or would violate any applicable law, ethical principles, or principles of scientific integrity; ● Either we or Novartis may terminate the agreement for a drug by providing written notice to the other party upon the other party’s uncured failure to perform a material obligation related to the drug under the agreement, or the entire agreement if the other party becomes insolvent; and ● We may terminate the agreement if Novartis disputes or assists a third party to dispute the validity of any of our patents. In conjunction with this collaboration, we and Akcea entered into a SPA with Novartis. As part of the SPA, Novartis purchased 1.6 million shares of our common stock for $100 million in the first quarter of 2017. Additionally, the SPA requires Novartis to purchase an additional $50 million of common stock in the future. Subject to the terms of the SPA, Novartis will make this purchase either in Akcea’s common stock at the IPO price if an IPO occurs under certain conditions, in our common stock at a premium if an IPO does not occur by April 2018, or in a combination of both of these under certain conditions. If an IPO does not occur within the required timeframe, Novartis is required to purchase our common stock at a premium calculated in the same manner as Novartis' initial investment. To determine the amount of revenue to recognize under our agreements with Novartis, we first concluded that we would account for the collaboration and SPA agreements as a single multiple element arrangement. We next identified four separate units of accounting under the arrangement, each with stand-alone value.: ● Development services for AKCEA-APO(a)-L Rx ● Development services for AKCEA-APOCIII-L Rx ● API for AKCEA-APO(a)-L Rx ● API for AKCEA-APOCIII-L Rx We then determined the total consideration under the arrangement was $180.0 million, which included the following: ● $75 million from the upfront payment; ● $100 million our common stock Novartis purchased under the SPA, including $28.4 million for the premium paid by Novartis for its purchase of our common stock at a premium in the first quarter of 2017; and ● $5.0 million for the potential premium Novartis will pay if they purchase our common stock in the future. We first allocated $71.6 million of the consideration to equity based on the fair value of our common stock Novartis purchased. Next, we allocated the remaining consideration of $108.4 million based on the relative stand-alone selling price of each unit of accounting as follows: ● $64.0 million for the development services for AKCEA-APO(a)-L Rx ; ● $40.1 million for the development services for AKCEA-APOCIII-L Rx ● $1.5 Rx ● $2.8 Rx We are recognizing the amount attributed to the development services for AKCEA-APO(a)-L Rx Rx During the three months ended March 31, 2017, we earned revenue of $9.6 million from our relationship with Novartis. Our condensed consolidated balance sheet at March 31, 2017 included deferred revenue of $98.8 million related to our relationship with Novartis. |
Segment Information and Concent
Segment Information and Concentration of Business Risk | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information and Concentration of Business Risk [Abstract] | |
Segment Information and Concentration of Business Risk | 7. Segment Information and Concentration of Business Risk We have two reportable segments Ionis Core and Akcea Therapeutics, our wholly owned subsidiary. Segment income (loss) from operations includes revenue less operating expenses attributable to each segment. In our Ionis Core segment we are exploiting a novel drug discovery platform we created to generate a broad pipeline of first-in-class and/or best-in-class drugs for us and our partners. Our Ionis Core segment generates revenue from a multifaceted partnering strategy. We formed Akcea to develop and commercialize drugs for patients with serious cardiometabolic diseases caused by lipid disorders. Moving our lipid drugs into a company that we own ensures that our core focus at Ionis remains on innovation while allowing us to maintain control over and retain more value from our lipid drugs. The following table shows our segment revenue and loss from operations for the three months ended March 31, 2017 and March 31, 2016 (in thousands), respectively. March 31, 2017 Ionis Core Akcea Therapeutics Elimination of Intercompany Activity Total Revenue: Commercial revenue: SPINRAZA royalties 5,211 — — 5,211 Licensing and other royalty revenue 3,547 — — 3,547 Total commercial revenue 8,758 — — 8,758 R&D revenue under collaborative agreements $ 143,425 $ 9,597 $ (51,476 ) $ 101,546 Total segment revenue $ 152,183 $ 9,597 $ (51,476 ) $ 110,304 Income (loss) from operations $ 73,832 $ (59,873 ) $ 30 $ 13,989 March 31, 2016 Ionis Core Akcea Therapeutics Elimination of Intercompany Activity Total Revenue: R&D revenue under collaborative agreements $ 35,214 $ — $ — $ 35,214 Licensing and other royalty revenue 1,660 — — 1,660 Total segment revenue $ 36,874 $ — $ — $ 36,874 Loss from operations $ (38,567 ) $ (16,049 ) $ (36 ) $ (54,652 ) The following table shows our total assets by segment at March 31, 2017 and December 31, 2016 (in thousands), respectively. Total Assets Ionis Core Akcea Therapeutics Elimination of Intercompany Activity Total March 31, 2017 $ 1,202,164 $ 132,982 $ (251,150 ) $ 1,083,996 December 31, 2016 $ 1,067,770 $ 10,684 $ (165,987 ) $ 912,467 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 March 31, 2017 2016 Partner A 59 % 3 % Partner B 18 % 58 % Partner C 4 % 14 % Contracts receivables from one significant partner comprised approximately 92 percent of our contracts receivables at March 31, 2017. Contracts receivables from two significant partners comprised approximately 92 percent of our contracts receivables at December 31, 2016. |
Significant Accounting Polici14
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
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. Commercial Revenue: SPINRAZA royalties and Licensing and other royalty revenue We often enter into agreements to license and sell our proprietary patent rights on an exclusive or non-exclusive basis in exchange for upfront fees, milestone payments and/or royalties. We generally recognize as revenue immediately license payments with stand-alone value when the license is delivered and for which we are reasonably assured of collecting the resulting receivable. We recognize royalty revenue in the period in which the counterparty sells the related product, unless we are unable to obtain information to estimate the royalty. For example, for the first quarter of 2017 we recorded SPINRAZA royalty revenue of $5.2 million. Research and development revenue under collaborative agreements 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. Amendments to agreements From time to time we amend our collaboration agreements. For these agreements, before we identify our deliverables and allocate consideration to each unit of accounting, we must determine if the amendment should be accounted for as a separate agreement, or if the amendment and any undelivered elements for the original agreement should be accounted for as a single new arrangement. For example, in May 2015, we entered into an exclusive license agreement with Bayer to develop and commercialize IONIS-FXI Rx Rx Rx Rx Rx Rx We concluded that the February 2017 amendment should be evaluated with the undelivered elements of the original agreement as a single new arrangement. Under the amendment, there was a substantial increase in the consideration we are eligible to receive and it included a significant change in the deliverables we will provide. As a result, we evaluated our original and 2017 amended agreements with Bayer together to determine our deliverables. We concluded that the 2017 amendment did not impact the items we already delivered to Bayer. 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. 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. For example, our 2017 amended agreement with Bayer has multiple elements. We evaluated the deliverables in this arrangement when we entered into the 2017 amended agreement and determined that certain deliverables have stand-alone value. Below is a list of the three units of accounting under our 2017 amended agreement: ● The exclusive license we granted to Bayer to develop and commercialize IONIS-FXI-L Rx ● The development services we agreed to perform for IONIS-FXI-L Rx Rx ● The remaining undelivered IONIS-FXI Rx We determined that each of these three units of accounting have stand-alone value. The license we granted to Bayer has stand-alone value because it gives Bayer the exclusive right to develop IONIS-FXI-L 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 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. 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. 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 2017 amended Bayer collaboration was $76.3 million, comprised of the $75 million we received as part of the amendment and the remaining amount of the $100 million upfront payment we had not yet recognized into revenue, related to the undelivered API. We allocated the consideration based on the relative BESP of each unit of accounting. We engaged a third party, independent valuation specialist to assist us with determining BESP. We estimated the selling price of the license granted for IONIS-FXI-L Rx Rx ● Estimated future product sales; ● Estimated royalties on future product sales; ● Contractual milestone payments; ● Expenses we expect to incur; ● Income taxes; and ● An appropriate discount rate. We estimated the selling price of the 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 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 API we will use. For purposes of determining BESP of the services we will perform and the API we will deliver in our 2017 amended Bayer transaction, accounting guidance required us to include a markup for a reasonable profit margin. Based on the units of accounting under the 2017 amended agreement, we allocated the $76.3 million of allocable consideration as follows: ● $64.9 million to the IONIS-FXI-L Rx ● $11.0 million for development services for IONIS-FXI-L Rx Rx ● $0.4 IONIS-FXI Rx 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 IONIS-FXI-L 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. For example, we recognized revenue for the exclusive license we granted Bayer for IONIS-FX-L Rx The following are the periods over which we are recognizing revenue for each of our units of accounting under our 2017 amended Bayer agreement: ● We recognized the portion of the consideration attributed to the IONIS-FXI-L Rx ● We are recognizing the amount attributed to the development services for IONIS-FXI-L Rx Rx ● We are recognizing the amount attributed to the remaining API supply as 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 partner. 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, in the first quarter of 2017, we and our wholly owned subsidiary, Akcea, entered into two separate agreements with Novartis at the same time: a collaboration agreement and a stock purchase agreement, or SPA. Akcea entered into a collaboration agreement with Novartis to develop and commercialize AKCEA-APO(a)-L Rx Rx Rx Rx Under the SPA, Novartis purchased 1.6 million shares of Ionis’ common stock for $100 million in the first quarter of 2017 and paid a premium over the weighted average trading price at the time of purchase. Additionally, the SPA requires Novartis to purchase an additional $50 million of common stock in the future. We evaluated the Novartis agreements to determine whether we should treat the agreements separately or as a single arrangement. We considered that the agreements were negotiated concurrently and in contemplation of one another. Additionally, the same individuals were involved in the negotiations of both agreements. Based on these facts and circumstances, we concluded that we should treat both agreements as a single arrangement and evaluate the provisions of the agreements on a combined basis. Refer to Note 6, Collaborative Arrangements and Licensing Agreements Milestone payments Our collaborations often include contractual milestones, which typically relate to the achievement of pre-specified development, regulatory and/ or 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 paragraphs. 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 Investigational New Drug, or IND,-enabling studies, which are animal studies intended to support an 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 authorization from the Food and Drug Administration, or FDA, and/or foreign equivalents. The Phase 3 studies typically involve larger 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 authorization. This stage of the drug’s life-cycle is the regulatory stage. If a drug achieves marketing authorization, 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 marketing authorization 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 authorization such as a New Drug Application, or NDA, in the United States or a Marketing Authorization Application, or MAA, in Europe. Generally, it takes six to twelve months to prepare and submit regulatory filings. ● Marketing authorization in a major market, such as the United States, Europe or Japan. Generally it takes one to two years after an application is submitted to obtain authorization from the applicable regulatory agency. 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. 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 Option to license In several of our collaboration agreements, we provide our partner with an option to obtain a license to one or more of our drugs. When we have a multiple element arrangement that includes an option to obtain a license, we evaluate if the option is a deliverable at the inception of the arrangement. We do not consider the option to be a deliverable if we conclude that it is substantive and not priced at a significant and incremental discount. We consider an option substantive if, at the inception of the arrangement, we are at risk as to whether our collaborative partner will choose to exercise its option to obtain the license. In those circumstances, we do not include the associated license fee in the allocable consideration at the inception of the agreement. Rather, we account for the license fee when our partner exercises its option. For example, during 2016, we earned license fee revenue when three of our partners, AstraZeneca, Biogen and Janssen, exercised their option to license three of our drugs, which under the respective agreements we concluded to be substantive options at inception. As a result, in 2016 we recognized the related revenue immediately in research and development revenue under collaborative agreements on our statement of operations as these amounts relate to drugs in development under research and collaboration arrangements. |
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 partner agreement. At March 31, 2017, 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). At March 31, 2017, we held equity investments in one publicly held company, Antisense Therapeutics Limited. 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. At March 31, 2017, we held cost method investments in three companies, Atlantic Pharmaceuticals Limited, Kastle Therapeutics and Dynacure SAS. Realization of our equity position in these private companies 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, or FIFO. 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 three months ended March 31, 2017 and 2016. Total inventory was $6.8 million and $7.5 million as of March 31, 2017 and December 31, 2016, 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 and patent costs 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. For the three months ended March 31, 2017, 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 months ended March 31, 2017, consisted of the following (in thousands except per share amounts): Three months ended March 31, 2017 Income (Numerator) Shares (Denominator) Per-Share Amount Income available to common shareholders $ 3,468 122,861 $ 0.03 Effect of dilutive securities: Shares issuable upon exercise of stock options — 1,674 Shares issuable upon restricted stock award issuance — 377 Shares issuable related to our ESPP — 60 Income available to common shareholders, plus assumed conversions $ 3,468 124,972 $ 0.03 For the three months ended March 31, 2017, the calculation excludes the 1 percent and 2¾ percent notes because the effect on diluted earnings per share was anti-dilutive. For the three months ended March 31, 2016, 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. Common stock from the following would have had an anti-dilutive effect on net loss per share: ● 1 percent convertible senior notes; ● 2¾ percent convertible senior notes; ● Dilutive stock options; ● Unvested restricted stock units; and ● Employee Stock Purchase Plan, or ESPP. |
Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss Accumulated other comprehensive loss is primarily 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 (loss) to our condensed consolidated statement of operations. The following table summarizes changes in accumulated other comprehensive income (loss) for the three months ended March 31, 2017 and 2016 (in thousands): Three Months Ended March 31, 2017 2016 Beginning balance accumulated other comprehensive loss $ (30,358 ) $ (13,565 ) Unrealized losses on securities, net of tax (1) 266 (2,550 ) Amounts reclassified from accumulated other comprehensive income (2) (374 ) — Currency translation adjustment 6 — Net current period other comprehensive loss (102 ) (2,550 ) Ending balance accumulated other comprehensive loss $ (30,460 ) $ (16,115 ) (1) There was no tax benefit for other comprehensive loss for the three months ended March 31, 2017 and 2016. (2) Amounts are included in investment income 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 assigned 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 our debt issuance costs and debt discount over the life of the convertible notes as additional non-cash interest expense utilizing the effective interest method. |
Segment Information | Segment information We have two operating segments, our Ionis Core segment and Akcea Therapeutics, which includes the operations of our wholly owned subsidiary, Akcea Therapeutics, Inc. We formed Akcea to develop and commercialize drugs for patients with serious cardiometabolic diseases caused by lipid disorders. We provide segment financial information and results for our Ionis 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 measure stock-based compensation expense for equity-classified awards, principally related to stock options, restricted stock units, or RSUs, and stock purchase rights under our ESPP, based on the estimated fair value of the award on the date of grant. We recognize the value of the portion of the award that we ultimately expect to vest as stock-based compensation expense over the requisite service period in our condensed consolidated statements of operations. We reduce stock-based compensation expense for estimated forfeitures at the time of grant and revise in subsequent periods if actual forfeitures differ from those estimates. 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 three months ended March 31, 2017 and 2016, we used the following weighted-average assumptions in our Black-Scholes calculations: Employee Stock Options: Three Months Ended March 31, 2017 2016 Risk-free interest rate 1.8% 1.5% Dividend yield 0.0% 0.0% Volatility 66.3% 57.9% Expected life 4.5 years 4.5 years ESPP: Three Months Ended March 31, 2017 2016 Risk-free interest rate 0.7% 0.5% Dividend yield 0.0% 0.0% Volatility 66.5% 69.4% 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 three months ended March 31, 2017 was $48.09 per share. We did not grant stock options or RSUs to our Board of Directors during the three months ended March 31, 2017 and 2016. The following table summarizes stock-based compensation expense for the three months ended March 31, 2017 and 2016 (in thousands). Our consolidated non-cash stock-based compensation expense includes $3.2 million of stock-based compensation expense for Akcea employees for each of the three months ended March 31, 2017 and 2016. Three Months Ended March 31, 2017 2016 Research, development and patent $ 16,122 $ 14,770 Selling, general and administrative 4,790 5,333 Total $ 20,912 $ 20,103 As of March 31, 2017, total unrecognized estimated non-cash stock-based compensation expense related to non-vested stock options and RSUs was $91.8 million and $25.6 million, respectively. We will adjust total unrecognized compensation cost for future 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 1.5 years and 1.8 years, respectively. |
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 to receive in exchange for the goods or services. Under the current accounting guidance, we recognize revenue from milestone payments we earn under the milestone method. Under the new guidance, the milestone method of revenue recognition is eliminated. This new 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 will adopt this guidance beginning 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 approach, meaning the cumulative effect of applying the guidance would be recognized as an adjustment to our opening accumulated deficit balance. As we have a significant number of collaborations that span several years with associated revenue, we are currently evaluating which adoption method we will use and assessing the impact the adoption will have on our consolidated financial statements and disclosures. In January 2016, the FASB issued amended accounting guidance related to the recognition, measurement, presentation, and disclosure of certain financial instruments. The amended guidance requires us to measure and record equity investments, except those accounted for under the equity method of accounting that have a readily determinable fair value, at fair value and for us to recognize the changes in fair value in our net income (loss), instead of recognizing unrealized gains and losses through accumulated other comprehensive income, as we currently do under the existing guidance. The amended guidance also changes several disclosure requirements for financial instruments, including the methods and significant assumptions we use to estimate fair value. The guidance is effective for fiscal years, and interim periods within that year, beginning after December 15, 2017. We will adopt this guidance on January 1, 2018 and we will make any adjustments to beginning balances through a cumulative-effect adjustment to accumulated deficit on that date. We are currently determining the effects the adoption will have on our consolidated financial statements and disclosures. In February 2016, the FASB issued amended accounting guidance related to lease accounting, which requires us to record all leases with a term longer than one year on our balance sheet. When we record leases on our balance sheet under the new guidance, we will record a liability with a value equal to the present value of payments we will make over the life of the lease and an asset representing the underlying leased asset. The new accounting guidance requires us to determine if our leases are operating or financing leases, similar to current accounting guidance. We will record expense for operating type leases on a straight-line basis as an operating expense and we will record expense for finance type leases as interest expense. The new lease standard is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. We must adopt the new standard on a modified retrospective basis, which requires us to reflect our leases on our consolidated balance sheet for the earliest comparative period presented. We are currently assessing the timing of adoption as well as the effects it will have on our consolidated financial statements and disclosures. In June 2016, the FASB issued guidance that changes the measurement of credit losses for most financial assets and certain other instruments. If we have credit losses, this updated guidance requires us to record allowances for these instruments under a new expected credit loss model. This model requires us to estimate the expected credit loss of an instrument over its lifetime, which represents the portion of the amortized cost basis we do not expect to collect. This change will result in us remeasuring our allowance in each reporting period we have credit losses. The new standard is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for periods beginning after December 15, 2018. When we adopt the new standard, we will make any adjustments to beginning balances through a cumulative-effect adjustment to accumulated deficit on that date. We are currently assessing the timing of adoption as well as the effects it will have on our consolidated financial statements and disclosures. |
Significant Accounting Polici15
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Significant Accounting Policies [Abstract] | |
Basic and Diluted Net Income 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. For the three months ended March 31, 2017, 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 months ended March 31, 2017, consisted of the following (in thousands except per share amounts): Three months ended March 31, 2017 Income (Numerator) Shares (Denominator) Per-Share Amount Income available to common shareholders $ 3,468 122,861 $ 0.03 Effect of dilutive securities: Shares issuable upon exercise of stock options — 1,674 Shares issuable upon restricted stock award issuance — 377 Shares issuable related to our ESPP — 60 Income available to common shareholders, plus assumed conversions $ 3,468 124,972 $ 0.03 |
Changes in Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss is primarily 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 (loss) to our condensed consolidated statement of operations. The following table summarizes changes in accumulated other comprehensive income (loss) for the three months ended March 31, 2017 and 2016 (in thousands): Three Months Ended March 31, 2017 2016 Beginning balance accumulated other comprehensive loss $ (30,358 ) $ (13,565 ) Unrealized losses on securities, net of tax (1) 266 (2,550 ) Amounts reclassified from accumulated other comprehensive income (2) (374 ) — Currency translation adjustment 6 — Net current period other comprehensive loss (102 ) (2,550 ) Ending balance accumulated other comprehensive loss $ (30,460 ) $ (16,115 ) (1) There was no tax benefit for other comprehensive loss for the three months ended March 31, 2017 and 2016. (2) Amounts are included in investment income on our condensed consolidated statement of operations. |
Significant Accounting Policies [Abstract] | |
Weighted-Average Assumptions - ESPP | ESPP: Three Months Ended March 31, 2017 2016 Risk-free interest rate 0.7% 0.5% Dividend yield 0.0% 0.0% Volatility 66.5% 69.4% Expected life 6 months 6 months |
Stock-Based Compensation Expense | The following table summarizes stock-based compensation expense for the three months ended March 31, 2017 and 2016 (in thousands). Our consolidated non-cash stock-based compensation expense includes $3.2 million of stock-based compensation expense for Akcea employees for each of the three months ended March 31, 2017 and 2016. Three Months Ended March 31, 2017 2016 Research, development and patent $ 16,122 $ 14,770 Selling, general and administrative 4,790 5,333 Total $ 20,912 $ 20,103 |
Employee Stock Options [Member] | |
Significant Accounting Policies [Abstract] | |
Weighted-Average Assumptions | 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 three months ended March 31, 2017 and 2016, we used the following weighted-average assumptions in our Black-Scholes calculations: Employee Stock Options: Three Months Ended March 31, 2017 2016 Risk-free interest rate 1.8% 1.5% Dividend yield 0.0% 0.0% Volatility 66.3% 57.9% Expected life 4.5 years 4.5 years |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
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 March 31, 2017: One year or less 64% After one year but within two years 24% After two years but within three and a half years 12% Total 100% |
Summary of Investments | The following is a summary of our investments (in thousands): Gross Unrealized March 31, 2017 Cost Gains Losses Estimated Fair Value Available-for-sale securities: Corporate debt securities (2) $ 341,043 $ 18 $ (405 ) $ 340,656 Debt securities issued by U.S. government agencies 64,784 2 (72 ) 64,714 Debt securities issued by the U.S. Treasury (2) 23,297 — (19 ) 23,278 Debt securities issued by states of the U.S. and political subdivisions of the states (2) 55,828 2 (116 ) 55,714 Total securities with a maturity of one year or less 484,952 22 (612 ) 484,362 Corporate debt securities 189,152 49 (833 ) 188,368 Debt securities issued by U.S. government agencies 25,670 — (124 ) 25,546 Debt securities issued by the U.S. Treasury 3,497 — (1 ) 3,496 Debt securities issued by states of the U.S. and political subdivisions of the states 55,101 16 (291 ) 54,826 Total securities with a maturity of more than one year 273,420 65 (1,249 ) 272,236 Total available-for-sale securities $ 758,372 $ 87 $ (1,861 ) $ 756,598 Gross Unrealized December 31, 2016 Cost Gains Losses Estimated Fair Value Available-for-sale securities: Corporate debt securities $ 195,087 $ 25 $ (161 ) $ 194,951 Debt securities issued by U.S. government agencies 26,548 — (10 ) 26,538 Debt securities issued by the U.S. Treasury 29,298 2 (14 ) 29,286 Debt securities issued by states of the U.S. and political subdivisions of the states (2) 72,775 2 (134 ) 72,643 Total securities with a maturity of one year or less 323,708 29 (319 ) 323,418 Corporate debt securities 202,408 36 (1,174 ) 201,270 Debt securities issued by U.S. government agencies 28,807 1 (167 ) 28,641 Debt securities issued by states of the U.S. and political subdivisions of the states 36,816 1 (349 ) 36,468 Total securities with a maturity of more than one year 268,031 38 (1,690 ) 266,379 Total available-for-sale securities $ 591,739 $ 67 $ (2,009 ) $ 589,797 Equity securities: Regulus Therapeutics Inc. $ 2,133 $ 281 $ — $ 2,414 Total equity securities $ 2,133 $ 281 $ — $ 2,414 Total available-for-sale and equity securities $ 593,872 $ 348 $ (2,009 ) $ 592,211 (1) Our available-for-sale securities are held at amortized cost. (2) Includes investments classified as cash equivalents on our condensed consolidated balance sheet. |
Temporarily Impaired Investments | Investments we consider to be temporarily impaired at March 31, 2017 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 354 $ 421,288 $ (1,180 ) $ 22,387 $ (58 ) $ 443,675 $ (1,238 ) Debt securities issued by U.S. government agencies 41 84,017 (196 ) — — 84,017 (196 ) Debt securities issued by the U.S. Treasury 4 25,773 (20 ) — — 25,773 (20 ) Debt securities issued by states of the U.S. and political subdivisions of the states 97 90,816 (336 ) 4,916 (71 ) 95,732 (407 ) Total temporarily impaired securities 496 $ 621,894 $ (1,732 ) $ 27,303 $ (129 ) $ 649,197 $ (1,861 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements [Abstract] | |
Assets Measured at Fair Value on a Recurring Basis | The following tables present the major security types we held at March 31, 2017 and December 31, 2016 that are regularly measured and carried at fair value. The tables segregate each security type by the level within the fair value hierarchy of the valuation techniques we utilized to determine the respective securities’ fair value (in thousands): At March 31, 2017 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Cash equivalents (1) $ 100,318 $ 100,318 $ — Corporate debt securities (2) 529,024 — 529,024 Debt securities issued by U.S. government agencies (3) 90,260 — 90,260 Debt securities issued by the U.S. Treasury (4) 26,774 26,774 — Debt securities issued by states of the U.S. and political subdivisions of the states (5) 110,540 — 110,540 Total $ 856,916 $ 127,092 $ 729,824 At December 31, 2016 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Cash equivalents (1) $ 54,137 $ 54,137 $ — Corporate debt securities (3) 396,221 — 396,221 Debt securities issued by U.S. government agencies (3) 55,179 — 55,179 Debt securities issued by the U.S. Treasury (3) 29,286 29,286 — Debt securities issued by states of the U.S. and political subdivisions of the states (5) 109,111 — 109,111 Investment in Regulus Therapeutics Inc. 2,414 2,414 — Total $ 646,348 $ 85,837 $ 560,511 (1) Included in cash and cash equivalents on our condensed consolidated balance sheet. (2) At March 31, 2017, $6.8 million was 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. (3) Included in short-term investments on our condensed consolidated balance sheet. (4) At March 31, 2017, $1.0 million was 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) At March 31, 2017 and December 31, 2016, $2.7 million and $9.3 million, respectively, were 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. |
Reconciliation of Assets Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | The following is a reconciliation of the potential premium we may receive measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2017 (in thousands): Beginning balance of Level 3 asset (at December 31, 2016) $ — Value of the potential premium we will receive from Novartis at inception of the SPA (January 2017) 5,035 Recurring fair value adjustment at March 31, 2017 (1,438 ) Ending balance of Level 3 asset (at March 31, 2017) $ 3,597 |
Segment Information and Conce18
Segment Information and Concentration of Business Risk (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Information and Concentration of Business Risk [Abstract] | |
Segment Information | The following table shows our segment revenue and loss from operations for the three months ended March 31, 2017 and March 31, 2016 (in thousands), respectively. March 31, 2017 Ionis Core Akcea Therapeutics Elimination of Intercompany Activity Total Revenue: Commercial revenue: SPINRAZA royalties 5,211 — — 5,211 Licensing and other royalty revenue 3,547 — — 3,547 Total commercial revenue 8,758 — — 8,758 R&D revenue under collaborative agreements $ 143,425 $ 9,597 $ (51,476 ) $ 101,546 Total segment revenue $ 152,183 $ 9,597 $ (51,476 ) $ 110,304 Income (loss) from operations $ 73,832 $ (59,873 ) $ 30 $ 13,989 March 31, 2016 Ionis Core Akcea Therapeutics Elimination of Intercompany Activity Total Revenue: R&D revenue under collaborative agreements $ 35,214 $ — $ — $ 35,214 Licensing and other royalty revenue 1,660 — — 1,660 Total segment revenue $ 36,874 $ — $ — $ 36,874 Loss from operations $ (38,567 ) $ (16,049 ) $ (36 ) $ (54,652 ) The following table shows our total assets by segment at March 31, 2017 and December 31, 2016 (in thousands), respectively. Total Assets Ionis Core Akcea Therapeutics Elimination of Intercompany Activity Total March 31, 2017 $ 1,202,164 $ 132,982 $ (251,150 ) $ 1,083,996 December 31, 2016 $ 1,067,770 $ 10,684 $ (165,987 ) $ 912,467 |
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 March 31, 2017 2016 Partner A 59 % 3 % Partner B 18 % 58 % Partner C 4 % 14 % |
Significant Accounting Polici19
Significant Accounting Policies, Revenue Recognition (Details) $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Apr. 30, 2017USD ($) | Feb. 28, 2017USD ($)AccountingUnit | Mar. 31, 2017USD ($)AccountingUnitAgreementDrugCategoryStageshares | Mar. 31, 2016USD ($) | Jun. 30, 2015USD ($) | Dec. 31, 2016DrugPartner | Jan. 31, 2017USD ($) | |
Revenue Recognition [Abstract] | |||||||
SPINRAZA royalties | $ 5,211 | $ 0 | |||||
Proceeds from sale of common stock | $ 71,640 | $ 0 | |||||
Number of categories of milestone events | Category | 3 | ||||||
Number of stages of life-cycle of drugs | Stage | 3 | ||||||
Number of partners that exercised option to license drugs | Partner | 3 | ||||||
Number of drugs licensed under option in collaboration agreements | Drug | 3 | ||||||
Minimum [Member] | |||||||
Revenue Recognition [Abstract] | |||||||
Period to complete IND-enabling animal studies | 12 months | ||||||
Period to complete Phase 1 clinical trial | 1 year | ||||||
Period to complete Phase 2 clinical trial | 1 year | ||||||
Period to complete Phase 3 clinical trial | 2 years | ||||||
Period to prepare and submit regulatory filings | 6 months | ||||||
Period to obtain marketing authorization from applicable regulatory agency | 1 year | ||||||
Pre-specified product sales threshold included in commercialization milestones | $ 1,000,000 | ||||||
Maximum [Member] | |||||||
Revenue Recognition [Abstract] | |||||||
Period to complete IND-enabling animal studies | 18 months | ||||||
Period to complete Phase 1 clinical trial | 2 years | ||||||
Period to complete Phase 2 clinical trial | 3 years | ||||||
Period to complete Phase 3 clinical trial | 4 years | ||||||
Period to prepare and submit regulatory filings | 12 months | ||||||
Period to obtain marketing authorization from applicable regulatory agency | 2 years | ||||||
Novartis [Member] | |||||||
Revenue Recognition [Abstract] | |||||||
Number of agreements | Agreement | 2 | ||||||
Bayer [Member] | |||||||
Revenue Recognition [Abstract] | |||||||
Upfront payment received | $ 100,000 | ||||||
Bayer [Member] | |||||||
Revenue Recognition [Abstract] | |||||||
Number of units of accounting | AccountingUnit | 3 | ||||||
Allocable arrangement consideration | $ 76,300 | ||||||
Consideration allocated to exclusive license | 64,900 | ||||||
Consideration allocated to development activities | 11,000 | ||||||
Consideration allocated to delivery of API | $ 400 | ||||||
Assumed percentage change in estimated selling price | 10.00% | ||||||
Percentage change in earned revenue based on assumed change in estimated selling price | 1.00% | ||||||
Amount by which earned revenue would change based on assumed change in estimated selling price | $ 700 | ||||||
Bayer [Member] | Subsequent Event [Member] | |||||||
Revenue Recognition [Abstract] | |||||||
Payment received for advancing programs | $ 75,000 | ||||||
Novartis [Member] | |||||||
Revenue Recognition [Abstract] | |||||||
Number of units of accounting | AccountingUnit | 4 | ||||||
Shares issued (in shares) | shares | 1.6 | ||||||
Proceeds from sale of common stock | $ 100,000 | ||||||
Additional amount of common stock required to be purchased in the future | $ 50,000 | ||||||
Novartis [Member] | Minimum [Member] | |||||||
Revenue Recognition [Abstract] | |||||||
Number of drugs with exclusive option that could be exercised | Drug | 1 | ||||||
Akcea [Member] | Novartis [Member] | |||||||
Revenue Recognition [Abstract] | |||||||
Upfront payment received | $ 75,000 |
Significant Accounting Polici20
Significant Accounting Policies, Cash, Cash Equivalents and Short-term Investments (Details) | Mar. 31, 2017Company |
Cash, Cash Equivalents, and Short-term Investments [Abstract] | |
Number of publicly-held companies in which there is an equity ownership interest of less than 20% | 1 |
Number of privately-held companies in which there is an equity ownership interest of less than 20% | 3 |
Significant Accounting Polici21
Significant Accounting Policies, Inventory Valuation (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Inventory Valuation [Abstract] | ||
Inventories | $ 6,801 | $ 7,489 |
Significant Accounting Polici22
Significant Accounting Policies, Basic and Diluted Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Income (Numerator) [Abstract] | |||
Income available to common shareholders | $ 3,468 | ||
Income available to common shareholders, plus assumed conversions | $ 3,468 | ||
Shares (Denominator) [Abstract] | |||
Shares used in computing basic net income per share (in shares) | 122,861 | 120,598 | |
Effect of Diluted Securities [Abstract] | |||
Shares issuable related to our ESPP (in shares) | 60 | ||
Shares used in computing diluted net income per share (in shares) | 124,972 | 120,598 | |
Per-Share Amount [Abstract] | |||
Basic net income (loss) per share (in dollars per share) | $ 0.03 | $ (0.52) | |
Diluted net income (loss) per share (in dollars per share) | $ 0.03 | $ (0.52) | |
2 3/4 Percent Convertible Senior Notes [Member] | |||
Convertible Senior Notes [Abstract] | |||
Interest rate on convertible senior notes | 2.75% | ||
1 Percent Convertible Senior Notes [Member] | |||
Convertible Senior Notes [Abstract] | |||
Interest rate on convertible senior notes | 1.00% | 1.00% | |
Stock Options [Member] | |||
Effect of Diluted Securities [Abstract] | |||
Shares issuable related to stock-based compensation (in shares) | 1,674 | ||
Restricted Stock Awards [Member] | |||
Effect of Diluted Securities [Abstract] | |||
Shares issuable related to stock-based compensation (in shares) | 377 |
Significant Accounting Polici23
Significant Accounting Policies, Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | $ 99,565 | ||
Net current period other comprehensive loss | (102) | $ (2,550) | |
Ending balance | 201,806 | ||
Accumulated Other Comprehensive Loss [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Beginning balance | (30,358) | (13,565) | |
Ending balance | (30,460) | (16,115) | |
Unrealized Losses on Securities [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Other comprehensive loss before reclassifications, net of tax | [1] | 266 | (2,550) |
Amounts reclassified from accumulated other comprehensive income | [2] | (374) | 0 |
Income tax benefit included in other comprehensive loss | 0 | 0 | |
Currency Translation Adjustment [Member] | |||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |||
Other comprehensive loss before reclassifications, net of tax | $ 6 | $ 0 | |
[1] | There was no tax benefit for other comprehensive loss for the three months ended March 31, 2017 and 2016. | ||
[2] | Amounts are included in investment income on our condensed consolidated statement of operations. |
Significant Accounting Polici24
Significant Accounting Policies, Convertible Debt and Segment Information (Details) - Segment | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
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% |
Significant Accounting Polici25
Significant Accounting Policies, Stock-Based Compensation Expense (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-based Compensation Expense [Abstract] | ||
Non-cash stock-based compensation expense | $ 20,912 | $ 20,103 |
Research, Development and Patent [Member] | ||
Stock-based Compensation Expense [Abstract] | ||
Non-cash stock-based compensation expense | 16,122 | 14,770 |
Selling, General and Administrative [Member] | ||
Stock-based Compensation Expense [Abstract] | ||
Non-cash stock-based compensation expense | 4,790 | 5,333 |
Akcea Therapeutics [Member] | ||
Stock-based Compensation Expense [Abstract] | ||
Non-cash stock-based compensation expense | $ 3,200 | $ 3,200 |
Employee Stock Options [Member] | ||
Weighted-Average Assumptions [Abstract] | ||
Risk-free interest rate | 1.80% | 1.50% |
Dividend yield | 0.00% | 0.00% |
Volatility | 66.30% | 57.90% |
Expected life | 4 years 6 months | 4 years 6 months |
Unrecognized Compensation Expense [Abstract] | ||
Unrecognized compensation expense related to non-vested stock options | $ 91,800 | |
Weighted average period for recognition | 1 year 6 months | |
Employee Stock Options [Member] | Board of Directors [Member] | ||
Stock-based Compensation Expense [Abstract] | ||
Options granted (in shares) | 0 | 0 |
ESPP [Member] | ||
Weighted-Average Assumptions [Abstract] | ||
Risk-free interest rate | 0.70% | 0.50% |
Dividend yield | 0.00% | 0.00% |
Volatility | 66.50% | 69.40% |
Expected life | 6 months | 6 months |
RSUs [Member] | ||
Stock-based Compensation Expense [Abstract] | ||
Vesting period | 4 years | |
Unrecognized Compensation Expense [Abstract] | ||
Unrecognized compensation cost related to non-vested RSUs | $ 25,600 | |
Weighted average period for recognition | 1 year 9 months 18 days | |
RSUs [Member] | Employees [Member] | ||
Stock-based Compensation Expense [Abstract] | ||
Weighted-average grant date fair value (in dollars per share) | $ 48.09 | |
RSUs [Member] | Board of Directors [Member] | ||
Stock-based Compensation Expense [Abstract] | ||
Units granted (in shares) | 0 | 0 |
Investments, Contract Maturity
Investments, Contract Maturity of Available-for-Sale Securities (Details) | Mar. 31, 2017Company |
Contract Maturity of Available-for-Sale Securities [Abstract] | |
One year or less | 64.00% |
After one year but within two years | 24.00% |
After two years but within three and a half years | 12.00% |
Total | 100.00% |
Percentage of available-for-sale securities with a maturity of less than two years | 88.00% |
Ownership Interests in Private and Public Companies [Abstract] | |
Number of privately-held companies in which there is an equity ownership interest of less than 20% | 3 |
Number of publicly-held companies in which there is an equity ownership interest of less than 20% | 1 |
Investments, Summary of Investm
Investments, Summary of Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | ||
Summary of Investments [Abstract] | ||||
Cost | $ 593,872 | |||
Gross unrealized gains | 348 | |||
Gross unrealized losses | (2,009) | |||
Estimated fair value | 592,211 | |||
Available-for-sale Securities [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | [1] | $ 758,372 | 591,739 | |
Gross unrealized gains | 87 | 67 | ||
Gross unrealized losses | (1,861) | (2,009) | ||
Estimated fair value | 756,598 | 589,797 | ||
Available-for-sale Securities [Member] | Securities with Maturity of One Year or Less [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | [1] | 484,952 | 323,708 | |
Gross unrealized gains | 22 | 29 | ||
Gross unrealized losses | (612) | (319) | ||
Estimated fair value | 484,362 | 323,418 | ||
Available-for-sale Securities [Member] | Securities with Maturity of More than One Year [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | [1] | 273,420 | 268,031 | |
Gross unrealized gains | 65 | 38 | ||
Gross unrealized losses | (1,249) | (1,690) | ||
Estimated fair value | 272,236 | 266,379 | ||
Corporate Debt Securities [Member] | Securities with Maturity of One Year or Less [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | [1] | 341,043 | [2] | 195,087 |
Gross unrealized gains | 18 | 25 | ||
Gross unrealized losses | (405) | (161) | ||
Estimated fair value | 340,656 | 194,951 | ||
Corporate Debt Securities [Member] | Securities with Maturity of More than One Year [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | [1] | 189,152 | 202,408 | |
Gross unrealized gains | 49 | 36 | ||
Gross unrealized losses | (833) | (1,174) | ||
Estimated fair value | 188,368 | 201,270 | ||
Debt Securities issued by U.S. Government Agencies [Member] | Securities with Maturity of One Year or Less [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | [1] | 64,784 | 26,548 | |
Gross unrealized gains | 2 | 0 | ||
Gross unrealized losses | (72) | (10) | ||
Estimated fair value | 64,714 | 26,538 | ||
Debt Securities issued by U.S. Government Agencies [Member] | Securities with Maturity of More than One Year [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | [1] | 25,670 | 28,807 | |
Gross unrealized gains | 0 | 1 | ||
Gross unrealized losses | (124) | (167) | ||
Estimated fair value | 25,546 | 28,641 | ||
Debt Securities issued by the U.S. Treasury [Member] | Securities with Maturity of One Year or Less [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | [1] | 23,297 | [2] | 29,298 |
Gross unrealized gains | 0 | 2 | ||
Gross unrealized losses | (19) | (14) | ||
Estimated fair value | 23,278 | 29,286 | ||
Debt Securities issued by the U.S. Treasury [Member] | Securities with Maturity of More than One Year [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | [1] | 3,497 | ||
Gross unrealized gains | 0 | |||
Gross unrealized losses | (1) | |||
Estimated fair value | 3,496 | |||
Debt Securities issued by States of the U.S. and Political Subdivisions of the States [Member] | Securities with Maturity of One Year or Less [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | [1],[2] | 55,828 | 72,775 | |
Gross unrealized gains | 2 | 2 | ||
Gross unrealized losses | (116) | (134) | ||
Estimated fair value | 55,714 | 72,643 | ||
Debt Securities issued by States of the U.S. and Political Subdivisions of the States [Member] | Securities with Maturity of More than One Year [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | [1] | 55,101 | 36,816 | |
Gross unrealized gains | 16 | 1 | ||
Gross unrealized losses | (291) | (349) | ||
Estimated fair value | $ 54,826 | 36,468 | ||
Equity Securities [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | 2,133 | |||
Gross unrealized gains | 281 | |||
Gross unrealized losses | 0 | |||
Estimated fair value | 2,414 | |||
Regulus Therapeutics Inc. [Member] | ||||
Summary of Investments [Abstract] | ||||
Cost | 2,133 | |||
Gross unrealized gains | 281 | |||
Gross unrealized losses | 0 | |||
Estimated fair value | $ 2,414 | |||
[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, Investments Tempor
Investments, Investments Temporarily Impaired (Details) $ in Thousands | Mar. 31, 2017USD ($)Investment |
Temporarily Impaired Investments [Abstract] | |
Number of investments | Investment | 496 |
Estimated fair value, less than 12 months of temporary impairment | $ 621,894 |
Unrealized losses, less than 12 months of temporary impairment | (1,732) |
Estimated fair value, more than 12 months of temporary impairment | 27,303 |
Unrealized losses, more than 12 months of temporary impairment | (129) |
Estimated fair value, total temporary impairment | 649,197 |
Unrealized losses, total temporary impairment | $ (1,861) |
Corporate Debt Securities [Member] | |
Temporarily Impaired Investments [Abstract] | |
Number of investments | Investment | 354 |
Estimated fair value, less than 12 months of temporary impairment | $ 421,288 |
Unrealized losses, less than 12 months of temporary impairment | (1,180) |
Estimated fair value, more than 12 months of temporary impairment | 22,387 |
Unrealized losses, more than 12 months of temporary impairment | (58) |
Estimated fair value, total temporary impairment | 443,675 |
Unrealized losses, total temporary impairment | $ (1,238) |
Debt Securities issued by U.S. Government Agencies [Member] | |
Temporarily Impaired Investments [Abstract] | |
Number of investments | Investment | 41 |
Estimated fair value, less than 12 months of temporary impairment | $ 84,017 |
Unrealized losses, less than 12 months of temporary impairment | (196) |
Estimated fair value, more than 12 months of temporary impairment | 0 |
Unrealized losses, more than 12 months of temporary impairment | 0 |
Estimated fair value, total temporary impairment | 84,017 |
Unrealized losses, total temporary impairment | $ (196) |
Debt Securities issued by the U.S. Treasury [Member] | |
Temporarily Impaired Investments [Abstract] | |
Number of investments | Investment | 4 |
Estimated fair value, less than 12 months of temporary impairment | $ 25,773 |
Unrealized losses, less than 12 months of temporary impairment | (20) |
Estimated fair value, more than 12 months of temporary impairment | 0 |
Unrealized losses, more than 12 months of temporary impairment | 0 |
Estimated fair value, total temporary impairment | 25,773 |
Unrealized losses, total temporary impairment | $ (20) |
Debt Securities issued by States of the U.S. and Political Subdivisions of the States [Member] | |
Temporarily Impaired Investments [Abstract] | |
Number of investments | Investment | 97 |
Estimated fair value, less than 12 months of temporary impairment | $ 90,816 |
Unrealized losses, less than 12 months of temporary impairment | (336) |
Estimated fair value, more than 12 months of temporary impairment | 4,916 |
Unrealized losses, more than 12 months of temporary impairment | (71) |
Estimated fair value, total temporary impairment | 95,732 |
Unrealized losses, total temporary impairment | $ (407) |
Fair Value Measurements, Fair V
Fair Value Measurements, Fair Value Measurements on a Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 | |||
Fair Value Measurements [Abstract] | |||||
Transfers from Level 1 to Level 2 | $ 0 | ||||
Transfers from Level 2 to Level 1 | 0 | ||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | $ 592,211 | ||||
Recurring Basis [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Cash equivalents | [1] | 100,318 | 54,137 | ||
Investment in Regulus Therapeutics Inc. | 2,414 | ||||
Total | 856,916 | 646,348 | |||
Recurring Basis [Member] | Corporate Debt Securities [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | 529,024 | [2] | 396,221 | [3] | |
Recurring Basis [Member] | Corporate Debt Securities [Member] | Cash and Cash Equivalents [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | 6,800 | ||||
Recurring Basis [Member] | Debt Securities issued by U.S. Government Agencies [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | [3] | 90,260 | 55,179 | ||
Recurring Basis [Member] | Debt Securities issued by the U.S. Treasury [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | 26,774 | [4] | 29,286 | [3] | |
Recurring Basis [Member] | Debt Securities issued by the U.S. Treasury [Member] | Cash and Cash Equivalents [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | 1,000 | ||||
Recurring Basis [Member] | Debt Securities issued by States of the U.S. and Political Subdivisions of the States [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | [5] | 110,540 | 109,111 | ||
Recurring Basis [Member] | Debt Securities issued by States of the U.S. and Political Subdivisions of the States [Member] | Cash and Cash Equivalents [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | 2,700 | 9,300 | |||
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Cash equivalents | 100,318 | 54,137 | |||
Investment in Regulus Therapeutics Inc. | 2,414 | ||||
Total | 127,092 | 85,837 | |||
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | Corporate Debt Securities [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | 0 | 0 | |||
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | Debt Securities issued by U.S. Government Agencies [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | 0 | 0 | |||
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | Debt Securities issued by the U.S. Treasury [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | 26,774 | 29,286 | |||
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | Debt Securities issued by States of the U.S. and Political Subdivisions of the States [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | 0 | 0 | |||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Cash equivalents | 0 | 0 | |||
Investment in Regulus Therapeutics Inc. | 0 | ||||
Total | 729,824 | 560,511 | |||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate Debt Securities [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | 529,024 | 396,221 | |||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Debt Securities issued by U.S. Government Agencies [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | 90,260 | 55,179 | |||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Debt Securities issued by the U.S. Treasury [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | 0 | 0 | |||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Debt Securities issued by States of the U.S. and Political Subdivisions of the States [Member] | |||||
Fair Value Measurements [Abstract] | |||||
Available-for-sale securities | $ 110,540 | $ 109,111 | |||
[1] | Included in cash and cash equivalents on our condensed consolidated balance sheet. | ||||
[2] | At March 31, 2017, $6.8 million was 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. | ||||
[3] | Included in short-term investments on our condensed consolidated balance sheet. | ||||
[4] | At March 31, 2017, $1.0 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] | At March 31, 2017 and December 31, 2016, $2.7 million and $9.3 million, respectively, were included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet. |
Fair Value Measurements, Fair30
Fair Value Measurements, Fair Value Measurements Using Significant Unobservable Inputs (Level 3) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Jan. 31, 2017 | Dec. 31, 2016 | |
Unobservable Inputs (Level 3) [Roll Forward] | |||
Beginning balance of Level 3 asset | $ 0 | ||
Value of the potential premium we will receive from Novartis at inception of the SPA | 5,035 | ||
Recurring fair value adjustment | (1,438) | ||
Ending balance of Level 3 asset | 3,597 | ||
Novartis [Member] | |||
Novartis Future Stock Purchase [Abstract] | |||
Additional amount of common stock required to be purchased in the future | $ 50,000 | ||
Fair value of potential future premium | $ 5,000 | ||
1 Percent Convertible Senior Notes [Member] | |||
Fair Value Measurements [Abstract] | |||
Interest rate on convertible senior notes | 1.00% | 1.00% | |
Significant Other Observable Inputs (Level 2) [Member] | 1 Percent Convertible Senior Notes [Member] | |||
Fair Value Measurements [Abstract] | |||
Fair value of convertible notes | $ 661,900 | ||
Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value Measurements [Abstract] | |||
Investments | $ 0 |
Line of Credit Arrangement (Det
Line of Credit Arrangement (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Fixed Rate Note with Morgan Stanley [Member] | |
Line of Credit Arrangement [Abstract] | |
Outstanding borrowings | $ 12.5 |
Interest rate | 2.31% |
Maturity date | Sep. 30, 2019 |
Morgan Stanley [Member] | Revolving Line of Credit [Member] | |
Line of Credit Arrangement [Abstract] | |
Term of agreement | 5 years |
Maximum borrowing capacity | $ 30 |
Commitment fee percentage on unused capacity | 0.25% |
Morgan Stanley [Member] | Revolving Line of Credit [Member] | 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 an32
Collaborative Arrangements and Licensing Agreements, Biogen (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017USD ($)Drug | Mar. 31, 2016USD ($) | |
Collaborative Arrangement and Licensing Agreement [Abstract] | ||
Revenue earned | $ 110,304 | $ 36,874 |
Collaboration Agreements with Biogen [Member] | ||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||
Number of drugs in clinical development to treat neurological diseases | Drug | 4 | |
Number of drugs in clinical development to treat undisclosed neurodegenerative diseases | Drug | 2 | |
Revenue earned | $ 20,400 | $ 21,300 |
Milestone payment earned | 5,000 | |
Deferred revenue | $ 57,700 | |
Collaboration Agreements with Biogen [Member] | Revenue [Member] | Strategic Partner [Member] | ||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||
Concentration percentage | 18.00% | 58.00% |
Collaboration Agreements with Biogen [Member] | Minimum [Member] | ||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||
Cumulative payments received | $ 550,000 |
Collaborative Arrangements an33
Collaborative Arrangements and Licensing Agreements, Bayer (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Apr. 30, 2017 | Feb. 28, 2017 | Jun. 30, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2015 | |
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Revenue recorded | $ 101,546 | $ 35,214 | ||||
Revenue earned | 110,304 | 36,874 | ||||
Bayer [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Upfront payment received | $ 100,000 | |||||
Revenue recorded | $ 91,200 | |||||
Revenue earned | 65,500 | $ 1,300 | ||||
Deferred revenue | $ 0 | |||||
Bayer [Member] | Revenue [Member] | Strategic Partner [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Concentration percentage | 59.00% | 3.00% | ||||
Bayer [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Revenue recorded | $ 64,900 | |||||
Maximum amount of payments receivable for license fees and substantive milestones | $ 385,000 | |||||
Maximum amount of payments receivable for development milestones | 125,000 | |||||
Maximum amount of payments receivable for commercialization milestones | 110,000 | |||||
Next prospective milestone | $ 10,000 | |||||
Bayer [Member] | Subsequent Event [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Payment received for advancing programs | $ 75,000 | |||||
Bayer [Member] | Minimum [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Royalty percentage received on gross margins of both drugs combined | 20.00% |
Collaborative Arrangements an34
Collaborative Arrangements and Licensing Agreements, Novartis (Details) $ in Thousands, shares in Millions | 3 Months Ended | ||
Mar. 31, 2017USD ($)AccountingUnitDrugshares | Mar. 31, 2016USD ($) | Jan. 31, 2017USD ($) | |
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Proceeds from sale of common stock | $ 71,640 | $ 0 | |
Revenue earned | $ 110,304 | $ 36,874 | |
Novartis [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Shares issued (in shares) | shares | 1.6 | ||
Proceeds from sale of common stock | $ 100,000 | ||
Additional amount of common stock required to be purchased in the future | $ 50,000 | ||
Number of units of accounting | AccountingUnit | 4 | ||
Total consideration under collaboration | $ 180,000 | ||
Premium received on shares issued | 28,400 | ||
Potential premium received if common stock is purchased in the future at a premium | 5,000 | ||
Consideration allocated to equity | 71,600 | ||
Consideration allocated to development services and delivery of API for AKCEA-APO(a)-L and AKCEA-APOCIII-L | 108,400 | ||
Revenue earned | 9,600 | ||
Deferred revenue | $ 98,800 | ||
Novartis [Member] | Minimum [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Number of drugs with exclusive option that could be exercised | Drug | 1 | ||
Novartis [Member] | AKCEA-APO(a)-L [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Consideration allocated to development activities | $ 64,000 | ||
Consideration allocated to delivery of API | 1,500 | ||
Novartis [Member] | AKCEA-APOCIII-L [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Consideration allocated to development activities | 40,100 | ||
Consideration allocated to delivery of API | 2,800 | ||
Akcea [Member] | Novartis [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Upfront payment received | 75,000 | ||
Portion of upfront payment retained | 60,000 | ||
Portion of upfront payment paid as a sublicense fee | 15,000 | ||
License fee receivable per drug | 150,000 | ||
Next prospective milestone | $ 25,000 | ||
Percentage of license fees, milestone payments and royalties paid as sublicense fee | 50.00% | ||
Akcea [Member] | Novartis [Member] | AKCEA-APO(a)-L [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Maximum amount of payments receivable for milestones | $ 600,000 | ||
Maximum amount of payments receivable for development milestones | 25,000 | ||
Maximum amount of payments receivable for regulatory milestones | 290,000 | ||
Maximum amount of payments receivable for commercialization milestones | $ 285,000 | ||
Royalty percentage received on sales of drug | 20.00% | ||
Akcea [Member] | Novartis [Member] | AKCEA-APOCIII-L [Member] | |||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||
Maximum amount of payments receivable for milestones | $ 530,000 | ||
Maximum amount of payments receivable for development milestones | 25,000 | ||
Maximum amount of payments receivable for regulatory milestones | 240,000 | ||
Maximum amount of payments receivable for commercialization milestones | $ 265,000 | ||
Royalty percentage received on sales of drug | 20.00% |
Segment Information and Conce35
Segment Information and Concentration of Business Risk, Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017USD ($)Segment | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment Information and Concentration of Business Risk [Abstract] | |||
Number of reportable segments | Segment | 2 | ||
Commercial Revenue [Abstract] | |||
SPINRAZA royalties | $ 5,211 | $ 0 | |
Licensing and other royalty revenue | 3,547 | 1,660 | |
Total commercial revenue | 8,758 | 1,660 | |
R&D revenue under collaborative agreements | 101,546 | 35,214 | |
Total segment revenue | 110,304 | 36,874 | |
Income (loss) from operations | 13,989 | (54,652) | |
Total assets | 1,083,996 | $ 912,467 | |
Operating Segments [Member] | Ionis Core [Member] | |||
Commercial Revenue [Abstract] | |||
SPINRAZA royalties | 5,211 | ||
Licensing and other royalty revenue | 3,547 | 1,660 | |
Total commercial revenue | 8,758 | ||
R&D revenue under collaborative agreements | 143,425 | 35,214 | |
Total segment revenue | 152,183 | 36,874 | |
Income (loss) from operations | 73,832 | (38,567) | |
Total assets | 1,202,164 | 1,067,770 | |
Operating Segments [Member] | Akcea Therapeutics [Member] | |||
Commercial Revenue [Abstract] | |||
SPINRAZA royalties | 0 | ||
Licensing and other royalty revenue | 0 | 0 | |
Total commercial revenue | 0 | ||
R&D revenue under collaborative agreements | 9,597 | 0 | |
Total segment revenue | 9,597 | 0 | |
Income (loss) from operations | (59,873) | (16,049) | |
Total assets | 132,982 | 10,684 | |
Elimination of Intercompany Activity [Member] | |||
Commercial Revenue [Abstract] | |||
SPINRAZA royalties | 0 | ||
Licensing and other royalty revenue | 0 | 0 | |
Total commercial revenue | 0 | ||
R&D revenue under collaborative agreements | (51,476) | 0 | |
Total segment revenue | (51,476) | 0 | |
Income (loss) from operations | 30 | $ (36) | |
Total assets | $ (251,150) | $ (165,987) |
Segment Information and Conce36
Segment Information and Concentration of Business Risk, Revenue from Significant Partners (Details) - Partner | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Revenue [Member] | Customer Concentration [Member] | Partner A [Member] | |||
Significant Partners [Abstract] | |||
Concentration percentage | 59.00% | 3.00% | |
Revenue [Member] | Customer Concentration [Member] | Partner B [Member] | |||
Significant Partners [Abstract] | |||
Concentration percentage | 18.00% | 58.00% | |
Revenue [Member] | Customer Concentration [Member] | Partner C [Member] | |||
Significant Partners [Abstract] | |||
Concentration percentage | 4.00% | 14.00% | |
Contracts Receivables [Member] | Credit Concentration [Member] | Significant Partners [Member] | |||
Significant Partners [Abstract] | |||
Concentration percentage | 92.00% | 92.00% | |
Number of significant partners | 1 | 2 |