XML 28 R16.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Significant Accounting Policies (Tables) | 9 Months Ended
--- | ---
Sep. 30, 2018
Significant Accounting Policies [Abstract] |
Adjustments Made to Adopt New Revenue Accounting Guidance | The following tables summarize the adjustments we were required to make to amounts we originally reported in 2017 to adopt Topic 606 (in thousands, except per share amounts): Condensed Consolidated Balance Sheet
|  | At December 31, 2017 |
|  | As Previously Reported under Topic 605 |  |  | Topic 606 Adjustment |  |  | As Revised |
Current portion of deferred revenue |  | $ | 106,465 |  |  | $ | 18,871 |  |  | $ | 125,336 |
Long-term portion of deferred revenue |  | $ | 72,708 |  |  | $ | 35,318 |  |  | $ | 108,026 |
Accumulated deficit |  | $ | (1,187,398 | ) |  | $ | (53,636 | ) |  | $ | (1,241,034 | )
Noncontrolling interest in Akcea Therapeutics, Inc. |  | $ | 87,847 |  |  | $ | (3,580 | ) |  | $ | 84,267 |
Total stockholders’ equity |  | $ | 418,719 |  |  | $ | (53,439 | ) |  | $ | 365,280 |
Condensed Consolidated Statement of Operations
|  | Three Months Ended September 30, 2017 |
|  | As Previously Reported under Topic 605 |  |  | Topic 606 Adjustment |  |  | As Revised |
Revenue: |  |  |  |  |  |  |  |  |
Commercial revenue: |  |  |  |  |  |  |  |  |
SPINRAZA royalties |  | $ | 32,890 |  |  | $ | — |  |  | $ | 32,890 |
Licensing and other royalty revenue |  |  | 879 |  |  |  | 848 |  |  |  | 1,727 |
Total commercial revenue |  |  | 33,769 |  |  |  | 848 |  |  |  | 34,617 |
Research and development revenue under collaborative agreements |  |  | 87,142 |  |  |  | (3,445 | ) |  |  | 83,697 |
Total revenue |  | $ | 120,911 |  |  | $ | (2,597 | ) |  | $ | 118,314 |
Income (loss) from operations |  | $ | 13,909 |  |  | $ | (2,597 | ) |  | $ | 11,312 |
Net income (loss) |  | $ | (4,896 | ) |  | $ | (2,597 | ) |  | $ | (7,493 | )
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders |  | $ | (976 | ) |  | $ | (1,635 | ) |  | $ | (2,611 | )
Net income (loss) per share, basic and diluted |  | $ | 0.00 |  |  | $ | (0.02 | ) |  | $ | (0.02 | )
|  | Nine Months Ended September 30, 2017 |
|  | As Previously Reported under Topic 605 |  |  | Topic 606 Adjustment |  |  | As Revised |
Revenue: |  |  |  |  |  |  |  |  |
Commercial revenue: |  |  |  |  |  |  |  |  |
SPINRAZA royalties |  | $ | 60,467 |  |  | $ | — |  |  | $ | 60,467 |
Licensing and other royalty revenue |  |  | 4,983 |  |  |  | 656 |  |  |  | 5,639 |
Total commercial revenue |  |  | 65,450 |  |  |  | 656 |  |  |  | 66,106 |
Research and development revenue under collaborative agreements |  |  | 269,917 |  |  |  | 10,364 |  |  |  | 280,281 |
Total revenue |  | $ | 335,367 |  |  | $ | 11,020 |  |  | $ | 346,387 |
Income from operations |  | $ | 26,227 |  |  | $ | 11,020 |  |  | $ | 37,247 |
Net income (loss) |  | $ | (12,636 | ) |  | $ | 11,020 |  |  | $ | (1,616 | )
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders |  | $ | (8,716 | ) |  | $ | 11,982 |  |  | $ | 3,266 |
Net income (loss) per share, basic |  | $ | 0.02 |  |  | $ | 0.11 |  |  | $ | 0.13 |
Net income (loss) per share, diluted |  | $ | 0.02 |  |  | $ | 0.11 |  |  | $ | 0.13 |
Condensed Consolidated Statement of Cash Flows
|  | Nine Months Ended September 30, 2017 |
|  | As Previously Reported under Topic 605 |  |  | Topic 606 Adjustment |  |  | As Revised |
Net income (loss) |  | $ | (12,636 | ) |  | $ | 11,020 |  |  | $ | (1,616 | )
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |  |  |  |  |  |  |  |  |  |
Deferred contract revenue |  | $ | 42,091 |  |  | $ | (11,020 | ) |  | $ | 31,071 |
Cash and cash equivalents at beginning of period |  | $ | 84,685 |  |  | $ | — |  |  | $ | 84,685 |
Cash and cash equivalents at end of period |  | $ | 159,184 |  |  | $ | — |  |  | $ | 159,184 |
The following table summarizes the adjustments we were required to make to our deferred revenue amounts to adopt Topic 606 (in thousands):
| At December 31, 2017 |
| As Previously Reported under Topic 605 |  | Topic 606 Adjustment |  | As Revised |
Current portion of deferred revenue |  | $ | 106,465 |  |  | $ | 18,871 |  |  | $ | 125,336 |
Long-term portion of deferred revenue |  |  | 72,708 |  |  |  | 35,318 |  |  |  | 108,026 |
Total deferred revenue |  | $ | 179,173 |  |  | $ | 54,189 |  |  | $ | 233,362 |
Basic Net Loss per Share | Our basic net loss per share for the three months ended September 30, 2018, was calculated as follows (in thousands, except per share amounts):
Three months ended September 30, 2018 |  | Weighted Average Shares Owned in Akcea |  |  | Akcea’s Net Income (Loss) Per Share |  |  | Ionis’ Portion of Akcea’s Net Loss |
Common shares |  |  | 65,538 |  |  | $ | (0.73 | ) |  | $ | (47,843 | )
Akcea’s net loss attributable to our ownership |  |  |  |  |  |  |  |  |  | $ | (47,843 | )
Ionis’ stand-alone net income |  |  |  |  |  |  |  |  |  |  | 43,226 |
Net loss available to Ionis common stockholders |  |  |  |  |  |  |  |  |  | $ | (4,616 | )
Weighted average shares outstanding |  |  |  |  |  |  |  |  |  |  | 143,314 |
Basic net loss per share |  |  |  |  |  |  |  |  |  | $ | (0.03 | )
Basic and Diluted Net Income Per Share | For the nine months ended September 30, 2017, we had net income available to Ionis common stockholders. 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 nine months ended September 30, 2017 consisted of the following (in thousands except per share amounts):
Nine months ended September 30, 2017 |  | Income (Numerator) |  |  | Shares (Denominator) |  |  | Per-Share Amount |
Net income available to Ionis common stockholders |  | $ | 16,321 |  |  |  | 123,746 |  |  | $ | 0.13 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |  |
Shares issuable upon exercise of stock options |  |  | — |  |  |  | 1,658 |  |  |  |  |
Shares issuable upon restricted stock award issuance |  |  | — |  |  |  | 430 |  |  |  |  |
Shares issuable related to our ESPP |  |  | — |  |  |  | 24 |  |  |  |  |
Income available to Ionis common stockholders, plus assumed conversions |  | $ | 16,321 |  |  |  | 125,858 |  |  | $ | 0.13 |
For the nine months ended September 30, 2017, the calculation excluded the 1 percent and 2¾ percent notes because the effect on diluted earnings per share was anti-dilutive.
Changes in Accumulated Other Comprehensive Income (Loss) | We include unrealized gains and losses on investments, net of taxes, in accumulated other comprehensive income (loss) along with adjustments we make 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 and nine months ended September 30, 2018 and 2017 (in thousands):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2018 |  |  | 2017 |  |  | 2018 |  |  | 2017 |
Beginning balance accumulated other comprehensive loss |  | $ | (32,637 | ) |  | $ | (30,372 | ) |  | $ | (31,759 | ) |  | $ | (30,358 | )
Unrealized gains (losses) on securities (1) |  |  | 133 |  |  |  | 215 |  |  |  | (834 | ) |  |  | 610 |
Amounts reclassified from accumulated other comprehensive loss |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (374 | )
Currency translation adjustment |  |  | (28 | ) |  |  | (42 | ) |  |  | 61 |  |  |  | (77 | )
Net current period other comprehensive income (loss) |  |  | 105 |  |  |  | 173 |  |  |  | (773 | ) |  |  | 159 |
Ending balance accumulated other comprehensive loss |  | $ | (32,532 | ) |  | $ | (30,199 | ) |  | $ | (32,532 | ) |  | $ | (30,199 | )
| (1) | There was no income tax expense or benefit related to elements of other comprehensive income (loss) for the three and nine months ended September 30, 2018 and 2017.
Weighted-Average Assumptions for Stock Options | We use the Black-Scholes model to estimate the fair value of stock options granted and stock purchase rights under our ESPP. The expected term of stock options granted represents the period of time that we expect them to be outstanding. We estimate the expected term of options granted based on historical exercise patterns. For the nine months ended September 30, 2018 and 2017, we used the following weighted-average assumptions in our Black-Scholes calculations: Employee Stock Options:
| Nine Months Ended September 30,
| 2018 |  | 2017
Risk-free interest rate |  | 2.3% |  |  | 1.8%
Dividend yield |  | 0.0% |  |  | 0.0%
Volatility |  | 63.1% |  |  | 66.1%
Expected life |  | 4.6 years |  |  | 4.5 years
Board of Director Stock Options:
| Nine Months Ended September 30,
| 2018 |  | 2017
Risk-free interest rate |  | 2.8 % |  |  | 2.2 %
Dividend yield |  | 0.0 % |  |  | 0.0 %
Volatility |  | 61.5 % |  |  | 61.2 %
Expected life |  | 6.6 years |  |  | 6.6 years
Weighted-Average Assumptions for ESPP | ESPP:
| Nine Months Ended September 30,
| 2018 |  | 2017
Risk-free interest rate |  | 1.8% |  |  | 0.8%
Dividend yield |  | 0.0% |  |  | 0.0%
Volatility |  | 47.3% |  |  | 59.9%
Expected life |  | 6 months |  |  | 6 months
Stock-Based Compensation Expense | The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2018 and 2017 (in thousands). Our consolidated non-cash stock-based compensation expense includes $12.7 million and $4.7 million of stock-based compensation expense for Akcea for the three months ended September 30, 2018 and 2017, respectively, and $31.2 million and $11.8 million for the nine months ended September 30, 2018 and 2017, respectively.
| Three Months Ended September 30, |  | Nine Months Ended September 30, |
| 2018 |  | 2017 |  | 2018 |  | 2017 |
Research, development and patent |  | $ | 18,780 |  |  | $ | 16,181 |  |  | $ | 57,698 |  |  | $ | 48,443 |
Selling, general and administrative |  |  | 16,103 |  |  |  | 5,291 |  |  |  | 39,512 |  |  |  | 15,199 |
Total non-cash stock-based compensation expense |  | $ | 34,883 |  |  | $ | 21,472 |  |  | $ | 97,210 |  |  | $ | 63,642 |

X
- References No definition available. + Details
Name: | us-gaap_AccountingPoliciesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of accumulated other comprehensive income (loss). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 220 -SubTopic 10 -Section 45 -Paragraph 14A -URI http://asc.fasb.org/extlink&oid=114867106&loc=SL7669686-108580 + Details
Name: | us-gaap_ScheduleOfAccumulatedOtherComprehensiveIncomeLossTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of an entity's basic and diluted earnings per share calculations, including a reconciliation of numerators and denominators of the basic and diluted per-share computations for income from continuing operations. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257 + Details
Name: | us-gaap_ScheduleOfEarningsPerShareBasicAndDilutedTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the effect of income (loss) on basic earnings per share. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -SubTopic 10 -Section 55 -Paragraph 52 -URI http://asc.fasb.org/extlink&oid=109256448&loc=d3e4984-109258 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -SubTopic 10 -Section 45 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1252-109256 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6371337&loc=d3e3550-109257 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 260 -SubTopic 10 -Section 45 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=109260490&loc=d3e1278-109256 + Details
Name: | us-gaap_ScheduleOfEarningsPerShareBasicByCommonClassTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the allocation of equity-based compensation costs to a given line item on the balance sheet and income statement for the period. This may include the reporting line for the costs and the amount capitalized and expensed. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (h)(1) -URI http://asc.fasb.org/extlink&oid=109197908&loc=d3e5070-113901 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 14.F) -URI http://asc.fasb.org/extlink&oid=115993241&loc=d3e301413-122809 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=109197908&loc=d3e5047-113901 + Details
Name: | us-gaap_ScheduleOfEmployeeServiceShareBasedCompensationAllocationOfRecognizedPeriodCostsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of changes in accounting principles, including adoption of new accounting pronouncements, that describes the new methods, amount and effects on financial statement line items. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22499-107794 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 270 -SubTopic 10 -Section 45 -Paragraph 13 -URI http://asc.fasb.org/extlink&oid=109236672&loc=d3e765-108305 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 270 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.10-01.(b)(6)) -URI http://asc.fasb.org/extlink&oid=27015980&loc=d3e46468-122699 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22580-107794 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 270 -SubTopic 10 -Section 45 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=109236672&loc=d3e725-108305 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 250 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=109234566&loc=d3e22583-107794 + Details
Name: | us-gaap_ScheduleOfNewAccountingPronouncementsAndChangesInAccountingPrinciplesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the significant assumptions used during the year to estimate the fair value of employee stock purchase plans, including, but not limited to: (a) expected term, (b) expected volatility of the entity's shares, (c) expected dividends, (d) risk-free rate(s), and (e) discount for post-vesting restrictions. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (f)(2) -URI http://asc.fasb.org/extlink&oid=109197908&loc=d3e5070-113901 + Details
Name: | us-gaap_ScheduleOfShareBasedPaymentAwardEmployeeStockPurchasePlanValuationAssumptionsTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the significant assumptions used during the year to estimate the fair value of stock options, including, but not limited to: (a) expected term of share options and similar instruments, (b) expected volatility of the entity's shares, (c) expected dividends, (d) risk-free rate(s), and (e) discount for post-vesting restrictions. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (f)(2) -URI http://asc.fasb.org/extlink&oid=109197908&loc=d3e5070-113901 + Details
Name: | us-gaap_ScheduleOfShareBasedPaymentAwardStockOptionsValuationAssumptionsTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration