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Collaborative Arrangements and Licensing Agreements | 12 Months Ended
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Dec. 31, 2019
Collaborative Arrangements and Licensing Agreements [Abstract] |
Collaborative Arrangements and Licensing Agreements | 6. Collaborative Arrangements and Licensing Agreements 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 medicines with Biogen’s expertise in developing therapies for neurological disorders. We developed and licensed to Biogen SPINRAZA, our approved medicine to treat people with spinal muscular atrophy, or SMA. In December 2017, we entered into a collaboration with Biogen to identify new antisense medicines for the treatment of SMA. We and Biogen are currently developing eight medicines to treat neurodegenerative diseases under these collaborations, including medicines to treat people with ALS, Alzheimer’s disease and Parkinson’s disease. In addition to these medicines, our collaborations with Biogen include a substantial research pipeline that addresses a broad range of neurological diseases. From inception through December 2019, we have received more than $2.4 billion from our Biogen collaborations, including $1 billion we received from Biogen in the second quarter of 2018 for our 2018 strategic neurology collaboration. Spinal Muscular Atrophy Collaborations SPINRAZA In January 2012, we entered into a collaboration agreement with Biogen to develop and commercialize SPINRAZA, an RNA-targeted therapy for the treatment of SMA. Biogen reported in January 2020 that SPINRAZA was approved in over 50 countries around the world. From inception through December 2019, we earned more than $1 billion in total revenue under our SPINRAZA collaboration, including more than $640 million in revenue from SPINRAZA royalties and more than $435 million in R&D revenue. We are receiving tiered royalties ranging from 11 percent to 15 percent on net sales of SPINRAZA. We have exclusively in-licensed patents related to SPINRAZA from Cold Spring Harbor Laboratory and the University of Massachusetts. We pay Cold Spring Harbor Laboratory and the University of Massachusetts a low single digit royalty on net sales of SPINRAZA. Biogen is responsible for global development, regulatory and commercialization activities and costs for SPINRAZA. We completed our performance obligations under our collaboration in 2016, including delivering the license to Biogen in July 2016. We also earned additional milestone payments subsequent to delivering the license to Biogen that we recognized in full in the period each milestone payment became probable because we did not have a performance obligation related to each milestone payment. For example, we received $90 million of milestone payments for the approval of SPINRAZA in the EU and Japan in 2017 and recognized the full amounts into revenue in the period Biogen achieved the milestone events. New antisense medicines for the treatment of SMA In December 2017, we entered into a collaboration agreement with Biogen to identify new antisense medicines for the treatment of SMA. Biogen has the option to license therapies arising out of this collaboration following the completion of preclinical studies. Upon licensing, Biogen will be responsible for all further global development, regulatory and commercialization activities and costs for such therapies. Under the collaboration agreement, we received a $25 million upfront payment in December 2017. We will receive development and regulatory milestone payments from Biogen if new medicines advance towards marketing approval. In total over the term of our collaboration, we are eligible to receive up to $1.2 billion in license fees, milestone payments and other payments, including up to $80 million for the achievement of development milestones, up to $180 million for the achievement of commercialization milestones and up to $800 million for the achievement of sales milestones. In addition, we are eligible to receive tiered royalties from the mid-teens to mid-20 percent range on net sales. We will achieve the next payment of up to $60 million for the license of a medicine under this collaboration. At the commencement of this collaboration, we identified one performance obligation, which was to perform R&D services for Biogen. We determined the transaction price to be the $25 million upfront payment we received when we entered into the collaboration. We allocated the transaction price to our single performance obligation. In the fourth quarter of 2019, we completed our R&D services performance obligation under this collaboration. We were recognizing revenue as we performed services based on our effort to satisfy our performance obligation relative to the total effort expected to satisfy our performance obligation. We completed our performance obligation earlier than we previously estimated, as a result, we recognized $8.3 million of additional revenue in the fourth quarter of 2019. We do not have any remaining performance obligations under this collaboration. We will receive development and regulatory milestone payments from Biogen if Biogen advances the development candidate under this collaboration toward marketing approval. Neurology Collaborations 2018 Strategic Neurology In April 2018, we and Biogen entered into a strategic collaboration to develop novel antisense medicines for a broad range of neurological diseases and entered into a SPA. As part of the collaboration, Biogen gained exclusive rights to the use of our antisense technology to develop therapies for these diseases for 10 years. We are responsible for the identification of antisense drug candidates based on selected targets. Biogen is responsible for conducting IND-enabling toxicology studies for the selected target. Biogen will have the option to license the selected target after it completes the IND-enabling toxicology study. If Biogen exercises its option to license a medicine, it will assume all further global development, regulatory and commercialization responsibilities and costs for that medicine. In the second quarter of 2018, we received $1 billion from Biogen, comprised of $625 million to purchase our stock at an approximately 25 percent cash premium and $375 million in an upfront payment. We are eligible to receive up to $270 million in milestone payments for each medicine that achieves marketing approval. In addition, we are eligible to receive tiered royalties up to the 20 percent range on net sales. From inception through December 2019, we have received over $1 billion in payments under this collaboration, excluding $15 million we generated in the fourth quarter of 2019 for advancing two targets under this collaboration. We will achieve the next payment of $7.5 million if Biogen designates another target under this collaboration. At the commencement of this collaboration, we identified one performance obligation, which was to perform R&D services for Biogen. We determined our transaction price to be $552 million, comprised of $375 million from the upfront payment and $177 million for the premium paid by Biogen for its purchase of our common stock. We determined the fair value of the premium we received by using the stated premium in the SPA and applying a lack of marketability discount. We included a lack of marketability discount in our valuation of the premium because Biogen received restricted shares of our common stock. We allocated the transaction price to our single performance obligation. From inception through December 2019, we have included $597 million in payments in the transaction price for our R&D services performance obligation under this collaboration, including four $7.5 million milestone payments we achieved in 2019 for advancing four targets under this collaboration. These milestone payments did not create new performance obligations because they are part of our original R&D services performance obligation. Therefore, we included these amounts in our transaction price for our R&D services performance obligation in the period we achieved the milestone payment. We are recognizing revenue for our R&D services performance obligation as we perform services based on our effort to satisfy our performance obligation relative to our total effort expected to satisfy our performance obligation. We currently estimate we will satisfy our performance obligation in June 2028. 2013 Strategic Neurology In September 2013, we and Biogen entered into a long-term strategic relationship focused on applying antisense technology to advance the treatment of neurodegenerative diseases. As part of the collaboration, Biogen gained exclusive rights to the use of our antisense technology to develop therapies for neurological diseases and has the option to license medicines resulting from this collaboration. We will usually be responsible for drug discovery and early development of antisense medicines and Biogen will have the option to license antisense medicines after Phase 2 proof-of-concept. In October 2016, we expanded our collaboration to include additional research activities we will perform. If Biogen exercises its option to license a medicine, it will assume all further global development, regulatory and commercialization responsibilities and costs for that medicine. We are currently advancing five medicines in development under this collaboration, including a medicine for Parkinson’s disease, two medicines for ALS and two medicines for undisclosed targets. In December 2018, Biogen exercised its option to license one of our ALS medicines, tofersen, and as a result Biogen is now responsible for all further global development, regulatory and commercialization activities and costs for tofersen. Under the terms of the agreement, we received an upfront payment of $100 million and are eligible to receive milestone payments, license fees and royalty payments for all medicines developed under this collaboration, with the specific amounts dependent upon the modality of the molecule advanced by Biogen. For each antisense molecule that is chosen for drug discovery and development under this collaboration, we are eligible to receive up to approximately $260 million in a license fee and milestone payments per program. The $260 million per program consists of approximately $60 million in development milestones, including amounts related to the cost of clinical trials, and up to $130 million in milestone payments if Biogen achieves pre-specified regulatory milestones. In addition, we are eligible to receive tiered royalties up to the mid-teens on net sales from any antisense medicines developed under this collaboration. From inception through December 2019, we have received over $240 million in upfront fees, milestone payments and other payments under this collaboration. We will achieve the next payment of up to $10 million if we advance a program under this collaboration. At the commencement of our strategic neurology collaboration, we identified one performance obligation, which was to perform R&D services for Biogen. At inception, we determined the transaction price to be the $100 million upfront payment we received and allocated it to our single performance obligation. As we achieve milestone payments for our R&D services, we include these amounts in our transaction price for our R&D services performance obligation. We are recognizing revenue for our R&D services performance obligation based on our effort to satisfy our performance obligation relative to our total effort expected to satisfy our performance obligation. In the third quarter of 2019, we updated our estimate of the total effort we expect to expend to satisfy our performance obligation. As of September 30, 2019, we had completed a significant portion of the research and development services. We expect to complete the remainder of our services in 2020. As a result, we recorded a cumulative catch up adjustment of $16.5 million to decrease revenue in the third quarter of 2019. We will recognize this amount over the estimated remaining period we will perform services. From inception through December 2019, we have included $145 million in total payments in the transaction price for our R&D services performance obligation. Under this collaboration, we have also generated additional payments that we concluded were not part of our R&D services performance obligation. We recognized each of these payments in full in the respective quarter we generated the payment because we did not have any performance obligations for the respective payment. The following are the payments we generated in 2018 and 2019:
| ● | In the third quarter of 2018, we earned a $10 million milestone payment when Biogen initiated a Phase 1 study of IONIS-C9Rx.
| ● | In the fourth quarter of 2018, we earned a $35 million license fee when Biogen licensed tofersen from us because Biogen had full use of the licenses without any continuing involvement from us.
| ● | In the fourth quarter of 2018, we earned a $5 million milestone when Biogen initiated a Proof-of-Concept study for tofersen
| ● | In the third quarter of 2019, we earned an $8 million milestone payment when Biogen initiated a Phase 1/2 study of ION859 (IONIS-LRRK2Rx) for the treatment of people with Parkinson’s disease under this collaboration.
| ● | In the fourth quarter of 2019, we earned a $10 million milestone payment when Biogen advanced IONIS-C9Rx.
2012 Neurology In December 2012, we and Biogen entered into a collaboration agreement to develop and commercialize novel antisense medicines to up to three targets to treat neurodegenerative diseases. We are responsible for the development of each of the medicines through the completion of the initial Phase 2 clinical study for such medicine. Biogen has the option to license a medicine from each of the programs through the completion of the first Phase 2 study for each program. We are currently advancing IONIS-MAPTRx for Alzheimer’s disease and ION581 for Angelman syndrome under this collaboration. If Biogen exercises its option to license a medicine, it will assume all further global development, regulatory and commercialization responsibilities and costs for that medicine. In December 2019, Biogen exercised its option to license IONIS-MAPTRx and as a result Biogen is now responsible for all further global development, regulatory and commercialization activities and costs for IONIS-MAPTRx. Under the terms of the agreement, we received an upfront payment of $30 million. Over the term of the collaboration, we are eligible to receive up to $210 million in a license fee and milestone payments per program, plus a mark-up on the cost estimate of the Phase 1 and 2 studies. The $210 million per program consists of up to $10 million in development milestone payments, plus a mark-up on the cost estimate of the Phase 1 and 2 studies and up to $130 million in milestone payments if Biogen achieves pre-specified regulatory milestones. In addition, we are eligible to receive tiered royalties up to the mid-teens on net sales of any medicines resulting from each of the three programs. From inception through December 2019, we have received $130 million in payments under this collaboration, including $45 million we earned when Biogen licensed IONIS-MAPTRx and $10 million when Biogen advanced ION581, both of which occurred in the fourth quarter of 2019. We also achieved a $7.5 million milestone payment in the first quarter of 2020 when we advanced IONIS-MAPTRx. We will achieve the next payment of $12 million if we continue to advance IONIS-MAPTRx. Under our collaboration, we determined we had a performance obligation to perform R&D services. We allocated $40 million in total payments to the transaction price for our R&D services performance obligation. In the third quarter of 2019, we completed our R&D services performance obligation when we designated a development candidate and Biogen accepted the development candidate. Biogen’s decision to accept the development candidate was not within our control. We were recognizing revenue as we performed services based on our effort to satisfy our performance obligation relative to the total effort expected to satisfy our performance obligation. Because Biogen accepted the development candidate earlier than when we were previously estimating, we recognized $6.3 million of accelerated revenue in the third quarter of 2019. When we commenced development for IONIS-MAPTRx we identified our development work as a separate performance obligation. We are recognizing for our IONIS-MAPTRx development performance obligation based on the percentage of completion. From inception through December 2019, we have included $37.5 million in the transaction price for our IONIS-MAPTRx development performance obligation. We currently estimate we will satisfy our performance obligation in September 2020. Our total transaction price for our IONIS-MAPTRx development performance obligation includes the following payments we achieved in 2019 related to our development work:
| ● | In the second quarter of 2019, we achieved a $7.5 million milestone payment from Biogen when we advanced IONIS-MAPTRx for Alzheimer’s disease under this collaboration.
| ● | In the fourth quarter of 2019, we achieved a $12 million milestone payment from Biogen when we entered into an agreement to conduct a long-term extension study for IONIS-MAPTRx.
In the fourth quarter of 2019, we identified another performance obligation upon Biogen’s license of IONIS-MAPTRx because the license we granted to Biogen is distinct from our other performance obligations. We recognized the $45 million license fee for IONIS-MAPTRx as revenue at that time because Biogen had full use of the license without any continuing involvement from us. Additionally, we did not have any further performance obligations related to the license after we delivered it to Biogen. In the fourth quarter of 2019, we earned a $10 million milestone payment when Biogen advanced ION581. We recognized this milestone payment in full in the fourth quarter of 2019 because we do not have any performance obligations related to this milestone payment. During the years ended December 31, 2019, 2018 and 2017, we earned the following revenue from our relationship with Biogen (in millions, except percentage amounts):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
SPINRAZA royalties (commercial revenue) |  | $ | 293.0 |  |  | $ | 237.9 |  |  | $ | 112.5 |
R&D revenue |  |  | 180.6 |  |  |  | 137.1 |  |  |  | 150.6 |
Total revenue from our relationship with Biogen |  | $ | 473.6 |  |  | $ | 375.0 |  |  | $ | 263.1 |
Percentage of total revenue |  |  | 42 | % |  |  | 63 | % |  |  | 51 | %
Our consolidated balance sheet at December 31, 2019 and 2018 included deferred revenue of $525.8 million and $580.9 million, respectively, related to our relationship with Biogen. Research, Development and Commercialization Partners AstraZeneca Cardiovascular, Renal and Metabolic Diseases Collaboration In July 2015, we and AstraZeneca formed a collaboration to discover and develop antisense therapies for treating cardiovascular, renal and metabolic diseases. Under our collaboration, AstraZeneca has licensed three medicines from us: IONIS-AZ4-2.5-LRx, a medicine we designed to treat cardiovascular disease and our first medicine that combines our Generation 2.5 and LICA technology, ION532, a medicine we designed to treat a genetically associated form of kidney disease and ION839, a medicine we designed to inhibit an undisclosed target to treat patients with nonalcoholic steatohepatitis, or NASH. AstraZeneca is responsible for all further global development, regulatory and commercialization activities and costs for each of the medicines it has licensed and any medicines AstraZeneca licenses in the future. Under the terms of the agreement, we received a $65 million upfront payment. We are eligible to receive license fees and milestone payments of up to more than $4 billion as medicines under this collaboration advance, including up to $1.1 billion for the achievement of development milestones and up to $2.9 billion for regulatory milestones. In addition, we are eligible to receive tiered royalties up to the low teens on net sales from any product that AstraZeneca successfully commercializes under this collaboration agreement. We will achieve the next payment of $10 million under this collaboration if we advance a medicine under this collaboration. From inception through December 2019, we have received over $175 million in upfront fees, license fees, milestone payments, and other payments under this collaboration, including a $10 million milestone payment we earned in the fourth quarter of 2019 when AstraZeneca initiated a Phase 1 trial for ION839. At the commencement of this collaboration, we identified one performance obligation, which was to perform R&D services for AstraZeneca. We determined the transaction price to be the $65 million upfront payment we received and we allocated it to our single performance obligation. We are recognizing revenue for our R&D services performance obligation as we perform services based on our effort to satisfy this performance obligation relative to our total effort expected to satisfy our performance obligation. We currently estimate we will satisfy this performance obligation in August 2021. As we achieve milestone payments for our R&D services, we include these amounts in our transaction price for our R&D services performance obligation. From inception through December 2019, we have included $90 million in payments in the transaction price for our R&D services performance obligation. Under this collaboration, we have also generated additional payments that we concluded were not part of our R&D services performance obligation. We recognized each of these payments in full in the respective quarter we generated the payment because the payments were distinct and we did not have any performance obligations for the respective payment. The following are the payments we have earned:
| ● | In the first quarter of 2018, we earned two $30 million license fees when AstraZeneca licensed ION532 and ION839 because AstraZeneca had full use of the licenses without any continuing involvement from us.
| ● | In the third quarter of 2018, we earned a $10 million milestone payment when AstraZeneca initiated a Phase 1 study of IONIS-AZ4-2.5-LRx.
| ● | In the fourth quarter of 2019, we earned a $10 million milestone payment when AstraZeneca initiated a Phase 1 study of ION839.
Oncology Collaboration In December 2012, we entered into a collaboration agreement with AstraZeneca to discover and develop antisense medicines to treat cancer. As part of the agreement, we granted AstraZeneca an exclusive license to develop and commercialize danvatirsen for the treatment of cancer. AstraZeneca is responsible for all global development, regulatory and commercialization activities for danvatirsen. We and AstraZeneca have evaluated danvatirsen in people with head and neck cancer, advanced lymphoma and advanced metastatic hepatocellular carcinoma. AstraZeneca is evaluating danvatirsen in combination with durvalumab, AstraZeneca’s PD-L1, blocking medicine, in people with head and neck cancer, metastatic bladder cancer and metastatic non-small cell lung cancer. We and AstraZeneca also established an oncology research program. AstraZeneca has the option to license medicines resulting from the program, and if AstraZeneca exercises its option to license a medicine, it will be responsible for all further global development, regulatory and commercialization activities and costs for such medicine. In the fourth quarter of 2018, we added ION736 (formerly IONIS-AZ7-2.5Rx) to our preclinical pipeline, a second medicine under our oncology collaboration. Under the terms of this agreement, we received $31 million in upfront payments. We are eligible to receive milestone payments and license fees from AstraZeneca as programs advance in development. If AstraZeneca successfully develops danvatirsen and ION736 under the research program, we could receive license fees and milestone payments of up to more than $450 million, including up to $152 million for the achievement of development milestones and up to $275 million for the achievement of regulatory milestones. In addition, we are eligible to receive tiered royalties up to the mid-teens on net sales from any medicines resulting from these programs. From inception through December 2019, we have received over $125 million in upfront fees, milestone payments, and other payments under this oncology collaboration, including nearly $30 million in milestone payments we achieved when AstraZeneca advanced danvatirsen and ION736, in the fourth quarter of 2018. We will achieve the next payment of up to $25 million if we advance a medicine under our cancer research program with AstraZeneca. At the commencement of this collaboration, we identified four performance obligations, three of which we completed in March 2014 and we completed the remaining R&D services performance obligation in February 2018. In the fourth quarter of 2018, we earned a $17.5 million milestone payment and a $10 million milestone payment when AstraZeneca advanced two programs under our collaboration. We recognized these milestone payments in full in the fourth quarter because we do not have any performance obligations related to these milestone payments. During the years ended December 31, 2019, 2018 and 2017, we earned the following revenue from our relationship with AstraZeneca (in millions, except percentage amounts):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
R&D revenue |  | $ | 28.1 |  |  | $ | 120.7 |  |  | $ | 21.6 |
Percentage of total revenue |  |  | 3 | % |  |  | 20 | % |  |  | 4 | %
Our consolidated balance sheet at December 31, 2019 and 2018 included deferred revenue of $25.0 million and $40.1 million, respectively, related to our relationship with AstraZeneca. Bayer In May 2015, we entered into an exclusive license agreement with Bayer to develop and commercialize IONIS-FXIRx for the prevention of thrombosis. We were responsible for completing a Phase 2 study of IONIS-FXIRx in people with end-stage renal disease on hemodialysis. Under the terms of the agreement, we received a $100 million upfront payment in the second quarter of 2015. In February 2017, we amended our agreement with Bayer to advance IONIS-FXIRx and to initiate development of IONIS-FXI-LRx, which Bayer licensed. In conjunction with the decision to advance these programs, we received a $75 million payment from Bayer. In October 2019, Bayer decided it would advance IONIS-FXI-LRx following positive clinical results. Bayer is now responsible for all global development, regulatory and commercialization activities and costs for the FXI program. We are eligible to receive up to $385 million in license fees, milestone payments and other payments, including up to $125 million for the achievement of development milestones and up to $110 million for the achievement of commercialization milestones. In addition, we are eligible to receive tiered royalties in the low to high 20 percent range on gross margins of both medicines combined. From inception through December 2019, we have received over $185 million from our Bayer collaboration, including a $10 million milestone payment we earned in the fourth quarter of 2019 when Bayer decided it would advance IONIS-FXI-LRx. We will achieve the next payment of $20 million if Bayer initiates a Phase 3 study for the FXI program. At the commencement of this collaboration, we identified three performance obligations, the license of IONIS-FXIRx, which we delivered in May 2016, R&D services and delivery of API, both of which we completed in November 2016. In February 2017, when we amended our collaboration with Bayer, we identified two new performance obligations, one for the license of IONIS-FXI-LRx and one for R&D services. We determined the transaction price to be the $75 million payment. We allocated $64.9 million to the license of IONIS-FXI-LRx based on its estimated relative stand-alone selling price and recognized the associated revenue upon our delivery of the license in the first quarter of 2017. We allocated $10.1 million to our R&D services performance obligation based on an estimated relative stand-alone selling price. We recognized revenue for our R&D services performance obligation as we performed services based on our effort to satisfy our performance obligation relative to our total effort expected to satisfy our performance obligation which we completed in the third quarter of 2019. In the fourth quarter of 2019, we earned a $10 million milestone payment when Bayer decided it would advance IONIS-FXI-LRx. We recognized this milestone payment in full in the fourth quarter of 2019 because we do not have any performance obligations related to this milestone payment. During the years ended December 31, 2019, 2018 and 2017, we earned the following revenue from our relationship with Bayer (in millions, except percentage amounts):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
R&D revenue |  | $ | 14.3 |  |  | $ | 5.0 |  |  | $ | 67.1 |
Percentage of total revenue |  |  | 1 | % |  |  | 1 | % |  |  | 13 | %
Our consolidated balance sheet at December 31, 2019 and 2019 included deferred revenue of $2.4 million and $4.3 million, respectively, related to our relationship with Bayer. GSK In March 2010, we entered into an alliance with GSK using our antisense drug discovery platform to discover and develop new medicines against targets for rare and serious diseases, including infectious diseases and some conditions causing blindness. Under the terms of the agreement, we received upfront payments of $35 million. Our collaboration with GSK currently includes two medicines targeting hepatitis B virus, or HBV: IONIS-HBVRx and IONIS-HBV-LRx, which we designed to reduce the production of viral proteins associated with HBV infection. In the third quarter of 2019, following positive Phase 2 results, GSK licensed our HBV program. GSK is responsible for all global development, regulatory and commercialization activities and costs for the HBV program. Under our agreement, if GSK successfully develops these medicines and achieves pre-agreed sales targets, we could receive license fees and milestone payments of up to $262 million, including up to $47.5 million for the achievement of development milestones, up to $120 million for the achievement of regulatory milestones and up to $70 million for the achievement of commercialization milestones. In addition, we are eligible to receive tiered royalties up to the mid-teens on net sales from any product that GSK successfully commercializes under this alliance. From inception through December 2019, we have received more than $189 million in payments under this alliance with GSK, including a $25 million license fee we earned in the third quarter of 2019 when GSK licensed the HBV program. We will achieve the next payment of $15 million when GSK initiates a Phase 3 study of a medicine under this program. We completed our R&D services performance obligations under our collaboration in March 2015. We identified a new performance obligation when we granted GSK the license of the HBV program and assignment of related intellectual property rights in the third quarter of 2019 because the license is distinct from our other performance obligations. We recognized the $25 million license fee for the HBV program as revenue at that time because GSK had full use of the license without any continuing involvement from us. Additionally, we did not have any further performance obligations related to the license after we delivered it to GSK. We do not have any remaining performance obligations under our collaboration with GSK; however, we can still earn additional payments and royalties as GSK advances the HBV program. During the years ended December 31, 2019, 2018 and 2017, we earned the following revenue from our relationship with GSK (in millions, except percentage amounts):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
R&D revenue |  | $ | 25.4 |  |  | $ | 1.6 |  |  | $ | 14.8 |
Percentage of total revenue |  |  | 2 | % |  |  | 0 | % |  |  | 3 | %
We did not have any deferred revenue from our relationship with GSK at December 31, 2019 and 2018. Janssen Biotech, Inc. In December 2014, we entered into a collaboration agreement with Janssen Biotech, Inc. to discover and develop antisense medicines that can be locally administered, including oral delivery, to treat autoimmune disorders of the GI tract. Janssen had the option to license medicines from us through the designation of development candidates for up to three programs. Under our collaboration, Janssen licensed ION253 in November 2017, which is currently in preclinical development. Prior Janssen’s license of ION253, we were responsible for the discovery activities to identify development candidates. Under the license, Janssen is responsible for the global development, regulatory and commercial activities for ION253. Under the terms of the agreement, we received $35 million in upfront payments. We are eligible to receive up to more than $285 million in license fees and milestone payments for these programs, including up to $65 million for the achievement of development milestones, up to $160 million for the achievement of regulatory milestones and up to $60 million for the achievement of commercialization milestones. From inception through December 2019, we have received over $75 million. In addition, we are eligible to receive tiered royalties up to the near teens on net sales from any medicines resulting from this collaboration. We will achieve the next payment of $5 million if Janssen continues to advance a target under this collaboration. At the commencement of this collaboration, we identified one performance obligation, which was to perform R&D services for Janssen. We determined the transaction price to be the $35 million upfront payments we received. We allocated the $35 million to our single performance obligation. As we achieved milestone payments for our R&D services, we included these amounts in our transaction price for our R&D services performance obligation. We recognized revenue for our R&D services performance obligation over our period of performance, which ended in November 2017. We identified separate performance obligation when Janssen licensed ION253 under our collaboration because the license we granted to Janssen was distinct from our other performance obligations. We recognized the $5 million license fee for ION253 in November 2017, because Janssen had full use of the licenses without any continuing involvement from us. Additionally, we did not have any further performance obligations related to the license after we delivered it to Janssen. During the years ended December 31, 2019, 2018 and 2017, we earned the following revenue from our relationship with Janssen (in millions, except percentage amounts):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
R&D revenue |  | $ | 0.1 |  |  | $ | 6.6 |  |  | $ | 36.0 |
Percentage of total revenue |  |  | 0 | % |  |  | 1 | % |  |  | 7 | %
We did not have any deferred revenue from our relationship with Janssen at December 31, 2019 and 2018. Roche Huntington’s Disease In April 2013, we formed an alliance with Hoffman-La Roche Inc. and F. Hoffmann-La Roche Ltd., collectively Roche, to develop treatments for HD based on our antisense technology. Under the agreement, we discovered and developed tominersen, an antisense medicine targeting HTT protein. We developed tominersen through completion of our Phase 1/2 clinical study in people with early stage HD. In December 2017, upon completion of the Phase 1/2 study, Roche exercised its option to license tominersen and is now responsible for the global development, regulatory and commercialization activities and costs for tominersen. Under the terms of the agreement, we received an upfront payment of $30 million in April 2013 and an additional $3 million payment in 2017. We are eligible to receive up to $365 million in a license fee and milestone payments including up to $70 million for the achievement of development milestones, up to $170 million for the achievement of regulatory milestones and up to $80 million for the achievement of commercialization milestones. In addition, we are eligible to receive up to $136.5 million in milestone payments for each additional medicine successfully developed. We are also eligible to receive tiered royalties up to the mid-teens on any net sales of any product resulting from this alliance. From inception through December 2019, we have received over $145 million in upfront fees, milestone payments and license fees for advancing tominersen, including $35 million in milestone payments we earned in the first quarter of 2019 when Roche dosed the first patient in a Phase 3 study for tominersen. We will achieve the next payment of $15 million if Roche advances tominersen. At the commencement of this collaboration, we identified one performance obligation, which was to perform R&D services for Roche. We determined the transaction price to be the $30 million upfront payment we received and allocated it to our single performance obligation. As we achieved milestone payments for our R&D services, we included these amounts in our transaction price for our R&D services performance obligation. We recognized revenue for our R&D services performance obligation over our period of performance, which ended in September 2017. Under this collaboration, we have also generated additional payments that we concluded were not part of our R&D services performance obligation. We recognized each of these payments in full in the respective quarter we generated the payment because the payments were distinct and we did not have any performance obligations for the respective payment. The following are the payments we have earned:
| ● | In the fourth quarter of 2017, we earned a $45 million license fee when Roche licensed tominersen because Roche had full use of the license without any continuing involvement from us.
| ● | In the first quarter of 2019, we earned $35 million in milestone payments when Roche dosed the first patient in the Phase 3 study of tominersen in the first quarter of 2019.
We do not have any remaining performance obligations related to tominersen under this collaboration with Roche; however, we can still earn additional payments and royalties as Roche advances tominersen. IONIS-FB-LRx for Complement-Mediated Diseases In October 2018, we entered into a collaboration agreement with Roche to develop IONIS-FB-LRx for the treatment of complement-mediated diseases. We are currently conducting Phase 2 studies in two disease indications for IONIS-FB-LRx, one for the treatment of patients with geographic atrophy, or GA, the advanced stage of dry age-related macular degeneration, or AMD, and a second for the treatment of patients with IgA nephropathy. Roche has the option to license IONIS-FB-LRx at the completion of these studies. Upon licensing, Roche will be responsible for all further global development, regulatory and commercialization activities and costs. Under the terms of this agreement, we received a $75 million upfront payment in October 2018. We are eligible to receive up to $684 million in development, regulatory and sales milestone payments and license fees. In addition, we are also eligible to receive tiered royalties from the high teens to 20 percent on net sales. We will achieve the next payment of $20 million when we advance the Phase 2 study in patients with dry AMD. At the commencement of this collaboration, we identified one performance obligation, which was to perform R&D services for Roche. We determined the transaction price to be the $75 million upfront payment we received and allocated it to our single performance obligation. We are recognizing revenue for our R&D services performance obligation as we perform services based on our effort to satisfy our performance obligation relative to our total effort expected to satisfy our performance obligation. We currently estimate we will satisfy our performance obligation in December 2022. During the years ended December 31, 2019, 2018 and 2017, we earned the following revenue from our relationship with Roche (in millions, except percentage amounts):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
R&D revenue |  | $ | 57.0 |  |  | $ | 8.3 |  |  | $ | 55.7 |
Percentage of total revenue |  |  | 5 | % |  |  | 1 | % |  |  | 11 | %
Our consolidated balance sheet at December 31, 2019 and 2018 included deferred revenue of $52.3 million and $72.6 million related to our relationship with Roche, respectively. Akcea Collaborations The following collaboration agreements relate to Akcea, our majority owned affiliate. Akcea is responsible for the development activities under these collaborations. As such, Akcea recognizes the associated revenue earned, cash received and expenses incurred in its statement of operations, which we reflect in our consolidated results. We also reflect the noncontrolling interest attributable to other owners of Akcea’s common stock in a separate line on our statement of operations and a separate line within stockholders’ equity on our consolidated balance sheet. For each of Akcea's collaborations Akcea pays us sublicense fees for payments that it receives and we recognize those fees as revenue in our Ionis Core operating segment results and Akcea recognizes the fees as R&D expense. In our consolidated results, we eliminate any sublicense revenue and expense. Novartis In January 2017, we and Akcea initiated a collaboration with Novartis to develop and commercialize AKCEA-APO(a)-LRx and AKCEA-APOCIII-LRx. Akcea received a $75 million upfront payment in the first quarter of 2017, of which it retained $60 million and paid us $15 million as a sublicense fee. In February 2019, Novartis licensed AKCEA-APO(a)-LRx and Akcea earned a $150 million license fee. Akcea paid us $75 million as a sublicense fee in 2.8 million shares of Akcea common stock. Novartis is responsible for conducting and funding all future development, regulatory and commercialization activities for AKCEA-APO(a)-LRx, including a global Phase 3 cardiovascular outcomes study, which Novartis initiated in December 2019. In connection with Novartis’ license of AKCEA-APO(a)-LRx, Akcea and Novartis established a more definitive framework under which the companies would negotiate the co-commercialization of AKCEA-APO(a)-LRx in selected markets. Included in this framework is an option by which Novartis could solely commercialize AKCEA-APO(a)-LRx in exchange for Novartis paying Akcea increased commercial milestone payments based on sales of AKCEA-APO(a)-LRx. When Novartis decided to not exercise its option for AKCEA-APOCIII-LRx, Akcea retained rights to develop and commercial AKCEA-APOCIII-LRx. Under the collaboration, Akcea is eligible to receive up to $675 million in milestone payments, including $25 million for the achievement of a development milestone, up to $290 million for the achievement of regulatory milestones and up to $360 million for the achievement of commercialization milestones. Akcea is also eligible to receive tiered royalties in the mid-teens to low 20 percent range on net sales of AKCEA-APO(a)-LRx. Akcea will pay 50 percent of these license fees, milestone payments and royalties to us as sublicense fees. In conjunction with this collaboration, we 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. As part of the SPA, Novartis was required to purchase $50 million of Akcea’s common stock at the IPO price or our common stock at a premium if an IPO did not occur by April 2018. Under the SPA, in July 2017, Novartis purchased $50 million of Akcea’s common stock in a separate private placement concurrent with the completion of Akcea's IPO at a price per share equal to the IPO price. At the commencement of this collaboration, Akcea identified four separate performance obligations:
| ● | R&D services for AKCEA-APO(a)-LRx;
| ● | R&D services for AKCEA-APOCIII-LRx;
| ● | API for AKCEA-APO(a)-LRx; and
| ● | API for AKCEA-APOCIII-LRx.
Akcea determined that the R&D services for each medicine and the API for each medicine were distinct from its other performance obligations. Akcea determined our transaction price to be $108.4 million, comprised of the following:
| ● | $75 million from the upfront payment;
| ● | $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 would have paid if they purchased our common stock in the future.
Akcea allocated the transaction price based on the estimated stand-alone selling price of each performance obligation as follows:
| ● | $64.0 million for the R&D services for AKCEA-APO(a)-LRx;
| ● | $40.1 million for the R&D services for AKCEA-APOCIII-LRx;
| ● | $1.5 million for the delivery of AKCEA-APO(a)-LRx API; and
| ● | $2.8 million for the delivery of AKCEA-APOCIII-LRx API.
Akcea recognized revenue related to each of the performance obligations as follows:
| ● | Akcea completed its R&D services performance obligation for AKCEA-APO(a)-LRx in second quarter of 2019. As such, Akcea recognized all revenue it allocated to its AKCEA-APO(a)-LRx R&D services as of the end of the second quarter of 2019;
| ● | Akcea completed its R&D services performance obligation for AKCEA-APOCIII-LRx in the fourth quarter of 2019 because Novartis elected to terminate the strategic collaboration for AKCEA-APOCIII-LRx during the period. As a result, Akcea was not required to provide any further R&D services, as such, Akcea recognized all revenue it allocated to its AKCEA-APOCIII-LRx LRx R&D services as of the end of the fourth quarter of 2019;
| ● | Akcea recognized the amount attributed to AKCEA-APO(a)-LRx API when Akcea delivered it to Novartis in 2017; and
| ● | Akcea recognized the amount attributed to AKCEA-APOCIII-LRx API when Akcea delivered it to Novartis in May 2018.
Akcea recognized revenue related to the R&D services for the AKCEA-APO(a)-LRx and AKCEA-APOCIII-LRx performance obligations as Akcea performed services based on its effort to satisfy its performance obligation relative to Akcea's total effort expected to satisfy its performance obligation. During the years ended December 31, 2019 and 2018, Akcea earned the following revenue from its relationship with Novartis (in millions, except percentage amounts):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
R&D revenue |  | $ | 187.4 |  |  | $ | 50.6 |  |  | $ | 43.4 |
Percentage of total revenue |  |  | 17 | % |  |  | 8 | % |  |  | 8 | %
Our consolidated balance sheet at December 31, 2018 included deferred revenue of $28.8 million related to Akcea's relationship with Novartis. We did not have any deferred revenue from our relationship with Novartis at December 31, 2019. Pfizer AKCEA-ANGPTL3-LRx In October 2019, Akcea initiated a collaboration with Pfizer for the license of AKCEA-ANGPTL3-LRx, a medicine to treat people with cardiovascular and metabolic diseases. Akcea recently completed a Phase 2 study of AKCEA-ANGPTL3-LRx in patients with elevated levels of triglycerides, or hypertriglyceridemia, type 2 diabetes and non-alcoholic fatty liver disease, or NAFLD. Pfizer is responsible for all development and regulatory activities and costs beyond those associated with this study. Under the terms of the agreement, Akcea received a $250 million upfront payment. Akcea is also eligible to receive development, regulatory and sales milestone payments of up to $1.3 billion, including up to $205 million for the achievement of development milestones, up to $250 million for the achievement of regulatory milestones and up to $850 million for the achievement of commercialization milestones. Akcea is also eligible to earn tiered royalties in the mid-teens to low 20 percent range on annual worldwide net sales. Akcea has retained the rights to co-commercialize AKCEA-ANGPTL3-LRx in the U.S. and certain additional markets. Akcea will achieve the next payment of $75 million when Pfizer advances AKCEA-ANGPTL3-LRx. At the commencement of this collaboration, Akcea identified three separate performance obligations:
| ● | License of AKCEA-ANGPTL3-LRx;
| ● | R&D services for AKCEA-ANGPTL3-LRx; and
| ● | API for AKCEA-ANGPTL3-LRx.
Akcea determined the transaction price to be $250 million, the upfront payment it received. Akcea allocated the transaction price based on the estimated stand-alone selling price of each performance obligation as follows:
| ● | $245.6 million for the license of AKCEA-ANGPTL3-LRx;
| ● | $2.2 million for the R&D services for AKCEA-ANGPTL3-LRx; and
| ● | $2.2 million for the delivery of AKCEA-ANGPTL3-LRx API.
Akcea is recognizing revenue related to each of its performance obligations as follows:
| ● | Akcea recognized $245.6 million for the license of AKCEA-ANGPTL3-LRx in the fourth quarter of 2019 because Akcea determined the license Akcea granted to Pfizer was distinct from its other performance obligations and Pfizer had full use of the license without any continuing involvement from Akcea.
| ● | Akcea is recognizing revenue related to the R&D services for AKCEA-ANGPTL3-LRx as Akcea performs services based on Akcea's effort to satisfy its performance obligation relative to Akcea's total effort expected to satisfy its performance obligation. Akcea expects to satisfy its R&D services performance obligation by mid-2020.
| ● | Akcea recognized the amount attributed to the API supply for AKCEA-ANGPTL3-LRx when it delivered it to Pfizer in the fourth quarter of 2019.
During the fourth quarter of 2019, we received 6.9 million shares of Akcea common stock for payment of the $125 million sublicense fee Akcea owed us. During the year ended December 31, 2019, Akcea earned the following revenue from its relationship with Pfizer (in millions, except percentage amounts):
|  | Year Ended December 31, 2019 |
R&D revenue |  | $ | 248.7 |
Percentage of total revenue |  |  | 22 | %
Our consolidated balance sheet at December 31, 2019 included deferred revenue of $1.3 million related to Akcea’s relationship with Pfizer. PTC Therapeutics In August 2018, Akcea entered into an exclusive license agreement with PTC Therapeutics to commercialize TEGSEDI and WAYLIVRA in Latin America. Under the license agreement, Akcea is eligible to receive up to $26 million in payments, including $12 million it received in the third quarter of 2018, $6 million it received in the second quarter of 2019 following European Medicines Agency, or EMA, approval of WAYLIVRA, $4 million it received in the fourth quarter of 2019 when PTC received approval for TEGSEDI in Brazil, and up to $4 million in an additional regulatory milestone payment. Akcea is eligible to receive royalties from PTC in the mid-20 percent range on net sales in Latin America for each medicine. PTC’s obligation to pay Akcea royalties begins on the earlier of 12 months after the first commercial sale of a product in Brazil or the date that PTC recognizes revenue of at least $10 million in Latin America. Consistent with the agreements between Ionis and Akcea, the companies will share all payments, including royalties. At the commencement of this collaboration, Akcea identified two performance obligations, which were the licenses Akcea granted to PTC to commercialize TEGSEDI and WAYLIVRA in Latin America in the third quarter of 2018. Akcea recognized $12 million in license fee revenue at that time because PTC had full use of both licenses without any continuing involvement from Akcea. Akcea does not have any remaining performance obligations under its collaboration with PTC. Akcea can still earn additional payments and royalties as PTC commercializes the medicines. In the second quarter of 2019, Akcea earned a $6 million payment when WAYLIVRA was approved by the EMA. Akcea recognized this payment in full in the second quarter of 2019 because it does not have any performance obligations related to this payment. Additionally, in the fourth quarter of 2019, Akcea earned $4 million when TEGSEDI was approved in Brazil. Akcea recognized this payment in full in the fourth quarter of 2019 because it does not have any performance obligations related to this payment. During the years ended December 31, 2019 and 2018, Akcea earned the following revenue from its relationship with PTC (in millions, except percentage amounts):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |
Licensing and other royalty revenue (commercial revenue) |  | $ | 10.2 |  |  | $ | 12.0 |
Percentage of total revenue |  |  | 1 | % |  |  | 2 | %
Our consolidated balance sheet at December 31, 2019 and 2018 did not include any deferred revenue related to Akcea’s relationship with PTC.

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