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Organization and Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2019

Organization and Significant Accounting Policies [Abstract]

Our basic net income per share, was calculated as follows (in thousands, except per share amounts):

Year Ended December 31, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Income Per Share		Ionis’ Portion of Akcea’s Net Income
Common shares		70,100	$	0.49	$	34,073
Akcea’s net income attributable to our ownership					$	34,073
Ionis’ stand-alone net income						262,490
Net income available to Ionis common stockholders					$	296,563
Weighted average shares outstanding						139,998
Basic net income per share					$	2.12

Year Ended December 31, 2018	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Ionis’ Portion of Akcea’s Net Loss
Common shares		59,812	$	(2.74	)	$	(163,938	)
Akcea’s net loss attributable to our ownership						$	(163,938	)
Ionis’ stand-alone net income							440,806
Net income available to Ionis common stockholders						$	276,868
Weighted average shares outstanding							132,320
Basic net income per share						$	2.09

We calculated our basic net income per share for 2017 as follows (in thousands, except per share amounts):

Year Ended December 31, 2017	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Ionis’ Portion of Akcea’s Net Loss
Common shares		20,669	$	(3.08	)	$	(63,638	)
Preferred shares		15,748		(1.80	)		(28,346	)
Akcea’s net loss attributable to our ownership						$	(91,984	)
Ionis’ stand-alone net income							110,776
Net income available to Ionis common stockholders						$	18,792
Weighted average shares outstanding							124,016
Basic net income per share						$	0.15

Basic and Diluted Net Income Per Share

We calculated our diluted net income per share as follows (in thousands except per share amounts):

Year Ended December 31, 2019	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income available to Ionis common stockholders	$	296,563		139,998	$	2.12
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		2,090
Shares issuable upon restricted stock award issuance		—		766
Shares issuable related to our Employee Stock Purchase Plan		—		18
Income available to Ionis common stockholders, plus assumed conversions	$	296,563		142,872	$	2.08

Year Ended December 31, 2018	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income available to Ionis common stockholders	$	276,868		132,320	$	2.09
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		1,216
Shares issuable upon restricted stock award issuance		—		514
Shares issuable related to our Employee Stock Purchase Plan		—		6
Income available to Ionis common stockholders, plus assumed conversions	$	276,868		134,056	$	2.07

Year Ended December 31, 2017	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income available to Ionis common stockholders	$	18,792		124,016	$	0.15
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		1,619
Shares issuable upon restricted stock award issuance		—		459
Shares issuable related to our Employee Stock Purchase Plan		—		4
Income available to Ionis common stockholders, plus assumed conversions	$	18,792		126,098	$	0.15

Amortization Expense for Patents

Based on our existing patents, we estimate amortization expense related to patents in each of the next five years to be the following:

Year Ending December 31,	Amortization (in millions)
2020	$	1.8
2021	$	1.8
2022	$	1.7
2023	$	1.6
2024	$	1.4

Accrued Liabilities

Our accrued liabilities consisted of the following (in thousands):

	December 31,
	2019		2018
Clinical expenses	$	24,461	$	22,125
In-licensing expenses		10,289		12,298
Other miscellaneous expenses		32,019		13,080
Total accrued liabilities	$	66,769	$	47,503

Inventory

Our inventory consisted of the following (in thousands):

	December 31,
	2019		2018
Raw materials:
Raw materials- clinical	$	9,363	$	8,497
Raw materials- commercial		6,520		—
Total raw materials		15,883		8,497
Work in process		2,039		—
Finished goods		258		85
Total inventory	$	18,180	$	8,582

Property, Plant and Equipment

We carry our property, plant and equipment at cost and depreciate it on the straight-line method over its estimated useful life, which consists of the following (in thousands):

	Estimated Useful Lives		December 31,
	(in years)		2019			2018
Computer software, laboratory, manufacturing and other equipment	3 to 10		$	60,965		$	53,496
Building, building improvements and building systems	15 to 40			119,830			97,528
Land improvements		20		2,853			2,853
Leasehold improvements	5 to 15			13,600			18,981
Furniture and fixtures	5 to 10			7,354			6,283
				204,602			179,141
Less accumulated depreciation				(74,013	)		(61,474	)
				130,589			117,667
Land				23,062			14,493
Total			$	153,651		$	132,160

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 loss to our Consolidated Statement of Operations. The following table summarizes changes in accumulated other comprehensive loss for the years ended December 31, 2019, 2018 and 2017 (in thousands):

	Year Ended December 31,
	2019			2018			2017
Beginning balance accumulated other comprehensive loss	$	(32,016	)	$	(31,759	)	$	(30,358	)
Unrealized gains (losses) on securities, net of tax (1)		6,633			(280	)		(960	)
Amounts reclassified from accumulated other comprehensive loss		—			—			(374	)
Currency translation adjustment		93			23			(67	)
Net other comprehensive loss for the period		6,726			(257	)		(1,401	)
Ending balance accumulated other comprehensive loss	$	(25,290	)	$	(32,016	)	$	(31,759	)

(1)	A tax benefit of $1.4 million and $0.3 million was included in other comprehensive loss for the years ended December 31, 2019 and 2018, respectively. There was no tax benefit or expense for other comprehensive loss for the year ended December 31, 2017.

Assets Measured at Fair Value on a Recurring Basis

The following tables present the major security types we held at December 31, 2019 and 2018 that we regularly measure and carry at fair value. At December 31, 2019, a portion of our ProQR investment was subject to trading restrictions through the fourth quarter of 2020, as a result we included a lack of marketability discount in valuing this investment, which is a Level 3 input. At December 31, 2018, our ProQR investment was subject to trading restrictions through the fourth quarter of 2019, as a result we included a lack of marketability discount in valuing this investment, which is a Level 3 input. 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 December 31, 2019		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents (1)	$	418,406	$	418,406	$	—	$	—
Corporate debt securities (2)		1,102,568		—		1,102,568		—
Debt securities issued by U.S. government agencies (3)		329,404		—		329,404		—
Debt securities issued by the U.S. Treasury (4)		363,694		363,694		—		—
Debt securities issued by states of the U.S. and political subdivisions of the states (4)		40,407		—		40,407		—
Investment in ProQR Therapeutics N.V. (5)		4,506		—		—		4,506
Total	$	2,258,985	$	782,100	$	1,472,379	$	4,506

	At December 31, 2018		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents (1)	$	146,281	$	146,281	$	—	$	—
Corporate debt securities (6)		1,252,960		—		1,252,960		—
Debt securities issued by U.S. government agencies (4)		276,612		—		276,612		—
Debt securities issued by the U.S. Treasury (7)		260,154		260,154		—		—
Debt securities issued by states of the U.S. and political subdivisions of the states (4)		79,942		—		79,942		—
Investment in ProQR Therapeutics N.V. (5)		1,349		—		—		1,349
Total	$	2,017,298	$	406,435	$	1,609,514	$	1,349

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(1)	Included in cash and cash equivalents on our consolidated balance sheet.

(2)	$19.0 million included in cash and cash equivalents on our consolidated balance sheet, with the difference included in short-term investments on our consolidated balance sheet.

(3)	$0.8 million included in cash and cash equivalents on our consolidated balance sheet, with the difference included in short-term investments on our consolidated balance sheet.

(4)	Included in short-term investments.

(5)	Included in other current assets on our consolidated balance sheet.

(6)	$50.2 million included in cash and cash equivalents on our consolidated balance sheet, with the difference included in short-term investments on our consolidated balance sheet.

(7)	$14.2 million included in cash and cash equivalents on our consolidated balance sheet, with the difference included in short-term investments on our consolidated balance sheet.