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Significant Accounting Policies (Tables) | 9 Months Ended
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Sep. 30, 2020
Significant Accounting Policies [Abstract] |
Inventory | We review our inventory periodically and reduce the carrying value of items we consider to be slow moving or obsolete to their estimated net realizable value based on forecasted demand compared to quantities on hand. We consider several factors in estimating the net realizable value, including shelf life of our inventory, alternative uses for our medicines in development and historical write-offs. We did not record any material inventory write-offs for the nine months ended September 30, 2020. Total inventory was $22.2 million and $18.2 million as of September 30, 2020 and December 31, 2019, respectively, and consisted of the following (in thousands):
|  | September 30, 2020 |  |  | December 31, 2019 |
Raw materials: |  |  |  |  |  |
Raw materials- clinical |  | $ | 9,294 |  |  | $ | 9,363 |
Raw materials- commercial |  |  | 8,582 |  |  |  | 6,520 |
Total raw materials |  |  | 17,876 |  |  |  | 15,883 |
Work in process |  |  | 3,346 |  |  |  | 2,039 |
Finished goods |  |  | 950 |  |  |  | 258 |
Total inventory |  | $ | 22,172 |  |  | $ | 18,180 |
Basic Net Income per Share | Our basic net loss per share for the three months ended September 30, 2020, was calculated as follows (in thousands, except per share amounts):
Three months ended September 30, 2020 |  | Weighted Average Shares Owned in Akcea |  |  | Akcea’s Net Loss Per Share |  |  | Basic Net Loss Per Share Calculation |
Ionis’ portion of Akcea’s net loss |  |  | 77,095 |  |  | $ | (0.49 | ) |  | $ | (37,822 | )
Akcea’s net loss attributable to our ownership |  |  |  |  |  |  |  |  |  | $ | (37,822 | )
Ionis’ stand-alone net income |  |  |  |  |  |  |  |  |  |  | 6,774 |
Net loss available to Ionis common stockholders |  |  |  |  |  |  |  |  |  | $ | (31,048 | )
Weighted average shares outstanding |  |  |  |  |  |  |  |  |  |  | 139,708 |
Basic net loss per share |  |  |  |  |  |  |  |  |  | $ | (0.22 | )
Our basic net loss per share for the nine months ended September 30, 2020, was calculated as follows (in thousands, except per share amounts):
Nine months ended September 30, 2020 |  | Weighted Average Shares Owned in Akcea |  |  | Akcea’s Net Loss Per Share |  |  | Basic Net Loss Per Share Calculation |
Ionis’ portion of Akcea’s net loss |  |  | 77,095 |  |  | $ | (1.40 | ) |  | $ | (108,176 | )
Akcea’s net loss attributable to our ownership |  |  |  |  |  |  |  |  |  | $ | (108,176 | )
Ionis’ stand-alone net loss |  |  |  |  |  |  |  |  |  |  | (3,049 | )
Net loss available to Ionis common stockholders |  |  |  |  |  |  |  |  |  | $ | (111,225 | )
Weighted average shares outstanding |  |  |  |  |  |  |  |  |  |  | 139,497 |
Basic net loss per share |  |  |  |  |  |  |  |  |  | $ | (0.80 | )
Our basic net income per share for the three months ended September 30, 2019, was calculated as follows (in thousands, except per share amounts):
Three months ended September 30, 2019 |  | Weighted Average Shares Owned in Akcea |  |  | Akcea’s Net Income Per Share |  |  | Basic Net Income Per Share Calculation |
Ionis’ portion of Akcea’s net loss |  |  | 70,221 |  |  | $ | (0.34 | ) |  | $ | (23,772 | )
Akcea’s net loss attributable to our ownership |  |  |  |  |  |  |  |  |  | $ | (23,772 | )
Ionis’ stand-alone net income |  |  |  |  |  |  |  |  |  |  | 49,930 |
Net income available to Ionis common stockholders |  |  |  |  |  |  |  |  |  | $ | 26,158 |
Weighted average shares outstanding |  |  |  |  |  |  |  |  |  |  | 140,551 |
Basic net income per share |  |  |  |  |  |  |  |  |  | $ | 0.19 |
Our basic net income per share for the nine months ended September 30, 2019, was calculated as follows (in thousands, except per share amounts):
Nine months ended September 30, 2019 |  | Weighted Average Shares Owned in Akcea |  |  | Akcea’s Net Loss Per Share |  |  | Basic Net Income Per Share Calculation |
Ionis’ portion of Akcea’s net loss |  |  | 69,681 |  |  | $ | (0.40 | ) |  | $ | (28,174 | )
Akcea’s net loss attributable to our ownership |  |  |  |  |  |  |  |  |  | $ | (28,174 | )
Ionis’ stand-alone net income |  |  |  |  |  |  |  |  |  |  | 140,938 |
Net income available to Ionis common stockholders |  |  |  |  |  |  |  |  |  | $ | 112,764 |
Weighted average shares outstanding |  |  |  |  |  |  |  |  |  |  | 139,800 |
Basic net income per share |  |  |  |  |  |  |  |  |  | $ | 0.81 |
Basic and Diluted Net Income Per Share | We calculated our diluted net income per share for the three months ended September 30, 2019 as follows (in thousands except per share amounts):
Three Months Ended September 30, 2019 |  | Income (Numerator) |  |  | Shares (Denominator) |  |  | Per-Share Amount |
Net income available to Ionis common stockholders |  | $ | 26,158 |  |  |  | 140,551 |  |  | $ | 0.19 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |  |
Shares issuable upon exercise of stock options |  |  | — |  |  |  | 1,993 |  |  |  |  |
Shares issuable upon restricted stock award issuance |  |  | — |  |  |  | 844 |  |  |  |  |
Shares issuable related to our Employee Stock Purchase Plan |  |  | — |  |  |  | 20 |  |  |  |  |
Income available to Ionis common stockholders |  | $ | 26,158 |  |  |  | 143,408 |  |  | $ | 0.18 |
We calculated our diluted net income per share for the nine months ended September 30, 2019 as follows (in thousands except per share amounts):
Nine months ended September 30, 2019 |  | Income (Numerator) |  |  | Shares (Denominator) |  |  | Per-Share Amount |
Net income available to Ionis common stockholders |  | $ | 112,764 |  |  |  | 139,800 |  |  | $ | 0.81 |
Effect of dilutive securities: |  |  |  |  |  |  |  |  |  |  |  |
Shares issuable upon exercise of stock options |  |  | — |  |  |  | 2,208 |  |  |  |  |
Shares issuable upon restricted stock award issuance |  |  | — |  |  |  | 793 |  |  |  |  |
Shares issuable related to our Employee Stock Purchase Plan |  |  | — |  |  |  | 20 |  |  |  |  |
Income available to Ionis common stockholders |  | $ | 112,764 |  |  |  | 142,821 |  |  | $ | 0.79 |
Significant Accounting Policies [Abstract] |
Weighted-Average Assumptions for Stock Options | Ionis Employee Stock Options:
|  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |
Risk-free interest rate |  |  | 1.5 | % |  |  | 2.3 | %
Dividend yield |  |  | 0.0 | % |  |  | 0.0 | %
Volatility |  |  | 58.8 | % |  |  | 60.3 | %
Expected life |  | 4.7 years |  |  | 4.6 years |
Ionis Board of Director Stock Options:
|  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |
Risk-free interest rate |  |  | 0.5 | % |  |  | 1.9 | %
Dividend yield |  |  | 0.0 | % |  |  | 0.0 | %
Volatility |  |  | 57.6 | % |  |  | 60.7 | %
Expected life |  | 6.7 years |  |  | 6.6 years |
Weighted-Average Assumptions for ESPP | Ionis ESPP:
|  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |
Risk-free interest rate |  |  | 0.8 | % |  |  | 2.4 | %
Dividend yield |  |  | 0.0 | % |  |  | 0.0 | %
Volatility |  |  | 47.9 | % |  |  | 45.6 | %
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, 2020 and 2019 (in thousands). Our non-cash stock-based compensation expense included $13.8 million and $37.2 million of stock-based compensation expense for Akcea employees for the three and nine months ended September 30, 2020, respectively, compared to $(3.5) million and $29.5 million for the same periods in 2019. In the third quarter of 2019, three Akcea executive officers terminated their employment and entered into separation agreements with Akcea. As a result, in the third quarter of 2019, Akcea reversed $19.1 million of stock-based compensation expense it had previously recognized related to the executive officers’ stock options and RSUs that were no longer going to vest.
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Cost of products sold |  | $ | 315 |  |  | $ | 127 |  |  | $ | 902 |  |  | $ | 383 |
Research, development and patent |  |  | 25,359 |  |  |  | 23,744 |  |  |  | 76,931 |  |  |  | 71,935 |
Selling, general and administrative |  |  | 20,171 |  |  |  | 255 |  |  |  | 57,244 |  |  |  | 39,246 |
Total non-cash stock-based compensation expense |  | $ | 45,845 |  |  | $ | 24,126 |  |  | $ | 135,077 |  |  | $ | 111,564 |
Akcea [Member] |
Significant Accounting Policies [Abstract] |
Weighted-Average Assumptions for Stock Options | Akcea Employee Stock Options:
|  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |
Risk-free interest rate |  |  | 1.1 | % |  |  | 2.3 | %
Dividend yield |  |  | 0.0 | % |  |  | 0.0 | %
Volatility |  |  | 75.0 | % |  |  | 75.6 | %
Expected life |  | 6.1 years |  |  | 6.1 years |
Akcea Board of Directors Stock Options:
|  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |
Risk-free interest rate |  |  | 0.8 | % |  |  | 1.8 | %
Dividend yield |  |  | 0.0 | % |  |  | 0.0 | %
Volatility |  |  | 75.3 | % |  |  | 73.8 | %
Expected life |  | 5.7 years |  |  | 6.3 years |
Weighted-Average Assumptions for ESPP | Akcea ESPP:
|  | Nine Months Ended September 30, |
|  | 2020 |  |  | 2019 |
Risk-free interest rate |  |  | 1.0 | % |  |  | 2.4 | %
Dividend yield |  |  | 0.0 | % |  |  | 0.0 | %
Volatility |  |  | 71.9 | % |  |  | 60.0 | %
Expected life |  | 6 months |  |  | 6 months |

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