Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 03, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false | |
Entity File Number | 000-19125 | |
Entity Registrant Name | Ionis Pharmaceuticals, Inc. | |
Entity Central Index Key | 0000874015 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 33-0336973 | |
Entity Address, Address Line One | 2855 Gazelle Court | |
Entity Address, City or Town | Carlsbad | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92010 | |
City Area Code | 760 | |
Local Phone Number | 931-9200 | |
Title of 12(b) Security | Common Stock, $.001 Par Value | |
Trading Symbol | IONS | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 142,050,336 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 314,993 | $ 869,191 |
Short-term investments | 1,666,670 | 1,245,782 |
Contracts receivable | 6,645 | 61,896 |
Inventories | 20,645 | 24,806 |
Other current assets | 143,173 | 143,374 |
Total current assets | 2,152,126 | 2,345,049 |
Property, plant and equipment, net | 180,806 | 178,069 |
Patents, net | 29,605 | 29,005 |
Deposits and other assets | 59,434 | 59,567 |
Total assets | 2,421,971 | 2,611,690 |
Current liabilities: | ||
Accounts payable | 20,545 | 11,904 |
Accrued compensation | 30,410 | 38,810 |
Accrued liabilities | 128,002 | 88,560 |
Income taxes payable | 16 | 36 |
Current portion of long-term obligations | 4,970 | 3,526 |
Current portion of deferred contract revenue | 99,511 | 97,714 |
Total current liabilities | 283,454 | 240,550 |
Long-term deferred contract revenue | 294,656 | 351,879 |
Long-term obligations, less current portion | 25,107 | 26,378 |
Long-term mortgage debt | 58,978 | 59,713 |
Total liabilities | 1,827,610 | 1,839,953 |
Stockholders' equity: | ||
Common stock, $0.001 par value; 300,000,000 shares authorized, 142,017,411 and 141,210,015 shares issued and outstanding at September 30, 2022 (unaudited) and December 31, 2021, respectively | 142 | 141 |
Additional paid-in capital | 2,034,554 | 1,964,167 |
Accumulated other comprehensive loss | (63,140) | (32,668) |
Accumulated deficit | (1,377,195) | (1,159,903) |
Total stockholders' equity | 594,361 | 771,737 |
Total liabilities and stockholders' equity | 2,421,971 | 2,611,690 |
0 Percent Convertible Senior Notes [Member] | ||
Current liabilities: | ||
Convertible senior notes, net | 621,460 | 619,119 |
0.125 Percent Convertible Senior Notes [Member] | ||
Current liabilities: | ||
Convertible senior notes, net | $ 543,955 | $ 542,314 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
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) | 142,017,411 | 141,210,015 |
Common stock, shares outstanding (in shares) | 142,017,411 | 141,210,015 |
0 Percent Convertible Senior Notes [Member] | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Interest rate on convertible senior notes | 0% | 0% |
0.125 Percent Convertible Senior Notes [Member] | ||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Interest rate on convertible senior notes | 0.125% | 0.125% |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue: | ||||
Revenue | $ 159,767 | $ 133,093 | $ 435,478 | $ 370,450 |
Expenses: | ||||
Cost of sales | 1,515 | 3,079 | 10,430 | 8,616 |
Research, development and patent | 182,990 | 184,770 | 524,875 | 463,878 |
Selling, general and administrative | 34,416 | 31,093 | 102,345 | 148,747 |
Total operating expenses | 218,921 | 218,942 | 637,650 | 621,241 |
Loss from operations | (59,154) | (85,849) | (202,172) | (250,791) |
Other income (expense): | ||||
Investment income, net | 7,524 | 872 | 13,447 | 8,236 |
Interest expense | (2,139) | (2,340) | (6,391) | (7,111) |
Gain (loss) on investments | 2,347 | 4,013 | (10,616) | 4,885 |
Other income (expense) | 4,713 | (469) | (7,923) | (9,283) |
Loss before income tax (expense) benefit | (46,709) | (83,773) | (213,655) | (254,064) |
Income tax (expense) benefit | (283) | 1,307 | (3,637) | 854 |
Net loss | $ (46,992) | $ (82,466) | $ (217,292) | $ (253,210) |
Basic net loss per share (in dollars per share) | $ (0.33) | $ (0.58) | $ (1.53) | $ (1.8) |
Diluted net loss per share (in dollars per share) | $ (0.33) | $ (0.58) | $ (1.53) | $ (1.8) |
Shares used in computing basic net loss per share (in shares) | 141,950 | 141,139 | 141,782 | 140,958 |
Shares used in computing diluted net loss per share (in shares) | 141,950 | 141,139 | 141,782 | 140,958 |
Commercial Revenue [Member] | ||||
Revenue: | ||||
Revenue | $ 72,410 | $ 84,820 | $ 222,879 | $ 255,129 |
SPINRAZA Royalties [Member] | ||||
Revenue: | ||||
Revenue | 61,647 | 66,572 | 175,092 | 198,726 |
TEGSEDI and WAYLIVRA Revenue, Net [Member] | ||||
Revenue: | ||||
Revenue | 5,920 | 15,519 | 22,467 | 46,901 |
Licensing and Other Royalty Revenue [Member] | ||||
Revenue: | ||||
Revenue | 4,843 | 2,729 | 25,320 | 9,502 |
Research and Development Revenue [Member] | ||||
Revenue: | ||||
Revenue | 87,357 | 48,273 | 212,599 | 115,321 |
Collaborative Agreement Revenue [Member] | ||||
Revenue: | ||||
Revenue | 69,250 | 48,273 | 157,282 | 115,321 |
Eplontersen Joint Development Revenue [Member] | ||||
Revenue: | ||||
Revenue | $ 18,107 | $ 0 | $ 55,317 | $ 0 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS [Abstract] | ||||
Net loss | $ (46,992) | $ (82,466) | $ (217,292) | $ (253,210) |
Unrealized losses on debt securities, net of tax | (8,734) | (1,618) | (29,508) | (6,321) |
Currency translation adjustment | (399) | (23) | (964) | (45) |
Comprehensive loss | $ (56,125) | $ (84,107) | $ (247,764) | $ (259,576) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2020 | $ 140 | $ 1,895,519 | $ (21,071) | $ (1,131,306) | $ 743,282 |
Balance (in shares) at Dec. 31, 2020 | 140,366 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ 0 | 0 | 0 | (253,210) | (253,210) |
Change in unrealized losses, net of tax | 0 | 0 | (6,321) | 0 | (6,321) |
Foreign currency translation | 0 | 0 | (45) | 0 | (45) |
Issuance of common stock in connection with employee stock plans | $ 1 | 11,563 | 0 | 0 | 11,564 |
Issuance of common stock in connection with employee stock plans (in shares) | 1,094 | ||||
Issuance of warrants | $ 0 | 89,752 | 0 | 0 | 89,752 |
Purchase of note hedges | 0 | (136,620) | 0 | 0 | (136,620) |
Stock-based compensation expense | 0 | 98,419 | 0 | 0 | 98,419 |
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options | $ 0 | (16,285) | 0 | 0 | (16,285) |
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options (in shares) | (276) | ||||
Balance at Sep. 30, 2021 | $ 141 | 1,942,348 | (27,437) | (1,384,516) | 530,536 |
Balance (in shares) at Sep. 30, 2021 | 141,184 | ||||
Balance at Jun. 30, 2021 | $ 141 | 1,910,379 | (25,796) | (1,302,050) | 582,674 |
Balance (in shares) at Jun. 30, 2021 | 141,022 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ 0 | 0 | 0 | (82,466) | (82,466) |
Change in unrealized losses, net of tax | 0 | 0 | (1,618) | 0 | (1,618) |
Foreign currency translation | 0 | 0 | (23) | 0 | (23) |
Issuance of common stock in connection with employee stock plans | $ 0 | 1,922 | 0 | 0 | 1,922 |
Issuance of common stock in connection with employee stock plans (in shares) | 176 | ||||
Issuance of warrants | $ 0 | 0 | 0 | 0 | 0 |
Purchase of note hedges | 0 | 0 | 0 | 0 | 0 |
Stock-based compensation expense | 0 | 30,537 | 0 | 0 | 30,537 |
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options | $ 0 | (490) | 0 | 0 | (490) |
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options (in shares) | (14) | ||||
Balance at Sep. 30, 2021 | $ 141 | 1,942,348 | (27,437) | (1,384,516) | 530,536 |
Balance (in shares) at Sep. 30, 2021 | 141,184 | ||||
Balance at Dec. 31, 2021 | $ 141 | 1,964,167 | (32,668) | (1,159,903) | 771,737 |
Balance (in shares) at Dec. 31, 2021 | 141,210 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ 0 | 0 | 0 | (217,292) | (217,292) |
Change in unrealized losses, net of tax | 0 | 0 | (29,508) | 0 | (29,508) |
Foreign currency translation | 0 | 0 | (964) | 0 | (964) |
Issuance of common stock in connection with employee stock plans | $ 1 | 6,029 | 0 | 0 | 6,030 |
Issuance of common stock in connection with employee stock plans (in shares) | 1,138 | ||||
Stock-based compensation expense | $ 0 | 74,575 | 0 | 0 | 74,575 |
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options | $ 0 | (10,217) | 0 | 0 | (10,217) |
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options (in shares) | (331) | ||||
Balance at Sep. 30, 2022 | $ 142 | 2,034,554 | (63,140) | (1,377,195) | 594,361 |
Balance (in shares) at Sep. 30, 2022 | 142,017 | ||||
Balance at Jun. 30, 2022 | $ 142 | 2,008,794 | (54,007) | (1,330,203) | 624,726 |
Balance (in shares) at Jun. 30, 2022 | 141,831 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net loss | $ 0 | 0 | 0 | (46,992) | (46,992) |
Change in unrealized losses, net of tax | 0 | 0 | (8,734) | 0 | (8,734) |
Foreign currency translation | 0 | 0 | (399) | 0 | (399) |
Issuance of common stock in connection with employee stock plans | $ 0 | 2,567 | 0 | 0 | 2,567 |
Issuance of common stock in connection with employee stock plans (in shares) | 203 | ||||
Stock-based compensation expense | $ 0 | 23,837 | 0 | 0 | 23,837 |
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options | $ 0 | (644) | 0 | 0 | (644) |
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options (in shares) | (17) | ||||
Balance at Sep. 30, 2022 | $ 142 | $ 2,034,554 | $ (63,140) | $ (1,377,195) | $ 594,361 |
Balance (in shares) at Sep. 30, 2022 | 142,017 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Operating activities: | ||
Net loss | $ (217,292) | $ (253,210) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 11,301 | 11,665 |
Amortization of right-of-use operating lease assets | 1,970 | 1,171 |
Amortization of patents | 1,805 | 1,740 |
Amortization of premium on investments, net | 9,072 | 13,515 |
Amortization of debt issuance costs | 4,035 | 3,586 |
Stock-based compensation expense | 74,575 | 98,419 |
Loss (gain) on investments | 228 | (933) |
Loss on early retirement of debt | 0 | 8,627 |
Non-cash losses related to disposal of property, plant and equipment | 528 | 0 |
Non-cash losses related to patents | 1,155 | 1,150 |
Changes in operating assets and liabilities: | ||
Contracts receivable | 55,251 | 67,136 |
Inventories | 4,161 | (965) |
Other current and long-term assets | (988) | 10,358 |
Income taxes payable | (20) | 134 |
Accounts payable | 5,607 | (10,737) |
Accrued compensation | (8,400) | (33,408) |
Accrued liabilities and other current liabilities | 38,263 | (19,526) |
Deferred contract revenue | (55,426) | (71,610) |
Net cash used in operating activities | (74,175) | (172,888) |
Investing activities: | ||
Purchases of short-term investments | (1,223,791) | (930,963) |
Proceeds from sale of short-term investments | 764,101 | 1,051,857 |
Purchases of property, plant and equipment | (11,582) | (9,453) |
Acquisition of licenses and other assets, net | (3,511) | (4,459) |
Purchase of Bicycle Therapeutics plc common stock | 0 | (7,185) |
Net cash (used in) provided by investing activities | (474,783) | 99,797 |
Financing activities: | ||
Proceeds from equity, net | 6,030 | 11,564 |
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options | (10,217) | (16,285) |
Proceeds from the issuance of 0 percent convertible notes | 0 | 632,500 |
0 percent convertible senior notes issuance costs | 0 | (15,525) |
Repurchase of $247.9 million principal amount of the 1 percent convertible senior notes | 0 | (256,963) |
Proceeds from issuance of warrants | 0 | 89,752 |
Purchase of note hedges | 0 | (136,620) |
Principal payments on mortgage debt | (89) | 0 |
Net cash (used in) provided by financing activities | (4,276) | 308,423 |
Effects of exchange rates on cash | (964) | (43) |
Net (decrease) increase in cash and cash equivalents | (554,198) | 235,289 |
Cash and cash equivalents at beginning of period | 869,191 | 397,664 |
Cash and cash equivalents at end of period | 314,993 | 632,953 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 2,204 | 3,527 |
Income taxes paid | 2 | 3 |
Supplemental disclosures of non-cash investing and financing activities: | ||
Amounts accrued for capital and patent expenditures | 3,032 | 1,811 |
Right-of-use assets obtained in exchange for lease liabilities | $ 657 | $ 0 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Apr. 30, 2021 |
0 Percent Convertible Senior Notes [Member] | ||||
Financing activities: | ||||
Interest rate on convertible senior notes | 0% | 0% | 0% | |
1 Percent Convertible Senior Notes [Member] | ||||
Financing activities: | ||||
Interest rate on convertible senior notes | 1% | 1% | ||
Principal amount repurchased | $ 247.9 | $ 247.9 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | 1. Basis of Presentation We prepared the unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2022 and 2021 on the same basis as the audited financial statements for the year ended December 31, 2021. 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. Our operating results for the interim periods may not be indicative of what our operating results will be 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, 2021 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC. In our condensed consolidated financial statements, we included the accounts of Ionis Pharmaceuticals, Inc. and the consolidated results of our wholly owned subsidiary, Akcea Therapeutics, Inc. and its wholly owned subsidiaries (“we”, “us” or “our”). |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Significant Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Revenue Recognition Our Revenue Sources 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 within deferred revenue in our condensed consolidated balance sheet. At contract inception, we analyze our collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and therefore within the scope of Accounting Standards Codification, or ASC, Topic 808, Collaborative Arrangements Revenue from Contracts with Customers Commercial Revenue: SPINRAZA royalties and Licensing and other royalty revenue We earn commercial revenue primarily in the form of royalty payments on net sales of SPINRAZA. We also recognize sales milestone payments and royalties we earn under our other partnerships as commercial revenue. Commercial Revenue: TEGSEDI and WAYLIVRA revenue, net In January 2021 and April 2021, we entered into distribution agreements with Swedish Orphan Biovitrum AB, or Sobi, in which Sobi began commercializing TEGSEDI and WAYLIVRA in Europe and TEGSEDI in North America, respectively. Under our agreements, we are responsible for supplying finished goods inventory to Sobi and Sobi is responsible for selling each medicine to the end customer. As a result of these agreements, we earn a distribution fee on net sales from Sobi for each medicine. Prior to the second quarter of 2021 in North America, we sold TEGSEDI through exclusive distribution agreements with third-party logistics companies, or 3PLs, that took title to TEGSEDI. The 3PLs then distributed TEGSEDI to a specialty pharmacy and a specialty distributor, which we collectively refer to as wholesalers, who then distributed TEGSEDI to health care providers and patients. In the United States, or U.S., we had a single 3PL as our sole customer and in Canada we also had a single 3PL as our sole customer. Prior to 2021 in Europe, we sold TEGSEDI and WAYLIVRA to hospitals and pharmacies, which were our customers, using 3PLs as distributors. Under our collaboration agreement with PTC Therapeutics International Limited, or PTC, PTC is responsible for commercializing TEGSEDI and WAYLIVRA in Latin America and Caribbean countries. Under our agreement, we started receiving royalties from PTC for TEGSEDI sales in December 2021. Research and development revenue under collaborative agreements We enter into collaboration agreements to license and sell our technology on an exclusive or non-exclusive basis. Our collaboration agreements typically contain multiple elements, or performance obligations, including technology licenses or options to obtain technology licenses, research and development, or R&D, services, and manufacturing services. See Note 6, Collaborative Arrangements and Licensing Agreements , for collaborations with substantive changes that occurred in 2022. Additionally, see Collaborative Arrangements and Licensing Agreements Steps to Recognize Revenue For elements of our contractual relationships that we account for under ASC 606, we use a five-step process to determine the amount of revenue we should recognize and when we should recognize it. The five-step process is as follows: 1. Identify the contract Accounting rules require us to first determine if we have a contract with our partner, including confirming that we have met each of the following criteria: ● We and our partner approved the contract and we are both committed to perform our obligations; ● We have identified our rights, our partner’s rights and the payment terms; ● We have concluded that the contract has commercial substance, meaning that the risk, timing, or amount of our future cash flows is expected to change as a result of the contract; and ● We believe collectability of the consideration is probable. 2 . Identify the performance obligations We next identify our performance obligations, which represent the distinct goods and services we are required to provide under the contract. Often we enter into a collaboration agreement in which we provide our partner with an option to license a medicine in the future. We may also provide our partner with an option to request that we provide additional goods or services in the future, such as active pharmaceutical ingredient, or API. We evaluate whether these options are material rights at the inception of the agreement. If we determine an option is a material right, we will consider the option a separate performance obligation. Historically, we have concluded that the options we grant to license a medicine in the future or to provide additional goods and services as requested by our partner are not material rights because these items are contingent upon future events that may not occur and are not priced at a significant discount. When a partner exercises its option to license a medicine or requests additional goods or services, then we identify a new performance obligation for that item. In some cases, we deliver a license at the start of an agreement. If we determine that our partner has full use of the license and we do not have any additional material performance obligations related to the license after delivery, then we consider the license to be a separate performance obligation. 3. Determine the transaction price We then determine the transaction price by reviewing the amount of consideration we are eligible to earn under the collaboration agreement, including any variable consideration. Under our collaboration agreements, consideration typically includes fixed consideration in the form of an upfront payment and variable consideration in the form of potential milestone payments, license fees and royalties. At the start of an agreement, our transaction price usually consists of only the upfront payment. We do not typically include any payments we may receive in the future in our initial transaction price because the payments are not probable and are contingent on certain future events. We reassess the total transaction price at each reporting period to determine if we should include additional payments in the transaction price. Milestone payments are our most common type of variable consideration. We recognize milestone payments using the most likely amount method because we will either receive the milestone payment or we will not, which makes the potential milestone payment a binary event. The most likely amount method requires us to determine the likelihood of earning the milestone payment. We include a milestone payment in the transaction price once it is probable we will achieve the milestone event. Most often, we do not consider our milestone payments probable until we or our partner achieve the milestone event because the majority of our milestone payments are contingent upon events that are not within our control and/or are usually based on scientific progress which is inherently uncertain. For example, in the first quarter of 2022, we earned a $10 million milestone payment from Biogen when Biogen advanced the Phase 1/2 study for ION859, an investigational antisense medicine targeting leucine rich repeat kinase 2, or LRRK2, in patients with Parkinson’s disease. We did not consider the milestone payment probable until Biogen achieved the milestone event because advancing ION859 was contingent on Biogen advancing a Phase 1/2 study and was not within our control. We recognized the milestone payment in full in the period the milestone event was achieved because we did not have any remaining performance obligations related to the milestone payment. 4. Allocate the transaction price Next, we allocate the transaction price to each of our performance obligations. When we have to allocate the transaction price to more than one performance obligation, we make estimates of the relative stand-alone selling price of each performance obligation because we do not typically sell our goods or services on a stand-alone basis. We then allocate the transaction price to each performance obligation based on the relative stand-alone selling price. We do not reallocate the transaction price after the start of an agreement to reflect subsequent changes in stand-alone selling prices. We may engage a third party, independent valuation specialist to assist us with determining a stand-alone selling price for collaborations in which we deliver a license at the start of an agreement. We estimate the stand-alone selling price of these licenses using valuation methodologies, such as the relief from royalty method. Under this method, we estimate the amount of income, net of taxes, for the license. We then discount the projected income to present value. The significant inputs we use to determine the projected income of a license could include: ● Estimated future product sales; ● Estimated royalties we may receive from future product sales; ● Estimated contractual milestone payments we may receive; ● Estimated expenses we may incur; ● Estimated income taxes; and ● A discount rate. We typically estimate the selling price of R&D services by using our internal estimates of the cost to perform the specific services. The significant inputs we use to determine the selling price of our R&D services include: ● The estimated 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 the stand-alone selling price of the R&D services we perform and the API we will deliver, accounting guidance requires us to include a markup for a reasonable profit margin. 5. Recognize revenue We recognize revenue in one of two ways, over time or at a point in time. We recognize revenue over time when we are executing on our performance obligation over time and our partner receives benefit over time. For example, we recognize revenue over time when we provide R&D services. We recognize revenue at a point in time when our partner receives full use of an item at a specific point in time. For example, we recognize revenue at a point in time when we deliver a license or API to a partner. For R&D services that we recognize over time, we measure our progress using an input method. The input methods we use are based on the effort we expend or costs we incur toward the satisfaction of our performance obligation. We estimate the amount of effort we expend, including the time we estimate it will take us to complete the activities, or costs we incur in a given period, relative to the estimated total effort or costs to satisfy the performance obligation. This results in a percentage that we multiply by the transaction price to determine the amount of revenue we recognize each period. This approach requires us to make numerous estimates and use significant judgement. If our estimates or judgements change over the course of the collaboration, they may affect the timing and amount of revenue that we recognize in the current and future periods. The following are examples of when we typically recognize revenue based on the types of payments we receive. Commercial Revenue: SPINRAZA royalties and Licensing and other royalty revenue We recognize royalty revenue, including royalties from SPINRAZA sales, in the period in which the counterparty sells the related product and recognizes the related revenue, which in certain cases may require us to estimate our royalty revenue. Commercial Revenue: TEGSEDI and WAYLIVRA revenue, net Under our distribution agreements with Sobi we concluded that our performance obligation is to provide services to Sobi over the term of the agreement, which includes supplying finished goods inventory to Sobi. We are also responsible for maintaining the marketing authorization for TEGSEDI and WAYLIVRA in major markets and for leading the global commercial strategy for each medicine. We view this performance obligation as a series of distinct activities that are substantially the same. Therefore, we recognize as revenue the price Sobi pays us for the inventory when we deliver the finished goods inventory to Sobi. We also recognize distribution fee revenue based on Sobi’s net sales of TEGSEDI and WAYLIVRA. Under our agreements with Sobi, Sobi does not generally have a right of return. Prior to our distribution agreements with Sobi, we recognized TEGSEDI and WAYLIVRA commercial revenue in the period when our customer obtained control of our products, which occurred at a point in time upon transfer of title to the customer. We classified payments to customers or other parties in the distribution channel for services that were distinct and priced at fair value as selling, general and administrative, or SG&A, expenses in our condensed consolidated statements of operations. We classified payments to customers or other parties in the distribution channel that did not meet those criteria as a reduction of revenue, as discussed further below. We excluded from revenues taxes collected from customers relating to TEGSEDI and WAYLIVRA commercial revenue and remitted these amounts to governmental authorities. Reserves for TEGSEDI and WAYLIVRA commercial revenue Under our distribution agreements with Sobi, Sobi is responsible for any applicable reserves. Prior to our distribution agreements with Sobi, w Organization and Significant Accounting Policies Research and development revenue under collaboration agreements: Upfront payments When we enter into a collaboration agreement and receive an upfront payment, we typically record the entire upfront payment as deferred revenue if our only performance obligation is for R&D services we will provide in the future. We amortize the upfront payment into revenue as we perform the R&D services. For example, under our collaboration agreement with Roche to develop IONIS-FB-L Rx Milestone payments We are required to include additional consideration in the transaction price when it is probable. We typically include milestone payments for R&D services in the transaction price when they are achieved. We include these milestone payments when they are achieved because typically there is considerable uncertainty in the research and development processes that trigger these payments. Similarly, we include approval milestone payments in the transaction price once the medicine is approved by the applicable regulatory agency. We will recognize sales-based milestone payments in the period in which we achieve the milestone under the sales-based royalty exception allowed under accounting rules. We recognize milestone payments that relate to an ongoing performance obligation over our period of performance. For example, in the second quarter of 2022, we achieved a $20 million milestone payment from Roche when we advanced the Phase 2 study in patients with dry age-related macular degeneration, or AMD, under our collaboration agreement with Roche to develop IONIS-FB-L Rx Rx Conversely, we recognize in full those milestone payments that we earn based on our partners’ activities when our partner achieves the milestone event and we do not have a performance obligation. For example, in the third quarter of 2022, we recognized $13 million in milestone payments when Biogen advanced two targets under our neurology collaborations. We concluded that these milestone payments were not related to our R&D services performance obligations for these collaborations. Therefore, we recognized the milestone payments in full in the third quarter of 2022. License fees We generally recognize as revenue the total amount we determine to be the relative stand-alone selling price of a license when we deliver the license to our partner. This is because our partner has full use of the license and we do not have any additional performance obligations related to the license after delivery. For example, in the third quarter of 2022, we earned a $35 million license fee from Roche when Roche licensed IONIS-FB-L Rx Sublicense fees We recognize sublicense fee revenue in the period in which a party, who has already licensed our technology, further licenses the technology to another party because we do not have any performance obligations related to the sublicense. For example, in the fourth quarter of 2020, we earned a $41.2 million sublicense fee from Alnylam Pharmaceuticals for its sublicense of our technology to Sanofi Genzyme. Amendments to Agreements From time to time we amend our collaboration agreements. When this occurs, we are required to assess the following items to determine the accounting for the amendment: 1) If the additional goods and/or services are distinct from the other performance obligations in the original agreement; and 2) If the goods and/or services are sold at a stand-alone selling price. If we conclude the goods and/or services in the amendment are distinct from the performance obligations in the original agreement and at a stand-alone selling price, we account for the amendment as a separate agreement. If we conclude the goods and/or services are not distinct and are sold at a stand-alone selling price, we then assess whether the remaining goods or services are distinct from those already provided. If the goods and/or services are distinct from what we have already provided, then we allocate the remaining transaction price from the original agreement and the additional transaction price from the amendment to the remaining goods and/or services. If the goods and/or services are not distinct from what we have already provided, we update the transaction price for our single performance obligation and recognize any change in our estimated revenue as a cumulative adjustment. 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 we should account for them individually as distinct arrangements or whether the separate agreements should be combined and accounted for together. We evaluate the following to determine the accounting for the agreements: ● Whether the agreements were negotiated together with a single objective; ● Whether the amount of consideration in one contract depends on the price or performance of the other agreement; or ● Whether the goods and/or services promised under the agreements are a single performance obligation. Our evaluation involves significant judgment to determine whether a group of agreements might be so closely related that accounting guidance requires us to account for them as a combined arrangement. For example, in the second quarter of 2018, we entered into two separate agreements with Biogen at the same time: a new strategic neurology collaboration agreement and a stock purchase agreement. We evaluated the Biogen agreements to determine whether we should treat the agreements separately or combine them. We considered that the agreements were negotiated concurrently and in contemplation of one another. Based on these facts and circumstances, we concluded that we should evaluate the provisions of the agreements on a combined basis. Eplontersen Collaboration with AstraZeneca In December 2021, we entered into a joint development and commercialization agreement with AstraZeneca to develop and commercialize eplontersen for the treatment of transthyretin amyloidosis, or ATTR. We are jointly developing and preparing to commercialize eplontersen with AstraZeneca in the U.S. We granted AstraZeneca exclusive rights to commercialize eplontersen outside the U.S., except certain countries in Latin America. Under the terms of the agreement, we received a $200 million upfront payment in 2021. We evaluated our eplontersen collaboration under ASC 808 and identified four material components: (i) the license we granted to AstraZeneca in 2021, (ii) the co-development activities that we and AstraZeneca are performing, (iii) the co-commercialization activities that we and AstraZeneca are performing and (iv) the co-medical affairs activities that we and AstraZeneca are performing. We determined that we had a vendor-customer relationship within the scope of ASC 606 for the license we granted to AstraZeneca and as a result we had one performance obligation. For our sole performance obligation, we determined the transaction price was the $200 million upfront payment we received. We recognized the upfront payment in full in 2021 because we did not have any remaining performance obligations after we delivered the license to AstraZeneca. We also concluded that the co-development activities, the co-commercialization activities and the co-medical affairs activities are within the scope of ASC 808 because we and AstraZeneca are active participants exposed to the risks and benefits of the activities under the collaboration and therefore do not have a vendor-customer relationship. AstraZeneca is responsible for 55 percent of the costs associated with the ongoing global Phase 3 development program. Because we are leading the Phase 3 development program, we made an accounting policy election to recognize as non-customer revenue the cost-share funding from AstraZeneca, net of our share of AstraZeneca’s development expenses, in the same period we incur the related development expenses. As AstraZeneca is responsible for the majority of the commercial and medical affairs costs in the U.S. and all costs associated with bringing eplontersen to market outside the U.S., we made an accounting policy election to recognize cost-share funding we receive from AstraZeneca related to commercial and medical affairs activities as reductions of our SG&A expense and R&D expense, respectively. Refer to Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations Contracts Receivable Our contracts receivable balance represents the amounts we have billed our partners or customers and that are due to us unconditionally for goods we have delivered or services we have performed. When we bill our partners or customers with payment terms based on the passage of time, we consider the contracts receivable to be unconditional. We typically receive payment within one quarter of billing our partner or customer As of September 30, 2022, approximately 73.1 percent of our contracts receivables were from two significant customers. As of December 31, 2021, approximately 93.8 percent of our contracts receivables were from two significant customers. Unbilled SPINRAZA Royalties Our unbilled SPINRAZA royalties represent our right to receive consideration from Biogen in advance of when we are eligible to bill Biogen for SPINRAZA royalties. We include these unbilled amounts in other current assets on our condensed consolidated balance sheet. Deferred Revenue We are often entitled to bill our customers and receive payment from our customers in advance of our obligation to provide services or transfer goods to our partners. In these instances, we include the amounts in deferred revenue on our condensed consolidated balance sheet. During the and , we recognized $ million and $ million of revenue from amounts that were in our beginning deferred revenue balance for each respective period. Cost of Sales Our cost of sales is comprised of costs related to our commercial revenue, including manufacturing costs, transportation and freight costs and indirect overhead costs associated with the manufacturing and distribution of our products. We also may include certain period costs related to manufacturing services and inventory adjustments in cost of sales. Accrued Liabilities Our accrued liabilities consisted of the following (in thousands): September 30, 2022 December 31, 2021 Clinical development expenses $ 103,635 $ 65,730 In-licensing expenses 7,130 8,044 Commercial expenses 4,188 2,471 Other miscellaneous expenses 13,049 12,315 Total accrued liabilities $ 128,002 $ 88,560 Estimated Liability for Clinical Development Expenses We have numerous medicines in preclinical studies and/or clinical trials at clinical sites throughout the world. On at least a quarterly basis, we estimate our liability for preclinical and clinical development expenses we have incurred and services that we have received but for which we have not yet been billed and maintain an accrual to cover these expenses. These expenses primarily relate to third-party clinical management costs, laboratory and analysis costs, toxicology studies and investigator grants. We estimate our liability using assumptions about study and patient activities and the related expected expenses for those activities determined based on the contracted fees with our service providers. The assumptions we use represent our best estimates of the activity and expenses at the time of our accrual and involve inherent uncertainties and the application of our judgment. Upon settlement, these expenses may differ materially from the amounts accrued in our consolidated financial statements. Our historical accrual estimates have not been materially different from our actual amounts. Cash, Cash Equivalents and 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 debt investments as “available-for-sale” and carry them at fair market value based upon prices on the last day of the fiscal period for identical or similar items. We record unrealized gains and losses on debt securities as a separate component of comprehensive income (loss) and include net realized gains and losses in gain (loss) on investments in our condensed consolidated statement of operations. We use the specific identification method to determine the cost of securities sold. We also have equity investments of less than 20 percent ownership in publicly and privately held biotechnology companies that we received as part of a technology license or partner agreement. At September 30, 2022, we held equity investments in three publicly held companies and eight privately held companies. We are required to measure and record our equity investments at fair value and to recognize the changes in fair value in our condensed consolidated statement of operations. We account for our equity investments in publicly held companies based on observable inputs such as quoted prices in active markets for identical assets. We account for our equity investments in privately held companies at their cost minus impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. We recorded an immaterial amount of fair value adjustments related to our equity investments for the three and nine months ended September 30, 2022 and 2021. Inventory Valuation We reflect our inventory on our condensed consolidated balance sheet at the lower of cost or net realizable value under the first-in, first-out method, or FIFO. We capitalize the costs of raw materials that we purchase for use in producing our medicines because until we use these raw materials, they have alternative future uses, which we refer to as clinical raw materials. We include in inventory raw material costs for medicines 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 medicine. For example, if one of our medicines failed, we could use the raw materials for that medicine to manufacture our other medicines. We expense these costs as R&D expenses when we begin to manufacture API for a particular medicine if the medicine has not been approved for marketing by a regulatory agency. Our raw materials - commercial inventory includes API for our commercial medicines. We capitalize material, labor and overhead costs as part of our raw materials - commercial 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. Our inventory consisted of the following (in thousands): September 30, 2022 December 31, 2021 Raw materials: Raw materials- clinical $ 15,598 $ 14,507 Raw materials- commercial 1,019 4,139 Total raw materials 16,617 18,646 Work in process 3,740 5,770 Finished goods 288 390 Total inventory $ 20,645 $ 24,806 Leases We determine if an arrangement contains a lease at inception of the arrangement. As of September 30, 2022, we only had operating leases. We recognize a right-of-use operating lease asset and associated short- and long-term operating lease liability on our condensed consolidated balance sheet for operating leases greater than one year. Our right-of-use assets represent our right to use an underlying asset for the lease term and our lease liabilities represent our obligation to make lease payments arising from the lease arrangement. We recognize our right-of-use operating lease assets and lease liabilities based on the present value of the future minimum lease payments we will pay over the lease term. We determine the lease term at the inception of each lease, and in certain cases our lease term could include renewal options if we concluded we were reasonably certain that we will exercise the renewal option. When we exercise a lease option that was not previously included in the initial lease term, we reassess our right-of-use asset and lease liabilities for the new lease term. As our leases do not provide an interest rate implicit in the lease, we use our incremental borrowing rate, based on the information available as of the lease inception date or at the lease option extension date in determining the present value of future payments. We recognize rent expense for our minimum lease payments on a straight-line basis over the expected term of our lease. We recognize period expenses, such as common area maintenance expenses, in the period we incur the expense. In January 2022, we entered into a sublease agreement for our office space located in Boston, Massachusetts. The sublease commenced in January 2022 when the office space was ready for our tenant’s occupancy. We are subleasing this space under a non-cancelable operating sublease with a sublease term ending in November 2028 with no option to extend the sublease. Under the sublease agreement we provided a seven-month free rent period, which commenced in January 2022. We will receive lease payments over the sublease term totaling $9.6 million. We are recognizing sublease payments as other income on a straight-line, gross basis over the term of our sublease. In October 2022, we entered into a build-to-suit lease agreement to lease a development chemistry and manufacturing facility in Oceanside, California. The lessor will develop and construct a building composed of manufacturing space, office space, research and development space and warehouse space. We will design and construct tenant improvements to customize the facility’s interior space. We will lease the facility for an initial term of 20 years and 3 months In October 2022, we concurrently entered into two purchase and sale agreements with a real estate investor. Under the agreements, we sold and leased back the facilities at our headquarters location in Carlsbad, California and will sell, subject to meeting certain closing conditions, two lots of undeveloped land adjacent to our headquarters. We sold the facilities at our headquarters for a total purchase price of $263.4 million and we expect to receive total proceeds of $33.0 million upon the close of the sale of the two lots. We used a portion of the sale proceeds to extinguish our mortgage debt on our headquarters facilities of $51.3 million. The initial lease term for o |
Investments
Investments | 9 Months Ended |
Sep. 30, 2022 | |
Investments [Abstract] | |
Investments | 3. Investments The following table summarizes the contract maturity of the available-for-sale securities we held as of September 30, 2022: One year 66 % After one year two years 31 % After two years three and a half years 3 % Total 100 % As illustrated above, at September 30, 2022, 97 percent of our available-for-sale securities had a maturity of less than two years. All of our available-for-sale debt 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. This reflects our intention to use the proceeds from the sale of these investments to fund our operations, as necessary. We invest in available-for-sale securities At September 30, 2022, we had an equity ownership interest of less than 20 percent in eight private companies and three public companies with which we conduct business. The following is a summary of our investments (in thousands): Amortized Gross Unrealized Estimated September 30, 2022 Cost Gains Losses Fair Value Available-for-sale securities: Corporate debt securities (1) $ 487,666 $ 1 $ (5,327 ) $ 482,340 Debt securities issued by U.S. government agencies 104,987 12 (1,686 ) 103,313 Debt securities issued by the U.S. Treasury (1) 462,475 22 (3,761 ) 458,736 Debt securities issued by states of the U.S. and political subdivisions of the states 72,059 — (797 ) 71,262 Other municipal debt securities 6,040 — (76 ) 5,964 Total securities with a maturity of one year or less 1,133,227 35 (11,647 ) 1,121,615 Corporate debt securities 258,362 6 (12,654 ) 245,714 Debt securities issued by U.S. government agencies 28,987 8 (1,541 ) 27,454 Debt securities issued by the U.S. Treasury 298,431 13 (6,247 ) 292,197 Debt securities issued by states of the U.S. and political subdivisions of the states 14,591 2 (540 ) 14,053 Total securities with a maturity of more than one year 600,371 29 (20,982 ) 579,418 Total available-for-sale securities $ 1,733,598 $ 64 $ (32,629 ) $ 1,701,033 Equity securities: Publicly traded equity securities included in other current assets (2) $ 15,097 $ — $ (7,841 ) $ 7,256 Privately held equity securities included in deposits and other assets (3) 23,115 17,257 — 40,372 Total equity securities 38,212 17,257 (7,841 ) 47,628 Total available-for-sale and equity securities $ 1,771,810 $ 17,321 $ (40,470 ) $ 1,748,661 Amortized Gross Unrealized Estimated December 31, 2021 Cost Gains Losses Fair Value Available-for-sale securities: Corporate debt securities (1) $ 383,870 $ 728 $ (226 ) $ 384,372 Debt securities issued by U.S. government agencies 48,493 19 (18 ) 48,494 Debt securities issued by the U.S. Treasury (1) 45,424 — (64 ) 45,360 Debt securities issued by states of the U.S. and political subdivisions of the states 134,770 45 (37 ) 134,778 Total securities with a maturity of one year or less 612,557 792 (345 ) 613,004 Corporate debt securities 382,000 331 (2,644 ) 379,687 Debt securities issued by U.S. government agencies 72,935 — (561 ) 72,374 Debt securities issued by the U.S. Treasury 137,635 139 (500 ) 137,274 Debt securities issued by states of the U.S. and political subdivisions of the states 39,909 1 (224 ) 39,686 Other municipal debt securities 6,136 — (37 ) 6,099 Total securities with a maturity of more than one year 638,615 471 (3,966 ) 635,120 Total available-for-sale securities $ 1,251,172 $ 1,263 $ (4,311 ) $ 1,248,124 Equity securities: Publicly traded equity securities included in other current assets (2) $ 11,897 $ 7,145 $ (837 ) $ 18,205 Privately held equity securities included in deposits and other assets (3) 15,615 16,707 — 32,322 Total equity securities 27,512 23,852 (837 ) 50,527 Total available-for-sale and equity securities $ 1,278,684 $ 25,115 $ (5,148 ) $ 1,298,651 (1) Includes investments classified as cash equivalents in our condensed consolidated balance sheet. (2) Our equity securities included in other current assets consisted of our investments in publicly traded companies. We recognize publicly traded equity securities at fair value. In the nine months ended September 30, 2022, we recognized a $10.9 million unrealized non-cash loss in our condensed consolidated statement of operations related to a decrease in the fair value of our investments in publicly traded companies. (3) Our equity securities included in deposits and other assets consisted of our investments in privately held companies. We recognize our private company equity securities at . The following is a summary of our investments we consider to be temporarily impaired at September 30, 2022 (in thousands, except for number of investments). 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 397 $ 591,245 $ (10,897 ) $ 133,763 $ (7,084 ) $ 725,008 $ (17,981 ) Debt securities issued by U.S. government agencies 31 69,640 (875 ) 53,299 (2,352 ) 122,939 (3,227 ) Debt securities issued by the U.S. Treasury 74 643,231 (8,327 ) 52,767 (1,681 ) 695,998 (10,008 ) Debt securities issued by states of the U.S. and political subdivisions of the states 140 40,160 (658 ) 21,769 (679 ) 61,929 (1,337 ) Other municipal debt securities 2 994 (12 ) 4,970 (64 ) 5,964 (76 ) Total temporarily impaired securities 644 $ 1,345,270 $ (20,769 ) $ 266,568 $ (11,860 ) $ 1,611,838 $ (32,629 ) 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 rather than underlying credit deterioration for any of the issuers. We believe it is more likely than not that we will be able to hold our debt securities with declines in value to maturity. Therefore, we anticipate full recovery of our debt securities’ amortized cost basis at maturity. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
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, which includes our investments in equity securities in privately held biotechnology companies. We classify most 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. The following tables present the major security types we held at September 30, 2022 and December 31, 2021 that we regularly measure and carry at fair value. As of December 31, 2021, one of our investments in publicly held biotechnology companies was subject to trading restrictions that ended in the third quarter of 2022; as a result, we included a lack of marketability discount in valuing this investment, which is a Level 3 input. At September 30, 2022 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents (1) $ 231,960 $ 231,960 $ — $ — Corporate debt securities (2) 728,054 — 728,054 — Debt securities issued by U.S. government agencies (2) 130,767 — 130,767 — Debt securities issued by the U.S. Treasury (3) 750,933 750,933 — — Debt securities issued by states of the U.S. and political subdivisions of the states (4) 85,315 — 85,315 — Other municipal debt securities (3) 5,964 — 5,964 — Publicly traded equity securities included in other current assets 7,256 7,256 — — Total $ 1,940,249 $ 990,149 $ 950,100 $ — At December 31, 2021 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents (1) $ 541,199 $ 541,199 $ — $ — Corporate debt securities (3) 764,059 — 764,059 — Debt securities issued by U.S. government agencies (3) 120,868 — 120,868 — Debt securities issued by the U.S. Treasury (3) 182,634 182,634 — — Debt securities issued by states of the U.S. and political subdivisions of the states (5) 174,464 — 174,464 — Other municipal debt securities (3) 6,099 — 6,099 — Publicly traded equity securities included in other current assets 18,205 3,875 — 14,330 Total $ 1,807,528 $ 727,708 $ 1,065,490 $ 14,330 The following footnotes reference lines in our condensed consolidated balance sheet: (1) Included in cash and cash equivalents in our condensed consolidated balance sheet. (2) $23.5 million was included in cash and cash equivalents in our condensed consolidated balance sheet, with the difference included in short-term investments in our condensed consolidated balance sheet. (3) Included in short-term investments. (4) $10.0 million was included in cash and cash equivalents in our condensed consolidated balance sheet, with the difference included in short-term investments in our condensed consolidated balance sheet. (5) $2.3 million was included in cash and cash equivalents in our condensed consolidated balance sheet, with the difference included in short-term investments in our condensed consolidated balance sheet. Convertible Notes Our 0.125% Notes and 0% Notes had a fair value of $498.7 million and $631.8 million at September 30, 2022, respectively. 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. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2022 | |
Income Taxes [Abstract] | |
Income Taxes | 5. Income Taxes Beginning in 2022, the Tax Cuts and Jobs Act of 2017, or TCJA, requires taxpayers to amortize research and development expenditures over five years pursuant to Internal Revenue Code, or IRC, Section 174. Although the U.S. Congress is considering legislation that would defer the amortization requirement to later years, we have no assurance that the provision will be repealed or otherwise modified. Since we expect taxable income in 2022, we recorded income tax expense of $0.3 million and $3.6 million for the three months and nine months ended September 30, 2022, respectively, compared to income tax benefit of $1.3 million and $0.9 million for the same periods in 2021. |
Collaborative Arrangements and
Collaborative Arrangements and Licensing Agreements | 9 Months Ended |
Sep. 30, 2022 | |
Collaborative Arrangements and Licensing Agreements [Abstract] | |
Collaborative Arrangements and Licensing Agreements | 6. Collaborative Arrangements and Licensing Agreements Below, we have included our Biogen, Roche and Bayer collaborations, which are our only collaborations with substantive changes during 2022 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, 2021 . 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. We and Biogen are currently developing numerous investigational medicines to treat neurodegenerative diseases under these collaborations, including medicines in development to treat people with ALS, SMA, Angelman Syndrome, Alzheimer’s disease During the three and nine months ended September 30, 2022 and 2021, we earned the following revenue from our relationship with Biogen (in millions, except percentage amounts): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 SPINRAZA royalties (commercial revenue) $ 61.6 $ 66.6 $ 175.1 $ 198.7 R&D revenue 27.4 17.4 84.6 63.4 Total revenue from our relationship with Biogen $ 89.0 $ 84.0 $ 259.7 $ 262.1 Percentage of total revenue 56 % 63 % 60 % 71 % Our condensed consolidated balance sheet at September 30, 2022 and December 31, 2021 In the third quarter of 2022, we earned $13 million in milestone payments from Biogen when Biogen advanced two targets under our neurology collaborations. We recognized one of these milestone payments in full in the third quarter of 2022 because we did not have any remaining performance obligations related to the milestone payment. We added the other payment to the transaction price and allocated it to our R&D services performance obligation for the 2012 neurology collaboration. We are recognizing revenue for our R&D services performance obligation over our estimated period of performance. We will achieve the next payment of up to $10 million if Biogen advances another medicine under our 2013 strategic neurology collaboration. Roche We have two collaborations with Roche, one to develop IONIS-FB-L Rx develop In October 2018, we entered into a collaboration agreement with Roche to develop IONIS-FB-L Rx . We are currently conducting Phase 2 studies in disease indications for IONIS-FB-L Rx , for the treatment of patients with geographic atrophy, or GA, the advanced stage of dry AMD, and a second for the treatment of patients with immunoglobulin A nephropathy, or IgAN. After positive data from a Phase 2 clinical study, Roche licensed IONIS-FB-L Rx in July 2022 for $ million and IONIS-FB-L Rx . As a result, Roche is responsible for global development, regulatory and commercialization activities and costs for the Phase 3 IgAN study of IONIS-FB-L Rx . We will continue to lead and conduct the open label Phase 2 study in patients with IgAN and the Phase 2 study in patients with GA IONIS-FB-L Rx Under the collaboration agreement with Roche to develop treatments for HD, we discovered and developed tominersen, an investigational medicine targeting huntingtin, or HTT, protein, through completion of our Phase 1/2 clinical study in people with early stage HD. In the fourth quarter of 2017, upon completion of the Phase 1/2 study, Roche exercised its option to license tominersen. Roche is responsible for all global development, regulatory and commercialization activities and costs for tominersen. In March 2021, Roche decided to discontinue dosing in the Phase 3 GENERATION HD1 study of tominersen in patients with manifest HD based on the results of a pre-planned review of data from the Phase 3 study conducted by an unblinded iDMC. In January 2022, Roche announced it is actively preparing to initiate a new Phase 2 study of tominersen in patients with HD. Post-hoc analyses from the GENERATION HD1 study suggested tominersen may benefit younger adult patients with lower disease burden. From inception through September 30, 2022, we have received $283 million from our Roche collaborations. During the three and nine months ended September 30, 2022 and 2021, we earned the following revenue from our relationship with Roche (in millions, except percentage amounts): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 R&D revenue $ 41.5 $ 3.9 $ 65.4 $ 11.4 Percentage of total revenue 26 % 3 % 15 % 3 % Our condensed consolidated balance sheet at September 30, 2022 and December 31, 2021 included deferred revenue of $23.6 million and $31.6 million, respectively, related to our relationship with Roche. As discussed above, in the third quarter of 2022, we earned a $35 million payment from Roche when Roche licensed IONIS-FB-L Rx Rx Bayer In May 2015, we entered into an exclusive license agreement with Bayer to develop and commercialize IONIS-FXI Rx Rx |
Convertible Debt
Convertible Debt | 9 Months Ended |
Sep. 30, 2022 | |
Convertible Debt [Abstract] | |
Convertible Debt | 7. Convertible Debt 0 Percent Convertible Senior Notes and Call Spread In April 2021, we completed a $632.5 million offering of convertible senior notes. We used a portion of the net proceeds from the issuance of the 0% Notes to repurchase $247.9 million in principal of our 1% Notes for $257.0 million. At September 30, 2022, we had the following 0% 0% Outstanding principal balance $ 632.5 Unamortized debt issuance costs $ 11.0 Maturity date April 2026 Interest rate 0 percent Effective interest rate 0.5 percent Conversion price per share $ 57.84 Effective conversion price per share with call spread $ 76.39 Total shares of common stock subject to conversion 10.9 In conjunction with the April 2021 offering, we entered into a call spread transaction, which was comprised of purchasing note hedges and selling warrants, to minimize the impact of potential economic dilution upon conversion of our 0% Notes by increasing the effective conversion price on our 0% Notes. We increased our effective conversion price to $76.39 with the same number of underlying shares as our 0% Notes. The call spread cost us $46.9 million, of which $136.7 million was for the note hedge purchase, offset by $89.8 million we received for selling the warrants. Similar to our 0% Notes, our note hedges are subject to adjustment. Additionally, our note hedges are exercisable upon conversion of the 0% Notes. The note hedges will expire upon maturity of the 0% Notes, or April 2026. The note hedges and warrants are separate transactions and are not part of the terms of our 0% Notes. The holders of the 0% Notes do not have any rights with respect to the note hedges and warrants. We recorded the amount we paid for the note hedges and the amount we received for the warrants in additional paid-in capital in our condensed consolidated balance sheet. See our Call Spread accounting policy in Note 2, Significant Accounting Policies 0.125 Percent Convertible Senior Notes and Call Spread At September 30, 2022, we had the following 0.125% Notes outstanding with interest payable semi-annually (amounts in millions except interest rate and price per share data): 0.125% Notes Outstanding principal balance $ 548.8 Unamortized debt issuance costs $ 4.9 Maturity date December 2024 Interest rate 0.125 percent Effective interest rate 0.5 percent Conversion price per share $ 83.28 Effective conversion price per share with call spread $ 123.38 Total shares of common stock subject to conversion 6.6 In conjunction with the issuance of our Notes in December 2019, we entered into a call spread transaction, which was comprised of purchasing note hedges and selling warrants, to minimize the impact of potential economic dilution upon conversion of our . We increased our effective conversion price to $ with the same number of underlying shares as our Notes. The call spread cost us $ million, of which $ million was for the note hedge purchase, offset by $ million we received for selling the warrants. Similar to our , our note hedges are subject to adjustment. Additionally, our note hedges are exercisable upon conversion of the . The note hedges will expire upon maturity of the , or December 2024. The note hedges and warrants are separate transactions and are not part of the terms of our . The holders of the do not have any rights with respect to the note hedges and warrants. We recorded the amount we paid for the note hedges and the amount we received for the warrants in additional paid-in capital in our condensed consolidated balance sheet. See our Call Spread accounting policy in Note 2, Significant Accounting Policies 1 Percent Convertible Senior Notes In April 2021, we repurchased $247.9 million in aggregate principal amount of our 1% Notes in privately negotiated transactions. As a result of the repurchase, we recognized an $8.6 million loss on early retirement of debt in the second quarter of 2021, reflecting the early retirement of a significant portion of our 1% Notes. The loss on the early retirement of our debt is the difference between the amount paid to retire our 1% Notes and the net carrying balance of the liability at the time that we retired the debt. We paid the remaining principal balance of our 1% Notes with $62.0 million of cash at maturity in November 2021. Other Terms of Convertible Senior Notes The and Notes are convertible under certain conditions, at the option of the note holders. We can settle conversions of the notes, at our election, in cash, shares of our common stock or a combination of both. We may not redeem the notes prior to maturity, and we do not have to provide a sinking fund for them. Holders of the notes may require us to purchase some or all of their notes upon the occurrence of certain fundamental changes, as set forth in the indentures governing the notes, at a purchase price equal to of the principal amount of the notes to be purchased, plus any accrued and unpaid interest. |
Legal Proceedings
Legal Proceedings | 9 Months Ended |
Sep. 30, 2022 | |
Legal Proceedings [Abstract] | |
Legal Proceedings | 8. Legal Proceedings From time to time, we are involved in legal proceedings arising in the ordinary course of our business. Periodically, we evaluate the status of each legal matter and assess our potential financial exposure. If we consider the potential loss from any legal proceeding to be probable and we can reasonably estimate the amount, we accrue a liability for the estimated loss. The outcome of any proceeding is not determinable in advance. Therefore, we are required to use significant judgment to determine the probability of a loss and whether the amount of the loss is reasonably estimable. Our assessment of a potential liability and the amount of accruals we recorded are based only on the information available to us at the time. As additional information becomes available, we reassess the potential liability related to the legal proceeding and may revise our estimates. On purported former stockholders of Akcea filed an action in the Delaware Court of Chancery captioned John Makris, et al. v. Ionis Pharmaceuticals, Inc., et al., C.A. . , or the Delaware Action. The plaintiffs in the Delaware Action asserted claims against (i) former members of Akcea’s board of directors; and (ii) Ionis, or collectively, the Defendants. The plaintiffs asserted putatively direct claims on behalf of a purported class of former Akcea stockholders. The plaintiffs in the Delaware Action asserted that the Defendants breached their fiduciary duties in connection with the take-private transaction that Ionis and Akcea entered into, in which Akcea became a wholly-owned subsidiary of Ionis. We believe this lawsuit is without merit. However, the outcome of this lawsuit or any other lawsuit that may be filed challenging the take-private transaction is uncertain. Accordingly, on , the parties reached an agreement in principle to settle the Delaware Action for $ million. A Stipulation and Agreement of Compromise, Settlement and Release, or the Stipulation and Settlement Agreement reflecting the terms of the proposed settlement was executed and filed with the Delaware Court of Chancery on . On , the Delaware Court of Chancery entered an Order and Final Judgment, or the Order, approving the Stipulation and Settlement Agreement in full after determining that the Stipulation and Settlement Agreement was fair, reasonable, and adequate. The Order provides for the full settlement, satisfaction, compromise and release of all claims that were asserted in the Delaware Action. The Order contains admission of wrongdoing on the part of any of the Defendants. We recorded a legal reserve of $ million and the corresponding litigation settlement expense within other expense in the accompanying condensed consolidated statements of operations in the quarter of for the proposed litigation settlement. In , we received insurance contributions toward the settlement in the amount of $ million from our insurance carriers. We recorded the insurance contributions as a reduction to the litigation settlement expense in the quarter of . On , a purported stockholder of Ionis filed a stockholder derivative complaint in the Delaware Court of Chancery captioned Leo Shumacher, et al. v. Joseph Loscalzo, et al., C.A. . , or the Shumacher Action. The complaint names Ionis' board of directors, or the Board, as defendants and names Ionis as a nominal defendant. The Shumacher Action Plaintiff asserts a breach of fiduciary duty claim against the Board for awarding and receiving allegedly excessive compensation. The Shumacher Action Plaintiff also asserts an unjust enrichment claim against the non-executive directors as a result of the compensation they received. The complaint seeks, among other things, damages, restitution, attorneys’ fees and costs, and such other relief as deemed just and proper by the court. On , we and the Board moved to dismiss the complaint. On , the parties entered into a Stipulation and Agreement of Compromise, Settlement and Release. On , another purported stockholder of Ionis filed a stockholder derivative complaint also in the Delaware Court of Chancery captioned Robert S. Cohen, et al. v. Joseph Loscalzo, et al., C.A. . , or the Cohen Action. The complaint names the Board as defendants and names Ionis as a nominal defendant. The Cohen Action Plaintiff asserts claims for breach of fiduciary duty, unjust enrichment, aiding and abetting breaches of fiduciary duty, and waste against the Board for awarding and receiving allegedly excessive non-executive director compensation for the years , and . On , the Cohen Action Plaintiff filed a motion to consolidate the related Cohen Action and Shumacher Action. On , the Court denied the motion to consolidate in favor of the settlement pending in the Shumacher Action. On July 18, 2022, we filed a Form 8-K disclosing the pending settlement and attaching the Notice of Pendency of Settlement of Action. On September 21, 2022, the Court held a hearing to consider whether the terms of the settlement should be approved, at which hearing the Cohen Action plaintiff objected to the settlement. At the conclusion of the hearing, the Court declined to approve the settlement and directed the parties to meet and confer on the issue of the scope of the release. We and our Board have denied, and continue to deny, any and all allegations of wrongdoing or liability asserted in the Shumacher and Cohen Actions. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | We prepared the unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2022 and 2021 on the same basis as the audited financial statements for the year ended December 31, 2021. 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. Our operating results for the interim periods may not be indicative of what our operating results will be 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, 2021 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC. |
Consolidation | In our condensed consolidated financial statements, we included the accounts of Ionis Pharmaceuticals, Inc. and the consolidated results of our wholly owned subsidiary, Akcea Therapeutics, Inc. and its wholly owned subsidiaries (“we”, “us” or “our”). |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Significant Accounting Policies [Abstract] | |
Revenue Recognition | Revenue Recognition Our Revenue Sources 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 within deferred revenue in our condensed consolidated balance sheet. At contract inception, we analyze our collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and therefore within the scope of Accounting Standards Codification, or ASC, Topic 808, Collaborative Arrangements Revenue from Contracts with Customers Commercial Revenue: SPINRAZA royalties and Licensing and other royalty revenue We earn commercial revenue primarily in the form of royalty payments on net sales of SPINRAZA. We also recognize sales milestone payments and royalties we earn under our other partnerships as commercial revenue. Commercial Revenue: TEGSEDI and WAYLIVRA revenue, net In January 2021 and April 2021, we entered into distribution agreements with Swedish Orphan Biovitrum AB, or Sobi, in which Sobi began commercializing TEGSEDI and WAYLIVRA in Europe and TEGSEDI in North America, respectively. Under our agreements, we are responsible for supplying finished goods inventory to Sobi and Sobi is responsible for selling each medicine to the end customer. As a result of these agreements, we earn a distribution fee on net sales from Sobi for each medicine. Prior to the second quarter of 2021 in North America, we sold TEGSEDI through exclusive distribution agreements with third-party logistics companies, or 3PLs, that took title to TEGSEDI. The 3PLs then distributed TEGSEDI to a specialty pharmacy and a specialty distributor, which we collectively refer to as wholesalers, who then distributed TEGSEDI to health care providers and patients. In the United States, or U.S., we had a single 3PL as our sole customer and in Canada we also had a single 3PL as our sole customer. Prior to 2021 in Europe, we sold TEGSEDI and WAYLIVRA to hospitals and pharmacies, which were our customers, using 3PLs as distributors. Under our collaboration agreement with PTC Therapeutics International Limited, or PTC, PTC is responsible for commercializing TEGSEDI and WAYLIVRA in Latin America and Caribbean countries. Under our agreement, we started receiving royalties from PTC for TEGSEDI sales in December 2021. Research and development revenue under collaborative agreements We enter into collaboration agreements to license and sell our technology on an exclusive or non-exclusive basis. Our collaboration agreements typically contain multiple elements, or performance obligations, including technology licenses or options to obtain technology licenses, research and development, or R&D, services, and manufacturing services. See Note 6, Collaborative Arrangements and Licensing Agreements , for collaborations with substantive changes that occurred in 2022. Additionally, see Collaborative Arrangements and Licensing Agreements Steps to Recognize Revenue For elements of our contractual relationships that we account for under ASC 606, we use a five-step process to determine the amount of revenue we should recognize and when we should recognize it. The five-step process is as follows: 1. Identify the contract Accounting rules require us to first determine if we have a contract with our partner, including confirming that we have met each of the following criteria: ● We and our partner approved the contract and we are both committed to perform our obligations; ● We have identified our rights, our partner’s rights and the payment terms; ● We have concluded that the contract has commercial substance, meaning that the risk, timing, or amount of our future cash flows is expected to change as a result of the contract; and ● We believe collectability of the consideration is probable. 2 . Identify the performance obligations We next identify our performance obligations, which represent the distinct goods and services we are required to provide under the contract. Often we enter into a collaboration agreement in which we provide our partner with an option to license a medicine in the future. We may also provide our partner with an option to request that we provide additional goods or services in the future, such as active pharmaceutical ingredient, or API. We evaluate whether these options are material rights at the inception of the agreement. If we determine an option is a material right, we will consider the option a separate performance obligation. Historically, we have concluded that the options we grant to license a medicine in the future or to provide additional goods and services as requested by our partner are not material rights because these items are contingent upon future events that may not occur and are not priced at a significant discount. When a partner exercises its option to license a medicine or requests additional goods or services, then we identify a new performance obligation for that item. In some cases, we deliver a license at the start of an agreement. If we determine that our partner has full use of the license and we do not have any additional material performance obligations related to the license after delivery, then we consider the license to be a separate performance obligation. 3. Determine the transaction price We then determine the transaction price by reviewing the amount of consideration we are eligible to earn under the collaboration agreement, including any variable consideration. Under our collaboration agreements, consideration typically includes fixed consideration in the form of an upfront payment and variable consideration in the form of potential milestone payments, license fees and royalties. At the start of an agreement, our transaction price usually consists of only the upfront payment. We do not typically include any payments we may receive in the future in our initial transaction price because the payments are not probable and are contingent on certain future events. We reassess the total transaction price at each reporting period to determine if we should include additional payments in the transaction price. Milestone payments are our most common type of variable consideration. We recognize milestone payments using the most likely amount method because we will either receive the milestone payment or we will not, which makes the potential milestone payment a binary event. The most likely amount method requires us to determine the likelihood of earning the milestone payment. We include a milestone payment in the transaction price once it is probable we will achieve the milestone event. Most often, we do not consider our milestone payments probable until we or our partner achieve the milestone event because the majority of our milestone payments are contingent upon events that are not within our control and/or are usually based on scientific progress which is inherently uncertain. For example, in the first quarter of 2022, we earned a $10 million milestone payment from Biogen when Biogen advanced the Phase 1/2 study for ION859, an investigational antisense medicine targeting leucine rich repeat kinase 2, or LRRK2, in patients with Parkinson’s disease. We did not consider the milestone payment probable until Biogen achieved the milestone event because advancing ION859 was contingent on Biogen advancing a Phase 1/2 study and was not within our control. We recognized the milestone payment in full in the period the milestone event was achieved because we did not have any remaining performance obligations related to the milestone payment. 4. Allocate the transaction price Next, we allocate the transaction price to each of our performance obligations. When we have to allocate the transaction price to more than one performance obligation, we make estimates of the relative stand-alone selling price of each performance obligation because we do not typically sell our goods or services on a stand-alone basis. We then allocate the transaction price to each performance obligation based on the relative stand-alone selling price. We do not reallocate the transaction price after the start of an agreement to reflect subsequent changes in stand-alone selling prices. We may engage a third party, independent valuation specialist to assist us with determining a stand-alone selling price for collaborations in which we deliver a license at the start of an agreement. We estimate the stand-alone selling price of these licenses using valuation methodologies, such as the relief from royalty method. Under this method, we estimate the amount of income, net of taxes, for the license. We then discount the projected income to present value. The significant inputs we use to determine the projected income of a license could include: ● Estimated future product sales; ● Estimated royalties we may receive from future product sales; ● Estimated contractual milestone payments we may receive; ● Estimated expenses we may incur; ● Estimated income taxes; and ● A discount rate. We typically estimate the selling price of R&D services by using our internal estimates of the cost to perform the specific services. The significant inputs we use to determine the selling price of our R&D services include: ● The estimated 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 the stand-alone selling price of the R&D services we perform and the API we will deliver, accounting guidance requires us to include a markup for a reasonable profit margin. 5. Recognize revenue We recognize revenue in one of two ways, over time or at a point in time. We recognize revenue over time when we are executing on our performance obligation over time and our partner receives benefit over time. For example, we recognize revenue over time when we provide R&D services. We recognize revenue at a point in time when our partner receives full use of an item at a specific point in time. For example, we recognize revenue at a point in time when we deliver a license or API to a partner. For R&D services that we recognize over time, we measure our progress using an input method. The input methods we use are based on the effort we expend or costs we incur toward the satisfaction of our performance obligation. We estimate the amount of effort we expend, including the time we estimate it will take us to complete the activities, or costs we incur in a given period, relative to the estimated total effort or costs to satisfy the performance obligation. This results in a percentage that we multiply by the transaction price to determine the amount of revenue we recognize each period. This approach requires us to make numerous estimates and use significant judgement. If our estimates or judgements change over the course of the collaboration, they may affect the timing and amount of revenue that we recognize in the current and future periods. The following are examples of when we typically recognize revenue based on the types of payments we receive. Commercial Revenue: SPINRAZA royalties and Licensing and other royalty revenue We recognize royalty revenue, including royalties from SPINRAZA sales, in the period in which the counterparty sells the related product and recognizes the related revenue, which in certain cases may require us to estimate our royalty revenue. Commercial Revenue: TEGSEDI and WAYLIVRA revenue, net Under our distribution agreements with Sobi we concluded that our performance obligation is to provide services to Sobi over the term of the agreement, which includes supplying finished goods inventory to Sobi. We are also responsible for maintaining the marketing authorization for TEGSEDI and WAYLIVRA in major markets and for leading the global commercial strategy for each medicine. We view this performance obligation as a series of distinct activities that are substantially the same. Therefore, we recognize as revenue the price Sobi pays us for the inventory when we deliver the finished goods inventory to Sobi. We also recognize distribution fee revenue based on Sobi’s net sales of TEGSEDI and WAYLIVRA. Under our agreements with Sobi, Sobi does not generally have a right of return. Prior to our distribution agreements with Sobi, we recognized TEGSEDI and WAYLIVRA commercial revenue in the period when our customer obtained control of our products, which occurred at a point in time upon transfer of title to the customer. We classified payments to customers or other parties in the distribution channel for services that were distinct and priced at fair value as selling, general and administrative, or SG&A, expenses in our condensed consolidated statements of operations. We classified payments to customers or other parties in the distribution channel that did not meet those criteria as a reduction of revenue, as discussed further below. We excluded from revenues taxes collected from customers relating to TEGSEDI and WAYLIVRA commercial revenue and remitted these amounts to governmental authorities. Reserves for TEGSEDI and WAYLIVRA commercial revenue Under our distribution agreements with Sobi, Sobi is responsible for any applicable reserves. Prior to our distribution agreements with Sobi, w Organization and Significant Accounting Policies Research and development revenue under collaboration agreements: Upfront payments When we enter into a collaboration agreement and receive an upfront payment, we typically record the entire upfront payment as deferred revenue if our only performance obligation is for R&D services we will provide in the future. We amortize the upfront payment into revenue as we perform the R&D services. For example, under our collaboration agreement with Roche to develop IONIS-FB-L Rx Milestone payments We are required to include additional consideration in the transaction price when it is probable. We typically include milestone payments for R&D services in the transaction price when they are achieved. We include these milestone payments when they are achieved because typically there is considerable uncertainty in the research and development processes that trigger these payments. Similarly, we include approval milestone payments in the transaction price once the medicine is approved by the applicable regulatory agency. We will recognize sales-based milestone payments in the period in which we achieve the milestone under the sales-based royalty exception allowed under accounting rules. We recognize milestone payments that relate to an ongoing performance obligation over our period of performance. For example, in the second quarter of 2022, we achieved a $20 million milestone payment from Roche when we advanced the Phase 2 study in patients with dry age-related macular degeneration, or AMD, under our collaboration agreement with Roche to develop IONIS-FB-L Rx Rx Conversely, we recognize in full those milestone payments that we earn based on our partners’ activities when our partner achieves the milestone event and we do not have a performance obligation. For example, in the third quarter of 2022, we recognized $13 million in milestone payments when Biogen advanced two targets under our neurology collaborations. We concluded that these milestone payments were not related to our R&D services performance obligations for these collaborations. Therefore, we recognized the milestone payments in full in the third quarter of 2022. License fees We generally recognize as revenue the total amount we determine to be the relative stand-alone selling price of a license when we deliver the license to our partner. This is because our partner has full use of the license and we do not have any additional performance obligations related to the license after delivery. For example, in the third quarter of 2022, we earned a $35 million license fee from Roche when Roche licensed IONIS-FB-L Rx Sublicense fees We recognize sublicense fee revenue in the period in which a party, who has already licensed our technology, further licenses the technology to another party because we do not have any performance obligations related to the sublicense. For example, in the fourth quarter of 2020, we earned a $41.2 million sublicense fee from Alnylam Pharmaceuticals for its sublicense of our technology to Sanofi Genzyme. Amendments to Agreements From time to time we amend our collaboration agreements. When this occurs, we are required to assess the following items to determine the accounting for the amendment: 1) If the additional goods and/or services are distinct from the other performance obligations in the original agreement; and 2) If the goods and/or services are sold at a stand-alone selling price. If we conclude the goods and/or services in the amendment are distinct from the performance obligations in the original agreement and at a stand-alone selling price, we account for the amendment as a separate agreement. If we conclude the goods and/or services are not distinct and are sold at a stand-alone selling price, we then assess whether the remaining goods or services are distinct from those already provided. If the goods and/or services are distinct from what we have already provided, then we allocate the remaining transaction price from the original agreement and the additional transaction price from the amendment to the remaining goods and/or services. If the goods and/or services are not distinct from what we have already provided, we update the transaction price for our single performance obligation and recognize any change in our estimated revenue as a cumulative adjustment. 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 we should account for them individually as distinct arrangements or whether the separate agreements should be combined and accounted for together. We evaluate the following to determine the accounting for the agreements: ● Whether the agreements were negotiated together with a single objective; ● Whether the amount of consideration in one contract depends on the price or performance of the other agreement; or ● Whether the goods and/or services promised under the agreements are a single performance obligation. Our evaluation involves significant judgment to determine whether a group of agreements might be so closely related that accounting guidance requires us to account for them as a combined arrangement. For example, in the second quarter of 2018, we entered into two separate agreements with Biogen at the same time: a new strategic neurology collaboration agreement and a stock purchase agreement. We evaluated the Biogen agreements to determine whether we should treat the agreements separately or combine them. We considered that the agreements were negotiated concurrently and in contemplation of one another. Based on these facts and circumstances, we concluded that we should evaluate the provisions of the agreements on a combined basis. Eplontersen Collaboration with AstraZeneca In December 2021, we entered into a joint development and commercialization agreement with AstraZeneca to develop and commercialize eplontersen for the treatment of transthyretin amyloidosis, or ATTR. We are jointly developing and preparing to commercialize eplontersen with AstraZeneca in the U.S. We granted AstraZeneca exclusive rights to commercialize eplontersen outside the U.S., except certain countries in Latin America. Under the terms of the agreement, we received a $200 million upfront payment in 2021. We evaluated our eplontersen collaboration under ASC 808 and identified four material components: (i) the license we granted to AstraZeneca in 2021, (ii) the co-development activities that we and AstraZeneca are performing, (iii) the co-commercialization activities that we and AstraZeneca are performing and (iv) the co-medical affairs activities that we and AstraZeneca are performing. We determined that we had a vendor-customer relationship within the scope of ASC 606 for the license we granted to AstraZeneca and as a result we had one performance obligation. For our sole performance obligation, we determined the transaction price was the $200 million upfront payment we received. We recognized the upfront payment in full in 2021 because we did not have any remaining performance obligations after we delivered the license to AstraZeneca. We also concluded that the co-development activities, the co-commercialization activities and the co-medical affairs activities are within the scope of ASC 808 because we and AstraZeneca are active participants exposed to the risks and benefits of the activities under the collaboration and therefore do not have a vendor-customer relationship. AstraZeneca is responsible for 55 percent of the costs associated with the ongoing global Phase 3 development program. Because we are leading the Phase 3 development program, we made an accounting policy election to recognize as non-customer revenue the cost-share funding from AstraZeneca, net of our share of AstraZeneca’s development expenses, in the same period we incur the related development expenses. As AstraZeneca is responsible for the majority of the commercial and medical affairs costs in the U.S. and all costs associated with bringing eplontersen to market outside the U.S., we made an accounting policy election to recognize cost-share funding we receive from AstraZeneca related to commercial and medical affairs activities as reductions of our SG&A expense and R&D expense, respectively. Refer to Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Contracts Receivable | Contracts Receivable Our contracts receivable balance represents the amounts we have billed our partners or customers and that are due to us unconditionally for goods we have delivered or services we have performed. When we bill our partners or customers with payment terms based on the passage of time, we consider the contracts receivable to be unconditional. We typically receive payment within one quarter of billing our partner or customer As of September 30, 2022, approximately 73.1 percent of our contracts receivables were from two significant customers. As of December 31, 2021, approximately 93.8 percent of our contracts receivables were from two significant customers. |
Unbilled SPINRAZA Royalties | Unbilled SPINRAZA Royalties Our unbilled SPINRAZA royalties represent our right to receive consideration from Biogen in advance of when we are eligible to bill Biogen for SPINRAZA royalties. We include these unbilled amounts in other current assets on our condensed consolidated balance sheet. |
Deferred Revenue | Deferred Revenue We are often entitled to bill our customers and receive payment from our customers in advance of our obligation to provide services or transfer goods to our partners. In these instances, we include the amounts in deferred revenue on our condensed consolidated balance sheet. During the and , we recognized $ million and $ million of revenue from amounts that were in our beginning deferred revenue balance for each respective period. |
Cost of Sales | Cost of Sales Our cost of sales is comprised of costs related to our commercial revenue, including manufacturing costs, transportation and freight costs and indirect overhead costs associated with the manufacturing and distribution of our products. We also may include certain period costs related to manufacturing services and inventory adjustments in cost of sales. |
Estimated Liability for Clinical Development Costs | Estimated Liability for Clinical Development Expenses We have numerous medicines in preclinical studies and/or clinical trials at clinical sites throughout the world. On at least a quarterly basis, we estimate our liability for preclinical and clinical development expenses we have incurred and services that we have received but for which we have not yet been billed and maintain an accrual to cover these expenses. These expenses primarily relate to third-party clinical management costs, laboratory and analysis costs, toxicology studies and investigator grants. We estimate our liability using assumptions about study and patient activities and the related expected expenses for those activities determined based on the contracted fees with our service providers. The assumptions we use represent our best estimates of the activity and expenses at the time of our accrual and involve inherent uncertainties and the application of our judgment. Upon settlement, these expenses may differ materially from the amounts accrued in our consolidated financial statements. Our historical accrual estimates have not been materially different from our actual amounts. |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and 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 debt investments as “available-for-sale” and carry them at fair market value based upon prices on the last day of the fiscal period for identical or similar items. We record unrealized gains and losses on debt securities as a separate component of comprehensive income (loss) and include net realized gains and losses in gain (loss) on investments in our condensed consolidated statement of operations. We use the specific identification method to determine the cost of securities sold. We also have equity investments of less than 20 percent ownership in publicly and privately held biotechnology companies that we received as part of a technology license or partner agreement. At September 30, 2022, we held equity investments in three publicly held companies and eight privately held companies. We are required to measure and record our equity investments at fair value and to recognize the changes in fair value in our condensed consolidated statement of operations. We account for our equity investments in publicly held companies based on observable inputs such as quoted prices in active markets for identical assets. We account for our equity investments in privately held companies at their cost minus impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. We recorded an immaterial amount of fair value adjustments related to our equity investments for the three and nine months ended September 30, 2022 and 2021. |
Inventory Valuation | Inventory Valuation We reflect our inventory on our condensed consolidated balance sheet at the lower of cost or net realizable value under the first-in, first-out method, or FIFO. We capitalize the costs of raw materials that we purchase for use in producing our medicines because until we use these raw materials, they have alternative future uses, which we refer to as clinical raw materials. We include in inventory raw material costs for medicines 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 medicine. For example, if one of our medicines failed, we could use the raw materials for that medicine to manufacture our other medicines. We expense these costs as R&D expenses when we begin to manufacture API for a particular medicine if the medicine has not been approved for marketing by a regulatory agency. Our raw materials - commercial inventory includes API for our commercial medicines. We capitalize material, labor and overhead costs as part of our raw materials - commercial 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. Our inventory consisted of the following (in thousands): September 30, 2022 December 31, 2021 Raw materials: Raw materials- clinical $ 15,598 $ 14,507 Raw materials- commercial 1,019 4,139 Total raw materials 16,617 18,646 Work in process 3,740 5,770 Finished goods 288 390 Total inventory $ 20,645 $ 24,806 |
Leases | Leases We determine if an arrangement contains a lease at inception of the arrangement. As of September 30, 2022, we only had operating leases. We recognize a right-of-use operating lease asset and associated short- and long-term operating lease liability on our condensed consolidated balance sheet for operating leases greater than one year. Our right-of-use assets represent our right to use an underlying asset for the lease term and our lease liabilities represent our obligation to make lease payments arising from the lease arrangement. We recognize our right-of-use operating lease assets and lease liabilities based on the present value of the future minimum lease payments we will pay over the lease term. We determine the lease term at the inception of each lease, and in certain cases our lease term could include renewal options if we concluded we were reasonably certain that we will exercise the renewal option. When we exercise a lease option that was not previously included in the initial lease term, we reassess our right-of-use asset and lease liabilities for the new lease term. As our leases do not provide an interest rate implicit in the lease, we use our incremental borrowing rate, based on the information available as of the lease inception date or at the lease option extension date in determining the present value of future payments. We recognize rent expense for our minimum lease payments on a straight-line basis over the expected term of our lease. We recognize period expenses, such as common area maintenance expenses, in the period we incur the expense. In January 2022, we entered into a sublease agreement for our office space located in Boston, Massachusetts. The sublease commenced in January 2022 when the office space was ready for our tenant’s occupancy. We are subleasing this space under a non-cancelable operating sublease with a sublease term ending in November 2028 with no option to extend the sublease. Under the sublease agreement we provided a seven-month free rent period, which commenced in January 2022. We will receive lease payments over the sublease term totaling $9.6 million. We are recognizing sublease payments as other income on a straight-line, gross basis over the term of our sublease. In October 2022, we entered into a build-to-suit lease agreement to lease a development chemistry and manufacturing facility in Oceanside, California. The lessor will develop and construct a building composed of manufacturing space, office space, research and development space and warehouse space. We will design and construct tenant improvements to customize the facility’s interior space. We will lease the facility for an initial term of 20 years and 3 months In October 2022, we concurrently entered into two purchase and sale agreements with a real estate investor. Under the agreements, we sold and leased back the facilities at our headquarters location in Carlsbad, California and will sell, subject to meeting certain closing conditions, two lots of undeveloped land adjacent to our headquarters. We sold the facilities at our headquarters for a total purchase price of $263.4 million and we expect to receive total proceeds of $33.0 million upon the close of the sale of the two lots. We used a portion of the sale proceeds to extinguish our mortgage debt on our headquarters facilities of $51.3 million. The initial lease term for our headquarters facilities is 15 years with options to extend the lease for two additional terms of five years each. In connection with the sale of our two undeveloped lots, we will enter into a build-to-suit lease agreement with the same real estate investor who will build a new R&D facility for us on those lots. Once this new facility is completed, our lease will commence. |
Research and Development 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. |
Patent Expenses | 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 U.S. Patent and Trademark Office, or foreign equivalent, issues the patent. . |
Income Taxes | Income Taxes We account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses and research and development credit carryforwards. We record a valuation allowance when necessary to reduce our net deferred tax assets to the amount expected to be realized. We apply the authoritative accounting guidance prescribing a threshold and measurement attribute for the financial recognition and measurement of a tax position taken or expected to be taken in a tax return. We recognize liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50 percent likely to be realized upon ultimate settlement. We are required to use significant judgment in evaluating our uncertain tax positions and determining our provision for income taxes. Although we believe our reserves are reasonable, we can provide no assurance that the final tax outcome of these matters will not be different from that which we have reflected in our historical income tax provisions and accruals. We adjust these reserves for changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences may impact the provision for income taxes in the period in which we make such determination. We are also required to use significant judgment in determining any valuation allowance recorded against our deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence, including scheduled reversal of deferred tax liabilities, past operating results, the feasibility of tax planning strategies and estimates of future taxable income. We base our estimates of future taxable income on assumptions that are consistent with our plans. The assumptions we use represent our best estimates and involve inherent uncertainties and the application of our judgment. Should actual amounts differ from our estimates, the amount of our tax expense and liabilities we recognize could be materially impacted. We record a valuation allowance to reduce the balance of our net deferred tax assets to the amount we believe is more-likely-than-not to be realized. We do not provide for a U.S. income tax liability and foreign withholding taxes on undistributed foreign earnings of our foreign subsidiaries. |
Long-Lived Assets | Long-lived Assets We evaluate long-lived assets, which include property, plant and equipment, right-of-use assets and patent costs, 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 We prepare our condensed consolidated financial statements in conformity with accounting principles generally accepted in the |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss Per Share Basic net loss per share We calculated our basic net loss per share for the three and nine months ended September 30, 2022 and 2021 by dividing our net loss by our weighted-average number of common shares outstanding during the period. Our basic net loss per share for the three months ended September 30, 2022 and 2021 were $0.33 and $0.58, respectively. Our basic net loss per share for the nine months ended September 30, 2022 and 2021 were $1.53 and $1.80, respectively. Diluted net loss per share For the three and nine months ended September 30, 2022 and 2021, 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: ● 0 percent convertible senior notes, or 0% Notes; ● Note hedges related to the 0% Notes; ● 0.125 percent convertible senior notes, or 0.125% Notes; ● Note hedges related to the 0.125% Notes; ● Dilutive stock options; ● Unvested restricted stock units, or RSUs; ● Unvested performance restricted stock units, or PRSUs; and ● Employee Stock Purchase Plan, or ESPP. For the three and nine months ended September 30, 2021, common stock that we could have issued from our 1 percent convertible senior notes, or 1% Notes, would also have had an anti-dilutive effect on net loss per share. Additionally as of September 30, 2022, we had warrants related to our 0% and 0.125% Notes outstanding. We will include the shares issuable under these warrants in our calculation of diluted earnings per share when the average market price per share of our common stock for the reporting period exceeds the strike price of the warrants. |
Convertible Debt | Convertible Debt We account for each of our convertible debt instruments as a single unit of accounting, a liability, because we concluded that the conversion features do not require bifurcation as a derivative under ASC 815, Derivatives and Hedging Convertible Debt |
Call Spread | Call Spread In conjunction with the issuance of our 0% Notes and 0.125% Notes in April 2021 and December 2019, respectively, we entered into call spread transactions, which were comprised of purchasing note hedges and selling warrants. We account for the note hedges and warrants as separate freestanding financial instruments and treat each instrument as a separate unit of accounting. We determined that the note hedges and warrants do not meet the definition of a liability using the guidance contained in ASC Topic 480, therefore we account for the note hedges and warrants using the Derivatives and Hedging – Contracts in Entity’s Own Equity accounting guidance contained in ASC 815. We determined that the note hedges and warrants meet the definition of a derivative, are indexed to our stock and meet the criteria to be classified in shareholders’ equity. We recorded the aggregate amount paid for the note hedges and the aggregate amount received for the warrants as additional paid-in capital in our condensed consolidated balance sheet. We reassess our ability to continue to classify the note hedges and warrants in shareholders’ equity at each reporting period. |
Segment Information | Segment Information We operate as a single |
Stock-Based Compensation Expense | Stock-based Compensation Expense We measure stock-based compensation expense for equity-classified awards, principally related to stock options, RSUs, PRSUs 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. On the grant date, we use our stock price and assumptions regarding a number of variables to determine the estimated fair value of stock-based payment awards. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. We recognize compensation expense for stock options granted, RSUs, PRSUs and stock purchase rights under the ESPP using the accelerated multiple-option approach. Under the accelerated multiple-option approach (also known as the graded-vesting method), we recognize compensation expense over the requisite service period for each separately vesting tranche of the award as though the award were in substance multiple awards, which results in the expense being front-loaded over the vesting period. In December 2020, we amended and restated the Akcea 2015 equity plan, including renaming the plan as the Ionis Pharmaceuticals, Inc. 2020 Equity Incentive Plan, or 2020 Plan. As a result, all employees are now under an Ionis stock plan and subject to the same Black-Scholes assumptions. For the nine months ended September 30, 2022 and 2021, we used the following weighted-average assumptions in our Black-Scholes calculations: Employee Stock Options: Nine Months Ended September 30, 2022 2021 Risk-free interest rate 1.9 % 0.5 % Dividend yield 0.0 % 0.0 % Volatility 54.9 % 54.3 % Expected life* 6.3 years 4.9 years * In 2021, our Compensation Committee approved an amendment to the 2011 Equity Incentive Plan, or 2011 Plan, and 2020 Plan, that increased the contractual term of stock options granted under these plans from seven years to ten years for stock options granted on January 1, 2022 and thereafter. We determined that we are unable to rely on our historical exercise data as a basis for estimating the expected life of stock options granted to employees following this change because the contractual term changed and we have no other means to reasonably estimate future exercise behavior. We therefore used the simplified method for determining the expected life of stock options granted to employees in the nine months ended September 30, 2022. Under the simplified method, we calculate the expected term as the average of the time-to-vesting and the contractual life of the options. As we gain additional historical information, we will transition to calculating our expected term based on our historical exercise patterns. Ionis Board of Director Stock Options: Nine Months Ended September 30, 2022 2021 Risk-free interest rate 2.9 % 1.2 % Dividend yield 0.0 % 0.0 % Volatility 56.2 % 55.9 % Expected life 7.4 years 7.3 years ESPP: Nine Months Ended September 30, 2022 2021 Risk-free interest rate 1.2 % 0.1 % Dividend yield 0.0 % 0.0 % Volatility 50.1 % 42.4 % Expected life 6 months 6 months RSU’s: The fair value of RSUs is based on the market price of our common stock on the date of grant. The RSUs we have granted to employees vest annually over a four-year period. The RSUs we granted to our board of directors prior to June 2020 vest annually over a four-year period. The RSUs we granted after June 2020 to our board of directors fully vest after one year. The weighted-average grant date fair value of RSUs granted to employees and our board of directors for the nine months ended September 30, 2022 were $34.88 and $38.06 per share, respectively. PRSU’s: Beginning in 2020, we added PRSU awards to the compensation for our Chief Executive Officer, Dr. Brett Monia. Beginning in 2022, we added PRSU awards to the compensation for our other Section 16 officers. Under the terms of the grants, one third We determined the fair value of the PRSUs using a Monte Carlo model because the performance target is based on our relative TSR, which represents a market condition. We are recognizing the grant date fair value of these awards as stock-based compensation expense using the accelerated multiple-option approach over the vesting period. The weighted-average grant date fair value of PRSUs granted to our Section 16 officers for the nine months ended September 30, 2022 and 2021 were $42.28 and $77.17 per share, respectively. The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2022 and 2021 (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of sales $ 163 $ 111 $ 376 $ 293 Research, development and patent expense 17,733 23,332 55,315 71,979 Selling, general and administrative expense 5,941 7,094 18,884 26,147 Total stock-based compensation expense $ 23,837 $ 30,537 $ 74,575 $ 98,419 As of September 30, 2022, total unrecognized estimated stock-based compensation expense related to non-vested stock options, RSUs and PRSUs was $50.9 million, $53.0 million and $3.4 million, respectively. Our actual expenses may differ from these estimates because we will adjust our unrecognized stock-based compensation expense for future forfeitures. We expect to recognize the cost of stock-based compensation expense related to our non-vested stock options, RSUs and PRSUs over a weighted average amortization period of 1.2 years, 1.4 years and 1.1 years, respectively. Our stock-based compensation expense related to equity awards decreased in the three and nine months ended September 30, 2022 compared to the same periods in 2021 due to decreased headcount of longer-tenured employees as a result of restructuring our commercial operations for TEGSEDI and WAYLIVRA. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In June 2022, the Financial Accounting Standards Board, or FASB, issued clarifying guidance on fair value measurement of equity securities subject to contractual trading restrictions. The guidance clarifies that contractual trading restrictions are not considered part of the unit of account of equity securities and therefore, are not considered when measuring the fair value of equity securities. This update is effective for interim and annual periods beginning January 1, 2024 on a prospective basis. Early adoption of this guidance is permitted at an interim or annual period. We early adopted this new guidance in the third quarter of 2022. This guidance did not have an impact on our condensed consolidated financial statements. We do not expect any other recently issued accounting standards to have a material impact to our financial results. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Significant Accounting Policies [Abstract] | |
Inventory | Our inventory consisted of the following (in thousands): September 30, 2022 December 31, 2021 Raw materials: Raw materials- clinical $ 15,598 $ 14,507 Raw materials- commercial 1,019 4,139 Total raw materials 16,617 18,646 Work in process 3,740 5,770 Finished goods 288 390 Total inventory $ 20,645 $ 24,806 |
Weighted-Average Assumptions for Stock Options | Employee Stock Options: Nine Months Ended September 30, 2022 2021 Risk-free interest rate 1.9 % 0.5 % Dividend yield 0.0 % 0.0 % Volatility 54.9 % 54.3 % Expected life* 6.3 years 4.9 years * In 2021, our Compensation Committee approved an amendment to the 2011 Equity Incentive Plan, or 2011 Plan, and 2020 Plan, that increased the contractual term of stock options granted under these plans from seven years to ten years for stock options granted on January 1, 2022 and thereafter. We determined that we are unable to rely on our historical exercise data as a basis for estimating the expected life of stock options granted to employees following this change because the contractual term changed and we have no other means to reasonably estimate future exercise behavior. We therefore used the simplified method for determining the expected life of stock options granted to employees in the nine months ended September 30, 2022. Under the simplified method, we calculate the expected term as the average of the time-to-vesting and the contractual life of the options. As we gain additional historical information, we will transition to calculating our expected term based on our historical exercise patterns. Ionis Board of Director Stock Options: Nine Months Ended September 30, 2022 2021 Risk-free interest rate 2.9 % 1.2 % Dividend yield 0.0 % 0.0 % Volatility 56.2 % 55.9 % Expected life 7.4 years 7.3 years |
Weighted-Average Assumptions for ESPP | ESPP: Nine Months Ended September 30, 2022 2021 Risk-free interest rate 1.2 % 0.1 % Dividend yield 0.0 % 0.0 % Volatility 50.1 % 42.4 % 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, 2022 and 2021 (in thousands). Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Cost of sales $ 163 $ 111 $ 376 $ 293 Research, development and patent expense 17,733 23,332 55,315 71,979 Selling, general and administrative expense 5,941 7,094 18,884 26,147 Total stock-based compensation expense $ 23,837 $ 30,537 $ 74,575 $ 98,419 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 September 30, 2022: One year 66 % After one year two years 31 % After two years three and a half years 3 % Total 100 % |
Summary of Investments | The following is a summary of our investments (in thousands): Amortized Gross Unrealized Estimated September 30, 2022 Cost Gains Losses Fair Value Available-for-sale securities: Corporate debt securities (1) $ 487,666 $ 1 $ (5,327 ) $ 482,340 Debt securities issued by U.S. government agencies 104,987 12 (1,686 ) 103,313 Debt securities issued by the U.S. Treasury (1) 462,475 22 (3,761 ) 458,736 Debt securities issued by states of the U.S. and political subdivisions of the states 72,059 — (797 ) 71,262 Other municipal debt securities 6,040 — (76 ) 5,964 Total securities with a maturity of one year or less 1,133,227 35 (11,647 ) 1,121,615 Corporate debt securities 258,362 6 (12,654 ) 245,714 Debt securities issued by U.S. government agencies 28,987 8 (1,541 ) 27,454 Debt securities issued by the U.S. Treasury 298,431 13 (6,247 ) 292,197 Debt securities issued by states of the U.S. and political subdivisions of the states 14,591 2 (540 ) 14,053 Total securities with a maturity of more than one year 600,371 29 (20,982 ) 579,418 Total available-for-sale securities $ 1,733,598 $ 64 $ (32,629 ) $ 1,701,033 Equity securities: Publicly traded equity securities included in other current assets (2) $ 15,097 $ — $ (7,841 ) $ 7,256 Privately held equity securities included in deposits and other assets (3) 23,115 17,257 — 40,372 Total equity securities 38,212 17,257 (7,841 ) 47,628 Total available-for-sale and equity securities $ 1,771,810 $ 17,321 $ (40,470 ) $ 1,748,661 Amortized Gross Unrealized Estimated December 31, 2021 Cost Gains Losses Fair Value Available-for-sale securities: Corporate debt securities (1) $ 383,870 $ 728 $ (226 ) $ 384,372 Debt securities issued by U.S. government agencies 48,493 19 (18 ) 48,494 Debt securities issued by the U.S. Treasury (1) 45,424 — (64 ) 45,360 Debt securities issued by states of the U.S. and political subdivisions of the states 134,770 45 (37 ) 134,778 Total securities with a maturity of one year or less 612,557 792 (345 ) 613,004 Corporate debt securities 382,000 331 (2,644 ) 379,687 Debt securities issued by U.S. government agencies 72,935 — (561 ) 72,374 Debt securities issued by the U.S. Treasury 137,635 139 (500 ) 137,274 Debt securities issued by states of the U.S. and political subdivisions of the states 39,909 1 (224 ) 39,686 Other municipal debt securities 6,136 — (37 ) 6,099 Total securities with a maturity of more than one year 638,615 471 (3,966 ) 635,120 Total available-for-sale securities $ 1,251,172 $ 1,263 $ (4,311 ) $ 1,248,124 Equity securities: Publicly traded equity securities included in other current assets (2) $ 11,897 $ 7,145 $ (837 ) $ 18,205 Privately held equity securities included in deposits and other assets (3) 15,615 16,707 — 32,322 Total equity securities 27,512 23,852 (837 ) 50,527 Total available-for-sale and equity securities $ 1,278,684 $ 25,115 $ (5,148 ) $ 1,298,651 (1) Includes investments classified as cash equivalents in our condensed consolidated balance sheet. (2) Our equity securities included in other current assets consisted of our investments in publicly traded companies. We recognize publicly traded equity securities at fair value. In the nine months ended September 30, 2022, we recognized a $10.9 million unrealized non-cash loss in our condensed consolidated statement of operations related to a decrease in the fair value of our investments in publicly traded companies. (3) Our equity securities included in deposits and other assets consisted of our investments in privately held companies. We recognize our private company equity securities at . |
Temporarily Impaired Investments | The following is a summary of our investments we consider to be temporarily impaired at September 30, 2022 (in thousands, except for number of investments). 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 397 $ 591,245 $ (10,897 ) $ 133,763 $ (7,084 ) $ 725,008 $ (17,981 ) Debt securities issued by U.S. government agencies 31 69,640 (875 ) 53,299 (2,352 ) 122,939 (3,227 ) Debt securities issued by the U.S. Treasury 74 643,231 (8,327 ) 52,767 (1,681 ) 695,998 (10,008 ) Debt securities issued by states of the U.S. and political subdivisions of the states 140 40,160 (658 ) 21,769 (679 ) 61,929 (1,337 ) Other municipal debt securities 2 994 (12 ) 4,970 (64 ) 5,964 (76 ) Total temporarily impaired securities 644 $ 1,345,270 $ (20,769 ) $ 266,568 $ (11,860 ) $ 1,611,838 $ (32,629 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements [Abstract] | |
Assets Measured at Fair Value on a Recurring Basis | The following tables present the major security types we held at September 30, 2022 and December 31, 2021 that we regularly measure and carry at fair value. As of December 31, 2021, one of our investments in publicly held biotechnology companies was subject to trading restrictions that ended in the third quarter of 2022; as a result, we included a lack of marketability discount in valuing this investment, which is a Level 3 input. At September 30, 2022 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents (1) $ 231,960 $ 231,960 $ — $ — Corporate debt securities (2) 728,054 — 728,054 — Debt securities issued by U.S. government agencies (2) 130,767 — 130,767 — Debt securities issued by the U.S. Treasury (3) 750,933 750,933 — — Debt securities issued by states of the U.S. and political subdivisions of the states (4) 85,315 — 85,315 — Other municipal debt securities (3) 5,964 — 5,964 — Publicly traded equity securities included in other current assets 7,256 7,256 — — Total $ 1,940,249 $ 990,149 $ 950,100 $ — At December 31, 2021 Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents (1) $ 541,199 $ 541,199 $ — $ — Corporate debt securities (3) 764,059 — 764,059 — Debt securities issued by U.S. government agencies (3) 120,868 — 120,868 — Debt securities issued by the U.S. Treasury (3) 182,634 182,634 — — Debt securities issued by states of the U.S. and political subdivisions of the states (5) 174,464 — 174,464 — Other municipal debt securities (3) 6,099 — 6,099 — Publicly traded equity securities included in other current assets 18,205 3,875 — 14,330 Total $ 1,807,528 $ 727,708 $ 1,065,490 $ 14,330 The following footnotes reference lines in our condensed consolidated balance sheet: (1) Included in cash and cash equivalents in our condensed consolidated balance sheet. (2) $23.5 million was included in cash and cash equivalents in our condensed consolidated balance sheet, with the difference included in short-term investments in our condensed consolidated balance sheet. (3) Included in short-term investments. (4) $10.0 million was included in cash and cash equivalents in our condensed consolidated balance sheet, with the difference included in short-term investments in our condensed consolidated balance sheet. (5) $2.3 million was included in cash and cash equivalents in our condensed consolidated balance sheet, with the difference included in short-term investments in our condensed consolidated balance sheet. |
Collaborative Arrangements an_2
Collaborative Arrangements and Licensing Agreements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Biogen Collaborations [Member] | |
Collaborative Arrangements and Licensing Agreements [Abstract] | |
Revenue from Collaborative Relationship | During the three and nine months ended September 30, 2022 and 2021, we earned the following revenue from our relationship with Biogen (in millions, except percentage amounts): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 SPINRAZA royalties (commercial revenue) $ 61.6 $ 66.6 $ 175.1 $ 198.7 R&D revenue 27.4 17.4 84.6 63.4 Total revenue from our relationship with Biogen $ 89.0 $ 84.0 $ 259.7 $ 262.1 Percentage of total revenue 56 % 63 % 60 % 71 % |
Roche Collaborations [Member] | |
Collaborative Arrangements and Licensing Agreements [Abstract] | |
Revenue from Collaborative Relationship | During the three and nine months ended September 30, 2022 and 2021, we earned the following revenue from our relationship with Roche (in millions, except percentage amounts): Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 R&D revenue $ 41.5 $ 3.9 $ 65.4 $ 11.4 Percentage of total revenue 26 % 3 % 15 % 3 % |
Convertible Debt (Tables)
Convertible Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
0 Percent Convertible Senior Notes [Member] | |
Convertible Notes [Abstract] | |
Convertible Senior Notes | At September 30, 2022, we had the following 0% 0% Outstanding principal balance $ 632.5 Unamortized debt issuance costs $ 11.0 Maturity date April 2026 Interest rate 0 percent Effective interest rate 0.5 percent Conversion price per share $ 57.84 Effective conversion price per share with call spread $ 76.39 Total shares of common stock subject to conversion 10.9 |
0.125 Percent Convertible Senior Notes [Member] | |
Convertible Notes [Abstract] | |
Convertible Senior Notes | At September 30, 2022, we had the following 0.125% Notes outstanding with interest payable semi-annually (amounts in millions except interest rate and price per share data): 0.125% Notes Outstanding principal balance $ 548.8 Unamortized debt issuance costs $ 4.9 Maturity date December 2024 Interest rate 0.125 percent Effective interest rate 0.5 percent Conversion price per share $ 83.28 Effective conversion price per share with call spread $ 123.38 Total shares of common stock subject to conversion 6.6 |
Significant Accounting Polici_4
Significant Accounting Policies, Revenue Recognition (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2022 USD ($) Target | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2018 USD ($) | Jun. 30, 2018 Agreement | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) Component PerformanceObligation | |
Revenue Recognition [Abstract] | ||||||||||
Revenue | $ 159,767 | $ 133,093 | $ 435,478 | $ 370,450 | ||||||
Biogen [Member] | ||||||||||
Revenue Recognition [Abstract] | ||||||||||
Number of agreements | Agreement | 2 | |||||||||
2013 Strategic Neurology Collaboration with Biogen [Member] | ION859 [Member] | ||||||||||
Revenue Recognition [Abstract] | ||||||||||
Revenue | $ 10,000 | |||||||||
Collaboration to Develop IONIS-FB-L with Roche [Member] | ||||||||||
Revenue Recognition [Abstract] | ||||||||||
Revenue | 35,000 | $ 13,800 | ||||||||
Upfront payment received | $ 75,000 | |||||||||
Milestone payment received and added to transaction price | $ 20,000 | |||||||||
Neurology Collaborations with Biogen [Member] | ||||||||||
Revenue Recognition [Abstract] | ||||||||||
Revenue | $ 13,000 | |||||||||
Number of targets advanced | Target | 2 | |||||||||
Alnylam [Member] | ||||||||||
Revenue Recognition [Abstract] | ||||||||||
Revenue | $ 41,200 | |||||||||
Eplontersen Collaboration with AstraZeneca [Member] | ||||||||||
Revenue Recognition [Abstract] | ||||||||||
Revenue | $ 200,000 | |||||||||
Number of material components | Component | 4 | |||||||||
Number of separate performance obligations | PerformanceObligation | 1 | |||||||||
Transaction price | $ 200,000 | |||||||||
Percentage of costs associated with ongoing global Phase 3 development program paid by AstraZeneca | 55% |
Significant Accounting Polici_5
Significant Accounting Policies, Contracts Receivable (Details) - Partner | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Contracts Receivable [Abstract] | ||
Period of time after billing when payment is received | 3 months | |
Significant Partners [Abstract] | ||
Number of significant customers | 2 | 2 |
Contracts Receivables [Member] | Credit Concentration [Member] | Two Significant Customers [Member] | ||
Significant Partners [Abstract] | ||
Concentration percentage | 73.10% | 93.80% |
Significant Accounting Polici_6
Significant Accounting Policies, Deferred Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Deferred Revenue [Abstract] | ||||
Revenue recognized from amounts in beginning deferred revenue balance | $ 23.1 | $ 21.1 | $ 69.8 | $ 71.9 |
Significant Accounting Polici_7
Significant Accounting Policies, Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Accrued Liabilities [Abstract] | ||
Clinical development expenses | $ 103,635 | $ 65,730 |
In-licensing expenses | 7,130 | 8,044 |
Commercial expenses | 4,188 | 2,471 |
Other miscellaneous expenses | 13,049 | 12,315 |
Total accrued liabilities | $ 128,002 | $ 88,560 |
Significant Accounting Polici_8
Significant Accounting Policies, Cash, Cash Equivalents and Investments (Details) | Sep. 30, 2022 Company |
Cash, Cash Equivalents and Investments [Abstract] | |
Number of publicly held companies in which there is an equity ownership interest of less than 20% | 3 |
Number of privately held companies in which there is an equity ownership interest of less than 20% | 8 |
Significant Accounting Polici_9
Significant Accounting Policies, Inventory Valuation (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventory Valuation [Abstract] | ||
Raw materials | $ 16,617 | $ 18,646 |
Work in process | 3,740 | 5,770 |
Finished goods | 288 | 390 |
Total inventory | 20,645 | 24,806 |
Clinical [Member] | ||
Inventory Valuation [Abstract] | ||
Raw materials | 15,598 | 14,507 |
Commercial [Member] | ||
Inventory Valuation [Abstract] | ||
Raw materials | $ 1,019 | $ 4,139 |
Significant Accounting Polic_10
Significant Accounting Policies, Leases (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Oct. 31, 2022 USD ($) Option Agreement Lot | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | |
Leases [Abstract] | |||
Payment of mortgage debt | $ 89 | $ 0 | |
Subsequent Event [Member] | |||
Leases [Abstract] | |||
Number of purchase and sale agreements entered into with real estate investor | Agreement | 2 | ||
Office Space in Boston, Massachusetts [Member] | |||
Leases [Abstract] | |||
Free rent period under sublease agreement | 7 months | ||
Lease payments to be received over term of sublease | $ 9,600 | ||
Development Chemistry and Manufacturing Facility in Oceanside, California [Member] | Subsequent Event [Member] | |||
Leases [Abstract] | |||
Term of operating lease | 20 years 3 months | ||
Number of options to extend lease | Option | 2 | ||
Term of operating lease extension | 10 years | ||
Headquarters Location in Carlsbad, California [Member] | Subsequent Event [Member] | |||
Leases [Abstract] | |||
Proceeds from sale of property | $ 263,400 | ||
Payment of mortgage debt | $ 51,300 | ||
Term of operating lease | 15 years | ||
Number of options to extend lease | Option | 2 | ||
Term of operating lease extension | 5 years | ||
Undeveloped Land in Carlsbad, California [Member] | Forecast [Member] | |||
Leases [Abstract] | |||
Proceeds from sale of property | $ 33,000 | ||
Undeveloped Land in Carlsbad, California [Member] | Subsequent Event [Member] | |||
Leases [Abstract] | |||
Number of lots of undeveloped land included in purchase and sale agreement | Lot | 2 |
Significant Accounting Polic_11
Significant Accounting Policies, Basic and Diluted Net Loss per Share (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Basic and Diluted Net Loss per Share [Abstract] | |||||
Basic net loss per share (in dollars per share) | $ (0.33) | $ (0.58) | $ (1.53) | $ (1.8) | |
0 Percent Convertible Senior Notes [Member] | |||||
Basic and Diluted Net Loss per Share [Abstract] | |||||
Interest rate on convertible senior notes | 0% | 0% | 0% | 0% | 0% |
0.125 Percent Convertible Senior Notes [Member] | |||||
Basic and Diluted Net Loss per Share [Abstract] | |||||
Interest rate on convertible senior notes | 0.125% | 0.125% | 0.125% | 0.125% | 0.125% |
1 Percent Convertible Senior Notes [Member] | |||||
Basic and Diluted Net Loss per Share [Abstract] | |||||
Interest rate on convertible senior notes | 1% | 1% | 1% | 1% |
Significant Accounting Polic_12
Significant Accounting Policies, Convertible Debt (Details) | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 |
0 Percent Convertible Senior Notes [Member] | |||
Convertible Debt [Abstract] | |||
Interest rate on convertible senior notes | 0% | 0% | 0% |
Effective interest rate | 0.50% | ||
0.125 Percent Convertible Senior Notes [Member] | |||
Convertible Debt [Abstract] | |||
Interest rate on convertible senior notes | 0.125% | 0.125% | 0.125% |
Effective interest rate | 0.50% |
Significant Accounting Polic_13
Significant Accounting Policies, Segment Information (Details) | 9 Months Ended |
Sep. 30, 2022 Segment | |
Segment Information [Abstract] | |
Number of operating segments | 1 |
Significant Accounting Polic_14
Significant Accounting Policies, Stock-Based Compensation Expense (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) Period $ / shares shares | Sep. 30, 2021 USD ($) $ / shares | ||
Stock-based Compensation Expense [Abstract] | |||||
Stock-based compensation expense | $ 23,837 | $ 30,537 | $ 74,575 | $ 98,419 | |
Cost of Sales [Member] | |||||
Stock-based Compensation Expense [Abstract] | |||||
Stock-based compensation expense | 163 | 111 | 376 | 293 | |
Research, Development and Patent Expense [Member] | |||||
Stock-based Compensation Expense [Abstract] | |||||
Stock-based compensation expense | 17,733 | 23,332 | 55,315 | 71,979 | |
Selling, General and Administrative Expense [Member] | |||||
Stock-based Compensation Expense [Abstract] | |||||
Stock-based compensation expense | 5,941 | $ 7,094 | 18,884 | $ 26,147 | |
Stock Options [Member] | |||||
Unrecognized Compensation Expense [Abstract] | |||||
Unrecognized compensation expense related to non-vested stock options | 50,900 | $ 50,900 | |||
Weighted average period for recognition | 1 year 2 months 12 days | ||||
Stock Options [Member] | Board of Directors [Member] | |||||
Weighted-Average Assumptions [Abstract] | |||||
Risk-free interest rate | 2.90% | 1.20% | |||
Dividend yield | 0% | 0% | |||
Volatility | 56.20% | 55.90% | |||
Expected life | 7 years 4 months 24 days | 7 years 3 months 18 days | |||
Stock Options [Member] | Employees [Member] | |||||
Weighted-Average Assumptions [Abstract] | |||||
Risk-free interest rate | 1.90% | 0.50% | |||
Dividend yield | 0% | 0% | |||
Volatility | 54.90% | 54.30% | |||
Expected life | [1] | 6 years 3 months 18 days | 4 years 10 months 24 days | ||
Stock Options Granted Prior to January 1, 2022 [Member] | |||||
Weighted-Average Assumptions [Abstract] | |||||
Award term | 7 years | ||||
Stock Options Granted on January 1, 2022 and Thereafter [Member] | |||||
Weighted-Average Assumptions [Abstract] | |||||
Award term | 10 years | ||||
ESPP [Member] | |||||
Weighted-Average Assumptions [Abstract] | |||||
Risk-free interest rate | 1.20% | 0.10% | |||
Dividend yield | 0% | 0% | |||
Volatility | 50.10% | 42.40% | |||
Expected life | 6 months | 6 months | |||
RSUs [Member] | |||||
Unrecognized Compensation Expense [Abstract] | |||||
Unrecognized compensation cost related to non-vested units | 53,000 | $ 53,000 | |||
Weighted average period for recognition | 1 year 4 months 24 days | ||||
RSUs [Member] | Board of Directors [Member] | |||||
RSUs and PRSUs [Abstract] | |||||
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 38.06 | ||||
RSUs [Member] | Board of Directors [Member] | Minimum [Member] | |||||
RSUs and PRSUs [Abstract] | |||||
Vesting period | 1 year | ||||
RSUs [Member] | Board of Directors [Member] | Maximum [Member] | |||||
RSUs and PRSUs [Abstract] | |||||
Vesting period | 4 years | ||||
RSUs [Member] | Employees [Member] | |||||
RSUs and PRSUs [Abstract] | |||||
Vesting period | 4 years | ||||
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 34.88 | ||||
PRSUs [Member] | |||||
Unrecognized Compensation Expense [Abstract] | |||||
Unrecognized compensation cost related to non-vested units | $ 3,400 | $ 3,400 | |||
Weighted average period for recognition | 1 year 1 month 6 days | ||||
PRSUs [Member] | Section 16 Officers [Member] | |||||
RSUs and PRSUs [Abstract] | |||||
Number of performance periods | Period | 3 | ||||
Vesting period | 3 years | ||||
Number of units guaranteed to vest (in shares) | shares | 0 | ||||
Weighted-average grant date fair value (in dollars per share) | $ / shares | $ 42.28 | $ 77.17 | |||
PRSUs [Member] | Section 16 Officers [Member] | Minimum [Member] | |||||
RSUs and PRSUs [Abstract] | |||||
Percentage of units guaranteed to vest | 0% | ||||
PRSUs [Member] | Section 16 Officers [Member] | Maximum [Member] | |||||
RSUs and PRSUs [Abstract] | |||||
Percentage of units guaranteed to vest | 150% | ||||
PRSUs [Member] | Section 16 Officers [Member] | One-Year Period [Member] | |||||
RSUs and PRSUs [Abstract] | |||||
Vesting percentage | 33.30% | ||||
PRSUs [Member] | Section 16 Officers [Member] | Two-Year Period [Member] | |||||
RSUs and PRSUs [Abstract] | |||||
Vesting percentage | 33.30% | ||||
PRSUs [Member] | Section 16 Officers [Member] | Three-Year Period [Member] | |||||
RSUs and PRSUs [Abstract] | |||||
Vesting percentage | 33.30% | ||||
[1]In 2021, our Compensation Committee approved an amendment to the 2011 Equity Incentive Plan, or 2011 Plan, and 2020 Plan, that increased the contractual term of stock options granted under these plans from seven years to ten years for stock options granted on January 1, 2022 and thereafter. We determined that we are unable to rely on our historical exercise data as a basis for estimating the expected life of stock options granted to employees following this change because the contractual term changed and we have no other means to reasonably estimate future exercise behavior. We therefore used the simplified method for determining the expected life of stock options granted to employees in the nine months ended September 30, 2022. Under the simplified method, we calculate the expected term as the average of the time-to-vesting and the contractual life of the options. As we gain additional historical information, we will transition to calculating our expected term based on our historical exercise patterns. |
Investments, Contract Maturity
Investments, Contract Maturity of Available-for-Sale Securities (Details) | 9 Months Ended |
Sep. 30, 2022 | |
Contract Maturity of Available-for-Sale Securities [Abstract] | |
One year or less | 66% |
After one year but within two years | 31% |
After two years but within three and a half years | 3% |
Total | 100% |
Maximum contract maturity period, range 1 | 1 year |
Maximum contract maturity period, range 2 | 2 years |
Maximum contract maturity period, range 3 | 3 years 6 months |
Percentage of available-for-sale securities with a maturity of less than two years | 97% |
Investments, Summary of Investm
Investments, Summary of Investments (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 USD ($) Company | Dec. 31, 2021 USD ($) | ||
Ownership Interests in Private and Public Companies [Abstract] | |||
Number of private companies in which there is an equity ownership interest of less than 20% | Company | 8 | ||
Number of public companies in which there is an equity ownership interest of less than 20% | Company | 3 | ||
Available-for-sale Securities with Maturity of One Year or Less [Abstract] | |||
Amortized cost | $ 1,133,227 | $ 612,557 | |
Gross unrealized gains | 35 | 792 | |
Gross unrealized losses | (11,647) | (345) | |
Estimated fair value | 1,121,615 | 613,004 | |
Available-for-sale Securities with Maturity of More Than One Year [Abstract] | |||
Amortized cost | 600,371 | 638,615 | |
Gross unrealized gains | 29 | 471 | |
Gross unrealized losses | (20,982) | (3,966) | |
Estimated fair value | 579,418 | 635,120 | |
Available-for-sale Securities [Abstract] | |||
Amortized cost | 1,733,598 | 1,251,172 | |
Gross unrealized gains | 64 | 1,263 | |
Gross unrealized losses | (32,629) | (4,311) | |
Estimated fair value | 1,701,033 | 1,248,124 | |
Equity Securities [Abstract] | |||
Amortized cost | 38,212 | 27,512 | |
Gross unrealized gains | 17,257 | 23,852 | |
Gross unrealized losses | (7,841) | (837) | |
Estimated fair value | 47,628 | 50,527 | |
Available-for-sale and Equity Securities [Abstract] | |||
Amortized cost | 1,771,810 | 1,278,684 | |
Gross unrealized gains | 17,321 | 25,115 | |
Gross unrealized losses | (40,470) | (5,148) | |
Estimated fair value | 1,748,661 | 1,298,651 | |
Corporate Debt Securities [Member] | |||
Available-for-sale Securities with Maturity of One Year or Less [Abstract] | |||
Amortized cost | [1] | 487,666 | 383,870 |
Gross unrealized gains | 1 | 728 | |
Gross unrealized losses | (5,327) | (226) | |
Estimated fair value | 482,340 | 384,372 | |
Available-for-sale Securities with Maturity of More Than One Year [Abstract] | |||
Amortized cost | 258,362 | 382,000 | |
Gross unrealized gains | 6 | 331 | |
Gross unrealized losses | (12,654) | (2,644) | |
Estimated fair value | 245,714 | 379,687 | |
Debt Securities Issued by U.S. Government Agencies [Member] | |||
Available-for-sale Securities with Maturity of One Year or Less [Abstract] | |||
Amortized cost | 104,987 | 48,493 | |
Gross unrealized gains | 12 | 19 | |
Gross unrealized losses | (1,686) | (18) | |
Estimated fair value | 103,313 | 48,494 | |
Available-for-sale Securities with Maturity of More Than One Year [Abstract] | |||
Amortized cost | 28,987 | 72,935 | |
Gross unrealized gains | 8 | 0 | |
Gross unrealized losses | (1,541) | (561) | |
Estimated fair value | 27,454 | 72,374 | |
Debt Securities Issued by the U.S. Treasury [Member] | |||
Available-for-sale Securities with Maturity of One Year or Less [Abstract] | |||
Amortized cost | [1] | 462,475 | 45,424 |
Gross unrealized gains | 22 | 0 | |
Gross unrealized losses | (3,761) | (64) | |
Estimated fair value | 458,736 | 45,360 | |
Available-for-sale Securities with Maturity of More Than One Year [Abstract] | |||
Amortized cost | 298,431 | 137,635 | |
Gross unrealized gains | 13 | 139 | |
Gross unrealized losses | (6,247) | (500) | |
Estimated fair value | 292,197 | 137,274 | |
Debt Securities Issued by States of the U.S. and Political Subdivisions of the States [Member] | |||
Available-for-sale Securities with Maturity of One Year or Less [Abstract] | |||
Amortized cost | 72,059 | 134,770 | |
Gross unrealized gains | 0 | 45 | |
Gross unrealized losses | (797) | (37) | |
Estimated fair value | 71,262 | 134,778 | |
Available-for-sale Securities with Maturity of More Than One Year [Abstract] | |||
Amortized cost | 14,591 | 39,909 | |
Gross unrealized gains | 2 | 1 | |
Gross unrealized losses | (540) | (224) | |
Estimated fair value | 14,053 | 39,686 | |
Other Municipal Debt Securities [Member] | |||
Available-for-sale Securities with Maturity of One Year or Less [Abstract] | |||
Amortized cost | 6,040 | ||
Gross unrealized gains | 0 | ||
Gross unrealized losses | (76) | ||
Estimated fair value | 5,964 | ||
Available-for-sale Securities with Maturity of More Than One Year [Abstract] | |||
Amortized cost | 6,136 | ||
Gross unrealized gains | 0 | ||
Gross unrealized losses | (37) | ||
Estimated fair value | 6,099 | ||
Publicly Traded Equity Securities [Member] | |||
Equity Securities [Abstract] | |||
Amortized cost | [2] | 15,097 | 11,897 |
Gross unrealized gains | 0 | 7,145 | |
Gross unrealized losses | (7,841) | (837) | |
Estimated fair value | 7,256 | 18,205 | |
Available-for-sale and Equity Securities [Abstract] | |||
Unrealized loss on equity investment | (10,900) | ||
Privately Held Equity Securities [Member] | |||
Equity Securities [Abstract] | |||
Amortized cost | [3] | 23,115 | 15,615 |
Gross unrealized gains | 17,257 | 16,707 | |
Gross unrealized losses | 0 | 0 | |
Estimated fair value | $ 40,372 | $ 32,322 | |
[1]Includes investments classified as cash equivalents in our condensed consolidated balance sheet.[2]Our equity securities included in other current assets consisted of our investments in publicly traded companies. We recognize publicly traded equity securities at fair value. In the nine months ended September 30, 2022, we recognized a $10.9 million unrealized non-cash loss in our condensed consolidated statement of operations related to a decrease in the fair value of our investments in publicly traded companies.[3] Our equity securities included in deposits and other assets consisted of our investments in privately held companies. We recognize our private company equity securities at . |
Investments, Investments Tempor
Investments, Investments Temporarily Impaired (Details) $ in Thousands | Sep. 30, 2022 USD ($) Investment |
Temporarily Impaired Investments [Abstract] | |
Number of investments | Investment | 644 |
Estimated Fair Value [Abstract] | |
Less than 12 months of temporary impairment | $ 1,345,270 |
More than 12 months of temporary impairment | 266,568 |
Total temporary impairment | 1,611,838 |
Unrealized Losses [Abstract] | |
Less than 12 months of temporary impairment | (20,769) |
More than 12 months of temporary impairment | (11,860) |
Total temporary impairment | $ (32,629) |
Corporate Debt Securities [Member] | |
Temporarily Impaired Investments [Abstract] | |
Number of investments | Investment | 397 |
Estimated Fair Value [Abstract] | |
Less than 12 months of temporary impairment | $ 591,245 |
More than 12 months of temporary impairment | 133,763 |
Total temporary impairment | 725,008 |
Unrealized Losses [Abstract] | |
Less than 12 months of temporary impairment | (10,897) |
More than 12 months of temporary impairment | (7,084) |
Total temporary impairment | $ (17,981) |
Debt Securities Issued by U.S. Government Agencies [Member] | |
Temporarily Impaired Investments [Abstract] | |
Number of investments | Investment | 31 |
Estimated Fair Value [Abstract] | |
Less than 12 months of temporary impairment | $ 69,640 |
More than 12 months of temporary impairment | 53,299 |
Total temporary impairment | 122,939 |
Unrealized Losses [Abstract] | |
Less than 12 months of temporary impairment | (875) |
More than 12 months of temporary impairment | (2,352) |
Total temporary impairment | $ (3,227) |
Debt Securities Issued by the U.S. Treasury [Member] | |
Temporarily Impaired Investments [Abstract] | |
Number of investments | Investment | 74 |
Estimated Fair Value [Abstract] | |
Less than 12 months of temporary impairment | $ 643,231 |
More than 12 months of temporary impairment | 52,767 |
Total temporary impairment | 695,998 |
Unrealized Losses [Abstract] | |
Less than 12 months of temporary impairment | (8,327) |
More than 12 months of temporary impairment | (1,681) |
Total temporary impairment | $ (10,008) |
Debt Securities Issued by States of the U.S. and Political Subdivisions of the States [Member] | |
Temporarily Impaired Investments [Abstract] | |
Number of investments | Investment | 140 |
Estimated Fair Value [Abstract] | |
Less than 12 months of temporary impairment | $ 40,160 |
More than 12 months of temporary impairment | 21,769 |
Total temporary impairment | 61,929 |
Unrealized Losses [Abstract] | |
Less than 12 months of temporary impairment | (658) |
More than 12 months of temporary impairment | (679) |
Total temporary impairment | $ (1,337) |
Other Municipal Debt Securities [Member] | |
Temporarily Impaired Investments [Abstract] | |
Number of investments | Investment | 2 |
Estimated Fair Value [Abstract] | |
Less than 12 months of temporary impairment | $ 994 |
More than 12 months of temporary impairment | 4,970 |
Total temporary impairment | 5,964 |
Unrealized Losses [Abstract] | |
Less than 12 months of temporary impairment | (12) |
More than 12 months of temporary impairment | (64) |
Total temporary impairment | $ (76) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | |||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | $ 1,701,033 | $ 1,248,124 | ||||
Equity securities | $ 47,628 | $ 50,527 | ||||
0.125% Notes [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Interest rate on convertible senior notes | 0.125% | 0.125% | 0.125% | |||
0% Notes [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Interest rate on convertible senior notes | 0% | 0% | 0% | |||
Publicly Traded Equity Securities [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Equity securities | $ 7,256 | $ 18,205 | ||||
Significant Other Observable Inputs (Level 2) [Member] | 0.125% Notes [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Fair value of convertible notes | 498,700 | |||||
Significant Other Observable Inputs (Level 2) [Member] | 0% Notes [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Fair value of convertible notes | 631,800 | |||||
Recurring Basis [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Cash equivalents | [1] | 231,960 | 541,199 | |||
Total | 1,940,249 | 1,807,528 | ||||
Recurring Basis [Member] | Corporate Debt Securities [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | 728,054 | [2] | 764,059 | [3] | ||
Recurring Basis [Member] | Corporate Debt Securities [Member] | Cash and Cash Equivalents [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | 23,500 | |||||
Recurring Basis [Member] | Debt Securities Issued by U.S. Government Agencies [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | 130,767 | [2] | 120,868 | [3] | ||
Recurring Basis [Member] | Debt Securities Issued by the U.S. Treasury [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | [3] | 750,933 | 182,634 | |||
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 | 85,315 | [4] | 174,464 | [5] | ||
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 | 10,000 | 2,300 | ||||
Recurring Basis [Member] | Other Municipal Debt Securities [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | [3] | 5,964 | 6,099 | |||
Recurring Basis [Member] | Publicly Traded Equity Securities [Member] | Other Current Assets [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Equity securities | 7,256 | 18,205 | ||||
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Cash equivalents | 231,960 | 541,199 | ||||
Total | 990,149 | 727,708 | ||||
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 | 750,933 | 182,634 | ||||
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] | Quoted Prices in Active Markets (Level 1) [Member] | Other Municipal Debt Securities [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | 0 | 0 | ||||
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | Publicly Traded Equity Securities [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Equity securities | 7,256 | 3,875 | ||||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Cash equivalents | 0 | 0 | ||||
Total | 950,100 | 1,065,490 | ||||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate Debt Securities [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | 728,054 | 764,059 | ||||
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 | 130,767 | 120,868 | ||||
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 | 85,315 | 174,464 | ||||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other Municipal Debt Securities [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | 5,964 | 6,099 | ||||
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Publicly Traded Equity Securities [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Equity securities | 0 | 0 | ||||
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Cash equivalents | 0 | 0 | ||||
Total | 0 | 14,330 | ||||
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Corporate Debt Securities [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | 0 | 0 | ||||
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Debt Securities Issued by U.S. Government Agencies [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | 0 | 0 | ||||
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Debt Securities Issued by the U.S. Treasury [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | 0 | 0 | ||||
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [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 Unobservable Inputs (Level 3) [Member] | Other Municipal Debt Securities [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Available-for-sale securities | 0 | 0 | ||||
Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Publicly Traded Equity Securities [Member] | ||||||
Fair Value Measurements [Abstract] | ||||||
Equity securities | $ 0 | $ 14,330 | ||||
[1]Included in cash and cash equivalents in our condensed consolidated balance sheet.[2]$23.5 million was included in cash and cash equivalents in our condensed consolidated balance sheet, with the difference included in short-term investments in our condensed consolidated balance sheet.[3]Included in short-term investments.[4]$10.0 million was included in cash and cash equivalents in our condensed consolidated balance sheet, with the difference included in short-term investments in our condensed consolidated balance sheet.[5]$2.3 million was included in cash and cash equivalents in our condensed consolidated balance sheet, with the difference included in short-term investments in our condensed consolidated balance sheet. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Taxes [Abstract] | ||||
Amortization period for research and development expenditures under IRC Section 174 | 5 years | |||
Income tax expense (benefit) | $ 283 | $ (1,307) | $ 3,637 | $ (854) |
Collaborative Arrangements an_3
Collaborative Arrangements and Licensing Agreements, Biogen (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) Payment Target | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Revenue | $ 159,767 | $ 133,093 | $ 435,478 | $ 370,450 | |
SPINRAZA Royalties [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Revenue | 61,647 | 66,572 | 175,092 | 198,726 | |
R&D Revenue [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Revenue | 87,357 | 48,273 | 212,599 | 115,321 | |
Biogen Collaborations [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Cumulative payments received | 3,400,000 | 3,400,000 | |||
Revenue | 89,000 | $ 84,000 | 259,700 | $ 262,100 | |
Deferred revenue | $ 360,200 | $ 360,200 | $ 407,500 | ||
Biogen Collaborations [Member] | Revenue [Member] | Strategic Partner [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Concentration percentage | 56% | 63% | 60% | 71% | |
Biogen Collaborations [Member] | SPINRAZA Royalties [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Revenue | $ 61,600 | $ 66,600 | $ 175,100 | $ 198,700 | |
Biogen Collaborations [Member] | R&D Revenue [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Revenue | 27,400 | $ 17,400 | 84,600 | $ 63,400 | |
Neurology Collaborations with Biogen [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Revenue | $ 13,000 | ||||
Number of targets advanced | Target | 2 | ||||
Number of milestone payments recognized in full | Payment | 1 | ||||
2013 Strategic Neurology Collaboration with Biogen [Member] | Maximum [Member] | |||||
Collaborative Arrangement and Licensing Agreement [Abstract] | |||||
Next prospective payment | $ 10,000 | $ 10,000 |
Collaborative Arrangements an_4
Collaborative Arrangements and Licensing Agreements, Roche (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 USD ($) Indication Agreement | Jun. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) Indication Agreement | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Revenue | $ 159,767 | $ 133,093 | $ 435,478 | $ 370,450 | ||
R&D Revenue [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Revenue | $ 87,357 | $ 48,273 | $ 212,599 | $ 115,321 | ||
Roche Collaborations [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Number of collaboration agreements | Agreement | 2 | 2 | ||||
Cumulative payments received | $ 283,000 | $ 283,000 | ||||
Deferred revenue | $ 23,600 | $ 23,600 | $ 31,600 | |||
Roche Collaborations [Member] | Revenue [Member] | Strategic Partner [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Concentration percentage | 26% | 3% | 15% | 3% | ||
Roche Collaborations [Member] | R&D Revenue [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Revenue | $ 41,500 | $ 3,900 | $ 65,400 | $ 11,400 | ||
Collaboration to Develop IONIS-FB-L with Roche [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Number of collaboration agreements | Agreement | 1 | 1 | ||||
Number of disease indications | Indication | 2 | 2 | ||||
Maximum amount of payments receivable for development milestones | $ 145,000 | $ 145,000 | ||||
Maximum amount of payments receivable for regulatory milestones | 279,000 | 279,000 | ||||
Maximum amount of payments receivable for sales-related milestones | 280,000 | $ 280,000 | ||||
Revenue | 35,000 | $ 13,800 | ||||
Collaboration to Develop IONIS-FB-L with Roche [Member] | Maximum [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Royalty percentage received on net sales of medicine | 20% | |||||
Next prospective milestone | $ 90,000 | $ 90,000 | ||||
Collaboration to Develop IONIS-FB-L with Roche [Member] | GA [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Number of disease indications | Indication | 1 | 1 | ||||
Collaboration to Develop IONIS-FB-L with Roche [Member] | IgAN [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Number of disease indications | Indication | 1 | 1 | ||||
Collaboration to Develop Treatments for Huntington's Disease with Roche [Member] | ||||||
Collaborative Arrangement and Licensing Agreement [Abstract] | ||||||
Number of collaboration agreements | Agreement | 1 | 1 |
Collaborative Arrangements an_5
Collaborative Arrangements and Licensing Agreements, Bayer (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Bayer Collaboration [Member] | |
Collaborative Arrangement and Licensing Agreement [Abstract] | |
Cumulative payments received | $ 190 |
Convertible Debt (Details)
Convertible Debt (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Nov. 30, 2021 | Apr. 30, 2021 | Dec. 31, 2019 | Jun. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Convertible Debt [Abstract] | |||||||
Repurchase of convertible notes | $ 0 | $ 256,963 | |||||
Cost of call spread | $ 46,900 | $ 52,600 | |||||
Purchase of note hedges | 136,700 | 108,700 | 0 | 136,620 | |||
Proceeds from issuance of warrants | 89,800 | $ 56,100 | 0 | 89,752 | |||
Loss on early retirement of debt | 0 | $ (8,627) | |||||
0% Notes [Member] | |||||||
Convertible Debt [Abstract] | |||||||
Face amount of offering | 632,500 | ||||||
Outstanding principal balance | 632,500 | ||||||
Unamortized debt issuance costs | $ 11,000 | ||||||
Maturity date | Apr. 30, 2026 | ||||||
Interest rate | 0% | 0% | 0% | ||||
Effective interest rate | 0.50% | ||||||
Conversion price per share (in dollars per share) | $ 57.84 | ||||||
Effective conversion price per share with call spread (in dollars per share) | $ 76.39 | ||||||
Total shares of common stock subject to conversion (in shares) | 10.9 | ||||||
Percentage of principal amount used as purchase price upon occurrence of fundamental change | 100% | ||||||
0.125% Notes [Member] | |||||||
Convertible Debt [Abstract] | |||||||
Outstanding principal balance | $ 548,800 | ||||||
Unamortized debt issuance costs | $ 4,900 | ||||||
Maturity date | Dec. 31, 2024 | ||||||
Interest rate | 0.125% | 0.125% | 0.125% | ||||
Effective interest rate | 0.50% | ||||||
Conversion price per share (in dollars per share) | $ 83.28 | ||||||
Effective conversion price per share with call spread (in dollars per share) | $ 123.38 | ||||||
Total shares of common stock subject to conversion (in shares) | 6.6 | ||||||
Percentage of principal amount used as purchase price upon occurrence of fundamental change | 100% | ||||||
1% Notes [Member] | |||||||
Convertible Debt [Abstract] | |||||||
Principal amount repurchased | 247,900 | $ 247,900 | |||||
Repurchase of convertible notes | $ 62,000 | $ 257,000 | |||||
Interest rate | 1% | 1% | |||||
Loss on early retirement of debt | $ 8,600 |
Legal Proceedings (Details)
Legal Proceedings (Details) - John Makris, et al. v. Ionis Pharmaceuticals, Inc., et al. [Member] $ in Millions | 3 Months Ended | |||
Jun. 03, 2022 USD ($) | Aug. 05, 2021 Plaintiff | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | |
Legal Procedings [Abstract] | ||||
Number of plaintiffs | Plaintiff | 4 | |||
Settlement agreement | $ 12.5 | |||
Contribution to settlement agreement by insurance carrier | $ 4.8 | |||
Other Expense [Member] | ||||
Legal Procedings [Abstract] | ||||
Litigation settlement expense | $ 12.5 |