0000874015-20-000142 | 10-Q | XBRL Viewer | Ionis Pharmaceuticals INC

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2020	Oct. 29, 2020
Cover page.
Entity Registrant Name	Ionis Pharmaceuticals, Inc.
Entity Central Index Key	0000874015
Current Fiscal Year End Date	--12-31
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Document Transition Report	false
Entity File Number	000-19125
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		139,823,135

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 633,059	$ 683,287
Short-term investments	1,696,145	1,816,257
Contracts receivable	38,977	63,034
Inventories	22,172	18,180
Other current assets	146,628	139,839
Total current assets	2,536,981	2,720,597
Property, plant and equipment, net	181,518	153,651
Patents, net	28,274	25,674
Long-term deferred tax assets	307,737	305,557
Deposits and other assets	41,191	27,633
Total assets	3,095,701	3,233,112
Current liabilities:
Accounts payable	16,222	16,067
Accrued compensation	28,390	37,357
Accrued liabilities	80,750	66,769
Income taxes payable	8,929	32,514
Current portion of long-term obligations and other current liabilities	5,849	2,026
Current portion of deferred contract revenue	104,431	118,272
Total current liabilities	244,571	273,005
Long-term deferred contract revenue	429,931	490,060
Long-term obligations, less current portion	15,884	15,543
Long-term mortgage debt	59,966	59,913
Total liabilities	1,489,317	1,548,565
Stockholders' equity:
Common stock, $0.001 par value; 300,000,000 shares authorized, 139,793,901 and 140,339,615 shares issued and outstanding at September 30, 2020 (unaudited) and December 31, 2019, respectively	140	140
Additional paid-in capital	2,311,679	2,203,778
Accumulated other comprehensive loss	(19,572)	(25,290)
Accumulated deficit	(909,098)	(707,534)
Total Ionis stockholders' equity	1,383,149	1,471,094
Noncontrolling interest in Akcea Therapeutics, Inc.	223,235	213,453
Total stockholders' equity	1,606,384	1,684,547
Total liabilities and stockholders' equity	3,095,701	3,233,112
0.125 Percent Convertible Senior Notes [Member]
Current liabilities:
Convertible senior notes	450,386	434,711
1 Percent Convertible Senior Notes [Member]
Current liabilities:
Convertible senior notes	$ 288,579	$ 275,333

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2020	Dec. 31, 2019
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)	139,793,901	140,339,615
Common stock, shares outstanding (in shares)	139,793,901	140,339,615
0.125 Percent Convertible Senior Notes [Member]
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest rate on convertible senior notes	0.125%	0.125%
1 Percent Convertible Senior Notes [Member]
LIABILITIES AND STOCKHOLDERS' EQUITY
Interest rate on convertible senior notes	1.00%	1.00%

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Revenue:
Revenue	$ 160,079	$ 167,892	$ 438,983	$ 628,918
Expenses:
Cost of products sold	3,086	967	8,646	3,373
Research, development and patent	125,083	104,366	364,298	316,948
Selling, general and administrative	68,447	60,036	215,455	203,368
Total operating expenses	196,616	165,369	588,399	523,689
Income (loss) from operations	(36,537)	2,523	(149,416)	105,229
Other income (expense):
Investment income	6,454	13,136	25,913	39,015
Interest expense	(11,321)	(12,002)	(33,484)	(35,404)
Gain on investments	835	0	10,722	0
Other income (expenses)	126	(140)	(122)	(332)
Income (loss) before income tax (expense) benefit	(40,443)	3,517	(146,387)	108,508
Income tax (expense) benefit	(2,648)	14,915	1,047	(9,204)
Net income (loss)	(43,091)	18,432	(145,340)	99,304
Net loss attributable to noncontrolling interest in Akcea Therapeutics, Inc.	12,147	7,731	34,325	10,426
Net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders	$ (30,944)	$ 26,163	$ (111,015)	$ 109,730
Basic net income (loss) per share (in dollars per share)	$ (0.22)	$ 0.19	$ (0.80)	$ 0.81
Shares used in computing basic net income (loss) per share (in shares)	139,708	140,551	139,497	139,800
Diluted net income (loss) per share (in dollars per share)	$ (0.22)	$ 0.18	$ (0.80)	$ 0.79
Shares used in computing diluted net income (loss) per share (in shares)	139,708	143,408	139,497	142,821
Commercial Revenue [Member]
Revenue:
Revenue	$ 95,340	$ 95,699	$ 269,035	$ 252,085
SPINRAZA Royalties [Member]
Revenue:
Revenue	74,171	81,672	211,925	211,884
Product Sales, Net [Member]
Revenue:
Revenue	19,040	11,945	50,562	28,563
Licensing and Other Royalty Revenue [Member]
Revenue:
Revenue	2,129	2,082	6,548	11,638
Research and Development Revenue Under Collaborative Agreements [Member]
Revenue:
Revenue	$ 64,739	$ 72,193	$ 169,948	$ 376,833

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) [Abstract]
Net income (loss)	$ (43,091)	$ 18,432	$ (145,340)	$ 99,304
Unrealized gains (losses) on debt securities, net of tax	(3,448)	(1,110)	5,803	6,666
Currency translation adjustment	275	(13)	357	(25)
Comprehensive income (loss)	(46,264)	17,309	(139,180)	105,945
Comprehensive loss attributable to noncontrolling interests	(12,188)	(7,731)	(33,883)	(10,423)
Comprehensive income (loss) attributable to Ionis Pharmaceuticals, Inc. stockholders	$ (34,076)	$ 25,040	$ (105,297)	$ 116,368

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income (loss) and other comprehensive income (loss), attributable to noncontrolling interests. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners.

+ References + Details

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

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+ Details

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid In Capital [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]	Total Ionis Stockholders' Equity [Member]	Noncontrolling Interest in Akcea Therapeutics, Inc. [Member]	Total
Balance at Dec. 31, 2018	$ 138	$ 2,047,250	$ (32,016)	$ (967,293)	$ 1,048,079	$ 139,081	$ 1,187,160
Balance (in shares) at Dec. 31, 2018	137,929
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ 0	0	0	109,730	109,730	0	109,730
Change in unrealized gains (losses), net of tax	0	0	6,666	0	6,666	0	6,666
Foreign currency translation	0	0	(25)	0	(25)	0	(25)
Issuance of common stock in connection with employee stock plans	$ 3	112,132	0	0	112,135	0	112,135
Issuance of common stock in connection with employee stock plans (in shares)	2,855
Stock-based compensation expense	$ 0	111,564	0	0	111,564	0	111,564
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options	$ 0	(18,841)	0	0	(18,841)	0	(18,841)
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options (in shares)	(147)
Noncontrolling interest in Akcea Therapeutics, Inc.	$ 0	(33,015)	0	0	(33,015)	22,592	(10,423)
Balance at Sep. 30, 2019	$ 141	2,219,090	(25,375)	(857,563)	1,336,293	161,673	1,497,966
Balance (in shares) at Sep. 30, 2019	140,637
Balance at Jun. 30, 2019	$ 140	2,177,222	(24,252)	(883,726)	1,269,384	187,818	1,457,202
Balance (in shares) at Jun. 30, 2019	140,393
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ 0	0	0	26,163	26,163	0	26,163
Change in unrealized gains (losses), net of tax	0	0	(1,110)	0	(1,110)	0	(1,110)
Foreign currency translation	0	0	(13)	0	(13)	0	(13)
Issuance of common stock in connection with employee stock plans	$ 1	10,130	0	0	10,131	0	10,131
Issuance of common stock in connection with employee stock plans (in shares)	255
Stock-based compensation expense	$ 0	24,126	0	0	24,126	0	24,126
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options	$ 0	(10,804)	0	0	(10,804)	0	(10,804)
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options (in shares)	(11)
Noncontrolling interest in Akcea Therapeutics, Inc.	$ 0	18,416	0	0	18,416	(26,145)	(7,729)
Balance at Sep. 30, 2019	$ 141	2,219,090	(25,375)	(857,563)	1,336,293	161,673	1,497,966
Balance (in shares) at Sep. 30, 2019	140,637
Balance at Dec. 31, 2019	$ 140	2,203,778	(25,290)	(707,534)	1,471,094	213,453	1,684,547
Balance (in shares) at Dec. 31, 2019	140,340
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ 0	0	0	(111,015)	(111,015)	0	(111,015)
Change in unrealized gains (losses), net of tax	0	0	5,803	0	5,803	0	5,803
Foreign currency translation	0	0	357	0	357	0	357
Issuance of common stock in connection with employee stock plans	$ 1	29,449	0	0	29,450	0	29,450
Issuance of common stock in connection with employee stock plans (in shares)	1,141
Repurchases and retirements of common stock	$ (1)	0	0	(90,549)	(90,550)	0	(90,550)
Repurchases and retirements of common stock (in shares)	(1,478)
Stock-based compensation expense	$ 0	135,077	0	0	135,077	0	135,077
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options	$ 0	(12,960)	0	0	(12,960)	0	(12,960)
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options (in shares)	(209)
Noncontrolling interest in Akcea Therapeutics, Inc.	$ 0	(43,665)	(442)	0	(44,107)	9,782	(34,325)
Balance at Sep. 30, 2020	$ 140	2,311,679	(19,572)	(909,098)	1,383,149	223,235	1,606,384
Balance (in shares) at Sep. 30, 2020	139,794
Balance at Jun. 30, 2020	$ 139	2,271,630	(16,440)	(878,154)	1,377,175	217,620	1,594,795
Balance (in shares) at Jun. 30, 2020	139,489
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	$ 0	0	0	(30,944)	(30,944)	0	(30,944)
Change in unrealized gains (losses), net of tax	0	0	(3,448)	0	(3,448)	0	(3,448)
Foreign currency translation	0	0	275	0	275	0	275
Issuance of common stock in connection with employee stock plans	$ 1	12,997	0	0	12,998	0	12,998
Issuance of common stock in connection with employee stock plans (in shares)	321
Stock-based compensation expense	$ 0	45,845	0	0	45,845	0	45,845
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options	$ 0	(990)	0	0	(990)	0	(990)
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options (in shares)	(16)
Noncontrolling interest in Akcea Therapeutics, Inc.	$ 0	(17,803)	41	0	(17,762)	5,615	(12,147)
Balance at Sep. 30, 2020	$ 140	$ 2,311,679	$ (19,572)	$ (909,098)	$ 1,383,149	$ 223,235	$ 1,606,384
Balance (in shares) at Sep. 30, 2020	139,794

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Operating activities:
Net income (loss)	$ (43,091)		$ 18,432	$ (145,340)	$ 99,304
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation				9,713	9,345
Amortization of right-of-use operating lease assets				1,356	1,433
Amortization of patents				1,526	1,139
Amortization of premium (discount) on investments, net				7,812	(7,064)
Amortization of debt issuance costs				1,884	1,448
Amortization of convertible senior notes discount				26,912	26,747
Stock-based compensation expense				135,077	111,564
Gain on investments	(835)		0	(10,722)	0
Non-cash losses related to patents, licensing and property, plant and equipment and investments				616	216
Provision for deferred income taxes				(3,475)	4,103
Changes in operating assets and liabilities:
Contracts receivable				24,057	(33,716)
Inventories				(1,468)	(6,606)
Other current and long-term assets				(5,647)	(23,377)
Income taxes				(23,674)	0
Accounts payable				(10,970)	(18,764)
Accrued compensation				(8,967)	(4,864)
Other current liabilities				13,195	3,909
Deferred contract revenue				(73,970)	(97,029)
Net cash provided by (used in) operating activities				(62,085)	67,788
Investing activities:
Purchases of short-term investments				(1,376,631)	(1,617,726)
Proceeds from sale of short-term investments				1,497,433	1,465,600
Purchases of property, plant and equipment				(29,971)	(23,143)
Acquisition of licenses and other assets, net				(4,203)	(4,196)
Net cash used in investing activities				86,628	(179,465)
Financing activities:
Proceeds from issuance of equity, net				29,450	112,137
Payments of tax withholdings related to vesting of employee stock awards and exercise of employee stock options				(12,960)	(18,841)
Repurchases and retirements of common stock		$ (90,600)		(90,548)	0	$ (34,400)
Payments of transaction costs for Akcea acquisition				(1,071)	0
Principal payments on debt obligations				0	(12,500)
Net cash provided by (used in) financing activities				(75,129)	80,796
Effect of exchange rates on cash				358	0
Net decrease in cash and cash equivalents				(50,228)	(30,881)
Cash and cash equivalents at beginning of period		$ 683,287		683,287	278,820	278,820
Cash and cash equivalents at end of period	$ 633,059		$ 247,939	633,059	247,939	$ 683,287
Supplemental disclosures of cash flow information:
Interest paid				3,700	5,474
Income taxes paid				23,532	9,037
Supplemental disclosures of non-cash investing and financing activities:
Right-of-use assets obtained in exchange for lease liabilities				0	14,178
Amounts accrued for capital and patent expenditures				6,576	3,251
Accrued amounts for Akcea acquisition transaction costs				$ 8,103	$ 0

Basis of Presentation	9 Months Ended
Basis of Presentation	Sep. 30, 2020
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, 2020 and 2019 on the same basis as the audited financial statements for the year ended December 31, 2019. 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, 2019 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC. In the condensed consolidated financial statements, we included the accounts of Ionis Pharmaceuticals, Inc. and the consolidated results of our subsidiary, Akcea Therapeutics, Inc. and its wholly owned subsidiaries. We formed Akcea in December 2014. In July 2017, Akcea completed an initial public offering, or IPO. Prior to Akcea’s IPO in July 2017, we owned 100 percent of Akcea. At September 30, 2020, our ownership of Akcea was approximately 76 percent. We reflect changes in our ownership percentage in our financial statements as an adjustment to noncontrolling interest in the period the change occurs. In October 2020, we acquired the shares of Akcea’s common stock we did not own. We will refer to this transaction as the Akcea Acquisition throughout the remainder of this document. We will reflect the impact of the Akcea Acquisition in our financial statements in the fourth quarter of 2020. Unless the context requires otherwise, “Ionis”, “Company,” “we,” “our,” and “us” refers to Ionis Pharmaceuticals, Inc. and its subsidiary Akcea Therapeutics, Inc. and its wholly owned subsidiaries.

Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

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 in deferred revenue on our condensed consolidated balance sheet.

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 will also recognize as commercial revenue sales milestone payments and royalties we earn in the future under our partnerships.

Commercial Revenue: Product sales, net

We added product sales from TEGSEDI to our commercial revenue in the fourth quarter of 2018 and we added product sales from WAYLIVRA to our commercial revenue in the third quarter of 2019. In the U.S., we distribute TEGSEDI through an exclusive distribution agreement with a third-party logistics company, or 3PL, that takes title to TEGSEDI. The 3PL is our sole customer in the U.S. The 3PL then distributes TEGSEDI to a specialty pharmacy and a specialty distributor, which we collectively refer to as wholesalers, who then distribute TEGSEDI to health care providers and patients. In Europe, we sell TEGSEDI and WAYLIVRA to hospitals and pharmacies using 3PLs as distributors.

Research and development revenue under collaborative agreements

We often 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.

In Note 6, Collaborative Arrangements and Licensing Agreements, we have included our collaborations with substantive changes during the first nine months of 2020 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, 2019.

Steps to Recognize Revenue

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:

Identify the contract

First, we determine if we have a contract with our partner, including confirming that we have met each of the following criteria:

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We and our partner approved the contract and we are both committed to perform our obligations;

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We have identified our rights, our partner’s rights and the payment terms;

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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

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We believe collectability of the consideration is probable.

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. We typically have only one performance obligation at the inception of a contract, which is to perform R&D services.

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. 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.

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 are usually based on scientific progress. For example, in the third quarter of 2020, we earned $18 million in milestone payments from Biogen when Biogen initiated a Phase 1/2 trial for ION464, our medicine in development targeting alpha-synuclein to treat patients with multiple system atrophy. We did not consider the milestone payments probable until Biogen achieved the milestone events because advancing ION464 was contingent and was not within our control. We recognized the milestone payments in full in the period the milestone events were achieved because we did not have any remaining performance obligations related to the milestone payments.

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:

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Estimated future product sales;

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Estimated royalties we may receive from future product sales;

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Estimated contractual milestone payments we may receive;

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Expenses we expect to incur;

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Income taxes; and

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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:

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The number of internal hours we estimate we will spend performing these services;

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The estimated cost of work we will perform;

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The estimated cost of work that we will contract with third parties to perform; and

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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.

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. For example, in the third quarter of 2019, we updated our estimate of the total effort we expected to expend to satisfy our performance obligation under our 2013 Strategic Neurology collaboration with Biogen. As of September 30, 2019, we had completed a significant portion of the research and development services. In this example, we expected to complete the remainder of our services in 2020. As a result of our change in estimate, in the third quarter of 2019, we recorded a cumulative catch up adjustment of $16.5 million to decrease revenue. Refer to Note 6, Collaborative Arrangements and Licensing Agreements, in our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 for further discussion of the cumulative catch up adjustment we made in 2019.

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: Product sales, net

We recognize product sales in the period when our customer obtains control of our products, which occurs at a point in time upon transfer of title to the customer. We classify payments to customers or other parties in the distribution channel for services that are distinct and priced at fair value as selling, general and administrative, or SG&A, expenses in our condensed consolidated statements of operations. Otherwise, payments to customers or other parties in the distribution channel that do not meet those criteria are classified as a reduction of revenue, as discussed further below. We exclude from revenues taxes collected from customers relating to product sales and remitted to governmental authorities.

Reserves for Product sales

We record product sales at our net sales price, or transaction price. We include in our transaction price estimated reserves for discounts, returns, chargebacks, rebates, co-pay assistance and other allowances that we offer within contracts between us and our customers, wholesalers, health care providers and other indirect customers. We estimate our reserves using the amounts we have earned or what we can claim on the associated sales. We classify our reserves as a reduction of accounts receivable when we are not required to make a payment or as a current liability when we are required to make a payment. In certain cases, our estimates include a range of possible outcomes that are probability weighted for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, our reserves reflect our best estimates under the terms of our respective contracts. When calculating our reserves and related product sales, we only recognize amounts to the extent that we consider it probable that we would not have to reverse in a future period a significant amount of the cumulative sales we previously recognized. The actual amounts we receive may ultimately differ from our reserve estimates. If actual amounts in the future vary from our estimates, we will adjust these estimates, which would affect our net product sales in the respective period.

The following are the components of variable consideration related to product sales:

Chargebacks: In the U.S., we estimate obligations resulting from contractual commitments with the government and other entities to sell products to qualified healthcare providers at prices lower than the list prices charged to our U.S. customer. Our U.S. customer charges us for the difference between what it pays for the product and the selling price to the qualified healthcare providers. We also estimate the amount of chargebacks related to our estimated product remaining in the distribution channel at the end of the reporting period that we expect our customer to sell to healthcare providers in future periods. We record these reserves as a reduction to contracts receivables on our condensed consolidated balance sheet.

Government rebates: We are subject to discount obligations under government programs, including Medicaid and Medicare programs in the U.S. and we record reserves for government rebates based on statutory discount rates and estimated utilization. We estimate Medicaid and Medicare rebates based on a range of possible outcomes that are probability weighted for the estimated payer mix. We record these reserves as an accrued liability on our condensed consolidated balance sheet with a corresponding offset reducing our product sales in the same period we recognize the related sale. For Medicare, we also estimate the number of patients in the prescription drug coverage gap for whom we will owe an additional liability under the Medicare Part D program. On a quarterly basis, we update our estimates and record any adjustments in the period that we identify the adjustments.

Managed care rebates: We are subject to rebates in connection with agreements with certain contracted commercial payers. We record these rebates as an accrual on our condensed consolidated balance sheet in the same period we recognize the related revenue. We estimate our managed care rebates based on our estimated payer mix and the applicable contractual rebate rate.

Trade discounts: We provide customary invoice discounts on product sales to our U.S. customer for prompt payment. We record this discount as a reduction of product sales in the period in which we recognize the related product revenue.

Distribution services: We receive and pay for various distribution services from our U.S. and European customers and wholesalers in the U.S-. We classify the costs for services we receive that are either not distinct from the sale of the product or for which we cannot reasonably estimate the fair value as a reduction of product sales. To the extent that the services we receive are distinct from the sale of the product, we classify the costs for such services as SG&A expenses.

Product returns: Our U.S. customer has return rights and the wholesalers have limited return rights primarily related to the product’s expiration date. We estimate the amount of product sales that our customer may return. We record our return estimate as an accrued refund liability on our condensed consolidated balance sheet with a corresponding offset reducing our product sales in the same period we recognize the related sale. Based on our distribution model for product sales, contractual inventory limits with our customer and wholesalers and the price of the product, we have had minimal returns to date and we believe we will continue to have minimal returns in the U.S. Our European customers generally only take title to the product after they receive an order and therefore they do not maintain excess inventory levels of our products. Accordingly, we have limited return risk in Europe and we do not estimate returns in Europe.

Other incentives: In the U.S., we estimate reserves for other incentives including co-payment assistance we provide to patients with commercial insurance who have coverage and reside in states that allow co-payment assistance. We record a reserve for the amount we estimate we will pay for co-payment assistance. We base our reserve on the number of estimated claims and our estimate of the cost per claim related to product sales that we have recognized as revenue. We record our other incentive reserve estimates as an accrued liability on our condensed consolidated balance sheet with a corresponding offset reducing our product sales in the same period we recognize the related sale.

Research and development revenue under collaboration agreements:

Upfront payments

When we enter into a collaboration agreement with 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 for the treatment of complement-mediated diseases, we received a $75 million upfront payment in the fourth quarter of 2018. We allocated the upfront payment to our single performance obligation, R&D services. We are amortizing the $75 million upfront payment using an input method over the estimated period of time we are providing R&D services.

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 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 third quarter of 2020, we achieved a $12 million milestone payment from Biogen when we advanced IONIS-MAPT_Rxunder our 2012 neurology collaboration. We added this payment to the transaction price and allocated it to our R&D services performance obligation for IONIS-MAPT_Rx. We are recognizing revenue related to this milestone payment over our estimated period of performance.

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 2020, we recognized $18 million in milestone payments when Biogen initiated a Phase 1/2 trial for ION464, our medicine in development targeting alpha-synuclein to treat patients with multiple system atrophy. We concluded that the milestone payments were not related to our R&D services performance obligation. Therefore, we recognized the milestone payments in full in the third quarter of 2020.

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 second quarter of 2020, we earned a $13 million license fee from AstraZeneca when AstraZeneca licensed ION736, a medicine in development targeting FOXP3 to treat cancer.

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 second quarter of 2019, we earned a $20 million sublicense fee when Alnylam Pharmaceuticals sublicensed our technology to Regeneron Pharmaceuticals.

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:

If the additional goods and/or services are distinct from the other performance obligations in the original agreement; and

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.

For example, in May 2015, we entered into an exclusive license agreement with Bayer to develop and commercialize IONIS-FXI_Rx for the prevention of thrombosis. As part of the agreement, Bayer paid us a $100 million upfront payment. At the onset of the agreement, we were responsible for completing a Phase 2 study of IONIS-FXI_Rx in people with end-stage renal disease on hemodialysis and for providing an initial supply of API. In February 2017, we amended our agreement with Bayer to advance IONIS-FXI_Rx and to initiate development of IONIS-FXI-L_Rx, which Bayer licensed. As part of the 2017 amendment, Bayer paid us $75 million. We are also eligible to receive milestone payments and tiered royalties on gross margins of IONIS-FXI_Rx and IONIS-FXI-L_Rx. Under the 2017 amendment, we concluded we had a new agreement with three performance obligations. These performance obligations were to deliver the license of IONIS-FXI-L_Rx, to provide R&D services and to deliver API. We allocated the $75 million transaction price to these performance obligations. Refer to Note 6, Collaborative Arrangements and Licensing Agreements, in our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019 for further discussion of the Bayer collaboration.

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:

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Whether the agreements were negotiated together with a single objective;

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Whether the amount of consideration in one contract depends on the price or performance of the other agreement; or

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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, or SPA. 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.

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.

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 three months ended September 30, 2020 and 2019, we recognized $22.5 million and $30.3 million of revenue from amounts that were in our beginning deferred revenue balance for each respective period. During the nine months ended September 30, 2020 and 2019, we recognized $84.1 million and $103.5 million of revenue from amounts that were in our beginning deferred revenue balance for each respective period. For further discussion, refer to our revenue recognition policy above.

Cost of Products Sold

Our cost of products sold includes 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 products sold. Prior to obtaining regulatory approval of TEGSEDI in July 2018 and WAYLIVRA in May 2019, we expensed as research and development expenses a significant portion of the costs we incurred to produce the initial commercial launch supply for each medicine.

Noncontrolling Interest in Akcea Therapeutics, Inc.

Prior to Akcea’s IPO in July 2017, we owned 100 percent of Akcea. At September 30, 2020, our ownership of Akcea was approximately 76 percent. We reflect changes in our ownership percentage in our financial statements as an adjustment to noncontrolling interest in the period the change occurs. In October 2020, we completed the Akcea Acquisition. We will reflect the impact of the Akcea Acquisition in our financial statements in the fourth quarter of 2020.

Prior to the Akcea Acquisition, the shares third parties owned represented an interest in Akcea’s equity that we did not control. However, as we maintained overall control of Akcea through our voting interest, we reflected the assets, liabilities and results of operations of Akcea in our condensed consolidated financial statements. Through September 30, 2020 and through the closing of the Akcea Acquisition, we reflected the noncontrolling interest attributable to other owners of Akcea’s common stock on a separate line on our statement of operations and a separate line within stockholders’ equity in our condensed consolidated balance sheet. In addition, through September 30, 2020 and through the closing of the Akcea Acquisition, we recorded a noncontrolling interest adjustment to account for the stock options Akcea granted, which if exercised, would have diluted our ownership in Akcea. This adjustment was a reclassification within stockholders’ equity from additional paid-in capital to noncontrolling interest in Akcea equal to the amount of stock-based compensation expense Akcea had recognized.

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. 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, 2020, we held equity investments in two publicly held companies, ProQR Therapeutics N.V., or ProQR, and Antisense Therapeutics Limited, or ATL. We also held equity investments in five privately held companies, Atlantic Pharmaceuticals Limited, Dynacure SAS, Empirico, Inc., Seventh Sense Biosystems and Suzhou Ribo Life Science Co, Ltd.

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 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. For example, during the second quarter of 2020, we revalued our investments in two privately held companies, Dynacure and Ribo because the companies sold additional equity securities that were similar to those we own. These observable price changes resulted in us recognizing a $6.3 million gain on our investment in Dynacure and a $3 million gain on our investment in Ribo in our condensed consolidated statement of operations during the second quarter of 2020.

Inventory Valuation

We reflect our inventory on our condensed consolidated balance sheet at the lower of cost or market 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.

We obtained the first regulatory approval for TEGSEDI in July 2018 and for WAYLIVRA in May 2019. At September 30, 2020, our physical inventory for TEGSEDI and WAYLIVRA included API that we produced prior to when we obtained regulatory approval. As such, this API has no cost basis as we had previously expensed the costs as R&D expenses.

We review our inventory periodically and reduce the carrying value of items we consider to be slow moving or obsolete to their estimated net realizable value based on forecasted demand compared to quantities on hand. We consider several factors in estimating the net realizable value, including shelf life of our inventory, alternative uses for our medicines in development and historical write-offs. We did not record any material inventory write-offs for the nine months ended September 30, 2020. Total inventory was $22.2 million and $18.2 million as of September 30, 2020 and December 31, 2019, respectively, and consisted of the following (in thousands):

	September 30, 2020		December 31, 2019
Raw materials:
Raw materials- clinical	$	9,294	$	9,363
Raw materials- commercial		8,582		6,520
Total raw materials		17,876		15,883
Work in process		3,346		2,039
Finished goods		950		258
Total inventory	$	22,172	$	18,180

Leases

We determine if an arrangement contains a lease at inception. We currently only have 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 determined the lease term at the inception of the 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.

As our current leases do not provide an interest rate implicit in the lease, we used our incremental borrowing rate, based on the information available on the date we adopted Topic 842 (January 2019) or as of the lease inception 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.

Research, Development and Patent 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.

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. We review our capitalized patent costs regularly to ensure that they include costs for patents and patent applications that have future value. When we identify patents and patent applications that we are not actively pursuing, we write off any associated costs.

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.

Long-lived Assets

We evaluate long-lived assets, which include property, plant and equipment 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

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Basic and Diluted Net Income (Loss) Per Share

Basic net income (loss) per share

We compute basic net income (loss) per share by dividing the total net income (loss) attributable to our common stockholders by our weighted-average number of common shares outstanding during the period.

The calculation of total net income (loss) attributable to our common stockholders for the three and nine months ended September 30, 2020 and 2019 considered our net income (loss) for Ionis on a stand-alone basis plus our share of Akcea’s net income (loss) for the period. To calculate the portion of Akcea’s net loss attributable to our ownership, we multiplied Akcea’s net income (loss) per share by the weighted average shares we owned in Akcea during the period. As a result of this calculation, our total net income (loss) available to Ionis common stockholders for the calculation of net income (loss) per share is different than net income (loss) attributable to Ionis Pharmaceuticals, Inc. common stockholders in the condensed consolidated statements of operations.

Our basic net loss per share for the three months ended September 30, 2020, was calculated as follows (in thousands, except per share amounts):

Three months ended September 30, 2020	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Loss Per Share Calculation
Ionis’ portion of Akcea’s net loss		77,095	$	(0.49	)	$	(37,822	)
Akcea’s net loss attributable to our ownership						$	(37,822	)
Ionis’ stand-alone net income							6,774
Net loss available to Ionis common stockholders						$	(31,048	)
Weighted average shares outstanding							139,708
Basic net loss per share						$	(0.22	)

Our basic net loss per share for the nine months ended September 30, 2020, was calculated as follows (in thousands, except per share amounts):

Nine months ended September 30, 2020	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Loss Per Share Calculation
Ionis’ portion of Akcea’s net loss		77,095	$	(1.40	)	$	(108,176	)
Akcea’s net loss attributable to our ownership						$	(108,176	)
Ionis’ stand-alone net loss							(3,049	)
Net loss available to Ionis common stockholders						$	(111,225	)
Weighted average shares outstanding							139,497
Basic net loss per share						$	(0.80	)

Our basic net income per share for the three months ended September 30, 2019, was calculated as follows (in thousands, except per share amounts):

Three months ended September 30, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Income Per Share			Basic Net Income Per Share Calculation
Ionis’ portion of Akcea’s net loss		70,221	$	(0.34	)	$	(23,772	)
Akcea’s net loss attributable to our ownership						$	(23,772	)
Ionis’ stand-alone net income							49,930
Net income available to Ionis common stockholders						$	26,158
Weighted average shares outstanding							140,551
Basic net income per share						$	0.19

Our basic net income per share for the nine months ended September 30, 2019, was calculated as follows (in thousands, except per share amounts):

Nine months ended September 30, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Income Per Share Calculation
Ionis’ portion of Akcea’s net loss		69,681	$	(0.40	)	$	(28,174	)
Akcea’s net loss attributable to our ownership						$	(28,174	)
Ionis’ stand-alone net income							140,938
Net income available to Ionis common stockholders						$	112,764
Weighted average shares outstanding							139,800
Basic net income per share						$	0.81

Diluted net income (loss) per share

For the three and nine months ended September 30, 2020, 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:

●

0.125 percent convertible senior notes;

●

1 percent convertible senior notes;

●

Dilutive stock options;

●

Unvested restricted stock units; and

●

Employee Stock Purchase Plan, or ESPP.

For the three and nine months ended September 30, 2019, we had net income available to Ionis common stockholders. As a result, we computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during the period.

We calculated our diluted net income per share for the three months ended September 30, 2019 as follows (in thousands except per share amounts):

Three Months Ended September 30, 2019	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income available to Ionis common stockholders	$	26,158		140,551	$	0.19
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		1,993
Shares issuable upon restricted stock award issuance		—		844
Shares issuable related to our Employee Stock Purchase Plan		—		20
Income available to Ionis common stockholders	$	26,158		143,408	$	0.18

We calculated our diluted net income per share for the nine months ended September 30, 2019 as follows (in thousands except per share amounts):

Nine months ended September 30, 2019	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income available to Ionis common stockholders	$	112,764		139,800	$	0.81
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		2,208
Shares issuable upon restricted stock award issuance		—		793
Shares issuable related to our Employee Stock Purchase Plan		—		20
Income available to Ionis common stockholders	$	112,764		142,821	$	0.79

For the three and nine months ended September 30, 2019, the calculation excluded our 1 percent convertible senior notes, or 1% Notes, because the effect on diluted earnings per share was anti-dilutive. For the three and nine months ended September 30, 2019, we did not have our 0.125 percent convertible senior notes.

Convertible Debt

At issuance, we accounted for our convertible debt instruments, including our 0.125 percent senior convertible notes, or 0.125% Notes, and 1% Notes that may be settled in cash upon conversion (including partial cash settlement) by separating the liability and equity components of the instruments in a manner that reflects our nonconvertible debt borrowing rate on the date the notes were issued. In reviewing debt issuances, we were not able to identify any comparable companies that issued non-convertible debt instruments at the time of the issuance of the convertible notes. Therefore, we estimated the fair value of the liability component of our notes by using assumptions that market participants would use in pricing a debt instrument, including market interest rates, credit standing, yield curves and volatilities.

We assigned a value to the debt component of our convertible notes equal to the estimated fair value of similar debt instruments without the conversion feature, which resulted in us recording our debt at a discount. We are amortizing our debt issuance costs and debt discount over the life of the convertible notes as additional non-cash interest expense utilizing the effective interest method.

In August 2020, the FASB issued guidance simplifying the accounting for convertible debt instruments. See the section titled “Impact of Recently Issued Accounting Standards” below for details.

Segment Information

Through September 30, 2020, we had two operating segments, our Ionis Core segment and Akcea Therapeutics. Akcea is focused on developing and commercializing medicines to treat patients with serious and rare diseases. We provide segment financial information and results for our Ionis Core segment and our Akcea Therapeutics segment based on the segregation of revenues and expenses that our chief decision maker reviewed to assess operating performance and to make operating decisions. We allocated a portion of Ionis’ development, R&D support and general and administrative expenses to Akcea for work Ionis performed on behalf of Akcea and we billed Akcea for these expenses.

Stock-based Compensation Expense

We measure stock-based compensation expense for equity-classified awards, principally related to stock options, restricted stock units, or RSUs, 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. The expected term of stock options granted represents the period of time that we expect them to be outstanding. We estimate the expected term of options granted based on historical exercise patterns. For the nine months ended September 30, 2020 and 2019, we used the following weighted-average assumptions in our Black-Scholes calculations:

Ionis Employee Stock Options:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		1.5	%		2.3	%
Dividend yield		0.0	%		0.0	%
Volatility		58.8	%		60.3	%
Expected life	4.7 years			4.6 years

Ionis Board of Director Stock Options:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		0.5	%		1.9	%
Dividend yield		0.0	%		0.0	%
Volatility		57.6	%		60.7	%
Expected life	6.7 years			6.6 years

Ionis ESPP:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		0.8	%		2.4	%
Dividend yield		0.0	%		0.0	%
Volatility		47.9	%		45.6	%
Expected life	6 months			6 months

Ionis RSU’s:

The fair value of RSUs is based on the market price of our common stock on the date of grant. RSUs vest annually over a four-year period. RSUs granted after June 2020 to our board of directors vest annually. The weighted-average grant date fair value of RSUs granted to employees and our board of directors for the nine months ended September 30, 2020 was $61.72 and $60.20 per share, respectively.

Akcea’s Equity Plan

In addition to our stock plans, Akcea had its own stock plan under which it granted stock options and RSUs and under which it derived its stock-based compensation expense. In October 2020, as part of the Akcea Acquisition, Akcea’s outstanding equity awards vested under Akcea’s 2015 Equity Incentive Plan. As a result, in the fourth quarter of 2020, Akcea will recognize all unrecognized stock-based compensation under its 2015 Equity Incentive Plan.

In conjunction with the Akcea Acquisition, each of Akcea’s outstanding stock options with an exercise price less than $18.15 per option and each Akcea RSU, in each case whether or not vested, were cancelled. The holder received $18.15 (less any applicable exercise price in the case of options) for each share subject to such award. Each option to purchase Akcea common stock with an exercise price greater than or equal to $18.15 was cancelled with no consideration paid. We will account for all cash payments made for the cancellation of Akcea’s outstanding equity awards as part of the transaction costs recorded to stockholders’ equity in the fourth quarter of 2020.

In connection with the Akcea Acquisition, we submitted a listing of additional shares notification form to Nasdaq for Ionis to assume the remaining portion of Akcea’s available equity share pool of approximately 2.8 million shares. This will enable us to make equity grants using these shares for legacy Akcea employees. We submitted this notification pursuant to the exception provided under Rule 5635(c) of The Nasdaq Stock Market LLC Rules (and IM-5635-1 thereunder) that permits an acquiring corporation to use shares available under certain plans acquired in acquisitions and mergers for certain post-transaction grants without further stockholder approval.

The following were the weighted-average Black-Scholes assumptions Akcea used under its plan for the nine months ended September 30, 2020 and 2019:

Akcea Employee Stock Options:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		1.1	%		2.3	%
Dividend yield		0.0	%		0.0	%
Volatility		75.0	%		75.6	%
Expected life	6.1 years			6.1 years

Akcea Board of Directors Stock Options:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		0.8	%		1.8	%
Dividend yield		0.0	%		0.0	%
Volatility		75.3	%		73.8	%
Expected life	5.7 years			6.3 years

Akcea ESPP:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		1.0	%		2.4	%
Dividend yield		0.0	%		0.0	%
Volatility		71.9	%		60.0	%
Expected life	6 months			6 months

Akcea RSU’s:

The fair value of RSUs was based on the market price of Akcea’s common stock on the date of grant. Akcea granted RSUs with various vesting terms between six months and four years. The weighted-average grant date fair value of RSUs granted to employees for the nine months ended September 30, 2020 was $15.57 per share.

The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2020 and 2019 (in thousands). Our non-cash stock-based compensation expense included $13.8 million and $37.2 million of stock-based compensation expense for Akcea employees for the three and nine months ended September 30, 2020, respectively, compared to $(3.5) million and $29.5 million for the same periods in 2019. In the third quarter of 2019, three Akcea executive officers terminated their employment and entered into separation agreements with Akcea. As a result, in the third quarter of 2019, Akcea reversed $19.1 million of stock-based compensation expense it had previously recognized related to the executive officers’ stock options and RSUs that were no longer going to vest.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cost of products sold	$	315	$	127	$	902	$	383
Research, development and patent		25,359		23,744		76,931		71,935
Selling, general and administrative		20,171		255		57,244		39,246
Total non-cash stock-based compensation expense	$	45,845	$	24,126	$	135,077	$	111,564

As of September 30, 2020, total unrecognized estimated non-cash stock-based compensation expense related to non-vested stock options and RSUs was $118.2 million and $87.3 million, respectively, of which $59.7 million was related to Akcea’s 2015 Equity Incentive Plan. Our actual expenses may differ from these estimates because we will adjust our unrecognized non-cash stock-based compensation expense for future forfeitures. We expect to recognize the cost of non-cash stock-based compensation expense related to Ionis’ non-vested stock options and RSUs over a weighted average amortization period of 1.2 years and 1.5 years, respectively. We will recognize the remaining unrecognized expense of $59.7 million for Akcea’s equity awards in the fourth quarter of 2020 in conjunction with the Akcea Acquisition.

Amendments to Equity Plan

In June 2020, after receiving approval from our stockholders, we amended our 2002 Non-Employee Directors’ Stock Option Plan. The amendments included:

●

An increase to the total number of shares reserved for issuance under the plan from 2 million to 2.8 million shares;

●

A reduction to the amount of the automatic awards under the plan;

●

A revision to the vesting schedule of awards; and

●

An extension of the term of the plan.

Share Repurchase Program

In September 2019, our board of directors approved an initial share repurchase program of up to $125 million of our common stock. In 2019, we repurchased 535,000 shares for $34.4 million. In the first quarter of 2020, we repurchased an additional 1.5 million shares for $90.6 million.

Impact of Recently Issued Accounting Standards

In June 2016, the FASB issued guidance that changes the measurement of credit losses for most financial assets and certain other instruments. If we have credit losses, this updated guidance requires us to record allowances for these instruments under a new expected credit loss model. This model requires us to estimate the expected credit loss of an instrument over its lifetime, which represents the portion of the amortized cost basis we do not expect to collect. The new guidance requires us to remeasure our allowance in each reporting period we have credit losses. We adopted this new guidance on January 1, 2020. This guidance did not have an impact on our condensed consolidated financial statements.

In August 2018, the FASB issued clarifying guidance on how to account for implementation costs related to cloud-servicing arrangements. The guidance states that if these fees qualify to be capitalized and amortized over the service period, they need to be expensed in the same line item as the service expense and recognized in the same balance sheet category. The update can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. We adopted this guidance on January 1, 2020 on a prospective basis. This guidance did not have an impact on our condensed consolidated financial statements.

In November 2018, the FASB issued clarifying guidance of the interaction between the collaboration accounting guidance and the new revenue recognition guidance we adopted on January 1, 2018 (Topic 606). Below is the clarifying guidance and how we implemented it (in italics):

When a participant is considered a customer in a collaborative arrangement, all of the associated accounting under Topic 606 should be applied.

●

We are applying all of the associated accounting under Topic 606 when we determine a participant in a collaborative arrangement is a customer.

Adds “unit of account” concept to collaboration accounting guidance to align with Topic 606. The “unit of account” concept is used to determine if revenue is recognized or if a contra expense is recognized from consideration received under a collaboration.

●

We use the “unit of account” concept when we receive consideration under a collaborative arrangement to determine when we recognize revenue or a contra expense.

The clarifying guidance precludes us from recognizing revenue under Topic 606 when we determine a transaction with a collaborative partner is not a customer and is not directly related to the sales to third parties.

●

When we conclude a collaboration partner is not a customer and is not directly related to the sales to third parties, we do not recognize revenue for the transaction.

We adopted this new guidance on January 1, 2020. This guidance did not have a significant impact on our condensed consolidated financial statements.

In August 2020, the FASB issued guidance which simplifies the accounting for convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity's own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. Under our current outstanding convertible debt arrangements, we anticipate the following impacts:

We will no longer separate our existing convertible debt into debt and equity components. Rather, we will record our convertible debt entirely as a liability on our balance sheet. Additionally, we will no longer recognize a debt discount for the value of the conversion option, instead we will record the face value of the convertible debt at inception;

We will record cash interest expense plus amortization of debt issuance costs to interest expense. We will no longer record the amortization of a debt discount to interest expense; and

Our EPS calculation will not change under this update. We will continue to use the if-converted method to calculate diluted earnings per share.

This update is effective for our interim and annual periods beginning January 1, 2022, and earlier adoption is permitted as soon as January 1, 2021. We may elect to apply the updated guidance on a retrospective or modified retrospective basis. We plan to adopt this guidance on January 1, 2021 under the full retrospective approach, meaning we will apply the guidance to all periods presented. We are evaluating the impact of the adoption of this standard on our condensed consolidated financial statements.

Investments

9 Months Ended

Sep. 30, 2020

Investments [Abstract]

Investments

3. Investments

The following table summarizes the contract maturity of the available-for-sale securities we held as of September 30, 2020:

One year or less	71	%
After one year but within two years	20	%
After two years but within three years	9	%
Total	100	%

As illustrated above, at September 30, 2020, 91 percent of our available-for-sale securities had a maturity of less than two years.

All of our available-for-sale 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.

We invest in available-for-sale securities with strong credit ratings and an investment grade rating at or above A-1, P-1 or F-1 by Standard & Poor’s, or S&P, Moody’s or Fitch, respectively.

At September 30, 2020, we had an ownership interest of less than 20 percent in five private companies and two public companies with which we conduct business. The privately held companies are Atlantic Pharmaceuticals Limited, Dynacure SAS, Empirico, Inc., Seventh Sense Biosystems and Suzhou Ribo Life Science Co, Ltd. The publicly traded companies are ATL and ProQR.

The following is a summary of our investments (in thousands):

			Gross Unrealized					Estimated
September 30, 2020	Cost (1)		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities (2)	$	568,857	$	3,443	$	(12	)	$	572,288
Debt securities issued by U.S. government agencies		104,329		391		(1	)		104,719
Debt securities issued by the U.S. Treasury (2)		358,758		485		(7	)		359,236
Debt securities issued by states of the U.S. and political subdivisions of the states		96,363		238		(2	)		96,599
Other municipal debt securities		901		6		—			907
Total securities with a maturity of one year or less		1,129,208		4,563		(22	)		1,133,749
Corporate debt securities		392,836		6,315		(87	)		399,064
Debt securities issued by U.S. government agencies		120,065		440		(31	)		120,474
Debt securities issued by the U.S. Treasury		31,598		424		(6	)		32,016
Debt securities issued by states of the U.S. and political subdivisions of the states		27,637		237		(1	)		27,873
Total securities with a maturity of more than one year		578,428		7,416		(148	)		585,696
Total available-for-sale securities	$	1,707,636	$	11,979	$	(170	)	$	1,719,445
Equity securities:
Total equity securities included in other current assets (3)	$	4,712	$	—	$	(2,565	)	$	2,147
Total equity securities included in deposits and other assets (4)		15,031		9,318		—			24,349
Total equity securities		19,743		9,318		(2,565	)		26,496
Total available-for-sale and equity securities	$	1,727,379	$	21,297	$	(2,735	)	$	1,745,941

			Gross Unrealized					Estimated
December 31, 2019	Cost (1)		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities (2)	$	669,665	$	1,451	$	(43	)	$	671,073
Debt securities issued by U.S. government agencies		188,216		303		(43	)		188,476
Debt securities issued by the U.S. Treasury (2)		327,670		232		(27	)		327,875
Debt securities issued by states of the U.S. and political subdivisions of the states (2)		21,065		26		(5	)		21,086
Total securities with a maturity of one year or less		1,206,616		2,012		(118	)		1,208,510
Corporate debt securities		428,627		2,911		(43	)		431,495
Debt securities issued by U.S. government agencies		140,988		57		(117	)		140,928
Debt securities issued by the U.S. Treasury		35,822		9		(12	)		35,819
Debt securities issued by states of the U.S. and political subdivisions of the states		19,309		18		(6	)		19,321
Total securities with a maturity of more than one year		624,746		2,995		(178	)		627,563
Total available-for-sale securities	$	1,831,362	$	5,007	$	(296	)	$	1,836,073
Equity securities:
Total equity securities included in other current assets (3)		4,712		—		(870	)		3,842
Total equity securities included in deposits and other assets (4)		10,000		—		—			10,000
Total equity securities		14,712		—		(870	)		13,842
Total available-for-sale and equity securities	$	1,846,074	$	5,007	$	(1,166	)	$	1,849,915

(1)	We hold our available-for-sale securities at amortized cost.

(2)	Includes investments classified as cash equivalents on our condensed consolidated balance sheet.

(3)	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.

(4)

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 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 on our condensed consolidated balance sheet.

The following is a summary of our investments we consider to be temporarily impaired at September 30, 2020 (in thousands). 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. We believe it is more likely than not that we will be able to hold our debt securities to maturity. Therefore, we anticipate full recovery of our debt securities’ amortized cost basis at maturity.

			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		54	$	104,736	$	(99	)	$	—	$	—	$	104,736	$	(99	)
Debt securities issued by U.S. government agencies		4		37,963		(32	)		7,000		—		44,963		(32	)
Debt securities issued by the U.S. Treasury		5		55,273		(13	)		—		—		55,273		(13	)
Debt securities issued by states of the U.S. and political subdivisions of the states		45		14,719		(3	)		—		—		14,719		(3	)
Other municipal debt securities		2		6,269		(23	)		—		—		6,269		(23	)
Total temporarily impaired securities		110	$	218,960	$	(170	)	$	7,000	$	—	$	225,960	$	(170	)

Fair Value Measurements

9 Months Ended

Sep. 30, 2020

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. 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, 2020 and December 31, 2019 that we regularly measure and carry at fair value. At September 30, 2020 and December 31, 2019, a portion of our ProQR investment was subject to trading restrictions that extend to the fourth quarter of 2020; as a result, we included a lack of marketability discount in valuing this investment, which is a Level 3 input. The amount we owned in ProQR did not change from December 31, 2019 to September 30, 2020. The tables below segregate each security type by the level within the fair value hierarchy of the valuation techniques we utilized to determine the respective securities’ fair value (in thousands):

	At September 30, 2020		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents (1)	$	510,569	$	510,569	$	—	$	—
Corporate debt securities (2)		971,352		—		971,352		—
Debt securities issued by U.S. government agencies (3)		225,193		—		225,193		—
Debt securities issued by the U.S. Treasury (4)		391,252		391,252		—		—
Debt securities issued by states of the U.S. and political subdivisions of the states (5)		124,472		—		124,472		—
Other municipal debt securities (3)		7,176		—		7,176		—
Investment in ProQR Therapeutics N.V. (6)		2,147		539		—		1,608
Total	$	2,232,161	$	902,360	$	1,328,193	$	1,608

	At December 31, 2019		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents (1)	$	418,406	$	418,406	$	—	$	—
Corporate debt securities (7)		1,102,568		—		1,102,568		—
Debt securities issued by U.S. government agencies (8)		329,404		—		329,404		—
Debt securities issued by the U.S. Treasury (3)		363,694		363,694		—		—
Debt securities issued by states of the U.S. and political subdivisions of the states (3)		40,407		—		40,407		—
Investment in ProQR Therapeutics N.V. (6)		4,506		—		—		4,506
Total	$	2,258,985	$	782,100	$	1,472,379	$	4,506

The following footnotes reference lines on our condensed consolidated balance sheet:

(1)	Included in cash and cash equivalents.

(2)	$1.8 million was included in cash and cash equivalents, with the difference included in short-term investments.

(3)	Included in short-term investments.

(4)	$20.0 million was included in cash and cash equivalents, with the difference included in short-term investments.

(5)	$1.5 million was included in cash and cash equivalents, with the difference included in short-term investments.

(6)	Included in other current assets.

(7)	$19.0 million was included in cash and cash equivalents, with the difference included in short-term investments.

(8)	$0.8 million was included in cash and cash equivalents, with the difference included in short-term investments.

Convertible Notes

Our 1% Notes and 0.125% Notes had a fair value of $325.0 million and $508.1 million at September 30, 2020, 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.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Income Taxes	9 Months Ended
Income Taxes	Sep. 30, 2020
Income Taxes [Abstract]
Income Taxes	5. Income Taxes The Coronavirus Aid, Relief, and Economic Security, or CARES, Act was enacted in March 2020. We considered our ability to estimate annual effective tax rates based on our pre-tax income projections, the income tax effects of the CARES Act, the realizability of our net deferred tax assets and the appropriateness of our valuation allowances. Under the Tax Cut and Jobs Act of 2017, the utilization of federal net operating losses was limited to 80 percent of taxable income. The CARES Act temporarily removed this limitation and provides for the utilization of net operating loss carryforwards to offset 100 percent of taxable income. The 80 percent limitation enacted by the Tax Act is reinstated for tax years beginning in 2021. In 2019, we recorded income tax expense related to Akcea due to the 80 percent limitation on the utilization of net operating losses in effect at the time. As a result of the temporary change in tax law provided by the CARES Act, we recorded a $1.7 million tax benefit in the first quarter of 2020 as we will now utilize federal net operating loss carryforwards to offset 100 percent of Akcea’s taxable income for 2019. We recorded the tax benefit as a discrete item in the first quarter of 2020 because that was when the CARES Act was enacted. We recorded income tax expense of $2.6 million and an income tax benefit of $1.0 million for the three and nine months ended September 30, 2020, respectively, compared to an income tax benefit of $14.9 million and income tax expense of $9.2 million for the same periods in 2019. We recorded an income tax benefit for the first nine months of 2020 primarily due to Ionis’ pre-tax loss for the period and the $1.7 million tax benefit related to Akcea. We did not record a tax benefit as a result of Akcea’s pre-tax loss in the first nine months of 2020 because Akcea maintains a full valuation allowance against its deferred tax assets. Our effective tax rate may vary from the U.S. federal statutory rate due to the change in the mix of earnings in tax jurisdictions with different statutory rates, benefits related to tax credits, the tax impact of non-deductible expenses and other permanent differences between income before taxes and taxable income, and changes to tax laws or rates. Our effective income tax rate of 0.7 percent for the nine months ended September 30, 2020 differed from the U.S. federal statutory rate of 21 percent primarily due to Ionis’ pre-tax loss for the period and the $1.7 million tax benefit related to Akcea.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References + Details

Collaborative Arrangements and Licensing Agreements

9 Months Ended

Sep. 30, 2020

Collaborative Arrangements and Licensing Agreements [Abstract]

Collaborative Arrangements and Licensing Agreements

6. Collaborative Arrangements and Licensing Agreements

Below, we have included our collaborations with substantive changes during the first nine months of 2020 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, 2019.

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 eight medicines to treat neurodegenerative diseases under these collaborations, including medicines in development to treat people with ALS, Alzheimer’s diseaseand Parkinson’s disease. In addition to these medicines, our collaborations with Biogen include a substantial research pipeline that address a broad range of neurological diseases. From inception through September 2020, we have received more than $2.7 billion from our Biogen collaborations.

During the three and nine months ended September 30, 2020 and 2019, 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,
	2020			2019			2020			2019
SPINRAZA royalties (commercial revenue)	$	74.2		$	81.7		$	211.9		$	211.9
R&D revenue		51.2			25.5			98.6			81.9
Total revenue from our relationship with Biogen	$	125.4		$	107.2		$	310.5		$	293.8
Percentage of total revenue		78	%		64	%		71	%		47	%

Our condensed consolidated balance sheet at September 30, 2020 and December 31, 2019 included deferred revenue of $475.5 million and $525.8 million, respectively, related to our relationship with Biogen.

During the first nine months of 2020, we did not have any changes to our performance obligations, transaction price or the timing in which we expect to recognize revenue under our Biogen collaborations, except as noted below.

2012 Neurology

In the first and third quarters of 2020, we achieved a $7.5 million milestone payment and a $12 million milestone payment, respectively, when we advanced IONIS-MAPT_Rx in development. These milestone payments did not create new performance obligations because each milestone payment is part of our performance obligation to conduct development of IONIS-MAPT_Rx. Therefore, we included each milestone payment in our transaction price for our IONIS-MAPT_Rx development performance obligation, in the period in which we achieved the milestone payment. We are recognizing revenue for our IONIS-MAPT_Rx development performance obligation based on the percentage of completion. From inception through September 30, 2020, we have included $57 million in the transaction price for our IONIS-MAPT_Rx development performance obligation. We currently estimate we will satisfy our performance obligation in 2022. We will achieve the next payment of up to $25 million if a medicine under this collaboration advances.

2013 Strategic Neurology

In the third quarter of 2020, we achieved several milestone payments from Biogen under our 2013 Strategic Neurology collaboration.

●

We earned $18 million in milestone payments when Biogen initiated a Phase 1/2 trial for ION464, a medicine in development targeting alpha-synuclein to treat patients with multiple system atrophy; and

●

We earned a $10 million milestone payment when Biogen initiated a Phase 1/2 trial for ION541, a medicine in development targeting ataxin 2 to treat patients with amyotrophic lateral sclerosis, or ALS.

We recognized these payments in full in the third quarter of 2020 because we did not have any performance obligations for the respective payments. We will achieve the next payment of up to $10 million if Biogen advances a medicine under this collaboration.

Research, Development and Commercialization Partners

AstraZeneca

We have two collaborations with AstraZeneca, one focused on the treatment of cardiovascular, renal and metabolic diseases and a second focused on the treatment of oncology diseases. We and AstraZeneca are currently developing several medicines under these collaborations, including medicines in development to treat people with cardiovascular disease, a genetically associated form of kidney disease, nonalcoholic steatohepatitis, or NASH and cancer. From inception through September 30, 2020, we have received more than $330 million from our AstraZeneca collaborations.

During the three and nine months ended September 30, 2020 and 2019, we earned the following revenue from our relationship with AstraZeneca (in millions, except percentage amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
R&D revenue	$	3.8		$	6.6		$	34.3		$	14.3
Percentage of total revenue		2	%		4	%		8	%		2	%

Our condensed consolidated balance sheet at September 30, 2020 and December 31, 2019 included deferred revenue of $13.8 million and $25.0 million, respectively, related to our relationship with AstraZeneca.

During the first nine months of 2020, we did not have any changes to our performance obligations, transaction price or the timing in which we expect to recognize revenue under our AstraZeneca collaborations, except as noted below.

Cardiovascular, Renal and Metabolic Diseases Collaboration

In the first quarter of 2020, we achieved a $10 million milestone payment from AstraZeneca when AstraZeneca advanced ION532, a medicine in development targeting APOL1 for the treatment of kidney disease. We concluded that this milestone payment was not related to our R&D services performance obligation. Therefore, we recognized the $10 million milestone payment in full in the first quarter of 2020 because we did not have any performance obligations related to this payment. We will achieve the next payment of up to $30 millionif AstraZeneca advances a medicine under this collaboration.

Oncology Collaboration

In the second quarter of 2020, we earned a $13 million license fee when AstraZeneca licensed ION736, a medicine in development targeting FOXP3 for the treatment of cancer. We determined that the license was distinct from our other performance obligations. We recognized the license fee for ION736 as revenue in the second quarter of 2020 because AstraZeneca had full use of the license without any continuing involvement from us. Additionally, we did not have any further performance obligations related to the license after we delivered it to AstraZeneca in the second quarter of 2020. We will achieve the next payment of $12 millionwhen AstraZeneca advances ION736 in development.

Janssen Biotech, Inc.

We have a collaboration with Janssen Biotech, Inc. to discover and develop antisense drugs that can be locally administered, including oral delivery, to treat immune-mediated diseases of the gastrointestinal tract, or GI. Janssen is currently advancing ION253, for the treatment of immune-mediated GI disease, under this collaboration. From inception through September 30, 2020, we have received more than $80 million from our Janssen collaboration.

During the three and nine months ended September 30, 2020, we earned the following revenue from our relationship with Janssen (in millions, except percentage amounts):

	Three Months Ended September 30,			Nine Months Ended September 30,
	2020			2020
R&D revenue	$	5.0		$	5.0
Percentage of total revenue		3	%		1	%

During the three and nine months ended September 30, 2019, we did not earn any revenue from our relationship with Janssen.

We did not have any deferred revenue from our relationship with Janssen at September 30, 2020 or December 31, 2019.

During the first nine months of 2020, we did not have any changes to our performance obligations, transaction price or the timing in which we expect to recognize revenue under our Janssen collaboration, except as noted below.

In the third quarter of 2020, we achieved a $5 million milestone payment from Janssen when Janssen initiated a Phase 1 trial for ION253. We recognized this payment in full in the third quarter of 2020 because we did not have any performance obligation for the payment. We will achieve the next payment of $5 million if Janssen advances ION253 in development.

Pfizer

We entered into a license agreement with Pfizer for vupanorsen (formerly AKCEA-ANGPTL3-L_Rx), a medicine in development to treat people with cardiovascular diseases. We completed a Phase 2 study of vupanorsen in patients with elevated levels of triglycerides, or hypertriglyceridemia, type 2 diabetes and non-alcoholic fatty liver disease, or NAFLD. Pfizer is responsible for all development, regulatory activities and commercialization costs, if approved. From inception through September 30, 2020, we have received more than $255 million from Pfizer.

In October 2020, we earned a $75 million milestone payment from Pfizer when Pfizer began a Phase 2b study of vupanorsen. We will achieve the next payment of $50 million if Pfizer continues to advance vupanorsen in development.

Segment Information

9 Months Ended

Sep. 30, 2020

Segment Information [Abstract]

Segment Information

7. Segment Information

Through September 30, 2020, we had two reportable segments, Ionis Core and Akcea Therapeutics. At September 30, 2020 we owned approximately 76 percent of Akcea. In October 2020, we acquired the remaining common stock of Akcea which we did not own. Segment income (loss) from operations includes revenue less operating expenses attributable to each segment.

In our Ionis Core segment we are exploiting our antisense technology to generate a broad pipeline of first-in-class and/or best-in-class medicines. Our Ionis Core segment generates revenue from a multifaceted partnering strategy.

Akcea is focused on developing and commercializing medicines to treat patients with serious and rare diseases. Akcea generates revenue from TEGSEDI and WAYLIVRA product sales and from its collaborations.

The following tables show our segment revenue and income (loss) from operations for the three and nine months ended September 30, 2020 and 2019 (in thousands), respectively.

Three Months Ended September 30, 2020	Ionis Core		Akcea Therapeutics			Elimination of Intercompany Activity			Total
Revenue:
Commercial revenue:
SPINRAZA royalties	$	74,171	$	—		$	—		$	74,171
Product sales, net		—		19,040			—			19,040
Licensing and other royalty revenue		2,975		—			(846	)		2,129
Total commercial revenue		77,146		19,040			(846	)		95,340
R&D revenue under collaborative agreements		64,309		430			—			64,739
Total segment revenue	$	141,455	$	19,470		$	(846	)	$	160,079
Total operating expenses	$	129,657	$	69,283		$	(2,324	)	$	196,616
Loss from operations	$	11,798	$	(49,813	)	$	1,478		$	(36,537	)

Three Months Ended September 30, 2019	Ionis Core		Akcea Therapeutics			Elimination of Intercompany Activity			Total
Revenue:
Commercial revenue:
SPINRAZA royalties	$	81,672	$	—		$	—		$	81,672
Product sales, net		—		11,945			—			11,945
Licensing and other royalty revenue		1,946		136			—			2,082
Total commercial revenue		83,618		12,081			—			95,699
R&D revenue under collaborative agreements		69,165		8,543			(5,515	)		72,193
Total segment revenue	$	152,783	$	20,624		$	(5,515	)	$	167,892
Total operating expenses	$	119,147	$	53,215		$	(6,993	)	$	165,369
Income (loss) from operations	$	33,636	$	(32,591	)	$	1,478		$	2,523

Nine Months Ended September 30, 2020	Ionis Core			Akcea Therapeutics			Elimination of Intercompany Activity			Total
Revenue:
Commercial revenue:
SPINRAZA royalties	$	211,925		$	—		$	—		$	211,925
Product sales, net		—			50,562			—			50,562
Licensing and other royalty revenue		8,809			—			(2,261	)		6,548
Total commercial revenue		220,734			50,562			(2,261	)		269,035
R&D revenue under collaborative agreements		167,870			7,358			(5,280	)		169,948
Total segment revenue	$	388,604		$	57,920		$	(7,541	)	$	438,983
Total operating expenses	$	396,259		$	204,084		$	(11,944	)	$	588,399
Loss from operations	$	(7,655	)	$	(146,164	)	$	4,403		$	(149,416	)

Nine Months Ended September 30, 2019	Ionis Core		Akcea Therapeutics			Elimination of Intercompany Activity			Total
Revenue:
Commercial revenue:
SPINRAZA royalties	$	211,884	$	—		$	—		$	211,884
Product sales, net		—		28,563			—			28,563
Licensing and other royalty revenue		8,466		6,172			(3,000	)		11,638
Total commercial revenue		220,350		34,735			(3,000	)		252,085
R&D revenue under collaborative agreements		294,512		176,328			(94,007	)		376,833
Total segment revenue	$	514,862	$	211,063		$	(97,007	)	$	628,918
Total operating expenses	$	355,437	$	256,152		$	(87,900	)	$	523,689
Income (loss) from operations	$	159,425	$	(45,089	)	$	(9,107	)	$	105,229

The following table shows our total assets by segment at September 30, 2020 and December 31, 2019 (in thousands), respectively.

Total Assets	Ionis Core		Akcea Therapeutics		Elimination of Intercompany Activity			Total
September 30, 2020	$	3,436,990	$	507,977	$	(849,266	)	$	3,095,701
December 31, 2019	$	3,478,081	$	599,250	$	(844,219	)	$	3,233,112

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

Basis of Presentation (Policies)	9 Months Ended
Basis of Presentation (Policies)	Sep. 30, 2020
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, 2020 and 2019 on the same basis as the audited financial statements for the year ended December 31, 2019. 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, 2019 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC.
Consolidation	In the condensed consolidated financial statements, we included the accounts of Ionis Pharmaceuticals, Inc. and the consolidated results of our subsidiary, Akcea Therapeutics, Inc. and its wholly owned subsidiaries. We formed Akcea in December 2014. In July 2017, Akcea completed an initial public offering, or IPO. Prior to Akcea’s IPO in July 2017, we owned 100 percent of Akcea. At September 30, 2020, our ownership of Akcea was approximately 76 percent. We reflect changes in our ownership percentage in our financial statements as an adjustment to noncontrolling interest in the period the change occurs. In October 2020, we acquired the shares of Akcea’s common stock we did not own. We will refer to this transaction as the Akcea Acquisition throughout the remainder of this document. We will reflect the impact of the Akcea Acquisition in our financial statements in the fourth quarter of 2020.

Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Significant Accounting Policies [Abstract]

Revenue Recognition

Our Revenue Sources

Commercial Revenue: SPINRAZA royalties and Licensing and other royalty revenue

Commercial Revenue: Product sales, net

Research and development revenue under collaborative agreements

Steps to Recognize Revenue

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:

Identify the contract

First, we 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.

Identify the performance obligations

Determine the transaction price

Allocate the transaction price

●

Estimated future product sales;

●

Estimated royalties we may receive from future product sales;

●

Estimated contractual milestone payments we may receive;

●

Expenses we expect to incur;

●

Income taxes; and

●

A discount rate.

●

The number of internal hours we estimate 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.

Recognize revenue

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

Commercial Revenue: Product sales, net

Reserves for Product sales

The following are the components of variable consideration related to product sales:

Research and development revenue under collaboration agreements:

Upfront payments

Milestone payments

License fees

Sublicense fees

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:

If the additional goods and/or services are distinct from the other performance obligations in the original agreement; and

If the goods and/or services are sold at a stand-alone selling price.

Multiple 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.

Contracts Receivable

Unbilled SPINRAZA Royalties

Deferred Revenue

Cost of Products Sold

Noncontrolling Interest in Akcea Therapeutics, Inc.

Cash, Cash Equivalents and Investments

Inventory Valuation

	September 30, 2020		December 31, 2019
Raw materials:
Raw materials- clinical	$	9,294	$	9,363
Raw materials- commercial		8,582		6,520
Total raw materials		17,876		15,883
Work in process		3,346		2,039
Finished goods		950		258
Total inventory	$	22,172	$	18,180

Leases

Research and Development Expenses

Long-lived Assets

Basic and Diluted Net Income (Loss) per Share

Basic and Diluted Net Income (Loss) Per Share

Basic net income (loss) per share

Our basic net loss per share for the three months ended September 30, 2020, was calculated as follows (in thousands, except per share amounts):

Three months ended September 30, 2020	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Loss Per Share Calculation
Ionis’ portion of Akcea’s net loss		77,095	$	(0.49	)	$	(37,822	)
Akcea’s net loss attributable to our ownership						$	(37,822	)
Ionis’ stand-alone net income							6,774
Net loss available to Ionis common stockholders						$	(31,048	)
Weighted average shares outstanding							139,708
Basic net loss per share						$	(0.22	)

Our basic net loss per share for the nine months ended September 30, 2020, was calculated as follows (in thousands, except per share amounts):

Nine months ended September 30, 2020	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Loss Per Share Calculation
Ionis’ portion of Akcea’s net loss		77,095	$	(1.40	)	$	(108,176	)
Akcea’s net loss attributable to our ownership						$	(108,176	)
Ionis’ stand-alone net loss							(3,049	)
Net loss available to Ionis common stockholders						$	(111,225	)
Weighted average shares outstanding							139,497
Basic net loss per share						$	(0.80	)

Our basic net income per share for the three months ended September 30, 2019, was calculated as follows (in thousands, except per share amounts):

Three months ended September 30, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Income Per Share			Basic Net Income Per Share Calculation
Ionis’ portion of Akcea’s net loss		70,221	$	(0.34	)	$	(23,772	)
Akcea’s net loss attributable to our ownership						$	(23,772	)
Ionis’ stand-alone net income							49,930
Net income available to Ionis common stockholders						$	26,158
Weighted average shares outstanding							140,551
Basic net income per share						$	0.19

Our basic net income per share for the nine months ended September 30, 2019, was calculated as follows (in thousands, except per share amounts):

Nine months ended September 30, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Income Per Share Calculation
Ionis’ portion of Akcea’s net loss		69,681	$	(0.40	)	$	(28,174	)
Akcea’s net loss attributable to our ownership						$	(28,174	)
Ionis’ stand-alone net income							140,938
Net income available to Ionis common stockholders						$	112,764
Weighted average shares outstanding							139,800
Basic net income per share						$	0.81

Diluted net income (loss) per share

●

0.125 percent convertible senior notes;

●

1 percent convertible senior notes;

●

Dilutive stock options;

●

Unvested restricted stock units; and

●

Employee Stock Purchase Plan, or ESPP.

We calculated our diluted net income per share for the three months ended September 30, 2019 as follows (in thousands except per share amounts):

Three Months Ended September 30, 2019	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income available to Ionis common stockholders	$	26,158		140,551	$	0.19
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		1,993
Shares issuable upon restricted stock award issuance		—		844
Shares issuable related to our Employee Stock Purchase Plan		—		20
Income available to Ionis common stockholders	$	26,158		143,408	$	0.18

We calculated our diluted net income per share for the nine months ended September 30, 2019 as follows (in thousands except per share amounts):

Nine months ended September 30, 2019	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income available to Ionis common stockholders	$	112,764		139,800	$	0.81
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		2,208
Shares issuable upon restricted stock award issuance		—		793
Shares issuable related to our Employee Stock Purchase Plan		—		20
Income available to Ionis common stockholders	$	112,764		142,821	$	0.79

Convertible Debt

In August 2020, the FASB issued guidance simplifying the accounting for convertible debt instruments. See the section titled “Impact of Recently Issued Accounting Standards” below for details.

Segment Information

Stock-Based Compensation Expense

Stock-based Compensation Expense

Ionis Employee Stock Options:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		1.5	%		2.3	%
Dividend yield		0.0	%		0.0	%
Volatility		58.8	%		60.3	%
Expected life	4.7 years			4.6 years

Ionis Board of Director Stock Options:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		0.5	%		1.9	%
Dividend yield		0.0	%		0.0	%
Volatility		57.6	%		60.7	%
Expected life	6.7 years			6.6 years

Ionis ESPP:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		0.8	%		2.4	%
Dividend yield		0.0	%		0.0	%
Volatility		47.9	%		45.6	%
Expected life	6 months			6 months

Ionis RSU’s:

Akcea’s Equity Plan

The following were the weighted-average Black-Scholes assumptions Akcea used under its plan for the nine months ended September 30, 2020 and 2019:

Akcea Employee Stock Options:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		1.1	%		2.3	%
Dividend yield		0.0	%		0.0	%
Volatility		75.0	%		75.6	%
Expected life	6.1 years			6.1 years

Akcea Board of Directors Stock Options:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		0.8	%		1.8	%
Dividend yield		0.0	%		0.0	%
Volatility		75.3	%		73.8	%
Expected life	5.7 years			6.3 years

Akcea ESPP:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		1.0	%		2.4	%
Dividend yield		0.0	%		0.0	%
Volatility		71.9	%		60.0	%
Expected life	6 months			6 months

Akcea RSU’s:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cost of products sold	$	315	$	127	$	902	$	383
Research, development and patent		25,359		23,744		76,931		71,935
Selling, general and administrative		20,171		255		57,244		39,246
Total non-cash stock-based compensation expense	$	45,845	$	24,126	$	135,077	$	111,564

Impact of Recently Issued Accounting Standards

When a participant is considered a customer in a collaborative arrangement, all of the associated accounting under Topic 606 should be applied.

●

We are applying all of the associated accounting under Topic 606 when we determine a participant in a collaborative arrangement is a customer.

●

We use the “unit of account” concept when we receive consideration under a collaborative arrangement to determine when we recognize revenue or a contra expense.

●

When we conclude a collaboration partner is not a customer and is not directly related to the sales to third parties, we do not recognize revenue for the transaction.

We adopted this new guidance on January 1, 2020. This guidance did not have a significant impact on our condensed consolidated financial statements.

We will record cash interest expense plus amortization of debt issuance costs to interest expense. We will no longer record the amortization of a debt discount to interest expense; and

Our EPS calculation will not change under this update. We will continue to use the if-converted method to calculate diluted earnings per share.

Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2020

Significant Accounting Policies [Abstract]

Inventory

	September 30, 2020		December 31, 2019
Raw materials:
Raw materials- clinical	$	9,294	$	9,363
Raw materials- commercial		8,582		6,520
Total raw materials		17,876		15,883
Work in process		3,346		2,039
Finished goods		950		258
Total inventory	$	22,172	$	18,180

Basic Net Income per Share

Our basic net loss per share for the three months ended September 30, 2020, was calculated as follows (in thousands, except per share amounts):

Three months ended September 30, 2020	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Loss Per Share Calculation
Ionis’ portion of Akcea’s net loss		77,095	$	(0.49	)	$	(37,822	)
Akcea’s net loss attributable to our ownership						$	(37,822	)
Ionis’ stand-alone net income							6,774
Net loss available to Ionis common stockholders						$	(31,048	)
Weighted average shares outstanding							139,708
Basic net loss per share						$	(0.22	)

Our basic net loss per share for the nine months ended September 30, 2020, was calculated as follows (in thousands, except per share amounts):

Nine months ended September 30, 2020	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Loss Per Share Calculation
Ionis’ portion of Akcea’s net loss		77,095	$	(1.40	)	$	(108,176	)
Akcea’s net loss attributable to our ownership						$	(108,176	)
Ionis’ stand-alone net loss							(3,049	)
Net loss available to Ionis common stockholders						$	(111,225	)
Weighted average shares outstanding							139,497
Basic net loss per share						$	(0.80	)

Our basic net income per share for the three months ended September 30, 2019, was calculated as follows (in thousands, except per share amounts):

Three months ended September 30, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Income Per Share			Basic Net Income Per Share Calculation
Ionis’ portion of Akcea’s net loss		70,221	$	(0.34	)	$	(23,772	)
Akcea’s net loss attributable to our ownership						$	(23,772	)
Ionis’ stand-alone net income							49,930
Net income available to Ionis common stockholders						$	26,158
Weighted average shares outstanding							140,551
Basic net income per share						$	0.19

Our basic net income per share for the nine months ended September 30, 2019, was calculated as follows (in thousands, except per share amounts):

Nine months ended September 30, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Income Per Share Calculation
Ionis’ portion of Akcea’s net loss		69,681	$	(0.40	)	$	(28,174	)
Akcea’s net loss attributable to our ownership						$	(28,174	)
Ionis’ stand-alone net income							140,938
Net income available to Ionis common stockholders						$	112,764
Weighted average shares outstanding							139,800
Basic net income per share						$	0.81

Basic and Diluted Net Income Per Share

We calculated our diluted net income per share for the three months ended September 30, 2019 as follows (in thousands except per share amounts):

Three Months Ended September 30, 2019	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income available to Ionis common stockholders	$	26,158		140,551	$	0.19
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		1,993
Shares issuable upon restricted stock award issuance		—		844
Shares issuable related to our Employee Stock Purchase Plan		—		20
Income available to Ionis common stockholders	$	26,158		143,408	$	0.18

We calculated our diluted net income per share for the nine months ended September 30, 2019 as follows (in thousands except per share amounts):

Nine months ended September 30, 2019	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income available to Ionis common stockholders	$	112,764		139,800	$	0.81
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		2,208
Shares issuable upon restricted stock award issuance		—		793
Shares issuable related to our Employee Stock Purchase Plan		—		20
Income available to Ionis common stockholders	$	112,764		142,821	$	0.79

Significant Accounting Policies [Abstract]

Weighted-Average Assumptions for Stock Options

Ionis Employee Stock Options:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		1.5	%		2.3	%
Dividend yield		0.0	%		0.0	%
Volatility		58.8	%		60.3	%
Expected life	4.7 years			4.6 years

Ionis Board of Director Stock Options:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		0.5	%		1.9	%
Dividend yield		0.0	%		0.0	%
Volatility		57.6	%		60.7	%
Expected life	6.7 years			6.6 years

Weighted-Average Assumptions for ESPP

Ionis ESPP:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		0.8	%		2.4	%
Dividend yield		0.0	%		0.0	%
Volatility		47.9	%		45.6	%
Expected life	6 months			6 months

Stock-Based Compensation Expense

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Cost of products sold	$	315	$	127	$	902	$	383
Research, development and patent		25,359		23,744		76,931		71,935
Selling, general and administrative		20,171		255		57,244		39,246
Total non-cash stock-based compensation expense	$	45,845	$	24,126	$	135,077	$	111,564

Akcea [Member]

Significant Accounting Policies [Abstract]

Weighted-Average Assumptions for Stock Options

Akcea Employee Stock Options:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		1.1	%		2.3	%
Dividend yield		0.0	%		0.0	%
Volatility		75.0	%		75.6	%
Expected life	6.1 years			6.1 years

Akcea Board of Directors Stock Options:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		0.8	%		1.8	%
Dividend yield		0.0	%		0.0	%
Volatility		75.3	%		73.8	%
Expected life	5.7 years			6.3 years

Weighted-Average Assumptions for ESPP

Akcea ESPP:

	Nine Months Ended September 30,
	2020			2019
Risk-free interest rate		1.0	%		2.4	%
Dividend yield		0.0	%		0.0	%
Volatility		71.9	%		60.0	%
Expected life	6 months			6 months

Investments (Tables)

9 Months Ended

Sep. 30, 2020

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, 2020:

One year or less	71	%
After one year but within two years	20	%
After two years but within three years	9	%
Total	100	%

Summary of Investments

The following is a summary of our investments (in thousands):

			Gross Unrealized					Estimated
September 30, 2020	Cost (1)		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities (2)	$	568,857	$	3,443	$	(12	)	$	572,288
Debt securities issued by U.S. government agencies		104,329		391		(1	)		104,719
Debt securities issued by the U.S. Treasury (2)		358,758		485		(7	)		359,236
Debt securities issued by states of the U.S. and political subdivisions of the states		96,363		238		(2	)		96,599
Other municipal debt securities		901		6		—			907
Total securities with a maturity of one year or less		1,129,208		4,563		(22	)		1,133,749
Corporate debt securities		392,836		6,315		(87	)		399,064
Debt securities issued by U.S. government agencies		120,065		440		(31	)		120,474
Debt securities issued by the U.S. Treasury		31,598		424		(6	)		32,016
Debt securities issued by states of the U.S. and political subdivisions of the states		27,637		237		(1	)		27,873
Total securities with a maturity of more than one year		578,428		7,416		(148	)		585,696
Total available-for-sale securities	$	1,707,636	$	11,979	$	(170	)	$	1,719,445
Equity securities:
Total equity securities included in other current assets (3)	$	4,712	$	—	$	(2,565	)	$	2,147
Total equity securities included in deposits and other assets (4)		15,031		9,318		—			24,349
Total equity securities		19,743		9,318		(2,565	)		26,496
Total available-for-sale and equity securities	$	1,727,379	$	21,297	$	(2,735	)	$	1,745,941

			Gross Unrealized					Estimated
December 31, 2019	Cost (1)		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities (2)	$	669,665	$	1,451	$	(43	)	$	671,073
Debt securities issued by U.S. government agencies		188,216		303		(43	)		188,476
Debt securities issued by the U.S. Treasury (2)		327,670		232		(27	)		327,875
Debt securities issued by states of the U.S. and political subdivisions of the states (2)		21,065		26		(5	)		21,086
Total securities with a maturity of one year or less		1,206,616		2,012		(118	)		1,208,510
Corporate debt securities		428,627		2,911		(43	)		431,495
Debt securities issued by U.S. government agencies		140,988		57		(117	)		140,928
Debt securities issued by the U.S. Treasury		35,822		9		(12	)		35,819
Debt securities issued by states of the U.S. and political subdivisions of the states		19,309		18		(6	)		19,321
Total securities with a maturity of more than one year		624,746		2,995		(178	)		627,563
Total available-for-sale securities	$	1,831,362	$	5,007	$	(296	)	$	1,836,073
Equity securities:
Total equity securities included in other current assets (3)		4,712		—		(870	)		3,842
Total equity securities included in deposits and other assets (4)		10,000		—		—			10,000
Total equity securities		14,712		—		(870	)		13,842
Total available-for-sale and equity securities	$	1,846,074	$	5,007	$	(1,166	)	$	1,849,915

(1)	We hold our available-for-sale securities at amortized cost.

(2)	Includes investments classified as cash equivalents on our condensed consolidated balance sheet.

(3)	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.

(4)

Temporarily Impaired 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		54	$	104,736	$	(99	)	$	—	$	—	$	104,736	$	(99	)
Debt securities issued by U.S. government agencies		4		37,963		(32	)		7,000		—		44,963		(32	)
Debt securities issued by the U.S. Treasury		5		55,273		(13	)		—		—		55,273		(13	)
Debt securities issued by states of the U.S. and political subdivisions of the states		45		14,719		(3	)		—		—		14,719		(3	)
Other municipal debt securities		2		6,269		(23	)		—		—		6,269		(23	)
Total temporarily impaired securities		110	$	218,960	$	(170	)	$	7,000	$	—	$	225,960	$	(170	)

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2020

Fair Value Measurements [Abstract]

Assets Measured at Fair Value on a Recurring Basis

	At September 30, 2020		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents (1)	$	510,569	$	510,569	$	—	$	—
Corporate debt securities (2)		971,352		—		971,352		—
Debt securities issued by U.S. government agencies (3)		225,193		—		225,193		—
Debt securities issued by the U.S. Treasury (4)		391,252		391,252		—		—
Debt securities issued by states of the U.S. and political subdivisions of the states (5)		124,472		—		124,472		—
Other municipal debt securities (3)		7,176		—		7,176		—
Investment in ProQR Therapeutics N.V. (6)		2,147		539		—		1,608
Total	$	2,232,161	$	902,360	$	1,328,193	$	1,608

	At December 31, 2019		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents (1)	$	418,406	$	418,406	$	—	$	—
Corporate debt securities (7)		1,102,568		—		1,102,568		—
Debt securities issued by U.S. government agencies (8)		329,404		—		329,404		—
Debt securities issued by the U.S. Treasury (3)		363,694		363,694		—		—
Debt securities issued by states of the U.S. and political subdivisions of the states (3)		40,407		—		40,407		—
Investment in ProQR Therapeutics N.V. (6)		4,506		—		—		4,506
Total	$	2,258,985	$	782,100	$	1,472,379	$	4,506

The following footnotes reference lines on our condensed consolidated balance sheet:

(1)	Included in cash and cash equivalents.

(2)	$1.8 million was included in cash and cash equivalents, with the difference included in short-term investments.

(3)	Included in short-term investments.

(4)	$20.0 million was included in cash and cash equivalents, with the difference included in short-term investments.

(5)	$1.5 million was included in cash and cash equivalents, with the difference included in short-term investments.

(6)	Included in other current assets.

(7)	$19.0 million was included in cash and cash equivalents, with the difference included in short-term investments.

(8)	$0.8 million was included in cash and cash equivalents, with the difference included in short-term investments.

Collaborative Arrangements and Licensing Agreements (Tables)

9 Months Ended

Sep. 30, 2020

Biogen [Member]

Collaborative Arrangements and Licensing Agreements [Abstract]

Revenue from Collaborative Relationship

During the three and nine months ended September 30, 2020 and 2019, 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,
	2020			2019			2020			2019
SPINRAZA royalties (commercial revenue)	$	74.2		$	81.7		$	211.9		$	211.9
R&D revenue		51.2			25.5			98.6			81.9
Total revenue from our relationship with Biogen	$	125.4		$	107.2		$	310.5		$	293.8
Percentage of total revenue		78	%		64	%		71	%		47	%

AstraZeneca [Member]

Collaborative Arrangements and Licensing Agreements [Abstract]

Revenue from Collaborative Relationship

During the three and nine months ended September 30, 2020 and 2019, we earned the following revenue from our relationship with AstraZeneca (in millions, except percentage amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2020			2019			2020			2019
R&D revenue	$	3.8		$	6.6		$	34.3		$	14.3
Percentage of total revenue		2	%		4	%		8	%		2	%

Janssen Biotech, Inc. [Member]

Collaborative Arrangements and Licensing Agreements [Abstract]

Revenue from Collaborative Relationship

During the three and nine months ended September 30, 2020, we earned the following revenue from our relationship with Janssen (in millions, except percentage amounts):

	Three Months Ended September 30,			Nine Months Ended September 30,
	2020			2020
R&D revenue	$	5.0		$	5.0
Percentage of total revenue		3	%		1	%

Segment Information (Tables)

9 Months Ended

Sep. 30, 2020

Segment Information [Abstract]

Segment Information

The following tables show our segment revenue and income (loss) from operations for the three and nine months ended September 30, 2020 and 2019 (in thousands), respectively.

Three Months Ended September 30, 2020	Ionis Core		Akcea Therapeutics			Elimination of Intercompany Activity			Total
Revenue:
Commercial revenue:
SPINRAZA royalties	$	74,171	$	—		$	—		$	74,171
Product sales, net		—		19,040			—			19,040
Licensing and other royalty revenue		2,975		—			(846	)		2,129
Total commercial revenue		77,146		19,040			(846	)		95,340
R&D revenue under collaborative agreements		64,309		430			—			64,739
Total segment revenue	$	141,455	$	19,470		$	(846	)	$	160,079
Total operating expenses	$	129,657	$	69,283		$	(2,324	)	$	196,616
Loss from operations	$	11,798	$	(49,813	)	$	1,478		$	(36,537	)

Three Months Ended September 30, 2019	Ionis Core		Akcea Therapeutics			Elimination of Intercompany Activity			Total
Revenue:
Commercial revenue:
SPINRAZA royalties	$	81,672	$	—		$	—		$	81,672
Product sales, net		—		11,945			—			11,945
Licensing and other royalty revenue		1,946		136			—			2,082
Total commercial revenue		83,618		12,081			—			95,699
R&D revenue under collaborative agreements		69,165		8,543			(5,515	)		72,193
Total segment revenue	$	152,783	$	20,624		$	(5,515	)	$	167,892
Total operating expenses	$	119,147	$	53,215		$	(6,993	)	$	165,369
Income (loss) from operations	$	33,636	$	(32,591	)	$	1,478		$	2,523

Nine Months Ended September 30, 2020	Ionis Core			Akcea Therapeutics			Elimination of Intercompany Activity			Total
Revenue:
Commercial revenue:
SPINRAZA royalties	$	211,925		$	—		$	—		$	211,925
Product sales, net		—			50,562			—			50,562
Licensing and other royalty revenue		8,809			—			(2,261	)		6,548
Total commercial revenue		220,734			50,562			(2,261	)		269,035
R&D revenue under collaborative agreements		167,870			7,358			(5,280	)		169,948
Total segment revenue	$	388,604		$	57,920		$	(7,541	)	$	438,983
Total operating expenses	$	396,259		$	204,084		$	(11,944	)	$	588,399
Loss from operations	$	(7,655	)	$	(146,164	)	$	4,403		$	(149,416	)

Nine Months Ended September 30, 2019	Ionis Core		Akcea Therapeutics			Elimination of Intercompany Activity			Total
Revenue:
Commercial revenue:
SPINRAZA royalties	$	211,884	$	—		$	—		$	211,884
Product sales, net		—		28,563			—			28,563
Licensing and other royalty revenue		8,466		6,172			(3,000	)		11,638
Total commercial revenue		220,350		34,735			(3,000	)		252,085
R&D revenue under collaborative agreements		294,512		176,328			(94,007	)		376,833
Total segment revenue	$	514,862	$	211,063		$	(97,007	)	$	628,918
Total operating expenses	$	355,437	$	256,152		$	(87,900	)	$	523,689
Income (loss) from operations	$	159,425	$	(45,089	)	$	(9,107	)	$	105,229

The following table shows our total assets by segment at September 30, 2020 and December 31, 2019 (in thousands), respectively.

Total Assets	Ionis Core		Akcea Therapeutics		Elimination of Intercompany Activity			Total
September 30, 2020	$	3,436,990	$	507,977	$	(849,266	)	$	3,095,701
December 31, 2019	$	3,478,081	$	599,250	$	(844,219	)	$	3,233,112

Basis of Presentation (Details)	Sep. 30, 2020	Jun. 30, 2017
Akcea [Member]
Basis of Presentation [Abstract]
Percentage ownership	76.00%	100.00%

Significant Accounting Policies, Revenue Recognition (Details) $ in Thousands	1 Months Ended		3 Months Ended						9 Months Ended
	Feb. 28, 2017 USD ($) PerformanceObligation	May 31, 2015 USD ($)	Sep. 30, 2020 USD ($)	Jun. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($)	Jun. 30, 2018 Agreement	Sep. 30, 2020 USD ($) PerformanceObligation	Sep. 30, 2019 USD ($)
Revenue Recognition [Abstract]
Number of performance obligations at inception of contract \| PerformanceObligation									1
Revenue			$ 160,079		$ 167,892				$ 438,983	$ 628,918
Biogen [Member]
Revenue Recognition [Abstract]
Number of agreements \| Agreement								2
Licensing and Other Royalty Revenue [Member]
Revenue Recognition [Abstract]
Revenue			2,129		2,082				$ 6,548	$ 11,638
2013 Strategic Neurology [Member]
Revenue Recognition [Abstract]
Revenue			18,000		$ (16,500)
2013 Strategic Neurology [Member] \| ION464 [Member]
Revenue Recognition [Abstract]
Revenue			18,000
IONIS-FB-L for Complement-Mediated Diseases [Member]
Revenue Recognition [Abstract]
Upfront payment received							$ 75,000
2012 Neurology [Member]
Revenue Recognition [Abstract]
Milestone payment earned and amortized over period of performance			$ 12,000
Oncology [Member] \| ION736 [Member]
Revenue Recognition [Abstract]
Revenue				$ 13,000
Alnylam [Member] \| Licensing and Other Royalty Revenue [Member]
Revenue Recognition [Abstract]
Revenue						$ 20,000
Bayer [Member]
Revenue Recognition [Abstract]
Number of separate performance obligations \| PerformanceObligation	3
Bayer [Member]
Revenue Recognition [Abstract]
Upfront payment received	$ 75,000	$ 100,000
Transaction price	$ 75,000

Significant Accounting Policies, Contracts Receivable (Details)	9 Months Ended
	Sep. 30, 2020
Contracts Receivable [Abstract]
Period of time after billing when payment is received	3 months

Significant Accounting Policies, Deferred Revenue (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Deferred Revenue [Abstract]
Revenue recognized from amounts in beginning deferred revenue balance	$ 22.5	$ 30.3	$ 84.1	$ 103.5

Significant Accounting Policies, Noncontrolling Interest in Akcea (Details)	Sep. 30, 2020	Jun. 30, 2017
Akcea [Member]
Noncontrolling Interest in Akcea Therapeutics, Inc. [Abstract]
Percentage ownership	76.00%	100.00%

Significant Accounting Policies, Cash, Cash Equivalents and Investments (Details) $ in Thousands	3 Months Ended			6 Months Ended	9 Months Ended
	Sep. 30, 2020 USD ($) Company	Jun. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Jun. 30, 2020 Investment	Sep. 30, 2020 USD ($) Company	Sep. 30, 2019 USD ($)
Cash, Cash Equivalents and Investments [Abstract]
Number of publicly held companies in which there is an equity ownership interest of less than 20% \| Company	2				2
Number of privately held companies in which there is an equity ownership interest of less than 20% \| Company	5				5
Number of investments in privately held companies that were revalued \| Investment				2
Gain on investment	$ 835		$ 0		$ 10,722	$ 0
Dynacure SAS [Member]
Cash, Cash Equivalents and Investments [Abstract]
Gain on investment		$ 6,300
Ribo [Member]
Cash, Cash Equivalents and Investments [Abstract]
Gain on investment		$ 3,000

Significant Accounting Policies, Inventory Valuation (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Dec. 31, 2019
Inventory Valuation [Abstract]
Raw materials	$ 17,876	$ 15,883
Work in process	3,346	2,039
Finished goods	950	258
Total inventory	22,172	18,180
Clinical Member]
Inventory Valuation [Abstract]
Raw materials	9,294	9,363
Commercial [Member]
Inventory Valuation [Abstract]
Raw materials	$ 8,582	$ 6,520

Significant Accounting Policies, Basic and Diluted Net Income (Loss) per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Basic Net Income (Loss) per Share [Abstract]
Basic net income (loss) per share (in dollars per share)	$ (0.22)	$ 0.19	$ (0.80)	$ 0.81
Net income (loss)	$ (30,944)	$ 26,163	$ (111,015)	$ 109,730
Net income (loss) available to Ionis common shareholders	$ (31,048)	$ 26,158	$ (111,225)	$ 112,764
Weighted average shares outstanding (in shares)	139,708	140,551	139,497	139,800
Income available to Ionis common shareholders		$ 26,158		$ 112,764
Shares issuable related to our Employee Stock Purchase Plan (in shares)		20		20
Shares used in computing diluted net income per share (in shares)	139,708	143,408	139,497	142,821
Diluted net income (loss) per share (in dollars per share)	$ (0.22)	$ 0.18	$ (0.80)	$ 0.79
0.125 Percent Convertible Senior Notes [Member]
Basic Net Income (Loss) per Share [Abstract]
Interest rate on convertible senior notes	0.125%		0.125%		0.125%
1 Percent Convertible Senior Notes [Member]
Basic Net Income (Loss) per Share [Abstract]
Interest rate on convertible senior notes	1.00%	1.00%	1.00%	1.00%	1.00%
Stock Options [Member]
Basic Net Income (Loss) per Share [Abstract]
Shares issuable related to stock-based compensation (in shares)		1,993		2,208
Restricted Stock Awards [Member]
Basic Net Income (Loss) per Share [Abstract]
Shares issuable related to stock-based compensation (in shares)		844		793
Ionis [Member]
Basic Net Income (Loss) per Share [Abstract]
Net income (loss)	$ 6,774	$ 49,930	$ (3,049)	$ 140,938
Akcea [Member]
Basic Net Income (Loss) per Share [Abstract]
Net income (loss)	$ (37,822)	$ (23,772)	$ (108,176)	$ (28,174)
Akcea [Member] \| Common Stock [Member]
Basic Net Income (Loss) per Share [Abstract]
Weighted average shares owned in Akcea (in shares)	77,095	70,221	77,095	69,681
Basic net income (loss) per share (in dollars per share)	$ (0.49)	$ (0.34)	$ (1.40)	$ (0.40)
Net income (loss)	$ (37,822)	$ (23,772)	$ (108,176)	$ (28,174)

Significant Accounting Policies, Convertible Debt (Details)	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019
0.125 Percent Convertible Senior Notes [Member]
Convertible Debt [Abstract]
Interest rate on convertible senior notes	0.125%	0.125%
1 Percent Convertible Senior Notes [Member]
Convertible Debt [Abstract]
Interest rate on convertible senior notes	1.00%	1.00%	1.00%

Significant Accounting Policies, Segment Information (Details)	9 Months Ended
	Sep. 30, 2020 Segment
Segment Information [Abstract]
Number of operating segments	2

Significant Accounting Policies, Stock-Based Compensation Expense (Details) $ / shares in Units, $ in Thousands, shares in Millions	1 Months Ended	3 Months Ended		9 Months Ended
	Oct. 31, 2020 $ / shares shares	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($) Officer	Sep. 30, 2020 USD ($) $ / shares	Sep. 30, 2019 USD ($)
Weighted-Average Assumptions [Abstract]
Cash purchase price of equity awards (in dollars per share) \| $ / shares	$ 18.15
Stock-based Compensation Expense [Abstract]
Stock-based compensation expense		$ 45,845	$ 24,126	$ 135,077	$ 111,564
Cost of Products Sold [Member]
Stock-based Compensation Expense [Abstract]
Stock-based compensation expense		315	127	902	383
Research, Development and Patent [Member]
Stock-based Compensation Expense [Abstract]
Stock-based compensation expense		25,359	23,744	76,931	71,935
Selling, General and Administrative [Member]
Stock-based Compensation Expense [Abstract]
Stock-based compensation expense		20,171	255	$ 57,244	$ 39,246
Employee Stock Options [Member]
Weighted-Average Assumptions [Abstract]
Risk-free interest rate				1.50%	2.30%
Dividend yield				0.00%	0.00%
Volatility				58.80%	60.30%
Expected life				4 years 8 months 12 days	4 years 7 months 6 days
Unrecognized Compensation Expense [Abstract]
Unrecognized compensation expense related to non-vested stock options		118,200		$ 118,200
Weighted average period for recognition				1 year 2 months 12 days
Board of Director Stock Options [Member]
Weighted-Average Assumptions [Abstract]
Risk-free interest rate				0.50%	1.90%
Dividend yield				0.00%	0.00%
Volatility				57.60%	60.70%
Expected life				6 years 8 months 12 days	6 years 7 months 6 days
ESPP [Member]
Weighted-Average Assumptions [Abstract]
Risk-free interest rate				0.80%	2.40%
Dividend yield				0.00%	0.00%
Volatility				47.90%	45.60%
Expected life				6 months	6 months
RSUs [Member]
Weighted-Average Assumptions [Abstract]
Vesting period				4 years
Unrecognized Compensation Expense [Abstract]
Unrecognized compensation cost related to non-vested RSUs		87,300		$ 87,300
Weighted average period for recognition				1 year 6 months
RSUs Granted to Employees [Member]
Weighted-Average Assumptions [Abstract]
Weighted-average grant date fair value (in dollars per share) \| $ / shares				$ 61.72
RSUs Granted to Board of Directors [Member]
Weighted-Average Assumptions [Abstract]
Weighted-average grant date fair value (in dollars per share) \| $ / shares				$ 60.20
Akcea [Member]
Weighted-Average Assumptions [Abstract]
Remaining portion of available equity share pool (in shares) \| shares	2.8
Unrecognized Compensation Expense [Abstract]
Unrecognized compensation cost related to non-vested options and RSUs		59,700		$ 59,700
Stock-based Compensation Expense [Abstract]
Stock-based compensation expense		$ 13,800	$ (3,500)	$ 37,200	$ 29,500
Akcea [Member] \| Executive Officers Terminating Employment [Member]
Stock-based Compensation Expense [Abstract]
Number of executive officers terminating employment \| Officer			3
Stock-based compensation expense			$ (19,100)
Akcea [Member] \| Employee Stock Options [Member]
Weighted-Average Assumptions [Abstract]
Risk-free interest rate				1.10%	2.30%
Dividend yield				0.00%	0.00%
Volatility				75.00%	75.60%
Expected life				6 years 1 month 6 days	6 years 1 month 6 days
Akcea [Member] \| Board of Director Stock Options [Member]
Weighted-Average Assumptions [Abstract]
Risk-free interest rate				0.80%	1.80%
Dividend yield				0.00%	0.00%
Volatility				75.30%	73.80%
Expected life				5 years 8 months 12 days	6 years 3 months 18 days
Akcea [Member] \| ESPP [Member]
Weighted-Average Assumptions [Abstract]
Risk-free interest rate				1.00%	2.40%
Dividend yield				0.00%	0.00%
Volatility				71.90%	60.00%
Expected life				6 months	6 months
Akcea [Member] \| RSUs [Member]
Weighted-Average Assumptions [Abstract]
Weighted-average grant date fair value (in dollars per share) \| $ / shares				$ 15.57
Akcea [Member] \| RSUs [Member] \| Minimum [Member]
Weighted-Average Assumptions [Abstract]
Vesting period				6 months
Akcea [Member] \| RSUs [Member] \| Maximum [Member]
Weighted-Average Assumptions [Abstract]
Vesting period				4 years

Significant Accounting Policies, Amendments to Equity Plan (Details) - shares shares in Millions	Jun. 30, 2020	May 31, 2020
Significant Accounting Policies [Abstract]
Common shares reserved for future issuance (in shares)	2.8	2.0

Significant Accounting Policies, Share Repurchase Program (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended		12 Months Ended
	Mar. 31, 2020	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Significant Accounting Policies [Abstract]
Authorized amount of share repurchase program			$ 125,000
Shares repurchased (in shares)	1,500,000			535,000
Shares repurchased	$ 90,600	$ 90,548	$ 0	$ 34,400

Investments, Contract Maturity of Available-for-Sale Securities (Details)	9 Months Ended
	Sep. 30, 2020 Company
Contract Maturity of Available-for-Sale Securities [Abstract]
One year or less	71.00%
After one year but within two years	20.00%
After two years but within three years	9.00%
Total	100.00%
Percentage of available-for-sale securities with a maturity of less than two years	91.00%
Maximum contract maturity period, range 1	1 year
Maximum contract maturity period, range 2	2 years
Maximum contract maturity period, range 3	3 years
Ownership Interests in Private and Public Companies [Abstract]
Number of privately held companies in which there is an equity ownership interest of less than 20%	5
Number of publicly held companies in which there is an equity ownership interest of less than 20%	2

Investments, Summary of Investments (Details) - USD ($)
$ in Thousands

9 Months Ended

12 Months Ended

Sep. 30, 2020

Dec. 31, 2019

Summary of Investments [Abstract]

Cost

$ 1,727,379

$ 1,846,074

Gross unrealized gains

21,297

5,007

Gross unrealized losses

(2,735)

(1,166)

Estimated fair value

1,745,941

1,849,915

Available-for-sale Securities [Member]

Summary of Investments [Abstract]

Cost

^[1]

1,707,636

1,831,362

Gross unrealized gains

11,979

5,007

Gross unrealized losses

(170)

(296)

Estimated fair value

1,719,445

1,836,073

Available-for-sale Securities [Member] | Securities with Maturity of One Year or Less [Member]

Summary of Investments [Abstract]

Cost

^[1]

1,129,208

1,206,616

Gross unrealized gains

4,563

2,012

Gross unrealized losses

(22)

(118)

Estimated fair value

1,133,749

1,208,510

Available-for-sale Securities [Member] | Securities with Maturity of More than One Year [Member]

Summary of Investments [Abstract]

Cost

^[1]

578,428

624,746

Gross unrealized gains

7,416

2,995

Gross unrealized losses

(148)

(178)

Estimated fair value

585,696

627,563

Corporate Debt Securities [Member] | Securities with Maturity of One Year or Less [Member]

Summary of Investments [Abstract]

Cost

^[1],[2]

568,857

669,665

Gross unrealized gains

3,443

1,451

Gross unrealized losses

(12)

(43)

Estimated fair value

572,288

671,073

Corporate Debt Securities [Member] | Securities with Maturity of More than One Year [Member]

Summary of Investments [Abstract]

Cost

^[1]

392,836

428,627

Gross unrealized gains

6,315

2,911

Gross unrealized losses

(87)

(43)

Estimated fair value

399,064

431,495

Debt Securities issued by U.S. Government Agencies [Member] | Securities with Maturity of One Year or Less [Member]

Summary of Investments [Abstract]

Cost

^[1]

104,329

188,216

^[2]

Gross unrealized gains

391

303

Gross unrealized losses

(1)

(43)

Estimated fair value

104,719

188,476

Debt Securities issued by U.S. Government Agencies [Member] | Securities with Maturity of More than One Year [Member]

Summary of Investments [Abstract]

Cost

^[1]

120,065

140,988

Gross unrealized gains

440

Gross unrealized losses

(31)

(117)

Estimated fair value

120,474

140,928

Debt Securities issued by the U.S. Treasury [Member] | Securities with Maturity of One Year or Less [Member]

Summary of Investments [Abstract]

Cost

^[1],[2]

358,758

327,670

Gross unrealized gains

485

232

Gross unrealized losses

(7)

(27)

Estimated fair value

359,236

327,875

Debt Securities issued by the U.S. Treasury [Member] | Securities with Maturity of More than One Year [Member]

Summary of Investments [Abstract]

Cost

^[1]

31,598

35,822

Gross unrealized gains

424

Gross unrealized losses

(6)

(12)

Estimated fair value

32,016

35,819

Debt Securities issued by States of the U.S. and Political Subdivisions of the States [Member] | Securities with Maturity of One Year or Less [Member]

Summary of Investments [Abstract]

Cost

^[1]

96,363

21,065

^[2]

Gross unrealized gains

238

Gross unrealized losses

(2)

(5)

Estimated fair value

96,599

21,086

Debt Securities issued by States of the U.S. and Political Subdivisions of the States [Member] | Securities with Maturity of More than One Year [Member]

Summary of Investments [Abstract]

Cost

^[1]

27,637

19,309

Gross unrealized gains

237

Gross unrealized losses

(1)

(6)

Estimated fair value

27,873

19,321

Other Municipal Debt Securities [Member] | Securities with Maturity of One Year or Less [Member]

Summary of Investments [Abstract]

Cost

^[1]

901

Gross unrealized gains

Gross unrealized losses

Estimated fair value

907

Equity Securities [Member]

Summary of Investments [Abstract]

Cost

19,743

14,712

Gross unrealized gains

9,318

Gross unrealized losses

(2,565)

(870)

Estimated fair value

26,496

13,842

Equity Securities in Public Company [Member]

Summary of Investments [Abstract]

Cost

^[3]

4,712

Gross unrealized gains

Gross unrealized losses

(2,565)

(870)

Estimated fair value

2,147

3,842

Equity Securities in Private Companies [Member]

Summary of Investments [Abstract]

Cost

^[4]

15,031

10,000

Gross unrealized gains

9,318

Gross unrealized losses

Estimated fair value

$ 24,349

$ 10,000

[1]	We hold our available-for-sale securities at amortized cost.
[2]	Includes investments classified as cash equivalents on our condensed consolidated balance sheet.
[3]	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.
[4]	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 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 on our condensed consolidated balance sheet.

Investments, Investments Temporarily Impaired (Details) $ in Thousands	Sep. 30, 2020 USD ($) Investment
Temporarily Impaired Investments [Abstract]
Number of investments \| Investment	110
Estimated fair value, less than 12 months of temporary impairment	$ 218,960
Unrealized losses, less than 12 months of temporary impairment	(170)
Estimated fair value, more than 12 months of temporary impairment	7,000
Unrealized losses, more than 12 months of temporary impairment	0
Estimated fair value, total temporary impairment	225,960
Unrealized losses, total temporary impairment	$ (170)
Corporate Debt Securities [Member]
Temporarily Impaired Investments [Abstract]
Number of investments \| Investment	54
Estimated fair value, less than 12 months of temporary impairment	$ 104,736
Unrealized losses, less than 12 months of temporary impairment	(99)
Estimated fair value, more than 12 months of temporary impairment	0
Unrealized losses, more than 12 months of temporary impairment	0
Estimated fair value, total temporary impairment	104,736
Unrealized losses, total temporary impairment	$ (99)
Debt Securities issued by U.S. Government Agencies [Member]
Temporarily Impaired Investments [Abstract]
Number of investments \| Investment	4
Estimated fair value, less than 12 months of temporary impairment	$ 37,963
Unrealized losses, less than 12 months of temporary impairment	(32)
Estimated fair value, more than 12 months of temporary impairment	7,000
Unrealized losses, more than 12 months of temporary impairment	0
Estimated fair value, total temporary impairment	44,963
Unrealized losses, total temporary impairment	$ (32)
Debt Securities issued by the U.S. Treasury [Member]
Temporarily Impaired Investments [Abstract]
Number of investments \| Investment	5
Estimated fair value, less than 12 months of temporary impairment	$ 55,273
Unrealized losses, less than 12 months of temporary impairment	(13)
Estimated fair value, more than 12 months of temporary impairment	0
Unrealized losses, more than 12 months of temporary impairment	0
Estimated fair value, total temporary impairment	55,273
Unrealized losses, total temporary impairment	$ (13)
Debt Securities issued by States of the U.S. and Political Subdivisions of the States [Member]
Temporarily Impaired Investments [Abstract]
Number of investments \| Investment	45
Estimated fair value, less than 12 months of temporary impairment	$ 14,719
Unrealized losses, less than 12 months of temporary impairment	(3)
Estimated fair value, more than 12 months of temporary impairment	0
Unrealized losses, more than 12 months of temporary impairment	0
Estimated fair value, total temporary impairment	14,719
Unrealized losses, total temporary impairment	$ (3)
Other Municipal Debt Securities [Member]
Temporarily Impaired Investments [Abstract]
Number of investments \| Investment	2
Estimated fair value, less than 12 months of temporary impairment	$ 6,269
Unrealized losses, less than 12 months of temporary impairment	(23)
Estimated fair value, more than 12 months of temporary impairment	0
Unrealized losses, more than 12 months of temporary impairment	0
Estimated fair value, total temporary impairment	6,269
Unrealized losses, total temporary impairment	$ (23)

Fair Value Measurements (Details) - USD ($)
$ in Thousands

Sep. 30, 2020

Dec. 31, 2019

Sep. 30, 2019

1 Percent Convertible Senior Notes [Member]

Fair Value Measurements [Abstract]

Interest rate on convertible senior notes

1.00%

0.125 Percent Convertible Senior Notes [Member]

Fair Value Measurements [Abstract]

Interest rate on convertible senior notes

0.125%

Significant Other Observable Inputs (Level 2) [Member] | 1 Percent Convertible Senior Notes [Member]

Fair Value Measurements [Abstract]

Fair value of convertible notes

$ 325,000

Significant Other Observable Inputs (Level 2) [Member] | 0.125 Percent Convertible Senior Notes [Member]

Fair Value Measurements [Abstract]

Fair value of convertible notes

508,100

Recurring Basis [Member]

Fair Value Measurements [Abstract]

Cash equivalents

^[1]

510,569

$ 418,406

Investment in ProQR Therapeutics N.V.

^[2]

2,147

4,506

Total

2,232,161

2,258,985

Recurring Basis [Member] | Corporate Debt Securities [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

971,352

^[3]

1,102,568

^[4]

Recurring Basis [Member] | Corporate Debt Securities [Member] | Cash and Cash Equivalents [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

1,800

19,000

Recurring Basis [Member] | Debt Securities issued by U.S. Government Agencies [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

225,193

^[5]

329,404

^[6]

Recurring Basis [Member] | Debt Securities issued by U.S. Government Agencies [Member] | Cash and Cash Equivalents [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

800

Recurring Basis [Member] | Debt Securities issued by the U.S. Treasury [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

391,252

^[7]

363,694

^[5]

Recurring Basis [Member] | Debt Securities issued by the U.S. Treasury [Member] | Cash and Cash Equivalents [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

20,000

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

124,472

^[8]

40,407

^[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

1,500

Recurring Basis [Member] | Other Municipal Debt Securities [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

^[5]

7,176

Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member]

Fair Value Measurements [Abstract]

Cash equivalents

510,569

418,406

Investment in ProQR Therapeutics N.V.

539

Total

902,360

782,100

Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | Corporate Debt Securities [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

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

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

391,252

363,694

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

Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member] | Other Municipal Debt Securities [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member]

Fair Value Measurements [Abstract]

Cash equivalents

Investment in ProQR Therapeutics N.V.

Total

1,328,193

1,472,379

Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate Debt Securities [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

971,352

^[3]

1,102,568

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

225,193

329,404

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

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

124,472

40,407

Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Other Municipal Debt Securities [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

7,176

Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member]

Fair Value Measurements [Abstract]

Cash equivalents

Investment in ProQR Therapeutics N.V.

1,608

4,506

Total

1,608

4,506

Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Corporate Debt Securities [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

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

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

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

Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Other Municipal Debt Securities [Member]

Fair Value Measurements [Abstract]

Available-for-sale securities

$ 0

[1]	Included in cash and cash equivalents.
[2]	Included in other current assets.
[3]	$1.8 million was included in cash and cash equivalents, with the difference included in short-term investments.
[4]	$19.0 million was included in cash and cash equivalents, with the difference included in short-term investments.
[5]	Included in short-term investments.
[6]	$0.8 million was included in cash and cash equivalents, with the difference included in short-term investments.
[7]	$20.0 million was included in cash and cash equivalents, with the difference included in short-term investments.
[8]	$1.5 million was included in cash and cash equivalents, with the difference included in short-term investments.

Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
Income Taxes (Details) - USD ($) $ in Thousands	Sep. 30, 2020	Mar. 31, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Taxes [Abstract]
Percentage of taxable income that can be offset with federal net operating losses		100.00%
Tax benefit related to CARES Act		$ (1,700)
Income tax expense (benefit)	$ 2,648		$ (14,915)	$ (1,047)	$ 9,204
Effective tax rate				0.70%
Federal statutory rate				21.00%
Akcea [Member]
Income Taxes [Abstract]
Tax benefit related to CARES Act		$ (1,700)		$ (1,700)

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Collaborative Arrangements and Licensing Agreements, Biogen (Details) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2020 USD ($) Medicine	Mar. 31, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) Medicine	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	$ 160,079		$ 167,892	$ 438,983	$ 628,918
SPINRAZA Royalties [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	74,171		81,672	211,925	211,884
R&D Revenue [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	$ 64,739		72,193	$ 169,948	376,833
Biogen [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Number of medicines currently being developed \| Medicine	8			8
Revenue	$ 125,400		$ 107,200	$ 310,500	$ 293,800
Deferred revenue	$ 475,500			$ 475,500		$ 525,800
Biogen [Member] \| Revenue [Member] \| Strategic Partner [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Concentration percentage	78.00%		64.00%	71.00%	47.00%
Biogen [Member] \| Minimum [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Cumulative payments received	$ 2,700,000			$ 2,700,000
Biogen [Member] \| SPINRAZA Royalties [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	74,200		$ 81,700	211,900	$ 211,900
Biogen [Member] \| R&D Revenue [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	51,200		25,500	98,600	$ 81,900
2012 Neurology [Member] \| Maximum [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Next prospective payment	25,000			25,000
2012 Neurology [Member] \| IONIS-MAPT [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Milestone payment achieved	12,000	$ 7,500
Cumulative payments included in transaction price for performance obligation	57,000			57,000
2013 Strategic Neurology [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	18,000		$ (16,500)
2013 Strategic Neurology [Member] \| Maximum [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Next prospective payment	10,000			$ 10,000
2013 Strategic Neurology [Member] \| ION464 [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	18,000
2013 Strategic Neurology [Member] \| ION541 [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	$ 10,000

Collaborative Arrangements and Licensing Agreements, AstraZeneca (Details) $ in Thousands	3 Months Ended				9 Months Ended
	Sep. 30, 2020 USD ($) Agreement	Jun. 30, 2020 USD ($)	Mar. 31, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) Agreement	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	$ 160,079			$ 167,892	$ 438,983	$ 628,918
R&D Revenue [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	$ 64,739			$ 72,193	$ 169,948	$ 376,833
AstraZeneca [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Number of collaboration agreements \| Agreement	2				2
Cumulative payments received	$ 330,000				$ 330,000
Deferred revenue	$ 13,800				$ 13,800		$ 25,000
AstraZeneca [Member] \| Revenue [Member] \| Strategic Partner [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Concentration percentage	2.00%			4.00%	8.00%	2.00%
AstraZeneca [Member] \| R&D Revenue [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	$ 3,800			$ 6,600	$ 34,300	$ 14,300
Cardiovascular, Renal and Metabolic Diseases [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Number of collaboration agreements \| Agreement	1				1
Milestone payment achieved			$ 10,000
Cardiovascular, Renal and Metabolic Diseases [Member] \| Maximum [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Next prospective payment	$ 30,000				$ 30,000
Cardiovascular, Renal and Metabolic Diseases [Member] \| R&D Revenue [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue			$ 10,000
Oncology [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Number of collaboration agreements \| Agreement	1				1
Next prospective payment	$ 12,000				$ 12,000
Oncology [Member] \| R&D Revenue [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue		$ 13,000

Collaborative Arrangements and Licensing Agreements, Janssen Biotech, Inc. (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019	Dec. 31, 2019
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	$ 160,079	$ 167,892	$ 438,983	$ 628,918
R&D Revenue [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	64,739	72,193	169,948	376,833
Janssen Biotech, Inc. [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Cumulative payments received	80,000		80,000
Revenue	5,000
Deferred revenue	0		0		$ 0
Milestone payment achieved	5,000
Next prospective payment	$ 5,000		$ 5,000
Janssen Biotech, Inc. [Member] \| Revenue [Member] \| Strategic Partner [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Concentration percentage	3.00%		1.00%
Janssen Biotech, Inc. [Member] \| R&D Revenue [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Revenue	$ 5,000	$ 0	$ 5,000	$ 0

Collaborative Arrangements and Licensing Agreements, Pfizer (Details) - Pfizer [Member] - USD ($) $ in Millions	1 Months Ended
	Oct. 31, 2020	Sep. 30, 2020
Subsequent Event [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Milestone payment earned	$ 75
Next prospective milestone	$ 50
Minimum [Member]
Collaborative Arrangement and Licensing Agreement [Abstract]
Cumulative payments received		$ 255

Segment Information (Details) $ in Thousands	3 Months Ended		9 Months Ended
Segment Information (Details) $ in Thousands	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) Segment	Sep. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)	Jun. 30, 2017
Segment Information [Abstract]
Number of reportable segments \| Segment			2
Segment Information [Abstract]
Revenue	$ 160,079	$ 167,892	$ 438,983	$ 628,918
Total operating expenses	196,616	165,369	588,399	523,689
Income (loss) from operations	(36,537)	2,523	(149,416)	105,229
Total assets	3,095,701		3,095,701		$ 3,233,112
Commercial Revenue [Member]
Segment Information [Abstract]
Revenue	95,340	95,699	269,035	252,085
SPINRAZA Royalties [Member]
Segment Information [Abstract]
Revenue	74,171	81,672	211,925	211,884
Product Sales, Net [Member]
Segment Information [Abstract]
Revenue	19,040	11,945	50,562	28,563
Licensing and Other Royalty Revenue [Member]
Segment Information [Abstract]
Revenue	2,129	2,082	6,548	11,638
R&D Revenue Under Collaborative Agreements [Member]
Segment Information [Abstract]
Revenue	$ 64,739	72,193	$ 169,948	376,833
Akcea [Member]
Segment Information [Abstract]
Percentage ownership	76.00%		76.00%			100.00%
Operating Segments [Member] \| Ionis Core [Member]
Segment Information [Abstract]
Revenue	$ 141,455	152,783	$ 388,604	514,862
Total operating expenses	129,657	119,147	396,259	355,437
Income (loss) from operations	11,798	33,636	(7,655)	159,425
Total assets	3,436,990		3,436,990		3,478,081
Operating Segments [Member] \| Ionis Core [Member] \| Commercial Revenue [Member]
Segment Information [Abstract]
Revenue	77,146	83,618	220,734	220,350
Operating Segments [Member] \| Ionis Core [Member] \| SPINRAZA Royalties [Member]
Segment Information [Abstract]
Revenue	74,171	81,672	211,925	211,884
Operating Segments [Member] \| Ionis Core [Member] \| Product Sales, Net [Member]
Segment Information [Abstract]
Revenue	0	0	0	0
Operating Segments [Member] \| Ionis Core [Member] \| Licensing and Other Royalty Revenue [Member]
Segment Information [Abstract]
Revenue	2,975	1,946	8,809	8,466
Operating Segments [Member] \| Ionis Core [Member] \| R&D Revenue Under Collaborative Agreements [Member]
Segment Information [Abstract]
Revenue	64,309	69,165	167,870	294,512
Operating Segments [Member] \| Akcea Therapeutics [Member]
Segment Information [Abstract]
Revenue	19,470	20,624	57,920	211,063
Total operating expenses	69,283	53,215	204,084	256,152
Income (loss) from operations	(49,813)	(32,591)	(146,164)	(45,089)
Total assets	507,977		507,977		599,250
Operating Segments [Member] \| Akcea Therapeutics [Member] \| Commercial Revenue [Member]
Segment Information [Abstract]
Revenue	19,040	12,081	50,562	34,735
Operating Segments [Member] \| Akcea Therapeutics [Member] \| SPINRAZA Royalties [Member]
Segment Information [Abstract]
Revenue	0	0	0	0
Operating Segments [Member] \| Akcea Therapeutics [Member] \| Product Sales, Net [Member]
Segment Information [Abstract]
Revenue	19,040	11,945	50,562	28,563
Operating Segments [Member] \| Akcea Therapeutics [Member] \| Licensing and Other Royalty Revenue [Member]
Segment Information [Abstract]
Revenue	0	136	0	6,172
Operating Segments [Member] \| Akcea Therapeutics [Member] \| R&D Revenue Under Collaborative Agreements [Member]
Segment Information [Abstract]
Revenue	430	8,543	7,358	176,328
Elimination of Intercompany Activity [Member]
Segment Information [Abstract]
Revenue	(846)	(5,515)	(7,541)	(97,007)
Total operating expenses	(2,324)	(6,993)	(11,944)	(87,900)
Income (loss) from operations	1,478	1,478	4,403	(9,107)
Total assets	(849,266)		(849,266)		$ (844,219)
Elimination of Intercompany Activity [Member] \| Commercial Revenue [Member]
Segment Information [Abstract]
Revenue	(846)	0	(2,261)	(3,000)
Elimination of Intercompany Activity [Member] \| SPINRAZA Royalties [Member]
Segment Information [Abstract]
Revenue	0	0	0	0
Elimination of Intercompany Activity [Member] \| Product Sales, Net [Member]
Segment Information [Abstract]
Revenue	0	0	0	0
Elimination of Intercompany Activity [Member] \| Licensing and Other Royalty Revenue [Member]
Segment Information [Abstract]
Revenue	(846)	0	(2,261)	(3,000)
Elimination of Intercompany Activity [Member] \| R&D Revenue Under Collaborative Agreements [Member]
Segment Information [Abstract]
Revenue	$ 0	$ (5,515)	$ (5,280)	$ (94,007)