Organization and Basis of Presentation

9 Months Ended

Sep. 30, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Basis of Presentation

1. Organization and Basis of Presentation

We were incorporated in Delaware in December 2014. We were organized by Ionis Pharmaceuticals, Inc., or Ionis, to focus on developing and commercializing drugs to treat patients with rare and serious diseases. On July 19, 2017, we completed our initial public offering, or IPO. As of September 30, 2019, Ionis owned approximately 75% of our common stock and is our majority shareholder. Prior to our IPO, we were wholly owned by Ionis.

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP.

The condensed consolidated financial statements include the accounts of Akcea Therapeutics, Inc. and our wholly owned subsidiaries ("we," "our," and "us"). All intercompany transactions and balances were eliminated in consolidation. We included all normal recurring adjustments in the financial statements that we considered necessary for a fair presentation of our financial position and our operating results and cash flows for the interim periods ended September 30, 2019 and 2018. Certain amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. Results for the interim periods are not necessarily indicative of the results 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 included in our Annual Report on Form 10-K for the year ended December 31, 2018.

In accordance with Accounting Standards Codification, or ASC, 205-40, Going Concern, we evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. We have incurred losses since our inception and have funded our cash flow deficits primarily through the issuance of capital stock and the proceeds from licensing and collaboration agreements. As of September 30, 2019, we had an accumulated deficit of $563.7 million. During the three and nine months ended September 30, 2019, we generated losses of $31.5 and $41.6 million, respectively, and during the nine months ended September 30, 2019, we provided $15.1 million in cash from operations. We expect to generate operating losses and negative operating cash flows for the foreseeable future; however, we may generate positive cash flows from out-licensing transactions such as the Pfizer transaction that is currently subject to regulatory approval and would result in significant upfront cash flows during the fourth quarter of 2019 if approved. The transition to sustained profitability is dependent upon the successful development, approval, and commercialization of our products and product candidates and the achievement of a level of revenue adequate to support our cost structure. We believe that our currently available funds of $252.7 million as of September 30, 2019, cash expected to be generated from sales of TEGSEDI, which has been approved in the U.S., the European Union, or E.U., and Canada, and cash expected to be generated from sales of WAYLIVRA, which has been approved in the E.U., will be sufficient to fund our operations through at least the next 12 months from the issuance of this Quarterly Report on Form 10-Q. Management’s belief with respect to its ability to fund operations is based on estimates that are subject to risks and uncertainties. If actual results are different from management’s estimates, we may need to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and commercialize our drugs even if we would otherwise prefer to develop and commercialize the drugs ourselves. For additional detail regarding our license agreement with Pfizer, see Note 13, Subsequent Events.