XML 51 R16.htm IDEA: XBRL DOCUMENT v3.8.0.1
Segment Information and Concentration of Business Risk
12 Months Ended
Dec. 31, 2017
Segment Information and Concentration of Business Risk [Abstract]  
Segment Information and Concentration of Business Risk
7. Segment Information and Concentration of Business Risk

We have two reportable segments Ionis Core and Akcea Therapeutics. Prior to Akcea’s IPO in July 2017, we owned 100 percent of Akcea’s stock and consolidated 100 percent of Akcea’s results in our financial statements. After Akcea’s IPO, we owned approximately 68 percent of Akcea. As a result, beginning in the third quarter of 2017, we began adjusting our financial statements to reflect the noncontrolling interest that we no longer own in Akcea. Our reportable segments remain unchanged as a result of Akcea’s IPO. Segment income (loss) from operations includes revenue less operating expenses attributable to each segment.

In our Ionis Core segment we are exploiting a novel drug discovery platform we created to generate a broad pipeline of first-in-class and/or best-in-class drugs for us and our partners. Our Ionis Core segment generates revenue from a multifaceted partnering strategy and includes multiple streams of revenue including license fees, milestone payments and royalties, among others.

Akcea is a late-stage biopharmaceutical company focused on developing and commercializing drugs to treat people with serious cardiometabolic diseases caused by lipid disorders.

The following tables show our segment revenue and income (loss) from operations for 2017, 2016 and 2015 (in thousands), respectively.



2017
 
Ionis Core
  
Akcea Therapeutics
  
Elimination of
Intercompany Activity
  
Total
 
Revenue:
            
Commercial revenue:
            
SPINRAZA royalties
 
$
112,540
  
$
  
$
  
$
112,540
 
Licensing and other royalty revenue
  
9,519
   
   
   
9,519
 
Total commercial revenue
  
122,059
   
   
   
122,059
 
R&D revenue under collaborative agreements
  
384,805
   
55,209
   
(54,407
)
  
385,607
 
Total segment revenue
 
$
506,864
  
$
55,209
  
$
(54,407
)
 
$
507,666
 
Total operating expenses
 
$
373,788
  
$
163,871
  
$
(54,527
)
 
$
483,132
 
Income (loss) from operations
 
$
133,076
  
$
(108,662
)
 
$
120
  
$
24,534
 


2016
 
Ionis Core
  
Akcea Therapeutics
  
Elimination of
Intercompany Activity
  
Total
 
Revenue:
            
Commercial revenue:
            
SPINRAZA royalties
 
$
883
  
$
  
$
  
$
883
 
Licensing and other royalty revenue
  
19,839
   
   
   
19,839
 
Total commercial revenue
  
20,722
   
   
   
20,722
 
R&D revenue under collaborative agreements
  
338,546
   
   
(12,648
)
  
325,898
 
Total segment revenue
 
$
359,268
  
$
  
$
(12,648
)
 
$
346,620
 
Total operating expenses
 
$
322,192
  
$
83,512
  
$
(12,768
)
 
$
392,936
 
Income (loss) from operations
 
$
37,076
  
$
(83,512
)
 
$
120
  
$
(46,316
)

2015
 
Ionis Core
  
Akcea Therapeutics
  
Elimination of
Intercompany Activity
  
Total
 
Revenue:
            
R&D revenue under collaborative agreements
 
$
284,015
  
$
  
$
(2,655
)
 
$
281,360
 
Licensing and other royalty revenue
  
2,343
   
   
   
2,343
 
Total segment revenue
 
$
286,358
  
$
  
$
(2,655
)
 
$
283,703
 
Total operating expenses
 
$
309,492
  
$
52,748
  
$
(2,775
)
 
$
359,465
 
Income (loss) from operations
 
$
(23,134
)
 
$
(52,748
)
 
$
120
  
$
(75,762
)

The following table shows our total assets by segment at December 31, 2017 and 2016 (in thousands), respectively.

Total Assets
 
Ionis Core
  
Akcea Therapeutics
  
Elimination of
Intercompany Activity
  
Total
 
December 31, 2017
 
$
1,341,828
  
$
268,804
  
$
(288,608
)
 
$
1,322,024
 
December 31, 2016
 
$
1,067,770
  
$
10,684
  
$
(165,987
)
 
$
912,467
 

We have historically funded our operations from collaborations with corporate partners and a relatively small number of partners have accounted for a significant percentage of our revenue. Revenue from significant partners, which is defined as 10 percent or more of our total revenue, was as follows:

  
2017
  
2016
  
2015
 
Partner A
  
51
%
  
60
%
  
37
%
Partner B
  
14
%
  
2
%
  
33
%
Partner C
  
10
%
  
2
%
  
11
%
Partner D
  
11
%
  
0
%
  
0
%
Partner E
  
3
%
  
19
%
  
2
%
Partner F
  
2
%
  
4
%
  
12
%

Contracts receivables at December 31, 2017 and December 31, 2016 were comprised of approximately 84 percent and 92  percent for each year from two significant partners, respectively.