Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2019

Significant Accounting Policies [Abstract]

Our basic net income per share for the three months ended March 31, 2019, was calculated as follows (in thousands, except per share amounts):

Three months ended March 31, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Income Per Share		Ionis’ Portion of Akcea’s Net Loss

Common shares		68,582	$	0.35	$	23,846
Akcea’s net income attributable to our ownership					$	23,846
Ionis’ stand-alone net income						63,697
Net income available to Ionis common stockholders					$	87,543
Weighted average shares outstanding						138,582
Basic net income per share					$	0.63

Our basic net loss per share for the three months ended March 31, 2018, was calculated as follows (in thousands, except per share amounts):

Three months ended March 31, 2018	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Ionis’ Portion of Akcea’s Net Loss

Common shares		45,448	$	(0.44	)	$	(19,997	)
Akcea’s net loss attributable to our ownership						$	(19,997	)
Ionis’ stand-alone net income							18,785
Net loss available to Ionis common stockholders						$	(1,212	)
Weighted average shares outstanding							125,330
Basic net loss per share						$	(0.01	)

Basic and Diluted Net Income Per Share

We calculated our diluted net income per share for the three months ended March 31, 2019 as follows (in thousands except per share amounts):

Three months ended March 31, 2019	Income (Numerator)		Shares (Denominator)		Per-Share Amount

Net income available to Ionis common stockholders	$	87,543		138,582	$	0.63
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		2,252
Shares issuable upon restricted stock award issuance		—		665
Shares issuable related to our ESPP		—		38
Income available to Ionis common stockholders	$	87,543		141,537	$	0.62

Significant Accounting Policies [Abstract]

Weighted-Average Assumptions for Stock Options

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 three months ended March 31, 2019 and 2018, we used the following weighted-average assumptions in our Black-Scholes calculations:

Ionis Employee Stock Options:

	Three Months Ended March 31,
	2019		2018
Risk-free interest rate		2.4%		2.2%
Dividend yield		0.0%		0.0%
Volatility		60.3%		63.2%
Expected life		4.6 years		4.6 years

Weighted-Average Assumptions for ESPP

Ionis ESPP:

	Three Months Ended March 31,
	2019		2018
Risk-free interest rate		2.5%		1.6%
Dividend yield		0.0%		0.0%
Volatility		45.5%		44.4%
Expected life		6 months		6 months

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense for the three months ended March 31, 2019 and 2018 (in thousands). Our non-cash stock-based compensation expense includes $18.6 million and $6.4 million of stock-based compensation expense for Akcea employees for the three months ended March 31, 2019 and 2018, respectively.

	Three Months Ended March 31,
	2019		2018
Cost of products sold	$	118	$	—
Research, development and patent		24,435		19,682
Selling, general and administrative		20,952		8,769
Total	$	45,505	$	28,451

Akcea [Member]

Significant Accounting Policies [Abstract]

Weighted-Average Assumptions for Stock Options

In addition to our stock plans, Akcea has its own stock plan under which it grants options and RSUs and under which it derives its stock-based compensation expense. The following are the weighted-average Black-Scholes assumptions Akcea used under its plan for the three months ended March 31, 2019 and March 31, 2018:

Akcea Employee Stock Options:

	Three Months Ended March 31,
	2019		2018
Risk-free interest rate		2.5%		2.6%
Dividend yield		—		—
Volatility		76.4%		77.1%
Expected life		6.1 years		6.1 years

Weighted-Average Assumptions for ESPP

Akcea ESPP:

	Three Months Ended March 31,
	2019		2018
Risk-free interest rate		2.5%		1.6%
Dividend yield		—		—
Volatility		64.1%		62.3%
Expected life		6 months		6 months