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Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Significant Accounting Policies [Abstract]

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 Loss Per Share			Ionis’ Portion of Akcea’s Net Loss
Common shares		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			Ionis’ Portion of Akcea’s Net Loss
Common shares		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

Our basic net loss per share for the three months ended September 30, 2018, was calculated as follows (in thousands, except per share amounts):

Three months ended September 30, 2018	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Ionis’ Portion of Akcea’s Net Loss
Common shares		65,538	$	(0.73	)	$	(47,843	)
Akcea’s net loss attributable to our ownership						$	(47,843	)
Ionis’ stand-alone net income							43,226
Net loss available to Ionis common stockholders						$	(4,617	)
Weighted average shares outstanding							137,346
Basic net loss per share						$	(0.03	)

Our basic net loss per share for the nine months ended September 30, 2018, was calculated as follows (in thousands, except per share amounts):

Nine months ended September 30, 2018	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Ionis’ Portion of Akcea’s Net Loss
Common shares		57,347	$	(1.93	)	$	(110,680	)
Akcea’s net loss attributable to our ownership						$	(110,680	)
Ionis’ stand-alone net income							67,517
Net loss available to Ionis common stockholders						$	(43,163	)
Weighted average shares outstanding							130,507
Basic net loss per share						$	(0.33	)

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

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, 2019 and 2018, we used the following weighted-average assumptions in our Black-Scholes calculations:

Ionis Employee Stock Options:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		2.3	%		2.3	%
Dividend yield		0.0	%		0.0	%
Volatility		60.3	%		63.1	%
Expected life	4.6 years			4.6 years

Ionis Board of Director Stock Options:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		1.9	%		2.8	%
Dividend yield		0.0	%		0.0	%
Volatility		60.7	%		61.5	%
Expected life	6.6 years			6.6 years

Weighted-Average Assumptions for ESPP

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		2.4	%		1.8	%
Dividend yield		0.0	%		0.0	%
Volatility		45.6	%		47.3	%
Expected life	6 months			6 months

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2019 and 2018 (in thousands).

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Cost of products sold	$	127	$	—	$	383	$	—
Research, development and patent		23,744		18,780		71,935		57,698
Selling, general and administrative		255		16,103		39,246		39,512
Total non-cash stock-based compensation expense	$	24,126	$	34,883	$	111,564	$	97,210

Akcea [Member]

Significant Accounting Policies [Abstract]

Weighted-Average Assumptions for Stock Options

The following are the weighted-average Black-Scholes assumptions Akcea used under its plan for the nine months ended September 30, 2019 and 2018:

Akcea Employee Stock Options:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		2.3	%		2.7	%
Dividend yield		0.0	%		0.0	%
Volatility		75.6	%		77.1	%
Expected life	6.1 years			6.1 years

Akcea Board of Directors Stock Options:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		1.8	%		2.9	%
Dividend yield		0.0	%		0.0	%
Volatility		73.8	%		78.2	%
Expected life	6.3 years			6.4 years

Weighted-Average Assumptions for ESPP

Akcea ESPP:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		2.4	%		1.9	%
Dividend yield		0.0	%		0.0	%
Volatility		60.0	%		64.2	%
Expected life	6 months			6 months