Collaborative Arrangements and Licensing Agreements

6 Months Ended

Jun. 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 six 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. In December 2017, we entered into a collaboration with Biogen to identify new antisense medicines for the treatment of SMA. We and Biogen are currently developing eight medicines to treat neurodegenerative diseases under these collaborations, including medicines to treat people with ALS, Alzheimer’s disease and Parkinson’s disease. In addition to these medicines, our collaborations with Biogen include a substantial research pipeline that addresses a broad range of neurological diseases. From inception through June 2020, we have received more than $2.6 billion from our Biogen collaborations.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
SPINRAZA royalties (commercial revenue)	$	71.7		$	70.5		$	137.8		$	130.2
R&D revenue		26.0			31.9			47.4			56.4
Total revenue from our relationship with Biogen	$	97.7		$	102.4		$	185.2		$	186.6
Percentage of total revenue		67	%		63	%		66	%		41	%

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

Our condensed consolidated balance sheet at June 30, 2020 and December 31, 2019 included deferred revenue of $486.6 million and $525.8 million, respectively, related to our relationship with Biogen.

2012 Neurology

In the first quarter of 2020, we achieved a $7.5 million milestone payment from Biogen when we advanced IONIS-MAPT_Rx in development. This milestone payment did not create a new performance obligation because it is part of our performance obligation to conduct development of IONIS-MAPT_Rx. Therefore, we included the $7.5 million milestone payment in our transaction price for our IONIS-MAPT_Rx development performance obligation. We are recognizing revenue for our IONIS-MAPT_Rx development performance obligation based on the percentage of completion. From inception through June 2020, we have included $45.0 million in the transaction price for our IONIS-MAPT_Rx development performance obligation. We currently estimate we will satisfy our performance obligation in 2022. In August 2020, we achieved a $12 million milestone payment from Biogen when we advanced IONIS-MAPT_Rx. We will achieve the next payment of up to $25 million if we continue to advance IONIS-MAPT_Rx.

2013 Strategic Neurology

In July 2020, we achieved $18 million in milestone payments from Biogen when Biogen initiated a Phase 1/2 trial for ION464, a medicine targeting alpha-synuclein to treat patients with multiple system atrophy. We will achieve the next payment of up to $10 million if Biogen advances one of the medicines 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 to treat people with cardiovascular disease, a genetically associated form of kidney disease, nonalcoholic steatohepatitis, or NASH and cancer. From inception through June 2020, we have received more than $300 million from our AstraZeneca collaborations.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
R&D revenue	$	16.8		$	3.8		$	30.5		$	7.8
Percentage of total revenue		12	%		2	%		11	%		2	%

Our condensed consolidated balance sheet at June 30, 2020 and December 31, 2019 included deferred revenue of $17.5 million and $25.0 million, respectively, related to our relationship with AstraZeneca.

During the first six months of 2020, we did not have any changes to our performance obligations 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 targeting APOL1 for the treatment of kidney disease, in development. 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 targeting FOXP3 to treat 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, a medicine for the treatment of immune-mediated GI disease, under this collaboration.

In July 2020, we achieved a $5 million milestone payment from Janssen when Janssen initiated a Phase 1 trial for ION253. We will achieve the next payment of $5 million if Janssen advances ION253 in development.