Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2020

Significant Accounting Policies [Abstract]

Inventory

We review our inventory periodically and reduce the carrying value of items we consider to be slow moving or obsolete to their estimated net realizable value based on forecasted demand compared to quantities on hand. We consider several factors in estimating the net realizable value, including shelf life of our inventory, alternative uses for our medicines in development and historical write-offs. We did not record any material inventory write-offs for the six months ended June 30, 2020. Total inventory was $23.7 million and $18.2 million as of June 30, 2020 and December 31, 2019, respectively, and consisted of the following (in thousands):

	June 30, 2020		December 31, 2019
Raw materials:
Raw materials- clinical	$	9,967	$	9,363
Raw materials- commercial		9,543		6,520
Total raw materials		19,510		15,883
Work in process		3,471		2,039
Finished goods		741		258
Total inventory	$	23,722	$	18,180

Basic Net Income per Share

Our basic net loss per share for the three months ended June 30, 2020, was calculated as follows (in thousands, except per share amounts):

Three months ended June 30, 2020	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Loss Per Share Calculation
Ionis’ portion of Akcea’s net loss		77,095	$	(0.49	)	$	(37,665	)
Akcea’s net loss attributable to our ownership						$	(37,665	)
Ionis’ stand-alone net income							5,807
Net loss available to Ionis common stockholders						$	(31,858	)
Weighted average shares outstanding							139,352
Basic net loss per share						$	(0.23	)

Our basic net loss per share for the six months ended June 30, 2020, was calculated as follows (in thousands, except per share amounts):

Six months ended June 30, 2020	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Loss Per Share Calculation
Ionis’ portion of Akcea’s net loss		77,095	$	(0.91	)	$	(70,348	)
Akcea’s net loss attributable to our ownership						$	(70,348	)
Ionis’ stand-alone net loss							(9,822	)
Net loss available to Ionis common stockholders						$	(80,170	)
Weighted average shares outstanding							139,391
Basic net loss per share						$	(0.58	)

Our basic net loss per share for the three months ended June 30, 2019, was calculated as follows (in thousands, except per share amounts):

Three months ended June 30, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Income Per Share			Basic Net Loss Per Share Calculation
Ionis’ portion of Akcea’s net loss		70,221	$	(0.40	)	$	(28,244	)
Akcea’s net loss attributable to our ownership						$	(28,244	)
Ionis’ stand-alone net income							27,311
Net loss available to Ionis common stockholders						$	(933	)
Weighted average shares outstanding							140,247
Basic net loss per share						$	(0.01	)

Our basic net income per share for the six months ended June 30, 2019, was calculated as follows (in thousands, except per share amounts):

Six months ended June 30, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Income Per Share Calculation
Ionis’ portion of Akcea’s net loss		69,406	$	(0.06	)	$	(4,380	)
Akcea’s net loss attributable to our ownership						$	(4,380	)
Ionis’ stand-alone net income							91,008
Net income available to Ionis common stockholders						$	86,628
Weighted average shares outstanding							139,419
Basic net income per share						$	0.62

Basic and Diluted Net Income Per Share

We calculated our diluted net income per share for the six months ended June 30, 2019 as follows (in thousands except per share amounts):

Six months ended June 30, 2019	Income (Numerator)		Shares (Denominator)		Per-Share Amount
Net income available to Ionis common stockholders	$	86,628		139,419	$	0.62
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		2,327
Shares issuable upon restricted stock award issuance		—		745
Shares issuable related to our Employee Stock Purchase Plan		—		8
Income available to Ionis common stockholders	$	86,628		142,499	$	0.61

Significant Accounting Policies [Abstract]

Weighted-Average Assumptions for Stock Options

Ionis Employee Stock Options:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		1.6	%		2.4	%
Dividend yield		0.0	%		0.0	%
Volatility		58.9	%		60.3	%
Expected life	4.7 years			4.6 years

Weighted-Average Assumptions for ESPP

Ionis ESPP:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		1.1	%		2.5	%
Dividend yield		0.0	%		0.0	%
Volatility		47.2	%		45.5	%
Expected life	6 months			6 months

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2020 and 2019 (in thousands). Our non-cash stock-based compensation expense included $16.1 million and $23.4 million of stock-based compensation expense for Akcea employees for the three and six months ended June 30, 2020, respectively, compared to $14.4 million and $32.9 million for the same periods in 2019.

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Cost of products sold	$	350	$	137	$	587	$	255
Research, development and patent		26,016		23,756		51,573		48,191
Selling, general and administrative		22,076		18,040		37,073		38,991
Total non-cash stock-based compensation expense	$	48,442	$	41,933	$	89,233	$	87,437

Akcea [Member]

Significant Accounting Policies [Abstract]

Weighted-Average Assumptions for Stock Options

Akcea Employee Stock Options:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		1.3	%		2.5	%
Dividend yield		0.0	%		0.0	%
Volatility		74.5	%		76.3	%
Expected life	6.1 years			6.1 years

Akcea Board of Directors Stock Options:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		0.8	%		1.9	%
Dividend yield		0.0	%		0.0	%
Volatility		75.3	%		74.3	%
Expected life	5.7 years			6.3 years

Weighted-Average Assumptions for ESPP

Akcea ESPP:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		1.0	%		2.5	%
Dividend yield		0.0	%		0.0	%
Volatility		71.9	%		64.1	%
Expected life	6 months			6 months