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Collaborative Arrangements and Licensing Agreements
 12 Months Ended
Dec. 31, 2020
Collaborative Arrangements and Licensing Agreements [Abstract]  
Collaborative Arrangements and Licensing Agreements
6. Collaborative Arrangements and Licensing Agreements

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. We and Biogen are currently developing eight investigational medicines to treat neurodegenerative diseases under these collaborations, including medicines in development 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 December 2020, we have received more than $2.8 billion from our Biogen collaborations.


Spinal Muscular Atrophy Collaborations


SPINRAZA


In January 2012, we entered into a collaboration agreement with Biogen to develop and commercialize SPINRAZA, an RNA-targeted therapy for the treatment of SMA. SPINRAZA is approved in over 50 countries around the world. From inception through December 2020, we earned more than $1.3 billion in total revenue under our SPINRAZA collaboration, including more than $930 million in revenue from SPINRAZA royalties and more than $435 million in R&D revenue. We are receiving tiered royalties ranging from 11 percent to 15 percent on net sales of SPINRAZA. We have exclusively in-licensed patents related to SPINRAZA from Cold Spring Harbor Laboratory and the University of Massachusetts. We pay Cold Spring Harbor Laboratory and the University of Massachusetts a low single digit royalty on net sales of SPINRAZA. Biogen is responsible for all global development, regulatory and commercialization activities and costs for SPINRAZA. We completed our performance obligations under our collaboration in 2016.


New antisense medicines for the treatment of SMA


In December 2017, we entered into a collaboration agreement with Biogen to identify new antisense medicines for the treatment of SMA. Biogen has the option to license therapies arising out of this collaboration following the completion of preclinical studies. Upon licensing, Biogen will be responsible for global development, regulatory and commercialization activities and costs for such therapies. Under the collaboration agreement, we received a $25 million upfront payment in the fourth quarter of 2017. We will receive development and regulatory milestone payments from Biogen if new medicines advance towards marketing approval. In total over the term of our collaboration, we are eligible to receive up to $1.2 billion in license fees, milestone payments and other payments, including up to $80 million for the achievement of development milestones, up to $180 million for the achievement of commercialization milestones and up to $800 million for the achievement of sales milestones. In addition, we are eligible to receive tiered royalties from the mid-teens to mid-20 percent range on net sales. We will achieve the next payment of up to $60 millionfor the license of a medicine under this collaboration.


At the commencement of this collaboration, we identified one performance obligation, which was to perform R&D services for Biogen. We determined the transaction price to be the $25 million upfront payment we received when we entered into the collaboration. We allocated the transaction price to our single performance obligation. In the fourth quarter of 2019, we completed our R&D services performance obligation under this collaboration. We recognized revenue as we performed services based on our effort to satisfy our performance obligation relative to the total effort expected to satisfy our performance obligation. We completed our performance obligation earlier than we previously estimated, as a result, we recognized $8.3 million of additional revenue in the fourth quarter of 2019. We do not have any remaining performance obligations under this collaboration. We will receive development and regulatory milestone payments from Biogen if Biogen advances the development candidate under this collaboration toward marketing approval.


Neurology Collaborations


2018 Strategic Neurology


In April 2018, we and Biogen entered into a strategic collaboration to develop novel antisense medicines for a broad range of neurological diseases and entered into a SPA. As part of the collaboration, Biogen gained exclusive rights to the use of our antisense technology to develop therapies for these diseases for 10 years. We are responsible for the identification of antisense drug candidates based on selected medicines. Biogen is responsible for conducting IND-enabling toxicology studies for the selected medicine. Biogen will have the option to license the selected medicine after it completes the IND-enabling toxicology study. If Biogen exercises its option to license a medicine, it will assume global development, regulatory and commercialization responsibilities and costs for that medicine.


In the second quarter of 2018, we received $1 billion from Biogen, comprised of $625 million to purchase our stock at an approximately 25 percent cash premium and $375 million in an upfront payment. We are eligible to receive up to $270 million in milestone payments for each medicine that achieves marketing approval. In addition, we are eligible to receive tiered royalties up to the 20 percent range on net sales. We are advancing eight programs under this collaboration and from inception through December 2020, we have received $1.05 billion in payments under this collaboration. We will achieve the next payment of $7.5 million if we advance a programunder this collaboration.


At the commencement of this collaboration, we identified one performance obligation, which was to perform R&D services for Biogen. We determined our transaction price to be $552 million, comprised of $375 million from the upfront payment and $177 million for the premium paid by Biogen for its purchase of our common stock. We determined the fair value of the premium we received by using the stated premium in the SPA and applying a lack of marketability discount. We included a lack of marketability discount in our valuation of the premium because Biogen received restricted shares of our common stock. We allocated the transaction price to our single performance obligation.


From inception through December 2020, we have included $608 million in payments in the transaction price for our R&D services performance obligation under this collaboration, including $11 million of milestone payments we achieved in 2020 and $30 million of milestone payments we achieved in 2019. These milestone payments did not create new performance obligations because they are part of our original R&D services performance obligation. Therefore, we included these amounts in our transaction price for our R&D services performance obligation in the period we achieved the milestone payment. We are recognizing revenue for our R&D services performance obligation as we perform services based on our effort to satisfy our performance obligation relative to our total effort expected to satisfy our performance obligation. We currently estimate we will satisfy our performance obligation at the end of the contractual term in June 2028.


2013 Strategic Neurology


In September 2013, we and Biogen entered into a long-term strategic relationship focused on applying antisense technology to advance the treatment of neurodegenerative diseases. As part of the collaboration, Biogen gained exclusive rights to the use of our antisense technology to develop therapies for neurological diseases and has the option to license medicines resulting from this collaboration. We will usually be responsible for drug discovery and early development of antisense medicines and Biogen will have the option to license antisense medicines after Phase 2 proof-of-concept. In October 2016, we expanded our collaboration to include additional research activities we will perform. If Biogen exercises its option to license a medicine, it will assume global development, regulatory and commercialization responsibilities and costs for that medicine. We are currently advancing six investigational medicines in development under this collaboration, including a medicine for Parkinson’s disease (ION859), three medicines for ALS (tofersen, IONIS-C9Rx and ION541), a medicine for multiple system atrophy (ION464) and a medicine for an undisclosed target. In the fourth quarter of 2018, Biogen exercised its option to license our most advanced ALS medicine, tofersen, our medicine in Phase 3 development for SOD1 ALS. As a result, Biogen is now responsible for global development, regulatory and commercialization activities and costs for tofersen.


Under the terms of the agreement, we received an upfront payment of $100 million and are eligible to receive milestone payments, license fees and royalty payments for all medicines developed under this collaboration, with the specific amounts dependent upon the modality of the molecule advanced by Biogen. For each antisense molecule that is chosen for drug discovery and development under this collaboration, we are eligible to receive up to approximately $260 million in a license fee and milestone payments per program. The $260 million per program consists of approximately $60 million in development milestones, including amounts related to the cost of clinical trials, and up to $130 million in milestone payments if Biogen achieves pre-specified regulatory milestones. In addition, we are eligible to receive tiered royalties up to the mid-teens on net sales from any antisense medicines developed under this collaboration. From inception through December 2020, we have received over $270 million in upfront fees, milestone payments and other payments under this collaboration. We will achieve the next payment of up to $10 million if we advance a program under this collaboration.


At the commencement of our 2013 strategic neurology collaboration, we identified one performance obligation, which was to perform R&D services for Biogen. At inception, we determined the transaction price to be the $100 million upfront payment we received and allocated it to our single performance obligation. As we achieve milestone payments for our R&D services, we include these amounts in our transaction price for our R&D services performance obligation. We recognized revenue for our R&D services performance obligation based on our effort to satisfy our performance obligation relative to our total effort expected to satisfy our performance obligation. In the third quarter of 2019, we updated our estimate of the total effort we expect to expend to satisfy our performance obligation. As a result, we recorded a cumulative catch up adjustment of $16.5 million to decrease revenue in the third quarter of 2019. During 2020, we completed our remaining research and development services and recognized the remaining revenue related to this performance obligation. From inception through the completion of our R&D services performance obligation in 2020, we included $145 million in total payments in the transaction price for our R&D services performance obligation.


Under this collaboration, we have also generated additional payments that we concluded were not part of our R&D services performance obligation. We recognized each of these payments in full in the respective quarter we generated the payment because we did not have any performance obligations for the respective payment. The following are the payments we earned:

●
In the third quarter of 2018, we earned a $10 million milestone payment when Biogen initiated a Phase 1 study of IONIS-C9Rx.
●
In the fourth quarter of 2018, we earned a $35 million license fee when Biogen licensed tofersen from us because Biogen had full use of the licenses without any continuing involvement from us.
●
In the fourth quarter of 2018, we earned a $5 million milestone when Biogen initiated a Proof-of-Concept study for tofersen.
●
In the third quarter of 2019, we earned an $8 million milestone payment when Biogen initiated a Phase 1/2 study of ION859 for the treatment of people with Parkinson’s disease under this collaboration.
●
In the fourth quarter of 2019, we earned a $10 million milestone payment when Biogen advanced IONIS-C9Rx.
●
In the third quarter of 2020, we earned $18 million in milestone payments when Biogen initiated a Phase 1/2 trial for ION464, an investigational medicine in development targeting alpha-synuclein to treat patients with multiple system atrophy.
●
In the third quarter of 2020, we earned a $10 million milestone payment when Biogen initiated a Phase 1/2 trial for ION541, an investigational medicine in development targeting ataxin 2 to treat patients with ALS.


2012 Neurology


In December 2012, we and Biogen entered into a collaboration agreement to develop and commercialize novel antisense medicines to treat neurodegenerative diseases. We are responsible for the development of each of the medicines through the completion of the initial Phase 2 clinical study for such medicine. Biogen has the option to license a medicine from each of the programs through the completion of the first Phase 2 study for each program. Under this collaboration, we are currently advancing IONIS-MAPTRx for Alzheimer’s disease and ION582 for Angelman syndrome. If Biogen exercises its option to license a medicine, it will assume global development, regulatory and commercialization responsibilities and costs for that medicine. In the fourth quarter of 2019, Biogen exercised its option to license IONIS-MAPTRx. We are responsible for completing the Phase 1/2 in study patients with mild AD and a one-year long-term extension study. Biogen will have responsibility for global development, regulatory and commercialization activities and costs for IONIS-MAPTRx.


Under the terms of the agreement, we received an upfront payment of $30 million. Over the term of the collaboration, we are eligible to receive up to $210 million in a license fee and milestone payments per program, plus a mark-up on the cost estimate of the Phase 1 and 2 studies. The $210 million per program consists of up to $10 million in development milestone payments, plus a mark-up on the cost estimate of the Phase 1 and 2 studies and up to $130 million in milestone payments if Biogen achieves pre-specified regulatory milestones. In addition, we are eligible to receive tiered royalties up to the mid-teens on net sales of any medicines resulting from each of the three programs. From inception through December 2020, we have received $154 million in payments under this collaboration, including $19.5 million we received from Biogen for achieving milestones for advancing IONIS-MAPTRx during 2020. We will achieve the next payment of $25 million if we continue to advance IONIS-MAPTRx.


Under our collaboration, we determined we had a performance obligation to perform R&D services. We allocated $40 million in total payments to the transaction price for our R&D services performance obligation. In the third quarter of 2019, we completed our R&D services performance obligation when we designated a development candidate and Biogen accepted the development candidate. Biogen’s decision to accept the development candidate was not within our control. We were recognizing revenue as we performed services based on our effort to satisfy our performance obligation relative to the total effort expected to satisfy our performance obligation. Because Biogen accepted the development candidate earlier than when we were previously estimating, we recognized $6.3 million of accelerated revenue in the third quarter of 2019.


When we commenced development for IONIS-MAPTRx we identified our development work as a separate performance obligation. We are recognizing our IONIS-MAPTRx development performance obligation based on the percentage of completion. From inception through December 2020, we have included $57 million in the transaction price for our IONIS-MAPTRx development performance obligation. We currently estimate we will satisfy our performance obligation in 2022. Our total transaction price for our IONIS-MAPTRx development performance obligation includes the following payments we achieved in 2019 and 2020 related to our development work:

●
In the second quarter of 2019, we achieved a $7.5 million milestone payment from Biogen when we advanced IONIS-MAPTRx.
●
In the fourth quarter of 2019, we achieved a $12 million milestone payment from Biogen when we entered into an agreement to conduct a long-term extension study for IONIS-MAPTRx.
●
In the first quarter of 2020, we achieved a $7.5 million milestone payment from Biogen when we advanced IONIS-MAPTRx.
●
In the third quarter of 2020, we achieved a $12 million milestone payment from Biogen when we advanced IONIS-MAPTRx in the long-term extension study for IONIS-MAPTRx.


In the fourth quarter of 2019, we identified another performance obligation upon Biogen’s license of IONIS-MAPTRx because the license we granted to Biogen is distinct from our other performance obligations. We recognized the $45 million license fee for IONIS-MAPTRx as revenue at that time because Biogen 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 Biogen.


In the fourth quarter of 2019, we earned a $10 million milestone payment when Biogen advanced ION582. We recognized this milestone payment in full in the fourth quarter of 2019 because we did not have any performance obligations related to this milestone payment.


During the years ended December 31, 2020, 2019 and 2018, we earned the following revenue from our relationship with Biogen (in millions, except percentage amounts):

  
Year Ended December 31,
  
   
2020
    
2019
    
2018
  
SPINRAZA royalties (commercial revenue)
  
$
286.6
    
$
293.0
    
$
237.9
  
R&D revenue
    
122.0
      
180.6
      
137.1
  
Total revenue from our relationship with Biogen
  
$
408.6
    
$
473.6
    
$
375.0
  
Percentage of total revenue
    
56
%
    
42
%
    
63
%


Our consolidated balance sheet at December 31, 2020 and 2019 included deferred revenue of $465.8 million and $525.8 million, respectively, related to our relationship with Biogen.

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 investigational medicines under these collaborations, including medicines in development to treat people with cardiovascular disease, a genetically associated form of kidney disease, nonalcoholic steatohepatitis, or NASH, and cancer. From inception through December 2020, we have received more than $380 million from our AstraZeneca collaborations.


 Cardiovascular, Renal and Metabolic Diseases Collaboration


In July 2015, we and AstraZeneca formed a collaboration to discover and develop antisense therapies for treating cardiovascular, renal and metabolic diseases. Under our collaboration, AstraZeneca has licensed four medicines from us:

●
ION449 (formerly IONIS-AZ4-2.5-LRx), an investigational medicine we designed to reduce the liver production of PCSK9 and lower the plasma level of LDL-C and thus reduce the risk of cardiovascular disease;
●
ION532, an investigational medicine we designed to reduce the production of APOL1 for the treatment of APOL1-associated chronic kidney disease;
●
ION839, an investigational medicine we designed to inhibit the production of PNPLA3 protein, a major genetic determinant of NASH progression; and
●
ION455, an investigational medicine we designed as a potential treatment for NASH.


AstraZeneca is responsible for global development, regulatory and commercialization activities and costs for each of the medicines it has licensed and any medicines AstraZeneca licenses in the future.


Under the terms of the agreement, we received a $65 million upfront payment. We are eligible to receive license fees and milestone payments of up to more than $5.5 billion as medicines under this collaboration advance, including up to $1.1 billion for the achievement of development milestones, up to $2.9 billion for regulatory milestones and up to $1.5 billion for commercial milestones. In addition, we are eligible to receive tiered royalties up to the low teens on net sales from any product that AstraZeneca successfully commercializes under this collaboration agreement. We will achieve the next payment of up to $30 million under this collaboration if AstraZeneca advances a medicine under this collaboration. From inception through December 2020, we have received over $235 million in upfront fees, license fees, milestone payments, and other payments under this collaboration, including $30 million we earned in 2020 when AstraZeneca licensed ION455 and $30 million in milestone payments we earned in 2020 when AstraZeneca advanced ION532 and ION449 in development.


At the commencement of this collaboration, we identified one performance obligation, which was to perform R&D services for AstraZeneca. We determined the transaction price to be the $65 million upfront payment we received and we allocated it to our single performance obligation. We are recognizing revenue for our R&D services performance obligation as we perform services based on our effort to satisfy this performance obligation relative to our total effort expected to satisfy our performance obligation. We currently estimate we will satisfy this performance obligation in the third quarter of 2021. As we achieve milestone payments for our R&D services, we include these amounts in our transaction price for our R&D services performance obligation. From inception through December 2020, we have included $90 million in payments in the transaction price for our R&D services performance obligation.


Under this collaboration, we have also generated additional payments that we concluded were not part of our R&D services performance obligation. We recognized each of these payments in full in the respective quarter we generated the payment because the payments were distinct and we did not have any performance obligations for the respective payment. The following are the payments we have earned:

●
In the first quarter of 2018, we earned two $30 million license fees when AstraZeneca licensed ION532 and ION839 because AstraZeneca had full use of the licenses without any continuing involvement from us.
●
In the third quarter of 2018, we earned a $10 million milestone payment when AstraZeneca initiated a Phase 1 study of ION449.
●
In the fourth quarter of 2019, we earned a $10 million milestone payment when AstraZeneca initiated a Phase 1 study of ION839.
●
In the first quarter of 2020, we earned a $10 million milestone payment when AstraZeneca advanced ION532.
●
In the fourth quarter of 2020, we earned a $20 million milestone payment when AstraZeneca advanced ION449.
●
In the fourth quarter of 2020, we earned a $30 million license fee when AstraZeneca licensed ION455 because AstraZeneca had full use of the license without any continuing involvement from us.


Oncology Collaboration


In December 2012, we entered into a collaboration agreement with AstraZeneca to discover and develop antisense medicines to treat cancer. We and AstraZeneca also established an oncology research program. AstraZeneca has the option to license medicines resulting from the program, and if AstraZeneca exercises its option to license a medicine, it will be responsible for global development, regulatory and commercialization activities and costs for such medicine. In 2020, AstraZeneca licensed ION736, an investigational medicine in development targeting FOXP3 for the treatment of cancer.


Under the terms of this agreement, we received $31 million in upfront payments. We are eligible to receive milestone payments and license fees up to more than $265 million under this collaboration, including up to $107 million for the achievement of development milestones and up to $105 million for the achievement of regulatory milestones. In addition, we are eligible to receive tiered royalties up to the low teens on net sales from any product that AstraZeneca successfully commercializes under this collaboration agreement. From inception through December 2020, we have received over $140 million in upfront fees, milestone payments, and other payments under this oncology collaboration, including $13 million we earned when AstraZeneca licensed ION736 in 2020. We will achieve the next payment of $12 million if AstraZeneca advances ION736 in development.


We completed all of the performance obligations we identified under this collaboration in the first quarter of 2018.


Under this collaboration, we have also generated additional payments that we concluded were not part of other performance obligations discussed above. We recognized each of these payments in full in the respective quarter we generated the payment because the payments were distinct and we did not have any performance obligations for the respective payment. The following are the payments we have earned:

●
In the fourth quarter of 2018, we earned a $17.5 million milestone payment and a $10 million milestone payment when AstraZeneca advanced two programs under our collaboration.
●
In the second quarter of 2020, we earned a $13 million license fee when AstraZeneca licensed ION736 because AstraZeneca had full use of the license without any continuing involvement from us.


During the years ended December 31, 2020, 2019 and 2018, we earned the following revenue from our relationship with AstraZeneca (in millions, except percentage amounts):

  
Year Ended December 31,
  
   
2020
    
2019
    
2018
  
R&D revenue
  
$
88.0
    
$
28.1
    
$
120.7
  
Percentage of total revenue
    
12
%
    
3
%
    
20
%


Our consolidated balance sheet at December 31, 2020 and 2019 included deferred revenue of $10.0 million and $25.0 million, respectively, related to our relationship with AstraZeneca.


Bayer


In May 2015, we entered into an exclusive license agreement with Bayer to develop and commercialize IONIS-FXIRx for the prevention of thrombosis. We were responsible for completing a Phase 2 study of IONIS-FXIRx in people with end-stage renal disease on hemodialysis. Under the terms of the agreement, we received a $100 million upfront payment in the second quarter of 2015. In February 2017, we amended our agreement with Bayer to advance IONIS-FXIRx and to initiate development of IONIS-FXI-LRx, which Bayer licensed. In conjunction with the decision to advance these programs, we received a $75 million payment from Bayer. In October 2019, Bayer decided it would advance IONIS-FXI-LRx following positive clinical results. Bayer is now responsible for all global development, regulatory and commercialization activities and costs for the FXI program.


We are eligible to receive up to $385 million in license fees, milestone payments and other payments, including up to $125 million for the achievement of development milestones and up to $110 million for the achievement of commercialization milestones. In addition, we are eligible to receive tiered royalties in the low to high 20 percent range on gross margins of both medicines combined. From inception through December 2020, we have received over $185 million from this collaboration. We will achieve the next payment of $20 million if Bayer initiates a Phase 3 study for the FXI program.


At the commencement of this collaboration, we identified three performance obligations, the license of IONIS-FXIRx, R&D services and delivery of API, all of which we completed in 2016.


In February 2017, when we amended our collaboration with Bayer, we identified two new performance obligations, one for the license of IONIS-FXI-LRx and one for R&D services. We determined the transaction price to be the $75 million payment. We allocated $64.9 million to the license of IONIS-FXI-LRx based on its estimated relative stand-alone selling price and recognized the associated revenue upon our delivery of the license in the first quarter of 2017. We allocated $10.1 million to our R&D services performance obligation based on an estimated relative stand-alone selling price. We recognized revenue for our R&D services performance obligation as we performed services based on our effort to satisfy our performance obligation relative to our total effort expected to satisfy our performance obligation. We completed our obligation in the third quarter of 2019.


In the fourth quarter of 2019, we earned a $10 million milestone payment when Bayer decided it would advance IONIS-FXI-LRx. We recognized this milestone payment in full in the fourth quarter of 2019 because we did not have any performance obligations related to this milestone payment.


During the years ended December 31, 2020, 2019 and 2018, we earned the following revenue from our relationship with Bayer (in millions, except percentage amounts):

  
Year Ended December 31,
  
   
2020
    
2019
    
2018
  
R&D revenue
  
$
3.2
    
$
14.3
    
$
5.0
  
Percentage of total revenue
    
0
%
    
1
%
    
1
%


Our consolidated balance sheet at December 31, 2020 did not include any deferred revenue related to our relationship with Bayer. Our consolidated balance sheet at December 31, 2019 included deferred revenue of $2.4 million related to our relationship with Bayer.


GSK


In March 2010, we entered into an alliance with GSK using our antisense drug discovery platform to discover and develop new medicines against targets for serious and rare diseases, including infectious diseases and some conditions causing blindness. Under the terms of the agreement, we received upfront payments of $35 million. Our collaboration with GSK currently includes two medicines targeting hepatitis B virus, or HBV: IONIS-HBVRx and IONIS-HBV-LRx. We designed these medicines to reduce the production of viral proteins associated with HBV infection. In the third quarter of 2019, following positive Phase 2 results, GSK licensed our HBV program. GSK is responsible for all global development, regulatory and commercialization activities and costs for the HBV program.


Under our agreement, if GSK successfully develops these medicines and achieves pre-agreed sales targets, we could receive license fees and milestone payments of up to $262 million, including up to $47.5 million for the achievement of development milestones, up to $120 million for the achievement of regulatory milestones and up to $70 million for the achievement of commercialization milestones. In addition, we are eligible to receive tiered royalties up to the mid-teens on net sales from any product that GSK successfully commercializes under this alliance. From inception through December 2020, we have received more than $190 million in payments under this alliance with GSK. We will achieve the next payment of $15 million if GSK initiates a Phase 3 study of a medicine under this program.


We completed our R&D services performance obligations under our collaboration in the first quarter of 2015. We identified a new performance obligation when we granted GSK the license of the HBV program and assigned related intellectual property rights in the third quarter of 2019 because the license was distinct from our other performance obligations. We recognized the $25 million license fee for the HBV program as revenue at that time because GSK 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 GSK.


We do not have any remaining performance obligations under our collaboration with GSK; however, we can still earn additional payments and royalties as GSK advances the HBV program.


During the years ended December 31, 2020, 2019 and 2018, we earned the following revenue from our relationship with GSK (in millions, except percentage amounts):

  
Year Ended December 31,
  
   
2020
    
2019
    
2018
  
R&D revenue
  
$
0.2
    
$
25.4
    
$
1.6
  
Percentage of total revenue
    
0
%
    
2
%
    
0
%


We did not have any deferred revenue from our relationship with GSK at December 31, 2020 and 2019.


Janssen Biotech, Inc.


In December 2014, we entered into a collaboration agreement with Janssen Biotech, Inc. to discover and develop antisense medicines that can be locally administered, including oral delivery, to treat autoimmune disorders of the GI tract. Under our collaboration, Janssen is currently advancing ION253 for the treatment of immune-mediated GI disease. Janssen licensed ION253 in the fourth quarter of 2017. Prior to Janssen’s license of ION253, we were responsible for the discovery activities to identify development candidates. Under the agreement, Janssen is responsible for global development, regulatory and commercialization activities and costs for ION253.


Under the terms of the agreement, we received $35 million in upfront payments. We are eligible to receive up to more than $285 million in license fees and milestone payments for these programs, including up to $65 million for the achievement of development milestones, up to $160 million for the achievement of regulatory milestones and up to $60 million for the achievement of commercialization milestones. From inception through December 2020, we have received over $80 million from this collaboration. In addition, we are eligible to receive tiered royalties up to the near teens on net sales from any medicines resulting from this collaboration. We will achieve the next payment of $5 million if Janssen continues to advance ION253 in development.


At the commencement of this collaboration, we identified one performance obligation, which was to perform R&D services for Janssen. We determined the transaction price to be the $35 million upfront payments we received. We allocated the $35 million to our single performance obligation. As we achieved milestone payments for our R&D services, we included these amounts in our transaction price for our R&D services performance obligation. We recognized revenue for our R&D services performance obligation over our period of performance, which ended in the fourth quarter of 2017.


Under this collaboration, we have also generated additional payments that we concluded were not part of our R&D services performance obligation. We recognized each of these payments in full in the respective quarter in which we generated the payment because the payments were distinct and we did not have any performance obligations for the respective payment. In the third quarter of 2020, we earned a $5 million milestone payment when Janssen initiated a Phase 1 trial for ION253.


During the years ended December 31, 2020, 2019 and 2018, we earned the following revenue from our relationship with Janssen (in millions, except percentage amounts):

  
Year Ended December 31,
  
   
2020
    
2019
    
2018
  
R&D revenue
  
$
5.0
    
$
0.1
    
$
6.6
  
Percentage of total revenue
    
1
%
    
0
%
    
1
%


We did not have any deferred revenue from our relationship with Janssen at December 31, 2020 and 2019.


Novartis


In January 2017, we initiated a collaboration with Novartis to develop and commercialize pelacarsen and IONIS-APOCIII-LRx. We received a $75 million upfront payment in the first quarter of 2017. In the first quarter of 2019, Novartis licensed pelacarsen and we earned a $150 million license fee. Novartis is responsible for conducting and funding future development and regulatory activities for pelacarsen, including a global Phase 3 cardiovascular outcomes study that Novartis initiated in the fourth quarter 2019. In connection with Novartis’ license of pelacarsen, we and Novartis established a more definitive framework under which the companies would negotiate the co-commercialization of pelacarsen in selected markets. Included in this framework is an option by which Novartis could solely commercialize pelacarsen in exchange for Novartis paying us increased sales milestone payments based on sales of pelacarsen. When Novartis decided to not exercise its option for IONIS-APOCIII-LRx, we retained rights to develop and commercialize IONIS-APOCIII-LRx.


Under the collaboration, we are eligible to receive up to $675 million in milestone payments, including $25 million for the achievement of a development milestone, up to $290 million for the achievement of regulatory milestones and up to $360 million for the achievement of commercialization milestones. From inception through December 2020, we have received $249 million in upfront payments, milestone payments, license fees and other payments from this collaboration. We are also eligible to receive tiered royalties in the mid-teens to low 20 percent range on net sales of pelacarsen. We will achieve the next payment of $25 million if Novartis advances pelacarsen.


In conjunction with this collaboration, we entered into a SPA with Novartis. As part of the SPA, Novartis purchased 1.6 million shares of our common stock for $100 million in the first quarter of 2017. As part of the SPA, Novartis was required to purchase $50 million of Akcea’s common stock at Akcea’s IPO price or our common stock at a premium if an IPO did not occur by April 2018. Under the SPA, in the second quarter of 2017, Novartis purchased $50 million of Akcea’s common stock in a separate private placement concurrent with the completion of Akcea’s IPO at a price per share equal to the IPO price.


At the commencement of this collaboration, we identified four separate performance obligations:

●
R&D services for pelacarsen;
●
R&D services for IONIS-APOCIII-LRx;
●
API for pelacarsen; and
●
API for IONIS-APOCIII-LRx.


We determined that the R&D services for each medicine and the API for each medicine were distinct performance obligations.


We determined our transaction price to be $108.4 million, comprised of the following:

●
$75 million from the upfront payment;
●
$28.4 million for the premium paid by Novartis for its purchase of our common stock at a premium in the first quarter of 2017; and
●
$5.0 million for the potential premium Novartis would have paid if they purchased our common stock in the future.


We allocated the transaction price based on the estimated stand-alone selling price of each performance obligation as follows:

●
$64.0 million for the R&D services for pelacarsen;
●
$40.1 million for the R&D services for IONIS-APOCIII-LRx;
●
$1.5 million for the delivery of pelacarsen API; and
●
$2.8 million for the delivery of IONIS-APOCIII-LRx API.


We recognized revenue related to each of the performance obligations as follows:

●
We completed our R&D services performance obligation for pelacarsen in second quarter of 2019. As such, we recognized all revenue we allocated to the pelacarsen R&D services as of the end of the second quarter of 2019;
●
We completed our R&D services performance obligation for IONIS-APOCIII-LRx in the fourth quarter of 2019 because Novartis elected to terminate the strategic collaboration for IONIS-APOCIII-LRx during the period. As a result, we were not required to provide any further R&D services, as such, we recognized all revenue allocated to the IONIS-APOCIII-LRx R&D services as of the end of the fourth quarter of 2019;
●
We recognized the amount attributed to pelacarsen API when we delivered it to Novartis in 2017; and
●
We recognized the amount attributed to IONIS-APOCIII-LRx API when we delivered it to Novartis in the second quarter of 2018.


We recognized revenue related to the R&D services for pelacarsen and IONIS-APOCIII-LRx performance obligations as we performed services based on our effort to satisfy our performance obligations relative to our total effort expected to satisfy our performance obligations.


During the years ended December 31, 2020 and 2019, we earned the following revenue from our relationship with Novartis (in millions, except percentage amounts):

  
Year Ended December 31,
  
   
2020
    
2019
    
2018
  
R&D revenue
  
$
1.0
    
$
187.4
    
$
50.6
  
Percentage of total revenue
    
0
%
    
17
%
    
8
%


We did not have any deferred revenue from our relationship with Novartis at December 31, 2020 and 2019.


Pfizer


In October 2019, we entered into a license agreement with Pfizer for vupanorsen, an investigational medicine in development to treat people with certain cardiovascular diseases. We completed a Phase 2 study of vupanorsen in patients with elevated levels of triglycerides, or hypertriglyceridemia, type 2 diabetes and NAFLD. Pfizer is responsible for all global development, regulatory and commercialization activities and costs for vupanorsen, subject to our right to co-commercialize in the U.S. and certain additional markets.


Under the terms of the agreement, we received a $250 million upfront payment. We are also eligible to receive development, regulatory and sales milestone payments of up to $1.3 billion, including up to $205 million for the achievement of development milestones, up to $250 million for the achievement of regulatory milestones and up to $850 million for the achievement of commercialization milestones. From inception through December 2020, we have received over $330 million, including a $75 million milestone payment we earned in the fourth quarter of 2020 when Pfizer began the Phase 2b study of vupanorsen. We are also eligible to earn tiered royalties in the mid-teens to low 20 percent range on annual worldwide net sales. Prior to regulatory filing for marketing approval, we have the right, at our option to participate in certain commercialization activities with Pfizer in the U.S. and certain additional markets on pre-defined terms and based on meeting pre-defined criteria. We will achieve the next payment of $50 million if Pfizer advances vupanorsen.


At the commencement of the license agreement, we identified three separate performance obligations:

●
License of vupanorsen;
●
R&D services for vupanorsen; and
●
API for vupanorsen.


We determined the transaction price to be $250 million, the upfront payment we received. We allocated the transaction price based on the estimated stand-alone selling price of each performance obligation as follows:

●
$245.6 million for the license of vupanorsen;
●
$2.2 million for the R&D services for vupanorsen; and
●
$2.2 million for the delivery of vupanorsen API.


We are recognizing revenue related to each of our performance obligations as follows:

●
We recognized $245.6 million for the license of vupanorsen in the fourth quarter of 2019 because we determined the license we granted to Pfizer was distinct from our other performance obligations and Pfizer had full use of the license without any continuing involvement from us.
●
We recognized revenue related to the R&D services for vupanorsen as we performed services based on our effort to satisfy our performance obligation relative to our total effort to satisfy our performance obligation. We completed our R&D services in mid-2020.
●
We recognized the amount attributed to the API supply for vupanorsen when we delivered it to Pfizer in the fourth quarter of 2019.


In the fourth quarter of 2020, we earned a $75 million milestone payment when Pfizer began the Phase 2b study of vupanorsen. We recognized this milestone payment in full in the fourth quarter of 2020 because we did not have any performance obligations related to this milestone payment.


During the years ended December 31, 2020 and 2019, we earned the following revenue from our relationship with Pfizer (in millions, except percentage amounts):

  
Year Ended December 31,
  
   
2020
    
2019
  
R&D revenue
  
$
82.1
    
$
248.7
  
Percentage of total revenue
    
11
%
    
22
%


We did not have any deferred revenue from our relationship with Pfizer at December 31, 2020. Our consolidated balance sheet at December 31, 2019 included deferred revenue of $1.3 million related to our relationship with Pfizer.


PTC Therapeutics


In August 2018, we entered into an exclusive license agreement with PTC Therapeutics to commercialize TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries. Under the license agreement, we are eligible to receive up to $26 million in payments. From inception through December 2020, we have received $22 million from PTC. We are eligible to receive royalties from PTC in the mid-20 percent range on net sales in Latin America for each medicine. PTC’s obligation to pay us royalties begins on the earlier of 12 months after the first commercial sale of a product in Brazil or the date that PTC recognizes revenue of at least $10 million in Latin America.


In the third quarter of 2018 at the commencement of this collaboration, we identified two performance obligations, which were the licenses we granted to PTC to commercialize TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries. We recognized $12 million in license fee revenue at that time because PTC had full use of both licenses without any continuing involvement from us. We do not have any remaining performance obligations under our collaboration with PTC. We can still earn additional payments and royalties as PTC commercializes TEGSEDI and WAYLIVRA.


Under this collaboration, we have also generated milestone payments that we concluded were not part of the performance obligations discussed above. We recognized each of these milestone payments in full in the respective quarter in which we achieved the milestone payment because the payments were distinct and we did not have any performance obligations for the respective payment. The following are the payments we have earned:

●
In the second quarter of 2019, we earned a $6 million payment when WAYLIVRA was approved by the EMA.
●
In the fourth quarter of 2019, we earned $4 million when TEGSEDI was approved in Brazil.



During the years ended December 31, 2020, 2019 and 2018, we earned the following revenue from our relationship with PTC (in millions, except percentage amounts):

  
Year Ended December 31,
  
   
2020
    
2019
    
2018
  
Licensing and other royalty revenue (commercial revenue)
  
$
1.6
    
$
10.2
    
$
12.0
  
Percentage of total revenue
    
0
%
    
1
%
    
2
%


Our consolidated balance sheet at December 31, 2020 and 2019 did not include any deferred revenue related to our relationship with PTC.


Roche

Huntington’s Disease


In April 2013, we formed an alliance with Hoffman-La Roche Inc. and F. Hoffmann-La Roche Ltd., collectively Roche, to develop treatments for HD based on our antisense technology. Under the agreement, we discovered and developed tominersen, an investigational medicine targeting HTT protein in Phase 3 development. We developed tominersen through completion of our Phase 1/2 clinical study in people with early stage HD. In the fourth quarter of 2017, upon completion of the Phase 1/2 study, Roche exercised its option to license tominersen. Roche is responsible for all global development, regulatory and commercialization activities and costs for tominersen.


Under the terms of the agreement, we received an upfront payment of $30 million in April 2013 and an additional $3 million payment in 2017. We are eligible to receive up to $365 million in a license fee and milestone payments including up to $70 million for the achievement of development milestones, up to $170 million for the achievement of regulatory milestones and up to $80 million for the achievement of commercialization milestones. In addition, we are eligible to receive up to $136.5 million in milestone payments for each additional medicine successfully developed. We are also eligible to receive tiered royalties up to the mid-teens on any net sales of any product resulting from this alliance. From inception through December 2020, we have received $150 million in upfront fees, milestone payments and license fees under this collaboration. We will achieve the next payment of $15 million if Roche advances tominersen.


At the commencement of this collaboration, we identified one performance obligation, which was to perform R&D services for Roche. We determined the transaction price to be the $30 million upfront payment we received and allocated it to our single performance obligation. As we achieved milestone payments for our R&D services, we included these amounts in our transaction price for our R&D services performance obligation. We recognized revenue for our R&D services performance obligation over our period of performance, which ended in the third quarter of 2017.


Under this collaboration, we have also generated additional payments that we concluded were not part of our R&D services performance obligation. We recognized each of these payments in full in the respective quarter in which we generated the payment because the payments were distinct and we did not have any performance obligations for the respective payment. The following are the payments we have earned:

●
In the fourth quarter of 2017, we earned a $45 million license fee when Roche licensed tominersen because Roche had full use of the license without any continuing involvement from us.
●
In the first quarter of 2019, we earned $35 million in milestone payments when Roche dosed the first patient in the Phase 3 study of tominersen in the first quarter of 2019.


We do not have any remaining performance obligations related to tominersen under this collaboration with Roche; however, we can still earn additional payments and royalties as Roche advances tominersen.


IONIS-FB-LRx for Complement-Mediated Diseases


In October 2018, we entered into a collaboration agreement with Roche to develop IONIS-FB-LRx for the treatment of complement-mediated diseases. We are currently conducting Phase 2 studies in two disease indications for IONIS-FB-LRx, one for the treatment of patients with GA, the advanced stage of dry AMD, and a second for the treatment of patients with IgA nephropathy. Roche has the option to license IONIS-FB-LRx at the completion of these studies. Upon licensing, Roche will be responsible for global development, regulatory and commercialization activities and costs.


Under the terms of this agreement, we received a $75 million upfront payment in the fourth quarter of 2018. We are eligible to receive up to $684 million in development, regulatory and sales milestone payments and license fees. In addition, we are also eligible to receive tiered royalties from the high teens to 20 percent on net sales. We will achieve the next payment of $20 million if we advance the Phase 2 study in patients with dry AMD.


At the commencement of this collaboration, we identified one performance obligation, which was to perform R&D services for Roche. We determined the transaction price to be the $75 million upfront payment we received and allocated it to our single performance obligation. We are recognizing revenue for our R&D services performance obligation as we perform services based on our effort to satisfy our performance obligation relative to our total effort expected to satisfy our performance obligation. During the fourth quarter of 2020, we updated our estimate of the total effort we expected to expend to satisfy our performance obligation under this collaboration. In the fourth quarter of 2020, we recorded a cumulative catch up adjustment of $9.2 million to decrease revenue because we updated our total cost estimate to complete the Phase 2 study of IONIS-FB-LRx for the treatment of patients with GA. We currently estimate we will satisfy our performance obligation in the fourth quarter of 2023.


During the years ended December 31, 2020, 2019 and 2018, we earned the following revenue from our relationship with Roche (in millions, except percentage amounts):

  
Year Ended December 31,
  
   
2020
    
2019
    
2018
  
R&D revenue
  
$
5.9
    
$
57.0
    
$
8.3
  
Percentage of total revenue
    
1
%
    
5
%
    
1
%


Our consolidated balance sheet at December 31, 2020 and 2019 included deferred revenue of $47.2 million and $52.3 million related to our relationship with Roche, respectively.


Other Agreement


Alnylam Pharmaceuticals, Inc.


Under the terms of our agreement with Alnylam, we exclusively licensed to Alnylam our patent estate relating to antisense motifs and mechanisms and oligonucleotide chemistry for double-stranded RNAi therapeutics in exchange for a technology access fee, participation in fees from Alnylam’s partnering programs, as well as future milestone and royalty payments from Alnylam. We retained rights to a limited number of double-stranded RNAi therapeutic targets and all rights to single-stranded RNAi, or ssRNAi, therapeutics. In turn, Alnylam nonexclusively licensed to us its patent estate relating to antisense motifs and mechanisms and oligonucleotide chemistry to research, develop and commercialize single-stranded antisense therapeutics, ssRNAi therapeutics, and to research double-stranded RNAi compounds. We also received a license to develop and commercialize double-stranded RNAi medicines targeting a limited number of therapeutic targets on a nonexclusive basis. Additionally, in 2015, we and Alnylam entered into an alliance in which we cross-licensed intellectual property. Under this alliance, we and Alnylam each obtained exclusive license rights to four therapeutic programs. Alnylam granted us an exclusive, royalty-bearing license to its chemistry, RNA targeting mechanism and target-specific intellectual property for oligonucleotides against four targets, including FXI and Apo(a) and two other targets. In exchange, we granted Alnylam an exclusive, royalty-bearing license to our chemistry, RNA targeting mechanism and target-specific intellectual property for oligonucleotides against four other targets. Alnylam also granted us a royalty-bearing, non-exclusive license to new platform technology arising from May 2014 through April 2019 for single-stranded antisense therapeutics. In turn, we granted Alnylam a royalty-bearing, non-exclusive license to new platform technology arising from May 2014 through April 2019 for double-stranded RNAi therapeutics.


In the fourth quarter 2020, we completed an arbitration process with Alnylam. The arbitration panel awarded us $41.2 million for payments owed to us by Alnylam related to Alnylam’s agreement with Sanofi Genzyme. We recognized the $41.2 million payment from Alnylam as revenue in the fourth quarter of 2020 because we did not have any performance obligations for the respective payment.

  
Year Ended December 31,
  
   
2020
    
2019
    
2018
  
R&D revenue
  
$
47.9
    
$
24.1
    
$
2.0
  
Percentage of total revenue
    
7
%
    
2
%
    
—
  


Our consolidated balance sheet at December 31, 2020 and 2019 did not include any deferred revenue related to our relationship with Alnylam.