Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2021

Significant Accounting Policies [Abstract]

Inventory

Our inventory consisted of the following (in thousands):

	March 31, 2021		December 31, 2020
Raw materials:
Raw materials- clinical	$	10,695	$	9,206
Raw materials- commercial		7,502		7,502
Total raw materials		18,197		16,708
Work in process		2,096		2,252
Finished goods		1,906		3,005
Total inventory	$	22,199	$	21,965

Basic Net Loss per Share

Our basic net loss per share for the three months ended March 31, 2020, was calculated as follows (in thousands, except per share amounts):

Three months ended March 31, 2020	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Loss Per Share Calculation (as revised*)
Ionis’ portion of Akcea’s net loss		77,095	$	(0.42	)	$	(32,674	)
Akcea’s net loss attributable to our ownership						$	(32,674	)
Ionis’ stand-alone net loss							(7,032	)
Net loss available to Ionis common stockholders						$	(39,706	)
Weighted average shares outstanding							139,429
Basic net loss per share						$	(0.28	)

* We revised our 2020 amounts to reflect the simplified convertible instruments accounting guidance, which we adopted retrospectively. Refer to Note 2, Significant Accounting Policies, for further information.

Adoption of ASU 2020-06

The following table summarizes the adjustments we made to the condensed consolidated balance sheet we originally reported at December 31, 2020 to adopt ASU 2020-06 (in thousands):

	December 31, 2020
	As Previously Reported			ASU 2020-06 Adjustment			As Revised
1 percent convertible senior notes	$	293,161		$	15,648		$	308,809
0.125 percent convertible senior notes	$	455,719		$	84,417		$	540,136
Additional paid-in-capital	$	2,113,646		$	(218,127	)	$	1,895,519
Accumulated deficit	$	(1,249,368	)	$	118,062		$	(1,131,306	)

The following table summarizes the adjustments we made to the condensed consolidated statement of operations we originally reported at March 31, 2020 to adopt ASU 2020-06 (in thousands):

	Three Months Ended March 31, 2020
	As Previously Reported			ASU 2020-06 Adjustment			As Revised
Interest expense	$	(10,990	)	$	8,783		$	(2,207	)
Loss before income tax benefit	$	(61,737	)	$	8,783		$	(52,954	)
Income tax benefit	$	3,257		$	(185	)	$	3,072
Net loss	$	(58,480	)	$	8,598		$	(49,882	)
Net loss attributable to Ionis Pharmaceuticals, Inc. common stockholders	$	(48,226	)	$	8,598		$	(39,628	)
Basic and diluted net loss per share	$	(0.35	)	$	0.07		$	(0.28	)

The following tables summarize the adjustments we made to our condensed consolidated statements of stockholders’ equity we originally reported at December 31, 2020 and 2019 to adopt ASU 2020-06 (in thousands):

	December 31, 2020
	As Previously Reported			ASU 2020-06 Adjustment			As Revised
Additional paid-in-capital	$	2,113,646		$	(218,127	)	$	1,895,519
Accumulated deficit	$	(1,249,368	)	$	118,062		$	(1,131,306	)
Total stockholders' equity	$	843,347		$	(100,065	)	$	743,282

	December 31, 2019
	As Previously Reported			ASU 2020-06 Adjustment			As Revised
Additional paid-in-capital	$	2,203,778		$	(218,128	)	$	1,985,650
Accumulated deficit	$	(707,534	)	$	111,039		$	(596,495	)
Total stockholders' equity	$	1,684,547		$	(107,089	)	$	1,577,458

Weighted-Average Assumptions for Stock Options

Employee Stock Options:

	Three Months Ended March 31,
	2021			2020
Risk-free interest rate		0.5	%		1.6	%
Dividend yield		0.0	%		0.0	%
Volatility		55.1	%		58.9	%
Expected life	4.9 years			4.7 years

Weighted-Average Assumptions for ESPP

ESPP:

	Three Months Ended March 31,
	2021			2020
Risk-free interest rate		0.1	%		1.1	%
Dividend yield		0.0	%		0.0	%
Volatility		39.1	%		47.2	%
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, 2021 and 2020 (in thousands).

	Three Months Ended March 31,
	2021		2020
Cost of sales	$	182	$	237
Research, development and patent expense		25,899		25,556
Selling, general and administrative expense		11,780		14,997
Total	$	37,861	$	40,790