Organization and Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2021

Organization and Significant Accounting Policies [Abstract]

Basic Net Income (Loss) per Share

We calculated our basic net loss per share for the year ended December 31, 2020 as follows (in thousands, except per share amounts):

Year Ended December 31, 2020	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Basic Net Loss Per Share Calculation
Akcea’s net loss in the pre-merger period attributable to our ownership		77,095	$	(1.45	)	$	(111,775	)
Akcea’s net loss in the post-merger period attributable to our ownership							(85,987	)
Akcea’s total net loss attributable to our ownership						$	(197,762	)
Ionis’ stand-alone net loss							(246,702	)
Net loss available to Ionis common stockholders						$	(444,464	)
Weighted average shares outstanding							139,612
Basic net loss per share						$	(3.18	)

We calculated our basic net income per share for the year ended December 31, 2019 as follows (in thousands, except per share amounts):

Year Ended December 31, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Income Per Share		Basic Net Income Per Share Calculation
Common shares		70,100	$	0.49	$	34,073
Akcea’s net income attributable to our ownership					$	34,073
Ionis’ stand-alone net income						246,487
Net income available to Ionis common stockholders					$	280,560
Weighted average shares outstanding						139,998
Basic net income per share					$	2.00

Basic and Diluted Net Income Per Share

For the year ended December 31, 2019, we reported net income available to Ionis common stockholders. As a result, we computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during each period. We calculated our diluted net income per share as follows (in thousands except per share amounts):

Year Ended December 31, 2019	Net Income Available to Ionis Common Stockholders (Numerator)		Shares (Denominator)		Per-Share Amount
Net income available to Ionis common stockholders	$	280,560		139,998	$	2.00
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		2,090
Shares issuable upon restricted stock award issuance		—		766
Shares issuable related to our ESPP		—		18
Shares issuable related to our 0.125 percent convertible notes		860		217
Shares issuable related to our 1 percent convertible notes		9,527		10,075
	$	290,947		153,164	$	1.90

Amortization Expense for Patents

Based on our existing patents, we estimate amortization expense related to patents in each of the next five years to be the following:

Year Ending December 31,	Amortization (in millions)
2022	$	2.2
2023	$	2.1
2024	$	1.9
2025	$	1.8
2026	$	1.8

Accrued Liabilities

Our accrued liabilities consisted of the following (in thousands):

	December 31,
	2021		2020
Clinical expenses	$	65,730	$	39,477
In-licensing expenses		8,044		8,264
Commercial expenses		2,471		11,559
Other miscellaneous expenses		12,315		30,861
Total accrued liabilities	$	88,560	$	90,161

Inventory

Our inventory consisted of the following (in thousands):

	December 31,
	2021		2020
Raw materials:
Raw materials- clinical	$	14,507	$	9,206
Raw materials- commercial		4,139		7,502
Total raw materials		18,646		16,708
Work in process		5,770		2,252
Finished goods		390		3,005
Total inventory	$	24,806	$	21,965

Property, Plant and Equipment

We carry our property, plant and equipment at cost and depreciate it on the straight-line method over its estimated useful life, which consists of the following (in thousands):

	Estimated Useful	December 31,
	Lives (in years)	2021			2020
Computer software, laboratory, manufacturing and other equipment	3 to 10	$	72,802		$	68,990
Building, building improvements and building systems	15 to 40		144,046			137,879
Land improvements	20		10,077			8,391
Leasehold improvements	5 to 15		20,144			17,263
Furniture and fixtures	5 to 10		10,591			12,871
			257,660			245,394
Less accumulated depreciation			(102,653	)		(87,379	)
			155,007			158,015
Land			23,062			23,062
Total		$	178,069		$	181,077

Changes in Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss is comprised of unrealized gains and losses on investments, net of taxes and currency translation adjustments. The following table summarizes changes in accumulated other comprehensive loss for the years ended December 31, 2021, 2020 and 2019 (in thousands):

	Year Ended December 31,
	2021			2020			2019
Beginning balance accumulated other comprehensive loss	$	(21,071	)	$	(25,290	)	$	(32,016	)
Unrealized gains (losses) on securities, net of tax (1)		(11,486	)		3,729			6,633
Currency translation adjustment		(111	)		617			93
Adjustments to other comprehensive loss from purchase of noncontrolling interest of Akcea Therapeutics, Inc.		—			(127	)		—
Net other comprehensive loss for the period		(11,597	)		4,219			6,726
Ending balance accumulated other comprehensive loss	$	(32,668	)	$	(21,071	)	$	(25,290	)

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(1) We did not have tax expense included in our other comprehensive loss for the years ended December 31, 2021 and 2020. For the year ended December 31, 2019, we had a tax benefit of $1.4 million included in other comprehensive loss. 

Adoption of ASU 2020-06

The following table summarizes the adjustments we made to the 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 tables summarize the adjustments we made to the consolidated statement of operations we originally reported for the years ended December 31, 2020 and 2019 to adopt ASU 2020-06 (in thousands):

	Year Ended December 31, 2020
	As Previously Reported			ASU 2020-06 Adjustment			As Revised
Interest expense	$	(44,990	)	$	35,480		$	(9,510	)
Loss before income tax expense	$	(170,032	)	$	35,480		$	(134,552	)
Income tax expense	$	(316,734	)	$	(28,457	)	$	(345,191	)
Net loss	$	(486,766	)	$	7,023		$	(479,743	)
Net loss attributable to Ionis Pharmaceuticals, Inc. common stockholders	$	(451,286	)	$	7,023		$	(444,263	)
Basic and diluted net loss per share	$	(3.23	)	$	0.05		$	(3.18	)

	Year Ended December 31, 2019
	As Previously Reported			ASU 2020-06 Adjustment			As Revised
Interest expense	$	(48,768	)	$	36,328		$	(12,440	)
Loss on early retirement of debt		(21,865	)		(44,331	)		(66,196	)
Income before income tax benefit (expense)	$	346,769		$	(8,003	)	$	338,766
Income tax expense	$	(43,507	)	$	(8,000	)	$	(51,507	)
Net income	$	303,262		$	(16,003	)	$	287,259
Net income attributable to Ionis Pharmaceuticals, Inc. common stockholders	$	294,146		$	(16,003	)	$	278,143
Basic net income per share		2.12			(0.12	)		2.00
Diluted net income per share	$	2.08		$	(0.18	)	$	1.90

The following tables summarize the adjustments we made to our 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		$	(107,088	)	$	1,577,459

Assets Measured at Fair Value on a Recurring Basis

The following tables present the major security types we held at December 31, 2021 and 2020 that we regularly measure and carry at fair value. As of December 31, 2021, our Bicycle investment was subject to trading restrictions that extend to the third quarter of 2022; as a result, we included a lack of marketability discount in valuing this investment, which is a Level 3 input. As of December 31, 2020, we did not have any investments that we valued using Level 3 inputs. The following tables segregate each security type by the level within the fair value hierarchy of the valuation techniques we utilized to determine the respective securities’ fair value (in thousands):

	At December 31, 2021		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash equivalents (1)	$	541,199	$	541,199	$	—	$	—
Corporate debt securities (2)		764,059		—		764,059		—
Debt securities issued by U.S. government agencies (2)		120,868		—		120,868		—
Debt securities issued by the U.S. Treasury (2)		182,634		182,634		—		—
Debt securities issued by states of the U.S. and political subdivisions of the states (3)		174,464		—		174,464		—
Other municipal debt securities (2)		6,099		—		6,099		—
Investment in Bicycle Therapeutics plc (4)		14,330		—		—		14,330
Investment in ProQR Therapeutics N.V. (4)		3,875		3,875		—		—
Total	$	1,807,528	$	727,708	$	1,065,490	$	14,330

	At December 31, 2020		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Cash equivalents (1)	$	221,125	$	221,125	$	—
Corporate debt securities (5)		846,315		—		846,315
Debt securities issued by U.S. government agencies (2)		174,861		—		174,861
Debt securities issued by the U.S. Treasury (6)		358,497		358,497		—
Debt securities issued by states of the U.S. and political subdivisions of the states (2)		136,309		—		136,309
Other municipal debt securities (2)		6,225		—		6,225
Investment in ProQR Therapeutics N.V. (4)		2,031		2,031		—
Total	$	1,745,363	$	581,653	$	1,163,710

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(1) Included in cash and cash equivalents on our consolidated balance sheet.

(2) Included in short-term investments.

(3) $2.3 million included in cash and cash equivalents on our consolidated balance sheet, with the difference included in short-term investments on our consolidated balance sheet.

(4) Included in other current assets on our consolidated balance sheet.

(5) $10.0 million included in cash and cash equivalents on our consolidated balance sheet, with the difference included in short-term investments on our consolidated balance sheet.

(6) $17.5 million included in cash and cash equivalents on our consolidated balance sheet, with the difference included in short-term investments on our consolidated balance sheet.