Legal Proceedings

6 Months Ended

Jun. 30, 2022

Legal Proceedings [Abstract]

Legal Proceedings

8. Legal Proceedings

From time to time, we are involved in legal proceedings arising in the ordinary course of our business. Periodically, we evaluate the status of each legal matter and assess our potential financial exposure. If we consider the potential loss from any legal proceeding to be probable and we can reasonably estimate the amount, we accrue a liability for the estimated loss. The outcome of any proceeding is not determinable in advance. Therefore, we are required to use significant judgment to determine the probability of a loss and whether the amount of the loss is reasonably estimable. Our assessment of a potential liability and the amount of accruals we recorded are based only on the information available to us at the time. As additional information becomes available, we reassess the potential liability related to the legal proceeding and may revise our estimates.

On August 5, 2021, four purported former stockholders of Akcea filed an action in the Delaware Court of Chancery captioned John Makris, et al. v. Ionis Pharmaceuticals, Inc., et al., C.A. No. 2021-0681, or the “Delaware Action.”  The plaintiffs in the Delaware Action assert claims against (i) former members of Akcea’s board of directors; and (ii) Ionis, or collectively, the “Defendants.” The plaintiffs assert putatively direct claims on behalf of a purported class of former Akcea stockholders. The plaintiffs in the Delaware Action assert that the Defendants breached their fiduciary duties in connection with the October 2020 take-private transaction that Ionis and Akcea entered into, in which Akcea became a wholly-owned subsidiary of Ionis. Ionis believes this lawsuit is without merit. However, the outcome of this lawsuit or any other lawsuit that may be filed challenging the October 2020 take-private transaction is uncertain. Accordingly, on June 3, 2022, the parties reached an agreement in principle to settle the Delaware Action for $12.5 million, subject to the approval of the Delaware Court of Chancery. A Stipulation and Agreement of Compromise, Settlement and Release relating to this matter (the “Stipulation and Settlement Agreement”) has been executed and filed with the Delaware Court of Chancery, where it awaits Court approval. The terms of the Stipulation and Settlement Agreement include no finding of wrongdoing on the part of any of the Defendants. A hearing on the Stipulation and Settlement Agreement is scheduled for October 11, 2022. We recorded a legal reserve of $12.5 million as of June 30, 2022 for the proposed litigation settlement. We recorded the corresponding litigation settlement expense within other expense in the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2022. In July 2022, we entered into a settlement agreement with our insurance carrier wherein the insurance carrier agreed to contribute toward the settlement in the amount of $4.5 million. We will record the insurance contribution in the third quarter of 2022.