Segment Information and Concentration of Business Risk

12 Months Ended

Dec. 31, 2016

Segment Information and Concentration of Business Risk [Abstract]

Segment Information and Concentration of Business Risk

7. Segment Information and Concentration of Business Risk

In 2015, we began reporting our financial results in two reportable segments, Ionis Core, and Akcea Therapeutics, our wholly owned subsidiary. Segment loss from operations includes revenue less operating expenses attributable to each segment.

In our Ionis Core segment, we are exploiting a novel drug discovery platform we created to generate a broad pipeline of first-in-class or best-in-class drugs for us and our partners. Our Ionis Core segment generates revenue from a multifaceted partnering strategy.

We formed Akcea to develop and commercialize drugs to treat patients with serious cardiometabolic diseases caused by lipid disorders. Moving our lipid drugs into a company that we own ensures that our core focus at Ionis remains on innovation while allowing us to maintain control over and retain more value from our lipid drugs. Through 2016, Akcea had not earned any revenue, however in 2017, Akcea will begin recognizing revenue related to its collaboration with Novartis.

The following is our segment information for 2016, 2015 and 2014 (in thousands).

2016	Ionis Core		Akcea Therapeutics			Elimination of Intercompany Activity			Total
Revenue:
Research and development	$	338,546	$	—		$	(12,648	)	$	325,898
Licensing and royalty		20,722		—			—			20,722
Total segment revenue	$	359,268	$	—		$	(12,648	)	$	346,620
Income (loss) from operations	$	37,196	$	(83,512	)	$	—		$	(46,316	)

2015	Ionis Core			Akcea Therapeutics			Elimination of Intercompany Activity			Total
Revenue:
Research and development	$	284,135		$	—		$	(2,775	)	$	281,360
Licensing and royalty		2,343			—			—			2,343
Total segment revenue	$	286,478		$	—		$	(2,775	)	$	283,703
Loss from operations	$	(23,014	)	$	(52,748	)	$	—		$	(75,762	)

2014	Ionis Core			Akcea Therapeutics			Total
Revenue:
Research and development	$	202,514		$	—		$	202,514
Licensing and royalty		11,647			—			11,647
Total segment revenue	$	214,161		$	—		$	214,161
Loss from operations	$	(26,033	)	$	(21,697	)	$	(47,730	)

The following table shows our total assets by segment at December 31, 2016 and 2015 (in thousands), respectively.

Total Assets	Ionis Core		Akcea Therapeutics		Elimination of Intercompany Activity			Total
December 31, 2016	$	1,067,770	$	10,684	$	(165,987	)	$	912,467
December 31, 2015	$	994,191	$	66,068	$	(112,359	)	$	947,900

We have historically funded our operations from collaborations with corporate partners and a relatively small number of partners have accounted for a significant percentage of our revenue. Revenue from significant partners, which is defined as 10 percent or more of our total revenue, was as follows:

	2016		2015		2014
Partner A		60 %		37 %		58 %
Partner B		19 %		2 %		13 %
Partner C		4 %		12 %		17 %
Partner D		2 %		33 %		0 %
Partner E		2 %		11 %		4 %

Contracts receivables at December 31, 2016 and December 31, 2015 were comprised of approximately 92 percent and 99  percent for each year from two significant partners, respectively.