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Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2019

Significant Accounting Policies [Abstract]

Our basic net loss per share for the three months ended June 30, 2019, was calculated as follows (in thousands, except per share amounts):

Three months ended June 30, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Ionis’ Portion of Akcea’s Net Loss

Common shares		70,221	$	(0.40	)	$	(28,244	)
Akcea’s net loss attributable to our ownership						$	(28,244	)
Ionis’ stand-alone net income							27,311
Net loss available to Ionis common stockholders						$	(933	)
Weighted average shares outstanding							140,247
Basic net loss per share						$	(0.01	)

Our basic net income per share for the six months ended June 30, 2019, was calculated as follows (in thousands, except per share amounts):

Six months ended June 30, 2019	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Ionis’ Portion of Akcea’s Net Loss

Common shares		69,406	$	(0.06	)	$	(4,380	)
Akcea’s net loss attributable to our ownership						$	(4,380	)
Ionis’ stand-alone net income							91,008
Net income available to Ionis common stockholders						$	86,628
Weighted average shares outstanding							139,419
Basic net income per share						$	0.62

Our basic net loss per share for the three months ended June 30, 2018, was calculated as follows (in thousands, except per share amounts):

Three months ended June 30, 2018	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Ionis’ Portion of Akcea’s Net Loss

Common shares		60,832	$	(0.72	)	$	(43,814	)
Akcea’s net loss attributable to our ownership						$	(43,814	)
Ionis’ stand-alone net income							5,882
Net loss available to Ionis common stockholders						$	(37,932	)
Weighted average shares outstanding							128,712
Basic net loss per share						$	(0.29	)

Our basic net loss per share for the six months ended June 30, 2018, was calculated as follows (in thousands, except per share amounts):

Six months ended June 30, 2018	Weighted Average Shares Owned in Akcea		Akcea’s Net Loss Per Share			Ionis’ Portion of Akcea’s Net Loss

Common shares		53,183	$	(1.19	)	$	(63,198	)
Akcea’s net loss attributable to our ownership						$	(63,198	)
Ionis’ stand-alone net income							24,668
Net income available to Ionis common stockholders						$	(38,530	)
Weighted average shares outstanding							127,030
Basic net loss per share						$	(0.30	)

Basic and Diluted Net Income Per Share

We calculated our diluted net income per share for the six months ended June 30, 2019 as follows (in thousands except per share amounts):

Six months ended June 30, 2019	Income (Numerator)		Shares (Denominator)		Per-Share Amount

Net income available to Ionis common stockholders	$	86,628		139,419	$	0.62
Effect of dilutive securities:
Shares issuable upon exercise of stock options		—		2,327
Shares issuable upon restricted stock award issuance		—		745
Shares issuable related to our Employee Stock Purchase Plan		—		8
Income available to Ionis common stockholders	$	86,628		142,499	$	0.61

Significant Accounting Policies [Abstract]

Weighted-Average Assumptions for Stock Options

We use the Black-Scholes model to estimate the fair value of stock options granted and stock purchase rights under our ESPP. The expected term of stock options granted represents the period of time that we expect them to be outstanding. We estimate the expected term of options granted based on historical exercise patterns. For the six months ended June 30, 2019 and 2018, we used the following weighted-average assumptions in our Black-Scholes calculations:

Ionis Employee Stock Options:

	Six Months Ended June 30,
	2019			2018
Risk-free interest rate		2.4	%		2.3	%
Dividend yield		0.0	%		0.0	%
Volatility		60.3	%		63.1	%
Expected life	4.6 years			4.6 years

Ionis Board of Director Stock Options:

	Six Months Ended June 30, 2019
Risk-free interest rate		2.0	%
Dividend yield		0.0	%
Volatility		60.6	%
Expected life	6.7 years

Weighted-Average Assumptions for ESPP

Ionis ESPP:

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2019 and 2018 (in thousands).

	Three Months Ended June 30,				Six Months Ended June 30,
	2019		2018		2019		2018
Cost of products sold	$	137	$	—	$	255	$	—
Research, development and patent		23,756		19,236		48,191		38,918
Selling, general and administrative		18,040		14,640		38,991		23,409
Total non-cash stock-based compensation expense	$	41,933	$	33,876	$	87,437	$	62,327

Akcea [Member]

Significant Accounting Policies [Abstract]

Weighted-Average Assumptions for Stock Options

In addition to our stock plans, Akcea has its own stock plan under which it grants options and RSUs and under which it derives its stock-based compensation expense. The following are the weighted-average Black-Scholes assumptions Akcea used under its plan for the six months ended June 30, 2019 and 2018:

Akcea Employee Stock Options:

	Six Months Ended June 30,
	2019			2018
Risk-free interest rate		2.5	%		2.8	%
Dividend yield		0.0	%		0.0	%
Volatility		76.3	%		77.7	%
Expected life	6.1 years			6.1 years

Akcea Board of Directors Stock Options:

	Six Months Ended June 30,
	2019			2018
Risk-free interest rate		1.9	%		2.9	%
Dividend yield		0.0	%		0.0	%
Volatility		74.3	%		78.2	%
Expected life	6.3 years			6.4 years

Weighted-Average Assumptions for ESPP

Akcea ESPP:

	Six Months Ended June 30,
	2019			2018
Risk-free interest rate		2.5	%		1.6	%
Dividend yield		0.0	%		0.0	%
Volatility		64.1	%		62.3	%
Expected life	6 months			6 months