Ionis Pharmaceuticals(IONS) - 2024 Q2 - Quarterly Report

PART I — FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS This section presents unaudited condensed consolidated financial statements and notes for June 30, 2024 and 2023, detailing financial position and performance Condensed Consolidated Balance Sheets The Condensed Consolidated Balance Sheets show a decrease in total assets, total liabilities, and stockholders' equity as of June 30, 2024, compared to December 31, 2023, primarily driven by reductions in cash, cash equivalents, and short-term investments Key Balance Sheet Data (in thousands) | Metric | June 30, 2024 | Dec 31, 2023 | Change | | :------------------------------- | :------------ | :----------- | :----- | | Total Assets | $2,691,128 | $2,990,072 | ↓ | | Total Liabilities | $2,427,430 | $2,603,386 | ↓ | | Total Stockholders' Equity | $263,698 | $386,686 | ↓ | | Cash and cash equivalents | $293,993 | $399,266 | ↓ | | Short-term investments | $1,784,693 | $1,931,935 | ↓ | | Total current liabilities | $306,162 | $448,090 | ↓ | Condensed Consolidated Statements of Operations The Condensed Consolidated Statements of Operations indicate an improved net loss for the three and six months ended June 30, 2024, compared to the same periods in 2023, despite an increase in total operating expenses Key Operations Data (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $225,250 | $188,411 | $344,748 | $318,935 | | Loss from Operations | $(66,091) | $(90,195) | $(215,604) | $(204,343) | | Net Loss | $(66,265) | $(85,290) | $(209,068) | $(209,613) | | Basic and Diluted Net Loss Per Share | $(0.45) | $(0.60) | $(1.43) | $(1.47) | - Total revenue increased by 19.5% for the three months and 8.1% for the six months ended June 30, 2024, compared to the prior year periods[6] - Net loss per share improved from $(0.60) to $(0.45) for the three months and from $(1.47) to $(1.43) for the six months ended June 30, 2024[6] Condensed Consolidated Statements of Comprehensive Loss The Condensed Consolidated Statements of Comprehensive Loss show an improvement in comprehensive loss for the three months ended June 30, 2024, but a worsening for the six months ended June 30, 2024, primarily influenced by net loss and unrealized gains/losses on debt securities Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Loss | $(66,265) | $(85,290) | $(209,068) | $(209,613) | | Unrealized gains (losses) on debt securities, net of tax | $150 | $(2,000) | $(2,056) | $6,393 | | Currency translation adjustment | $(24) | $70 | $(137) | $174 | | Comprehensive Loss | $(66,139) | $(87,220) | $(211,261) | $(203,046) | Condensed Consolidated Statements of Stockholders' Equity The Condensed Consolidated Statements of Stockholders' Equity reflect a decrease in total stockholders' equity from December 31, 2023, to June 30, 2024, primarily due to the net loss, partially offset by increases in additional paid-in capital from employee stock plans and stock-based compensation Stockholders' Equity Changes (in thousands) | Metric | Balance at Dec 31, 2023 | Net Loss (Six Months) | Issuance of Common Stock | Stock-based Compensation Expense | Balance at June 30, 2024 | | :--------------------------------- | :---------------------- | :-------------------- | :----------------------- | :------------------------------- | :----------------------- | | Additional Paid-in Capital | $2,215,098 | — | $26,203 | $62,068 | $2,303,369 | | Accumulated Deficit | $(1,795,911) | $(209,068) | — | — | $(2,004,979) | | Total Stockholders' Equity | $386,686 | $(209,068) | $26,205 | $62,068 | $263,698 | - Total stockholders' equity decreased from $386,686 thousand at December 31, 2023, to $263,698 thousand at June 30, 2024[6][10] Condensed Consolidated Statements of Cash Flows The Condensed Consolidated Statements of Cash Flows show a net decrease in cash and cash equivalents for the six months ended June 30, 2024, primarily due to increased cash used in operating activities, partially offset by a significant shift from cash outflow to inflow in investing activities Cash Flow Summary (Six Months Ended June 30, in thousands) | Activity | 2024 | 2023 | Change | | :------------------------------------------ | :----------- | :----------- | :----- | | Net cash used in operating activities | $(269,818) | $(231,356) | ↑ outflow | | Net cash provided by (used in) investing activities | $138,555 | $(256,125) | ↑ inflow | | Net cash provided by financing activities | $26,127 | $635,625 | ↓ inflow | | Net increase (decrease) in cash and cash equivalents | $(105,273) | $148,318 | ↓ | | Cash and cash equivalents at end of period | $293,993 | $424,790 | ↓ | - Investing activities shifted from a net cash outflow of $(256,125) thousand in 2023 to a net cash inflow of $138,555 thousand in 2024[11] Notes to Condensed Consolidated Financial Statements These notes provide essential context and detailed breakdowns for the condensed consolidated financial statements, covering the company's organization, significant accounting policies, revenue recognition practices, specifics of collaborative agreements, investment portfolio, convertible debt, and legal proceedings 1. Organization and Basis of Presentation - Ionis Pharmaceuticals, Inc. was incorporated in California in 1989 and reorganized as a Delaware corporation in 1991, focusing on RNA-targeted therapeutics[12] - The company operates as a single segment, 'Ionis operations,' with its chief decision maker reviewing operating results on an aggregate basis[14] - Interim financial statements are unaudited and prepared in conformity with U.S. GAAP, requiring estimates and assumptions[13][15] 2. Significant Accounting Policies - Significant accounting policies have not substantially changed from those included in the Annual Report on Form 10-K for the year ended December 31, 2023[16] - No recently issued accounting standards are expected to have a material impact on the company's financial results[16] 3. Supplemental Financial Data Inventories (in thousands) | Category | June 30, 2024 | Dec 31, 2023 | | :------------------------ | :------------ | :----------- | | Raw materials - clinical | $22,211 | $20,985 | | Raw materials - commercial | $2,412 | $1,809 | | Work in process | $3,614 | $5,477 | | Finished goods | $486 | $154 | | Total Inventories | $28,723 | $28,425 | Accrued