10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended September 30, 2019

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-38137

Akcea Therapeutics, Inc.

(Exact name of Registrant as specified in its charter)

Delaware	47-2608175
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

22 Boston Wharf Road, 9^th Floor, Boston, MA 02210

(Address of principal executive offices, including zip code)

617-207-0202

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act.

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	AKCA	The Nasdaq Stock Market, LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12(b)-2 of the Securities Exchange Act of 1934). Yes ☐ No ☒

The number of shares of common stock outstanding as of October 31, 2019 was 93,901,338.

AKCEA THERAPEUTICS, INC.

FORM 10-Q

INDEX

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets as of September 30, 2019 and December 31, 2018	3
	Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2019 and 2018	4
	Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2019 and 2018	5
	Condensed Consolidated Statements of Stockholders' Equity for the three and nine months ended September 30, 2019 and 2018	6
	Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2019 and 2018	8
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations:	31
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	43
Item 4.	Controls and Procedures	43
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	74
Item 3.	Defaults Upon Senior Securities	74
Item 4.	Mine Safety Disclosures	74
Item 5.	Other Information	74
Item 6.	Exhibits	76
Signatures		78

TRADEMARKS

"Akcea," the Akcea logo, and other trademarks or service marks of Akcea Therapeutics, Inc. appearing in this Report are the property of Akcea Therapeutics, Inc. This Report contains additional trade names, trademarks and service marks of others, which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this Report may appear without the ® or TM symbols.

2

AKCEA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

	September 30,			December 31,
	2019			2018
ASSETS
Current assets:
Cash and cash equivalents	$	129,329		$	86,454
Short-term investments		123,362			166,155
Accounts receivable		10,653			4,597
Receivable from Ionis Pharmaceuticals, Inc.		647			—
Inventories		8,641			85
Other current assets		5,809			9,944
Total current assets		278,441			267,235
Property, plant and equipment, net		5,277			5,696
Operating lease right-of-use assets		11,300			—
Intangible assets, net		84,529			88,914
Deposits and other assets		3,620			3,416
Total assets	$	383,167		$	365,261
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	5,711		$	12,068
Payable to Ionis Pharmaceuticals, Inc.		—			18,901
Accrued compensation		9,382			8,583
Accrued liabilities		15,211			14,787
Current portion of deferred revenue		10,840			25,354
Other current liabilities		1,977			968
Total current liabilities		43,121			80,661
Long-term portion of lease liabilities		14,558			4,442
Long-term portion of deferred revenue		—			3,434
Total liabilities		57,679			88,537
Stockholders’ equity:
Common stock, $0.001 par value; 125,000,000 shares authorized at September 30,    2019 and December 31, 2018; 93,885,414 and 89,345,978 shares issued and    outstanding at September 30, 2019 and December 31, 2018, respectively.		94			89
Additional paid-in capital		889,133			799,001
Accumulated other comprehensive loss		(63	)		(324	)
Accumulated deficit		(563,676	)		(522,042	)
Total stockholders’ equity		325,488			276,724
Total liabilities and stockholders’ equity	$	383,167		$	365,261

See accompanying notes.

3

AKCEA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Revenue:
Product revenue, net	$	11,944		$	—		$	28,563		$	—
Licensing revenue		136			12,000			6,172			12,000
Research and development and license revenue under    collaborative agreement		8,544			7,241			176,329			42,670
Total revenue		20,624			19,241			211,064			54,670
Expenses:
Cost of sales - product		967			1,043			3,373			1,043
Cost of sales - intangible asset amortization		1,434			701			4,256			701
Cost of license		—			7,200			3,000			7,200
Research and development		24,797			29,381			144,687			96,808
Selling, general and administrative		34,905			45,924			130,247			107,676
Net loss share from commercial activities under arrangement    with Ionis Pharmaceuticals, Inc.		(8,889	)		—			(29,410	)		—
Total expenses		53,214			84,249			256,153			213,428
Loss from operations		(32,590	)		(65,008	)		(45,089	)		(158,758	)
Other income (expense):
Investment income		1,487			1,675			4,282			4,089
Other (expense)		(136	)		(25	)		(276	)		(148	)
Loss before income tax expense		(31,239	)		(63,358	)		(41,083	)		(154,817	)
Income tax expense		(259	)		(233	)		(551	)		(447	)
Net loss	$	(31,498	)	$	(63,591	)	$	(41,634	)	$	(155,264	)
Net loss per share of common stock owned by Ionis, basic and    diluted	$	(0.34	)	$	(0.73	)	$	(0.40	)	$	(1.93	)
Weighted-average shares of common stock outstanding owned by    Ionis, basic and diluted		70,221,338			65,538,467			69,680,886			57,346,539
Net loss per share of common stock owned by others, basic and    diluted	$	(0.34	)	$	(0.73	)	$	(0.60	)	$	(2.07	)
Weighted-average shares of common stock outstanding owned by    others, basic and diluted		22,821,555			21,671,415			22,509,819			21,446,813

See accompanying notes.

4

AKCEA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net loss	$	(31,498	)	$	(63,591	)	$	(41,634	)	$	(155,264	)
Unrealized gains on debt securities, net of tax		64			37		286				143
Currency translation adjustment		(17	)		(29	)		(25	)	19
Comprehensive loss	$	(31,451	)	$	(63,583	)	$	(41,373	)	$	(155,102	)

See accompanying notes.

5

AKCEA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Three Months Ended September 30, 2018 and 2019

(In thousands)

(Unaudited)

	For the Three Months Ended September 30, 2018
	Common Stock				Additional Paid In		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
Description	Shares		Amount		Capital		Loss			Deficit			Equity
Balance at June 30, 2018		85,681	$	86	$	678,509	$	(297	)	$	(387,894	)	$	290,404
Net loss		—		—		—		—			(63,591	)		(63,591	)
Change in unrealized gains, net of tax		—		—		—		37			—			37
Currency translation adjustment				—		—		(29	)		—			(29	)
Exercise of common stock options		177		—		1,626		—			—			1,626
Issuance of common stock to Ionis in connection with    TEGSEDI regulatory milestones		1,597		1		39,999		—			—			40,000
Issuance of common stock in connection with    employee stock purchase plan		16		—		234		—			—			234
Stock-based compensation expense		—		—		12,730		—			—			12,730
Balance at September 30, 2018		87,471	$	87	$	733,098	$	(289	)	$	(451,485	)	$	281,411

	For the Three Months Ended September 30, 2019
	Common Stock					Additional Paid In			Accumulated Other Comprehensive			Accumulated			Total Stockholders'
Description	Shares			Amount		Capital			Loss			Deficit			Equity
Balance at June 30, 2019		92,921		$	93	$	900,837		$	(110	)	$	(532,178	)	$	368,642
Net loss		—			—		—			—			(31,498	)		(31,498	)
Change in unrealized gains, net of tax		—			—		—			64			—			64
Currency translation adjustment		—			—		—			(17	)		—			(17	)
Exercise of common stock options		1,544			—		1,335			—			—			1,335
Issuance of common stock in connection with    employee stock purchase plan		22			—		441			—			—			441
Stock-based compensation expense		—			—		(3,464	)		—			—			(3,464	)
Payments of tax withholdings related to exercise of    employee stock awards		(602	)		1		(10,016	)		—			—			(10,015	)
Balance at September 30, 2019		93,885		$	94	$	889,133		$	(63	)	$	(563,676	)	$	325,488

See accompanying notes.

6

AKCEA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In thousands)

Nine Months Ended September 30, 2018 and 2019

(Unaudited)

	For the Nine Months Ended September 30, 2018
	Common Stock				Additional Paid In			Accumulated Other Comprehensive			Accumulated			Total Stockholders'
Description	Shares		Amount		Capital			Loss			Deficit			Equity
Balance at December 31, 2017		66,542	$	67	$	464,430		$	(451	)	$	(296,221	)	$	167,825
Net loss		—		—		—			—			(155,264	)		(155,264	)
Change in unrealized gains, net of tax		—		—		—			143			—			143
Currency translation adjustment		—		—		—			19			—			19
Exercise of common stock options		633		—		4,800			—			—			4,800
Issuance of common stock to Ionis in connection with    TTR License Agreement		18,667		19		200,081			—			—			200,100
Distribution to Ionis in connection with the TTR license    transaction		—		—		(7,792	)		—			—			(7,792	)
Issuance of common stock to Ionis in connection with    TEGSEDI regulatory milestones		1,597		1		39,999			—			—			40,000
Issuance of common stock in connection with    employee stock purchase plan		32		—		341			—			—			341
Stock compensation expense		—		—		31,239			—			—			31,239
Balance at September 30, 2018		87,471	$	87	$	733,098		$	(289	)	$	(451,485	)	$	281,411

	For the Nine Months Ended September 30, 2019
	Common Stock					Additional Paid In			Accumulated Other Comprehensive			Accumulated			Total Stockholders'
Description	Shares			Amount		Capital			Loss			Deficit			Equity
Balance at December 31, 2018		89,346		$	89	$	799,001		$	(324	)	$	(522,042	)	$	276,724
Net loss		—			—		—			—			(41,634	)		(41,634	)
Change in unrealized gains, net of tax		—			—		—			286			—			286
Currency translation adjustment		—			—		—			(25	)		—			(25	)
Exercise of common stock options		2,264			1		8,362			—			—			8,363
Issuance of common stock in connection with    employee stock purchase plan		40			—		822			—			—			822
Issuance of common stock in connection with Ionis    sublicense fee		2,837			3		74,997			—			—			75,000
Distribution to Ionis		—			—		(13,492	)		—			—			(13,492	)
Stock-based compensation expense		—			—		29,459			—			—			29,459
Payments of tax withholdings related to exercise of    employee stock awards		(602	)		1		(10,016	)		—			—			(10,015	)
Balance at September 30, 2019		93,885		$	94	$	889,133		$	(63	)	$	(563,676	)	$	325,488

See accompanying notes.

7

AKCEA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Nine Months Ended September 30,
	2019			2018
Operating activities:
Net loss	$	(41,634	)	$	(155,264	)
Adjustments to reconcile net loss to net cash provided by (used in)    operating activities:
Depreciation		594			109
Amortization of right-of-use operating lease assets		735			—
Amortization of intangibles		4,385			815
Amortization of discount/premium on investment securities, net		(470	)		197
Non-cash sublicensing expense		75,000			—
Stock-based compensation expense		29,459			31,239
Changes in operating assets and liabilities:
Accounts receivable		(6,056	)		4,777
Other current and long-term assets		(256	)		(7,104	)
Inventory		(4,369	)	—
Accounts payable		(5,114	)		300
Receivable/payable to Ionis Pharmaceuticals, Inc.		(19,548	)		9,198
Accrued compensation		799			4,765
Accrued liabilities		(558	)		13,237
Income taxes payable		72			(553	)
Deferred revenue		(17,948	)		(35,882	)
Net cash provided by (used in) operating activities		15,091			(134,166	)
Investing activities:
Purchases of short-term investments		(111,750	)		(105,091	)
Proceeds from maturity of short-term investments		155,299			138,580
Purchases of property, plant and equipment		(1,418	)		(116	)
Net cash provided by investing activities		42,131			33,373
Financing activities:
Proceeds from exercise of common stock options and employee stock    purchase plan issuances		9,185			5,141
Distribution to Ionis		(13,492	)		(7,792	)
Proceeds from issuance of common stock to Ionis in TTR transaction		—			163,648
Payments of tax withholdings related to exercise of employee stock awards		(10,015	)		—
Net cash (used in) provided by financing activities		(14,322	)		160,997
Effect of exchange rates on cash		(25	)		19
Net increase in cash and cash equivalents		42,875			60,223
Cash, cash equivalents and restricted cash at beginning of period		88,838			58,367
Cash, cash equivalents and restricted cash at end of period	$	131,713		$	118,590
Supplemental disclosures of non-cash operating and financing activities:
Right-of-use assets obtained in exchange for lease liabilities	$	363		$	—
Purchases of property, plant and equipment included in accounts payable and    accrued liabilities	$	—		$	1,752
Purchases of property, plant and equipment included in long-term    portion of deferred rent liability	$	—		$	3,596
Purchase of property, plant and equipment included in payable to Ionis Pharmaceuticals	$	—		$	325
Acquisition of research and development licenses and milestone payments	$	—		$	40,563

See accompanying notes.

8

The following table presents the line items and amounts of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets:

	September 30,		September 30,
	2019		2018
Cash and cash equivalents	$	129,329	$	116,206
Restricted cash included in deposits and other assets		2,384		2,384
Total cash, cash equivalents and restricted cash	$	131,713	$	118,590

See accompanying notes.

9

AKCEA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2019

(Unaudited)

1. Organization and Basis of Presentation

We were incorporated in Delaware in December 2014. We were organized by Ionis Pharmaceuticals, Inc., or Ionis, to focus on developing and commercializing drugs to treat patients with rare and serious diseases. On July 19, 2017, we completed our initial public offering, or IPO. As of September 30, 2019, Ionis owned approximately 75% of our common stock and is our majority shareholder. Prior to our IPO, we were wholly owned by Ionis.

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP.

The condensed consolidated financial statements include the accounts of Akcea Therapeutics, Inc. and our wholly owned subsidiaries ("we," "our," and "us"). All intercompany transactions and balances were eliminated in consolidation. We included all normal recurring adjustments in the financial statements that we considered necessary for a fair presentation of our financial position and our operating results and cash flows for the interim periods ended September 30, 2019 and 2018. Certain amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. Results for the interim periods are not necessarily indicative of the results for the entire year. For more complete financial information, these financial statements, and notes thereto, should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.

In accordance with Accounting Standards Codification, or ASC, 205-40, Going Concern, we evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. We have incurred losses since our inception and have funded our cash flow deficits primarily through the issuance of capital stock and the proceeds from licensing and collaboration agreements. As of September 30, 2019, we had an accumulated deficit of $563.7 million. During the three and nine months ended September 30, 2019, we generated losses of $31.5 and $41.6 million, respectively, and during the nine months ended September 30, 2019, we provided $15.1 million in cash from operations. We expect to generate operating losses and negative operating cash flows for the foreseeable future; however, we may generate positive cash flows from out-licensing transactions such as the Pfizer transaction that is currently subject to regulatory approval and would result in significant upfront cash flows during the fourth quarter of 2019 if approved. The transition to sustained profitability is dependent upon the successful development, approval, and commercialization of our products and product candidates and the achievement of a level of revenue adequate to support our cost structure. We believe that our currently available funds of $252.7 million as of September 30, 2019, cash expected to be generated from sales of TEGSEDI, which has been approved in the U.S., the European Union, or E.U., and Canada, and cash expected to be generated from sales of WAYLIVRA, which has been approved in the E.U., will be sufficient to fund our operations through at least the next 12 months from the issuance of this Quarterly Report on Form 10-Q. Management’s belief with respect to its ability to fund operations is based on estimates that are subject to risks and uncertainties. If actual results are different from management’s estimates, we may need to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and commercialize our drugs even if we would otherwise prefer to develop and commercialize the drugs ourselves. For additional detail regarding our license agreement with Pfizer, see Note 13, Subsequent Events.

2. Summary of Significant Accounting Policies

The accounting policies followed in the preparation of the interim condensed consolidated financial statements are consistent in all material respects with those presented in Note 2 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, revenue recognition and the accrual for research and development expenses. Estimates are periodically reviewed in light of changes in facts, circumstances and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

10

Translation of Foreign Currency

For our foreign subsidiaries that report in a functional currency other than U.S. dollars, we translate their assets and liabilities into U.S. dollars using the exchange rate at the balance sheet date. We translate revenue and expenses at the monthly average exchange rates for the period. We translate transactions in our capital accounts at the historic exchange rate in effect at the date of the transaction. We include foreign currency translation adjustments as a component of accumulated other comprehensive loss within the condensed consolidated statements of comprehensive loss.

Revenue Recognition

Collaboration and License Revenue

In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606), or Topic 606, which amended the guidance for accounting for revenue from contracts with customers. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, once the contract is determined to be within the scope of Topic 606, we assess the goods or services promised within each contract and determine those that are performance obligations, then assess whether each promised good or service is distinct. When we offer options for additional goods or services, such as an option to license a drug in the future or for additional goods or services to be provided in the future, we evaluate whether such options are material rights that should be treated as additional performance obligations. We typically have concluded that the option to license a drug or the options for additional goods or services that may be requested in the future under our collaboration agreements are not material rights as the amounts attributable to such options represent standalone selling price, and therefore no consideration is allocated to these items at the inception of an agreement. When a partner exercises its option to license a drug or requests the additional goods or services, a new performance obligation is created for that item. Once performance obligations are identified, we then recognize as revenue the amount of the transaction price that we allocated to the respective performance obligation when (or as) each performance obligation is satisfied, either at a point in time or over time. If the performance obligation is satisfied over time, we recognize revenue based on the use of an output or input method. As of September 30, 2019, we had three collaborative and license revenue agreements: our strategic collaboration, option and license agreement with Novartis Pharma AG, or Novartis, which we entered into in January 2017, our collaboration and license agreement with PTC Therapeutics International Limited, or PTC Therapeutics, which we entered into in August 2018, and our TTR development, commercialization, collaboration and license agreement with Ionis, under which we are recognizing commercial product revenue related to TEGSEDI sales subsequent to product launch in the fourth quarter of 2018. For a complete discussion of the accounting related to our collaborative agreements, see Note 7, Strategic Collaboration with Novartis, Note 8, License Agreements and Services Agreement with Ionis, Note 9, Collaboration and License Agreement with PTC Therapeutics, and the section below entitled Product Revenue, Net.

Product Revenue, Net

Subsequent to obtaining regulatory approval from the United States Food and Drug Administration, or FDA, on October 5, 2018, we began to sell TEGSEDI in the U.S. in the fourth quarter of 2018. The product is distributed through an exclusive distribution agreement with a third-party logistics company, or 3PL, that takes title to the product and represents our sole customer in the U.S. Our U.S. customer distributes TEGSEDI to a specialty pharmacy and a specialty distributor (collectively referred to as “wholesalers”), who then distribute the product to health care providers and patients. On July 11, 2018, we obtained regulatory approval of TEGSEDI in Europe, following which we began to sell TEGSEDI in Europe in the fourth quarter of 2018.  On May 7, 2019, we obtained regulatory approval of WAYLIVRA in Europe, following which we began to sell WAYLIVRA in Europe in the third quarter of 2019. TEGSEDI and WAYLIVRA are distributed through 3PLs that distribute the product to hospitals and pharmacies in Europe.

Revenue from product sales is recognized when the customer obtains control of our product, which occurs upon transfer of title to the customer. Revenue is recognized at the amount that we expect to be entitled to in exchange for the sale of our product.  This amount includes both fixed and variable consideration and excludes amounts that are collected from customers and remitted to governmental authorities. We record shipping and handling costs within cost of goods sold on our condensed consolidated statement of operations. We classify payments to customers or other parties in the distribution channel for services that are distinct and priced at fair value as selling, general and administrative expenses on our condensed consolidated statements of operations. Payments to customers or other parties in the distribution channel that do not meet those criteria are classified as a reduction of revenue, as discussed further below. We have elected not to adjust consideration for the effects of a significant financing component when the period between the transfer of a promised good or service to the customer and when the customer pays for that good or service will be one year or less. Our payment terms are generally between thirty to ninety days.

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Reserves for Variable Consideration

Revenue from product sales is recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from discounts, returns, chargebacks, rebates, co-pay assistance and other allowances that are offered within contracts between us and our customers, wholesalers, health care providers and other indirect customers relating to the sale of TEGSEDI and WAYLIVRA. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as a reduction of accounts receivable or a current liability. Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, product revenue net of these reserves reflects our best estimate of the amount of consideration to which we are entitled based on the terms of the contract. The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is considered probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known.

The following are the components of variable consideration related to product revenue:

Chargebacks:  In the U.S., we estimate obligations resulting from contractual commitments with the government and other entities to sell products to qualified healthcare providers at prices lower than the list prices charged to our U.S. customer. Our U.S. customer charges us for the difference between what they pay for the product and the selling price to the qualified healthcare providers. We record reserves for these chargebacks related to product sold to our U.S. customer during the reporting period as well as our estimate of product that remains in the distribution channel at the end of the reporting period that we expect will be sold to qualified healthcare providers in future periods.

Government rebates: We are subject to discount obligations under government programs, including Medicaid and Medicare programs in the U.S., and we record reserves for government rebates based on statutory discount rates and estimated utilization in the period in which revenue is recognized. We estimate Medicaid and Medicare rebates based upon estimated payer mix. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability that is included in accrued expenses on our condensed consolidated balance sheet. For Medicare, we also estimate the number of patients in the prescription drug coverage gap for whom we expect we will owe an additional liability under the Medicare Part D program. On a quarterly basis, we update our estimates and record any adjustments in the period that we identify the adjustments.

Trade discounts and allowances: We provide customary invoice discounts on sales to our U.S. customer for prompt payment that are recorded as a reduction of revenue in the period the related product revenue is recognized.  

Distribution fees: We receive and pay for various distribution services provided by our U.S. and E.U. customers and wholesalers in the U.S. and these fees are generally accounted for as a reduction of revenue. To the extent that the services received are distinct from the sale of products to our customers, we classify these payments as selling, general and administrative expenses.

Product Returns: Our U.S. customer has return rights and the wholesalers in the U.S. have limited return rights primarily related to the product’s expiration date. We estimate the amount of product sales that may be returned and record the estimate as a reduction of revenue and a refund liability in the period the related product revenue is recognized. Based on our distribution model, contractual inventory limits with our U.S. customer and wholesalers and the price of TEGSEDI, we believe there will be minimal returns in the U.S. Our E.U. customers only take title to TEGSEDI and WAYLIVRA when an order is received and therefore do not maintain excess inventory levels of our products. Accordingly, there is limited return risk in the E.U. and we have not recorded any return estimate in the transaction price for products sold in Europe.

Other incentives:  In the U.S., other incentives include co-payment assistance that we provide to patients with commercial insurance that have coverage and reside in states that allow co-payment assistance. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that we expect to receive associated with product that has been recognized as revenue. The estimate is recorded as a reduction of revenue in the same period that the related revenue is recognized.

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During the three and nine months ended September 30, 2019, we recorded product revenue, net, of $11.9 millionand $28.6million, respectively. Given thatwe began to sell WAYLIVRA in September 2019, a majority of the product revenue during the three and nine months ended September 30, 2019 relates to TEGSEDI. The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the nine months ended September 30, 2019 (in thousands):

	Chargebacks, discounts and fees			Government and other rebates			Returns		Total
Balance at December 31, 2018	$	50		$	293		$	5	$	348
Provision related to current period sales		824			1,648			254		2,726
Adjustment related to prior period sales		(4	)		(28	)		—		(32	)
Credits or payments made during the period		(601	)		(954	)		—		(1,555	)
Balance at September 30, 2019	$	269		$	959		$	259	$	1,487

Leases

Topic 842 Adoption

In February 2016, the FASB issued amended accounting guidance related to lease accounting. This guidance superseded the lease requirements we previously followed in ASC Topic 840, Leases, or Topic 840, and created a new lease accounting standard, ASC Topic 842, Leases, or Topic 842. Under Topic 842, an entity will record all leases with a term longer than one year on its balance sheet. Further, an entity will record a liability with a value equal to the present value of payments it will make over the life of the lease (lease liability) and an asset representing the underlying leased asset (right-of-use asset). The new accounting guidance requires entities to determine if its leases are operating or financing leases. Entities will recognize expense for operating leases on a straight-line basis as an operating expense. If an entity determines a lease is a financing lease, it will record both interest and amortization expense and generally the expense will be higher in the earlier periods of the lease.

We adopted Topic 842 on January 1, 2019 and adjusted our opening condensed consolidated balance sheet on that date to record our operating lease right-of-use assets and lease liabilities. We adopted Topic 842 using the available practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward historical lease classification of those leases we had in place as of January 1, 2019. Results for the nine months ended September 30, 2019 are presented under Topic 842. Results for the nine months ended September 30, 2018 are presented in accordance with our historic accounting under Topic 840.

The impact of the adoption of Topic 842 on the accompanying condensed consolidated balance sheet as of January 1, 2019 was as follows (in thousands):

	December 31, 2018		Adjustment due to adoption of Topic 842		January 1, 2019
Operating lease right-of-use assets		—		11,932		11,932
Other current liabilities		968		1,029		1,997
Long-term portion of lease liabilities		4,442		10,915		15,357

Leases

We determine if an arrangement contains a lease at inception. We currently only have operating leases. We recognize an operating lease right-of-use asset and associated short and long-term lease liability for operating leases greater than one year on our condensed consolidated balance sheet. We calculate our operating lease right-of-use asset and lease liability based on the present value of the future minimum lease payments we will pay over the lease term. We determine the lease term at the commencement date of the lease and we include renewal options in the lease term if we are reasonably certain that we will exercise the option. As our current leases do not provide an implicit interest rate, we used our incremental borrowing rate in determining the present value of future payments. We estimated the incremental borrowing rate based on the observed interest rates for secured debt issued by companies with similar credit ratings and with similar terms. Our operating lease right-of-use asset also includes any lease payments we made and excludes any tenant improvement allowances we received.

We recognize rent expense for the lease components of our operating leases on a straight-line basis over the term of our lease. We recognize non-lease components, such as common area maintenance expenses, in the period we incur the expense.

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New Accounting Pronouncements – Recently Issued

In June 2016, the FASB issued guidance that changes the measurement of credit losses for most financial assets and certain other instruments. If we have credit losses, this updated guidance requires us to record allowances for these instruments under a new expected credit loss model. This model requires us to estimate the expected credit loss of an instrument over its lifetime, which represents the portion of the amortized cost basis we do not expect to collect. The new guidance requires us to remeasure our allowance in each reporting period we have credit losses. The new standard is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for periods beginning after December 15, 2018. When we adopt the new standard, we will make any adjustments to beginning balances through a cumulative-effect adjustment to accumulated deficit on that date. We plan to adopt this guidance on January 1, 2020. We do not anticipate this guidance having a significant impact on our condensed consolidated financial statements and disclosures.

In August 2018, the FASB issued clarifying guidance on how to account for implementation costs related to cloud-servicing arrangements. The guidance states that if these fees qualify to be capitalized and amortized over the service period, they need to be expensed in the same line item as the service expense and recognized in the same balance sheet category. The update can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The updated guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. We plan to adopt this guidance on January 1, 2020 on a prospective basis. We do not anticipate this guidance having a significant impact on our condensed consolidated financial statements and disclosures.

In August 2018, the FASB updated its disclosure requirements related to Level 1, 2 and 3 fair value measurements. The update included deletion and modification of certain disclosure requirements and additional disclosure related to Level 3 measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. We adopted this updated guidance on January 1, 2019 and it did not have a significant impact on our disclosures.

In November 2018, the FASB issued clarifying guidance on the interaction between the collaboration accounting guidance and the new revenue recognition guidance we adopted on January 1, 2018 (Topic 606). Below is the clarifying guidance and how we will implement it (in italics):  

1) When a participant is considered a customer in a collaborative arrangement, all of the associated accounting under Topic 606 should be applied.

● We will apply all of the associated accounting under Topic 606 when we determine a participant in a collaborative arrangement is a customer.

2) Adds “unit of account” concept to collaboration accounting guidance to align with Topic 606. The “unit of account” concept is used to determine if revenue is recognized or if a contra expense is recognized from consideration received under a collaboration.

● We will use the “unit of account” concept when we receive consideration under a collaboration agreement to determine when we recognize revenue or a contra expense.

3) The clarifying guidance precludes us from recognizing revenue under Topic 606 when we determine a transaction with a collaborative partner is not a customer and is not directly related to the sales to third parties.

● When we conclude a collaboration partner is not a customer and is not directly related to the sales to third parties, we will not recognize revenue for the transaction.

The updated guidance is effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. We plan to adopt this guidance on January 1, 2020. We are currently assessing the effects it could have on our condensed consolidated financial statements and disclosures.

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3. Investments and Fair Value Measurements

Investments

As of September 30, 2019 and December 31, 2018, we primarily invested our excess cash in money market funds and debt instruments of the U.S. Treasury, financial institutions, corporations and U.S. government agencies with strong credit ratings and an investment grade rating at or above A-1, P-1 or F-1 by Moody’s, S&P or Fitch, respectively. We have established guidelines relative to diversification and maturities that maintain safety and liquidity. We periodically review and modify these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity.

The following is a summary of our investments at September 30, 2019 and December 31, 2018 (in thousands):

			Gross Unrealized					Estimated
September 30, 2019	Cost		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	67,249	$	31	$	(2	)	$	67,278
Debt securities issued by U.S. government agencies		49,466		56		(3	)		49,519
Total securities with a maturity of one year or less	$	116,715	$	87	$	(5	)	$	116,797
Corporate debt securities		6,555		10		—			6,565
Total securities with a maturity of one to two years		6,555		10		—			6,565
Total available-for-sale securities	$	123,270	$	97	$	(5	)	$	123,362

			Gross Unrealized					Estimated
December 31, 2018	Cost		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	81,770	$	—	$	(151	)	$	81,619
Debt securities issued by U.S. government agencies		85,578		—		(42	)		85,536
Total securities with a maturity of one year or less	$	167,348	$	—	$	(193	)	$	167,155

We recorded unrealized gains (losses) related to the securities listed above as of September 30, 2019 and December 31, 2018. We believe that the decline in value of certain of these securities is temporary and primarily related to the change in market interest rates since purchase. We believe it is more likely than not that we will be able to hold these securities to maturity. Therefore, we anticipate a full recovery of the amortized cost basis of these securities at maturity.

All of our available-for-sale securities are available to us for use in our current operations. As a result, we categorized all of these securities as current assets even though the stated maturity of some individual securities may be one year or more beyond the balance sheet date.

Fair Value Measurements

The following tables present the investments we held at September 30, 2019 and December 31, 2018 that are regularly measured and carried at fair value. The table segregates each security by the level within the fair value hierarchy of valuation techniques we utilized to determine the respective security’s fair value (in thousands):

	At September 30, 2019		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Money market funds (1)	$	124,972	$	124,972	$	—
Corporate debt securities (3)		73,843		—		73,843
Debt securities issued by U.S. government agencies (3)		49,519		—		49,519
Total	$	248,334	$	124,972	$	123,362

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	At December 31, 2018		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Money market funds (1)	$	82,343	$	82,343	$	—
Corporate debt securities (2)		81,619		—		81,619
Debt securities issued by U.S. government agencies (3)		85,536		—		85,536
Total	$	249,498	$	82,343	$	167,155

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

(2) At December 31, 2018, $1.0 million was included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet.

(3) Included in short-term investments on our condensed consolidated balance sheets.

4. Property, Plant and Equipment

The following table presents property and equipment, at cost, and related accumulated depreciation (in thousands):

	September 30,			December 31,
	2019			2018
Furniture and fixtures	$	1,611		$	1,611
Computer equipment and software		140			102
Manufacturing equipment		386			—
Leasehold improvements		3,955			4,213
Total property and equipment, at cost		6,092			5,926
Less accumulated depreciation and amortization		(815	)		(230	)
Total property and equipment, net	$	5,277		$	5,696

Total depreciation expense amounted to $0.2 million and $0.6 million for the three and nine months ended September 30, 2019, respectively. Total depreciation expense was nominal for each of the three and nine months ended September 30, 2018. As part of the operating lease for our corporate headquarters, the landlord provided a tenant improvement allowance of $3.6 million, which we utilized to construct leasehold improvements.

5. Inventory

Prior to the regulatory approval of our product candidates, we incur expenses for the manufacturing of drug product that could potentially be available to support the commercial launch of our products. Until the first reporting period when regulatory approval has been received or is otherwise considered probable, we record all such costs as research and development expense.

TEGSEDI inventory related costs incurred subsequent to July 1, 2018 are reflected as inventory on our condensed consolidated balance sheet at the lower of cost or net realizable value under the first-in, first-out, or FIFO, basis. We did not have capitalized costs related to WAYLIVRA on our condensed consolidated balance sheet as of September 30, 2019. We periodically analyze our inventory levels and write down inventory that has become obsolete, inventory that has a cost basis in excess of its estimated realizable value and inventory in excess of expected sales requirements as cost of product sales. The determination of whether inventory costs will be realizable requires estimates by our management and if actual market conditions are less favorable than projected by our management, additional write-downs of inventory may be required which would be recorded as a cost of product sales in the condensed consolidated statements of operations. We did not record any material inventory write-offs for the nine months ended September 30, 2019 or 2018.

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The following table presents inventory (in thousands):

	September 30,		December 31,
	2019		2018
Raw materials	$	6,520	$	—
Work in process		1,802		—
Finished goods		319		85
Total inventories	$	8,641	$	85

6. Intangible Assets, net

The following table presents intangible assets (in thousands):

	September 30,			December 31,			Estimated
	2019			2018			useful life
Acquired and in-licensed rights	$	2,262		$	2,262		7 - 21 Years
Capitalized regulatory approval milestones		90,000			90,000		16 Years
Less accumulated amortization		(7,733	)		(3,348	)
Total intangible assets, net	$	84,529		$	88,914

We recorded $1.5 million and $4.4 million, respectively, in amortization expense related to intangible assets during the three and nine months ended September 30, 2019. For the three and nine months ended September 30, 2018, we recorded $0.7 million and $0.8 million, respectively. Estimated future amortization expense for intangible assets as of September 30, 2019 is as follows (in thousands):

	Total
2019	$	1,478
2020		5,879
2021		5,861
2022		5,856
2023		5,843
Thereafter		59,612
	$	84,529

The weighted average remaining amortizable life of our patents was 11.05 years at September 30, 2019.

For additional detail of Akcea's license agreements with Ionis see Note 8, License Agreements and Services Agreement with Ionis.

7. Strategic Collaboration with Novartis

Background

In January 2017, we initiated a strategic collaboration with Novartis for the development and commercialization of AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx. Under the terms of the Novartis collaboration, we agreed to complete a Phase 2 program, conduct an end-of-Phase 2 meeting with the FDA, and provide initial quantities of the active pharmaceutical ingredient, or API, for each drug. Novartis was granted the exclusive option to further develop and commercialize each drug and would be responsible for all further global development, regulatory and commercialization activities and costs for each such drug.

AKCEA-APO(a)-L_Rx

In December 2018, we conducted an end-of-Phase 2 meeting with the FDA. In February 2019, Novartis exercised its exclusive option to further develop and commercialize AKCEA-APO(a)-L_Rx. The accounting treatment for this option exercise is discussed in further detail below.

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AKCEA-APOCIII-L_Rx

We are responsible for completing a Phase 2 program, conducting an end-of-Phase 2 meeting with the FDA and providing initial quantities of API for AKCEA-APOCIII-L_Rx. Novartis has an exclusive option to further develop and commercialize this drug. If Novartis exercises its option for this drug, Novartis will be responsible for all further global development, regulatory and co-commercialization activities and costs for this drug.

Accounting Analysis

We received a $75.0 million upfront payment in the first quarter of 2017, of which we retained $60.0 million and paid Ionis $15.0 million as a sublicense fee under our Cardiometabolic License Agreement with Ionis.

At commencement of our strategic collaboration, we identified the following four distinct performance obligations:

• Development activities for AKCEA-APO(a)-L_Rx;

• Development activities for AKCEA-APOCIII-L_Rx;

• API for AKCEA-APO(a)-L_Rx; and

• API for AKCEA-APOCIII-L_Rx.

The development activities and the supply of API are distinct because Novartis or another third party could provide these items without our assistance.

We determined the transaction price for the Novartis collaboration was $108.4 million, comprised of the following:

• $75.0 million from the upfront payment we received;

• $28.4 million for the premium paid by Novartis, which represents the excess of the fair value Ionis received from Novartis' purchase of Ionis' stock at a premium in the first quarter of 2017; and

• $5.0 million for the premium Novartis would have paid to purchase Ionis' stock if we did not complete our IPO within 15 months of the inception of the agreement.

We are recognizing revenue on the $75.0 million upfront payment plus the premium paid by Novartis from its purchase of Ionis’ stock and the premium associated with Novartis’ obligation to purchase Ionis’ stock if we did not complete our IPO because we are the party providing the services and API under the collaboration agreement with Novartis.

None of the options or development or regulatory milestone payments under this agreement were included in the upfront transaction price determined in January 2017 as all payments were fully constrained at that time. As part of our evaluation of the constraint, we considered numerous factors, including the fact that achievement of the milestones is outside of our control and contingent upon the success of our clinical trials, Novartis’ efforts, and the receipt of regulatory approval. We re-evaluate the transaction price, including estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

Based on the distinct performance obligations under the Novartis collaboration, we allocated the $108.4 million transaction price based on relative stand-alone selling prices of each of our performance obligations as follows:

• $64.0 million for development services for AKCEA-APO(a)-L_Rx;

• $40.1 million for development services for AKCEA-APOCIII-L_Rx;

• $1.5 million for the delivery of AKCEA-APO(a)-L_Rx API; and

• $2.8 million for the delivery of AKCEA-APOCIII-L_Rx API.

We are recognizing revenue related to each of our performance obligations as follows:

• We completed the development services performance obligation for AKCEA-APO(a)-L_Rx as of June 30, 2019. As such, all revenue allocated to the AKCEA-APO(a)-L_Rx development services revenue stream was fully recognized as of the end of the second quarter of 2019;

• We are satisfying the development services performance obligation for AKCEA-APOCIII-L_Rx as the research and development services are performed. We expect research and development services to be completed by mid-2020. We recognize revenue related to research and development services performed using an input method by calculating costs incurred at each period end relative to total costs expected to be incurred;

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• We recognized the amount attributed to the AKCEA-APO(a)-L_Rx API supply when we delivered API to Novartis in 2017; and

• We recognized the amount attributed to the AKCEA-APOCIII-L_Rx API supply when we delivered API to Novartis in May 2018.

Additionally, we and Ionis entered into a stock purchase agreement, or SPA, with Novartis. Under the SPA, in July 2017, Novartis purchased $50.0 million of our common stock in a separate private placement concurrent with the completion of our IPO at a price per share equal to the IPO price.

On February 22, 2019, Novartis exercised its option to license AKCEA-APO(a)-L_Rx. We identified a separate performance obligation upon Novartis’ license of AKCEA-APO(a)-L_Rx because the license is distinct from our other performance obligations. Accordingly, we recognized a license fee of $150.0 million in the first quarter of 2019 because Novartis had full use of the license without any continuing involvement from us. Additionally, we did not have any further performance obligations related to the license after Novartis exercised its option to license AKCEA-APO(a)-L_Rx. Novartis is responsible for conducting and funding all future development, regulatory and commercialization activities for AKCEA-APO(a)-L_Rx. In the first quarter of 2019, we issued 2,837,373 shares of our common stock to Ionis as payment of the $75.0 million sublicense fee due to Ionis related to the option exercised by Novartis. For AKCEA-APO(a)-L_Rx, we are also eligible to receive up to $675.0 million in milestone payments, including $25.0 million for the achievement of a development milestone, up to $290.0 million for the achievement of regulatory milestones and up to $360.0 million for the achievement of commercialization milestones. In connection with Novartis’ exercise of its option to exclusively license AKCEA-APO(a)-L_Rx, Akcea and Novartis established a more definitive co-commercialization framework under which we would negotiate the co-commercialization of AKCEA-APO(a)-L_Rx between us and Novartis in selected markets. Included in this framework is an option by which Novartis could solely commercialize AKCEA-APO(a)-L_Rx in exchange for Novartis paying us increased commercial milestone payments based on sales of AKCEA-APO(a)-L_Rx.

In the third quarter of 2019, we delivered additional AKCEA-APO(a)-L_Rx API to Novartis. We identified a separate performance obligation upon the delivery of the API because the delivery is distinct from other performance obligations. Accordingly, we recognized $5.5 million of research and development revenue in the third quarter of 2019 upon receipt of the API supply by Novartis. Novartis has the option to purchase additional API of AKCEA-APO(a)-L_Rx in the future at agreed upon terms and conditions pursuant to the strategic collaboration agreement.

If Novartis exercises its option for AKCEA-APOCIII-L_Rx, Novartis will pay us a license fee equal to $150.0 million and we will owe half of this amount, or $75.0 million, to Ionis as a sublicense fee. If Novartis exercises its option to license AKCEA-APOCIII-L_Rx, we are eligible to receive up to $530.0 million in milestone payments, including $25.0 million for the achievement of a development milestone, up to $240.0 million for the achievement of regulatory milestones and up to $265.0 million for the achievement of commercialization milestones. If Novartis licenses AKCEA-APOCIII-L_Rx, we may co-commercialize AKCEA-APOCIII-L_Rx through our specialized sales force in selected markets, under terms and conditions that we plan to negotiate with Novartis in the future.

We will earn the next milestone payment of $25.0 million under this collaboration if Novartis reaches a specific level of enrollment related to the Phase 3 study for either drug. We are also eligible to receive tiered royalties in the mid-teens to low twenty percent range on net sales of AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx. Novartis will reduce these royalties upon the expiration of certain patents or if a generic competitor negatively impacts the product in a specific country. We pay 50% of license fees, milestone payments and royalties under this agreement to Ionis as a sublicense fee.

During the three and nine months ended September 30, 2019, we earned revenue of $8.5 million and $176.3 million, respectively, from our strategic collaboration with Novartis, representing 100% of our research and development and license revenue. In comparison, we earned revenue of $7.2 million and $42.7 million for the same periods in 2018. During the three and nine months ended September 30, 2019, we recognized $2.3 million and $18.0 million of revenue, respectively, from amounts that were in our beginning deferred revenue balance. In comparison, we recognized $6.8 million and $36.5 million for the same periods in 2018, respectively. Our condensed consolidated balance sheet at September 30, 2019 and December 31, 2018 includes deferred revenue of $10.8 million and $28.8 million, respectively, related to our strategic collaboration with Novartis.

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8. License Agreements and Services Agreement with Ionis

In December 2015, we entered into a development, commercialization and license agreement related to our cardiometabolic franchise and a services agreement with Ionis. In March 2018, we entered into a new development, commercialization, collaboration and license agreement related to our TTR franchise and amended the services agreement previously in place with Ionis. The following sections summarize these related party agreements with Ionis.

Cardiometabolic Development, Commercialization and License Agreement

Our development, commercialization and license agreement, or Cardiometabolic License Agreement, with Ionis granted exclusive rights to us to develop and commercialize WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-APOCIII-L_Rx, and AKCEA-ANGPTL3-L_Rx, which are collectively referred to as the Lipid Drugs. Ionis has granted us an exclusive license to certain patents to develop and commercialize products containing the Lipid Drugs. Ionis also granted us a non-exclusive license to the Ionis antisense platform technology for us to develop and commercialize products containing the Lipid Drugs. Ionis also granted us non-exclusive rights under its manufacturing technology to manufacture the Lipid Drugs in our own facility or at a contract manufacturer. As a part of this agreement, we and Ionis agreed not to work with any other parties to develop or commercialize other RNA-targeting drugs that are designed to inhibit any of the Lipid Drug targets so long as we are developing or commercializing the Lipid Drugs.

We and Ionis share development responsibilities for the Lipid Drugs, other than drugs licensed to Novartis and to Pfizer Inc., or Pfizer. We pay Ionis for the research and development expenses it incurs on our behalf, which include both external and internal expenses. External research and development expenses include costs for contract research organizations, or CROs, costs to conduct nonclinical and clinical studies on our drugs, costs to acquire and evaluate clinical study data, such as investigator grants, patient screening fees and laboratory work, and fees paid to consultants. Internal research and development expenses include costs for the work that Ionis' research and development employees perform for us. Ionis charges us a full-time equivalent rate that covers personnel-related expenses, including salaries and benefits, plus an allocation of facility-related expenses, including rent, utilities, insurance and property taxes, for those development employees who work either directly or indirectly on the development of our drugs. We also pay Ionis for the API and drug product we use in our nonclinical and clinical studies for all of our drugs. Ionis manufactures the API for us and charges us a price per gram consistent with the price Ionis charges its pharmaceutical partners, which includes the cost for direct materials, direct labor and overhead required to manufacture the API. If we need the API filled in vials or prefilled syringes for our clinical studies and Ionis contracts with a third party to perform this work, Ionis will charge us for the resulting cost.

As we commercialize each of the Lipid Drugs, other than drugs licensed to Novartis and to Pfizer, we will pay Ionis royalties from the mid-teens to the mid-twenty percent range on sales related to the Lipid Drugs that we sell. If we sell a Lipid Drug for a Rare Disease Indication (defined in the agreement as less than 500,000 patients worldwide or an indication that required a Phase 3 program of less than 1,000 patients and less than two years of treatment), we will pay a higher royalty rate to Ionis than if we sell a Lipid Drug for a Broad Disease Patient Population (defined in the agreement as more than 500,000 patients worldwide or an indication that required a Phase 3 program of 1,000 or more patients and two or more years of treatment). Other than with respect to the drugs licensed to Novartis under the collaboration agreement with Novartis and AKCEA-ANGPTL3-L_Rx which is licensed to Pfizer under the license agreement with Pfizer, if our annual sales reach $500.0 million, $1.0 billion and $2.0 billion, we will be obligated to pay Ionis sales milestones in the amount of $50.0 million for each sales milestone reached by each Lipid Drug. If and when triggered, we will pay Ionis each of these sales milestones over the subsequent 12 quarters in equal payments. We share 50% of payments we receive from Novartis and Pfizer with Ionis.

We may terminate this agreement if Ionis is in material breach of the agreement. Ionis may terminate this agreement if we are in material breach of the agreement. In each circumstance the party that is in breach will have an opportunity to cure the breach prior to the other party terminating this agreement.

In the first quarter of 2017, we entered into letter agreements with Ionis to reflect the agreed upon payment terms with respect to the upfront option payment that we received from Novartis and to allocate the premium that Novartis paid for Ionis' common stock in connection with our strategic collaboration with Novartis. In the fourth quarter of 2019, we entered into a letter agreement with Ionis to reflect the agreed upon payment terms with respect to the upfront license fee we will receive from Pfizer in connection with our license agreement with Pfizer. For additional detail regarding our strategic collaboration with Novartis, see Note 7, Strategic Collaboration with Novartis. For additional detail regarding our license agreement with Pfizer, see Note 13, Subsequent Events.

TTR Development, Commercialization, Collaboration and License Agreement

On April 17, 2018, our stockholders, other than Ionis and its affiliates, approved the development, commercialization, collaboration and license agreement, or TTR License Agreement, and a stock purchase agreement, or Ionis SPA, with Ionis, which was entered into on March 14, 2018. In addition, in connection with these agreements, we entered into an amended and restated services agreement, or Amended Services Agreement, and an amended and restated investor rights agreement, or Amended Investor Rights Agreement, with Ionis.

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We determined that the TTR License Agreement and Ionis SPA included provisions which required the approval of the agreements by our stockholders other than Ionis and its affiliates, which we deemed was not perfunctory in nature, therefore, we concluded that the approved date of the agreements for accounting purposes was April 17, 2018, the date on which such approval was received and the closing of the agreements took place.

In accordance with the terms and provisions of the TTR License Agreement, we received rights to:

• commercialize TEGSEDI following receipt of regulatory approval and perform certain other non-commercial activities with respect to TEGSEDI, in each case, in accordance with a global strategic plan;

• partner on the completion of all pivotal studies of a follow-on drug to TEGSEDI, AKCEA-TTR-L_Rx, and perform other non-commercial activities with respect to AKCEA-TTR-L_Rx;

• commercialize AKCEA-TTR-L_Rx following receipt of regulatory approval in accordance with a global strategic plan;

• share in profits and losses with respect to TEGSEDI and AKCEA-TTR-L_Rx;

• manufacture (including through a third party) each product following receipt of regulatory approval for such product; and

• sublicense the development and commercialization of either product to third parties or affiliates, with the consent of Ionis.

As consideration for the grant of rights under the TTR License Agreement, we paid an upfront licensing fee of $150.0million, which was paid through the issuance of 8 million shares of our common stock priced by reference to a trading average at the time of execution of the agreements. In addition, we are obligated to make milestone payments to Ionis in connection with the achievement of certain development, regulatory and commercialization events. These milestone payments include up to $110.0 million, if all TEGSEDI regulatory approval milestones are met; up to $145.0 million, if all AKCEA-TTR-L_Rx regulatory milestones are met; and a total of $1.3 billion, in the form of seven milestone payments, if all sales milestones for the combined products are met. We can elect to pay each milestone payment in cash or shares of our common stock and Ionis may require payment in shares of common stock up until the achievement of the milestone event for aggregate worldwide annual net sales of $750.0 million for the products. Subsequent to the achievement of the milestone event for aggregate worldwide annual net sales of $750.0 million, all subsequent milestone payments must be paid in cash.

The TTR License Agreement will remain in effect until the expiration of all included payment obligations, unless earlier terminated. The TTR License Agreement can be terminated by mutual consent of us and Ionis, by either us or Ionis upon certain events, by either party upon material breach, or by Akcea for convenience upon providing 90 days written notice to Ionis. Upon termination, all rights received under the TTR License Agreement will terminate.

To support the commercialization of TEGSEDI and AKCEA-TTR-L_Rx, Ionis purchased 10.7 million shares of our common stock for $200 million.

In connection with the TTR licensing transaction, we amended our Certificate of Incorporation to increase our authorized shares of common stock from 100,000,000 shares to 125,000,000 shares.

We determined that the upfront accounting for the TTR License Agreement should follow the accounting guidance for common control transactions given the nature of the relationship between us and Ionis, including the fact that Ionis maintains a controlling ownership position in us.

In addition, we assessed the identifiable assets that were acquired under the terms of the TTR License Agreement, including the licensed rights to TEGSEDI and AKCEA-TTR-L_Rx, certain batches of TEGSEDI materials, the transfer of a minimal number of employees from Ionis to us and certain manufacturing and clinical research agreements. We concluded that the licensed rights represented a group of similar identifiable assets and that substantially all of the fair value of the acquisition resides in the licensed rights. As such, we concluded that the acquired assets did not meet the definition of a business and that we should account for the TTR License Agreement as an asset acquisition under common control guidance. Accordingly, we recorded the carrying value of the licensed rights held by Ionis of $0.6 million as an intangible asset at the date of acquisition and we are amortizing the amount over the remaining patent life.  

In connection with the transaction, we also purchased $4.7 million of commercial TEGSEDI inventory held by Ionis. In addition, in the first quarter of 2019 we purchased $13.5 million of clinical TEGSEDI material held by Ionis. Prospectively we are responsible for the procurement of all additional inventory. The inventory and clinical material did not have a carrying value on the books of Ionis at the time of purchase. As such, in accordance with the accounting guidance for common control transactions above, we recorded the purchase of this inventory and clinical material as a reduction of additional paid in capital. This amount represented a cash distribution to Ionis; therefore, we have included this distribution as a distribution to Ionis for purposes of loss per share and we have applied the two–class method as discussed in Note 11, Basic and Diluted Net Loss Per Share.

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We also determined that the TTR License Agreement represented a collaboration arrangement as defined by ASC 808. Prior to April 1, 2018, Ionis was responsible for all costs associated with TEGSEDI and for the period from April 1, 2018 to December 31, 2018, we were responsible for all costs associated with TEGSEDI. We and Ionis share all costs associated with AKCEA-TTR-L_Rx from January 1, 2018 forward on a 50/50 basis. We recorded $3.1 million paid to Ionis for costs related to the period prior to the closing of the TTR License Agreement to equity, as these amounts were previously expensed in the financial statements of Ionis. This amount also represents a cash distribution to Ionis and was included as an adjustment to the net loss attributable to Ionis for purposes of applying the two-class method for loss per share as discussed in Note 11, Basic and Diluted Net Loss Per Share.

On July 11, 2018, we received marketing authorization, or MA, approval for TEGSEDI from the European Commission, or EC, for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hereditary transthyretin amyloidosis, or hATTR amyloidosis, in the E.U. As a result of the MA approval in the E.U., on August 3, 2018 we issued 1,597,571 shares of our common stock to Ionis as payment of the $40.0 million regulatory approval milestone for TEGSEDI. We capitalized this regulatory approval milestone payment as a licensed intangible asset on our condensed consolidated balance sheet as the amount is expected to be recoverable through future cash flows.

On October 5, 2018, we received regulatory approval for TEGSEDI from the FDA for the treatment of polyneuropathy of hereditary transthyretin-mediated amyloidosis in adults in the U.S. As a result of the regulatory approval in the U.S., on October 17, 2018 we issued 1,671,849 shares of our common stock to Ionis as payment of the $50.0 million regulatory approval milestone for TEGSEDI. We capitalized this regulatory approval milestone payment as a licensed intangible asset on our condensed consolidated balance sheet as the amount is expected to be recoverable through future cash flows.

Both milestone payments are being amortized to cost of sales on a straight-line basis over the licensed assets’ expected useful life of approximately 16 years from the date of the initial regulatory approval milestone achievement. Amortization expense for the TTR milestone payments was $1.4 million and $4.3 million, respectively, for the three and nine months ended September 30, 2019.  In comparison, we recognized $0.7 million for each of the same periods in 2018.

Profit/(Loss) Share

Under the TTR License Agreement, we and Ionis agreed to share TEGSEDI and AKCEA-TTR-L_Rx profits and losses as follows: for TEGSEDI, beginning on the earlier of (i) the first day of the quarter after receipt of regulatory approval of TEGSEDI in the United States, or (ii) January 1, 2019, the parties will share profits and losses from the development and commercialization of TEGSEDI (A) on a 60/40 basis (60% to Ionis and 40% to us) through the end of the quarter in which the first commercial sale of AKCEA-TTR-L_Rx occurs, and (B) on a 50/50 basis commencing on the first day of the first quarter thereafter; and for AKCEA-TTR-L_Rx, beginning January 1, 2018, the parties will share all profits and losses from the development and commercialization of AKCEA-TTR-L_Rx on a 50/50 basis.

In the first quarter of 2019, the profit sharing provisions for TEGSEDI under the TTR License Agreement with Ionis became effective. As we are the principal for all commercial activities related to the TTR License Agreement, we record all commercial activities related to TEGSEDI on a gross basis in our condensed consolidated statement of operations, including revenues, cost of sales and sales and marketing expenses. The Ionis share of commercialization costs for TEGSEDI is separately presented within operating expenses in our condensed consolidated statement of operations under the caption “Net loss share from commercial activities under arrangement with Ionis Pharmaceuticals, Inc.” As we are a collaborator with Ionis for the execution of TTR development activities, we record all research and development expenses on a net basis representing our proportionate share of total costs incurred by Ionis and us. Accordingly, only our share of total costs incurred related to development activities under the TTR License Agreement is presented within research and development expense in our condensed consolidated statement of operations.

A summary of the loss share related to the commercial activities under the TTR Agreement is as follows:

	Three Months Ended September 30,			Nine Months Ended September 30,
	2019			2019
Net losses incurred by the collaboration related to the    commercial activities under the TTR Agreement	$	(14,814	)	$	(49,021	)
Ionis' share of commercial losses under the TTR Agreement    reflected in our condensed consolidated statements of    operations		(8,889	)		(29,410	)
Akcea's share of commercial losses under the TTR    Agreement reflected in our condensed consolidated    statements of operations		(5,925	)		(19,611	)

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A summary of the development expenses related to the TTR Agreement is as follows:

	Three Months Ended September 30,			Nine Months Ended September 30,
	2019			2019
Total development expense incurred by the collaboration    related to development activities under the TTR Agreement	$	(17,243	)	$	(43,655	)
Akcea's share of TTR development expense reflected in    research and development expense in our condensed    consolidated statements of operations	$	(7,525	)	$	(18,923	)

We did not record any commercial or research and development expense related to the profit/(loss) share under the TTR License Agreement during the three and nine months ended September 30, 2018.

Services Agreement

We originally entered into a services agreement with Ionis in December 2015 in conjunction with the Cardiometabolic License Agreement. We entered into the Amended Services Agreement with Ionis in April 2018 in conjunction with the TTR License Agreement (collectively, the service agreements). The primary purpose of the Amended Services Agreement was to allow for the expansion of general and administrative services provided to us by Ionis to cover the TEGSEDI and AKCEA-TTR-L_Rx products under terms substantially similar to the prior services agreement.

Our services agreement with Ionis is designed to be flexible to adjust for our increasing capabilities in various functions. Under the services agreement, Ionis provides us certain services, including, without limitation, general and administrative support services and development support services. Ionis allocated a certain percentage of personnel to perform the services that it provides to us based on its good faith estimate of the required services. We pay Ionis for these allocated costs, which reflect the Ionis full-time equivalent, or FTE, rate for the applicable personnel, plus out-of-pocket expenses, such as occupancy costs, associated with the FTEs allocated to providing us these services. We do not pay a mark-up or profit on the external or internal expenses Ionis bills to us. Ionis invoices us quarterly for all amounts due under the services agreement and payments are due within 30 days of the receipt of an invoice.

In addition, as long as Ionis continues to consolidate our financials, we will comply with Ionis' policies and procedures and internal controls. As long as we are consolidated into Ionis' financial statements under U.S. GAAP, we may continue to access the following services from Ionis:

• investor relations services,

• human resources and personnel services,

• risk management and insurance services,

• tax related services,

• corporate record keeping services,

• financial and accounting services,

• credit services, and

• COO/CFO/CBO oversight.

However, if we wanted to provide the foregoing services internally, and doing so would not negatively impact Ionis' internal controls and procedures for financial reporting, we can negotiate in good faith with Ionis for a reduced scope of services related to the aforementioned services. When Ionis determines it should no longer consolidate our financials, we may mutually agree with Ionis in writing to extend the term of this arrangement in six-month increments.

We can establish our own benefits programs or continue to use Ionis' benefits, however we must provide Ionis a minimum advance notice to opt-out of using Ionis' benefits. We do not currently plan to establish our own benefits programs at this time or in the near future.

Pursuant to our various agreements with Ionis, as of September 30, 2019, Ionis owed us $0.6 million. As of December 31, 2018, we owed Ionis $18.9 million.

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The following table summarizes the amounts recorded related to transactions with Ionis including amounts related to the TTR licensing transaction for the following periods (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Operating expenses:
Services performed by Ionis	$	1,075		$	3,192		$	3,225		$	11,182
Active pharmaceutical ingredient manufactured by    Ionis		5,515			—			5,515			5,229
Pre-commercial inventory manufactured by Ionis		—			—			—			5,996
Sublicensing expenses		—			7,200			78,000			7,200
Out-of-pocket expenses paid by Ionis		954			15,850			3,800			31,074
Less: commercial share of loss in connection with    the TTR license transaction		(8,889	)		—			(29,410	)		—
Less: R&D share of loss in connection with the    TTR license transaction		700			—			1,108			—
Total operating expenses generated by transactions    with Ionis		(645	)		26,242			62,238			60,681
Plus: distribution to Ionis		—			—			13,492			7,792
Total charges generated by transactions with Ionis		(645	)		26,242			75,730			68,473
(Receivable) payable balance (from) to Ionis at the    beginning of the period		(7,911	)		27,137			18,901			14,365
Less: total amounts received from (paid to) Ionis    during the period		7,909			(29,491	)		(20,278	)		(58,017	)
Less: receivable from Ionis		—			—			—			(933	)
Less: non-cash sublicensing expenses		—			—			(75,000	)		—
Total amount (receivable) payable (from) to Ionis    at period end	$	(647	)	$	23,888		$	(647	)	$	23,888

9. Collaboration and License Agreement with PTC Therapeutics

In August 2018, we entered into a collaboration and license agreement with PTC Therapeutics, or the PTC License Agreement, to commercialize TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries, or the PTC Territory.

We received a $12.0 million upfront payment from PTC Therapeutics related to TEGSEDI in the third quarter of 2018 upon execution of the PTC License Agreement, of which we paid Ionis $7.2 million as a sublicense fee related to the TTR License Agreement. We received a $6.0 million payment from PTC Therapeutics in the second quarter of 2019 as a result of WAYLIVRA approval by the EC, of which we paid Ionis $3.0 million as a sublicense fee related to the Cardiometabolic License Agreement and was recorded as cost of license in the condensed consolidated statement of operations. In addition, we are eligible to receive up to $8.0 million for the achievement of regulatory milestones and royalties in the mid-twenty percent range on net sales of TEGSEDI and WAYLIVRA in the PTC Territory. PTC Therapeutics’ obligation to pay royalties to us begins on the earlier of 12 months after the first commercial sale of a product in Brazil or the date that PTC Therapeutics recognized revenue of at least $10.0 million in the PTC Territory. PTC Therapeutics will reduce these royalties upon the expiration of certain patents or if a generic competitor negatively impacts the market share of the product in the PTC Territory. Milestone payments and royalties that we are eligible to receive from PTC Therapeutics for TEGSEDI will be split 60% to Ionis and 40% to Akcea. All WAYLIVRA milestone payments and royalties that we are eligible to receive from PTC will be split 50/50 with Ionis. PTC Therapeutics is solely responsible for the commercialization of the products in the PTC Territory at its sole cost and expense, including the pursuit and maintenance of applicable regulatory approvals. Unless earlier terminated, the PTC License Agreement will continue in effect until the date on which the royalty term and all payment obligations with respect to all products in all countries in the PTC Territory have expired.

At the commencement of the PTC License Agreement, we identified two performance obligations, consisting of the transfer of (1) the license to TEGSEDI and related know-how and (2) the license to WAYLIVRA and related know-how, both of which were satisfied during the third quarter of 2018. In addition, we identified a customer option related to PTC Therapeutics’ option to purchase supply of product from us for its development and commercial needs. We considered the manufacturing capabilities of PTC Therapeutics and the fact that manufacturing services are not proprietary and can be provided by other vendors to conclude that the licenses have stand-alone functionality and are distinct. Further, the customer options for manufacturing of product is priced similar to other manufacturing options with similar customers and is therefore not considered a material right. We determined the transaction price for the PTC License

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Agreement to be $12.0 million comprised of the upfront payment we received. None of the regulatory milestones were included in the transaction price determined in August 2018, as all payments were fully constrained. As there were no remaining unsatisfied performance obligations as of September 30, 2018, the $12.0 million upfront payment was recognized as licensing revenue upon contract execution in the third quarter of 2018. The option to purchase supply from us is subject to the terms of a supply agreement we entered into with PTC Therapeutics in April 2019. In May 2019, we received $6.0 million of consideration from PTC Therapeutics as a result of WAYLIVRA approval by the EC and we paid $3.0 million to Ionis as a sublicense fee. Since the constraint on the regulatory approval was resolved, we updated the transaction price to include this consideration, and accordingly, we recognized the $6.0 million as licensing revenue during the second quarter of 2019. As part of our evaluation of the constraint as ofSeptember 30, 2019, we considered numerous factors, including that regulatory approvals are not within our control and accordingly the remaining milestones are fully constrained and excluded from the arrangement consideration until such regulatory approvals are received. We will continue to re-evaluate the transaction price, including estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur. Any consideration related to sales-based royalties will be recognized when the related sales occur.

10. Stock-Based Compensation

Stock Plans

2015 Equity Incentive Plan

As of September 30, 2019, the aggregate number of shares of common stock that may be issued pursuant to stock awards under the 2015 Equity Incentive Plan, or 2015 Plan, was 18,500,000 shares. The 2015 Plan also provides for the grant of nonstatutory stock options, or NSOs, incentive stock options, or ISOs, stock appreciation rights, restricted stock awards and restricted stock unit awards. At September 30, 2019, a total of 10,135,657 options were outstanding, of which 3,335,196 were exercisable, 616,643 restricted stock unit awards were outstanding, and 3,596,826 shares were available for future grant under the 2015 Plan.

2017 Employee Stock Purchase Plan

On January 1, 2019, 500,000 shares of common stock were added to the 2017 Employee Stock Purchase Plan, or 2017 ESPP. In accordance with the provisions of our 2017 ESPP, the number of shares of our common stock reserved for issuance under the 2017 ESPP automatically increases on January 1^st of each calendar year. Under the ESPP, participating employees can elect to have a portion of their base pay withheld during a consecutive payment period for the purchase of shares of our common stock. At the conclusion of each offering period, participating employees can purchase shares of our common stock at 85% of the lesser of the closing price at the beginning or at the end of the period. As of September 30, 2019, the aggregate number of shares of common stock reserved under the 2017 ESPP was 1,500,000 and we had 1,428,725 shares available for future issuance under the 2017 ESPP. During the three and nine months ended September 30, 2019, 21,984 shares and 39,724 shares, respectively, were issued under our 2017 ESPP. At September 30, 2019, accrued liabilities included $0.2 million of 2017 ESPP contributions for which the related shares we anticipate issuing in the first quarter of 2020.

Stock-based Compensation Expense

We measure stock-based compensation expense for equity-classified awards, principally related to stock options, restricted stock units, or RSUs, and stock purchase rights under our 2017 ESPP, based on the estimated fair value of the award on the date of grant. We recognize the value of the portion of the award that we ultimately expect to vest as stock-based compensation expense over the requisite service period in our condensed consolidated statements of operations. We reduce stock-based compensation expense for estimated forfeitures at the time of grant and revise in subsequent periods if actual forfeitures differ from those estimates.

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We use the Black-Scholes model to estimate the fair value of stock options granted and stock purchase rights under our 2017 ESPP. The expected term of stock options granted represents the period of time that we expect them to be outstanding. As we do not have sufficient historical information, we use the simplified method for estimating the expected term. Under the simplified method we calculate the expected term as the average time-to-vesting and the contractual life of the options. As we gain additional historical information, we will transition to calculating our expected term based on our exercise patterns. For the nine months ended September 30, 2019and 2018, we used the following weighted-average assumptions in our Black-Scholes calculations:

Employee Stock Options:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		2.3	%		2.7	%
Dividend yield		0.0	%		0.0	%
Volatility		75.6	%		77.1	%
Expected life	6.1 years			6.1 years

Board of Directors Stock Options:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		1.8	%		2.9	%
Dividend yield		0.0	%		0.0	%
Volatility		73.8	%		78.2	%
Expected life	6.3 years			6.4 years

2017ESPP:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		2.4	%		1.9	%
Dividend yield		0.0	%		0.0	%
Volatility		60.0	%		64.2	%
Expected life	6 months			6 months

The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2019 and 2018 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2019			2018		2019		2018
Cost of sales - product	$	127		$	—	$	382	$	—
Research and development expenses		2,814			2,313		9,298		6,868
Selling, general and administrative expenses		(6,405	)		10,417		19,779		24,371
Total	$	(3,464	)	$	12,730	$	29,459	$	31,239

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As of September 30, 2019, total unrecognized, estimated non-cash stock-based compensation expense related to non-vested stock options and RSUs was $72.8 million and $14.8 million, respectively. We will adjust total unrecognized compensation cost for future forfeitures. We expect to recognize the cost of non-cash stock-based compensation expense related to non-vested stock options and RSUs over a weighted average amortization period of 1.4 years and 2.5 years, respectively.

On September 18, 2019, Paula Soteropoulos, former Chief Executive Officer, Sarah Boyce, former President, and Jeffrey M. Goldberg, former Chief Operating Officer entered into Separation Agreements that terminated their employment with us and, with respect to Ms. Soteropoulos and Ms. Boyce, their positions on our board of directors, effective September 18, 2019. The unvested equity awards for Ms. Boyce were terminated on the separation date. In addition, on September 18, 2019, we entered into a Consulting Agreement with Ms. Soteropoulos, which was amended on October 30, 2019, and a Consulting Agreement with Mr. Goldberg, pursuant to which they agreed to provide consulting services to us through November 4, 2019 and October 31, 2019, respectively. Under the terms of the 2015 Plan, their equity awards continued to vest through the end of each such consulting periods. We have updated our estimates of forfeitures for equity awards for these departed officers to reflect only those awards expected to vest, resulting in a reversal in the quarter ended September 30, 2019 of $18.8 million of stock-based compensation expense previously recognized.

11. Basic and Diluted Net Loss Per Share

In connection with the TTR License Agreement completed on April 17, 2018 with Ionis, we made distributions to Ionis representing the consideration to be paid in cash provided to Ionis in excess of the carrying value of the related assets acquired. These distributions are treated as dividends to Ionis; therefore, we have applied the two-class method of loss per share to reflect the allocation of these distributions to the participating Ionis common shares.

The two-class method is an earnings allocation formula that determines loss per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. For the purposes of calculating loss per share under the two-class method, we have allocated the net loss between common stock owned by Ionis and common stock owned by others.

Basic loss per share for each class of stock is computed by dividing total distributable losses applicable to common stock owned by Ionis and common stock owned by others by the weighted-average of common shares outstanding during the requisite period.

The following table summarizes the distributable losses for the three and nine months ended September 30, 2019 and 2018 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net loss	$	(31,498	)	$	(63,591	)	$	(41,634	)	$	(155,264	)
Distributions to Ionis		—			—			(13,492	)		(7,792	)
Distributable losses	$	(31,498	)	$	(63,591	)	$	(55,126	)	$	(163,056	)

The following table summarizes the reconciliation of weighted-average shares outstanding used in the calculation of basic loss per share for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Determination of shares:
Weighted-average common shares outstanding    owned by Ionis		70,221,338		65,538,467		69,680,886		57,346,539
Weighted-average common shares outstanding    owned by others		22,821,555		21,671,415		22,509,819		21,446,813
Total weighted-average shares outstanding		93,042,893		87,209,882		92,190,705		78,793,352

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The following table summarizes the calculation of basic loss per share for the three and nine months ended September 30, 2019 and 2018 (in thousands, except pershare and share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Losses allocated to Ionis	$	(23,772	)	$	(47,789	)	$	(41,666	)	$	(118,674	)
Plus: Distribution to Ionis		—			—			13,492			7,792
Losses available to Ionis	$	(23,772	)	$	(47,789	)	$	(28,174	)	$	(110,882	)
Weighted-average common shares outstanding    owned by Ionis		70,221,338			65,538,467			69,680,886			57,346,539
Basic loss per common share owned by Ionis	$	(0.34	)	$	(0.73	)	$	(0.40	)	$	(1.93	)
Losses allocated to common shares owned by    others	$	(7,726	)	$	(15,802	)	$	(13,460	)	$	(44,382	)
Weighted-average common shares outstanding    owned by others		22,821,555			21,671,415			22,509,819			21,446,813
Basic loss per common share owned by others	$	(0.34	)	$	(0.73	)	$	(0.60	)	$	(2.07	)

For the three and nine months ended September 30, 2019 and September 30, 2018, we incurred a net loss; therefore, we did not include dilutive common equivalent shares in the computation of diluted net loss per share because the effect would have been anti-dilutive. Common stock from the following would have had an anti-dilutive effect on net loss per share:

• Options to purchase common stock;

• Unvested restricted stock units; and

• Employee Stock Purchase Plan.

12. Contractual Obligations and Commitments

Operating Lease

Corporate Headquarters Lease

On April 5, 2018, we entered into an operating lease agreement for 30,175 square feet of office space located in Boston, Massachusetts for our corporate headquarters. The lease commencement date was August 15, 2018 and we took occupancy in September 2018. We are leasing this space under a non-cancelable operating lease with an initial term ending after 123 months and an option to extend the lease for an additional five-year term. We did not include the extension option in our right-of-use asset and lease liability calculation as we do not consider it reasonably certain that we would exercise the option. Under the lease agreement, we received a three-month free rent period, which commenced on August 15, 2018, and a tenant improvement allowance up to $3.8 million. We provided the lessor with a letter of credit to secure our obligations under the lease in the initial amount of $2.4 million, to be reduced to $1.8 million on the third anniversary of the rent commencement date and to $1.2 million on the fifth anniversary of the rent commencement date if we meet certain conditions set forth in the lease at each such time. The letter of credit amount is included in deposits and other assets on the accompanying condensed consolidated balance sheets.

Ionis Sublease

On November 12, 2018, we entered into an operating lease agreement with Ionis to sublease 4,723 square feet of office space located in Carlsbad, California. The lease commenced in March 2018 and the term of the lease is 64 months with a four-month free rent period. There is no extension option for this lease.

Cambridge Lease

We leased office space in a building in Cambridge, Massachusetts under an operating lease that commenced in April 2015 and was subsequently amended and expanded in February 2016 and March 2017. The lease was scheduled to expire in April 2020. We have subsequently terminated the lease effective April 2019.

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Ireland Lease

On May 8, 2019, we entered into an operating lease agreement for office space located in Dublin, Ireland. The lease commenced in May 2019 and the initial term of the lease is 18 months with an extension option for an additional 12 months. We have included the 12-month extension period in our right-of-use asset and lease liability calculation as we consider it reasonably certain that we will exercise the option to extend the lease for an additional 12 months.  

Other Operating Lease Information

Other information related to our operating leases is as follows (dollar amounts in thousands):

	At September 30, 2019
Operating lease right-of-use assets	$	11,300
Operating lease liabilities (1)	$	15,850
Weighted average remaining lease term	9.0 years
Weighted average discount rate		8	%

(1) Current portion of $1.3 million included in other current liabilities and the difference of $14.6 million included in long-term portion of lease liabilities on our condensed consolidated balance sheet.

Annual maturities of our operating lease liabilities as of September 30, 2019 are as follows (in thousands):

Years ended December 31,	Operating Leases
Remainder of 2019	$	621
2020		2,497
2021		2,502
2022		2,403
2023		2,400
Thereafter		11,961
Total minimum lease payments	$	22,384
Less:
Imputed interest		(6,534	)
Total operating lease liability	$	15,850

Operating lease expense was $0.5 million and $1.6 million for the three and nine months ended September 30, 2019, respectively.  In comparison, operating lease expense was $0.8 million and $1.7 million for the same periods in 2018. Cash paid for amounts included in the measurement of lease liabilities for the nine months ended September 30, 2019 was $1.9 million and was included in net cash used in operating activities in our condensed consolidated statement of cash flows.

Purchase Commitments

Purchase commitments include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions, and the approximate timing of the transaction. Such obligations are related principally to inventory purchase orders based on our current manufacturing needs and require significant lead times to be fulfilled by our vendors. Purchase commitments exclude agreements that are cancelable without penalty. As of  September 30, 2019 our purchase commitments for the following 12 months were $7.1 million.

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Director and OfficerAgreements

In connection with the conclusion of their employment with the Company, Ms. Paula Soteropoulos, our former CEO, Mr. Jeffrey M. Goldberg, our former COO, and Ms. Sarah Boyce, our former President, have entered into Separation Agreements with the Company under which they are entitled to certain severance benefits. As of September 30, 2019, the aggregate severance obligation for these individuals for the following 12 months was $1.8 million and was included in accrued compensation in our condensed consolidated balance sheet. In connection with the conclusion of their employment, we have also entered into Consulting Agreements with Ms. Soteropoulos and Mr. Goldberg pursuant to which they will assist in the transition of their duties and responsibilities. Ms. Soteropoulos and Mr. Goldberg are entitled to receive cash compensation and the continued vesting of any equity awards outstanding as of their dates of separation in consideration for their consulting services.

On September 19, 2019, in connection with his appointment as our interim Chief Executive Officer, Damien McDevitt, Ph.D. entered into (i) a written offer letter with us pursuant to which Dr. McDevitt is entitled to receive certain equity and cash compensation, and (ii) a Severance Benefit Agreement with us pursuant to which Dr. McDevitt is entitled to receive certain severance benefits.

On October 15, 2019, in connection with his appointment as our Chief Commercial Officer, Kyle Jenne entered into a written offer letter with us pursuant to which Mr. Jenne is entitled to receive certain equity and cash compensation. Further, on October 21, 2019, the effective date of Mr. Jenne’s appointment, Mr. Jenne entered into a Severance Benefit Agreement with us pursuant to which he is entitled to receive certain severance benefits.

13. Subsequent Events

On October 4, 2019, we entered into a license agreement, or the Pfizer License Agreement, with Pfizer Inc., or Pfizer, for the development and commercialization of AKCEA-ANGPTL3-L_Rx. In addition to customary closing conditions, consummation of the transaction contemplated by the Pfizer License Agreement is currently subject to obtaining clearance required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

Under the terms of the Pfizer License Agreement, we granted Pfizer an exclusive license, with the right to grant certain sublicenses, to develop, manufacture, commercialize and otherwise exploit AKCEA-ANGPTL3-L_Rx worldwide. We have the right, at our option, to participate in commercialization activities with Pfizer in the U.S. and certain additional markets. At closing, as payment for the grant of rights to Pfizer under the Pfizer License Agreement, Pfizer will pay us a $250 million upfront license fee, which will be split equally with Ionis in accordance with the Cardiometabolic License Agreement with Ionis dated December 18, 2015. We will settle its $125 million obligation to Ionis through the issuance of shares of our common stock. In addition, we are eligible to receive up to $1.3 billion in milestone payments, including up to $205.0 million for the achievement of  development milestones, up to $250.0 million for the achievement of regulatory milestones and up to $850.0 million for the achievement of commercialization milestones. We are also eligible to receive tiered, double digit royalties in the mid-teens to low twenty percent range on net sales of AKCEA-ANGPTL3-L_Rx, and Pfizer will reduce these royalties upon the expiration of certain patents or if a generic competitor negatively impacts the product in a specific country. The royalty payments are subject to certain other reductions in certain circumstances as set forth in the Agreement. We will pay 50% of license fees, milestone payments and royalties under this agreement to Ionis as a sublicense fee.

The Pfizer License Agreement continues until the expiration of the last-to-expire royalty term with respect to all AKCEA-ANGPTL3-L_Rx products worldwide. Prior to the first commercial sale of AKCEA-ANGPTL3-L_Rx in the U.S., either party may terminate the Pfizer License Agreement on written notice to the other party if the other party is in material breach of its obligations thereunder and has not cured such breach within 30 days after notice in the case of a payment breach or 90 days after notice in the case of any other breach. In addition, at any time following payment by Pfizer of the upfront license fee, Pfizer may terminate the Pfizer License Agreement for convenience by providing 90 days written notice to us.

In October 2019, PTC Therapeutics received approval for TEGSEDI in Brazil. As a result of the approval, we will receive a $4.0 million payment from PTC Therapeutics, of which we will pay Ionis $2.4 million as a sublicense fee related to the Cardiometabolic License Agreement.

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ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In this Report on Form 10-Q, unless the context requires otherwise, “Akcea,” “Company,” “we,” “our,” and “us,” means Akcea Therapeutics, Inc. and our subsidiaries.

Forward-Looking Statements

In addition to historical information contained in this Report on Form 10-Q, this Report includes forward-looking statements regarding our financial position, outlook, business, and the therapeutic and commercial launch of TEGSEDI^®, WAYLIVRA^®and our other products in development. Any statement describing our goals, expectations, financial or other projections, intentions or beliefs, is a forward-looking statement and should be considered an at-risk statement. Words such as “may,” “could,” “should,” “would,” “believe,” “expect,” “expectation,” “anticipate,” “estimate,” “intend,” “seeks,” “plan,” “project,” “continue,” “predict,” “will,” “should,” and other words or expressions of similar meaning are intended by us to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Such statements are subject to certain risks and uncertainties, particularly risks related to our financial condition and need for additional capital, the clinical development and regulatory review and approval of our drugs, the commercialization of our drugs, our dependence on third parties to develop and commercialize our drugs, our relationship with Ionis Pharmaceuticals, Inc., our controlling stockholder, and risks related to our business and industry generally, such as risks inherent in the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics. Our forward-looking statements also involve assumptions that, if they never materialize or prove correct, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Although our forward-looking statements reflect the good faith judgment of our management, these statements are based only on facts and factors currently known by us. As a result, you are cautioned not to rely on these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified in this Quarterly Report on Form 10-Q and those discussed in the section titled “Risk Factors” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and in our other Securities and Exchange Commission, or SEC, filings. You should not rely upon forward-looking statements as predictions of future events. Furthermore, such forward-looking statements, like all statements in the Report, speak only as of the date of this Report (unless another date is indicated). Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

The following discussion and analysis should be read in conjunction with (1) our financial statements and accompanying notes included in this Quarterly Report on Form 10-Q, and (2) the audited financial statements and accompanying notes thereto and the related Management's Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2018, which are contained in our Annual Report on the Form 10-K for the fiscal year ended on December 31, 2018 filed on March 1, 2019 with the SEC. Our consolidated financial information may not be indicative of our future performance.

Overview

We are a commercial stage biopharmaceutical company developing and marketing drugs globally to treat patients with rare and serious diseases. We are bringing novel and transformative medicines to patients by driving clinical program execution, understanding patient and physician needs, preparing the market, creating market access, and commercializing our products on a global basis.

As a majority-owned affiliate of Ionis Pharmaceuticals, Inc., or Ionis, we have a robust portfolio of development-, registration- and commercial-stage drugs covering multiple targets and diseases using Ionis’ antisense technology. Our immediate focus is on the commercial launch of our commercially approved therapies, TEGSEDI in the United States, or U.S., the European Union, or E.U., and Canada, and WAYLIVRA in the E.U. TEGSEDI treats the polyneuropathy caused by hereditary transthyretin-mediated amyloidosis, or hATTR amyloidosis, in adults. WAYLIVRA is indicated as an adjunct to diet in adult patients with genetically confirmed familial chylomicronemia syndrome, or FCS, and at high risk for pancreatitis, in whom response to diet and triglyceride lowering therapy has been inadequate.

WAYLIVRA was granted conditional marketing authorization in the E.U. from the European Commission, or EC, on May 3, 2019 and was launched in Germany in August 2019. Our preparation activities are underway throughout the rest of the E.U. as we prepare to launch in additional countries in 2020. We are leveraging our existing commercial infrastructure in Europe to market WAYLIVRA. FCS is an ultra-rare, devastating hereditary disease that causes unpredictable and potentially fatal acute pancreatitis, chronic complications due to permanent organ damage, and a severe impact on daily living. The hallmark of FCS is extremely elevated triglycerides. There are approximately 3,000 to 5,000 patients with FCS worldwide. We are also advancing a mature pipeline of novel drugs with the potential to treat multiple diseases. TEGSEDI, WAYLIVRA and our pipeline drugs, AKCEA-APO(a)-L_Rx, AKCEA-ANGPTL3-L_Rx, AKCEA-APOCIII-L_Rx and AKCEA-TTR-L_Rx, are all based on Ionis’ antisense technology platform.

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We are continuing to build our current commercial infrastructure to support TEGSEDI and, in the E.U., WAYLIVRA, and plan to use this infrastructure to support the other drugs in our pipeline, if approved, as we anticipate further commercialization in serious and rare diseases. A key element of our commercial strategy is to provide the specialized, patient-centric support required to successfully address rare disease patient populations. We believe our focus on treating patients with inadequately addressed rare and serious diseases will allow us to partner efficiently and effectively with the specialized medical community that supports these underserved patient communities.To further support the hATTR amyloidosis community, Akcea and Ambry Genetics Corporation, or Ambry, a Konica Minolta company, launched hATTR Compass™ in the U.S. and Canada, a no-cost, confidential genetic testing and genetic counseling program for people with suspected hATTR amyloidosis. This program is intended to empower people with accurate genetic information, so they can make informed decisions about their healthcare.

Our efforts to treat people with serious and under-served rare diseases are focused on transthyretin amyloidosis, or ATTR amyloidosis, and cardiometabolic diseases.

TTR Amyloidosis

TEGSEDI is an antisense drug designed to reduce the production of the TTR protein. In patients with hATTR amyloidosis, a severe, rare and fatal genetic disease, both the hereditary and wild-type, or wt, TTR protein builds up as fibrils in tissues, such as the peripheral nerves, heart, gastrointestinal system, eyes, kidneys, central nervous system, thyroid and bone marrow. The presence of TTR fibrils interferes with the normal functions of these tissues. The progressive accumulation of TTR amyloid deposits in these tissues and organs leads to sensory, motor and autonomic dysfunction often having debilitating effects on multiple aspects of a patient’s life and eventually leads to death.

We estimate that there are approximately 50,000 patients globally with hATTR amyloidosis, the majority of whom have symptoms of polyneuropathy.

TEGSEDI was discovered and developed by Ionis and was licensed by us in April 2018. In addition to TEGSEDI, we and Ionis are developing AKCEA-TTR-L_Rx for hereditary and wild-type forms of transthyretin amyloidosis, or ATTR amyloidosis. We and Ionis initiated clinical development of AKCEA-TTR-L_Rx in December 2018 and presented positive Phase 1 data results in September 2019. Data showed a >90% knockdown of TTR following administration in healthy volunteers, and a positive safety and tolerability profile for Ligand Conjugated Antisense, or LICA, platform-based therapy. We plan to initiate a Phase 3 program by the end of this year.

Cardiometabolic

Our lipid/cardiometabolic drugs, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-ANGPTL3-L_Rx and AKCEA-APOCIII-L_Rx, are all based on antisense technology developed by Ionis. WAYLIVRA was granted conditional marketing authorization in the E.U. on May 3, 2019 and launched in Germany in August 2019. Our launch preparation activities with respect to WAYLIVRA are ongoing throughout the E.U. The approval of WAYLIVRA in the E.U. follows a positive recommendation by the Committee for Medicinal Products for Human Use, or CHMP, of the European Medicines Agency, or EMA, as an adjunct to diet in adult patients with genetically confirmed FCS, who are at high risk for pancreatitis, in whom response to diet and triglyceride lowering therapy has been inadequate. We are leveraging our existing commercial infrastructure in Europe to market WAYLIVRA. In addition, we are focused on regulatory discussions for WAYLIVRA in the U.S. and Canada. On May 10, 2018, the United States Food and Drug Administration’s, or FDA’s, Endocrinologic and Metabolic Drugs Advisory Committee voted to support approval of WAYLIVRA for the treatment of people with FCS. On August 27, 2018, we and Ionis announced that we received a Complete Response Letter from the Division of Metabolism and Endocrinology Products of the FDA regarding the New Drug Application for WAYLIVRA. The FDA did not cite any new concerns beyond those described in the Advisory Committee briefing book, in which the main areas of focus were the dosing schedule and management of thrombocytopenia. We continue to feel strongly that WAYLIVRA demonstrates a favorable benefit/risk profile in people with FCS, as was reflected in the positive outcome from the Advisory Committee meeting. In November 2018, we received a Notice of Noncompliance withdrawal letter, or NON-W, from Heath Canada for WAYLIVRA.

FCS is a severe and rare lipid disorder characterized by extremely elevated levels of triglycerides. FCS has life-threatening consequences such as acute pancreatitis and the lives of patients with this disease are impacted daily by the associated symptoms. In our clinical program, we have observed consistent and substantial (>70%) decreases in triglycerides and improvements in other manifestations of FCS, including pancreatitis attacks and abdominal pain. The final study results from the Phase 3 APPROACH study were published in the August 8^th 2019 issue of The New England Journal of Medicine (NEJM). We believe the safety and efficacy data from the WAYLIVRA program demonstrate a favorable risk-benefit profile for patients with FCS. In August 2019, we announced topline results from the BROADEN study in patients with familial partial lipodystrophy, or FPL. BROADEN is a randomized, double blind, placebo-controlled study of 300mg of WAYLIVRA administered by a subcutaneous injection in patients with FPL. In the study, WAYLIVRA met its primary endpoint demonstrating a statistically significant reduction in triglyceride levels. WAYLIVRA also met a key secondary endpoint with a statistically significant reduction in liver fat. The most common adverse events observed in WAYLIVRA-treated patients were mild or moderate in severity and included injection site reactions, nasopharyngitis, urinary tract infection, and reductions in platelet levels. We are continuing to evaluate the data from this study and are assessing next steps.

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AKCEA-APO(a)-L_Rx completed Phase 2 in 2018 and Novartis is currently working to initiate the Phase 3 program.Our other two lipid/cardiometabolic drugs are currently in Phase 2 clinical development.

Commercial Infrastructure

We are continuing to build our global infrastructure as we commercialize TEGSEDI in the U.S., E.U. and Canada and WAYLIVRA in the E.U. We have commercial teams in place in those regions. In addition, in August 2018, we entered into a licensing agreement with PTC Therapeutics International Limited, or PTC Therapeutics, to commercialize TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries. A key element of our commercial strategy is to provide the specialized, patient-centric support required to successfully address rare disease patient populations. We believe our focus on treating patients with inadequately addressed rare and serious diseases will allow us to partner efficiently and effectively with the specialized medical community that supports these underserved patient communities.

To maximize the commercial potential of two of the drugs in our pipeline, we initiated a strategic collaboration with Novartis Pharma AG, or Novartis, for the development and commercialization of AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx. In February 2019, Novartis exercised its option to license AKCEA-APO(a)-L_Rx. Novartis is currently preparing to initiate a Phase 3 study of AKCEA-APO(a)-L_Rx in patients with established cardiovascular disease, or CVD, and elevated levels of lipoprotein(a), or Lp(a). We believe Novartis brings significant resources and expertise to the collaboration that can accelerate our ability to deliver these potential therapies to the large populations of patients who have high cardiovascular risk due to inadequately treated lipid disorders. As part of our collaboration, we received $75.0 million in an upfront option payment, of which we retained $60.0 million and paid $15.0 million to Ionis as a sublicense fee. We also earned a $150.0 million license fee when Novartis exercised its option to license AKCEA-APO(a)-L_Rx in February 2019. As a result of the option exercise, on March 29, 2019 we issued 2,837,373 shares of our common stock to Ionis as payment of a $75.0 million sublicense fee. Novartis is now responsible for all future development and commercialization activities for AKCEA-APO(a)-L_Rx. We are eligible to receive milestone payments and royalties on sales of AKCEA-APO(a)-L_Rx from Novartis if and when it meets the development, regulatory and sales milestones specified in our agreement. In connection with Novartis’ exercise of its option to exclusively license AKCEA-APO(a)-L_Rx, we and Novartis established a more definitive framework under which we will negotiate the co-commercialization of AKCEA-APO(a)-L_Rx between the two companies in selected markets. Included in this framework is an option by which Novartis could solely commercialize AKCEA-APO(a)-L_Rx in exchange for Novartis paying us increased commercial milestone payments based on sales of AKCEA-APO(a)-L_Rx. We will share any license fees, milestone payments and royalties equally with Ionis.

For AKCEA-APOCIII-L_Rx, under our agreement with Novartis, after we complete Phase 2 development and if Novartis exercises its option to license AKCEA-APOCIII-L_Rx, we would receive an additional $150.0 million license fee which we would also share equally with Ionis. If exercised, Novartis would conduct and pay for a Phase 3 cardiovascular outcome study in patients with hypertriglyceridemia and prior cardiovascular risk. If approved, Novartis would commercialize AKCEA-APOCIII-L_Rx worldwide. Novartis will have 60 days plus additional time that could be required for Hart-Scott-Rodino, or HSR, filing and review following the end-of-Phase 2 meeting to exercise its option for AKCEA-APOCIII-L_Rx. As part of the collaboration, we may co-commercialize AKCEA-APOCIII-L_Rx in selected markets, on mutually agreed terms and conditions. Similar to AKCEA-APO(a)-L_Rx, we are eligible to receive license fees, milestone payments and royalties on sales of AKCEA-APOCIII-L_Rx from Novartis if and when it meets the development, regulatory and sales milestones specified in our agreement. We will share any license fees, milestone payments and royalties equally with Ionis.

Our strategic collaboration with Novartis has a potential aggregate transaction value of over $1.0 billion, plus royalties, which we would generally be required to share equally with Ionis. The calculation of potential aggregate transaction value assumes that Novartis licenses, successfully develops and achieves regulatory approval for both AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx in the U.S., E.U. and Japan, and that Novartis achieves pre-specified sales targets with respect to both drugs. In addition to the $150.0 million license fee that we have received for AKCEA-APO(a)-L_Rx, we are eligible to receive up to $675.0 million in milestone payments, including $25.0 million for the achievement of a development milestone, up to $290.0 million for the achievement of regulatory milestones and up to $360.0 million for the achievement of commercialization milestones. In addition, if Novartis exercises its option for AKCEA-APOCIII-L_Rx, we are eligible to receive a $150.0 million license fee as well as up to $530.0 million in milestone payments, including $25.0 million for the achievement of a development milestone, up to $240.0 million for the achievement of regulatory milestones and up to $265.0 million for the achievement of commercialization milestones. We are also eligible to receive tiered royalties in the mid-teens to low twenty percent range on net sales of AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx, and Novartis will reduce these royalties upon the expiration of certain patents or if a generic competitor negatively impacts the product in a specific country. We will pay 50% of these license fees, milestone payments and royalties to Ionis as a sublicense fee. See Note 7, Strategic Collaboration with Novartis, to our condensed consolidated financial statements for additional information.

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We began recognizing revenue under the collaboration with Novartis upon its initiation in 2017. Our research and development and license revenue for the first nine months of 2019 was $176.3 million. In addition, we began to recognize TEGSEDI product revenue in late 2018 and we recognized licensing revenue in the third quarter of 2018 and the second quarter of 2019 relating to our collaboration and license agreement with PTC Therapeutics. Our product revenue and licensing revenue for the first nine months of 2019 was $28.6 million and $6.2 million, respectively. Our total revenue for the first ninemonths of2019was $211.1million. Our net loss for the firstnine months of 2019was $41.6 million. Such net loss has resulted from costs incurred in developing TEGSEDI, WAYLIVRA and the other drugs in our pipeline, commercializing TEGSEDI and WAYLIVRA, and general and administrative activities associated with our operations offset in part by our revenues. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future. The transition to profitability is dependent upon the successful development, approval, and commercialization of our products and product candidates and the achievement of a level of revenue adequate to support our cost structure. We incur meaningful expenses to support commercialization, including manufacturing, marketing, sales and distribution functions.

Our license agreement with Pfizer Inc. or Pfizer, the closing of which we expect to occur in the fourth quarter of 2019, has a potential aggregate transaction value of up to $1.6 billion, plus royalties, which we would generally be required to share equally with Ionis. The calculation of potential aggregate transaction value assumes that Pfizer successfully develops and achieves regulatory approval for AKCEA-ANGPTL3-L_Rx in multiple indications in the U.S., E.U. and Japan, and that Pfizer achieves pre-specified sales targets with respect to AKCEA-ANGPTL3-L_Rx. In addition to the $250.0 million upfront license fee that we will receive upon closing of the license agreement, we are eligible to receive up to $1.3 billion in milestone payments, including up to $205.0 million for the achievement of a development milestones, up to $250.0 million for the achievement of regulatory milestones and up to $850.0 million for the achievement of commercialization milestones. We are also eligible to receive tiered, double-digit royalties in the mid-teens to low twenty percent range on net sales of AKCEA-ANGPTL3-L_Rx, and Pfizer will reduce these royalties upon the expiration of certain patents or if a generic competitor negatively impacts the product in a specific country. We will pay 50% of these milestone payments and royalties to Ionis as a sublicense fee. See Note 13, Subsequent Events, to our condensed consolidated financial statements for additional information.

As of September 30, 2019, we had cash, cash equivalents and investments of $252.7 million. We plan to use our cash, cash equivalents and investments on hand as of September 30, 2019 to further our commercialization efforts of TEGSEDI and WAYLIVRA and continue the advancement of our pipeline drugs.

Our Relationship with Ionis

Ionis formed Akcea as a wholly owned subsidiary to complete development of and commercialize Ionis’ drugs to treat lipid disorders. We began business operations in January 2015. We licensed our cardiometabolic franchise from Ionis at the beginning of 2015. Prior to licensing these drugs, Ionis’ employees performed all of the development, regulatory and manufacturing activities for these drugs either themselves or through third-party providers. As such, Ionis incurred all of the expenses associated with these activities and reported them in its condensed consolidated financial statements. TEGSEDI and AKCEA-TTR-L_Rx were licensed from Ionis in April 2018. Prior to then, Ionis had been advancing these drugs in development and incurring the expenses for those activities. Under our license agreements with Ionis, Ionis continued and is continuing to conduct development, regulatory or manufacturing activities for our drugs and to charge us for this work. As of September 30, 2019, Ionis owned approximately 75 percent of our outstanding stock.

Recent Events

Paula Soteropoulos, former Chief Executive Officer, Sarah Boyce, former President, and Jeffrey M. Goldberg, former Chief Operating Officer, each entered into a Separation Agreement that terminated their employment with us and, with respect to Ms. Soteropoulos and Ms. Boyce, their positions on our board of directors, effective September 18, 2019.

In addition, on September 18, 2019, we entered into Consulting Agreements with Ms. Soteropoulos and Mr. Goldberg. Pursuant to Ms. Soteropoulos’s Consulting Agreement, which was amended on October 30, 2019, she agreed to provide up to 20 hours per week of consulting services following her separation date through November 4, 2019 to assist with the transition of her duties and responsibilities, and in consideration of such consulting services, we have agreed to pay Ms. Soteropoulos a consulting retainer in the amount of $125,000, paid in installments during such consulting period, and continue the vesting of any equity awards outstanding as of her separation date through the end of such consulting period. All equity awards vested at the end of such consulting period will be exercisable through the 90th day after the end of such consulting period. Pursuant to our Consulting Agreement with Mr. Goldberg, he agreed to provide up to 20 hours per week of consulting services following his separation date through October 31, 2019 to assist with the transition of his duties and responsibilities, and in consideration of such consulting services, we have agreed to pay Mr. Goldberg a consulting retainer in the amount of $100,000, paid in installments during such consulting period, and continue the vesting of any equity awards outstanding as of his separation date through the end of such consulting period. All equity awards vested at the end of such consulting period will be exercisable through the 90th day after the end of such consulting period.

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On September 19, 2019, Damien McDevitt, Ph.D., a member of our board of directors, was appointed as interim Chief Executive Officer, effective immediately. In addition, Michael J. Yang and Joseph ‘Skip’ Klein III joined our board of directors, effective September 20, 2019.

On October 21, 2019, Kyle Jenne was promoted to Chief Commercial Officer, from Senior Vice President of US Commercial, effective immediately.

In addition, on October 4, 2019, we entered into a license agreement with Pfizer for the development and commercialization of AKCEA-ANGPTL3-L_Rx. Upon closing of the license agreement, which we expect to occur in the fourth quarter of 2019, Pfizer will pay us a $250.0 million upfront license fee which will be split equally with Ionis. We plan to satisfy our obligation by paying Ionis the $125.0 million sublicense fee through the issuance of 6,873,344 shares of our common stock.

Critical Accounting Policies

The accounting policies we followed in the preparation of our interim condensed consolidated financial statements appearing at the beginning of this Quarterly Report on Form 10-Q are consistent in all material respects with those included in Note 2 of our Annual Report on the Form 10-K for the fiscal year ended on December 31, 2018 and Note 2 in our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Results of Operations

In order to analyze and compare our results of operations to other similar companies, we believe it is important to exclude non-cash stock-based compensation expense related to equity awards from our expenses. We believe non-cash stock-based compensation expense is not indicative of our operating results or cash flows from our operations. Further, we internally evaluate the performance of our operations excluding stock-based compensation. All numbers presented below exclude stock-based compensation expense unless otherwise indicated.

Comparison of the three months ended September 30, 2019 and 2018

Revenue

The following table sets forth our revenue for the periods presented (in thousands):

	Three Months Ended September 30,
	2019		2018
Product revenue	$	11,944	$	—
Licensing revenue		136		12,000
Research and development and license revenue under    collaborative agreement		8,544		7,241
Total revenue	$	20,624	$	19,241

Product revenue. Product revenue of $11.9 million for the three months ended September 30, 2019 relates to sales of TEGSEDI globally and WAYLIVRA in the E.U. For the three months ended September 30, 2018, we did not generate any product revenue.

Licensing revenue. For the three months ended September 30, 2019, we recognized $0.1 million of licensing revenue from PTC Therapeutics. This revenue was recognized in connection with selling product to PTC Therapeutics related to the PTC supply agreement we entered into in April 2019. For the three months ended September 30, 2018, we recognized $12.0 million of licensing revenue related to the upfront payment received from PTC Therapeutics in connection with our PTC License Agreement entered into in August 2018.

Research and development revenue. For the three months ended September 30, 2019, we recognized $8.5 million, compared to $7.2 million for the three months ended September 30, 2018, in research and development and license revenue from our collaboration with Novartis. The increase was primarily attributable to $5.5 million of AKCEA-APO(a)-L_Rx material that was sold to Novartis under the terms of the Strategic Collaboration, Option and License Agreement during the third quarter of 2019. No such sale occurred in 2018. The increase was partially offset by the level of efforts related to activities for our AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx programs. We plan to recognize substantially all of the upfront payment revenue related to our license agreement with Pfizer when the transaction closes, which we anticipate will occur in the fourth quarter of 2019.

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Cost of sales and license expense

The following table sets forth our cost of sales and license expense for the periods presented (in thousands):

	Three Months Ended September 30,
	2019		2018
Cost of sales - product	$	840	$	1,043
Cost of sales - intangible asset amortization		1,434		701
Cost of license		—		7,200
Total cost of sales, excluding non-cash    stock-based compensation expense		2,274		8,944
Non-cash stock-based compensation expense		127		—
Total cost of sales	$	2,401	$	8,944

Cost of sales - product. Product expense of $0.8 million for the three months ended September 30, 2019, compared to $1.0 million for the three months ended September 30, 2018, consists of period costs and certain fixed costs associated with the manufacturing of TEGSEDI. We do not expect fixed costs will increase in direct correlation to sales. Based on our policy, we expense costs associated with the manufacture of our products as research and development expense prior to regulatory approval. Certain product costs of TEGSEDI recognized as revenue during the three months ended September 30, 2019 were incurred prior to the July 2018 E.U. approval, and therefore are not included in cost of sales during this period. We expect cost of sales to increase as we deplete inventories that were previously expensed prior to approval but are utilized for commercial sales. The cost of units sold during the period for which there was no cost basis was $0.2 million for the three months ended September 30, 2019, and zero for the three months ended September 30, 2018. All amounts exclude non-cash compensation expense related to equity awards.

Cost of sales - intangible asset amortization. For the three months ended September 30, 2019 and 2018, intangible asset amortization of $1.4 million and $0.7 million, respectively, consists of amortization of intangible assets recorded as a result of the achievement of TEGSEDI regulatory milestones in the U.S. and E.U.

Cost of license. We did not incur cost of license expense for the three months ended September 30, 2019. We incurred $7.2 million in cost of license expense related to a sub-license fee due to Ionis for the three months ended September 30, 2018. This sub-license fee was as a result of license revenue earned as part of the licensing agreement with PTC Therapeutics.

Research and development expense

The following table sets forth our research and development expenses for the periods presented (in thousands):

	Three Months Ended September 30,
	2019		2018
External TEGSEDI expenses	$	1,829	$	6,384
External WAYLIVRA expenses		2,657		4,433
Loss share under TTR license agreement with Ionis    Pharmaceuticals		700		—
Other external research and development projects expenses		8,582		8,492
Research and development personnel and overhead expenses		8,215		7,759
Total research and development expenses, excluding non-cash    stock-based compensation expense		21,983		27,068
Non-cash stock-based compensation expense		2,814		2,313
Total research and development expenses	$	24,797	$	29,381

Research and development expenses were $22.0 million for the three months ended September 30, 2019 compared to $27.1 million for the same period in 2018. The decrease in research and development expenses was primarily due to a decrease in development activities related to TEGSEDI and WAYLIVRA.  This decrease was partially offset by an increase in development activities for AKCEA-TTR-L_Rx, AKCEA-ANGPTL3-L_Rx, and personnel and overhead expenses in support of our ongoing development efforts. All amounts exclude non-cash compensation expense related to equity awards.

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Selling, general and administrative expense

The following table sets forth our selling, general and administrative expenses for the periods presented (in thousands):

	Three Months Ended September 30,
	2019			2018
Selling, general and administrative expenses	$	41,310		$	35,507
Non-cash stock-based compensation (benefit)/expense		(6,405	)		10,417
Total selling, general and administrative expenses	$	34,905		$	45,924

Selling, general and administrative expenses were $41.3 million for the three months ended September 30, 2019 compared to $35.5 million for the three months ended September 30, 2018. Our selling, general and administrative expenses increased due to the ongoing buildout of our commercial organization and advancement of commercialization activities necessary to support the launches of TEGSEDI in the U.S., the E.U. and Canada, and costs of WAYLIVRA in the E.U, as well as due to severance related to separation agreements entered into with former executives. All amounts exclude non-cash compensation (benefit)/expense related to equity awards.

On September 18, 2019, Ms. Soteropoulos, Ms. Boyce, and Mr. Goldberg entered into Separation Agreements that terminated their employment with us and, with respect to Ms. Soteropoulos and Ms. Boyce, their positions on our board of directors, effective September 18, 2019. The unvested equity awards for Ms. Boyce were terminated on the separation date. In addition, on September 18, 2019, we entered into a Consulting Agreement with Ms. Soteropoulos, which was amended on October 30, 2019, and a Consulting Agreement with Mr. Goldberg, pursuant to which they agreed to provide consulting services to us through November 4, 2019 and October 31, 2019, respectively. Under the terms of the 2015 Plan, their equity awards continued to vest through the end of such consulting periods. We have updated our estimates of forfeitures for equity awards for these departed officers to reflect only those awards expected to vest, resulting in a reversal in the quarter ended September 30, 2019 of $18.8 million of stock-based compensation expense previously recognized. This reversal more than offset our stock-based compensation expense for the three months ended September 30, 2019.

Net Loss Share

In the first quarter of 2019, the profit sharing provisions for TEGSEDI under the TTR License Agreement with Ionis became effective. As we are the principal for all commercial activities related to the TTR License Agreement, we record all commercial activities related to TEGSEDI on a gross basis in our condensed consolidated statement of operations, including revenues, cost of sales and sales and marketing expenses. The Ionis share of commercialization costs for TEGSEDI is separately presented within operating expenses in our condensed consolidated statement of operations under the caption “Net loss share from commercial activities under arrangement with Ionis Pharmaceuticals, Inc.”. For the three months ended September 30, 2019, we recorded $8.9 million of cost share related to TEGSEDI commercial activities. We did not record any amounts of cost share for the three months ended September 30, 2018.

Other income and other expense

Investment income. Investment income for the three months ended September 30, 2019 totaled $1.5 million compared to $1.7 million for the same period in 2018. The decrease in investment income was primarily due to a decrease in the average investment balance during 2019 compared to 2018.

Net Loss and Net Loss Per Share

Net loss for the three months ended September 30, 2019 was $31.5 million compared to a net loss of $63.6 million for the same period in 2018. The decrease in net loss was primarily due to commercial product revenue and licensing revenue, cost share with Ionis that began in 2019 and a decrease in development activities. Basic and diluted net loss per common share owned by Ionis and owned by others for the three months ended September 30, 2019 were both $0.34. Basic and diluted net loss per common share owned by Ionis and owned by others for the three months ended September 30, 2018 were both $0.73.

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Comparison of the nine months ended September 30, 2019 and 2018

Revenue

The following table sets forth our revenue for the periods presented (in thousands):

	Nine Months Ended September 30,
	2019		2018
Product revenue	$	28,563	$	—
Licensing revenue		6,172		12,000
Research and development and license revenue under    collaborative agreement		176,329		42,670
Total revenue	$	211,064	$	54,670

Product revenue. Product revenue of $28.6 million for the nine months ended September 30, 2019 relates to sales of TEGSEDI globally and sales of WAYLIVRA in the E.U. For the nine months ended September 30, 2018, we did not generate any product revenue.

Licensing revenue. For the nine months ended September 30, 2019, we recognized $6.2 million of licensing revenue from PTC Therapeutics pursuant to our PTC License Agreement entered into in August 2018. This revenue was recognized in connection with obtaining regulatory approval for WAYLIVRA from the EC in May 2019, at which point the variable constraint was resolved. For the nine months ended September 30, 2018, we recognized $12.0 million of licensing revenue related to the upfront payment received from PTC Therapeutics in connection with our PTC License Agreement.

Research and development revenue. For the nine months ended September 30, 2019, we recognized $176.3 million, compared to $42.7 million for the nine months ended September 30, 2018, in research and development and license revenue from our collaboration with Novartis. The increase in research and development revenue was primarily the result of the $150 million license fee related to Novartis’ exercise of its option to license AKCEA-APO(a)-L_Rx. This increase was partially offset by a decrease in the level of efforts related to activities for our AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx programs during the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018. The development activities for AKCEA-APO(a)-L_R were substantially completed as of June 30, 2019, and therefore the remaining revenue for this program was recognized during the second quarter of 2019.

Cost of sales and license expense

The following table sets forth our cost of sales and license expense for the periods presented (in thousands):

	Nine Months Ended September 30,
	2019		2018
Cost of sales - product	$	2,991	$	1,043
Cost of sales - intangible asset amortization		4,256		701
Cost of license		3,000		7,200
Total cost of sales, excluding non-cash    stock-based compensation expense		10,247		8,944
Non-cash stock-based compensation expense		382		—
Total cost of sales	$	10,629	$	8,944

Cost of sales - product. Product expense of $3.0 million for the nine months ended September 30, 2019, compared to $1.0 million for the nine months ended September 30, 2018, consists of period costs and certain fixed costs associated with the manufacturing of TEGSEDI. We do not expect fixed costs will increase in direct correlation to sales. Based on our policy, we expense costs associated with the manufacture of our products as research and development expense prior to regulatory approval. Certain product costs of TEGSEDI recognized as revenue during the nine months ended September 30, 2019 were incurred prior to the July 2018 E.U. approval, and therefore are not included in cost of sales during this period. We expect cost of sales to increase as we deplete inventories that were previously expensed prior to approval but are utilized for commercial sales. The cost of units sold during the period for which there was no cost basis was $0.5 million for the nine months ended September 30, 2019 and zero for the nine months ended September 30, 2018. All amounts exclude non-cash compensation expense related to equity awards.

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Cost of sales - intangible asset amortization. For the nine months ended September 30, 2019and 2018, intangible asset amortization of $4.3million and $0.7 million, respectively, consisted of amortization of intangible assets recorded as a result of the achievement of TEGSEDI regulatory milestones in the U.S. and E.U.

Cost of license. Cost of license of $3.0 million and $7.2 million for the nine months ended September 30, 2019 and 2018, respectively, consisted of sub-license expense due to Ionis related to license revenue earned as part of the licensing agreement with PTC Therapeutics.

Research and development expense

The following table sets forth our research and development expenses for the periods presented (in thousands):

	Nine Months Ended September 30,
	2019		2018
External TEGSEDI expenses	$	5,476	$	18,289
External WAYLIVRA expenses		8,751		17,402
Loss share under TTR license agreement with Ionis    Pharmaceuticals		1,108		—
Other external research and development projects expenses		21,085		31,371
Research and development personnel and overhead expenses		23,969		22,878
Sublicensing expenses		75,000		—
Total research and development expenses, excluding non-cash    stock-based compensation expense		135,389		89,940
Non-cash stock-based compensation expense		9,298		6,868
Total research and development expenses	$	144,687	$	96,808

Research and development expenses were $135.4 million for the nine months ended September 30, 2019 compared to $89.9 million for the same period in 2018. The increase in research and development expenses was primarily due to sublicensing expense of $75.0 million due to Ionis related to the Novartis option exercise for AKCEA-APO(a)-L_Rx in the first quarter of 2019, as well as an increase in development activities for AKCEA-TTR-L_Rx, AKCEA-ANGPTL3-L_Rx and personnel and overhead expense in support of our ongoing development efforts. This increase was partially offset by a decrease in research and development expenses primarily due to the completion of clinical activities related to the end of phase 2 meeting for AKCEA-APO(a)-L_Rx, which occurred in December 2018, and a decrease in development activities related to TEGSEDI and WAYLIVRA. All amounts exclude non-cash compensation expense related to equity awards.

Selling, general and administrative expense

The following table sets forth our selling, general and administrative expenses for the periods presented (in thousands):

	Nine Months Ended September 30,
	2019		2018
Selling, general and administrative expenses	$	110,468	$	83,305
Non-cash stock-based compensation expense		19,779		24,371
Total selling, general and administrative expenses	$	130,247	$	107,676

Selling, general and administrative expenses were $110.5 million for the nine months ended September 30, 2019 compared to $83.3 million for the nine months ended September 30, 2018. Our selling, general and administrative expenses increased due to the ongoing buildout of our commercial organization and advancement of commercialization activities necessary to launch TEGSEDI in the U.S., E.U. and Canada, and launch of WAYLIVRA in the E.U. All amounts exclude non-cash compensation expense related to equity awards.

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On September 18, 2019, Ms. Soteropoulos, Ms. Boyce, and Mr. Goldberg entered into Separation Agreements that terminated their employment with us and, with respect to Ms. Soteropoulos and Ms. Boyce, their positions on our board of directors, effective September 18, 2019. The unvested equity awards for the former President were terminated on the separation date.In addition, on September 18, 2019, we entered into a Consulting Agreement with Ms. Soteropoulos, which was amended on October 30, 2019, and a Consulting Agreement with Mr. Goldberg, pursuant to which theyagreed to provide consulting services to us through November 4, 2019 and October 31, 2019, respectively.Under the terms of the 2015 Plan, their equity awards continued to vest through the end of such consulting periods. We have updated our estimates of forfeitures for equity awards for these departed officers to reflect only those awards expected to vest, resulting in a reversal in the quarter ended September 30, 2019 of $18.8million of stock-based compensation expense previously recognized. This reversal was offset by normal stock-based compensation expense recognized for the nine months ended September 30, 2019.

Net Loss Share

In the first quarter of 2019, the profit sharing provisions for TEGSEDI under the TTR License Agreement with Ionis became effective. For the nine months ended September 30, 2019, we recorded $29.4 million of cost share related to TEGSEDI commercial activities. We did not record any amounts of loss share for the nine months ended September 30, 2018.

Other income and other expense

Investment income. Investment income for the nine months ended September 30, 2019 totaled $4.3 million compared to $4.1 million for the same period in 2018. The increase in investment income was primarily due to higher interest rates on high quality debt and U.S. government agencies investments during 2019 compared to 2018. This was partially offset by a decrease in the average investment balance during 2019 compared to 2018.

Net Loss and Net Loss Per Share

Net loss for the nine months ended September 30, 2019 was $41.6 million compared to a net loss of $155.3 million for the same period in 2018. This decrease in net loss is primarily due to the $150 million license fee related to Novartis’ exercise of its option to license AKCEA-APO(a)-L_Rx, of which $75 million is net of the sublicense fee due to Ionis.  Additionally, the decrease in net loss is due to commercial product revenue related to TEGSEDI and WAYLIVRA, cost share with Ionis that began in 2019 and a decrease in development activities. Basic and diluted net loss per common share owned by Ionis and owned by others for the nine months ended September 30, 2019 was $0.40 and $0.60, respectively. Basic and diluted net loss per common share owned by Ionis and owned by others for the nine months ended September 30, 2018 was $1.93 and $2.07, respectively.

Liquidity and Capital Resources

At September 30, 2019 we had cash, cash equivalents and investments of $252.7 million and accumulated deficit of $563.7 million.

Prior to our IPO, we funded our operating activities through a $100.0 million cash contribution that we received from Ionis in 2015, $75.0 million from initiating our collaboration with Novartis that we received in the first quarter of 2017 and $106.0 million in drawdowns under our line of credit with Ionis that we received in the first and second quarters of 2017. Our borrowings under our line of credit agreement with Ionis converted into shares of our common stock at the IPO price in connection with the closing of our IPO in July 2017. We no longer have access to the line of credit. Additionally, in July 2017 we received $182.3 million in net proceeds from our IPO, including $25.0 million that Ionis invested in our IPO and the Novartis concurrent private placement of $50.0 million.

In April 2018, the stockholders other than Ionis and its affiliates approved the development, commercialization, collaboration and license agreement, or TTR License Agreement, pursuant to which we acquired an exclusive license from Ionis to TEGSEDI and AKCEA-TTR-L_Rx and a stock purchase agreement, or Ionis SPA, with Ionis, our majority shareholder, which we entered into on March 14, 2018. To support our commercialization of TEGSEDI and AKCEA-TTR-L_Rx, Ionis purchased 10.7 million shares of our common stock for $200.0 million. As a result of the MA approval for TEGSEDI in the EU, on August 3, 2018 we issued 1,597,571 shares of our common stock to Ionis as payment of the $40.0 million regulatory milestone for TEGSEDI, and as a result of the regulatory approval for TEGSEDI in the United States, on October 17, 2018 we issued 1,671,849 shares of our common stock to Ionis as payment of the $50.0 million regulatory milestone for TEGSEDI.

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On February 22, 2019, we earned a license fee of $150.0 million related to Novartis’ option exercise of AKCEA-APO(a)-L_Rx, for which we issued 2,837,373 shares of our common stock on March 29, 2019 to Ionis as payment of a $75.0 million sublicense fee. See Note 7, Strategic Collaboration with Novartis, and Note 8, License Agreements and Services Agreement with Ionis, to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for more information about our collaboration with Novartis and Cardiometabolic licensing agreement with Ionis.

In September 2018, we earned a license fee of $12.0 million related to the collaboration and license agreement with PTC Therapeutics to commercialize TEGSEDI and WAYLIVRA in the PTC Territory. Additionally, in May 2019, we recognized an additional $6.0 million upon regulatory approval of WAYLIVRA by the EC, at which point the variable constraint was resolved.  See Note 9, Collaboration and License Agreement with PTC Therapeutics, to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for more information about our collaboration with PTC Therapeutics.

At September 30, 2019, we had working capital of $235.3 million compared to working capital of $186.6 million at December 31, 2018. Working capital increased in 2019 primarily due to an increase in accounts receivable, inventory and cash from operations and a decrease in accounts payable from activities related to our normal course of business. As of September 30, 2019, our outstanding receivable from Ionis was $0.6 million under our Amended Services Agreement with Ionis.

TEGSEDI is approved in the U.S., E.U. and Canada and we have begun our commercialization efforts in these three regions. We began to generate product revenue from TEGSEDI drug sales in the fourth quarter of 2018. WAYLIVRA is approved in the E.U. and we have begun our commercialization efforts in that region. We began to generate product revenue from WAYLIVRA drug sales in the third quarter of 2019.

We anticipate that we will continue to incur losses for the foreseeable future, and losses may continue to increase as we develop, seek regulatory approval for, and begin to commercialize our other pipeline drugs. We are subject to all of the risks incident in developing and commercializing new drugs and we may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect our business.

Future Funding Requirements

We expect that our cash, cash equivalents and investments of $252.7 million as of September 30, 2019, and cash expected to be generated from sales of TEGSEDI and from sales of WAYLIVRA in the E.U. will be sufficient to fund our operations through at least the next 12 months from the issuance of this Quarterly Report on Form 10-Q. We expect to raise additional funding in the future to continue developing the drugs in our pipeline and to commercialize TEGSEDI and WAYLIVRA, or any other approved drug.

We may seek to obtain additional financing in the future through the issuance of our common stock, through other equity or debt financings or through collaborations or partnerships with other companies. We may not be able to raise additional capital on terms acceptable to us, or at all, and any failure to raise capital as and when needed could compromise our ability to execute on our business plan. Until such time, if ever, as we can generate substantial product revenue, we may finance our cash needs through additional financing in the future through the issuance of our common stock, through other equity or debt financings or through collaborations or partnerships with other companies. In any event, we may not generate significant revenue from product sales prior to the use of our existing cash, cash equivalents and investments. We do not have any committed external source of funds. Additional capital may not be available on reasonable terms, if at all. To the extent that we raise additional capital through the sale of stock or convertible debt securities, the ownership interest of our stockholders will be diluted and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our common stockholders. Debt financing, if available, may involve agreements that include increased fixed payment obligations and covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, declaring dividends, selling or licensing intellectual property rights and other operating restrictions that could adversely affect our ability to conduct our business. If we raise additional funds through collaborations or licensing arrangements with third parties, we may have to relinquish valuable rights to our drugs or grant licenses on terms that may not be favorable to us. If we cannot raise additional funds through stock offerings or debt financings when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and commercialize our drugs even if we would otherwise prefer to develop and commercialize the drugs ourselves.

Our forecast of the period of time through which our financial resources will be adequate to support our operations involves risks and uncertainties, and actual results could vary as a result of a number of factors. We have based this estimate on assumptions that may prove to be wrong and we could use our available capital resources sooner than we currently expect. The amount and timing of future funding requirements, both near- and long-term, will depend on many factors, including, but not limited to:

• the cost of establishing and managing sales, marketing, manufacturing and distribution capabilities for our drugs;

• the revenue generated from commercial sales of our drugs for which we receive marketing authorization, which may be affected by market conditions, including obtaining coverage and adequate reimbursement of our drugs from third-party payors, including government programs and managed care organizations, and competition within the therapeutic class to which our drugs are assigned;

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• the effect of competing technological and market developments;

• our strategic collaborators' success in developing and commercializing our drugs;

• the number and characteristics of drugs that we may pursue;

• the outcome, timing and cost of regulatory approvals by the FDA and comparable foreign regulatory authorities, including the potential for the FDA or comparable foreign regulatory authorities to require that we perform more studies than, or evaluate clinical endpoints other than, those that we currently expect;

• our need to expand our development activities, including our need and ability to hire additional employees;

• the design, initiation, progress, size, timing, costs and results of our clinical and nonclinical studies; and

• our need to add infrastructure, implement internal systems and hire additional employees to operate as a public company.

If we cannot expand our operations or otherwise capitalize on our business opportunities because we lack sufficient capital, our business, financial condition and results of operations could be materially adversely affected.

Contractual Obligations and Commitments

On February 22, 2019, Novartis exercised its option to license AKCEA-APO(a)-L_Rx as part of our strategic collaboration with Novartis discussed in Note 7, Strategic Collaboration with Novartis, to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. As a result, we earned a license fee of $150.0 million. On March 29, 2019, we issued 2,837,373 shares of our common stock to Ionis as payment of the related $75.0 million sublicense fee.

On May 3, 2019, we received regulatory approval for WAYLIVRA in the E.U. from the European Commission, or EC, for the treatment of adult patients with genetically confirmed familial chylomicronemia syndrome, or FCS, in the E.U. As a result, we were paid a license fee of $6.0 million from PTC Therapeutics pursuant to our PTC License Agreement discussed in Note 9, Collaboration and License Agreement with PTC Therapeutics, to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q, of which we paid Ionis $3.0 million as a sublicense fee pursuant to the Cardiometabolic License Agreement.

On October 4, 2019, we entered into a license agreement with Pfizer for the development and commercialization of AKCEA-ANGPTL3-L_Rx. Upon closing of the license agreement, which we expect to occur in the fourth quarter of 2019, Pfizer will pay us a $250 million upfront license fee which will be split equally with Ionis.  We plan to satisfy our obligation to pay Ionis the $125.0 million sublicense fee through the issuance of 6,873,344 shares of our common stock.

Other than the above, there were no material changes to our contractual obligations and commitments described under Management’s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year ended December 31, 2018, as filed with the SEC on March 1, 2019.

Recently Issued Accounting Pronouncements

We describe the recently issued accounting pronouncements that apply to us in Note 2, Summary of Significant Accounting Policies, to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Off-balance Sheet Arrangements

We did not have any off-balance sheet arrangements during the period presented, as defined in the rules and regulations of the SEC.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Interest Rate Risk

We are exposed to changes in interest rates primarily from our investments in certain short-term investments. We place our cash equivalents and short-term investments with reputable financial institutions. We primarily invest our excess cash in money market funds and debt instruments of the U.S. Treasury, financial institutions, corporations, and U.S. government agencies with strong credit ratings and an investment grade rating at or above A-1, P-1 or F-1 by Moody's, Standard & Poor's, or Fitch, respectively. We have established guidelines relative to diversification and maturities that are designed to maintain safety and liquidity. We periodically review and modify these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity. We typically hold our investments for the duration of the term of the respective instrument. We do not utilize derivative financial instruments, derivative commodity instruments or other market risk sensitive instruments, positions or transactions to manage exposure to interest rate changes. Accordingly, we believe that, while the securities we hold are subject to changes in the financial standing of the issuer of such securities, we are not subject to any material risks arising from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices or other market changes that affect market risk sensitive instruments.

Foreign Exchange Risk

Our results of operations are subject to foreign currency exchange rate fluctuations as we have foreign subsidiaries, Akcea Therapeutics UK Ltd., or Akcea UK, Akcea Therapeutics Canada, Inc., or Akcea Canada, Akcea Therapeutics France SAS, or Akcea France, Akcea Therapeutics Germany GmbH, or Akcea Germany, Akcea Therapeutics Ireland Limited, or Akcea Ireland, Akcea Therapeutics Portugal, Unipessoal Lda, or Akcea Portugal, Akcea Therapeutics Italia S.R.L., or Akcea Italy, and Akcea Therapeutics Spain, S.L., or Akcea Spain, with functional currencies other than the U.S. dollar. We created these foreign subsidiaries to support our initial pre-commercialization and commercial activities in North America and Europe and to serve as potential entities for future North American and European operations. We translate the foreign subsidiaries' functional currencies to our reporting currency, the U.S. dollar. As a result, our financial position, results of operations and cash flows can be affected by market fluctuations in the foreign currencies to U.S. dollar exchange rate which are difficult to predict. However, because the Akcea foreign subsidiaries currently have limited operations, the effect of fluctuations of the foreign currencies to U.S. dollar exchange rate on our condensed consolidated results is immaterial to our condensed consolidated financial statements. Our business strategy incorporates continued international expansion, therefore we expect that the impact of foreign currency exchange rate fluctuations may become more substantial in the future.

Inflation Risk

We do not believe that inflation has had a material effect on our business, financial condition or results of operations. If our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition and results of operations.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information we are required to disclose in our Exchange Act of 1934, as amended, or the Exchange Act, reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our interim Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We design and evaluate our disclosure controls and procedures recognizing that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance and not absolute assurance of achieving the desired control objectives.

As of our most recently completed fiscal year and as of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, under the supervision and with the participation of our management, including our interim Chief Executive Officer and Chief Financial Officer. Based on our evaluation, our interim Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, 2019. There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls subsequent to September 30, 2019.

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We also performed an evaluation of any change in our internal control over financial reporting that occurred during our last fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.We conducted this evaluation under the supervision of and with the participation of our management, including our interim Chief Executive Officer and Chief Financial Officer. That evaluation did not identify any significant changes in our internal control over financial reporting that occurred during our latest fiscal quarter and that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our interim Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

From time to time, we may be involved in various claims and legal proceedings relating to claims arising out of our operations. We are not currently a party to any legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

ITEM 1A. RISK FACTORS

Investing in our securities involves a high degree of risk. You should consider carefully the following information about the risks described below, together with the other information contained in this Report and in our other public filings, in evaluating our business. If any of the following risks actually occur, our business could be materially harmed, and our financial condition and results of operations could be materially and adversely affected. As a result, the trading price of our securities could decline, and you might lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. The risk factors set forth below with an asterisk (*) next to the title are new risk factors or risk factors containing changes, which may be material, from the risk factors previously disclosed in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2018.

Risks Related to Our Financial Condition and Need for Additional Capital

We have a limited operating history and may never become sustainably profitable. *

Ionis Pharmaceuticals, Inc., or Ionis, incorporated us as a Delaware corporation in December 2014, and we have operated as a majority-owned affiliate of Ionis since that time. As such, we have limited experience as a company, and no experience operating independently from Ionis, and have not yet demonstrated that we can successfully overcome many of the risks and uncertainties frequently encountered in new and rapidly evolving fields, particularly the biotechnology and pharmaceutical fields.

As a company, we have limited experience commercializing products. Our ability to generate substantial revenue and achieve profitability from product sales depends on our ability, alone or with strategic partners, to successfully commercialize TEGSEDI^® (inotersen) and WAYLIVRA^® (volanesorsen) and develop and obtain the regulatory approvals necessary to commercialize the drugs in our pipeline. Although we received our first revenue from product sales in the fourth quarter of 2018, if we are not successful in growing revenue and controlling costs, we will not achieve sustainably profitable operations or positive cash flow. Our ability to generate revenue sufficient to achieve profitability from product sales depends heavily on our success and our current and future strategic partners' success in:

• completing clinical development of WAYLIVRA for additional indications and nonclinical and clinical development of AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx, AKCEA-ANGPTL3-L_Rx and AKCEA-APOCIII-L_Rx;

• seeking and obtaining initial or additional regulatory and marketing authorizations for our drugs, including TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx and our other drugs in development;

• managing supply and manufacturing relationships with third parties that can provide the amount and quality of products and services we need to continue to commercialize TEGSEDI and WAYLIVRA and to develop and, if approved, commercialize AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development;

• launching and commercializing AKCEA-TTR-L_Rx and continuing the commercialization of TEGSEDI and WAYLIVRA by managing a sales, marketing and distribution infrastructure;

• launching and co-commercializing AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx through our collaboration with Novartis Pharma AG, or Novartis, under terms that we may negotiate with Novartis in the future;

• launching and co-commercializing AKCEA-ANGPTL3-L_Rx through our collaboration with Pfizer Inc., or Pfizer;

• educating physicians about our target patient populations, including the polyneuropathy of hereditary transthyretin-mediated amyloidosis in adult patients in the United States, stage 1 or stage 2 polyneuropathy in adult patients with hereditary TTR Amyloidosis, or hATTR, in the European Union, or E.U., or Canada, patients with familial chylomicronemia syndrome, or FCS, and patients with familial partial lipodystrophy, or FPL;

• obtaining market acceptance of TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development as viable treatment options;

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• obtaining and maintaining adequate coverage and reimbursement from third-party payors for TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development;

• addressing any competing technological and market developments;

• negotiating favorable terms in any partnership, licensing or other arrangements into which we may enter;

• maintaining, protecting and expanding our portfolio of intellectual property rights, including patents, product trademarks and know-how;

• developing and commercializing AKCEA-TTR-L_Rx and our other drugs in development and continuing the commercialization of TEGSEDI and WAYLIVRA without infringing others' intellectual property rights; and

• attracting, hiring and retaining qualified personnel.

We may not successfully develop our products or generate product revenue sufficient to cover operating expenses or become sustainably profitable. If we cannot achieve or maintain profitability, it would depress the market price of our common stock and could impair our ability to raise capital, expand our business, diversify our product offerings or continue our operations. If the market price of our common stock declined, you could lose all or part of your investment.

We have mostly incurred losses since our inception. *

Because drug development requires substantial lead-time and funding prior to commercialization, we have generally incurred expenses while generating limited revenue from our operating activities since our formation. Our net loss was $41.6 million for the nine months ended September 30, 2019 compared to a net loss of $155.3 million for the nine months ended September 30, 2018. The primary difference is due to the $150 million license fee related to Novartis’ exercise of its option to license AKCEA-APO(a)-L_Rx. As of September 30, 2019, we had an accumulated deficit of approximately $563.7 million. We expect to incur additional operating losses for the foreseeable future, and these losses may increase if we cannot generate substantial revenue.

We will require substantial additional funding to achieve our goals. If we fail to obtain timely funding, we may need to curtail or abandon some of our programs. *

All of our drugs are undergoing clinical studies. All of our drug programs, except TEGSEDI in the United States, E.U., and Canada, and WAYLIVRA in the E.U., will require additional nonclinical and/or clinical testing and/or marketing authorization prior to commercialization. We will need to spend significant additional resources to conduct these activities. Our expenses could increase beyond expectations if the U.S. Food and Drug Administration, or FDA, the European Medicines Agency, or EMA, or other regulatory authorities require us to perform clinical studies and other studies in addition to those that we currently anticipate. As of September 30, 2019, we had cash, cash equivalents and investments equal to $252.7 million. Our operating expenses were $256.2 million and $213.4 million for the nine months ended September 30, 2019 and 2018, respectively.

Prior to our IPO, we funded our operating activities through a $100.0 million cash contribution we received from Ionis in 2015, $75.0 million that we received from initiating our collaboration with Novartis and $106.0 million in drawdowns under our line of credit with Ionis. We do not have any firm commitment from Ionis to fund our cash flow deficits or provide other direct or indirect assistance to us. Additionally, in July 2017 we received $182.3 million in net proceeds from our IPO including $25.0 million that Ionis invested in our IPO and the Novartis concurrent private placement of $50.0 million. In April 2018, we received $200.0 million from the common stock we issued in connection with the licensing transaction with Ionis discussed in Note 8, License Agreements and Services Agreement with Ionis, to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. On February 22, 2019, we earned a license fee of $150.0 million in connection with Novartis’ option exercise related to AKCEA-APO(a)-L_Rx, for which we issued 2,837,373 shares of our common stock on March 29, 2019 to Ionis as payment of a $75.0 million sublicense fee, as discussed in Note 7, Strategic Collaboration with Novartis and Note 8, License Agreements and Services Agreement with Ionis, to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.  We expect that we will need to raise additional funding to continue developing the drugs in our pipeline and to seek regulatory approval for and to commercialize TEGSEDI, WAYLIVRA and other drugs in our pipeline.

We have received marketing authorization approval for TEGSEDI from the FDA for the treatment of the polyneuropathy of hATTR in adult patients in the United States, from the European Commission, or EC, and from Health Canada for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hATTR, and we will continue to incur significant costs commercializing TEGSEDI. Further, on May 3, 2019, we received conditional marketing authorization approval for WAYLIVRA in the E.U. from the EC as an adjunct to diet in adult patients with genetically confirmed FCS who are at high risk for pancreatitis, in whom response to diet and triglyceride lowering therapy has been inadequate and we will continue to incur significant costs commercializing WAYLIVRA in the E.U. Even if we obtain marketing authorizations to sell AKCEA-APO(a)-L_Rx or AKCEA-TTR-L_Rx, additional marketing authorizations for WAYLIVRA or marketing authorizations for WAYLIVRA in other indications, we will incur significant costs to commercialize the approved product. Even if we generate substantial revenue from the sale of TEGSEDI, WAYLIVRA, and other future approved products, we may not become sustainably profitable and would need to obtain additional funding to continue operations.

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Risks Related to Clinical Development, Regulatory Review and Approval of Our Drugs

If the results of clinical testing indicate that any of our drugs are not suitable for commercial use, we may need to abandon one or more of our drug development programs.

Drug discovery and development has inherent risks and the historical failure rate for drugs is high. Antisense drugs are a relatively new approach to therapeutics. If we cannot demonstrate that our drugs are safe and effective for human use in the intended indication, we may need to abandon one or more of our drug development programs.

If any of our drugs in clinical studies, including WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, do not show sufficient safety and efficacy in patients with the targeted indication, it would negatively affect our development and commercialization goals for the drug and we would have expended significant resources with little or no benefit to us.

Even if our drugs are successful in preclinical and earlier-stage clinical studies, the drugs may not be successful in later-stage clinical studies. *

Successful results in preclinical or initial clinical studies, including the results of earlier studies for our drugs in development, may not predict the results of subsequent clinical studies, including the Phase 3 study of AKCEA-APO(a)-L_Rx in patients with established cardiovascular disease and elevated levels of lipoprotein(a). There are a number of factors that could cause a clinical study to fail or be delayed, including:

• the clinical study may produce negative or inconclusive results;

• regulators may require that we hold, suspend or terminate clinical research for noncompliance with regulatory requirements;

• we, our partners, the FDA or foreign regulatory authorities could suspend or terminate a clinical study due to adverse side effects of a drug on people in the study;

• we or our partners may decide, or regulators may require us, to conduct additional preclinical testing or clinical studies;

• we or our partners may not identify, recruit and train suitable clinical investigators at a sufficient number of study sites;

• the institutional review board for a prospective site might withhold or delay its approval for the study;

• enrollment in our clinical studies may be slower than we anticipate;

• patients who enroll in the clinical study may later drop out due to adverse events, a perception they are not benefiting from participating in the study, fatigue with the clinical study process or personal issues;

• a clinical study site may deviate from the protocol for the study;

• the cost of our clinical studies may be greater than we anticipate;

• we or our partners may require additional capital to fund the clinical study;

• our partners may decide not to exercise any existing options to license and conduct additional clinical studies for our drugs; and

• the supply or quality of our drugs or other materials necessary to conduct the clinical studies may be insufficient, inadequate or delayed.

In addition, WAYLIVRA and AKCEA-APOCIII-L_Rx have the same mechanism of action, TEGSEDI and AKCEA-TTR-L_Rx, also have the same mechanism of action and all of our current drugs, including WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-ANGPTL3-L_Rx and AKCEA-APOCIII-L_Rx, are chemically similar to each other and the drugs Ionis and other companies are developing separately. As a result, a safety observation we, Ionis or other companies encounter with one of our or their drugs could have or be perceived by a regulatory authority to have an impact on a different drug we are developing. This could cause the FDA and other regulators to ask questions or take actions that could harm or delay our ability to develop and commercialize our drugs or increase our costs. For example, the FDA or other regulatory agencies could request, among other things, any of the following regarding one of our drugs: additional information or commitments before we can start or continue a clinical study, protocol amendments, increased safety monitoring, additional product labeling information, and post-approval commitments. For example, in connection with the conditional marketing approval for WAYLIVRA in the E.U., the EC is requiring us to conduct a post-authorization safety study to evaluate the safety of WAYLIVRA on thrombocytopenia and bleeding in FCS patients taking WAYLIVRA. We have an ongoing open label extension study of WAYLIVRA in patients with FCS and an open label extension

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study of TEGSEDI in patients with hATTR, and an early access program, or EAP, for both WAYLIVRA and TEGSEDI. Adverse events or results from these studies or the EAPs could negatively impact our pending or future marketing approval applications for WAYLIVRA and TEGSEDI in patients with FCS or hATTR amyloidosis or the commercial opportunity for WAYLIVRA or TEGSEDI. In August 2018, we received a Complete Response Letter, or CRL, from the FDA regarding the new drug application for WAYLIVRA in which the FDA determined that the safety concerns identified with WAYLIVRA in our clinical development program outweighed the expected benefits of triglyceride lowering in patients with FCS. We also received a Notice of Noncompliance withdrawal letter, or Non-W, from Health Canada for WAYLIVRA in November 2018. We and Ionis are engaged with the FDA and plan to work with Health Canada to confirm a path forward for WAYLIVRA. As a result, we will need to submit additional data to the FDA and may need to conduct additional clinical studies before obtaining marketing authorization, which in turn could delay or prevent us from generating any revenue or profit from the sale of WAYLIVRA. Any failure or delay in the clinical studies for any of our drugs in development could reduce the commercial potential or viability of our drugs.

We may not have appropriately designed the planned and ongoing clinical studies for WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development to support submission of a marketing application to the FDA and foreign regulatory authorities or demonstrate safety or efficacy at the level required by the FDA and foreign regulatory authorities for product approval. *

We have ongoing studies for WAYLIVRA, as well as ongoing or planned studies for AKCEA-TTR-L_Rx, AKCEA-APO(a)-L_Rx, AKCEA-ANGPTL3-L_Rx and AKCEA-APOCIII-L_Rx.

Even if we achieve positive results on the endpoints for these clinical studies, including achievement of the primary endpoint of triglyceride lowering and the secondary endpoint of liver fat reduction for WAYLIVRA in patients with FPL, or any future clinical studies, the FDA or foreign regulatory authorities may believe the clinical studies do not show the appropriate balance of safety and efficacy in the indication being sought or may interpret the data differently than we do, and deem the results insufficient to demonstrate the appropriate balance of safety and efficacy at the level required for product approval. For example, in August 2018, we received a Complete Response Letter, or CRL, from the FDA regarding the new drug application for WAYLIVRA in which the FDA determined that the safety concerns identified with WAYLIVRA in our clinical development program outweighed the expected benefits of triglyceride lowering in patients with FCS. We also received a Notice of Noncompliance withdrawal letter, or NON-W, from Health Canada for WAYLIVRA in November 2018. We and Ionis are engaged with the FDA and plan to work with Health Canada to confirm a path forward for WAYLIVRA. As a result, we will need to submit additional data to the FDA and may need to conduct additional clinical studies before obtaining marketing authorization, which in turn could delay or prevent us from generating meaningful revenue or profit from the sale of WAYLIVRA. The Committee for Medicinal Products for Human Use, or CHMP, of the EMA adopted a positive opinion recommending conditional marketing authorization of WAYLIVRA as an adjunct to diet in adult patients with genetically confirmed FCS who are at high risk for pancreatitis, in whom response to diet and triglyceride lowering therapy has been inadequate. The positive opinion was subsequently referred to the EC, which grants marketing authorization for medicines in the E.U., as well as to European Economic Area members Iceland, Liechtenstein and Norway. The EC decided to adopt the CHMP’s positive opinion and on May 3, 2019 we received conditional marketing authorization approval for WAYLIVRA in the E.U. from the EC as an adjunct to diet in adult patients with genetically confirmed FCS who are at high risk for pancreatitis, in whom response to diet and triglyceride lowering therapy has been inadequate. Despite this recent conditional marketing authorization from the EC, these risks that we may not have appropriately designed the planned and ongoing clinical studies for WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development are more likely to occur since we are developing our drugs against therapeutic targets or to treat diseases in which there is little or no clinical experience. In addition, these risks may be more likely to occur for WAYLIVRA since there were some patients in the Phase 3 program that experienced serious platelet events (grade 4 thrombocytopenia), a condition in which the patient has very low platelet levels, and additional patients experienced other adverse events in the program, including patients who discontinued participation in the APPROACH study due to platelet count declines. We believe that the enhanced monitoring we have implemented to support early detection and management of these issues can help manage these safety issues so that patients can continue treatment. Since implementation of the enhanced monitoring, serious platelet events have been infrequent.

We may make modifications to the clinical study protocols or designs of our ongoing clinical studies that delay enrollment or completion of such clinical studies and could delay additional regulatory approvals for WAYLIVRA and initial regulatory approvals for our other drugs in development. Any failure to obtain an approval for WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development on the timeline that we currently anticipate, or at all, would have a material and adverse impact on our business, prospects, financial condition and results of operations and could cause our stock price to decline.

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Clinical studies for WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx, AKCEA-ANGPTL3-L_Rx, AKCEA-APOCIII-L_Rx or our other drugs may not demonstrate safety or efficacy at the level required by the FDA and foreign regulatory authorities for product approval. *

In January 2019, the CHMP of the EMA adopted a positive opinion recommending conditional marketing authorization of WAYLIVRA as an adjunct to diet in adult patients with genetically confirmed FCS who are at high risk for pancreatitis, in whom response to diet and triglyceride lowering therapy has been inadequate. The positive opinion was subsequently referred to the EC, which grants marketing authorization for medicines in the E.U., as well as to European Economic Area members Iceland, Liechtenstein and Norway. The EC decided to adopt the CHMP’s positive opinion and on May 3, 2019, we received conditional marketing authorization approval for WAYLIVRA in the E.U. from the EC as an adjunct to diet in adult patients with genetically confirmed FCS patients who are at high risk for pancreatitis, in whom response to diet and triglyceride lowing therapy has been inadequate. Despite the recent conditional marketing authorization from the EC for WAYLIVRA, the FDA and Health Canada may continue to deem the results from our clinical studies for WAYLIVRA insufficient to demonstrate the appropriate balance of safety and efficacy at the level required for product approval. We and Ionis are conducting or intend to conduct clinical studies for AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx, AKCEA-ANGPTL3-L_Rx and AKCEA-APOCIII-L_Rx.

Even if positive results on the endpoints for the clinical studies are achieved, the FDA or foreign regulatory authorities may believe the clinical studies do not show the appropriate balance of safety and efficacy in the indication being sought or may interpret the data differently than we do, and may deem the results insufficient to demonstrate the appropriate balance of safety and efficacy at the level required for product approval. For example, in August 2018 we received a CRL from the FDA regarding the new drug application for WAYLIVRA in which the FDA determined that the safety concerns identified with WAYLIVRA in our clinical development program outweighed the expected benefits of triglyceride lowering in patients with FCS. We also received a Non-W from Health Canada for WAYLIVRA in November 2018. We and Ionis are engaged with the FDA and plan to work with Health Canada to confirm a path forward for WAYLIVRA. As a result, we will need to submit additional data to the FDA and may need to conduct additional clinical studies before obtaining marketing authorization, which in turn could delay or prevent us from generating any revenue or profit from the sale of WAYLIVRA. As an additional example, the foreign regulatory authorities could claim that we have not tested WAYLIVRA for additional indications, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx, AKCEA-ANGPTL3-L_Rx and AKCEA-APOCIII-L_Rx in a sufficient number of patients to demonstrate that the drug is safe and effective in patients with other indications to support an application for marketing authorization for the applicable indication. In such a case, we may need to conduct additional clinical studies before obtaining marketing authorization, which would be expensive and delay the development and commercialization of the drug.

Any failure to obtain approvals for WAYLIVRA in other important markets outside of the E.U., on the timeline that we currently anticipate, or at all, could have a material and adverse impact on our business, prospects, financial condition and results of operations and could cause our stock price to decline.

If we or our partners fail to obtain regulatory approval for our drugs, including AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, or additional approvals for TEGSEDI and WAYLIVRA, we or our partners cannot sell them in the applicable markets. *

We cannot guarantee that any of our drugs, including WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, will be safe and effective, or will be approved or receive additional approvals for commercialization, as applicable. We and our partners must conduct time-consuming, extensive and costly clinical studies to demonstrate the safety and efficacy of each of our drugs, including WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, before they can be approved, or receive additional approvals, for sale. We and our partners must conduct these studies in compliance with FDA regulations and with comparable regulations in other countries.

We or our partners may not obtain necessary regulatory approvals on a timely basis, if at all, for any of our drugs. It is possible that regulatory authorities will not approve TEGSEDI in additional markets or WAYLIVRA in additional markets or for additional indications or any of our other drugs, including AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, for marketing. If the FDA or another regulatory authority believes that we or our partners have not sufficiently demonstrated the safety or efficacy of any of our drugs, including WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, the authority will not approve the specific drug or will require additional studies, which can be time consuming and expensive and which will delay or harm our ability to successfully commercialize the drug. For example, in August 2018, we received a CRL from the FDA regarding the new drug application for WAYLIVRA in which the FDA determined that the safety concerns identified with WAYLIVRA in our clinical development program outweighed the expected benefits of triglyceride lowering in patients with FCS. We also received a Non-W from Health Canada for WAYLIVRA in November 2018. We and Ionis are engaged with the FDA and plan to work with Health Canada to confirm a path forward for WAYLIVRA. As a result, we will need to submit additional data to the FDA and may need to conduct additional clinical studies before obtaining marketing authorization, which in turn could delay or prevent us from generating any meaningful revenue or profit from the sale of WAYLIVRA.  

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The FDA or other comparable foreign regulatory authorities can delay, limit or deny approval of a drug for many reasons, including:

• such authorities may disagree with the design or implementation of our clinical studies;

• we or our partners may be unable to demonstrate to the satisfaction of the FDA or other regulatory authorities that a drug is safe and effective for any indication;

• such authorities may not accept clinical data from studies conducted at clinical facilities that have deficient clinical practices or that are in countries where the standard of care is potentially different from the United States;

• we or our partners may be unable to demonstrate that our drug's clinical and other benefits outweigh its safety risks to support approval;

• such authorities may disagree with the interpretation of data from preclinical or clinical studies;

• such authorities may find deficiencies in the manufacturing processes or facilities of third-party manufacturers who manufacture clinical and commercial supplies for our drugs; and

• the approval policies or regulations of such authorities or their prior guidance to us or our partners during clinical development may significantly change in a manner rendering our clinical data insufficient for approval.

Failure to successfully develop WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, or to receive marketing authorization for these drugs in important markets or delays in these authorizations would prevent or delay the commercial launch of the drug, and, as a result, would negatively affect our ability to generate revenue.

We may not be able to benefit from orphan drug designation for WAYLIVRA, TEGSEDI or any of our other drugs.

The FDA and EMA have granted orphan drug designation to TEGSEDI and to WAYLIVRA for the treatment of patients with FCS. In addition, the EMA has granted orphan drug designation to WAYLIVRA for the treatment of patients with FPL. The FDA, however, refused to grant our request for orphan drug designation for WAYLIVRA for the treatment of patients with FPL in the United States in 2017.

In the United States, under the Orphan Drug Act, the FDA may designate a drug as an orphan drug if it is intended to treat a rare disease or condition, which is generally defined as a patient population of fewer than 200,000 individuals in the United States. Orphan drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process, but it can provide financial incentives, such as tax advantages and user-fee waivers, as well as longer regulatory exclusivity periods.

Even if approval is obtained on a drug that has been designated as an orphan drug, we may lose orphan drug exclusivity if the FDA determines that the request for designation was materially defective or if we cannot assure sufficient quantity of the applicable drug to meet the needs of patients with the rare disease or condition, or if a competitor is able to gain approval for the same drug in a safer or more effective form or that makes a major contribution to patient care.

Even if we maintain orphan drug exclusivity for TEGSEDI or WAYLIVRA for the treatment of patients with FCS or obtain orphan drug exclusivity for our other drugs, the exclusivity may not effectively protect the drug from competition because regulatory authorities still may authorize different drugs for the same condition.

We may expend our limited resources to pursue a particular drug or indication and fail to capitalize on drugs or indications that may be more profitable or for which there is a greater likelihood of success.

We will continue to dedicate a substantial amount of our resources to commercialize TEGSEDI and support the continued development of AKCEA-TTR-L_Rx. In addition, we may dedicate a substantial amount of our resources to commercialize WAYLIVRA in the E.U. for patients with FCS and to develop and seek regulatory approval for WAYLIVRA to treat patients with FPL. As a result, we may forego or delay pursuit of opportunities with our other drugs or for other indications that later prove to have greater commercial potential. Our resource allocation decisions may cause us to fail to capitalize on viable commercial drugs or profitable market opportunities. Our spending on current and future research and development programs and drugs for specific indications may not yield any commercially viable drugs.

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Our drugs, including TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, could be subject to regulatory limitations following approval. *

Following approval of a drug, we and our partners must comply with comprehensive government regulations regarding the manufacture, marketing and distribution of drug products. Promotional communications regarding prescription drugs must be consistent with the information in the product's approved labeling. We and our partners may not obtain the labeling claims necessary or desirable to successfully commercialize our drug products, including TEGSEDI and WAYLIVRA for FCS in the E.U., and if approved, WAYLIVRA for additional indications, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development.

The FDA and foreign regulatory authorities can impose significant restrictions on an approved drug product through the product label and on advertising, promotional and distribution activities. For example:

• In the United States, TEGSEDI’s label contains a boxed warning for thrombocytopenia and glomerulonephritis,

• TEGSEDI requires periodic blood and urine monitoring,

• in the United States TEGSEDI is available only through a Risk Evaluation and Mitigation Strategy, or REMS, program, and

• WAYLIVRA will require periodic blood monitoring.

In addition, when approved, the FDA or a foreign regulatory authority may condition approval on the performance of post-approval clinical studies or patient monitoring, which could be time consuming and expensive. For example, in connection with the conditional marketing approval for WAYLIVRA in the E.U., the EC is requiring us to conduct a post-authorization safety study to evaluate the safety of WAYLIVRA on thrombocytopenia and bleeding in FCS patients taking WAYLIVRA. If the results of such post-marketing studies are not satisfactory, the FDA, EC, or other foreign regulatory authority may withdraw marketing authorization or may condition continued marketing on commitments from us or our partners that may be expensive and/or time consuming to fulfill.

In addition, if we or others identify side effects after any of our drug products are on the market, if manufacturing problems occur subsequent to regulatory approval, or if we, our manufacturers or our partners fail to comply with regulatory requirements, we or our partners could be subject to:

• changes to the product label;

• restrictions on the marketing of a product;

• restrictions on product distribution;

• restrictions on such products' manufacturing processes;

• requirements to conduct post-marketing clinical studies;

• Untitled or Warning Letters;

• withdrawal of the products from the market;

• refusal to approve pending applications or supplements to approved applications that we submit;

• recall of products;

• fines, restitution or disgorgement of profits or revenue;

• suspension or withdrawal of regulatory approvals;

• refusal to permit the import or export of our products;

• product seizure;

• injunctions;

• restrictions on our ability to conduct clinical studies, including full or partial clinical holds on ongoing or planned clinical studies; or

• imposition of civil or criminal penalties.

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Any one or a combination of these events could prevent us from achieving or maintaining market acceptance of the affected drug product or could substantially increase the costs and expenses of commercializing such drug product, which in turn could delay or prevent us from generating any revenue or profit from the sale of the drug product.

The development and commercialization of TEGSEDI and WAYLIVRA may place strain on our management team’s time and attention and may divert our management team’s attention from our other existing products. *

Although we have personnel with experience commercializing drugs, we ourselves have limited experience commercializing products. We commercially launched TEGSEDI during the fourth quarter of 2018. Following our receipt of conditional marketing authorization approval from the EC, we launched WAYLIVRA in the E.U. in August 2019 as an adjunct to diet in patients with genetically confirmed FCS who are at high risk for pancreatitis, in whom response to diet and triglyceride lowering therapy has been inadequate. Launch activities throughout the E.U. are ongoing. The commercial launch of TEGSEDI and WAYLIVRA will continue to require significant efforts and the devotion of substantial resources, as we finalize regulatory submissions, manage the manufacturing of sufficient quantities of product to support long-term commercial sales and integrate, optimize or maintain, as applicable, the global sales, marketing, medical, for each of WAYLIVRA and TEGSEDI, and patient support infrastructure, which may place pressure on the management team’s time and attention. These efforts may also divert the attention of the management team from our other business operations, such as the development or commercialization of our other pipeline products, including AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx, AKCEA-ANGPTL3-L_Rx and AKCEA-APOCIII-L_Rx. As a result, our business, results of operations, financial condition and prospects for future growth could be adversely impacted and the market price of our common stock may decline.

Risks Related to Commercialization of Our Drugs

If we cannot effectively manage our marketing and sales capabilities or enter into agreements with third parties to market and sell our drug products, we may not generate product revenue. *

We commercially launched TEGSEDI in the fourth quarter of 2018 and we launched WAYLIVRA in the E.U. in August 2019. Launch activities for both TEGSEDI and WAYLIVRA continue in the E.U. To successfully commercialize TEGSEDI and WAYLIVRA, we must effectively manage our marketing, sales and distribution capabilities or make arrangements with third parties to perform these services. We may not be successful in doing so. To commercialize WAYLIVRA in the initial indications we plan to pursue and to continue the commercialization of TEGSEDI, we will need to optimize and maintain specialty sales forces in the global regions where we currently market or expect to market TEGSEDI and WAYLIVRA, supported by case managers, reimbursement specialists, partnerships with specialty pharmacies, injection training, routine blood and urine monitoring and a medical affairs team. We may seek to further penetrate markets by expanding our sales forces or through strategic partnerships with other pharmaceutical or biotechnology companies or third-party sales organizations.

Even though certain members of our management team and other employees have significant experience commercializing drugs, as a company we have limited experience marketing, selling or distributing drugs, and there are significant risks involved in building and managing a commercial infrastructure. It is expensive and time consuming for us to maintain our own sales forces and related compliance protocols to market TEGSEDI and WAYLIVRA, and it will be increasingly expensive and time consuming as we commercially launch additional drugs, if approved. We may never successfully optimize or manage this capability and any failure could harm the commercial launch of WAYLIVRA or adversely affect TEGSEDI sales. We and our partners will have to compete with other companies to recruit, hire, train, manage and retain marketing and sales personnel. As a result of our receipt of a CRL from the FDA regarding the new drug application for WAYLIVRA, on September 6, 2018, we enacted a plan to reorganize our workforce to better align with the immediate needs of our business. In connection with this reorganization plan, we reduced our workforce by approximately 12%. If WAYLIVRA is subsequently approved in the United States, we will again need to increase our operations and expand our use of third-party contractors.

We have incurred expenses launching TEGSEDI in the E.U., Canada and U.S. and launching WAYLIVRA in the E.U. and integrating and managing the marketing and sales infrastructure. If regulatory requirements or other factors cause the commercialization of TEGSEDI or WAYLIVRA to be less successful than expected in important markets, we would incur additional expenses for having invested in these capabilities prior to realizing any significant revenue from sales of TEGSEDI or WAYLIVRA. Our sales force and marketing teams may not successfully commercialize TEGSEDI or WAYLIVRA.

To the extent we decide to rely on third parties to commercialize TEGSEDI or WAYLIVRA in a particular geographic market, we may receive less revenue than if we commercialized TEGSEDI or WAYLIVRA by ourselves. For example, in August 2018, we granted PTC Therapeutics International Limited, or PTC Therapeutics, the exclusive right to commercialize TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries, and will continue to rely on PTC Therapeutics to commercialize TEGSEDI and WAYLIVRA in those geographic markets. In addition, in August 2018 we entered into an agreement with Accredo Health Group, Inc., or Accredo, a subsidiary of Express Scripts, to be our specialty pharmacy partner for distribution of TEGSEDI in the U.S. Further, we have less control over the sales efforts of other third parties, including PTC Therapeutics and Accredo, involved in commercializing TEGSEDI or WAYLIVRA.

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If we cannot effectively build and manage our distribution, medical affairs, market access, marketing and sales infrastructure, or find a suitable third party to perform such functions, the sales of TEGSEDIand WAYLIVRA may be adversely affected, which could have a material adverse effect on our business, prospects, financial condition and results of operations.

If we are unable to rely on third-party specialty channels to distribute our drugs to patients we may be unable to generate adequate revenue

We and our strategic partners have contracted with, rely on and will continue to rely on third-party specialty pharmacies to distribute our drugs to patients. A specialty pharmacy is a pharmacy that specializes in dispensing medications for complex or chronic conditions, a process that requires a high level of patient education and ongoing management. Our management team will need to devote a significant amount of its attention to optimizing and managing this distribution network. If we cannot effectively optimize and manage this distribution process, any future launch of AKCEA-APO(a)-L_Rx and AKCEA-TTR-L_Rx and the sales of TEGSEDI and WAYLIVRA will be adversely affected.

In addition, the use of specialty pharmacies involves certain risks, including, but not limited to, risks that these organizations will:

• not provide us with accurate or timely information regarding their inventories, the number of patients who are using our drugs or complaints regarding our drugs;

• not effectively sell or support TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx or our other drugs;

• reduce or discontinue their efforts to sell or support TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx or our other drugs;

• not devote the resources necessary to sell TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx or our other drugs in the volumes and within the time frames that we expect;

• not satisfy financial obligations to us or others; or

• cease operations.

Any such events may result in decreased sales and lower revenue, which could have a material adverse effect on our business, prospects, financial condition and results of operations.

If the market does not accept our drugs, including TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, we are not likely to generate substantial product revenue or become profitable. *

Even though we have obtained marketing authorization approval from the FDA, the EC and Health Canada for TEGSEDI, conditional marketing authorization approval from the EC for WAYLIVRA and if we or our strategic partners obtain a marketing authorization for WAYLIVRA in the United States or Canada or for additional indications, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, our success will depend upon the medical community, patients and third-party payors accepting our drugs as medically useful, cost-effective, safe and convenient. Even if the FDA or foreign regulatory authorities authorize our drugs for commercialization, doctors may not prescribe our drugs to treat patients. We and our partners may not successfully commercialize additional drugs.

Additionally, in many of the markets where we or our partners may sell our drugs in the future, if we cannot agree with the government or other third-party payors regarding the price we can charge for our drugs, then we may not be able to sell our drugs in that market. Similarly, cost control initiatives by governments or third-party payors could decrease the price received for our drugs or increase patient coinsurance to a level that makes the continued commercializing of TEGSEDI and WAYLIVRA as well as the commercializing of  AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development economically unviable.

The degree of market acceptance for TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development depends upon a number of factors, including the:

• receipt and scope of marketing authorizations;

• establishment and demonstration in the medical and patient community of the efficacy and safety of our drugs and their potential advantages over competing products;

• cost and effectiveness of our drugs compared to other available therapies;

• patient convenience of the dosing regimen for our drugs; and

• reimbursement by government and third-party payors.

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Based on the profile of our drugs, physicians, patients, patient advocates, payors or the medical community in general may not accept and/or use any drugs that we may develop.

For example, the product label for TEGSEDI in the United States has a boxed warning for thrombocytopenia and glomerulonephritis, requires periodic blood and urine monitoring, and TEGSEDI is available only through a Risk Evaluation and Mitigation Strategy, or REMS, program. Our main competition in the U.S. market for TEGSEDI is ONPATTRO (patisiran), marketed by Alnylam Pharmaceuticals, Inc. Although ONPATTRO requires intravenous administration and pre-treatment with steroids, it does not have a boxed warning or REMS. Additionally, the product label for WAYLIVRA in the E.U. requires periodic blood monitoring. In each case, these label requirements could negatively affect our ability to attract and retain patients for these drugs. We believe that the enhanced monitoring we have implemented to support early detection and management of these issues can help manage these safety issues so that patients can continue treatment. Since implementation of the enhanced monitoring, serious platelet events have been infrequent. While we believe we can better maintain patients on TEGSEDI and WAYLIVRA through our patient-centric commercial approach where we plan to have greater involvement with physicians and patients, if we cannot effectively maintain patients on TEGSEDI and WAYLIVRA, we may not be able to generate substantial revenue from TEGSEDI and WAYLIVRA sales.

The patient populations suffering from FCS and FPL are small and have not been established with precision. If the actual number of patients is smaller than we estimate, or if we cannot raise awareness of these diseases and diagnosis is not improved, our revenue and ability to achieve profitability from WAYLIVRA may be adversely affected.

We estimate there are 3,000 to 5,000 FCS patients and an additional 3,000 to 5,000 FPL patients globally. Our estimates of the sizes of the patient populations are based on published studies as well as internal analyses. If the results of these studies or our analyses of them do not accurately reflect the number of patients with FCS and FPL, our assessment of the market potential for WAYLIVRA may be inaccurate, making it difficult or impossible for us to meet our revenue goals, or to obtain and maintain profitability. In addition, as is the case with most orphan diseases, if we cannot successfully raise awareness of these diseases and improve diagnosis, it will be more difficult or impossible to achieve profitability.

In addition, since the patient populations for FCS and FPL are small, the per-patient drug pricing must be priced appropriately in order to recover our development and manufacturing costs, fund adequate patient support programs and achieve profitability. For these initial indications, we may not maintain or obtain sufficient sales volume at a price that justifies our product development efforts and our sales and marketing and manufacturing expenses.

The patient population suffering from hATTR amyloidosis is small and has not been established with precision. If the actual number of patients is smaller than we estimate, or if we cannot raise awareness of the disease and diagnosis is not improved, our revenue and ability to achieve profitability from either TEGSEDI or AKCEA-TTR-L_Rx may be adversely affected.

We estimate there are 50,000 patients with hATTR amyloidosis globally. Our estimate of the sizes of the patient populations are based on published studies as well as internal analyses. If the results of these studies or our analyses of them do not accurately reflect the number of patients with hATTR amyloidosis, our assessment of the market potential for either TEGSEDI or AKCEA-TTR-L_Rx may be inaccurate, making it difficult or impossible for us to meet our revenue goals, or to obtain and maintain profitability. In addition, as is the case with most orphan diseases, if we cannot successfully raise awareness of these diseases and improve diagnosis, it will be more difficult or impossible to achieve profitability. For these initial indications, we may not maintain or obtain sufficient sales volume at a price that justifies our product development efforts and our sales and marketing and manufacturing expenses.

If we or our partners fail to compete effectively, WAYLIVRA, TEGSEDI and our other drugs in development will not contribute significant revenue.

Our competitors engage in drug discovery throughout the world, are numerous and include, among others, major pharmaceutical companies and specialized biopharmaceutical firms. Our competitors may succeed in developing drugs that are:

• safer than our drugs;

• more effective than our drugs;

• priced lower than our drugs;

• reimbursed more favorably by government and other third-party payors than our drugs; or

• more convenient to use than our drugs.

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These competitive developments could make our drugs, including WAYLIVRA, TEGSEDI, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, obsolete or non-competitive. Further, all of our drugs are delivered by injection, which may render them less attractive to patients than non-injectable products offered by our current or future competitors.

Many of our competitors have substantially greater financial, technical and human resources than we do. In addition, many of these competitors have significantly greater experience than we do in conducting preclinical testing and human clinical studies, in obtaining FDA and other regulatory authorizations and in commercializing pharmaceutical products. Accordingly, our competitors may succeed in obtaining regulatory authorization for products earlier than we do. Marketing and sales capability is another factor relevant to the competitive position of our drugs, and many of our competitors will have greater marketing and sales capabilities than our capabilities.

There are several pharmaceutical and biotechnology companies engaged in the development or commercialization of products against targets that are also targets of drugs in our development pipeline. For example, WAYLIVRA could face competition from drugs like metreleptin and gemcabene. Metreleptin, produced by Novelion Therapeutics, Inc., is currently approved in the U.S. and E.U. for use in generalized lipodystrophy patients. WAYLIVRA may also compete with gemcabene, an oral small molecule that reduces apoC-III, that Gemphire Therapeutics, Inc. is developing to treat patients with triglycerides above 500 mg/dL.

As an additional example, TEGSEDI could face competition from drugs like ONPATTRO, marketed by Alnylam for hATTR amyloidosis with polyneuropathy in the U.S. and E.U., VYNDAQEL^® and VYNDAMAX™, both marketed by Pfizer, available in the U.S. for patients with both hereditary and wild type ATTR cardiomyopathy and available in the E.U. for stage 1 hATTR amyloidosis with polyneuropathy, and AG10, which is being developed by Eidos for patients with ATTR with cardiomyopathy. For example, ONPATTRO is approved in the United States and Europe for a similar and broader indication as TEGSEDI. AG10, which recently completed its Phase 2 dose-finding study, is an orally administered TTR tetramer stabilizer for ATTR amyloidosis. If WAYLIVRA, TEGSEDI or the other drugs in our pipeline cannot compete effectively with these and other products with common or similar indications to the drugs in our pipeline, we may not be able to generate substantial revenue from our product sales.

If government or other third-party payors fail to provide adequate coverage and payment rates for TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, our revenue and prospects for profitability will be limited. *

In both domestic and foreign markets, sales of our future products will depend in part upon the availability of coverage and reimbursement from third-party payors. The majority of patients in the United States who would fit within our target patient populations for our drugs have their healthcare supported by a combination of Medicare coverage, other government health programs such as Medicaid, managed care providers, private health insurers and other organizations. Coverage decisions may depend upon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available. Assuming coverage is approved, the resulting reimbursement payment rates might not be enough to make our drugs affordable. Accordingly, TEGSEDI and WAYLIVRA for FCS in the E.U. and, if approved, WAYLIVRA in the United States or Canada and for additional indications, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, will face competition from other therapies and drugs for limited financial resources. We may need to conduct post-marketing studies to demonstrate the cost-effectiveness of any future products to satisfy third-party payors. These studies might require us to commit a significant amount of management time and financial and other resources. Third-party payors may never consider our future products as cost-effective. Adequate third-party coverage and reimbursement might not be available to enable us to maintain price levels sufficient to realize an appropriate return on investment in product development.

Third-party payors, whether foreign or domestic, or governmental or commercial, are developing increasingly sophisticated methods of controlling healthcare costs. In addition, in the United States, no uniform policy of coverage and reimbursement for drug products exists among third-party payors. Therefore, coverage and reimbursement for drug products can differ significantly from payor to payor. Further, we believe that future coverage and reimbursement will likely be subject to increased restrictions both in the United States and in international markets. For example, in the United States, recent health reform measures have resulted in reductions in Medicare and other healthcare funding, and there have been several recent U.S. Congressional inquiries and proposed federal legislation designed to, among other things, reform government program reimbursement methodologies for drug products and bring more transparency to drug pricing. Third-party coverage and reimbursement for our products or drugs may not be available or adequate in either the United States or international markets, which would negatively affect the potential commercial success of our products, our revenue and our profits.

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If we are found in violation of federal or state "fraud and abuse" laws or other healthcare laws and regulations, we may be required to pay a penalty and/or be suspended from participation in federal or state healthcare programs, which may adversely affect our business, financial condition and results of operation.

We may be subject to various federal and state laws pertaining to healthcare "fraud and abuse," including anti-kickback laws and false claims laws. Anti-kickback laws, among other things, make it illegal for a prescription drug manufacturer to pay, or offer to pay, a healthcare provider to refer, purchase or prescribe a particular drug. Due to the breadth of the statutory and regulatory provisions, it is possible that government authorities and others might challenge our practices under anti-kickback or other fraud and abuse laws. Moreover, recent healthcare reform legislation has strengthened these laws. In addition, false claims laws prohibit anyone from knowingly and willingly presenting, or causing to be presented for payment, to government third-party payors, including Medicare and Medicaid claims for reimbursed drugs that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services. Our activities relating to the sale and marketing of our products may be subject to scrutiny under these laws. If we violated fraud and abuse laws, we could face a combination of:

• criminal and civil sanctions, including fines and civil monetary penalties;

• the possibility of exclusion from federal healthcare programs, including Medicare and Medicaid; and

• corporate integrity agreements, which could impose rigorous operational and monitoring requirements on us.

Given the significant penalties and fines that the government can impose on companies and individuals if convicted, allegations of violations often result in settlements even if the company or individual being investigated admits no wrongdoing. Settlements often include significant civil sanctions, including fines and civil monetary penalties, and corporate integrity agreements. If the government were to allege or convict us or our executive officers of violating these laws, our business could be harmed. In addition, private individuals may bring similar actions under the False Claims Act. Our activities could be subject to challenge for the reasons discussed above and due to the broad scope of these laws and the increasing focus on these laws by law enforcement authorities. To the extent we have access to protected health information we could be subject to foreign and federal and state health information privacy and security laws, including without limitation, the Health Insurance Portability and Accountability Act of 1996, or HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, which governs the conduct of certain electronic healthcare transactions and protects the security and privacy of protected health information; and analogous foreign and state laws governing the privacy and security of health information, such as the General Data Protection Regulation, or GDPR in the E.U., and the California Consumer Privacy Act, or CCPA, in California, some of which are more stringent than HIPAA and many of which differ from each other in significant ways and may not have the same effect; and the Physician Payments Sunshine Act, which requires manufactures of medicines, devices, biologic and medical supplies to report annually to the U.S. Department of Health and Human Services information related to payments and other transfers of value to physicians and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members. Our failure to comply with applicable federal and state health information privacy and security laws could subject us to significant fines and multi-year corrective action plans. TEGSEDI commercially launched in the U.S. in the fourth quarter of 2018 and as such we are now required to report annually to Centers for Medicare and Medicaid Services certain information related to payments and other transfers of value we may provide to physicians and teaching hospitals. Further, an increasing number of state laws require manufacturers to make reports to states on pricing and marketing information. Many of these laws are unclear as to what is required to comply with the laws. Given the lack of clarity in laws and their implementation, our reporting actions could be subject to the penalty provisions of the pertinent state authorities.

Similar rigid restrictions related to anti-kickbacks and promoting and marketing medicinal products apply in the E.U. and other countries. Authorities in these countries strictly enforce these restrictions. Even in those countries where we will not be directly responsible for promoting and marketing our products, inappropriate activity by any of our international commercialization partners we may have could harm us.

Risks Related to Dependence on Third Parties

We plan to substantially depend on our collaboration with Novartis to develop and commercialize AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx.

We have granted Novartis an exclusive option to exclusively license each of AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx pursuant to our strategic collaboration, option and license agreement with Novartis_. In February 2019, Novartis exercised its option to license AKCEA-APO(a)-L_Rx. We plan to substantially depend on Novartis to further develop and commercialize AKCEA-APO(a)-L_Rx and potentially AKCEA-APOCIII-L_Rx. We initiated this collaboration primarily to have Novartis:

• conduct the cardiovascular outcome studies that are likely to be required for approval of AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx;

• seek and obtain regulatory approvals for AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx; and

• globally commercialize AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx.

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Since Novartis has exercised its option to license AKCEA-APO(a)-L_Rx, we will rely on Novartis to further develop, obtain regulatory approvals for, and commercialize it. In general, we cannot control the amount and timing of resources that Novartis devotes to our strategic collaboration. If Novartis fails to use commercially reasonable efforts to further develop, obtain regulatory approvals for, or commercialize AKCEA-APO(a)-L_Rx, or if Novartis' efforts are not effective, our business may be negatively affected. Novartis could pursue other technologies or develop other drugs either on its own or in collaboration with others to treat the same diseases as we and Novartis plan to treat with AKCEA-APO(a)-L_Rx. Novartis could pursue these technologies and develop these other drugs at the same time as it is developing or commercializing AKCEA-APO(a)-L_Rx, and Novartis is not required to inform us of such activities.

If Novartis exercises its option to license AKCEA-APOCIII-L_Rx, we would rely on Novartis to further develop, obtain regulatory approvals for, and commercialize it. In general, we cannot control the amount and timing of resources that Novartis devotes to our strategic collaboration. If Novartis fails to use commercially reasonable efforts to further develop, obtain regulatory approvals for, or commercialize AKCEA-APOCIII-L_Rx, or if Novartis' efforts are not effective, our business may be negatively affected. Novartis could pursue other technologies or develop other drugs either on its own or in collaboration with others to treat the same disease as we and Novartis plan to treat with AKCEA-APOCIII-L_Rx. Novartis could pursue these technologies and develop these other drugs at the same time as it is developing or commercializing AKCEA-APOCIII-L_Rx and Novartis is not required to inform us of such activities.

Our strategic collaboration with Novartis may not continue for various reasons. Novartis can terminate our agreement at any time and is under no obligation to exercise the options we granted them. If Novartis stops developing or commercializing AKCEA-APO(a)-L_Rx, or does not exercise its option to license AKCEA-APOCIII-L_Rx, we will have to seek additional sources for funding and may have to delay or reduce our development and commercialization plans for these drugs.

In addition, following Novartis’ exercise of its option to license AKCEA-APO(a)-L_Rx and if Novartis exercises its option to license AKCEA-APOCIII-L_Rx, Novartis will be responsible for the long-term supply of drug substance and finished drug product for the licensed drug.

Our strategic collaboration with Novartis may not result in the successful commercialization of AKCEA-APO(a)-L_Rx or AKCEA-APOCIII-L_Rx. If Novartis does not successfully develop, manufacture or commercialize AKCEA-APO(a)-L_Rx or AKCEA-APOCIII-L_Rx, we may receive limited or no revenues for these drugs.

We plan to substantially depend on our collaboration with PTC Therapeutics to commercialize TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries.

In August 2018, we granted PTC Therapeutics International Limited the exclusive right to commercialize TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries. We plan to substantially depend on PTC Therapeutics to commercialize these drugs in those geographic markets.

In general, we cannot control the amount and timing of resources that PTC Therapeutics devotes to our strategic collaboration. If PTC Therapeutics fails to use commercially reasonable efforts to obtain regulatory approvals for, or commercialize these drugs, or if PTC Therapeutics’ efforts are not effective, our business may be negatively affected. PTC Therapeutics could pursue other technologies or develop other drugs either on its own or in collaboration with others to treat the same diseases as we and PTC plan to treat with TEGSEDI and WAYLIVRA. PTC Therapeutics could pursue these technologies and develop these other drugs at the same time as it is developing or commercializing TEGSEDI and WAYLIVRA, and PTC Therapeutics is not required to inform us of such activities.

Our strategic collaboration with PTC Therapeutics may not continue for various reasons. If PTC Therapeutics stops commercializing a drug, we will have to seek additional sources for funding and may have to delay or reduce our commercialization plans for TEGSEDI and WAYLIVRA in Latin America or certain Caribbean countries.

Our strategic collaboration with PTC Therapeutics may not result in the successful commercialization of TEGSEDI or WAYLIVRA in Latin America or certain Caribbean countries. If PTC Therapeutics does not successfully commercialize TEGSEDI or WAYLIVRA, we may receive limited revenue for TEGSEDI or no revenue for WAYLIVRA in Latin America or certain Caribbean countries.

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AKCEA-APOCIII-L_Rx and AKCEA-ANGPTL3-L_Rx may compete with WAYLIVRA, which could reduce our expected revenues for WAYLIVRA.

WAYLIVRA and AKCEA-APOCIII-L_Rx both inhibit the production of the same protein. We believe the enhancements we incorporated into AKCEA-APOCIII-L_Rx can provide greater patient convenience by allowing for significantly lower doses and less frequent administration compared to WAYLIVRA. As such, if Novartis exercises its option and successfully commercializes AKCEA-APOCIII-L_Rx while we are commercializing WAYLIVRA, to the extent physicians and patients elect to use AKCEA-APOCIII-L_Rx instead of WAYLIVRA, it will reduce the revenue we derive from WAYLIVRA. In addition, while AKCEA-ANGPTL3-L_Rx and WAYLIVRA use different mechanisms of action, if AKCEA-ANGPTL3-L_Rx can effectively lower triglyceride levels in FCS patients, it may likewise reduce the revenue we derive from WAYLIVRA.

If we cannot manufacture our drugs or contract with a third party to manufacture our drugs at costs that allow us to charge competitive prices to buyers, we will not be able to operate profitably. *

To successfully commercialize TEGSEDI, and WAYLIVRA for FCS in the E.U. and, if approved, WAYLIVRA in the United States or Canada and for additional indications_, AKCEA-TTR-L_Rx and our other drugs in development, we will need to optimize and manage large-scale commercial manufacturing capabilities either on our own or through a third-party manufacturer. In addition, as our drug development pipeline matures, we will have a greater need for clinical study and commercial manufacturing capacity. We have no direct experience manufacturing pharmaceutical products of the chemical class represented by our drugs, called oligonucleotides, on a commercial scale for the systemic administration of a drug. We currently rely and expect to rely for the foreseeable future on Ionis' manufacturing capacity and efficiency and the capacity and efficiency of third parties to produce our oligonucleotide drugs, and our business could be negatively affected if Ionis and these third parties ceased to provide us with this capability for any reason. In addition, there are a small number of suppliers for certain raw materials that we use to manufacture our drugs, and some of these suppliers will need to increase their scale of production to meet our projected needs for commercial manufacturing. Further, if we cannot continue to acquire raw materials from these suppliers on commercially reasonable terms or at all, we may be required to find alternative suppliers, which could be expensive and time consuming and negatively affect our ability to develop or commercialize our drugs in a timely manner or at all. We may not be able to manufacture our drugs at a cost or in quantities necessary to make commercially successful products.

We do not have long-term supply agreements for our drugs. We cannot guarantee that we will have a steady supply of drug to complete clinical studies, make registration batches for approval or satisfy market demand if commercialized at prices that are commercially acceptable. In addition, if we need to change manufacturers for any reason, we will need to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines. The delays associated with verifying a new manufacturer could negatively affect our ability to develop drugs in a timely manner or within budget.

Also, manufacturers must adhere to the FDA's current Good Manufacturing Practices regulations and similar regulations in foreign countries, which the applicable regulatory authorities enforce through facilities inspection programs. Our contract manufacturers may not comply or maintain compliance with Good Manufacturing Practices, or similar foreign regulations. Non-compliance could significantly delay or prevent receipt of marketing authorization for our drugs, including authorizations for WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, or result in enforcement action after authorization that could limit the commercial success of our drugs, including WAYLIVRA, TEGSEDI, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development.

We depend on Ionis and third parties to conduct our clinical studies for our drugs and any failure of those parties to fulfill their obligations could adversely affect our development and commercialization plans.

We depend on Ionis and independent clinical investigators, contract research organizations and other third-party service providers to conduct the clinical studies for our drugs and expect to continue to do so in the future. For example, we use clinical research organizations for the clinical studies for WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development. We rely heavily on these parties for successful execution of our clinical studies, but do not control many aspects of their activities. For example, the investigators are not our employees. However, we are responsible for ensuring that these third parties conduct each of our clinical studies in accordance with the general investigational plan, approved protocols for the study and applicable regulations. Ionis and third parties may not complete activities on schedule or may not conduct our clinical studies in accordance with regulatory requirements or our stated protocols. The failure of these parties to carry out their obligations or a termination of our relationship with these third parties could delay or prevent the development, marketing authorization and commercialization of our drugs, including authorizations for WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development.

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We may seek to form additional partnerships in the future with respect to WAYLIVRA, and our other drugs in development, and we may not realize the benefits of such partnerships.*

Although we intend to continue developing and commercializing WAYLIVRA for patients with FCS and FPL ourselves, we may form partnerships, create joint ventures or collaborations or enter into licensing arrangements with third parties for the development and commercialization of our drugs in development. For example, we have granted PTC Therapeutics an exclusive license to commercialize WAYLIVRA in Latin America and certain Caribbean countries. We face significant competition in seeking appropriate strategic partners and the negotiation process is time-consuming and complex. Any delays in entering into new strategic partnership agreements related to our drugs could delay the development and commercialization of our drugs and reduce their competitiveness even if they reach the market. Moreover, we may not be successful in our efforts to establish other strategic partnerships or other collaborative arrangements for any additional drugs because the potential partner may consider that our development pipeline is not advanced enough to justify a collaborative effort, or that WAYLIVRA and our other drugs in development do not have the requisite potential to demonstrate safety and efficacy in the target populations in other geographic markets. In addition, we will need to mutually agree with Ionis on the terms of any additional sublicenses to a third party for WAYLIVRA and our other drugs in development. If we cannot mutually agree on terms for a sublicense to a third party or if Ionis does not agree to a sublicense at all, it could delay our ability to develop and commercialize WAYLIVRA and our other drugs in development. Even if we are successful in establishing such a strategic partnership or collaboration, we cannot be certain that, following such a strategic transaction or collaboration, we will be able to progress the development and commercialization of the applicable drugs as envisioned, or that we will achieve the revenue that would justify such transaction. If we do not accurately evaluate the commercial potential or target market for a particular drug, we may relinquish valuable rights to that drug through future collaboration, licensing or other arrangements in cases in which it would have been more advantageous for us to retain sole development and commercialization rights.

Risks Related to Our Relationship with Ionis

Ionis controls the direction of our business, and the concentrated ownership of our common stock will prevent you and other stockholders from influencing significant decisions. *

As of October 31, 2019, Ionis owns 70,221,338 shares of our common stock, or approximately 75 percent, of the economic interest and voting power of our outstanding common stock as of October 31, 2019, which ownership will be expected to increase further if we achieve certain milestone events and pay the associated milestone payment in shares of common stock pursuant to the payment election. As long as Ionis beneficially controls a majority of the voting power of our outstanding common stock, it will generally be able to determine the outcome of all corporate actions requiring stockholder approval, including the election and removal of directors. Even if Ionis were to control less than a majority of the voting power of our outstanding common stock, it may influence the outcome of such corporate actions so long as it owns a significant portion of our common stock. If Ionis continues to hold its shares of our common stock, it could remain our controlling stockholder for an extended period of time or indefinitely.

The licensing transaction with Ionis and the common stock issuances in connection with the achievement of the TEGSEDI regulatory milestones has increased Ionis’ ownership percentage, and this increase, along with Ionis’ increased reliance on Akcea as a commercialization partner, given that Akcea will be commercializing at least two Ionis-developed products (WAYLIVRA and TEGSEDI), may increase the length of time during which Ionis will control us. As a general matter, the TEGSEDI license agreement and the related Investor Rights Agreement increased Ionis’ control over our affairs. In addition, our TEGSEDI licensing agreement requires Ionis’ consent to the budget related to the commercialization of TEGSEDI and AKCEA-TTR-L_Rx.

Ionis' interests may not be the same as, or may conflict with, the interests of our other stockholders. You will not be able to affect the outcome of any stockholder vote while Ionis controls the majority of the voting power of our outstanding common stock. As a result, Ionis can control, directly or indirectly and subject to applicable law, all matters affecting us, including:

• any determination with respect to our business strategy and policies, including the appointment and removal of officers and directors;

• any determinations with respect to mergers, business combinations or disposition of assets;

• our financing and dividend policy;

• compensation and benefit programs and other human resources policy decisions;

• termination of, changes to or determinations under our existing license agreements and services agreement with Ionis;

• changes to any other agreements that may adversely affect us; and

• determinations with respect to our tax returns.

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Because Ionis' interests may differ from ours or yours, actions that Ionis takes with respect to us, as our controlling stockholder, may not be favorable to us or you.

As a “controlled company” under the marketplace rules of the Nasdaq Stock Market, we may rely on exemptions from certain corporate governance requirements that provide protection to stockholders of companies that are subject to such requirements.

Ionis beneficially owns more than 50% of the voting power of our outstanding common stock. As a result, we are a “controlled company” under the marketplace rules of the Nasdaq Stock Market, or Nasdaq, and eligible to rely on exemptions from Nasdaq corporate governance requirements generally obligating listed companies to maintain:

• A board of directors having a majority of independent directors;

• A compensation committee composed entirely of independent directors that approves the compensation payable to the company’s chief executive officer and other executive officers; and

• A nominating committee composed entirely of independent directors that nominates candidates for election to the board of directors, or that recommends such candidates for nomination by the board of directors (or obligating the listed company to cause a majority of the board’s independent directors to exercise this oversight of director nominations).

Currently, a majority of our board is made up of independent directors. As a controlled company, we have and in the future may avail ourselves of some of these exemptions. Accordingly, our stockholders may not have the same protections afforded to stockholders of companies that are subject to the Nasdaq corporate governance requirements described above.

If Ionis sells a controlling interest in our company to a third party in a private transaction, you may not realize a change of control premium on shares of our common stock, and we may become subject to the control of a presently unknown third party.

Ionis owns a significant equity interest in our company. This means that Ionis could choose to sell some or all of its shares of our common stock in a privately negotiated transaction, which, if sufficient in size, could result in a change of control of our company.

Ionis' ability to privately sell its shares of our common stock, with no requirement for a concurrent offer to be made to acquire your shares of our common stock, could prevent you from realizing any change of control premium on your shares of our common stock that may otherwise accrue to Ionis on its private sale of our common stock. Additionally, if Ionis privately sells its significant equity interest in our company, we may become subject to the control of a presently unknown third party. Such third party may have conflicts of interest with those of other stockholders. In addition, if Ionis sells a controlling interest in our company to a third party, such a sale could negatively impact or accelerate any future indebtedness we may incur, and negatively impact any other commercial agreements and relationships, all of which may adversely affect our ability to run our business as described herein and may have a material adverse effect on our operating results and financial condition.

Certain of our directors and officers may have actual or potential conflicts of interest because of their positions with Ionis.*

Joseph “Skip” Klein, III, a board member for Ionis, and B. Lynne Parshall, Senior Strategic Advisor and board member for Ionis, serve on our board of directors and retain their positions or engagements with Ionis. In addition, Damien McDevitt, Ph.D. was the Chief Business Officer of Ionis until he was appointed as our interim Chief Executive Officer. These individuals own Ionis equity and Ionis equity awards. Their relationship with Ionis and the ownership of any Ionis equity or equity awards creates, or may create the appearance of, conflicts of interest when we ask these individuals to make decisions that could have different implications for Ionis than the decisions have for us. In addition, our certificate of incorporation provides for the allocation of certain corporate opportunities between us and Ionis. Under these provisions, neither Ionis or its other affiliates, nor any of their officers, directors, agents or stockholders, will have any obligation to present to us certain corporate opportunities. For example, a director of our company who also serves as a director, officer or employee of Ionis or any of its other affiliates may present to Ionis certain acquisitions, in-licenses, potential development programs or other opportunities that may be complementary to our business and, as a result, such opportunities may not be available to us. To the extent attractive corporate opportunities are allocated to Ionis or its other affiliates instead of to us, we may not be able to benefit from these opportunities.

The resources Ionis provides us under the license agreements and the services agreement may not be sufficient for us to operate as a standalone company, and we may experience difficulty in separating our resources from Ionis.

Because we have not operated separately from Ionis in the past, we may have difficulty doing so. We will need to acquire resources in addition to, and eventually in lieu of, those provided by Ionis to our company, and may also face difficulty in separating our resources from Ionis' resources and integrating newly acquired resources into our business. In addition, Ionis may prioritize its own research, development, manufacturing and other needs ahead of the services Ionis has agreed to provide us, or Ionis employees who conduct services for us may prioritize Ionis' interests over our interests. Our business, financial condition and results of operations could be harmed if we have difficulty operating as a standalone company, fail to acquire resources that prove to be important to our operations or incur unexpected costs in separating our resources from Ionis' resources or integrating newly acquired resources.

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We may not realize the benefits of the licensing transaction with Ionis if we are unable to successfully transition, integrate and support the development and commercialization of TEGSEDI and AKCEA-TTR-L_Rx.

As a result of the licensing transaction with Ionis, we need to successfully transition, integrate and support the assets we acquired related to the commercialization and development of TEGSEDI and AKCEA-TTR-L_Rx if we are to realize any of the potential benefits of the licensing transaction. The failure to meet these integration challenges, including the addition of TEGSEDI commercial team and other employees from Ionis and the coordination across geographies between our headquarters in Massachusetts and our commercialization team in other locations, including major global markets, could seriously harm our results of operations. Our failure to implement an orderly integration could result in failure of, or delays in, the development or commercialization of TEGSEDI and AKCEA-TTR-L_Rx. Such failure or delay could adversely impact our business, results of operations, financial condition and prospects for future growth.

We will incur incremental costs as a standalone company.

Ionis currently performs or supports many important corporate functions for our company. Our condensed consolidated financial statements reflect charges for these services on an allocation basis. Under our services agreement with Ionis we can use these Ionis services for a fixed term established on a service-by-service basis. However, we generally will have the right to terminate a service earlier if we give notice to Ionis. Partial reduction in the provision of any service requires Ionis' consent. In addition, either party will be able to terminate the agreement due to a material breach of the other party, upon prior written notice, subject to limited cure periods.

We will pay Ionis mutually agreed upon fees for these services, based on Ionis' costs of providing the services. Since we negotiated the services agreement in the context of a parent subsidiary relationship, the terms of the agreement, including the fees charged for the services, may be higher or lower than those that would be agreed to by parties bargaining at arm's length for similar services and may be higher or lower than the costs reflected in the allocations in our historical condensed consolidated financial statements. Ionis will pass third party costs through to us at Ionis' cost. In addition, while Ionis provides us these services, our operational flexibility to modify or implement changes with respect to such services or the amounts we pay for them will be limited.

We may not be able to replace these services or enter into appropriate third-party agreements on terms and conditions, including cost, comparable to those that we will receive from Ionis under our services agreement. Additionally, after the agreement terminates, we may not sustain the services at the same levels or obtain the same benefits as when we were receiving such services and benefits from Ionis. When we begin to operate these functions separately, if we do not have our own adequate systems and business functions in place, or cannot obtain them from other providers, we may not operate our business effectively or at comparable costs, and our business may suffer. In addition, we have historically received informal support from Ionis, which may not be addressed in our services agreement. The level of this informal support will diminish and could end in the future.

We may not be able to fully realize the expected benefits of our license agreements with Ionis.

We have development, commercialization and license agreements with Ionis pursuant to which, subject to certain restrictions, we and Ionis will share development responsibilities for WAYLIVRA, TEGSEDI, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development. We are paying for research and development costs and reimbursing Ionis for Ionis' employees supporting our development activities. Until we build or acquire our own capabilities to replace those Ionis is providing to us, particularly development, regulatory and manufacturing services, we will be heavily dependent on Ionis.

While we and Ionis intend the license agreements, on the whole, to bolster our capabilities, certain terms of the license agreements and the other related agreements with Ionis may limit our ability to achieve the expected benefits of these transactions, including:

• a Joint Steering Committee, or JSC, having equal membership from us and Ionis, sets the development strategy for our drugs by mutual agreement. A Regulatory Sub-committee, established by the JSC and having equal membership from our company and Ionis, will set the regulatory strategy for each of our drugs by mutual agreement. If the JSC or the Regulatory Sub-committee cannot come to a mutual agreement, then this could delay our ability to develop and commercialize TEGSEDI, AKCEA-TTR-L_Rx and our other drugs in development. In the event of a disagreement at the JSC related to TEGSEDI or AKCEA-TTR-L_Rx, Ionis has final decision-making authority on decisions relating to development matters, Akcea has final decision making authority on decision relating to commercial matters, and the holder of the regulatory approvals for a product in a country has final decision making authority for regulatory affairs;

• we will need to mutually agree with Ionis on the terms of any additional sublicense to a third party for WAYLIVRA and AKCEA-ANGPTL-L_Rx, and will need to obtain Ionis’ consent prior to granting any sublicense to a third party for TEGSEDI or AKCEA-TTR-L_Rx. If we cannot mutually agree on terms for a sublicense to a third party or if Ionis does not consent to a sublicense at all, it could delay or prevent our ability to develop and commercialize our drugs;

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• we will need to obtain Ionis’ approval to in-license a product, acquire a product or acquire another company, until the time Ionis ceases to hold at least 50% of our outstanding capital stock; and

• there is nothing in our agreements with Ionis to prevent Ionis from developing and commercializing drugs targeting RNAs that are not apoC-III, Apo(a), ANGPTL3 or TTR to pursue the same indications we are pursuing with our drugs.

Each of the foregoing terms and Ionis' other rights under the license agreements, could limit our ability to realize the expected benefits of the license agreements or otherwise limit our ability to pursue transactions or development efforts other stockholders may view as beneficial. Further, if Ionis does not continue to own a significant portion of our equity, Ionis' incentive to help us would be diminished. If we fail to achieve the expected benefits of our agreements with Ionis, it may be more difficult, time consuming or expensive for us to develop and commercialize WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development and continue the commercialization of TEGSEDI, or may result in our drugs being later to market than those of our competitors or prevent them from ever getting to market. If these events cause delays in new product development we could lose the first in class products in a given therapeutic area.

Risks Related to Our Intellectual Property

If we breach our obligations under any of our license agreements with Ionis, we could lose our rights to WAYLIVRA, TEGSEDI, AKCEA-TTR-L_Rx and our other drugs in development.

We obtained our rights to WAYLIVRA, TEGSEDI, AKCEA-TTR-L_Rx and our other drugs in development under our license agreements with Ionis. If we breach our obligations under these license agreements and, as a result, Ionis subsequently exercises its right to terminate it, we generally would not be able to continue to develop or commercialize TEGSEDI, WAYLIVRA, AKCEA-TTR-L_Rx and our other drugs in development that incorporate Ionis' intellectual property, and Ionis would receive a royalty-free, nonexclusive license to our improvements to those programs, meaning we would lose the benefits of our investment in these programs. If we breach our obligations under the license agreement with respect to AKCEA-APO(a)-L_Rx or AKCEA-APOCIII-L_Rx and, as a result, Ionis exercises its right to terminate it, then our strategic collaboration with Novartis would convert into a direct strategic collaboration between Novartis and Ionis, and Ionis would receive all of the revenue and other benefits associated with that strategic collaboration. Similarly, if we breach our obligations under the license agreement with respect to TEGSEDI or AKCEA-TTR-L_Rx and, as a result, Ionis exercises its right to terminate it, then our strategic collaboration with PTC Therapeutics in Latin America and certain Caribbean countries would convert into a direct strategic collaboration between PTC Therapeutics and Ionis, and Ionis would receive all of the revenue and other benefits associated with that strategic collaboration.

If we cannot protect our patent rights or our other proprietary rights, others may compete more effectively against us.

Our success depends to a significant degree upon whether we can continue to secure and maintain intellectual property rights that protect TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development. However, patents may not issue from any of our pending patent applications in the United States or in other countries and we may not be able to obtain, maintain or enforce our owned or licensed patents and other intellectual property rights which could impact our ability to compete effectively. In addition, the scope of any of our owned or licensed patents may not be sufficiently broad to provide us with a competitive advantage. Furthermore, other parties may successfully challenge, invalidate or circumvent our issued patents or patents licensed to us so that our patent rights do not create an effective competitive barrier or revenue source.

Composition of matter patents on the active pharmaceutical ingredient for a product are generally considered to be the strongest form of intellectual property protection for pharmaceutical products, as such patents provide protection without regard to any method of use. Our WAYLIVRA patent portfolio currently includes:

• issued patent claims to the specific antisense sequence and chemical composition of WAYLIVRA in the United States, Australia, and Europe;

• issued patent claims in the United States and Australia drawn to the use of antisense compounds complementary to an active region of human apoC-III messenger ribonucleic acid, including the site targeted by WAYLIVRA;

• additional patent applications designed to protect the WAYLIVRA composition in Canada; and

• additional methods of use in jurisdictions worldwide for WAYLIVRA.

The natural term of the issued U.S. patent covering the WAYLIVRA composition of matter will expire in 2023, but we plan to seek to extend the U.S. patent expiration beyond 2023 based upon the development and regulatory review period in the United States. The natural term of the granted European and Australian patents covering WAYLIVRA will expire in 2024, but we plan to seek to extend each of these patents beyond 2024 based upon the development and regulatory review periods in Europe and Australia.

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The natural term of the last expiring issued U.S. patent covering the composition of matter of TEGSEDI will expire in 2031. Patents issued in other countries will have the same natural term. We plan to seek to extend the term of one patent covering TEGSEDI in the U.S., and any other jurisdictions where such extension is available, based upon the development and regulatory review periods for TEGSEDI and in accordance with applicable laws.

We cannot be certain that the U.S. Patent and Trademark Office, or U.S. PTO, and courts in the United States or the patent offices and courts in foreign countries will consider the claims in our owned or licensed patents and applications covering WAYLIVRA, TEGSEDI, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development as patentable. Method-of-use patents protect the use of a product for the specified method. This type of patent does not prevent a competitor from making and marketing a product that is identical to our product for an indication that is outside the scope of the patented method. Moreover, even if competitors do not actively promote their product for our targeted indications, physicians may prescribe these products off-label. Although off-label prescriptions may infringe or contribute to the infringement of method-of-use patents, the practice is common and such infringement is difficult to prevent, including through legal action.

If we or any licensor partner loses or cannot obtain patent protection for TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx or our other drugs in development it could have a material adverse impact on our business.

Intellectual property litigation could cause us to spend substantial resources and prevent us from pursuing our programs.

From time to time we may have to defend our intellectual property rights. If we are involved in an intellectual property dispute, we may need to litigate to defend our rights or assert them against others. Disputes can involve arbitration, litigation or proceedings declared by the U.S. PTO or the International Trade Commission or foreign patent authorities. Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities. In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments and if securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock. Such litigation or proceedings could substantially increase our operating losses and reduce the resources available for development activities or any future sales, marketing or distribution activities. We may not have sufficient financial or other resources to adequately conduct such litigation or proceedings. Some of our competitors may be able to sustain the costs of such litigation or proceedings more effectively than we can because of their greater financial resources and more mature and developed intellectual property portfolios.

Third parties may initiate legal proceedings alleging that we are infringing their intellectual property rights, the outcome of which would be uncertain and could have a material adverse effect on the success of our business.

Our commercial success depends upon our ability and the ability of our strategic partners to develop, manufacture, market and sell our drugs and use our proprietary technologies without infringing the proprietary rights and intellectual property of third parties. Extensive litigation regarding patents and other intellectual property rights is common in the biotechnology and pharmaceutical industries. We may in the future become party to, or threatened with, adversarial proceedings or litigation regarding intellectual property rights with respect to our drugs and technology, including interference, derivation, reexamination, post-grant review, opposition, cancellation or similar proceedings before the U.S. PTO or its foreign counterparts.

Third parties may assert infringement claims against us based on existing patents or patents that may be granted in the future. For example, a potential competitor was issued a patent which they have broadly characterized in their annual report on Form 10-K for the year ended December 31, 2018 as being directed to single-stranded antisense polynucleotide molecules capable of inhibiting expression of the human transthyretin gene, and having certain combinations of structural features. This third party has also attempted to broadly characterize certain other patents that they hold. While we believe that we would have substantial defenses in the event this competitor brought a claim against us with respect to TEGSEDI or AKCEA-TTR-L_Rx, patent litigation is inherently uncertain, involves substantial cost and is a distraction to management. Moreover, our stock price may be impacted by the existence of or developments during a litigation, even developments that are preliminary in nature.

We may not be aware of all such intellectual property rights potentially relating to our drugs and their uses. If a third party claims that WAYLIVRA, TEGSEDI, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx, our other drugs in development or our technology infringe its patents or other intellectual property rights, we or our partners may have to discontinue an important product or product line, alter our products and processes, pay license fees or cease certain activities. We may not be able to obtain a license to needed intellectual property on favorable terms, if at all. There are many patents issued or applied for in the biotechnology industry, and we may not be aware of patents or patent applications held by others that relate to our business. This is especially true since patent applications in the United States are filed confidentially for the first 18 months. Moreover, the validity and breadth of biotechnology patents involve complex legal and factual questions for which important legal issues remain. Thus, we do not know with certainty that our drugs or our intended commercialization thereof, does and will not infringe or otherwise violate any third party's intellectual property.

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We will not seek to protect our intellectual property rights in all jurisdictions throughout the world and we may not be able to adequately enforce our intellectual property rights even in the jurisdictions where we seek protection.

Filing, prosecuting and defending patents on our drugs in all countries and jurisdictions throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States could be less extensive than those we could obtain in the United States. In addition, the laws of some foreign countries do not protect intellectual property rights to the same extent as laws in the United States. Consequently, we may not be able to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing products made using our inventions in and into the United States or other jurisdictions.

Competitors may use our technologies in jurisdictions where we do not pursue and obtain patent protection to develop their own products. In addition, competitors may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that in the United States. These products may compete with our products and our patent rights or other intellectual property rights may not be effective or sufficient to prevent them from competing. Even if we pursue and obtain issued patents in particular jurisdictions, our patent claims or other intellectual property rights may not be effective or sufficient to prevent third parties from so competing.

The laws of some foreign countries do not protect intellectual property rights to the same extent as the laws of the United States. Many companies have encountered significant problems in protecting and defending intellectual property rights in certain foreign jurisdictions. The legal systems of some countries, particularly developing countries, do not favor the enforcement of patents and other intellectual property protection, especially those relating to biotechnology. This could make it difficult for us to stop competitors from infringing our patent rights or misappropriating our other intellectual property rights. For example, many foreign countries have compulsory licensing laws under which a patent owner must grant licenses to third parties. In addition, many countries limit our right to enforce our patent rights against third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. We must ultimately seek patent protection on a country-by-country basis, which is an expensive and time-consuming process with uncertain outcomes. Accordingly, we may choose not to seek patent protection in certain countries, and we will not have the benefit of patent protection in such countries.

In addition, proceedings to enforce our patent rights in foreign jurisdictions could result in substantial costs and divert our efforts and attention from other aspects of our business, could put our patent rights at risk of being invalidated or interpreted narrowly, could put our owned or licensed patent applications at risk of not issuing and could provoke third parties to assert claims against us. We may not prevail in any lawsuits that we initiate and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.

If we do not obtain additional protection under the Hatch-Waxman Amendments and similar foreign legislation by extending the patent protection for TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx, and our other drugs in development, our business may be materially harmed.

Depending upon the timing, duration and specifics of the first FDA marketing authorization of TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx, and our other drugs in development, a United States patent that we own or license may be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, referred to as the Hatch-Waxman Amendments. The Hatch-Waxman Amendments allow the owner of an approved product to extend patent protection for up to five years as compensation for patent term lost during product development and the FDA regulatory review process. During this period of extension, the scope of protection is limited to the approved product and approved uses.

In 2018 we applied for patent term extensions to U.S. patents covering the TEGSEDI compound, composition and uses to recapture a portion of the term lost during regulatory review. Although we have applied for patent term extension for TEGSEDI, and plan on seeking patent term restoration for our other products, we may not succeed if, for example, we fail to apply within applicable deadlines, fail to apply prior to expiration of relevant patents or otherwise fail to satisfy applicable requirements. Moreover, the applicable time period or the scope of patent protection afforded could be less than we request. If we cannot obtain patent term restoration or the term of any such patent restoration is less than we request, our competitors may enter the market and compete against us sooner than we anticipate, and our ability to generate revenue could be materially adversely affected.

Changes in United States patent law could diminish the value of patents in general, thereby impairing our ability to protect our products.

Recent United States Supreme Court rulings have narrowed the scope of patent protection available in certain circumstances and weakened the rights of patent owners in certain situations. In addition to increasing uncertainty with regard to our ability to obtain patents in the future, this combination of events has created uncertainty with respect to the value of patents, once obtained. Depending on decisions by the United States Congress, the federal courts, and the U.S. PTO, the laws and regulations governing patents could change in unpredictable ways that would weaken our ability to obtain new patents or to enforce our existing patents and patents that we might obtain in the future.

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If we and our partners do not adequately protect the trademarks and trade names for our products, then we and our partners may not be able to build name recognition in our markets of interest and our business may be adversely affected.

Our competitors or other third parties may challenge, infringe or circumvent the trademarks or trade names for our products. We and our partners may not be able to protect these trademarks and trade names. In addition, if the trademarks or trade names for one of our products infringe the rights of others, we or our partners may be forced to stop using the trademarks or trade names, which we need for name recognition in our markets of interest. If we cannot establish name recognition based on our trademarks and trade names, we and our partners may not be able to compete effectively, and our business may be adversely affected.

Intellectual property rights do not necessarily address all potential threats to our competitive advantage.

The degree of future protection afforded by our intellectual property rights is uncertain because intellectual property rights have limitations, and may not adequately protect our business, or permit us to maintain our competitive advantage. The following examples are illustrative:

• others may make compounds that are similar to our drugs but that are not covered by the claims of the patents that we own or have exclusively licensed;

• we, or our license partners or current or future strategic partners, might not have been the first to make the inventions covered by the issued patent or pending patent application that we own or have exclusively licensed;

• we, or our license partners or current or future strategic partners, might not have been the first to file patent applications covering our inventions;

• others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights;

• our pending licensed patent applications or those that we own in the future may not lead to issued patents;

• issued patents that we hold rights to may be held invalid or unenforceable, including as a result of legal challenges by our competitors;

• our competitors might conduct research and development activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products for sale in our major commercial markets;

• we may not develop additional proprietary technologies that are patentable; and

• the patents of others may have an adverse effect on our business.

Should any of these events occur, they could significantly harm our business, results of operations and prospects.

Risks Related to Our Business and Industry*

We will need to significantly increase the size of our organization, and we may experience difficulties in managing growth.

We are currently a small company. To continue the commercialization of TEGSEDI and commercialize our drugs in development that we are responsible for commercializing, we will need to increase our operations and expand our use of third-party contractors. We plan to continue to build our compliance, financial and operating infrastructure to ensure the maintenance of a well-managed company including hiring additional staff within our regulatory, clinical and medical affairs groups and an in-house commercial organization initially focused on marketing and selling TEGSEDI and WAYLIVRA. We have added a significant number of new employees to our sales and marketing capability to commercialize TEGSEDI.

We may also anticipate needs for growth that do not materialize. For example, in anticipation of WAYLIVRA’s potential approval, we added a significant number of new employees to our sales and marketing capability to develop WAYLIVRA in the second half of 2017. However, as a result of our receipt of a complete response letter, or CRL, from the FDA regarding the new drug application for WAYLIVRA, on September 6, 2018, we enacted a plan to reorganize our workforce to better align with the immediate needs of our business. In connection with this reorganization plan, we reduced our workforce by approximately 12%. If WAYLIVRA is subsequently approved in the United States, we will again need to increase our operations and expand our use of third-party contractors. We cannot assure you that we will not build out our compliance, financial or operating infrastructure again in anticipation of developments that do not occur or that occur later than we anticipate.

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The current and future growth will impose significant added responsibilities on our management, including the need to maintain, integrate, optimize and manage additional employees. In addition, to meet our obligations as a public company, we will need to increase our general and administrative capabilities. Our current management, personnel and systems may not be adequate to support this growth. Our future financial performance and our ability to commercialize our drugs and to compete effectively will depend, in part, on our ability to manage any future growth effectively. To that end, we must be able to:

• manage the manufacturing of our drugs for clinical and commercial use;

• integrate current and additional management, administrative, financial and sales and marketing personnel;

• optimize and manage a marketing and sales infrastructure;

• maintain personnel necessary to effectively commercialize TEGSEDI and WAYLIVRA and our other drugs in development;

• manage our clinical studies and the regulatory process effectively;

• develop our administrative, accounting and management information systems and controls; and

• hire and train additional qualified personnel.

Our staff, financial resources, systems, procedures or controls may be inadequate to support our operations and our management may be unable to successfully manage future market opportunities or our relationships with customers and other third parties.

If we do not progress in our programs as anticipated, the price of our securities could decrease.

For planning purposes, we estimate and may disclose the timing of a variety of clinical, regulatory and other milestones, such as when we anticipate a certain drug will enter into clinical trials, when we anticipate completing a clinical study, when we anticipate filing an application for marketing authorization, or when we or our partners plan to commercially launch a drug. We base our estimates on present facts and a variety of assumptions. Many underlying assumptions are outside of our control. If we do not achieve milestones in accordance with our or our investors' or securities analysts' expectations, including milestones related to WAYLIVRA, TEGSEDI, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development, the price of our securities could decrease.

The loss of key personnel, or if we cannot attract and retain highly skilled personnel, could make it more difficult to run our business and reduce our likelihood of success.

We are dependent on the principal members of our management and scientific staff. We do not have employment agreements with any of our executive officers that would prevent them from leaving us. The loss of management and key scientific employees might slow the achievement of important research and development goals. It is also critical to our success that we recruit and retain qualified scientific personnel to perform development work and marketing, sales and commercial support personnel to perform commercialization activities. We may not be able to attract and retain skilled and experienced scientific and commercial personnel on acceptable terms because of intense competition for experienced personnel among many pharmaceutical and health care companies, universities and non-profit research institutions. In addition, failure to successfully complete clinical studies, obtain regulatory approvals or effectively commercialize drugs may make it more challenging to recruit and retain qualified personnel.

We have experienced significant turnover in our top executives, and our business could be adversely affected by these and other transitions in our senior management team or if any of the resulting vacancies cannot be filled with qualified replacements in a timely manner. *

In September and October 2019, several changes occurred to our senior leadership team, including the departure of our Chief Executive Officer, President, and Chief Operating Officer and the appointment of an interim Chief Executive Officer and Chief Commercial Officer. The effectiveness of the senior leadership team following these transitions, new leaders as they fill in these roles, and any further transition as a result of these changes, could have a significant impact on our results of operations. In addition, as a result of this turnover, our remaining management team has taken on increased responsibilities, which could divert attention from key business areas, and several key management roles remain vacant.

Management transition is often difficult and inherently causes some loss of institutional knowledge, which could negatively affect our results of operations and financial condition. Our ability to execute our business strategies may be adversely affected by the uncertainty associated with these transitions and the time and board and management attention needed to fill the vacant roles could disrupt our business. If we are unable to successfully identify and attract adequate replacements for the vacancies in our management roles in a timely manner, we could experience increased employee turnover and harm to our business, growth, financial conditions, results of operations and cash flows. We face significant competition for executives with the qualifications and experience we are seeking. The search for replacements for these positions is also likely to result in significant recruiting and relocation costs, and we can give no assurances concerning the timing or outcome of our search for these replacements.

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Further, we cannot guarantee that we will not face similar turnover in the future. Our senior management’s knowledge of our business and industry would be difficult to replace, and any further turnover could negatively affect our business, growth, financial conditions, results of operations and cash flows.

We are exposed to potential product liability claims, and insurance against these claims may not be available to us at a reasonable rate in the future or at all.

Our business exposes us to potential product liability risks that are inherent in the testing, manufacturing, marketing and sale of therapeutic products, including potential product liability claims related to TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development. We have clinical study insurance coverage and commercial product liability insurance coverage. In addition, Novartis has agreed to indemnify us against specific claims arising from Novartis' development and commercialization of AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx, and PTC Therapeutics has agreed to indemnify us against specific claims arising from PTC Therapeutics’ commercialization of TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries. However, this insurance coverage and indemnities may not be adequate to cover claims against us. Insurance may not be available to us at an acceptable cost, if at all. Regardless of their merit or eventual outcome, products liability claims may result in decreased demand for our drug products, injury to our reputation, withdrawal of clinical study volunteers and loss of revenue. Thus, whether or not we are insured or indemnified, a product liability claim or product recall may result in losses that could be material.

Because we use biological materials, hazardous materials, chemicals and radioactive compounds, if we do not comply with laws regulating the protection of the environment and health and human safety, our business could be adversely affected.

Our development and manufacturing activities involve the use of potentially harmful biological materials as well as materials, chemicals and various radioactive compounds that could be hazardous to human health and safety or the environment. We cannot completely eliminate the risk of contamination, which could cause:

• interruption of our development, manufacturing and distribution efforts;

• injury to our employees and others;

• environmental damage resulting in costly clean up; and

• liabilities under federal, state and local laws and regulations governing health and human safety, as well as the use, storage, handling and disposal of these materials and resultant waste products.

In such an event, we may be held liable for any resulting damages, and any liability could exceed our resources. Although we carry insurance in amounts and types that we consider commercially reasonable, we do not have insurance coverage for losses relating to an interruption of our development, manufacturing or commercialization efforts caused by contamination, and the coverage or coverage limits of our insurance policies may not be adequate. If our losses exceed our insurance coverage, our financial condition would be adversely affected.

A variety of risks associated with operating our business and marketing our drugs internationally could materially adversely affect our business. *

In addition to our U.S. operations, we are commercializing TEGSEDI in Europe and Canada, and WAYLIVRA in the E.U. and, following approval, plan to establish operations to commercialize our products in other countries globally. We face risks associated with our current and planned international operations, including possible unfavorable regulatory, pricing and reimbursement, political, tax and labor conditions, which could harm our business. Because we have international operations we are subject to numerous risks associated with international business activities, including:

• compliance with differing or unexpected regulatory requirements for our drugs and foreign employees;

• complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems;

• difficulties in staffing and managing foreign operations;

• in certain circumstances, increased dependence on the commercialization efforts and regulatory compliance of third-party distributors or strategic partners;

• foreign government taxes, regulations and permit requirements;

• U.S. and foreign government tariffs, trade restrictions, price and exchange controls and other regulatory requirements;

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• anti-corruption laws, including the Foreign Corrupt Practices Act, or the FCPA, and its equivalent in foreign jurisdictions;

• economic weakness, including inflation, natural disasters, war, events of terrorism or political instability in particular foreign countries;

• fluctuations in currency exchange rates, which could result in increased operating expenses and reduced revenue, and other obligations related to doing business in another country;

• compliance with tax, employment, privacy, immigration and labor laws, regulations and restrictions for employees living or traveling abroad;

• workforce uncertainty in countries where labor unrest is more common than in the United States; and

• changes in diplomatic and trade relationships.

The United Kingdom’s anticipated exit from the E.U. could increase these risks.

Our business activities outside of the United States are subject to the FCPA and similar anti-bribery or anti-corruption laws, regulations or rules of other countries in which we operate, including the United Kingdom's Bribery Act 2010. In many other countries, the healthcare providers who prescribe pharmaceuticals are employed by their government, and the purchasers of pharmaceuticals are government entities; therefore, any dealings with these prescribers and purchasers may be subject to regulation under the FCPA. There is no certainty that all employees and third-party business partners (including our distributors, wholesalers, agents, contractors and other partners) will comply with anti-bribery laws. In particular, we do not control the actions of manufacturers and other third-party agents, although we may be liable for their actions. Violation of these laws may result in civil or criminal sanctions, which could include monetary fines, criminal penalties, and disgorgement of past profits, which could have a material adverse impact on our business and financial condition.

The impact on us of the vote by the United Kingdom to leave the European Union cannot be predicted. *

On June 23, 2016, the United Kingdom, or the UK, voted to leave the E.U. in an advisory referendum, which is generally referred to as Brexit. On March 29, 2017, the UK delivered notice under Article 50 of the Lisbon Treaty of its intent to leave the E.U., beginning a two-year negotiation period for the UK and the 27 remaining members of the E.U. to reach agreement on the terms of Brexit. To date, no formal withdrawal agreement has been reached between the UK and the E.U., despite the passage of the date on which it was expected that the UK's membership in the E.U. would automatically terminate. Given that no formal withdrawal arrangements have been agreed, there have been several extensions to the Brexit date and the UK has yet to formally leave the E.U.  On October 28, 2019, the E.U. granted the UK a further extension to the Brexit date until January 31, 2020. Under the terms of the extension, the Brexit date may be earlier than January 31, 2020, if a formal withdrawal agreement is ratified by the UK Parliament. In addition, the UK will hold a general election on December 12, 2019. Until the post-election government is formed, there can be no guarantee or certainty as to which form Brexit will take and on which terms a withdrawal agreement with the E.U. will be agreed, if at all.

The UK is a significant pharmaceutical market, and Brexit may lead to legal uncertainty and potentially divergent laws and regulations between the UK and the E.U. as the UK determines which E.U. laws to replicate or replace. We cannot predict whether or not the UK will significantly alter its current laws and regulations in respect of the pharmaceutical industry and, if so, what impact any such alteration would have on us or our business.

In addition, as a result of Brexit, the EMA, formerly situated in London, relocated to Amsterdam. There is a risk that the relocation will interrupt current administrative routines and occupy resources, which may generally adversely affect our dealings with the EMA. Further, there is considerable uncertainty resulting from a lack of precedent and the complexity of the UK and E.U.’s intertwined legal regimes as to how Brexit will impact the life sciences industry in Europe, including our company, including with respect to ongoing or future clinical trials. The impact will largely depend on the model and means by which the UK’s relationship with the E.U. is governed post‑Brexit. For example, following Brexit, the UK will no longer be covered by the centralized procedures for obtaining E.U.-wide marketing authorization from the EMA and, unless a specific agreement is entered into, a separate process for authorization of drug products, including our product candidates, will be required in the UK, the potential process for which is currently unclear. Brexit may adversely affect and delay our ability to commercialize, market and sell our product candidates in the UK. Brexit may also result in a reduction of funding to the EMA if the UK no longer makes financial contributions to European institutions, such as the EMA. If UK funding is so reduced, it could create delays in the EMA issuing regulatory approvals for our product candidates and, accordingly, have a material adverse effect on our business, financial condition, results or prospects.

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If a natural or man-made disaster strikes our development or manufacturing facilities or otherwise affects our business, it could delay our progress developing and commercializing our drugs.

We currently rely on Ionis to manufacture our clinical supplies and commercial supply of active pharmaceutical ingredient for WAYLIVRA in a manufacturing facility located in Carlsbad, California and third-party contract manufacturing organizations to manufacture drug product. For TEGSEDI, Akcea relies on third-party contract manufacturing organizations to manufacture active pharmaceutical ingredient and finished drug product. The facilities and the equipment required to develop and manufacture our drugs would be costly to replace and could require substantial lead time to repair or replace. Natural or man-made disasters, including, without limitation, earthquakes, floods, fires and acts of terrorism may harm these facilities. If a disaster affects these facilities, our and our partners' development and commercialization efforts would be delayed. Although we possess insurance for damage to our property and the disruption of our business from casualties, this insurance may not be sufficient to cover all of our potential losses and may not continue to be available to us on acceptable terms, or at all. In addition, a shutdown of the U.S. government, including the FDA could harm or delay our development and commercialization activities.

Our business and operations would suffer in the event of computer system failures.

We are dependent upon our own or third-party information technology systems, infrastructure and data, including mobile technologies, to operate our business. The multitude and complexity of our computer systems may make them vulnerable to service interruption or destruction, disruption of data integrity, malicious intrusion, or random attacks. Likewise, data privacy or security incidents or breaches by employees or others may pose a risk that sensitive data, including our intellectual property, trade secrets or personal information of our employees, patients, customers or other business partners may be exposed to unauthorized persons or to the public. Cyber-attacks are increasing in their frequency, sophistication and intensity. Cyber-attacks could include the deployment of harmful malware, denial-of-service, social engineering and other means to affect service reliability and threaten data confidentiality, integrity and availability. Our business partners face similar risks and any security breach of their systems could adversely affect our security posture. A security breach or privacy violation that leads to disclosure or modification of or prevents access to patient information, including personally identifiable information or protected health information, could harm our reputation, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, require us to verify the correctness of database contents and otherwise subject us to litigation or other liability under laws and regulations that protect personal data, any of which could disrupt our business and/or result in increased costs or loss of revenue. Moreover, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches, which could lead to the loss of confidential information, trade secrets or other intellectual property. While we have invested, and continue to invest, in the protection of our data and information technology infrastructure, there can be no assurance that our efforts will prevent service interruptions, or identify breaches in our systems, that could adversely affect our business and operations and/or result in the loss of critical or sensitive information, which could result in financial, legal, business or reputational harm to us. In addition, our liability insurance may not be sufficient in type or amount to cover us against claims related to security breaches, cyber-attacks and other related breaches.

Risks Related to Our Common Stock

We are an "emerging growth company" and as a result of the reduced disclosure and governance requirements applicable to emerging growth companies, our common stock may be less attractive to investors.

We are an "emerging growth company," as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We cannot predict if investors will find our common stock less attractive if we choose to rely on these exemptions. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

An active public trading market for our common stock may not be sustained. *

Prior to the completion of our IPO in July 2017, no public market for our common stock existed. An active public trading market for our common stock may not be sustained. The lack of an active market may impair your ability to sell your shares at the time you wish to sell them or at a price that you consider reasonable. The lack of an active market may also reduce the fair value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares. Additionally, as of October 31, 2019, Ionis owned approximately 75 percent of our outstanding common stock. Ionis intends to hold its shares of our common stock for the foreseeable future, which could reduce the public market for our stock.

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The market price for our common stock may be volatile, which could contribute to the loss of your investment.

Fluctuations in the price of our common stock could contribute to the loss of all or part of your investment. There has been a public market for our common stock for a limited period of time. The trading price of our common stock is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. Any of the factors listed below could have a material adverse effect on your investment in our common stock and our common stock may trade at prices significantly below your purchase price. In such circumstances the trading price of our common stock may not recover and may experience a further decline.

Factors affecting the trading price of our common stock may include:

• our failure to effectively develop and commercialize TEGSEDI, WAYLIVRA and our other drugs in development;

• Novartis' failure to exercise its option and/or effectively develop and commercialize AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx to the extent it exercises its option to license those drugs from us;

• PTC Therapeutics’ failure to effectively commercialize TEGSEDI or WAYLIVRA in Latin America and certain Caribbean countries;

• changes in the market's expectations about our operating results;

• adverse results or delays in preclinical or clinical studies;

• our decision to initiate a clinical study, not to initiate a clinical study or to terminate an existing clinical study;

• adverse regulatory decisions, including failure to receive additional regulatory approvals for TEGSEDI or WAYLIVRA, or regulatory approval for AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development;

• success or failure of competitive products or antisense drugs more generally;

• adverse developments concerning our manufacturers or our strategic partnerships;

• inability to obtain adequate product supply for any drug for clinical studies or commercial sale or inability to do so at acceptable prices;

• the termination of a strategic partnership or the inability to establish additional strategic partnerships;

• unanticipated serious safety concerns related to the use of TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development;

• adverse safety or other clinical results, such as those that have occurred in the past or that may occur in the future, related to drugs being developed by Ionis or other companies that are or may be perceived to be similar to our drugs;

• our ability to effectively manage our growth;

• the size and growth, if any, of the targeted market;

• our operating results do not meet the expectation of securities analysts or investors in a particular period;

• actual or anticipated fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

• securities analysts do not publish reports about us or our business or publish negative reports;

• changes in financial estimates and recommendations by securities analysts concerning our company, our market opportunity, or the biotechnology and pharmaceutical industries in general;

• operating and stock price performance of other companies that investors deem comparable to us;

• overall performance of the equity markets;

• announcements by us or our competitors of acquisitions, new drugs or programs, significant contracts, commercial relationships or capital commitments;

• our and our strategic partners' ability to successfully market TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development;

• changes in laws and regulations affecting our business, including but not limited to clinical study requirements for approvals;

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• disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain and maintain patent protection for TEGSEDI, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx and our other drugs in development;

• commencement of, or involvement in, litigation involving our company, our general industry, or both;

• changes in our capital structure, such as future issuances of securities or the incurrence of additional debt;

• the volume of shares of our common stock available for public sale;

• additions or departures of key scientific or management personnel;

• any major change in our board or management;

• changes in accounting practices;

• ineffectiveness of our internal control over financial reporting;

• significant changes in our relationship with Ionis;

• sales of substantial amounts of common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; and

• general economic and political conditions such as recessions, interest rates, fuel prices, elections, drug pricing policies, international currency fluctuations and acts of war or terrorism.

Broad market and industry factors may materially harm the market price of our common stock irrespective of our operating performance. The stock market in general, and NASDAQ and the market for biotechnology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of the particular companies affected. The trading prices and valuations of these stocks, and of ours, may not be predictable. A loss of investor confidence in the market for biotechnology or pharmaceutical stocks or the stocks of other companies which investors perceive to be similar to us, the opportunities in the biotechnology and pharmaceutical market or the stock market in general, could depress our stock price regardless of our business, prospects, financial conditions or results of operations.

Sales of a substantial number of shares of our common stock by our existing stockholders in the public market may cause our stock price to decline. *

Sales of our common stock in the public market, or the perception that these sales may occur, could cause the market price of our common stock to decline. Novartis, who owns 6,250,000 shares of common stock, has agreed that it will not sell any of its shares until the earlier of January 5, 2020 or six months after we stop developing a drug under our agreement with Novartis. Thereafter, Novartis may only sell a limited number of shares each day. In addition, as of October 31, 2019 Ionis owned 70,221,338 shares, or approximately 75 percent, of our common stock. While the shares of common stock held by Ionis are eligible for sale in the public market, any sales by Ionis will be subject to volume limitations under Rule 144 under the Securities Act of 1933, as amended, or the Securities Act. In addition, 18,500,000 shares of common stock that are either subject to outstanding options or reserved for future issuance under our employee benefit plans are eligible for sale in the public market to the extent permitted by the provisions of various vesting schedules, the lock-up agreements and Rule 144 and Rule 701 under the Securities Act. To the extent the holders of these shares sell them into the market or our stockholders believe these sales might occur, the market price of our common stock could decline.

We cannot predict with certainty whether or when Ionis will sell a substantial number of shares of our common stock. Ionis' sale of a substantial number of shares, or a perception that such sales could occur, could significantly reduce the market price of our common stock.

We do not expect to pay any cash dividends for the foreseeable future.

You should not rely on an investment in our common stock to provide dividend income. We do not anticipate that we will pay any cash dividends to holders of our common stock in the foreseeable future. Instead, we plan to retain any earnings to maintain and expand our operations. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any return on their investment. As a result, investors seeking cash dividends should not purchase our common stock.

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Changes in tax laws, regulations and treaties could affect our future taxable income.

A change in tax laws, treaties or regulations, or their interpretation, of any country in which we operate could materially affect us.  For Example, on December 22, 2017, the United States enacted H.R.1., known as the Tax Cuts and Jobs Act, which represented a substantial change to tax laws in the United States, but which did not have a material impact on our financial statements because we maintain a valuation allowance on all our net operating losses and other deferred tax assets.  However, any future changes in tax laws in any U.S. or non-U.S jurisdictions could have a material effect on our business.

We could be subject to additional tax liabilities.

We are subject to U.S. federal, state, local and sales taxes in the United States and foreign income taxes, withholding taxes and transaction taxes in foreign jurisdictions. Significant judgment is required in evaluating our tax positions and our worldwide provision for taxes. During the ordinary course of business, there are many activities and transactions for which the ultimate tax determination is uncertain. In addition, our tax obligations and effective tax rates could be adversely affected by changes in the relevant tax, accounting and other laws, regulations, principles and interpretations, including those relating to income tax nexus, by recognizing tax losses or lower than anticipated earnings in jurisdictions where we have lower statutory rates and higher than anticipated earnings in jurisdictions where we have higher statutory rates, by changes in foreign currency exchange rates, or by changes in the valuation of our deferred tax assets and liabilities. We may be audited in various jurisdictions, and such jurisdictions may assess additional taxes, sales taxes and value-added taxes against us. Although we believe our tax estimates are reasonable, the final determination of any tax audits or litigation could be materially different from our historical tax provisions and accruals, which could have a material adverse effect on our operating results or cash flows in the period for which a determination is made.

We could be subject to securities class action litigation.

In the past, securities class action litigation has often been brought against a company following a decline in the market price of its securities. This risk is especially relevant for us because biotechnology companies have experienced significant stock price volatility in recent years. If we face such litigation, it could result in substantial costs and a diversion of management's attention and resources, which could harm our business.

Provisions in our amended and restated certificate of incorporation, our amended and restated bylaws and Delaware law may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our stockholders, and may prevent attempts by our stockholders to replace or remove our current management.*

Our amended and restated certificate of incorporation, amended and restated bylaws and Delaware law contain provisions that may have the effect of delaying or preventing a change in control of us or changes in our management. Our amended and restated certificate of incorporation and bylaws include provisions that:

• authorize "blank check" preferred stock, which could be issued by our board of directors without stockholder approval and may contain voting, liquidation, dividend and other rights superior to our common stock;

• specify that only board of directors or holders of greater than 10% of our common stock can call special meetings of our stockholders;

• prohibit stockholder action by written consent once Ionis no longer holds a majority of our voting power;

• establish an advance notice procedure for stockholder approvals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors;

• provide that a majority of directors then in office, even though less than a quorum, may fill vacancies on our board of directors;

• specify that no stockholder is permitted to cumulate votes at any election of directors;

• expressly authorize our board of directors to modify, alter or repeal our amended and restated bylaws; and

• require supermajority votes of the holders of our common stock to amend specified provisions of our amended and restated certificate of incorporation and amended and restated bylaws.

These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our management.

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In addition, because we are incorporated in the State of Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law, which limits the ability of stockholders owning in excess of 15% of our outstanding voting stock to merge or combine with us.

Any provision of our amended and restated certificate of incorporation or amended and restated bylaws or Delaware law that has the effect of delaying or deterring a change in control could limit your opportunity to receive a premium for your shares of our common stock, and could also affect the price that some investors are willing to pay for our common stock.

Our bylaws designate the Court of Chancery of the State of Delaware and federal court within the State of Delaware as the exclusive forum for certain types of actions and proceedings that our stockholders may initiate, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our bylaws provide that, subject to limited exceptions, the Court of Chancery of the State of Delaware and federal court within the State of Delaware will be exclusive forums for any:

• derivative action or proceeding brought on our behalf;

• action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders;

• action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, our amended and restated certificate of incorporation or our amended and restated bylaws; or

• other action asserting a claim against us that is governed by the internal affairs doctrine.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our bylaws described above. This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition. This choice of forum provision does not apply to suits brought to enforce a duty or liability created by the Securities Act or the Exchange Act, or any claim for which the federal courts have exclusive jurisdiction.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) Recent Sales of Unregistered Equity Securities

We did not issue or sell any unregistered equity securities during the period covered by this Report.

(b) Use of Proceeds

Not applicable.

(c) Issuer Purchase of Equity Securities

Not applicable.

ITEM 3. DEFAULT UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Separation Agreements between Akcea Therapeutics, Inc. and each of Paula Soteropoulos, Sarah Boyce and Jeffrey M. Goldberg

As reported in our Current Report on Form 8-K filed with the SEC on September 23, 2019, on September 18, 2019, Paula Soteropoulos, Sarah Boyce and Jeffrey M. Goldberg each entered into a Separation Agreement that terminated their respective employment and, with respect to Ms. Soteropoulos and Ms. Boyce, their positions on our board of directors, effective September 18, 2019. Under Ms. Soteropoulos’s Separation Agreement, Ms. Soteropoulos will receive medical benefit continuation, a lump sum severance payment equal to 15 months of her then-current base salary, and will be entitled to “net exercise” and acquire ownership of the resulting net number of shares of our common stock subject to her vested options. Under Mr. Goldberg’s Separation Agreement, Mr. Goldberg will receive medical benefit continuation, a lump sum severance payment equal to 12 months of his then-current base salary, and will be entitled to “net exercise” and acquire ownership of the resulting net number of shares of our common stock subject to his vested options. Under Ms. Boyce’s Separation Agreement, Ms. Boyce will receive medical benefit continuation and a lump sum severance payment equal to 12 months of her then-current base salary.

In addition, on September 18, 2019, we entered into Consulting Agreements with Ms. Soteropoulos and Mr. Goldberg. Pursuant to Ms. Soteropoulos’s Consulting Agreement, which was amended on October 30, 2019, she agreed to provide up to 20 hours per week of consulting services following her separation date through November 4, 2019 to assist with the transition of her duties and responsibilities, and in consideration of such consulting services, we have agreed to pay Ms. Soteropoulos a consulting retainer in the amount of $125,000, paid in installments during such consulting period, and continue the vesting of any equity awards outstanding as of her separation date through the end of such consulting period. All equity awards vested at the end of such consulting period will be exercisable through the 90th day after the end of such consulting period. Pursuant to our Consulting Agreement with Mr. Goldberg, he agreed to provide up to 20 hours per week of consulting services following his separation date through October 31, 2019 to assist with the transition of his duties and responsibilities, and in consideration of such consulting services, we have agreed to pay Mr. Goldberg a consulting retainer in the amount of $100,000, paid in installments during such consulting period, and continue the vesting of any equity awards outstanding as of his separation date through the end of such consulting period. All equity awards vested at the end of such consulting period will be exercisable through the 90th day after the end of such consulting period.

The foregoing summaries of the Separation Agreements and the Consulting Agreements are qualified in their entirety by reference to the Separation Agreements with each of Paula Soteropoulos, Sarah Boyce and Jeffrey M. Goldberg, the Consulting Agreement with Paula Soteropoulos, as amended, and the Consulting Agreement with Jeffrey M. Goldberg, which are filed herewith as Exhibits 10.5, 10.6, 10.7, 10.8, 10.9 and 10.10, respectively.

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Appointments of Interim Chief Executive Officer, Chief Commercial Officer and Members of Board of Directors

On September 18, 2019, Damien McDevitt, Ph.D., a member of our board of directors, was appointed as interim Chief Executive Officer, effective immediately. In addition, Michael J. Yang and Joseph ‘Skip’ Klein III joined our board of directors, effective September 20, 2019.

On October 21, 2019, Kyle Jenne, our U.S. commercial head, was promoted to and appointed as our Chief Commercial Officer, effectively immediately.

Submission of Matters to a Vote of Security Holders

Our board of directors has determined to hold the 2020 annual meeting of stockholders, or the 2020 annual meeting, on April 13, 2020, at a time and location to be specified in the Company’s information statement for the 2020 annual meeting. Our board of directors has fixed the close of business on February 28, 2020 as the record date for determining stockholders of the Company who are entitled to vote at the 2020 annual meeting. Because the date of the 2020 annual meeting has been changed by more than 30 days from the anniversary of the Company’s 2019 annual meeting of stockholders, pursuant to Rule 14a-8 under the Exchange Act, stockholders of the Company who wish to have a proposal considered for inclusion in the Company’s information statement materials for the 2020 annual meeting pursuant to Rule 14a-8 must ensure that their proposal is received by the Company by February 7, 2020, which the Company has determined to be a reasonable time before it expects to begin to distribute its information statement materials. Rule 14a-8 proposals must also comply with the requirements of Rule 14a-8 and other applicable laws in order to be eligible for inclusion in the Company’s information statement materials for the 2020 annual meeting. Pursuant to the Company’s bylaws, for nominations or other business to be properly brought by a stockholder at the 2020 annual meeting, the stockholder must give timely written notice thereof in writing to the secretary of the Company at our principal executive offices. Because the date of the 2020 annual meeting will be held more than 30 days from the anniversary of our 2019 annual meeting of stockholders, in accordance with the Company’s bylaws, the deadline for notice by a stockholder is December 15, 2019.

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ITEM 6. EXHIBITS

a. Exhibits

		Incorporated by Reference
Exhibit	Description	Schedule / Form	File Number	Exhibit	File Date
10.1+	Offer Letter, by and between Akcea Therapeutics, Inc. and Damien McDevitt, dated September 19, 2019	8-K	File No. 001-38137	10.1	September 23, 2019
10.2+	Offer Letter, by and between Akcea Therapeutics, Inc. and Kyle Jenne, dated October 15, 2019	8-K	File No. 001-38137	10.1	October 23, 2019
10.3+	Severance Benefit Agreement, by and between Akcea Therapeutics, Inc. and Damien McDevitt, dated September 19, 2019	8-K	File No. 001-38137	10.2	September 23, 2019
10.4+	Severance Benefit Agreement, by and between Akcea Therapeutics, Inc. and Kyle Jenne, dated October 21, 2019	8-K	File No. 001-38137	10.2	October 23, 2019
10.5+*	Separation Agreement, by and between Akcea Therapeutics, Inc. and Paula Soteropoulos, dated September 18, 2019
10.6+*	Separation Agreement, by and between Akcea Therapeutics, Inc. and Sarah Boyce, dated September 18, 2019
10.7+*	Separation Agreement, by and between Akcea Therapeutics, Inc. and Jeffrey M. Goldberg, dated September 18, 2019
10.8+*	Consulting Agreement, by and between Akcea Therapeutics, Inc. and Paula Soteropoulos, dated September 18, 2019
10.9+*	Amendment to Consulting Agreement, by and between Akcea Therapeutics, Inc. and Paula Soteropoulos, dated October 30, 2019
10.10+*	Consulting Agreement, by and between Akcea Therapeutics, Inc. and Jeffrey M. Goldberg, dated September 18, 2019
10.11+	Severance Benefit Agreement, by and between Akcea Therapeutics, Inc. and Mike MacLean, dated October 11, 2019	8-K	File No. 001-38137	10.1	October 17, 2019
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	The following financial statements from the Akcea Therapeutics, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2019, formatted in Extensive Business Reporting Language (XBRL): (i) condensed consolidated balance sheets, (ii) condensed consolidated statements of operations, (iii) condensed consolidated statements of comprehensive loss, (iv) condensed consolidated statements of stockholders' equity, (v) condensed consolidated statements of cash flows and (vi) notes to condensed consolidated financial statements (detail tagged).

* Filed herewith.

+ Indicates management contract or compensatory plan.

** This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

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77

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned thereunto duly authorized.

AKCEA THERAPEUTICS, INC.

Signatures	Title	Date
/s/ DAMIEN MCDEVITT	Interim Chief Executive Officer
Damien McDevitt	(on behalf of the Registrant and in his capacity as principal executive officer)	November 6, 2019
/s/ MICHAEL MACLEAN	Chief Financial Officer
Michael MacLean	(on behalf of the Registrant and in his capacity as principal financial and accounting officer)	November 6, 2019

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EX-10.10

Exhibit 10.10

AKCEA THERAPEUTICS, INC.

CONSULTING AGREEMENT

(“SUMMARY PAGE”)

Date of Consulting Agreement: (“Agreement”)	September 18, 2019 (“Effective Date”).
Name of Consultant:	Jeffrey M. Goldberg (hereinafter “Consultant”).
Scope of Consulting Services:	Assistance with the transition of his duties and responsibilities as former Chief Operating Officer, pursuant to a scope of work agreed to by Consultant and Akcea in a separate writing (and such other transition activities agreed by Consultant and Akcea)
Field in which Consulting Services to be provided (the “Field”):	Corporate consulting
Duration of Consulting Services (the “Consulting Period”):	Effective Date through October 31, 2019
Consideration for Consulting Services:	$100,000 paid by Akcea to Consultant in installments during the Consulting Period as follows: (i) $50,000 on the Effective Date; (ii) $25,000 on October 9, 2019, and (iii) $25,000 on October 31, 2019; provided, that if this Agreement is terminated by Consultant prior to any given payment date, then such payment will not be due and payable to Consultant but if this Agreement is terminated by the Company prior to any given payment date, then such payment will be payable to Consultant on a pro rata basis for the number of days when this Agreement was effective over the total number of days from the immediately prior payment to the next payment.
Time Provided by Consultant:	Up to 20 hours per week

In addition to such compensation, Akcea Therapeutics, Inc. (“Akcea”) will reimburse Consultant for Akcea approved travel and other out-of-pocket costs reasonably incurred in the course of performing services under this Agreement in accordance with Akcea’s standard expense reimbursement policy.  Consultant will provide Akcea with receipts for all such costs.

[Signatures on Following Page]

Consultant agrees to provide Akcea with Consulting Services on the terms described above and according to the additional terms attached hereto as Exhibit A.

	Consultant	Akcea Therapeutics, Inc.
By (Signature):	/s/ Jeffrey M. Goldberg	/s/ Sandford D. Smith
Date:
Printed Name:	Jeffrey M. Goldberg	Sandford D. Smith
Title:		Compensation Committee Chairman
Address:		22 Boston Wharf Road, 9th Floor
		Boston, MA 02210
Telephone:		617-207-0202
e-mail:

Social Security or Employer Tax ID Number to be provided separately via W-9 form or foreign equivalent.

EXHIBIT A

TERMS OF CONSULTING AGREEMENT

1. Engagement of Services

Consultant is retained to perform certain services, as needed and requested by Akcea, which services are specifically described on the Summary Page (“Consulting Services”).  Consultant will perform such Consulting Services to the best of Consultant’s talent and ability.  

2. Compensation

As full and complete compensation for Consulting Services and for the discharge of all of Consultant's obligations hereunder, Akcea will pay Consultant at the rate set forth on the Summary Page. Consultant will invoice Akcea on a monthly basis for any reimbursable expenses, and Akcea, upon its approval, will pay all undisputed expenses within 30 days after Akcea’s receipt of the invoice. In addition, as long as Consultant continues to provide Consulting Services under this Agreement, Consultant’s Akcea Common Stock Options will continue to vest through the end of the Consulting Period in accordance with the terms of such Stock Option Agreements.  Thereafter, such Stock Options will stop vesting and will expire in accordance with the terms of such Stock Options.

3. Independent Contractor

Consultant is an independent contractor and not an employee of Akcea. Consultant has no authority to obligate Akcea by contract or otherwise. Consultant will not be eligible for any employee benefits.  Taxes will be the sole responsibility of Consultant.

4. Confidential Information

(a) Akcea possesses confidential information that has been created, discovered, developed by, or otherwise become known to Akcea (including, without limitation, information created, discovered, developed or made known by Consultant arising from the Consulting Services).

(i) All such information is hereinafter referred to as “Confidential Information.”  By way of illustration, but not limitation, Confidential Information includes:  (A) inventions, developments, designs, improvements, trade secrets, ideas, formulas, source and object codes, programs, other works of authorship, organisms, plasmids, expression vectors, know-how, processes, cell lines, discoveries, techniques, data and documentation systems (hereinafter collectively referred to as “Inventions”); and (B) information regarding plans for research, development, new products, clinical data, pre-clinical product data, clinical trial patient data, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, as well as information regarding the skills and compensation of employees of Akcea.  

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(ii) All Confidential Information will be the sole property of Akcea and its assigns, and Akcea and its assigns will be the sole owner of all patents, copyrights and other rights in connection with such Confidential Information.  At all times, both during the term of this Agreement and for five years after its termination, Consultant will keep in confidence and trust all Confidential Information and will not use, disclose, lecture upon or publish any Confidential Information or anything related to such information without Akcea’s prior written consent.  Any permitted disclosures will be made in strict compliance with the Akcea publication and presentation clearance policy.

(b) Consultant also understands that Akcea has received and in the future will receive valuable information from third parties that is confidential or proprietary (“Third-Party Information”) subject to a duty on the part of Akcea to maintain the confidentiality of such information and to use it only for certain limited purposes.  During the term of this Agreement and for five years thereafter, Consultant will hold Third-Party Information in the strictest confidence and will not disclose or use Third-Party Information except as permitted by the agreement between Akcea and such third party, unless expressly authorized to act otherwise by an officer of Akcea in writing.  Any permitted disclosures will be made in strict compliance with Akcea publication and presentation clearance policy.

(c) The obligations of Section 4 will not apply to information that Consultant can establish by written records: (i) was known by Consultant prior to the receipt of Confidential Information; (ii) was disclosed to Consultant by a third party having the right to do so; (iii) was, or subsequently became, in the public domain through no fault of Consultant, its officers, directors, affiliates employees or agents; (iv) was independently developed by Consultant without use of Confidential Information; or (v) was disclosed by Consultant pursuant to any judicial, governmental or stock exchange request, requirement or order, so long as Consultant provided Akcea with sufficient prior notice in order to allow Akcea to contest such request, requirement or order.

(d) Notwithstanding the foregoing, Consultant may recuse himself from any Consulting Services reasonably likely to result in Consultant’s receipt of material, non-public information regarding Akcea, and Akcea will endeavor to prevent the disclosure to Consultant of any material, non-public information regarding Akcea.  

5. Inventions

In the course of performing Consulting Services for Akcea, Consultant may develop new ideas or Inventions or make other contributions of value to Akcea.

(a) Consultant hereby assigns to Akcea Consultant's entire right, title and interest in and to any and all Inventions (and all patent rights, copyrights, and all other rights in connection therewith, hereinafter referred to as “Proprietary Rights”) whether or not patentable or registrable under patent, copyright or similar statutes, made or conceived of or reduced to practice or learned by Consultant, either alone or jointly with others, as a result of performing Consulting Services hereunder.  All Inventions assigned to Akcea pursuant to this section will be known as “Company Inventions”. Consultant agrees that all Proprietary Rights and Company Inventions are Akcea’s sole property. Consultant agrees, upon request, to execute,

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verify and deliver assignments of such Proprietary Rights to Akcea or its designee.  Consultant understands that, to the extent this Agreement will be construed in accordance with the laws of any state which precludes a requirement in an agreement to assign certain classes of inventions made by an individual acting as a Consultant, this section will be interpreted not to apply to any inventions that a court rules and/or Akcea agrees falls within such classes.

(b) Consultant further agrees to assist Akcea in every proper way to obtain, from time to time, and to enforce United States and foreign Proprietary Rights relating to Company Inventions in any and all countries. To that end Consultant will execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as Akcea may reasonably request for use in applying for, obtaining, sustaining and enforcing such Proprietary Rights relating to Company Inventions.  Consultant's obligation to assist Akcea in obtaining and enforcing Proprietary Rights relating to Company Inventions in any and all countries will continue beyond the termination of this Agreement, but Akcea will compensate Consultant at a reasonable rate after such termination for the time actually spent by Consultant at Akcea's request in connection with such assistance.  If Akcea is unable, after reasonable effort, to secure Consultant's signature on any document needed to apply for or prosecute any Proprietary Rights relating to a Company Invention, Consultant hereby irrevocably designates and appoints Akcea and its duly authorized officers and agents as his/her agent and attorney in fact, to act for and on Consultant’s behalf to execute, verify and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of any such Proprietary Rights with the same legal force and effect as if executed by Consultant.

(c) During the term of this Agreement, Consultant will promptly disclose to Akcea, or any persons designated by it, fully and in writing and will hold in trust for the sole right and benefit of Akcea any and all Company Inventions, whether or not patentable or protectable by copyright.  At the time of each such disclosure, Consultant will advise Akcea in writing of any Inventions that Consultant believes are not subject to the assignment provisions of Section 5(a) above, and Consultant will at that time provide to Akcea in writing all evidence necessary to substantiate that belief. Consultant will not be obligated to disclose information received by Consultant from others under a contract of confidentiality.  In addition, after termination of this Agreement, Consultant will disclose to Akcea all patent applications filed by Consultant relating to any Company Inventions or relating to any work performed by Consultant on behalf of Akcea.

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6. Previous Consulting Relationships

Consultant represents that Consultant's performance of Consulting Services, as well as Consultant’s  performance of the rest of Consultant’s obligations under the terms of this Agreement, will not breach any agreement to keep in confidence any proprietary information acquired by Consultant in confidence or in trust from another entity prior to the date of this Agreement.  Consultant agrees not to bring to Akcea or to use in the performance of Consulting Services for Akcea any materials or documents of a present or former employer or client of Consultant, or any materials or documents obtained by Consultant under a confidentiality agreement imposed by reason of another of Consultant's consulting relationships, unless such materials or documents are generally available to the public or Consultant has authorization from such present or former employer or client for the possession and unrestricted use of such materials.

7. Termination

The term of this Agreement will coincide with the duration of the Consulting Period.  The duration of the Consulting Period (and thus the term of this Agreement) may be extended only if both parties agree to an extension in writing, signed by both Consultant and an authorized officer of Akcea.  Each party understands and agrees that the other party has the absolute right to terminate this Agreement, at any time and for whatever reason, prior to the expiration of the Consulting Period, so long as such party provides the other party with written notice of such termination as set forth in Section 9(f).  If this Agreement terminates prior to the end of the Consulting Period, Akcea will pay Consultant for any Consulting Services appropriately rendered and for any out of pocket expenses reasonably incurred on behalf of Akcea, up to and including the termination notification date, pursuant to the criteria set forth in Section 2 of this Agreement.

8. Arbitration

(a) Akcea and Consultant agree to resolve by arbitration all disputes, claims or controversies (“Claims”), past, present or future, whether or not arising out of this Agreement or its termination, that Akcea may have against Consultant or that Consultant may have against any of the following (i) Akcea; (ii) Akcea officers, directors; employees or agents; (iii) Akcea’s parent; subsidiary or affiliated entities, joint ventures, or joint employers; (iv) Akcea’s benefit plans or the plans’ sponsors, fiduciaries, administrators, affiliates and agents; and/or (v) all successors and assigns of any of the foregoing.  The Claims covered by this Agreement include all disputes that Akcea or Consultant could otherwise pursue in state or federal court including, but not limited to, Claims based on any state, federal, or local statute, regulation or ordinance (including Claims for discrimination, retaliation, harassment, unpaid wages or violation of state or federal wage and hour laws), as well as common law Claims (including Claims for breach of contract, breach of the implied covenant of good faith and fair dealing, wrongful discharge, defamation, misrepresentation, fraud, or infliction of emotional distress). Akcea and Consultant anticipates that this Section 8 provides the benefits of a speedy, less formal, impartial, final and binding dispute resolution procedure.

(b) To the maximum extent permitted by law, Consultant hereby waives any right to bring on behalf of persons other than Consultant, or to otherwise participate with other persons in, any class, collective or representative action (i.e. a type of lawsuit in which one or several persons sue on behalf of a larger group of persons).

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(c) The arbitration will be conducted by a single neutral arbitrator in accordance with the then-current Commercial Arbitration and Mediation Procedures of the American Arbitration Association (“AAA”).  The arbitration will take place in Boston, Massachusetts.  Akcea will pay the arbitrator’s fee and will bear all administrative charges by AAA.  All parties will be entitled to engage in reasonable pre-hearing discovery to obtain information to prosecute or defend the asserted claims.  Any disputes between the parties regarding the nature or scope of discovery will be decided by the arbitrator.  The arbitrator will hear and issue a written ruling upon any dispositive motions brought by either party, including but not limited to, motions for summary judgment or summary adjudication of issues.  After the hearing, the arbitrator will issue a written decision setting forth the award, if any, and explaining the basis therefore.  The arbitrator will have the power to award any type of relief that would be available in court. The arbitrator’s award will be final and binding upon the parties and may be entered as a judgment in any court of competent jurisdiction.  If there is conflict in the arbitration procedures set forth in this Agreement and the AAA rules specified above, the AAA rules will control.  Notwithstanding the foregoing, and regardless of what is provided by the AAA rules, the arbitrator will not have authority or jurisdiction to consolidate claims of different individuals or entities into one proceeding, nor will the arbitrator have authority or jurisdiction to hear the arbitration as a class action.  As noted above, Consultant has agreed to waive any right to bring any class, collective or representative action.  To the extent that the class, collective or representative action waiver described above is not enforceable, the issue of whether to certify any alleged or putative class for a class action proceeding must be decided by a court of competent jurisdiction.  The arbitrator will not have authority or jurisdiction to decide class certification, collective or representative action issues.  Until any class certification, collective, or representative action issues are decided by the court, all arbitration proceedings will be stayed, and the arbitrator will take no action with respect to the matter.  However, once any issues regarding class certification, collective, or representative action have been decided by the court, the arbitrator will have authority to decide the substantive claims.

9. Miscellaneous

(a) Upon expiration or termination of this Agreement, each party will be released from all obligations and liabilities to the other occurring or arising after the date of such expiration or termination, except that any termination or expiration of this Agreement will not relieve Consultant of Consultant’s obligations under Sections 4, 5, 6, 7 and 8 hereof, nor will any such expiration or termination relieve Consultant or Akcea from any liability arising from any breach of this Agreement.  Upon expiration or termination of this Agreement for any reason whatsoever, Consultant will promptly surrender and deliver to Akcea any and all laboratory notebooks, conception notebooks, drawings, notes, memoranda, specifications, devices, formulas, molecules, cells, storage media, including calculations, sequences, data and other materials of any nature pertaining to Consulting Services for Akcea, as well as any documents or data of any description (or any reproduction of any documents or data) containing or pertaining to any Trade Secret Information, Akcea’s Confidential Information or Third Party Information.

(b) The rights and liabilities of the parties hereto will bind and inure to the benefit of their respective successors, heirs, executors and administrators, as the case may be; provided that,

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as Akcea has specifically contracted for Consultant's services, Consultant may not assign or delegate Consultant's obligations under this Agreement either in whole or in part without Akcea’s prior written consent.

(c) Because Consultant's services are personal and unique and because Consultant may have access to and become acquainted with Akcea’s Confidential Information, Akcea has the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that Akcea may have for a breach of this Agreement.

(d) This Agreement will be governed by and construed according to the laws of the State of Delaware as such laws are applied to contracts entered into and performed entirely within such State.  If any provision of this Agreement is held to be or becomes invalid, illegal or unenforceable, such provision will be validly reformed to approximate as nearly as possible the intent of the parties and the remainder of this Agreement will not be affected thereby and will remain valid and enforceable to the greatest extent permitted by law.

(e) This Agreement, and all other documents mentioned herein, constitute the final, exclusive and complete understanding and agreement of the parties hereto and supersedes all prior understandings and agreements.  Any waiver, modification or amendment of any provision of this Agreement will be effective only if in writing and signed by the parties hereto.

(f) Any notices required or permitted hereunder will be given to the appropriate party at the address specified on the Summary Page or at such other address as the party will specify in writing.  Such notice will be deemed given upon personal delivery to the appropriate address, or by facsimile transmission (receipt verified and with confirmation copy followed by another permitted method), sent by express courier service, or, if sent by certified or registered mail, three (3) days after the date of mailing.

[END OF EXHIBIT A]

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EX-10.5

Exhibit 10.5

SEPARATION AGREEMENT

This Separation Agreement (this “Agreement”) by and between Paula Soteropoulos (“Employee”) and Akcea Therapeutics, Inc., a Delaware corporation (the “Company”), is made and entered into as of September 18, 2019 (the “Execution Date”) and is effective eight (8) days thereafter (the “Effective Date”), unless Employee rescinds her acceptance of this Agreement as provided in Section 5 below, with reference to the following facts:

The Company and Employee are parties to the Offer Letter between Company and Employee, dated November 17, 2014 (the “Offer Letter”) and the Severance and Equity Award Vesting Acceleration Letter dated November 20, 2017 (the “Severance Letter”);

Executive signed an Employee Confidential Information, Inventions Assignment, Non-Competition and Non-Solicitation Agreement with the Company dated November 2018, a copy of which is attached as Exhibit A (the “Non-Competition Agreement”), which contains certain restrictive covenants, applicable before and after the term of her employment with the Company, including a non-competition and non-solicitation covenant and a covenant against the disclosure of confidential information of the Company;

The Employee’s employment with the Company shall terminate effective as of September 18, 2019 (the “Separation Date”), subject to the terms and conditions set forth in this Agreement; and

The Employee and Company desire to enter into this Agreement to memorialize the terms and conditions of Employee’s separation from the Company;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereby agree as follows:

1.Separation Date.  Employee’s employment with the Company shall end on the Separation Date. Following the Separation Date, Employee shall not be and shall not represent herself as an employee or agent of the Company. As of the Execution Date, Employee shall be deemed to have resigned (and hereby memorializes such resignation) from each and every other office, position or responsibility in, including as a director and officer of the Company, in which Employee served for the Company and/or Ionis Pharmaceuticals, Inc. (“Ionis”) and each of their respective affiliates, subsidiaries and divisions.

2.Final Paycheck; Payment of Accrued Wages and Expenses.  

(a)Final Paycheck.  On the Separation Date, the Company will pay Employee all accrued but unpaid base salary and all accrued and unused vacation earned through the Separation Date, subject to standard payroll deductions and withholdings.  Employee is entitled to these payments regardless of whether Employee executes this Agreement.

(b)Business Expenses.  The Company shall reimburse Employee for all outstanding expenses incurred on or prior to the Separation Date which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documenting such expenses.

3.Separation Payments and Benefits.  Without admission of any liability, fact or claim, the Company hereby agrees, subject to this Agreement becoming effective and irrevocable, as well as Employee’s performance of her continuing obligations pursuant to this Agreement, to provide Employee the severance benefits set forth below (the “Separation Benefit”).  Specifically, the Company and Employee agree as follows:

(a)Severance.  The Company shall pay to Employee on the first business day after the end of the six-month period following the Separation Date, Six Hundred Sixty Six Thousand, Two Hundred Eighty Two Dollars ($666,282), which represents fifteen (15) months of Employee’s annual base salary at the rate in effect immediately prior to the Separation Date.

(b)Exercise of Options; Shares Acquired.  Employee and the Company agree that Employee will exercise 100% of the vested options under Employee’s Option Award Agreements with the Company listed on Exhibit B hereto (the “Option Agreements”) to purchase shares of Common Stock (as defined in the Option Agreements) on the Effective Date subject to the terms of the Option Agreements and this Agreement.  Notwithstanding Section 4 of the Option Agreements or any other agreement, instrument or arrangement to the contrary: (i) Employee shall be entitled to exercise 100% of the vested options subject to the Option Agreements pursuant to a “net exercise” arrangement as described in Section 4(d) of the Option Agreements and thereupon to acquire ownership and title to the resulting net number of shares of Common Stock subject to such vested options; and (ii) the Company will withhold from the shares of the Common Stock otherwise issuable upon such exercise of the Option Agreements, a number of whole shares of Common Stock having a fair market value determined by the Company as of the date of exercise equal to the minimum amount of tax (44.4%) required to be withheld by law, as provided and in accordance with the terms of Section 14(b) of the Option Agreements.  The remaining terms of the Option Agreements shall continue to apply until the completion of the exercise of the options on the Effective Date.  Except as otherwise set forth in a written consulting agreement between Employee and the Company,  Employee acknowledges and agrees that as of the Separation Date: (i) Employee shall not be eligible for any additional vesting under the Option Agreements; (ii) all options with respect to unvested shares under the Option Agreements shall be terminated, and (iii) Employee holds no other option, equity appreciation, restricted stock or similar awards or any other rights with respect to any shares of the Common Stock of the Company or any other equity of the Company.

Shares of Common Stock of the Company acquired and deliverable to Employee after implementation of the net exercise and withholding provisions of this Section 3(b) (the “Net Shares”), shall promptly but in no event later than September 30, 2019 be transferred to a broker designated by Employee to the Company in writing not later than the Effective Date.  As of the Effective Date, all restrictions upon the retention, sale, transfer, exchange or other disposition or exercise of rights or incidents of ownership by Employee (or Employee’s representative(s) or agent(s), directly or indirectly, of the Net Shares imposed by the Option Agreements, or any other plans, programs or arrangements established, maintained or administered by the Company shall terminate and be unenforceable.  The Company will terminate Employee’s Akcea Therapeutics, Inc. 10B5-1 Trading Plan effective March 24, 2018 as of the Effective Date.

(c)Healthcare Continuation Coverage.  If Employee timely elects to receive continued healthcare coverage pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall directly pay, or reimburse Employee for any applicable Company COBRA premiums necessary to continue Employee’s coverage as in effect on the Separation Date, such payment or reimbursement to continue until the earlier of (i) the last day of the fifteenth (15th) month anniversary following the SeparationDate; or (ii) the date Employee first becomes eligibleafter the Separation Date to enroll in a group health insurance plan offered by another employer or entity in connection with Employee’s provision of services to such employer or entity.Employee agrees to immediately notify the Company in writing of any such enrollment or eligibility for enrollment and the Company’s obligations to pay any COBRA premiums for all periods after the effective date of such enrollment or eligibility will cease. Except as provided in this Agreement, Employee acknowledges that she shall be solely responsible for all matters relating to Employee’s continuation of coverage pursuant to COBRA, including, without limitation, Employee’s election of such coverage and her timely payment of her share of the applicable premiums.

(d)Taxes.  Employee understands and agrees that all payments under this Section 3 will be subject to appropriate tax withholding and other deductions.  To the extent any taxes may be payable by Employee for the benefits provided to her by this Section 3 beyond those withheld by the Company (including taxes withheld under Section 3(b)), Employee agrees to pay them herself and to indemnify and hold the Company and the other entities released herein harmless for any tax claims or penalties, and associated attorneys’ fees and costs, resulting from any failure by her to make required payments.

The terms of this Agreement shall be construed and administered in a manner calculated to satisfy the short-term deferral exception under Treas. Reg. Section 1.409A-1(b) (4); the separation pay plan exception under Treas. Reg. Section 1.409A-1(b)(9)(iii); and/or the welfare benefit exception under Treas. Reg. 1.409A-1(b)(9)(v) to Internal Revenue Code Section 409A and the applicable regulations and guidance promulgated thereunder (“Section 409A”). Any reference in this Agreement to a separation from or termination of employment (or similar term) means a “separation from service” as defined in Section 409A and the applicable guidance issued thereunder.  If and to the extent that this Agreement fails to satisfy an exception to Section 409A, it will be construed and administered in accordance therewith to the maximum extent permitted by law. If payment of any amount subject to Section 409A is triggered by a separation from service that occurs while Employee is a “specified employee” (as defined by Section 409A) with, and if such amount is scheduled to be paid within six (6) months after such separation from service, the amount shall accrue without interest and shall be paid the first business day after the end of such six-month period, or, if earlier, within 15 days after the appointment of the personal representative or executor of Employee’s estate following her death.  All rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits for purposes of applying Section 409A.  If any payment subject to Section 409A is contingent on the delivery of a release by Employee and could occur in either of two years, the payment will occur in the later year. Nothing in this Agreement shall be construed as a guarantee of any particular tax treatment to Employee.  Employee shall be solely responsible for the tax consequences with respect to all amounts payable under this Agreement, and in no event shall the Company have any responsibility or liability if this Agreement does not meet any applicable requirements of Section 409A.

(e)Sole Separation Benefit.  Employee agrees that the payments provided by this Section 3 are not required under the Company’s normal policies and procedures, and are provided as a severance solely in connection with this Agreement.  Employee acknowledges and agrees that the payments referenced in this Section 3 constitute adequate and valuable consideration, in and of themselves, for the promises contained in this Agreement. Employee acknowledges and agrees that the Separation Benefit is not intended to and does not constitute a severance plan or confer a benefit on anyone other than the parties.

4.Full Payment.  Employee acknowledges that the payment and arrangements herein shall constitute full and complete satisfaction of any and all amounts properly due and owing to Employee as a result of her employment with the Company and the termination thereof, including, but not limited to, salary, wages, bonuses, accrued vacation/paid time off, notice periods, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to Employee.  

5.Employee’s Release of Claims.  Employee hereby agrees and acknowledges that by signing this Agreement and accepting the severance payments to be provided to her, and other good and valuable consideration provided for in this Agreement, Employee is waiving her right to assert any form of legal claim against the Company¹ of any kind whatsoever from the beginning of time through the Effective Date. Employee’s waiver and release herein is intended to bar any form of legal claim, charge, complaint or any other form of action (jointly referred to as “Claims”) against the Company seeking any form of relief including, without limitation, equitable relief (whether declaratory, injunctive or otherwise), the recovery of any damages or any other form of monetary recovery whatsoever (including, without limitation, back pay, front pay, compensatory damages, emotional distress damages, punitive damages, attorneys’ fees and any other costs) against the Company, up through the Effective Date.

Without limiting the foregoing general waiver and release of claims, Employee specifically waives and releases the Company from any Claim arising from or related to Employee’s employment relationship with the Company or the termination thereof, including, without limitation:

(i)Claims under any state or federal discrimination, fair employment practices or other employment related statute, regulation or executive order (as they may have been amended through the Effective Date) prohibiting discrimination or harassment based upon any protected status including, without limitation, race, national origin, age, gender, marital status, disability, veteran status or sexual orientation.  Without limitation, specifically included in this paragraph are any Claims arising under the federal Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Civil Rights Acts of 1866 and 1871, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act, the Americans With Disabilities Act and any similar Massachusetts or other state statute.

¹  For purposes of this release of claims, the term “Company” shall include Akcea Therapeutics, Inc. and its divisions, affiliates, parents and subsidiaries, and their respective officers, directors, shareholders, owners, employees and assigns.

(ii)Claims under any other state or federal employment related statute, regulation or executive order (as they may have been amended through the Effective Date) relating to wages, hours or any other terms and conditions of employment.  Without limitation, specifically included in this paragraph are any Claims arising under the Fair Labor Standards Act, the Family and Medical Leave Act of 1993, the National Labor Relations Act, the Employee Retirement Income Security Act of 1974, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and any similar Massachusetts or other state statute.  

(iii)Claims under any state or federal common law theory including, without limitation, wrongful discharge, breach of express or implied contract, promissory estoppel, unjust enrichment, breach of a covenant of good faith and fair dealing, violation of public policy, defamation, interference with contractual relations, intentional or negligent infliction of emotional distress, invasion of privacy, misrepresentation, deceit, fraud or negligence.

(iv)Any other Claim arising under state or federal law.

Notwithstanding the foregoing, this Section shall not release the Company from any obligation expressly set forth in this Agreement, nor is Employee releasing any claims to vested benefits (e.g., Employee’s vested 401(k) balance) or to any rights to indemnification that Employee may have pursuant to insurance policy, Company by-law, charter or operating agreement, and/or applicable law.

Employee and the Company acknowledge that Employee is over the age of 40 and that Employee, therefore, has specific rights under the Age Discrimination in Employment Act (“ADEA”) and the Older Workers Benefit Protection Act (the “OWBPA”), which prohibit discrimination on the basis of age.  It is the Company’s desire and intent to make certain that Employee fully understands the provisions and effects of this Agreement, which includes a release of claims under the ADEA and OWBPA.  To that end, Employee has been encouraged and given the opportunity to consult with legal counsel for the purpose of reviewing the terms of this Agreement. Consistent with the provisions of the ADEA and OWBPA, the Company also is providing Employee with twenty-one (21) days in which to consider and accept the terms of this Agreement by signing below and returning it to the Company at the address below.  Employee may rescind her assent to this Agreement if, within seven (7) days after Employee signs this Agreement, Employee delivers by hand or sends by mail (certified, return receipt and postmarked within such seven (7) day period) a notice of rescission to the Company at 22 Boston Wharf Road, 9^th Floor Boston, MA 02210.

Also, consistent with the provisions of the ADEA, nothing in this release shall be deemed to prohibit Employee from challenging the validity of this release. Employee understands that nothing in this Agreement shall in any way limit or prohibit Employee from engaging for a lawful purpose in any Protected Activity,provided, however, that Employee agrees not to seek or accept any monetary award from such a proceeding (except with respect to proceedings before the Securities and Exchange Commission). For purposes of this Agreement, “Protected Activity” shall mean filing a charge, complaint, or report with, or otherwise communicating with, cooperating with or participating in any investigation or proceeding that may be conducted by, any federal, state or local government agency or commission, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, and the National Labor Relations Board (“Government Agencies”). Employee understands that in connection with such Protected Activity, Employee is permitted to disclose documents or other information as permitted by law, and without giving notice to, or receiving authorization from, the Company. Notwithstanding the foregoing, Employee agrees to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute Company confidential information to any parties other than the relevant Government Agencies. Employee further understands that “Protected Activity” does not include the disclosure of any Company attorney-client privileged communications, and that any such disclosure without the Company’s written consent shall constitute a material breach of this Agreement. In addition, pursuant to the Defend Trade Secrets Act of 2016, Employee is notified that an individual will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made in confidence to a federal, state, or local government official (directly or indirectly) or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if (and only if) such filing is made under seal. In addition, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the individual’s attorney and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

Employee acknowledges that she has carefully read and understands the scope and effect of the provisions of this Agreement, has been advised to consult with an attorney and that he has had the opportunity to do so.  Employee has not relied upon any representations or statements made by the Company that are not specifically set forth in this Agreement.

Employee acknowledges and agrees that, but for providing this waiver and release of claims, Employee would not be receiving the severance being provided to her under this Agreement.

6.Non-Disparagement, Transition, Transfer of Company Property and Non-Competition Agreement.  Both parties further agree that:

(a)Mutual Non-Disparagement.  Employee agrees that she will not make any public media statements with respect to the Company without the prior approval of the Company and that she will not disparage or knowingly make false or defamatory statements about the Company or Ionis, or their respective directors, officers, or affiliates in any manner whatsoever (including through the use of any social networking sites, blogs, forums or any similar medium, including in response to inquiries from other users of such medium) whether directly or indirectly through a third party. The Company and Ionis agree to instruct their respective senior corporate executives having the position of Vice President (or Senior Vice President with respect to Ionis) or above and the current members of their respective Boards of Directors and all members of Investor Relations and Corporate Communication Departments in the case of both Ionis and Akcea not to disparage or knowingly make false or defamatory statements regarding Employee. This Section shall not apply to communications required by law, or that are otherwise privileged as a matter of law. Employee’s non-disparagement obligations under this Section do not interfere with or restrict her ability to communicate with any federal, state, or local agency, including any with which a charge has been filed.

(b)Transition.  Each of the Company, Ionis and Employee shall use their respective reasonable efforts to cooperate with each other in good faith to facilitate a smooth transition of Employee’s duties to other employee(s) of the Company prior to the Separation Date.  The Company and Ionis shall each provide Employee with a draft for her review and comment, and will endeavor in good faith to implement any reasonable comments, prior to making or releasing any announcement, filing or other communication, publicly or with respect to the primary internal announcement, arising out of or relating to Employee or Employee’s separation from service.  Each of the Company, Ionis and Employee will cooperate in good faith to agree on a set of talking points for use with internal communications.  To the extent information arising out of or relating to Employee or Employee’s separation from service information has already been publicly disclosed without violating this Agreement, any party may subsequently disclose the same information to the public without the consent of the other party.

(c)Transfer of Company Property.  On or before the Separation Date, Employee shall turn over to the Company all files, memoranda, records, and other documents, and any other physical or personal property which are the property of the Company and which she had in her possession, custody or control at the time she signed this Agreement.

(d)Continuation of Non-Competition Agreement Prior Covenants.  Executive acknowledges and agrees that she is bound by and will strictly comply with the terms of the Non-Competition Agreement, including but not limited to the terms of Sections 1,2,7,8 and 15 of the Non-Competition Agreement and all related enforcement provisions which by their terms survive any termination of employment.

7.Employee Representations; Company Representations.  Employee warrants and represents that (a) she has not filed or authorized the filing of any complaints, charges or lawsuits against the Company or any affiliate of the Company with any governmental agency or court, and that if, unbeknownst to Employee, such a complaint, charge or lawsuit has been filed on her behalf, she will immediately cause it to be withdrawn and dismissed, (b) she has reported all hours worked as of the date of this Agreement and has been paid all compensation, wages, bonuses, commissions, and/or benefits to which he may be entitled and no other compensation, wages, bonuses, commissions and/or benefits are due to her, except as provided in this Agreement, (c) she has no known workplace injuries or occupational diseases and has been provided and/or has not been denied any leave requested under the Family and Medical Leave Act or any similar state law, (d) the execution, delivery and performance of this Agreement by Employee does not and will not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Employee is a party or any judgment, order or decree to which Employee is subject, and (e) upon the execution and delivery of this Agreement by the Company and Employee, this Agreement will be a valid and binding obligation of Employee, enforceable in accordance with its terms.  The Company and Ionis, each represent that it is not aware of any facts or circumstances upon which it intends to assert, or is actively considering asserting, a claim against Employee arising out of or relating to her employment or the termination of that employment, and (ii) upon the execution and delivery of this Agreement by the Company, Ionis and Employee, this Agreement will be a valid and binding obligation of the Company (and Ionis with respect to Section 6(a), 6(b), 7 and 9 hereof), enforceable in accordance with its terms.

8.No Assignment by Employee.  Employee warrants and represents that no portion of any of the matters released herein, and no portion of any recovery or settlement to which Employee might be entitled, has been assigned or transferred to another person, firm or corporation not a party to this Agreement, in any manner, including by way of subrogation or operation of law or otherwise.  If any claim, action, demand or suit should be made or instituted against the Company or any other releasee because of any actual assignment, subrogation or transfer by Employee, Employee agrees to indemnify and hold harmless the Company and all other releasees against such claim, action, suit or demand, including necessary expenses of investigation, attorneys’ fees and costs.  In the event of Employee’s death, this Agreement shall inure to the benefit of Employee and Employee’s executors, administrators, heirs, distributees, devisees, and legatees.  None of Employee’s rights or obligations may be assigned or transferred by Employee, other than Employee’s rights to payments hereunder, which may be transferred only upon Employee’s death by will or operation of law.

9.Confidentiality.  Employee and the Company and Ionis mutually agree to maintain in complete confidence the existence of this Agreement, the contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as “Separation Information”) provided that nothing herein shall prevent the Company or Ionis from meeting its obligations under applicable law or binding agreements.  Except as required by law, Employee may disclose Separation Information only to Employee’s immediate family members, the Court in any proceedings to enforce the terms of this Agreement, Employee’s counsel, and Employee’s accountant and any professional tax advisor to the extent that they need to know the Separation Information in order to provide advice on tax treatment or to prepare tax returns, and must prevent disclosure of any Separation Information to all other third parties.  Employee will not publicize, directly or indirectly, any Separation Information.

10.Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the Commonwealth of Massachusetts or, where applicable, United States federal law, in each case, without regard to any conflicts of laws provisions or those of any state other than Massachusetts.

11.Miscellaneous.  Employee further acknowledges that, other than the Option Agreements and the Non-Competition Agreement, this Agreement shall supersede each agreement entered into between Employee and the Company regarding Employee’s employment, including, without limitation, the Offer Letter and the Severance Letter, and each such agreement shall be deemed terminated and of no further effect as of the Separation Date.  Employee acknowledges that there are no other agreements, written, oral or implied, and that she may not rely on any prior negotiations, discussions, representations or agreements.  This Agreement may be modified only in writing, and such writing must be signed by both parties and recited that it is intended to modify this Agreement.  This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

12.Company Assignment and Successors.  The Company shall assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise).  This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns, personnel and legal representatives.

13.Employee’s Cooperation.  After the Separation Date, Employee shall use reasonable best efforts to cooperate with the Company and its affiliates, upon the Company’s reasonable request, with respect to any internal investigation or administrative, regulatory or judicial proceeding involving matters within the scope of Employee’s duties and responsibilities to the Company or its affiliates during her employment with the Company.

(Signature page(s) follow)

IN WITNESS WHEREOF, the undersigned have caused this Separation Agreement to be duly executed and delivered as of the date indicated next to their respective signatures below.

	EMPLOYEE
DATED: September 18, 2019	By:	/s/ Paula Soteropoulos
	Name:	Paula Soteropoulos
	AKCEA THERAPEUTICS, INC.
DATED: September 18, 2019	By:	/s/ Sandford D. Smith
	Name:	Sandford D. Smith
	Title:	Compensation Committee Chairman
	Solely for purposes of Sections 6(a), 6(b), 7 and 9 hereof:
	IONIS PHARMACEUTICALS, INC.
DATED: September 18, 2019	By:	/s/ Patrick O’Neil
	Name:	Patrick O’Neil
	Title:	Senior Vice President, Legal and
	General Counsel

91224629v.7

Exhibit A

AKCEA THERAPEUTICS, INC.

Employee Confidential Information, Inventions Assignment,

Non-Competition and Non-Solicitation Agreement

In consideration of my employment or continued employment by Akcea Therapeutics, Inc., (the “Company”), and the compensation now and hereafter paid to me, I hereby agree as follows:

1.Recognition of Company’s Rights; Nondisclosure.  At all times during the term of my employment and thereafter, I will hold in strictest confidence and will not disclose, use, lecture upon or publish any of the Company’s Confidential Information (defined below), except as such disclosure, use or publication may be required by the Company in connection with my work for the Company, or unless an officer of the Company expressly authorizes such in writing. I will not make any permitted disclosure, use or publication unless such disclosure, use or publication is in strict compliance with the Company’s publication and presentation clearance policy. I will not export, directly or indirectly, any Company products, any direct product thereof, or any related technical data in violation of the United States Department of Commerce’s Export Administration Regulations.

The term “Confidential Information” will mean trade secrets, confidential knowledge, data or any other proprietary information of the Company.  By way of illustration but not limitation, “Confidential Information” includes (a) inventions, mask works, trade secrets, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques (hereinafter collectively referred to as “Inventions”); and (b) information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; as well as information regarding the skills and compensation of other employees of the Company.

Notwithstanding the foregoing, pursuant to 18 U.S.C. Section 1833(b), I shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that: (1) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  In addition, it is understood that, at all such times, I am free to use information which was known to me prior to employment with Company or which is generally known in the trade or industry through no breach of this Agreement or other act or omission by me.  Furthermore, notwithstanding the foregoing or anything to the contrary in this Agreement or any other agreement between the Company and me, nothing in this Agreement shall limit my right to discuss my employment or report possible violations of law or regulation with the Equal Employment Opportunity Commission, United States Department of Labor, the National Labor Relations Board, the Securities and Exchange Commission, or other federal government agency or similar state or local agency or to discuss the terms and conditions of my employment with others to the extent expressly permitted by Section 7 of the National Labor Relations Act or to the extent that such disclosure is protected under the applicable provisions of law or regulation, including but not limited to “whistleblower” statutes or other similar provisions that protect such disclosure.

I understand that Confidential Information and Third Party Information is never to be used or disclosed by me, as provided in this Section 1.  If a temporal limitation on my obligation not to use or disclose such information is required under applicable law, and the Agreement or its restriction(s) cannot otherwise be enforced, I agree and Company agrees that the two (2) year period after the date my employment ends will be the temporal limitation relevant to the contested restriction, provided, however, that this sentence will not apply to trade secrets protected without temporal limitation under applicable law.  

2.Third Party Information.  I understand, in addition, that the Company has received and in the future will receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. In addition, Third Party Information will include the confidential or proprietary information of the Company's parent, Ionis Pharmaceuticals, Inc. ("Ionis"). During the term of my employment and thereafter, I will hold Third Party Information in the strictest confidence and will not disclose (except as required to be disclosed in connection with my work for the Company) Third Party Information unless expressly authorized by an officer of the Company in writing.  I will not make any permitted disclosures unless such disclosure is in strict compliance with the Company’s publication and presentation clearance policy.

3.Assignment of Inventions.

3.1Assignment.

(a)Subject to Section 3.1(b) herein, and except for the Excluded Inventions set forth in Exhibit A hereto, I hereby assign to the Company all my right, title and interest throughout the world in and to any and all Inventions (and all patent rights, copyrights, and all other rights in connection therewith, hereinafter referred to as “Proprietary Rights”) whether or not patentable or registrable under patent, copyright, trademark or similar statutes (together with the goodwill associated therewith), made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment with the Company (“Work Inventions”) or within 1 year after termination of my employment, which relate to any Work Invention or to any work performed by me while I was employed by the Company. Inventions assigned to the Company by this Paragraph 3 are hereinafter referred to as “Company Inventions.”  I agree, upon request, to execute, verify and deliver assignments of such Proprietary Rights to the Company or its designee.

(b)I recognize that this Agreement will not be deemed to require assignment of any Invention that I developed entirely on my own time without using Company’s equipment, supplies, facilities, trade secrets or Confidential Information, except for those Inventions that either (i) relate to Company’s actual or anticipated business, research or development, or (ii) result from or are connected with work performed by me for Company.  In addition, this Agreement does not apply to any Invention which qualifies fully for protection from assignment to Company under any specifically applicable state law, regulation, rule or public policy (“Specific Inventions Law”).

3.2Government.  I also agree to assign all my right, title and interest in and to any and all Company Inventions to the United States of America, if such is required to be assigned by a contract between the Company and United States of America or any of its agencies.

3.3Works for Hire.  I acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of my employment as well as those works made by me within 1 year after termination of my employment which relate to any work made by me while I was employed by the Company and which are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act (17 U.S.C., Section 101).

4.Enforcement of Proprietary Rights.  I will assist the Company in every proper way to obtain and from time to time enforce United States and foreign Proprietary Rights relating to Company Inventions in any and all countries.  My obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries will continue beyond the termination of my employment, but the Company will compensate me at a reasonable rate after my termination for the time actually spent by me if the Company requests such assistance.

In the event Company is unable for any reason, after reasonable effort, to secure my signature on any document needed in connection with the actions specified in this paragraph, I hereby irrevocably designate and appoint Company and its duly authorized officers and agents as my agent and attorney in fact, which appointment is coupled with an interest, to act for and on my behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph with the same legal force and effect as if executed by me.

I hereby waive and transfer to the Company, any and all claims, of any nature whatsoever, which I now or may hereafter have, for infringement of any Proprietary Rights assigned hereunder to the Company.

5.Obligation to Keep Company Informed.  During the period of my employment and for six (6) months after termination of my employment, I will promptly disclose all Company Inventions to the Company fully and in writing and will hold such Company Inventions in trust for the sole right and benefit of the Company.  In addition, after termination of my employment, I will disclose all patent applications filed by me within a year after termination of employment which relate to any Company Invention or to any work performed by me while I was employed by Company.  At the time of each such disclosure, I will advise Company in writing of any Inventions that I believe fully qualify for protection under the provisions of any applicable Specific Inventions Law; and I will at that time provide to Company in writing all evidence necessary to substantiate that belief.  Company will keep in confidence and will not use for any purpose or disclose to third parties without my consent any confidential information disclosed in writing to Company pursuant to this Agreement relating to Inventions that qualify fully for protection under a Specific Inventions Law.  I will preserve the confidentiality of any Invention that does not fully qualify for protection under a Specific Inventions Law.

6.Prior Inventions.  Inventions, if any, patented or unpatented, which I made prior to the commencement of my employment with the Company are excluded from the scope of this Agreement.  To preclude any possible uncertainty, except for any Inventions I have already assigned to Ionis prior to executing this Agreement, I have set forth in Exhibit A attached hereto a complete list of all Inventions that I have, alone or jointly with others, conceived, developed or reduced to practice or caused to be conceived, developed or reduced to practice prior to the commencement of my employment with the Company, that I consider to be my property or the property of third parties and that I wish to have excluded from the scope of this Agreement (the “Excluded Inventions”).  If disclosure of any such Excluded Invention would cause me to violate

any prior confidentiality agreement, I understand that I am not to list such Excluded Inventions but am to inform the Company that all such Inventions have not been listed for that reason. I acknowledge and agree that if I use any Excluded Inventions in the scope of my employment, or if I include any Excluded Inventions in any product or service of Company, or if my rights in any Excluded Inventions may block or interfere with, or may otherwise be required for, the exercise by Company of any rights assigned to Company under this Agreement, I will immediately so notify Company in writing.  Unless Company and I agree otherwise in writing as to particular Excluded Inventions, I hereby grant to Company, in such circumstances (whether or not I give Company notice as required above), a non-exclusive, perpetual, transferable, fully-paid and royalty-free, irrevocable and worldwide license, with rights to sublicense through multiple levels of sublicensees, to reproduce, make derivative works of, distribute, publicly perform, and publicly display in any form or medium, whether now known or later developed, make, have made, use, sell, import, offer for sale, and exercise any and all present or future rights in, such Excluded Inventions.  

7.No Solicitation of Employees, Consultants, Contractors, or Customers or Potential Customers.  I agree that during the 12 month period after the date my employment ends I will not, as an officer, director, employee, consultant, owner, partner, or in any other capacity, either directly or through others:

7.1solicit, induce, encourage, or participate in soliciting, inducing or encouraging any person known to me to be an employee, consultant, or independent contractor of the Company to terminate his or her relationship with the Company, even if I did not initiate the discussion or seek out the contact;

7.2solicit, induce, encourage, or participate in soliciting, inducing, or encouraging any person known to me to be an employee, consultant, or independent contractor of the Company to terminate his or her relationship with the Company to render services to me or any other person or entity that researches, develops, markets, sells, performs or provides or is preparing to develop, market, sell, perform or provide Conflicting Services (as defined in Section 8 below);

7.3hire, employ, or engage in a business venture with as partners or owners or other joint capacity, or attempt to hire, employ, or engage in a business venture as partners or owners or other joint capacity, with any person then employed by the Company or who has left the employment of the Company within the preceding three months to research, develop, market, sell, perform or provide Conflicting Services;

7.4solicit, induce or attempt to induce any Customer or Potential Customer (as defined below), to terminate, diminish, or materially alter in a manner harmful to the Company its relationship with the Company;

7.5solicit or assist in the solicitation of any Customer or Potential Customer to induce or attempt to induce such Customer or Potential Customer to purchase or contract for any Conflicting Services; or

7.6perform, provide or attempt to perform or provide any Conflicting Services for a Customer or Potential Customer.

The parties agree that for purposes of this Agreement, a “Customer or Potential Customer” is any person or entity who or which, at any time during the 12-month period prior to my contact with such person or entity as described in Sections 7.4-7.6 above if such contact occurred during my employment or, if such contact occurs following the termination of my employment, during the 12-month period prior to the date my employment with the Company ended: (i) contracted for, was billed for, or received from the Company any product, service or process with which I worked directly or indirectly during my employment by the Company or about which I acquired Confidential Information; or (ii) was in contact with me or in contact with any other employee, owner, or agent of the Company, of which contact I was or should have been aware, concerning the sale or purchase of, or contract for, any product, service or process with which I worked directly or indirectly during my employment with the Company or about which I acquired Confidential Information; or (iii) was solicited by the Company in an effort in which I was involved or of which I was aware.    

8.Non-Compete Provision.  I agree that for the 15-month period after the date my employment ends for any reason I will not, directly or indirectly, as an officer, director, employee, consultant, owner, partner, or in any other capacity solicit, perform, or provide, or attempt to perform or provide Conflicting Services anywhere in the Restricted Territory, nor will I assist another person to solicit, perform or provide or attempt to perform or provide Conflicting Services anywhere in the Restricted Territory.

The parties agree that for purposes of this Agreement, “Conflicting Services” means any product or the development thereof, by any person or organization other than the Company that is designed or intended to treat the same disease, condition or indication as a product the Company was developing in human clinical studies or commercializing at the time of my termination with which I worked directly or indirectly during my employment by the Company or about which I acquired Confidential Information during my employment by the Company.

The parties agree that for purposes of this Agreement, “Restricted Territory” means the 100 mile radius of any of the following locations: (i) any Company business location at which I have worked on a regular or occasional basis during the preceding year; (ii) my home if I work from home for the Company on a regular or occasional basis; (iii) any potential business location of the Company under active consideration by the Company to which I have traveled in connection with the consideration of that location; or (iv) any business location of a Customer or Potential Customer where representatives of the Customer or Potential Customer with whom I have been in contact during the 12 months prior to my termination are based.

9.Reasonableness of Restrictions.

9.1I agree that I have read this entire Agreement and understand it.  I agree that this Agreement does not prevent me from earning a living or pursuing my career.  I agree that the restrictions contained in this Agreement are reasonable, proper, and necessitated by the Company’s legitimate business interests.  I represent and agree that I am entering into this Agreement freely and with knowledge of its contents with the intent to be bound by the Agreement and the restrictions contained in it.

9.2In the event that a court finds this Agreement, or any of its restrictions, to be ambiguous, unenforceable, or invalid, I and the Company agree that the court will read the Agreement as a whole and interpret the restriction(s) at issue to be enforceable and valid to the maximum extent allowed by law.

9.3If the court declines to enforce this Agreement in the manner provided in subsection 9.2, I and the Company agree that this Agreement will be automatically modified to provide the Company with the maximum protection of its business interests allowed by law and I agree to be bound by this Agreement as modified.

10.No Improper Use of Materials.  During my employment by the Company I will not improperly use or disclose any confidential information or trade secrets, if any, of any former employer or any other person to whom I have an obligation of confidentiality, and I will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person to whom I have an obligation of confidentiality unless consented to in writing by that former employer or person.

11.No Conflicting Obligation.  I represent that my performance (a) of all the terms of this Agreement and (b) as an employee of the Company, does not and will not breach any agreement to keep in confidence information acquired by me in confidence or in trust prior to my employment by the Company.  I have not entered into, and I will not enter into, any agreement that conflicts with this Agreement.

12.Return of Company Documents.  When I leave the employ of the Company, I will deliver to the Company any and all laboratory notebooks, conception notebooks, drawings, notes, memoranda, specifications, devices, formulas, molecules, cells, storage media, including software and documents, including any computer printouts, together with all copies thereof, and any other material containing or disclosing any Company Inventions, Third Party Information or Confidential Information of the Company.  I further agree that any property situated on the Company’s premises and owned by the Company including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice.  Prior to leaving, I will cooperate with the Company in completing and signing the Company’s termination statement for technical and management personnel.

13.Legal and Equitable Remedies.  Because my services are personal and unique and because I may have access to and become acquainted with the Confidential Information of the Company, the Company will have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, without bond, without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement.

13.1I agree that if the Company is successful in whole or in part in any legal or equitable action against me under this Agreement, the Company will be entitled to payment of all costs, including reasonable attorney’s fees, from me.

13.2In the event the Company enforces this Agreement through a court order, I agree that the restrictions of Sections 7 and 8 will remain in effect for a period of twelve (12) months from the effective date of the Order enforcing the Agreement.

14.Notices.  Any notices required or permitted hereunder will be given to me at the address specified below or at such other address as I will specify in writing.  Such notice will be deemed given upon personal delivery to the appropriate address, or by facsimile transmission (receipt verified and with confirmation copy following by another permitted method), telexed, sent by express courier service, or, if sent by certified or registered mail, three days after the date of mailing.

15.Publication of This Agreement to Subsequent Employer or Business Associates of Employee.

15.1If I am offered employment or the opportunity to enter into any business venture as owner, partner, consultant or other capacity while the restrictions described in Sections 7 and 8 of this Agreement are in effect I agree to inform my potential employer, partner, co-owner and/or others involved in managing the business with which I have an opportunity to be associated of my obligations under this Agreement and also agree to provide such person or persons with a copy of this Agreement.

15.2I agree to inform the Company of all employment and business ventures which I enter into while the restrictions described in Sections 7 and 8 of this Agreement are in effect and I also authorize the Company to provide copies of this Agreement to my employer, partner, co-owner and/or others involved in managing the business with which I am employed or associated and to make such persons aware of my obligations under this Agreement.

16.General Provisions.

16.1Governing Law.  This Agreement will be governed by and construed according to the laws of the Commonwealth of Massachusetts as such laws are applied to agreements entered into and to be performed entirely within the Commonwealth of Massachusetts between Massachusetts residents.  I hereby expressly consent to the personal jurisdiction and venue of the state and federal courts located in the Commonwealth of Massachusetts for any lawsuit filed there against me by Company arising from or related to this Agreement.  

16.2Entire Agreement.  This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions between us.  No modification or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing signed by both parties.  Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement; provided, however, prior to the execution of this Agreement, if Company and I were parties to any agreement regarding the subject matter hereof, that agreement will be superseded by this Agreement prospectively only. As used in this Agreement, the period of my employment includes any time during which I may be retained by the Company as a consultant.  Any subsequent change or changes in my title, position, status, role, duties, salary, compensation or benefits or other terms and conditions of employment or service will not affect the validity or scope of this Agreement.

16.3Severability.  If any of the provisions in this Agreement are deemed unenforceable by law, then the remaining provisions will continue in full force and effect.

16.4Successors and Assigns; 3^rd Party Beneficiary.  This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns. In addition, I agree that Ionis is a third party beneficiary to Sections 2, 12 and 13 of this Agreement. Without limiting the foregoing, Ionis will have the right to enforce such provisions directly against me as they relate to Ionis' proprietary or confidential information.

16.5Survival.  The provisions of this Agreement will survive the termination of my employment and the assignment of this Agreement by the Company to any successor in interest or other assignee.

16.6Employment.  I agree and understand that nothing in this Agreement will confer any right with respect to continuation of employment by the Company, nor will it interfere in any way with my right or the Company’s right to terminate my employment at any time, with or without cause.

16.7Waiver.  No waiver by the Company of any breach of this Agreement will be a waiver of any preceding or succeeding breach.  No waiver by the Company of any right under this Agreement will be construed as a waiver of any other right.  The Company will not be required to give notice to enforce strict adherence to all terms of this Agreement.

This Agreement will be effective as of November __, 2017.

I UNDERSTAND THAT THIS AGREEMENT AFFECTS MY RIGHTS TO INVENTIONS I MAKE DURING MY EMPLOYMENT, AND RESTRICTS MY RIGHT TO DISCLOSE OR USE THE COMPANY’S CONFIDENTIAL INFORMATION DURING OR SUBSEQUENT TO MY EMPLOYMENT.

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.  I HAVE COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.

Dated:	November __, 2017	/s/ Paula Soteropoulos
		Signature
		Paula Soteropoulos
	Address	Akcea Therapeutics, Inc.
		55 Cambridge Parkway
		Cambridge, MA 02142

ACCEPTED AND AGREED TO:

Akcea Therapeutics, Inc.

By:	/s/ Sandford D. Smith
	Signature
	Sandford D. Smith
	Printed Name
	Compensation Committee Chairman
	Title

EXHIBIT A

AKCEA THERAPEUTICS, INC.

1.  The following is a complete list of all inventions or improvements relevant to the subject matter of my employment by Akcea Therapeutics, Inc. (the “Company”) that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by the Company, except for any Inventions I have already assigned to Ionis Pharmaceuticals, Inc. prior to executing this Agreement:

X No inventions or improvements. ☐ See below:

☐  Due to confidentiality agreements with prior employer, I cannot disclose certain inventions that would otherwise be included on the above-described list.

☐  Additional sheets attached.

2.  I propose to bring to my employment the following devices, materials and documents of a former employer or other person to whom I have an obligation of confidentiality that are not generally available to the public, which materials and documents may be used in my employment pursuant to the express written authorization of my former employer or such other person (a copy of which is attached hereto):

X No material ☐ See below:

☐  Additional sheets attached.

Date:
	/s/ Paula Soteropoulos
	Employee Signature

Exhibit B

Options Outstanding by Price

As Of Date: 09/18/2019

Status: Active Participant ID is 3110

Name	ID	Number	Option Date	Expiration Date	Remaining Life in Years Option	Price	Shares Outstanding
Soteropoulos, Paula	3110	0001044	12/16/2015	12/15/2025	6.24	6.48	1,649,443.00
Soteropoulos, Paula	3110	0001043	12/16/2015	12/15/2025	6.24	6.48	61,636,00
Soteropoulos, Paula	3110	0001070	2/17/2016	2/16/2026	6.41	6.48	155,210.00
Soteropoulos, Paula	3110	0001069	2/17/2016	2/16/2026	6.41	6.48	3,302.00
Soteropoulos, Paula	3110	0001157	6/5/2017	6/4/2027	7,71	12.21	295,365.00
Soteropoulos, Paula	3110	0001156	6/5/2017	6/4/2027	7.71	12.21	12,854.00
Soteropoulos, Paula	3110	0001401	1/2/2018	1/1/2028	8,28	17.38	13,147.00
Soteropoulos, Paula	3110	0001402	1/2/2018	1/1/2028	8.28	17.38	261,853.00
Soteropoulos, Paula	3110	0001816	1/2/2019	1/1/2029	9.28	30.73	3,267.00
Soteropoulos, Paula	3110	0001817	1/2/2019	1/1/2029	9.28	30.73	292,733.00
							2,748,810

EX-10.6

Exhibit 10.6

SEPARATION AGREEMEENT

This Separation Agreement (this “Agreement”) by and between Sarah Boyce (“Employee”) and Akcea Therapeutics, Inc., a Delaware corporation (the “Company”), is made and entered into as of September 18, 2019 (the “Execution Date”) and is effective eight (8) days thereafter (the “Effective Date”), unless Employee rescinds her acceptance of this Agreement as provided in Section 5 below, with reference to the following facts:

The Company and Employee are parties to the Offer Letter between Company and Employee, dated April 17, 2018 (the “Offer Letter”) and the Severance and Equity Award Vesting Acceleration Letter dated April 17, 2018 (the “Severance Letter”);

The Employee’s employment with the Company shall terminate effective as of September 18, 2019 (the “Separation Date”), subject to the terms and conditions set forth in this Agreement; and

The Employee and Company desire to enter into this Agreement to memorialize the terms and conditions of Employee’s separation from the Company;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereby agree as follows:

1.Separation Date.  Employee’s employment with the Company shall end on the Separation Date. Following the Separation Date, Employee shall not be and shall not represent herself as an employee or agent of the Company. As of the Execution Date, Employee shall be deemed to have resigned (and hereby memorializes such resignation) from each and every other office, position or responsibility in, including as a director and officer of the Company, in which Employee served for the Company and/or Ionis Pharmaceuticals, Inc. (“Ionis”) and each of their respective affiliates, subsidiaries and divisions.

2.Final Paycheck; Payment of Accrued Wages and Expenses.  

(a)Final Paycheck.  On the Separation Date, the Company will pay Employee all accrued but unpaid base salary and all accrued and unused vacation earned through the Separation Date, subject to standard payroll deductions and withholdings.  Employee is entitled to these payments regardless of whether Employee executes this Agreement.

(b)Business Expenses.  The Company shall reimburse Employee for all outstanding expenses incurred on or prior to the Separation Date which are consistent with the Company’s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documenting such expenses.

3.Separation Payments and Benefits.  Without admission of any liability, fact or claim, the Company hereby agrees, subject to this Agreement becoming effective and irrevocable, as well as Employee’s performance of her continuing obligations pursuant to this Agreement, to provide Employee the severance benefits set forth below (the “Separation Benefit”).  Specifically, the Company and Employee agree as follows:

(a)Severance.  The Company shall pay to Employee on the first business day after the end of the six-month period following the Separation Date, Five Hundred One Thousand and Nine Hundred Seventy Five Dollars ($501,975), which represents twelve (12) months of Employee’s annual base salary at the rate in effect immediately prior to the Separation Date.

(b)Exercise of Options; Shares Acquired.  Employee will be entitled to exercise the options under Employee’s Option Award Agreements with the Company (the “Akcea Option Agreements”) and Ionis (the “Ionis Option Agreements”, and collectively, the “Option Agreements”) to purchase shares of Common Stock (as defined in the respective Option Agreements) to the extent currently exercisable or as such options may become exercisable over time, subject to the terms of the Option Agreements and this Agreement.  Employee, the Company and Ionis agree to finalize the definitive list of Option Agreements within two days of the Execution Date and attach that list as an Exhibit to this Agreement. Notwithstanding anything to the contrary in the Option Agreements or any other agreement, instrument or arrangement to the contrary, the Company will withhold from the shares of the Common Stock otherwise issuable upon such exercise of the Akcea Option Agreements, a number of whole shares of Common Stock having a fair market value determined by the Company as of the date of exercise equal to the minimum amount of tax required to be withheld by law, as provided and in accordance with the terms of Section 14(b) of the Akcea Option Agreements.  The remaining terms of the Option Agreements shall continue to apply until the completion of the exercise of the options. Except as otherwise set forth in a possible written consulting agreement between Employee and the Company, Employee acknowledges and agrees that as of the Separation Date: (i) Employee shall not be eligible for any additional vesting under the Option Agreements; (ii) all options with respect to unvested shares under the Option Agreements shall be terminated, and (iii) Employee holds no other option, equity appreciation, restricted stock or similar awards or any other rights with respect to any shares of the Common Stock of the Company or any other equity of the Company, except for Employee’s restricted stock units with the Company which will be governed by their terms, and any shares of Company and/or Ionis that Employee purchased as part of an employee stock purchase plan.

Shares acquired upon exercise of the Option Agreements (“Option Shares”) and any other shares of Company Common Stock or Ionis common stock currently owned by Employee, including shares that have been issued pursuant to restricted stock units or purchased pursuant to an employee stock purchase plan (“Additional Shares”) shall promptly be transferred to a broker designated by Employee to the Company or Ionis in writing.  As of the Effective Date, all restrictions upon the retention, sale, transfer, exchange or other disposition or exercise of rights or incidents of ownership by Employee (or Employee’s representative(s) or agent(s)), directly or indirectly, of the Option Shares or the Additional Shares imposed by the Option Agreements, or any other plans, programs or arrangements established, maintained or administered by the Company shall terminate and be unenforceable, except that any shares purchased pursuant to an employee stock purchase plan will be subject to a six-month holding period following their purchase date.  In addition, Employee acknowledges that under applicable law she is precluded from trading her Company and Ionis shares when she is in possession of material non-public information.

(c)Healthcare Continuation Coverage.  If Employee timely elects to receive continued healthcare coverage pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall directly pay any applicable Company COBRA premiums necessary to continue Employee’s coverage as in effect on the Separation Date, such payment to continue until the earlier of (i) the last day of the twelfth (12th) month anniversary following the SeparationDate; or (ii) the date Employee first becomes eligibleafter the Separation Date to enroll in a group health insurance plan offered by another employer or entity in connection with Employee’s provision of services to such employer or entity.Employee agrees to immediately notify the Company in writing of any such enrollment or eligibility for enrollment and the Company’s obligations to pay any COBRA premiums for all periods after the effective date of such enrollment or eligibility will cease. Except as provided in this Agreement, Employee acknowledges that she shall be solely responsible for all matters relating to Employee’s continuation of coverage pursuant to COBRA, including, without limitation, Employee’s election of such coverage and her timely payment of her share of the applicable premiums.

(d)Taxes.  Employee understands and agrees that all payments under this Section 3 will be subject to appropriate tax withholding and other deductions.  To the extent any taxes may be payable by Employee for the benefits provided to her by this Section 3 beyond those withheld by the Company (including any taxes withheld under Section 3(b)), Employee agrees to pay them herself and to indemnify and hold the Company and the other entities released herein harmless for any tax claims or penalties, and associated attorneys’ fees and costs, resulting from any failure by her to make required payments.

The terms of this Agreement shall be construed and administered in a manner calculated to satisfy the short-term deferral exception under Treas. Reg. Section 1.409A-1(b) (4); the separation pay plan exception under Treas. Reg. Section 1.409A-1(b) (9) (iii); and/or the welfare benefit exception under Treas. Reg. 1.409A-1(b) (9) (v) to Internal Revenue Code Section 409A and the applicable regulations and guidance promulgated thereunder (“Section 409A”). Any reference in this Agreement to a separation from or termination of employment (or similar term) means a “separation from service” as defined in Section 409A and the applicable guidance issued thereunder.  If and to the extent that this Agreement fails to satisfy an exception to Section 409A, it will be construed and administered in accordance therewith to the maximum extent permitted by law. If payment of any amount subject to Section 409A is triggered by a separation from service that occurs while Employee is a “specified employee” (as defined by Section 409A) with, and if such amount is scheduled to be paid within six (6) months after such separation from service, the amount shall accrue without interest and shall be paid the first business day after the end of such six-month period, or, if earlier, within 15 days after the appointment of the personal representative or executor of Employee’s estate following her death.  All rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits for purposes of applying Section 409A.  If any payment subject to Section 409A is contingent on the delivery of a release by Employee and could occur in either of two years, the payment will occur in the later year. Nothing in this Agreement shall be construed as a guarantee of any particular tax treatment to Employee.  Employee shall be solely responsible for the tax consequences with respect to all amounts payable under this Agreement, and in no event shall the Company have any responsibility or liability if this Agreement does not meet any applicable requirements of Section 409A.

(e)Sole Separation Benefit.  Employee agrees that the payments provided by this Section 3 are not required under the Company’s normal policies and procedures, and are provided as a severance solely in connection with this Agreement.  Employee acknowledges and agrees that the payments referenced in this Section 3 constitute adequate and valuable consideration, in and of themselves, for the promises contained in this Agreement. Employee acknowledges and agrees that the Separation Benefit is not intended to and does not constitute a severance plan or confer a benefit on anyone other than the parties.

4.Full Payment.  Employee acknowledges that the payment and arrangements herein shall constitute full and complete satisfaction of any and all amounts properly due and owing to Employee as a result of her employment with the Company and the termination thereof, including, but not limited to, salary, wages, bonuses, accrued vacation/paid time off, notice periods, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to Employee.  

5.Employee’s Release of Claims.  Employee hereby agrees and acknowledges that by signing this Agreement and accepting the severance payments to be provided to her, and other good and valuable consideration provided for in this Agreement, Employee is waiving her right to assert any form of legal claim against the Company¹ of any kind whatsoever from the beginning of time through the Effective Date. Employee’s waiver and release herein is intended to bar any form of legal claim, charge, complaint or any other form of action (jointly referred to as “Claims”) against the Company seeking any form of relief including, without limitation, equitable relief (whether declaratory, injunctive or otherwise), the recovery of any damages or any other form of monetary recovery whatsoever (including, without limitation, back pay, front pay, compensatory damages, emotional distress damages, punitive damages, attorneys’ fees and any other costs) against the Company, up through the Effective Date.

Without limiting the foregoing general waiver and release of claims, Employee specifically waives and releases the Company from any Claim arising from or related to Employee’s employment relationship with the Company or the termination thereof, including, without limitation:

(i)Claims under any state or federal discrimination, fair employment practices or other employment related statute, regulation or executive order (as they may have been amended through the Effective Date) prohibiting discrimination or harassment based upon any protected status including, without limitation, race, national origin, age, gender, marital status, disability, veteran status or sexual orientation.  Without limitation, specifically included in this paragraph are any Claims arising under the federal Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Civil Rights Acts of 1866 and 1871, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act, the Americans With Disabilities Act and any similar state or local statute or regulation.

¹  For purposes of this release of claims, the term “Company” shall include Akcea Therapeutics, Inc. and its divisions, affiliates, parents and subsidiaries, and their respective officers, directors, shareholders, owners, employees and assigns.

(ii)Claims under any other state or federal employment related statute, regulation or executive order (as they may have been amended through the Effective Date) relating to wages, hours or any other terms and conditions of employment.  Without limitation, specifically included in this paragraph are any Claims arising under the Fair Labor Standards Act, the Family and Medical Leave Act of 1993, the National Labor Relations Act, the Employee Retirement Income Security Act of 1974, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and any similar state or local statute or regulation.  

(iii)Claims under any state or federal common law theory including, without limitation, wrongful discharge, breach of express or implied contract, promissory estoppel, unjust enrichment, breach of a covenant of good faith and fair dealing, violation of public policy, defamation, interference with contractual relations, intentional or negligent infliction of emotional distress, invasion of privacy, misrepresentation, deceit, fraud or negligence.

(iv)Any other Claim arising under local, state or federal law.

Section 1542 of the Civil Code of the State of California (“Section 1542”) provides, generally, that a release does not extend to unknown claims.  Specifically, Section 1542 of the Civil Code of the State of California states:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR OR THE RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”

Notwithstanding the provisions of Section 1542 and for the purpose of implementing a full and complete release, Employee expressly acknowledges and agrees that this Agreement releases all claims existing or arising prior to her execution of this Agreement which she has or may have against the Company, whether the claims are known or unknown and suspected or unsuspected by Employee and she forever waives all inquiries and investigations into any and all of these claims.

Notwithstanding the foregoing, this paragraph does not release the Company from any obligation expressly set forth in this Agreement.  Further, Employee’s waivers and releases in this Agreement do not apply to any claims that cannot be waived or released as a matter of law under applicable, federal, state, or local laws, and Employee’s rights to enforce this Agreement.

Employee and the Company acknowledge that Employee is over the age of 40 and that Employee, therefore, has specific rights under the Age Discrimination in Employment Act (“ADEA”) and the Older Workers Benefit Protection Act (the “OWBPA”), which prohibit discrimination on the basis of age.It is the Company’s desire and intent to make certain that Employee fully understands the provisions and effects of this Agreement, which includes a release of claims under the ADEA and OWBPA.  To that end, Employee has been encouraged and given the opportunity to consult with legal counsel for the purpose of reviewing the terms of this Agreement. Consistent with the provisions of the ADEA and OWBPA, the Company also is providing Employee with twenty-one (21) days in which to consider and accept the terms of this Agreement by signing below and returning it tothe Company at the address below.  Employee may rescind her assent to this Agreement if, within seven (7) days after Employee signs this Agreement, Employee delivers by hand or sends by mail (certified, return receipt and postmarked within such seven (7) day period) a notice of rescission to the Company at 22 Boston Wharf Road, 9^th Floor Boston, MA 02210.

Also, consistent with the provisions of the ADEA, nothing in this release shall be deemed to prohibit Employee from challenging the validity of this release. Employee understands that nothing in this Agreement shall in any way limit or prohibit Employee from engaging for a lawful purpose in any Protected Activity, provided, however, that Employee agrees not to seek or accept any monetary award from such a proceeding (except with respect to proceedings before the Securities and Exchange Commission). For purposes of this Agreement, “Protected Activity” shall mean filing a charge, complaint, or report with, or otherwise communicating with, cooperating with or participating in any investigation or proceeding that may be conducted by, any federal, state or local government agency or commission, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, and the National Labor Relations Board (“Government Agencies”). Employee understands that in connection with such Protected Activity, Employee is permitted to disclose documents or other information as permitted by law, and without giving notice to, or receiving authorization from, the Company. Notwithstanding the foregoing, Employee agrees to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute Company confidential information to any parties other than the relevant Government Agencies. Employee further understands that “Protected Activity” does not include the disclosure of any Company attorney-client privileged communications, and that any such disclosure without the Company’s written consent shall constitute a material breach of this Agreement. In addition, pursuant to the Defend Trade Secrets Act of 2016, Employee is notified that an individual will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made in confidence to a federal, state, or local government official (directly or indirectly) or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if (and only if) such filing is made under seal. In addition, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the individual’s attorney and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

Employee acknowledges that she has carefully read and understands the scope and effect of the provisions of this Agreement, has been advised to consult with an attorney and that she has had the opportunity to do so.  Employee has not relied upon any representations or statements made by the Company that are not specifically set forth in this Agreement.

Employee acknowledges and agrees that, but for providing this waiver and release of claims, Employee would not be receiving the severance being provided to her under this Agreement.

6.Non-Disparagement, Transition, Transfer of Company Property and Non-Competition Agreement.  Both parties further agree that:

(a)Mutual Non-Disparagement.  Employee agrees that she will not make any public media statements with respect to the Company without the prior approval of the Company and that she will not disparage or knowingly make false or defamatory statements about the Company or Ionis, or their respective directors, officers, or affiliates in any manner whatsoever (including through the use of any social networking sites, blogs, forums or any similar medium, including in response to inquiries from other users of such medium) whether directly or indirectly through a third party. The Company and Ionis agree to instruct their respective senior corporate executives having the position of Vice President (or Senior Vice President with respect to Ionis) or above and the current members of their respective Boards of Directors and all members of Investor Relations and Corporate Communications Departments in the case of both Ionis and Akcea not to disparage or knowingly make false or defamatory statements regarding Employee. This Section shall not apply to communications required by law, or that are otherwise privileged as a matter of law. Employee’s non-disparagement obligations under this Section do not interfere with or restrict her ability to communicate with any federal, state, or local agency, including any with which a charge has been filed.

(b)Transition.  Each of the Company, Ionis and Employee shall use their respective reasonable efforts to cooperate with each other in good faith to facilitate a smooth transition of Employee’s duties to other employee(s) of the Company prior to the Separation Date.  The Company and Ionis shall each provide Employee with a draft for her review and comment, and will endeavor in good faith to implement any reasonable comments, prior to making or releasing any announcement, filing or other communication, publicly or with respect to the primary internal announcement, arising out of or relating to Employee or Employee’s separation from service.  Each of the Company, Ionis and Employee will cooperate in good faith to agree on a set of talking points for use with internal communications.  To the extent information arising out of or relating to Employee or Employee’s separation from service information has already been publicly disclosed without violating this Agreement, and party may subsequently disclose the same information to the public without the consent of the party.

(c)Transfer of Company Property.  On or before the Separation Date, Employee shall turn over to the Company all files, memoranda, records, and other documents, and any other physical or personal property which are the property of the Company and which she had in her possession, custody or control at the time she signed this Agreement.

(d)Confidential Information.

(i) The Company possesses confidential information that has been created, discovered, developed by, or otherwise become known to the Company (including, without limitation, information created, discovered, developed or made known by Employee arising from her employment with the Company).  All such information is hereinafter referred to as “Confidential Information.”  By way of illustration, but not limitation, Confidential Information includes:  (A) inventions, developments, designs, improvements, trade secrets, ideas, formulas, source and object codes, programs, other works of authorship, organisms, plasmids, expression vectors, know-how, processes, cell lines, discoveries, techniques, data and documentation systems (hereinafter collectively referred to as “Inventions”); and (B) information regarding plans for research, development, new products, clinical data, pre-clinical product data, clinical trial patient data, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, as well as information regarding the skills and compensation of employees of the Company.  All Confidential Information is the sole property of the Company and its assigns, and the Company and its assigns will be the sole owner of all patents, copyrights and other rights in connection with such Confidential Information.  For five years after the Effective Date, Employee will keep in confidence and trust all Confidential Information and will not use, disclose, lecture upon or publish any Confidential Information or anything related to such information without the Company’s prior written consent.  Any permitted disclosures will be made in strict compliance with the Company publication and presentation clearance policy.

(ii) Employee also understands that the Company has received valuable information from third parties that is confidential or proprietary (“Third-Party Information”) subject to a duty on the part of the Company to maintain the confidentiality of such information and to use it only for certain limited purposes.  For five years after the Effective Date, Employee will hold Third-Party Information in the strictest confidence and will not disclose or use Third-Party Information except as permitted by the agreement between the Company and such third party, unless expressly authorized to act otherwise by an officer of the Company in writing.  Any permitted disclosures will be made in strict compliance with the Company publication and presentation clearance policy.

(iii) The obligations of this Section 6(d) will not apply to information that Employee can establish by written records: (i) was known by Employee prior to the receipt of Confidential Information; (ii) was disclosed to Employee by a third party having the right to do so; (iii) was, or subsequently became, in the public domain through no fault of

Employee, its officers, directors, affiliates employees or agents; (iv) was independently developed by Employee without use of Confidential Information; or (v) was disclosed by Employee pursuant to any judicial, governmental or stock exchange request, requirement or order, so long as Employee provided the Company with sufficient prior notice in order to allow the Company to contest such request, requirement or order.

7.Employee Representations; Company Representations.  Employee warrants and represents that (a) she has not filed or authorized the filing of any complaints, charges or lawsuits against the Company or any affiliate of the Company with any governmental agency or court, and that if, unbeknownst to Employee, such a complaint, charge or lawsuit has been filed on her behalf, she will immediately cause it to be withdrawn and dismissed, (b) she has reported all hours worked as of the date of this Agreement and has been paid all compensation, wages, bonuses, commissions, and/or benefits to which she may be entitled and no other compensation, wages, bonuses, commissions and/or benefits are due to her, except as provided in this Agreement, (c) she has no known workplace injuries or occupational diseases and has been provided and/or has not been denied any leave requested under the Family and Medical Leave Act or any similar state law, (d) the execution, delivery and performance of this Agreement by Employee does not and will not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Employee is a party or any judgment, order or decree to which Employee is subject, and (e) upon the execution and delivery of this Agreement by the Company and Employee, this Agreement will be a valid and binding obligation of Employee, enforceable in accordance with its terms.  The Company and Ionis, each represent that it is not aware of any facts or circumstances upon which it intends to assert, or is actively considering asserting, a claim against Employee arising out of or relating to her employment or the termination of that employment, and upon the execution and delivery of this Agreement by the Company and Employee, this Agreement will be a valid and binding obligation of the Company (and Ionis with respect to Section 6(a), 6(b), 7 and 9 hereof), enforceable in accordance with its terms.

8.No Assignment by Employee.  Employee warrants and represents that no portion of any of the matters released herein, and no portion of any recovery or settlement to which Employee might be entitled, has been assigned or transferred to another person, firm or corporation not a party to this Agreement, in any manner, including by way of subrogation or operation of law or otherwise.  If any claim, action, demand or suit should be made or instituted against the Company or any other releasee because of any actual assignment, subrogation or transfer by Employee, Employee agrees to indemnify and hold harmless the Company and all other releasees against such claim, action, suit or demand, including necessary expenses of investigation, attorneys’ fees and costs.  In the event of Employee’s death, this Agreement shall inure to the benefit of Employee and Employee’s executors, administrators, heirs, distributees, devisees, and legatees.  None of Employee’s rights or obligations may be assigned or transferred by Employee, other than Employee’s rights to payments hereunder, which may be transferred only upon Employee’s death by will or operation of law.

9.Confidentiality.  Employee and the Company and Ionis mutually agree to maintain in complete confidence the existence of this Agreement, the contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as “Separation Information”) provided that nothing herein shall prevent the Company or Ionis from meeting its obligations under applicable law or binding agreements.  Except as required by law, Employee may disclose Separation Information only to Employee’s immediate family members, the Court in any proceedings to enforce the terms of this Agreement, Employee’s counsel, and Employee’s accountant and any professional tax advisor to the extent that they need to know the Separation Information in order to provide advice on tax treatment or to prepare tax returns, and must prevent disclosure of any Separation Information to all other third parties.  Employee will not publicize, directly or indirectly, any Separation Information.

10.Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of California or, where applicable, United States federal law, in each case, without regard to any conflicts of laws provisions or those of any state other than California.

11.Miscellaneous.  Employee further acknowledges that, other than the Option Agreements this Agreement shall supersede each agreement entered into between Employee and the Company regarding Employee’s employment, including, without limitation, the Offer Letter and the Severance Letter, and each such agreement shall be deemed terminated and of no further effect as of the Separation Date.  Employee acknowledges that there are no other agreements, written, oral or implied, and that she may not rely on any prior negotiations, discussions, representations or agreements.  This Agreement may be modified only in writing, and such writing must be signed by both parties and recited that it is intended to modify this Agreement.  This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

12.Company Assignment and Successors.  The Company shall assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise).  This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns, personnel and legal representatives.

13.Employee’s Cooperation.  After the Separation Date, Employee shall use reasonable best efforts to cooperate with the Company and its affiliates, upon the Company’s reasonable request, with respect to any internal investigation or administrative, regulatory or judicial proceeding involving matters within the scope of Employee’s duties and responsibilities to the Company or its affiliates during her employment with the Company.

(Signature page(s) follow)

IN WITNESS WHEREOF, the undersigned have caused this Separation Agreement to be duly executed and delivered as of the date indicated next to their respective signatures below.

	EMPLOYEE
DATED: September 18, 2019	By:	/s/ Sarah Boyce
	Name:	Sarah Boyce
	AKCEA THERAPEUTICS, INC.
DATED: September 18, 2019	By:	/s/ Sandford D. Smith
	Name:	Sandford D. Smith
	Title:	Compensation Committee Chairman
	Solely for purposes of Sections 3(b), 6(a), 6(b), 7 and 9 hereof:
	IONIS PHARMACEUTICALS, INC.
	By:	/s/ Patrick O’Neil
	Name:	Patrick O’Neil
	Title:	Senior Vice President, Legal and General Counsel

Exhibit A

Options Outstanding by Price

As of Date:  09/18/2019

Status: Active

Participant ID is 3111

Name	ID	Number	Option Date	Expiration Date	Remaining Life in Years	Option Price	Shares Outstanding
Boyce, Sarah	3111	0001580	4/17/2018	4/16/2028	8.58	23.93	16,712.00
Boyce, Sarah	3111	0001581	4/17/2018	4/16/2028	8.58	23.93	983,288.00
Boyce, Sarah	3111	0001818	1/2/2019	1/1/2029	9.28	30.73	3,254.00
Boyce, Sarah	3111	0001819	1/2/2019	1/1/2029	9.28	30.73	169,746.00
							1,173,000

91369972v.7

EX-10.7

Exhibit 10.7

SEPARATION AGREEMENT

This Separation Agreement (this “Agreement”) by and between Jeffrey Goldberg (“Employee”) and Akcea Therapeutics, Inc., a Delaware corporation (the “Company”), is made and entered into as of September 18, 2019 (the “Execution Date”) and is effective eight (8) days thereafter (the “Effective Date”), unless Employee rescinds his acceptance of this Agreement as provided in Section 5 below, with reference to the following facts:

The Company and Employee are parties to the Offer Letter between Company and Employee, January 5, 2015 (the “Offer Letter”) and the Severance and Equity Award Vesting Acceleration Letter dated November 28, 2017 (the “Severance Letter”);

Executive signed an Employee Confidential Information, Inventions Assignment, Non-Competition and Non-Solicitation Agreement with the Company dated November 28, 2017, a copy of which is attached as Exhibit A (the “Non-Competition Agreement”), which contains certain restrictive covenants, applicable during and after the term of his employment with the Company, including a non-competition and non-solicitation covenant and a covenant against the disclosure of confidential information of the Company;

The Employee’s employment with the Company shall terminate effective as of September 19, 2019 (the “Separation Date”), subject to the terms and conditions set forth in this Agreement; and

The Employee and Company desire to enter into this Agreement to memorialize the terms and conditions of Employee’s separation from the Company;

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereby agree as follows:

1.Separation Date.  Employee’s employment with the Company shall end on the Separation Date. Following the Separation Date, Employee shall not be and shall not represent himself as an employee or agent of the Company. As of the Execution Date, Employee shall be deemed to have resigned (and hereby memorializes such resignation) from each and every other office, position or responsibility in, including as an officer of the Company, in which Employee served for the Company and its respective affiliates, subsidiaries and divisions.

2.Final Paycheck; Payment of Accrued Wages and Expenses.  

(a)Final Paycheck.  On the Separation Date, the Company will pay Employee all accrued but unpaid base salary and all accrued and unused vacation earned through the Separation Date, subject to standard payroll deductions and withholdings.  Employee is entitled to these payments regardless of whether Employee executes this Agreement.

(b)Business Expenses.  The Company shall reimburse Employee for all outstanding expenses incurred on or prior to the Separation Date which are consistent with the Company’s policies in effect on the Execution Date with respect to travel, entertainment and other business expenses, subject to the Company’s requirements with respect to reporting and documenting such expenses.

3.Separation Payments and Benefits.  Without admission of any liability, fact or claim, the Company hereby agrees, subject to this Agreement becoming effective and irrevocable, as well as Employee’s performance of his continuing obligations pursuant to this Agreement, to provide Employee the severance benefits set forth below (the “Separation Benefit”).  Specifically, the Company and Employee agree as follows:

(a)Severance.  The Company shall pay to Employee on the first business day after the end of the six-month period following the Separation Date, Four Hundred Sixty Eight Thousand, Four Hundred Sixty Seven Dollars ($468,467) which represents twelve (12) months of Employee’s annual base salary at the rate in effect immediately prior to the Separation Date.

(b)Exercise of Options; Shares Acquired.  Employee and the Company agree that Employee will exercise the Employee’s Option Award Agreements with the Company listed on Exhibit B hereto (the “Option Agreements”) to purchase shares of Common Stock (as defined in the Option Agreements) on the Effective Date subject to the terms of the Option Agreements and this Agreement, representing 100% of the number of shares which have vested as of the Effective Date which are “in the money”.  Notwithstanding Section 4 of the Option Agreements or any other agreement, instrument or arrangement to the contrary: (i) Employee shall be entitled to exercise 100% of the vested options subject to the Option Agreements pursuant to a “net exercise” arrangement as described in Section 4(d) of the Option Agreements and thereupon to acquire ownership and title to the resulting net number of shares of Common Stock subject to such vested options; and (ii) the Company will withhold from the shares of the Common Stock otherwise issuable upon such exercise of the Option Agreements, a number of whole shares of Common Stock having a fair market value determined by the Company as of the date of exercise equal to the minimum amount of tax required to be withheld by law, as provided and in accordance with the terms of Section 14(b) of the Option Agreements.  The remaining terms of the Option Agreements shall continue to apply until the completion of the exercise of the Option Agreements on the Effective Date.  Except as otherwise set forth in a written consulting agreement between Employee and the Company, Employee acknowledges and agrees that as of the Separation Date: (i) Employee shall not be eligible for any additional vesting under the Option Agreements; (ii) all options with respect to unvested shares under the Option Agreements shall be terminated, and (iii) Employee holds no other option, equity appreciation, restricted stock or similar awards or any other rights with respect to any shares of the Common Stock of the Company or any other equity of the Company.

Shares of Common Stock of the Company purchased pursuant to an employee stock purchase plan (the “ESPP Shares”) or acquired and deliverable to Employee after implementation of the net exercise and withholding provisions of this Section 3(b) (the “Net Shares”), shall promptly but in no event later than September 30, 2019 be transferred to a broker designated by Employee to the Company in writing not later than the Effective Date, which shares shall be registered and free of restrictive legends or other similar limitations on transfer except that the ESPP Shares will be subject to a six-month holding period following their purchase date.  As of the Effective Date, all restrictions upon the retention, sale, transfer, exchange or other disposition or exercise of rights or incidents of ownership by Employee (or Employee’s representative(s) or agent(s), directly or indirectly, of the Net Shares imposed by the Option Agreements, or any other plans, programs or arrangements established, maintained or administered by the Company shall terminate and be unenforceable.  The Company will terminate Employee’s Akcea Therapeutics, Inc. 10B5-1 Trading Plan effective December 10, 2018 as of the Effective Date.

(c)Healthcare Continuation Coverage.  If Employee timely elects to receive continued healthcare coverage pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall directly pay for any applicable Company COBRA premiums necessary to continue Employee’s coverage as in effect on the Separation Date, such payment to continue until the earlier of (i) the last day of the twelfth (12th) month anniversary following the SeparationDate; or (ii) the date Employee first becomes eligibleafter the Separation Date to enroll in a group health insurance plan offered by another employer or entity in connection with Employee’s provision of services to such employer or entity.Employee agrees to immediately notify the Company in writing of any such enrollment or eligibility for enrollment and the Company’s obligations to pay any COBRA premiums for all periods after the effective date of such enrollment or eligibility will cease. Except as provided in this Agreement, Employee acknowledges that he shall be solely responsible for all matters relating to Employee’s continuation of coverage pursuant to COBRA, including, without limitation, Employee’s election of such coverage and his timely payment of his share of the applicable premiums.

(d)Taxes.  Employee understands and agrees that all payments under this Section 3 will be subject to appropriate tax withholding and other deductions.  To the extent any taxes may be payable by Employee for the benefits provided to him by this Section 3 beyond those withheld by the Company (including taxes withheld under Section 3(b)), Employee agrees to pay them himself and to indemnify and hold the Company and the other entities released herein harmless for any tax claims or penalties, and associated attorneys’ fees and costs, resulting from any failure by he to make required payments.

The terms of this Agreement shall be construed and administered in a manner calculated to satisfy the short-term deferral exception under Treas. Reg. Section 1.409A-1(b) (4); the separation pay plan exception under Treas. Reg. Section 1.409A-1(b) (9)(iii); and/or the welfare benefit exception under Treas. Reg. 1.409A-1(b)(9)(v) to Internal Revenue Code Section 409A and the applicable regulations and guidance promulgated thereunder (“Section 409A”). Any reference in this Agreement to a separation from or termination of employment (or similar term) means a “separation from service” as defined in Section 409A and the applicable guidance issued thereunder.  If and to the extent that this Agreement fails to satisfy an exception to Section 409A, it will be construed and administered in accordance therewith to the maximum extent permitted by law. If payment of any amount subject to Section 409A is triggered by a separation from service that occurs while Employee is a “specified employee” (as defined by Section 409A) with, and if such amount is scheduled to be paid within six (6) months after such separation from service, the amount shall accrue without interest and shall be paid the first business day after the end of such six-month period, or, if earlier, within 15 days after the appointment of the personal representative or executor of Employee’s estate following his death.  All rights to payments and benefits hereunder shall be treated as rights to receive a series of separate payments and benefits for purposes of applying Section 409A.  If any payment subject to Section 409A is contingent on the delivery of a release by Employee and could occur in either of two years, the payment will occur in the later year. Nothing in this Agreement shall be construed as a guarantee of any particular tax treatment to Employee.  Employee shall be solely responsible for the tax consequences with respect to all amounts payable under this Agreement, and in no event shall the Company have any responsibility or liability if this Agreement does not meet any applicable requirements of Section 409A.

(e)Sole Separation Benefit.  Employee agrees that the payments provided by this Section 3 are not required under the Company’s normal policies and procedures, and are provided as a severance solely in connection with this Agreement.  Employee acknowledges and agrees that the payments referenced in this Section 3 constitute adequate and valuable consideration, in and of themselves, for the promises contained in this Agreement. Employee acknowledges and agrees that the Separation Benefit is not intended to and does not constitute a severance plan or confer a benefit on anyone other than the parties.

4.Full Payment.  Employee acknowledges that the payment and arrangements herein shall constitute full and complete satisfaction of any and all amounts properly due and owing to Employee as a result of his employment with the Company and the termination thereof, including, but not limited to, salary, wages, bonuses, accrued vacation/paid time off, notice periods, premiums, leaves, housing allowances, relocation costs, interest, severance, outplacement costs, fees, reimbursable expenses, commissions, stock, stock options, vesting, and any and all other benefits and compensation due to Employee.  

5.Employee’s Release of Claims.  Employee hereby agrees and acknowledges that by signing this Agreement and accepting the severance payments to be provided to his, and other good and valuable consideration provided for in this Agreement, Employee is waiving his right to assert any form of legal claim against the Company¹ of any kind whatsoever from the beginning of time through the Effective Date. Employee’s waiver and release herein is intended to bar any form of legal claim, charge, complaint or any other form of action (jointly referred to as “Claims”) against the Company seeking any form of relief including, without limitation, equitable relief (whether declaratory, injunctive or otherwise), the recovery of any damages or any other form of monetary recovery whatsoever (including, without limitation, back pay, front pay, compensatory damages, emotional distress damages, punitive damages, attorneys’ fees and any other costs) against the Company, up through the Effective Date.

Without limiting the foregoing general waiver and release of claims, Employee specifically waives and releases the Company from any Claim arising from or related to Employee’s employment relationship with the Company or the termination thereof, including, without limitation:

(i)Claims under any state or federal discrimination, fair employment practices or other employment related statute, regulation or executive order (as they may have been amended through the Effective Date) prohibiting discrimination or harassment based upon any protected status including, without limitation, race, national origin, age, gender, marital status, disability, veteran status or sexual orientation.  Without limitation, specifically included in this paragraph are any Claims arising under the federal Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the Civil Rights Acts of 1866 and 1871, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Equal Pay Act, the Americans With Disabilities Act and any similar Massachusetts or other state statute.

¹  For purposes of this release of claims, the term “Company” shall include Akcea Therapeutics, Inc. and its divisions, affiliates, parents and subsidiaries, and their respective officers, directors, shareholders, owners, employees and assigns.

(ii)Claims under any other state or federal employment related statute, regulation or executive order (as they may have been amended through the Effective Date) relating to wages, hours or any other terms and conditions of employment.  Without limitation, specifically included in this paragraph are any Claims arising under the Fair Labor Standards Act, the Family and Medical Leave Act of 1993, the National Labor Relations Act, the Employee Retirement Income Security Act of 1974, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) and any similar Massachusetts or other state statute.  

(iii)Claims under any state or federal common law theory including, without limitation, wrongful discharge, breach of express or implied contract, promissory estoppel, unjust enrichment, breach of a covenant of good faith and fair dealing, violation of public policy, defamation, interference with contractual relations, intentional or negligent infliction of emotional distress, invasion of privacy, misrepresentation, deceit, fraud or negligence.

(iv)Any other Claim arising under state or federal law.

Notwithstanding the foregoing, this Section shall not release the Company from any obligation expressly set forth in this Agreement, nor is Employee releasing any claims to vested benefits (e.g., vested options, Employee’s vested 401(k) balance) or to any rights to indemnification that Employee may have pursuant to insurance policy, Company by-law, charter or operating agreement, and/or applicable law.

Employee and the Company acknowledge that Employee is over the age of 40 and that Employee, therefore, has specific rights under the Age Discrimination in Employment Act (“ADEA”) and the Older Workers Benefit Protection Act (the “OWBPA”), which prohibit discrimination on the basis of age.  It is the Company’s desire and intent to make certain that Employee fully understands the provisions and effects of this Agreement, which includes a release of claims under the ADEA and OWBPA.  To that end, Employee has been encouraged and given the opportunity to consult with legal counsel for the purpose of reviewing the terms of this Agreement. Consistent with the provisions of the ADEA and OWBPA, the Company also is providing Employee with twenty-one (21) days in which to consider and accept the terms of this Agreement by signing below and returning it to the Company at the address below.  Employee may rescind his assent to this Agreement if, within seven (7) days after Employee signs this Agreement, Employee delivers by hand or sends by mail (certified, return receipt and postmarked within such seven (7) day period) a notice of rescission to the Company at 22 Boston Wharf Road, 9^th Floor Boston, MA 02210.

Also, consistent with the provisions of the ADEA, nothing in this release shall be deemed to prohibit Employee from challenging the validity of this release. Employee understands that nothing in this Agreement shall in any way limit or prohibit Employee from engaging for a lawful purpose in any Protected Activity, provided, however, that Employee agrees not to seek or accept any monetary award from such a proceeding (except with respect to proceedings before the Securities and Exchange Commission). For purposes of this Agreement, “Protected Activity” shall mean filing a charge, complaint, or report with, or otherwise communicating with, cooperating with or participating in any investigation or proceeding that may be conducted by, any federal,

state or local government agency or commission, including the Securities and Exchange Commission, the Equal Employment Opportunity Commission, the Occupational Safety and Health Administration, and the National Labor Relations Board (“Government Agencies”). Employee understands that in connection with such Protected Activity, Employee is permitted to disclose documents or other information as permitted by law, and without giving notice to, or receiving authorization from, the Company. Notwithstanding the foregoing, Employee agrees to take all reasonable precautions to prevent any unauthorized use or disclosure of any information that may constitute Company confidential information to any parties other than the relevant Government Agencies. Employee further understands that “Protected Activity” does not include the disclosure of any Company attorney-client privileged communications, and that any such disclosure without the Company’s written consent shall constitute a material breach of this Agreement. In addition, pursuant to the Defend Trade Secrets Act of 2016, Employee is notified that an individual will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (i) is made in confidence to a federal, state, or local government official (directly or indirectly) or to an attorney solely for the purpose of reporting or investigating a suspected violation of law, or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if (and only if) such filing is made under seal. In addition, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the individual’s attorney and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant to court order.

Employee acknowledges that he has carefully read and understands the scope and effect of the provisions of this Agreement, has been advised to consult with an attorney and that he has had the opportunity to do so.  Employee has not relied upon any representations or statements made by the Company that are not specifically set forth in this Agreement.

Employee acknowledges and agrees that, but for providing this waiver and release of claims, Employee would not be receiving the severance being provided to his under this Agreement.

6.Non-Disparagement, Transition, Transfer of Company Property and Non-Competition Agreement.  Both parties further agree that:

(a)Mutual Non-Disparagement.  Employee agrees that he will not make any public media statements with respect to the Company without the prior approval of the Company and that he will not disparage or knowingly make false or defamatory statements about the Company or Ionis Pharmaceuticals, Inc. (“Ionis”), or their respective directors, officers, or affiliates in any manner whatsoever (including through the use of any social networking sites, blogs, forums or any similar medium, including in response to inquiries from other users of such medium) whether directly or indirectly through a third party. The Company and Ionis agree to instruct their respective senior corporate executives having the position of Vice President (or Senior Vice President with respect to Ionis) or above and the current members of their respective Boards of Directors and all members of Investor Relations and Corporate Communications Departments in the case of both Ionis and the Company not to disparage or knowingly make false or defamatory statements regarding Employee. This Section shall not apply to communications required by law, or that are otherwise privileged as a matter of law. Employee’s non-disparagement obligations under this Section do not interfere with or restrict his ability to communicate with any federal, state, or local agency, including any with which a charge has been filed.

(b)Transition.  Each of the Company, Ionis and Employee shall use their respective reasonable efforts to cooperate with each other in good faith to facilitate a smooth transition of Employee’s duties to other employee(s) of the Company prior to the Separation Date.

(c)Transfer of Company Property.  On or before the Separation Date, Employee shall turn over to the Company all files, memoranda, records, and other documents, and any other physical or personal property which are the property of the Company and which he had in his possession, custody or control at the time he signed this Agreement.

(d)Continuation of Non-Competition Agreement Prior Covenants.  Executive acknowledges and agrees that he is bound by and will strictly comply with the terms of the Non-Competition Agreement, including but not limited to the terms of Sections 1,2,7,8 and 15 of the Non-Competition Agreement and all related enforcement provisions which by their terms survive any termination of employment.

7.Employee Representations; Company Representations.  Employee warrants and represents that (a) he has not filed or authorized the filing of any complaints, charges or lawsuits against the Company or any affiliate of the Company with any governmental agency or court, and that if, unbeknownst to Employee, such a complaint, charge or lawsuit has been filed on his behalf, he will immediately cause it to be withdrawn and dismissed, (b) he has reported all hours worked as of the date of this Agreement and has been paid all compensation, wages, bonuses, commissions, and/or benefits to which he may be entitled and no other compensation, wages, bonuses, commissions and/or benefits are due to his, except as provided in this Agreement, (c) he has no known workplace injuries or occupational diseases and has been provided and/or has not been denied any leave requested under the Family and Medical Leave Act or any similar state law, (d) the execution, delivery and performance of this Agreement by Employee does not and will not conflict with, breach, violate or cause a default under any agreement, contract or instrument to which Employee is a party or any judgment, order or decree to which Employee is subject, and (e) upon the execution and delivery of this Agreement by the Company and Employee, this Agreement will be a valid and binding obligation of Employee, enforceable in accordance with its terms.  The Company is not aware of any facts or circumstances upon which it intends to assert, or is actively considering asserting, a claim against Employee arising out of or relating to his employment or the termination of that employment, and (ii) upon the execution and delivery of this Agreement by the Company and Employee, this Agreement will be a valid and binding obligation of the Company (and Ionis with respect to Section 6(a), 6(b), 7 and 9 hereof), enforceable in accordance with its terms.

8.No Assignment by Employee.  Employee warrants and represents that no portion of any of the matters released herein, and no portion of any recovery or settlement to which Employee might be entitled, has been assigned or transferred to another person, firm or corporation not a party to this Agreement, in any manner, including by way of subrogation or operation of law or otherwise.  If any claim, action, demand or suit should be made or instituted against the Company or any other releasee because of any actual assignment, subrogation or transfer by Employee, Employee agrees to indemnify and hold harmless the Company and all other releasees against such claim, action, suit or demand, including necessary expenses of investigation, attorneys’ fees and costs.  In the event of Employee’s death, this Agreement shall inure to the benefit of Employee and Employee’s executors, administrators, heirs, distributees, devisees, and legatees.  None of Employee’s rights or obligations may be assigned or transferred by Employee, other than Employee’s rights to payments hereunder, which may be transferred only upon Employee’s death by will or operation of law.

9.Confidentiality.  Employee and the Company and Ionis mutually agree to maintain in complete confidence the existence of this Agreement, the contents and terms of this Agreement, and the consideration for this Agreement (hereinafter collectively referred to as “Separation Information”) provided that nothing herein shall prevent the Company or Ionis from meeting its obligations under applicable law or binding agreements.  Except as required by law, Employee may disclose Separation Information only to Employee’s immediate family members, the Court in any proceedings to enforce the terms of this Agreement, Employee’s counsel, and Employee’s accountant and any professional tax advisor to the extent that they need to know the Separation Information in order to provide advice on this Agreement, tax treatment or to prepare tax returns, and must prevent disclosure of any Separation Information to all other third parties.  Employee will not publicize, directly or indirectly, any Separation Information.

10.Governing Law.  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the Commonwealth of Massachusetts or, where applicable, United States federal law, in each case, without regard to any conflicts of laws provisions or those of any state other than Massachusetts.

11.Miscellaneous.  Employee further acknowledges that, other than the Option Agreements and the Non-Competition Agreement, this Agreement shall supersede each agreement entered into between Employee and the Company regarding Employee’s employment, including, without limitation, the Offer Letter and the Severance Letter, and each such agreement shall be deemed terminated and of no further effect as of the Separation Date.  Employee acknowledges that there are no other agreements, written, oral or implied, and that he may not rely on any prior negotiations, discussions, representations or agreements.  This Agreement may be modified only in writing, and such writing must be signed by both parties and recited that it is intended to modify this Agreement.  This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

12.Company Assignment and Successors.  The Company shall assign its rights and obligations under this Agreement to any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise).  This Agreement shall be binding upon and inure to the benefit of the Company and its successors, assigns, personnel and legal representatives.

13.Employee’s Cooperation.  After the Separation Date, Employee shall use reasonable efforts to cooperate with the Company and its affiliates, upon the Company’s reasonable request, with respect to any internal investigation or administrative, regulatory or judicial proceeding involving matters within the scope of Employee’s duties and responsibilities to the Company or its affiliates during his employment with the Company.

(Signature page(s) follow)

IN WITNESS WHEREOF, the undersigned have caused this Separation Agreement to be duly executed and delivered as of the date indicated next to their respective signatures below.

	EMPLOYEE
DATED: September 18, 2019	By:	/s/ Jeffrey Goldberg
	Name:	Jeffrey Goldberg
	AKCEA THERAPEUTICS, INC.
DATED: September 18, 2019	By:	/s/ Sandford D. Smith
	Name:	Sandford D. Smith
	Title:	Compensation Committee Chairman
	Solely for purposes of Section 6(a), 6(b), 7 and 9 hereof:
	IONIS PHARMACEUTICALS, INC.
	By:	/s/ Patrick O’Neil
	Name:	Patrick O’Neil
	Title:	Senior Vice President, Legal and General Counsel

Exhibit A

AKCEA THERAPEUTICS, INC.

Employee Confidential Information, Inventions Assignment,
Non-Competition and Non-Solicitation Agreement

In consideration of my employment or continued employment by Akcea Therapeutics, Inc., (the “Company”), and the compensation now and hereafter paid to me, I hereby agree as follows:

1.Recognition of Company’s Rights; Nondisclosure.  At all times during the term of my employment and thereafter, I will hold in strictest confidence and will not disclose, use, lecture upon or publish any of the Company’s Confidential Information (defined below), except as such disclosure, use or publication may be required by the Company in connection with my work for the Company, or unless an officer of the Company expressly authorizes such in writing. I will not make any permitted disclosure, use or publication unless such disclosure, use or publication is in strict compliance with the Company’s publication and presentation clearance policy. I will not export, directly or indirectly, any Company products, any direct product thereof, or any related technical data in violation of the United States Department of Commerce’s Export Administration Regulations.

The term “Confidential Information” will mean trade secrets, confidential knowledge, data or any other proprietary information of the Company.  By way of illustration but not limitation, “Confidential Information” includes (a) inventions, mask works, trade secrets, ideas, processes, formulas, source and object codes, data, programs, other works of authorship, know-how, improvements, discoveries, developments, designs and techniques (hereinafter collectively referred to as “Inventions”); and (b) information regarding plans for research, development, new products, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, suppliers and customers; as well as information regarding the skills and compensation of other employees of the Company.

Notwithstanding the foregoing, pursuant to 18 U.S.C. Section 1833(b), I shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that: (1) is made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (2) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  In addition, it is understood that, at all such times, I am free to use information which was known to me prior to employment with Company or which is generally known in the trade or industry through no breach of this Agreement or other act or omission by me.  Furthermore, notwithstanding the foregoing or anything to the contrary in this Agreement or any other agreement between the Company and me, nothing in this Agreement shall limit my right to discuss my employment or report possible violations of law or regulation with the Equal Employment Opportunity Commission, United States Department of Labor, the National Labor Relations Board, the Securities and Exchange Commission, or other federal government agency or similar state or local agency or to discuss the terms and conditions of my employment with others to the extent expressly permitted by Section 7 of the National Labor Relations Act or to the extent that such disclosure is protected under the applicable provisions of law or regulation, including but not limited to “whistleblower” statutes or other similar provisions that protect such disclosure.

I understand that Confidential Information and Third Party Information is never to be used or disclosed by me, as provided in this Section 1.  If a temporal limitation on my obligation not to use or disclose such information is required under applicable law, and the Agreement or its restriction(s) cannot otherwise be enforced, I agree and Company agrees that the two (2) year period after the date my employment ends will be the temporal limitation relevant to the contested restriction, provided, however, that this sentence will not apply to trade secrets protected without temporal limitation under applicable law.  

2.Third Party Information.  I understand, in addition, that the Company has received and in the future will receive from third parties confidential or proprietary information (“Third Party Information”) subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. In addition, Third Party Information will include the confidential or proprietary information of the Company's parent, Ionis Pharmaceuticals, Inc. ("Ionis"). During the term of my employment and thereafter, I will hold Third Party Information in the strictest confidence and will not disclose (except as required to be disclosed in connection with my work for the Company) Third Party Information unless expressly authorized by an officer of the Company in writing.  I will not make any permitted disclosures unless such disclosure is in strict compliance with the Company’s publication and presentation clearance policy.

3.Assignment of Inventions.

3.1Assignment.

(a)Subject to Section 3.1(b) herein, and except for the Excluded Inventions set forth in Exhibit A hereto, I hereby assign to the Company all my right, title and interest throughout the world in and to any and all Inventions (and all patent rights, copyrights, and all other rights in connection therewith, hereinafter referred to as “Proprietary Rights”) whether or not patentable or registrable under patent, copyright, trademark or similar statutes (together with the goodwill associated therewith), made or conceived or reduced to practice or learned by me, either alone or jointly with others, during the period of my employment with the Company (“Work Inventions”) or within 1 year after termination of my employment, which relate to any Work Invention or to any work performed by me while I was employed by the Company. Inventions assigned to the Company by this Paragraph 3 are hereinafter referred to as “Company Inventions.”  I agree, upon request, to execute, verify and deliver assignments of such Proprietary Rights to the Company or its designee.

(b)I recognize that this Agreement will not be deemed to require assignment of any Invention that I developed entirely on my own time without using Company’s equipment, supplies, facilities, trade secrets or Confidential Information, except for those Inventions that either (i) relate to Company’s actual or anticipated business, research or development, or (ii) result from or are connected with work performed by me for Company.  In addition, this Agreement does not apply to any Invention which qualifies fully for protection from assignment to Company under any specifically applicable state law, regulation, rule or public policy (“Specific Inventions Law”).  

3.2Government.  I also agree to assign all my right, title and interest in and to any and all Company Inventions to the United States of America, if such is required to be assigned by a contract between the Company and United States of America or any of its agencies.

3.3Works for Hire.  I acknowledge that all original works of authorship which are made by me (solely or jointly with others) within the scope of my employment as well as those works made by me within 1 year after termination of my employment which relate to any work made by me while I was employed by the Company and which are protectable by copyright are “works made for hire,” as that term is defined in the United States Copyright Act (17 U.S.C., Section 101).

4.Enforcement of Proprietary Rights.  I will assist the Company in every proper way to obtain and from time to time enforce United States and foreign Proprietary Rights relating to Company Inventions in any and all countries.  My obligation to assist the Company with respect to Proprietary Rights relating to such Company Inventions in any and all countries will continue beyond the termination of my employment, but the Company will compensate me at a reasonable rate after my termination for the time actually spent by me if the Company requests such assistance.

In the event Company is unable for any reason, after reasonable effort, to secure my signature on any document needed in connection with the actions specified in this paragraph, I hereby irrevocably designate and appoint Company and its duly authorized officers and agents as my agent and attorney in fact, which appointment is coupled with an interest, to act for and on my behalf to execute, verify and file any such documents and to do all other lawfully permitted acts to further the purposes of the preceding paragraph with the same legal force and effect as if executed by me.

I hereby waive and transfer to the Company, any and all claims, of any nature whatsoever, which I now or may hereafter have, for infringement of any Proprietary Rights assigned hereunder to the Company.

5.Obligation to Keep Company Informed.  During the period of my employment and for six (6) months after termination of my employment, I will promptly disclose all Company Inventions to the Company fully and in writing and will hold such Company Inventions in trust for the sole right and benefit of the Company.  In addition, after termination of my employment, I will disclose all patent applications filed by me within a year after termination of employment which relate to any Company Invention or to any work performed by me while I was employed by Company.  At the time of each such disclosure, I will advise Company in writing of any Inventions that I believe fully qualify for protection under the provisions of any applicable Specific Inventions Law; and I will at that time provide to Company in writing all evidence necessary to substantiate that belief.  Company will keep in confidence and will not use for any purpose or disclose to third parties without my consent any confidential information disclosed in writing to Company pursuant to this Agreement relating to Inventions that qualify fully for protection under a Specific Inventions Law.  I will preserve the confidentiality of any Invention that does not fully qualify for protection under a Specific Inventions Law.

6.Prior Inventions.  Inventions, if any, patented or unpatented, which I made prior to the commencement of my employment with the Company are excluded from the scope of this Agreement.  To preclude any possible uncertainty, except for any Inventions I have already assigned to Ionis prior to executing this Agreement, I have set forth in Exhibit A attached hereto a complete list of all Inventions that I have, alone or jointly with others, conceived, developed or reduced to practice or caused to be conceived, developed or reduced to practice prior to the commencement of my employment with the Company, that I consider to be my property or the property of third parties and that I wish to have excluded from the scope of this Agreement (the “Excluded Inventions”).  If disclosure of any such Excluded Invention would cause me to violate

any prior confidentiality agreement, I understand that I am not to list such Excluded Inventions but am to inform the Company that all such Inventions have not been listed for that reason. I acknowledge and agree that if I use any Excluded Inventions in the scope of my employment, or if I include any Excluded Inventions in any product or service of Company, or if my rights in any Excluded Inventions may block or interfere with, or may otherwise be required for, the exercise by Company of any rights assigned to Company under this Agreement, I will immediately so notify Company in writing.  Unless Company and I agree otherwise in writing as to particular Excluded Inventions, I hereby grant to Company, in such circumstances (whether or not I give Company notice as required above), a non-exclusive, perpetual, transferable, fully-paid and royalty-free, irrevocable and worldwide license, with rights to sublicense through multiple levels of sublicensees, to reproduce, make derivative works of, distribute, publicly perform, and publicly display in any form or medium, whether now known or later developed, make, have made, use, sell, import, offer for sale, and exercise any and all present or future rights in, such Excluded Inventions.  

7.No Solicitation of Employees, Consultants, Contractors, or Customers or Potential Customers.  I agree that during the 12 month period after the date my employment ends I will not, as an officer, director, employee, consultant, owner, partner, or in any other capacity, either directly or through others:

7.1solicit, induce, encourage, or participate in soliciting, inducing or encouraging any person known to me to be an employee, consultant, or independent contractor of the Company to terminate his or her relationship with the Company, even if I did not initiate the discussion or seek out the contact;

7.2solicit, induce, encourage, or participate in soliciting, inducing, or encouraging any person known to me to be an employee, consultant, or independent contractor of the Company to terminate his or her relationship with the Company to render services to me or any other person or entity that researches, develops, markets, sells, performs or provides or is preparing to develop, market, sell, perform or provide Conflicting Services (as defined in Section 8 below);

7.3hire, employ, or engage in a business venture with as partners or owners or other joint capacity, or attempt to hire, employ, or engage in a business venture as partners or owners or other joint capacity, with any person then employed by the Company or who has left the employment of the Company within the preceding three months to research, develop, market, sell, perform or provide Conflicting Services;

7.4solicit, induce or attempt to induce any Customer or Potential Customer (as defined below), to terminate, diminish, or materially alter in a manner harmful to the Company its relationship with the Company;

7.5solicit or assist in the solicitation of any Customer or Potential Customer to induce or attempt to induce such Customer or Potential Customer to purchase or contract for any Conflicting Services; or

7.6perform, provide or attempt to perform or provide any Conflicting Services for a Customer or Potential Customer.

The parties agree that for purposes of this Agreement, a “Customer or Potential Customer” is any person or entity who or which, at any time during the 12-month period prior to my contact with such person or entity as described in Sections 7.4-7.6 above if such contact occurred during my employment or, if such contact occurs following the termination of my employment, during the 12-month period prior to the date my employment with the Company ended: (i) contracted for, was billed for, or received from the Company any product, service or process with which I worked directly or indirectly during my employment by the Company or about which I acquired Confidential Information; or (ii) was in contact with me or in contact with any other employee, owner, or agent of the Company, of which contact I was or should have been aware, concerning the sale or purchase of, or contract for, any product, service or process with which I worked directly or indirectly during my employment with the Company or about which I acquired Confidential Information; or (iii) was solicited by the Company in an effort in which I was involved or of which I was aware.    

8.Non-Compete Provision.  I agree that for the 12-month period after the date my employment ends for any reason I will not, directly or indirectly, as an officer, director, employee, consultant, owner, partner, or in any other capacity solicit, perform, or provide, or attempt to perform or provide Conflicting Services anywhere in the Restricted Territory, nor will I assist another person to solicit, perform or provide or attempt to perform or provide Conflicting Services anywhere in the Restricted Territory.

The parties agree that for purposes of this Agreement, “Conflicting Services” means any product or the development thereof, by any person or organization other than the Company that is designed or intended to treat the same disease, condition or indication as a product the Company was developing in human clinical studies or commercializing at the time of my termination with which I worked directly or indirectly during my employment by the Company or about which I acquired Confidential Information during my employment by the Company.

The parties agree that for purposes of this Agreement, “Restricted Territory” means the 100 mile radius of any of the following locations: (i) any Company business location at which I have worked on a regular or occasional basis during the preceding year; (ii) my home if I work from home for the Company on a regular or occasional basis; (iii) any potential business location of the Company under active consideration by the Company to which I have traveled in connection with the consideration of that location; or (iv) any business location of a Customer or Potential Customer where representatives of the Customer or Potential Customer with whom I have been in contact during the 12 months prior to my termination are based.

9.Reasonableness of Restrictions.

9.1I agree that I have read this entire Agreement and understand it.  I agree that this Agreement does not prevent me from earning a living or pursuing my career.  I agree that the restrictions contained in this Agreement are reasonable, proper, and necessitated by the Company’s legitimate business interests.  I represent and agree that I am entering into this Agreement freely and with knowledge of its contents with the intent to be bound by the Agreement and the restrictions contained in it.

9.2In the event that a court finds this Agreement, or any of its restrictions, to be ambiguous, unenforceable, or invalid, I and the Company agree that the court will read the Agreement as a whole and interpret the restriction(s) at issue to be enforceable and valid to the maximum extent allowed by law.

9.3If the court declines to enforce this Agreement in the manner provided in subsection 9.2, I and the Company agree that this Agreement will be automatically modified to provide the Company with the maximum protection of its business interests allowed by law and I agree to be bound by this Agreement as modified.

10.No Improper Use of Materials.  During my employment by the Company I will not improperly use or disclose any confidential information or trade secrets, if any, of any former employer or any other person to whom I have an obligation of confidentiality, and I will not bring onto the premises of the Company any unpublished documents or any property belonging to any former employer or any other person to whom I have an obligation of confidentiality unless consented to in writing by that former employer or person.

11.No Conflicting Obligation.  I represent that my performance (a) of all the terms of this Agreement and (b) as an employee of the Company, does not and will not breach any agreement to keep in confidence information acquired by me in confidence or in trust prior to my employment by the Company.  I have not entered into, and I will not enter into, any agreement that conflicts with this Agreement.

12.Return of Company Documents.  When I leave the employ of the Company, I will deliver to the Company any and all laboratory notebooks, conception notebooks, drawings, notes, memoranda, specifications, devices, formulas, molecules, cells, storage media, including software and documents, including any computer printouts, together with all copies thereof, and any other material containing or disclosing any Company Inventions, Third Party Information or Confidential Information of the Company.  I further agree that any property situated on the Company’s premises and owned by the Company including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice.  Prior to leaving, I will cooperate with the Company in completing and signing the Company’s termination statement for technical and management personnel.

13.Legal and Equitable Remedies.  Because my services are personal and unique and because I may have access to and become acquainted with the Confidential Information of the Company, the Company will have the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief, without bond, without prejudice to any other rights and remedies that the Company may have for a breach of this Agreement.

13.1I agree that if the Company is successful in whole or in part in any legal or equitable action against me under this Agreement, the Company will be entitled to payment of all costs, including reasonable attorney’s fees, from me.

13.2In the event the Company enforces this Agreement through a court order, I agree that the restrictions of Sections 7 and 8 will remain in effect for a period of twelve (12) months from the effective date of the Order enforcing the Agreement.

14.Notices.  Any notices required or permitted hereunder will be given to me at the address specified below or at such other address as I will specify in writing.  Such notice will be deemed given upon personal delivery to the appropriate address, or by facsimile transmission (receipt verified and with confirmation copy following by another permitted method), telexed, sent by express courier service, or, if sent by certified or registered mail, three days after the date of mailing.

15.Publication of This Agreement to Subsequent Employer or Business Associates of Employee.

15.1If I am offered employment or the opportunity to enter into any business venture as owner, partner, consultant or other capacity while the restrictions described in Sections 7 and 8 of this Agreement are in effect I agree to inform my potential employer, partner, co-owner and/or others involved in managing the business with which I have an opportunity to be associated of my obligations under this Agreement and also agree to provide such person or persons with a copy of this Agreement.

15.2I agree to inform the Company of all employment and business ventures which I enter into while the restrictions described in Sections 7 and 8 of this Agreement are in effect and I also authorize the Company to provide copies of this Agreement to my employer, partner, co-owner and/or others involved in managing the business with which I am employed or associated and to make such persons aware of my obligations under this Agreement.

16.General Provisions.

16.1Governing Law.  This Agreement will be governed by and construed according to the laws of the Commonwealth of Massachusetts as such laws are applied to agreements entered into and to be performed entirely within the Commonwealth of Massachusetts between Massachusetts residents.  I hereby expressly consent to the personal jurisdiction and venue of the state and federal courts located in the Commonwealth of Massachusetts for any lawsuit filed there against me by Company arising from or related to this Agreement.  

16.2Entire Agreement.  This Agreement is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior discussions between us.  No modification or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing signed by both parties.  Any subsequent change or changes in my duties, salary or compensation will not affect the validity or scope of this Agreement; provided, however, prior to the execution of this Agreement, if Company and I were parties to any agreement regarding the subject matter hereof, that agreement will be superseded by this Agreement prospectively only. As used in this Agreement, the period of my employment includes any time during which I may be retained by the Company as a consultant.  Any subsequent change or changes in my title, position, status, role, duties, salary, compensation or benefits or other terms and conditions of employment or service will not affect the validity or scope of this Agreement.

16.3Severability.  If any of the provisions in this Agreement are deemed unenforceable by law, then the remaining provisions will continue in full force and effect.

16.4Successors and Assigns; 3^rd Party Beneficiary.  This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns. In addition, I agree that Ionis is a third party beneficiary to Sections 2, 12 and 13 of this Agreement. Without limiting the foregoing, Ionis will have the right to enforce such provisions directly against me as they relate to Ionis' proprietary or confidential information.

16.5Survival.  The provisions of this Agreement will survive the termination of my employment and the assignment of this Agreement by the Company to any successor in interest or other assignee.

16.6Employment.  I agree and understand that nothing in this Agreement will confer any right with respect to continuation of employment by the Company, nor will it interfere in any way with my right or the Company’s right to terminate my employment at any time, with or without cause.

16.7Waiver.  No waiver by the Company of any breach of this Agreement will be a waiver of any preceding or succeeding breach.  No waiver by the Company of any right under this Agreement will be construed as a waiver of any other right.  The Company will not be required to give notice to enforce strict adherence to all terms of this Agreement.

This Agreement will be effective as of November 28, 2017.

I UNDERSTAND THAT THIS AGREEMENT AFFECTS MY RIGHTS TO INVENTIONS I MAKE DURING MY EMPLOYMENT, AND RESTRICTS MY RIGHT TO DISCLOSE OR USE THE COMPANY’S CONFIDENTIAL INFORMATION DURING OR SUBSEQUENT TO MY EMPLOYMENT.

I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.  I HAVE COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.

Dated:	November 28, 2017	/s/ Jeffrey M. Goldberg
		Signature
		Jeffrey M. Goldberg
	Address	Akcea Therapeutics, Inc.
		55 Cambridge Parkway
		Cambridge, MA 02142

ACCEPTED AND AGREED TO:

Akcea Therapeutics, Inc.

By:	/s/ Paula Soteropoulos
	Signature
	Paula Soteropoulos
	Printed Name
	President and CEO
	Title

EXHIBIT A

AKCEA THERAPEUTICS, INC.

1.  The following is a complete list of all inventions or improvements relevant to the subject matter of my employment by Akcea Therapeutics, Inc. (the “Company”) that have been made or conceived or first reduced to practice by me alone or jointly with others prior to my engagement by the Company, except for any Inventions I have already assigned to Ionis Pharmaceuticals, Inc. prior to executing this Agreement:

X No inventions or improvements. ☐ See below:

☐  Due to confidentiality agreements with prior employer, I cannot disclose certain inventions that would otherwise be included on the above-described list.

☐  Additional sheets attached.

2.  I propose to bring to my employment the following devices, materials and documents of a former employer or other person to whom I have an obligation of confidentiality that are not generally available to the public, which materials and documents may be used in my employment pursuant to the express written authorization of my former employer or such other person (a copy of which is attached hereto):

X No material ☐ See below:

☐  Additional sheets attached.

Date:	November 28, 2017
	/s/ Jeffrey M. Goldberg
	Employee Signature

Exhibit B

Options Outstanding by Price

As Of Date: 09/18/2019

Status: Active

Participant ID is 3112

Name	ID	Number Option Date	Expiration Date	Remaining Life ln Years Option	Price Shares	Outstanding
Goldberg, Jeffrey	3112	0001063 2/17/2016	2/16/2026	6.41	6.48	9,978.00
Goldberg, Jeffrey	3112	0001064 2/17/2016	2/16/2026	6.41	6.48	81,607.00
Goldberg, Jeffrey	3112	0001035 12/16/2015	12/15/2025	6.24	6.48	53,565.00
Goldberg, Jeffrey	3112	0001036 12/16/2015	12/15/2025	6.24	6.48	248,685.00
Goldberg, Jeffrey	3112	0001153 6/5/2017	6/4/2027	7.71	12.21	44,562.00
Goldberg, Jeffrey	3112	0001152 6/5/2017	6/4/2027	7.71	12.21	8,275.00
Goldberg, Jeffrey	3112	0001404 1/2/2018	1/1/2028	8.28	17.38	97,686.00
Goldberg, Jeffrey	3112	0001'103 1/2/2018	1/1/2028	8.28	17.38	12,314.00
Goldberg, Jeffrey	3112	0001582 4/17/2018	4/16/2028	8.58	23.93	2,514.00
Goldberg, Jeffrey	3112	0001583 4/17/2018	4/16/2028	8.58	23,93	317,486.00
Goldberg, Jeffrey	3112	0001821 1/2/2019	1/1/2029	9.28	30.73	146,875.00
Goldberg, Jeffrey	3112	0001820 1/2/2019	1/1/2029	9.28	30.73	3,125.00
						1,026,672

91372289v.5

EX-10.8

Exhibit 10.8

AKCEA THERAPEUTICS, INC.

CONSULTING AGREEMENT

(“SUMMARY PAGE”)

Date of Consulting Agreement: (“Agreement”)	September 18, 2019 (“Effective Date”).
Name of Consultant:	Paula Soteropoulos (hereinafter “Consultant”).
Scope of Consulting Services:	Assistance with the transition of her duties and responsibilities as former Chief Executive Officer, pursuant to a scope of work agreed to by Consultant and Akcea in a separate writing (and such other transition activities agreed by Consultant and Akcea)
Field in which Consulting Services to be provided (the “Field”):	Corporate consulting
Duration of Consulting Services (the “Consulting Period”):	Effective Date through October 31, 2019
Consideration for Consulting Services:	A retainer of $125,000 paid by Akcea to Consultant in installments during the Consulting Period as follows: (i) $62,500 on the Effective Date; (ii) $31,250 on October 9, 2019, and (iii) $31,250 on October 31, 2019; provided, that if this Agreement has terminated prior to any given payment date, then the pro-rated portion of the installment due on such date attributable to the period between the termination effective date and such payment date will not be due and payable to Consultant.
Time Provided by Consultant:	Up to 20 hours in any week.

In addition to such compensation, Akcea Therapeutics, Inc. (“Akcea”) will reimburse Consultant for Akcea approved travel and other out-of-pocket costs reasonably incurred in the course of performing services under this Agreement in accordance with Akcea’s standard expense reimbursement policy.  Consultant will provide Akcea with receipts for all such costs.

[Signatures on Following Page]

Consultant agrees to provide Akcea with Consulting Services on the terms described above and according to the additional terms attached hereto as Exhibit A.

	Consultant	Akcea Therapeutics, Inc.
By (Signature):	/s/ Paula Soteropoulos	/s/ Sandford D. Smith
Date:
Printed Name:	Paula Soteropoulos	Sandford D. Smith
Title:		Compensation Committee Chairman
Address:		22 Boston Wharf Road, 9th Floor
		Boston, MA 02210
Telephone:		617-207-0202
e-mail:

Social Security or Employer Tax ID Number to be provided separately via W-9 form or foreign equivalent.

EXHIBIT A

TERMS OF CONSULTING AGREEMENT

1.Engagement of Services

Consultant is retained to perform certain services, as needed and requested by Akcea, which services are specifically described on the Summary Page (“Consulting Services”).  Consultant will perform such Consulting Services to the best of Consultant’s talent and ability. The Consultant and Akcea agree that (i) there is no minimum number of hours of Consulting Services required to be performed during the Consulting Period, e.g., Consultant shall be entitled to the payments specified in the Summary Page even if no Consulting Services are requested to be performed during the period preceding such payment, and (ii) the Consulting Services shall be performed on such date(s) and at such time(s) to which Consultant agrees provided that no Consulting Services shall be requested or permitted outside Akcea’s posted business hours and in no event shall Consultant be requested or permitted to perform more than twenty (20) hours of service during any seven day period.  

2.Compensation

As full and complete compensation for Consulting Services and for the discharge of all of Consultant's obligations hereunder, Akcea will deliver to Consultant (i) the fee set forth on the Summary Page, in the installment amounts and upon the dates specified on such Summary Page, and (ii) reimbursement of all reasonable expenses incurred by Consultant in connection with the Consulting Services within 30 days after Akcea’s receipt of the invoice for such expenses. In addition, as long as Consultant continues to provide Consulting Services (or be available to provide the Consulting Services during the term) under this Agreement, Consultant’s Akcea Common Stock Options will continue to vest through the end of the Consulting Period specified on the Summary Page in accordance with the terms of such Stock Option Agreements.  Except as otherwise provided by extension or amendment of this Agreement, upon the expiration of the Consulting Period, such Stock Options will stop additional vesting and become subject to expiration in accordance with the terms of such Stock Options.

3.Independent Contractor; Termination of Employment

Consultant is an independent contractor and not an employee of Akcea. Consultant has no authority to obligate Akcea by contract or otherwise. Consultant will not be eligible for any employee benefits.  Income taxes associated with fees paid to Consultant pursuant to Section 2 will be the sole responsibility of Consultant. For the sake of clarity and elimination of doubt, it is the parties’ mutual intention and understanding that the employment relationship between Akcea and Consultant terminated not later than September 18, 2019 for all purposes and that, notwithstanding the execution of this Agreement or the performance of Consulting Services by Consultant hereunder during the Consulting Period, Consultant  separated from service with Akcea not later than September 18, 2019 for purposes of Section 409A of the Internal Revenue Code of 1986, as amended. Without limiting the forgoing, the level of bona fide services Consultant may perform under this Agreement or otherwise after the Effective Date shall not exceed twenty (20%) percent of the average level of bona fide services performed by Consultant (whether as an employee or independent contractor) over the thirty-six month period ending on the Effective Date.

Page 1

4.Confidential Information

(a) Akcea possesses confidential information that has been created, discovered, developed by, or otherwise become known to Akcea (including, without limitation, information created, discovered, developed or made known by Consultant arising from the Consulting Services).

(i) All such information is hereinafter referred to as “Confidential Information.”  By way of illustration, but not limitation, Confidential Information includes:  (A) inventions, developments, designs, improvements, trade secrets, ideas, formulas, source and object codes, programs, other works of authorship, organisms, plasmids, expression vectors, know-how, processes, cell lines, discoveries, techniques, data and documentation systems (hereinafter collectively referred to as “Inventions”); and (B) information regarding plans for research, development, new products, clinical data, pre-clinical product data, clinical trial patient data, marketing and selling, business plans, budgets and unpublished financial statements, licenses, prices and costs, as well as information regarding the skills and compensation of employees of Akcea.  

(ii) All Confidential Information will be the sole property of Akcea and its assigns, and Akcea and its assigns will be the sole owner of all patents, copyrights and other rights in connection with such Confidential Information.  At all times, both during the term of this Agreement and for five years after its termination, Consultant will keep in confidence and trust all Confidential Information and will not use, disclose, lecture upon or publish any Confidential Information or anything related to such information without Akcea’s prior written consent.  Any permitted disclosures will be made in strict compliance with the Akcea publication and presentation clearance policy.

(b) Consultant also understands that Akcea has received and in the future will receive valuable information from third parties that is confidential or proprietary (“Third-Party Information”) subject to a duty on the part of Akcea to maintain the confidentiality of such information and to use it only for certain limited purposes.  During the term of this Agreement and for five years thereafter, Consultant will hold Third-Party Information in the strictest confidence and will not disclose or use Third-Party Information except as permitted by the agreement between Akcea and such third party, unless expressly authorized to act otherwise by an officer of Akcea in writing.  Any permitted disclosures will be made in strict compliance with Akcea publication and presentation clearance policy.

(c) The obligations of Section 4 will not apply to information that Consultant can establish by written records: (i) was known by Consultant prior to the receipt of Confidential Information; (ii) was disclosed to Consultant by a third party having the right to do so; (iii) was, or subsequently became, in the public domain through no fault of Consultant, its officers, directors, affiliates employees or agents; (iv) was independently developed by Consultant without use of Confidential Information; or (v) was disclosed by Consultant pursuant to any judicial, governmental or stock exchange request, requirement or order, so long as Consultant provided Akcea with sufficient prior notice in order to allow Akcea to contest such request, requirement or order.

Page 2

(d) Notwithstanding the foregoing, Consultant may recuse herself from any Consulting Services reasonably likely to result in Consultant’s receipt of material, non-public information regarding Akcea, and Akcea will take commercially reasonable steps and implement and maintain adequate internal controls to prevent the disclosure to Consultant of any material, non-public information regarding Akcea.Akcea will not later than the end of the Consulting Period conduct an internal audit of such controls to evaluate their efficacy and report any discovered breaches to Consultant.

5.Inventions

In the course of performing Consulting Services for Akcea, Consultant may develop new ideas or Inventions or make other contributions of value to Akcea.

(a) Consultant hereby assigns to Akcea Consultant's entire right, title and interest in and to any and all Inventions and Proprietary Rights, as hereinafter defined, whether or not patentable or registrable under patent, copyright or similar statutes, made or conceived of or reduced to practice or learned by Consultant, either alone or jointly with others, as a result of performing Consulting Services hereunder.  As used herein, “Proprietary Rights” means all patent rights, copyrights, and other rights associated with an Invention. All Inventions assigned to Akcea pursuant to this section will be known as “Company Inventions”. Consultant agrees that all Proprietary Rights and Company Inventions are Akcea’s sole property. Consultant agrees, upon request, to execute, verify and deliver assignments of such Proprietary Rights to Akcea or its designee.  Consultant understands that, to the extent this Agreement will be construed in accordance with the laws of any state which precludes a requirement in an agreement to assign certain classes of inventions made by an individual acting as a consultant, this section will be interpreted not to apply to any inventions that a court rules and/or Akcea agrees falls within such classes.

(b) Consultant further agrees to assist Akcea in every proper way to obtain, from time to time, and to enforce United States and foreign Proprietary Rights relating to Company Inventions in any and all countries. To that end Consultant will execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as Akcea may reasonably request for use in applying for, obtaining, sustaining and enforcing such Proprietary Rights relating to Company Inventions.  Consultant's obligation to assist Akcea in obtaining and enforcing Proprietary Rights relating to Company Inventions in any and all countries will continue beyond the termination of this Agreement, but Akcea will compensate Consultant at a reasonable rate after such termination for the time actually spent by Consultant at Akcea's request in connection with such assistance.  If Akcea is unable, after reasonable effort, to secure Consultant's signature on any document needed to apply for or prosecute any Proprietary Rights relating to a Company Invention, Consultant hereby irrevocably designates and appoints Akcea and its duly authorized officers and agents as his/her agent and attorney in fact, to act for and on Consultant’s behalf to execute, verify and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of any such Proprietary Rights with the same legal force and effect as if executed by Consultant.

Page 3

(c) During the term of this Agreement, Consultant will promptly disclose to Akcea, or any persons designated by it, fully and in writing and will hold in trust for the sole right and benefit of Akcea any and all Company Inventions, whether or not patentable or protectable by copyright.  At the time of each such disclosure, Consultant will advise Akcea in writing of any Inventions that Consultant believes are not subject to the assignment provisions of Section 5(a) above, and Consultant will at that time provide to Akcea in writing all evidence necessary to substantiate that belief. Consultant will not be obligated to disclose information received by Consultant from others under a contract of confidentiality.  In addition, after termination of this Agreement, Consultant will disclose to Akcea all patent applications filed by Consultant relating to any Company Inventions or relating to any work performed by Consultant on behalf of Akcea.

6.Previous Consulting Relationships

Consultant agrees not to bring to Akcea or to use in the performance of Consulting Services for Akcea any materials or documents of a present or former employer or client of Consultant (other than Akcea and Ionis Pharmaceuticals, Inc. and their respective parents, subsidiaries and affiliates), or any materials or documents obtained by Consultant under a confidentiality agreement imposed by reason of another of Consultant's consulting relationships, unless such materials or documents are generally available to the public or Consultant has authorization from such present or former employer or client for the possession and unrestricted use of such materials. Akcea expressly authorizes Consultant to use in the performance of the Consulting Services any and all information and materials acquired by Consultant during the course of her employment with Akcea and/or affiliation with Ionis Pharmaceuticals, Inc.

7.Termination

The term of this Agreement will coincide with the duration of the Consulting Period.  The duration of the Consulting Period (and thus the term of this Agreement) may be extended only if both parties agree to an extension in writing, signed by both Consultant and an authorized officer of Akcea.  Each party to this Agreement (each, a “Party” and collectively, the “Parties”) understands and agrees that the other Party has the absolute right to terminate this Agreement, at any time and for whatever reason, so long as such Party provides the other Party with written notice of such termination as set forth in Section 9(f). In addition to the retainer for Consulting Services Akcea will pay Consultant for any out of pocket expenses reasonably incurred on behalf of Akcea, up to and including the termination notification date, pursuant to the criteria set forth in Section 2 of this Agreement.

Page 4

8.Arbitration

(a) Akcea and Consultant agree to resolve by arbitration all disputes, claims or controversies (“Claims”) arising out of this Agreement or its termination, that Akcea may have against Consultant or that Consultant may have against any of the following (i) Akcea; (ii) Akcea officers, directors; employees or agents; (iii) Akcea’s parent; subsidiary or affiliated entities, joint ventures, or joint employers; (iv) Akcea’s benefit plans or the plans’ sponsors, fiduciaries, administrators, affiliates and agents; and/or (v) all successors and assigns of any of the foregoing.  The Claims covered by this Agreement include all disputes that Akcea or Consultant could otherwise pursue in state or federal court including, but not limited to, Claims based on any state, federal, or local statute, regulation or ordinance (including Claims for discrimination, retaliation, harassment, unpaid wages or violation of state or federal wage and hour laws), as well as common law Claims (including Claims for breach of contract, breach of the implied covenant of good faith and fair dealing, wrongful discharge, defamation, misrepresentation, fraud, or infliction of emotional distress). Akcea and Consultant anticipates that this Section 8 provides the benefits of a speedy, less formal, impartial, final and binding dispute resolution procedure.

(b) The arbitration will be conducted by a single neutral arbitrator in accordance with the then-current Commercial Arbitration and Mediation Procedures of the American Arbitration Association (“AAA”).  The arbitration will take place in Boston, Massachusetts.  Akcea will pay the arbitrator’s fee and will bear all administrative charges by AAA.  All parties will be entitled to engage in reasonable pre-hearing discovery to obtain information to prosecute or defend the asserted claims.  Any disputes between the parties regarding the nature or scope of discovery will be decided by the arbitrator.  The arbitrator will hear and issue a written ruling upon any dispositive motions brought by either party, including but not limited to, motions for summary judgment or summary adjudication of issues.  After the hearing, the arbitrator will issue a written decision setting forth the award, if any, and explaining the basis therefore.  The arbitrator will have the power to award any type of relief that would be available in court. The arbitrator’s award will be final and binding upon the parties and may be entered as a judgment in any court of competent jurisdiction.  If there is conflict in the arbitration procedures set forth in this Agreement and the AAA rules specified above, the AAA rules will control.  Notwithstanding the foregoing, and regardless of what is provided by the AAA rules, the arbitrator will not have authority or jurisdiction to consolidate claims of different individuals or entities into one proceeding, nor will the arbitrator have authority or jurisdiction to hear the arbitration as a class action.  Without limiting the foregoing, the issue of whether to certify any alleged or putative class for a class action proceeding must be decided by a court of competent jurisdiction.  The arbitrator will not have authority or jurisdiction to decide class certification, collective or representative action issues.  Until any class certification, collective, or representative action issues are decided by the court, all arbitration proceedings will be stayed, and the arbitrator will take no action with respect to the matter.  However, once any issues regarding class certification, collective, or representative action have been decided by the court, the arbitrator will have authority to decide the substantive claims.

Page 5

9.Miscellaneous

(a) Upon expiration or termination of this Agreement, each party will be released from all obligations and liabilities to the other occurring or arising after the date of such expiration or termination, except that any termination or expiration of this Agreement will not relieve Consultant of Consultant’s obligations under Sections 4, 5, 6, 7 and 8 hereof, nor will any such expiration or termination relieve Consultant or Akcea from any liability arising from any breach of this Agreement.  Upon expiration or termination of this Agreement for any reason whatsoever, Consultant will promptly surrender and deliver to Akcea any and all laboratory notebooks, conception notebooks, drawings, notes, memoranda, specifications, devices, formulas, molecules, cells, storage media, including calculations, sequences, data and other materials of any nature pertaining to Consulting Services for Akcea, as well as any documents or data of any description (or any reproduction of any documents or data) containing or pertaining to any Trade Secret Information, Akcea’s Confidential Information or Third Party Information.

(b) The rights and liabilities of the parties hereto will bind and inure to the benefit of their respective successors, heirs, executors and administrators, as the case may be; provided that, as Akcea has specifically contracted for Consultant's services, Consultant may not assign or delegate Consultant's obligations under this Agreement either in whole or in part without Akcea’s prior written consent.

(c) Because Consultant's services are personal and unique and because Consultant may have access to and become acquainted with Akcea’s Confidential Information, Akcea has the right to enforce this Agreement and any of its provisions by injunction, specific performance or other equitable relief without prejudice to any other rights and remedies that Akcea may have for a breach of this Agreement.

(d) This Agreement will be governed by and construed according to the laws of the Commonwealth of Massachusetts as such laws are applied to contracts entered into and performed entirely within such jurisdiction.  If any provision of this Agreement is held to be or becomes invalid, illegal or unenforceable, such provision will be validly reformed to approximate as nearly as possible the intent of the parties and the remainder of this Agreement will not be affected thereby and will remain valid and enforceable to the greatest extent permitted by law.

(e) This Agreement, and all other documents mentioned herein, constitute the final, exclusive and complete understanding and agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior understandings and agreements with respect to such subject matter.  Any waiver, modification or amendment of any provision of this Agreement will be effective only if in writing and signed by the parties hereto.

(f) Any notices required or permitted hereunder will be given to the appropriate party at the address specified on the Summary Page or at such other address as the party will specify in writing.  Such notice will be deemed given upon personal delivery to the appropriate address, or by facsimile transmission (receipt verified and with confirmation copy followed by another permitted method), sent by express courier service, or, if sent by certified or registered mail, three (3) days after the date of mailing.

[END OF EXHIBIT A]

Page 6

EX-10.9

Exhibit 10.9

AKCEA THERAPEUTICS, INC.

CONSULTING AGREEMENT

Amendment

To Extend Consulting Period

Name of Consultant:	Paula Soteropoulos (hereinafter “Consultant”)
Date of Consulting Agreement: (“Agreement”)	September 18, 2019 (“Effective Date”)
Date of Amendment:	October 30, 2019 (“Amendment Date”)
Nature of Amendment	Extend duration of Consulting Period
Duration of Consulting Services (the “Consulting Period”):	1. Initial: Effective Date through October 31, 2019
	2. As amended by this instrument: Effective Date through November 4, 2019

In accordance with Section 9(e) of the Agreement, including Exhibit A thereto, which Agreement (and Exhibit A) is incorporated herein by reference and made a part hereof, this instrument amends the Consulting Period by extending the termination date of such period from October 31, 2019 to and including November 4, 2019. Except as amended by the preceding sentence, the terms and conditions of the Agreement remain in full force and effect.

	Consultant	Akcea Therapeutics, Inc.
By (Signature):	/s/ Paula Soteropoulos	/s/ Damien McDevitt
Date:
Printed Name:	Paula Soteropoulos	Damien McDevitt
Address:	N/A	22 Boston Wharf Road, 9th Floor
		Boston, MA 02210
Telephone:	N/A

Social Security or Employer Tax ID Number to be provided separately via W-9 form or foreign equivalent.

Page 1

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Damien McDevitt, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Akcea Therapeutics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: November 6, 2019	By:	/s/ Damien McDevitt
		Damien McDevitt
		Interim Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Michael MacLean, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Akcea Therapeutics, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Dated: November 6, 2019	By:	/s/ Michael MacLean
		Michael MacLean
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, Damien McDevitt, the interim Chief Executive Officer of Akcea Therapeutics, Inc., (the “Company”), and Michael MacLean, the Chief Financial Officer of the Company, each hereby certifies that, to the best of his or her knowledge:

(1) The Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2019, to which this Certification is attached as Exhibit 32.1 (the “Periodic Report”), fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 6, 2019

By:	/s/ Damien McDevitt	By:	/s/ Michael MacLean
	Damien McDevitt		Michael MacLean
	Interim Chief Executive Officer		Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Akcea Therapeutics, Inc. and will be retained by Akcea Therapeutics, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Subsequent Events - Narratives (Details) - Subsequent Event [Member] - USD ($) $ in Millions	Oct. 04, 2019	Oct. 31, 2019
Pfizer Inc. [Member]
Subsequent Event [Line Items]
Upfront license fee receivable	$ 250.0
Ionis [Member]
Subsequent Event [Line Items]
Payment of license fees, milestone payments and royalties, percentage	50.00%
Akcea [Member]
Subsequent Event [Line Items]
Maximum amount of payments receivable for development milestones	$ 205.0
Maximum amount of payments receivable for regulatory milestones	250.0
Maximum amount of payments receivable for commercialization milestones	$ 850.0
Tiered royalties to be received	mid-teens to low twenty percent range on net sales of AKCEA-ANGPTL3-LRx
Akcea [Member] | Ionis [Member]
Subsequent Event [Line Items]
Proceeds from issuance of its common stock	$ 125.0
Akcea [Member] | Maximum [Member]
Subsequent Event [Line Items]
Eligible to receive milestone payment	$ 1,300.0
PTC Therapeutics [Member]
Subsequent Event [Line Items]
License fee receivable		$ 4.0
PTC Therapeutics [Member] | Ionis [Member]
Subsequent Event [Line Items]
Sublicense fee payable		$ 2.4

XML

Stock-Based Compensation - Stock Plans (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
Stock Plans [Abstract]
Shares of common stock added	93,885,414	93,885,414		89,345,978
Unrecognized compensation expense related to non-vested stock options	$ 72.8	$ 72.8
RSUs [Member]
Stock Plans [Abstract]
Unrecognized compensation expense related to RSUs	$ 14.8	$ 14.8
Weighted average amortization period		2 years 6 months
Non-vested Stock Options [Member]
Stock Plans [Abstract]
Weighted average amortization period		1 year 4 months 24 days
2015 Equity Incentive Plan [Member]
Stock Plans [Abstract]
Number of shares authorized for issuance pursuant to stock awards (in shares)	18,500,000	18,500,000
Number of shares available for future grant (in shares)	3,596,826	3,596,826
Amount of reversal of stock-based compensation previously recognized	$ 18.8
2015 Equity Incentive Plan [Member] | Stock Options [Member]
Stock Plans [Abstract]
Options outstanding (in shares)	10,135,657	10,135,657
Options exercisable (in shares)	3,335,196	3,335,196
2015 Equity Incentive Plan [Member] | RSUs [Member]
Stock Plans [Abstract]
Restricted stock units outstanding (in shares)	616,643	616,643
2017 Employee Stock Purchase Plan [Member]
Stock Plans [Abstract]
Number of shares available for future grant (in shares)	1,428,725	1,428,725
Shares of common stock added			500,000
Purchase price of common stock, percent		85.00%
Number of shares of common stock reserved for issuance (in shares)	1,500,000	1,500,000
Shares issued under ESPP (in shares)	21,984	39,724
Accrued liability for contributions to employee stock purchase plan	$ 0.2	$ 0.2

XML

Contractual Obligations and Commitments - Narratives (Details) $ in Millions					3 Months Ended		9 Months Ended
	May 08, 2019	Nov. 12, 2018 ft²	Aug. 15, 2018 USD ($)	Apr. 05, 2018 USD ($) ft²	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)
Operating Leased Assets [Line Items]
Operating lease expense					$ 0.5	$ 0.8	$ 1.6	$ 1.7
Operating lease payments paid							1.9
Agreement to purchase goods and services					$ 7.1		7.1
Severance obligations							$ 1.8
Cambridge, Massachusetts [Member]
Operating Leased Assets [Line Items]
Lessee operating lease, lease commencement date							Apr. 30, 2015
Operating lease, option to extend							subsequently amended and expanded in February 2016 and March 2017
Lessee, Operating Lease, Existence of Option to Extend							false
Operating lease expiration date							Apr. 30, 2020
Operating lease, lease termination period							2019-04
Dublin, Ireland [Member]
Operating Leased Assets [Line Items]
Lessee operating lease, lease commencement date	May 31, 2019
Initial term of lease					18 months		18 months
Operating lease, option to extend							the 12-month extension period in our right-of-use asset and lease liability
Lessee, Operating Lease, Existence of Option to Extend	true
Office Space for Corporate Headquarters [Member]
Operating Leased Assets [Line Items]
Lessee operating lease, lease commencement date				Aug. 15, 2018
Area of office space under lease agreement | ft²				30,175
Initial term of lease				123 months
Operating lease, option to extend							option to extend the lease for an additional five-year term
Term of lease extension				5 years
Tenant improvement allowance			$ 3.8
Period of free rent			3 months
Initial letter of credit to secure lease obligation				$ 2.4
Letter of credit to secure lease obligation on third anniversary of rent commencement date				1.8
Letter of credit to secure lease obligation on fifth anniversary of rent commencement date				$ 1.2
Ionis Sublease
Operating Leased Assets [Line Items]
Area of office space under lease agreement | ft²		4,723
Initial term of lease		64 months
Period of free rent		4 months
Lessee, Operating Lease, Existence of Option to Extend		false

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Summary of Significant Accounting Policies - Summary of Balances and Activity in Each of Product Revenue Allowance and Reserve Categories (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2019 USD ($)
Revenue Allowance and Reserves Balance [Abstract]
Balance at December 31, 2018	$ 348
Provision related to current period sales	2,726
Adjustment related to prior period sales	(32)
Credits or payments made during the period	(1,555)
Balance at September 30, 2019	1,487
Chargebacks, Discounts and Fees [Member]
Revenue Allowance and Reserves Balance [Abstract]
Balance at December 31, 2018	50
Provision related to current period sales	824
Adjustment related to prior period sales	(4)
Credits or payments made during the period	(601)
Balance at September 30, 2019	269
Government and Other Rebates [Member]
Revenue Allowance and Reserves Balance [Abstract]
Balance at December 31, 2018	293
Provision related to current period sales	1,648
Adjustment related to prior period sales	(28)
Credits or payments made during the period	(954)
Balance at September 30, 2019	959
Returns [Member]
Revenue Allowance and Reserves Balance [Abstract]
Balance at December 31, 2018	5
Provision related to current period sales	254
Adjustment related to prior period sales	0
Credits or payments made during the period	0
Balance at September 30, 2019	$ 259

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Contractual Obligations and Commitments (Tables)

9 Months Ended

Sep. 30, 2019

Commitments And Contingencies Disclosure [Abstract]

Lessee, Operating Lease, Disclosure

Other information related to our operating leases is as follows (dollar amounts in thousands):

	At September 30, 2019
Operating lease right-of-use assets	$	11,300
Operating lease liabilities (1)	$	15,850
Weighted average remaining lease term	9.0 years
Weighted average discount rate		8	%

(1) Current portion of $1.3 million included in other current liabilities and the difference of $14.6 million included in long-term portion of lease liabilities on our condensed consolidated balance sheet.

Lessee, Operating Lease, Liability, Maturity

Annual maturities of our operating lease liabilities as of September 30, 2019 are as follows (in thousands):

Years ended December 31,	Operating Leases
Remainder of 2019	$	621
2020		2,497
2021		2,502
2022		2,403
2023		2,400
Thereafter		11,961
Total minimum lease payments	$	22,384
Less:
Imputed interest		(6,534	)
Total operating lease liability	$	15,850

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Property Plant and Equipment - Summary of Property and Equipment at Cost and Related Accumulated Depreciation (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Property Plant And Equipment [Line Items]
Property and equipment, at cost	$ 6,092	$ 5,926
Less accumulated depreciation and amortization	(815)	(230)
Total property and equipment, net	5,277	5,696
Furniture And Fixtures [Member]
Property Plant And Equipment [Line Items]
Property and equipment, at cost	1,611	1,611
Computer Equipment And Software [Member]
Property Plant And Equipment [Line Items]
Property and equipment, at cost	140	102
Manufacturing Equipment [Member]
Property Plant And Equipment [Line Items]
Property and equipment, at cost	386
Leasehold Improvements [Member]
Property Plant And Equipment [Line Items]
Property and equipment, at cost	$ 3,955	$ 4,213

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Intangible Assets, Net

9 Months Ended

Sep. 30, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets, Net

6. Intangible Assets, net

The following table presents intangible assets (in thousands):

	September 30,			December 31,			Estimated
	2019			2018			useful life
Acquired and in-licensed rights	$	2,262		$	2,262		7 - 21 Years
Capitalized regulatory approval milestones		90,000			90,000		16 Years
Less accumulated amortization		(7,733	)		(3,348	)
Total intangible assets, net	$	84,529		$	88,914

We recorded $1.5 million and $4.4 million, respectively, in amortization expense related to intangible assets during the three and nine months ended September 30, 2019. For the three and nine months ended September 30, 2018, we recorded $0.7 million and $0.8 million, respectively. Estimated future amortization expense for intangible assets as of September 30, 2019 is as follows (in thousands):

	Total
2019	$	1,478
2020		5,879
2021		5,861
2022		5,856
2023		5,843
Thereafter		59,612
	$	84,529

The weighted average remaining amortizable life of our patents was 11.05 years at September 30, 2019.

For additional detail of Akcea's license agreements with Ionis see Note 8, License Agreements and Services Agreement with Ionis.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

10. Stock-Based Compensation

Stock Plans

2015 Equity Incentive Plan

As of September 30, 2019, the aggregate number of shares of common stock that may be issued pursuant to stock awards under the 2015 Equity Incentive Plan, or 2015 Plan, was 18,500,000 shares. The 2015 Plan also provides for the grant of nonstatutory stock options, or NSOs, incentive stock options, or ISOs, stock appreciation rights, restricted stock awards and restricted stock unit awards. At September 30, 2019, a total of 10,135,657 options were outstanding, of which 3,335,196 were exercisable, 616,643 restricted stock unit awards were outstanding, and 3,596,826 shares were available for future grant under the 2015 Plan.

2017 Employee Stock Purchase Plan

On January 1, 2019, 500,000 shares of common stock were added to the 2017 Employee Stock Purchase Plan, or 2017 ESPP. In accordance with the provisions of our 2017 ESPP, the number of shares of our common stock reserved for issuance under the 2017 ESPP automatically increases on January 1^st of each calendar year. Under the ESPP, participating employees can elect to have a portion of their base pay withheld during a consecutive payment period for the purchase of shares of our common stock. At the conclusion of each offering period, participating employees can purchase shares of our common stock at 85% of the lesser of the closing price at the beginning or at the end of the period. As of September 30, 2019, the aggregate number of shares of common stock reserved under the 2017 ESPP was 1,500,000 and we had 1,428,725 shares available for future issuance under the 2017 ESPP. During the three and nine months ended September 30, 2019, 21,984 shares and 39,724 shares, respectively, were issued under our 2017 ESPP. At September 30, 2019, accrued liabilities included $0.2 million of 2017 ESPP contributions for which the related shares we anticipate issuing in the first quarter of 2020.

Stock-based Compensation Expense

We measure stock-based compensation expense for equity-classified awards, principally related to stock options, restricted stock units, or RSUs, and stock purchase rights under our 2017 ESPP, based on the estimated fair value of the award on the date of grant. We recognize the value of the portion of the award that we ultimately expect to vest as stock-based compensation expense over the requisite service period in our condensed consolidated statements of operations. We reduce stock-based compensation expense for estimated forfeitures at the time of grant and revise in subsequent periods if actual forfeitures differ from those estimates.

We use the Black-Scholes model to estimate the fair value of stock options granted and stock purchase rights under our 2017 ESPP. The expected term of stock options granted represents the period of time that we expect them to be outstanding. As we do not have sufficient historical information, we use the simplified method for estimating the expected term. Under the simplified method we calculate the expected term as the average time-to-vesting and the contractual life of the options. As we gain additional historical information, we will transition to calculating our expected term based on our exercise patterns. For the nine months ended September 30, 2019 and 2018, we used the following weighted-average assumptions in our Black-Scholes calculations:

Employee Stock Options:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		2.3	%		2.7	%
Dividend yield		0.0	%		0.0	%
Volatility		75.6	%		77.1	%
Expected life	6.1 years			6.1 years

Board of Directors Stock Options:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		1.8	%		2.9	%
Dividend yield		0.0	%		0.0	%
Volatility		73.8	%		78.2	%
Expected life	6.3 years			6.4 years

2017ESPP:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		2.4	%		1.9	%
Dividend yield		0.0	%		0.0	%
Volatility		60.0	%		64.2	%
Expected life	6 months			6 months

The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2019 and 2018 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2019			2018		2019		2018
Cost of sales - product	$	127		$	—	$	382	$	—
Research and development expenses		2,814			2,313		9,298		6,868
Selling, general and administrative expenses		(6,405	)		10,417		19,779		24,371
Total	$	(3,464	)	$	12,730	$	29,459	$	31,239

As of September 30, 2019, total unrecognized, estimated non-cash stock-based compensation expense related to non-vested stock options and RSUs was $72.8 million and $14.8 million, respectively. We will adjust total unrecognized compensation cost for future forfeitures. We expect to recognize the cost of non-cash stock-based compensation expense related to non-vested stock options and RSUs over a weighted average amortization period of 1.4 years and 2.5 years, respectively.

On September 18, 2019, Paula Soteropoulos, former Chief Executive Officer, Sarah Boyce, former President, and Jeffrey M. Goldberg, former Chief Operating Officer entered into Separation Agreements that terminated their employment with us and, with respect to Ms. Soteropoulos and Ms. Boyce, their positions on our board of directors, effective September 18, 2019. The unvested equity awards for Ms. Boyce were terminated on the separation date. In addition, on September 18, 2019, we entered into a Consulting Agreement with Ms. Soteropoulos, which was amended on October 30, 2019, and a Consulting Agreement with Mr. Goldberg, pursuant to which they agreed to provide consulting services to us through November 4, 2019 and October 31, 2019, respectively. Under the terms of the 2015 Plan, their equity awards continued to vest through the end of each such consulting periods. We have updated our estimates of forfeitures for equity awards for these departed officers to reflect only those awards expected to vest, resulting in a reversal in the quarter ended September 30, 2019 of $18.8 million of stock-based compensation expense previously recognized.

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Basic and Diluted Net Loss Per Share (Tables)

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Basic Loss Per Share

The following table summarizes the distributable losses for the three and nine months ended September 30, 2019 and 2018 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net loss	$	(31,498	)	$	(63,591	)	$	(41,634	)	$	(155,264	)
Distributions to Ionis		—			—			(13,492	)		(7,792	)
Distributable losses	$	(31,498	)	$	(63,591	)	$	(55,126	)	$	(163,056	)

The following table summarizes the reconciliation of weighted-average shares outstanding used in the calculation of basic loss per share for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Determination of shares:
Weighted-average common shares outstanding    owned by Ionis		70,221,338		65,538,467		69,680,886		57,346,539
Weighted-average common shares outstanding    owned by others		22,821,555		21,671,415		22,509,819		21,446,813
Total weighted-average shares outstanding		93,042,893		87,209,882		92,190,705		78,793,352

The following table summarizes the calculation of basic loss per share for the three and nine months ended September 30, 2019 and 2018 (in thousands, except per share and share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Losses allocated to Ionis	$	(23,772	)	$	(47,789	)	$	(41,666	)	$	(118,674	)
Plus: Distribution to Ionis		—			—			13,492			7,792
Losses available to Ionis	$	(23,772	)	$	(47,789	)	$	(28,174	)	$	(110,882	)
Weighted-average common shares outstanding    owned by Ionis		70,221,338			65,538,467			69,680,886			57,346,539
Basic loss per common share owned by Ionis	$	(0.34	)	$	(0.73	)	$	(0.40	)	$	(1.93	)
Losses allocated to common shares owned by    others	$	(7,726	)	$	(15,802	)	$	(13,460	)	$	(44,382	)
Weighted-average common shares outstanding    owned by others		22,821,555			21,671,415			22,509,819			21,446,813
Basic loss per common share owned by others	$	(0.34	)	$	(0.73	)	$	(0.60	)	$	(2.07	)

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Revenue:
Revenue	$ 20,624	$ 19,241	$ 211,064	$ 54,670
Expenses:
Cost of sales - intangible asset amortization	1,434	701	4,256	701
Research and development	24,797	29,381	144,687	96,808
Selling, general and administrative	34,905	45,924	130,247	107,676
Total expenses	53,214	84,249	256,153	213,428
Loss from operations	(32,590)	(65,008)	(45,089)	(158,758)
Other income (expense):
Investment income	1,487	1,675	4,282	4,089
Other (expense)	(136)	(25)	(276)	(148)
Loss before income tax expense	(31,239)	(63,358)	(41,083)	(154,817)
Income tax expense	(259)	(233)	(551)	(447)
Net loss	(31,498)	(63,591)	(41,634)	(155,264)
Ionis [Member]
Expenses:
Net loss share from commercial activities under arrangement with Ionis Pharmaceuticals, Inc.	(8,889)		(29,410)
Common Stock [Member] | Ionis [Member]
Other income (expense):
Net loss	$ (23,772)	$ (47,789)	$ (28,174)	$ (110,882)
Net loss per share, basic and diluted (in dollars per share)	$ (0.34)	$ (0.73)	$ (0.40)	$ (1.93)
Weighted-average shares outstanding, basic and diluted (in shares)	70,221,338	65,538,467	69,680,886	57,346,539
Common Stock [Member] | Others [Member]
Other income (expense):
Net loss per share, basic and diluted (in dollars per share)	$ (0.34)	$ (0.73)	$ (0.60)	$ (2.07)
Weighted-average shares outstanding, basic and diluted (in shares)	22,821,555	21,671,415	22,509,819	21,446,813
Product [Member]
Revenue:
Revenue	$ 11,944		$ 28,563
Expenses:
Cost of sales	967	$ 1,043	3,373	$ 1,043
Licensing [Member]
Revenue:
Revenue	136	12,000	6,172	12,000
Expenses:
Cost of sales		7,200	3,000	7,200
Research and Development and License Revenue Under Collaborative Agreement [Member]
Revenue:
Revenue	$ 8,544	$ 7,241	$ 176,329	$ 42,670

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, revenue recognition and the accrual for research and development expenses. Estimates are periodically reviewed in light of changes in facts, circumstances and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Translation of Foreign Currency

Translation of Foreign Currency

For our foreign subsidiaries that report in a functional currency other than U.S. dollars, we translate their assets and liabilities into U.S. dollars using the exchange rate at the balance sheet date. We translate revenue and expenses at the monthly average exchange rates for the period. We translate transactions in our capital accounts at the historic exchange rate in effect at the date of the transaction. We include foreign currency translation adjustments as a component of accumulated other comprehensive loss within the condensed consolidated statements of comprehensive loss.

Revenue Recognition

Revenue Recognition

Collaboration and License Revenue

In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606), or Topic 606, which amended the guidance for accounting for revenue from contracts with customers. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, once the contract is determined to be within the scope of Topic 606, we assess the goods or services promised within each contract and determine those that are performance obligations, then assess whether each promised good or service is distinct. When we offer options for additional goods or services, such as an option to license a drug in the future or for additional goods or services to be provided in the future, we evaluate whether such options are material rights that should be treated as additional performance obligations. We typically have concluded that the option to license a drug or the options for additional goods or services that may be requested in the future under our collaboration agreements are not material rights as the amounts attributable to such options represent standalone selling price, and therefore no consideration is allocated to these items at the inception of an agreement. When a partner exercises its option to license a drug or requests the additional goods or services, a new performance obligation is created for that item. Once performance obligations are identified, we then recognize as revenue the amount of the transaction price that we allocated to the respective performance obligation when (or as) each performance obligation is satisfied, either at a point in time or over time. If the performance obligation is satisfied over time, we recognize revenue based on the use of an output or input method. As of September 30, 2019, we had three collaborative and license revenue agreements: our strategic collaboration, option and license agreement with Novartis Pharma AG, or Novartis, which we entered into in January 2017, our collaboration and license agreement with PTC Therapeutics International Limited, or PTC Therapeutics, which we entered into in August 2018, and our TTR development, commercialization, collaboration and license agreement with Ionis, under which we are recognizing commercial product revenue related to TEGSEDI sales subsequent to product launch in the fourth quarter of 2018. For a complete discussion of the accounting related to our collaborative agreements, see Note 7, Strategic Collaboration with Novartis, Note 8, License Agreements and Services Agreement with Ionis, Note 9, Collaboration and License Agreement with PTC Therapeutics, and the section below entitled Product Revenue, Net.

Product Revenue Net

Product Revenue, Net

Subsequent to obtaining regulatory approval from the United States Food and Drug Administration, or FDA, on October 5, 2018, we began to sell TEGSEDI in the U.S. in the fourth quarter of 2018. The product is distributed through an exclusive distribution agreement with a third-party logistics company, or 3PL, that takes title to the product and represents our sole customer in the U.S. Our U.S. customer distributes TEGSEDI to a specialty pharmacy and a specialty distributor (collectively referred to as “wholesalers”), who then distribute the product to health care providers and patients. On July 11, 2018, we obtained regulatory approval of TEGSEDI in Europe, following which we began to sell TEGSEDI in Europe in the fourth quarter of 2018.  On May 7, 2019, we obtained regulatory approval of WAYLIVRA in Europe, following which we began to sell WAYLIVRA in Europe in the third quarter of 2019. TEGSEDI and WAYLIVRA are distributed through 3PLs that distribute the product to hospitals and pharmacies in Europe.

Revenue from product sales is recognized when the customer obtains control of our product, which occurs upon transfer of title to the customer. Revenue is recognized at the amount that we expect to be entitled to in exchange for the sale of our product.  This amount includes both fixed and variable consideration and excludes amounts that are collected from customers and remitted to governmental authorities. We record shipping and handling costs within cost of goods sold on our condensed consolidated statement of operations. We classify payments to customers or other parties in the distribution channel for services that are distinct and priced at fair value as selling, general and administrative expenses on our condensed consolidated statements of operations. Payments to customers or other parties in the distribution channel that do not meet those criteria are classified as a reduction of revenue, as discussed further below. We have elected not to adjust consideration for the effects of a significant financing component when the period between the transfer of a promised good or service to the customer and when the customer pays for that good or service will be one year or less. Our payment terms are generally between thirty to ninety days.

Reserves for Variable Consideration

Revenue from product sales is recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from discounts, returns, chargebacks, rebates, co-pay assistance and other allowances that are offered within contracts between us and our customers, wholesalers, health care providers and other indirect customers relating to the sale of TEGSEDI and WAYLIVRA. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as a reduction of accounts receivable or a current liability. Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, product revenue net of these reserves reflects our best estimate of the amount of consideration to which we are entitled based on the terms of the contract. The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is considered probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known.

The following are the components of variable consideration related to product revenue:

Chargebacks:  In the U.S., we estimate obligations resulting from contractual commitments with the government and other entities to sell products to qualified healthcare providers at prices lower than the list prices charged to our U.S. customer. Our U.S. customer charges us for the difference between what they pay for the product and the selling price to the qualified healthcare providers. We record reserves for these chargebacks related to product sold to our U.S. customer during the reporting period as well as our estimate of product that remains in the distribution channel at the end of the reporting period that we expect will be sold to qualified healthcare providers in future periods.

Government rebates: We are subject to discount obligations under government programs, including Medicaid and Medicare programs in the U.S., and we record reserves for government rebates based on statutory discount rates and estimated utilization in the period in which revenue is recognized. We estimate Medicaid and Medicare rebates based upon estimated payer mix. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability that is included in accrued expenses on our condensed consolidated balance sheet. For Medicare, we also estimate the number of patients in the prescription drug coverage gap for whom we expect we will owe an additional liability under the Medicare Part D program. On a quarterly basis, we update our estimates and record any adjustments in the period that we identify the adjustments.

Trade discounts and allowances: We provide customary invoice discounts on sales to our U.S. customer for prompt payment that are recorded as a reduction of revenue in the period the related product revenue is recognized.  

Distribution fees: We receive and pay for various distribution services provided by our U.S. and E.U. customers and wholesalers in the U.S. and these fees are generally accounted for as a reduction of revenue. To the extent that the services received are distinct from the sale of products to our customers, we classify these payments as selling, general and administrative expenses.

Product Returns: Our U.S. customer has return rights and the wholesalers in the U.S. have limited return rights primarily related to the product’s expiration date. We estimate the amount of product sales that may be returned and record the estimate as a reduction of revenue and a refund liability in the period the related product revenue is recognized. Based on our distribution model, contractual inventory limits with our U.S. customer and wholesalers and the price of TEGSEDI, we believe there will be minimal returns in the U.S. Our E.U. customers only take title to TEGSEDI and WAYLIVRA when an order is received and therefore do not maintain excess inventory levels of our products. Accordingly, there is limited return risk in the E.U. and we have not recorded any return estimate in the transaction price for products sold in Europe.

Other incentives:  In the U.S., other incentives include co-payment assistance that we provide to patients with commercial insurance that have coverage and reside in states that allow co-payment assistance. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that we expect to receive associated with product that has been recognized as revenue. The estimate is recorded as a reduction of revenue in the same period that the related revenue is recognized.

During the three and nine months ended September 30, 2019, we recorded product revenue, net, of $11.9 million and $28.6 million, respectively. Given that we began to sell WAYLIVRA in September 2019, a majority of the product revenue during the three and nine months ended September 30, 2019 relates to TEGSEDI. The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the nine months ended September 30, 2019 (in thousands):

	Chargebacks, discounts and fees			Government and other rebates			Returns		Total
Balance at December 31, 2018	$	50		$	293		$	5	$	348
Provision related to current period sales		824			1,648			254		2,726
Adjustment related to prior period sales		(4	)		(28	)		—		(32	)
Credits or payments made during the period		(601	)		(954	)		—		(1,555	)
Balance at September 30, 2019	$	269		$	959		$	259	$	1,487

Leases

Leases

Topic 842 Adoption

In February 2016, the FASB issued amended accounting guidance related to lease accounting. This guidance superseded the lease requirements we previously followed in ASC Topic 840, Leases, or Topic 840, and created a new lease accounting standard, ASC Topic 842, Leases, or Topic 842. Under Topic 842, an entity will record all leases with a term longer than one year on its balance sheet. Further, an entity will record a liability with a value equal to the present value of payments it will make over the life of the lease (lease liability) and an asset representing the underlying leased asset (right-of-use asset). The new accounting guidance requires entities to determine if its leases are operating or financing leases. Entities will recognize expense for operating leases on a straight-line basis as an operating expense. If an entity determines a lease is a financing lease, it will record both interest and amortization expense and generally the expense will be higher in the earlier periods of the lease.

We adopted Topic 842 on January 1, 2019 and adjusted our opening condensed consolidated balance sheet on that date to record our operating lease right-of-use assets and lease liabilities. We adopted Topic 842 using the available practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward historical lease classification of those leases we had in place as of January 1, 2019. Results for the nine months ended September 30, 2019 are presented under Topic 842. Results for the nine months ended September 30, 2018 are presented in accordance with our historic accounting under Topic 840.

The impact of the adoption of Topic 842 on the accompanying condensed consolidated balance sheet as of January 1, 2019 was as follows (in thousands):

	December 31, 2018		Adjustment due to adoption of Topic 842		January 1, 2019
Operating lease right-of-use assets		—		11,932		11,932
Other current liabilities		968		1,029		1,997
Long-term portion of lease liabilities		4,442		10,915		15,357

Leases

We determine if an arrangement contains a lease at inception. We currently only have operating leases. We recognize an operating lease right-of-use asset and associated short and long-term lease liability for operating leases greater than one year on our condensed consolidated balance sheet. We calculate our operating lease right-of-use asset and lease liability based on the present value of the future minimum lease payments we will pay over the lease term. We determine the lease term at the commencement date of the lease and we include renewal options in the lease term if we are reasonably certain that we will exercise the option. As our current leases do not provide an implicit interest rate, we used our incremental borrowing rate in determining the present value of future payments. We estimated the incremental borrowing rate based on the observed interest rates for secured debt issued by companies with similar credit ratings and with similar terms. Our operating lease right-of-use asset also includes any lease payments we made and excludes any tenant improvement allowances we received.

We recognize rent expense for the lease components of our operating leases on a straight-line basis over the term of our lease. We recognize non-lease components, such as common area maintenance expenses, in the period we incur the expense.

New Accounting Pronouncements - Recently Issued

New Accounting Pronouncements – Recently Issued

In June 2016, the FASB issued guidance that changes the measurement of credit losses for most financial assets and certain other instruments. If we have credit losses, this updated guidance requires us to record allowances for these instruments under a new expected credit loss model. This model requires us to estimate the expected credit loss of an instrument over its lifetime, which represents the portion of the amortized cost basis we do not expect to collect. The new guidance requires us to remeasure our allowance in each reporting period we have credit losses. The new standard is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for periods beginning after December 15, 2018. When we adopt the new standard, we will make any adjustments to beginning balances through a cumulative-effect adjustment to accumulated deficit on that date. We plan to adopt this guidance on January 1, 2020. We do not anticipate this guidance having a significant impact on our condensed consolidated financial statements and disclosures.

In August 2018, the FASB issued clarifying guidance on how to account for implementation costs related to cloud-servicing arrangements. The guidance states that if these fees qualify to be capitalized and amortized over the service period, they need to be expensed in the same line item as the service expense and recognized in the same balance sheet category. The update can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The updated guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. We plan to adopt this guidance on January 1, 2020 on a prospective basis. We do not anticipate this guidance having a significant impact on our condensed consolidated financial statements and disclosures.

In August 2018, the FASB updated its disclosure requirements related to Level 1, 2 and 3 fair value measurements. The update included deletion and modification of certain disclosure requirements and additional disclosure related to Level 3 measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. We adopted this updated guidance on January 1, 2019 and it did not have a significant impact on our disclosures.

In November 2018, the FASB issued clarifying guidance on the interaction between the collaboration accounting guidance and the new revenue recognition guidance we adopted on January 1, 2018 (Topic 606). Below is the clarifying guidance and how we will implement it (in italics):  

1) When a participant is considered a customer in a collaborative arrangement, all of the associated accounting under Topic 606 should be applied.

● We will apply all of the associated accounting under Topic 606 when we determine a participant in a collaborative arrangement is a customer.

2) Adds “unit of account” concept to collaboration accounting guidance to align with Topic 606. The “unit of account” concept is used to determine if revenue is recognized or if a contra expense is recognized from consideration received under a collaboration.

● We will use the “unit of account” concept when we receive consideration under a collaboration agreement to determine when we recognize revenue or a contra expense.

3) The clarifying guidance precludes us from recognizing revenue under Topic 606 when we determine a transaction with a collaborative partner is not a customer and is not directly related to the sales to third parties.

● When we conclude a collaboration partner is not a customer and is not directly related to the sales to third parties, we will not recognize revenue for the transaction.

The updated guidance is effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. We plan to adopt this guidance on January 1, 2020. We are currently assessing the effects it could have on our condensed consolidated financial statements and disclosures.

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Organization and Basis of Presentation

9 Months Ended

Sep. 30, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Organization and Basis of Presentation

1. Organization and Basis of Presentation

We were incorporated in Delaware in December 2014. We were organized by Ionis Pharmaceuticals, Inc., or Ionis, to focus on developing and commercializing drugs to treat patients with rare and serious diseases. On July 19, 2017, we completed our initial public offering, or IPO. As of September 30, 2019, Ionis owned approximately 75% of our common stock and is our majority shareholder. Prior to our IPO, we were wholly owned by Ionis.

The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, or U.S. GAAP.

The condensed consolidated financial statements include the accounts of Akcea Therapeutics, Inc. and our wholly owned subsidiaries ("we," "our," and "us"). All intercompany transactions and balances were eliminated in consolidation. We included all normal recurring adjustments in the financial statements that we considered necessary for a fair presentation of our financial position and our operating results and cash flows for the interim periods ended September 30, 2019 and 2018. Certain amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. Results for the interim periods are not necessarily indicative of the results for the entire year. For more complete financial information, these financial statements, and notes thereto, should be read in conjunction with the audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.

In accordance with Accounting Standards Codification, or ASC, 205-40, Going Concern, we evaluated whether there are conditions and events, considered in the aggregate, that raise substantial doubt about our ability to continue as a going concern within one year after the date that the condensed consolidated financial statements are issued. We have incurred losses since our inception and have funded our cash flow deficits primarily through the issuance of capital stock and the proceeds from licensing and collaboration agreements. As of September 30, 2019, we had an accumulated deficit of $563.7 million. During the three and nine months ended September 30, 2019, we generated losses of $31.5 and $41.6 million, respectively, and during the nine months ended September 30, 2019, we provided $15.1 million in cash from operations. We expect to generate operating losses and negative operating cash flows for the foreseeable future; however, we may generate positive cash flows from out-licensing transactions such as the Pfizer transaction that is currently subject to regulatory approval and would result in significant upfront cash flows during the fourth quarter of 2019 if approved. The transition to sustained profitability is dependent upon the successful development, approval, and commercialization of our products and product candidates and the achievement of a level of revenue adequate to support our cost structure. We believe that our currently available funds of $252.7 million as of September 30, 2019, cash expected to be generated from sales of TEGSEDI, which has been approved in the U.S., the European Union, or E.U., and Canada, and cash expected to be generated from sales of WAYLIVRA, which has been approved in the E.U., will be sufficient to fund our operations through at least the next 12 months from the issuance of this Quarterly Report on Form 10-Q. Management’s belief with respect to its ability to fund operations is based on estimates that are subject to risks and uncertainties. If actual results are different from management’s estimates, we may need to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and commercialize our drugs even if we would otherwise prefer to develop and commercialize the drugs ourselves. For additional detail regarding our license agreement with Pfizer, see Note 13, Subsequent Events.

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Inventory (Tables)

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Schedule of Inventory

The following table presents inventory (in thousands):

	September 30,		December 31,
	2019		2018
Raw materials	$	6,520	$	—
Work in process		1,802		—
Finished goods		319		85
Total inventories	$	8,641	$	85

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Strategic Collaboration with Novartis (Details) $ in Thousands		1 Months Ended	3 Months Ended				9 Months Ended
	Feb. 22, 2019 USD ($) shares	Jul. 31, 2017 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Mar. 31, 2018	Mar. 31, 2017 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2018 USD ($)	Jan. 31, 2017 PerformanceObligation
Strategic Collaboration with Novartis [Abstract]
Revenue			$ 20,624	$ 19,241			$ 211,064	$ 54,670
Revenue recognized from deferred revenue			2,300	6,800			18,000	36,500
Ionis [Member] | Akcea [Member]
Strategic Collaboration with Novartis [Abstract]
Sublicense fee payable			75,000				75,000
Ionis [Member] | Common Stock [Member] | Akcea [Member]
Strategic Collaboration with Novartis [Abstract]
Issuance of stock (in shares) | shares	2,837,373
Development Services for AKCEA-APO(a)-L [Member]
Strategic Collaboration with Novartis [Abstract]
Transaction price						$ 64,000
Development Services for AKCEA-APOCIII-L [Member]
Strategic Collaboration with Novartis [Abstract]
Transaction price						40,100
Delivery of AKCEA-APO(a)-L [Member]
Strategic Collaboration with Novartis [Abstract]
Transaction price						1,500
Delivery of AKCEA-APOCIII-L [Member]
Strategic Collaboration with Novartis [Abstract]
Transaction price						2,800
Licensing [Member]
Strategic Collaboration with Novartis [Abstract]
Revenue			136	12,000			6,172	12,000
Licensing [Member] | Akcea [Member]
Strategic Collaboration with Novartis [Abstract]
Revenue	$ 150,000
AKCEA-APO(a)-L [Member]
Strategic Collaboration with Novartis [Abstract]
Maximum amount of payments receivable for milestones			675,000				675,000
Maximum amount of payments receivable for development milestones			25,000				25,000
Maximum amount of payments receivable for regulatory milestones			290,000				290,000
Maximum amount of payments receivable for commercialization milestones			360,000				$ 360,000
Royalty percentage received on sales of drug							20.00%
AKCEA-APOCIII-L [Member]
Strategic Collaboration with Novartis [Abstract]
Sublicense fee payable			75,000				$ 75,000
Maximum amount of payments receivable for milestones			530,000				530,000
Maximum amount of payments receivable for development milestones			25,000				25,000
Maximum amount of payments receivable for regulatory milestones			240,000				240,000
Maximum amount of payments receivable for commercialization milestones			265,000				$ 265,000
Royalty percentage received on sales of drug							20.00%
Research and Development and License Revenue Under Collaborative Agreement [Member]
Strategic Collaboration with Novartis [Abstract]
Revenue			8,544	7,241			$ 176,329	42,670
Novartis [Member]
Strategic Collaboration with Novartis [Abstract]
Upfront payment received						75,000
Portion of upfront payment retained						60,000
Portion of upfront payment paid as sublicense fee to Ionis						15,000
Number of separate performance obligations | PerformanceObligation									4
Transaction price						108,400
Premium received on shares issued by lonis						28,400
Revenue			8,500	7,200			176,300	42,700
Next prospective milestone			25,000				$ 25,000
Percentage of license fees, milestone payments and royalties paid as sublicense fee to lonis							50.00%
Deferred revenue			10,800	$ 28,800			$ 10,800	$ 28,800
Potential premium received if Ionis common stock is purchased in the future						$ 5,000
Number of months from inception of agreement for IPO to be completed					15 months
Proceeds from sale of common stock to Novartis in a private placement		$ 50,000
Novartis [Member] | AKCEA-APOCIII-L [Member]
Strategic Collaboration with Novartis [Abstract]
License fee receivable per drug			$ 150,000				150,000
Novartis [Member] | Research and Development and License Revenue Under Collaborative Agreement [Member] | Revenue [Member] | Strategic Partner [Member]
Strategic Collaboration with Novartis [Abstract]
Concentration percentage			100.00%
Novartis [Member] | Delivery of AKCEA-APO(a)-L [Member]
Strategic Collaboration with Novartis [Abstract]
Revenue							$ 5,500

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Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw materials	$ 6,520
Work in process	1,802
Finished goods	319	$ 85
Total inventories	$ 8,641	$ 85

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License Agreements and Services Agreement with Ionis - Summary of Development Expenses Related to TTR Agreement (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Related Party Transaction [Line Items]
Total development expense incurred by the collaboration related to development activities under the TTR Agreement	$ (17,243)	$ (43,655)
Akcea [Member]
Related Party Transaction [Line Items]
Akcea's share of TTR development expense reflected in research and development expense in our condensed consolidated statements of operations	$ (7,525)	$ (18,923)

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Subsequent Events

9 Months Ended

Sep. 30, 2019

Subsequent Events [Abstract]

Subsequent Events

13. Subsequent Events

On October 4, 2019, we entered into a license agreement, or the Pfizer License Agreement, with Pfizer Inc., or Pfizer, for the development and commercialization of AKCEA-ANGPTL3-L_Rx. In addition to customary closing conditions, consummation of the transaction contemplated by the Pfizer License Agreement is currently subject to obtaining clearance required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

Under the terms of the Pfizer License Agreement, we granted Pfizer an exclusive license, with the right to grant certain sublicenses, to develop, manufacture, commercialize and otherwise exploit AKCEA-ANGPTL3-L_Rx worldwide. We have the right, at our option, to participate in commercialization activities with Pfizer in the U.S. and certain additional markets. At closing, as payment for the grant of rights to Pfizer under the Pfizer License Agreement, Pfizer will pay us a $250 million upfront license fee, which will be split equally with Ionis in accordance with the Cardiometabolic License Agreement with Ionis dated December 18, 2015. We will settle its $125 million obligation to Ionis through the issuance of shares of our common stock. In addition, we are eligible to receive up to $1.3 billion in milestone payments, including up to $205.0 million for the achievement of  development milestones, up to $250.0 million for the achievement of regulatory milestones and up to $850.0 million for the achievement of commercialization milestones. We are also eligible to receive tiered, double digit royalties in the mid-teens to low twenty percent range on net sales of AKCEA-ANGPTL3-L_Rx, and Pfizer will reduce these royalties upon the expiration of certain patents or if a generic competitor negatively impacts the product in a specific country. The royalty payments are subject to certain other reductions in certain circumstances as set forth in the Agreement. We will pay 50% of license fees, milestone payments and royalties under this agreement to Ionis as a sublicense fee.

The Pfizer License Agreement continues until the expiration of the last-to-expire royalty term with respect to all AKCEA-ANGPTL3-L_Rx products worldwide. Prior to the first commercial sale of AKCEA-ANGPTL3-L_Rx in the U.S., either party may terminate the Pfizer License Agreement on written notice to the other party if the other party is in material breach of its obligations thereunder and has not cured such breach within 30 days after notice in the case of a payment breach or 90 days after notice in the case of any other breach. In addition, at any time following payment by Pfizer of the upfront license fee, Pfizer may terminate the Pfizer License Agreement for convenience by providing 90 days written notice to us.

In October 2019, PTC Therapeutics received approval for TEGSEDI in Brazil. As a result of the approval, we will receive a $4.0 million payment from PTC Therapeutics, of which we will pay Ionis $2.4 million as a sublicense fee related to the Cardiometabolic License Agreement.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

The accounting policies followed in the preparation of the interim condensed consolidated financial statements are consistent in all material respects with those presented in Note 2 to our financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, revenue recognition and the accrual for research and development expenses. Estimates are periodically reviewed in light of changes in facts, circumstances and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.

Translation of Foreign Currency

For our foreign subsidiaries that report in a functional currency other than U.S. dollars, we translate their assets and liabilities into U.S. dollars using the exchange rate at the balance sheet date. We translate revenue and expenses at the monthly average exchange rates for the period. We translate transactions in our capital accounts at the historic exchange rate in effect at the date of the transaction. We include foreign currency translation adjustments as a component of accumulated other comprehensive loss within the condensed consolidated statements of comprehensive loss.

Revenue Recognition

Collaboration and License Revenue

In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers (Topic 606), or Topic 606, which amended the guidance for accounting for revenue from contracts with customers. Under Topic 606, an entity recognizes revenue when its customer obtains control of promised goods or services in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services.

To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the entity performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. At contract inception, once the contract is determined to be within the scope of Topic 606, we assess the goods or services promised within each contract and determine those that are performance obligations, then assess whether each promised good or service is distinct. When we offer options for additional goods or services, such as an option to license a drug in the future or for additional goods or services to be provided in the future, we evaluate whether such options are material rights that should be treated as additional performance obligations. We typically have concluded that the option to license a drug or the options for additional goods or services that may be requested in the future under our collaboration agreements are not material rights as the amounts attributable to such options represent standalone selling price, and therefore no consideration is allocated to these items at the inception of an agreement. When a partner exercises its option to license a drug or requests the additional goods or services, a new performance obligation is created for that item. Once performance obligations are identified, we then recognize as revenue the amount of the transaction price that we allocated to the respective performance obligation when (or as) each performance obligation is satisfied, either at a point in time or over time. If the performance obligation is satisfied over time, we recognize revenue based on the use of an output or input method. As of September 30, 2019, we had three collaborative and license revenue agreements: our strategic collaboration, option and license agreement with Novartis Pharma AG, or Novartis, which we entered into in January 2017, our collaboration and license agreement with PTC Therapeutics International Limited, or PTC Therapeutics, which we entered into in August 2018, and our TTR development, commercialization, collaboration and license agreement with Ionis, under which we are recognizing commercial product revenue related to TEGSEDI sales subsequent to product launch in the fourth quarter of 2018. For a complete discussion of the accounting related to our collaborative agreements, see Note 7, Strategic Collaboration with Novartis, Note 8, License Agreements and Services Agreement with Ionis, Note 9, Collaboration and License Agreement with PTC Therapeutics, and the section below entitled Product Revenue, Net.

Product Revenue, Net

Subsequent to obtaining regulatory approval from the United States Food and Drug Administration, or FDA, on October 5, 2018, we began to sell TEGSEDI in the U.S. in the fourth quarter of 2018. The product is distributed through an exclusive distribution agreement with a third-party logistics company, or 3PL, that takes title to the product and represents our sole customer in the U.S. Our U.S. customer distributes TEGSEDI to a specialty pharmacy and a specialty distributor (collectively referred to as “wholesalers”), who then distribute the product to health care providers and patients. On July 11, 2018, we obtained regulatory approval of TEGSEDI in Europe, following which we began to sell TEGSEDI in Europe in the fourth quarter of 2018.  On May 7, 2019, we obtained regulatory approval of WAYLIVRA in Europe, following which we began to sell WAYLIVRA in Europe in the third quarter of 2019. TEGSEDI and WAYLIVRA are distributed through 3PLs that distribute the product to hospitals and pharmacies in Europe.

Revenue from product sales is recognized when the customer obtains control of our product, which occurs upon transfer of title to the customer. Revenue is recognized at the amount that we expect to be entitled to in exchange for the sale of our product.  This amount includes both fixed and variable consideration and excludes amounts that are collected from customers and remitted to governmental authorities. We record shipping and handling costs within cost of goods sold on our condensed consolidated statement of operations. We classify payments to customers or other parties in the distribution channel for services that are distinct and priced at fair value as selling, general and administrative expenses on our condensed consolidated statements of operations. Payments to customers or other parties in the distribution channel that do not meet those criteria are classified as a reduction of revenue, as discussed further below. We have elected not to adjust consideration for the effects of a significant financing component when the period between the transfer of a promised good or service to the customer and when the customer pays for that good or service will be one year or less. Our payment terms are generally between thirty to ninety days.

Reserves for Variable Consideration

Revenue from product sales is recorded at the net sales price (transaction price), which includes estimates of variable consideration for which reserves are established and which result from discounts, returns, chargebacks, rebates, co-pay assistance and other allowances that are offered within contracts between us and our customers, wholesalers, health care providers and other indirect customers relating to the sale of TEGSEDI and WAYLIVRA. These reserves are based on the amounts earned or to be claimed on the related sales and are classified as a reduction of accounts receivable or a current liability. Where appropriate, these estimates take into consideration a range of possible outcomes that are probability-weighted for relevant factors such as our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. Overall, product revenue net of these reserves reflects our best estimate of the amount of consideration to which we are entitled based on the terms of the contract. The amount of variable consideration that is included in the transaction price may be constrained and is included in the net sales price only to the extent that it is considered probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such variances become known.

The following are the components of variable consideration related to product revenue:

Chargebacks:  In the U.S., we estimate obligations resulting from contractual commitments with the government and other entities to sell products to qualified healthcare providers at prices lower than the list prices charged to our U.S. customer. Our U.S. customer charges us for the difference between what they pay for the product and the selling price to the qualified healthcare providers. We record reserves for these chargebacks related to product sold to our U.S. customer during the reporting period as well as our estimate of product that remains in the distribution channel at the end of the reporting period that we expect will be sold to qualified healthcare providers in future periods.

Government rebates: We are subject to discount obligations under government programs, including Medicaid and Medicare programs in the U.S., and we record reserves for government rebates based on statutory discount rates and estimated utilization in the period in which revenue is recognized. We estimate Medicaid and Medicare rebates based upon estimated payer mix. These reserves are recorded in the same period the related revenue is recognized, resulting in a reduction of product revenue and the establishment of a liability that is included in accrued expenses on our condensed consolidated balance sheet. For Medicare, we also estimate the number of patients in the prescription drug coverage gap for whom we expect we will owe an additional liability under the Medicare Part D program. On a quarterly basis, we update our estimates and record any adjustments in the period that we identify the adjustments.

Trade discounts and allowances: We provide customary invoice discounts on sales to our U.S. customer for prompt payment that are recorded as a reduction of revenue in the period the related product revenue is recognized.  

Distribution fees: We receive and pay for various distribution services provided by our U.S. and E.U. customers and wholesalers in the U.S. and these fees are generally accounted for as a reduction of revenue. To the extent that the services received are distinct from the sale of products to our customers, we classify these payments as selling, general and administrative expenses.

Product Returns: Our U.S. customer has return rights and the wholesalers in the U.S. have limited return rights primarily related to the product’s expiration date. We estimate the amount of product sales that may be returned and record the estimate as a reduction of revenue and a refund liability in the period the related product revenue is recognized. Based on our distribution model, contractual inventory limits with our U.S. customer and wholesalers and the price of TEGSEDI, we believe there will be minimal returns in the U.S. Our E.U. customers only take title to TEGSEDI and WAYLIVRA when an order is received and therefore do not maintain excess inventory levels of our products. Accordingly, there is limited return risk in the E.U. and we have not recorded any return estimate in the transaction price for products sold in Europe.

Other incentives:  In the U.S., other incentives include co-payment assistance that we provide to patients with commercial insurance that have coverage and reside in states that allow co-payment assistance. The calculation of the accrual for co-pay assistance is based on an estimate of claims and the cost per claim that we expect to receive associated with product that has been recognized as revenue. The estimate is recorded as a reduction of revenue in the same period that the related revenue is recognized.

During the three and nine months ended September 30, 2019, we recorded product revenue, net, of $11.9 million and $28.6 million, respectively. Given that we began to sell WAYLIVRA in September 2019, a majority of the product revenue during the three and nine months ended September 30, 2019 relates to TEGSEDI. The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the nine months ended September 30, 2019 (in thousands):

	Chargebacks, discounts and fees			Government and other rebates			Returns		Total
Balance at December 31, 2018	$	50		$	293		$	5	$	348
Provision related to current period sales		824			1,648			254		2,726
Adjustment related to prior period sales		(4	)		(28	)		—		(32	)
Credits or payments made during the period		(601	)		(954	)		—		(1,555	)
Balance at September 30, 2019	$	269		$	959		$	259	$	1,487

Leases

Topic 842 Adoption

In February 2016, the FASB issued amended accounting guidance related to lease accounting. This guidance superseded the lease requirements we previously followed in ASC Topic 840, Leases, or Topic 840, and created a new lease accounting standard, ASC Topic 842, Leases, or Topic 842. Under Topic 842, an entity will record all leases with a term longer than one year on its balance sheet. Further, an entity will record a liability with a value equal to the present value of payments it will make over the life of the lease (lease liability) and an asset representing the underlying leased asset (right-of-use asset). The new accounting guidance requires entities to determine if its leases are operating or financing leases. Entities will recognize expense for operating leases on a straight-line basis as an operating expense. If an entity determines a lease is a financing lease, it will record both interest and amortization expense and generally the expense will be higher in the earlier periods of the lease.

We adopted Topic 842 on January 1, 2019 and adjusted our opening condensed consolidated balance sheet on that date to record our operating lease right-of-use assets and lease liabilities. We adopted Topic 842 using the available practical expedients permitted under the transition guidance within the new standard, which, among other things, allowed us to carry forward historical lease classification of those leases we had in place as of January 1, 2019. Results for the nine months ended September 30, 2019 are presented under Topic 842. Results for the nine months ended September 30, 2018 are presented in accordance with our historic accounting under Topic 840.

The impact of the adoption of Topic 842 on the accompanying condensed consolidated balance sheet as of January 1, 2019 was as follows (in thousands):

	December 31, 2018		Adjustment due to adoption of Topic 842		January 1, 2019
Operating lease right-of-use assets		—		11,932		11,932
Other current liabilities		968		1,029		1,997
Long-term portion of lease liabilities		4,442		10,915		15,357

Leases

We determine if an arrangement contains a lease at inception. We currently only have operating leases. We recognize an operating lease right-of-use asset and associated short and long-term lease liability for operating leases greater than one year on our condensed consolidated balance sheet. We calculate our operating lease right-of-use asset and lease liability based on the present value of the future minimum lease payments we will pay over the lease term. We determine the lease term at the commencement date of the lease and we include renewal options in the lease term if we are reasonably certain that we will exercise the option. As our current leases do not provide an implicit interest rate, we used our incremental borrowing rate in determining the present value of future payments. We estimated the incremental borrowing rate based on the observed interest rates for secured debt issued by companies with similar credit ratings and with similar terms. Our operating lease right-of-use asset also includes any lease payments we made and excludes any tenant improvement allowances we received.

We recognize rent expense for the lease components of our operating leases on a straight-line basis over the term of our lease. We recognize non-lease components, such as common area maintenance expenses, in the period we incur the expense.

New Accounting Pronouncements – Recently Issued

In June 2016, the FASB issued guidance that changes the measurement of credit losses for most financial assets and certain other instruments. If we have credit losses, this updated guidance requires us to record allowances for these instruments under a new expected credit loss model. This model requires us to estimate the expected credit loss of an instrument over its lifetime, which represents the portion of the amortized cost basis we do not expect to collect. The new guidance requires us to remeasure our allowance in each reporting period we have credit losses. The new standard is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for periods beginning after December 15, 2018. When we adopt the new standard, we will make any adjustments to beginning balances through a cumulative-effect adjustment to accumulated deficit on that date. We plan to adopt this guidance on January 1, 2020. We do not anticipate this guidance having a significant impact on our condensed consolidated financial statements and disclosures.

In August 2018, the FASB issued clarifying guidance on how to account for implementation costs related to cloud-servicing arrangements. The guidance states that if these fees qualify to be capitalized and amortized over the service period, they need to be expensed in the same line item as the service expense and recognized in the same balance sheet category. The update can be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The updated guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. We plan to adopt this guidance on January 1, 2020 on a prospective basis. We do not anticipate this guidance having a significant impact on our condensed consolidated financial statements and disclosures.

In August 2018, the FASB updated its disclosure requirements related to Level 1, 2 and 3 fair value measurements. The update included deletion and modification of certain disclosure requirements and additional disclosure related to Level 3 measurements. The guidance is effective for fiscal years beginning after December 15, 2019 and early adoption is permitted. We adopted this updated guidance on January 1, 2019 and it did not have a significant impact on our disclosures.

In November 2018, the FASB issued clarifying guidance on the interaction between the collaboration accounting guidance and the new revenue recognition guidance we adopted on January 1, 2018 (Topic 606). Below is the clarifying guidance and how we will implement it (in italics):  

1) When a participant is considered a customer in a collaborative arrangement, all of the associated accounting under Topic 606 should be applied.

● We will apply all of the associated accounting under Topic 606 when we determine a participant in a collaborative arrangement is a customer.

2) Adds “unit of account” concept to collaboration accounting guidance to align with Topic 606. The “unit of account” concept is used to determine if revenue is recognized or if a contra expense is recognized from consideration received under a collaboration.

● We will use the “unit of account” concept when we receive consideration under a collaboration agreement to determine when we recognize revenue or a contra expense.

3) The clarifying guidance precludes us from recognizing revenue under Topic 606 when we determine a transaction with a collaborative partner is not a customer and is not directly related to the sales to third parties.

● When we conclude a collaboration partner is not a customer and is not directly related to the sales to third parties, we will not recognize revenue for the transaction.

The updated guidance is effective for public entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. We plan to adopt this guidance on January 1, 2020. We are currently assessing the effects it could have on our condensed consolidated financial statements and disclosures.

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Property, Plant and Equipment (Table)

9 Months Ended

Sep. 30, 2019

Property Plant And Equipment [Abstract]

Summary of Property and Equipment at Cost and Related Accumulated Depreciation

The following table presents property and equipment, at cost, and related accumulated depreciation (in thousands):

	September 30,			December 31,
	2019			2018
Furniture and fixtures	$	1,611		$	1,611
Computer equipment and software		140			102
Manufacturing equipment		386			—
Leasehold improvements		3,955			4,213
Total property and equipment, at cost		6,092			5,926
Less accumulated depreciation and amortization		(815	)		(230	)
Total property and equipment, net	$	5,277		$	5,696

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2019	Oct. 31, 2019
Cover [Abstract]
Entity Registrant Name	Akcea Therapeutics, Inc.
Entity Central Index Key	0001662524
Entity Current Reporting Status	Yes
Document Type	10-Q
Document Period End Date	Sep. 30, 2019
Amendment Flag	false
Trading Symbol	AKCA
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock Shares Outstanding		93,901,338
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock
Security Exchange Name	NASDAQ
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	true
Entity Shell Company	false
Entity Address, Address Line One	22 Boston Wharf Road
Entity Address, Address Line Two	9th Floor
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02210
City Area Code	617
Local Phone Number	207-0202
Entity File Number	001-38137
Entity Tax Identification Number	47-2608175
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Document Transition Report	false

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2019

Stockholders Equity [Abstract]

Weighted-Average Assumptions for Stock Options

For the nine months ended September 30, 2019 and 2018, we used the following weighted-average assumptions in our Black-Scholes calculations:

Employee Stock Options:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		2.3	%		2.7	%
Dividend yield		0.0	%		0.0	%
Volatility		75.6	%		77.1	%
Expected life	6.1 years			6.1 years

Board of Directors Stock Options:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		1.8	%		2.9	%
Dividend yield		0.0	%		0.0	%
Volatility		73.8	%		78.2	%
Expected life	6.3 years			6.4 years

2017ESPP:

	Nine Months Ended September 30,
	2019			2018
Risk-free interest rate		2.4	%		1.9	%
Dividend yield		0.0	%		0.0	%
Volatility		60.0	%		64.2	%
Expected life	6 months			6 months

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense for the three and nine months ended September 30, 2019 and 2018 (in thousands):

	Three Months Ended September 30,					Nine Months Ended September 30,
	2019			2018		2019		2018
Cost of sales - product	$	127		$	—	$	382	$	—
Research and development expenses		2,814			2,313		9,298		6,868
Selling, general and administrative expenses		(6,405	)		10,417		19,779		24,371
Total	$	(3,464	)	$	12,730	$	29,459	$	31,239

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (31,498)	$ (63,591)	$ (41,634)	$ (155,264)
Unrealized gains on debt securities, net of tax	64	37	286	143
Currency translation adjustment	(17)	(29)	(25)	19
Comprehensive loss	$ (31,451)	$ (63,583)	$ (41,373)	$ (155,102)

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License Agreements and Services Agreement with Ionis, Services Agreement (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Services Agreement with Ionis [Abstract]
Payment term after receipt of invoice			30 days
Term of extension for services agreement			6 months
Operating expenses:
Distribution to Ionis			$ (13,492)	$ (7,792)
Ionis [Member] | Services Agreement [Member]
Operating expenses:
Services performed by Ionis	$ 1,075	$ 3,192	3,225	11,182
Active pharmaceutical ingredient manufactured by Ionis	5,515		5,515	5,229
Pre-commercial inventory manufactured by Ionis				5,996
Sublicensing expenses		7,200	78,000	7,200
Out-of-pocket expenses paid by Ionis	954	15,850	3,800	31,074
Less: commercial share of loss in connection with the TTR license transaction	(8,889)		(29,410)
Less: R&D share of loss in connection with the TTR license transaction	700		1,108
Total operating expenses generated by transactions with Ionis	(645)	26,242	62,238	60,681
Distribution to Ionis			13,492	7,792
Total charges generated by transactions with Ionis	(645)	26,242	75,730	68,473
(Receivable) payable balance (from) to Ionis at the beginning of the period	(7,911)	27,137	18,901	14,365
Less: total amounts received from (paid to) Ionis during the period	7,909	(29,491)	(20,278)	(58,017)
Less: receivable from Ionis				(933)
Less: non-cash sublicensing expenses			(75,000)
Total amount (receivable) payable (from) to Ionis at period end	$ (647)	$ 23,888	$ (647)	$ 23,888

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License Agreements and Services Agreement with Ionis, Cardiometabolic Development, Commercialization and License Agreement (Details) - Ionis [Member] - Cardiometabolic Development, Commercialization and License Agreement [Member] $ in Millions	9 Months Ended
	Sep. 30, 2019 USD ($) Patient qtr
Development, Commercialization and License Agreement with Ionis [Abstract]
Royalty percentage paid on sales of lipid drug	20.00%
First annual sales threshold | $	$ 500.0
Second annual sales threshold | $	1,000.0
Third annual sales threshold | $	2,000.0
Sales milestone payment | $	$ 50.0
Number of quarters in which equal payments are made | qtr	12
Percentage of license fees, milestone payments and royalties paid as sublicense fee to lonis	50.00%
Lipid Drug for Rare Disease Indication [Member] | Maximum [Member]
Development, Commercialization and License Agreement with Ionis [Abstract]
Number of patients worldwide | Patient	500,000
Number of patients for Phase 3 program | Patient	1,000
Number of years of treatment	2 years
Lipid Drug for a Broad Disease Patient Population [Member] | Minimum [Member]
Development, Commercialization and License Agreement with Ionis [Abstract]
Number of patients worldwide | Patient	500,000
Number of patients for Phase 3 program | Patient	1,000
Number of years of treatment	2 years

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Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Dec. 31, 2018
Finite Lived Intangible Assets [Line Items]
Less accumulated amortization	$ (7,733)	$ (3,348)
Total intangible assets, net	84,529	88,914
Acquired and In-licensed Rights [Member]
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 2,262	2,262
Acquired and In-licensed Rights [Member] | Minimum [Member]
Finite Lived Intangible Assets [Line Items]
Estimated useful life	7 years
Acquired and In-licensed Rights [Member] | Maximum [Member]
Finite Lived Intangible Assets [Line Items]
Estimated useful life	21 years
Capitalized Regulatory Approval Milestones [Member]
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 90,000	$ 90,000
Estimated useful life	16 years

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Collaboration and License Agreement with PTC Therapeutics - Additional Information (Details)		3 Months Ended		9 Months Ended
	Aug. 01, 2018 USD ($)	Sep. 30, 2019 USD ($) PerformanceObligation	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) PerformanceObligation	Sep. 30, 2018 USD ($)
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue		$ 20,624,000	$ 19,241,000	$ 211,064,000	$ 54,670,000
Cardiometabolic License Agreement [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Sublicense fee paid	$ 3,000,000
PTC Therapeutics [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Upfront payment received				12,000,000
Revenue			12,000,000	$ 6,000,000
Deferred revenue			$ 0		$ 0
Number of separate performance obligations | PerformanceObligation		2		2
Consideration amount received		$ 6,000,000		$ 6,000,000
PTC Therapeutics [Member] | Akcea [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Upfront payment received	12,000,000
Payment for sublicense royalty	7,200,000
Payment received	6,000,000
Maximum amount of payments receivable per drug for regulatory milestones	$ 8,000,000
Period before PTC pays royalties on net sales of product after first commercial sale in Brazil	12 months
Minimum revenue recognized in Latin America by PTC before paying royalties	$ 10,000,000
PTC Therapeutics [Member] | Ionis [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Payments on sublicense fee				$ 3,000,000
TEGSEDI [Member] | PTC Therapeutics [Member] | Akcea [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Milestone payments and royalties retained percentage	50.00%
TEGSEDI [Member] | PTC Therapeutics [Member] | Ionis [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Milestone payments and royalties payable percentage	60.00%
WAYLIVRA [Member] | PTC Therapeutics [Member] | Ionis [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Milestone payments and royalties payable percentage	40.00%

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Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Basic Net Loss Per Share [Abstract]
Net loss	$ (31,498)	$ (63,591)	$ (41,634)	$ (155,264)
Distribution to Ionis			(13,492)	(7,792)
Distributable losses	$ (31,498)	$ (63,591)	$ (55,126)	$ (163,056)
Common Stock [Member]
Basic Net Loss Per Share [Abstract]
Weighted-average shares outstanding owned	93,042,893	87,209,882	92,190,705	78,793,352
Common Stock [Member] | Ionis [Member]
Basic Net Loss Per Share [Abstract]
Net loss	$ (23,772)	$ (47,789)	$ (28,174)	$ (110,882)
Distribution to Ionis			13,492	7,792
Distributable losses	$ (23,772)	$ (47,789)	$ (41,666)	$ (118,674)
Weighted-average shares outstanding owned	70,221,338	65,538,467	69,680,886	57,346,539
Basic loss per common share owned by Ionis	$ (0.34)	$ (0.73)	$ (0.40)	$ (1.93)
Common Stock [Member] | Others [Member]
Basic Net Loss Per Share [Abstract]
Distributable losses	$ (7,726)	$ (15,802)	$ (13,460)	$ (44,382)
Weighted-average shares outstanding owned	22,821,555	21,671,415	22,509,819	21,446,813
Basic loss per common share owned by Ionis	$ (0.34)	$ (0.73)	$ (0.60)	$ (2.07)

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Contractual Obligations and Commitments - Summary of Annual Maturities of Operating Lease Liabilities (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Remainder of 2019	$ 621
2020	2,497
2021	2,502
2022	2,403
2023	2,400
Thereafter	11,961
Total minimum lease payments	22,384
Less: Imputed interest	(6,534)
Operating lease liabilities	$ 15,850	[1]

[1] Current portion of $1.3 million included in other current liabilities and the difference of $14.6 million included in long-term portion of lease liabilities on our condensed consolidated balance sheet.

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Property Plant Equipment - Narratives (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019	Sep. 30, 2018
Property Plant And Equipment [Abstract]
Depreciation	$ 200	$ 594	$ 109
Tenant improvement allowance		$ 3,600

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Summary of Significant Accounting Policies - Summary of Impact of Adoption of Topic 842 (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Operating lease right-of-use assets	$ 11,300
Other current liabilities	1,977		$ 968
Long-term portion of lease liabilities	$ 14,558		$ 4,442
ASU 2016-02 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Operating lease right-of-use assets		$ 11,932
Other current liabilities		1,997
Long-term portion of lease liabilities		15,357
Restatement Adjustment [Member] | ASU 2016-02 [Member]
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Operating lease right-of-use assets		11,932
Other current liabilities		1,029
Long-term portion of lease liabilities		$ 10,915

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Organization and Basis of Presentation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018	Dec. 31, 2018
Basis of Presentation and Organization [Abstract]
Accumulated deficit	$ 563,676		$ 563,676		$ 522,042
Net loss	31,498	$ 63,591	41,634	$ 155,264
Net cash provided in operating activities			15,091	$ (134,166)
Cash, cash equivalents and short-term investments	$ 252,700		$ 252,700
Ionis [Member] | Akcea [Member]
Basis of Presentation and Organization [Abstract]
Ownership percentage by Ionis	75.00%		75.00%

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Inventory

9 Months Ended

Sep. 30, 2019

Inventory Disclosure [Abstract]

Inventory

5. Inventory

Prior to the regulatory approval of our product candidates, we incur expenses for the manufacturing of drug product that could potentially be available to support the commercial launch of our products. Until the first reporting period when regulatory approval has been received or is otherwise considered probable, we record all such costs as research and development expense.

TEGSEDI inventory related costs incurred subsequent to July 1, 2018 are reflected as inventory on our condensed consolidated balance sheet at the lower of cost or net realizable value under the first-in, first-out, or FIFO, basis. We did not have capitalized costs related to WAYLIVRA on our condensed consolidated balance sheet as of September 30, 2019. We periodically analyze our inventory levels and write down inventory that has become obsolete, inventory that has a cost basis in excess of its estimated realizable value and inventory in excess of expected sales requirements as cost of product sales. The determination of whether inventory costs will be realizable requires estimates by our management and if actual market conditions are less favorable than projected by our management, additional write-downs of inventory may be required which would be recorded as a cost of product sales in the condensed consolidated statements of operations. We did not record any material inventory write-offs for the nine months ended September 30, 2019 or 2018.

The following table presents inventory (in thousands):

	September 30,		December 31,
	2019		2018
Raw materials	$	6,520	$	—
Work in process		1,802		—
Finished goods		319		85
Total inventories	$	8,641	$	85

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Collaboration and License Agreement with PTC Therapeutics

9 Months Ended

Sep. 30, 2019

Collaboration And License Agreement [Abstract]

Collaboration and License Agreement with PTC Therapeutics

9. Collaboration and License Agreement with PTC Therapeutics

In August 2018, we entered into a collaboration and license agreement with PTC Therapeutics, or the PTC License Agreement, to commercialize TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries, or the PTC Territory.

We received a $12.0 million upfront payment from PTC Therapeutics related to TEGSEDI in the third quarter of 2018 upon execution of the PTC License Agreement, of which we paid Ionis $7.2 million as a sublicense fee related to the TTR License Agreement. We received a $6.0 million payment from PTC Therapeutics in the second quarter of 2019 as a result of WAYLIVRA approval by the EC, of which we paid Ionis $3.0 million as a sublicense fee related to the Cardiometabolic License Agreement and was recorded as cost of license in the condensed consolidated statement of operations. In addition, we are eligible to receive up to $8.0 million for the achievement of regulatory milestones and royalties in the mid-twenty percent range on net sales of TEGSEDI and WAYLIVRA in the PTC Territory. PTC Therapeutics’ obligation to pay royalties to us begins on the earlier of 12 months after the first commercial sale of a product in Brazil or the date that PTC Therapeutics recognized revenue of at least $10.0 million in the PTC Territory. PTC Therapeutics will reduce these royalties upon the expiration of certain patents or if a generic competitor negatively impacts the market share of the product in the PTC Territory. Milestone payments and royalties that we are eligible to receive from PTC Therapeutics for TEGSEDI will be split 60% to Ionis and 40% to Akcea. All WAYLIVRA milestone payments and royalties that we are eligible to receive from PTC will be split 50/50 with Ionis. PTC Therapeutics is solely responsible for the commercialization of the products in the PTC Territory at its sole cost and expense, including the pursuit and maintenance of applicable regulatory approvals. Unless earlier terminated, the PTC License Agreement will continue in effect until the date on which the royalty term and all payment obligations with respect to all products in all countries in the PTC Territory have expired.

At the commencement of the PTC License Agreement, we identified two performance obligations, consisting of the transfer of (1) the license to TEGSEDI and related know-how and (2) the license to WAYLIVRA and related know-how, both of which were satisfied during the third quarter of 2018. In addition, we identified a customer option related to PTC Therapeutics’ option to purchase supply of product from us for its development and commercial needs. We considered the manufacturing capabilities of PTC Therapeutics and the fact that manufacturing services are not proprietary and can be provided by other vendors to conclude that the licenses have stand-alone functionality and are distinct. Further, the customer options for manufacturing of product is priced similar to other manufacturing options with similar customers and is therefore not considered a material right. We determined the transaction price for the PTC License Agreement to be $12.0 million comprised of the upfront payment we received. None of the regulatory milestones were included in the transaction price determined in August 2018, as all payments were fully constrained. As there were no remaining unsatisfied performance obligations as of September 30, 2018, the $12.0 million upfront payment was recognized as licensing revenue upon contract execution in the third quarter of 2018. The option to purchase supply from us is subject to the terms of a supply agreement we entered into with PTC Therapeutics in April 2019. In May 2019, we received $6.0 million of consideration from PTC Therapeutics as a result of WAYLIVRA approval by the EC and we paid $3.0 million to Ionis as a sublicense fee. Since the constraint on the regulatory approval was resolved, we updated the transaction price to include this consideration, and accordingly, we recognized the $6.0 million as licensing revenue during the second quarter of 2019. As part of our evaluation of the constraint as of September 30, 2019, we considered numerous factors, including that regulatory approvals are not within our control and accordingly the remaining milestones are fully constrained and excluded from the arrangement consideration until such regulatory approvals are received. We will continue to re-evaluate the transaction price, including estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur. Any consideration related to sales-based royalties will be recognized when the related sales occur.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2019

Accounting Policies [Abstract]

Summary of Balances and Activity in Each of Product Revenue Allowance and Reserve Categories

Given that we began to sell WAYLIVRA in September 2019, a majority of the product revenue during the three and nine months ended September 30, 2019 relates to TEGSEDI. The following table summarizes balances and activity in each of the product revenue allowance and reserve categories for the nine months ended September 30, 2019 (in thousands

	Chargebacks, discounts and fees			Government and other rebates			Returns		Total
Balance at December 31, 2018	$	50		$	293		$	5	$	348
Provision related to current period sales		824			1,648			254		2,726
Adjustment related to prior period sales		(4	)		(28	)		—		(32	)
Credits or payments made during the period		(601	)		(954	)		—		(1,555	)
Balance at September 30, 2019	$	269		$	959		$	259	$	1,487

Summary of Impact of Adoption of Topic 842

The impact of the adoption of Topic 842 on the accompanying condensed consolidated balance sheet as of January 1, 2019 was as follows (in thousands):

	December 31, 2018		Adjustment due to adoption of Topic 842		January 1, 2019
Operating lease right-of-use assets		—		11,932		11,932
Other current liabilities		968		1,029		1,997
Long-term portion of lease liabilities		4,442		10,915		15,357

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Intangible Assets, Net (Tables)

9 Months Ended

Sep. 30, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets, Net

The following table presents intangible assets (in thousands):

	September 30,			December 31,			Estimated
	2019			2018			useful life
Acquired and in-licensed rights	$	2,262		$	2,262		7 - 21 Years
Capitalized regulatory approval milestones		90,000			90,000		16 Years
Less accumulated amortization		(7,733	)		(3,348	)
Total intangible assets, net	$	84,529		$	88,914

Schedule of Estimated Future Amortization Expenses for Intangible Assets

Estimated future amortization expense for intangible assets as of September 30, 2019 is as follows (in thousands):

	Total
2019	$	1,478
2020		5,879
2021		5,861
2022		5,856
2023		5,843
Thereafter		59,612
	$	84,529

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2019	Dec. 31, 2018
Stockholders’ equity:
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	125,000,000	125,000,000
Common stock, shares issued (in shares)	93,885,414	89,345,978
Common stock, shares outstanding (in shares)	93,885,414	89,345,978

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Operating activities:
Net loss	$ (41,634)	$ (155,264)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation	594	109
Amortization of right-of-use operating lease assets	735
Amortization of intangibles	4,385	815
Amortization of discount/premium on investment securities, net	(470)	197
Non-cash sublicensing expense	75,000
Stock-based compensation expense	29,459	31,239
Changes in operating assets and liabilities:
Accounts receivable	(6,056)	4,777
Other current and long-term assets	(256)	(7,104)
Inventory	(4,369)
Accounts payable	(5,114)	300
Receivable/payable to Ionis Pharmaceuticals, Inc.	(19,548)	9,198
Accrued compensation	799	4,765
Accrued liabilities	(558)	13,237
Income taxes payable	72	(553)
Deferred revenue	(17,948)	(35,882)
Net cash provided by (used in) operating activities	15,091	(134,166)
Investing activities:
Purchases of short-term investments	(111,750)	(105,091)
Proceeds from maturity of short-term investments	155,299	138,580
Purchases of property, plant and equipment	(1,418)	(116)
Net cash provided by investing activities	42,131	33,373
Financing activities:
Proceeds from exercise of common stock options and employee stock purchase plan issuances	9,185	5,141
Distribution to Ionis	(13,492)	(7,792)
Proceeds from issuance of common stock to Ionis in TTR transaction		163,648
Payments of tax withholdings related to exercise of employee stock awards	(10,015)
Net cash (used in) provided by financing activities	(14,322)	160,997
Effect of exchange rates on cash	(25)	19
Net increase in cash and cash equivalents	42,875	60,223
Cash, cash equivalents and restricted cash at beginning of period	88,838	58,367
Cash, cash equivalents and restricted cash at end of period	131,713	118,590
Supplemental disclosures of non-cash operating and financing activities:
Right-of-use assets obtained in exchange for lease liabilities	363
Purchases of property, plant and equipment included in accounts payable and accrued liabilities		1,752
Purchases of property, plant and equipment included in long-term portion of deferred rent liability		3,596
Acquisition of research and development licenses and milestone payments		40,563
Cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets:
Cash and cash equivalents	129,329	116,206
Restricted cash included in deposits and other assets	2,384	2,384
Cash, cash equivalents and restricted cash at end of period	$ 131,713	118,590
Ionis [Member]
Supplemental disclosures of non-cash operating and financing activities:
Purchases of property, plant and equipment included in accounts payable and accrued liabilities		$ 325

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License Agreements and Services Agreement with Ionis - Summary of Loss Share Related to Commercial Activities Under TTR Agreement (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2019
Related Party Transaction [Line Items]
Net losses incurred by the collaboration related to the commercial activities under the TTR Agreement	$ (14,814)	$ (49,021)
Akcea [Member]
Related Party Transaction [Line Items]
Akcea's share of commercial losses under the TTR Agreement reflected in our condensed consolidated statements of operations	(5,925)	(19,611)
Ionis [Member]
Related Party Transaction [Line Items]
Net loss share from commercial activities under arrangement with Ionis Pharmaceuticals, Inc.	$ (8,889)	$ (29,410)

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Intangible Assets, Net - Schedule of Estimated Future Amortization Expenses for Intangible Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
2019	$ 1,478
2020	5,879
2021	5,861
2022	5,856
2023	5,843
Thereafter	59,612
Total intangible assets, net	$ 84,529	$ 88,914

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Equity and Stock-Based Compensation - Stock-based Valuation Information (Details)	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Employee Stock Option [Member]
Weighted-Average Assumptions [Abstract]
Risk-free interest rate	2.30%	2.70%
Dividend yield	0.00%	0.00%
Volatility	75.60%	77.10%
Expected life	6 years 1 month 6 days	6 years 1 month 6 days
Board of Director Stock Options [Member]
Weighted-Average Assumptions [Abstract]
Risk-free interest rate	1.80%	2.90%
Dividend yield	0.00%	0.00%
Volatility	73.80%	78.20%
Expected life	6 years 3 months 18 days	6 years 4 months 24 days
2017 ESPP
Weighted-Average Assumptions [Abstract]
Risk-free interest rate	2.40%	1.90%
Dividend yield	0.00%	0.00%
Volatility	60.00%	64.20%
Expected life	6 months	6 months

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Contractual Obligations and Commitments - Summary of Other Information related to Operating Leases (Details) $ in Thousands	Sep. 30, 2019 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Operating lease right-of-use assets	$ 11,300
Operating lease liabilities	$ 15,850	[1]
Weighted average remaining lease term	9 years
Weighted average discount rate	8.00%

[1] Current portion of $1.3 million included in other current liabilities and the difference of $14.6 million included in long-term portion of lease liabilities on our condensed consolidated balance sheet.

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Basic and Diluted Net Loss Per Share

9 Months Ended

Sep. 30, 2019

Earnings Per Share [Abstract]

Basic and Diluted Net Loss Per Share

11. Basic and Diluted Net Loss Per Share

In connection with the TTR License Agreement completed on April 17, 2018 with Ionis, we made distributions to Ionis representing the consideration to be paid in cash provided to Ionis in excess of the carrying value of the related assets acquired. These distributions are treated as dividends to Ionis; therefore, we have applied the two-class method of loss per share to reflect the allocation of these distributions to the participating Ionis common shares.

The two-class method is an earnings allocation formula that determines loss per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. For the purposes of calculating loss per share under the two-class method, we have allocated the net loss between common stock owned by Ionis and common stock owned by others.

Basic loss per share for each class of stock is computed by dividing total distributable losses applicable to common stock owned by Ionis and common stock owned by others by the weighted-average of common shares outstanding during the requisite period.

The following table summarizes the distributable losses for the three and nine months ended September 30, 2019 and 2018 (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Net loss	$	(31,498	)	$	(63,591	)	$	(41,634	)	$	(155,264	)
Distributions to Ionis		—			—			(13,492	)		(7,792	)
Distributable losses	$	(31,498	)	$	(63,591	)	$	(55,126	)	$	(163,056	)

The following table summarizes the reconciliation of weighted-average shares outstanding used in the calculation of basic loss per share for the three and nine months ended September 30, 2019 and 2018:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2019		2018		2019		2018
Determination of shares:
Weighted-average common shares outstanding    owned by Ionis		70,221,338		65,538,467		69,680,886		57,346,539
Weighted-average common shares outstanding    owned by others		22,821,555		21,671,415		22,509,819		21,446,813
Total weighted-average shares outstanding		93,042,893		87,209,882		92,190,705		78,793,352

The following table summarizes the calculation of basic loss per share for the three and nine months ended September 30, 2019 and 2018 (in thousands, except per share and share amounts):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Losses allocated to Ionis	$	(23,772	)	$	(47,789	)	$	(41,666	)	$	(118,674	)
Plus: Distribution to Ionis		—			—			13,492			7,792
Losses available to Ionis	$	(23,772	)	$	(47,789	)	$	(28,174	)	$	(110,882	)
Weighted-average common shares outstanding    owned by Ionis		70,221,338			65,538,467			69,680,886			57,346,539
Basic loss per common share owned by Ionis	$	(0.34	)	$	(0.73	)	$	(0.40	)	$	(1.93	)
Losses allocated to common shares owned by    others	$	(7,726	)	$	(15,802	)	$	(13,460	)	$	(44,382	)
Weighted-average common shares outstanding    owned by others		22,821,555			21,671,415			22,509,819			21,446,813
Basic loss per common share owned by others	$	(0.34	)	$	(0.73	)	$	(0.60	)	$	(2.07	)

For the three and nine months ended September 30, 2019 and September 30, 2018, we incurred a net loss; therefore, we did not include dilutive common equivalent shares in the computation of diluted net loss per share because the effect would have been anti-dilutive. Common stock from the following would have had an anti-dilutive effect on net loss per share:

• Options to purchase common stock;

• Unvested restricted stock units; and

• Employee Stock Purchase Plan.

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Investments and Fair Value Measurements

9 Months Ended

Sep. 30, 2019

Investments And Fair Value Measurements [Abstract]

Investments And Fair Value Measurements

3. Investments and Fair Value Measurements

Investments

As of September 30, 2019 and December 31, 2018, we primarily invested our excess cash in money market funds and debt instruments of the U.S. Treasury, financial institutions, corporations and U.S. government agencies with strong credit ratings and an investment grade rating at or above A-1, P-1 or F-1 by Moody’s, S&P or Fitch, respectively. We have established guidelines relative to diversification and maturities that maintain safety and liquidity. We periodically review and modify these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity.

The following is a summary of our investments at September 30, 2019 and December 31, 2018 (in thousands):

			Gross Unrealized					Estimated
September 30, 2019	Cost		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	67,249	$	31	$	(2	)	$	67,278
Debt securities issued by U.S. government agencies		49,466		56		(3	)		49,519
Total securities with a maturity of one year or less	$	116,715	$	87	$	(5	)	$	116,797
Corporate debt securities		6,555		10		—			6,565
Total securities with a maturity of one to two years		6,555		10		—			6,565
Total available-for-sale securities	$	123,270	$	97	$	(5	)	$	123,362

			Gross Unrealized					Estimated
December 31, 2018	Cost		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	81,770	$	—	$	(151	)	$	81,619
Debt securities issued by U.S. government agencies		85,578		—		(42	)		85,536
Total securities with a maturity of one year or less	$	167,348	$	—	$	(193	)	$	167,155

We recorded unrealized gains (losses) related to the securities listed above as of September 30, 2019 and December 31, 2018. We believe that the decline in value of certain of these securities is temporary and primarily related to the change in market interest rates since purchase. We believe it is more likely than not that we will be able to hold these securities to maturity. Therefore, we anticipate a full recovery of the amortized cost basis of these securities at maturity.

All of our available-for-sale securities are available to us for use in our current operations. As a result, we categorized all of these securities as current assets even though the stated maturity of some individual securities may be one year or more beyond the balance sheet date.

Fair Value Measurements

The following tables present the investments we held at September 30, 2019 and December 31, 2018 that are regularly measured and carried at fair value. The table segregates each security by the level within the fair value hierarchy of valuation techniques we utilized to determine the respective security’s fair value (in thousands):

	At September 30, 2019		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Money market funds (1)	$	124,972	$	124,972	$	—
Corporate debt securities (3)		73,843		—		73,843
Debt securities issued by U.S. government agencies (3)		49,519		—		49,519
Total	$	248,334	$	124,972	$	123,362

	At December 31, 2018		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Money market funds (1)	$	82,343	$	82,343	$	—
Corporate debt securities (2)		81,619		—		81,619
Debt securities issued by U.S. government agencies (3)		85,536		—		85,536
Total	$	249,498	$	82,343	$	167,155

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

(2) At December 31, 2018, $1.0 million was included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet.

(3) Included in short-term investments on our condensed consolidated balance sheets.

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Strategic Collaboration with Novartis

9 Months Ended

Sep. 30, 2019

Strategic Collaboration With Novartis [Abstract]

Strategic Collaboration with Novartis

7. Strategic Collaboration with Novartis

Background

In January 2017, we initiated a strategic collaboration with Novartis for the development and commercialization of AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx. Under the terms of the Novartis collaboration, we agreed to complete a Phase 2 program, conduct an end-of-Phase 2 meeting with the FDA, and provide initial quantities of the active pharmaceutical ingredient, or API, for each drug. Novartis was granted the exclusive option to further develop and commercialize each drug and would be responsible for all further global development, regulatory and commercialization activities and costs for each such drug.

AKCEA-APO(a)-L_Rx

In December 2018, we conducted an end-of-Phase 2 meeting with the FDA. In February 2019, Novartis exercised its exclusive option to further develop and commercialize AKCEA-APO(a)-L_Rx. The accounting treatment for this option exercise is discussed in further detail below.

AKCEA-APOCIII-L_Rx

We are responsible for completing a Phase 2 program, conducting an end-of-Phase 2 meeting with the FDA and providing initial quantities of API for AKCEA-APOCIII-L_Rx. Novartis has an exclusive option to further develop and commercialize this drug. If Novartis exercises its option for this drug, Novartis will be responsible for all further global development, regulatory and co-commercialization activities and costs for this drug.

Accounting Analysis

We received a $75.0 million upfront payment in the first quarter of 2017, of which we retained $60.0 million and paid Ionis $15.0 million as a sublicense fee under our Cardiometabolic License Agreement with Ionis.

At commencement of our strategic collaboration, we identified the following four distinct performance obligations:

• Development activities for AKCEA-APO(a)-L_Rx;

• Development activities for AKCEA-APOCIII-L_Rx;

• API for AKCEA-APO(a)-L_Rx; and

• API for AKCEA-APOCIII-L_Rx.

The development activities and the supply of API are distinct because Novartis or another third party could provide these items without our assistance.

We determined the transaction price for the Novartis collaboration was $108.4 million, comprised of the following:

• $75.0 million from the upfront payment we received;

• $28.4 million for the premium paid by Novartis, which represents the excess of the fair value Ionis received from Novartis' purchase of Ionis' stock at a premium in the first quarter of 2017; and

• $5.0 million for the premium Novartis would have paid to purchase Ionis' stock if we did not complete our IPO within 15 months of the inception of the agreement.

We are recognizing revenue on the $75.0 million upfront payment plus the premium paid by Novartis from its purchase of Ionis’ stock and the premium associated with Novartis’ obligation to purchase Ionis’ stock if we did not complete our IPO because we are the party providing the services and API under the collaboration agreement with Novartis.

None of the options or development or regulatory milestone payments under this agreement were included in the upfront transaction price determined in January 2017 as all payments were fully constrained at that time. As part of our evaluation of the constraint, we considered numerous factors, including the fact that achievement of the milestones is outside of our control and contingent upon the success of our clinical trials, Novartis’ efforts, and the receipt of regulatory approval. We re-evaluate the transaction price, including estimated variable consideration included in the transaction price and all constrained amounts, in each reporting period and as uncertain events are resolved or other changes in circumstances occur.

Based on the distinct performance obligations under the Novartis collaboration, we allocated the $108.4 million transaction price based on relative stand-alone selling prices of each of our performance obligations as follows:

• $64.0 million for development services for AKCEA-APO(a)-L_Rx;

• $40.1 million for development services for AKCEA-APOCIII-L_Rx;

• $1.5 million for the delivery of AKCEA-APO(a)-L_Rx API; and

• $2.8 million for the delivery of AKCEA-APOCIII-L_Rx API.

We are recognizing revenue related to each of our performance obligations as follows:

• We completed the development services performance obligation for AKCEA-APO(a)-L_Rx as of June 30, 2019. As such, all revenue allocated to the AKCEA-APO(a)-L_Rx development services revenue stream was fully recognized as of the end of the second quarter of 2019;

• We are satisfying the development services performance obligation for AKCEA-APOCIII-L_Rx as the research and development services are performed. We expect research and development services to be completed by mid-2020. We recognize revenue related to research and development services performed using an input method by calculating costs incurred at each period end relative to total costs expected to be incurred;

• We recognized the amount attributed to the AKCEA-APO(a)-L_Rx API supply when we delivered API to Novartis in 2017; and

• We recognized the amount attributed to the AKCEA-APOCIII-L_Rx API supply when we delivered API to Novartis in May 2018.

Additionally, we and Ionis entered into a stock purchase agreement, or SPA, with Novartis. Under the SPA, in July 2017, Novartis purchased $50.0 million of our common stock in a separate private placement concurrent with the completion of our IPO at a price per share equal to the IPO price.

On February 22, 2019, Novartis exercised its option to license AKCEA-APO(a)-L_Rx. We identified a separate performance obligation upon Novartis’ license of AKCEA-APO(a)-L_Rx because the license is distinct from our other performance obligations. Accordingly, we recognized a license fee of $150.0 million in the first quarter of 2019 because Novartis had full use of the license without any continuing involvement from us. Additionally, we did not have any further performance obligations related to the license after Novartis exercised its option to license AKCEA-APO(a)-L_Rx. Novartis is responsible for conducting and funding all future development, regulatory and commercialization activities for AKCEA-APO(a)-L_Rx. In the first quarter of 2019, we issued 2,837,373 shares of our common stock to Ionis as payment of the $75.0 million sublicense fee due to Ionis related to the option exercised by Novartis. For AKCEA-APO(a)-L_Rx, we are also eligible to receive up to $675.0 million in milestone payments, including $25.0 million for the achievement of a development milestone, up to $290.0 million for the achievement of regulatory milestones and up to $360.0 million for the achievement of commercialization milestones. In connection with Novartis’ exercise of its option to exclusively license AKCEA-APO(a)-L_Rx, Akcea and Novartis established a more definitive co-commercialization framework under which we would negotiate the co-commercialization of AKCEA-APO(a)-L_Rx between us and Novartis in selected markets. Included in this framework is an option by which Novartis could solely commercialize AKCEA-APO(a)-L_Rx in exchange for Novartis paying us increased commercial milestone payments based on sales of AKCEA-APO(a)-L_Rx.

In the third quarter of 2019, we delivered additional AKCEA-APO(a)-L_Rx API to Novartis. We identified a separate performance obligation upon the delivery of the API because the delivery is distinct from other performance obligations. Accordingly, we recognized $5.5 million of research and development revenue in the third quarter of 2019 upon receipt of the API supply by Novartis. Novartis has the option to purchase additional API of AKCEA-APO(a)-L_Rx in the future at agreed upon terms and conditions pursuant to the strategic collaboration agreement.

If Novartis exercises its option for AKCEA-APOCIII-L_Rx, Novartis will pay us a license fee equal to $150.0 million and we will owe half of this amount, or $75.0 million, to Ionis as a sublicense fee. If Novartis exercises its option to license AKCEA-APOCIII-L_Rx, we are eligible to receive up to $530.0 million in milestone payments, including $25.0 million for the achievement of a development milestone, up to $240.0 million for the achievement of regulatory milestones and up to $265.0 million for the achievement of commercialization milestones. If Novartis licenses AKCEA-APOCIII-L_Rx, we may co-commercialize AKCEA-APOCIII-L_Rx through our specialized sales force in selected markets, under terms and conditions that we plan to negotiate with Novartis in the future.

We will earn the next milestone payment of $25.0 million under this collaboration if Novartis reaches a specific level of enrollment related to the Phase 3 study for either drug. We are also eligible to receive tiered royalties in the mid-teens to low twenty percent range on net sales of AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx. Novartis will reduce these royalties upon the expiration of certain patents or if a generic competitor negatively impacts the product in a specific country. We pay 50% of license fees, milestone payments and royalties under this agreement to Ionis as a sublicense fee.

During the three and nine months ended September 30, 2019, we earned revenue of $8.5 million and $176.3 million, respectively, from our strategic collaboration with Novartis, representing 100% of our research and development and license revenue. In comparison, we earned revenue of $7.2 million and $42.7 million for the same periods in 2018. During the three and nine months ended September 30, 2019, we recognized $2.3 million and $18.0 million of revenue, respectively, from amounts that were in our beginning deferred revenue balance. In comparison, we recognized $6.8 million and $36.5 million for the same periods in 2018, respectively. Our condensed consolidated balance sheet at September 30, 2019 and December 31, 2018 includes deferred revenue of $10.8 million and $28.8 million, respectively, related to our strategic collaboration with Novartis.

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Investments and Fair Value Measurements - Fair Value Measurements (Details) - USD ($) $ in Thousands		Sep. 30, 2019	Dec. 31, 2018
Fair Value Measurements [Abstract]
Available-for-sale securities		$ 123,362
Recurring Basis [Member]
Fair Value Measurements [Abstract]
Money market funds	[1]	124,972	$ 82,343
Total		248,334	249,498
Recurring Basis [Member] | Corporate Debt Securities [Member]
Fair Value Measurements [Abstract]
Available-for-sale securities		73,843	81,619	[2]
Recurring Basis [Member] | Corporate Debt Securities [Member] | Cash and Cash Equivalents [Member]
Fair Value Measurements [Abstract]
Available-for-sale securities			1,000
Recurring Basis [Member] | Debt Securities Issued by U.S. Government Agencies [Member]
Fair Value Measurements [Abstract]
Available-for-sale securities	[3]	49,519	85,536
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Fair Value Measurements [Abstract]
Money market funds	[1]	124,972	82,343
Total		124,972	82,343
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value Measurements [Abstract]
Total		123,362	167,155
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate Debt Securities [Member]
Fair Value Measurements [Abstract]
Available-for-sale securities		73,843	81,619	[2]
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Debt Securities Issued by U.S. Government Agencies [Member]
Fair Value Measurements [Abstract]
Available-for-sale securities	[3]	$ 49,519	$ 85,536

[1] Included in cash and cash equivalents on our condensed consolidated balance sheets

[2] At December 31, 2018, $1.0 million was included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet

[3] Included in short-term investments on our condensed consolidated balance sheets

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Summary of Significant Accounting Policies - Product Revenue, Net (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Disaggregation of Revenue [Abstract]
Revenue, net	$ 20,624	$ 19,241	$ 211,064	$ 54,670
Product [Member]
Disaggregation of Revenue [Abstract]
Revenue, net	$ 11,944		$ 28,563
Maximum [Member]
Summary Of Significant Accounting Policies [Line Items]
Period of time after billing when payment is received			1 year
Payment terms			90 days
Minimum [Member]
Summary Of Significant Accounting Policies [Line Items]
Payment terms			30 days

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Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Stock-Based Compensation [Abstract]
Stock-based compensation expense	$ (3,464)	$ 12,730	$ 29,459	$ 31,239
Cost of Sales - Product [Member]
Stock-Based Compensation [Abstract]
Stock-based compensation expense	127		382
Research and Development Expenses [Member]
Stock-Based Compensation [Abstract]
Stock-based compensation expense	2,814	2,313	9,298	6,868
Selling, General and Administrative Expenses [Member]
Stock-Based Compensation [Abstract]
Stock-based compensation expense	$ (6,405)	$ 10,417	$ 19,779	$ 24,371

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Contractual Obligations and Commitments - Summary of Other Information related to Operating Leases (Parenthetical) (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Commitments And Contingencies Disclosure [Abstract]
Current portion of operating lease liabilities	$ 1,300
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesCurrent
Long-term portion of lease liabilities	$ 14,558	$ 4,442

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Property Plant and Equipment

9 Months Ended

Sep. 30, 2019

Property Plant And Equipment [Abstract]

Property, Plant and Equipment

4. Property, Plant and Equipment

The following table presents property and equipment, at cost, and related accumulated depreciation (in thousands):

	September 30,			December 31,
	2019			2018
Furniture and fixtures	$	1,611		$	1,611
Computer equipment and software		140			102
Manufacturing equipment		386			—
Leasehold improvements		3,955			4,213
Total property and equipment, at cost		6,092			5,926
Less accumulated depreciation and amortization		(815	)		(230	)
Total property and equipment, net	$	5,277		$	5,696

Total depreciation expense amounted to $0.2 million and $0.6 million for the three and nine months ended September 30, 2019, respectively. Total depreciation expense was nominal for each of the three and nine months ended September 30, 2018. As part of the operating lease for our corporate headquarters, the landlord provided a tenant improvement allowance of $3.6 million, which we utilized to construct leasehold improvements.

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License Agreements and Services Agreement with Ionis

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

License Agreements and Services Agreement with Ionis

8. License Agreements and Services Agreement with Ionis

In December 2015, we entered into a development, commercialization and license agreement related to our cardiometabolic franchise and a services agreement with Ionis. In March 2018, we entered into a new development, commercialization, collaboration and license agreement related to our TTR franchise and amended the services agreement previously in place with Ionis. The following sections summarize these related party agreements with Ionis.

Cardiometabolic Development, Commercialization and License Agreement

Our development, commercialization and license agreement, or Cardiometabolic License Agreement, with Ionis granted exclusive rights to us to develop and commercialize WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-APOCIII-L_Rx, and AKCEA-ANGPTL3-L_Rx, which are collectively referred to as the Lipid Drugs. Ionis has granted us an exclusive license to certain patents to develop and commercialize products containing the Lipid Drugs. Ionis also granted us a non-exclusive license to the Ionis antisense platform technology for us to develop and commercialize products containing the Lipid Drugs. Ionis also granted us non-exclusive rights under its manufacturing technology to manufacture the Lipid Drugs in our own facility or at a contract manufacturer. As a part of this agreement, we and Ionis agreed not to work with any other parties to develop or commercialize other RNA-targeting drugs that are designed to inhibit any of the Lipid Drug targets so long as we are developing or commercializing the Lipid Drugs.

We and Ionis share development responsibilities for the Lipid Drugs, other than drugs licensed to Novartis and to Pfizer Inc., or Pfizer. We pay Ionis for the research and development expenses it incurs on our behalf, which include both external and internal expenses. External research and development expenses include costs for contract research organizations, or CROs, costs to conduct nonclinical and clinical studies on our drugs, costs to acquire and evaluate clinical study data, such as investigator grants, patient screening fees and laboratory work, and fees paid to consultants. Internal research and development expenses include costs for the work that Ionis' research and development employees perform for us. Ionis charges us a full-time equivalent rate that covers personnel-related expenses, including salaries and benefits, plus an allocation of facility-related expenses, including rent, utilities, insurance and property taxes, for those development employees who work either directly or indirectly on the development of our drugs. We also pay Ionis for the API and drug product we use in our nonclinical and clinical studies for all of our drugs. Ionis manufactures the API for us and charges us a price per gram consistent with the price Ionis charges its pharmaceutical partners, which includes the cost for direct materials, direct labor and overhead required to manufacture the API. If we need the API filled in vials or prefilled syringes for our clinical studies and Ionis contracts with a third party to perform this work, Ionis will charge us for the resulting cost.

As we commercialize each of the Lipid Drugs, other than drugs licensed to Novartis and to Pfizer, we will pay Ionis royalties from the mid-teens to the mid-twenty percent range on sales related to the Lipid Drugs that we sell. If we sell a Lipid Drug for a Rare Disease Indication (defined in the agreement as less than 500,000 patients worldwide or an indication that required a Phase 3 program of less than 1,000 patients and less than two years of treatment), we will pay a higher royalty rate to Ionis than if we sell a Lipid Drug for a Broad Disease Patient Population (defined in the agreement as more than 500,000 patients worldwide or an indication that required a Phase 3 program of 1,000 or more patients and two or more years of treatment). Other than with respect to the drugs licensed to Novartis under the collaboration agreement with Novartis and AKCEA-ANGPTL3-L_Rx which is licensed to Pfizer under the license agreement with Pfizer, if our annual sales reach $500.0 million, $1.0 billion and $2.0 billion, we will be obligated to pay Ionis sales milestones in the amount of $50.0 million for each sales milestone reached by each Lipid Drug. If and when triggered, we will pay Ionis each of these sales milestones over the subsequent 12 quarters in equal payments. We share 50% of payments we receive from Novartis and Pfizer with Ionis.

We may terminate this agreement if Ionis is in material breach of the agreement. Ionis may terminate this agreement if we are in material breach of the agreement. In each circumstance the party that is in breach will have an opportunity to cure the breach prior to the other party terminating this agreement.

In the first quarter of 2017, we entered into letter agreements with Ionis to reflect the agreed upon payment terms with respect to the upfront option payment that we received from Novartis and to allocate the premium that Novartis paid for Ionis' common stock in connection with our strategic collaboration with Novartis. In the fourth quarter of 2019, we entered into a letter agreement with Ionis to reflect the agreed upon payment terms with respect to the upfront license fee we will receive from Pfizer in connection with our license agreement with Pfizer. For additional detail regarding our strategic collaboration with Novartis, see Note 7, Strategic Collaboration with Novartis. For additional detail regarding our license agreement with Pfizer, see Note 13, Subsequent Events.

TTR Development, Commercialization, Collaboration and License Agreement

On April 17, 2018, our stockholders, other than Ionis and its affiliates, approved the development, commercialization, collaboration and license agreement, or TTR License Agreement, and a stock purchase agreement, or Ionis SPA, with Ionis, which was entered into on March 14, 2018. In addition, in connection with these agreements, we entered into an amended and restated services agreement, or Amended Services Agreement, and an amended and restated investor rights agreement, or Amended Investor Rights Agreement, with Ionis.

We determined that the TTR License Agreement and Ionis SPA included provisions which required the approval of the agreements by our stockholders other than Ionis and its affiliates, which we deemed was not perfunctory in nature, therefore, we concluded that the approved date of the agreements for accounting purposes was April 17, 2018, the date on which such approval was received and the closing of the agreements took place.

In accordance with the terms and provisions of the TTR License Agreement, we received rights to:

• commercialize TEGSEDI following receipt of regulatory approval and perform certain other non-commercial activities with respect to TEGSEDI, in each case, in accordance with a global strategic plan;

• partner on the completion of all pivotal studies of a follow-on drug to TEGSEDI, AKCEA-TTR-L_Rx, and perform other non-commercial activities with respect to AKCEA-TTR-L_Rx;

• commercialize AKCEA-TTR-L_Rx following receipt of regulatory approval in accordance with a global strategic plan;

• share in profits and losses with respect to TEGSEDI and AKCEA-TTR-L_Rx;

• manufacture (including through a third party) each product following receipt of regulatory approval for such product; and

• sublicense the development and commercialization of either product to third parties or affiliates, with the consent of Ionis.

As consideration for the grant of rights under the TTR License Agreement, we paid an upfront licensing fee of $150.0million, which was paid through the issuance of 8 million shares of our common stock priced by reference to a trading average at the time of execution of the agreements. In addition, we are obligated to make milestone payments to Ionis in connection with the achievement of certain development, regulatory and commercialization events. These milestone payments include up to $110.0 million, if all TEGSEDI regulatory approval milestones are met; up to $145.0 million, if all AKCEA-TTR-L_Rx regulatory milestones are met; and a total of $1.3 billion, in the form of seven milestone payments, if all sales milestones for the combined products are met. We can elect to pay each milestone payment in cash or shares of our common stock and Ionis may require payment in shares of common stock up until the achievement of the milestone event for aggregate worldwide annual net sales of $750.0 million for the products. Subsequent to the achievement of the milestone event for aggregate worldwide annual net sales of $750.0 million, all subsequent milestone payments must be paid in cash.

The TTR License Agreement will remain in effect until the expiration of all included payment obligations, unless earlier terminated. The TTR License Agreement can be terminated by mutual consent of us and Ionis, by either us or Ionis upon certain events, by either party upon material breach, or by Akcea for convenience upon providing 90 days written notice to Ionis. Upon termination, all rights received under the TTR License Agreement will terminate.

To support the commercialization of TEGSEDI and AKCEA-TTR-L_Rx, Ionis purchased 10.7 million shares of our common stock for $200 million.

In connection with the TTR licensing transaction, we amended our Certificate of Incorporation to increase our authorized shares of common stock from 100,000,000 shares to 125,000,000 shares.

We determined that the upfront accounting for the TTR License Agreement should follow the accounting guidance for common control transactions given the nature of the relationship between us and Ionis, including the fact that Ionis maintains a controlling ownership position in us.

In addition, we assessed the identifiable assets that were acquired under the terms of the TTR License Agreement, including the licensed rights to TEGSEDI and AKCEA-TTR-L_Rx, certain batches of TEGSEDI materials, the transfer of a minimal number of employees from Ionis to us and certain manufacturing and clinical research agreements. We concluded that the licensed rights represented a group of similar identifiable assets and that substantially all of the fair value of the acquisition resides in the licensed rights. As such, we concluded that the acquired assets did not meet the definition of a business and that we should account for the TTR License Agreement as an asset acquisition under common control guidance. Accordingly, we recorded the carrying value of the licensed rights held by Ionis of $0.6 million as an intangible asset at the date of acquisition and we are amortizing the amount over the remaining patent life.  

In connection with the transaction, we also purchased $4.7 million of commercial TEGSEDI inventory held by Ionis. In addition, in the first quarter of 2019 we purchased $13.5 million of clinical TEGSEDI material held by Ionis. Prospectively we are responsible for the procurement of all additional inventory. The inventory and clinical material did not have a carrying value on the books of Ionis at the time of purchase. As such, in accordance with the accounting guidance for common control transactions above, we recorded the purchase of this inventory and clinical material as a reduction of additional paid in capital. This amount represented a cash distribution to Ionis; therefore, we have included this distribution as a distribution to Ionis for purposes of loss per share and we have applied the two–class method as discussed in Note 11, Basic and Diluted Net Loss Per Share.

We also determined that the TTR License Agreement represented a collaboration arrangement as defined by ASC 808. Prior to April 1, 2018, Ionis was responsible for all costs associated with TEGSEDI and for the period from April 1, 2018 to December 31, 2018, we were responsible for all costs associated with TEGSEDI. We and Ionis share all costs associated with AKCEA-TTR-L_Rx from January 1, 2018 forward on a 50/50 basis. We recorded $3.1 million paid to Ionis for costs related to the period prior to the closing of the TTR License Agreement to equity, as these amounts were previously expensed in the financial statements of Ionis. This amount also represents a cash distribution to Ionis and was included as an adjustment to the net loss attributable to Ionis for purposes of applying the two-class method for loss per share as discussed in Note 11, Basic and Diluted Net Loss Per Share.

On July 11, 2018, we received marketing authorization, or MA, approval for TEGSEDI from the European Commission, or EC, for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hereditary transthyretin amyloidosis, or hATTR amyloidosis, in the E.U. As a result of the MA approval in the E.U., on August 3, 2018 we issued 1,597,571 shares of our common stock to Ionis as payment of the $40.0 million regulatory approval milestone for TEGSEDI. We capitalized this regulatory approval milestone payment as a licensed intangible asset on our condensed consolidated balance sheet as the amount is expected to be recoverable through future cash flows.

On October 5, 2018, we received regulatory approval for TEGSEDI from the FDA for the treatment of polyneuropathy of hereditary transthyretin-mediated amyloidosis in adults in the U.S. As a result of the regulatory approval in the U.S., on October 17, 2018 we issued 1,671,849 shares of our common stock to Ionis as payment of the $50.0 million regulatory approval milestone for TEGSEDI. We capitalized this regulatory approval milestone payment as a licensed intangible asset on our condensed consolidated balance sheet as the amount is expected to be recoverable through future cash flows.

Both milestone payments are being amortized to cost of sales on a straight-line basis over the licensed assets’ expected useful life of approximately 16 years from the date of the initial regulatory approval milestone achievement. Amortization expense for the TTR milestone payments was $1.4 million and $4.3 million, respectively, for the three and nine months ended September 30, 2019.  In comparison, we recognized $0.7 million for each of the same periods in 2018.

Profit/(Loss) Share

Under the TTR License Agreement, we and Ionis agreed to share TEGSEDI and AKCEA-TTR-L_Rx profits and losses as follows: for TEGSEDI, beginning on the earlier of (i) the first day of the quarter after receipt of regulatory approval of TEGSEDI in the United States, or (ii) January 1, 2019, the parties will share profits and losses from the development and commercialization of TEGSEDI (A) on a 60/40 basis (60% to Ionis and 40% to us) through the end of the quarter in which the first commercial sale of AKCEA-TTR-L_Rx occurs, and (B) on a 50/50 basis commencing on the first day of the first quarter thereafter; and for AKCEA-TTR-L_Rx, beginning January 1, 2018, the parties will share all profits and losses from the development and commercialization of AKCEA-TTR-L_Rx on a 50/50 basis.

In the first quarter of 2019, the profit sharing provisions for TEGSEDI under the TTR License Agreement with Ionis became effective. As we are the principal for all commercial activities related to the TTR License Agreement, we record all commercial activities related to TEGSEDI on a gross basis in our condensed consolidated statement of operations, including revenues, cost of sales and sales and marketing expenses. The Ionis share of commercialization costs for TEGSEDI is separately presented within operating expenses in our condensed consolidated statement of operations under the caption “Net loss share from commercial activities under arrangement with Ionis Pharmaceuticals, Inc.” As we are a collaborator with Ionis for the execution of TTR development activities, we record all research and development expenses on a net basis representing our proportionate share of total costs incurred by Ionis and us. Accordingly, only our share of total costs incurred related to development activities under the TTR License Agreement is presented within research and development expense in our condensed consolidated statement of operations.

A summary of the loss share related to the commercial activities under the TTR Agreement is as follows:

	Three Months Ended September 30,			Nine Months Ended September 30,
	2019			2019
Net losses incurred by the collaboration related to the    commercial activities under the TTR Agreement	$	(14,814	)	$	(49,021	)
Ionis' share of commercial losses under the TTR Agreement    reflected in our condensed consolidated statements of    operations		(8,889	)		(29,410	)
Akcea's share of commercial losses under the TTR    Agreement reflected in our condensed consolidated    statements of operations		(5,925	)		(19,611	)

A summary of the development expenses related to the TTR Agreement is as follows:

	Three Months Ended September 30,			Nine Months Ended September 30,
	2019			2019
Total development expense incurred by the collaboration    related to development activities under the TTR Agreement	$	(17,243	)	$	(43,655	)
Akcea's share of TTR development expense reflected in    research and development expense in our condensed    consolidated statements of operations	$	(7,525	)	$	(18,923	)

We did not record any commercial or research and development expense related to the profit/(loss) share under the TTR License Agreement during the three and nine months ended September 30, 2018.

Services Agreement

We originally entered into a services agreement with Ionis in December 2015 in conjunction with the Cardiometabolic License Agreement. We entered into the Amended Services Agreement with Ionis in April 2018 in conjunction with the TTR License Agreement (collectively, the service agreements). The primary purpose of the Amended Services Agreement was to allow for the expansion of general and administrative services provided to us by Ionis to cover the TEGSEDI and AKCEA-TTR-L_Rx products under terms substantially similar to the prior services agreement.

Our services agreement with Ionis is designed to be flexible to adjust for our increasing capabilities in various functions. Under the services agreement, Ionis provides us certain services, including, without limitation, general and administrative support services and development support services. Ionis allocated a certain percentage of personnel to perform the services that it provides to us based on its good faith estimate of the required services. We pay Ionis for these allocated costs, which reflect the Ionis full-time equivalent, or FTE, rate for the applicable personnel, plus out-of-pocket expenses, such as occupancy costs, associated with the FTEs allocated to providing us these services. We do not pay a mark-up or profit on the external or internal expenses Ionis bills to us. Ionis invoices us quarterly for all amounts due under the services agreement and payments are due within 30 days of the receipt of an invoice.

In addition, as long as Ionis continues to consolidate our financials, we will comply with Ionis' policies and procedures and internal controls. As long as we are consolidated into Ionis' financial statements under U.S. GAAP, we may continue to access the following services from Ionis:

• investor relations services,

• human resources and personnel services,

• risk management and insurance services,

• tax related services,

• corporate record keeping services,

• financial and accounting services,

• credit services, and

• COO/CFO/CBO oversight.

However, if we wanted to provide the foregoing services internally, and doing so would not negatively impact Ionis' internal controls and procedures for financial reporting, we can negotiate in good faith with Ionis for a reduced scope of services related to the aforementioned services. When Ionis determines it should no longer consolidate our financials, we may mutually agree with Ionis in writing to extend the term of this arrangement in six-month increments.

We can establish our own benefits programs or continue to use Ionis' benefits, however we must provide Ionis a minimum advance notice to opt-out of using Ionis' benefits. We do not currently plan to establish our own benefits programs at this time or in the near future.

Pursuant to our various agreements with Ionis, as of September 30, 2019, Ionis owed us $0.6 million. As of December 31, 2018, we owed Ionis $18.9 million.

The following table summarizes the amounts recorded related to transactions with Ionis including amounts related to the TTR licensing transaction for the following periods (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Operating expenses:
Services performed by Ionis	$	1,075		$	3,192		$	3,225		$	11,182
Active pharmaceutical ingredient manufactured by    Ionis		5,515			—			5,515			5,229
Pre-commercial inventory manufactured by Ionis		—			—			—			5,996
Sublicensing expenses		—			7,200			78,000			7,200
Out-of-pocket expenses paid by Ionis		954			15,850			3,800			31,074
Less: commercial share of loss in connection with    the TTR license transaction		(8,889	)		—			(29,410	)		—
Less: R&D share of loss in connection with the    TTR license transaction		700			—			1,108			—
Total operating expenses generated by transactions    with Ionis		(645	)		26,242			62,238			60,681
Plus: distribution to Ionis		—			—			13,492			7,792
Total charges generated by transactions with Ionis		(645	)		26,242			75,730			68,473
(Receivable) payable balance (from) to Ionis at the    beginning of the period		(7,911	)		27,137			18,901			14,365
Less: total amounts received from (paid to) Ionis    during the period		7,909			(29,491	)		(20,278	)		(58,017	)
Less: receivable from Ionis		—			—			—			(933	)
Less: non-cash sublicensing expenses		—			—			(75,000	)		—
Total amount (receivable) payable (from) to Ionis    at period end	$	(647	)	$	23,888		$	(647	)	$	23,888

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Contractual Obligations and Commitments

9 Months Ended

Sep. 30, 2019

Commitments And Contingencies Disclosure [Abstract]

Contractual Obligations and Commitments

12. Contractual Obligations and Commitments

Operating Lease

Corporate Headquarters Lease

On April 5, 2018, we entered into an operating lease agreement for 30,175 square feet of office space located in Boston, Massachusetts for our corporate headquarters. The lease commencement date was August 15, 2018 and we took occupancy in September 2018. We are leasing this space under a non-cancelable operating lease with an initial term ending after 123 months and an option to extend the lease for an additional five-year term. We did not include the extension option in our right-of-use asset and lease liability calculation as we do not consider it reasonably certain that we would exercise the option. Under the lease agreement, we received a three-month free rent period, which commenced on August 15, 2018, and a tenant improvement allowance up to $3.8 million. We provided the lessor with a letter of credit to secure our obligations under the lease in the initial amount of $2.4 million, to be reduced to $1.8 million on the third anniversary of the rent commencement date and to $1.2 million on the fifth anniversary of the rent commencement date if we meet certain conditions set forth in the lease at each such time. The letter of credit amount is included in deposits and other assets on the accompanying condensed consolidated balance sheets.

Ionis Sublease

On November 12, 2018, we entered into an operating lease agreement with Ionis to sublease 4,723 square feet of office space located in Carlsbad, California. The lease commenced in March 2018 and the term of the lease is 64 months with a four-month free rent period. There is no extension option for this lease.

Cambridge Lease

We leased office space in a building in Cambridge, Massachusetts under an operating lease that commenced in April 2015 and was subsequently amended and expanded in February 2016 and March 2017. The lease was scheduled to expire in April 2020. We have subsequently terminated the lease effective April 2019.

Ireland Lease

On May 8, 2019, we entered into an operating lease agreement for office space located in Dublin, Ireland. The lease commenced in May 2019 and the initial term of the lease is 18 months with an extension option for an additional 12 months. We have included the 12-month extension period in our right-of-use asset and lease liability calculation as we consider it reasonably certain that we will exercise the option to extend the lease for an additional 12 months.  

Other Operating Lease Information

Other information related to our operating leases is as follows (dollar amounts in thousands):

	At September 30, 2019
Operating lease right-of-use assets	$	11,300
Operating lease liabilities (1)	$	15,850
Weighted average remaining lease term	9.0 years
Weighted average discount rate		8	%

(1) Current portion of $1.3 million included in other current liabilities and the difference of $14.6 million included in long-term portion of lease liabilities on our condensed consolidated balance sheet.

Annual maturities of our operating lease liabilities as of September 30, 2019 are as follows (in thousands):

Years ended December 31,	Operating Leases
Remainder of 2019	$	621
2020		2,497
2021		2,502
2022		2,403
2023		2,400
Thereafter		11,961
Total minimum lease payments	$	22,384
Less:
Imputed interest		(6,534	)
Total operating lease liability	$	15,850

Operating lease expense was $0.5 million and $1.6 million for the three and nine months ended September 30, 2019, respectively.  In comparison, operating lease expense was $0.8 million and $1.7 million for the same periods in 2018. Cash paid for amounts included in the measurement of lease liabilities for the nine months ended September 30, 2019 was $1.9 million and was included in net cash used in operating activities in our condensed consolidated statement of cash flows.

Purchase Commitments

Purchase commitments include agreements to purchase goods or services that are enforceable and legally binding on us and that specify all significant terms, including fixed or minimum quantities to be purchased, fixed, minimum or variable price provisions, and the approximate timing of the transaction. Such obligations are related principally to inventory purchase orders based on our current manufacturing needs and require significant lead times to be fulfilled by our vendors. Purchase commitments exclude agreements that are cancelable without penalty. As of  September 30, 2019 our purchase commitments for the following 12 months were $7.1 million.

Director and Officer Agreements

In connection with the conclusion of their employment with the Company, Ms. Paula Soteropoulos, our former CEO, Mr. Jeffrey M. Goldberg, our former COO, and Ms. Sarah Boyce, our former President, have entered into Separation Agreements with the Company under which they are entitled to certain severance benefits. As of September 30, 2019, the aggregate severance obligation for these individuals for the following 12 months was $1.8 million and was included in accrued compensation in our condensed consolidated balance sheet. In connection with the conclusion of their employment, we have also entered into Consulting Agreements with Ms. Soteropoulos and Mr. Goldberg pursuant to which they will assist in the transition of their duties and responsibilities. Ms. Soteropoulos and Mr. Goldberg are entitled to receive cash compensation and the continued vesting of any equity awards outstanding as of their dates of separation in consideration for their consulting services.

On September 19, 2019, in connection with his appointment as our interim Chief Executive Officer, Damien McDevitt, Ph.D. entered into (i) a written offer letter with us pursuant to which Dr. McDevitt is entitled to receive certain equity and cash compensation, and (ii) a Severance Benefit Agreement with us pursuant to which Dr. McDevitt is entitled to receive certain severance benefits.

On October 15, 2019, in connection with his appointment as our Chief Commercial Officer, Kyle Jenne entered into a written offer letter with us pursuant to which Mr. Jenne is entitled to receive certain equity and cash compensation. Further, on October 21, 2019, the effective date of Mr. Jenne’s appointment, Mr. Jenne entered into a Severance Benefit Agreement with us pursuant to which he is entitled to receive certain severance benefits.

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Investments and Fair Value Measurements - Summary of Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Summary of Investments [Abstract]
Cost	$ 123,270
Gross unrealized gains	97
Gross unrealized losses	(5)
Estimated fair value	123,362
Securities with Maturity of One Year or Less [Member]
Summary of Investments [Abstract]
Cost	116,715	$ 167,348
Gross unrealized gains	87
Gross unrealized losses	(5)	(193)
Estimated fair value	116,797	167,155
Securities with Maturity of More than One Year [Member]
Summary of Investments [Abstract]
Cost	6,555
Gross unrealized gains	10
Estimated fair value	6,565
Corporate Debt Securities [Member] | Securities with Maturity of One Year or Less [Member]
Summary of Investments [Abstract]
Cost	67,249	81,770
Gross unrealized gains	31
Gross unrealized losses	(2)	(151)
Estimated fair value	67,278	81,619
Corporate Debt Securities [Member] | Securities with Maturity of More than One Year [Member]
Summary of Investments [Abstract]
Cost	6,555
Gross unrealized gains	10
Estimated fair value	6,565
Debt Securities Issued by U.S. Government Agencies [Member] | Securities with Maturity of One Year or Less [Member]
Summary of Investments [Abstract]
Cost	49,466	85,578
Gross unrealized gains	56
Gross unrealized losses	(3)	(42)
Estimated fair value	$ 49,519	$ 85,536

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Summary of Significant Accounting Policies - Narratives (Details)	Sep. 30, 2019 RevenueStream
Summary of Significant Accounting Policies [Abstract]
Number of revenue agents	3

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 129,329	$ 86,454
Short-term investments	123,362	166,155
Accounts receivable	10,653	4,597
Receivable from Ionis Pharmaceuticals, Inc.	647
Inventories	8,641	85
Other current assets	5,809	9,944
Total current assets	278,441	267,235
Property, plant and equipment, net	5,277	5,696
Operating lease right-of-use assets	11,300
Intangible assets, net	84,529	88,914
Deposits and other assets	3,620	3,416
Total assets	383,167	365,261
Current liabilities:
Accounts payable	5,711	12,068
Payable to Ionis Pharmaceuticals, Inc.		18,901
Accrued compensation	9,382	8,583
Accrued liabilities	15,211	14,787
Current portion of deferred revenue	10,840	25,354
Other current liabilities	1,977	968
Total current liabilities	43,121	80,661
Long-term portion of lease liabilities	14,558	4,442
Long-term portion of deferred revenue		3,434
Total liabilities	57,679	88,537
Stockholders’ equity:
Common stock, $0.001 par value; 125,000,000 shares authorized at September 30, 2019 and December 31, 2018; 93,885,414 and 89,345,978 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively.	94	89
Additional paid-in capital	889,133	799,001
Accumulated other comprehensive loss	(63)	(324)
Accumulated deficit	(563,676)	(522,042)
Total stockholders’ equity	325,488	276,724
Total liabilities and stockholders’ equity	$ 383,167	$ 365,261

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Ionis [Member] TTR License Agreement [Member]	Ionis [Member] TEGSEDI [Member]	Common Stock [Member]	Common Stock [Member] Ionis [Member] TTR License Agreement [Member]	Common Stock [Member] Ionis [Member] TEGSEDI [Member]	Additional Paid In Capital [Member]	Additional Paid In Capital [Member] Ionis [Member] TTR License Agreement [Member]	Additional Paid In Capital [Member] Ionis [Member] TEGSEDI [Member]	Accumulated Other Comprehensive Loss [Member]	Accumulated Deficit [Member]
Balance at Dec. 31, 2017	$ 167,825			$ 67			$ 464,430			$ (451)	$ (296,221)
Balance (in shares) at Dec. 31, 2017				66,542
Net loss	(155,264)										(155,264)
Change in unrealized gains, net of tax	143									143
Currency translation adjustment	19									19
Exercise of common stock options	4,800						4,800
Exercise of common stock options (in shares)				633
Issuance of stock		$ 200,100	$ 40,000		$ 19	$ 1		$ 200,081	$ 39,999
Issuance of stock (in shares)					18,667	1,597
Distribution in connection with license transaction		(7,792)						(7,792)
Issuance of common stock in connection with employee stock purchase plan	341						341
Issuance of common stock in connection with employee stock purchase plan (in shares)				32
Stock-based compensation expense	31,239						31,239
Balance at Sep. 30, 2018	281,411			$ 87			733,098			(289)	(451,485)
Balance (in shares) at Sep. 30, 2018				87,471
Balance at Jun. 30, 2018	290,404			$ 86			678,509			(297)	(387,894)
Balance (in shares) at Jun. 30, 2018				85,681
Net loss	(63,591)										(63,591)
Change in unrealized gains, net of tax	37									37
Currency translation adjustment	(29)									(29)
Exercise of common stock options	1,626						1,626
Exercise of common stock options (in shares)				177
Issuance of stock			$ 40,000			$ 1			$ 39,999
Issuance of stock (in shares)						1,597
Issuance of common stock in connection with employee stock purchase plan	234						234
Issuance of common stock in connection with employee stock purchase plan (in shares)				16
Stock-based compensation expense	12,730						12,730
Balance at Sep. 30, 2018	281,411			$ 87			733,098			(289)	(451,485)
Balance (in shares) at Sep. 30, 2018				87,471
Balance at Dec. 31, 2018	276,724			$ 89			799,001			(324)	(522,042)
Balance (in shares) at Dec. 31, 2018				89,346
Net loss	(41,634)										(41,634)
Change in unrealized gains, net of tax	286									286
Currency translation adjustment	(25)									(25)
Exercise of common stock options	8,363			$ 1			8,362
Exercise of common stock options (in shares)				2,264
Issuance of stock		75,000			$ 3			74,997
Issuance of stock (in shares)					2,837
Distribution in connection with license transaction		$ (13,492)						$ (13,492)
Issuance of common stock in connection with employee stock purchase plan	822						822
Issuance of common stock in connection with employee stock purchase plan (in shares)				40
Stock-based compensation expense	29,459						29,459
Payments of tax withholdings related to exercise of employee stock awards	(10,015)			$ 1			(10,016)
Payments of tax withholdings related to vesting of employee stock awards (in shares)				(602)
Balance at Sep. 30, 2019	325,488			$ 94			889,133			(63)	(563,676)
Balance (in shares) at Sep. 30, 2019				93,885
Balance at Jun. 30, 2019	368,642			$ 93			900,837			(110)	(532,178)
Balance (in shares) at Jun. 30, 2019				92,921
Net loss	(31,498)										(31,498)
Change in unrealized gains, net of tax	64									64
Currency translation adjustment	(17)									(17)
Exercise of common stock options	1,335						1,335
Exercise of common stock options (in shares)				1,544
Issuance of common stock in connection with employee stock purchase plan	441						441
Issuance of common stock in connection with employee stock purchase plan (in shares)				22
Stock-based compensation expense	(3,464)						(3,464)
Payments of tax withholdings related to exercise of employee stock awards	(10,015)			$ 1			(10,016)
Payments of tax withholdings related to vesting of employee stock awards (in shares)				(602)
Balance at Sep. 30, 2019	$ 325,488			$ 94			$ 889,133			$ (63)	$ (563,676)
Balance (in shares) at Sep. 30, 2019				93,885

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Investments and Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2019

Investments And Fair Value Measurements [Abstract]

Summary of Investments

The following is a summary of our investments at September 30, 2019 and December 31, 2018 (in thousands):

			Gross Unrealized					Estimated
September 30, 2019	Cost		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	67,249	$	31	$	(2	)	$	67,278
Debt securities issued by U.S. government agencies		49,466		56		(3	)		49,519
Total securities with a maturity of one year or less	$	116,715	$	87	$	(5	)	$	116,797
Corporate debt securities		6,555		10		—			6,565
Total securities with a maturity of one to two years		6,555		10		—			6,565
Total available-for-sale securities	$	123,270	$	97	$	(5	)	$	123,362

			Gross Unrealized					Estimated
December 31, 2018	Cost		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	81,770	$	—	$	(151	)	$	81,619
Debt securities issued by U.S. government agencies		85,578		—		(42	)		85,536
Total securities with a maturity of one year or less	$	167,348	$	—	$	(193	)	$	167,155

Assets Measured at Fair Value on a Recurring Basis

The following tables present the investments we held at September 30, 2019 and December 31, 2018 that are regularly measured and carried at fair value. The table segregates each security by the level within the fair value hierarchy of valuation techniques we utilized to determine the respective security’s fair value (in thousands):

	At September 30, 2019		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Money market funds (1)	$	124,972	$	124,972	$	—
Corporate debt securities (3)		73,843		—		73,843
Debt securities issued by U.S. government agencies (3)		49,519		—		49,519
Total	$	248,334	$	124,972	$	123,362

	At December 31, 2018		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Money market funds (1)	$	82,343	$	82,343	$	—
Corporate debt securities (2)		81,619		—		81,619
Debt securities issued by U.S. government agencies (3)		85,536		—		85,536
Total	$	249,498	$	82,343	$	167,155

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

(2) At December 31, 2018, $1.0 million was included in cash and cash equivalents on our condensed consolidated balance sheet, with the difference included in short-term investments on our condensed consolidated balance sheet.

(3) Included in short-term investments on our condensed consolidated balance sheets.

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License Agreements and Services Agreement with Ionis (Tables)

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

Schedule Of Net Loss Share Related to Commercial Activities Under TTR Agreement

A summary of the loss share related to the commercial activities under the TTR Agreement is as follows:

	Three Months Ended September 30,			Nine Months Ended September 30,
	2019			2019
Net losses incurred by the collaboration related to the    commercial activities under the TTR Agreement	$	(14,814	)	$	(49,021	)
Ionis' share of commercial losses under the TTR Agreement    reflected in our condensed consolidated statements of    operations		(8,889	)		(29,410	)
Akcea's share of commercial losses under the TTR    Agreement reflected in our condensed consolidated    statements of operations		(5,925	)		(19,611	)

Schedule Of Development Expenses Related to TTR Agreement

A summary of the development expenses related to the TTR Agreement is as follows:

	Three Months Ended September 30,			Nine Months Ended September 30,
	2019			2019
Total development expense incurred by the collaboration    related to development activities under the TTR Agreement	$	(17,243	)	$	(43,655	)
Akcea's share of TTR development expense reflected in    research and development expense in our condensed    consolidated statements of operations	$	(7,525	)	$	(18,923	)

Amounts Recorded Related to Transactions with Ionis Including Amounts Related to TTR Licensing Transaction

The following table summarizes the amounts recorded related to transactions with Ionis including amounts related to the TTR licensing transaction for the following periods (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2019			2018			2019			2018
Operating expenses:
Services performed by Ionis	$	1,075		$	3,192		$	3,225		$	11,182
Active pharmaceutical ingredient manufactured by    Ionis		5,515			—			5,515			5,229
Pre-commercial inventory manufactured by Ionis		—			—			—			5,996
Sublicensing expenses		—			7,200			78,000			7,200
Out-of-pocket expenses paid by Ionis		954			15,850			3,800			31,074
Less: commercial share of loss in connection with    the TTR license transaction		(8,889	)		—			(29,410	)		—
Less: R&D share of loss in connection with the    TTR license transaction		700			—			1,108			—
Total operating expenses generated by transactions    with Ionis		(645	)		26,242			62,238			60,681
Plus: distribution to Ionis		—			—			13,492			7,792
Total charges generated by transactions with Ionis		(645	)		26,242			75,730			68,473
(Receivable) payable balance (from) to Ionis at the    beginning of the period		(7,911	)		27,137			18,901			14,365
Less: total amounts received from (paid to) Ionis    during the period		7,909			(29,491	)		(20,278	)		(58,017	)
Less: receivable from Ionis		—			—			—			(933	)
Less: non-cash sublicensing expenses		—			—			(75,000	)		—
Total amount (receivable) payable (from) to Ionis    at period end	$	(647	)	$	23,888		$	(647	)	$	23,888

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License Agreements and Services Agreement with Ionis, TTR Development, Commercialization, Collaboration and License Agreement (Details) $ in Thousands				3 Months Ended		9 Months Ended
	Oct. 17, 2018 USD ($) shares	Aug. 03, 2018 USD ($) shares	Apr. 17, 2018 USD ($) Milestone shares	Sep. 30, 2019 USD ($) shares	Sep. 30, 2018 USD ($)	Sep. 30, 2019 USD ($) shares	Sep. 30, 2018 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($) shares	Apr. 16, 2018 shares
TTR Development, Commercialization, Collaboration and License Agreement [Abstract]
Common stock, shares authorized (in shares) | shares				125,000,000		125,000,000			125,000,000
Intangible assets, net				$ 84,529		$ 84,529			$ 88,914
Amortization expense of milestone payment				1,434	$ 701	4,256	$ 701
Ionis [Member]
TTR Development, Commercialization, Collaboration and License Agreement [Abstract]
Costs incurred by Ionis prior to closing of TTR Agreement			$ 3,100
Ionis [Member] | TTR License Agreement [Member]
TTR Development, Commercialization, Collaboration and License Agreement [Abstract]
Upfront licensing fee paid to Ionis						$ 150,000
Shares issued in consideration of upfront licensing fee (in shares) | shares			8,000,000
Number of sales milestones | Milestone			7
Annual worldwide net sales required for subsequent milestone payments to be paid in cash			$ 750,000
Notice period for termination of agreement						90 days
Common stock shares issued to Ionis | shares			10,700,000
Stock purchased by Ionis			$ 200,000
Common stock, shares authorized (in shares) | shares			125,000,000							100,000,000
Intangible assets, net			$ 600
Commercial inotersen inventory acquired from Ionis			$ 4,700
Clinical material acquired from Ionis								$ 13,500
Percentage of profits and losses from development and commercialization of inotersen paid to Ionis, tier 1			60.00%
Percentage of profits and losses from development and commercialization of inotersen retained, tier 1			40.00%
Percentage of profits and losses from development and commercialization of inotersen paid to Ionis, tier 2			50.00%
Percentage of profits and losses from development and commercialization of inotersen retained, tier 2			50.00%
Percentage of profits and losses from development and commercialization of AKCEA-TTR-L paid to Ionis			50.00%
Percentage of profits and losses from development and commercialization of AKCEA-TTR-L retained			50.00%
Ionis [Member] | TTR License Agreement [Member] | Inotersen [Member]
TTR Development, Commercialization, Collaboration and License Agreement [Abstract]
Maximum amount of payments payable for milestones				110,000		$ 110,000
Ionis [Member] | TTR License Agreement [Member] | AKCEA-TTR-L [Member]
TTR Development, Commercialization, Collaboration and License Agreement [Abstract]
Maximum amount of payments payable for milestones				145,000		145,000
Ionis [Member] | TTR License Agreement [Member] | Inotersen and AKCEA-TTR-L [Member]
TTR Development, Commercialization, Collaboration and License Agreement [Abstract]
Maximum amount of payments payable for milestones				1,300,000		1,300,000
Ionis [Member] | TTR License Agreement [Member] | TEGSEDI [Member]
TTR Development, Commercialization, Collaboration and License Agreement [Abstract]
Common stock shares issued to Ionis | shares	1,671,849	1,597,571
Amount of regulatory approval milestone paid by issuing common stock	$ 50,000	$ 40,000
Amortization expense of milestone payment				$ 1,400	$ 700	$ 4,300	$ 700
Ionis [Member] | TTR License Agreement [Member] | TEGSEDI [Member] | Milestone Payment [Member]
TTR Development, Commercialization, Collaboration and License Agreement [Abstract]
Useful life of milestone payment amortized to cost of sales				16 years

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Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Finite Lived Intangible Assets [Line Items]
Amortization of intangibles	$ 1,500	$ 700	$ 4,385	$ 815
Patents [Member]
Finite Lived Intangible Assets [Line Items]
Weighted average remaining amortizable life			11 years 18 days