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 June 30, 2020

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 July 29, 2020 was 101,598,619.

AKCEA THERAPEUTICS, INC.

FORM 10-Q

INDEX

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited):
	Condensed Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019	4
	Condensed Consolidated Statements of Comprehensive Loss for the three and six months ended June 30, 2020 and 2019	5
	Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended June 30, 2020 and 2019	6
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019	8
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations:	27
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	40
Item 4.	Controls and Procedures	41
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	75
Item 3.	Defaults Upon Senior Securities	75
Item 4.	Mine Safety Disclosures	75
Item 5.	Other Information	75
Item 6.	Exhibits	76
Signatures		77

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)

	June 30,			December 31,
	2020			2019
ASSETS
Current assets:
Cash and cash equivalents	$	135,744		$	306,866
Short-term investments		254,144			156,806
Accounts receivable		14,049			10,496
Receivable from Ionis Pharmaceuticals, Inc.		—			3,231
Inventories		13,756			8,817
Other current assets		10,480			10,689
Total current assets		428,173			496,905
Property, plant and equipment, net		5,895			5,261
Operating lease right-of-use assets		10,646			11,094
Intangible assets, net		80,127			83,051
Deposits and other assets		3,096			2,939
Total assets	$	527,937		$	599,250
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	4,253		$	10,216
Payable to Ionis Pharmaceuticals, Inc.		5,320			—
Accrued compensation		8,313			12,793
Accrued liabilities		12,316			14,191
Deferred revenue		263			2,165
Other current liabilities		4,716			2,633
Total current liabilities		35,181			41,998
Long-term portion of lease liabilities		13,545			14,248
Other long-term liabilities		183			—
Total liabilities		48,909			56,246
Stockholders’ equity:
Common stock, $0.001 par value; 125,000,000 shares authorized at June 30,    2020 and December 31, 2019; 101,509,223 and 100,993,173 shares issued and    outstanding at June 30, 2020 and December 31, 2019, respectively.		102			101
Additional paid-in capital		1,051,142			1,024,168
Accumulated other comprehensive income		1,481			5
Accumulated deficit		(573,697	)		(481,270	)
Total stockholders’ equity		479,028			543,004
Total liabilities and stockholders’ equity	$	527,937		$	599,250

See accompanying notes.

3

AKCEA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Revenue:
Product revenue, net	$	16,364		$	9,865		$	31,523		$	16,619
Licensing revenue		—			6,036			—			6,036
Research and development and license revenue under    collaborative agreements		6,013			10,722			6,928			167,784
Total revenue		22,377			26,623			38,451			190,439
Expenses:
Cost of sales - product		3,628			1,364			6,992			2,405
Cost of sales - intangible asset amortization		1,418			1,419			2,837			2,822
Cost of license		—			3,000			—			3,000
Research and development		29,731			20,271			47,086			119,890
Selling, general and administrative		42,139			50,740			88,385			95,342
Net loss share from commercial activities under arrangement    with Ionis Pharmaceuticals, Inc.		(3,448	)		(11,465	)		(10,499	)		(20,521	)
Total expenses		73,468			65,329			134,801			202,938
Loss from operations		(51,091	)		(38,706	)		(96,350	)		(12,499	)
Other income (expense):
Investment income		1,055			1,571			2,826			2,795
Other expense		(146	)		(28	)		(276	)		(140	)
Loss before income tax expense		(50,182	)		(37,163	)		(93,800	)		(9,844	)
Income tax benefit (expense)		605			(160	)		1,373			(292	)
Net loss	$	(49,577	)	$	(37,323	)	$	(92,427	)	$	(10,136	)
Net loss per share of common stock owned by Ionis, basic and    diluted	$	(0.49	)	$	(0.40	)	$	(0.91	)	$	(0.06	)
Weighted-average shares of common stock outstanding owned by    Ionis, basic and diluted		77,094,682			70,221,338			77,094,682			69,406,181
Net loss per share of common stock owned by others, basic and    diluted	$	(0.49	)	$	(0.40	)	$	(0.91	)	$	(0.26	)
Weighted-average shares of common stock outstanding owned by    others, basic and diluted		24,381,592			22,573,900			24,195,990			22,351,368

See accompanying notes.

4

AKCEA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net loss	$	(49,577	)	$	(37,323	)	$	(92,427	)	$	(10,136	)
Unrealized gains on investments, net of tax		1,016			10			1,393			222
Currency translation adjustment		74			(93	)		83			(8	)
Comprehensive loss	$	(48,487	)	$	(37,406	)	$	(90,951	)	$	(9,922	)

See accompanying notes.

5

AKCEA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Three Months Ended June 30, 2019 and 2020

(In thousands)

(Unaudited)

	For the Three Months Ended June 30, 2019
	Common Stock				Additional Paid In		Accumulated Other Comprehensive			Accumulated			Total Stockholders'
Description	Shares		Amount		Capital		Income (Loss)			Deficit			Equity
Balance at March 31, 2019		92,635	$	93	$	883,653	$	(27	)	$	(494,855	)	$	388,864
Net loss		—		—		—		—			(37,323	)		(37,323	)
Change in unrealized gains, net of tax		—		—		—		10			—			10
Currency translation adjustment		—		—		—		(93	)		—			(93	)
Issuance of common stock in connection with employee    stock plans		286		—		2,821		—			—			2,821
Stock-based compensation expense		—		—		14,363		—			—			14,363
Balance at June 30, 2019		92,921		93		900,837		(110	)		(532,178	)		368,642

	For the Three Months Ended June 30, 2020
	Common Stock				Additional Paid In		Accumulated Other Comprehensive		Accumulated			Total Stockholders'
Description	Shares		Amount		Capital		Income (Loss)		Deficit			Equity
Balance at March 31, 2020		101,349	$	101	$	1,033,319	$	391	$	(524,120	)	$	509,691
Net loss		—		—		—		—		(49,577	)		(49,577	)
Change in unrealized gains, net of tax		—		—		—		1,016		—			1,016
Currency translation adjustment		—		—		—		74		—			74
Issuance of common stock in connection with employee    stock plans		160		1		1,702		—		—			1,703
Stock-based compensation expense		—		—		16,121		—		—			16,121
Balance at June 30, 2020		101,509	$	102	$	1,051,142	$	1,481	$	(573,697	)	$	479,028

See accompanying notes.

6

AKCEA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Six Months Ended June 30, 2019 and 2020

(In thousands)

(Unaudited)

	For the Six Months Ended June 30, 2019
	Common Stock				Additional Paid In			Accumulated Other Comprehensive			Accumulated			Total Stockholders'
Description	Shares		Amount		Capital			Income (Loss)			Deficit			Equity
Balance at December 31, 2018		89,346	$	89	$	799,001		$	(324	)	$	(522,042	)	$	276,724
Net loss		—		—		—			—			(10,136	)		(10,136	)
Change in unrealized gains, net of tax		—		—		—			222			—			222
Currency translation adjustment		—		—		—			(8	)		—			(8	)
Issuance of common stock in connection with employee    stock plans		738		1		7,408			—			—			7,409
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		—		—		32,923			—			—			32,923
Balance at June 30, 2019		92,921	$	93	$	900,837		$	(110	)	$	(532,178	)	$	368,642

	For the Six Months Ended June 30, 2020
	Common Stock					Additional Paid In			Accumulated Other Comprehensive		Accumulated			Total Stockholders'
Description	Shares			Amount		Capital			Income (Loss)		Deficit			Equity
Balance at December 31, 2019		100,993		$	101	$	1,024,168		$	5	$	(481,270	)	$	543,004
Net loss		—			—		—			—		(92,427	)		(92,427	)
Change in unrealized gains, net of tax		—			—		—			1,393		—			1,393
Currency translation adjustment		—			—		—			83		—			83
Issuance of common stock in connection with employee    stock plans		520			1		3,648			—		—			3,649
Stock-based compensation expense		—			—		23,402			—		—			23,402
Payments of tax withholdings related to exercise of    employee stock options		(4	)		—		(76	)		—		—			(76	)
Balance at June 30, 2020		101,509		$	102	$	1,051,142		$	1,481	$	(573,697	)	$	479,028

See accompanying notes.

7

AKCEA THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2020			2019
Operating activities:
Net loss	$	(92,427	)	$	(10,136	)
Adjustments to reconcile net loss to net cash (used in) provided by    operating activities:
Depreciation		424			400
Amortization of right-of-use operating lease assets		448			501
Amortization of intangibles		2,924			2,908
Amortization of premium/discount on investment securities, net		747			(434	)
Non-cash sublicensing expense		—			75,000
Stock-based compensation expense		23,402			32,923
Changes in operating assets and liabilities:
Accounts receivable		(3,553	)		(4,596	)
Other current and long-term assets		(2,026	)		(966	)
Inventories		(2,415	)		(4,014	)
Accounts payable		(6,001	)		(2,890	)
Payable/receivable from Ionis Pharmaceuticals, Inc.		8,089			(26,812	)
Income tax receivable		(446	)		—
Accrued compensation		(4,480	)		(1,062	)
Accrued liabilities		576			2,128
Income taxes payable		(888	)		(169	)
Deferred revenue		(1,902	)		(12,958	)
Net cash (used in) provided by operating activities		(77,528	)		49,823
Investing activities:
Purchases of short-term investments		(215,329	)		(78,606	)
Proceeds from maturity of short-term investments		118,637			100,043
Purchases of property, plant and equipment		(558	)		(1,389	)
Net cash (used in) provided by investing activities		(97,250	)		20,048
Financing activities:
Proceeds from issuance of equity		3,649			7,409
Distribution to Ionis Pharmaceuticals, Inc.		—			(13,492	)
Payments of tax withholdings related to exercise of employee stock awards		(76	)		—
Net cash provided by (used in) financing activities		3,573			(6,083	)
Effect of exchange rates on cash		83			(8	)
Net (decrease) increase in cash and cash equivalents		(171,122	)		63,780
Cash, cash equivalents and restricted cash at beginning of period		309,250			88,838
Cash, cash equivalents and restricted cash at end of period	$	138,128		$	152,618
Supplemental disclosures of non-cash financing activities:
Purchase of property, plant and equipment included in accounts payable	$	38		$	—
Purchases of property, plant and equipment included in payable to    Ionis Pharmaceuticals, Inc.	$	462		$	—
Right-of-use assets obtained in exchange for lease liabilities	$	—		$	363

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:

	June 30,		June 30,
	2020		2019
Cash and cash equivalents	$	135,744	$	150,234
Restricted cash included in deposits and other assets		2,384		2,384
Total cash, cash equivalents and restricted cash	$	138,128	$	152,618

See accompanying notes.

9

AKCEA THERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2020

(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 medicines to treat patients with serious and rare diseases. On July 19, 2017, we completed our initial public offering, or IPO. As of June 30, 2020, Ionis owned approximately 76% 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 June 30, 2020 and 2019. 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, 2019.

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 believe that our currently available funds of $389.9 million as of June 30, 2020 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 have generally incurred losses since our inception and have funded our cash flow deficits primarily through the issuance of capital stock and proceeds from license and collaboration agreements. As of June 30, 2020, we had an accumulated deficit of $573.7 million. During the three and six months ended June 30, 2020, we generated losses of $49.6 million and $92.4 million, respectively, and we used $77.5 million of cash for our operating activities during the six months ended June 30, 2020. We expect to generate operating losses and negative operating cash flows for the foreseeable future; however, we may generate positive cash flows from significant upfront payments associated with out-licensing transactions. 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. Management’s belief with respect to our ability to fund operations is based on estimates that are subject to risks and uncertainties on our future results. 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 medicines even if we would otherwise prefer to develop and commercialize the medicines ourselves.

2. Summary of Significant Accounting Policies

The accounting policies followed in the preparation of these 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, 2019.

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, the accrual for research and development expenses, stock-based compensation and income taxes. 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

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. We place our cash, cash equivalents and short-term investments with reputable financial institutions. We primarily invest our excess cash in commercial paper 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 Standard & Poor's, or S&P, Moody's, 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.

New Accounting Pronouncements – Recently Issued

In June 2016, the Financial Accounting Standards Board, or FASB, issued guidance that changes the measurement of credit losses for most financial assets and certain other instruments. This standard requires us to estimate the expected credit loss of an instrument over its lifetime using an expected credit loss model, 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. We adopted this guidance on January 1, 2020 and it did not have 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. We adopted this guidance on January 1, 2020 on a prospective basis and it did not have a significant impact on our condensed consolidated financial statements and 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 implemented 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 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 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 sales to third parties, we do not recognize revenue for the transaction.  

We adopted this guidance on January 1, 2020 and it did not have a significant impact on our condensed consolidated financial statements and disclosures.

11

3. Net Product Revenue

Net product revenue consists of sales of TEGSEDI and WAYLIVRA. TEGSEDI is sold in the U.S. and the European Union, or E.U. On May 7, 2019, we obtained regulatory approval of WAYLIVRA in Europe, following which we began to commercialize WAYLIVRA in the E.U.

During the three and six months ended June 30, 2020 we recorded product revenue, net, of $16.4 million and $31.5 million, respectively. We recorded product revenue, net, of $9.9 million and $16.6 million for the same periods in 2019. The following table summarizes balances and activity in each of our product revenue allowance and reserve categories (in thousands):

	Chargebacks, discounts and fees			Government and other rebates			Returns		Total
Balance at December 31, 2019	$	270		$	1,353		$	197	$	1,820
Provision related to current period sales		1,044			4,830			58		5,932
Adjustment related to prior period sales		(66	)		83			—		17
Credits or payments made during the period		(1,093	)		(1,790	)		—		(2,883	)
Balance at June 30, 2020	$	155		$	4,476		$	255	$	4,886
Balance at December 31, 2018	$	50		$	293		$	5	$	348
Provision related to current period sales		438			774			138		1,350
Adjustment related to prior period sales		(4	)		(25	)		—		(29	)
Credits or payments made during the period		(311	)		(210	)		—		(521	)
Balance at June 30, 2019	$	173		$	832		$	143	$	1,148

The following table presents the balance of our receivables and contract liabilities related to net product revenue (in thousands):

	June 30, 2020		December 31, 2019
Receivables included in "Accounts receivable"	$	13,536	$	6,946
Contract liabilities included in "Accrued liabilities"		4,632		1,550

4. Revenue from Collaboration and License Agreements

Net revenue from our partners in connection with our collaboration and license agreements consisted of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
License Agreement with Pfizer	$	5,735	$	—	$	6,339	$	—
Strategic Collaboration with Novartis		278		10,722		589		167,784
Collaboration and License Agreement with    PTC Therapeutics		—		6,036		—		6,036
Total net revenue from partners	$	6,013	$	16,758	$	6,928	$	173,820

The following table presents the balance of our receivables and contract liabilities related to our collaboration and license agreements associated with our partners (in thousands):

	June 30, 2020		December 31, 2019
Receivables included in "Accounts receivable"	$	513	$	3,550
Contract liabilities included in "Deferred revenue"		263		1,322

During the three and six months ended June 30, 2020, we recognized the following revenue as a result of the change in the contract liability balances related to our collaboration and license agreements associated with our partners (in thousands):

	Three Months Ended June 30, 2020		Six Months Ended June 30, 2020
Revenue recognized in current period from:
Amounts included in deferred revenue at the beginning    of the period	$	455	$	1,059

12

License Agreement with Pfizer

In October 2019, we entered into a license agreement with Pfizer, or the Pfizer License Agreement, for the development and commercialization of vupanorsen (previously referred to as AKCEA-ANGPTL3-L_Rx). Under the terms of the Pfizer License Agreement, we granted Pfizer an exclusive license to further develop, manufacture and commercialize vupanorsen worldwide, subject to our potential participation in co-commercialization. We are responsible for completing a Phase 2 clinical trial and providing limited quantities of active pharmaceutical ingredient, or API, for vupanorsen.

We received a $250.0 million upfront payment in the fourth quarter of 2019 from Pfizer. We issued 6,873,344 shares of our common stock to Ionis as payment of the $125.0 million sublicense fee due under our development, commercialization and license agreement related to our cardiometabolic franchise, or Cardiometabolic License Agreement, with Ionis and recorded it as a research and development expense in our condensed consolidated statement of operations.

At commencement of the Pfizer License Agreement, we identified the following three distinct performance obligations:

• A license to develop and commercialize vupanorsen and the related know-how;

• Activities to develop vupanorsen; and

• The existing supply of vupanorsen API.

We concluded that the three performance obligations were distinct because Pfizer has full use of the obligations without any continuing involvement from us. Further, Pfizer, or another third party, could provide these obligations without our assistance.

We determined the transaction price for the Pfizer License Agreement to be the $250.0 million upfront payment we received from Pfizer. None of the development or regulatory milestone payments under this agreement were included in the upfront transaction price. We concluded that such future payments pursuant to the Pfizer License Agreement will be recognized when it is probable that Pfizer will achieve the related development or regulatory milestones.

Based on the distinct performance obligations under the Pfizer License Agreement, we allocated the $250.0 million transaction price based on the relative stand-alone selling prices of each of our performance obligations as follows:

• $245.6 million for the transfer of the license of vupanorsen and the related know-how;

• $2.2 million for the conduct of activities to develop vupanorsen; and

• $2.2 million for the delivery of the existing vupanorsen API.

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

• We recognized the full amount related to the license and related know-how in the fourth quarter of 2019 because Pfizer, upon the date of closing, had full use of the license and related know-how without any continuing involvement from us. Additionally, we did not have any further performance obligations related to the license after the license was transferred to Pfizer;

• We are recognizing revenue relating to development activities performed using an input method by calculating costs incurred to date at each period end relative to total costs expected to be incurred. We are completing the Phase 2 clinical trial for vupanorsen and expect to complete our activities in the third quarter of 2020. Pfizer is responsible for conducting and funding all future development, regulatory and commercialization activities for vupanorsen; and

• We recognized the amount attributed to the vupanorsen API supply when we delivered the API to Pfizer in the fourth quarter of 2019.

During the second quarter of 2020, Pfizer exercised its option to purchase additional vupanorsen API in accordance with the Pfizer License Agreement. We concluded that the option to purchase additional API did not constitute a material right as the API is being sold at its stand-alone selling price, and thus is not offered at a discount. Accordingly, we recognized $5.3 million of revenue relating to this option upon the delivery of vupanorsen API in the second quarter of 2020. Pfizer has the option to purchase additional vupanorsen API in the future at agreed upon terms and conditions pursuant to the Pfizer License Agreement.

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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 will achieve the next milestone payment of $75.0 million when Pfizer advances vupanorsen_. We are also eligible to receive tiered royalties in the mid-teens to low twenty percent range on net sales of vupanorsen. 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 share any milestone payments and royalties equally with Ionis.

During the three and six months ended June 30, 2020, we recognized $0.5 million and $1.1 million, respectively, of revenue related to our Pfizer License Agreement that was in our beginning deferred revenue balance. Our condensed consolidated balance sheets at June 30, 2020 and December 31, 2019 included deferred revenue of $0.3 million and $1.3 million, respectively, related to our development activities obligation under the Pfizer License Agreement.

Strategic collaboration with Novartis

In January 2017, 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. Under the terms of the Novartis collaboration, we agreed to complete a Phase 2 clinical trial, conduct an end-of-Phase 2 meeting with the U.S. Food and Drug Administration, or FDA, and provide initial quantities of API for each medicine.

AKCEA-APO(a)-L_Rx

In February 2019, Novartis exercised its exclusive 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. Novartis has full use of the license without any continuing involvement from us, therefore making the license distinct from other performance obligations. Accordingly, we recognized the related license fee of $150.0 million in full in February 2019 upon exercise. We issued 2,837,373 shares of our common stock to Ionis to satisfy the $75.0 million sublicense fee due to Ionis for Novartis’ option exercise under our Cardiometabolic License Agreement with Ionis.

In the second quarter of 2019, we completed the development services performance obligation for AKCEA-APO(a)-L_Rx and all revenue allocated to this revenue stream was fully recognized as of June 30, 2019.

We are eligible to receive up to $675.0 million in additional 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, we and Novartis established a more definitive co-commercialization framework under which we and Novartis may negotiate the co-commercialization of AKCEA-APO(a)-L_Rx in select 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 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 clinical trial for AKCEA-APO(a)-L_Rx. 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. 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 share any milestone payments and royalties equally with Ionis. AKCEA-APO(a)-L_Rx was recently granted Fast Track Designation by the FDA as a potential treatment for people at significant risk for cardiovascular disease due to elevated levels of lipoprotein(a), or Lp(a).

AKCEA-APOCIII-L_Rx

In December 2019, Novartis elected not to exercise its option to license AKCEA-APOCIII-L_Rx and terminated the strategic collaboration solely in relation to AKCEA-APOCIII-L_Rx. As a result, the development services performance obligation relating to AKCEA-APOCIII-L_Rx was satisfied and all revenue allocated to the development services revenue stream was fully recognized as of December 31, 2019.

As a result of Novartis’ election not to exercise its option, we retain the rights to further develop and commercialize AKCEA-APOCIII-L_Rx. We are no longer entitled to any future license fees, milestone payments or royalties from Novartis relating to AKCEA-APOCIII-L_Rx. In the second quarter of 2020, we repurchased $2.3 million of AKCEA-APOCIII-L_Rx API from Novartis to be used to further develop AKCEA-APOCIII-L_RX. This amount is included in research and development expense on our condensed consolidated statement of operations.

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Collaboration and License Agreement with PTC Therapeutics

In August 2018, we entered into a collaboration and license agreement with PTC Therapeutics International Limited, or the PTC License Agreement, to commercialize TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries, or the PTC Territory. In addition, in April 2019, we entered into a supply agreement with PTC Therapeutics International Limited, or PTC Therapeutics, providing them the option to purchase product from us subject to terms as described in the agreement. During the three and six months ended June 30, 2020, we did not recognize any revenue from our collaboration with PTC Therapeutics.

In May 2019, we received a $6.0 million milestone payment from PTC Therapeutics as a result of regulatory approval of WAYLIVRA in Europe. We paid Ionis a $3.0 million sublicense fee under our Cardiometabolic License Agreement and recorded it as a cost of license in our condensed consolidated statement of operations. In October 2019, we received a $4.0 million milestone payment from PTC Therapeutics as a result of regulatory approval of TEGSEDI in Brazil. We paid Ionis a $2.4 million sublicense fee under our development, commercialization, collaboration and license agreement with Ionis dated March 2018, or the TTR License Agreement, and recorded it as a cost of license in our condensed consolidated statement of operations. We did not include these milestone payments in the upfront transaction price as we concluded that such future payments pursuant to the PTC License Agreement will be recognized when it is probable that PTC Therapeutics will achieve the related regulatory milestones. After receiving regulatory approval for WAYLIVRA and TEGSEDI, we deemed the milestones probable and recognized $6.0 million and $4.0 million as license revenue during the second and fourth quarter of 2019, respectively. 

We are eligible to receive an additional $4.0 million milestone payment upon receiving regulatory approval of WAYLIVRA in Brazil 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 TEGSEDI or WAYLIVRA in Brazil or the date that PTC Therapeutics recognizes revenue of at least $10.0 million in cumulative net sales of TEGSEDI or WAYLIVRA 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 TEGSEDI or WAYLIVRA in the PTC Territory. Milestone payments and royalties that we are eligible to receive from PTC Therapeutics for TEGSEDI are split 60% to Ionis and 40% to Akcea in accordance with our TTR License Agreement. All WAYLIVRA milestone payments and royalties that we are eligible to receive from PTC Therapeutics are split equally with Ionis in accordance with our Cardiometabolic License Agreement. 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.

5. Investments and Fair Value Measurements

Investments

As of June 30, 2020 and December 31, 2019, 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 S&P, Moody’s 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 June 30, 2020 and December 31, 2019 (in thousands):

			Gross Unrealized					Estimated
June 30, 2020	Cost		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	81,143	$	374	$	(1	)	$	81,516
Debt securities issued by U.S. government agencies		118,414		489		(5	)		118,898
Total securities with a maturity of one year or less	$	199,557	$	863	$	(6	)	$	200,414
Corporate debt securities	$	30,878	$	354	$	-		$	31,232
Debt securities issued by U.S. government agencies		22,272		230		(4	)		22,498
Total securities with a maturity of one to two years		53,150		584		(4	)		53,730
Total available-for-sale securities	$	252,707	$	1,447	$	(10	)	$	254,144

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			Gross Unrealized					Estimated
December 31, 2019	Cost		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	105,679	$	40	$	(23	)	$	105,696
Debt securities issued by U.S. government agencies		38,970		30		(6	)		38,994
Total securities with a maturity of one year or less	$	144,649	$	70	$	(29	)	$	144,690
Corporate debt securities	$	2,033	$	5	$	—		$	2,038
Debt securities issued by U.S. government agencies		14,079		—		(3	)		14,076
Total securities with a maturity of one to two years		16,112		5		(3	)		16,114
Total available-for-sale securities	$	160,761	$	75	$	(32	)	$	160,804

We recorded unrealized gains and losses related to the securities listed above as of June 30, 2020 and December 31, 2019. 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 June 30, 2020 and December 31, 2019 that are regularly measured and carried at fair value. The table segregates our investments by level within the fair value hierarchy of valuation techniques used to determine their fair value (in thousands):

	At June 30, 2020		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Money market funds (1)	$	105,972	$	105,972	$	—
Corporate debt securities (3)		112,749		—		112,749
Debt securities issued by U.S. government agencies (3)		141,395		—		141,395
Total	$	360,116	$	105,972	$	254,144

	At December 31, 2019		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Money market funds (1)	$	285,510	$	285,510	$	—
Corporate debt securities (2)		107,735		—		107,735
Debt securities issued by U.S. government agencies (3)		53,069		—		53,069
Total	$	446,314	$	285,510	$	160,804

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

(2) At December 31, 2019, $4.0 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 sheet.

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6. Property, Plant and Equipment

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

	June 30,			December 31,
	2020			2019
Furniture and fixtures	$	1,819		$	1,611
Computer equipment and software		459			289
Manufacturing equipment		454			416
Leasehold improvements		4,597			3,955
Total property and equipment, at cost		7,329			6,271
Less accumulated depreciation and amortization		(1,434	)		(1,010	)
Total property and equipment, net	$	5,895		$	5,261

We recorded depreciation expense of $0.2 million and $0.4 million for the three and six months ended June 30, 2020, respectively. We recorded depreciation expense of $0.2 million and $0.4 million for the same periods in 2019.

7. Inventories

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

WAYLIVRA inventory-related costs incurred subsequent to April 1, 2019 and TEGSEDI inventory-related costs incurred subsequent to July 1, 2018 are reflected as inventories on our condensed consolidated balance sheet at the lower of cost or net realizable value under the first-in, first-out, or FIFO, basis. At June 30, 2020, a majority of our physical inventory for WAYLIVRA and a portion of our physical inventory for TEGSEDI included API that we produced prior to regulatory approval. As such, there is no cost basis for this API as we previously expensed the related costs as research and development expenses.

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 statement of operations.

The following table presents inventories (in thousands):

	June 30,		December 31,
	2020		2019
Raw materials	$	9,544	$	6,520
Work in process		3,471		2,039
Finished goods		741		258
Total inventories	$	13,756	$	8,817

8. Intangible Assets, net

The following table presents intangible assets (in thousands):

	June 30,			December 31,			Estimated
	2020			2019			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		(12,135	)		(9,211	)
Total intangible assets, net	$	80,127		$	83,051

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We recorded $1.4 million and $2.9 million, respectively, in amortization expense related to intangible assets during the three and six months ended June 30, 2020. For the same periods in 2019, we recorded $1.5 million and $2.9 million, respectively. Estimated future amortization expense for intangible assets as of June 30, 2020 is as follows (in thousands):

Years ended December 31,	Intangible Assets
Remainder of 2020	$	2,955
2021		5,861
2022		5,856
2023		5,843
2024		5,822
Thereafter		53,790
	$	80,127

The weighted average remaining amortizable life of our patents was 10.6 years at June 30, 2020.

For additional detail of our license agreements with Ionis, see Note 9, License Agreements and Services Agreement with Ionis.

9. 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 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 vupanorsen, which are collectively referred to as the Lipid Medicines. Ionis granted us an exclusive license to certain patents to develop and commercialize products containing the Lipid Medicines. Ionis also granted us a non-exclusive license to the Ionis antisense platform technology for us to develop and commercialize products containing the Lipid Medicines. Ionis also granted us non-exclusive rights to manufacture the Lipid Medicines in our own facility or at a contract manufacturer. As part of this agreement, both companies agreed not to work with any other parties to develop or commercialize other RNA-targeting medicines that are designed to inhibit any of the Lipid Medicine targets so long as we are developing or commercializing the Lipid Medicines.

We and Ionis share development responsibilities for the Lipid Medicines, other than the medicines licensed to Novartis and to 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 medicines, 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, or FTE, 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 medicines. We also pay Ionis for the API and drug product we use in our nonclinical and clinical studies for all of our medicines. 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 charges us for the resulting cost.

As we commercialize each of the Lipid Medicines, other than medicines licensed to Novartis and to Pfizer, we pay Ionis royalties in the mid-teens to the mid-twenty percent range on sales related to the Lipid Medicines that we sell. If we sell a Lipid Medicine 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 Medicine 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 AKCEA-APO(a)-L_Rx licensed to Novartis under the collaboration agreement with Novartis and vupanorsen 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 Medicine. 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.

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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 received from Pfizer in connection with our license agreement with Pfizer. For additional detail regarding our strategic collaboration with Novartis and license agreement with Pfizer, see Note 4, Revenue from Collaboration and License Agreements.

TTR Development, Commercialization, Collaboration and License Agreement

On April 17, 2018, our stockholders, other than Ionis and its affiliates, approved the 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 that required the approval of 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 medicine 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 license fee of $150.0 million, 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 us 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 in 2018 for $200 million under the Ionis SPA.

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.

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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 the transfer of certain manufacturing and clinical research agreements to us. 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 purchased $4.7 million of TEGSEDI inventory held by Ionis. In addition, in the first quarter of 2019 we purchased $13.5 million of 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 commercial inventory and clinical material as a reduction of additional paid in capital as this amount represented a cash distribution to Ionis. Accordingly, we included this amount as a distribution to Ionis for purposes of net loss per share and we 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 that we 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.

On July 11, 2018, we received regulatory approval for TEGSEDI in the E.U. for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hereditary transthyretin amyloidosis, or hATTR amyloidosis. As a result of the regulatory 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 intangible assets was $1.4 million and $2.8 million for the three and six months ended June 30, 2020, respectively. Amortization expense for the TTR intangible assets was $1.4 million and $2.8 million, respectively, for the same periods in 2019.

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 U.S., 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 revenue, 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.

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A summary of the loss share related to the commercial activities under the TTR License Agreement is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net losses incurred by the collaboration related    to the commercial activities under the TTR    License Agreement	$	(5,922	)	$	(19,109	)	$	(17,724	)	$	(34,207	)
Ionis' share of commercial losses under the    TTR License Agreement reflected in our    condensed consolidated statement of operations		(3,448	)		(11,465	)		(10,499	)		(20,521	)
Akcea's share of commercial losses under the    TTR License Agreement reflected in our condensed    consolidated statement of operations	$	(2,474	)	$	(7,644	)	$	(7,225	)	$	(13,686	)

A summary of the development expenses related to the TTR Agreement is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Total development expense incurred by the    collaboration related to development activities    under the TTR License Agreement	$	(18,185	)	$	(12,032	)	$	(36,516	)	$	(26,412	)
Akcea's share of TTR development expense reflected    in research and development expense in our    condensed consolidated statement of operations	$	(8,290	)	$	(5,265	)	$	(16,480	)	$	(11,398	)

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 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.

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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 June 30, 2020 we owed Ionis $5.3 million. As of December 31, 2019, Ionis owed us $3.2 million.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Operating expenses:
Services performed by Ionis	$	1,903		$	1,075		$	3,806		$	2,150
Active pharmaceutical ingredient manufactured by    Ionis		7,571			—			7,571			—
Sublicensing expenses		—			3,000			—			78,000
Out-of-pocket expenses paid by Ionis		1,453			1,275			2,038			2,846
Royalty expense		613			—			1,417			—
Less: commercial share of loss in connection with    the TTR license transaction		(3,183	)		(11,465	)		(10,081	)		(20,521	)
Less: R&D share of loss in connection with the    TTR license transaction		2,243			1,204			3,417			408
Total operating expenses (income) generated by     transactions with Ionis		10,600			(4,911	)		8,168			62,883
Plus: distribution to Ionis		—			—			—			13,492
Total net charges generated by transactions with Ionis		10,600			(4,911	)		8,168			76,375
(Receivable) payable balance (from) to Ionis at the    beginning of the period		(2,432	)		(7,206	)		(3,231	)		18,901
Less: total amounts received from (paid to) Ionis    during the period		2,432			4,206			5,663			(28,187	)
Less: receivable from Ionis		(5,280	)		—			(5,280	)		—
Less: non-cash sublicensing expenses		—			—			—			(75,000	)
Total amount payable (receivable) to (from) Ionis    at period end	$	5,320		$	(7,911	)	$	5,320		$	(7,911	)

10. Stock-Based Compensation

Stock Plans

2015 Equity Incentive Plan

In the second quarter of 2020, we increased the number of shares of common stock available for issuance under the 2015 Equity Incentive Plan, or 2015 Plan, by 5,000,000 shares to support future equity-based compensation. As of June 30, 2020, the aggregate number of shares of common stock that may be issued pursuant to stock awards under the 2015 Plan, was 23,500,000 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, or RSUs. At June 30, 2020, a total of 10,388,835 stock options were outstanding, of which 3,569,106 were exercisable, 1,502,975 RSU awards were outstanding, and 6,607,438 shares were available for future grant under the 2015 Plan.

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2017 Employee Stock Purchase Plan

On January 1, 2020, 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 2017 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 June 30, 2020, the aggregate number of shares of common stock reserved under the 2017 ESPP was 2,000,000 and we had 1,893,951 shares available for future issuance under the 2017 ESPP. During the three and six months ended June 30, 2020, no shares and 34,774 shares were issued under our 2017 ESPP, respectively. At June 30, 2020, accrued compensation included $0.3 million of 2017 ESPP contributions for which we anticipate issuing the related shares in the third quarter of 2020.

Stock-based Compensation Expense

We measure stock-based compensation expense for equity-classified awards related to stock options, 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 statement 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 six months ended June 30, 2020 and 2019, we used the following weighted-average assumptions in our Black-Scholes calculations:

Employee Stock Options:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		1.3	%		2.5	%
Dividend yield		0.0	%		0.0	%
Volatility		74.5	%		76.3	%
Expected life	6.1 years			6.1 years

Board of Directors Stock Options:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		0.8	%		1.9	%
Dividend yield		0.0	%		0.0	%
Volatility		75.3	%		74.3	%
Expected life	5.7 years			6.3 years

2017 ESPP:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		1.0	%		2.5	%
Dividend yield		0.0	%		0.0	%
Volatility		71.9	%		64.1	%
Expected life	6 months			6 months

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The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2020 and 2019 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Cost of sales - product	$	350	$	137	$	587	$	255
Research and development expenses		3,484		2,563		4,833		6,484
Selling, general and administrative expenses		12,287		11,663		17,982		26,184
Total	$	16,121	$	14,363	$	23,402	$	32,923

As of June 30, 2020, total unrecognized, estimated non-cash stock-based compensation expense related to unvested stock options and RSUs was $53.2 million and $18.9 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 unvested stock options and RSUs over a weighted average amortization period of 1.5 years and 1.6 years, respectively.

11. Basic and Diluted Net Loss Per Share

In the first quarter of 2019, we purchased inventory from Ionis and the amount paid to Ionis was in excess of Ionis’ carrying value of the related assets acquired. In accordance with accounting guidance for common control transactions, this distribution was treated as a dividend to Ionis; therefore, we have applied the two-class method of net loss per share to reflect the allocation of this distribution to the participating Ionis common shares.

The two-class method is an earnings allocation formula that determines net 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 net 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 net 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 number of common shares outstanding during the requisite period.

The following table summarizes the distributable losses for the three and six months ended June 30, 2020 and 2019 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net loss	$	(49,577	)	$	(37,323	)	$	(92,427	)	$	(10,136	)
Distributions to Ionis		—			—			—			(13,492	)
Distributable losses	$	(49,577	)	$	(37,323	)	$	(92,427	)	$	(23,628	)

The following table summarizes the reconciliation of weighted-average shares outstanding used in the calculation of basic loss per share for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Determination of shares:
Weighted-average common shares outstanding    owned by Ionis		77,094,682		70,221,338		77,094,682		69,406,181
Weighted-average common shares outstanding    owned by others		24,381,592		22,573,900		24,195,990		22,351,368
Total weighted-average common shares outstanding		101,476,274		92,795,238		101,290,672		91,757,549

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The following table summarizes the calculation of basic loss per share for the three and six months ended June 30, 2020 and 2019 (in thousands, except share and per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Losses allocated to Ionis	$	(37,665	)	$	(28,244	)	$	(70,348	)	$	(17,872	)
Plus: Distribution to Ionis		—			—			—			13,492
Losses available to Ionis	$	(37,665	)	$	(28,244	)	$	(70,348	)	$	(4,380	)
Weighted-average common shares outstanding    owned by Ionis		77,094,682			70,221,338			77,094,682			69,406,181
Basic loss per common share owned by Ionis	$	(0.49	)	$	(0.40	)	$	(0.91	)	$	(0.06	)
Losses allocated to common shares owned by    others	$	(11,912	)	$	(9,079	)	$	(22,079	)	$	(5,756	)
Weighted-average common shares outstanding    owned by others		24,381,592			22,573,900			24,195,990			22,351,368
Basic loss per common share owned by others	$	(0.49	)	$	(0.40	)	$	(0.91	)	$	(0.26	)

For the three and six months ended June 30, 2020 and June 30, 2019 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 RSUs; and

• Employee Stock Purchase Plan.

12. Contractual Obligations and Commitments

Operating Lease

The following table summarizes the contractual lease obligations as of June 30, 2020 (in thousands):

Years ended December 31,	Operating Leases
Remainder of 2020	$	1,215
2021		2,371
2022		2,403
2023		2,400
2024		2,395
Thereafter		9,565
Total minimum lease payments	$	20,349

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 June 30, 2020, our purchase commitments for the following 12 months were $1.1 million.

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13. Income Taxes

We recorded an income tax benefit of $0.6 million and $1.4 million for the three and six months ended June 30, 2020, respectively, compared to income tax expense of $0.2 million and $0.3 million for the same periods in 2019. We recorded an income tax benefit for the six months ended June 30, 2020 primarily due to the tax benefit of $1.7 million related to the Coronavirus, Aid, Relief and Economic Security Act, or CARES Act, signed into law on March 27, 2020, which is partially offset by income tax expense related to taxable income earned in certain foreign jurisdictions.

Under the Tax Cut and Jobs Act of 2017, or the Tax Act, federal net operating losses incurred in 2018 and in future years could be carried forward indefinitely, but the deductibility of such federal net operating losses was limited. The CARES Act temporarily removes the limitation on net operating loss deductions, resulting in the $1.7 million tax benefit recorded for the six months ended June 30, 2020. The limitation on the deductibility of federal net operating losses is reinstated for tax years beginning after 2020.

14. Legal Proceedings

On July 16, 2020, a purported Company stockholder filed an action in the Delaware Court of Chancery captioned John Makris, et al. v. Stanley T. Crooke, et al., C.A. No. 2020-0587, or the “Delaware Action.” The plaintiff in the Delaware Action asserts claims against (i) current and former members of our board of directors; and (ii) Ionis Pharmaceuticals, Inc., or collectively, the Defendants. The plaintiff asserts derivative claims on behalf of Akcea, which is a nominal defendant in the Delaware Action, as well as putatively direct claims on behalf of a purported class of our stockholders. The plaintiff in the Delaware action asserts that the Defendants breached their fiduciary duties in connection with the licensing transaction that we and Ionis entered into regarding inotersen and AKCEA-TTR-L_Rx. The plaintiff also asserts an unjust enrichment claim against Ionis. The plaintiff’s claims are similar to those asserted in a prior action in the Delaware Court of Chancery captioned City of Cambridge Retirement System v. Crooke, et al., C.A. No. 2019-0905, which was dismissed with prejudice to the named plaintiff only on April 8, 2020. We believe that the claims asserted in the Delaware Action are without merit and anticipate filing a motion to dismiss the claims.

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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 use and commercialization 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,” 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 medicines, the commercialization of our medicines, our dependence on third parties to develop and commercialize our medicines, 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 medicines 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. In particular, we caution you that our forward-looking statements are subject to the ongoing and developing circumstances related to the COVID-19 Pandemic, which may have a material adverse effect on our business, operations and future financial results. 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, 2019, which are contained in our Annual Report on the Form 10-K for the fiscal year ended on December 31, 2019 filed on March 2, 2020 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 transformative medicines to treat patients with serious and rare diseases. Our large and potentially advancing pipeline of medicines in late-stage development and medicines on the market allows us to capitalize on our strengths in supporting patients, healthcare professionals and caregivers in treating serious and rare diseases. To optimize the value of our medicines to treat larger patient populations, we add to our own capabilities the strengths of partners to provide additional expertise, resources and commercial capabilities. We believe our strong relationship with our majority shareholder, Ionis Pharmaceuticals, Inc., or Ionis, should allow us to continue to expand our pipeline.

We have a robust portfolio of antisense medicines, both on the market and in development, covering multiple targets and diseases that we have licensed from Ionis. We are highly focused on commercializing our approved therapies, TEGSEDI and WAYLIVRA. TEGSEDI is indicated to treat adults with the polyneuropathy caused by hereditary transthyretin-mediated amyloidosis, or hATTR amyloidosis, and has been approved and commercialized in the United States, or U.S., the European Union, or E.U. and Canada as well as approved in Brazil. WAYLIVRA is indicated as an adjunct to diet to treat adult patients with genetically confirmed familial chylomicronemia syndrome, or FCS, who are at high risk for pancreatitis, for whom response to diet and triglyceride lowering therapy has been inadequate. WAYLIVRA has been approved and commercialized in the E.U. A Marketing Authorization Application was submitted to ANVISA in Brazil through PTC Therapeutics International Limited, or PTC Therapeutics, for WAYLIVRA.

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We are advancing a mature pipeline of novel medicines with the potential to treat multiple diseases. In addition to TEGSEDI and WAYLIVRA, our pipeline includes two medicines in Phase 3 clinical trials, AKCEA-APO(a)-L_Rx, which is partnered with Novartis Pharma AG, or Novartis, and AKCEA-TTR-L_Rx. We also have two additional medicines that have each completed a positive Phase 2 clinical trial, AKCEA-ANGPTL3-L_Rx, which is now called vupanorsen and is partnered with Pfizer, Inc., or Pfizer, and AKCEA-APOCIII-L_Rx. All of our medicines are based on Ionis’ antisense technology platform. Our medicines in development use Ionis' advanced LIgand Conjugated Antisense, or LICA, technology, which enhances the effective uptake and activity of these medicines in particular tissues.

We are continuing to optimize our current commercial infrastructure for TEGSEDI and WAYLIVRA, and plan to use this infrastructure for the other medicines in our pipeline. A key element of our commercial strategy is to provide the specialized, patient-centric support required to successfully address serious and rare disease patient populations. We believe our focus on treating patients with inadequately addressed serious and rare diseases allows us to partner efficiently and effectively with the specialized medical community that supports these underserved patient communities. For example, we created Akcea Connect, a drug treatment program composed of dedicated, regionally-based nurse case managers who have a wide range of medical knowledge and experience. This program offers free, private and personalized support to patients, their caregivers and their families in the U.S. Internationally, we are introducing Akcea Connect in each of the countries where our products are available with the highest level of patient and physician support allowed by local regulations. Express Scripts’ Accredo Health Group, Inc., or Accredo is our specialty pharmacy partner for the distribution of TEGSEDI in the U.S. We chose Accredo because of its experience with the unique needs of rare disease communities and its proven track record for simplifying access to therapy. Accredo has a team of specialty clinicians, pharmacists and approximately 600 field-based nurses located throughout the U.S. who are augmenting the Akcea Connect team of nurse case managers to provide support and address the needs of the hATTR amyloidosis community. To further support the hATTR amyloidosis community, we and Ambry Genetics Corporation, or Ambry, a Konica Minolta company, launched hATTR Compass™ in the U.S. and Canada, a free-of-charge, confidential genetic testing and genetic counseling program for people suspected to have hATTR amyloidosis. This program is intended to empower patients and their caregivers by providing accurate genetic information, so they can make informed decisions about their healthcare.

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

ATTR

TEGSEDI is an antisense medicine designed to reduce the production of the transthyretin, or TTR protein. hATTR amyloidosis is a severe, progressive and life-threatening disease caused by the abnormal formation of the TTR protein and aggregation of TTR amyloid deposits in various tissues and organs throughout the body, including in peripheral nerves, the heart and intestinal tract. The progressive accumulation of TTR amyloid deposits in these organs often leads to intractable peripheral sensorimotor neuropathy, autonomic neuropathy and/or cardiomyopathy, as well as other disease manifestations. hATTR amyloidosis causes significant morbidity and progressive decline in quality of life, severely impacting activities of daily living. The disease often progresses rapidly and can lead to premature death. The median survival is 4.7 years following diagnosis.

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 co-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. The data showed a >90% knockdown of TTR following administration in healthy volunteers and a positive safety and tolerability profile. In November 2019, we and Ionis initiated a broad Phase 3 program, starting with the NEURO-TTRansform Phase 3 clinical trial for AKCEA-TTR-L_Rx in patients with polyneuropathy caused by hATTR amyloidosis. In January 2020, we and Ionis announced the initiation of the CARDIO-TTRansform Phase 3 cardiovascular outcomes clinical trial for AKCEA-TTR-L_Rx in patients with transthyretin-mediated amyloid cardiomyopathy, or ATTR cardiomyopathy.

In April 2020, results from the ongoing, open-label extension, or OLE, study of the pivotal NEURO-TTR trial were published in the European Journal of Neurology. The primary objective of the OLE study was to evaluate the safety and tolerability of long-term treatment with TEGSEDI. Secondary objectives of the study included understanding progression based on measures such as the modified Neuropathy Impairment Score +7 (mNIS+7) and the Norfolk Quality of Life Questionnaire-Diabetic Neuropathy (Norfolk QoL-DN). Understanding changes over time in generic health-related quality of life based on the Short Form 36 Health Survey (SF-36) was an exploratory objective. This interim analysis, published in the European Journal of Neurology, shows that treatment with TEGSEDI was not associated with additional safety concerns or signs of increased toxicity in study participants treated for up to five years. Treatment with TEGSEDI resulted in continued efficacy in patients after two years. Results also showed that patients who started treatment with TEGSEDI earlier (received TEGSEDI treatment in the NEURO-TTR study) achieved greater long-term disease stabilization compared to those who switched from placebo to TEGSEDI in the OLE study.

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Cardiometabolic

Our lipid/cardiometabolic medicines, WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-APOCIII-L_Rx and vupanorsen, are all based on antisense technology developed by Ionis. WAYLIVRA was granted conditional marketing authorization approval in the E.U. on May 3, 2019 and commercially launched in the E.U. in August 2019. We are commercializing WAYLIVRA across the E.U. The approval of WAYLIVRA in the E.U. followed 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 and optimizing 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 U.S. 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 Health Canada for WAYLIVRA. Our discussions with the FDA are ongoing and we plan to refile.

FCS is a serious and rare disease caused by impaired function of the enzyme lipoprotein lipase, or LPL, and characterized by severe hypertriglyceridemia and a risk of acute pancreatitis. Further, the lives of patients with this disease are impacted daily by the associated symptoms. In our Phase 3 clinical trial, 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 clinical trial were published in the August 2019 issue of The New England Journal of Medicine. We believe the safety and efficacy data from the WAYLIVRA program demonstrate a favorable risk-benefit profile for patients with FCS. The FDA and the EMA have granted orphan drug designation to WAYLIVRA for the treatment of patients with FCS.

AKCEA-APO(a)-L_Rx completed Phase 2 in 2018 and Novartis has initiated the Phase 3 program. This medicine was recently granted Fast Track Designation by the FDA as a potential treatment for people at significant risk for cardiovascular disease due to elevated levels of lipoprotein(a), or Lp(a).

On January 2, 2020, results from the Phase 2 clinical trial evaluating AKCEA-APO(a)-L_Rx in patients with established cardiovascular disease, or CVD, and elevated levels of lipoprotein(a), or Lp(a), were published in The New England Journal of Medicine, or NEJM.  

The randomized, double-blind, placebo-controlled, dose-ranging study of 286 patients with established CVD and elevated Lp(a) is the largest ever conducted specifically for people with elevated Lp(a).  It is also the largest and longest study to date evaluating the Ionis LICA technology platform, with patients treated for up to 1 year and all patients treated for a minimum of six months.

The study demonstrated that, following treatment, patients experienced significant dose-dependent reductions in Lp(a) at all dose levels studied with up to an 80% reduction in Lp(a) at the highest cumulative dose regimen. Approximately 98% of patients at the 80 mg monthly dose regimen achieved Lp(a) levels below 125 nmol/L (~50 mg/dL). Significant dose-dependent reductions in LDL-C, apoB, OxPL-apoB and OxPL-apo(a) from baseline were also observed. The majority of adverse events were mild or moderate, with the most frequent adverse events being injection site reactions, or ISRs. ISRs occurred in 27% and 6% of patients on treatment and those on placebo, respectively, and were mostly mild. One patient discontinued treatment due to an ISR. There were no differences in platelet counts, liver and renal parameters, or flu-like symptoms in patients administered AKCEA-APO(a)-L_Rx compared to patients administered placebo. AKCEA-APO(a)-L_Rx is continuing to progress well and is on track for a data readout in 2024.

On January 22, 2020, we and Ionis announced positive topline data results from the Phase 2 clinical trial of AKCEA-APOCIII-L_Rx in 114 patients with hypertriglyceridemia who are at risk for or have established CVD. The objective of the Phase 2 multicenter, randomized, double-blind, placebo-controlled, dose-ranging clinical trial was to evaluate the safety and efficacy of different doses and dosing frequencies of AKCEA-APOCIII-L_Rx. The study met the primary endpoint of significant triglyceride lowering and multiple secondary endpoints with a favorable safety and tolerability profile. We plan to initiate a Phase 3 clinical trial in patients with FCS this year.

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On January 28, 2020, we and Ionis announced positive topline data results from the Phase 2 clinical trial of vupanorsen in 105 patients with hypertriglyceridemia, type 2 diabetes and non-alcoholic fatty liver disease, or NAFLD.  The objective of the multicenter, randomized, double-blind, placebo-controlled, dose-ranging Phase 2 clinical trial was to evaluate the safety and efficacy of vupanorsen. The study met the primary endpoint of significant triglyceride lowering and multiple secondary endpoints with a favorable safety and tolerability profile.

We and Ionis will present data from our Phase 2 clinical trial of vupanorsen and our phase 2 clinical trial of AKCEA-APOCIII-L_Rx at an upcoming medical congress in the third quarter of 2020.

COVID-19

Since December 2019, multiple novel strains of coronavirus, SARS-CoV-2, causing a disease referred to as COVID-19, have spread worldwide. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic, or the COVID-19 Pandemic. The impact of the COVID-19 Pandemic on the global economy and on our business continues to be a fluid situation. We responded quickly across our organization to protect the health and safety of our team, customers and patients in our clinical trials, support our partners and vendors and mitigate risk. We continue to proactively assess, monitor and respond to domestic and international developments related to the COVID-19 Pandemic, and we have implemented risk-mitigation plans as needed to minimize the impact on our clinical trials, supply chain and business operations. In addition, at the recommendation of our COVID-19 task force, including international functional leadership and medical staff, we have taken steps to protect the health and welfare of our employees by temporarily closing our offices and generally suspending business-related travel, while continuing our efforts to serve customers and patients who rely on us.

Our marketed products are administered through self-injection in the comfort and safety of a patient’s home and do not require a patient go to an infusion center or hospital for treatment.  To date, our at-home services offered to patients on therapy have continued without interruption.  

After careful review of our operations, while the ongoing and developing circumstances related to the COVID-19 Pandemic remain uncertain, we believe that we are well positioned to address challenges related to the COVID-19 Pandemic and to continue to advance both our commercial medicines and our clinical programs. We formed a multi-disciplinary COVID-19 task force to collect, monitor and analyze evolving information regarding the COVID-19 Pandemic and to make recommendations to our executive leadership team and board of directors regarding risk identification and mitigation planning. Thus far, our employees have rapidly adapted to working remotely and we are monitoring the COVID-19 Pandemic on a daily basis to ensure we have all necessary plans in place for mitigating disruptions in our operations, including our commercialization efforts, clinical programs and ongoing drug supply and nursing support for patients and clinicians. Like other companies, our clinical trials have experienced disruption due to access limitations to institutions currently impacted, and we may need to make further adjustments to clinical trials in the future to comply with evolving FDA guidance.

Our commitment to our patients, their caregivers and clinicians on the front lines managing serious and rare diseases is unwavering and our goal is to keep our existing patients on our medicines safely and support the initiation of appropriate new patients onto our medicines.

Commercial Infrastructure and Strategic Collaborations

We continue to optimize our current commercial infrastructure for TEGSEDI and WAYLIVRA, and plan to use this infrastructure for the other medicines in our pipeline. Depending on the geographic region, the number of patients impacted by the diseases we are treating and the regulatory environment of the local countries, we may choose to build out the commercial infrastructure ourselves, or to partner with another company for commercial sales and distribution. In August 2018, we entered into a license agreement with 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 serious and rare 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 AKCEA-APO(a)-L_Rx, which was recently granted Fast Track Designation by the FDA, we have a strategic collaboration with Novartis. In February 2019, Novartis exercised its option to license AKCEA-APO(a)-L_Rx. Novartis is now responsible for all development and commercialization activities for this medicine, subject to our potential participation in co-commercialization. Novartis initiated the Lp(a) HORIZON study, a Phase 3 clinical trial of AKCEA-APO(a)-L_Rx in patients with established cardiovascular disease, or CVD, and elevated levels of lipoprotein(a), or Lp(a). Lp(a) HORIZON is a global CVD outcomes study in which Novartis plans to enroll more than 7,500 patients. We believe Novartis brings significant resources and expertise to the collaboration that can accelerate our ability to deliver this potential therapy to the large population of patients who have high cardiovascular risk due to elevated Lp(a).

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Our strategic collaboration with Novartis has a potential aggregate transaction value of $900.0 million, plus royalties, which we will share equally with Ionis. The calculation of potential aggregate transaction value assumes that Novartis successfully develops and achieves regulatory approval for AKCEA-APO(a)-L_Rx in multiple indications, and that Novartis achieves pre-specified sales targets with respect to AKCEA-APO(a)-L_Rx. In addition to the $75.0 million upfront payment that we received in February 2017 and the $150.0 million license fee that we received in February 2019 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. 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 Novartis will reduce these royalties upon the expiration of certain patents or if a generic competitor negatively impacts the product in a specific country. 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 may 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 achieve the next payment of $25.0 million if Novartis reaches a specific level of enrollment related to the Phase 3 clinical trial for AKCEA-APO(a)-L_Rx.

Our collaboration with Novartis also included rights to AKCEA-APOCIII-L_Rx. In December 2019, Novartis made a strategic portfolio decision not to exercise its option and terminated its rights to AKCEA-APOCIII-L_Rx. Consequently, we have retained the rights to develop and commercialize AKCEA-APOCIII-L_Rx and are no longer entitled to any future license fees, milestone payments or royalties from Novartis relating to AKCEA-APOCIII-L_Rx. In January 2020, we reported positive Phase 2 top line results from this program in the treatment of patients with hypertriglyceridemia. We and Ionis plan to initiate a Phase 3 clinical trial in FCS for this medicine in 2020 and we are evaluating additional rare and broader diseases that are associated with high triglyceride levels. AKCEA-APOCIII-L_Rx also has the potential to favorably impact numerous other risk factors independently associated with CVD. In the second quarter of 2020, we repurchased $2.3 million of AKCEA-APOCIII-L_Rx active pharmaceutical ingredient, or API, from Novartis to be used to further develop AKCEA-APOCIII-L_Rx.

In October 2019, we entered into a collaboration with Pfizer, which has a potential aggregate transaction value of up to $1.6 billion, plus royalties, which we will share equally with Ionis. The calculation of potential aggregate transaction value assumes that Pfizer successfully develops and achieves regulatory approval for vupanorsen in multiple indications in the U.S., E.U. and Japan, and that Pfizer achieves pre-specified sales targets with respect to vupanorsen. As part of this agreement, we received an upfront payment of $250.0 million from Pfizer in November 2019, of which we paid Ionis $125.0 million as a sublicense fee in the form of 6,873,344 shares of our common stock. In addition to the upfront payment, 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. Akcea has the right, at its option, to participate in commercialization activities with Pfizer in the United States and certain additional markets on pre-defined terms and based on meeting pre-defined criteria. We are also eligible to receive tiered royalties in the mid-teens to low twenty percent range on net sales of vupanorsen, 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 achieve the next payment of $75.0 million when Pfizer advances vupanorsen.

Our total revenue for the first six months of 2020 was $38.5 million. Our net loss for the first six months of 2020 was $92.4 million. Such net loss resulted from costs incurred in developing TEGSEDI, WAYLIVRA and the other medicines in our pipeline, commercializing TEGSEDI and WAYLIVRA and general and administrative activities associated with our operations, offset in part by our revenue and our loss sharing agreement with Ionis. 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.

As of June 30, 2020, we had cash, cash equivalents and investments of $389.9 million. We plan to use our cash, cash equivalents and investments on hand as of June 30, 2020 to further our commercialization efforts for TEGSEDI and WAYLIVRA and continue the advancement of our pipeline medicines.

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Our Relationship with Ionis

Ionis formed Akcea as a wholly owned subsidiary to complete development of and to commercialize Ionis’ medicines to treat lipid disorders. We began business operations in January 2015 and we licensed our cardiometabolic franchise from Ionis at the beginning of 2015. Prior to licensing these medicines, Ionis’ employees performed all of the development, regulatory and manufacturing activities for these medicines 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. We licensed TEGSEDI and AKCEA-TTR-L_Rx from Ionis in April 2018. Prior to this date, Ionis had been advancing these medicines in development and incurring the expenses for those activities. Under our license agreements with Ionis, Ionis continues to conduct certain development, regulatory and manufacturing activities for our medicines and charges us for this work. As of June 30, 2020, Ionis owned approximately 76 percent of our outstanding stock. As a result, we are controlled by Ionis and are a “controlled company” under the marketplace rules of the Nasdaq Stock Market, or Nasdaq.

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, 2019 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 June 30, 2020 and 2019

Revenue

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

	Three Months Ended June 30,
	2020		2019
Product revenue, net	$	16,364	$	9,865
Licensing revenue		—		6,036
Research and development and license revenue under    collaborative agreements		6,013		10,722
Total revenue	$	22,377	$	26,623

Product revenue. For the three months ended June 30, 2020, we recognized $16.4 million of product revenue from the sales of TEGSEDI in the U.S. and E.U. and sales of WAYLIVRA in the E.U. For the three months ended June 30, 2019, we recognized $9.9 million of product revenue from the sales of TEGSEDI in the U.S. and E.U.

Licensing revenue. For the three months ended June 30, 2020, we did not recognize any licensing revenue. For the three months ended June 30, 2019, we recognized $6.0 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 European Commission, or EC, in May 2019.

Research and development and license revenue. For the three months ended June 30, 2020, we recognized $6.0 million of research and development and license revenue primarily from our collaboration with Pfizer for vupanorsen. For the three months ended June 30, 2019, we recognized $10.7 million of research and development and license revenue related to our collaboration with Novartis for the AKCEA-APO(a)-L_Rx and AKCEA-APOCIII-L_Rx programs.

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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 June 30,
	2020		2019
Cost of sales - product	$	3,278	$	1,227
Cost of sales - intangible asset amortization		1,418		1,419
Cost of license		—		3,000
Total cost of sales, excluding non-cash    stock-based compensation expense		4,696		5,646
Non-cash stock-based compensation expense		350		137
Total cost of sales	$	5,046	$	5,783

Cost of sales - product. Product cost of sales was $3.3 million for the three months ended June 30, 2020, compared to $1.2 million for three months ended June 30, 2019, and consisted of period costs and certain fixed costs related to the sales of TEGSEDI and WAYLIVRA. We expense costs associated with the manufacture of our products as research and development expense prior to regulatory approval. Consequently, certain product costs of TEGSEDI and WAYLIVRA sold during the three months ended June 30, 2020 and 2019 were incurred prior to the regulatory approval for these products and therefore were not included in cost of sales during these periods. We expect cost of sales to increase as we deplete inventories that were previously expensed prior to regulatory approval. The cost of units sold during the period for which there was no cost basis was $0.4 million for the three months ended June 30, 2020 and $0.2 million for the three months ended June 30, 2019. All amounts described exclude non-cash compensation expense related to equity awards.

Cost of sales - intangible asset amortization. For each of the three months ended June 30, 2020 and 2019, intangible asset amortization was $1.4 million and 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. We did not incur any cost of license expense for the three months ended June 30, 2020. We incurred $3.0 million of cost of license related to a sub-license fee due to Ionis for the three months ended June 30, 2019 as a result of a milestone payment we earned under our license 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 June 30,
	2020		2019
External TEGSEDI expenses	$	1,999	$	820
External WAYLIVRA expenses		2,498		3,806
Loss share under TTR license agreement with Ionis    Pharmaceuticals		2,244		1,204
Other external research and development projects expenses		11,150		5,487
Research and development personnel and overhead expenses		8,356		6,391
Total research and development expenses, excluding non-cash    stock-based compensation expense		26,247		17,708
Non-cash stock-based compensation expense		3,484		2,563
Total research and development expenses	$	29,731	$	20,271

Research and development expenses were $26.2 million for the three months ended June 30, 2020 compared to $17.7 million for the same period in 2019. The increase in research and development expenses was primarily due to the acquisition of API in 2020 for vupanorsen to fulfill Pfizer’s exercised option to purchase additional vupanorsen and for the investment in AKCEA-APOCIII-L_Rx, and an increase in development activities related to AKCEA-TTR-L_Rx. These increases were partially offset by a decrease in development activities related to vupanorsen, WAYLIVRA and AKCEA-APOCIII-L_Rx. All amounts described 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 June 30,
	2020		2019
Selling, general and administrative expenses	$	29,852	$	39,077
Non-cash stock-based compensation expense		12,287		11,663
Total selling, general and administrative expenses	$	42,139	$	50,740

Selling, general and administrative expenses were $29.9 million for the three months ended June 30, 2020 compared to $39.1 million for the three months ended June 30, 2019. Our selling, general and administrative expenses decreased primarily due to the impact of the COVID-19 Pandemic and timing of commercial launch activities. All amounts described exclude non-cash compensation expense related to equity awards.

Net Loss Share

In accordance with the TTR License Agreement with Ionis, we share the net profit/loss related to TEGSEDI commercial activities. As we are the principal for all commercial activities, we record on a gross basis in the condensed consolidated statements of operations based on the nature of the activity, including revenues, cost of products sold and sales and marketing expenses. Ionis’ share of the net profit/loss is separately presented in the condensed consolidated statements of operations on the line titled “Net loss share from commercial activities under arrangement with Ionis Pharmaceuticals, Inc.” Since TEGSEDI commercial activities are currently generating a loss, this represents the amount Ionis owes us under the licensing agreement for their share of the net loss of TEGSEDI commercial activities during the period. For the three months ended June 30, 2020 and 2019, we recorded $3.4 million and $11.5 million of net loss share, respectively. This decrease in net loss share is due to an increase in product revenue for TEGSEDI and decrease in selling, general and administrative expenses as described above.

Other income and expense

Investment income. Investment income for the three months ended June 30, 2020 totaled $1.1 million compared to $1.6 million for the same period in 2019. The decrease in investment income was primarily due to lower interest rates on investments in high quality corporate debt and U.S. government agencies during 2020 compared to 2019.

Income tax benefit (expense)

We recorded an income tax benefit of $0.6 million for the three months ended June 30, 2020 compared to income tax expense of $0.2 million for the same period in 2019. The decrease in our income tax expense was primarily due to a reversal of tax expense recorded for the three months ended March 31, 2020 related to a decrease in estimated 2020 tax liability.

Net Loss and Net Loss Per Share

Net loss for the three months ended June 30, 2020 was $49.6 million compared to a net loss of $37.3 million for the same period in 2019. The increase in net loss was primarily due to the decreases in research and development and license revenue and licensing revenue and increase in research and development expense described above. This increase in net loss was partially offset by the increase in product revenue and a decrease in selling, general and administrative expenses described above. Basic and diluted net loss per common share owned by Ionis and owned by others for the three months ended June 30, 2020 were both $0.49. Basic and diluted net loss per common share owned by Ionis and owned by others for the three months ended June 30, 2019 were both $0.40.

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Comparison of the six months ended June 30, 2020 and 2019

Revenue

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

	Six Months Ended June 30,
	2020		2019
Product revenue, net	$	31,523	$	16,619
Licensing revenue		—		6,036
Research and development and license revenue under    collaborative agreements		6,928		167,784
Total revenue	$	38,451	$	190,439

Product revenue. For the six months ended June 30, 2020, we recognized $31.5 million of product revenue from the sales of TEGSEDI in the U.S. and E.U. and sales of WAYLIVRA in the E.U. For the six months ended June 30, 2019, we recognized $16.6 million of product revenue from the sales of TEGSEDI in the U.S. and E.U.

Licensing revenue. For the six months ended June 30, 2020, we did not recognize any licensing revenue. For the six months ended June 30, 2019, we recognized $6.0 million of licensing revenue from PTC Therapeutics pursuant to our PTC License Agreement. This revenue was recognized in connection with obtaining regulatory approval for WAYLIVRA from the EC in May 2019.

Research and development and license revenue. For the six months ended June 30, 2020, we recognized $6.9 million of research and development and license revenue primarily from our collaboration with Pfizer for vupanorsen. For the six months ended June 30, 2019, we recognized $167.8 million of research and development and license revenue related to our collaboration with Novartis. The decrease in research and development revenue was primarily the result of the $150.0 million license fee we received in the first quarter of 2019 from Novartis upon exercise of its option to license AKCEA-APO(a)-L_Rx.

Cost of sales and license expense

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

	Six Months Ended June 30,
	2020		2019
Cost of sales - product	$	6,405	$	2,150
Cost of sales - intangible asset amortization		2,837		2,822
Cost of license		—		3,000
Total cost of sales, excluding non-cash    stock-based compensation expense		9,242		7,972
Non-cash stock-based compensation expense		587		255
Total cost of sales	$	9,829	$	8,227

Cost of sales - product. Product cost of sales was $6.4 million for the six months ended June 30, 2020, compared to $2.2 million for the six months ended June 30, 2019, and consisted of period costs and certain fixed costs related to the sales of TEGSEDI and WAYLIVRA. We expense costs associated with the manufacture of our products as research and development expense prior to regulatory approval. Consequently, certain product costs of TEGSEDI and WAYLIVRA sold during the six months ended June 30, 2020 and 2019 were incurred prior to the regulatory approval for these products and therefore were not included in cost of sales during these periods. We expect cost of sales to increase as we deplete inventories that were previously expensed prior to regulatory approval. The cost of units sold during the period for which there was no cost basis was $1.0 million for the six months ended June 30, 2020 and $0.3 million for the six months ended June 30, 2019. All amounts described exclude non-cash compensation expense related to equity awards.

Cost of sales - intangible asset amortization. For each of the six months ended June 30, 2020 and 2019, intangible asset amortization was $2.8 million and consisted of amortization of intangible assets recorded as a result of the achievement of TEGSEDI regulatory milestones in the U.S. and E.U.

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Cost of license. We did not incur any cost of license for the six months ended June 30, 2020. We incurred $3.0 million for cost of license related to a sub-license fee due to Ionis for the six months ended June 30, 2019 as a result of a milestone payment earned as part of the license agreement with PTC Therapeutics.

Research and development expense

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

	Six Months Ended June 30,
	2020		2019
External TEGSEDI expenses	$	4,102	$	3,647
External WAYLIVRA expenses		3,623		6,093
Loss share under TTR license agreement with Ionis    Pharmaceuticals		3,418		408
Other external research and development projects expenses		13,217		12,503
Research and development personnel and overhead expenses		17,893		15,755
Sublicensing expenses		—		75,000
Total research and development expenses, excluding non-cash    stock-based compensation expense		42,253		113,406
Non-cash stock-based compensation expense		4,833		6,484
Total research and development expenses	$	47,086	$	119,890

Research and development expenses were $42.3 million for the six months ended June 30, 2020 compared to $113.4 million for the same period in 2019. The decrease 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 and a decrease in development activities related to vupanorsen, WAYLIVRA and AKCEA-APOCIII-L_Rx. This was offset by the acquisition of API for vupanorsen to fulfill Pfizer’s exercised option to purchase additional vupanorsen and for the investment in AKCEA-APOCIII-L_Rx in the second quarter of 2020, as well as an increase in development activities related to AKCEA-TTR-L_Rx. All amounts described exclude non-cash compensation expense related to equity awards.

Non-cash stock-based compensation expense decreased for the six months ended June 30, 2020 compared to the six months ended June 30, 2019 due to an increase in estimated forfeitures.

Selling, general and administrative expense

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

	Six Months Ended June 30,
	2020		2019
Selling, general and administrative expenses	$	70,403	$	69,158
Non-cash stock-based compensation expense		17,982		26,184
Total selling, general and administrative expenses	$	88,385	$	95,342

Selling, general and administrative expenses were $70.4 million for the six months ended June 30, 2020 compared to $69.2 million for the six months ended June 30, 2019. Our selling, general and administrative expenses remained relatively consistent. In the first quarter of 2020, we increased our level of commercialization activities to continue to increase the presence of TEGSEDI in the U.S., E.U. and Canada, and WAYLIVRA in the E.U. Selling, general and administrative expenses decreased in the second quarter of 2020 primarily a result of the COVID-19 Pandemic and timing of commercial launch activities, which mostly offset the increase in expenses in the first quarter of 2020 compared to 2019. All amounts described exclude non-cash compensation expense related to equity awards.

Non-cash stock-based compensation expense decreased for the six months ended June 30, 2020 compared to the six months ended June 30, 2019 due to the departures of certain members of senior management and certain members of our board of directors, as well as an increase in our forfeiture rate estimates.

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Net Loss Share

In accordance with the TTR License Agreement with Ionis, we share the net profit/loss related to TEGSEDI commercial activities. As we are the principal for all commercial activities, we record on a gross basis in the condensed consolidated statements of operations based on the nature of the activity, including revenues, cost of products sold and sales and marketing expenses. Ionis’ share of the net profit/loss is separately presented in the condensed consolidated statements of operations on the line titled “Net loss share from commercial activities under arrangement with Ionis Pharmaceuticals, Inc.” Since TEGSEDI commercial activities are currently generating a loss, this represents the amount Ionis owes us under the licensing agreement for their share of the net loss of TEGSEDI commercial activities during the period. For the six months ended June 30, 2020 and 2019, we recorded $10.5 million and $20.5 million of net loss share, respectively. This decrease in net loss share is due to an increase in product revenue for TEGSEDI and decrease in selling, general and administrative expenses as described above.

Other income and other expense

Investment income. Investment income for the six months ended June 30, 2020 and 2019 both totaled $2.8 million. Investment income remained consistent primarily due to a higher average investment balance which was offset by lower interest rates on investments in high quality corporate debt and U.S. government agencies investments during 2020 compared to 2019.

Income tax benefit (expense)

We recorded an income tax benefit of $1.4 million for the six months ended June 30, 2020 compared to income tax expense of $0.3 million for the same period in 2019. We recorded an income tax benefit for the six months ended June 30, 2020 primarily due to the tax benefit of $1.7 million related to the Coronavirus, Aid, Relief and Economic Security Act, or CARES Act, signed into law on March 27, 2020, which was partially offset by income tax expense related to taxable income earned in certain foreign jurisdictions.

Under the Tax Cut and Jobs Act of 2017, or the Tax Act, federal net operating losses incurred in 2018 and in future years could be carried forward indefinitely, but the deductibility of such federal net operating losses was limited. The CARES Act temporarily removes the limitation on net operating loss deductions, resulting in the $1.7 million tax benefit. The limitation on the deductibility of federal net operating losses is reinstated for tax years beginning after 2020.

Net Loss and Net Loss Per Share

Net loss for the six months ended June 30, 2020 was $92.4 million compared to net loss of $10.1 million for the same period in 2019. This increase in net loss was primarily due to the $150.0 million license fee we received from Novartis in 2019 related to Novartis’ exercise of its option to license AKCEA-APO(a)- L_Rx of which $75.0 million was net of the sublicense fee due to Ionis. A similar transaction did not occur in 2020. Basic and diluted net loss per common share owned by Ionis and owned by others for the six months ended June 30, 2020 were both $0.91. Basic and diluted net loss per common share owned by Ionis and owned by others for the six months ended June 30, 2019 was $0.06 and $0.26, respectively.

Liquidity and Capital Resources

At June 30, 2020 we had cash, cash equivalents and investments of $389.9 million and an accumulated deficit of $573.7 million compared to cash, cash equivalents and investments of $463.7 million and an accumulated deficit of $481.3 million at December 31, 2019.

At June 30, 2020, we had working capital of $393.0 million compared to working capital of $454.9 million at December 31, 2019. Working capital decreased in 2020 primarily due to a decrease in cash used for operating activities. As of June 30, 2020, our payable to Ionis under our agreements was $5.3 million.

In February 2019, we earned a license fee of $150.0 million related to Novartis’ option exercise of AKCEA-APO(a)-L_Rx, of which we owed Ionis $75.0 million as a sublicense fee that we settled through the issuance of 2,837,373 shares of our common stock in March 2019. See Note 4, Revenue from Collaboration and License Agreements, and Note 9, 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 License Agreement with Ionis.

In October 2019, we entered into an agreement with Pfizer for the development and commercialization of vupanorsen as discussed in Note 4, Revenue from Collaboration and License Agreements. As a result, we received a license fee of $250.0 million in November 2019 we issued 6,873,344 shares of our common stock to Ionis as payment of the related $125.0 million sublicense fee.

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TEGSEDI is approved in the U.S., E.U., Canada and Brazil and we are continuing our commercialization efforts in these regions. We began to generate product revenue from TEGSEDI sales in the fourth quarter of 2018. WAYLIVRA is approved in the E.U. and we are advancing our commercialization efforts in that region. We began to generate product revenue from WAYLIVRA 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 medicines. We are subject to all of the risks incident in developing and commercializing new medicines 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 $389.9 million as of June 30, 2020, together with cash expected to be generated from sales of TEGSEDI and WAYLIVRA, 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. Until such time, if ever, as we can generate substantial revenue, we may finance our cash needs through additional financing in the future including, but not limited to, through the issuance of our common stock, other equity or debt financings or collaborations or partnerships with other companies. In any event, we may not generate significant revenue from product sales or our license and collaboration agreements prior to the use of our existing cash, cash equivalents and investments. We do not have any committed external sources of funds. We cannot provide assurances that financing will be available when and as needed, particularly if the COVID-19 Pandemic continues to disrupt global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity, or that, if available, the financings will be on favorable or acceptable terms. If we are unable to obtain additional financing when and if we require it, this could have a material adverse effect on our business and results of operations. To the extent we issue additional equity securities, our existing stockholders could experience a dilution of their ownership and such dilution could be substantial.

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

• 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;

• other potential delays in commercializing or marketing our products related to the COVID-19 Pandemic, including delays in receiving regulatory approvals by the FDA and comparable foreign regulatory authorities, delays in necessary interactions with local and foreign regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government employees, or refusals to accept data from clinical trials conducted in affected geographies;

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

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

• the effect of competing technological and market developments;

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

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

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

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

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.

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Contractual Obligations and Commitments

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, 2019, as filed with the SEC on March 2, 2020.

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 Standard & Poor's, Moody's or Fitch, respectively. We have established guidelines relative to diversification and maturities that are designed to maintain liquidity and mitigate risk. We periodically review and modify these guidelines to maximize trends in yields and interest rates without compromising 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 Limited, Akcea Therapeutics Canada, Inc., Akcea Therapeutics France SAS, Akcea Therapeutics Germany GmbH, Akcea Therapeutics Ireland Limited, Akcea Therapeutics Portugal, Unipessoal Lda, Akcea Therapeutics Italia S.R.L., and Akcea Therapeutics Spain, S.L., with functional currencies other than the U.S. dollar. We created these foreign subsidiaries to support our 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 financial results is immaterial to our condensed consolidated financial statements. The impact of foreign currency exchange rate fluctuations may become more substantial in the future if the operations of our foreign entities expand.

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.

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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 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 interim 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 Chief Executive Officer and Chief Financial Officer. Based on our evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2020. There have been no significant changes in our internal controls or in other factors that could significantly affect internal controls as of June 30, 2020.

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 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 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 is also 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

On July 16, 2020, a purported Company stockholder filed an action in the Delaware Court of Chancery captioned John Makris, et al. v. Stanley T. Crooke, et al., C.A. No. 2020-0587, or the “Delaware Action.” The plaintiff in the Delaware Action asserts claims against (i) current and former members of our board of directors; and (ii) Ionis Pharmaceuticals, Inc., or collectively, the Defendants. The plaintiff asserts derivative claims on behalf of Akcea, which is a nominal defendant in the Delaware Action, as well as putatively direct claims on behalf of a purported class of our stockholders. The plaintiff in the Delaware action asserts that the Defendants breached their fiduciary duties in connection with the licensing transaction that we and Ionis entered into regarding inotersen and AKCEA-TTR-L_Rx. The plaintiff also asserts an unjust enrichment claim against Ionis. The plaintiff’s claims are similar to those asserted in a prior action in the Delaware Court of Chancery captioned City of Cambridge Retirement System v. Crooke, et al., C.A. No. 2019-0905, which was dismissed with prejudice to the named plaintiff only on April 8, 2020. We believe that the claims asserted in the Delaware Action are without merit and anticipate filing a motion to dismiss the claims.

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, 2019.

Risks Related to the COVID-19 Pandemic

Our business could be materially adversely affected by the effects of health epidemics. To date, we believe the impacts of the COVID-19 Pandemic on our business are limited and manageable.*

Our business could be materially adversely affected by health epidemics in regions where we are commercializing TEGSEDI and WAYLIVRA, and where we have concentrations of clinical trial sites or other business operations and could cause significant disruption in the operations of third-party manufacturers and contract research organizations upon whom we rely. For example, since December 2019, a novel strain of coronavirus, SARS-CoV-2, causing a disease referred to as COVID-19, has spread worldwide. In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic, or the COVID-19 Pandemic, and the United States, or U.S., government-imposed travel restrictions on travel between the U.S., Europe and certain other countries. In addition, the Governor of the Commonwealth of Massachusetts and the Governor of the State of California, the states in which our headquarters and other offices are located, respectively, each declared a state of emergency related to the spread of COVID-19 and issued executive orders that directed residents to stay at home.

In response to these public health directives and orders, we implemented work-from-home policies for our employees and generally suspended business-related travel. During the second quarter of 2020, some states have begun lifting restrictions and permitting certain offices to reopen, including the Commonwealth of Massachusetts and the State of California. However, out of an abundance of caution and to continue to protect the health and welfare of our employees, we continue to maintain work-from-home policies for our employees. The effects of these orders and our work-from-home and travel policies have thus far had a limited impact on our business.

These public health directives and orders have also impacted our sales efforts. For example, some physician and hospital policies that have been put in place as a result of the COVID-19 Pandemic restrict in-person access by third parties, which has in some cases impacted our commercialization efforts for TEGSEDI and WAYLIVRA. These and similar, and perhaps more severe, disruptions in our commercial operations could materially impact our business, operating results and financial condition in the future.

Quarantines, shelter-in-place, executive and similar government orders, or the perception that such orders, shutdowns or other restrictions on the conduct of business operations could occur, could impact personnel at third-party manufacturing facilities in the U.S. and other countries, or the availability or cost of materials, which would disrupt our supply chain.

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We have experienced impacts to our clinical trial operations due to the COVID-19 Pandemic; however, we believe such impacts are limited and manageable. Some examples of these impacts include:

• we have experienced some impact on clinical site initiation and patient enrollment due to restrictions imposed as a result of the COVID-19 Pandemic;

o For example, in March 2020, we instituted a temporary suspension of enrollment for new subjects in our Phase 3 studies of AKCEA-TTR-L_Rx based on advice from our trial advisory committee; however, enrollment has resumed as sites have come back online as local and regional restrictions have eased

• some patients have not been able to comply with clinical trial protocols as quarantines have impeded patient movement and interrupted healthcare services;

• we have experienced some impact on our ability to recruit and retain patients and principal investigators and site staff who, as healthcare providers, may have heightened exposure to COVID-19; and

• we have experienced some delays in necessary interactions with regulators, ethics committees and other important agencies and contractors due to limitations in employee resources or forced furlough of government or contractor personnel.

The spread of COVID-19 has caused a broad impact globally. While the potential economic impact brought by, and the duration of, the COVID-19 Pandemic may be difficult to assess or predict, it could result in significant disruption of global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity. In addition, a recession or market correction resulting from the spread of COVID-19 could materially affect our business and has and can continue to affect the value of our securities.

The global COVID-19 Pandemic continues to rapidly evolve. While we have not yet experienced material adverse effects on our business as a result of the COVID-19 Pandemic, the ultimate impact of the COVID-19 Pandemic or a similar health epidemic is highly uncertain and subject to change. As such, we do not yet know the full extent of delays or impacts on our business, our clinical trials, healthcare systems or the global economy as a whole. However, these effects could have a material impact on our operations, and we will continue to monitor the COVID-19 situation closely.

Risks Related to Commercialization of Our Medicines

If we cannot optimize and maintain effective marketing and sales capabilities or enter into agreements with third parties to market and sell TEGSEDI and WAYLIVRA, we may not generate significant product revenue from TEGSEDI or WAYLIVRA.*

To successfully commercialize TEGSEDI and WAYLIVRA, we must obtain adequate coverage and reimbursement from third party payors and 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 are pursuing 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.

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 when we commercialize additional medicines, if approved. We may never successfully optimize or manage this capability and any failure could harm the commercialization of WAYLIVRA or adversely affect TEGSEDI sales. Additionally, we and our partners, if any, 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 complete response letter, or CRL, from the U.S. Food and Drug Administration, or 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 the business. In connection with this reorganization plan, we reduced our workforce by approximately 12% and will need to increase our operations and expand our use of third-party contractors if WAYLIVRA is approved in the United States.

We have incurred expenses commercializing, optimizing and managing the marketing and sales infrastructure for TEGSEDI in the E.U., Canada and the U.S. and WAYLIVRA in the European Union, or E.U. 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.

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To the extent we and Ionis 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 we 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.

If we cannot effectively optimize 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 TEGSEDI and WAYLIVRA may be adversely affected. 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.

In response to the public health directives and orders related to the COVID-19 Pandemic, we implemented work-from-home policies for our employees globally and have generally suspended business-related travel. The effects of these government orders and our work-from-home and travel policies in response to the COVID-19 Pandemic have thus far had a limited impact on our productivity, business and commercialization efforts for TEGSEDI and WAYLIVRA, but the effects of these orders and policies may become more significant in the future.

If we are unable to rely on third-party specialty channels to distribute our medicines 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 medicines 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 commercial launch by us of AKCEA-APOCIII-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 medicines or complaints regarding our medicines;

• not effectively commercialize or support TEGSEDI, WAYLIVRA or our other medicines;

• reduce or discontinue their efforts to commercialize or support TEGSEDI, WAYLIVRA or our other medicines;

• not devote the resources necessary to commercialize TEGSEDI, WAYLIVRA or our other medicines in the volumes and within the time frames that we expect, including as a result of the COVID-19 Pandemic;

• 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 medicines, including TEGSEDI, WAYLIVRA and our medicines 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 European Commission, or EC, Health Canada and ANVISA 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 U.S. or Canada or for additional indications and our medicines in development, our success will depend upon the medical community, patients and third-party payers accepting our medicines as medically useful, cost-effective, safe and convenient. Even if the FDA or foreign regulatory authorities authorize our medicines for commercialization, doctors may not prescribe our medicines to treat patients. We and our partners may not successfully commercialize additional medicines.

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

The degree of market acceptance for TEGSEDI, WAYLIVRA and our medicines 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 medicines and their potential advantages over competing products;

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

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

• reimbursement by government and third-party payers.

Based on the profile of our medicines, physicians, patients, patient advocates, payers or the medical community in general may not accept and/or use any medicines 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 regular blood monitoring. In each case, these label requirements could negatively affect our ability to attract and retain patients for these medicines. 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, including due to limitations or restrictions on our ability to conduct periodic blood and urine monitoring of our patients as a result of the COVID-19 Pandemic, we may not be able to generate substantial revenue from TEGSEDI and WAYLIVRA sales.

The patient populations suffering from familial chylomicronemia syndrome, or FCS, 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 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, 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 are small, the per-patient medicine 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 size of the patient population is 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.

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If we or our partners fail to compete effectively, WAYLIVRA, TEGSEDI and our medicines 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 medicines that are:

• safer than our medicines;

• more effective than our medicines;

• priced lower than our medicines;

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

• more convenient to use than our medicines.

These competitive developments could make WAYLIVRA, TEGSEDI and our medicines in development, obsolete or non-competitive. Further, all of our medicines 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, and as a result they may be less affected than we are by operational and other disruptions related to the COVID-19 Pandemic. 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 medicines, 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 medicines in our development pipeline. For example:

• WAYLIVRA and AKCEA-APOCIII-L_Rx could face competition from metreleptin, a medicine produced by Amryt Pharma, plc, which is currently approved in the U.S. and E.U. for use in generalized lipodystrophy patients. WAYLIVRA and AKCEA-APOCIII-L_Rx may also compete with gemcabene, an oral small molecule that reduces apoC-III, that NeuroBo Pharmaceuticals, Inc. is developing to treat patients with triglycerides above 500 mg/dL. In addition, Arrowhead Pharmaceuticals is developing the medicine, ARO-APOC3 for the treatment of hypertriglyceridemia and FCS, which could compete with WAYLIVRA and AKCEA-APOCIII-L_Rx.

• TEGSEDI and AKCEA-TTR-L_Rx face competition from medicines 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 multiple geographies for a similar and broader indication as TEGSEDI. AG10, which recently completed its Phase 2 dose-finding clinical trial, is an orally administered TTR tetramer stabilizer for ATTR amyloidosis. In addition, Alnylam is also developing a next generation RNAi medicine, vutrisiran, which is currently in Phase 3 clinical development in hATTR amyloidosis with polyneuropathy and cardiomyopathy and wtATTR-CM. Vutrisiran may compete with TEGSEDI and AKCEA-TTR-L_Rx.

• Vupanorsen (AKCEA-ANGPTL3-L_Rx) may compete with Evinacumab, a monoclonal antibody that binds to ANGPTL3 that Regeneron Pharmaceuticals, Inc. is currently developing in Phase 3 for the treatment of homozygous familial hypercholesterolemia, or HoFH.

• AKCEA-APO(a)-L_Rx could face competition from AMG890, formerly referred to as ARO-LPA. AMG890 is being developed by Arrowhead and Amgen for the same target as AKCEA-APO(a)-L_Rx.  

If WAYLIVRA, TEGSEDI or the other medicines in our pipeline cannot compete effectively with these and other products with common or similar indications to the medicines in our pipeline, we may not be able to generate substantial revenue from our product sales.

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If government or other third-party payers fail to provide adequate coverage and payment rates for TEGSEDI, WAYLIVRA and our medicines 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 payers. The majority of patients in the United States who would fit within our target patient populations for our medicines 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 medicines 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 medicines affordable. Accordingly, TEGSEDI, and WAYLIVRA for FCS in the E.U. and, if approved, WAYLIVRA in the U.S. or Canada and for additional indications, and our medicines in development, will face competition from other therapies and medicines 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 payers. These studies might require us to commit a significant amount of management time and financial and other resources. Third-party payers 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 payers, 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 medicines exists among third-party payers. Therefore, coverage and reimbursement for medicines can differ significantly from payer to payer. For example, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the Affordable Care Act, was passed in March 2010, and substantially changed the way healthcare is financed by both governmental and private insurers, and continues to significantly impact the U.S. pharmaceutical industry. There remain judicial and Congressional challenges to certain aspects of the Affordable Care Act, as well as efforts by the Trump administration to repeal or replace certain aspects of the Affordable Care Act. On December 18, 2019, the U.S. Court of Appeals for the 5th Circuit upheld a District Court ruling that the individual mandate was unconstitutional and remanded the case back to the District Court to determine whether the remaining provisions of the Affordable Care Act are invalid as well. However, in March 2020, before the District Court could rule on the remaining provisions of the Affordable Care Act, the U.S. Supreme Court agreed to review the case. The Supreme Court is expected to rule on the case in its next session, which begins in October 2020. It is unclear how such litigation and other efforts to repeal and replace the Affordable Care Act will impact the Affordable Care Act and our business. 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 legislation designed to, among other things, reform government program reimbursement methodologies for medicines and bring more transparency to medicine pricing. At the federal level, the Trump administration’s budget proposal for fiscal year 2021 includes a $135 billion allowance to support legislative proposals seeking to reduce drug prices, increase competition, lower out-of-pocket drug costs for patients, and increase patient access to lower-cost generic and biosimilar drugs. On March 10, 2020, the Trump administration sent “principles” for drug pricing to Congress, calling for legislation that would, among other things, cap Medicare Part D beneficiary out-of-pocket pharmacy expenses, provide an option to cap Medicare Part D beneficiary monthly out-of-pocket expenses, and place limits on pharmaceutical price increases. On July 24, 2020, President Trump announced four executive orders related to prescription drug pricing that attempt to implement several of the administration’s proposals, including a policy that would tie Medicare Part B drug prices to international drug prices; one that directs the U.S. Department of Health and Human Services, or HHS, to finalize the Canadian drug importation proposed rule previously issued by HHS and makes other changes allowing for personal importation of drugs from Canada; one that directs HHS to finalize the rulemaking process on modifying the anti-kickback law safe harbors for plans, pharmacies, and pharmaceutical benefit managers; and one that reduces costs of insulin and epipens to patients of federally qualified health centers. At the state level, legislatures have increasingly passed legislation and implemented regulations designed to control pharmaceutical and biological product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures, and, in some cases, designed to encourage importation from other countries and bulk purchasing. Third-party coverage and reimbursement for our products or medicines may not be available or adequate in either the United States or international markets, and third-party payers, whether foreign or domestic, or governmental or commercial, may allocate their resources to address the COVID-19 Pandemic or experience delays or disruptions in their ability to devote resources to coverage and reimbursement matters related to our products or medicines as a result of the COVID-19 Pandemic, 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 medicine. Due to the breadth of the statutory and regulatory provisions and the narrowness of the statutory exceptions and regulatory safe harbors available, 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. For example, the intent standard under the federal Anti-Kickback Statute was amended by the Affordable Care Act, to a stricter standard such that a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation. Further, the Affordable Care Act codified case law that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the civil False Claims Act. In addition, false claims laws, including the civil False Claims Act, prohibit anyone from, among other things, knowingly and willingly presenting, or causing to be presented for payment, to government third-party payers, including Medicare and Medicaid claims for reimbursed medicines that are false or fraudulent, claims for items or services not provided as claimed, or claims for medically unnecessary items or services. Our activities, including those relating to the sale and marketing of our products may be subject to scrutiny under these healthcare fraud and abuse laws. If we violated such laws, we could face a combination of:

• significant administrative, criminal and civil sanctions, including fines, disgorgement, imprisonment 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 employees, including 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 through civil whistleblower or qui tam actions on behalf of the government and such individuals and may share in amounts paid by the entity to the government in recovery or settlement. 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. 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. In addition, the Physician Payments Sunshine Act, requires certain manufacturers of medicines, devices, biologic and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, certain information related to payments and other transfers of value to physicians, as defined by such law, and teaching hospitals, and ownership and investment interests held by physicians and their immediate family members. TEGSEDI commercially launched in the U.S. in the fourth quarter of 2018 and as such we are now required to report annually to CMS certain information related to payments and other transfers of value we may provide to physicians and teaching hospitals. Beginning in 2022, we will also be required to report information related to payments and other transfers of value provided, or ownership or investment interests held, during the previous year to certain other healthcare professionals. Further, an increasing number of state and local laws require manufacturers to report certain pricing and marketing information. Certain states also require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government; and require the registration of pharmaceutical sales representatives. If we do not fully comply with such laws, many of which may differ from each other in significant ways, thus complicating compliance efforts, we could be subject to the penalty provisions of the pertinent state and local 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 the international commercialization partners we may have could harm us.

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Risks Related to Our Business and Industry

We will need to optimize the size of our organization, and we may experience difficulties in managing optimization.*

We are currently a small company. To continue the commercialization of TEGSEDI and WAYLIVRA, and to commercialize our medicines in development that we are responsible for commercializing, we will need to optimize our operations and expand our use of third-party contractors. We plan to continue to optimize 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 commercializing TEGSEDI and WAYLIVRA. We have added a significant number of new employees to our sales and marketing capability to commercialize TEGSEDI and WAYLIVRA.

We may also anticipate needs for growth that do not materialize. For example, in anticipation of WAYLIVRA’s potential approval, in the second half of 2017, we added a significant number of new employees to our sales and marketing functions to prepare to commercialize WAYLIVRA. However, 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 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.

The current and future growth or optimization 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 or optimize our general and administrative capabilities. Our current management, personnel and systems may not be adequate to support this growth or optimization. Our future financial performance and our ability to commercialize our medicines and to compete effectively will depend, in part, on our ability to manage any future growth or optimization effectively. To that end, we must be able to:

• manage the manufacturing of our medicines 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 medicines in development;

• manage our clinical studies and the regulatory process effectively;

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

• hire and train additional qualified personnel; and

• identify and mitigate the risks of the COVID-19 Pandemic on our efforts to commercialize TEGSEDI and WAYLIVRA.

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 medicine 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 commercialize a medicine. We base our estimates on present facts and a variety of assumptions, many of which are outside of our control, including the effects of the current COVID-19 Pandemic. If we do not achieve milestones in accordance with our or our investors' or securities analysts' expectations, including milestones related to WAYLIVRA, TEGSEDI and our medicines in development, the price of our securities could decrease.

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The loss of key personnel, or an inability to 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 medicines may make it more challenging to recruit and retain qualified personnel.

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 and our medicines in development. We have clinical study insurance coverage and commercial product liability insurance coverage. In addition, Novartis Pharma AG, or Novartis, has agreed to indemnify us against specific claims arising from Novartis' development and commercialization of AKCEA-APO(a)-L_Rx, 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, and Pfizer Inc., or Pfizer, has agreed to indemnify us against specific claims arising from Pfizer’s development and commercialization of vupanorsen. 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 medicines, 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 medicines internationally could materially adversely affect our business.*

In addition to our U.S. operations, we are commercializing TEGSEDI in the E.U. 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 medicines 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;

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• 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;

• 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, political instability or public health issues or pandemics, such as the current COVID-19 Pandemic, in particular foreign countries or globally;

• 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 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 U.K., voted to leave the E.U. in an advisory referendum, which is generally referred to as Brexit. In January 2020, the U.K. and E.U. entered into a withdrawal agreement pursuant to which the U.K. formally withdrew from the E.U. on January 31, 2020. Following such withdrawal, the U.K. entered into a transition period scheduled to end on December 31, 2020, or the Transition Period. During the Transition Period, the U.K. will remain subject to E.U. law and maintain access to the E.U. single market and to the global trade deals negotiated by the E.U. on behalf of its members. During the Transition Period, negotiations are expected to continue in relation to the future customs and trading relationship between the U.K. and the E.U. following the expiry of the Transition Period. Due to the COVID-19 Pandemic, negotiations between the U.K. and the E.U. that have been scheduled since March have either been postponed or occurring in a reduced forum via video conference. There is, therefore, an increased likelihood that the Transition Period may need to be extended beyond December 31, 2020 (although it remains the position of the U.K. government that it will not be extended).

In addition, as a result of Brexit, the European Medicines Agency, or EMA, formerly situated in London, relocated to Amsterdam. Following the Transition Period, 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 U.K. and E.U.’s intertwined legal regimes as to how Brexit (following the Transition Period) 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 U.K.’s relationship with the E.U. is governed post‑Brexit. For example, following the Transition Period, the U.K. 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 medicines, including our product candidates, will be required in the U.K., the potential process for which is currently unclear. Brexit may adversely affect and delay our ability to commercialize and market our product candidates in the U.K. Brexit may also result in a reduction of funding to the EMA if the U.K. no longer makes financial contributions to European institutions, such as the EMA. If U.K. 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 medicines.

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, we rely 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 medicines 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, pandemics, 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, with third-party phishing and social engineering attacks in particular increasing in connection with the COVID-19 Pandemic. 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 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 medicines 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:

• obtaining market acceptance of TEGSEDI and WAYLIVRA, and, if approved, our other medicines in development as viable treatment options;

• obtaining and maintaining adequate coverage and reimbursement from third-party payors for TEGSEDI and WAYLIVRA and, if approved, our other medicines in development;

• completing nonclinical and clinical development of AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx, vupanorsen and AKCEA-APOCIII-L_Rx;

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• seeking and obtaining initial or additional regulatory and marketing authorizations for our medicines;

• 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 our other medicines in development;

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

• co-commercializing AKCEA-APO(a)-L_Rx through our collaboration with Novartis under terms that we may negotiate with Novartis in the future;

• co-commercializing vupanorsen through our collaboration with Pfizer;

• educating physicians about our target patient populations, including the polyneuropathy of hereditary transthyretin-mediated amyloidosis in adult patients in the United States or U.S., 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;

• 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, if approved, commercializing our medicines 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 experienced significant turnover in our top executives, and our business could be adversely affected by these and other transitions in our senior management team.*

Since September 2019, several changes have occurred to our senior leadership team, including the departure of our Chief Executive Officer, our President, our Chief Operating Officer, our Chief Financial Officer, and the retirement of our Chief Medical Officer. We have appointed a new Chief Executive Officer, a new Chief Commercial Officer, a new Chief Operating Officer, a General Counsel, a new Chief Financial Officer, and a new Chief Medical 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.

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 have mostly incurred losses since our inception.*

Because medicine 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 $92.4 million for the six months ended June 30, 2020 compared to a net loss of $10.1 million for the six months ended June 30, 2019. The primary difference is due to the $150.0 million license fee related to Novartis’ exercise of its option to license AKCEA-APO(a)-L_Rx in February 2019. As of June 30, 2020, we had an accumulated deficit of approximately $573.7 million. Most of the losses resulted from costs incurred in connection with our development programs and from general and administrative costs associated with our operations. We expect to incur additional operating losses for the foreseeable future, and these losses may increase if we cannot generate substantial revenue.

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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 medicine programs, except TEGSEDI in the U.S., E.U., Canada and Brazil, 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 FDA, the EMA, or other regulatory authorities require us to perform clinical studies and other studies in addition to those that we currently anticipate. As of June 30, 2020, we had cash, cash equivalents and investments equal to $389.9 million and our operating expenses were $134.8 million for the six months ended June 30, 2020. We do not have any committed external sources of funds. We cannot provide assurances that financing will be available when and as needed, particularly if the COVID-19 Pandemic continues to disrupt global financial markets, reducing our ability to access capital, which could in the future negatively affect our liquidity.

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, which terminated in 2017. We do not have any firm commitment from Ionis to fund our cash flow deficits or provide other direct or indirect financial 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 9, 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 in March 2019 to Ionis as payment of a $75.0 million sublicense fee, as discussed in Note 4, Revenue from Collaboration and License Agreements and Note 9, License Agreements and Services Agreement with Ionis, to our condensed consolidated financial statements included in this Quarterly Report on Form 10-Q. In November 2019, we received $250.0 million in connection with the Pfizer license agreement for the development and commercialization of vupanorsen, for which we issued 6,873,344 shares of our common stock in December 2019 to Ionis as payment of a $125.0 million sublicense fee, as discussed in Note 4, Revenue from Collaboration and License Agreements and Note 9, 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 medicines in our pipeline and to seek regulatory approval for and to continue to commercialize TEGSEDI, WAYLIVRA and other medicines 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 U.S., from the EC in the E.U., and from Health Canada in 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 commercialize our medicines in development, 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.

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

If the results of clinical testing indicate that any of our medicines 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 medicines is high. Antisense medicines are a relatively new approach to therapeutics. If we cannot demonstrate that our medicines 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 medicines in clinical studies do not show sufficient safety and efficacy in patients with the targeted indication, it would negatively affect our development and commercialization goals for the medicine and we would have expended significant resources with little or no benefit to us.

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Even if our medicines are successful in preclinical and earlier-stage clinical studies, the medicines 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 medicines in development, may not predict the results of subsequent clinical studies, including the Phase 3 clinical trial of AKCEA-APO(a)-L_Rx or the Phase 3 clinical trials of AKCEA-TTR-L_Rx. 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 medicine 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, including Ionis, our independent clinical investigators, contract research organizations and other third-party service providers on which we rely, may not identify, recruit and train suitable clinical investigators at a sufficient number of study sites or timely enroll a sufficient number of study subjects in the clinical study;

• 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 medicines;

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

• we may continue to experience delays or disruptions in the clinical study due to the COVID-19 Pandemic, affecting Ionis’ or our third-party service providers’ ability to conduct the clinical study for our medicines.

The current COVID-19 Pandemic could make some of these factors more likely to occur.

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 medicines, including WAYLIVRA, AKCEA-APO(a)-L_Rx, vupanorsen and AKCEA-APOCIII-L_Rx, are chemically similar to each other and the medicines 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 medicines could have or be perceived by a regulatory authority to have an impact on a different medicine 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 medicines 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 medicines: 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 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 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 medicines in development could reduce the commercial potential or viability of our medicines.

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We may not have appropriately designed the planned and ongoing clinical studies for our medicines 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, vupanorsen 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 change from baseline in mNIS+7 composite score, a measure of neurologic impairment that evaluates muscle weakness, sensation, reflexes, nerve conduction, and autonomic function for AKCEA-TTR-L_rx in patients with hereditary transthyretin-mediated amyloid polyneuropathy, achievement of the primary endpoint of composite outcome of cardiovascular mortality and frequency of cardiovascular events for AKCEA-TTR-L_rx in patients with transthyretin-mediated amyloid cardiomyopathy, 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 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 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 and our other medicines in development are more likely to occur since we are developing our medicines 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 medicines in development. Any failure to obtain additional regulatory approvals for WAYLIVRA and initial regulatory approvals for our other medicines 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.

Clinical studies for our medicines in development 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 lowering therapy has been inadequate. Despite this 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 or our partners are conducting or intend to conduct clinical studies for AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx, vupanorsen and AKCEA-APOCIII-L_Rx.

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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 or our partners have not tested WAYLIVRA for additional indications, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx, vupanorsen and AKCEA-APOCIII-L_Rx in a sufficient number of patients to demonstrate that the medicine 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 medicine.

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 medicines 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 medicines 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 medicines 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 medicines. 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 medicines 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 medicines in development, the authority will not approve the specific medicine or will require additional studies, which can be time consuming and expensive and which will delay or harm our ability to successfully commercialize the medicine. 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.

The FDA or other comparable foreign regulatory authorities can delay, limit or deny approval of a medicine 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 medicine 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 medicine'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;

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

• 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; and

• such authorities may experience a disruption in their operations and personnel, which may diminish or delay their ability to evaluate our medicines.

Failure to successfully develop our medicines in development, or to receive marketing authorization for our medicines in important markets or delays in these authorizations would prevent or delay the commercialization of the medicine, 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 medicines.*

The FDA and EMA have granted orphan drug designation to TEGSEDI for the treatment of patients with polyneuropathy due to hATTR amyloidosis and to WAYLIVRA for the treatment of patients with FCS.

In the United States, under the Orphan Drug Act, the FDA may designate a medicine 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 medicine 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 medicine to meet the needs of patients with the rare disease or condition, or if a competitor is able to gain approval for the same medicine 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 for the treatment of patients with polyneuropathy caused by hATTR amyloidosis or WAYLIVRA for the treatment of patients with FCS, or obtain orphan drug exclusivity for our other medicines, the exclusivity may not effectively protect the medicine from competition because regulatory authorities still may authorize different medicines for the same condition.

We may expend our limited resources to pursue a particular medicine or indication and fail to capitalize on medicines 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 support the continued development of AKCEA-APOCIII-L_Rx and to commercialize WAYLIVRA in the E.U. for patients with FCS. As a result, we may forego or delay pursuit of opportunities with our other medicines 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 medicines or profitable market opportunities. Our spending on current and future research and development programs and medicines for specific indications may not yield any commercially viable medicines.

Our medicines could be subject to regulatory limitations following approval.

Following approval of a medicine, we and our partners must comply with comprehensive government regulations regarding the manufacture, marketing and distribution of drug products. Promotional communications regarding prescription medicines 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 medicines, including TEGSEDI and WAYLIVRA for FCS in the E.U., and if approved, WAYLIVRA for additional indications, and vupanorsen, AKCEA-APOCIII-L_Rx, AKCEA-APO(a)-L_Rx, and AKCEA-TTR-L_Rx.

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

• In the U.S., 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 REMS program, and

• We expect that WAYLIVRA will require periodic blood monitoring for approval in the U.S.

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Prescription medicines may be promoted only for the approved indications in accordance with the approved label. The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label may be subject to significant liability.

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 medicines 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.

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

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 medicines, 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 commercially 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. Commercialization activities in many of the E.U. countries are ongoing. The commercialization 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, vupanorsen 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.

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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.*

We granted Novartis an exclusive option to exclusively license AKCEA-APO(a)-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. 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;

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

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

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 medicines 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 medicines 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.

Our strategic collaboration with Novartis may not continue for various reasons. Novartis can terminate our agreement at any time. If Novartis stops developing or commercializing AKCEA-APO(a)-L_Rx, we will have to seek additional sources for funding and may have to delay or reduce our development and commercialization plans for this medicine.

In addition, given Novartis’ exercise of its option to license AKCEA-APO(a)-L_Rx, Novartis is responsible for the long-term supply of drug substance and finished drug product for AKCEA-APO(a)-L_Rx.

Our strategic collaboration with Novartis may not result in the successful commercialization of AKCEA-APO(a)-L_Rx. If Novartis does not successfully develop, manufacture or commercialize AKCEA-APO(a)-L_Rx, including as a result of delays or disruption caused by the COVID-19 Pandemic that may affect Novartis’ ability to conduct the cardiovascular outcome studies of AKCEA-APO(a)-L_Rx, we may receive limited or no revenues for this medicine.

We plan to substantially depend on our license agreement with Pfizer to develop and commercialize vupanorsen*

We granted Pfizer a worldwide, exclusive license to develop and commercialize vupanorsen_. We plan to substantially depend on Pfizer to further develop and commercialize vupanorsen_. We entered into this license agreement with Pfizer primarily to have Pfizer:

• conduct the additional studies that are likely to be required for approval of vupanorsen_;

• seek and obtain regulatory approvals for vupanorsen; and

• globally commercialize vupanorsen_.

Since Pfizer has licensed exclusive, worldwide rights to vupanorsen, we will rely on Pfizer to further develop, obtain regulatory approvals for, and commercialize it. In general, we cannot control the amount and timing of resources that Pfizer devotes to vupanorsen. If Pfizer fails to use commercially reasonable efforts to further develop, obtain regulatory approvals for, or commercialize vupanorsen, or if Pfizer’s efforts are not effective, our business may be negatively affected. Pfizer could pursue other technologies or develop other medicines either on its own or in collaboration with others to treat the same diseases as we and Pfizer plan to treat with vupanorsen_. Pfizer could pursue these technologies and develop these other medicines at the same time it is developing or commercializing vupanorsen_, and Pfizer is not required to inform us of such activities_.

Our agreement with Pfizer may not continue for various reasons. Pfizer can terminate our agreement at any time. If Pfizer stops developing or commercializing vupanorsen, we will have to seek additional sources for funding and may have to delay or reduce our development and commercialization plans for this medicine.

In addition, Pfizer will be responsible for the long-term supply of drug substance and finished drug product for vupanorsen_.

Our agreement with Pfizer may not result in the successful commercialization of vupanorsen. If Pfizer does not successfully develop, manufacture or commercialize vupanorsen, including as a result of delays or disruption caused by the COVID-19 Pandemic that may affect Pfizer’s ability to conduct the additional studies that are likely to be required for approval of vupanorsen, we may receive limited or no revenues for this medicine.

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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 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 medicines 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 medicines, or if PTC Therapeutics’ efforts are not effective, our business may be negatively affected. PTC Therapeutics could pursue other technologies or develop other medicines either on its own or in collaboration with others to treat the same diseases as we and PTC Therapeutics plan to treat with TEGSEDI and WAYLIVRA. PTC Therapeutics could pursue these technologies and develop these other medicines 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 medicine, 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, including as a result of delays or disruption caused by the COVID-19 Pandemic that may affect PTC Therapeutics’ ability to commercialize TEGSEDI or WAYLIVRA, we may receive limited revenue for TEGSEDI or no revenue for WAYLIVRA in Latin America or certain Caribbean countries.

Certain of our medicines may compete with our other medicines, which could reduce our expected revenues.

Certain of our medicines inhibit the production of the same protein.  For example, WAYLIVRA inhibits the production of the same protein as AKCEA-APOCIII-L_Rx and TEGSEDI inhibits the same protein as AKCEA-TTR-L_Rx. We believe the enhancements we incorporated into AKCEA-APOCIII-L_Rx and AKCEA-TTR-L_Rx can provide greater patient convenience by allowing for significantly lower doses and less frequent administration compared to WAYLIVRA and TEGSEDI, respectively. As such, to the extent physicians and patients elect to use AKCEA-APOCIII-L_Rx or AKCEA-TTR-L_Rx instead of WAYLIVRA or TEGSEDI, it will reduce the revenue we derive from those medicines. In addition, while vupanorsen, AKCEA-APOCIII-L_Rx^, and WAYLIVRA use different mechanisms of action, if vupanorsen can effectively lower triglyceride levels in FCS patients, it may likewise reduce the revenue we derive from WAYLIVRA and AKCEA-APOCIII-L_Rx.

If we cannot manufacture our medicines or contract with a third party to manufacture our medicines 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 U.S. or Canada and for additional indications, and our medicines 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 medicines, called oligonucleotides, on a commercial scale for the systemic administration of a medicine. 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 medicines, and our business could be negatively affected if Ionis and these third parties ceased to provide us with this capability for any reason. Any delays or disruption caused by the COVID-19 Pandemic or other factors to Ionis’ or third-party commercial manufacturing capabilities, including any interruption to our supply chain, could limit the commercial success of our medicines. In addition, there are a small number of suppliers for certain raw materials that we use to manufacture our medicines, 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 medicines in a timely manner or at all. We may not be able to manufacture our medicines at a cost or in quantities necessary to make commercially successful products.

We do not have long-term supply agreements for our medicines. We cannot guarantee that we will have a steady supply of medicine 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 medicines in a timely manner or within budget.

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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 medicines, including authorizations for WAYLIVRA and our medicines in development, or result in enforcement action after authorization that could limit the commercial success of our medicines, including WAYLIVRA, TEGSEDI and our medicines in development.

We depend on Ionis and third parties to conduct our clinical studies for our medicines 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 medicines, including AKCEA-TTR-L_Rx and AKCEA-APOCIII-L_Rx, and expect to continue to do so in the future. For example, we use Ionis and clinical research organizations for the clinical studies for WAYLIVRA, AKCEA-TTR-L_Rx and our other medicines in development and rely on Novartis to develop AKCEA-APO(a)-L_Rx and on Pfizer to develop vupanorsen. 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, including as a result of delays or disruption caused by the COVID-19 Pandemic that may affect Ionis’ or a third party’s ability to conduct the clinical studies for our medicines, or a termination of our relationship with these parties, could delay or prevent the development, marketing authorization and commercialization of our medicines, including authorizations for WAYLIVRA, AKCEA-APO(a)-L_Rx, AKCEA-TTR-L_Rx, vupanorsen and our other medicines in development.

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

Although we intend to continue developing and commercializing WAYLIVRA and AKCEA-APOCIII-L_Rx for patients with FCS and potentially other indications 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 medicines 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 medicines could delay the development and commercialization of our medicines 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 medicines 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 medicines 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 medicines 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 medicines 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 medicines 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 medicine, we may relinquish valuable rights to that medicine 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.*

Ionis owned 77,094,682 shares of our common stock, or approximately 76 percent, of the economic interest and voting power of our outstanding common stock as of June 30, 2020, 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.

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The licensing transaction with Ionis and our common stock issuances to Ionis in connection with our achievement of the TEGSEDI regulatory milestones and our sublicense fee payments to Ionis pursuant to our agreements with Novartis and Pfizer have increased Ionis’ ownership percentage, and this increase, along with Ionis’ increased reliance on us as a commercialization partner, given that are 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.

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.

We intend to license additional medicines from Ionis but may not be successful in completing such licenses or on favorable terms, which may adversely affect our long-term strategy as a company and the value of our stock. If we are successful in completing additional licenses with Ionis, we could be exposed to additional risk of shareholder derivative litigation.*

On July 16, 2020, a purported Company stockholder filed an action in the Delaware Court of Chancery captioned John Makris, et al. v. Stanley T. Crooke, et al., C.A. No. 2020-0587, or the “Delaware Action”. The plaintiff in the Delaware Action asserts claims against (i) current and former members of our board of directors; and (ii) Ionis Pharmaceuticals, Inc., or collectively, the Defendants. The plaintiff asserts derivative claims on behalf of Akcea, which is a nominal defendant in the Delaware Action, as well as putatively direct claims on behalf of a purported class of our stockholders. The plaintiff in the Delaware action asserts that the Defendants breached their fiduciary duties in connection with the licensing transaction that we and Ionis entered into regarding Inotersen and AKCEA-TTR-L_Rx. The plaintiff also asserts an unjust enrichment claim against Ionis. The plaintiff’s claims are similar to those asserted in a prior action in the Delaware Court of Chancery captioned City of Cambridge Retirement System v. Crooke, et al., C.A. No. 2019-0905, which was dismissed with prejudice to the named plaintiff only on April 8, 2020. We believe that the claims asserted in the Delaware Action are without merit and anticipate filing a motion to dismiss the claims. This litigation could result in substantial costs and a diversion of management’s resources and attention, which could harm our business and the value of our common stock.

We plan to enter into one or more additional licensing transactions with our majority shareholder, Ionis. While we believe we may be successful in our efforts to consummate one or more additional licensing transactions with Ionis, we may not be successful in consummating such transactions or may do so on terms that are less favorable than we anticipated or that were expected by our stockholders, which could adversely affect our stock price. If we successfully enter into additional licensing transactions with Ionis, such transactions could result in shareholder derivative suits being filed against us in addition to the Delaware Action. Any additional litigation could result in additional substantial costs and a further diversion of management’s resources and attention, which could harm our business and the value of our common stock.

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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 composed of independent directors. However, currently our compensation committee is not entirely composed of independent directors. As a controlled company, we have, currently do, and may in the future avail ourselves of some or all 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, B. Lynne Parshall was appointed as Chair of our board of directors in December 2019 and entered into an agreement with us in January 2020 to provide strategic advisor services to us. In addition, Damien McDevitt, Ph.D. was the Chief Business Officer of Ionis until he was appointed as our interim Chief Executive Officer in September 2019, and was later appointed as our Chief Executive Officer in March 2020. 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 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 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-APOCIII-L_Rx, and AKCEA-TTR-L_Rx. 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 medicines 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 medicines 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, AKCEA-APOCIII-L_Rx and our other medicines in development. In the event of a disagreement at the JSC related to TEGSEDI, AKCEA-TTR-L_rx or AKCEA-APOCIII-L_Rx,_, Ionis has final decision-making authority on decisions relating to development matters, Akcea has final decision-making authority on decisions 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 any of our other medicines in development and will need to obtain Ionis’ consent prior to granting any sublicense to a third party for TEGSEDI, AKCEA-TTR-L_Rx or any of our other medicines. 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 medicines;

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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 medicines targeting RNAs that are not apoC-III, Apo(a), ANGPTL3 or TTR to pursue the same indications we are pursuing with our medicines.

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-APOCIII-L_Rx, AKCEA-TTR-L_Rx and our other medicines in development and continue the commercialization of TEGSEDI, or may result in our medicines 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 and our other medicines in development.

We obtained our rights to WAYLIVRA, TEGSEDI and our other medicines 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 and our other medicines 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 and Ionis consequently exercises its right to terminate the license agreement, 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 WAYLIVRA and, Ionis consequently exercises its right to terminate the license agreement, 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. In addition, if we breach our obligations under the license agreement with respect to vupanorsen and, Ionis consequently exercises its right to terminate the license agreement, then our strategic collaboration with Pfizer would convert to a direct license between Pfizer and Ionis, and Ionis would receive all of the revenue and other benefits associated with that license agreement.

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 and our medicines 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.

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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.

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 and our other medicines 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 or our medicines 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 medicines 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 medicines 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.

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We may not be aware of all such intellectual property rights potentially relating to our medicines and their uses. If a third party claims that WAYLIVRA, TEGSEDI or our medicines 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 medicines or our intended commercialization thereof, does and will not infringe or otherwise violate any third party's intellectual property.

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 medicines 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 and our medicines in development, our business may be materially harmed.

Depending upon the timing, duration and specifics of the first FDA marketing authorization of TEGSEDI, WAYLIVRA and our medicines 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.

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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.

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 medicines 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.

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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 June 30, 2020, Ionis owned approximately 76 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.

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 medicines in development;

• Novartis' failure to effectively develop and commercialize AKCEA-APO(a)-L_Rx;

• Pfizer’s failure to effectively develop and commercialize vupanorsen;

• 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 our medicines in development;

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

• adverse developments concerning our manufacturers or our strategic partnerships;

• inability to obtain adequate product supply for any medicine 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 and our medicines 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 medicines being developed by Ionis or other companies that are or may be perceived to be similar to our medicines;

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• 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 medicines or programs, significant contracts, commercial relationships or capital commitments;

• our and our strategic partners' ability to successfully market TEGSEDI, WAYLIVRA and, if approved, our medicines in development;

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

• changes in the structure of healthcare payment systems;

• disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain and maintain patent protection for TEGSEDI, WAYLIVRA and our medicines 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, medicine pricing policies, international currency fluctuations, acts of war or terrorism, and outbreaks of pandemic diseases, such as COVID-19.

The current COVID-19 Pandemic has caused a significant disruption of global financial markets and has resulted in increased volatility in the trading price of our common stock.  Additionally, broad market and industry factors may also 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.

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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. As of June 30, 2020, Ionis owned 77,094,682 shares, or approximately 76 percent, of our common stock. Novartis owned 6,250,000 shares of common stock pursuant to our agreements with them. Novartis will not sell, in any single trading day, an amount of shares that is more than 10% of the daily trading volume of our common stock for that trading day. 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, 23,500,000 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 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.

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.

Our ability to use our net operating loss carryovers and certain other tax attributes may be limited.

Under the Internal Revenue Code of 1986, as amended, or the Code, a corporation is generally allowed a deduction for net operating losses, or NOLs, carried over from a prior taxable year. Under that provision, we can carryforward our NOLs to offset our future taxable income, if any, until such NOLs are used or expire. The same is true of other unused tax attributes, such as tax credits.

Under the Tax Cut and Jobs Act of 2017, or the Tax Act, as modified by the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, U.S. federal net operating losses incurred in 2018 and in future years may be carried forward indefinitely, but the deductibility of such U.S. federal net operating losses is limited to 80% of taxable income beginning in 2021. It is uncertain if and to what extent various states will conform to the federal Tax Act or the CARES Act. The CARES Act also reinstated the net operating loss carryback provisions whereby net operating losses incurred in calendar years 2018, 2019 and 2020 may be carried back to offset taxable income of the five tax years preceding the year of the loss.

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In addition, under Sections 382 and 383 of the Code, and corresponding provisions of state law, if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percent change, by value, in its equity ownership over a three-year period, the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes to offset its post-change income or taxes may be limited. We may experience ownership changes in the future as a result of subsequent shifts in our stock ownership, some of which may be outside of our control. If an ownership change occurs and our ability to use our net operating loss carryforwards or other tax attributes is materially limited, it would harm our future operating results by effectively increasing our future tax obligations. In addition, at the state level, there may be periods during which the use of net operating losses is suspended or otherwise limited, which could accelerate or permanently increase state taxes owed. A change in tax laws, treaties or regulations, or their interpretation, of any other country in which we operate could also materially affect us.

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.

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 amended and restated certificate of incorporation and amended and restated bylaws designate the Court of Chancery of the State of Delaware, to the fullest extent permitted by law, 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.

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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 amended and restated certificate of incorporation and amended and restated bylaws described above. These choice of forum provisions 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 or our amended and restated bylaws 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. For example, the Court of Chancery of the State of Delaware previously determined that the exclusive forum provision of federal district courts of the United States of America for resolving any complaint asserting a cause of action arising under the Securities Act is not enforceable; however, on March 18, 2020, this decision was overturned by the Delaware Supreme Court. These choice of forum provisions do 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

None.

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ITEM 6. EXHIBITS

a. Exhibits

		Incorporated by Reference
Exhibit	Description	Schedule / Form	File Number	Exhibit	File Date
3.1	Amended and Restated Certificate of Incorporation, as amended, of the Registrant	10-Q	001-38137	3.1	May 7, 2018
3.2	Amended and Restated Bylaws of the Registrant	8-K	001-38137	3.2	July 19, 2017
10.1+	Offer Letter, by and between Registrant and Michael D. Price, dated April 24, 2020	8-K	001-38137	10.1	May 18, 2020
10.2+	Severance Benefit Agreement, by and between Registrant and Michael D. Price, dated May 18, 2020	8-K	001-38137	10.2	May 18, 2020
10.3+	Separation Agreement, by and between Registrant and Louis St. L. O’Dea, dated July 7, 2020	8-K	001-38137	10.3	July 9, 2020
10.4+	Consulting Agreement, by and between Registrant and Louis St. L. O’Dea, dated July 7, 2020	8-K	001-38137	10.4	July 9, 2020
10.5+	Offer Letter, by and between Registrant and William Andrews, dated June 18, 2020	8-K	001-38137	10.1	July 9, 2020
10.6+	Severance Benefit Agreement, by and between Registrant and William Andrews, dated July 9, 2020	8-K	001-38137	10.2	July 9, 2020
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 June 30, 2020, formatted in Inline Extensible Business Reporting Language (iXBRL): (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).
104	Cover Page Interactive Data File (formatted in iXBRL and included in exhibit 101).

* 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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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	Chief Executive Officer
Damien McDevitt	(on behalf of the Registrant and in his capacity as principal executive officer)	August 5, 2020
/s/ MICHAEL D. PRICE	Chief Financial Officer
Michael D. Price	(on behalf of the Registrant and in his capacity as principal financial and accounting officer)	August 5, 2020

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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: August 5, 2020	By:	/s/ DAMIEN MCDEVITT
		Damien McDevitt
		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 D. Price, 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: August 5, 2020	By:	/s/ MICHAEL D. PRICE
		Michael D. Price
		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 Chief Executive Officer of Akcea Therapeutics, Inc., (the “Company”), and Michael D. Price, 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 June 30, 2020, 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: August 5, 2020

By:	/s/ DAMIEN MCDEVITT	By:	/s/ MICHAEL D. PRICE
	Damien McDevitt		Michael D. Price
	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.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Jul. 29, 2020
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	Jun. 30, 2020
Amendment Flag	false
Trading Symbol	AKCA
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock Shares Outstanding		101,598,619
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
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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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 135,744	$ 306,866
Short-term investments	254,144	156,806
Accounts receivable	14,049	10,496
Receivable from Ionis Pharmaceuticals, Inc.		3,231
Inventories	13,756	8,817
Other current assets	10,480	10,689
Total current assets	428,173	496,905
Property, plant and equipment, net	5,895	5,261
Operating lease right-of-use assets	10,646	11,094
Intangible assets, net	80,127	83,051
Deposits and other assets	3,096	2,939
Total assets	527,937	599,250
Current liabilities:
Accounts payable	4,253	10,216
Payable to Ionis Pharmaceuticals, Inc.	5,320
Accrued compensation	8,313	12,793
Accrued liabilities	12,316	14,191
Deferred revenue	263	2,165
Other current liabilities	4,716	2,633
Total current liabilities	35,181	41,998
Long-term portion of lease liabilities	13,545	14,248
Other long-term liabilities	183
Total liabilities	48,909	56,246
Stockholders’ equity:
Common stock, $0.001 par value; 125,000,000 shares authorized at June 30, 2020 and December 31, 2019; 101,509,223 and 100,993,173 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively.	102	101
Additional paid-in capital	1,051,142	1,024,168
Accumulated other comprehensive income	1,481	5
Accumulated deficit	(573,697)	(481,270)
Total stockholders’ equity	479,028	543,004
Total liabilities and stockholders’ equity	$ 527,937	$ 599,250

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CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
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)	101,509,223	100,993,173
Common stock, shares outstanding (in shares)	101,509,223	100,993,173

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenue:
Revenue	$ 22,377	$ 26,623	$ 38,451	$ 190,439
Expenses:
Cost of sales - intangible asset amortization	1,418	1,419	2,837	2,822
Research and development	29,731	20,271	47,086	119,890
Selling, general and administrative	42,139	50,740	88,385	95,342
Total expenses	73,468	65,329	134,801	202,938
Loss from operations	(51,091)	(38,706)	(96,350)	(12,499)
Other income (expense):
Investment income	1,055	1,571	2,826	2,795
Other expense	(146)	(28)	(276)	(140)
Loss before income tax expense	(50,182)	(37,163)	(93,800)	(9,844)
Income tax benefit (expense)	605	(160)	1,373	(292)
Net loss	(49,577)	(37,323)	(92,427)	(10,136)
Ionis [Member]
Expenses:
Net loss share from commercial activities under arrangement with Ionis Pharmaceuticals, Inc.	(3,448)	(11,465)	(10,499)	(20,521)
Common Stock [Member] | Ionis [Member]
Other income (expense):
Net loss	$ (37,665)	$ (28,244)	$ (70,348)	$ (4,380)
Net loss per share, basic and diluted (in dollars per share)	$ (0.49)	$ (0.40)	$ (0.91)	$ (0.06)
Weighted-average shares outstanding, basic and diluted (in shares)	77,094,682	70,221,338	77,094,682	69,406,181
Common Stock [Member] | Others [Member]
Other income (expense):
Net loss per share, basic and diluted (in dollars per share)	$ (0.49)	$ (0.40)	$ (0.91)	$ (0.26)
Weighted-average shares outstanding, basic and diluted (in shares)	24,381,592	22,573,900	24,195,990	22,351,368
Product [Member]
Revenue:
Revenue	$ 16,364	$ 9,865	$ 31,523	$ 16,619
Expenses:
Cost of product/license	3,628	1,364	6,992	2,405
Licensing [Member]
Revenue:
Revenue		6,036		6,036
Expenses:
Cost of product/license		3,000		3,000
Research and Development and License Revenue Under Collaborative Agreement [Member]
Revenue:
Revenue	$ 6,013	$ 10,722	$ 6,928	$ 167,784

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Statement Of Income And Comprehensive Income [Abstract]
Net loss	$ (49,577)	$ (37,323)	$ (92,427)	$ (10,136)
Unrealized gains on investments, net of tax	1,016	10	1,393	222
Currency translation adjustment	74	(93)	83	(8)
Comprehensive loss	$ (48,487)	$ (37,406)	$ (90,951)	$ (9,922)

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Total	Ionis [Member] TTR License Agreement [Member]	Common Stock [Member]	Common Stock [Member] Ionis [Member] TTR License Agreement [Member]	Additional Paid In Capital [Member]	Additional Paid In Capital [Member] Ionis [Member] TTR License Agreement [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Accumulated Deficit [Member]
Balance at Dec. 31, 2018	$ 276,724		$ 89		$ 799,001		$ (324)	$ (522,042)
Balance (in shares) at Dec. 31, 2018			89,346
Net loss	(10,136)							(10,136)
Change in unrealized gains, net of tax	222						222
Currency translation adjustment	(8)						(8)
Issuance of common stock in connection with employee stock plans	7,409		$ 1		7,408
Issuance of common stock in connection with employee stock plans (in shares)			738
Issuance of common stock in connection with Ionis sublicense fee		$ 75,000		$ 3		$ 74,997
Issuance of stock (in shares)				2,837
Distribution to Ionis		$ (13,492)				$ (13,492)
Stock-based compensation expense	32,923				32,923
Balance at Jun. 30, 2019	368,642		$ 93		900,837		(110)	(532,178)
Balance (in shares) at Jun. 30, 2019			92,921
Balance at Mar. 31, 2019	388,864		$ 93		883,653		(27)	(494,855)
Balance (in shares) at Mar. 31, 2019			92,635
Net loss	(37,323)							(37,323)
Change in unrealized gains, net of tax	10						10
Currency translation adjustment	(93)						(93)
Issuance of common stock in connection with employee stock plans	2,821				2,821
Issuance of common stock in connection with employee stock plans (in shares)			286
Stock-based compensation expense	14,363				14,363
Balance at Jun. 30, 2019	368,642		$ 93		900,837		(110)	(532,178)
Balance (in shares) at Jun. 30, 2019			92,921
Balance at Dec. 31, 2019	543,004		$ 101		1,024,168		5	(481,270)
Balance (in shares) at Dec. 31, 2019			100,993
Net loss	(92,427)							(92,427)
Change in unrealized gains, net of tax	1,393						1,393
Currency translation adjustment	83						83
Issuance of common stock in connection with employee stock plans	3,649		$ 1		3,648
Issuance of common stock in connection with employee stock plans (in shares)			520
Stock-based compensation expense	23,402				23,402
Payments of tax withholdings related to exercise of employee stock options/awards	(76)		$ (4)		(76)
Balance at Jun. 30, 2020	479,028		$ 102		1,051,142		1,481	(573,697)
Balance (in shares) at Jun. 30, 2020			101,509
Payments of tax withholdings related to exercise of employee stock options	76		$ 4		76
Balance at Mar. 31, 2020	509,691		$ 101		1,033,319		391	(524,120)
Balance (in shares) at Mar. 31, 2020			101,349
Net loss	(49,577)							(49,577)
Change in unrealized gains, net of tax	1,016						1,016
Currency translation adjustment	74						74
Issuance of common stock in connection with employee stock plans	1,703		$ 1		1,702
Issuance of common stock in connection with employee stock plans (in shares)			160
Stock-based compensation expense	16,121				16,121
Balance at Jun. 30, 2020	$ 479,028		$ 102		$ 1,051,142		$ 1,481	$ (573,697)
Balance (in shares) at Jun. 30, 2020			101,509

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Operating activities:
Net loss	$ (92,427)	$ (10,136)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation	424	400
Amortization of right-of-use operating lease assets	448	501
Amortization of intangibles	2,924	2,908
Amortization of premium/discount on investment securities, net	747	(434)
Non-cash sublicensing expense		75,000
Stock-based compensation expense	23,402	32,923
Changes in operating assets and liabilities:
Accounts receivable	(3,553)	(4,596)
Other current and long-term assets	(2,026)	(966)
Inventories	(2,415)	(4,014)
Accounts payable	(6,001)	(2,890)
Payable/receivable from Ionis Pharmaceuticals, Inc.	8,089	(26,812)
Income tax receivable	(446)
Accrued compensation	(4,480)	(1,062)
Accrued liabilities	576	2,128
Income taxes payable	(888)	(169)
Deferred revenue	(1,902)	(12,958)
Net cash (used in) provided by operating activities	(77,528)	49,823
Investing activities:
Purchases of short-term investments	(215,329)	(78,606)
Proceeds from maturity of short-term investments	118,637	100,043
Purchases of property, plant and equipment	(558)	(1,389)
Net cash (used in) provided by investing activities	(97,250)	20,048
Financing activities:
Proceeds from issuance of equity	3,649	7,409
Distribution to Ionis Pharmaceuticals, Inc.		(13,492)
Payments of tax withholdings related to exercise of employee stock awards	(76)
Net cash provided by (used in) financing activities	3,573	(6,083)
Effect of exchange rates on cash	83	(8)
Net (decrease) increase in cash and cash equivalents	(171,122)	63,780
Cash, cash equivalents and restricted cash at beginning of period	309,250	88,838
Cash, cash equivalents and restricted cash at end of period	138,128	152,618
Supplemental disclosures of non-cash financing activities:
Purchase of property, plant and equipment included in accounts payable	38
Right-of-use assets obtained in exchange for lease liabilities		363
Cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets:
Cash and cash equivalents	135,744	150,234
Restricted cash included in deposits and other assets	2,384	2,384
Cash, cash equivalents and restricted cash at end of period	138,128	$ 152,618
Ionis [Member]
Supplemental disclosures of non-cash financing activities:
Purchase of property, plant and equipment included in accounts payable	$ 462

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Organization and Basis of Presentation

6 Months Ended

Jun. 30, 2020

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 medicines to treat patients with serious and rare diseases. On July 19, 2017, we completed our initial public offering, or IPO. As of June 30, 2020, Ionis owned approximately 76% 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 June 30, 2020 and 2019. 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, 2019.

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 believe that our currently available funds of $389.9 million as of June 30, 2020 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 have generally incurred losses since our inception and have funded our cash flow deficits primarily through the issuance of capital stock and proceeds from license and collaboration agreements. As of June 30, 2020, we had an accumulated deficit of $573.7 million. During the three and six months ended June 30, 2020, we generated losses of $49.6 million and $92.4 million, respectively, and we used $77.5 million of cash for our operating activities during the six months ended June 30, 2020. We expect to generate operating losses and negative operating cash flows for the foreseeable future; however, we may generate positive cash flows from significant upfront payments associated with out-licensing transactions. 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. Management’s belief with respect to our ability to fund operations is based on estimates that are subject to risks and uncertainties on our future results. 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 medicines even if we would otherwise prefer to develop and commercialize the medicines ourselves.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

The accounting policies followed in the preparation of these 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, 2019.

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, the accrual for research and development expenses, stock-based compensation and income taxes. 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.

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. We place our cash, cash equivalents and short-term investments with reputable financial institutions. We primarily invest our excess cash in commercial paper 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 Standard & Poor's, or S&P, Moody's, 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.

New Accounting Pronouncements – Recently Issued

In June 2016, the Financial Accounting Standards Board, or FASB, issued guidance that changes the measurement of credit losses for most financial assets and certain other instruments. This standard requires us to estimate the expected credit loss of an instrument over its lifetime using an expected credit loss model, 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. We adopted this guidance on January 1, 2020 and it did not have 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. We adopted this guidance on January 1, 2020 on a prospective basis and it did not have a significant impact on our condensed consolidated financial statements and 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 implemented 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 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 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 sales to third parties, we do not recognize revenue for the transaction.  

We adopted this guidance on January 1, 2020 and it did not have a significant impact on our condensed consolidated financial statements and disclosures.

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Net Product Revenue

6 Months Ended

Jun. 30, 2020

Revenue From Contract With Customer [Abstract]

Net Product Revenue

3. Net Product Revenue

Net product revenue consists of sales of TEGSEDI and WAYLIVRA. TEGSEDI is sold in the U.S. and the European Union, or E.U. On May 7, 2019, we obtained regulatory approval of WAYLIVRA in Europe, following which we began to commercialize WAYLIVRA in the E.U.

During the three and six months ended June 30, 2020 we recorded product revenue, net, of $16.4 million and $31.5 million, respectively. We recorded product revenue, net, of $9.9 million and $16.6 million for the same periods in 2019. The following table summarizes balances and activity in each of our product revenue allowance and reserve categories (in thousands):

	Chargebacks, discounts and fees			Government and other rebates			Returns		Total
Balance at December 31, 2019	$	270		$	1,353		$	197	$	1,820
Provision related to current period sales		1,044			4,830			58		5,932
Adjustment related to prior period sales		(66	)		83			—		17
Credits or payments made during the period		(1,093	)		(1,790	)		—		(2,883	)
Balance at June 30, 2020	$	155		$	4,476		$	255	$	4,886
Balance at December 31, 2018	$	50		$	293		$	5	$	348
Provision related to current period sales		438			774			138		1,350
Adjustment related to prior period sales		(4	)		(25	)		—		(29	)
Credits or payments made during the period		(311	)		(210	)		—		(521	)
Balance at June 30, 2019	$	173		$	832		$	143	$	1,148

The following table presents the balance of our receivables and contract liabilities related to net product revenue (in thousands):

	June 30, 2020		December 31, 2019
Receivables included in "Accounts receivable"	$	13,536	$	6,946
Contract liabilities included in "Accrued liabilities"		4,632		1,550

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Revenue from Collaboration and License Agreements

6 Months Ended

Jun. 30, 2020

Revenue From Contract With Customer [Abstract]

Revenue from Collaboration and License Agreements

4. Revenue from Collaboration and License Agreements

Net revenue from our partners in connection with our collaboration and license agreements consisted of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
License Agreement with Pfizer	$	5,735	$	—	$	6,339	$	—
Strategic Collaboration with Novartis		278		10,722		589		167,784
Collaboration and License Agreement with    PTC Therapeutics		—		6,036		—		6,036
Total net revenue from partners	$	6,013	$	16,758	$	6,928	$	173,820

The following table presents the balance of our receivables and contract liabilities related to our collaboration and license agreements associated with our partners (in thousands):

	June 30, 2020		December 31, 2019
Receivables included in "Accounts receivable"	$	513	$	3,550
Contract liabilities included in "Deferred revenue"		263		1,322

During the three and six months ended June 30, 2020, we recognized the following revenue as a result of the change in the contract liability balances related to our collaboration and license agreements associated with our partners (in thousands):

	Three Months Ended June 30, 2020		Six Months Ended June 30, 2020
Revenue recognized in current period from:
Amounts included in deferred revenue at the beginning    of the period	$	455	$	1,059

License Agreement with Pfizer

In October 2019, we entered into a license agreement with Pfizer, or the Pfizer License Agreement, for the development and commercialization of vupanorsen (previously referred to as AKCEA-ANGPTL3-L_Rx). Under the terms of the Pfizer License Agreement, we granted Pfizer an exclusive license to further develop, manufacture and commercialize vupanorsen worldwide, subject to our potential participation in co-commercialization. We are responsible for completing a Phase 2 clinical trial and providing limited quantities of active pharmaceutical ingredient, or API, for vupanorsen.

We received a $250.0 million upfront payment in the fourth quarter of 2019 from Pfizer. We issued 6,873,344 shares of our common stock to Ionis as payment of the $125.0 million sublicense fee due under our development, commercialization and license agreement related to our cardiometabolic franchise, or Cardiometabolic License Agreement, with Ionis and recorded it as a research and development expense in our condensed consolidated statement of operations.

At commencement of the Pfizer License Agreement, we identified the following three distinct performance obligations:

• A license to develop and commercialize vupanorsen and the related know-how;

• Activities to develop vupanorsen; and

• The existing supply of vupanorsen API.

We concluded that the three performance obligations were distinct because Pfizer has full use of the obligations without any continuing involvement from us. Further, Pfizer, or another third party, could provide these obligations without our assistance.

We determined the transaction price for the Pfizer License Agreement to be the $250.0 million upfront payment we received from Pfizer. None of the development or regulatory milestone payments under this agreement were included in the upfront transaction price. We concluded that such future payments pursuant to the Pfizer License Agreement will be recognized when it is probable that Pfizer will achieve the related development or regulatory milestones.

Based on the distinct performance obligations under the Pfizer License Agreement, we allocated the $250.0 million transaction price based on the relative stand-alone selling prices of each of our performance obligations as follows:

• $245.6 million for the transfer of the license of vupanorsen and the related know-how;

• $2.2 million for the conduct of activities to develop vupanorsen; and

• $2.2 million for the delivery of the existing vupanorsen API.

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

• We recognized the full amount related to the license and related know-how in the fourth quarter of 2019 because Pfizer, upon the date of closing, had full use of the license and related know-how without any continuing involvement from us. Additionally, we did not have any further performance obligations related to the license after the license was transferred to Pfizer;

• We are recognizing revenue relating to development activities performed using an input method by calculating costs incurred to date at each period end relative to total costs expected to be incurred. We are completing the Phase 2 clinical trial for vupanorsen and expect to complete our activities in the third quarter of 2020. Pfizer is responsible for conducting and funding all future development, regulatory and commercialization activities for vupanorsen; and

• We recognized the amount attributed to the vupanorsen API supply when we delivered the API to Pfizer in the fourth quarter of 2019.

During the second quarter of 2020, Pfizer exercised its option to purchase additional vupanorsen API in accordance with the Pfizer License Agreement. We concluded that the option to purchase additional API did not constitute a material right as the API is being sold at its stand-alone selling price, and thus is not offered at a discount. Accordingly, we recognized $5.3 million of revenue relating to this option upon the delivery of vupanorsen API in the second quarter of 2020. Pfizer has the option to purchase additional vupanorsen API in the future at agreed upon terms and conditions pursuant to the Pfizer 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 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 will achieve the next milestone payment of $75.0 million when Pfizer advances vupanorsen_. We are also eligible to receive tiered royalties in the mid-teens to low twenty percent range on net sales of vupanorsen. 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 share any milestone payments and royalties equally with Ionis.

During the three and six months ended June 30, 2020, we recognized $0.5 million and $1.1 million, respectively, of revenue related to our Pfizer License Agreement that was in our beginning deferred revenue balance. Our condensed consolidated balance sheets at June 30, 2020 and December 31, 2019 included deferred revenue of $0.3 million and $1.3 million, respectively, related to our development activities obligation under the Pfizer License Agreement.

Strategic collaboration with Novartis

In January 2017, 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. Under the terms of the Novartis collaboration, we agreed to complete a Phase 2 clinical trial, conduct an end-of-Phase 2 meeting with the U.S. Food and Drug Administration, or FDA, and provide initial quantities of API for each medicine.

AKCEA-APO(a)-L_Rx

In February 2019, Novartis exercised its exclusive 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. Novartis has full use of the license without any continuing involvement from us, therefore making the license distinct from other performance obligations. Accordingly, we recognized the related license fee of $150.0 million in full in February 2019 upon exercise. We issued 2,837,373 shares of our common stock to Ionis to satisfy the $75.0 million sublicense fee due to Ionis for Novartis’ option exercise under our Cardiometabolic License Agreement with Ionis.

In the second quarter of 2019, we completed the development services performance obligation for AKCEA-APO(a)-L_Rx and all revenue allocated to this revenue stream was fully recognized as of June 30, 2019.

We are eligible to receive up to $675.0 million in additional 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, we and Novartis established a more definitive co-commercialization framework under which we and Novartis may negotiate the co-commercialization of AKCEA-APO(a)-L_Rx in select 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 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 clinical trial for AKCEA-APO(a)-L_Rx. 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. 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 share any milestone payments and royalties equally with Ionis. AKCEA-APO(a)-L_Rx was recently granted Fast Track Designation by the FDA as a potential treatment for people at significant risk for cardiovascular disease due to elevated levels of lipoprotein(a), or Lp(a).

AKCEA-APOCIII-L_Rx

In December 2019, Novartis elected not to exercise its option to license AKCEA-APOCIII-L_Rx and terminated the strategic collaboration solely in relation to AKCEA-APOCIII-L_Rx. As a result, the development services performance obligation relating to AKCEA-APOCIII-L_Rx was satisfied and all revenue allocated to the development services revenue stream was fully recognized as of December 31, 2019.

As a result of Novartis’ election not to exercise its option, we retain the rights to further develop and commercialize AKCEA-APOCIII-L_Rx. We are no longer entitled to any future license fees, milestone payments or royalties from Novartis relating to AKCEA-APOCIII-L_Rx. In the second quarter of 2020, we repurchased $2.3 million of AKCEA-APOCIII-L_Rx API from Novartis to be used to further develop AKCEA-APOCIII-L_RX. This amount is included in research and development expense on our condensed consolidated statement of operations.

Collaboration and License Agreement with PTC Therapeutics

In August 2018, we entered into a collaboration and license agreement with PTC Therapeutics International Limited, or the PTC License Agreement, to commercialize TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries, or the PTC Territory. In addition, in April 2019, we entered into a supply agreement with PTC Therapeutics International Limited, or PTC Therapeutics, providing them the option to purchase product from us subject to terms as described in the agreement. During the three and six months ended June 30, 2020, we did not recognize any revenue from our collaboration with PTC Therapeutics.

In May 2019, we received a $6.0 million milestone payment from PTC Therapeutics as a result of regulatory approval of WAYLIVRA in Europe. We paid Ionis a $3.0 million sublicense fee under our Cardiometabolic License Agreement and recorded it as a cost of license in our condensed consolidated statement of operations. In October 2019, we received a $4.0 million milestone payment from PTC Therapeutics as a result of regulatory approval of TEGSEDI in Brazil. We paid Ionis a $2.4 million sublicense fee under our development, commercialization, collaboration and license agreement with Ionis dated March 2018, or the TTR License Agreement, and recorded it as a cost of license in our condensed consolidated statement of operations. We did not include these milestone payments in the upfront transaction price as we concluded that such future payments pursuant to the PTC License Agreement will be recognized when it is probable that PTC Therapeutics will achieve the related regulatory milestones. After receiving regulatory approval for WAYLIVRA and TEGSEDI, we deemed the milestones probable and recognized $6.0 million and $4.0 million as license revenue during the second and fourth quarter of 2019, respectively. 

We are eligible to receive an additional $4.0 million milestone payment upon receiving regulatory approval of WAYLIVRA in Brazil 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 TEGSEDI or WAYLIVRA in Brazil or the date that PTC Therapeutics recognizes revenue of at least $10.0 million in cumulative net sales of TEGSEDI or WAYLIVRA 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 TEGSEDI or WAYLIVRA in the PTC Territory. Milestone payments and royalties that we are eligible to receive from PTC Therapeutics for TEGSEDI are split 60% to Ionis and 40% to Akcea in accordance with our TTR License Agreement. All WAYLIVRA milestone payments and royalties that we are eligible to receive from PTC Therapeutics are split equally with Ionis in accordance with our Cardiometabolic License Agreement. 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.

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Investments and Fair Value Measurements

6 Months Ended

Jun. 30, 2020

Investments And Fair Value Measurements [Abstract]

Investments And Fair Value Measurements

5. Investments and Fair Value Measurements

Investments

As of June 30, 2020 and December 31, 2019, 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 S&P, Moody’s 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 June 30, 2020 and December 31, 2019 (in thousands):

			Gross Unrealized					Estimated
June 30, 2020	Cost		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	81,143	$	374	$	(1	)	$	81,516
Debt securities issued by U.S. government agencies		118,414		489		(5	)		118,898
Total securities with a maturity of one year or less	$	199,557	$	863	$	(6	)	$	200,414
Corporate debt securities	$	30,878	$	354	$	-		$	31,232
Debt securities issued by U.S. government agencies		22,272		230		(4	)		22,498
Total securities with a maturity of one to two years		53,150		584		(4	)		53,730
Total available-for-sale securities	$	252,707	$	1,447	$	(10	)	$	254,144

			Gross Unrealized					Estimated
December 31, 2019	Cost		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	105,679	$	40	$	(23	)	$	105,696
Debt securities issued by U.S. government agencies		38,970		30		(6	)		38,994
Total securities with a maturity of one year or less	$	144,649	$	70	$	(29	)	$	144,690
Corporate debt securities	$	2,033	$	5	$	—		$	2,038
Debt securities issued by U.S. government agencies		14,079		—		(3	)		14,076
Total securities with a maturity of one to two years		16,112		5		(3	)		16,114
Total available-for-sale securities	$	160,761	$	75	$	(32	)	$	160,804

We recorded unrealized gains and losses related to the securities listed above as of June 30, 2020 and December 31, 2019. 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 June 30, 2020 and December 31, 2019 that are regularly measured and carried at fair value. The table segregates our investments by level within the fair value hierarchy of valuation techniques used to determine their fair value (in thousands):

	At June 30, 2020		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Money market funds (1)	$	105,972	$	105,972	$	—
Corporate debt securities (3)		112,749		—		112,749
Debt securities issued by U.S. government agencies (3)		141,395		—		141,395
Total	$	360,116	$	105,972	$	254,144

	At December 31, 2019		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Money market funds (1)	$	285,510	$	285,510	$	—
Corporate debt securities (2)		107,735		—		107,735
Debt securities issued by U.S. government agencies (3)		53,069		—		53,069
Total	$	446,314	$	285,510	$	160,804

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

(2) At December 31, 2019, $4.0 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 sheet.

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Property Plant and Equipment

6 Months Ended

Jun. 30, 2020

Property Plant And Equipment [Abstract]

Property, Plant and Equipment

6. Property, Plant and Equipment

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

	June 30,			December 31,
	2020			2019
Furniture and fixtures	$	1,819		$	1,611
Computer equipment and software		459			289
Manufacturing equipment		454			416
Leasehold improvements		4,597			3,955
Total property and equipment, at cost		7,329			6,271
Less accumulated depreciation and amortization		(1,434	)		(1,010	)
Total property and equipment, net	$	5,895		$	5,261

We recorded depreciation expense of $0.2 million and $0.4 million for the three and six months ended June 30, 2020, respectively. We recorded depreciation expense of $0.2 million and $0.4 million for the same periods in 2019.

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Inventories

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Inventories

7. Inventories

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

WAYLIVRA inventory-related costs incurred subsequent to April 1, 2019 and TEGSEDI inventory-related costs incurred subsequent to July 1, 2018 are reflected as inventories on our condensed consolidated balance sheet at the lower of cost or net realizable value under the first-in, first-out, or FIFO, basis. At June 30, 2020, a majority of our physical inventory for WAYLIVRA and a portion of our physical inventory for TEGSEDI included API that we produced prior to regulatory approval. As such, there is no cost basis for this API as we previously expensed the related costs as research and development expenses.

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 statement of operations.

The following table presents inventories (in thousands):

	June 30,		December 31,
	2020		2019
Raw materials	$	9,544	$	6,520
Work in process		3,471		2,039
Finished goods		741		258
Total inventories	$	13,756	$	8,817

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Intangible Assets, Net

6 Months Ended

Jun. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Intangible Assets, Net

8. Intangible Assets, net

The following table presents intangible assets (in thousands):

	June 30,			December 31,			Estimated
	2020			2019			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		(12,135	)		(9,211	)
Total intangible assets, net	$	80,127		$	83,051

We recorded $1.4 million and $2.9 million, respectively, in amortization expense related to intangible assets during the three and six months ended June 30, 2020. For the same periods in 2019, we recorded $1.5 million and $2.9 million, respectively. Estimated future amortization expense for intangible assets as of June 30, 2020 is as follows (in thousands):

Years ended December 31,	Intangible Assets
Remainder of 2020	$	2,955
2021		5,861
2022		5,856
2023		5,843
2024		5,822
Thereafter		53,790
	$	80,127

The weighted average remaining amortizable life of our patents was 10.6 years at June 30, 2020.

For additional detail of our license agreements with Ionis, see Note 9, License Agreements and Services Agreement with Ionis.

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License Agreements and Services Agreement with Ionis

6 Months Ended

Jun. 30, 2020

Related Party Transactions [Abstract]

License Agreements and Services Agreement with Ionis

9. 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 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 vupanorsen, which are collectively referred to as the Lipid Medicines. Ionis granted us an exclusive license to certain patents to develop and commercialize products containing the Lipid Medicines. Ionis also granted us a non-exclusive license to the Ionis antisense platform technology for us to develop and commercialize products containing the Lipid Medicines. Ionis also granted us non-exclusive rights to manufacture the Lipid Medicines in our own facility or at a contract manufacturer. As part of this agreement, both companies agreed not to work with any other parties to develop or commercialize other RNA-targeting medicines that are designed to inhibit any of the Lipid Medicine targets so long as we are developing or commercializing the Lipid Medicines.

We and Ionis share development responsibilities for the Lipid Medicines, other than the medicines licensed to Novartis and to 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 medicines, 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, or FTE, 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 medicines. We also pay Ionis for the API and drug product we use in our nonclinical and clinical studies for all of our medicines. 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 charges us for the resulting cost.

As we commercialize each of the Lipid Medicines, other than medicines licensed to Novartis and to Pfizer, we pay Ionis royalties in the mid-teens to the mid-twenty percent range on sales related to the Lipid Medicines that we sell. If we sell a Lipid Medicine 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 Medicine 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 AKCEA-APO(a)-L_Rx licensed to Novartis under the collaboration agreement with Novartis and vupanorsen 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 Medicine. 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 received from Pfizer in connection with our license agreement with Pfizer. For additional detail regarding our strategic collaboration with Novartis and license agreement with Pfizer, see Note 4, Revenue from Collaboration and License Agreements.

TTR Development, Commercialization, Collaboration and License Agreement

On April 17, 2018, our stockholders, other than Ionis and its affiliates, approved the 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 that required the approval of 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 medicine 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 license fee of $150.0 million, 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 us 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 in 2018 for $200 million under the Ionis SPA.

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 the transfer of certain manufacturing and clinical research agreements to us. 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 purchased $4.7 million of TEGSEDI inventory held by Ionis. In addition, in the first quarter of 2019 we purchased $13.5 million of 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 commercial inventory and clinical material as a reduction of additional paid in capital as this amount represented a cash distribution to Ionis. Accordingly, we included this amount as a distribution to Ionis for purposes of net loss per share and we 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 that we 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.

On July 11, 2018, we received regulatory approval for TEGSEDI in the E.U. for the treatment of stage 1 or stage 2 polyneuropathy in adult patients with hereditary transthyretin amyloidosis, or hATTR amyloidosis. As a result of the regulatory 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 intangible assets was $1.4 million and $2.8 million for the three and six months ended June 30, 2020, respectively. Amortization expense for the TTR intangible assets was $1.4 million and $2.8 million, respectively, for the same periods in 2019.

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 U.S., 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 revenue, 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 License Agreement is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net losses incurred by the collaboration related    to the commercial activities under the TTR    License Agreement	$	(5,922	)	$	(19,109	)	$	(17,724	)	$	(34,207	)
Ionis' share of commercial losses under the    TTR License Agreement reflected in our    condensed consolidated statement of operations		(3,448	)		(11,465	)		(10,499	)		(20,521	)
Akcea's share of commercial losses under the    TTR License Agreement reflected in our condensed    consolidated statement of operations	$	(2,474	)	$	(7,644	)	$	(7,225	)	$	(13,686	)

A summary of the development expenses related to the TTR Agreement is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Total development expense incurred by the    collaboration related to development activities    under the TTR License Agreement	$	(18,185	)	$	(12,032	)	$	(36,516	)	$	(26,412	)
Akcea's share of TTR development expense reflected    in research and development expense in our    condensed consolidated statement of operations	$	(8,290	)	$	(5,265	)	$	(16,480	)	$	(11,398	)

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 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 June 30, 2020 we owed Ionis $5.3 million. As of December 31, 2019, Ionis owed us $3.2 million.

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Operating expenses:
Services performed by Ionis	$	1,903		$	1,075		$	3,806		$	2,150
Active pharmaceutical ingredient manufactured by    Ionis		7,571			—			7,571			—
Sublicensing expenses		—			3,000			—			78,000
Out-of-pocket expenses paid by Ionis		1,453			1,275			2,038			2,846
Royalty expense		613			—			1,417			—
Less: commercial share of loss in connection with    the TTR license transaction		(3,183	)		(11,465	)		(10,081	)		(20,521	)
Less: R&D share of loss in connection with the    TTR license transaction		2,243			1,204			3,417			408
Total operating expenses (income) generated by     transactions with Ionis		10,600			(4,911	)		8,168			62,883
Plus: distribution to Ionis		—			—			—			13,492
Total net charges generated by transactions with Ionis		10,600			(4,911	)		8,168			76,375
(Receivable) payable balance (from) to Ionis at the    beginning of the period		(2,432	)		(7,206	)		(3,231	)		18,901
Less: total amounts received from (paid to) Ionis    during the period		2,432			4,206			5,663			(28,187	)
Less: receivable from Ionis		(5,280	)		—			(5,280	)		—
Less: non-cash sublicensing expenses		—			—			—			(75,000	)
Total amount payable (receivable) to (from) Ionis    at period end	$	5,320		$	(7,911	)	$	5,320		$	(7,911	)

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

10. Stock-Based Compensation

Stock Plans

2015 Equity Incentive Plan

In the second quarter of 2020, we increased the number of shares of common stock available for issuance under the 2015 Equity Incentive Plan, or 2015 Plan, by 5,000,000 shares to support future equity-based compensation. As of June 30, 2020, the aggregate number of shares of common stock that may be issued pursuant to stock awards under the 2015 Plan, was 23,500,000 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, or RSUs. At June 30, 2020, a total of 10,388,835 stock options were outstanding, of which 3,569,106 were exercisable, 1,502,975 RSU awards were outstanding, and 6,607,438 shares were available for future grant under the 2015 Plan.

2017 Employee Stock Purchase Plan

On January 1, 2020, 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 2017 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 June 30, 2020, the aggregate number of shares of common stock reserved under the 2017 ESPP was 2,000,000 and we had 1,893,951 shares available for future issuance under the 2017 ESPP. During the three and six months ended June 30, 2020, no shares and 34,774 shares were issued under our 2017 ESPP, respectively. At June 30, 2020, accrued compensation included $0.3 million of 2017 ESPP contributions for which we anticipate issuing the related shares in the third quarter of 2020.

Stock-based Compensation Expense

We measure stock-based compensation expense for equity-classified awards related to stock options, 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 statement 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 six months ended June 30, 2020 and 2019, we used the following weighted-average assumptions in our Black-Scholes calculations:

Employee Stock Options:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		1.3	%		2.5	%
Dividend yield		0.0	%		0.0	%
Volatility		74.5	%		76.3	%
Expected life	6.1 years			6.1 years

Board of Directors Stock Options:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		0.8	%		1.9	%
Dividend yield		0.0	%		0.0	%
Volatility		75.3	%		74.3	%
Expected life	5.7 years			6.3 years

2017 ESPP:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		1.0	%		2.5	%
Dividend yield		0.0	%		0.0	%
Volatility		71.9	%		64.1	%
Expected life	6 months			6 months

The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2020 and 2019 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Cost of sales - product	$	350	$	137	$	587	$	255
Research and development expenses		3,484		2,563		4,833		6,484
Selling, general and administrative expenses		12,287		11,663		17,982		26,184
Total	$	16,121	$	14,363	$	23,402	$	32,923

As of June 30, 2020, total unrecognized, estimated non-cash stock-based compensation expense related to unvested stock options and RSUs was $53.2 million and $18.9 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 unvested stock options and RSUs over a weighted average amortization period of 1.5 years and 1.6 years, respectively.

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Basic and Diluted Net Loss Per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Basic and Diluted Net Loss Per Share

11. Basic and Diluted Net Loss Per Share

In the first quarter of 2019, we purchased inventory from Ionis and the amount paid to Ionis was in excess of Ionis’ carrying value of the related assets acquired. In accordance with accounting guidance for common control transactions, this distribution was treated as a dividend to Ionis; therefore, we have applied the two-class method of net loss per share to reflect the allocation of this distribution to the participating Ionis common shares.

The two-class method is an earnings allocation formula that determines net 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 net 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 net 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 number of common shares outstanding during the requisite period.

The following table summarizes the distributable losses for the three and six months ended June 30, 2020 and 2019 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net loss	$	(49,577	)	$	(37,323	)	$	(92,427	)	$	(10,136	)
Distributions to Ionis		—			—			—			(13,492	)
Distributable losses	$	(49,577	)	$	(37,323	)	$	(92,427	)	$	(23,628	)

The following table summarizes the reconciliation of weighted-average shares outstanding used in the calculation of basic loss per share for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Determination of shares:
Weighted-average common shares outstanding    owned by Ionis		77,094,682		70,221,338		77,094,682		69,406,181
Weighted-average common shares outstanding    owned by others		24,381,592		22,573,900		24,195,990		22,351,368
Total weighted-average common shares outstanding		101,476,274		92,795,238		101,290,672		91,757,549

The following table summarizes the calculation of basic loss per share for the three and six months ended June 30, 2020 and 2019 (in thousands, except share and per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Losses allocated to Ionis	$	(37,665	)	$	(28,244	)	$	(70,348	)	$	(17,872	)
Plus: Distribution to Ionis		—			—			—			13,492
Losses available to Ionis	$	(37,665	)	$	(28,244	)	$	(70,348	)	$	(4,380	)
Weighted-average common shares outstanding    owned by Ionis		77,094,682			70,221,338			77,094,682			69,406,181
Basic loss per common share owned by Ionis	$	(0.49	)	$	(0.40	)	$	(0.91	)	$	(0.06	)
Losses allocated to common shares owned by    others	$	(11,912	)	$	(9,079	)	$	(22,079	)	$	(5,756	)
Weighted-average common shares outstanding    owned by others		24,381,592			22,573,900			24,195,990			22,351,368
Basic loss per common share owned by others	$	(0.49	)	$	(0.40	)	$	(0.91	)	$	(0.26	)

For the three and six months ended June 30, 2020 and June 30, 2019 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 RSUs; and

• Employee Stock Purchase Plan.

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Contractual Obligations and Commitments

6 Months Ended

Jun. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Contractual Obligations and Commitments

12. Contractual Obligations and Commitments

Operating Lease

The following table summarizes the contractual lease obligations as of June 30, 2020 (in thousands):

Years ended December 31,	Operating Leases
Remainder of 2020	$	1,215
2021		2,371
2022		2,403
2023		2,400
2024		2,395
Thereafter		9,565
Total minimum lease payments	$	20,349

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 June 30, 2020, our purchase commitments for the following 12 months were $1.1 million.

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Income Taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

13. Income Taxes

We recorded an income tax benefit of $0.6 million and $1.4 million for the three and six months ended June 30, 2020, respectively, compared to income tax expense of $0.2 million and $0.3 million for the same periods in 2019. We recorded an income tax benefit for the six months ended June 30, 2020 primarily due to the tax benefit of $1.7 million related to the Coronavirus, Aid, Relief and Economic Security Act, or CARES Act, signed into law on March 27, 2020, which is partially offset by income tax expense related to taxable income earned in certain foreign jurisdictions.

Under the Tax Cut and Jobs Act of 2017, or the Tax Act, federal net operating losses incurred in 2018 and in future years could be carried forward indefinitely, but the deductibility of such federal net operating losses was limited. The CARES Act temporarily removes the limitation on net operating loss deductions, resulting in the $1.7 million tax benefit recorded for the six months ended June 30, 2020. The limitation on the deductibility of federal net operating losses is reinstated for tax years beginning after 2020.

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Legal Proceedings

6 Months Ended

Jun. 30, 2020

Loss Contingency Information About Litigation Matters [Abstract]

Legal Proceedings

14. Legal Proceedings

On July 16, 2020, a purported Company stockholder filed an action in the Delaware Court of Chancery captioned John Makris, et al. v. Stanley T. Crooke, et al., C.A. No. 2020-0587, or the “Delaware Action.” The plaintiff in the Delaware Action asserts claims against (i) current and former members of our board of directors; and (ii) Ionis Pharmaceuticals, Inc., or collectively, the Defendants. The plaintiff asserts derivative claims on behalf of Akcea, which is a nominal defendant in the Delaware Action, as well as putatively direct claims on behalf of a purported class of our stockholders. The plaintiff in the Delaware action asserts that the Defendants breached their fiduciary duties in connection with the licensing transaction that we and Ionis entered into regarding inotersen and AKCEA-TTR-L_Rx. The plaintiff also asserts an unjust enrichment claim against Ionis. The plaintiff’s claims are similar to those asserted in a prior action in the Delaware Court of Chancery captioned City of Cambridge Retirement System v. Crooke, et al., C.A. No. 2019-0905, which was dismissed with prejudice to the named plaintiff only on April 8, 2020. We believe that the claims asserted in the Delaware Action are without merit and anticipate filing a motion to dismiss the claims.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2020

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, the accrual for research and development expenses, stock-based compensation and income taxes. 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.

Concentration of Credit Risk

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents, short-term investments and accounts receivable. We place our cash, cash equivalents and short-term investments with reputable financial institutions. We primarily invest our excess cash in commercial paper 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 Standard & Poor's, or S&P, Moody's, 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.

New Accounting Pronouncements - Recently Issued

New Accounting Pronouncements – Recently Issued

In June 2016, the Financial Accounting Standards Board, or FASB, issued guidance that changes the measurement of credit losses for most financial assets and certain other instruments. This standard requires us to estimate the expected credit loss of an instrument over its lifetime using an expected credit loss model, 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. We adopted this guidance on January 1, 2020 and it did not have 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. We adopted this guidance on January 1, 2020 on a prospective basis and it did not have a significant impact on our condensed consolidated financial statements and 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 implemented 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 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 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 sales to third parties, we do not recognize revenue for the transaction.  

We adopted this guidance on January 1, 2020 and it did not have a significant impact on our condensed consolidated financial statements and disclosures.

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Net Product Revenue (Tables)

6 Months Ended

Jun. 30, 2020

Revenue From Contract With Customer [Abstract]

Summary of Balances and Activity in Each of Product Revenue Allowance and Reserve Categories

The following table summarizes balances and activity in each of our product revenue allowance and reserve categories (in thousands):

	Chargebacks, discounts and fees			Government and other rebates			Returns		Total
Balance at December 31, 2019	$	270		$	1,353		$	197	$	1,820
Provision related to current period sales		1,044			4,830			58		5,932
Adjustment related to prior period sales		(66	)		83			—		17
Credits or payments made during the period		(1,093	)		(1,790	)		—		(2,883	)
Balance at June 30, 2020	$	155		$	4,476		$	255	$	4,886
Balance at December 31, 2018	$	50		$	293		$	5	$	348
Provision related to current period sales		438			774			138		1,350
Adjustment related to prior period sales		(4	)		(25	)		—		(29	)
Credits or payments made during the period		(311	)		(210	)		—		(521	)
Balance at June 30, 2019	$	173		$	832		$	143	$	1,148

Summary of Balance of Receivables and Contract Liabilities Related to Net Product Revenue

The following table presents the balance of our receivables and contract liabilities related to net product revenue (in thousands):

	June 30, 2020		December 31, 2019
Receivables included in "Accounts receivable"	$	13,536	$	6,946
Contract liabilities included in "Accrued liabilities"		4,632		1,550

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Revenue from Collaboration and License Agreements (Tables)

6 Months Ended

Jun. 30, 2020

Summary of Net Revenue from Partners in Connection with Collaboration and License Agreements

Net revenue from our partners in connection with our collaboration and license agreements consisted of the following (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
License Agreement with Pfizer	$	5,735	$	—	$	6,339	$	—
Strategic Collaboration with Novartis		278		10,722		589		167,784
Collaboration and License Agreement with    PTC Therapeutics		—		6,036		—		6,036
Total net revenue from partners	$	6,013	$	16,758	$	6,928	$	173,820

Summary of Balance of Receivables and Contract Liabilities Related to Net Product Revenue

The following table presents the balance of our receivables and contract liabilities related to net product revenue (in thousands):

	June 30, 2020		December 31, 2019
Receivables included in "Accounts receivable"	$	13,536	$	6,946
Contract liabilities included in "Accrued liabilities"		4,632		1,550

Summary of Revenue Recognized of Change in Contract Liability Balances Related to Collaboration and License Agreements Associated with Partners

During the three and six months ended June 30, 2020, we recognized the following revenue as a result of the change in the contract liability balances related to our collaboration and license agreements associated with our partners (in thousands):

	Three Months Ended June 30, 2020		Six Months Ended June 30, 2020
Revenue recognized in current period from:
Amounts included in deferred revenue at the beginning    of the period	$	455	$	1,059

Collaboration and License Agreements [Member]

Summary of Balance of Receivables and Contract Liabilities Related to Net Product Revenue

The following table presents the balance of our receivables and contract liabilities related to our collaboration and license agreements associated with our partners (in thousands):

	June 30, 2020		December 31, 2019
Receivables included in "Accounts receivable"	$	513	$	3,550
Contract liabilities included in "Deferred revenue"		263		1,322

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Investments and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2020

Investments And Fair Value Measurements [Abstract]

Summary of Investments

The following is a summary of our investments at June 30, 2020 and December 31, 2019 (in thousands):

			Gross Unrealized					Estimated
June 30, 2020	Cost		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	81,143	$	374	$	(1	)	$	81,516
Debt securities issued by U.S. government agencies		118,414		489		(5	)		118,898
Total securities with a maturity of one year or less	$	199,557	$	863	$	(6	)	$	200,414
Corporate debt securities	$	30,878	$	354	$	-		$	31,232
Debt securities issued by U.S. government agencies		22,272		230		(4	)		22,498
Total securities with a maturity of one to two years		53,150		584		(4	)		53,730
Total available-for-sale securities	$	252,707	$	1,447	$	(10	)	$	254,144

			Gross Unrealized					Estimated
December 31, 2019	Cost		Gains		Losses			Fair Value
Available-for-sale securities:
Corporate debt securities	$	105,679	$	40	$	(23	)	$	105,696
Debt securities issued by U.S. government agencies		38,970		30		(6	)		38,994
Total securities with a maturity of one year or less	$	144,649	$	70	$	(29	)	$	144,690
Corporate debt securities	$	2,033	$	5	$	—		$	2,038
Debt securities issued by U.S. government agencies		14,079		—		(3	)		14,076
Total securities with a maturity of one to two years		16,112		5		(3	)		16,114
Total available-for-sale securities	$	160,761	$	75	$	(32	)	$	160,804

Assets Measured at Fair Value on a Recurring Basis

The following tables present the investments we held at June 30, 2020 and December 31, 2019 that are regularly measured and carried at fair value. The table segregates our investments by level within the fair value hierarchy of valuation techniques used to determine their fair value (in thousands):

	At June 30, 2020		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Money market funds (1)	$	105,972	$	105,972	$	—
Corporate debt securities (3)		112,749		—		112,749
Debt securities issued by U.S. government agencies (3)		141,395		—		141,395
Total	$	360,116	$	105,972	$	254,144

	At December 31, 2019		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)
Money market funds (1)	$	285,510	$	285,510	$	—
Corporate debt securities (2)		107,735		—		107,735
Debt securities issued by U.S. government agencies (3)		53,069		—		53,069
Total	$	446,314	$	285,510	$	160,804

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

(2) At December 31, 2019, $4.0 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 sheet.

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Property, Plant and Equipment (Table)

6 Months Ended

Jun. 30, 2020

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):

	June 30,			December 31,
	2020			2019
Furniture and fixtures	$	1,819		$	1,611
Computer equipment and software		459			289
Manufacturing equipment		454			416
Leasehold improvements		4,597			3,955
Total property and equipment, at cost		7,329			6,271
Less accumulated depreciation and amortization		(1,434	)		(1,010	)
Total property and equipment, net	$	5,895		$	5,261

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Inventories (Tables)

6 Months Ended

Jun. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventories

The following table presents inventories (in thousands):

	June 30,		December 31,
	2020		2019
Raw materials	$	9,544	$	6,520
Work in process		3,471		2,039
Finished goods		741		258
Total inventories	$	13,756	$	8,817

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Intangible Assets, Net (Tables)

6 Months Ended

Jun. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets, Net

The following table presents intangible assets (in thousands):

	June 30,			December 31,			Estimated
	2020			2019			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		(12,135	)		(9,211	)
Total intangible assets, net	$	80,127		$	83,051

Schedule of Estimated Future Amortization Expenses for Intangible Assets

Estimated future amortization expense for intangible assets as of June 30, 2020 is as follows (in thousands):

Years ended December 31,	Intangible Assets
Remainder of 2020	$	2,955
2021		5,861
2022		5,856
2023		5,843
2024		5,822
Thereafter		53,790
	$	80,127

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License Agreements and Services Agreement with Ionis (Tables)

6 Months Ended

Jun. 30, 2020

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 License Agreement is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net losses incurred by the collaboration related    to the commercial activities under the TTR    License Agreement	$	(5,922	)	$	(19,109	)	$	(17,724	)	$	(34,207	)
Ionis' share of commercial losses under the    TTR License Agreement reflected in our    condensed consolidated statement of operations		(3,448	)		(11,465	)		(10,499	)		(20,521	)
Akcea's share of commercial losses under the    TTR License Agreement reflected in our condensed    consolidated statement of operations	$	(2,474	)	$	(7,644	)	$	(7,225	)	$	(13,686	)

Schedule Of Development Expenses Related to TTR Agreement

A summary of the development expenses related to the TTR Agreement is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Total development expense incurred by the    collaboration related to development activities    under the TTR License Agreement	$	(18,185	)	$	(12,032	)	$	(36,516	)	$	(26,412	)
Akcea's share of TTR development expense reflected    in research and development expense in our    condensed consolidated statement of operations	$	(8,290	)	$	(5,265	)	$	(16,480	)	$	(11,398	)

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 License Agreement for the following periods (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Operating expenses:
Services performed by Ionis	$	1,903		$	1,075		$	3,806		$	2,150
Active pharmaceutical ingredient manufactured by    Ionis		7,571			—			7,571			—
Sublicensing expenses		—			3,000			—			78,000
Out-of-pocket expenses paid by Ionis		1,453			1,275			2,038			2,846
Royalty expense		613			—			1,417			—
Less: commercial share of loss in connection with    the TTR license transaction		(3,183	)		(11,465	)		(10,081	)		(20,521	)
Less: R&D share of loss in connection with the    TTR license transaction		2,243			1,204			3,417			408
Total operating expenses (income) generated by     transactions with Ionis		10,600			(4,911	)		8,168			62,883
Plus: distribution to Ionis		—			—			—			13,492
Total net charges generated by transactions with Ionis		10,600			(4,911	)		8,168			76,375
(Receivable) payable balance (from) to Ionis at the    beginning of the period		(2,432	)		(7,206	)		(3,231	)		18,901
Less: total amounts received from (paid to) Ionis    during the period		2,432			4,206			5,663			(28,187	)
Less: receivable from Ionis		(5,280	)		—			(5,280	)		—
Less: non-cash sublicensing expenses		—			—			—			(75,000	)
Total amount payable (receivable) to (from) Ionis    at period end	$	5,320		$	(7,911	)	$	5,320		$	(7,911	)

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Stockholders Equity [Abstract]

Weighted-Average Assumptions for Stock Options

For the six months ended June 30, 2020 and 2019, we used the following weighted-average assumptions in our Black-Scholes calculations:

Employee Stock Options:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		1.3	%		2.5	%
Dividend yield		0.0	%		0.0	%
Volatility		74.5	%		76.3	%
Expected life	6.1 years			6.1 years

Board of Directors Stock Options:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		0.8	%		1.9	%
Dividend yield		0.0	%		0.0	%
Volatility		75.3	%		74.3	%
Expected life	5.7 years			6.3 years

2017 ESPP:

	Six Months Ended June 30,
	2020			2019
Risk-free interest rate		1.0	%		2.5	%
Dividend yield		0.0	%		0.0	%
Volatility		71.9	%		64.1	%
Expected life	6 months			6 months

Stock-Based Compensation Expense

The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2020 and 2019 (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Cost of sales - product	$	350	$	137	$	587	$	255
Research and development expenses		3,484		2,563		4,833		6,484
Selling, general and administrative expenses		12,287		11,663		17,982		26,184
Total	$	16,121	$	14,363	$	23,402	$	32,923

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Basic and Diluted Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Basic Loss Per Share

The following table summarizes the distributable losses for the three and six months ended June 30, 2020 and 2019 (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Net loss	$	(49,577	)	$	(37,323	)	$	(92,427	)	$	(10,136	)
Distributions to Ionis		—			—			—			(13,492	)
Distributable losses	$	(49,577	)	$	(37,323	)	$	(92,427	)	$	(23,628	)

The following table summarizes the reconciliation of weighted-average shares outstanding used in the calculation of basic loss per share for the three and six months ended June 30, 2020 and 2019:

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Determination of shares:
Weighted-average common shares outstanding    owned by Ionis		77,094,682		70,221,338		77,094,682		69,406,181
Weighted-average common shares outstanding    owned by others		24,381,592		22,573,900		24,195,990		22,351,368
Total weighted-average common shares outstanding		101,476,274		92,795,238		101,290,672		91,757,549

The following table summarizes the calculation of basic loss per share for the three and six months ended June 30, 2020 and 2019 (in thousands, except share and per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Losses allocated to Ionis	$	(37,665	)	$	(28,244	)	$	(70,348	)	$	(17,872	)
Plus: Distribution to Ionis		—			—			—			13,492
Losses available to Ionis	$	(37,665	)	$	(28,244	)	$	(70,348	)	$	(4,380	)
Weighted-average common shares outstanding    owned by Ionis		77,094,682			70,221,338			77,094,682			69,406,181
Basic loss per common share owned by Ionis	$	(0.49	)	$	(0.40	)	$	(0.91	)	$	(0.06	)
Losses allocated to common shares owned by    others	$	(11,912	)	$	(9,079	)	$	(22,079	)	$	(5,756	)
Weighted-average common shares outstanding    owned by others		24,381,592			22,573,900			24,195,990			22,351,368
Basic loss per common share owned by others	$	(0.49	)	$	(0.40	)	$	(0.91	)	$	(0.26	)

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Contractual Obligations and Commitments (Tables)

6 Months Ended

Jun. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Summary of the Contractual Lease Obligations

The following table summarizes the contractual lease obligations as of June 30, 2020 (in thousands):

Years ended December 31,	Operating Leases
Remainder of 2020	$	1,215
2021		2,371
2022		2,403
2023		2,400
2024		2,395
Thereafter		9,565
Total minimum lease payments	$	20,349

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Organization and Basis of Presentation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Basis of Presentation and Organization [Abstract]
Cash, Cash Equivalents, and Short-term Investments	$ 389,900		$ 389,900
Accumulated deficit	573,697		573,697		$ 481,270
Net loss	$ 49,577	$ 37,323	92,427	$ 10,136
Net cash used in operating activities			$ (77,528)	$ 49,823
Ionis [Member] | Akcea [Member]
Basis of Presentation and Organization [Abstract]
Ownership percentage by Ionis	76.00%		76.00%

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Net Product Revenue - Narratives (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation Of Revenue [Line Items]
Product revenue, net	$ 22,377	$ 26,623	$ 38,451	$ 190,439
Product [Member]
Disaggregation Of Revenue [Line Items]
Product revenue, net	$ 16,364	$ 9,865	$ 31,523	$ 16,619

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Net Product Revenue - Summary of Balances and Activity in Each of Product Revenue Allowance and Reserve Categories (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at December 31, 2019	$ 1,820	$ 348
Provision related to current period sales	5,932	1,350
Adjustment related to prior period sales	17	(29)
Credits or payments made during the period	(2,883)	(521)
Balance at June 30, 2020	4,886	1,148
Chargebacks, Discounts and Fees [Member]
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at December 31, 2019	270	50
Provision related to current period sales	1,044	438
Adjustment related to prior period sales	(66)	(4)
Credits or payments made during the period	(1,093)	(311)
Balance at June 30, 2020	155	173
Government and Other Rebates [Member]
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at December 31, 2019	1,353	293
Provision related to current period sales	4,830	774
Adjustment related to prior period sales	83	(25)
Credits or payments made during the period	(1,790)	(210)
Balance at June 30, 2020	4,476	832
Returns [Member]
Valuation And Qualifying Accounts Disclosure [Line Items]
Balance at December 31, 2019	197	5
Provision related to current period sales	58	138
Adjustment related to prior period sales	0	0
Credits or payments made during the period	0	0
Balance at June 30, 2020	$ 255	$ 143

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Net Product Revenue - Summary of Balance of Receivables and Contract Liabilities Related to Net Product Revenue (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Disaggregation Of Revenue [Line Items]
Accounts receivable	$ 14,049	$ 10,496
Contract liabilities included in "Accrued liabilities"	263	2,165
Accounts Receivable [Member]
Disaggregation Of Revenue [Line Items]
Accounts receivable	13,536	6,946
Accrued Liabilities [Member]
Disaggregation Of Revenue [Line Items]
Contract liabilities included in "Accrued liabilities"	$ 4,632	$ 1,550

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Revenue from Collaboration and License Agreements - Summary of Net Revenue from Partners in Connection with Collaboration and License Agreements (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue	$ 22,377		$ 26,623	$ 38,451	$ 190,439
Collaboration and License Agreement with PTC Therapeutics [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue		$ 4,000	6,000
Licensing Revenue and Research and Development and License Revenue Under Collaborative Agreement [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue	6,013		16,758	6,928	173,820
Licensing Revenue and Research and Development and License Revenue Under Collaborative Agreement [Member] | License Agreement with Pfizer [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue	5,735			6,339
Licensing Revenue and Research and Development and License Revenue Under Collaborative Agreement [Member] | Strategic Collaboration with Novartis [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue	$ 278		10,722	$ 589	167,784
Licensing Revenue and Research and Development and License Revenue Under Collaborative Agreement [Member] | Collaboration and License Agreement with PTC Therapeutics [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue			$ 6,036		$ 6,036

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Revenue from Collaboration and License Agreements - Summary of Receivables and Contract Liabilities Related to Collaboration and License Agreements Associated with Partners (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Receivables included in "Accounts receivable"	$ 14,049	$ 10,496
Contract liabilities included in "Deferred revenue"	263	2,165
Accounts Receivable [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Receivables included in "Accounts receivable"	13,536	6,946
Deferred Revenue [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Contract liabilities included in "Deferred revenue"	4,632	1,550
Collaboration and License Agreements [Member] | Accounts Receivable [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Receivables included in "Accounts receivable"	513	3,550
Collaboration and License Agreements [Member] | Deferred Revenue [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Contract liabilities included in "Deferred revenue"	$ 263	$ 1,322

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Revenue from Collaboration and License Agreements - Summary of Revenue Recognized of Change in Contract Liability Balances Related to Collaboration and License Agreements Associated with Partners (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020
Collaboration and License Agreements [Member]
Revenue recognized in current period from:
Amounts included in deferred revenue at the beginning of the period	$ 455	$ 1,059

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Revenue from Collaboration and License Agreements - Narratives (Details)		1 Months Ended		3 Months Ended			6 Months Ended
	Aug. 01, 2018 USD ($)	May 31, 2019 USD ($)	Feb. 28, 2019 USD ($)	Jun. 30, 2020 USD ($)	Dec. 31, 2019 USD ($) shares	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) shares	Jun. 30, 2019 USD ($)	Oct. 31, 2019 USD ($) PerformanceObligation
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue				$ 22,377,000		$ 26,623,000	$ 38,451,000	$ 190,439,000
Cardiometabolic License Agreement [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Sublicense fee paid		$ 3,000,000.0
TTR License Agreement [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Sublicense fee paid		2,400,000
Ionis [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Sublicense fee paid				75,000,000.0			$ 75,000,000.0
Ionis [Member] | Common Stock [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Issuance of stock (in shares) | shares							2,837,373
Licensing [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue			$ 150,000,000.0			6,036,000		$ 6,036,000
AKCEA-APO(a)-L [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Maximum amount of payments receivable for milestones				675,000,000.0			$ 675,000,000.0
Maximum amount of payments receivable for development milestones				25,000,000.0			25,000,000.0
Maximum amount of payments receivable for regulatory milestones				290,000,000.0			290,000,000.0
Maximum amount of payments receivable for commercialization milestones				360,000,000.0			$ 360,000,000.0
Royalty percentage received on sales of drug							20.00%
License Agreement with Pfizer [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Upfront payment received					$ 250,000,000.0
Issuance of stock (in shares) | shares					6,873,344
Sublicense fee paid					$ 125,000,000.0
Number of separate performance obligations | PerformanceObligation									3
Upfront license fee receivable					250,000,000.0
Transaction price					250,000,000.0
Revenue recognized upon delivery of the vupanorasen API							$ 5,300,000
Revenue recognized from deferred revenue				500,000			1,100,000
Deferred revenue				300,000	1,300,000		300,000
License Agreement with Pfizer [Member] | Transfer of License of AKCEA-ANGPTL3-LRx [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Transaction price					245,600,000
License Agreement with Pfizer [Member] | Development services for AKCEA-ANGPTL3-LRx [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Transaction price					2,200,000
License Agreement with Pfizer [Member] | Delivery of AKCEA-ANGPTL3-LRx API [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Transaction price					2,200,000
License Agreement with Pfizer [Member] | AKCEA-ANGPTL3-LRx [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Maximum amount of payments receivable for milestones					1,300,000,000
Maximum amount of payments receivable for development milestones					205,000,000.0
Maximum amount of payments receivable for regulatory milestones					250,000,000.0
Maximum amount of payments receivable for commercialization milestones					850,000,000.0
Next prospective milestone					$ 75,000,000.0
Royalty percentage received on sales of drug					20.00%
Novartis [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Next prospective milestone				25,000,000.0			25,000,000.0
Novartis [Member] | AKCEA-APOCIII-LRx [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Amount expended on research and development expense							$ 2,300,000
Collaboration and License Agreement with PTC Therapeutics [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue					$ 4,000,000.0	$ 6,000,000.0
Milestone payment received		$ 6,000,000.0							$ 4,000,000.0
Collaboration and License Agreement with PTC Therapeutics [Member] | Akcea [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue recognized upon delivery of the vupanorasen API	$ 10,000,000.0
Additional amount of payments receivable per drug for regulatory milestone	$ 4,000,000.0
Period before PTC pays royalties on net sales of product after first commercial sale in Brazil	12 months
Collaboration and License Agreement with PTC Therapeutics [Member] | TEGSEDI [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Revenue				$ 0
Collaboration and License Agreement with PTC Therapeutics [Member] | TEGSEDI [Member] | Akcea [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Milestone payments and royalties retained percentage	40.00%
Collaboration and License Agreement with PTC Therapeutics [Member] | TEGSEDI [Member] | Ionis [Member]
Collaborative Arrangements And Noncollaborative Arrangement Transactions [Line Items]
Milestone payments and royalties payable percentage	60.00%

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Investments and Fair Value Measurements - Summary of Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Summary of Investments [Abstract]
Cost	$ 252,707	$ 160,761
Gross unrealized gains	1,447	75
Gross unrealized losses	(10)	(32)
Estimated fair value	254,144	160,804
Securities with Maturity of One Year or Less [Member]
Summary of Investments [Abstract]
Cost	199,557	144,649
Gross unrealized gains	863	70
Gross unrealized losses	(6)	(29)
Estimated fair value	200,414	144,690
Securities with Maturity of More than One Year [Member]
Summary of Investments [Abstract]
Cost	53,150	16,112
Gross unrealized gains	584	5
Gross unrealized losses	(4)	(3)
Estimated fair value	53,730	16,114
Corporate Debt Securities [Member] | Securities with Maturity of One Year or Less [Member]
Summary of Investments [Abstract]
Cost	81,143	105,679
Gross unrealized gains	374	40
Gross unrealized losses	(1)	(23)
Estimated fair value	81,516	105,696
Corporate Debt Securities [Member] | Securities with Maturity of More than One Year [Member]
Summary of Investments [Abstract]
Cost	30,878	2,033
Gross unrealized gains	354	5
Estimated fair value	31,232	2,038
Debt Securities Issued by U.S. Government Agencies [Member] | Securities with Maturity of One Year or Less [Member]
Summary of Investments [Abstract]
Cost	118,414	38,970
Gross unrealized gains	489	30
Gross unrealized losses	(5)	(6)
Estimated fair value	118,898	38,994
Debt Securities Issued by U.S. Government Agencies [Member] | Securities with Maturity of More than One Year [Member]
Summary of Investments [Abstract]
Cost	22,272	14,079
Gross unrealized gains	230
Gross unrealized losses	(4)	(3)
Estimated fair value	$ 22,498	$ 14,076

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Investments and Fair Value Measurements - Fair Value Measurements (Details) - USD ($) $ in Thousands		Jun. 30, 2020		Dec. 31, 2019
Fair Value Measurements [Abstract]
Available-for-sale securities		$ 254,144		$ 160,804
Recurring Basis [Member]
Fair Value Measurements [Abstract]
Money market funds	[1]	105,972		285,510
Total		360,116		446,314
Recurring Basis [Member] | Corporate Debt Securities [Member]
Fair Value Measurements [Abstract]
Available-for-sale securities		112,749	[2]	107,735	[3]
Recurring Basis [Member] | Corporate Debt Securities [Member] | Cash and Cash Equivalents [Member]
Fair Value Measurements [Abstract]
Available-for-sale securities				4,000
Recurring Basis [Member] | Debt Securities Issued by U.S. Government Agencies [Member]
Fair Value Measurements [Abstract]
Available-for-sale securities	[2]	141,395		53,069
Recurring Basis [Member] | Quoted Prices in Active Markets (Level 1) [Member]
Fair Value Measurements [Abstract]
Money market funds	[1]	105,972		285,510
Total		105,972		285,510
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member]
Fair Value Measurements [Abstract]
Total		254,144		160,804
Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate Debt Securities [Member]
Fair Value Measurements [Abstract]
Available-for-sale securities		112,749	[2]	107,735	[3]
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	[2]	$ 141,395		$ 53,069

[1] Included in cash and cash equivalents on our condensed consolidated balance sheet

[2] Included in short-term investments on our condensed consolidated balance sheet

[3] At December 31, 2019, $4.0 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

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Property Plant and Equipment - Summary of Property and Equipment at Cost and Related Accumulated Depreciation (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Property Plant And Equipment [Line Items]
Property and equipment, at cost	$ 7,329	$ 6,271
Less accumulated depreciation and amortization	(1,434)	(1,010)
Total property and equipment, net	5,895	5,261
Furniture And Fixtures [Member]
Property Plant And Equipment [Line Items]
Property and equipment, at cost	1,819	1,611
Computer Equipment And Software [Member]
Property Plant And Equipment [Line Items]
Property and equipment, at cost	459	289
Manufacturing Equipment [Member]
Property Plant And Equipment [Line Items]
Property and equipment, at cost	454	416
Leasehold Improvements [Member]
Property Plant And Equipment [Line Items]
Property and equipment, at cost	$ 4,597	$ 3,955

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Property Plant Equipment - Narratives (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Property Plant And Equipment [Abstract]
Depreciation	$ 200	$ 200	$ 424	$ 400

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Inventories - Schedule of Inventories (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Raw materials	$ 9,544	$ 6,520
Work in process	3,471	2,039
Finished goods	741	258
Total inventories	$ 13,756	$ 8,817

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Intangible Assets, Net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Finite Lived Intangible Assets [Line Items]
Less accumulated amortization	$ (12,135)	$ (9,211)
Total intangible assets, net	80,127	83,051
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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Intangible Assets, Net - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Finite Lived Intangible Assets [Line Items]
Amortization of intangibles	$ 1,400	$ 1,500	$ 2,924	$ 2,908
Patents [Member]
Finite Lived Intangible Assets [Line Items]
Weighted average remaining amortizable life			10 years 7 months 6 days

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Intangible Assets, Net - Schedule of Estimated Future Amortization Expenses for Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Goodwill And Intangible Assets Disclosure [Abstract]
Remainder of 2020	$ 2,955
2021	5,861
2022	5,856
2023	5,843
2024	5,822
Thereafter	53,790
Total intangible assets, net	$ 80,127	$ 83,051

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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	6 Months Ended
	Jun. 30, 2020 USD ($) Patient qtr
Development, Commercialization and License Agreement with Ionis [Abstract]
Royalty percentage paid on sales of lipid medicines	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 Ionis	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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License Agreements and Services Agreement with Ionis, TTR Development, Commercialization, Collaboration and License Agreement (Details) $ in Thousands				3 Months Ended		6 Months Ended		12 Months Ended
	Oct. 17, 2018 USD ($) shares	Aug. 03, 2018 USD ($) shares	Apr. 17, 2018 USD ($) Milestone shares	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Dec. 31, 2018 USD ($) shares	Dec. 31, 2019 USD ($)	Mar. 31, 2019 USD ($)
TTR Development, Commercialization, Collaboration and License Agreement [Abstract]
Intangible assets, net				$ 80,127		$ 80,127			$ 83,051
Amortization expense of intangible assets				1,418	$ 1,419	2,837	$ 2,822
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 license 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
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] | Ionis Stock Purchase Agreement [Member]
TTR Development, Commercialization, Collaboration and License Agreement [Abstract]
Common stock shares issued to Ionis | shares								10,700,000
Stock purchased by Ionis								$ 200,000
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 intangible assets				$ 1,400	$ 1,400	$ 2,800	$ 2,800
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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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		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Related Party Transaction [Line Items]
Net losses incurred by the collaboration related to the commercial activities under the TTR License Agreement	$ (5,922)	$ (19,109)	$ (17,724)	$ (34,207)
Akcea [Member]
Related Party Transaction [Line Items]
Akcea's share of commercial losses under the TTR License Agreement reflected in our condensed consolidated statement of operations	(2,474)	(7,644)	(7,225)	(13,686)
Ionis [Member]
Related Party Transaction [Line Items]
Net loss share from commercial activities under arrangement with Ionis Pharmaceuticals, Inc.	$ (3,448)	$ (11,465)	$ (10,499)	$ (20,521)

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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		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Related Party Transaction [Line Items]
Total development expense incurred by the collaboration related to development activities under the TTR License Agreement	$ (18,185)	$ (12,032)	$ (36,516)	$ (26,412)
Akcea [Member]
Related Party Transaction [Line Items]
Akcea's share of TTR development expense reflected in research and development expense in our condensed consolidated statement of operations	$ (8,290)	$ (5,265)	$ (16,480)	$ (11,398)

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License Agreements and Services Agreement with Ionis, Services Agreement (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Services Agreement with Ionis [Abstract]
Payment term after receipt of invoice			30 days
Term of extension for services agreement			6 months
Ionis [Member] | Services Agreement [Member]
Operating expenses:
Services performed by Ionis	$ 1,903	$ 1,075	$ 3,806	$ 2,150
Active pharmaceutical ingredient manufactured by Ionis	7,571		7,571
Out-of-pocket expenses paid by Ionis	1,453	1,275	2,038	2,846
Royalty expenses	613		1,417
Less: commercial share of loss in connection with the TTR license transaction	(3,183)	(11,465)	(10,081)	(20,521)
Less: R&D share of loss (income) in connection with the TTR license transaction	2,243	1,204	3,417	408
Total operating expenses (income) generated by transactions with ions	10,600	(4,911)	8,168	62,883
Sublicensing expenses		3,000		78,000
Plus: distribution to Ionis				13,492
Total net charges generated by transactions with Ionis	10,600	(4,911)	8,168	76,375
(Receivable) payable balance (from) to Ionis at the beginning of the period	(2,432)	(7,206)	(3,231)	18,901
Less: total amounts received from (paid to) Ionis during the period	2,432	4,206	5,663	(28,187)
Less: receivable from Ionis	(5,280)		(5,280)
Less: non-cash sublicensing expenses				(75,000)
Total amount payable (receivable) to (from) Ionis at period end	$ 5,320	$ (7,911)	$ 5,320	$ (7,911)

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Stock-Based Compensation - Stock Plans (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020	Jan. 01, 2020	Dec. 31, 2019
Stock Plans [Abstract]
Shares of common stock added	101,509,223	101,509,223		100,993,173
RSUs [Member]
Stock Plans [Abstract]
Unrecognized compensation expense related to RSUs	$ 18.9	$ 18.9
Weighted average amortization period		1 year 7 months 6 days
Non-vested Stock Options [Member]
Stock Plans [Abstract]
Unrecognized compensation expense related to non-vested stock options	$ 53.2	$ 53.2
Weighted average amortization period		1 year 6 months
2015 Equity Incentive Plan [Member]
Stock Plans [Abstract]
Share-based Compensation Arrangement by Share-based Payment Award, Other Share Increase (Decrease)	5,000,000
Number of shares authorized for issuance pursuant to stock awards (in shares)	23,500,000	23,500,000
Number of shares available for future grant (in shares)	6,607,438	6,607,438
2015 Equity Incentive Plan [Member] | Stock Options [Member]
Stock Plans [Abstract]
Options outstanding (in shares)	10,388,835	10,388,835
Options exercisable (in shares)	3,569,106	3,569,106
2015 Equity Incentive Plan [Member] | RSUs [Member]
Stock Plans [Abstract]
Restricted stock units outstanding (in shares)	1,502,975	1,502,975
2017 Employee Stock Purchase Plan [Member]
Stock Plans [Abstract]
Number of shares available for future grant (in shares)	1,893,951	1,893,951
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)	2,000,000	2,000,000
Shares issued under ESPP (in shares)	0	34,774
Accrued compensation for contributions to employee stock purchase plan	$ 0.3	$ 0.3

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Stock-Based Compensation - Stock-based Valuation Information (Details)	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Employee Stock Option [Member]
Weighted-Average Assumptions [Abstract]
Risk-free interest rate	1.30%	2.50%
Dividend yield	0.00%	0.00%
Volatility	74.50%	76.30%
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	0.80%	1.90%
Dividend yield	0.00%	0.00%
Volatility	75.30%	74.30%
Expected life	5 years 8 months 12 days	6 years 3 months 18 days
2017 ESPP
Weighted-Average Assumptions [Abstract]
Risk-free interest rate	1.00%	2.50%
Dividend yield	0.00%	0.00%
Volatility	71.90%	64.10%
Expected life	6 months	6 months

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Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Stock-Based Compensation [Abstract]
Stock-based compensation expense	$ 16,121	$ 14,363	$ 23,402	$ 32,923
Cost of Sales - Product [Member]
Stock-Based Compensation [Abstract]
Stock-based compensation expense	350	137	587	255
Research and Development Expenses [Member]
Stock-Based Compensation [Abstract]
Stock-based compensation expense	3,484	2,563	4,833	6,484
Selling, General and Administrative Expenses [Member]
Stock-Based Compensation [Abstract]
Stock-based compensation expense	$ 12,287	$ 11,663	$ 17,982	$ 26,184

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Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Basic and Diluted Net (Loss) Income Per Share [Abstract]
Net loss	$ (49,577)	$ (37,323)	$ (92,427)	$ (10,136)
Distributions to Ionis				(13,492)
Distributable losses	$ (49,577)	$ (37,323)	$ (92,427)	$ (23,628)
Common Stock [Member]
Basic and Diluted Net (Loss) Income Per Share [Abstract]
Weighted-average common shares outstanding owned	101,476,274	92,795,238	101,290,672	91,757,549
Ionis [Member] | Common Stock [Member]
Basic and Diluted Net (Loss) Income Per Share [Abstract]
Net loss	$ (37,665)	$ (28,244)	$ (70,348)	$ (4,380)
Distributions to Ionis				13,492
Distributable losses	$ (37,665)	$ (28,244)	$ (70,348)	$ (17,872)
Weighted-average common shares outstanding owned	77,094,682	70,221,338	77,094,682	69,406,181
Basic (loss) per common share	$ (0.49)	$ (0.40)	$ (0.91)	$ (0.06)
Others [Member] | Common Stock [Member]
Basic and Diluted Net (Loss) Income Per Share [Abstract]
Distributable losses	$ (11,912)	$ (9,079)	$ (22,079)	$ (5,756)
Weighted-average common shares outstanding owned	24,381,592	22,573,900	24,195,990	22,351,368
Basic (loss) per common share	$ (0.49)	$ (0.40)	$ (0.91)	$ (0.26)

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Contractual Obligations and Commitments - Summary of the Contractual Lease Obligations (Details) $ in Thousands	Jun. 30, 2020 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Remainder of 2020	$ 1,215
2021	2,371
2022	2,403
2023	2,400
2024	2,395
Thereafter	9,565
Total minimum lease payments	$ 20,349

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Contractual Obligations and Commitments - Narratives (Details) $ in Millions	Jun. 30, 2020 USD ($)
Commitments And Contingencies Disclosure [Abstract]
Agreement to purchase goods and services	$ 1.1

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Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ (605)	$ 160	$ (1,373)	$ 292
Tax benefit related to Coronavirus, Aid, Relief and Economic Security Act, or CARES Act			$ 1,700