SEC Form 10-Q filed by Ionis Pharmaceuticals Inc.

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 March 31, 2026

☐

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

For the transition period from _____ to _____

Commission file number 000-19125

Ionis Pharmaceuticals, Inc.

(Exact name of Registrant as specified in its charter)

Delaware		33-0336973
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

2855 Gazelle Court, Carlsbad, California		92010
(Address of Principal Executive Offices)		(Zip Code)

760-931-9200

(Registrant’s telephone number, including area code)

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


Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $.001 Par Value	“IONS”	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 and posted 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 voting common stock outstanding as of April 23, 2026 was 165,262,556.

IONIS PHARMACEUTICALS, INC.

FORM 10-Q

INDEX


PART I	FINANCIAL INFORMATION

ITEM 1:	Financial Statements:

	Condensed Consolidated Balance Sheets as of March 31, 2026 (unaudited) and December 31, 2025	3

	Condensed Consolidated Statements of Operations for the three months ended March 31, 2026 and 2025 (unaudited)	4

	Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2026 and 2025 (unaudited)	5

	Condensed Consolidated Statements of Stockholders’ Equity for the three months ended March 31, 2026 and 2025 (unaudited)	6

	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (unaudited)	7

	Notes to Condensed Consolidated Financial Statements (unaudited)	8

ITEM 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations:

	Overview	24

	Critical Accounting Estimates	27

	Results of Operations	27

	Liquidity and Capital Resources	33

ITEM 3:	Quantitative and Qualitative Disclosures about Market Risk	35

ITEM 4:	Controls and Procedures	35

PART II	OTHER INFORMATION	34

ITEM 1:	Legal Proceedings	36

ITEM 1A:	Risk Factors	36

ITEM 2:	Unregistered Sales of Equity Securities and Use of Proceeds	54

ITEM 3:	Default upon Senior Securities	54

ITEM 4:	Mine Safety Disclosures	54

ITEM 5:	Other Information	55

ITEM 6:	Exhibits	56

SIGNATURES		57

TRADEMARKS

“Ionis,” the Ionis logo, and other trademarks or service marks of Ionis Pharmaceuticals, Inc. appearing in this report are the property of Ionis Pharmaceuticals, Inc. “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., Ionis’ wholly owned subsidiary. 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.

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

IONIS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)


		March 31,			December 31,
		2026			2025
		(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	173,381		$	372,260
Short-term investments		1,745,732			2,305,176
Escrow deposit for maturity of 0 percent convertible senior notes due April 2026		632,511			-
Contracts receivable		73,684			66,059
Inventories		5,557			10,048
Other current assets		306,080			237,092
Total current assets		2,936,945			2,990,635
Property, plant and equipment, net		142,401			123,048
Right-of-use assets		235,064			238,549
Deposits and other assets		135,559			171,604
Total assets	$	3,449,969		$	3,523,836

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	26,030		$	28,082
Accrued compensation		36,049			116,236
Accrued liabilities		126,549			106,089
Income taxes payable		2,874			2,713
0 percent convertible senior notes due April 2026		432,500			431,948
Current portion of deferred contract revenue		69,199			73,761
Other current liabilities		23,390			22,738
Total current liabilities		716,591			781,567
Long-term deferred contract revenue		75,745			92,001
0 percent convertible senior notes due 2030, net		752,425			751,495
1.75 percent convertible senior notes due 2028, net		568,540			567,830
Liability related to sale of future royalties, net		557,765			551,353
Long-term lease liabilities		259,215			262,383
Long-term obligations		28,274			28,118
Total liabilities		2,958,555			3,034,747
Stockholders’ equity:
Common stock, $0.001 par value; 300,000,000 shares authorized, 165,902,064 and 163,304,875 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively		166			163
Additional paid-in capital		3,245,994			3,145,402
Accumulated other comprehensive loss		(31,023	)		(25,281	)
Accumulated deficit		(2,723,723	)		(2,631,195	)
Total stockholders' equity		491,414			489,089
Total liabilities and stockholders’ equity	$	3,449,969		$	3,523,836

See accompanying notes.

IONIS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

(Unaudited)


	Three Months Ended
	March 31,
		2026			2025
Revenue:
Commercial revenue:
Product sales, net	$	42,955		$	6,287
Royalty revenue		58,323			64,166
Other commercial revenue		6,532			5,715
Total commercial revenue		107,810			76,168
Research and development revenue:
Collaborative agreement revenue		120,660			45,031
WAINUA joint development revenue		17,621			10,413
Total research and development revenue		138,281			55,444
Total revenue		246,091			131,612

Expenses:
Cost of sales		2,983			1,463
Research, development and patent		210,173			200,759
Selling, general and administrative		150,359			76,250
Total operating expenses		363,515			278,472

Loss from operations		(117,424	)		(146,860	)

Other income (expense):
Investment income		25,484			24,667
Interest expense		(5,160	)		(4,108	)
Interest expense related to sale of future royalties		(17,337	)		(18,822	)
Gain (loss) on investments, net		22,583			(2,164	)
Other income (expense), net		(456	)		465

Loss before income tax expense		(92,310	)		(146,822	)

Income tax expense		(218	)		(116	)

Net loss	$	(92,528	)	$	(146,938	)

Basic and diluted net loss per share	$	(0.56	)	$	(0.93	)
Shares used in computing basic and diluted net loss per share		164,874			158,735

See accompanying notes.

IONIS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(Unaudited)


	Three Months Ended
	March 31,
		2026			2025
Net loss	$	(92,528	)	$	(146,938	)
Unrealized gains (losses) on debt securities, net of tax		(5,604	)		1,630
Currency translation adjustment		(138	)		232
Comprehensive loss	$	(98,270	)	$	(145,076	)

See accompanying notes.

IONIS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

(Unaudited)


	Common Stock					Additional		Accumulated Other						Total
Description		Shares		Amount		Paid in Capital		Comprehensive Loss			Accumulated Deficit			Stockholders' Equity
Balance at December 31, 2024		157,909	$	158	$	2,868,812	$	(30,811	)	$	(2,249,808	)	$	588,351
Net loss		-		-		-		-			(146,938	)		(146,938	)
Change in unrealized gains, net of tax		-		-		-		1,630			-			1,630
Foreign currency translation		-		-		-		232			-			232
Issuance of common stock in connection with employee stock plans, net		1,132		1		2,241		-			-			2,242
Stock-based compensation expense		-		-		30,209		-			-			30,209
Balance at March 31, 2025		159,041	$	159	$	2,901,262	$	(28,949	)	$	(2,396,746	)	$	475,726

Balance at December 31, 2025		163,305	$	163	$	3,145,402	$	(25,281	)	$	(2,631,195	)	$	489,089
Net loss		-		-		-		-			(92,528	)		(92,528	)
Change in unrealized losses, net of tax		-		-		-		(5,604	)		-			(5,604	)
Foreign currency translation		-		-		-		(138	)		-			(138	)
Issuance of common stock in connection with employee stock plans, net		2,597		3		57,299		-			-			57,302
Stock-based compensation expense		-		-		43,293		-			-			43,293
Balance at March 31, 2026		165,902	$	166	$	3,245,994	$	(31,023	)	$	(2,723,723	)	$	491,414

See accompanying notes.

IONIS PHARMACEUTICALS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Three Months Ended
	March 31,
		2026			2025
Operating activities:
Net loss	$	(92,528	)	$	(146,938	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		3,301			2,228
Amortization of right-of-use operating lease assets		3,485			2,587
Amortization of other assets		661			582
Amortization of discount on investments, net		(6,190	)		(7,108	)
Amortization of debt issuance costs		2,349			1,642
Non-cash royalty revenue related to sale of royalties		(11,689	)		(12,891	)
Non-cash interest related to sale of future royalties		17,184			18,670
Stock-based compensation expense		43,275			29,718
Loss (gain) on investments, net		(22,583	)		1,849
Non-cash losses related to other assets		40			61
Changes in operating assets and liabilities:
Escrow deposit for maturity of 0 percent convertible senior notes due April 2026		(632,511	)		-
Contracts receivable		(7,625	)		52,481
Inventories		338			1,010
Other current and long-term assets		(7,390	)		(12,366	)
Accounts payable		(3,095	)		(25,968	)
Income taxes		161			92
Accrued compensation		(80,187	)		(43,039	)
Accrued liabilities and other liabilities		21,003			333
Deferred contract revenue		(20,818	)		(13,718	)
Net cash used in operating activities		(792,819	)		(150,775	)

Investing activities:
Purchases of short-term investments		(192,755	)		(311,068	)
Proceeds from sale of short-term investments		752,824			494,755
Purchases of property, plant and equipment		(21,763	)		(12,577	)
Acquisition of licenses and other assets, net		(1,486	)		(651	)
Net cash provided by investing activities		536,820			170,459

Financing activities:
Proceeds from issuance of common stock through equity plans, net		57,302			2,241
Principal payments on mortgage debt		(44	)		(42	)
Net cash provided by financing activities		57,258			2,199

Effects of exchange rates on cash		(138	)		232

Net increase (decrease) in cash and cash equivalents		(198,879	)		22,115
Cash and cash equivalents at beginning of period		372,260			242,077
Cash and cash equivalents at end of period	$	173,381		$	264,192

Supplemental disclosures of cash flow information:
Interest paid	$	90		$	92
Income tax refunds received, net	$	(8	)	$	(400	)

Supplemental disclosures of non-cash investing and financing activities:
Amounts accrued for capital and patent expenditures	$	1,043		$	460

See accompanying notes.

IONIS PHARMACEUTICALS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2026

(Unaudited)

1. Organization and Basis of Presentation

Organization and Business Activity

We incorporated in California on January 10, 1989. In conjunction with our initial public offering, we reorganized as a Delaware corporation in April 1991. We are a fully integrated commercial-stage biotechnology company and a leader in the discovery and development of RNA-targeted therapeutics.

Basis of Presentation

We prepared the unaudited interim condensed consolidated financial statements for the three months ended March 31, 2026 and 2025 on the same basis as the audited financial statements for the year ended December 31, 2025. We included all normal recurring adjustments in the financial statements, which we considered necessary for a fair presentation of our financial position at such dates and our operating results and cash flows for those periods. Our operating results for the interim periods may not be indicative of what our operating results will be 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 for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC.

In our condensed consolidated financial statements, we included the accounts of Ionis Pharmaceuticals, Inc. and the consolidated results of its wholly owned subsidiaries (“we”, “us” or “our”).

We operate as a single segment, Ionis operations, because our chief operating decision maker, or CODM, reviews operating results on an aggregate basis and manages our operations as a single operating segment. Refer to Note 13, Segment Information, for further details on our segment information.

Use of Estimates

We prepare our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States, or U.S., that require us to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Actual results could differ from our estimates.

2. Significant Accounting Policies

Our significant accounting policies have not changed substantially from those included in our Annual Report on Form 10-K for the year ended December 31, 2025.

Recent Accounting Standards

In July 2025, the FASB issued ASU 2025-05, which amended the guidance in ASC 326 to simplify the estimation of credit losses on accounts receivable and contract assets from revenue transactions. The amended guidance allows companies to elect a practical expedient to assume that conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when estimating the expected credit losses of the asset. This update is effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods. Companies that elect the practical expedient are required to apply the amendments prospectively. We adopted this update in the first quarter of 2026 on a prospective basis and elected the practical expedient. The updated guidance did not have a material impact on our condensed consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, which amended and simplified the existing guidance for software costs. The amended guidance removes references to software development stages and allows companies to begin capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed with the software performing the intended function. This update is effective for annual periods beginning after December 15, 2027 and interim periods within those annual periods. Early adoption of this guidance is permitted at the beginning of an annual reporting period. The guidance may be applied on a prospective or retrospective basis. We early adopted this update in the first quarter of 2026 on a prospective basis. The updated guidance did not have a material impact on our condensed consolidated financial statements.

We do not expect any recently issued accounting standards other than the standards mentioned above and those included in our Annual Report on Form 10-K for the year ended December 31, 2025 to have a material impact to our financial results.

3. Supplemental Financial Data

Inventories

Our inventories consisted of the following (in thousands):



		March 31, 2026		December 31, 2025
Raw materials	$	490	$	1,039
Work in process		24,678		24,051
Finished goods		990		1,096
Total	$	26,158	$	26,186
Reported as:
Inventories	$	5,557	$	10,048
Deposits and other assets		20,601		16,138
Total	$	26,158	$	26,186

We classify inventories as non-current assets when we expect the inventories to remain on hand beyond one year. We include non-current inventories in deposits and other assets in our condensed consolidated balance sheets. The amounts reported as deposits and other assets as of March 31, 2026 and December 31, 2025 consist of work in process inventory.

Accrued Liabilities

Our accrued liabilities consisted of the following (in thousands):


		March 31, 2026		December 31, 2025
Clinical expenses	$	53,325	$	53,659
In-licensing expenses		6,655		8,588
Commercial expenses, including gross-to-net product accruals		40,468		15,556
Other miscellaneous expenses		26,101		28,286
Total accrued liabilities	$	126,549	$	106,089

4. Revenues

During the three months ended March 31, 2026 and 2025, our revenues consisted of the following (in thousands):


	Three Months Ended
	March 31,
		2026		2025
Revenue:
Commercial revenue:
Product sales, net:
TRYNGOLZA sales, net	$	27,100	$	6,287
DAWNZERA sales, net		15,855		-
Total product sales, net		42,955		6,287
Royalty revenue:
SPINRAZA royalties		43,710		48,010
WAINUA royalties		10,709		9,372
Other royalties		3,904		6,784
Total royalty revenue		58,323		64,166
Other commercial revenue		6,532		5,715
Total commercial revenue		107,810		76,168
Research and development revenue:
Collaborative agreement revenue		120,660		45,031
WAINUA joint development revenue		17,621		10,413
Total research and development revenue		138,281		55,444
Total revenue	$	246,091	$	131,612

Revenue Sources

The following are sources of revenue and when we typically recognize revenue.

Commercial Revenue

In December 2024, the U.S. Food and Drug Administration, or FDA, approved TRYNGOLZA for the treatment of familial chylomicronemia syndrome, or FCS. Following the approval, we launched TRYNGOLZA and began earning revenue from TRYNGOLZA sales.

In August 2025, the FDA approved DAWNZERA for prophylaxis to prevent attacks of hereditary angioedema, or HAE, in adult and pediatric patients 12 years of age and older. Following the approval, we launched DAWNZERA and began earning revenue from DAWNZERA sales.

We earn royalty payments primarily on net sales of SPINRAZA, WAINUA and QALSODY. We include QALSODY royalties within other royalties in the table above.

We earn commercial revenue from TEGSEDI and WAYLIVRA sales under our distribution agreements with Swedish Orphan Biovitrum AB, or Sobi. In addition, we receive royalties from PTC Therapeutics International Limited, or PTC, for TEGSEDI and WAYLIVRA sales. Refer to Part IV, Item 15, Note 4, Collaborative Arrangements and Licensing Agreements, of our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for details on our commercialization partnerships with Sobi and PTC.

Under our distribution agreements with Sobi, we concluded that our performance obligation is to provide services to Sobi over the term of the agreement, which includes supplying finished goods inventory to Sobi. We are also responsible for maintaining the marketing authorization for TEGSEDI and WAYLIVRA in major markets and for leading the global commercial strategy for each medicine. We view this performance obligation as a series of distinct activities that are substantially the same. We recognize as revenue the price Sobi pays us for the inventory when we deliver the finished goods inventory to Sobi. We also recognize distribution fee revenue based on Sobi’s net sales of TEGSEDI and WAYLIVRA. Under our agreements with Sobi, Sobi does not generally have a right of return.

Research and development revenue under collaboration agreements

We enter into collaboration agreements to license and sell our technology on an exclusive or non-exclusive basis. Our collaboration agreements typically contain multiple elements, or performance obligations, including technology licenses or options to obtain technology licenses, R&D services and manufacturing services.

For R&D services that we recognize over time, we measure our progress using an input method. The input methods we use are based on the effort we expend or costs we incur toward the satisfaction of our performance obligation. We estimate the amount of effort we expend, including the time we estimate it will take us to complete the activities, or costs we incur in a given period, relative to the estimated total effort or costs to satisfy the performance obligation. This results in a percentage that we multiply by the transaction price to determine the amount of revenue we recognize each period. This approach requires us to make numerous estimates and use judgement. If our estimates or judgements change over the course of the collaboration, they may affect the timing and amount of revenue that we recognize in the current and future periods.

Upfront payments: When we enter into a collaboration agreement and receive an upfront payment, we record the entire upfront payment as deferred revenue if our only performance obligation is for R&D services we will provide in the future. We amortize the upfront payment into revenue as we perform the R&D services. If part or all of the upfront payment is a license fee, we recognize as revenue the portion related to the license when we deliver the license to our partner because our partner has full use of the license and we do not have any additional performance obligations related to the license after delivery.

Milestone payments: We include variable consideration in the transaction price when it is probable. We typically include milestone payments for R&D services in the transaction price when they are achieved. We include these milestone payments when they are achieved because there is considerable uncertainty in the research and development processes that trigger these payments. Similarly, we include regulatory milestone payments in the transaction price once the medicine is approved by the applicable regulatory agency. We will recognize sales-based milestone payments in the period in which we achieve the milestone under the sales-based royalty exception allowed under accounting rules.

We recognize milestone payments that relate to an ongoing performance obligation over our period of performance. For example, when we achieve a milestone payment from a partner for advancing a clinical study under a collaboration agreement, we add the milestone payment to the transaction price if the milestone relates to an ongoing R&D services performance obligation and recognize revenue related to the milestone payment over our estimated period of performance. If we have partially completed our performance obligation, we record a cumulative-effect adjustment in the period we add the milestone payment to the transaction price.

Conversely, we recognize in full those milestone payments that we earn based on our partners’ activities when our partner achieves the milestone event and we do not have a remaining performance obligation.

License fees: We recognize as revenue the total amount we determine to be the relative stand-alone selling price of a license when we deliver the license to our partner because our partner has full use of the license and we do not have any additional performance obligations related to the license after delivery.

WAINUA (Eplontersen) Collaboration with AstraZeneca

In 2021, we entered into a joint development and commercialization agreement with AstraZeneca to develop and commercialize WAINUA for the treatment of transthyretin amyloidosis, or ATTR. Under the terms of the agreement, we received a $200 million upfront payment in 2021.

We evaluated our WAINUA collaboration under ASC Topic 808, Collaborative Arrangements, or ASC 808, and identified four material components: (i) the license we granted to AstraZeneca in 2021, (ii) the co-development activities that we and AstraZeneca are performing, (iii) the co-commercialization activities that we and AstraZeneca are performing and (iv) the co-medical affairs activities that we and AstraZeneca are performing.

We determined that we had a vendor-customer relationship within the scope of ASC Topic 606, Revenue from Contracts with Customers, or ASC 606, for the license we granted to AstraZeneca and as a result we had one performance obligation. For our sole performance obligation, we determined the transaction price was the $200 million upfront payment we received. We recognized the upfront payment in full in 2021 because we did not have any remaining performance obligations after we delivered the license to AstraZeneca.

We also concluded that the co-development activities, the co-commercialization activities and the co-medical affairs activities are within the scope of ASC 808 because we and AstraZeneca are active participants exposed to the risks and benefits of the activities under the collaboration and therefore do not have a vendor-customer relationship. From inception through December 31, 2025, AstraZeneca was responsible for 55 percent of the costs associated with the ongoing global Phase 3 development program. After December 31, 2025, AstraZeneca is responsible for 75 percent of costs for development activities intended solely to support U.S. regulatory approvals and 87.5 percent of costs for development activities intended to support global regulatory approvals. Because we are leading the Phase 3 development program, we made an accounting policy election to recognize as non-customer revenue the cost-share funding from AstraZeneca, net of our share of AstraZeneca’s development expenses, in the same period we incur the related development expenses. As AstraZeneca is responsible for the majority of the commercial and medical affairs costs in the U.S. and all costs associated with bringing WAINUA to market outside the U.S., we made an accounting policy election to recognize cost-share funding we receive from AstraZeneca related to commercial and medical affairs activities as reductions of our selling, general and administrative, or SG&A, expense and R&D expense, respectively.

5. Collaborative Arrangements and Licensing Agreements

Below, we have included our GSK, Otsuka and Roche collaborations, which were the only collaborations that had substantive changes from those included in Part IV, Item 15, Note 4, Collaborative Arrangements and Licensing Agreements, of our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025.

GSK

In 2010, we entered into a collaboration with GSK using our antisense drug discovery platform to discover and develop new medicines against targets for serious and rare diseases, including infectious diseases. Under our collaboration, GSK is developing bepirovirsen for the treatment of chronic hepatitis B, or CHB, infection. In 2019, following positive Phase 2 results, GSK licensed our CHB program. GSK is responsible for all global development, regulatory and commercialization activities and costs for the CHB program. From inception through March 31, 2026, we have received more than $105 million in an upfront payment and other payments related to the CHB program.

In the first quarter of 2026, we earned a $15 million milestone payment when the Japanese Ministry of Health, Labour and Welfare, or MHLW, accepted for review a New Drug Application, or NDA, filing for bepirovirsen. In addition, we earned a $15 million milestone payment when the European Medicines Agency, or EMA, accepted for review a Marketing Authorization Application, or MAA, filing for bepirovirsen. We recognized these milestone payments as R&D revenue in full in the first quarter of 2026 because we did not have any remaining performance obligations related to the milestone payments. We will achieve the next payment of $35 million if bepirovirsen is approved in a major country other than China.

During the three months ended March 31, 2026 and 2025, we earned the following revenue from our relationship with GSK (in thousands, except percentage amounts):


	Three Months Ended
	March 31,
		2026			2025
Revenue from our relationship with GSK	$	30,000		$	-
Percentage of total revenue		12	%		-	%

We did not have any deferred revenue from our relationship with GSK at March 31, 2026 and December 31, 2025.

Otsuka

In 2023, we entered into an agreement with Otsuka Pharmaceutical Co., Ltd., or Otsuka, to commercialize DAWNZERA in Europe. In the second quarter of 2024, we expanded the agreement to include commercialization rights for DAWNZERA in the Asia-Pacific region. We are responsible for the ongoing development of DAWNZERA. We retained the rights to commercialize DAWNZERA in the U.S. and in the rest of the world, assuming regulatory approval. In November 2024, we entered into an agreement with Otsuka to commercialize ulefnersen, an investigational medicine for the treatment of amyotrophic lateral sclerosis, or ALS, caused by mutations in the FUS gene, worldwide. We are responsible for the ongoing development of ulefnersen. From inception through March 31, 2026, we have received more than $125 million in payments from Otsuka.

In the first quarter of 2026, we achieved a $15 million milestone payment when the European Commission approved DAWNZERA in the EU. We recognized this milestone payment as R&D revenue in full in the first quarter of 2026 because we did not have any remaining performance obligations related to the milestone payment. We will achieve the next payment of $20 million if Otsuka receives reimbursement approval in three of the five major European countries, which include the United Kingdom, France, Germany, Italy and Spain.

During the three months ended March 31, 2026 and 2025, we earned the following revenue from our relationship with Otsuka (in thousands, except percentage amounts):

Our condensed consolidated balance sheets at March 31, 2026 and December 31, 2025 included deferred revenue of $3.4 million and $4.3 million, respectively, from our relationship with Otsuka.

Roche

We have three collaborations with Hoffmann-La Roche Inc. and F. Hoffmann-La Roche Ltd, collectively Roche: one to develop treatments for Huntington’s disease, or HD, one to develop sefaxersen for the treatment of immunoglobulin A, or IgA, nephropathy, or IgAN, and one to develop RNA-targeted programs for Alzheimer's disease, or AD, and HD. From inception through March 31, 2026, we have received more than $405 million in payments from our Roche collaborations.

In the first quarter of 2026, we earned a $50 million milestone payment when Roche initiated a Phase 1 trial for an investigational medicine for the treatment of AD. We recognized this milestone payment as R&D revenue in full in the first quarter of 2026 because we did not have any remaining performance obligations related to the milestone payment. We will achieve the next payment of $10 million if Roche initiates a Phase 2 trial for an investigational medicine for the treatment of AD under our collaboration for RNA-targeted programs.

During the three months ended March 31, 2026 and 2025, we earned the following revenue from our relationship with Roche (in thousands, except percentage amounts):

We did not have any deferred revenue from our relationship with Roche at March 31, 2026 and December 31, 2025.

6. Basic and Diluted Net Loss Per Share

Basic net loss per share

We calculated our basic net loss per share for the three months ended March 31, 2026 and 2025 by dividing our net loss by our weighted-average number of common shares outstanding during the period.

Diluted net loss per share

For the three months ended March 31, 2026 and 2025, 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:

● 1.75 percent convertible senior notes due 2028, or 1.75% Notes due 2028;

● 0 percent convertible senior notes due 2026, or 0% Notes due 2026;

● Note hedges related to the 0% Notes due 2026;

● Warrants related to the 0% Notes due 2026;

● Dilutive stock options;

● Unvested restricted stock units, or RSUs;

● Unvested performance restricted stock units, or PRSUs; and

● Employee Stock Purchase Plan, or ESPP.

For the three months ended March 31, 2026, common stock underlying the 0 percent convertible senior notes due 2030, or 0% Notes due 2030 would also have had an anti-dilutive effect on net loss per share.

7. Investments

The following table summarizes the contract maturity of the available-for-sale securities we held as of March 31, 2026:

One year or less	67	%
After one year but within two years	27	%
After two years but within three and a half years	6	%
Total	100	%

As illustrated above, at March 31, 2026, 94 percent of our available-for-sale securities had a maturity of less than two years.

All of our available-for-sale debt securities are available to us for use in our current operations. As a result, we categorize 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.

We invest in debt securities 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.

At March 31, 2026, we had an equity ownership interest of less than 20 percent in four private companies and four public companies with which we conduct business.

The following is a summary of our investments (in thousands):


		Amortized	Gross Unrealized						Estimated
March 31, 2026		Cost		Gains		Losses			Fair Value
Available-for-sale debt securities:
Corporate debt securities (1)	$	574,026	$	424	$	(288	)	$	574,162
Debt securities issued by U.S. government agencies		41,038		68		(11	)		41,095
Debt securities issued by the U.S. Treasury (1)		497,599		272		(295	)		497,576
Debt securities issued by states of the U.S. and political subdivisions of the states		4,908		2		-			4,910
Total debt securities with a maturity of one year or less		1,117,571		766		(594	)		1,117,743
Corporate debt securities		363,131		279		(1,084	)		362,326
Debt securities issued by U.S. government agencies		76,885		14		(350	)		76,549
Debt securities issued by the U.S. Treasury		191,229		45		(704	)		190,570
Debt securities issued by states of the U.S. and political subdivisions of the states		1,224		1		(1	)		1,224
Total debt securities with a maturity of more than one year		632,469		339		(2,139	)		630,669
Total available-for-sale debt securities	$	1,750,040	$	1,105	$	(2,733	)	$	1,748,412
Equity securities:
Publicly traded equity securities included in other current assets (2)	$	11,897	$	55,855	$	(9,802	)	$	57,950
Privately held equity securities included in deposits and other assets (3)		10,000		9,816		-			19,816
Total equity securities		21,897		65,671		(9,802	)		77,766
Total available-for-sale debt and equity securities	$	1,771,937	$	66,776	$	(12,535	)	$	1,826,178


		Amortized	Gross Unrealized						Estimated
December 31, 2025		Cost		Gains		Losses			Fair Value
Available-for-sale debt securities:
Corporate debt securities (1)	$	746,814	$	991	$	(27	)	$	747,778
Debt securities issued by U.S. government agencies		55,768		92		(5	)		55,855
Debt securities issued by the U.S. Treasury (1)		769,034		843		(13	)		769,864
Debt securities issued by states of the U.S. and political subdivisions of the states		5,709		11		-			5,720
Total debt securities with a maturity of one year or less		1,577,325		1,937		(45	)		1,579,217
Corporate debt securities		435,350		1,586		(106	)		436,830
Debt securities issued by U.S. government agencies		92,770		100		(94	)		92,776
Debt securities issued by the U.S. Treasury		242,288		595		(1	)		242,882
Other municipal debt securities		1,219		4		-			1,223
Total debt securities with a maturity of more than one year		771,627		2,285		(201	)		773,711
Total available-for-sale debt securities	$	2,348,952	$	4,222	$	(246	)	$	2,352,928
Equity securities:
Publicly traded equity securities included in other current assets (2)	$	11,897	$	35	$	(8,920	)	$	3,012
Privately held equity securities included in deposits and other assets (3) (2)		4,905		54,395		(7,091	)		52,209
Total equity securities		16,802		54,430		(16,011	)		55,221
Total available-for-sale debt and equity securities	$	2,365,754	$	58,652	$	(16,257	)	$	2,408,149

(1) Includes investments classified as cash equivalents in our condensed consolidated balance sheets.

(2) Our publicly traded equity securities are included in other current assets. We recognize publicly traded equity securities at fair value. In the first quarter of 2026, one of our privately held investees became a publicly traded entity after completing an initial public offering. As a result, we recorded a $23.4 million unrealized gain in our condensed consolidated statements of operations, which reflects the difference between the carrying value of this investment as of December 31, 2025 and its fair value of $55.8 million as of March 31, 2026. This investment is subject to a 12-month contractual sale restriction that ends in January 2027. In the three months ended March 31, 2026, we recorded a $0.9 million net unrealized loss in our condensed consolidated statements of operations related to changes in the fair value of our other investments in publicly traded companies.

(3) Our privately held equity securities are included in deposits and other assets. We recognize our privately held equity securities at cost minus impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer, which are Level 3 inputs. In the three months ended March 31, 2026, there were no changes to the carrying value of our privately held equity securities.

The following is a summary of our investments we consider to be temporarily impaired at March 31, 2026 (in thousands, except for number of investments):


		Less than 12 Months of Temporary Impairment					More than 12 Months of Temporary Impairment					Total Temporary Impairment
	Number of Investments		Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
Corporate debt securities	267	$	516,847	$	(1,358	)	$	4,480	$	(14	)	$	521,327	$	(1,372	)
Debt securities issued by U.S. government agencies	41		85,793		(350	)		6,841		(11	)		92,634		(361	)
Debt securities issued by the U.S. Treasury	56		417,944		(999	)		-		-			417,944		(999	)
Debt securities issued by states of the U.S. and political subdivisions of the states	4		1,541		(1	)		-		-			1,541		(1	)
Total temporarily impaired debt securities	368	$	1,022,125	$	(2,708	)	$	11,321	$	(25	)	$	1,033,446	$	(2,733	)

We believe that the decline in value of these securities is temporary and is primarily related to the change in market interest rates since purchase rather than underlying credit deterioration for any of the issuers. We believe it is more likely than not that we will be able to hold our debt securities with declines in value to maturity. Therefore, we intend to hold these securities to maturity and anticipate full recovery of our debt securities’ amortized cost basis at maturity.

8. Fair Value Measurements

The following tables present the major security types we held at March 31, 2026 and December 31, 2025 that we regularly measure and carry at fair value. The following tables segregate each security type by the level within the fair value hierarchy of the valuation techniques we utilized to determine the respective security’s fair value (in thousands):


		At		Quoted Prices in Active Markets		Significant Other Observable Inputs
		March 31, 2026		(Level 1)		(Level 2)
Cash equivalents (1)	$	85,534	$	85,534	$	-
Corporate debt securities (2)		936,488		-		936,488
Debt securities issued by U.S. government agencies (3)		117,644		-		117,644
Debt securities issued by the U.S. Treasury (3)		688,146		688,146		-
Debt securities issued by states of the U.S. and political subdivisions of the states (3)		6,134		-		6,134
Publicly traded equity securities included in other current assets (4)		57,950		57,950		-
Total	$	1,891,896	$	831,630	$	1,060,266


		At		Quoted Prices in Active Markets		Significant Other Observable Inputs
		December 31, 2025		(Level 1)		(Level 2)
Cash equivalents (1)	$	213,579	$	213,579	$	-
Corporate debt securities (5)		1,184,608		-		1,184,608
Debt securities issued by U.S. government agencies (3)		148,631		-		148,631
Debt securities issued by the U.S. Treasury (3)		1,012,746		1,012,746		-
Debt securities issued by states of the U.S. and political subdivisions of the states (3)		6,943		-		6,943
Publicly traded equity securities included in other current assets (4)		3,012		3,012		-
Total	$	2,569,519	$	1,229,337	$	1,340,182

The following footnotes reference lines in our condensed consolidated balance sheets:

(1) Included in cash and cash equivalents.

(2) $2.7 million was included in cash and cash equivalents, with the difference included in short-term investments.

(3) Included in short-term investments.

(4) Included in other current assets.

(5) $

Three Months Ended

Revenue from our relationship with Otsuka

Percentage of total revenue