Ionis Pharmaceuticals Inc.

11/09/2026 | Press release | Distributed by Public on 11/09/2026 07:33

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
In this Report on Form 10-Q, unless the context requires otherwise, "Ionis," the "Company," "we," "our," and "us," means Ionis Pharmaceuticals, Inc. and its subsidiaries.
Forward-Looking Statements
In addition to historical information contained in this Report on Form 10-Q, the Report includes forward-looking statements regarding our business and the therapeutic and commercial potential of our commercial medicines, additional medicines in development, technologies and our expectations regarding development and regulatory milestones. 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. Such statements are subject to certain risks and uncertainties and particularly those inherent in the process of discovering, developing and commercializing medicines that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such medicines. 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. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this report and described in additional detail in our annual report on Form 10-K for the year ended December 31, 2025, which is on file with the U.S. Securities and Exchange Commission and is available from us, and those identified within Part II Item 1A, Risk Factors, of this Report. 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. Except as required by law, we undertake no obligation to update any forward-looking statements for any reason. As a result, you are cautioned not to rely on these forward-looking statements.
Overview
For three decades, we have invented medicines that bring better futures to people with serious diseases. As a pioneer in RNA-targeted medicines with a deep understanding of disease biology and an industry-leading drug discovery technology, we are driven to deliver innovative, life-changing advances for patients.
With multiple independent commercial launches now underway, we have transitioned into a fully integrated commercial-stage biotechnology company. We currently have nine marketed medicines to treat serious diseases, which include three Ionis-owned medicines: TRYNGOLZA (olezarsen), DAWNZERA (donidalorsen) and ZANVASTRO (zilganersen), and six partnered medicines: HIBSAGO (bepirovirsen), WAINUA (eplontersen), SPINRAZA (nusinersen), QALSODY (tofersen), TEGSEDI (inotersen) and WAYLIVRA (volanesorsen). Following approval by the U.S. Food and Drug Administration, or FDA, in June 2026, we independently launched TRYNGOLZA for the treatment of severe hypertriglyceridemia, or sHTG. In addition, we independently launched ZANVASTRO for the treatment of Alexander disease, or AxD, after receiving FDA approval in September 2026. Our partner, GSK, launched HIBSAGO for the treatment of chronic hepatitis B, or CHB, in Japan after receiving approval from the Ministry of Health, Labour and Welfare, or MHLW, in August 2026. HIBSAGO also received FDA approval in October 2026. We also have a rich innovative pipeline across our focus areas of neurology, cardiometabolic diseases and select areas of high patient needs. We currently have multiple medicines advancing in Phase 3 development, including obudanersen for Angelman syndrome, or AS, which is wholly owned and recently completed enrollment. In addition, our partnered medicines, ulefnersen and sefaxersen, recently delivered positive Phase 3 results. We also have additional medicines in early and mid-stage development.
Our multiple sources of revenue and solid financial foundation enable our continued investments to support ongoing and planned launches and to advance our wholly owned medicines in development. Our key recent achievements, combined with our independent and partnered product launches anticipated by the end of 2027, position us well to help millions of patients with serious diseases and deliver increasing product and royalty revenue.
Our Marketed Medicines
TRYNGOLZA is a once monthly, self-administered RNA-targeted medicine approved in the United States, or U.S., as an adjunct to diet to reduce triglycerides and the risk of acute pancreatitis in adults with sHTG and as an adjunct to diet to reduce triglycerides in adults with familial chylomicronemia syndrome, or FCS. TRYNGOLZA is the first and only treatment approved by the FDA that significantly and substantially reduces triglyceride levels in adults with sHTG and provides a clinically meaningful reduction in acute pancreatitis, or AP, events. TRYNGOLZA is also approved in the European Union, or EU, Canada and the United Kingdom, or UK, as an adjunct to diet in adult patients for the treatment of genetically confirmed FCS. TRYNGOLZA is the first medicine we began commercializing independently in the U.S. Sobi has exclusive rights to commercialize TRYNGOLZA in countries outside of the U.S., Canada and China.
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DAWNZERA is an RNA-targeted medicine approved in the U.S. for prophylaxis to prevent attacks of hereditary angioedema, or HAE, in adult and pediatric patients 12 years of age and older. DAWNZERA is the first and only FDA-approved RNA-targeted prophylactic therapy for HAE. DAWNZERA is also approved in the EU, UK and Canada for the routine prevention of recurrent attacks of HAE in the same age group. DAWNZERA is self-administered via subcutaneous autoinjector once every four or eight weeks. DAWNZERA has the potential to offer durable efficacy, a favorable safety and tolerability profile, and the longest available dosing interval. DAWNZERA is the second medicine we are commercializing independently in the U.S. We licensed commercialization rights for DAWNZERA in Europe and the Asia-Pacific region to Otsuka Pharmaceutical Co., Ltd., or Otsuka.
ZANVASTRO is an RNA-targeted medicine approved in the U.S. for the treatment of AxD in pediatric and adult patients. It is administered intrathecally every three months. ZANVASTRO is the first and only FDA-approved disease modifying treatment for AxD. ZANVASTRO is the third medicine we are commercializing independently in the U.S. We licensed commercialization rights for ZANVASTRO in countries outside of the U.S. to Recordati. ZANVASTRO was granted Orphan Drug designation from the European Medicines Agency, or EMA.
SPINRAZA is an antisense medicine for the treatment of patients with spinal muscular atrophy, or SMA, a progressive, debilitating and often fatal genetic disease. Higher dose SPINRAZA was approved and launched in the U.S., EU and Japan for the treatment of SMA. Higher dose SPINRAZA is also approved in the UK and Switzerland. Our partner, Biogen, is responsible for commercializing SPINRAZA worldwide.
HIBSAGO (bepirovirsen) is an RNA-targeted medicine approved in the U.S. and Japan for CHB virus infection in adult patients without cirrhosis receiving nucleos(t)ide analogue therapy and with hepatitis B virus, or HBV, surface antigen, or HBsAg, levels ≤3000 IU/ml as determined by an FDA-authorized test. It is a six-month finite treatment that can be administered at-home after the first dose. HIBSAGO offers unprecedented functional cure rates compared to current standard of care. Our partner, GSK, is responsible for commercializing HIBSAGO worldwide.
WAINUA (WAINZUA in Europe) is a once monthly, self-administered subcutaneous RNA-targeted medicine that is approved in numerous countries, including the U.S., EU, UK, Canada and China, for the treatment of adults with polyneuropathy of hereditary transthyretin-mediated amyloidosis, or ATTRv-PN, a debilitating, progressive, and fatal disease. In January 2024, we and AstraZeneca launched WAINUA in the U.S. for the treatment of adults with ATTRv-PN. The launch of WAINUA is underway in numerous countries, including the countries in the EU, following the approval by the European Commission, or EC, in March 2025. AstraZeneca is our commercialization partner for WAINUA.
QALSODY is an antisense medicine that received accelerated approval from the FDA in April 2023 and marketing authorization under exceptional circumstances from the EMA in May 2024 for the treatment of adult patients with superoxide dismutase 1 amyotrophic lateral sclerosis, or SOD1-ALS, a rare, neurodegenerative disorder that causes progressive loss of motor neurons leading to death. QALSODY was the first treatment approved to target a genetic cause of ALS. Our partner, Biogen, is responsible for commercializing QALSODY worldwide. Biogen is also evaluating QALSODY as a potential treatment for presymptomatic SOD1-ALS patients in the ongoing ATLAS study. QALSODY was granted Orphan Drug designation by the FDA and EMA.
TEGSEDI is a once weekly, self-administered subcutaneous medicine approved in Europe and Brazil for the treatment of patients with ATTRv-PN. We currently sell TEGSEDI in Europe through our distribution agreement with Swedish Orphan Biovitrum AB, or Sobi. In Latin America, PTC Therapeutics International Limited, or PTC, is commercializing TEGSEDI in Brazil and is pursuing access in additional Latin American countries through its exclusive license agreement with us.
WAYLIVRA is a once weekly, self-administered, subcutaneous medicine approved in Europe and Brazil as an adjunct to diet in adult patients with genetically confirmed FCS and at high risk for pancreatitis. We sell WAYLIVRA in Europe through our distribution agreement with Sobi. In Latin America, PTC is commercializing WAYLIVRA in Brazil for two indications, FCS and familial partial lipodystrophy, or FPL, and is pursuing access in additional Latin American countries through its exclusive license agreement with us.
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Our Innovative Late-Stage Pipeline of Investigational Medicines
Obudanersen is our wholly owned medicine in development for AS. In July 2026, we completed enrollment of the Phase 3 study, REVEAL, which we designed to evaluate the efficacy and safety of obudanersen. In September 2026, we initiated the Phase 3 CHAMPION study in patients with AS due to paternal uniparental disomy or imprinting center defects. In addition, we are continuing to conduct the open label Phase 1/2 study, HALOS, of obudanersen in patients with AS designed to assess the safety, tolerability and activity of multiple ascending doses of obudanersen administered intrathecally. In 2025, we presented positive 12- and 18-month long-term extension data from the HALOS study which supports continued development. The FDA and EMA granted Orphan Drug designation to obudanersen. Additionally, the FDA granted Breakthrough Therapy, Fast Track and Rare Pediatric designations to obudanersen.
Eplontersen is our medicine in development to treat patients with transthyretin amyloidosis cardiomyopathy, or ATTR-CM. In July 2026, we and AstraZeneca announced that the CARDIO-TTRansform trial for eplontersen in patients with ATTR-CM missed the primary efficacy endpoint of the composite outcome of cardiovascular, or CV, mortality and recurrent CV clinical events up to Week 140 compared with placebo. In this contemporary patient population treated with standard of care, including a majority on a stabilizer, adding eplontersen did not provide a statistically significant benefit. AstraZeneca shared the results with the scientific community at the European Society of Cardiology, or ESC, Congress in August 2026 and is continuing to analyze the full data set.
Pelacarsen is our medicine in development to treat patients with elevated lipoprotein(a)-driven cardiovascular disease, or Lp(a)-driven CVD. In September 2026, Novartis announced that the pelacarsen Phase 3 Lp(a)HORIZON study did not meet its primary endpoint of reducing the risk of cardiovascular events compared to placebo. The full Lp(a)HORIZON data will be presented at the American Heart Association, or AHA, conference in November 2026.
Salanersen is our medicine in development for SMA. In the second quarter of 2026, Biogen advanced salanersen into Phase 3 development in patients with SMA and the FDA granted Breakthrough Therapy designation to salanersen based on positive interim Phase 1 results. Salanersen has also received Orphan Drug designation for the treatment of SMA.
Sapablursen is our medicine in development for polycythemia vera, or PV. In the second quarter of 2026, Ono advanced sapablursen into Phase 3 development in patients with PV. Sapablursen has received FDA Fast Track, Orphan Drug and Breakthrough Therapy designations for the treatment of PV.
Sefaxersen is our medicine in Phase 3 development for immunoglobulin A, or IgA, nephropathy, or IgAN. In September 2026, we and Roche announced positive interim data from the ongoing Phase 3 IMAgINATION study evaluating investigational sefaxersen in adults with primary IgAN, which were presented in October 2026 at the American Society of Nephrology, or ASN. Roche plans to share these data with health authorities.
Tofersen is our medicine in development for presymptomatic SOD1-ALS. Biogen is evaluating tofersen for treatment of presymptomatic individuals who have a SOD1 genetic mutation.
Ulefnersen is our medicine in development for amyotrophic lateral sclerosis, or ALS, with mutations in the fused in sarcoma gene, or FUS. In September 2026, we and Otsuka announced positive topline results from the Phase 3 FUSION study of ulefnersen in juvenile and adult patients with FUS-ALS. We licensed global commercialization rights for ulefnersen to Otsuka. The FDA and EMA granted Orphan Drug designation to ulefnersen. The FDA also granted Fast Track designation to ulefnersen.
Critical Accounting Estimates
We prepare our condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S. As such, we make certain estimates, judgments and assumptions that we believe are reasonable, based upon the information available to us. These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact our quarterly or annual results of operations and financial condition. Each quarter, our senior management reviews the development, selection and disclosure of such estimates with the audit committee of our board of directors. The following are our significant accounting estimates, which we believe are the most critical to aid in fully understanding and evaluating our reported financial results:
● Assessing the propriety of revenue recognition and associated deferred revenue;
● Determining the appropriate cost estimates for unbilled preclinical studies and clinical development activities; and
● Assessing the appropriate estimate of anticipated future royalty payments under our royalty purchase agreement
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There have been no material changes to our critical accounting estimates from the information provided in Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2025.
Results of Operations
The following is a summary of our financial results (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Total revenue $ 242.7 $ 156.7 $ 756.8 $ 740.4
Total operating expenses $ 373.4 $ 316.9 $ 1,107.2 $ 907.6
Loss from operations $ (130.7 ) $ (160.2 ) $ (350.4 ) $ (167.2 )
Net loss $ (110.0 ) $ (128.6 ) $ (317.1 ) $ (152.0 )
Revenue
Total revenue for the three and nine months ended September 30, 2026 was $242.7 million and $756.8 million, respectively, compared to $156.7 million and $740.4 million for the same periods in 2025 respectively, and was comprised of the following (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Revenue:
Commercial revenue:
Product sales, net:
TRYNGOLZA sales, net $ 9.3 $ 31.8 $ 41.0 $ 57.4
DAWNZERA sales, net 36.8 0.7 79.2 0.7
ZANVASTRO sales, net 2.2 - 2.2 -
Total product sales, net 48.3 32.5 122.4 58.1
Royalty revenue:
SPINRAZA royalties 69.4 55.9 166.6 158.2
WAINUA royalties 6.8 13.3 34.0 33.1
Other royalties 4.4 6.5 14.3 18.5
Total royalty revenue 80.6 75.7 214.9 209.8
Other commercial revenue 7.3 7.4 25.4 26.6
Total commercial revenue 136.2 115.6 362.7 294.5
Research and development revenue:
Collaborative agreement revenue 102.8 31.4 356.5 413.4
WAINUA joint development revenue 3.7 9.7 37.6 32.5
Total research and development revenue 106.5 41.1 394.1 445.9
Total revenue $ 242.7 $ 156.7 $ 756.8 $ 740.4
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Commercial revenue for the three months and nine months ended September 30, 2026 increased 18% and 23%, respectively, compared to the same periods in 2025. This increase was primarily driven by DAWNZERA product sales.
Research and development, or R&D, revenue for the three and nine months ended September 30, 2026 increased compared to the same periods in 2025 due to multiple payments we earned for programs advancing under our R&D collaborations and excluding the $280 million upfront payment we earned for the global license of sapablursen to Ono Pharmaceutical Co., Ltd. in the second quarter of 2025.
WAINUA (Eplontersen) Collaboration with AstraZeneca
Our financial results for the three and nine months ended September 30, 2026 and 2025 reflected the cost-sharing provisions related to our collaboration with AstraZeneca to develop and commercialize WAINUA for the treatment of ATTR. From inception through December 31, 2025, AstraZeneca was responsible for 55 percent of the costs associated with the ongoing global Phase 3 development program. Beginning on January 1, 2026, AstraZeneca was 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 were leading and conducting the Phase 3 development program, we recognized as R&D revenue the percentage of cost-share funding AstraZeneca was responsible for, net of our share of AstraZeneca's development expenses, in the same period we incurred the related development expenses.
In June 2026, we exercised our right to opt-out of the shared responsibility and costs for development and U.S. commercialization activities under the agreement. The opt-out became effective on August 1, 2026. Effective August 1, 2026, AstraZeneca is responsible for 100 percent of WAINUA costs under this agreement.
Prior to August 2026, AstraZeneca was responsible for the majority of the medical affairs and commercial costs in the U.S. and all costs associated with bringing WAINUA to market outside the U.S. As a result, we recognized cost-share funding we received from AstraZeneca related to these activities as a reduction of our medical affairs and commercialization expenses, which we classified as R&D and selling, general and administrative, or SG&A expenses, respectively.
The following table sets forth information on revenue and expenses under this collaboration (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
WAINUA joint development revenue $ 3.7 $ 9.7 $ 37.6 $ 32.5
Research and development expenses related to Phase 3 development of WAINUA 15.5 19.5 55.1 65.8
Medical affairs expenses for WAINUA 1.0 1.7 5.6 5.7
Commercialization expenses for WAINUA 2.6 7.5 18.9 22.0
Operating Expenses
The following table sets forth information on operating expenses (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Operating expenses, excluding non-cash compensation expense related to equity awards $ 330.0 $ 285.8 $ 974.9 $ 817.0
Non-cash compensation expense related to equity awards 43.4 31.1 132.3 90.6
Total operating expenses $ 373.4 $ 316.9 $ 1,107.2 $ 907.6
Operating expenses, excluding non-cash compensation expense related to equity awards, for the three months and nine months ended September 30, 2026 increased compared to the same periods in 2025. SG&A expenses increased as anticipated year over year primarily due to investments related to the commercialization efforts for TRYNGOLZA, DAWNZERA and ZANVASTRO. We expect our operating expenses, excluding non-cash compensation expense related to equity awards, to continue to increase during the remainder of 2026 as we advance our commercialization activities.
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Non-cash compensation expense related to equity awards for the three and nine months ended September 30, 2026 increased compared to the same periods in 2025 due to a higher stock price on the grant date of annual equity awards in 2026 compared to 2025 and increased headcount. We employed 1,485 people as of September 30, 2026 compared to 1,225 people as of September 30, 2025. We believe non-cash compensation expense related to equity awards is not indicative of our operating results or cash flows from our operations.
Cost of Sales
Our cost of sales is comprised of costs related to our commercial revenue, which consisted of manufacturing costs, transportation and freight, indirect overhead costs associated with the manufacturing and distribution of TRYNGOLZA, DAWNZERA, TEGSEDI and WAYLIVRA and associated period costs.
Cost of sales for newly launched products, such as TRYNGOLZA, DAWNZERA and ZANVASTRO, does not include the full cost of manufacturing until we manufacture and sell additional inventory after exhausting pre-launch inventory, which we previously recorded as R&D expense.
The following table sets forth information on cost of sales (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Cost of sales, excluding non-cash compensation expense related to equity awards $ 3.1 $ 2.2 $ 8.5 $ 7.1
Non-cash compensation expense related to equity awards 0.2 0.1 0.5 0.9
Total cost of sales $ 3.3 $ 2.3 $ 9.0 $ 8.0
Research, Development and Patent Expenses
Our research, development and patent expenses consist of expenses for drug discovery, drug development, medical affairs, manufacturing and development chemistry and R&D support expenses.
The following table sets forth information on research, development and patent expenses (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Research, development and patent expenses, excluding non-cash compensation expense related to equity awards $ 191.5 $ 197.0 $ 569.0 $ 575.4
Non-cash compensation expense related to equity awards 24.4 20.8 74.2 60.6
Total research, development and patent expenses $ 215.9 $ 217.8 $ 643.2 $ 636.0
Drug Discovery
We use our proprietary technologies to generate information about the function of genes and to determine the value of genes as drug discovery targets. We use this information to direct our own drug discovery research, and that of our partners. Drug discovery is also the function that is responsible for advancing our core technology. This function is also responsible for making investments in complementary technologies to expand the reach of our technologies.
The following table sets forth information on drug discovery expenses (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Drug discovery expenses, excluding non-cash compensation expense related to equity awards $ 28.9 $ 28.4 $ 86.6 $ 85.7
Non-cash compensation expense related to equity awards 5.4 4.0 15.4 11.7
Total drug discovery expenses $ 34.3 $ 32.4 $ 102.0 $ 97.4
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Drug discovery expenses, excluding non-cash compensation expense related to equity awards, were essentially flat in the three and nine months ended September 30, 2026 compared to the same periods in 2025.
Drug Development
The following table sets forth drug development expenses, including expenses for our marketed medicines and those in Phase 3 development for which we have incurred significant costs (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Eplontersen $ 13.3 $ 19.1 $ 47.2 $ 64.5
Donidalorsen 3.8 3.7 9.2 11.8
Olezarsen 10.6 25.6 37.7 68.7
Zilganersen 1.9 2.2 6.6 9.7
Obudanersen 10.6 6.8 30.2 24.3
Ulefnersen 3.4 2.8 8.9 8.0
Other development projects 23.7 23.6 67.7 59.3
Development overhead expenses 34.0 37.0 102.1 105.2
Total drug development expenses, excluding non-cash compensation expense related to equity awards 101.3 120.8 309.6 351.5
Non-cash compensation expense related to equity awards 11.0 9.2 34.3 26.2
Total drug development expenses $ 112.3 $ 130.0 $ 343.9 $ 377.7
Our development expenses, excluding non-cash compensation expense related to equity awards, decreased for the three and nine months ended September 30, 2026 compared to the same periods in 2025 as several late-stage studies ended.
We may conduct multiple clinical trials on a drug candidate, including multiple clinical trials for the various indications we may be studying. Furthermore, as we obtain results from trials, we may elect to discontinue clinical trials for certain drug candidates in certain indications in order to focus our resources on more promising drug candidates or indications. Our Phase 1 and Phase 2 programs are clinical research programs that fuel our Phase 3 pipeline. When our medicines are in Phase 1 or Phase 2 clinical trials, they are in a dynamic state in which we may adjust the development strategy for each medicine. Although we may characterize a medicine as "in Phase 1" or "in Phase 2," it does not mean that we are conducting a single, well-defined study with dedicated resources. Instead, we allocate our internal resources on a shared basis across numerous medicines based on each medicine's particular needs at that time. This means we are constantly shifting resources among medicines. Therefore, what we spend on each medicine during a particular period is usually a function of what is required to keep the medicines progressing in clinical development, not what medicines we think are most important. For example, the number of people required to start a new study is large, the number of people required to keep a study going is modest and the number of people required to finish a study is large. However, such fluctuations are not indicative of a shift in our emphasis from one medicine to another and cannot be used to accurately predict future costs for each medicine. Because we always have numerous medicines in preclinical and varying stages of clinical research, the fluctuations in expenses from medicine to medicine, in large part, offset one another. If we partner a medicine, it may affect the size of a trial, its timing, its total cost and the timing of the related costs.
Medical Affairs
Our medical affairs function is responsible for funding and coordinating investigator-sponsored trials, communicating scientific and clinical information to healthcare providers, medical professionals and patients, and managing publications.
The following table sets forth information on medical affairs expenses (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Medical affairs expenses, excluding non-cash compensation expense related to equity awards $ 11.5 $ 8.9 $ 32.8 $ 22.3
Non-cash compensation expense related to equity awards 2.5 1.0 7.1 3.8
Total medical affairs expenses $ 14.0 $ 9.9 $ 39.9 $ 26.1
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Medical affairs expenses, excluding non-cash compensation expense related to equity awards, increased in the three and nine months ended September 30, 2026 compared to the same periods in 2025 as we continued advancing our late-stage pipeline.
Manufacturing and Development Chemistry
Expenditures in our manufacturing and development chemistry function consist primarily of personnel costs, specialized chemicals for oligonucleotide manufacturing, validation batches to support regulatory approvals, laboratory supplies and outside services. Our manufacturing and development chemistry function is responsible for providing drug supplies to drug development and our collaboration partners. Our manufacturing procedures include testing to satisfy good laboratory and good manufacturing practice requirements.
The following table sets forth information on manufacturing and development chemistry expenses (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Manufacturing and development chemistry expenses, excluding non-cash compensation expense related to equity awards $ 23.3 $ 15.8 $ 64.2 $ 51.6
Non-cash compensation expense related to equity awards 2.5 2.1 8.5 5.8
Total manufacturing and development chemistry expenses $ 25.8 $ 17.9 $ 72.7 $ 57.4
Manufacturing and development chemistry expenses, excluding non-cash compensation expense related to equity awards, increased in the three and nine months ended September 30, 2026 due to the timing of manufacturing performed by our contract manufacturing organizations for drug product and active pharmaceutical ingredients related to several late-stage programs.
R&D Support
In our research, development and patent expenses, we include support costs such as rent, repair and maintenance for buildings and equipment, utilities, depreciation of laboratory equipment and facilities, amortization of our intellectual property, information technology costs, procurement costs and waste disposal costs. We call these costs R&D support expenses.
The following table sets forth information on R&D support expenses (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Occupancy $ 10.5 $ 7.8 $ 30.3 $ 21.6
Personnel costs 9.4 7.6 25.8 21.8
Patent expenses 0.1 2.6 3.0 4.1
Computer software and licenses 0.4 3.4 1.3 9.8
Insurance 1.0 0.9 1.7 2.6
Taxes 1.2 0.7 3.7 3.9
Other 3.9 0.1 10.0 0.5
Total R&D support expenses, excluding non-cash compensation expense related to equity awards 26.5 23.1 75.8 64.3
Non-cash compensation expense related to equity awards 3.0 4.5 8.9 13.1
Total R&D support expenses $ 29.5 $ 27.6 $ 84.7 $ 77.4
R&D support expenses, excluding non-cash compensation expense related to equity awards, increased in the three and nine months ended September 30, 2026 compared to the same periods in 2025 primarily due to increased occupancy costs attributed to our lease of the laboratory and office space facility that commenced in September 2025. In addition, personnel costs increased period over period due to increased headcount.
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Selling, General and Administrative Expenses
SG&A expenses include personnel, information technology systems and outside costs associated with the commercialization and pre-commercialization activities for our medicines and costs to support our company, our employees and our stockholders including, legal, human resources, investor relations and finance. Additionally, we include in SG&A expenses such costs as rent, repair and maintenance of buildings and equipment, depreciation and utilities costs that we need to support the corporate functions listed above. We also include fees we owe under our in-licensing agreements related to SPINRAZA and QALSODY and cost sharing payments associated with shared commercialization activities under our WAINUA collaboration with AstraZeneca.
The following table sets forth information on SG&A expenses (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Selling, general and administrative expenses, excluding non-cash compensation expense related to equity awards $ 135.4 $ 86.6 $ 397.4 $ 234.6
Non-cash compensation expense related to equity awards 18.8 10.2 57.6 29.1
Total selling, general and administrative expenses $ 154.2 $ 96.8 $ 455.0 $ 263.7
SG&A expenses, excluding non-cash compensation expense related to equity awards, increased in the three and nine months ended September 30, 2026 compared to the same periods in 2025 primarily due to investments related to commercialization efforts for TRYNGOLZA, DAWNZERA and ZANVASTRO. We expect SG&A expenses to increase as we continue to invest in our independent commercial launches.
Investment Income
The following table sets forth information on investment income (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Investment income $ 19.5 $ 23.7 $ 65.3 $ 73.0
Investment income for the three and nine months ended September 30, 2026 decreased compared to the same periods in 2025 due to a decrease in our cash balance during the nine months ended September 30, 2026 compared to the same period in 2025. Our cash balance decreased due to the repayment upon maturity of our 0% Notes due 2026 in April 2026.
Interest Expense
The following table sets forth information on interest expense (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Convertible notes:
Non-cash amortization of debt issuance costs $ 1.7 $ 1.6 $ 5.5 $ 4.6
Interest expense payable in cash 2.5 2.5 7.5 7.6
Interest on mortgage for manufacturing facility 0.1 0.1 0.3 0.2
Other 0.3 - 1.1 -
Total interest expense $ 4.6 $ 4.2 $ 14.4 $ 12.4
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Interest Expense Related to Sale of Future Royalties
We recorded $4.1 million and $39.0 million of interest expense related to the sale of future royalties in the three and nine months ended September 30, 2026, respectively, compared to $18.0 million and $55.4 million in the same periods in 2025. These amounts are related to the Royalty Pharma Investments, or Royalty Pharma, transaction, in which we sold a minority interest in our future SPINRAZA and pelacarsen royalties to Royalty Pharma for a $500 million upfront payment and $625 million of potential future payments. In September 2026, we began recognizing contra-interest expense related to the Royalty Pharma arrangement due to a change in estimate. Refer to Part I, Item 1, Note 10, Liability Related to Sale of Future Royalties, in the Notes to Condensed Consolidated Financial Statements for further details related to the Royalty Pharma arrangement.
Gain on Investments
The following table sets forth information on gain on investments, net (in millions):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Gain on investments $ 9.5 $ 29.9 $ 21.9 $ 9.4
The period over period fluctuations in gain on investments were primarily due to changes in the fair value of investments in publicly traded biotechnology companies.
Net Loss and Net Loss per Share
The following table sets forth information on net loss and net loss per share (in millions, except per share amounts):
Three Months Ended Nine Months Ended
September 30, September 30,
2026 2025 2026 2025
Net loss $ (110.0 ) $ (128.6 ) $ (317.1 ) $ (152.0 )
Basic and diluted net loss per share $ (0.66 ) $ (0.80 ) $ (1.92 ) $ (0.95 )
The period-over-period fluctuations in our net loss were driven by factors discussed in the sections above.
Liquidity and Capital Resources
We have financed our operations primarily from research and development collaborative agreements. We also financed our operations from commercial revenue from SPINRAZA, WAINUA and QALSODY royalties and TEGSEDI and WAYLIVRA commercial revenue. In addition, we began earning commercial revenue from TRYNGOLZA product sales in late December 2024, DAWNZERA product sales in late August 2025 and ZANVASTRO product sales in September 2026. From our inception through September 30, 2026, we have earned approximately $9.6 billion in revenue. We have also financed our operations through the sale of our equity securities, the issuance of long-term debt and the sale of future royalties. From the time we were founded through September 30, 2026, we have raised net proceeds of approximately $2.9 billion from the sale of our equity securities. Additionally, from our inception through September 30, 2026, we have borrowed approximately $3.5 billion under long-term debt arrangements and received proceeds of $0.5 billion from the sale of future royalties to finance a portion of our operations.
From December 31, 2025 to September 30, 2026, our working capital decreased primarily due to a decrease in cash, cash equivalents and short-term investments, and our long-term obligations did not change significantly. In April 2026, we paid the remaining principal balance of our 0% Notes due 2026 upon maturity. Refer to Part I, Item 1, Note 11, Convertible Debt, in the Notes to Condensed Consolidated Financial Statements for further details.
Index
The following table summarizes our contractual obligations, excluding our liability related to the sale of future royalties, as of September 30, 2026. The table provides a breakdown of when obligations become due.
Contractual Obligations Payments Due by Period (in millions)
(selected balances described below) Total Less than 1 year More than 1 year
0% Notes due 2030 (principal payable) $ 770.0 $ - $ 770.0
1.75% Notes due 2028 (principal and interest payable) 595.2 10.1 585.1
Operating leases 458.3 36.4 421.9
Building mortgage payments (principal and interest payable) 8.8 8.8 -
Other obligations (principal and interest payable) 0.6 0.1 0.5
Total $ 1,832.9 $ 55.4 $ 1,777.5
Our contractual obligations consist primarily of our convertible debt. In addition, we also have a facility mortgage, facility leases, equipment financing arrangements and other obligations. We believe our cash, cash equivalents and short-term investments, as well as plans for cash in the future, will be sufficient to fund our planned operations and these obligations. We have not entered into, nor do we currently have, any off-balance sheet arrangements (as defined under SEC rules).
Convertible Debt and Call Spread
Refer to Part I, Item 1, Note 11, Convertible Debt, in the Notes to Condensed Consolidated Financial Statements for the significant terms of each convertible debt instrument.
Operating Facilities
Refer to Part IV, Item 15, Note 7 of our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for further details on our operating facilities.
Operating Leases
Refer to Part IV, Item 15, Note 7 of our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for further details on our operating leases.
Liability Related to Sale of Future Royalties
Refer to Part I, Item 1, Note 10, Liability Related to Sale of Future Royalties, in the Notes to Condensed Consolidated Financial Statements for further details on our royalty purchase agreement with Royalty Pharma.
Other Obligations
In addition to contractual obligations, we had outstanding purchase orders as of September 30, 2026 for the purchase of services, capital equipment and materials as part of our normal course of business.
We may enter into additional collaborations with partners which could provide for additional revenue to us and we may incur additional cash expenditures related to our obligations under any of the new agreements we may enter into. We currently intend to use our cash, cash equivalents and short-term investments to finance our activities. However, we may also pursue other financing alternatives, like issuing additional shares of our common stock, issuing debt instruments, refinancing our existing debt, securing lines of credit or executing royalty monetization agreements. Whether we use our existing capital resources or choose to obtain financing will depend on various factors, including the future success of our business, the prevailing interest rate environment and the condition of financial markets generally.
Index
Ionis Pharmaceuticals Inc. published this content on November 09, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 09, 2026 at 13:34 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]