IONIS PHARMACEUTICALS INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Significant Accounting Policies

Basis of Presentation

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

Organization and Business Activity

We incorporated in California on January 10, 1989. In conjunction with our IPO, we reorganized as a Delaware corporation in April 1991. In December 2015, we changed our name from Isis Pharmaceuticals, Inc. to Ionis Pharmaceuticals, Inc. We are a fully integrated commercial-stage biotechnology company and a leader in the discovery and development of RNA-targeted therapeutics.

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 asingle operating segment. Refer to Note 12, Segment Information, for further details on our segment information.

Use of Estimates

We prepare our 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 consolidated financial statements and accompanying notes. Actual results could differ from our estimates.

Reclassifications

We reclassified certain prior period amounts to conform to the current period presentation, including revenuein the consolidated statements of operations. These reclassifications had no impact on prior period results.

Revenue Recognition

We generally recognize revenue when we have satisfied all contractual obligations and are reasonably assured of collecting the resulting receivable. In the instances in which we have received payment from our customers in advance of recognizing revenue, we include the amounts within deferred revenue in our consolidated balance sheets.

At contract inception, we analyze our collaboration arrangements to assess whether such arrangements involve joint operating activities performed by parties that are both active participants in the activities and exposed to significant risks and rewards dependent on the commercial success of such activities and therefore within the scope of ASC Topic 808, Collaborative Arrangements, or ASC 808. ASC 808 does not address the recognition and measurement of collaborative arrangements and instead refers companies to use other authoritative accounting literature. For collaboration arrangements within the scope of ASC 808 that contain multiple elements, we first determine which elements of the collaboration reflect a vendor-customer relationship and therefore are within the scope of ASC 606, Revenue from Contracts with Customers. When we determine elements of a collaboration do not reflect a vendor-customer relationship, we consistently apply the reasonable and rational policy election we made by analogizing to authoritative accounting literature.

We evaluate the income statement classification for presentation of amounts due from or owed to other participants associated with multiple activities in a collaboration arrangement based on the nature of each separate activity. For example, in our WAINUA collaboration with AstraZeneca, we recognize funding received from AstraZeneca for co-development activities as revenue; while we recognize cost sharing payments to and from AstraZeneca associated with co-commercialization activities and co-medical affairs activities as selling, general and administrative, or SG&A, expense and research and development, or R&D, expense, respectively.

Steps to Recognize Revenue

For elements of our contractual relationships that we account for under ASC 606, we use a five-step process to determine the amount of revenue we should recognize and when we should recognize it. The five-step process is as follows:

1. Identify the contract

Accounting rules require us to first determine if we have a contract with our partner or customer.

2. Identify the performance obligations

We next identify our performance obligations, which represent the distinct goods and services we are required to provide under the contract.

3. Determine the transaction price

We then determine the transaction price by reviewing the amount of consideration we are eligible to earn under the collaboration agreement, including any variable consideration.

4. Allocate the transaction price

Next, we allocate the transaction price to each of our performance obligations. When we have to allocate the transaction price to more than one performance obligation, we make estimates of the relative stand-alone selling price of each performance obligation because we do not typically sell our goods or services on a stand-alone basis. We then allocate the transaction price to each performance obligation based on the relative stand-alone selling price. We do not reallocate the transaction price after the start of an agreement to reflect subsequent changes in stand-alone selling prices.

5. Recognize revenue

We recognize collaborative agreement revenue in one of two ways, over time or at a point in time. We recognize revenue over time when we are executing on our performance obligation over time and our partner receives benefit over time. For example, we recognize revenue over time when we provide R&D services. We recognize revenue at a point in time when our partner receives full use of an item at a specific point in time. For example, we recognize revenue at a point in time when we deliver a license or API to a partner.

We recognize revenue from product sales when the customer obtains control of our product in the amount of the transaction price, which is the amount that reflects the consideration which we expect to receive. We estimate reserves for variable consideration related to applicable discounts, rebates, chargebacks, co-pay assistance and other allowances included in our agreements with customers, payors and other third parties. We include the amount of variable consideration in the transaction price to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. If actual results vary significantly from our estimates, we adjust our estimates in the period that we become aware of such variances.

We recognize royalty revenue in the period in which the counterparty sells the related product and recognizes the related revenue, which in certain cases may require us to estimate our royalty revenue.

Amendments to Agreements

From time to time we amend our collaboration agreements. When this occurs, we are required to assess the following items to determine the accounting for the amendment:

1)If the additional goods and/or services are distinct from the other performance obligations in the original agreement; and

2)If the goods and/or services are sold at a stand-alone selling price.

If we conclude the goods and/or services in the amendment are distinct from the performance obligations in the original agreement and at a stand-alone selling price, we account for the amendment as a separate agreement. If we conclude the goods and/or services are not distinct and are sold at a stand-alone selling price, we then assess whether the remaining goods or services are distinct from those already provided. If the goods and/or services are distinct from what we have already provided, then we allocate the remaining transaction price from the original agreement and the additional transaction price from the amendment to the remaining goods and/or services. If the goods and/or services are not distinct from what we have already provided, we update the transaction price for our single performance obligation and recognize any change in our estimated revenue as a cumulative-effect adjustment.

Multiple agreements

From time to time, we may enter into separate agreements at or near the same time with the same partner. We evaluate such agreements to determine whether we should account for them individually as distinct arrangements or whether the separate agreements should be combined and accounted for together. We evaluate the following to determine the accounting for the agreements:

●Whether the agreements were negotiated together with a single objective;

●Whether the amount of consideration in one contract depends on the price or performance of the other agreement; or

●Whether the goods and/or services promised under the agreements are a single performance obligation.

Our evaluation involves significant judgment to determine whether a group of agreements might be so closely related that accounting guidance requires us to account for them as a combined arrangement.

Contracts Receivable

Our contracts receivable balance represents the amounts we have billed our partners or customers that are due to us unconditionally for goods we have delivered or services we have performed. When we bill our partners or customers with payment terms based on the passage of time, we consider the contracts receivable to be unconditional. We typically receive payment withinone quarter of billing our partner or customer.

As of December 31, 2025, approximately 93.6 percent of our contracts receivables were from three significant customers, including approximately 31.6 percent of our contract receivables that were fromone significant customer for product sales. In the year ended December 31, 2025, our TRYNGOLZA sales were primarily fromone significant customer. As of December 31, 2024, approximately 95.6 percent of our contracts receivables were from three significant customers.

Unbilled Royalties

Our unbilled royalties represent our right to receive consideration from our partners in advance of when we are eligible to bill them for royalties. We include these unbilled amounts in other current assets in our consolidated balance sheets.

Deferred Revenue

We are often entitled to bill our customers and receive payment from our customers in advance of our obligation to provide services or transfer goods to our partners. In these instances, we include the amounts in deferred revenue in our consolidated balance sheets. During the years ended December 31, 2025 and 2024, we recognized $78.4 million and $166.1 million of revenue from amounts that were in our beginning deferred revenue balance for each respective period. For further discussion, refer to our revenue recognition policy above.

Cost of Sales

Our cost of sales is comprised of costs related to our commercial revenue, including manufacturing costs, transportation and freight costs and indirect overhead costs associated with the manufacturing and distribution of our products. We also may include certain period costs related to manufacturing services and inventory adjustments in cost of sales.

Cost of sales for a newly launched product, such as TRYNGOLZA or DAWNZERA, 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.

Research, Development and Patent Expenses

Our research, development and patent expenses include wages, benefits, facilities, supplies, external services, clinical trial and manufacturing costs, patents and other expenses that are directly related to our R&D operations. We expense R&D costs as we incur them. When we make payments for R&D services prior to the services being rendered, we record those amounts as prepaid assets in our consolidated balance sheets and we expense them as the services are provided. A portion of the costs included in R&D expenses are costs associated with our partner agreements. In 2025, 2024 and 2023, patent expenses were $6.4 million, $5.3 million and $4.3 million, respectively.

Income Taxes

We account for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses and research and development credit carryforwards. We record a valuation allowance when necessary to reduce our net deferred tax assets to the amount expected to be realized.

We apply the authoritative accounting guidance prescribing a threshold and measurement attribute for the financial recognition and measurement of a tax position taken or expected to be taken in a tax return. We recognize liabilities for uncertain tax positions based on a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step requires us to estimate and measure the tax benefit as the largest amount that is more than 50 percent likely to be realized upon ultimate settlement.

We are required to use significant judgment in evaluating our uncertain tax positions and determining our provision for income taxes. Although we believe our reserves are reasonable, we can provide no assurance that the final tax outcome of these matters will not be different from that which we have reflected in our historical income tax provisions and accruals. We adjust these reserves for changing facts and circumstances, such as the closing of a tax audit or the refinement of an estimate. To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences may impact the provision for income taxes in the period in which we make such determination.

We are also required to use significant judgment in determining any valuation allowance recorded against our deferred tax assets. In assessing the need for a valuation allowance, we consider all available evidence, including scheduled reversal of deferred tax liabilities, past operating results, the feasibility of tax planning strategies and estimates of future taxable income. We base our estimates of future taxable income on assumptions that are consistent with our plans. The assumptions we use represent our best estimates and involve inherent uncertainties and the application of our judgment. Should actual amounts differ from our estimates, the amount of our tax expense and liabilities we recognize could be materially impacted. We record a valuation allowance to reduce the balance of our net deferred tax assets to the amount we believe is more-likely-than-not to be realized.

Basic and Diluted Net Loss per Share

Basic net loss per share

We compute basic net loss per share by dividing our net loss by our weighted-average number of common shares outstanding during the period.

Diluted net loss per share

For the years ended December 31, 2025, 2024 and 2023, 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:

●0 percent convertible senior notes due 2030, or 0% Notes due 2030;

●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 years ended December 31, 2024 and 2023, common stock underlying the 0.125 percent convertible senior notes due 2024, or 0.125% Notes due 2024 and note hedges related to the 0.125% Notes due 2024 would also have had an anti-dilutive effect on net loss per share.

Stock-Based Compensation Expense

We measure stock-based compensation expense for equity-classified awards, principally related to stock options, RSUs, PRSUs and stock purchase rights under our 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 consolidated statements of operations. We reduce stock-based compensation expense for estimated forfeitures at the time of grant and revise in subsequent periods if actual forfeitures differ from those estimates.

We recognize compensation expense for stock options granted, RSUs, PRSUs and stock purchase rights under the ESPP using the accelerated multiple-option approach. Under the accelerated multiple-option approach (also known as the graded-vesting method), we recognize compensation expense over the requisite service period for each separately vesting tranche of the award as though the award were in substance multiple awards, which results in the expense being front-loaded over the vesting period.

Stock Options and Stock Purchase Rights:

We use the Black-Scholes model to estimate the fair value of stock options granted and stock purchase rights under our ESPP. On the grant date, we use our stock price and assumptions regarding a number of variables to determine the estimated fair value of stock-based payment awards. These variables include, but are not limited to, our expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The expected term of stock options granted represents the period of time that we expect them to be outstanding. Historically, we estimated the expected term of options granted based on historical exercise patterns. In 2021, our Compensation Committee approved an amendment to the 2011 Equity Incentive Plan, or 2011 Plan, and the 2020 Equity Incentive Plan, or 2020 Plan, that increased the contractual term of stock options granted under these plans from seven years toten years for stock options granted on January 1, 2022 and thereafter. We determined that we are unable to rely on our historical exercise data as a basis for estimating the expected life of stock options granted to employees following this change because the contractual term changed and we have no other means to reasonably estimate future exercise behavior. We therefore used the simplified method for determining the expected life of stock options granted to employees in the years ended December 31, 2025, 2024 and 2023. Under the simplified method, we calculate the expected term as the average of the 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 historical exercise patterns.

RSU’s:

The fair value of RSUs is based on the market price of our common stock on the date of grant. The RSUs we have granted to employees vest annually over afour-year period. The RSUs we granted to our board of directors prior to June 2020 vested annually over afour-year period. The annual RSUs we granted to our board of directors after June 2020 fully vest afterone year. The RSUs we grant to board members at their initial appointment to the board of directors vest annually over athree-year period.

PRSU’s:

Beginning in 2020, we added PRSU awards to the compensation for our Chief Executive Officer, Dr. Brett Monia. Beginning in 2022, we added PRSU awards to the compensation for our other Section 16 officers. Under the terms of the PRSUs we granted in 2020 through 2022, one third of the PRSUs may vest at the end ofthree separate performance periods spread over the three years following the date of grant (i.e., theone-year period commencing on the date of grant and ending on the first anniversary of the date of grant; thetwo-year period commencing on the date of grant and ending on the second anniversary of the date of grant; and thethree-year period commencing on the date of grant and ending on the third anniversary of the date of grant) based on our relative total shareholder return, or TSR, as compared to a peer group of companies, and as measured, in each case, at the end of the applicable performance period. Under the terms of the grantsno number of PRSUs is guaranteed to vest and the actual number of PRSUs that will vest at the end of each performance period may be anywhere from zero to 150 percent of the target number depending on our relative TSR. These PRSU awards also included an alternative three-year payout mechanism, or the Alternative Calculation, under which we must calculate an alternative payout at the end of the final three-year measurement period assuming the only measurement period for all shares under the award was thethree-year period. If the Alternative Calculation is greater than payouts under the sum of the three years, then such PRSU award will pay out to achieve the number of shares payable under the Alternative Calculation.

Under the terms of the PRSUs we granted in 2025, 2024 and 2023,100 percent of the PRSUs may vest at the end of thethree-year performance period based on our relative TSR as compared to a peer group of companies and as measured at the end of the performance period. Under the terms of the grants, no number of PRSUs is guaranteed to vest and the actual number of PRSUs that will vest at the end of each performance period may be anywhere from zero to 200 percent of the target number depending on our relative TSR.

We determine the fair value of the PRSUs using a Monte Carlo model because the performance target is based on our relative TSR, which represents a market condition. We are recognizing the grant date fair value of these awards as stock-based compensation expense using the accelerated multiple-option approach over the vesting period.

Refer to Note 8, Stockholders’ Equity, for additional information regarding our stock-based compensation plans.

Concentration of Credit Risk

Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash equivalents, short-term investments and receivables. We place our 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 Moody’s, Standard & Poor’s, or S&P, or Fitch, respectively. We have established guidelines relative to diversification and maturities that maintain safety and liquidity. We periodically review and modify these guidelines to maximize trends in yields and interest rates without compromising safety and liquidity.

Fair Value Measurements

We have estimated the fair value of our financial instruments. The amounts reported for cash, accounts receivable, accounts payable and accrued expenses approximate the fair value because of their short maturities. We report our investment securities at their estimated fair value based on quoted market prices for identical or similar instruments.

We use a three-tier fair value hierarchy to prioritize the inputs used in our fair value measurements. These tiers include: Level 1, defined as observable inputs such as quoted prices in active markets for identical assets, which includes our money market funds and treasury securities classified as available-for-sale securities and our investment in equity securities in publicly traded biotechnology companies; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable, which includes our fixed income securities and commercial paper classified as available-for-sale securities; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring us to develop our own assumptions. We classify most of our securities as Level 2. We obtain the fair value of our Level 2 investments from our custodian bank or from a professional pricing service. We validate the fair value of our Level 2 investments by understanding the pricing model used by the custodian banks or professional pricing service provider and comparing that fair value to the fair value based on observable market prices.

Cash, Cash Equivalents and Investments

We consider all liquid investments with maturities of three months or less when we purchase them to be cash equivalents. Our short-term investments have initial maturities of greater than three months from date of purchase. We classify our short-term debt investments as “available-for-sale” and carry them at fair market value based upon prices on the last day of the fiscal period for identical or similar items. We record unrealized gains and losses on debt securities as a separate component of comprehensive income (loss) and include net realized gains and losses in gain (loss) on investments in our consolidated statements of operations. We use the specific identification method to determine the cost of securities sold.

We also have equity investments of less than 20 percent ownership in public and private biotechnology companies that we received as part of a technology license or partner agreement. At December 31, 2025, we held equity investments inthree publicly traded companies andfive privately held companies.

We are required to measure and record our equity investments at fair value and to recognize the changes in fair value in our consolidated statements of operations. We account for our equity investments in publicly traded companies at their listed stock price. We account for our equity investments in privately held companies at their 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.

Inventories

We reflect our inventory in our consolidated balance sheets at the lower of cost or net realizable value under the first-in, first-out method, or FIFO. Our inventory costs include material, labor and overhead costs. Our raw materials include active pharmaceutical ingredient, or API, for commercial medicines. We capitalize inventory costs related to drug products when we consider future commercialization to be probable and expect to realize future economic benefit. When evaluating whether to capitalize inventory costs, we consider various factors, including the likelihood of receiving required regulatory approvals, communications from regulatory agencies such as safety or efficacy concerns, underlying manufacturing processes and supply chain matters, shelf life of the inventory, market trends such as competition and pricing, potential legal matters and potential reimbursement strategies. We record inventory costs that do not meet our capitalization requirements as R&D expense in our consolidated statements of operations.

We review our inventory periodically and reduce the carrying value of items we consider to be slow moving or obsolete to their estimated net realizable value based on forecasted demand compared to quantities on hand. We consider several factors in estimating the net realizable value, including shelf life of our inventory and historical write-offs.

Capitalized Materials

We capitalize the costs of certain materials that we purchase for use in manufacturing our medicines in our clinical development programs because until we use these materials, they have alternative future uses. We can use these materials in multiple drug candidates and, as a result, each material has future economic value independent of the development status of any single medicine. We include capitalized materials in other current assets in our consolidated balance sheets and expense these costs as R&D expenses when we use the materials. We review our capitalized materials periodically for continued alternative future use and reduce the carrying value of items in the period in which an impairment is identified.

We record capitalized costs related to materials to be used in our clinical development programs within other current assets in our consolidated balance sheets.

Property, Plant and Equipment

We carry our property, plant and equipment at cost and depreciate it on the straight-line method over its estimated useful life, which we determine as the following (in years):

We depreciate our leasehold improvements using the shorter of the estimated useful life or remaining lease term. We evaluate long-lived assets, which include property, plant and equipment, for impairment whenever events or changes in circumstances indicate that we may not be able to recover the carrying amount of such assets.

Accrued Liabilities

We have numerous medicines in preclinical studies and/or clinical trials at clinical sites throughout the world. We estimate our liability for preclinical and clinical development costs we have incurred and services that we have received but for which we have not yet been billed and maintain an accrual to cover these costs. These costs primarily relate to third-party clinical management costs, laboratory and analysis costs, toxicology studies and investigator grants. We estimate our liability using assumptions about study and patient activities and the related expected expenses for those activities determined based on the contracted fees with our service providers. The assumptions we use represent our best estimates of the activity and expenses at the time of our accrual and involve inherent uncertainties and the application of our judgment. Upon settlement, these costs may differ materially from the amounts accrued in our consolidated financial statements. Our historical accrual estimates have not been materially different from our actual amounts.

Convertible Debt

We account for each of our convertible debt instruments as a single unit of accounting, a liability, because we concluded that the conversion features do not require bifurcation as a derivative under ASC 815-15 and we did not issue our convertible debt instruments at a substantial premium. We record debt issuance costs as contra-liabilities in our consolidated balance sheets at issuance and amortize them over the contractual term of the convertible debt instrument using the effective interest rate. The balances of our convertible senior notes presented in our consolidated balance sheets represent the principal balance of each convertible debt instrument less the unamortized portion of the debt issuance costs.

As of December 31, 2025, we hadthree outstanding convertible senior notes, our 0% Notes due 2030, which mature in December 2030, our 1.75% Notes due 2028, which mature in June 2028, and our 0% Notes due 2026, which mature in April 2026. Our 0.125% Notes due 2024 matured in December 2024. Refer to Note 7, Long-Term Obligations and Commitments, for further details on our convertible senior notes.

Call Spread

In conjunction with the issuance of our 0% Notes due 2026 and 0.125% Notes due 2024 in April 2021 and December 2019, respectively, we entered into call spread transactions, which were comprised of purchasing note hedges and selling warrants. We account for the note hedges and warrants as separate freestanding financial instruments and treat each instrument as a separate unit of accounting. We determined that the note hedges and warrants do not meet the definition of a liability using the guidance contained in ASC Topic 480; therefore, we account for the note hedges and warrants using the Derivatives and Hedging – Contracts in Entity’s Own Equity accounting guidance contained in ASC Topic 815. We determined that the note hedges and warrants meet the definition of a derivative, are indexed to our stock and meet the criteria to be classified in shareholders’ equity. We recorded the aggregate amount paid for the note hedges and the aggregate amount received for the warrants as additional paid-in capital in our consolidated balance sheets. We reassess our ability to continue to classify any outstanding note hedges and warrants in shareholders’ equity at each reporting period. Refer to Note 7, Long-Term Obligations and Commitments, for further details on the call spread transactions.

Liability Related to Sale of Future Royalties

In January 2023, we entered into a royalty purchase agreement with Royalty Pharma Investments, or Royalty Pharma, to monetize a portion of our future SPINRAZA and pelacarsen royalties we are entitled to under our arrangements with Biogen and Novartis, respectively. Under our agreement with Royalty Pharma, we record upfront payments and milestone payments we receive from the sale of future royalties as a liability, net of transaction costs. Refer to Note 7, Long-Term Obligations and Commitments, for further details on the agreement.

We record royalty payments made to Royalty Pharma as a reduction of the liability or accrued interest and amortize the transaction costs over the estimated life of the royalty stream. We account for the associated interest expense under the effective interest rate method, while continuing to recognize the full amount of royalty revenue in the period in which the counterparty sells the related product and recognizes the related revenue.

We calculate the liability related to the sale of future royalties, effective interest rate and the related interest expense using our current estimate of anticipated future royalty payments under the arrangement, which we periodically reassess based on internal projections and information from our partners who are responsible for commercializing the medicines. If there is a material change in our estimate, we will prospectively adjust the effective interest rate and the related interest expense.

Leases

We determine if an arrangement contains a lease at inception. We currently only have operating leases. We recognize a right-of-use operating lease asset and associated short- and long-term operating lease liability in our consolidated balance sheets for operating leases greater than one year. Our right-of-use assets represent our right to use an underlying asset for the lease term and our lease liabilities represent our obligation to make lease payments arising from the lease arrangement. We recognize our right-of-use operating lease assets and lease liabilities based on the present value of the future minimum lease payments we will pay over the lease term. We determine the lease term at the inception of each lease, and in certain cases our lease term could include renewal options if we conclude we are reasonably certain to exercise the renewal option. When we exercise a lease option that was not previously included in the initial lease term, we reassess our right-of-use asset and lease liabilities for the new lease term.

As our leases do not provide an interest rate implicit in the lease, we use our incremental borrowing rate, based on the information available as of the lease inception date or at the lease option extension date in determining the present value of future payments. We recognize rent expense for our minimum lease payments on a straight-line basis over the expected term of our lease. Our leases do not include material variable or contingent lease payments. We recognize period expenses, such as common area maintenance expenses, in the period we incur the expense.

Recent Accounting Standards

In November 2023, the Financial Accounting Standards Board, or FASB, issued Accounting Standard Update, or ASU, 2023-07, which provides updated guidance on segment reporting. The guidance requires public companies to disclose significant expenses that are regularly provided to the CODM, other segment items for each reportable segment and measures of segment profit or loss used by the CODM for allocating resources. In addition, the updated guidance requires public companies with a single reportable segment to provide all disclosures required under Accounting Standards Codification, or ASC, Topic 280, Segment Reporting, and public companies to include in interim reports all disclosures related to a reportable segment's profit or loss and assets that are currently required in annual reports. We adopted the annual reporting requirements in our 2024 Annual Report on Form 10-K and began providing the interim reporting requirements in our Quarterly Report on Form 10-Q in the first quarter of 2025. Refer to Note 12, Segment Information, for further details on our segment information.

In December 2023, the FASB issued ASU 2023-09, which provides updated guidance on income tax disclosures. The new guidance requires companies to provide additional disaggregation of information related to the income tax rate reconciliation and income tax payments. In addition, the guidance eliminates certain existing disclosure requirements related to uncertain tax positions and unrecognized deferred tax liabilities. This update is effective for annual periods beginning after December 15, 2024. We adopted this guidance on a prospective basis in our 2025 Annual Report on Form 10-K. This guidance did not have a material impact on our consolidated financial statements. Refer to Note 9, Income Taxes, for further details on our income taxes.

In November 2024, the FASB issued ASU 2024-03, which requires public companies to disclose disaggregated expenses for certain expenses in the income statement. This update is effective for annual periods beginning after December 15, 2026 and interim periods within annual periods beginning after December 15, 2027. Early adoption of this guidance is permitted. The guidance may be applied on a prospective or retrospective basis. We are currently assessing the impact and timing of adopting this update.

In November 2024, the FASB issued ASU 2024-04 to clarify the guidance for determining whether to account for early settlements of convertible debt as induced conversions or extinguishments. The amended guidance clarifies that the induced conversion accounting guidance under ASC Topic 470-20,Debt with Conversion and Other Options, is applicable to convertible debt instruments that are settled in equity, cash or other assets, or a combination thereof. Under the amended guidance, a settlement of a convertible debt instrument qualifies as an induced conversion if (i) the inducement offer includes all consideration (in form and amount) issuable under the conversion privileges defined in the terms of the convertible debt instrument, and (ii) the convertible debt instrument has a substantive conversion feature as of its issuance date and the inducement offer acceptance date. This update is effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods. Early adoption of this guidance is permitted. The guidance may be applied on a prospective or retrospective basis. We early adopted this update in the fourth quarter of 2025 on a prospective basis and accounted for the partial repurchase of our 0% Notes due 2026 in accordance with the amended guidance. Refer to Note 7,Long-Term Obligations and Commitments, for further details on our convertible debt.

In July 2025, the FASB issued ASU 2025-05, which amended the guidance in ASC 326,Credit Losses, 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. Early adoption of this guidance is permitted. Companies that elect the practical expedient are required to apply the amendments prospectively. We are currently assessing the impact and timing of adopting this update.

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 expect to early adopt this update in the first quarter of 2026 on a prospective basis. We expect this guidance will not have a material impact on our consolidated financial statements.

In September 2025, the FASB issued ASU 2025-07, which clarifies that share-based non-cash consideration received from a customer in exchange for goods or services under a revenue contract is subject to the guidance on non-cash consideration under ASC 606. This update is effective for annual periods beginning after December 15, 2026 and interim periods within those annual periods. Early adoption of this guidance is permitted. The guidance may be applied on a prospective or modified retrospective basis. We are currently assessing the impact and timing of adopting this update.

In December 2025, the FASB issued ASU 2025-11, which clarifies the current interim disclosure requirements and the applicability of ASC 270,Interim Reporting. The updated guidance does not change the fundamental nature or expand or reduce the disclosure requirements of interim reporting. This update is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption of this guidance is permitted. We are currently assessing the impact and timing of adopting this update.

In December 2025, the FASB issued ASU 2025-12, which includes clarification and improvements to various topics in the ASC. This update is effective for annual reporting periods beginning after December 15, 2026 and interim periods within those annual periods. Early adoption of this guidance is permitted. We are currently assessing the impact and timing of adopting this update.

We do not expect any other recently issued accounting standards to have a material impact to our financial statements or disclosures.

2. Supplemental Financial Data

Inventories

Our inventory consisted of the following (in thousands):

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 consolidated balance sheets. The amount reported as deposits and other assets as of December 31, 2025 consists of work in process inventory.

Property, Plant and Equipment

Our property, plant and equipment consisted of the following (in thousands):

Accrued Liabilities

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

3. Revenues

During the years ended December 31, 2025, 2024 and 2023, our revenues were comprised of the following (in thousands):

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 (olezarsen) 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 (donidalorsen) 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 earn commercial revenue from TEGSEDI and WAYLIVRA sales, included within other commercial revenue, 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 Note 4, Collaborative Arrangements and Licensing Agreements, for details on our commercialization partnerships with Sobi and PTC.

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, then 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. Refer to Note 4, Collaborative Arrangements and Licensing Agreements, for further details on this collaboration.

We evaluated our WAINUA collaboration under 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 606 for the license we granted to AstraZeneca and as a result we hadone 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 and 87.5 percent of development costs in the U.S. and the rest of the world, respectively. 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 SG&A expense and R&D expense, respectively.

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. We include commercial revenue from TEGSEDI and WAYLIVRA sales under our agreements with Sobi within other commercial revenue in our consolidated statements of operations. Under our agreements with Sobi, Sobi does not generally have a right of return.

4. Collaborative Arrangements and Licensing Agreements

AstraZeneca

WAINUA (Eplontersen) Collaboration

In 2021, we entered into a joint development and commercialization agreement with AstraZeneca to develop and commercialize eplontersen for the treatment of ATTR. The FDA approved eplontersen with the brand name, WAINUA, for hereditary ATTR, or ATTRv-PN, while the European Commission, or EC, approved WAINUA for ATTRv-PN in the European Union, or EU, as WAINZUA. WAINUA is also approved in other markets, including the UK, Canada and China, with additional regulatory reviews underway. Under the agreement, we are jointly developing WAINUA with AstraZeneca worldwide for ATTRv-PN and ATTR cardiomyopathy, or ATTR-CM. We are jointly commercializing WAINUA with AstraZeneca in the U.S. We granted AstraZeneca exclusive rights to commercialize WAINUA outside the U.S.

Over the term of the collaboration, we are eligible to receive up to $3.6 billion, which is comprised of a $200 million upfront payment, up to $485 million in development and approval milestone payments and up to $2.9 billion in sales milestone payments. The agreement includes territory-specific development, commercial and medical affairs cost-sharing provisions. In addition, we are eligible to receive up tomid-20 percent royalties for sales in the U.S. and tiered royalties up to the high teens for sales outside the U.S. From inception through December 31, 2025, we have received more than $575 million in payments under this collaboration. We will achieve the next payment of $200 million or $115 million upon regulatory approval of WAINUA for ATTR-CM in the U.S. or Europe, respectively, under this collaboration.

We recognize royalties that we earn from WAINUA sales within commercial revenue in our consolidated statements of operations.

We evaluated our WAINUA collaboration under 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 will perform, (iii) the co-commercialization activities that we and AstraZeneca will perform and (iv) the co-medical affairs activities that we and AstraZeneca will perform.

We determined that we had a vendor-customer relationship within the scope of ASC 606 for the license we granted to AstraZeneca and as a result we hadone performance obligation. For our sole performance obligation, we determined the transaction price was the $200 million upfront payment we received in 2021. In 2023, we earned a $20 million license fee payment when we licensed rights to Latin America for WAINUA to AstraZeneca. We recognized these payments in full because we did not have any remaining performance obligations after we delivered the licenses 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. 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 and 87.5 percent of development costs in the U.S. and the rest of the world, respectively. Because we are leading the Phase 3 development program, we recognize as revenue the percentage of cost-share funding AstraZeneca is responsible for 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 recognize cost-share funding we receive from AstraZeneca related to these activities as a reduction of our commercial and medical affairs expenses. In 2024, we earned a $30 million milestone payment from AstraZeneca when the Medicines and Healthcare products Regulatory Agency, or MHRA, approved WAINZUA for ATTRv-PN in the UK. We recognized this milestone payment in full as joint development revenue because we did not have any remaining performance obligations related to the milestone payment.

Cardiovascular, Renal and Metabolic Collaboration

In addition to our collaboration for WAINUA, we have a collaboration with AstraZeneca focused on discovering and developing treatments for cardiovascular, renal and metabolic diseases, which we formed in 2015. In December 2024, we amended this collaboration agreement with AstraZeneca. The amendment changed future potential milestone payments and royalties we could receive under the collaboration. We determined there were no changes that would require adjustments to revenue we previously recognized because we had no ongoing performance obligations under the agreement. Under our collaboration, AstraZeneca has licensed multiple medicines from us. AstraZeneca is responsible for global development, regulatory and commercialization activities and costs for each of the medicines it has licensed from us. In November 2025, AstraZeneca terminated the patatin-like phospholipase domain-containing protein 3, or PNPLA3, program under this collaboration.

Over the term of the collaboration, we are eligible to receive up to $3.4 billion, which is comprised of a $65 million upfront payment, up to $175 million in license fees, up to $444 million in development milestone payments, up to $593 million in regulatory milestone payments and up to $2.1 billion in sales milestone payments. In addition, we are eligible to receive tiered royalties up to 10 percent on net sales from any product that AstraZeneca successfully commercializes under this collaboration agreement. From inception through December 31, 2025, we have received more than $400 million in payments under this collaboration. We will achieve the next payment of $15 million if AstraZeneca advances a medicine under this collaboration.

At the commencement of this collaboration, we identifiedone performance obligation, which was to perform R&D services for AstraZeneca. We determined the transaction price to be the $65 million upfront payment we received and we allocated it to our single performance obligation. We recognized revenue for our R&D services performance obligation as we performed services based on our effort to satisfy this performance obligation relative to our total effort expected to satisfy our performance obligation. We completed our performance obligation in 2021. As we achieved milestone payments for our R&D services, we included these amounts in our transaction price for our R&D services performance obligation. From inception through the completion of our performance obligation, we included $90 million in payments in the transaction price for our R&D services performance obligation.

Under this collaboration, we have also generated additional payments that we concluded were not part of our R&D services performance obligation. We recognized each of these payments in full in the respective period we generated the payment because the payments were distinct and we did not have any performance obligations for the respective payment. For example, in the fourth quarter of 2025, we earned a $20 million payment when AstraZeneca initiated a Phase 1 study of ION826, an investigational medicine for the treatment of phospholamban, or PLN, myocardial disease. We recognized this payment in full in 2025 because we did not have any remaining performance obligations related to this milestone payment.

During the years ended December 31, 2025, 2024 and 2023, we earned the following revenue from our relationship with AstraZeneca (in thousands, except percentage amounts):

We didnot have any deferred revenue from our relationship with AstraZeneca at December 31, 2025 and 2024.

Biogen

In 2012, we entered into a collaboration agreement with Biogen to develop and commercialize SPINRAZA, our approved medicine to treat people with spinal muscular atrophy, or SMA. From inception through December 31, 2025, we received more than $2.5 billion in total payments under this collaboration, including more than $2.0 billion from SPINRAZA royalties and more than $425 million from R&D revenue. We are receiving tiered royalties ranging from 11 percent to 15 percent on net sales of SPINRAZA. We have exclusive in-licensed patents related to SPINRAZA from Cold Spring Harbor Laboratory and the University of Massachusetts. We pay Cold Spring Harbor Laboratory and the University of Massachusetts a low single digit royalty on net sales of SPINRAZA, which we record as SG&A expense in our consolidated statements of operations. Biogen is responsible for all global development, regulatory and commercialization activities and costs for SPINRAZA. We completed our performance obligations under this collaboration in 2016.

In 2023, we entered into a royalty purchase agreement with Royalty Pharma in which Royalty Pharma receives 25 percent of our SPINRAZA royalty payments from 2023 through 2027, increasing to 45 percent of royalty payments in 2028, on up to $1.5 billion in annual SPINRAZA sales. Royalty Pharma’s royalty interest in SPINRAZA will revert to us after total SPINRAZA royalty payments to Royalty Pharma reach either $475 million or $550 million, depending on the timing and occurrence of the U.S. Food and Drug Administration, or FDA, approval of pelacarsen, which Novartis is developing. Refer to Note 7, Long-Term Obligations and Commitments, for further discussion of this agreement.

QALSODY

In 2018, Biogen exercised its option to license QALSODY, our medicine that received accelerated approval from the FDA in April 2023 and marketing authorization under exceptional circumstances from the European Medicines Agency, or EMA, in May 2024 for the treatment of adult patients with superoxide dismutase 1 amyotrophic lateral sclerosis, or SOD1-ALS. As a result, Biogen is responsible for global development, regulatory and commercialization activities and costs for QALSODY. Biogen is also evaluating QALSODY as a potential treatment for presymptomatic SOD1-ALS patients in the ongoing ATLAS study. From inception through December 31, 2025, we received more than $115 million in total payments under this collaboration, including approximately $11 million from QALSODY royalties and $108 million from R&D revenue. We are receiving tiered royalties ranging from 11 percent to 15 percent on net sales of QALSODY. We completed our performance obligations under this collaboration in 2020.

New Antisense Medicines for the Treatment of SMA

In 2017, we entered into a collaboration agreement with Biogen toidentify new antisense medicines for the treatment of SMA. At the commencement of this collaboration, we received a$25 million upfront payment from Biogen. In 2021, Biogen exercised its option to license salanersen (formerly ION306), a drug we discovered under this collaboration, for which we earned a $60 million license fee payment. We recognized this payment as revenue in full because Biogen had full use of the license without any continuing involvement from us. Biogen is solely responsible for the costs and expenses related to the development, manufacturing and potential future commercialization of salanersen. We do not have any remaining performance obligations under this collaboration. We will receive development and regulatory milestone payments from Biogen if salanersen advances towards marketing approval.

Over the term of the collaboration, we are eligible to receive up to $555 million if Biogen advances salanersen, which is comprised of up to $45 million in development milestone payments, up to $110 million in regulatory milestone payments and up to $400 million in sales milestone payments. In addition, we are eligible to receive tiered royalties from the mid-teens tomid-20 percent range on net sales from any product that Biogen successfully commercializes under this collaboration. From inception through December 31, 2025, we received $85 million in payments under this collaboration. We will achieve the next payment of $45 millionif Biogen initiates a Phase 3 trial under this collaboration.

Neurology Collaborations

We have multiple collaborations with Biogen focused on using antisense technology to advance the treatment of neurological disorders, including our 2018 and 2012 neurology collaborations. Under these collaborations, Biogen gained exclusive rights to the use of our antisense technology to develop therapies for certain neurological diseases and the option to license certain medicines resulting from these collaborations. If Biogen exercises its option to license a medicine, it will assume global development, regulatory and commercialization responsibilities and costs for that medicine.

Under our 2018 neurology collaboration, we are currently advancing multiple programs. For each medicine under this collaboration, we are eligible to receiveup to $270 million, which is comprised of a $15 million license fee, up to $105 million in development milestone payments and up to $150 million in regulatory milestone payments. In addition, we are eligible to receive tiered royalties up to the 20 percent range on net sales from any product that Biogen successfully commercializes under this collaboration. From inception through December 31, 2025, we have received approximately $1.1 billion in payments under this collaboration, including payments to purchase our stock. We will achieve the next payment of up to $15 million if Biogen licenses a medicine under this collaboration.

At the commencement of our 2018 neurology collaboration, we determined our transaction price to be $552 million, comprised of $375 million from the upfront payment and $177 million for the premium paid by Biogen for its purchase of our common stock. We allocated the transaction price to our single performance obligation, which was to perform R&D services for Biogen. From inception through December 31, 2025, we have included $631 million in upfront and milestone payments in the transaction price for our R&D services performance obligation. We recognize revenue for our R&D services performance obligation as we perform services based on our effort to satisfy our performance obligation relative to our total effort expected to satisfy our performance obligation. We currently estimate we will satisfy our performance obligation at the end of the contractual term in June 2028.

Under our 2012 neurology collaboration, Biogen exercised its option to license IONIS-MAPTRx, an investigational RNA-targeted medicine for the potential treatment of Alzheimer’s disease, or AD, in 2019. As a result, Biogen is responsible for global development, regulatory and commercialization activities and costs for IONIS-MAPTRx. We are eligible to receive up to $185 million for the IONIS-MAPTRx program, which is comprised of a license fee of $45 million, up to $10 million in development milestone payments and up to $130 million in regulatory milestone payments, plus a mark-up on the cost estimate of the Phase 1 and 2 studies. In addition, we are eligible to receive tiered royalties up to the mid-teens on net sales of any medicines resulting from the IONIS-MAPTRx program. From inception through December 31, 2025, we have received more than $230 million in payments under this collaboration. We will achieve the next payment of $25 million if Biogen advances MAPTRx into Phase 3 development under this collaboration.

At the commencement of our 2012 neurology collaboration, we identifiedtwo separate performance obligations as our development work for IONIS-MAPTRx and obudanersen (formerly ION582). We completed our R&D services performance obligations for IONIS-MAPTRx and obudanersen in 2022 and 2024, respectively. From inception through the completion of our performance obligations, we have included $57 million in the transaction price for our IONIS-MAPTRx development performance obligation. From inception through the completion of our performance obligations, we have included $68 million in milestone payments in the transaction price for our obudanersen development performance obligation. We recognized revenue for our R&D services performance obligations as we performed services based on our effort to satisfy our performance obligations relative to our total effort expected to satisfy our performance obligations.

In 2024, Biogen’s option to license obudanersen, an investigational antisense medicine for the potential treatment of Angelman syndrome, or AS, expired unexercised. As a result, we recognized $30 million of R&D revenue from previously deferred milestone payments related to the obudanersen study because we did not have any remaining performance obligations.

During the years ended December 31, 2025, 2024 and 2023, we earned the following revenue from our relationship with Biogen (in thousands, except percentage amounts):

Ourconsolidated balance sheets at December 31, 2025 and 2024 included deferred revenue of $151.2 million and $211.0 million, respectively, from our relationship with Biogen.

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. Upon initiating the collaboration, we received an upfront payment of $35 million. Under our collaboration, GSK is developing bepirovirsen for the treatment of chronic hepatitis B virus infection, or HBV, infection. In 2019, following positive Phase 2 results, GSK licensed our HBV program. GSK is responsible for all global development, regulatory and commercialization activities and costs for the HBV program.

Over the term of the collaboration, we are eligible to receive nearly $260 million, which is comprised of a $25 million license fee, up to $42.5 million in development milestone payments, up to $120 million in regulatory milestone payments and up to $70 million in sales milestone payments if GSK successfully develops and commercializes bepirovirsen. In addition, we are eligible to receive tiered royalties ranging from 10 to 12 percent on net sales of bepirovirsen. From inception through December 31, 2025, we have received more than $105 million in an upfront payment and payments related to the HBV program.

We completed our R&D services performance obligations in 2015. Therefore, we do not have any remaining performance obligations under our collaboration with GSK. However, we can still earn additional payments and royalties as GSK advances the HBV program. In 2023, we earned a $15 million milestone payment when GSK initiated a Phase 3 program of bepirovirsen. We recognized this milestone payment as R&D revenue in full in 2023 because we did not have any remaining performance obligations related to the milestone payment. We will achieve the next payment of $15 million if a New Drug Application filing, or its foreign equivalent, for bepirovirsen is accepted for review in a major country.

During the years ended December 31, 2025, 2024 and 2023, we earned the following revenue from our relationship with GSK (in thousands, except percentage amounts):

We didnot have any deferred revenue from our relationship with GSK at December 31, 2025 and 2024.

Novartis

Pelacarsen Collaboration

In 2017, we initiated a collaboration with Novartis to develop and commercialize pelacarsen. Novartis is responsible for conducting and funding development and regulatory activities for pelacarsen, including a global Phase 3 cardiovascular outcomes study that Novartis initiated in 2019.

Over the term of the collaboration, we are eligible to receive up to $900 million, which is comprised of a $75 million upfront payment, a $150 million license fee, a $25 million development milestone payment, up to $290 million in regulatory milestone payments and up to $360 million in sales milestone payments. We are also eligible to receive tiered royalties in the mid-teens to low 20 percent range on net sales of pelacarsen. From inception through December 31, 2025, we have received more than $275 million in payments under this collaboration. We will achieve the next payment of $50 million if the FDA accepts an NDA filing for pelacarsen.

At the commencement of this collaboration, we determined our transaction price to be $108.4 million, comprised of the $75 million from the upfront payment, $28.4 million for the premium paid by Novartis for its purchase of our common stock and $5.0 million for the potential premium Novartis would have paid if they purchased our common stock in the future. Weidentified four separate performance obligations as the R&D services and API for pelacarsen and olezarsen. We recognized revenue for our R&D services performance obligations as we performed services based on our effort to satisfy our performance obligations relative to our total effort expected to satisfy our performance obligations. We completed our R&D services performance obligations for olezarsen and pelacarsen in 2019. As such, we recognized all revenue we allocated to the olezarsen and pelacarsen R&D services as of the end of 2019. From inception through the completion of our performance obligations, we have included $104 million in payments in the transaction price for our R&D services performance obligations under this collaboration.

As described in the Biogen SPINRAZA section above, in 2023, we entered into a royalty purchase agreement with Royalty Pharma. Under the agreement, in addition to a minority interest in SPINRAZA royalties, Royalty Pharma will receive 25 percent of any future royalty payments on pelacarsen. Refer to Note 7, Long-Term Obligations and Commitments, for further discussion of this agreement.

New Medicine for the Treatment of Lp(a)-Driven Cardiovascular Disease

In 2023, we entered into a collaboration and license agreement with Novartis for the discovery, development and commercialization of a novel medicine for patients with Lp(a)-driven cardiovascular disease, or lipoprotein(a)-driven CVD. In 2025, Novartis terminated this collaboration and license agreement. Prior to this, Novartis was solely responsible for the development, manufacturing and potential commercialization of the next generation Lp(a) therapy. From inception through December 31, 2025, we have received more than $65 million from payments under this collaboration, including a $60 million upfront payment that we received at the commencement of the collaboration.

At the commencement of this collaboration, we identifiedone performance obligation, which was to perform R&D services for Novartis. We recognized revenue for our R&D services performance obligation as we performed services based on our effort to satisfy this performance obligation relative to our total effort expected to satisfy our performance obligation. We completed our performance obligation in the third quarter of 2024. As we achieved milestone payments for our R&D services, we included these amounts in our transaction price for our R&D services performance obligation. From inception through the completion of our performance obligation, we have included $65 million in upfront and milestone payments in the transaction price for our R&D services performance obligation under this collaboration.

During the years ended December 31, 2025, 2024 and 2023, we earned the following revenue from our relationship with Novartis (in thousands, except percentage amounts):

Our consolidated balance sheets at December 31, 2025 and 2024 included deferred revenue of $0.6 million and $4.2 million, respectively, from our relationship with Novartis.

Ono

In March 2025, we entered into an agreement with Ono Pharmaceutical Co., Ltd., or Ono, to develop and commercialize sapablursen, an investigational RNA-targeted medicine for the potential treatment of polycythemia vera, or PV, a rare and potentially life-threatening hematologic disease. We are responsible for completing the Phase 2 IMPRSSION study of sapablursen, including the ongoing extension period. Ono is solely responsible for subsequent development, regulatory filings and commercialization of sapablursen.

Over the term of this collaboration, we are eligible to receive up to $940 million, which is comprised of a $280 million upfront payment, a $20 million development milestone payment, up to $20 million in regulatory milestone payments and up to $620 million in sales milestone payments. In addition, we are eligible to receive royalties in the mid-teen percentage range on net sales. From inception through December 31, 2025, we received more than $285 million from this collaboration, which includes the upfront payment and reimbursements for additional R&D services. We will achieve the next payment of $20 million if Ono initiates a pivotal clinical trial under this collaboration.

At inception, we identifiedtwo performance obligations under this agreement, comprised of our license of sapablursen to Ono and R&D services for sapablursen. We determined the transaction price to be the $280 million upfront payment we received when this transaction received clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, or HSR Act, in the second quarter of 2025. We allocated the transaction price based on the estimated stand-alone selling price of each performance obligation as follows:

● $278 million for the license of sapablursen; and

● $2 million for the R&D services for sapablursen.

We recognized $278 million of R&D revenue for the license of sapablursen in the second quarter of 2025 because we completed the performance obligation when we delivered the license to Ono. Additionally, in the second quarter of 2025, we completed our R&D services performance obligation and recognized $2 million of R&D revenue.

During the year ended December 31, 2025, we earned the following revenue from our relationship with Ono (in thousands, except percentage amounts):

Our consolidated balance sheets at December 31, 2025 included deferred revenue of $2.9 million from our relationship with Ono. We didnot have any deferred revenue from our relationship with Ono at December 31, 2024.

Roche

Sefaxersen (IONIS-FB-LRx) for Complement-Mediated Diseases

In 2018, we entered into a collaboration agreement with Hoffmann-La Roche Inc and F. Hoffmann-La Roche Ltd, collectively Roche to develop sefaxersen (IONIS-FB-LRx) for the treatment of complement-mediated diseases, including immunoglobulin A nephropathy, or IgAN, and geographic atrophy, or GA.

After positive data from a Phase 2 clinical study in patients with IgAN, Roche licensed sefaxersen in 2022 for $35 million. As a result, Roche is responsible for global development, regulatory and commercialization activities, and costs for sefaxersen. In 2022, we amended our sefaxersen collaboration agreement with Roche. The amendment changed future potential milestone payments we could receive under the collaboration. We determined there were no changes that would require adjustments to revenue we previously recognized.

In 2023, Roche initiated a Phase 3 study of sefaxersen in patients with IgAN.

In 2024, Roche discontinued development of sefaxersen for the treatment of GA, following the completion of the Phase 2 study, which showed a favorable safety profile and target engagement, but insufficient efficacy to advance into Phase 3 development.

Over the term of the sefaxersen collaboration for the treatment of IgAN, we are eligible to receive up to $430 million, which is comprised of a $35 million license fee, up to $25 million in development milestone payments, up to $90 million in regulatory milestone payments and up to $280 million in sales milestone payments. In addition, we are also eligible to receive tiered royalties from the high teens to 20 percent on net sales. From inception through December 31, 2025, we have received approximately $140 million in payments under this collaboration. We will achieve the next payment of $23.5 million if Roche advances sefaxersen for the treatment of IgAN under this collaboration.

At the commencement of this collaboration in 2018, we identifiedone performance obligation, which was to perform R&D services for Roche. We recognized revenue for our R&D services performance obligation as we performed services based on our effort to satisfy this performance obligation relative to our total effort expected to satisfy our performance obligation. We completed our performance obligation in the fourth quarter of 2024. As we achieved milestone payments for our R&D services, we included these amounts in our transaction price for our R&D services performance obligation. From inception through the completion of our performance obligation, we have included $97 million in upfront and milestone payments in the transaction price for our R&D services performance obligation under this collaboration.

Huntington’s Disease

In 2013, we entered into an agreement with Roche to develop treatments for Huntington’s disease, or HD, based on our antisense technology. Under the agreement, we discovered and developed tominersen, an investigational medicine targeting HTT protein. We developed tominersen through completion of our Phase 1/2 clinical study in people with early-stage HD. In 2017, upon completion of the Phase 1/2 study, Roche exercised its option to license tominersen. As a result, Roche is responsible for all global development, regulatory and commercialization activities and costs for tominersen.

Over the term of the collaboration, we are eligible to receive up to $395 million, which is comprised of a $30 million upfront payment, a $45 million license fee, up to $70 million in development milestone payments, up to $170 million in regulatory milestone payments and up to $80 million in sales milestone payments as tominersen advances. In addition, we are eligible to receive up to $136.5 million in milestone payments for each additional medicine successfully developed. We are also eligible to receive tiered royalties up to the mid-teens on net sales of any product resulting from this collaboration. From inception through December 31, 2025, we have received more than $150 million in payments under this collaboration. We will achieve the next payment of up to $17.5 million if Roche advances a medicine under this collaboration.

At the commencement of this collaboration, we identifiedone performance obligation, which was to perform R&D services for Roche. We determined the transaction price to be the $30 million upfront payment we received and allocated it to our single performance obligation. As we achieved milestone payments for our R&D services, we included these amounts in our transaction price for our R&D services performance obligation. We recognized revenue for our R&D services performance obligation over our period of performance, which ended in 2017.

Under this collaboration, we have also generated additional payments that we concluded were not part of our R&D services performance obligation. We recognized each of these payments in full in the respective period in which we generated the payment because the payments were distinct and we did not have any performance obligations for the respective payment. In 2021, Roche decided to discontinue dosing in the Phase 3 GENERATION HD1 study of tominersen in patients with manifest HD based on the results of a pre-planned review of data from the Phase 3 study conducted by an unblinded independent data monitoring committee, or iDMC.

In 2023, Roche initiated the Phase 2, GENERATION HD2, study of tominersen in patients with prodromal or early manifest HD. Roche is focusing on early-stage and younger patients based on the post-hoc analyses from the GENERATION HD1 study that suggested tominersen may benefit these patient groups. We do not have any remaining performance obligations related to tominersen under this collaboration with Roche; however, we can still earn additional payments and royalties as Roche advances tominersen.

RNA-Targeting Medicines for Alzheimer's Disease and Huntington's Disease

In September 2023, we entered into an agreement with Roche to developtwo undisclosed early-stage programs for RNA-targeting investigational medicines for the treatment of AD and HD. Under the agreement, we are responsible for advancing thetwo programs through preclinical studies and Roche is responsible for clinical development, manufacturing and commercialization of the medicines if they receive regulatory approval.

Over the term of the collaboration, we are eligible to receive up to $625 million, which is comprised of a $60 million upfront payment, up to $167 million in development milestone payments and up to $398 million in sales milestone payments. In addition, we are eligible to receive tiered royalties up to the mid-teens on net sales. From inception through December 31, 2025, we have received more than $65 million in payments under this collaboration.

We identifiedtwo performance obligations under this new agreement, comprised of R&D services for each of thetwo separate programs. We determined the transaction price to be the $60 million upfront payment we received in 2023. We allocated the transaction price based on the estimated stand-alone selling price of each performance obligation as follows:

● $45 million for the R&D services for the investigational medicine for AD; and

● $15 million for the R&D services for the investigational medicine for HD.

We are recognizing revenue for our R&D services performance obligations as we perform services based on our effort to satisfy our performance obligations relative to our total effort expected to satisfy our performance obligations. We completed our performance obligations for the investigational medicines for AD and HD in June 2024 and October 2025, respectively.

During the years ended December 31, 2025, 2024 and 2023, we earned the following revenue from our relationship with Roche (in thousands, except percentage amounts):

We didnot have any deferred revenue from our relationship with Roche at December 31, 2025. Ourconsolidated balance sheet at December 31, 2024 included deferred revenue of $7.7 million from our relationship with Roche.

In January 2026, we achieved a $50 million milestone payment when Roche initiated a Phase 1 trial for an investigational medicine for the treatment of AD. 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 this collaboration.

Commercialization Partnerships

Otsuka

In 2023, we entered into an agreement with Otsuka Pharmaceutical Co., Ltd., or Otsuka, to commercialize DAWNZERA in Europe and received a $65 million upfront payment. In 2024, we expanded the agreement to include commercialization rights for DAWNZERA in the Asia-Pacific region. As a result, we received a $20 million upfront payment from Otsuka. 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.

Over the term of this collaboration, we are eligible to receive up to $290 million, which is comprised of $85 million in upfront payments, up to $65 million in regulatory milestone payments and up to $140 million in sales milestone payments. In addition, we are eligible to receive tiered royalties up to 30 percent on net sales. In 2024, we earned a $15 million milestone payment from Otsuka when the EMA accepted our Marketing Authorization Application, or MAA, filing for DAWNZERA in the EU.

We identifiedtwo performance obligations under this agreement, comprised of our license of DAWNZERA to Otsuka and R&D services for DAWNZERA. We determined the transaction price to be $85 million, comprised of the following:

● $65 million from the upfront payment we received in 2023; and

● $20 million from the upfront payment we received in 2024.

We allocated the transaction price based on the estimated stand-alone selling price of each performance obligation as follows:

● $73.5 million for the license of DAWNZERA; and

● $11.5 million for the R&D services for DAWNZERA.

We are recognizing revenue for our R&D services performance obligation as we perform services based on our effort to satisfy our performance obligation relative to our total effort expected to satisfy our performance obligation. We currently estimate we will satisfy our performance obligations in December 2026.

In November 2024, we entered into an agreement with Otsuka to commercialize ulefnersen worldwide. We are responsible for the ongoing development of ulefnersen.

From inception through December 31, 2025, we have received more than $120 million in payments under these collaborations.

During the year ended December 31, 2025, we earned the following revenue from our relationship with Otsuka (in thousands, except percentage amount):

Ourconsolidated balance sheets at December 31, 2025 and 2024 included deferred revenue of $4.3 million and $6.7 million, respectively, from our relationship with Otsuka.

In January 2026, we achieved a $15 million milestone payment when the European Commission approved DAWNZERA in the EU. We will achieve the next payment of $20 million if Otsuka receives reimbursement approval forthree of thefive Major European countries, which include the UK, France, Germany, Italy and Spain.

PTC Therapeutics

In 2018, we entered into an exclusive license agreement with PTC Therapeutics to commercialize TEGSEDI and WAYLIVRA in Latin America and certain Caribbean countries. Under the license agreement, we are eligible to receive royalties from PTC in themid-20 percent range on net sales for each medicine. In 2021 and 2023, we started receiving royalties from PTC for TEGSEDI and WAYLIVRA sales, respectively.

In 2021, we began commercializing TEGSEDI and WAYLIVRA in Europe and TEGSEDI in North America through distribution agreements with Sobi. Under our distribution agreements, Sobi is responsible for commercializing TEGSEDI and WAYLIVRA in Europe and TEGSEDI in North America, respectively. We are responsible for supplying finished goods inventory to Sobi and Sobi is responsible for selling each medicine to the end customer. Under our agreements with Sobi, Sobi does not generally have a right of return. We recognize as revenue the price Sobi pays us for the inventory when we deliver the finished goods inventory to Sobi. In addition, we earn a distribution fee on net sales from Sobi for each medicine.

In 2023, our distribution agreement for TEGSEDI in North America was terminated and Sobi began transitioning responsibilities to us. Following the transition, we discontinued TEGSEDI in North America in 2024. During the years ended December 31, 2025, 2024 and 2023, we earned nominal revenue from our distribution agreement with Sobi for TEGSEDI in North America.

In 2025, we entered into an agreement with Sobi to commercialize TRYNGOLZA in countries outside of the U.S., Canada and China.

Technology Enhancement Collaborations

Bicycle Therapeutics

In 2020, we entered into a collaboration agreement with Bicycle Therapeutics andobtained an option to license its peptide technology that we expect can expand our LICA platform to target both skeletal and cardiac muscle, and potentially deliver medicines across the blood brain barrier. In 2021, we paid $42 million when we exercised our option to license Bicycle’s technology, which included an equity investment in Bicycle. In 2021, we recorded a $7.2 million equity investment for the shares we received in Bicycle. We recognized the remaining $34.8 million as R&D expense in 2021. We will pay Bicycle milestone payments and royalties that are contingent on the achievement of certain development, regulatory and sales events.

Metagenomi

In 2022, we entered into a collaboration and license agreement with Metagenomi to research, develop and commercialize investigational medicines for up tofour initial genetic targets, and, upon the achievement of certain development milestones, four additional genetic targets using gene editing technologies. As a result, we paid and expensed $80 million to license Metagenomi’s technologies and will pay Metagenomi certain fees for the selection of genetic targets. In addition, we will pay Metagenomi milestone payments and royalties that are contingent on the achievement of certain development, regulatory and sales events. We will also reimburse Metagenomi for certain of its costs in conducting its research and drug discovery activities under the collaboration.

Other Agreements

Alnylam Pharmaceuticals, Inc.

Under the terms of our agreement with Alnylam, each party licensed to the other party its early patent estate relating to oligonucleotide chemistry for specified uses (generally, single-stranded ASOs for us and siRNA for Alnylam). Additionally, in 2015, we and Alnylam entered into an alliance in which we exclusively cross-licensed rights tofour therapeutic programs. Alnylam granted us an exclusive, royalty-bearing license to its chemistry, RNA targeting mechanism and target-specific intellectual property for oligonucleotides against four targets, including FXI and Apo(a) andtwo other targets. In exchange, we granted Alnylam an exclusive, royalty-bearing license to our chemistry, RNA targeting mechanism and target-specific intellectual property for oligonucleotides against four other targets.

During the years ended December 31, 2025, 2024 and 2023, we earned the following revenue from our relationship with Alnylam (in thousands, except percentage amounts):

We didnot have any deferred revenue from our relationship with Alnylam at December 31, 2025 and 2024.

5. Investments

The following table summarizes the contract maturity of the available-for-sale securities we held as of December 31, 2025:

As illustrated above, at December 31, 2025,95 percent of our available-for-sale securities had a maturity of less thantwo years.

All of our available-for-sale 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 December 31, 2025, we had an ownership interest of less than 20 percentin five private companies andthree public companies with which we conduct business.

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

(1)

Includes investments classified as cash equivalents in our 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 year ended December 31, 2025, we recorded a $2.2 million netunrealized loss in our consolidated statement of operations related to changes in the fair value of our 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 year ended December 31, 2025, the amortized cost of our privately held equity securities increased $11.2 million. In the third quarter of 2025, we recorded a $29.4 million unrealized gain related to our investment in a privately held company due to an observable price change in an orderly transaction for a similar investment in the investee. This increase was partially offset by a loss of $18.2 million related to an impairment of our investment in another privately held company that we recorded in the second quarter of 2025.

The following is a summary of our investments we considered to be temporarily impaired at December 31, 2025 (in thousands, except for number of investments):

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.

6. Fair Value Measurements

The following tables present the major security types we held at December 31, 2025 and 2024 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 securities’ fair value (in thousands):

The following footnotes reference lines in our consolidated balance sheets:

(1)Included in cash and cash equivalents.

(2)$47.8 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.

Convertible Notes

Our 0% Notes due 2030,1.75% Notes due 2028 and 0% Notes due 2026 had a fair value of $830.3 million, $918.1 million and $594.6 million at December 31, 2025, respectively. Our 1.75% Notes due 2028 and 0% Notes due 2026 had a fair value of $569.3 million and $612.8 million at December 31, 2024, respectively. We determine the fair value of our notes based on quoted market prices for these notes, which are Level 2 measurements because the notes do not trade regularly.

7. Long-Term Obligations and Commitments

The carrying value of our long-term obligations was as follows (in thousands):

As of December 31, 2025, our 0% Notes due 2026 was classified as a current liability because they will mature in April 2026.

Convertible Debt and Call Spread

0 Percent Convertible Senior Notes due 2030

In November 2025, we completed a $770.0 million offering of our 0% Notes due 2030 and used $267.6 million of the net proceeds from the issuance of the 0% Notes due 2030 to repurchase $200.0 million in principal of our 0% Notes due 2026. We expect to use the remaining net proceeds to settle the 0% Notes due 2026 that remain outstanding and for general corporate and working capital purposes.

At December 31, 2025, we had the following 0% Notes due 2030 outstanding (in millions, except interest rate and price per share data):

1.75 Percent Convertible Senior Notes due 2028

In 2023, we completed a $575.0 million offering of our 0.125% Notes due 2024 and used $488.2 million of the net proceeds from the issuance of the 1.75% Notes due 2028 to repurchase $504.4 million in principal of our 0.125% Notes due 2024. In December 2024, we used $44.5 million of the net proceeds to settle the remaining principal balance of our 0.125% Notes due 2024 upon maturity.

At December 31, 2025, we had the following 1.75% Notes due 2028 outstanding (in millions, except interest rate and price per share data):

0 Percent Convertible Senior Notes due 2026 and Call Spread

In 2021, we completed a $632.5 million offering of our 0% Notes due 2026. We used $319.0 million of the net proceeds from the issuance of our 0% Notes due 2026 to pay the remaining $309.9 million principal balance of our 1% convertible senior notes, or 1% Notes due 2021, in 2021.

At December 31, 2025, we had the following 0% Notes due 2026 outstanding (in millions, except interest rate and price per share data):

As discussed above, in November 2025, weused $267.6 million of the net proceeds from the issuance of the 0% Notes due 2030 to repurchase $200.0 million in principal of our 0% Notes due 2026 at a premium. We accounted for the repurchase as an induced conversion. As a result of the repurchase, we recognized induced conversion expense of $16.3 million, which we recorded as other expense in our consolidated statement of operations for the year ended December 31, 2025. The induced conversion expense represents the amount we paid in excess of the if-converted value of the notes at the time that the debt repurchase terms were accepted by the noteholders. We recorded the remaining $51.3 million of the premium, which represents the difference between the if-converted value and carrying value of the repurchased notes, and $0.4 million unamortized debt issuance costs related to the repurchased notes as reductions to additional paid-in capital in our consolidated balance sheet. We accounted for the debt repurchase in accordance with the amended accounting guidance under ASU 2024-04. Refer to Note 1,Organization and Significant Accounting Policies, for further details on ASU 2024-04.

In conjunction with the 2021 offering, we entered into a call spread transaction, which was comprised of purchasing note hedges and selling warrants, to minimize the impact of potential economic dilution upon conversion of our 0% Notes due 2026 by increasing the effective conversion price on our 0% Notes due 2026. We increased our effective conversion price to $76.39 with the same number of underlying shares as our 0% Notes due 2026. The call spread cost us $46.9 million, of which $136.7 million was for the note hedge purchase, offset by $89.8 million we received for selling the warrants. Similar to our 0% Notes due 2026, our note hedges are subject to adjustment. Additionally, our note hedges are exercisable upon conversion of the 0% Notes due 2026. The note hedges will expire upon maturity of the 0% Notes due 2026, or April 2026. The warrants will expire in September 2026. The note hedges and warrants are separate transactions and are not part of the terms of our 0% Notes due 2026. The holders of the 0% Notes due 2026 do not have any rights with respect to the note hedges and warrants.

We recorded the amount we paid for the note hedges and the amount we received for the warrants in additional paid-in capital in our consolidated balance sheets. Refer to Note 1, Organization and Significant Accounting Policies, for our Call Spread accounting policy. We reassess our ability to continue to classify the note hedges and warrants in shareholders’ equity at each reporting period.

0.125 Percent Convertible Senior Notes due 2024 and Call Spread

In 2019, we entered into privately negotiated exchange and/or subscription agreements with certain new investors and certain holders of our 1% Notes due 2021 to exchange $375.6 million of our 1% Notes due 2021 for $439.3 million of our 0.125% Notes due 2024, and to issue $109.5 million of our 0.125% Notes due 2024.

As discussed above, in 2023, we repurchased $504.4 million of our 0.125% Notes due 2024. As a result of the repurchase, we recognized a $13.4 million gain on the early retirement of debt, which we recorded as other income in our consolidated statement of operations for the year ended December 31, 2023. The gain on the early retirement of our debt is the difference between the amounts paid to repurchase our 0.125% Notes due 2024 and the net carrying balance of the liability at the time that we completed the repurchases. We paid the remaining principal balance of our 0.125% Notes due 2024 with $44.5 million of cash at maturity in December 2024.

In conjunction with the issuance of our 0.125% Notes due 2024 in 2019, we entered into a call spread transaction, which was comprised of purchasing note hedges and selling warrants, to minimize the impact of potential economic dilution upon conversion of our 0.125% Notes due 2024 by increasing the effective conversion price on our 0.125% Notes due 2024. We increased our effective conversion price from $83.28 to $123.38 with the same number of underlying shares as our 0.125% Notes due 2024. The call spread cost us $52.6 million, of which $108.7 million was for the note hedge purchase, offset by $56.1 million we received for selling the warrants. Similar to our 0.125% Notes due 2024, our note hedges were subject to adjustment. Additionally, our note hedges were exercisable upon conversion of the 0.125% Notes due 2024. The note hedges expired upon maturity of the 0.125% Notes due 2024 in December 2024. The warrants expired in March 2025. The note hedges and warrants were separate transactions and were not part of the terms of our 0.125% Notes due 2024. The holders of the 0.125% Notes due 2024 did not have any rights with respect to the note hedges and warrants.

We recorded the amount we paid for the note hedges and the amount we received for the warrants in additional paid-in capital in our consolidated balance sheets. Refer to Note 1, Organization and Significant Accounting Policies, for our Call Spread accounting policy. We reassess our ability to continue to classify the note hedges and warrants in shareholders’ equity at each reporting period.

Other Terms of Convertible Senior Notes

The 0% Notes due 2030,1.75% Notes due 2028 and 0% Notes due 2026 are convertible under certain conditions, at the option of the note holders. We can settle conversions of the notes, at our election, in cash, shares of our common stock or a combination of both. We may not redeem the notes prior to maturity, and we do not have to provide a sinking fund for them. Holders of the notes may require us to purchase some or all of their notes upon the occurrence of certain fundamental changes, as set forth in the indentures governing the notes, at a purchase price equal to 100 percent of the principal amount of the notes to be purchased, plus any accrued and unpaid interest. The 0.125% Notes due 2024 were subject to similar terms.

We have elected to settle the 0% Notes due 2026 with cash for the principal amount and shares of our common stock for the conversion value.

Our total interest expense for our outstanding senior convertible notes for the years ended December 31, 2025, 2024 and 2023 included $6.3 million, $6.1 million and $5.9 million, respectively, of non-cash interest expense related to the amortization of debt issuance costs for our convertible notes.

Financing Arrangements

Operating Facilities

In 2017, we purchased the building that houses our primary R&D facility for $79.4 million and our manufacturing facility for $14.0 million. We financed the purchase of thesetwo facilities with mortgage debt of $60.4 million in total. Our primary R&D facility mortgage had an interest rate of 3.88 percent. Our manufacturing facility mortgage has an interest rate of 4.20 percent. During the first five years of both mortgages, we were only required to make interest payments. We began making principal payments in 2022. Our manufacturing facility mortgage matures in August 2027. We repaid our primary R&D facility mortgage in 2022 in conjunction with a sale and leaseback transaction.

In 2022, we concurrently entered intotwo purchase and sale agreements with a real estate investor. In the same period, we closed the first transaction in which we sold the facilities at our headquarters in Carlsbad, California, which includes our primary R&D facility, for a purchase price of $263.4 million. As a result, we de-recognized the related land and improvements, building and building improvements, which resulted in a net gain of $150.1 million that we reported in other income in our consolidated statements of operations. We used a portion of the sale proceeds to extinguish our outstanding mortgage debt on our primary R&D facility of $51.3 million. In connection with this transaction, we leased back our headquarters facilities for an initial lease term of 15 years with options to extend the lease fortwo additional terms offive years each.

In 2023, we closed the second transaction and transferred legal ownership oftwo lots of undeveloped land adjacent to our headquarters to the real estate investor for a purchase price of $33.0 million. In connection with this transaction, we entered into a build-to-suit lease agreement with the same real estate investor to lease a new R&D facility. The lessor developed and constructed a new building composed of R&D and office space. We are designing and constructing tenant improvements to customize the facility’s interior space. The lease commenced in September 2025 when the lessor completed constructing the structure of the new facility. The initial lease term for this facility is 15 years with options to extend the lease fortwo additional terms offive years each.

Since the building was under construction and unavailable to lease, we were unable to complete the sale-leaseback evaluation under ASC Topic 842,Leases, in 2023. As a result, the land remained in our consolidated balance sheets and we accounted for the proceeds as a financial liability. In September 2025, we reassessed the transaction under the sale-leaseback accounting guidance when the facility became available for lease commencement. We determined the transaction qualified as a sale-leaseback transaction upon lease commencement. As a result, we de-recognized the land and recorded a net gain of $4.2 million that we reported within operating loss in our consolidated statements of operations. In addition, we recorded a financial liability of $19.6 million, which reflects the difference in the fair value of the land as of the lease commencement date compared to the purchase price of the land in 2023. We reported the current portion of the financial liability in other current liabilities and the non-current portion of the financial liability in long-term obligations in our consolidated balance sheets. We recognize interest expense related to the financial liability based on our incremental borrowing rate at the commencement of the lease. We allocate payments to the lessor between the financial liability and lease expense.

Debt Maturity Schedules

Annual convertible and mortgage debt maturities, including fixed and determinable interest, at December 31, 2025 are as follows (in thousands):

Operating Leases

Carlsbad Leases

We lease a facility adjacent to our manufacturing facility that has laboratory and office space that we use to support our manufacturing facility. We lease this space under a non-cancelable operating lease. In 2020, we exercised our option to extend our lease, extending our lease term from June 2021 to August 2026. In 2025, we exercised our second option to extend our lease, extending our lease term from August 2026 to October 2031. We haveno remaining options to extend this lease.

We also lease an additional office space and warehouse space in Carlsbad. We lease these spaces under non-cancelable operating leases. In 2022, we exercised our option to extend the office space lease, extending our term from January 2023 to May 2027. We haveno remaining options to extend this lease. Our warehouse space lease in Carlsbad has an initial term ending in 2028 withno options to extend the lease.

As discussed above in the section titled, Financing Arrangements, we lease our headquarters, which includes our primary R&D facility, as part of a sale and leaseback transaction that closed in 2022. The initial lease term for our headquarters facilities is 15 years with options to extend the lease fortwo additional terms offive years each. We determined at lease inception that it was not reasonably certain that we would exercise any of the options to extend the lease. We estimated our lease payments over the initial term to total approximately $280 million.

In connection with the transfer of legal ownership of thetwo lots of undeveloped land to the real estate investor, we entered into a build-to-suit lease agreement with the same real estate investor to build a new R&D facility for us on those lots. The lease commenced in September 2025 when the lessor completed constructing the structure of the new facility. The initial lease term for this facility is 15 years with options to extend the lease fortwo additional terms offive years each. We determined at lease inception that it was not reasonably certain that we would exercise any of the options to extend the lease. We estimated our lease payments over the initial term to total approximately $230 million. In addition, we expect to receive reimbursements totaling $41.2 million from the lessor for tenant improvements that we own.

Boston Leases

We entered into an operating lease agreement for office space located in Boston, Massachusetts which commenced in August 2018. We are leasing this space under a non-cancelable operating lease with an initial term ending after 123 months and an option to extend the lease for an additional five-year term. Under the lease agreement, we received athree-month free rent period.

In 2022, we entered into a sublease agreement for our office space located in Boston, Massachusetts. The sublease commencement date was in January 2022 when the office space was ready for our tenant’s occupancy. We are subleasing this space under a non-cancelable operating sublease with a sublease term ending 83 months following the sublease commencement date withno option to extend the sublease. Under the sublease agreement we provided aseven-month free rent period, which commenced in January 2022. We will receive lease payments over the sublease term totaling $9.6 million.

We entered into an operating lease agreement for another office space located in Boston, Massachusetts which commenced in 2021. We are leasing this space under a non-cancelable operating lease with an initial term ending 91 months following the lease commencement date. Under the lease agreement, we received aseven-month free rent period, which commenced in November 2021. In 2025, we exercised our option to extend our lease, extending our lease term from May 2029 to February 2038. Under the lease extension agreement, we received anine-month free rent period, which will commence in June 2029.

When we determined our lease term for our operating lease right-of-use assets and lease liabilities for these leases, we did not include the extension options for these leases in the original lease term because it was not reasonably certain we would exercise those extension options.

Amounts related to our operating leases were as follows (dollar amounts in millions):

During the years ended December 31, 2025, 2024, and 2023 we paid $24.4 million, $20.5 million and $20.1 million of lease payments, which were included in operating activities in our consolidated statements of cash flows.

As of December 31, 2025, the future payments for our operating lease liabilities are as follows (in thousands):

Rent expense was $26.0 million, $23.2 million and $23.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Royalty Revenue Monetization

In January 2023, we entered into a royalty purchase agreement with Royalty Pharma Investments, or Royalty Pharma, to monetize a portion of our future SPINRAZA and pelacarsen royalties we are entitled to under our agreements with Biogen and Novartis, respectively. As a result, we received an upfront payment of $500 million and we are eligible to receive up to $625 million in additional regulatory and sales milestone payments. Under the terms of the agreement, Royalty Pharma will receive 25 percent of our SPINRAZA royalty payments from 2023 through 2027, increasing to 45 percent of royalty payments in 2028, on up to $1.5 billion in annual SPINRAZA sales. In addition, Royalty Pharma will receive 25 percent of any future royalty payments on pelacarsen. Royalty Pharma’s royalty interest in SPINRAZA will revert to us after total SPINRAZA royalty payments to Royalty Pharma reach either $475 million or $550 million, depending on the timing and occurrence of FDA approval of pelacarsen.

We recorded the upfront payment of $500 million as a liability related to the sale of future royalties, net of transaction costs of $10.4 million, which we are amortizing over the estimated life of the arrangement using the effective interest rate method. We recognize royalty revenue in the period in which the counterparty sells the related product and recognizes the related revenue. We record royalty payments made to Royalty Pharma as a reduction of the liability.

We determine the effective interest rate used to record interest expense under this agreement based on an estimate of future royalty payments to Royalty Pharma. As of December 31, 2025 and 2024, the estimated effective interest rate under the agreement was 12.4 percent and 13.5 percent, respectively.

The following is a summary of our liability related to sale of future royalties for the year ended December 31, 2025 (in thousands):

There are numerous factors, most of which are not within our control, that could materially impact the amount and timing of royalty payments from Biogen and Novartis, and result in changes to our estimate of future royalty payments to Royalty Pharma. Such factors include, but are not limited to, the commercial sales of SPINRAZA, the regulatory approval and commercial sales of pelacarsen, competing products or other significant events.

8. Stockholders’ Equity

Preferred Stock

We are authorized to issue up to 15 million shares of “blank check” Preferred Stock. As of December 31, 2025, there wereno shares of Preferred Stock outstanding. We have designated Series C Junior Participating Preferred Stock but haveno issued or outstanding shares as of December 31, 2025.

Common Stock

At December 31, 2025 and 2024, we had 300 million shares of common stock authorized, of which 163.3 million and 157.9 million were issued and outstanding, respectively. As of December 31, 2025, total common shares reserved for future issuance were 45.1 million.

During the years ended December 31, 2025, 2024 and 2023, we issued 5.4 million,2.1 million and 2.3 million shares of common stock, respectively, for stock option exercises, vesting of restricted stock units, and ESPP purchases. We received net proceeds from these transactions of $192.6 million, $33.6 million and $49.4 million in 2025, 2024 and 2023, respectively.

In September 2024, we completed the sale of 11.5 million shares of our common stock through a public offering at a price of $43.50 per share. We received net proceeds of $489.1 million from the sale of these shares net of underwriting discounts and commissions and other offering expenses of $11.2 million.

Stock Plans

2011 Equity Incentive Plan

In 2011, our Board of Directors adopted, and the stockholders subsequently approved, a stock option plan that provides for the issuance of stock options, stock appreciation rights, restricted stock awards, restricted stock unit awards, and performance cash awards to our employees, directors, and consultants. In June 2015, May 2017 and June 2019, after receiving approval from our stockholders, we amended our 2011 Equity Incentive Plan, or 2011 Plan, to increase the total number of shares reserved for issuance. We increased the shares available under our 2011 Equity Incentive Plan from 5.5 million to 11.0 million in June 2015, from 11.0 million to 16.0 million in May 2017 and from 16.0 million to 23.0 million in June 2019. In June 2021, after receiving approval from our stockholders, we amended our 2011 Plan. The amendment increased the total number of shares of common stock authorized for issuance under the 2011 Plan from 23.0 million to 29.7 million and added a fungible share counting ratio whereby the share reserve will be reduced by 1.7 shares for each share of common stock issued pursuant to a full value award (i.e., RSU or PRSU) and increased by 1.7 shares for each share of common stock returning from a full value award. In June 2023, after receiving approval from our stockholders, we amended our 2011 Plan to increase the total number of shares of common stock authorized for issuance under the 2011 Plan from 29.7 million to 35.2 million. In June 2024, after receiving approval from our stockholders, we amended our 2011 Plan to increase the total number of shares of common stock authorized for issuance under the 2011 Plan from 35.2 million to 38.5 million. In June 2025, after receiving approval from our stockholders, we amended our 2011 Plan to increase the total number of shares of common stock authorized for issuance under the 2011 Plan from 38.5 million to 42.5 million.

The plan expires in June 2031. The 2011 Plan does not allow us to reduce the exercise price of any outstanding stock options or stock appreciation rights or cancel any outstanding stock options or stock appreciation rights that have an exercise price or strike price greater than the current fair market value of the common stock in exchange for cash or other stock awards unless our stockholders approve such action. Currently we anticipate awarding only stock options, RSU and PRSU awards to our employees, directors and consultants. Options vest over afour-year period, with 25 percent exercisable at the end ofone year from the date of the grant and the balance vesting ratably, on a monthly basis, thereafter and have a term ofseven years. Options granted after December 31, 2021 have a term often years. We have granted restricted stock unit awards to our employees under the 2011 Plan which vest annually over afour-year period. At December 31, 2025, a total of 9.1 million options were outstanding, of which 5.7 million were exercisable,4.9 million restricted stock unit awards were outstanding, and 7.7 million shares were available for future grant under the 2011 Plan.

Under the 2011 Plan, we may issue a stock award with additional acceleration of vesting and exercisability upon or after a change in control. In the absence of such provisions, no such acceleration will occur. In addition, we implemented a change of control and severance benefit plan that provides for change of control and severance benefits to our executive officers, including our chief executive officer and chief financial officer, and vice presidents. Ifone of our executive officers or vice presidents is terminated or resigns for good reason during the period that begins three months before and ends twelve months following a change in control of the company, the impacted employee’s stock options and RSUs vesting will accelerate for options and RSUs outstanding as of the termination date.

2020 Equity Incentive Plan

In connection with the Akcea Merger in 2020, we assumed the unallocated portion of the available share reserve under the Akcea 2015 Equity Incentive Plan. In 2020, we amended and restated the Akcea 2015 Equity Incentive Plan, including renaming the plan as the Ionis Pharmaceuticals, Inc. 2020 Equity Incentive Plan, or 2020 Plan. The 2020 Plan provided for the issuance of up to 2.6 million shares of our Common Stock to our employees, directors and consultants who were employees of Akcea prior to the Akcea Merger. In the second quarter of 2021, our Compensation Committee approved an amendment to the 2020 Plan. The amendment decreased the total number of shares of common stock authorized for issuance under the 2020 Plan from approximately 2.6 million to 1.6 million. We assumed the 2020 Plan in connection with Ionis’ reacquisition of all of the outstanding shares of Akcea Therapeutics, Inc. as part of the Akcea Merger.

The plan expired in December 2025. The 2020 Plan does not allow us to reduce the exercise price of any outstanding stock options or stock appreciation rights or cancel any outstanding stock options or stock appreciation rights that have an exercise price or strike price greater than the current fair market value of the common stock in exchange for cash or other stock awards unless our stockholders approve such action. We awarded only stock options and RSU awards to our eligible employees, directors and consultants. Options vest over afour-year period, with 25 percent exercisable at the end ofone year from the date of the grant and the balance vesting ratably, on a monthly basis, thereafter and have a term ofseven years. Options granted after December 31, 2021 have a term often years. We have granted restricted stock unit awards to our employees under the 2020 Plan which vest annually over afour-year period. At December 31, 2025, a total of 0.4 million options were outstanding, of which 0.2 million were exercisable,0.3 million restricted stock unit awards were outstanding, andno shares were available for future grant under the 2020 Plan.

Under the 2020 Plan, we may issue a stock award with additional acceleration of vesting and exercisability upon or after a change in control. In the absence of such provisions, no such acceleration will occur.

Corporate Transactions and Change in Control under 2011 and 2020 Plans

In the event of certain significant corporate transactions, our Board of Directors has the discretion to take one or more of the following actions with respect to outstanding stock awards under the 2011 and 2020 Plans:

●

arrange for assumption, continuation, or substitution of a stock award by a surviving or acquiring entity (or its parent company);

●

arrange for the assignment of any reacquisition or repurchase rights applicable to any shares of our common stock issued pursuant to a stock award to the surviving or acquiring corporation (or its parent company);

●

accelerate the vesting and exercisability of a stock award followed by the termination of the stock award;

●

arrange for the lapse of any reacquisition or repurchase rights applicable to any shares of our common stock issued pursuant to a stock award;

●

cancel or arrange for the cancellation of a stock award, to the extent not vested or not exercised prior to the effective date of the corporate transaction, in exchange for cash consideration, if any, as the Board, in its sole discretion, may consider appropriate; and

●

arrange for the surrender of a stock award in exchange for a payment equal to the excess of (a) the value of the property the holder of the stock award would have received upon the exercise of the stock award, over (b) any exercise price payable by such holder in connection with such exercise.

2002 Non-Employee Directors’ Stock Option Plan

In 2001, our Board of Directors adopted, and the stockholders subsequently approved, an amendment and restatement of the 1992 Non-Employee Directors’ Stock Option Plan, which provides for the issuance of non-qualified stock options and restricted stock units to our non-employee directors. The name of the resulting plan is the 2002 Non-Employee Directors’ Stock Option Plan, or the 2002 Plan. In 2015, after receiving approval from our stockholders, we amended our 2002 Plan to increase the total number of shares reserved for issuance from 1.2 million to 2.0 million. In 2020, after receiving approval from our stockholders, we further amended our 2002 Plan. The amendments included:

●An increase to the total number of shares reserved for issuance under the plan from 2.0 million to 2.8 million shares;

●A reduction to the amount of the automatic awards under the plan;

●A revision to the vesting schedule of new awards granted; and

●An extension of the term of the plan.

Options under this plan expire 10 years from the date of grant. At December 31, 2025, a total of 0.8 million options were outstanding, of which 0.7 million were exercisable,0.1 million restricted stock unit awards were outstanding, and 0.4 million shares were available for future grant under the 2002 Plan.

Employee Stock Purchase Plan

In 2009, our Board of Directors adopted, and the stockholders subsequently approved, the amendment and restatement of the ESPP and we reserved an additional 150,000 shares of common stock for issuance thereunder. In each of the subsequent years until 2019, we reserved an additional 150,000 shares of common stock for the ESPP resulting in a total of 3.2 million shares authorized under the plan as of December 31, 2025. The ESPP permits full-time employees to purchase common stock through payroll deductions (which cannot exceed 10 percent of each employee’s compensation) at the lower of 85 percent of fair market value at the beginning of the purchase period or the end of each purchase period. Under the amended and restated ESPP, employees must hold the stock they purchase for a minimum ofsix months from the date of purchase. During 2025, employees purchased and we issued to employees 0.1 million shares under the ESPP at a weighted average price of $30.93 per share. At December 31, 2025, there were 0.1 million shares available for purchase under the ESPP.

Stock Option Activity

The following table summarizes the stock option activity under our stock plans for the year ended December 31, 2025 (in thousands, except per share and contractual life data):

The weighted-average estimated fair values of options granted were $18.07, $24.37 and $19.72 for the years ended December 31, 2025, 2024 and 2023, respectively. The total intrinsic value of options exercised during the years ended December 31, 2025, 2024 and 2023 were $68.4 million, $3.6 million and $6.0 million, respectively, which we determined as of the date of exercise. The amount of cash received from the exercise of stock options was $192.5 million, $15.8 million and $65.1 million for the years ended December 31, 2025, 2024 and 2023, respectively. For the years ended December 31, 2025, 2024 and 2023, the weighted-average fair value of options exercised was $66.84, $48.59 and $49.23. As of December 31, 2025, total unrecognized compensation cost related to non-vested stock options was $118.4 million. We expect to recognize this cost over a weighted average period of 1.1 years. We will adjust the total unrecognized compensation cost for future changes in estimated forfeitures.

Restricted Stock Unit Activity

The following table summarizes the RSU activity for the year ended December 31, 2025 (in thousands, except per share data):

For the years ended December 31, 2025, 2024 and 2023, the weighted-average grant date fair value of RSUs granted was $36.62, $50.92 and $40.51 per RSU, respectively. As of December 31, 2025, total unrecognized compensation cost related to RSUs was $108.4 million. We expect to recognize this cost over a weighted average period of 1.3 years. We will adjust the total unrecognized compensation cost for future changes in estimated forfeitures.

Performance Restricted Stock Unit Activity

The following table summarizes the PRSU activity for the year ended December 31, 2025 (in thousands, except per share data):

For the years ended December 31, 2025, 2024 and 2023, the weighted-average grant date fair value of PRSUs granted was $48.81, $78.41 and $57.43 per PRSU, respectively. As of December 31, 2025, total unrecognized compensation cost related to PRSUs was $10.0 million. We expect to recognize this cost over a weighted average period of 1.2 years. We will adjust the total unrecognized compensation cost for future changes in estimated forfeitures.

Stock-based Compensation Expense and Valuation Information

The following table summarizes stock-based compensation expense for the years ended December 31, 2025, 2024 and 2023 (in thousands):

Stock-based compensation expense was essentially flat in 2025 compared to 2024. Stock-based compensation expense increased in 2024 compared to 2023 due to increased headcount and a higher stock price on the grant date of annual equity awards in 2024 compared to 2023. Refer to Note 1, Organization and Significant Accounting Policies, for further details on how we determine the fair value of stock options granted, RSUs, PRSUs and stock purchase rights under the ESPP.

For the years ended December 31, 2025, 2024 and 2023, we used the following weighted-average assumptions in our Black-Scholes calculations:

Employee Stock Options:

Board of Director Stock Options:

ESPP:

Risk-Free Interest Rate. We base the risk-free interest rate assumption on observed interest rates appropriate for the term of our stock option plans or ESPP.

Dividend Yield. We base the dividend yield assumption on our history and expectation of dividend payouts. We have not paid dividends in the past and do not expect to in the future.

Volatility. We use an average of the historical stock price volatility of our stock for the Black-Scholes model. We computed the historical stock volatility based on the expected term of the awards.

Expected Life. The expected term of stock options we have granted represents the period of time that we expect them to be outstanding. Historically, we estimated the expected term of options we have granted based on actual and projected exercise patterns. In 2021, our Compensation Committee approved an amendment to the 2011 Equity Incentive Plan, or 2011 Plan, and the 2020 Equity Incentive Plan, or 2020 Plan, that increased the contractual term of stock options granted under these plans from seven toten years for stock options granted on January 1, 2022 and thereafter. We determined that we are unable to rely on our historical exercise data as a basis for estimating the expected life of stock options granted to employees following this change because the contractual term changed and we have no other means to reasonably estimate future exercise behavior. We therefore used the simplified method for determining the expected life of stock options granted to employees in the years ended December 31, 2025, 2024 and 2023. Under the simplified method, we calculate the expected term as the average of the 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 historical exercise patterns.

Forfeitures. We reduce stock-based compensation expense for estimated forfeitures. We estimate forfeitures at the time of grant and revise, if necessary, in subsequent periods if actual forfeitures differ from those estimates. We estimate forfeitures based on historical experience.

9. Income Taxes

We adopted ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures, on a prospective basis for the year ended December 31, 2025.

Loss before income taxes is comprised of (in thousands):

Our income tax expense (benefit) was as follows (in thousands):

Our expense (benefit) for income taxes differs from the amount computed by applying the U.S. federal statutory rate to loss before income taxes. The sources and tax effects of the differences, applying ASU 2023-09 prospectively, are as follows (in thousands):

(a)State taxes in California and New York made up the majority (greater than 50 percent) of the tax effect in this category.

Our expense (benefit) for income taxes differs from the amount computed by applying the U.S. federal statutory rate to loss before income taxes. The sources and tax effects of the differences, applying ASC 740 prior to the adoption of ASU 2023-09, are as follows (in thousands):

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Significant components of our deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows (in thousands):

As of December 31, 2025, we maintained a full valuation allowance on our net deferred tax assets. We determined the valuation allowance in accordance with the provisions of ASC 740,Accounting for Income Taxes, which requires an assessment of both positive and negative evidence when determining whether it is more likely than not that deferred tax assets are realizable. Our recent history of cumulative losses and expected near-term future losses require us to record a full valuation allowance against all net deferred tax assets. We will maintain a full valuation allowance on net deferred tax assets until sufficient positive evidence exists to support reversal of the valuation allowance.

Our valuation allowance increased by $107 million from December 31, 2024 to December 31, 2025. The increase in valuation allowance was primarily related to increases in our federal net operating loss from our current year loss and deduction for previously capitalized domestic research and development expenses permitted under H.R.1 - 119th Congress.

At December 31, 2025, we had federal and state, primarily California, tax net operating loss carryforwards of $1,206.5 million and $570.6 million, respectively. Our federal tax loss carryforwards are available indefinitely. Our California tax loss carryforwards will begin to expire in 2032. At December 31, 2025, we also had federal and California research and development tax credit carryforwards of $285.5 million and $151.7 million, respectively. Our federal research and development tax credit carryforwards will begin to expire in 2037. Our California research and development tax credit carryforwards are available indefinitely. Our 2023 current tax expense includes a benefit of approximately $3.2 million related to the utilization of state tax loss carryforwards, primarily California.

Utilization of the net operating loss and tax credit carryforwards may be subject to an annual limitation due to the ownership change limitations provided by the Internal Revenue Code of 1986, as amended, and similar state provisions. The annual limitation may result in the expiration of net operating losses and credits before utilization.

We analyze filing positions in all U.S. federal, state and foreign jurisdictions where we file income tax returns, and all open tax years in these jurisdictions to determine if we have any uncertain tax positions on any of our income tax returns. We recognize the impact of an uncertain tax position on an income tax return at the largest amount that the relevant taxing authority is more-likely-than-not to sustain upon audit. We do not recognize uncertain income tax positions if they have less than 50 percent likelihood of the applicable tax authority sustaining our position.

The following table summarizes our gross unrecognized tax benefits(in thousands):

Included in the balance of unrecognized tax benefits at December 31, 2025, 2024 and 2023 was $0.2 million, $0.3 million and $0.3 million respectively, that if we recognized, could impact our effective tax rate, subject to our remaining valuation allowance.

We recognize interest and/or penalties related to income tax matters in income tax expense. During the years ended December 31, 2025, 2024 and 2023, we recognized $0.1 million, $0.1 million and $0.1 million, respectively, of accrued interest and penalties related to gross unrecognized tax benefits.

We are subject to taxation in the U.S. and various state and foreign jurisdictions. We are currently under examination by the Internal Revenue Service for tax year 2023, and U.S. federal tax years 2022 and 2024 remain open to examination. In addition, tax years 2021 through 2024 remain open to examination by major state taxing jurisdictions, primarily California. Net operating loss and credit carryforwards generated prior to these periods may still be adjusted upon examination by the Internal Revenue Service or state tax authorities if they have been used in an open period or are used in a future period.

Accounting guidance for income taxes requires a deferred tax liability to be established for the tax impact of undistributed earnings of foreign subsidiaries unless it can be shown that these earnings will be permanently reinvested outside the U.S. If our foreign earnings were to be repatriated in the future, the estimated tax liability would be nominal.

Income taxes paid (net of refunds received), applying ASU 2023-09 prospectively during the tax year ended December 31, 2025, are as follows (in thousands):

10. Employment Benefits

We have employee 401(k) salary deferral plans covering all employees. Employees could make contributions by withholding a percentage of their salary up to the IRS annual limits of $23,500 and $31,000 in 2025 for employees under 50 years old and employees 50 years old or over, respectively. We made approximately $10.6 million, $8.6 million and $7.1 million in matching contributions for the years ended December 31, 2025, 2024 and 2023, respectively.

11. Legal Proceedings

From time to time, we are involved in legal proceedings arising in the ordinary course of our business. Periodically, we evaluate the status of each legal matter and assess our potential financial exposure. If we consider the potential loss from any legal proceeding to be probable and we can reasonably estimate the amount, we accrue a liability for the estimated loss. The outcome of any proceeding is not determinable in advance. Therefore, we are required to use significant judgment to determine the probability of a loss and whether the amount of the loss is reasonably estimable. Our assessment of a potential liability and the amount of accruals we recorded are based only on the information available to us at the time. As additional information becomes available, we reassess the potential liability related to the legal proceeding and may revise our estimates.

On September 10, 2025, Arrowhead Pharmaceuticals, Inc., or Arrowhead, filed a lawsuit in the District of Delaware, or the Delaware Lawsuit, seeking a declaratory judgment that our patent US9,593,333 is invalid or not infringed by use of Arrowhead's ApoCIII inhibitor plozasiran. On September 11, 2025, we filed a lawsuit in the Central District of California, or the California Lawsuit, asserting infringement of that same patent by Arrowhead's announced intention to commercialize plozasiran in November 2025. On December 23, 2025, the Delaware Lawsuit was dismissed in favor of the California Lawsuit. On January 12, 2026, Arrowhead filed its Answer to our Complaint and Counterclaims, which are similar to its previously filed claims in the Delaware Lawsuit. Accordingly, the consolidated dispute is proceeding in the Central District of California.

12. Segment Information

We operate as asingle operating segment, Ionis operations, focused on the research, development and commercialization of our RNA-targeted medicines to bring better futures to people with serious diseases. As the CODM, our Chief Executive Officer manages our company, reviews operating results, assesses performance and allocates resources on an aggregate basis using consolidated net income or loss as the key measure of segment profit or loss. As such, results of our operations are reported on a consolidated basis for purposes of management and segment reporting.

Ionis operations derives its revenues from commercial and R&D revenue sources. Refer to Note 3, Revenues, for further details on our sources of revenue.

The following table sets forth information on segment profit or loss, including significant segment expenses (in thousands):

(1)

Other segment items include stock-based compensation expense, investment income, interest expense, gain or loss on investments, gain or loss on early retirement of debt, other income or expense and income tax expense or benefit.

13. Fourth Quarter Financial Data (Unaudited)

The following financial information reflects all normal recurring adjustments, which are, in the opinion of management, necessary for a fair statement of the results of the interim periods. Summarized fourth quarter data for 2025 and 2024 are as follows (in thousands, except per share data).

(1)

Revenue was lower in the three months ended December 31, 2025 compared to the same period in 2024 primarily due to significant partner payments earned in the fourth quarter of 2024, including the $30 million milestone payment we earned from AstraZeneca when the MHRA approved WAINZUA for ATTRv-PN in the UK, $25 million payment we earned when AstraZeneca licensed a compound from us and $15 million milestone payment we earned from Otsuka when the EMA accepted our MAA filing for DAWNZERA in the EU. In addition, WAINUA joint development revenue decreased in the three months ended December 31, 2025 compared to the same period in 2024 as development activities relating to ATTRv-PN wound down with the launch of WAINUA. These activities were partially offset by TRYNGOLZA and DAWNZERA net product sales that we earned in the three months ended December 31, 2025.

(2)

Operating expenses increased in the three months ended December 31, 2025 compared to the same period in 2024 primarily due to the launches of TRYNGOLZA, DAWNZERA and WAINUA.

(3)

Wecompute net loss per share independently for each quarter duringthe year.

(4)

As discussed in Note 1, Organization and Significant Accounting Policies, we compute basic net loss per share by dividing the total net loss by our weighted-average number of common shares outstanding during the period.

(5)

We incurred a net loss for the fourth quarter of 2025 and 2024. As a result, 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.