IONIS PHARMACEUTICALS INC

Results of Operations

The following is a summary of our financial results (in millions):

Revenue

Total revenue for the three months ended March 31, 2026 was $246.1 million compared to $131.6 million for the same period in 2025 and was comprised of the following (in millions):

Commercial revenue for the three months ended March 31, 2026 increased 42% compared to the same period in 2025. This increase was primarily driven by TRYNGOLZA and DAWNZERA product sales.

The remainder of our revenue came from programs under our research and development, or R&D, collaborations, reflecting the value that our pipeline and technology continues to generate. Our R&D revenue during the three months ended March 31, 2026 included a $50 million milestone payment we earned when Roche initiated a Phase 1 trial for an investigational medicine for HD and $30 million in milestone payments we earned from GSK when regulatory filings for bepirovirsen were accepted for review in Japan and the European Union, or EU.

WAINUA (Eplontersen) Collaboration with AstraZeneca

Our financial results for the three months ended March 31, 2026 and 2025 reflected the cost-sharing provisions related to our collaboration with AstraZeneca to develop and commercialize WAINUA for the treatment of ATTR. From inception through December 31, 2025, AstraZeneca was responsible for 55 percent of the costs associated with the ongoing global Phase 3 development program. After December 31, 2025, AstraZeneca is responsible for 75 percent of costs for development activities intended solely to support U.S. regulatory approvals and 87.5 percent of costs for development activities intended to support global regulatory approvals. Because we are leading and conducting the Phase 3 development program, we are recognizing as R&D revenue the percentage of cost-share funding AstraZeneca is responsible for, 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 medical affairs and commercial costs in the U.S. and all costs associated with bringing WAINUA to market outside the U.S., we are recognizing cost-share funding we receive from AstraZeneca related to these activities as a reduction of our medical affairs and commercialization expenses, which we classify as R&D and selling, general and administrative, or SG&A expenses, respectively. We expect our medical affairs and commercialization expenses to increase as WAINUA advances toward the market for ATTR-CM under our collaboration with AstraZeneca.

The following table sets forth information on revenue and expenses under this collaboration (in millions):

Operating Expenses

The following table sets forth information on operating expenses (in millions):

Operating expenses, excluding non-cash compensation expense related to equity awards, for the three months ended March 31, 2026 increased compared to the same period in 2025. SG&A expenses increased as anticipated year over year primarily due to investments related to commercialization efforts for TRYNGOLZA and DAWNZERA as well as launch preparation activities for olezarsen in sHTG and zilganersen in AxD. We expect our operating expenses, excluding non-cash compensation expense related to equity awards, to continue to increase during the remainder of 2026 as we advance our commercialization activities.

Non-cash compensation expense related to equity awards for the three months ended March 31, 2026 increased compared to the same period in 2025 due to a higher stock price on the grant date of annual equity awards in 2026 compared to 2025 and increased headcount. We believe non-cash compensation expense related to equity awards is not indicative of our operating results or cash flows from our operations.

Cost of Sales

Our cost of sales is comprised of costs related to our commercial revenue, which consisted of manufacturing costs, transportation and freight, indirect overhead costs associated with the manufacturing and distribution of TRYNGOLZA, DAWNZERA, TEGSEDI and WAYLIVRA and associated period costs.

Cost of sales for newly launched products, such as TRYNGOLZA and 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.

The following table sets forth information on cost of sales (in millions):

Research, Development and Patent Expenses

Our research, development and patent expenses consist of expenses for drug discovery, drug development, medical affairs, manufacturing and development chemistry and R&D support expenses.

The following table sets forth information on research, development and patent expenses (in millions):

Drug Discovery

We use our proprietary technologies to generate information about the function of genes and to determine the value of genes as drug discovery targets. We use this information to direct our own drug discovery research, and that of our partners. Drug discovery is also the function that is responsible for advancing our core technology. This function is also responsible for making investments in complementary technologies to expand the reach of our technologies.

The following table sets forth information on drug discovery expenses (in millions):

Drug discovery expenses, excluding non-cash compensation expense related to equity awards, increased in the three months ended March 31, 2026 compared to the same period in 2025 as we continued to advance our technologies discussed above.

Drug Development

The following table sets forth drug development expenses, including expenses for our marketed medicines and those in Phase 3 development for which we have incurred significant costs (in millions):

Our development expenses, excluding non-cash compensation expense related to equity awards, decreased for the three months ended March 31, 2026 compared to the same period in 2025 as several late-stage studies ended. We expect our development expenses will continue to stabilize as several late-stage studies end and we reallocate resources toward earlier stage programs.

We may conduct multiple clinical trials on a drug candidate, including multiple clinical trials for the various indications we may be studying. Furthermore, as we obtain results from trials, we may elect to discontinue clinical trials for certain drug candidates in certain indications in order to focus our resources on more promising drug candidates or indications. Our Phase 1 and Phase 2 programs are clinical research programs that fuel our Phase 3 pipeline. When our medicines are in Phase 1 or Phase 2 clinical trials, they are in a dynamic state in which we may adjust the development strategy for each medicine. Although we may characterize a medicine as “in Phase 1” or “in Phase 2,” it does not mean that we are conducting a single, well-defined study with dedicated resources. Instead, we allocate our internal resources on a shared basis across numerous medicines based on each medicine’s particular needs at that time. This means we are constantly shifting resources among medicines. Therefore, what we spend on each medicine during a particular period is usually a function of what is required to keep the medicines progressing in clinical development, not what medicines we think are most important. For example, the number of people required to start a new study is large, the number of people required to keep a study going is modest and the number of people required to finish a study is large. However, such fluctuations are not indicative of a shift in our emphasis from one medicine to another and cannot be used to accurately predict future costs for each medicine. Because we always have numerous medicines in preclinical and varying stages of clinical research, the fluctuations in expenses from medicine to medicine, in large part, offset one another. If we partner a medicine, it may affect the size of a trial, its timing, its total cost and the timing of the related costs.

Medical Affairs

Our medical affairs function is responsible for funding and coordinating investigator-sponsored trials, communicating scientific and clinical information to healthcare providers, medical professionals and patients, and managing publications.

The following table sets forth information on medical affairs expenses (in millions):

Medical affairs expenses, excluding non-cash compensation expense related to equity awards, increased in the three months ended March 31, 2026 compared to the same period in 2025 as we continued advancing our late-stage pipeline.

Manufacturing and Development Chemistry

Expenditures in our manufacturing and development chemistry function consist primarily of personnel costs, specialized chemicals for oligonucleotide manufacturing, validation batches to support regulatory approvals, laboratory supplies and outside services. Our manufacturing and development chemistry function is responsible for providing drug supplies to drug development and our collaboration partners. Our manufacturing procedures include testing to satisfy good laboratory and good manufacturing practice requirements.

The following table sets forth information on manufacturing and development chemistry expenses (in millions):

Manufacturing and development chemistry expenses, excluding non-cash compensation expense related to equity awards, increased inthe three months ended March 31, 2026 compared to the same period in 2025 due to the timing of manufacturing performed by our contract manufacturing organizations for drug product and active pharmaceutical ingredients related to several late-stage programs.

R&D Support

In our research, development and patent expenses, we include support costs such as rent, repair and maintenance for buildings and equipment, utilities, depreciation of laboratory equipment and facilities, amortization of our intellectual property, information technology costs, procurement costs and waste disposal costs. We call these costs R&D support expenses.

The following table sets forth information on R&D support expenses (in millions):

R&D support expenses, excluding non-cash compensation expense related to equity awards, increased in the three months ended March 31, 2026 compared to the same period in 2025 primarily due to increased occupancy and personnel costs.

Selling, General and Administrative Expenses

SG&A expenses include personnel, information technology systems and outside costs associated with the commercialization and pre-commercialization activities for our medicines and costs to support our company, our employees and our stockholders including, legal, human resources, investor relations and finance. Additionally, we include in SG&A expenses such costs as rent, repair and maintenance of buildings and equipment, depreciation and utilities costs that we need to support the corporate functions listed above. We also include fees we owe under our in-licensing agreements related to SPINRAZA and QALSODY and cost sharing payments associated with co-commercialization activities under our WAINUA collaboration with AstraZeneca.

The following table sets forth information on SG&A expenses (in millions):

SG&A expenses, excluding non-cash compensation expense related to equity awards, increased in the three months ended March 31, 2026 compared to the same period in 2025 primarily due toinvestments related to commercialization efforts for TRYNGOLZA and DAWNZERA as well as launch preparation activities for olezarsen in sHTG and zilganersen in AxD. We expect SG&A expenses to increase as we continue to invest in our independent commercial launches.

Investment Income

The following table sets forth information on investment income (in millions):

Interest Expense

The following table sets forth information on interest expense (in millions):

Interest Expense Related to Sale of Future Royalties

We recorded $17.3 million of interest expense related to the sale of future royalties in the three months ended March 31, 2026 compared to $18.8 million in the same period in 2025. These amounts are related to the Royalty Pharma Investments, or Royalty Pharma, transaction, in which we sold a minority interest in our future SPINRAZA and pelacarsen royalties to Royalty Pharma for a $500 million upfront payment and $625 million of potential future payments. Refer to Part I, Item 1, Note 10, Liability Related to Sale of Future Royalties, in the Notes to Condensed Consolidated Financial Statements for further details.

Gain (Loss) on Investments

We recorded a net gain on investments of $22.6 million for the three months ended March 31, 2026 compared to a net loss on investments of $2.2 million for the same period in 2025 primarily due to changes in the fair value of investments in publicly traded biotechnology companies. Refer to Part I, Item 1, Note 7,Investments, in the Notes to Condensed Consolidated Financial Statements for further details.

Net Loss and Net Loss per Share

The following table sets forth information on net loss and net loss per share (in millions, except per share amounts):

The period-over-period fluctuations in our net loss were driven by factors discussed in the sections above.