Overview 27 Critical Accounting Estimates 30 Results of Operations 30 Liquidity and Capital Resources 36 ITEM 3: Quantitative and Qualitative Disclosures about Market Risk 38 ITEM 4: Controls and Procedures 38 PART II OTHER INFORMATION 39 ITEM 1: Legal Proceedings 39 ITEM 1A: Risk Factors 39 ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds 58 ITEM 3: Default upon Senior Securities 58 ITEM 4: Mine Safety Disclosures 58 ITEM 5: Other Information 58 ITEM 6: Exhibits 59 SIGNATURES 60 TRADEMARKS “Ionis,” the Ionis logo, and other trademarks or service marks of Ionis Pharmaceuticals, Inc. appearing in this report are the property of Ionis Pharmaceuticals, Inc. “Akcea,” the Akcea logo, and other trademarks or service marks of Akcea Therapeutics, Inc. appearing in this report are the property of Akcea Therapeutics, Inc., Ionis’ wholly owned subsidiary. This report contains additional trade names, trademarks and service marks of others, which are the property of their respective owners. Solely for convenience, trademarks and trade names referred to in this report may appear without the ® or TM symbols. 2 Table of Contents PART I — FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS IONIS PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share data) June 30, December 31, 2026 2025 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 350,065 $ 372,260 Short-term investments 1,704,520 2,305,176 Contracts receivable 58,845 66,059 Inventories 50,833 10,048 Other current assets 327,011 237,092 Total current assets 2,491,274 2,990,635 Property, plant and equipment, net 155,131 123,048 Right-of-use assets 231,560 238,549 Deposits and other assets 116,536 171,604 Total assets $ 2,994,501 $ 3,523,836 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 47,704 $ 28,082 Accrued compensation 50,293 116,236 Accrued liabilities 115,778 106,089 Income taxes payable 2,877 2,713 0 percent convertible senior notes due April 2026, net - 431,948 Current portion of deferred contract revenue 73,837 73,761 Other current liabilities 25,149 22,738 Total current liabilities 315,638 781,567 Long-term deferred contract revenue 63,030 92,001 0 percent convertible senior notes due 2030, net 753,356 751,495 1.75 percent convertible senior notes due 2028, net 569,255 567,830 Liability related to sale of future royalties, net 562,574 551,353 Long-term lease liabilities 262,476 262,383 Long-term obligations 28,435 28,118 Total liabilities 2,554,764 3,034,747 Stockholders’ equity: Common stock, $0.001 par value; 300,000,000 shares authorized, 165,636,792 and 163,304,875 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively 166 163 Additional paid-in capital 3,311,837 3,145,402 Accumulated other comprehensive loss (33,897 ) (25,281 ) Accumulated deficit (2,838,369 ) (2,631,195 ) Total stockholders' equity 439,737 489,089 Total liabilities and stockholders’ equity $ 2,994,501 $ 3,523,836 See accompanying notes. 3 Table of Contents IONIS PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenue: Commercial revenue: Product sales, net $ 31,139 $ 19,273 $ 74,094 $ 25,561 Royalty revenue 75,958 69,952 134,282 134,117 Other commercial revenue 11,526 13,531 18,058 19,246 Total commercial revenue 118,623 102,756 226,434 178,924 Research and development revenue: Collaborative agreement revenue 133,137 336,921 253,797 381,951 WAINUA joint development revenue 16,189 12,372 33,811 22,785 Total research and development revenue 149,326 349,293 287,608 404,736 Total revenue 267,949 452,049 514,042 583,660 Expenses: Cost of sales 2,739 4,151 5,721 5,614 Research, development and patent 217,107 217,460 427,280 418,219 Selling, general and administrative 150,396 90,622 300,755 166,872 Total operating expenses 370,242 312,233 733,756 590,705 Income (loss) from operations (102,293 ) 139,816 (219,714 ) (7,045 ) Other income (expense): Investment income 20,230 24,687 45,713 49,354 Interest expense (4,618 ) (4,114 ) (9,778 ) (8,223 ) Interest expense related to sale of future royalties (17,506 ) (18,648 ) (34,843 ) (37,470 ) Gain (loss) on investments, net (10,182 ) (18,312 ) 12,401 (20,476 ) Other income, net 987 102 529 569 Income (loss) before income tax benefit (expense) (113,382 ) 123,531 (205,692 ) (23,291 ) Income tax benefit (expense) (1,264 ) 20 (1,482 ) (96 ) Net income (loss) $ (114,646 ) $ 123,551 $ (207,174 ) $ (23,387 ) Basic net income (loss) per share $ (0.69 ) $ 0.78 $ (1.25 ) $ (0.15 ) Diluted net income (loss) per share $ (0.69 ) $ 0.70 $ (1.25 ) $ (0.15 ) Shares used in computing basic net income (loss) per share 165,419 159,137 165,148 158,937 Shares used in computing diluted net income (loss) per share 165,419 182,331 165,148 158,937 See accompanying notes. 4 Table of Contents IONIS PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) (Unaudited) Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Net income (loss) $ (114,646 ) $ 123,551 $ (207,174 ) $ (23,387 ) Unrealized gains (losses) on debt securities, net of tax (2,824 ) 367 (8,428 ) 1,997 Currency translation adjustment (50 ) 595 (188 ) 827 Comprehensive income (loss) $ (117,520 ) $ 124,513 $ (215,790 ) $ (20,563 ) See accompanying notes. 5 Table of Contents IONIS PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) (Unaudited) Common Stock Additional Accumulated Other Total Description Shares Amount Paid in Capital Comprehensive Loss Accumulated Deficit Stockholders' Equity Balance at March 31, 2025 159,041 $ 159 $ 2,901,262 $ (28,949 ) $ (2,396,746 ) $ 475,726 Net income - - - - 123,551 123,551 Change in unrealized gains, net of tax - - - 367 - 367 Foreign currency translation - - - 595 - 595 Issuance of common stock in connection with employee stock plans, net 156 - 1,286 - - 1,286 Stock-based compensation expense - - 30,199 - - 30,199 Balance at June 30, 2025 159,197 $ 159 $ 2,932,747 $ (27,987 ) $ (2,273,195 ) $ 631,724 Balance at March 31, 2026 165,902 $ 166 $ 3,245,994 $ (31,023 ) $ (2,723,723 ) $ 491,414 Net loss - - - - (114,646 ) (114,646 ) Change in unrealized losses, net of tax - - - (2,824 ) - (2,824 ) Foreign currency translation - - - (50 ) - (50 ) Issuance of common stock in connection with employee stock plans, net 568 - 20,258 - - 20,258 Stock-based compensation expense - - 45,595 - - 45,595 Shares issued to settle conversion obligation of 0 percent convertible senior notes due 2026, net 1,798 (2 ) (13 ) - - (15 ) Retirement of shares received from the exercise of bond hedges related to 0 percent convertible senior notes due 2026 (2,631 ) 2 3 - - 5 Balance at June 30, 2026 165,637 $ 166 $ 3,311,837 $ (33,897 ) $ (2,838,369 ) $ 439,737 See accompanying notes. 6 Table of Contents IONIS PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (in thousands) (Unaudited) Common Stock Additional Accumulated Other Total Description Shares Amount Paid in Capital Comprehensive Loss Accumulated Deficit Stockholders' Equity Balance at December 31, 2024 157,909 $ 158 $ 2,868,812 $ (30,811 ) $ (2,249,808 ) $ 588,351 Net loss - - - - (23,387 ) (23,387 ) Change in unrealized gains, net of tax - - - 1,997 - 1,997 Foreign currency translation - - - 827 - 827 Issuance of common stock in connection with employee stock plans, net 1,288 1 3,527 - - 3,528 Stock-based compensation expense - - 60,408 - - 60,408 Balance at June 30, 2025 159,197 $ 159 $ 2,932,747 $ (27,987 ) $ (2,273,195 ) $ 631,724 Balance at December 31, 2025 163,305 $ 163 $ 3,145,402 $ (25,281 ) $ (2,631,195 ) $ 489,089 Net loss - - - - (207,174 ) (207,174 ) Change in unrealized losses, net of tax - - - (8,428 ) - (8,428 ) Foreign currency translation - - - (188 ) - (188 ) Issuance of common stock in connection with employee stock plans, net 3,165 3 77,557 - - 77,560 Stock-based compensation expense - - 88,888 - - 88,888 Shares issued to settle conversion obligation of 0 percent convertible senior notes due 2026, net 1,798 (2 ) (13 ) - - (15 ) Retirement of shares received from the exercise of bond hedges related to 0 percent convertible senior notes due 2026 (2,631 ) 2 3 - - 5 Balance at June 30, 2026 165,637 $ 166 $ 3,311,837 $ (33,897 ) $ (2,838,369 ) $ 439,737 See accompanying notes. 7 Table of Contents IONIS PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Six Months Ended June 30, 2026 2025 Operating activities: Net loss $ (207,174 ) $ (23,387 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 6,734 4,494 Amortization of right-of-use operating lease assets 6,990 5,177 Amortization of other assets 1,361 1,180 Amortization of discount on investments, net (9,533 ) (12,978 ) Amortization of debt issuance costs 4,150 3,288 Non-cash royalty revenue related to sale of royalties (22,387 ) (24,894 ) Non-cash interest related to sale of future royalties 34,538 37,165 Stock-based compensation expense 88,870 59,408 Loss (gain) on investments, net (12,401 ) 20,471 Non-cash losses related to other assets 481 297 Changes in operating assets and liabilities: Contracts receivable 7,214 39,608 Inventories (24,626 ) (12,465 ) Other current and long-term assets (38,265 ) (22,536 ) Accounts payable 18,583 (20,309 ) Income taxes 164 47 Accrued compensation (65,943 ) (23,050 ) Accrued liabilities and other liabilities 12,851 3,535 Deferred contract revenue (28,895 ) (34,488 ) Net cash provided by (used in) operating activities (227,288 ) 563 Investing activities: Purchases of short-term investments (513,005 ) (802,657 ) Proceeds from sale of short-term investments 1,114,805 880,545 Purchases of property, plant and equipment (37,843 ) (24,882 ) Acquisition of licenses and other assets, net (3,640 ) (2,615 ) Net cash provided by investing activities 560,317 50,391 Financing activities: Proceeds from issuance of common stock through equity plans, net 77,560 3,528 Repayment of 0 percent convertible senior notes due 2026 (432,511 ) - Principal payments on mortgage debt (85 ) (82 ) Net cash provided by (used in) financing activities (355,036 ) 3,446 Effects of exchange rates on cash (188 ) 827 Net increase (decrease) in cash and cash equivalents (22,195 ) 55,227 Cash and cash equivalents at beginning of period 372,260 242,077 Cash and cash equivalents at end of period $ 350,065 $ 297,304 Supplemental disclosures of cash flow information: Interest paid $ 5,212 $ 5,214 Income taxes paid (refunds received), net $ 1,200 $ (383 ) Supplemental disclosures of non-cash investing and financing activities: Right-of-use assets obtained in exchange for lease obligations $ - $ 7,253 Amounts accrued for capital and patent expenditures $ 1,042 $ 145 See accompanying notes. 8 Table of Contents IONIS PHARMACEUTICALS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2026 (Unaudited) 1. Organization and Basis of Presentation Organization and Business Activity We incorporated in California on January 10, 1989. In conjunction with our initial public offering, we reorganized as a Delaware corporation in April 1991. We are a fully integrated commercial-stage biotechnology company and a leader in the discovery and development of RNA-targeted therapeutics. Basis of Presentation We prepared the unaudited interim condensed consolidated financial statements for the three and six months ended June 30, 2026 and 2025 on the same basis as the audited financial statements for the year ended December 31, 2025. We included all normal recurring adjustments in the financial statements, which we considered necessary for a fair presentation of our financial position at such dates and our operating results and cash flows for those periods. Our operating results for the interim periods may not be indicative of what our operating results will be for the entire year. For more complete financial information, these financial statements, and notes thereto, should be read in conjunction with the audited financial statements for the year ended December 31, 2025 included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC. In our condensed consolidated financial statements, we included the accounts of Ionis Pharmaceuticals, Inc. and the consolidated results of its wholly owned subsidiaries (“we”, “us” or “our”). We operate as a single segment, Ionis operations, because our chief operating decision maker, or CODM, reviews operating results on an aggregate basis and manages our operations as a single operating segment. Refer to Note 13, Segment Information, for further details on our segment information. Use of Estimates We prepare our condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States, or U.S., that require us to make estimates and assumptions that affect the amounts reported in our condensed consolidated financial statements and accompanying notes. Actual results could differ from our estimates. 2. Significant Accounting Policies Our significant accounting policies have not changed substantially from those included in our Annual Report on Form 10-K for the year ended December 31, 2025. Recent Accounting Standards In July 2025, the FASB issued ASU 2025-05, which amended the guidance in ASC 326 to simplify the estimation of credit losses on accounts receivable and contract assets from revenue transactions. The amended guidance allows companies to elect a practical expedient to assume that conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when estimating the expected credit losses of the asset. This update is effective for annual periods beginning after December 15, 2025 and interim periods within those annual periods. Companies that elect the practical expedient are required to apply the amendments prospectively. We adopted this update in the first quarter of 2026 on a prospective basis and elected the practical expedient. The updated guidance did not have a material impact on our condensed consolidated financial statements. 9 Table of Contents In September 2025, the FASB issued ASU 2025-06, which amended and simplified the existing guidance for software costs. The amended guidance removes references to software development stages and allows companies to begin capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed with the software performing the intended function. This update is effective for annual periods beginning after December 15, 2027 and interim periods within those annual periods. Early adoption of this guidance is permitted at the beginning of an annual reporting period. The guidance may be applied on a prospective or retrospective basis. We early adopted this update in the first quarter of 2026 on a prospective basis. The updated guidance did not have a material impact on our condensed consolidated financial statements. We do not expect any recently issued accounting standards other than the standards mentioned above and those included in our Annual Report on Form 10-K for the year ended December 31, 2025 to have a material impact to our financial results. 3. Supplemental Financial Data Inventories Our inventories consisted of the following (in thousands): June 30, 2026 December 31, 2025 Raw materials $ 789 $ 1,039 Work in process 49,465 24,051 Finished goods 579 1,096 Total $ 50,833 $ 26,186 Reported as: Inventories $ 50,833 $ 10,048 Deposits and other assets - 16,138 Total $ 50,833 $ 26,186 We classify inventories as non-current assets when we expect the inventories to remain on hand beyond one year. We include non-current inventories in deposits and other assets in our condensed consolidated balance sheets. As a result of the FDA approval of TRYNGOLZA for the treatment of severe hypertriglyceridemia, or sHTG, in June 2026, we expect to utilize inventories on hand as of June 30, 2026 within one year. The amounts reported as deposits and other assets as of December 31, 2025 consisted of work in process inventory. Accrued Liabilities Our accrued liabilities consisted of the following (in thousands): June 30, 2026 December 31, 2025 Clinical expenses $ 54,949 $ 53,659 In-licensing expenses 9,345 8,588 Commercial expenses, including gross-to-net product accruals 29,341 15,556 Other miscellaneous expenses 22,143 28,286 Total accrued liabilities $ 115,778 $ 106,089 10 Table of Contents 4. Revenues During the three and six months ended June 30, 2026 and 2025, our revenues consisted of the following (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenue: Commercial revenue: Product sales, net: TRYNGOLZA sales, net $ 4,574 $ 19,273 $ 31,674 $ 25,561 DAWNZERA sales, net 26,565 - 42,420 - Total product sales, net 31,139 19,273 74,094 25,561 Royalty revenue: SPINRAZA royalties 53,486 54,337 97,196 102,347 WAINUA royalties 16,436 10,415 27,145 19,787 Other royalties 6,036 5,200 9,941 11,983 Total royalty revenue 75,958 69,952 134,282 134,117 Other commercial revenue 11,526 13,531 18,058 19,246 Total commercial revenue 118,623 102,756 226,434 178,924 Research and development revenue: Collaborative agreement revenue 133,137 336,921 253,797 381,951 WAINUA joint development revenue 16,189 12,372 33,811 22,785 Total research and development revenue 149,326 349,293 287,608 404,736 Total revenue $ 267,949 $ 452,049 $ 514,042 $ 583,660 Revenue Sources The following are sources of revenue and when we typically recognize revenue. Commercial Revenue In June 2026, the U.S. Food and Drug Administration, or FDA, approved TRYNGOLZA for the treatment of sHTG. Following the approval, we launched TRYNGOLZA for the treatment of sHTG and began earning revenue from TRYNGOLZA sales for the sHTG indication. TRYNGOLZA is also approved in the U.S. for the treatment of familial chylomicronemia syndrome, or FCS. In April 2026, we lowered the Wholesale Acquisition Cost, or WAC, of TRYNGOLZA to address the sHTG population prior to receiving FDA approval. This allowed us to proactively align with annual payer contracting cycles for 2027 and accelerate access following the approval. In August 2025, the FDA approved DAWNZERA for prophylaxis to prevent attacks of hereditary angioedema, or HAE, in adult and pediatric patients 12 years of age and older. Following the approval, we launched DAWNZERA and began earning revenue from DAWNZERA sales. 11 Table of Contents We earn royalty payments primarily on net sales of SPINRAZA, WAINUA and QALSODY. We include QALSODY royalties within other royalties in the table above. We earn commercial revenue from TEGSEDI and WAYLIVRA sales under our distribution agreements with Swedish Orphan Biovitrum AB, or Sobi. In addition, we receive royalties from PTC Therapeutics International Limited, or PTC, for TEGSEDI and WAYLIVRA sales. Refer to Part IV, Item 15, Note 4, Collaborative Arrangements and Licensing Agreements, of our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for details on our commercialization partnerships with Sobi and PTC. Under our distribution agreements with Sobi, we concluded that our performance obligation is to provide services to Sobi over the term of the agreement, which includes supplying finished goods inventory to Sobi. We are also responsible for maintaining the marketing authorization for TEGSEDI and WAYLIVRA in major markets and for leading the global commercial strategy for each medicine. We view this performance obligation as a series of distinct activities that are substantially the same. We recognize as revenue the price Sobi pays us for the inventory when we deliver the finished goods inventory to Sobi. We also recognize distribution fee revenue based on Sobi’s net sales of TEGSEDI and WAYLIVRA. Under our agreements with Sobi, Sobi does not generally have a right of return. Research and development revenue under collaboration agreements We enter into collaboration agreements to license and sell our technology on an exclusive or non-exclusive basis. Our collaboration agreements typically contain multiple elements, or performance obligations, including technology licenses or options to obtain technology licenses, R&D services and manufacturing services. For R&D services that we recognize over time, we measure our progress using an input method. The input methods we use are based on the effort we expend or costs we incur toward the satisfaction of our performance obligation. We estimate the amount of effort we expend, including the time we estimate it will take us to complete the activities, or costs we incur in a given period, relative to the estimated total effort or costs to satisfy the performance obligation. This results in a percentage that we multiply by the transaction price to determine the amount of revenue we recognize each period. This approach requires us to make numerous estimates and use judgement. If our estimates or judgements change over the course of the collaboration, they may affect the timing and amount of revenue that we recognize in the current and future periods. Upfront payments: When we enter into a collaboration agreement and receive an upfront payment, we record the entire upfront payment as deferred revenue if our only performance obligation is for R&D services we will provide in the future. We amortize the upfront payment into revenue as we perform the R&D services. If part or all of the upfront payment is a license fee, we recognize as revenue the portion related to the license when we deliver the license to our partner because our partner has full use of the license and we do not have any additional performance obligations related to the license after delivery. Milestone payments: We include variable consideration in the transaction price when it is probable. We typically include milestone payments for R&D services in the transaction price when they are achieved. We include these milestone payments when they are achieved because there is considerable uncertainty in the research and development processes that trigger these payments. Similarly, we include regulatory milestone payments in the transaction price once the medicine is approved by the applicable regulatory agency. We will recognize sales-based milestone payments in the period in which we achieve the milestone under the sales-based royalty exception allowed under accounting rules. We recognize milestone payments that relate to an ongoing performance obligation over our period of performance. For example, when we achieve a milestone payment from a partner for advancing a clinical study under a collaboration agreement, we add the milestone payment to the transaction price if the milestone relates to an ongoing R&D services performance obligation and recognize revenue related to the milestone payment over our estimated period of performance. If we have partially completed our performance obligation, we record a cumulative-effect adjustment in the period we add the milestone payment to the transaction price. Conversely, we recognize in full those milestone payments that we earn based on our partners’ activities when our partner achieves the milestone event and we do not have a remaining performance obligation. License fees: We recognize as revenue the total amount we determine to be the relative stand-alone selling price of a license when we deliver the license to our partner because our partner has full use of the license and we do not have any additional performance obligations related to the license after delivery. 12 Table of Contents WAINUA (Eplontersen) Collaboration with AstraZeneca In 2021, we entered into a collaboration agreement with AstraZeneca to develop and commercialize WAINUA for the treatment of transthyretin amyloidosis, or ATTR, with the parties sharing responsibility for development, and AstraZeneca having responsibility for commercializing WAINUA. Under the terms of the agreement, we received a $200 million upfront payment in 2021. At inception of the agreement, we evaluated our WAINUA collaboration under ASC Topic 808, Collaborative Arrangements, or ASC 808, and identified four material components: (i) the license we granted to AstraZeneca in 2021, (ii) the shared development activities that we and AstraZeneca were to perform, (iii) the shared commercialization activities that we and AstraZeneca were to perform and (iv) the shared medical affairs activities that we and AstraZeneca were to perform. We determined that we had a vendor-customer relationship within the scope of ASC Topic 606, Revenue from Contracts with Customers, or ASC 606, for the license we granted to AstraZeneca and as a result we had one performance obligation. For our sole performance obligation, we determined the transaction price was the $200 million upfront payment we received. We recognized the upfront payment in full in 2021 because we did not have any remaining performance obligations after we delivered the license to AstraZeneca. We also concluded that the shared development, commercialization and 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. During the six months ended June 30, 2026, AstraZeneca was responsible for 75 percent of costs for development activities intended solely to support U.S. regulatory approvals and 87.5 percent of costs for development activities intended to support global regulatory approvals. Because we are leading the Phase 3 development program, we made an accounting policy election to recognize as non-customer revenue the cost-share funding from AstraZeneca, net of our share of AstraZeneca’s development expenses, in the same period we incur the related development expenses. As AstraZeneca is responsible for the majority of the commercial and medical affairs costs in the U.S. and all costs associated with bringing WAINUA to market outside the U.S., we made an accounting policy election to recognize cost-share funding we receive from AstraZeneca related to commercial and medical affairs activities as reductions of our selling, general and administrative, or SG&A, expense and R&D expense, respectively. 5. Collaborative Arrangements and Licensing Agreements Below, we have included our Biogen, GSK, Ono, Otsuka, Recordati and Roche collaborations, which were the only collaborations that had either substantive changes or were new from those included in Part IV, Item 15, Note 4, Collaborative Arrangements and Licensing Agreements, of our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. Biogen We have multiple collaborations with Biogen focused on using antisense technology to advance the treatment of neurological disorders, including our 2017 spinal muscular atrophy, or SMA, collaboration and 2018 neurology collaboration. In 2017, we entered into a collaboration agreement with Biogen to identify new antisense medicines for the treatment of SMA. In 2021, Biogen exercised its option to license salanersen, a drug we discovered under this collaboration. In the second quarter of 2026, we earned a $45 million milestone payment when Biogen initiated a Phase 3 trial of salanersen for SMA under this collaboration. We recognized this milestone payment as R&D revenue in full in the second quarter of 2026 because we did not have any remaining performance obligations related to the milestone payment. We will achieve the next payment of $55 million if Biogen achieves approval in a major market, which includes the U.S., Japan, the United Kingdom, Germany, France, Italy and Spain. From inception through June 30, 2026, we have received $130 million in payments under this collaboration. Under our 2018 neurology collaboration, 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 this collaboration. If Biogen exercises its option to license a medicine, it will assume global development, regulatory and commercialization responsibilities and costs for that medicine. 13 Table of Contents In the second quarter of 2026, we earned a $15 million license fee payment when Biogen exercised its option to license an investigational candidate for the treatment of amyotrophic lateral sclerosis, or ALS, under this collaboration. We recognized this license fee payment as R&D revenue in full in the second quarter of 2026 because we did not have any remaining performance obligations related to this payment after we delivered the license to Biogen. We will achieve the next payment of $7.5 million if Biogen advances a medicine under this collaboration. From inception through June 30, 2026, we have received approximately $1.1 billion in payments under this collaboration, including payments to purchase our stock. During the three and six months ended June 30, 2026 and 2025, we earned the following revenue from our relationship with Biogen (in thousands, except percentage amounts): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenue from our relationship with Biogen $ 133,866 $ 71,942 $ 195,552 $ 137,059 Percentage of total revenue 50 % 16 % 38 % 23 % Our condensed consolidated balance sheets at June 30, 2026 and December 31, 2025 included deferred revenue of $120.1 million and $151.2 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. Under our collaboration, GSK is developing bepirovirsen for the treatment of chronic hepatitis B, or CHB, infection. In 2019, following positive Phase 2 results, GSK licensed our CHB program. GSK is responsible for all global development, regulatory and commercialization activities and costs for the CHB program. In the second quarter of 2026, we amended our CHB collaboration agreement with GSK, resulting in increased milestone payments that we are eligible to receive under this collaboration and amended royalty terms that exclude net sales in China, Hong Kong and Macau. Under the amended agreement, we are eligible to receive more than $510 million, which is comprised of a $25 million license fee, up to $46.5 million in development milestone payments, up to $320 million in regulatory milestone payments and up to $120 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 worldwide, excluding China, Hong Kong and Macau. The amendments to the agreement did not change existing performance obligations or result in new performance obligations. Therefore, we did not record any adjustments to previously recognized revenue. In the first quarter of 2026, we earned a $15 million milestone payment when the Japanese Ministry of Health, Labour and Welfare, or MHLW, accepted for review a New Drug Application, or NDA, filing for bepirovirsen. In addition, we earned a $15 million milestone payment when the European Medicines Agency, or EMA, accepted for review a Marketing Authorization Application, or MAA, filing for bepirovirsen. We recognized these milestone payments as R&D revenue in full in the first quarter of 2026 because we did not have any remaining performance obligations related to the milestone payments. We will achieve the next payment of $35 million if bepirovirsen is approved in a major country other than China. From inception through June 30, 2026, we have received more than $135 million in an upfront payment and other payments related to the CHB program. During the three and six months ended June 30, 2026 and 2025, we earned the following revenue from our relationship with GSK (in thousands, except percentage amounts): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenue from our relationship with GSK $ - $ - $ 30,000 $ - Percentage of total revenue - % - % 6 % - % We did not have any deferred revenue from our relationship with GSK at June 30, 2026 and December 31, 2025. 14 Table of Contents 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. In the second quarter of 2026, we earned a $20 million milestone payment when Ono initiated a pivotal clinical trial for sapablursen under this collaboration. We recognized this milestone payment as R&D revenue in full in the second quarter of 2026 because we did not have any remaining performance obligations related to the milestone payment. We will achieve the next payment of $15 million if the FDA accepts a New Drug Application, or NDA, filing for sapablursen in the U.S. From inception through June 30, 2026, we have received more than $305 million in payments from Ono. During the three and six months ended June 30, 2026 and 2025, we earned the following revenue from our relationship with Ono (in thousands, except percentage amounts): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenue from our relationship with Ono $ 20,902 $ 280,000 $ 23,805 $ 280,000 Percentage of total revenue 8 % 62 % 5 % 48 % We did not have any deferred revenue from our relationship with Ono at June 30, 2026. Our consolidated balance sheet at December 31, 2025 included deferred revenue of $2.9 million from our relationship with Ono. Otsuka In 2023, we entered into an agreement with Otsuka Pharmaceutical Co., Ltd., or Otsuka, to commercialize DAWNZERA in Europe. In the second quarter of 2024, we expanded the agreement to include commercialization rights for DAWNZERA in the Asia-Pacific region. We are responsible for the ongoing development of DAWNZERA. We retained the rights to commercialize DAWNZERA in the U.S. and in the rest of the world, assuming regulatory approval. In November 2024, we entered into an agreement with Otsuka to commercialize ulefnersen, an investigational medicine for the treatment of ALS, caused by mutations in the FUS gene, worldwide. We are responsible for the ongoing development of ulefnersen. In the first quarter of 2026, we achieved a $15 million milestone payment when the European Commission approved DAWNZERA in the EU. We recognized this milestone payment as R&D revenue in full in the first quarter of 2026 because we did not have any remaining performance obligations related to the milestone payment. We will achieve the next payment of $20 million if Otsuka receives reimbursement approval in three of the five major European countries, which include the United Kingdom, France, Germany, Italy and Spain. From inception through June 30, 2026, we have received more than $125 million in payments from Otsuka. During the three and six months ended June 30, 2026 and 2025, we earned the following revenue from our relationship with Otsuka (in thousands, except percentage amounts): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenue from our relationship with Otsuka $ 9,387 $ 4,924 $ 29,318 $ 11,452 Percentage of total revenue 4 % 1 % 6 % 2 % Our condensed consolidated balance sheets at June 30, 2026 and December 31, 2025 included deferred revenue of $2.5 million and $4.3 million, respectively, from our relationship with Otsuka. 15 Table of Contents Recordati In June 2026, we entered into an agreement with Recordati AG., or Recordati, to commercialize zilganersen for the treatment of Alexander disease, or AxD, in countries outside of the U.S. We are responsible for the ongoing development of zilganersen globally. We retained the rights to commercialize zilganersen in the U.S., assuming regulatory approval. Recordati is responsible for regulatory filings and commercialization outside the U.S., including country-specific support for early access pathways based on local regulations and access dynamics. Over the term of this collaboration, we are eligible to receive up to $75 million, which is comprised of a $30 million upfront payment, up to $15 million in regulatory milestone payments and up to $30 million in sales milestone payments. In addition, we are eligible to receive tiered royalties of up to the mid-20 percent range on net sales. We are also eligible to receive reimbursements for clinical development costs that we incur outside the U.S. after March 2028. We received the $30 million upfront payment in July 2026. We will achieve the next payment of up to $10 million if zilganersen is approved in a country outside of the U.S. At inception, we identified two performance obligations under this agreement, comprised of our license of zilganersen to Recordati and R&D services for zilganersen. We determined the transaction price to be the $30 million upfront payment. We allocated the transaction price based on the estimated stand-alone selling price of each performance obligation as follows: ● $21.0 million for the license of zilganersen; and ● $9.0 million for the R&D services for zilganersen. We recognized $21.0 million of R&D revenue for the license of zilganersen in the second quarter of 2026 because we completed the performance obligation when we delivered the license to Recordati. We are recognizing revenue for our R&D services performance obligation relative to our total effort expected to satisfy our performance obligation. We currently estimate we will satisfy our performance obligation in the second quarter of 2031. In addition, we will recognize reimbursements for clinical development costs as R&D revenue in the period that we incur the costs. During the three and six months ended June 30, 2026 and 2025, we earned the following revenue from our relationship with Recordati (in thousands, except percentage amounts): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenue from our relationship with Recordati $ 21,080 $ - $ 21,080 $ - Percentage of total revenue 8 % - % 4 % - % Our condensed consolidated balance sheet at June 30, 2026 included deferred revenue of $8.9 million from our relationship with Recordati. Roche We have two collaborations with Hoffmann-La Roche Inc. and F. Hoffmann-La Roche Ltd, collectively Roche: one to develop sefaxersen for the treatment of immunoglobulin A, or IgA, nephropathy, or IgAN, and one to develop RNA-targeted programs for Alzheimer’s disease, or AD, and Huntington’s disease, or HD. In the first quarter of 2026, we earned a $50 million milestone payment when Roche initiated a Phase 1 trial for an investigational medicine for the treatment of AD. We recognized this milestone payment as R&D revenue in full in the first quarter of 2026 because we did not have any remaining performance obligations related to the milestone payment. We will achieve the next payment of $10 million if Roche initiates a Phase 2 trial for an investigational medicine for the treatment of AD under our collaboration for RNA-targeted programs for AD and HD. From inception through June 30, 2026, we have received more than $405 million in payments from our Roche collaborations. 16 Table of Contents During the three and six months ended June 30, 2026 and 2025, we earned the following revenue from our relationship with Roche (in thousands, except percentage amounts): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenue from our relationship with Roche $ - $ 2,403 $ 50,000 $ 4,368 Percentage of total revenue - % 1 % 10 % 1 % We did not have any deferred revenue from our relationship with Roche at June 30, 2026 and December 31, 2025. 6. Basic and Diluted Net Income (Loss) Per Share Basic net income (loss) per share We calculated our basic net income (loss) per share for the three and six months ended June 30, 2026 and 2025 by dividing our net income (loss) by our weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share For the three and six months ended June 30, 2026 and the six months ended June 30, 2025, we incurred a net loss; therefore, we did not include dilutive common equivalent shares in the computation of diluted net loss per share because the effect would have been anti-dilutive. Common stock from the following would have had an anti-dilutive effect on net loss per share: ● 1.75 percent convertible senior notes due 2028, or 1.75% Notes due 2028; ● 0 percent convertible senior notes due 2026, or 0% Notes due 2026; ● Note hedges related to the 0% Notes due 2026; ● Warrants related to the 0% Notes due 2026; ● Dilutive stock options; ● Unvested restricted stock units, or RSUs; ● Unvested performance restricted stock units, or PRSUs; and ● Employee Stock Purchase Plan, or ESPP. For the three and six months ended June 30, 2026, common stock underlying the 0 percent convertible senior notes due 2030, or 0% Notes due 2030, would also have had an anti-dilutive effect on net loss per share. For the three months ended June 30, 2025, we recorded net income. As a result, we computed diluted net income per share using the weighted-average number of common shares and dilutive common equivalent shares outstanding during the period. We calculated our diluted net income per share as follows (in thousands, except per share amounts): Income Shares Amount Three Months Ended June 30, 2025 (Numerator) (Denominator) Per Share Net income $ 123,551 159,137 $ 0.78 Effect of dilutive securities: Shares issuable upon exercise of stock options - 21 Shares issuable upon restricted stock award issuance - 1,449 Shares issuable related to our Employee Stock Purchase Plan - 86 Shares issuable related to 1.75 percent convertible senior notes due 2028 3,215 10,702 Shares issuable related to 0 percent convertible senior notes due 2026 792 10,936 Diluted net income $ 127,558 182,331 $ 0.70 17 Table of Contents 7. Investments The following table summarizes the contract maturity of the available-for-sale securities we held as of June 30, 2026: One year or less 66 % After one year but within two years 27 % After two years but within three and a half years 7 % Total 100 % As illustrated above, at June 30, 2026, 93 percent of our available-for-sale securities had a maturity of less than two years. All of our available-for-sale debt securities are available to us for use in our current operations. As a result, we categorize all of these securities as current assets even though the stated maturity of some individual securities may be one year or more beyond the balance sheet date. We invest in debt securities with strong credit ratings and an investment grade rating at or above A-1, P-1 or F-1 by Standard & Poor’s, Moody’s or Fitch, respectively. At June 30, 2026, we had an equity ownership interest of less than 20 percent in four private companies and four public companies with which we conduct business. The following is a summary of our investments (in thousands): Amortized Gross Unrealized Estimated June 30, 2026 Cost Gains Losses Fair Value Available-for-sale debt securities: Corporate debt securities (1) $ 638,688 $ 311 $ (474 ) $ 638,525 Debt securities issued by U.S. government agencies 26,439 26 (20 ) 26,445 Debt securities issued by the U.S. Treasury (1) 467,565 88 (604 ) 467,049 Debt securities issued by states of the U.S. and political subdivisions of the states 5,025 - (3 ) 5,022 Total debt securities with a maturity of one year or less 1,137,717 425 (1,101 ) 1,137,041 Corporate debt securities 349,545 87 (1,692 ) 347,940 Debt securities issued by U.S. government agencies 119,701 4 (878 ) 118,827 Debt securities issued by the U.S. Treasury 181,168 - (1,340 ) 179,828 Debt securities issued by states of the U.S. and political subdivisions of the states 731 - (1 ) 730 Total debt securities with a maturity of more than one year 651,145 91 (3,911 ) 647,325 Total available-for-sale debt securities $ 1,788,862 $ 516 $ (5,012 ) $ 1,784,366 Equity securities: Publicly traded equity securities included in other current assets (2) $ 11,897 $ 45,670 $ (9,799 ) $ 47,768 Privately held equity securities included in deposits and other assets (3) 10,000 9,816 - 19,816 Total equity securities 21,897 55,486 (9,799 ) 67,584 Total available-for-sale debt and equity securities $ 1,810,759 $ 56,002 $ (14,811 ) $ 1,851,950 18 Table of Contents Amortized Gross Unrealized Estimated December 31, 2025 Cost Gains Losses Fair Value Available-for-sale debt securities: Corporate debt securities (1) $ 746,814 $ 991 $ (27 ) $ 747,778 Debt securities issued by U.S. government agencies 55,768 92 (5 ) 55,855 Debt securities issued by the U.S. Treasury (1) 769,034 843 (13 ) 769,864 Debt securities issued by states of the U.S. and political subdivisions of the states 5,709 11 - 5,720 Total debt securities with a maturity of one year or less 1,577,325 1,937 (45 ) 1,579,217 Corporate debt securities 435,350 1,586 (106 ) 436,830 Debt securities issued by U.S. government agencies 92,770 100 (94 ) 92,776 Debt securities issued by the U.S. Treasury 242,288 595 (1 ) 242,882 Other municipal debt securities 1,219 4 - 1,223 Total debt securities with a maturity of more than one year 771,627 2,285 (201 ) 773,711 Total available-for-sale debt securities $ 2,348,952 $ 4,222 $ (246 ) $ 2,352,928 Equity securities: Publicly traded equity securities included in other current assets (2) $ 11,897 $ 35 $ (8,920 ) $ 3,012 Privately held equity securities included in deposits and other assets (3) (2) 4,905 54,395 (7,091 ) 52,209 Total equity securities 16,802 54,430 (16,011 ) 55,221 Total available-for-sale debt and equity securities $ 2,365,754 $ 58,652 $ (16,257 ) $ 2,408,149 (1) Includes investments classified as cash equivalents in our condensed consolidated balance sheets. (2) Our publicly traded equity securities are included in other current assets. We recognize publicly traded equity securities at fair value. In the first quarter of 2026, one of our privately held investees became a publicly traded entity after completing an initial public offering. As a result, we recorded a $23.4 million unrealized gain in our condensed consolidated statements of operations in the first quarter of 2026, which reflected the difference between the carrying value of this investment as of December 31, 2025 and its fair value of $55.8 million as of March 31, 2026. In the second quarter of 2026, we recorded an unrealized loss of $10.2 million, which reflected the difference between the carrying value of this investment as of March 31, 2026 and its fair value of $45.7 million as of June 30, 2026. This investment is subject to a 12-month contractual sale restriction that ends in January 2027. In the six months ended June 30, 2026, we recorded a $0.9 million net unrealized loss in our condensed consolidated statements of operations related to changes in the fair value of our other investments in publicly traded companies. (3) Our privately held equity securities are included in deposits and other assets. We recognize our privately held equity securities at cost minus impairments, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer, which are Level 3 inputs. In the six months ended June 30, 2026, there were no changes to the carrying value of our privately held equity securities. 19 Table of Contents The following is a summary of our investments we consider to be temporarily impaired at June 30, 2026 (in thousands, except for number of investments): Less than 12 Months of Temporary Impairment More than 12 Months of Temporary Impairment Total Temporary Impairment Number of Investments Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Estimated Fair Value Unrealized Losses Corporate debt securities 303 $ 659,038 $ (2,154 ) $ 3,984 $ (12 ) $ 663,022 $ (2,166 ) Debt securities issued by U.S. government agencies 62 125,253 (885 ) 2,866 (13 ) 128,119 (898 ) Debt securities issued by the U.S. Treasury 75 510,400 (1,944 ) - - 510,400 (1,944 ) Debt securities issued by states of the U.S. and political subdivisions of the states 8 5,002 (4 ) - - 5,002 (4 ) Total temporarily impaired debt securities 448 $ 1,299,693 $ (4,987 ) $ 6,850 $ (25 ) $ 1,306,543 $ (5,012 ) We believe that the decline in value of these securities is temporary and is primarily related to the change in market interest rates since purchase rather than underlying credit deterioration for any of the issuers. We believe it is more likely than not that we will be able to hold our debt securities with declines in value to maturity. Therefore, we intend to hold these securities to maturity and anticipate full recovery of our debt securities’ amortized cost basis at maturity. 8. Fair Value Measurements The following tables present the major security types we held at June 30, 2026 and December 31, 2025 that we regularly measure and carry at fair value. The following tables segregate each security type by the level within the fair value hierarchy of the valuation techniques we utilized to determine the respective security’s fair value (in thousands): At Quoted Prices in Active Markets Significant Other Observable Inputs June 30, 2026 (Level 1) (Level 2) Cash equivalents (1) $ 155,741 $ 155,741 $ - Corporate debt securities (2) 986,465 - 986,465 Debt securities issued by U.S. government agencies (3) 145,272 - 145,272 Debt securities issued by the U.S. Treasury (4) 646,877 646,877 - Debt securities issued by states of the U.S. and political subdivisions of the states (3) 5,752 - 5,752 Publicly traded equity securities included in other current assets (5) 47,768 47,768 - Total $ 1,987,875 $ 850,386 $ 1,137,489 20 Table of Contents At Quoted Prices in Active Markets Significant Other Observable Inputs December 31, 2025 (Level 1) (Level 2) Cash equivalents (1) $ 213,579 $ 213,579 $ - Corporate debt securities (6) 1,184,608 - 1,184,608 Debt securities issued by U.S. government agencies (3) 148,631 - 148,631 Debt securities issued by the U.S. Treasury (3) 1,012,746 1,012,746 - Debt securities issued by states of the U.S. and political subdivisions of the states (3) 6,943 - 6,943 Publicly traded equity securities included in other current assets (5) 3,012 3,012 - Total $ 2,569,519 $ 1,229,337 $ 1,340,182 The following footnotes reference lines in our condensed consolidated balance sheets: (1) Included in cash and cash equivalents. (2) $57.6 million was included in cash and cash equivalents, with the difference included in short-term investments. (3) Included in short-term investments. (4) $21.0 million was included in cash and cash equivalents, with the difference included in short-term investments. (5) Included in other current assets. (6) $47.8 million was included in cash and cash equivalents, with the difference included in short-term investments. Convertible Notes Our 0% Notes due 2030 and 1.75% Notes due 2028 had a fair value of $828.3 million and $893.1 million at June 30, 2026, respectively. 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. 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. 9. Stock-based Compensation Expense The following table summarizes stock-based compensation expense for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Cost of sales $ 176 $ 610 $ 323 $ 710 Research, development and patent expense 25,098 19,542 49,804 39,840 Selling, general and administrative expense 20,321 9,538 38,743 18,858 Stock-based compensation expense, net of amounts capitalized 45,595 29,690 88,870 59,408 Capitalized stock-based compensation expense - 509 18 1,000 Total stock-based compensation expense $ 45,595 $ 30,199 $ 88,888 $ 60,408 21 Table of Contents As of June 30, 2026, total unrecognized estimated stock-based compensation expense related to non-vested stock options, RSUs and PRSUs was $58.4 million, $166.6 million and $23.9 million, respectively. Our actual expenses will likely differ from these estimates because we will adjust our unrecognized stock-based compensation expense for future forfeitures, including any PRSUs that do not vest. We expect to recognize the cost of stock-based compensation expense related to our non-vested stock options, RSUs and PRSUs over a weighted average amortization period of 1.3 years, 1.6 years and 1.6 years, respectively. Stock Options: The weighted-average grant date fair value of stock options granted to employees for the six months ended June 30, 2026 and 2025 was $38.07 and $16.51 per share, respectively. In the second quarter of 2026, two new members were appointed to the Board of Directors following the retirement of two Board members. In June 2026, we issued stock options to the two new Board members. The weighted-average grant date fair value of stock options granted to non-employee members of the Board of Directors for the six months ended June 30, 2026 was $39.04 per share. There were no stock options granted to non-employee members of the Board of Directors for the six months ended June 30, 2025 because no new members were appointed during the period. RSUs: The weighted-average grant date fair value of RSUs granted to employees for the six months ended June 30, 2026 and 2025 was $77.19 and $32.97 per share, respectively. PRSUs: Under the terms of the PRSUs we granted in 2026 and 2025, the PRSUs may vest at the end of the three-year performance period based on our relative total shareholder return, or 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. The weighted-average grant date fair value of PRSUs we granted to our executive officers for the six months ended June 30, 2026 and 2025 was $115.05 and $48.81 per share, respectively. Black-Scholes Assumptions: For the six months ended June 30, 2026 and 2025, we used the following weighted-average assumptions in our Black-Scholes calculations: Employee Stock Options: Six Months Ended June 30, 2026 2025 Risk-free interest rate 3.9 % 4.5 % Dividend yield 0.0 % 0.0 % Volatility 43.1 % 42.0 % Expected life 6.3 years 6.3 years 22 Table of Contents Board of Directors Stock Options: Six Months Ended June 30, 2026 Risk-free interest rate 4.4 % Dividend yield 0.0 % Volatility 42.4 % Expected life 7.3 years ESPP: Six Months Ended June 30, 2026 2025 Risk-free interest rate 3.6 % 4.3 % Dividend yield 0.0 % 0.0 % Volatility 51.7 % 41.3 % Expected life 6 months 6 months 10. Liability Related to Sale of Future Royalties In 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. As a result, we received an upfront payment of $500 million and we are eligible to receive up to $625 million in additional 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 sales. In addition, Royalty Pharma will receive 25 percent of any future royalty payments on pelacarsen, our medicine in development to treat patients with elevated lipoprotein(a)-driven cardiovascular disease. 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 June 30, 2026 and 2025, the estimated effective interest rate under the agreement was 12.0 percent and 12.7 percent, respectively. The following table sets forth information on our liability related to sale of future royalties (in thousands): Liability related to sale of future royalties, net as of December 31, 2025 $ 563,042 Royalty payments to Royalty Pharma (22,387 ) Interest expense related to sale of future royalties 34,538 Amortization of issuance costs related to sale of future royalties 305 Liability related to sale of future royalties, net as of June 30, 2026 $ 575,498 Less: Current portion (1) (12,924 ) Liability related to sale of future royalties, net as of June 30, 2026 – Non-current $ 562,574 (1) Included in other current liabilities in our condensed consolidated balance sheet. 23 Table of Contents 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. 11. Convertible Debt 0 Percent Convertible Senior Notes due 2030 In November 2025, we completed a $770.0 million offering of our 0% Notes due 2030. At June 30, 2026, we had the following 0% Notes due 2030 outstanding (in millions except interest rate and price per share data): 0% Notes due 2030 Outstanding principal balance $ 770.0 Unamortized debt issuance costs $ 16.6 Maturity date December 2030 Interest rate 0 % Effective interest rate 0.5 % Conversion price per share $ 98.10 Total shares of common stock subject to conversion 7.8 1.75 Percent Convertible Senior Notes due 2028 In 2023, we completed a $575.0 million offering of our 1.75% Notes due 2028. At June 30, 2026, we had the following 1.75% Notes due 2028 outstanding (in millions except interest rate and price per share data): 1.75% Notes due 2028 Outstanding principal balance $ 575.0 Unamortized debt issuance costs $ 5.7 Maturity date June 2028 Interest rate 1.75 % Effective interest rate 2.3 % Conversion price per share $ 53.73 Total shares of common stock subject to conversion 10.7 0 Percent Convertible Senior Notes due 2026 and Call Spread In April 2026, we paid the remaining principal balance of our 0% Notes due 2026 with $432.5 million of cash at maturity. In addition, we settled the conversion obligation in excess of principal by issuing 1.8 million shares of common stock to the holders of the 0% Notes due 2026 who exercised their conversion option. 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 these notes. We increased our effective conversion price to $76.39 with the same number of underlying shares as our 0% Notes due 2026. Our note hedges were exercisable upon conversion of the 0% Notes due 2026. In April 2026, we exercised the note hedges upon maturity of these notes. As a result, we received 2.6 million shares of common stock, which we retired upon receipt. The warrants began to expire in July 2026 and will fully expire in September 2026. 24 Table of Contents Upon the execution of the call spread transaction in 2021, 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 condensed consolidated balance sheets. Refer to Part IV, Item 15, Note 1, Organization and Significant Accounting Policies, of our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for our Call Spread accounting policy. We reassess our ability to continue to classify the warrants in shareholders’ equity at each reporting period. Other Terms of Convertible Senior Notes The 0% Notes due 2030 and 1.75% Notes due 2028 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% Notes due 2026 were subject to similar terms. 12. 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 11, 2025, we sued Arrowhead Pharmaceuticals, Inc., in the Central District of California asserting that Arrowhead's announced intention to commercialize plozasiran in November 2025 would infringe our patent US9,593,333. Arrowhead is now commercializing plozasiran and the lawsuit is ongoing. Arrowhead has filed its Answer to our Complaint and Counterclaims asserting that our patent US9,593,333 is invalid or not infringed by use of plozasiran. On June 1, 2026, Biogen received notice that Somerset Therapeutics, LLC had filed an Abbreviated New Drug Application, or ANDA, seeking approval to commercialize a generic version of SPINRAZA intrathecal injection, 12 mg/5 ml. The ANDA alleged that certain patents that cover SPINRAZA and its use are invalid or would not be infringed by Somerset. On June 22, 2026, Biogen, Cold Springs Harbor Laboratory and Ionis filed a lawsuit together in the District Court of Delaware asserting patent infringement. This lawsuit is ongoing. 13. Segment Information We operate as a single 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. 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 4, Revenues, for further details on our sources of revenue. 25 Table of Contents The following table sets forth information on segment profit or loss, including significant segment expenses (in thousands): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenue $ 267,949 $ 452,049 $ 514,042 $ 583,660 Less: Cost of sales 2,563 3,541 5,398 4,904 Drug discovery 29,120 30,255 57,677 57,244 Drug development 103,958 117,689 208,140 230,635 Medical affairs 11,318 7,826 21,307 13,468 Manufacturing and development chemistry 20,639 21,545 40,947 35,826 R&D support 26,974 20,607 49,405 41,159 Selling, general and administrative 130,075 81,081 262,012 148,061 Other segment items (1) 57,948 45,954 76,330 75,750 Consolidated net income (loss) $ (114,646 ) $ 123,551 $ (207,174 ) $ (23,387 ) (1) Other segment items include stock-based compensation expense, investment income, interest expense, gain or loss on investments, other income or expense and income tax expense or benefit. 26 Table of Contents ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS In this Report on Form 10-Q, unless the context requires otherwise, “Ionis,” the “Company,” “we,” “our,” and “us,” means Ionis Pharmaceuticals, Inc. and its subsidiaries. Forward-Looking Statements In addition to historical information contained in this Report on Form 10-Q, the Report includes forward-looking statements regarding our business and the therapeutic and commercial potential of our commercial medicines, additional medicines in development, technologies and our expectations regarding development and regulatory milestones. Any statement describing our goals, expectations, financial or other projections, intentions or beliefs is a forward-looking statement and should be considered an at-risk statement. Such statements are subject to certain risks and uncertainties and particularly those inherent in the process of discovering, developing and commercializing medicines that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such medicines. Our forward-looking statements also involve assumptions that, if they never materialize or prove correct, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in this report and described in additional detail in our annual report on Form 10-K for the year ended December 31, 2025, which is on file with the U.S. Securities and Exchange Commission and is available from us, and those identified within Part II Item 1A, Risk Factors, of this Report. Although our forward-looking statements reflect the good faith judgment of our management, these statements are based only on facts and factors currently known by us. Except as required by law, we undertake no obligation to update any forward-looking statements for any reason. As a result, you are cautioned not to rely on these forward-looking statements. Overview For three decades, we have invented medicines that bring better futures to people with serious diseases. As a pioneer in RNA-targeted medicines with a deep understanding of disease biology and an industry-leading drug discovery technology, we are driven to deliver innovative, life-changing advances for patients. With multiple independent commercial launches now underway, we have transitioned into a fully integrated commercial-stage biotechnology company. We currently have seven marketed medicines to treat serious diseases: TRYNGOLZA (olezarsen), DAWNZERA (donidalorsen), WAINUA (eplontersen), SPINRAZA (nusinersen), QALSODY (tofersen), TEGSEDI (inotersen) and WAYLIVRA (volanesorsen). Following approval by the U.S. Food and Drug Administration, or FDA, in June 2026, we independently launched TRYNGOLZA for the treatment of severe hypertriglyceridemia, or sHTG. In addition, we are on track to independently launch zilganersen for Alexander disease, or AxD, in 2026, assuming regulatory approval. We also have a rich innovative pipeline across our focus areas of neurology, cardiometabolic diseases and select areas of high patient needs. We currently have two wholly owned medicines and eight partnered medicines in Phase 3 development, including obudanersen for Angelman syndrome, or AS, which has completed enrollment of the Phase 3 study. We also have additional medicines in early and mid-stage development. Our multiple sources of revenue and solid financial foundation enable our continued investments to support ongoing and planned launches and to advance our wholly owned medicines in development. Our key recent achievements, combined with our independent and partnered product launches anticipated by the end of 2027, position us well to help millions of patients with serious diseases and deliver increasing product and royalty revenue. Our Marketed Medicines TRYNGOLZA is a once monthly, self-administered LIgand-Conjugated Antisense, or LICA, medicine approved in the United States, or U.S., as an adjunct to diet to reduce triglycerides and the risk of acute pancreatitis in adults with sHTG and as an adjunct to diet to reduce triglycerides in adults with familial chylomicronemia syndrome, or FCS. TRYNGOLZA is also approved in the European Union, or EU, Canada and the United Kingdom, or UK, as an adjunct to diet in adult patients for the treatment of genetically confirmed FCS. TRYNGOLZA is the first and only treatment approved by the FDA that significantly and substantially reduces triglyceride levels in adults with sHTG and provides a clinically meaningful reduction in acute pancreatitis, or AP, events. TRYNGOLZA is the first medicine we are commercializing independently in the U.S. Sobi has exclusive rights to commercialize TRYNGOLZA in countries outside of the U.S., Canada and China. 27 Table of Contents DAWNZERA is an RNA-targeted medicine approved in the U.S. for prophylaxis to prevent attacks of hereditary angioedema, or HAE, in adult and pediatric patients 12 years of age and older. DAWNZERA is also approved in the EU and UK for the routine prevention of recurrent attacks of HAE in the same age group. DAWNZERA 80mg is self-administered via subcutaneous autoinjector once every four or eight weeks. DAWNZERA is the first and only FDA-approved RNA-targeted prophylactic therapy for HAE. DAWNZERA has the potential to offer durable efficacy, a favorable safety and tolerability profile, and the longest available dosing interval. DAWNZERA is the second medicine we are commercializing independently in the U.S. We licensed commercialization rights for DAWNZERA in Europe and the Asia-Pacific region to Otsuka Pharmaceutical Co., Ltd., or Otsuka. SPINRAZA is an antisense medicine for the treatment of patients with spinal muscular atrophy, or SMA, a progressive, debilitating and often fatal genetic disease. Higher dose SPINRAZA was approved and launched in the U.S. and EU for the treatment of SMA. Higher dose SPINRAZA is also approved in Japan. Our partner, Biogen, is responsible for commercializing SPINRAZA worldwide. WAINUA (WAINZUA in Europe) is a once monthly, self-administered subcutaneous LICA medicine that is approved in numerous countries, including the U.S., EU, UK, Canada and China, for the treatment of adults with polyneuropathy of hereditary transthyretin-mediated amyloidosis, or ATTRv-PN, a debilitating, progressive, and fatal disease. In January 2024, we and AstraZeneca launched WAINUA in the U.S. for the treatment of adults with ATTRv-PN. The launch of WAINUA is underway in numerous countries, including the countries in the EU, following the approval by the European Commission, or EC, in March 2025. AstraZeneca is our commercialization partner for WAINUA. QALSODY is an antisense medicine that received accelerated approval from the FDA in April 2023 and marketing authorization under exceptional circumstances from the European Medicines Agency, or EMA, in May 2024 for the treatment of adult patients with superoxide dismutase 1 amyotrophic lateral sclerosis, or SOD1-ALS, a rare, neurodegenerative disorder that causes progressive loss of motor neurons leading to death. QALSODY was the first treatment approved to target a genetic cause of ALS. Our partner, Biogen, is responsible for commercializing QALSODY worldwide. Biogen is also evaluating QALSODY as a potential treatment for presymptomatic SOD1-ALS patients in the ongoing ATLAS study. QALSODY was granted Orphan Drug designation by the FDA and EMA. TEGSEDI is a once weekly, self-administered subcutaneous medicine approved in Europe and Brazil for the treatment of patients with ATTRv-PN. We currently sell TEGSEDI in Europe through our distribution agreement with Swedish Orphan Biovitrum AB, or Sobi. In Latin America, PTC Therapeutics International Limited, or PTC, is commercializing TEGSEDI in Brazil and is pursuing access in additional Latin American countries through its exclusive license agreement with us. WAYLIVRA is a once weekly, self-administered, subcutaneous medicine approved in Europe and Brazil as an adjunct to diet in adult patients with genetically confirmed FCS and at high risk for pancreatitis. We sell WAYLIVRA in Europe through our distribution agreement with Sobi. In Latin America, PTC is commercializing WAYLIVRA in Brazil for two indications, FCS and familial partial lipodystrophy, or FPL, and is pursuing access in additional Latin American countries through its exclusive license agreement with us. Our Innovative Late-Stage Pipeline of Ionis-Owned Investigational Medicines Zilganersen is our investigational medicine for AxD. The FDA has granted Priority Review of zilganersen, with a Prescription Drug User Fee Act, or PDUFA, action date of September 22, 2026. The regulatory submission was based on the positive results from the Phase 3 portion of the pivotal study in children and adults with AxD. These results were presented at the Child Neurology Society Annual Meeting in October 2025 and the American Academy of Neurology Annual Meeting in April 2026. We established an expanded access program in the U.S. for eligible patients aged two and older living with AxD. Zilganersen has received Fast Track and Rare Pediatric Disease designations from the FDA and received Orphan Drug designation from both the FDA and the EMA. We licensed commercialization rights for zilganersen in countries outside of the U.S. to Recordati. 28 Table of Contents Obudanersen is our medicine in development for AS. In July 2026, we completed enrollment of the Phase 3 study, REVEAL, which we designed to evaluate the efficacy and safety of obudanersen. In addition, we are continuing to conduct the open label Phase 1/2 study, HALOS, of obudanersen in patients with AS designed to assess the safety, tolerability and activity of multiple ascending doses of obudanersen administered intrathecally. In 2025, we presented positive 12- and 18-month long-term extension data from the HALOS study which supports continued development. The FDA and EMA granted Orphan Drug designation to obudanersen. Additionally, the FDA granted Breakthrough Therapy, Fast Track and Rare Pediatric designations to obudanersen. Our Innovative Late-Stage Pipeline of Partnered Investigational Medicines Bepirovirsen is our medicine in development for chronic hepatitis B, or CHB. GSK is developing bepirovirsen. The FDA has granted Priority Review of bepirovirsen, with a PDUFA action date of October 26, 2026. In May 2026, GSK presented positive Phase 3 data for bepirovirsen at the 2026 European Association for the Study of the Liver, or EASL, Congress. Bepirovirsen is also under regulatory review in the EU, China and Japan, with additional submissions planned. The FDA, Center for Drug Evaluation, or CDE, of National Medical Products Administration, or NMPA, of China and Japanese Ministry of Health, Labour and Welfare, or MHLW, granted bepirovirsen Fast Track designation, Breakthrough Therapy designation and SENKU (formerly known as SAKIGAKE) designation, respectively, for the treatment of patients with CHB. Eplontersen is our medicine in development to treat patients with transthyretin amyloidosis cardiomyopathy, or ATTR-CM. In July 2026, we and AstraZeneca announced that the CARDIO-TTRansform trial for eplontersen in patients with ATTR-CM missed the primary efficacy endpoint of the composite outcome of cardiovascular, or CV, mortality and recurrent CV clinical events up to Week 140 compared with placebo. In this contemporary patient population treated with standard of care, including a majority on a stabilizer, adding eplontersen did not provide a statistically significant benefit. We and AstraZeneca are continuing to analyze the full data set, and results will be shared with the scientific community at the European Society of Cardiology, or ESC, Congress in August 2026. Pelacarsen is our medicine in development to treat patients with elevated lipoprotein(a)-driven cardiovascular disease, or Lp(a)-driven CVD. Novartis is developing pelacarsen, including conducting the ongoing Phase 3 Lp(a) HORIZON cardiovascular outcome study in patients with elevated Lp(a)-driven CVD, which achieved full enrollment in July 2022 with more than 8,000 patients. The study design and baseline characteristics of the Phase 3 Lp(a) HORIZON study were published in the American Heart Journal in April 2025. The FDA granted Fast Track designation and the Center for Drug Evaluation of China National Medical Products Administration granted Breakthrough Therapy designation to pelacarsen for the treatment of patients with elevated Lp(a) and established CVD. Salanersen is our medicine in development for SMA. In the second quarter of 2026, Biogen advanced salanersen into Phase 3 development in patients with SMA and the FDA granted Breakthrough Therapy designation to salanersen based on positive interim Phase 1 results. Salanersen has also received Orphan Drug designation for the treatment of SMA. Sapablursen is our medicine in development for polycythemia vera, or PV. In the second quarter of 2026, Ono advanced sapablursen into Phase 3 development in patients with PV. Sapablursen has received FDA Fast Track, Orphan Drug and Breakthrough Therapy designations for the treatment of PV. Sefaxersen is our medicine in development for immunoglobulin A, or IgA, nephropathy, or IgAN. In the second quarter of 2023, Roche advanced sefaxersen into Phase 3 development in patients with IgAN based on interim Phase 2 data. Tofersen is our medicine in development for presymptomatic SOD1-ALS. Biogen is evaluating tofersen for treatment of presymptomatic individuals who have a SOD1 genetic mutation. Ulefnersen is our medicine in development for amyotrophic lateral sclerosis, or ALS, with mutations in the fused in sarcoma gene, or FUS. We are currently conducting a Phase 3 FUSION study of ulefnersen in juvenile and adult patients with FUS-ALS. We licensed global commercialization rights for ulefnersen to Otsuka. The FDA and EMA granted Orphan Drug designation to ulefnersen. The FDA also granted Fast Track designation to ulefnersen. 29 Table of Contents Critical Accounting Estimates We prepare our condensed consolidated financial statements in conformity with accounting principles generally accepted in the U.S. As such, we make certain estimates, judgments and assumptions that we believe are reasonable, based upon the information available to us. These judgments involve making estimates about the effect of matters that are inherently uncertain and may significantly impact our quarterly or annual results of operations and financial condition. Each quarter, our senior management reviews the development, selection and disclosure of such estimates with the audit committee of our board of directors. The following are our significant accounting estimates, which we believe are the most critical to aid in fully understanding and evaluating our reported financial results: ● Assessing the propriety of revenue recognition and associated deferred revenue; ● Determining the appropriate cost estimates for unbilled preclinical studies and clinical development activities; and ● Assessing the appropriate estimate of anticipated future royalty payments under our royalty purchase agreement There have been no material changes to our critical accounting estimates from the information provided in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, included in our Annual Report on Form 10-K for the year ended December 31, 2025. Results of Operations The following is a summary of our financial results (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Total revenue $ 267.9 $ 452.0 $ 514.0 $ 583.7 Total operating expenses $ 370.2 $ 312.2 $ 733.8 $ 590.7 Income (loss) from operations $ (102.3 ) $ 139.8 $ (219.7 ) $ (7.0 ) Net income (loss) $ (114.6 ) $ 123.6 $ (207.2 ) $ (23.4 ) Revenue Total revenue for the three and six months ended June 30, 2026 was $267.9 million and $514.0 million, respectively, compared to $452.0 million and $583.7 million for the same periods in 2025, respectively, and was comprised of the following (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenue: Commercial revenue: Product sales, net: TRYNGOLZA sales, net $ 4.6 $ 19.3 $ 31.7 $ 25.6 DAWNZERA sales, net 26.5 - 42.4 - Total product sales, net 31.1 19.3 74.1 25.6 Royalty revenue: SPINRAZA royalties 53.5 54.3 97.2 102.3 WAINUA royalties 16.4 10.4 27.1 19.8 Other royalties 6.1 5.3 10.0 12.0 Total royalty revenue 76.0 70.0 134.3 134.1 Other commercial revenue 11.5 13.5 18.0 19.2 Total commercial revenue 118.6 102.8 226.4 178.9 Research and development revenue: Collaborative agreement revenue 133.1 336.8 253.8 382.0 WAINUA joint development revenue 16.2 12.4 33.8 22.8 Total research and development revenue 149.3 349.2 287.6 404.8 Total revenue $ 267.9 $ 452.0 $ 514.0 $ 583.7 30 Table of Contents Commercial revenue for the three months and six months ended June 30, 2026 increased 15% and 27%, respectively, compared to the same periods in 2025. This increase was primarily driven by DAWNZERA product sales. Research and development, or R&D, revenue for the three and six months ended June 30, 2026 decreased compared to the same periods in 2025 due to the $280 million upfront payment we earned for the global license of sapablursen to Ono Pharmaceutical Co., Ltd. in the second quarter of 2025, which was partially offset by partner payments we achieved in the first half of 2026. We recognized approximately $100 million and $180 million of R&D revenue in the three and six months ended June 30, 2026, respectively, from license fees and milestone payments from multiple partnerships. WAINUA (Eplontersen) Collaboration with AstraZeneca Our financial results for the three and six months ended June 30, 2026 and 2025 reflected the cost-sharing provisions related to our collaboration with AstraZeneca to develop and commercialize WAINUA for the treatment of ATTR. From inception through December 31, 2025, AstraZeneca was responsible for 55 percent of the costs associated with the ongoing global Phase 3 development program. During the six months ended June 30, 2026, AstraZeneca was responsible for 75 percent of costs for development activities intended solely to support U.S. regulatory approvals and 87.5 percent of costs for development activities intended to support global regulatory approvals. Because we 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 was responsible for the majority of the medical affairs and commercial costs in the U.S. and all costs associated with bringing WAINUA to market outside the U.S. during the three and six months ended June 30, 2026 and 2025, we recognized cost-share funding we received from AstraZeneca related to these activities as a reduction of our medical affairs and commercialization expenses, which we classify as R&D and selling, general and administrative, or SG&A expenses, respectively. The following table sets forth information on revenue and expenses under this collaboration (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 WAINUA joint development revenue $ 16.2 $ 12.4 $ 33.8 $ 22.8 Research and development expenses related to Phase 3 development of WAINUA 19.0 24.7 39.6 46.3 Medical affairs expenses for WAINUA 2.4 2.3 4.6 3.9 Commercialization expenses for WAINUA 8.4 6.8 16.3 14.5 Operating Expenses The following table sets forth information on operating expenses (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Operating expenses, excluding non-cash compensation expense related to equity awards $ 324.6 $ 282.5 $ 644.9 $ 531.3 Non-cash compensation expense related to equity awards 45.6 29.7 88.9 59.4 Total operating expenses $ 370.2 $ 312.2 $ 733.8 $ 590.7 Operating expenses, excluding non-cash compensation expense related to equity awards, for the three months and six months ended June 30, 2026 increased compared to the same periods in 2025. SG&A expenses increased as anticipated year over year primarily due to investments related to the commercialization efforts for TRYNGOLZA and DAWNZERA and launch preparations for 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 and six months ended June 30, 2026 increased compared to the same periods in 2025 due to a higher stock price on the grant date of annual equity awards in 2026 compared to 2025 and increased headcount. We employed 1,480 people as of June 30, 2026 compared to 1,166 people as of June 30, 2025. We believe non-cash compensation expense related to equity awards is not indicative of our operating results or cash flows from our operations. 31 Table of Contents 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): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Cost of sales, excluding non-cash compensation expense related to equity awards $ 2.5 $ 3.6 $ 5.4 $ 4.9 Non-cash compensation expense related to equity awards 0.2 0.6 0.3 0.7 Total cost of sales $ 2.7 $ 4.2 $ 5.7 $ 5.6 Research, Development and Patent Expenses Our research, development and patent expenses consist of expenses for drug discovery, drug development, medical affairs, manufacturing and development chemistry and R&D support expenses. The following table sets forth information on research, development and patent expenses (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Research, development and patent expenses, excluding non-cash compensation expense related to equity awards $ 192.0 $ 198.0 $ 377.5 $ 378.4 Non-cash compensation expense related to equity awards 25.1 19.5 49.8 39.8 Total research, development and patent expenses $ 217.1 $ 217.5 $ 427.3 $ 418.2 Drug Discovery We use our proprietary technologies to generate information about the function of genes and to determine the value of genes as drug discovery targets. We use this information to direct our own drug discovery research, and that of our partners. Drug discovery is also the function that is responsible for advancing our core technology. This function is also responsible for making investments in complementary technologies to expand the reach of our technologies. The following table sets forth information on drug discovery expenses (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Drug discovery expenses, excluding non-cash compensation expense related to equity awards $ 29.1 $ 30.3 $ 57.7 $ 57.3 Non-cash compensation expense related to equity awards 4.9 3.6 10.0 7.7 Total drug discovery expenses $ 34.0 $ 33.9 $ 67.7 $ 65.0 Drug discovery expenses, excluding non-cash compensation expense related to equity awards, were essentially flat in the three and six months ended June 30, 2026 compared to the same periods in 2025. 32 Table of Contents Drug Development The following table sets forth drug development expenses, including expenses for our marketed medicines and those in Phase 3 development for which we have incurred significant costs (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Eplontersen $ 14.6 $ 24.3 $ 33.9 $ 45.4 Donidalorsen 2.6 3.0 5.4 8.1 Olezarsen 14.6 18.2 27.1 43.1 Zilganersen 2.0 2.3 4.7 7.5 Obudanersen 11.1 11.7 19.5 17.5 Ulefnersen 2.8 2.2 5.5 5.2 Other development projects 21.3 19.3 44.0 35.7 Development overhead expenses 35.0 36.8 68.1 68.2 Total drug development expenses, excluding non-cash compensation expense related to equity awards 104.0 117.8 208.2 230.7 Non-cash compensation expense related to equity awards 12.0 8.7 23.4 16.9 Total drug development expenses $ 116.0 $ 126.5 $ 231.6 $ 247.6 Our development expenses, excluding non-cash compensation expense related to equity awards, decreased for the three and six months ended June 30, 2026 compared to the same periods 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): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Medical affairs expenses, excluding non-cash compensation expense related to equity awards $ 11.3 $ 7.8 $ 21.3 $ 13.4 Non-cash compensation expense related to equity awards 2.3 1.3 4.6 2.8 Total medical affairs expenses $ 13.6 $ 9.1 $ 25.9 $ 16.2 33 Table of Contents Medical affairs expenses, excluding non-cash compensation expense related to equity awards, increased in the three and six months ended June 30, 2026 compared to the same periods in 2025 as we continued advancing our late-stage pipeline. Manufacturing and Development Chemistry Expenditures in our manufacturing and development chemistry function consist primarily of personnel costs, specialized chemicals for oligonucleotide manufacturing, validation batches to support regulatory approvals, laboratory supplies and outside services. Our manufacturing and development chemistry function is responsible for providing drug supplies to drug development and our collaboration partners. Our manufacturing procedures include testing to satisfy good laboratory and good manufacturing practice requirements. The following table sets forth information on manufacturing and development chemistry expenses (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Manufacturing and development chemistry expenses, excluding non-cash compensation expense related to equity awards $ 20.6 $ 21.5 $ 40.9 $ 35.8 Non-cash compensation expense related to equity awards 2.9 1.6 6.0 3.7 Total manufacturing and development chemistry expenses $ 23.5 $ 23.1 $ 46.9 $ 39.5 The period over period fluctuations in manufacturing and development chemistry expenses, excluding non-cash compensation expense related to equity awards, were due to the timing of manufacturing performed by our contract manufacturing organizations for drug product and active pharmaceutical ingredients related to several late-stage programs. R&D Support In our research, development and patent expenses, we include support costs such as rent, repair and maintenance for buildings and equipment, utilities, depreciation of laboratory equipment and facilities, amortization of our intellectual property, information technology costs, procurement costs and waste disposal costs. We call these costs R&D support expenses. The following table sets forth information on R&D support expenses (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Occupancy $ 10.2 $ 6.5 $ 19.8 $ 13.8 Personnel costs 8.0 7.4 16.4 14.2 Patent expenses 2.2 0.9 3.1 1.5 Computer software and licenses 0.4 3.2 0.9 6.4 Insurance 0.6 0.7 0.7 1.7 Taxes 0.9 1.1 2.5 2.5 Other 4.7 0.8 6.0 1.1 Total R&D support expenses, excluding non-cash compensation expense related to equity awards 27.0 20.6 49.4 41.2 Non-cash compensation expense related to equity awards 3.0 4.3 5.8 8.7 Total R&D support expenses $ 30.0 $ 24.9 $ 55.2 $ 49.9 R&D support expenses, excluding non-cash compensation expense related to equity awards, increased in the three and six months ended June 30, 2026 compared to the same periods in 2025 primarily due to increased occupancy and personnel costs. 34 Table of Contents 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): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Selling, general and administrative expenses, excluding non-cash compensation expense related to equity awards $ 130.1 $ 81.0 $ 262.1 $ 148.0 Non-cash compensation expense related to equity awards 20.3 9.6 38.7 18.9 Total selling, general and administrative expenses $ 150.4 $ 90.6 $ 300.8 $ 166.9 SG&A expenses, excluding non-cash compensation expense related to equity awards, increased in the three and six months ended June 30, 2026 compared to the same periods in 2025 primarily due to investments related to commercialization efforts for TRYNGOLZA and DAWNZERA as well as launch preparation activities for 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): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Investment income $ 20.2 $ 24.7 $ 45.7 $ 49.4 Investment income for the three and six months ended June 30, 2026 decreased compared to the same periods in 2025 due to a decrease in our cash balance during the three months ended June 30, 2026 compared to the same period in 2025. Our cash balance decreased due to the repayment upon maturity of our 0% Notes due 2026 in April 2026. Interest Expense The following table sets forth information on interest expense (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Convertible notes: Non-cash amortization of debt issuance costs $ 1.6 $ 1.5 $ 3.8 $ 3.0 Interest expense payable in cash 2.5 2.5 5.0 5.1 Interest on mortgage for manufacturing facility 0.1 0.1 0.2 0.1 Other 0.4 - 0.8 - Total interest expense $ 4.6 $ 4.1 $ 9.8 $ 8.2 35 Table of Contents Interest Expense Related to Sale of Future Royalties We recorded $17.5 million and $34.8 million of interest expense related to the sale of future royalties in the three and six months ended June 30, 2026, respectively, compared to $18.6 million and $37.5 million in the same periods in 2025, respectively. 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 The following table sets forth information on gain (loss) on investments, net (in millions): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Gain (loss) on investments, net $ (10.2 ) $ (18.3 ) $ 12.4 $ (20.5 ) The period over period fluctuations in gain (loss) on investments were primarily due to changes in the fair value of investments in publicly traded biotechnology companies. Net Income (Loss) and Net Income (Loss) per Share The following table sets forth information on net income (loss) and net income (loss) per share (in millions, except per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2026 2025 2026 2025 Net income (loss) $ (114.6 ) $ 123.6 $ (207.2 ) $ (23.4 ) Basic net income (loss) per share $ (0.69 ) $ 0.78 $ (1.25 ) $ (0.15 ) Diluted net income (loss) per share $ (0.69 ) $ 0.70 $ (1.25 ) $ (0.15 ) The period-over-period fluctuations in our net income (loss) were driven by factors discussed in the sections above. Liquidity and Capital Resources We have financed our operations primarily from research and development collaborative agreements. We also financed our operations from commercial revenue from SPINRAZA, WAINUA and QALSODY royalties and TEGSEDI and WAYLIVRA commercial revenue. In addition, we began earning commercial revenue from TRYNGOLZA product sales in late December 2024 and DAWNZERA product sales in late August 2025. From our inception through June 30, 2026, we have earned approximately $9.4 billion in revenue. We have also financed our operations through the sale of our equity securities, the issuance of long-term debt and the sale of future royalties. From the time we were founded through June 30, 2026, we have raised net proceeds of approximately $2.9 billion from the sale of our equity securities. Additionally, from our inception through June 30, 2026, we have borrowed approximately $3.5 billion under long-term debt arrangements and received proceeds of $0.5 billion from the sale of future royalties to finance a portion of our operations. From December 31, 2025 to June 30, 2026, our working capital and our long-term obligations did not change significantly. In April 2026, we paid the remaining principal balance of our 0% Notes due 2026 upon maturity. Refer to Part I, Item 1, Note 11, Convertible Debt, in the Notes to Condensed Consolidated Financial Statements for further details. 36 Table of Contents The following table summarizes our contractual obligations, excluding our liability related to the sale of future royalties, as of June 30, 2026. The table provides a breakdown of when obligations become due. Contractual Obligations Payments Due by Period (in millions) (selected balances described below) Total Less than 1 year More than 1 year 0% Notes due 2030 (principal payable) $ 770.0 $ - $ 770.0 1.75% Notes due 2028 (principal and interest payable) 595.2 10.1 585.1 Operating leases 467.3 36.3 431.0 Building mortgage payments (principal and interest payable) 8.8 0.5 8.3 Other obligations (principal and interest payable) 0.6 0.1 0.5 Total $ 1,841.9 $ 47.0 $ 1,794.9 Our contractual obligations consist primarily of our convertible debt. In addition, we also have a facility mortgage, facility leases, equipment financing arrangements and other obligations. We believe our cash, cash equivalents and short-term investments, as well as plans for cash in the future, will be sufficient to fund our planned operations and these obligations. We have not entered into, nor do we currently have, any off-balance sheet arrangements (as defined under SEC rules). Convertible Debt and Call Spread Refer to Part I, Item 1, Note 11, Convertible Debt, in the Notes to Condensed Consolidated Financial Statements for the significant terms of each convertible debt instrument. Operating Facilities Refer to Part IV, Item 15, Note 7 of our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for further details on our operating facilities. Operating Leases Refer to Part IV, Item 15, Note 7 of our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025 for further details on our operating leases. Liability Related to Sale of Future Royalties Refer to Part I, Item 1, Note 10, Liability Related to Sale of Future Royalties, in the Notes to Condensed Consolidated Financial Statements for further details on our royalty purchase agreement with Royalty Pharma. Other Obligations In addition to contractual obligations, we had outstanding purchase orders as of June 30, 2026 for the purchase of services, capital equipment and materials as part of our normal course of business. We may enter into additional collaborations with partners which could provide for additional revenue to us and we may incur additional cash expenditures related to our obligations under any of the new agreements we may enter into. We currently intend to use our cash, cash equivalents and short-term investments to finance our activities. However, we may also pursue other financing alternatives, like issuing additional shares of our common stock, issuing debt instruments, refinancing our existing debt, securing lines of credit or executing royalty monetization agreements. Whether we use our existing capital resources or choose to obtain financing will depend on various factors, including the future success of our business, the prevailing interest rate environment and the condition of financial markets generally. 37 Table of Contents